Art. 9 Consti Law 1 cases

Dela Llana v. COA – 665 SCRA 176 [2012]

Facts:

On 26 October 1982, the COA issued Circular No. 82-195, lifting the system of pre-audit of government financial transactions, albeit with certain exceptions. The circular affirmed the state policy that all resources of the government shall be managed, expended or utilized in accordance with law and regulations, and safeguarded against loss or wastage through illegal or improper disposition, with a view to ensuring efficiency, economy and effectiveness in the operations of government.

After the change in administration due to the February 1986 revolution, grave irregularities and anomalies in the government's financial transactions were uncovered. Hence, on 31 March 1986, the COA issued Circular No. 86-257, which reinstated the pre-audit of selected government transactions. The selective pre-audit was perceived to be an effective, although temporary, remedy against the said anomalies.         

Two years later, or on 22 July 2011, COA issued Circular No. 2011-002, which lifted the pre-audit of government transactions implemented by Circular No. 2009-002. In its assessment, subsequent developments had shown heightened vigilance of government agencies in safeguarding their resources.

On 15 January 2008, petitioner filed this Petition for Certiorari under Rule 65. He alleges that the pre-audit duty on the part of the COA cannot be lifted by a mere circular, considering that pre-audit is a constitutional mandate enshrined in Section 2 of Article IX-D of the 1987 Constitution. He further claims that, because of the lack of pre-audit by COA, serious irregularities in government transactions have been committed, such as the P728-million fertilizer fund scam, irregularities in the P550-million call center laboratory project of the Commission on Higher Education, and many others.

Issue:

WON the COA’s power includes the duty to conduct pre-audit

Held:

Petitioner's allegations find no support in the aforequoted Constitutional provision. There is nothing in the said provision that requires the COA to conduct a pre-audit of all government transactions and for all government agencies. The only clear reference to a pre-audit requirement is found in Section 2, paragraph 1, which provides that a post-audit is mandated for certain government or private entities with state subsidy or equity and only when the internal control system of an audited entity is inadequate. In such a situation, the COA may adopt measures, including a temporary or special pre-audit, to correct the deficiencies.

Hence, the conduct of a pre-audit is not a mandatory duty that this Court may compel the COA to perform. This discretion on its part is in line with the constitutional pronouncement that the COA has the exclusive authority to define the scope of its audit and examination. When the language of the law is clear and explicit, there is no room for interpretation, only application. 19 Neither can the scope of the provision be unduly enlarged by this Court. 

WHEREFORE, premises considered, the Petition is DISMISSED.

Settle Government Account

Philippine Operations, Inc.  v. Auditor General, 94 Phil 868 [1953-1954]

Facts:

POI entered into a barter agreement with the Bureau of Prisons whereby it agreed to deliver to the Bureau a sawmill, complete, with a diesel fuel engine, a stop saw edge and log turner, etc., and two LCMs in good turning condition, in exchange for 350,000 board feet of sawed lumber.

The receipt that an employee of the Bureau of Prisons issued for the sawmill and its accessories discloses following unsatisfactory conditions. Due to the effect, the Bureau would not be able to complete the delivery of the sawed lumber.

The Attorney of POI claim with the Auditor General demanding cash payment plus damaged incurred. The Auditor denied the claim because the agreement entered into was one of barter and no money consideration came to mind and that the Bureau of Prisons was willing to perform its part of the obligation.

Issue:

WON the Auditor General has jurisdiction over unliquidated claim

Held:

the Auditor General has no jurisdiction or power to take cognizance of claims for unliquidated damages , we now come to the question as to whether under the provisions of the Constitution and the laws enacted thereafter by Congress, such power may not be considered as having been lodged in the Auditor General. An examination of the provisions of the Constitution fails to disclose any power vested in or granted to the Auditor General to consider claims. All that is vested in the Auditor General is the settlement of accounts. "Accounts," because of the absence of any reasons to the contrary, must be deemed to have the same meaning as accounts under the laws in force before the approval of the Constitution. The Constitution does not grant the Auditor General the right to consider claims. After the promulgation of the Constitution, the power was granted under the provisions of Commonwealth Act No. 327. We have examined this law, and we find nothing therein to show that the term "moneyed claims," the jurisdiction over which is granted the Auditor General, should not be interpreted in the same sense that it was understood prior to the adoption of the Constitution.

For the foregoing considerations, the petition for review is hereby dismissed, with costs against the petitioner.

ICNA v. Republic, 21 SCRA 40 [1967]

Facts:

The Insurance Company of North America filed an action for recovery for the insured value of shipment allegedly lost in the custody of the carrier United States Lines Co., or of the lighter operator, Luzon Stevedoring Corporation , or of the arrastre operator, Bureau of Customs, an agency of the defendant, Republic of the Philippines.

The RP and the Bureau moved to dismiss the complaint by claiming state immunity of the suit. However, the court in lieu of a decision rendered in Mobil Philippines Exploration Inc., vs Bureau of Customs and Customs Arrastre denied the petition to dismiss.

