Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. 182574 September 28, 2010
THE PROVINCE OF NEGROS OCCIDENTAL, represented by its Governor ISIDRO P.
ZAYCO, Petitioner,
vs.
THE COMMISSIONERS, COMMISSION ON AUDIT; THE DIRECTOR, CLUSTER IV-
VISAYAS; THE REGIONAL CLUSTER DIRECTORS; and THE PROVINCIAL AUDITOR,
NEGROS OCCIDENTAL, Respondents.
D E C I S I O N
CARPIO, J.:
The Case
Before the Court is a petition for certiorari
1
assailing Decision No. 2006-044
2
dated 14
July 2006 and Decision No. 2008-010
3
dated 30 January 2008 of the Commission on
Audit (COA) disallowing premium payment for the hospitalization and health care
insurance benefits of 1,949 officials and employees of the Province of Negros Occidental.
The Facts
On 21 December 1994, the Sangguniang Panlalawigan of Negros Occidental passed
Resolution No. 720-A
4
allocating P4,000,000 of its retained earnings for the
hospitalization and health care insurance benefits of 1,949 officials and employees of the
province. After a public bidding, the Committee on Awards granted the insurance
coverage to Philam Care Health System Incorporated (Philam Care).
Petitioner Province of Negros Occidental, represented by its then Governor Rafael L.
Coscolluela, and Philam Care entered into a Group Health Care Agreement involving a
total payment of P3,760,000 representing the insurance premiums of its officials and
employees. The total premium amount was paid on 25 January 1996.
On 23 January 1997, after a post-audit investigation, the Provincial Auditor issued Notice
of Suspension No. 97-001-101
5
suspending the premium payment because of lack of
approval from the Office of the President (OP) as provided under Administrative Order
No. 103
6
(AO 103) dated 14 January 1994. The Provincial Auditor explained that the
premium payment for health care benefits violated Republic Act No. 6758 (RA
6758),
7
otherwise known as the Salary Standardization Law.
Petitioner complied with the directive post-facto and sent a letter-request dated 12
January 1999 to the OP. In a Memorandum dated 26 January 1999,
8
then President
Joseph E. Estrada directed the COA to lift the suspension but only in the amount
of P100,000. The Provincial Auditor ignored the directive of the President and instead
issued Notice of Disallowance No. 99-005-101(96)
9
dated 10 September 1999 stating
similar grounds as mentioned in Notice of Suspension No. 97-001-101.
Petitioner appealed the disallowance to the COA. In a Decision dated 14 July 2006, the
COA affirmed the Provincial Auditors Notice of Disallowance dated 10 September
1999.
10
The COA ruled that under AO 103, no government entity, including a local
government unit, is exempt from securing prior approval from the President granting
additional benefits to its personnel. This is in conformity with the policy of
standardization of compensation laid down in RA 6758. The COA added that Section
468(a)(1)(viii)
11
of Republic Act No. 7160 (RA 7160) or the Local Government Code of
1991 relied upon by petitioner does not stand on its own but has to be harmonized with
Section 12
12
of RA 6758.
Further, the COA stated that the insurance benefits from Philam Care, a private insurance
company, was a duplication of the benefits provided to employees under the Medicare
program which is mandated by law. Being merely a creation of a local legislative body,
the provincial health care program should not contravene but instead be consistent with
national laws enacted by Congress from where local legislative bodies draw their
authority.
The COA held the following persons liable: (1) all the 1,949 officials and employees of the
province who benefited from the hospitalization and health care insurance benefits with
regard to their proportionate shares; (2) former Governor Rafael L. Coscolluela, being
the person who signed the contract on behalf of petitioner as well as the person who
approved the disbursement voucher; and (3) the Sangguniang Panlalawigan members
who passed Resolution No. 720-A. The COA did not hold Philam Care and Provincial
Accountant Merly P. Fortu liable for the disallowed disbursement. The COA explained
that it was unjust to require Philam Care to refund the amount received for services it
had duly rendered since insurance law prohibits the refund of premiums after risks had
already attached to the policy contract. As for the Provincial Accountant, the COA
declared that the Sangguniang Panlalawigan resolution was sufficient basis for the
accountant to sign the disbursement voucher since there were adequate funds available
for the purpose. However, being one of the officials who benefited from the subject
disallowance, the inclusion of the accountants name in the persons liable was proper
with regard to her proportionate share of the premium.
The dispositive portion of the COAs 14 July 2006 decision states:
WHEREFORE, premises considered, and finding no substantial ground or cogent reason
to disturb the subject disallowance, the instant appeal is hereby denied for lack of merit.
Accordingly, Notice of Disallowance No. 99-005-101(96) dated 10 September 1999 in the
total amount of P3,760,000.00 representing the hospitalization and insurance benefits of
the officials and employees of the Province of Negros Occidental is hereby AFFIRMED
and the refund thereof is hereby ordered.
The Cluster Director, Cluster IV-Visayas, COA Regional Office No. VII, Cebu City shall
ensure the proper implementation of this decision.
13

Petitioner filed a Motion for Reconsideration dated 23 October 2006 which the COA
denied in a Resolution dated 30 January 2008.
Hence, the instant petition.
The Issue
The main issue is whether COA committed grave abuse of discretion in affirming the
disallowance of P3,760,000 for premium paid for the hospitalization and health care
insurance benefits granted by the Province of Negros Occidental to its 1,949 officials and
employees.
The Courts Ruling
Petitioner insists that the payment of the insurance premium for the health benefits of its
officers and employees was not unlawful and improper since it was paid from an
allocation of its retained earnings pursuant to a valid appropriation ordinance. Petitioner
states that such enactment was a clear exercise of its express powers under the principle
of local fiscal autonomy which includes the power of Local Government Units (LGUs) to
allocate their resources in accordance with their own priorities. Petitioner adds that
while it is true that LGUs are only agents of the national government and local autonomy
simply means decentralization, it is equally true that an LGU has fiscal control over its
own revenues derived solely from its own tax base.
Respondents, on the other hand, maintain that although LGUs are afforded local fiscal
autonomy, LGUs are still bound by RA 6758 and their actions are subject to the scrutiny
of the Department of Budget and Management (DBM) and applicable auditing rules and
regulations enforced by the COA. Respondents add that the grant of additional
compensation, like the hospitalization and health care insurance benefits in the present
case, must have prior Presidential approval to conform with the state policy on salary
standardization for government workers.
AO 103 took effect on 14 January 1994 or eleven months before the Sangguniang
Panlalawigan of the Province of Negros Occidental passed Resolution No. 720-A. The
main purpose of AO 103 is to prevent discontentment, dissatisfaction and
demoralization among government personnel, national or local, who do not receive, or
who receive less, productivity incentive benefits or other forms of allowances or
benefits. This is clear in the Whereas Clauses of AO 103 which state:
WHEREAS, the faithful implementation of statutes, including the Administrative Code of
1987 and all laws governing all forms of additional compensation and personnel benefits
is a Constitutional prerogative vested in the President of the Philippines under Section
17, Article VII of the 1987 Constitution;
WHEREAS, the Constitutional prerogative includes the determination of the rates, the
timing and schedule of payment, and final authority to commit limited resources of
government for the payment of personal incentives, cash awards, productivity bonus,
and other forms of additional compensation and fringe benefits;
WHEREAS, the unilateral and uncoordinated grant of productivity incentive
benefits in the past gave rise to discontentment, dissatisfaction and
demoralization among government personnel who have received less or have not
received at all such benefits;
NOW, THEREFORE, I, FIDEL V. RAMOS, President of the Republic of the Philippines, by
virtue of the powers vested in me by law and in order to forestall further
demoralization of government personnel do hereby direct: x x x (Emphasis supplied)
Sections 1 and 2 of AO 103 state:
SECTION 1. All agencies of the National Government including government-owned
and/or -controlled corporations and government financial institutions, and local
government units, are hereby authorized to grant productivity incentive benefit in the
maximum amount of TWO THOUSAND PESOS (P2,000.00) each to their permanent and
full-time temporary and casual employees, including contractual personnel with
employment in the nature of a regular employee, who have rendered at least one (1)
year of service in the Government as of December 31, 1993.
SECTION 2. All heads of government offices/agencies, including government owned
and/or controlled corporations, as well as their respective governing boards are
hereby enjoined and prohibited from authorizing/granting Productivity Incentive
Benefits or any and all forms of allowances/benefits without prior approval and
authorization via Administrative Order by the Office of the President. Henceforth, anyone
found violating any of the mandates in this Order, including all officials/agency found to
have taken part thereof, shall be accordingly and severely dealt with in accordance with
the applicable provisions of existing administrative and penal laws.
Consequently, all administrative authorizations to grant any form of allowances/benefits
and all forms of additional compensation usually paid outside of the prescribed basic
salary under R.A. 6758, the Salary Standardization Law, that are inconsistent with the
legislated policy on the matter or are not covered by any legislative action are hereby
revoked. (Emphasis supplied)
It is clear from Section 1 of AO 103 that the President authorized all agencies of the
national government as well as LGUs to grant the maximum amount of P2,000
productivity incentive benefit to each employee who has rendered at least one year of
service as of 31 December 1993. In Section 2, the President enjoined all heads of
government offices and agencies from granting productivity incentive benefits or any
and all similar forms of allowances and benefits without the Presidents prior approval.
In the present case, petitioner, through an approved Sangguniang
Panlalawigan resolution, granted and released the disbursement for the hospitalization
and health care insurance benefits of the provinces officials and employees without any
prior approval from the President. The COA disallowed the premium payment for such
benefits since petitioner disregarded AO 103 and RA 6758.
We disagree with the COA. From a close reading of the provisions of AO 103, petitioner
did not violate the rule of prior approval from the President since Section 2 states that
the prohibition applies only to "government offices/agencies, including government-
owned and/or controlled corporations, as well as their respective governing boards."
Nowhere is it indicated in Section 2 that the prohibition also applies to LGUs. The
requirement then of prior approval from the President under AO 103 is applicable only
to departments, bureaus, offices and government-owned and controlled corporations
under the Executive branch. In other words, AO 103 must be observed by government
offices under the Presidents control as mandated by Section 17, Article VII of the
Constitution which states:
Section 17. The President shall have control of all executive departments, bureaus and
offices. He shall ensure that the laws be faithfully executed. (Emphasis supplied)1awphi1
Being an LGU, petitioner is merely under the Presidents general supervision pursuant to
Section 4, Article X of the Constitution:
Sec. 4. The President of the Philippines shall exercise general supervision over
local governments.Provinces with respect to component cities and municipalities, and
cities and municipalities with respect to component barangays shall ensure that the acts
of their component units are within the scope of their prescribed powers and functions.
(Emphasis supplied)
The Presidents power of general supervision means the power of a superior officer to
see to it that subordinates perform their functions according to law.
14
This is
distinguished from the Presidents power of control which is the power to alter or
modify or set aside what a subordinate officer had done in the performance of his duties
and to substitute the judgment of the President over that of the subordinate
officer.
15
The power of control gives the President the power to revise or reverse the acts
or decisions of a subordinate officer involving the exercise of discretion.
16

Since LGUs are subject only to the power of general supervision of the President, the
Presidents authority is limited to seeing to it that rules are followed and laws are
faithfully executed. The President may only point out that rules have not been followed
but the President cannot lay down the rules, neither does he have the discretion to
modify or replace the rules. Thus, the grant of additional compensation like
hospitalization and health care insurance benefits in the present case does not need the
approval of the President to be valid.
Also, while it is true that LGUs are still bound by RA 6758, the COA did not clearly
establish that the medical care benefits given by the government at the time under
Presidential Decree No. 1519
17
were sufficient to cover the needs of government
employees especially those employed by LGUs.
Petitioner correctly relied on the Civil Service Commissions (CSC) Memorandum
Circular No. 33 (CSC MC No. 33), series of 1997, issued on 22 December 1997 which
provided the policy framework for working conditions at the workplace. In this circular,
the CSC pursuant to CSC Resolution No. 97-4684 dated 18 December 1997 took note of
the inadequate policy on basic health and safety conditions of work experienced by
government personnel. Thus, under CSC MC No. 33, all government offices including
LGUs were directed to provide a health program for government employees which
included hospitalization services and annual mental, medical-physical examinations.
Later, CSC MC No. 33 was further reiterated in Administrative Order No. 402
18
(AO 402)
which took effect on 2 June 1998. Sections 1, 2, and 4 of AO 402 state:
Section 1. Establishment of the Annual Medical Check-up Program. An annual medical
check-up for government of officials and employees is hereby authorized to be
established starting this year, in the meantime that this benefit is not yet integrated
under the National Health Insurance Program being administered by the Philippine
Health Insurance Corporation (PHIC).
Section 2. Coverage. x x x Local Government Units are also encouraged to establish
a similar program for their personnel.
Section 4. Funding. x x x Local Government Units, which may establish a similar medical
program for their personnel, shall utilize local funds for the purpose. (Emphasis
supplied)
The CSC, through CSC MC No. 33, as well as the President, through AO 402, recognized
the deficiency of the state of health care and medical services implemented at the time.
Republic Act No. 7875
19
or the National Health Insurance Act of 1995 instituting a
National Health Insurance Program (NHIP) for all Filipinos was only approved on 14
February 1995 or about two months after petitioners Sangguniang Panlalawigan passed
Resolution No. 720-A. Even with the establishment of the NHIP, AO 402 was still issued
three years later addressing a primary concern that basic health services under the NHIP
either are still inadequate or have not reached geographic areas like that of petitioner.
Thus, consistent with the state policy of local autonomy as guaranteed by the 1987
Constitution, under Section 25, Article II
20
and Section 2, Article X,
21
and the Local
Government Code of 1991,
22
we declare that the grant and release of the hospitalization
and health care insurance benefits given to petitioners officials and employees were
validly enacted through an ordinance passed by petitioners Sangguniang Panlalawigan.
In sum, since petitioners grant and release of the questioned disbursement without the
Presidents approval did not violate the Presidents directive in AO 103, the COA then
gravely abused its discretion in applying AO 103 to disallow the premium payment for
the hospitalization and health care insurance benefits of petitioners officials and
employees.
WHEREFORE, we GRANT the petition. We REVERSE AND SET ASIDE Decision No.
2006-044 dated 14 July 2006 and Decision No. 2008-010 dated 30 January 2008 of the
Commission on Audit.
SO ORDERED.

FIRST DIVISION

[G.R. No. 131481, March 16 : 2011]

BUKLOD NANG MAGBUBUKID SA LUPAING RAMOS, INC., PETITIONER, VS. E. M.
RAMOS AND SONS, INC., RESPONDENT.

[G.R. No. 131624]

DEPARTMENT OF AGRARIAN REFORM, PETITIONER, VS. E. M. RAMOS AND SONS,
INC., RESPONDENT.

D E C I S I O N

LEONARDO-DE CASTRO, J.:

Before the Court are consolidated Petitions for Review on Certiorari, under Rule 45 of
the 1997 Rules of Civil Procedure, filed by the Buklod ng Maqbubukid Sa Lupaing Ramos,
Inc. (Buklod) and the Department of Agrarian Regorm (DAR), assailing the
Decision
[1]
dated March 26, 1997 and the Resolution
[2]
dated November 24, 1997 of the
Court of Appeals in CA G.R. SP No. 40950.

The Court of Appeals declared the parcels of land owned by E.M. Ramos and Sons, Inc.
(EMRASON), located in Barangay Langkaan, Dasmarias, Cavite (subject property),
exempt from the coverage of the Comprehensive Agrarian Reform Program (CARP), thus,
nullifying and setting aside the Decision
[3]
dated February 7, 1996 and Resolution
[4]
dated
May 14, 1996 of the Office of hte President (OP) in O.P. Case No. 5461.

Quoted hereunder are the facts of the case as found by the Court of Appeals:
At the core of the controversy are several parcels of unirrigated land (303.38545
hectares) which from part of a larger expanse with an area of 372 hectares situated at
Barangay Langkaan, Dasmarias, Cavite. Originally owned by the MAnila Golf and
Country Club, he property was aquired by the [herein repondent EMRASON] in 1965 for
the purpose of developing the same into a residential subdivision known as "Traveller's
Life Homes".

Sometime in 1971, the Municipal Council of Dasmarias, Cavite, acting pursuant to
Republic Act (R.A.) No. 2264, otherwise known as the "Loval Autonomy Act", enacteed
Municipal Ordinance No. 1, hereinafter referred to as Ordinance No. 1, enitled "An
Ordinance Providing Subdivision Regulation and Providing Penalties for Violation
Thereof."

In May, 1972, [respondent] E.M. Ramos and Sons, Inc., applied for an authority to convert
and development its aforementioned 372-hectare property into a residential
subdivision, ataching to the apllication detailed development plans and development
proposals from Bancom Development Corporation and San Miguel Corporation. Acting
thereon the Municipal Council of Dasmarias, Cavite passed on July 9, 1972 Municipal
Ordinance No. 29-A (Ordinance "No. 29-A, for brevity), approving [EMRASON's]
application. Ordinance No. 29-A pertinently reads:
"Resolved, as it is hereby resolved, to approve the application for subdivision containing an
area of Three Hundred Seventy-Two (372) Hectares situated in Barrios Bocal and
Langkaan, named as Traveller's Life Homes.

Resolved that the Municipal Ordinance regarding subdivision regulations existing in this
municipality shall be strictly followed by the subdivision ".

Subsequently, [EMRASON] paid the fees, dues and licenses needed to proceed with
property development.

It appears, however, that the actual implementation of the subdivision project suffered
delay owing to the confluence of events. Among these was the fact that the property in
question was then mortgaged to, and the titles thereto were in the possession of, the
Overseas Bank of Manila, which during the period material was under liquidation.

On June 15. 1988, Republic Act No. 6657, otherwise known as the Comprehensive
Agrarian Reform Law or CARL, took effect, ushering in a new process of land
classification, acquisition and distribution.

On September 23, 1988, the Municipal Mayor of Dasmarias, Cavite addressed a letter
to [EMRASON], stating in part, as follows:
"In reply to your letter of June 2, 1988, we wish to clarify that the Municipality
of Dasmarias, Cavite, has approved the development of your property situated in Barrios
Bukal and Langkaan, Dasmarias, Cavite, with a total area of 3 72 hectares, more or less,
into residential, industrial, commercial and golf course project.

This conversion conforms with the approved Development Plan of the Municipality
of Dasmarias Cavite ".

Then came the Aquino government's plan to convert the tenanted neighboring property
of the National Development Company (NDC) into an industrial estate to be managed
through a joint venture scheme by NDC and the Marubeni Corporation. Part of the
overall conversion package called for providing the tenant-farmers, opting to remain at
the NDC property, with three (3) hectares each. However, the size of the NDC property
turned out to be insufficient for both the demands of the proposed industrial project as
well as the government's commitment to the tenant-farmers. To address this
commitment, the Department of Agrarian Reform (DAR) was thus tasked with acquiring
additional lands from the nearby areas. The DAR earmarked for this purpose the subject
property of [EMRASON].

On August 29, 1990, then OAR Secretary Benjamin Leong sent out the first of four
batches of notices of acquisition, each of which drew protest from [EMRASON]. All told,
these notices covered 303.38545 hectares of land situated at Barangay Langkaan,
Dasmarias, Cavite owned by [EMRASON].

In the meantime, [EMRASON] filed with the Department of Agrarian Reform Adjudication
Board (DARAB), Region IV, Pasig, Metro Manila, separate petitions to nullify the first
three sets of the above notices. Collectively docketed as DARAB Case No. IV-Ca-0084-92,
these petitions were subsequently referred to the Office of the Regional Director, Region
IV, which had jurisdiction thereon. In his referral action, the Provincial Agrarian
Adjudicator directed the DAR Region IV, through its Operations Division, to conduct a
hearing and/or investigation lo determine whether or not the subject property is
covered by the Comprehensive Agrarian Reform Program (CARP) and, if not, to cancel
the notices of acquisition.

Forthwith, the DAR regional office conducted an on-site inspection of the subject
property.

In the course of the hearing, during which [EMRASON] offered Exhibits :'A" to "UU-2" as
documentary evidence, [EMRASON] received another set of notices of acquisition. As lo
be expected, [EMRASON] again protested.

On August 28, 1992, the Legal Division of DAR, Region IV, through Hearing Officer Victor
Baguilat, rendered a decision declaring as null and void all the notices of acquisitions,
observing that the property covered thereby is, pursuant to Department of Justice (DOJ)
Opinion No. 44, series of 1990, exempt from CARP. The dispositive portion of the
decision reads, as follows;
''WHEREFORE, in the light of the foregoing x x x, considering that the notices of
acquisition dated August 29, 1990 relative to the 39 hectares partly covered by Transfer
Certificate of Title No. T-19298; notices of acquisition all dated April 3, 1991 relative to
the 131.41975 hectares partly covered by Transfer Certificates of Title Nos. x x x; notices
of acquisition all dated August 28, 1991 relative lo the 56.9201 hectares covered by
Transfer Certificates of Title Nos. x x x; and notices of acquisition all dated May 15, 1992
relative to the 76.0456 covered by Transfer Certificates of Title Nos. xx, all located at
Barangay Langkaan, Dasmarias, Cavite and owned by petitioner EM RAMOS and SONS,
INC. are null and void on the ground that the subject properties are exempted from CARP
coverage pursuant to DOJ Opinion No. 44, Series of 1990, therefore, the aforesaid notices
of acquisition be cancelled and revoked. "

The DOJ Opinion adverted to, rendered by then Justice Secretary Franklin Drilon,
clarified that lands already converted to non-agricultural uses before June 15, 1988 were
no longer covered by CARP.

On September 3, 1992, the Region IV DAR Regional Director motu propio elevated the
case to the Office of the Agrarian Reform Secretary, it being his view that Hearing Officer
Baguilat's decision ran contrary to the department's official position "to pursue the
coverage of the same properties and its eventual distribution to qualified beneficiaries
particularly the Langkaan farmers in fulfillment of the commitment of the government to
deliver to them the balance of thirty-nine hectares x x x".

On January 6, 1993, the herein respondent DAR Secretary Ernesto Garilao [(DAR
Secretary Garilao)] issued an order, the decretal portion of which partly reads:
"WHEREFORE, in the interest of law and justice, an order is hereby rendered:

1. Affirming the Notices of Acquisition dated August 29, 1990, April 3, 1991, August 28,
1991 and May 15, 1992 covering 303.38545 hectares of the property owned by the E.M.
RAMOS & SONS, INC, located at Barangay Langkaan, Dasmarinas, Cavite x x x;

x x x x

3. Directing the OAR field officials concerned to pursue (he coverage under RA 6657 of the
properties of E.M. Ramos & Sons, Inc. for which subject Notices of Acquisition had been
issued.

SO ORDERED".

Its motion for reconsideration of the aforesaid order having been denied by the [DAR
Secretary Garilao] in his subsequent order of January 6, 1993, [EMRASON] appealed to
the Office of the President where the recourse was docketed as O.P. Case No. 5461.

On February 7, 1996, the Office of the President, through herein respondent Deputy
Executive Secretary Renato C. Corona [(Deputy Executive Secretary Corona)], rendered
the herein assailed decision x x x, dismissing [EMRASON's] appeal on the strength of the
following observation:
"To recapitulate, this Office holds that [EMRASON's] property has remained
AGRICULTURAL in classification and therefore falls within the coverage of the CARP, on the
basis of the following:br>
1. [EMRASON] failed to comply with the mandatory requirements and conditions of
Municipal Ordinance Nos. 1 and 29-A, specifically, among others, the need for
approval of the National Planning Commission through the Highway District
Engineer, and the Bureau of Lands before final submission to the Municipal
Council and Municipal Mayor;
2. [EMRASON] failed to comply with Administrative Order No. 152, dated December
16, 1968, and
3. The certification of the Human Settlements Regulatory Commission
(HSRC) in 1981 and the Housing and Land Use Regulatory Board (HLRB) in
1992 that the property of [EMRASON] is agricultural".

Undaunted, [EMRASON] interposed a motion for reconsideration, followed later by
another motion whereunder it invited attention to legal doctrines involving land
conversion recently enunciated by no less than the Office of the President itself.

On May 14, 1996, the [Deputy Executive Secretary Corona] came out with his second
challenged issuance denying [EMRASON's] aforementioned motion for reconsideration x
x x.
[5]


From the denial of its Motion for Reconsideration by the OP, EMRASON filed a Petition
for Review with the Court of Appeals, which was docketed as CA-G.R. SP No. 40950.

On July 3, 1996, the Court of Appeals issued a Temporary Restraining Order
(TRO),
[6]
which enjoined then DAR Secretary Ernesto Garilao and Deputy Executive
Secretary Renato C. Corona from implementing the OP Decision of February 7, 1996 and
Resolution of May 14, 1996 until further orders from the court. On September 17, 1996,
the appellate court issued a Resolution
[8]
granting the prayer of EMRASON for the
issuance of a writ of preliminary injunction. The writ of preliminary injunction
[9]
was
actually issued on September 30, 1996 after EMRASON posted the required bond of
P500,000,00.

The DAR Secretary filed a Motion for Reconsideration of the Resolution dated September
17, 1996 of the Court of Appeals, with the prayer that the writ of preliminary injunction
already issued be lifted, recalled and/or dissolved.

At this juncture, the DAR had already prepared Certificates of Land Ownership Award
(CLOAs) to distribute the subject property to farmer-beneficiaries. However, the writ of
preliminary injunction issued by the Court of Appeals enjoined the release of the CLOAs.
Buklod, on behalf of the alleged 300 farmer-beneficiaries of the subject property, filed a
Manifestation and Omnibus Motion, wherein it moved that it be allowed to intervene as
an indispensable party in CA-G.R. SP No. 40950; that the writ of preliminary injunction
be immediately dissolved, having been issued in violation of Section 55 of the CARL; and
that the Petition for Review of EMRASON be dismissed since the appropriate remedy
should have been a petition for certiorari before the Supreme Court.

On March 26, 1997, the Court of Appeals promulgated its assailed Decision.

The Court of Appeals allowed the intervention of Buklod because -the latter's
participation was "not being in any way prejudicial to the interest of the original parties,
nor will such intervention change the factual legal complexion of the case." The appellate
court, however, affirmed the propriety of the remedy availed by EMRASON given that
under Section 5 of Supreme Court Revised Administrative Circular No. 1-95 dated May
16, 1995, appeals from judgments or final orders of the OP or the DAR under the CARL
shall be taken to the Court of Appeals, through a verified petition for review; and that
under Section 3 of the same Administrative Circular, such a petition for review may raise
questions of facts, law, or mixed questions of facts and law.

Ultimately, the Court of Appeals ruled in favor of EMRASON because the subject property
was already converted/classified as residential by the Municipality of Dasmarias prior
to the effectivity of the CARL. The appellate court reasoned:
For one, whether or not the Municipality of Dasmarias, Cavite had in place in the early
seventies a general subdivision plan is to us of no moment. The absence of such general
plan at that time cannot be taken, for the nonce, against the [herein respondent
EMRASON]. To our mind, the more weighty consideration is the accomplished fact that
the municipality, conformably with its statutory-conferred local autonomy, had passed a
subdivision measure, I.e., Ordinance No. 1, and had approved in line thereto, through the
medium of Ordinance No. 29-A, [EMRASON's] application for subdivision, or with like
effect approved the conversion/classification of the lands in dispute as residential.
Significantly, the Municipal Mayor of Dasmarias, Cavite, in his letter of September 23,
1988 to [EMRASON], clarified that such conversion conforms with the approved
development plan of the municipality.

For another, the requirement prescribed by the cited Section 16[a] of Ordinance No. 1
relates to the approval in the first instance by the National Planning Commission of the
final plat of the scheme of the subdivision, not the conversion from agricultural to
residential itself. As [EMRASON] aptly puts it:
"x x x the final plat or final plan, map or chart of the subdivision is not a condition sine qua
non for the conversion x x x as the conversion was already done by the Municipal Council of
Dasmarias, Cavite. Municipal Ordinance NO. 29-A merely required that the final plat, or
final plan x x x of the subdivision be done in conformity with Municipal Ordinance No. 1, the
same to be followed by (he subdivision itself. [EMRASON] therefore did not have to
undertake the immediate actual development of the subject parcel of lands as the same had
already been converted and declared residential by law. x x x " (Petition, pp. 17 and 18).

[EMRASON's] pose has the merit of logic. As may be noted, Ordinance No. 29-A contained
two (2) resolutory portions, each interrelated to, but nonetheless independent of, the
other. The first resolution, reading -
"Resolved, as it is hereby resolved, to approve the application for subdivision containing an
area of Three Hundred Seventy-Two (372) Hectares situated in Barrios Bocal and
Langkaan, named as Travellers Life Homes "

approved the application for subdivision or the conversion of the 372-hectare area into
residential, while the second, reading -
"Resolved that the Municipal Ordinance regarding subdivision regulations existing in this
municipality shall be strictly followed by the subdivision "

provides that the subdivision owner/developer shall follow subdivision regulations, it
will be noted further that the second resolution already referred to the [EMRASON's]
property as "'subdivision", suggesting that the Municipal Council already considered as
of that moment [EMRASON's] area to be for residential use.

Another requirement which [EMRASON] allegedly failed to comply with is found in
Administrative Order (A.O.) No. 152, series of 1968, which pertinently provides -
"1. All Municipal Boards or City Councils, and all Municipal Councils in cities and
municipalities in which a subdivision ordinance is in force, shall submit three copies of
every proposed subdivision plan for which approval is sought together with the subdivision
ordinance, to the National Planning Commission for comment and recommendation ".

This Court is at a loss to understand how [EMRASON] could be expected to heed a
directive addressed to local government legislative bodies. From a perusal of the title of
A.O. No. 152, it is at once obvious from whom it exacts compliance with its command,
thus: "REQUIRING THE MUNICIPAL BOARDS OR CITY COUNCILS AND MUNICIPAL
COUNCILS TO SUBMIT PROPOSED ORDINANCES AND SUBDIVISION PLANS TO THE
NATIONAL PLANNING COMMISSION FOR COMMENT AND RECOMMENDATION, BEFORE
TAKING ACTION ON THE SAME, AND TO FORWARD A COPY OF THEIR APPROVED
SUBDIVISION ORDINANCES TO THE SAID COMMISSION".

To be sure, [EMRASON] cannot be made to bear the consequences for the non-
compliance, if this be the case, by the Municipal Council of Dasmarinas, Cavite with what
A.O. 152 required. A converse proposition would be antithetical to the sporting idea of
fair play.
[11]


As for the other requirements which EMRASON purportedly failed to comply with, the
Court of Appeals held that these became obligatory only after the subject property was
already converted to non-agricultural, to wit:
Foregoing considered, this Court holds that everything needed to validly effect the
conversion of the disputed area to residential had been accomplished. The only
conceivable step yet to be taken relates to the obtention of a conversion order from the
DAR, or its predecessor, the Ministry of Agrarian Reform (MAR.) under its rather
intricate procedure established under Memorandum Circular No. 11-79. But then, this
omission can hardly prejudice the [herein respondent EMRASON] for the DAR7MAR
guidelines were promulgated only in 1979, at which time the conversion of [EMRASON's]
property was already a fait accompli.

Like the conversion procedure set up under Memorandum Circular No. 11-79, the
revised methodology under the CARL cannot also be made to apply retroactively to lands
duly converted/classified as residential under the aegis of the Local Autonomy Act. For,
as a rule, a statute is not intended to affect transactions which occurred before it
becomes operational (Tolentino, COMMENTARIES AND JURISPRUDENCE ON THE
CIVIL CODE, Vol. I, 1983 ed.; p. 23). And as the landmark case of Natalia Realty, Inc. vs.
Department of Agrarian Reform, 225 SCRA 278, teaches:
"Indeed, lands not devoted to agricultural activity are outside the coverage of CARL.
These include lands previously converted to non-agricultural uses prior to the effectively
of CARL by government agencies other than respondent DAR x x x.

x x x x

Since the NATALIA lands were converted prior to 15 June 1988, respondent DAR is
hound by such conversion. It was therefore error to include the underdeveloped
portions x x x within the coverage of CARL".

It may be so, as the assailed decision stated, that in Natalia the lands therein involved
received a locational clearance from the Housing and Land Use Regulatory Board (HLRB,
formerly the Human Settlement Regulatory Commission [HSRC], as residential or
commercial, a factor [EMRASON] cannot assert in its favor. This dissimilarity, however,
hardly provides a compelling justification not to apply the lessons of Natalia. This is
because the property involved in this case, unlike that in Natalia, underwent
classification/conversion before the creation on May 13, 1976 of the HSRC, then known
as the Human Settlements Regulatory Commission (P.D. No. 933). Furthermore, what is
recognized as the HSRC's authority to classify and to approve subdivisions and
comprehensive land use development plans of local governments devolved on that
agency only upon its reorganization on February 7, 1981, with the issuance of Executive
Order No. 648 known as the Charter of the Human Settlements Regulatory
Commission. Section 5 of the same executive order invested the HSRC with the above
classifying and approving authority. In fine, the property of [EMRASON] went into the
process of conversion at the time when the intervention thereon of the HSRC, which was
even then non-existent, was unnecessary. Shortly before the creation of the HSRC, it
would appear that to provincial, city, or municipal councils/boards, as the case may be,
belong the prerogative, albeit perhaps not exclusive, to classify private lands within their
respective territorial jurisdiction and approve their conversion from agricultural to
residential or other non-agricultural uses. To paraphrase the holding in Patalinghug vs.
Court of Appeals, 229 SCRA 554, once a local government has, pursuant to its police
power, reclassified an area as residential, that determination ought to prevail and must
be respected.
[12]


The Court of Appeals further observed that the subject property has never been devoted
to any agricultural activity and is, in fact, more suitable for non-agricultural purposes,
thus:
It is worthy to note that the CARL defines "agricultural lands" as "lands devqtedto
agricultural activity x x x and not classified as mineral, forest, residential, commercial or
industrial lands" (Sec. 3[c]). Guided by this definition, it is clear that [herein respondent
EMRASON's] area does not fall under the category of agricultural lands. For, let alone the
reality that the property is not devoted to some agricultural activity, being in fact
unirrigated, and, as implied in the decision of the DAR Hearing Officer Victor Baguilat,
without duly instituted tenants, the same had been effectively classified as
residential. The bare circumstance of its not being actually developed as subdivision or
that it is underdeveloped would not alter the conclusion. For, according to Natalia, what
actually determines the applicability of the CARL to a given piece of land is its previous
classification and not its current use or stages of development as non-agricultural
property.

