[2009V1449ED] LEAGUE OF CITIES OF THE PHILIPPINES (LCP) represented by LCP National President JERRY P. TREÑAS, CITY OF ILOILO represented by MAYOR JERRY P.  TREÑAS, CITY OF CALBAYOG represented by MAYOR MEL SENEN S. SARMIENTO, and JERRY P. TREÑAS in his personal capacity as taxpayer, Petitioners, versus COMMISSION ON ELECTIONS; MUNICIPALITY OF BAYBAY, PROVINCE OF LEYTE; MUNICIPALITY OF BOGO, PROVINCE OF CEBU; MUNICIPALITY OF CATBALOGAN, PROVINCE OF WESTERN SAMAR; MUNICIPALITY OF TANDAG, PROVINCE OF SURIGAO DEL SUR; MUNICIPALITY OF BORONGAN, PROVINCE OF EASTERN SAMAR; and MUNICIPALITY OF TAYABAS, PROVINCE OF QUEZON, Respondents. / CITY OF TARLAC, CITY OF  SANTIAGO, CITY OF IRIGA, CITY OF LIGAO, CITY OF LEGAZPI, CITY OF TAGAYTAY, CITY OF SURIGAO, CITY OF BAYAWAN, CITY OF SILAY, CITY OF GENERAL SANTOS, CITY OF ZAMBOANGA, CITY OF GINGOOG, CITY OF CAUAYAN, CITY OF PAGADIAN, CITY OF SAN CARLOS, CITY OF SAN FERNANDO, CITY OF TACURONG, CITY OF TANGUB, CITY OF OROQUIETA, CITY OF URDANETA, CITY OF VICTORIAS, CITY OF CALAPAN, CITY OF HIMAMAYLAN, CITY OF BATANGAS, CITY OF BAIS, CITY OF CADIZ, and CITY OF TAGUM, Petitioners-In-Intervention

D E C I S I O N

VELASCO, JR. J.:

Ratio legis est anima. The spirit rather than the letter of the law. A statute must be read according to its spirit or intent,[1] for what is within the spirit is within the statute although it is not within its letter, and that which is within the letter but not within the spirit is not within the statute.[2]  Put a bit differently, that which is within the intent of the lawmaker is as much within the statute as if within the letter; and that which is within the letter of the statute is not within the statute unless within the intent of the lawmakers.[3] Withal, courts ought not to interpret and should not accept an interpretation that would defeat the intent of the law and its legislators.[4]

So as it is exhorted to pass on a challenge against the validity of an act of Congress, a co-equal branch of government, it behooves the Court to have at once one principle in mind:  the presumption of constitutionality of statutes.[5] This presumption finds its roots in the tri-partite system of government and the corollary separation of powers, which enjoins the three great departments of the government to accord a becoming courtesy for each other’s acts, and not to interfere inordinately with the exercise by one of its official functions. Towards this end, courts ought to reject assaults against the validity of statutes, barring of course their clear unconstitutionality. To doubt is to sustain, the theory in context being that the law is the product of earnest studies by Congress to ensure that no constitutional prescription or concept is infringed.[6] Consequently, before a law duly challenged is nullified, an unequivocal breach of, or a clear conflict with, the Constitution, not merely a doubtful or argumentative one, must be demonstrated in such a manner as to leave no doubt in the mind of the Court.[7]

BACKGROUND

The consolidated petitions for prohibition commenced by the League of Cities of the Philippines (LCP), City of Iloilo, City of Calbayog, and Jerry P. Treñas[8] assail the constitutionality of the sixteen (16) laws,[9] each converting the municipality covered thereby into a city (cityhood laws, hereinafter) and seek to enjoin the Commission on Elections (COMELEC) from conducting plebiscites pursuant to subject laws.

By Decision[10] dated November 18, 2008, the Court en banc, by a 6-5 vote, granted the petitions and nullified the sixteen (16) cityhood laws for being violative of the Constitution, specifically its Section 10, Article X and the equal protection clause.

Subsequently, respondent local government units (LGUs) moved for reconsideration, raising, as one of the issues, the validity of the factual premises not contained in the pleadings of the parties, let alone established, which became the bases of the Decision subject of reconsideration.[11] By Resolution of March 31, 2009, a divided Court denied the motion for reconsideration.

A second motion for reconsideration followed in which respondent LGUs prayed as follows:

WHEREFORE, respondents respectfully pray that the Honorable Court reconsider its “Resolution” dated March 31, 2009, in so far as it denies for “lack of merit” respondents’ “Motion for Reconsideration” dated December 9, 2008 and in lieu thereof, considering that new and meritorious arguments are raised by respondents’ “Motion for Reconsideration” dated December 9, 2008 to grant afore-mentioned “Motion for Reconsideration” dated December 9, 2008 and dismiss the “Petitions For Prohibition” in the instant case.

Per Resolution dated April 28, 2009, the Court, voting 6-6, disposed of the motion as follows:

By a vote of 6-6, the Motion for Reconsideration of the Resolution of 31 March 2009 is DENIED for lack of merit. The motion is denied since there is no majority that voted to overturn the Resolution of 31 March 2009.

The Second Motion for Reconsideration of the Decision of 18 November 2008 is DENIED for being a prohibited pleading, and the Motion for Leave to Admit Attached Petition in Intervention x x x filed by counsel for Ludivina T. Mas, et al. are also DENIED. No further pleadings shall be entertained. Let entry of judgment be made in due course. x x x

On May 14, 2009, respondent LGUs filed a Motion to Amend the Resolution of April 28, 2009 by Declaring Instead that Respondents’  “Motion for Reconsideration of the Resolution of March 31, 2009” and “Motion for Leave to File and to Admit Attached ‘Second Motion for Reconsideration of the Decision Dated November 18, 2008’ Remain Unresolved and to Conduct Further Proceedings Thereon.”

Per its Resolution of June 2, 2009, the Court declared the May 14, 2009 motion adverted to as expunged in light of the entry of judgment made on May 21, 2009. Justice Leonardo-De Castro, however, taking common cause with Justice Bersamin to grant the motion for reconsideration of the April 28, 2009 Resolution and to recall the entry of judgment, stated the observation, and with reason, that the entry was effected “before the Court could act on the aforesaid motion which was filed within the 15-day period counted from receipt of the April 28, 2009 Resolution.”[12]

Forthwith, respondent LGUs filed a Motion for Reconsideration of the Resolution of June 2, 2009 to which some of the petitioners and petitioners-in-intervention filed their respective comments. The Court will now rule on this incident. But first, we set and underscore some basic premises:

(1) The initial motion to reconsider the November 18, 2008 Decision, as Justice Leonardo-De Castro noted, indeed raised new and substantial issues, inclusive of the matter of the correctness of the factual premises upon which the said decision was predicated.  The 6-6 vote on the motion for reconsideration per the Resolution of March 31, 2009, which denied the motion on the sole ground that “the basic issues have already been passed upon” reflected a divided Court on the issue of whether or not the underlying Decision of November 18, 2008 had indeed passed upon the basic issues raised in the motion for reconsideration of the said decision;

(2) The aforesaid May 14, 2009 Motion to Amend Resolution of April 28, 2009 was precipitated by the tie vote which served as basis for the issuance of said resolution. This May 14, 2009 motion––which mainly argued that a tie vote is inadequate to declare a law unconstitutional––   remains unresolved; and

(3) Pursuant to Sec. 4(2), Art. VIII of the Constitution, all cases involving the constitutionality of a law shall be heard by the Court en banc and decided with the concurrence of a majority of the Members who actually took part in the deliberations on the issues in the case and voted thereon.

The basic issue tendered in this motion for reconsideration of the June 2, 2009 Resolution boils down to whether or not the required vote set forth in the aforesaid Sec. 4(2), Art. VIII is limited only to the initial vote on the petition or also to the subsequent voting on the motion for reconsideration where the Court is called upon and actually votes on the constitutionality of a law or like issuances. Or, as applied to this case, would a minute resolution dismissing, on a tie vote, a motion for reconsideration on the sole stated ground––that the “basic issues have already been passed”–– suffice to hurdle the voting requirement required for a declaration of the unconstitutionality of the cityhood laws in question?

The 6-6 vote on the motion to reconsider the Resolution of March 31, 2009, which denied the initial motion on the sole ground that “the basic issues had already been passed upon” betrayed an evenly divided Court on the issue of whether or not the underlying Decision of November 18, 2008 had indeed passed upon the issues raised in the motion for reconsideration of the said decision.  But at the end of the day, the single issue that matters and the vote that really counts really turn on the constitutionality of the cityhood laws.  And be it remembered that the inconclusive 6-6 tie vote reflected in the April 28, 2009 Resolution was the last vote on the issue of whether or not the cityhood laws infringe the Constitution. Accordingly, the motions of the respondent LGUs, in light of the 6-6 vote, should be deliberated anew until the required concurrence on the issue of the validity or invalidity of the laws in question is, on the merits, secured.

It ought to be clear that a deadlocked vote does not reflect the “majority of the Members” contemplated in Sec. 4 (2) of Art. VIII of the Constitution, which requires that:

All cases involving the constitutionality of a treaty, international or executive agreement, or law shall be heard by the Supreme Court en banc, x x x shall be decided with the concurrence of a majority of the Members who actually took part in the deliberations on the issues in the case and voted thereon. (Emphasis added.)

Webster defines “majority” as “a number greater than half of a total.”[13] In plain language, this means 50% plus one. In Lambino v. Commission on Elections, Justice, now Chief Justice, Puno, in a separate opinion, expressed the view that “a deadlocked vote of six (6) is not a majority and a non-majority cannot write a rule with precedential value.”[14]

As may be noted, the aforequoted Sec. 4 of Art. VIII, as couched, exacts a majority vote in the determination of a case involving the constitutionality of a statute, without distinguishing whether such determination is made on the main petition or thereafter on a motion for reconsideration. This is as it should be, for, to borrow from the late Justice Ricardo J. Francisco: “x x x [E]ven assuming x x x that the constitutional requirement on the concurrence of the ‘majority’ was initially reached in the x x x ponencia, the same is inconclusive as it was still open for review by way of a motion for reconsideration.”[15]

To be sure, the Court has taken stock of the rule on a tie-vote situation, i.e., Sec. 7, Rule 56 and the complementary A.M. No. 99-1-09- SC, respectively, providing that:

SEC. 7. Procedure if opinion is equally divided. – Where the court en banc is equally divided in opinion, or the necessary majority cannot be had, the case shall again be deliberated on, and if after such deliberation no decision is reached, the original action commenced in the court shall be dismissed; in appealed cases, the judgment or order appealed from shall stand affirmed; and on all incidental matters, the petition or motion shall be denied.

A.M. No. 99-1-09-SC – x x x A motion for reconsideration of a decision or resolution of the Court En Banc or of a Division may be granted upon a vote of a majority of the En Banc or of a Division, as the case may be, who actually took part in the deliberation of the motion.

If the voting results in a tie, the motion for reconsideration is deemed denied.

But since the instant cases fall under Sec. 4 (2), Art. VIII of the Constitution, the aforequoted provisions ought to be applied in conjunction with the prescription of the Constitution that the cases “shall be decided with the concurrence of a majority of the Members who actually took part in the deliberations on the issues in the instant cases and voted thereon.”  To repeat, the last vote on the issue of the constitutionality of the cityhood bills is that reflected in the April 28, 2009 Resolution––a 6-6 deadlock.

On the postulate then that first, the finality of the November 18, 2008 Decision has yet to set in, the issuance of the precipitate[16] entry of judgment notwithstanding, and second, the deadlocked vote on the second motion for reconsideration did not definitely settle the constitutionality of the cityhood laws, the Court is inclined to take another hard look at the underlying decision. Without belaboring in their smallest details the arguments for and against the procedural dimension of this disposition, it bears to stress that the Court has the power to suspend its own rules when the ends of justice would be served thereby.[17]  In the performance of their duties, courts should not be shackled by stringent rules which would result in manifest injustice.  Rules of procedure are only tools crafted to facilitate the attainment of justice. Their strict and rigid application must be eschewed, if they result in technicalities that tend to frustrate rather than promote substantial justice.  Substantial rights must not be prejudiced by a rigid and technical application of the rules in the altar of expediency.  When a case is impressed with public interest, a relaxation of the application of the rules is in order.[18]  Time and again, this Court has suspended its own rules or excepted a particular case from their operation whenever the higher interests of justice so require.[19]

While perhaps not on all fours with the case, because it involved a purely business transaction, what the Court said in Chuidian v. Sandiganbayan[20] is most apropos:

To reiterate what the Court has said in Ginete vs. Court of Appeals and other cases, the rules of procedure should be viewed as mere instruments designed to facilitate the attainment of justice. They are not to be applied with severity and rigidity when such application would clearly defeat the very rationale for their conception and existence. Even the Rules of Court reflects this principle. The power to suspend or even disregard rules, inclusive of the one-motion rule, can be so pervasive and compelling as to alter even that which this Court has already declared to be final. The peculiarities of this case impel us to do so now.

The Court, by a vote of 6-4, grants the respondent LGUs’ motion for reconsideration of the Resolution of June 2, 2009, as well as their May 14, 2009 motion to consider the second motion for reconsideration of the November 18, 2008 Decision unresolved, and also grants said second motion for reconsideration.

This brings us to the substantive aspect of the case.

The Undisputed Factual Antecedents in Brief

During the 11th Congress,[21] fifty-seven (57) cityhood bills were filed before the House of Representatives.[22] Of the fifty-seven (57), thirty-three (33) eventually became laws. The twenty-four (24) other bills were not acted upon.

Later developments saw the introduction in the Senate of Senate Bill (S. Bill) No. 2157[23] to amend Sec. 450 of Republic Act No. (RA) 7160, otherwise known as the Local Government Code (LGC) of 1991.  The proposed amendment sought to increase the income requirement to qualify for conversion into a city from PhP 20 million average annual income to PhP 100 million locally generated income.

In March 2001, S. Bill No. 2157 was signed into law as RA 9009 to take effect on June 30, 2001. As thus amended by RA 9009,  Sec. 450 of the LGC of 1991 now provides that “[a] municipality x x x may be converted into a component city if it has a [certified] locally generated average annual income x x x of at least [PhP 100 million] for the last two (2) consecutive years based on 2000 constant prices.”

After the effectivity of RA 9009, the Lower House of the 12th Congress adopted in July 2001 House (H.) Joint Resolution No. 29[24] which, as its title indicated, sought to exempt from the income requirement prescribed in RA 9009 the 24 municipalities whose conversions into cities were not acted upon during the previous Congress.  The 12th Congress ended without the Senate approving H. Joint Resolution No. 29.

Then came the 13th Congress (July 2004 to June 2007), which saw the House of Representatives re-adopting H. Joint Resolution No. 29 as H. Joint Resolution No. 1 and forwarding it to the Senate for approval.

The Senate, however, again failed to approve the joint resolution.  During the Senate session held on November 6, 2006, Senator Aquilino Pimentel, Jr. asserted that passing H. Resolution No. 1 would, in net effect, allow a wholesale exemption from the income requirement imposed under RA 9009 on the municipalities. For this reason, he suggested the filing by the House of Representatives of individual bills to pave the way for the municipalities to become cities and then forwarding them to the Senate for proper action.[25]

Heeding the advice, sixteen (16) municipalities filed, through their respective sponsors, individual cityhood bills.  Common to all 16 measures was a provision exempting the municipality covered from the PhP 100 million income requirement.

As of June 7, 2007, both Houses of Congress had approved the individual cityhood bills, all of which eventually lapsed into law on various dates.  Each cityhood law directs the COMELEC, within thirty (30) days from its approval, to hold a plebiscite to determine whether the voters approve of the conversion.

As earlier stated, the instant petitions seek to declare the cityhood laws unconstitutional for violation of Sec. 10, Art. X of the Constitution, as well as for violation of the equal-protection clause. The wholesale conversion of municipalities into cities, the petitioners bemoan, will reduce the share of existing cities in the Internal Revenue Allotment (IRA), since more cities will partake of the internal revenue set aside for all cities under Sec. 285 of the LGC of 1991.[26]

Petitioners-in-intervention, LPC members themselves, would later seek leave and be allowed to intervene.

Aside from their basic plea to strike down as unconstitutional the cityhood laws in question, petitioners and petitioners-in-intervention collectively pray that an order issue enjoining the COMELEC from conducting plebiscites in the affected areas. An alternative prayer would urge the Court to restrain the poll body from proclaiming the plebiscite results.

On July 24, 2007, the Court en banc resolved to consolidate the petitions and the petitions-in-intervention. On March 11, 2008, it heard the parties in oral arguments.

In the main, the issues to which all others must yield pivot on whether or not the cityhood laws violate (1) Sec. 10. Art. X of the Constitution and (2) the equal protection clause.

In the November 18, 2008 Decision granting the petitions, Justice Antonio T. Carpio, for the Court, resolved the twin posers in the affirmative and accordingly declared the cityhood laws unconstitutional, deviating as they do from the uniform and non-discriminatory income criterion prescribed by the LGC of 1991.  In so doing, the ponencia veritably agreed with the petitioners that the Constitution, in clear and unambiguous language, requires that all the criteria for the creation of a city shall be embodied and written in the LGC, and not in any other law.

After a circumspect reflection, the Court is disposed to reconsider.

Petitioners’ threshold posture, characterized by a strained interpretation of the Constitution, if accorded cogency, would veritably curtail and cripple Congress’ valid exercise of its authority to create political subdivisions.

By constitutional design[27] and as a matter of long-established principle, the power to create political subdivisions or LGUs is essentially legislative in character.[28] But even without any constitutional grant, Congress can, by law, create, divide, merge, or altogether abolish or alter the boundaries of a province, city, or municipality. We said as much in the fairly recent case, Sema v. CIMELEC.[29]  The 1987 Constitution, under its Art. X, Sec. 10, nonetheless provides for the creation of LGUs, thus:

Section 10. No province, city, municipality, or barangay shall be created, divided, merged, abolished, or its boundary substantially altered, except in accordance with the criteria established in the local government code and subject to approval by a majority of the votes cast in a plebiscite in the political units directly affected.  ( mphasis supplied.)

As may be noted, the afore-quoted provision specifically provides for the creation of political subdivisions “in accordance with the criteria established in the local government code,” subject to the approval of the voters in the unit concerned. The criteria referred to are the verifiable indicators of viability, i.e., area, population, and income, now set forth in Sec. 450 of the LGC of 1991, as amended by RA 9009. The petitioners would parlay the thesis that these indicators or criteria must be written only in the LGC and not in any other statute. Doubtless, the code they are referring to is the LGC of 1991. Pushing their point, they conclude that the cityhood laws that exempted the respondent LGUs from the income standard spelled out in the amendatory RA 9009 offend the Constitution.

Petitioners’ posture does not persuade.

The supposedly infringed Art. X, Sec. 10 is not a new constitutional provision. Save for the use of the term “barrio” in lieu of “barangay,” “may be” instead of “shall,” the change of the phrase “unit or units” to “political unit” and the addition of the modifier “directly” to the word “affected,” the aforesaid provision is a substantial reproduction of Art. XI, Sec. 3 of the 1973 Constitution, which reads:

Section 3. No province, city, municipality, or barrio may be created, divided, merged, abolished, or its boundary substantially altered, except in accordance with the criteria established in the local government code and subject to approval by a majority of the votes cast in a plebiscite in the unit or units affected.  ( mphasis supplied.)

It bears notice, however, that the “code” similarly referred to in the 1973 and 1987 Constitutions is clearly but a law Congress enacted. This is consistent with the aforementioned plenary power of Congress to create political units. Necessarily, since Congress wields the vast poser of creating political subdivisions, surely it can exercise the lesser authority of requiring a set of criteria, standards, or ascertainable indicators of viability for their creation. Thus, the only conceivable reason why the Constitution employs the clause “in accordance with the criteria established in the local government code” is to lay stress that it is Congress alone, and no other, which can impose the criteria. The eminent constitutionalist, Fr. Joaquin G. Bernas, S.J., in his treatise on Constitutional Law, specifically on the subject provision, explains:

Prior to 1965, there was a certain lack of clarity with regard to the power to create, divide, merge, dissolve, or change the boundaries of municipal corporations. The extent to which the executive may share in this power was obscured by Cardona v. Municipality of Binangonan.[30] Pelaez v. Auditor General subsequently clarified the Cardona case when the Supreme Court said that “the authority to create municipal corporations is essentially legislative in nature.”[31] Pelaez, however, conceded that “the power to fix such common boundary, in order to avoid or settle conflicts of jurisdiction between adjoining municipalities, may partake of an administrative nature-involving as it does, the adoption of means and ways to carry into effect the law creating said municipalities.”[32] Pelaez was silent about division, merger, and dissolution of municipal corporations. But since division in effect creates a new municipality, and both dissolution and merger in effect abolish a legal creation, it may fairly be inferred that these acts are also legislative in nature.

Section 10 [Art. X of the 1987 Constitution], which is a legacy from the 1973 Constitution, goes further than the doctrine in the Pelaez case. It not only makes creation, division, merger, abolition or substantial alteration of boundaries of provinces, cities, municipalities x x x subject to “criteria established in the local government code,” thereby declaring these actions properly legislative, but it also makes creation, division, merger, abolition or substantial alteration of boundaries “subject to approval by a majority of the votes cast in a plebiscite in the political units directly affected.”[33] x x x (Emphasis added.)

It remains to be observed at this juncture that when the 1987 Constitution speaks of the LGC, the reference cannot be to any specific statute or codification of laws, let alone the LGC of 1991.[34]  Be it noted that at the time of the adoption of the 1987 Constitution, Batas Pambansa Blg. (BP) 337, the then LGC, was still in effect. Accordingly, had the framers of the 1987 Constitution intended to isolate the embodiment of the criteria only in the LGC, then they would have actually referred to BP 337. Also, they would then not have provided for the enactment by Congress of a new LGC, as they did in Art. X, Sec. 3[35] of the Constitution.

Consistent with its plenary legislative power on the matter, Congress can, via either a consolidated set of laws or a much simpler, single-subject enactment, impose the said verifiable criteria of viability. These criteria need not be embodied in the local government code, albeit this code is the ideal repository to ensure, as much as possible, the element of uniformity. Congress can even, after making a codification, enact an amendatory law, adding to the existing layers of indicators earlier codified, just as efficaciously as it may reduce the same.  In this case, the amendatory RA 9009 upped the already codified income requirement from PhP 20 million to PhP 100 million.  At the end of the day, the passage of amendatory laws is no different from the enactment of laws, i.e., the cityhood laws specifically exempting a particular political subdivision from the criteria earlier mentioned. Congress, in enacting the exempting law/s, effectively decreased the already codified indicators.

Petitioners’ theory that Congress must provide the criteria solely in the LGC and not in any other law strikes the Court as illogical. For if we pursue their contention to its logical conclusion, then RA 9009 embodying the new and increased income criterion would, in a way, also suffer the vice of unconstitutionality. It is startling, however, that petitioners do not question the constitutionality of RA 9009, as they in fact use said law as an argument for the alleged unconstitutionality of the cityhood laws.

As it were, Congress, through the medium of the cityhood laws, validly decreased the income criterion vis-à-vis the respondent LGUs, but without necessarily being unreasonably discriminatory, as shall be discussed shortly, by reverting to the PhP 20 million threshold what it earlier raised to PhP 100 million. The legislative intent not to subject respondent LGUs to the more stringent requirements of RA 9009 finds expression in the following uniform provision of the cityhood laws:

Exemption from Republic Act No. 9009. – The City of x x x shall be exempted from the income requirement prescribed under Republic Act No. 9009.

In any event, petitioners’ constitutional objection would still be untenable even if we were to assume purely ex hypothesi the correctness of their underlying thesis, viz: that the conversion of a municipality to a city shall be in accordance with, among other things, the income criterion set forth in the LGC of 1991, and in no other; otherwise, the conversion is invalid. We shall explain.

