Republic of the PhilippinesSUPREME COURT

Manila

1. EN BANC

G.R. No. 103702 December 6, 1994

MUNICIPALITY OF SAN NARCISO, QUEZON; MAYOR JUAN K. UY; COUNCILORS:DEOGRACIAS R. ARGOSINO III, BENITO T. CAPIO, EMMANUEL R. CORTEZ, NORMANDOMONTILLA, LEONARDO C. UY, FIDEL C. AURELLANA, PEDRO C. CARABIT, LEONARDO D.AURELLANA, FABIAN M. MEDENILLA, TRINIDAD F. CORTEZ, SALVADOR M. MEDENILLA,CERELITO B. AUREADA and FRANCISCA A. BAMBA, petitioners, vs.HON. ANTONIO V. MENDEZ, SR., Presiding Judge, Regional Trial Court, Branch 62, 4th JudicialRegion, Gumaca, Quezon; MUNICIPALITY OF SAN ANDRES, QUEZON; MAYOR FRANCISCO DELEON; COUNCILORS: FE LUPINAC, TOMAS AVERIA, MANUEL O. OSAS, WILFREDO O.FONTANIL, ENRICO U. NADRES, RODELITO LUZOIR, LENAC, JOSE L. CARABOT, DOMINGAUSA, VIDAL BANQUELES and CORAZON M. MAXIMO, respondents.

Manuel Laserna, Jr. for petitioners.

Florante Pamfilo for private respondents.

VITUG, J.:

On 20 August 1959, President Carlos P. Garcia, issued, pursuant to the then Sections 68 and 2630 of the RevisedAdministrative Code, as amended, Executive Order No. 353 creating the municipal district of San Andres,Quezon, by segregating from the municipality of San Narciso of the same province, the barrios of San Andres,Mangero, Alibijaban, Pansoy, Camflora and Tala along with their respective sitios.

Executive Order No. 353 was issued upon the request, addressed to the President and coursed through theProvincial Board of Quezon, of the municipal council of San Narciso, Quezon, in its Resolution No. 8 of 24 May1959. 1

By virtue of Executive Order No. 174, dated 05 October 1965, issued by President Diosdado Macapagal, themunicipal district of San Andres was later officially recognized to have gained the status of a fifth class municipalitybeginning 01 July 1963 by operation of Section 2 of Republic Act No. 1515. 2 The executive order added that"(t)he conversion of this municipal district into (a) municipality as proposed in House Bill No. 4864 was approvedby the House of Representatives."

On 05 June 1989, the Municipality of San Narciso filed a petition for quo warranto with the Regional Trial Court,Branch 62, in Gumaca, Quezon, against the officials of the Municipality of San Andres. Docketed Special CivilAction No. 2014-G, the petition sought the declaration of nullity of Executive Order No. 353 and prayed thatthe respondent local officials of the Municipality of San Andres be permanently ordered to refrain from performingthe duties and functions of their respective offices. 3 Invoking the ruling of this Court in Pelaez v. Auditor General,4 the petitioning municipality contended that Executive Order No. 353, a presidential act, was a clear usurpationof the inherent powers of the legislature and in violation of the constitutional principle of separation of powers.Hence, petitioner municipality argued, the officials of the Municipality or Municipal District of San Andres hadno right to exercise the duties and functions of their respective offices that righfully belonged to the correspondingofficials of the Municipality of San Narciso.

In their answer, respondents asked for the dismissal of the petition, averring, by way of affirmative and specialdefenses, that since it was at the instance of petitioner municipality that the Municipality of San Andres wasgiven life with the issuance of Executive Order No. 353, it (petitioner municipality) should be deemed estoppedfrom questioning the creation of the new municipality; 5 that because the Municipality of San Andred had beenin existence since 1959, its corporate personality could no longer be assailed; and that, considering the petitionto be one for quo warranto, petitioner municipality was not the proper party to bring the action, thatprerogative being reserved to the State acting through the Solicitor General. 6

On 18 July 1991, after the parties had submitted their respective pre-trial briefs, the trial court resolved to deferaction on the motion to dismiss and to deny a judgment on the pleadings.

On 27 November 1991, the Municipality of San Andres filed anew a motion to dismiss alleging that the casehad become moot and academic with the enactment of Republic Act No. 7160, otherwise known as the LocalGovernment Code of 1991, which took effect on 01 January 1991. The movant municipality cited Section442(d) of the law, reading thusly:

Sec. 442. Requisites for Creation. — . . .

(d) Municipalities existing as of the date of the effectivity of this Code shall continue to exist andoperate as such. Existing municipal districts organized pursuant to presidential issuances orexecutive orders and which have their respective set of elective municipal officials holding office atthe time of the effectivity of this Code shall henceforth be considered as regular municipalities.

The motion was opposed by petitioner municipality, contending that the above provision of law wasinapplicable to the Municipality of San Andres since the enactment referred to legally existingmunicipalities and not to those whose mode of creation had been void ab initio. 7

In its Order of 02 December 1991, the lower court 8 finally dismissed the petition 9 for lack of cause of actionon what it felt was a matter that belonged to the State, adding that "whatever defects (were) present in thecreation of municipal districts by the President pursuant to presidential issuances and executive orders, (were)cured by the enactment of R.A. 7160, otherwise known as Local Government Code of 1991." In an order,dated 17 January 1992, the same court denied petitioner municipality's motion for reconsideration.

Hence, this petition "for review on certiorari." Petitioners 10 argue that in issuing the orders of 02 December1991 and 17 January 1992, the lower court has "acted with grave abuse of discretion amounting to lack of orin excess of jurisdiction." Petitioners assert that the existence of a municipality created by a null and voidpresidential order may be attacked either directly or even collaterally by anyone whose interests or rights areaffected, and that an unconstitutional act is not a law, creates no office and is inoperative such as though its hasnever been passed. 11

Petitioners consider the instant petition to be one for "review on certiorari" under Rules 42 and 45 of the Rulesof Court; at the same time, however, they question the orders of the lower court for having been issued with"grave abuse of discretion amounting to lack of or in excess of jurisdiction, and that there is no other plain,speedy and adequate remedy in the ordinary course of law available to petitioners to correct said Orders, toprotect their rights and to secure a final and definitive interpretation of the legal issues involved." 12 Evidently,then, the petitioners intend to submit their case in this instance under Rule 65. We shall disregard theprocedural incongruence.

The special civil action of quo warranto is a "prerogative writ by which the Government can call upon anyperson to show by what warrant he holds a public office or exercises a public franchise." 13 When the inquiryis focused on the legal existence of a body politic, the action is reserved to the State in a proceeding for quowarranto or any other credit proceeding. 14 It must be brought "in the name of the Republic of the Philippines"

15 and commenced by the Solicitor General or the fiscal "when directed by the President of the Philippines . . .." 16 Such officers may, under certain circumstances, bring such an action "at the request and upon the relationof another person" with the permission of the court. 17 The Rules of Court also allows an individual to commencean action for quo warranto in his own name but this initiative can be done when he claims to be "entitled to apublic office or position usurped or unlawfully held or exercised by another." 18 While the quo warrantoproceedings filed below by petitioner municipality has so named only the officials of the Municipality of SanAndres as respondents, it is virtually, however, a denunciation of the authority of the Municipality or MunicipalDistrict of San Andres to exist and to act in that capacity.

At any rate, in the interest of resolving any further doubt on the legal status of the Municipality of San Andres,the Court shall delve into the merits of the petition.

While petitioners would grant that the enactment of Republic ActNo. 7160 may have converted the Municipality of San Andres into a de facto municipality, they, however, contendthat since the petition for quo warranto had been filed prior to the passage of said law, petitioner municipality hadacquired a vested right to seek the nullification of Executive Order No. 353, and any attempt to apply Section 442of Republic Act 7160 to the petition would perforce be violative of due process and the equal protection clauseof the Constitution.

Petitioners' theory might perhaps be a point to consider had the case been seasonably brought. Executive OrderNo. 353 creating the municipal district of San Andres was issued on 20 August 1959 but it was only after almostthirty (30) years, or on 05 June 1989, that the municipality of San Narciso finally decided to challenge the legalityof the executive order. In the meantime, the Municipal District, and later the Municipality, of San Andres, beganand continued to exercise the powers and authority of a duly created local government unit. In the same mannerthat the failure of a public officer to question his ouster or the right of another to hold a position within a one-yearperiod can abrogate an action belatedly filed, 19 so also, if not indeed with greatest imperativeness, must a quowarranto proceeding assailing the lawful authority of a political subdivision be timely raised. 20 Public interestdemands it.

Granting the Executive Order No. 353 was a complete nullity for being the result of an unconstitutionaldelegation of legislative power, the peculiar circumstances obtaining in this case hardly could offer a choice otherthan to consider the Municipality of San Andres to have at least attained a status uniquely of its own closelyapproximating, if not in fact attaining, that of a de facto municipal corporation. Conventional wisdom cannot allowit to be otherwise. Created in 1959 by virtue of Executive Order No. 353, the Municipality of San Andres hadbeen in existence for more than six years when, on 24 December 1965, Pelaez v. Auditor General was promulgated.The ruling could have sounded the call for a similar declaration of the unconstitutionality of Executive Order No.353 but it was not to be the case. On the contrary, certain governmental acts all pointed to the State's recognitionof the continued existence of the Municipality of San Andres. Thus, after more than five years as a municipaldistrict, Executive Order No. 174 classified the Municipality of San Andres as a fifth class municipality after havingsurpassed the income requirement laid out in Republic Act No. 1515. Section 31 of Batas Pambansa Blg. 129,otherwise known as the Judiciary Reorganization Act of 1980, constituted as municipal circuits, in theestablishment of Municipal Circuit Trial Courts in the country, certain municipalities that comprised themunicipal circuits organized under Administrative Order No. 33, dated 13 June 1978, issued by this Courtpursuant to Presidential Decree No. 537. Under this administrative order, the Municipality of San Andres hadbeen covered by the 10th Municipal Circuit Court of San Francisco-San Andres for the province of Quezon.

At the present time, all doubts on the de jure standing of the municipality must be dispelled. Under the Ordinance(adopted on 15 October 1986) apportioning the seats of the House of Representatives, appended to the 1987Constitution, the Municipality of San Andres has been considered to be one of the twelve (12) municipalitiescomposing the Third District of the province of Quezon. Equally significant is Section 442(d) of the LocalGovernment Code to the effect that municipal districts "organized pursuant to presidential issuances or executiveorders and which have their respective sets of elective municipal officials holding office at the time of the effectivityof (the) Code shall henceforth be considered as regular municipalities." No pretension of unconstitutionality per

se of Section 442(d) of the Local Government Code is proferred. It is doubtful whether such a pretext, evenif made, would succeed. The power to create political subdivisions is a function of the legislature. Congress didjust that when it has incorporated Section 442(d) in the Code. Curative laws, which in essence are retrospective,21 and aimed at giving "validity to acts done that would have been invalid under existing laws, as if existing lawshave been complied with," are validly accepted in this jurisdiction, subject to the usual qualification againstimpairment of vested rights. 22

All considered, the de jure status of the Municipality of San Andres in the province of Quezon must now beconceded.

WHEREFORE, the instant petition for certiorari is hereby DISMISSED. Costs against petitioners.

SO ORDERED.

Narvasa, C.J., Padilla, Bidin, Regalado, Davide, Jr., Romero, Bellosillo, Melo, Quiason, Puno, Kapunan andMendoza, JJ. concur.

Feliciano, J., is on leave.

# Footnotes

1 Present at the meeting when the municipal council of San Narciso, Quezon adoptedResolution No. 8 were Municipal Mayor Godofredo M. Tan, Vice-Mayor Jesus R. Cortez, andCouncilors Maximino F. Rivadulla, Eleuterio Aurellana, Juanito Conjares, Dominador Nadresand Felix Aurellana. Councilor Eduardo L. Ausa was absent. The reasons for the adoption ofResolution No. 8 are stated in the following clauses:

"WHEREAS, this body has been informed that the chance for the approval of thebill creating the barrios of San Andres, Mangero, Alibijaban, Pansoy, Camflora andTala, into a regular Municipality is very slim;

WHEREAS, the reason behind such disapproval is the patent inability of theproposed Municipality to pay its would-to-be (sic) employees at the rate required inthe Minimum Wage Law;

WHEREAS, this body in particular, and the great majority of the people of SanAndres in general, nowithstanding the provision of the Minimum Wage Law, agitatefor the separation or segregation of the abovementioned barrios so as to have acorporate personality in the eyes of the Provincial Board, in the eyes of Congress andin the eyes of the President;

WHEREAS, once said barrios acquire a corporate personality in the eyes of theProvincial Board, of Congress and of the President, the development of said barriosand practically the whole southern tip of the Bondoc Peninsula will be hastened.(Rollo, p. 162.)

2 This act has provided for a more autonomous government for municipal districts, amendingfor the purpose Art. VI, Chapter 64 of the Administrative Code. Sec. 2 thereof states that "anyfirst class municipal district the annual receipts of which shall average more than four thousandpesos for four consecutive fiscal years shall ipso facto be classified as a fifth class municipality andshall thereafter be governed by the provisions of Articles one to five, Chapter 64 of the sameCode."

3 Rollo, pp. 77-80.

4 15 SCRA 569, holding that the authority to create municipalities is essentially legislative innature.

5 Invoked was the Court's ruling in Municipality of Malabang v. Benito 27 SCRA 533.

6 Rollo, pp. 81-83.

7 Rollo, p. 102.

8 Presided by Judge Antonio V. Mendez, Sr.

9 Rollo, pp. 71-74.

10 Named co-petitioners of the Municipality of San Narciso before this Court are its municipalmayor and thirten (13) councilors.

11 Rollo, pp. 183-185.

12 Ibid., pp. 2 & 21; Ibid., p. 50.

13 Moran, COMMENTS ON THE RULES OF COURT, Vol. 3, 1970 ed., p. 208 citingNewman v. U.S., 238 U.S. 537, 545, 56 L.Ed. 513.

14 Only in few exceptions may a private person exercise this function of government, an exampleof which is when the state law allows a private person to question the regularity of theincorporation of an entity; see E. McQuillin, THE LAW OF MUNICIPAL CORPORATION,sec. 3.49, p. 592 (3rd ed. 1949).

15 Sec. 1(c), Rule 66, Rules of Court.

16 Sec. 3, ibid.

17 Sec. 4, ibid.

18 Sec. 6, ibid.

19 Tumulak v. Egay, 82 Phil. 828; Tavora v. Ofiana, 83 Phil. 672; Unabia v. City Mayor (99 Phil.253). In Castro v. Del Rosario (19 SCRA 196), the Court stated that the one-year limitation forfiling a quo warranto proceedings is "an expression of policy on the part of the State that personsclaiming a right to an office of which they are illegally dispossessed should immediately take stepsto recover said office and that if they do not do so within a period of one year, they shall beconsidered as having lost their right thereto by abandonment."

20 Noteworthy is Section 16, Rule 16, of the Rules of Court which sets a five-year limitation forfiling a quo warranto action if its purpose is to bring about the "forfeiture of charter" of acorporation, that period to be counted from the time "the act complained of was done orcommitted."

21 Briad Agro Development Corporation v. De la Serna, supra at p. 534; SSK Parts Corporation v.Camas, 181 SCRA 675.

22 Briad Agro Development Corporation v. De la Serna, 174 SCRA 524, 532 citingGovernment of P.I. v. Municipality of Binalonan, 32 Phil. 634.

EN BANC

1. [G.R. No. 105746. December 2, 1996]

MUNICIPALITY OF JIMENEZ, through its MAYOR ELEUTERIO A. QUIMBO, VICE MAYORROBINSON B. LOMO, COUNCILORS TEOFILO GALORIO, CASIANO ADORABLE, MARIOAPAO, ANTONIO BIENES, VEDE SULLANO, MARIETO TAN, SR., HERMINIO SERINO,BENJAMIN DANO, and CRISPULO MUNAR, and ELEUTERIO A. QUIMBO, ROBINSON B. LOMO,TEOFILI GALORIO, CASIANO ADORABLE, MARIO APAO, ANTONIO BIENES, VEDE SULLANO,MARIETO TAN SR., HERMINI SERINO, BENJAMIN DANO, and CRISPULO MUNAR, in theirprivate capacities as taxpayer in the Province of Misamis Occidental and the Municipality of Jimenez, MisamisOccidental, and BENJAMIN C. GALINDO and BENHUR B. BAUTISTA, in their private capacities astaxpayers in the Province of Misamis Occidental and the Municipality of Jimenez, Misamis Occidental,petitioners, vs., HON. VICENTE T. BAZ, JR., Presiding Judge REGIONAL TRIAL COURT, BRANCH 14,10th JUDICIAL REGION, OROQUIETA CITY, and MUNICIPALITY OF SINACABAN through itsMAYOR EUFRACIO D. LOOD, VICE MAYOR BASILIO M. BANAAG, COUNCILORSCONCEPCION E. LAGA-AC, MIGUEL F. ABCEDE, JUANITO B. TIU, CLAUDIO T. REGIL,ANCIETO S. MEJARES NAZIANCINO B. MARIQUIT, and FEDERICO QUINIMON, and THEPROVINCE OF MISAMIS OCCIDENTAL through the PROVINCIAL BOARD OF MISAMISOCCIDENTAL and its members, VICE-GOVERNOR FLORENCIO L. GARCIA, BOARD MEMBERSMARIVIC S. CHIONG, PACITA M. YAP, ALEGRIA V. CARINO, JULIO L. TIU, LEONARDO R.REGALADO II, CONSTACIO C. BALAIS and ERNESTO P. IRA, and THE COMMISSION ONAUDIT, through its Chairman, HON. EUFEMIO DOMINGO, and THE DEPARTMENT OF LOCALGOVERNMENT through its Secretary, HON. LUIS SANTOS (now HON. CESAR SARINO), and THEDEPARTMENT OF BUDGET AND MANAGEMENT, through its Secretary, HON. GUILLERMOCARAGUE (now HON. SALVADOR ENRIQUEZ), and The Hon. CATALINO MACARAOG (nowHON. FRAKLIN DRILON), EXECUTIVE SECRETARY, OFFICE OF THE PRESIDENT, respondents.

D E C I S I O N

MENDOZA, J.:

This is a petition for review of the decision dated March 4, 1992 of the Regional Trial Court, Branch 14 ofOroquieta City,[1] affirming the legal existence of the Municipality of Sinacaban in Misamis Occidental andordering the relocation of its boundary for the purpose of determining whether certain areas claimed by itbelong to it.

The antecedent facts are as follows:

The Municipality of Sinacaban was created by Executive Order No. 258 of then President Elpidio Quirino,pursuant to §68 of the Revised Administrative Code of 1917. The full text of the Order reads:

EXECUTIVE ORDER NO. 258

CREATING THE MUNICIPALITY OF SINACABAN,

IN THE PROVINCE OF MISAMIS OCCIDENTAL

Upon the recommendation of the Secretary of the Interior, and pursuant to the provisions of Section 68 of the

Revised Administrative Code, there is hereby created, in the Province of Misamis Occidental, amunicipality to be known as the municipality of Sinacaban, which shall consist of the southern portion ofthe municipality of Jimenez, Misamis Occidental, more particularly described and bounded as follows:

On the north by a line starting from point 1, the center of the lighthouse on the Tabo-o point S. 840

30’W., 7,250 meters to point 2 which is on the bank of Palilan River branch; thence following PalilanRiver branch 2,400 meters southwesterly 'to point 3, thence a straight line S 870 00’ W, 22,550 meters topoint 4, where this intersects the Misamis Occidental-Zamboanga boundary; on the west, by the presentMisamis Occidental-Zamboanga boundary; and on the south by the present Jimenez-Tudela boundary; andon the east, by the limits of the municipal waters which the municipality of Sinacaban shall have pursuantto section 2321 of the Revised Administrative Code, (Description based on data shown in Enlarged Map ofPoblacion of Jimenez, Scale 1:8:000).

The municipality of Sinacabn contains the barrios of Sinacaban, which shall be the seat of the municipalgovernment, Sinonoc, Libertad, the southern portion of the barrio of Macabayao, and the sitios of Tipan,Katipunan, Estrella, Flores, Senior, Adorable, San Isidro, Cagayanon, Kamanse, Kulupan and Libertad Alto.

The municipality of Jimenez shall have its present territory, minus the portion thereof included in themunicipality of Sinacaban.

The municipality of Sinacaban shall begin to exist upon the appointment and qualification of the mayor,vice-mayor, and a majority of the councilors thereof. The new municipality shall, however, assume paymentof a proportionate share of the loan of the municipality of Jimenez with the Rehabilitation FinanceCorporation as may be outstanding on the date of its organization, the proportion of such payment to bedetermined by the Department of Finance.

Done in the City of Manila, this 30th day of August, in the year of Our Lord, nineteen hundred and forty-nine, and of the Independence of the Philippines, the fourth.

(SGD.) ELPIDIO QUIRINO

President of the Philippines

By the President:

(SGD.) TEODORO EVANGELISTA

Executive Secretary

By virtue of Municipal Council Resolution No. 171,[2] dated November 22, 1988, Sinacaban laid claim toa portion of Barrio Tabo-o and to Barrios Macabayao, Adorable, Sinara Baja, and Sinara Alto,[3] based onthe technical description in E.O. No. 258. The claim was filed with the Provincial Board of MisamisOccidental against the Municipality of Jimenez.

In its answer, the Municipality of Jimenez, while conceding that under E.O. No. 258 the disputed area ispart of Sinacaban, nonetheless asserted jurisdiction on the basis of an agreement it had with theMunicipality of Sinacaban. This agreement was approved by the Provincial Board of Misamis Occidental,in its Resolution No. 77, dated February 18, 1950, which fixed the common boundary of Sinacaban andJimenez as follows:[4]

From a point at Cagayanon Beach follow Macabayao Road until it intersects Tabangag Creek at the back ofthe Macabayao Elementary school. Follow the Tabangag Creek until it intersect the Macabayao River atupper Adorable. Follow the Macabayao River such that the barrio of Macabayao, Sitio Adorable and site

will be a part of the Jimenez down and the sitios of San Vicente, Donan, Estrella, Mapula will be a part ofSinacaban. (Emphasis added)

In its decision dated October 11, 1989,[5] the Provincial Board declared the disputed area to be part ofSinacaban. It held that the previous resolution approving the agreement between the municipalities was voidbecause the Board had no power to alter the boundaries of Sinacaban as fixed in E.O. No. 258, that powerbeing vested in Congress pursuant to the Constitution and the Local Government Code of 1983 (B.P. Blg.337), §134.[6] The Provincial Board denied in its Resolution No. 13-90 dated January 30, 1990 the motionof Jimenez seeking reconsideration.[7]

On March 20, 1990, Jimenez filed a petition for certiorari, prohibition, and mandamus in the Regional TrialCourt of Oroquieta City, Branch 14. The suit was filed against Sinacaban, the Province of Misamis Occidentaland its Provincial Board, the Commission on Audit, the Departments of Local Government, Budget andManagement, and the Executive Secretary. Jimenez alleged that, in accordance with the decision in Pelaez v.Auditor General,[8] the power to create municipalities is essentially legislative and consequently Sinacaban,which was created by an executive order, had no legal personality and no right to assert a territorial claim vis-à-vis Jimenez, of which it remains part. Jimenez prayed that Sinacaban be enjoined from assuming control andsupervision over the disputed barrios; that the Provincial Board be enjoined from assuming jurisdiction overthe claim of Sinacaban; that E.O. No. 258 be declared null and void; that the decision dated October 11,1989 and Resolution No. 13-90 of the Provincial Board be set aside for having been rendered withoutjurisdiction; that the Commission on Audit be enjoined from passing in audit any expenditure of public fundsby Sinacaban; that the Department of Budget and Management be enjoined from allotting public funds toSinacaban; and that the Executive Secretary be enjoined from exercising control and supervision over saidmunicipality.

During pre-trial, the parties agreed to limit the issues to the following:

A. Whether the Municipality of Sinacaban is a legal juridical entity, duly created in accordance with law;

B. If not, whether it is a de facto juridical entity;

C. Whether the validity of the existence of the Municipality can be properly questioned in this action oncertiorari;

D. Whether the Municipality of Jimenez which had recognized the existence of the municipality for more than40 years is estopped to question its existence;

E. Whether the existence of the municipality has been recognized by the laws of the land; and

F. Whether the decision of the Provincial Board had acquired finality.

On February 10, 1992, the RTC rendered its decision, the dispositive portion of which reads:

WHEREFORE, premises considered, it is the finding of this Court that the petition must be denied andjudgment is hereby rendered declaring a STATUS QUO, that is, the municipality of Sinacaban shall continueto exist and operate as a regular municipality; declaring the decision dated October 11, 1989 rendered by theSangguniang Panlalawigan fixing the boundaries between Sinacaban and Jimenez, Missamis Occi. as null andvoid, the same not being in accordance with the boundaries provided for in Executive order No. 258 creatingthe municipality of Sinacaban; dismissing the petition for lack of merit, without pronouncement as to cost anddamages. With respect to the counterclaim, the same is hereby ordered dismissed.

The Commissioners are hereby ordered to conduct the relocation survey of the boundary of Sinacaban within60 days from the time the decision shall have become final and executory and another 60 days within which to

submit their report from the completion of the said relocation survey.

SO ORDERED.

The RTC, inter alia, held that Sinacaban is a de facto corporation since it had completely organized itselfeven prior to the Pelaez case and exercised corporate powers for forty years before the existence wasquestioned; that Jimenez did not have the legal standing to question the existence of Sinacaban, the samebeing reserved to he State as represented by the Office of the Solicitor General in a quo warrantoproceeding; that Jimenez was estopped from questioning the legal existence of Sinacaban by entering intoan agreement with it concerning their common boundary; and that any question as to the legal existence ofSinacaban had been rendered moot by §442 (d) of the Local Government Code of 1991 (R.A. No. 7160),which provides:

Municipalities existing as of the date of the effectivity of this Code shall continue to exist and operate assuch. Existing municipal districts organized pursuant to presidential issuances or executive orders and whichhave their respective set of elective municipal officials holding office at the time of the effectivity of thisCode shall henceforth be considered as regular municipalities.

On March 17, 1990, petitioner moved for a reconsideration of the decision but its motion was denied bythe RTC. Hence this petition raising the following issues: (1) whether Sinacaban has legal personality to filea claim, and (2) if it has, whether it is the boundary provided for in E.O. No. 258 or in resolution No. 77of the Provincial Board of Misamis Occidental which should be used as the basis for adjudicatingSinacaban’s territorial claim.

First. The preliminary issue concerns the legal existence of Sinacaban. If Sinacaban legally exist, then it hasstanding to bring a claim in the Provincial Board. Otherwise, it cannot.

