G.R. No.

199027 construed taking into account the other statutes that pertain to the same subject of representation
THE OFFICE OF THE SOLICITOR GENERAL (OSG), Petitioner,
vs.
THE HONORABLE COURT OF APPEALS and THE MUNICIPAL GOVERNMENT OF
SAGUIRAN, LANAO DEL SUR, Respondents.
This resolves the Petition for Certiorari filed by the Office of the Solicitor General (OSG) to
assail the Resolutions, where the CA denied the OSG's motion to be excused from filing for and
on behalf of respondent Municipal Government of Saguiran, Lanao del Sur (Municipality of
Saguiran) the memorandum, or any other pleading that would be required by the appellate court
relative to the appeal.
The Municipality of Saguiran was named a respondent in a petition for mandamus filed with the
Regional Trial Court (RTC) of Lanao del Sur by the former members of the Sangguniang
Bayanof Saguiran. Therein petitioners sought to compel the Municipality of Saguiran to pay them
their unpaid terminal leave benefits. The Municipality of Saguiran sought the trial court’s
dismissal of the petition through its Verified Answer with Affirmative Defenses and
Counterclaim which was signed by Municipal Mayor and Municipal Treasurer.
The RTC dismissed the petition on the ground that the act being sought was not a ministerial
duty.
The Municipality partially appealed the order of the RTC to the CA. The CA issued a notice
requiring the OSG to file a memorandum for the Municipality with a non-extendable period of
30 days.
The OSG initially moved for a suspension of the period to file, explaining that it had not received
any document or pleading in connection with the case. The CA subsequently denied this on the
ground that the relief sought was not among the remedies allowed under the Rules of Court.
The OSG filed a Manifestation and Motion requesting to be excused from filing the
memorandum on the ground of lack of legal authority to represent the Municipality of Saguiran.
It reasoned that the Municipality of Saguiran had to be represented by its legal officer, pursuant
to Article XI(3)(i) of Republic Act No. 7160, otherwise known as the Local Government Code
of 1991 (LGC).
in courts. As the Court explained in Philippine Economic Zone Authority v. Green Asia
Construction & Development Corporation:
Statutes are in pari materia when they relate to the same person or thing or to the same
class of persons or things, or object, or cover the same specific or particular subject matter.
It is axiomatic in statutory construction that a statute must be interpreted, not only to be
consistent with itself, but also to harmonize with other laws on the same subject matter, as
to form a complete, coherent and intelligible system. The rule is expressed in the maxim,
"interpretare et concordare legibus est optimus interpretandi," or every statute must be so
construed and harmonized with other statutes as to form a uniform system of
jurisprudence.
On the matter of counsels’ representation for the government, the Administrative Code is not the
only law that delves on the issue. Specifically for local government units, the LGC limits the
lawyers who are authorized to represent them in court actions, as the law defines the mandate of
a local government unit’s legal officer.
The provision of the LGC not only identifies the powers and functions of a local government
unit’s legal officer. It also restricts, as it names, the lawyer who may represent the local
government unit as its counsel in court proceedings. Being a special law on the issue of
representation in court that is exclusively made applicable to local government units, the LGC
must prevail over the provisions of the Administrative Code, which classifies only as a general
law on the subject matter.
Given the foregoing, the CA committed grave abuse of discretion amounting to lack or excess of
jurisdiction in issuing the assailed resolutions which obligated the OSG to represent the
Municipality of Saguiran. Such ruling disregarded the provisions of the LGC that vested
exclusive authority upon legal officers to be counsels of local government units. Even the
employment of a special legal officer is expressly allowed by the law only upon a strict condition
that the action or proceeding which involves the component city or municipality is adverse to the
provincial government or to another component city or municipality.

The OSG argues that the legal officer of a local government unit must represent it in its lawsuits,
citing the provisions of the LGC and jurisprudence which bar local government units from
obtaining the services of a lawyer other than their designated legal officers.

Issue/s: W/N the CA committed grave abuse of discretion in compelling the OSG to represent
the Municipal Gov’t of Saguiran, Lanao Del Sur. (YES)

Ruling: A cursory reading of the powers of the OSG may create the impression that the OSG’s
mandate under the Administrative Code is unqualified, and thus broad enough to include
representation of a local government unit in any case filed by or against it, as local government
units, indisputably, form part of the Government of the Philippines. Towards a proper resolution
of the pending issue, however, the OSG’s mandate under the Administrative Code must be
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PHILIPPINE ECONOMIC ZONE AUTHORITY, Petitioner,
v.
GREEN ASIA CONSTRUCTION &DEVELOPMENT CORPORATION, Respondents
The parties to this case – petitioner Philippine Economic Zone Authority (PEZA), formerly the
Export Processing Zone Authority (EPZA), and respondent Green Asia Construction &
Development Corporation (hereinafter Green Asia) were parties to a contract for a road
network/storm drainage project. The project was awarded to Green Asia and Renato P. Legaspi,
the president of Green Asia, signed the contract on 23 September 1992. The stipulations in
the contract include the contract price, the mode of payment, advance payment, and the progress
payment. These stipulations found in Articles III to VI of the contract comprised all the liabilities
pertaining to EPZA. EPZA was later on effectively succeeded by PEZA.