Looking at the circumstances behind the enactment of the laws subject of contention, the Court finds that the LGC-amending RA 9009, no less, intended the LGUs covered by the cityhood laws to be exempt from the PhP 100 million income criterion.  In other words, the cityhood laws, which merely carried out the intent of RA 9009, adhered, in the final analysis, to the “criteria established in the Local Government Code,” pursuant to Sec. 10, Art. X of the 1987 Constitution.  We shall now proceed to discuss this exemption angle.[36]

Among the criteria established in the LGC pursuant to Sec.10, Art. X of the 1987 Constitution are those detailed in Sec. 450 of the LGC of 1991 under the heading “Requisites for Creation.” The section sets the minimum income qualifying bar before a municipality or a cluster of barangays may be considered for cityhood. Originally, Sec. 164 of BP 337 imposed an average regular annual income “of at least ten million pesos for the last three consecutive years” as a minimum income standard for a municipal-to-city conversion. The LGC that BP 337 established was superseded by the LGC of 1991 whose then Sec. 450 provided that “[a] municipality or cluster of barangays may be converted into a component city if it has an average annual income, x x x of at least twenty million pesos (P20,000,000.00) for at least two (2) consecutive years based on 1991 constant prices x x x.” RA 9009 in turn amended said Sec. 450 by further increasing the income requirement to PhP 100 million, thus:

Section 450.  Requisites for Creation. – (a) A municipality or a cluster of barangays may be converted into a component city if it has a locally generated average annual income, as certified by the Department of Finance, of at least One Hundred Million Pesos (P100,000,000.00) for the last two (2) consecutive years based on 2000 constant prices, and if it has either of the following requisites:

x x x x

(c) The average annual income shall include the income accruing to the general fund, exclusive of special funds, transfers, and non-recurring income.  ( mphasis supplied.)

The legislative intent is not at all times accurately reflected in the manner in which the resulting law is couched.  Thus, applying a verba legis[37] or strictly literal interpretation of a statute may render it meaningless and lead to inconvenience, an absurd situation or injustice.[38] To obviate this aberration, and bearing in mind the principle that the intent or the spirit of the law is the law itself,[39] resort should be to the rule that the spirit of the law controls its letter.[40]

It is in this respect that the history of the passage of RA 9009 and the logical inferences derivable therefrom assume relevancy in discovering legislative intent.[41]

The rationale behind the enactment of RA 9009 to amend Sec. 450 of the LGC of 1991 can reasonably be deduced from Senator Pimentel’s sponsorship speech on S. Bill No. 2157. Of particular significance is his statement regarding the basis for the proposed increase from PhP 20 million to PhP 100 million in the income requirement for municipalities wanting to be converted into cities, viz:

Senator Pimentel. Mr. President, I would have wanted this bill to be included in the whole set of proposed amendments that we have introduced to precisely amend the [LGC].  However, it is a fact that there is a mad rush of municipalities wanting to be converted into cities.  Whereas in 1991, when the [LGC] was approved, there were only 60 cities, today the number has increased to 85 cities, with 41 more municipalities applying for conversion x x x.  At the rate we are going, I am apprehensive that before long this nation will be a nation of all cities and no municipalities.

It is for that reason, Mr. President, that we are proposing among other things, that the financial requirement, which, under the [LGC], is fixed at P20 million, be raised to P100 million to enable a municipality to have the right to be converted into a city, and the P100 million should be sourced from locally generated funds.

Congress to be sure knew, when RA 9009 was being deliberated upon, of the pendency of several bills on cityhood, wherein the applying municipalities were qualified under the then obtaining PhP 20 million-income threshold. These included respondent LGUs. Thus, equally noteworthy is the ensuing excerpts from the floor exchange between then Senate President Franklin Drilon and Senator Pimentel, the latter stopping short of saying that the income threshold of PhP 100 million under S. Bill No. 2157 would not apply to municipalities that have pending cityhood bills, thus:

THE PRESIDENT.  The Chair would like to ask for some clarificatory point. x x x

THE PRESIDENT.  This is just on the point of the pending bills in the Senate which propose the conversion of a number of municipalities into cities and which qualify under the present standard.

We would like to know the view of the sponsor:  Assuming that this bill becomes a law, will the Chamber apply the standard as proposed in this bill to those bills which are pending for consideration?

SENATOR  PIMENTEL, Mr. President, it might not be fair to make this bill x x x [if] approved, retroact to the bills that are pending in the Senate for conversion from municipalities to cities.

THE PRESIDENT.  Will there be an appropriate language crafted to reflect that view?  Or does it not become a policy of the Chamber, assuming that this bill becomes a law x x x that it will apply to those bills which are already approved by the House under the old version of the [LGC] and are now pending in the Senate?  The Chair does not know if we can craft a language which will limit the application to those which are not yet in the Senate.  Or is that a policy that the Chamber will adopt?

SENATOR PIMENTEL. Mr. President, personally, I do not think it is necessary to put that provision because what we are saying here will form part of the interpretation of this bill.  Besides, if there is no retroactivity clause, I do not think that the bill would have any retroactive effect.

THE PRESIDENT.  So the understanding is that those bills which are already pending in the Chamber will not be affected.

SENATOR PIMENTEL.  These will not be affected, Mr. President.[42]  (Emphasis and underscoring supplied.)

What the foregoing Pimental-Drilon exchange eloquently indicates are the following complementary legislative intentions: (1) the then pending cityhood bills would be outside the pale of the minimum income requirement of PhP 100 million that S. Bill No. 2159 proposes; and (2)  RA 9009 would not have any retroactive effect insofar as the cityhood bills are concerned.

Given the foregoing perspective, it is not amiss to state that the basis for the inclusion of the exemption clause of the cityhood laws is the clear-cut intent of Congress of not according retroactive effect to RA 9009.   Not only do the congressional records bear the legislative intent of exempting the cityhood laws from the income requirement of PhP 100 million. Congress has now made its intention to exempt express in the challenged cityhood laws.

Legislative intent is part and parcel of the law, the controlling factor in interpreting a statute.  In construing a statute, the proper course is to start out and follow the true intent of the Legislature and to adopt the sense that best harmonizes with the context and promotes in the fullest manner the policy and objects of the legislature.[43] In fact, any interpretation that runs counter to the legislative intent is unacceptable and invalid.[44]  Torres v. Limjap could not have been more precise:

The intent of a Statute is the Law. – If a statute is valid, it is to have effect according to the purpose and intent of the lawmaker.  The intent is x x x the essence of the law and the primary rule of construction is to ascertain and give effect to that intent.  The intention of the legislature in enacting a law is the law itself, and must be enforced when ascertained, although it may not be consistent with the strict letter of the statute.  Courts will not follow the letter of a statute when it leads away from the true intent and purpose of the legislature and to conclusions inconsistent with the general purpose of the act.  Intent is the spirit which gives life to a legislative enactment.  In construing statutes the proper course is to start out and follow the true intent of the legislature x x x.[45]  ( mphasis supplied.)

As emphasized at the outset, behind every law lies the presumption of constitutionality.[46] Consequently, to him who would assert the unconstitutionality of a statute belongs the burden of proving otherwise.  Laws will only be declared invalid if a conflict with the Constitution is beyond reasonable doubt.[47]  Unfortunately for petitioners and petitioners-in-intervention, they failed to discharge their heavy burden.

It is contended that the deliberations on the cityhood bills and the covering joint resolution were undertaken in the 11th and/or the 12th Congress. Accordingly, so the argument goes, such deliberations, more particularly those on the unapproved resolution exempting from RA 9009 certain municipalities, are without significance and would not qualify as extrinsic aids in construing the cityhood laws that were passed during  the 13th Congress, Congress not being a continuing body.

The argument is specious and glosses over the reality that the cityhood bills––which were already being deliberated upon even perhaps before the conception of RA 9009––were again being considered during the 13th Congress after being tossed around in the two previous Congresses. And specific reference to the cityhood bills was also made during the deliberations on RA 9009. At the end of the day, it is really immaterial if Congress is not a continuing legislative body. What is important is that the debates, deliberations, and proceedings of Congress and the steps taken in the enactment of the law, in this case the cityhood laws in relation to RA 9009 or vice versa, were part of its legislative history and may be consulted, if appropriate, as aids in the interpretation of the law.[48]  And of course the earlier cited Drilon-Pimentel exchange on whether or not the 16 municipalities in question would be covered by RA 9009 is another vital link to the historical chain of the cityhood bills. This and other proceedings on the bills are spread in the Congressional journals, which cannot be conveniently reduced to pure rhetoric without meaning whatsoever, on the simplistic and non-sequitur pretext that Congress is not a continuing body and that unfinished business in either chamber is deemed terminated at the end of the term of Congress.

This brings us to the challenge to the constitutionality of cityhood laws on equal protection grounds.

To the petitioners, the cityhood laws, by granting special treatment to respondent municipalities/LGUs by way of exemption from the standard PhP 100 million minimum income requirement, violate Sec.1, Art. III of the Constitution, which in part provides that no person shall “be denied the equal protection of the laws.”

Petitioners’ challenge is not well taken. At its most basic, the equal protection clause proscribes undue favor as well as hostile discrimination. Hence, a law need not operate with equal force on all persons or things to be conformable with Sec. 1, Art. III of the Constitution.

The equal protection guarantee is embraced in the broader and elastic concept of due process, every unfair discrimination being an offense against the requirements of justice and fair play. It has nonetheless come as a separate clause in Sec. 1, Art. III of the Constitution to provide for a more specific protection against any undue discrimination or antagonism from government.  Arbitrariness in general may be assailed on the basis of the due process clause. But if a particular challenged act partakes of an unwarranted partiality or prejudice, the sharper weapon to cut it down is the equal protection clause.[49] This constitutional protection extends to all persons, natural or artificial, within the territorial jurisdiction. Artificial persons, as the respondent LGUs herein, are, however, entitled to protection only insofar as their property is concerned.[50]

In the proceedings at bar, petitioner LCP and the intervenors cannot plausibly invoke the equal protection clause, precisely because no deprivation of property results by virtue of the enactment of the cityhood laws. The LCP’s claim that the IRA of its member-cities will be substantially reduced on account of the conversion into cities of the respondent LGUs would not suffice to bring it within the ambit of the constitutional guarantee. Indeed, it is presumptuous on the part of the LCP member-cities to already stake a claim on the IRA, as if it were their property, as the IRA is yet to be allocated. For the same reason, the municipalities that are not covered by the uniform exemption clause in the cityhood laws cannot validly invoke constitutional protection. For, at this point, the conversion of a municipality into a city will only affect its status as a political unit, but not its property as such.

As a matter of settled legal principle, the fundamental right of equal protection does not require absolute equality. It is enough that all persons or things similarly situated should be treated alike, both as to rights or privileges conferred and responsibilities or obligations imposed. The equal protection clause does not preclude the state from recognizing and acting upon factual differences between individuals and classes. It recognizes that inherent in the right to legislate is the right to classify,[51] necessarily implying that the equality guaranteed is not violated by a legislation based on reasonable classification. Classification, to be reasonable, must (1) rest on substantial distinctions; (2) be germane to the purpose of the law; (3) not be limited to existing conditions only; and (4) apply equally to all members of the same class.[52]  The Court finds that all these requisites have been met by the laws challenged as arbitrary and discriminatory under the equal protection clause.

As things stand, the favorable treatment accorded the sixteen (16) municipalities by the cityhood laws rests on substantial distinction. Indeed, respondent LGUs, which are subjected only to the erstwhile PhP 20 million income criterion instead of the stringent income requirement prescribed in RA 9009, are substantially different from other municipalities desirous to be cities. Looking back, we note that respondent LGUs had pending cityhood bills before the passage of RA 9009. There lies part of the tipping difference. And years before the enactment of the amendatory RA 9009, respondents LGUs had already met the income criterion exacted for cityhood under the LGC of 1991. Due to extraneous circumstances, however, the bills for their conversion remained unacted upon by Congress. As aptly observed by then Senator, now Manila Mayor, Alfredo Lim in his speech sponsoring H. Joint Resolution No. 1, or the cityhood bills, respondent LGUs saw themselves confronted with the “changing of the rules in the middle of the game.”  Some excerpts of Senator Lim’s sponsorship speech:

x x x [D]uring the Eleventh Congress, fifty-seven (57) municipalities applied for city status, confident that each has met the requisites for conversion under Section 450 of the [LGC], particularly the income threshold of P20 million.  Of the 57 that filed, thirty-two (32) were enacted into law; x x x while the rest – twenty-four (24) in all – failed to pass through Congress.  Shortly before the long recess of Congress in February 2001, to give way to the May elections x x x, Senate Bill No. 2157, which eventually became [RA] 9009, was passed into law, effectively raising the income requirement for creation of cities to a whooping P100 million x x x.  Much as the proponents of the 24 cityhood bills then pending struggled to beat the effectivity of the law on June 30, 2001, events that then unfolded were swift and overwhelming that Congress just did not have the time to act on the measures.

Some of these intervening events were x x x the impeachment of President Estrada x x x and the May 2001 elections.

The imposition of a much higher income requirement for the creation of a city x x x was unfair; like any sport – changing the rules in the middle of the game.

Undaunted, they came back during the [12th] Congress x x x.  They filed House Joint Resolution No. 29 seeking exemption from the higher income requirement of RA 9009.   For the second time, [however], time ran out from them.

For many of the municipalities whose Cityhood Bills are now under consideration, this year, at the closing days of the [13th] Congress, marks their ninth year appealing for fairness and justice. x x x

I, for one, share their view that fairness dictates that they should be given a legal remedy by which they could be allowed to prove that they have all the necessary qualifications for city status using the criteria set forth under the [LGC] prior to its amendment by RA 9009.  Hence, when House Joint Resolution No. 1 reached the Senate x x x I immediately set the public hearing x x x.  On July 25, 2006, I filed Committee Report No. 84 x x x. On September 6, I delivered the sponsorship x x x.

x x x By November 14, the measure had reverted to the period of individual amendments.  This was when the then acting majority leader, x x x informed the Body that Senator Pimentel and the proponents of House Joint Resolution No. 1 have agreed to the proposal of the Minority Leader for the House to first approve the individual Cityhood Bills of the qualified municipalities, along with the provision exempting each of them from the higher income requirement of RA 9009. x x x This led to the certification issued by the proponents short-listing fourteen (14) municipalities deemed to be qualified for city-status.

Acting on the suggestion of Senator Pimentel, the proponents lost no time in working for the approval by the House of Representatives of their individual Cityhood Bills, each containing a provision of exemption from the higher income requirement of RA 9009.  On the last session day of last year, December 21, the House transmitted to the Senate the Cityhood Bills of twelve out of the 14 pre-qualified municipalities.  Your Committee immediately conducted the public hearing x x x.

The whole process I enumerated [span] three Congresses x x x.

In essence, the Cityhood Bills now under consideration will have the same effect as that of House Joint Resolution No. 1 because each of the 12 bills seeks exemption from the higher income requirement of RA 9009.  The proponents are invoking the exemption on the basis of justice and fairness.

Each of the 12 municipalities has all the requisites for conversion into a component city based on the old requirements set forth under Section 450 of the [LGC], prior to its amendment by RA 9009, namely: x x x[53] ( mphasis supplied.)

In hindsight, the peculiar conditions, as depicted in Senator Lim’s speech, which respondent LGUs found themselves in were unsettling. They were qualified cityhood applicants before the enactment of RA 009. Because of events they had absolutely nothing to do with, a spoiler in the form of RA 9009 supervened. Now, then, to impose on them the much higher income requirement after what they have gone through would appear to be indeed “unfair,” to borrow from Senator Lim.  Thus, the imperatives of fairness dictate that they should be given a legal remedy by which they would be allowed to prove that they have all the necessary qualifications for city status, using the criteria set forth under the LGC of 1991 prior to its amendment by RA 9009.  Truly, the peculiar conditions of respondent LGUs, which are actual and real, provide sufficient grounds for legislative classification.

To be sure, courts, regardless of doubts they might be entertaining, cannot question the wisdom of the congressional classification, if reasonable, or the motivation underpinning the classification.[54]  By the same token, they do not sit to determine the propriety or efficacy of the remedies Congress has specifically chosen to extend.  That is its prerogative. The power of the Legislature to make distinctions and classifications among persons is, to reiterate, neither curtailed nor denied by the equal protection clause. A law can be violative of the constitutional limitation only when the classification is without reasonable basis.

The classification is also germane to the purpose of the law. The exemption of respondent LGUs/municipalities from the PhP 100 million income requirement was meant to reduce the inequality occasioned by the passage of the amendatory RA 9009. From another perspective, the exemption was unquestionably designed to insure that fairness and justice would be accorded respondent LGUs.  Let it be noted that what were then the cityhood bills covering respondent LGUs were part and parcel of the original 57 conversion bills filed in the 11th Congress, 33 of those became laws before the adjournment of that Congress. The then bills of the challenged cityhood laws were not acted upon due, inter alia, to the impeachment of then President Estrada, the related jueteng scandal investigations conducted before, and the EDSA events that followed the aborted impeachment.

While the equal protection guarantee frowns upon the creation of a privileged class without justification, inherent in the equality clause is the exhortation for the Legislature to pass laws promoting equality or reducing existing inequalities.  The enactment of the cityhood laws was in a real sense an attempt on the part of Congress to address the inequity dealt the respondent LGUs. These laws positively promoted the equality and eliminated the inequality, doubtless unintended, between respondent municipalities and the thirty-three (33) other municipalities whose cityhood bills were enacted during the 11th Congress. Respondent municipalities and the 33 other municipalities, which had already been elevated to city status, were all found to be qualified under the old Sec. 450 of the LGC of 1991 during the 11th Congress.  As such, both respondent LGUs and the 33 other former municipalities are under like circumstances and conditions.  There is, thus, no rhyme or reason why an exemption from the PhP 100 million requirement cannot be given to respondent LGUs.  Indeed, to deny respondent LGUs/municipalities the same rights and privileges accorded to the 33 other municipalities when, at the outset they were similarly situated, is tantamount to denying the former the protective mantle of the equal protection clause.  In effect, petitioners and petitioners-in-intervention are creating an absurd situation in which an alleged violation of the equal protection clause of the Constitution is remedied by another violation of the same clause.  The irony is not lost to the Court.

Then too the non-retroactive effect of RA 9009 is not limited in application only to conditions existing at the time of its enactment.  It is intended to apply for all time, as long as the contemplated conditions obtain.  To be more precise, the legislative intent underlying the enactment of RA 9009 to exclude would-be-cities from the PhP 100 million criterion would hold sway, as long as the corresponding cityhood bill has been filed before the effectivity of RA 9009 and the concerned municipality qualifies for conversion into a city under the original version of Sec. 450 of the LGC of 1991.

Viewed in its proper light, the common exemption clause in the cityhood laws is an application of the non-retroactive effect of RA 9009 on the cityhood bills.  It is not a declaration of certain rights, but a mere declaration of prior qualification and/or compliance with the non-retroactive effect of RA 9009.

Lastly and in connection with the third requisite, the uniform exemption clause would apply to municipalities that had pending cityhood bills before the passage of RA 9009 and were compliant with then Sec. 450 of the LGC of 1991, which prescribed an income requirement of PhP 20 million. It is hard to imagine, however, if there are still municipalities out there belonging in context to the same class as the sixteen (16) respondent LGUs. Municipalities that cannot claim to belong to the same class as the 16 cannot seek refuge in the cityhood laws. The former have to comply with the PhP 100 million income requirement imposed by RA 9009.

A final consideration. The existence of the cities consequent to the approval of the creating, but challenged, cityhood laws in the plebiscites held in the affected LGUs is now an operative fact. New cities appear to have been organized and are functioning accordingly, with new sets of officials and employees. Other resulting events need not be enumerated. The operative fact doctrine provides another reason for upholding the constitutionality of the cityhood laws in question.

In view of the foregoing discussion, the Court ought to abandon as it hereby abandons and sets aside the Decision of November 18, 2008 subject of reconsideration. And by way of summing up the main arguments in support of this disposition, the Court hereby declares the following:

(1) Congress did not intend the increased income requirement in RA 9009 to apply to the cityhood bills which became the cityhood laws in question. In other words, Congress intended the subject cityhood laws to be exempted from the income requirement of PhP 100 million prescribed by RA 9009;

(2) The cityhood laws merely carry out the intent of RA 9009, now Sec. 450 of the LGC of 1991, to exempt respondent LGUs from the PhP 100 million income requirement;

(3) The deliberations of the 11th or 12th Congress on unapproved bills or resolutions are extrinsic aids in interpreting a law passed in the 13th Congress.   It is really immaterial if Congress is not a continuing body. The hearings and deliberations during the 11th and 12th Congress may still be used as extrinsic reference inasmuch as the same cityhood bills which were filed before the passage of RA 9009 were being considered during the 13th Congress. Courts may fall back on the history of a law, as here, as extrinsic aid of statutory construction if the literal application of the law results in absurdity or injustice.

(4) The exemption accorded the 16 municipalities is based on the fact that each had pending cityhood bills long before the enactment of RA 9009 that substantially distinguish them from other municipalities aiming for cityhood.  On top of this, each of the 16 also met the PhP 20 million income level exacted under the original Sec. 450 of the 1991 LGC.

And to stress the obvious, the cityhood laws are presumed constitutional. As we see it, petitioners have not overturned the presumptive constitutionality of the laws in question.

WHEREFORE, respondent LGUs’ Motion for Reconsideration dated June 2, 2009, their “Motion to Amend the Resolution of April 28, 2009 by Declaring Instead that Respondents’  ‘Motion for Reconsideration of the Resolution of March 31, 2009’ and ‘Motion for Leave to File and to Admit Attached Second Motion for Reconsideration of the Decision Dated November 18, 2008’ Remain Unresolved and to Conduct Further Proceedings,” dated May 14, 2009, and their second Motion for Reconsideration of the Decision dated November 18, 2008 are GRANTED. The June 2, 2009, the March 31, 2009, and April 31, 2009 Resolutions are REVERSED and SET ASIDE.  The entry of judgment made on May 21, 2009 must accordingly be RECALLED.

The instant consolidated petitions and petitions-in-intervention are DISMISSED. The cityhood laws, namely Republic Act Nos. 9389, 9390, 9391, 9392, 9393, 9394, 9398, 9404, 9405, 9407, 9408, 9409, 9434, 9435, 9436, and 9491 are declared VALID and CONSTITUTIONAL.

SO ORDERED.

PRESBITERO J. VELASCO, JR.
Associate Justice

WE CONCUR:

(No part)
REYNATO S. PUNO
Chief Justice

ANTONIO T. CARPIO
Associate Justice

RENATO C. CORONA
Associate Justice

(No part)
CONCHITA CARPIO MORALES
Associate Justice

ANTONIO EDUARDO B. NACHURA
Associate Justice

TERESITA J. LEONARDO-DE CASTRO
Associate Justice

ARTURO D. BRION
Associate Justice

DIOSDADO M. PERALTA
Associate Justice

LUCAS P. BERSAMIN
Associate Justice

(No part)
MARIANO C. DEL CASTILLO
Associate Justice

ROBERTO A. ABAD
Associate Justice

MARTIN S. VILLARAMA, JR.
Associate Justice

C E R T I F I C A T I O N

Pursuant to Section 13, Article VIII of the Constitution, it is hereby certified that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court.

REYNATO S. PUNO
Chief Justice

* No part.

[1] Roa v. Collector of Customs, 23 Phil. 315 (1912).

[2] People v. Purisima, Nos. L-42050-66, L-46229-32, L-46313-16 & L-46997, November 20, 1978, 86 SCRA 542; Villanueva v. City of Iloilo, No. L-26521, December 28, 1968, 26 SCRA 578.

[3] Alonzo v. Intermediate Appellate Court, G.R. L-72873, May 28, 1987, 150 SCRA 259; Roa v. Collector of Customs, supra; U.S. v. Co Chico, 14 Phil. 128 (1909).

[4] Garcia v. Social Security Commission Legal and Collection, G.R. No. 170735, December 17, 2007, 540 SCRA 456, 472; citing Escosura v. San Miguel Brewery, Inc., 114 Phil. 225 (1962).

[5]  Cocunut Oil Refiners Association, Inc. v. Torres, G.R. No. 132527, July 29, 2005, 465 SCRA 47; citing Basco v. Philippine Amusements and Gaming Corporation, G.R. No. 91649, May 14, 1991, 197 SCRA 52;  Yu Cong Eng v. Trinidad, 47 Phil. 387 (1925) and other cases.

[6] Cawalig v. COMELEC, G.R. Nos. 146319 & 146342, October 26, 2001, 368 SCRA 453.

[7] Cawalig v. COMELEC, id. Peralta v. COMELEC, Nos. L-47771, L-47803, L-47816, L-47767, L-47791 & L-47827, March 11, 1978, 82 SCRA 30.

[8] Mayor of Iloilo City.

