G.R. No. 110120 March 16, 1994LAGUNA LAKE DEVELOPMENT AUTHORITY,petitioner,vs.COURT OF APPEALS, HON. MANUEL JN. SERAPIO, Presiding Judge RTC, Branch 127, Caloocan City, HON. MACARIO A. ASISTIO, JR., City Mayor of Caloocan and/or THE CITY GOVERNMENT OF CALOOCAN, respondents.Alberto N. Hidalgo and Ma. Teresa T. Oledan for petitioner.The City Legal Officer & Chief, Law Department for Mayor Macario A. Asistio, Jr. and the City Government of Caloocan.ROMERO,J.:The clash between the responsibility of the City Government of Caloocan to dispose off the 350 tons of garbage it collects daily and the growing concern and sensitivity to a pollution-free environment of the residents of Barangay Camarin, Tala Estate, Caloocan City where these tons of garbage are dumped everyday is the hub of this controversy elevated by the protagonists to the Laguna Lake Development Authority (LLDA) for adjudication.

The instant case stemmed from an earlier petition filed with this Court by Laguna Lake Development Authority (LLDA for short) docketed as G.R.No. 107542 against the City Government of Caloocan, et al. In the Resolution of November 10, 1992, this Court referred G.R. No. 107542 to the Court of Appeals for appropriate disposition. Docketed therein as CA-G.R. SPNo. 29449, the Court of Appeals, in a decision1promulgated on January 29, 1993 ruled that the LLDA has no power and authority to issue a cease and desist order enjoining the dumping of garbage in Barangay Camarin, Tala Estate, Caloocan City. The LLDA now seeks, in this petition, a review of the decision of the Court of Appeals.

The facts, as disclosed in the records, are undisputed.

On March 8, 1991, the Task Force Camarin Dumpsite of Our Lady of Lourdes Parish, Barangay Camarin, Caloocan City, filed a letter-complaint2with the Laguna Lake Development Authority seeking to stop the operation of the 8.6-hectare open garbage dumpsite in Tala Estate, Barangay Camarin, Caloocan City due to its harmful effects on the health of the residents and the possibility of pollution of the water content of the surrounding area.

On November 15, 1991, the LLDA conducted an on-site investigation, monitoring and test sampling of the leachate3that seeps from said dumpsite to the nearby creek which is a tributary of the Marilao River. The LLDA Legal and Technical personnel found that the City Government of Caloocan was maintaining an open dumpsite at the Camarin area without first securing an Environmental Compliance Certificate (ECC) from the Environmental Management Bureau (EMB) of the Department of Environment and Natural Resources, as required under Presidential Decree No. 1586,4and clearance from LLDA as required under Republic Act No. 4850,5as amended by Presidential Decree No. 813 and Executive Order No. 927, series of 1983.6

After a public hearing conducted on December 4, 1991, the LLDA, acting on the complaint of Task Force Camarin Dumpsite, found that the water collected from the leachate and the receiving streams could considerably affect the quality, in turn, of the receiving waters since it indicates the presence of bacteria, other than coliform, which may have contaminated the sample during collection or handling.7On December 5, 1991, the LLDA issued a Cease and Desist Order8ordering the City Government of Caloocan, Metropolitan Manila Authority, their contractors, and other entities, to completely halt, stop and desist from dumping any form or kind of garbage and other waste matter at the Camarin dumpsite.

The dumping operation was forthwith stopped by the City Government of Caloocan. However, sometime in August 1992 the dumping operation was resumed after a meeting held in July 1992 among the City Government of Caloocan, the representatives of Task Force Camarin Dumpsite and LLDA at the Office of Environmental Management Bureau Director Rodrigo U. Fuentes failed to settle the problem.

After an investigation by its team of legal and technical personnel on August 14, 1992, the LLDA issued another order reiterating the December 5, 1991, order and issued an Alias Cease and Desist Order enjoining the City Government of Caloocan from continuing its dumping operations at the Camarin area. On September 25, 1992, the LLDA, with the assistance of the Philippine National Police, enforced its Alias Cease and Desist Order by prohibiting the entry of all garbage dump trucks into the Tala Estate, Camarin area being utilized as a dumpsite.

Pending resolution of its motion for reconsideration earlier filed on September 17, 1992 with the LLDA, the City Government of Caloocan filed with the Regional Trial Court of Caloocan City an action for the declaration of nullity of the cease and desist order with prayer for the issuance of writ of injunction, docketed as Civil Case No. C-15598. In its complaint, the City Government of Caloocan sought to be declared as the sole authority empowered to promote the health and safety and enhance the right of the people in Caloocan City to a balanced ecology within its territorial jurisdiction.9

On September 25, 1992, the Executive Judge of the Regional Trial Court of Caloocan City issued a temporary restraining order enjoining the LLDA from enforcing its cease and desist order. Subsequently, the case was raffled to the Regional Trial Court, Branch 126 of Caloocan which, at the time, was presided over by Judge Manuel Jn. Serapio of the Regional Trial Court, Branch 127, the pairing judge of the recently-retired presiding judge.The LLDA, for its part, filed on October 2, 1992 a motion to dismiss on the ground, among others, that under Republic Act No. 3931, as amended by Presidential Decree No. 984, otherwise known as the Pollution Control Law, the cease and desist order issued by it which is the subject matter of the complaint is reviewable both upon the law and the facts of the case by the Court of Appeals and not by the Regional Trial Court.10

On October 12, 1992 Judge Manuel Jn. Serapio issued an order consolidating Civil Case No. C-15598 with Civil Case No. C-15580, an earlier case filed by the Task Force Camarin Dumpsite entitled "Fr. John Moran, et al. vs. Hon. Macario Asistio." The LLDA, however, maintained during the trial that the foregoing cases, being independent of each other, should have been treated separately.

On October 16, 1992, Judge Manuel Jn. Serapio, after hearing the motion to dismiss, issued in the consolidated cases an order11denying LLDA's motion to dismiss and granting the issuance of a writ of preliminary injunction enjoining the LLDA, its agent and all persons acting for and on its behalf, from enforcing or implementing its cease and desist order which prevents plaintiff City of Caloocan from dumping garbage at the Camarin dumpsite during the pendency of this case and/or until further orders of the court.

On November 5, 1992, the LLDA filed a petition forcertiorari, prohibition and injunction with prayer for restraining order with the Supreme Court, docketed as G.R. No. 107542, seeking to nullify the aforesaid order dated October 16, 1992 issued by the Regional Trial Court, Branch 127 of Caloocan City denying its motion to dismiss.

The Court, acting on the petition, issued a Resolution12on November 10, 1992 referring the case to the Court of Appeals for proper disposition and at the same time, without giving due course to the petition, required the respondents to comment on the petition and file the same with the Court of Appeals within ten (10) days from notice. In the meantime, the Court issued a temporary restraining order, effective immediately and continuing until further orders from it, ordering the respondents: (1) Judge Manuel Jn. Serapio, Presiding Judge, Regional Trial Court, Branch 127, Caloocan City to cease and desist from exercising jurisdiction over the case for declaration of nullity of the cease and desist order issued by the Laguna Lake Development Authority (LLDA); and (2) City Mayor of Caloocan and/or the City Government of Caloocan to cease and desist from dumping its garbage at the Tala Estate, Barangay Camarin, Caloocan City.

Respondents City Government of Caloocan and Mayor Macario A. Asistio, Jr. filed on November 12, 1992 a motion for reconsideration and/or to quash/recall the temporary restraining order and an urgent motion for reconsideration alleging that ". . . in view of the calamitous situation that would arise if the respondent city government fails to collect 350 tons of garbage daily for lack of dumpsite (i)t is therefore, imperative that the issue be resolved with dispatch or with sufficient leeway to allow the respondents to find alternative solutions to this garbage problem."

On November 17, 1992, the Court issued a Resolution13directing the Court of Appeals to immediately set the case for hearing for the purpose of determining whether or not the temporary restraining order issued by the Court should be lifted and what conditions, if any, may be required if it is to be so lifted or whether the restraining order should be maintained or converted into a preliminary injunction.

The Court of Appeals set the case for hearing on November 27, 1992, at 10:00 in the morning at the Hearing Room, 3rd Floor, New Building, Court of Appeals.14After the oral argument, a conference was set on December 8, 1992 at 10:00 o'clock in the morning where the Mayor of Caloocan City, the General Manager of LLDA, the Secretary of DENR or his duly authorized representative and the Secretary of DILG or his duly authorized representative were required to appear.

It was agreed at the conference that the LLDA had until December 15, 1992 to finish its study and review of respondent's technical plan with respect to the dumping of its garbage and in the event of a rejection of respondent's technical plan or a failure of settlement, the parties will submit within 10 days from notice their respective memoranda on the merits of the case, after which the petition shall be deemed submitted for resolution.15Notwithstanding such efforts, the parties failed to settle the dispute.

On April 30, 1993, the Court of Appeals promulgated its decision holding that: (1) the Regional Trial Court has no jurisdiction on appeal to try, hear and decide the action for annulment of LLDA's cease and desist order, including the issuance of a temporary restraining order and preliminary injunction in relation thereto, since appeal therefrom is within the exclusive and appellate jurisdiction of the Court of Appeals under Section 9, par. (3), of Batas Pambansa Blg. 129; and (2) the Laguna Lake Development Authority has no power and authority to issue a cease and desist order under its enabling law, Republic Act No. 4850, as amended by P.D. No. 813 and Executive OrderNo. 927, series of 1983.

