province of cebu,

7/30/2019 Province of Cebu,

1/27

1

G.R. No. 72841 January 29, 1987

PROVINCE OF CEBU, petitioner,vs.HONORABLE INTERMEDIATE APPELLATE COURT and ATTY. PABLO P. GARCIA, respondents.

GUTIERREZ, JR., J .:

This is a petition to review the decision of the respondent Intermediate Appellate Court in A.C. G.R. CV No. 66502 entitled"Governor Rene Espina, et. at v. Mayor Sergio Osmea, Jr., et. al, Atty. Pablo P. Garcia v. Province of Cebu" 1 affirming withmodification the order of the Court of First Instance of Cebu, Branch VII, granting respondent Pablo P. Garcia's claim forcompensation for services rendered as counsel in behalf of the respondent Province of Cebu.

The facts of the case are not in dispute. On February 4, 1964, while then incumbent Governor Rene Espina was on officialbusiness in Manila, the Vice-Governor, Priscillano Almendras and three (3) members of the Provincial Board enactedResolution No. 188, donating to the City of Cebu 210 province. owned lots all located in the City of Cebu, with an aggregatearea of over 380 hectares, and authorizing the Vice-Governor to sign the deed of donation on behalf of the province. The deedof donation was immediately executed in behalf of the Province of Cebu by Vice-Governor Almendras and accepted in behalfof the City of Cebu by Mayor Sergio Osmea, Jr. The document of donation was prepared and notarized by a private lawyer.

The donation was later approved by the Office of the President through Executive Secretary Juan Cancio.

According to the questioned deed of donation the lots donated were to be sold by the City of Cebu to raise funds that would beused to finance its public improvement projects. The City of Cebu was given a period of one (1) year from August 15, 1964within which to dispose of the donated lots.

Upon his return from Manila, Governor Espina denounced as Legal and immoral the action of his colleagues in donatingpractically all the patrimonial property of the province of Cebu, considering that the latter's income was less than one. fourth(1/4) of that of the City of Cebu.

To prevent the sale or disposition of the lots, the officers and members of the Cebu Mayor's League (in behalf of theirrespective municipalities) along with some taxpayers, including Atty. Garcia, filed a case seeking to have the donationdeclared illegal, null and void. It was alleged in the complaint that the plaintiffs were filing it for and in behalf of the Province ofCebu in the nature of a derivative suit. Named defendants in the suit were the City of Cebu, City Mayor Sergio Osmea, Jr.

and the Cebu provincial officials responsible for the donation of the province-owned lots. The case was docketed as Civil CaseNo. R-8669 of the Court of First Instance of Cebu and assigned to Branch VI thereof.

Defendants City of Cebu and City Mayor Osmea, Jr. filed a motion to dismiss the case on the ground that plaintiffs did nothave the legal capacity to sue.

Subsequently, in an order, dated May, 1965, the court dismissed Case No. R-8669 on the ground that plaintiffs were not thereal parties in interest in the case. Plaintiffs filed a motion for reconsideration of the order of dismissal. This motion was deniedby the Court.

Meanwhile, Cebu City Mayor Sergio Osmea, Jr. announced that he would borrow funds from the Philippine National Bank(PNB) and would use the donated lots as collaterals. In July, 1965, the City of Cebu advertised the sale of an the lotsremaining unsold. Thereupon, Governor Espina, apprehensive that the lots would be irretrievably lost by the Province of Cebu,decided to go to court. He engaged the services of respondent Garcia in filing and prosecuting the case in his behalf and inbehalf of the Province of Cebu.

Garcia filed the complaint for the annulment of the deed of donation with an application for the issuance of a writ of preliminaryinjunction, which application was granted on the same day, August 6, 1965.

The complaint was later amended to implead Cebu City Mayor Carlos P. Cuizon as additional defendant in view of FiscalNumeriano Capangpangan's manifestation stating that on September 9, 1965, Sergio Osmea, Jr. filed his certificate ofCandidacy for senator, his position/office having been assumed by City Mayor Carlos P. Cuizon.

Sometime in 1972, the Provincial Board passed a resolution authorizing the Provincial Attorney, Alfredo G. Baguia, to enter hisappearance for the Province of Cebu and for the incumbent Governor, Vice-Governor and members of the Provincial Board inthis case.


2/27

2

On January 30, 1973, Alfredo G. Baguia, Provincial Attorney of the Province of Cebu, entered his appearance as additionalcounsel for the Province of Cebu and as counsel for Governor Osmundo Rama, Vice-Governor Salutario Fernandez andBoard Members Leonardo Enad, Guillermo Legazpi, and Rizalina Migallos.

On January 31, 1973, Atty. Baguia filed a complaint in intervention stating that intervenors Province of Cebu and ProvincialBoard of Cebu were joining or uniting with original plaintiff, former Governor of Cebu, Rene Espina. They adopted his causesof action, claims, and position stated in the original complaint filed before the court on August 6, 1965.

On June 25, 1974, a compromise agreement was reached between the province of Cebu and the city of Cebu. On July 15,1974, the court approved the compromise agreement and a decision was rendered on its basis.

On December 4, 1974, the court issued an order directing the issuance of a writ of execution to implement the decision datedJuly 15, 1974, to wit:

1. Ordering the City of Cebu to return and deliver to the Province of Cebu all the lots enumerated in thesecond paragraph hereof;

2. Ordering the Province of Cebu to pay the amount of One Million Five Hundred Thousand Pesos(P1,500,000.00) to the City of Cebu for and in consideration of the return by the latter to the former of theaforesaid lots;

3. Declaring the retention by the City of Cebu of the eleven (11) lots mentioned in paragraph No. 1 of thecompromise agreement, namely, Lot Nos. 1141, 1261, 1268, 1269, 1272, 1273, 917, 646-A, 646A-4-0 and10107-C;

4. Ordering the City of Cebu or the City Treasurer to turn over to the Province of Cebu the amount ofP187948.93 mentioned in Annex "A" of the defendants manifestation dated October 21, 1974;

5. Declaring the City of Cebu and an its present and past officers completely free from liabilities to thirdpersons in connection with the aforementioned lots, which liabilities if any, shall be assumed by the Provinceof Cebu;

6. Ordering the Register of Deeds of the City of Cebu to cancel the certification of titles in the name of theCity of Cebu covering the lots enumerated in the second paragraph of this order and to issue new ones inlieu thereof in the name of the Province of Cebu.

For services rendered in Civil Case no. 238-BC, CFI of Cebu, respondent Pablo P. Garcia filed through counsel a Notice ofAttorney's Lien, dated April 14, 1975, praying that his statement of claim of attorney's lien in said case be entered upon therecords thereof, pursuant to Section 37, Rule 138 of the Rules of Court.

To said notice, petitioner Province of Cebu filed through counsel, its opposition dated April 23, 1975, stating that the paymentof attorney's fees and reimbursement of incidental expenses are not allowed by law and settled jurisprudence to be paid by theProvince. A rejoinder to this opposition was filed by private respondent Garcia.

After hearing, the Court of First Instance of Cebu, then presided over by Judge Alfredo Marigomen, rendered judgment datedMay 30, 1979, in favor of private respondent and against petitioner Province of Cebu, declaring that the former is entitled torecover attorney's fees on the basis of quantum meruit and fixing the amount thereof at P30,000.00.

Both parties appealed from the decision to the Court of Appeals. In the case of private respondent, however, he appealed onlyfrom that portion of the decision which fixed his attorney's fees at P30,000.00 instead of at 30% of the value of the propertiesinvolved in the litigation as stated in his original claim

On October 18, 1985, the Intermediate Appellate Court rendered a decision affirming the findings and conclusions of the trialcourt that the private respondent is entitled to recover attorney's fees but fixing the amount of such fees at 5% of the marketvalue of the properties involved in the litigation as of the date of the filing of the claim in 1975. The dispositive portion of thedecision reads:

WHEREFORE, except for the aforementioned modification that the compensation for the services renderedby the Claimant Atty. Pablo P. Garcia is fixed at five percent (5%) of the total fair market value of the lots inquestion, the order appealed from is hereby affirmed in all other respects.


3/27

3

Both parties went to the Supreme Court with private respondent questioning the fixing of his attorney's fees at 5% instead of30% of the value of the properties in litigations as prayed for in his claims. However, the private respondent later withdrew hispetition in G.R. No. 72818 with the following explanation:

That after a long and serious reflection and reassessment of his position and intended course of action and,after seeking the views of his friends, petitioner has come to the definite conclusion that prosecuting hisappeal would only result in further delay in the final disposition of his claim (it has been pending for the last10 years 4 in the CFI and 6 in the Court of Appeals, later Intermediate Appellate Court) and that it would be

more prudent and practicable to accept in full the decision of the Intermediate Appellate Court.

Hence, only the petition of the Province of Cebu is pending before this Court.

The matter of representation of a municipality by a private attorney has been settled in Ramos v. Court of Appeals(108 SCRA728). Collaboration of a private law firm with the fiscal and the municipal attorney is not allowed. Section 1683 of the Revised

Administrative Code provides:

.Section 1683. Duty of fiscal to represent provinces and provincial subdivisions in litigation. The provinciafiscal shall represent the province and any municipality, or municipal district thereof in any court, except incases whereof original jurisdiction is vested in the Supreme Court or in cases where the municipality, ormunicipal district in question is a party adverse to the provincial government or to some other municipality,or municipal district in the same province. When the interests of a provincial government and of any politicaldivision thereof are opposed, the provincial fiscal shall act on behalf of the province.