Issue:

WON the plaintiff should have filed its claim to the Auditor General

Held:

In the decided case against the Compania General de Tabacos, it was said that the money claims not easily determinable and which calls for the application of judgment and discretion upon the measure of damages are not within the competence of the Auditor General to decide. However, those, which claim is already fixed and readily determinable, can be addressed directly to the Auditor General. This is the case of the present petition. Since there was an assertion of th existence of a specific and fixed indebtedness on the part of the Govt., it should be lodged with the Auditor General.

Dingcong v. Guingona, 162 SCRA 782 [1988]

Facts:

Petitioner, Atty. Praxedio P. Dingcong, was the former Acting Regional Director of Regional Office No. VI of the Bureau of Treasury in Iloilo City, after public bidding, contracted, admittedly on an "emergency labor basis," the services of one Rameses Layson, a private carpenter and electrician on "pakyao" basis for the renovation and improvement of the Bureau of Treasury Office, Iloilo City.

When petitioner retired on 17 January 1984, among the items disallowed by the Resident Auditor was the amount of P6,574.00 from the labor contracts with Layson, by reducing the latter's daily rate from P40.00 per day to P18.00 daily.

Petitioner appealed to the Chairman of the Commission on Audit, who affirmed the disallowance as being "excessive and disadvantageous to the government," but increased Layson's daily rate to P25.00 thereby reducing the total amount disallowed to P4,276.00. Despite petitioner's request for reconsideration, respondent Commission remained unmoved, hence, the instant appeal.

Issue:

WON the disallowance is invalid for being a usurpation of management function and an impairment of contract

Held:

the Decision of the Commission on Audit is hereby SET ASIDE

COA is vested with power and authority, and is also charged with the duty to examine, audit and settle all accounts pertaining to the expenditures or uses of funds owned by, or pertaining to the Govt., or any of its subdivisions, agencies and instrumentalities.

The COA found that the labor contract which they disallowed, was excessive and thus disadvantageous to the Govt. however, the court found out that that the rate given is not necessarily disadvantageous. The Bureau of Treasury hired Layson since he was the one submitted the lowest price in the auction for the contract. Thus, it being found not disadvantageous, the decision of COA was set aside and ordered the petitioner to refund the disallowed item.

NHC v. COA – 226 SCRA 55 [1993]

Facts:

Our government forged an agreement on financial cooperation with the Republic of Germany. The agreement empowered the NHA (National Housing Authority) and the KFW (Kreditanstalt Fur Weideraufbau) to be the lender or the project sponsor of the Urban Housing Dagat Dagatan Project II.

However, despite all the negotiations and contracts, the project was not completed as scheduled. Thus, an extension of the contracts was made since the NHA did not appear to have much choice. Several extensions were made which triggered the difficulties experienced by the NHA.

Issue:

WON the COA has the authority to disallow a duly entered contract and substitute its own judgment or disposition in lieu of the decision of the management or governing body of the Govt. entities

Held:

In Caltex Philippines, Inc. v. COA, We recognized the authority of COA to disallow irregular, unnecessary, excessive, extravagant or unconscionable (IUEEU) expenditures. We ruled: "Since the COA is responsible for the enforcement of the rules and regulations, it goes without saying that failure to comply with them is a ground for disapproving the payment of the proposed expenditure."

The nature of the terminal phrase of the Dagat Dagatan project does not require the expertise of a foreign consultant and that the finishing stage merely requires simple advisory stage that can be undertaken by the NHA or DPWH in-house technical staff or at the most a local consultant. The postulates of our Constitution are not merely platitudes, in which we should honor only in rhetorics but not in reality. The power to contract in a foreign load does not carry with it the authority to bargain away the ideals of our Constitution.

Euro-Med v. Province of Batangas, 495 SCRA 30 [2006]

Facts:

Petitioner Euro-Med Laboratories, Phil., Inc. filed a complaint against Provice of Batangas for unpaid balance still due to the petitioner. Respondent alleged that some payments it had already made were not reflected in the computation set forth in the complaint and that it was continuously exerting genuine and earnest efforts "to find out the true and actual amount owed." 

At the conclusion of petitioner's presentation of evidence, respondent filed a motion to dismiss 7 the complaint on the ground that the primary jurisdiction over petitioner's money claim was lodged with the Commission on Audit (COA). Respondent pointed out that petitioner's claim, arising as it did from a series of procurement transactions with the province, was governed by the Local Government Code provisions and COA rules and regulations on supply and property management in local governments. Respondent argued that the case called for a determination of whether these provisions and rules were complied with, and that was within the exclusive domain of COA to make.

Issue:

WON it is the COA or RTC which has primary jurisdiction to pass upon petitioner's money claim against the Province of Batangas.

Held:

We rule that it is the COA which does. Therefore, we deny the petition.  