The Court of Appeals thus dismissed Civil Case No. 15598 and the preliminary injunction issued in the said case was set aside; the cease and desist order of LLDA was likewise set aside and the temporary restraining order enjoining the City Mayor of Caloocan and/or the City Government of Caloocan to cease and desist from dumping its garbage at the Tala Estate, Barangay Camarin, Caloocan City was lifted, subject, however, to the condition that any future dumping of garbage in said area, shall be in conformity with the procedure and protective works contained in the proposal attached to the records of this case and found on pages 152-160 of theRollo, which was thereby adopted by reference and made an integral part of the decision, until the corresponding restraining and/or injunctive relief is granted by the proper Court upon LLDA's institution of the necessary legal proceedings.

Hence, the Laguna Lake Development Authority filed the instant petition for review oncertiorari, now docketed as G.R. No. 110120, with prayer that the temporary restraining order lifted by the Court of Appeals be re-issued until after final determination by this Court of the issue on the proper interpretation of the powers and authority of the LLDA under its enabling law.

On July, 19, 1993, the Court issued a temporary restraining order16enjoining the City Mayor of Caloocan and/or the City Government of Caloocan to cease and desist from dumping its garbage at the Tala Estate, Barangay Camarin, Caloocan City, effective as of this date and containing until otherwise ordered by the Court.

It is significant to note that while both parties in this case agree on the need to protect the environment and to maintain the ecological balance of the surrounding areas of the Camarin open dumpsite, the question as to which agency can lawfully exercise jurisdiction over the matter remains highly open to question.

The City Government of Caloocan claims that it is within its power, as a local government unit, pursuant to the general welfare provision of the Local Government Code,17to determine the effects of the operation of the dumpsite on the ecological balance and to see that such balance is maintained. On the basis of said contention, it questioned, from the inception of the dispute before the Regional Trial Court of Caloocan City, the power and authority of the LLDA to issue a cease and desist order enjoining the dumping of garbage in the Barangay Camarin over which the City Government of Caloocan has territorial jurisdiction.

The Court of Appeals sustained the position of the City of Caloocan on the theory that Section 7 of Presidential Decree No. 984, otherwise known as the Pollution Control law, authorizing the defunct National Pollution Control Commission to issue anex-partecease and desist order was not incorporated in Presidential Decree No. 813 nor in Executive Order No. 927, series of1983. The Court of Appeals ruled that under Section 4, par. (d), of Republic Act No. 4850, as amended, the LLDA is instead required "to institute the necessary legal proceeding against any person who shall commence to implement or continue implementation of any project, plan or program within the Laguna de Bay region without previous clearance from the Authority."

The LLDA now assails, in this partition for review, the abovementioned ruling of the Court of Appeals, contending that, as an administrative agency which was granted regulatory and adjudicatory powers and functions by Republic Act No. 4850 and its amendatory laws, Presidential Decree No. 813 and Executive Order No. 927, series of 1983, it is invested with the power and authority to issue a cease and desist order pursuant to Section 4 par. (c), (d), (e), (f) and (g) of Executive Order No. 927 series of 1983 which provides, thus:Sec. 4. Additional Powers and Functions. The authority shall have the following powers and functions:xxx xxx xxx(c) Issue orders or decisions to compel compliance with the provisions of this Executive Order and its implementing rules and regulations only after proper notice and hearing.(d) Make, alter or modify orders requiring the discontinuance of pollution specifying the conditions and the time within which such discontinuance must be accomplished.(e) Issue, renew, or deny permits, under such conditions as it may determine to be reasonable, for the prevention and abatement of pollution, for the discharge of sewage, industrial waste, or for the installation or operation of sewage works and industrial disposal system or parts thereof.(f) After due notice and hearing, the Authority may also revoke, suspend or modify any permit issued under this Order whenever the same is necessary to prevent or abate pollution.(g) Deputize in writing or request assistance of appropriate government agencies or instrumentalities for the purpose of enforcing this Executive Order and its implementing rules and regulations and the orders and decisions of the Authority.The LLDA claims that the appellate court deliberately suppressed and totally disregarded the above provisions of Executive Order No. 927, series of 1983, which granted administrative quasi-judicial functions to LLDA on pollution abatement cases.

In light of the relevant environmental protection laws cited which are applicable in this case, and the corresponding overlapping jurisdiction of government agencies implementing these laws, the resolution of the issue of whether or not the LLDA has the authority and power to issue an order which, in its nature and effect was injunctive, necessarily requires a determination of the threshold question: Does the Laguna Lake Development Authority, under its Charter and its amendatory laws, have the authority to entertain the complaint against the dumping of garbage in the open dumpsite in Barangay Camarin authorized by the City Government of Caloocan which is allegedly endangering the health, safety, and welfare of the residents therein and the sanitation and quality of the water in the area brought about by exposure to pollution caused by such open garbage dumpsite?

The matter of determining whether there is such pollution of the environment that requires control, if not prohibition, of the operation of a business establishment is essentially addressed to the Environmental Management Bureau (EMB) of the DENR which, by virtue of Section 16 of Executive Order No. 192, series of 1987,18has assumed the powers and functions of the defunct National Pollution Control Commission created under Republic Act No. 3931. Under said Executive Order, a Pollution Adjudication Board (PAB) under the Office of the DENR Secretary now assumes the powers and functions of the National Pollution Control Commission with respect to adjudication of pollution cases.19

As a general rule, the adjudication of pollution cases generally pertains to the Pollution Adjudication Board (PAB), except in cases where the special law provides for another forum. It must be recognized in this regard that the LLDA, as a specialized administrative agency, is specifically mandated under Republic Act No. 4850 and its amendatory laws to carry out and make effective the declared national policy20of promoting and accelerating the development and balanced growth of the Laguna Lake area and the surrounding provinces of Rizal and Laguna and the cities of San Pablo, Manila, Pasay, Quezon and Caloocan21with due regard and adequate provisions for environmental management and control, preservation of the quality of human life and ecological systems, and the prevention of undue ecological disturbances, deterioration and pollution. Under such a broad grant and power and authority, the LLDA, by virtue of its special charter, obviously has the responsibility to protect the inhabitants of the Laguna Lake region from the deleterious effects of pollutants emanating from the discharge of wastes from the surrounding areas. In carrying out the aforementioned declared policy, the LLDA is mandated, among others, to pass upon and approve or disapprove all plans, programs, and projects proposed by local government offices/agencies within the region, public corporations, and private persons or enterprises where such plans, programs and/or projects are related to those of the LLDA for the development of the region.22

In the instant case, when the complainant Task Force Camarin Dumpsite of Our Lady of Lourdes Parish, Barangay Camarin, Caloocan City, filed its letter-complaint before the LLDA, the latter's jurisdiction under its charter was validly invoked by complainant on the basis of its allegation that the open dumpsite project of the City Government of Caloocan in Barangay Camarin was undertaken without a clearance from the LLDA, as required under Section 4, par. (d), of Republic Act. No. 4850, as amended by P.D. No. 813 and Executive Order No. 927. While there is also an allegation that the said project was without an Environmental Compliance Certificate from the Environmental Management Bureau (EMB) of the DENR, the primary jurisdiction of the LLDA over this case was recognized by the Environmental Management Bureau of the DENR when the latter acted as intermediary at the meeting among the representatives of the City Government of Caloocan, Task Force Camarin Dumpsite and LLDA sometime in July 1992 to discuss the possibility of re-opening the open dumpsite.

Having thus resolved the threshold question, the inquiry then narrows down to the following issue: Does the LLDA have the power and authority to issue a "cease and desist" order under Republic Act No. 4850 and its amendatory laws, on the basis of the facts presented in this case, enjoining the dumping of garbage in Tala Estate, Barangay Camarin, Caloocan City.

The irresistible answer is in the affirmative.

The cease and desist order issued by the LLDA requiring the City Government of Caloocan to stop dumping its garbage in the Camarin open dumpsite found by the LLDA to have been done in violation of Republic Act No. 4850, as amended, and other relevant environment laws,23cannot be stamped as an unauthorized exercise by the LLDA of injunctive powers. By its express terms, Republic Act No. 4850, as amended by P.D. No. 813 and Executive Order No. 927, series of 1983, authorizes the LLDA to "make, alter or modify order requiring the discontinuance or pollution."24(Emphasis supplied) Section 4, par. (d) explicitly authorizes the LLDA tomakewhatever order may be necessary in the exercise of its jurisdiction.

To be sure, the LLDA was not expressly conferred the power "to issue andex-partecease and desist order" in a language, as suggested by the City Government of Caloocan, similar to the express grant to the defunct National Pollution Control Commission under Section 7 of P.D. No. 984 which, admittedly was not reproduced in P.D. No. 813 and E.O. No. 927, series of 1983. However, it would be a mistake to draw therefrom the conclusion that there is a denial of the power to issue the order in question when the power "tomake, alter or modify orders requiring the discontinuance of pollution" is expressly and clearly bestowed upon the LLDA by Executive Order No. 927, series of 1983.