As a pragmatic consideration, the disputed area, in terms of its location in relation to
existing commercial/industrial sites and its major economic use, is more suitable for
purposes other than agriculture. In this connection, this Court notes that the property is
situated at the heart of the CALABARZON, and, as Annex "C" of the petition demonstrates,
lies adjacent to huge industrial/commercial complexes. The San Miguel-Monterey meat
plant, the NDC-Marubeni complex and the Reynolds Aluminum plant may be mentioned.
For sure, the Sangguniang Panlalawigan of Cavite, obviously cognizant of the economic
potential of certain areas in the Municipality of Dasmarias has, by Resolution No. 105,
series of 1988. declared defined tracts of lands in the Municipality of Dasmarias as
"industrial-residential-institutional mix."
[13]


As a last point, the Court of Appeals justified its issuance of a writ of preliminary
injunction enjoining the implementation of the OP Decision dated February 7, 1996 and
Resolution dated May 14, 1996, viz:
As a final consideration, we will address the [herein petitioners] OAR Secretary's and
Buklod's joint concern regarding the propriety of the preliminary injunction issued in
this case. They alleged that the issuance is violative of Section 55 of the CARL which
reads:
"SEC. 55. No Restraining Order or Preliminary

Injunction. - No Court in the Philippines shall have jurisdiction to issue any restraining
order or writ of preliminary injunction against the PARC or any of its duly authorized or
designated agencies in any case, dispute, controversy arising from, necessary to, or in
connection with the application, implementation, enforcement, or interpretation of this
Act and other pertinent laws on agrarian reform". (Underscoring added.)

As will be noted, the aforequoted section specifically mentions the Presidential Agrarian
Reform Council (PARC) of which the DAR Secretary is the Vice Chairman, or any of its
duly designated agencies as protected from an injunctive action of any court. These
agencies include the PARC Executive Committee, the PARC Secretariat, which the DAR
Secretary heads, and. on the local level, the different Agrarian Reform Action Committees
(Sees. 41 to 45, R.A. No. 6657).

From the records, there is no indication that the [petitioner] Agrarian Reform
Secretary acted vis-a-vis the present controversy for, or as an agency of, the PARC.
Hence, he cannot rightfully invoke Section 55 of the CARL and avail himself of the
protective mantle afforded by that provision. The PARC, it bears to stress, is a policy-
formulating and coordinating body (Sec. 18. E.O. 229, July 22, 1987) without express
adjudicatory mandate, unlike the DAR Secretary who, as department head, is "vested with
primary jurisdiction to determine and adjudicate agrarian reform matters and shall have
exclusive jurisdiction over all matters involving the implementation of agrarian
reform" (Sec. 50. R.A. 6657). Thus, it is easy lo accept the proposition that the
[petitioner] Agrarian Reform Secretary issued his challenged orders in the exercise of
his quasi-judicial power as department head.
[14]


In the end, the Court of Appeals decreed:
WHEREFORE, the instant petition for review is hereby GRANTED. Accordingly, the
challenged decision dated February 7, 1996 and the resolution of May 14, 1996 of the
Office of the President in O.P. Case No. 5461 are hereby NULLIFIED, VACATED and SET
ASIDE, and the notices of acquisition issued by the Department of Agrarian Reform
covering the 372-hectare property of the [herein respondent EMRASON] at Barangay
Langkaan, Dasmarias, Cavite declared VOID.

The writ of preliminary injunction issued by this Court on September 30, 1996 is hereby
made permanent.
[15]


Buklod and DAR. filed their respective Motions for Reconsideration of the foregoing
Decision but both Motions were denied by the Court of Appeals in a Resolution dated
November 24, 1997.

Aggrieved, Buklod and DAR filed the instant Petitions, which were consolidated by this
Court in a Resolution
[16]
dated August 19, 1998.

In G.R. No. 131481, Buklod raises the following arguments:
1] THE MUNICIPAL ORDINANCE INVOKED BY [EMRASON] AS CONVERSION OF THE
PROPERTY IN QUESTION ENACTED ON JULY 9, 1972 BY THE MUNICIPAL COUNCIL OF
DASMARIAS, CAVITE IS IMPOTENT BECAUSE THE MUNICIPAL ORDINANCE IMPOSED
CONDITIONS WHICH [EMRASON] NEVER COMPLIED. NO COMPLIANCE NO
CONVERSION.

2] AT THE TIME THE ALLEGED ORDINANCE WAS ENACTED, A LAND REFORM LAW
WAS ALREADY IN EFFECT GRANTING SECURITY OF TENURE TO THE FARMERS SO
THAT A LANDOWNER CANNOT ARBITRARILY CONVERT AN AGRICULTURAL LAND
INTO A DIFFERENT CLASSIFICATION WITHOUT COMPLYING WITH LEGAL
REQUIREMENTS (R.A. 3844).

3] A MERE MUNICIPAL ORDINANCE CANNOT NEGATE LAND REFORM RIGHTS
GRANTED TO THE FARMERS BY LEGISLATIVE ENACTMENT UNDER R.A. 3844 AND
SUBSEQUENT LAWS. LAND REFORM LAW BEING A SOCIAL LEGISLATION IS
PARAMOUNT.

4] LAND REFORM IS A CONSTITUTIONAL MANDATE FOR THE BENEFIT OF THE
LANDLESS FARMERS SO THAT THE LAND REFORM LAW SHOULD BE CONSTRUED AND
APPLIED IN ORDER TO ATTAIN THE LEGISLATIVE INTENT OF RELIEVING THE
FARMERS FROM THEIR POVERTY AND BONDAGE. THE COURT OF APPEALS IGNORED
THIS CONSTITUTIONAL MANDATE TO FAVOR THE LANDLORD [EMRASON].

5] THE COURT OF APPEALS ISSUED A RESTRAINING ORDER/INJUNCTION AGAINST
THE CLEAR PROHIBITION IN THE CARL (SEC. 55 RA 6657) AND SO FAR DEPARTED
FROM THE USUAL COURSE OF BY REFUSING TO GRANT THE PETITIONER FARMERS A
HEARING INSPITE OF THE PROCEDURE PRESCRIBED BY RA 7902 (SEC. ]).
[17]


In G.R. No. 131624, the DAR ascribes the following errors on the part of the Court of
Appeals:
I.

THE HONORABLE COURT OF APPEALS ERRED WHEN IT RULED THAT THE
MUNICIPALITY OF DASMARIAS, CAVITE, WAS AUTHORIZED, UNDER THE LOCAL
AUTONOMY ACT, TO CLASSIFY AND/OR RECLASSIFY LANDS CONSIDERING THAT
WHAT WAS CONFERRED THEREUNDER WAS ONLY ZONING AUTHORITY, THUS,
RENDER THE EXERCISE THEREOF BY THE MUNICIPAL COUNCIL OF DASMARIAS,
CAVITE, ULTRA VIRES;
II.

EVEN ASSUMING, IN GRATIA ARGUMENTI, THAT THE AUTHORITY TO CLASSIFY AND
RECLASSIFY LANDS IS POSSESSED BY MUNICIPAL CORPORATIONS, STILL THE
HONORABLE COURT OF APPEALS ERRED WHEN IT CONSIDERED THE ALLEGED
PASSAGE OF ORDINANCE NO. 29-A OF THE MUNICIPAL COUNCIL OF DASMARIAS,
CAVITE, AS A VALID MEASURE RECLASSIFYING SUBJECT AGRICULTURAL LAND TO
NON-AGRICULTURAL USE CONSIDERING THAT THE SAID APPROVAL OF THE
SUBDIVISION, PER LETTER OF THE MUNICIPAL MAYOR, FAILED TO COMPLY WITH
EXISTING RULES AND REGULATIONS ON THE MATTER AND, THEREFORE,
NONCOMPLYING AND INEFFECTUAL; AND
III.

THE HONORABLE COURT OF APPEALS ERRED WHEN IT APPLIED THE RULING OF THE
HONORABLE COURT IN THE NATALIA REALTY CASE DUE TO SUBSTANTIAL
DISSIMILARITY IN FACTUAL SETTING AND MILIEU.
[18]


At the crux of the present controversy is the question of whether the subject property
could be placed under the CARP.

DAR asserts that the subject property could be compulsorily acquired by the State from
EMRASON and distributed to qualified farmer-beneficiaries under the CARP since it was
still agricultural land when the CARL became effective on June 15, 1988. Ordinance Nos.
1 and 29-A, approved by the Municipality of Dasmarias on July 13, 1971 and July 9,
1972, respectively, did not reclassify the subject property from agricultural to non-
agricultural. The power to reclassify lands is an inherent power of the National
Legislature under Section 9 of Commonwealth Act No. 141, otherwise known as the
Public Land Act, as amended, which, absent a specific delegation, could not be exercised
by any local government unit (LGU). The Local Autonomy Act of 1959 - in effect when the
Municipality of Dasmarias approved Ordinance Nos. 1 and 29-A - merely delegated to
cities and municipalities zoning authority, to be understood as the regulation of the uses
of property in accordance with the existing character of the land and structures. It was
only Section 20 of Republic Act No. 7160, otherwise known as the Local Government
Code of 1991, which extended to cities and municipalities limited authority to reclassity
agricultural lands.

DAR also argues that even conceding that cities and municipalities were already
authorized in 1972 to issue an ordinance reclassifying lands from agricultural to non-
agricultural, Ordinance No. 29-A of the Municipality of Dasmarias was not valid since
it failed to comply with Section 3 of the Local Autonomy Act of 1959, Section 16(a) of
Ordinance No. 1 of the Municipality of Dasmarinas, and Administrative Order No. 152
dated December 16, 1968, which all required review and approval of such an ordinance
by the National Planning Commission (NPC). Subsequent developments further
necessitated review and approval of Ordinance No. 29-A by the Human Settlements
Regulatory Commission (HSRC), which later became the Housing and Land Use
Regulatory Board (HLURB).

DAR further avers that the reliance by the Court of Appeals -on Natalia Realty, Inc. v.
Department of Agrarian Reform
[19]
(Natalia Realty case) is misplaced because the lands
involved therein were converted from agricultural to residential use by Presidential
Proclamation No. 1637, issued pursuant to the authority delegated to the President
under Section 71, et seq., of the Public Land Act.
[20]


Buklod adopts the foregoing arguments of DAR. In addition, it submits that prior to
Ordinance Nos. 1 and 29-A, there were already laws implementing agrarian reform,
particularly: (1) Republic Act No. 3844, otherwise known as the Agricultural Land
Reform Code, in effect since August 8, 1963, and subsequently amended by Republic Act
No. 6389 on September 1.0, 1971, after which it became known as the Code of Agrarian
Reforms; and (2) Presidential Decree No. 27, otherwise known as the Tenants
Emancipation Decree, which took effect on November 19, 1972. Agricultural land could
not be converted for the purpose of evading land reform for there were already laws
granting farmer-tenants security of tenure, protection from ejectment without just cause,
and vested rights to the land they work on.

Buklod contends that EMRASON failed to comply with Section 36 of the Code of Agrarian
Reforms, which provided that the conversion of land should be implemented within one
year, otherwise, the conversion is deemed in bad faith. Given the failure of EMRASON to
comply with many other requirements for a valid conversion, the subject property has
remained agricultural. Simply put, no compliance means no conversion. In fact, Buklod
points out, the subject property is still declared as "agricultural" for real estate tax
purposes. Consequently, EMRASON is now estopped from insisting that the subject
property is actually "residential."

Furthermore, Buklod posits that land reform is a constitutional mandate which should be
given paramount consideration. Pursuant to said constitutional mandate, the Legislature
enacted the CARL. It is a basic legal principle that a legislative statute prevails over a
mere municipal ordinance.

Finally, Buklod questions the issuance by the Court of Appeals of a writ of preliminary
injunction enjoining the distribution of the subject property to the farmer-beneficiaries
in violation of Section 55 of the CARL; as well as the refusal of the appellate court to hold
a hearing despite Section 1 of Republic Act No. 7902,
[21]
prescribing the procedure for
reception of evidence before the Court of Appeals. At such a hearing, Buklod intended to
present evidence that the subject property is actually agricultural and that Buklod
members have been working on said property for decades, qualifying them as farmer-
beneficiaries.

EMRASON, on the other hand, echoes the ruling of the Court of Appeals that the subject
property is exempt from CARP because it had already been reclassified as residential
with the approval of Ordinance No. 29-A by the Municipality of Dasmarias on July 9,
1972. EMRASON cites Ortigas & Co., Ltd. Partnership v. Feati Bank and Trust
Co.
[22]
(Ortigas case) where this Court ruled that a municipal council is empowered to
adopt zoning and subdivision ordinances or regulations under Section 3 of the Local
Autonomy Act of 1959.

Still relying on the Ortigas case, EMRASON avows that the Municipality of Dasmarias,
taking into account the conditions prevailing in the area, could validly zone and reclassify
the subject property in the exercise of its police power in order to safeguard the health,
safety, peace, good order, and general welfare of the people in the locality. EMRASON
describes the whole area surrounding the subject property as residential subdivisions
(i.e., Don Gregorio, Metro Gate, Vine Village, and Cityland Greenbreeze 1 and 2
Subdivisions) and industrial estates (i.e., Reynolds Aluminum Philippines, Inc. factory;
NDC-Marubeni industrial complex, San Miguel Corporation-Monterey cattle and piggery
farm and slaughterhouse), traversed by national highways (i.e., Emilio Aguinaldo
National Highway, Trece Martirez, Puerto Azul Road, and Governor's Drive). EMRASON
mentions that on March 25, 1988, theSangguniang Panlalawigan of the Province of
Cavite passed Resolution No. 105 which declared the area where subject property is
located as "industrial-residential-institutional mix."

EMRASON further maintains that Ordinance No. 29-A of the Municipality of Dasmarias
is valid. Ordinance No. 29-A is complete in itself, and there is no more need to comply
with the alleged requisites which DAR and Buklod are insisting upon. EMRASON quotes
from Patalinghug v. Court of Appeals
[23]
(Patalinghug case) that "once a local government
has reclassified an area as commercial, that determination for zoning purposes must
prevail."

EMRASON points out that Ordinance No. 29-A, reclassifying the subject property, was
approved by the Municipality of Dasmarias on July 9, 1972. Executive Order No. 648,
otherwise known as the Charter of the Human Settlements Regulatory Commission
(HSRC Charter) - which conferred upon the HSRC the power and duty to review,
evaluate, and approve or disapprove comprehensive land use and development plans
and zoning ordinances of LGUs - was issued only on February 7, 1981. The exercise by
HSRC of such power could not be applied retroactively to this case without impairing
vested rights of EMRASON. EMRASON disputes as well the absolute necessity of
submitting Ordinance No. 29-A to the NPC for approval. Based on the language of Section
3 of the Local Autonomy Act of 1959, which used the word "may," review by the NPC of
the local planning and zoning ordinances was merely permissive. EMRASON additionally
posits that Ordinance No. 1 of the Municipality of Dasmarias simply required approval
by the NPC of the final plat or plan, map, or chart of the subdivision, and not of the
rcclassification and/or conversion by the Municipality of the subject property from
agricultural to residential. As for Administrative Order No. 152 dated December 16,
1968, it was directed to and should have been complied with by the city and municipal
boards and councils. Thus, EMRASON should not be made to suffer for the non-
compliance by the Municipal Council of Dasmarinas with said administrative order.

EMRASON likewise reasons that since the subject property was already reclassified as
residential with the mere approval of Ordinance No. 29-A by the Municipality of
Dasmarinas, then EMRASON did not have to immediately undertake actual development
of the subject property. Reclassification and/or conversion of a parcel of land are
different from the implementation of the conversion.

EMRASOK is resolute in its stance that the Court of Appeals correctly applied the Natalia
Realty case to the present case since both have similar facts; the only difference being
that the former involves a presidential fiat while the latter concerns a legislative fiat.

EMRASON denies that the Buklod members are farmer-tenants of the subject property.
The subject property has no farmer-tenants because, as the Court of Appeals observed,
the property is unirrigated and not devoted to any agricultural activity. The subject
property was placed under the CARP only to accommodate the farmer-tenants of the
NDC property who were displaced by the NDC-Marubeni Industrial Project. Moreover,
the Buklod members are still undergoing a screening process before the DAR-Region IV,
and are yet to be declared as qualified farmer-beneficiaries of the subject property.
Hence, Buklod members tailed to establish they already have vested right over the
subject property.

EMRASON urges the Court not to consider issues belatedly raised by Buklod, It may be
recalled that Buklod intervened in CA-G.R. SP No. 40950 just before the Court of Appeals
rendered judgment in said case. When the appellate court promulgated its Decision on
March 26, 1997 favoring EMRASON, Buklod filed a Motion for Reconsideration of said
judgment, to which EMRASON, in turn, filed a Comment and Opposition. In its Reply to
the aforementioned Comment and Opposition of EMRASON, Buklod raised new factual
matters, specifically, that: (1) EMRASON has not even subdivided the title to the subject
property 27 years after its purported reclassification/conversion; (2) EMRASON never
obtained a development permit nor mayor's permit to operate a business in Dasmarinas;
and (3) the farmer-tenants represented by Buklod have continuously cultivated the
subject property. There was no cogent or valid reason for the Court oi' Appeals to allow
Buklod to present evidence to substantiate the foregoing allegations. The DAR Region IV
Hearing Officer already conducted extensive hearings during which the farmers were
duly represented. Likewise, Buklod raises for the first time in its Petition before this
Court the argument that the Tenants Emancipation Decree prescribes a procedure for
conversion which EMRASON failed to comply with.

Lastly, EMRASON defends the issuance by the Court of Appeals of a writ of preliminary
injunction in CA-G.R. SP No. 40950. Section 55 of the CARL is inapplicable to the case at
bar because said provision only prohibits the issuance by a court of a TRO or writ of
preliminary injunction "against the PARC or any ol^ its duly authorized or designated
agencies." As the Court of Appeals declared, the PARC is a policy-formulating and
coordinating body. There is no indication whatsoever that the DAR Secretary was acting
herein as an agent of the PARC. The DAR Secretary issued the orders of acquisition for
the subject property in the exercise of his quasi-judicial powers as department head.

The Court, after consideration of the issues and arguments in the Petitions at bar, affirms
the Court of Appeals and rules in favor of EMRASON.

CARP coverage limited to agricultural land

Section 4, Chapter II of the CARL, as amended,24 particularly defines the coverage of the
CARP, to wit:
SEC. 4. Scope. - The Comprehensive Agrarian Reform Law of 1988 shall cover, regardless
of tenurial arrangement and commodity produced, all public and private agricultural
lands as provided in Proclamation No. 131 and Executive Order No. 229, including other
lands of the public domain suitable for agriculture: Provided, That landholdings of
landowners with a total area of five (5) hectares and below shall not be covered for
acquisition and distribution to qualified beneficiaries.

More specifically, the following lands are covered by the CARP:

(a) All alienable and disposable lands of the public domain devoted to or suitable for
agriculture. No reclassification of forest or mineral lands to agricultural lands shall be
undertaken after the approval of this Act until Congress, taking into account ecological,
developmental and equity considerations, shall have determined by law, the specific
limits of the public domain;

(b) All lands of the public domain in excess of the specific limits as determined by
Congress in the preceding paragraph;

(c) All other lands owned by the Government devoted to or suitable for agriculture; and

(d) All private lands devoted to or suitable for agriculture regardless of the
agricultural products raised or that can be raised thereon.

A comprehensive inventory system in consonance with the national land use plan shall
be instituted by the Department of Agrarian Reform (DAR), in accordance with the Local
Government Code, for the purpose of properly identifying and classifying farmlands
within one (1) year from effectivity of this /Vet. without prejudice to the implementation
of the land acquisition and distribution." (Emphases supplied.)

Section 3(c), Chapter I of the CARL further narrows down the definition of agricultural
land that is subject to CARP to "land devoted to agricultural activity as defined in this Act
and not classified as mineral, forest, residential, commercial or industrial land."

The CARL took effect on June 15, 1988. To be exempt from the CARP, the subject
property should have already been reclassified as residential prior to said date.

The Local Autonomy Act of 1959

The Local Autonomy Act of 1959, precursor of the Local Government Code of 1991,
provided;
SEC. 3. Additional powers of provincial boards, municipal boards or city councils and
municipal and regularly organized municipal district councils. - x x x

x x x x

Power to adopt zoning and planning ordinances. Any provision of law to the contrary
notwithstanding, Municipal Boards or City Councils in cities, and Municipal Councils in
municipalities are hereby authorized to adopt zoning and subdivision ordinances or
regulations for their respective cities and municipalities subject to the approval of the
City Mayor or Municipal Mayor, as the case may be. Cities and municipalities may,
however, consult the National Planning Commission on matters pertaining to
planning and zoning. (Emphases supplied.)

Pursuant to the foregoing provision, the Municipal Council of Dasmarias
approved Ordinance No. 1on July 13, 1971, which laid down the general subdivision
regulations for the municipality; andResolution No. 29-A on July 9, 1972, which
approved the application for subdivision of the subject property.

The Court observes that the OP, the Court of Appeals, and even the parties themselves
referred to Resolution No. 29-A as an ordinance. Although it may not be its official
designation, calling Resolution No. 29-A as Ordinance No. 29-A is not completely
inaccurate. In the Ortigas & Co. case, the Court found it immaterial that the then
Municipal Council of Mandaluyong declared certain lots as part of the commercial and
industrial zone through a resolution, rather than an ordinance, because:
Section 3 of R.A. No. 2264, otherwise known as the Local Autonomy Act, empowers a
Municipal Council "to adopt zoning and subdivision ordinances or regulations" for the
municipality. Clearly, the law docs not restrict the exercise of the power through an
ordinance. Therefore, granting that Resolution No. 27 is not an ordinance, it certainly is
a regulatory measure within the intendment or ambit of the word
"regulation"under the provision. As a matter oi' fact the same section declares that the
power exists "(A)ny provision of law to the contrary notwithstanding x x
x."
[25]
(Emphases supplied.)

Zoning and reclassification

Section 3(c), Chapter I of the CARL provides that a parcel oi^ land reclassified for non-
agricultural uses prior to June 15, 1988 shall no longer be considered agricultural land
subject to CARP. The Court is now faced with the question of whether Resolution No. 29-
A of the Municipality of Dasmarias datedJuly 9, 1972, which approved the subdivision
of the subject property for residential purposes, had also reclassified the same from
agricultural to residential.

Zoning classification is an exercise by the local government of police power, not the
power of eminent domain. A zoning ordinance is defined as a local city or municipal
legislation which logically arranges, prescribes, defines, and apportions a given political
subdivision into specific land uses as present and future projection of needs.
[26]


The Court gave a more extensive explanation of zoning in Pampanga Bus Company, Inc. v.
Municipality of Tarlac,
[27]
thus:
The appellant argues that Ordinance No. 1 is a zoning ordinance which the Municipal
Council is authorized to adopt. McQuillin in his treaties on Municipal Corporations
(Volume 8, 3rd ed.) says:
Zoning is governmental regulation of the uses of land and buildings according to districts
or zones. It is comprehensive where it is governed by a single plan for the entire
municipality and prevails throughout the municipality in accordance with that plan. It is
partial or limited where it is applicable only to a certain part of the municipality or to
certain uses. Fire limits, height districts and building regulations are forms of partial or
limited zoning or use regulation that are antecedents of modern comprehensive zoning,
(pp. 11-12.)

The term "zoning," ordinarily used with the connotation of comprehensive or general
zoning, refers to governmental regulation of the uses of land and buildings according to
districts or zones. This regulation must and does utilize classification of uses within
districts as well as classification of districts, inasmuch as it manifestly is impossible to
deal specifically with each of the innumerable uses made of land and
buildings. Accordingly, (zoning has been defined as the confining of certain classes of
buildings and uses to certain localities, areas, districts or zones.) It has been stated that
zoning is the regulation by districts of building development and uses of property, and
that the term "zoning" is not only capable of this definition but has acquired a technical
and artificial meaning in accordance therewith. (Zoning is the separation of the
municipality into districts and the regulation of buildings and structures within the
districts so created, in accordance with their construction, and nature and extent of their
use. It is a dedication of districts delimited to particular uses designed to subserve the
general welfare.) Numerous other definitions of zoning more or less in accordance with
these have been given in the cases, (pp. 27-28.)
[28]


According to Section 1(b) of Ordinance No. 1, "[s]ubdivision means the division of a tract
or parcel of land into two or more lots, sites or other divisions for the purpose, whether
immediate or future, o[f| a sale or building development. It includes resubdivision, and
when appropriate to the context, relates to the process of subdividing as to the land of
territory subdivided." Subdivision ordinances or regulations such as Resolution No. 29-A,
in relation to Ordinance No. 1, constitute partial or limited zoning, for they are
applicable to a specific property in the city or municipality to be devoted for a certain
use.

Section 9 of the Public Land Act - cited by the DAR and Buklod as the purported
delegation by the National Legislature of the power to reclassify - is immaterial to the
instant cases. Said provision reads:
SEC. 9. For the purpose of their administration and disposition, the lands of the public
domain alienable or open to disposition shall be classified, according to the use or
purposes to which such lands are destined, as follows:

(a) Agricultural;

(b) Residential, commercial, industrial, or for similar productive purposes;

(c) Educational, charitable, or other similar purposes; and

(d) Reservations for townsites and for public and quasi-public uses.

The President, upon recommendation by the Secretary of Agriculture and Natural
Resources, shall from time to time make the classifications provided for in this section,
and may, at any time and in a similar manner, transfer lands from one class to another.
(Emphasis supplied.)

The power delegated to the President under the aforequoted provision of the Public
Land Act is limited to the classification of lands of the public domain that are
alienable or open to disposition. It finds no application in the present cases for the
simple reason that the subject property involved herein is no longer part of the public
domain. The subject property is already privately owned and accordingly covered by
certificates of title.

The concept that concerns this Court in the instant cases is the reclassification of
agricultural lands. InAlarcon v. Court of Appeals,
[29]
the Court had the occasion to define
and distinguish reclassificationfrom conversion as follows:
Conversion is the act of changing the current use of a piece of agricultural land into some
other use as approved by the Department of Agrarian Reform. Reclassification, on the
other hand, is the act of specifying how agricultural lands shall be utilized for non-
agricultural uses such as residential, industrial, commercial, as embodied in the land use
plan, subject to the requirements and procedure for land use conversion, x x x. (Italics
supplied.)

Reclassification also includes the reversion of non-agricultural lands to agricultural
use.
[31]


Under the present Local Government Code, it is clear that the authority to reclassify
agricultural lands primarily resides in the sanggunian of the city or municipality. Said
provision reads in full:
Sec. 20. Reclassification of Lands. - (a) A city or municipality may, through an ordinance
passed by the sanggunian after conducting public hearing for the purpose,authorize
the reclassification of agricultural lands and provide for the manner of their
utilization or disposition in the following cases: (X) when the land ceases to be
economically feasible and sound for agricultural purposes as determined by the
Department of Agriculture or (2) where the land shall have substantially greater
economic value for residential, commercial, or industrial purposes, as determined by the
sanggunian concerned: Provided, That such reclassification shall be limited to the
following percentage of the total agricultural land area at the time of the passage of the
ordinance:

(1) For highly urbanized and independent component cities, fifteen percent (15%);

(2) For component cities and first to the third class municipalities, ten percent (10%);
and

(3) For fourth to sixth class municipalities, five percent (5%): Provided,
further, That agricultural lands distributed to agrarian reform beneficiaries
pursuant to Republic Act Numbered Sixty-six hundred fifty-seven (R.A. No. 6657),
otherwise known as "The Comprehensive Agrarian Reform Law", shall not be affected by
the said reclassification and the conversion of such lands into other purposes shall be
governed by Section 65 of said Act.

(b) The President may, when public interest so requires and upon recommendation
of the National Economic and Development Authority, authorize a city or municipality to
reclassify lands in excess of the limits set in the next preceding paragraph.

(c) The local government units shall, in conformity with existing laws, continue
toprepare their respective comprehensive land use plans enacted through zoning
ordinances which shall be the primary and dominant bases for the future use of land
resources: Provided, That the requirements for food production, human settlements, and
industrial expansion shall be taken into consideration in the preparation of such plans.

(d) When approval by a national agency is required for reclassification, such approval
shall not be unreasonably withheld. Failure to act on a proper and complete application
for reclassification within three (3) months from receipt of the same shall be deemed as
approval thereof.

(e) Nothing in this Section shall be construed as repealing, amending, or modifying in
any manner the provisions of R.A. No. 6657. (Emphases supplied.)

Prior to the Local Government Code of 1991, the Local Autonomy Act of 1959 was silent
on the authority to reclassify agricultural lands. What the earlier statute expressly
granted to city and municipal boards and councils, under Section 3 thereof, was the
power to adopt zoning and subdivision ordinances and regulations.

DAR and Buklod insist that zoning is merely the regulation of land use based on
the existing characterof the property and the structures thereon; and that zoning is a
lesser power compared to reclassification so that the delegation of the former to the local
government should not be deemed to include the latter.

Such arguments are easily refuted by reference to the definitions of zoning and
reclassification earlier presented herein, which support a more extensive concept of
zoning than that which DAR and BUKLOD assert.

By virtue of a zoning ordinance, the local legislature may arrange, prescribe, define, and
apportion the land within its political jurisdiction into specific uses based not only on
the present, but also on thefuture projection of needs. To limit zoning to the existing
character of the property and the structures thereon would completely negate the power
of the local legislature to plan land use in its city or municipality. Under such
circumstance, zoning would involve no planning at all, only the rubber-stamping by the
local legislature of the current use of the land.

Moreover, according to the definition of reclassification, the specified non-agricultural
use of the land must be embodied in a land use plan, and the land use plan is enacted
through a zoning ordinance. Thus, zoning and
planning ordinances take precedence over reclassification. The reclassification of land
use is dependent on the zoning and land use plan, not the other way around.

It may, therefore, be reasonably presumed that when city and municipal boards and
councils approved an ordinance delineating an area or district in their cities or
municipalities as residential, commercial, or industrial zone, pursuant to the power
granted to them under Section 3 of the Local Autonomy Act of 1959, they were, at the
same time, reclassifying any agricultural lands within the zone for non-agri cultural use;
hence, ensuring the implementation of and compliance with their zoning
ordinances. The logic and practicality behind such a presumption is more evident when
considering the approval by local legislative bodies of subdivision ordinances and
regulations. The approval by city and municipal boards and councils of an application for
subdivision through an ordinance should already be understood to include approval of
the reclassification of the land, covered by said application, from agricultural to the
intended non-agricultural use. Otherwise, the approval of the subdivision application
would serve no practical effect; for as long as the property covered by the application
remains classified as agricultural, it could not be subdivided and developed for non-
agricultural use.

A liberal interpretation of the zoning power of city and municipal boards and councils, as
to include the power to accordingly reclassify the lands within the zones, would be in
accord with the avowed legislative intent behind the Local Autonomy Act of 1959, which
was to increase the autonomy of local governments. Section 12 of the Local Autonomy
Act of 1959 itself laid down rules for interpretation of the said statute:
SEC. 12. Rules for the interpretation of the Local Autonomy Act. -

1. Implied power of a province, a city or municipality shall be liberally construed in its
favor. Any fair and reasonable doubt as to the existence of the power should be
interpreted in favor of the local government and it shall be presumed to exist.

2. The general welfare clause shall be liberally interpreted in case of doubt so as to
give more power to local governments in promoting the economic condition, social
welfare and material progress of the people in the community.

3. Vested rights existing at the time of the promulgation of this law arising out of a
contract between a province, city or municipality on one hand and a third party on the
other, should be governed by the original terms and provisions of the same, and in no
case would this act infringe existing rights.

Moreover, the regulation by local legislatures of land use in their respective territorial
jurisdiction through zoning and reclassification is an exercise of police power. In Binay v.
Domingo,32] the Court recognized that police power need not always be expressly
delegated, it may also be inferred:
The police power is a governmental function, an inherent attribute of sovereignty, which
was born with civilized government. It is founded largely on the maxims, "Sic utere tuo et
alienum non laedas" and "Salus populi est suprema lex" Its fundamental purpose is
securing the general welfare, comfort and convenience of the people.

