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G.R. No. 72841 January 29, 1987 PROVINCE OF CEBU, petitioner, vs. HONORABLE INTERMEDIATE APPELLATE COURT and ATTY. PABLO P. GARCIA, respondents.

GUTIERREZ, JR., J.: This is a petition to review the decision of the respondent Intermediate Appellate Court in A.C. G.R. CV No. 66502 entitled "Governor Rene Espina, et. at v. Mayor Sergio Osmea, Jr., et. al, Atty. Pablo P. Garcia v. Province of Cebu" 1 affirming with modification the order of the Court of First Instance of Cebu, Branch VII, granting respondent Pablo P. Garcia's claim for compensation for services rendered as counsel in behalf of the respondent Province of Cebu. The facts of the case are not in dispute. On February 4, 1964, while then incumbent Governor Rene Espina was on official business in Manila, the Vice-Governor, Priscillano Almendras and three (3) members of the Provincial Board enacted Resolution No. 188, donating to the City of Cebu 210 province. owned lots all located in the City of Cebu, with an aggregate area of over 380 hectares, and authorizing the Vice-Governor to sign the deed of donation on behalf of the province. The deed of donation was immediately executed in behalf of the Province of Cebu by Vice-Governor Almendras and accepted in behalf of the City of Cebu by Mayor Sergio Osmea, Jr. The document of donation was prepared and notarized by a private lawyer. The donation was later approved by the Office of the President through Executive Secretary Juan Cancio. According to the questioned deed of donation the lots donated were to be sold by the City of Cebu to raise funds that would be used to finance its public improvement projects. The City of Cebu was given a period of one (1) year from August 15, 1964 within which to dispose of the donated lots. Upon his return from Manila, Governor Espina denounced as Legal and immoral the action of his colleagues in donating practically all the patrimonial property of the province of Cebu, considering that the latter's income was less than one. fourth (1/4) of that of the City of Cebu. To prevent the sale or disposition of the lots, the officers and members of the Cebu Mayor's League (in behalf of their respective municipalities) along with some taxpayers, including Atty. Garcia, filed a case seeking to have the donation declared illegal, null and void. It was alleged in the complaint that the plaintiffs were filing it for and in behalf of the Province of Cebu in the nature of a derivative suit. Named defendants in the suit were the City of Cebu, City Mayor Sergio Osmea, Jr. and the Cebu provincial officials responsible for the donation of the province-owned lots. The case was docketed as Civil Case No. R-8669 of the Court of First Instance of Cebu and assigned to Branch VI thereof. Defendants City of Cebu and City Mayor Osmea, Jr. filed a motion to dismiss the case on the ground that plaintiffs did not have the legal capacity to sue. Subsequently, in an order, dated May, 1965, the court dismissed Case No. R-8669 on the ground that plaintiffs were not the real parties in interest in the case. Plaintiffs filed a motion for reconsideration of the order of dismissal. This motion was denied by the Court. Meanwhile, Cebu City Mayor Sergio Osmea, Jr. announced that he would borrow funds from the Philippine National Bank (PNB) and would use the donated lots as collaterals. In July, 1965, the City of Cebu advertised the sale of an the lots remaining unsold. Thereupon, Governor Espina, apprehensive that the lots would be irretrievably lost by the Province of Cebu, decided to go to court. He engaged the services of respondent Garcia in filing and prosecuting the case in his behalf and in behalf of the Province of Cebu. Garcia filed the complaint for the annulment of the deed of donation with an application for the issuance of a writ of preliminary injunction, which application was granted on the same day, August 6, 1965. The complaint was later amended to implead Cebu City Mayor Carlos P. Cuizon as additional defendant in view of Fiscal Numeriano Capangpangan's manifestation stating that on September 9, 1965, Sergio Osmea, Jr. filed his certificate of Candidacy for senator, his position/office having been assumed by City Mayor Carlos P. Cuizon. Sometime in 1972, the Provincial Board passed a resolution authorizing the Provincial Attorney, Alfredo G. Baguia, to enter his appearance for the Province of Cebu and for the incumbent Governor, Vice-Governor and members of the Provincial Board in this case.

