TAXING POWER City Government of Quezon City vs Bayan Telecommunications

MIAA v. Court of Appeals

GR 162015 March 6, 2016
G.R. No. 155650 July 20, 2006
FACTS:
FACTS:
Respondent Bayantel is a legislative franchise holder under R.A. No. 3259 (1961) to establish and operate radio
MIAA operates NAIA Complex in Parañaque City under EO 903 (MIAA Charter), as amended. As such operator, it
stations for domestic telecommunications, radiophone, broadcasting and telecasting.  Section 14 (a) of R.A. No.
administers the land, improvements and equipment within the NAIA Complex. In March 1997, OGCC issued Opinion
3259 states: “The grantee shall be liable to pay the same taxes on its real estate, buildings and personal  property,
No. 061 to the effect that the LGC withdrew the exemption from real estate tax granted to MIAA under Section 21 of
exclusive of the franchise, xxx”. In 1992, R.A. No. 7160 (LGC) took effect. Section 232 of the Code grants local
its Charter. Thus, MIAA paid some of the real estate tax already due. In June 2001, it received Final Notices of Real
government units within the Metro Manila Area the power to levy tax on real properties. Barely few months after the
Estate Tax Delinquency from the City of Parañaque for the taxable years 1992 to 2001. The City Treasurer
LGC took effect, Congress enacted R.A. No. 7633, amending Bayantel’s original franchise. The Section 11 of the
subsequently issued notices of levy and warrants of levy on the airport lands and buildings. At the instance of MIAA,
amendatory contained the following tax provision: “The grantee, its successors or assigns shall be liable to pay the
the OGCC issued Opinion No. 147 clarifying Opinion No. 061, pointing out that Sec. 206 of the LGC requires
same taxes on their real estate, buildings and personal property, exclusive of this franchise, xxx“. In 1993, the
persons exempt from real estate tax to show proof of exemption. According to the OGCC, Sec. 21 of the MIAA
government of Quezon City enacted an ordinance otherwise known as the Quezon City Revenue Code withdrawing
Charter is the proof that MIAA is exempt from real estate tax. MIAA, thus, filed a petition with the CA seeking to
tax exemption privileges.
restrain the City of Parañaque from imposing real estate tax on, levying against, and auctioning for public sale the
airport lands and buildings, but this was dismissed for having been filed out of time. Hence, MIAA filed this petition
ISSUE:
for review, pointing out that it is exempt from real estate tax under Sec. 21 of its charter and Sec. 234 of the LGC. It
WON Bayantel’s real properties in Quezon City are exempt from real property taxes under its franchise.
invokes the principle that the government cannot tax itself as a justification for exemption, since the airport lands and
buildings, being devoted to public use and public service, are owned by the Republic of the Philippines. On the other
HELD:
hand, the City of Parañaque invokes Sec. 193 of the LGC, which expressly withdrew the tax exemption privileges of
YES. A clash between the inherent taxing power of the legislature, which necessarily includes the power to exempt,
government-owned and controlled corporations (GOCC) upon the effectivity of the LGC. It asserts that an
and the local government’s delegated power to tax under the aegis of the 1987 Constitution must be ruled in favor of
international airport is not among the exceptions mentioned in the said law. Meanwhile, the City of Parañaque
the former. The grant of taxing powers to LGUs under the Constitution and the LGC does not affect the power of
posted and published notices announcing the public auction sale of the airport lands and buildings. In the afternoon
Congress to grant exemptions to certain persons, pursuant to a declared national policy. The legal effect of the
before the scheduled public auction, MIAA applied with the Court for the issuance of a TRO to restrain the auction
constitutional grant to local governments simply means that in interpreting statutory provisions on municipal taxing
sale. The Court issued a TRO on the day of the auction sale, however, the same was received only by the City of
powers, doubts must be resolved in favor of municipal corporations.
Parañaque three hours after the sale.
The legislative intent expressed in the phrase “exclusive of this franchise”  cannot be construed other than
ISSUE:
distinguishing between two (2) sets of properties, be they real or personal, owned by the franchisee, namely, (a)
WON the airport lands and buildings of MIAA are exempt from real estate tax?
those actually, directly and exclusively used in its radio or telecommunications business , and (b) those properties
which are not so used. It is worthy to note that the properties subject of the present controversy are only those which
HELD:
are admittedly falling under the first category.
The airport lands and buildings of MIAA are exempt from real estate tax imposed by local governments. Sec. 243(a)
of the LGC exempts from real estate tax any real property owned by the Republic of the Philippines. This exemption
Since R. A. No. 7633 was enacted subsequent to the LGC, perfectly aware that the LGC has already withdrawn
should be read in relation with Sec.133 (o) of the LGC, which provides that the exercise of the taxing powers of local
Bayantel’s former exemption from realty taxes, the Congress using, Section 11 thereof with exactly the same
governments shall not extend to the levy of taxes, fees or charges of any kind on the National Government, its
defining phrase “exclusive of this franchise” is the basis for Bayantel’s exemption from realty taxes prior to the LGC.
agencies and instrumentalities.
In plain language, the Court views this subsequent piece of legislation as an express and real intention on the part of
MCIAA vs. Marcos Congress to once again remove from the LGC’s delegated taxing power, all of the franchisee’s (Bayantel’s)
GR 120082 September 11, 1996 properties that are actually, directly and exclusively used in the pursuit of its franchise.
261 SCRA 667
EMINENT DOMAIN
FACTS: City Government of Quezon vs. Judge Ericta
Mactan Cebu International Airport Authority (MCIAA) was created to “principally undertake to economical, efficient GR No. L-34915 June 24, 1983
and effective control, management and supervision of the Mactan International Airport… and such other airports as
may be established in the province of Cebu…” Section 14 of its charter exempts the Authority from payment of realty FACTS:
taxes but in 1994, the City Treasurer demanded payment for realty taxes on several parcels of land belonging to the An ordinance was promulgated in Quezon city which approved the regulation of establishment of private cemeteries
other. MCIAA filed a petition in RTC contending that, by nature of its powers and functions, it has the same footing of in the said city. According to the ordinance, 6% of the total area of the private memorial park shall be set aside for
an agency or instrumentality of the national government. The RTC dismissed the petition based on Section 193 & charity burial of deceased persons who are paupers and have been residents of QC. Himlayang Pilipino, a private
234 of the LGC or R.A. 7160. Thus this petition. memorial park, contends that the taking or confiscation of property restricts the use of property such that it cannot be
used for any reasonable purpose and deprives the owner of all beneficial use of his property. It also contends that
ISSUE: the taking is not a valid exercise of police power, since the properties taken in the exercise of police power are
WON the MCIAA is exempted from realty taxes? destroyed and not for the benefit of the public.

