BASIC PRINCIPLES AND CASES ON PUBLIC CORPORATION

ACT No. 1459 - AN ACT PROVIDING FOR THE FORMATION AND ORGANIZATION OF
CORPORATIONS, DEFINING THEIR POWERS, FIXING THE DUTIES OF DIRECTORS AND
OTHER OFFICERS THEREOF, DECLARING THE RIGHTS AND LIABILITIES OF
SHAREHOLDERS AND MEMBERS, PRESCRIBING THE CONDITIONS UNDER WHICH SUCH
CORPORATIONS MAY TRANSACT BUSINESS, AND REPEALING CERTAIN ARTICLES OF THE
CODE OF COMMERCE AND ALL LAWS OR PARTS OF LAWS IN CONFLICT OR INCONSISTENT
WITH THIS ACT

What is a corporation?

Act No. 1459, Section 3. Corporations may be public or private. - Public corporations are those
formed or organized for the government of a portion of the state. Private corporations are those
formed for some private purpose, benefit, aim, or end, as distinguished from public corporations,
which have for their purpose the general good and welfare. Private corporations are divided into
stock corporations and nonstock corporations. Corporations which have a capital stock divided into
shares and are authorized to distribute to the holders of such shares dividends or allotments of the
surplus profits on the basis of the shares held are stock corporations. All other private corporations
are nonstock corporations.

GENERAL POWERS OF CORPORATIONS

Section 13. Every corporation has the power:

(1) Of succession by its corporate name for the period of time limited in the articles of incorporation
and not exceeding the time prescribed by law;

(2) To sue and be sued in any court;

(3) To transact the business for which it was lawfully organized, and to exercise such powers
and to perform such acts as may be reasonably necessary to accomplish the purpose for which the
corporation was formed;

(4) To make and use a common seal and to alter the same at pleasure;

(5) To purchase, hold, convey, sell, lease, let, mortgage, encumber, and otherwise deal with such
real and personal property as the purpose for which the corporation was formed may permit, and the
transaction of the lawful business of the corporation may reasonably and necessarily require, unless
otherwise prescribed in this Act: PROVIDED, That no corporation shall be authorized to conduct the
business of buying and selling real estate or be permitted to hold or own real estate except such as
may be reasonably necessary to enable it to carry out the purposes for which it is created, and every
corporation authorized to engage in agriculture shall be restricted to the ownership and control of not
to exceed one thousand and twenty-four hectares of land; and it shall be unlawful for any member of
a corporation engaged in agriculture or mining and for any corporation organized for any purpose
except irrigation to be in anywise interested in any other corporation engaged in agriculture or in
mining. Corporations, however, may loan funds upon real-estate security and purchase real estate
when necessary for the collection of loans, but they shall dispose of real estate so obtained within
five years after receiving the title;

(6) To appoint and dismiss such subordinate officers or agents as the business or welfare of the
corporation may demand, and to allow such subordinate officers and agents suitable compensation;
(7) To make by-laws, not inconsistent with any existing laws, for the fixing or changing of the number
of its officers and directors within the limits prescribed by law, and for the transferring of its stock, the
administration of its corporate affairs, the management of its business, and the care, control, and
disposition of its property;

(8) To admit members to the corporation; if it be a stock corporation, to issue stock to stockholders
and to sell stock or shares of stockholders for the payment of any indebtedness of the stockholders
to the corporation;

(9) To enter into any obligation or contract essential to the proper administration of its corporate
affairs or necessary for the proper transaction of the business or accomplishment of the purpose for
which the corporation was organized.

(For concepts below, refer to the Local Government Code of the Philippines)

Local Government

Local Government Unit

Decentralization

Autonomy

CASES:

(1) Ganzon vs. CA, 200 SCRA 271 [1991]

Facts: A series of administrative complaints, ten in number, was filed by various city
officials against Petitioner Mayor Ganzon. During the pendency of the charges, the
Respondent Secretary of the Department of Local Government issued a preventive suspension
order for a period of sixty (60) days. Later on, when prima facie evidence was found to exist on
the charges, the respondent ordered the petitioner's second preventive suspension for
another sixty (60) days. Then, for the third time, the respondent Secretary issued another
order, preventively suspending Mayor Ganzon for another sixty days.