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On January 30, 1973, Alfredo G. Baguia, Provincial Attorney of the Province of Cebu, entered his appearance as additional counsel for the Province of Cebu and as counsel for Governor Osmundo Rama, Vice-Governor Salutario Fernandez and Board Members Leonardo Enad, Guillermo Legazpi, and Rizalina Migallos. On January 31, 1973, Atty. Baguia filed a complaint in intervention stating that intervenors Province of Cebu and Provincial Board of Cebu were joining or uniting with original plaintiff, former Governor of Cebu, Rene Espina. They adopted his causes of action, claims, and position stated in the original complaint filed before the court on August 6, 1965. On June 25, 1974, a compromise agreement was reached between the province of Cebu and the city of Cebu. On July 15, 1974, the court approved the compromise agreement and a decision was rendered on its basis. On December 4, 1974, the court issued an order directing the issuance of a writ of execution to implement the decision dated July 15, 1974, to wit: 1. Ordering the City of Cebu to return and deliver to the Province of Cebu all the lots enumerated in the second paragraph hereof; 2. Ordering the Province of Cebu to pay the amount of One Million Five Hundred Thousand Pesos (P1,500,000.00) to the City of Cebu for and in consideration of the return by the latter to the former of the aforesaid lots; 3. Declaring the retention by the City of Cebu of the eleven (11) lots mentioned in paragraph No. 1 of the compromise agreement, namely, Lot Nos. 1141, 1261, 1268, 1269, 1272, 1273, 917, 646-A, 646A-4-0 and 10107-C; 4. Ordering the City of Cebu or the City Treasurer to turn over to the Province of Cebu the amount of P187948.93 mentioned in Annex "A" of the defendants manifestation dated October 21, 1974; 5. Declaring the City of Cebu and an its present and past officers completely free from liabilities to third persons in connection with the aforementioned lots, which liabilities if any, shall be assumed by the Province of Cebu; 6. Ordering the Register of Deeds of the City of Cebu to cancel the certification of titles in the name of the City of Cebu covering the lots enumerated in the second paragraph of this order and to issue new ones in lieu thereof in the name of the Province of Cebu. For services rendered in Civil Case no. 238-BC, CFI of Cebu, respondent Pablo P. Garcia filed through counsel a Notice of Attorney's Lien, dated April 14, 1975, praying that his statement of claim of attorney's lien in said case be entered upon the records thereof, pursuant to Section 37, Rule 138 of the Rules of Court. To said notice, petitioner Province of Cebu filed through counsel, its opposition dated April 23, 1975, stating that the payment of attorney's fees and reimbursement of incidental expenses are not allowed by law and settled jurisprudence to be paid by the Province. A rejoinder to this opposition was filed by private respondent Garcia. After hearing, the Court of First Instance of Cebu, then presided over by Judge Alfredo Marigomen, rendered judgment dated May 30, 1979, in favor of private respondent and against petitioner Province of Cebu, declaring that the former is entitled to recover attorney's fees on the basis of quantum meruit and fixing the amount thereof at P30,000.00. Both parties appealed from the decision to the Court of Appeals. In the case of private respondent, however, he appealed only from that portion of the decision which fixed his attorney's fees at P30,000.00 instead of at 30% of the value of the properties involved in the litigation as stated in his original claim On October 18, 1985, the Intermediate Appellate Court rendered a decision affirming the findings and conclusions of the trial court that the private respondent is entitled to recover attorney's fees but fixing the amount of such fees at 5% of the market value of the properties involved in the litigation as of the date of the filing of the claim in 1975. The dispositive portion of the decision reads: WHEREFORE, except for the aforementioned modification that the compensation for the services rendered by the Claimant Atty. Pablo P. Garcia is fixed at five percent (5%) of the total fair market value of the lots in question, the order appealed from is hereby affirmed in all other respects.

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Both parties went to the Supreme Court with private respondent questioning the fixing of his attorney's fees at 5% instead of 30% of the value of the properties in litigations as prayed for in his claims. However, the private respondent later withdrew his petition in G.R. No. 72818 with the following explanation: That after a long and serious reflection and reassessment of his position and intended course of action and, after seeking the views of his friends, petitioner has come to the definite conclusion that prosecuting his appeal would only result in further delay in the final disposition of his claim (it has been pending for the last 10 years 4 in the CFI and 6 in the Court of Appeals, later Intermediate Appellate Court) and that it would be more prudent and practicable to accept in full the decision of the Intermediate Appellate Court. Hence, only the petition of the Province of Cebu is pending before this Court. The matter of representation of a municipality by a private attorney has been settled in Ramos v. Court of Appeals(108 SCRA 728). Collaboration of a private law firm with the fiscal and the municipal attorney is not allowed. 