Assumingarguendothat the authority to issue a "cease and desist order" were not expressly conferred by law, there is jurisprudence enough to the effect that the rule granting such authority need not necessarily be express.25While it is a fundamental rule that an administrative agency has only such powers as are expressly granted to it by law, it is likewise a settled rule that an administrative agency has also such powers as are necessarily implied in the exercise of its express powers.26In the exercise, therefore, of its express powers under its charter as a regulatory and quasi-judicial body with respect to pollution cases in the Laguna Lake region, the authority of the LLDA to issue a "cease and desist order" is, perforce, implied. Otherwise, it may well be reduced to a "toothless" paper agency. In this connection, it must be noted that inPollution Adjudication Board v.Court of Appeals, et al.,27the Court ruled that the Pollution Adjudication Board (PAB) has the power to issue anex-partecease and desist order when there isprima facieevidence of an establishment exceeding the allowable standards set by the anti-pollution laws of the country. Theponente, Associate Justice Florentino P. Feliciano, declared:Ex partecease and desist orders are permitted by law and regulations in situations like that here presented precisely because stopping the continuous discharge of pollutive and untreated effluents into the rivers and other inland waters of the Philippines cannot be made to wait until protracted litigation over the ultimate correctness or propriety of such orders has run its full course, including multiple and sequential appeals such as those which Solar has taken, which of course may take several years. The relevant pollution control statute and implementing regulations were enacted and promulgated in the exercise of that pervasive, sovereign power to protect the safety, health, and general welfare and comfort of the public, as well as the protection of plant and animal life, commonly designated as the police power. It is a constitutional commonplace that the ordinary requirements of procedural due process yield to the necessities of protecting vital public interests like those here involved, through the exercise of police power. . . .The immediate response to the demands of "the necessities of protecting vital public interests" gives vitality to the statement on ecology embodied in the Declaration of Principles and State Policies or the 1987 Constitution. Article II, Section 16 which provides:The State shall protect and advance the right of the people to a balanced and healthful ecology in accord with the rhythm and harmony of nature.As a constitutionally guaranteed right of every person, it carries the correlative duty of non-impairment. This is but in consonance with the declared policy of the state "to protect and promote the right to health of the people and instill health consciousness among them."28It is to be borne in mind that the Philippines is party to the Universal Declaration of Human Rights and the Alma Conference Declaration of 1978 which recognize health as a fundamental human right.29The issuance, therefore, of the cease and desist order by the LLDA, as a practical matter of procedure under the circumstances of the case, is a proper exercise of its power and authority under its charter and its amendatory laws. Had the cease and desist order issued by the LLDA been complied with by the City Government of Caloocan as it did in the first instance, no further legal steps would have been necessary.

The charter of LLDA, Republic Act No. 4850, as amended, instead of conferring upon the LLDA the means of directly enforcing such orders, has provided under its Section 4 (d) the power to institute "necessary legal proceeding against any person who shall commence to implement or continue implementation of any project, plan or program within the Laguna de Bay region without previous clearance from the LLDA."

Clearly, said provision was designed to invest the LLDA with sufficiently broad powers in the regulation of all projects initiated in the Laguna Lake region, whether by the government or the private sector, insofar as the implementation of these projects is concerned. It was meant to deal with cases which might possibly arise where decisions or orders issued pursuant to the exercise of such broad powers may not be obeyed, resulting in the thwarting of its laudabe objective. To meet such contingencies, then the writs ofmandamusand injunction which are beyond the power of the LLDA to issue, may be sought from the proper courts.

Insofar as the implementation of relevant anti-pollution laws in the Laguna Lake region and its surrounding provinces, cities and towns are concerned, the Court will not dwell further on the related issues raised which are more appropriately addressed to an administrative agency with the special knowledge and expertise of the LLDA.

WHEREFORE, the petition is GRANTED. The temporary restraining order issued by the Court on July 19, 1993 enjoining the City Mayor of Caloocan and/or the City Government of Caloocan from dumping their garbage at the Tala Estate, Barangay Camarin, Caloocan City is hereby made permanent.SO ORDERED.Feliciano, Bidin, Melo and Vitug, JJ., concur.

DIGEST

Laguna Lake Development Authority v CA (Environmental Law)Laguna Lake Development Authority v CA GR No. 110120March 16, 1994FACTS:The LLDA Legal and Technical personnel found that the City Government of Caloocan was maintaining an open dumpsite at the Camarin area without first securing an Environmental Compliance Certificate (ECC) from the Environmental Management Bureau (EMB) of the Department of Environment and Natural Resources, as required under Presidential Decree N o. 1586, and clearance from LLDA as required under Republic Act N o. 4850 and issued a CEASE and DESIST ORDER (CDO) for the City Government of Caloocan to stop the use of the dumpsite.ISSUES:1. Does the LLDA and its amendatory laws, have the authority to entertain the complaint against the dumping of garbage in the open dumpsite in Barangay Camarin authorized by the City Government of Caloocan? 2. Does the LLDA have the power and authority to issue a "cease and desist" order?APPLICABLE LAWS: Executive Order N o. 927 series of 1983 which provides, thus: Sec. 4. Additional Powers and Functions. The authority shall have the following powers and functions: (d) Make, alter or modify orders requiring the discontinuance of pollution specifying the conditions and the time within which such discontinuance must be accomplished As a general rule, the adjudication of pollution cases generally pertains to the Pollution Adjudication Board (PAB), except in cases w here the special law provides for another forumRULING:1. YES, LLDA has authority. It must be recognized in this regard that the LLDA, as a specialized administrative agency, is specifically mandated under Republic Act No. 4850 and its amendatory law s to carry out and make effective the declared national policy of promoting and accelerating the development and balanced growth of the Laguna Lake area and the surrounding provinces of Rizal and Laguna and the cities of San Pablo, Manila, Pasay, Quezon and Caloocan with due regard and adequate provisions for environmental management and control, preservation of the quality of human life and ecological systems, and the prevention of undue ecological disturbances, deterioration and pollution. Under such a broad grant and power and authority, the LLDA, by virtue of its special charter, obviously has the responsibility to protect the inhabitants of the Laguna Lake region from the deleterious effects of pollutants emanating from the discharge of wastes from the surrounding areas. 2. YES, pursuant to EO 927 Section 4. While it is a fundamental rule that an administrative agency has only such powers as are expressly granted to it by law , it is likewise a settled rule that an administrative agency has also such powers as are necessarily implied in the exercise of its ex press powers. In the exercise, therefore, of its express powers under its charter as a regulatory and quasi-judicial body with respect to pollution cases in the Laguna Lake region, the authority of the LLDA to issue a "cease and desist order" is, perforce, implied. NOTE: HOWEVER, writs of mandamus and injunction are beyond the power of the LLDA to issue.

PUBLIC CORPORATIONINTRODUCTIONPoliticalLawbranchofpubliclawwhichdealswiththe organization and operations of the governmental organs of theState and defines the relations of the State with the inhabitants ofits territory. DIVISIONS OF POLITICALLAW:(a) ConstitutionalLawbranch ofpubliclawwhich deals with the maintenance of the proper balance between authority as represented by three inherent powers of the State and liberty as guaranteed by the Bill of Rights.(b) Administrative law branch of public law which fixes theorganizationofgovernment,determines competenceofadministrativeauthoritieswho executethelawand indicates totheindividual remedies for violation of his rights.(c) Law on Municipal Corporations(d) LawofPublic Officers(e) Election Laws(f) Public International Law GENERAL PRINCIPLESCORPORATION Defined: An artificial being created by operation oflaw having the right of succession and powers, attributes and propertiesexpresslyauthorizedbylaworincidenttoits existence. CLASSIFICATION OF CORPORATIONS:(i)Public organized for the government of a portion of the State;(ii)Private formed forsomeprivate purpose, benefit, aim or endiii)Quasi-publicprivatecorporationthat renders public service or supplies public wants. NOTE: Criterion to determine whether a corporation is public The relationship of the corporation to the Sate, that is, if created by the State as its own agency to help the State in carrying out its governmental functions then it is public, otherwise, it is private. CLASSES OFPUBLIC CORPORATIONS:(i)Quasi-corporation created by the Statefor a narrow/limited purpose (PCSO, etc.);(ii)Municipal Corporations body politic and corporateconstituted bytheincorporation of the inhabitants for the purpose of local government.ELEMENTS OFMUNICIPAL CORPORATIONS:1.Legal creation or incorporation there must be a law creating/authorizing the creation or incorporation ofa municipal corporation];2.Corporate name name by which the corporationisknown;3.Inhabitants people residing in the territory of thecorporation;4.Territory land mass where the inhabitants reside together with internal and external waters and airspace above the land and waters.

