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

• 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 Bel-Air (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

• 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)