Issue:

Whether or not the Secretary of Local Government acted with grave abuse of discretion in the
manner by which he suspended petitioner

Held: Yes

Sec. 63. Preventive Suspension. —

 (1) Preventive suspension may be imposed by the Minister of Local Government if the
respondent is a provincial or city official, by the provincial governor if the respondent is an
elective municipal official, or by the city or municipal mayor if the respondent is an elective
barangay official.
(2) Preventive suspension may be imposed at any time after the issues are joined, when
there is reasonable ground to believe that the respondent has committed the act or acts
complained of, when the evidence of culpability is strong, when the gravity of the offense so
warrants, or when the continuance in office of the respondent could influence the witnesses or
pose a threat to the safety and integrity of the records and other evidence. In all cases,
preventive suspension shall not extend beyond sixty days after the start of said
suspension.
(3) At the expiration of sixty days , the suspended official shall be deemed
reinstated in office without prejudice to the continuation of the proceedings against him
until its termination . However ' if the delay in the proceedings of the case is due to his fault,
neglect or request, the time of the delay shall not be counted in computing the time of
suspension.
Under the Local Government Code, it cannot exceed sixty days, 62 which is to say that it
need not be exactly sixty days long if a shorter period is otherwise sufficient, and which is also
to say that it ought to be lifted if prosecutors have achieved their purpose in a shorter span.
Suspension is not a penalty and is not unlike preventive imprisonment in which the
accused is. held to insure his presence at the trial. In both cases, the accused (the respondent)
enjoys a presumption of innocence unless and until found guilty Suspension finally is
temporary and as the Local Government Code provides, it may be imposed for no more
than sixty days. As we held, 63 a longer suspension is unjust and unreasonable, and we might
add, nothing less than tyranny.
As we observed earlier, imposing 600 days of suspension which is not a remote
possibility Mayor Ganzon is to all intents and purposes, to make him spend the rest of his term
in inactivity. It is also to make, to all intents and purposes, his suspension permanent It is also,
in fact, to mete out punishment in spite of the fact that the Mayor's guilt has not been proven.
Worse, any absolution will be for naught because needless to say, the length of his suspension
would have, by the time he is reinstated, wiped out his tenure considerably.
We reiterate that we are not precluding the President, through the Secretary of Interior
from exercising a legal power, yet we are of the opinion that the Secretary of Interior is
exercising that power oppressively, and needless to say, with a grave abuse of
discretion.
The Court is aware that only the third suspension is under question, and that any talk of
future suspensions is in fact premature. The fact remains, however, that Mayor Ganzon has
been made to serve a total of 120 days of suspension and the possibility of sixty days more is
arguably around the corner (which amounts to a violation of the Local Government Code which
brings to light a pattern of suspensions intended to suspend the Mayor the rest of his natural
tenure. The Court is simply foreclosing what appears to us as a concerted effort of the State to
perpetuate an arbitrary act.

(2) Pimentel, Jr. et al vs. Executive Secretary, et al, G.R. No. 195770, July 17,
2012

Facts:
The court receive a petition for certiorari for the constitutionality of certain provisions of
Republic Act 10147 or also knowns as General Appropriations Act (GAA) of 20111 which
provides a P21 Billion budget allocation for the Conditional Cash Transfer Program (CCTP)
headed by the Department of Social Welfare & Development (DSWD).In 2007, the DSWD
embarked on a poverty reduction strategy with the poorest of the poor as target
beneficiaries.2 Dubbed "Ahon Pamilyang Pilipino," it was pre-pilot tested in the municipalities
of Sibagat and Esperanza in Agusan del Sur; the municipalities of Lopez Jaena and Bonifacio in
Misamis Occidental, the Caraga Region; and the cities of Pasay and Caloocan3 upon the
release of the amount of P50 Million Pesos under a Special Allotment Release Order (SARO)
issued by the Department of Budget and Management.4 On July 16, 2008, the DSWD issued
Administrative Order No. 16, series of 2008 (A.O. No. 16, s. 2008),5 setting the implementing
guidelines for the project renamed "Pantawid Pamilyang Pilipino Program'' (4Ps), upon the
following stated objectives, to wit:
1. To improve preventive health care of pregnant women and young children;
2. To increase enrollment/attendance of children at elementary level;
3. To reduce incidence of child labor
4. To raise consumption of poor households on nutrient dense foods;
5. To encourage parents to invest in their children's (and their own) future;
6. To encourage parent's participation in the growth and development of young children, as well
as involvement in the community.

Petitioner Aquilino Pimentel, Jr., a former Senator, joined by Sergio Tadeo, incumbent President
of the Association of Barangay Captains of Cabanatuan City, Nueva Ecija, and Nelson
Alcantara, incumbent Barangay Captain of Barangay Sta. Monica, Quezon City, challenges
before the Court the disbursement of public funds and the implementation of the CCTP
which are alleged to have encroached into the local autonomy of the LGUs.

