summary on private corporations

7/30/2019 Summary on Private Corporations

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ZPG & ASSOCIATES(Zambales.Pablo.Gonzales)

LAW ON PUBLICCORPORATIONS

A. General Principles

1. CORPORATIONan artificial beingcreated by operation of law, having theright of succession and the powers,attributes and properties expresslyauthorized by law or incident to itsexistence.a. PUBLIC CORPORATIONone formedand organized for the government of aportion of the State.

2. Classes of Corporation:

a. Public or Municipala bodypolitic and corporateconstituted by incorporation ofinhabitants of city or town forpurposes of local governmentthereof or as agency of State toassist in civil government of thecountry; one formed andorganized for the governmentof a portion of the State.

b. Privateone formed for someprivate purpose, benefit, aim or

end.c. Quasi-Publica private

corporation that renders publicservice or supplies publicwants.

d. Quasi-corporationpubliccorporations created asagencies of State for narrowand limited purpose.

3. Elements of Municipal Corporationa. Legal creation or incorporationb. Corporate name

c. Inhabitantsd. Territory

4. Dual Nature of MunicipalCorporation

Every local government unit created or organized is a body politic andcorporate endowed with powers to beexercised by it in conformity with law. Assuch, it shall exercise powers as politicalsubdivision of the National Governmentand as a corporate entity representing theinhabitants of its territory.

a. Public/Governmentalit actsas an agent of the State for thegovernment of the territory andthe inhabitants within themunicipal limits; it exercises bydelegation a part of thesovereignty of the State.

b. Private/Proprietaryit acts ina similar category as a businesscorporation, performingfunctions not strictlygovernmental or political; it

stands for the community in theadministration of local affairs.It acts as a separate entity forits own purposes and not as asubdivision of the State.

5. Criterion to determine whether

corporation is public:The relationship of the corporation

to the State, i.e., if created by the State asits own agency to help the State incarrying out its governmental functions,then it is public, otherwise, it is private.

6. De Facto Municipal Corporation--a corporation that may exist in fact

although not point of law because ofcertain defects in some essential featuresof its incorporation.

7. Elements of De Facto MunicipalCorporation:

a. A valid law authorizingincorporation

b. An attempt in good faith toorganize under it

c. A colorable compliance with thelaw

d. An assumption of corporatepowers

8. Three forms of decentralization:

a. Devolution- is the

transfer of power and authorityfrom the national government toLGUs as the territorial and politicalsubdivisions of the State. Thenature of power transfer is politicaland the approach is territorial orareal.

b. Deconcentration- isthe transfer of power, authority orresponsibility, or the discretion toplan, decide and manage fromcentral point or local levels, butwithin the central or national

government itself. The nature ofthe transfer is administrative andthe approach is sectoral.

c. Debureaucratization-is the transfer of some publicfunctions and responsibilities,which the government mayperform, to private entities or non-governmental organizations; it ispeoples empowerment orparticipation in local governance.

Decentralization of Administration- the central government delegatesadministrative powers to politicalsubdivisions in order to broaden the baseof government power.

Decentralization of Power (PoliticalDecentralization)- involves abdication ofpolitical power in favor of LGUs declaredautonomous. (Limbonas vs. Mangelin,170 SCRA 786)

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NOTE:Local Autonomy- is self-

governing. It is the granting of morepowers, authority, responsibilities andresources to the lower or local levels of agovernment system. The principle of localautonomy under the 1987 Constitution

simply means decentralization. It doesnot make the local government sovereignwithin the state or an imperium inimperio.

Among the regulatory powers of theNational Government Agencies transferred ordevolved to the LGUs include the following:

1. The reclassification of agriculturallands- DAR to cities and municipalities2. Enforcement of environmentallaws- DENR to all LGUs

3. Inspection of food products andquarantine- DOH to cities andmunicipalities4. The enforcement of the NationalBuilding Code- DPWH to cities andmunicipalities5. The processing and approval of subdivision plans- HLURB to cities andmunicipalities6. The operation of tricycles- LTFRB tocities and municipalities7. The establishment of cockpits andholding of cockfights- Philippine Gamefowl

Commission to cities and municipalities

Among the basic services and facilitiesdevolved to LGUs include:

1. Agricultural extension and on-siteresearch of the Department of Agriculture;2. Community-based forestry projectof the DENR;3. Field health and hospital servicesand other tertiary health services of theDOH;4. Public works and infrastructure

projects funded out of local funds of theDPWH;5. The school building program of theDECS;6. Social welfare services of theDSWD;7. Tourism facilities and tourismpromotion and development of the DOT;8. Telecommunications services forprovinces and cities of the DOTC;9. Housing projects for provinces andcities; and10. Other services such as investment

support.

9. How local autonomy enhancesgovernmental and corporate powers ofLGUs:

a. Every local government unit shall have:

i. Full autonomy in their exercise ofproprietary rights and management ofeconomic enterprises.ii. Full authority to secure domestic orforeign grants without the approval of

the NGAs concerned, unless these areprojects with national securityimplications, andiii. Financial undertakings for LGUs formutual advantage thru loans andassistance to calamity-stricken LGUs.

B. R.A. 7160Policy and Application;Constitutional Provisions

1. EffectivityJanuary 1, 19922. Scope of Application (Sec. 4,

RA 7160)Applicable to:

a. all provincesb. citiesc. municipalitiesd. barangayse. and other political bodies

as may be created by law,and

f. to the extent provided inthe LGC (i.e. devolution ofpowers):

-officials-offices, or-agencies of theNational Government

3. Rules of Interpretation (Sec. 5,RA 7160)a. Any provision on a local

government unit shall be liberallyinterpreted its favor, and incase of doubt, any questionthereon shall be resolved in favorof devolution of powers and of thelower local government unit. Anyfair and reasonable doubt as to theexistence of the power shall beinterpreted in favor of the localgovernment unit concerned;

b. In case of doubt, any taxordinance or revenue measure

shall be construed strictly againstthe local govt unit enacting it, andliberally in favor of the taxpayer.Any tax exemption, incentive orrelief granted by any local govtunit pursuant to the provisions ofthis Code shall be construed strictlyagainst the person claiming it;

c. The general welfare provisionsin this Code shall be liberallyinterpreted to give morepowers to local govt units in

accelerating economicdevelopment and upgrading thequality of life for the people inthe community.

d. Rights and obligations existingon the date of effectivity of thisCode and arising out of contracts or any other source ofprestation involving a localgovt unit shall be governed bythe original terms and

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conditions of said contracts orthe law in force at the timesuch rights were vested.

e. In the resolution of controversies arising under thisCode where no legal provisionor jurisprudence applies, resortmay be had to the customs andtraditions in the place where

the controversies take place.

4. Declaration of State Policy overLGUs (Sec. 2, RA 7160)

a. The territorial and politicalsubdivisions of the Stateshall enjoy genuine andmeaningful localautonomy to enable themto attain their fullestdevelopment as self-

reliant communicationsand make them moreeffective partners in theattainment of nationalgoals.

b. To ensure theaccountability of local

govt units through theinstitution of effectivemechanisms of recall,initiative and referendum.

c. To require all nationalagencies and offices toconduct periodicconsultations withappropriate local govtunits, non-governmentaland peoplesorganizations and otherconcerned sectors of the

community before anyproject or program isimplemented in theirrespective jurisdictions.

II. INTER-GOVERNMENTAL RELATIONS1. National Government and Local

Government Units

a. The President shall exercise generalsupervision over LGUs.

i. The President shall exercise

supervisory authority directlyover provinces, highly urbanizedcities and independentcomponent cities.

ii. The President shall exercisesupervision over componentcities and municipalities,through province, and overbarangays through city andmunicipality. (Sec. 25)

The Presidents power ofgeneral supervision over LGUs

includes the authority toinvestigate and imposedisciplinary measures(suspension or removal) uponelective local officials.

b. General responsibilities of theNational Government towards LGUs:

i. formulate policies and setstandards and guidelinesii. provide funding supportiii. augment basic services

assigned to LGUsiv. provide technical and other

forms of assistance andcoordinate on the discharge ofNGA functions

v. ensure the participation of LGUsin planning and implementingnational projects

BasisPower of

Control

Power ofGeneral

Supervisio

nA. as tonature of

powerLegislative Executive

B. as towho

exercisesthe

power

Congress

Presidentassisted bythe DILGSecretary

C. as to

what thepower

includes

-creation,conversionof LGUs andalteration of

itsboundaries;

-allocatepowers,

responsibilities and

resourcesamongLGUs;

-provide forqualifications, election,

appointment

, removal,term,

salaries andfunctions

and duties oflocal

officials;-provide

othermatters

relating tothe

organization

andoperation of

LGUs;-amendmentof chartersof LGUs.