The principal basis for the view that Sinacaban was not validly created as a municipal corporation is theruling in Pelaez v. Auditor General that the creation of municipal corporations is essentially a legislativematter and therefore the President was without power to create by executive order the Municipality ofSinacaban. The ruling in this case has been reiterated in a number of cases[9] later decided. However, wehave since held that where a municipality created as such by executive order is later impliedly recognizedand its acts are accorded legal validity, its creation can no longer be questioned. In Municipality of SanNarciso, Quezon v. Mendez, Sr.,[10] this Court considered the following factors as having validated thecreation of a municipal corporation, which, like the Municipallity of Sinacaban, was created by executiveorder of the President before the ruling in Pelaez v. Auditor general: (1) the fact that for nearly 30 years thevalidity of the creation of the municipality had never been challenged; (2) the fact that following the rulingin Pelaez no quo warranto suit was filed to question the validity of the executive order creating suchmunicipality; and (3) the fact that the municipality was later classified as a fifth class municipality,organized as part of a municipal circuit court and considered part of a legislative district in the Constitutionapportioning the seats in the House of Representatives. Above all, it was held that whatever doubt theremight be as to the de jure character of the municipality must be deemed to have been put to rest by thelocal Government Code of 1991 (R.A. no. 7160), §442 (d) of which provides that “municipal districtsorganized pursuant to presidential issuances or executive orders and which have their respective sets ofelective officials holding office at the time of the effectivity of this Code shall henceforth be considered asregular municipalities.”

Here, the same factors are present so as to confer on Sinacaban the status of at least a de facto municipalcorporation in the sense that its legal existence has been recognized and acquiesced publicly and officially.Sinacaban had been in existence for sixteen years when Pelaez v. Auditor General was decided on December24, 1965. Yet the validity of E.O. No. 258 creating it had never been questioned. Created in 1949, it wasonly 40 years later that its existence was questioned and only because it had laid claim to an area thatapparently is desired for its revenue. This fact must be underscored because under Rule 66, §16 of the Rules

of Court, a quo warranto suit against a corporation for forfeiture of its charter must be commenced within five(5) years from the time the act complained of was done or committed. On the contrary, the State and even themunicipality of Jimenez itself have recognized Sinacaban’s corporate existence. Under Administrative order no.33 dated June 13, 1978 of this Court, as reiterated by §31 of the judiciary Reorganization Act of 1980 (B.P.Blg. 129), Sinacaban is constituted part of municipal circuit for purposes of the establishment of MunicipalCircuit Trial Courts in the country. For its part, Jimenez had earlier recognized Sinacaban in 1950 by enteringinto an agreement with it regarding their common boundary. The agreement was embodied in Resolution no.77 of the Provincial Board of Misamis Occidental.

Indeed Sinacaban has attained de jure status by virtue of the Ordinance appended to the 1987 Constitution,apportioning legislative districts throughout the country, which considered Sinacaban part of the SecondDistrict of Misamis Occidental. Moreover following the ruling in Municipality of san Narciso, Quezon v.Mendez, Sr., §442(d) of the Local Government Code of 1991 must be deemed to have cured any defect in thecreation of Sinacaban. This provision states:

Municipalities existing as of the date of the effectivity of this Code shall continue to exist and operate as such.Existing municipal district organized pursuant to presidential issuances or executive orders and which havetheir respective set of elective municipal officials holding office at the time of the effectivity of the Code shallhenceforth be considered as regular municipalities.

Second. Jimenez claims, however, that R.A. No. 7160, §442(d) is invalid, since it does not conform to theconstitutional and statutory requirements for the holding of plebiscites in the creation of newmunicipalities.[11]

This contention will not bear analysis. Since, as previously explained, Sinacaban had attained de facto status atthe time the 1987 Constitution took effect on February 2, 1987, it is not subject to the plebiscite requirement.This requirement applies only to new municipalities created for the first time under the Constitution.Actually, the requirement of plebiscite was originally contained in Art. XI, §3 of the previous Constitutionwhich took effect on January 17, 1973. It cannot, therefore, be applied to municipal corporations createdbefore, such as the municipality of Sinacaban in the case at bar.

Third. Finally Jimenez argues that the RTC erred in ordering a relocation survey of the boundary of Sinacabanbecause the barangays which Sinacaban are claiming are not enumerated in E.O. No. 258 and that in anyevent in 1950 the parties entered into an agreement whereby the barangays in question were considered part ofthe territory of Jimenez.

E.O. no. 258 does not say that Sinacaban comprises only the barrios (now called Barangays) thereinmentioned. What it say is that “Sinacaban contains” those barrios, without saying they are the only onescomprising it. The reason for this is that the technical description, containing the metes and bounds of itsterritory, is controlling. The trial court correctly ordered a relocation and consequently the question to whichthe municipality the barangays in question belong.

Now, as already stated, in 1950 the two municipalities agreed that certain barrios bellonged to Jimenez, whilecertain other ones belonged to Sinacaban. This agreement was subsequently approved by the Provincial boardof Misamis Occidental. Whether this agreement conforms to E.O. no. 258 will be determined by the result ofthe survey. Jimenez contends however, that regardless of its conformity to E.O. No, 258, the agreement asembodied in resolution No, 77 of the Provincial Board, is binding on Sinacaban. This raises the questionwhether the provincial board had authority to approve the agreement or, to put it in another way, whether ithad the power to declare certain barrios part of the one or the other municipality. We hold it did not if effectwould be to amend the area as described in E.O no. 258 creating the Municipality of Sinacaban.

At the time the Provincial Board passed Resolution No. 77 on February 18, 1950, the applicable law was§2167 of the Revised Administrative Code of 1917 which provided:

SEC. 2167. Municipal boundary disputes. – How settled. – Disputes as to jurisdiction of municipalgovernments over places or barrios shall be decided by the provincial boards of the provinces in which suchmunicipalities are situated, after an investigation at which the municipalities concerned shall be duly heard.From the decision of the provincial board appeal may be taken by the municipality aggrieved to theSecretary of the Interior [now the Office of the Executive Secretary], whose decision shall be final. Wherethe places or barrios in dispute are claimed by municipalities situated in different provinces, the provincialboards of the provinces concerned shall come to an agreement if possible, but, in the event of their failingto agree, an appeal shall be had to the Secretary of Interior [Executive Secretary], whose decision shall befinal.

As held in Pelaez v. Auditor General,[12] the power of provincial boards to settle boundary disputes is “ofan administrative nature – involving as it does, the adoption of means and ways to carry into effect the lawcreating said municipalities.” It is a power “to fix common boundary, in order to avoid or settle conflicts ofjurisdiction between adjoining municipalities.” It is thus limited to implementing the law creating amunicipality. It is obvious that any alteration of boundaries that is not in accordance with the law creating amunicipality is not the carrying into effect of that law but its amendment.[13] If, therefore, Resolution No.77 of the Provincial Board of Misamis Occidental is contrary to the technical description of the territory ofSinacaban, it cannot be used by Jimenez as basis for opposing the claim of Sinacaban.

Jimenez properly brought to the RTC for review the decision of October 11, 1989 and Resolution No. 13-90 of the Provincial Board. Its action is in accordance with the local Government Code of 1983, §79 ofwhich provides that I case no settlement of boundary disputes is made the dispute should be elevated to theRTC of the province. In 1989, when the action was brought by Jimenez, this Code was the governing law.The governing law is now the Local Government Code of 1991 (R.A. No. 7160), §§118-119.

Jimenez’s contention that the RTC failed to decide the case “within one year form the start of proceeding”as required by §79 of the Local Government Code of 1983 and the 90-day period provided for in theArticle VIII, §15 of the Constitution does not affect the validity of the decision rendered. For even grantingthat the court failed to decide within the period prescribed by law, its failure did not divest it of itsjurisdiction to decide the case but only makes the judge thereof liable for possible administrativesanction.[14]

WHEREFORE, the petition is DENIED and the decision of the Regional Trial Court of Oroquieta City,Branch 14 is AFFIRMED.

SO ORDERED

Narvasa C.J., Padilla, Regalado, Davide Jr., Romero, Bellosillo, Melo, Puno, Vitug, Kapunan, Francisco,Hermosisima Jr., Panganiban, and Torres, Jr., JJ., concur.

[1] Per Judge Vicente T. Baz, Jr.

[2] Petition, Annex Z; Rollo, pp. 183-184.

[3] These barrios are currently under Jimenez’s jurisdiction. Jimenez claims that Sinacaban filed itsterritotial claim because it desired the revenues from the oil mill in Tabo-o.

[4] Petition, Annex GG; Rollo, p. 220.

[5] Id., Annex BB; Id., pp. 186-188.

[6] B.P. Blg. 337,§134 provides:

§134 Manner of Creation.- A municipality may be created, named and its boundaries defined, altered ormodified only by an Act of the Batasang Pambansa, subject to the approval by a majority of the votes cast in aplebiscite to be held in the unit or units affected. Except as may be otherwise be provided in said Act, theplebiscite shall be conducted by the Commission on Elections within one hundred twenty days from the dateof its effectivity.

[7] Petition, Annex EE; Rollo, p. 194.

[8] 122 Phil. 965 (1965).

[9] Municipality of San Joaquin v. Siva, 19 SCRA 599 (1967); Municipality of Malabang. Lanao del Sur v.Benito, 27 SCRA 533 (1969); Municipality of Kapalong v. Moya, 166 SCRA 70 (1985).

[10] 239 SCRA 11 (1994). Accord, Municipality of Candijay v. Court of Appeals, 251 SCRA 530 (1995).

[11] Petitioner cites the following:

CONST., Art, X, §10. No province, city, municipality, or barangay may be created, divided, merged,abolished, or its boundary substantially altered, except in accordance with the criteria established in the localgovernment code and subject to approval by a majority of the votes cast in a plebiscite in the political unitsdirectly affected.

R.A. No. 7160, §10. Plebiscite Requirement. – No creation, division, merger, abolition, or substantialaltercation of boundaries of local government units shall take effect unless approved by a majority of the votescast in a plebiscite called for the purpose in the political unit or units directly affected. Said plebiscite shall beconducted by the Commission on Elections (Comelec) within one hundred twenty (120) days from the dateof effectivity of the law or ordinance affecting such action, unless said law or ordinance fixes another date.

Id., §441. Manner of Creation. - A municipality may be craeted, divided, merged, abolished, or its boundarysubstantially altered only by an Act of Congress and subject to the approval by a majority of the votes cast in aplebiscite to be conducted by the Comelec in the local government unit or units directly affected. Except asmay otherwise be provided in the said Act, the plebiscite shall be held within one hundred twenty (120) daysfrom the date of its effectivity.

[12] 122 Phil. at 973.

[13] Which only Congress can do. See Municipality of Sogod v. Rosal, 201 SCRA 232 (1991).

[14] Marcelino v. Cruz, Jr., 121 SCRA 51 (1983).

EN BANC

1. [G.R. No. 100152. March 31, 2000]

ACEBEDO OPTICAL COMPANY, INC., petitioner, vs. THE HONORABLE COURT OFAPPEALS, Hon. MAMINDIARA MANGOTARA, in his capacity as Presiding Judge of the RTC,12th Judicial Region, Br. 1, Iligan City; SAMAHANG OPTOMETRIST Sa PILIPINAS - Iligan CityChapter, LEO T. CAHANAP, City Legal Officer, and Hon. CAMILO P. CABILI, City Mayor ofIligan, respondents.

D E C I S I O N

PURISIMA, J.:

At bar is a petition for review under Rule 45 of the Rules of Court seeking to nullify the dismissal by theCourt of Appeals of the original petition for certiorari, prohibition and mandamus filed by the hereinpetitioner against the City Mayor and City Legal Officer of Iligan and the Samahang Optometrist sa Pilipinas- Iligan Chapter (SOPI, for brevity).

The antecedent facts leading to the filing of the instant petition are as follows:

Petitioner applied with the Office of the City Mayor of Iligan for a business permit. After consideration ofpetitioner’s application and the opposition interposed thereto by local optometrists, respondent City Mayorissued Business Permit No. 5342 subject to the following conditions:

1. Since it is a corporation, Acebedo cannot put up an optical clinic but only a commercial store;

2. Acebedo cannot examine and/or prescribe reading and similar optical glasses for patients, because these arefunctions of optical clinics;

3. Acebedo cannot sell reading and similar eyeglasses without a prescription having first been made by anindependent optometrist (not its employee) or independent optical clinic. Acebedo can only sell directly to thepublic, without need of a prescription, Ray-Ban and similar eyeglasses;

4. Acebedo cannot advertise optical lenses and eyeglasses, but can advertise Ray-Ban and similar glasses andframes;

5. Acebedo is allowed to grind lenses but only upon the prescription of an independent optometrist.[1]

On December 5, 1988, private respondent Samahan ng Optometrist Sa Pilipinas (SOPI), Iligan Chapter,through its Acting President, Dr. Frances B. Apostol, lodged a complaint against the petitioner before theOffice of the City Mayor, alleging that Acebedo had violated the conditions set forth in its business permitand requesting the cancellation and/or revocation of such permit.

Acting on such complaint, then City Mayor Camilo P. Cabili designated City Legal Officer Leo T. Cahanapto conduct an investigation on the matter. On July 12, 1989, respondent City Legal Officer submitted areport to the City Mayor finding the herein petitioner guilty of violating all the conditions of its businesspermit and recommending the disqualification of petitioner from operating its business in Iligan City. Thereport further advised that no new permit shall be granted to petitioner for the year 1989 and should only begiven time to wind up its affairs.

On July 19, 1989, the City Mayor sent petitioner a Notice of Resolution and Cancellation of BusinessPermit effective as of said date and giving petitioner three (3) months to wind up its affairs.

On October 17, 1989, petitioner brought a petition for certiorari, prohibition and mandamus with prayer forrestraining order/preliminary injunction against the respondents, City Mayor, City Legal Officer andSamahan ng Optometrists sa Pilipinas-Iligan City Chapter (SOPI), docketed as Civil Case No. 1497 beforethe Regional Trial Court of Iligan City, Branch I. Petitioner alleged that (1) it was denied due processbecause it was not given an opportunity to present its evidence during the investigation conducted by theCity Legal Officer; (2) it was denied equal protection of the laws as the limitations imposed on its businesspermit were not imposed on similar businesses in Iligan City; (3) the City Mayor had no authority to imposethe special conditions on its business permit; and (4) the City Legal Officer had no authority to conduct theinvestigation as the matter falls within the exclusive jurisdiction of the Professional Regulation Commissionand the Board of Optometry.

Respondent SOPI interposed a Motion to Dismiss the Petition on the ground of non-exhaustion ofadministrative remedies but on November 24, 1989, Presiding Judge Mamindiara P. Mangotara deferredresolution of such Motion to Dismiss until after trial of the case on the merits. However, the prayer for a writof preliminary injunction was granted. Thereafter, respondent SOPI filed its answer.

On May 30, 1990, the trial court dismissed the petition for failure to exhaust administrative remedies, anddissolved the writ of preliminary injunction it earlier issued. Petitioner’s motion for reconsideration met thesame fate. It was denied by an Order dated June 28, 1990.

On October 3, 1990, instead of taking an appeal, petitioner filed a petition for certiorari, prohibition andmandamus with the Court of Appeals seeking to set aside the questioned Order of Dismissal, branding thesame as tainted with grave abuse of discretion on the part of the trial court.

On January 24, 1991, the Ninth Division[2] of the Court of Appeals dismissed the petition for lack of merit.Petitioner’s motion reconsideration was also denied in the Resolution dated May 15, 1991.

Undaunted, petitioner has come before this court via the present petition, theorizing that:

A.

THE RESPONDENT COURT, WHILE CORRECTLY HOLDING THAT THE RESPONDENT CITYMAYOR ACTED BEYOND HIS AUTHORITY IN IMPOSING THE SPECIAL CONDITIONS INTHE PERMIT AS THEY HAD NO BASIS IN ANY LAW OR ORDINANCE, ERRED IN HOLDINGTHAT THE SAID SPECIAL CONDITIONS NEVERTHELESS BECAME BINDING ONPETITIONER UPON ITS ACCEPTANCE THEREOF AS A PRIVATE AGREEMENT ORCONTRACT.

B.

THE RESPONDENT COURT OF APPEALS ERRED IN HOLDING THAT THE CONTRACTBETWEEN PETITIONER AND THE CITY OF ILIGAN WAS ENTERED INTO BY THE LATTER INTHE PERFORMANCE OF ITS PROPRIETARY FUNCTIONS.

The petition is impressed with merit.

Although petitioner agrees with the finding of the Court of Appeals that respondent City Mayor actedbeyond the scope of his authority in imposing the assailed conditions in subject business permit, it has

excepted to the ruling of the Court of Appeals that the said conditions nonetheless became binding onpetitioner, once accepted, as a private agreement or contract. Petitioner maintains that the said specialconditions are null and void for being ultra vires and cannot be given effect; and therefore, the principle ofestoppel cannot apply against it.

On the other hand, the public respondents, City Mayor and City Legal Officer, private respondent SOPI andthe Office of the Solicitor General contend that as a valid exercise of police power, respondent City Mayorhas the authority to impose, as he did, special conditions in the grant of business permits.

Police power as an inherent attribute of sovereignty is the power to prescribe regulations to promote thehealth, morals, peace, education, good order or safety and general welfare of the people.[3] The State,through the legislature, has delegated the exercise of police power to local government units, as agencies ofthe State, in order to effectively accomplish and carry out the declared objects of their creation.[4] Thisdelegation of police power is embodied in the general welfare clause of the Local Government Code whichprovides:

Sec. 16. General Welfare. - Every local government unit shall exercise the powers expressly granted, thosenecessarily implied therefrom, as well as powers necessary, appropriate, or incidental for its efficient and effectivegovernance, and those which are essential to the promotion of the general welfare. Within their respective territorialjurisdictions, local government units shall ensure and support, among other things, the preservation and enrichmentof culture, promote health and safety, enhance the right of the people to a balanced ecology, encourage and supportthe 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 andorder, and preserve the comfort and convenience of their inhabitants.

The scope of police power has been held to be so comprehensive as to encompass almost all matters affectingthe health, safety, peace, order, morals, comfort and convenience of the community. Police power isessentially regulatory in nature and the power to issue licenses or grant business permits, if exercised for aregulatory and not revenue-raising purpose, is within the ambit of this power.[5]

The authority of city mayors to issue or grant licenses and business permits is beyond cavil. It is provided forby law.

Section 171, paragraph 2 (n) of Batas Pambansa Bilang 337 otherwise known as the Local Government Codeof 1983, reads:

Sec. 171. The City Mayor shall:

x x x

n) Grant or refuse to grant, pursuant to law, city licenses or permits, and revoke the same for violation of lawor ordinance or the conditions upon which they are granted.

However, the power to grant or issue licenses or business permits must always be exercised in accordancewith law, with utmost observance of the rights of all concerned to due process and equal protection of thelaw.

Succinct and in point is the ruling of this Court, that:

"x x x While a business may be regulated, such regulation must, however, be within the bounds of reason, i. e., theregulatory ordinance must be reasonable, and its provision cannot be oppressive amounting to an arbitraryinterference with the business or calling subject of regulation. A lawful business or calling may not, under the guiseof regulation, be unreasonably interfered with even by the exercise of police power. xxx

xxx xxx xxx

xxx The exercise of police power by the local government is valid unless it contravenes the fundamental law of theland or an act of the legislature, or unless it is against public policy or is unreasonable, oppressive, partial,discriminating or in derogation of a common right."[6]

In the case under consideration, the business permit granted by respondent City Mayor to petitioner wasburdened with several conditions. Petitioner agrees with the holding by the Court of Appeals that respondentCity Mayor acted beyond his authority in imposing such special conditions in its permit as the same have nobasis in the law or ordinance. Public respondents and private respondent SOPI, on the other hand, are one insaying that the imposition of said special conditions on petitioner’s business permit is well within theauthority of the City Mayor as a valid exercise of police power.

As aptly discussed by the Solicitor General in his Comment, the power to issue licenses and permitsnecessarily includes the corollary power to revoke, withdraw or cancel the same. And the power to revoke orcancel, likewise includes the power to restrict through the imposition of certain conditions. In the case ofAustin-Hardware, Inc. vs. Court of Appeals,[7] it was held that the power to license carries with it theauthority to provide reasonable terms and conditions under which the licensed business shall be conducted.As the Solicitor General puts it:

"If the City Mayor is empowered to grant or refuse to grant a license, which is a broader power, it stands to reasonthat he can also exercise a lesser power that is reasonably incidental to his express power, i. e. to restrict a licensethrough the imposition of certain conditions, especially so that there is no positive prohibition to the exercise of suchprerogative by the City Mayor, nor is there any particular official or body vested with such authority"[8]

However, the present inquiry does not stop there, as the Solicitor General believes. The power or authority ofthe City Mayor to impose conditions or restrictions in the business permit is indisputable. What petitionerassails are the conditions imposed in its particular case which, it complains, amount to a confiscation of thebusiness in which petitioner is engaged.

Distinction must be made between the grant of a license or permit to do business and the issuance of alicense to engage in the practice of a particular profession. The first is usually granted by the local authoritiesand the second is issued by the Board or Commission tasked to regulate the particular profession. A businesspermit authorizes the person, natural or otherwise, to engage in business or some form of commercialactivity. A professional license, on the other hand, is the grant of authority to a natural person to engage inthe practice or exercise of his or her profession.

In the case at bar, what is sought by petitioner from respondent City Mayor is a permit to engage in thebusiness of running an optical shop. It does not purport to seek a license to engage in the practice ofoptometry as a corporate body or entity, although it does have in its employ, persons who are duly licensedto practice optometry by the Board of Examiners in Optometry.

The case of Samahan ng Optometrists sa Pilipinas vs. Acebedo International Corporation, G.R. No. 117097,[9]promulgated by this Court on March 21, 1997, is in point. The factual antecedents of that case are similar tothose of the case under consideration and the issue ultimately resolved therein is exactly the same issue posedfor resolution by this Court en banc.

In the said case, the Acebedo International Corporation filed with the Office of the Municipal Mayor anapplication for a business permit for the operation of a branch of Acebedo Optical in Candon, Ilocos Sur.The application was opposed by the Samahan ng Optometrists sa Pilipinas-Ilocos Sur Chapter, theorizingthat Acebedo is a juridical entity not qualified to practice optometry. A committee was created by the Officeof the Mayor to study private respondent’s application. Upon recommendation of the said committee,

Acebedo’s application for a business permit was denied. Acebedo filed a petition with the Regional TrialCourt but the same was dismissed. On appeal, however, the Court of Appeals reversed the trial court’sdisposition, prompting the Samahan ng Optometrists to elevate the matter to this Court.

The First Division of this Court, then composed of Honorable Justice Teodoro Padilla, Josue Bellosillo, JoseVitug and Santiago Kapunan, with Honorable Justice Regino Hermosisima, Jr. as ponente, denied thepetition and ruled in favor of respondent Acebedo International Corporation, holding that "the fact thatprivate respondent hires optometrists who practice their profession in the course of their employment inprivate respondent’s optical shops, does not translate into a practice of optometry by private respondentitself."[10] The Court further elucidated that in both the old and new Optometry Law, R.A. No. 1998,superseded by R.A. No. 8050, it is significant to note that there is no prohibition against the hiring bycorporations of optometrists. The Court concluded thus:

"All told, there is no law that prohibits the hiring by corporations of optometrists or considers the hiring bycorporations of optometrists as a practice by the corporation itself of the profession of optometry."

In the present case, the objective of the imposition of subject conditions on petitioner’s business permitcould be attained by requiring the optometrists in petitioner’s employ to produce a valid certificate ofregistration as optometrist, from the Board of Examiners in Optometry. A business permit is issued primarilyto regulate the conduct of business and the City Mayor cannot, through the issuance of such permit, regulatethe practice of a profession, like that of optometry. Such a function is within the exclusive domain of theadministrative agency specifically empowered by law to supervise the profession, in this case the ProfessionalRegulations Commission and the Board of Examiners in Optometry.

It is significant to note that during the deliberations of the bicameral conference committee of the Senate andthe House of Representatives on R.A. 8050 (Senate Bill No. 1998 and House Bill No. 14100), thecommittee failed to reach a consensus as to the prohibition on indirect practice of optometry bycorporations. The proponent of the bill, former Senator Freddie Webb, admitted thus:

"Senator Webb: xxx xxx xxx

The focus of contention remains to be the proposal of prohibiting the indirect practice of optometry bycorporations. We took a second look and even a third look at the issue in the bicameral conference, but acompromise remained elusive."[11]

Former Senator Leticia Ramos-Shahani likewise voted her reservation in casting her vote:

"Senator Shahani: Mr. President

The optometry bills have evoked controversial views from the members of the panel. While we realize theneed to uplift the standards of optometry as a profession, the consensus of both Houses was to avoidtouching sensitive issues which properly belong to judicial determination. Thus, the bicameral conferencecommittee decided to leave the issue of indirect practice of optometry and the use of trade names open to thewisdom of the Courts which are vested with the prerogative of interpreting the laws."[12]

From the foregoing, it is thus evident that Congress has not adopted a unanimous position on the matter ofprohibition of indirect practice of optometry by corporations, specifically on the hiring and employment oflicensed optometrists by optical corporations. It is clear that Congress left the resolution of such issue forjudicial determination, and it is therefore proper for this Court to resolve the issue.

Even in the United States, jurisprudence varies and there is a conflict of opinions among the federal courts asto the right of a corporation or individual not himself licensed, to hire and employ licensed optometrists.[13]

Courts have distinguished between optometry as a learned profession in the category of law and medicine,and optometry as a mechanical art. And, insofar as the courts regard optometry as merely a mechanical art,they have tended to find nothing objectionable in the making and selling of eyeglasses, spectacles and lensesby corporations so long as the patient is actually examined and prescribed for by a qualified practitioner.[14]

The primary purpose of the statute regulating the practice of optometry is to insure that optometrical servicesare to be rendered by competent and licensed persons in order to protect the health and physical welfare ofthe people from the dangers engendered by unlicensed practice. Such purpose may be fully accomplishedalthough the person rendering the service is employed by a corporation.[15]

Furthermore, it was ruled that the employment of a qualified optometrist by a corporation is not againstpublic policy.[16] Unless prohibited by statutes, a corporation has all the contractual rights that anindividual has[17] and it does not become the practice of medicine or optometry because of the presence of aphysician or optometrist.[18] The manufacturing, selling, trading and bartering of eyeglasses and spectaclesas articles of merchandise do not constitute the practice of optometry. [19]

In the case of Dvorine vs. Castelberg Jewelry Corporation,[20] defendant corporation conducted as part of itsbusiness, a department for the sale of eyeglasses and the furnishing of optometrical services to its clients. Itemployed a registered optometrist who was compensated at a regular salary and commission and who wasfurnished instruments and appliances needed for the work, as well as an office. In holding that thecorporation was not engaged in the practice of optometry, the court ruled that there is no public policyforbidding the commercialization of optometry, as in law and medicine, and recognized the general practiceof making it a commercial business by advertising and selling eyeglasses.

To accomplish the objective of the regulation, a state may provide by statute that corporations cannot selleyeglasses, spectacles, and lenses unless a duly licensed physician or a duly qualified optometrist is in chargeof, and in personal attendance at the place where such articles are sold.[21] In such a case, the patient’sprimary and essential safeguard lies in the optometrist’s control of the "treatment" by means of prescriptionand preliminary and final examination.[22]

In analogy, it is noteworthy that private hospitals are maintained by corporations incorporated for thepurpose of furnishing medical and surgical treatment. In the course of providing such treatments, thesecorporations employ physicians, surgeons and medical practitioners, in the same way that in the course ofmanufacturing and selling eyeglasses, eye frames and optical lenses, optical shops hire licensed optometrists toexamine, prescribe and dispense ophthalmic lenses. No one has ever charged that these corporations areengaged in the practice of medicine. There is indeed no valid basis for treating corporations engaged in thebusiness of running optical shops differently.

