Drilon v. Lim
NEW DOCTRINEFacts
The Antecedents: The Secretary of Justice declared Ordinance No. 7794, the Manila Revenue Code, null and void for non-compliance with procedural requirements for enacting tax ordinances and for containing provisions contrary to law and public policy. This declaration was made upon appeal by four oil companies and a taxpayer. Procedural History: The City of Manila filed a petition for certiorari with the Regional Trial Court (RTC) of Manila, which revoked the Secretary's resolution and sustained the ordinance. The RTC held that procedural requirements were observed and declared Section 187 of the Local Government Code unconstitutional for vesting the Secretary of Justice with the power of control over local governments, violating the principle of local autonomy. The Petition: The Secretary of Justice, through the Secretary of Justice, filed the present petition seeking to reverse the RTC decision, arguing that Section 187 is constitutional and that procedural requirements for enacting tax ordinances were indeed not observed.
Issue(s)
Whether Section 187 of the Local Government Code is constitutional. Whether the procedural requirements for the enactment of Ordinance No. 7794 (Manila Revenue Code) were observed.
Ruling
The Supreme Court reversed the RTC decision declaring Section 187 of the Local Government Code unconstitutional, but affirmed the RTC's finding that the procedural requirements in the enactment of the Manila Revenue Code were observed. The Court held Section 187 constitutional.
Ratio Decidendi
On the constitutionality of Section 187 of the Local Government Code: The Court held that Section 187 is constitutional and does not violate the principle of local autonomy. The power vested in the Secretary of Justice to review tax ordinances is an act of supervision, not control. Supervision involves ensuring that lower officers perform their functions in accordance with law, while control involves the power to alter, modify, or set aside subordinate actions and substitute one's own judgment. The Secretary of Justice, in reviewing tax ordinances, only ascertains their constitutionality or legality, ensuring compliance with prescribed procedures and legal limitations, without substituting his judgment on the wisdom or reasonableness of the ordinance. This is consistent with the general supervision granted to the President over local governments, as the Secretary of Justice acts to ensure that the local government's actions are within the bounds of law. The Court distinguished this from the power to suspend ordinances based on subjective criteria like being unjust, excessive, or oppressive, which would indeed constitute control. On the observance of procedural requirements for Ordinance No. 7794: The Court, after examining the exhibits submitted, affirmed the RTC's finding that the procedural requirements for the enactment of the Manila Revenue Code were observed. This included the sending of written notices for public hearings, publication of the proposed ordinance, holding of public hearings as evidenced by minutes, and publication of the approved ordinance in newspapers of general circulation. The Court noted that while the posting of the approved ordinance was an exception, its publication in successive issues of a newspaper satisfied due process. Furthermore, the requirement for translation and dissemination of the ordinance was deemed applicable to local development plans and public investment programs, not to tax ordinances.
Main Doctrine
Section 187 of the Local Government Code, which allows the Secretary of Justice to review the constitutionality or legality of tax ordinances and, if warranted, revoke them, is constitutional as it constitutes an act of supervision, not control, over local governments. The Secretary's role is to ensure compliance with law, not to substitute his judgment on the wisdom or reasonableness of the ordinance.