Corporate Powers and Municipal Liability

EN BANC [G.R. No. L-28972. October 31, 1972.] CITY COUNCIL OF CEBU CITY represented by COUNCILORS FLORENCIO S.
UROT, EULOGIO E. BORRES, RONALD DUTERTE, RAYMUNDO A. CRYSTAL, BIENVENIDO A. TUDTUD, JOHN U. OSMEA and MARIO R. VELOSO, in their capacity as the Majority Members of the City Council of Cebu and as Citizens of the said City, plaintiffs-appellants, vs. CARLOS J. CUIZON, Mayor of the City of Cebu, JESUS E. ZABATE, Acting City Treasurer of the City of Cebu, PHILIPPINE NATIONAL BANK and TROPICAL COMMERCIAL COMPANY, INCORPORATED, defendants-appellees. City Attorneys Nazario R. Pacquiao and Metudio P. Belarmino for plaintiffs-appellants. Ronald R. Duterte for and in his own behalf. Jesus E. Zabate for and in his own behalf. Conrado E. Medina, Andres L. Africa, Edgardo M. Magtalas and Artemio S. Tipon for defendant-appellee Philippine National Bank. Siguion Reyna, Montecillo, Belo & Ongsiako for defendantappellee Tropical Commercial Co., Inc. Emilio Benitez for other defendant-appellee. DECISION TEEHANKEE, J p: Appeal on pure questions of law from an order of the Court of First Instance of Cebu, dismissing plaintiffs' complaint upon the ground of their lack of legal capacity to institute the action. The seven above named plaintiffs-appellants "by themselves and representing the City Council of Cebu, as majority members thereof" 1 filed on May 31, 1966 their complaint in the court of first instance of Cebu against defendants appellees Carlos J. Cuizon, as mayor of Cebu City, Jesus E. Zabate, as acting Cebu City treasurer, Philippine National Bank (hereinafter referred to as the bank) and Tropical Commercial Company, Inc. (hereinafter referred to as Tropical), praying inter alia that the contract entered into on February 5, 1966 by and between defendant Mayor Cuizon on behalf of the city for the purchase of road construction equipment from Tropical (for $520,912.00 on a cash basis or $687,767.30 on a deferred payment basis) be declared as null and void ab initio. (The contract, as eventually annexed by defendant Tropical with its answer, shows that its total was for $685,767.30 on a five-year deferred payment plan.) 2 Among the grounds invoked by plaintiffs-appellants for the nullity of the said contract and the complementary transactions with the bank arising therefrom such as the corresponding letters of credit opened therefor, were that
the same were entered into without the necessary authority and approval of the city council, and that the city treasurer had not certified to the city mayor, as required by section 607 of the Revised Administrative Code that funds have been duly appropriated for the said contract and that the amount necessary to cover the contract was available for expenditure on account thereof, and that accordingly, the purported contract entered into by the city mayor was "wholly void" under the provisions of section 608 of the same code, which make "the officer assuming to make such contract . . . liable to the government or other contracting party for any consequent damage to the same extent as if the transaction had been wholly between private parties." As summarized by plaintiffs-appellants, the background facts that led to their filing of their complaint were as follows: "a) On November 20, 1965, the City Council approved Resolution No. 1648, quoted as follows: 'RESOLUTION NO. 1648 'The City Council, on motion of City Councilor Borres, seconded by City Councilor Tudtud, 'RESOLVED, to authorize His Honor, the City Mayor, for and in behalf of the City of Cebu, to negotiate and to contract for, by public bidding, on deferred payment plan and by lot bid, U.S. or European made road construction equipments for the City of Cebu and authorizing him for this purposes, to sign the corresponding contract and other pertinent papers. 'RESOLVED FURTHER, to request the City Mayor to call soon a public bidding for the early acquisition of said equipments. 'CARRIED UNANIMOUSLY.' "b) On December 23, 1965, the City Council of Cebu approved Resolution No. 1831, which also reads as follows: 'RESOLUTION NO. 1831 'The City Council, on motion of City Councilor Llanos, seconded by City Councilor Veloso, 'RESOLVED, to authorize the City Mayor, in connection with the authority granted him under Resolution No. 1648, current series, to utilize the Time Deposit of the City of Cebu with the Philippine National Bank, as Bond guarantee in the opening of a Letter of Credit in connection with the City of Cebu's application to directly purchase road construction equipments from abroad, to the extent of the amount that the Letter of Credit may require. 'CARRIED UNANIMOUSLY.' "c) By reason of the fact that the call to bid by the defendant City Mayor Carlos J. Cuizon were for bidders who should be exclusive distributors of the equipments being bidded and the said supplier must have a sales and service outlet in the City of Cebu, the other bidders then became disqualified and the bid was awarded to the only bidder, the defendant Tropical Commercial Co., Inc. Hence,
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on January 20, 1966, the City Council approved Resolution No. 122, which we quote as follows: 'RESOLUTION NO. 122 'The City Council on motion of City Councilor Borres, seconded by Councilor Osmea, 'RESOLVED, to request the Award Committee to forward to this Body the pertinent papers in connection with the bidding for two (2) complements of light and heavy equipments to be used by the City Engineering Department for ratification by this Body. 'CARRIED UNANIMOUSLY.' "d) Notwithstanding the request contained in Resolution No. 122, the defendant City Mayor, Carlos J. Cuizon, without having been duly authorized thru proper resolution of the City Council, and without compliance with Resolution No. 122, signed a contract with the Tropical Commercial Co., Inc. for the acquisition of the heavy equipments on February 5, 1966. 3 "e) On February 14, 1966, the City Council, without knowledge that the contract had already been signed by defendant City Mayor Carlos J. Cuizon and the Tropical Commercial Co. Inc. since the same was signed in the City of Manila approved Resolution No. 292, which we quote as follows: 'RESOLUTION NO. 292 'The City Council, on motion of City Councilor Osmea, seconded by City Councilor Tudtud, 'RESOLVED, to reiterate this City Council's request embodied in its Resolution No. 122, current series, addressed to the Award Committee to forward to this body the pertinent papers in connection with the bidding for two (2) complements of light and heavy equipments to be used by the City Engineering Department for ratification by this Body. 'CARRIED UNANIMOUSLY.' "f) On March 10, 1966, in view of the fact that the defendant City Mayor ignored the requests of the City Council, the said City Council approved Resolution No. 473, which we quote as follows: 'RESOLUTION NO. 473 'The City Council, on motion of City Councilor Crystal, seconded by City Councilor Duterte, 'RESOLVED, to revoke Resolution No. 1648 dated November 29, 1965 and Resolution No. 1831, dated December 23, 1965, authorizing His Honor, the City Mayor, to negotiate and to contract for, by public bidding, on deferred payment plan and by lot bid, U.S. or European made road construction equipments for the City of Cebu and authorizing him for this purpose, to sign the corresponding contract and other pertinent papers and authorizing the City Mayor to utilize the Time Deposit of the City of Cebu with the Philippine National Bank, as bond guarantee in the opening of a Letter of Credit in connection with the City of Cebu's application to directly purchase road construction equipments from abroad, to the extent
of the amount that the Letter of Credit may require, respectively. 'RESOLVED FURTHER, to inform His Honor the City Mayor, that the City Council, after careful deliberation has decided to discontinue with the purchase of road construction equipments. 'RESOLVED FINALLY, to advice all bidders of the action of the City Council and to reject their bids on the basis thereof. 'CARRIED BY MAJORITY VOTES. 'Voting in favor: City Councilors Crystal, Duterte, Tudtud, Borres, Osmea, Veloso and Zamora (Presiding Officer Urot voted in favor) Voting against: City Councilor Llanos.' "g) On March 18, 1966, the presiding officer of the City Council, City Councilor Florencio S. Urot, sent a telegram to the Manager of the Philippine National Bank, which we quote as follows: 'TELEGRAM MANAGER PHILNABANK MANILA BEEN INFORMED BY MANAGER DIKITANAN CEBU BRANCH THAT MAYOR CUIZON CEBU CITY OPENED LETTER OF CREDIT FOR PURCHASE OF HEAVY EQUIPMENT STOP PLEASE BE INFORMED THAT CEBU CITY COUNCIL HAS REVOKED MAYOR'S AUTHORITY ON THIS PARTICULAR MATTER LAST MARCH TEN THEREBY SUSPENDING FURTHER NEGOTIATIONS ON THIS TRANSACTION END. PRESIDING OFFICER UROT' "h) On March 18, 1966, the defendant Acting City Treasurer, Jesus E. Zabate, sent a reply to the Asst. VicePresident of the defendant Philippine National Bank in Cebu City refusing the request of the Philippine National Bank (to withhold P3,000,000.00 from the time deposit of the City of Cebu) on the ground that no appropriation for the purchase of heavy equipments was made by the City Council. "i) That notwithstanding the knowledge of the revocation by Resolution No. 473 of Resolution No. 1648 and Resolution No. 1831, series of 1965 of the City Council of Cebu City, the said City Mayor, Carlos J. Cuizon, continued with the transaction by placing the order with the Equipment Division of the Continental Ore Corporation of New York U.S.A. for the .purchase .of the said heavy equipments." 4 Hence, plaintiffs-appellants filed their complaint against defendants-appellees, incorporating the foregoing antecedents and averments' and praying for judgment of the court. "(a) to declare null and void ab initio the contract entered into by and between the City Mayor, Carlos J. Cuizon and the defendant Tropical Commercial Company, Inc., for the purchase of the equipments referred to in paragraph VII of this complaint;
"(b) to declare null and void ab initio and without any effect the Letters of Credit opened with the defendant Philippine National Bank by the defendant City Mayor of Cebu, Carlos J. Cuizon; "(c) to exempt the City of Cebu and to hold the same not liable for any and all obligations to the defendant Philippine National Bank which may result from the unauthorized opening of the Letters of Credit by the defendant City Mayor of Cebu; "(d) to exempt and hold not liable the City Government of the City of Cebu from any obligation regarding the contract specified in paragraph (a) hereof; "(e) to enjoin and order the defendant City Mayor of Cebu, the defendant City Treasurer of Cebu, the City Auditor, City Engineer and any and all public officials and employees of the City of Cebu not to receive the equipments if they were already ordered and in the event that they will arrive for delivery; "(f) to grant any and other remedies to which the plaintiffs may be entitled under the law." 5 Defendants City Mayor and Tropical filed in due course their respective answers to the Complaint, with counterclaims and traversed the allegations of the complaint. Defendant mayor's counterclaim, contending that the suit. was unfounded and intended to harass and embarrass him prayed for judgment against plaintiffs for actual and temperate damages as may be ascertained by the trial court,. million moral damages, P50,000. exemplary damages, P50,000. attorney's fees and expenses of litigation with costs. 6 Defendant Tropical's counterclaim, prayed for judgment "in the event that this Honorable Court should hold that the plaintiffs have the capacity or interest to bring this suit in behalf of the City of Cebu," 7 in the total sum of P242,939.90 with legal interest, representing bank charges in the sums of P86,267.76 and P156,672.14 which it had as seller advanced in cash for two letters of credit opened by the bank to cover the price of the equipment contracted for by the city mayor on behalf of the city. Defendant Tropical averred that "said advances were actually cash payments made by (it) to the Philippine National Bank upon request of the city mayor and upon the representation of the city mayor that (he) was acting for and in behalf of the City of Cebu." 8 Defendant acting city treasurer filed his separate answer in effect affirming the nullity ab initio of the questioned contract for the reasons and circumstances averred in plaintiffs' complaint. He further set up special defenses averring that the assignment by way of guaranty by the city mayor of P3-million of the city's time deposit with the defendant bank was null and void and done without his consent nor knowledge as the official responsible for said fund, and prayed for the dismissal of the case against him alone.