-overseewhetherLGUs are

performingtheir

duties inaccordance with law;

-

investigateandimpose

disciplinary

measuresuponerring

electivelocal

government officials

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vi. conduct mandatoryconsultations with LGUs

NOTE:No project shall be implemented by

government authorities without consultation withthe local government units and prior approval of

the Sanggunian concerned. (Sec.27)

The requirement of prior consultation applies only to national projects and/orprograms which are to be implemented in aparticular local community. Although sanctionedby the national government, the operation oflotto is neither a program nor project of thenational government but of charitable institution,the Philippine Charity Sweepstakes Office. Theprojects and programs mentioned in Sec. 27should be interpreted to mean projects andprograms whose environmental and ecological

effects are among those mentioned in Sec. 26and 27 of the LGC (Lina vs. Pano, G.R. No.129093, August 30, 2001).

c. Extent of the LCEs authority overNGAs and their functionaries:

i. The LCE can call upon anyemployee stationed or assigned inhis locality to

advise him on matters affecting theLGU as well as coordinate with saidofficials, plans, programs andprojects.

ii. The LCE can enlist the attendanceof the national official stationed inthe LGU on a meeting of electiveand appointed officials of the LGUtreating matters in the promotionof the general welfare of theresidents.

iii. The LCE can also initiate properadministrative or judicial action against national

government official or employee who may havecommitted an offense while stationed or assignedin the LGU.

Power of Control and Power of GeneralSupervision distinguished:

2. Inter-Local Government Relationsa. The province, through the governor,shall ensure that every component city andmunicipality acts within its powers.

b. The city or municipality, through themayor, shall ensure that barangays actwithin the scope of their powers.

c. The governor shall review all executiveorders promulgated by the mayor. Themayor shall review orders promulgatedby the punong barangay.

The Sangguniang Panlalawigan of aprovince reviews all ordinances enacted bythe Sangguniang Panlungsod of componentcities and Sangguniang Bayan of

municipalities under their jurisdiction. In turn,the Sangguniang Panlungsod andSangguniang Bayan review all ordinancespassed by the Sannguniang Barangay underthe jurisdiction.

Likewise, the SangguniangPanlalawigan of a province exercises thequasi-judicial function (administrativedisciplinary authority) of hearing and decidingadministrative cases involving electivemunicipal and component city officials undertheir jurisdiction. In turn, the SangguniangPanlungsod and Sangguniang Bayan exercise

disciplinary authority over elective barangayofficials within their jurisdiction.

3. Relations with Peoples Organizationsand Non-Government Organizations

a. Private Sector Participation in LocalGovernance

Purpose: to ensure the viability of localautonomy as an alternative strategy forsustainable development. LGUs shall

encourage private-sector participationin the delivery of basic services.

b. Role of POs, NGOs in the LGUs:LGUs shall promote the establishment

and operation of peoples and non-governmental organizations as activepartners.

LGUs may enter into joint venture and

cooperative undertakings with peoples andnon-governmental organizationsparticularly in the following:

1. delivery of certain basicservices2. capability building andlivelihood projects; and3. developing local enterprisesdesigned to improve productivity and income,diversifies agriculture, spur ruralindustrialization, and enhance the economicand social well-being of the people.

c. Special Local Bodies where theprivate sector may participate in localgovernance:

1. Local Development Council-a duly constituted body which shall

assist the corresponding Sanggunian insetting the direction of economic andsocial development, and coordinatingdevelopment efforts in its territorial

jurisdiction.

2. Prequalification, Bids andAwards Committee (PBAC)

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responsible for the conduct of prequalification of contractors, bidding,evaluation of bids, and therecommendation of awards concerninglocal infrastructure projects.

governor or the city or municipality mayor: Chairman

3. Local Peace and Order Council,pursuant to E.O. No.309, asamended, Series of 1988.

4. Local School BoardThe DECS shall consult the Board

on the appointment of divisionsuperintendents, district supervisors,school principals, and other schoolofficials.

5. Local Health Board

6. Peoples Law Enforcement Board(PLEB)

III. CREATION, CONVERSION, DIVISION,MERGER AND CONSOLIDATION, ANDABOLITION OF LGUs

A. Creation of LGUs:A local government unit may be

created, divided, merged, abolished, or itsboundaries substantially altered by lawenacted by Congress in the case of a

province, city, municipality, or other politicalsubdivisions, or by SanggunianPanlalawigan or Sanggunian Panlungsodordinance in the case of a barangay. (Sec.6)NOTE:nature of the power to create: LEGISLATIVE

1. While the power to create barangays hasbeen delegated to Sanggunian Panlalawiganand Sangguniang Panlungsod, Congress, inorder to enhance the delivery of basicservices in indigenous cultural communities,

may create barangays in such communitiesnotwithstanding the requirements set forthby law. (Sec.385a, LGC)

2. The creation or conversion of a localgovernment unit to another level shall bebased on the following verifiable indicatorsof viability and projected capacity to provideservices:

a. Sufficient income andb. Population and/orc. Land area

NOTE: Compliance with the above-citedindicators shall be attested by theDepartment of Finance, the NationalStatistics Office and the Land ManagementBureau of the DENR, respectively.

3. Necessity of Fixing CorporateLimits: As a matter of general rule, municipalcorporations cannot, without legalauthorization, exercise its powers beyond itsown corporate limits. It is necessary that it

must have its boundaries fixed, definite andcertain, in order that may be identified andthat all may know the exact scope orsection of territory or geographical divisionembraced within the corporate limits andover which the municipal corporation has

jurisdiction. A description of the boundaries

of a municipal corporation is said to be anessential part of its charter and necessary tocorporate existence. An incorporation isvoid where the boundaries of the municipalcorporation are not described with certainty.

4. Manner of Creation1. Creation of Barangays:

a. Role: serves as the primaryplanning and implementing unit ofgovernment policies, plans programs,projects and activities in the community,and as a forum wherein the collective views

of the people may be expressed, crystallizedand considered, and where disputes may beamicably settled.

b. Who creates: a barangay maybe created, divided, merged, abolished orits boundary substantially altered by law orby an ordinance of the SangguniangPanlalawigan or Sangguniang Panlungsod.Where a barangay is created by anordinance of the Sangguniang Panlalawigan,the recommendation of the SangguniangBayan concerned shall be necessary.

c. Substantive Requisites:1. Population- at least 2000

inhabitantsExcept in cities and

municipalities within Metro Manila orin highly urbanized citiesmust beat least 5000 inhabitants

2. Income- no minimum incomerequirement

3. Land Area- no minimum

requirement, but it must becontiguous but it need not becontiguous if the barangay iscomprised with two or moreislands.

NOTE:The creation of the new barangay shall not however reduce the population of theoriginal barangay to less than the minimumrequirement prescribed in the Code.(Sec.386, LGC)

2. Creation of Municipalities a. Role: serves primarily as a generalpurpose government for the coordinationand delivery of basic, regular and directservices and effective governance of theinhabitants within its territorial jurisdiction.

b. Who creates: may be created,divided, merged, abolished or its boundarysubstantially altered only by an act ofCongress subject to the criteria establishedby the Code.

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c. Substantive Requisites:

1. Population- at least 25,000inhabitants

2. Income- average annual incomeof at least P2.5 million for thelast two consecutive years based

on the 1991 constant prices.3. Land Area- a contiguous territory

of 50 square kilometers.

3. Creation of Component Citiesa. Role- serves primarily as a

general purpose government for thecoordination and delivery of basic, regularand direct services and effectivegovernance of the inhabitants within itsterritorial jurisdiction.

b. Who creates- may be created,

divided, merged or abolished, or itsboundary substantially altered only by anact of Congress subject to the criteriaprovided in the Code.

c. Substantive Requisites:1. Population- at least 150,000

inhabitants2. Income- at least P100 million for

the last two consecutive years3. Land Area- contiguous territory

of at least 100 squarekilometers

NOTE: The Internal Revenue Allotments shall be included in the computation of theaverage annual income of the municipalityfor purposes of determining whether themunicipality may be validly converted into acity. Income is defined in the LGC to be allrevenues and receipts collected or receivedforming the gross accretions of funds of thelocal government unit. The IRAs are regularand recurring income and not merelyspecial funds or transfers and/or budgetary

aids from the national government or non-recurring income. The IRAs regularly andautomatically accrue to the local treasurywithout need of any further action on thepart of the local government unit (Alvarezvs. Guingona, 252 SCRA 695).

4. Conversion of a Component City intoa Highly Urbanized City

a. If a component city shall have metthe minimum requirements for a highlyurbanized city, it shall be the duty of thePresident to declare the city as highly

urbanized city upon: (1) proper applicationand (2) upon ratification in a plebiscite bythe majority of registered voters therein.

b. Substantive Requisites:1. Population- at least 200,000

inhabitants2. Income- at least P50 million

5. Creation of Provincesa. Role- as a political and corporate

unit of government, it serves as a dynamic

mechanism for development processes andeffective governance of local governmentunits within its territorial jurisdiction.

b. Who creates- may be created,divided, merged, or abolished, or itsboundary substantially altered, only by an

act of Congress, subject to the satisfactionof the criteria set forth by the LGC.

c. Substantive Requirements:1. Population- not less than

250,000 inhabitants2. Income- average annual income

of at least P20 million

3. Land Area- a contiguous territoryof at least 2000 squarekilometers

NOTE:

BP 885, which created the Province of Negros del Norte was declaredunconstitutional because it did not complywith the land area criterion prescribed underthe LGC. The use of the word territory inSec. 17 of the LGC refers only to thephysical mass of land area, not to thewaters comprising a political entity. Itexcludes the waters over which the politicalunit exercises control (Tan vs. Comelec,142 SCRA 727).

