local gov case

7/30/2019 Local Gov Case

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BASCO V. PAGCOR

FACTS:

Petitioners sought to annul PD 1869 on the ff grounds:

1. It constitutes a waiver of a right prejudicial to a 3 rdperson with a right recognized by law. It waived the Manila City governments right to impose taxes and license

fees;

2. It intruded into an LGUs right to impose local taxes, violates local autonomy;

3. Violates equal protection clause since it legalizes PAGCOR-conducted gambling;

4. Violates the trend of Cory government to veer from monopolistic and crony economy.

PAGCOR: Given territorial jurisdiction over the entire country. It was to centralize and integrate all games of chance.

ISSUE: WON Sec. 13 par. 2 of PD 1896 constitutes a waiver of the right of the City of Manila to impose taxes and legal fees and WON it violates local autonomy.

HELD: NO.

RATIO:Gambling in all its forms, unless allowed by law, is generally prohibited. But the prohibition does not mean that the Government cannot regulate it in the exercise of its

police power.

PD 1869: Enacted to provide funds for social impact projects and subjected gambling to close government scrutiny.

The City of Manila is a mere Municipal corporation and has no inherent right to impose taxes. Its power to tax must yield to a legislative act which is superior havingbeen passed upon by the state itself which has the inherent power to tax.

The Charter of the City of Manila is subject to control by Congress. If Congress can grant Manila the power to tax certain matters, it can also provide for exemptionsand even take back the power.

The Citys power to impose license fees on gambling has long been revoked. As early as 1975, the power of local governments t o regulate gambling thru the grant of

franchise, licenses, or permits was withdrawn by PD No. 771 and was vested exclusively on the National Government.

Only the National Government has the power to issue licenses or permits for the operation of gambling.

Local governments have no power to tax instrumentalities of the National Government. PAGCOR is a government owned or controlled corporation with an originalcharter. All of its shares of stocks are owned by the National Government. In addition to its corporate powers, it also exercises regulatory powers.

PAGCOR has a dual role, to operate and regulate gambling casinos. The latter role is governmental, which places it in the category of an agency of the government.

Being an agency of the government, it must be exempt from local taxes, otherwise, it might be impeded or subject to the control of a mere local government.

This doctrine emanates from the supremacy of the National Government over local governments.

In 1992, representatives from PPC made representations with the Pagcor on the possibility of setting up a casino in Pryce Plaza Hotelin Cagayan de Oro City. On November 1992, the parties executed a contract of lease involving the ballroom of the hotel which would be

converted into a casino.Way back in 1950, the Sangguniang Panglungsod of CDO passed Resolution 2295 prohibiting the establishment of a gambling casino. Resolution2673, dated October 19, 1992, reiterated this prohibition. On December 7, 1992, Ordinance No. 3353 was enacted prohibiting the issuance ofbusiness permits for the operation of a casino. On January 4, 1993, Ordinance 3375-93 was passed prohibiting the operation of casinos.PPC filed a petition for prohibition with preliminary injunction against CDO before the CA. It prayed for the declaration of unconstitutionality ofOrdinance 3353. Pagcor intervened claiming that Ordinance 4475 was violative of the non-impairment of contracts and EP clauses. The CAdeclared the ordinances unconstitutional and void.

WON the Sangguniang Panglungsod has the authority to enact said ordinances

No

CDO, like other local political subdivisions, is empowered to enact ordinances for the purposes indicated in theLGC. It is expressly vested with the police power under what is known as the General Welfare Clause now embodied in Section 16. In addition,Section 458 declares that the Sangguniang Panglungsod has the power to approve ordinances and pass resolutions for the efficient and effectivecity government. The petitioners argue that by virtue of these provisions, the Sangguniang Panlungsod may prohibit the operation of casinos

because they involve games of chance, which are detrimental to the people.The adoption of the LGC, it is pointed out, had the effect of modifying the charter of the PAGCOR. The Code is not only a later enactment thanP.D. 1869 and so is deemed to prevail in case of inconsistencies between them. More than this, the powers of the PAGCOR under the decree areexpressly discontinued by the Code insofar as they do not conform to its philosophy and provisions, pursuant to Par. (f) of its repealing clause. Itis also maintained that assuming there is doubt regarding the effect of the Local Government Code on P.D. 1869, the doubt must be resolved infavor of the petitioners, in accordance with the direction in the Code calling for its liberal interpretation in favor of the local government units.