DUAL NATURE & FUNCTIONS OF MUNICIPAL CORPORATIONS:Every local government unit created/organized under the Local Government Code is a BODY POLITIC and CORPORATE endowed with powers to be exercised by it in conformity with law. As such it shall exercise powers as a political subdivision of the National Governmentandasacorporateentityrepresentingthe inhabitants of the territory (Section 15, RA7160). Accordingly, it has dual functions (i)publicorgovernmental actsas an agentofthe State for the government of the territory and the inhabitants; and(ii)private or proprietary actsasanagent ofthe community in the administration of local affairs, as such, acts as a separate entity for its own purposes and not as a subdivision of the State. BASIC PRINCIPLESSec. 1 Act shall be known as the Local Government Code of 1991.Under the 1987 Constitution, declared policy: The State shall ensure the autonomy of localgovernments (Art. II, Sec. 25)To highlight this policy, note, an entire Article (X) with fourteen sections is devoted to Local Governments. Section (3)thereofmandates: Congress SHALL enactalocal government code(a)toprovideamoreresponsiveand accountablelocal governmentstructureinitiatedthroughasystemofDECENTRALIZATION with effective mechanisms of recall, initiative and referendum, (a) allocate among different local government units their powers, responsibilities and resources, (c) provide for qualifications, elections appointment and removal, term, salaries, powers and function and duties of local officials and (d) other matters relating to the organization and operation of local units.Autonomyiseitherdecentralizationofadministration(deconcentration) or decentralization of power (devolution).Decentralization ofadministrationdelegation bythe central government of administrative powers to localsubdivisionsin order to broaden the base of governmental power making such localgovernmentsmore responsiveandaccountableand insuring their fullest development as self-reliant communities and effective partners inthe pursuit ofnationaldevelopment and progress (declared policy of LGC); relieves central government ofthe burden of managing local affairs, enabling it to concentrate onnationalconcerns;thePresidentexercisesgeneral supervision over them but only to ensure that local affairs are administered according to law (Presidents mandate to ensure faithful execution of the laws) but he has no control over their acts (he cannot substitute their judgment withhis own).Decentralization of power abdication of political power in favor of local government units declared to be autonomous; the autonomous governmentisfreetochartitsowndestinyand shapeitsfuturewith minimum interventionfromcentral authorities; amounttoself-immolationsincetheautonomous government becomes accountable not to the centralauthority but to its constituency.NOTE:Constitutional guarantee of Local Autonomyrefersto ADMINISTRATIVEAUTONOMY oflocal government units (or decentralization of government authority).Case: PROVINCE OFBATANGAS vs.ALBERTO G.ROMULO, G.R. No.152774, 5/27/2004.FACTS:ProvinceofBatangasfiledapetitionforcertiorarito declare unconstitutional and void certain provisos contained in the General Appropriations Acts (GAA) of 1999, 2000 and 2001earmarking for said years five billion pesos (P5,000,000,000.00)of the Internal Revenue Allotment (IRA) for the Local Government Service Equalization Fund (LGSEF) and imposed conditions for the release thereof such as modifying the allocation scheme for such allotment as prescribed under the Local Government Code and securing approval for local projects from the Oversight Committee on Devolution.RULING: In Section 25, Article II of the Constitution, the State has expressly adopted as a policy tha, The State shall ensure the autonomyoflocalgovernments.TheStatepolicyonlocal autonomy is amplified in Section 2 thereof, It is hereby declared the policy of the State that the territorialand political subdivisions of the State shall enjoy genuine and meaningful local autonomy to enable them to attain their fullest development as self-reliant communitiesandmakethemmoreeffectivepartnersinthe attainment of national goals x x x .The assailed provisos in the GAAs of 1999, 2000 and 2001 and the OCD resolutions violate the constitutional precept on local autonomy. Section 6, Article X of the Constitution reads: Sec. 6.