The doctrine of primary jurisdiction holds that if a case is such that its determination requires the expertise, specialized training and knowledge of an administrative body, relief must first be obtained in an administrative proceeding before resort to the courts is had even if the matter may well be within their proper jurisdiction. 10 It applies where a claim is originally cognizable in the courts and comes into play whenever enforcement of the claim requires the resolution of issues which, under a regulatory scheme, have been placed within the special competence of an administrative agency. In such a case, the court in which the claim is sought to be enforced may suspend the judicial process pending referral of such issues to the administrative body for its view 11 or, if the parties would not be unfairly disadvantaged, dismiss the case without prejudice. 12

This case is one over which the doctrine of primary jurisdiction clearly held sway for although petitioner's collection suit for P487,662.80 was within the jurisdiction of the RTC, 13 the circumstances surrounding petitioner's claim brought it clearly within the ambit of the COA's jurisdiction.

Define Scope and Techniques of Auditing Procedures

Danville Maritime v. COA,175 SCRA 701 [1989]

Facts:

Petitioner seeks to set aside the letter-directive of respondent Commission on Audit (COA for brevity) disapproving the result of the public bidding held by the Philippine National Oil Company (PNOC for brevity) of the sale of its tanker-vessel "T/T Andres Bonifacio" on the ground that only one bidder submitted a bid and to direct COA to approve the said sale.

Issue:

Whether or not the public respondent COA committed a grave abuse of discretion when it ruled that there was a failure of bidding when only one bid was submitted and subsequently ordered a rebidding.

Held:

COA Circular No. 88-264 there should at least be two (2) bidders, otherwise there is a failure of bidding.

Negotiated sale may only be undertaken under the failure of the second bidding. Only the SC can review the decisions made by COA

We see no reason to disturb the interpretation given by the COA to the term "public bidding" and what constitutes its "failure." No less than the Constitution has ordained that the COA shall have exclusive authority to define the scope of its audit and examination, establish the techniques and methods required therefore, and promulgate accounting and auditing rules and regulations, including those for the prevention and disallowance of irregular, unnecessary, excessive, extravagant, or unconscionable expenditures, or use of government funds and properties.

Promulgate Accounting and Auditing Rules

Leycano v. COA, 482 SCRA 215

Facts:

Petitioner Manuel Leycano, Jr. was the Provincial Treasurer of Oriental Mindoro and at the same time a member of the Provincial School Board (PSB) of that province. 1 During his tenure, he was appointed by the PSB as a member of its Inspectorate Team which, according to him, had the function of "monitoring the progress of PSB projects."

In the year 1995, several checks were issued to various private contractors in connection with the repair, rehabilitation, and construction projects covered by the Special Education Fund (SEF) 2 of Oriental Mindoro in the several public schools.

The Special Audit Team, COA Regional Office No. IV, headed by State Auditor Joselyn Cirujano (the Auditor), subsequently audited selected transactions under the SEF of the Province of Oriental Mindoro, among which were the abovementioned projects (the projects).

The Special Audit Team found deficiencies in the projects, hence, it issued the questioned Notices of Disallowance holding petitioner, along with Sangguniang Panlalawigan Member Remedios Marasigan and Schools Division Superintendent Benjamin Cruz, liable for signing the Certificates of Inspection (the dates of which have not been alleged by either party) relative to the projects and thereby falsely attesting to their 100% completion.

Issue:

WON petitioner is held accountable for the said project

Held:

In light of this function of the Inspectorate Team, its members may be held liable by the COA for any irregular expenditure of the SEF if their participation in such irregularity can be established. While petitioner, in his capacity as member of the Inspectorate Team, is not an accountable officer as contemplated in Section 101 of P.D. No. 1445, 5 which states:

SEC. 101.         Accountable officers; bond requirement. — (1) Every officer of any government agency whose duties permit or require the possession or custody of government funds or property shall be accountable therefor and for the safekeeping thereof in conformity with law.

(2)        Every accountable officer shall be properly bonded in accordance with law, he may, nonetheless, be held liable by the COA under the broad jurisdiction vested on it by the Constitution "to examine, audit, and settle all accounts pertaining to the revenue and receipts of, and expenditures or uses of funds and property, owned or held in trust by, or pertaining to, the Government." 6 In addition, the authority of the COA to hold petitioner liable is also implied in its duty to "promulgate accounting and auditing rules and regulations, including those for the prevention and disallowance of irregular, unnecessary, excessive, extravagant, or unconscionable expenditures, or uses of government funds and properties."

Furthermore, Section 340 of the Local Government Code (LGC) clearly provides:

SECTION 340.   Persons Accountable for Local Government Funds. — Any officer of the local government unit whose duty permits or requires the possession or custody of local government funds shall be accountable and responsible for the safekeeping thereof in conformity with the provisions of this Title. Other local officers who, though not accountable by the nature of their duties, may likewise be similarly held accountable and responsible for local government funds through their participation in the use or application thereof. (Emphasis and underscoring supplied)  

DOCTRINE: PROMULGATE ACCOUNTING AND AUDITING RULES

Decide Administrative Cases Involving Expenditures of Public Funds

NCMH v. COA, 265 SCRA 390 [1996]

Facts:

An increase in its budgetary allocation of from P145 million in 1987 to P191 million in 1988 enabled petitioner NCMHM, headed by Dr. Brigida Buenaseda, to finally undertake the rehabilitation, apparently long overdue, of various facilities in the NCMHM.