On 26 March 1996, Green Asia sent a letter to the PEZA Director General invoking Presidential
Decree (PD) No. 1594, notified PEZA of Green Asia’s claim for price escalation in the amount
of ₱ 9,860,169.58. This claim was denied by PEZA through a letter. The denial of the claim was
anchored on Section 8, PD 1594, requiring proof of the increase or decrease in construction cost
due to the direct acts of the government.
Despite the denial, Green Asia insisted on its claim and followed it up with three letters sent to
PEZA from 1997 to 2000. PEZA reiterated the denial of the claim. Because of these repeated
denials, Green Asia made a "final demand," which was received by PEZA on 29 November 2006.
On 2 August 2007, Green Asia sent to PEZA another notice, labelled "final demand notice," a
copy of which was furnished to the Office of the President. Subsequent to the final demand notice
to PEZA, Green Asia sent then President Gloria Macapagal Arroyo, on 14 November 2007, a
letter with the heading "Appeal for the Settlement of Unpaid Claims for Price Escalation Under
Project of the Philippines Economic Zone Authority." In this letter, Green Asia asked her to
intervene for the affirmative resolution of its claim against PEZA in the amount of ₱
12,360,525.69 The Office of the President (OP) took cognizance of the letter as an appeal,
docketed it as O.P. Case No. 07-K-451, and ordered Green Asia to pay the appeal fee and PEZA
to forward the complete records of the case.
Issue/s:
Whether Presidential Decree 1594 requires the contractor to prove that the price increase of
construction materials was due to the direct acts of the government before a price escalation is
granted in this payment dispute in a construction contract.
Ruling:
The Court agrees with the ruling of the appellate court that the OP correctly construed PD 1594
as being in pari materia to PD 454. Since the two presidential decrees are in pari materia, there
is a need to construe them together.
Statutes are in pari materia when they relate to the same person or thing or to the same class of
persons or things, or object, or cover the same specific or particular subject matter.
It is axiomatic in statutory construction that a statute must be interpreted, not only to be consistent
with itself, but also to harmonize with other laws on the same subject matter, as to form a
complete, coherent and intelligible system. The rule is expressed in the maxim, "interpretare et
concordare legibus est optimus interpretandi," or every statute must be so construed and
harmonized with other statutes as to form a uniform system of jurisprudence.
PD 454 which was enacted prior to PD 1594, was where the phrase "direct acts of the
government" was explained to cover the increase of prices during the effectivity of a government
infrastructure contract. The phrase was first used in Republic Act (RA) No. 1595, which was
amended by PD 454. The latter amended R.A. No. 1595 by supplying the meaning of the phrase
"direct acts of the government" and expressly including the increase of prices of gasoline within
the coverage of that phrase. Consequently, when PD 1594 reproduced the phrase without
supplying a contrary or different definition, the definition provided by the earlier enacted PD 454
was deemed adopted by the later decree. Thus, proof of an increase in fuel and cement price and
a subsequent increase in the cost of labor and relevant construction materials during the contract
period are considered a compliance with the IRR requirements for a claim for price escalation.
The parties separately invoke PD 1594 and its IRR. A reading of their provisions, however, leads
to the conclusion that "price adjustment" under PD 1594 is actually the same as "price escalation"
under the IRR. Just as the term "price escalation" is not found in PD 1594, so is "price adjustment"
in the IRR. These concepts are, evidently, one and the same. They have different names, but
pertain to the same thing -- the adjustment of the contract price due to certain circumstances. The
computation of the adjustment has been explained in detail as price escalation in the IRR, found
in CI 12. At first glance, price escalation may be considered as an expansion of the concept of
price adjustment. In truth, however, the IRR did not expand anything, but merely laid out a
guideline for the computation of the adjustment or escalation of price. The two provisions are
therefore not separate and must be read together. Otherwise, if we accept the arguments of both
parties that one is invoking either PD 1594 or the IRR, two different rights would arise therefrom,
which is obviously not intended by the law.
The contract between PEZA and Green Asia did not incorporate provisions prohibiting price
escalation or any clause that may be interpreted as a waiver of the price escalation. Consequently,
payment of price escalation is deemed to have included the provision for the payment of price
escalation.
It was therefore wrong for PEZA to disregard PD 454 by automatically denying the claim of
Green Asia for price escalation or to require the latter to prove that the increase in the construction
cost was due to the direct acts of the government. PD 454 actually bridges the gap between PD
1594 and its IRR. PD 1594 no longer explains the provision on price adjustment, because it is
already found in PD 454 and in older laws.
