Magtajas v. Pryce Properties Corp.

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

ISSUE: WON Ordinance 3353 and 3375-93 valid

HELD: No

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

2.

Facts:

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

Issue:

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

Held:

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

General Welfare

. — Every local government unit shall exercise thepowers expressly granted, those necessarily implied therefrom, as well aspowers necessary, appropriate, or incidental for its efficient and effectivegovernance, and those which are essential to the promotion of the generalwelfare. Within their respective territorial jurisdictions, local governmentunits shall ensure and support, among other things, the preservation andenrichment of culture, promote health and safety, enhance the right of thepeople to a balanced ecology, encourage and support the development of appropriate and self-reliant scientific and technological capabilities, improvepublic morals, enhance economic prosperity and social justice, promote fullemployment among their residents, maintain peace and order, and preservethe comfort and convenience of their inhabitants. There is a requirement that the ordinances should not contravene a statute.Municipal governments are only agents of the national government. Local councils exerciseonly delegated legislative powers conferred on them by Congress as the national lawmakingbody. The delegate cannot be superior to the principal or exercise powers higher than thoseof the latter. It is a heresy to suggest that the local government units can undo the acts of Congress, from which they have derived their power in the first place, and negate by mereordinance the mandate of the statute.

Casino gambling is authorized by P.D. 1869. This decree has the status of a statutethat cannot be amended or nullified by a mere ordinance.

HELD:

NO. Petition was denied. Decision of respondent Court of Appeals was affirmed.

RATIO:

The morality of gambling is not a justiciable issue. Gambling is not illegal per se. While it is generally considered inimical to the interests of the people, there is nothing in the Constitution categorically proscribing or penalizing gambling or, for that matter, even mentioning it at all. It is left to Congress to deal with the activity as it sees fit. In the exercise of its own discretion, the legislature may prohibit gambling altogether or allow it without limitation or it may prohibit some forms of gambling and allow others for whatever reasons it may consider sufficient. Thus, it has prohibited jueteng and monte but permits lotteries, cockfighting and horse-racing. In making such

choices, Congress has consulted its own wisdom, which this Court has no authority to review, much less reverse. Well has it been said that courts do not sit to resolve the merits of conflicting theories.

The tests of a valid ordinance are well established. A long line of decisions has held that to be valid, an ordinance must conform to the following substantive requirements:

1) It must not contravene the constitution or any statute.

2) It must not be unfair or oppressive.

3) It must not be partial or discriminatory.

4) It must not prohibit but may regulate trade.

5) It must be general and consistent with public policy.

6) It must not be unreasonable.

The rationale of the requirement that the ordinances should not contravene a statute is obvious. Municipal governments are only agents of the national government. Local councils exercise only delegated legislative powers conferred on them by Congress as the national lawmaking body. The delegate cannot be superior to the principal or exercise powers higher than those of the latter. It is a heresy to suggest that the local government units can undo the acts of Congress, from which they have derived their power in the first place, and negate by mere ordinance the mandate of the statute.

Lina v. Paño

Facts:

Private respondent Tony Calvento, was appointed agent by PCSO to install a terminalfor the operation of lotto, applied for a mayor’s permit to operate a lotto outlet in San Pedro,Laguna. It was denied on the ground that an ordinance entitled Kapasiyahan Blg. 508, Taon1995 of the Sangguniang Panlalawigan of Laguna prohibited gambling in the province,including the operation of lotto. With the denial of his application, private respondent filedan action for declaratory relief with prayer for preliminary injunction and temporaryrestraining order. The trial court rendered judgment in favor of private respondent enjoiningpetitioners from implementing or enforcing the subject resolution.