When the provincial fiscal is disqualified to serve any municipality or other political subdivision of a province,a special attorney may be employed by its council

The above provision, complemented by Section 3 of the Local Autonomy Law, is clear in providing that only the provincialfiscal and the municipal attorney can represent a province or municipality in its lawsuits. The provision is mandatory. Themunicipality's authority to employ a private lawyer is expressly limited only to situations where the provincial fiscal isdisqualified to represent it (De Guia v. The Auditor General 44 SCRA 169; Municipality of Bocaue, et. al. v. Manotok, 93 Phil.173; Enriquez, Sr., v. Honorable Gimenez, 107 Phil. 932) as when he represents the province against a municipality.

The lawmaker, in requiring that the local government should be represented in its court cases by a government lawyer, like itsmunicipal attorney and the provincial fiscal intended that the local government should not be burdened with the expenses ofhiring a private lawyer. The lawmaker also assumed that the interests of the municipal corporation would be best protected if a

government lawyer handles its litigations. It is to be expected that the municipal attorney and the fiscal would be faithful anddedicated to the corporation's interests, and that, as civil service employees, they could be held accountable for anymisconduct or dereliction of duty (See Ramos v. Court of Appeals, supra).

However, every rule is not without an exception, Ibi quid generaliter conceditur; inest haec exceptio, si non aliquid sit contrajus fasque (Where anything is granted generally, this exception is implied; that nothing shall be contrary to law and right).Indeed, equity, as well as the exceptional situation facing us in the case at bar, require a departure from the established rule.

The petitioner anchors its opposition to private respondent's claim for compensation on the grounds that the employment ofclaimant as counsel for the Province of Cebu by then Governor Rene Espina was unauthorized and violative of Section 1681to 1683 in relation to Section 1679 of the Revised Administrative Code and that the claim for attorney's fees is beyond thepurview of Section 37, Rule 138 of the Rules of Court.

It is argued that Governor Espina was not authorized by the Provincial Board, through a board resolution, to employ Atty.

Pablo P. Garcia as counsel of the Province of Cebu.

Admittedly, this is so.

However, the circumstances obtaining in the case at bar are such that the rule cannot be applied. The Provincial Board wouldnever have given such authorization. The decision of the respondent court elucidates the matter thus:

... The provisions of Sections 1681 to 1683 of the Revised Administrative Code contemplate a normalsituation where the adverse party of the province is a third person as in the case ofEnriquez v. AuditorGeneral, 107 Phil 932. In the present case, the controversy involved an intramural fight between theProvincial Governor on one hand and the members of the Provincial Board on the other hand. Obviously it isunthinkable for the Provincial Board to adopt a resolution authorizing the Governor to employ Atty. Garcia toact as counsel for the Province of Cebu for the purpose of filing and prosecuting a case against the


4/27

4

members to the same Provincial Board According to the claimant Atty. Garcia, how can Governor Espina beexpected to secure authority from the Provincial Board to employ claimant as counsel for the Province ofCebu when the very officials from whom authority is to be sought are the same officials to be sued, It issimply impossible that the Vice-Governor and the members of the Provincial Board would pass a resolutionauthorizing Governor Espina to hire a lawyer to file a suit against themselves.

xxx xxx xxx

Under Section 2102 of the Revised Administrative Code it is the Provincial Board upon whom is vested theauthority "to direct, in its discretion, the bringing or defense of civil suits on behalf of the Provincial Governor

___." Considering that the members of the Provincial Board are the very ones involved in this case, theycannot be expected to directed the Provincial Fiscal the filing of the suit on behalf of the provincialgovernment against themselves. Moreover, as argued by the claimant, even if the Provincial Fiscal shouldside with the Governor in the bringing of this suit, the Provincial Board whose members are madedefendants in this case, can simply frustrate his efforts by directing him to dismiss the case or by refusing toappropriate funds for the expenses of the litigation.

... Consequently, there could have been no occasion for the exercise by the Provincial Fiscal of his powersand duties since the members of the Provincial Board would not have directed him to file a suit againstthem.

A situation obtains, therefore, where the Provincial Governor, in behalf of the Province of Cebu, seeks redress against the verymembers of the body, that is, the Provincial Board, which, under the law, is to provide it with legal assistance. A strictapplication of the provisions of the Revise Administrative Code on the matter would deprive the plaintiffs in the court below ofredress for a valid grievance. The provincial board authorization required by law to secure the services of special counselbecomes an impossibility. The decision of the respondent court is grounded in equity a correction applied to law, where onaccount of the general comprehensiveness of the law, particular exceptions not being provided against, something is wantingto render it perfect.

It is also argued that the employment of claimant was violative of sections 1681 to 1683 of the Revised Administrative Codebecause the Provincial Fiscal who was the only competent official to file this case was not disqualified to act for the Province oCebu.

Respondent counsel's representation of the Province of Cebu became necessary because of the Provincial Board's failure orrefusal to direct the bringing of the action to recover the properties it had donated to the City of Cebu. The Board moreeffectively disqualified the Provincial Fiscal from representing the Province of Cebu when it d irected the Fiscal to appear for itsmembers in Civil Case No. R-8669 filed by Atty. Garcia, and others, to defend its actuation in passing and approving ProvinciaBoard Resolution No. 186. The answer of the Provincial Fiscal on behalf of the Vice-Governor and the Provincial Boardmembers filed in Civil Case No. R-8669; (Exhibit "K") upholds the validity and legality of the donation. How then could theProvincial Fiscal represent the Province of Cebu in the suit to recover the properties in question? How could Governor Espinabe represented by the Provincial Fiscal or seek authorization from the Provincial Board to employ special counsel? Nemotenetur ad impossibile (The law obliges no one to perform an impossibility).lwphl@itNeither could a prosecutor be designatedby the Department of Justice. Malacaang had already approved the questioned donation

Anent the question of liability for respondent counsel's services, the general rule that an attorney cannot recover his fees fromone who did not employ him or authorize his employment, is subject to its own exception.

Until the contrary is clearly shown an attorney is presumed to be acting under authority of the litigant whom he purports torepresent (Azotes v. Blanco, 78 Phil. 739) His authority to appear for and represent petitioner in litigation, not having beenquestioned in the lower court, it will be presumed on appeal that counsel was properly authorized to file the complaint andappear for his client. (Republic v. Philippine Resources Development Corporation, 102 Phil. 960) Even where an attorney isemployed by an unauthorized person to represent a client, the latter will be bound where it has knowledge of the fact that it isbeing represented by an attorney in a particular litigation and takes no prompt measure to repudiate the assumed authority.Such acquiescence in the employment of an attorney as occurred in this case is tantamount to ratification (Tan Lua v. O' Brien55 Phil. 53). The act of the successor provincial board and provincial officials in allowing respondent Atty. Pablo P. Garcia tocontinue as counsel and in joining him in the suit led the counsel to believe his services were still necessary.

We apply a rule in the law of municipal corporations: "that a municipality may become obligated upon an implied contract topay the reasonable value of the benefits accepted or appropriated by it as to which it has the general power to contract. Thedoctrine of implied municipal liability has been said to apply to all cases where money or other property of a party is receivedunder such circumstances that the general law, independent of express contract implies an obligation upon the municipality todo justice with respect to the same." (38 Am Jur. Sec. 515, p. 193):


5/27

5

The obligation of a municipal corporation upon the doctrine of an implied contract does not connote anenforceable obligation. Some specific principle or situation of which equity takes cognizance must be thefoundation of the claim. The principle of liability rests upon the theory that the obligation implied by law topay does not originate in the unlawful contract, but arises from considerations outside it. The measure ofrecovery is the benefit received by the municipal corporation. The amount of the loan, the value of theproperty or services, or the compensation specified in the contract, is not the measure. If the price named inthe invalid contract is shown to be entirely fair and reasonable not only in view of the labor done, but also inreference to the benefits conferred, it may be taken as the true measure of recovery.

The petitioner can not set up the plea that the contract was ultra vires and still retain benefits thereunder. Having regarded thecontract as valid for purposes of reaping some benefits, the petitioner is estopped to question its validity for the purposes ofdenying answerability.

The trial court discussed the services of respondent Garcia as follows:

... Thus because of his effort in the filing of this case and in securing the issuance of the injunctionpreventing the City of Cebu and Sergio Osmea, Jr., from selling or disposing the lots to third parties, on thepart of the members of the Provincial Board from extending the date of the automatic reversion beyond

August 15, 1965, on the part of the Register of Deeds from effecting the transfer of title of any of thedonated lots to any vendee or transferee, the disposition of these lots by the City of Cebu to third partieswas frustrated and thus: saved these lots for their eventual recovery by the province of Cebu.

Actually it was Governor Espina who filed the case against Cebu City and Mayor Osmea. Garcia just happened to be thelawyer, Still Atty. Garcia is entitled to compensation. To deny private respondent compensation for his professional serviceswould amount to a deprivation of property without due process of law (Cristobal v. Employees' Compensation Commission,103 SCRA 329).

The petitioner alleges that although they do not deny Atty. Garcia's services for Governor Espina (who ceased to be suchGovernor of Cebu on September 13, 1969) and the original plaintiffs in the case, "it cannot be said with candor and fairnessthat were it not for his services the lots would have already been lost to the province forever, because the donation itself hewas trying to enjoin and annul in said case was subject to a reversion clause under which lots remaining undisposed of by theCity as of August 15, 1965 automatically reverted to the province and only about 17 lots were disposed of by August 15,1965." We quote respondent counsel's comment with approval:

xxx xxx xxx

While it is true that the donation was subject to a reversion clause, the same clause gave the ProvincialBoard the discretion to extend the period of reversion beyond August 15, 1965 (see paragraph 3 ofdonation).

With the known predisposition of the majority of the members of the Provincial Board, there would havebeen no impediment to the extension of the reversion date to beyond August 15, 1965. Once the date ofreversion is extended, the disposition of an the donated lots would be only a matter of course.