[9] The sixteen (16) cityhood laws are the following:

1. R.A.  9389, otherwise known as “An Act converting the Municipality of Baybay in the Province of Leyte into a component city to be known as City of Baybay.”  Lapsed into law on March 15, 2007;

2. R.A.  9390 – as “An Act converting the municipality of Bogo in the Province of Cebu into a component city to be known as City of Bogo.”  Lapsed into law on March 15, 2007;

3. R.A. 9391 – “An Act converting the Municipality of Catbalogan in the Province of Western Samar into a component city to be known as the City of Catbalogan.”  Lapsed into law on March 15, 2007;

4. R.A. 9392 -  “An Act converting the Municipality of Tandag in the Province of Surigao del Sur into a component city to be known as City of Tandag.”  Lapsed into law on March 15, 2007;

5. R.A. 9394 – “An Act converting the Municipality of Borongan in the Province of Eastern Samar into a component city to be known as City of Borongan.”  Lapsed into law on March 16, 2007;

6. R.A.  9398 – “An Act converting the Municipality of Tayabas in  the  Province of  Quezon into a component city to be known as City of Tayabas.”  Lapsed into law on March 18, 2007;

7. R.A. 9393 -  “An Act converting the Municipality of Lamitan in the Province of  Basilan  into  a  component city  to be known as City of Lamitan.”  Lapsed into law on March 15, 2007;

8. R.A. 9404 – “An Act converting the Municipality of Tabuk in the Province of Kalinga into a component city to be known as City of Tabuk.”  Lapsed into law on March 23, 2007;

9. R.A. 9405 -  “An Act converting the Municipality of Bayugan in the Province of Agusan del Sur into a component city to be known as City of Bayugan.”  Lapsed into law on March 23, 2007;

10. R.A.  9407 – “An Act converting the Municipality of Batac in the Province of Ilocos Norte into a component city to be known as City of Batac.”  Lapsed into law on March 24, 2007;

11. R.A.  9408 – “An Act converting the Municipality of Mati in the Province of Davao Oriental into a component city to be known as City of Mati.”  Lapsed into law on March 24, 2007;

12. R.A. 9409 – “An Act converting the Municipality of Guihulngan in the Province of Negros Oriental into a component city to be known as City of Guihulngan.”  Lapsed into law on March 24, 2007;

13. R.A.  9434 – “An Act converting the Municipality of Cabadbaran in the Province of Agusan del Norte into a component city to be known as City of Cabadbaran.”  Lapsed into law on April 12, 2007;

14. R.A. 9436 -  “An Act converting the Municipality of Carcar in the Province of Cebu into a component city to be known as City of Carcar.”  Lapsed into law on April 15, 2007;

15. R.A.  9435 – “An Act converting the Municipality of El Salvador in the Province of Misamis Oriental into a component city to be known as City of El Salvador.”  Lapsed into law on April 12, 2007; and

16. R.A. 9491 – “An Act converting the Municipality of Naga in the Province of Cebu into a component city to be known as City of Naga.”  Lapsed into law on July 15, 2007.

[10] Penned by Associate Justice Antonio T. Carpio.

[11] Rollo (G.R. No. 178056), p. 2845. As alleged, the Court assumed that each of the cities existing when the cityhood bills were enacted had an income of PhP 100 million or more.

[12] Per Justice Leonardo-De Castro’s Reflections.

[13] Webster’s Third New International Dictionary 1363.

[14] G.R. Nos. 174153 & 174299, October 25, 2006, 505 SCRA 160.

[15] Cited in the opinion of Chief Justice Puno in Lambino.

[16] Sec. 10, Rule 51 of the Rules of Court provides that “If no appeal or motion for new trial or reconsideration is filed within the time provided in these Rules, the judgment or final resolution shall forthwith be entered by the clerk in the book of entries of judgments.”

[17] Uy v. Land Bank of the Philippines, G.R. No. 1361000, July 24, 2000, 336 SCRA 419.

[18] Tomawis v. Tabao-Caudang, G.R. No. 166547, September 12, 2007, 533 SCRA 68.

[19] Piczon v. Court of Appeals, G.R. Nos. 76378-81, September 24, 1990, 190 SCRA 31, 38.

[20] G.R. Nos. 156383 & 160723, July 31, 2006, 497 SCRA 327.

[21] July 1998 and June 2001.

[22] Journal, Senate 13th Congress 59th Session 1238 (January 23, 2007).

[23] Entitled “An Act Amending Section 450 of Republic Act No. 7160, Otherwise Known as The Local Government Code of 1991, by Increasing the Average Annual Income Requirement for a Municipality or Cluster of Barangays to be Converted into a Component City.”

[24] Entitled “Joint Resolution to Exempt Certain Municipalities Embodied in Bills Filed in Congress Before June 30, 2001 from the Coverage of [RA] 9009.” Annex “A,” Memorandum of Petitioners.

[25] Journal, Senate 13th Congress, 59th Session, pp. 1238-40, cited in Justice Reyes’ Dissent, p. 37.

[26] Sec. 285 of the 1991 LGC provides: Allocation to Local Government Units. — The share of [LGUs] in the [IRA] shall be allocated in the following manner:

(a) Provinces — Twenty-three percent (23%);

(b) Cities — Twenty-three percent (23%);

(c) Municipalities — Thirty-four percent (34%); and

(d) Barangays — Twenty percent (20%)

Provided, however, That the share of each province, city, and municipality shall be determined on the basis of the following formula:

(a) Population — Fifty percent (50%);

(b) Land Area — Twenty-five percent (25%); and

(c) Equal sharing — Twenty-five percent (25%)

x x x x

[27] Both the 1973 and 1987 Constitutions contain provisions on the creation of LGUs and both specifically provides that the creation shall be in accordance with the criteria established in the local government code.

[28] Torralba v. Municipality of Sibagat, No. L-59180, January 29, 1987, 147 SCRA 390, 394; Sema v. COMELEC, infra.

[29] G.R. Nos. 177597 & 178628, July 16, 2008, 558 SCRA 700.

[30] 36 Phil. 547 (1917).

[31] No. L-23825, December 24, 1965, 15 SCRA 569, 576.

[32] Id.

[33] Bernas, The 1987 Constitution of the Republic of the Philippines, A Commentary 124 (1996).

[34] Became effective on January 1, 1992.

[35] Section 3. The Congress shall enact a local government code which shall provide for a more responsive and accountable local government structure instituted through a system of decentralization x x x allocate among the different local government units their powers, responsibilities and resources, and provide for the qualifications, election, appointment and removal, term, salaries, powers and functions and duties of local officials, and all other matters relating to the organization and operation of the local units.

[36] Discussed in some detail in retired Justice Ruben T. Reyes’ dissent from the original Decision.

[37] Whenever possible, the words in a statute must be given their ordinary meaning. See La Bugal-B’laan Tribal Association, Inc. v. Ramos, G.R. No. 127882, December 1, 2004, 445 SCRA 1; citing Francisco, Jr. v. Nagmamalasakit na mga Manananggol ng Mga Manggagawang Pilipino, Inc., G.R. Nos. 160261-63 & 160277, November 10, 2003, 415 SCRA 44.

[38] Solid Homes v Tan, G.R. Nos. 145156-57, July 29, 2005, 465 SCRA 137; Southern Cross Cement Corporation v. Cement Manufacturers Association of the Philippines, G.R. No. 158540, August 3, 2005, 465 SCRA 532.

[39] Senarillos v. Hermosisima, 100 Phil. 501 (1956); Torres v. Limjap, 56 Phil. 141 (1931); Tamayo v. Gsell, 35 Phil. 953 (1916); U.S. v. Tamparong, 31 Phil. 321 (1915).

[40] Id.

[41] Coconut Oil Refiners Association v. Torres, G.R. No. 132527, July 29, 2005, 465 SCRA 47.

[42] See Justice Reyes’ Dissent promulgated on November 18, 2008; citing II Record, Senate, 13th Congress, pp. 167-168.  This is confirmed by the Journal of the Senate on January 29, 2007, p. 1240, which contains the following entry:

REMARKS OF SENATOR PIMENTEL

“Expressing his support for the sentiment of Senator Lim, Senator Pimentel stated that the local government units applying for cityhood are requesting to be exempted from the income requirement because when this was raised by RA 9009, the bills on conversion to cityhood were already pending in the House x x x. He recalled that during the deliberation on said law, when Senate President Drilon asked him if there were pending bills on the creation of cities, he replied that there were three, only to find out later on that there were, in fact, a number of cityhood bills pending in the House x x x.  He asked Senator Lim to be more patient and to allow Senators Roxas and Recto to interpellate on the bills the following day.”

[43] Coconut Oil Refiners Association, supra note 41.

[44] National Police Commission v. De Guzman, Jr., G.R. No. 106724, February 9, 1994, 229 SCRA 801.

[45] Torres v. Limjap, supra note 39; citing Sutherland, Statutory Construction, Vol. II, pp. 693-695.

[46] Heller v. Doe by Doe, 509 US 312, 113 S. Ct. 2637, 125 L. Ed. 2d 257 (1993);  Abbas v. Commission on Elections, G.R. Nos. 89651 & 89965, November 10, 1989, 179 SCRA 287; Salas v. Jarencio, G.R. No. L-29788, August 30, 1972, 46 SCRA 734; Yu Cong Eng v. Trinidad, 47 Phil. 387 (1925).

[47] Peralta v. Commission on Elections, Nos. L-47771, L-47803, L-47816, L-47767, L-47791 & L-47827, March 11, 1978, 82 SCRA 30; citing Cooper v. Telfair, 4 Dall. 14; Dodd, Cases on Constitutional Law 56 (3rd ed., 1942).

[48] Esso Standard Eastern, Inc. v. Commissioner of Internal Revenue, G.R. No. 28508, July 7, 1989, 175 SCRA 149; cited in Coconut Oil Refiners Association v. Torres, supra.

[49] Phil. Judges Association v. Prado, G.R. No. 105371, November 11, 1993, 227 SCRA 703.

[50] Smith, Bell & Co. v. Natividad, 40 Phil. 136 (1919).

[51] Bernas, The 1987 Constitution of the Republic of the Philippines, A Commentary 124 (1996).

[52] Id.

[53] Journal, Senate 13th Congress, 59th Session, pp. 1238-1240 (January 23, 2007); cited in Justice Reyes’ Dissenting Opinion, pp. 33-37.

[54] Pangilinan v. Maglaya, G.R. No. 104216, August 20, 1993, 225 SCRA 511.

D I S S E N T I N G   O P I N I O N

CARPIO, J.:

“A.M. No. 99-1-09-SC (dated  26 January 1999): In the Matter of Clarifying the Rule in Resolving Motions for Reconsideration

The Court Resolved as follows:

A MOTION FOR THE CONSIDERATION OF A DECISION OR RESOLUTION OF THE COURT EN BANC OR OF A DIVISION MAY BE GRANTED UPON A VOTE OF A MAJORITY OF THE MEMBERS OF THE EN BANC OR OF A DIVISION, AS THE CASE MAY BE, WHO ACTUALLY TOOK PART IN THE DELIBERATION OF THE MOTION.

IF THE VOTING RESULTS IN A TIE, THE MOTION  FOR RECONSIDERATION IS DEEMED DENIED.”  Emphasis supplied)

x x x x

[T]he reason for the rule (of immutability of final judgments) is that if, on the application of one party, the court could change its judgment to the prejudice of the other, it could thereafter, on application of the latter, again change the judgment and continue this practice indefinitely.  The equity of a particular case must yield to the overmastering need of certainty and unalterability of judicial pronouncements.

- Justice Lucas P. Bersamin, Apo Fruits Corporation v. Court of Appeals, G.R. No. 164195, 4 December 2009

The ponencia states that “since the instant cases fall under Sec. 4(2), Art. VIII of the Constitution, [Sec. 7, Rule 56 and the Resolution in A.M. No. 99-1-09-SC] ought to be applied in conjunction with the prescription of the Constitution that the cases ‘shall be decided with the concurrence of a majority of the Members who actually took part in the deliberations on the issues in the instant cases and voted thereon.”’

I dissent.

I. The Rules on Tie-Vote

Section 7, Rule 56 of the Rules of Court  expressly governs tie-votes in the en banc, thus:

SEC. 7. Procedure if opinion is equally divided. Where the court en banc is equally divided in opinion, or the necessary majority cannot be had, the case shall again be deliberated on, and if after such deliberation no decision is reached, the original action commenced in the court shall be dismissed; in appealed cases, the judgment or order appealed from shall stand affirmed; and on all incidental matters, the petition or motion shall be denied.   Emphasis supplied)

This provision contemplates three possible instances where the Supreme Court en banc may be equally divided in opinion or where the necessary majority[1] in the votes cannot be had.

First, in actions instituted originally in the Supreme Court, if there is a tie-vote, the Court en banc shall deliberate again.  After such re-deliberation and the Court remains equally divided, which means that no decision had been reached, the original action shall be dismissed.  In such a case, the tie-vote results in the dismissal of the action without establishing any jurisprudential precedent.

Significantly, a deadlock vote on an original action is not novel to the Court.  In fact, the Court had experienced such a deadlock in Cruz v. Secretary of Environment and Natural Resources,[2] Badoy, Jr. v. Comelec,[3] Antonio, Jr. v. Comelec,[4]   Agudo v. Comelec,[5] and People v. Lopez.[6]

1. Cruz v.  Secretary of Environment and Natural Resources

In Cruz v. Secretary of Environment and Natural Resources, petitioners Isagani Cruz and Cesar Europa brought a suit for prohibition and mandamus as citizens and taxpayers, assailing the constitutionality of certain provisions of Republic Act No. 8371, otherwise known as the Indigenous Peoples Rights Act of 1997 (IPRA), and its Implementing Rules and Regulations. Petitioners challenged the constitutionality of the IPRA “on the ground that its provisions amount to an unlawful deprivation of the State’s ownership over lands of the public domain as well as minerals and other natural resources therein, in violation of the regalian doctrine embodied in Section 2, Article XII of the Constitution.” The Court, via a Per Curiam resolution, dismissed the petition because the Court was equally divided in opinion, to wit:

After due deliberation on the petition, the members of the Court voted as follows:

Seven (7) voted to dismiss the petition. Justice Kapunan filed an opinion, which the Chief Justice and Justices Bellosillo, Quisumbing, and Santiago join, sustaining the validity of the challenged provisions of R.A. 8371. Justice Puno also filed a separate opinion sustaining all challenged provisions of the law with the exception of Section 1, Part II, Rule III of NCIP Administrative Order No. 1, series of 1998, the Rules and Regulations Implementing the IPRA, and Section 57 of the IPRA which he contends should be interpreted as dealing with the large-scale exploitation of natural resources and should be read in conjunction with Section 2, Article XII of the 1987 Constitution. On the other hand, Justice Mendoza voted to dismiss the petition solely on the ground that it does not raise a justiciable controversy and petitioners do not have standing to question the constitutionality of R.A. 8371.

Seven (7) other members of the Court voted to grant the petition. Justice Panganiban filed a separate opinion expressing the view that Sections 3 (a)(b), 5, 6, 7 (a)(b), 8, and related provisions of R.A. 8371 are unconstitutional. He reserves judgment on the constitutionality of Sections 58, 59, 65, and 66 of the law, which he believes must await the filing of specific cases by those whose rights may have been violated by the IPRA. Justice Vitug also filed a separate opinion expressing the view that Sections 3(a), 7, and 57 of R.A. 8371 are unconstitutional.  Justices Melo, Pardo, Buena, Gonzaga-Reyes, and De Leon join in the separate opinions of Justices Panganiban and Vitug.

As the votes were equally divided (7 to 7) and the necessary majority was not obtained, the case was redeliberated upon. However, after redeliberation, the voting remained the same. Accordingly, pursuant to Rule 56, Section 7 of the Rules of Civil Procedure, the petition is DISMISSED.[7]   Emphasis supplied)

On motion for reconsideration, the Court en banc,  by virtue of Section 7, Rule 56, denied the petitioners’ motion for reconsideration since the members of the Court en banc were equally divided on such motion.  In a minute Resolution promulgated on 21 September 2001, the Court stated that “the members of the Court who took part in the original deliberations on the petition find no reason to modify or in any way alter their views on the questions raised by petitioners and reiterated in their motion for reconsideration and therefore maintain their votes as stated in the resolution of December 6, 2000.”  Justice Angelina Sandoval Gutierrez took no part on the ground that she did not participate in the deliberations on the petition.

In short, the tie-vote on the main decision cannot invalidate the prior action of the Legislative and Executive branches in enacting RA 8371.  Moreover, the tie-vote on the motion for reconsideration resulted in the denial of the motion for reconsideration.  Thus, RA 8371 stands as valid.

2. Badoy, Jr. v. Comelec

In Badoy, Jr. v. Comelec, petitioner Badoy, Jr. prayed that Section 12(F) of Republic Act No. 6132 or  The 1971 Constitutional Convention Act be declared unconstitutional.  The voting of the Supreme Court Justices standing at five (5) votes in favor of constitutionality and five (5) votes against, the constitutionality of the provision was deemed upheld in conformity with Section 10, Article VIII of the Constitution then in force.  The petitions were, therefore, denied.

3. Antonio, Jr. v. Comelec

In Antonio, Jr. v. Comelec, the Supreme Court Justices were evenly divided on the issue of whether the Comelec should have ordered, as it did, a recanvass and proclamation on the basis of the returns of certain precincts in Batanes.  Five Justices believed that such a proclamation was a necessary precedent to a protest in the House Electoral Tribunal.  Five other Justices dissented.  The Court, pursuant to the Rules of Court, ordered a rehearing on the petition in G.R. No. L-31609 entitled Agudo v. Comelec.

4. Agudo v. Comelec

In Agudo v. Comelec, where the Court reheard G.R. No. L-31609, “the equal division (5 to 5) in the Justices’ opinions had persisted, thus calling for the application of Section 11, Rule 56 of the 1964 Revised Rules of Court.”[8]  Accordingly, the Court ordered the dismissal of the petition.

5. People v. Lopez

In People v. Lopez, then Solicitor General Lorenzo M. Tañada, filed in the name of the People of the Philippines, a petition for prohibition to enjoin Associate Judge Eusebio M. Lopez from conducting further proceedings and from otherwise taking further cognizance of criminal cases for treason against Benigno S. Aquino (No. 3527) and against Antonio de las Alas, and other treason cases of similar nature.  After the case was firstly heard, the Justices taking part were equally divided and no decision could be rendered; so the Court ordered a rehearing in accordance with Section 2 of Rule 56 in relation with Section 1 of Rule 58.  The case was submitted again for deliberation and decision. The votes remained tied at 4-4.  Thus, the petition was denied.

The above-cited cases, involving actions originally commenced in the Supreme Court, clearly demonstrate that the Court has consistently applied the Rules on tie-vote.  In accordance with such rules, the evenly divided Court directed the rehearing of those cases[9] and when, after the rehearings, the tie-vote persisted, the Court ordered the dismissal or denial of the petitions.

Second, in cases appealed to the Supreme Court, Section 7 of Rule 56 explicitly provides that if the Court en banc is still equally divided after re-deliberation, the judgment or order appealed from shall stand affirmed.  A tie-vote in cases arising under the Court’s appellate jurisdiction translates into a summary affirmance of the lower court’s ruling.[10]  In short, the tie-vote in the en banc cannot amend or reverse a prior majority action of a lower court, whose decision stands affirmed.

Third, on all incidental matters, which include motions for reconsideration, Section 7 of  Rule 56 specifically states that if the Court en banc is evenly divided on such matters, the petition or motion  shall be denied.

To settle any doubt on how a tie-vote on a motion for reconsideration should be interpreted, the Court en banc issued a clarificatory Resolution on 26 January 1999 in A.M. No. 99-1-09-SC, as follows:

A MOTION FOR THE CONSIDERATION OF A DECISION OR RESOLUTION OF THE COURT EN BANC OR OF A DIVISION MAY BE GRANTED UPON A VOTE OF A MAJORITY OF THE MEMBERS OF THE EN BANC OR OF A DIVISION, AS THE CASE MAY BE, WHO ACTUALLY TOOK PART IN THE DELIBERATION OF THE MOTION.

IF THE VOTING RESULTS IN A TIE, THE MOTION  FOR RECONSIDERATION IS DEEMED DENIED.   Emphasis supplied)

The clear and simple language of the clarificatory en banc Resolution requires no further explanation.  If the voting of the Court en banc results in a tie, the motion for reconsideration is deemed denied.  The Court’s prior majority action on the main decision stands affirmed.[11] This  clarificatory Resolution applies to all cases heard by the Court en banc, which includes not only cases involving the constitutionality of a law, but also, as expressly stated in Section 4(2), Article VIII of the Constitution, “all other cases which under the Rules of Court are required to be heard en banc.”   In short, Section 4(2) requires a majority vote of the Court en banc not only in cases involving the constitutionality of a law, but also in all other cases that are heard by the Court en banc.

The principle that a multi-member judicial body such as the Supreme Court cannot, based on a tie-vote, overrule a prior action is consistently applied in legislative bodies as well.[12]  In the book The Standard Code of Parliamentary Procedure, the author Alice Sturgis writes:

A tie vote on a motion means that the same number of members has voted in the affirmative as in the negative.  Since a majority vote, or more than half of the legal votes case, is required to adopt a motion, an equal or tie vote means that the motion is lost because it has failed to receive a majority vote.  A tie vote on a motion is not a deadlock vote that must be resolved; it is simply not a majority vote, and the motion is lost.[13]   Emphasis supplied)

Similarly, if the Philippine Supreme Court en banc is evenly split in its opinion on a motion for reconsideration, it is not a deadlock vote that must be resolved; it is simply not a majority vote, and the motion for reconsideration is defeated. More importantly, the tie-vote on a motion for reconsideration does not and cannot, in any instance and for any reason, supersede the prior majority vote on the main decision.

II. The Tie-Vote on the Second Motion for Reconsideration

Section 4(2), Article VIII of the 1987 Constitution provides:

(2) All cases involving the constitutionality of a treaty, international or executive agreement, or law which shall be heard by the Supreme Court en banc, and all other cases which under the Rules of Court are required to be heard en banc, including those involving the constitutionality, application, or operation of presidential decrees, proclamations, orders, instructions, ordinances, and other regulations, shall be decided with the concurrence of majority of the members who actually took part in the deliberations on the issues in the case and voted thereon.  Emphasis supplied)

Under Section 4(2), Article VIII of the Constitution, the requirement of a majority vote of the Supreme Court en banc applies not only to the constitutionality of a law, but also to the constitutionality of treaties, executive agreements, ordinances, regulations, and all other cases which under the Rules of Court shall be heard by the Court en banc.   To repeat, any case which is heard by the Court en banc shall be decided by a majority vote of the Court en banc.

To insure equal protection of the law, all cases required to be heard by the Court en banc under Section 4(2), Article VII of the Constitution must be governed by the same rules on voting, whether on the main decision or on the motion for reconsideration.  There can be no one rule for cases involving the constitutionality of a law and another rule for all other cases.  The Constitution makes no such distinction in Section 4(2) of Article VIII.   Undeniably, the Constitution does not require that motions for reconsideration in cases involving the constitutionality of a law shall be treated differently from motions for reconsideration in other cases heard by the Court en banc.  There is no basis for such a different treatment, and such a different treatment would violate the equal protection of the law.  Where the Constitution does not distinguish, this Court must not create a forced  and baseless distinction.

In the present cases, the voting on the main petitions was 6-5 to declare the sixteen Cityhood Laws unconstitutional.  Clearly, there was compliance with Section 4(2), Article VIII of the 1987 Constitution since  a majority of the members of the Court en banc, who actually took part in the deliberations, voted to declare unconstitutional the sixteen Cityhood Laws.

In the first motion for reconsideration, a majority of 7-5 voted to deny the motion for reconsideration.  Again, there was a clear majority that denied the first motion for reconsideration.  The majority of the Court en banc struck down the sixteen Cityhood Laws twice, first, during the deliberations on the main petitions, and second, during the deliberations on the first motion for reconsideration.

Thereafter, by deliberating on the second motion for reconsideration filed by respondents, the Court in effect allowed the filing of a  second motion for reconsideration, which is generally prohibited under the Rules of Court. The Court en banc, voting 6-6, denied the second motion for reconsideration in the Resolution of 28 April 2009.