Soon after most of the work was accomplished, the NCMHM Nurses Association lodged with the Office of the Ombudsman a complaint against petitioners for alleged mismanagement of funds. At the same time, the group asked the COA to undertake an audit of the NCMHM. Acting on the request, the COA directed an audit, covering the transactions made in 1988 and the first four (4) months of 1989, to be conducted by a Special Audit Team ("SAT"). On 27 July 1992, the SAT submitted its SAO (Special Audit Office) report that states that a use of  bulk of the budget was unnecessary, extravagant and/or excessive. While the incurrence of these expenditures made the physical surroundings pleasant, it left some basic hospital needs unattended to or given minimal attention.

The SAO report and the evaluation report was brought to COA en banc for review and was denied for alleging that there was an overpricing, splitting, violation of rues of public bidding, and unlawful alterations of dates”. Hence, this petition alleged that COA to have committed Grave Abuse of Discretion, that they denied due process and that the findings found in the SAO report was not substantiated evidence but by suspicion.

Issue:

WON the expenditures were considered to be was unnecessary, extravagant and/or excessive

Held:

The Court ruled: in passing, nothing before us suggests, even remotely, that the disbursements have been made for personal or selfish ends. Petition GRANTED in accordance with the circular that defines unnecessary, extravagant and/or excessive is.

COA Circular 88-55-A states:

"2.2      The service mission, size, systems, structure, strategy, skills, style, spirit and financial performance of government agency are the primary considerations in determining whether or not their expenditures are irregular, unnecessary, excessive or extravagant." 20

Then COA Chairman Francisco Tantuico, Jr., 21 comments:

"The terms 'irregular,' 'unnecessary,' 'excessive,' and 'extravagant,' when used in reference to expenditures of funds or uses of property, are relative. The determination of which expenditure of funds or use of property belongs to this or that type is situational. Circumstances of time and place, behavioral and ecological factors, as well as political, social and economic conditions, would influence any such determination. Viewed from this perspective, transactions under audit are to be judged on the basis of not only the standards of legality but also those of regularity, necessity, reasonableness and moderation."

Ramos v. Aquino, 39 SCRA 256 [1971]

Facts:

Appellants, assailed the jurisdiction of respondent Benjamin Aquino, then Provincial Fiscal of Rizal, to conduct the preliminary investigation of the alleged commission of malversation through falsification of Public, official and commercial documents imputed to them by the other respondent, then the Commanding General, Philippine Army, Fort Bonifacio, Rizal, Romeo Espino.

The basis for such a petition was that under the Constitution, the Auditor General is not only vested with the duty to examine or audit all expenditures of funds of the Government, but also to audit or investigate and "bring to the attention of the proper administrative officer expenditures of funds or property which in this opinion are irregular, unnecessary, excessive, or extravagant." It is their contention that under the above, it is incumbent on the Auditor General to determine whether criminal responsibility for the anomaly discovered in the course of his audit or examination of the accounts lies.

Issue:

Won the investigation of the cases by the Provincial Fiscal encroached upon the powers of the Auditor General

Held:

Such a contention lacks merit.

There is the explicit requirement then that there be no expenditure of public funds except in pursuance of an appropriation made by law. Though the power of the purse belongs to the legislative, they are not in a position to oversee and supervise the actual release of each and every appropriation. That is where the Auditor General comes in. He serves as the necessary check to make certain that no department of the government exceeds the statutory limits of the appropriation to which it is entitled.

The exclusive jurisdiction of the Auditor General refer to auditorial requirements and approval but not to the criminal liability, if any, of the persons involved in an alleged irregular or anomalous disbursement of public funds. The authority of the Fiscal to investigate whether a criminal act has been committed or not in the disbursement of public funds is not included in the administrative findings of the Auditor General.

Salva v. Carague, 511 SCRA 258

Facts:

Petitioner Dr. Teresita L. Salva, President of the Palawan State University(formerly Palawan State College [PSC]), is being held personally liable by the Commission on Audit (COA) for the disallowance made on the construction of Phase II,Multi-Purpose Building of the PSC in the amount of P274,726.38

In 1992, the PSC and the Integrand Development Construction, Inc. (IDCI)entered into a Construction Agreement for the construction of the PSC Multi-Purpose Building (Phase II) for the price of P1,685,883.45 When the COA-Technical Audit Specialist (COA-TAS) reviewed the contract, it found excess amounts attributed to the costs of items of mobilization/demobilization and earth fill and compaction.

In COA Decision No. 95-211 dated March 28, 1995, petitioner, together with PSCVice-President Francisco M. Romantico and PSC Accountant Carolina S. Baloran, were held jointly and severally liable for the amount of P274,726.38 which was the excess amount. The COA further affirmed said disallowance in COA Decision No. 2000-273dated September 26, 2000, with the modification that Romantico and Baloran were excused from any liability, while Engineers Norberto S. Dela Cruz and Lucy JanetPasion, and the IDCI Manager, were included as persons liable for the amount.

Issue:

WON petitioner should be held personally liable for the disallowed amount ofP274,726.38?