6. Status of Sub-provinces

Existing sub-provinces are convertedinto regular provinces upon the approval bya majority votes cast in a plebiscite to beheld in the said sub-province and theoriginal province directly affected. (Sec.462,LGC)

7. Autonomous RegionsThe Philippine Constitution mandates

the creation of autonomous regions inMuslim Mindanao and in the Cordillerasconsisting of provinces, cities,municipalities, and geographical areas

sharing common and distinctive historicaland cultural heritage, and economic andsocial cultures. (Sec.15, Art.10, PC)NOTE:

RA 6734, the organic act establishing the Autonomous RegionalGovernment of Muslim Mindanao was heldvalid by the Supreme Court. (DatuFirdausi Abbas vs. COMELEC, 179 SCRA287). However, the sole Province of Ifugaowhich, in the plebiscite, alone voted in favorof RA 6766, cannot validly constitute the

Autonomous Region of the Cordilleras.(Ordillo vs. COMELEC, 192 SCRA 100)

8. Special Metropolitan PoliticalSubdivisions

The Congress may, by law, createspecial metropolitan political subdivisions,but the component cities and municipalitiesshall retain their basic autonomy and shallbe entitled to their own local executives andlegislative assemblies. The jurisdiction ofthe metropolitan authority that will be

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thereby created shall be limited to basicservices requiring coordination. (Sec. 11,Art. X, PC)

NOTE:With the passage of RA 7924,

Metropolitan Manila was declared as a

special development and administrativeregion and the administration ofmetrowide basic services affecting theregion was placed under a developmentauthority referred to as the MetropolitanManila Development Authority (MMDA),whose functions were without prejudice tothe autonomy of the affected localgovernment units. The law does not grantpolice nor legislative powers to MMDA.Even the Metro Manila Council, thegoverning board of the MMDA, has not beendelegated any legislative power. Clearly,

MMDA is not a political unit. There is nogrant of authority to enact ordinances andregulations for the general welfare of theinhabitants of the metropolis. MMDA cannotopen for public use a private road in aprivate subdivision (MMDA vs. Bel-AirVillage Association, Inc., G.R. No.135962, March 27, 2000).

9. Attack against invalidity ofincorporation

No collateral attack shall lie; aninquiry into the legal existence of a

municipal corporation is reserved to theState in a proceeding for quo warranto orother direct proceeding. But this ruleapplies only when the municipal corporationis, at least, a de facto municipal corporation.

10. PLEBISCITE REQUIREMENT: Whoshall participate

Sec. 10 of the LGC provides that thecreation, division and merger, abolition orsubstantial alteration of the boundaries oflocal government units must be approvedby a majority of votes cast in a plebiscite in

the political unit or units directly affected.Such plebiscite shall be conducted by theCOMELEC within 120 days from the date ofthe effectivity of the law. The completion ofthe publication of the law should be thereckoning point in determining the 120-dayperiod within which to conduct theplebiscite, not from the date of its approvalwhen the law had not yet been published.Since publication is indispensable for theeffectivity of a law, a plebiscite can bescheduled only after the law creating a citytook effect. (Cawaling vs. COMELEC, Oct.

26, 2002)The plebiscite for the creation of anew province or municipality shall includethe participation of the residents of themother province or mother municipality inorder to conform to the constitutionalrequirement. (Padilla vs. COMELEC, 214SCRA 735)

In the conversion of a municipalityinto a component city, however, only theregistered voters of the municipality sought

to be converted into a component city, shallparticipate in the plebiscite.

Summary of Substantive Requirementsin the Creation of LGUs

LGU

Created Income

Populati

on

Land

area

Barangay

Nominimumrequirem

ent

2,000but

5,000for

MetroManila

andhighly

urbanized cities

Nominimumrequirem

ent

Municipality

P2.5million

25,000,and

50 sq.km

Component City

P100million

150,000or

100sq.km.

HighlyUrbanize

d City

P50million

200,000

Nominimumrequirem

ent

ProvinceP20

million250,000

or2,000sq.km.

11. Beginning of Corporate ExistenceWhen a new local government unit is

created, its corporate existence shallcommence upon the election andqualification of its chief executive and amajority members of the Sanggunian,unless some other date is fixed therefore bylaw or ordinance creating it. (Sec.14, LGC)

12. Division and Merger of LGUsThe division and merger of local

government units shall comply with thesame requirements for their creation. Theincome, population or land area shall not bereduced to less than the minimumrequirements. Likewise, the incomeclassification of the original localgovernment unit shall not fall below itscurrent income classification prior to suchdivision. (Sec.8, LGC)

13. Abolition of LGUsA local government unit may be

abolished when its income, population orland area has been irreversibly reduced toless than the minimum standards prescribedfor its creation under the LGC, as certifiedby the national agencies to Congress or tothe Sanggunian concerned. Likewise, thelaw or, ordinance abolishing an LGU shall

specify the province, city, municipality, orbarangay with which the local governmentunit sought to be abolished will beincorporated or merged. (Sec.9, LGC)

14. Effects of Annexation/Consolidation of MunicipalCorporations

1. On the legal existence of theterritory annexed- Unlessotherwise provided for by law,

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the annexation of one municipalcorporation to another willdissolve the annexed territory. Itshall become part of theannexing corporation and will fallunder the jurisdiction of thelatter.

2. On the laws and ordinances ofthe annexed corporation- In theabsence of any provision of lawto the contrary, when a territoryis annexed to a municipalcorporation, it shall becomesubject to all the laws andordinances by which theannexing corporation isgoverned.

3. On the right of officers oremployees of the annexed orconsolidated territory to continue

to hold their offices- Subject towhat the legislature may provideupon annexation, the officersand employees of the annexedor consolidated territory shallterminate their official relationwith their offices.

4. On the title to the property of theannexed territory- When amunicipal corporation is annexedto another, the annexingterritory shall acquire title to theproperty of the annexed territory

at the time of annexationwithout compensation unless theannexing statute providesotherwise. Where the annexedterritory, however, forms part ofa municipality from which it istaken, the legislature mayprovide for the payment ofcompensation for theindebtedness incurred onaccount of the property taken.

With regard to publicbuildings and improvements

located in the annexedterritory, the annexing territoryis not required to pay for saidbuildings or improvements asthey have already been paid forby the annexed territory. Itwould be otherwise if thereexists an indebtedness on saidbuildings in which case, theannexing state may be requiredto share in the payment of saidindebtedness.

5. On the debts and obligations of

the annexed territory- It hasbeen stated that debts andobligations of a municipalcorporation contracted before itsannexation to another territoryshall be assumed by theannexing territory in the absenceof any provision to the contrary.

The same rule applies ofconsolidation where theconsolidating municipalcorporation is held responsible

for the indebtedness andobligations incurred by theterritories which areconsolidated.

15. Effects of Division of LGUsOn the legal existence of the original

corporation: The division of municipalcorporation extinguishes the corporateexistence of the original municipality.

On the property, powers and rightsof the original corporation: Unless the lawprovides otherwise, when a municipalcorporation is divided into two or moremunicipalities, each municipality acquirestitle to all the property, powers, rights andobligations falling within its territorial

jurisdiction.

IV. GENERAL POWERS AND ATTRIBUTESOF LGUsA. Powers in general

1. Sources:a. Sec. 25, Art II: Secs. 5,6 and 7, Art. X,

Philippine Constitutionb. Statutes, e.g., R.A. 7160c. Charter (particularly of cities)

d. Doctrine of the right of self-government, but applies only in Stateswhich adhere to the doctrine.

2. Classifications:a. Express, implied and inherent

b. Public or governmental, private orproprietary

c. Intramural or extramurald. Mandatory and directory, ministerial

and discretionary

3. Execution of powers:a. Where the statute prescribes the

manner of exercise, the procedure must befollowed.

b. Where the statute is silent, localgovernment units have discretion to selectreasonable means and methods of exercise.

B. GOVERNMENTAL POWERS:1. General Welfare Clause- the statutorygrant of police power to local governmentunits.Limitations:

a. Express grant by lawb. Exercisable only within the territoriallimits of the LGU, except for protection ofwater supply

c. Equal protection claused. Due process clausee. Must not be contrary to the Constitutionand the laws.

NOTE:A local government unit may

exercise delegated governmental powers:Police power (under the General Welfare

Clause)Power of TaxationPower of Eminent Domain

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a. Requisites for the validity of amunicipal ordinance:

1. Must not contravene the Constitutionand any statute;

2. Must not be unfair or oppressive;3. Must not be partial or discriminatory;4. Must not prohibit, but may regulate

trade which is not illegal per se;5. Must not be unreasonable; and6. Must be general in application and

consistent with public policy.