Defendant bank in its turn filed a motion to dismiss the plaintiffs' complaint on the grounds of plaintiffs' lack of legal capacity to sue and failure of the complaint to state a cause of action against it. The first stated ground of plaintiffs' alleged lack of legal capacity to bring the suit had also been alleged as an affirmative defense by defendants mayor and Tropical in their respective answers, with defendant mayor asking for a preliminary hearing on his .affirmative defenses as if a motion to dismiss had been filed. 9 Plaintiffs on their part filed their responsive pleadings. In their answer to the mayor's counterclaim, they averred that "the present complaint was filed with no other purpose than to secure the annulment of a contract which had been entered into by defendant mayor in violation of his authority from the City Council of Cebu City, to the great prejudice and detriment of the City of Cebu and accordingly, well within the concern of the plaintiffs to pursue, not only as majority members of the City Council but also as individual taxpayers and citizens of this community which is the City of Cebu." 10 In their opposition to the motion to dismiss, 11 plaintiffs asserted inter alia their right as city officials and taxpayers to question the validity of the contract entered into by the defendant city mayor and to contest the expenditures of the city's funds therefor beyond the mayor's authority or the disposition thereof in an unlawful or prohibited manner. Plaintiffs also filed a separate reply to the mayor's affirmative defenses, 12 refuting the mayor's claim of estoppel by citing the principle that estoppel cannot be founded upon an illegal act and submitting therewith the Auditor General's endorsement of June 16, 1966 affirming the city auditor's prior endorsement of nullity ab initio of the questioned contract for non-compliance with the requirements of sections 607 and 608 of the Revised Administrative Code. Pertinent excerpts of AuditorGeneral Ismael Mathay, Sr.'s endorsement read: xxx xxx xxx "Opinion of this Office is being requested on the validity of the herein contract for the purchase of heavy equipment and machineries entered into by and between Mayor Carlos J. Cuizon .of Cebu City for and in behalf of the City Government of Cebu by virtue of Resolution No. 1648, series of 1965, of the City Council, and Tropical Commercial Co., Inc. xxx xxx xxx "It appearing from the within papers that the City Council of Cebu has not appropriated funds for purposes of the contract in question, for which reason the City Treasurer could not have certified, even if he wanted to, as in fact he did not make the certification required under the aforequoted provisions of law, which is a condition precedent to the validity of the contract, this Office
concurs in view of the City Auditor in the preceding second indorsement that the said contract is null and void ab initio. "In view of the nullity of the herein contract, all claims arising therefrom may not be allowed." 13 Defendant mayor, in turn, in his motion for immediate resolution of pending motion to dismiss dated October 5, 1966, 14 contended that "the General Auditing Office,. through the Auditor General, has already withdrawn or recalled its ruling declaring the said contract null and void ab initio." On October 6, 1966, the lower court issued the order of dismissal appealed from. In ordering the dismissal of plaintiffs' complaint on the ground of their lack of legal capacity to sue and their not being the "real party in interest," the lower court reasoned as follows: "It is uncontroverted that the contract now sought to be annulled was signed by the City Mayor in behalf of the contracting party, the City of Cebu, by virtue of the authority granted him by Resolution No. 1648 of the city council. Now, the majority members of this council who have given authority to the City Mayor to execute the contract are filing this complaint and seek to annul the said contract. Their power to file the action either as such councilors or as private citizens is being questioned. "Article 1397 of the New Civil Code provides that action for annulment of contracts may be instituted by all who are thereby obliged principally or subsidiarily. In other words, the plaintiffs must have an interest in the contract. In the instant case the plaintiffs, in their capacity as city councilors or tax payers are not parties to the contract executed by the City of Cebu and there is no evidence to show that because of the contract they may be prejudiced or may suffer injury different from that of the public in general. The City of Cebu being the party to the contract, any action brought regarding the said contract must be instituted in the name of the City of Cebu and by the person authorized to do so. Section 20(c) of the Revised. Charter of Cebu City (Republic Act No. 3857) empowers the City Mayor to 'cause to be instituted judicial proceedings to recover properties and funds of the city wherever found and cause to be defended all suits against the City.' There is no provision in the said Charter which authorizes expressly or impliedly the city council or its members to bring an action in behalf of the City. "Section 2, Rule 3 of the new Rules of Court provides that every action must be prosecuted in the name of the real party in interest. 'The real party in interest is the party who would be benefited or injured by the judgment, or the party entitled to the avails of the suit' (Salonga vs. Warner Barnes & Co. Ltd., L-2246, Jan. 1, 1951). As stated above, the plaintiffs acting either as members of the city council or as private citizens are not bound by the contract in question and cannot maintain an action to annul the same since they will not be benefited or prejudiced by the judgment of the case. They have no right to the contract
and they will not suffer injuries different from that of the public in general. They are not, therefore, the real party in interest. In the same way as the plaintiffs are not the real party in interest, the defendant Carlos Cuizon may not be bound by the judgment herein and he cannot be sued as party defendant.' Hence this appeal. Plaintiffs-appellants and defendantappellee Philippine National Bank filed their respective briefs in due course. The other defendants-appellees, the city mayor, the city treasurer and Tropical failed to file their briefs, with Tropical's extended period to do so having expired on January 4, 1969, and the case was deemed submitted for decision on March 17, 1969, 1. It seems clearly self-evident from the foregoing recitation of the undisputed antecedents and factual background that the lower court gravely erred in issuing its dismissal order on the ground of plaintiffs' alleged lack of interest or legal standing as city councilors or as taxpayers to maintain the case at bar. The lower court founded its erroneous conclusion on the equally erroneous premise of citing an applying Article 1397 of the Civil Code that "the action for the annulment of contracts may be instituted (only) by all who are thereby obliged principally or subsidiarily." 15 The lower court's fundamental error was in treating plaintiffs' complaint as a personal suit on their own behalf and applying the test in such cases that plaintiffs should show personal interest as parties who would be benefited or injured by the judgment sought. Plaintiffs' suit is pat entry not a personal suit. Plaintiffs clearly and by the express terms of their complaint filed the suit as a representative suit on behalf and for the benefit of the city of Cebu. Without passing upon or prejudging the merits of the complaint, it is not disputed that taken by themselves without considering the contrary evidence or defenses that might properly be set up by defendants at the trial, the allegations of the complaint state a sufficient cause of action on the basis of which judgment could be validly rendered by the lower court declaring the nullity of the questioned contract and letters of credit and declaring the City of Cebu exempt and free from any and all liability on account thereof, as prayed for by plaintiffs. Defendant bank in its brief concedes that "we find no ruling that the complaint was dismissed for lack of cause of action against the appellee Philippine National Bank." 16 The appeal at bar must therefore be granted and the case ordered remanded to the lower court where the parties may be properly given the opportunity at the trial to present evidence in support of their respective contentions for disposition and judgment on the merits. 2. The lower court entirely missed the point that the action filed by plaintiffs-appellants as city councilors (composing practically the entire city council, at that) and as city taxpayers is to declare null and void the P3-million
contract executed by defendant city mayor for the purchase of road construction equipment purportedly on behalf of the city from its co-defendant Tropical and to declare equally null and void the corresponding letters of credit opened with the bank by defendant mayor and to prevent the disbursement of any city funds therefor and to exempt the City of Cebu and hold it not liable for any obligation arising from such contract and letters of credit specifically and precisely questioned in the complaint filed by plaintiffs on behalf of the City as having been executed without authority and contrary to law. Plaintiffs' suit is clearly not one brought by them in their personal capacity for the annulment of a particular contract entered into between two other contracting parties, in which situation Article 1397 of the Civil Code may rightfully be invoked to question their legal capacity or interest to file the action, since they are not in such case in anyway obliged thereby principally or subsidiarily. On the contrary, plaintiffs' suit is one filed on behalf of the City of Cebu, instituted by them in pursuance of their prerogative and duty as city councilors and taxpayers, in order to question and declare null and void a contract which according to their complaint was executed by defendant city mayor purportedly on behalf of the city without valid authority and which had been expressly declared by the Auditor-General to be null and void ab initio and therefore could not give rise to any valid or allowable monetary claims against the city. 3. Plaintiffs' right and legal interest as taxpayers to file the suit below and seek judicial assistance to prevent what they believe to be an attempt to unlawfully disburse public funds of the city and to contest the expenditure of public funds under contracts and commitments with defendants bank and Tropical which they assert to have been entered into by the mayor without legal authority and against the express prohibition of law have long received the Court's sanction and recognition. In Gonzales vs. Hechanova, 17 the Court through the now Chief Justice dismissed the challenge against the sufficiency of therein petitioner's interest to file the action, stating that "since the purchase of said commodity will have to be effected with public funds mainly raised by taxation, and as a rice producer and landowner petitioner must necessarily be a taxpayer, it follows that he has sufficient personality and interest to seek judicial assistance with a view to restraining what he believes to be an attempt to unlawfully disburse said funds." Even defendant Tropical so understood that plaintiffs' suit was a representative suit in behalf of the City of Cebu, hence their counterclaim in their answer, should the lower court uphold plaintiffs' "capacity or interest to bring this suit in behalf of the City of Cebu," for judgment against the City of Cebu for the repayment with legal interest of bank charges in the total sum of P242,939.90 which it had advanced on the letters of credit opened by the defendant
bank at the mayor's instance in favor of its U.S. supplier, supra. 18 Parenthetically, it may be noted with reference to said letters of credit opened by the bank at the mayor's instance, that the same were caused by the mayor to be established, according to the allegations of the complaint, notwithstanding the mayor's knowledge and notice of the city council having revoked by its resolution No. 473 on March 10, 1966 its previous resolutions authorizing him to enter into the transaction, supra. 19 4. Plaintiffs' right and legal interest as city councilors to file the suit below and to prevent what they believe to be unlawful disbursements of city funds by virtue of the questioned contracts and commitments entered into by the defendant city mayor notwithstanding the city council's revocation of his authority with due notice thereof to defendant bank must likewise be recognized. The lower court's narrow construction of the city charter, Republic Act No. 3857, that under section 20 (c) thereof, it is only the city mayor who is empowered "to cause to be instituted judicial proceedings to recover properties and funds of the city wherever found and cause to be defended all suits against the city," and that plaintiffs' suit must therefore fail since "there is no provision in the said charter which authorizes expressly or impliedly the city council or its members to bring an action in behalf of the city" cannot receive the Court's sanction. The case at bar shows the manifest untenability of such a narrow construction. Here where the defendant city mayor's acts and contracts purportedly entered into on behalf of the city are precisely questioned as unlawful, ultra vires and beyond the scope of his authority, and the city should therefore not be bound thereby nor incur any liability on account thereof, the city mayor would be the last person to file such a suit on behalf of the city, since he precisely maintains the contrary position that his acts have been lawful and duly bind the city. To adhere to the lower court's narrow and unrealistic interpretation would mean that no action against a city mayor's actuations and contract in the name and on behalf of the city could ever be questioned in court and subjected to judicial action for a declaration of nullity and invalidity, since no city mayor would file such an action on behalf of the city to question, much less nullify, contracts executed by him on behalf of the city and which he naturally believes to be valid and within his authority. 5. Section 20 (c) of the city charter invoked by the lower court, however, has no applicability to the present suit, which is not one to recover properties and funds of the city or a suit against the city, but rather a representative suit on behalf of and purportedly for the benefit of the city, which the city mayor is however loath to institute.
Under such circumstances, in the same manner that a stockholder of a corporation is permitted to institute derivative or representative suits as nominal party plaintiff for the benefit of the corporation which is the real party in interest, 20 more so may plaintiffs as city councilors exclusively empowered by the city charter to "make all appropriations for the expenses of the government of the city" 21 and who were the very source of the authority granted to the city mayor to enter into the questioned transactions which authority was later revoked by them, as per the allegations of the complaint at bar, be deemed to possess the necessary authority, and interest, if not duty, to file the present suit on behalf of the City and to prevent the disbursement of city funds under contracts impugned by them to have been entered into by the city mayor without lawful authority and in violation of law. ACCORDINGLY, the order appealed from is hereby set aside and the lower court is ordered to proceed with the trial and disposition of the case below on its merits. No costs. So ordered. Concepcion, C.J., Zaldivar, Castro, Fernando, Barredo, Makasiar, Antonio and Esguerra, JJ., concur. Makalintal, J., is on official leave. Footnotes 1. Complaint, Rec. on Appeal, p. 2. 2. Rec. on Appeal, pp. 85-106. 3. Plaintiffs complaint alleged that "no copy of this contract was made available to the city council although request to that effect was made by the said body." Rec. on Appeal, p. 11. 4. Plaintiffs-appellants' brief, pp. 3-9, italics supplied. 5. Rec. on Appeal, pp. 21-22, emphasis supplied. 6. Rec. on Appeal, pp. 123-124. 7. Idem, at p. 82. 8. Idem. 9. Citing Rule 16, section 6 of the Rules of Court; Rec. on Appeal, pp. 124-125. 10. Rec. on Appeal, pp. 135-136; emphasis supplied. 11. Idem, at pp. 137-144. 12. Rec. on Appeal, pp. 144-149. 13. Idem, at pp. 150-151. 14. Idem, at pp. 155-158. 15. Word in Parenthesis supplied. 16. Defendant bank's brief, at p. 10. 17. 9 SCRA 230, 235 (1963). See also Gonzales vs. Comelec, 27 SCRA 835, 854 (1969) per Fernando, J., and cases cited, noting that "in this jurisdiction, the rule has been sufficiently relaxed to allow a taxpayer to bring an action to restrain the expenditure of public funds through the enforcement of an invalid or unconstitutional legal measure." 18. At page 8 hereof.