We have carefully reviewed the records of this case and conclude that 30% or even 5% of properties already worth(P120,000,000.00) in 1979 as compensation for the private respondent's services is simply out of the question. The casehandled by Atty. Garcia was decided on the basis of a compromise agreement where he no longer participated. The decisionwas rendered after pre-trial and without any hearing on the merits.

The factual findings and applicable law in this petition are accurately discussed in the exhaustive and well -written Order ofthen Trial Judge, now Court of Appeals Justice Alfredo Marigomen We agree with his determination of reasonable fees for theprivate lawyer on the basis of quantum meruit. The trial court fixed the compensation at P30,000.00 and orderedreimbursement of actual expenses in the amount of P289.43.

WHEREFORE, the questioned October 18, 1985 decision of the Intermediate Appellate Court is set aside. The Order of theTrial Court dated May 30, 1979 is REINSTATED.

SO ORDERED.


6/27

6

G.R. No. 110249 August 21, 1997

ALFREDO TANO, BALDOMERO TANO, DANILO TANO, ROMUALDO TANO, TEOCENES MIDELLO, ANGEL DE MESA,EULOGIO TREMOCHA, FELIPE ONGONION, JR., ANDRES LINIJAN, ROBERT LIM, VIRGINIA LIM, FELIMON DE MESA,GENEROSO ARAGON, TEODORICO ANDRE, ROMULO DEL ROSARIO, CHOLITO ANDRE, ERICK MONTANO, ANDRESOLIVA, VITTORIO SALVADOR, LEOPOLDO ARAGON, RAFAEL RIBA, ALEJANDRO LEONILA, JOSE DAMACINTO,RAMIRO MANAEG, RUBEN MARGATE, ROBERTO REYES, DANILO PANGARUTAN, NOE GOLPAN, ESTANISLAOROMERO, NICANOR DOMINGO, ROLDAN TABANG, ADRIANO TABANG, FREDDIE SACAMAY, MIGUEL TRIMOCHA,

PACENCIO LABABIT, PABLO H. OMPAD, CELESTINO A. ABANO, ALLAN ALMODAI, BILLY D. BARTOLAY, ALBINO D.LIQUE, MECHOR J. LAYSON, MELANIE AMANTE, CLARO E. YATOC, MERGELDO B. BALDEO, EDGAR M.ALMASETA, JOSELITO MANAEG, LIBERATO ANDRADA, JR., ROBERTO BERRY, RONALD VILLANUEVA, EDUARDOVALMORIA, WILFREDO MENDOZA, NAPOLEON BABANGGA, ROBERTO TADEPA, RUBEN ASINGUA, SILVERIOGABO, JERRY ROMERO, DAVID PANGGARUTAN, DANIEL PANGGARUTAN, ROMEO AGAWIN, FERNANDO EQUIZ,DITO LEQUIZ, RONILO MODERABLE, BENEDICTO TORRES, ROSITO A. VALDEZ, CRESENCIO A. SAYANG,NICOMEDES S. ACOSTA, ERENEO A. SEGARINO, JR., WILFREDO A. RAUTO, DIOSDADO A. ACOSTA, BONIFACIO G.SISMO, TACIO ALUBA, DANIEL B. BATERZAL, ELISEO YBAEZ, DIOSDADO E. HANCHIC, EDDIE ESCALICAS,ELEAZAR B. BATERZAL, DOMINADOR HALICHIC, ROOSEVELT RISMO-AN, ROBERT C. MERCADER, TIRSOARESGADO, DANIEL CHAVEZ, DANILO CHAVEZ, VICTOR VILLAROEL, ERNESTO C. YBAEZ, ARMANDO T.SANTILLAN, RUDY S. SANTILLAN, JODJEN ILUSTRISIMO, NESTOR SALANGRON, ALBERTO SALANGRON, ROGERL. ROXAS, FRANCISCO T. ANTICANO, PASTOR SALANGRON, BIENVENIDO SANTILLAN, GILBUENA LADDY, FIDELBENJAMIN, JOVELITO BELGANO, HONEY PARIOL, ANTONIO SALANGRON, NICASIO SALANGRON, & AIRLINESHIPPERS ASSOCIATION OF PALAWAN, petitioners,vs.

HON. GOV. SALVADOR P. SOCRATES, MEMBERS OF SANGGUNIANG PANLALAWIGAN OF PALAWAN, namely,VICE-GOVERNOR JOEL T. REYES, JOSE D. ZABALA, ROSALINO R. ACOSTA, JOSELITO A. CADLAON, ANDRES R.BAACO, NELSON P. PENEYRA, CIPRIANO C. BARROMA, CLARO E. ORDINARIO, ERNESTO A. LLACUNA, RODOLFOC. FLORDELIZA, GILBERT S. BAACO, WINSTON G. ARZAGA, NAPOLEON F. ORDONEZ and GIL P. ACOSTA, CITYMAYOR EDWARD HAGEDORN, MEMBERS OF SANGGUNIANG PANLUNGSOD NG PUERTO PRINCESA, ALLMEMBERS OF BANTAY DAGAT, MEMBERS OF PHILIPPINE NATIONAL POLICE OF PALAWAN, PROVINCIAL ANDCITY PROSECUTORS OF PALAWAN and PUERTO PRINCESA CITY, and ALL JUDGES OF PALAWAN, REGIONAL,MUNICIPAL AND METROPOLITAN,respondents.

DAVIDE, JR., J .:

Petitioners caption their petition as one for "Certiorari, Injunction With Preliminary and Mandatory Injunction, with Prayer forTemporary Restraining Order" and pray that this Court: (1) declare as unconstitutional: (a) Ordinance No. 15-92, dated 15December 1992, of the Sangguniang Panglungsod of Puerto Princesa; (b) Office Order No. 23, Series of 1993, dated 22January 1993, issued by Acting City Mayor Amado L. Lucero of Puerto Princesa City; and (c) Resolution No. 33, OrdinanceNo. 2, Series of 1993, dated 19 February 1993, of the Sangguniang Panlalawigan of Palawan; (2) enjoin the enforcementthereof; and (3) restrain respondents Provincial and City Prosecutors of Palawan and Puerto Princesa City and Judges of theRegional Trial Courts, Metropolitan Trial Courts1 and Municipal Circuit Trial Courts in Palawan from assuming jurisdiction oveand hearing cases concerning the violation of the Ordinances and of the Office Order.

More appropriately, the petition is, and shall be treated as, a special civil action forcertiorariand prohibition.

The following is petitioners' summary of the factual antecedents giving rise to the petition:

1. On December 15, 1992, the Sangguniang Panlungsod ng Puerto Princesa City enacted Ordinance No. 15-92

which took effect on January 1, 1993 entitled: "AN ORDINANCE BANNING THE SHIPMENT OF ALL LIVE FISHAND LOBSTER OUTSIDE PUERTO PRINCESA CITY FROM JANUARY 1, 1993 TO JANUARY 1, 1998 ANDPROVIDING EXEMPTIONS, PENALTIES AND FOR OTHER PURPOSES THEREOF", the full text of which reads asfollows:

Sec. 1. Title of the Ordinance. This Ordinance is entitled: AN ORDINANCE BANNING THESHIPMENT OF ALL LIVE FISH AND LOBSTER OUTSIDE PUERTO PRINCESA CITY FROMJANUARY 1, 1993 TO JANUARY 1, 1998 AND PROVIDING EXEMPTIONS, PENALTIES ANDFOR OTHER PURPOSES THEREOF.

Sec. 2. Purpose, Scope and Coverage. To effectively free our City Sea Waters from Cyanideand other Obnoxious substance[s], and shall cover all persons and/or entities operating within and


7/27

7

outside the City of Puerto Princesa who is are (sic) directly or indirectly in the business or shipmentof live fish and lobster outside the City.

Sec. 3. Definition of terms. For purpose of this Ordinance the following are hereby defined:

A. SEA BASS A kind of fish under the family ofCentropomidae, better known as APAHAP;

B. CATFISH A kind of fish under the family of Plotosidae,better known as HITO-HITO;

C. MUDFISH A kind of fish under the family ofOrphicaphalisae better known as DALAG;

D.ALL LIVE FISH All alive, breathing not necessarilymoving of all specie[s] use[d] for food and for aquariumpurposes.

E. LIVE LOBSTER Several relatively, large marinecrusteceans [sic] of the genus Homarus that are alive andbreathing not necessarily moving.

Sec. 4. It shall be unlawful [for] any person or any business enterprise or company to ship out fromPuerto Princesa City to any point of destination either via aircraft or seacraft of any live fish andlobster except SEA BASS, CATFISH, MUDFISH, AND MILKFISH FRIES.

Sec. 5. Penalty Clause. Any person/s and or business entity violating this Ordinance shall bepenalized with a fine of not more than P5,000.00 or imprisonment of not more than twelve (12)months, cancellation of their permit to do business in the City of Puerto Princesa or all of the hereinstated penalties, upon the discretion of the court.

Sec. 6. If the owner and/or operator of the establishment found violating the provisions of thisordinance is a corporation or a partnership, the penalty prescribed in Section 5 hereof shall beimposed upon its president and/or General Manager or Managing Partner and/or Manager, as thecase maybe [sic].

Sec. 7. Any existing ordinance or any provision of any ordinance inconsistent to [sic] this ordinanceis deemed repealed.

Sec. 8. This Ordinance shall take effect on January 1, 1993.