An ordinance extending burialassistance of P500 to a bereaved familywhose gross income does not exceedP2,000 a month, has been upheld by theSupreme Court as a valid exercise of policepower. This power is organic and flexible.

The care for the poor is generallyrecognized as a public duty. The support forthe poor has long been an acceptedexercise of police power in the promotion ofcommon good. The police power of amunicipal corporation is broad andcommensurate with the duty to provide forthe real needs of the people in their health,safety, comfort, and convenience asconsistently as may be with private rights.It extends to all the great public needs andin a broad sense includes all legislation andalmost every function of the municipalgovernment. (Binay vs. Domingo, 201

SCRA 508)

2. Basic Services and Facilities:17, LGC(a) Local government units

shall endeavor to be self-reliant and shallcontinue exercising the powers anddischarging the duties and functionscurrently vested upon them. They shall alsodischarge the functions and responsibilitiesof national agencies and offices devolved tothem pursuant to this Code. Localgovernment units shall likewise exercise

such other powers and discharge such otherfunctions and responsibilities as arenecessary, appropriate, or incidental toefficient and effective provision of the basicservices and facilities enumerated under theCode.

Devolution refers to the act by which the national government confers powers andauthority upon the various local governmentunits to perform specific functions andresponsibilities. This includes the transferto the local government units of the records,

equipment and other assets and personnelof national agencies and offices.

3. Power to generate and applyresources (18, LGC)

The exercise by local governments ofthe power to tax is ordained by the presentConstitution (5, Art. X, Phil. Constitution).Only guidelines and limitations that may beestablished by Congress can define andlimit such power of local governments. Butlocal governments have no power to tax

instrumentalities of the NationalGovernment. PAGCOR being aninstrumentality of the National Governmentis therefore exempt from local taxes.(Basco vs. PAGCOR, 197 SCRA 52)

Main Sources of Revenues of LGUs

A. Under the Constitution1. taxes, fees and charges (5,

Art. X)2. share in the national taxes-

Internal Revenue Allotment

3. share in the proceeds of theutilization and developmentof the national wealth withintheir areas (7, Art. X)

B. Under the Local Government Code1. floating of bonds2. grants/aids

All LGUs are empowered to create theirown sources of revenue and to levy taxes,fees and charges subject to the provisionson local taxation consistent with the basicpolicy of local autonomy. The Sanggunianconcerned through an ordinance has thepower to impose a tax, fee or charge. Theprocedural requirements of public hearingand publication must be observed forpurposes of compliance with therequirements of due process.

C. Fundamental Principles on Local

taxation1. Taxation shall be uniform in each

local government unit;2. Taxes, fees, charges and other

impositions shall:a. be equitable and based as far as

practicable on the taxpayers abilityto pay;

b. be levied and collected only forpublic purposes;

c. not be unjust, excessive, oppressiveor confiscatory;

d. not be contrary to law, public policy,

national economic policy, or inrestraint of trade.

3. The collection of taxes, fees, chargesand other impositions shall in nocase be let to any private persons;

4. The revenue collected pursuant tothe provisions of the LGC shall inuresolely to the benefit of, and besubject to disposition by, the localgovernment unit levying the tax, fee,charge or other imposition unlessotherwise specifically providedherein; and

5. Each local government unit shall, asfar as practicable, evolve aprogressive system of taxation.

NOTES:Shares of LGUs in the proceeds ofnational taxes

The share of the LGU in InternalRevenue Taxes is 40%. The 40% IRA isallocated to LGUs as follows: for provincesand cities- 23%; for municipalities- 34%; forbarangays- 20%.

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No less than 20% of the IRA isallotted for development project by the localunit from the IRA.

Shares in National Wealth40% of the gross collection from

mining taxes, royalties, forestry and fishery

charges, and from each share in any jointeffort in utilizing and developing thenational wealth within the LGUs jurisdictionand shall be remitted without need forfurther action to the local treasurer on aquarterly basis within five days after theend of every quarter.

LGUs shall receive 1% of the grosssale or receipts of the preceding calendaryear and 40% of taxes, fees or charges thatGOCCs would have paid if not tax exempt,whichever is higher.

How National Wealth is DistributedIf the national wealth is located in

one province, the province shall receive20%, the component city/municipality shallreceive 45% and the barangays 35%.

If the national wealth is located in twoor more LGUs, distribution shall be based onthe following: population- 70% and landarea- 30%.

If the national wealth is located inhighly urbanized city or independentcomponent city, the HUC or ICC shallreceive 65% and the barangays shall

receive 35%.

D. Fundamental Principles ofLocal Fiscal Administration

1. No money shall be paid out of thelocal treasury except in pursuance of anappropriation ordinance or law;

2. Local government funds andmonies shall be spent solely for publicpurposes;

3. Local revenue is generated onlyfrom the sources expressly authorized bylaw or ordinance, and collection thereof

shall at all times be acknowledged properly;4. All monies officially received by

a local government officer in any capacity oron any occasion shall be accounted for aslocal funds, unless otherwise provided bylaw;

5. Trust funds in the local treasuryshall not be paid out except in fulfillment ofthe purpose for which the trust is created orthe funds received.

6. Every officer of the localgovernment unit whose duties permit orrequire the possession or custody of local

funds shall be properly bonded, and suchofficer shall be accountable and responsiblefor said funds and for the safekeepingthereof in conformity with the provisions oflaw.

7. Local governments shallformulate sound financial plans, and thelocal budgets shall be based on functions,activities and projects, in terms of expectedresults.

8. Local budget plans and goalsshall, as far as practicable, be harmonized

with national development plans, goals andstrategies in order to optimize the utilizationof resources and to avoid duplication in theuse of fiscal and physical resources.

9. Local budgets shall operationalizeapproved development plans.

10. Local government units shall

ensure that their respective budgetsincorporate the requirements of theircomponent units and provide for equitableallocation of resources among thesecomponent units.

11. National planning shall be basedon local planning to ensure that the needsand aspirations of the people as articulatedby the local government units in theirrespective local development plans areconsidered in the formulation of budgets ofnational line agencies or offices.

12. Fiscal responsibility shall be

shared by all those exercising authority overthe financial affairs, transactions, andoperations of the local government units.

13. The local government unit shallendeavor to have a balanced budget in eachfiscal year of operation.

4. Eminent Domain (19, LGC)

The power to expropriate privateproperty has been delegated by Congress toLGUs under 19, LGC. The exercise by LGUs

of the power of eminent domain are subjectto the usual constitutional limitations suchas necessity, private property, taking, publicuse, just compensation and due process oflaw.

The determination of whether there isgenuine necessity for the exercise of thepower of eminent domain is a justiciablequestion when exercised by the LGUs andgenerally a political question whenexercised by Congress.

NOTE:

Private property already devoted to publicuse can still be a subject of expropriation byCongress but not by LGUs.

The additional limitations on theexercise of the power of eminent domain byLGUs are, as follows:1. Exercised only by the local chiefexecutive, acting pursuant to a validordinance;2. For public use or purpose or welfare, forthe benefit of the poor and the landless;3. Only after a valid and definite offer had

been made to, and not accepted by, theowner;4. An LGU shall file a complaint forexpropriation on the strength of anordinance and not a mere resolution passedby the Sanggunian. (Municipality ofParanaque vs. VM Realty Corp., 292 SCRA676)

The promulgation of the ordinanceauthorizing the local chief executive toexercise the power must be promulgated

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prior to the filing of the complaint foreminent domain with the proper court, andnot after the court shall have determinedthe amount of just compensation to whichthe defendant is entitled. (Heirs ofSuguitan vs. City of Mandaluyong, 328SCRA 137)

NOTE:An LGU may immediately take possessionof the property upon filing of expropriationproceedings and deposit in court of 15% ofthe FMV of the property.5. Other powers

a. Reclassification of lands (20,RA 7160)

A city or municipality may,through an ordinance passed afterconducting public hearings for the

purpose, may authorize thereclassification of agricultural landsand provide for the manner of theirutilization or their disposition:

i. When the land ceases to beeconomically feasible andsound for agriculturalpurposes as determined bythe Department of Agriculture;

ii. Where the land shall havesubstantially greater economicvalue for residential, commercialor industrial purposes as

determined by the sanggunian;provided that such reclassificationshall be limited to the followingpercentage of the totalagricultural land area at the timeof the passage of the ordinance:

for highly urbanized cities and independent component cities:15%for component cities and 1 st to

3rd class municipalities: 10%for 4 th and 6th class

municipalities: 5%

Provided that agricultural land distributedto land reform beneficiaries shall not beaffected by such reclassification.

b. Closure and opening of roads(21, RA 7160)

A local government unit may,pursuant to an ordinance, permanent ortemporarily close or open any local road,alley, park, or square falling within its

jurisdiction, provided that in case of

permanent closure, such ordinance must beapproved by at least 2/3 of all the membersof the sanggunian, and when necessary,and adequate substitute for the publicfacility shall be provided.

