MUNICIPALITY OF PARAAQUE v. V.M.

REALTY CORPORATION A local government unit (LGU), like the Municipality of Paraaque, cannot authorize an expropriation of private property through a mere resolution of its lawmaking body. The Local Government Code expressly and clearly requires an ordinance or a local law for the purpose. A resolution that merely expresses the sentiment or opinion of the Municipal Council will not suffice. FACTS: 1. Pursuant to Sangguniang Bayan Resolution No. 93-95, Series of 1993, the Municipality of Paraaque filed on September 20, 1993, a 7 Complaint for expropriation against Private Respondent V.M. Realty Corporation over two parcels of land (Lots 2-A-2 and 2-B-1 of Subdivision Plan Psd-17917), with a combined area of about 10,000 square meters, located at Wakas, San Dionisio, Paraaque, Metro Manila, and covered by Torrens Certificate of Title No. 48700. Allegedly, the complaint was filed "for the purpose of alleviating the living conditions of the underprivileged by providing homes for the homeless through a socialized housing project." 2. Parenthetically, it was also for this stated purpose that petitioner, pursuant 9 to its Sangguniang Bayan Resolution No. 577, Series of 1991, previously made an offer to enter into a negotiated sale of the property with private respondent, which the latter did not accept. 3. Regional Trial Court of Makati, Branch 134, issued an Order authorizing petitioner to take possession of the subject property upon deposit with its clerk of court of an amount equivalent to 15 percent of its fair market value based on its current tax declaration. 4. Private respondent filed its Answer containing affirmative defenses and a 13 counterclaim, alleging in the main that (a) the complaint failed to state a cause of action because it was filed pursuant to a resolution and not to an ordinance as required by RA 7160 (the Local Government Code); 16 5. Thereafter, the trial court issued its August 9, 1994 Resolution nullifying its February 4, 1994 Order and dismissing the case. 6. Petitioner's motions for reconsideration and transfer of venue were denied by the trial court. Petitioner then appealed to Respondent Court (CA) 7. Court of Appeals affirmed in toto the trial court's Decision. 8. Petitioner elevated the case to the SC raising the ff. issue:
6

RULING: We are not convinced by petitioner's insistence that the terms "resolution" and "ordinance" are synonymous. A municipal ordinance is different from a resolution. An ordinance is a law, but a resolution is merely a declaration of the 32 sentiment or opinion of a lawmaking body on a specific matter. An ordinance possesses a general and permanent character, but a resolution is temporary in nature. Additionally, the two are enacted differently a third reading is necessary for an ordinance, but not for a resolution, unless decided otherwise by a majority of 33 all the Sanggunian members. The power of eminent domain is lodged in the legislative branch of government, which may delegate the exercise thereof to LGUs, other public entities and public 25 utilities. An LGU may therefore exercise the power to expropriate private property only when authorized by Congress and subject to the latter's control and restraints, imposed "through the law conferring the power or in other legislations." 26 In this case, Section 19 of RA 7160, which delegates to LGUs the power of eminent domain, also lays down the parameters for its exercise. It provides as follows:
Sec. 19. Eminent Domain. A local government unit may, through its chief executive and acting pursuant to an ordinance, exercise the power of eminent domain for public use, or purpose, or welfare for the benefit of the poor and the landless, upon payment of just compensation, pursuant to the provisions of the Constitution and pertinent laws: Provided, however, That the power of eminent domain may not be exercised unless a valid and definite offer has been previously made to the owner, and such offer was not accepted: Provided, further, That the local government unit may immediately take possession of the property upon the filing of the expropriation proceedings and upon making a deposit with the proper court of at least fifteen percent (15%) of the fair market value of the property based on the current tax declaration of the property to be expropriated: Provided, finally, That, the amount to be paid for the expropriated property shall be determined by the proper court, based on the fair market value at the time of the taking of the property .

HELD: The State or its authorized agent may still subsequently exercise its right to expropriate the same property, once all legal requirements are complied with. To rule otherwise will not only improperly diminish the power of eminent domain, but also clearly defeat social justice. WHEREFORE, the petition is hereby DENIED without prejudice to petitioner's proper exercise of its power of eminent domain over subject property.

ISSUE WON a resolution duly approved by the municipal council has the same force and effect of an ordinance and will not deprive an expropriation case of a valid cause of action.