The morality of gambling is not a justiciable issue. Gambling is not illegal per se. While it is generallyconsidered inimical to the interests of the people, there is nothing in the Constitution categorically proscribing or penalizing gambling or, for thatmatter, even mentioning it at all. It is left to Congress to deal with the activity as it sees fit. In the exercise of its own discretion, the legislaturemay prohibit gambling altogether or allow it without limitation or it may prohibit some forms of gambling and allow others for whatever reasonsit may consider sufficient. The only question we can and shall resolve in this petition is the validity of Ordinance No. 3355 and Ordinance No.3375-93 as enacted by the Sangguniang Panlungsod of CDO.

The tests of a valid ordinance are well established. A long line of decisions 9 has held that to be valid, an ordinance must conformto the following substantive requirements: 1) It must not contravene the constitution or any statute. 2) It must not be unfair or oppressive. 3) Itmust not be partial or discriminatory. 4) It must not prohibit but may regulate trade. 5) It must be general and consistent with public policy. 6) Itmust not be unreasonable.

We begin by observing that under Sec. 458 of the LGC, LGUs are authorized to prevent or suppress, among others, "gambling and otherprohibited games of chance." Obviously, this provision excludes games of chance which are not prohibited but are in fact permitted by law. Thepetitioners are less than accurate in claiming that the Code could have excluded such games of chance but did not. In fact it does. The language ofthe section is clear and unmistakable. We conclude that since the word "gambling" is associated with "and other prohibited games of chance," theword should be read as referring to only illegal gambling which, like the other prohibited games of chance, must be prevented.

The apparent flaw in the ordinances in question is that they contravene P.D. 1869 and the public policy embodiedtherein insofar as they prevent PAGCOR from exercising the power conferred on it to operate a casino in CDO. Petitioner deny that the ordinancechanged the PD, rather the LGC itself changed the PD. It seems to us that the petitioners are playing with words. While insisting that thedecree has only been "modified pro tanto," they are actually arguing that it is already dead, repealed and useless for all intents and purposesbecause the Code has shorn PAGCOR of all power to centralize and regulate casinos. Strictly speaking, its operations may now be not onlyprohibited by the local government unit; in fact, the prohibition is not only discretionary but mandated by Sec 458 of the Code if the word "shall"as used therein is to be given its accepted meaning. Local government units have now no choice but to prevent and suppress gambling, which inthe petitioners' view includes both legal and illegal gambling. Under this construction, PAGCOR will have no more games of chance to regulate orcentralize as they must all be prohibited by the local government units pursuant to the mandatory duty imposed upon them by the Code. In this


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situation, PAGCOR cannot continue to exist except only as a toothless tiger or a white elephant and will no longer be able to exercise its powersas a prime source of government revenue through the operation of casinos.It is noteworthy that the petitioners have cited only Par. (f) of the repealing clause, conveniently discarding the rest of the provision whichpainstakingly mentions the specific laws or the parts thereof which are repealed (or modified) by the Code. Significantly, P.D. 1869 is not one ofthem. Furthermore, it is a familiar rule that implied repeals are not lightly presumed in the absence of a clear and unmistakable showing of suchintention.Moreover, the petitioners' suggestion that the Code authorizes them to prohibit all kinds of gambling would erase the distinction between thesetwo forms of gambling without a clear indication that this is the will of the legislature. In light of all the above considerations, we see no way ofarriving at the conclusion urged on us by the petitioners that the ordinances in question are valid. On the contrary, we find that the ordinancesviolate P.D. 1869, which has the character and force of a statute, as well as the public policy expressed in the decree allowing the playing ofcertain games of chance despite the prohibition of gambling in general.