NOTE:Additional limitations in case of permanentclosure:

i. Adequate provision for themaintenance of public safety must be made;

ii. The property may be used orconveyed for any purpose for whichother real property may be lawfullyused or conveyed, but no freedompark shall be closed permanentlywithout provision for its transfer orrelocation to a new site.

Temporary closure may be made during anactual emergency, fiesta celebrations,public rallies, etc.

c. Naming of LGUs, publicplaces, streets and structures

1. Provinces- The sangguniangpanlalawigan may change the name of thefollowing within its territorial jurisdiction:

i. Component cities andmunicipalities, upon therecommendation of the sangguniang

concerned;ii. Provincial roads, avenues,

boulevards, thoroughfares and bridges;iii. Public vocational or

technical schools and other postsecondary and tertiary schools;

iv. Provincial hospitals, healthcenters, and other health facilities;and

v. Any other public place orbuilding owned by the provincialgovernment.

2. Highly Urbanized andIndependent Component Cities- Thesanggunians of HUCs and ICCs may changethe name of the following within itsterritorial jurisdiction:

i. City barangays, upon therecommendation of the sangguniangbarangay concerned;

ii. City roads, avenues,boulevards, thoroughfares, andbridges;

iii. Public elementary,secondary and vocational or

technical schools, communitycolleges and non-chartered colleges;

iv. City hospitals, healthcenters and other health facilities;and

v. Any other public place orbuilding owned by the citygovernment.

3. Component Cities andMunicipalities- The sanggunians ofcomponent cities and municipalities maychange the name of the following within its

territorial jurisdiction:i. City and municipalbarangays, upon recommendation ofthe sangguniang barangayconcerned;

ii. City, municipal andbarangay roads, avenues,boulevards, thoroughfares, andbridges;

iii. City and municipal publicelementary, secondary and

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vocational or technical schools, post-secondary and other tertiary schools;

iv. City and municipalhospitals, health centers and otherhealth facilities; and

v. Any other public place orbuilding owned by the municipal

government.

NOTES:None of the foregoing local government

units, institutions, places, or buildings shallbe named after a living person, nor may achange of name be made unless for a

justifiable reason and, in any case, notoftener than once every ten years. Thename of a local government unit or a publicplace, street or structure with historical,cultural, or ethnic significance shall not bechanged, unless by a unanimous vote of the

sanggunian concerned and in consultationwith the Philippine Historical Commission.

A change of name of a public school shall be made only upon the recommendation ofthe local school board concerned.

A change of name of public hospitals, health centers, and other health facilitiesshall be made only upon therecommendation of the local health boardconcerned.

The change of name of any local government unit shall be effective onlyupon ratification in a plebiscite conductedfor the purpose in the political unit directlyaffected.In any change of name, the Office of the

President, the representative of thelegislative district concerned, and theBureau of Posts shall be notified. (13, LGC)

d. Settlement of boundarydisputes (118 a-d, RA 7160):

Boundary disputes between

and among local government unitsshall, as much as possible, be settledamicably. To this end:

a. Boundary disputesinvolving two or morebarangays in the samecity or municipalityshall be referred forsettlement to thesangguniangpanlungsod orsangguniang bayanconcerned.

b. Boundary disputesinvolving two or moremunicipalities withinthe same province shallbe referred forsettlement to thesangguniangpanlalawiganconcerned.

c. Boundary disputesinvolving municipalitiesor component cities of

different provincesshall be jointly referredfor settlement to thesanggunians of theprovinces concerned.

d. Boundary disputesinvolving a component

city or municipality onthe one hand and ahighly urbanized cityon the other, or two ormore highly urbanizedcities, shall be jointlyreferred for settlementto the respectivesanggunians of theparties.

Procedure:In the event the sanggunian fails to

effect an amicable settlement within 60

days from the date the dispute was referredthereto, it shall issue a certification to thateffect. Thereafter, the dispute shall beformally tried by the sanggunian concernedwhich shall decide the issue within 60 daysfrom the date of the certification referred toabove.

Within the time and mannerprescribed by the Rules of Court, any partymay elevate the decision of the sanggunianconcerned, any party may elevate thedecision of the sanggunian concerned to theproper Regional Trial Court having

jurisdiction over the area in dispute. TheRegional Trial Court shall decide the appealwithin one (1) year from the filing thereof.Pending final resolution of the case, thedisputed area prior to the dispute shall bemaintained and continued for all legalpurposes. (119, LGC)

e. Authority over police units(6, Art. XVI, Philippine Constitution)

The State shall establish andmaintain one police force, which shall benational in scope and civilian in character,

to be administered and controlled by aNational Police Commission. The authorityof local executives over the police units intheir jurisdiction shall be provided by law.

6. LOCAL LEGISLATIVE POWERA. Products of legislative action

1. Ordinance- prescribes arule of conduct.

2. Resolution- of temporarycharacter, or expresses sentiment.

B. Requisites for validity:

1. Must not contravene theConstitution and any statute2. Must not be unfair or

oppressive3. Must not be partial or

discriminatory4. Must not prohibit, but may

regulate trade5. Must not be unreasonable6. Must be general in

application and consistent withpublic policy.

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Approval of ordinances:Ordinances passed by the

sangguniang panlalawigan, sangguniangpanlungsod or sangguniang bayan shall beapproved:If the local chief executive approves thesame, affixing his signature on each andevery page thereof.If the local chief executive vetoes the same,and the veto is overridden by 2/3 vote of allthe members of the sanggunian.

Where petitioner was charged withfalsification of a public document forapproving a resolution which purportedlyappropriated money to pay for the terminalleave of 2 employees when actually no suchresolution was passed, the petitioner arguedthat his signature on the resolution was

merely ministerial. The Supreme Courtdisagreed, saying that the grant of the vetopower accords the Mayor the discretionwhether or not to approve the resolution.(De Los Reyes vs. Sandiganbayan, G.R.121215, Nov. 13, 1997)

NOTES:

1. The vice governor, the vice mayor andthe punong barangay shall be the presidingofficer of the sanggunians but shall vote

only in case of tie.

2. In case of inability of the presidingofficer, the members shall elect a temporarypresiding officer from among themselves.(49)

3. For disorderly behavior and absencewithout justifiable cause for 4 consecutivesessions, a member may be censured,reprimanded, excluded from the session,suspended for not more than 60 days, orexpelled. Suspension or expulsion shall

require concurrence of at least 2/3 of allsanggunian members. A membersentenced by final judgment toimprisonment for at least one year for acrime involving moral turpitude shall beautomatically expelled. (50)

4. Every sanggunian member, uponassumption of office shall make a fulldisclosure of his business and financialinterests. He shall also disclose anybusiness, financial or professionalrelationship or any relationship within the 4th

degree which he may have with anyoneaffected by any ordinance or resolution ofthe sanggunian which involves a conflict ofinterests. Such relationship includes:

i. Investment in the entity to whichthe ordinance may apply

ii. Contracts with any person towhich the ordinance may apply

Conflict of interests refers to asituation where a sanggunian member maynot act in the public interest due to personal

consideration that may affect his judgmentto the prejudice of the public. (51)

5. A special session may be called by thelocal chief executive or a majority of thesanggunian members. Unless concurred inby 2/3 vote of the members present, no

matter may be reconsidered at the specialsession except those stated in the notice.(52)6. A majority of all the members of thesanggunian shall constitute a quorum. (53)

7. An ordinance shall be approved by thelocal chief executive by affixing hissignature in each and every page thereof.

8. The governor or mayor may veto anyitem in the following cases:

a. Particular item or items in an

appropriations ordinanceb. Ordinance adopting a local

development plan and publicinvestment program

c. Ordinance directing the payment ofmoney or creating liability. (55)

9. The grounds for veto are:a. The ordinance is ultra viresb. Or that it is prejudicial to public

welfare

10. The veto shall be communicated to the

sanggunian within 15 days in the case of aprovince and 10 days in the case of a city ormunicipality; otherwise, the ordinance shallbe deemed approved, as if he signed it. Thesanggunian may override the veto by 2/3 ofall its members. (54)

11. Ordinances enacted by thesangguniang barangay shall, upon approvalby a majority of all its members, be signedby the Punong Barangay. The latter has noveto power.