SO ORDAINED.

xxx xxx xxx

2. To implement said city ordinance, then Acting City Mayor Amado L. Lucero issued Office Order No. 23, Series of1993 dated January 22, 1993 which reads as follows:

In the interest of public service and for purposes of City Ordinance No. PD 426-14-74, otherwise known as "ANORDINANCE REQUIRING ANY PERSON ENGAGED OR INTENDING TO ENGAGE IN ANY BUSINESS, TRADE,OCCUPATION, CALLING OR PROFESSION OR HAVING IN HIS POSSESSION ANY OF THE ARTICLES FORWHICH A PERMIT IS REQUIRED TO BE HAD, TO OBTAIN FIRST A MAYOR'S PERMIT" and "City Ordinance No.15-92, AN ORDINANCE BANNING THE SHIPMENT OF ALL LIVE FISH AND LOBSTER OUTSIDE PUERTOPRINCESA CITY FROM JANUARY 1, 1993 TO JANUARY 1, 1998, you are hereby authorized and directed to checkor conduct necessary inspections on cargoes containing live fish and lobster being shipped out from the PuertoPrincesa Airport, Puerto Princesa Wharf or at any port within the jurisdiction of the City to any point of destinations[sic] either via aircraft or seacraft.

The purpose of the inspection is to ascertain whether the shipper possessed the required Mayor's Permit issued bythis Office and the shipment is covered by invoice or clearance issued by the local office of the Bureau of Fisheriesand Aquatic Resources and as to compliance with all other existing rules and regulations on the matter.


8/27

8

Any cargo containing live fish and lobster without the required documents as stated herein must be held for properdisposition.

In the pursuit of this Order, you are hereby authorized to coordinate with the PAL Manager, the PPA Manager, thelocal PNP Station and other offices concerned for the needed support and cooperation. Further, that the usualcourtesy and diplomacy must be observed at all times in the conduct of the inspection.

Please be guided accordingly.

xxx xxx xxx

3. On February 19, 1993, the Sangguniang Panlalawigan, Provincial Government of Palawan enacted Resolution No.33 entitled: "A RESOLUTION PROHIBITING THE CATCHING, GATHERING, POSSESSING, BUYING, SELLING

AND SHIPMENT OF LIVE MARINE CORAL DWELLING AQUATIC ORGANISMS, TO WIT:FAMILY: SCARIDAE(MAMENG), EPINE PHELUS FASCIATUS (SUNO). CROMILEPTES ALTIVELIS(PANTHEROR SENORITA), LOBSTER BELOW 200 GRAMS AND SPAWNING, TRIDACNA GIGAS(TAKLOBO), PINCTADAMARGARITEFERA (MOTHER PEARL, OYSTERS, GIANT CLAMS AND OTHER SPECIES), PENAEUSMONODON(TIGER PRAWN-BREEDER SIZE OR MOTHER), EPINEPHELUS SUILLUS (LOBA OR GREENGROUPER) AND FAMILY: BALISTIDAE(TROPICAL AQUARIUM FISHES) FOR A PERIOD FIVE (5) YEARS IN

AND COMING FROM PALAWAN WATERS", the full text of which reads as follows:

WHEREAS, scientific and factual researches [sic] and studies disclose that only five (5) percent ofthe corals of our province remain to be in excellent condition as [a] habitat of marine coral dwellingaquatic organisms;

WHEREAS, it cannot be gainsaid that the destruction and devastation of the corals of our provincewere principally due to illegal fishing activities like dynamite fishing, sodium cyanide fishing, use ofother obnoxious substances and other related activities;

WHEREAS, there is an imperative and urgent need to protect and preserve the existence of theremaining excellent corals and allow the devastated ones to reinvigorate and regeneratethemselves into vitality within the span of five (5) years;

WHEREAS, Sec. 468, Par. 1, Sub-Par. VI of the [sic] R.A. 7160 otherwise known as the LocalGovernment Code of 1991 empowers the Sangguniang Panlalawigan to protect the environment

and impose appropriate penalties [upon] acts which endanger the environment such as dynamitefishing and other forms of destructive fishing, among others.

NOW, THEREFORE, on motion by Kagawad Nelson P. Peneyra and upon unanimous decision ofall the members present;

Be it resolved as it is hereby resolved, to approve Resolution No. 33, Series of 1993 of theSangguniang Panlalawigan and to enact Ordinance No. 2 for the purpose, to wit:

ORDINANCE NO. 2Series of 1993

BE IT ORDAINED BY THE SANGGUNIANG PANLALAWIGAN IN SESSION ASSEMBLED:

Sec. 1. TITLE This Ordinance shall be known as an "Ordinance Prohibiting the catching,gathering, possessing, buying, selling and shipment of live marine coral dwelling aquaticorganisms, to wit: 1. Family: Scaridae (Mameng), 2. Epinephelus Fasciatus (Suno) 3. Cromileptesaltivelis (Panther or Senorita), lobster below 200 grams and spawning), 4. Tridacna Gigas(Taklobo), 5. Pinctada Margaretefera (Mother Pearl, Oysters, Giant Clams and other species), 6.Penaeus Monodon (Tiger Prawn-breeder size or mother), 7. Epinephelus Suillus (Loba or GreenGrouper) and 8. Family: Balistidae (T[r]opical Aquarium Fishes) for a period of five (5) years in andcoming from Palawan Waters.

Sec. II. PRELIMINARY CONSIDERATIONS


9/27

9

1. Sec. 2-A (Rep. Act 7160). It is hereby declared, the policy of the state that the territorial andpolitical subdivisions of the State shall enjoy genuine and meaningful local autonomy to enablethem to attain their fullest development as self-reliant communities and make them more effectivepartners in the attainment of national goals. Toward this end, the State shall provide for [a] moreresponsive and accountable local government structure instituted through a system ofdecentralization whereby local government units shall be given more powers, author ity,responsibilities and resources.

2. Sec. 5-A (R.A. 7160). Any provision on a power of [a] local Government Unit shall be liberallyinterpreted in its favor, and in case of doubt, any question thereon shall be resolved in favor ofdevolution of powers and of the lower government units. "Any fair and reasonable doubts as to theexistence of the power shall be interpreted in favor of the Local Government Unit concerned."

3. Sec. 5-C (R.A. 7160). The general welfare provisions in this Code shall be liberally interpreted togive more powers to local government units in accelerating economic development and upgradingthe quality of life for the people in the community.

4. Sec. 16 (R.A. 7160). General Welfare. Every local government unit shall exercise the powersexpressly granted, those necessarily implied therefrom, as well as powers necessary, appropriate,or incidental for its efficient and effective governance; and those which are essential to thepromotion of the general welfare.

Sec. III. DECLARATION OF POLICY. It is hereby declared to be the policy of the Province ofPalawan to protect and conserve the marine resources of Palawan not only for the greatest good ofthe majority of the present generation but with [the] proper perspective and consideration of [sic]their prosperity, and to attain this end, the Sangguniang Panlalawigan henceforth declares that is(sic) shall be unlawful for any person or any business entity to engage in catching, gathering,possessing, buying, selling and shipment of live marine coral dwelling aquatic organisms asenumerated in Section 1 hereof in and coming out of Palawan Waters for a period of five (5) years;

Sec. IV. PENALTY CLAUSE. Any person and/or business entity violating this Ordinance shall bepenalized with a fine of not more than Five Thousand Pesos (P5,000.00), Philippine Currency,and/or imprisonment of six (6) months to twelve (12) months and confiscation and forfeiture ofparaphernalias [sic] and equipment in favor of the government at the discretion of the Court;

Sec. V. SEPARABILITY CLAUSE. If for any reason, a Section or provision of this Ordinanceshall be held as unconditional [sic] or invalid, it shall not affect the other provisions hereof.

Sec. VI. REPEALING CLAUSE. Any existing Ordinance or a provision of any ordinanceinconsistent herewith is deemed modified, amended or repealed.

Sec. VII. EFFECTIVITY This Ordinance shall take effect ten (10) days after its publication.

SO ORDAINED.

xxx xxx xxx

4. The respondents implemented the said ordinances, Annexes "A" and "C" hereof thereby depriving all thefishermen of the whole province of Palawan and the City of Puerto Princesa of their only means of livelihood and thepetitioners Airline Shippers Association of Palawan and other marine merchants from performing their lawfuloccupation and trade;

5. Petitioners Alfredo Tano, Baldomero Tano, Teocenes Midello, Angel de Mesa, Eulogio Tremocha, and FelipeOngonion, Jr. were even charged criminally under criminal case no. 93-05-C in the 1st Municipal Circuit Trial Court ofCuyo-Agutaya-Magsaysay, an original carbon copy of the criminal complaint dated April 12, 1993 is hereto attachedas Annex "D"; while xerox copies are attached as Annex "D" to the copies of the petition;

6. Petitioners Robert Lim and Virginia Lim, on the other hand, were charged by the respondent PNP with therespondent City Prosecutor of Puerto Princess City, a xerox copy of the complaint is hereto attached as Annex "E";

Without seeking redress from the concerned local government units, prosecutor's office and courts, petitioners directly invokedour original jurisdiction by filing this petition on 4 June 1993. In sum, petitioners contend that:


10/27

10

First, the Ordinances deprived them of due process of law, their livelihood, and unduly restricted them from the practice of theitrade, in violation of Section 2, Article XII and Sections 2 and 7 of Article XIII of the 1987 Constitution.

Second, Office Order No. 23 contained no regulation nor condition under which the Mayor's permit could be granted or deniedin other words, the Mayor had the absolute authority to determine whether or not to issue the permit.

Third, as Ordinance No. 2 of the Province of Palawan "altogether prohibited the catching, gathering, possession, buying,

selling and shipping of live marine coral dwelling organisms, without any distinction whether it was caught or gathered throughlawful fishing method," the Ordinance took away the right of petitioners-fishermen to earn their livelihood in lawful ways; andinsofar as petitioners-members of Airline Shippers Association are concerned, they were unduly prevented from pursuing theirvocation and entering "into contracts which are proper, necessary, and essential to carry out their business endeavors to asuccessful conclusion."