Issue: Whether or not the P 21 billion budget allocation of Conditional Cash Transfer violates
Articel 2, Section 25 & Article 10, Section 3 of the 1987 Philippine Constitution in relation to
Section 17 of the Local Government Code of 1991.

Held: The petition was DISMISSED. Petitioners have failed to discharge the burden of
proving the invalidity of the provisions under the GAA of 2011. Under the Philippine
concept of local autonomy, the national government has not completely relinquished all its
powers over local governments, including autonomous regions. Only administrative powers
over local affairs are delegated to political subdivisions. The purpose of the delegation is to
make governance more directly responsive and effective at the local levels. In turn, economic,
political and social development at the smaller political units are expected to propel social and
economic growth and development. But to enable the country to develop as a whole, the
programs and policies affected locally must be integrated and coordinated towards a common
national goal. Thus, policy-setting for the entire country still lies in the President and
Congress.

(3) League of Provinces of the Philippines vs. DENR, et al, G.R. No. 175368, April
11, 2013

FACTS:
 This is a petition for certiorari, prohibition and mandamus, praying that this Court order the
following: ( 1) declare as unconstitutional Section 17(b)(3)(iii) of Republic Act (R.A.) No. 7160,
otherwise known as The Local Government Code of 1991 and Section 24 of Republic Act (R.A.)
No. 7076, otherwise known as the People's Small-Scale Mining Act of 1991; (2) prohibit and bar
respondents from exercising control over provinces; and (3) declare as illegal the respondent
Secretary of the Department of Energy and Natural Resources' (DENR) nullification, voiding and
cancellation of the Small-Scale Mining permits issued by the Provincial Governor of Bulacan.

ISSUES:
(1) Whether or not Section 17(B)(3)(III) of R.A. No. 7160 and Section 24 of R.A. No. 7076 are
unconstitutional for providing for executive control and infringing upon the local autonomy
of provinces.
(2) Whether or not, the act of respondent in nullifying, voiding and cancelling the small-scale
mining permits amounts to executive control, not merely supervision and usurps the devolved
powers of all provinces.

HELD:
(1) No. In this case, respondent DENR Secretary has the authority to nullify the Small-Scale
Mining Permits issued by the Provincial Governor of Bulacan, as the DENR Secretary has control
over the PMRB, and the implementation of the Small-Scale Mining Program is subject to control
by respondent DENR. Paragraph 1 of Section 2, Article XII of the Constitution provides that "the
exploration, development and utilization of natural resources shall be under the full control
and supervision of the State." Under said provision, the DENR has the duty to control and
supervise the exploration, development, utilization and conservation of the country's natural
resources. Hence, the enforcement of small-scale mining law in the provinces is made subject
to the supervision, control and review of the DENR under the Local Government Code of 1991,
while the People’s Small-Scale Mining Act of 1991 provides that the People’s Small-Scale Mining
Program is to be implemented by the DENR Secretary in coordination with other concerned
local government agencies.

The Court has clarified that the constitutional guarantee of local autonomy in the Constitution
Art. X, Sec. 2 refers to the administrative autonomy of local government units or the
decentralization of government authority. It does not make local governments sovereign
within the State. The Local Government Code did not fully devolve the enforcement of the
small-scale mining law to the provincial government, as its enforcement is subject to the
supervision, control and review of the DENR, which is in charge, subject to law and higher
authority, of carrying out the State's constitutional mandate to control and supervise the
exploration, development, utilization of the country's natural resources.

Before this Court determines the validity of an act of a co-equal and coordinate branch of the
Government, it bears emphasis that ingrained in our jurisprudence is the time-honored
principle that a statute is presumed to be valid. This presumption is rooted in the doctrine of
separation of powers which enjoins upon the three coordinate departments of the Government
a becoming courtesy for each other's acts. This Court, however, may declare a law, or portions
 thereof, unconstitutional where a petitioner has shown a clear and unequivocal breach of the
Constitution, leaving no doubt or hesitation in the mind of the Court.