RULING: ISSUE:
With the repealing clause of RA 7160 the tax exemption provided. “All general and special in the charter of the WON the ordinance made by Quezon City is a valid taking of private property
MCIAA has been expressly repealed. It state laws, acts, City Charters, decrees, executive orders, proclamations
and administrative regulations, or part of parts thereof which are inconsistent with any of the provisions of the Code RULING:
are hereby repealed or modified accordingly.” Therefore the SC affirmed the decision and order of the RTC and No, the ordinance made by Quezon City is not a valid way of taking private property. The ordinance is actually a
herein petitioner has to pay the assessed realty tax of its properties effective January 1, 1992 up to the present. taking without compensation of a certain area from a private cemetery to benefit paupers who are charges of the
municipal corporation. Instead of building or maintaining public cemeteries. State's exercise of the power of
expropriation requires payment of just compensation. Passing the ordinance without benefiting the owner of the
property with just compensation or due process, would amount to unjust taking of a real property. Since the property HELD:
that is needed to be taken will be used for the public's benefit, then the power of the state to expropriate will come 1. The right of eminent domain is usually understood to be an ultimate right of the sovereign power to appropriate
forward and not the police power of the state. any property within its territorial sovereignty for a public purpose. Fundamental to the independent existence of a
City of Cebu vs Sps Dedamo State, it requires no recognition by the Constitution, whose provisions are taken as being merely confirmatory of its
GR 142971 May 7, 2002 presence and as being regulatory, at most, in the due exercise of the power. In the hands of the legislature, the
power is inherent, its scope matching that of taxation, even that of police power itself, in many respects. It reaches
FACTS: to every form of property the State needs for public use and, as an old case so puts it, all separate interests of
The City of Cebu expropriated the parcel of land owned by the Sps. Dedamo. The parties executed and submitted to individuals in property are held under a tacit agreement or implied reservation vesting upon the sovereign the right to
the trial court an Agreement wherein they declared that they have partially settled the case. Pursuant to the resume the possession of the property whenever the public interest so requires it.
Agreement, the trial court appointed 3 Commissioners to determine the just compensation of the lots sought to be
expropriated. The 3 Commissioners rendered an assessment for the lot in dispute and fixed it at P 12, 824.10 per The ubiquitous character of eminent domain is manifest in the nature of the expropriation proceedings. Expropriation
sq. m. The assessment was approved as just compensation thereof by the trial court. As a result, the City of Cebu proceedings are not adversarial in the conventional sense, for the condemning authority is not required to assert any
elevated the case to the SC and raised the issue that just compensation should be based on the prevailing market conflicting interest in the property. Thus, by filing the action, the condemnor in effect merely serves notice that it is
price of the property at the commencement of the expropriation proceedings and not at the time the property was taking title and possession of the property, and the defendant asserts title or interest in the property, not to prove a
actually taken. right to possession, but to prove a right to compensation for the taking.

ISSUE: Obviously, however, the power is not without its limits: first, the taking must be for public use, and second, that just
WON the petitioner has the right to attack or question the report of the Commissioners on which the decision was compensation must be given to the private owner of the property. These twin proscriptions have their origin in the
based. recognition of the necessity for achieving balance between the State interests, on the one hand, and private rights,
upon the other hand, by effectively restraining the former and affording protection to the latter. In determining “public
HELD: use,” two approaches are utilized - the first is public employment or the actual use by the public, and the second is
NO. By a solemn document freely and voluntarily agreed upon by the petitioner and the respondents, agreed to be public advantage or benefit. It is also useful to view the matter as being subject to constant growth, which is to say
bound by the report of the commission and approved by the trial court. The AGREEMENT is a contract between the that as society advances, its demands upon the individual so increases, and each demand is a new use to which the
parties. It has the force of law between them and should be complied with (Art. 1159 , CC). Furthermore, Art. 1315 resources of the individual may be devoted.
of the same Code provides that contracts are perfected by mere consent. In the case at bar, the petitioner was
estopped from attacking the report on which the decision was based due to consenting the commissioners’ report The expropriated property has been shown to be for the continued utilization by the PIA, a significant portion thereof
during the hearing being ceded for the expansion of the facilities of the Bulacan State University and for the propagation of the
Republic of the Philippines vs Court of Appeals Philippine carabao, themselves in line with the requirements of public purpose. Respondents question the public
G.R. No. 146587 July 2, 2002 nature of the utilization by petitioner of the condemned property, pointing out that its present use differs from the
purpose originally contemplated in the 1969 expropriation proceedings. The argument is of no moment. The
FACTS: property has assumed a public character upon its expropriation. Surely, petitioner, as the condemnor and as the
Petitioner (PIA) instituted expropriation proceedings covering a total of 544,980 square meters of contiguous land owner of the property, is well within its rights to alter and decide the use of that property, the only limitation being
situated along MacArthur Highway, Malolos, Bulacan, to be utilized for the continued broadcast operation and use of that it be for public use, which, decidedly, it is.
radio transmitter facilities for the “Voice of the Philippines” project.
2. NO. The grant of the power of eminent domain to local governments under RA No. 7160 cannot be understood as
Petitioner made a deposit of P517,558.80, the sum provisionally fixed as being the reasonable value of the property. being the pervasive and all-encompassing power vested in the legislative branch of government. For local
On 26 February 1979, or more than 9 years after the institution of the expropriation proceedings, the trial court governments to be able to wield the power, it must, by enabling law, be delegated to it by the national legislature, but
issued this order condemning the property and ordering the plaintiff to pay the defendants the just compensation for even then, this delegated power of eminent domain is not, strictly speaking, a power of eminent, but only of inferior,
the property. domain or only as broad or confined as the real authority would want it to be.

It would appear that the National Government failed to pay the respondents the just compensation pursuant to the Thus, in Valdehueza vs. Republic where the private landowners had remained unpaid ten years after the termination
foregoing decision. Respondents then filed a manifestation with a motion seeking payment for the expropriated of the expropriation proceedings, this Court ruled -
property. In response, the court issued a writ of execution for the implementation thereof.
By final and executory judgment in said proceedings, they were condemned for public use, as part of an
Meanwhile, Pres. Estrada issued Proc. No. 22 transferring 20 hectares of the expropriated land to the Bulacan State airport, and ordered sold to the government. x x x It follows that both by virtue of the judgment, long final,
University. in the expropriation suit, as well as the annotations upon their title certificates, plaintiffs are not entitled to
recover possession of their expropriated lots - which are still devoted to the public use for which they
Despite the court’s order, the Santos heirs remained unpaid and no action was on their case until petitioner filed its were expropriated - but only to demand the fair market value of the same.
manifestation and motion to permit the deposit in court of the amount P4,664,000 by way of just compensation.