Finally, as Ordinance No. 2 of the Sangguniang Panlalawigan is null and void, the criminal cases based thereon againstpetitioners Tano and the others have to be dismissed.

In the Resolution of 15 June 1993 we required respondents to comment on the petition, and furnished the Office of theSolicitor General with a copy thereof.

In their comment filed on 13 August 1993, public respondents Governor Socrates and Members of the SangguniangPanlalawigan of Palawan defended the validity of Ordinance No. 2, Series of 1993, as a valid exercise of the Provincial

Government's power under the general welfare clause (Section 16 of the Local Government Code of 1991 [hereafter, LGC]),and its specific power to protect the environment and impose appropriate penalties for acts which endanger the environment,such as dynamite fishing and other forms of destructive fishing under Section 447 (a) (1) (vi), Section 458 (a) (1) (vi), andSection 468 (a) (1) (vi), of the LGC. They claimed that in the exercise of such powers, the Province of Palawan had "the rightand responsibility . . . to insure that the remaining coral reefs, where fish dwells [sic], within its territory remain healthy for thefuture generation." The Ordinance, they further asserted, covered only live marine coral dwelling aquatic organismswhich wereenumerated in the ordinance and excluded other kinds of live marine aquatic organisms not dwelling in coral reefs; besides theprohibition was for only five (5) years to protect and preserve the pristine coral and allow those damaged to regenerate.

Aforementioned respondents likewise maintained that there was no violation of the due process and equal protection clausesof the Constitution. As to the former, public hearings were conducted before the enactment of the Ordinance which,undoubtedly, had a lawful purpose and employed reasonable means; while as to the latter, a substantial distinction existed"between a fisherman who catches live fish with the intention of selling it live, and a fisherman who catches live fish with nointention at all of selling it live," i.e., "the former uses sodium cyanide while the latter does not." Further, the Ordinance appliedequally to all those belonging to one class.

On 25 October 1993 petitioners filed an Urgent Plea for the Immediate Issuance of a Temporary Restraining Order, claimingthat despite the pendency of this case, Branch 50 of the Regional Trial Court of Palawan was bent on proceeding with CriminaCase No. 11223 against petitioners Danilo Tano, Alfredo Tano, Eulogio Tremocha, Romualdo Tano, Baldomero Tano, AndresLinijan and Angel de Mesa for violation of Ordinance No. 2 of the Sangguniang Panlalawigan of Palawan. Acting on said plea,we issued on 11 November 1993 a temporary restraining order directing Judge Angel Miclat of said court to cease and desistfrom proceeding with the arraignment and pre-trial of Criminal Case No. 11223.

On 12 July 1994, we excused the Office of the Solicitor General from filing a comment, considering that as claimed by saidoffice in its Manifestation of 28 June 1994, respondents were already represented by counsel.

The rest of the respondents did not file any comment on the petition.

In the resolution of 15 September 1994, we resolved to consider the comment on the petition as the Answer, gave due courseto the petition and required the parties to submit their respective memoranda.2

On 22 April 1997 we ordered impleaded as party respondents the Department of Agriculture and the Bureau of Fisheries andAquatic Resources and required the Office of the Solicitor General to comment on their behalf. But in light of the latter's motionof 9 July 1997 for an extension of time to file the comment which would only result in further delay, we dispensed with saidcomment.

After due deliberation on the pleadings filed, we resolved to dismiss this petition for want of merit, and on 22 July 1997,assigned it to the ponente to write the opinion of the Court.

I


11/27

11

There are actually two sets of petitioners in this case. The first is composed of Alfredo Tano, Baldomero Tano, Danilo Tano,Romualdo Tano, Teocenes Midello, Angel de Mesa, Eulogio Tremocha, Felipe Ongonion, Jr., Andres Linijan, and Felimon deMesa, who were criminally charged with violating Sangguniang Panlalawigan Resolution No. 33 and Ordinance No. 2, Seriesof 1993, of the Province of Palawan, in Criminal Case No. 93-05-C of the 1st Municipal Circuit Trial Court (MCTC) ofPalawan;3 and Robert Lim and Virginia Lim who were charged with violating City Ordinance No. 15-92 of Puerto PrincesaCity and Ordinance No. 2, Series of 1993, of the Province of Palawan before the Office of the City Prosecutor of PuertoPrincesa.4 All of them, with the exception of Teocenes Midello, Felipe Ongonion, Jr., Felimon de Mesa, Robert Lim andVirginia Lim, are likewise the accused in Criminal Case No. 11223 for the violation of Ordinance No. 2 of the Sangguniang

Panlalawigan of Palawan, pending before Branch 50 of the Regional Trial Court of Palawan.5

The second set of petitioners is composed of the rest of the petitioners numbering seventy-seven (77), all of whom, except theAirline Shippers Association of Palawan an alleged private association of several marine merchants are natural personswho claim to be fishermen.

The primary interest of the first set of petitioners is, of course, to prevent the prosecution, trial and determination of the criminacases until the constitutionality or legality of the Ordinances they allegedly violated shall have been resolved. The second setof petitioners merely claim that being fishermen or marine merchants, they would be adversely affected by the ordinance's.

As to the first set of petitioners, this special civil forcertiorarimust fail on the ground of prematurity amounting to a lack ofcause of action. There is no showing that said petitioners, as the accused in the criminal cases, have filed motions to quashthe informations therein and that the same were denied. The ground available for such motions is that the facts chargedtherein do not constitute an offense because the ordinances in question are unconstitutional.6 It cannot then be said that the

lower courts acted without or in excess of jurisdiction or with grave abuse of discretion to justify recourse to the extraordinaryremedy ofcertiorarior prohibition. It must further be stressed that even if petitioners did file motions to quash, the denialthereof would not forthwith give rise to a cause of action under Rule 65 of the Rules of Court. The general rule is that where amotion to quash is denied, the remedy therefrom is not certiorari, but for the party aggrieved thereby to go to trial withoutprejudice to reiterating special defenses involved in said motion, and if, after trial on the merits an adverse decision isrendered, to appeal therefrom in the manner authorized by law.7 And, even where in an exceptional circumstance such deniamay be the subject of a special civil action forcertiorari, a motion for reconsideration must have to be filed to allow the courtconcerned an opportunity to correct its errors, unless such motion may be dispensed with because of existing exceptionalcircumstances.8 Finally, even if a motion for reconsideration has been filed and denied, the remedy under Rule 65 is stillunavailable absent any showing of the grounds provided for in Section 1 thereof.9 For obvious reasons, the petition at bardoes not, and could not have, alleged any of such grounds.

As to the second set of petitioners, the instant petition is obviously one for DECLARATORY RELIEF, i.e., for a declaration thatthe Ordinances in question are a "nullity . . . for being unconstitutional."

10As such, their petition must likewise fail, as this

Court is not possessed of original jurisdiction over petitions for declaratory relief even if only questions of law are involved,

11

itbeing settled that the Court merely exercises appellate jurisdiction over such petitions.12

II

Even granting arguendo that the first set of petitioners have a cause of action ripe for the extraordinary writ ofcertiorari, there ishere a clear disregard of the hierarchy of courts, and no special and important reason or exceptional and compellingcircumstance has been adduced why direct recourse to us should be allowed. While we have concurrent jurisdiction withRegional Trial courts and with the Court of Appeals to issue writs ofcertiorari, prohibition, mandamus, quo warranto, habeascorpus and injunction, such concurrence gives petitioners no unrestricted freedom of choice of court forum, so we heldin People v. Cuaresma.

13

This concurrence of jurisdiction is not . . . to be taken as according to parties seeking any of the writs an absoluteunrestrained freedom of choice of the court to which application therefor will be directed. There is after all hierarchy of

courts. That hierarchy is determinative of the venue of appeals, and should also serve as a general determinant ofthe appropriate forum for petitions for the extraordinary writs. A becoming regard for that judicial hierarchy mostcertainly indicates that petitions for the issuance of extraordinary writs against first level ("inferior") courts should befiled with the Regional Trial Court, and those against the latter, with the Court of Appeals. A direct invocation of theSupreme Court's original jurisdiction to issue these writs should be allowed only when there are special and importantreasons therefor, clearly and specifically set out in the petition. This is established policy. It is a policy necessary toprevent inordinate demands upon the Court's time and attention which are better devoted to those matters within itsexclusive jurisdiction, and to prevent further over-crowding of the Court's docket. . . .

The Court feels the need to reaffirm that policy at this time, and to enjoin strict adherence thereto in the light of what itperceives to be a growing tendency on the part of litigants and lawyers to have their applications for the so-calledextraordinary writs, and sometimes even their appeals, passed upon and adjudicated directly and immediately by thehighest tribunal of the land. . . .


12/27

12

In Santiago v. Vasquez,14

this Court forcefully expressed that the propensity of litigants and lawyers to disregard the hierarchyof courts must be put to a halt, not only because of the imposition upon the precious time of this Court, but also because of theinevitable and resultant delay, intended or otherwise, in the adjudication of the case which often has to be remanded orreferred to the lower court, the proper forum under the rules of procedure, or as better equipped to resolve the issues sincethis Court is not a trier of facts. We reiterated "the judicial policy that this Court will not entertain direct resort to it unless theredress desired cannot be obtained in the appropriate courts or where exceptional and compelling circumstances justifyavailment of a remedy within and calling for the exercise of [its] primary jurisdiction."

III

Notwithstanding the foregoing procedural obstacles against the first set of petitioners, we opt to resolve this case on its meritsconsidering that the lifetime of the challenged Ordinances is about to end. Ordinance No. 15-92 of the City of Puerto Princesais effective only up to 1 January 1998, while Ordinance No. 2 of the Province of Palawan, enacted on 19 February 1993, iseffective for only five (5) years. Besides, these Ordinances were undoubtedly enacted in the exercise of powers under the newLGC relative to the protection and preservation of the environment and are thus novel and of paramount importance. Nofurther delay then may be allowed in the resolution of the issues raised.