19. At pages 6-7. As per Tropical's answer, a first letter of credit for $43,612.53 was opened on March 17, 1966 and a second letter of credit for $442,154.77 was opened much later on April 21, 1966. Rec. on Appeal, at page 77. 20. See Evangelista vs. Santos, 86 Phil. 387; Republic Bank vs. Cuaderno, 19 SCRA 671. 21. Sections 29 and 31 (2) of Rep. Act No. 3857. C o p y r i g h t 1996 c CD Technologies Asia In
SECOND DIVISION [G.R. No. 105909. June 28, 1994.] MUNICIPALITY OF PILILLA, RIZAL, petitioner, vs. HON. COURT OF APPEALS, HON. ARTURO A. MARAVE, as Presiding Judge, Regional Trial Court, Branch 78, Morong, Rizal, and PHILIPPINE PETROLEUM CORPORATION, respondents. SYLLABUS 1. POLITICAL LAW; ADMINISTRATIVE LAW; AUTHORITY TO REPRESENT A PROVINCE OR MUNICIPALITY IN A LAWSUIT; RULE AND EXCEPTION; APPLICATION IN CASE AT BAR. The Court of Appeals is correct in holding that Atty. Mendiola has no authority to file a petition in behalf of and in the name of the Municipality of Pililla. The matter of representation of a municipality by a private attorney has been settled in Ramos vs. Court of Appeals, et al., 108 SCRA 728 [1981]) and reiterated in Province of Cebu vs. Intermediate Appellate Court, et al., (147 SCRA 447 [1987]) where we ruled that private attorneys cannot represent a province or municipality in lawsuits. Section 1683 of the Revised Administrative Code provides: "Section 1683. Duty of fiscal to represent provinces and provincial subdivisions in litigation. The provincial fiscal shall represent the province and any municipality or municipal district thereof in any court, except in cases whereof original jurisdiction is vested in the Supreme Court or in cases where the municipality or municipal 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 political division 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." Under the above provision, complemented by Section 3, Republic Act No. 2264, the Local Autonomy Law, (This section states that the municipal attorney, as the head of the legal division or office of a municipality, "shall act as legal counsel of the municipality and perform such duties and exercise such powers as may
be assigned to him by the council.") only the provincial fiscal and the municipal attorney can represent a province or municipality in their lawsuits. The provision is mandatory. The municipality's authority to employ a private lawyer is expressly limited only to situations where the provincial fiscal is disqualified to represent it. (Municipality of Bocaue, et al. vs. Manotok, 93 Phil. 173 [1953] and other cases cited) For the aforementioned exception to apply, the fact that the provincial fiscal was disqualified to handle the municipality's case must appear on record. (De Guia vs. The Auditor General, et al., 44 SCRA 169) In the instant case, there is nothing in the records to show that the provincial fiscal is disqualified to act as counsel for the Municipality of Pililla on appeal, hence the appearance of herein private counsel is without authority of law. 2. ID.; ID.; ID.; FISCAL'S REFUSAL, NOT A LEGAL JUSTIFICATION FOR EMPLOYING THE SERVICES OF PRIVATE COUNSEL. The fiscal's refusal to represent the municipality is not a legal justification for employing the services of private counsel. Unlike a practising lawyer who has the right to decline employment, a fiscal cannot refuse to perform his functions on grounds not provided for by law without violating his oath of office. Instead of engaging the services of a special attorney, the municipal council should request the Secretary of Justice to appoint an acting provincial fiscal in place of the provincial fiscal who has declined to handle and prosecute its case in court, pursuant to Section 1679 of the Revised Administrative Code. (Enriquez, Sr. vs. Gimenez, etc., supra: De Guia vs. The Auditor General, et al., supra) It is also significant that the lack of authority of herein counsel. Atty. Mendiola, was even raised by the municipality itself in its comment and opposition to said counsel's motion for execution of his lien, which was filed with the court a quo by the office of the Provincial Prosecutor of Rizal in behalf of said municipality. 3. ID.; ID.; ID.; PRIVATE COUNSEL'S LACK OF AUTHORITY TO REPRESENT MUNICIPALITY; MAY BE RAISED AT ANY STAGE OF THE PROCEEDINGS; CASE AT BAR. The contention of Atty. Mendiola that private respondent cannot raise for the first time on appeal his lack of authority to represent the municipality is untenable. The legality of his representation can be questioned at any stage of the proceedings. In the cases hereinbefore cited, the issue of lack of authority of private counsel to represent a municipality was only raised for the first time in the proceedings for the collection of attorney's fees for services rendered in the particular case, after the decision in that case had become final and executory and/or had been duly executed. 4. LEGAL AND JUDICIAL ETHICS; ATTORNEY; WHEN SERVICES DEEMED REVOKED; RULE; CASE AT BAR. even assuming that the representation of the municipality by Atty. Mendiola was duly authorized, said authority is deemed to have been revoked by the municipality when the latter, through the municipal mayor
and without said counsel's participation, entered into a compromise agreement with herein private respondent with regard to the execution of the judgment in its favor and thereafter filed personally with the court below two pleadings entitled and constitutive of a "Satisfaction of Judgment" and a "Release and Quitclaim." A client, by appearing personally and presenting a motion by himself, is considered to have impliedly dismissed his lawyer. Herein counsel cannot pretend to be authorized to continue representing the municipality since the latter is entitled to dispense with his services at any time. Both at common law and under Section 26, Rule 138 of the Rules of Court, a client may dismiss his lawyer at any time or at any stage of the proceedings, and there is nothing to prevent a litigant from appearing before the court to conduct his own litigation. (Rustia vs. The Judge of the Court of First Instance of Batangas, et al., 44 Phil. 62 [1922]) 5. ID.; ID.; CLIENT'S RIGHT TO COMPROMISE; MAY NOT BE PREVENTED BY LAWYERS. The client has also an undoubted right to compromise a suit without the intervention of his lawyer. (Rustia vs. The Judge of the Court of First Instance of Batangas, et al., ante; Aro vs. Naawa, et al., L-24163, April 25, 1969, 27 SCRA 1090) Even the lawyers' right to fees from their clients may not be invoked by the lawyers themselves as a ground for disapproving or holding in abeyance the approval of a compromise agreement. The lawyers concerned can enforce their rights in the proper court in an appropriate proceeding in accordance with the Rules of Court, but said rights may not be used to prevent the approval of the compromise agreement. (Jesalva, et al. vs. Bautista, et al., 105 Phi. 348 [1959]; Cabildo, et al. vs. Navarro, et al., L31865, November 26, 1973, 54 SCRA 26) DECISION REGALADO, J p: Petitioner questions and seek the nullification of the resolution of respondent Court of Appeals in CA-G.R. SP. No. 27504 dated March 31, 1992, dismissing the petition for having been filed by a private counsel, as well as its succeeding resolution dated June 9, 1992, denying petitioner's motion for reconsideration. 1 The records show that on March 17, 1989, the Regional Trial Court of Tanay, Rizal, Branch 80, rendered judgment in Civil Case No. 057-T in favor of plaintiff, now herein petitioner Municipality of Pililla, Rizal, against defendant, now herein private respondent Philippine Petroleum Corporation (PPC, for short), ordering therein defendant to pay said plaintiff (1) the amount of P5,301,385.00 representing the tax on business due from the defendant under Section 9(A) of Municipal Tax Ordinance No. 1 of said municipality for the period from 1979 to 1983, inclusive, plus such amount of tax as may accrue until final determination of the case; (2) storage permit fee in the
amount of P3,321,730.00 due from the defendant under Section 10, paragraph Z(13) (b-1-c) of the same municipal tax ordinance for the period from 1975 to 1986, inclusive, plus the amount of said fee that may accrue until final determination of the case; (3) mayor's permit fee due from the defendant under Section 10, paragraph (P) (2) of said municipal tax ordinance from 1975 to 1984, inclusive, in the amount of P12,120.00, plus such amount of the same fee as may accrue until final determination of the case; (4) sanitary inspection fee in the amount of P1,010.00 for the period from 1975 to 1984, plus the amount of this fee that may accrue until final determination of the case; and (5) the costs of suit. 2 On June 3, 1991, in G.R. No. 90776 this Court affirmed the aforesaid judgment, with the modification that business taxes accruing prior to 1976 are not to be paid by PPC because the same have prescribed, and that storage fees are not also to be paid by PPC since the storage tanks are owned by PPC and not by the municipality and, therefore, cannot be the bases of a charge for service by the municipality. 3 This judgment became final and executory on July 13, 1991 and the records were remanded to the trial court for execution. On October 14, 1991, in connection with the execution of said judgment, Atty. Felix E. Mendiola filed a motion in behalf of plaintiff municipality with the Regional Trial Court, Branch 78, Morong Rizal * for the examination of defendant corporation's gross sales for the years 1976 to 1978 and 1984 to 1991 for the purpose of computing the tax on business imposed under the Local Tax Code, as amended. On October 21, 1991, defendant corporation filed a manifestation to the effect that on October 18, 1991, Pililla Mayor Nicomedes Patenia received from it the sum of P11,457,907.00 as full satisfaction of the above-mentioned judgment of the Supreme Court, as evidenced by the release and quitclaim documents executed by said mayor. Accordingly, on October 31, 1991 the court below issued an order denying plaintiff municipality's motion for examination and execution of judgment on the ground that the judgment in question had already been satisfied. 4 Thereafter, on November 21, 1991 Atty. Mendiola filed a motion for reconsideration of the court's aforesaid order of October 31, 1991, claiming that the total liability of defendant corporation to plaintiff municipality amounted to 24,176,599.00, while the amount involved in the release and quitclaim executed by Mayor Patenia was only P12,718,692; and that the said mayor could not waive the balance which represents the taxes due under the judgment to the municipality and over which judgment the law firm of Atty. Mendiola had registered two liens for alleged consultancy services of 25% and attorney's fees of 25% which, when quantified and added, amount to more than P12 million. On January 28, 1992, the trial court denied the aforesaid motion for reconsideration. 5
On February 18, 1992, Atty. Mendiola, again ostensibly in behalf of herein petitioner municipality, filed a petition for certiorari with us, which petition we referred to the Court of Appeals for proper disposition and was docketed therein as CA-G.R. SP No. 27504. 6 On March 2, 1992, respondent PPC filed a motion questioning Atty. Mendiola's authority to represent petitioner municipality. 7 Consequently, on March 31, 1992 respondent Court of Appeals dismissed the petition for having been filed by a private counsel in violation of law and jurisprudence, but without prejudice to the filing of a similar petition by the Municipality of Pililla through the proper provincial or municipal legal officer. 8 Petitioner filed a motion for reconsideration which was denied by the Court of Appeals in its resolution of June 9, 1992. 9 Petitioner is once again before us with the following assignment of error: cdphil "1. It is an error for the Court of Appeals to consider private respondent's new issue raised for the first time on appeal, as it could no longer be considered on appeal, because it was never been (sic) raised in the court below. 2. It is an error for the Court of Appeals in dismissing (sic) the instant petition with alternative remedy of filing similar petition as it is a departure from established jurisprudence. prLL 3. It is an error for the Court of Appeals to rule that the filing of the instant petition by the private counsel is in violation of law and jurisprudence." 10 We find the present petition devoid of merit. The Court of Appeals is correct in holding that Atty. Mendiola has no authority to file a petition in behalf of and in the name of the Municipality of Pililla. The matter of representation of a municipality by a private attorney has been settled in Ramos vs. Court of Appeals, et al., 11 and reiterated in Province of Cebu vs. Intermediate Appellate Court, et al., 12 where we ruled that private attorneys cannot represent a province or municipality in lawsuits. Section 1683 of the Revised Administrative Code provides: cdll "Section 1683. Duty of fiscal to represent provinces and provincial subdivisions in litigation. The provincial fiscal shall represent the province and any municipality or municipal district thereof in any court, except in cases whereof original jurisdiction is vested in the Supreme Court or in cases where the municipality or municipal 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 political division 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." 13
Under the above provision, complemented by Section 3, Republic Act No. 2264, the Local Autonomy Law, 14 only the provincial fiscal and the municipal attorney can represent a province or municipality in their lawsuits. The provision is mandatory. The municipality's authority to employ a private lawyer is expressly limited only to situations where the provincial fiscal is disqualified to represent it. 15 For the aforementioned exception to apply, the fact that the provincial fiscal was disqualified to handle the municipality's case must appear on record. 16 In the instant case, there is nothing in the records to show that the provincial fiscal is disqualified to act as counsel for the Municipality of Pililla on appeal, hence the appearance of herein private counsel is without authority of law. LLpr The submission of Atty. Mendiola that the exception is broad enough to include situations wherein the provincial fiscal refuses to handle the case cannot be sustained. The fiscal's refusal to represent the municipality is not a legal justification for employing the services of private counsel. Unlike a practising lawyer who has the right to decline employment, a fiscal cannot refuse to perform his functions on grounds not provided for by law without violating his oath of office. Instead of engaging the services of a special attorney, the municipal council should request the Secretary of Justice to appoint an acting provincial fiscal in place of the provincial fiscal who has declined to handle and prosecute its case in court, pursuant to Section 1679 of the Revised Administrative Code. 17 It is also significant that the lack of authority of herein counsel. Atty. Mendiola, was even raised by the municipality itself in its comment and opposition to said counsel's motion for execution of his lien, which was filed with the court a quo by the office of the Provincial Prosecutor of Rizal in behalf of said municipality. 18 The contention of Atty. Mendiola that private respondent cannot raise for the first time on appeal his lack of authority to represent the municipality is untenable. The legality of his representation can be questioned at any stage of the proceedings. In the cases hereinbefore cited, 19 the issue of lack of authority of private counsel to represent a municipality was only raised for the first time in the proceedings for the collection of attorney's fees for services rendered in the particular case, after the decision in that case had become final and executory and/or had been duly executed. Furthermore, even assuming that the representation of the municipality by Atty. Mendiola was duly authorized, said authority is deemed to have been revoked by the municipality when the latter, through the municipal mayor and without said counsel's participation, entered into a compromise agreement with herein private respondent with regard to the execution of the judgment in its favor and thereafter filed personally with the court below two pleadings entitled and constitutive of a "Satisfaction of Judgment" and a "Release and Quitclaim." 20
A client, by appearing personally and presenting a motion by himself, is considered to have impliedly dismissed his lawyer. Herein counsel cannot pretend to be authorized to continue representing the municipality since the latter is entitled to dispense with his services at any time. Both at common law and under Section 26, Rule 138 of the Rules of Court, a client may dismiss his lawyer at any time or at any stage of the proceedings, and there is nothing to prevent a litigant from appearing before the court to conduct his own litigation. 21 The client has also an undoubted right to compromise a suit without the intervention of his lawyer. 22 Even the lawyers' right to fees from their clients may not be invoked by the lawyers themselves as a ground for disapproving or holding in abeyance the approval of a compromise agreement. The lawyers concerned can enforce their rights in the proper court in an appropriate proceeding in accordance with the Rules of Court, but said rights may not be used to prevent the approval of the compromise agreement. 23 The apprehension of herein counsel that it is impossible that the municipality will file a similar petition, considering that the mayor who controls its legislative body will not take the initiative, is not only conjectural but without factual basis. Contrary to his pretensions, there is presently a manifestation and motion pending with the trial court filed by the aforesaid municipal mayor for the withdrawal of the "Satisfaction of Judgment" and the "Release and Quitclaim" 24 previously filed in the case therein as earlier mentioned. LLphil WHEREFORE, the petition at bar is DENIED for lack of merit and the judgment of respondent Court of Appeals is hereby AFFIRMED. LexLib SO ORDERED. Narvasa, C.J., Padilla, Puno and Mendoza, JJ., concur. Footnotes 1. Penned by Justice Alicia V. Sempio Diy, with Justices Pedro A. Ramirez and Ricardo P. Galvez concurring. 2. Rollo, CA-G.R. SP. No. 27504, 34. 3. Ibid., id., 46. * No presiding judge having been commissioned as of that date for the Regional Trial Court, Branch 80, Tanay, Rizal, the case was referred to this branch presided over by respondent executive judge of the branches therein (Rollo, CA-G.R. SP. No. 27504, 49-50). 4. Ibid., id., 22. 5. Ibid., id., 23-24. 6. Ibid., id., 92. 7. Ibid., id., 93-94. 8. Ibid., id., 16-28. 9. Ibid., id., 29. 10. Ibid., id., 5. 11. G.R. No. 53766, October 30, 1981, 108 SCRA 728.