Issue:

whether Kapasiyahan Blg. 508, T. 1995 of the Sangguniang Panlalawigan of Lagunaand the denial of a mayor’s permit based thereon are valid

Held:

No. The questioned ordinance merely states the “objection” of the council to the saidgame. It is but a mere policy statement on the part of the local council, which is not self-executing. Nor could it serve as a valid ground to prohibit the operation of the lotto systemin the province of Laguna. As a policy statement expressing the local government’sobjection to the lotto, such resolution is valid. This is part of the local government’sautonomy to air its views which may be contrary to that of the national government’s.However, this freedom to exercise contrary views does not mean that local governmentsmay actually enact ordinances that go against laws duly enacted by Congress. Given thispremise, the assailed resolution in this case could not and should not be interpreted as ameasure or ordinance prohibiting the operation of lotto.Moreover, ordinances should not contravene statutes as municipal governments aremerely agents of the national government. The local councils exercise only delegatedlegislative powers which have been conferred on them by Congress. The delegate cannot besuperior to the principal or exercise powers higher than those of the latter. This being thecase, these councils, as delegates, cannot be superior to the principal or exercise powershigher than those of the latter. The question of whether gambling should be permitted is forCongress to determine, taking into account national and local interests. Since Congress hasallowed the PCSO to operate lotteries which PCSO seeks to conduct in Laguna, pursuant toits legislative grant of authority, the province's Sangguniang Panlalawigan cannot nullify theexercise of said authority by preventing something already allowed by Congress.

FACTS:On December 29, 1995, respondent Tony Calvento was appointed agent by the Philippine Charity Sweepstakes Office (PCSO) to install Terminal OM 20 for the operation of lotto.  He asked Mayor Calixto Cataquiz, Mayor of San Pedro, Laguna, for a mayor’s permit to open the lotto outlet.  This was denied by Mayor Cataquiz in a letter dated February 19, 1996.  The ground for said denial was an ordinance passed by the Sangguniang Panlalawigan of Laguna entitled Kapasiyahan Blg. 508, T. 1995which was issued on September 18, 1995.As a result of this resolution of denial, respondent Calvento filed a complaint for declaratory relief with prayer for preliminary injunction and temporary restraining order.  In the said complaint, respondent Calvento asked the Regional Trial Court of San Pedro Laguna, Branch 93, for the following reliefs: (1) a preliminary injunction or temporary restraining order, ordering the defendants to refrain from implementing or enforcing Kapasiyahan Blg. 508, T. 1995; (2) an order requiring Hon. Municipal Mayor Calixto R. Cataquiz to issue a business permit for the operation of a lotto outlet; and (3) an order annulling or declaring as invalid Kapasiyahan Blg. 508, T. 1995.On February 10, 1997, the respondent judge, Francisco Dizon Paño, promulgated his decision enjoining the petitioners from implementing or enforcing resolution or Kapasiyahan Blg. 508, T. 1995.

ISSUE: WON  Kapasiyahan Blg. 508, T. 1995 is valid

HELD: As a policy statement expressing the local government’s objection to the lotto, such resolution is valid.  This is part of the local government’s autonomy to air its views which may be contrary to that of the national government’s.  However, this freedom to exercise contrary views does not mean that local governments may actually enact ordinances that go against laws duly enacted by Congress.  Given this premise, the assailed resolution in this case could not and should not be interpreted as a measure or ordinance prohibiting the operation of lotto.n our system of government, the power of local government units to legislate and enact ordinances and resolutions is merely a delegated power coming from Congress.  As held in Tatel vs. Virac, ordinances should not contravene an existing statute enacted by Congress.  The reasons for this is obvious, as elucidated in Magtajas v. Pryce Properties Corp

BATANGAS CATV, INC. vs. THE COURT OF APPEALS, THE BATANGAS CITY SANGGUNIANG PANLUNGSOD and BATANGAS CITY MAYOR [G.R. No. 138810. September 29, 2004]

FACTS: On July 28, 1986, respondent SangguniangPanlungsod enacted Resolution No. 210 granting petitioner a permit to construct, install, and operate a CATV system in Batangas City. Section 8 of the Resolution provides that petitioner is authorized to charge its subscribers the maximum rates specified therein, “provided, however, that any increase of rates shall be subject to the approval of the SangguniangPanlungsod.