The rationale of the requirement that the ordinances should notcontravene a statute is obvious. Municipal governments are only agents of the national government. Local councils exercise only delegatedlegislative powers conferred on them by Congress as the national lawmaking body. The delegate cannot be superior to the principal or exercisepowers 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 theyhave 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 someconstitutional 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 awrong, sweep from existence all of the municipal corporations in the State, and the corporation could not prevent it. We know of no limitation onthe 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 localgovernment units has not been enfeebled by the new provisions in the Constitution strengthening the policy of local autonomy. Without meaningto detract from that policy, we here confirm that Congress retains control of the local government units although in significantly reduced degreenow than under our previous Constitutions. The power to create still includes the power to destroy. The power to grant still includes the power towithhold or recall. True, there are certain notable innovations in the Constitution, like the direct conferment on the local government units of thepower to tax, which cannot now be withdrawn by mere statute. By and large, however, the national legislature is still the principal of the localgovernment units, which cannot defy its will or modify or violate it.Casino gambling is authorized by P.D. 1869. This decree has the status of a statute that cannot be amended or nullified by a mere ordinance.Hence, it was not competent for the Sangguniang Panlungsod of Cagayan de Oro City to enact Ordinance No. 3353 prohibiting the use ofbuildings for the operation of a casino and Ordinance No. 3375-93 prohibiting the operation of casinos. For all their praiseworthy motives, theseordinances are contrary to P.D. 1869 and the public policy announced therein and are therefore ultra vires and void.

I concur with the majority holding that the city ordinances in question cannot modify much less repeal PAGCOR's generalauthority to establish and maintain gambling casinos anywhere in the Philippines under Presidential Decree No. 1869. However, despite thelegality of the opening and operation of a casino in Cagayan de Oro City by respondent PAGCOR, I wish to reiterate my view that gambling inany form runs counter to the government's own efforts to re-establish and resurrect the Filipino moral character which is generally perceived tobe in a state of continuing erosion.

Wrong mode, not prohibition but declaratory relief. The issue that necessarily arises is whether in granting localgovernments (such as the City of Cagayan de Oro) the above powers and functions, the Local Government Code has, pro tanto, repealed P.D. No.1869 insofar as PAGCOR's general authority to establish and maintain gambling casinos anywhere in the Philippines is concerned. I join themajority in holding that the ordinances cannot repeal P.D. No. 1869.

The nullification by the Court of Appeals of the challenged ordinances as unconstitutional primarily because it is in contravention to P.D. No.1869 is unwarranted. A contravention of a law is not necessarily a contravention of the constitution. In any case, the ordinances can still standeven if they be conceded as offending P.D. No. 1869. They can be reconciled, which is not impossible to do. So reconciled, the ordinances should beconstrued as not applying to PAGCOR.

MMDA is a government agency tasked with the delivery of basic services in Metro Manila. Bel-Air Village Association, Inc. is a non-stock, non-profit corporation whose members are homeowners in Bel-Air Village, a private subdivision in Makati City. BAVA is the registeredowner of Neptune Street, a road inside Bel-Air Village.On December 30, 1995, respondent received from petitioner, through its Chairman, a notice dated December 22, 1995 requesting respondent toopen Neptune Street to public vehicular traffic starting January 2, 1996. BAVA was apprised that the perimeter wall separating the subdivisionfrom the adjacent Kalayaan Avenue would be demolished.On January 2, 1996, BAVA instituted against petitioner before the RTC a civil case for injunction. Respondent prayed for the issuance of a TROand preliminary injunction enjoining the opening of Neptune Street and prohibiting the demolition of the perimeter wall. The trial court issued atemporary restraining order the following day. After due hearing, the trial court denied the issuance of preliminary injunction.On appeal, the CA rendered a Decision on the merits of the case finding that the MMDA has no authority to order the opening of Neptune Street,a private subdivision road and cause the demolition of its perimeter walls. It held that the authority is lodged in the City Council of Makati byordinance.

