Public Corporation
by
AO Rodolfo M. Elman, CESO lll
Ateneo de Davao Law School
Municipal Corporation
• Definition
• Nature and status
• Elements (legal creation, corporate name,
inhabitants and territory)
• Purposes
• Dual nature and functions (BQ)
• Beginning of corporate existence (Sec. 14
RA 7160)
Creation of Municipal Corp.
• Sec. 10, Art. X ’87 Constitution (’04 BQ)
• Sec. 6, RA 7160
• Limitations for creation
*verifiable indicators of xxx income, population &
land area (Sec. 7 RA 7160)
• 3 conditions for creation of LGU
*must follow criteria fixed in LGC
*must not conflict w/ any Const’l provision
*must conduct a plebiscite in the political unit
affected.
• Kapalong vs. Moya, 166 SCRA 71
• Patricio Tan vs. Comelec, 142 SCRA 727
• Sema vs. Comelec, 16 July ’08
>Sec. 19, Art. Vl of RA 9054, insofar as it grants
to ARMM Regional Assembly the power to
create provinces and cities, is against Sec. 5,
Art. Vl and Sec. 20, Art. X of Constitution.
>Power to create province or city inherently
involves power to create a legislative district.
• Atitiw vs. Zamora, 471 SCRA 330
>CAR not abolished; only a discontinuance of its
programs and activities with the reduction of its
budgetary allocation.
• Alvarez vs. Guingona, 01/31/96
>IRA included in computation of average
annual income of the municipality
• Mariano vs. Comelec, 01/07/95
>Territory must be identified by metes and
bounds to reasonably ascertain the
territorial jurisdiction of newly created LGU
• Settlement of Boundary Dispute (Sec. 118,
RA 7160, ’99BQ)
De Facto Municipal Corp.
• Requisites (’04 BQ)
1. valid law authorizing incorporation; 2.
attempt in good faith to organize under it;
3. colorable compliance with the law; 4.
assumption of corporate powers
• Validity of incorporation and corp.
existence of MC cannot be attacked
collaterally, unless the corporation is an
absolute nullity
• Quo warranto proceeding within 5 years against
validity of incorporation
• Mun. of San Narciso, Quezon vs. Mendez, 239
SCRA 12 (re EO 353 creating Mun. of San
Andres)
• Mun. of Jimenez, Misamis Occ. vs. Baz, 265
SCRA 183 (re EO 258 creating Mun. of
Sinacaban)
• Q. May courts order the dissolution of municipal
corporations?
Legislative Control Over
Municipal Corporations (MCs)
• MCs are under control of legislature subject only
to such limitations as Constitution may impose.
• Limitations on legislative control
• Legislature has complete control over property
acquired by MC in its governmental capacity &
devoted to public governmental use; no control
over property acquired by MC in its private
capacity, except thru police power xxx
• Complete control over public revenues… except
over public funds in w/c creditors or LGU have
already acquired vested right.
• Control over city streets, hospital and capitol
sites etc. but not over public markets and
cemeteries.
• Control over operation of water, light, gas or
other like supply. However, the service and rates
of the public utility may be subject to state
control.
Relation of President to LGUs
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General supervision (Sec. 4 Art. X and
Sec. 16 Art. X, Constitution)
Grounds for Disciplinary Action (Sec. 60 RA
7160) code: D C D C A U A S
Preventive suspension may be issued after
issues are joined (Sec. 63)
Penalty of suspension not a bar to candidacy
of respondent as long as he meets
qualifications; Removal is a bar (Sec. 66)
Execution pending appeal (Sec. 68)
CASES
• When respondent is in default, issues are joined
(Joson vs. Torres, 290 SCRA 279)
• Governor has no power to preventively suspend
city elective officials (Regidor vs. Chiongbian,
173 SCRA 507)
• Proper remedy to challenge SP decision under
Sec. 67 (Malinao vs. Reyes, 255 SCRA 616)
• Stay of execution pending appeal under AO 18
(Berces vs. Guingona & Mayor Corral, 241
SCRA 439)
Local Autonomy
• 2 Kinds of Autonomy
a. Administrative Autonomy (Sec. 2 Art. X)
- transfer of power from the central gov’t
to the LGUs; synonymous with
decentralization of administration
b. Political Autonomy (Sec. 18 Art. X)
- encompasses not only administrative
autonomy but includes power to set up xxx
Police Power
• Not inherent in LGUs; most essential,
insistent and the least limitable of powers;
liberal interpretation of general welfare
clause
• Sec. 16 RA 7160: 2 branches of general
welfare clause
• Requisites for exercise of police power
• Tests of a valid ordinance
Cases
• Opening of road/demolition of gates in BelAir (Sangalang vs. IAC, 176 SCRA 720)
• Ordinance legalizing occupancy by
squatters of public lands (Baguio Citizens
Action vs. City Council, 121 SCRA 370)
• Memorial parks to set aside 6% of their
cemetery for charity burial (QC vs. Ericta,
122 SCRA 759)
• Police raid and closure of establishments
(Lim vs. CA, 387 SCRA 149)
• Transfer of petitioner’s gasoline station
supposedly w/in 100 meters from church
(Parayno vs. Jovellanos, 495 SCRA 85)
• Use of LGU funds for subdivision road
lots (Albon vs. Fernando, 494 SCRA 143)
• Red light district (Ermita Malate Hotel
Operators vs Mayor of Manila)
• Massage parlors in barbershops (Velasco vs.
