Monday, December 22, 2008 SC orders reception of evidence vs Cebu guv
THE Supreme Court (SC) directed the Cebu City Regional Trial Court (RTC) to receive further evidence on the civil complaint lodged against Governor Gwendolyn Garcia for committing the province into paying monetary obligations amounting to over P102-million without the consent of the Provincial Board (PB).
The high court partially granted the petition filed by Cebu City Councilors Luis Quisumbing, Estrella Yapha, Victoria Corominas and Raul Bacaltos, seeking a reversal of the July 11, 2006 decision of the Cebu City RTC Branch 9.
The trial court, in the assailed ruling, dismissed the suit filed by the four councilors and declared it does not have juridical personality or is it vested by Republic Act 7160 (Local Government Code) with authority to sue and be sued.
The RTC also held that the PB had already given its prior authorization when it passed the appropriation ordinances authorizing the expenditures in the questioned infrastructure contracts entered by Garcia in 2004.
In a decision, the SC en banc remanded to the Cebu City RTC the case for hearing for further reception of evidence to determine the nature of the questioned contracts entered into by Garcia, and the existence of ordinances authorizing her acts.
The high court said it is important to determine whether the questioned contracts, whether they were, as Garcia claimed, were mere disbursements pursuant to the ordinances supposedly passed by the PB or, as petitioners claim, new contracts that obligate the province without the PB's authority.
It said the declaration of the trial court to the effect that no prior authorization is required when there is a prior appropriation ordinance enacted does not put the controversy to rest.
"The question which should have been answered by the trial court, and which it failed to do was whether, during the period in question, there did exist ordinances (authorizing Governor Garcia to enter into the questioned contracts) which rendered the obtention of another authorization from the Provincial Board superfluous," the court said.
The SC noted that the lower court failed to determine whether there were ordinances enacted at the time the contracts were entered into by Garcia in 2004.
The tribunal said that the question of whether a PB authorization separate from the appropriation ordinance is required should be resolved depending on the particular circumstances of the case.
Resort to the appropriation ordinance is necessary in order to determine if there is a provision, which specifically covers the expense to be incurred or the contract to be entered into, the SC said.
"Should the appropriation ordinance, for instance, already contain in sufficient detail the project and cost of a capital outlay such that all that the local chief executive needs to do after undergoing the requisite public bidding is to execute the contract, no further authorization is required, the appropriation ordinance already being sufficient," it ruled.
On the other hand, the SC said that should the appropriation ordinance describe the projects in generic terms such as "infrastructure projects," "inter-municipal waterworks, drainage and sewerage, flood control, and irrigation systems projects," "reclamation projects" or "roads and bridges," there is an obvious need for a covering contract for every specific project that in turn requires approval by the PB.
Specific PB approval may also be required for the purchase of goods and services that are neither specified in the appropriation ordinance nor encompassed within the regular personal services and maintenance operating expenses, the SC added.
It however emphasized that its decision should not be so construed as to proscribe any and all contracts entered into by the local chief executive without formal PB authorization.
In cases, for instance, where the local government unit operates under an annual as opposed to a re-enacted budget, it should be acknowledged that the appropriation passed by the PB may validly serve as the authorization required under the Local Government Code.
"After all, an appropriation is an authorization made by ordinance, directing the payment of goods and services from local government funds under specified conditions or for specific purposes. The appropriation covers the expenditures, which are to be made by the local government unit, such as current operating expenditures and capital outlays," said the SC.
Court records showed that the Commission on Audit conducted a financial audit on the province of Cebu for the period ending December 2004. Its audit team rendered a report, Part II of which states: "Several contracts in the total amount of P102,092,841.47 were not supported with a Provincial Board resolution authorizing the Governor to enter into a contract, as required under Section 22 of RA 7160.
The audit team then recommended that Garcia "must secure a PB resolution authorizing the former to enter into a contract pursuant to RA 7160."
Garcia then sought reconsideration of the findings and recommendation of the COA. However, without waiting for the resolution of the reconsideration sought, she instituted an action for Declaratory Relief before the Cebu City RTC Branch 9.
Impleaded as respondents were Delfin Aguilar, Helen Hilayo, and Roy Ursal in their official capacities as Cluster Director IV, Regional Cluster Director, and Regional Legal and Adjudication Director of COA, respectively.
The PB, represented by Vice Governor Gregorio Sanchez Jr., was also impleaded as respondent.
Alleging that the infrastructure contracts subject of the audit report complied with the bidding procedures and were entered into pursuant to the general and/or supplemental appropriation ordinances passed by the PB, Garcia alleged that a separate authority to enter into such contracts was no longer necessary.
On the basis of the parties' respective memoranda, the trial court rendered the assailed decision declaring that Garcia need not secure prior authorization from the PB before entering into the questioned contracts.
In their Petition for Review filed before the SC, petitioners insisted that the RTC committed reversible error in granting due course to Garcia's petition for declaratory relief despite a breach of the law subject of the petition having already been committed.
This breach was allegedly already the subject of a pending investigation by the Office of the Deputy Ombudsman for the Visayas.
Petitioners further maintained that prior authorization from the PB should be secured before Garcia could validly enter into contracts involving monetary obligations on the part of the province.
To uphold the assailed decision would allegedly give the local chief executive unbridled authority to enter into any contract as long as an appropriation ordinance or budget has been passed by the PB concerned, petitioners claimed.
Respondent COA officials also claimed that the petition for declaratory relief should have been dismissed for the failure of Garcia to exhaust administrative remedies, rendering the petition not ripe for judicial determination. (ECV/Sunnex)