The Court proceeded to reiterate its pronouncement in Alfonso vs. Pasay City where the recovery of possession of
The Santos heirs submitted a counter-motion to adjust the compensation from P6/sq.m. as previously fixed to its property taken for public use prayed for by the unpaid landowner was denied even while no requisite expropriation
current zonal value of P5,000/sq.m. or to cause the return of the expropriated property. proceedings were first instituted. The landowner was merely given the relief of recovering compensation for his
property computed at its market value at the time it was taken and appropriated by the State.
The RTC Bulacan ruled in favor of the Santos heirs declaring its 26 February 1979 Decision to be unenforceable on
the ground of prescription in accordance with Sec. 6, Rule 39 of the 1964/1997 ROC. RTC denied petitioner’s The judgment rendered by the Bulacan RTC in 1979 on the expropriation proceedings provides not only for the
Motion to Permit Deposit and ordered the return of the expropriated property to the heirs of Santos. payment of just compensation to herein respondents but likewise adjudges the property condemned in favor of
petitioner over which parties, as well as their privies, are bound. Petitioner has occupied, utilized and, for all intents
ISSUES: and purposes, exercised dominion over the property pursuant to the judgment. The exercise of such rights vested to
1. WON the petitioner may appropriate the property it as the condemnee indeed has amounted to at least a partial compliance or satisfaction of the 1979 judgment,
2. WON the respondents are entitled to the return of the property in question thereby preempting any claim of bar by prescription on grounds of non-execution. In arguing for the return of their
property on the basis of non-payment, respondents ignore the fact that the right of the expropriatory authority is far
from that of an unpaid seller in ordinary sales, to which the remedy of rescission might perhaps apply. An in rem 2. WON the DAR should use the comprehensive land use plans and ordinance of the local sanggunian as
proceeding, condemnation acts upon the property. After condemnation, the paramount title is in the public under a primary reference
new and independent title; thus, by giving notice to all claimants to a disputed title, condemnation proceedings
provide a judicial process for securing better title against all the world than may be obtained by voluntary HELD
conveyance. 1. No, Under the circumstances, a notice of coverage is not an indispensable requirement before DAR can acquire
the subject lots or commercial farms, which are covered by a deferment period under the Comprehensive
The constitutional limitation of “just compensation” is considered to be the sum equivalent to the market value of the Agrarian Reform Law (CARL) or R.A. No 6657 upon its effectivity on June 15, 1998
property, broadly described to be the price fixed by the seller in open market in the usual and ordinary course of
legal action and competition or the fair value of the property as between one who receives, and one who desires to 2. Yes, Section 20 of Republic Act No. 7160, empowers the local government units to reclassify agricultural lands.
sell, it fixed at the time of the actual taking by the government. Thus, if property is taken for public use before Memorandum Circular No. 54 “Prescribing the Guidelines Governing Section 20 of R.A. No. 7160 Otherwise
compensation is deposited with the court having jurisdiction over the case, the final compensation must include Known as the Local Government Code of 1991 Authorizing Cities and Municipalities to Reclassify Agricultural
interests on its just value to be computed from the time the property is taken to the time when compensation is Lands Into Non-Agricultural Uses” issued by President Ramos on June 8, 1993 specified the scope and
actually paid or deposited with the court. In fine, between the taking of the property and the actual payment, legal limitations on the power of the cities and municipalities to reclassify agricultural lands into other uses. It provided
interests accrue in order to place the owner in a position as good as (but not better than) the position he was in that all ordinances authorizing reclassification of agricultural lands shall be subject to the review and approval of
before the taking occurred. the province in the case of component cities or municipalities, or by the HLURB for highly urbanized or
independent component cities in accordance with Executive Order No. 72, Series of 1993.
Verily, private respondents, although not entitled to the return of the expropriated property, deserve to be paid
promptly on the yet unpaid award of just compensation already fixed by final judgment of the Bulacan RTC on 26 Hence, with regard to agricultural lands that have been reclassified for non-agricultural uses by the local
February 1979 at P6.00 per square meter, with legal interest thereon at 12% per annum computed from the date of government unit concerned, the CA is correct in declaring that DAR should refer to the comprehensive land use
"taking" of the property, i.e., 19 September 1969, until the due amount shall have been fully paid. plans and the ordinances of the Sanggunian in assessing land use conversion applications, thus:
RECLASSIFIATION OF LANDS Construing Sec. 20 of the Local Government Code and the subsequent administrative issuances implementing
DAR vs Sarangani the same, we are of the opinion that while the DAR retains the responsibility for approving or disapproving
G.R. No. 165547 January 24, 2007 applications for land use conversion filed by individual landowners on their landholdings, the exercise of such
authority should be confined to compliance with the requirements and limitations under existing laws and
FACTS: regulations, such as the allowable percentage of agricultural [area] to be reclassified, ensuring sufficient food
The Sangguniang Bayan of Alabel, Sarangani passed Resolution No. 97-08 adopting a 10 year comprehensive production, areas non-negotiable for conversion and those falling under environmentally critical areas or highly
development plan of the municipality and its land use. On January 30, 1998, pursuant to Municipal Zoning restricted for conversion under the NIPAS law. Definitely, the DAR’s power in such cases may not be exercised in
Ordinance No. 08, Series of 1997, and to accelerate the development and urbanization of Alabel, the Sangguniang such a manner as to defeat the very purpose of the LGU concerned in reclassifying certain areas to achieve
Bayan of Alabel passed Resolution No. 98-03 reclassifying lots that were located within the built-up areas, based on social and economic benefits in pursuit of its mandate towards the general welfare. Precisely, therefore, the DAR
the 1995-2005 Land Use Plan of the municipality, from agricultural to non-agricultural uses. is required to use the comprehensive land use plans and accompanying ordinances of the local Sanggunian as
primary references in evaluating applications for land use conversion filed by individual landowners. In this case,
Later, the Sangguniang Panlalawigan of Sarangani approved Resolution No. 98-018 or the “Resolution Adopting the petitioners have already complied with the standard requirements laid down under the applicable rules and
Ten-Year Municipal Comprehensive Development Plan (MCDP 1995-2205) and the Land Use Development Plan regulations of the DAR....