(2) No. The Court finds that the decision of the DENR Secretary was rendered in accordance with
the power of review granted to the DENR Secretary in the resolution of disputes, which is
provided for in Section 24 of R.A. No. 707651 and Section 22 of its Implementing Rules and
Regulations. The decision of the DENR Secretary, declaring that the Application for Exploration
Permit of AMTC was valid and may be given due course, and canceling the Small-Scale Mining
Permits issued by the Provincial Governor, emanated from the power of review granted to the
DENR Secretary under R.A. No. 7076 and its Implementing Rules and Regulations. The DENR
Secretary's power to review and decide the issue on the validity of the issuance of the Small-
Scale Mining Permits by the Provincial Governor as recommended by the PMRB, is a quasi-
judicial function, which involves the determination of what the law is, and what the legal rights
of the contending parties are, with respect to the matter in controversy and, on the basis
thereof and the facts obtaining, the adjudication of their respective rights. The DENR Secretary
exercises quasi-judicial function under R.A. No. 7076 and its Implementing Rules and
Regulations to the extent necessary in settling disputes, conflicts or litigations over conflicting
claims. This quasi-judicial function of the DENR Secretary can neither be equated with
"substitution of judgment" of the Provincial Governor in issuing Small-Scale Mining Permits nor
"control" over the said act of the Provincial Governor as it is a determination of the rights of
AMTC over conflicting claims based on the law.

(4) Province of Batangas vs. Romylo, 429 SCRA 736 [2004]

Re: Principle of Local Autonomy

FACTS: Petitioner filed a petition to declare as unconstitutional and void certain provisos
contained in the General Appropriations Acts (GAA) of 1999, 2000 and 2001, insofar as they
uniformly earmarked for each corresponding year the amount of five billion pesos (?
5,000,000,000.00) of the Internal Revenue Allotment (IRA) for the Local Government Service
Equalization Fund (LGSEF) and imposed conditions for the release thereof.

ISSUE: WON said provisos violate the constitutional precept on local autonomy.

HELD: Yes. The Constitution (Sec. 6, Art X) and the LGC 1991 (Sec. 18) explicitly provides that
LGUs shall have a just share, as determined by law, in the national taxes which shall be
automatically and directly released to them without need of further action. Hence, the provisos
imposing conditions for the release of LGU funds are unconstitutional.
(5) Mandanas vs. Ochoa [2018]

FACTS:

The fiscal autonomy guaranteed to local governments under Section 6, Article X of the 1987
Constitution means the power to create their own sources of revenue in addition to their
equitable share in the "national taxes" released by the National Government, as well as
the power to allocate their resources in accordance with their own priorities.

Pursuant to this Constitutional dictum, Congress enacted Republic Act No. 7160, otherwise
known as the Local Government Code (LGC). Sec. 284 of the LGC provides that LGUs shall
have an allotment equivalent to 40% of the national internal revenue taxes.

The share of the LGUs, known as the Internal Revenue Allotment (IRA), has been regularly
released to the LGUs. According to the implementing rules and regulations of the LGC, the IRA
is determined on the basis of the actual collections of the National Internal Revenue Taxes
(NIRTs) as certified by the Bureau of Internal Revenue (BIR).

Two petitions were filed to challenge the base figure for the computation of the IRA.

In G.R. No. 199802, Cong. Hermilando Mandanas, et al., alleged that the NIRTs certified by
the BIR excluded the NIRTs collected by the Bureau of Customs, specifically excise taxes,
value added taxes (VATs), and documentary stamp taxes (DSTs). Such exclusion resulted in
LGUs being deprived of ₱60,750,000,000.00 for FY 2012. Further, the petitioners argued that
since this mistake in computation was happening since 1992, then the National Government
has effectively deprived LGUs of ₱438,103,906,675.73 in their IRA.

Meanwhile, in G.R. No. 208488, Cong. Enrique Garcia, Jr. sought the issuance of the writ of
mandamus to compel respondents to compute the just share of the LGUs on the basis of
all national taxes. He argued that the insertion by Congress of the words "internal revenue" in
the phrase "national taxes" found in Section 284 of the LGC caused the diminution of the base
for determining the just share of the LGUs, and should be declared unconstitutional.

ISSUE:

Whether or not Section 284 of the LGC is unconstitutional for being repugnant to Section 6,
Article X of the 1987 Constitution. -- YES.

HELD:

Section 6 of the Constitution mentions "national taxes" as the source of the just share of the
LGUs while Section 284 of the LGC ordains that the share of the LGUs be taken from "national
internal revenue taxes" instead. Congress thereby infringed the constitutional provision.
Although the power of Congress to make laws is plenary in nature, congressional lawmaking
remains subject to the limitations stated in the 1987 Constitution.