WON the MMDA has authority to open Neptune Road to the public

No

MMDA claims that it has the authority to open Neptune Street to public traffic because it is an agent of the state endowed with policepower in the delivery of basic services in Metro Manila. One of these basic services is traffic management which involves the regulation of the useof thoroughfares to insure the safety, convenience and welfare of the general public. It is alleged that the police power of MMDA was affirmed bythis Court in the consolidated cases of Sangalang v. IAC. From the premise that it has police power, it is now urged that there is no need for theCity of Makati to enact an ordinance opening Neptune street to the public.Police power is an inherent attribute of sovereignty. It has been defined as the power vested by the Constitution in the legislature to make,ordain, and establish all manner of wholesome and reasonable laws, statutes and ordinances, either with penalties or without, not repugnant tothe Constitution, as they shall judge to be for the good and welfare of the commonwealth, and for the subjects of the same. The power is plenary

and its scope is vast and pervasive, reaching and justifying measures for public health, public safety, public morals, and the general welfare.It bears stressing that police power is lodged primarily in the National Legislature. It cannot be exercised by any group or body of individuals notpossessing legislative power. The National Legislature, however, may delegate this power to the President and administrative boards as well asthe lawmaking bodies of municipal corporations or local government units. Once delegated, the agents can exercise only such legislative powersas are conferred on them by the national lawmaking body.

i.e., twelve (12) cities and five (5) municipalities, namely,the cities of Caloocan, Manila, Mandaluyong, Makati, Pasay, Pasig, Quezon, Muntinlupa, Las Pinas, Marikina, Paranaque and Valenzuela, andthe municipalities of Malabon, , Navotas, , Pateros, San Juan and Taguig.

.The of the MMDAs plans, programs and projects is undertaken by the local government units, national government agencies,accredited peoples organizations, non-governmental organizations, and the private sector as well as by the MMDA itself. For this purpose, theMMDA has the power to enter into contracts, memoranda of agreement and other cooperative arrangements with these bodies for the delivery ofthe required services within Metro Manila.


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Clearly, the scope of the MMDAs function is limited to the delivery of the seven (7) basic services. One of these is transport and trafficmanagement which includes the formulation and monitoring of policies, standards and projects to rationalize the existing transport operations,infrastructure requirements, the use of thoroughfares and promotion of the safe movement of persons and goods. It also covers the mass transportsystem and the institution of a system of road regulation, the administration of all traffic enforcement operations, traffic engineering services andtraffic education programs, including the institution of a single ticketing system in Metro Manila for traffic violations. Under this service, theMMDA is expressly authorized "to set the policies concerning traffic" and "coordinate and regulate the implementation of all traffic managementprograms." In addition, the MMDA may "install and administer a single ticketing system," fix, impose and collect fines and penalties for all trafficviolations.It will be noted that the powers of the MMDA are limited to the following acts: formulation, coordination, regulation, implementation,preparation, management, monitoring, setting of policies, installation of a system and administration.

. Even the Metro Manila Council has not been delegated any legislative power. Unlikethe legislative bodies of the local government units, there is no provision in R. A. No. 7924 that empowers the MMDA or its Council to "enactordinances, approve resolutions and appropriate funds for the general welfare" of the inhabitants of Metro Manila. The MMDA is, as termed inthe charter itself, a "development authority." It is an agency created for the purpose of laying down policies and coordinating with the variousnational government agencies, peoples organizations, non-governmental organizations and the private sector for the efficient and expeditiousdelivery of basic services in the vast metropolitan area. and these are actually summed up in thecharter itselfPetitioner cannot seek refuge in the cases of where we upheld a zoning ordinance issued by the MetroManila Commission (MMC), the predecessor of the MMDA, as an exercise of police power. The first decision was on the merits of thepetition, while the second decision denied reconsideration of the first case and in addition discussed the case of .