and Zoning Ordinance of the Municipality of Alabel, Sarangani Per Resolution No. 97-08 and Municipal Ordinance
No. 97-08, S. of 1997 of the Sangguniang Bayan of Alabel.” A portion of the area involving 376.5424 hectares, The conversion of agricultural lands into non-agricultural uses shall be strictly regulated and may be allowed only
however, was covered by the CARP commercial farms deferment scheme. when the conditions prescribed under R.A. No. 6657 are present. In this regard, the Court agrees with the
ratiocination of the CA that DAR’s scope of authority in assessing land use conversion applications is limited to
The Zoning Certification issued by the office of the Municipal Planning and Development Council (MPDC) showed examining whether the requirements prescribed by law and existing rules and regulations have been complied
that respondents’ properties located at Barangay Maribulan, Alabel were among those reclassified from agricultural with. This holds true in the present case where, because of the creation of the Province of Sarangani and in view
and pasture land to residential, commercial institutional, light industrial and open space in the 1995-2005 land use of its thrust to urbanize, particularly its provincial capital which is the Municipality of Alabel, the local government
plan of Alabel. has reclassified certain portions of its land area from agricultural to non-agricultural. Thus, to reiterate, in
accordance with E.O. No. 72, Series of 1993, and subject to the limitations prescribed by law, DAR should utilize
The respondent then field an application for land use conversion of certain parcels of land. Meanwhile, members of the comprehensive land use plans in evaluating the land use conversion application of respondents whose lands
the Sarangani Agrarian Reform Beneficiaries Association, Inc. (SARBAI) sent a letter-petition to the DAR Secretary have already been reclassified by the local government for non--agricultural uses.
oppposing the application for land use conversion filed by SACI. SARBAI alleged that its members were merely
forced to sign the waiver of rights, considering that the commercial farm deferment period ended on June 15, 1998. This is not to say, however, that every property of respondents which is included in the comprehensive land use
Later, the PLUTC agreed to recommend the disapproval of a portion of a property which was still viable for plan of the Municipality of Alabel shall be automatically granted non-coverage. As mentioned earlier, said
agriculture. The conversion was deferred subject to the submission of certain requirements. application is subject to the limitations and conditions prescribed by law. One such limitation that is present here
is that a portion of respondents’ property of 376.5424 hectares, a portion totaling 154.622 [or 154.1622] hectares
Later, the DAR Secretary denied SACI’s application for land use conversion. which are planted to bananas and coconuts, are covered by CARL’s ten-year deferment scheme, which has
expired on June 15, 1998. By law, these lands are subject to redistribution to CARP beneficiaries upon the lapse
On November 9, 2000, DAR Secretary Horacio R. Morales, Jr. denied SACI’s application for land use conversion. of the ten-year period, counted from the date of the effectivity of the CARL or R.A. No. 6657 on June 15, 1988,
SACI appealed to the Office of the President. The Office of the President dismissed the appeal and affirmed in toto which was way before the creation of the Province of Sarangani and the eventual reclassification of the
the challenged DAR Orders. Respondents’ motion for reconsideration was denied, so they filed with the Court of agricultural lands into non-agricultural in the Municipality of Alabel where respondents’ properties are located.
Appeals a petition for review raising substantially the same issues.
In short, the creation of the new Province of Sarangani, and the reclassification that was effected by the
The CA granted the petition and ordred DAR to issue a conversion order. As to the deferred portion, DAR was Municipality of Alabel did not operate to supersede the applicable provisions of R.A. No. 6657.
directed to expedite the processing and evaluation of petitioner’s application.
Moreover, Section 20 of the LGC of 1991 on the reclassification of lands explicitly states that “[n]othing in this
ISSUE: section shall be construed as repealing, amending or modifying in any manner the provisions of R.A. No. 6657.”
1. WON a notice of coverage is an indispensable requirement for the acquisition of land
 Thus, where the law speaks in clear and categorical language, there is no room for interpretation. There is only The MMDA has no power to enact ordinances for the welfare of the community. It is the local government units,
room for application. acting through their respective legislative councils that possess legislative power and police power. In the case at
bar, the Sangguniang Panlungsod of Makati City did not pass any ordinance or resolution ordering the opening of
CLOSURE AND OPENING OF ROADS Neptune Street, hence, its proposed opening by petitioner MMDA is illegal and the respondent Court of Appeals did
Sangalang v. IAC not err in so ruling.
G.R. No. 71169. December 22, 1988
The MMDA was created to put some order in the metropolitan transportation system but unfortunately the powers
FACTS: granted by its charter are limited. Its good intentions cannot justify the opening for public use of a private street in a
The Mayor of Makati directed Bel-Air Village Association (BAVA) to opening of several streets to the general public, private subdivision without any legal warrant. The promotion of the general welfare is not antithetical to the
after a series of developments in zoning regulations. All but Jupiter St. was voluntarily opened. The strong preservation of the rule of law.
opposition later gave way when the municipal officials force-opened the gates of said street for public use. The area
Lucena Grand Central Terminal vs. JAC Liner
ceased to be purely residential. Action for damages was brought against Ayala Corporation and BAVA for alleged
G.R. No. 148339. February 23, 2005
breach of contract, to maintain the purely residential status of the area. Other similarly situated also filed their
respective cases. All were dismissed in the trial court. The Court of Appeals affirmed the said dismissals.
FACTS:
Respondent JAC Liner, Inc., a common carrier operating buses which ply various routes to and from Lucena City,
ISSUE:
assailed City Ordinance Nos. 1631 and 1778 as unconstitutional on the ground that these constituted an invalid
WON there is a contract between homeowners and Ayala Corporation violated in opening the Jupiter street for
exercise of police power, an undue taking of private property, and a violation of the constitutional prohibition against
public use.
monopolies.
HELD:
Ordinance No. 1631
No. There was no contract to speak of in the case, hence nothing was violated. Petitioners cannot successfully rely
AN ORDINANCE GRANTING THE LUCENA GRAND CENTRAL TERMINAL, INC., A FRANCHISE TO
on the alleged promise by Ayala Corporation, to build a “[f]ence along Jupiter [street] with gate for entrance and/or
CONSTRUCT, FINANCE, ESTABLISH, OPERATE AND MAINTAIN A COMMON BUS-JEEPNEY
exit as evidence of Ayala’s alleged continuing obligation to maintain a wall between the residential and commercial
TERMINAL FACILITY IN THE CITY OF LUCENA
sections. Assuming there was a contract violated, it was still overtaken by the passage of zoning ordinances which
represent a legitimate exercise of police power. The petitioners have not shown why Courts should hold otherwise
Ordinance No. 1778
other than for the supposed “non-impairment” guaranty of the Constitution, which is secondary to the more
AN ORDINANCE REGULATING THE ENTRANCE TO THE CITY OF LUCENA OF ALL BUSES, MINI-
compelling interests of general welfare. The Ordinance has not been shown to be capricious or arbitrary or
BUSES AND OUT-OF-TOWN PASSENGER JEEPNEYS AND FOR THIS PURPOSE, AMENDING
unreasonable to warrant the reversal of the judgments so appealed. 