Police power is inherent in the state but not in municipal corporations (Balacuit v. CFI of
Agusan del Norte, 163 SCRA 182). Before a municipal corporation may exercise such
power, there must be a valid delegation of such power by the legislature which is the
repository of the inherent powers of the State. A valid delegation of police power may
arise from express delegation, or be inferred from the mere fact of the creation of
the municipal corporation; and as a general rule, municipal corporations may
exercise police powers within the fair intent and purpose of their creation which
are reasonably proper to give effect to the powers expressly granted, and statutes
conferring powers on public corporations have been construed as empowering
them to do the things essential to the enjoyment of life and desirable for the safety
of the people. (62 C.J.S., p. 277). The so-called inferred police powers of such
corporations are as much delegated powers as arc those conferred in express terms, the
inference of their delegation growing out of the fact of the creation of the municipal
corporation and the additional fact that the corporation can only fully accomplish the
objects of its creation by exercising such powers. (Crawfordsville vs. Braden, 28 N.E.
849). Furthermore, municipal corporations, as governmental agencies, must have
such measures of the power as are necessary to enable them to perform their
governmental functions. The power is a continuing one, founded on public necessity.
(62 C.J.S. p. 273) Thus, not only does the State effectuate its purposes through the
exercise of the police power but the municipality does also. (U.S. v. Salaveria, 39 Phil.
102).

Municipal governments exercise this power under the general welfare clause: pursuant
thereto they are clothed with authority to "enact such ordinances and issue such
regulations as may be necessary to carry out and discharge the responsibilities conferred
upon it by law, and such as shall be necessary and proper to provide for the health,
safety, comfort and convenience, maintain peace and order, improve public morals,
promote the prosperity and general welfare of the municipality and the inhabitants
thereof, and insure the protection of property therein." (Sections 91, 149, 177 and 208,
BP 337). And under Section 7 of BP 337, "every local government unit shall exercise the
powers expressly granted, those necessarily implied therefrom, as well as powers
necessary and proper for governance such as to promote health and safety, enhance
prosperity, improve morals, and maintain peace and order in the local government unit,
and preserve the comfort and convenience of the inhabitants therein."

Police power is the power to prescribe regulations to promote the health, morals, peace,
education, good order or safety and general welfare of the people. It is the most essential,
insistent, and illimitable of powers. In a sense it is the greatest and most powerful
attribute of the government. It is elastic and must be responsive to various social
conditions. (Sangalang, el al. vs. IAC, 176 SCRA 719). On it depends the security of social
order, the life and health of the citizen, the comfort of an existence in a thickly populated
community, the enjoyment of private and social life, and the beneficial use of property,
and it has been said to be the very foundation on which our social system rests. (16 C.J.S.,
p. 896) However, it is not confined within narrow circumstances of precedents resting on
past conditions; it must follow the legal progress of a democratic way of life. (Sangalang,
el al. vs. IAC, supra).

x x x x

In the case of Sangalang vs. IAC, supra, We ruled that police power is not capable of an
exact definition but has been, purposely, veiled in general terms to underscore its all-
comprehensiveness. Its scope, over-expanding to meet the exigencies of the times, even
to anticipate the future where it could be done, provides enough room for an efficient
and flexible response to conditions and circumstances thus assuring the greatest
benefits.

The police power of a municipal corporation is broad, and has been said to be
commensurate with, but not to exceed, the duty to provide for the real needs of the
people in their health, safely, comfort, and convenience as consistently as may be with
private rights. It extends to all the great public needs, and, in a broad sense includes all
legislation and almost every function of the municipal government. It covers a wide
scope of subjects, and, while it is especially occupied with whatever affects the peace,
security, health, morals, and general welfare of the community, it is not limited thereto,
but is broadened to deal with conditions which exists so as to bring out of them the
greatest welfare of the people by promoting public convenience or general prosperity,
and to everything worthwhile for the preservation of comfort of the inhabitants of the
corporation (62 C.J.S. Sec. 128). Thus, it is deemed inadvisable to attempt to frame any
definition which shall absolutely indicate the limits of police power.
[33]
(Emphases
supplied.)

Based on the preceding discussion, it cannot be said that the power to reclassify
agricultural land was first delegated to the city and municipal legislative bodies under
Section 26 of the Local Government Code of 1991. Said provision only articulates a
power of local legislatures, which, previously, had only been implied or inferred.

Compliance with other requirements or conditions

Resolution No. 29-A is a valid ordinance, which, upon its approval on July 9, 1972,
immediately effected the zoning and reclassifying of the subject property for residential
use. It need not comply with any of the requirements or conditions which DAR and
Buklod are insisting upon.

DAR and Buklod aver that Resolution No. 29-A was not reviewed and approved by the
NPC, in violation of the line in Section 3 of the Local Autonomy Act of 1959, stating that
"[c]ities and municipalities may, however, consult the National Planning Commission on
matters pertaining to planning and zoning." Consideration must be given, however, to
the use of the word "may" in the said sentence. Where the provision reads "may," this
word shows that it is not mandatory but discretionary. It is an auxiliary verb indicating
liberty, opportunity, permission and possibility.
[34]
The use of the word "may" in a
statute denotes that it is directory in nature and generally permissive only. The "plain
meaning rule" or verba legis in statutory construction is thus applicable in this case.
Where the words of a statute are clear, plain, and free from ambiguity, it must be given
its literal meaning and applied without attempted interpretation.
[35]
Since consultation
with the NPC was merely discretionary, then there were only two mandatory
requirements for a valid zoning or subdivision ordinance or regulation under Section 3
of the Local Autonomy Act of 1959, namely, that (1) the ordinance or regulation be
adopted by the city or municipal board or council; and (2) it be approved by the city or
municipal mayor, both of which were complied with byl Resolution No. 29-A.

Section 16(a) of Ordinance No. 1 of the Municipality of Dasmarias likewise mentions
the NPC, to wit:
a. Final plat of subdivision - As essential requirements before a subdivision is accepted
for verification by the Bureau of Lands, the final plat of the scheme of the subdivision
must comply with the provision of this ordinance. Application for plat approval shall
be submitted to the Municipal Mayor and shall be forwarded to the National
Planning Commission thru the Highway District Engineer for comment and/or
recommendations, before action is taken by the Municipal Council. The final
approval of the plat shall be made by the Municipal Mayor upon recommendation of the
Municipal Council by means of a resolution. (Emphasis supplied.)

The aforementioned provision of Ordinance No. 1 refers to the final plat of the
subdivision. The term plat includes "plat, plan, plot or replot."
[36]
It must be distinguished
from the application for subdivision.

The Court concurs with the analysis of the Court of Appeals that Resolution No. 29-A
actually contains two resolutions. The first reads:
Resolved, As it is hereby Resolved to approve the application for subdivisioncontaining
an area of Three Hundred Seventy-Two Hectares (372) situated in barrio Bocal and
Langkaan, named as Travellers Life Homes.
[37]
(Efriphasis supplied.)

It is manifest, even from just a plain reading of said resolution, that the application for
subdivision covering the subject property was categorically and unconditionally
approved by the Municipality of Dasmarinas. As a consequence of such approval, the
subject property is immediately deemed zoned and reclassified as residential.

Meanwhile, the second resolution in Resolution No. 29-A states:
Resolved, that this municipal ordinance regarding subdivision regulations existing
in this municipality shall be strictly followed by the subdivision.
[38]
(Emphases
supplied.)

Significantly, this second resolution already refers to a "subdivision," supporting the
immediately executory nature of the First resolution. The municipal ordinance which
the subdivision must follow is Ordinance No. 1, the general subdivision regulations of the
Municipality of Dasmarinas. Most provisions of Ordinance No. 1 laid down the minimum
standards for the streets, roadways, sidewalks, intersections, lots and blocks, and other
improvements in the subdivision, with which the final plat must comply or conform.
Irrefragably, the review of the final plat of the subdivision calls for a certain level of
technical expertise; hence, the directive to the Municipal Mayor to refer the final plat to
the NPC, through the Highway District Engineer, for comments and recommendation,
before the same is approved by the Municipal Council, then the Mayor.

In relation to the preceding paragraph, Administrative Order No. 152 dated December
16, 1968 required city and municipal boards and councils to submit proposed
subdivision ordinances and plans or forward approved subdivision ordinances to the
NPC. The OP imposed such a requirement because "it has come to the attention of [the]
Office that the minimum standards of such ordinances regarding design, servicing and
streets, and open spaces for parks and other recreational purposes are not being
complied with[.]"
[39]
Review by the NPC of the proposed subdivision plan was for the
purpose of determining "if it conforms with the subdivision ordinance."
[40]


It is apparent that Section 16(a) of Ordinance No. 1 and Administrative Ordinance No.
152 contained the same directive: that the final plat of the subdivision be reviewed by
the NPC to determine its conformity with the minimum standards set in the subdivision
ordinance of the municipality. A closer scrutiny will reveal that Section 16(a) of
Ordinance No. 1 and Administrative Order No. 152 related to the duties and
responsibilities of local government and NPC officials as regards the final plat of the
subdivision. There is no evidence to establish that the concerned public officers herein
did not follow the review process for the final plat as provided in Section 16(a) of
Ordinance No. 1 and Administrative Order No. 152 before approving the same. Under
Section 3(m), Rule 131 of the Rules of Court, there is a presumption that official duty has
been regularly performed. Thus, in the absence of evidence to the contrary, there is a
presumption that public officers performed their official duties regularly and legally and
in compliance with applicable laws, in good faith, and in the exercise of sound
judgment.
[41]
And - just as the Court of Appeals observed - even if it is established that
the accountable public officials failed to comply with their duties and responsibilities
under Section 16(a) of Ordinance No. 1 and Administrative Order No. 152, it would be
contrary to the fundamental precepts of fair play to make EMRASON bear the
consequences of such non-compliance.

Although the two resolutions in Resolution No. 29-A may be related to the same
subdivision, they are independent and separate. Non-compliance with the second
resolution may result in the delay or discontinuance of subdivision development, or even
the imposition of the. penalties
[42]
provided in Ordinance No. 1, but not the annulment or
reversal of the first resolution and its consequences.

The Court again agrees with the Court of Appeals that Resolution No. 29-A need not be
subjected to review and approval by the HSRC/HLURB. Resolution No. 29-A was
approved by the Municipality of Dasmarinas on July 9, 1972, at which time, there was
even no HSRC/HLURB to speak of.

The earliest predecessor of the HSRC, the Task Force on Human Settlements, was created
through Executive Order No. 419 more than a year later on September 19, 1973. And
even then, the Task Force had no power to review and approve zoning and subdivision
ordinances and regulations.

It was only on August 9, 1978, with the issuance of Letter of Instructions No. 729, that
local governments were required to submit their existing land use plans, zoning
ordinances, enforcement systems, and procedures to the Ministry of Human Settlements
for review and ratification.

The HSRC was eventually established on February 7, 1981. Section 5(b) of the HSRC
Charter43 contained the explicit mandate for the HSRC to:
b. Review, evaluate and approve or disapprove comprehensive land use
development plans and zoning ordinances of local government; and the zoning
component of civil works and infrastructure projects of national, regional and local
governments; subdivisions, condominiums or estate development projects including
industrial estates, of both the public and private sectors and urban renewal plans,
programs and projects: Provided, that the land use Development Plans and Zoning
Ordinances of Local Governments herein subject to review, evaluation and approval of
the commission shall respect the classification of public lands for forest purposes as
certified by the Ministry of Natural Resources: Provided, further, that the classification of
specific alienable and disposable lands by the Bureau of Lands shall be in accordance
with the relevant zoning ordinance of: Local government where it exists; and provided,
finally, that in cities and municipalities where there are as yet no zoning ordinances, the
Bureau of Lands may dispose of specific alienable and disposable lands in accordance
with its own classification scheme subject to the condition that the classification of these
lands may be subsequently change by the local governments in accordance with their
particular zoning ordinances which may be promulgated later. (Emphases supplied.)

Neither the Ministry of Human Settlements nor the HSRC, however, could have exercised
its power of review retroactively absent an express provision to that effect in Letter of
Instructions No. 729 or the HSRC Charter, respectively. A sound cannon of statutory
construction is that a statute operates prospectively only and never retroactively, unless
the legislative intent to the contrary is made manifest either by the express terms oi' the
statute or by necessary implication. Article 4 of the Civil Code provides that: "Laws shall
have no retroactive effect, unless the contrary is provided." Hence, in order that a law
may have retroactive effect, it is necessary that an express provision to this effect be
made in the law, otherwise nothing should be understood which is not embodied in the
law. Furthermore, it must be borne in mind that a law is a rule established to guide our
actions without no binding effect until it is enacted, wherefore, it has no application to
past times but only to future time, and that is why it is said that the law looks to the
future only and has no retroactive effect unless the legislator may have formally given
that effect to some legal provisions.
[44]


Subsequent zoning ordinances

Still by the authority vested upon it by Section 3 of the Local Autonomy Act,
the Sangguniang Bayan of Dasmarias subsequently enacted a Comprehensive Zoning
Ordinance, ratified by the HLURB under Board Resolution No. 42-A-3 dated February
11, 1981 (1981 Comprehensive Zoning Ordinance of Dasmarinas). Upon the request of
the DAR, Engr. Alfredo Gil M. Tan, HLURB Regional Technical Coordinator, issued a
certification
[45]
dated September 10, 1992 stating that per the 1981 Comprehensive
Zoning Ordinance of Dasmarinas, the subject property was within the agricultural zone.
Does this mean that the subject property reverted from residential to agricultural
classification?

The Court answers in the negative. While the subject property may be physically located
within an agricultural zone under the 1981 Comprehensive Zoning Ordinance of
Dasmarinas, said property retained its residential classification.

According to Section 17, the Repealing Clause, of the 1981 Comprehensive Zoning
Ordinance of Dasmarinas: "AH other ordinances, rules or regulations in conflict with the
provision of this Ordinance are hereby repealed: Provided, that rights that have vested
before the cffectivity of this Ordinance shall not be impaired."

In Ayog v. Cusi, Jr.,
[46]
the Court expounded on vested right and its protection:
That vested right has to be respected. It could not be abrogated by the new Constitution.
Section 2, Article XIII of the 1935 Constitution allows private corporations to purchase
public agricultural lands not exceeding one thousand and twenty-four hectares.
Petitioners' prohibition action is barred by the doctrine of vested rights in constitutional
law.
"All right is vested when the right to enjoyment has become the property of some
particular person or persons as a present interest" (16 C.J.S. 1173). It is "the privilege to
enjoy property legally vested, to enforce contracts, and enjoy the rights of property
conferred by the existing law" (12 C.J.S. 955, Note 46, No. 6) or "some right or interest in
property which has become fixed and established and is no longer open to doubt or
controversy" (Downs vs. Blount, 170 Fed. 15, 20, cited in Balboa vs. Farrales, 51 Phil.
498, 502).

The due process clause prohibits the annihilation of vested rights. "A state may not
impair vested rights by legislative enactment, by the enactment or by the
subsequent repeal of a municipal ordinance, or by a change in the constitution of
the State, except in a legitimate exercise of the police power" (16 C.J.S. 1177-78).

It has been observed that, generally, the term "vested right" expresses the concept of
present fixed interest, which in right reason and natural justice should be protected
against arbitrary State action, or an innately just and imperative right which an
enlightened free society, sensitive to inherent and irrefragable individual rights, cannot
deny (16 C.J.S. 1174, Note 71, No. 5, citing Pennsylvania Greyhound Lines, Inc. vs.
Rosenthal, 192 Atl. 2nd 587).47 (Emphasis supplied.)

It is true that protection of vested rights is not absolute and must yield to the exercise of
police power:
A law enacted in the exercise of police power to regulate or govern certain activities or
transactions could be given retroactive effect and may reasonably impair vested rights or
contracts. Police power legislation is applicable not only to future contracts, but equally
to Ihose already in existence. Non-impairment of contracts or vested rights clauses will
have to yield to the superior and legitimate exercise by the State of police power to
promote the health, morals, peace, education, good order, safety, and general welfare of
the people, x x x.
[48]


Nonetheless, the Sangguniang Bayan of Dasmarias in this case, in its exercise of police
power through the enactment of the 1981 Comprehensive Zoning Ordinance, itself
abided by the general rule and included in the very same ordinance an express
commitment to honor rights that had already vested under previous ordinances, rules,
and regulations. EMRASON acquired the vested right to use and develop the subject
property as a residential subdivision on July 9, 1972 with the approval of Resolution No.
29-A by the Municipality of Dasmarinas. Such right cannot be impaired by the
subsequent enactment of the 1981 Comprehensive Zoning Ordinance of Dasmarinas, in
which the subject property was included in an agricultural zone. Hence, the Municipal
Mayor of Dasmariflas had been continuously and consistently recognizing the subject
property as a residential subdivision.
[49]


Incidentally, EMRASON mentions Resolution No. 105, Defining and Declaring the
Boundaries of Industrial and Residential Land Use Plan in the Municipalities of Imus and
Parts of Dasmariflas, Carmona, Gen. Mariano Alvarez, Gen. Trias, Silang, Tanza, Naic,
Rosario, and Trece Martires City, Province o[ Cavite, approved by the Sangguniang
Panlalawigan of Cavite on March 25, 1988. TheSangguniang Panlalawigan determined
that "the lands extending from the said designated industrial areas would have greater
economic value for residential and institutional uses, and would serve the interest and
welfare for the greatest good of the greatest number of people."50 Resolution No. 105,
approved by the HLURB in 1990, partly reads:
Tracts of land in the Municipality of Carmona from the People's Technology Complex to
parts of the Municipality of Silang, parts of the Municipalities of Dasmarias, General
Trias, Trece Martires City, Municipalities of Tanza and Naic forming the strip of land
traversed by the Puerto Azul Road extending two kilometers more or less from each side
of the road which are hereby declared as industrial-residential-institutional mix.
(Emphases supplied.)

There is no question that the subject property is located within the afore-described
area. And even though Resolution No. 105 has no direct bearing on the classification of
the subject property prior to the CARL - it taking effect only in 1990 after being approved
by the HLURB - it is a confirmation that at present, the subject property and its
surrounding areas are deemed by the Province of Cavite better suited and prioritized for
industrial and residential development, than agricultural purposes.

CARP exemption

The Court reiterates that since July 9, 1972, upon approval of Resolution No. 29-A by the
Municipality of Dasmarinas, the subject property had been reclassified from agricultural
to residential. The tax declarations covering the subject property, classifying the same as
agricultural, cannot prevail over Resolution No. 29-A. The following pronouncements of
the Court in the Patalinghug case are of particular relevance herein:
The reversal by the Court of Appeals of the trial court's decision was based on Tepoot's
building being declared for taxation purposes as residential. It is our considered view,
however, that a tax declaration is not conclusive of (he 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.

xxxx

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. While the commercial character of the questioned vicinity has been
declared thru the ordinance, private respondents have failed to present convincing
arguments to substantiate their claim that Cabaguio Avenue, where the funeral parlor
was constructed, was still a residential zone. Unquestionably, the operation of a funeral
parlor constitutes a "commercial purpose," as gleaned from Ordinance No.
363.
[52]
(Emphases supplied.)

Since the subject property had been reclassified as residential land by virtue of
Resolution No. 29-A dated July 9, 1972, it is no longer agricultural land by the time the
CARL took effect on June 15, 1988 and is, therefore, exempt from the CARP.

This is not the first time that the Court made such a ruling.

In the Natalia Realty case, Presidential Proclamation No. 1637 dated April 18, 1979 set
aside land in the Municipalities of Antipolo, San Mateo, and Montalban, Province of Rizal,
as townsite areas. The properties owned by Natalia Realty, Inc. (Natalia properties) were
situated within the areas proclaimed as townsite reservation. The developer of the
Natalia properties was granted the necessary clearances and permits by the PJSRC for
the development of a subdivision in the area. Thus, the Natalia properties later became
the Antipolo Hills Subdivision. Following the effectivity of the CARL on June 15, 1988,
the DAR placed the undeveloped portions of the Antipolo Hills Subdivision under the
CARP. For having done so, the Court found that the DAR committed grave abuse of
discretion, thus:
Section 4 of R.A. 6657 provides that the CARL shall "cover, regardless of tenurial
arrangement and commodity produced, all public and private agricultural lands." As to
what constitutes "agricultural land," it is referred to as "land devoted to agricultural
activity as defined in this Act and not classified as mineral, forest, residential, commercial
or industrial land." The deliberations of the Constitutional Commission confirm this
limitation. "Agricultural lands" arc only those lands which are "arable and suitable
agricultural lands" and "do not include commercial, industrial and residential lands."

Based on the foregoing, it is clear that the undeveloped portions of the Antipolo Hills
Subdivision cannot in any language be considered as "agricultural lands." These lots
were intended for residential use. They ceased to be agricultural lands upon
approval of their inclusion in the Lungsod Silangan Reservation. Even today, the
areas in question continue to be developed as a low-cost housing subdivision, albeit at a
snail's pace, x x x The enormity of the resources needed for developing a
subdivision may have delayed its completion but this does not detract from the
fact that these lands are still residential lands and outside the ambit of the CARL.

Indeed, lands not devoted to agricultural activity are outside the coverage of CARL. These
include lands previously converted to non-agricultural uses prior to the eifectivity of
CARL by government agencies other than respondent OAR. In its Revised Rules and
Regulations Governing Conversion of Private Agricultural Lands to Non-Agricultural
Uses, DAR itself defined ''agricultural land" thus -
"x x x Agricultural land refers to those devoted to agricultural activity as defined in R.A.
6657 and not classified as mineral or forest by the Department of Environment and
Natural Resources (DENR) and its predecessor agencies, and not classified in town plans
and zoning ordinances as approved by the Housing and Land Use Regulatory Board
(BLURB) and its preceding competent authorities prior to 15 June 1988 for residential,
commercial or industrial use."

Since the NATALIA lands were converted prior to 15 June 1988, respondent DAR is
bound by such conversion. It was therefore error to include the undeveloped portions of
the Antipolo Hills Subdivision within the coverage of CARL.

Be that as it may, the Secretary of Justice, responding to a query by the Secretary of
Agrarian Reform, noted in an Opinion that lands covered by Presidential Proclamation
No. 1637, inter alia, of which the NATALIA lands are part, having been reserved for
townsite purposes "to be developed as human settlements by the proper land and
housing agency," are "not deemed 'agricultural lands' within the meaning and intent of
Section 3 (c) of R.A. No. 6657." Not being deemed "agricultural lands," they are outside
the coverage of CARL.
[53]
(Emphases supplied.)

That the land in the Natalia Realty case was reclassified as residential by a presidential
proclamation, while the subject property herein was reclassified as residential by a local
ordinance, will not preclude the application of the ruling of this Court in the former to
the latter. The operative fact that places a parcel of land beyond the ambit of the CARL is
its valid reclassification from agricultural to non-agricultural prior to the effectivity of
the CARL on June 15, 1988, not by how or whose authority it was reclassified.

In Pasong Bayabas Farmers Association, Inc. v. Court of Appeals
[54]
(Pasong Bayabas case),
the Court made the following findings:
Under Section 3(c) of Rep. Acl No. 6657. agricultural lands refer to lands devoted to
agriculture as conferred in the said law and not classified as industrial land. Agricultural
lands are only those lands which are arable or suitable lands that do not include
commercial, industrial and residential lands. Section 4(e) of the law provides that it
covers all private lands devoted to or suitable for agriculture regardless of the
agricultural products raised or that can be raised thereon. Rep. Act No. 6657 took effect
only on June 15, 1988. But long before the law took effect, the property subject of
the suit had already been reclassified and converted from agricultural to non-
agricultural or residential land by the following administrative agencies: (a) the
Bureau of Lands, when it approved the subdivision plan of the property consisting of 728
subdivision lots; (b) the National Planning Commission which approved the subdivision
plan subdivided by the LDC/CAI for the development of the property into a low-cost
housing project; (c) the Municipal Council of Carmona, Cavite, when it approved
Kapasiyahang Blg. 30 on May 30, 1976; (d) Agrarian Reform Minister Conrado F.
Estrella, on July 3, 1979, when he granted the application of the respondent for the
development of the Hakone Housing Project with an area of 35.80 hectares upon the
recommendation of the Agrarian Reform Team, Regional Director of Region IV, which
found, after verification and investigation, that the property was not covered by P.D. No.
27, it being untenanted and not devoted to the production of palay/or corn and that the
property was suitable for conversion to residential subdivision: (e) by the Ministry of
Local Government and Community Development; (f) the Human Settlements Regulatory
Commission which issued a location clearance, development permit, Certificate of
Inspection and License to Sell to the LDC/private respondent: and, (g) the Housing and
Land Use Regulatory Board which also issued to the respondent CAI/LDC a license to sell
the subdivision lots." (Emphases supplied.)

Noticeably, there were several government agencies which reclassified and converted
the property from agricultural to non-agricultural in the Pasong Bayabas case. The CARL
though does not specify which specific government agency should have done the
reclassification. To be exempt from CARP, all that is needed is one valid reclassification
of the land from agricultural to non-agricultural by a duly authorized government agency
before June 15, 1988, when the CARL took effect. All similar actions as regards the land
subsequently rendered by other government agencies shall merely serve as confirmation
of the reclassification. The Court actually recognized in the Pasong Bayabas case the
power of the local government to convert or reclassify lands through a zoning ordinance:

Section 3 of Rep. Act No. 2264, amending the Local Government Code, specifically
empowers municipal and/or city councils to adopt zoning and subdivision
ordinances or regulations in consultation with the National Planning Commission.
A zoning ordinance prescribes, defines, and apportions a given political subdivision into
specific land uses as present and future projection of needs.The power of the local
government to convert or reclassify lands to residential lands to non-agricultural
lands rcclassificd is not subject to the approval of the Department of Agrarian
Reform. Section 65 of Rep. Act No. 6657 relied upon by the petitioner applies only to
applications by the landlord or the beneficiary for the conversion of lands previously
placed under the agrarian reform law after the lapse of five years from its award. It docs
not apply to agricultural lands already converted as residential lands prior to the passage
of Rep. Act No. 6657.
[56]
(Emphases supplied.)

At the very beginning of Junto v. Garilao,
[57]
the Court already declared that:
Lands already classified and identified as commercial, industrial or residential before
June 15, 1988 - the date of effectivity of the Comprehensive Agrarian Reform Law (CARL)
- are outside the coverage of this law. Therefore, they no longer need any conversion
clearance from the Department of Agrarian Reform (DAR).
[58]


The Court then proceeded to uphold the authority of the City Council of Bacolod to
reclassify as residential a parcel of land through Resolution No. 5153-A, series of 1976.
The reclassification was later affirmed by the HSRC. Resultantly, the Court sustained the
DAR Order dated September 13, 1994, exempting the same parcel of land from CARP
Coverage.

The writ of preliminary injunction

Any objection of Buklod against the issuance by the Court of Appeals of a writ of
preliminary injunction, enjoining then DAR Secretary Garilao and Deputy Executive
Secretary Corona from implementing the OP Decision of February 7, 1996 and
Resolution of May 14, 1996 during the pendency of CA-G.R. SP No. 40950, had been
rendered moot and academic when the appellate court already promulgated its Decision
in said case on March 26, 1997 which made the injunction permanent. As the Court held
in Kho v. Court of Appeals
[59]
:
We cannot likewise overlook the decision of the trial court in the case for final injunction
and damages. The dispositive portion of said decision held that the petitioner does not
have trademark rights on the name and container of the beauty cream product. The said
decision on the merits of the trial court rendered the issuance of the writ of a
preliminary injunction moot and academic notwithstanding the fact that the same has
been appealed in the Court of Appeals. This is supported by our ruling in La Vista
Association, Inc. v. Court of Appeals, to wit:
Considering that preliminary injunction is a provisional remedy which may be granted at
any time after the commencement of the action and before judgment when it is established
that the plaintiff is entitled to the relief demanded and only when his complaint shows facts
entitling such reliefs xxx and it appearing that the trial court had already granted the
issuance of a final injunction in favor of petitioner in its decision rendered after trial on the
merits xxx the Court resolved to Dismiss the instant petition having been rendered moot
and academic. An injunction issued by the trial court after it has already made a clear
pronouncement as to the plaintiffs right thereto, that is, after the same issue has been
decided on the merits, the trial court having appreciated the evidence presented, is proper,
notwithstanding the fact that the decision rendered is not yet final xxx.Being an ancillary
remedy, the proceedings for preliminary injunction cannot stand separately or proceed
independently of the decision rendered on the merit of the main case for injunction. The
merit of the main case having been already determined in favor of the applicant, the
preliminary determination of its non-existence ceases to have any force and effect,
(italics supplied)

La Vista categorically pronounced that the issuance of a final injunction renders any
question on the preliminary injunctive order moot and academic despite the fact that the
decision granting a final injunction is pending appeal. Conversely, a decision denying the
applicant-plaintiffs right to a final injunction, although appealed, renders moot and
academic any objection to the prior dissolution of a writ of preliminary injunction.
[60]


Issues belatedly raised

Buklod sought to intervene in CA-G.R. SP No. 40950, then pending before the Court of
Appeals, by filing a Manifestation and Omnibus Motion in which it argued only two
points: (1) the writ of preliminary injunction be immediately dissolved for having been
issued in violation of Section 55 of the CARL; and (2) that the Petition for Review of
EMRASON be dismissed for being the wrong remedy.

It was only after the Court of Appeals rendered its Decision dated March 26, 1997
unfavorable to both DAR and Buklod did Buklod raise in its Motion for Reconsideration
several other issues, both factual and legal,
[61]
directly assailing the exemption of the
subject property from the CARP. The Court of Appeals refused to consider said issues
because they were raised by Buklod for the first time in its Motion for Reconsideration.

Buklod persistently raises the same issues before this Court, and the Court, once more,
refuses to take cognizance of the same.

As a rule, no issue may be raised on appeal unless it has been brought before the lower
tribunal for its consideration. Higher courts are precluded from entertaining matters
neither alleged in the pleadings nor raised during the proceedings below, but ventilated
for the first time only in a motion for reconsideration or on appeal.
[62]
The issues were
first raised only in the Motion for Reconsideration of the Decision of the Court of
Appeals, thus, it is as if they were never duly raised in that court at all. "Hence, this Court
cannot now, for the first time on appeal, entertain these issues, for to do so would plainly
violate the basic rule of fair play, justice and due process. The Court reiterates and
emphasizes the well-settled rule that an issue raised for the first time on appeal and not
raised timely in the proceedings in the lower court is barred by estoppel.
[63]


Indeed, there are exceptions to the aforecited rule that no question may be raised for the
first time on appeal. Though not raised below, the issue of lack of jurisdiction over the
subject matter may be considered by the reviewing court, as it may be raised at any
stage. The said court may also consider an issue not properly raised during trial when
there is plain error. Likewise, it may entertain such arguments when there are
jurisprudential developments affecting the issues, or when the issues raised present a
matter of public policy.
[64]
Buklod, however, did not allege, much less argue, that its case
falls under any of these exceptions.

Nonetheless, even when duly considered by this Court, the issues belatedly raised by
Buklod are without merit.

Contrary to the contention of Buklod, there is no necessity to carry out the conversion of
the subject property to a subdivision within one year, at the risk of said property
reverting to agricultural classification.

Section 36(1) of the Agricultural Land Reform Code, in effect since August 8, 1963,
provided:
SEC. 36. Possession of Landholding; Exceptions. Notwithstanding any agreement as to
the period or future surrender, of the land, an agricultural lessee shall continue in the
enjoyment and possession of his landholding except when his dispossession has been
authorized by the Court in a judgment that is final and executory if after due hearing it is
shown that:

(1) The agricultural lessor-owner or a member of his immediate family will personally
cultivate the landholding or will convert the landholding, if suitably located, into
residential, factory, hospital or school site or other useful non-agricultural purposes:
Provided, That the agricultural lessee shall be entitled to disturbance compensation
equivalent to five years rental on his landholding in addition to his rights under Sections
twenty-five and thirty-four, except when the land owned and leased by the agricultural
lessor is not more than five hectares, in which case instead of disturbance compensation
the lessee may be entitled to an advanced notice of at least one agricultural year before
ejectment proceedings are filed against him: Provided, further, That should the
landholder not cultivate the land himself for three years or fail to substantially carry
out such conversion within one year after the dispossession of the tenant, it shall
be presumed that he acted in bad faith and the tenant shall have the right to
demand possession of the land and recover damages for any loss incurred by him
because of said dispossessions; xxx. (Emphasis supplied.)

On September 10, 1971, the Agricultural Land Reform Code was amended and it came
to be known as the Code of Agrarian Reforms. After its amendment, Section 36(1) stated:
(1) The landholding is declared by the department head upon recommendation of the
National Planning Commission to be suited for residential, commercial, industrial or
some other urban purposes: Provided, That the agricultural lessee shall be entitled to
disturbance compensation equivalent to five times the average of the gross harvests on
his landholding during the last five preceding calendar years.

At the time Resolution No. 29-A was enacted by the Municipality of Dasmarinas on July
9, 1972, the Code of Agrarian Reforms was already in effect. The amended Section 36(3)
thereof no longer contained the one-year time frame within which conversion should be
carried out.

More importantly, Section 36(1) of the Code o[ Agrarian Reforms would apply only if the
land in question was subject of an agricultural leasehold, a fact that was not established
in the proceedings below. It may do well for the Buklod members to remember that they
filed their present Petition to seek award of ownership over portions of the subject
property as qualified farmer-beneficiaries under the CARP; and not payment of
disturbance compensation as agricultural lessees under the Code of Agrarian Reforms.
The insistence by Buklod on the requisites under Section 36(1) of the Agricultural Land
Reform Code/Code of Agrarian Reforms only serves to muddle the issues rather than
support its cause.