Held:

Petitioner is found liable under Section 103 of Presidential Decree No. 1445 or the Government Auditing Code of the Philippines. Under this provision, an official or employee shall be personally liable for unauthorized expenditures if the following requisites are present, to wit: (a) there must be an expenditure of government funds or use of government property; (b) the expenditure is in violation of law or regulation; and(c) the official is found directly responsible.

According to COA, applying the provision above, since the petitioner directly caused such diversion which resulted in the use of additional equipment and expense, then she should be personally liable for the resulting additional expense. But court found that her only participation is to approve the Approved Agency Estimates (AAE) prepared by PSU Engineers Norberto S. dela Cruz and Lucy Janet R. Pasion. She cannot be held personally liable for the disallowance simply because she was the final approving authority of the transaction in question. Also, being the president of PSU does not automatically make her the party ultimately liable in case of disallowance of expenses for questionable transactions of her agency

Further, in National Center for Mental Health Management v. Commission on Audit , the term “irregular”, as with the terms “unnecessary,” “excessive,” and “extravagant,” was explained in reference to expenditure of funds or uses of property. Its determination is situational taking into consideration circumstances of time and place, behavioral and ecological factors, as well as political, social and economic conditions. In this light, it cannot be said that the additional expense incurred for the construction were irregular or excessive, unnecessary or unconscionable since it was spent for the benefit of PSU. The additional expense was also within the Approved agency Estimates. Further, there is no showing that petitioner was ill-motivated, or that she had personally profited or sought to profit from the transactions

City of Basilan v. Hechanova, 58 SCRA 711 [1974]

Facts:

The City of Basilan, by ordinance created the position of Assistant City Auditor in1954. Private respondent Miguel Antonio was appointed to this position. In 1964, the city abolished the position by through another ordinance, deleting the position from the plantilla and specifying no compensation for the office. Respondents contested the authority of the City of Basilan to abolish the position, hence Antonio continued to discharge the functions of his office.

Issue:

WON the City of Basilan can dissolve the office of Assistant City Auditor by ordinance

Held:

NO . The office of Assistant City Auditor is dissimilar from that of a city employee. It comes within the purview of the Auditor General, a constitutionally created position. Itis a position primarily under the General Auditing Office. Therefore, the City of Basilan does not have sole jurisdiction over the position, much less the power to abolish it.

Section 3. COA Jurisdiction

Luciano Veloso v. Commisssion on Audit, GR 193677, 6 September 2011

Doctrine: Power of COA to audit government agencies cannot be taken away

Facts:

The city council of Manila enacted City Ordinance No. 8040 authorizing the grant of an Exemplary Public Service Award (EPSA) to elective officials of the City of Manila who have been elected for 3 consecutive terms. The award includes gratuity pay amounting to 3 years worth of salary subject to availability and minimal restrictions. Petitioners Veloso et al were recipients of the EPSA and correspondingly received gratuities from the City of Manila.

Respondent Commission on Audit evaluated the EPSA program and found it excessive and in contrast to provisions of the Salary Standardization Law (SSL). In a Decision by the respondent commission, the disbursement of the EPSA to petitioners were deemed illegal. The petitioners contest this decision, positing that the Commission on Audit has committed grave abuse of discretion in interfering with LGU’s in the disbursement of the EPSA. They also contend that the COA has no authority to disapprove payments simply because they are unreasonable, citing Guevara vs.Gimenez.

Issue:

WON the COA have the authority to disallow the disbursement of local government funds

WON the COA commit grave abuse of discretion amounting to lack of jurisdiction by disallowing the disbursement of the EPSA pursuant to Ordinance 8040

Held:

YES . Article IX-D of the Constitution gives a broad outline of the powers and functions of the COA, to wit: The Commission on Audit shall have the power, authority, and duty to examine, audit, and settle all accounts pertaining to the revenue and receipts of, and expenditures or uses of funds and property, owned or held in trust by, or pertaining to, the Government, or any of its subdivisions, agencies, or instrumentalities, including government-owned or controlled corporations with original charters, and on a post-audit basis.

The Commission shall have exclusive authority, subject to the limitations in this Article, to define the scope of its audit and examination, establish the techniques and methods required therefor, and promulgate accounting and auditing rules and regulations, including those for the prevention and disallowance of irregular, unnecessary, excessive, extravagant, or unconscionable expenditures, or uses of government funds and properties. NO. Section 11, Chapter 4, Subtitle B, Title I, Book V of the Administrative Code of 1987 states that the jurisdiction of the COA Under the first paragraph of the above provision, the COA's audit jurisdiction extends to the government, or any of its subdivisions, agencies, or instrumentalities, including government-owned or controlled corporations with original charters.