The phrase "national internal revenue taxes" in Section 284 is undoubtedly more restrictive
than the term "national taxes" written in Section 6 of the Constitution. As such, Congress has
actually departed from the letter of the 1987 Constitution stating that national taxes should
be the base from which the just share of the LGU comes. Such departure is impermissible.
Verba legis non est recedendum (from the words of a statute there should be no departure).

Equally impermissible is that Congress has also thereby curtailed the guarantee of fiscal
autonomy in favor of the LGUs under the 1987 Constitution.

The phrase "national internal revenue taxes" as used in Section 284 of the LGC included
are all the taxes enumerated in Section 21 of the National Internal Revenue Code (NIRC),
as amended by R.A. No. 8424, namely: income tax, estate and donor's taxes, VAT, other
percentage taxes, excise taxes, documentary stamp taxes, and such other taxes as may be
imposed and collected by the BIR.

In view of the foregoing enumeration of what are the national internal revenue taxes, Section
284 of the LGC has effectively deprived the LGUs from deriving their just share from
other national taxes, like the customs duties.

Moving forward, the BIR and the BOC are directed to certify all national tax collections. This
ruling, also known as the "Mandanas Ruling," is to be applied prospectively.

(6) Magtajas vs. Pryce Properties Corp., Inc., 234 SCRA 255 [1994]

FACTS:

Petitioners opposed the opening of a casino in Cagayan de Oro and enacted Ordinance No.
3353, prohibiting the issuance of business permit and cancelling existing business permit to
establishment for the operation of casino, and Ordinance No. 3375-93, prohibiting the
operation of casino and providing penalty for its violation.
Respondents assailed the validity of the ordinances on the ground that both violated P.D. 1869,
permitting the operation of casinos centralized and regulated by PAGCOR.
Petitioners contends that pursuant to the Local Government Code, they have the police power
authority to prohibit the operation of casino for the general welfare.

ISSUE:

Whether or not Ordinance No. 3353 and Ordinance No. 3375-93 are valid exercises of police
power.

HELD:
 No. The ordinances violate P.D. 1869, which has the character and force of a statute as well as
the public policy expressed in the decree allowing the playing of certain games of chance
despite the prohibition of gambling in general. Ordinances should not contravene a statute
because local councils exercise only delegated legislative powers conferred to them by
Congress. Petition is denied.

(7) Heirs of Alberto Suguitan vs. City of Mandaluyong, 328 SCRA 137 (2000)

Facts:

On October 13, 1994, the Sangguniang Panlungsod of Mandaluyong City issued Resolution No.
396, S-1994 authorizing Mayor Benjamin B. Abalos to institute expropriation proceedings
over the property of Alberto Suguitan for the purpose of the expansion of the
Mandaluyong Medical Center. Because of Suguitan’s refusal to sell his property, the City of
Mandaluyong filed a complaint for expropriation with the RTC of Pasig City. Suguitan filed a
motion to dismiss the complaint but was denied by the trial court. On July 28, 1998, the court
granted the assailed order of expropriation.

Petitioners assert that the City of Mandaluyong may only exercise its delegated power of
eminent domain by means of an ordinance as required by Section 19 of RA No. 7160, and
not by means of a mere resolution. Respondent contends, however, that it validly and legally
exercised its power of eminent domain pursuant to Art. 36, Rule VI of the IRR of RA No.
7160, a resolution is a sufficient antecedent for the filing of expropriation proceedings with the
RTC. The Defendant's position was upheld by the trial court.

Issue:

WON the City of Mandaluyong may validly and legally exercise its power of eminent
domain by implementing a resolution pursuant to Art. 36, Rule VI of the IRR of RA No.
7160.

Ruling:

The Court held that the City of Mandaluyong may enact the necessary ordinance and institute
expropriation proceedings for as long as it has complied with all other legal requirements.

The basis for the exercise power of eminent domain by the local government unit is Section
19 of R.A. No. 7160. Despite the existence of legislative grants, it is still the duty of the
courts to determine whether the power of eminent domain is being exercised in
accordance with the delegating law. The courts have the obligation to determine whether the
expropriation proceedings is over a particular private property, is exercised for public use, there
is payment of just compensation and there was a valid offer made to the owner of the property
but was not accepted. Section 19 of the Code requires an ordinance, not a resolution, for the
exercise of the power of eminent domain. An ordinance is necessary to authorize the filing of a
complaint with the proper court. Rule 67 of the Rules of Court states that although the award of
just compensation is indispensable, it is the last stage of the expropriation proceedings. It
cannot be arrived at without an initial finding by the court that there is a lawful right to take the
property sought to be expropriated for public use. The reliance of the respondents to Article
36 (a), Rule VI of the IRR, which requires only a resolution to authorize the exercise of the
power of eminent domain, is untenable. Section 19 of RA 7160, the law itself, surely
prevails over said rule. It is unquestionable that the law is controlling and cannot be amended
by a mere administrative rule.