ORDINACE NO. 1420, SERIES OF 1993, AND ORDINANCE NO. 1557, SERIES OF 1995
MMDA vs Bel-Air Village Assoc.
March 27, 2000 The above-mentioned ordinances, by granting an exclusive franchise for twenty five years, renewable for another
twenty five years, to Lucena Grand Central Terminal, Inc., its successors or assigns, for the construction and
FACTS operation of one common bus and jeepney terminal facility in Lucena City, to be located outside the city proper,
Petitioner MMDA is a government agency tasked with the delivery of basic services in Metro Manila. Respondent were professedly aimed towards alleviating the traffic congestion alleged to have been caused by the existence of
Bel-Air Village Association, Inc. (BAVA) is a non-stock, non-profit corporation whose members are homeowners in various bus and jeepney terminals within the city.
Bel-Air Village, a private subdivision in Makati City. Respondent BAVA is the registered owner of Neptune Street, a
road inside Bel-Air Village. Further, the subject ordinances prohibit the operation of all bus and jeepney terminals within Lucena, including those
already existing, and allow the operation of only one common terminal located outside the city proper, the franchise
On December 30, 1995, respondent received from petitioner, through its Chairman, a notice dated December 22, for which was granted to petitioner. The common carriers plying routes to and from Lucena City are thus compelled
1995 requesting respondent to open Neptune Street to public vehicular traffic starting January 2, 1996. to close down their existing terminals and use the facilities of petitioner.
Actions Filed: Respondent, who had maintained a terminal within the city, was one of those affected by the ordinances.
1. BAVA – applied for injunction; trial court issued temporary restraining order but after due hearing, trial
court denied the issuance of a preliminary injunction. The petitioner via petition for review, sought the wisdom of Supreme Court, assailing the Decision and Resolution of
2. BAVA – appealed to CA which issued preliminary injunction and later ruled that MMDA has no authority the Court of Appeals.
to order the opening of Neptune Street, a private subdivision road and cause the demolition of its
perimeter walls. It held that the authority is lodged in the City Council of Makati by ordinance. ISSUE:
3. MMDA – filed motion for reconsideration but was denied by CA; hence the current recourse. Whether the City of Lucena properly exercised its police power when it enacted City Ordinance Nos. 1631 and 1778
ISSUES HELD:
1. Has the MMDA the mandate to open Neptune Street to public traffic pursuant to its regulatory and police As with the State, the local government may be considered as having properly exercised its police power only if the
powers? following requisites are met: (1) the interests of the public generally, as distinguished from those of a particular
2. Is the passage of an ordinance a condition precedent before the MMDA may order the opening of subdivision class, require the interference of the State, and (2) the means employed are reasonably necessary for the
roads to public traffic? attainment of the object sought to be accomplished and not unduly oppressive upon individuals. Otherwise stated,
there must be a concurrence of a lawful subject and lawful method.
HELD
The MMDA is, as termed in the charter itself, "development authority." All its functions are administrative in nature. The questioned ordinances having been enacted with the objective of relieving traffic congestion in the City of
Lucena, involve public interest warranting the interference of the State. The first requisite for the proper exercise of
The powers of the MMDA are limited to the following acts: formulation, coordination, regulation, implementation, police power is thus present
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.
But the ordinances go beyond what is reasonably necessary to solve the traffic problem. Additionally, since the of the purpose and not unduly oppressive. The object of the ordinance was the promotion and protection of the
compulsory use of the terminal operated by petitioner would subject the users thereof to fees, rentals and charges, social and moral values of the community. The closing down and transfer of businesses or their conversion into
such measure is unduly oppressive, as correctly found by the appellate court. businesses allowed under the ordinance have no reasonable relation to its purpose. Otherwise stated, the
prohibition of the enumerated establishments will not per se protect and promote social and moral welfare of the
Bus terminals per se do not, however, impede or help impede the flow of traffic. How the outright proscription community. It will not itself eradicate prostitution, adultery, fornication nor will it arrest the spread of sexual disease in
against the existence of all terminals, apart from that franchised to petitioner, can be considered as reasonably Manila.
necessary to solve the traffic problem, this Court has not been enlightened.
Second. The modality employed constitutes unlawful taking. The ordinance is unreasonable and oppressive as it
The true role of Constitutional Law is to effect an equilibrium between authority and liberty so that rights are substantially divests the respondent of the beneficial use of its property. The ordinance forbids running of the
exercised within the framework of the law and the laws are enacted with due deference to rights. enumerated businesses in Ermita-Malate area and instructs owners/operators to wind up their business operations
or to transfer outside the area or convert said business into allowed business. An ordinance which permanently
As for petitioner’s claim that the challenged ordinances have actually been proven effective in easing traffic restricts the use of property that it cannot be used for any reasonable purpose goes beyond regulation and must be
congestion: Whether an ordinance is effective is an issue different from whether it is reasonably necessary. It is its recognized as a taking of the property without just compensation. It is intrusive and violative of the private property
reasonableness, not its effectiveness, which bears upon its constitutionality. If the constitutionality of a law were rights of individuals. There are two types of taking: A “possessory” taking and a “regulatory” taking. The latter occurs
measured by its effectiveness, then even tyrannical laws may be justified whenever they happen to be effective. when the government’s regulation leaves no reasonable economically viable use of the property, as in this case.

Hence, Ordinance No. 1631 is valid, having been issued in the exercise of the police power of the City Government Third. The ordinance violates the equal protection clause. Equal protection requires that all persons or things
of Lucena insofar as the grant of franchise to the Lucena Grand Central Terminal, Inc., to construct, finance, similarly situated should be treated alike, both as to the rights conferred and responsibilities imposed. Similar
establish, operate and maintain common bus-jeepney terminal facility in the City of Lucena. subjects, in other words, should not be treated differently, so as to give undue favor to some. Legislative bodies are
allowed to classify the subjects of legislation provided the classification is reasonable. To be valid, it must conform to
Sec. 4(c) of Ordinance No. 1631 is illegal and ultra vires because it contravenes the provisions of Republic Act No. the following requirements: (1)It must be based on substantial distinction; (2)It must be germane to the purpose of
7160, otherwise known as “The Local Government Code”. the law; (3)It must not be limited to existing conditions only; and (4)It must apply equally to all members of the class.