Sometime in November 1993, petitioner increased its subscriber rates from P88.00 to P180.00 per month. As a result, respondent Mayor wrote petitioner a letter threatening to cancel its permit unless it secures the approval of respondent SangguniangPanlungsod, pursuant to Resolution No. 210.

Petitioner then filed with the RTC, Branch 7, Batangas City, a petition for injunction alleging that respondent SangguniangPanlungsod has no authority to regulate the subscriber rates charged by CATV operators because under Executive Order No. 205, the National Telecommunications Commission (NTC) has the sole authority to regulate the CATV operation in the Philippines.

ISSUE : may a local government unit (LGU) regulate the subscriber rates charged by CATV operators within its territorial jurisdiction? 

HELD: No.

x xx

The logical conclusion, therefore, is that in light of the above laws and E.O. No. 436, the NTC exercises regulatory power over CATV operators to the exclusion of other bodies.

x xx

Like any other enterprise, CATV operation maybe regulated by LGUs under the general welfare clause. This is primarily because the CATV system commits the indiscretion of crossing public properties. (It uses public properties in order to reach subscribers.) The physical realities of constructing CATV system – the use of public streets, rights of ways, the founding of structures, and the parceling of large regions – allow an LGU a certain degree of regulation over CATV operators.

x xx

But, while we recognize the LGUs’ power under the general welfare clause, we cannot sustain Resolution No. 210. We are convinced that respondents strayed from the well recognized limits of its power. The flaws in Resolution No. 210 are: (1) it violates the mandate of existing laws and (2) it violates the State’s deregulation policy over the CATV industry.

LGUs must recognize that technical matters concerning CATV operation are within the exclusive regulatory power of the NTC.

LAGUNA LAKE DEVELOPMENT AUTHORITY vs COURT OF APPEALS

FACTS

·         The residents of Tala Estate, Barangay Camarin, Caloocan City raised a complaint with the Laguna Lake Development Authority (LLDA), seeking to stop the operation of the City Government of Caloocan of an 8.6 hectare open garbage dumpsite in Tala Estate, due to its harmful effects on the health of the residents and the pollution of the surrounding water.

·         LLDA discovered that the City Government of Caloocan has been maintaining the open dumpsite at the Camarin Area without a requisite Environmental Compliance Certificate from the Environmental Management Bureau of the DENR. They also found the water to have been directly contaminated by the operation of the dumpsite.

·         LLDA issued a Cease and Desist Order against the City Government and other entities to completely halt, stop and desist from dumping any form or kind of garbage and other waste matter on the Camarin dumpsite.

·         The City Government went to the Regional Trial Court of Caloocan City to file an action for the declaration of nullity of the cease and desist order and sought to be declared as the sole authority empowered to promote the health and safety and enhance the right of the people in Caloocan City to a balanced ecology within its territorial jurisdiction.

·         LLDA sought to dismiss the complaint, invoking the Pollution Control Law that the review of cease and desist orders of that nature falls under the Court of Appeals and not the RTC.

·         RTC denied LLDA’s motion to dismiss, and issued a writ of preliminary injunction enjoining LLDA from enforcing the cease and desist order during the pendency of the case.

·         The Court of Appeals promulgated a decision that ruled that the LLDA has no power and authority to issue a cease and desist order enjoining the dumping of garbage.

·         The residents seek a review of the decision.

ISSUE

WoN the LLDA has authority and power to issue an order which, in its nature and effect was injunctive.

THEORY OF THE PARTIES

City Government of Caloocan: As a local government unit, pursuant to the general welfare provision of the Local Government Code, they have the mandate to operate a dumpsite and determine the effects to the ecological balance over its territorial jurisdiction.

LLDA: As an administrative agency which was granted regulatory and adjudicatory powers and functions by RA No. 4850, it is invested with the power and authority to issue a cease and desist order pursuant to various provisions in EO No. 927.

RULING

YES.