Section 4. Annual Report to the President and to Congress

Article X. Local Government

Section 1. Territorial and Political Subdivisions of the Philippines

Cordillera Broad Coalition v. COA, GR No. 79956, January 26, 1990

Facts:

Pursuant to a ceasefire agreement signed on September 13, 1986, the Cordillera People’s

Liberation Army (CPLA) and the Cordillera Bodong Administration agreed that the Cordillera

people shall not undertake their demands through armed and violent struggle but by peaceful

means, such as political negotiations

Pursuant to a ceasefire agreement signed on September 13, 1986, the Cordillera People’s

Liberation Army (CPLA) and the Cordillera Bodong Administration agreed that the Cordillera

people shall not undertake their demands through armed and violent struggle but by peaceful

means, such as political negotiations

Pursuant to a ceasefire agreement signed on September 13, 1986, the Cordillera People’s

Liberation Army (CPLA) and the Cordillera Bodong Administration agreed that the Cordillera

people shall not undertake their demands through armed and violent struggle but by peaceful

means, such as political negotiations

Pursuant to a ceasefire agreement signed on September 13, 1986, the Cordillera People’s

Liberation Army (CPLA) and the Cordillera Bodong Administration agreed that the Cordillera

people shall not undertake their demands through armed and violent struggle but by peaceful

means, such as political negotiations

Pursuant to a ceasefire agreement signed on September 13, 1986, the Cordillera Peoples Liberation Army (CPLA) and the Cordillera Bodong Administration agreed that the Cordillera people shall not undertake their demands through armed and violent struggle but by peaceful means, such as political negotiations. A subsequent joint agreement was then arrived at by the two parties. Such agreement states that they are to: Par. 2. Work together in drafting an Executive Order to create a preparatory body that could perform policy-making and administrative functions and undertake consultations and studies leading to a draft organic act for the Cordilleras. Par. 3. Have representatives from the Cordillera panel join the study group of the R.P. Panel in drafting the Executive Order. Pursuant to the above joint agreement, E.O. 220 was drafted by a panel of the Philippine government and of the representatives of the Cordillera people. This was then signed into law by President Corazon Aquino, in the exercise of her legislative powers, creating the Cordillera Administrative Region [CAR], which covers the provinces of Abra, Benguet, Ifugao, Kalinga-Apayao and Mountain Province and the City of Baguio. Petitioners assail the constitutionality of E.O. 220 on the primary ground that by issuing the said order, the President, in the exercise of her legislative powers, had virtually pre-empted Congress from its mandated task of enacting an organic act and created an autonomous region in the Cordilleras.

Issue:

WON E.O 220 is constitutional

Held:

YES.

E.O. 220 does not create the autonomous region contemplated in the Constitution. It merely provides for transitory measures in anticipation of the enactment of an organic act and the creation of an autonomous region. In short, it prepares the ground for autonomy. This does not necessarily conflict with the provisions of the Constitution on autonomous regions.

The Constitution outlines a complex procedure for the creation of an autonomous region in the Cordilleras. Since such process will undoubtedly take time, the President saw it fit to provide forsome measures to address the urgent needs of the Cordilleras in the meantime that the organic act had not yet been passed and the autonomous region created. At this time, the President was still exercising legislative powers as the First Congress had not yet convened.

Section 2. Local Autonomy

Limbona v. Conte Mangelin, et al, GR No. 80391, February 28, 1989

Facts:

Petitioner, Sultan Alimbusar Limbona, was elected Speaker of the Regional Legislative Assembly or Batasang Pampook of Central Mindanao (Assembly). On October 21, 1987 Congressman Datu Guimid Matalam, Chairman of the Committee on Muslim Affairs of the House of Representatives, invited petitioner in his capacity as Speaker of the Assembly of Region XII in a consultation/dialogue with local government officials. Petitioner accepted the invitation and informed the Assembly members through the Assembly Secretary that there shall be no session in November as his presence was needed in the house committee hearing of Congress. However, on November 2, 1987, the Assembly held a session in defiance of the Limbona's advice, where he was unseated from his position. Petitioner prays that the session's proceedings be declared null and void and be it declared that he was still the Speaker of the Assembly. Pending further proceedings of the case, the SC received a resolution from the Assembly expressly expelling petitioner's membership therefrom. Respondents argue that petitioner had "filed a case before the Supreme Court against some members of the Assembly on a question which should have been resolved within the confines of the Assembly," for which the respondents now submit that the petition had become "moot and academic" because its resolution

Issue:

Whether or not the courts of law have jurisdiction over the autonomous governments or regions. What is the extent of self-government given to the autonomous governments of Region XII

Held:

We hold that the November 2 and 5, 1987 sessions were invalid. It is true that under Section 31 of the Region XII Sanggunian Rules, "[s]essions shall not be suspended or adjourned except by direction of the Sangguniang Pampook". But while this opinion is in accord with the respondents' own, we still invalidate the twin sessions in question, since at the time the petitioner called the "recess," it was not a settled matter whether or not he could do so. In the second place, the invitation tendered by the Committee on Muslim Affairs of the House of Representatives provided a plausible reason for the intermission sought. Also, assuming that a valid recess could not be called, it does not appear that the respondents called his attention to this mistake. What appears is that instead, they opened the sessions themselves behind his back in an apparent act of mutiny. Under the circumstances, we find equity on his side. For this reason, we uphold the "recess" called on the ground of good faith. 