, both involved zoning ordinances passed by themunicipal council of Makati and the MMC. In the instant case, the basis for the proposed opening of Neptune Street is contained in the notice ofDecember 22, 1995 sent by petitioner to respondent BAVA, through its president. The notice does not cite any ordinance or law, either by theSangguniang Panlungsod of Makati City or by the MMDA, as the legal basis for the proposed opening of Neptune Street. Petitioner MMDAsimply relied on its authority under its charter "to rationalize the use of roads and/or thoroughfares for the safe and convenient movement ofpersons." Rationalizing the use of roads and thoroughfares is one of the acts that fall within the scope of transport and traffic management. By nostretch of the imagination, however, can this be interpreted as an express or implied grant of ordinance-making power, much less police power.Misjuris

Jjlex

, the local government units became primarily responsible for the governance of their respective politicalsubdivisions. The to addressing common problems involving basic services that transcended local boundaries.

. Its power was merely to provide the local government units technical assistance in the preparation of localdevelopment plans. Any semblance of legislative power it had was confined to a "review [of] legislation proposed by the local legislativeassemblies to ensure consistency among local governments and with the comprehensive development plan of Metro Manila," and to "advise thelocal governments accordingly."

It is not even a"special metropolitan political subdivision" as contemplated in Section 11, Article X of the Constitution. The creation of a "special metropolitanpolitical subdivision" requires the approval by a majority of the votes cast in a plebiscite in the political units directly affected. R. A. No. 7924 wasnot submitted to the inhabitants of Metro Manila in a plebiscite. The Chairman of the MMDA is not an official elected by the people, butappointed by the President with the rank and privileges of a cabinet member. In fact, part of his function is to perform such other duties as maybe assigned to him by the President, whereas in local government units, the President merely exercises supervisory authority. This emphasizesthe of the MMDA.

It is the local government units, acting through their respective legislative councils,that possess legislative power and police power. In the case at bar, the Sangguniang Panlungsod of Makati City did not pass any ordinance orresolution ordering the opening of Neptune Street, hence, its proposed opening by petitioner MMDA is illegal and the respondent Court ofAppeals did not err in so ruling. We desist from ruling on the other issues as they are unnecessary. EsmsoWe stress that this decision does not make light of the MMDAs noble efforts to solve the chaotic traffic condition in Metro Manila. Everyday,

traffic jams and traffic bottlenecks plague the metropolis. Even our once sprawling boulevards and avenues are now crammed with cars while citystreets are clogged with motorists and pedestrians. Traffic has become a social malaise affecting our peoples productivity and the efficientdelivery of goods and services in the country. The MMDA was created to put some order in the metropolitan transportation system butunfortunately the powers granted by its charter are limited. Its good intentions cannot justify the opening for public use of a private street in aprivate subdivision without any legal warrant. The promotion of the general welfare is not antithetical to the preservation of the rule of law.

On September 27, 1988, petitioner Municipality, through its Council, approved Resolution No. 60 (A resolution to confirm and/or ratifythe ongoing burial assistance program extending P500 to a bereaved family, funds to be taken out of unappropriated available funds existing inthe municipal treasury.) Metro Manila Commission approved Resolution No. 60. Thereafter, the municipal secretary certified a disbursementfired of P400,000 for the implementation of the program.However, COA disapproved Resolution 60 and disallowed in audit the disbursement of funds. COA denied the petitioners reconsi deration asResolution 60 has no connection or relation between the objective sought to be attained and the alleged public safety, general welfare, etc of theinhabitant of Makati. Also, the Resolution will only benefit a few individuals. Public funds should only be used for public purposes.