The 6-6 tie-vote by the Court en banc on the second motion for reconsideration necessarily resulted in the denial of the second motion for reconsideration. Certainly, the 6-6 tie-vote did not overrule the prior majority en banc Decision of 18 November 2008, and the prior majority en banc Resolution of 31 March 2009 denying reconsideration.  The tie-vote on the second motion for reconsideration is not the same as a tie-vote on the main decision.  The Court en banc need not deliberate again because in case of a tie-vote on a second motion for reconsideration, which is an incidental matter, such motion is lost.  The tie-vote plainly signifies that there is no majority to overturn the prior 18 November 2008 Decision and 31 March 2009 Resolution, and the second motion for reconsideration must thus be denied.  Further, the tie-vote on the second motion for reconsideration did not mean that the present cases were left undecided because there remain the Decision of 18 November 2008 and Resolution of 31 March 2009 where majority of the Court en banc concurred in decreeing the unconstitutionality of the sixteen Cityhood Laws. In short, the 18 November 2008 Decision and 31 March 2009 Resolution, which were both reached with the concurrence of a majority of the Court en banc,  are not reconsidered but stand affirmed.[14]  These prior majority actions of the Court en banc can only be overruled by a new majority vote, not a tie-vote because a tie-vote cannot overrule a prior affirmative action.

Applying Section 7, Rule 56 and the clarificatory Resolution in  A.M. No. 99-1-09-SC to the present cases does not in any manner contravene the mandate of Section 4(2), Article VIII of the Constitution.  To repeat, the Court en banc deliberated on the petitions and, by a majority vote of 6-5, granted the petitions and declared the sixteen Cityhood Laws unconstitutional in the Decision of 18 November 2008.  Again, by a clear  majority vote of 7-5, the Court en banc voted to deny the first motion for reconsideration. Therefore, contrary to the ponencia, the present cases were decided with the concurrence of a majority of the Court en banc when it declared the unconstitutionality of the sixteen Cityhood Laws, pursuant to Section 4(2), Article VIII of the Constitution.

A.M. No. 99-1-09-SC applies to all cases heard by the Court en banc. Whether the case involves the constitutionality of a law, ordinance or regulation, or any civil, administrative or criminal case which under the Rules of Court must be heard en banc,  the case must be decided by a majority vote of the Court en banc as expressly required by Section 4(2), Article VIII of the Constitution. Any tie-vote in the motion for reconsideration results in the denial of the motion for reconsideration pursuant to A.M. No. 99-1-09-SC, which governs all cases heard by the Court en banc.

Further, to treat the second motion for reconsideration not as an incidental matter would  certainly render inutile the distinction set forth in Section 7, Rule 56 among original actions commenced in this Court, appeals from the judgments of lower courts, and incidental matters, such as motions.

III. Precedents Applying Section 7, Rule 56

In Santiago v. Comelec,[15] involving the constitutionality of  Republic Act No. 6735 (RA 6735), entitled “An Act Providing for a System of Initiative and Referendum and Appropriating Funds Therefor,” the Court en banc, in an 8-5 vote, held that RA 6735 is “incomplete, inadequate, or wanting in essential terms and conditions insofar as initiative on amendments to the Constitution is concerned.”  While the Court en banc did not expressly declare RA 6735 unconstitutional,  the majority of the Court en banc ruled that RA 6735, the law governing the implementation of the initiative system, was insufficient to amend the Constitution.  The majority of the Court en banc concluded that “the COMELEC should be permanently enjoined from entertaining or taking cognizance of any petition for initiative on amendments on the Constitution until a sufficient law shall have been validly enacted to provide for the implementation of the system.”[16]   On motion for reconsideration, the Court en banc voted 6-6-1,[17] inevitably resulting in the denial of the motion for reconsideration and affirmance of the prior majority action on the main petition.  In other words, the Court en banc’s ruling in Santiago that RA 6735 was inadequate to amend the Constitution, obtained via an 8-5 vote, was deemed affirmed by a tie-vote on the motion for reconsideration.  In fact, the Court’s decision in Santiago spelled the sudden death of the so-called PIRMA initiative that triggered Santiago.

The case of Cruz v. Secretary of Environment and Natural Resources also applies to the present cases. Petitioners in Cruz v. Secretary of Environment and Natural Resources challenged the constitutionality of certain provisions of Republic Act No. 8371, otherwise known as the Indigenous Peoples Rights Act of 1997 (IPRA).  There, the Court en banc was evenly divided not only on the main petition, but also on the motion for reconsideration.  In a minute Resolution promulgated on 21 September 2001, the Court en banc,  by virtue of Section 7, Rule 56, denied the petitioners’ motion for reconsideration since the members of the Court en banc were equally divided on such motion.  As a result, the Per Curiam Resolution dismissing the petition stood affirmed and the constitutionality of RA 8371 was deemed upheld.

Santiago and Cruz are squarely in point with the present cases because Santiago and Cruz, like the present cases, indisputably involve the constitutionality of a law and a tie-vote on the motion for reconsideration.

Applying Section 7, Rule 56,  the Court en banc, instead of prolonging their disposition, outrightly denied the motions for reconsideration in Santiago and Cruz. No rehearings and no redeliberations were set and conducted to re-examine the motions for reconsideration.  This is  precisely because such proceedings are absolutely without any basis. For this reason alone, the second motion for reconsideration in these cases must suffer the same fate as the motions for reconsideration in Santiago and Cruz — it must be summarily denied pursuant to Section 7, Rule 56.

Following the ponencia, the cases of Santiago and Cruz would be deemed unresolved.  Worse, the resolutions in Santiago and Cruz denying reconsideration due to a tie-vote would be deemed a blatant disregard of the mandate of Section 4(2), Article VIII of the 1987 Constitution.

IV. The Finality of the 18 November 2008 Decision

Respondents, in filing the Motion to Amend the Resolution of April 28, 2009 By Declaring Instead that Respondents’ Motion for Reconsideration of the Resolution of March 31, 2009  and Motion for Leave to File, and To Admit Attached Second Motion for Reconsideration of the Decision Dated November 18, 2008 Remain Unresolved and to Conduct Further Proceedings Thereon (Motion to Amend the Resolution of April 28, 2009), mistakenly believe that “with the 6-6 vote on the second motion for reconsideration, the issue of whether the Cityhood Laws were unconstitutional remained unresolved.”  In the first place, the Motion to Amend the Resolution of April 28, 2009 is a prohibited pleading.  A prohibited pleading is a scrap of paper, and can never be placed “on an equal, if not a higher, standing than a motion for reconsideration.”

There is nothing left to be resolved precisely because the tie-vote on the second motion for reconsideration simply means that there was no majority vote to overturn the 18 November 2008 Decision, and the second motion for reconsideration is lost. The tie in the voting does not leave the case undecided. There is still the 18 November 2008 Decision and the 31 March 2009 Resolution which must stand in view of the failure of the members of the Court en banc to muster the necessary vote for their reconsideration.[18] No further proceedings, much less re-deliberations by the Court en banc, are required.

Since the second motion for reconsideration was denied, pursuant to Section 7 of Rule 56, there is absolutely nothing which would preclude the 18 November 2008 Decision from becoming final after fifteen (15) days from receipt by the parties of the 28 April 2009 Resolution denying the second motion for reconsideration.

The Court had explicitly directed the parties, in the 28 April 2009 Resolution, to refrain from filing further pleadings as it would no longer entertain the same.  Yet, respondents opted to ignore and persistently defy such directive.  Aside from filing the Motion to Amend the Resolution of April 28, 2009, respondents filed three more pleadings, namely, (1) Motion for Reconsideration of the Resolution of 2 June 2009, (2) Urgent Motion to Resolve Pending Incidents, and (3) Appeal to Honorable Chief Justice Reynato S. Puno and Associate Justice Antonio Eduardo B. Nachura to Participate in the Resolution of Respondents’ Motion for Reconsideration of the Resolution of June 2, 2009.  All these pleadings, which were filed in direct contravention of the Court’s directive in the 28 April 2009 Resolution, are prohibited and are mere scraps of paper, unworthy of the Court’s attention.

Furthermore, having in fact been filed without express leave – no such leave ever having been granted by the Court, these pleadings are mere surplusage that did not need to be acted on, and did not give rise to any pending matter which would effectively forestall the finality of the 18 November 2008 Decision.

Clearly, these various pleadings reflect respondents’ desperate attempts to further delay the execution of the final decision in these consolidated cases. As pointed out in petitioners’ Comment Ad Cautelam,[19] respondents, “by every possible guise and conceivable stratagem, have stubbornly and persistently sought to evade the finality of the 18 November 2008 Decision.” Notably, respondents craftily phrased and titled their motions based on the Court’s last denial order or resolution, and deliberately avoided reference to the previous repeated denials by the Court.”   The Court cannot countenance such dilatory tactics.

While it is perfectly fine for respondents to defend their cause with all the vigor and resources at their command, respondents may not be allowed to persist in presenting to the Court arguments which have already been pronounced by final judgment to be without merit and their motions for reconsideration of that judgment which have been denied.[20]

Litigations must end and terminate at some point.  In the present cases, that point must be reckoned after the lapse of 15 days from the date of receipt by respondents’ counsel of the 28 April 2009 Resolution denying the second motion for reconsideration or on 21 May 2009, as certified by the Deputy Clerk of Court and Chief of the Judicial Records Office. Whether respondents understood, or simply refuse to understand, the meaning of this statement, there is no other meaning than to consider G.R. Nos. 176951, 177499, and 178056 finally closed and terminated on 21 May 2009.

Well-entrenched is the rule that a decision that has acquired finality becomes immutable and unalterable,[21] no longer subject to attack and cannot be modified directly or indirectly, and the court which rendered it, including this Court, had lost jurisdiction to modify it.[22]  The Court laid down this rule precisely “(1) to avoid delay in the administration of justice and thus procedurally, to make orderly the discharge of judicial business, and; (2) to put an end to judicial controversies, at the risk of occasional errors, which is why courts exist.”[23]  As Justice Bersamin stated in Apo Fruits Corporation v. Court of Appeals:[24]

[T]he reason for the rule is that if, on the application of one party, the court could change its judgment to the prejudice of the other, it could thereafter, on application of the latter, again change the judgment and continue this practice indefinitely.  The equity of a particular case must yield to the overmastering need of certainty and unalterability of judicial pronouncements.  Emphasis supplied)

Hence, when the 18 November 2008 Decision became final on 21 May 2009, this Court can no longer entertain and consider further arguments or submissions from the parties respecting the correctness of the decision, and nothing more is left to be discussed, clarified or done in these cases.[25]

In fact, in recognition of the finality of the 18 November 2008 Decision, the Commission on Elections issued  Resolution No. 8670, while the Department of Budget and Management issued Local Budget Memorandum No. 61.

COMELEC’s Resolution No. 8670 ordained that the voters in the 16 respondent municipalities shall vote not as cities, but as municipalities in the 10 May 2010 elections.

On the other hand, the Department of Budget and Management’s Local Budget Memorandum No. 61 set forth the Fiscal Year 2009 Final Internal Revenue Allotment Allocation of all the legally existing cities and municipalities in the whole country and the reversion of the 16 “newly-created cities” to municipalities.

Moreover, House Bill No. 6303, introduced by Representatives Carmen L. Cari, Eduardo R. Gullas, Rodolfo G. Plaza, Philip A. Pichay, Thelma Z. Almario, Wilfrido Mark M. Enverga, Manuel S. Agyao, Sharee Ann T. Tan, Edelmiro A. Amante, Mujiv S. Hataman, Jocelyn Sy Limkaichong, Ferdinand R. Marcos, Teodulo M. Coquilla and Yevgeny Vincente B. Emano, sought to amend Republic Act No. 9009 by inserting the following paragraph:

THE INCOME REQUIREMENT PRESCRIBED HEREIN SHALL NOT APPLY TO MUNICIPALITIES WHICH WERE SOUGHT TO BE CONVERTED INTO CITIES AS EMBODIED IN BILLS FILED BEFORE JUNE 30, 2001 AND WHOSE CHARTERS HAVE ALREADY BEEN APPROVED BY THE SENATE AND THE HOUSE OF REPRESENTATIVES.

House Bill No. 6303, in proposing to amend Republic Act No. 9009 by exempting the 16 respondent municipalities from the increased income requirement under the Local Government Code, is undoubtedly an admission that the 18 November 2008 Decision had become final and the Cityhood Laws are indeed unconstitutional. House Bill No. 6303 is clearly but an “attempt to possibly rectify the conceded fatal defect in the Cityhood Laws.”

To repeat, the Court, by a majority vote, ruled that the 16 Cityhood Laws are unconstitutional in its 18 November 2008 Decision.  The Court, by another majority vote, denied the first motion for reconsideration of the 18 November 2008 Decision. Then, the Court, by a split-vote, denied the second motion for reconsideration. Contrary to respondents’ perception, there is nothing left unresolved by the Court.  The 18 November 2008 Decision became final on 21 May 2009.  As a consequence, it has become immutable and unalterable, no longer subject to attack and cannot be modified directly or indirectly by this Court, which had lost jurisdiction to alter it.

V. Final Note

Any ruling of this Court that a tie-vote on a motion for reconsideration reverses a prior majority vote on the main decision would wreak havoc on well-settled jurisprudence of this Court. Such an unprecedented ruling would resurrect contentious political issues long ago settled, such as the PIRMA initiative in Santiago and the people’s initiative in Lambino.  Countless other decisions of this Court would come back to haunt it, long after such decisions have become final and executory following the tie-votes on the motions for reconsideration which resulted in the denial of the motions.  Such a ruling would destabilize not only this Court, but also the Executive and Legislative Branches of Government. Business transactions made pursuant to final decisions of this Court would also unravel for another round of litigation, dragging along innocent third parties who had relied on such prior final decisions of this Court.  This Court cannot afford to unleash such a catastrophe on the nation.

Accordingly, I vote to EXPUNGE from the records, for being prohibited pleadings, the (1) Motion to Amend the Resolution of April 28, 2009; (2) Motion for Reconsideration of the Resolution of June 2, 2009; (3) Urgent Motion to Resolve Pending Incidents; and (4) Appeal to Honorable Chief Justice Reynato S. Puno and Associate Justice Antonio Eduardo B. Nachura to Participate in the Resolution of Respondents’ Motion for Reconsideration of the Resolution of June 2, 2009.

ANTONIO T. CARPIO
Associate Justice

[1] “Majority” means the number greater than half or more than half of any total (Perez v. Dela Cruz, 137 Phil. 393, 410 [1969], citing Webster’s International Dictionary, Unabridged).

[2] 400 Phil. 904 (2000).

[3] No. L-32546, 17 October 1970, 35 SCRA 285, 301.

[4] 143 Phil. 241, 259-260 (1970).

[5] 144 Phil. 462-463 (1970).

[6] 78 Phil. 286, 318 (1947).

[7] Id. at  930-931.

[8] SEC. 11. Procedure if opinion is equally divided.  — Where the court en banc is equally divided in opinion, or the necessary majority cannot be had, the case shall be reheard, and if on re-hearing no decision is reached, the action shall be dismissed if originally commenced in the court; in appealed cases, the judgment or order appealed from shall stand affirmed; and on all incidental matters, the petition or motion shall be denied.

[9] See also People v. Alcover, 82 Phil. 681, 692 (1949).

[10] Michael Coenen, Original Jurisdiction Deadlocks, 118 YLJ 1003, March 2009.

[11] In Fortich v. Corona, retired Justice Jose Melo, in his Separate Opinion on the motion for reconsideration, stated that “in our own Court En Banc, if the voting is evenly split, on a 7-7 vote, one (1) slot vacant, or with one (1) justice inhibiting or disqualifying himself, the motion (for reconsideration) shall, of course, not be carried because that is the end of the line.” (Emphasis supplied)

[12] See Edward A. Hartnett, Ties in the Supreme Court of the United States, 44 WMMLR 643, December 2002.

[13] Alice Sturgis, The Standard Code of Parliamentary Procedure, Revised by the American Institute of Parliamentarians, 4th Edition, pp. 136-137. (http://books.google.com.ph/books?id=clk1qO-dWp4C&dq=alice+sturgis+parliamentary+procedure&printsec=frontcover&source=bl&ots=rFwU0kuABG&sig=MzvI6eH4M2HlNsWIu0zSdflfvSo&hl=tl&ei=lLKDSpuoNMnIkAXzqPS5Bw&sa=X&oi=book_result&ct=result&resnum=3#v=onepage&q=&f=false)

[14] In Defensor-Santiago v. COMELEC, G.R. No. 127325, 19 March 1997, the Court, by a vote of 6-6 with one (1) justice inhibiting himself and another justice refusing to rule on the ground that the issue was not ripe for adjudication, denied the motion for reconsideration.  The case of Lambino v. Comelec cited  Defensor-Santiago v. COMELEC.

[15] 336 Phil. 848 (1997).

[16] The dispositive portion of the decision in Santiago provides:

WHEREFORE, judgment is hereby rendered

a) GRANTING the instant petition;

b) DECLARING R.A. No. 6735 inadequate to cover the system of initiative on amendments to the Constitution, and to have failed to provide sufficient standard for subordinate legislation;

c) DECLARING void those parts of Resolutions No. 2300 of the Commission on Elections prescribing rules and regulations on the conduct of initiative or amendments to the Constitution; and

d) ORDERING the Commission on Elections to forthwith DISMISS the DELFIN petition (UND-96-037).

The Temporary Restraining Order issued on 18 December 1996 is made permanent as against the Commission on Elections, but is LIFTED against private respondents.

Resolution on the matter of contempt is hereby reserved.

SO ORDERED.

[17]The minute Resolution of 10 June 1997 pertinently states: “Two members of the Court did not take part in the deliberations:  Padilla, J., who is on sick leave and who, in any case, had from the outset inhibited himself from taking part in the cases at bar on account of his personal relationship with the attorney of one of the parties; and Torres, J., who inhibited himself from participation in the deliberation for the reasons set forth in his separate Opinion hereto attached. x x x  The remaining Justices actually present thereafter voted on the issue of whether the motions for reconsideration should be granted or not, with the following results:  Narvasa, C.J., Regalado, Davide, Jr., Romero, Bellosillo, and Kapunan, JJ., voted to DENY said motions for lack of merit; and Melo, Puno, Mendoza, Francisco, Hermosisima, and Panganiban, JJ., voted to GRANT the same.  Vitug, J., maintained his opinion that the matter was not ripe for judicial adjudication.”

[18] See Fortich v. Corona, 371 Phil. 672 (1999).

[19] Filed in compliance with the Resolution of 29 September 2009.

[20] Ortigas & Company Ltd. Partnership v. Velasco, G.R. No. 109645, 4 March 1996, 254 SCRA 234.

[21] Ortigas & Company Ltd. Partnership v. Velasco, G.R. No. 109645, 4 March 1996, 254 SCRA 234; Long v. Basa, G.R. Nos. 134963-64, 27 September 2001, 366 SCRA 113; Fortich v. Corona, G.R. No. 131457, 24 April 1998, 289 SCRA 624; Equatorial Realty Development, Inc. v. Mayfair Theater, Inc., G.R. No. 136221, 12 May 2000, 332 SCRA 139; Seven Brothers Shipping Corporation v. Oriental Assurance Corporation, G.R. No. 140613, 15 October 2002, 391 SCRA 67; Li Kim Tho v. Sanchez, 82 Phil. 776, 778 (1949); Alcantara v. Ponce, G.R. No. 131547, 15 December 2005, 478 SCRA 27; Arnedo v. Llorente, 18 Phil. 257, 262-263 (1911); Ramos v. Ramos, G.R. No. 144294, 11 March 2003; 399 SCRA 43; Social Security System v. Isip, G.R. No. 165417, 4 April 2007, 520 SCRA 310.

[22] Ramos v. Ramos, G.R. No. 144294, 11 March 2003,  399 SCRA 43.

[23] Ginete v. Court of Appeals, G.R. No. 127596, 24 September 1998, 296 SCRA 36; Legarda v. Court of Appeals, G.R. No. 94457, 16 October 1997, 280 SCRA 642.

[24] G.R. No. 164195, 4 December 2009.

[25] Alcantara v. Ponce, G.R. No. 131547, 15 December 2005, 478 SCRA 27 citing Ortigas & Company Ltd. Partnership v. Velasco, G.R. No. 109645, 4 March 1996, 254 SCRA 234.

[2005V389] METROPOLITAN MANILA DEVELOPMENT AUTHORITY, Petitioner, versus DANTE O. GARIN, Respondent.

2005 Apr 15
2nd Division
G.R. No. 130230

D E C I S I O N

CHICO-NAZARIO, J.:

At issue in this case is the validity of Section 5(f) of Republic Act No. 7924 creating the Metropolitan Manila Development Authority (MMDA), which authorizes it to confiscate and suspend or revoke driver’s licenses in the enforcement of traffic laws and regulations.

The issue arose from an incident involving the respondent Dante O. Garin, a lawyer, who was issued a traffic violation receipt (TVR) and his driver’s license confiscated for parking illegally along Gandara Street, Binondo, Manila, on 05 August 1995. The following statements were printed on the TVR:

You are hereby directed to report to the MMDA Traffic Operations Center Port Area Manila after 48 hours from date of apprehension for disposition/appropriate action thereon. Criminal case shall be filed for failure to redeem license after 30 days.

Valid as temporary DRIVER’S license for seven days from date of apprehension.[1]

Shortly before the expiration of the TVR’s validity, the respondent addressed a letter[2] to then MMDA Chairman Prospero Oreta requesting the return of his driver’s license, and expressing his preference for his case to be filed in court.

Receiving no immediate reply, Garin filed the original complaint[3] with application for preliminary injunction in Branch 260 of the Regional Trial Court (RTC) of Parañaque, on 12 September 1995, contending that, in the absence of any implementing rules and regulations, Sec. 5(f) of Rep. Act No. 7924 grants the MMDA unbridled discretion to deprive erring motorists of their licenses, pre-empting a judicial determination of the validity of the deprivation, thereby violating the due process clause of the Constitution. The respondent further contended that the provision violates the constitutional prohibition against undue delegation of legislative authority, allowing as it does the MMDA to fix and impose unspecified – and therefore unlimited – fines and other penalties on erring motorists.

In support of his application for a writ of preliminary injunction, Garin alleged that he suffered and continues to suffer great and irreparable damage because of the deprivation of his license and that, absent any implementing rules from the Metro Manila Council, the TVR and the confiscation of his license have no legal basis.

For its part, the MMDA, represented by the Office of the Solicitor General, pointed out that the powers granted to it by Sec. 5(f) of Rep. Act No. 7924 are limited to the fixing, collection and imposition of fines and penalties for traffic violations, which powers are legislative and executive in nature; the judiciary retains the right to determine the validity of the penalty imposed. It further argued that the doctrine of separation of powers does not preclude “admixture” of the three powers of government in administrative agencies.[4]

The MMDA also refuted Garin’s allegation that the Metro Manila Council, the governing board and policy making body of the petitioner, has as yet to formulate the implementing rules for Sec. 5(f) of Rep. Act No. 7924 and directed the court’s attention to MMDA Memorandum Circular No. TT-95-001 dated 15 April 1995. Respondent Garin, however, questioned the validity of MMDA Memorandum Circular No. TT-95-001, as he claims that it was passed by the Metro Manila Council in the absence of a quorum.

Judge Helen Bautista-Ricafort issued a temporary restraining order on 26 September 1995, extending the validity of the TVR as a temporary driver’s license for twenty more days. A preliminary mandatory injunction was granted on 23 October 1995, and the MMDA was directed to return the respondent’s driver’s license.

On 14 August 1997, the trial court rendered the assailed decision[5] in favor of the herein respondent and held that:

a. There was indeed no quorum in that First Regular Meeting of the MMDA Council held on March 23, 1995, hence MMDA Memorandum Circular No. TT-95-001, authorizing confiscation of driver’s licenses upon issuance of a TVR, is void ab initio.

b. The summary confiscation of a driver’s license without first giving the driver an opportunity to be heard; depriving him of a property right (driver’s license) without DUE PROCESS; not filling (sic) in Court the complaint of supposed traffic infraction, cannot be justified by any legislation (and is) hence unconstitutional.

WHEREFORE, the temporary writ of preliminary injunction is hereby made permanent; th(e) MMDA is directed to return to plaintiff his driver’s license; th(e) MMDA is likewise ordered to desist from confiscating driver’s license without first giving the driver the opportunity to be heard in an appropriate proceeding.

In filing this petition,[6] the MMDA reiterates and reinforces its argument in the court below and contends that a license to operate a motor vehicle is neither a contract nor a property right, but is a privilege subject to reasonable regulation under the police power in the interest of the public safety and welfare. The petitioner further argues that revocation or suspension of this privilege does not constitute a taking without due process as long as the licensee is given the right to appeal the revocation.