Autonomy is either decentralization of administration or decentralization of power. There is decentralization of administration when the central government delegates administrative powers to political subdivisions in order to broaden the base of government power and in the process to make local governments "more responsive and accountable". At the same time, it relieves the central government of the burden of managing local affairs and enables it to concentrate on national concerns. The President exercises "general supervision" over them, but only to "ensure that local affairs are administered according to law." He has no control over their acts in the sense that he can substitute their judgments with his own. Decentralization of power, on the other hand, involves an abdication of political power in the favor of local governments units declared to be autonomous. In that case, the autonomous government is free to chart its own destiny and shape its future with minimum intervention from central authorities.

San Juan v. CSC, 196 SCRA 69 (1991)

Facts:

The Provincial Budget Officer of Rizal (PBO) was left vacant; thereafter Rizal Governor San Juan, peititioner, nominated Dalisay Santos for the position and the latter quickly assumed position. However, Director Abella of Region IV Department of Budget and Management (DBM) did not endorse the nominee, and recommended private respondent Cecilia Almajose as PBO on the ground that she was the most qualified. This appointment was subsequently approved by the DBM. Petitioner protested the appointment of Almajose before the DBM and the Civil Service Commission who both dismissed his complaints. His arguments rest on his contention that he has the sole right and privilege to recommend the nominees to the position of PBO and that the appointee should come only from his nominees. In support thereof, he invokes Section 1 of Executive Order No. 112. 

Issue:

Whether or not DBM is empowered to appoint a PBO who was not expressly nominated by the provincial governor

Held:

This case involves the application of a most important constitutional policy and principle, that of local autonomy. We have to obey the clear mandate on local autonomy. Where a law is capable of two interpretations, one in favor of centralized power in Malacañang and the other beneficial to local autonomy, the scales must be weighed in favor of autonomy.

The 1935 Constitution clearly limited the executive power over local governments to "general supervision . . . as may be provided by law." The President controls the executive departments. He has no such power over local governments. He has only supervision and that supervision is both general and circumscribed by statute. The exercise of greater local autonomy is even more marked in the present Constitution. Article II, Section 25 provides: "The State shall ensure the autonomy of local governments"

Thereby, DBM Circular is ultra vires and is, accordingly, set aside. The DBM may appoint only from the list of qualified recommendees nominated by the Governor. If none is qualified, he must return the list of nominees to the Governor explaining why no one meets the legal requirements and ask for new recommendees who have the necessary eligibilities and qualifications.

Drilon v. Lim – 235 SCRA 135 [1994]

Facts:

The Secretary of Justice (on appeal to him of four oil companies and a taxpayer) declared Ordinance No. 7794 (Manila Revenue Code) null and void for non-compliance with the procedure in the enactment of tax ordinances and for containing certain provisions contrary to law and public policy.

The RTC revoked the Secretary’s resolution and sustained the ordinance. It declared Sec 187 of the LGC as unconstitutional because it vests on the Secretary the power of control over LGUs in violation of the policy of local autonomy mandated in the Constitution. The Secretary argues that the annulled Section 187 is constitutional and that the procedural requirements for the enactment of tax ordinances as specified in the Local Government Code had indeed not been observed. (Petition originally dismissed by the Court due to failure to submit certified true copy of the decision, but reinstated it anyway.)

Issue:

WON the lower court has jurisdiction to consider the constitutionality of Sec 187 of the LGC

Held:

Yes. BP 129 vests in the regional trial courts jurisdiction over all civil cases in which the subject of the litigation is incapable of pecuniary estimation. Moreover, Article X, Section 5(2), of the Constitution vests in the Supreme Court appellate jurisdiction over final judgments and orders of lower courts in all cases in which the constitutionality or validity of any treaty, international or executive agreement, law, presidential decree, proclamation, order, instruction, ordinance, or regulation is in question.

In the exercise of this jurisdiction, lower courts are advised to act with the utmost circumspection, bearing in mind the consequences of a declaration of unconstitutionality upon the stability of laws, no lessthan on the doctrine of separation of powers. It is also emphasized that every court, including this Court, is charged with the duty of a purposeful hesitation before declaring a law unconstitutional, on the theory that the measure was first carefully studied by the executive and the legislative departments and determined by them to be in accordance with the fundamental law before it was finally approved. To doubtis to sustain. The presumption of constitutionality can be overcome only by the clearest showing that there was indeed an infraction of the Constitution.

Magtajas v. Pryce Properties, GR No. 111097, July 20, 1994

Facts:

PAGCOR decided to expand its operations to Cagayan de Oro City. It leased a portion of a building belonging to Pryce Properties Corporations, Inc., renovated & equipped the same, and prepared to inaugurate its casino during the Christmas season.

Civil organizations angrily denounced the project. Petitioners opposed the casino’s opening and enacted Ordinance No. 3353, prohibiting the issuance of business permit and cancelling existing business permit to the establishment for the operation of the casino, and Ordinance No. 3375-93, prohibiting the operation of the casino and providing a penalty for its violation.

Respondents assailed the validity of the ordinances on the ground that they both violated Presidential Decree No. 1869. Petitioners contend that, pursuant to the Local Government Code, they have the police power authority to prohibit the operation of casino for the general welfare.