12. G.R. No. 72841, January 29, 1987, 147 SCRA 447. 13. The Administrative Code of 1987 (E.O. No. 292) provides: "SEC. 9. Provincial/City Prosecution Offices. The Provincial and City Fiscal's Office established in each of the provinces and cities pursuant to law, is retained and renamed Provincial/City Prosecution Office. It shall be headed by a Provincial Prosecutor or City Prosecutor, as the case may be, assisted by such number of Assistant Provincial/City Prosecutors as fixed and/or authorized by law. The position titles of Provincial and City Fiscal and of Assistant Provincial and City Fiscal are hereby abolished. All provincial/city prosecution offices shall continue to discharge their functions existing law. All provincial and city prosecutors and their assistants shall be appointed by the President upon the recommendation of the Secretary." 14. This section states that the municipal attorney, as the head of the legal division or office of a municipality, "shall act as legal counsel of the municipality and perform such duties and exercise such powers as may be assigned to him by the council." 15. Municipality of Bocaue, et al. vs. Manotok, 93 Phil. 173 (1953); Enriquez, Sr. vs. Gimenez, etc., 107 Phil. 932 (1960); De Guia vs. The Auditor General, et al., L-29824, 44 SCRA 169. 16. De Guia vs. The Auditor General, et al., ante. 17. Enriquez, Sr. vs. Gimenez, etc., supra; De Guia vs. The Auditor General, et al., supra. 18. Rollo, 41-45. 19. Enriquez, Sr. vs. Gimenez, etc., supra; De Guia vs. Auditor General, et al., supra; Province of Cebu vs. Intermediate Appellate Court, et al., supra. 20. Rollo, CA-G.R. SP No. 27504, 59-62. 21. Rustia vs. The Judge of the Court of First Instance of Batangas, et al., 44 Phil. 62 (1922) 22. Rustia vs. The Judge of the Court of First Instance of Batangas, et al., ante; Aro vs. Naawa, et al., L24163, April 28, 1969, 27 SCRA 1090. 23. Jesalva, et al. vs. Bautista, et al., 105 Phil. 348 (1959); Cabildo, et al. vs. Navarro, et al., L-31865, November 26, 1973, 54 SCRA 26. 24. Rollo, 57-59. THIRD DIVISION [G.R. No. 99425. March 3, 1997.] ANTONIO C. RAMOS, ROSALINDA M. PEREZ, NORMA C. CASTILLO and BALIUAG MARKET VENDORS ASSOCIATION, INC., petitioners, vs. COURT OF
APPEALS, HON. CAMILO O. MONTESA, JR., in his capacity as Presiding Judge of the Regional Trial Court of Bulacan, Branch 19, and MUNICIPALITY OF BALIUAG, respondents. DECISION PANGANIBAN, J p: Who has the legal authority to represent a municipality in lawsuits? If an unauthorized lawyer represents a municipality, what is the effect of his participation in the proceedings? Parenthetically, does a motion to withdraw the appearance of the unauthorized counsel have to comply with Rule 15 of the Rules of Court regarding notice and hearing of motions? These questions are answered by this Court in resolving this petition for review under Rule 45 of the Rules of Court of the Decision 1 of public respondent 2 in CA-G.R. SP No. 23594 promulgated on March 15, 1991, which denied due course to and dismissed the petition therein. Also assailed is the Resolution 3 of public respondent promulgated on May 9, 1991, which denied the motion for reconsideration for lack of merit. The Facts The facts as found by public respondent are undisputed, to wit: 4 "On April 18, 1990, petitioners Antonio C. Ramos, Rosalinda M. Perez, Norma C. Castillo, and the Baliuag Market Vendors Association, Inc. filed a petition before the court a quo docketed as Civil Case No. 264-M-9 for the Declaration of Nullity of Municipal Ordinances No. 91 (1976) and No. 7 (1990) and the contract of lease over a commercial arcade to be constructed in the municipality of Baliuag, Bulacan. On April 27, 1980, during the hearing on the petitioners' motion for the issuance of preliminary injunction, the Provincial Fiscal appeared as counsel for respondent Municipality of Baliuag, which opposed the petition. Whereupon, a writ of preliminary injunction was issued by the court a quo on May 9, 1990. Meanwhile, on May 3, 1990, the Provincial Fiscal and the Provincial Attorney, Oliviano D. Regalado, filed an Answer in,(sic) behalf of respondent municipality. At the pre-trial conference scheduled on May 28, 1990, Atty. Roberto B. Romanillos appeared, manifesting that he was counsel for respondent municipality. On the same date, and on June 15, 1990, respectively, Atty. Romanillos filed a motion to dissolve injunction and a motion to admit an Amended Answer with motion to dismiss. On June 18, 1990, Provincial Attorney Oliviano D. Regalado appeared as collaborating counsel of Atty. Romanillos. The Provincial Fiscal did not appear. It was Atty. Romanillos who submitted the Reply to- petitioners' Opposition to respondents' motion to dissolve injunction. It was also Atty. Romanillos who submitted a written formal offer of evidence on July 17, 1990 for respondent municipality.
10
During the hearing on August 10, 1990, petitioners questioned the personality of Atty. Romanillos to appear as counsel of (sic) the respondent municipality, which opposition was reiterated on August 15, 1990, and was put in writing in petitioners' motion of August 20, 1990 to disqualify Atty. Romanillos from appearing as counsel for respondent municipality and to declare null and void the proceedings participated in and undertaken by Atty. Romanillos. Meanwhile, Atty. Romanillos and Atty. Regalado filed a joint motion dated August 22, 1990 stating, among others, that Atty. Romanillos was withdrawing as counsel for respondent municipality and that Atty. Regalado, as his collaborating counsel for respondent municipality, is adopting the entire proceedings participated in/undertaken by Atty. Romanillos. On September 19, 1990 respondent Judge issued the Order now being assailed which, as already stated, denied petitioners' motion to disqualify Atty. Romanillos as counsel for respondent municipality and to declare null and void the proceedings participated in by Atty. Romanillos; and on the other hand, granted Atty. Regalado's motion 'to formally adopt the entire proceedings including the formal offer of evidence'. In support of his foregoing action, respondent Judge reasoned: 'Petitioners' motion for the disqualification of Atty. Romanillos as respondent municipality's counsel is deemed moot and academic in view of his withdrawal as counsel of said municipality pursuant to a joint motion dated August 22, 1990, although he shall remain as counsel on record of private respondent Kristi Corporation. Atty. Oliviano Regalado under the same joint motion moved for the adoption of the entire proceedings conducted by collaborating counsel, Atty. Romanillos. It is noted that Atty. Romanillos initially entered his appearance as collaborating counsel of the Provincial Prosecutor and the Provincial Attorney when he filed a motion to dissolve injunction under motion dated May 30, 1990 and since then despite his active participation in the proceedings, the opposing counsel has never questioned his appearance until after he made a formal offer of evidence for the respondents. The acquiescence of petitioners,' counsel of (sic) his appearance is tantamount to a waiver and petitioners are, therefore, estopped to question the same. In all the pleadings made by Atty. Romanillos, it was clearly indicated that he was appearing as the collaborating counsel of the Provincial Attorney. Besides, petitioners' counsel failed to submit their comment and/or objection to the said joint motion of respondents' counsel as directed by the Court within the reglementary period. By virtue of these circumstances, all the proceedings attended to and participated in by said collaborating counsel is a fait accompli and the Court finds no cogent justification to nullify the same.' Petitioners' motion for reconsideration of the foregoing Order was denied by respondent Judge in his Order dated
October 19, 1990, the second Order now being assailed. Respondent Judge reiterated the observations which he made in the Order of September 19, 1990 that Atty. Romanillos, while actively handling the said case was merely appearing as the collaborating counsel of both the Provincial Prosecutor and the Provincial Attorney of Bulacan; that Atty. Romanillos' appearance was 'never impugned by petitioners' and was only questioned after his (Atty. Romanillos') submission of the formal offer of evidence for respondent; and that therefore, said court proceedings 'is (sic) a fait accompli'. Respondent Judge went on to say that the declaration of nullity of said proceedings and the re-taking of the same evidence by the same parties is (sic) apparently an exercise in futility'. He added that in the absence of untimely objection by petitioners to Atty. Romanillos' appearance as the collaborating counsel, petitioners are guilty of laches for having slept on (sic) their rights and are estopped as their acquiescence may be considered as waiver of such right. Furthermore, according to respondent Judge, assuming that the proceedings had been 'tainted with frailness to render the same legally objectionable', the same has been 'legally remedied' by its formal adoption upon motion of the Provincial Accorney (sic), Atty. Regalado, who is not disqualified to appear as counsel for the municipality of Baliuag, for the reason that by virtue of Section 19 of R.A. No. 5185 (The Decentralization Act of 1967), the authority to act as legal officer/adviser for (sic) civil cases of the province of Bulacan, of which the municipality of Baliuag is a political subdivision, has been transferred from the Provincial Fiscal (now Provincial Prosecutor) of Bulacan to the Provincial Attorney thereof." As earlier stated, the Court of Appeals dismissed the petition and denied the motion for reconsideration. Hence this recourse. The Issues The issues raised by petitioners in their Memorandum are: 5 "1) Under present laws and jurisprudence, can a municipality be represented in a suit against it by a private counsel? 2) If not, what is the status of the proceedings undertaken by an unauthorized private counsel; 3) Can the provincial attorney of a province act as counsel of a municipality in a suit; 4) Can the provincial attorney adopt with legal effect the proceedings undertaken by an unauthorized private counselof (sic) a municipality; 5) May a court act on an alleged motion which violates Sections 4 and 5 of Rule 15 and Section 26, Rule 128 of the Rules of Court." Petitioners contend that the assailed Decision which affirmed the Orders of the trial court is void for being violative of the following laws: 6
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"VI-1 The respondent court violated Section 1683 of the Revised Administrative Code; Section 3, paragraph 3 (a) of Republic Act No. 2264, otherwise known as the Local Autonomy Act; and Section 35; Book IV, Title III, Chapter 12, Administrative Code of 1987 (Executive Order No. 292) when it authorized Atty. Oliviano D. Regalado, the Provincial Attorney of Bulacan, to appear as counsel for respondent Municipality of Baliuag. VI-2 The respondent court violated Section 1683 of the Revised Administrative Code; Section 3, paragraph 3 (a) of Republic Act No. 2264, otherwise known as the Local Autonomy Act; Section 35, Book IV, Title III, Chapter 12, Executive Order No. 292, otherwise known as the Administrative Code of 1987; and Article 1352 of the New Civil Code, when it denied the petitioners' motion to declare the proceedings undertaken or participated in by said Atty. Roberto B. Romanillos, as private counsel of respondent Municipality, null and void. VI-3 The respondent court acted in excess of its jurisdiction and in grave abuse of discretion when it acted and granted the respondent's JOINT MOTION dated August 22, 1990 (Annex 'H') which, as a rule, is a mere worthless piece of paper which the respondent judge/court has no authority to act upon, considering that said motion was filed in court in patent violation of or without complying with the mandatory requirements provided for by Sections 4 and 5 of Rule 15 and Section 26 of Rule 138 of the Rules of Court." Public respondent did not give due course to the petition "because it does not prima facie show justifiable grounds for the issuance of certiorari." 7 Public respondent adds that: 8 "Considering the foregoing jurisprudence, the logical conclusion is that the Provincial Attorney of Bulacan has now the authority to represent the municipality of Baliuag in its law suits. It follows that respondent Judge was correct in ruling in the assailed Order of October 19, 1990 that even assuming, arguendo, that the proceedings by the court a quo which had been participated in by Atty. Romanillos are legally objectionable, this was legally remedied by the formal adoption by the provincial Attorney, Atty. Regalado, of the said proceedings, considering that the provincial attorney is not disqualified from representing the municipality of Baliuag in civil cases. In the second place, the record discloses that Atty. Romanillos had appeared as counsel for respondent municipality of Baliuag in collaboration with the Provincial Prosecutor and the Provincial Attorney, as shown in the motion to dissolve injunction dated May 28, 1990 which Atty. Romanillos had filed for respondent municipality. Accordingly and pursuant to the aforecited provisions of law, it cannot correctly be said that respondent Judge had acted with grave abuse of discretion when he allowed Atty. Romanillos to act as private counsel and Atty. Regalado,
Provincial Attorney of Bulacan, to appear as counsel for respondent Municipality of Baliuag. Perforce, it also cannot be correctly said that respondent Judge violated the aforecited provisions when he denied petitioners' motion to declare null and void the proceedings undertaken by and participated in by Atty. Romanillos as private counsel of the municipality of Baliuag. At any rate, even granting, only for the sake of argument, that Atty. Romanillos' appearance as counsel for the municipality could not be legally authorized under the aforesaid provisions of law, the fact that Atty. Regalado as Provincial Attorney of Baliuag had formally adopted the proceedings participated in by Atty. Romanillos as counsel for the municipality of Baliuag had served, as already stated, to cure such a defect. llcd Thirdly, We are likewise unable to see grave abuse of discretion in respondent Judge's actuation in granting the joint motion filed by Atty. Romanillos and Atty. Regalado for the withdrawal of the former as private counsel of respondent municipality, and the adoption by the latter of the proceedings participated in/undertaken by the former, including the formal offer of evidence submitted by the former." Public respondent likewise found that the "joint motion does not partake of the nature of an adversarial motion which would have rendered non-compliance with Sections 4 and 5 of Rule 15 of the Rules of Court fatal to the motion." 9 It is to be emphasized that petitioners "sought the disqualification of Atty. Romanillos . . . (Thus,) what petitioners had sought to (be) achieve(d) in their said motion was in fact what Atty. Romanillos had sought . . . in the joint motion dated August 22, 1990." 10 Respondent municipality submits that Section 19 of RA 5185: "is not meant to prohibit or prevent the Provincial Attorney to act as legal adviser and legal officer for municipalities and municipal districts because such interpretations would be to say the least, absurb (sic). In this jurisdiction, a province is composed of municipalities and municipal districts, and therefore they are deemed included in the provisions of Section 19 of Republic Act 5185. It is also impractical and contrary to the spirit of the law to limit the sphere of authority of the Provincial Attorney to the province only. " 11 The different allegations boil down to three main issues: (1) Who is authorized to represent a municipality in a civil suit against it? (2) What is the effect on the proceedings when a private counsel represents a municipality? Elsewise stated, may the proceedings be validated by a provincial attorney's adoption of the actions made by a private counsel? (3) Does a motion of withdrawal of such unauthorized appearance, and adoption of proceedings participated in by such counsel have to comply with Sections 4 and 5 12 of Rule 15 of the Rules of Court? The Court's Ruling
12