WON Resolution No. 60, re-enacted under Resolution No. 243, of the Municipality of Makati is a valid exercise of police power under the

general welfare clause

Yes

The police power is a governmental function, an inherent attribute of sovereignty, which was born with civilized government. It isfounded largely on the maxims, "Sic utere tuo et ahenum non laedas and "Salus populi est suprema lex Its fundamental purpose is securing thegeneral welfare, comfort and convenience of the people.Police power is inherent in the state but not in municipal corporations). Before a municipal corporation may exercise such power, there must be avalid delegation of such power by the legislature which is the repository of the inherent powers of the State. A valid delegation of police powermay arise from express delegation, or be inferred from the mere fact of the creation of the municipal corporation; and as a general rule, municipalcorporations may exercise police powers within the fair intent and purpose of their creation which are reasonably proper to give effect to thepowers expressly granted, and statutes conferring powers on public corporations have been construed as empowering them to do the thingsessential to the enjoyment of life and desirable for the safety of the people.


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Municipal governments exercise this power under the general welfare clause: pursuant thereto they are clothed with authority to "enact suchordinances and issue such regulations as may be necessary to carry out and discharge the responsibilities conferred upon it by law, and such asshall 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." Andunder Section 7 of BP 337, "every local government unit shall exercise the powers expressly granted, those necessarily implied therefrom, as wellas powers necessary and proper for governance such as to promote health and safety, enhance prosperity, improve morals, and maintain peaceand 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 thepeople. It is the most essential, insistent, and illimitable of powers. In a sense it is the greatest and most powerful attribute of the government.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 thereal needs of the people in their health, safety, comfort, and convenience as consistently as may be with private rights. It extends to all the greatpublic needs, and, in a broad sense includes all legislation and almost every function of the municipal government. It covers a wide scope ofsubjects, and, while it is especially occupied with whatever affects the peace, security, health, morals, and general welfare of the community, it isnot limited thereto, but is broadened to deal with conditions which exists so as to bring out of them the greatest welfare of the people bypromoting public convenience or general prosperity, and to everything worthwhile for the preservation of comfort of the inhabitants of thecorporation. Thus, it is deemed inadvisable to attempt to frame any definition which shall absolutely indicate the limits of police power.COA is not attuned to the changing of the times. Public purpose is not unconstitutional merely because it incidentally benefits a limited numberof persons. As correctly pointed out by the Office of the Solicitor General, "the drift is towards social welfare legislation geared towards statepolicies to provide adequate social services, the promotion of the general welfare social justice (Section 10, Ibid) as well as human dignity andrespect for human rights. The care for the poor is generally recognized as a public duty. The support for the poor has long been an acceptedexercise of police power in the promotion of the common good.There is no violation of the equal protection clause in classifying paupers as subject of legislation. Paupers may be reasonably classified. Differentgroups may receive varying treatment. Precious to the hearts of our legislators, down to our local councilors, is the welfare of the paupers. Thus,statutes have been passed giving rights and benefits to the disabled, emancipating the tenant-farmer from the bondage of the soil, housing theurban poor, etc.Resolution No. 60, re-enacted under Resolution No. 243, of the Municipality of Makati is a paragon of the continuing program of our governmenttowards social justice. The Burial Assistance Program is a relief of pauperism, though not complete. The loss of a member of a family is a painfulexperience, and it is more painful for the poor to be financially burdened by such death. Resolution No. 60 vivifies the very words of the latePresident Ramon Magsaysay 'those who have less in life, should have more in law." This decision, however must not be taken as a precedent, oras an official go-signal for municipal governments to embark on a philanthropic orgy of inordinate dole-outs for motives political or otherwise.