Buklod likewise invokes the vested rights of its members under the Agricultural Land
Reform Code/Code of Agrarian Reforms and the Tenants Emancipation Decree, which
preceded the CARP. Yet, for the Buklod

members to be entitled to any of the rights and benefits under the said laws, it is
incumbent upon them to prove first that they qualify as agricultural lessees or farm
workers of the subject property, as defined in Section 166(2)
[65]
and (15)
[66]
of the Code
of Agrarian Reforms; and/or they are tenant-farmers of private agricultural lands
primarily devoted to rice and corn, under a system of share-crop or lease tenancy, and
are members of a duly recognized farmer's cooperative, as required by the Tenants
Emancipation Decree. None of these determinative facts were established by Buklod.

Buklod counters that it precisely moved for a hearing before the Court of Appeals so that
it could present evidence to prove such facts, but the appellate court erroneously denied
its motion.

The Court finds that the Court of Appeals did not err on this matter.

In the recent case of Office of the Ombudsman v. Sison,
[67]
the Court expounded on the
rules on intervention:
It is fundamental that the allowance or disallowance of a Motion 10 Intervene is
addressed to the sound discretion of the court. The permissive tenor of the rules shows
the intention lo give to the court the full measure of discretion in permitting or
disallowing the intervention, thus:
SECTION 1. Who may intervene, - A person who has a Icga) interest in the mailer in
litigation, or in the success of either of the parties, or an interest against both, or is so
situated as to be adversely affected by a distribution or other disposition of property in
the custody of the court or of an officer thereof may, with leave of court, be allowed to
intervene in the action. The court shall consider whether or not the intervention will
unduly delay or prejudice the adjudication of the rights of the original parties, and
whether or not the intcrvenor's rights may be fully protected in a separate proceeding.

SECTION 2. Time to intervene. - The motion to intervene may be filed al any time
before rendition of judgment by the trial court. A copy of the pleading-in-intervention
shall be attached to the motion and served on the original parties. (Emphasis supplied.)

Simply, intervention is a procedure by which third persons, not originally parties to the
suit but claiming an interest in the subject matter, come into the case in order to protect
their right or interpose their claim. Its main purpose is to settle in one action and by a
single judgment all conflicting claims of, or the whole controversy among, the persons
involved.

To warrant intervention under Rule 19 of the Rules of Court, two requisites must concur:
(1) the movant has a legal interest in the matter in litigation; and (2) intervention must
not unduly delay or prejudice the adjudication of the rights of the parties, nor should the
claim of the intervenor be capable of being properly decided in a separate proceeding.
The interest,' which entitles one to intervene, must involve the matter in litigation and of
such direct and immediate character that the intervenor will either gain or lose by the
direct legal operation and effect of the judgment.
[68]


To apply the rules strictly, the motion of Buklod to intervene was filed too late. According
to Section 2, Rule 19 of the Rules of Civil Procedure, "a motion to intervene may be filed
at any time before rendition of judgment by the trial court." Judgment was already
rendered in DARAB Case No. IV-Ca-0084-92 (the petition of EMRASON to nullify the
notices of acquisition over the subject property), not only by the DAR Hearing Officer,
who originally heard the case, but also the DAR Secretary, and then the OP, on appeal.

Buklod only sought to intervene when the case was already before the Court of Appeals.
The appellate court, in the exercise of its discretion, still allowed the intervention of
Buklod in CA-G.R. SP No. 40950 only because it was "not being in any way prejudicial to
the interest of the original parties, nor will such intervention change the factual legal
complexion of the case."
[69]
The intervention of Buklod challenged only the remedy
availed by EMRASON and the propriety of the preliminary injunction issued by the Court
of Appeals, which were directly and adequately addressed by the appellate court in its
Decision dated March 26, 1997.

The factual matters raised by Buklod in its Motion for Reconsideration of the March 26,
1997 Decision of the Court of Appeals, and which it sought to prove by evidence,
inevitably changes "the factual legal complexion of the case." The allegations of Buklod
that its members are tenant-farmers of the subject property who acquired vested rights
under previous agrarian reform laws, go against the findings of the DAR Region IV
Hearing Officer, adopted by the DAR Secretary, the OP, and Court of Appeals, that the
subject property was being acquired under the CARP for distribution to the tenant-
farmers of the neighboring NDC property, after a determination that the latter property
was insufficient for the needs of both the NDC-Marubeni industrial estate and the tenant-
farmers.

Furthermore, these new claims of Buklod are beyond the appellate jurisdiction of the
Court of Appeals, being within the primary jurisdiction of the DAR. As Section 50 of the
CARL, as amended, reads:
SEC. 50. Quasi-Judicial Powers of the DAR. - The DAR is hereby vested with primary
jurisdiction to determine and adjudicate agrarian reform matters and shall have
exclusive original jurisdiction over all matters involving the implementation of agrarian
reform, except those falling under the exclusive jurisdiction of the Department of
Agriculture (DA) and the Department of Environment and Natural Resources (DENR).

In fact, records reveal that Buklod already sought remedy from the DARAB. DARAB Case
No. IV-CA-0261, entitled Buklod nang Magbubukid sa Lupaing Ramos, rep. by Edgardo
Mendoza, et at. v. E.M. Ramos and Sons, Inc., et al., was pending at about the same time as
DARAB Case No. lV-Ca-0084-92, the petition of EMRASON for nullification of the notices
of acquisition covering the subject property. These two cases were initially consolidated
before the DARAB Region IV. The DARAB Region IV eventually dismissed DARAB Case
No. IV-Ca-0084-92 and referred the same to the DAR Region IV Office, which had
jurisdiction over the case. Records failed to reveal the outcome of DARAB Case No. IV-CA-
0261,

On a final note, this Court has stressed more than once that social justice - or any justice
for that matter - is for the deserving, whether he be a millionaire in his mansion or a
pauper in his hovel. It is true that, in case of reasonable doubt, the Court is called upon to
tilt the balance in favor of the poor to whom the Constitution fittingly extends its
sympathy and compassion. But never is it justified to give preference to the poor simply
because they are poor, or to reject the rich simply because they are rich, for justice must
always be served for poor and rich alike, according to the mandate of the
law.
[70]
Vigilance over the rights of the landowners is equally important because social
justice cannot be invoked to trample on the rights of property owners, who under our
Constitution and laws are also entitled to protection.
[71]


WHEREFORE, the Petitions for Review filed by the Buklod Nang Magbubukid Sa Lupaing
Ramos, Inc. in G.R. No. 131481 and the Department of Agrarian Reform in G.R. No.
131624 are hereby DENIED. The Decision dated March 26, 1997 and the Resolution
dated November 24, 1997 of the Court of Appeals in CA-G.R. SP No. 40950 are
hereby AFFIRMED.

SO ORDERED.

Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. 195770 July 17, 2012
AQUILINO Q. PIMENTEL, JR., SERGIO TADEO and NELSON ALCANTARA, Petitioners,
vs.
EXECUTIVE SECRETARY PAQUITO N. OCHOA and SECRETARY CORAZON JULIANO-
SOLIMAN OF THE DEPARTMENT OF SOCIAL WELFARE and DEVELOPMENT
(DSWD), Respondents.
D E C I S I O N
PERLAS-BERNABE, J.:
The Case
For the Courts consideration in this Petition for Certiorari and Prohibition is the
constitutionality of certain provisions of Republic Act No. 10147 or the General
Appropriations Act (GAA) of 2011
1
which provides a P21 Billion budget allocation for the
Conditional Cash Transfer Program (CCTP) headed by the Department of Social Welfare
& Development (DSWD). Petitioners seek to enjoin respondents Executive Secretary
Paquito N. Ochoa and DSWD Secretary Corazon Juliano-Soliman from implementing the
said program on the ground that it amounts to a "recentralization" of government
functions that have already been devolved from the national government to the local
government units.
The Facts
In 2007, the DSWD embarked on a poverty reduction strategy with the poorest of the
poor as target beneficiaries.
2
Dubbed "Ahon Pamilyang Pilipino," it was pre-pilot tested in
the municipalities of Sibagat and Esperanza in Agusan del Sur; the municipalities of
Lopez Jaena and Bonifacio in Misamis Occidental, the Caraga Region; and the cities of
Pasay and Caloocan
3
upon the release of the amount of P50 Million Pesos under a Special
Allotment Release Order (SARO) issued by the Department of Budget and Management.
4

On July 16, 2008, the DSWD issued Administrative Order No. 16, series of 2008 (A.O. No.
16, s. 2008),
5
setting the implementing guidelines for the project renamed "Pantawid
Pamilyang Pilipino Program" (4Ps), upon the following stated objectives, to wit:
1. To improve preventive health care of pregnant women and young children
2. To increase enrollment/attendance of children at elementary level
3. To reduce incidence of child labor
4. To raise consumption of poor households on nutrient dense foods
5. To encourage parents to invest in their children's (and their own) future
6. To encourage parent's participation in the growth and development of young
children, as well as involvement in the community.
6

This government intervention scheme, also conveniently referred to as CCTP, "provides
cash grant to extreme poor households to allow the members of the families to meet
certain human development goals."
7

Eligible households that are selected from priority target areas consisting of the poorest
provinces classified by the National Statistical Coordination Board (NCSB)
8
are granted a
health assistance of P500.00/month, or P6,000.00/year, and an educational assistance of
P300.00/month for 10 months, or a total of P3,000.00/year, for each child but up to a
maximum of three children per family.
9
Thus, after an assessment on the appropriate
assistance package, a household beneficiary could receive from the government an
annual subsidy for its basic needs up to an amount of P15,000.00, under the following
conditionalities:
a) Pregnant women must get pre natal care starting from the 1st trimester,
child birth is attended by skilled/trained professional, get post natal care
thereafter
b) Parents/guardians must attend family planning sessions/mother's class,
Parent Effectiveness Service and others
c) Children 0-5 years of age get regular preventive health check-ups and
vaccines
d) Children 3-5 years old must attend day care program/pre-school
e) Children 6-14 years of age are enrolled in schools and attend at least 85% of
the time
10

Under A.O. No. 16, s. 2008, the DSWD also institutionalized a coordinated inter-agency
network among the Department of Education (DepEd), Department of Health (DOH),
Department of Interior and Local Government (DILG), the National Anti-Poverty
Commission (NAPC) and the local government units (LGUs), identifying specific roles and
functions in order to ensure effective and efficient implementation of the CCTP. As the
DSWD takes on the role of lead implementing agency that must "oversee and coordinate
the implementation, monitoring and evaluation of the program," the concerned LGU as
partner agency is particularly tasked to
a. Ensure availability of the supply side on health and education in the target
areas.
b. Provide necessary technical assistance for Program implementation
c. Coordinate the implementation/operationalization of sectoral activities at
the City/Municipal level to better execute Program objectives and functions
d. Coordinate with various concerned government agencies at the local level,
sectoral representatives and NGO to ensure effective Program implementation
e. Prepare reports on issues and concerns regarding Program implementation
and submit to the Regional Advisory Committee, and
f. Hold monthly committee meetings
11

A Memorandum of Agreement (MOA)
12
executed by the DSWD with each participating
LGU outlines in detail the obligation of both parties during the intended five-year
implementation of the CCTP.
Congress, for its part, sought to ensure the success of the CCTP by providing it with
funding under the GAA of 2008 in the amount of Two Hundred Ninety-Eight Million Five
Hundred Fifty Thousand Pesos (P298,550,000.00). This budget allocation increased
tremendously to P5 Billion Pesos in 2009, with the amount doubling to P10 Billion Pesos
in 2010. But the biggest allotment given to the CCTP was in the GAA of 2011 at Twenty
One Billion One Hundred Ninety-Four Million One Hundred Seventeen Thousand Pesos
(P21,194,117,000.00).
13
1wphi1
Petitioner Aquilino Pimentel, Jr., a former Senator, joined by Sergio Tadeo, incumbent
President of the Association of Barangay Captains of Cabanatuan City, Nueva Ecija, and
Nelson Alcantara, incumbent Barangay Captain of Barangay Sta. Monica, Quezon City,
challenges before the Court the disbursement of public funds and the implementation of
the CCTP which are alleged to have encroached into the local autonomy of the LGUs.
The Issue
THE P21 BILLION CCTP BUDGET ALLOCATION UNDER THE DSWD IN THE GAA FY 2011
VIOLATES ART. II, SEC. 25 & ART. X, SEC. 3 OF THE 1987 CONSTITUTION IN RELATION
TO SEC. 17 OF THE LOCAL GOVERNMENT CODE OF 1991 BY PROVIDING FOR THE
RECENTRALIZATION OF THE NATIONAL GOVERNMENT IN THE DELIVERY OF BASIC
SERVICES ALREADY DEVOLVED TO THE LGUS.
Petitioners admit that the wisdom of adopting the CCTP as a poverty reduction strategy
for the Philippines is with the legislature. They take exception, however, to the manner
by which it is being implemented, that is, primarily through a national agency like DSWD
instead of the LGUs to which the responsibility and functions of delivering social welfare,
agriculture and health care services have been devolved pursuant to Section 17 of
Republic Act No. 7160, also known as the Local Government Code of 1991, in relation to
Section 25, Article II & Section 3, Article X of the 1987 Constitution.
Petitioners assert that giving the DSWD full control over the identification of
beneficiaries and the manner by which services are to be delivered or conditionalities
are to be complied with, instead of allocating the P21 Billion CCTP Budget directly to the
LGUs that would have enhanced its delivery of basic services, results in the
"recentralization" of basic government functions, which is contrary to the precepts of
local autonomy and the avowed policy of decentralization.
Our Ruling
The Constitution declares it a policy of the State to ensure the autonomy of local
governments
14
and even devotes a full article on the subject of local governance
15
which
includes the following pertinent provisions:
Section 3. The Congress shall enact a local government code which shall provide for a
more responsive and accountable local government structure instituted through a
system of decentralization with effective mechanisms of recall, initiative, and
referendum, allocate among the different local government units their powers,
responsibilities, and resources, and provide for the qualifications, election, appointment
and removal, term, salaries, powers and functions and duties of local officials, and all
other matters relating to the organization and operation of the local units.
x x x
Section 14. The President shall provide for regional development councils or other
similar bodies composed of local government officials, regional heads of departments
and other government offices, and representatives from non-governmental
organizations within the regions for purposes of administrative decentralization to
strengthen the autonomy of the units therein and to accelerate the economic and social
growth and development of the units in the region. (Underscoring supplied)
In order to fully secure to the LGUs the genuine and meaningful autonomy that would
develop them into self-reliant communities and effective partners in the attainment of
national goals,
16
Section 17 of the Local Government Code vested upon the LGUs the
duties and functions pertaining to the delivery of basic services and facilities, as follows:
SECTION 17. Basic Services and Facilities.
(a) Local government units shall endeavor to be self-reliant and shall continue
exercising the powers and discharging the duties and functions currently
vested upon them. They shall also discharge the functions and responsibilities
of national agencies and offices devolved to them pursuant to this Code. Local
government units shall likewise exercise such other powers and discharge such
other functions and responsibilities as are necessary, appropriate, or incidental
to efficient and effective provision of the basic services and facilities
enumerated herein.
(b) Such basic services and facilities include, but are not limited to, x x x.
While the aforementioned provision charges the LGUs to take on the functions
and responsibilities that have already been devolved upon them from the
national agencies on the aspect of providing for basic services and facilities in
their respective jurisdictions, paragraph (c) of the same provision provides a
categorical exception of cases involving nationally-funded projects, facilities,
programs and services, thus:
(c) Notwithstanding the provisions of subsection (b) hereof, public works and
infrastructure projects and other facilities, programs and services funded by
the National Government under the annual General Appropriations Act, other
special laws, pertinent executive orders, and those wholly or partially funded
from foreign sources, are not covered under this Section, except in those cases
where the local government unit concerned is duly designated as the
implementing agency for such projects, facilities, programs and services.
(Underscoring supplied)
The essence of this express reservation of power by the national government is that,
unless an LGU is particularly designated as the implementing agency, it has no power
over a program for which funding has been provided by the national government under
the annual general appropriations act, even if the program involves the delivery of basic
services within the jurisdiction of the LGU.
The Court held in Ganzon v. Court of Appeals
17
that while it is through a system of
decentralization that the State shall promote a more responsive and accountable local
government structure, the concept of local autonomy does not imply the conversion of
local government units into "mini-states."
18
We explained that, with local autonomy, the
Constitution did nothing more than "to break up the monopoly of the national
government over the affairs of the local government" and, thus, did not intend to sever
"the relation of partnership and interdependence between the central administration
and local government units."
19
In Pimentel v. Aguirre,
20
the Court defined the extent of
the local government's autonomy in terms of its partnership with the national
government in the pursuit of common national goals, referring to such key concepts as
integration and coordination. Thus:
Under the Philippine concept of local autonomy, the national government has not
completely relinquished all its powers over local governments, including autonomous
regions. Only administrative powers over local affairs are delegated to political
subdivisions. The purpose of the delegation is to make governance more directly
responsive and effective at the local levels. In turn, economic, political and social
development at the smaller political units are expected to propel social and economic
growth and development. But to enable the country to develop as a whole, the programs
and policies effected locally must be integrated and coordinated towards a common
national goal. Thus, policy-setting for the entire country still lies in the President and
Congress.
Certainly, to yield unreserved power of governance to the local government unit as to
preclude any and all involvement by the national government in programs implemented
in the local level would be to shift the tide of monopolistic power to the other extreme,
which would amount to a decentralization of power explicated in Limbona v.
Mangelin
21
as beyond our constitutional concept of autonomy, thus:
Now, autonomy is either decentralization of administration or decentralization of
power.1wphi1 There is decentralization of administration when the central government
delegates administrative powers to political subdivisions in order to broaden the base of
government power and in the process to make local governments more responsive and
accountable and ensure their fullest development as self-reliant communities and make
them more effective partners in the pursuit of national development and social progress.
At the same time, it relieves the central government of the burden of managing local
affairs and enables it to concentrate on national concerns. The President exercises
general supervision over them, but only to ensure that local affairs are administered
according to law. He has no control over their acts in the sense that he can substitute
their judgments with his own.
Decentralization of power, on the other hand, involves an abdication of political power in
the [sic] favor of local governments [sic] units declared to be autonomous. In that case,
the autonomous government is free to chart its own destiny and shape its future with
minimum intervention from central authorities. According to a constitutional author,
decentralization of power amounts to self-immolation, since in that event, the
autonomous government becomes accountable not to the central authorities but to its
constituency.
22

Indeed, a complete relinquishment of central government powers on the matter of
providing basic facilities and services cannot be implied as the Local Government Code
itself weighs against it. The national government is, thus, not precluded from taking a
direct hand in the formulation and implementation of national development programs
especially where it is implemented locally in coordination with the LGUs concerned.
Every law has in its favor the presumption of constitutionality, and to justify its
nullification, there must be a clear and unequivocal breach of the Constitution, not a
doubtful and argumentative one.
23
Petitioners have failed to discharge the burden of
proving the invalidity of the provisions under the GAA of 2011. The allocation of a P21
billion budget for an intervention program formulated by the national government itself
but implemented in partnership with the local government units to achieve the common
national goal development and social progress can by no means be an encroachment
upon the autonomy of local governments.
WHEREFORE, premises considered, the petition is hereby DISMISSED.
SO ORDERED.

EN BANC
[G.R. No. 149743. February 18, 2005]
LEONARDO TAN, ROBERT UY and LAMBERTO TE, petitioners, vs. SOCORRO Y.
PEREA, respondent.
D E C I S I O N
TINGA, J.:
The resolution of the present petition effectively settles the question of how many
cockpits may be allowed to operate in a city or municipality.
There are two competing values of high order that come to fore in this casethe
traditional power of the national government to enact police power measures, on one
hand, and the vague principle of local autonomy now enshrined in the Constitution on
the other. The facts are simple, but may be best appreciated taking into account the legal
milieu which frames them.
In 1974, Presidential Decree (P.D.) No. 449, otherwise known as the Cockfighting
Law of 1974, was enacted. Section 5(b) of the Decree provided for limits on the number
of cockpits that may be established in cities and municipalities in the following manner:
Section 5. Cockpits and Cockfighting in General.
(b) Establishment of Cockpits. Only one cockpit shall be allowed in each city or
municipality, except that in cities or municipalities with a population of over one
hundred thousand, two cockpits may be established, maintained and operated.
With the enactment of the Local Government Code of 1991,
[1]
the municipal
sangguniang bayan were empowered, [a]ny law to the contrary notwithstanding, to
authorize and license the establishment, operation and maintenance of cockpits, and
regulate cockfighting and commercial breeding of gamecocks.
[2]

In 1993, the Sangguniang Bayan of the municipality of Daanbantayan,
[3]
Cebu
Province, enacted Municipal Ordinance No. 6 (Ordinance No. 6), Series of 1993, which
served as the Revised Omnibus Ordinance prescribing and promulgating the rules and
regulations governing cockpit operations in Daanbantayan.
[4]
Section 5 thereof, relative
to the number of cockpits allowed in the municipality, stated:
Section 5. There shall be allowed to operate in the Municipality of Daanbantayan,
Province of Cebu, not more than its equal number of cockpits based upon the population
provided for in PD 449, provided however, that this specific section can be amended for
purposes of establishing additional cockpits, if the Municipal population so warrants.
[5]

Shortly thereafter, the Sangguniang Bayan passed an amendatory ordinance,
Municipal Ordinance No. 7 (Ordinance No. 7), Series of 1993, which amended the
aforequoted Section 5 to now read as follows:
Section 5. Establishment of Cockpit. There shall be allowed to operate in the Municipality
of Daanbantayan, Province of Cebu, not more than three (3) cockpits.
[6]

On 8 November 1995, petitioner Leonardo Tan (Tan) applied with the Municipal
Gamefowl Commission for the issuance of a permit/license to establish and operate a
cockpit in Sitio Combado, Bagay, in Daanbantayan. At the time of his application, there
was already another cockpit in operation in Daanbantayan, operated by respondent
Socorro Y. Perea (Perea), who was the duly franchised and licensed cockpit operator
in the municipality since the 1970s. Pereas franchise, per records, was valid until
2002.
[7]

The Municipal Gamefowl Commission favorably recommended to the mayor of
Daanbantayan, petitioner Lamberto Te (Te), that a permit be issued to Tan. On 20
January 1996, Te issued a mayors permit allowing Tan to establish/operate/conduct
the business of a cockpit in Combado, Bagay, Daanbantayan, Cebu for the period from 20
January 1996 to 31 December 1996.
[8]

This act of the mayor served as cause for Perea to file a Complaint for damages
with a prayer for injunction against Tan, Te, and Roberto Uy, the latter allegedly an agent
of Tan.
[9]
Perea alleged that there was no lawful basis for the establishment of a second
cockpit. She claimed that Tan conducted his cockpit fights not in Combado, but in
Malingin, at a site less than five kilometers away from her own cockpit. She insisted that
the unlawful operation of Tans cockpit has caused injury to her own legitimate business,
and demanded damages of at least Ten Thousand Pesos (P10,000.00) per month as
actual damages, One Hundred Fifty Thousand Pesos (P150,000.00) as moral damages,
and Fifty Thousand Pesos (P50,000.00) as exemplary damages. Perea also prayed that
the permit issued by Te in favor of Tan be declared as null and void, and that a
permanent writ of injunction be issued against Te and Tan preventing Tan from
conducting cockfights within the municipality and Te from issuing any authority for Tan
to pursue such activity.
[10]

The case was heard by the Regional Trial Court (RTC),
[11]
Branch 61 of Bogo, Cebu,
which initially granted a writ of preliminary injunction.
[12]
During trial, herein
petitioners asserted that under the Local Government Code of 1991, the sangguniang
bayan of each municipality now had the power and authority to grant franchises and
enact ordinances authorizing the establishment, licensing, operation and maintenance of
cockpits.
[13]
By virtue of such authority, the Sangguniang Bayan of Daanbantayan
promulgated Ordinance Nos. 6 and 7. On the other hand, Perea claimed that the
amendment authorizing the operation of not more than three (3) cockpits in
Daanbantayan violated Section 5(b) of the Cockfighting Law of 1974, which allowed for
only one cockpit in a municipality with a population as Daanbantayan.
[14]

In a Decision dated 10 March 1997, the RTC dismissed the complaint. The court
observed that Section 5 of Ordinance No. 6, prior to its amendment, was by specific
provision, an implementation of the Cockfighting Law.
[15]
Yet according to the RTC,
questions could be raised as to the efficacy of the subsequent amendment under
Ordinance No. 7, since under the old Section 5, an amendment allowing additional
cockpits could be had only if the municipal population so warrants.
[16]
While the RTC
seemed to doubt whether this condition had actually been fulfilled, it nonetheless
declared that since the case was only for damages, the [RTC] cannot grant more relief
than that prayed for.
[17]
It ruled that there was no evidence, testimonial or documentary,
to show that plaintiff had actually suffered damages. Neither was there evidence that Te,
by issuing the permit to Tan, had acted in bad faith, since such issuance was pursuant to
municipal ordinances that nonetheless remained in force.
[18]
Finally, the RTC noted that
the assailed permit had expired on 31 December 1996, and there was no showing that it
had been renewed.
[19]

Perea filed a Motion for Reconsideration which was denied in an Order dated 24
February 1998. In this Order, the RTC categorically stated that Ordinance Nos. 6 and 7
were valid and legal for all intents and purpose[s].
[20]
The RTC also noted that the
Sangguniang Bayan had also promulgated Resolution No. 78-96, conferring on Tan a
franchise to operate a cockpit for a period of ten (10) years from February 1996 to
2006.
[21]
This Resolution was likewise affirmed as valid by the RTC. The RTC noted that
while the ordinances seemed to be in conflict with the Cockfighting Law, any doubt in
interpretation should be resolved in favor of the grant of more power to the local
government unit, following the principles of devolution under the Local Government
Code.
[22]

The Decision and Order of the RTC were assailed by Perea on an appeal with the
Court of Appeals which on 21 May 2001, rendered the Decision now assailed.
[23]
The
perspective from which the Court of Appeals viewed the issue was markedly different
from that adopted by the RTC. Its analysis of the Local Government Code, particularly
Section 447(a)(3)(V), was that the provision vesting unto the sangguniang bayan the
power to authorize and license the establishment of cockpits did not do away with the
Cockfighting Law, as these two laws are not necessarily inconsistent with each other.
What the provision of the Local Government Code did, according to the Court of Appeals,
was to transfer to the sangguniang bayan powers that were previously conferred on the
Municipal Gamefowl Commission.
[24]

Given these premises, the appellate court declared as follows:
Ordinance No. 7 should [be] held invalid for allowing, in unconditional terms, the
operation of not more than three cockpits in Daan Bantayan (sic), clearly dispensing
with the standard set forth in PD 449. However, this issue appears to have been mooted
by the expiration of the Mayors Permit granted to the defendant which has not been
renewed.
[25]

As to the question of damages, the Court of Appeals agreed with the findings of the
RTC that Perea was not entitled to damages. Thus, it affirmed the previous ruling
denying the claim for damages. However, the Court of Appeals modified the RTCs
Decision in that it now ordered that Tan be enjoined from operating a cockpit and
conducting any cockfights within Daanbantayan.
[26]

Thus, the present Petition for Review on Certiorari.
Petitioners present two legal questions for determination: whether the Local
Government Code has rendered inoperative the Cockfighting Law; and whether the
validity of a municipal ordinance may be determined in an action for damages which
does not even contain a prayer to declare the ordinance invalid.
[27]
As the denial of the
prayer for damages by the lower court is not put in issue before this Court, it shall not be
passed upon on review.
The first question raised is particularly interesting, and any definitive resolution on
that point would have obvious ramifications not only to Daanbantayan, but all other
municipalities and cities. However, we must first determine the proper scope of judicial
inquiry that we could engage in, given the nature of the initiatory complaint and the
rulings rendered thereupon, the exact point raised in the second question.
Petitioners claim that the Court of Appeals, in declaring Ordinance No. 7 as invalid,
embarked on an unwarranted collateral attack on the validity of a municipal
ordinance.
[28]
Pereas complaint, which was for damages with preliminary injunction,
did not pray for the nullity of Ordinance No. 7. The Municipality of Daanbantayan as a
local government unit was not made a party to the case, nor did any legal counsel on its
behalf enter any appearance. Neither was the Office of the Solicitor General given any
notice of the case.
[29]

These concerns are not trivial.
[30]
Yet, we must point out that the Court of Appeals
did not expressly nullify Ordinance No. 7, or any ordinance for that matter. What the
appellate court did was to say that Ordinance No. 7 should therefore be held
invalid for being in violation of the Cockfighting Law.
[31]
In the next breath though, the
Court of Appeals backtracked, saying that this issue appears to have been mooted by the
expiration of the Mayors Permit granted to Tan.
[32]

But our curiosity is aroused by the dispositive portion of the assailed Decision,
wherein the Court of Appeals enjoined Tan from operating a cockpit and conducting any
cockfights within Daanbantayan.
[33]
Absent the invalidity of Ordinance No. 7, there
would be no basis for this injunction. After all, any future operation of a cockpit by Tan in
Daanbantayan, assuming all other requisites are complied with, would be validly
authorized should Ordinance No. 7 subsist.
So it seems, for all intents and purposes, that the Court of Appeals did deem
Ordinance No. 7 a nullity. Through such resort, did the appellate court in effect allow a
collateral attack on the validity of an ordinance through an action for damages, as the
petitioners argue?
The initiatory Complaint filed by Perea deserves close scrutiny. Immediately, it
can be seen that it is not only an action for damages, but also one for injunction. An
action for injunction will require judicial determination whether there exists a right
in esse which is to be protected, and if there is an act constituting a violation of such right
against which injunction is sought. At the same time, the mere fact of injury alone does
not give rise to a right to recover damages. To warrant the recovery of damages, there
must be both a right of action for a legal wrong inflicted by the defendant, and damage
resulting to the plaintiff therefrom. In other words, in order that the law will give redress
for an act causing damage, there must be damnum et injuria
hurtful, but wrongful.
[34]

Indubitably, the determination of whether injunction or damages avail in this case
requires the ascertainment of whether a second cockpit may be legally allowed in
Daanbantayan. If this is permissible, Perea would not be entitled either to injunctive
relief or damages.
Moreover, an examination of the specific allegations in the Complaint reveals that
Perea therein puts into question the legal basis for allowing Tan to operate another
cockpit in Daanbantayan. She asserted that there is no lawful basis for the
establishment of a second cockpit considering the small population of
[Daanbantayan],
[35]
a claim which alludes to Section 5(b) of the Cockfighting Law which
prohibits the establishment of a second cockpit in municipalities of less than ten
thousand (10,000) in population. Perea likewise assails the validity of the permit issued
to Tan and prays for its annulment, and also seeks that Te be enjoined from issuing any
special permit not only to Tan, but also to any other person outside of a duly licensed
cockpit in Daanbantayan, Cebu.
[36]

It would have been preferable had Perea expressly sought the annulment of
Ordinance No. 7. Yet it is apparent from her Complaint that she sufficiently alleges that
there is no legal basis for the establishment of a second cockpit. More importantly, the
petitioners themselves raised the valid effect of Ordinance No. 7 at the heart of their
defense against the complaint, as adverted to in their Answer.
[37]
The averment in
the Answer that Ordinance No. 7 is valid can be considered as an affirmative defense, as it
is the allegation of a new matter which, while hypothetically admitting the material
allegations in the complaint, would nevertheless bar recovery.
[38]
Clearly then, the
validity of Ordinance No. 7 became a justiciable matter for the RTC, and indeed Perea
squarely raised the argument during trial that said ordinance violated the Cockfighting
Law.
[39]