It also bears stressing, as petitioner has pointed out, that the public and private respondents did not appealfrom the ruling of the Court of Appeals. Consequently, the holding by the Court of Appeals that the act ofrespondent City Mayor in imposing the questioned special conditions on petitioner’s business permit is ultravires cannot be put into issue here by the respondents. It is well-settled that:

"A party who has not appealed from the decision may not obtain any affirmative relief from the appellate courtother than what he had obtain from the lower court, if any, whose decision is brought up on appeal.[23]

xxx an appellee who is not an appellant may assign errors in his brief where his purpose is to maintain thejudgment on other grounds, but he cannot seek modification or reversal of the judgment or affirmative relief unlesshe has also appealed."[24]

Thus, respondents’ submission that the imposition of subject special conditions on petitioner’s businesspermit is not ultra vires cannot prevail over the finding and ruling by the Court of Appeals from which they

(respondents) did not appeal.

Anent the second assigned error, petitioner maintains that its business permit issued by the City Mayor is nota contract entered into by Iligan City in the exercise of its proprietary functions, such that althoughpetitioner agreed to such conditions, it cannot be held in estoppel since ultra vires acts cannot be given effect.

Respondents, on the other hand, agree with the ruling of the Court of Appeals that the business permit inquestion is in the nature of a contract between Iligan City and the herein petitioner, the terms and conditionsof which are binding upon agreement, and that petitioner is estopped from questioning the same. Moreover,in the Resolution denying petitioner’s motion for reconsideration, the Court of Appeals held that thecontract between the petitioner and the City of Iligan was entered into by the latter in the performance of itsproprietary functions.

This Court holds otherwise. It had occasion to rule that a license or permit is not in the nature of a contractbut a special privilege.

"xxx a license or a permit is not a contract between the sovereignty and the licensee or permitee, and is not aproperty in the constitutional sense, as to which the constitutional proscription against impairment of the obligationof contracts may extend. A license is rather in the nature of a special privilege, of a permission or authority to dowhat is within its terms. It is not in any way vested, permanent or absolute."[25]

It is therefore decisively clear that estoppel cannot apply in this case. The fact that petitioner acquiesced inthe special conditions imposed by the City Mayor in subject business permit does not preclude it fromchallenging the said imposition, which is ultra vires or beyond the ambit of authority of respondent CityMayor. Ultra vires acts or acts which are clearly beyond the scope of one’s authority are null and void andcannot be given any effect. The doctrine of estoppel cannot operate to give effect to an act which is otherwisenull and void or ultra vires.

The Court of Appeals erred in adjudging subject business permit as having been issued by respondent CityMayor in the performance of proprietary functions of Iligan City. As hereinabove elaborated upon, theissuance of business licenses and permits by a municipality or city is essentially regulatory in nature. Theauthority, which devolved upon local government units to issue or grant such licenses or permits, isessentially in the exercise of the police power of the State within the contemplation of the general welfareclause of the Local Government Code.

WHEREFORE, the petition is GRANTED; the Decision of the Court of Appeals in CA-GR SP No. 22995REVERSED; and the respondent City Mayor is hereby ordered to reissue petitioner’s business permit inaccordance with law and with this disposition. No pronouncement as to costs.

SO ORDERED.

Bellosillo, Puno, Mendoza, Quisumbing, Buena, Gonzaga-Reyes, Ynares-Santiago, and De Leon, Jr., JJ., concur.

Kapunan, J., see concurring opinion.

Vitug, J., please see dissent.

Davide, Jr., C.J., Melo, Panganiban, and Pardo, JJ., joined Mr. Justice Vitug in his dissent.

[1] Annex A to Memorandum of Respondent City Mayor and City Legal Officer of Iligan, Rollo, p. 231-232.

[2] Associate Justice Luis Javellana, ponente; Associate Justice Alfredo Marigomen and Associate JusticeArtemon Luna, members.

[3] Binay vs. Domingo, 201 SCRA 508.

[4] Tatel vs. Municipality of Virac, 207 SCRA 157.

[5] Procter and Gamble Phils. vs. The Municipality of Jagna, 94 SCRA 894.

[6] Balacuit vs. CFI of Agusan del Norte, 163 SCRA 182.

[7] 69 SCRA 564.

[8] Comment by the Solicitor General, p. 8; Rollo, p. 78.

[9] 270 SCRA 298.

[10] Ibid, p. 306.

[11] Saturday, June 3, 1995, "Approval of the Conference Committee Report on S. No. 1998 and H. No.14100, Record of the Senate, p. 847.

[12] Ibid.

[13] 128 ALR 586.

[14] House of $8.50 Eyeglasses, Inc. vs. State Board of Optometry, 288 Ala 349, 261 So 2d 27; State ex rel.Board of Optometry vs. Sears Roebuck and Co., 102 Ariz 175, 427 Pd 126.

[15] Silver v. Lansburgh and Brother, 72 App DC 77, 11 F2d 518, 128 ALR 582; 61 Am Jur 2d 289.

[16] Georgia State Examiners v. Friedman’s Jewelers (183 Ga 669, 189 SE 238).

[17] State ex rel McKittrick vs. Gate City Optical Co., 339 Mo 427, 97 SW 2d 89).

[18] Dickson vs. Flynn, 246 App Div 341, 286 NYS 225.

[19] State ex rel. Brother vs. Beck Jewelry Enterprises, Inc., 220 Ind. 276, 41 NE 2d 622, 141 ALR 876) (61Am Jur 187); Kindy Opticians, Inc. vs. State Board of Examiners in Optometry, 1939, 291 Mich 152, 289NW 112, 113; New Jersey State Bd. of Optometrists vs. S.S. Kresge Co., 113 NJL 287, 174 A 353).

[20] Dvorine vs. Castelberg Jewelry Corp., 170 Md. 661, 185 A 562.

[21] Roschen vs. Ward, 279 US 337, 73 L Ed 722, 49 S Ct 336.

[22] Small and Maine Board of Registration and examination in Optometry, 293 A 2d 786.

[23] Policarpio vs. CA, 269 SCRA 344; Pison-Arceo Agricultural and Development Corporation vs. NLRC,279 SCRA 312; Quintanilla vs. CA, 279 SCRA 397.

[24] La Campana Food Products, Inc. vs. Philippine Commercial and Industrial Bank, 142 SCRA 394, 398.

[25] Gonzalo Sy Trading vs. Central Bank, 70 SCRA 570.

Republic of the PhilippinesSUPREME COURT

Manila

1. FIRST DIVISION

G.R. No. 135962 March 27, 2000

METROPOLITAN MANILA DEVELOPMENT AUTHORITY, petitioner, vs.BEL-AIR VILLAGE ASSOCIATION, INC., respondent.

PUNO, J.:

Not infrequently, the government is tempted to take legal shortcuts solve urgent problems of the people. Buteven when government is armed with the best of intention, we cannot allow it to run roughshod over the ruleof law. Again, we let the hammer fall and fall hard on the illegal attempt of the MMDA to open for public usea private road in a private subdivision. While we hold that the general welfare should be promoted, we stress thatit should not be achieved at the expense of the rule of law.

Petitioner MMDA is a government agency tasked with the delivery of basic services in Metro Manila.Respondent Bel-Air Village Association, Inc. (BAVA) is a non-stock, non-profit corporation whose members arehomeowners in Bel-Air Village, a private subdivision in Makati City. Respondent BAVA is the registered ownerof Neptune Street, a road inside Bel-Air Village.

On December 30, 1995, respondent received from petitioner, through its Chairman, a notice dated December22, 1995 requesting respondent to open Neptune Street to public vehicular traffic starting January 2, 1996. Thenotice reads:

SUBJECT: NOTICE of the Opening of Neptune Street to Traffic.

Dear President Lindo,

Please be informed that pursuant to the mandate of the MMDA law or Republic Act No. 7924which requires the Authority to rationalize the use of roads and/or thoroughfares for the safe andconvenient movement of persons, Neptune Street shall be opened to vehicular traffic effectiveJanuary 2, 1996.

In view whereof, the undersigned requests you to voluntarily open the points of entry and exit on saidstreet.

Thank you for your cooperation and whatever assistance that may be extended by your associationto the MMDA personnel who will be directing traffic in the area.

Finally, we are furnishing you with a copy of the handwritten instruction of the President on thematter.

Very truly yours,

PROSPERO I. ORETA

Chairman 1

On the same day, respondent was apprised that the perimeter wall separating the subdivision from theadjacent Kalayaan Avenue would be demolished.

On January 2, 1996, respondent instituted against petitioner before the Regional Trial Court, Branch 136,Makati City, Civil Case No. 96-001 for injunction. Respondent prayed for the issuance of a temporaryrestraining order and preliminary injunction enjoining the opening of Neptune Street and prohibiting thedemolition of the perimeter wall. The trial court issued a temporary restraining order the following day.

On January 23, 1996, after due hearing, the trial court denied issuance of a preliminary injunction. 2 Respondentquestioned the denial before the Court of Appeals in CA-G.R. SP No. 39549. The appellate court conductedan ocular inspection of Neptune Street 3 and on February 13, 1996, it issued a writ of preliminary injunctionenjoining the implementation of the MMDA's proposed action. 4

On January 28, 1997, the appellate court rendered a Decision on the merits of the case finding that the MMDAhas no authority to order the opening of Neptune Street, a private subdivision road and cause the demolition ofits perimeter walls. It held that the authority is lodged in the City Council of Makati by ordinance. The decisiondisposed of as follows:

WHEREFORE, the Petition is GRANTED; the challenged Order dated January 23, 1995, in CivilCase No. 96-001, is SET ASIDE and the Writ of Preliminary Injunction issued on February 13,1996 is hereby made permanent.

For want of sustainable substantiation, the Motion to Cite Roberto L. del Rosario in contempt isdenied. 5

No pronouncement as to costs.

SO ORDERED. 6

The Motion for Reconsideration of the decision was denied on September 28, 1998. Hence, this recourse.

Petitioner MMDA raises the following questions:

I

HAS THE METROPOLITAN MANILA DEVELOPMENT AUTHORITY (MMDA) THEMANDATE TO OPEN NEPTUNE STREET TO PUBLIC TRAFFIC PURSUANT TO ITSREGULATORY AND POLICE POWERS?

II

IS THE PASSAGE OF AN ORDINANCE A CONDITION PRECEDENT BEFORE THEMMDA MAY ORDER THE OPENING OF SUBDIVISION ROADS TO PUBLIC TRAFFIC?

III

IS RESPONDENT BEL-AIR VILLAGE ASSOCIATION, INC. ESTOPPED FROM DENYINGOR ASSAILING THE AUTHORITY OF THE MMDA TO OPEN THE SUBJECT STREET?

IV

WAS RESPONDENT DEPRIVED OF DUE PROCESS DESPITE THE SEVERAL MEETINGSHELD BETWEEN MMDA AND THE AFFECTED EEL-AIR RESIDENTS AND BAVAOFFICERS?

V

HAS RESPONDENT COME TO COURT WITH UNCLEAN HANDS?7

Neptune Street is owned by respondent BAVA. It is a private road inside Bel-Air Village, a private residentialsubdivision in the heart of the financial and commercial district of Makati City. It runs parallel to KalayaanAvenue, a national road open to the general public. Dividing the two (2) streets is a concrete perimeter wallapproximately fifteen (15) feet high. The western end of Neptune Street intersects Nicanor Garcia, formerlyReposo Street, a subdivision road open to public vehicular traffic, while its eastern end intersects Makati Avenue,a national road. Both ends of Neptune Street are guarded by iron gates.

Petitioner MMDA claims that it has the authority to open Neptune Street to public traffic because it is an agentof the state endowed with police power in the delivery of basic services in Metro Manila. One of these basicservices is traffic management which involves the regulation of the use of thoroughfares to insure the safety,convenience and welfare of the general public. It is alleged that the police power of MMDA was affirmed by thisCourt in the consolidated cases of Sangalang v. Intermediate Appellate Court. 8 From the premise that it has policepower, it is now urged that there is no need for the City of Makati to enact an ordinance opening Neptune streetto the public. 9

Police power is an inherent attribute of sovereignty. It has been defined as the power vested by the Constitutionin the legislature to make, ordain, and establish all manner of wholesome and reasonable laws, statutes andordinances, either with penalties or without, not repugnant to the Constitution, as they shall judge to be for thegood and welfare of the commonwealth, and for the subjects of the same. 10 The power is plenary and its scopeis vast and pervasive, reaching and justifying measures for public health, public safety, public morals, and thegeneral welfare. 11

It bears stressing that police power is lodged primarily in the National Legislature. 12 It cannot be exercised byany group or body of individuals not possessing legislative power. 13 The National Legislature, however, maydelegate this power to the President and administrative boards as well as the lawmaking bodies of municipalcorporations or local government units. 14 Once delegated, the agents can exercise only such legislative powersas are conferred on them by the national lawmaking body. 15

A local government is a "political subdivision of a nation or state which is constituted by law and hassubstantial control of local affairs." 16The Local Government Code of 1991 defines a local government unitas a " name=rnt16 body 17 — one endowed with powers as a political subdivision of the NationalGovernment and as a corporate entity representing the inhabitants of its territory. 18 Local government unitsare the provinces, cities, municipalities and barangays. 19 They are also the territorial and politicalsubdivisions of the state. 20

Our Congress delegated police power to the local government units in the Local Government Code of 1991. Thisdelegation is found in Section 16 of the same Code, known as the general welfare clause, viz:

Sec. 16. General Welfare. — Every local government unit shall exercise the powers expressly granted,those necessarily implied therefrom, as well as powers necessary, appropriate, or incidental for itsefficient and effective governance, and those which are essential to the promotion of the generalwelfare. 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 ofappropriate and self-reliant scientific and technological capabilities, improve public morals, enhanceeconomic prosperity and social justice, promote full employment among their residents, maintainpeace and order, and preserve the comfort and convenience of their inhabitants. 21

Local government units exercise police power through their respective legislative bodies. The legislative body ofthe provincial government is the sangguniang panlalawigan, that of the city government is the sangguniangpanlungsod, that of the municipal government is the sangguniang bayan, and that of the barangay is thesangguniang barangay. The Local Government Code of 1991 empowers the sangguniang panlalawigan,sangguniang panlungsod and sangguniang bayan to "enact ordinances, approve resolutions and appropriatefunds for the general welfare of the [province, city or municipality, as the case may be], and its inhabitantspursuant to Section 16 of the Code and in the proper exercise of the corporate powers of the [province,city municipality] provided under the Code . . . " 22 The same Code gives the sangguniang barangay thepower to "enact ordinances as may be necessary to discharge the responsibilities conferred upon it by lawor ordinance and to promote the general welfare of the inhabitants thereon." 23

Metropolitan or Metro Manila is a body composed of several local government units — i.e., twelve (12) cities and five(5) municipalities, namely, the cities of Caloocan, Manila, Mandaluyong, Makati, Pasay, Pasig, Quezon,Muntinlupa, Las Pinas, Marikina, Paranaque and Valenzuela, and the municipalities of Malabon, Navotas,Pateros, San Juan and Taguig. With the passage of Republic Act (R. A.) No. 7924 24 in 1995, Metropolitan Manilawas declared as a "special development and administrative region" and the Administration of "metro-wide" basicservices affecting the region placed under "a development authority" referred to as the MMDA. 25

"Metro-wide services" are those "services which have metro-wide impact and transcend local political boundariesor entail huge expenditures such that it would not be viable for said services to be provided by the individual localgovernment units comprising Metro Manila." 26 There are seven (7) basic metro-wide services and the scope ofthese services cover the following: (1) development planning; (2) transport and traffic management; (3) solidwaste disposal and management; (4) flood control and sewerage management; (5) urban renewal, zoning and landuse planning, and shelter services; (6) health and sanitation, urban protection and pollution control; and (7)public safety. The basic service of transport and traffic management includes the following:

(b) Transport and traffic management which include the formulation, coordination, and monitoring ofpolicies, standards, programs and projects to rationalize the existing transport operations, infrastructurerequirements, the use of thoroughfares, and promotion of safe and convenient movement of persons andgoods; provision for the mass transport system and the institution of a system to regulate road users;administration and implementation of all traffic enforcement operations, traffic engineering services andtraffic education programs, including the institution of a single ticketing system in Metropolitan Manila;"27

In the delivery of the seven (7) basic services, the MMDA has the following powers and functions:

Sec. 5. Functions and powers of the Metro Manila Development Authority. — The MMDA shall:

(a) Formulate, coordinate and regulate the implementation of medium and long-term plans andprograms for the delivery of metro-wide services, land use and physical development withinMetropolitan Manila, consistent with national development objectives and priorities;

(b) Prepare, coordinate and regulate the implementation of medium-term investment programs formetro-wide services which shall indicate sources and uses of funds for priority programs and projects,and which shall include the packaging of projects and presentation to funding institutions;

(c) Undertake and manage on its own metro-wide programs and projects for the delivery of specific

services under its jurisdiction, subject to the approval of the Council. For this purpose, MMDA cancreate appropriate project management offices;

(d) Coordinate and monitor the implementation of such plans, programs and projects in MetroManila; identify bottlenecks and adopt solutions to problems of implementation;

(e) The MMDA shall set the policies concerning traffic in Metro Manila, and shall coordinate and regulatethe implementation of all programs and projects concerning traffic management, specifically pertaining toenforcement, engineering and education. Upon request, it shall be extended assistance and cooperation,including but not limited to, assignment of personnel, by all other government agencies and officesconcerned;

(f) Install and administer a single ticketing system, fix, impose and collect fines and penalties for all kindsof violations of traffic rules and regulations, whether moving or non-moving in nature, and confiscate andsuspend or revoke drivers' licenses in the enforcement of such traffic laws and regulations, the provisions ofRA 4136 and PD 1605 to the contrary notwithstanding. For this purpose, the Authority shall impose alltraffic laws and regulations in Metro Manila, through its traffic operation center, and may deputizemembers of the PNP, traffic enforcers of local government units, duly licensed security guards, or membersof non-governmental organizations to whom may be delegated certain authority, subject to such conditionsand requirements as the Authority may impose; and

(g) Perform other related functions required to achieve the objectives of the MMDA, including theundertaking of delivery of basic services to the local government units, when deemed necessarysubject to prior coordination with and consent of the local government unit concerned.

The implementation of the MMDA's plans, programs and projects is undertaken by the local government units,national government agencies, accredited people's organizations, non-governmental organizations, and the privatesector as well as by the MMDA itself. For this purpose, the MMDA has the power to enter into contracts,memoranda of agreement and other arrangements with these bodies for the delivery of the required servicesMetro Manila. 28

The governing board of the MMDA is the Metro Manila Council. The Council is composed of the mayors of thecomponent 12 cities and 5 municipalities, the president of the Metro Manila Vice-Mayors' League and thepresident of the Metro Manila Councilors' League. 29 The Council is headed by Chairman who is appointed bythe President and vested with the rank of cabinet member. As the policy-making body of the MMDA, the MetroManila Council approves metro-wide plans, programs and projects, and issues the necessary rules and regulationsfor the implementation of said plans; it approves the annual budget of the MMDA and promulgate the rules andregulations for the delivery of basic services, collection of service and regulatory fees, fines and penalties. Thesefunctions are particularly enumerated as follows:

Sec. 6. Functions of the Metro Manila Council. —

(a) The Council shall be the policy-making body of the MMDA;

(b) It shall approve metro-wide plans, programs and projects and issue rules and regulations deemednecessary by the MMDA to carry out the purposes of this Act;

(c) It may increase the rate of allowances and per diems of the members of the Council to be effectiveduring the term of the succeeding Council. It shall fix the compensation of the officers and personnelof the MMDA, and approve the annual budget thereof for submission to the Department of Budgetand Management (DBM);

(d) It shall promulgate rules and regulations and set policies and standards for metro-wide application

governing the delivery of basic services, prescribe and collect service and regulatory fees, and imposeand collect fines and penalties.

Clearly, the scope of the MMDA's function is limited to the delivery of the seven (7) basic services. One of theseis transport and traffic management which includes the formulation and monitoring of policies, standards andprojects to rationalize the existing transport operations, infrastructure requirements, the use of thoroughfares andpromotion of the safe movement of persons and goods. It also covers the mass transport system and theinstitution of a system of road regulation, the administration of all traffic enforcement operations, trafficengineering services and traffic education programs, including the institution of a single ticketing system in MetroManila for traffic violations. Under the service, the MMDA is expressly authorized "to set the policies concerningtraffic" and "coordinate and regulate the implementation of all traffic management programs." In addition, theMMDA may "install and administer a single ticketing system," fix, impose and collect fines and penalties for alltraffic violations.

It will be noted that the powers of the MMDA are limited to the following acts: formulation, coordination,regulation, implementation, preparation, management, monitoring, setting of policies, installation of a systemand administration. There is no syllable in R.A. No. 7924 that grants the MMDA police power, let alone legislativepower. Even the Metro Manila Council has not been delegated any legislative power. Unlike the legislative bodies ofthe local government units, there is no provision in R.A. No. 7924 that empowers the MMDA or its Councilto "enact ordinances, approve resolutions appropriate funds for the general welfare" of the inhabitants of MetroManila. The MMDA is, as termed in the charter itself, "development authority." 30 It is an agency created forthe purpose of laying down policies and coordinating with the various national government agencies, people'sorganizations, non-governmental organizations and the private sector for the efficient and expeditious deliveryof basic services in the vast metropolitan area. All its functions are administrative in nature and these are actuallysummed up in the charter itself, viz:

Sec. 2. Creation of the Metropolitan Manila Development Authority. — . . . .

The MMDA shall perform planning, monitoring and coordinative functions, and in the process exerciseregulatory and supervisory authority over the delivery of metro-wide services within Metro Manila,without diminution of the autonomy of the local government units concerning purely local matters.31

Petitioner cannot seek refuge in the cases of Sangalang v. Intermediate Appellate Court 32 where we upheld azoning ordinance issued by the Metro Manila Commission (MMC), the predecessor of the MMDA, as anexercise of police power. The first Sangalang decision was on the merits of the petition, 33 while the seconddecision denied reconsideration of the first case and in addition discussed the case of Yabut v. Court of Appeals.34

Sangalang v. IAC involved five (5) consolidated petitions filed by respondent BAVA and three residents of Bel-AirVillage against other residents of the Village and the Ayala Corporation, formerly the Makati DevelopmentCorporation, as the developer of the subdivision. The petitioners sought to enforce certain restrictive easementsin the deeds of sale over their respective lots in the subdivision. These were the prohibition on the setting up ofcommercial and advertising signs on the lots, and the condition that the lots be used only for residential purposes.Petitioners alleged that respondents, who were residents along Jupiter Street of the subdivision, converted theirresidences into commercial establishments in violation of the "deed restrictions," and that respondent AyalaCorporation ushered in the full commercialization" of Jupiter Street by tearing down the perimeter wall thatseparated the commercial from the residential section of the village. 35

The petitions were dismissed based on Ordinance No. 81 of the Municipal Council of Makati and OrdinanceNo. 81-01 of the Metro Manila Commission (MMC). Municipal Ordinance No. 81 classified Bel-Air Villageas a Class A Residential Zone, with its boundary in the south extending to the center line of Jupiter Street. TheMunicipal Ordinance was adopted by the MMC under the Comprehensive Zoning Ordinance for the NationalCapital Region and promulgated as MMC Ordinance No. 81-01. Bel-Air Village was indicated therein as

bounded by Jupiter Street and the block adjacent thereto was classified as a High Intensity Commercial Zone.36

We ruled that since both Ordinances recognized Jupiter Street as the boundary between Bel-Air Village and thecommercial district, Jupiter Street was not for the exclusive benefit of Bel-Air residents. We also held that theperimeter wall on said street was constructed not to separate the residential from the commercial blocks butsimply for security reasons, hence, in tearing down said wall, Ayala Corporation did not violate the "deedrestrictions" in the deeds of sale.

We upheld the ordinances, specifically MMC Ordinance No. 81-01, as a legitimate exercise of police power. 37

The power of the MMC and the Makati Municipal Council to enact zoning ordinances for the general welfareprevailed over the "deed restrictions".

In the second Sangalang/Yabut decision, we held that the opening of Jupiter Street was warranted by the demandsof the common good in terms of "traffic decongestion and public convenience." Jupiter was opened by theMunicipal Mayor to alleviate traffic congestion along the public streets adjacent to the Village. 38 The samereason was given for the opening to public vehicular traffic of Orbit Street, a road inside the same village. Thedestruction of the gate in Orbit Street was also made under the police power of the municipal government. Thegate, like the perimeter wall along Jupiter, was a public nuisance because it hindered and impaired the use ofproperty, hence, its summary abatement by the mayor was proper and legal. 39

Contrary to petitioner's claim, the two Sangalang cases do not apply to the case at bar. Firstly, both involved zoningordinances passed by the municipal council of Makati and the MMC. In the instant case, the basis for theproposed opening of Neptune Street is contained in the notice of December 22, 1995 sent by petitioner torespondent BAVA, through its president. The notice does not cite any ordinance or law, either by theSangguniang Panlungsod of Makati City or by the MMDA, as the legal basis for the proposed opening ofNeptune Street. Petitioner MMDA simply relied on its authority under its charter "to rationalize the use of roadsand/or thoroughfares for the safe and convenient movement of persons." Rationalizing the use of roads andthoroughfares is one of the acts that fall within the scope of transport and traffic management. By no stretch ofthe imagination, however, can this be interpreted as an express or implied grant of ordinance-making power,much less police power.

Secondly, the MMDA is not the same entity as the MMC in Sangalang. Although the MMC is the forerunnerof the present MMDA, an examination of Presidential Decree (P. D.) No. 824, the charter of the MMC, showsthat the latter possessed greater powers which were not bestowed on the present MMDA.