We affirm the Decision and Resolution of public respondent. First Issue: Who Is Authorized to Represent a Municipality in Its Lawsuits? In the recent case of Municipality of Pililla, Rizal vs. Court of Appeals, 13 this Court, through Mr. Justice Florenz D. Regalado, set in clear-cut terms the answer to the question of who may legally represent a municipality in a suit for or against it, thus: 14 ". . . The matter of representation of a municipality by a private attorney has been settled in Ramos vs. Court of Appeals, et al., 15 and reiterated in Province of Cebu vs. Intermediate Appellate Court, et al., 16 where we ruled that private attorneys cannot represent a province or municipality in lawsuits. Section 1683 of the Revised Administrative Code provides: 'Section 1683. Duty of fiscal to represent provinces and provincial subdivisions in litigation. The provincial fiscal shall represent the province and any municipality or municipal district thereof in any court, except in cases whereof (sic) original jurisdiction is vested in the Supreme Court or in cases where the municipality or municipal 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 political division 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.' 17 Under the above provision, complemented by Section 3, Republic Act No. 2264, the Local Autonomy Law, 18 only the provincial fiscal and the municipal attorney can represent a province or municipality in their lawsuits. The provision is mandatory. The municipality's authority to employ a private lawyer is expressly limited only to situations where the provincial fiscal is disqualified to represent it. 19 For the aforementioned exception to apply, the fact that the provincial fiscal was disqualified to handle the municipality's case must appear on record. 20 In the instant case, there is nothing in the records to show that the provincial fiscal is disqualified to act as counsel for the Municipality of Pililla on appeal, hence the appearance of herein private counsel is without authority of law." The provincial fiscal's functions as legal officer and adviser for the civil cases of a province and corollarily, of the municipalities thereof, were subsequently transferred to the provincial attorney. 21 The foregoing provisions of law and jurisprudence show that only the provincial fiscal, provincial attorney, and municipal attorney should represent a municipality in its lawsuits. Only in exceptional instances may a private attorney be hired by a municipality to represent it in lawsuits. These exceptions are enumerated in the case of
Alinsug vs. RTC Br. 58, San Carlos City, Negros Occidental, 22 to wit: 23 "Indeed, it appears that the law allows a private counsel to be hired by a municipality only when the municipality is an adverse party in a case involving the provincial government or another municipality or city within the province. This provision has its apparent origin in the ruling in De Guia v. The Auditor General (44 SCRA 169, March 29, 1979) where the Court held that the municipality's authority to employ a private attorney is expressly limited only to situations where the provincial fiscal would be disqualified to serve and represent it. With Sec. 1683 of the old Administrative Code as legal basis, the Court therein cited Enriquez, Sr. v. Gimenez [107 Phil. 932 (1960)] which enumerated instances when the provincial fiscal is disqualified to represent in court a particular municipality; if and when original jurisdiction of case involving the municipality is vested in the Supreme Court, when the municipality is a party adverse to the provincial government or to some other municipality in the same province, and when, in a case involving the municipality, he, or his wife, or child, is pecuniarily involved, as heir legatee, creditor or otherwise. Thereafter, in Ramos vs. Court of Appeals (108 SCRA 728, October 30, 1981), the Court ruled that a municipality may not be represented by a private law firm which had volunteered its services gratis, in collaboration with the municipal attorney and the fiscal, as such representation was violative of Sec. 1683 of the old Administrative Code. This strict coherence to the letter of the law appears to have been dictated by the fact that 'the municipality should not be burdened with expenses of hiring a private lawyer' and that the interests of the municipality would be best protected if a government lawyer handles its litigations."' (Emphasis supplied.) None of the foregoing exceptions is present in this case. It may be said that Atty. Romanillos appeared for respondent municipality inasmuch as he was already counsel of Kristi Corporation which was sued with respondent municipality in this same case. The order of the trial court dated September 19, 1990, stated that Atty. Romanillos "entered his appearance as collaborating counsel of the provincial prosecutor and the provincial attorney." 24 This collaboration is contrary to law and hence should not have been recognized as legal. It has already been ruled in this wise: "The fact that the municipal attorney and the fiscal are supposed to collaborate with a private law firm does not legalize the latter's representation of the municipality of Hagonoy in Civil Case No. 5095-M. While a private prosecutor is allowed in criminal cases, an analogous arrangement is not allowed in civil cases wherein a municipality is the plaintiff." 25 As already stated, private lawyers may not represent municipalities on their own. Neither may they do so even in collaboration with authorized government lawyers. This is
13
anchored on the principle that only accountable public officers may act for and in behalf of public entities and that public funds should not be expended to hire private lawyers. Petitioners cannot be held in estoppel for questioning the legality of the appearance of Atty. Romanillos, notwithstanding that they questioned the witnesses of respondent municipality during the hearing of its motion to dissolve the preliminary injunction. Municipality of Pililla, Rizal vs. Court of Appeals 26 held that the legality of the representation of an unauthorized counsel may be raised at any stage of the proceedings. This Court stated that: 27 "The contention of Atty. Mendiola that private respondent cannot raise for the first time on appeal his lack of authority to represent the municipality is untenable. The legality of his representation can be questioned at any stage of the proceedings. In the cases hereinbefore cited, the issue of lack of authority of private counsel to represent a municipality was only raised for the first time in the proceedings for the collection of attorney's fees for services rendered in the particular case, after the decision in that case had become final and executory and/or had been duly executed." Elementary fairness dictates that parties unaware of the unauthorized representation should not be held in estoppel just because they did not question on the spot the authority of the counsel for the municipality. The rule on appearances of a lawyer is that "(u)ntil the contrary is clearly shown, an attorney is presumed to be acting under authority of the litigant whom he purports to represent.(Azotes v. Blanco, 78 Phil. 739) His authority to appear for and represent petitioner in litigation, not having been questioned in the lower court, it will be presumed on appeal that counsel was properly authorized to file the complaint and appear for his client. (Republic v. Philippine Resources Development Corporation, 102 Phil. 960)" 28 Second Issue: Effect on Proceedings by Adoption of Unauthorized Representation Would the adoption by Atty. Regalado of the proceedings participated in by Atty. Romanillos validate such proceedings? We agree with public respondent that such adoption produces validity. Public respondent stated the reasons 29 to which we agree: "Moreover, it does not appear that the adoption of proceedings participated in or undertaken by Atty. Romanillos when he was private counsel for the respondent municipality of Baliuag such as the proceedings on the motion to dissolve the injunction, wherein petitioners had even cross-examined the witnesses presented by Atty. Romanillos in support of said motion and had even started to present their witnesses to sustain their objection to the motion would have resulted in any substantial prejudice to petitioners' interest. As We see it, to declare the said proceedings null and void notwithstanding the formal
adoption thereof by Atty. Regalado as Provincial Attorney of Bulacan who is authorized to represent respondent municipality of Baliuag in court and to require trial anew to cover the same subject matter, to hear the same witnesses and to admit the same evidence adduced by the same parties cannot enhance the promotion of justice." This Court believes that conferring legitimacy to the appearance of Atty. Romanillos would not cause substantial prejudice on petitioners. Requiring new trial on the mere legal technicality that the municipality was not represented by a legally authorized counsel would not serve the interest of justice. After all, this Court does not see any injustice committed against petitioners by the adoption of the work of private counsel nor any interest of justice being served by requiring retrial of the case by the duly authorized legal representative of the town. In sum, although a municipality may not hire a private lawyer to represent it in litigations, in the interest of substantial justice however, we hold that a municipality may adopt the work already performed in good faith by such private lawyer, which work is beneficial to it (1) provided that no injustice is thereby heaped on the adverse party and (2) provided further that no compensation in any guise is paid therefor by said municipality to the private lawyer. Unless so expressly adopted, the private lawyer's work cannot bind the municipality. Third Issue: "Joint Motion" Need Not Comply with Rule 15 We also agree with the justification of public respondent that a motion to withdraw the appearance of an unauthorized lawyer is a non-adversarial motion that need not comply with Section 4 of Rule 15 as to notice to the adverse party. The disqualification of Atty. Romanillos was what petitioners were really praying for when they questioned his authority to appear for the municipality. The disqualification was granted, thereby serving the relief prayed for by petitioners. Such being the case, no "notice directed to the parties concerned and served at least 3 days before the hearing thereof" 30 need be given petitioners, the questioned motion not being contentious. Besides, what petitioners were questioning as to lack of authority was remedied by the adoption of proceedings by an authorized counsel, Atty. Regalado. The action of the trial court allowing the motion of respondent municipality effectively granted petitioners' motion to disqualify Atty. Romanillos. In People vs. Leviste, 31 we ruled that: "While it is true that any motion that does not comply with the requirements of Rule 15 should not be accepted for filing and, if filed, is not entitled to judicial cognizance, this Court has likewise held that where a rigid application of the rule will result in a manifest failure or miscarriage of justice, technicalities may be disregarded in order to resolve the case. Litigations should, as much as possible, be decided on the merits and not on technicalities. As this Court held in Galvez vs. Court of Appeals, an order of the court granting the motion to dismiss despite the absence of
14
a notice of hearing, or proof of service thereof, is merely an irregularity in the proceedings . . . (which) cannot deprive a competent court of jurisdiction over the Case."'(citations omitted). It should be remembered that rules of procedure are but tools designed to facilitate the attainment of justice, such that when rigid application of the rules tend to frustrate rather than promote substantial justice, this Court is empowered to suspend their operation. 32 WHEREFORE, premises considered, the Petition is DENIED and the assailed Decision and Resolution are AFFIRMED. No costs. cda SO ORDERED. Narvasa, C .J ., Davide, Jr., Melo, and Francisco, JJ ., concur. Footnotes 1. Rollo, pp. 28-35. 2. Eighth Division composed of Justice Lorna S. Lombos-De La Fuente, ponente, and Justices Alfredo M. Marigomen and Jainal D. Rasul, concurring. 3. Rollo, p. 37. 4. Ibid., pp. 28-31. 5. Ibid. p. 212. 6. Ibid., pp. 10-11. 7. Ibid., p. 31. 8. Ibid., pp. 33-34. 9. Ibid. p. 34. 10. Ibid. 11. Ibid., pp. 166-167. 12. "Section 4. Notice. Notice of a motion shall be served by the applicant to all parties concerned, at least three (3) days before the hearing thereof, together with a copy of the motion, and of any affidavits and other papers accompanying it. The court, however, for good cause may hear a motion on shorter notice, specially on matters which the court may dispose of on its own motion." "Section 5. Contents of notice. The notice shall be directed to the parties concerned, and shall state the time and place for the hearing of the motion." 13. 233 SCRA 484, June 28, 1994. 14. At pp. 490-491. 15. 108 SCRA 728, October 30, 1981. 16. 147 SCRA 447, January 29, 1987. 17. The Administrative Code of 1987 (E.O. No. 292) provides: "SEC. 9. Provincial/City Prosecution Offices. The Provincial and City Fiscal's Office established in each of the provinces and cities pursuant to law, is retained and renamed Provincial/City Prosecution Office. It shall be headed by a Provincial Prosecutor or City Prosecutor, as the case may be, assisted by such number of Assistant Provincial/City Prosecutors as fixed and/or authorized by law. The position titles of Provincial
and City Fiscal and of Assistant Provincial and City Fiscal are hereby abolished. All provincial/city prosecution offices shall continue to discharge their functions under existing law. All provincial and city prosecutors and their assistants shall be appointed by the President upon the recommendation of the Secretary." 18. This section states that the municipal attorney, as the head of the legal division or office of a municipality, "shall act as legal counsel of the municipality and perform such duties and exercise such powers as may be assigned to him by the council." 19. Municipality of Bocaue, et al. vs. Manotok, 93 Phil. 173 (1953); Enriquez, Sr. vs. Gimenez, etc., 107 Phil. 932 (1960); De Guia vs. The Auditor General, et al., 44 SCRA 169, March 29, 1972. 20. De Guia vs. The Auditor General, et al., ante. 21. Section 19 of RA 5185, provides: "SEC. 19. Creation of Positions of Provincial Attorney and City Legal Officer. To enable the provincial and city governments to avail themselves of the full time and trusted services of legal officers, the positions of provincial attorney and city legal officer may be created and such officer shall be appointed in such manner as is provided for under Section four of this Act. For this purpose the functions hitherto performed by the provincial and city fiscals in serving as legal adviser and officer for civil cases of the province and city shall be transferred to the provincial attorney and city legal officer, respectively." 22. 225 SCRA 553, August 23, 1993. 23. At pp. 557-559. 24. Rollo, p. 30. 25. Ramos vs. Court of Appeals, supra, at p. 733. 26. Supra. 27. At p. 492. 28. Province of Cebu vs. Intermediate Appellate Court, 147 SCRA 447, 458, January 29, 1987. 29. Ibid., p. 34. 30. Rollo, p. 17. Actually, the "joint motion" included a notice of hearing (see rollo, p. 97) The records do not show whether the motion was served three (3) days prior to the hearing. However, the presumption of regularity in the performance of official duty (Section 3 [m] of Rule 131 of the Rules of Court) causes us to assume it was served on time. The apparent defect in the motion is its failure to state the "time" of hearing as required by Section 5, Rule 15 of the Rules of Court. 31. 255 SCRA 238, 247-248, March 28, 1996. 32. Buan vs. Court of Appeals, 235 SCRA 424, 431, August 17, 1994; citing cases. EN BANC
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[G.R. No. L-23052. January 29, 1968.] CITY OF MANILA, petitioner, vs. GENERO M. TEOTICO and THE COURT OF APPEALS, respondents. City Fiscal Manuel T. Reyes for petitioner. Sevilla, Daza & Associates for respondents. SYLLABUS 1. STATUTORY CONSTRUCTION; SPECIFIC PROVISIONS OF CIVIL CODE, THOUGH A GENERAL LAW, PREVAIL OVER MANILA CHARTER, SPECIAL LAW. Insofar as its territorial application is concerned, Republic Act 409 is a special law and the Civil Code is a general legislation; but as regards the subject-matter of the provisions of sec. 4, Rep. Act 409 and Article 2189 of the Civil Code, the former establishes a general rule regulating the liability of the City of Manila for damages or injury to persons or property arising from the failure of city officers to enforce the provisions of said Act; while article 2189 of the Civil Code constitutes a particular prescription making provinces, cities and municipalities liable for damages for the death or injury suffered by any person by reason of the defective condition of roads, streets and other public works under the control or supervision of said municipal governments. In other words, sec. 4 of Rep. Act 409 refers to liability arising from negligence in general regardless of the object thereof, whereas Article 2189 of the Civil Code, governs liability due to defective streets in particular. The Civil Code is decisive herein because the present action is based on the alleged defective condition of a road. 2. PLEADINGS; ANSWER; ALLEGATIONS NOT SET FORTH IN ANSWER, CANNOT BE RAISED FOR FIRST TIME ON APPEAL. The assertion that P. Burgos Avenue is a national highway for which the City of Manila is not liable, was made for the first time in the petitioner's motion for reconsideration of the decision of the Court of Appeals. It was not alleged in the answer. Such assertion raised a question of fact which had not been put in issue in the trial court and cannot, therefore, be raised for the first time on appeal much less after the rendition of the decision of the appellate court. 3. ID.; FINDINGS OF FACT OF COURT OF APPEALS, CONCLUSIVE. The determination of whether or not P. Burgos Avenue is under the control or supervision of the City of Manila and whether the latter is guilty of negligence in connection with the maintenance of said road is a question of fact a question already decided by the Court of Appeals and the factual findings of said Court are not subject to a review by the Supreme Court. DECISION CONCEPCION, C.J p:
