There is a particular kind of legal irony reserved for the government that finds itself corrected not merely for overstepping the Constitution, but for overstepping its own legislation. The Supreme Court’s decision in City of Koronadal et al. v. Yellow Bus Lines, Inc. is precisely such a case. It is a ruling that is, at its core, about a city that enforced an ordinance it never quite enacted.
The setup
Yellow Bus Lines (Yellow Bus) operates a duly franchised public utility bus service with a private terminal along the national highway of Koronadal City, South Cotabato. When the City enacted Ordinance No. 9, Series of 2018, creating the City of Koronadal Integrated Transport Terminal Complex (CKITTC), it promptly set up checkpoints along the national highway and forced Yellow Bus’s vehicles to detour to the new facility, charging PHP 70.00 per entry.
Yellow Bus objected. It sued for injunction, arguing that it held an LTFRB-accredited private terminal, a franchised route along the national highway, and no legal obligation to abandon either. The cost, by the time the Complaint was filed, was over PHP 1,000,000.00 in terminal fees paid under protest. The buses also endured longer travel times, damaged vehicles from narrow diversion roads, and dispatch intervals that bloated from ten minutes to forty-five.
The Regional Trial Court (RTC), the Court of Appeals, and ultimately the Supreme Court sided with Yellow Bus. The Petition for Review on Certiorari was denied.
The two tests police power must pass
The Court’s analysis tracks the familiar two-pronged framework under the police power doctrine. For its valid exercise, the regulation must (i) serve a genuine public interest, and (ii) employ means that are reasonably necessary to achieve that interest and such must not be unduly oppressive.
On the first prong, the City had no difficulty. Addressing traffic congestion is quintessentially a proper subject for police power. The case of Luque v. Villegas established that much back in 1969. The Court readily acknowledged that Koronadal City, as the designated Administrative Seat of Region XII, had compelling reasons to build a centralized transport hub.
The second prong is where the case fell apart.
Following Lucena Grand Central Terminal, Inc. v. JAC Liner, Inc. (2005) and MMDA v. Viron Transportation, Inc. (2007), the Court restated the rule that local government units (LGUs) cannot compel public utility vehicles (PUVs) to abandon their private terminals in favor of a public one without a clear showing that this is the least restrictive means available.
Forcing all PUVs to converge on a single terminal and charging for the privilege is overbroad and unduly oppressive, especially when less intrusive alternatives remain unexamined, i.e., the strict traffic enforcement, clearing illegal parking & curbing colorum operators. The City alleged none of these had been tried and found wanting.
This is not a new doctrine, however. Lucena and MMDA had already drawn the line clearly. What is notable in Koronadal though is that the Court had to repeat the lesson a third time. One can only hope the LGU legislators across the archipelago are reading.
The Ordinance No. 9 Series of 2018 said no such thing
If the police power analysis were the only story here, Yellow Bus would simply be another entry in a settled doctrinal line. But the more instructive and frankly more distinctive aspect of the ruling is that Koronadal City’s checkpoint operations had no textual basis in the very ordinance being enforced.
Read carefully from the text the operative provisions of Ordinance No. 9 Series of 2018, which created the CKITTC.
Section 4 speaks of governing and regulating “the operation and maintenance of the City Transport Terminal” and lists PUVs among the relevant stakeholders.
Section 11 states that “all PUVs utilizing the services of the terminal facilities shall pay the corresponding fees.”
Section 19 penalizes loading and unloading in “non-specified areas.”
But the areas under Section 19 are undefined.
Not once does the Ordinance categorically require all PUVs to use the CKITTC. There is neither a prohibition against private terminals nor about compelling an operator who has its own accredited facility to abandon it.
The Court applied elementary statutory construction in Koronadal and that is utilization is not compulsion. Section 11 charges those who choose to use the terminal; it does not mandate that everyone must. The penalty for loading in “non-specified areas” does not, by implication, make the CKITTC the only permissible terminal in the city as those “non-specified areas” could just as well refer to prohibited zones within the CKITTC itself.
Simply said, the City’s checkpoints and rerouting operations went beyond what the Ordinance actually authorized. The executive overreached the legislature and in a local government context, both branches are effectively the same people.
This is a lesson in legislative precision that no amount of police power invocation can compensate for. An LGU wishing to consolidate terminal operations into a single public facility must actually say so in the ordinance.
Hinting at mandatory compliance through scope provisions and fee schedules, while relying on checkpoint enforcement to do the heavy lifting, is legally insufficient. The Court reads the text as written, not the policy as intended.
Two procedural points worth flagging
There are two nuggets of procedural lessons we can derive from the case (Well, for my personal consumption). First, the RTC rendered judgment on the pleadings and was affirmed. The City’sAnswer essentially admitted Yellow Bus’s material allegations while contesting only the ordinance’s validity and its application to the Respondent.
Based on the Rules, that is not a genuine factual dispute requiring trial; it is a legal argument resolvable on the pleadings alone. The distinction between a specific denial and a vague, evasive one is something every litigator should internalize early.
Second is the issue of notice to the Office of the Solicitor General (OSG) under Rule 63, Section 3. The Court instructively set this aside as Rule 63 applies to Petitions for Declaratory Relief and similar remedies only, not to Complaints for injunction.
Since Yellow Bus challenged not the ordinance’s validity but its implementation, the OSG notification requirement simply did not apply, said the Supreme Court.
Moreover, a Petition for Declaratory Relief would have been improper in the first place. The breach was already ongoing and concrete, not merely anticipated.
Both points reward careful reading of the Rules. Procedural missteps on the petitioner’s side (a pro forma Motion for reconsideration, service defects) also contributed to the difficulty of their appeal, reminding practitioners that the merits of a case are only as accessible as the procedure that frames them.
What LGUs & law students should take away
Koronadal does not prevent cities from building integrated transport terminals. It does not forbid terminal fees. It does not even forbid regulating PUVs within the city’s territory. What it forbids is compelling private terminal operators to abandon their property rights without (i) a clear statutory basis in an ordinance that actually mandates what is being enforced, and (ii) a demonstrated showing that less invasive alternatives have been explored and found insufficient.
There is something satisfying about losing a case on the grounds that your enforcement exceeded your own ordinance. It strips the controversy down to a foundational principle. That the rule of law binds the government, not just the governed. Every exercise of regulatory power must trace itself back to a law that authorizes it and not to a law that merely permits a facility to exist and charges those who choose to use it.
In Koronadal City’s case, the link between the Ordinance and the checkpoint was forged in the imagination of its implementors. The Supreme Court, as it has consistently done in this doctrinal line, refused to honor that kind of creative legislating by enforcement.
The road from a lawful objective to a lawful means is not automatic. It must be paved, carefully, in legislative text.