Metropolitan Manila was first created in 1975 by Presidential Decree (P.D.) No. 824. It comprised the GreaterManila Area composed of the contiguous four (4) cities of Manila, Quezon, Pasay and Caloocan, and the thirteen(13) municipalities of Makati, Mandaluyong, San Juan, Las Pinas, Malabon, Navotas, Pasig, Pateros, Paranaque,Marikina, Muntinlupa and Taguig in the province of Rizal, and Valenzuela in the province of Bulacan. 40

Metropolitan Manila was created as a response to the finding that the rapid growth of population and theincrease of social and economic requirements in these areas demand a call for simultaneous and unifieddevelopment; that the public services rendered by the respective local governments could be administered moreefficiently and economically if integrated under a system of central planning; and this coordination, "especiallyin the maintenance of peace and order and the eradication of social and economic ills that fanned the flames ofrebellion and discontent [were] part of reform measures under Martial Law essential to the safety and securityof the State." 41

Metropolitan Manila was established as a "public corporation" with the following powers:

Sec. 1. Creation of the Metropolitan Manila. — There is hereby created a public corporation, to beknown as the Metropolitan Manila, vested with powers and attributes of a corporation including thepower to make contracts, sue and be sued, acquire, purchase, expropriate, hold, transfer and dispose of

property and such other powers as are necessary to carry out its purposes. The Corporation shall beadministered by a Commission created under this Decree. 42

The administration of Metropolitan Manila was placed under the Metro Manila Commission (MMC) vestedwith the following powers:

Sec. 4. Powers and Functions of the Commission. — The Commission shall have the following powersand functions:

1. To act as a central government to establish and administer programs and provide services commonto the area;

2. To levy and collect taxes and special assessments, borrow and expend money and issue bonds,revenue certificates, and other obligations of indebtedness. Existing tax measures should, however,continue to be operative until otherwise modified or repealed by the Commission;

3. To charge and collect fees for the use of public service facilities;

4. To appropriate money for the operation of the metropolitan government and reviewappropriations for the city and municipal units within its jurisdiction with authority to disapprovethe same if found to be not in accordance with the established policies of the Commission, withoutprejudice to any contractual obligation of the local government units involved existing at the timeof approval of this Decree;

5. To review, amend, revise or repeal all ordinances, resolutions and acts of cities and municipalitieswithin Metropolitan Manila;

6. To enact or approve ordinances, resolutions and to fix penalties for any violation thereof whichshall not exceed a fine of P10,000.00 or imprisonment of six years or both such fine andimprisonment for a single offense;

7. To perform general administrative, executive and policy-making functions;

8. To establish a fire control operation center, which shall direct the fire services of the city andmunicipal governments in the metropolitan area;

9. To establish a garbage disposal operation center, which shall direct garbage collection and disposalin the metropolitan area;

10. To establish and operate a transport and traffic center, which shall direct traffic activities;

11. To coordinate and monitor governmental and private activities pertaining to essential servicessuch as transportation, flood control and drainage, water supply and sewerage, social, health andenvironmental services, housing, park development, and others;

12. To insure and monitor the undertaking of a comprehensive social, economic and physicalplanning and development of the area;

13. To study the feasibility of increasing barangay participation in the affairs of their respective localgovernments and to propose to the President of the Philippines definite programs and policies forimplementation;

14. To submit within thirty (30) days after the close of each fiscal year an annual report to the

President of the Philippines and to submit a periodic report whenever deemed necessary; and

15. To perform such other tasks as may be assigned or directed by the President of the Philippines.

The MMC was the "central government" of Metro Manila for the purpose of establishing and administeringprograms providing services common to the area. As a "central government" it had the power to levy and collecttaxes and special assessments, the power to charge and collect fees; the power to appropriate money for itsoperation, and at the same time, review appropriations for the city and municipal units within its jurisdiction.It was bestowed the power to enact or approve ordinances, resolutions and fix penalties for violation of suchordinances and resolutions. It also had the power to review, amend, revise or repeal all ordinances, resolutionsand acts of any of the four (4) cities and thirteen (13) municipalities comprising Metro Manila.

P.D. No. 824 further provided:

Sec. 9. Until otherwise provided, the governments of the four cities and thirteen municipalities inthe Metropolitan Manila shall continue to exist in their present form except as may be inconsistentwith this Decree. The members of the existing city and municipal councils in Metropolitan Manila shall,upon promulgation of this Decree, and until December 31, 1975, become members of the SangguniangBayan which is hereby created for every city and municipality of Metropolitan Manila.

In addition, the Sangguniang Bayan shall be composed of as many barangay captains as may bedetermined and chosen by the Commission, and such number of representatives from other sectorsof the society as may be appointed by the President upon recommendation of the Commission.

xxx xxx xxx

The Sangguniang Bayan may recommend to the Commission ordinances, resolutions or suchmeasures as it may adopt; Provided, that no such ordinance, resolution or measure shall becomeeffective, until after its approval by the Commission; and Provided further, that the power to imposetaxes and other levies, the power to appropriate money and the power to pass ordinances orresolutions with penal sanctions shall be vested exclusively in the Commission.

The creation of the MMC also carried with it the creation of the Sangguniang Bayan. This was composed of themembers of the component city and municipal councils, barangay captains chosen by the MMC and sectoralrepresentatives appointed by the President. The Sangguniang Bayan had the power to recommend to the MMCthe adoption of ordinances, resolutions or measures. It was the MMC itself, however, that possessed legislativepowers. All ordinances, resolutions and measures recommended by the Sangguniang Bayan were subject to theMMC's approval. Moreover, the power to impose taxes and other levies, the power to appropriate money, andthe power to pass ordinances or resolutions with penal sanctions were vested exclusively in the MMC.

Thus, Metropolitan Manila had a "central government," i.e., the MMC which fully possessed legislative policepowers. Whatever legislative powers the component cities and municipalities had were all subject to review andapproval by the MMC.

After President Corazon Aquino assumed power, there was a clamor to restore the autonomy of the localgovernment units in Metro Manila. Hence, Sections 1 and 2 of Article X of the 1987 Constitution provided:

Sec. 1. The territorial and political subdivisions of the Republic of the Philippines are the provinces,cities, municipalities and barangays. There shall be autonomous regions in Muslim Mindanao andthe Cordilleras as herein provided.

Sec. 2. The territorial and political subdivisions shall enjoy local autonomy.

The Constitution, however, recognized the necessity of creating metropolitan regions not only in theexisting National Capital Region but also in potential equivalents in the Visayas and Mindanao. 43 Section11 of the same Article X thus provided:

Sec. 11. The Congress may, by law, create special metropolitan political subdivisions, subject to aplebiscite as set forth in Section 10 hereof. The component cities and municipalities shall retain theirbasic autonomy and shall be entitled to their own local executives and legislative assemblies. Thejurisdiction of the metropolitan authority that will thereby be created shall be limited to basic servicesrequiring coordination.

Constitution itself expressly provides that Congress may, by law, create "special metropolitan politicalsubdivisions" which shall be subject to approval by a majority of the votes cast in a plebiscite in the political unitsdirectly affected; the jurisdiction of this subdivision shall be limited to basic services requiring coordination; andthe cities and municipalities comprising this subdivision shall retain their basic services requiring coordination;and the cities and municipalities comprising this subdivision shall retain their basic autonomy and their own localexecutive and legislative assemblies. 44 Pending enactment of this law, the Transitory Provisions of theConstitution gave the President of the Philippines the power to constitute the Metropolitan Authority, viz:

Sec. 8. Until otherwise provided by Congress, the President may constitute the MetropolitanAuthority to be composed of the heads of all local government units comprising the MetropolitanManila area. 45

In 1990, President Aquino issued Executive Order (E. O.) No. 392 and constituted the Metropolitan ManilaAuthority (MMA). The powers and functions of the MMC were devolved to the MMA. 46 It ought to bestressed, however, that not all powers and functions of the MMC were passed to the MMA. The MMA's powerwas limited to the "delivery of basic urban services requiring coordination in Metropolitan Manila." 47 TheMMA's governing body, the Metropolitan Manila Council, although composed of the mayors of the componentcities and municipalities, was merely given power of: (1) formulation of policies on the delivery of basic servicesrequiring coordination and consolidation; and (2) promulgation resolutions and other issuances, approval of acode of basic services and the exercise of its rule-making power. 48

Under the 1987 Constitution, the local government units became primarily responsible for the governance oftheir respective political subdivisions. The MMA's jurisdiction was limited to addressing common problemsinvolving basic services that transcended local boundaries. It did not have legislative power. Its power was merelyto provide the local government units technical assistance in the preparation of local development plans. Anysemblance of legislative power it had was confined to a "review [of] legislation proposed by the local legislativeassemblies to ensure consistency among local governments and with the comprehensive development plan ofMetro Manila," and to "advise the local governments accordingly." 49

When R.A. No. 7924 took effect, Metropolitan Manila became a "special development and administrativeregion" and the MMDA a "special development authority" whose functions were "without prejudice to theautonomy of the affected local government units." The character of the MMDA was clearly defined in thelegislative debates enacting its charter.

R.A. No. 7924 originated as House Bill No. 14170/11116 and was introduced by several legislators led by DanteTinga, Roilo Golez and Feliciano Belmonte. It was presented to the House of Representatives by the Committeeon Local Governments chaired by Congressman Ciriaco R. Alfelor. The bill was a product of Committeeconsultations with the local government units in the National Capital Region (NCR), with former Chairmenof the MMC and MMA, 50 and career officials of said agencies. When the bill was first taken up by the Committee on LocalGovernments, the following debate took place:

THE CHAIRMAN [Hon. Ciriaco Alfelor]: Okay, Let me explain. This has been debated a long time

ago, you know. It's a special . . . we can create a special metropolitan political subdivision.

Actually, there are only six (6) political subdivisions provided for in the Constitution: barangay,municipality, city, province, and we have the Autonomous Region of Mindanao and we have theCordillera. So we have 6. Now. . . . .

HON. [Elias] LOPEZ: May I interrupt, Mr. Chairman. In the case of the Autonomous Region, thatis also specifically mandated by the Constitution.

THE CHAIRMAN: That's correct. But it is considered to be a political subdivision. What is themeaning of a political subdivision? Meaning to say, that it has its own government, it has its ownpolitical personality, it has the power to tax, and all governmental powers: police power andeverything. All right. Authority is different; because it does not have its own government. It is onlya council, it is an organization of political subdivision, powers, "no, which is not imbued with anypolitical power.

If you go over Section 6, where the powers and functions of the Metro Manila DevelopmentAuthority, it is purely coordinative. And it provides here that the council is policy-making. All right.

Under the Constitution is a Metropolitan Authority with coordinative power. Meaning to say, itcoordinates all of the different basic services which have to be delivered to the constituency. All right.

There is now a problem. Each local government unit is given its respective . . . as a politicalsubdivision. Kalookan has its powers, as provided for and protected and guaranteed by theConstitution. All right, the exercise. However, in the exercise of that power, it might be deleteriousand disadvantageous to other local government units. So, we are forming an authority where all ofthese will be members and then set up a policy in order that the basic services can be effectivelycoordinated. All right.

Of course, we cannot deny that the MMDA has to survive. We have to provide some funds,resources. But it does not possess any political power. We do not elect the Governor. We do not havethe power to tax. As a matter of fact, I was trying to intimate to the author that it must have thepower to sue and be sued because it coordinates. All right. It coordinates practically all these basicservices so that the flow and the distribution of the basic services will be continuous. Like traffic, wecannot deny that. It's before our eyes. Sewerage, flood control, water system, peace and order, wecannot deny these. It's right on our face. We have to look for a solution. What would be the rightsolution? All right, we envision that there should be a coordinating agency and it is called anauthority. All right, if you do not want to call it an authority, it's alright. We may call it a council ormaybe a management agency.

xxx xxx xxx 51

Clearly, the MMDA is not a political unit of government. The power delegated to the MMDA is that given tothe Metro Manila Council to promulgate administrative rules and regulations in the implementation of theMMDA's functions. There is no grant of authority to enact ordinances and regulations for the general welfareof the inhabitants of the metropolis. This was explicitly stated in the last Committee deliberations prior to thebill's presentation to Congress. Thus:

THE CHAIRMAN: Yeah, but we have to go over the suggested revision. I think this was alreadyapproved before, but it was reconsidered in view of the proposals, set-up, to make the MMDAstronger. Okay, so if there is no objection to paragraph "f". . . And then next is paragraph "b," underSection 6. "It shall approve metro-wide plans, programs and projects and issue ordinances or resolutionsdeemed necessary by the MMDA to carry out the purposes of this Act." Do you have the powers? Does the

MMDA... because that takes the form of a local government unit, a political subdivision.

HON. [Feliciano] BELMONTE: Yes, I believe so, your Honor. When we say that it has the policies,it's very clear that those policies must be followed. Otherwise, what's the use of empowering it tocome out with policies. Now, the policies may be in the form of a resolution or it may be in the formof a ordinance. The term "ordinance" in this case really gives it more teeth, your honor. Otherwise,we are going to see a situation where you have the power to adopt the policy but you cannot reallymake it stick as in the case now, and I think here is Chairman Bunye. I think he will agree that thatis the case now. You've got the power to set a policy, the body wants to follow your policy, then wesay let's call it an ordinance and see if they will not follow it.

THE CHAIRMAN: That's very nice. I like that. However, there is a constitutional impediment. Youare making this MMDA a political subdivision. The creation of the MMDA would be subject to aplebiscite. That is what I'm trying to avoid. I've been trying to avoid this kind of predicament. Underthe Constitution it states: if it is a political subdivision, once it is created it has to be subject to aplebiscite. I'm trying to make this as administrative. That's why we place the Chairman as a cabinetrank.

HON. BELMONTE: All right, Mr. Chairman, okay, what you are saying there is . . . . .

THE CHAIRMAN: In setting up ordinances, it is a political exercise, Believe me.

HON. [Elias] LOPEZ: Mr. Chairman, it can be changed into issuances of rules and regulations. Thatwould be . . . it shall also be enforced.

HON. BELMONTE: Okay, I will . . . .

HON. LOPEZ: And you can also say that violation of such rule, you impose a sanction. But youknow, ordinance has a different legal connotation.

HON. BELMONTE: All right, I defer to that opinion, your Honor.

THE CHAIRMAN: So instead of ordinances, say rules and regulations.

HON. BELMONTE: Or resolutions. Actually, they are actually considering resolutions now.

THE CHAIRMAN: Rules and resolutions.

HON. BELMONTE: Rules, regulations and resolutions. 52

The draft of H. B. No. 14170/11116 was presented by the Committee to the House of Representatives. Theexplanatory note to the bill stated that the proposed MMDA is a "development authority" which is a "nationalagency, not a political government unit." 53 The explanatory note was adopted as the sponsorship speech of theCommittee on Local Governments. No interpellations or debates were made on the floor and no amendmentsintroduced. The bill was approved on second reading on the same day it was presented. 54

When the bill was forwarded to the Senate, several amendments were made. These amendments, however, didnot affect the nature of the MMDA as originally conceived in the House of Representatives. 55

It is thus beyond doubt that the MMDA is not a local government unit or a public corporation endowed withlegislative power. It is not even a "special metropolitan political subdivision" as contemplated in Section 11,Article X of the Constitution. The creation of a "special metropolitan political subdivision" requires the approvalby a majority of the votes cast in a plebiscite in the political units directly affected." 56 R. A. No. 7924 was not

submitted to the inhabitants of Metro Manila in a plebiscite. The Chairman of the MMDA is not an officialelected by the people, but appointed by the President with the rank and privileges of a cabinet member. In fact,part of his function is to perform such other duties as may be assigned to him by the President, 57 whereas in localgovernment units, the President merely exercises supervisory authority. This emphasizes the administrativecharacter of the MMDA.

Clearly then, the MMC under P.D. No. 824 is not the same entity as the MMDA under R.A. No. 7924. Unlikethe MMC, the MMDA has no power to enact ordinances for the welfare of the community. It is the localgovernment units, acting through their respective legislative councils, that possess legislative power and policepower. In the case at bar, the Sangguniang Panlungsod of Makati City did not pass any ordinance or resolutionordering the opening of Neptune Street, hence, its proposed opening by petitioner MMDA is illegal and therespondent Court of Appeals did not err in so ruling. We desist from ruling on the other issues as they areunnecessary.

We stress that this decision does not make light of the MMDA's noble efforts to solve the chaotic trafficcondition in Metro Manila. Everyday, traffic jams and traffic bottlenecks plague the metropolis. Even our oncesprawling boulevards and avenues are now crammed with cars while city streets are clogged with motorists andpedestrians. Traffic has become a social malaise affecting our people's productivity and the efficient delivery ofgoods and services in the country. The MMDA was created to put some order in the metropolitan transportationsystem but unfortunately the powers granted by its charter are limited. Its good intentions cannot justify theopening for public use of a private street in a private subdivision without any legal warrant. The promotion ofthe general welfare is not antithetical to the preservation of the rule of law.1âwphi1.nêt

IN VIEW WHEREOF, the petition is denied. The Decision and Resolution of the Court of Appeals in CA-G.R.SP No. 39549 are affirmed.

SO ORDERED.

Davide, Jr., C.J., Kapunan, Pardo and Ynares-Santiago, JJ., concur.

Footnotes

1 Annex "D" to the CA petition, Court of Appeals (CA) Rollo, p. 27.

2 Annex "J" to Petition, Rollo, pp. 76-78.

3 Minutes of the Ocular Inspection, Court of Appeals Rollo, pp. 193-194.

4 CA Rollo, p. 332.

5 Roberto L. del Rosario is a resident of Neptune Street who allegedly spearheaded a campaign toopen Neptune Street to the public — Motion to Cite in Contempt, CA Rollo, pp. 412-415.

6 CA decision, p. 10, Rollo, p. 61.

7 Petition, p. 15, Rollo, p. 24.

8 168 SCRA 634 (1988).

9 Petition, p. 24, Rollo, p. 33.

10 United States v. Pompeya, 31 Phil, 245, 253-254 [1915]; Churchill v. Rafferty, 32 Phil. 580,603 [1915]; People v. Pomar, 46 Phil. 440, 447 [1924].

11 Bernas, The 1987 Constitution of the Philippines, A Commentary, pp. 95-98 [1996].

12 Cruz, Constitutional Law, p. 44 [1995].

13 Id., see also 16 C.J.S., Constitutional Law, Sec. 177 [1956 ed.].

14 Cruz, supra, at 44; Binay v. Domingo, 201 SCRA 508, 513-514 [1991].

15 Magtajas v. Pryce Properties, 234 SCRA 255, 272 [1994].

16 Bernas, supra, at 959, citing UP Law Center Revision Project, Part II, 712 [1970] citing Sady,"Improvement of Local Government Administration for Development Purpose," Journal of LocalAdministration Overseas 135 [July 1962].

17 Sec. 15, Book I, Local Government Code of 1991.

18 Id.

19 Titles I, II, III, IV, Book III, Local Government Code of 1991.

20 Sec. 1, Article X, 1987 Constitution.

21 Sec. 16, Book I, Local Government Code of 1991; also cited in Magtajas v. Pryce PropertiesCorp., Inc. supra, at 264-265.

22 Sec. 468 (a), 458 (a), and 447 (a), Book III, Local Government Code of 1991.

23 Sec. 391 (a), Book III, Local Government Code of 1991.

24 Entitled "An Act Creating the Metropolitan Manila Development Authority, Defining itsPowers and Functions, Providing Funds Therefor and for Other Purposes."

25 Sec. 1, R.A. 7924.

26 Sec. 3, par. 1, R.A. 7924.

27 Sec. 3 (b), supra; emphasis supplied.

28 Sec. 9, paragraph 5, supra.

29 Sec. 4, supra, Non-voting members of the Council are the heads of Department ofTransportation and Communications (DOTC), Department of Public Works and Highways(DPWH), Department of Tourism (DOT), Department of Budget and Management (DBM),Housing and Urban Development Coordinating Committee (HUDCC), and the National Police(PNP) or their duly authorized representatives.

30 Sec. 1, R.A. 7924.

31 Sec. 2, supra.

32 Op cit.

33 168 SCRA 634 [1988].

34 176 SCRA 719 [1989].

35 168 SCRA 634, 654-655.

36 Id. at 643.

37 Id. at 730.

38 Id. at 723.

39 Like the perimeter wall along Jupiter Street—Id. at 734.

40 Sec. 2, P.D. 824.

41 Whereas Clauses, P.D. 824.

42 Sec. 1, P.D. 824; emphasis supplied.

43 Speech of then Constitutional Commissioner Blas Ople, see Bernas, The Intent of the 1986Constitution Writers, pp. 706-707 [ 1995].

44 Sec. 11, Article X, 1987 Constitution.

45 Sec. 8, Article XVIII, 1987 Constitution.

46 Sec. 3, E.O. 392.

47 Sec. 1, supra.

48 Sec. 2, supra.

49 Sec. 6, supra.

50 Chairmen Ismael Mathay, Jr. and Ignacio Bunye.

51 Deliberations of the Committee on Local Government, House of Representatives, Congress ofthe Philippines, November 10, 1993, pp. 46-48.

52 Deliberations of the Committee on Local Governments, House of Representatives, Congress ofthe Philippines, November 9, 1994, pp. 68-70.

53 Explanatory Note to H. B. 11116, p. 3.

54 H.B. 14170/11116, Sponsorship and Debates, December 20, 1994.

55 Complete H.B. 14170/11116 with R. A. 7924; see Senate Amendments, February 21, 1995.

56 Sec. 10, Article X of the 1987 Constitution reads:

Sec. 10. No province, city, municipality, or barangay may be created, divided, merged, abolished,or its boundary substantially altered except in accordance with the criteria established in the localgovernment code and subject to approval by a majority of the votes cast in a plebiscite in thepolitical units directly affected.

57 Sec. 7 (g), R.A. 7924.

THIRD DIVISION

1. [G.R. No. 135087. March 14, 2000]

HEIRS OF ALBERTO SUGUITAN, petitioner, vs. CITY OF MANDALUYONG, respondent. frnaics

D E C I S I O N

GONZAGA_REYES, J.:

In this petition for review on certiorari under Rule 45, petitioners[1] pray for the reversal of the Order datedJuly 28, 1998 issued by Branch 155 of the Regional Trial Court of Pasig in SCA No. 875 entitled "City ofMandaluyong v. Alberto S. Suguitan, the dispositive portion of which reads as follows:

WHEREFORE, in view of the foregoing, the instant Motion to Dismiss is hereby DENIED and an ORDEROF CONDEMNATION is hereby issued declaring that the plaintiff, City of Mandaluyong, has a lawfulright to take the subject parcel of land together with existing improvements thereon more specifically coveredby Transfer Certificate Of Title No. 56264 of the Registry of Deeds for Metro Manila District II for thepublic use or purpose as stated in the Complaint, upon payment of just compensation.

Accordingly, in order to ascertain the just compensation, the parties are hereby directed to submit to theCourt within fifteen (15) days from notice hereof, a list of independent appraisers from which the Court twill select three (3) to be appointed as Commissioners, pursuant to Section 5, Rule 67, Rules of Court.

SO ORDERED.[2]ella

It is undisputed by the parties that on October 13, 1994, the Sangguniang Panlungsod of Mandaluyong Cityissued Resolution No. 396, S-1994[3] authorizing then Mayor Benjamin S. Abalos to institute expropriationproceedings over the property of Alberto Sugui located at Boni Avenue and Sto. Rosario streets inMandaluyong City with an area of 414 square meters and more particularly described under TransferCertificate of Title No. 56264 of the Registry of Deeds of Metro Manila District II. The intended purpose ofthe expropriation was the expansion of the Mandaluyong Medical Center.

Mayor Benjamin Abalos wrote Alberto Suguitan a letter dated January 20, 1995 offering to buy his property,but Suguitan refused to sell.[4] Consequently, on March 13, 1995, the city of Mandaluyong filed acomplaint[5] for expropriation with the Regional Trial Court of Pasig. The case was docketed as SCA No.875. novero

Suguitan filed a motion to dismiss[6] the complaint based on the following grounds -(1) the power ofeminent domain is not being exercised in accordance with law; (2) there is no public necessity to warrantexpropriation of subject property; (3) the City of Mandaluyong seeks to expropriate the said propertywithout payment of just compensation; (4) the City of Mandaluyong has no budget and appropriation forthe payment of the property being expropriated; and (5) expropriation of Suguitan' s property is but a ploy ofMayor Benjamin Abalos to acquire the same for his personal use. Respondent filed its comment andopposition to the motion. On October 24, 1995, the trial court denied Suguitan's motion to dismiss.[7]

On November 14, 1995, acting upon a motion filed by the respondent, the trial court issued an orderallowing the City of Mandaluyong to take immediate possession of Suguitan's property upon the deposit ofP621,000 representing 15% of the fair market value of the subject property based upon the current taxdeclaration of such property. On December 15, 1995, the City of Mandaluyong assumed possession of thesubject property by virtue of a writ of possession issued by the trial court on December 14, 1995.[8] On July28, 1998, the court granted the assailed order of expropriation.

Petitioner assert that the city of Mandaluyong may only exercise its delegated power of eminent domain bymeans of an ordinance as required by section 19 of Republic Act (RA) No. 7160,[9] and not by means of amere resolution.[10] Respondent contends, however, that it validly and legally exercised its power of eminentdomain; that pursuant to article 36, Rule VI of the Implementing Rules and Regulations (IRR) of RA 7160,a resolution is a sufficient antecedent for the filing of expropriation proceedings with the Regional TrialCourt. Respondent's position, which was upheld by the trial court, was explained, thus:[11]

...in the exercise of the respondent City of Mandaluyong's power of eminent domain, a "resolution"empowering the City Mayor to initiate such expropriation proceedings and thereafter when the court hasalready determine[d] with certainty the amount of just compensation to be paid for the propertyexpropriated, then follows an Ordinance of the Sanggunian Panlungosd appropriating funds for the paymentof the expropriated property. Admittedly, title to the property expropriated shall pass from the owner to theexpropriator only upon full payment of the just compensation.[12] novero

Petitioners refute respondent's contention that only a resolution is necessary upon the initiation ofexpropriation proceedings and that an ordinance is required only in order to appropriate the funds for thepayment of just compensation, explaining that the resolution mentioned in article 36 of the IRR is forpurposes of granting administrative authority to the local chief executive to file the expropriation case incourt and to represent the local government unit in such case, but does not dispense with the necessity of anordinance for the exercise of the power of eminent domain under section 19 of the Code.[13]

The petition is imbued with merit.

Eminent domain is the right or power of a sovereign state to appropriate private property to particular uses topromote public welfare.[14] It is an indispensable attribute of sovereignty; a power grounded in the primaryduty of government to serve the common need and advance the general welfare.[15] Thus, the right ofeminent domain appertains to every independent government without the necessity for constitutionalrecognition.[16] The provisions found in modern constitutions of civilized countries relating to the taking ofproperty for the public use do not by implication grant the power to the government, but limit a powerwhich would otherwise be without limit.[17] Thus, our own Constitution provides that "[p]rivate propertyshall not be taken for public use without just compensation."[18] Furthermore, the due process and equalprotection clauses[19] act as additional safeguards against the arbitrary exercise of this governmental power.

Since the exercise of the power of eminent domain affects an individual's right to private property, aconstitutionally-protected right necessary for the preservation and enhancement of personal dignity andintimately connected with the rights to life and liberty,[20] the need for its circumspect operation cannot beoveremphasized. In City of Manila vs. Chinese Community of Manila we said:[21]

The exercise of the right of eminent domain, whether directly by the State, or by its authorized agents, isnecessarily in derogation of private rights, and the rule in that case is that the authority must be strictlyconstrued. No species of property is held by individuals with greater tenacity, and none is guarded by theconstitution and the laws more sedulously, than the right to the freehold of inhabitants. When the legislatureinterferes with that right, and, for greater public purposes, appropriates the land of an individual without hisconsent, the plain meaning of the law should not be enlarged by doubt[ful] interpretation. (Bensley vs.Mountainlake Water Co., 13 Cal., 306 and cases cited [73 Am. Dec. 576].)

The statutory power of taking property from the owner without his consent is one of the most delicateexercise of governmental authority. It is to be watched with jealous scrutiny. Important as the power may beto the government, the inviolable sanctity which all free constitutions attach to the right of property of thecitizens, constrains the strict observance of the substantial provisions of the law which are prescribed as modesof the exercise of the power, and to protect it from abuse. ...(Dillon on Municipal Corporations [5th Ed.],sec. 1040, and cases cited; Tenorio vs. Manila Railroad Co., 22 Phil., 411.)

The power of eminent domain is essentially legislative in nature. It is firmly settled, however, that such powermay be validly delegated to local government units, other public entities and public utilities, although thescope of this delegated legislative power is necessarily narrower than that of the delegating authority and mayonly be exercised in strict compliance with the terms of the delegating law.[22] micks

The basis for the exercise of the power of eminent domain by local government units is section 19 of RA7160 which provides that:

A local government unit may, through its chief executive and acting pursuant to an ordinance, exercise thepower of eminent domain for public use, purpose, or welfare for the benefits of the poor and the landless,upon payment of just compensation, pursuant to the provisions of the Constitution and pertinent laws;Provided, however, That the power of eminent domain may not be exercised unless a valid and definite offerhas been previously made to the owner, and such offer was not accepted; Provided, further, That the localgovernment unit may immediately take possession of the property upon the filing of the expropriationproceedings and upon making a deposit with the proper court of at least fifteen percent (15%) of the fairmarket value of the property based on the current tax declaration of the property to be expropriated;Provided, finally, That the amount to be paid for the expropriated property shall be determined by the propercourt, based on the fair market value at the time of the taking of the property.