The doctrine of non-suability of the State is expressly provided for in Article XVI, Section 3 of the Consti, to wit: "the State may not besued without its consent." Express consent may be embodied in a general law or a special law. The standing consent of the State to be sued incase of money claims involving liability arising from contracts is found in Act No. 3083. A special law may be passed to enable a person to sue thegovernment for an alleged quasi-delict. Consent is implied when the government enters into business contracts, thereby descending to the level ofthe other contracting party, and also when the State files a complaint, thus opening itself to a counterclaim.Municipal corporations are agencies of the State when they are engaged in governmental functions and therefore should enjoy the sovereignimmunity from suit. Nevertheless, they are subject to suit even in the performance of such functions because their charter provided that they cansue and be sued.A distinction should first be made between suability and liability. "Suability depends on the consent of the state to be sued, liability on theapplicable law and the established facts. The circumstance that a state is suable does not necessarily mean that it is liable; on the other hand, itcan never be held liable if it does not first consent to be sued. Liability is not conceded by the mere fact that the state has allowed itself to besued. When the state does waive its sovereign immunity, it is only giving the plaintiff the chance to prove, if it can, that the defendant is liable."Anent the issue of whether or not the municipality is liable for the torts committed by its employee, the test of liability of the municipalitydepends on whether or not the driver, acting in behalf of the municipality, is performing governmental or proprietary functions (Torio vs.Fontanilla). According to City of Kokomo vs Loy(Indiana SC), municipal corporations exist in a dual capacity, and their functions are twofold. Inone they exercise the right springing from sovereignty, and while in the performance of the duties pertaining thereto, their acts are political andgovernmental. Their officers and agents in such capacity, though elected or appointed by them, are nevertheless public functionaries performing apublic service, and as such they are officers, agents, and servants of the state. In the other capacity the municipalities exercise a private,proprietary or corporate right, arising from their existence as legal persons and not as public agencies. Their officers and agents in theperformance of such functions act in behalf of the municipalities in their corporate or individual capacity, and not for the state or sovereignpower."It has already been remarked that municipal corporations are suable because their charters grant them the competence to sue and be sued.Nevertheless, they are generally not liable for torts committed by them in the discharge of governmental functions and can be held answerableonly if it can be shown that they were acting in a proprietary capacity.In the case at bar, the driver of the dump truck of the municipality insists that "he was on his way to the Naguilian river to get a load of sand andgravel for the repair of San Fernando's municipal streets." In the absence of any evidence to the contrary, the regularity of the performance ofofficial duty is presumed pursuant to Section 3(m) of Rule 131 of the Revised Rules of Court. Hence, We rule that the driver of the dump truckwas performing duties or tasks pertaining to his office.We already stressed in the case of Palafox, et. al. vs. Province of Ilocos Norte, the DistrictEngineer, and the Provincial Treasurer that "the construction or maintenance of roads in which the truck and the driver worked at the time ofthe accident are admittedly governmental activities."After a careful examination of existing laws and jurisprudence, We arrive at the conclusion that the municipality cannot be held liable for thetorts committed by its regular employee, who was then engaged in the discharge of governmental functions. Hence, the death of the passengertragic and deplorable though it may be imposed on the municipality no duty to pay monetary compensation.

Genaro N. Teotico was at the corner of a "loading and unloading" zone, waiting for a jeepney to take him down town. After waiting forabout five minutes, he managed to hail a jeepney that came along to a stop. As he stepped down from the curb to board the jeepney, and took afew steps, he fell inside an uncovered and unlighted catch basin or manhole on P. Burgos Avenue. Due to the fall, his head hit the rim of themanhole breaking his eyeglasses and causing broken pieces thereof to pierce his left eyelid. As blood flowed therefrom, impairing his vision,several persons came to his assistance and pulled him out of the manhole. One of them brought Teotico to the PGH. In addition to the laceratedwound in his left upper eyelid, Teotico suffered contusions on the left thigh, the left upper arm, the right leg and the upper lip apart from anabrasion on the right infra-patella region.Teotico filed a complaint for damages against the City of Manila, its mayor, city engineer, city health officer, city treasurer and chief of police.The trial court dismissed the complaitn. The CA affirmed, except insofar as the City of Manila is concerned, which was sentenced to pay damagesin the aggregate sum of P6,750.00.

Should RA 409 prevail over Art 2189 of the CC

No

: The city shall not be liable or held for damages or injuries to persons or property arising from the failure of the Mayor, theMunicipal Board, or any other city officer, to enforce the provisions of this chapter, or any other law or ordinance, or from negligence of saidMayor, Municipal Board, or other officers while enforcing or attempting to enforce said provisions.