ESTANISLAO ALFONSO v. PASAY CITY This is a case where a registered owner of a parcel of land has lost possession way back in 1925 because it was taken by a municipal corporation (Municipality of Pasay) for road purposes. It was never paid for, and so the ownership thereof remained in the name of the registered owner. FACTS: 1. Lot No. 4368 containing an area of 719.92 sq. meters. situated in Pasay City is covered by transfer certificate of title No. 1057 (30999) in the name of plaintiff Estanislao Alfonso. 2. In 1925, the then Municipality of Pasay extended Park Avenue, to public street southward and the extension passed through lot 4368 so that said lot was thereby converted into a park of Park Avenue extension. 3. In converting lot No. 4368 as part of Park Avenue extension, no expropriation proceedings was instituted by the then municipality of Pasay and neither was herein plaintiff paid any compensation for the lot. 4. Since 1925 to the present the lot was continually used as a part of Park Avenue extension. 5. Because of the failure of the municipality of Pasay or its successor defendant to return the same when demanded to do so by plaintiff, the latter filed the present action on July 20, 1954 to recover either the possession of the parcel or its value. 6. In 1958, CFI dismissed the complaint on the ground of laches and prescription. 7. Estanislao Alfonso appeals the Decision to the SC. ISSUES: 1. WON Pasay acquired said land without the proper expropriation proceedings, i.e., through prescription. 2. What is the Fair Market Value of the property in question? RULING: 1. The City of Pasay or its predecessor, Municipality of Pasay, did not and could not acquire it thru prescription. In the present case, Alfonso up to now the owner of the land in question, Lot No. 4368 of the Cadastral Survey of Pasay, being registered land. As registered owner, he could bring an action to recover possession at any time because possession is one of the attributes of ownership of land. However, said restoration of possession by the City of Pasay is neither convenient nor feasible because it is now and has been used for road purposes. So, the only relief available is for the City of Pasay to make due compensation, which it could and should have done years ago since 1925.

2. As to the value of the property, although the plaintiff claims the present market value thereof, the rule is that to determine due compensation for lands appropriated by the Government, the basis should be the price or value at the time it was taken from the owner and appropriated by the Government. According to the stipulation of facts, the value of the land in 1925 was P1.25 per square meter. So, for the area of 719.92 square meters, the value will be said area multiplied by P1.25.

PHILIPPINE PETROLEUM CORPORATION, petitioner, vs. MUNICIPALITY OF PILILLA, RIZAL, Represented by MAYOR NICOMEDES F. PATENIA, respondent. This is a petition for certiorari seeking to annul and set aside the decision of RTC Tanay, Rizal in a Civil Case upholding the legality of the taxes, fees and charges being imposed in Pililla under Municipal Tax Ordinance No. 1 and directing the herein petitioner to pay the amount of said taxes, fees and charges due the respondent. FACTS: 1. Philippine Petroleum Corporation (PPC for short) is a business enterprise engaged in the manufacture of lubricated oil basestock which is a petroleum product, with its refinery plant situated at Malaya, Pililla, Rizal, conducting its business activities within the territorial jurisdiction of the Municipality of Pililla, Rizal. 2. Under Section 142 of the National Internal Revenue Code of 1939, manufactured oils and other fuels are subject to specific tax. 3. On June 28, 1973, PD 231, otherwise known as the Local Tax Code was issued by former President Ferdinand E. Marcos governing the exercise by provinces, cities, municipalities and barrios of their taxing and other revenue-raising powers. 4. Sections 19 and 19 (a) thereof, provide among others, that the municipality may impose taxes on business, except on those for which fixed taxes are provided on manufacturers, importers or producers of any article of commerce of whatever kind or nature, including brewers, distillers, rectifiers, repackers, and compounders of liquors, distilled spirits and/or wines in accordance with the schedule listed therein. 5. Respondent Municipality of Pililla, Rizal, through Municipal Council Resolution No. 25, S-1974 enacted Municipal Tax Ordinance No. 1, S1974 otherwise known as "The Pililla Tax Code of 1974" 6. Sections 9 and 10 of the said ordinance imposed a tax on business, except for those for which fixed taxes are provided in the Local Tax Code. 7. The Secretary of Finance issued two (2) Provincial Circulars directing LGU all provincial, city and municipal treasurers to refrain from collecting any local tax imposed in old or new tax ordinances in the business of manufacturing, wholesaling, retailing, or dealing in petroleum products subject to the specific tax under the National Internal Revenue Code. 8. On March 30, 1974, PD 426 was issued amending certain provisions of P.D. 231 but retaining Sections 19 and 19 (a) with adjusted rates; no exemptions were given to manufacturers, wholesalers, retailers, or dealers in petroleum products.

