Title
Land Transportation Office vs. City of Butuan
Case
G.R. No. 131512
Decision Date
Jan 20, 2000
Dispute over LGU authority to register tricycles and issue licenses under Local Government Code; SC ruled LTO retains registration and licensing functions.

Case Summary (G.R. No. 131512)

Central Issue: Devolution of Registration and Licensing Functions

The core dispute is whether the LTO’s exclusive authority to register motor vehicles—specifically tricycles—and to issue driver’s licenses was devolved to local government units under the Local Government Code, or whether only the LTFRB’s franchising powers were so transferred.

Trial and Appellate Rulings Enjoining LTO

The Regional Trial Court of Butuan permanently enjoined the LTO from registering tricycles and issuing tricycle-driver licenses, holding that LGUs had acquired those powers. The Court of Appeals affirmed, prompting the LTO’s petition for certiorari to the Supreme Court.

Distinction Between LTO and LTFRB Functions

Under R.A. 4136, as amended, the LTO is empowered to register all motor vehicles used on public highways and to license drivers (Art. III, Sec. 4[d]). The LTFRB—created by E.O. No. 202—regulates public-utility vehicles “for hire” and grants franchises (Certificates of Public Convenience) but does not register vehicles or test drivers.

Specific Devolution Provisions in the Local Government Code

Sections 447 and 458 of the Local Government Code clearly devolve to LGUs the power to regulate tricycle operations and to grant franchises or permits therefor, subject to guidelines from the Department of Transportation and Communications (DOTC). The Code does not mention devolution of vehicle registration or driver-licensing functions.

DOTC Guidelines Confirm Limited Devolution

The DOTC issued implementing guidelines that assign to LGUs the issuance, amendment, renewal, suspension or cancellation of Motorized Tricycle Operator’s Permits (MTOPs), and the regulation of tricycle routes, zones, and safety conditions. These guidelines expressly limit LGU duties to franchising and operational regulation—not registration or licensing.

Continued LTO Exclusivity Over Registration and Licensing

Article 1, Chapter II of R.A. 4136 requires that no motor vehicle operate on a public highway unless registered by the LTO for the current year. The LTO also maintains the central repository of vehicle records and inspects vehicles and drivers for safety compliance. These national regulatory functions remain unaffected by the Local Government Code.

Rationale Against Full Devolution

Permitting LGUs to register tricycles and issue driver’s licenses would risk increased vehicle theft, fraudulent licensing, and fragmented safety standards. The Supreme Court agreed with the Solicitor General’s concern that devolution of these functions would undermine effective enforcement of consistent roadworthiness and driver qualification requirements.

Taxing Powers Do Not Imply Regulatory Authority

Although Section 129 of the Local Government Code empowers LGUs to create revenue sources, and Section 133 generally prohibits local fees for vehicle registration and driver licensing (except for tricycles), these taxing provisions cannot be construed to repeal the LTO’s regulatory police powers by implication. Taxation and regulation are distinct governmental functions.

Statutory Construction and Non-Implied Repeal

Because the Local Government Code explicitly devolves only the LTFRB’s franchising powers, the absence of

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