LTO v.

City of Butuan

Facts:
The Regional Trial Court (Branch 2) of Butuan City held that the authority to register tricycles,
the grant of the corresponding franchise, the issuance of tricycle drivers' license, and the
collection of fees therefor had all been vested in the Local Government Units ("LGUs").
Accordingly, it decreed the issuance of a permanent writ of injunction against LTO, prohibiting
and enjoining LTO, as well as its employees and other persons acting in its behalf, from (a)
registering tricycles and (b) issuing licenses to drivers of tricycles.
The Court of Appeals, on appeal to it, sustained the trial court.
The adverse rulings of both the court a quo and the appellate court prompted the LTO to file the
instant petition for review on certiorari to annul and set aside the decision of the Court of
Appeals affirming the permanent injunctive writ order of the Regional Trial Court (Branch 2) of
Butuan City
Respondent City of Butuan asserts that one of the salient provisions introduced by the Local
Government Code is in the area of local taxation which allows LGUs to collect registration fees
or charges along with, in its view, the corresponding issuance of all kinds of licenses or permits
for the driving of tricycles
Relying on Sec 129 and 133 of the Local Government Code, the Sangguniang Panglungsod
("SP") of Butuan, on 16 August 1992, passed SP Ordinance No. 916-92 entitled "An Ordinance
Regulating the Operation of Tricycles-for-Hire, providing mechanism for the issuance of
Franchise, Registration and Permit, and imposing Penalties for Violations thereof and for other
Purposes." The ordinance provided for, among other things, the payment of franchise fees for
the grant of the franchise of tricycles-for-hire, fees for the registration of the vehicle, and fees for
the issuance of a permit for the driving thereof.
Petitioner LTO explains that one of the functions of the national government that, indeed, has
been transferred to local government units is the franchising authority over tricycles-for-hire of
the Land Transportation Franchising and Regulatory Board ("LTFRB") but not, the authority of
LTO to register all motor vehicles and to issue to qualified persons of licenses to drive such
vehicles
The trial court rendered a resolution issuing a permanent injunctive writ against the respondent
Land Transportation Office and the other respondents, prohibiting and enjoining them, their
employees, officers, attorney's or other persons acting in their behalf from forcing or compelling
Tricycles to be registered with, and drivers to secure their licenses from respondent LTO or
secure franchise from LTFRB and from collecting fees thereon
Petitioners timely moved for a reconsideration of the above resolution but it was to no avail
CA likewise dismissed the petition
Issue:
Whether under the present set up the power of the Land Registration Office ("LTO") to register,
tricycles in particular, as well as to issue licenses for the driving thereof, has likewise devolved
to local government units
Ruling:
The devolution of the functions of the DOTC, performed by the LTFRB, to the LGUs, as so aptly
observed by the Solicitor General, is aimed at curbing the alarming increase of accidents in
national highways involving tricycles. It has been the perception that local governments are in
good position to achieve the end desired by the law-making body because of their proximity to
the situation that can enable them to address that serious concern better than the national
government
Under Article 458 (a)[3-VI] of the Local Government Code, the power of LGUs to regulate the
operation of tricycles and to grant franchises for the operation thereof is still subject to the
guidelines prescribed by the DOTC. In compliance therewith, the Department of Transportation
and Communications ("DOTC") issued "Guidelines to Implement the Devolution of LTFRBs
Franchising Authority over Tricycles-For-Hire to Local Government units pursuant to the Local
Government Code."
The reliance made by respondents on the broad taxing power of local government units,
specifically under Section 133 of the Local Government Code, is tangential. Police power and
taxation, along with eminent domain, are inherent powers of sovereignty which the State might
share with local government units by delegation given under a constitutional or a statutory fiat.
All these inherent powers are for a public purpose and legislative in nature but the similarities
just about end there. The basic aim of police power is public good and welfare. Taxation, in its
case, focuses on the power of government to raise revenue in order to support its existence and
carry out its legitimate objectives. Although correlative to each other in many respects, the grant
of one does not necessarily carry with it the grant of the other. The two powers are, by tradition
and jurisprudence, separate and distinct powers, varying in their respective concepts, character,
scopes and limitations.
The power over tricycles granted under Section 458(8)(3)(VI) of the Local Government Code to
LGUs is the power to regulate their operation and to grant franchises for the operation thereof.
The exclusionary clause contained in the tax provisions of Section 133(1) of the Local
Government Code must not be held to have had the effect of withdrawing the express power of
LTO to cause the registration of all motor vehicles and the issuance of licenses for the driving
thereof. These functions of the LTO are essentially regulatory in nature, exercised pursuant to
the police power of the State, whose basic objectives are to achieve road safety by insuring the
road worthiness of these motor vehicles and the competence of drivers prescribed by R.A.
4136. Not insignificant is the rule that a statute must not be construed in isolation but must be
taken in harmony with the extant body of laws