Case Summary (G.R. No. 112497)
Petitioners and Respondents
Petitioner: Hon. Franklin M. Drilon, Secretary of Justice
Respondents: Mayor Alfredo S. Lim; Vice-Mayor Jose L. Atienza; City Treasurer Anthony Acevedo; Sangguniang Panglungsod; City of Manila
Key Dates
Filing of Local Government Code: 1991
Secretary’s resolution nullifying the Manila Revenue Code: 1993
Regional Trial Court decision declaring Section 187 unconstitutional: 1993
Supreme Court decision: August 4, 1994
Applicable Law
1987 Philippine Constitution (Article X, Sections 4–5; Article VIII, Section 4)
Local Government Code, Section 187
Implementing Rules Articles 276(a)–(b), 511(a); Local Autonomy Act, Section 2 (historical comparison)
Procedural History
Upon appeal by four oil companies and a taxpayer, Secretary Drilon invalidated the Manila Revenue Code for lack of prescribed public-hearing procedures and for ultra vires provisions. The City of Manila secured a writ of certiorari from the Regional Trial Court, which (1) reinstated the revenue ordinance and (2) struck down Section 187 as unconstitutional for vesting in the Secretary of Justice a power of control over local governments contrary to the Constitution’s grant of only supervisory authority to the President. The Supreme Court reinstated the petition for certiorari and took up the constitutionality of Section 187 and procedural compliance.
Issues Presented
- Whether Section 187 of the Local Government Code, which authorizes the Secretary of Justice to review the legality and constitutionality of local tax ordinances without suspending their effectivity, violates the Constitution’s policy of local autonomy and the President’s exclusive supervisory power.
- Whether the City of Manila complied with the statutory procedural requirements in enacting Ordinance No. 7794.
Parties’ Contentions
Petitioner argues that Section 187 embodies legitimate supervisory authority, does not permit substitution of judgment, and that the Manila Revenue Code failed to observe public-hearing, publication, posting, and translation requirements. Respondents contend that Section 187 unlawfully confers a power of control, infringing local autonomy, and that all procedural steps for public hearings and publication were duly followed.
Jurisdiction and Standard of Review
The Supreme Court confirmed that lower courts possess jurisdiction to test constitutionality under BP 129 and Article X, Section 5(2) of the 1987 Constitution. It reiterated the presumption of constitutionality: legislation is upheld unless there is clear proof of constitutional violation, and courts should exercise “purposeful hesitation” before invalidating a statute.
Supervision versus Control
The Court distinguished “control” (authority to alter or replace subordinate actions at will) from “supervision” (ensuring compliance with legal procedures). Section 187 empowers the Secretary to review only the legality and constitutionality of tax ordinances; it does not authorize him to exercise personal discretion on policy, wisdom, or reasonableness, nor to draft substitute measures. Hence, the power is supervisory, not one of control.
Validity of Section 187
Applying the 1987 Constitution’s local autonomy provisions, the Court held that Section 187 falls within permissible supervisory functions akin to the President’s role and does not encroach on the taxing power vested in local governments under Article X, Section 5. Prior analogous provisions in the Local Autonomy Act underscored supervisory review of procedural and legal compliance without subjecting local ordinances to policy judgments by the nation
Case Syllabus (G.R. No. 112497)
Facts
- The principal question involves the constitutionality of Section 187 of the Local Government Code, which prescribes the procedure for approval and effectivity of local tax ordinances and revenue measures, including mandatory public hearings and an appeal to the Secretary of Justice.
- Four oil companies and a taxpayer appealed to the Secretary of Justice, challenging Manila Ordinance No. 7794 (the Manila Revenue Code), and the Secretary declared it null and void for (a) failure to comply with procedural requirements and (b) inclusion of provisions contrary to law and public policy.
- The City of Manila filed a petition for certiorari before the Regional Trial Court (RTC) of Manila, which (i) revoked the Secretary’s resolution and sustained the ordinance and (ii) declared Section 187 unconstitutional for vesting in the Secretary of Justice a power of control over local governments in contravention of the Constitution’s policy of local autonomy.
Procedural History
- The City of Manila’s certiorari petition led the RTC to annul the Secretary’s resolution and uphold the Manila Revenue Code while striking down Section 187 of the Local Government Code.
- The Secretary of Justice sought review before the Supreme Court. An initial dismissal occurred for non-compliance with a Technical Circular, but the petition was reinstated upon proper compliance, given the importance of the constitutional issues.
- The Supreme Court granted the petition and elevated the exhibits submitted in the RTC to ascertain procedural compliance.
Legal Issue
- Whether Section 187 of the Local Government Code is constitutional in vesting the Secretary of Justice with authority to review and, if warranted, revoke local tax ordinances.
- Whether the City of Manila complied with the procedural requirements for the enactment of the Manila Revenue Code prescribed by the Local Governmen