To buttress its argument that a licensee may indeed appeal the taking and the judiciary retains the power to determine the validity of the confiscation, suspension or revocation of the license, the petitioner points out that under the terms of the confiscation, the licensee has three options:

1. To voluntarily pay the imposable fine,

2. To protest the apprehension by filing a protest with the MMDA Adjudication Committee, or

3. To request the referral of the TVR to the Public Prosecutor’s Office.

The MMDA likewise argues that Memorandum Circular No. TT-95-001 was validly passed in the presence of a quorum, and that the lower court’s finding that it had not was based on a “misapprehension of facts,” which the petitioner would have us review. Moreover, it asserts that though the circular is the basis for the issuance of TVRs, the basis for the summary confiscation of licenses is Sec. 5(f) of Rep. Act No. 7924 itself, and that such power is self-executory and does not require the issuance of any implementing regulation or circular.

Meanwhile, on 12 August 2004, the MMDA, through its Chairman Bayani Fernando, implemented Memorandum Circular No. 04, Series of 2004, outlining the procedures for the use of the Metropolitan Traffic Ticket (MTT) scheme. Under the circular, erring motorists are issued an MTT, which can be paid at any Metrobank branch. Traffic enforcers may no longer confiscate drivers’ licenses as a matter of course in cases of traffic violations. All motorists with unredeemed TVRs were given seven days from the date of implementation of the new system to pay their fines and redeem their license or vehicle plates.[7]

It would seem, therefore, that insofar as the absence of a prima facie case to enjoin the petitioner from confiscating drivers’ licenses is concerned, recent events have overtaken the Court’s need to decide this case, which has been rendered moot and academic by the implementation of Memorandum Circular No. 04, Series of 2004.

The petitioner, however, is not precluded from re-implementing Memorandum Circular No. TT-95-001, or any other scheme, for that matter, that would entail confiscating drivers’ licenses. For the proper implementation, therefore, of the petitioner’s future programs, this Court deems it appropriate to make the following observations:

1. A license to operate a motor vehicle is a privilege that the state may withhold in the exercise of its police power.

The petitioner correctly points out that a license to operate a motor vehicle is not a property right, but a privilege granted by the state, which may be suspended or revoked by the state in the exercise of its police power, in the interest of the public safety and welfare, subject to the procedural due process requirements. This is consistent with our rulings in Pedro v. Provincial Board of Rizal[8] on the license to operate a cockpit, Tan v. Director of Forestry[9] and Oposa v. Factoran[10] on timber licensing agreements, and Surigao Electric Co., Inc. v. Municipality of Surigao[11] on a legislative franchise to operate an electric plant.

Petitioner cites a long list of American cases to prove this point, such as State ex. Rel. Sullivan,[12] which states in part that, “the legislative power to regulate travel over the highways and thoroughfares of the state for the general welfare is extensive. It may be exercised in any reasonable manner to conserve the safety of travelers and pedestrians. Since motor vehicles are instruments of potential danger, their registration and the licensing of their operators have been required almost from their first appearance. The right to operate them in public places is not a natural and unrestrained right, but a privilege subject to reasonable regulation, under the police power, in the interest of the public safety and welfare. The power to license imports further power to withhold or to revoke such license upon noncompliance with prescribed conditions.”

Likewise, the petitioner quotes the Pennsylvania Supreme Court in Commonwealth v. Funk,[13] to the effect that: “Automobiles are vehicles of great speed and power. The use of them constitutes an element of danger to persons and property upon the highways. Carefully operated, an automobile is still a dangerous instrumentality, but, when operated by careless or incompetent persons, it becomes an engine of destruction. The Legislature, in the exercise of the police power of the commonwealth, not only may, but must, prescribe how and by whom motor vehicles shall be operated on the highways. One of the primary purposes of a system of general regulation of the subject matter, as here by the Vehicle Code, is to insure the competency of the operator of motor vehicles. Such a general law is manifestly directed to the promotion of public safety and is well within the police power.”

The common thread running through the cited cases is that it is the legislature, in the exercise of police power, which has the power and responsibility to regulate how and by whom motor vehicles may be operated on the state highways.

2. The MMDA is not vested with police power.

In Metro Manila Development Authority v. Bel-Air Village Association, Inc.,[14] we categorically stated that Rep. Act No. 7924 does not grant the MMDA with police power, let alone legislative power, and that all its functions are administrative in nature.

The said case also involved the herein petitioner MMDA which claimed that it had the authority to open a subdivision street owned by the Bel-Air Village Association, Inc. to public traffic because it is an agent of the state endowed with police power in the delivery of basic services in Metro Manila. From this premise, the MMDA argued that there was no need for the City of Makati to enact an ordinance opening Neptune Street to the public.

Tracing the legislative history of Rep. Act No. 7924 creating the MMDA, we concluded that the MMDA is not a local government unit or a public corporation endowed with legislative power, and, unlike its predecessor, the Metro Manila Commission, it has no power to enact ordinances for the welfare of the community. Thus, in the absence of an ordinance from the City of Makati, its own order to open the street was invalid.

We restate here the doctrine in the said decision as it applies to the case at bar: police power, as an inherent attribute of sovereignty, is the power vested by the Constitution in the legislature to make, ordain, and establish all manner of wholesome and reasonable laws, statutes and ordinances, either with penalties or without, not repugnant to the Constitution, as they shall judge to be for the good and welfare of the commonwealth, and for the subjects of the same.

Having been lodged primarily in the National Legislature, it cannot be exercised by any group or body of individuals not possessing legislative power. The National Legislature, however, may delegate this power to the president and administrative boards as well as the lawmaking bodies of municipal corporations or local government units (LGUs). Once delegated, the agents can exercise only such legislative powers as are conferred on them by the national lawmaking body.

Our Congress delegated police power to the LGUs in the Local Government Code of 1991.[15] A local government is a “political subdivision of a nation or state which is constituted by law and has substantial control of local affairs.”[16] Local government units are the provinces, cities, municipalities and barangays, which exercise police power through their respective legislative bodies.

Metropolitan or Metro Manila is a body composed of several local government units. With the passage of Rep. Act No. 7924 in 1995, Metropolitan Manila was declared as a “special development and administrative region” and the administration of “metro-wide” basic services affecting the region placed under “a development authority” referred to as the MMDA. Thus:

. . [T]he 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.” 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 and these are actually summed up in the charter itself, viz:

“Sec. 2. Creation of the Metropolitan Manila Development Authority. — -x x x.

The MMDA shall perform planning, monitoring and coordinative functions, and in the process exercise regulatory and supervisory authority over the delivery of metro-wide services within Metro Manila, without diminution of the autonomy of the local government units concerning purely local matters.”
….

Clearly, 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 MMDA’s functions. There is no grant of authority to enact ordinances and regulations for the general welfare of the inhabitants of the metropolis. [17] (footnotes omitted, mphasis supplied)

Therefore, insofar as Sec. 5(f) of Rep. Act No. 7924 is understood by the lower court and by the petitioner to grant the MMDA the power to confiscate and suspend or revoke drivers’ licenses without need of any other legislative enactment, such is an unauthorized exercise of police power.

3. Sec. 5(f) grants the MMDA with the duty to enforce existing traffic rules and regulations.

Section 5 of Rep. Act No. 7924 enumerates the “Functions and Powers of the Metro Manila Development Authority.” The contested clause in Sec. 5(f) states that the petitioner shall “install and administer a single ticketing system, fix, impose and collect fines and penalties for all kinds of violations of traffic rules and regulations, whether moving or nonmoving in nature, and confiscate and suspend or revoke drivers’ licenses in the enforcement of such traffic laws and regulations, the provisions of Rep. Act No. 4136[18] and P.D. No. 1605[19] to the contrary notwithstanding,” and that “(f)or this purpose, the Authority shall enforce all traffic laws and regulations in Metro Manila, through its traffic operation center, and may deputize members of the PNP, traffic enforcers of local government units, duly licensed security guards, or members of non-governmental organizations to whom may be delegated certain authority, subject to such conditions and requirements as the Authority may impose.”

Thus, where there is a traffic law or regulation validly enacted by the legislature or those agencies to whom legislative powers have been delegated (the City of Manila in this case), the petitioner is not precluded – and in fact is duty-bound – to confiscate and suspend or revoke drivers’ licenses in the exercise of its mandate of transport and traffic management, as well as the administration and implementation of all traffic enforcement operations, traffic engineering services and traffic education programs.[20]

This is consistent with our ruling in Bel-Air that the MMDA is a development authority 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, which may enforce, but not enact, ordinances.

This is also consistent with the fundamental rule of statutory construction that a statute is to be read in a manner that would breathe life into it, rather than defeat it,[21] and is supported by the criteria in cases of this nature that all reasonable doubts should be resolved in favor of the constitutionality of a statute.[22]

A last word. The MMDA was intended to coordinate services with metro-wide impact that transcend local political boundaries or would entail huge expenditures if provided by the individual LGUs, especially with regard to transport and traffic management,[23] and we are aware of the valiant efforts of the petitioner to untangle the increasingly traffic-snarled roads of Metro Manila. But these laudable intentions are limited by the MMDA’s enabling law, which we can but interpret, and petitioner must be reminded that its efforts in this respect must be authorized by a valid law, or ordinance, or regulation arising from a legitimate source.

WHEREFORE, the petition is dismissed.

SO ORDERED.

MINITA V. CHICO-NAZARIO
Associate Justice

WE CONCUR:

REYNATO S. PUNO
Associate Justice
Chairman

MA. ALICIA AUSTRIA-MARTINEZ
Associate Justice

ROMEO J. CALLEJO, SR.
Associate Justice

DANTE O. TINGA
Associate Justice

A T T E S T A T I O N

I attest that the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.

REYNATO S. PUNO
Associate Justice
Chairman, Second Division

C E R T I F I C A T I O N

Pursuant to Article VIII, Section 13 of the Constitution, and the Division Chairman’s Attestation, it is hereby certified that the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.

HILARIO G. DAVIDE, JR.
Chief Justice

[1] Records, p. 10.

[2] Id., p. 11.

[3] Id., p. 1.

[4] Memorandum for Defendants, Records, pp. 178 -185.

[5] Id., pp. 187-190, penned by Hon. Helen Bautista-Ricafort.

[6] Records, pp. 197-225.

[7] Sec. 7, Mem. Circ. No. 04, Series of 2004.

[8] 56 Phil 123 (1931).

[9] G.R. No. L-24548, 27 October 1983, 125 SCRA 302.

[10] G.R. No. 101083, 30 July 1993, 224 SCRA 792.

[11] G.R. No. L-22766, 30 August 1968, 24 SCRA 898.

[12] 63 P. 2d 653, 108 ALR 1156, 1159.

[13] 323 Pa. 390, 186 A. 65 (108 ALR 1161).

[14] G.R. No. 135962, 27 March 2000, 328 SCRA 836, penned by Justice Reynato S. Puno.

[15] Sec. 16 of Book I of the Local Government Code of 1991 states:

General Welfare.-Every local government unit shall exercise the powers expressly granted, those necessarily implied therefrom, as well as powers necessary, appropriate, or incidental for its efficient and effective governance, and those which are essential to the promotion of the general welfare. Within their respective territorial jurisdictions, local government units shall ensure and support, among other things, the preservation and enrichment of culture, promote health and safety, enhance the right of the people to a balanced ecology, encourage and support the development of appropriate and self-reliant scientific and technological capabilities, improve public morals, enhance economic prosperity and social justice, promote full employment among their residents, maintain peace and order, and preserve the comfort and convenience of their inhabitants.

[16] Supra, Note 18, p. 844, citing Bernas, The 1987 Constitution of the Philippines, A Commentary, pp. 95-98 [1996], citing UP Law Center Revision Project, Part II, 712 [1970] citing Sady, “Improvement of Local Government Administration for Development Purpose,” Journal of Local Administration Overseas 135 [July 1962].

[17] Ibid., pp. 849-860.

[18] Entitled “An Act to Compile the Laws Relative to Land Transportation and Traffic Rules, to Create a Land Transportation Commission and for Other Purposes,” approved on 20 June 1964. Sec. 29 thereof states:

Confiscation of driver’s license.- Law enforcement and peace officers duly designated by the Commissioner shall, in apprehending any driver for violations of this Act or of any regulations issued pursuant thereto, or of local traffic rules and regulations, confiscate the license of the driver concerned and issue a receipt prescribed and issued by the Commission therefore which shall authorize the driver to operate a motor vehicle for a period not exceeding seventy-two hours from the time and date of issue of said receipt. The period so fixed in the receipt shall not be extended, and shall become invalid thereafter. Failure of the driver to settle his case within fifteen days from the date of apprehension will cause suspension and revocation of his license. mphasis supplied)

[19] Entitled “Granting the Metropolitan Manila Commission Certain Powers Related to Traffic Management and Control in Metropolitan Manila, Providing Penalties, and for Other Purposes,” dated 21 November 1978.

SEC. 5.- In case of traffic violations, the driver’s license shall not be confiscated but the erring driver shall be immediately issued a traffic citation ticket prescribed by the Metropolitan Manila Commission which shall state the violation committed, the amount of fine imposed for the violation and an advice that he can make payment to the city or municipal treasurer where the violation was committed or to the Philippine National Bank or Philippine Veteran’s Bank or their branches within seven days from the date of issuance of the citation ticket. mphasis supplied)

[20] Section 3(b), Rep. Act No. 7924.

[21] Thus, in Briad Agro Development Corporation v. dela Serna, (G.R. No. 82805, 29 June 1989, 174 SCRA 524) we upheld the grant of concurrent jurisdiction between the Secretary of Labor or its Regional Directors and the Labor Arbiters to pass upon money claims, among other cases, “the provisions of Article 217 of this Code to the contrary notwithstanding,” as enunciated in Executive Order No. 111. Holding that E.O. 111 was a curative law intended to widen worker’s access to the Government for redress of grievances, we held,“…the Executive Order vests in Regional Directors jurisdiction, ‘[t]he provisions of Article 217 of this Code to the contrary notwithstanding,’ it would have rendered such a proviso – and the amendment itself – useless to say that they (Regional Directors) retained the self-same restricted powers, despite such an amendment. It is fundamental that a statute is to be read in a manner that would breathe life into it, rather than defeat it.” (See also Philtread Workers Union v. Confessor, G.R. No. 117169, 12 March 1997, 269 SCRA 393.)

[22] In Heirs of Ardona v. Reyes, (G.R. No. 60549, 26 October 1983, 125 SCRA 221) we upheld the constitutionality of Presidential Decree No. 564, the Revised Charter of the Philippine Tourism Authority, and Proclamation No. 2052 declaring certain municipalities in the province of Cebu as tourist zones. The law granted the Philippine Tourism authority the right to expropriate 282 hectares of land to establish a resort complex notwithstanding the claim that certificates of land transfer and emancipation patents had already been issued to them thereby making the lands expropriated within the coverage of the land reform area under Presidential Decree No. 2, and that the agrarian reform program occupies a higher level in the order of priorities than other State policies like those relating to the health and physical well-being of the people, and that property already taken for public use may not be taken for another public use. We held that, “(t)he petitioners have failed to overcome the burden of anyone trying to strike down a statute or decree whose avowed purpose is the legislative perception of the public good. A statute has in its favor the presumption of validity. All reasonable doubts should be resolved in favor of the constitutionality of a law. The courts will not set aside a law as violative of the Constitution except in a clear case (People v. Vera, 65 Phil. 56). And in the absence of factual findings or evidence to rebut the presumption of validity, the presumption prevails (Ermita-Malate Hotel, etc. v. Mayor of Manila, 20 SCRA 849; Morfe v. Mutuc, 22 SCRA 424).”

In the same manner, we upheld in Dumlao v. COMELEC (G.R. No. L-52245, 22 January 1980, 95 SCRA 392) the first paragraph of Section 4 of Batas Pambansa Bilang 52 providing that any retired elective provincial. city or municipal official, who has received payment of the retirement benefits and who shall have been 65 years of age at the commencement of the term of office to which he seeks to be elected is disqualified to run for the same elective local office from which he has retired. Invoking the need for the emergence of younger blood in local politics, we affirmed that the constitutional guarantee is not violated by a reasonable classification based upon substantial distinctions, where the classification is germane to the purpose of the law and applies to all those belonging to the same class. (See also Tropical Homes, Inc, v. National Housing Authority, G.R. No. L-48672, 31 July 1987 152 SCRA 540; Peralta v. COMELEC, G.R. No. L-47791, 11 March 1978, 82 SCRA 55; People v. Vera, GR No. 45685, 65 Phil 56 [1937].)

[23] Section 3(b), Republic Act No. 7924.

[1999V241] CITY GOVERNMENT OF SAN PABLO, LAGUNA, CITY TREASURER OF SAN PABLO, LAGUNA, and THE SANGGUNIANG PANGLUNSOD OF SAN PABLO, LAGUNA, petitioners, vs. HONORABLE BIENVENIDO V. REYES, in his capacity as Presiding Judge, Regional Trial Court, Branch 29, San Pablo City and the MANILA ELECTRIC COMPANY, respondents.

1999 Mar 25
3rd Division
G.R. No. 127708

D E C I S I O N

GONZAGA-REYES, J.:

This is a petition under Rule 45 of the Rules of Court to review on a pure question of law the decision of the Regional Trial Court (RTC) of San Pablo City, Branch 29 in Civil Case No. SP-4459(96), entitled “Manila Electric Company vs. City of San Pablo, Laguna, City Treasurer of San Pablo Laguna, and the Sangguniang Panglunsod of San Pablo City, Laguna.” The RTC declared the imposition of franchise tax under Section 2.09 Article D of Ordinance No. 56 otherwise known as the Revenue Code of the City of San Pablo as ineffective and void insofar as the respondent MERALCO is concerned for being violative of Act No. 3648, Republic Act No. 2340 and PD 551. The RTC also granted MERALCO’S claim for refund of franchise taxes paid under protest.

The following antecedent facts are undisputed:

Act No. 3648 granted the Escudero Electric Services Company, a legislative franchise to maintain and operate an electric light and power system in the City of San Pablo and nearby municipalities Section 10 of Act No. 3648 provides:

“x x x In consideration of the franchise and rights hereby granted, the grantee shall pay unto the municipal treasury of each municipality in which it is supplying electric current to the public under this franchise, a tax equal to two percentum of the gross earnings from electric current sold or supplied under this franchise in each said municipality. Said tax shall be due and payable quarterly and shall be in lieu of any and all taxes of any kind, nature or description levied, established or collected by any authority whatsoever, municipal, provincial or insular, now or in the future, on its poles, wires, insulators, switches, transformers, and structures, installations, conductors, and accessories place in and over and under all public property, including public streets and highways, provincial roads, bridges and public squares, and on its franchise, rights, privileges, receipts, revenues and profits from which taxes the grantee is hereby expressly exempted.”

Escudero’s franchise was transferred to the plaintiff (herein respondent) MERALCO under Republic Act No. 2340.

Presidential Decree No. 551 was enacted on September 11, 1974. Section 1 thereof provides the following:

“Section 1. Any provision of law or local ordinance to the contrary notwithstanding, the franchise tax payable by all grantees of franchise to generate, distribute and sell electric current for light, heat and power shall be two percent (2%) of their gross receipts received from the sale of electric current and from transactions incident to the generation, distribution and sale of electric current.

Such franchise tax shall be payable to the Commissioner of Internal Revenue or his duly authorized representative on or before the twentieth day of the month following the end of each calendar quarter or month as may be provided in the respective franchise or pertinent municipal regulation and shall, any provision of the Local Tax Code or any other law to the contrary notwithstanding, be in lieu of all taxes and assessments of whatever nature imposed by any national or local authority on earnings, receipts, income and privilege of generation, distribution and sale of electric current.”

Republic Act No. 7160, otherwise known as the “Local Government Code of 1991″ (hereinafter referred to as the LGC) took effect on January 1, 1992. The said Code authorizes the province/city to impose a tax on business enjoying a franchise at a rate not exceeding fifty percent (50%) of one percent (1%) of the gross annual receipts for the preceding calendar year realized within its jurisdiction.

On October 5, 1992, the Sangguniang Panglunsod of San Pablo City enacted Ordinance No. 56, otherwise known as the Revenue Code of the City of San Pablo. The said Ordinance took effect on October 30, 1992:1 [Petitioner for review, p. 3.]

Section 2.09 Article D of said Ordinance provides:

“Sec. 2.09. Franchise Tax – There is hereby imposed a tax on business enjoing a franchise, at a rate of fifty percent (50%) of one percent (1%) of the gross annual receipts, which shall include both cash sales and sales on account realized during the preceding calendar year within the city.”

Pursuant to the above-quoted Section 2.09, the petitioner City Treasurer sent to private respondent a letter demanding payment of the aforesaid franchise tax. From 1994 to 1996, private respondent paid “under protest” a total amount of P1,857,711.67.2 [Ibid., p. 4 and Respondent’s Memorandum, p. 3.]

The private respondent subsequently filed this action before the Regional Trial Court to declare Ordinance No. 56 null and void insofar as it imposes the franchise tax upon private respondent MERALCO3 [Petition for Review, p. 4 and Respondent’s Memorandum, p. 4.] and to claim for a refund of the taxes paid.

The Court ruled in favor of MERALCO and upheld its argument that the LGC did not expressly or impliedly repeal the tax exemption/incentive enjoyed by it under its charter. The dispositive portion of the decision reads:

“WHEREFORE, the imposition of a franchise tax under Sec. 2.09 Article D of Ordinance No. 56 otherwise known as the Revenue Code of the City of San Pablo, is declared ineffective and null and void insofar as the plaintiff MERALCO is concerned for being violative of Republic Act No. 2340, PD 551, and Republic Act No. 7160 and the defendants are ordered to refund to the plaintiff the amount of ONE MILLION EIGHT HUNDRED FIFTY SEVEN THOUSAND SEVEN HUNDRED ELEVEN & 67/100 (P1,857,711.67) and such other amounts as may have been paid by the plaintiff under said Revenue Ordinance No. 56 after the filing of the complaint.4 [Ibid.] Sdaad

SO ORDERED.”

Its motion for reconsideration having been denied by the trial court5 [Order of January 10, 1996, p. 41, Rollo.] the petitioners filed the instant petition with this Court raising pure questions of law based on the following grounds:

I. RESPONDENT JUDGE GRAVELY ERRED IN HOLDING THAT ACT NO. 3648, REPUBLIC ACT NO. 2340 AND PRESIDENTIAL DECREE NO. 551 AS AMENDED, INSOFAR AS THEY GRANT TAX INCENTIVES, PRIVILEGES AND IMMUNITIES TO PRIVATE RESPONDENT, HAVE NOT BEEN REPEALED BY REPUBLIC ACT NO. 7160.

II. RESPONDENT JUDGE GRAVELY ERRED IN RULING THAT SECTION 193 OF REPUBLIC ACT NO. 7160 HAS NOT WITHDRAWN THE TAX INCENTIVES, PRIVILEGES AND IMMUNITIES BEING ENJOYED BY THE PRIVATE RESPONDENT UNDER ACT NO. 3648, REPUBLIC ACT NO. 2340 AN PRESIDENTIAL DECREE NO. 551, AS AMENDED.

III. RESPONDENT JUDGE GRAVELY ERRED IN HOLDING THAT THE FRANCHISE TAX IN QUESTION CONSTITUTES AN IMPAIRMENT OF THE CONTRACT BETWEEN THE GOVERNMENT AND THE PRIVATE RESPONDENT.

Petitioners’ position is the RA 7160 (LGC) expressly repealed Act No. 3648, Republic Act No. 2340 and Presidential Decree 551 and that pursuant to the provisions of Sections 137 and 193 of the LGC, the province or city now has the power to impose a franchise tax on a business enjoying a franchise. Petitioners rely on the ruling in the case of Mactan Cebu International Airport Authority vs. Marcos6 [261 SCRA 667, (1996)] where the Supreme Court held that the exemption from real property tax granted to Mactan Cebu International Airport Authority under its charter has been withdrawn upon the effectivity of the LGC.

In addition, the petitioners cite in their Memorandum dated December 8, 1997 an administrative interpretation made by the Bureau of Local Government Finance of the Department of Finance in its 3rd indorsement dated February 15, 1994 to the effect that the earlier ruling of the Department of Finance that holders of franchise which contain the phrase “in lieu of all taxes” proviso are exempt from the payment of any kind of tax is no longer applicable upon the effectivity of the LGC in view of the withdrawal of tax exemption privileges as provided in Sections 193 and 234 thereof.

