G.R. No. L-28113 - Municipality of Malabang vs. Benito

Case Summary (G.R. No. L-28113)

Key Individuals and Context

Petitioners: Municipality of Malabang, Lanao del Sur, and Amer Macaorao Balindong (Mayor of Malabang).
Respondents: Pangandapun Benito (Mayor of Balabagan) and municipal councilors of Balabagan.
Factual setting: Balabagan was created out of barrios and sitios of Malabang by Executive Order No. 386 (President Carlos P. Garcia) on March 15, 1960. The petition sought prohibition to nullify EO 386 and to restrain respondents from exercising municipal functions.

Petitioner’s Claim and Respondents’ Defense

Petitioners’ claim: EO 386 is void under the doctrine announced in Pelaez v. Auditor General and Municipality of San Joaquin v. Siva; therefore the respondents have no authority to exercise municipal functions.
Respondents’ defense: Balabagan had been organized and its officers chosen and had exercised municipal functions for several years before the Pelaez decision; it therefore constitutes at least a de facto municipal corporation whose existence cannot be collaterally attacked by a private party.

Key Dates and Applicable Constitutional Framework

Date of creation of Balabagan by EO 386: March 15, 1960.
Governing constitutional framework for judicial review in this decision: the Constitution then in force (i.e., the 1935 Constitution), as the decision was rendered prior to 1990.
Statutory provisions at issue: Section 68 of the Revised Administrative Code (purporting to vest the President with power to create municipalities) and Section 23 of Republic Act No. 2370 (Barrio Charter Act) (vesting power to create barrios in the provincial board), as implicated by Pelaez.

Primary Legal Issue

Whether Balabagan is a de facto municipal corporation whose existence cannot be collaterally attacked, despite the subsequent judicial invalidation of the Executive Order under which it was created; and, relatedly, whether an executive order creating a municipality can confer color of authority where the statute or provision claimed to authorize it has been held invalid.

Precedents and Authorities Relied Upon

Domestic precedents: Pelaez v. Auditor General (holding Section 68 invalid as an undue delegation and incompatible with constitutional limits on presidential power over local governments) and Municipality of San Joaquin v. Siva (applying Pelaez to nullify a municipality created by executive order).
Foreign authorities and doctrinal material cited: U.S. Supreme Court decisions (Norton v. Shelby County; Chicot County Drainage District v. Baxter State Bank) and doctrinal commentary (Tooke, Yale Law Journal article) discussing de facto municipal corporations under unconstitutional statutes and the doctrine that prior existence of an invalid statute or act may be an “operative fact” with consequences.

Court’s Analysis on the de facto Corporation Argument

Legal standard: The collateral-attack bar applies only where a municipal corporation is at least de facto; if the municipal entity is neither de jure nor de facto (i.e., a nullity), its existence may be questioned by any person whose rights are affected.
Analytical import of U.S. and doctrinal authorities: A statute that is unconstitutional on its face cannot furnish color of authority for a de facto municipal corporation; however, an unconstitutional law that is valid on its face and has not yet been declared void may, in some contexts, furnish color of authority provided there is also some other valid law or constitutional provision under which corporate existence is at least potentially authorized. The Yale Law Journal synthesis identifies conditions under which color of authority may exist and the limitations (e.g., no de facto corporation can displace an existing de jure corporation).
Application to the case: The Executive Order creating Balabagan was predicated solely on the authority claimed under Section 68 of the Administrative Code. Independently of the Administrative Code provision, there was no other valid statute or constitutional provision that would lend color of authority to the municipality’s creation. Because Section 68 had been held to lack the requisite authority, there was no valid legislative fiat or other operative legal basis that could support a de facto municipal corporation in Balabagan.

Treatment of Acts Performed under an Invalid Executive Order

On absolute nullity: Norton v. Shelby County is cited for the proposition that an unconstitutional act “is not a law” and “creates no office.” The Court recognizes that EO 386 “created no office” insofar as it lacked lawful authority.
On operative consequences: The Court nevertheless adopts the Chicot County formulation that the prior existence of a statute or executive act is an “operative fact” whose past existence may have consequences that cannot justly be ignored. Accordingly, invalidation of EO 386 does not necessarily render every act performed under the municipality’s aegis a nullity; the Court acknowledges potential effects on vested rights, status, and transactions performed in reliance on the municipal organization, and so seeks to avoid unnecessary disruption. The Court, however, did not allow those considerations to sustain the municipal corporation’s existence where the foundational authority was absent.

Conclusion and Relief

Holding: Executive Order No. 386 is void. Balabagan is not a municipal corporation de jure or de facto for purposes of collateral immunity from attack.
Relief granted: Petition for prohibition granted; respondents permanently restrained from performing the duties and functions of the municipal offices purportedly created by EO 386. No costs were awarded.