It is of course settled that laws (including ordinances enacted by local government units) enjoy the presumption ofconstitutionality.

15To overthrow this presumption, there must be a clear and unequivocal breach of the Constitution, notmerely a doubtful or argumentative contradiction. In short, the conflict with the Constitution must be shown beyond reasonabledoubt.

16Where doubt exists, even if well-founded, there can be no finding of unconstitutionality. To doubt is to sustain.

17

After a scrutiny of the challenged Ordinances and the provisions of the Constitution petitioners claim to have been violated, wefind petitioners' contentions baseless and so hold that the former do not suffer from any infirmity, both under the Constitutionand applicable laws.

Petitioners specifically point to Section 2, Article XII and Sections 2 and 7, Article XIII of the Constitution as having beentransgressed by the Ordinances.

The pertinent portion of Section 2 of Article XII reads:

Sec. 2. . . .

The State shall protect the nation's marine wealth in its archipelagic waters, territorial sea, and exclusive economiczone, and reserve its use and enjoyment exclusively to Filipino citizens.

The Congress may, by law, allow small-scale utilization of natural resources by Filipino citizens, as well ascooperative fish farming, with priority to subsistence fishermen and fishworkers in rivers, lakes, bays, and lagoons.

Sections 2 and 7 of Article XIII provide:

Sec. 2. The promotion of social justice shall include the commitment to create economic opportunities basedon freedom of initiative and self-reliance.

xxx xxx xxx

Sec. 7. The State shall protect the rights of subsistence fishermen, especially of local communities, to thepreferential use of the communal marine and fishing resources, both inland and offshore. It shall provide

support to such fishermen through appropriate technology and research, adequate financial, production, andmarketing assistance, and other services. The State shall also protect, develop, and conserve suchresources. The protection shall extend to offshore fishing grounds of subsistence fishermen against foreignintrusion. Fishworkers shall receive a just share from their labor in the utilization of marine and fishingresources.

There is absolutely no showing that any of the petitioners qualifies as a subsistence or marginal fisherman. In theirpetition, petitioner Airline Shippers Association of Palawan is self-described as "a private association composed ofMarine Merchants;" petitioners Robert Lim and Virginia Lim, as "merchants;" while the rest of the petitioners claim tobe "fishermen," without any qualification, however, as to their status.

Since the Constitution does not specifically provide a definition of the terms "subsistence" or "marginal"fishermen,

18they should be construed in their general and ordinary sense. A marginal fisherman is an individual


13/27

13

engaged in fishing whose margin of return or reward in his harvest of fish as measured by existing price levels isbarely sufficient to yield a profit or cover the cost of gathering the fish,

19while a subsistence fisherman is one whose

catch yields but the irreducible minimum for his livelihood.20

Section 131(p) of the LGC (R.A. No. 7160) defines a

marginal farmer or fisherman as "an individual engaged in subsistence farming or fishing which shall be limited to thesale, barter or exchange of agricultural or marine products produced by himself and his immediate family." It bearsrepeating that nothing in the record supports a finding that any petitioner falls within these definitions.

Besides, Section 2 of Article XII aims primarily not to bestow any right to subsistence fishermen, but to lay stress on

the duty of the State to protect the nation's marine wealth. What the provision merely recognizes is that the State mayallow, by law, cooperative fish farming, with priority to subsistence fishermen and fishworkers in rivers, lakes, baysand lagoons. Our survey of the statute books reveals that the only provision of law which speaks of a preferentialright of marginal fishermen is Section 149 of the LGC, which pertinently provides:

Sec. 149. Fishery Rentals, Fees and Charges. . . .

(b) The sangguniang bayan may:

(1) Grant fishery privileges to erect fish corrals, oyster, mussels or otheraquatic beds or bangus fry areas, within a definite zone of the municipalwaters, as determined by it: Provided, however, That duly registeredorganizations and cooperatives of marginal fishermen shall have thepreferential right to such fishery privileges . . . .

In a Joint Administrative Order No. 3 dated 25 April 1996, the Secretary of the Department of Agriculture and theSecretary of the Department of Interior and Local Government prescribed guidelines concerning the preferentialtreatment of small fisherfolk relative to the fishery right mentioned in Section 149. This case, however, does notinvolve such fishery right.

Anent Section 7 of Article XIII, it speaks not only of the use of communal marine and fishing resources, but of theirprotection, development and conservation. As hereafter shown, the ordinances in question are meant precisely toprotect and conserve our marine resources to the end that their enjoyment may be guaranteed not only for thepresent generation, but also for the generations to come.

The so-called "preferential right" of subsistence or marginal fishermen to the use of marine resources is not at allabsolute. In accordance with the Regalian Doctrine, marine resources belong to the State, and, pursuant to the first

paragraph of Section 2, Article XII of the Constitution, their "exploration, development and utilization . . . shall beunder the full control and supervision of the State." Moreover, their mandated protection, development andconservation as necessarily recognized by the framers of the Constitution, imply certain restrictions on whatever rightof enjoyment there may be in favor of anyone. Thus, as to the curtailment of the preferential treatment of marginalfishermen, the following exchange between Commissioner Francisco Rodrigo and Commissioner Jose F.S. BengzonJr., took place at the plenary session of the Constitutional Commission:

MR. RODRIGO:

Let us discuss the implementation of this because I would not raise the hopes of ourpeople, and afterwards fail in the implementation. How will this be implemented? Will therebe a licensing or giving of permits so that government officials will know that one is really amarginal fisherman? Or if policeman say that a person is not a marginal fisherman, he canshow his permit, to prove that indeed he is one.

MR. BENGZON:

Certainly, there will be some mode of licensing insofar as this is concerned and thisparticular question could be tackled when we discuss the Article on Local Governments whether we will leave to the local governments or to Congress on how these things will beimplemented. But certainly, I think our congressmen and our local officials will not bebereft of ideas on how to implement this mandate.

xxx xxx xxx

MR. RODRIGO:


14/27

14

So, once one is licensed as a marginal fisherman, he can go anywhere in the Philippinesand fish in any fishing grounds.

MR. BENGZON:

Subject to whatever rules and regulations and local laws that may be passed, may beexisting or will be passed.

21(emphasis supplied)

What must likewise be borne in mind is the state policy enshrined in the Constitution regarding the duty of the Stateto protect and advance the right of the people to a balanced and healthful ecology in accord with the rhythm andharmony of nature.

22On this score, in Oposa v. Factoran, 23this Court declared:

While the right to a balanced and healthful ecology is to be found under the Declaration of Principles theState Policies and not under the Bill of Rights, it does not follow that it is less important than any of the civiland political rights enumerated in the latter. Such a right belongs to a different category of rights altogetherfor it concerns nothing less than self-preservation and self-perpetuation aptly and fittingly stressed by thepetitioners the advancement of which may even be said to predate all governments and constitutions. Asa matter of fact, these basic rights need not even be written in the Constitution for they are assumed to existfrom the inception of humankind. If they are now explicitly mentioned in the fundamental charter, it isbecause of the well-founded fear of its framers that unless the rights to a balanced and healthful ecologyand to health are mandated as state policies by the Constitution itself, thereby highlighting their continuingimportance and imposing upon the state a solemn obligation to preserve the first and protect and advancethe second, the day would not be too far when all else would be lost not only for the present generation, butalso for those to come generations which stand to inherit nothing but parched earth incapable ofsustaining life.

The right to a balanced and healthful ecology carries with it a correlative duty to refrain from impairing theenvironment. . . .

The LGC provisions invoked by private respondents merely seek to give flesh and blood to the right of the people to abalanced and healthful ecology. In fact, the General Welfare Clause, expressly mentions this right:

Sec. 16. General Welfare. Every local government unit shall exercise the powers expressly granted,those necessarily implied therefrom, as well as powers necessary, appropriate, or incidental for its efficientand effective governance, and those which are essential to the promotion of the general welfare. Within their

respective territorial jurisdictions, local government units shall ensure and support, among other things, thepreservation and enrichment of culture, promote health and safety, enhance the right of the people to abalanced ecology, encourage and support the development of appropriate and self-reliant scientific andtechnological capabilities, improve public morals, enhance economic prosperity and social justice, promotefull employment among their residents, maintain peace and order, and preserve the comfort andconvenience of their inhabitants. (emphasis supplied).

Moreover, Section 5(c) of the LGC explicitly mandates that the general welfare provisions of the LGC "shall beliberally interpreted to give more powers to the local government units in accelerating economic development andupgrading the quality of life for the people of the community."

The LGC vests municipalities with the power to grant fishery privileges in municipal waters and impose rentals, feesor charges therefor; to penalize, by appropriate ordinances, the use of explosives, noxious or poisonous substances,electricity, muro-ami, and other deleterious methods of fishing; and to prosecute any violation of the provisions of

applicable fishery laws.

24

Further, the sangguniang bayan, the sangguniang panlungsod and the sangguniangpanlalawigan are directed to enact ordinances for the general welfare of the municipality and its inhabitants, whichshall include, inter alia, ordinances that "[p]rotect the environment and impose appropriate penalties for acts whichendanger the environment such as dynamite fishing and other forms of destructive fishing . . . and such otheractivities which result in pollution, acceleration of eutrophication of rivers and lakes, or of ecologicalimbalance."

25

Finally, the centerpiece of LGC is the system of decentralization26

as expressly mandated by theConstitution.

27Indispensable to decentralization is devolution and the LGC expressly provides that "[a]ny provision

on a power of a local government unit shall be liberally interpreted in its favor, and in case of doubt, any questionthereon shall be resolved in favor of devolution of powers and of the lower local government unit. Any fair andreasonable doubt as to the existence of the power shall be interpreted in favor of the local government unitconcerned."