Moreover, the assailed rulings of the RTC, its Decision and
subsequent Order denying Pereas Motion for Reconsideration, both discuss the validity
of Ordinance No. 7. In the Decision, the RTC evaded making a categorical ruling on the
ordinances validity because the case was only for damages, [thus the RTC could] not
grant more relief than that prayed for. This reasoning is unjustified, considering that
Perea also prayed for an injunction, as well as for the annulment of Tans permit. The
resolution of these two questions could very well hinge on the validity of Ordinance No.
7.
Still, in the Order denying Pereas Motion for Reconsideration, the RTC felt less
inhibited and promptly declared as valid not only Ordinance No. 7, but also Resolution
No. 78-96 of the Sangguniang Bayan dated 23 February 1996, which conferred on Tan a
franchise to operate a cockpit from 1996 to 2006.
[40]
In the Order, the RTC ruled that
while Ordinance No. 7 was in apparent conflict with the Cockfighting Law, the ordinance
was justified under Section 447(a)(3)(v) of the Local Government Code.
This express affirmation of the validity of Ordinance No. 7 by the RTC was the first
assigned error in Pereas appeal to the Court of Appeals.
[41]
In their Appellees
Briefbefore the appellate court, the petitioners likewise argued that Ordinance No. 7 was
valid and that the Cockfighting Law was repealed by the Local Government Code.
[42]
On
the basis of these arguments, the Court of Appeals rendered its assailed Decision,
including its ruling that the Section 5(b) of the Cockfighting Law remains in effect
notwithstanding the enactment of the Local Government Code.
Indubitably, the question on the validity of Ordinance No. 7 in view of the
continuing efficacy of Section 5(b) of the Cockfighting Law is one that has been fully
litigated in the courts below. We are comfortable with reviewing that question in the
case at bar and make dispositions proceeding from that key legal question. This is
militated by the realization that in order to resolve the question whether injunction
should be imposed against the petitioners, there must be first a determination whether
Tan may be allowed to operate a second cockpit in Daanbantayan. Thus, the conflict
between Section 5(b) of the Cockfighting Law and Ordinance No. 7 now ripens for
adjudication.
In arguing that Section 5(b) of the Cockfighting Law has been repealed, petitioners
cite the following provisions of Section 447(a)(3)(v) of the Local Government Code:
Section 447. Powers, Duties, Functions and Compensation. (a) The sangguniang bayan, as
the legislative body of the municipality, shall enact ordinances, approve resolutions and
appropriate funds for the general welfare of the municipality and its inhabitants
pursuant to Section 16 of this Code and in the proper exercise of the corporate powers of
the municipality as provided for under Section 22 of this Code, and shall:
. . . .
(3) Subject to the provisions of Book II of this Code, grant franchises, enact ordinances
authorizing the issuance of permits or licenses, or enact ordinances levying taxes, fees
and charges upon such conditions and for such purposes intended to promote the
general welfare of the inhabitants of the municipality, and pursuant to this legislative
authority shall:
. . . .
(v) Any law to the contrary notwithstanding, authorize and
license the establishment, operation, and maintenance of
cockpits, and regulate cockfighting and commercial breeding of
gamecocks; Provided, that existing rights should not be
prejudiced;
For the petitioners, Section 447(a)(3)(v) sufficiently repeals Section 5(b) of the
Cockfighting Law, vesting as it does on LGUs the power and authority to issue franchises
and regulate the operation and establishment of cockpits in their respective
municipalities, any law to the contrary notwithstanding.
However, while the Local Government Code expressly repealed several laws, the
Cockfighting Law was not among them. Section 534(f) of the Local Government Code
declares that all general and special laws or decrees inconsistent with the Code are
hereby repealed or modified accordingly, but such clause is not an express repealing
clause because it fails to identify or designate the acts that are intended to be
repealed.
[43]
It is a cardinal rule in statutory construction that implied repeals are
disfavored and will not be so declared unless the intent of the legislators is
manifest.
[44]
As laws are presumed to be passed with deliberation and with knowledge
of all existing ones on the subject, it is logical to conclude that in passing a statute it is not
intended to interfere with or abrogate a former law relating to the same subject matter,
unless the repugnancy between the two is not only irreconcilable but also clear and
convincing as a result of the language used, or unless the latter Act fully embraces the
subject matter of the earlier.
[45]

Is the one-cockpit-per-municipality rule under the Cockfighting Law clearly and
convincingly irreconcilable with Section 447(a)(3)(v) of the Local Government Code?
The clear import of Section 447(a)(3)(v) is that it is the sangguniang bayan which is
empowered to authorize and license the establishment, operation and maintenance of
cockpits, and regulate cockfighting and commercial breeding of gamecocks,
notwithstanding any law to the contrary. The necessity of the qualifying phrase any law
to the contrary notwithstanding can be discerned by examining the history of laws
pertaining to the authorization of cockpit operation in this country.
Cockfighting, or sabong in the local parlance, has a long and storied tradition in our
culture and was prevalent even during the Spanish occupation. When the newly-arrived
Americans proceeded to organize a governmental structure in the Philippines, they
recognized cockfighting as an activity that needed to be regulated, and it was deemed
that it was the local municipal council that was best suited to oversee such regulation.
Hence, under Section 40 of Act No. 82, the general act for the organization of municipal
governments promulgated in 1901, the municipal council was empowered to license,
tax or close cockpits. This power of the municipal council to authorize or license
cockpits was repeatedly recognized even after the establishment of the present Republic
in 1946.
[46]
Such authority granted unto the municipal councils to license the operation
of cockpits was generally unqualified by restrictions.
[47]
The Revised Administrative
Code did impose restrictions on what days cockfights could be held.
[48]

However, in the 1970s, the desire for stricter licensing requirements of cockpits
started to see legislative fruit. The Cockfighting Law of 1974 enacted several of these
restrictions. Apart from the one-cockpit-per-municipality rule, other restrictions were
imposed, such as the limitation of ownership of cockpits to Filipino citizens.
[49]
More
importantly, under Section 6 of the Cockfighting Law, it was the city or municipal mayor
who was authorized to issue licenses for the operation and maintenance of cockpits,
subject to the approval of the Chief of Constabulary or his authorized
representatives.
[50]
Thus, the sole discretion to authorize the operation of cockpits was
removed from the local government unit since the approval of the Chief of Constabulary
was now required.
P.D. No. 1802 reestablished the Philippine Gamefowl Commission
[51]
and imposed
further structure in the regulation of cockfighting. Under Section 4 thereof, city and
municipal mayors with the concurrence of their respective sangguniang panglunsod or
sangguniang bayan, were given the authority to license and regulate cockfighting, under
the supervision of the City Mayor or the Provincial Governor. However, Section 4 of P.D.
No. 1802 was subsequently amended, removing the supervision exercised by the mayor
or governor and substituting in their stead the Philippine Gamefowl Commission. The
amended provision ordained:
Sec. 4. City and Municipal Mayors with the concurrence of their respective Sanggunians
shall have the authority to license and regulate regular cockfighting pursuant to the rules
and regulations promulgated by the Commission and subject to its review and
supervision.
The Court, on a few occasions prior to the enactment of the Local Government Code
in 1991, had opportunity to expound on Section 4 as amended. A discussion of these
cases will provide a better understanding of the qualifier any law to the contrary
notwithstanding provided in Section 447(a)(3)(v).
In Philippine Gamefowl Commission v. Intermediate Appellate Court,
[52]
the Court,
through Justice Cruz, asserted that the conferment of the power to license and regulate
municipal cockpits in municipal authorities is in line with the policy of local autonomy
embodied in the Constitution.
[53]
The Court affirmed the annulment of a resolution of the
Philippine Gamefowl Commission which ordered the revocation of a permit issued by a
municipal mayor for the operation of a cockpit and the issuance of a new permit to a
different applicant. According to the Court, the Philippine Gamefowl Commission did not
possess the power to issue cockpit licenses, as this was vested by Section 4 of P.D. No.
1802, as amended, to the municipal mayor with the concurrence of the sanggunian. It
emphasized that the Philippine Gamefowl Commission only had review and supervision
powers, as distinguished from control, over ordinary cockpits.
[54]
The Court also noted
that the regulation of cockpits was vested in municipal officials, subject only to the
guidelines laid down by the Philippine Gamefowl Commission.
[55]
The Court conceded
that [if] at all, the power to review includes the power to disapprove; but it does not
carry the authority to substitute ones own preferences for that chosen by the
subordinate in the exercise of its sound discretion.
The twin pronouncements that it is the municipal authorities who are empowered
to issue cockpit licenses and that the powers of the Philippine Gamefowl Commission
were limited to review and supervision were affirmed in Deang v. Intermediate Appellate
Court,
[56]
Municipality of Malolos v. Libangang Malolos Inc.
[57]
and Adlawan v. Intermediate
Appellate Court.
[58]
But notably in Cootauco v. Court of Appeals,
[59]
the Court especially
noted that Philippine Gamefowl Commission did indicate that the Commissions power of
review includes the power to disapprove.
[60]
Interestingly, Justice Cruz, the writer
of Philippine Gamefowl Commission, qualified his concurrence in Cootauco subject to the
reservations made in [Philippine Gamefowl Commission] regarding the review powers of
the PGC over cockpit licenses issued by city and municipal mayors.
[61]

These cases reiterate what has been the traditional prerogative of municipal
officials to control the issuances of licenses for the operation of cockpits. Nevertheless,
the newly-introduced role of the Philippine Gamefowl Commission vis--vis the
operation of cockpits had caused some degree of controversy, as shown by the cases
above cited.
Then, the Local Government Code of 1991 was enacted. There is no more forceful
authority on this landmark legislation than Senator Aquilino Pimentel, Jr., its principal
author. In his annotations to the Local Government Code, he makes the following
remarks relating to Section 447(a)(3)(v):
12. Licensing power. In connection with the power to grant licenses lodged with it, the
Sangguniang Bayan may now regulate not only businesses but also occupations,
professions or callings that do not require government examinations within its
jurisdiction. It may also authorize and license the establishment, operation and
maintenance of cockpits, regulate cockfighting, and the commercial breeding of
gamecocks. Existing rights however, may not be prejudiced. The power to license
cockpits and permits for cockfighting has been removed completely from the
Gamefowl Commission.
Thus, that part of the ruling of the Supreme Court in the case of Municipality of
Malolos v. Libangang Malolos, Inc. et al., which held that the regulation of
cockpits is vested in the municipal councils guidelines laid down by the Philippine
Gamefowl Commission is no longer controlling. Under [Section 447(a)(3)(v)], the
power of the Sanggunian concerned is no longer subject to the supervision of the
Gamefowl Commission.
[62]

The above observations may be faulted somewhat in the sense that they fail to
acknowledge the Courts consistent position that the licensing power over cockpits
belongs exclusively to the municipal authorities and not the Philippine Gamefowl
Commission. Yet these views of Senator Pimentel evince the apparent confusion
regarding the role of the Philippine Gamefowl Commission as indicated in the cases
previously cited, and accordingly bring the phrase Section 447(a)(3)(v) used in any law
to the contrary notwithstanding into its proper light. The qualifier serves notice, in case
it was still doubtful, that it is the sanggunian bayan concerned alone which has the power
to authorize and license the establishment, operation and maintenance of cockpits, and
regulate cockfighting and commercial breeding of gamecocks within its territorial
jurisdiction.
Given the historical perspective, it becomes evident why the legislature found the
need to use the phrase any law to the contrary notwithstanding in Section
447(a)(3)(v). However, does the phrase similarly allow the Sangguniang Bayan to
authorize more cockpits than allowed under Section 5(d) of the Cockfighting Law?
Certainly, applying the test of implied repeal, these two provisions can stand together.
While the sanggunian retains the power to authorize and license the establishment,
operation, and maintenance of cockpits, its discretion is limited in that it cannot
authorize more than one cockpit per city or municipality, unless such cities or
municipalities have a population of over one hundred thousand, in which case two
cockpits may be established. Considering that Section 447(a)(3)(v) speaks essentially of
the identity of the wielder of the power of control and supervision over cockpit
operation, it is not inconsistent with previous enactments that impose restrictions on
how such power may be exercised. In short, there is no dichotomy between affirming
the power and subjecting it to limitations at the same time.
Perhaps more essential than the fact that the two controverted provisions are not
inconsistent when put together, the Court recognizes that Section 5(d) of the
Cockfighting Law arises from a valid exercise of police power by the national
government. Of course, local governments are similarly empowered under Section 16 of
the Local Government Code. The national government ought to be attuned to the
sensitivities of devolution and strive to be sparing in usurping the prerogatives of local
governments to regulate the general welfare of their constituents.
We do not doubt, however, the ability of the national government to implement
police power measures that affect the subjects of municipal government, especially if the
subject of regulation is a condition of universal character irrespective of territorial
jurisdictions. Cockfighting is one such condition. It is a traditionally regulated activity,
due to the attendant gambling involved
[63]
or maybe even the fact that it essentially
consists of two birds killing each other for public amusement. Laws have been enacted
restricting the days when cockfights could be held,
[64]
and legislation has even been
emphatic that cockfights could not be held on holidays celebrating national honor such
as Independence Day
[65]
and Rizal Day.
[66]

The Whereas clauses of the Cockfighting Law emphasize that cockfighting should
neither be exploited as an object of commercialism or business enterprise, nor made a
tool of uncontrolled gambling, but more as a vehicle for the preservation and
perpetuation of native Filipino heritage and thereby enhance our national
identity.
[67]
The obvious thrust of our laws designating when cockfights could be held is
to limit cockfighting and imposing the one-cockpit-per-municipality rule is in line with
that aim. Cockfighting is a valid matter of police power regulation, as it is a form of
gambling essentially antagonistic to the aims of enhancing national productivity and self-
reliance.
[68]
Limitation on the number of cockpits in a given municipality is a reasonably
necessary means for the accomplishment of the purpose of controlling cockfighting, for
clearly more cockpits equals more cockfights.
If we construe Section 447(a)(3)(v) as vesting an unlimited discretion to the
sanggunian to control all aspects of cockpits and cockfighting in their respective
jurisdiction, this could lead to the prospect of daily cockfights in municipalities, a certain
distraction in the daily routine of life in a municipality. This certainly goes against the
grain of the legislation earlier discussed. If the arguments of the petitioners were
adopted, the national government would be effectively barred from imposing any future
regulatory enactments pertaining to cockpits and cockfighting unless it were to repeal
Section 447(a)(3)(v).
A municipal ordinance must not contravene the Constitution or any statute,
otherwise it is void.
[69]
Ordinance No. 7 unmistakably contravenes the Cockfighting Law
in allowing three cockpits in Daanbantayan. Thus, no rights can be asserted by the
petitioners arising from the Ordinance. We find the grant of injunction as ordered by the
appellate court to be well-taken.
WHEREFORE, the petition is DENIED. Costs against petitioners.
SO ORDERED.

Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. 138810 September 29, 2004
BATANGAS CATV, INC., petitioner,
vs.
THE COURT OF APPEALS, THE BATANGAS CITY SANGGUNIANG PANLUNGSOD and
BATANGAS CITY MAYOR, respondents.
D E C I S I O N
SANDOVAL-GUTIERREZ, J.:
In the late 1940s, John Walson, an appliance dealer in Pennsylvania, suffered a decline in
the sale of television (tv) sets because of poor reception of signals in his community.
Troubled, he built an antenna on top of a nearby mountain. Using coaxial cable lines, he
distributed the tv signals from the antenna to the homes of his customers. Walsons
innovative idea improved his sales and at the same time gave birth to a new
telecommunication system -- the Community Antenna Television (CATV) or Cable
Television.
1

This technological breakthrough found its way in our shores and, like in its country of
origin, it spawned legal controversies, especially in the field of regulation. The case at bar
is just another occasion to clarify a shady area. Here, we are tasked to resolve the inquiry
-- may a local government unit (LGU) regulate the subscriber rates charged by CATV
operators within its territorial jurisdiction?
This is a petition for review on certiorari filed by Batangas CATV, Inc. (petitioner herein)
against the Sangguniang Panlungsod and the Mayor of Batangas City (respondents
herein) assailing the Court of Appeals (1) Decision
2
dated February 12, 1999
and (2) Resolution
3
dated May 26, 1999, in CA-G.R. CV No. 52361.
4
The Appellate Court
reversed and set aside the Judgment
5
dated October 29, 1995 of the Regional Trial Court
(RTC), Branch 7, Batangas City in Civil Case No. 4254,
6
holding that neither of the
respondents has the power to fix the subscriber rates of CATV operators, such being
outside the scope of the LGUs power.
The antecedent facts are as follows:
On July 28, 1986, respondent Sangguniang Panlungsod enacted Resolution No.
210
7
granting petitioner apermit to construct, install, and operate a CATV
system in Batangas City. Section 8 of the Resolution provides that petitioner is
authorized to charge its subscribers the maximum rates specified therein,
"provided, however, that any increase of rates shall be subject to the approval
of the Sangguniang Panlungsod."
8

Sometime in November 1993, petitioner increased its subscriber rates from P88.00
to P180.00 per month. As a result, respondent Mayor wrote petitioner a
letter
9
threatening to cancel its permit unless it secures the approval of respondent
Sangguniang Panlungsod, pursuant to Resolution No. 210.
Petitioner then filed with the RTC, Branch 7, Batangas City, a petition for injunction
docketed as Civil Case No. 4254. It alleged that respondent Sangguniang Panlungsod has
no authority to regulate the subscriber rates charged by CATV operators because under
Executive Order No. 205, the National Telecommunications Commission (NTC) has the
sole authority to regulate the CATV operation in the Philippines.
On October 29, 1995, the trial court decided in favor of petitioner, thus:
"WHEREFORE, as prayed for, the defendants, their representatives, agents,
deputies or other persons acting on their behalf or under their instructions, are
hereby enjoined from canceling plaintiffs permit to operate a Cable
Antenna Television (CATV) system in the City of Batangas or its environs
or in any manner, from interfering with the authority and power of the
National Telecommunications Commission to grant franchises to operate
CATV systems to qualified applicants, and the right of plaintiff in fixing its
service rates which needs no prior approval of the Sangguniang
Panlungsod of Batangas City.
The counterclaim of the plaintiff is hereby dismissed. No pronouncement as to
costs.
IT IS SO ORDERED."
10

The trial court held that the enactment of Resolution No. 210 by respondent violates the
States deregulation policy as set forth by then NTC Commissioner Jose Luis A. Alcuaz in
his Memorandum dated August 25, 1989. Also, it pointed out that the sole agency of the
government which can regulate CATV operation is the NTC, and that the LGUs cannot
exercise regulatory power over it without appropriate legislation.
Unsatisfied, respondents elevated the case to the Court of Appeals, docketed as CA-G.R.
CV No. 52361.
On February 12, 1999, the Appellate Court reversed and set aside the trial courts
Decision, ratiocinating as follows:
"Although the Certificate of Authority to operate a Cable Antenna
Television (CATV) System is granted by the National Telecommunications
Commission pursuant to Executive Order No. 205, this does not preclude
the Sangguniang Panlungsod from regulating the operation of the CATV in
their locality under the powers vested upon it by Batas Pambansa Bilang
337, otherwise known as the Local Government Code of 1983. Section 177
(now Section 457 paragraph 3 (ii) of Republic Act 7160) provides:
Section 177. Powers and Duties The Sangguniang Panlungsod
shall:
a) Enact such ordinances as may be necessary to carry into
effect and discharge the responsibilities conferred upon it by
law, and such as shall be necessary and proper to provide for
health and safety, comfort and convenience, maintain peace
and order, improve the morals, and promote the prosperity
and general welfare of the community and the inhabitants
thereof, and the protection of property therein;
x x x
d) Regulate, fix the license fee for, and tax any business or
profession being carried on and exercised within the
territorial jurisdiction of the city, except travel agencies,
tourist guides, tourist transports, hotels, resorts, de luxe
restaurants, and tourist inns of international standards
which shall remain under the licensing and regulatory
power of the Ministry of Tourism which shall exercise such
authority without infringement on the taxing and regulatory
powers of the city government;
Under cover of the General Welfare Clause as provided in this section, Local
Government Units can perform just about any power that will benefit their
constituencies. Thus, local government units can exercise powers that
are: (1) expressly granted; (2) necessarily implied from the power that is
expressly granted; (3)necessary, appropriate or incidental for its efficient and
effective governance; and (4) essential to the promotion of the general welfare
of their inhabitants. (Pimentel, The Local Government Code of 1991, p. 46)
Verily, the regulation of businesses in the locality is expressly provided in
the Local Government Code. The fixing of service rates is lawful under the
General Welfare Clause.
Resolution No. 210 granting appellee a permit to construct, install and operate
a community antenna television (CATV) system in Batangas City as quoted
earlier in this decision, authorized the grantee to impose charges which cannot
be increased except upon approval of the Sangguniang Bayan. It further
provided that in case of violation by the grantee of the terms and
conditions/requirements specifically provided therein, the City shall have the
right to withdraw the franchise.
Appellee increased the service rates from EIGHTY EIGHT PESOS (P88.00) to
ONE HUNDRED EIGHTY PESOS (P180.00) (Records, p. 25) without the approval
of appellant. Such act breached Resolution No. 210 which gives appellant
the right to withdraw the permit granted to appellee."
11

Petitioner filed a motion for reconsideration but was denied.
12

Hence, the instant petition for review on certiorari anchored on the following
assignments of error:
"I
THE COURT OF APPEALS ERRED IN HOLDING THAT THE GENERAL
WELFARE CLAUSE of the LOCAL GOVERNMENT CODE AUTHORIZES
RESPONDENT SANGGUNIANG PANLUNGSOD TO EXERCISE THE
REGULATORY FUNCTION SOLELY LODGED WITH THE NATIONAL
TELECOMMUNICATIONS COMMISSION UNDER EXECUTIVE ORDER NO. 205,
INCLUDING THE AUTHORITY TO FIX AND/OR APPROVE THE SERVICE
RATES OF CATV OPERATORS; AND
II
THE COURT OF APPEALS ERRED IN REVERSING THE DECISION APPEALED
FROM AND DISMISSING PETITIONERS COMPLAINT."
13

Petitioner contends that while Republic Act No. 7160, the Local Government Code of
1991, extends to the LGUs the general power to perform any act that will benefit their
constituents, nonetheless, it does not authorize them to regulate the CATV operation.
Pursuant to E.O. No. 205, only the NTC has the authority to regulate the CATV operation,
including the fixing of subscriber rates.
Respondents counter that the Appellate Court did not commit any reversible error in
rendering the assailed Decision. First, Resolution No. 210 was enacted pursuant to
Section 177(c) and (d) of Batas Pambansa Bilang 337, the Local Government Code of
1983, which authorizes LGUs to regulate businesses. The term "businesses" necessarily
includes the CATV industry. And second, Resolution No. 210 is in the nature of a contract
between petitioner and respondents, it being a grant to the former of a franchise to
operate a CATV system. To hold that E.O. No. 205 amended its terms would violate the
constitutional prohibition against impairment of contracts.
14

The petition is impressed with merit.
Earlier, we posed the question -- may a local government unit (LGU) regulate the
subscriber rates charged by CATV operators within its territorial jurisdiction? A review
of pertinent laws and jurisprudence yields a negative answer.
President Ferdinand E. Marcos was the first one to place the CATV industry under the
regulatory power of the national government.
15
On June 11, 1978, he
issued Presidential Decree (P.D.) No. 1512
16
establishing a monopoly of the industry
by granting Sining Makulay, Inc., an exclusive franchise to operate CATV system in any
place within the Philippines. Accordingly, it terminated all franchises, permits or
certificates for the operation of CATV system previously granted by local governments or
by any instrumentality or agency of the national government.
17
Likewise, it prescribed
the subscriber rates to be charged by Sining Makulay, Inc. to its customers.
18

On July 21, 1979, President Marcos issued Letter of Instruction (LOI) No. 894 vesting
upon the Chairman of the Board of Communications direct supervision over the
operations of Sining Makulay, Inc. Three days after, he issued E.O. No. 546
19
integrating
the Board of Communications
20
and the Telecommunications Control Bureau
21
to form a
single entity to be known as the "National Telecommunications Commission." Two of its
assigned functions are:
"a. Issue Certificate of Public Convenience for the operation of communications
utilities and services, radio communications systems, wire or wireless
telephone or telegraph systems, radio and television broadcasting system and
other similar public utilities;
b. Establish, prescribe and regulate areas of operation of particular operators of
public service communications; and determine and prescribe charges or rates
pertinent to the operation of such public utility facilities and services except in
cases where charges or rates are established by international bodies or
associations of which the Philippines is a participating member or by bodies
recognized by the Philippine Government as the proper arbiter of such charges
or rates;"
Although Sining Makulay Inc.s exclusive franchise had a life term of 25 years, it was cut
short by the advent of the 1986 Revolution. Upon President Corazon C. Aquinos
assumption of power, she issued E.O. No. 205
22
opening the CATV industry to all citizens
of the Philippines. It mandated the NTC to grant Certificates of Authority to CATV
operators and to issue the necessary implementing rules and regulations.
On September 9, 1997, President Fidel V. Ramos issued E.O. No. 436
23
prescribing policy
guidelines to govern CATV operation in the Philippines. Cast in more definitive terms, it
restated the NTCs regulatory powers over CATV operations, thus:
"SECTION 2. The regulation and supervision of the cable television industry
in the Philippines shall remain vested solely with the National
Telecommunications Commission (NTC).
SECTION 3. Only persons, associations, partnerships, corporations or
cooperatives, granted a Provisional Authority or Certificate of Authority by the
Commission may install, operate and maintain a cable television system or
render cable television service within a service area."
Clearly, it has been more than two decades now since our national government, through
the NTC, assumed regulatory power over the CATV industry. Changes in the political
arena did not alter the trend. Instead, subsequent presidential issuances further
reinforced the NTCs power. Significantly, President Marcos and President Aquino, in the
exercise of their legislative power, issued P.D. No. 1512, E.O. No. 546 and E.O. No. 205.
Hence, they have the force and effect of statutes or laws passed by Congress.
24
That the
regulatory power stays with the NTC is also clear from President Ramos E.O. No. 436
mandating that the regulation and supervision of the CATV industry shall remain vested
"solely" in the NTC. Blacks Law Dictionary defines "sole" as "without another or
others."
25
The logical conclusion, therefore, is that in light of the above laws and
E.O. No. 436, the NTC exercises regulatory power over CATV operators to the
exclusion of other bodies.
But, lest we be misunderstood, nothing herein should be interpreted as to strip LGUs of
their general power to prescribe regulations under the general welfare clause of the
Local Government Code. It must be emphasized that when E.O. No. 436 decrees that the
"regulatory power" shall be vested "solely" in the NTC, it pertains to the "regulatory
power" over those matters which are peculiarly within the NTCs competence, such as,
the: (1) determination of rates, (2) issuance of "certificates of authority, (3)
establishment of areas of operation, (4) examination and assessment of the legal,
technical and financial qualifications of applicant operators, (5) granting of permits for
the use of frequencies, (6) regulation of ownership and operation, (7) adjudication of
issues arising from its functions, and (8) other similar matters.
26
Within these areas, the
NTC reigns supreme as it possesses the exclusive power to regulate -- a power
comprising varied acts, such as "to fix, establish, or control; to adjust by rule, method or
established mode; to direct by rule or restriction; or to subject to governing principles or
laws."
27

Coincidentally, respondents justify their exercise of regulatory power over petitioners
CATV operation under the general welfare clause of the Local Government Code of 1983.
The Court of Appeals sustained their stance.
There is no dispute that respondent Sangguniang Panlungsod, like other local legislative
bodies, has been empowered to enact ordinances and approve resolutions under the
general welfare clause of B.P. Blg. 337, the Local Government Code of 1983. That it
continues to posses such power is clear under the new law, R.A. No. 7160 (the Local
Government Code of 1991). Section 16 thereof provides:
"SECTION 16. General Welfare. Every local government unit shall exercise the
powers expressly granted, those necessarily implied therefrom, as well as
powers necessary, appropriate, or incidental for its efficient and effective
governance, and those which are essential to the promotion of the general
welfare. Within their respective territorial jurisdictions, local government units
shall ensure and support, among others, the preservation and enrichment of
culture, promote health and safety, enhance the right of the people to a
balanced ecology, encourage and support the development of appropriate and
self-reliant, scientific and technological capabilities, improve public morals,
enhance economic prosperity and social justice, promote full employment
among their residents, maintain peace and order, and preserve the comfort and
convenience of their inhabitants."
In addition, Section 458 of the same Code specifically mandates:
"SECTION 458. Powers, Duties, Functions and Compensation. (a)
The Sangguniang Panlungsod, as the legislative body of the city, shall enact
ordinances, approve resolutions and appropriate funds for the general welfare
of the city and its inhabitants pursuant to Section 16 of this Code and in the
proper exercise of the corporate powers of the city as provided for under
Section 22 of this Code, x x x:"
The general welfare clause is the delegation in statutory form of the police power
of the State to LGUs.
28
Through this, LGUs may prescribe regulations to protect the lives,
health, and property of their constituents and maintain peace and order within their
respective territorial jurisdictions. Accordingly, we have upheld enactments providing,
for instance, the regulation of gambling,
29
the occupation of rig drivers,
30
the installation
and operation of pinball machines,
31
the maintenance and operation of cockpits,
32
the
exhumation and transfer of corpses from public burial grounds,
33
and the operation of
hotels, motels, and lodging houses
34
as valid exercises by local legislatures of the police
power under the general welfare clause.
Like any other enterprise, CATV operation maybe regulated by LGUs under the general
welfare clause. This is primarily because the CATV system commits the indiscretion of
crossing public properties. (It uses public properties in order to reach subscribers.) The
physical realities of constructing CATV system the use of public streets, rights of ways,
the founding of structures, and the parceling of large regions allow an LGU a certain
degree of regulation over CATV operators.
35
This is the same regulation that it exercises
over all private enterprises within its territory.
But, while we recognize the LGUs power under the general welfare clause, we cannot
sustain Resolution No. 210. We are convinced that respondents strayed from the well
recognized limits of its power. The flaws in Resolution No. 210 are: (1) it violates the
mandate of existing laws and (2) it violates the States deregulation policy over the CATV
industry.
I.
Resolution No. 210 is an enactment of an LGU acting only as agent of the national
legislature. Necessarily, its act must reflect and conform to the will of its principal. To
test its validity, we must apply the particular requisites of a valid ordinance as laid down
by the accepted principles governing municipal corporations.
36

Speaking for the Court in the leading case of United States vs. Abendan,
37
Justice
Moreland said: "An ordinance enacted by virtue of the general welfare clause is valid,
unless it contravenes the fundamental law of the Philippine Islands, or an Act of the
Philippine Legislature, or unless it is against public policy, or is unreasonable,
oppressive, partial, discriminating, or in derogation of common right." In De la Cruz vs.
Paraz,
38
we laid the general rule "that ordinances passed by virtue of the implied power
found in the general welfare clause must be reasonable, consonant with the general
powers and purposes of the corporation, and not inconsistent with the laws or policy of
the State."
The apparent defect in Resolution No. 210 is that it contravenes E.O. No. 205 and E.O. No.
436 insofar as it permits respondent Sangguniang Panlungsod to usurp a power
exclusively vested in the NTC, i.e., the power to fix the subscriber rates charged by CATV
operators. As earlier discussed, the fixing of subscriber rates is definitely one of the
matters within the NTCs exclusive domain.
In this regard, it is appropriate to stress that where the state legislature has made
provision for the regulation of conduct, it has manifested its intention that the subject
matter shall be fully covered by the statute, and that a municipality, under its general
powers, cannot regulate the same conduct.
39
In Keller vs. State,
40
it was held that: "Where
there is no express power in the charter of a municipality authorizing it to adopt
ordinances regulating certain matters which are specifically covered by a general statute,
a municipal ordinance, insofar as it attempts to regulate the subject which is completely
covered by a general statute of the legislature, may be rendered invalid. x x x Where the
subject is of statewide concern, and the legislature has appropriated the field and
declared the rule, its declaration is binding throughout the State." A reason advanced for
this view is that such ordinances are in excess of the powers granted to the municipal
corporation.
41

