SALALIMA v. GUINGONA, JR.

GR No. 117589-92 May 22, 1996

By Kylie Dado
Petitioners: (Respondents in the case before the Office of the President)
Romeo R. Salalima
Vicente Go, Sr.
Danilo S. Azana
Ramon Fernandez, Jr
Juan Victoria
Masikap Fontanilla
Lorenzo Reyeg
Wilbor Rontas
Arturo Osia
Nemesio Baclao
Clenio Cabredo
Respondents:
Teofisto T. Guingona, Jr., In His Capacity As The Executive Secretary
Victor R. Sumulong
Renato C. Corona and Angel V. SaldiVar, In Their Capacity As Members
Of The Ad Hoc Committee
Mayor Naomi C. Corral
Kgd. Francisco Alarte
Mayor Antonio Demetriou
Dominador Lim, Jesus James Calisin, Evelyn Silverio, Silverio Cope,
Tobias Betito, Manuel Lanuza, James Enrico Salazar, Rodolfo Ante, Juan
Rivera, Marcial Tuanqui, Dr. Salvador Sambitan, Atty. Eutiquio
Nepomuceno, In Their Capacity As Acting Governor, Acting ViceGovernor, And Acting Members Of The Sangguniang Panlalawigan Of
Albay
xxx
FACTS IN THE SC:
The cases in the OP were filed against the petitioners, who were
elective officials of the Province of Albay. Acting thereon, the President
issued AO 94 creating an Ad Hoc Committee to investigate and to
thereafter submit its findings and recommendations.
Now, Petitioners seek to annul and set aside Admin Order No. 153
approving the findings of fact and recommendations of the Ad Hoc
Committee, finding them liable for the ff acts and ommissions:
a) Wanton disregard of the law amounting to GAD - O.P. Case No.
5470
b) GAD under Sec. 60 (e) of LGC - O.P. Case No. 5469
c) Oppression and abuse of authority under Sec. 60 (c & e) - O.P.
Case No. 5471
d) Abuse of authority and negligence - O.P. Case No. 5450
xxx

FACTS IN THE OP: (Note: the Petitioners are herein regard as

Respondents. Please dont be confused)
I. O.P. Case No. 5470
Filed by: Tiwi Mayor Corral
Charge: Malversation and consistent & habitual violation of Sec. 60 (c &
d)
OP Decision: Guilty
Penalty: Suspension without pay; Salalima 5 mos.; Others 4 mos
The SC in the case of NPC v. Province of Albay rendered a judgment
declaring NPC liable for unpaid real estate taxes on its properties in
Albay. Said properties were sold at an auction sale to satisfy NPCs tax
liabilities. Being the sole bidder, the Province of Albay (Province)
acquired ownership over said properties.
NPC through its President, Malixi, and the
Salalima, entered into MOA, wherein NPC
liabilities amounting to P214,845,104.76, in
and the ownership over the said properties
satisfaction of the tax liabilities.

Province, represented by
agreed to settle its tax
24 monthly installments,
shall revert to NPC upon

Mayor Corral of Tiwi requested the Province to remit the rightful tax
shares of Tiwi where NPCs properties are located, relative to the
payments made by NPC. On the same day, Tiwis Sangguniang Bayan
passed Resolution 12-92, requesting the Albay Sangguniang
Panlalawigan to hold a joint session with the former + Mayor Corral +
Sangguniang Pambarangay of the concerned barangays, for the
purpose of discussing the distribution of the NPC payments.
Salalimas Reply: Request not granted. NPCs initial payment of
P17.763M was only an earnest money, and the total amount
from NPC was still being validated
Not satisfied with Salalimas reply, Mayor Corral complained to
NPC about the Provinces failure to remit Tiwis and the
concerned barangays shares in the payments made by NPC
Pres. Malixi informed Salalima that the representatives of both
NPC and the Province have reconciled their accounts and
determined that the amount due from NPC was down to
P207,375,774.52 and due to the brewing Tiwi + the concerned
barangays and the Province, and so as not to be caught in the
middle of the controversy, NPC requested a clarification from the
Office of the President as to the scope and extent of the shares
of local government units in real estate tax collections.
Meanwhile, Albay Sangguniang Panlalawigan passed Resolution Nos.
17892 and 20492 appropriating P9,778,932.57 and P17,663,431.58 or a
total of P27,442,364.15 from the general fund to satisfy prior years