9. The questioned Municipal Tax Ordinance No. 1 was reviewed and approved by the Provincial Treasurer but was not implemented and/or enforced by the Municipality of Pililla because of its having been suspended in view of Provincial Circulars. 10. Enforcing the provisions of the above-mentioned ordinance, the respondent filed a complaint on April 4, 1986 against PPC for the collection of the business tax from 1979 to 1986; storage permit fees from 1975 to 1986; mayor's permit and sanitary inspection fees from 1975 to 1984. 11. The trial court rendered a decision against the petitioner. PPC moved for reconsideration of the decision, but this was denied by the lower court, hence, the instant petition. ISSUE: The crucial issue in this case is whether or not petitioner PPC whose oil products are subject to specific tax under the NIRC, is still liable to pay (a) tax on business and (b) storage fees, considering PC 6-77; and mayor's permit and sanitary inspection fee unto the respondent Municipality of Pililla, Rizal, based on Municipal Ordinance No. 1. RULING: a. P.D. No. 426 amending the Local Tax Code is deemed to have repealed Provincial Circular Nos. 26-73 and 26 A-73 issued by the Secretary of Finance when Sections 19 and 19 (a), were carried over into P.D. No. 426 and no exemptions were given to manufacturers, wholesalers, retailers, or dealers in petroleum products. PPC should pay! The exercise by local governments of the power to tax is ordained by the present Constitution. To allow the continuous effectivity of the prohibition set forth in PC No. 26-73 (1) would be tantamount to restricting their power to tax by mere administrative issuances. Under Section 5, Article X of the 1987 Constitution, only guidelines and limitations that may be established by Congress can define and limit such power of local governments. Thus:
Each local government unit shall have the power to create its own sources of revenues and to levy taxes, fees, and charges subject to such guidelines and limitations as the Congress may provide, consistent with the basic policy of local autonomy . . .

b. Provincial Circular No. 6-77 enjoining all city and municipal treasurers to refrain from collecting the so-called storage fee on flammable or combustible materials imposed in the local tax ordinance of their respective locality frees petitioner PPC from the payment of storage permit fee. PPC is exempt!

c.

Section 10 (z) (13) of Pililla's Municipal Tax Ordinance No. 1 prescribing a permit fee is a permit fee allowed under Section 36 of the amended Code. d. A municipal mayor who is an executive officer may not waive payment of mayors permit; it is tantamount to a grant of a tax exemption which is essentially a legislative prerogative. HELD: The Municipality of Pililla can therefore enforce the collection of the tax on business of petitioner PPC due from 1976 to 1986, and NOT the tax that had accrued prior to 1976.

ATTORNEYS HUMBERTO BASCO, EDILBERTO BALCE, SOCRATES MARANAN AND LORENZO SANCHEZ,petitioners, vs. PHILIPPINE AMUSEMENTS AND GAMING CORPORATION (PAGCOR) FACTS: 1. Petitioners filed the instant petition seeking to annul the Philippine Amusement and Gaming Corporation (PAGCOR) Charter PD 1869, because it is allegedly contrary to morals, public policy and order, and because A. It constitutes a waiver of a right prejudicial to a third person with a right recognized by law. It waived the Manila City government's right to impose taxes and license fees, which is recognized by law; B. For the same reason stated in the immediately preceding paragraph, the law has intruded into the local government's right to impose local taxes and license fees. This, in contravention of the constitutionally enshrined principle of local autonomy; Petitioners contend that P.D. 1869 constitutes a waiver of the right of the City of Manila to impose taxes and legal fees; that the exemption clause in P.D. 1869 is violative of the principle of local autonomy. They must be referring to Section 13 par. (2) of P.D. 1869 which exempts PAGCOR, as the franchise holder from paying any "tax of any kind or form, income or otherwise, as well as fees, charges or levies of whatever nature, whether National or Local." ISSUE: WON THE EXEMPTION CLAUSE IN P.D. 1869 IS VIOLATIVE OF THE PRINCIPLE OF LOCAL AUTONOMY RULING: Their contention stated hereinabove is without merit for the following reasons: (a) The City of Manila, being a mere Municipal corporation has no inherent right to impose taxes (b) b) The Charter of the City of Manila is subject to control by Congress. (c) (c) The City of Manila's power to impose license fees on gambling, has long been revoked. As early as 1975, the power of local governments to regulate gambling thru the grant of "franchise, licenses or permits" was withdrawn by P.D. No. 771 and was vested exclusively on the National Government (d) (d) Local governments have no power to tax instrumentalities of the National Government. PAGCOR is a government owned or controlled corporation with an original charter, PD 1869.