(8) Cordillera Autonomous Region vs. COA, 181 SCRA 495 [1990]

Facts: The constitutionality of E.O. 220 was assailed which created the Cordillera
Administrative Region (CAR) on the ground that it pre-empts the enactment of an Organic Act
by the Congress and the creation of autonomous region in the Cordillera conditional on the
approval of the act through a plebiscite.

Issue:
Whether or not CAR is a territorial and political subdivision?
Whether or not E.O 220 is unconstitutional?

Held: It was held that the CAR is not an autonomous region in Cordillera contemplated in
the Constitution. It was created not as a public or political subdivision. It does not have a
separate juridical personality like the provinces, cities or municipalities. It is neither vested with
the powers granted to public corporations.

It was created by virtue of E.O. 220 primarily to coordinate the planning and
implementation of programs and services in the covered areas. CAR in nature is a regional
coordinating agency of the national government. E.O. 220 is not unconstitutional since the
constitutional guarantee of local autonomy pertains to the administrative autonomy of
the local government units through the decentralization of government authority. The
creation of autonomous regions in Muslim Mindanao contemplates the grant of political
autonomy and not just administrative autonomy for the ARMM. The purpose of CAR is to serve
as a transitory coordinating agency that will prepare the stage for political autonomy for the
Cordilleras. It does not diminish the local autonomy of the covered provinces and cities. The
petition was dismissed for lack of merit.

(9) Metropolitan Traffic Command vs. Gonong, 187 SCRA 432 [1990]

FACTS

The original complaint was filed by Dante S. David, a lawyer, who claimed that the rear license
plate, of his car was removed by the Metropolitan Traffic Command while the vehicle was
parked on Escolta. He questioned the petitioner's act on the ground not only that the car was
not illegally parked but, more importantly, that there was no ordinance or law authorizing
such removal. He asked that the practice be permanently enjoined and that in the meantime a
temporary restraining order or a writ of preliminary injunction be issued.

Judge Gonong issued a temporary restraining order and the writ of preliminary
injunction .The parties also agreed to submit the case for resolution on the sole issue of
whether there was a law or ordinance authorizing the removal of the license plates of illegally
parked vehicles.

Judge Gonong held that LOI 43, which the defendant had invoked, did not empower it "to
detach, remove and confiscate vehicle plates of motor vehicles illegally parked and unattended
as in the case at bar. It merely authorizes the removal of said vehicles when they are obstacles
to free passage or continued flow of traffic on streets and highways." At any rate, he said, the
LOI had been repealed by PD 1605. Moreover, the defendant had not been able to point to any
MMC rule or regulation or to any city ordinance to justify the questioned act.

ISSUE:

1. Whether or not LOI 43 is valid.

2. Whether or not a private respondent’s license can be confiscated.

HELD:

1. Yes. The petitioners insists that LOI 43 remains in force despite the issuance of PD 1605. It
contends that there is no inconsistency between the two measures because the former deals
with illegally parked vehicles anywhere in the Philippines whereas the latter deals with the
regulation of the flow of traffic in the Metro Manila area only.

Private respondent argues that LOI 43 has been repealed by PD 1605, which specifies all the
sanctions available against the various traffic violations, including illegal parking. He stresses
that removal and confiscation of the license plates of illegally parked vehicles is not one of
them, the penalties being limited in the decree to imposition of fine and suspension or
revocation of driver's licenses or certificates of public convenience, etc. He claims that removal
and confiscation of the license plate without notice and hearing violates due process because
such license plate is a form of property protected by the Bill of Rights against unlawful
deprivation.

The Court holds that LOI 43 is valid but may be applied only against motor vehicles that have
stalled in the public streets due to some involuntary cause and not those that have been
intentionally parked in violation of the traffic laws. A careful reading of the above decree will
show that removal and confiscation of the license plate of any illegally parked vehicle is not
among the specified penalties. Moreover, although the Metropolitan Manila Commission is
authorized by the decree to "otherwise discipline" and "impose higher penalties" on traffic
violators, whatever sanctions it may impose must be "in such amounts and under such
penalties as are herein prescribed."