Appeal by certiorari from a decision of the Court of Appeals. On January 27, 1958, at about 8:00 p.m., Genaro N. Teotico was at the corner of the Old Luneta and P. Burgos Avenue, Manila, within a "loading and unloading" zone, waiting for a jeepney to take him down town. After waiting for about five minutes, he managed to hail a jeepney that came along to a stop. As he stepped down from the curb to board the jeepney, and took a few steps, he fell inside an uncovered and unlighted catchbasin or manhole on P. Burgos Avenue. Due to the fall, his head hit the rim of the manhole breaking his eyeglasses and causing broken pieces thereof to pierce his left eyelid. As blood flowed therefrom, impairing his vision, several persons came to his assistance and pulled him out of the manhole. One of them brought Teotico to the Philippine General Hospital, where his injuries were treated, after which he was taken home. In addition to the lacerated wound in his left upper eyelid, Teotico suffered contusions on the left thigh, the left upper arm, the right leg and the upper lip, apart from an abrasion on the right infra-patella region. These injuries and the allergic eruptions caused by anti-tetanus injections administered to him in the hospital, required further medical treatment by a private practitioner who charged therefor P1,400.00. As a consequence of the foregoing occurrence, Teotico filed, with the Court of First Instance of Manila, a complaint which was, subsequently, amended for damages against the City of Manila, its mayor, city engineer, city health officer, city treasurer and chief of police. As stated in the decision of the trial court, and quoted with approval by the Court of Appeals, "At the time of the incident, plaintiff was a practicing public accountant, a businessman and a professor at the University of the East. He held responsible positions in various business firms like the Philippine Merchandising Co., the A. U. Valencia and Co., the Silver Swan Manufacturing Company and the Sincere Packing Corporation. He was also associated with several civic organizations such as the Wack Wack Golf Club, the Chamber of Commerce of the Philippines, Y's Men Club of Manila and the Knight's of Rizal. As a result of the incident, plaintiff was prevented from engaging in his customary occupation for twenty days. Plaintiff has lost a daily income of about P50.00 during his incapacity to work. Because of the incident, he was subjected to humiliation and ridicule by his business associates and friends. During the period of his treatment, plaintiff was under constant fear and anxiety for the welfare of his minor children since he was their only support. Due to the filing of this case, plaintiff has obligated himself to pay his counsel the sum of P2,000.00. "On the other hand, the defense presented evidence, oral and documentary, to prove that the Storm Drain Section, Office of the City Engineer of Manila, received a report of the uncovered condition of a catchbasin at the corner of P.
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Burgos and Old Luneta Streets, Manila, on January 24, 1958, but the same was covered on the same day (Exhibit 4); that again the iron cover of the same catchbasin was reported missing on January 30, 1958, but the said cover was replaced the next day (Exhibit 5); that the Office of the City Engineer never received any report to the effect that the catchbasin in question was not covered between January 25 and 29, 1958; that it has always been a policy of the said office, which is charged with the duty of installation, repair and care of storm drains in the City of Manila, that whenever a report is received from whatever source of the loss of a catchbasin cover, the matter is immediately attended to, either by immediately replacing the missing cover or covering the catchbasin with steel matting; that because of the lucrative scrap iron business then prevailing, stealing of iron catchbasin covers was rampant; that the Office of the City Engineer has filed complaints in court resulting from theft of said iron covers; that in order to prevent such thefts, the city government has changed the position and layout of catch basins in the City by constructing them under the sidewalk with concrete cement covers and openings on the sides of the gutter; and that these changes had been undertaken by the city from time to time whenever funds were available." After appropriate proceedings the Court of First Instance of Manila rendered the aforementioned decision sustaining the theory of the defendants and dismissing the amended complaint, without costs. On appeal taken by plaintiff, this decision was affirmed by the Court of Appeals, except insofar as the City of Manila is concerned, which was sentenced to pay damages in the aggregate sum of P6,750.00. 1 Hence, this appeal by the City of Manila. The first issue raised by the latter is whether the present case is governed by Section 4 of Republic Act No. 409 (Charter of the City of Manila) reading: "The city shall not be liable or held for damages or injuries to persons or property arising from the failure of the Mayor, the Municipal Board, or any other city officer, to enforce the provisions of this chapter, or any other law or ordinance, or from negligence of said Mayor, Municipal Board, or other officers while enforcing or attempting to enforce said provisions." or by Article 2189 of the Civil Code of the Philippines, which provides: "Provinces, cities and municipalities shall be liable for damages for the death of, or injuries suffered by, any person by reason of the defective condition of roads, streets, bridges, public buildings, and other public works under their control or supervision." Manila maintains that the former provision should prevail over the latter, because Republic Act 409 is a special law, intended exclusively for the City of Manila, whereas the Civil Code is a general law, applicable to the entire Philippines.
The Court of Appeals, however, applied the Civil Code, and, we think, correctly. It is true that, insofar as its territorial application is concerned, Republic Act No. 409 is a special law and the Civil Code a general legislation; but, as regards the subject- matter of the provisions above quoted, Section 4 of Republic Act 409 establishes a general rule regulating the liability of the City of Manila for "damages or injury to persons or property arising from the failure of" city officers "to enforce the provisions of" said Act "or any other law or ordinance, or from negligence" of the city "Mayor, Municipal Board, or other officers while enforcing or attempting to enforce said provisions." Upon the other hand, Article 2189 of the Civil Code constitutes a particular prescription making "provinces, cities and municipalities . . . liable for damages for the death of, or injury suffered by, any person by reason" specifically "of the defective condition of roads, streets, bridges, public buildings, and other public works under their control or supervision." In other words, said section 4 refers to liability arising from negligence, in general, regardless of the object thereof, whereas Article 2189 governs liability due to "defective streets, "in particular. Since the present action is based upon the alleged defective condition of a road, said Article 2189 is decisive thereon. It is urged that the City of Manila cannot be held liable to Teotico for damages: 1) because the accident involving him took place in a national highway; and 2) because the City of Manila has not been negligent in connection therewith. As regards the first issue, we note that it is based upon an allegation of fact not made in the answer of the City. Moreover, Teotico alleged in his complaint, as well as in his amended complaint, that his injuries were due to the defective condition of a street which is "under the supervision and control" of the City. In its answer to the amended complaint, the City, in turn, alleged that "the streets aforementioned were and have been constantly kept in good condition and regularly inspected and the storm drains and manholes thereof covered, by the defendant City and its officers concerned" who "have been ever vigilant and zealous in the performance of their respective functions and duties as imposed upon them by law." Thus, the City had, in effect, admitted that P. Burgos Avenue was and is under its control and supervision. Moreover, the assertion to the effect that said avenue is a national highway was made, for the first time, in its motion for reconsideration of the decision of the Court of Appeals. Such assertion raised, therefore, a question of fact, which had not been put in issue in the trial court, and can not be set up, for the first time, on appeal, much less after the rendition of the decision of the appellate court, in a motion for the reconsideration thereof. At any rate, under Article 2189 of the Civil Code, it is not necessary for the liability therein established to attach that the defective roads or streets belong to the province, city or municipality from which responsibility is exacted.
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What said article requires is that the province, city or municipality have either "control or supervision" over said street or road. Even if P. Burgos avenue were, therefore, a national highway, this circumstance would not necessarily detract from its "control or supervision" by the City of Manila, under Republic Act 409. In fact Section 18(x) thereof provides: "SEC. 18. Legislative powers. The Municipal Board shall have the following legislative powers: xxx xxx xxx "(x) Subject to the provisions of existing law to provide for the laying out, construction and improvement, and to regulate the use of streets, avenues, alleys, sidewalks, wharves, piers, parks, cemeteries, and other public places; to provide for lighting, cleaning, and sprinkling of streets and public places; . . . to provide for the inspection of, fix the license fees for and regulate the openings in the same for the laying of gas, water, sewer and other pipes, the building and repair of tunnels, sewers, and drains, and all structures in and under the same and the erecting of poles and the stringing of wires therein; to provide for and regulate cross-walks, curbs, and gutters therein; . . . to regulate traffic and sales upon the streets and other public places; to provide for the abatement of nuisances in the same and punish the authors or owners thereof; to provide for the construction and maintenance, and regulate the use, of bridges, viaducts, and culverts; to prohibit and regulate ball playing, kiteflying, hoop rolling, and other amusements which may annoy persons using the streets and public places, or frighten horses or other animals; to regulate the speed of horses and other animals, motor and other vehicles, cars, and locomotives within the limits of the city; to regulate the lights used on all such vehicles, cars, and locomotives; . . . to provide for and change the location, grade, and crossing of railroads, and compel any such railroad to raise or lower its tracks to conform to such provisions or changes; and to require railroad companies to fence their property, or any part thereof, to provide suitable protection against injury to persons or property, and to construct and repair ditches, drains, sewers, and culverts along and under their tracts, so that the natural drainage of the streets and adjacent property shall not be obstructed." This authority has been neither withdrawn nor restricted by Republic Act No. 917 and Executive Order No. 113, dated May 2, 1955, upon which the City relies. Said Act governs the disposition or appropriation of the highway funds and the giving of aid to provinces, chartered cities and municipalities in the construction of roads and streets within their respective boundaries, and Executive Order No. 113 merely implements the provisions of said Republic Act No. 917, concerning the disposition and appropriation of the highway funds. Moreover, it provides that "the construction, maintenance and improvement of national primary, national secondary and national aid provincial and
city roads shall be accomplished by the Highway District Engineers and Highway City Engineers under the supervision of the Commissioner of Public Highways and shall be financed from such appropriations as may be authorized by the Republic of the Philippines in annual or special appropriation Acts." Then, again, the determination of whether or not P. Burgos Avenue is under the control or supervision of the City of Manila and whether the latter is guilty of negligence, in connection with the maintenance of said road, which were decided by the Court of Appeals in the affirmative, is one of fact, and the findings of said Court, thereon are not subject to our review. WHEREFORE, the decision appealed from should be as it is hereby affirmed, with costs against the City of Manila. It is so ordered. Reyes, J.B.L., Dizon, Makalintal, Bengzon, J.P., Zaldivar, Sanchez, Ruiz Castro, Angeles and Fernando, JJ., concur. Footnotes 1. Medical fees-P1,400.00; Lost income-P350.00; Moral damages-P3,000.000; and Attorney fees-P2,000.00. SECOND DIVISION [G.R. No. 71049. May 29, 1987.] BERNARDINO MANILA and respondents. DECISION PARAS, J p: This is a petition for review on certiorari of : (1) the decision * of the Intermediate Appellate Court in AC-G.R. No. 013887-CV Bernardino Jimenez v. Asiatic Integrated Corporation and City of Manila, reversing the decision ** of the Court of First Instance of Manila, Branch XXII in Civil Case No. 96390 between the same parties, but only insofar as holding Asiatic Integrated Corporation solely liable for damages and attorney's fees instead of making the City of Manila jointly and solidarily liable with it as prayed for by the petitioner and (2) the resolution of the same Appellate Court denying his Partial Motion for Reconsideration (Rollo, p. 2). The dispositive portion of the Intermediate Appellate Court's decision is as follows: "WHEREFORE, the decision appealed from is hereby REVERSED. A new one is hereby entered ordering the defendant Asiatic Integrated Corporation to pay the plaintiff P221.90 actual medical expenses, P900.00 for the amount paid for the operation and management of a school bus, P20,000.00 as moral damages due to pains, sufferings and sleepless nights and P10,000.00 as attorney's fees. JIMENEZ, petitioner, vs. CITY OF INTERMEDIATE APPELLATE COURT,
18
SO ORDERED." (p. 20, Rollo) The findings of respondent Appellate Court are as follows: The evidence of the plaintiff (petitioner herein) shows that in the morning of August 15, 1974 he, together with his neighbors, went to Sta. Ana public market to buy "bagoong" at the time when the public market was flooded with ankle deep rainwater. After purchasing the "bagoong" he turned around to return home but he stepped on an uncovered opening which could not be seen because of the dirty rainwater, causing a dirty and rusty four inch nail, stuck inside the uncovered opening, to pierce the left leg of plaintiff-petitioner penetrating to a depth of about one and a half inches. After administering first aid treatment at a nearby drugstore, his companions helped him hobble home. He felt ill and developed fever and he had to be carried to Dr. Juanita Mascardo. Despite the medicine administered to him by the latter, his left leg swelled with great pain. He was then rushed to the Veterans Memorial Hospital where he had to be confined for twenty (20) days due to high fever and severe pain. Upon his discharge from the hospital, he had to walk around with crutches for fifteen (15) days. His injury prevented him from attending to the school buses he is operating. As a result, he had to engage the services of one Bienvenido Valdez to supervise his business for an aggregate compensation of nine hundred pesos (P900.00). (Decision, AC-G.R. CV No. 01387, Rollo, pp. 13-20). LexLib Petitioner sued for damages the City of Manila and the Asiatic Integrated Corporation under whose administration the Sta. Ana Public Market had been placed by virtue of a Management and Operating Contract (Rollo, p. 47). The lower court decided in favor of respondents, the dispositive portion of the decision reading: "WHEREFORE, judgment is hereby rendered in favor of the defendants and against the plaintiff dismissing the complaint with costs against the plaintiff. For lack of sufficient evidence, the counterclaims of the defendants are likewise dismissed." (Decision, Civil Case No. 96390, Rollo, p. 42). As above stated, on appeal, the Intermediate Appellate Court held the Asiatic Integrated Corporation liable for damages but absolved respondent City of Manila. Hence this petition. The lone assignment of error raised in this petition is on whether or not the Intermediate Appellate Court erred in not ruling that respondent City of Manila should be jointly and severally liable with Asiatic Integrated Corporation for the injuries petitioner suffered. In compliance with the resolution of July 1, 1985 of the First Division of this Court (Rollo, p. 29) respondent City of Manila filed its comment on August 13, 1985 (Rollo, p. 34) while petitioner filed its Reply on August 21, 1985 (Rollo, p. 51).