(e) Petitioners also argue that the Local Autonomy Clause of the Constitution will be violated by P.D. 1869. This is a pointless argument. Article X of the 1987 Constitution (on Local Autonomy) provides:
Sec. 5. Each local government unit shall have the power to create its own source of revenue and to levy taxes, fees, and other charges subject to such guidelines and limitation as the congress may provide, consistent with the basic policy on local autonomy. Such taxes, fees and charges shall accrue exclusively to the local government.

NOTES: Gambling in all its forms, unless allowed by law, is generally prohibited. But the prohibition of gambling does not mean that the Government cannot regulate it in the exercise of its police power. The concept of police power is well-established in this jurisdiction. It has been defined as the "state authority to enact legislation that may interfere with personal liberty or property in order to promote the general welfare."

What was the reason behind the enactment of P.D. 1869? P.D. 1869 was enacted pursuant to the policy of the government to "regulate and centralize thru an appropriate institution all games of chance authorized by existing franchise or permitted by law" (1st whereas clause, PD 1869). As was subsequently proved, regulating and centralizing gambling operations in one corporate entity the PAGCOR, was beneficial not just to the Government but to society in general. It is a reliable source of much needed revenue for the cash strapped Government. It provided funds for social impact projects and subjected gambling to "close scrutiny, regulation, supervision and control of the Government" (4th Whereas Clause, PD 1869). With the creation of PAGCOR and the direct intervention of the Government, the evil practices and corruptions that go with gambling will be minimized if not totally eradicated. Public welfare, then, lies at the bottom of the enactment of PD 1896.

PATALINGHUG V. CA
FACTS:
1. On November 17, 1982, the Sangguniang Panlungsod of Davao City enacted Ordinance No. 363, series of 1982 otherwise known as the "Expanded Zoning Ordinance of Davao City," Section 8 of which states:
Sec. 8. USE REGULATIONS IN C-2 DISTRICTS (Shaded light red in the Expanded Zoning Map) AC-2 District shall be dominantly for commercial and compatible industrial uses as provided hereunder: xxx xxx xxx 3.1 Funeral Parlors/Memorial Homes with adequate off street parking space (see parking standards of P.D. 1096) and provided that they shall be established not less than 50 meters from any residential structures, churches and other institutional buildings .

Asiaten who actually devotes it to his laundry business with machinery thereon. 3. Private respondent's suit is premature as they failed to exhaust the administrative remedies provided by Ordinance No. 363.

8. 9.

Hence, private respondents appealed to the Court of Appeals CA reversed the lower court and disagreed with its determination that Tepoot's building was commercial and that although it was used by Mr. Tepoot's lessee for laundry business, it was a residential lot as reflected in the tax declaration, thus paving the way for the application of Ordinance No. 363.

ISSUE:
Won CA erred in concluding that the Tepoot building adjacent to petitioner's
funeral parlor is RESIDENTIAL SIMPLY BECAUSE IT WAS ALLEGEDLY DECLARED AS SUCH FOR TAXATION PURPOSES, in complete disregard of Ordinance No. 363 (The Expanded Zoning Ordinance of Davao City) declaring the subject area as dominantly for commercial and compatible industrial uses.

2.

Upon approval and certification of zoning compliance by Zoning

Administrator, petitioner Patalinghug was issued a Building Permit for the construction of a funeral parlor at Cabaguio Avenue, Agdao, Davao City.

3.