We resolve to reverse the court a quo.

The pivotal issue is whether the City of San Pablo may impose a local franchise tax pursuant to the LGC upon the Manila Electric Company which pays a tax equal to two percent of its gross receipts in lieu of all taxes and assessments of whatever nature imposed by any national or local authority on savings or income.

It is necessary to reproduce the pertinent provisions of the LGC.

Section 137 – Franchise Tax – Notwithstanding any exemption granted by any law or other special law, the province may impose a tax on business enjoying a franchise, at a rate not exceeding fifty percent 50% of one percent 1% of the gross annual receipts for the preceding calendar year based on the incoming receipts, or realized, within its territorial jurisdiction. xxx”

Section 151 – Scope of Taxing Powers – Except as otherwise provided in this Code, the city, may levy the taxes, fees, and charges which the province or municipality may impose: Provided, however, That the taxes, fees and charges levied and collected by highly urbanized and independent component cities shall accrue to them and distributed in accordance with the provisions of this Code.

The rates of taxes that the city may levy may exceed the maximum rates allowed for the province or municipality by not more than fifty percent (50%) except the rates of professional and amusement taxes.

Section 193 – Withdrawal of Tax Exemption Privileges. – Unless otherwise provided in this Code, tax exemptions or incentives granted to, or presently enjoyed by all persons, whether natural or juridical, including government-owned or controlled corporations, except local water districts, cooperatives duly registered under R.A. 6938, non-stock and non-profit hospitals and educational institutions, are hereby withdrawn upon the effectivity of this Code.

Section 534 (f) – Repealing Clause – All general and special laws, acts, city charters, decrees, executive orders, proclamations and administrative regulations, or part or parts thereof which are inconsistent with any of the provisions of this code are hereby repealed or modified accordingly.

Section 534 (f), the repealing clause of the LGC, provides that all general and special laws, acts, city charters, decrees, executive orders, proclamations and administrative regulations or parts thereof which are inconsistent with any of the provisions of the Code are hereby repealed or modified accordingly.

This clause partakes of the nature of a general repealing clause.7 [Ty vs. Trampe, 250 SCRA 500 at 512 (1995)] It is certainly not an express repealing clause because it fails to designate the specific act or acts identified by number or title, that are intended to be repealed.8 [Mecano vs. Commission on Audit, 216 SCRA 500 at 504 (1992); Berces Sr., vs. Guingona, Jr., 241 SCRA 539 at 544 (1995)]

Was there an implied repeal by Republic Act No. 7160 of the MERALCO franchise insofar as the latter impose a 2% tax “in lieu of all taxes and assessments of whatever nature”?

We rule affirmatively.

We are mindful of the established rule that repeals by implication are not favored as laws are presumed to be passed with deliberation and full knowledge of all laws existing on the subject. A general law cannot be construed to have repealed a special law by mere implication unless the intent to repeal or alter is manifest9 [Laguna Lake Development Authority vs. Court of Appeals, 251 SCRA 42 at 56 (1995)] and it must be convincingly demonstrated that the two laws are so clearly repugnant and patently inconsistent that they cannot co-exist.10 [Villegas vs. Subido, 41 SCRA 190 at 197 (1971); Mecano vs. Commission on Audit, Supra.]

It is our view that petitioners correctly rely on the provisions of Section 137 and 193 of the LGC to support their position that MERALCO’s tax exemption has been withdrawn. The explicit language of Section 137 which authorizes the province to impose franchise tax “notwithstanding any exemption enjoyed under special laws.

Section 193 buttresses the withdrawal of extant tax exemption privileges. By stating that unless otherwise provided in this Code, tax exemptions or incentives granted to or presently enjoyed by all persons whether natural or juridical, including government-owned or controlled corporations except 1) local water districts, 2) cooperatives duly registered under R.A. 6938, (3) non-stock and non-profit hospitals and educational institutions, are withdrawn upon the effectivity of this code, the obvious import is to limit the exemptions to the three enumerated entities. It is a basic precept of statutory construction that the express mention of one person, thing, act, or consequence excludes all others as expressed in the familiar maxim expressio unius est exlcusio alterius.11 [Commissioner of Customs vs. Court of Tax Appeals, 224 SCRA 665 at pp. 669-670, (1993)] In the absence of any provision of the Code to the contrary, and we find no other provision of the Code to the contrary, and we find no other provision in point, any existing tax exemption or incentive enjoyed by MERALCO under existing law was clearly intended to be withdrawn.

Reading together Sections 137 and 193 of the LGC, we conclude that under the LGC the local government unit may now impose a local tax at a rate not exceeding 50% of 1% of the gross annual receipts for the preceding calendar year based on the incoming receipts realized within its territorial jurisdiction. The legislative purpose to withdraw tax privileges enjoyed under existing law or charter is clearly manifested by the language used in Section 137 and 193 categorically withdrawing such exemption subject only to the exceptions enumerated. Since it would be not only tedious and impractical to attempt to enumerate all the existing statutes providing for special tax exemptions or privileges, the LGC provided for an express, albeit general, withdrawal of such exemptions or privileges. No more unequivocal language could have been used.

It is true that the phrase “in lieu of all taxes” found in special franchises has been held in several cases to exempt the franchise holder from payment of tax on its corporate franchise imposed by the Internal Revenue Code, as the charter is in the nature of a private contract and the exemption is part of the inducement for the acceptance of the franchise, and that the imposition of another franchise tax by the local authority would constitute an impairment of contract between the government and the corporation.12 [Cotabato Light and Power Co. vs. City of Cotabato, 32 SCRA 231; Commissioner of Internal Revenue vs. Lingayen Gulf Electric Power Co. 164 SCRA 27 at 34 (1988), Province of Misamis Oriental vs. Cagayan Electric Power and Light Co., Inc., 181 SCRA 38 at 43 (1990)] But these “magic words” contained in the phrase “shall be in lieu of all taxes.”13 [Province of Misamis Oriental vs. Cagayan Electric Power and Light Co. Inc. supra, at p. 42.] Have to give way to the peremptory language of the LGC specifically providing for the withdrawal of such exemption privileges.

Accordingly in Mactan Cebu International Airport Authority vs. Marcos,14 [Supra.] this Court held that Section 193 of the LGC prescribes the general rule, viz., the tax exemptions or incentives granted to or presently enjoyed by natural or juridical persons are withdrawn upon the effectivity of the LGC except with respect to those entities expressly enumerated. In the same vein We must hold that the express withdrawal upon effectivity of the LGC of all exemptions only as provided therein, can no longer be invoked by Meralco to disclaim liability for the local tax.

Private respondents further argue that the “in lieu of” provision contained in PD 551, Act No. 3648 and RA 2340 does not partake of the nature of an exemption, but is a “commutative tax”. This contention was raised but was not upheld in Cagayan Electric Power and Light Co. Inc. vs. Commissioner of Internal Revenue15 [138 SCRA 629 at p. 631.] wherein the Supreme Court stated:

“xxx Congress could impair petitioner’s legislative franchise by making it liable for income tax from which heretofore it was exempted by virtue of the exemption provided for in section 3 of its franchise xxx

xxx Republic Act No. 5431, in amending section 24 of the Tax Code by subjecting to income tax all corporate tax payers not expressly exempted therein and in section 27 of the Code, had the effect of withdrawing petitioner’s exemption from income tax xxx”

Private respondent’s invocation of the non-impairment clause of the Constitution is accordingly unavaling. The LGC was enacted in pursuance of the constitutional policy to ensure autonomy to local governments16 [Section 25, Art. II and § 2, Art. X Constitution.] and to enable them to attain fullest development as self-reliant communities.17 [§ 2(a) Local Government Code of 1991.] Thus in Mactan Cebu International Airport Authority vs. Marcos, supra, this Court pointed out, in upholding the withdrawal of the real estate tax exemption previously enjoyed by the Mactan Cebu International Airport Authority, as follows:

“Note that as reproduced in Section 234(a) the phrase “and any government owned or controlled corporation so exempt by its charter” was excluded. The justification for this restricted exemption in Section 234(a) seems obvious: to limit further tax exemption privileges especially in light of the general provision on withdrawal of tax exemption privileges in Section 193 and the special provision on withdrawal of exemption from payment of real property taxes in the last paragraph of Section 234. These policy considerations are consistent with the State policy to ensure autonomy to local governments and the objective of the LGC that they enjoy genuine and meaningful local autonomy to enable them to attain their fullest development as self-reliant communities and make them effective partners in attainment of national goals. The power to tax is the most effective instrument to raise needed revenues to finance and support myriad activites of local government units for the delivery of basic services essential to the promotion of the general welfare and the enhancement of peace, progress, and prosperity of the people. It may also be relevant to recall that the original reasons for the withdrawal of tax exemption privileges granted to government-owned or controlled corporations and all other units of government were that such privilege resulted in serious tax base erosion and distortions in the tax treatment of similarly situated enterprises, and there was a need for these entities to share in the requirements of development, fiscal or otherwise, by paying the taxes and other charges due from them.”18 [Mactan Cebu International Airport Authority vs. Marcos, p. 690.]

The Court therein concluded that:

“nothing can prevent Congress from decreeing that even instrumentalities or agencies of the Government performing governmental functions may be subject to tax. Where it is done precisely to fulfill a constitutional mandate and national policy, no one can doubt its wisdom.”19 [Ibid., p. 692.]

The power to tax is primarily vested in Congress. However, in our jurisdiction, it may be exercised by local legislative bodies, no longer merely by virtue of a valid delegation as before, but pursuant to direct authority conferred by Section 5, Article X of the Constitution.20 [Isagani A. Cruz, Constitutional Law, (1991), at p. 84.] Thus Article X, Section 5 of the Constitution reads:

“Section 5 – Each Local Government unit shall have the power to create its own sources of revenue and to levy taxes, fees and charges subject to such guidelines and limitations as the Congress may provide, consistent with the basic policy of local autonomy. Such taxes, fees and charges shall accrue exclusively to the Local Governments.”

The important legal effect of Section 5 is that henceforth, in interpreting statutory provisions on municipal fiscal powers, doubts will have to resolved in favor of municipal corporations.21 [Bernas, The Constitution of the Philippines, 1st ed. p. 381.]

There is further basis for the conclusion that the non-impairment of contract clause cannot be invoked to uphold Meralco’s exemption from the local tax. Escudero Electric Co. was originally given the legislative franchise under Act. 3648 to operate an electric light and power system in the City of San Pablo and nearby municipalities. The term of the franchise under Act No. 3648 is a period of fifty years from the Act’s approval in 1929. The said law provided that the franchise is granted upon the condition that it shall be subject to amendment, or repeal by the Congress of the United States.22 [Act No. 3648, § 12.] Under the 1935,23 [Article XIV, § 8.] the 197324 [Article XIV, § 5.] and the 198725 [Article XII, § 11.] Constitutions, no franchise or right shall be granted except under the condition that it shall be subject to amendment, alteration or repeal by the National Assembly when the public interest so requires. With or without the reservation clause, franchises are subject to alterations through a reasonable exercise of the police power; they are also subject to alteration by the power to tax, which like police power cannot be contracted away.26 [Bernas, Supra, p. 341.]

Finally, while the matter is not of controlling significance, the Court notes that whereas the original Escudero franchise exempted the franchise holder from all taxes levied or collected “now or in the future”27 § 10, Act No. 3648.27 this phrase is noticeably omitted in the counterpart provision of P.D. 551 that said omission is intended not to foreclose future taxes may reasonably be deduced by statutory construction.

WHEREFORE, the instant petition is GRANTED. The decision of the Regional Trial Court of San Pablo City, appealed from is hereby reversed and set aside and the complaint of MERALCO is hereby DISMISSED.

No pronouncement as to costs.

SO ORDERED.

Romero, Vitug, Panganiban, and Purisima, JJ., concur.

[1991V274E] REYNALDO R. SAN JUAN, petitioner, vs. CIVIL SERVICE COMMISSION, DEPARTMENT OF BUDGET AND MANAGEMENT and CECILIA ALMAJOSE, respondents.

1991 Apr 19
En Banc
G.R. No. 92299

D E C I S I O N

GUTIERREZ, JR., J.:

In this petition for certiorari pursuant to Section 7, Article IX (A) of the present Constitution, the petitioner Governor of the Province of Rizal, prays for the nullification of Resolution No. 89-868 of the Civil Service Commission (CSC) dated November 21, 1989 and its Resolution No. 90-150 dated February 9, 1990.

The dispositive portion of the questioned Resolution reads:

“WHEREFORE, foregoing premises considered, the Commission resolved to dismiss, as it hereby dismisses the appeal of Governor Reynaldo San Juan of Rizal. Accordingly, the approved appointment of Ms. Cecilia Almajose as Provincial Budget Officer of Rizal, is upheld.” (Rollo, p. 32)

The subsequent Resolution No. 90-150 reiterates CSC’s position upholding the private respondent’s appointment by denying the petitioner’s motion for reconsideration for lack of merit.

The antecedent facts of the case are as follows:

On March 22, 1988, the position of Provincial Budget Officer (PBO) for the province of Rizal was left vacant by its former holder, a certain Henedima del Rosario.

In a letter dated April 18, 1988, the petitioner informed Director Reynaldo Abella of the Department of Budget and Management (DBM) Region IV that Ms. Dalisay Santos assumed office as Acting PBO since March 22, 1988 pursuant to a Memorandum issued by the petitioner who further requested Director Abella to endorse the appointment of the said Ms. Dalisay Santos to the contested position of PBO of Rizal. Ms. Dalisay Santos was then Municipal Budget Officer of Taytay, Rizal before she discharged the functions of acting PBO.

In a Memorandum dated July 26, 1988 addressed to the DBM Secretary, then Director Abella of Region IV recommended the appointment of the private respondent as PBO of Rizal on the basis of a comparative study of all Municipal Budget Officers of the said province which included three nominees of the petitioner. According to Abella, the private respondent was the most qualified since she was the only Certified Public Accountant among the contenders.

On August 1, 1988, DBM Undersecretary Nazario S. Cabuquit, Jr. signed the appointment papers of the private respondent as PBO of Rizal upon the aforestated recommendation of Abella.

In a letter dated August 3,1988 addressed to Secretary Carague, the petitioner reiterated his request for the appointment of Dalisay Santos to the contested position unaware of the earlier appointment made by Undersecretary Cabuquit.

On August 31, 1988, DBM Regional Director Agripino G. Galvez wrote the petitioner that Dalisay Santos and his other recommendees did not meet the minimum requirements under Local Budget Circular No. 31 for the position of a local budget officer. Director Galvez whether or not through oversight further required the petitioner to submit at least three other qualified nominees who are qualified for the position of PBO of Rizal for evaluation and processing.

On November 2, 1988, the petitioner after having been informed of the private respondent’s appointment wrote Secretary Carague protesting against the said appointment on the grounds that Cabuquit as DBM Undersecretary is not legally authorized to appoint the PBO; that the private respondent lacks the required three years work experience as provided in Local Budget Circular No. 31; and that under Executive Order No. 112, it is the Provincial Governor,
not the Regional Director or a Congressman, who has the power to recommend nominees for the position of PBO.

On January 9, 1989 respondent DBM, through its Director of the Bureau of Legal & Legislative Affairs (BLLA) Virgilio A. Afurung, issued a Memorandum ruling that the petitioner’s letter-protest is not meritorious considering that public respondent DBM validly exercised its prerogative in filling-up the contested position since none of the petitioner’s nominees met the prescribed requirements.

On January 27, 1989, the petitioner moved for a reconsideration of the BLLA ruling.

On February 28, 1989, the DBM Secretary denied the petitioner’s motion for reconsideration.

On March 27, 1989, the petitioner wrote public respondent CSC protesting against the appointment of the private respondent and reiterating his position regarding the matter.

Subsequently, public respondent CSC issued the questioned resolutions which prompted the petitioner to submit before us the following assignment of errors:

“A. THE CSC ERRED IN UPHOLDING THE APPOINTMENT BY DBM ASSISTANT SECRETARY CABUQUIT OF CECILIA ALMAJOSE AS PBO OF RIZAL.

B. THE CSC ERRED IN HOLDING THAT CECILIA ALMAJOSE POSSESSES ALL THE REQUIRED QUALIFICATIONS.

C. THE CSC ERRED IN DECLARING THAT PETITIONER’S NOMINEES ARE NOT QUALIFIED TO THE SUBJECT POSITION.

D. THE CSC AND THE DBM GRAVELY ABUSED THEIR DISCRETION IN NOT ALLOWING PETITIONER TO SUBMIT NEW NOMINEES WHO COULD MEET THE REQUIRED QUALIFICATIONS.” (Petition, pp. 7-8, Rollo, pp. 15-16)

All the assigned errors relate to the issue of whether or not the private respondent is lawfully entitled to discharge the functions of PBO of Rizal pursuant to the appointment made by public respondent DBM’s Undersecretary upon the recommendation of then Director Abella of DBM Region IV.

The petitioner’s arguments rest on his contention that he has the sole right and privilege to recommend the nominees to the position of PBO and that the appointee should come only from his nominees. In support thereof, he invokes Section 1 of Executive Order No. 112 which provides that:

“SECTION 1. All budget officers of provinces, cities and municipalities shall be appointed henceforth by the Minister of Budget and Management upon recommendation of the local chief executive concerned, subject to civil service law, rules and regulations, and they shall be placed under the administrative control and technical supervision of the Ministry of Budget and Management.”

The petitioner maintains that the appointment of the private respondent to the contested position was made in derogation of the provision so that both the public respondents committed grave abuse of discretion in upholding Almajose’s appointment.

There is no question that under Section 1 of Executive Order No. 112 the petitioner’s power to recommend is subject to the qualifications prescribed by existing laws for the position of PBO. Consequently, in the event that the recommendations made by the petitioner fall short of the required standards, the appointing authority, the Minister (now Secretary) of public respondent DBM is expected to reject the same.

In the event that the Governor recommends an unqualified person, is the Department Head free to appoint anyone he fancies? This is the issue before
us.

Before the promulgation of Executive Order No. 112 on December 24, 1986, Batas Pambansa Blg. 337, otherwise known as the Local Government Code vested upon the Governor, subject to civil service rules and regulations, the power to appoint the PBO (Sec. 216, subparagraph (1), BP 337). The Code further enumerated the qualifications for the position of PBO. Thus, Section 216, subparagraph (2) of the same code states that:

“(2) No person shall be appointed provincial budget officer unless he is a citizen of the Philippines, of good moral character, a holder of a degree preferably in law, commerce, public administration or any related course from a recognized college or university, a first grade civil service eligibility or its equivalent, and has acquired at least five years experience in budgeting or in any related field.”

The petitioner contends that since the appointing authority with respect to the Provincial Budget Officer of Rizal was vested in him before, then, the real intent behind Executive Order No. 112 in empowering him to recommend nominees to the position of Provincial Budget Officer is to make his recommendation part and parcel of the appointment process. He states that the phrase “upon recommendation of the local chief executive concerned” must be given mandatory application in consonance with the state policy of local autonomy as guaranteed by the 1987 Constitution under Art. II, Sec. 25 and Art. X, Sec. 2 thereof. He further argues that his power to recommend cannot validly be defeated by a mere administrative issuance of public respondent DBM reserving to itself the right to fill-up any existing vacancy in case the petitioner’s nominees do not meet the qualification requirements as embodied in public respondent DBM’s Local Budget Circular No. 31 dated February 9, 1988.

The questioned ruling is justified by the public respondent CSC as follows:

“As required by said E.O. No. 112, the DBM Secretary may choose from among the recommendees of the Provincial Governor who are thus qualified and eligible for appointment to the position of the PBO of Rizal.

Notwithstanding, the recommendation of the local chief executive is merely directory and not a condition sine qua non to the exercise by the Secretary of DBM of his appointing prerogative. To rule otherwise would in effect give the law or E.O. No. 112 a different interpretation or construction not intended therein, taking into consideration that said officer has been nationalized and is directly under the control and supervision of the DBM Secretary or through his duly authorized representative. It cannot be gainsaid that said national officer has a similar role in the local government unit, only on another area or concern, to that of a Commission on Audit resident auditor. Hence, to preserve and maintain the independence of said officer from the local government unit, he must be primarily the choice of the national appointing official, and the exercise thereof must not be unduly hampered or interfered with, provided the appointee finally selected meets the requirements for the position in accordance with prescribed Civil Service Law, Rules and Regulations. In other words, the appointing official is not restricted or circumscribed to the list submitted or recommended by the local chief executive in the final selection of an appointee for the position. He may consider other nominees for the position vis a vis the nominees of the local chief executive.” (CSC Resolution No. 89-868, p. 2; Rollo, p. 31)

The issue before the Court is not limited to the validity of the appointment of one Provincial Budget Officer. The tug of war between the Secretary of Budget and Management and the Governor of the premier province of Rizal over a seemingly innocuous position involves the application of a most important constitutional policy and principle, that of local autonomy. We have to obey the clear mandate on local autonomy. Where a law is capable of two interpretations, one in favor of centralized power in Malacañang and the other beneficial to local autonomy, the scales must be weighed in favor of autonomy.

The exercise by local governments of meaningful power has been a national goal since the turn of the century. And yet, inspite of constitutional provisions and, as in this case, legislation mandating greater autonomy for local officials, national officers cannot seem to let go of centralized powers. They deny or water down what little grants of autonomy have so far been given to municipal corporations.

President McKinley’s Instructions dated April 7, 1900 to the Second Philippine Commission ordered the new Government “to devote their attention in the first instance to the establishment of municipal governments in which natives of the Islands, both in the cities and rural communities, shall be afforded the opportunity to manage their own local officers to the fullest extent of which they are capable and subject to the least degree of supervision and control which a careful study of their capacities and observation of the workings of native control show to be consistent with the maintenance of law, order and loyalty.”

In this initial organic act for the Philippines, the Commission which combined both executive and legislative powers was directed to give top priority to making local autonomy effective.

The 1935 Constitution had no specific article on local autonomy. However, in distinguishing between presidential control and supervision as follows:

“The President shall have control of all the executive departments, bureaus, or offices, exercise general supervision over all local governments as may be provided by law, and take care that the laws be faithfully executed.” (Sec. 11, Article VII, 1935 Constitution)

the Constitution clearly limited the executive power over local governments to “general supervision . . . as may be provided by law.” The President controls the executive departments. He has no such power over local governments. He has only supervision and that supervision is both general and circumscribed by statute.

In Tecson v. Salas, 34 SCRA 275, 282 (1970), this Court stated:

“. . . Hebron v. Reyes, (104 Phil. 175 [1958]) with the then Justice, now Chief Justice, Concepcion as the ponente, clarified matters. As was pointed out, the presidential competence is not even supervision in general, but general supervision as may be provided by law. He could not thus go beyond the applicable statutory provisions, which bind and fetter his discretion on the matter. Moreover, as had been earlier ruled in an opinion penned by Justice Padilla in Mondano v. Silvosa, (97 Phil. 143 [1955]) referred to by the present Chief Justice in his opinion in the Hebron case, supervision goes no further than `overseeing or the power or authority of an officer to see that subordinate officers perform their duties. If the latter fail or neglect to fulfill them the former may take such action or step as prescribed by law to make them perform their duties.’ (Ibid, pp. 147-148) Control, on the other hand, ‘means the power of an officer to alter or modify or nullify or set aside what a subordinate had done in the performance of their duties and to substitute the judgment of the former for that of the latter.’ It would follow then, according to the present Chief Justice, to go back to the Hebron opinion, that the President had to abide by the then provisions of the Revised Administrative Code on suspension and removal of municipal officials, there being no power of control that he could rightfully exercise, the law clearly specifying the procedure by which such disciplinary action would be taken.”

Pursuant to this principle under the 1935 Constitution, legislation implementing local autonomy was enacted. In 1959, Republic Act No. 2264,
“An Act Amending the Law Governing Local Governments by Increasing Their Autonomy and Reorganizing Local Governments” was passed. It was followed in 1967 when Republic Act No. 5185, the Decentralization Law was enacted, giving “further autonomous powers to local governments.”

The provisions of the 1973 Constitution moved the country further, at least insofar as legal provisions are concerned, towards greater autonomy. It provided under Article II as a basic principle of government:

“SEC. 10. The State shall guarantee and promote the autonomy of local government units, especially the barangay to ensure their fullest development as self-reliant communities.”

An entire article on Local Government was incorporated into the Constitution. It called for a local government code defining more responsive and accountable local government structures. Any creation, merger, abolition, or substantial boundary alteration cannot be done except in accordance with the local government code and upon approval by a plebiscite. The power to create sources of revenue and to levy taxes was specifically settled upon local governments.