obligations and to implement certain projects of the Province. (Ang

gago talaga ng the Province!)
Approved by Salalima
OPs response to the inquiry of Malixi: MOA entered into by NPC and the
Province merely recognized and established NPCs tax liability. The
sharing scheme and those entitled to the payments to be made by NPC
under the MOA should be that provided under the law, and since Tiwi is
entitled to share in said tax liabilities, NPC may remit such share
directly to Tiwi.
Following OPs opinion, Malixi informed Mayor Corral and Salalima that
NPC will directly pay Tiwi its share in the payments under the MOA.
In an apparent reaction to NPCs decision, Albay Sangguniang
Panlalawigan passed Ordinance 09-92, authorizing the Provincial
Treasurer, upon the direction of the Governor, to sell the real properties
(acquired by the Province at the auction sale), at a public action and to
cause the immediate transfer to the winning bidder, and declared as
forfeited in favor of the Province, all the payments already made by NPC
under the MOA. (Baliw talaga!)
Realizing from the actuations of the respondents that Tiwis share in the
P40,724,471.74 payments already made by NPC will not be
forthcoming, Mayor Corral filed the present complaint with the OP.
Issue: whether the payments to be made by NPC under the
MOA should accrue solely and exclusively in favor of the Province
OPs Decision: Provisions under PD 464 clearly shows that applying
the rates of levy, the real properties taxes collectible from the NPC are:
1. A basic tax of 1%, levied by the Province (0.5%) and Tiwi (0.5%)
on the one hand; and the Province (0.5%) and Daraga (0.5%) on
the other; and
2. The additional 1% tax pertaining to the Special Education Fund
(SEF).
or a total of 2.0% on the assessed value of NPCs real properties.
In real terms, the P40,724,471.74 in payments earlier made by NPC
should be shared by the Province, Tiwi and Daraga, the concerned
barangays and the national government. In other words, Province is
entitled only to P13,744,509.21, and the balance of P26,979,962.52
represents the collective shares of Tiwi, Daraga, the concerned
barangays and the national government.
Province maintains that considering that it acquired ownership over the
properties of NPC subject matter of the auction, all the payments to be
made by NPC under the MOA should accrue exclusively to the Province.
UNTENABLE. The law clearly provides that the proceeds of all
the delinquent taxes and penalties as well as the income

realized from the disposition of real property acquired by the

province or city at a public auction and the sale of delinquent
property or the redemption thereof shall accrue to the province,
city or municipality in the same manner and proportion as if the
tax or taxes have been paid in the regular course.
It is immaterial that the Province was the highest bidder and
eventually became the owner of the properties sold at the
auction sale. What is essential is that the proceeds of the resale
of said properties acquired by the Province, be distributed in the
same manner and proportion among the rightful beneficiaries
thereof as provided by law.

OP noted as well that the Province already appropriated and disbursed

P35,803,118.30. This exceeds the P13,744,509.21 share of the Province
by P22,058,609.09. Ordinance 09-92 was declared forfeited for being
patently illegal as it unlawfully deprives Tiwi and Daraga, the barangays
concerned, and the national government of their rightful shares in said
payments. Being illegal, said ordinance may not be used or relied upon
by the respondents to justify the disbursements of funds in excess of
their share.
OP also rejected Azanas defense that since he did not participate in the
deliberation and passage of Resolution No. 09 92, merely signing the
same as presiding officer of the Sangguniang Panlalawigan. The fact
remains that he has a duty to see to it that resolutions or ordinances
proposed are within the bounds of the law.
It cannot be denied that Sangguniang Panlalawigan has control over the
Provinces purse. Being entrusted with such responsibility, the
provincial governor, vicegovernor and the members of the Sangguniang
Panlalawigan, must always be guided by the socalled fundamental
principles enunciated under the LGC, i.e., No money shall be paid out
of the local treasury except in pursuance of an appropriations ordinance
or law.
All the respondents could not claim ignorance of the law. As a public
officer, they have a duty to protect the interests not only of the Province
but also of the municipalities of Tiwi and Daraga and even the national
government. When the passage of an illegal or unlawful ordinance by
the Sangguniang Panlalawigan is imminent, the presiding officer has a
duty to act accordingly, but actively opposing the same by temporarily
relinquishing his chair and participating in the deliberations.
Thus, the factual setting shows a wanton disregard of law on the part of
the respondents tantamount to abuse of authority. Moreover, the illegal
disbursements made can qualify as technical malversation.
II. OP Case No. 5469