Despite the existence of this legislative grant in favor of local governments, it is still the duty of the courts todetermine whether the power of eminent domain is being exercised in accordance with the delegatinglaw.[23] In fact, the courts have adopted a more censorious attitude in resolving questions involving theproper exercise of this delegated power by local bodies, as compared to instances when it is directly exercisedby the national legislature.[24]

The courts have the obligation to determine whether the following requisites have been complied with by thelocal government unit concerned:

1. An ordinance is enacted by the local legislative council authorizing the local chief executive, in behalf ofthe local government unit, to exercise the power of eminent domain or pursue expropriation proceedingsover a particular private property .calr

2. The power of eminent domain is exercised for public use, purpose or welfare, or for the benefit of the poorand the landless.

3. There is payment of just compensation, as required under Section 9, Article III of the Constitution, andother pertinent laws.

4. A valid and definite offer has been previously made to the owner of the property sought to beexpropriated, but said offer was not accepted.[25]

In the present case, the City of Mandaluyong seeks to exercise the power of eminent domain over petitioners'property by means of a resolution, in contravention of the first requisite. The law in this case is clear and freefrom ambiguity. Section 19 of the Code requires an ordinance, not a resolution, for the exercise of the powerof eminent domain. We reiterate our ruling in Municipality of Parañaque v. V.M. Realty Corporation[26]regarding the distinction between an ordinance and a resolution. In that 1998 case we held that:miso

We are not convinced by petitioner's insistence that the terms "resolution" and "ordinance" are synonymous.A municipal ordinance is different from a resolution. An ordinance is a law, but a resolution is merely adeclaration of the sentiment or opinion of a lawmaking body on a specific matter. An ordinance possesses ageneral and permanent character, but a resolution is temporary in nature. Additionally, the two are enacteddifferently -a third reading is necessary for an ordinance, but not for a resolution, unless decided otherwise bya majority of all the Sanggunian members.

We cannot uphold respondent's contention that an ordinance is needed only to appropriate funds after thecourt has determined the amount of just compensation. An examination of the applicable law will show thatan ordinance is necessary to authorize the filing of a complaint with the proper court since, beginning at thispoint, the power of eminent domain is already being exercised.

Rule 67 of the 1997 Revised Rules of Court reveals that expropriation proceedings are comprised of twostages:

(1) the first is concerned with the determination of the authority of the plaintiff to exercise the power ofeminent domain and the propriety of its exercise in the context of the facts involved in the suit; it ends withan order, if not in a dismissal of the action, of condemnation declaring that the plaintiff has a lawful right totake the property sought to be condemned, for the public use or purpose described in the complaint, uponthe payment of just compensation to be determined as of the date of the filing of the complaint;

(2) the second phase is concerned with the determination by the court of the just compensation for theproperty sought to be taken; this is done by the court with the assistance of not more than three (3)commissioners.[27]

Clearly, although the determination and award of just compensation to the defendant is indispensable to thetransfer of ownership in favor of the plaintiff, it is but the last stage of the expropriation proceedings, whichcannot be arrived at without an initial finding by the court that the plaintiff has a lawful right to take theproperty sought to be expropriated, for the public use or purpose described in the complaint. An order ofcondemnation or dismissal at this stage would be final, resolving the question of whether or not the plaintiffhas properly and legally exercised its power of eminent domain.

Also, it is noted that as soon as the complaint is filed the plaintiff shall already have the right to enter uponthe possession of the real property involved upon depositing with the court at least fifteen percent (15%) ofthe fair market value of the property based on the current tax declaration of the property to beexpropriated.[28] Therefore, an ordinance promulgated by the local legislative body authorizing its localchief executive to exercise the power of eminent domain is necessary prior to the filing by the latter of thecomplaint with the proper court, and not only after the court has determined the amount of justcompensation to which the defendant is entitled.basra

Neither is respondent's position improved by its reliance upon Article 36 (a), Rule VI of the IRR whichprovides that:

If the LGU fails to acquire a private property for public use, purpose, or welfare through purchase, LGU mayexpropriate said property through a resolution of the sanggunian authorizing its chief executive to initiateexpropriation proceedings.

The Court has already discussed this inconsistency between the Code and the IRR, which is more apparentthan real, in Municipality of Parañaque vs. V.M. Realty Corporation,[29] which we quote hereunder:

Petitioner relies on Article 36, Rule VI of the Implementing Rules, which requires only a resolution toauthorize an LGU to exercise eminent domain. This is clearly misplaced, because Section 19 of RA 7160, thelaw itself, surely prevails over said rule which merely seeks to implement it. It is axiomatic that the clear letterof the law is controlling and cannot be amended by a mere administrative rule issued for its implementation.Besides, what the discrepancy seems to indicate is a mere oversight in the wording of the implementing rules,since Article 32, Rule VI thereof, also requires that, in exercising the power of eminent domain, the chiefexecutive of the LGU must act pursuant to an ordinance.

Therefore, while we remain conscious of the constitutional policy of promoting local autonomy, we cannotgrant judicial sanction to a local government unit's exercise of its delegated power of eminent domain in

contravention of the very law giving it such power.

It should be noted, however, that our ruling in this case will not preclude the City of Mandaluyong fromenacting the necessary ordinance and thereafter reinstituting expropriation proceedings, for so long as it hascomplied with all other legal requirements.[30]

WHEREFORE, the petition is hereby GRANTED. The July 28, 1998 decision of Branch 155 of theRegional Trial Court of Pasig in SCA No. 875 is hereby REVERSED and SET ASIDE.akin

SO ORDERED.

Melo, (Chairman), Vitug, Panganiban, and Purisima, JJ., concur.

[1] Alberto Suguitan passed away on October 2, 1998. On November 25, 1998 the Court allowed the heirsof Alberto Suguitan to substitute the latter as petitioner.

[2] Rollo,17-18.

[3] REPUBLIKA NG PILIPINAS

SANGGUNIANG PANLUNGSOD

Lungsod Ng Mandaluyong

RESOLUTION NO. 396, S-1994

RESOLUTION AUTHORIZING MAYOR BENJAMIN S. ABALOS TO INITIATE AND INSTITUTEAPPROPRIATE STEPS TO EFFECT THE EXPROPRIATION OF THAT PARCEL OF LANDCOVERED BY TRANSFER CERTIFICATE OF TITLE NO. 56264.

BE IT APPROVED by the Sangguniang Panlungsod of the City of Mandaluyong in session assembled:

WHEREAS, the daily influx of patients to the Mandaluyong Medical Center has considerably increased to apoint that it could not accommodate some more.

WHEREAS, as the Mandaluyong Medical Center is the only institution that delivers health and medicalservices for free to the less fortunate residents of the City of Mandaluyong, it is imperative that appropriatesteps be undertaken in order that those that need its services may be accommodated.

WHEREAS, adjacent to the Mandaluyong Medical Center is a two storey building erected on a parcel ofland covered by Transfer Certificate of Title No. 56264 of the Registry of Deeds for Mandaluyong Branch.

WHEREAS, above structure and the land upon which the same is erected is very ideal for the projectedexpansion of the Mandaluyong Medical Center in order that it may continue to serve a greater number of lessfortunate residents of the City.

WHEREAS, and it appearing that the owner of the above property is not desirous of selling the same evenunder reasonable terms and conditions, there is a need that the power of eminent domain be exercised by theCity Government in order that public health and welfare may continuously be served in a proper and suitablemanner.

NOW, THEREFORE, upon motion duly seconded, the Sanngguniang Panlungsod, RESOLVED, as ithereby RESOLVES, to authorize, as Mayor Benjamin S. Abalos is hereby authorized, to initiate and instituteappropriate action for the expropriation of the property covered by Transfer Certificate of Title No. 56264 ofthe Registry of Deeds for Mandaluyong Branch, including the improvements erected thereon in order thatthe proposed expansion of the Mandaluyong Medical Center maybe implemented.

ADOPTED on this 13th day of October, 1994, at the City of Mandaluyong.

I HEREBY CERTIFY THAT THE FOREGOING RESOLUTION WAS ADOPTED AND APPROVEDBY THE SANGGUNIANG PANLUNGSOD OF MANDALUYONG IN REGULAR SESSION HELDON THE DATE , AND PLACE FIRST ABOVE GIVEN.

(sgd.)

WILLIARD S. WONG

Sanggunian Secretary

ATTESTED: APPROVED:

(sgd.) (sgd.)

RAMON M. GUZMAN BENJAMIN S. ABALOS

Vice-Mayor Mayor

Presiding Officer On: OCT 19 1994

[4] Rollo, 59.

[5] Ibid., 20-25.

[6] Ibid., 26-37.

[7] Ibid., 60; RTC Records, 86.

[8] Ibid., 60-62.

[9] Otherwise known as the "Local Government Code of 1991" (hereinafter, "[the] Code").

[10] Rollo, 8.

[11] Ibid., 15.

[12] Ibid., 50-51.

[13] Ibid., 10.

[14] Jeffress v. Town of Greenville, 70 S.E. 919, 921, 154 N.C. 490, cited in Words and Phrases, vol. 14, p.469 (1952).

[15] Ryan v. Housing Authority of City of Newark, 15 A.2d 647, 650, 125 N.J.L. 336.

[16] Schrader v. Third Judicial Dist. Court in and for Eureka County, 73 P. 2d 493, 495, 58 Nev. 188.

[17] Visayan Refining Co. v. Camus and Paredes, 40 Phil 550 (1919).

[18] Art. III, sec. 9.

[19] 1987 Constitution, art. III, sec. 1.

[20] Joaquin G. Bernas, The Constitution of the Republic of the Philippines: A Commentary, vol. 1, p. 43(1987).

[21] 40 Phil 349 (1919).

[22] City of Manila v. Chinese Community of Manila, Id.; Moday v. Court of Appeals, 268 SCRA 586(1997).

[23] City of Manila v. Chinese Community of Manila, Id.

[24] Isagani A. Cruz, Constitutional Law, p. 62 (1991); See also Republic of the Philippines v. La Orden dePO. Benedictinos de Filipinas, 1 SCRA 649 (1961); City of Manila v. Chinese Community of Manila, Id.

[25] Municipality of Parañaque v. V.M. Realty Corporation, 292 SCRA 678.

[26] Id.

[27] National Power Corporation v. Jocson, 206 SCRA 520 (1992), citing Municipality of Biñan v. Garcia,180 SCRA 576 (1989).

[28] Code, sec. 19.

[29] Supra note 25.

[30] Id.

FIRST DIVISION

1. [G.R. No. 127820. July 20, 1998]

MUNICIPALITY OF PARAÑAQUE, petitioner, vs. V.M. REALTY CORPORATION, respondent.

D E C I S I O N

PANGANIBAN, J.:

A local government unit (LGU), like the Municipality of Parañaque, cannot authorize an expropriation

of private property through a mere resolution of its lawmaking body. The Local Government Codeexpressly and clearly requires an ordinance or a local law for the purpose. A resolution that merelyexpresses the sentiment or opinion of the Municipal Council will not suffice. On the other hand, theprinciple of res judicata does not bar subsequent proceedings for the expropriation of the same propertywhen all the legal requirements for its valid exercise are complied with.

Statement of the Case

These principles are applied by this Court in resolving this petition for review on certiorari of the July 22,

1996 Decision[1] of the Court of Appeals[2] in CA GR CV No. 48048, which affirmed in toto[3] theRegional Trial Court’s August 9, 1994 Resolution.[4] The trial court dismissed the expropriation suit asfollows:

“The right of the plaintiff to exercise the power of eminent domain is not disputed. However, such right

may be exercised only pursuant to an Ordinance (Sec. 19, R.A. No. 7160). In the instant case, there is nosuch ordinance passed by the Municipal Council of Parañaque enabling the Municipality, thru its ChiefExecutive, to exercise the power of eminent domain. The complaint, therefore, states no cause of action.

Assuming that plaintiff has a cause of action, the same is barred by a prior judgment. On September 29,

1987, the plaintiff filed a complaint for expropriation involving the same parcels of land which wasdocketed as Civil Case No. 17939 of this Court (page 26, record). Said case was dismissed with prejudiceon May 18, 1988 (page 39, record). The order of dismissal was not appealed, hence, the same becamefinal. The plaintiff can not be allowed to pursue the present action without violating the principle of [r]es[j]udicata. While defendant in Civil Case No. 17939 was Limpan Investment Corporation, the doctrineof res judicata still applies because the judgment in said case (C.C. No. 17939) is conclusive between theparties and their successors-in-interest (Vda. de Buncio vs. Estate of the late Anita de Leon). The hereindefendant is the successor-in-interest of Limpan Investment Corporation as shown by the ‘Deed ofAssignment Exchange’ executed on June 13, 1990.

WHEREFORE, defendant’s motion for reconsideration is hereby granted. The order dated February 4,

1994 is vacated and set aside.

This case is hereby dismissed. No pronouncement as to costs.

SO ORDERED.”[5]

Factual Antecedents

Pursuant to Sangguniang Bayan Resolution No. 93-95, Series of 1993,[6] the Municipality of Parañaque

filed on September 20, 1993, a Complaint for expropriation[7] against Private Respondent V.M. RealtyCorporation over two parcels of land (Lots 2-A-2 and 2-B-1 of Subdivision Plan Psd-17917), with acombined area of about 10,000 square meters, located at Wakas, San Dionisio, Parañaque, MetroManila, and covered by Torrens Certificate of Title No. 48700. Allegedly, the complaint was filed “forthe purpose of alleviating the living conditions of the underprivileged by providing homes for thehomeless through a socialized housing project.”[8] Parenthetically, it was also for this stated purpose thatpetitioner, pursuant to its Sangguniang Bayan Resolution No. 577, Series of 1991,[9] previously made anoffer to enter into a negotiated sale of the property with private respondent, which the latter did notaccept.[10]

Finding the Complaint sufficient in form and substance, the Regional Trial Court of Makati, Branch

134, issued an Order dated January 10, 1994,[11] giving it due course. Acting on petitioner’s motion,said court issued an Order dated February 4, 1994,[12] authorizing petitioner to take possession of thesubject property upon deposit with its clerk of court of an amount equivalent to 15 percent of its fairmarket value based on its current tax declaration.

On February 21, 1994, private respondent filed its Answer containing affirmative defenses and a

counterclaim,[13] alleging in the main that (a) the complaint failed to state a cause of action because itwas filed pursuant to a resolution and not to an ordinance as required by RA 7160 (the LocalGovernment Code); and (b) the cause of action, if any, was barred by a prior judgment or res judicata. Onprivate respondent’s motion, its Answer was treated as a motion to dismiss.[14] On March 24, 1994,[15]petitioner filed its opposition, stressing that the trial court’s Order dated February 4, 1994 was in accordwith Section 19 of RA 7160, and that the principle of res judicata was not applicable.

Thereafter, the trial court issued its August 9, 1994 Resolution[16] nullifying its February 4, 1994 Order

and dismissing the case. Petitioner’s motions for reconsideration and transfer of venue were denied by thetrial court in a Resolution dated December 2, 1994.[17] Petitioner then appealed to Respondent Court,raising the following issues:

“1. Whether or not the Resolution of the Parañaque Municipal Council No. 93-95, Series of 1993 is a

substantial compliance of the statutory requirement of Section 19, R.A. 7180 [sic] in the exercise of thepower of eminent domain by the plaintiff-appellant.

2. Whether or not the complaint in this case states no cause of action.

3. Whether or not the strict adherence to the literal observance to the rule of procedure resulted in

technicality standing in the way of substantial justice.

4. Whether or not the principle of res judicata is applicable to the present case.”[18]

As previously mentioned, the Court of Appeals affirmed in toto the trial court’s Decision. Respondent

Court, in its assailed Resolution promulgated on January 8, 1997,[19] denied petitioner’s Motion forReconsideration for lack of merit.

Hence, this appeal.[20]

The Issues

Before this Court, petitioner posits two issues, viz.:

“1. A resolution duly approved by the municipal council has the same force and effect of an ordinance

and will not deprive an expropriation case of a valid cause of action.

2. The principle of res judicata as a ground for dismissal of case is not applicable when public interest is

primarily involved.”[21]

The Court’s Ruling

The petition is not meritorious.

First Issue:

Resolution Different from an Ordinance

Petitioner contends that a resolution approved by the municipal council for the purpose of initiating an

expropriation case “substantially complies with the requirements of the law”[22] because the terms“ordinance” and “resolution” are synonymous for “the purpose of bestowing authority [on] the localgovernment unit through its chief executive to initiate the expropriation proceedings in court in theexercise of the power of eminent domain.”[23] Petitioner seeks to bolster this contention by citing Article36, Rule VI of the Rules and Regulations Implementing the Local Government Code, which provides:“If the LGU fails to acquire a private property for public use, purpose, or welfare through purchase, theLGU may expropriate said property through a resolution of the Sanggunian authorizing its chief executiveto initiate expropriation proceedings.”[24] (Italics supplied.)

The Court disagrees. The power of eminent domain is lodged in the legislative branch of government,

which may delegate the exercise thereof to LGUs, other public entities and public utilities.[25] An LGUmay therefore exercise the power to expropriate private property only when authorized by Congress and

subject to the latter’s control and restraints, imposed “through the law conferring the power or in otherlegislations.”[26] In this case, Section 19 of RA 7160, which delegates to LGUs the power of eminentdomain, also lays down the parameters for its exercise. It provides as follows:

“Section 19. Eminent Domain. A local government unit may, through its chief executive and actingpursuant to an ordinance, exercise the power of eminent domain for public use, or purpose, or welfare forthe benefit of the poor and the landless, upon payment of just compensation, pursuant to the provisionsof the Constitution and pertinent laws: Provided, however, That the power of eminent domain may not beexercised unless a valid and definite offer has been previously made to the owner, and such offer was notaccepted: Provided, further, That the local government unit may immediately take possession of theproperty upon the filing of the expropriation proceedings and upon making a deposit with the propercourt of at least fifteen percent (15%) of the fair market value of the property based on the current taxdeclaration of the property to be expropriated: Provided, finally, That, the amount to be paid for theexpropriated property shall be determined by the proper court, based on the fair market value at the timeof the taking of the property.” (Emphasis supplied)

Thus, the following essential requisites must concur before an LGU can exercise the power of eminentdomain:

1. An ordinance is enacted by the local legislative council authorizing the local chief executive, in behalfof the LGU, to exercise the power of eminent domain or pursue expropriation proceedings over aparticular private property.

2. The power of eminent domain is exercised for public use, purpose or welfare, or for the benefit of thepoor and the landless.

3. There is payment of just compensation, as required under Section 9, Article III of the Constitution,and other pertinent laws.

4. A valid and definite offer has been previously made to the owner of the property sought to beexpropriated, but said offer was not accepted.[27]

In the case at bar, the local chief executive sought to exercise the power of eminent domain pursuant to aresolution of the municipal council. Thus, there was no compliance with the first requisite that the mayorbe authorized through an ordinance. Petitioner cites Camarines Sur vs. Court of Appeals[28] to show that aresolution may suffice to support the exercise of eminent domain by an LGU.[29] This case, however, isnot in point because the applicable law at that time was BP 337,[30] the previous Local GovernmentCode, which had provided that a mere resolution would enable an LGU to exercise eminent domain. Incontrast, RA 7160,[31] the present Local Government Code which was already in force when theComplaint for expropriation was filed, explicitly required an ordinance for this purpose.

We are not convinced by petitioner’s insistence that the terms “resolution” and “ordinance” are

synonymous. A municipal ordinance is different from a resolution. An ordinance is a law, but a resolutionis merely a declaration of the sentiment or opinion of a lawmaking body on a specific matter.[32] Anordinance possesses a general and permanent character, but a resolution is temporary in nature.Additionally, the two are enacted differently -- a third reading is necessary for an ordinance, but not for aresolution, unless decided otherwise by a majority of all the Sanggunian members.[33]

If Congress intended to allow LGUs to exercise eminent domain through a mere resolution, it would

have simply adopted the language of the previous Local Government Code. But Congress did not. In aclear divergence from the previous Local Government Code, Section 19 of RA 7160 categoricallyrequires that the local chief executive act pursuant to an ordinance. Indeed, “[l]egislative intent isdetermined principally from the language of a statute. Where the language of a statute is clear andunambiguous, the law is applied according to its express terms, and interpretation would be resorted toonly where a literal interpretation would be either impossible or absurd or would lead to an injustice.”[34]In the instant case, there is no reason to depart from this rule, since the law requiring an ordinance is notat all impossible, absurd, or unjust.

Moreover, the power of eminent domain necessarily involves a derogation of a fundamental or private

right of the people.[35] Accordingly, the manifest change in the legislative language -- from “resolution”under BP 337 to “ordinance” under RA 7160 -- demands a strict construction. “No species of property isheld by individuals with greater tenacity, and is guarded by the Constitution and laws more sedulously,than the right to the freehold of inhabitants. When the legislature interferes with that right and, forgreater public purposes, appropriates the land of an individual without his consent, the plain meaning ofthe law should not be enlarged by doubtful interpretation.”[36]

Petitioner relies on Article 36, Rule VI of the Implementing Rules, which requires only a resolution to

authorize an LGU to exercise eminent domain. This is clearly misplaced, because Section 19 of RA7160, the law itself, surely prevails over said rule which merely seeks to implement it.[37] It is axiomaticthat the clear letter of the law is controlling and cannot be amended by a mere administrative rule issuedfor its implementation. Besides, what the discrepancy seems to indicate is a mere oversight in thewording of the implementing rules, since Article 32, Rule VI thereof, also requires that, in exercising thepower of eminent domain, the chief executive of the LGU must act pursuant to an ordinance.

In this ruling, the Court does not diminish the policy embodied in Section 2, Article X of the

Constitution, which provides that “territorial and political subdivisions shall enjoy local autonomy.” Itmerely upholds the law as worded in RA 7160. We stress that an LGU is created by law and all itspowers and rights are sourced therefrom. It has therefore no power to amend or act beyond the authoritygiven and the limitations imposed on it by law. Strictly speaking, the power of eminent domain delegatedto an LGU is in reality not eminent but “inferior” domain, since it must conform to the limits imposed bythe delegation, and thus partakes only of a share in eminent domain.[38] Indeed, “the national legislature

is still the principal of the local government units, which cannot defy its will or modify or violate it.”[39]

Complaint Does Not State a Cause of Action

In its Brief filed before Respondent Court, petitioner argues that its Sanguniang Bayan passed anordinance on October 11, 1994 which reiterated its Resolution No. 93-35, Series of 1993, and ratified allthe acts of its mayor regarding the subject expropriation.[40]

This argument is bereft of merit. In the first place, petitioner merely alleged the existence of such anordinance, but it did not present any certified true copy thereof. In the second place, petitioner did notraise this point before this Court. In fact, it was mentioned by private respondent, and only inpassing.[41] In any event, this allegation does not cure the inherent defect of petitioner’s Complaint forexpropriation filed on September 23, 1993. It is hornbook doctrine that:

“ x x x in a motion to dismiss based on the ground that the complaint fails to state a cause of action, thequestion submitted before the court for determination is the sufficiency of the allegations in thecomplaint itself. Whether those allegations are true or not is beside the point, for their truth ishypothetically admitted by the motion. The issue rather is: admitting them to be true, may the courtrender a valid judgment in accordance with the prayer of the complaint?”[42]

The fact that there is no cause of action is evident from the face of the Complaint for expropriation whichwas based on a mere resolution. The absence of an ordinance authorizing the same is equivalent to lack ofcause of action. Consequently, the Court of Appeals committed no reversible error in affirming the trialcourt’s Decision which dismissed the expropriation suit.

Second Issue:

Eminent Domain Not Barred by Res Judicata

As correctly found by the Court of Appeals[43] and the trial court,[44] all the requisites for theapplication of res judicata are present in this case. There is a previous final judgment on the merits in aprior expropriation case involving identical interests, subject matter and cause of action, which has beenrendered by a court having jurisdiction over it.

Be that as it may, the Court holds that the principle of res judicata, which finds application in generally allcases and proceedings,[45] cannot bar the right of the State or its agent to expropriate private property.The very nature of eminent domain, as an inherent power of the State, dictates that the right to exercisethe power be absolute and unfettered even by a prior judgment or res judicata. The scope of eminentdomain is plenary and, like police power, can “reach every form of property which the State might needfor public use.”[46] “All separate interests of individuals in property are held of the government underthis tacit agreement or implied reservation. Notwithstanding the grant to individuals, the eminent domain,the highest and most exact idea of property, remains in the government, or in the aggregate body of the

people in their sovereign capacity; and they have the right to resume the possession of the propertywhenever the public interest requires it.”[47] Thus, the State or its authorized agent cannot be foreverbarred from exercising said right by reason alone of previous non-compliance with any legal requirement.

While the principle of res judicata does not denigrate the right of the State to exercise eminent domain, itdoes apply to specific issues decided in a previous case. For example, a final judgment dismissing anexpropriation suit on the ground that there was no prior offer precludes another suit raising the sameissue; it cannot, however, bar the State or its agent from thereafter complying with this requirement, asprescribed by law, and subsequently exercising its power of eminent domain over the same property.[48]By the same token, our ruling that petitioner cannot exercise its delegated power of eminent domainthrough a mere resolution will not bar it from reinstituting similar proceedings, once the said legalrequirement and, for that matter, all others are properly complied with. Parenthetically and by parity ofreasoning, the same is also true of the principle of “law of the case.” In Republic vs De Knecht,[49] theCourt ruled that the power of the State or its agent to exercise eminent domain is not diminished by themere fact that a prior final judgment over the property to be expropriated has become the law of the caseas to the parties. The State or its authorized agent may still subsequently exercise its right to expropriatethe same property, once all legal requirements are complied with. To rule otherwise will not onlyimproperly diminish the power of eminent domain, but also clearly defeat social justice.

WHEREFORE, the petition is hereby DENIED without prejudice to petitioner’s proper exercise of itspower of eminent domain over subject property. Costs against petitioner.

SO ORDERED.

Davide, Jr., (Chairman), Bellosillo, Vitug, and Quisumbing, JJ., concur.

[1] Rollo, pp. 21-25.

[2] Special Sixth Division, composed of J. Antonio M. Martinez (now an Associate Justice of theSupreme Court), ponente and chairman; and JJ. Ricardo P. Galvez and Hilarion L. Aquino, concurring.

[3] See Rollo, p. 25.

[4] Penned by acting Presiding Judge Paul T. Arcangel.

[5] Resolution of the Regional Trial Court, p. 2; Rollo, p. 70.

[6] Rollo, pp. 41-43.

[7] Ibid., pp. 27-32.

[8] Petitioner’s Memorandum, p. 1; Rollo, p. 184.

[9] Rollo, pp. 37-38.

[10] Complaint, p. 3; Rollo, p. 29.

[11] Rollo, p. 45.

[12] Ibid., p. 47.

[13] Ibid., pp. 48-51.

[14] Private respondent’s Memorandum, pp. 1-2; Rollo, pp. 197-198.