Issue:

WON the Ordinance Nos. 3353 and 3375-93 are valid.

Held:

CdeO is empowered to enact ordinances for the purposes indicated in the LGC. However,ordinances should not contravene a statute. Municipal governments are merely agents of the National Government. Local Councils exercise only delegated powers conferred by Congress. The delegate cannot be superior to the principal powers higher than those of the latter. PD 1869 authorized casino gambling. As a statute, it cannot be amended/nullified by a mere ordinance.

Judge Leynes v. COA, GR No. 143596, Dec. 11, 2003

Facts:

Petitioner Judge Tomas C. Leynes, is the presiding judge of the Regional Trial Court of Calapan City, Oriental Mindoro, Branch 40. His salary and representation and transportation allowance (RATA) were drawn from the budget of the Supreme Court. Besides that, petitioner also received a monthly allowance of P944 from the local funds of the Municipality of Naujan starting 1984.

On May 7, 1993, the Sangguniang Bayan unanimously approved a resolution increasing petitioner judge’s monthly allowance from P944 to P1,600 (an increase of P656) starting May 1993. This supplemental budget was approved by the municipal government (the Municipal Mayor and the Sangguniang Bayan) and was also likewise approved by the Sangguniang Panlalawigan and the Office of Provincial Budget and Management of Oriental Mindoro.

On February 17, 1994, Provincial Auditor Salvacion M. Dalisay sent a letter to the Municipal Mayor and the Sangguniang Bayan of Naujan directing them to stop the payment of the P1,600 monthly allowance or RATA to petitioner judge and to require the immediate refund of the amounts previously paid to the latter. She reasoned that the Municipality of Naujan could not grant RATA to petitioner judge in addition to the RATA the latter was already receiving from the Supreme Court. Petitioner judge appealed the matter to COA Regional Director Gregoria S. Ong who, however, upheld the opinion of Provincial Auditor Dalisay.

Issue:

Whether or not the Municipality of Naujan, Oriental Mindoro can validly provide RATA to its Municipal Judge, in addition to that provided by the Supreme Court.

Held:

RA 7160, the Local Government Code of 1991, clearly provides that provincial, city and municipal governments may grant allowances to judges as long as their finances allow. Section 3, paragraph (e) of LBC No. 53, by outrightly prohibiting LGUs from granting allowances to judges whenever such allowances are (1) also granted by the national government or (2) similar to the allowances granted by the national government, violates Section 447(a)(l)(xi) of the Local Government Code of 1991. As already stated, a circular must conform to the law it seeks to implement and should not modify or amend it. Moreover, by prohibiting LGUs from granting allowances similar to the allowances granted by the national government, Section 3 (e) of LBC No. 53 practically prohibits LGUs from granting allowances to judges and, in effect, totally nullifies their statutory power to do so. Being unduly restrictive therefore of the statutory power of LGUs to grant allowances to judges and being violative of their autonomy guaranteed by the Constitution, Section 3, paragraph (e) of LBC No. 53 is hereby declared null and void.

Batangas CATV v. CA and Batangas City, GR No. 138810, September 29, 2004

Facts:

On July 28, 1986, respondent Sangguniang Panlungsod enacted Resolution No. 210 granting petitioner a permit to construct, install, and operate a CATV system in Batangas City. Section 8 of the Resolution provides that petitioner is authorized to charge its subscribers the maximum rates specified therein, “provided, however, that any increase of rates shall be subject to the approval of the Sangguniang Panlungsod. Sometime in November 1993, petitioner increased its subscriber rates from P88.00 to P180.00 per month. As a result, respondent Mayor wrote petitioner a letter threatening to cancel its permit unless it secures the approval of respondent Sangguniang Panlungsod, pursuant to Resolution No. 210.Petitioner then filed with the RTC, Branch 7, Batangas City, a petition for injunction alleging that respondent Sangguniang Panlungsod has no authority to regulate the subscriber rates charged by CATV operators because under Executive Order No. 205, the National Telecommunications Commission (NTC) has the sole authority to regulate the CATV operation in the Philippines.

Issue:

WON a local government unit (LGU) may regulate the subscriber rates charged by CATV operators within its territorial jurisdiction

Held:

The logical conclusion, therefore, is that in light of the above laws and E.O. No. 436, the NTC exercises regulatory power over CATV operators to the exclusion of other bodies.

Like any other enterprise, CATV operation maybe regulated by LGUs under the general welfare clause. This is primarily because the CATV system commits the indiscretion of crossing public properties. (It uses public properties in order to reach subscribers.) The physical realities of constructing CATV system – the use of public streets, rights of ways, the founding of structures, and the parceling of large regions- allow an LGU a certain degree of regulation over CATV operators.

But, while we recognize the LGUs’ power under the general welfare clause, we cannot sustain Resolution No. 210. We are convinced that respondents strayed from the well-recognized limits of its power. The flaws in Resolution No. 210 are: (1) it violates the mandate of existing laws and (2) it violates the State’s deregulation policy over the CATV industry.

LGUs must recognize that technical matters concerning CATV operation are within the exclusive regulatory power of the NTC.