28Devolution refers to the act by which the National Government confers power and authority upon the

various local government units to perform specific functions and responsibilities.29


15/27

15

One of the devolved powers enumerated in the section of the LGC on devolution is the enforcement of fishery laws inmunicipal waters including the conservation of mangroves.

30This necessarily includes the enactment of ordinances

to effectively carry out such fishery laws within the municipal waters.

The term "municipal waters," in turn, includes not only streams, lakes, and tidal waters within the municipality, notbeing the subject of private ownership and not comprised within the national parks, public forest, timber lands, forestreserves, or fishery reserves, but also marine waters included between two lines drawn perpendicularly to the generacoastline from points where the boundary lines of the municipality or city touch the sea at low tide and a third line

parallel with the general coastline and fifteen kilometers fromit.

31Under P.D. No. 704, the marine waters included in municipal waters is limited to three nautical miles from the

general coastline using the above perpendicular lines and a third parallel line.

These "fishery laws" which local government units may enforce under Section 17(b)(2)(i) in municipal waters include:(1) P.D. No. 704; (2) P.D. No. 1015 which, inter alia, authorizes the establishment of a "closed season" in anyPhilippine water if necessary for conservation or ecological purposes; (3) P.D. No. 1219 which provides for theexploration, exploitation, utilization and conservation of coral resources; (4) R.A. No. 5474, as amended by B.P. Blg.58, which makes it unlawful for any person, association or corporation to catch or cause to be caught, sell, offer tosell, purchase, or have in possession any of the fish specie calledgobiidae or "ipon" during closed season; and (5)R.A. No. 6451 which prohibits and punishes electrofishing, as well as various issuances of the BFAR.

To those specifically devolved insofar as the control and regulation of fishing in municipal waters and the protection ofits marine environment are concerned, must be added the following:

1. Issuance of permits to construct fish cages within municipal waters;

2. Issuance of permits to gather aquarium fishes within municipal waters;

3. Issuance of permits to gather kapis shells within municipal waters;

4. Issuance of permits to gather/culture shelled mollusks within municipal waters;

5. Issuance of licenses to establish seaweed farms within municipal waters;

6. Issuance of licenses to establish culture pearls within municipal waters;

7. Issuance of auxiliary invoice to transport fish and fishery products; and

8. Establishment of "closed season" in municipal waters.

These functions are covered in the Memorandum of Agreement of 5 April 1994 between the Department ofAgriculture and the Department of Interior and Local Government.

In light then of the principles of decentralization and devolution enshrined in the LGC and the powers granted thereinto local government units under Section 16 (the General Welfare Clause), and under Sections 149, 447(a) (1) (vi),458 (a) (1) (vi) and 468 (a) (1) (vi), which unquestionably involve the exercise of police power, the validity of thequestioned Ordinances cannot be doubted.

Parenthetically, we wish to add that these Ordinances find full support under R.A. No. 7611, otherwise known as theStrategic Environmental Plan (SEP) for Palawan Act, approved on 19 June 1992. This statute adopts a"comprehensive framework for the sustainable development of Palawan compatible with protecting and enhancingthe natural resources and endangered environment of the province," which "shall serve to guide the local governmentof Palawan and the government agencies concerned in the formulation and implementation of plans, programs andprojects affecting said province."

32

At this time then, it would be appropriate to determine the relation between the assailed Ordinances and the aforesaidpowers of the Sangguniang Panlungsod of the City of Puerto Princesa and the Sangguniang Panlalawigan of theProvince of Palawan to protect the environment. To begin, we ascertain the purpose of the Ordinances as set forth inthe statement of purposes or declaration of policies quoted earlier.

It is clear to the Court that both Ordinances have two principal objectives or purposes: (1) to establish a "closedseason" for the species of fish or aquatic animals covered therein for a period of five years; and (2) to protect the


16/27

16

coral in the marine waters of the City of Puerto Princesa and the Province of Palawan from further destruction due toillegal fishing activities.

The accomplishment of the first objective is well within the devolved power to enforce fishery laws in municipalwaters, such as P.D. No. 1015, which allows the establishment of "closed seasons." The devolution of such powerhas been expressly confirmed in the Memorandum of Agreement of 5 April 1994 between the Department of

Agriculture and the Department of Interior and Local Government.

The realization of the second objective clearly falls within both the general welfare clause of the LGC and the expressmandate thereunder to cities and provinces to protect the environment and impose appropriate penalties for actswhich endanger the environment.

33

The destruction of coral reefs results in serious, if not irreparable, ecological imbalance, for coral reefs are amongnature's life-support systems.

34They collect, retain and recycle nutrients for adjacent nearshore areas such as

mangroves, seagrass beds, and reef flats; provide food for marine plants and animals; and serve as a protectiveshelter for aquatic organisms.

35It is said that "[e]cologically, the reefs are to the oceans what forests are to

continents: they are shelter and breeding grounds for fish and plant species that will disappear without them."36

The prohibition against catching live fish stems, in part, from the modern phenomenon of live-fish trade which entailsthe catching of so-called exotic species of tropical fish, not only for aquarium use in the West, but also for "the marketfor live banquet fish [which] is virtually insatiable in ever more affluent Asia.

37These exotic species are coral-dwellers,

and fishermen catch them by "diving in shallow water with corraline habitats and squirting sodium cyanide poison atpassing fish directly or onto coral crevices; once affected the fish are immobilized [merely stunned] and then scoopedby hand."

38The diver then surfaces and dumps his catch into a submerged net attached to the skiff. Twenty minutes

later, the fish can swim normally. Back on shore, they are placed in holding pens, and within a few weeks, they expelthe cyanide from their system and are ready to be hauled. They are then placed in saltwater tanks or packaged inplastic bags filled with seawater for shipment by air freight to major markets for live food fish.

39While the fish are

meant to survive, the opposite holds true for their former home as "[a]fter the fisherman squirts the cyanide, the firstthing to perish is the reef algae, on which fish feed. Days later, the living coral starts to expire. Soon the reef loses itsfunction as habitat for the fish, which eat both the algae and invertebrates that cling to the coral. The reef becomes anunderwater graveyard, its skeletal remains brittle, bleached of all color and vulnerable to erosion from the pounding ofthe waves."

40It has been found that cyanide fishing kills most hard and soft corals within three months of repeated

application.41

The nexus then between the activities barred by Ordinance No. 15-92 of the City of Puerto Princesa and theprohibited acts provided in Ordinance No. 2, Series of 1993 of the Province of Palawan, on one hand, and the use of

sodium cyanide, on the other, is painfully obvious. In sum, the public purpose and reasonableness of the Ordinancesmay not then be controverted.

As to Office Order No. 23, Series of 1993, issued by Acting City Mayor Amado L. Lucero of the City of PuertoPrincesa, we find nothing therein violative of any constitutional or statutory provision. The Order refers to theimplementation of the challenged ordinance and is not the Mayor's Permit.

The dissenting opinion of Mr. Justice Josue N. Bellosillo relies upon the lack of authority on the part of theSangguniang Panglungsod of Puerto Princesa to enact Ordinance No. 15, Series of 1992, on the theory that thesubject thereof is within the jurisdiction and responsibility of the Bureau of Fisheries and Aquatic Resources (BFAR)under P.D. No. 704, otherwise known as the Fisheries Decree of 1975; and that, in any event, the Ordinance isunenforceable for lack of approval by the Secretary of the Department of Natural Resources (DNR), likewise inaccordance with P.D. No. 704.

The majority is unable to accommodate this view. The jurisdiction and responsibility of the BFAR under P.D. No. 704,over the management, conservation, development, protection, utilization and disposition of all fishery and aquaticresources of the country is not all-encompassing. First, Section 4 thereof excludes from such jurisdiction andresponsibility municipal waters, which shall be under the municipal or city government concerned, except insofar asfishpens and seaweed culture in municipal centers are concerned. This section provides, however, that all municipalor city ordinances and resolutions affecting fishing and fisheries and any disposition thereunder shall be submitted tothe Secretary of the Department of Natural Resources for appropriate action and shall have full force and effect onlyupon his approval.

42

Second, it must at once be pointed out that the BFAR is no longer under the Department of Natural Resources (nowDepartment of Environment and Natural Resources). Executive Order No. 967 of 30 June 1984 transferred the BFARfrom the control and supervision of the Minister (formerly Secretary) Of Natural Resources to the Ministry of


17/27

17

Agriculture and Food (MAF) and converted it into a mere staff agency thereof, integrating its functions with theregional offices of the MAF.

In Executive Order No. 116 of 30 January 1987, which reorganized the MAF, the BFAR was retained as an attachedagency of the MAF. And under the Administrative Code of 1987,

43the BFAR is placed under the Title concerning the

Department of Agriculture.44

Therefore, it is incorrect to say that the challenged Ordinance of the City of Puerto Princesa is invalid orunenforceable because it was not approved by the Secretary of the DENR. If at all, the approval that should besought would be that of the Secretary of the Department of Agriculture. However, the requirement of approval by theSecretary of the Department of Agriculture (not DENR) of municipal ordinances affecting fishing and fisheries inmunicipal waters has been dispensed with in view of the following reasons:

(1) Section 534 (Repealing Clause) of the LGC expressly repeals or amends Sections 16 and 29 of P.D. No.704

45insofar as they are inconsistent with the provisions of the LGC.

(2) As discussed earlier, under the general welfare clause of the LGC, local government units have the power, interalia, to enact ordinances to enhance the right of the people to a balanced ecology. It likewise specifically vestsmunicipalities with the power to grant fishery privileges in municipal waters, and impose rentals, fees or chargestherefor; to penalize, by appropriate ordinances, the use of explosives, noxious or poisonous substances,electricity, muro-ami, and other deleterious methods of fishing; and to prosecute any violation of the provisions ofapplicable fishery laws.