Subject of the Case: Retainer contract for legal services entered into
bet. The Province of Albay and Atty. Jesus R. Cornago + Cortes & Reyna
Law Firm, and the disbursement of public fund in payment thereof.
OP Decision: Guilty
Albay Sangguniang Panlalawigan adopted Resolution No. 12989
authorizing respondent Governor to engage the services of a Manilabased law firm to handle the case against NPC. However, it was Atty.
Jesus R. Cornago, who entered his appearance with the SC. The entry of
appearance of Atty. Cornago bore the conformity of respondent
Governor.
Following the suggestion of Atty. Cortes of Cortes & Reyna Law Firm, the
Province, the Firm and Atty. Cornago entered into the retainer
agreement, wherein the Province would pay the lawyer and the firm
P50K as Acceptance Fee, and a Contingent Fee equivalent to 18% of the
value of the property (P214M) in the event a favorable judgment is
given by the Court. (Salalima signed it for the Province)
SC dismissed NPCs petition. So, payments amounting to P7,380,410.31
were made by the Province to Atty. Cornago and to the Firm.
Provincial Auditor of Albay informed respondent Governor that
payments made by the Province as attorneys fees amounting to
P7,380,410.31 have been disallowed by the COA for lack of
prior written conformity and acquiescence of the Solicitor
General, and that by entering into the retainer agreement with
private lawyers and paying to the said private lawyers,
respondents violated several provisions of law which warrants
the imposition of administrative penalties against them
Issue: W/N respondents have incurred administrative liability in
entering into the retainer agreement with Atty. Cornago and the Cortes
& Reyna Law Firm and in making payments pursuant to said agreement
for purposes of the case filed by NPC with the Supreme Court against
the Province.
OPs Decision: Transaction in question the respondents abused their
authority. he Supreme Court has ruled in Municipality of Bocaue, et al.
v. Manotok, that local governments [sic] units cannot be represented by
private lawyers and it is solely the Provincial Fiscal who can rightfully
represent them
Entire transaction was attended by irregularities. The
disbursements to the lawyers amounting to P7,380,410.31 were
disallowed by the Provincial Auditor on the ground that these
were made without the prior written conformity of the Solicitor
General and the written concurrence of the COA
Moreover, it was only Atty. Cornago who appeared as
collaborating counsel of record of the Province in the Supreme
Court case, and yet, six of the ten checks paid by the Province

and amounting to more than P3.6 million were issued in favor of

the Cortes & Reyna Law Firm through Atty. Antonio Jose Cortes.
In other words, respondents disbursed money to the Cortes &
Reyna Law Firm although the latter did not appear as counsel for
the Province in the Supreme Court in G.R. No. 87479
Finally, he attorneys fees agreed upon by respondent Salalima
and confirmed by the other respondents are not only
unreasonable but also unconscionable.
o The professional character and social standing of Atty.
Cornago are not such as would merit a P38.5 million fee
for the legal services rendered for the Province. He was
only admitted by the Government because of personal
reasons. (they are fraternal bros in SBC Law)
o Standing of the Cortes & Reyna Law Firm is not such as
would merit P38.5 million for one memorandum

III. OP Case No. 5471

Filed by: Mayor Corral
Mayor Corral and seven (7) Kagawads of the Tiwi Sangguniang Bayan
charged herein respondent Governor Salalima and ViceGovernor Azana
for abuse of authority, misconduct in office and oppression.
Subsequently, Mayor Corral became the subject of several
administrative and criminal complaints filed by certain individuals.
(OMG! This is an attempt by the Province to kick him out of the office as
he serves as a barrier to their evil acts)
Sangguniang Panlalawigan passed Omnibus Resolution No. 2
recommending that Mayor Corral be placed under preventive
suspension for sixty (60) days pending the resolution of Adm. Case.
Approved by Salalima and directed Tiwi Vice Mayor Benibe to
assume office of the Mayor
Mayor Corral filed a motion to inhibit the respondents from hearing the
six cases filed against her with the Sangguniang Panlalawigan.
However, this was denied by the respondentmembers of the
Sangguniang Panlalawigan assuming jurisdiction over the cases.
Sangguniang Panlalawigan rendered judgments against Mayor
Corral and ordered for his suspension.
Mayor Corral appeal to the OP.
Issue: whether the conduct of the proceedings in the administrative
cases filed and the series of suspension orders imposed by the
respondentmembers of the Sangguniang Panlalawigan on Mayor Corral
constitute oppression and abuse of authority?