[15] Rollo, pp. 66-68.

[16] Ibid., pp. 69-70.

[17] Ibid., pp. 71-72.

[18] Ibid., pp. 78-79.

[19] Ibid., p. 26.

[20] The case was deemed submitted for resolution on March 13, 1998, when the Court received private

respondent’s Memorandum.

[21] Petitioner’s Memorandum, p. 3; Rollo, p. 187.

[22] Ibid., p. 4; Rollo, p. 188.

[23] Ibid.

[24] Paragraph A.

[25] Moday vs. Court of Appeals, 268 SCRA 586, 592, February 20, 1997.

[26] Province of Camarines Sur vs. Court of Appeals, 222 SCRA 173, 179-180, May 17, 1993, per

Quiason, J.

[27] Senator Aquilino Q. Pimentel, Jr., The Local Government Code of 1991: The Key To National

Development, 1993 ed., p. 110.

[28] Supra.

[29] Petitioner’s Memorandum, p. 6; Rollo, p. 189.

[30] Approved on February 10, 1983 and published in 79 O.G. No. 7. See Moday vs. Court of Appeals,

supra, p. 593. Sec. 9 of BP 337 reads:

“SEC. 9. Eminent Domain. --- A local government unit may, through its head and acting pursuant to a

resolution of its sanggunian, exercise the right of eminent domain and institute condemnationproceedings for public use or purpose.”

[31] Effective January 1, 1992.

[32] Mascuñana vs. Provincial Board of Negros Occidental, 79 SCRA 399, 405, October 18, 1977; cited

in private respondent’s Memorandum, p. 5.

[33] Article 107, pars. a and c, Implementing Rules and Regulations of RA 7160; cited in Pimentel, Jr.,

supra, pp. 163-164.

[34] Azarcon vs. Sandiganbayan, 268 SCRA 747, 762, February 26, 1997, per Panganiban, J.; citing

Ramirez vs. Court of Appeals, 248 SCRA 590, 596, September 28, 1995.

[35] City of Manila vs. Chinese Community of Manila, 40 Phil 349, 366 (1919), and Arriete vs.

Director of Public Works, 58 Phil 507, 511 (1933). See also Bernas, Joaquin G., The 1987 Constitutionof the Republic of the Philippines: A Commentary, 1996 ed., p. 348.

[36] Justice Isagani A. Cruz, Constitutional Law, 1993 ed., p. 59.

[37] See Villa vs. Llanes, Jr., 120 SCRA 81, 84, January 21, 1983, and Wise & Co. vs. Meer, 78 Phil

655, 676 (1947). See also Art. 7, Civil Code of the Philippines.

[38] Bernas, supra, pp. 348-349.

[39] Magtajas vs. Pryce Properties, Corp., Inc., 234 SCRA 255, 272-273, July 20, 1994, per Cruz, J.

[40] Rollo, pp. 81-82.

[41] See private respondent’s Memorandum, pp. 5-6; Rollo, pp. 201-202.

[42] Travel Wide Associated Sales (Phils.), Inc. vs. Court of Appeals, 199 SCRA 205, 210, July 15,

1991, per Cruz, J.; citing The Heirs of Juliana Clavano vs. Genato, 80 SCRA 217, 222, October 28,1977.

[43] Decision, p. 5; Rollo, p. 25.

[44] Resolution of the Regional Trial Court, p. 2; Rollo, p. 70.

[45] Republic vs. Director of Lands, 99 SCRA 651, 657, September 11, 1980.

[46] Bernas, supra, p. 349.

[47] Ibid.

[48] See National Power Corporation vs. Court of Appeals, 254 SCRA 577, March 11, 1996.

[49] 182 SCRA 142, 147-148, February 12, 1990.

THIRD DIVISION

1. [G.R. No. 137537. January 28, 2000]

SMI DEVELOPMENT CORPORATION, Petitioner, v. REPUBLIC OF THE PHILIPPINESrepresented by the DEPARTMENT OF HEALTH through the NATIONAL CHILDRENS

HOSPITAL, Respondent.

D E C I S I O N

PANGANIBAN, J.:

In an eminent domain proceeding, a motion to dismiss filed under Rule 67 prior to the 1997 amendmentspartakes of the nature of an answer. Hence, its allegations of facts must be proven. On the other hand, under the1997 Rules, upon the governments deposit of an amount equivalent to the assessed value of the property, a writof possession shall be issued by the trial court without need of any hearing as to the amount to be deposited.

The Case

Before us is a Petition for Review on Certiorari under Rule 45 of the Rules of Court seeking to set aside theAugust 14, 1998 Decision1of the Court of Appeals2in CA-GR SP No. 44618; and its February 10, 1999Resolution3denying petitioners Motion for Reconsideration.

In the assailed Decision, the CA ruled that the trial judge acted without or in excess of jurisdiction in orderingthe dismissal of the Complaint for eminent domain in Civil Case No. Q-96-28894. It disposed in this wise:

"WHEREFORE, public respondent having acted without or in excess of jurisdiction in issuing the assailed orderof dismissal of the complaint, said order is NULLIFIED and SET ASIDE.

"Branch 225 of the Regional Trial Court of Quezon City is hereby directed to reinstate Civil Case No. Q-96-28894 to its docket and conduct proceedings and render judgment thereon in accordance with the Rules ofCourt and the law."4

The Facts

The Court of Appeals summarized the undisputed facts as follows:

"On September 20, 1996, the Republic of the Philippines represented by the Department of Health thru theNational Childrens Hospital filed a complaint for Eminent Domain against SMI Development Corporation forthe purpose of expropriating three (3) parcels of land with a total area of 1,158 sq. m. (the properties) belongingto said corporation which are adjacent to the premises of the hospital.

"After summons was served on the defendant, the plaintiff filed on October 23, 1996 an Ex-Parte Motion forthe Issuance of Order and Writ of Possession, after it deposited P3,126,000.00 representing the aggregateassessed value for taxation purposes of the property subject of the complaint at P2,700.00 per sq. m.

"By Order of October 30, 1996, Branch 225 of the Quezon City RTC set the plaintiffs motion for hearing onDecember 11, 1996.

"In November 1996, the defendant filed a Motion to Dismiss and Opposition to the plaintiffs Ex-Parte Motionfor Issuance of Order and Writ of Possession. In its Motion to Dismiss, the defendant alleged that the complaintlacked or had insufficient cause of action; that the taking of the property would not serve the purpose for whichit was intended; that the plaintiff failed to negotiate with it for the purchase of the property which reflects against

the urgency and necessity of the plaintiffs need of the property and implies lack of intention to pay its true andfair market value; and that [the] necessity to expropriate the property is negated by the fact that less than akilometer from the plaintiffs premises was the Quezon Institute which is presently not put to its optimum useand is a better place for putting up the frontline services for which the property is needed with less costs and lessprejudice to private rights.

"In its Opposition to the plaintiffs Motion for Issuance of Order and Writ of Possession, the defendant allegedthat, among others, no urgency and necessity existed for the plaintiff to take possession of the property; thatimmediate possession upon mere deposit of the amount purportedly representing the aggregate assessed valueof the property, if authorized by P.D. 42, is offensive to the due process clause of the Constitution, hence, saiddecree is unconstitutional, and at any rate Sec. 2 of Rule 67 of the Rules of Court still governs the procedure forascertaining just compensation, even on a provisional basis, as held in the case of Ignacio v. Guerrero, 150 SCRA369 promulgated on May 29, 1987, hence, the courts must determine provisionally the fair market value of theproperty and require the deposit thereof prior to allowing the plaintiff to acquire possession."5

Ruling of the Court of Appeals

Citing Section 3, Rule 67 of the Rules of Court (prior the 1997 amendments), the Court of Appeals held that(1) petitioners Motion to Dismiss filed with the trial court took the place of an answer, and (2) it was not anordinary motion to dismiss within the contemplation of Rules 15 and 16. It also held that the grounds statedtherein, with the exception of lack of cause of action, were not those enumerated in Rule 16. As the said Motionpartook of the nature of a pleading, the trial judge thus acted in excess of jurisdiction in granting it withouthaving received any evidence beforehand from either of the parties.

In any case, even if the said Motion to Dismiss were considered as such within the contemplation of Rule 16,the trial court would still be deemed to have acted in excess of its jurisdiction, since the only ground alleged,among those enumerated under Rule 16, was lack of cause of action. It was therefore outside public respondentsjurisdiction to grant the Motion on the basis of "uncontroverted and undisputed factual and legal allegationsrelating to the issue of necessity for the expropriation,"6when the only issue that ought to have been resolved waswhether or not the allegations of the Complaint had stated a cause of action.

Hence, this recourse.7

Issues

Petitioner submits, for the consideration of this Court, the following assignment of errors:

"A........Whether or not the remedy of certiorari is proper in case of the dismissal of the complaint forexpropriation[;]

B........Whether or not the court a quos resolution of the motion to dismiss without receiving the evidence ofboth parties on the merits of the case was correct[;]

C........Whether or not the complaint states a cause of action[; and]

D........Whether or not the honorable Court of Appeals committed grave error when it annulled and reversedthe order of the Regional Trial Court (Branch 225) of Quezon City."8

In addition, this Court will take up the solicitor general's request for a writ of preliminary mandatory injunction.

The Courts Ruling

The Petition has no merit.

Procedural Issue: Propriety of Certiorari

Petitioner claims that the Court of Appeals erred in allowing respondents Petition for Certiorari under Rule 65of the Rules of Court, arguing that the proper remedy was an ordinary appeal. It stresses that certiorari is availableonly when there is no appeal or any plain, speedy and adequate remedy in the ordinary course of law.

Under Section 1 of Rule 65 of the Rules of Court, "when any tribunal, board or officer exercising judicial orquasi-judicial functions has acted without or in excess of its or his jurisdiction, or with grave abuse of discretionamounting to lack or excess of jurisdiction, and there is no appeal, or any plain, speedy, and adequate remedyin the ordinary course of law, a person aggrieved thereby may file a verified petition in the proper court, allegingthe facts with certainty and praying that judgment be rendered annulling or modifying the proceedings of suchtribunal, board or officer, and granting such incidental reliefs as law and justice may require."9

True, certiorari may not be resorted to when appeal is available as a remedy. However, it is equally true that thisCourt has allowed the issuance of a writ of certiorari when appeal does not provide a speedy and adequate remedyin the ordinary course of law. Indeed, in PNB v. Sayo,10 this Court has ruled that the "availability of an appealdoes not foreclose recourse to the ordinary remedies of certiorari or prohibition where appeal is not adequate,or equally beneficial, speedy and sufficient." In Republic v. Sandiganbayan,11this Court also held that "certiorarimay be availed of where an appeal would be slow, inadequate and insufficient." The determination as to whatexactly constitutes a plain, speedy and adequate remedy rests on judicial discretion and depends on the particularcircumstances of each case.

In the case at bar, the Court of Appeals did not commit any reversible error in allowing the Petition for Certiorarifiled by the government. The respondent was able to prove, to the CAs satisfaction, that appeal from the trialcourt Decision would not constitute a speedy and adequate remedy, thus necessitating the resort to theextraordinary remedy of certiorari under Rule 65. In its Petition before the CA, respondent cited the serviceswhich the hospital provided and its urgent need to expand to be able to continue providing quality tertiary healthcare to the ever-increasing population of its indigent patients. In short, the public interest involved and theurgency to provide medical facilities were enough justifications for respondents resort to certiorari.-

Substantive Issues: Dismissal Without Prior Evidence and Lack of Cause of Action

In granting petitioners Motion to Dismiss, the Regional Trial Court (RTC) found "it difficult to understand whythe [respondent] had to invade [petitioner's] property instead of looking into the possibility of increasing itsfloors."12 The RTC further stated that "as correctly pointed out by the [petitioner], the [respondent hospital's]so-called frontline services could be [done] by expanding vertically or increasing the floors of its building. The[trial] court is of the opinion that a vertical expansion of [respondent's] building would be more reasonable andpractical. In this way, the [respondent] would be able to save time and money."13The RTC upheld "the allegationof the defendant x x x that less than a kilometer away from the plaintiffs building lies the Quezon Institute (QI),which, despite its vast area, has not been put to its maximum use by the government."14

The CA correctly observed, however, that the trial judge should not have granted the Motion to Dismiss basedon these grounds, without first receiving evidence from the parties. Obviously, the RTCs February 12, 1997Resolution treated petitioners Motion to Dismiss as one falling under Section 3 of Rule 67 of the Rules of Court,rather than as an ordinary one, since the grounds relied upon were not those enumerated in Section 1, Rule1615of the Rules of Court.16

Section 3, Rule 67 of the Rules of Court (prior the 1997 amendments) provides as follows:

"SEC. 3. Defenses and Objections. --- Within the time specified in the summons, each defendant, in lieu of ananswer, shall present in a single motion to dismiss or for other appropriate relief, all of his objections and defensesto the right of the plaintiff to take his property for the use or purpose specified in the complaint. All suchobjections and defenses not so presented are waived. A copy of the motion shall be served on the plaintiffs

attorney of record and filed with the court with the proof of service."17

Under the above rule, petitioners Motion to Dismiss partakes of the nature of an answer to respondentsComplaint for eminent domain. Without proof as to their truthfulness and veracity, the allegations in theMotion cannot be deemed proven. Hence, the CA was correct in holding that the trial judge should not havedecided it based solely on the unsubstantiated allegations therein.

Lack of Cause of Action

Although petitioners Motion to Dismiss alleged lack of cause of action, the trial judge made no ruling on thisground. Hence, the CA committed no reversible error in not lengthily discussing such ground. Only the matterscontained in the decision below and raised as issues may be reviewed on appeal.18

In any event, we hold that the Complaint stated a cause of action for eminent domain. The necessity for takingpetitioner's property for public use upon payment of just compensation was alleged in the said Complaint. Theallegation stressing that the property would be used to improve the delivery of health services satisfied therequirements of necessity and public use. Needless to state, respondent has the burden of proving the elementsof eminent domain during the continuation of the proceedings in the trial court, and the petitioner the right torebut such proof.

Citing Iron and Steel Authority v. Court of Appeals,19 petitioner insists that before eminent domain may beexercised by the state, there must be a showing of prior unsuccessful negotiation with the owner of the propertyto be expropriated.

This contention is not correct. As pointed out by the solicitor general, the current effective law on delegatedauthority to exercise the power of eminent domain is found in Section 12, Book III of the Revised AdministrativeCode, which provides:

"SEC. 12. Power of Eminent Domain -- The President shall determine when it is necessary or advantageous toexercise the power of eminent domain in behalf of the National Government, and direct the Solicitor General,whenever he deems the action advisable, to institute expropriation proceedings in the proper court."

The foregoing provision does not require prior unsuccessful negotiation as a condition precedent for the exerciseof eminent domain. In Iron and Steel Authority v. Court of Appeals, the President chose to prescribe this conditionas an additional requirement instead. In the instant case, however, no such voluntary restriction was imposed.

Additional Issue: Issuance of Writ of Possession Justified

This Court deems meritorious the request of the solicitor general for the issuance of a writ of preliminarymandatory injunction.20This request was filed on December 22, 1999; hence, the 1997 Rules apply.

In Robern Development Corporation v. Judge Quitain,21 the Court stated:

"In the present case, although the Complaint for expropriation was filed on June 6, 1997, the Motion for theIssuance of the Writ of Possession was filed on July 28, 1997; thus, the issuance of the Writ is covered by the1997 Rules. As earlier stated, procedural rules are given immediate effect and are applicable to actions pendingand undetermined at the time they are passed; new court rules apply to proceedings that take place after the dateof their effectivity. Therefore, Section 2, Rule 67 of the 1997 Rules of Civil Procedure, is the prevailing andgoverning law in this case."

Section 2, Rule 67 of the 1997 Rules of Court, states:

"Sec. 2. Entry of plaintiff upon depositing value with authorized government depositary. -- Upon the filing of the

complaint or at any time thereafter, and after due notice to the defendant, the plaintiff shall have the right to takeor enter upon the possession of the real or personal property involved if he deposits with the authorizedgovernment depositary an amount equivalent to the assessed value of the property for purposes of taxation to beheld by such bank subject to the orders of the court. Such deposit shall be in money, unless in lieu thereof thecourt authorizes the deposit of a certificate of deposit in a government bank of the Republic of the Philippinespayable on demand to the authorized government depositary.

"If personal property is involved, its value shall be provisionally ascertained and the amount to be deposited shallbe promptly fixed by the court.

"After such deposit is made the court shall order the sheriff or other proper officer to forthwith place the plaintiffin possession of the property involved and promptly submit a report thereof to the court with service of copiesto the parties."

Under the foregoing Section, the Republic is entitled to a writ of possession, once the provisional compensationmentioned therein is deposited. We refer again to Robern for authority:

"With the revision of the Rules, the trial courts issuance of the Writ of Possession becomes ministerial, once theprovisional compensation mentioned in the 1997 Rules is deposited."22

In the present case, an amount equivalent to the assessed value of the land has already been deposited. This factis not contested and is readily shown by a certification23letter issued by the Philippine National Bank stating thatthe Department of Health-National Childrens Hospital has already deposited P3,126,600 representing theassessed value of the property mentioned in Civil Case No. Q-96-28894.

WHEREFORE, the Petition is hereby DENIED and the assailed Decision and Resolution AFFIRMED.Moreover, the Court grants the Republics request for the issuance of a writ of preliminary mandatory injunction.The court of origin is hereby directed to issue a writ of possession to enable the Republic of the Philippines toprovisionally enter and take possession of petitioners property, which is the subject of the condemnationproceedings in Civil Case No. Q-96-28894. Costs against petitioner.

SO ORDERED.

Melo, (Chairman), Vitug, Purisima, and Gonzaga-Reyes, JJ., concur.2/17/00 10:00 AM

Republic of the PhilippinesSUPREME COURT

Manila

1. FIRST DIVISION

G.R. No. 103125 May 17, 1993

PROVINCE OF CAMARINES SUR, represented by GOV. LUIS R. VILLAFUERTE and HON.BENJAMIN V. PANGA as Presiding Judge of RTC Branch 33 at Pili, Camarines Sur, petitioners, vs.THE COURT OF APPEALS (THIRD DIVISION), ERNESTO SAN JOAQUIN and EFREN SANJOAQUIN, respondents.

The Provincial Attorney for petitioners.

Reynaldo L. Herrera for Ernesto San Joaquin.

QUIASON, J.:

In this appeal by certiorari from the decision of the Court of Appeals in AC-G.R. SP No. 20551 entitled "ErnestoN. San Joaquin, et al., v. Hon. Benjamin V. Panga, et al.," this Court is asked to decide whether theexpropriation of agricultural lands by local government units is subject, to the prior approval of the Secretary ofthe Agrarian Reform, as the implementator of the agrarian reform program.

On December 22, 1988, the Sangguniang Panlalawigan of the Province of Camarines Sur passed Resolution No.129, Series of 1988, authorizing the Provincial Governor to purchase or expropriate property contiguous to theprovincial capitol site, in order to establish a pilot farm for non-food and non-traditional agricultural crops anda housing project for provincial government employees.

The "WHEREAS" clause o:f the Resolution states:

WHEREAS, the province of Camarines Sur has adopted a five-year Comprehensive Developmentplan, some of the vital components of which includes the establishment of model and pilot farm fornon-food and non-traditional agricultural crops, soil testing and tissue culture laboratory centers, 15small scale technology soap making, small scale products of plaster of paris, marine biological and seafarming research center,and other progressive feasibility concepts objective of which is to provide thenecessary scientific and technology know-how to farmers and fishermen in Camarines Sur and toestablish a housing project for provincial government employees;

WHEREAS, the province would need additional land to be acquired either by purchase orexpropriation to implement the above program component;

WHEREAS, there are contiguous/adjacent properties to be (sic) present Provincial Capitol Siteideally suitable to establish the same pilot development center;

WHEREFORE . . . .

Pursuant to the Resolution, the Province of Camarines Sur, through its Governor, Hon. Luis R.Villafuerte, filedtwo separate cases for expropriation against Ernesto N. San Joaquin and Efren N. San Joaquin, docketed asSpecial Civil Action Nos. P-17-89 and P-19-89 of the Regional Trial Court, Pili, Camarines Sur, presided bythe Hon. Benjamin V. Panga.

Forthwith, the Province of Camarines Sur filed a motion for the issuance of writ of possession. The San Joaquinsfailed to appear at the hearing of the motion.

The San Joaquins moved to dismiss the complaints on the ground of inadequacy of the price offered for theirproperty. In an order dated December 6, 1989, the trial court denied the motion to dismiss and authorized theProvince of Camarines Sur to take possession of the property upon the deposit with the Clerk of Court of theamount of P5,714.00, the amount provisionally fixed by the trial court to answer for damages that privaterespondents may suffer in the event that the expropriation cases do not prosper. The trial court issued a writ ofpossession in an order dated January18, 1990.

The San Joaquins filed a motion for relief from the order, authorizing the Province of Camarines Sur to takepossession of their property and a motion to admit an amended motion to dismiss. Both motions were deniedin the order dated February 1990.

In their petition before the Court of Appeals, the San Joaquins asked: (a) that Resolution No. 129, Series of 1988of the Sangguniang Panlalawigan be declared null and void; (b) that the complaints for expropriation bedismissed; and (c) that the order dated December 6, 1989 (i) denying the motion to dismiss and (ii) allowingthe Province of Camarines Sur to take possession of the property subject of the expropriation and the order datedFebruary 26, 1990, denying the motion to admit the amended motion to dismiss, be set aside. They also askedthat an order be issued to restrain the trial court from enforcing the writ of possession, and thereafter to issue awrit of injunction.

In its answer to the petition, the Province of Camarines Sur claimed that it has the authority to initiate theexpropriation proceedings under Sections 4 and 7 of Local Government Code (B.P. Blg. 337) and that theexpropriations are for a public purpose.

Asked by the Court of Appeals to give his Comment to the petition, the Solicitor General stated that underSection 9 of the Local Government Code (B.P. Blg. 337), there was no need for the approval by the Office ofthe President of the exercise by the Sangguniang Panlalawigan of the right of eminent domain. However, theSolicitor General expressed the view that the Province of Camarines Sur must first secure the approval of theDepartment of Agrarian Reform of the plan to expropriate the lands of petitioners for use as a housing project.

The Court of Appeals set aside the order of the trial court, allowing the Province of Camarines Sur to takepossession of private respondents' lands and the order denying the admission of the amended motion to dismiss.It also ordered the trial court to suspend the expropriation proceedings until after the Province of Camarines Surshall have submitted the requisite approval of the Department of Agrarian Reform to convert the classificationof the property of the private respondents from agricultural to non-agricultural land.

Hence this petition.

It must be noted that in the Court of Appeals, the San Joaquins asked for: (i) the dismissal of the complaints forexpropriation on the ground of the inadequacy of the compensation offered for the property and (ii) thenullification of Resolution No. 129, Series of 1988 of the Sangguniang Panlalawigan of the Province ofCamarines Sur.

The Court of Appeals did not rule on the validity of the questioned resolution; neither did it dismiss thecomplaints. However, when the Court of Appeals ordered the suspension of the proceedings until the Provinceof Camarines Sur shall have obtained the authority of the Department of Agrarian Reform to change theclassification of the lands sought to be expropriated from agricultural to non-agricultural use, it assumed that theresolution is valid and that the expropriation is for a public purpose or public use.

Modernly, there has been a shift from the literal to a broader interpretation of "public purpose" or "public use"for which the power of eminent domain may be exercised. The old concept was that the condemned property

must actually be used by the general public (e.g. roads, bridges, public plazas, etc.) before the taking thereof couldsatisfy the constitutional requirement of "public use". Under the new concept, "public use" means publicadvantage, convenience or benefit, which tends to contribute to the general welfare and the prosperity of thewhole community, like a resort complex for tourists or housing project (Heirs of Juancho Ardano v. Reyes, 125SCRA 220 [1983]; Sumulong v. Guerrero, 154 SC.RA 461 [1987]).

The expropriation of the property authorized by the questioned resolution is for a public purpose. Theestablishment of a pilot development center would inure to the direct benefit and advantage of the people of theProvince of Camarines Sur. Once operational, the center would make available to the community invaluableinformation and technology on agriculture, fishery and the cottage industry. Ultimately, the livelihood of thefarmers, fishermen and craftsmen would be enhanced. The housing project also satisfies the public purposerequirement of the Constitution. As held in Sumulong v. Guerrero, 154 SCRA 461, "Housing is a basic humanneed. Shortage in housing is a matter of state concern since it directly and significantly affects public health,safety, the environment and in sum the general welfare."

It is the submission of the Province of Camarines Sur that its exercise of the power of eminent domain cannotbe restricted by the provisions of the Comprehensive Agrarian Reform Law (R.A. No. 6657), particularly Section65 thereof, which requires the approval of the Department of Agrarian Reform before a parcel of land can bereclassified from an agricultural to a non-agricultural land.

The Court of Appeals, following the recommendation of the Solicitor General, held that the Province ofCamarines Sur must comply with the provision of Section 65 of the Comprehensive Agrarian Reform Law andmust first secure the approval of the Department of Agrarian Reform of the plan to expropriate the lands of theSan Joaquins.

In Heirs of Juancho Ardana v. Reyes, 125 SCRA 220, petitioners raised the issue of whether the PhilippineTourism Authority can expropriate lands covered by the "Operation Land Transfer" for use of a tourist resortcomplex. There was a finding that of the 282 hectares sought to be expropriated, only an area of 8,970 squaremeters or less than one hectare was affected by the land reform program and covered by emancipation patentsissued by the Ministry of Agrarian Reform. While the Court said that there was "no need under the facts of thispetition to rule on whether the public purpose is superior or inferior to another purpose or engage in a balancingof competing public interest," it upheld the expropriation after noting that petitioners had failed to overcomethe showing that the taking of 8,970 square meters formed part of the resort complex. A fair and reasonablereading of the decision is that this Court viewed the power of expropriation as superior to the power to distributelands under the land reform program.

The Solicitor General denigrated the power to expropriate by the Province of Camarines Sur by stressing the factthat local government units exercise such power only by delegation. (Comment, pp. 14-15; Rollo, pp. 128-129)

It is true that local government units have no inherent power of eminent domain and can exercise it only whenexpressly authorized by the legislature (City of Cincinnati v. Vester, 28l US 439, 74 L.ed. 950, 50 SCt. 360).It is also true that in delegating the power to expropriate, the legislature may retain certain control or imposecertain restraints on the exercise thereof by the local governments (Joslin Mfg. Co. v. Providence, 262 US 66867 L. ed. 1167, 43 S Ct. 684). While such delegated power may be a limited authority, it is complete within itslimits. Moreover, the limitations on the exercise of the delegated power must be clearly expressed, either in thelaw conferring the power or in other legislations.

Resolution No. 129, Series of 1988, was promulgated pursuant to Section 9 of B.P. Blg. 337, the LocalGovernment Code, which provides:

A local government unit may, through its head and acting pursuant to a resolution of its sanggunianexercise the right of eminent domain and institute condemnation proceedings for public use orpurpose.