46Finally, it imposes upon the sangguniang bayan, the sangguniang panlungsod, and the

sangguniang panlalawigan the duty to enact ordinances to "[p]rotect the environment and impose appropriatepenalties for acts which endanger the environment such as dynamite fishing and other forms of destructive fishing . . and such other activities which result in pollution, acceleration of eutrophication of rivers and lakes or of ecologicalimbalance."

47

In closing, we commend the Sangguniang Panlungsod of the City of Puerto Princesa and Sangguniang Panlalawiganof the Province of Palawan for exercising the requisite political will to enact urgently needed legislation to protect andenhance the marine environment, thereby sharing in the herculean task of arresting the tide of ecological destruction.We hope that other local government units shall now be roused from their lethargy and adopt a more vigilant stand inthe battle against the decimation of our legacy to future generations. At this time, the repercussions of any furtherdelay in their response may prove disastrous, if not, irreversible.

WHEREFORE, the instant petition is DISMISSED for lack of merit and the temporary restraining order issued on 11November 1993 is LIFTED.

No pronouncement as to costs.

SO ORDERED.


18/27

18

G.R. No. 141616 March 15, 2001

CITY OF QUEZON, petitioner,vs.LEXBER INCORPORATED, respondent.

YNARES-SANTIAGO, J.:

Before us is a petition for review on certiorari assailing the October 18, 1999 decision of the Court of Appeals in CA-G.R. CVNo. 59541

1which affirmed in toto the January 26, 1998 decision of the Regional Trial Court of Quezon City in Civil Case No.

Q-94-19405.2

Briefly stated, the facts are as follows

On August 27, 1990, a Tri-Partite Memorandum of Agreement3

was drawn between petitioner City of Quezon, represented byits then Mayor Brigido R. Simon, Jr., respondent Lexber, Inc. and the then Municipality of Antipolo, whereby a 26,010 squaremeter parcel of land located in Antipolo

4was to be used as a garbage dumping site by petitioner and other Metro Manila cities

or municipalities authorized by the latter, for a 5-year period commencing in January 1991 to December 1995. Part of theagreement was that the landowner, represented by respondent Lexber, shall be hired as the exclusive supplier of manpower,heavy equipment and engineering services for the dumpsite and shall also have the right of first refusal for contracting suchservices.

This led to the drawing of the first negotiated contract5

between petitioner, represented by Mayor Simon, and respondentLexber on September 10, 1990, whereby the latter was engaged to construct the necessary infrastructure at the dumpsite,designated as the Quezon City Sanitary Landfill, for the contract price of P4,381,069.00. Construction of said infrastructurewas completed by respondent Lexber on November 25, 1991, and the contract price agreed upon was accordingly paid to it bypetitioner.

Meanwhile, on November 8, 1990, a second negotiated contract6

was entered into by respondent Lexber with petitioner, againrepresented by Mayor Simon, whereby it was agreed that respondent Lexber shall provide maintenance services in the form ofmanpower, equipment and engineering operations for the dumpsite for the contract price of P1,536,796.00 monthly. It wasfurther agreed that petitioner shall pay respondent Lexber a reduced fee of fifty percent (50%) of the monthly contract price, orP768,493.00, in the event petitioner fails to dump the agreed volume of 54,000 cubic meters of garbage for any given month.On December 11, 1991, respondent was notified by petitioner, through the City Engineer, Alfredo Macapugay, ProjectManager, Rene Lazaro and Mayor Simon to commence maintenance and dumping operations at the site starting on

December 15, 1991.7

Respondent Lexber alleged that petitioner immediately commenced dumping garbage on the landfill site continuously fromDecember 1991 until May 1992. Thereafter, petitioner ceased to dump garbage on the said site for reasons not made knownto respondent Lexber. Consequently, even while the dumpsite remained unused, respondent Lexber claimed it was entitled topayment for its services as stipulated in the second negotiated contract.

On December 12, 1992, respondent's counsel sent a demand letter to petitioner demanding the payment of at least 50% of itsservice fee under the said contract, in the total amount of P9,989,174.00. In view of the idle state of the dumpsite for morethan a year, respondent also sought a clarification from petitioner regarding its intention on the dumpsite project, consideringthe waste of equipment and manpower in the meantime, as well as its loss of opportunity for the property.

Petitioner, this time acting through Mayor Ismael A. Mathay, Jr. who succeeded Mayor Simon in the interim, denied any liabilityunder the contract on the ground that the same was invalid and unenforceable. According to Mayor Mathay, the subject

contract was signed only by Mayor Simon and had neither the approval nor ratification of the City Council, and it lacked therequired budget appropriation.1wphi1.nt

Thus, a complaint for Breach of Contract, Specific Performance or Rescission of Contract and Damages was filed byrespondent Lexber against petitioner on February 21, 1994 before the Regional Trial Court of Quezon City. RespondentLexber averred that because petitioner stopped dumping garbage on the dumpsite after May 1992, Lexber's equipment andpersonnel were idle to its damage and prejudice. Respondent prayed that petitioner be ordered to comply with its obligationsunder the subject contract or, in the alternative, that the said contract be rescinded and petitioner be ordered to pay damages.

On January 26, 1998, after trial on the merits, the lower court rendered judgment in favor of respondent, the dispositive portionof which states:

WHEREFORE, premises considered, judgment is hereby rendered in favor of the plaintiff and against the defendant:


19/27

19

1. Ordering the defendant to pay the plaintiff the amount of SEVEN HUNDRED SIXTY EIGHT THOUSAND FOURHUNDRED NINETY THREE PESOS (P768,493.00) per month starting December 15, 1991 until December 31, 1995with legal interest starting December 16, 1992, the date defendant received plaintiffs extra-judicial demand, untildefendant finally pays the entire amount;

2. Ordering defendant to pay costs of suit.

The claims for attorney's fees and other damages are hereby denied for lack of merit.

SO ORDERED.8

On appeal to the Court of Appeals, the said Judgment was affirmed in toto. With the denial of its Motion for Reconsideration onJanuary 26, 2000, petitioner now comes to this Court with the instant petition arguing that the Court of Appeals gravely erred:

(a) When it refused to hold that the second Negotiated Contract of November 8, 1990 is null and void abinitio, notwithstanding that the execution thereof was in violation of Secs. 85, 86 and 87 of the Auditing Code of thePhilippines (PD 1445) and LOI 968.

(b) When it refused to categorically hold that the said Negotiated Contract of November 8, 1990 required the priorapproval of the City Council, notwithstanding the fact that the said contract would require the expenditure of publicfunds in the amount of P18,817,920.00 for one-year dumping operation, or the total amount of P94,089,600.00 for

five years, and that it is the City Council that is vested by the Local Government Code (BP Blg. 337) with the power toappropriate city funds to cover expenses of the City Government.

(c) When it held that Petitioner started to dump garbage at the dumpsite and paid for such service, despite the factthat Respondent's evidence proved otherwise; furthermore, the Court of Appeals failed to cite any specific evidenceto support said conclusions of fact.

(d) When it held that the said Negotiated Contract of November 8, 1990 was ratified by the Petitioner by the aforesaidinitial dumping of garbage and payment of services, overlooking the elementary doctrine that a void contract cannotbe ratified.

(e) When it wrongly applied an Executive Order and administrative resolution as the applicable law to govern theaforesaid contract, notwithstanding that the Auditing Code of the Philippines (PD 1445) and the Local GovernmentCode (BP 337) then had not been repealed by any legislative enactment, nor could the said executive issuancesrepeal them.

(f) When it held that the equities of the case should lean in favor of the respondent and thus failed to apply thedoctrine that Government is not estopped to question the illegal acts of its officials.

(g) When it wrongly applied the lmus case, not the Osmena case, to the present case.9

Petitioner's remonstrations can be reduced to two (2) essential arguments:

First. That the second negotiated contract is null and void ab initio because its execution was done in violation ofexisting laws, more particularly Sections 85, 86 and 87 of Presidential Decree No. 1445 (otherwise known as the

Auditing Code of the Philippines) and Section 177 (b) of Batas Pambansa Blg. 337 (also known as the LocalGovernment Code of 1983); and

Second. That the facts and evidence do not support the Court of Appeals, conclusion that, notwithstanding the lack ofappropriation, subsequent acts of the petitioner constituted a ratification of the subject negotiated contract.

The issue of whether or not the subject negotiated contract is null and void ab initio will be discussed first.

Petitioner insists that the subject contract failed to comply with the mandatory requirements of Presidential Decree No. 1445,otherwise known as the Auditing Code of the Philippines.

Section 85 thereof provides:


20/27

20

Section 85.Appropriation before entering into contract. - (1) No contract involving the expenditure of public fundsshall be entered into unless there is an appropriation therefor, the unexpected balance of which, free of otherobligations, is sufficient to cover the proposed expenditure; (2) Notwithstanding this provision, contracts for theprocurement of supplies and materials to be carried in stock may be entered into under regulations of theCommission provided that when issued, the supplies and materials shall be charged to the proper appropriationaccount. (Underscoring ours)

Section 86 of PD 1445 also provides as follows:

Section 86. Certificate showing appropriation to meet contract. - Except in a case of a contract for personal service,for supplies for current consumption or to be carried in stock not exceeding the estimated consumption for threemonths, or banking transactions of government-owned or controlled banks, no contract involving the expenditure ofpublic funds by any government agency shall be entered into or authorized unless the proper accounting official orthe agency concerned shall have certified to the officer entering into obligation that funds have been dulyappropriated for the purpose and that the amount necessary to cover the proposed contract for the current fiscal yearis available for expenditure on accou

province of cebu,

Documents