: Provinces, cities and municipalities shall be liable for damages for the death of, or injuries suffered by, any person by reason ofdefective conditions of road, streets, bridges, public buildings, and other public works under their control or supervision.


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It is true that, insofar as its territorial application is concerned, Republic Act No. 409 is a special law and the Civil Code a general legislation;but, as regards the subject-matter of the provisions above quoted, Section 4 of Republic Act 409 establishes a general rule regulating the liabilityof the City of Manila for: "damages or injury to persons or property arising from the failure of" city officers "to enforce the provisions of" said Act"or any other law or ordinance, or from negligence" of the city "Mayor, Municipal Board, or other officers while enforcing or attempting to enforcesaid provisions." Upon the other hand, Article 2189 of the Civil Code constitutes a particular prescription making "provinces, cities andmunicipalities . . . liable for damages for the death of, or injury suffered by any person by reason "specifically" of the defective condition of roads,streets, bridges, public buildings, and other-public works under their control or supervision." In other words, said section 4 refers to liabilityarising from negligence, in general, regardless of the object thereof, whereas Article 2189 governs liability due to "defective streets," in particular.Since the present action is based upon the alleged defective condition of a road, said Article 2189 is decisive thereon.It is urged that the City of Manila cannot be held liable to Teotico for damages: 1) because the accident involving him took place in a nationalhighway; and 2) because the City of Manila has not been negligent in connection therewith.As regards the first issue, we note that it is based upon an allegation of fact not made in the answer of the City. Moreover, Teotico alleged in hiscomplaint, as well as in his amended complaint, that his injuries were due to the defective condition of a street which is "under the supervisionand control" of the City. In its answer to the amended complaint, the City, in turn, alleged that "the streets aforementioned were and have beenconstantly kept in good condition and regularly inspected and the storm drains and manholes thereof covered by the defendant City and the

officers concerned" who "have been ever vigilant and zealous in the performance of their respective functions and duties as imposed upon them by

law."Thus, the City had, in effect, admitted that P. Burgos Avenue was and is underits control and supervision.Moreover, the assertion to the effect that said Avenue is a national highway was made, for the firsttime, in its motion for reconsideration of thedecision of the Court of Appeals. Such assertion raised, therefore, a question of fact, which had not been put in issue in the trial court, and cannotbe set up, for the first time, on appeal, much less after the rendition of the decision of the appellate court, in a motion for the reconsiderationthereof.At any rate, under Article 2189 of the Civil Code, it is not necessary for the liability therein established to attach that the defective roads orstreets belong to the province, city or municipality from which responsibility is exacted. What said article requires is that the province, city ormunicipality have either "control or supervision" over said street or road. Even if P. Burgos Avenue were, therefore, a national highway, thiscircumstance would not necessarily detract from its "control or supervision" by the City of Manila, under Republic Act 409.This authority has been neither withdrawn nor restricted by Republic Act No. 917 and Executive Order No. 113, dated May 2, 1955, upon whichthe City relies. Said Act governs the disposition or appropriation of the highway funds and the giving of aid to provinces, chartered cities andmunicipalities in the construction of roads and streets within their respective boundaries, and Executive Order No. 113 merely implements theprovisions of said Republic Act No. 917, concerning the disposition and appropriation of the highway funds. Moreover, it provides that "theconstruction, maintenance and improvement of national primary, national secondary and national aid provincial and city roads shall beaccomplished by the Highway District Engineers and Highway CityEngineers under the supervision of the Commissioner of Public Highwaysand shall be financed from such appropriations as may be authorized by the Republic of the Philippines in annual or special appropriation Acts."Then, again, the determination of whether or not P. Burgos Avenue is under the control or supervision of the City of Manila and whether thelatter is guilty of negligence, in connection with the maintenance of said road, which were decided by the Court of Appeals in the affirmative, isone of fact, and the findings of said Court thereon are not subject to our review.

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