Analysis of the Concurring Opinion (Justice Fernando)

Agreement with majority: Justice Fernando concurs fully but emphasizes and elaborates the doctrinal implications regarding the effect of judicial annulment of executive acts.
Extension of Chicot doctrine: He underscores that the Chicot principle—recognizing that a statute’s or executive act’s prior existence may have operative consequences even after judicial invalidation—applies equally to presidential acts as to legislative acts.
Rationale: Respect for the coordinate branches and the presumption of validity of official acts during the interval before judicial nullification justify recognizing some practical consequences of those acts rather than treating them as if they never existed in every respect. Justice Fernando stresses the need for realism and orderly governance: although the executive act may be declared void, the reality of its prior existence can be relevant to rights and relations formed under it.
Further point: Fernando clarifies that the Court’s decision extends the Chicot reasoning to executive acts invalidated both for constitutional infirmity an

Case Syllabus (G.R. No. L-28113)

Facts

The petitioner Amer Macaorao Balindong is the mayor of Malabang, Lanao del Sur.
The respondent Pangandapun Benito is the mayor of the municipality of Balabagan, Lanao del Sur; the remaining respondents are the councilors of Balabagan.
Balabagan was formerly part of the municipality of Malabang.
Balabagan was created on March 15, 1960 by Executive Order No. 386 issued by President Carlos P. Garcia, created out of barrios and sitios of Malabang.
The petitioners sought prohibition to nullify Executive Order 386 and to restrain the respondent municipal officials from performing their official functions.
The petitioners relied on this Court’s ruling in Pelaez v. Auditor General and Municipality of San Joaquin v. Siva as the legal basis for the action.

Procedural Posture

The case was brought to this Court as a petition for prohibition to annul Executive Order 386 and restrain municipal officials of Balabagan from exercising their offices.
The Court rendered a decision granting the petition, declaring Executive Order 386 void, and permanently restraining respondents from performing duties of their respective offices.
There was no pronouncement as to costs.
Concepcion, C.J., authored the opinion (as clarified in the concurring opinion of J. Fernando); Justices Reyes, JBL, Dizon, Makalintal, Zaldivar, Sanchez, and Capistrano concurred; Justice Fernando concurred fully and filed a separate opinion; Justices Teehankee and Barredo did not take part.

Legal Issues Presented

Whether Executive Order No. 386, which created the municipality of Balabagan under Presidential authority, is valid.
Whether Balabagan qualified as at least a de facto municipal corporation such that its existence could not be collaterally attacked by a private party.
Whether a statute or executive act that was relied upon prior to its judicial invalidation can lend color of validity to the organization of a municipality.
Whether section 68 of the Administrative Code (granting the President the power to create municipalities) and section 23 of Republic Act No. 2370 (Barrio Charter Act) affect the validity of executive creation of municipalities and the President’s authority thereunder, in light of this Court’s prior decision in Pelaez.

Petitioners’ Contentions

Petitioners sought prohibition to nullify Executive Order 386 and to enjoin respondents from performing their official functions.
Petitioners relied on the Court’s decision in Pelaez (and Municipality of San Joaquin v. Siva), which invalidated the President’s asserted power to create municipalities under section 68 of the Administrative Code and held that section 23 of R.A. 2370 vested the power to create barrios in the provincial board, implying negation of the presidential power to create municipalities.

Respondents’ Contentions

Respondents admitted the facts alleged but argued Pelaez did not apply because Balabagan was at least a de facto corporation.
They contended Balabagan was organized under color of statute before Pelaez, its officers had been elected or appointed, and the municipality had exercised corporate functions for five years prior to the action.
Respondents argued that, as a de facto corporation, Balabagan’s existence could not be collaterally attacked by a private person and could be inquired into only by the State in a quo warranto proceeding.

Relevant Doctrines and Precedents Cited

Pelaez v. Auditor General: held section 23 of R.A. 2370 implied a statutory denial of presidential authority to create municipalities and ruled section 68 of the Administrative Code unconstitutional for undue delegation and for conflicting with Article VII, Section 10(1) of the Constitution.
Municipality of San Joaquin v. Siva: applied Pelaez to annul an executive order creating Lawigan municipality despite creation before section 68 was invalidated.
Norton v. Shelby County: “An unconstitutional act is not a law; it confers no rights; it imposes no duties; it affords no protection; it creates no office; it is, in legal contemplation, as inoperative as though it had never been passed.”
Chicot County Drainage District v. Baxter State Bank: qualified the absolute retroactive effect of a judicial declaration of unconstitutionality by recognizing that the prior existence of a statute is an operative fact with consequences that may not be ignored; recognized questions of vested rights, status, prior determinations, and public policy.
Linkletter v. Walker and Johnson v. New Jersey cited by analogy for prospective vs. retrospective application of judicial rulings.
Secondary authorities and treatises: E. McQuillin, The Law of Municipal Corporations; Tooke, “De Facto Municipal Corporations under Unconstitutional Statutes” (Yale L.J. article); various U.S. and state cases illustrating split views on de facto municipal corporations under unconstitutional statutes.

Legal Principles Regarding De Facto Municipal Corporations

General rule: inquiry into the legal existence of a municipality is normally reserved to the State by quo warranto or other direct proceedings; collateral attacks by private persons are limited.
The rule disallowing collateral attacks applies only where the municipal corporation is at least a de facto corporation.
If the municipal organization is neither de jure nor de facto but a nullity, its existence may be questioned collaterally or directly by any person whose rights or interests are affected.
The question whether a municipality is a de facto corporation depends on whether its creation had “color of authority.