In the Court’s view, there are no substantial distinction between motels, inns, pension houses, hotels, lodging
City Ordinance No. 1778 is null and void, the same being also an ultra vires act of the City Government of Lucena houses or other similar establishments. By definition, all are commercial establishments providing lodging and
arising from an invalid, oppressive and unreasonable exercise of the police power. usually meals and other services for the public. No reason exists for prohibiting motels and inns but not pension
houses, hotels, lodging houses or other similar establishments. The Court likewise cannot see the logic for
Affirming the decision of the Court of Appeals, the petition of Lucena Grand Central Terminal, Inc.is DENIED by the prohibiting the business and operation of motels in the Ermita-Malate area but not outside this area. A noxious
Supreme Court. establishment does not become any less noxious if located outside the area.
LEGISLATIVE POWER Fourth. The ordinance is repugnant to general laws, thus it is ultra vires. The ordinance is in contravention of the
City of Manila vs. Judge Laguio Revised Administrative Code as the Code merely empowers the local government units to regulate, and not prohibit,
G.R. No. 118127 the establishments enumerated. Not only that, it likewise runs counter to the provisions of P.D. 499. The P.D. Had
already converted the residential Ermita-Malate area into a commercial area. The decree allowed the establishment
FACTS: and operation of all kinds of commercial establishments.
The private respondent, Malate Tourist Development Corporation (MTOC) is a corporation engaged in the business
of operating hotels, motels, hostels, and lodging houses. It built and opened Victoria Court in Malate which was Wherefore, the petition was DENIED and the decision of the RTC was AFFIRMED.
licensed as a motel although duly accredited with the Department of Tourism as a hotel.
Social Justice Society vs. Atienza
G.R. No. 156052, 13 February 2008
March 30, 1993 - City Mayor Alfredo S. Lim approved an ordinance enacted which prohibited certain forms of
amusement, entertainment, services and facilities where women are used as tools in entertainment and which tend
FACTS:
to disturb the community, annoy the inhabitants, and adversely affect the social and moral welfare of the community.
The Social Justice Society sought to compel respondent Hon. Jose L. Atienza, Jr., then mayor of the City of Manila,
The Ordinance prohibited the establishment of sauna parlors, massage parlors, karaoke bars, beerhouses, night
to enforce Ordinance No. 8027 that was enacted by the Sangguniang Panlungsod of Manila in 2001. Ordinance No.
clubs, day clubs, cabarets, motels, inns. Owners and operators of the enumerated establishments are given three
8027 reclassified the area described therein from industrial to commercial and directed the owners and operators of
months to wind up business operations or transfer to any place outside Ermita-Malate or convert said businesses to
businesses disallowed under the reclassification to cease and desist from operating their businesses within six
other kinds allowable within the area. The Ordinance also provided that in case of violation and conviction, the
months from the date of effectivity of the ordinance. Among the businesses situated in the area are the so-called
premises of the erring establishment shall be closed and padlocked permanently.
Pandacan Terminals of the oil companies (the brief history of the Pandacan Oil Terminals is here).
June 28, 1993 - MTOC filed a Petition with the lower court, praying that the Ordinance, insofar as it included motels
In 2002, the City of Manila and the Department of Energy (DOE) entered into a memorandum of understanding
and inns as among its prohibited establishments, be declared invalid and unconstitutional for several reasons but
(MOU) with the oil companies. They agreed that the scaling down of the Pandacan Terminals [was] the most viable
mainly because it is not a valid exercise of police power and it constitutes a denial of equal protection under the law.
and practicable option. The Sangguniang Panlungsod ratified the MOU in Resolution No. 97. In the same resolution,
the Sanggunian declared that the MOU was effective only for a period of six months starting 25 July 2002, which
Judge Laguio ruled for the petitioners. The case was elevated to the Supreme Court.
period was extended up to 30 April 2003.
ISSUE
This is the factual backdrop of the Supreme Court’s March 2007 Decision. The SC ruled that respondent had the
WON the Ordinance is constitutional.
ministerial duty under the Local Government Code (LGC) to enforce all laws and ordinances relative to the
governance of the city, including Ordinance No. 8027. After the SC promulgated its Decision, Chevron Philippines
HELD
Inc. (Chevron), Petron Corporation (Petron) and Pilipinas Shell Petroleum Corporation (Shell) (the oil companies )
SC held that the ordinance is unconstitutional for several reasons.
and the Republic of the Philippines, represented by the DOE, sought to intervene and ask for a reconsidera tion of
the decision.
First, it did not meet the valid exercise of police power. To successfully invoke the exercise of police power, not only
must it appear that (1)the interest of the public generally, as distinguished from those of a particular class, require an
Intervention of the oil companies and the DOE allowed in the interest of justice
interference with private rights, but (2)the means employed must be reasonably necessary for the accomplishment
 morals, peace, education, good order or safety and general welfare of the people. This power flows from the
Intervention is a remedy by which a third party, not originally impleaded in the proceedings, becomes a litigant recognition that salus populi est suprema lex(the welfare of the people is the supreme law).
therein to enable him, her or it to protect or preserve a right or interest which may be affected by such proceedings.
The allowance or disallowance of a motion to intervene is addressed to the sound discretion of the court. While the While police power rests primarily with the national legislature, such power may be delegated. Section 16 of the
motions to intervene respectively filed by the oil companies and the DOE were filed out of time, these motions were LGC, known as the general welfare clause, encapsulates the delegated police power to local governments. LGUs
granted because they presented novel issues and arguments. DOEs intervention was also allowed considering the like the City of Manila exercise police power through their respective legislative bodies, in this case, the
transcendental importance of this case. Sangguniang Panlungsod or the city council. Specifically, the Sanggunian can enact ordinances for the general
welfare of the city.
Ordinance No. 8119 did not impliedly repeal Ordinance No. 8027
Repeal by implication proceeds on the premise that where a statute of later date clearly reveals the intention of the This police power was also provided for in RA 409 or the Revised Charter of the City of Manila. Specifically, the
legislature to abrogate a prior act on the subject, that intention must be given effect. Implied repeals are not favored Sanggunian has the power to reclassify land within the jurisdiction of the city.
and will not be so declared unless the intent of the legislators is manifest.