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G.R. No. 156052
SOCIAL JUSTICE SOCIETY (SJS), VLADIMIR ALARIQUE T. CABIGAO, and
BONIFACIO S. TUMBOKON, Petitioners,
vs.
HON. JOSE L. ATIENZA, JR., in his capacity as Mayor of the City of Manila, Respondent.
In this original petition for mandamus, petitioners Social Justice Society (SJS), Vladimir
Alarique T. Cabigao and Bonifacio S. Tumbokon seek to compel respondent Hon. Jose L.
Atienza, Jr., mayor of the City of Manila, to enforce Ordinance No. 8027.
On November 20, 2001, the Sangguniang Panlungsod of Manila enacted Ordinance No.
8027. Respondent mayor approved the ordinance on November 28, 2001. It became effective on
December 28, 2001, after its publication.
Ordinance No. 8027 was enacted pursuant to the police power delegated to local government
units, a principle described as the power inherent in a government to enact laws, within
constitutional limits, to promote the order, safety, health, morals and general welfare of the
society.
Ordinance No. 8027 reclassified the area described therein from industrial to commercial and
directed the owners and operators of businesses disallowed under Section 1 to cease and desist
from operating their businesses within six months from the date of effectivity of the ordinance.
Among the businesses situated in the area are the so-called "Pandacan Terminals" of the oil
companies Caltex (Philippines), Inc., Petron Corporation and Pilipinas Shell Petroleum
Corporation.
On June 26, 2002, the City of Manila and the Department of Energy (DOE) entered into a
memorandum of understanding (MOU) with the oil companies in which they agreed that "the
scaling down of the Pandacan Terminals [was] the most viable and practicable option."
The Sangguniang Panlungsod ratified the MOU in Resolution No. 97. In the same resolution,
the Sanggunian declared that the MOU was effective only for a period of six months starting July
25, 2002. Thereafter, on January 30, 2003, the Sanggunian adopted Resolution No. 13 extending
the validity of Resolution No. 97 to April 30, 2003 and authorizing Mayor Atienza to issue special
business permits to the oil companies. Resolution No. 13, s. 2003 also called for a reassessment
of the ordinance.
Petitioners contend that respondent has the mandatory legal duty, under Section 455 (b) (2) of
the Local Government Code (RA 7160), to enforce Ordinance No. 8027 and order the removal
of the Pandacan Terminals of the oil companies. Instead, he has allowed them to stay.
Respondent’s defense is that Ordinance No. 8027 has been superseded by the MOU and the
resolutions. However, he also confusingly argues that the ordinance and MOU are not
inconsistent with each other and that the latter has not amended the former. He insists that the
ordinance remains valid and in full force and effect and that the MOU did not in any way
prevent him from enforcing and implementing it. He maintains that the MOU should be
considered as a mere guideline for its full implementation
Issue: W/N respondent has the mandatory legal duty, under Section 455 (b) (2) of the Local
Government Code (RA 7160), to enforce Ordinance No. 8027 and order the removal of the
Pandacan Terminals of the oil companies. (Yes)
Ruling:
The Local Government Code imposes upon respondent the duty, as city mayor, to "enforce all
laws and ordinances relative to the governance of the city." One of these is Ordinance No.
8027. As the chief executive of the city, he has the duty to enforce Ordinance No. 8027 as long
as it has not been repealed by the Sanggunian or annulled by the courts.
These officers cannot refuse to perform their duty on the ground of an alleged invalidity of the
statute imposing the duty. The reason for this is obvious. It might seriously hinder the
transaction of public business if these officers were to be permitted in all cases to question the
constitutionality of statutes and ordinances imposing duties upon them and which have not
judicially been declared unconstitutional. Officers of the government from the highest to the
lowest are creatures of the law and are bound to obey it.
The question now is whether the MOU entered into by respondent with the oil companies and
the subsequent resolutions passed by the Sanggunian have made the respondent’s duty to
enforce Ordinance No. 8027 doubtful, unclear or uncertain. This is also connected to the
second issue raised by petitioners, that is, whether the MOU and Resolution Nos. 97, s. 2002
and 13, s. 2003 of the Sanggunian can amend or repeal Ordinance No. 8027.
Assuming that the terms of the MOU were inconsistent with Ordinance No. 8027, the
resolutions which ratified it and made it binding on the City of Manila expressly gave it full
force and effect only until April 30, 2003. Thus, at present, there is nothing that legally hinders
respondent from enforcing Ordinance No. 8027
Ordinance No. 8027 was enacted right after the Philippines, along with the rest of the world,
witnessed the horror of the September 11, 2001 attack on the Twin Towers of the World Trade
Center in New York City. The objective of the ordinance is to protect the residents of Manila
from the catastrophic devastation that will surely occur in case of a terrorist attack on the
Pandacan Terminals. No reason exists why such a protective measure should be delayed.
WHEREFORE, the petition is hereby GRANTED. Respondent Hon. Jose L. Atienza, Jr., as
mayor of the City of Manila, is directed to immediately enforce Ordinance No. 8027.
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