G.R. No. L-28113, March 28, 1969
THE MUNICIPALITY OF MALABANG, LANAO DEL SUR, and AMER MACAORAO BALINDONG, petitioners, vs. PANGANDAPUN BENITO, HADJI NOPODIN MACAPUNUNG, HADJI HASAN MACARAMPAD, FREDERICK V. DUJERTE MONDACO ONTAL, MARONSONG ANDOY, MACALABA INDAR LAO, respondents.

FACTS

The petitioner Amer Macaorao Balindong is the mayor of Malabang, Lanao del Sur. The respondents are the mayor and councilors of the municipality of Balabagan, Lanao del Sur. Balabagan was created on March 15, 1960, by Executive Order 386 of President Carlos P. Garcia, formed from barrios and sitios of the municipality of Malabang. The petitioners filed an action for prohibition to nullify Executive Order 386 and to restrain the respondent municipal officials from performing their official functions. They relied on the rulings in Pelaez v. Auditor General and Municipality of San Joaquin v. Siva, which held that the statutory power to create barrios implied a negation of the presidential power to create municipalities, and that the provision in the Administrative Code granting the President such power was an unconstitutional delegation of legislative power and offended the constitutional provision limiting the President’s power over local governments to mere supervision. The respondents argued that the municipality of Balabagan was at least a de facto corporation, having been organized and functioning for about five years before the institution of the action, and thus its existence could not be collaterally attacked by a private individual.

ISSUE

Whether the municipality of Balabagan, created by an executive order subsequently declared unconstitutional, is a de facto municipal corporation whose existence cannot be collaterally attacked in a proceeding for prohibition instituted by a private party.

RULING

No. The petition is granted. Executive Order 386 is declared void, and the respondents are permanently restrained from performing their official duties. The Supreme Court ruled that Balabagan is not a de facto corporation. A de facto municipal corporation cannot exist where the statute or charter creating it is unconstitutional, and there is no other valid law to give color of authority to its creation. The Court cited the principle that an unconstitutional act is not a law; it confers no rights, imposes no duties, and creates no office. Since Executive Order 386 was issued under an unconstitutional provision of the Administrative Code, and there was no other valid statute authorizing the creation of Balabagan, its organization lacked the requisite color of authority. The mere fact that it was organized before the statute was invalidated does not confer de facto status. However, the Court, citing Chicot County Drainage District v. Baxter State Bank, noted that the existence of the executive order prior to its invalidation is an “operative fact,” and thus acts done in reliance upon the municipality’s creation are not necessarily nullities. The rule disallowing collateral attacks applies only to de facto corporations; since Balabagan was not one, its existence could be questioned in this proceeding.