Several residents of Barangay Agdao, Davao City complained that the construction of petitioner's funeral parlor violated Ordinance No. 363, since it was allegedly situated within a 50-meter radius from the Iglesia ni Kristo Chapel and several residential structures. The Sangguniang Panlungsod conducted an investigation and found that "the nearest residential structure, owned by Wilfred G. Tepoot is only 8 inches to the south. Notwithstanding the findings of the Sangguniang Panlungsod, petitioner continued to construct his funeral parlor which was finished on November 3, 1987. Consequently, private respondents filed on September 6, 1988 a case for the declaration of nullity of a building permit with preliminary prohibitory and mandatory injunction and/or restraining order with the trial court. 2 After conducting its own ocular inspection on March 30, 1989, the lower court, in its order dated July 6, 1989, dismissed the complaint based on the following findings: 3
1. that the residential building owned by Cribillo and Iglesia ni Kristo chapel are 63.25 meters and 55.95 meters away, respectively from the funeral parlor. Although the residential building owned by certain Mr. Tepoot is adjacent to the funeral parlor, and is only separated therefrom by a concrete fence, said residential building is being rented by a certain Mr.

4. 5. 6.

RULING:
We reverse the Appellate Court and reinstate the ruling of the lower court It is our considered view that a tax declaration is not conclusive of the nature of the property for zoning purposes. A property may have been declared by its owner as residential for real estate taxation purposes but it may well be within a commercial zone. A discrepancy may thus exist in the determination of the nature of property for real estate taxation purposes vis-a-vis the determination of a property for zoning purposes. The trial court's determination that Mr. Tepoot's building is commercial and, therefore, Sec. 8 is inapplicable, is strengthened by the fact that the Sangguniang Panlungsod has declared the questioned area as commercial or C-2. Consequently, even if Tepoot's building was declared for taxation purposes as residential, once a local government has reclassified an area as commercial,that determination for zoning purposes must prevail. The declaration of the said area as a commercial zone thru a municipal ordinance is an exercise of police power to promote the good order and general welfare of the people in the locality.

7.

2.

PILAPIL V. CA and RTC

Under the applicable law in this case, BP 337 (The Local Government Code), the Sangguniang Bayan, the legislative body of the municipality, 43 had the power to adopt zoning and subdivision ordinances or regulations subject to the provisions of existing laws, and to provide for the construction, improvement, repair and maintenance of municipal streets, avenues, alleys, sidewalks, bridges, parks and other public places, regulate the use thereof and prohibit the construction or placing of obstacles or encroachments on them 44 Section 10, Chapter 2, Title One, Book I of said Code provided: 45
Sec. 10. Closure of roads. A local government unit may likewise, through its head acting pursuant to a resolution of its Sangguniang and in accordance with existing law and the provisions of this Code, close any barangay, municipal, city or provincial road, street, alley, park or square. No such way or place or any part thereof shall be closed without indemnifying any person prejudiced thereby. A property thus withdrawn from public use may be used or conveyed for any purpose for which other real property belonging to the local unit concerned might be lawfully used or conveyed.

4. In the early part of July of 1981, the Colomidas "tried to improve the road of "camino vecinal", for the convenience of the public," but the Pilapils harassed and threatened them with "bodily harm from making said improvement." The Pilapils also threatened to fence off the camino vecinal.
11

5. Thus, on 16 July 1981, the Colomidas filed against the Pilapils a petition for injunction and damages with a prayer for a writ of preliminary mandatory and/or prohibitory injunction with the Regional Trial Court of Cebu.

12

6. On the other hand, on 29 July 1981, the Pilapils filed against the Colomidas an action for damages in the Municipal Circuit Trial Court (MCTC) of Liloan-Compostela, Cebu15 7. During trial on the merits in Civil Case No. R-20732, the Colomidas presented the following witnesses: Gorgonio Colomida, Jr. himself, Sesenado Longakit and Florentino Pepito. They also offered in evidence documentary exhibits. the more relevant and material of which are (1) Resolution No. 106 of the Municipal Council of Liloan passed on 18 August 1973 and entitled "Authorizing the Residents of Bahak, Poblacion, Liloan to Repair and Improve a Camino Vecinal in their Sitio" 17 and (2) a sketch 18 prepared by witness Sesenando Longakit purportedly showing that the camino vecinal traverses the property of the Pilapils. Both Longakit and Pepito testified on the said camino vecinal, insisting that it traverses the property of the Pilapils. 8. Upon the other hand, the Pilapils presented the following as their witnesses: Roman Sungahid, Engineer Epifanio Jordan (the Municipal Planning and Development Coordinator of the Municipality of Liloan) and petitioner Socrates Pilapil. Engineer Jordan testified on Liloan's Urban Land Use Plan 19 or zoning map which he prepared upon the instruction of then Municipal Mayor Cesar Butai and which was approved by the Sangguniang Bayan of Liloan. Per the said plan, the camino vecinal in sitio Bahak does not traverse, but runs along the side 20 of the Pilapil property. 21 9. On 8 February 1988, relying on the credibility of the 2 witnesses, the trial court rendered its decision 22 in favor of the Colomidas. CA affirmed this decision by the RTC.