OPs Decision: A review of the proceedings reveal that the same were
marked by haste and arbitrariness. This was evident from the start
when Mayor Corral was preventively suspended. Respondents should
have inhibited themselves from assuming jurisdiction over said cases as
timely moved by Mayor Corral considering that they were the
respondents in various administrative complaints she earlier filed with
the OP and with the DILG starting with OP Case No. 4892. However,
despite the violation of due process resulting from their collective acts,
respondents, in their determination and eagerness to suspend and
harass Mayor Corral, proceeded to hear and decide said cases.
IV. OP Case No. 5450
Filed by: Mayor Demetriou of Tabaco
Tabaco Public Market was destroyed by fire. OP advised Mayor
Demetriou and respondent Salalima that the P12.0 Million in Budgetary
Assistance to Local Government Units (BALGU) funds earlier remitted by
the national government to the Province, should be used for the
rehabilitation of the Tabaco Public Market, and that the project should
be implemented by the Provincial Governor in consultation with the
Mayor of Tabaco.
Public bidding was conducted. Province, through Salalima, entered into
contract with RY Construction. The contracted work was agreed upon to
be completed in 150 days. The projected started on July 1, 1991, but
was completed on June 2, 1992.
The Province entered into another contract with RYU Construction for
additional repair and rehabilitation with the same terms, except for the
construction period, which is only for 90 days.
Allegation of Mayor Demetriou: despite the delay in the completion of
work under the first contract, liquidated damages were not imposed on,
nor collected from, RYU Construction by the Province. Moreover, he
claims that the second contract with RYU Construction was entered into
in violation of PD No. 1594 as RYU incurred delay with respect to the
first contract.
OPs Decision: IRR of PD 1594 provids that the collection of liquidated
damages is mandatory in cases of delay unless there are valid orders of
extension of contract work given by the Government.
Salalima failed to submit any evidence concerning any order
issued by the Provincial Government extending RYU
Constructions contract
The law requires that requests for contract extension as well as
the orders granting the same must be made and given prior to
the expiration of the contract. The rationale for this requirement

is obviously to prevent a contractor from justifying any delay

after the contract expires
In addition, Salalima unmistakably violated the provisions of PD No.
1594. Fundamental is the rule that government contracts especially
infrastructure contracts are awarded only through bidding.
And since RYU Construction incurred negative slippage with
respect to the repair works under the 29 May 1991 contract as
found by COA, it was anomalous for the Province through
respondent Salalima to enter into a negotiated contract with said
contractor for additional repair and rehabilitation works for the
Tabaco Public market. Failing to comply with the requirements of
law, the 6 March 1992 contract is clearly irregular, if not illegal.
ISSUES/RULINGS:
Note: The decision then in O.P. Case No. 5471 stands unchallenged in
this petition.
1. Did the Office of the President act with grave abuse of
discretion amounting to lack or excess of jurisdiction in
suspending the petitioners for periods ranging from twelve to
twenty months?
Petitioners Contention: Their suspensions ranging from twelve months
to twenty months or for the entire duration of their unexpired term,
which was then only seven months, constituted permanent
disenfranchisement or removal from office in clear violation of Section
60 of R.A. No. 7160 which mandates that an elective local official may
be removed from office by order of the court
SC: NO
Assuming then that the findings and conclusions of the OP in each of
the subject four administrative cases are correct, it committed no grave
abuse of discretion in imposing the penalty of suspension, although the
aggregate thereof exceeded six months and the unexpired portion of
the petitioners term of office. The fact remains that the suspension
imposed for each administrative offense did not exceed six
months and there was an express provision that the successive service
of the suspension should not exceed the unexpired portion of the term
of office of the petitioners. Their term of office expired at noon of 30
June 1995. And this Court is not prepared to rule that the suspension
amounted to the petitioners removal from office.
2. Did the OP commit grave abuse of discretion in deciding O.P.
Cases Nos. 5450, 5469, and 5470 despite the pendency of the
petitioners appeal to the COA en banc from Special Audit Office
(SAO) Report No. 9311 and the Certificate of Settlement and
Balances (CSB)?