12. Reviewa. The sangguniang panlalawigan shall

review ordinances and resolution ofcities and municipalities todetermine if they are within theirpower. (56)Procedure:

Within 3 days after approval,the secretary of the sangguniangpanlungsod (in component cities) orsangguniang bayan shall forward tothe sangguniang panlalawigan forreview copies of approved

ordinances and resolutions approvingthe local development plans andpublic investment programsformulated by the local developmentcouncils. The sangguniangpanlalawigan shall review the samewithin 30 days; if it finds that theordinance or resolution is beyond thepower conferred upon thesangguniang panlungsod orsangguniang bayan concerned, itshall declare such ordinance or

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resolution invalid in whole or in part.If no action is taken within 30 days,the ordinance or resolution ispresumed consistent with law, andtherefore, valid.

b. The sangguniang panlungsod or

bayan shall review sangguniangbarangay ordinances to determine ifthey are lawful. (57)

Procedure:Within 10 days from enactment, the

sangguniang barangay shall furnishcopies of all barangay ordinances to thesangguniang panlungsod orsangguniang bayan for review. If thereviewing sanggunian finds thebarangay ordinances inconsistent withlaw or city or municipal ordinances, the

sangguniang concerned shall, within 30days from receipt thereof, return thesame with its comments andrecommendations to the sangguniangbarangay for adjustment, amendment ormodification, in which case the effetivityof the ordinance is suspended until therevision called for is effected. If noaction is taken by the sangguniangpanlungsod or sangguniang bayanwithin 30 days, the ordinance is deemedapproved.

13. Enforcement of disapprovedordinances/resolutions:

Any attempt to enforce an ordinanceor resolution approving the localdevelopment plan and public investmentprogram, after the disapproval thereof, shallbe sufficient ground for the suspension ordismissal of the official or employeeconcerned.

14. Effectivitya. Unless otherwise stated in the

ordinance, it shall take effect after

10 days from posting at theprovincial capitol or city, municipal orbarangay hall and two otherconspicuous places.

b. The gist of all ordinances with penalsanction shall be published in anewspaper of general circulation inthe province. In the absence of suchnewspaper, the ordinance shall beposted in all municipalities and citiesof the province where thesanggunian of origin is situated.

c. In highly urbanized and independent

component cities, in addition toposting, the main features of theordinance shall be published in alocal newspaper of generalcirculation. In the absence of suchnewspaper, it shall be published inany newspaper of generalcirculation. (59

C. Corporate Powers (22, RA 7160)1. To have continuous succession in itscorporate name

2. To sue and be sued3. To have and use a corporate seal4. To acquire and convey real or personalproperty

a. The local government unit mayacquire real or personal, tangibleor intangible property, in any

manner allowed by law, e.g.,sale, donation, etc.

b. The local government unit mayalienate only patrimonialproperty, upon proper authority.

c. In the absence of proof that theproperty was acquired throughcorporate or private funds, thepresumption is that it came fromthe State upon the creation of themunicipality and, thus, isgovernmental or public property.(Salas vs. Jarencio, 48 SCRA734; Rebuco vs. Villegas, 55SCRA 656)

d. Town plazas are properties ofpublic dominion; they may beoccupied temporarily, but only forthe duration of an emergency(Espiritu vs. MunicipalCouncil of Pozorrubio,Pangasinan, 102 Phil. 866).

e. A public plaza is beyond thecommerce of man, and cannot bethe subject of lease or other

contractual undertaking. And,even assuming the existence of avalid lease of the public plaza orpart thereof, the municipalresolution effectively terminatedthe agreement, for it is settledthat the police power cannot besurrendered or bargained awaythrough the medium of a contract(Villanueva vs. Castaneda,154 SCRA 142).

5. Power to enter into contractsa. Requisites of a valid municipal

contractsi. The local government unit

has the express, implied orinherent power to enterinto the particular contract.

ii. The contract is enteredinto by the properdepartment, board,committee, officer oragent. Unless otherwiseprovided by the Code, nocontract may be enteredinto by the local chiefexecutive on behalf of thelocal government unitwithout prior authorizationby the sangguniangconcerned.

iii. The contract must complywith certain substantiverequirements, i.e., whenexpenditure of public fundis to be made, there mustbe an actual appropriation

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and a certificate of availability of funds.

iv. The contract must complywith the formalrequirements of writtencontracts, e.g., the Statuteof Frauds.

b. Ultra vires contractsWhen a contract is entered into

without compliance with the first andthe third requisites (above), the sameis ultra vires and is null and void.Such contract cannot be ratified orvalidated. Ratification of defectivemunicipal contracts is possible onlywhen there is non-compliance withthe second and/or fourthrequirements above. Ratificationmay be express or implied.

c. Authority to negotiate and securecontracts (23, RA 7160)

The local chief executive may,upon authority of the sanggunian,negotiate and secure financial grantsor donations in kind, in support of thebasic services and facilitiesenumerated under 17, from localand foreign assistance agencieswithout necessity of securingclearance or approval from anydepartment, agency, or office of thenational government or from any

higher local government unit;Provided, that projects financed bysuch grants or assistance withnational security implications shallbe approved by the national agencyconcerned.

6. To exercise such other powers asare granted to corporations, subject tolimitations provided in the Code andother laws.

V. MUNICIPAL LIABILITY

A. Specific provisions making LGUsliable:

a. 24, RA 7160- Liability for damages-Local government units and theirofficials are not exempt from liabilityfor death or injury to persons ordamage to property.

b. Art. 2189, NCC- The localgovernment unit is liable in damagesfor death or injuries suffered byreason of the defective condition of

roads, streets, bridges, publicbuildings and other public works.

c. Art. 2180, (par.6), NCC- The State isresponsible when it acts through aspecial agent.

d. Art. 34, NCC- The local governmentunit is subsidiarily liable for damagessuffered by a person by reason of thefailure or refusal of a member of thepolice force to render aid andprosecution in case of danger to lifeand property.

2. Liability for Tort

a. If the local government unit isengaged in governmental functions, itis NOT liable.

b. If engaged in proprietary functions,local government unit is liable.Holding of town fiesta is a

proprietary function. The Municipalityof Malasique, Pangasinan, was heldliable for the death of a member ofthe zarzuela group when the stagecollapsed, under the principle ofrespondeat superior.

NOTE:The municipal council managed the

town fiesta. While the municipality was heldliable, the councilors themselves are notliable for the negligence of their employeesor agents. (Torio vs. Fontanilla, 85 SCRA599)

c. Personal Liability of local officials

3. Liability for violation of law

Case:The Municipality of Bunawan, Agusan

del Sur, through the Mayor, was held incontempt and fined P1,000.00 with awarning, because of the refusal of the Mayorto abide by a Temporary Restraining Order

issued by the Court (Moday vs. CA, 243SCRA 152).

4. Liability for contracts

a. General Rule- A municipalcorporation, like an ordinary person,is liable on a contract it enters into,provided that the contract is intravires. If the contract is ultra vires,the munipal corporation is not liable.

NOTES:A private individual who deals with a

municipal corporation is imputedconstructive knowledge of the extent ofthe power or authority of the municipalcorporation to enter into contracts.Ordinarily, therefore, the doctrine of

estoppel does not lie against municipalcorporation.

b. Doctrine of Implied MunicipalLiability- A municipality maybecome obligated upon an impliedcontract to pay the reasonable valueof the benefits accepted orappropriated by it as to which it hasthe general power to contract(Province of Cebu vs. IAC, 147SCRA 447).

The doctrine applies to all caseswhere money or property of a party isreceived under such circumstancesthat the general law, independent ofan express contract, implies anobligation to do justice with respectto the same.

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Thus, in this case, the Province ofCebu cannot set up the plea that thecontract was ultra vires and stillretain benefits thereunder. Havingregarded the contract as valid forpurposes of reaping benefits, theProvince of Cebu is estopped to

question its validity for the purpose ofdenying answerability.

VI. LOCAL OFFICIALS

A. Provisions applicable to electiveand appointive officials 1. 89, RA 7160: Prohibitedbusiness and pecuniary interest- It shallbe unlawful for any local government officialor employee, directly or indirectly, to:

a. Engage in any business transaction

with the local government unit inwhich he is an official or employeeor over which he has the power ofsupervision, or with any of itsauthorized boards, officials, agents,or attorneys, whereby money is tobe paid, or property or any otherthing of value is to be transferred,directly or indirectly, out of theresources of the local governmentunit to such person or firm;

b. Hold such interests in any cockpit orother games licensed by a local

government unit;c. Purchase any real estate or other

property forfeited in favor of suchlocal government unit for unpaidtaxes or assessment, or by virtue ofa legal process at the instance ofthe said local government unit;

d. Be a surety for any personcontracting or doing business withthe local government unit for whicha surety is required; and

e. Possess or use any public propertyof the local government unit for

private purposes.f. The prohibitions and inhibitions

prescribed in RA 6713 also apply.

2. Practice of Profession (90, RA7160)

a. Governors or mayors are prohibitedfrom practicinstrative proceedingsinvolving the local government unitof which he is an official.iv. Use property and personnel ofthe government except when thesanggunian member is defending

the interest of the government.

Case:It was held that by appearing as

counsel for dismissed employees, CityCouncilor Javellana violated the prohibitionagainst engaging in private practice if suchpractice represents interests adverse to thegovernment. (Javellana vs. DILG, 212SCRA 475)

b. Physicians may practice theirprofession even during office hours

only on emergencies and withoutmonetary compensation.