Since E.O. No. 205, a general law, mandates that the regulation of CATV operations shall
be exercised by the NTC, an LGU cannot enact an ordinance or approve a resolution in
violation of the said law.
It is a fundamental principle that municipal ordinances are inferior in status and
subordinate to the laws of the state. An ordinance in conflict with a state law of general
character and statewide application is universally held to be invalid.
42
The principle is
frequently expressed in the declaration that municipal authorities, under a general grant
of power, cannot adopt ordinances which infringe the spirit of a state law or repugnant
to the general policy of the state.
43
In every power to pass ordinances given to a
municipality, there is an implied restriction that the ordinances shall be consistent with
the general law.
44
In the language of Justice Isagani Cruz (ret.), this Court, in Magtajas vs.
Pryce Properties Corp., Inc.,
45
ruled that:
"The rationale of the requirement that the ordinances should not contravene a
statute is obvious. Municipal governments are only agents of the national
government. Local councils exercise only delegated legislative powers
conferred on them by Congress as the national lawmaking body. The delegate
cannot be superior to the principal or exercise powers higher than those of the
latter. It is a heresy to suggest that the local government units can undo the acts
of Congress, from which they have derived their power in the first place, and
negate by mere ordinance the mandate of the statute.
Municipal corporations owe their origin to, and derive their powers
and rights wholly from the legislature. It breathes into them the
breath of life, without which they cannot exist. As it creates, so it may
destroy. As it may destroy, it may abridge and control. Unless there is
some constitutional limitation on the right, the legislature might, by a
single act, and if we can suppose it capable of so great a folly and so
great a wrong, sweep from existence all of the municipal corporations
in the State, and the corporation could not prevent it. We know of no
limitation on the right so far as to the corporation themselves are
concerned. They are, so to phrase it, the mere tenants at will of the
legislature.
This basic relationship between the national legislature and the local
government units has not been enfeebled by the new provisions in the
Constitution strengthening the policy of local autonomy. Without meaning to
detract from that policy, we here confirm that Congress retains control of the
local government units although in significantly reduced degree now than
under our previous Constitutions. The power to create still includes the power
to destroy. The power to grant still includes the power to withhold or recall.
True, there are certain notable innovations in the Constitution, like the direct
conferment on the local government units of the power to tax, which cannot
now be withdrawn by mere statute. By and large, however, the national
legislature is still the principal of the local government units, which
cannot defy its will or modify or violate it."
Respondents have an ingenious retort against the above disquisition. Their theory is that
the regulatory power of the LGUs is granted by R.A. No. 7160 (the Local Government
Code of 1991), a handiwork of the national lawmaking authority. They contend that R.A.
No. 7160 repealed E.O. No. 205 (issued by President Aquino). Respondents argument
espouses a bad precedent. To say that LGUs exercise the same regulatory power over
matters which are peculiarly within the NTCs competence is to promote a scenario of
LGUs and the NTC locked in constant clash over the appropriate regulatory measure on
the same subject matter. LGUs must recognize that technical matters concerning
CATV operation are within the exclusive regulatory power of the NTC.
At any rate, we find no basis to conclude that R.A. No. 7160 repealed E.O. No. 205, either
expressly or impliedly. It is noteworthy that R.A. No. 7160 repealing clause, which
painstakingly mentions the specific laws or the parts thereof which are repealed, does
not include E.O. No. 205, thus:
"SECTION 534. Repealing Clause. (a) Batas Pambansa Blg. 337, otherwise
known as the Local Government Code." Executive Order No. 112 (1987), and
Executive Order No. 319 (1988) are hereby repealed.
(b) Presidential Decree Nos. 684, 1191, 1508 and such other decrees, orders,
instructions, memoranda and issuances related to or concerning the barangay
are hereby repealed.
(c) The provisions of Sections 2, 3, and 4 of Republic Act No. 1939 regarding
hospital fund; Section 3, a (3) and b (2) of Republic Act. No. 5447 regarding the
Special Education Fund; Presidential Decree No. 144 as amended by
Presidential Decree Nos. 559 and 1741; Presidential Decree No. 231 as
amended; Presidential Decree No. 436 as amended by Presidential Decree No.
558; and Presidential Decree Nos. 381, 436, 464, 477, 526, 632, 752, and 1136
are hereby repealed and rendered of no force and effect.
(d) Presidential Decree No. 1594 is hereby repealed insofar as it governs
locally-funded projects.
(e) The following provisions are hereby repealed or amended insofar as they
are inconsistent with the provisions of this Code: Sections 2, 16, and 29 of
Presidential Decree No. 704; Section 12 of Presidential Decree No. 87, as
amended; Sections 52, 53, 66, 67, 68, 69, 70, 71, 72, 73, and 74 of Presidential
Decree No. 463, as amended; and Section 16 of Presidential Decree No. 972, as
amended, and
(f) All general and special laws, acts, city charters, decrees, executive orders,
proclamations and administrative regulations, or part or parts thereof which
are inconsistent with any of the provisions of this Code are hereby repealed or
modified accordingly."
Neither is there an indication that E.O. No. 205 was impliedly repealed by R.A. No. 7160.
It is a settled rule that implied repeals are not lightly presumed in the absence of a clear
and unmistakable showing of such intentions. In Mecano vs. Commission on Audit,
46
we
ruled:
"Repeal by implication proceeds on the premise that where a statute of later
date clearly reveals an intention on the part of the legislature to abrogate a
prior act on the subject, that intention must be given effect. Hence, before there
can be a repeal, there must be a clear showing on the part of the lawmaker that
the intent in enacting the new law was to abrogate the old one. The intention to
repeal must be clear and manifest; otherwise, at least, as a general rule, the
later act is to be construed as a continuation of, and not a substitute for, the
first act and will continue so far as the two acts are the same from the time of
the first enactment."
As previously stated, E.O. No. 436 (issued by President Ramos) vests upon the NTC the
power to regulate the CATV operation in this country. So also Memorandum Circular No.
8-9-95, the Implementing Rules and Regulations of R.A. No. 7925 (the "Public
Telecommunications Policy Act of the Philippines"). This shows that the NTCs regulatory
power over CATV operation is continuously recognized.
It is a canon of legal hermeneutics that instead of pitting one statute against another in
an inevitably destructive confrontation, courts must exert every effort to reconcile them,
remembering that both laws deserve a becoming respect as the handiwork of coordinate
branches of the government.
47
On the assumption of a conflict between E.O. No. 205 and
R.A. No. 7160, the proper action is not to uphold one and annul the other but to give
effect to both by harmonizing them if possible. This recourse finds application here.
Thus, we hold that the NTC, under E.O. No. 205, has exclusive jurisdiction over matters
affecting CATV operation, including specifically the fixing of subscriber rates, but nothing
herein precludes LGUs from exercising its general power, under R.A. No. 7160, to
prescribe regulations to promote the health, morals, peace, education, good order or
safety and general welfare of their constituents. In effect, both laws become equally
effective and mutually complementary.
The grant of regulatory power to the NTC is easily understandable. CATV system is not a
mere local concern. The complexities that characterize this new technology demand that
it be regulated by a specialized agency. This is particularly true in the area of rate-fixing.
Rate fixing involves a series of technical operations.
48
Consequently, on the hands of the
regulatory body lies the ample discretion in the choice of such rational processes as
might be appropriate to the solution of its highly complicated and technical problems.
Considering that the CATV industry is so technical a field, we believe that the NTC, a
specialized agency, is in a better position than the LGU, to regulate it. Notably, in United
States vs. Southwestern Cable Co.,
49
the US Supreme Court affirmed the Federal
Communications Commissions (FCCs) jurisdiction over CATV operation. The Court held
that the FCCs authority over cable systems assures the preservation of the local
broadcast service and an equitable distribution of broadcast services among the various
regions of the country.
II.
Resolution No. 210 violated the States deregulation policy.
Deregulation is the reduction of government regulation of business to permit freer
markets and competition.
50
Oftentimes, the State, through its regulatory agencies, carries
out a policy of deregulation to attain certain objectives or to address certain problems. In
the field of telecommunications, it is recognized that many areas in the Philippines are
still "unserved" or "underserved." Thus, to encourage private sectors to venture in this
field and be partners of the government in stimulating the growth and development of
telecommunications, the State promoted the policy of deregulation.
In the United States, the country where CATV originated, the Congress observed, when it
adopted the Telecommunications Act of 1996, that there was a need to provide a pro-
competitive, deregulatory national policy framework designed to accelerate rapidly
private sector deployment of advanced telecommunications and information
technologies and services to all Americans by opening all telecommunications markets to
competition. The FCC has adopted regulations to implement the requirements of the
1996 Act and the intent of the Congress.
Our country follows the same policy. The fifth Whereas Clause of E.O. No. 436 states:
"WHEREAS, professionalism and self-regulation among existing operators,
through a nationally recognized cable television operators association, have
enhanced the growth of the cable television industry and must therefore be
maintained along with minimal reasonable government regulations;"
This policy reaffirms the NTCs mandate set forth in the Memorandum dated August 25,
1989 of Commissioner Jose Luis A. Alcuaz, to wit:
"In line with the purpose and objective of MC 4-08-88, Cable Television System
or Community Antenna Television (CATV) is made part of the broadcast media
to promote the orderly growth of the Cable Television Industry it being in its
developing stage. Being part of the Broadcast Media, the service rates of CATV
are likewise considered deregulated in accordance with MC 06-2-81 dated 25
February 1981, the implementing guidelines for the authorization and
operation of Radio and Television Broadcasting stations/systems.
Further, the Commission will issue Provisional Authority to existing CATV
operators to authorize their operations for a period of ninety (90) days until
such time that the Commission can issue the regular Certificate of Authority."
When the State declared a policy of deregulation, the LGUs are bound to follow. To rule
otherwise is to render the States policy ineffective. Being mere creatures of the State,
LGUs cannot defeat national policies through enactments of contrary measures. Verily, in
the case at bar, petitioner may increase its subscriber rates without respondents
approval.
At this juncture, it bears emphasizing that municipal corporations are bodies politic and
corporate, created not only as local units of local self-government, but as governmental
agencies of the state.
51
The legislature, by establishing a municipal corporation, does not
divest the State of any of its sovereignty; absolve itself from its right and duty to
administer the public affairs of the entire state; or divest itself of any power over the
inhabitants of the district which it possesses before the charter was granted.
52

Respondents likewise argue that E.O. No. 205 violates the constitutional prohibition
against impairment of contracts, Resolution No. 210 of Batangas City Sangguniang
Panlungsod being a grant of franchise to petitioner.
We are not convinced.
There is no law specifically authorizing the LGUs to grant franchises to operate CATV
system. Whatever authority the LGUs had before, the same had been withdrawn when
President Marcos issued P.D. No. 1512 "terminating all franchises, permits or certificates
for the operation of CATV system previously granted by local governments." Today,
pursuant to Section 3 of E.O. No. 436, "only persons, associations, partnerships,
corporations or cooperatives granted a Provisional Authority or Certificate of Authority
by the NTC may install, operate and maintain a cable television system or render cable
television service within a service area." It is clear that in the absence of constitutional or
legislative authorization, municipalities have no power to grant
franchises.
53
Consequently, the protection of the constitutional provision as to
impairment of the obligation of a contract does not extend to privileges, franchises and
grants given by a municipality in excess of its powers, or ultra vires.
54

One last word. The devolution of powers to the LGUs, pursuant to the Constitutional
mandate of ensuring their autonomy, has bred jurisdictional tension between said LGUs
and the State. LGUs must be reminded that they merely form part of the whole. Thus,
when the Drafters of the 1987 Constitution enunciated the policy of ensuring the
autonomy of local governments,
55
it was never their intention to create an imperium in
imperio and install an intra-sovereign political subdivision independent of a single
sovereign state.
WHEREFORE, the petition is GRANTED. The assailed Decision of the Court of Appeals
dated February 12, 1999 as well as its Resolution dated May 26, 1999 in CA-G.R. CV No.
52461, are hereby REVERSED. The RTC Decision in Civil Case No. 4254 is AFFIRMED.
No pronouncement as to costs.
SO ORDERED.

Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 174588 December 11, 2013
DAV AO NEW TOWN DEVELOPMENT CORPORATION, Petitioner,
vs.
SPOUSES GLORIA ESPINO SALIGA and CESAR SALIGA, and SPOUSES DEMETRIO
EHARA and ROBERTA SUGUE EHARA, Respondents.
D E C I S I O N
BRION, J.:
We pass upon the petition for review on certiorari,
1
under Rule 45 of the Rules of Court,
challenging the March 28, 2006 decision
2
and the September 5, 2006 resolution
3
of the
Court of Appeals (CA) in CA-G.R. SP No. 79377. This CA ruling affirmed the January 12,
2001 decision
4
of the Department of Agrarian Reform Adjudication Board(DARAB) in
DARAB Case No. 7775. The DARAB set aside the July 6, 1998 decision
5
of the Provincial
Agrarian Reform Adjudicator (PARAD) that ruled in favor of petitioner Davao New Town
Development Corporation (DNTDC).
The Factual Antecedents
At the root of the present controversy are two parcels of land 4.9964 hectares
6
and
2.5574 hectares
7
(subject property) - situated in Catalunan Pequeo, Davao City and
originally registered in the name of Atty. Eugenio Mendiola (deceased).
On February 5, 1998,
8
the respondents - spouses Gloria Espino Saliga and Cesar
Saliga (spouses Saliga) and spouses Demetrio Ehara and Roberta Sugue Ehara (spouses
Ehara), (collectively referred to as respondents) - filed before the Office of the PARAD in
Davao City a complaint for injunction, cancellation of titles and damages against
DNTDC. They amended this complaint on February 13, 1998.
In their complaint and amended complaint, the respondents claimed that they and their
parents, from whom they took over the cultivation of the landholding, had been tenants
of the property as early as 1965. On August 12, 1981, the respondents and Eugenio
executed a five-year lease contract.
9
While they made stipulations regarding their
respective rights and obligations over the landholding, the respondents claimed that the
instrument was actually a device Eugenio used to evade the land reform law.
The respondents also argued that pursuant to the provisions of Presidential
Decree (P.D.) No. 27, they, as tenants, were deemed owners of the property beginning
October 21, 1972 (the Acts effectivity date); thus, the subsequent transfer of the
property to DNTDC was not valid. The respondents added that DNTDC could not have
been a buyer in good faith as it did not verify the status of the property whether
tenanted or not tenanted - prior to its purchase. The respondents submitted, among
others, the pertinent tax declarations showing that the property was agricultural as of
1985.
In its answer, DNTDC alleged in defense that it purchased the property in good faith from
the previous owners (Paz M. Flores and Elizabeth M. Nepumuceno)
10
in 1995. At that
time, the alleged tenancy relationship between the respondents and Eugenio had already
expired following the expiration of their lease contracts in 1986. DNTDC also claimed
that prior to the sale, the Davao City Office of the Zoning Administrator confirmed that
the property was not classified as agricultural; it pointed out that the affidavit of non-
tenancy executed by the vendors affirmed the absence of any recognized agricultural
lessees on the property. DNTDC added that the property had already been classified to
be within an "urban/urbanizing zone" in the "1979-2000 Comprehensive Land Use Plan
for Davao City"that was duly adopted by the City Council of Davao City and approved by
the Human Settlement Regulatory Commission (HSRC) (now the Housing and Land Use
Regulatory Board [HLURB]).
In its decision of July 6, 1998, the PARAD ordered the DNTDC to pay the spouses Saliga
the sum of 20,000.00 and the spouses Ehara the sum of 15,000.00 as disturbance
compensation, and to allocate to each of the respondent spouses a 150-square meter
homelot. While the PARAD conceded that the respondents were tenants of the property,
it nevertheless ruled that the property had already been reclassified from agricultural to
non-agricultural uses prior to June 15, 1988, the date when Republic Act (R.A.) No. 6657
(the Comprehensive Agrarian Reform Law of 1988) took effect. Thus, since R.A. No. 6657
covers only agricultural lands, the property fell outside its coverage.
The respondents appealed the case to the DARAB.
The ejectment case before the MTCC
Pending resolution of the appeal before the DARAB, DNTDC filed before the Municipal
Trial Court in Cities (MTCC)of Davao City a complaint for unlawful detainer
11
against
Demetrio Ehara, Jr., Reynaldo Saliga and Liza Saliga, the children of respondent spouses
Ehara and spouses Saliga. DNTDC claimed that it owned the 2.5574-hectare portion of
the property which the respondents children had been occupying by its mere tolerance.
Despite its repeated demands, the respondents children refused to vacate and continued
to illegally occupy it.
In their answer, the respondents children raised the issue of lack of jurisdiction, arguing
that the case involved an agrarian dispute. They contended that the law considers them
immediate members of the farm household, to whom R.A. No. 3844 and R.A. No. 6657
extend tenurial security. Thus, they claimed that they, as tenants, were entitled to
continue occupying the disputed portion.
On December 20, 2000, the MTCC rendered its decision
12
granting the DNTDCs
complaint and ordering the respondents children to vacate the 2.5574-hectare portion
of the property. The MTCC ruled that the respondents children were not tenants of the
property because they failed to prove that their stay on the premises was by virtue of a
tenancy agreement and because they had been occupying portions different from their
parents landholding. The MTCC also ruled that the 2.5574-hectare portion was no longer
agricultural and was thus removed from the coverage of R.A. No. 6657.
The prohibition case before the RTC
The respondents children did not appeal the MTCC decision. Instead, on June 1, 2001,
they filed before the Regional Trial Court (RTC), Branch 17, Davao City a petition for
Prohibition
13
against DNTDC to enjoin the execution of the MTCC decision. They
repeated the defenses and allegations in their pleading before the MTCC. The children of
the spouses Saliga Liza and Reynaldo - however added that Cesar had already died;
hence, they were filing the prohibition case in their own right as heirs/successors-in-
interest of Cesar.
On November 29, 2001, the respondents children and DNTDC entered into a
compromise agreement.
14
The respondents children undertook to voluntarily and
peacefully vacate the 2.5574-hectare portion of the property and to remove and
demolish their respective houses built on its premises, while DNTDC agreed to give each
of them the amount of 20,000.00 as financial assistance. The RTC approved the
compromise agreement in its December 7, 2001 decision.
15

The Ruling of the DARAB
In its decision
16
of January 12, 2001, the DARAB reversed and set aside the PARADs
ruling. The DARAB ordered DNTDC and all persons acting in its behalf to respect and
maintain the respondents in the peaceful possession and cultivation of the property, and
the Municipal Agrarian Reform Officer (MARO) to enjoin the DNTDC from disturbing
and/or molesting the respondents in their peaceful possession and cultivation of it.
As the PARAD did, the DARAB declared that a tenancy relationship existed between
Eugenio and the respondents, which was not extinguished by the expiration of the five-
year term stated in their lease contracts. Thus, when DNTDC purchased the property, it
had been subrogated to the rights and obligations of the previous landowner pursuant to
the provisions of R.A. No. 3844.
17

Unlike the PARAD, however, the DARAB was not convinced that the property had already
been reclassified to non-agricultural uses so as to remove it from the coverage of R.A. No.
6657. With Administrative Order No. 5, series of 1994 as basis, the DARAB held that the
alleged reclassification of the property did not and could not have divested the
respondents of their rights as "deemed owners" under P.D. No. 27. The DARAB also
pointed out that while Davao City Ordinance No. 363, series of 1982 (adopting the
Comprehensive Development Plan of Davao City), reclassified the property to be within
the "urban/urbanizing zone," the DNTDC did not submit the required certifications from
the HLURB, adopting the zoning ordinance, and from the DAR, approving the conversion
to make the reclassification valid.
When the DARAB denied the DNTDCs motion for reconsideration in its August 28, 2003
resolution,
18
the DNTDC elevated the case to the CA via a petition for review.
19

The Ruling of the CA
In its March 28, 2006 decision,
20
the CA affirmed in toto the January 12, 2001 decision of
the DARAB. The CA similarly declared that the tenancy relationship established between
the respondents and Eugenio was not extinguished by the expiration of the five-year
term of their lease contracts or by the subsequent transfer of the property to DNTDC.
The CA noted that both the DARAB and the PARAD arrived at the same findings and that
the DNTDC impliedly admitted in its pleadings the existence of the tenancy relationship.
The CA was also convinced that the property was still agricultural and was, therefore,
covered by R.A. No. 6657. While the CA conceded that the conversion of the use of lands
that had been reclassified as residential, commercial or industrial, prior to the effectivity
of R.A. No. 6657, no longer requires the DARs approval, the CA pointed out that the
landowner must first comply with certain pre-conditions for exemption and/or
conversion. Among other requirements, the landowner must secure an exemption
clearance from the DAR. This exemption clearance shall be issued after the landowner
files the certifications issued by the deputized zoning administrator, stating that the land
had been reclassified, and by the HLURB, stating that it had approved the pertinent
zoning ordinance, with both the reclassification and the approval carried out prior to
June 15, 1988.
In this case, the CA held that DNTDC failed to secure and present any exemption
clearance. The CA also pointed out that: (1) Davao City Ordinance No. 363, series of 1982,
adopting the Comprehensive Development Plan of Davao City did not substantially show
that it had reclassified the property from agricultural to non-agricultural uses; (2)
DNTDC failed to submit during the proceedings before the PARAD and the DARAB the
HLURB certification allegedly approving Davao City Ordinance No. 363, series of 1982;
(3) while DNTDC attached to its motion for reconsideration of the DARABs decision a
certification from the HLURB stating that by resolution (Resolution No. R-39-4) dated
July 31, 1980, it approved the Comprehensive Development Plan, yet at the time of the
alleged HLURB approval, the pertinent zoning ordinance - Davao City Ordinance No. 363,
series of 1982 - adopting such plan had not yet been enacted; and (4) the HLURB
certification that DNTDC presented referred to a parcel of land subject of another case.
DNTDC filed the present petition after the CA denied its motion for reconsideration
21
in
the CAs September 5, 2006 resolution.
22

The Petition
In its present petition,
23
DNTDC argues that the CA seriously erred when it: (1) failed to
consider the fact that the respondents violated the compromise agreement; (2) ruled
that a tenancy relationship exists between it and the respondents; and (3) declared that
the subject property is agricultural.
24

Directly addressing the CAs ruling, DNTDC argues that: first, the respondents, in the
compromise agreement, categorically agreed to voluntarily vacate the property upon
receipt of the stated financial assistance. Since the RTC approved the compromise
agreement and the respondents had already received the agreed financial assistance, the
CA should have considered these incidents that immediately bound the respondents to
comply with their undertaking to vacate.
Second, no tenancy relationship exists between DNTDC and the respondents. DNTDC
maintains that while a tenancy relationship existed between the respondents and
Eugenio, this relationship was terminated when the MTCC ordered the respondents to
vacate the property. It emphasizes that this MTCC decision that ordered the respondents
to vacate the property had already become final and executory upon the respondents
failure to seasonably appeal. DNTDC adds that after the respondents lease contract with
Eugenio expired and the latter simply allowed the former to continue occupying the
property, the respondents became bound by an implied promise to vacate its premises
upon demand. Thus, when, as the new owner, it demanded the return of the property,
the respondents were obligated to comply with their implied promise to vacate.
Finally, the property is no longer agricultural, contrary to the findings of the DARAB and
the CA. DNTDC points out that the proceedings before the PARAD had sufficiently
addressed this issue, which the CA recognized in the assailed decision. Thus, DNTDC
contends that the findings of the PARAD should prevail over those of the DARAB.
In its reply
25
to the respondents comment, DNTDC additionally argues that the MTCC
and the RTC cases are closely intertwined with and relevant to the present case. It points
out that Reynaldo and Liza categorically stated in their petition in the RTC case that they
were suing in their own right as heirs/successors-in-interest of Cesar. Consequently, the
spouses Saliga, as represented and succeeded by Reynaldo and Liza, are bound by the
compromise agreement that the latter signed in the RTC case.
The Case for the Respondents
In their comment,
26
the respondents argue that the MTCC and the RTC cases do not bear
any significance to the present controversy. They point out that the parties in the MTCC
and the RTC cases, aside from DNTDC, were Demetrio Ehara, Jr., Reynaldo and Liza who
are undeniably different from them.
Relying on the ruling of the CA, the respondents also argue that a tenancy relationship
exists between them and DNTDC and that the property is still agricultural. The
respondents quoted in toto the CAs discussions on these issues to support their position.
The Issues
In sum, the issues for our resolution are: (1) whether the property had been reclassified
from agricultural to non-agricultural uses prior to June 15, 1988 so as to remove it from
the coverage of R.A. No. 6657; (2) whether an agricultural leasehold or tenancy
relationship exists between DNTDC and the respondents; and (3) whether the
compromise agreement signed by the respondents children in the RTC case binds the
respondents.
The Courts Ruling
We resolve to GRANT the petition.
Preliminary considerations
At the outset, we reiterate the settled rule that only questions of law may be raised in a
petition for review oncertiorari under Rule 45 of the Rules of Court.
27
Questions of facts
are not allowed in a Rule 45 petition because this Court is not a trier of facts.
28
The Court
generally accords respect, if not finality, to the factual findings of quasi-judicial bodies,
among them is the DARAB, as these bodies are deemed experts in their respective
fields.
29
The question of the existence of a tenancy relationship intertwined with the
question of reclassification requires for its resolution a review of the factual findings of
the agricultural tribunals and of the CA. These are questions we cannot generally touch
in a Rule 45 petition.
Nevertheless, the case also presents a legal question as the issue of tenancy relationship
is both factual and legal. Moreover, the findings of the PARAD conflict with those of the
DARAB. These circumstances impel us to disregard the above general rule and to address
both the presented factual and legal issues in view of their social justice implications and
the duty to do justice that this Court has sworn to uphold.
We now resolve the merits of the petition.
The subject property had been
reclassified as non-agricultural prior
to June 15, 1988; hence, they are no
longer covered by R.A. No. 6657
At the core of the controversy is the questioned reclassification of the property to non-
agricultural uses. This issue is intertwined with and on which depends the resolution of
the issue concerning the claimed agricultural leasehold relationship.
In reversing the PARAD and holding that the property was still agricultural, the DARAB
considered the Comprehensive Development Plan (approved by the HSRC through Board
Resolution R-39-4 dated July 31, 1980) and Davao City Ordinance No. 363, series of 1982
(adopting the Comprehensive Development Plan) as invalid reclassification measures. It
gave as reason the absence of the requisite certification from the HLURB and the
approval of the DAR. In the alternative, and citing P.D. No. 27, in relation with R.A. No.
6657, as basis, the DARAB considered the alleged reclassification ineffective so as to free
the property from the legal effects of P.D. No. 27 that deemed it taken under the
governments operation land transfer (OLT) program as of October 21, 1972.
We differ from, and cannot accept, the DARABs position.
We hold that the property had been reclassified to non-agricultural uses and was,
therefore, already outside the coverage of the Comprehensive Agrarian Reform Law
(CARL) after it took effect on July 15, 1988.
1. Power of the local government units to
reclassify lands from agricultural to nonagricultural
uses; the DAR approval is not
required
Indubitably, the City Council of Davao City has the authority to adopt zoning resolutions
and ordinances. Under Section 3 of R.A. No. 2264
30
(the then governing Local
Government Code), municipal and/or city officials are specifically empowered to
"adopt zoning and subdivision ordinances or regulations in consultation with the
National Planning Commission."
31

In Pasong Bayabas Farmers Asso., Inc. v. Court of Appeals,
32
the Court held that this power
of the local government units to reclassify or convert lands to non-agricultural uses is not
subject to the approval of the DAR.
33
There, the Court affirmed the authority of the
Municipal Council of Carmona to issue a zoning classification and to reclassify the
property in dispute from agricultural to residential through the Councils Kapasiyahang
Bilang 30, as approved by the HSRC.
In the subsequent case of Junio v. Secretary Garilao,
34
this Court clarified, once and for all,
that "with respect to areas classified and identified as zonal areas not for agricultural
uses, like those approved by the HSRC before the effectivity of RA 6657 on June 15, 1988,
the DARs clearance is no longer necessary for conversion."
35
The Court in that case
declared the disputed landholding as validly reclassified from agricultural to residential
pursuant to Resolution No. 5153-A of the City Council of Bacolod.
Citing the cases of Pasong Bayabas Farmers Asso., Inc. and Junio, this Court arrived at
significantly similar ruling in the case of Agrarian Reform Beneficiaries Association
(ARBA) v. Nicolas.
36

Based on these considerations, we hold that the property had been validly reclassified as
non-agricultural land prior to June 15, 1988. We note the following facts established in
the records that support this conclusion: (1) the Davao City Planning and Development
Board prepared the Comprehensive Development Plan for the year 1979-2000 in order
to provide for a comprehensive zoning plan for Davao City; (2) the HSRC approved this
Comprehensive Development Plan through Board Resolution R-39-4 dated July 31, 1980;
(3) the HLURB confirmed the approval per the certification issued on April 26,
2006;
37
(4) the City Council of Davao City adopted the Comprehensive Development Plan
through its Resolution No. 894 and City Ordinance No. 363, series of 1982;
38
(5) the
Office of the City Planning and Development Coordinator, Office of the Zoning
Administrator expressly certified on June 15, 1995 that per City Ordinance No. 363,
series of 1982 as amended by S.P. Resolution No. 2843, Ordinance No. 561, series of
1992, the property (located in barangay Catalunan Pequeo) is within an
"urban/urbanizing" zone;
39
(6) the Office of the City Agriculturist confirmed the above
classification and further stated that the property is not classified as prime agricultural
land and is not irrigated nor covered by an irrigation project as certified by the National
Irrigation Administration, per the certification issued on December 4, 1998;
40
and (7) the
HLURB, per certification dated May 2, 1996,
41
quoted the April 8, 1996 certification
issued by the Office of the City Planning and Development Coordinator stating that "the
Mintal District which includes barangay Catalunan Pequeo, is identified as one of the
urbaning [sic] district centers and priority areas and for development and investments in
Davao City."
We note that while the DNTDC attached, to its motion for reconsideration of the DARABs
decision, the May 2, 1996 certification of the HLURB, both the DARAB and the CA simply
brushed this aside on technicality. The CA reasoned that the certificate was belatedly
presented and that it referred to a parcel of lot subject of another case, albeit, similarly
involving DNTDC, as one of the parties, and property located within the same district.
We cannot support this position of the CA for the following reasons: first, while,
generally, evidence submitted past the presentation-of-evidence stage is no longer
admissible and should be disregarded for reasons of fairness, strict application of this
general rule may be relaxed. By way of exception, we relax the application of the rules
when, as here, the merits of the case call for, and the governing rules of procedure
explicitly command, a relaxation. Under Section 3, Rule I of the 1994 DARAB New Rules
of Procedure (the governing DARAB rules), the DARAB shall not be bound by technical
rules of procedure and evidence provided under the Rules of Court, which shall not apply
even in a suppletory character, and shall employ all reasonable means to ascertain facts
of every case.
Time and again, this Court has held that "rules of procedure ought not to be applied in a
very rigid, technical sense, for they are adopted to help secure, not override, substantial
justice."
42
Thus, while DNTDC, in this case, attached the May 2, 1996 HLURB certification
only in its motion for reconsideration, the DARAB should have considered it, especially in
the light of the various documents that DNTDC presented to support its position that the
property had already been reclassified as non-agricultural land prior to June 15, 1988.
And second, granting arguendo that the May 2, 1996 HLURB certification was issued in
relation to another case that involved a different parcel of land, it is not without value.
The clear-cut declarations of the HLURB in the certification, which the DARAB and the CA
should have considered and which we find sufficiently convincing, show that Catalunan
Pequeo (where the property lies) is classified as within the urbanizing district centers
of Davao City. Thus, for all intents and purposes, the May 2, 1996 HLURB certification
satisfied the purpose of this requirement, which is to establish by sufficient evidence the
propertys reclassification as non-agricultural land prior to June 15, 1988.
Considering that the property is no longer agricultural as of June 15, 1988, it is removed
from the operation of R.A. No. 6657. By express provision, the CARL covers only those
public or private lands devoted or suitable for agriculture,
43
the operative word being
agricultural. Under Section 3(c) of R.A. No. 6657, agricultural lands refer to lands devoted
to agricultural activity and not otherwise classified as mineral, forest, residential,
commercial, or industrial land.
44
In its Administrative Order No. 1, series of 1990,
45
the
DAR further explained the term "agricultural lands" as referring to "those devoted to
agricultural activity as defined in R.A. 6657 and x x x not classified in town plans and
zoning ordinances as approved by the Housing and Land Use Regulatory Board
(HLURB) and its preceding competent authorities prior to 15 June 1988 for
residential, commercial or industrial use." If only to emphasize, we reiterate only
those parcels of land specifically classified as agricultural are covered by the CARL; any
parcel of land otherwise classified is beyond its ambit.
2. No vested rights over the
property accrued to the
respondents under P.D. No. 27
Under P.D. No. 27, tenant-farmers of rice and corn agricultural lands are "deemed
owners" of the land that they till as of October 21, 1972. Under these terms, vested rights
cannot simply be taken away by the expedience of adopting zoning plans and ordinances
reclassifying an agricultural land to an "urban/urbanizing" area.
We need to clarify, however, that while tenant farmers of rice and corn lands are
"deemed owners" as of October 21, 1972 following the provisions of P.D. No. 27, this
policy should not be interpreted as automatically vesting in them absolute ownership
over their respective tillage. The tenant-farmers must still first comply with the requisite
preconditions, i.e., payment of just compensation and perfection of title before
acquisition of full ownership.
46

In Del Castillo v. Orciga,
47
the Court explained that land transfer under P.D. No. 27 is
effected in two (2) stages: first,the issuance of a certificate of land transfer (CLT);
and second, the issuance of an emancipation patent (EP). The first stage - issuance of the
CLT - serves as the governments recognition of the tenant farmers inchoate right as
"deemed owners" of the land that they till.
48
The second stage issuance of the EP
perfects the title of the tenant farmers and vests in them absolute ownership upon full
compliance with the prescribed requirements.
49
As a preliminary step, therefore, the CLT
immediately serves as the tangible evidence of the governments recognition of the
tenant farmers inchoate right and of the subjection of the particular landholding to the
governments OLT program.
In this case, the record does not show that the respondents had been issued CLTs. The
CLT could have been their best evidence of the governments recognition of their
inchoate right as "deemed owners" of the property. Similarly, the record does not show
that the government had placed the property under its OLT program or that the
government, through the MARO, recognized the respondents as the actual tenants of the
property on the relevant date, thereby sufficiently vesting in them such inchoate right.
Consequently, this Court can safely conclude that no CLTs had ever been issued to the
respondents and that the government never recognized any inchoate right on the part of
the respondents as "deemed owners" of the property. In effect, therefore, no vested
rights under P.D. No. 27, in relation to R.A. No. 6657, accrued to the respondents such
that when the property was reclassified prior to June 15, 1988, it did not fall, by clear
legal recognition within the coverage of R.A. No. 6657.
Interestingly, the contract of lease executed between Eugenio and the respondents
shows that the property was primarily planted with coconut and coffee trees and,
secondarily with several fruit-bearing trees. By its explicit terms, P.D. No. 27 applies only
to private agricultural lands primarily devoted to rice and corn production. Thus, the
property could never have been covered by P.D. No. 27 as it was not classified as rice and
corn land.
For these reasons, we hold that the property is no longer agricultural and that the CA
erred when it affirmed the DARABs ruling that the property notwithstanding the
various documents that unquestionably established the contrary was agricultural .
No tenancy relationship exists between
DNTDC and the respondents; the
tenancy relationship between the
respondents and Eugenio ceased
when the property was reclassified
In Solmayor v. Arroyo,
50
the Court outlined the essential requisites of a tenancy
relationship, all of which must concur for the relationship to exist, namely:
1. The parties are the landowner and the tenant;
2. The subject is agricultural land;
3. There is consent;
4. The purpose is agricultural production;
5. There is personal cultivation; and
6. There is sharing of harvests.
The absence of any of these requisites does not make an occupant a cultivator, or a
planter, a de jure tenant.
51
Consequently, a person who is not a de jure tenant is not
entitled to security of tenure nor covered by the land reform program of the government
under any existing tenancy laws.
52