NO. The alleged appeal from the CSB is unclear from the records, and in
light of the foregoing statement of the Ad Hoc Committee it is obvious
that such appeal was not raised. The said committee is correct that the
the pendency of the appeal was no obstacle to the investigation and
resolution of the administrative cases.
3. Did the Office of the President commit grave abuse of
discretion in holding the petitioners guilty of abuse of authority
in denying the Municipality of Tiwi of its rightful share in the
P40,724,471.74 which the Province of Albay had received from
the NPC under the Memorandum of Agreement?
Petitioners Contention: The P40M received by the Province from NPC
represents part of the price paid for properties owned by the province in
a corporate capacity and repurchased by the former owner. It
constitutes payment of a debt and not of a tax, which debt arose from
and was a consequence of, the MOA, and nowhere in the Preal Property
Tax Code is there any provision requiring provinces to share with the
municipalities the proceeds of a private sale. What are required to be
shared are only the collections of real property taxes and Special
Education Fund (SEF)
SC: NO. When the Province sold at public auction the delinquent
properties consisting of buildings, machines, and similar improvements,
it was acting not only in its own behalf but also in behalf of the
municipalities concerned. And rightly so, because under Section 60 of
P.D. No. 477, the Province, thru the Provincial Treasurer, is duty bound
to collect taxes throughout the province, including the national,
provincial, and municipal taxes and other revenues authorized by law.
Moreover, under Section 73 of the Real Property Tax Code, the
provincial or city treasurer is the one authorized to advertise the sale at
public auction of the entire delinquent real property, except real
property mentioned in Subsection (a) of Section 40, to satisfy all the
taxes and penalties due and costs of sale. He is also authorized to buy
the delinquent real property in the name of the province if there is no
bidder or if the highest bid is for an amount not sufficient to pay the
taxes, penalties, and costs of sale.
Since in this case, there was no bidder, the provincial treasurer could
buy, as he did, the delinquent properties in the name of the province for
the amount of taxes, penalties due thereon, and the costs of sale, which
included the amounts of taxes due the municipalities concerned. It is
therefore wrong for the petitioners to say that the subject NPC
properties are exclusively owned by the Province. The Municipalities of
Tiwi and Daraga may be considered coowners thereof to the extent of
their respective shares in the real property taxes and the penalties
thereon.
It is conceded that under Section 78 of the Real Property Tax Code,
redemption of delinquency property must be made within one year from

the date of registration of sale of the property. The auction sale of the
NPC properties was held on 30 March 1989 and declared valid by this
Court in its 4 June 1990 decision. It was only on 29 July 1992 that the
NPC offered to repurchase its former properties by paying its tax
liabilities. When the Province accepted the offer, it virtually waived the
one year redemption period. And having thus allowed the NPC to
redeem the subject properties and having received part of the
redemption price, the Province should have shared with the
municipalities concerned those amounts paid by the NPC in the
manner and proportion as if the taxes had been paid in regular
course conformably with Section 87(c) of the Real Property Tax
Code.
4. Did the Office of the President commit grave abuse of
discretion in suspending in O.P. Cases Nos. 5469 and 5450
petitioner Salalima, who was reelected on 11 May 1992, for an
alleged administrative offense committed during his first term;
and in suspending in O.P. Case No. 5469 the other petitioners,
some of whom were elected and others reelected on 11 May
1992, for an alleged administrative offense committed in 1989?
The Court held that the petitioners are correct that Salalima could no
longer be held administratively liable in O.P. Case No. 5450 in
connection with the negotiated contract entered into on 6 March 1992
with RYU Construction for additional rehabilitation work at the Tabaco
Public Market. Nor could the petitioners be held administratively liable
in O.P. Case No. 5469 for the execution in November 1989 of the
retainer contract with Atty. Jesus Cornago and the Cortes and Reyna
Law Firm. This is so because public officials cannot be subject to
disciplinary action for administrative misconduct committed
during a prior term, as held in Pascual vs. Provincial Board of Nueva
Ecija and Aguinaldo vs. Santos.
The rule adopted in Pascual, qualified in Aguinaldo insofar as criminal
cases are concerned, is still a good law. Such a rule is not only founded
on the theory that an officials reelection expresses the sovereign will of
the electorate to forgive or condone any act or omission constituting a
ground for administrative discipline which was committed during his
previous term. We may add that sound policy dictates it. To rule
otherwise would open the floodgates to exacerbating endless partisan
contests between the reelected official and his political enemies, who
may not stop to hound the former during his new term with
administrative cases for acts alleged to have been committed during his
previous term. His second term may thus be devoted to defending
himself in the said cases to the detriment of public service. This
doctrine of forgiveness or condonation cannot, however, apply
to criminal acts which the reelected official may have
committed during his previous term.
The Court, thus rule that, any admin liability that Salalima might
have incurred. These are deemed extinguished by his reelection

in the 11 May 1992 synchronized elections. So are the liabilities,

if any, of petitioner members of the Sangguniang Panlalawigan
ng Albay, who were reelected.
This is, however, without prejudice to the institution of
appropriate civil and criminal cases as may be warranted
by the attendant circumstances.

5. Did the Office of the President commit grave abuse of

discretion in holding the petitioners in O.P. Case No. 5469 guilty
of grave abuse of authority under Section 60(e) of the Local
Government Code of 1991 although they were charged under
Section 3(g) of R.A. No. 3019, as amended, and Section 60(d) of
the Local Government Code of 1991, thereby depriving them of
due process of law?

Having thus held that the petitioners could no longer be

administratively liable in O.P. Case No. 5469, we find it unnecessary to
delve into, and pass upon, the fifth issue.