Lina, Jr. vs. Paño

A local government unit cannot, by ordinance or resolution, prohibit what the national legislature has expressly authorized by law; a provincial board resolution merely expressing objection to lotto is a valid policy statement but possesses no binding legal force to serve as a basis for denying a mayor's permit.

The Philippine Charity Sweepstakes Office (PCSO) is the principal government agency authorized under Republic Act 1169, as amended by Batas Pambansa Blg. 42, to hold and conduct charity sweepstakes, lotteries, and similar activities. Tony Calvento was appointed by PCSO as an agent to install a lotto terminal in San Pedro, Laguna. The Sangguniang Panlalawigan of Laguna had enacted Kapasiyahan Blg. 508, T. 1995, expressing objection to illegal gambling and lotto in the province. Under the Local Government Code of 1991 (Republic Act 7160), local government units exercise delegated legislative powers derived from Congress, and provisions in Sections 2(c) and 27 require prior consultations and sanggunian approval before implementing national projects or programs.

On December 29, 1995, respondent Tony Calvento was appointed agent by the Philippine Charity Sweepstakes Office (PCSO) to install Terminal OM 20 for the operation of lotto. He thereafter requested from Mayor Calixto Cataquiz of San Pedro, Laguna, a mayor's permit to open a lotto outlet.

Mayor Cataquiz denied the request in a letter dated February 19, 1996. The denial was predicated on Kapasiyahan Blg. 508, T. 1995, a resolution enacted by the Sangguniang Panlalawigan of Laguna on September 18, 1995. The resolution expressed the provincial board's vehement objection to illegal gambling, particularly lotto, in the province, and requested the PNP provincial commander to intensify the campaign against all forms of illegal gambling, including jueteng.

Respondent Calvento thereafter filed a complaint for declaratory relief with prayer for preliminary injunction and temporary restraining order before the Regional Trial Court of San Pedro, Laguna, Branch 93, presided by respondent Judge Francisco Dizon Paño. The complaint sought (1) a preliminary injunction or TRO enjoining the defendants from implementing Kapasiyahan Blg. 508, T. 1995; (2) an order requiring Mayor Cataquiz to issue a business permit for the lotto outlet; and (3) an order annulling or declaring the resolution invalid.

On February 10, 1997, the RTC rendered judgment enjoining petitioners from implementing or enforcing Kapasiyahan Blg. 508, T. 1995. Petitioners moved for reconsideration, which was denied by the RTC in an Order dated April 21, 1997. Petitioners then elevated the matter to the Supreme Court via petition for review on certiorari on May 23, 1997, alleging that the trial court erred in enjoining enforcement of the resolution and in failing to appreciate the argument that prior consultation and approval by local government units are required before national agencies implement programs in their jurisdictions.

• Validity of the Resolution: Petitioners contended that the assailed resolution is a valid policy declaration of the Provincial Government of Laguna expressing vehement objection to lotto and all forms of gambling, and constitutes a valid exercise of police power under the General Welfare Clause of Republic Act 7160.
• Prior Consultation Requirement: Petitioners maintained that respondent's lotto operation is illegal because no prior consultations and approval by the local government were sought before it was implemented, contrary to the express provisions of Sections 2(c) and 27 of R.A. 7160.

• Supremacy of National Law: Respondent Calvento argued that the questioned resolution is, in effect, a curtailment of the power of the state, since the national legislature itself had already declared lotto as legal and permitted its operations around the country.
• Non-Mandatory Consultation: Respondent Calvento contended that the prior consultation requirement is not mandatory, as it is merely stated as a declaration of policy and not a self-executing provision of the Local Government Code of 1991.
• Authority from PCSO: Respondent Calvento stated that his operation of the lotto system is legal because of the authority given to him by PCSO, which in turn had been granted a franchise to operate the lotto by Congress.
• Ordinances Cannot Contravene Statutes: The Office of the Solicitor General, for the State, argued that the Provincial Government of Laguna has no power to prohibit a form of gambling authorized by the national government, because ordinances should not contravene statutes and local councils exercise only delegated legislative powers that cannot exceed those of Congress.

• Validity of the Resolution: Whether Kapasiyahan Blg. 508, T. 1995 of the Sangguniang Panlalawigan of Laguna and the denial of a mayor's permit based thereon are valid.
• Prior Consultation Requirement: Whether prior consultations and approval by the concerned sanggunian are needed before a lotto system can be operated in a given local government unit.

• Validity of the Resolution: No. The resolution is a mere policy statement expressing the local government's objection to lotto—valid as an expression of autonomy but lacking binding legal force; a local government unit cannot prohibit by ordinance or resolution what Congress has expressly authorized by law.
• Prior Consultation Requirement: No. Sections 2(c) and 27 of the Local Government Code apply only to national programs and projects, and lotto is neither a program nor a project of the national government but of PCSO, a charitable institution; the consultation argument was also an afterthought not raised in the mayor's denial letter.