Localgovernmentunits shallhaveajustshare, as determined by law, in the nationaltaxeswhichshallbe automatically released to them. "Automatic" means "involuntary either wholly or to a major extent so that any activity of the will is largely negligible; of a reflex nature; without volition; mechanical; likeorsuggestiveofanautomaton.Being"automatic,"thus, connotes something mechanical,spontaneous and perfunctory. As such, the LGUs are not required to perform any act to receive the "just share" accruing to them from the national coffers. The "justshare"oftheLGUsisincorporatedastheIRAinthe appropriations law orGAA enacted byCongress annually.The entire process involving the LGSEFs distribution and release is constitutionally impermissible. The LGSEF is part of the IRA or just share of the LGUs in the national taxes. Submitting its distribution and release to the vagaries of the implementing rules including the guidelines and mechanisms unilaterally prescribed by theOversight Committee from time totime assanctioned by the challenged laws and OCD resolutions, makes the release not automatic a flagrant violation of the constitutional and statutory mandate that LGUs just share shall be automatically released to them.MeaningofAdministrativeRegionsaremeregroupingofcontiguous provinces for administrative purposes, not for political representation.The division of thecountryintoregionsis intendedtofacilitatenotonlythe administration of local governments which thelaw requires tohave regional offices. Creationofadministrative regionsfor purpose ofexpediting the delivery of servicesis nothing new. The Integrated Reorganization plan of 1972, which was made part of the law of the land by virtue ofPresidentialDecreeNo. 1,established 11regions, later became12.Withdefinite regionalcentersandrequired departmentsandagencies of the Executive Branchofthe National Government to set up field offices therein (DTI VII, DOLEVII, DPWH Regional Office). The functions of the regional offices is tobeestablishedpursuantthereorganizationplanare:(a)implement laws, policies, plans, programs, rules and regulation ofthe departmentoragency intheregionalarea;(2)provide economical, efficient and effective services to the people in thearea; (3) to coordinate with regional offices of other departments, bureaus and agencies in the area; and (3) perform such other functions as may be provided by law.MeaningofAutonomousRegionscreationofautonomous regions in Muslim Mindanao and the Cordilleras, which is unique tothe1987Constitution,contemplatesgrantofpolitical autonomy and not just administrative autonomy to those regions.Thus, Art. X, Section 18 of Constitution mandates for Congress to enact an organic act for the autonomous regions (with assistance andparticipationofconsultativecommissioncomposedofrepresentatives appointed by the President from list of nominees of multisectoral bodies) to provide for an autonomous regional government withabasic structureconsisting ofanexecutive department and a legislative assembly and special courts with personal,familyand propertylawjurisdictionineachofthe autonomous regions.Case: DISOMANGCOP vs. DPWH SECRETARY, G.R. No. 149848,11/25/2004.FACTS: Pursuant to Sec. 15, Art. X of the Constitution (for the creationofautonomous regionsinMuslimMindanao andthe Cordilleras), RA 6734 (An Act Providing for An Organic Act for the AutonomousRegionin MuslimMindanao)wasenacted. Subsequently, the four provinces of Lanao del Sur, Maguindanao, Sulu andTawi-Tawi,voting infavor ofautonomy,becamethe Autonomous Region in Muslim Mindanao (provinces of Basilan, Cotabato,DavaodelSur,LanaodelNorte,Palawan,South Cotabato, Sultan Kudarat, Zamboanga del Norte, and Zamboanga del Sur, and the cities of Cotabato, Dapitan, Dipolog, General Santos, Iligan, Marawi, Pagadian, Puerto Princesa and Zamboanga said no in the plebiscite) (later virtue of RA9054, the provinces of Basilan andMarawiCityjoined). In accordancewith RA6734,EO426 was issued placingthecontroland supervisionofthe officesofthe DPWHwithin the autonomous region in Muslim MindanaoundertheAutonomous Regional Government. Petitioners Arsadi M.Disomangcopand RamirM.Dimalotang(Dimalotang), in their capacity as Officer-in-Charge and District Engineer/Engineer II,respectively,ofthe1stEngineering District of DPWH-ARMM in Lanao del Sur petitioned to nullify Dept. Order119 and RA8999 (creating the Marawi Sub-District Engineering Officeandvestingitwithjurisdictionoverallnational infrastructureprojectsand facilitiesundertheDPWHwithin MarawiCity andLanaodelSur.Petitionerscontendthatthe challengedmeasures violate ARMMsconstitutionalautonomy consideringthatthefunctionsoftheMarawiSub-District Engineering Office havealreadybeen devolved tothe DPWH-ARMM 1st Engineering District in Lanao delSur.RULING: Petition GRANTED. DO119 is violative ofthe provisions ofEO426 (issuedpursuanttoRA6734).The1987 Constitution mandatesregionalautonomytogiveaboldandunequivocal answertothe cryforameaningful, effectiveandforceful autonomy.Autonomy,asanationalpolicy,recognizesthe wholeness of the Philippine society in its ethnolinguistic, cultural and even religious diversities. It strives to free Philippine society of the strain and wastage caused by the assimilationist approach. Policies emanating from the legislature are invariably assimilationistincharacter despite channels being openfor minority representation. Anecessaryprerequisiteof autonomyis decentralization. Decentralizationisadecisionbythe centralgovernment authorizing its subordinates, whether geographically or functionallydefined,to exercise authority in certain areas.It involves decision-making by subnational units. It is typically adelegatedpower,whereinalargergovernmentchoosesto delegate certain authority to more local governments. Federalism implies some measure of decentralization, but unitary systems may also decentralize. Decentralization differs intrinsically from federalism in that the sub-units that have been authorized to act(by delegation) do not possess any claim of right against the central government.Decentralizationcomesintwoformsdeconcentration and devolution. Deconcentration (administrative decentralization)I s administrative in nature; it involves the transfer of functions or the delegation of authority and responsibility from the national office to the regional and local offices. Devolution, on the othe rhand,connotespolitical decentralization,or thetransferofpowers, responsibilities, and resources for the performance ofcertain functionsfromthecentralgovernmenttolocal government units.Byregionalautonomy,theframersintendedittomean "meaningfuland authenticregional autonomy (that is,akind oflocal self-government which allows the people of the region or area the power to determine what is best for their growth and development without undue interference or dictation from the central government). To this end, Section 16, Article X limits the power of the President over autonomous regions. In essence, the provision also curtails the power of Congress over autonomous regions. Consequently, Congress will have to re-examine national laws and make sure that theyreflect the Constitution's adherence to local autonomy. And in case of conflicts, the underlying spirit which should guide its resolution is the Constitution's desire for genuine local autonomy. E.O.426 officiallydevolvedthe powersand functionsofthe DPWH in ARMM to the Autonomous Regional Government (ARG).More importantly, Congress itself through R.A. 9054 transferred and devolved the administrative and fiscal management of public works and funds for public works to the ARG. The aim of the Constitution is to extend to the autonomous peoples, the people of Muslim Mindanao in this case, the right to self-determination a right to choose their own path of development; the right to determine the political, cultural and economic content of their development path within the framework of the sovereignty and territorial integrity of the Philippine Republic. Self-determination refers to the need for a political structure that will respect the autonomous peoples' uniqueness and grant them sufficient room for self-expression andself-construction.With R.A. 8999, however, this freedom is taken away, and the National Government takes control again. The hands, once more, oftheautonomouspeoplesarereinedinandtiedup.The challenged law creates an office withfunctions and powers which, byvirtue ofE.O.426,havebeenpreviouslydevolvedtothe DPWH-ARMM, First Engineering Districtin Lanao delSur.Section 2, LGC- Declaration of Policy- LGU to enjoy genuine and meaningfulautonomytoenablethemtoattaintheir fullest development as self-reliant communities and make them effective partners in attainment of national goals thru decentralization. National agencies and offices to conduct periodic consultations with appropriate lgu, ngo and po, before any project or program is implemented in their jurisdiction.The declaration of policy as stated in Section 2 of LGC reinforces declared State policy (Art. II, Sec. 25 of Constitution) ensuring autonomy to local government units.Case: LINA VS. PANO 364 SCRA 76FACTS: Respondent Tony Calvento was appointed PSCO agent to install and operate a lotto terminal. Mayor of San Pedro Laguna denied his application for a business permit citing an ordinance (KapasyahanBlg.508, taong1995)passedbytheProvincial Board of Laguna, objecting/opposing any form of gambling includinglotto in Laguna. Calvento arguing that KB508 is curtailmentof State powersincein thiscase thenational legislature itself already declared lotto as legal and permitted its operation around the country, filed for declaratory relief before the RTC, to annul KB 508 and compel the the local mayor to issue a business permit for the operation of a lotto outlet. Suit decided in Calventos favor. MR by Respondent denied. Petition with SC.RULING: Game of lotto is a game of chance duly authorized by the national government through an Act of Congress (RA1169), as amended by BP42, the law granting a franchise to the PCSO and allows it to operate lotteries. This statute remains valid today. While lotto is a game of chance, the national government deems it wise and proper to permit it. Hence, the Provincial Board ofLaguna, as a LGU, cannot issue a resolution or an ordinance that wouldseektoprohibitpermits.Whatthenationallegislature allows by law, such as lotto, a provincial board may not disallow by ordinance or resolution. Ours is till a unitary government, not a federal state. Being so, any form ofautonomy granted toLGs willnecessarily belimited andconfinedwithintheextentallowedbythecentral government. Besides, the principle of local autonomy under the1987 Constitution simplymeans decentralization.Itdoes not makelocalgovernmentssovereign withinthestateoran imperium in imperio. Municipalgovernmentsareonlyagentsofthenational government.Localcouncilsexercise onlydelegatedlegislative powersconferreduponthembyCongressasthenational lawmaking body. The delegate cannot be superior to the principal or exercise powers higher than those of the latter. It is heresy to suggest that the LGUs can undo the acts and negate by mere ordinance the mandate of the statute. Section 2(c) requiring consultations should be read together with Section 26, 27, LGC (prior consultation by national agencies with lgus involving projects that may cause pollution, climatic change, depletion of non-renewable resources, loss of crop land, range-land or forest cover and extinction of animal or plant species).Thus, Section 2(c) does not apply to lotto, the latter being neither aprogramnor projectofthe national government, butofa charitableinstitution,thePCSO.Also,theargumentisan afterthought, Mayor denied application for business permit solely on ground of KB508.Section 3, LGC Operative Principles of Decentralization policies and measures on local autonomy tobe guided by these:(a)effectiveallocationamongthedifferentLGUsofthe irrespective powers, functions and responsibilities [is provided for by LGC],(b) establishment in every LGU of an accountable, efficient and dynamic organizational structure and operating mechanism that willmeetpriorityneedsandservicerequirementsofits communities,(c) local officials and employees, subject to civil service law, rules and regulation, to be appointed or removed, according to merit and fitness, by the appropriate appointing authority,(d) vesting of duty, responsibility and accountability in LGUS shall beaccompaniedwithprovision forreasonablyadequate resources to discharge their powers and effectively carry outtheir function they shall have the power to create and broaden their own sources of revenue and the right to a just share in the nationaltaxesandanequitableshareinproceedsofthe utilization and development of the national wealth within their respective areas(e) provinces to component cities and municipalities; cites and municipalities to component barangays to ensure that acts ofcomponentunitsarewithinscopeofprescribepowersand functions (supervisorial powers)(f) LGUs may group themselves, consolidate their efforts, services and resources for purposes commonly beneficial to them thus, MMDA; NOTE:Autonomydenotesstateofindependence(referred previouslytostates)communityautonomy,thatis, local autonomy.IntheLGC,localautonomydoesnotmeantotal independence of LGUS from the central or national government. It onlymeans decentralization of powers from nationaltolocal government.When exercising governmental powers and performing duties, LGUis an agency of the national government.Section 4, LGC Scope of Application scope means areas ofcoverage,thatis,toprovinces,cities,municipalitiesand barangays and other political subdivisions as may be created bylaw andtothe extentherein provided toofficials,officesor agencies of the National Government.Section 5, LGC Rules of Interpretation (a)provision on power of LG shall be liberally interpreted in its favor; in case of doubt, any question shall be resolved in favor of devolution of powers andofthelowerLGU.Anyfairand reasonabledoubtasto existence of power, interpreted in favor of LGU concerned(b) doubt as to any tax ordinance or revenue measure, strictly construed against LGU, liberally in favor of taxpayer (deprivation ofproperty). Taxexemption, incentiverrelief granted anyLGU, construed strictly against person claiming it (loss of income on part of LGU).(c) liberal interpretation of general welfare provisions in order to give more power to LGU in accelerating economic development and upgrading quality of life for the people. Note:Basicpreceptinstatutoryconstructionthatlegislative intent is the controlling factor in the interpretation of statute. Power to declare what the law shall be is a legislative power, power to declare what the law is or has been is judicial. When law isunambiguousandunequivocal,applicationandnot interpretation thereofis IMPERATIVE. When is statute AMBIGIOUS? If capable of being understood by reasonably well-informed persons in either of two or more senses. Power of judicial review can be exercised by courts to invalidate constitutionallyinfirmacts.Ergo, courtsarenotboundby legislative interpretation of their own acts.When is statute AMBIGIOUS? If capable of being understood by reasonably well-informed persons in either of two or more senses. Power of judicial review can be exercised by courts to invalidate constitutionallyinfirm acts.Ergo, courtsarenot boundby legislative interpretation of their own acts. De Facto Municipal Corporations requisites: Validlawauthorizingincorporation;attemptingoodfaithto organize underit;colorablecompliance withlaw, assumptionofcorporate powers. MUNICIPAL CORPORATIONS Elements: (a)legal creation/incorporation theremust bealaw creating/authorizingcreationorincorporationofamunicipal corporation; (b) corporate name- name by which the corporation shall be known; (c) inhabitants people residing in the territory ofthe corporation; and(d) territory land masswhereinhabitants reside together with internal and external waters and airspace above land and waters.Section 6 Authority to Create LGU (created, divided, merged ,abolished or borders substantially altered) either by LAW enacted by Congress in the case of province, city, municipality or any otherpolitical subdivision,orORDINANCEbysangguniang panlalawigan/panglungosdinthe caseofabarangaylocated within itsterritorialjurisdiction,subjecttolimitations prescribed in this Code.Section 7 Creation/Conversion of LGU generally, creation ofLGU orits conversion from oneleveltoanother,subjectto verifiable indicators of viability and projected capacity to provide services: INCOME, POPULATION and LAND AREA, compliance with which to be attested to by the Dept. of Finance, NSO and Land Management Bureau of DENR. Income must be sufficient, based on acceptable standards to provideall essentialgovernment facilitiesand servicesand special functions commensurate with the size of its populations, as expected of the LGUconcerned. Population total number ofinhabitants within theterritorialjurisdiction of the LGU concerned. Land Area must be contiguous, unless it comprises two (2) or more islands or is separated by a LGU independent of the others properlyidentifiedbymetesandboundswithtechnical descriptions and sufficient to provide for such basic services and facilities to meet the requirements of its populace.(READ GRINO VS. COMELEC 213 SCRA 672)Section 8Division/Merger ofexistingLGUs to comply with same requisites for creation under Section 7. No reduction in income, population or land area; no reduction in current income classification.Section 9 Abolition LGU may be abolishedwhen its income, population or land area has been irreversibly reduced to less than the minimum standards prescribed for its creation (as certified by DOF, NSO andLMB); law/ordinanceabolishing anLGU tospecify province, city, municipality or barangay to which the LGU to be abolished will be incorporated or merged.Section 10 Plebiscite requirement pre-condition to creation, abolition, merger, division or substantial alteration of boundaries of LGUs; requires majority of the votes cast in plebiscite called for the purpose in the political unit/s directly affected; plebiscite to be conducted by COMELEC within 120 days from date of effectivity oflaw/ordinanceeffecting suchaction,unless said law/ordinance fixes another date.Section11- Seat of Government- considerations of GEOGRAPHICALCENTRALITY,ACCESSIBILITY, AVAILABILITY OF TRANSPORATION AND COMMUNICATION FACILITIES, DRAINAGE AND SANITATION DEVELOPMENT, ECONOMIC PROGRESS and OTHER RELEVANTCONSIDERATIONS; transfer of seat when conditions and development in LGU concerned has subsequently changed significantly, requires 2/3 vote of members ofsanggunian, after public hearing; transfer site shall not be outside the territorial boundaries o fthe LGU;old site together with improvements thereon may be disposed of by sale or lease or converted to such other use as the sanggunian concerned may deem beneficial to the LGU and its inhabitants.Section12GovernmentCentersProvinces,citiesand municipalities shall endeavor to establish a government center where offices, agencies or branches of the National Government, lgu orgovernment-owned orcontrolled corporations may,as far as practicable, be located. In designating such a center, the lgus concerned shall take into account the existing facilities of the national and local agencies and offices which may serve as the governmentcenterascontemplatedunderthisSection.The National Government, the lgu or gocc shall bear the expenses for the construction ofits buildingsand facilities inthe government center.Section13NameofLGUandPublicPlaces,StreetsandStructures always in consultationwith Philippine Historical Commission; prohibition against naming after livingpersons, change of name not oftener than once every 10 years unless forjustifiable reason; changerequires priorplebiscite; change ofnameinvolvingalgu,public place, street or structure with historical, cultural or ethnic significance can be done only by a UNANIMOUSVOTEofthesanggunianconcernedandin consultation with the PHC.Section 14 Beginning of Corporate Existence When a new LGUis created, its corporate existence shall commence upon election and qualification of its chief executive and majority of members of sanggunian. MEJIA vs.BALOLING81 PHIL 486Sinceacityisapublic corporation or juridical entity, and as such cannot operate or transact business byitself but through agents and officials, itis necessary thatofficials thereof beappointed orelected inorder that it may transactbusiness as such public corporation or city. NOTE:DeFactoMunicipalCorporationsrequisites:Validlaw authorizing incorporation; attempt in good faith to organize under it;colorablecompliancewithlaw,assumptionofcorporate powers. Case: EMMANUEL PELAEZ vs. THE AUDITOR GENERAL, G.R. No. L-23825, 1/24/1965FACTS: President of the Philippines, purporting to act pursuant to Sec. 68 of Revised Administrative Code (presidential authority to definetheboundary,orboundaries,ofanyprovince,sub-province, municipality,[township] municipal districtorother political subdivision, and increase or diminish the territory comprised therein, may divide any province into one or more subprovinces,separateany politicaldivision other thana province, into such portions as may be required, merge any ofsuchsubdivisionsorportionswithanother,nameanynew subdivision so created, and may change the seat of government within any subdivision to such place therein as the public welfare mayrequire), issued several executive orders creating33 municipalities.Petitioner(asVice-Presidentandas taxpayer),instituted a special civil action seeking to enjoin Auditor General frompassinginauditanyexpenditureof publicfundsin implementationof said certainexecutiveordersand/or disbursement by said municipalities.DECISION:PETITIONGRANTED.SinceJanuary1,1960,when Republic Act No. 2370 became effective, barrios may "not be created ortheir boundaries altered northeir names changed "except byAct ofCongress orofthe correspondingprovincial board "upon petition of a majority of the voters in the are as affected"andthe"recommendationofthecouncilofthe municipalityormunicipalitiesin whichtheproposed barriois situated." Thisstatutory denialof thepresidentialauthority to create a new barrio implies a negation of the bigger power to create municipalities, each of which consists of several barrios.Whereas thepower to fixa common boundary, in order toavoid 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 - the authority to create municipal corporations is essentially legislative in nature.