The exercise of greater local autonomy is even more marked in the present Constitution.

Article II, Section 25 on State Policies provides:

“SEC. 25. The State shall ensure the autonomy of local governments.”

The 14 sections in Article X on Local Government not only reiterate earlier doctrines but give in greater detail the provisions making local autonomy more meaningful.

Thus, Sections 2 and 3 of Article X provide:

“SEC. 2. The territorial and political subdivisions shall enjoy local autonomy.

SEC. 3. The Congress shall enact a local government code which shall provide for a more responsive and accountable local government structure instituted through a system of decentralization with effective mechanisms of recall, initiative, and referendum, allocate among the different local
government units their powers, responsibilities, and resources, and provide for the qualifications, election, appointment and removal, term, salaries, powers and functions and duties of local officials, and all other matters relating to the organization and operation of the local units.”

When the Civil Service Commission interpreted the recommending power of the Provincial Governor as purely directory, it went against the letter and spirit of the constitutional provisions on local autonomy. If the DBM Secretary jealously hoards the entirety of budgetary powers and ignores the right of local governments to develop self-reliance and resoluteness in the handling of their own funds, the goal of meaningful local autonomy is frustrated and set back.

The right given by Local Budget Circular No. 31 which states:

“SEC. 6.0 The DBM reserves the right to fill up any existing vacancy where none of the nominees of the local chief executive meet the prescribed requirements.”

is ultra vires and is, accordingly, set aside. The DBM may appoint only from the list of qualified recommendees nominated by the Governor. If none is qualified, he must return the list of nominees to the Governor explaining why no one meets the legal requirements and ask for new recommendees who have the necessary eligibilities and qualifications.

The PBO is expected to synchronize his work with DBM. More important, however, is the proper administration of fiscal affairs at the local level.
Provincial and municipal budgets are prepared at the local level and after completion are forwarded to the national officials for review. They are prepared by the local officials who must work within the constraints of those budgets. They are not formulated in the inner sanctums of an all-knowing DBM and unilaterally imposed on local governments whether or not they are relevant to local needs and resources. It is for this reason that there should be a genuine interplay, a balancing of viewpoints, and a harmonization of proposals from both the local and national officials. It is for this reason that the nomination and appointment process involves a sharing of power between the two levels of government.

It may not be amiss to give by way of analogy the procedure followed in the appointments of Justices and Judges. Under Article VIII of the Constitution, nominations for judicial positions are made by the Judicial and Bar Council.

The President makes the appointments from the list of nominees submitted to her by the Council. She cannot apply the DBM procedure, reject all the Council nominees, and appoint another person whom she feels is better qualified. There can be no reservation of the right to fill up a position with a person of the appointing power’s personal choice.

The public respondent’s grave abuse of discretion is aggravated by the fact that Director Galvez required the Provincial Governor to submit at least three other names of nominees better qualified than his earlier recommendation. It was a meaningless exercise. The appointment of the private respondent was formalized before the Governor was extended the courtesy of being informed that his nominee had been rejected. The complete disregard of the local government’s prerogative and the smug belief that the DBM has absolute wisdom, authority, and discretion are manifest.

In his classic work “Philippine Political Law” Dean Vicente G. Sinco stated that the value of local governments as institutions of democracy is measured by the degree of autonomy that they enjoy. Citing Tocqueville, he stated that “local assemblies of citizens constitute the strength of free nations. . . . A people may establish a system of free government but without the spirit of municipal institutions, it cannot have the spirit of liberty.” (Sinco, Philippine Political Law, Eleventh Edition, pp. 705-706).

Our national officials should not only comply with the constitutional provisions on local autonomy but should also appreciate the spirit of liberty upon which these provisions are based.

WHEREFORE, the petition is hereby GRANTED. The questioned resolutions of the Civil Service Commission are SET ASIDE. The appointment of respondent Cecilia Almajose is nullified. The Department of Budget and Management is ordered to appoint the Provincial Budget Officer of Rizal from among qualified nominees submitted by the Provincial Governor.

SO ORDERED.

Fernan (C.J.), Narvasa, Melencio-Herrera, Cruz, Paras, Feliciano, Gancayco, Padilla, Bidin, Sarmiento, Griño-Aquino, Medialdea, Regalado and Davide, Jr., JJ., concur.

[1991V247] MUNICIPALITY OF SAN FERNANDO, LA UNION, petitioner, vs. HON. JUDGE ROMEO N. FIRME, JUANA RIMANDO-BANIÑA, LAUREANO BANIÑA, JR., SOR MARIETA BANIÑA, MONTANO BANIÑA ORJA BANIÑA AND LYDIA R. BANIÑA, respondents.

1991 Apr 8
1st Division
G.R. No. 52179

D E C I S I O N

MEDIALDEA, J.:

This is a petition for certiorari with prayer for the issuance of a writ of preliminary mandatory injunction seeking the nullification or modification of the proceedings and the orders issued by the respondent Judge Romeo N. Firme, in his capacity as the presiding judge of the Court of First Instance of La Union, Second Judicial District, Branch IV, Bauang, La Union in Civil Case No. 107-BG, entitled “Juana Rimando Baniña, et al. vs. Macario Nieveras, et al.” dated November 4, 1975; July 13, 1976; August 23, 1976; February 23, 1977; March 16, 1977; July 26, 1979; September 7, 1979; November 7, 1979 and December 3, 1979 and the decision dated October 10, 1979 ordering defendants Municipality of San Fernando, La Union and Alfredo Bislig to pay, jointly and severally, the plaintiffs for funeral expenses, actual damages consisting of the loss of earning capacity of the deceased, attorney’s fees and costs of suit and dismissing the complaint against the Estate of Macario Nieveras and Bernardo Balagot.

The antecedent facts are as follows:

Petitioner Municipality of San Fernando, La Union is a municipal corporation existing under and in accordance with the laws of the Republic of the Philippines. Respondent Honorable Judge Romeo N. Firme is impleaded in his official capacity as the presiding judge of the Court of First Instance of La Union, Branch IV, Bauang, La Union. While private respondents Juana Rimando-Baniña, Laureano Baniña, Jr., Sor Marietta Baniña, Montano Baniña, Orja Baniña and Lydia R. Baniña are heirs of the deceased Laureano Baniña Sr. and plaintiffs in Civil Case No. 107-Bg before the aforesaid court.

At about 7 o’clock in the morning of December 16, 1965, a collision occurred involving a passenger jeepney driven by Bernardo Balagot and owned by the Estate of Macario Nieveras, a gravel and sand truck driven by Jose Manandeg and owned by Tanquilino Velasquez and a dump truck of the Municipality of San Fernando, La Union and driven by Alfredo Bislig. Due to the impact, several passengers of the jeepney including Laureano Baniña Sr. died as a result of the injuries they sustained and four (4) others suffered varying degrees of physical injuries.

On December 11, 1966, the private respondents instituted a compliant for damages against the Estate of Macario Nieveras and Bernardo Balagot, owner and driver, respectively, of the passenger jeepney, which was docketed Civil Case No. 2183 in the Court of First Instance of La Union, Branch I, San Fernando, La Union. However, the aforesaid defendants filed a Third Party Complaint against the petitioner and the driver of a dump truck of petitioner.

Thereafter, the case was subsequently transferred to Branch IV, presided over by respondent judge and was subsequently docketed as Civil Case No. 107-Bg. By virtue of a court order dated May 7, 1975, the private respondents amended the complaint wherein the petitioner and its regular employee, Alfredo Bislig were impleaded for the first time as defendants. Petitioner filed its answer and raised affirmative defenses such as lack of cause of action, non-suability of the State, prescription of cause of action and the negligence of the owner and driver of the passenger jeepney as the proximate cause of the collision.

In the course of the proceedings, the respondent judge issued the following questioned orders, to wit:

(1)  Order dated November 4, 1975 dismissing the cross-claim against Bernardo Balagot;

(2)  Order dated July 13, 1976 admitting the Amended Answer of the Municipality of San Fernando, La Union and Bislig and setting the hearing on the affirmative defenses only with respect to the supposed lack of jurisdiction;

(3)  Order dated August 23, 1976 deferring the resolution of the grounds for the Motion to Dismiss until the trial;

(4)  Order dated February 23, 1977 denying the motion for reconsideration of the order of July 13, 1976 filed by the Municipality and Bislig for having been filed out of time;

(5)  Order dated March 16, 1977 reiterating the denial of the motion for reconsideration of the order of July 13, 1976;

(6)  Order dated July 26, 1979 declaring the case deemed submitted for decision it appearing that parties have not yet submitted their respective memoranda despite the court’s direction; and

(7)  Order dated September 7, 1979 denying the petitioner’s motion for reconsideration and or order to recall prosecution witnesses for cross examination.

On October 10, 1979 the trial court rendered a decision, the dispositive portion is hereunder quoted as follows:

“IN VIEW OF ALL OF (sic) THE FOREGOING, judgment is hereby rendered for the plaintiffs, and defendants Municipality of San Fernando, La Union and Alfredo Bislig are ordered to pay jointly and severally, plaintiffs Juana Rimando-Baniña, Mrs. Priscilla B. Surell, Laureano Baniña, Jr., Sor Marietta Baniña, Mrs. Fe B. Soriano, Montano Baniña, Orja Baniña and Lydia B. Baniña the sums of P1,500.00 as funeral expenses and P24,744.24 as the lost expected earnings of the late Laureano Baniña Sr., P30,000.00 as moral damages, and P2,500.00 as attorney’s fees. Costs against said defendants.

“The Complaint is dismissed as to defendants Estate of Macario Nieveras and Bernardo Balagot.

“SO ORDERED.” (Rollo, p. 30)

Petitioner filed a motion for reconsideration and for a new trial without prejudice to another motion which was then pending. However, respondent judge issued another order dated November 7, 1979 denying the motion for reconsideration of the order of September 7, 1979 for having been filed out of time.

Finally, the respondent judge issued an order dated December 3, 1979 providing that if defendants municipality and Bislig further wish to pursue the matter disposed of in the order of July 26, 1979, such should be elevated to a higher court in accordance with the Rules of Court. Hence, this petition.

Petitioner maintains that the respondent judge committed grave abuse of discretion amounting to excess of jurisdiction in issuing the aforesaid orders and in rendering a decision. Furthermore, petitioner asserts that while appeal of the decision maybe available, the same is not the speedy and adequate remedy in the ordinary course of law.

On the other hand, private respondents controvert the position of the petitioner and allege that the petition is devoid of merit, utterly lacking the good faith which is indispensable in a petition for certiorari and prohibition.

(Rollo, p. 42.) In addition, the private respondents stress that petitioner has not considered that every court, including respondent court, has the inherent power to amend and control its process and orders so as to make them conformable to law and justice. (Rollo, p. 43.)

The controversy boils down to the main issue of whether or not the respondent court committed grave abuse of discretion when it deferred and failed to resolve the defense of non-suability of the State amounting to lack of jurisdiction in a motion to dismiss.

In the case at bar, the respondent judge deferred the resolution of the defense of non-suability of the State amounting to lack of jurisdiction until trial. However, said respondent judge failed to resolve such defense, proceeded with the trial and thereafter rendered a decision against the municipality and its driver.

The respondent judge did not commit grave abuse of discretion when in the exercise of its judgment it arbitrarily failed to resolve the vital issue of non-suability of the State in the guise of the municipality. However, said judge acted in excess of his jurisdiction when in his decision dated October 10, 1979 he held the municipality liable for the quasi-delict committed by its regular employee.

The doctrine of non-suability of the State is expressly provided for in Article XVI, Section 3 of the Constitution, to wit: “the State may not be sued without its consent.”

Stated in simple parlance, the general rule is that the State may not be sued except when it gives consent to be sued. Consent takes the form of express or implied consent.

Express consent may be embodied in a general law or a special law. The standing consent of the State to be sued in case of money claims involving liability arising from contracts is found in Act No. 3083. A special law may be passed to enable a person to sue the government for an alleged quasi-delict, as in Merritt v. Government of the Philippine Islands (34 Phil 311). (see United States of America v. Guinto, G.R. No. 76607, February 26, 1990, 182 SCRA 644, 654.)

Consent is implied when the government enters into business contracts, thereby descending to the level of the other contracting party, and also when the State files a complaint, thus opening itself to a counterclaim. (Ibid)

Municipal corporations, for example, like provinces and cities, are agencies of the State when they are engaged in governmental functions and therefore should enjoy the sovereign immunity from suit. Nevertheless, they are subject to suit even in the performance of such functions because their charter provided that they can sue and be sued. (Cruz, Philippine Political Law, 1987 Edition, p. 39)

A distinction should first be made between suability and liability. “Suability depends on the consent of the state to be sued, liability on the applicable law and the established facts. The circumstance that a state is suable does not necessarily mean that it is liable; on the other hand, it can never be held liable if it does not first consent to be sued. Liability is not conceded by the mere fact that the state has allowed itself to be sued. When the state does waive its sovereign immunity, it is only giving the plaintiff the chance to prove, if it can, that the defendant is liable.” (United States of America v. Guinto, supra, p. 659-660).

Anent the issue of whether or not the municipality is liable for the torts committed by its employee, the test of liability of the municipality depends on whether or not the driver, acting in behalf of the municipality, is performing governmental or proprietary functions. As emphasized in the case of Torio v. Fontanilla (G.R. No. L-29993, October 23, 1978. 85 SCRA 599, 606), the distinction of powers becomes important for purposes of determining the liability of the municipality for the acts of its agents which result in an injury to third persons.

Another statement of the test is given in City of Kokomo v. Loy, decided by the Supreme Court of Indiana in 1916, thus:

“Municipal corporations exist in a dual capacity, and their functions are twofold. In one they exercise the right springing from sovereignty, and while in the performance of the duties pertaining thereto, their acts are political and governmental. Their officers and agents in such capacity, though elected or appointed by them, are nevertheless public functionaries performing a public service, and as such they are officers, agents, and servants of the state. In the other capacity the municipalities exercise a private, proprietary or corporate right, arising from their existence as legal persons and not as public agencies. Their officers and agents in the performance of such functions act in behalf of the municipalities in their corporate or individual capacity, and not for the state or sovereign power.” (112 N.E., 994-995) (Ibid, pp. 605-606.)

It has already been remarked that municipal corporations are suable because their charters grant them the competence to sue and be sued. Nevertheless, they are generally not liable for torts committed by them in the discharge of governmental functions and can be held answerable only if it can be shown that they were acting in a proprietary capacity. In permitting such entities to be sued, the State merely gives the claimant the right to show that the defendant was not acting in its governmental capacity when the injury was committed or that the case comes under the exceptions recognized by law. Failing this, the claimant cannot recover. (Cruz, supra, p. 44.)

In the case at bar, the driver of the dump truck of the municipality insists that “he was on his way to the Naguilian river to get a load of sand and gravel for the repair of San Fernando’s municipal streets.” (Rollo, p. 29.)

In the absence of any evidence to the contrary, the regularity of the performance of official duty is presumed pursuant to Section 3(m) of Rule 131 of the Revised Rules of Court. Hence, We rule that the driver of the dump truck was performing duties or tasks pertaining to his office.

We already stressed in the case of Palafox, et. al. v. Province of Ilocos Norte, the District Engineer, and the Provincial Treasurer (102 Phil 1186) that “the construction or maintenance of roads in which the truck and the driver worked at the time of the accident are admittedly governmental activities.”

After a careful examination of existing laws and jurisprudence, We arrive at the conclusion that the municipality cannot be held liable for the torts committed by its regular employee, who was then engaged in the discharge of governmental functions. Hence, the death of the passenger    tragic and deplorable though it may be imposed on the municipality no duty to pay monetary compensation.

All premises considered, the Court is convinced that the respondent judge’s dereliction in failing to resolve the issue of non-suability did not amount to grave abuse of discretion. But said judge exceeded his jurisdiction when it ruled on the issue of liability.

ACCORDINGLY, the petition is GRANTED and the decision of the respondent court is hereby modified, absolving the petitioner municipality of any liability in favor of private respondents.

SO ORDERED.

Narvasa, Cruz, Gancayco and Griño-Aquino, JJ., concur.

[1989V914] CITY OF MANILA, and EVANGELINE SUVA, petitioners, vs. HON. INTERMEDIATE APPELLATE COURT, IRENE STO. DOMINGO and for and in behalf of her minor children, VIVENCIO, JR., IRIS, VERGEL and IMELDA, all surnamed STO. DOMINGO, respondents.

1989 Nov 15
2nd Division
G.R. No. 71159

D E C I S I O N

PARAS, J.:

This is a petition for review on certiorari seeking to reverse and set aside: (a) the Decision of the Intermediate Appellate Court now Court of Appeals 1 promulgated on May 31, 1984 in AC-G.R. CV No. 00613-R entitled Irene Sto. Domingo et al. v. City Court of Manila et al., modifying the decision of the then Court of First Instance of Manila, Branch VIII 2 in Civil Case No. 121921 ordering the defendants (herein petitioners) to give plaintiffs (herein private respondents) the right to use a burial lot in the North Cemetery corresponding to the unexpired term of the fully paid lease sued upon, to search the remains of the late Vivencio Sto. Domingo, Sr. and to bury the same in a substitute lot to be chosen by the plaintiffs; and (b) the Resolution of the Court of Appeals dated May 28, 1985 denying petitioner’s motion for reconsideration.

As found by the Court of Appeals and the trial court, the undisputed facts of the case are as follows:

“Brought on February 22, 1979 by the widow and children of the late Vivencio Sto. Domingo, Sr. was this action for damages against the City of Manila; Evangeline Suva of the City Health Office; Sergio Mallari, officer-in-charge of the North Cemetery; and Joseph Hebmuth, the latter’s predecessor as officer-in-charge of the said burial grounds owned and operated by the City Government of Manila.

“Vivencio Sto. Domingo, Sr. deceased husband of plaintiff Irene Sto. Domingo and father of the litigating minors, died on June 4, 1971 and buried on June 6, 1971 in Lot No. 159, Block No. 194 of the North Cemetery which lot was leased by the city to Irene Sto. Domingo for the period from June 6, 1971 to June 6, 2021 per Official Receipt No. 61307 dated June 6, 1971 (see Exh. A) with an expiry date of June 6, 2021 (see Exh. A-1). Full payment of the rental therefor of P50.00 is evidenced by the said receipt which appears to be regular on its face. Apart from the aforementioned receipt, no other document was executed to embody such lease over the burial lot in question. In fact, the burial record for Block No. 194 of Manila North Cemetery (see Exh. 2) in which subject Lot No. 159 is situated does not reflect the term of duration of the lease thereover in favor of the Sto. Domingos.

“Believing in good faith that, in accordance with Administrative Order No. 5, Series of 1975, dated March 6, 1975, of the City Mayor of Manila (See Exh. 1) prescribing uniform procedure and guidelines in the processing of documents pertaining to and for the use and disposition of burial lots and plots within the North Cemetery, etc., subject Lot No. 159 of Block 194 in which the mortal remains of the late Vivencio Sto. Domingo were laid to rest, was leased to the bereaved family for five (5) years only, subject lot was certified on January 25, 1978 as ready for exhumation.

“On the basis of such certification, the authorities of the North Cemetery then headed by defendant Joseph Helmuth authorized the exhumation and removal from subject burial lot the remains of the late Vivencio Sto. Domingo, Sr., placed the bones and skull in a bag or sack and kept the same in the depository or bodega of the cemetery. Subsequently, the same lot in question was rented out to another lessee so that when the plaintiffs herein went to said lot on All Souls Day in their shock, consternation and dismay, that the resting place of their dear departed did not anymore bear the stone marker which they lovingly placed on the tomb. Indignant and disgusted over such a sorrowful finding, Irene Sto. Domingo lost no time in inquiring from the officer-in-charge of the North Cemetery, defendant Sergio Mallari, and was told that the remains of her late husband had been taken from the burial lot in question which was given to another lessee.

“Irene Sto. Domingo was also informed that she can look for the bones of her deceased husband in the warehouse of the cemetery where the exhumed remains from the different burial lots of the North Cemetery are being kept until they are retrieved by interested parties. But to the bereaved widow, what she was advised to do was simply unacceptable. According to her, it was just impossible to locate the remains of her late husband in a depository containing thousands upon thousands of sacks of human bones. She did not want to run the risk of claiming for the wrong set of bones. She was even offered another lot but was never appeased. She was too aggrieved that she came to court for relief even before she could formally present her claims and demands to the city government and to the other defendants named in the present complaint.” (Decision, Court of Appeals, pp. 2-3; Rollo, pp. 34-55)

The trial court, on August 4, 1981, rendered its Decision, the dispositive portion of which states:

“WHEREFORE, judgment is hereby rendered, ordering the defendants to give plaintiffs the right to make use of another single lot within the North Cemetery for a period of forty-three (43) years four (4) months and eleven (11 ) days, corresponding to the unexpired term of the fully paid lease sued upon; and to search without let up and with the use of all means humanly possible, for the remains of the late Vivencio Sto. Domingo, Sr. and thereafter, to bury the same in the substitute lot to be chosen by the plaintiffs pursuant to this decision.

“For want of merit, defendant’s counterclaim is DISMISSED.

“No pronouncement as to costs.

“SO ORDERED.” (Rollo, p. 31).

The decision was appealed to the Court of Appeals which on May 31, 1984 rendered a decision (Rollo, pp. 33-40) modifying the decision appealed from, the dispositive portion of which reads:

“WHEREFORE, PREMISES CONSIDERED, the decision appealed from is hereby REVERSED (is hereby modified) and another one is hereby entered:

“1.  Requiring in full force the defendants to look in earnest for the bones and skull of the late Vivencio Sto. Domingo, Sr., and to bury the same in the substitute lot adjudged in favor of plaintiffs hereunder;

“2.  Ordering defendants to pay plaintiffs-appellants jointly and severally P10,000.00 for breach of contract;

“3.  Ordering defendants to pay plaintiffs-appellants, jointly and severally, P20,000.00 for moral damages;

“4.  Ordering defendants to pay plaintiffs-appellants jointly and severally, P20,000.00 for exemplary damages;

“5.  Ordering defendants to pay plaintiffs-appellants, jointly and severally, P10,000.00 as and for attorney’s fees;

“6.  Ordering defendants, to pay plaintiffs-appellants, jointly and severally, on the foregoing amounts legal rate of interest computed from filing hereof until fully paid; and

“7.  Ordering defendants, to pay plaintiffs-appellants, jointly and severally, the cost of suit.

“SO ORDERED.” (Rollo, p. 40)

The petitioners’ motion for reconsideration was likewise denied.

Hence, this instant petition (Rollo, pp. 7-27) filed on July 27, 1985.

The grounds relied upon for this petition are as follows:

I
THE HONORABLE INTERMEDIATE APPELLATE COURT ERRED IN AWARDING DAMAGES AGAINST THE PETITIONERS HEREIN, NOTWITHSTANDING THEIR GOOD FAITH AND THEIR LACK OF KNOWLEDGE OR CONSENT TO THE REMOVAL OF THE SKELETAL REMAINS OF THE LATE VIVENCIO STO. DOMINGO, SR. FROM THE SUBJECT BURIAL LOT.

II
THE HON. INTERMEDIATE APPELLATE COURT ERRED IN HOLDING PETITIONERS HEREIN RESPONSIBLE FOR THE ALLEGED TORTS OF THEIR SUBORDINATE OFFICIALS AND EMPLOYEES, INSPITE OF THE PROVISIONS OF SECTION 4 OF THE REPUBLIC ACT NO. 409 (REVISED CHARTER OF MANILA) AND OTHER APPLICABLE JURISPRUDENCE ON THE SUBJECT EXEMPTING THE PETITIONERS FROM DAMAGES FROM THE MALFEASANCE OR MISFEASANCE OF THEIR OFFICIALS AND EMPLOYEES, IF THERE BE ANY IN THIS CASE.

(Brief for Petitioners, Rollo, pp. 93-94)

In the resolution dated November 13, 1985 (Rollo, p. 84), the petition was given due course.

The pivotal issue of this case is whether or not the operations and functions of a public cemetery are a governmental, or a corporate or proprietary function of the City of Manila. The resolution of this issue is essential to the determination of the liability for damages of the petitioner city.