Section 9 of B.P. Blg. 337 does not intimate in the least that local government, units must first secure theapproval of the Department of Land Reform for the conversion of lands from agricultural to non-agricultural use,before they can institute the necessary expropriation proceedings. Likewise, there is no provision in theComprehensive Agrarian Reform Law which expressly subjects the expropriation of agricultural lands by localgovernment units to the control of the Department of Agrarian Reform. The closest provision of law that theCourt of Appeals could cite to justify the intervention of the Department of Agrarian Reform in expropriationmatters is Section 65 of the Comprehensive Agrarian Reform Law, which reads:

Sec. 65. Conversion of Lands. — After the lapse of five (5) years from its award, when the land ceasesto be economically feasible and sound for, agricultural purposes, or the locality has become urbanizedand the land will have a greater economic value for residential, commercial or industrial purposes,the DAR, upon application of the beneficiary or the landowner, with due notice to the affectedparties, and subject to existing laws, may authorize the reclassification or conversion of the land andits disposition: Provided, That the beneficiary shall have fully paid his obligation.

The opening, adverbial phrase of the provision sends signals that it applies to lands previously placed under theagrarian reform program as it speaks of "the lapse of five (5) years from its award."

The rules on conversion of agricultural lands found in Section 4 (k) and 5 (1) of Executive Order No. 129-A,Series of 1987, cannot be the source of the authority of the Department of Agrarian Reform to determine thesuitability of a parcel of agricultural land for the purpose to which it would be devoted by the expropriatingauthority. While those rules vest on the Department of Agrarian Reform the exclusive authority to approve ordisapprove conversions of agricultural lands for residential, commercial or industrial uses, such authority islimited to the applications for reclassification submitted by the land owners or tenant beneficiaries.

Statutes conferring the power of eminent domain to political subdivisions cannot be broadened or constrictedby implication (Schulman v. People, 10 N.Y. 2d. 249, 176 N.E. 2d. 817, 219 NYS 2d. 241).

To sustain the Court of Appeals would mean that the local government units can no longer expropriateagricultural lands needed for the construction of roads, bridges, schools, hospitals, etc, without first applying forconversion of the use of the lands with the Department of Agrarian Reform, because all of these projects wouldnaturally involve a change in the land use. In effect, it would then be the Department of Agrarian Reform toscrutinize whether the expropriation is for a public purpose or public use.

Ordinarily, it is the legislative branch of the local government unit that shall determine whether the use of theproperty sought to be expropriated shall be public, the same being an expression of legislative policy. The courtsdefer to such legislative determination and will intervene only when a particular undertaking has no real orsubstantial relation to the public use (United States Ex Rel Tennessee Valley Authority v. Welch, 327 US 546,90 L. ed. 843, 66 S Ct 715; State ex rel Twin City Bldg. and Invest. Co. v. Houghton, 144 Minn. 1, 174 NW885, 8 ALR 585).

There is also an ancient rule that restrictive statutes, no matter how broad their terms are, do not embrace thesovereign unless the sovereign is specially mentioned as subject thereto (Alliance of Government Workers v.Minister of Labor and Employment, 124 SCRA 1 [1983]). The Republic of the Philippines, as sovereign, or itspolitical subdivisions, as holders of delegated sovereign powers, cannot be bound by provisions of law couchedin general term.

The fears of private respondents that they will be paid on the basis of the valuation declared in the taxdeclarations of their property, are unfounded. This Court has declared as unconstitutional the PresidentialDecrees fixing the just compensation in expropriation cases to be the value given to the condemned propertyeither by the owners or the assessor, whichever was lower ([Export Processing Zone Authority v. Dulay, 149SCRA 305 [1987]). As held in Municipality of Talisay v. Ramirez, 183 SCRA 528 [1990], the rules fordetermining just compensation are those laid down in Rule 67 of the Rules of Court, which allow private

respondents to submit evidence on what they consider shall be the just compensation for their property.

WHEREFORE, the petition is GRANTED and the questioned decision of the Court of Appeals is set asideinsofar as it (a) nullifies the trial court's order allowing the Province of Camarines Sur to take possession ofprivate respondents' property; (b) orders the trial court to suspend the expropriation proceedings; and (c) requiresthe Province of Camarines Sur to obtain the approval of the Department of Agrarian Reform to convert orreclassify private respondents' property from agricultural to non-agricultural use.

The decision of the Court of Appeals is AFFIRMED insofar as it sets aside the order of the trial court, denyingthe amended motion to dismiss of the private respondents.

SO ORDERED.

Cruz, Griño-Aquino and Bellosillo, JJ., concur.

Republic of the PhilippinesSUPREME COURT

Manila

1. EN BANC

G.R. No. L-48685 September 30, 1987

LORENZO SUMULONG and EMILIA VIDANES-BALAOING, petitioners, vs.HON. BUENAVENTURA GUERRERO and NATIONAL HOUSING AUTHORITY, respondents.

CORTES, J.:

On December 5, 1977 the National Housing Authority (NIIA) filed a complaint for expropriation of parcels ofland covering approximately twenty five (25) hectares, (in Antipolo, Rizal) including the lots of petitionersLorenzo Sumulong and Emilia Vidanes-Balaoing with an area of 6,667 square meters and 3,333 square metersrespectively. The land sought to be expropriated were valued by the NHA at one peso (P1.00) per square meteradopting the market value fixed by the provincial assessor in accordance with presidential decrees prescribing thevaluation of property in expropriation proceedings.

Together with the complaint was a motion for immediate possession of the properties. The NHA deposited theamount of P158,980.00 with the Philippine National Bank, representing the "total market value" of the subjecttwenty five hectares of land, pursuant to Presidential Decree No. 1224 which defines "the policy on theexpropriation of private property for socialized housing upon payment of just compensation."

On January 17, 1978, respondent Judge issued the following Order:

Plaintiff having deposited with the Philippine National Bank, Heart Center Extension Office,Diliman, Quezon City, Metro Manila, the amount of P158,980.00 representing the total marketvalue of the subject parcels of land, let a writ of possession be issued.

SO ORDERED.

Pasig, Metro Manila, January 17, 1978.

(SGD) BUENAVENTURA S. GUERRERO

Judge

Petitioners filed a motion for reconsideration on the ground that they had been deprived of the possession oftheir property without due process of law. This was however, denied.

Hence, this petition challenging the orders of respondent Judge and assailing the constitutionality of Pres. DecreeNo. 1224, as amended. Petitioners argue that:

1) Respondent Judge acted without or in excess of his jurisdiction or with grave abuse of discretionby issuing the Order of January 17, 1978 without notice and without hearing and in issuing theOrder dated June 28, 1978 denying the motion for reconsideration.

2) Pres. Decree l224, as amended, is unconstitutional for being violative of the due process clause,specifically:

a) The Decree would allow the taking of property regardless of size and no matter howsmall the area to be expropriated;

b) "Socialized housing" for the purpose of condemnation proceeding, as defined in saidDecree, is not really for a public purpose;

c) The Decree violates procedural due process as it allows immediate taking of possession,control and disposition of property without giving the owner his day in court;

d) The Decree would allow the taking of private property upon payment of unjust andunfair valuations arbitrarily fixed by government assessors;

e) The Decree would deprive the courts of their judicial discretion to determine whatwould be the "just compensation" in each and every raise of expropriation.

Indeed, the exercise of the power of eminent domain is subject to certain limitations imposed by the constitution,to wit:

Private property shall not be taken for public use without just compensation (Art. IV, Sec. 9);

No person shall be deprived of life, liberty, or property without due process of law, nor shall anyperson be denied the equal protection of the laws (Art. IV, sec. 1).

Nevertheless, a clear case of constitutional infirmity has to be established for this Court to nullify legislative orexecutive measures adopted to implement specific constitutional provisions aimed at promoting the generalwelfare.

Petitioners' objections to the taking of their property subsumed under the headings of public use, justcompensation, and due process have to be balanced against competing interests of the public recognized andsought to be served under declared policies of the constitution as implemented by legislation.

1. Public use

a) Socialized Housing

Petitioners contend that "socialized housing" as defined in Pres. Decree No. 1224, as amended, for the purposeof condemnation proceedings is not "public use" since it will benefit only "a handful of people, bereft of publiccharacter."

"Socialized housing" is defined as, "the construction of dwelling units for the middle and lower class membersof our society, including the construction of the supporting infrastructure and other facilities" (Pres. Decree No.1224, par. 1). This definition was later expanded to include among others:

a) The construction and/or improvement of dwelling units for the middle and lower income groupsof the society, including the construction of the supporting infrastructure and other facilities;

b) Slum clearance, relocation and resettlement of squatters and slum dwellers as well as the provisionof related facilities and services;

c) Slum improvement which consists basically of allocating homelots to the dwellers in the area orproperty involved, rearrangemeant and re-alignment of existing houses and other dwelling structuresand the construction and provision of basic community facilities and services, where there are none,such as roads, footpaths, drainage, sewerage, water and power system schools, barangay centers,

community centers, clinics, open spaces, parks, playgrounds and other recreational facilities;

d) The provision of economic opportunities, including the development of commercial and industrialestates and such other facilities to enhance the total community growth; and

e) Such other activities undertaken in pursuance of the objective to provide and maintain housingfor the greatest number of people under Presidential Decree No, 757, (Pres. Decree No. 1259, sec.1)

The "public use" requirement for a and exercise of the power of eminent domain is a flexible and evolvingconcept influenced by changing conditions. In this jurisdiction, the statutory and judicial trend has beensummarized as follows:

The taking to be valid must be for public use. There was a time when it was felt that a literal meaningshould be attached to such a requirement. Whatever project is undertaken must be for the public toenjoy, as in the case of streets or parks. Otherwise, expropriation is not allowable. It is not anymore.As long as the purpose of the taking is public, then the power of eminent domain comes into play.As just noted, the constitution in at least two cases, to remove any doubt, determines what is publicuse. One is the expropriation of lands to be subdivided into small lots for resale at cost to individuals.The other is in the transfer, through the exercise of this power, of utilities and other private enterpriseto the government. It is accurate to state then that at present whatever may be beneficially employed forthe general welfare satisfies the requirement of public use [Heirs of Juancho Ardona v. Reyes, G.R. Nos.60549, 60553-60555 October 26, 1983, 125 SCRA 220 (1983) at 234-5 quoting E. FERNANDO,THE CONSTITUTION OF THE PHILIPPINES 523-4, (2nd ed., 1977) Emphasis supplied].

The term "public use" has acquired a more comprehensive coverage. To the literal import of the term signifyingstrict use or employment by the public has been added the broader notion of indirect public benefit or advantage.As discussed in the above cited case of Heirs of Juancho Ardona:

The restrictive view of public use may be appropriate for a nation which circumscribes the scope ofgovernment activities and public concerns and which possesses big and correctly located public landsthat obviate the need to take private property for public purposes. Neither circumstance applies tothe Philippines. We have never been a laissez faire State. And the necessities which impel the exertionof sovereign power are all too often found in areas of scarce public land or limited governmentresources. (p. 231)

Specifically, urban renewal or redevelopment and the construction of low-cost housing is recognized as a publicpurpose, not only because of the expanded concept of public use but also because of specific provisions in theConstitution. The 1973 Constitution made it incumbent upon the State to establish, maintain and ensureadequate social services including housing [Art. 11, sec. 7]. The 1987 Constitution goes even further byproviding that:

The State shall promote a just and dynamic social order that will ensure the prosperity andindependence of the nation and free the people from poverty through policies that provide adequatesocial services, promote full employment, a rising standard of living and an improved quality of lifefor all. [Art. II, sec. 9]

The state shall by law, and for the common good, undertake, in cooperation with the private sector, acontinuing program of urban land reform and housing which will make available at affordable cost decenthousing and basic services to underprivileged and homeless citizens in urban centers and resettlement areas.It shall also promote adequate employment opportunities to such citizens. In the implementationof such program the State shall respect the rights of small property owners. (Art. XIII, sec. 9,Emphaisis supplied)

Housing is a basic human need. Shortage in housing is a matter of state concern since it directly and significantlyaffects public health, safety, the environment and in sum, the general welfare. The public character of housingmeasures does not change because units in housing projects cannot be occupied by all but only by those whosatisfy prescribed qualifications. A beginning has to be made, for it is not possible to provide housing for are whoneed it, all at once.

Population growth, the migration to urban areas and the mushrooming of crowded makeshift dwellings is aworldwide development particularly in developing countries. So basic and urgent are housing problems that theUnited Nations General Assembly proclaimed 1987 as the "International Year of Shelter for the Homeless" "tofocus the attention of the international community on those problems". The General Assembly is Seriouslyconcerned that, despite the efforts of Governments at the national and local levels and of internationalorganizations, the driving conditions of the majority of the people in slums and squatter areas and ruralsettlements, especially in developing countries, continue to deteriorate in both relative and absolute terms." [G.A.Res. 37/221, Yearbook of the United Nations 1982, Vol. 36, p. 1043-4]

In the light of the foregoing, this Court is satisfied that "socialized housing" fans within the confines of "publicuse". It is, particularly important to draw attention to paragraph (d) of Pres. Dec. No. 1224 which opportunitiesinextricably linked with low-cost housing, or slum clearance, relocation and resettlement, or slum improvementemphasize the public purpose of the project.

In the case at bar, the use to which it is proposed to put the subject parcels of land meets the requisites of "publicuse". The lands in question are being expropriated by the NHA for the expansion of Bagong Nayon HousingProject to provide housing facilities to low-salaried government employees. Quoting respondents:

1. The Bagong Nayong Project is a housing and community development undertaking of the NationalHousing Authority. Phase I covers about 60 hectares of GSIS property in Antipolo, Rizal; Phase IIincludes about 30 hectares for industrial development and the rest are for residential housingdevelopment.

It is intended for low-salaried government employees and aims to provide housing and communityservices for about 2,000 families in Phase I and about 4,000 families in Phase II.

It is situated on rugged terrain 7.5 kms. from Marikina Town proper; 22 Kms. east of Manila; andis within the Lungs Silangan Townsite Reservation (created by Presidential Proclamation No. 1637on April 18, 1977).

The lands involved in the present petitions are parts of the expanded/additional areas for the BagongNayon Project totalling 25.9725 hectares. They likewise include raw, rolling hills. (Rollo, pp. 266-7)

The acute shortage of housing units in the country is of public knowledge. Official data indicate that more thanone third of the households nationwide do not own their dwelling places. A significant number live in dwellingsof unacceptable standards, such as shanties, natural shelters, and structures intended for commercial, industrial,or agricultural purposes. Of these unacceptable dwelling units, more than one third is located within the NationalCapital Region (NCR) alone which lies proximate to and is expected to be the most benefited by the housingproject involved in the case at bar [See, National Census and Statistics Office, 1980 Census of Population andHousing].

According to the National Economic and Development Authority at the time of the expropriation in question,about "50 per cent of urban families, cannot afford adequate shelter even at reduced rates and will needgovernment support to provide them with social housing, subsidized either partially or totally" [NEDA, FOURYEAR DEVELOPMENT PLAN For 1974-1977, p. 357]. Up to the present, housing some remains to be outof the reach of a sizable proportion of the population" [NEDA, MEDIUM-TERM PHILIPPINEDEVELOPMENT PLAN 1987-1992, p. 240].

The mushrooming of squatter colonies in the Metropolitan Manila area as well as in other cities and centers ofpopulation throughout the country, and, the efforts of the government to initiate housing and other projects arematters of public knowledge [See NEDA, FOUR YEAR DEVELOPMENT PLAN For 1974-1977, pp. 357-361;NEDA, FIVE-YEAR PHILIPPINE DEVELOPMENT PLAN 1978-1982, pp. 215-228 NEDA, FIVE YEARPHILIPPINE DEVELOPMENT PLAN 1983-1987, pp. 109-117; NEDA, MEDIUM TERM PHILIPPINEDEVELOPMENT PLAN 1987-1992, pp. 240-254].

b) Size of Property

Petitioners further contend that Pres. Decree 1224, as amended, would allow the taking of "any private land"regardless of the size and no matter how small the area of the land to be expropriated. Petitioners claim that"there are vast areas of lands in Mayamot, Cupang, and San Isidro, Antipolo, Rizal hundred of hectares of whichare owned by a few landowners only. It is surprising [therefore] why respondent National Housing Authority[would] include [their] two man lots ..."

In J.M. Tuason Co., Inc. vs. Land Tenure Administration [G. R. No. L-21064, February 18, 1970, 31 SCRA 413(1970) at 428] this Court earlier ruled that expropriation is not confined to landed estates. This Court, quotingthe dissenting opinion of Justice J.B.L. Reyes in Republic vs. Baylosis, [96 Phil. 461 (1955)], held that:

The propriety of exercising the power of eminent domain under Article XIII, section 4 of ourConstitution cannot be determined on a purely quantitative or area basis. Not only does theconstitutional provision speak of lands instead of landed estates, but I see no cogent reason why thegovernment, in its quest for social justice and peace, should exclusively devote attention to conflictsof large proportions, involving a considerable number of individuals, and eschew small controversiesand wait until they grow into a major problem before taking remedial action.

The said case of J.M. Tuason Co., Inc. departed from the ruling in Guido vs. Rural Progress Administration [84Phil. 847 (1949)] which held that the test to be applied for a valid expropriation of private lands was the areaof the land and not the number of people who stood to be benefited. Since then "there has evolved a clear patternof adherence to the "number of people to be benefited test" " [Mataas na Lupa Tenants Association, Inc. v.Dimayuga, G.R. No. 32049, June 25,1984, 130 SCRA 30 (1984) at 39]. Thus, in Pulido vs. Court of Appeals[G.R. No. 57625, May 3, 1983, 122 SCRA 63 (1983) at 73], this Court stated that, "[i]t is unfortunate that thepetitioner would be deprived of his landholdings, but his interest and that of his family should not stand in theway of progress and the benefit of the greater may only of the inhabitants of the country."

The State acting through the NHA is vested with broad discretion to designate the particular property/propertiesto be taken for socialized housing purposes and how much thereof may be expropriated. Absent a clear showingof fraud, bad faith, or gross abuse of discretion, which petitioners herein failed to demonstrate, the Court willgive due weight to and leave undisturbed the NHA's choice and the size of the site for the project. The propertyowner may not interpose objections merely because in their judgment some other property would have beenmore suitable, or just as suitable, for the purpose. The right to the use, enjoyment and disposal of privateproperty is tempered by and has to yield to the demands of the common good. The Constitutional provisionson the subject are clear:

The State shall promote social justice in all phases of national development. (Art. II, sec. 10)

The Congress shall give highest priority to the enactment of measures that protect and enhance theright of all the people to human dignity, reduce social, economic, and political inequalities, andremove cultural inequities by equitably diffusing wealth and political power for the common good.To this end, the State shall regulate the acquisition, ownership, use and disposition of property andits increments. (Art, XIII, sec. 1)

Indeed, the foregoing provisions, which are restatements of the provisions in the 1935 and 1973 Constitutions,

emphasize:

...the stewardship concept, under which private property is supposed to be held by the individualonly as a trustee for the people in general, who are its real owners. As a mere steward, the individualmust exercise his rights to the property not for his own exclusive and selfish benefit but for the goodof the entire community or nation [Mataas na Lupa Tenants Association, Inc. supra at 42-3 citingI. CRUZ, PHILIPPINE POLITICAL LAW, 70 (1983 ed.)].

2. Just Compensation

Petitioners maintain that Pres. Decree No. 1224, as amended, would allow the taking of private property uponpayment of unjust and unfair valuations arbitrarily fixed by government assessors. In addition, they assert thatthe Decree would deprive the courts of their judicial discretion to determine what would be "just compensation".

The foregoing contentions have already been ruled upon by this Court in the case of Ignacio vs. Guerrero (G.R.No. L-49088, May 29, 1987) which, incidentally, arose from the same expropriation complaint that led to thisinstant petition. The provisions on just compensation found in Presidential Decree Nos. 1224, 1259 and 1313are the same provisions found in Presidential Decree Nos. 76, 464, 794 and 1533 which were declaredunconstitutional in Export Processing Zone All thirty vs. Dulay (G.R. No. 5960 April 29, 1987) for beingencroachments on prerogatives.

This Court abandoned the ruling in National Housing Authority vs. Reyes [G.R. No. 49439, June 29,1983, 123SCRA 245 (1983)] which upheld Pres. Decree No. 464, as amended by - Presidential Decree Nos. 794, 1224and 1259.

In said case of Export Processing Zone Authority, this Court pointed out that:

The basic unfairness of the decrees is readily apparent.

Just compensation means the value of the property at the time of the taking. It means a fair and fullequivalent for the loss sustained. ALL the facts as to the condition of the property and itssurroundings, its improvements and capabilities, should be considered.

xxx xxx xxx

Various factors can come into play in the valuation of specific properties singled out forexpropriation. The values given by provincial assessors are usually uniform for very wide areascovering several barrios or even an entire total with the exception of the poblacion. Individualdifferences are never taken into account. The value of land is based on such generalities as its possiblecultivation for rice, corn, coconuts, or other crops. Very often land described as directional has beencultivated for generations. Buildings are described in terms of only two or three classes of buildingmaterials and estimates of areas are more often inaccurate than correct. Tax values can serve as guidesbut cannot be absolute substitutes for just compensation.

To say that the owners are estopped to question the valuations made by assessors since they had theopportunity to protest is illusory. The overwhelming mass of landowners accept unquestioninglywhat is found in the tax declarations prepared by local assessors or municipal clerks for them. Theydo not even look at, much less analyze, the statements. The Idea of expropriation simply never occursuntil a demand is made or a case filed by an agency authorized to do so. (pp. 12-3)

3. Due Process

Petitioners assert that Pres. Decree 1224, as amended, violates procedural due process as it allows immediatetaking of possession, control and disposition of property without giving the owner his day in court. RespondentJudge ordered the issuance of a writ of possession without notice and without hearing.

The constitutionality of this procedure has also been ruled upon in the Export Processing Zone Authority case, viz:

It is violative of due process to deny to the owner the opportunity to prove that the valuation in thetax documents is unfair or wrong. And it is repulsive to basic concepts of justice and fairness to allowthe haphazard work of minor bureaucrat or clerk to absolutely prevail over the judgment of a courtpromulgated only after expert commissioners have actually viewed the property, after evidence andarguments pro and con have been presented, and after all factors and considerations essential to a fairand just determination have been judiciously evaluated. (p. 13)

On the matter of the issuance of a writ of possession, the ruling in the Ignacio case is reiterated, thus:

[I]t is imperative that before a writ of possession is issued by the Court in expropriation proceedings,the following requisites must be met: (1) There must be a Complaint for expropriation sufficient inform and in substance; (2) A provisional determination of just compensation for the propertiessought to be expropriated must be made by the trial court on the basis of judicial (not legislative orexecutive) discretion; and (3) The deposit requirement under Section 2, Rule 67 must be compliedwith. (p. 14)

This Court holds that "socialized housing" defined in Pres. Decree No. 1224, as amended by Pres. Decree Nos.1259 and 1313, constitutes "public use" for purposes of expropriation. However, as previously held by thisCourt, the provisions of such decrees on just compensation are unconstitutional; and in the instant case theCourt finds that the Orders issued pursuant to the corollary provisions of those decrees authorizing immediatetaking without notice and hearing are violative of due process.

WHEREFORE, the Orders of the lower court dated January 17, 1978 and June 28, 1978 issuing the writ ofpossession on the basis of the market value appearing therein are annulled for having been issued in excess ofjurisdiction. Let this case be remanded to the court of origin for further proceedings to determine thecompensation the petitioners are entitled to be paid. No costs.

SO ORDERED.

Teehankee, C.J., Yap, Fernan, Narvasa, Melencio-Herrera, Gutierrez, Jr., Cruz, Paras, Feliciano, Gancayco, Padilla,Bidin and Sarmiento, JJ., concur.

Republic of the PhilippinesSUPREME COURT

Manila

1. EN BANC

G.R. No. L-28089 October 25, 1967

BARA LIDASAN, petitioner, vs.COMMISSION ON ELECTIONS, respondent.

Suntay for petitioner. Barrios and Fule for respondent.

SANCHEZ, J.:

The question initially presented to the Commission on Elections,1 is this: Is Republic Act 4790, which is entitled"An Act Creating the Municipality of Dianaton in the Province of Lanao del Sur", but which includes barrioslocated in another province — Cotabato — to be spared from attack planted upon the constitutional mandatethat "No bill which may be enacted into law shall embrace more than one subject which shall be expressed inthe title of the bill"? Comelec's answer is in the affirmative. Offshoot is the present original petition for certiorariand prohibition.

On June 18, 1966, the Chief Executive signed into law House Bill 1247, known as Republic Act 4790, now indispute. The body of the statute, reproduced in haec verba, reads:

Sec. 1. Barrios Togaig, Madalum, Bayanga, Langkong, Sarakan, Kat-bo, Digakapan, Magabo, Tabangao,Tiongko, Colodan, Kabamakawan, Kapatagan, Bongabong, Aipang, Dagowan, Bakikis, Bungabung,Losain, Matimos and Magolatung, in the Municipalities of Butig and Balabagan, Province of Lanao delSur, are separated from said municipalities and constituted into a distinct and independent municipalityof the same province to be known as the Municipality of Dianaton, Province of Lanao del Sur. The seatof government of the municipality shall be in Togaig.

Sec. 2. The first mayor, vice-mayor and councilors of the new municipality shall be elected in the nineteenhundred sixty-seven general elections for local officials.

Sec. 3. This Act shall take effect upon its approval.

It came to light later that barrios Togaig and Madalum just mentioned are within the municipality of Buldon,Province of Cotabato, and that Bayanga, Langkong, Sarakan, Kat-bo, Digakapan, Magabo, Tabangao, Tiongko,Colodan and Kabamakawan are parts and parcel of another municipality, the municipality of Parang, also in theProvince of Cotabato and not of Lanao del Sur.

Prompted by the coming elections, Comelec adopted its resolution of August 15, 1967, the pertinent portionsof which are:

For purposes of establishment of precincts, registration of voters and for other election purposes, theCommission RESOLVED that pursuant to RA 4790, the new municipality of Dianaton, Lanao del Surshall comprise the barrios of Kapatagan, Bongabong, Aipang, Dagowan, Bakikis, Bungabung, Losain,Matimos, and Magolatung situated in the municipality of Balabagan, Lanao del Sur, the barrios of Togaigand Madalum situated in the municipality of Buldon, Cotabato, the barrios of Bayanga, Langkong,Sarakan, Kat-bo, Digakapan, Magabo, Tabangao, Tiongko, Colodan and Kabamakawan situated in the

municipality of Parang, also of Cotabato.

Doubtless, as the statute stands, twelve barrios — in two municipalities in the province of Cotabato — aretransferred to the province of Lanao del Sur. This brought about a change in the boundaries of the two provinces.

Apprised of this development, on September 7, 1967, the Office of the President, through the AssistantExecutive Secretary, recommended to Comelec that the operation of the statute be suspended until "clarified bycorrecting legislation."

Comelec, by resolution of September 20, 1967, stood by its own interpretation, declared that the statute "shouldbe implemented unless declared unconstitutional by the Supreme Court."

This triggered the present original action for certiorari and prohibition by Bara Lidasan, a resident and taxpayerof the detached portion of Parang, Cotabato, and a qualified voter for the 1967 elections. He prays that RepublicAct 4790 be declared unconstitutional; and that Comelec's resolutions of August 15, 1967 and September 20,1967 implementing the same for electoral purposes, be nullified.

1. Petitioner relies upon the constitutional requirement aforestated, that "[n]o bill which may be enacted intolaw shall embrace more than one subject which shall be expressed in the title of the bill."2

It may be well to state, right at the outset, that the constitutional provision contains dual limitations uponlegislative power. First. Congress is to refrain from conglomeration, under one statute, of heterogeneous subjects.Second. The title of the bill is to be couched in a language sufficient to notify the legislators and the public andthose concerned of the import of the single subject thereof.