Case: MALABANG vs. BENITO, 27 SCRA 533FACTS: Petitioner Balindong (municipal mayor ofMalabang, LanaodelSur), Respondents(MayorBenitoand councilorsofMunicipality of Balabagan of the same province). Balabagan, (formerly part of Malabang) was created on March 15, 1960, by Executive Order 386 of the then President Carlos P. Garcia, out ofbarrios and sitios of the Malabang.Citing Pelaez ruling (that Republic Act 2370 [Barrio Charter Act, approved January 1, 1960], vested power to create barrios in the provincial board,and Section 68oftheAdministrative Code, in sofarasitgives thePresidentthepowertocreate municipalities, is unconstitutional (a) because it constitutes an undue delegation of legislative power and (b) because it offends against Section 10 (1) of Article VII of the Constitution, which limitsthePresident'spoweroverlocalgovernmentstomere supervision), Petitioner sought to nullify E.O. 386 and restrain respondents from performing their officialfunctions.Respondents argued that Pelaez ruling did not apply because, unlikethemunicipalitiesinvolvedtherein, themunicipalityofBalabaganisatleastadefactocorporation,havingbeen organizedundercolorofastatutebefore this was declared unconstitutional (by Pelaez ruling), its officers having been either electedorappointed,andthe municipality itself having discharged its corporatefunctions for the past five years precedingtheinstitutionof this action.Thatasadefacto corporation,itsexistence cannotbe collaterallyattacked, although it may be inquired into directly in an action for quo warranto at the instance of the State and not of an individual like the petitioner Balindong.DECISION: Petition granted, Executive Order 386 declared void. Generally, the inquiry into the legal existence of a municipality is reserved to the State in a proceeding for quo warranto or other direct proceeding, andthatonlyinafewexceptionsmay a private person exercise this function of government. But the ruled is allowing collateral attacks applies only where the municipal corporation is at least a de facto corporation. For where it is neither a corporation de jure nor de facto, but a nullity, the rule is that its existence may be questioned collaterallyor directly in any action or proceeding by any one whose rights or interests are affectedthereby,includingthecitizensoftheterritory incorporatedunlessthey areestoppedby theirconduct from doing so.A de facto municipal corporation is recognized as such despite the fact that the statute creating it was later invalidated, rests upon the consideration that there was some other valid law giving corporate validity tothe organization. Hence,in thecase atbar, the mere fact that Balabagan was organized at a time when the statute had not been invalidated cannot conceivably make it a de factocorporation,as,independentlyofSection68ofthe Administrative Code, there is no other valid statute to give color of authority to its creation. Thus, Executive Order 386 creating the municipality in question is a nullity pursuant to the ruling in Pelaez ruling. This is not to say, however, that the acts done by the municipality of Balabagan in the exercise of its corporate powers are a nullity because the executive order "is, in legal contemplation,asinoperativeasthoughithadneverbeen passed."Note,theexistenceofExecutiveOrder386 is"an operativefactwhichcannotjustlybeignored."Theactual existence ofastatute,priortosuchadetermination,inan operative fact and may have consequences which cannot justly be ignored. The past cannot always be erased by a new judicial declaration. The effect of the subsequent ruling as to invalidity may have to be considered in various aspects with respect to particularrelations,individualandcorporate,andparticular conduct, private and official.Case: MUN. OF JIMENEZ, vs. HON. VICENTE T. BAZ. JR., G.R. No.105746. 12/2/1996FACTS:In1949,Pres. ElpidioQuirino(pursuanttoSec.68ofRevised Admin Code) issued EO258 creating the Municipality ofSinacaban consisting Petitioners southern portion. In 1988, the Municipalityof SinacabanfiledwiththeProvincialBoardof Misamis OccientalaclaimagainstPetitionerover portions affecting certain barrios based on the technical descriptionin E.O.No. 258. Petitioner conceded that, under EO258 thedisputed areais part of Sinacaban, but nonetheless asserted jurisdiction on the basis of an agreement it had with the Municipality of Sinacaban and approved by provincial board resolution in 1950. The board declared the disputed area to be part of Sinacaban ruling that the previousresolutionapprovingtheagreementbetweenthe municipalities was void because the Board had no power to alter the boundaries of Sinacaban as fixed in E.O. No. 258, that power being vested in Congress pursuant to the Constitution and the LGC of 1983 (B.P. Blg. 337). Before the SC, Petitioner challenges thetrialcourtsdecisionaffirmingthelegalexistenceofSinacaban and ordering the relocation of its boundary for the purposeofdeterminingwhethercertainareasclaimedbyit belonged to it.DECISION: The principal basis for the viewthat Sinacaban was not validly created as a municipal corporationis the Pelaez ruling that the creation of municipal corporations is essentially a legislative matter and therefore the President was without power to create by executive order Sinacaban. The ruling in this case has been reiterated in a number of cases later decided. However, we have since held that where amunicipality created as such by executive order is later impliedly recognized and its acts are accorded legal validity, its creation can no longer be questioned. Sinacaban is at least a de facto municipal corporation in the sense that its legal existencehasbeenrecognizedand acquiescedpubliclyand officially. Sinacaban had been in existence for sixteen years when the Pelaez ruling yet the validity of E.O. No. 258 creating it had never been questioned.TheStateand eventhe Municipality ofJimenezitselfhave recognized Sinacaban's corporate existence entering in 1950 into an agreement with it regarding their common boundary. Also, it has attained de jure status, 442(d) of theLGC, must bedeemed tohavecuredanydefectinthecreationofSinacaban.(Municipalities existing as of the date of the effectivity of this Codeshallcontinuetoexistandoperateassuch.Existing municipal districts organized pursuant to presidential issuances or executive orders and whichhave theirrespective setof elective municipal officials holding office at the time of the effectivity oftheCodeshallhenceforthbeconsideredasregular municipalities).GENERAL POWERS & ATTRIBUTES OF LGUsSources of Powers Article II, Section 25 and Article X of the Constitution; statutes(eg. RA7160), charter.Section 15 Political and Corporate Nature of LGUs every LGU is abody politicand corporateendowed withpowerstobe exercised by it inconformity with law. Dual Functions of LGU (1) public/governmental acts as an agentofStateforthegovernmentoftheterritoryandits inhabitants; (2)proprietary/privateactsasanagentofthe community in the administration of local affairs, and as such, it acts as a separate entity for its own purposes and not as a subdivision of the State. Municipal Corporation in the Philippines:(1)Province (Sec. 459, LGC) clusterof municipalities or municipalities and component cities, as a political and corporate unit of government which serves as a dynamic mechanism for developmental processes and effective governance of LGUs within its territorial jurisdiction.(2)City (Sec. 448) composed of more more urbanized and developedbarangays,servesasageneralpurpose governmentforcoordinationanddeliveryofbasic, regular and direct services and effective governance ofthe inhabitants within its jurisdiction;(3)Municipality(Sec.440,LGC)groupsofbarangays, serves primarily as a general purpose government for coordinationand deliveryofbasic,regularand direct servicesand effective governanceofinhabitants within its jurisdiction;(4)Barangay (Sec. 384, LGC) basic political unit, serves as theprimaryplanningandimplementing unitof government policies, plans,programs, projects and activitiesinthe communityand as aforum where in collective views of people may be expressed, crystallized and consideredwheredisputesarealsoamicably settled;(5)AutonomousRegionsrefertoArticle10ofthe Constitution.Note: Metropolitan Manila Development Authority is not a local government unit. The power delegated to MMDA is that given to the Metro Manila Council to promulgate administrative rules and regulations in the Case: MMDA vs. BAVA,G.R. No. 135962,3/27/2000FACTS: Petitioner is a government agency tasked with delivery ofbasicservicesinMetroManila.RespondentBel-AirVillage Association, Inc. is a non-stock, non-profit corporation composed of homeowners in Bel-Air Village, a private subdivision in Makati City.Respondent had soughttoenjoinPetitionersplanto demolition theperimeterfenceand open to publicaccess Neptune Street, a road (beside) privately/legally owned by the subdivision. The Court of Appeals, in reversing the dismissal ofRespondents complaint, ruled that Petitioner did not have the authority to order the opening of the street in issue. Before the SC, Petitioner asserted that, there was no need for an ordinance from the City of Manila to open Neptune Street to public because, as an agent of the State, it was endowed with police power in the deliveryofbasicservicesinMetroManilaincludingtraffic management (involving regulation of the use of thoroughfares to insure the safety, convenience and welfare of the general public).DECISION: Petition DENIED. It is beyond doubt that MMDA is not a localgovernmentunitorapublic corporationendowedwith legislative power. It is not even a special metropolitan political subdivisionas contemplatedinSec.11,Art.Xofthe Constitution.MMDAspowersarelimitedtoformulation, coordination, regulation, implementation, preparation , management, monitoring, policy-setting, installation of a system and administration. There is no syllabus in RA7924 that grants MMDA police power, let alone legislative power. Clearly then, the MMC under P.D. No. 824 is not the same entity as the MMDA under R.A. No. 7924. Unlike the MMC,the MMDA has no power to enact ordinances for the welfare of the community. Itis the local government units, acting through their respective legislative councils, thatpossesslegislative powerand policepower. In the case at bar, the Sangguniang Panlungsod of Makati City did not pass anyordinance or resolution ordering the opening of Neptune Street, hence, itsproposed opening bypetitioner MMDA is illegal and the respondent Court ofAppeals did not err in so ruling. We desist from ruling on the other issues as they are unnecessary. PointsofDiscussionPolice power isinherentinthe State, exercised by the Legislature, but may be validly delegated. Upon validdelegation,theexercise thereof bythedelegatebeing limited onlytosuchpowersasconferred bythe legislature. Legislature has delegated police power to LGUs (Sec. 15, LGC)through theirrespective legislativebodies,undertheGeneral Welfare Clause (Sec. 16, LGC).NOTE:RA7924declaredMetropolitanorMetroManila(bodycomposed of several LGUs, i.e., twelve (12) cities of Caloocan, Manila, Mandaluyong, Makati, Pasay, Pasig, Quezon, Muntinlupa, Las Pias, Marikina, Paraaque and Valenzuela, and the five (5)municipalities of Malabon,Navotas, Pateros, San Juanand Taguig)as a "special development and administrative region" with the administration of "metro-wide" basic services affecting the region placed under "a development authority" referred to as the MMDA(governed bythe MetroManila Councilcomposed ofthe mayors of the component 12 cities and 5 municipalities, the president ofthe Metro Manila Vice-Mayors' League and the president of the Metro Manila Councilors' League) headed bythe Chairman.NOTE:WhenR.A.No.7924tookeffect,MetropolitanManila became a "special development and administrative region" and the MMDAa"specialdevelopment authority"whose functions were "without prejudice to the autonomy of the affected local governmentunits."ThecharacteroftheMMDAwasclearly defined in the legislative debates enacting its charter. MMDA nota special metropolitan political subdivision, because the latters creation requires the approval by a majority of the votes cast in a plebiscite in the political units directly affected. 