The enactment of Ordinance No. 8027 is a legitimate exercise of police power
There are two kinds of implied repeal. The first is: where the provisions in the two acts on the same subject matter As with the State, local governments may be considered as having properly exercised their police power only if the
are irreconcilably contradictory, the latter act, to the extent of the conflict, constitutes an implied repeal of the earlier following requisites are met: (1) the interests of the public generally, as distinguished from those of a particular class,
one. The second is: if the later act covers the whole subject of the earlier one and is clearly intended as a substitute, require its exercise; and (2) the means employed are reasonably necessary for the accomplishment of the purpose
it will operate to repeal the earlier law. The oil companies argue that the situation here falls under the first category. and not unduly oppressive upon individuals. In short, there must be a concurrence of a lawful subject and a lawful
method.
For the first kind of implied repeal, there must be an irreconcilable conflict between the two ordinances. However,
there was no legislative purpose to repeal Ordinance No. 8027. There is no conflict since both ordinances actually Ordinance No. 8027 is a valid police power measure because there is a concurrence of lawful subject and lawful
have a common objective, i.e., to shift the zoning classification from industrial to commercial (Ordinance No. 8027) method. It was enacted for the purpose of promoting sound urban planning, ensuring health, public safety and
or mixed residential/commercial (Ordinance No. 8119). While it is true that both ordinances relate to the same general welfare of the residents of Manila. The Sanggunian was impelled to take measures to protect the residents
subject matter, i.e., classification of the land use of the area where Pandacan oil depot is located, if there is no intent of Manila from catastrophic devastation in case of a terrorist attack on the Pandacan Terminals. Towards this
to repeal the earlier enactment, every effort at reasonable construction must be made to reconcile the ordinances so objective, the Sanggunian reclassified the area defined in the ordinance from industrial to commercial.
that both can be given effect.
The ordinance was intended to safeguard the rights to life, security and safety of all the inhabitants of Manila and not
Moreover, it is a well-settled rule in statutory construction that a subsequent general law does not repeal a prior just of a particular class. The depot is perceived, rightly or wrongly, as a representation of western interests which
special law on the same subject unless it clearly appears that the legislature has intended by the latter general act to means that it is a terrorist target. As long as it there is such a target in their midst, the residents of Manila are not
modify or repeal the earlier special law. The special law must be taken as intended to constitute an exception to, or a safe. It therefore became necessary to remove these terminals to dissipate the threat. Wide discretion is vested on
qualification of, the general act or provision. Ordinance No. 8027 is a special law since it deals specifically with a the legislative authority to determine not only what the interests of the public require but also what measures are
certain area described therein (the Pandacan oil depot area) whereas Ordinance No. 8119 can be considered a necessary for the protection of such interests. Clearly, the Sanggunian was in the best position to determine the
general law as it covers the entire city of Manila. needs of its constituents.

Mandamus lies to compel respondent Mayor to enforce Ordinance No. 8027 In the exercise of police power, property rights of individuals may be subjected to restraints and burdens in order to
The oil companies insist that mandamus does not lie against respondent in consideration of the separation of fulfill the objectives of the government. Otherwise stated, the government may enact legislation that may interfere
powers of the executive and judiciary. However, while it is true that Courts will not interfere by mandamus with personal liberty, property, lawful businesses and occupations to promote the general welfare. However, the
proceedings with the legislative or executive departments of the government in the legitimate exercise of its powers, interference must be reasonable and not arbitrary. And to forestall arbitrariness, the methods or means used to
there is an exception – to enforce mere ministerial acts required by law to be performed by some officer thereof. A protect public health, morals, safety or welfare must have a reasonable relation to the end in view.
writ of mandamus is the power to compel the performance of an act which the law specifically enjoins as a duty
resulting from office, trust or station. The means adopted by the Sanggunian was the enactment of a zoning ordinance which reclassified the area where
the depot is situated from industrial to commercial. A zoning ordinance is defined as a local city or municipal
The oil companies also argue that petitioners had a plain, speedy and adequate remedy to compel respondent to legislation which logically arranges, prescribes, defines and apportions a given political subdivision into specific land
enforce Ordinance No. 8027, which was to seek relief from the President of the Philippines through the Secretary of uses as present and future projection of needs. As a result of the zoning, the continued operation of the businesses
the Department of Interior and Local Government (DILG) by virtue of the President’s power of supervision over local of the oil companies in their present location will no longer be permitted. The power to establish zones for industrial,
government units. This suggested process, however, would be unreasonably long, tedious and consequently commercial and residential uses is derived from the police power itself and is exercised for the protection and benefit
injurious to the interests of the local government unit (LGU) and its constituents whose welfare is sought to be of the residents of a locality. Consequently, the enactment of Ordinance No. 8027 is within the power of the
protected. A party need not go first to the DILG in order to compel the enforcement of an ordinance. Besides, the Sangguniang Panlungsod of the City of Manila and any resulting burden on those affected cannot be said to be
resort to an original action for mandamus before the SC is undeniably allowed by the Constitution. unjust.

Ordinance No. 8027 is constitutional and valid Ordinance No. 8027 is not unfair, oppressive or confiscatory which amounts to taking without compensation
The tests of a valid ordinance are well established. For an ordinance to be valid, it must not only be within the According to the oil companies, Ordinance No. 8027 is unfair and oppressive as it does not only regulate but also
corporate powers of the LGU to enact and be passed according to the procedure prescribed by law, it must also absolutely prohibits them from conducting operations in the City of Manila. However, the oil companies are not
conform to the following substantive requirements: (1) must not contravene the Constitution or any statute; (2) must prohibited from doing business in other appropriate zones in Manila. The City of Manila merely exercised its power
not be unfair or oppressive; (3) must not be partial or discriminatory; (4) must not prohibit but may regulate trade; (5) to regulate the businesses and industries in the zones it established.
must be general and consistent with public policy and (6) must not be unreasonable. There is no showing that the
Ordinance is unconstitutional. The oil companies also argue that the ordinance is unfair and oppressive because they have invested billions of
pesos in the depot, and the forced closure will result in huge losses in income and tremendous costs in constructing
The City of Manila has the power to enact Ordinance No. 8027 new facilities. This argument has no merit. In the exercise of police power, there is a limitation on or restriction of
Ordinance No. 8027 was passed by the Sangguniang Panlungsod of Manila in the exercise of its police power. property interests to promote public welfare which involves no compensable taking. Compensation is necessary only
Police power is the plenary power vested in the legislature to make statutes and ordinances to promote the health, when the statements power of eminent domain is exercised. In eminent domain, property is appropriated and
applied to some public purpose. Property condemned under the exercise of police power, on the other hand, is
noxious or intended for a noxious or forbidden purpose and, consequently, is not compensable. The restriction Ordinance No. 8027 is not invalid for failure to comply with RA 7924 and EO 72
imposed to protect lives, public health and safety from danger is not a taking. It is merely the prohibition or The oil companies argue that zoning ordinances of LGUs are required to be submitted to the Metropolitan Manila
abatement of a noxious use which interferes with paramount rights of the public. In the regulation of the use of the Development Authority (MMDA) for review and if found to be in compliance with its metropolitan physical framework
property, nobody else acquires the use or interest therein, hence there is no compensable taking. plan and regulations, it shall endorse the same to the Housing and Land Use Regulatory Board (HLURB). Their
basis is Section 3 (e) of RA 7924 and Section 1 of E.O. 72. They argue that because Ordinance No. 8027 did not go
In this case, the properties of the oil companies and other businesses situated in the affected area remain theirs. through this review process, it is invalid.