Of relevance here is the second directive. The subject of the statute must be "expressed in the title" of the bill.This constitutional requirement "breathes the spirit of command."3 Compliance is imperative, given the fact thatthe Constitution does not exact of Congress the obligation to read during its deliberations the entire text of thebill. In fact, in the case of House Bill 1247, which became Republic Act 4790, only its title was read from itsintroduction to its final approval in the House of Representatives4 where the bill, being of local application,originated.5

Of course, the Constitution does not require Congress to employ in the title of an enactment, language of suchprecision as to mirror, fully index or catalogue all the contents and the minute details therein. It suffices if thetitle should serve the purpose of the constitutional demand that it inform the legislators, the persons interestedin the subject of the bill, and the public, of the nature, scope and consequences of the proposed law and itsoperation. And this, to lead them to inquire into the body of the bill, study and discuss the same, takeappropriate action thereon, and, thus, prevent surprise or fraud upon the legislators.6

In our task of ascertaining whether or not the title of a statute conforms with the constitutional requirement, thefollowing, we believe, may be taken as guidelines:

The test of the sufficiency of a title is whether or not it is misleading; and, which technical accuracy is notessential, and the subject need not be stated in express terms where it is clearly inferable from the detailsset forth, a title which is so uncertain that the average person reading it would not be informed of the purposeof the enactment or put on inquiry as to its contents, or which is misleading, either in referring to or indicatingone subject where another or different one is really embraced in the act, or in omitting any expression orindication of the real subject or scope of the act, is bad.

xxx xxx xxx

In determining sufficiency of particular title its substance rather than its form should be considered, and thepurpose of the constitutional requirement, of giving notice to all persons interested, should be kept in mind by the

court.7

With the foregoing principles at hand, we take a hard look at the disputed statute. The title — "An Act Creatingthe Municipality of Dianaton, in the Province of Lanao del Sur"8 — projects the impression that solely theprovince of Lanao del Sur is affected by the creation of Dianaton. Not the slightest intimation is there thatcommunities in the adjacent province of Cotabato are incorporated in this new Lanao del Sur town. The phrase"in the Province of Lanao del Sur," read without subtlety or contortion, makes the title misleading, deceptive.For, the known fact is that the legislation has a two-pronged purpose combined in one statute: (1) it creates themunicipality of Dianaton purportedly from twenty-one barrios in the towns of Butig and Balabagan, both in theprovince of Lanao del Sur; and (2) it also dismembers two municipalities in Cotabato, a province different fromLanao del Sur.

The baneful effect of the defective title here presented is not so difficult to perceive. Such title did not informthe members of Congress as to the full impact of the law; it did not apprise the people in the towns of Buldonand Parang in Cotabato and in the province of Cotabato itself that part of their territory is being taken away fromtheir towns and province and added to the adjacent Province of Lanao del Sur; it kept the public in the dark asto what towns and provinces were actually affected by the bill. These are the pressures which heavily weighagainst the constitutionality of Republic Act 4790.

Respondent's stance is that the change in boundaries of the two provinces resulting in "the substantialdiminution of territorial limits" of Cotabato province is "merely the incidental legal results of the definition ofthe boundary" of the municipality of Dianaton and that, therefore, reference to the fact that portions in Cotabatoare taken away "need not be expressed in the title of the law." This posture — we must say — but emphasizesthe error of constitutional dimensions in writing down the title of the bill. Transfer of a sizeable portion ofterritory from one province to another of necessity involves reduction of area, population and income of the firstand the corresponding increase of those of the other. This is as important as the creation of a municipality. Andyet, the title did not reflect this fact.

Respondent asks us to read Felwa vs. Salas, L-16511, October 29, 1966, as controlling here. The Felwa case isnot in focus. For there, the title of the Act (Republic Act 4695) reads: "An Act Creating the Provinces ofBenguet, Mountain Province, Ifugao, and Kalinga-Apayao." That title was assailed as unconstitutional upon theaverment that the provisions of the law (Section, 8 thereof) in reference to the elective officials of the provincesthus created, were not set forth in the title of the bill. We there ruled that this pretense is devoid of merit "for,surely, an Act creating said provinces must be expected to provide for the officers who shall run the affairsthereof" — which is "manifestly germane to the subject" of the legislation, as set forth in its title. The statutenow before us stands altogether on a different footing. The lumping together of barrios in adjacent but separateprovinces under one statute is neither a natural nor logical consequence of the creation of the new municipalityof Dianaton. A change of boundaries of the two provinces may be made without necessarily creating a newmunicipality and vice versa.

As we canvass the authorities on this point, our attention is drawn to Hume vs. Village of Fruitport, 219 NW 648,649. There, the statute in controversy bears the title "An Act to Incorporate the Village of Fruitport, in theCounty of Muskegon." The statute, however, in its section 1 reads: "The people of the state of Michigan enact,that the following described territory in the counties of Muskegon and Ottawa Michigan, to wit: . . . be, and thesame is hereby constituted a village corporate, by the name of the Village of Fruitport." This statute waschallenged as void by plaintiff, a resident of Ottawa county, in an action to restraint the Village from exercisingjurisdiction and control, including taxing his lands. Plaintiff based his claim on Section 20, Article IV of theMichigan State Constitution, which reads: "No law shall embrace more than one object, which shall be expressedin its title." The Circuit Court decree voided the statute and defendant appealed. The Supreme Court ofMichigan voted to uphold the decree of nullity. The following, said in Hume, may well apply to this case:

It may be that words, "An act to incorporate the village of Fruitport," would have been a sufficient title,and that the words, "in the county of Muskegon" were unnecessary; but we do not agree with appellant

that the words last quoted may, for that reason, be disregarded as surplusage.

. . . Under the guise of discarding surplusage, a court cannot reject a part of the title of an act for thepurpose of saving the act. Schmalz vs. Woody, 56 N.J. Eq. 649, 39 A. 539.

A purpose of the provision of the Constitution is to "challenge the attention of those affected by the act to itsprovisions." Savings Bank vs. State of Michigan, 228 Mich. 316, 200 NW 262.

The title here is restrictive. It restricts the operation of the act of Muskegon county. The act goes beyond therestriction. As was said in Schmalz vs. Wooly, supra: "The title is erroneous in the worst degree, for it ismisleading."9

Similar statutes aimed at changing boundaries of political subdivisions, which legislative purpose is not expressedin the title, were likewise declared unconstitutional."10

We rule that Republic Act 4790 is null and void.

2. Suggestion was made that Republic Act 4790 may still be salvaged with reference to the nine barrios in themunicipalities of Butig and Balabagan in Lanao del Sur, with the mere nullification of the portion thereof whichtook away the twelve barrios in the municipalities of Buldon and Parang in the other province of Cotabato. Thereasoning advocated is that the limited title of the Act still covers those barrios actually in the province of Lanaodel Sur.

We are not unmindful of the rule, buttressed on reason and of long standing, that where a portion of a statuteis rendered unconstitutional and the remainder valid, the parts will be separated, and the constitutional portionupheld. Black, however, gives the exception to this rule, thus:

. . . But when the parts of the statute are so mutually dependent and connected, as conditions,considerations, inducements, or compensations for each other, as to warrant a belief that the legislatureintended them as a whole, and that if all could not be carried into effect, the legislature would not pass theresidue independently, then, if some parts are unconstitutional, all the provisions which are thusdependent, conditional, or connected, must fall with them,11

In substantially similar language, the same exception is recognized in the jurisprudence of this Court, thus:

The general rule is that where part of a statute is void, as repugnant to the Organic Law, while another partis valid, the valid portion if separable from the invalid, may stand and be enforced. But in order to do this,the valid portion must be so far independent of the invalid portion that it is fair to presume that theLegislature would have enacted it by itself if they had supposed that they could not constitutionally enact the other.. . Enough must remain to make a complete, intelligible, and valid statute, which carries out the legislativeintent. . . . The language used in the invalid part of the statute can have no legal force or efficacy for anypurpose whatever, and what remains must express the legislative will independently of the void part, since thecourt has no power to legislate, . . . .12

Could we indulge in the assumption that Congress still intended, by the Act, to create the restricted area of ninebarrios in the towns of Butig and Balabagan in Lanao del Sur into the town of Dianaton, if the twelve barrios inthe towns of Buldon and Parang, Cotabato were to be excluded therefrom? The answer must be in the negative.

Municipal corporations perform twin functions. Firstly. They serve as an instrumentality of the State in carryingout the functions of government. Secondly. They act as an agency of the community in the administration of localaffairs. It is in the latter character that they are a separate entity acting for their own purposes and not asubdivision of the State.13

Consequently, several factors come to the fore in the consideration of whether a group of barrios is capable ofmaintaining itself as an independent municipality. Amongst these are population, territory, and income. It wasapparently these same factors which induced the writing out of House Bill 1247 creating the town of Dianaton.Speaking of the original twenty-one barrios which comprise the new municipality, the explanatory note to HouseBill 1247, now Republic Act 4790, reads:

The territory is now a progressive community; the aggregate population is large; and the collective incomeis sufficient to maintain an independent municipality.

This bill, if enacted into law, will enable the inhabitants concerned to govern themselves and enjoy theblessings of municipal autonomy.

When the foregoing bill was presented in Congress, unquestionably, the totality of the twenty-one barrios —not nine barrios — was in the mind of the proponent thereof. That this is so, is plainly evident by the fact thatthe bill itself, thereafter enacted into law, states that the seat of the government is in Togaig, which is a barrioin the municipality of Buldon in Cotabato. And then the reduced area poses a number of questions, thus: Couldthe observations as to progressive community, large aggregate population, collective income sufficient to maintainan independent municipality, still apply to a motley group of only nine barrios out of the twenty-one? Is it fairto assume that the inhabitants of the said remaining barrios would have agreed that they be formed into amunicipality, what with the consequent duties and liabilities of an independent municipal corporation? Couldthey stand on their own feet with the income to be derived in their community? How about the peace and order,sanitation, and other corporate obligations? This Court may not supply the answer to any of these disturbingquestions. And yet, to remain deaf to these problems, or to answer them in the negative and still cling to the ruleon separability, we are afraid, is to impute to Congress an undeclared will. With the known premise thatDianaton was created upon the basic considerations of progressive community, large aggregate population andsufficient income, we may not now say that Congress intended to create Dianaton with only nine — of theoriginal twenty-one — barrios, with a seat of government still left to be conjectured. For, this unduly stretchesjudicial interpretation of congressional intent beyond credibility point. To do so, indeed, is to pass the line whichcircumscribes the judiciary and tread on legislative premises. Paying due respect to the traditional separation ofpowers, we may not now melt and recast Republic Act 4790 to read a Dianaton town of nine instead of theoriginally intended twenty-one barrios. Really, if these nine barrios are to constitute a town at all, it is thefunction of Congress, not of this Court, to spell out that congressional will.

Republic Act 4790 is thus indivisible, and it is accordingly null and void in its totality.14

3. There remains for consideration the issue raised by respondent, namely, that petitioner has no substantial legalinterest adversely affected by the implementation of Republic Act 4790. Stated differently, respondent's pose isthat petitioner is not the real party in interest.

Here the validity of a statute is challenged on the ground that it violates the constitutional requirement that thesubject of the bill be expressed in its title. Capacity to sue, therefore, hinges on whether petitioner's substantialrights or interests are impaired by lack of notification in the title that the barrio in Parang, Cotabato, where heis residing has been transferred to a different provincial hegemony.

The right of every citizen, taxpayer and voter of a community affected by legislation creating a town to ascertainthat the law so created is not dismembering his place of residence "in accordance with the Constitution" isrecognized in this jurisdiction.15

Petitioner is a qualified voter. He expects to vote in the 1967 elections. His right to vote in his own barrio beforeit was annexed to a new town is affected. He may not want, as is the case here, to vote in a town different fromhis actual residence. He may not desire to be considered a part of hitherto different communities which arefanned into the new town; he may prefer to remain in the place where he is and as it was constituted, andcontinue to enjoy the rights and benefits he acquired therein. He may not even know the candidates of the new

town; he may express a lack of desire to vote for anyone of them; he may feel that his vote should be cast for theofficials in the town before dismemberment. Since by constitutional direction the purpose of a bill must beshown in its title for the benefit, amongst others, of the community affected thereby,16 it stands to reason to saythat when the constitutional right to vote on the part of any citizen of that community is affected, he maybecome a suitor to challenge the constitutionality of the Act as passed by Congress.

For the reasons given, we vote to declare Republic Act 4790 null and void, and to prohibit respondentCommission from implementing the same for electoral purposes.

No costs allowed. So ordered.

Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal, Bengzon, J.P., Zaldivar, Castro and Angeles, JJ., concur.

Separate Opinions

FERNANDO, J., dissenting:

With regret and with due recognition of the merit of the opinion of the Court, I find myself unable to give myassent. Hence these few words to express my stand.

Republic Act No. 4790 deals with one subject matter, the creation of the municipality of Dianaton in theprovince of Lanao del Sur. The title makes evident what is the subject matter of such an enactment. The merefact that in the body of such statute barrios found in two other municipalities of another province were includeddoes not of itself suffice for a finding of nullity by virtue of the constitutional provision invoked. At the most,the statute to be free from the insubstantial doubts about its validity must be construed as not including thebarrios, located not in the municipalities of Butig and Balabagan, Lanao del Sur, but in Parang and Baldon,Cotabato.

The constitutional requirement is that no bill which may be enacted into law shall embrace more than onesubject which shall be expressed in the title of the bill.1 This provision is similar to those found in theConstitution of many American States. It is aimed against the evils, of the so-called omnibus bills, and log-rollinglegislation, and against surreptitious or unconsidered enactments.2 Where the subject of a bill is limited to aparticular matter, the members of the legislature as well as the people should be informed of the subject ofproposed legislative measures. This constitutional provision thus precludes the insertion of riders in legislation,a rider being a provision not germane to the subject matter of the bill.

It is not to be narrowly construed though as to cripple or impede proper legislation. The construction must bereasonable and not technical. It is sufficient if the title be comprehensive enough reasonably to include thegeneral object which the statute seeks to effect without expressing each and every end and means necessary forthe accomplishment of that object. Mere details need not be set forth. The legislature is not required to makethe title of the act a complete index of its contents. The constitutional provision is satisfied if all parts of an actwhich relates to its subject find expression in its title.3

The first decision of this Court, after the establishment of the Commonwealth of the Philippines, in 1938,construing a provision of this nature, Government v. Hongkong & Shanghai Bank,4 held that the inclusion ofSection 11 of Act No. 4007, the Reorganization Law, providing for the mode in which the total annual expensesof the Bureau of Banking may be reimbursed through assessment levied upon all banking institutions subject toinspection by the Bank Commissioner was not violative of such a requirement in the Jones Law, the previousorganic act. Justice Laurel, however, vigorously dissented, his view being that while the main subject of the actwas reorganization, the provision assailed did not deal with reorganization but with taxation. While the case ofGovernment vs. Hongkong & Shanghai Bank was decided by a bare majority of four justices against three, thepresent trend seems to be that the constitutional requirement is to be given the liberal test as indicated in themajority opinion penned by Justice Abad Santos, and not the strict test as desired by the majority headed by

Justice Laurel.

Such a trend has been reflected in subsequent decisions beginning with Sumulong v. Commission on Elections,5

up to and including Felwa vs. Salas, a 1966 decision,6 the opinion coming from Justice Concepcion.

It is true of course that in Philconsa v. Gimenez,7 one of the grounds on which the invalidity of Republic Act No.3836 was predicated was the violation of the above constitutional provision. This Retirement Act for senatorsand representatives was entitled "AN ACT AMENDING SUB-SECTION (c), SECTION TWELVE OFCOMMONWEALTH ACT NUMBERED ONE HUNDRED EIGHTY-SIX, AS AMENDED BY REPUBLICACT NUMBERED THIRTY HUNDRED NINETY-SIX." As we noted, the paragraph in Republic Act No.3836 deemed objectionable "refers to members of Congress and to elective officers thereof who are not membersof the Government Service Insurance System. To provide retirement benefits, therefore, for these officials, wouldrelate to a subject matter which is not germane to Commonwealth Act No. 186. In other words, this portionof the amendment ( re retirement benefits for Members of Congress and appointive officers, such as the Secretaryand Sergeants-at-arms for each house) is not related in any manner to the subject of Commonwealth Act No.186 establishing the Government Service Insurance System and which provides for both retirement and insurancebenefits to its members." Nonetheless our opinion was careful to note that there was no abandonment of theprinciple of liberality. Thus: "we are not unmindful of the fact that there has been a general disposition in allcourts to construe the constitutional provision with reference to the subject and title of the Act, liberally."

It would follow therefore that the challenged legislation Republic Act No. 4790 is not susceptible to theindictment that the constitutional requirement as to legislation having only one subject which should beexpressed in his title was not met. The subject was the creation of the municipality of Dianaton. That wasembodied in the title.

It is in the light of the aforementioned judicial decisions of this Court, some of the opinions coming from juristsillustrious for their mastery of constitutional law and their acknowledged erudition, that, with all due respect,I find the citation from Corpus Juris Secundum, unnecessary and far from persuasive. The State decisions cited,I do not deem controlling, as the freedom of this Court to accept or reject doctrines therein announced cannotbe doubted.

Wherein does the weakness of the statute lie then? To repeat, several barrios of two municipalities outside Lanaodel Sur were included in the municipality of Dianaton of that province. That itself would not have given rise toa constitutional question considering the broad, well-high plenary powers possessed by Congress to alterprovincial and municipal boundaries. What justified resort to this Court was the congressional failure to makeexplicit that such barrios in two municipalities located in Cotabato would thereafter form part of the newlycreated municipality of Dianaton, Lanao del Sur.

To avoid any doubt as to the validity of such statute, it must be construed as to exclude from Dianaton all ofsuch barrios mentioned in Republic Act No. 4790 found in municipalities outside Lanao del Sur. As thusinterpreted, the statute can meet the test of the most rigid scrutiny. Nor is this to do violence to the legislativeintent. What was created was a new municipality from barrios named as found in Lanao del Sur. Thisconstruction assures precisely that.

This mode of interpreting Republic Act No. 4790 finds support in basic principles underlying precedents, whichif not precisely controlling, have a persuasive ring. In Radiowealth v. Agregado,8 certain provisions of theAdministrative Code were interpreted and given a "construction which would be more in harmony with thetenets of the fundamental law." In Sanchez v. Lyon Construction,9 this Court had a similar ruling: "Article 302of the Code of Commerce must be applied in consonance with [the relevant] provisions of our Constitution."The above principle gained acceptance at a much earlier period in our constitutional history. Thus in a 1913decision, In re Guariña:10 "In construing a statute enacted by the Philippine Commission we deem it our dutynot to give it a construction which would be repugnant to an Act of Congress, if the language of the statute isfairly susceptible of another construction not in conflict with the higher law. In doing so, we think we should

not hesitate to disregard contentions touching the apparent intention of the legislator which would lead to theconclusion that the Commission intended to enact a law in violation of the Act of Congress. However speciousthe argument may be in favor of one of two possible constructions, it must be disregarded if on examination itis found to rest on the contention that the legislator designed an attempt to transcend the rightful limits of hisauthority, and that his apparent intention was to enact an invalid law."

American Supreme Court decisions are equally explicit. The then Justice, later Chief Justice, Stone, construedstatutes "with an eye to possible constitutional limitations so as to avoid doubts as to [their] validity."11 Fromthe pen of the articulate jurist, Frankfurter:12 "Accordingly, the phrase "lobbying activities" in the resolution mustbe given the meaning that may fairly be attributed to it, having special regard for the principle of constitutionaladjudication which makes it decisive in the choice of fair alternatives that one construction may raise seriousconstitutional questions avoided by another." His opinion in the Rumely case continues with the abovepronouncement of Stone and two other former Chief Justices: "In the words of Mr. Chief Justice Taft, '(i)t isour duty in the interpretation of federal statutes to reach conclusion which will avoid serious doubt of theirconstitutionality', Richmond Screw Anchor Co. v. United States, 275 US 331, 346, 48 S. Ct. 194, 198, 72 L.ed. 303. . . . As phrased by Mr. Chief Justice Hughes, "if a serious doubt of constitutionality is raised, it is acardinal principle that this Court will first ascertain whether a construction of the statute is fairly possible bywhich the question may be avoided.' Crowell v. Benson, 285, 296, 76 L. ed. 598, and cases cited." Theprevailing doctrine then as set forth by Justice Clark in a 1963 decision,13 is that courts "have consistently soughtan interpretation which supports the constitutionality of legislation." Phrased differently by Justice Douglas, thejudiciary favors "that interpretation of legislation which gives it the greater change of surviving the test ofconstitutionality."14

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

So I would view the matter, with all due acknowledgment of the practical considerations clearly brought to lightin the opinion of the Court.

Footnotes

1 Hereinafter referred to as Comelec.

2 Article VI, Sec. 21(1), Philippine Constitution.

3 Stiglitz vs. Schiardien, 40 SW 2d 315, 317, 320.

4 Congressional Record, Vol. I, No. 40, p. 8; Vol. I, No. 50, pp. 40-41.

5 Section 18, Article VI of the Constitution, provides:

"Sec. 18. All appropriation, revenue or tariff bills, bills authorizing increase of the public debt, billsof local application, and private bills, shall originate exclusively in the House of Representatives, butthe Senate may propose or concur with amendments."

6 Vidal de Roces vs. Posadas, 58 Phil. 108, 111-112; Ichong vs. Hernandez, 101 Phil. 1155, 1188-1190.

7 82 C.J.S. pp. 365, 370; emphasis supplied.

8 Emphasis ours.

9 Emphasis supplied.

10 Examples: Wilcox vs. Paddock, 31 NW 609, where the statute entitled "An act making an appropriationof state swamp lands to aid the county of Gratiot in improving the channel of Maple river . . ." but thebody of the act affected another county other than Gratiot.

State vs. Burr, 238 P 585, the statute entitled "An act to amend Secs. 4318 and 4327 of the Codesof Montana relating to changing the boundaries of Fergus and Judith Basin countries" was renderedvoid because the body of the act included the boundaries of Petroleum county.

Atchison vs. Kearney County, 48 P 583, where the title of the act purported to attach Kearneycounty to Finney county the body of the act attached it to Hamilton county.

State vs. Nelson, 98 So. 715, the title of the act purporting to alter or rearrange the boundaries ofDecatur city and the body of the act which actually diminished the boundary lines of the city wereconsidered by the court as dealing with incongruous matters. The reading of the former would giveno clear suggestion that the latter would follow and be made the subject of the act. Jackson, Clerkvs. Sherrod, 92 So. 481; City of Ensley vs. Simpson, 52 So. 61, cited.

Fairview vs. City of Detroit, 113 NW 368, where the title gave notice that the entire village ofFairview is annexed to Detroit when the body affected only a portion.

11 Black, Interpretation of Laws, 2d. ed., p. 116.

12 Barrameda vs. Moir, 25 Phil. 44, 47-48, quoted in Government vs. Springer (50 Phil. 259, 292; emphasissupplied).

13 McQuillin, Municipal Corporations, 3d ed., pp. 456-464.

14 In the case of Fuqua vs. City of Mobile, 121 So. 696, it was asserted that the portion of the statuteexcluding a territory from Mobile which was not express in the title "An act to alter and rearrange theboundary lines of the city of Mobile in the state of Alabama" should be the only portion invalidated. Thecourt, using the test whether or not after the objectionable feature is stricken off there would still remainan act complete in itself, sensible, capable of being executed, ruled that there can be no segregation of thatportion dealing with the excluded territory from that dealing with additional territory because these twomatters are all embraced and intermingled in one section dealing with the corporate limits of the city.

In the case of Engle vs. Bonnie, 204 SW 2d 963, the statute involved was entitled "An Act relatingto cities". Section 4 thereof "requires the creation of a municipality on petition of a majority of votersor 500 voters." But some of the provisions were germane to the title of the law. This statute wasdeclared void in toto. The Court of Appeals of Kentucky ruled as follows:

"The judgment declared only Section 4 [relative to the creation of a municipality on petition of thevoters] to be void and the remainder valid. While some of the provisions of the act are germane tothe title, since they deal with the classification of cities to be created, they seem merely to harmonizeother sections of the statute which they amend with a new creation of cities other than sixth classtowns. To remove only Section 4 would be like taking the motor of an automobile which leaves themachine of no use. We are quite sure that these provisions would not have been enacted withoutSection 4; hence, they too must fall."

15 Macias vs. The Commission on Elections, L-18684, September 14, 1961.

16 Brooks vs. Hydorn, 42 NW 1122, 1123-1124; Fairview vs. City of Detroit, 113 NW 368, 370.

FERNANDO, J., dissenting:

1 Art. VI, Sec. 21, par. 1, Constitution.

2 Government v. Hongkong & Shanghai Bank (1938), 66 Phil. 483.

3 People vs. Carlos (1947), 78 Phil. 535.

4 66 Phil. 483.

5 73 Phil. (1942) 228.

6 L-26511, October 29, 1960. The other cases that may be cited follows People v. Carlos (1947), 78 Phil.535; Nuval v. de la Fuente (1953), 92 Phil. 1074; Ichong v. Hernandez (1951), 101 Phil. 1155; Corderov. Cabatuando, L-14542, Oct. 31, 1962; Municipality of Jose Panganiban v. Shell Company, L-18349,July 30, 1966.

7 L-23326, December 18, 1965.

8 86 Phil. 429 (1950).

9 87 Phil. 309 (1950), Cf . City of Manila v. Arellano Law Colleges, Inc. (1950), 85 Phil. 663.

10 24 Phil. 37. Justice Carson who penned the opinion cited Black on Interpretation of Laws to this effect:"Hence it follows that the courts will not so construe the law as to make it conflict with the constitution,but will rather put such an interpretation upon it as will avoid conflict with the constitution and give it fullforce and effect, if this can be done without extravagance. If there is doubt, or uncertainty as to themeaning of the legislature, if the words or provisions of the statute are obscure, or if the enactment is fairlysusceptible of two or more constructions, that interpretation will be adopted which will avoid the effectof unconstitutionality, even though it may be necessary, for this purpose, to disregard the more usual orapparent impact of the language employed."

11 Lucas v. Alexander (1928). 279 US 573, 577-578, citing United States ex rel. Atty. Gen. v. Delaware& H. Co. 213 US 366, 407, 408, 53 L. ed. 836, 848, 849, 29 Sup. Ct. Rep. 527: United States v.Standard Brewery, 251 US 210, 220, 64 L. ed. 229, 235, 40 Sup. Ct. Rep. 139; Texas v. Eastern TexasR. Co. 258 US 204, 217, 66 L. ed. 566, 572, 42 Sup. Ct. Rep. 281; Bratton v. Chandler, 260 US 110,114, 67 L. ed. 157, 161, 43 Sup. Ct. Rep. 43; Panama R. Co. v. Johnson, 264 US 375, 390, 68 L. ed.748, 754, 44 Sup. Ct. Rep. 391.

12 United States v. Rumely (1953), 345 US 41, 45.

13 United States v. National Dairy Product Corp. 373 US 29, 32.

14 Ex parte Endo (1944), 323 US 283, 299-300.

15 Chippewa Indians v. United States (1937), 301 US 358, 376.