56 R.A. No. 7924wasnotsubmittedtotheinhabitantsofMetroManilaina plebiscite. The Chairman of the MMDA is not an official elected by the people, but appointed by the President with the rank and privileges ofa cabinet member. Infact, part ofhis function isto perform such other duties as may be assigned to him by the President, 57 whereas in local government units, the President merelyexercisessupervisoryauthority.Thisemphasizesthe administrative character of theMMDA.Section 16 General Welfare Clause LGUs shall exercise powers expressly granted, those necessarily implied therefrom, as well ast hosenecessary,appropriateorincidentalforefficientand effectivegovernance(i.e.promote health, safety, enhance prosperity, improve morals of inhabitants) is the statutory grant ofpolicepowertoLGUs through their respective legislative bodies empoweringthemtoenactordinancesandapprove resolutions and appropriate functions for the general welfare ofthe LGU. Note: Police power is an inherent attribute of sovereignty vested inCongresstomake,ordain andestablishallmanners of wholesome and reasonablelawsforthe common good;it is plenary and its scope is vast and pervasive. However, by virtue of valid delegation, it may be exercised by LGUs. The latter being only agents can only exercise such powers as are conferred upon them by Congress. Limits on LGUs police Power -(1) Exercisable only within territorial limits of LGU(2) Equal Protection Clause ( interest of public vs. those of a particular class requires exercise of such power)(3) Due Process Clause (reasonable means employed and not undulyoppressivecaseofVillavicenciovs.Lukban,GRNo.14639, March 25, 1919)(4) Notcontrarytothe Constitution andthe laws(It cannot legalize prohibited act under the guise of regulation. Likewise, it cannot prohibit legal activities but only regulate)Note: Under Section 16, LGU to ensure and support preservation and enrichment of culture, promote health and safety, enhance peoples right to balance and healthful ecology, improve public morals,enhanceeconomicprosperityandsocialjustice, maintenance of peace and order.Case: REPUBLIC (DENR) vs. CITY OF DAVAO, G.R. No. 148622,9/12/2002PD 1596 (The Environmental Impact Statement System) ensures environmentalprotectionand regulatescertain government activities affectingthe environment. RelatedtoPD1151 (Philippine Environment Policy), requires an environmental impact statement from all agencies and instrumentalities of the national government,including government-ownedorcontrolled corporations,aswellasprivatecorporations,firms andentities, for every proposed project and undertaking which significantly affect the quality of the environment. DavaoCityin2000,applied foracertificateofnon-coverage(CNC) for its proposed Davao City Artica Sports Dome project from the required Environmental Compliance Certificate (having been certified that its project is not located in an environmentally critical area (ECA). Application denied for the reason that Davao City must undergo the environmental impact assessment (EIA)process to secure an Environmental Compliance Certificate (ECC),before it can proceed with theconstruction of its project. Denialofapplicationleadtocomplaintforinjunctionagainst DENR filed by Davao City. RTC ruled in latters favor reasoning that the laws do not require local government units (LGUs) to comply with the EIS law. Only agencies and instrumentalities ofthenationalgovernment,includinggovernmentownedorc ontrolled corporations, as well as private corporations, firms and entities are mandated to go through the EIA process for their proposed projects which have significant effect on the quality ofthe environment. A local government unit, not being an agency or instrumentality of the National Government, is deemed excluded under the principle of expressio unius estexclusio alterius. Petition for certiorari filed by Republic from RTC decision. Case moot and academic when subsequent change in administration ofDavao City which filed manifestation expressing that it needs to secureanECCforitsproposed project. But Court, for the guidance of the implementors of the EIS law and pursuant to our symbolic function to educate the bench and bar, addressed the issue. Decision: Sec. 15, LGC (a local government unit is body politic and corporateendowedwithpowers tobeexercisedbyitinconformitywithlaw).Assuch,itperformsdualfunctions, governmental andproprietary.In exerciseofgovernmental powers and performing governmental duties, an LGU is an agency of the national government. Sec. 16, LGC - duty of the LGUs to promote the people's right to a balanced ecology. Pursuant to this, an LGU, like theCity of Davao, can not claim exemption from the coverage of PD 1586. As a body politic endowed with governmental functions, an LGU has the duty to ensure the quality of the environment, which is the very same objective of PD 1586.Section 4 of PD 1586 clearly states that "no person, partnership orcorporation shallundertake oroperateany suchdeclared environmentally critical project orarea without firstsecuring an Environmental Compliance Certificate issued by the President or his duly authorized representative." 13 The Civil Code defines a person as either natural or juridical. The state and its political subdivisions,i.e.,thelocalgovernmentunits14are juridical persons. 15 Undoubtedly therefore, local government units are not excluded from the coverage of PD 1586.Note:BasedonDENR-CommunityEnvironmentandNatural ResourcesOffice(CENRO-West)certification,project area not environmentally critical area. SC is not trier of facts. Proclamation No. 2146 issued on December 14, 1981, lists areas and types ofprojects as ECA and within EIS system under PD1586, eg., heavy industries, iron and steel mills, smelting plants, major mining and quarrying projects, etc.)Case: RURAL BANKOF MAKATI, INC.vs. MUNICIPALITY OF MAKATI,G.R. No. 150763, 7/2/2004FACTS:Fornon-paymentofmayorspermitfeeandannual businesstaxes,criminalchargesagainstcertainofficersofPetitioner.Pendingthesecharges,Respondentorderedthe closure of the bank, prompting the latter to pay, under protestP82,408.66 as mayors permit fee and annual business taxes. Petitioner filed a civil complaint for sum of money and damages againstRespondentwithRTC allegingthatthecollectionofsubject feesand closure order wereoppressive and arbitrary whichresultedlossof expected earnings. RTCdismissedthe complaint, which decision wassustained bythe CAholdingthat the closure order was a legitimate exercise of police power by Respondent. Hence, petition with SC.DECISION: Assailed decision AFFIRMED with modification deleting closure order. RE (imposition of fees) - Municipal corporations are agencies of the State for the promotion and maintenance of locals elf-government and as such are endowed with police powers in order to effectively accomplish and carry out the declared objects of their creation. 20 The authority of a local government unit to exercise police power under a general welfare clause is not a recent development. Thus, the closure of the bank was a valid exercise of police power pursuant to the general welfare clause contained in and restated by B.P. Blg. 337, which was then the law governing local government units.The general welfare clause has two branches. The first, known as the general legislative power, authorizes the municipal council to enact ordinances and make regulations not repugnant to law, as may be necessary to carry into effect and discharge the powers and dutiesconferreduponthemunicipalcouncilbylaw.The second,known asthepolicepowerproper,authorizesthe municipality to enact ordinances as maybe necessary and proper for the health and safety, prosperity, morals, peace, good order, comfort, and convenience of the municipality and its inhabitants, and for theprotection of theirproperty. Inthepresentcase,theordinancesimposinglicensesand requiring permits for any business establishment, for purposes ofregulation enacted by the municipal council of Makati, fall with in the purview of the first branch of the general welfare clause. Moreover, the ordinance of the municipality imposing the annual business tax is part of the power of taxation vested upon local governments.RE (closure order) - The bank was not engaged in any illegal or immoral activities to warrant its outright closure. The appropriate remediestoenforcepaymentofdelinquenttaxesorfeesare provided for in Section 62 of the Local Tax Code, (by distraint ofpersonal property, and by legal action). The law did not provide for closure which furthermore violated petitioner's right to due process.Case:TANOvs.HON.GOV.SALVADORP.SOCRATES,G.R.No.110249, 8/21/ 1997FACTS: City Council of Puerto Princesa, Palawan, to effectively free city seawaters from cyanideand other obnoxious substances, passed Ordinance No. 15-92 (effective January 1, 1993) banning the shipment of all live fish and lobster outside Puerto Princesa from January 1, 1993 to January 1, 1998. To implement said city ordinance,the acting citymayorissued Office OrderNo. 23,authorizing local law enforcers to to check or conduct necessary inspectionsoncargoescontaininglivefishandlobsterbeing shipped out from the Puerto Princesa to ascertain whether the shipperpossessed therequired Mayor'sPermit issuedby this Office and the shipment is covered by invoice or clearance issued bythelocalofficeoftheBureauofFisheriesandAquatic Resources and as to compliance with all other existing rules and regulations on the matter. Subsequently, the Provincial Board ofPalawan issued a similar ordinance.Petitioners, who were charged with violation of certain provisions oftheforegoingissuancesuponthe lattersimplementation, soughtreliefwiththeSCcontendingthat(a)thechallenged ordinances deprived them of due process of law, their livelihood, and unduly restricted them from the practice of their trade, in violationofconstitutional guarantees,and (b)thechallenged office order contained no regulation nor condition under which the Mayor's permit could be granted ordenied, vesting the may or absoluteauthority todetermine whetherornot toissuethe permit.DECISION: PETITION dismissed. It is of course settled that laws(including ordinances enacted by local government units) enjoy thepresumptionofconstitutionality.Tooverthrowthis presumption, there must be a clear andunequivocal breach of the Constitution,notmerelyadoubtfulorargumentative contradiction. In short, the conflict with the Constitution must be shown beyond reasonable doubt. Wheredoubtexists,even ifwell-founded, there can be no finding of unconstitutionality. To doubt is to sustain.The right to a balanced and healthful ecology carries with it a correlative duty to refrain from impairing theenvironment . . . TheLGC provisions invoked by private respondents merely seek to give flesh and blood to the right of the people to a balanced and healthful ecology. In fact, the General Welfare Clause, expressly mentions this right. In lightthen ofthe principlesof decentralization anddevolution enshrined in the LGC and the powers granted therein to local government units under Section 16 (the General Welfare Clause),and under Sections 149, 447(a) (1) (vi), 458(a)(1)(vi) and 468(a)(1)(vi), which unquestionably involve the exercise of police power, the validity of thequestioned Ordinances cannot be doubted.Case: TAN vs. PEREA, G.R. No.149743, 2/18/2005FACTS: How many cockpits may be allowed to operate in a city or municipality?Comesintoplay,thetraditional power of the national government to enact police power measures, on one hand, and the vague principle of local autonomy now enshrined in the Constitution on the other. PD449 (Cockfighting Law of 1974)providedthatonlyone cockpitshallbeallowedineach city/municipality exceptthat incities ormunicipalitieswith a populationofover100T, two cockpitsmaybeestablished ,maintainedoroperated. In1993,theMunicipal Councilof Daanbantaya, Cebuenactedmunicipalordinances which eventually allowed the operation of not more than three cockpits in the municipality. In 1995, Petitioner (Leonardo Tan) applied fora license to operate a cockpit. Respondent (Socorro Perena), who was an existing licensee, filed a complaint with the RTC to enjoin Petitioner from operating his cockpit citing that the challenged ordinance allowing the operation of not more than three cockpits violatedPD449.Thetrialcourtdismissedthecomplaintand upheld Petitioners franchise reasoning that, while the ordiance may be in conflict with PD449, any doubt in interpretation should be resolved in favor of the grantof more power to LGUs under the LGCs principle of devolution. Court of Appeals reversed the trial courts decision. Hence, Petitioners appeal to theSC.RULING: Petition DENIED. For Petitioner, Section 447(a)(3)(v) ofthe LGC sufficiently repeals Section 5(b) of the Cockfighting Law, vesting as it does on LGUs the power and authority to issue franchisesandregulatetheoperation and establishmentofcockpits in their respective municipalities, any law to the contrary notwithstanding. However, while the Local Government Code expressly repealed several laws, PD449 was not among them. Section 534(f) of the LGC declares that all general and special laws or decrees inconsistent with the Code are hereby repealed or modified accordingly, but such clause is not an express repealing clause because it fails to identify or designate the acts that are intended to be repealed. While the sanggunian retains the power to authorize and license the establishment, operation, and maintenance of cockpits, its discretion is limited in that it cannot authorize more than one cockpitpercityormunicipality, unlesssuchcitiesor municipalities have a population of over one hundred thousand, in which case two cockpits may be established. Cockfighting Law arises from a valid exercise of police power by thenational government.Ofcourse, localgovernmentsare similarlyempowered under Section 16ofthe LocalGovernment Code. Wedonot doubt, however,theability ofthe national government to implement police power measures that affect the subjects ofmunicipal government, especially ifthe subject ofregulation isacondition ofuniversal character irrespective ofterritorial jurisdictions. Cockfighting is one such condition. It is a traditionally regulatedactivity,due tothe attendant gambling involved or maybe even the fact that it essentially consists of two birds killing each other for public amusement. Laws have been enacted restricting the days when cockfights could be held, and legislation has even been emphatic that cockfights could not beheld on holidays celebrating nationalhonor such as Independence Day and Rizal Day.The obvious thrust of our laws designating when cockfights could be held is to limit cockfighting and imposing the one-cockpit-per-municipality rule is in line with that aim. Cockfighting is a valid matter of police power regulation, as it is a form of gambling essentiallyantagonistictotheaimsofenhancingnational productivityandself-reliance.Limitationonthe numberofcockpits in a given municipality is a reasonably necessary means for the accomplishment of the purpose of controlling cockfighting, for clearly more cockpits equalsmore cockfights. A municipal ordinance must not contravene the Constitution or any statute, otherwise it is void. Ordinance No. 7 unmistakably contravenes the Cockfighting Law in allowing three cockpits in Daanbantayan.