It would appear that what the LOI punishes is not a traffic violation but a traffic obstruction,
which is an altogether different offense. A violation imports an intentional breach or disregard
of a rule, as where a driver leaves his vehicle in a no-parking area against a known and usually
visible prohibition. Contrary to the common impression, LOI 43 does not punish illegal parking
per se but parking of stalled vehicles, i.e., those that involuntarily stop on the road due to some
unexpected trouble such as engine defect, lack of gasoline, punctured tires, or other similar
cause. The vehicle is deemed illegally parked because it obstructs the flow of traffic, but only
because it has stalled. The obstruction is not deliberate. In fact, even the petitioner recognizes
that "there is a world of difference between a stalled vehicle and an illegally parked and
unattended one" and suggests a different treatment for either. "The first means one which
stopped unnecessarily or broke down while the second means one which stopped to
accomplish something, including temporary rest.

2. No. It is not covered by LOI 43 thus subject to a different penalty. As it has not been shown
that the private respondent's motor vehicle had stalled because of an engine defect or some
other accidental cause and, no less importantly, that it had stalled on the road for a second or
subsequent time, confiscation of the license plate cannot be justified under LOI 43. And
neither can that sanction be sustained under PD 1605, which clearly provides that "in case of
traffic violations, (even) the driver's license shall not be confiscated," let alone the license plate
of the motor vehicle. If at all, the private respondent may be held liable for illegal parking only
and subjected to any of the specific penalties mentioned in Section 3 of the decree.

Gonong decision will show that the measures under consideration do not pass the first criterion
because they do not conform to existing law. The pertinent law is PD 1605. PD 1605 does not
allow either the removal of license plates or the confiscation of driver's licenses for traffic
violations committed in Metropolitan Manila. There is nothing in the following provisions of
the decree authorizing the Metropolitan Manila Commission to impose such sanctions. In fact,
the provisions prohibit the imposition of such sanctions in Metropolitan Manila. The
Commission was allowed to "impose fines and otherwise discipline" traffic violators only "in
such amounts and under such penalties as are herein prescribed," that is, by the decree itself.
Nowhere is the removal of license plates directly imposed by the decree or at least allowed by
it to be imposed by the Commission. Notably, Section 5 thereof expressly provides that "in
case of traffic violations, the driver's license shall not be confiscated." These restrictions are
applicable to the Metropolitan Manila Authority and all other local political subdivisions
comprising Metropolitan Manila, including the Municipality of Mandaluyong.

The requirement that the municipal enactment must not violate existing law explains itself.
Local political subdivisions are able to legislate only by virtue of a valid delegation of legislative
power from the national legislature. They are mere agents vested with what is called the power
of subordinate legislation. As delegates of the Congress, the local government unit cannot
contravene but must obey at all times the will of their principal.

(10) MMDA vs. BelAir VillageAssoc., 328 SCRA 836 [2000]

Facts:
On December 30, 1995, respondent received from petitioner, through its
Chairman, a notice dated December 22, 1995 requesting respondent to
open Neptune Street to public vehicular traffic starting January 2, 1996.

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

On January 23, 1996, after due hearing, the trial court denied issuance of a
preliminary injunction. Respondent questioned the denial before the Court
of Appeals which rendered a Decision on the merits of the case finding that
the MMDA has no authority to order the opening of Neptune Street, a
private subdivision road and cause the demolition of its perimeter walls. It held
that the authority is lodged in the City Council of Makati by ordinance.

Issue:

Whether the MMDA has no authority to order the opening of Neptune Street, a
private subdivision road and cause the demolition of its perimeter walls?

Held:

No, -It will be noted that the powers of the MMDA are limited to the following
acts: formulation, coordination, regulation, implementation, preparation,
management, monitoring, setting of policies, installation of a system and
administration.

There is no syllable in R. A. No. 7924 that grants the MMDA police power,
let alone legislative power. Even the Metro Manila Council has not been
delegated any legislative power. Unlike the legislative bodies of the local
government units, there is no provision in R. A. No. 7924 that empowers the
MMDA or its Council to “enact ordinances, approve resolutions and
appropriate funds for the general welfare” of the inhabitants of Metro Manila.
The MMDA is, as termed in the charter itself, a “development authority.” [30] It
is an agency created for the purpose of laying down policies and
coordinating with the various national government agencies, people’s
organizations, non-governmental organizations and the private sector for the
efficient and expeditious delivery of basic services in the vast
metropolitan area. All its functions are administrative in nature.

The MMDA is not a political unit of government. The power delegated to the
MMDA is that given to the Metro Manila Council to promulgate administrative
rules and regulations in the implementation of the MMDAs functions. There is
no grant of authority to enact ordinances and regulations for the general
welfare of the inhabitants of the metropolis.