Thereafter, the Court in the resolution of September 11, 1985 (Rollo, p. 62) gave due course to the petition and required both parties to submit simultaneous memoranda. Petitioner filed his memorandum on October 1, 1985 (Rollo, p. 65) while respondent filed its memorandum on October 24, 1985 (Rollo, p. 82). In the resolution of October 13, 1986, this case was transferred to the Second Division of this Court, the same having been assigned to a member of said Division (Rollo, p. 92). The petition is impressed with merit. As correctly found by the Intermediate Appellate Court, there is no doubt that the plaintiff suffered injuries when he fell into a drainage opening without any cover in the Sta. Ana Public Market. Defendants do not deny that plaintiff was in fact injured although the Asiatic Integrated Corporation tries to minimize the extent of the injuries, claiming that it was only a small puncture and that as a war veteran, plaintiff's hospitalization at the War Veteran's Hospital was free. (Decision, AC-G.R. CV No. 01387, Rollo, p. 6). Cdpr Respondent City of Manila maintains that it cannot be held liable for the injuries sustained by the petitioner because under the Management and Operating Contract, Asiatic Integrated Corporation assumed all responsibility for damages which may be suffered by third persons for any cause attributable to it. It has also been argued that the City of Manila cannot be held liable under Article 1, Section 4 of Republic Act No. 409 as amended (Revised Charter of Manila) which provides: "The City shall not be liable or held for damages or injuries to persons or property arising from the failure of the Mayor, the Municipal Board, or any other City Officer, to enforce the provisions of this chapter, or any other law or ordinance, or from negligence of said Mayor, Municipal Board, or any other officers while enforcing or attempting to enforce said provisions." This issue has been laid to rest in the case of City of Manila v. Teotico (22 SCRA 269-272 [1968]) where the Supreme Court squarely ruled that Republic Act No. 409 establishes a general rule regulating the liability of the City of Manila for "damages or injury to persons or property arising from the failure of city officers" to enforce the provisions of said Act, "or any other law or ordinance or from negligence" of the City "Mayor, Municipal Board, or other officers while enforcing or attempting to enforce said provisions." Upon the other hand, Article 2189 of the Civil Code of the Philippines which provides that: "Provinces, cities and municipalities shall be liable for damages for the death of, or injuries suffered by any person by reason of defective conditions of roads, streets, bridges, public buildings and other public works under their control or supervision."
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constitutes a particular prescription making "provinces, cities and municipalities . . . liable for damages for the death of, or injury suffered by any person by reason" specifically "of the defective condition of roads, streets, bridges, public buildings, and other public works under their control or supervision." In other words, Art. 1, sec. 4, R.A. No. 409 refers to liability arising from negligence, in general, regardless of the object, thereof, while Article 2189 of the Civil Code governs liability due to "defective streets, public buildings and other public works" in particular and is therefore decisive on this specific case. In the same suit, the Supreme Court clarified further that under Article 2189 of the Civil Code, it is not necessary for the liability therein established to attach, that the defective public works belong to the province, city or municipality from which responsibility is exacted. What said article requires is that the province, city or municipality has either "control or supervision" over the public building in question. cdphil In the case at bar, there is no question that the Sta. Ana Public Market, despite the Management and Operating Contract between respondent City and Asiatic Integrated Corporation remained under the control of the former. For one thing, said contract is explicit in this regard, when it provides: "II That immediately after the execution of this contract, the SECOND PARTY shall start the painting, cleaning, sanitizing and repair of the public markets and talipapas and within ninety (90) days thereof, the SECOND PARTY shall submit a program of improvement, development, rehabilitation and reconstruction of the city public markets and talipapas subject to prior approval of the FIRST PARTY. (Rollo, p. 44) xxx xxx xxx "VI That all present personnel of the City public markets and talipapas shall be retained by the SECOND PARTY as long as their services remain satisfactory and they shall be extended the same rights and privileges as heretofore enjoyed by them. Provided, however, that the SECOND PARTY shall have the right, subject to prior approval of the FIRST PARTY to discharge any of the present employees for cause. (Rollo, p. 45). "VII That the SECOND PARTY may from time to time be required by the FIRST PARTY, or his duly authorized representative or representatives, to report on the activities and operation of the City public markets and talipapas and the facilities and conveniences installed therein, particularly as to their cost of construction, operation and maintenance in connection with the stipulations contained in this Contract." (Ibid.) The fact of supervision and control of the City over subject public market was admitted by Mayor Ramon
Bagatsing in his letter to Secretary of Finance Cesar Virata which reads: "These cases arose from the controversy over the Management and Operating Contract entered into on December 28, 1972 by and between the City of Manila and the Asiatic Integrated Corporation, whereby in consideration of a fixed service fee, the City hired the services of the said corporation to undertake the physical management, maintenance, rehabilitation and development of the City's public markets and 'Talipapas' subject to the control and supervision of the City. xxx xxx xxx "It is believed that there is nothing incongruous in the exercise of these powers vis-a-vis the existence of the contract, inasmuch as the City retains the power of supervision and control over its public markets and talipapas under the terms of the contract." (Exhibit 7-A.) (Emphasis supplied.) (Rollo, p. 75). In fact, the City of Manila employed a market master for the Sta. Ana Public Market whose primary duty is to take direct supervision and control of that particular market, more specifically, to check the safety of the place for the public. Thus the Asst. Chief of the Market Division and Deputy Market Administrator of the City of Manila testified as follows: "Court This market master is an employee of the City of Manila? Mr. Ymson Yes, Your Honor. Q What are his functions? A Direct supervision and control over the market area assigned to him." (T.s.n., pp. 41-42, Hearing of May 20, 1977.) xxx xxx xxx "Court As far as you know there is or is there any specific employee assigned with the task of seeing to it that the Sta. Ana Market is safe for the public? "Mr. Ymson Actually, as I stated, Your Honor, that the Sta. Ana has its own market master. The primary duty of that market master is to make the direct supervision and control of that particular market, the check or verifying whether the place is safe for public safety is vested in the market master." (T.s.n., pp. 24-25, Hearing of July 27, 1977.) (Emphasis supplied.) (Rollo, p. 76). Finally, Section 30 (g) of the Local Tax Code as amended, provides: "The treasurer shall exercise direct and immediate supervision, administration and control over public markets and the personnel thereof, including those whose duties concern the maintenance and upkeep of the market and ordinances and other pertinent rules and regulations." (Emphasis supplied.) (Rollo, p. 76) The contention of respondent City of Manila that petitioner should not have ventured to go to Sta. Ana Public Market during a stormy weather is indeed untenable. As observed
20
by respondent Court of Appeals, it is an error for the trial court to attribute the negligence to herein petitioner. More specifically stated, the findings of appellate court are as follows: ". . . The trial court even chastised the plaintiff for going to market on a rainy day just to buy bagoong. A customer in a store has the right to assume that the owner will comply with his duty to keep the premises safe for customers. If he ventures to the store on the basis of such assumption and is injured because the owner and not comply with his duty, no negligence can be imputed to the customer." (Decision, AC-G.R. CV No. 01387, Rollo, p. 19). As a defense against liability on the basis of a quasi-delict, one must have exercised the diligence of a good father of a family. (Art. 1173 of the Civil Code). There is no argument that it is the duty of the City of Manila to exercise reasonable care to keep the public market reasonably safe for people frequenting the place for their marketing needs. While it may be conceded that the fulfillment of such duties is extremely difficult during storms and floods, it must however, be admitted that ordinary precautions could have been taken during good weather to minimize the dangers to life and limb under those difficult circumstances. LLjur For instance, the drainage hole could have been placed under the stalls instead of on the passage ways. Even more important is the fact, that the City should have seen to it that the openings were covered. Sadly, the evidence indicates that long before petitioner fell into the opening, it was already uncovered, and five (5) months after the incident happened, the opening was still uncovered. (Rollo, pp. 57; 59). Moreover, while there are findings that during floods the vendors remove the iron grills to hasten the flow of water (Decision, AC-G.R. CV No. 01387; Rollo, p. 17), there is no showing that such practice has ever been prohibited, much less penalized by the City of Manila. Neither was it shown that any sign had been placed thereabouts to warn passers-by of the impending danger. To recapitulate, it appears evident that the City of Manila is likewise liable for damages under Article 2189 of the Civil Code, respondent City having retained control and supervision over the Sta. Ana Public Market and as tortfeasor under Article 2176 of the Civil Code on quasidelicts. Petitioner had the right to assume that there were no openings in the middle of the passageways and if any, that they were adequately covered. Had the opening been covered, petitioner could not have fallen into it. Thus the negligence of the City of Manila is the proximate cause of the injury suffered, the City is therefore liable for the injury suffered by the petitioner. Respondent City of Manila and Asiatic Integrated Corporation being joint tort-feasors, are solidarily liable under Article 2194 of the Civil Code.