Surigao Electric Co., Inc.vs. Municipality ofSurigaoPosted onOctober 23, 2012No. L-22766 August 30, 1968FACTS:On June 18,1960, Congress amended the Public Service Act and introduced doing away with the requirement of a certificate of public convenience and necessity from the Public Service Commission for public services owned or operated by government entities or government-owned and controlled corporations (GOCC), but at the same time affecting its power of regulation which while exempting public services owned or operated by any instrumentality of the government or any GOCC from its supervision, jurisdiction and control stops short of including the fixing of rates.Surigao Electric Co., and Arturo Lumanlan filed a petition for review challenging the validity of the order of respondent Public Service Commission, dated July 11, 1963, wherein it held that it had no alternative but to approve the tentative schedule of rates submitted by the applicant, the Municipality of Surigao.ISSUE:Whether or not a municipal government can directly maintain & operate an electric plant without obtaining a specific franchise for the purpose and without a certificate of public convenience and necessity duly issued by the PSC.HELD:Yes.The Municipality of Surigao is not a GOCC. However, it cannot be said that it is not a government entity.As early as 1916, inMendoza v. de Leon(33 Phil. 508), the dual character of a municipal corporation has long been recognized: (1) asGovernmental, being a branch of the general administration of the State, and (2) asQuasi-PrivateandCorporate.It is an undeniable fact that legislative and government powers are conferred upon a municipalityto enable it to aid a state in properly governing that portion of the people residing within its municipality, such powers (being) in their nature public, xxx (1 Dilon, Commentaries on the Law of Municipal Corporations, 5th ed., p.68 [1911]).Governmental affairs do not lose their governmental character by being delegated to the municipal governmentsto prese