It is thus beyond doubt that the MMDA is not a local government unit or
a public corporation endowed with legislative power. It is not even a “special
metropolitan political subdivision” as contemplated in Section 11, Article X of
the Constitution. The creation of a “special metropolitan political subdivision”
requires the approval by a majority of the votes cast in a plebiscite in the
political units directly affected.[56] R. A. No. 7924 was not submitted to the
inhabitants of Metro Manila in a plebiscite. The Chairman of the MMDA is not
an official elected by the people, but appointed by the President with the rank
and privileges of a cabinet member. In fact, part of his function is to perform
such other duties as may be assigned to him by the President, [57] whereas in
local government units, the President merely exercises supervisory authority.
This emphasizes the administrative character of the MMDA.

It is the local government units, acting through their respective legislative

councils, that possess legislative power and police power. In the case at bar,
the Sangguniang Panlungsod of Makati City did not pass any ordinance or
resolution ordering the opening of Neptune Street, hence, its proposed
opening by petitioner MMDA is illegal and the respondent Court of Appeals
did not err in so ruling.

[1] Acting Governor-General Charles E. Yeater issued Executive Order No. 61

designating the Philippine Constabulary (PC) as the government custodian of
all firearms, ammunitions and explosives. Executive Order No. 215, issued by
President Diosdado Macapagal on December 3, 1965, granted the Chief of
the Constabulary, not only the authority to approve or disapprove applications
for personal, special and hunting license, but also the authority to revoke the
same. With the foregoing developments, it is accurate to say that the Chief of
the Constabulary had exercised the authority for a long time. In fact,
subsequent issuances such as Sections 2 and 3 of the Implementing Rules
and Regulations of Presidential Decree No. 1866 perpetuate such authority of
the Chief of the Constabulary. Section 2 specifically provides that any person
or entity desiring to possess any firearm shall first secure the necessary
permit/license/authority from the Chief of the Constabulary. With regard to the
issuance of PTCFOR, Section 3 imparts: The Chief of Constabulary may, in
meritorious cases as determined by him and under such conditions as he may
impose, authorize lawful holders of firearms to carry them outside of
residence. These provisions are issued pursuant to the general power granted
by P.D. No. 1866 empowering him to promulgate rules and regulations for the
effective implementation of the decree.

[2] SECTION 9. Any person desiring to possess one or more firearms for
personal protection, or for use in hunting or other lawful purposes only, and
ammunition therefor, shall make application for a license to possess such
firearm or firearms or ammunition as hereinafter provided. Upon making such
application, and before receiving the license, the applicant shall make a cash
deposit in the postal savings bank in the sum of one hundred pesos for each
firearm for which the license is to be issued, or in lieu thereof he may give a
bond in such form as the Governor-General may prescribe, payable to the
Government of the Philippine Islands, in the sum of two hundred pesos for
each such firearm: PROVIDED, HOWEVER, That persons who are actually
members of gun clubs, duly formed and organized at the time of the passage
of this Act, who at such time have a license to possess firearms, shall not be
required to make the deposit or give the bond prescribed by this section, and
the bond duly executed by such person in accordance with existing law shall
continue to be security for the safekeeping of such arms.

[3] In Mekin vs. Wolfe,[48] an ex post facto law has been defined as one (a)
which makes an action done before the passing of the law and which was
innocent when done criminal, and punishes such action; or (b) which
aggravates a crime or makes it greater than it was when committed; or (c)
which changes the punishment and inflicts a greater punishment than the law
annexed to the crime when it was committed; or (d) which alters the legal
rules of evidence and receives less or different testimony than the law
required at the time of the commission of the offense in order to convict the
defendant.

[4] The scope of the MMDAs function is limited to the delivery of the seven (7)
basic services. One of these is transport and traffic management which
includes the formulation and monitoring of policies, standards and projects to
rationalize the existing transport operations, infrastructure requirements, the
use of thoroughfares and promotion of the safe movement of persons and
goods. It also covers the mass transport system and the institution of a
system of road regulation, the administration of all traffic enforcement
operations, traffic engineering services and traffic education programs,
including the institution of a single ticketing system in Metro Manila for traffic
violations. Under this service, the MMDA is expressly authorized “to set the
policies concerning traffic” and “coordinate and regulate the implementation of
all traffic management programs.” In addition, the MMDA may “install and
administer a single ticketing system,” fix, impose and collect fines and
penalties for all traffic violations.