Villegas, 120 SCRA 568)
• Exclusive jurisdiction of LLDA to issue permits
xxx in Laguna de Bay under RA 4850 (LLDA vs.
CA, 251 SCRA 42)
• Liga ng mga Barangay (Sec. 491; BQ)
• Barangay Assembly (Sec. 398; BQ)
• Ordinance prohibiting full payment for for
admission of children (Balacuit vs. CFI, 163
SCRA 182; ’03 BQ)
• Ordinance prohibiting nightclub operation (Dela
Cruz vs. Paras, 123 SCRA 569; BQ)
• Issuance of permits to operate cockpits
• Quarantine, isolation & slaughter of animals with
contagious diseases
• Suppression of sale of alcoholic drinks
• Posse comitatus
• Tatel vs. Mun. of Vigan, 207 SCRA 157
• RB of Makati vs. Mun. of Makati, 07/02/04
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Tano vs. Socrates, 278 SCRA 144
Villegas vs. Hiu Pao, 86 SCRA 270 (BQ)
Lina vs. Pano, 364 SCRA 76
Javellana vs. Kintanar, 119 SCRA 627
Batangas CATV vs. CA & SP of Batangas,
439 SCRA 327
• Abatement of Nuisance
• Monteverde vs. Generoso
Power of Eminent Domain
• Sec. 9 Art. lll: Private property shall not be
taken for public use w/o just compensation
• Requisites for its exercise under Sec. 19
RA 7160
• Two legal provisions which limit the
exercise of power of eminent domain
• Purposes of expropriation
• When municipal property is taken by state,
should there be compensable taking?
• Eminent domain, being a derogation of private
property rights, is justified only by clear public
necessity of an urgent public policy.
• Sangguniang Panlalawigan is without authority
to disapprove a municipal ordinance authorizing
the mayor to initiate expropriation (Moday vs.
CA, 268 SCRA 587)
• Condemnation of small property is not for public
purpose (Guido vs. Rural Admn.)
• Expropriation pursuant to SB Resolution (Mun.
of Paranaque vs. VM Realty, 292 SCRA 677)
• Distinction bet. Ordinance and Resolution
• Expropriation of lot intended as university site
(City of Manila vs. Arellano Colleges)
• Mandamus as remedy to compel enactment of
appropriation ordinance to satisfy unpaid just
compensation (Yujuico vs. Atienza, 472 SCRA
466). In case of failure to pay w/in 5 yrs, owner
has right to recover posession of property.
Power of Taxation
• Sec. 5 Art. X
• Conditions for its exercise
• Sec. 186 LGC: Conduct of public hearing prior
to enactment of revenue ordinance
• Sec. 187 LGC authorizes DOJ Secretary to
review, w/in 30 days from effectivity of
ordinance, its constitutionality & if warranted to
revoke it; not an exercise of power of control
over LGU (Drilon vs. Lim, 235 SCRA 135)
• MIAA Airport lands and buildings are exempt
from real estate tax imposed by LGUs; reasons
(MIAA vs. CA, 495 SCRA 591)
• Gen. Rule: LGUs cannot impose any kind of tax
on national government instrumentalities under
Sec. 234 LGC
Exception: it gives beneficial use of its real
properties to a taxable entity under Sec. 133.
• Publication of tax ordinance for 3 consecutive
days in a newspaper of local circulation under
Sec. 188 LGC (Coca Cola vs. Manila City, 493
SCRA 279)
• Requisites for validity of municipal
contracts (BQ)
• Under Sec. 23 LGC, the local chief
executive, upon Sanggunian authority,
may negotiate & secure grants, local or
foreign, in support of basic services w/o
getting approval from national gov’t,
unless there is national security
implication.
Sec. 21 [Code: R A P S]
• LGU, thru ordinance, can temporarily or
permanently close or open any local road,
alley, park or square. If permanent
closure, ordinance must be approved by
2/3 of all members.
• Property permanently withdrawn from
public use may be conveyed for any
purpose.
• Any national or local RAPS may be
temporarily closed during fiesta xxx
• Municipality has no power to withdraw a
part of its public plaza from public use and
lease it for private use (Mun. of Cavite vs.
Rojas, BQ)
• Charter of Cebu empowers city to
withdraw a city road from public use; it
becomes patrimonial property (Cebu
Oxygen & Acetylene vs. Bercilles)
Liability of MCs
• Liability on contracts
• Not liable for ultra vires contracts, whether
or not the other party has fully carried out
his part of the contract
• If beyond the agent’s authority, MC is not
liable although within its corporate powers,
unless there is ratification.
Liability for Torts
• MC not liable for torts committed by its officers
in performance of governmental functions
*Palafox vs. Province of Ilocos Norte
• Exceptions; instances MC is liable even in
performance of governmental functions:
a. Art. 2189 CC (City of Manila vs. Teotico)
b. special agent
c. Art. 34 CC
• Respondent superior (Torio vs. Fontanilla)
* lease of cemetery lot (City of Manila vs. IAC)