1.        LLDA is mandated by law to manage the environment, preserve the quality of human life and ecological systems and prevent undue ecological disturbances, deterioration and pollution in the Laguna Lake area and surrounding provinces and cities, including Caloocan.

·         While pollution cases are generally under the Pollution Adjudication Board under the Department of Environment and Natural Resources, it does not preclude mandate from special laws that provide another forum.

·         In this case, RA No. 4850 provides that mandate to the LLDA. It is mandated to pass upon or approve or disapprove plans and programs of local government offices and agencies within the region and their underlying environmental/ecological repercussions.

·         The DENR even recognized the primary jurisdiction of the LLDA over the case when the DENR acted as intermediary at a meeting among the representatives of the city government, LLDA and the residents.

2.        LLDA has the authority to issue the cease and desist order.

a.        Explicit in the law.

·         §4, par. (3) explicitly authorizes the LLDA to make whatever order may be necessary in the exercise of its jurisdiction.

·         While LLDA was not expressly conferred the power “to issue an ex-parte cease and desist order” in that language, the provision granting authority to “make (…) orders requiring the discontinuance of pollution”, has the same effect.

b.        Necessarily implied powers.

·         Assuming arguendo that the cease and desist order” was not expressly conferred by law, there is jurisprudence enough to the effect.

·         While it is a fundamental rule that an administrative agency has only such power as expressly granted to it by law, it is likewise a settled rule that an administrative agency has also such powers as are necessarily implied in the exercise of its express powers. Otherwise, it will be reduced to a “toothless” paper agency.

·         In Pollution Adjudication Board vs Court of Appeals, the Court ruled that the PAB has the power to issue anex-parte cease and desist order on prima facie evidence of an establishment exceeding the allowable standards set by the anti-pollution laws of the country.

·         LLDA has been vested with sufficiently broad powers in the regulation of the projects within the LagunaLake region, and this includes the implementation of relevant anti-pollution laws in the area.

Province of Batangas vs. Romulo

FACTS:In 1998, then President Estrada issued EO No. 48 establishing the “Program for Devolution Adjustment and Equalization” to enhance the capabilities of LGUs in the discharge of the functions and services devolved to them through the LGC.

The Oversight Committee under Executive Secretary Ronaldo Zamora passed Resolutions No. OCD-99-005, OCD-99-006 and OCD-99-003 which were approved by Pres. Estrada on October 6, 1999. The guidelines formulated by the Oversight Committee required the LGUs to identify the projects eligible for funding under the portion of LGSEF and submit the project proposals and other requirements to the DILG for appraisal before the Committee serves notice to the DBM for the subsequent release of the corresponding funds.

Hon. Herminaldo Mandanas, Governor of Batangas, petitioned to declare unconstitutional and void certain provisos contained in the General Appropriations Acts (GAAs) of 1999, 2000, and 2001, insofar as they uniformly earmarked for each corresponding year the amount of P5billion for the Internal Revenue Allotment (IRA) for the Local Government Service Equalization Fund (LGSEF) & imposed conditions for the release thereof.

ISSUE:Whether the assailed provisos in the GAAs of 1999, 2000, and 2001, and the OCD resolutions infringe the Constitution and the LGC of 1991.

HELD:Yes.The assailed provisos in the GAAs of 1999, 2000, and 2001, and the OCD resolutions constitute a “withholding” of a portion of the IRA – they effectively encroach on the fiscal autonomy enjoyed by LGUs and must be struck down.

According to Art. II, Sec.25 of the Constitution, “the State shall ensure the local autonomy of local governments“. Consistent with the principle of local autonomy, theConstitution confines the President’s power over the LGUs to one of general supervision, which has been interpreted to exclude the power of control. Drilon v. Limdistinguishes supervision from control: control lays down the rules in the doing of an act – the officer has the discretion to order his subordinate to do or redo the act, or decide to do it himself; supervision merely sees to it that the rules are followed but has no authority to set down the rules or the discretion to modify/replace them.