3. Prohibition against appointment(94, RA 7160)

a. No elective or appointive localofficial shall be eligible for

appointment or designation to anypublic office during his tenure.

b. Unless otherwise allowed by law orby the primary function of his office,no elective or appointive localofficial shall hold any other office.

c. Except for losing candidates inbarangay elections, no candidatewho lost in any election should beappointed to any office within oneyear after election.

B. ELECTIVE LOCAL OFFICIALS

1. Qualifications:a. Common qualifications:

i. Filipino Citizenii. Registered voter of the localgovernment unit, or of the districtwhere he intends to be elected in thecase of the members of thesanggunian.iii. Resident therein for at least oneyear immediately before the electioniv. Ability to read and write Filipino orany other local dialect.

b. Agei. Candidates in provinces and highlyurbanized cities- at least 23 years oldii. Candidates for mayor and vicemayor of component cities andmunicipalities- at least 21 years oldiii. Candidates for sanggunianmembers in component cities andmunicipalities- at least 18 years oldiv. Barangay officials- at least 18years oldv. Sangguniang Kabataan- at least15-21 years

NOTES:Age- must be possessed on the day of the

election.The LGC does not specify any particular date when the candidate must possessFilipino citizenzship. Philippine citizenship isrequired to ensure that no alien shall governour people. An official begins to govern onlyupon his proclamation and on the day thathis term begins. Since Frivaldo took hisoath of allegiance on June 30, 1995, whenhis application for repatriation was granted

by the Special committee on Naturalizationcreated under PD 825, he was thereforequalified to be proclaimed. Besides, 39 ofthe LGC speaks of qualifications of electiveofficials, not of candidates (Frivaldo vs.COMELEC, 271 SCRA 767).

Petitioner was over 21 years of age on the day of the election was ordered disqualifiedby the Supreme Court when the latterrejected the contention of the petitionerthat she was qualified because she was less

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than 22 years old. The phrase not morethan 21 years old is not equivalent to lessthan 22 years old (Garvida vs. Sales).

2. Disqualifications (40, RA 7160)- Thefollowing are disqualified from running forany elective local position:

a. Those sentenced by finaljudgment for an offense involvingmoral turpitude or for an offensepunishable by one year or moreof imprisonment, within twoyears after serving sentence;

b. Those removed from office as aresult of an administrative case;

c. Those convicted by finaljudgment for violating the oath ofallegiance to the Republic;

d. Those with dual citizenship;e. Fugitives from justice in criminal

or non-political cases here orabroad;

f. Permanent residents in a foreigncountry or those who haveacquired the right to resideabroad and continue to avail ofthe same right after theeffectivity of the Code; and

g. The insane or feeble-minded.

3. Manner of Electiona. The governor, vice-governor,

city or municipal mayor, city or

municipal vice-mayor andpunong barangay shall beelected at large in theirrespective units. Thesangguniang kabataan chairmanshall be elected by theregistered voters of thekatipunan ng kabataan.

b. The regular members of thesangguniang panlalawigan,panlungsod and bayan shall beelected by district, as may beprovided by law. The presidents

of the leagues of sanggunianmembers of component citiesand municipalities shall serve asex officio members of thesangguniang panlalawiganconcerned. The presidents ofthe liga ng mga barangay andthe pederasyon ng mgasangguniang kabataan electedby their respective chapters,shall serve as ex officiomembers of the sangguniangpanlalawigan, panlungsod or

bayan.c. In addition, there shall be onesectoral representative from thewomen, one from the workers,and one from any of thefollowing sectors: urban poor,indigenous culturalcommunities, disabled persons,or any other sector as may bedetermined by the sanggunianconcerned within 90 days priorto the holding of the next local

elections as may be provided bylaw. The Comelec shallpromulgate the rules andregulations to effectivelyprovide for the election of suchsectoral representatives.

4. Date of ElectionEvery three years on the second

Monday of May, unless otherwise providedby law.

5. Term of OfficeThree years, starting from noon of

June 30, 1992, or such date as may beprovided by law, except that of electivebarangay officials. No local elective officialshall serve for more than three consecutiveterms in the same position. The term ofoffice of barangay officials and members of

the sangguniang kabataan shall be for fiveyears, which shall begin after the regularelection of barangay officials on the secondMonday of May, 1997. (R.A. 8524)

The three-term limit on a local official is to be understood to refer to terms for whichthe official concerned was elected. Thus, aperson who was elected Vice Mayor in 1988and who, because of the death of the Mayor,became Mayor in 1989, may still be eligibleto run for the position of Mayor in 1998,even if elected as such in 1992 and 1995

(Borja v. Comelec, G.R. No. 133495,Sept. 3, 1998).

6. Rules on Succession (44-46, RA7160)

A. Permanent vacancies: Apermanent vacancy arises when anelective local official fills a higher vacantoffice, refuses to assume office, fails toqualify, dies, is removed from office,voluntarily resigns, or is permanentlyincapacitated to discharge the functionsof his office.

a. Governor and Mayori. Vice Governor and Vice Mayorii. Sanggunian members according toranking

b. Punong barangayi. Highest ranking sanggunianmemberii. Second highest rankingsangguniang barangay member

c. Ranking in the sanggunian shall bedetermined on the basis of theproportion of the votes obtained tothe number of registered votes in

each district.d. Ties will be resolved by drawing oflots. (44)

e. Sanggunian:i. Provinces, highly urbanized citiesand independent component cities-appointment by the Presidentii. Component city and municipality-appointment by governoriii. Sangguniang barangay-appointment by mayor

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iv. Except for the sangguniangbarangay, the appointee shall comefrom the political party of themember who caused the vacancy.

NOTE: A nomination and a certificate of

membership of the appointee from thehighest official of the political partyconcerned are conditions sine qua non, andany appointment without such nominationand certificate shall be null and void andshall be a ground for administrative actionagainst the official concerned.

v. If the member does not belong toany party, the appointee shall berecommended by the sanggunian.vi. The appointee for thesangguniang barangay shall be

recommended by the sangguniangbarangay.vii. Vacancy in the representation ofthe youth and the barangay in thesanggunian shall be filled by theofficial next in rank of theorganization. (45)

B. Temporary vacancya. When the governor, mayor or

punong barangay is temporarilyincapacitated to perform his duties,the vice governor, vice mayor, or

ranking sangguniang barangaymember shall exercise his powersexcept the power to appoint,suspend or dismiss employees,which can only be exercised after 30working days.

b. When the local chief executive istraveling within the Philippines fornot more than 3 consecutive days,he may designate an officer-in-charge. The authorization shallspecify the powers of the officer-in-charge except the power to appoint,

suspend or dismiss employees.c. If the local chief executive does not

issue the authorization, the vicegovernor, vice mayor, or highestranking sangguniang barangaymember shall assume his powers onthe fourth day of his absence. (46)

7. Compensation (81, R.A. 7160)The compensation of local officials and

personnel shall be determined by thesanggunian concerned, subject to theprovisions of R.A. 6758 (Compensation and

Position Classification Act of 1989). Theelective barangay officials shall be entitledto receive honoraria, allowances and otheremoluments as may be provided by law orbarangay, municipal or city ordinance, butin no case less than P1,000 per month forthe punong barangay and P600 for thesangguniang barangay members.

Elective local officials shall be entitled to the same leave privileges as those enjoyed

by appointive local officials, including thecumulation and commutation thereof.

7. Recall- termination of official relationshipof an elective official for loss of confidenceprior to the expiration of his term throughthe will of the electorate.

a. By whom exercised- by theregistered voters of a local governmentunit to which the local elective officialsubject to such recall belongs. (69, R.A.7160)b. Two modes of initiating recall:

i. By a preparatory recall assemblyii. By the registered voters of the

local government unitc. Preparatory recall assembly-

composed of the following:i. Provincial level: All mayors, vice

mayors and sanggunian members ofthe municipalities and componentcities.ii. City level: All punong barangayand sangguniang barangaymembers in the city.iii. Legislative district level: Wheresangguniang panlalalwiganmembers are elected by district, allelective municipal officials in thedistrict; and in cases wheresangguniang panglungsod membersare elected by district, all elective

barangay officials in the district.iv. Municipal level: All punongbarangay and sangguniangbarangay members in themunicipality.

d. Procedure for initiating recall bypreparatory recall assembly

A majority of all the preparatoryrecall assembly members may convene insession in a public place and initiate a recallproceeding against any elective official inthe local government unit concerned.

Recall of provincial, city or municipalofficials shall be validly initiated through aresolution adopted by a majority of all themembers of the preparatory recall assemblyconcerned during its session called for thatpurpose.

Case:It was held that notice to all the

members of the Preparatory RecallAssembly is imperative; thus, where theresolution was adopted without givingnotice to all the members of the PRA, the

same is fatally flawed (Garcia vs.Comelec, G.R. No. 111511, October 5,1993). However, in Malonzo vs.Comelec, G.R. No. 127066, March 11,1997, it was held that where the Comelechas already conducted an investigation andfound the initiatory recall proceedings to bein accord with law, there is no necessity forthe Supreme Court to refer the matter ofthe veracity of the questioned notices backto the Comelec.

