MALABANG v. BENITO [G.R. No. L-28113 March 28, 1969]

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MALABANG v. BENITO

G.R. No. L-28113 March 28, 1969

SUBJECT: LAW ON PUBLIC CORPORATION

Topic: De Facto Municipal Corporation

FACTS: Petitioner Amer Macaorao Balindong is the mayor of Malabang, Lanao del Sur. Balabagan was formerly a part of the municipality of Malabang, having been created on March 15, 1960, by Executive Order 386 of the then Pres. Carlos P. Garcia, out of barrios and sitios of the latter municipality.

 

Petitioners assailed the validity of EO 386 of the then President Carlos P. Garcia, which created the Municipality of Balabagan out of barrios and sitios of Malabang. Petitioner relied on the ruling in Pelaez v. Auditor General while respondent contended that  that the rule announced in Pelaez can have no application in this case because unlike the municipalities involved in Pelaez, the municipality of Balabagan is at least a de facto corporation, having been organized under color of a statute before this was declared unconstitutional, its officers having been either elected or appointed, and the municipality itself having discharged its corporate functions for the past five years preceding the institution of this action. It is contended that as a de facto corporation, its existence cannot be collaterally attacked, although it may be inquired into directly in an action for quo warranto at the instance of the State and not of an individual like the petitioner Balindong.

 

ISSUE: Whether or not the municipality of Balabagan is a de facto corporation.

 

RULING: NO. A corporation organized under a statute subsequently declared invalid cannot acquire the status of a ‘de facto’ corporation unless there is some other statute under which the supposed corporation may be validly organized.

 

The following principles were deduced by the SC:

 

1. The color of authority requisite to the organization of a de facto municipal corporation may be:

• A valid law enacted by the legislature
• An unconstitutional law, valid on its face, which has either (a) been upheld for a time by the courts or (b) not yet been declared void; provided that a warrant for its creation can be found in some other valid law or in the recognition of its potential existence by the general laws or constitution of the state.

 

2. There can be no de facto municipal corporation unless either directly or potentially, such a de jure corporation is authorized by some legislative fiat.

 

3. There can be no color of authority in an unconstitutional statute alone, the invalidity of which is apparent on its face.

 

4. There can be no de facto corporation created to take the place of an existing de jure corporation, as such organization would clearly be a usurper.

 

In the cases where a de facto municipal corporation was recognized as such despite the fact that the statute creating it was later invalidated, the decisions could fairly be made to rest on the consideration that there was some other valid law giving corporate vitality to the organization. Hence, in the case at bar, the mere fact that Balabagan was organized at a time when the statute had not been invalidated CANNOT conceivably make it a de facto corporation, as, independently of the Administrative Code provision in question, there is no other valid statute to give color of authority to its creation.

 

The petition is GRANTED. Executive Order 386 is declared void, and the respondents are hereby permanently restrained from performing the duties and functions of their respective offices.

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