Petitioners alleged in their petition that the North Cemetery is exclusively devoted for public use or purpose as stated in Sec. 316 of the Compilation of the Ordinances of the City of Manila. They conclude that since the City is a political subdivision in the performance of its governmental function, it is immune from tort liability which may be caused by its public officers and subordinate employees. Further Section 4, Article I of the Revised Charter of Manila exempts the city from liability for damages or injuries to persons or property arising from the failure of the Mayor, the Municipal Board, or any other city officer, to enforce the provision of its charter or any other laws, or ordinance, or from negligence of said Mayor, Municipal Board or any other officers while enforcing or attempting to enforce said provisions. They allege that the Revised Charter of Manila being a special law cannot be defeated by the Human Relations provisions of the Civil Code being a general law.

Private respondents on the other hand maintain that the City of Manila entered into a contract of lease which involve the exercise of proprietary functions with private respondent Irene Sto. Domingo. The city and its officers therefore can be sued for any violation of the contract of lease.

Private respondents’ contention is well-taken.

Under Philippine laws, the City of Manila is a political body corporate and as such endowed with the faculties of municipal corporations to be exercised by and through its city government in conformity with law, and in its proper corporate name. It may sue and be sued, and contract and be contracted with. Its powers are twofold in character-public, governmental or political on the one hand, and corporate, private and proprietary on the other. Governmental powers are those exercised in administering the powers of the state and promoting the public welfare and they include the legislative, judicial, public and political. Municipal powers on the one hand are exercised for the special benefit and advantage of the community and include those which are ministerial, private and corporate. In McQuillin on Municipal Corporation, the rule is stated thus: “A municipal corporation proper has . . . a public character as regards the state at large insofar as it is its agent in government, and private (so called) insofar as it is to promote local necessities and conveniences for its own community (Torio v. Fontanilla, 85 SCRA 599 [1978]). In connection with the powers of a municipal corporation, it may acquire property in its public or governmental capacity, and private or proprietary capacity. The New Civil Code divides such properties into property for public use and patrimonial properties (Article 423), and further enumerates the properties for public use as provincial roads, city streets, municipal streets, the squares, fountains, public waters, promenades, and public works for public service paid for by said provisions, cities or municipalities, all other property is patrimonial without prejudice to the provisions of special laws (Article 424; Province of Zamboanga del Norte v. City of Zamboanga, et al., 22 SCRA 1334 [1968]).

Thus in Torio v. Fontanilla, supra, the Court declared that with respect to proprietary functions the settled rule is that a municipal corporation can be held liable to third persons ex contractu (Municipality of Moncada v. Cajuigan, et al., 21 Phil. 184 (1912) or ex delicto (Mendoza v. de Leon, 33 Phil. 508 (1916).

The Court further stressed:

“Municipal corporations are subject to be sued upon contracts and in tort . . .

Xxx                 xxx                 xxx

“The rule of law is a general one, that the superior or employer must answer civilly for the negligence or want of skill of its agent or servant in the course or line of his employment, by which another, who is free from contributory fault, is injured. Municipal corporations under the conditions herein stated, fall within the operation of this rule of law, and are liable accordingly, to civil actions for damages when the requisite elements of liability coexist. . . .   mphasis supplied).

The Court added:

“. . . while the following are corporate or proprietary in character, viz: municipal waterworks, slaughter houses, markets, stables, bathing establishments, wharves, ferries and fisheries. Maintenance of parks, golf courses, cemeteries and airports among others, are also recognized as municipal or city activities of a proprietary character. (Dept. of Treasury v. City of Evansvulle, Sup. Ct. of Indiana, 60 N.E. 2nd 952, 954 cited in Torio v. Fontanilla, supra)   mphasis supplied).

Under the foregoing considerations and in the absence of a special law, the North Cemetery is a patrimonial property of the City of Manila which was created by resolution of the Municipal Board of August 27, 1903 and January 7, 1904 (Petition, Rollo pp. 20-21 Compilation of the Ordinances of the City of Manila). The administration and government of the cemetery are under the City Health Officer (Ibid., Sec. 3189), the order and police of the cemetery (Ibid., Sec. 319), the opening of graves, inches, or tombs, the exhuming of remains, and the purification of the same (Ibid., Sec. 327) are under the charge and responsibility of the superintendent of the cemetery. The City of Manila furthermore prescribes the procedure and guidelines for the use and dispositions of burial lots and plots within the North Cemetery through Administrative Order No. 5, s. 1975 (Rollo, p. 44). With the acts of dominion, there is, therefore no doubt that the North Cemetery is within the class of property which the City of Manila owns in its proprietary or private character. Furthermore, there is no dispute that the burial lot was leased in favor of the private respondents. Hence, obligations arising from contracts have the force of law between the contracting parties. Thus a lease contract executed by the lessor and lessee remains as the law between them. (Henson v. Intermediate Appellate Court, 148 SCRA 11 [1987]). Therefore, a breach of contractual provision entitles the other party to damages even if no penalty for such breach is prescribed in the contract. (Boysaw v. Interphil Promotions, Inc., 148 SCRA 635 [1987]).

Noteworthy are the findings of the Court of Appeals as to the harrowing experience of private respondents and their wounded feelings upon discovery that the remains of their loved one were exhumed without their knowledge and consent, as said Court declared:

“It has been fully established that the appellants, in spite or perhaps because, of their lowly station in life have found great consolation in their bereavement from the loss of their family head, by visiting his grave on special or even ordinary occasions, but particularly on All Saints Day, in keeping with the deep, beautiful and Catholic Filipino tradition of revering the memory of their dead. It would have been but fair and equitable that they were notified of the intention of the city government to transfer the skeletal remains of the late Vivencio Sto. Domingo to give them an opportunity to demand the faithful fulfillment of their contract, or at least to prepare and make provisions for said transfer in order that they would not lose track of the remains of their beloved dead, as what has actually happened on this case. We understand fully what the family of the deceased must have felt when on All Saints Day of 1978, they found a new marker on the grave they were to visit, only to be told to locate their beloved dead among thousands of skeletal remains which to them was desecration and an impossible task. Even the lower court recognized this when it stated in its decision thus:

‘All things considered, even as the Court commiserates with plaintiffs for the unfortunate happening complained of and untimely desecration of the resting place and remains of their deceased dearly beloved, it finds the reliefs prayed for by them lacking in legal and factual basis. Under the aforementioned facts and circumstances, the most that plaintiffs can ask for is the replacement of subject lot with another lot of equal size and similar location in the North Cemetery which substitute lot plaintiffs can make use of without paying any rental to the city government for a period of forty-three (43) years, four (4) months and eleven (11) days corresponding to the unexpired portion of the term of the lease sued upon as of January 25, 1978 when the remains of the late Vivencio Sto. Domingo, Sr. were prematurely removed from the disputed lot; and to require the defendants to look in earnest for the bones and skull of the late Vivencio Sto. Domingo Sr. and to bury the same in the substitute lot adjudged in favor of plaintiffs hereunder.’” (Decision, Intermediate Appellate Court, p. 7, Rollo, p. 39)

As regards the issue of the validity of the contract of lease of grave lot No. 159, Block No. 195 of the North Cemetery for 50 years beginning from June 6, 1971 to June 6, 2021 as clearly stated in the receipt duly signed by the deputy treasurer of the City of Manila and sealed by the city government, there is nothing in the record that justifies the reversal of the conclusion of both the trial court and the Intermediate Appellate Court to the effect that the receipt is in itself a contract of lease. (Decision, Intermediate Appellate Court, p. 3, Rollo, pp. 5-6).

Under the doctrine of respondeat superior, (Torio v. Fontanilla, supra), petitioner City of Manila is liable for the tortious act committed by its agents who failed to verify and check the duration of the contract of lease. The contention of the petitioner-city that the lease is covered by Administrative Order No. 5, series of 1975 dated March 6, 1975 of the City of Manila for five (5) years only beginning from June 6, 1971 is not meritorious for the said administrative order covers new leases. When subject lot was certified on January 25, 1978 as ready for exhumation, the lease contract for fifty (50) years was still in full force and effect.

PREMISES CONSIDERED, the Decision of the Intermediate Appellate Court is hereby AFFIRMED.

SO ORDERED.

Padilla, Sarmiento and Regalado, JJ., concur.
Melencio-Herrera (Chairman), J., is on leave.

—————-
Footnotes

1.  Penned by Justice Ma. Rosario Quetulio-Losa, concurred in by Justices Ramon G. Gaviola, Jr. and Eduardo P. Caguioa.
2.  Presided by Judge Fidel P. Purisima.

[1976V360E] HON. RAMON D. BAGATSING, as Mayor of the City of Manila; ROMAN G. GARGANTIEL, as Secretary to the Mayor; THE MARKET ADMINISTRATOR; and THE MUNICIPAL BOARD OF MANILA, petitioners, vs. HON. PEDRO A. RAMIREZ, in his capacity as Presiding Judge of the Court

1976 Dec 17
En Banc
G.R. No. L-41631

D E C I S I O N

MARTIN, J:

The chief question to be decided in this case is what law shall govern the publication of a tax ordinance enacted by the Municipal Board of Manila, the Revised City Charter (R.A. 409, as amended), which requires publication of the ordinance before its enactment and after its approval, or the Local Tax Code (P.D. No. 231), which only demands publication after approval.

On June 12, 1974, the Municipal Board of Manila enacted Ordinance No. 7522, “AN ORDINANCE REGULATING THE OPERATION OF PUBLIC MARKETS AND PRESCRIBING FEES FOR THE RENTALS OF STALLS AND PROVIDING PENALTIES FOR VIOLATION THEREOF AND FOR OTHER PURPOSES.” The petitioner City Mayor, Ramon D. Bagatsing, approved the ordinance on June 15, 1974.

On February 17, 1975, respondent Federation of Manila Market Vendors, Inc. commenced Civil Case 96787 before the Court of First Instance of Manila, presided over by respondent Judge, seeking the declaration of nullity of Ordinance No. 7522 for the reason that (a) the publication requirement under the Revised Charter of the City of Manila has not been complied with; (b) the Market Committee was not given any participation in the enactment of the ordinance, as envisioned by Republic Act 6039; (c) Section 3 (e) of the Anti-Graft and Corrupt Practices Act has been violated; and (d) the ordinance would violate Presidential Decree No. 7 of September 30, 1972 prescribing the collection of fees and charges on livestock and animal products.

Resolving the accompanying prayer for the issuance of a writ of preliminary injunction, respondent Judge issued an order on March 1, 1975, denying the plea for failure of the respondent Federation of Manila Market Vendors, Inc. to exhaust the administrative remedies outlined in the Local Tax Code.

After due hearing on the merits, respondent Judge rendered its decision on August 29, 1975, declaring the nullity of Ordinance No. 7522 of the City of Manila on the primary ground of non-compliance with the requirement of publication under the Revised City Charter. Respondent Judge ruled:

“There is, therefore, no question that the ordinance in question was not published at all in two daily newspapers of general circulation in the City of Manila before its enactment. Neither was it published in the same manner after approval, although it was posted in the legislative hall and in all city public markets and city public libraries. There being no compliance with the mandatory requirement of publication before and after approval, the ordinance in question is invalid and, therefore, null and void.”

Petitioners moved for reconsideration of the adverse decision, stressing that (a) only a post-publication is required by the Local Tax Code; and (b) private respondent failed to exhaust all administrative remedies before instituting an action in court.

On September 26, 1975, respondent Judge denied the motion.  Forthwith, petitioners brought the matter to Us through the present petition for review on certiorari.
We find the petition impressed with merits.

1. The nexus of the present controversy is the apparent conflict between the Revised Charter of the City of Manila and the Local Tax Code on the manner of publishing a tax ordinance enacted by the Municipal Board of Manila. For, while Section 17 of the Revised Charter provides:

“Each proposed ordinance shall be published in two daily newspapers of general circulation in the city, and shall not be discussed or enacted by the Board until after the third day following such publication. . . . Each approved ordinance . . . shall be published in two daily newspapers of general circulation in the city, within ten days after its approval; and shall take effect and be in force on and after the twentieth day following its publication, if no date is fixed in the ordinance.”
Section 43 of the Local Tax Code directs:

“Within ten days after their approval, certified true copies of all provincial, city, municipal and barrio ordinances levying or imposing taxes, fees or other charges shall be published for three consecutive days in a newspaper or publication widely circulated within the jurisdiction of the local government, or posted in the local legislative hall or premises and in two other conspicuous places within the territorial jurisdiction of the local government. In either case, copies of all provincial, city, municipal and barrio ordinances shall be furnished the treasurers of the respective component and mother units of a local government for dissemination.”

In other words, while the Revised Charter of the City of Manila requires publication before the enactment of the ordinance and after the approval thereof in two daily newspapers of general circulation in the city, the Local Tax Code only prescribes for publication after the approval of “ordinances levying or imposing taxes, fees or other charges” either in a newspaper or publication widely circulated within the jurisdiction of the local government or by posting the ordinance in the local legislative hall or premises and in two other conspicuous places within the territorial jurisdiction of the local government. Petitioners’ compliance with the Local Tax Code rather than with the Revised Charter of the City spawned this litigation.

There is no question that the Revised Charter of the City of Manila is a special act since it relates only to the City of Manila, whereas the Local Tax Code is a general law because it applies universally to all local governments. Blackstone defines general law as a universal rule affecting the entire community and special law as one relating to particular persons or things of a class. 1 And the rule commonly said is that a prior special law is not ordinarily repealed by a subsequent general law. The fact that one is special and the other general creates a presumption that the special is to be considered as remaining an exception of the general, one as a general law of the land, the other as the law of a particular case. 2 However, the rule readily yields to a situation where the special statute refers to a subject in general, which the general statute treats in particular. The exactly is the circumstance obtaining in the case at bar. Section 17 of the Revised Charter of the City of Manila speaks of “ordinance” in general, i.e., irrespective of the nature and scope thereof, whereas, Section 43 of the Local Tax Code relates to “ordinances levying or imposing taxes, fees or other charges” in particular. In regard, therefore, to ordinances in general, the Revised Charter of the City of Manila is doubtless dominant, but, that dominant force loses its continuity when it approaches the realm of “ordinances levying or imposing taxes, fees or other charges” in particular. There, the Local Tax Code controls. Here, as always, a general provision must give way to a particular provision. 3 Special provision governs. 4 This is especially true where the law containing the particular provision was enacted later than the one containing the general provision. The City Charter of Manila was promulgated on June 18, 1949 as against the Local Tax Code which was decreed on June 1, 1973. The law-making power cannot be said to have intended the establishment of conflicting and hostile systems upon the same subject, or to leave in force provisions of a prior law by which the new will of the legislating power may be thwarted and overthrown. Such a result would render legislation a useless and idle ceremony, and subject the law to the reproach of uncertainty and unintelligibility. 5

The case of City of Manila v. Teotico 6 is opposite. In that case, Teotico sued the City of Manila for damages arising from the injuries he suffered when he fell inside an uncovered and unlighted catchbasin or manhole on P. Burgos Avenue. The City of Manila denied liability on the basis of the City Charter (R.A. 409) exempting the City of Manila from any liability for damages or injury to persons or property arising from the failure of the city officers to enforce the provisions of the charter or any other law or ordinance, or from negligence of the City Mayor, Municipal Board, or other officers while enforcing or attempting to enforce the provisions of the charter or of any other law or ordinance. Upon the other hand, Article 2189 of the Civil Code makes cities liable for damages for the death of, or injury suffered by any persons by reason of the defective condition of roads, streets, bridges, public buildings, and other public works under their control or supervision. On review, the Court held the Civil Code controlling. It is true that, insofar as its territorial application is concerned, the Revised City Charter is a special law and the subject matter of the two laws, the Revised City Charter establishes a general rule of liability arising from negligence in general, regardless of the object thereof, whereas the Civil Code constitutes a particular prescription for liability due to defective streets in particular. In the same manner, the Revised Charter of the City prescribes a rule for the publication of “ordinance” in general, while the Local Tax Code establishes a rule for the publication of “ordinance levying or imposing taxes fees or other charges in particular.
In fact, there is no rule which prohibits the repeal even by implication of a special or specific act by a general or broad one. 7 A charter provision may be impliedly modified or superseded by a later statute, and where a statute is controlling, it must be read into the charter notwithstanding any particular charter provision. 8 A subsequent general law similarly applicable to all cities prevails over any conflicting charter provision, for the reason that a charter must not be inconsistent with the general laws and public policy of the state. 9 A chartered city is not an independent sovereignty. The state remains supreme in all matters not purely local. Otherwise stated, a charter must yield to the constitution and general laws of the state, it is to have read into it that general law which governs the municipal corporation and which the corporation cannot set aside but to which it must yield. When a city adopts a charter, it in effect adopts as part of its charter general law of such character.  10

2. The principle of exhaustion of administrative remedies is strongly asserted by petitioners as having been violated by private respondent in bringing a direct suit in court. This is because Section 47 of the Local Tax Code provides that any question or issue raised against the legality of any tax ordinance, or portion thereof, shall be referred for opinion to the city fiscal in the case of tax ordinance of a city. The opinion of the city fiscal is appealable to the Secretary of Justice, whose decision shall be final and executory unless contested before a competent court within thirty (30) days. But, the petition below plainly shows that the controversy between the parties is deeply rooted in a pure question of law: whether it is the Revised Charter of the City of Manila or the Local Tax Code that should govern the publication of the tax ordinance. In other words, the dispute is sharply focused on the applicability of the Revised City Charter or the Local Tax Code on the point at issue, and not on the legality of the imposition of the tax. Exhaustion of administrative remedies before resort to judicial bodies is not an absolute rule. It admits of exceptions. Where the question litigated upon is purely a legal one, the rule does not apply.  11 The principle may also be disregarded when it does not provide a plain, speedy and adequate remedy. It may and should be relaxed when its application may cause great and irreparable damage.  12

3. It is maintained by private respondent that the subject ordinance is not a “tax ordinance,” because the imposition of rentals, permit fees, tolls and other fees is not strictly a taxing power but a revenue-raising function, so that the procedure for publication under the Local Tax Code finds no application. The pretense bears its own marks of fallacy. Precisely, the raising of revenues is the principal object of taxation. Under Section 5, Article XI of the New Constitution, “Each local government unit shall have the power to create its own sources of revenue and to levy taxes, subject to such provisions as may be provided by law.”  13 And one of those sources of revenue is what the Local Tax Code points to in particular: “Local governments may collect fees or rentals for the occupancy or use of public markets and premises . . .”  14 They can provide for and regulate market stands, stalls and privileges, and, also, the sale, lease or occupancy thereof. They can license, or permit the use of, lease, sell or otherwise dispose of stands, stalls or marketing privileges.  15

It is a feeble attempt to argue that the ordinance violates Presidential Decree No. 7, dated September 30, 1972, insofar as it affects livestock and animal products, because the said decree prescribes the collection of other fees and charges thereon “with the exception of ante-mortem and post-mortem inspection fees, as well as the delivery, stockyard and slaughter fees as may be authorized by the Secretary of Agriculture and Natural Resources.”  16 Clearly, even the exception clause of the decree itself permits the collection of the proper fees for livestock. And the Local Tax Code (P.D. 231, July 1, 1973) authorizes in its Section 31: “Local governments may collect fees for the slaughter of animals and the use of corrals . . .”

4. The non-participation of the Market Committee in the enactment of Ordinance No. 7522 supposedly in accordance with Republic Act No. 6039, an amendment to the City Charter of Manila, providing that “the market committee shall formulate, recommend and adopt, subject to the ratification of the municipal board, and approval of the mayor, policies and rules or regulation repealing or maneding existing provisions of the market code” does not infect the ordinance with any germ of invalidity.  17 The function of the committee is purely recommendatory as the underscored phrase suggests, its recommendation is without binding effect on the Municipal Board and the City Mayor. Its prior acquiescence of an intended or proposed city ordinance is not a condition sine qua non before the Municipal Board could enact such ordinance. The native power of the Municipal Board to legislate remains undisturbed even in the slightest degree. It can move in its own initiative and the Market Committee cannot demur. At most, the Market Committee may serve as a legislative aide of the Municipal Board in the enactment of city ordinances affecting the city markets or, in plain words, in the gathering of the necessary data, studies and the collection of consensus for the proposal of ordinances regarding city markets. Much less could it be said that Republic Act 6039 intended to delegate to the Market Committee the adoption of regulatory measures for the operation and administration of the city markets. Potestas delegare non delegare potest.

5. Private respondent bewails that the market stall fees imposed in the disputed ordinance are diverted to the exclusive private use of the Asiatic Integrated Corporation since the collection of said fees had been let by the City of Manila to the said corporation in a “Management and Operating Contract.” The assumption is of course saddled on erroneous premise. The fees collected do not go direct to the private coffers of the corporation. Ordinance No. 7522 was not made for the corporation but for the purpose of raising revenues for the city. That is the object it serves. The entrusting of the collection of the fees does not destroy the public purpose of the ordinance. So long as the purpose is public, it does not matter whether the agency through which the money is dispensed is public or private. The right to tax depends upon the ultimate use, purpose and object for which the fund is raised. It is not dependent on the nature or character of the person or corporation whose intermediate agency is to be used in applying it. The people may be taxed for a public purpose, although it be under the direction of an individual or private corporation.  18

Nor can the ordinance be stricken down as violative of Section 3(e) of the Anti-Graft and Corrupt Practices Act because the increased rates of market stall fees as levied by the ordinance will necessarily inure to the unwarranted benefit and advantage of the corporation.  19 We are concerned only with the issue whether the ordinance in question is intra vires. Once determined in the affirmative, the measure may not be invalidated because of consequences that may arise from its enforcement.  20

ACCORDINGLY, the decision of the court below is hereby reversed and set aside. Ordinance No. 7522 of the City of Manila, dated June 15, 1975, is hereby held to have been validly enacted. No. costs.

SO ORDERED.

Castro, C.J., Barredo, Makasiar, Antonio, Muñoz Palma, Aquino and Concepcion, Jr., JJ., concur.
Fernando, J., concurs but qualifies his assent as to an ordinance intra vires not being open to question “because of consequences that may arise from its enforcement.”
Teehankee, J., reserves his vote.

Footnotes

1. Cooley, The Law of Taxation, Vol. 2, 4th ed.
2. Butuan Sawmill, Inc. vs. City of Butuan, L-21516, April 29, 1966, 16 SCRA 758, citing State v. Stoll, 17 Wall. 425.
3. Lichauco & Co. v. Apostol, 44 Phil. 145 (1922).
4. Crawford, Construction of Statutes, 265, citing U.S. v. Jackson, 143 Fed. 783.
5. See Separate Opinion of Justice Johns in Lichauco, fn. 3, citing Lewis’ Sutherland Statutory Construction, at 161.
6. L-23052, January 29, 1968, 22 SCRA 270.
7. See 73 Am Jur 2d 521.
8. McQuillin, Municipal Corporation, Vol. 6, 3rd ed., 223.
9. See Bowyer v. Camden, 11 Atl. 137.
10. McQuillin, Municipal Corporation, Vol. 6, 3rd ed., 229-230.
11. Tapales v. President and Board of Regents of the U.P., L-17523, March 30, 1963, 7 SCRA 553; C.N. Hodges v. Municipal Board of the City of Iloilo, L-18276, January 12, 1967, 19 SCRA 32-33; Aguilar v. Valencia, L-30396, July 30, 1971, 40 SCRA 214; Mendoza v. SSC, L-29189, April 11, 1972, 44 SCRA 380.
12. Cipriano v. Marcelino, L-27793, February 28, 1972, 43 SCRA 291; Del Mar v. PVA, L-27299, June 27, 1973, 51 SCRA 346, citing cases.
13. See City of Bacolod v. Enriquez, L-27408, July 25, 1975, Second Division, per Fernando, J., 65 SCRA 384-85.
14. Article 5, Section 30, Chapter II.
15. McQuillin, Municipal Corporations, Vol. 7, 3rd ed., 275.
16. P.D. 7 was amended by P.D. 45 on November 10, 1972, so as to allow local governments to charge the ordinary fee for the issuance of certificate of ownership and one peso for the issuance of transfer certificate for livestock.
17. The market committee is composed of the market administrator as chairman, and a representative of each of the city treasurer, the municipal board, the Chamber of Filipino Retailers, Inc. and the Manila Market Vendors Association Inc. as members.
18. Cooley, The Law of Taxation, Vol. 1, 394-95.
19. Section 3 (e); causing any undue injury to any party, including the government, or giving any private party any unwarranted benefits, advantage or preference in the discharge of his official administrative or judicial functions through manifest partiality evident bad faith or gross inexcusable negligence. . . .”
20. Willoughby, The Constitutional Law of the United States, 668 et seq.