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e. Initiation of recall by registeredvoters: Recall of a provincial, city,municipal or barangay official may also bevalidly initiated upon petition by at least25% of the total number of registered votersin the local government unit concernedduring the election in which the local official

sought to be recalled was elected.

f. Procedure:i. A written petition for recall dulysigned before the election registrar orhis representative, and in thepresence of a representative of thepetitioner and representative of theofficial sought to be recalled, and in apublic place in the province, city,municipality or barangay, as the casemay be, shall be filed with theComelec through its office in the local

government unit concerned.ii. The Comelec or its dulyauthorized representative shall causethe publication of the petition in apublic and conspicuous place for aperiod of not less than 10 days normore than 20 days, for the purpose ofverifying the authenticity andgenuineness of the petition and therequired percentage of voters.iii. Upon the lapse of the aforesaidperiod, the Comelec or its dulyauthorized representative shall

announce the acceptance ofcandidates to the position andthereafter prepare the list ofcandidates which shall include thename of the official sought to berecalled.

The elective local official sought to be recalled shall not be allowed to resign whilethe recall process is in progress.Limitations on Recall:

1. Any elective local official may be thesubject of a recall election only once during

his term of office for loss of confidence.2. No recall shall take place within one

year from the date of the officialsassumption to office or one yearimmediately preceding a regular localelection.The official sought to be recalled is automatically a candidate.Recall shall be effective upon the election

and proclamation of successor receiving thehighest number of votes.

9. Resignation of elective local

officials shall be deemed effective onlyupon acceptance by the followingauthorities:

a. The President, in case of governors,vice governors, and mayors and vicemayors of highly urbanized citiesand independent component cities;

b. The governor, in case of municipalmayors and vice mayors, citymayors and vice mayors of component cities;

c. Sanggunian concerned, in case ofsangguniang members; and

d. The city or municipal mayor, in caseof barangay officials.

Effectivity:c. Resignation takes effect upon

acceptance.d. It is deemed accepted if not acted

upon within 15 working days.e. Irrevocable resignation by

sanggunian members takes effectupon presentation before an opensession. (82, R.A. 7160)

10. Grievance Procedure (83, R.A.7160)- The local chief executive shallestablish a procedure to inquire into, actupon, resolve or settle complaints andgrievances presented by local government

employees.

11. Discipline (60-68, R.A. 7160)a. Grounds for disciplinary action:

An elective local official may be disciplined,suspended, or removed from office on anyof the following grounds:

i. Disloyalty to the Republic of thePhilippines.

ii. Culpable violation of theConstitution

iii. Dishonesty, oppression,misconduct in office, gross negligence, or

dereliction of duty.iv. Commission of any offense

involving moral turpitude or an offensepunishable by at least prision mayor.

v. Abuse of authority.vi. Unauthorized absence for 15

consecutive working days, except in thecase of members of the sangguniangpanlalawigan, panlungsod, bayan andbarangay.

vii. Application for, or acquisitionof, foreign citizenship or residence or thestatus Elective barangay officials, shall be

filed before the sangguiniang panlungsod orsangguniang bayan concerned, whosedecision shall be final and executory.

c. Notice of Hearing (62, R.A.7160)- (a) Within 7 days after theadministrative complaint is filed, theOffice of the President or the sanggunianconcerned as the case may be, shallrequire the respondent to submit hisverified answer within 15 days fromreceipt thereof, and commence theinvestigation of the case within 10 days

after the receipt of such answer of therespondent.(b) When the respondent is an

elective official of a province or highlyurbanized city, such hearing andinvestigation shall be conducted in theplace where he renders or holds office.For all other local elective officials, thevenue shall be the place where thesanggunian concerned is located.

(c) However, no investigation shallbe held within 90 days immediately prior

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to any local election, and no preventivesuspension shall be imposed prior to the90-day period immediately precedinglocal election, it shall be deemedautomatically lifted upon the start ofaforesaid period.

d. Preventive Suspension1. Who may impose:

a. By the President, if therespondent is an electiveofficial of a province, a highlyurbanized or an independentcomponent city;

b. By the governor, if therespondent is an elective localofficial of a component city ormunicipality;

c. By the mayor, if therespondent is an elective

official of the barangay. 2. When may be imposed:Preventive suspension may be imposed atany time:

a. After the issues are joined;b. When the evidence of guilt is

strong; andc. Given the gravity of the

offense, there is greatprobability that thecontinuance in office of therespondent could influencethe witnesses or pose a threat

to the safety and integrity ofthe records and otherevidence.

Provided that any single preventive suspension shall not extend beyond60 days, and in the event severaladministrative cases are filed againstthe respondent, he cannot besuspended for more than 90 dayswithin a single year on the sameground or grounds existing andknown at the time of the first

suspension.

Case:When the petitioner failed to file his

answer despite the many opportunitiesgiven to him, he was deemed to havewaived his right to answer and to presentevidence. At that point, the issues weredeemed joined, and it was proper for theExecutive Secretary to suspend him,inasmuch as the Secretary found that theevidence of guilt was strong and thatcontinuance in office could influence the

witnesses and pose a threat to the safetyand integrity of the evidence against him(Joson vs. Torres, 290 SCRA 279).

The authority to preventivelysuspend is exercised concurrently by theOmbudsman, pursuant to R.A. 6770; thesame law authorizes a preventivesuspension of six months (Hagad vs.Gozo-Dadole, G.R. no. 108072, Dec. 12,1995).

e. Suspended elective official whendeemed reinstated

Upon expiration of the preventivesuspension, the respondent shall bedeemed reinstated in office withoutprejudice to the continuation of theproceedings against him, which shall be

terminated within 120 days from the timehe was formally notified of the case againsthim.

Any abuse of the exercise of the power of preventive suspension shall bepenalized as abuse of authority.

f. Salary of respondent pendingsuspension (64, R.A. 7160) The respondent official preventivelysuspended from office shall receive nosalary or compensation during suchsuspension; but, upon subsequent

exoneration and reinstatement, he shall bepaid full salary or compensation includingsuch emoluments accruing during suchsuspension.

g. Rights of respondent (65, R.A.7160) The respondent shall be accordedfull opportunity to appear and defendhimself in person or by counsel, to confrontand cross-examine the witnesses againsthim, and to require the attendance ofwitnesses and the production of

documentary evidence in his favor throughcompulsory process of subpoena orsubpoena duces tecum.

h. Form and notice of decision(66a, R.A. 7160)

The investigation of the case shallbe terminated within 90 days from the startthereof. Within 30 days after the end of theinvestigation, the Office of the President orthe sanggunian concerned shall render adecision in writing stating clearly andistinctly the facts and the reasons for such

decision. Copy of said decision shallimmediately be furnished the respondentand all interested parties.

i. PenaltyThe penalty of suspension imposed

upon the respondent shall not exceed hisunexpired term, or a period of 6 months forevery administrative offense, nor shall saidpenalty be a bar to the candidacy of therespondent as long as he meets thequalifications required for the office. Butthe penalty of removal from office as a

result of an administrative investigationshall be a bar to the candidacy of therespondent for any elective position.

Case:The Supreme Court upheld the

imposition of the administrative penalty ofsuspension of not more than 6 months foreach offense, provided that the successiveservice of the sentence should not exceedthe unexpired portion of the term of thepetitioners. The suspension did not amount

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to removal from office (Salalima vs.Guingona, 257 SCRA 55).

j. Administrative appeal- Decisionsmay, within 30 days from receiptthereof, be appealed to:

i. The sangguniang panlalawigan,

in the case of decisions of component citiessangguniang panlungsod and thesangguiniang bayan;

ii. The Office of the President, inthe case of decisions of the sangguniangpanlalawigan and the sangguniangpanlungsod of highly urbanized cities andindependent component cities. Decisions ofthe Office of the President shall be final andexecutory.

Case:The Supreme Court ruled that

certiorari will not lie because there is still anadequate remedy available in the ordinarycourse of law, i.e., appeal of the decision ofthe Sangguniang Panlalawigan to the Officeof the President(Malinao vs. Reyes, 255SCRA 616).

k. Execution pending appealAn appeal shall not prevent a

decision from being executed; therespondent shall be considered as havingbeen placed under preventive suspensionduring the pendency of the appeal. But in

Berces vs. Executive Secretary, 241 SCRA539, the Supreme Court pointed out thatAdministrative Order No. 18 authorizes theOffice of the President to stay the executionof a decision pending appeal. A.O. No. 18was not repealed by the Local GovernmentCode.

l. Presidential power to grant executiveclemency

m. Effect of re-electionThe re-election of a local official

bars the continuation of the administrative

case against him.

C. Appointive Local Officials1. Responsibility for human resources

and development- The local chief executiveshall be responsible for human resourcesand development in his unit and shall takeall personnel actions in accordance with theConstitution, pertinent laws, including suchpolicies, guidelines and standards as theCivil Service Commission may establish;Provided that the local chief executive mayemploy emergency or casual

summary on private corporations

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