• Validity of the Resolution: The resolution merely states the council's "objection" to lotto and is not self-executing. Petitioners themselves admitted in their petition that the resolution is a "policy declaration" of the province's vehement opposition to lotto. While valid as a policy statement—part of local autonomy to air views contrary to the national government's—it cannot serve as a legal basis to prohibit lotto. Lotto is a game of chance authorized by Congress through R.A. 1169, as amended by B.P. Blg. 42, granting PCSO the franchise to operate lotteries. Local government units exercise only delegated legislative powers from Congress; the delegate cannot be superior to the principal. As held in Magtajas vs. Pryce Properties Corp., municipal governments are mere agents of the national government and cannot undo acts of Congress by mere ordinance. The 1987 Constitution's enhancement of local autonomy did not alter this basic relationship; local autonomy means decentralization, not sovereignty, and local governments are not an "imperium in imperio." The resolution, "like spring water, could not rise above its source of power, the national legislature."
• Prior Consultation Requirement: Sections 2(c) and 27 of the Local Government Code apply only to national programs and projects to be implemented in a particular local community. Lotto is neither a program nor a project of the national government but of PCSO, a charitable institution. Section 27 must be read in conjunction with Section 26, which enumerates projects that may cause pollution, climatic change, depletion of non-renewable resources, loss of crop land or forest cover, extinction of animal or plant species, or eviction of residents—none of which lotto produces. Moreover, the lack-of-consultation argument was an afterthought; Mayor Cataquiz's denial letter relied solely on Kapasiyahan Blg. 508, not on any consultation requirement.

• Delegated Powers Doctrine — Local government units exercise only delegated legislative powers conferred by Congress. The delegate cannot be superior to the principal or exercise powers higher than those of the latter. A local government unit cannot, by ordinance or resolution, prohibit what the national legislature has expressly authorized by law. Applied here: the Sangguniang Panlalawigan of Laguna could not prohibit lotto operations that Congress had authorized through R.A. 1169, as amended by B.P. Blg. 42.
• Local Autonomy as Decentralization — The principle of local autonomy under the 1987 Constitution means "decentralization," not sovereignty. Local governments are not an "imperium in imperio." Autonomy is necessarily limited and confined within the extent allowed by central authority. The constitutional provisions enhancing local autonomy did not weaken the basic principal-agent relationship between Congress and local government units. Congress retains control of local government units; the power to create includes the power to destroy, and the power to grant includes the power to withhold or recall.
• Policy Statement vs. Self-Executing Ordinance — A resolution expressing a local council's objection to a particular activity is a valid policy statement but is not self-executing and possesses no binding legal force. It cannot serve as a valid legal basis to prohibit an activity authorized by Congress. Applied here: Kapasiyahan Blg. 508 was valid as an expression of the province's objection but could not justify denying a mayor's permit for lotto.

• "It is a heresy to suggest that the local government units can undo the acts of Congress, from which they have derived their power in the first place, and negate by mere ordinance the mandate of the statute." — This passage articulates the core ratio decidendi: the supremacy of national law over local legislation and the inability of local government units to contravene acts of Congress.
• "The power to create still includes the power to destroy. The power to grant still includes the power to withhold or recall." — This passage, quoted from Magtajas vs. Pryce Properties Corp., defines the enduring nature of Congress's control over local government units under the 1987 Constitution, notwithstanding the enhanced autonomy provisions.
• "Ours is still a unitary form of government, not a federal state. Being so, any form of autonomy granted to local governments will necessarily be limited and confined within the extent allowed by the central authority." — This defines the constitutional scope of local autonomy as decentralization rather than sovereignty, establishing the doctrinal boundary within which local legislative power operates.

• Tatel vs. Virac, 207 SCRA 157 (1992) — Cited for the rule that ordinances should not contravene existing statutes enacted by Congress, reinforcing the hierarchy between national and local legislation.
• Magtajas vs. Pryce Properties Corp., 234 SCRA 255 (1994) — Controlling precedent extensively quoted for the principle that municipal governments are mere agents of the national government, local councils exercise only delegated powers, and the delegate cannot be superior to the principal. The Court relied on this case's formulation of the principal-agent relationship and its discussion of the Constitution's effect on local autonomy.
• Basco vs. Philippine Amusement and Gaming Corporation, 197 SCRA 52 (1991) — Cited for the principle that local autonomy under the 1987 Constitution means decentralization and does not make local governments sovereign or an "imperium in imperio."

• Section 1, Republic Act 1169, as amended by Batas Pambansa Blg. 42 — Grants PCSO the authority to hold and conduct charity sweepstakes, lotteries, and similar activities. Applied as the statutory basis confirming that lotto is a game of chance expressly authorized by Congress, which a local government unit cannot prohibit.
• Section 2(c), Republic Act 7160 (Local Government Code of 1991) — Declaration of policy requiring national agencies and offices to conduct periodic consultations with appropriate local government units and other concerned sectors before implementing any project or program in their respective jurisdictions. Held inapplicable to lotto operations.
• Section 26, Republic Act 7160 — Duty of national government agencies and government-owned or controlled corporations to consult with local government units on projects that may cause pollution, climatic change, depletion of non-renewable resources, loss of crop land or forest cover, or extinction of animal or plant species. Read in conjunction with Section 27 to define the scope of prior consultation requirements.
• Section 27, Republic Act 7160 — Requires that no project or program shall be implemented by government authorities unless prior consultations and approval of the sanggunian concerned are obtained. Held inapplicable to lotto, which is neither a national government program nor a project of the type contemplated by Sections 26 and 27.
• Article X, Section 5, 1987 Constitution — Direct conferment on local government units of the power to tax, cited as a constitutional innovation that cannot be withdrawn by mere statute, but which does not alter the basic principal-agent relationship between Congress and local government units.

Bellosillo, Mendoza, Buena, and De Leon, Jr., JJ., concurred.