Only their use is restricted although they can be applied to other profitable uses permitted in the commercial zone.
The argument is flawed. RA 7942 does not give MMDA the authority to review land use plans and zoning ordinances
Ordinance No. 8027 is not partial and discriminatory of cities and municipalities. This was only found in its implementing rules which made a reference to EO 72. EO 72
The oil companies take the position that the ordinance has discriminated against and singled out the Pandacan expressly refers to comprehensive land use plans (CLUPs) only. Ordinance No. 8027 is admittedly not a CLUP nor
Terminals despite the fact that the Pandacan area is congested with buildings and residences that do not comply intended to be one. Instead, it is a very specific ordinance which reclassified the land use of a defined area in order
with the National Building Code, Fire Code and Health and Sanitation Code. to prevent the massive effects of a possible terrorist attack. It is Ordinance No. 8119 which was explicitly formulated
as the Manila [CLUP] and Zoning Ordinance of 2006. CLUPs are the ordinances which should be submitted to the
An ordinance based on reasonable classification does not violate the constitutional guaranty of the equal protection MMDA for integration in its metropolitan physical framework plan and approved by the HLURB to ensure that they
of the law. The requirements for a valid and reasonable classification are: (1) it must rest on substantial distinctions; conform with national guidelines and policies. Moreover, even assuming that the MMDA review and HLURB
(2) it must be germane to the purpose of the law; (3) it must not be limited to existing conditions only; and (4) it must ratification are necessary, the oil companies did not present any evidence to show that these were not complied
apply equally to all members of the same class. The law may treat and regulate one class differently from another with. In accordance with the presumption of validity in favor of an ordinance, its constitutionality or legality should be
class provided there are real and substantial differences to distinguish one class from another. upheld in the absence of proof showing that the procedure prescribed by law was not observed.
Conclusion
Here, there is a reasonable classification. What the ordinance seeks to prevent is a catastrophic devastation that will
result from a terrorist attack. Unlike the depot, the surrounding community is not a high-value terrorist target. Any Essentially, the oil companies are fighting for their right to property. They allege that they stand to lose billions of
damage caused by fire or explosion occurring in those areas would be nothing compared to the damage caused by pesos if forced to relocate. However, based on the hierarchy of constitutionally protected rights, the right to life
a fire or explosion in the depot itself. Accordingly, there is a substantial distinction. The enactment of the ordinance enjoys precedence over the right to property. The reason is obvious: life is irreplaceable, property is not. When the
which provides for the cessation of the operations of these terminals removes the threat they pose. Therefore it is state or LGU’s exercise of police power clashes with a few individual’s right to property, the former should prevail.
germane to the purpose of the ordinance. The classification is not limited to the conditions existing when the
ordinance was enacted but to future conditions as well. Finally, the ordinance is applicable to all businesses and Both law and jurisprudence support the constitutionality and validity of Ordinance No. 8027. Without a doubt, there
industries in the area it delineated. are no impediments to its enforcement and implementation. Any delay is unfair to the inhabitants of the City of
Manila and its leaders who have categorically expressed their desire for the relocation of the terminals. Their power
Ordinance No. 8027 is not inconsistent with RA 7638 and RA 8479 to chart and control their own destiny and preserve their lives and safety should not be curtailed by the intervenors
The oil companies and the DOE assert that Ordinance No. 8027 is unconstitutional because it contravenes RA 7638 warnings of doomsday scenarios and threats of economic disorder if the ordinance is enforced.
(DOE Act of 1992) and RA 8479 (Downstream Oil Industry Deregulation Law of 1998).
Just the same, the Court noted that it is not about to provoke a crisis by ordering the immediate relocation of the
It is true that ordinances should not contravene existing statutes enacted by Congress. However, a brief survey of Pandacan Terminals out of its present site. The enforcement of a decision, especially one with far-reaching
decisions where the police power measure of the LGU clashed with national laws shows that the common dominator consequences, should always be within the bounds of reason, in accordance with a comprehensive and well-
is that the national laws were clearly and expressly in conflict with the ordinances/resolutions of the LGUs. The coordinated plan, and within a time-frame that complies with the letter and spirit of our resolution. To this end, the oil
inconsistencies were so patent that there was no room for doubt. This is not the case here. The laws cited merely companies have no choice but to obey the law.
gave DOE general powers to establish and administer programs for the exploration, transportation, marketing,
distribution, utilization, conservation, stockpiling, and storage of energy resources and to encourage certain
practices in the [oil] industry which serve the public interest and are intended to achieve efficiency and cost
reduction, ensure continuous supply of petroleum products. These powers can be exercised without emasculating
the LGUs of the powers granted them. When these ambiguous powers are pitted against the unequivocal power of
the LGU to enact police power and zoning ordinances for the general welfare of its constituents, it is not difficult to
rule in favor of the latter. Considering that the powers of the DOE regarding the Pandacan Terminals are not
categorical, the doubt must be resolved in favor of the City of Manila.

The principle of local autonomy is enshrined in and zealously protected under the Constitution. An entire article
(Article X) of the Constitution has been devoted to guaranteeing and promoting the autonomy of LGUs. The LGC
was specially promulgated by Congress to ensure the autonomy of local governments as mandated by the
Constitution. There is no showing how the laws relied upon by the oil companies and DOE stripped the City of
Manila of its power to enact ordinances in the exercise of its police power and to reclassify the land uses within its
jurisdiction.

The DOE cannot exercise the power of control over LGUs

Another reason that militates against the DOE’s assertions is that Section 4 of Article X of the Constitution confines
the President’s power over LGUs to one of general supervision. Consequently, the Chief Executive or his or her alter
egos, cannot exercise the power of control over them. The President and his or her alter egos, the department
heads, cannot interfere with the activities of local governments, so long as they act within the scope of their
authority. Accordingly, the DOE cannot substitute its own discretion for the discretion exercised by the sanggunian of
the City of Manila. In local affairs, the wisdom of local officials must prevail as long as they are acting within the
parameters of the Constitution and the law.