PREMISES CONSIDERED, the decision of the Court of Appeals is hereby MODIFIED, making the City of Manila and the Asiatic Integrated Corporation solidarily liable to pay the plaintiff P221.90 actual medical expenses, P900.00 for the amount paid for the operation and management of the school bus, P20,000.00 as moral damages due to pain, sufferings and sleepless nights and P10,000.00 as attorney's fees. SO ORDERED. Fernan (Chairman), Gutierrez, Jr., Padilla, Bidin and Cortes, JJ., concur. Footnotes * Penned by Justice Jorge R. Coquia and concurred in by Justices Mariano A. Zosa, Floreliana Castro-Bartolome, and Bienvenido C. Ejercito. ** Written by Judge Amador T. Vallejos. SECOND DIVISION [G.R. No. 61516. March 21, 1989.] FLORENTINA A. GUILATCO, petitioner, vs. CITY OF DAGUPAN, and the HONORABLE COURT OF APPEALS, respondents. Nolan R. Evangelista for petitioner. The City Legal Officer for respondents. SYLLABUS 1. CIVIL LAW; QUASI-DELICTS; ARTICLE 2189 OF NEW CIVIL CODE; NOT NECESSARY FOR DEFECTIVE ROAD OR STREET TO BELONG TO PROVINCE, CITY OR MUNICIPALITY FOR LIABILITY TO ATTACH; ARTICLE ONLY REQUIRES THAT EITHER CONTROL OR SUPERVISION IS EXERCISED OVER DEFECTIVE ROAD OR STREET. It is not even necessary for the defective road or street to belong to the province, city or municipality for liability to attach. The article only requires that either control or supervision is exercised over the defective road or street. 2. ID.; ID.; ID.; APPLIES IN PARTICULAR TO LIABILITY ARISING FROM "DEFECTIVE STREETS, PUBLIC BUILDINGS AND OTHER PUBLIC WORKS"; CHARTER ONLY LAYS DOWN GENERAL RULES REGULATING LIABILITY OF CITY. The charter only lays down general rules regulating the liability of the city. On the other hand article 2189 applies in particular to the liability arising from "defective streets, public buildings and other public works." 3. ID.; DAMAGES; ACTUAL DAMAGES; AMOUNT MAY NOT BE BASED ON "SPECULATION, CONJECTURE OR GUESS WORK"; WITHOUT ACTUAL PROOF OF LOSS, AWARD BECOMES ERRONEOUS. The actual damages awarded to the petitioner in the amount of P10,000.00
21
should be reduced to the proven expenses of P8,053.65 only. The trial court should not have rounded off the amount. In determining actual damages, the court can not relly on "speculation, conjecture or guess works as to the amount. Without the actual proof of loss, the award of actual damages becomes erroneous. 4. ID.; ID.; MORAL DAMAGES; MAY BE AWARDED EVEN WITHOUT PROOF OF PECUNIARY LOSS AS DETERMINATION OF AMOUNT IS DISCRETIONARY ON COURT; NATURE, EXPLAINED. Moral damages may be awarded even without proof of pecuniary loss, inasmuch as the determination of the amount is discretionary on the court. Though incapable of pecuniary estimation, moral damages are in the nature of an award to compensate the claimant for actual injury suffered but which for some reason can not be proven. 5. ID.; ID.; ID.; REQUISITES THEREOF, CITED. In awarding moral damages, the following should be taken into consideration: (1) First, the proximate cause of the injury must be the claimee's acts. (2) Second, there must be compensatory or actual damages as satisfactory proof of the factual basis for damages. (3) Third, the award of moral damages must be predicated on any of the cases enumerated in the Civil Code. 6. ID.; ID.; ID.; AWARD OF DAMAGES WITHOUT BASIS RESULTING IN EXHORBITANT AMOUNTS, REPREHENSIBLE; EXCESSIVE DAMAGES, REDUCED. The award of moral damages at P150,000.00 is excessive. Her handicap was not permanent and disabled her only during her treatment which lasted for one year. Though evidence of moral loss and anguish existed to warrant the award of damages, the moderating hand of the law is called for. The Court has time and again called attention to the reprehensible propensity of trial judges to award damages without basis, resulting in exhorbitant amounts. Although the assessment of the amount is better left to the discretion of the trial court, under preceding jurisprudence, the amount of moral damages should be reduced to P20,000.00. DECISION SARMIENTO, J p: In a civil action 1 for recovery of damages filed by the petitioner Florentina A. Guilatco, the following judgment was rendered against the respondent City of Dagupan: xxx xxx xxx (1) Ordering defendant City of Dagupan to pay plaintiff, actual damages in the amount of P15,924 (namely P8,054.00 as hospital, medical and other expenses [Exhs. H to H-60], P7,420.00 as lost income for one (1) year [Exh. F] and P450.00 as bonus). P150,000.00 as moral damages, P50,000.00 as exemplary damages, and P3,000.00 as attorney's fees, and litigation expenses, plus costs and to
appropriate through its Sangguniang Panglunsod (City Council) said amounts for said purpose; (2) Dismissing plaintiff's complaint as against defendant City Engr. Alfredo G. Tangco; and (3) Dismissing the counterclaims of defendant City of Dagupan and defendant City Engr. Alfredo G. Tangco, for lack of merit. 2 The facts found by the trial court are as follows: 3 It would appear from the evidences that on July 25, 1978, herein plaintiff, a Court Interpreter of Branch III, CFIDagupan City, while she was about to board a motorized tricycle at a sidewalk located at Perez Blvd. (a National Road, under the control and supervision of the City of Dagupan) accidentally fell into a manhole located on said sidewalk, thereby causing her right leg to be fractured. As a result thereof, she had to be hospitalized, operated on, confined, at first at the Pangasinan Provincial Hospital, from July 25 to August 3, 1978 (or for a period of 16 days). She also incurred hospitalization, medication and other expenses to the tune of P8,053.65 (Exh. H to H-60) or a total of P10,000.00 in all, as other receipts were either lost or misplaced; during the period of her confinement in said two hospitals, plaintiff suffered severe or excruciating pain not only on her right leg which was fractured but also on all parts of her body; the pain has persisted even after her discharge from the Medical City General Hospital on October 9, 1978, to the present. Despite her discharge from the Hospital plaintiff is presently still wearing crutches and the Court has actually observed that she has difficulty in locomotion. From the time of the mishap on July 25, 1978 up to the present, plaintiff has not yet reported for duty as court interpreter, as she has difficulty of locomotion in going up the stairs of her office, located near the city hall in Dagupan City. She earns at least P720.00 a month consisting of her monthly salary and other means of income, but since July 25, 1978 up to the present she has been deprived of said income as she has already consumed her accrued leaves in the government service. She has lost several pounds as a result of the accident and she is no longer her former jovial self; she has been unable to perform her religious, social, and other activities which she used to do prior to the incident. Dr. Norberto Felix and Dr. Dominado Manzano of the Provincial Hospital, as well as Dr. Antonio Sison of the Medical City General Hospital in Mandaluyong Rizal (Exh. I; see also Exhs. F, G, G-1 to G-19) have confirmed beyond shadow of any doubt the extent of the fracture and injuries sustained by the plaintiff as a result of the mishap. On the other hand, Patrolman Claveria, De Asis and Cerezo corroborated the testimony of the plaintiff regarding the mishap and they have confirmed the existence of the manhole (Exhs. A, B, C and sub-exhibits) on the sidewalk along Perez Blvd., at the time of the incident on July 25, 1978 which was partially covered by a concrete flower pot by leaving gaping hole about 2 ft. long by 1 1/2 feet wide or
22
42 cms. wide by 75 cms. long by 150 cms. deep (see Exhs. D and D-1). Defendant Alfredo Tangco, City Engineer of Dagupan City and admittedly ex-officio Highway Engineer, City Engineer of the Public Works and Building Official for Dagupan City, admitted the existence of said manhole along the sidewalk in Perez Blvd., admittedly a National Road in front of the Luzon Colleges. He also admitted that said manhole (there are at least 11 in all in Perez Blvd.) is owned by the National Government and the sidewalk on which they are found along Perez Blvd. are also owned by the National Government. But as City Engineer of Dagupan City, he supervises the maintenance of said manholes or drainage system and sees to it that they are properly covered, and the job is specifically done by his subordinates, Mr. Santiago de Vera (Maintenance Foreman) and Engr. Ernesto Solermo, also a maintenance Engineer. In his answer defendant Tangco expressly admitted in par. 7-1 thereof, that in his capacity as ex-officio Highway Engineer for Dagupan City he exercises supervision and control over National roads, including the Perez Blvd. where the incident happened. Cdpr On appeal by the respondent City of Dagupan, the appellate court 4 reversed the lower court findings on the ground that no evidence was presented by the plaintiff-appellee to prove that the City of Dagupan had "control or supervision" over Perez Boulevard. 5 The city contends that Perez Boulevard, where the fatal drainage hole is located, is a national road that is not under the control or supervision of the City of Dagupan. Hence, no liability should attach to the city. It submits that it is actually the Ministry of Public Highways that has control or supervision through the Highway Engineer which, by mere coincidence, is held concurrently by the same person who is also the City Engineer of Dagupan. After examination of the findings and conclusions of the trial court and those of the appellate court, as well as the arguments presented by the parties, we agree with those of the trial court and of the petitioner. Hence, we grant the petition. In this review on certiorari, we have simplified the errors assigned by the petitioner to a single issue: whether or not control or supervision over a national road by the City of Dagupan exists, in effect binding the city to answer for damages in accordance with article 2189 of the Civil Code. The liability of public corporations for damages arising from injuries suffered by pedestrians from the defective condition of roads is expressed in the Civil Code as follows: Article 2189. Provinces, cities and municipalities shall be liable for damages for the death of, or injuries suffered by, any person by reason of the defective condition of roads, streets, bridges, public buildings, and other public works under their control or supervision. It is not even necessary for the defective road or street to belong to the province, city or municipality for liability
to attach. The article only requires that either control or supervision is exercised over the defective road or street. 6 In the case at bar, this control or supervision is provided for in the charter of Dagupan and is exercised through the City Engineer who has the following duties: Sec. 22. The City Engineer His powers, duties and compensation There shall be a city engineer, who shall be in charge of the department of Engineering and Public Works. He shall receive a salary of not exceeding three thousand pesos per annum. He shall have the following duties: cdrep xxx xxx xxx (j) He shall have the care and custody of the public system of waterworks and sewers, and all sources of water supply, and shall control, maintain and regulate the use of the same, in accordance with the ordinance relating thereto; shall inspect and regulate the use of all private systems for supplying water to the city and its inhabitants, and all private sewers, and their connection with the public sewer system. xxx xxx xxx The same charter of Dagupan also provides that the laying out, construction and improvement of streets, avenues and alleys and sidewalks, and regulation of the use thereof, may be legislated by the Municipal Board. 7 Thus the charter clearly indicates that the city indeed has supervision and control over the sidewalk where the open drainage hole is located. The express provision in the charter holding the city not liable for damages or injuries sustained by persons or property due to the failure of any city officer to enforce the provisions of the charter, can not be used to exempt the city, as in the case at bar. 8 The charter only lays down general rules regulating the liability of the city. On the other hand article 2189 applies in particular to the liability arising from "defective streets, public buildings and other public works. 9 The City Engineer, Mr. Alfredo G. Tangco, admits that he exercises control or supervision over the said road. But the city can not be excused from liability by the argument that the duty of the City Engineer to supervise or control the said provincial road belongs more to his functions as an exofficio Highway Engineer of the Ministry of Public Highway than as a city officer. This is because while he is entitled to an honorarium from the Ministry of Public Highways, his salary from the city government substantially exceeds the honorarium. We do not agree. Alfredo G. Tangco "(i)n his official capacity as City Engineer of Dagupan, as Ex-Officio Highway Engineer, as Ex-Officio City Engineer of the Bureau of Public Works, and, last but not the least, as Building Official for Dagupan City, receives the following monthly compensation: P1,810.66 from Dagupan City; P200.00 from the Ministry of
23
Public Highways; P100.00 from the Bureau of Public Works and P500.00 by virtue of P.D. 1096, respectively." 10 This function of supervision over streets, public buildings, and other public works pertaining to the City Engineer is coursed through a Maintenance Foreman and a Maintenance Engineer. 11 Although these last two officials are employees of the National Government, they are detailed with the City of Dagupan and hence receive instruction and supervision from the city through the City Engineer. LLphil There is, therefore, no doubt that the City Engineer exercises control or supervision over the public works in question. Hence, the liability of the city to the petitioner under article 2198 of the Civil Code is clear. Be all that as it may, the actual damages awarded to the petitioner in the amount of P10,000.00 should be reduced to the proven expenses of P8,053.65 only. The trial court should not have rounded off the amount. In determining actual damages, the court can not relly on "speculation, conjecture or guess works as to the amount. Without the actual proof of loss, the award of actual damages becomes erroneous. 12 On the other hand, moral damages may be awarded even without proof of pecuniary loss, inasmuch as the determination of the amount is discretionary on the court. 13 Though incapable of pecuniary estimation, moral damages are in the nature of an award to compensate the claimant for actual injury suffered but which for some reason can not be proven. However, in awarding moral damages, the following should be taken into consideration: (1) First, the proximate cause of the injury must be the claimee's acts. 14 (2) Second, there must be compensatory or actual damages as satisfactory proof of the factual basis for damages. 15 (3) Third, the award of moral damages must be predicated on any of the cases enumerated in the Civil Code. 16 In the case at bar, the physical suffering and mental anguish suffered by the petitioner were proven. Witnesses from the petitioner's place of work testified to the degeneration in her disposition from being jovial to depessed. She refrained from attending social and civic activities. 17 Nevertheless the award of moral damages at P150,000.00 is excessive. Her handicap was not permanent and disabled her only during her treatment which lasted for one year. Though evidence of moral loss and anguish existed to warrant the award of damages, 18 the moderating hand of the law is called for. The Court has time and again called attention to the reprehensible propensity of trial judges to award damages without basis, 19 resulting in exhorbitant amounts. 20 Although the assessment of the amount is better left to the discretion of the trial court, 21 under preceding
jurisprudence, the amount of moral damages should be reduced to P20,000.00. As for the award of exemplary damages, the trial court correctly pointed out the basis: cdrep To serve as an example for the public good, it is high time that the Court, through this case, should serve warning to the city or cities concerned to be more conscious of their duty and responsibility to their constituents, especially when they are engaged in construction work or when there are manholes on their sidewalks or streets which are uncovered, to immediately cover the same, in order to minimize or prevent accidents to the poor pedestrians. 22 Too often in the zeal to put up "public impact" projects such as beautification drives, the end is more important than the manner in which the work is carried out. Because of this obsession for showing off, such trivial details as misplaced flower pots betray the careless execution of the projects, causing public inconvenience and inviting accidents. Pending appeal by the respondent City of Dagupan from the trial court to the appellate court, the petitioner was able to secure an order for garnishment of the funds of the City deposited with the Philippine National Bank, from the then presiding judge, Hon. Willelmo Fortun. This order for garnishment was revoked subsequently by the succeeding presiding judge, Hon. Romeo D. Magat, and became the basis for the petitioner's motion for reconsideration which was also denied. 23 We rule that the execution of the judgment of the trial court pending appeal was premature. We do not find any good reason to justify the issuance of an order of execution even before the expiration of the time to appeal. 24 WHEREFORE, the petition is GRANTED. The assailed decision and resolution of the respondent Court of Appeals are hereby REVERSED and SET ASIDE and the decision of the trial court, dated March 12, 1979 and amended on March 13, 1979, is hereby REINSTATED with the indicated modifications as regards the amounts awarded: cdphil (1) Ordering the defendant City of Dagupan to pay the plaintiff actual damages in the amount of P15,924 (namely P8,054.00 as hospital, medical and other expenses; P7,420.00 as lost income for one (1) year and P450.00 as bonus); P20,000.00 as moral damages and P10,000.00 as exemplary damages. The attorney's fees of P3,000.00 remain the same. SO ORDERED. Melencio-Herrera, (Chairman), Paras, Padilla and Regalado, JJ., concur.
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Corporate Powers and Municipal Liability

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EN BANC [G.R. No. L-28972. October 31, 1972.] CITY COUNCIL OF CEBU CITY represented by COUNCILORS FLORENCIO S.

corporate powers and municipal liability kgd

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corporate powers and municipal liability kgd

corporate powers and municipal liability kgd

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