FACTS
1. The petitioners-spouses (hereinafter, Pilapils) own a 6,598 square meter 3 parcel of land situated in Bahak, Poblacion, Liloan, Cebu and covered by Tax Declaration No. 15067. 4 The said parcel corresponds to Lot No. 320 and Lot 323 5 and that portion covered by Plan Psu-07005007, 6 duly approved by the Regional Director of Region VII of the Bureau of Lands. The land formerly belonged to Marcelo Pilapil, the grandfather of petitioner Socrates Pilapil.

2. Private respondents (hereinafter, Colomidas), who are residents of

Mandaue City, purchased on 4 June 1981 from Esteria vda. de Ceniza and the heirs of Leoncio Ceniza a parcel of land, also located at Bahak, Poblacion, Liloan, Cebu, covered by Tax Declaration No. 19764 and described as follows:
. . . Boundaries: N-Gregorio Longakit; S-Gregorio Longakit; E-Manglar; W-Gregorio Longkit; Area: 10,910 sq. meters; Kind of land: Pasture cocal and wood; Improvements: 20 cocos prod.; Assessed Value: P1,360.00; Present Possessors: The herein petitioners. 7

3. This parcel of land, per Plan Psu-07-002763, 8 was found to contain only 6,448 square meters. It is now covered by Free Patent No. (VII-1)15448, issued on 23 March 1982, and Original Certificate of Title No. P20588 9 of the Register of Deeds of the Province of Cebu issued in the name of the Colomidas and is located around 70 meters from the National Road. The Colomidas claim that they had acquired from Sesenando Longkit a road right of way which leads towards the National Road; this road right of way, however, ends at that portion of the property of the Pilapils where a camino vicinal (local road) exists all the way to the said National Road. 10

ISSUE:
WON the trial court erred in basing its decision on the testimony of the two witnesses instead of the SB-approved zoning map presented by the MPDC

RULING:
A camino vecinal is a municipal road. It is also property for public use. Pursuant, therefore, to the above powers of a local government unit, the Municipality of Liloan had the unassailable authority to (a) prepare and adopt a land use map, (b) promulgate a zoning ordinance which may consider, among other things, the municipal roads to be constructed, maintained, improved or repaired and (c) close any municipal road. It is beyond dispute that the establishment, closure or abandonment of the camino vecinal is the sole prerogative of the Municipality of Liloan. No private party can interfere with such a right. Thus,even if We are to agree with both the trial court and public respondent that Longakit and Pepito were telling the truth, the decision of the Municipality of Liloan with respect to the said camino vecinal in sitio Bahak must prevail. It is thus pointless to concentrate on the testimonies of both witnesses since the same have, for all intents and purposes, become irrelevant. what invested the zoning map with legal effect was neither the authority of the person who ordered its preparation nor the authority of the person who actually prepared it, but its approval by the Sangguniang Bayan. Furthermore, with or without the order of the Mayor or Sangguniang Bayan, Engineer Jordan, as the then Municipal Planning and Development Coordinator, had the authority to prepare the plan and admit it to the Sangguniang Bayan for approval. Among his functions under the governing law at the time was to formulate an integrated economic, social, physical and other development objectives and policies for the consideration and approval of the sangguniang bayan and the municipal mayor, and prepare municipal comprehensive plans and other development planning 50 document. Thus, even if he had not been instructed by anyone to prepare the map, he could nevertheless, on his own initiative and by virtue of his functions, make one. RTC and CA Decision SET ASIDE. Petition for review under Rule 45 of the Rules of Court GRANTED.