In this case, we hold that no tenancy relationship exists between DNTDC, as the owner of
the property, and the respondents, as the purported tenants; the second essential
requisite as outlined above the subject is agricultural land is lacking. To recall, the
property had already been reclassified as non-agricultural land. Accordingly, the
respondents are not de jure tenants and are, therefore, not entitled to the benefits
granted to agricultural lessees under the provisions of P.D. No. 27, in relation to R.A. No.
6657.
We note that the respondents, through their predecessors-in-interest, had been tenants
of Eugenio as early as 1965. Under Section 7 of R.A. No. 3844, once the leasehold relation
is established, the agricultural lessee is entitled to security of tenure and acquires the
right to continue working on the landholding. Section 10 of this Act further strengthens
such tenurial security by declaring that the mere expiration of the term or period in a
leasehold contract, or the sale, alienation or transfer of the legal possession of the
landholding shall not extinguish the leasehold relation; and in case of sale or transfer, the
purchaser or transferee is subrogated to the rights and obligations of the
landowner/lessor. By the provisions of Section 10, mere expiration of the five-year term
on the respondents lease contract could not have caused the termination of any tenancy
relationship that may have existed between the respondents and Eugenio.
Still, however, we cannot agree with the position that the respondents are the tenants of
DNTDC. This is because, despite the guaranty, R.A. No. 3844 also enumerates the
instances that put an end to the lessees protected tenurial rights. Under Section 7 of R.A.
No. 3844, the right of the agricultural lessee to continue working on the landholding
ceases when the leasehold relation is extinguished or when the lessee is lawfully ejected
from the landholding. Section 8
53
enumerates the causes that terminate a relationship,
while Section 36 enumerates the grounds for dispossessing the agricultural lessee of the
landholding.
54

Notably, under Section 36(1) of R.A. No. 3844, as amended by Section 7 of R.A. No.
6389,
55
declaration by the department head, upon recommendation of the National
Planning Commission, to be suited for residential, commercial, industrial or some other
urban purposes, terminates the right of the agricultural lessee to continue in its
possession and enjoyment. The approval of the conversion, however, is not limited to the
authority of the DAR or the courts. In the case of Pasong Bayabas Farmers Asso., Inc. v.
Court of Appeals,
56
and again in Junio v. Secretary Garilao,
57
the Court essentially
explained that the reclassification and conversion of agricultural lands to non-
agricultural uses prior to the effectivity of R.A. No. 6657, on June 15, 1988, was a
coordinated effort of several government agencies, such as local government units and
the HSRC.
In effect, therefore, whether the leasehold relationship between the respondents and
Eugenio had been established by virtue of the provisions of R.A. No. 3844 or of the five-
year lease contract executed in 1981, this leasehold relationship had been terminated
with the reclassification of the property as non-agricultural land in 1982. The expiration
the five-year lease contract in 1986 could not have done more than simply finally
terminate any leasehold relationship that may have prevailed under the terms of that
contract.
Consequently, when the DNTDC purchased the property in 1995, there was no longer
any tenancy relationship that could have subrogated the DNTDC to the rights and
obligations of the previous owner. We, therefore, disagree with the findings of the CA, as
it affirmed the DARAB that a tenancy relationship exists between DNTDC and the
respondents.
The respondents are not bound by
the November 29, 2001 compromise
agreement before the RTC
The respondents argue that the compromise agreement of Demetrio Ehara, Jr., Reynaldo
and Liza entered into with DNTDC on November 29, 2001 and approved by the RTC on
December 7, 2001 does not and cannot bind them as they are different from the
former.
We agree for two plain reasons.
First, the respondents position on this matter finds support in logic. Indeed, as the
respondents have well pointed out and contrary to DNTDCs position, this similarity in
their last names or familial relationship cannot automatically bind the respondents to
any undertaking that their children in the RTC case had agreed to. This is because
DNTDC has not shown that the respondents had expressly or impliedly acquiesced to
their children's undertaking; that the respondents had authorized the latter to bind them
in the compromise agreement; or that the respondents' cause of action in the instant
case arose from or depended on those of their children in the cases before the MTCC and
the RTC. Moreover, the respondents' children and DNTDC executed the compromise
agreement in the RTC case with the view of settling the controversy concerning only the
issue of physical possession over the disputed 2.5574-hectare portion subject of the
ejectment case before the MTCC.
And second, the issues involved in the cases before the MTCC and the RTC are different
from the issues involved in the present case. In the ejectment case before the MTCC, the
sole issue was possession de Jure, while in the prohibition case before the RTC, the issue
was the propriety of the execution of the decision of the MTCC in the ejectment case. In
contrast, the issues in the present controversy that originated from the PARAD boil down
to the respondents' averred rights, as tenants of the property.
With these considerations, therefore, whatever decision that the MTCC in the ejectment
case arrived at, which was limited to possession de jure of the disputed 2.5574-hectare
portion of the property, could not have affected any right that the respondents may have
had, as tenants, over the property. Consequently, any agreement that the respondents'
children had entered into in the R TC case could not have bound the respondents in the
present controversy as the respondents' claim over the property and their alleged right
to continue in its possession clearly go beyond mere possession de Jure, whether of the
2.5574-hectare portion of the property that was subject of the ejectment case before the
MTCC or of the entire property in the present case.
WHEREFORE, in view of these considerations, we hereby GRANT the petition, and
accordingly REVERSE andSET ASIDE the decision dated March 28, 2006 and the
resolution dated September 5, 2006 of the Court of Appeals in CA-G.R. SP No. 79377.
We REINSTATE the decision dated July 6, 1998 and the resolution dated September 8,
1998 of the PARAD in DARAB Case No. XI-1418-DC-98.
SO ORDERED.

EN BANC

PROVINCE OF RIZAL, MUNICIPALITY OF
SAN MATEO, PINTONG BOCAUE
MULTIPURPOSE COOPERATIVE,
CONCERNED CITIZENS OF RIZAL, INC.,
ROLANDO E. VILLACORTE, BERNARDO
HIDALGO, ANANIAS EBUENGA, VILMA T.
MONTAJES, FEDERICO MUNAR, JR.,
ROLANDO BEAS, SR., ET AL., and
KILOSBAYAN, INC.,
P e t i t i o n e r s,


- versus -


EXECUTIVE SECRETARY, SECRETARY OF
ENVIRONMENT & NATURAL RESOURCES,
LAGUNA LAKE DEVELOPMENT
AUTHORITY, SECRETARY OF PUBLIC
WORKS & HIGHWAYS, SECRETARY OF
BUDGET & MANAGEMENT, METRO MANILA
DEVELOPMENT AUTHORITY and THE
HONORABLE COURT OF APPEALS,
R e s p o n d e n t s.
G.R. No. 129546


Present:

DAVIDE, JR., C. J.,
PUNO,
PANGANIBAN,
QUISUMBING,
YNARES-SANTIAGO,
SANDOVAL-GUTIERREZ,
CARPIO,
MARTINEZ,
CORONA,
CARPIO MORALES,
CALLEJO, SR.,
AZCUNA,
TINGA,
CHICO-NAZARIO, and
GARCIA, JJ.





Promulgated:


December 13, 2005
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x

D E C I S I O N


CHICO-NAZARIO, J.:



The earth belongs in usufruct to the living.
[1]


At the height of the garbage crisis plaguing Metro Manila and its environs, parts
of the Marikina Watershed Reservation were set aside by the Office of the President,
through Proclamation No. 635 dated 28 August 1995, for use as a sanitary landfill and
similar waste disposal applications. In fact, this site, extending to more or less 18
hectares, had already been in operation since 19 February 1990
[2]
for the solid wastes of
Quezon City, Marikina, San Juan, Mandaluyong, Pateros, Pasig, and Taguig.
[3]


This is a petition filed by the Province of Rizal, the municipality of San Mateo, and
various concerned citizens for review on certiorari of the Decision of the Court of
Appeals in CA-G.R. SP No. 41330, denying, for lack of cause of action, the petition
for certiorari, prohibition and mandamus with application for a temporary restraining
order/writ of preliminary injunction assailing the legality and constitutionality of
Proclamation No. 635.

The facts are documented in painstaking detail.

On 17 November 1988, the respondent Secretaries of the Department of Public
Works and Highways (DPWH) and the Department of Environment and Natural
Resources (DENR) and the Governor of the Metropolitan Manila Commission (MMC)
entered into a Memorandum of Agreement (MOA),
[4]
which provides in part:
1. The DENR agrees to immediately allow
the utilization by the Metropolitan Manila Commission of its
land property located at Pintong Bocaue in San Mateo, Rizal
as a sanitary landfill site, subject to whatever restrictions
that the government impact assessment might require.

2. Upon signing of this Agreement, the
DPWH shall commence the construction/development of
said dumpsite.

3. The MMC shall: a) take charge of the
relocation of the families within and around the site; b)
oversee the development of the areas as a sanitary landfill;
c) coordinate/monitor the construction of infrastructure
facilities by the DPWH in the said site; and d) ensure that the
necessary civil works are properly undertaken to safeguard
against any negative environmental impact in the area.



On 7, 8 and 10 February 1989, the Sangguniang Bayan of San Mateo wrote Gov.
Elfren Cruz of the MMC, Sec. Fiorello Estuar of the DPWH, the Presidential Task Force on
Solid Waste Management, Executive Secretary Catalino Macaraig, and Sec. Fulgencio
Factoran, Jr., pointing out that it had recently passed a Resolution banning the creation of
dumpsites for Metro Manila garbage within its jurisdiction, asking that their side be
heard, and that the addressees suspend and temporarily hold in abeyance all and any
part of your operations with respect to the San Mateo Landfill Dumpsite. No action was
taken on these letters.

It turns out that the land subject of the MOA of 17 November 1988 and owned
by the DENR was part of the Marikina Watershed Reservation Area. Thus, on 31 May
1989, forest officers of the Forest Engineering and Infrastructure Unit of the Community
Environment and Natural Resource Office, (CENRO) DENR-IV, Rizal Province, submitted
a Memorandum
[5]
on the On-going Dumping Site Operation of the MMC inside (the)
Upper Portion of Marikina Watershed Reservation, located at Barangay Pintong Bocaue,
San Mateo, Rizal, and nearby localities. Said Memorandum reads in part:
Observations:

3.1 The subject area is arable and agricultural in
nature;
3.2 Soil type and its topography are favorable for
agricultural and forestry productions;

. . .

3.5 Said Dumping Site is observed to be confined
within the said Watershed Reservation, bearing
in the northeastern part of Lungsod Silangan
Townsite Reservation. Such illegal Dumping Site
operation inside (the) Watershed Reservation
is in violation of P.D. 705, otherwise known as
the Revised Forestry Code, as amended. . .

Recommendations:

5.1 The MMC Dumping Site Inside Marikina Watershed
Reservation, particularly at Brgy. Pintong Bocaue,
San Mateo, Rizal and at Bo. Pinugay,
Baras/Antipolo, Rizal which are the present
garbage zones must totally be stopped and
discouraged without any political intervention
and delay in order to save our healthy
ecosystems found therein, to avoid much
destruction, useless efforts and lost (sic) of
millions of public funds over the land in
question; (Emphasis ours)



On 19 June 1989, the CENRO submitted another Investigation Report
[6]
to the
Regional Executive Director which states in part that:
1. About two (2) hectares had been excavated by bulldozers and
garbage dumping operations are going on.

2. The dumping site is without the concurrence of the Provincial
Governor, Rizal Province and without any permit from DENR
who has functional jurisdiction over the Watershed
Reservation; and

3. About 1,192 families residing and cultivating areas covered by
four (4) Barangays surrounding the dumping site will
adversely be affected by the dumping operations of MMC
including their sources of domestic water supply. x x x x



On 22 January 1990, the CENRO submitted still another Investigation
Report
[7]
to the Regional Executive Director which states that:
Findings show that the areas used as Dumping Site of the
MMC are found to be within the Marikina Watershed which are part of
the Integrated Social Forestry Project (ISF) as per recorded inventory
of Forest Occupancy of this office.

It also appears that as per record, there was no permit
issued to the MMC to utilize these portions of land for dumping
purposes.

It is further observed that the use of the areas as dumping
site greatly affects the ecological balance and environmental factors in
this community.



On 19 February 1990, the DENR Environmental Management Bureau, through
Undersecretary for Environment and Research Celso R. Roque, granted the Metro Manila
Authority (MMA [formerly MMC]) an Environmental Compliance Certificate (ECC) for the
operation of a two-and-a-half-hectare garbage dumpsite.

The ECC was sought and granted to comply with the requirement of
Presidential Decree No. 1586 Establishing an Environmental Impact Statement System,
Section 4 of which states in part that, No persons, partnership or corporation shall
undertake or operate any such declared environmentally critical project or area without
first securing an Environmental Compliance Certificate. Proclamation No. 2146, passed
on 14 December 1981, designates all areas declared by law as national
parks, watershed reserves, wildlife preserves, and sanctuaries as Environmentally
Critical Areas.

On 09 March 1990, respondent Laguna Lake Development Authority (LLDA),
through its Acting General Manager, sent a letter
[8]
to the MMA, which reads in part:
Through this letter we would like to convey our reservation
on the choice of the sites for solid waste disposal inside the watershed
of Laguna Lake. As you may already know, the Metropolitan
Waterworks and Sewerage System (MWSS) has scheduled the
abstraction of water from the lake to serve the needs of about 1.2
million residents of Muntinlupa, Paranaque, Las Pinas and
Bacoor, Cavite by 1992. Accordingly, the Laguna Lake Development
Authority (LLDA) is accelerating its environmental management
program to upgrade the water quality of the lake in order to
make it suitable as a source of domestic water supply the whole
year round. The said program regards dumpsites as incompatible
within the watershed because of the heavy pollution, including
the risk of diseases, generated by such activities which would
negate the governments efforts to upgrade the water quality of
the lake. Consequently, please consider our objection to the
proposed location of the dumpsites within the watershed. (Emphasis
supplied by petitioners)



On 31 July 1990, less than six months after the issuance of the ECC,
Undersecretary Roque suspended the ECC in a letter
[9]
addressed to the respondent
Secretary of DPWH, stating in part that:
Upon site investigation conducted by Environmental
Management Bureau staff on development activities at the San Mateo
Landfill Site, it was ascertained that ground slumping and erosion
have resulted from improper development of the site. We believe
that this will adversely affect the environmental quality in the area if
the proper remedial measures are not instituted in the design of the
landfill site. This is therefore contradictory to statements made in the
Environmental Impact Statement (EIS) submitted that above
occurrences will be properly mitigated.

In view of this, we are forced to suspend the Environmental
Compliance Certificate (ECC) issued until appropriate modified plans
are submitted and approved by this Office for
implementation. (Emphasis ours)


On 21 June 1993, the Acting Mayor of San Mateo, Enrique Rodriguez, Jr.,
Barangay Captain Dominador Vergara, and petitioner Rolando E. Villacorte, Chairman of
the Pintong Bocaue Multipurpose Cooperative (PBMC) wrote
[10]
then President Fidel V.
Ramos expressing their objections to the continued operation of the MMA dumpsite for
causing unabated pollution and degradation of the Marikina Watershed Reservation.

On 14 July 1993, another Investigation Report
[11]
submitted by the Regional
Technical Director to the DENR Undersecretary for Environment and Research contained
the following findings and recommendations:
Remarks and Findings:

. . . .

5. Interview with Mr. Dayrit, whose lot is now being
endangered because soil erosion have (sic) caused severe siltation
and sedimentation of the Dayrit Creek which water is greatly polluted
by the dumping of soil bulldozed to the creek;

6. Also interview with Mrs. Vilma Montajes, the multi-
grade teacher of Pintong Bocaue Primary School which is located only
about 100 meters from the landfill site. She disclosed that bad odor
have (sic) greatly affected the pupils who are sometimes sick with
respiratory illnesses. These odors show that MMA have (sic) not
instituted/sprayed any disinfectant chemicals to prevent air pollution
in the area. Besides large flies (Bangaw) are swarming all over the
playground of the school. The teacher also informed the undersigned
that plastic debris are being blown whenever the wind blows in their
direction.

7. As per investigation report there are now 15
hectares being used as landfill disposal sites by the MMA. The MMA is
intending to expand its operation within the 50 hectares.

8. Lots occupied within 50 hectares are fully planted
with fruit bearing trees like Mangoes, Santol, Jackfruit, Kasoy,
Guyabano, Kalamansi and Citrus which are now bearing fruits and
being harvested and marketed to nearby San Mateo Market and
Masinag Market in Antipolo.

. . . .

Recommendations:

1. As previously recommended, the undersigned also
strongly recommend(s) that the MMA be made to relocate the landfill
site because the area is within the Marikina Watershed Reservation
and Lungsod Silangan. The leachate treatment plant ha(s) been
eroded twice already and contaminated the nearby creeks which is
the source of potable water of the residents. The contaminated water
also flows to Wawa Dam and Boso-boso River which also flows to
Laguna de Bay.

2. The proposed Integrated Social Forestry Project be
pushed through or be approved. ISF project will not only uplift the
socio-economic conditions of the participants but will enhance the
rehabilitation of the Watershed considering that fruit bearing trees
are vigorously growing in the area. Some timber producing species
are also planted like Mahogany and Gmelina Arboiea. There are also
portions where dipterocarp residuals abound in the area.

3. The sanitary landfill should be relocated to some
other area, in order to avoid any conflict with the local government of
San Mateo and the nearby affected residents who have been in the
area for almost 10-20 years.



On 16 November 1993, DENR Secretary Angel C. Alcala sent MMA Chairman
Ismael A. Mathay, Jr. a letter
[12]
stating that after a series of investigations by field
officials of the DENR, the agency realized that the MOA entered into on 17 November
1988 is a very costly error because the area agreed to be a garbage dumpsite is inside
the Marikina Watershed Reservation. He then strongly recommended that all facilities
and infrastructure in the garbage dumpsite in Pintong Bocaue be dismantled, and the
garbage disposal operations be transferred to another area outside the Marikina
Watershed Reservation to protect the health and general welfare of the residents of San
Mateo in particular and the residents of Metro Manila in general.

On 06 June 1995, petitioner Villacorte, Chairman of the PBMC,
wrote
[13]
President Ramos, through the Executive Secretary, informing the President of
the issues involved, that the dumpsite is located near three public elementary schools,
the closest of which is only fifty meters away, and that its location violates the municipal
zoning ordinance of San Mateo and, in truth, the Housing and Land Use Regulatory Board
had denied the then MMA chairmans application for a locational clearance on this
ground.

On 21 August 1995, the Sangguniang Bayan of San Mateo issued a
Resolution
[14]
expressing a strong objection to the planned expansion of the landfill
operation in Pintong Bocaue and requesting President Ramos to disapprove the draft
Presidential Proclamation segregating 71.6 Hectares from Marikina Watershed
Reservation for the landfill site in Pintong Bocaue, San Mateo, Rizal.

Despite the various objections and recommendations raised by the government
agencies aforementioned, the Office of the President, through Executive Secretary Ruben
Torres, signed and issued Proclamation No. 635 on 28 August 1995, Excluding from the
Marikina Watershed Reservation Certain Parcels of Land Embraced Therein for Use as
Sanitary Landfill Sites and Similar Waste Disposal Under the Administration of the
Metropolitan Manila Development Authority. The pertinent portions thereof state:
WHEREAS, to cope with the requirements of the growing
population in Metro Manila and the adjoining provinces and
municipalities, certain developed and open portions of the Marikina
Watershed Reservation, upon the recommendation of the Secretary of
the Department of Environment and Natural Resources should now
be excluded form the scope of the reservation;

WHEREAS, while the areas delineated as part of the
Watershed Reservations are intended primarily for use in projects
and/or activities designed to contain and preserve the underground
water supply, other peripheral areas had been included within the
scope of the reservation to provide for such space as may be needed
for the construction of the necessary structures, other related
facilities, as well as other priority projects of government as may be
eventually determined;

WHEREAS, there is now an urgent need to provide for, and
develop, the necessary facilities for the disposal of the waste
generated by the population of Metro Manila and the adjoining
provinces and municipalities, to ensure their sanitary and /or
hygienic disposal;

WHEREAS, to cope with the requirements for the
development of the waste disposal facilities that may be used,
portions of the peripheral areas of the Marikina Watershed
Reservation, after due consideration and study, have now been
identified as suitable sites that may be used for the purpose;

WHEREAS, the Secretary of the Department of Environment
and Natural Resources has recommended the exclusion of these areas
that have been so identified from the Marikina Watershed
Reservation so that they may then be developed for the purpose;

NOW, THEREFORE, for and in consideration of the aforecited
premises, I, Fidel V. Ramos, President of the Philippines, by virtue of
the powers vested in me by law, do hereby ordain:

Section 1. General That certain parcels of land, embraced
by the Marikina Watershed Reservation, were found needed for use in
the solid waste disposal program of the government in Metropolitan
Manila, are hereby excluded from that which is held in reserve and are
now made available for use as sanitary landfill and such other related
waste disposal applications.

Section 2. Purpose The areas being excluded from the
Marikina Watershed Reservation are hereby placed under the
administration of the Metropolitan Manila Development Authority, for
development as Sanitary Landfill, and/or for use in the development
of such other related waste disposal facilities that may be used by the
cities and municipalities of Metro Manila and the adjoining province
of Rizal and its municipalities.

Section 3. Technical Description Specifically, the areas
being hereby excluded from the Marikina Watershed Reservation
consist of two (2) parcels, with an aggregate area of approximately
ONE MILLION SIXTY THOUSAND FIVE HUNDRED TWENTY NINE
(1,060,529) square meters more or less, as follows: x x x x

Section 4. Reservations The development, construction,
use and/or operation of any facility that may be established within the
parcel of land herein excluded from the Marikina Watershed
Reservation shall be governed by existing laws, rules and regulations
pertaining to environmental control and management. When no
longer needed for sanitary landfill purposes or the related waste
disposal activities, the parcels of land subject of this proclamation
shall revert back as part of the Marikina Watershed Reservation,
unless otherwise authorized.



On 06 September 1995, Director Wilfrido S. Pollisco of the Protected Areas and
Wildlife Bureau wrote the DENR Secretary to express the bureaus stand against the
dumpsite at Pintong Bocaue, and that it is our view . . . that the mere presence of a
garbage dumpsite inside a watershed reservation is definitely not compatible with the
very purpose and objectives for which the reservation was established.

On 24 November 1995, the petitioners Municipality of San Mateo and the
residents of Pintong Bocaue, represented by former Senator Jovito Salonga, sent a letter
to President Ramos requesting him to reconsider Proclamation No. 635. Receiving no
reply, they sent another letter on 02 January 1996 reiterating their previous request.

On 04 March 1996, then chairman of the Metro Manila Development Authority
(MMDA [formerly MMA]) Prospero I. Oreta addressed a letter to Senator Salonga, stating
in part that:
.

2. Considering the circumstances under which we are pursuing
the project, we are certain you will agree that, unless we are
prepared with a better alternative, the project simply has to be
pursued in the best interest of the greater majority of the
population, particularly their health and welfare.

2.1 The San Mateo Sanitary Landfill services, at least, 38% of
the waste disposal site requirements of Metro Manila
where an estimated 9 million population reside.

2.2 Metro Manila is presently estimated to be generating, at
least, 15,700 cubic meters of household or municipal
waste, a 1.57 hectare of land area will be filled in a
months time with a pile 31 meters high of garbage, or in a
year, the accumulated volume will require 18.2 hectares.

. . . .

4. The sanitary landfill projects are now on their fifth year of
implementation. The amount of effort and money already
invested in the project by the government cannot easily be
disregarded, much more set aside in favor of the few
settlers/squatters who chose to ignore the earlier notice given
to them that the area would be used precisely for the
development of waste disposal sites, and are now attempting
to arouse opposition to the project.

4.2 There is no place within the jurisdiction of Metro Manila,
with an area big enough to accommodate at least 3 to 5
years of waste disposal requirements. x x x x

4.21 The present site at San Mateo was selected because, at the
time consideration was being made, and up to the present, it
is found to have the attributes that positively respond to the
criteria established:

4.21.1 The site was a government property and would not
require any outlay for it to be acquired.

4.21.2 It is far from any sizeable community/settlements
that could be affected by the development that
would be introduced and yet, was within economic
hauling distance from the areas they are designed
to serve.

4.21.21 At the time it was originally decided to
locate the landfills at the present site,
there were not more that fifteen (15)
settlers in the area and they had hardly
established themselves. The
community settlements were located
far from the site.

4.21.22 The area was hardly accessible, especially
to any public transport. The area was
being served by a public utility jeep
that usually made only two (2) trips
daily. During the rainy season, it could
only be reached by equipping the
vehicle with tire chains to traverse the
slippery muddy trail roads.

4.21.3 There was, at least, seventy-three (73) hectares
available at the site.

4.3 While the site was within the Marikina Watershed Reservation
under the administration of the DENR, the site was located at the
lower periphery of the buffer zone; was evaluated to be least likely
to affect the underground water supply; and could, in fact, be
excluded from the reservation.

4.31 It was determined to be far from the main water containment
area for it to pose any immediate danger of contaminating
the underground water, in case of a failure in any of the
mitigating measures that would be installed.

4.32 It was likewise too far from the nearest body of water, the
Laguna Lake, and the distance, plus the increasing
accumulation of water from other tributaries toward the
lake, would serve to dilute and mitigate any contamination it
may emit, in case one happened.

4.33 To resolve the recurring issue regarding its being
located within the Marikina Watershed Reservation, the site
had been recommended by the DENR, and approved by the
President, to already be excluded from the Marikina
Watershed reservation and placed under the administration
of MMDA, since the site was deemed to form part of the land
resource reserve then commonly referred to as buffer zone.

5. Contrary to the impression that you had been given, relocating the site at
this point and time would not be easy, if not impracticable, because
aside from the investments that had been made in locating the present
site, further investments have been incurred in:

5.1 The conduct of the technical studies for the development being
implemented. Through a grant-in-aid from the World Bank,
US$600,000 was initially spent for the conduct of the necessary
studies on the area and the design of the landfill. This was
augmented by, at least, another P1.5 million from the government
for the studies to be completed, or a total cost at the time (1990) of
approximately P20 million.

5.2. Additionally, the government has spent approximately P33
million in improving on the roadway to make the site accessible
from the main road/highway.

5.3 To achieve the necessary economies in the development of the
site, the utilities had been planned so that their use could be
maximized. These include the access roads, the drainage system,
the leacheate collection system, the gas collection system, and the
waste water treatment system. Their construction are designed so
that instead of having to construct independent units for each area,
the use of existing facilities can be maximized through a system of
interconnection. On the average, the government is spending P14.8
million to develop a hectare of sanitary landfill area.

6. Despite the preparations and the investments that are now being made
on the project, it is estimated that the total available area, at an
accelerated rate of disposal, assuming that all open dump sites were
to be closed, will only last for 39 months.

6.1 We are still hard pressed to achieve advanced development on the
sites to assure against any possible crisis in garbage from again
being experienced in Metro Manila, aside from having to look for
the additional sites that may be used after the capacities shall have
been exhausted.

6.2 Faced with the prospects of having the 15,700 cubic meters of
garbage generated daily strewn all over Metro Manila, we are
certain you will agree that it would be futile to even as much as
consider a suspension of the waste disposal operations at the
sanitary landfills.



On 22 July 1996, the petitioners filed before the Court of Appeals a civil action
for certiorari, prohibition and mandamus with application for a temporary restraining
order/writ of preliminary injunction. The hearing on the prayer for preliminary
injunction was held on 14 August 1996.

On 13 June 1997, the court a quo rendered a Decision,
[15]
the dispositive part of
which reads:
WHEREFORE, the petition for certiorari, prohibition and
mandamus with application for a temporary restraining order/writ of
preliminary injunction for lack of cause of action, is hereby
DENIED.
[16]




Hence, this petition for review on certiorari of the above decision on the
following grounds:

I

THE COURT OF APPEALS ERRED AND ABUSED ITS DISCRETION IN
DELIBERATELY IGNORING THE SIGNIFICANT FACT THAT
PRESIDENTIAL PROCLAMATION NO. 635 WAS BASED ON A BRAZEN
FORGERY IT WAS SUPPOSEDLY ISSUED, AS STATED IN THE
PROCLAMATION ITSELF AND REPEATEDLY ASSERTED BY
RESPONDENTS IN THEIR COMMENT, ON THE BASIS OF THE
ALLEGED RECOMMENDATION OF THE DENR SECRETARY DATED
JUNE 26, 1995 BUT WHICH ASSERTION WAS DENOUNCED BY THE
THEN SECRETARY ANGEL C. ALCALA HIMSELF IN A SWORN
STATEMENT DATED SEPTEMBER 18, 1996 AND AGAIN DURING THE
SPECIAL HEARING OF THE CASE IN THE COURT OF APPEALS ON
NOVEMBER 13, 1996 AS A FORGERY SINCE HIS SIGNATURE ON
THE ALLEGED RECOMMENDATION HAD BEEN FALSIFIED, AS NOW
ADMITTED BY RESPONDENTS THEMSELVES IN THEIR COMMENT
FILED WITH THE COURT OF APPEALS, THROUGH THE OFFICE OF
THE SOLICITOR GENERAL.

II

THE COURT OF APPEALS ERRED AND ABUSED ITS DISCRETION IN
COMPLETELY IGNORING THE SIGNIFICANT FACT THAT THE
RESPONDENTS ARE OPERATING THE LANDFILL BASED ON A
SPURIOUS ENVIRONMENTAL COMPLIANCE CERTIFICATE.

III

THE COURT OF APPEALS ERRED IN RULING THAT THE
RESPONDENTS DID NOT VIOLATE R.A. 7586 WHEN THEY ISSUED
AND IMPLEMENTED PROCLAMATION NO. 635 CONSIDERING THAT
THE WITHDRAWAL OR DISESTABLISHMENT OF A PROTECTED AREA
OR THE MODIFICATION OF THE MARIKINA WATERSHED CAN ONLY
BE DONE BY AN ACT OF CONGRESS.

IV

THE COURT OF APPEALS ERRED AND ABUSED ITS DISCRETION
WHEN IT DELIBERATELY AND WILLFULLY BRUSHED ASIDE THE
UNANIMOUS FINDINGS AND ADVERSE RECOMMENDATIONS OF
RESPONSIBLE GOVERNMENT AGENCIES AND NON-PARTISAN
OFFICIALS CONCERNED WITH ENVIRONMENTAL PROTECTION IN
FAVOR OF THE SELF-SERVING, GRATUITOUS ASSERTIONS FOUND IN
THE UNSOLICITED, PARTISAN LETTER OF FORMER MALABON
MAYOR, NOW CHAIRMAN PROSPERO ORETA OF THE MMDA WHO IS
AN INTERESTED PARTY IN THIS CASE.


V

THE COURT OF APPEALS ERRED WHEN IT READILY SWALLOWED
RESPONDENTS ASSERTION THAT THE SAN MATEO DUMPSITE IS
LOCATED IN THE BUFFER ZONE OF THE RESERVATION AND IS
THEREFORE OUTSIDE OF ITS BOUNDARIES, AND EVEN DECLARED
IN ITS DECISION THAT IT TOOK SERIOUS NOTE OF THIS
PARTICULAR ARGUMENT.

VI

THE COURT OF APPEALS ERRED AND ABUSED ITS DISCRETION
WHEN IT ENCROACHED ON THE FUNCTION OF CONGRESS BY
EXPRESSING ITS UNJUSTIFIED FEAR OF MINI-SMOKEY MOUNTAINS
PROLIFERATING IN METRO MANILA AND JUSTIFYING ITS DECISION
IN FAVOR OF AN INTEGRATED SYSTEM OF SOLID WASTE
MANAGEMENT LIKE THE SAN MATEO LANDFILL.



On 05 January 1998, while the appeal was pending, the petitioners filed a
Motion for Temporary Restraining Order,
[17]
pointing out that the effects of the El
Nio phenomenon would be aggravated by the relentless destruction of the Marikina
Watershed Reservation. They noted that respondent MMDA had, in the meantime,
continued to expand the area of the dumpsite inside the Marikina Watershed
Reservation, cutting down thousands of mature fruit trees and forest trees, and leveling
hills and mountains to clear the dumping area. Garbage disposal operations were also
being conducted on a 24-hour basis, with hundreds of metric tons of wastes being
dumped daily, including toxic and infectious hospital wastes, intensifying the air, ground
and water pollution.
[18]


The petitioners reiterated their prayer that respondent MMDA be temporarily
enjoined from further dumping waste into the site and from encroaching into the area
beyond its existing perimeter fence so as not to render the case moot and academic.

On 28 January 1999, the petitioners filed a Motion for Early
Resolution,
[19]
calling attention to the continued expansion of the dumpsite by the MMDA
that caused the people of Antipolo to stage a rally and barricade the Marcos Highway to
stop the dump trucks from reaching the site for five successive days from 16 January
1999. On the second day of the barricade, all the municipal mayors of the province of
Rizal openly declared their full support for the rally, and notified the MMDA that they
would oppose any further attempt to dump garbage in their province.
[20]


As a result, MMDA officials, headed by then Chairman Jejomar Binay, agreed to
abandon the dumpsite after six months. Thus, the municipal mayors of Rizal, particularly
the mayors of Antipolo and San Mateo, agreed to the use of the dumpsite until that
period, which would end on 20 July 1999.
[21]


On 13 July 1999, the petitioners filed an Urgent Second Motion for Early
Resolution
[22]
in anticipation of violence between the conflicting parties as the date of the
scheduled closure of the dumpsite neared.