The entire process involving the distribution & release of the LGSEF is constitutionally impermissible. The LGSEF is part of the IRA or “just share” of the LGUs in the national taxes. Sec.6, Art.X of the Constitution mandates that the “just share” shall beautomatically released to the LGUs. Since the release is automatic, the LGUs aren’t required to perform any act to receive the “just share” – it shall be released to them “without need of further action“. To subject its distribution & release to the vagaries of the implementing rules & regulations as sanctioned by the assailed provisos in the GAAs of 1999-2001 and the OCD Resolutions would violate this constitutional mandate.

The only possible exception to the mandatory automatic release of the LGUs IRA is if the national internal revenue collections for the current fiscal year is less than 40% of the collections of the 3rd preceding fiscal year. The exception does not apply in this case.

The Oversight Committee’s authority is limited to the implementation of the LGC of 1991 not to supplant or subvert the same, and neither can it exercise control over the IRA of the LGUs.

Congress may amend any of the provisions of the LGC but only through a separate lawand not through appropriations laws or GAAs. Congress cannot include in a general appropriations bill matters that should be more properly enacted in a separate legislation.

A general appropriations bill is a special type of legislation, whose content is limited to specified sums of money dedicated to a specific purpose or a separate fiscal unit – any provision therein which is intended to amend another law is considered an “inappropriate provision“. Increasing/decreasing the IRA of LGUs fixed in the LGC of 1991 are matters of general & substantive law. To permit the Congress to undertake these amendments through the GAAs would unduly infringe the fiscal autonomy of the LGUs.

The value of LGUs as institutions of democracy is measured by the degree of autonomy they enjoy. Our national officials should not only comply with the constitutional provisions in local autonomy but should also appreciate the spirit and liberty upon which these provisions are based.

Borja vs. Comelec

Facts: 

Jose T. Capco, Jr. was elected as Vice-Mayor of Pateros on January 18, 1988 for a term ending on June 30, 1992. On September 2, 1989, he became Mayor, by operation of law, upon the death of the incumbent, Cesar Borja. Thereafter, Capco was elected and served as Mayor for two more terms, from 1992 to 1998. On March 27, 1998, Capco filed a Certificate of Candidacy for Mayor of Pateros in the May 11, 1998 elections. Petitioner Benjamin U. Borja, Jr., who was also a candidate for mayor, sought Capco’s disqualification on the ground that Capco would have already served as Mayor for 3 consecutive terms by June 30, 1998; hence, he would be ineligible to serve for another term. The Second Division of the Comelec declared Capco disqualified but the Comelec en banc reversed the decision and declared Capco eligible to run for mayor. Capco was subsequently voted and proclaimed as mayor. 

Issue: 

Whether or not a vice-mayor who succeeds to the office of mayor by operation of law and serves the remainder of the term is considered to have served a term in that office for the purpose of the three-term limit. 

Held: 

No. The term limit for elective local officials must be taken to refer to the right to be elected as well as the right to serve the same elective position. Consequently, it is not enough that an individual has served three consecutive terms in an elective local office, he must also have been elected to the same position for the same number of times before the disqualification can apply. Capco was qualified to run again as mayor in the next election because he was not elected to the office of mayor in the first term but simply found himself thrust into it by operation of law. Neither had he served the full term because he only continued the service, interrupted by the death, of the deceased mayor. The vice-mayor’s assumption of the mayorship in the event of the vacancy is more a matter of chance than of design. Hence, his service in that office should not be counted in the application of any term limit.

The policy embodied in the constitutional provision (Art. X, §8) is not only to prevent the establishment of political dynasties but also to enhance the freedom of choice of the people. A consideration of the historical background of Art. X, §8 of the Constitution reveals that the members of the Constitutional Commission were as much concerned with preserving the freedom of choice of the people as they were with preventing the monopolization of political power. In discussing term limits, the drafters of the Constitution did so on the assumption that the officials concerned were serving by reason of election. To consider Capco to have served the first term in full and therefore ineligible to run a third time for reelection would be not only to falsify reality but also to unduly restrict the right of the people to choose whom they wish to govern them.