On 19 July 1999, then President Joseph E. Estrada, taking cognizance of the
gravity of the problems in the affected areas and the likelihood that violence would erupt
among the parties involved, issued a Memorandum ordering the closure of the dumpsite
on 31 December 2000.
[23]
Accordingly, on 20 July 1999, the Presidential Committee on
Flagship Programs and Projects and the MMDA entered into a MOA with the Provincial
Government of Rizal, the Municipality of San Mateo, and the City of Antipolo, wherein the
latter agreed to further extend the use of the dumpsite until its permanent closure on 31
December 2000.
[24]


On 11 January 2001, President Estrada directed Department of Interior and
Local Government Secretary Alfredo Lim and MMDA Chairman Binay to reopen the San
Mateo dumpsite in view of the emergency situation of uncollected garbage in Metro
Manila, resulting in a critical and imminent health and sanitation epidemic.
[25]


Claiming the above events constituted a clear and present danger of violence
erupting in the affected areas, the petitioners filed an Urgent Petition for Restraining
Order
[26]
on 19 January 2001.

On 24 January 2001, this Court issued the Temporary Restraining Order prayed
for, effective immediately and until further orders.
[27]

Meanwhile, on 26 January 2001, Republic Act No. 9003, otherwise known as
The Ecological Solid Waste Management Act of 2000, was signed into law by President
Estrada.

Thus, the petitioners raised only two issues in their Memorandum
[28]
of 08
February 2005: 1) whether or not respondent MMDA agreed to the permanent closure of
the San Mateo Landfill as of December 2000, and 2) whether or not the permanent
closure of the San Mateo landfill is mandated by Rep. Act No. 9003.

We hold that the San Mateo Landfill will remain permanently closed.

Although the petitioners may be deemed to have waived or abandoned the
issues raised in their previous pleadings but not included in the memorandum,
[29]
certain
events we shall relate below have inclined us to address some of the more pertinent
issues raised in the petition for the guidance of the herein respondents, and pursuant to
our symbolic function to educate the bench and bar.
[30]


The law and the facts indicate that a mere MOA does not guarantee the
dumpsites permanent closure.

The rally and barricade staged by the people of Antipolo on 28 January 1999,
with the full support of all the mayors of Rizal Province caused the MMDA to agree that it
would abandon the dumpsite after six months. In return, the municipal mayors allowed
the use of the dumpsite until 20 July 1999.

On 20 July 1999, with much fanfare and rhetoric, the Presidential Committee on
Flagship Programs and Projects and the MMDA entered into a MOA with the Provincial
Government of Rizal, the Municipality of San Mateo, and the City of Antipolo, whereby
the latter agreed to an extension for the use of the dumpsite until 31 December 2000, at
which time it would be permanently closed.

Despite this agreement, President Estrada directed Department of Interior and
Local Government Secretary Alfredo Lim and MMDA Chairman Binay to reopenthe San
Mateo dumpsite on 11 January 2001, in view of the emergency situation of uncollected
garbage in Metro Manila, resulting in a critical and imminent health and sanitation
epidemic; our issuance of a TRO on 24 January 2001 prevented the dumpsites
reopening.

Were it not for the TRO, then President Estradas instructions would have been
lawfully carried out, for as we observed in Oposa v. Factoran, the freedom of contract is
not absolute. Thus:

.. In Abe vs. Foster Wheeler Corp., this Court stated: "The freedom
of contract, under our system of government, is not meant to be
absolute. The same is understood to be subject to reasonable legislative
regulation aimed at the promotion of public health, moral, safety and
welfare. In other words, the constitutional guaranty of non-impairment
of obligations of contract is limited by the exercise of the police power of
the State, in the interest of public health, safety, moral and general
welfare." The reason for this is emphatically set forth in Nebia vs. New
York, quoted in Philippine American Life Insurance Co. vs. Auditor
General, to wit: "'Under our form of government the use of property
and the making of contracts are normally matters of private and not of
public concern. The general rule is that both shall be free of
governmental interference. But neither property rights nor contract
rights are absolute; for government cannot exist if the citizen may at
will use his property to the detriment of his fellows, or exercise his
freedom of contract to work them harm. Equally fundamental with the
private right is that of the public to regulate it in the common interest.'"
In short, the non-impairment clause must yield to the police power of
the state. (Citations omitted, emphasis supplied)

We thus feel there is also the added need to reassure the residents of the
Province of Rizal that this is indeed a final resolution of this controversy, for a brief
review of the records of this case indicates two self-evident facts. First, the San Mateo
site has adversely affected its environs, and second, sources of water should always
be protected.

As to the first point, the adverse effects of the site were reported as early as 19
June 1989, when the Investigation Report of the Community Environment and Natural
Resources Officer of DENR-IV-1 stated that the sources of domestic water supply of over
one thousand families would be adversely affected by the dumping operations.
[31]
The
succeeding report included the observation that the use of the areas as dumping site
greatly affected the ecological balance and environmental factors of the
community.
[32]
Respondent LLDA in fact informed the MMA that the heavy pollution and
risk of disease generated by dumpsites rendered the location of a dumpsite within the
Marikina Watershed Reservation incompatible with its program of upgrading the water
quality of the Laguna Lake.
[33]


The DENR suspended the sites ECC after investigations revealed ground
slumping and erosion had resulted from improper development of the site.
[34]
Another
Investigation Report
[35]
submitted by the Regional Technical Director to the DENR
reported respiratory illnesses among pupils of a primary school located approximately
100 meters from the site, as well as the constant presence of large flies and windblown
debris all over the schools playground. It further reiterated reports that the leachate
treatment plant had been eroded twice already, contaminating the nearby creeks that
were sources of potable water for the residents. The contaminated water was also
found to flow to the Wawa Dam and Boso-boso River, which in turn empties into
Laguna de Bay.

This brings us to the second self-evident point. Water is life, and must be saved
at all costs. In Collado v. Court of Appeals,
[36]
we had occasion to reaffirm our previous
discussion in Sta. Rosa Realty Development Corporation v. Court of Appeals,
[37]
on the
primordial importance of watershed areas, thus: The most important product of a
watershed is water, which is one of the most important human necessities. The
protection of watersheds ensures an adequate supply of water for future generations
and the control of flashfloods that not only damage property but also cause loss of
lives. Protection of watersheds is an intergenerational responsibility that needs to be
answered now.
[38]


Three short months before Proclamation No. 635 was passed to avert the
garbage crisis, Congress had enacted the National Water Crisis Act
[39]
to adopt urgent
and effective measures to address the nationwide water crisis which adversely affects
the health and well-being of the population, food production, and industrialization
process. One of the issues the law sought to address was the protection and
conservation of watersheds.
[40]


In other words, while respondents were blandly declaring that the reason for the
creation of the Marikina Watershed Reservation, i.e., to protect Marikina River as the
source of water supply of the City of Manila, no longer exists, the rest of the country was
gripped by a shortage of potable water so serious, it necessitated its own legislation.

Respondents actions in the face of such grave environmental consequences
defy all logic. The petitioners rightly noted that instead of providing solutions, they have,
with unmitigated callousness, worsened the problem. It is this readiness to wreak
irrevocable damage on our natural heritage in pursuit of what is expedient that has
compelled us to rule at length on this issue. We ignore the unrelenting depletion of our
natural heritage at our peril.

I.

THE REORGANIZATION ACT OF THE DENR DEFINES AND
LIMITS ITS POWERS OVER THE COUNTRYS NATURAL RESOURCES



The respondents next point out that the Marikina Watershed Reservation, and
thus the San Mateo Site, is located in the public domain. They allege that as such, neither
the Province of Rizal nor the municipality of San Mateo has the power to control or
regulate its use since properties of this nature belong to the national, and not to the local
governments.

It is ironic that the respondents should pursue this line of reasoning.

In Cruz v. Secretary of Environment and Natural Resources,
[41]
we had occasion
to observe that (o)ne of the fixed and dominating objectives of the 1935 Constitutional
Convention was the nationalization and conservation of the natural resources of the
country. There was an overwhelming sentiment in the convention in favor of the
principle of state ownership of natural resources and the adoption of the Regalian
doctrine. State ownership of natural resources was seen as a necessary starting point to
secure recognition of the states power to control their disposition, exploitation,
development, or utilization.
[42]


The Regalian doctrine was embodied in the 1935 Constitution, in Section 1 of
Article XIII on Conservation and Utilization of Natural Resources. This was reiterated
in the 1973 Constitution under Article XIV on the National Economy and the Patrimony
of the Nation, and reaffirmed in the 1987 Constitution in Section 2 of Article XII on
National Economy and Patrimony, to wit:
Sec. 2. All lands of the public domain, waters, minerals, coal,
petroleum, and other mineral oils, all forces of potential energy,
fisheries, forests or timber, wildlife, flora and fauna, and other natural
resources are owned by the State. With the exception of agricultural
lands, all other natural resources shall not be alienated. The
exploration, development and utilization of natural resources shall be
under the full control and supervision of the State. The State may
directly undertake such activities or it may enter into co-production,
joint venture, or production-sharing agreements with Filipino
citizens, or corporations or associations at least sixty per centum of
whose capital is owned by such citizens. Such agreements may be for
a period not exceeding twenty-five years, renewable for not more
than twenty-five years, and under such terms and conditions as may
be provided by law. In cases of water rights for irrigation, water
supply, fisheries, or industrial uses other than the development of
water power, beneficial use may be the measure and limit of the
grant.
[43]




Clearly, the state is, and always has been, zealous in preserving as much of our
natural and national heritage as it can, enshrining as it did the obligation to preserve and
protect the same within the text of our fundamental law.

It was with this objective in mind that the respondent DENR was mandated by
then President Corazon C. Aquino, under Section 4 of Executive Order No.
192,
[44]
otherwise known as The Reorganization Act of the Department of Environment
and Natural Resources, to be the primary government agency responsible for
the conservation, management, development and proper use of the countrys
environment and natural resources, specifically forest and grazing lands, mineral
resources, including those in reservation and watershed areas, and lands of the public
domain. It is also responsible for the licensing and regulation of all natural resources as
may be provided for by law in order to ensure equitable sharing of the benefits
derived therefrom for the welfare of the present and future generations of
Filipinos.

We expounded on this matter in the landmark case of Oposa v.
Factoran,
[45]
where we held that the right to a balanced and healthful ecology is a
fundamental legal right that carries with it the correlative duty to refrain from impairing
the environment. This right implies, among other things, the judicious management and
conservation of the countrys resources, which duty is reposed in the DENR under the
aforequoted Section 4 of Executive Order No. 192. Moreover:
Section 3 (of E. O. No. 192) makes the following statement of
policy:

SEC. 3. Declaration of Policy. - It is hereby
declared the policy of the State to ensure
the sustainable use, development, management,
renewal, and conservation of the country's forest,
mineral, land, off-shore areas and other natural
resources, including the protection and
enhancement of the quality of the environment,
and equitable access of the different segments of
the population to the development and use of the
country's natural resources, not only for the
present generation but for future generations as
well. It is also the policy of the state to recognize
and apply a true value system including social and
environmental cost implications relative to their
utilization; development and conservation of our
natural resources. (Emphasis ours)

This policy declaration is substantially re-stated in Title XIV,
Book IV of the Administrative Code of 1987, specifically in Section 1
thereof which reads:

SEC. 1. Declaration of Policy. - (1) The
State shall ensure, for the benefit of the Filipino
people, the full exploration and development as
well as the judicious disposition, utilization,
management, renewal and conservation of the
country's forest, mineral, land, waters, fisheries,
wildlife, off-shore areas and other natural
resources, consistent with the necessity of
maintaining a sound ecological balance and
protecting and enhancing the quality of the
environment and the objective of making the
exploration, development and utilization of such
natural resources equitably accessible to the
different segments of the present as well as future
generations.

(2) The State shall likewise recognize and
apply a true value system that takes into account
social and environmental cost implications relative
to the utilization, development and conservation of
our natural resources.

The above provision stresses the necessity of maintaining a
sound ecological balance and protecting and enhancing the quality of
the environment.
[46]
(Emphasis ours.)



In sum, the Administrative Code of 1987 and Executive Order No. 192 entrust
the DENR with the guardianship and safekeeping of the Marikina Watershed Reservation
and our other natural treasures. However, although the DENR, an agency of the
government, owns the Marikina Reserve and has jurisdiction over the same, this power is
not absolute, but is defined by the declared policies of the state, and is subject to the law
and higher authority. Section 2, Title XIV, Book IV of the Administrative Code of 1987,
while specifically referring to the mandate of the DENR, makes particular reference to
the agencys being subject to law and higher authority, thus:

SEC. 2. Mandate. - (1) The Department of Environment and
Natural Resources shall be primarily responsible for the
implementation of the foregoing policy.

(2) It shall, subject to law and higher authority, be in
charge of carrying out the State's constitutional mandate to control
and supervise the exploration, development, utilization, and
conservation of the country's natural resources.



With great power comes great responsibility. It is the height of irony that the
public respondents have vigorously arrogated to themselves the power to control the
San Mateo site, but have deftly ignored their corresponding responsibility as guardians
and protectors of this tormented piece of land.


II.

THE LOCAL GOVERNMENT CODE GIVES TO LOCAL GOVERNMENT UNITS ALL THE
NECESSARY POWERS TO PROMOTE THE GENERAL WELFARE OF THEIR INHABITANTS


The circumstances under which Proclamation No. 635 was passed also violates
Rep. Act No. 7160, or the Local Government Code.

Contrary to the averment of the respondents, Proclamation No. 635, which was
passed on 28 August 1995, is subject to the provisions of the Local Government Code,
which was approved four years earlier, on 10 October 1991.

Section 2(c) of the said law declares that it is the policy of the state to require
all national agencies and offices to conduct periodic consultations with appropriate local
government units, non-governmental and people's organizations, and other concerned
sectors of the community before any project or program is implemented in their
respective jurisdictions. Likewise, Section 27 requires prior consultations before a
program shall be implemented by government authorities and the prior approval of
the sanggunian is obtained.

During the oral arguments at the hearing for the temporary restraining order,
Director Uranza of the MMDA Solid Waste Management Task Force declared before the
Court of Appeals that they had conducted the required consultations. However, he added
that (t)his is the problem, sir, the officials we may have been talking with at the time this
was established may no longer be incumbent and this is our difficulty now. That is what
we are trying to do now, a continuing dialogue.
[47]


The ambivalent reply of Director Uranza was brought to the fore when, at the
height of the protest rally and barricade along Marcos Highway to stop dump trucks from
reaching the site, all the municipal mayors of the province of Rizal openly declared their
full support for the rally and notified the MMDA that they would oppose any further
attempt to dump garbage in their province.
[48]


The municipal mayors acted within the scope of their powers, and were in fact
fulfilling their mandate, when they did this. Section 16 allows every local government
unit to exercise the powers expressly granted, those necessarily implied therefrom, as
well as powers necessary, appropriate, or incidental for its efficient and effective
governance, and those which are essential to the promotion of the general welfare,
which involve, among other things, promot(ing) health and safety, enhance(ing) the
right of the people to a balanced ecology, and preserv(ing) the comfort and
convenience of their inhabitants.

In Lina , Jr. v. Pao,
[49]
we held that Section 2 (c), requiring consultations with
the appropriate local government units, should apply to national government projects
affecting the environmental or ecological balance of the particular community
implementing the project. Rejecting the petitioners contention that Sections 2(c) and 27
of the Local Government Code applied mandatorily in the setting up of lotto outlets
around the country, we held that:
From a careful reading of said provisions, we find that these
apply only to national programs and/or projects which are to be
implemented in a particular local community. Lotto is neither a
program nor a project of the national government, but of a charitable
institution, the PCSO. Though sanctioned by the national government,
it is far fetched to say that lotto falls within the contemplation of
Sections 2 (c) and 27 of the Local Government Code.

Section 27 of the Code should be read in conjunction with
Section 26 thereof. Section 26 reads:

SECTION 26. Duty of National Government Agencies in
the Maintenance of Ecological Balance. It shall be the duty of
every national agency or government-owned or controlled
corporation authorizing or involved in the planning and
implementation of any project or program that may cause
pollution, climatic change, depletion of non-renewable
resources, loss of crop land, range-land, or forest cover, and
extinction of animal or plant species, to consult with the
local government units, nongovernmental organizations, and
other sectors concerned and explain the goals and objectives
of the project or program, its impact upon the people and the
community in terms of environmental or ecological balance,
and the measures that will be undertaken to prevent or
minimize the adverse effects thereof.

Thus, the projects and programs mentioned in Section 27
should be interpreted to mean projects and programs whose
effects are among those enumerated in Section 26 and 27, to wit,
those that: (1) may cause pollution; (2) may bring about climatic
change; (3) may cause the depletion of non-renewable resources;
(4) may result in loss of crop land, range-land, or forest cover; (5)
may eradicate certain animal or plant species from the face of the
planet; and (6) other projects or programs that may call for the
eviction of a particular group of people residing in the locality
where these will be implemented. Obviously, none of these effects
will be produced by the introduction of lotto in the province of
Laguna. (emphasis supplied)

We reiterated this doctrine in the recent case of Bangus Fry Fisherfolk v.
Lanzanas,
[50]
where we held that there was no statutory requirement for thesangguniang
bayan of Puerto Galera to approve the construction of a mooring facility, as Sections 26
and 27 are inapplicable to projects which are not environmentally critical.

Moreover, Section 447, which enumerates the powers, duties and functions of
the municipality, grants the sangguniang bayan the power to, among other things, enact
ordinances, approve resolutions and appropriate funds for the general welfare of the
municipality and its inhabitants pursuant to Section 16 of th(e) Code. These include:
(1) Approving ordinances and passing resolutions to protect the
environment and impose appropriate penalties for acts
which endanger the environment, such as dynamite
fishing and other forms of destructive fishing, illegal logging
and smuggling of logs, smuggling of natural resources
products and of endangered species of flora and fauna, slash
and burn farming, and such other activities which result
in pollution, acceleration of eutrophication of rivers and
lakes, or of ecological imbalance; [Section 447 (1)(vi)]
(2) Prescribing reasonable limits and restraints on the use of
property within the jurisdiction of the
municipality, adopting a comprehensive land use plan for
the municipality, reclassifying land within the jurisdiction of
the city, subject to the pertinent provisions of this
Code, enacting integrated zoning ordinances in
consonance with the approved comprehensive land use plan,
subject to existing laws, rules and regulations; establishing
fire limits or zones, particularly in populous centers; and
regulating the construction, repair or modification of
buildings within said fire limits or zones in accordance with
the provisions of this Code; [Section 447 (2)(vi-ix)]

(3) Approving ordinances which shall ensure the efficient and
effective delivery of the basic services and facilities as
provided for under Section 17 of this Code, and in addition
to said services and facilities, providing for the
establishment, maintenance, protection, and
conservation of communal forests and watersheds, tree
parks, greenbelts, mangroves, and other similar forest
development projects .and, subject to existing laws,
establishing and providing for the maintenance, repair and
operation of an efficient waterworks system to supply water
for the inhabitants and purifying the source of the water
supply; regulating the construction, maintenance, repair
and use of hydrants, pumps, cisterns and
reservoirs; protecting the purity and quantity of the
water supply of the municipality and, for this
purpose, extending the coverage of appropriate
ordinances over all territory within the drainage area of
said water supply and within one hundred (100) meters
of the reservoir, conduit, canal, aqueduct, pumping
station, or watershed used in connection with the water
service; and regulating the consumption, use or wastage of
water. [Section 447 (5)(i) & (vii)]



Under the Local Government Code, therefore, two requisites must be met
before a national project that affects the environmental and ecological balance of local
communities can be implemented: prior consultation with the affected local
communities, and prior approval of the project by the appropriate sanggunian. Absent
either of these mandatory requirements, the projects implementation is illegal.

III.

WASTE DISPOSAL IS REGULATED BY THE ECOLOGICAL
SOLID WASTE MANAGEMENT ACT OF 2000



The respondents would have us overlook all the abovecited laws because the
San Mateo site is a very expensive - and necessary - fait accompli. The respondents cite
the millions of pesos and hundreds of thousands of dollars the government has already
expended in its development and construction, and the lack of any viable alternative
sites.

The Court of Appeals agreed, thus:
During the hearing on the injunction, questions were also
asked. What will happen if the San Mateo Sanitary Landfill is
closed? Where will the daily collections of garbage be disposed of and
dumped? Atty. Mendoza, one of the lawyers of the petitioners,
answered that each city/municipality must take care of its
own. Reflecting on that answer, we are troubled: will not the
proliferation of separate open dumpsites be a more serious health
hazard (which ha(s) to be addressed) to the residents of the
community? What with the galloping population growth and the
constricting available land area in Metro Manila? There could be a
mini-Smokey Mountain in each of the ten citiescomprising Metro
Manila, placing in danger the health and safety of more
people. Damage to the environment could be aggravated by the
increase in number of open dumpsites. An integrated system of solid
waste management, like the San Mateo Sanitary Landfill, appears
advisable to a populous metropolis like the Greater Metro Manila Area
absent access to better technology.
[51]



We acknowledge that these are valid concerns. Nevertheless, the lower court
should have been mindful of the legal truism that it is the legislature, by its very nature,
which is the primary judge of the necessity, adequacy, wisdom, reasonableness and
expediency of any law.
[52]


Moreover, these concerns are addressed by Rep. Act No. 9003. Approved on 26
January 2001, The Ecological Solid Waste Management Act of 2000 was enacted
pursuant to the declared policy of the state to adopt a systematic, comprehensive and
ecological solid waste management system which shall ensure the protection of public
health and environment, and utilize environmentally sound methods that maximize the
utilization of valuable resources and encourage resource conservation and
recovery.
[53]
It requires the adherence to a Local Government Solid Waste Management
Plan with regard to the collection and transfer, processing, source reduction, recycling,
composting and final disposal of solid wastes, the handling and disposal of special
wastes, education and public information, and the funding of solid waste management
projects.

The said law mandates the formulation of a National Solid Waste Management
Framework, which should include, among other things, the method and procedure for
the phaseout and the eventual closure within eighteen months from effectivity of the Act
in case of existing open dumps and/or sanitary landfills located within an aquifer,
groundwater reservoir or watershed area.
[54]
Any landfills subsequently developed
must comply with the minimum requirements laid down in Section 40, specifically that
the site selected must be consistent with the overall land use plan of the local
government unit, and that the site must be located in an area where the landfills
operation will not detrimentally affect environmentally sensitive resources such as
aquifers, groundwater reservoirs or watershed areas.
[55]


This writes finis to any remaining aspirations respondents may have of
reopening the San Mateo Site. Having declared Proclamation No. 635 illegal, we see no
compelling need to tackle the remaining issues raised in the petition and the parties
respective memoranda.

A final word. Laws pertaining to the protection of the environment were not
drafted in a vacuum. Congress passed these laws fully aware of the perilous state of both
our economic and natural wealth. It was precisely to minimize the adverse impact
humanitys actions on all aspects of the natural world, at the same time maintaining and
ensuring an environment under which man and nature can thrive in productive and
enjoyable harmony with each other, that these legal safeguards were put in place. They
should thus not be so lightly cast aside in the face of what is easy and expedient.


WHEREFORE, the petition is GRANTED. The Decision of the Court of Appeals in
CA-G.R. SP No. 41330, dated 13 June 1997, is REVERSED and SET ASIDE. The
temporary restraining order issued by the Court on 24 January 2001 is hereby made
permanent.

SO ORDERED.

EN BANC
G.R. No. 188078 : January 25, 2010
VICTORINO B. ALDABA, CARLO JOLETTE S. FAJARDO, JULIO G. MORADA, and
MINERVA ALDABA MORADA,Petitioners, v. COMMISSION ON
ELECTIONS, Respondent.
D E C I S I O N
CARPIO, J.:
The Case
This is an original action for Prohibition to declare unconstitutional Republic Act No.
9591 (RA 9591), creating a legislative district for the city of Malolos, Bulacan, for
violating the minimum population requirement for the creation of a legislative district in
a city.
Antecedents
Before 1 May 2009, the province of Bulacan was represented in Congress through four
legislative districts. The First Legislative District comprised of the city of
Malolos
1
cralaw and the municipalities of Hagonoy, Calumpit, Pulilan, Bulacan, and
Paombong. On 1 May 2009, RA 9591 lapsed into law, amending Malolos City
Charter,
2
cralawby creating a separate legislative district for the city. At the time the
legislative bills for RA 9591 were filed in Congress in 2007, namely, House Bill No. 3162
(later converted to House Bill No. 3693) and Senate Bill No. 1986, the population of
Malolos City was 223,069. The population of Malolos City on 1 May 2009 is a contested
fact but there is no dispute that House Bill No. 3693 relied on an undated certification
issued by a Regional Director of the National Statistics Office (NSO) that "the projected
population of the Municipality of Malolos will be 254,030 by the year 2010 using the
population growth rate of 3.78 between 1995 to 2000."
3
crlwvirtualibrry
Petitioners, taxpayers, registered voters and residents of Malolos City, filed this petition
contending that RA 9591 is unconstitutional for failing to meet the minimum population
threshold of 250,000 for a city to merit representation in Congress as provided under
Section 5(3), Article VI of the 1987 Constitution and Section 3 of the Ordinance appended
to the 1987 Constitution.
In its Comment to the petition, the Office of the Solicitor General (OSG) contended that
Congress use of projected population is non-justiciable as it involves a determination on
the "wisdom of the standard adopted by the legislature to determine compliance with [a
constitutional requirement]."
4
cralaw
The Ruling of the Court
We grant the petition and declare RA 9591 unconstitutional for being violative of Section
5(3), Article VI of the 1987 Constitution and Section 3 of the Ordinance appended to the
1987 Constitution
The 1987 Constitution requires that for a city to have a legislative district, the city must
have "a population of at least two hundred fifty thousand."
5
cralaw The only issue here is
whether the City of Malolos has a population of at least 250,000, whether actual or
projected, for the purpose of creating a legislative district for the City of Malolos in time
for the 10 May 2010 elections. If not, then RA 9591 creating a legislative district in the
City of Malolos is unconstitutional.
House Bill No. 3693 cites the undated Certification of Regional Director Alberto N.
Miranda of Region III of the National Statistics Office (NSO) as authority that the
population of the City of Malolos "will be 254,030 by the year 2010." The Certification
states that the population of "Malolos, Bulacan as of May 1, 2000 is 175,291." The
Certification further states that it was "issued upon the request of Mayor Danilo A.
Domingo of the City of Malolos in connection with the proposed creation of Malolos City
as a lone congressional district of the Province of Bulacan."
6
cralaw
The Certification of Regional Director Miranda, which is based on demographic
projections, is without legal effect because Regional Director Miranda has no basis and
no authority to issue the Certification. The Certification is also void on its face because
based on its own growth rate assumption, the population of Malolos will be less than
250,000 in the year 2010. In addition, intercensal demographic projections cannot be
made for the entire year. In any event, a city whose population has increased to 250,000
is entitled to have a legislative district only in the "immediately following
election"
7
cralaw after the attainment of the 250,000 population.
First, certifications on demographic projections can be issued only if such projections are
declared official by the National Statistics Coordination Board (NSCB). Second,
certifications based on demographic projections can be issued only by the NSO
Administrator or his designated certifying officer. Third, intercensal population
projections must be as of the middle of every year.
Section 6 of Executive Order No. 135
8
cralaw dated 6 November 1993 issued by President
Fidel V. Ramos provides:
SECTION 6. Guidelines on the Issuance of Certification of Population sizes Pursuant to
Section 7, 386, 442, 450, 452, and 461 of the New Local Government Code.
(a) The National Statistics Office shall issue certification on data that it has collected and
processed as well as on statistics that it has estimated.
(b) For census years, certification on population size will be based on actual population
census counts; while for the intercensal years, the certification will be made on the basis
of a set of demographic projections or estimates declared official by the National
Statistical Coordination Board (NSCB).
(c) Certification of population census counts will be made as of the census reference date,
such as May 1, 1990, while those of intercensal population estimates will be as of middle
of every year.
(d) Certification of population size based on projections may specify the range within
which the true count is deemed likely to fall. The range will correspond to the official low
and high population projections.
(e) The smallest geographic area for which a certification on population size may be
issued will be the barangay for census population counts, and the city or municipality for
intercensal estimates. If an LGU wants to conduct its own population census, during
offcensus years, approval must be sought from the NSCB and the conduct must be under
the technical supervision of NSO from planning to data processing.
(f) Certifications of population size based on published census results shall be issued by
the Provincial Census Officers or by the Regional Census Officers. Certifications based on
projections or estimates, however, will be issued by the NSO Administrator or his
designated certifying officer. (Emphasis supplied)
The Certification of Regional Director Miranda does not state that the demographic
projections he certified have been declared official by the NSCB. The records of this case
do not also show that the Certification of Regional Director Miranda is based on
demographic projections declared official by the NSCB. The Certification, which states
that the population of Malolos "will be 254,030 by the year 2010," violates the
requirement that intercensal demographic projections shall be "as of the middle of every
year." In addition, there is no showing that Regional Director Miranda has been
designated by the NSO Administrator as a certifying officer for demographic projections
in Region III. In the absence of such official designation, only the certification of the NSO
Administrator can be given credence by this Court.
Moreover, the Certification states that "the total population of Malolos, Bulacan as of May
1, 2000 is 175,291." The Certification also states that the population growth rate of
Malolos is 3.78% per year between 1995 and 2000. Based on a growth rate of 3.78% per
year, the population of Malolos of 175,291 in 2000 will grow to only 241,550 in 2010.
Also, the 2007 Census places the population of Malolos at 223,069 as of 1 August
2007.
9
cralaw Based on a growth rate of 3.78%, the population of Malolos will grow to
only 248,365 as of 1 August 2010. Even if the growth rate is compounded yearly, the
population of Malolos of 223,069 as of 1 August 2007 will grow to only 249,333 as of 1
August 2010.
10
cralaw
All these conflict with what the Certification states that the population of Malolos "will be
254,030 by the year 2010." Based on the Certifications own growth rate assumption, the
population of Malolos will be less than 250,000 before the 10 May 2010 elections.
Incidentally, the NSO has no published population projections for individual
municipalities or cities but only for entire regions and provinces.
11
cralaw
Executive Order No. 135 cannot simply be brushed aside. The OSG, representing
respondent Commission on Elections, invoked Executive Order No. 135 in its Comment,
thus:
Here, based on the NSO projection, "the population of the Municipality of Malolos will be
254,030 by the year 2010 using the population growth rate of 3.78 between 1995-2000."
This projection issued by the authority of the NSO Administrator is recognized under
Executive Order No. 135 (The Guidelines on the Issuance of Certification of Population
Sizes), which states:
x x x
(d) Certification of population size based on projections may specify the range within
which the true count is deemed likely to fall. The range will correspond to the official low
and high population projections.
x x x
(f) Certifications of population size based on published census results shall be issued by
the Provincial Census Officers or by the Regional Census Officers. Certifications based on
projections or estimates, however, will be issued by the NSO Administrator or his
designated certifying officer.
12
cralaw (Emphasis supplied)
Any population projection forming the basis for the creation of a legislative district must
be based on an official and credible source. That is why the OSG cited Executive Order
No. 135, otherwise the population projection would be unreliable or speculative.
Section 3 of the Ordinance appended to the 1987 Constitution provides:
Any province that may be created, or any city whose population may hereafter increase
to more than two hundred fifty thousand shall be entitled in the immediately following
election to at least one Member or such number of members as it may be entitled to on
the basis of the number of its inhabitants and according to the standards set forth in
paragraph (3), Section 5 of Article VI of the Constitution. xxx. (Emphasis supplied)
A city that has attained a population of 250,000 is entitled to a legislative district only in
the "immediately following election." In short, a city must first attain the 250,000
population, and thereafter, in the immediately following election, such city shall have a
district representative. There is no showing in the present case that the City of Malolos
has attained or will attain a population of 250,000, whether actual or projected, before
the 10 May 2010 elections.
Clearly, there is no official record that the population of the City of Malolos will be at
least 250,000, actual or projected, prior to the 10 May 2010 elections, the immediately
following election after the supposed attainment of such population. Thus, the City of
Malolos is not qualified to have a legislative district of its own under Section 5(3), Article
VI of the 1987 Constitution and Section 3 of the Ordinance appended to the 1987
Constitution.
On the OSGs contention that Congress choice of means to comply with the population
requirement in the creation of a legislative district is non-justiciable, suffice it to say that
questions calling for judicial determination of compliance with constitutional standards
by other branches of the government are fundamentally justiciable. The resolution of
such questions falls within the checking function of this Court under the 1987
Constitution to determine whether there has been a grave abuse of discretion amounting
to lack or excess of jurisdiction on the part of any branch or instrumentality of the
Government.
13
cralaw
Even under the 1935 Constitution, this Court had already ruled, "The overwhelming
weight of authority is that district apportionment laws are subject to review by the
courts."
14
cralaw Compliance with constitutional standards on the creation of legislative
districts is important because the "aim of legislative apportionment is to equalize
population and voting power among districts."
15
crlwvirtualibrry
WHEREFORE, we GRANT the petition. We DECLARE Republic Act No. 9591
UNCONSTITUTIONAL for being violative of Section 5(3), Article VI of the 1987
Constitution and Section 3 of the Ordinance appended to the 1987 Constitution.
SO ORDERED.