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 The above provision, complemented by Section 3 of the Local Autonomy Law, is clear in providing that only the provincial fiscal and the municipal attorney can represent a province or municipality in its 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 (De Guia v. The Auditor General 44 SCRA 169; Municipality of Bocaue, et. al. v. Manotok, 93 Phil. 173; Enriquez, Sr., v. Honorable Gimenez, 107 Phil. 932) as when he represents the province against a municipality. The lawmaker, in requiring that the local government should be represented in its court cases by a government lawyer, like its municipal attorney and the provincial fiscal intended that the local government should not be burdened with the expenses of hiring a private lawyer. The lawmaker also assumed that the interests of the municipal corporation would be best protected if a government lawyer handles its litigations. It is to be expected that the municipal attorney and the fiscal would be faithful and dedicated to the corporation's interests, and that, as civil service employees, they could be held accountable for any misconduct or dereliction of duty (See Ramos v. Court of Appeals, supra). However, every rule is not without an exception, Ibi quid generaliter conceditur; inest haec exceptio, si non aliquid sit contra jus fasque (Where anything is granted generally, this exception is implied; that nothing shall be contrary to law and right). Indeed, equity, as well as the exceptional situation facing us in the case at bar, require a departure from the established rule. The petitioner anchors its opposition to private respondent's claim for compensation on the grounds that the employment of claimant as counsel for the Province of Cebu by then Governor Rene Espina was unauthorized and violative of Section 1681 to 1683 in relation to Section 1679 of the Revised Administrative Code and that the claim for attorney's fees is beyond the purview of Section 37, Rule 138 of the Rules of Court. It is argued that Governor Espina was not authorized by the Provincial Board, through a board resolution, to employ Atty. Pablo P. Garcia as counsel of the Province of Cebu. Admittedly, this is so. However, the circumstances obtaining in the case at bar are such that the rule cannot be applied. The Provincial Board would never have given such authorization. The decision of the respondent court elucidates the matter thus: ... The provisions of Sections 1681 to 1683 of the Revised Administrative Code contemplate a normal situation where the adverse party of the province is a third person as in the case of Enriquez v. Auditor General, 107 Phil 932. In the present case, the controversy involved an intramural fight between the Provincial Governor on one hand and the members of the Provincial Board on the other hand. Obviously it is unthinkable for the Provincial Board to adopt a resolution authorizing the Governor to employ Atty. Garcia to act as counsel for the Province of Cebu for the purpose of filing and prosecuting a case against the

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members to the same Provincial Board According to the claimant Atty. Garcia, how can Governor Espina be expected to secure authority from the Provincial Board to employ claimant as counsel for the Province of Cebu when the very officials from whom authority is to be sought are the same officials to be sued, It is simply impossible that the Vice-Governor and the members of the Provincial Board would pass a resolution authorizing Governor Espina to hire a lawyer to file a suit against themselves. xxx xxx xxx Under Section 2102 of the Revised Administrative Code it is the Provincial Board upon whom is vested the authority "to direct, in its discretion, the bringing or defense of civil suits on behalf of the Provincial Governor ___." Considering that the members of the Provincial Board are the very ones involved in this case, they cannot be expected to directed the Provincial Fiscal the filing of the suit on behalf of the provincial government against themselves. Moreover, as argued by the claimant, even if the Provincial Fiscal should side with the Governor in the bringing of this suit, the Provincial Board whose members are made defendants in this case, can simply frustrate his efforts by directing him to dismiss the case or by refusing to appropriate funds for the expenses of the litigation. ... Consequently, there could have been no occasion for the exercise by the Provincial Fiscal of his powers and duties since the members of the Provincial Board would not have directed him to file a suit against them. A situation obtains, therefore, where the Provincial Governor, in behalf of the Province of Cebu, seeks redress against the very members of the body, that is, the Provincial Board, which, under the law, is to provide it with legal assistance. A strict application of the provisions of the Revise Administrative Code on the matter would deprive the plaintiffs in the court below of redress for a valid grievance. The provincial board authorization required by law to secure the services of special counsel becomes an impossibility. The decision of the respondent court is grounded in equity a correction applied to law, where on account of the general comprehensiveness of the law, particular exceptions not being provided against, something is wanting to render it perfect. It is also argued that the employment of claimant was violative of sections 1681 to 1683 of the Revised Administrative Code because the Provincial Fiscal who was the only competent official to file this case was not disqualified to act for the Province of Cebu. Respondent counsel's representation of the Province of Cebu became necessary because of the Provincial Board's failure or refusal to direct the bringing of the action to recover the properties it had donated to the City of Cebu. The Board more effectively disqualified the Provincial Fiscal from representing the Province of Cebu when it directed the Fiscal to appear for its members in Civil Case No. R-8669 filed by Atty. Garcia, and others, to defend its actuation in passing and approving Provincial Board Resolution No. 186. The answer of the Provincial Fiscal on behalf of the Vice-Governor and the Provincial Board members filed in Civil Case No. R-8669; (Exhibit "K") upholds the validity and legality of the donation. How then could the Provincial Fiscal represent the Province of Cebu in the suit to recover the properties in question? How could Governor Espina be represented by the Provincial Fiscal or seek authorization from the Provincial Board to employ special counsel? Nemo tenetur ad impossibile (The law obliges no one to perform an impossibility).lwphl@it Neither could a prosecutor be designated by the Department of Justice. Malacaang had already approved the questioned donation Anent the question of liability for respondent counsel's services, the general rule that an attorney cannot recover his fees from one who did not employ him or authorize his employment, is subject to its own exception. Until 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) Even where an attorney is employed by an unauthorized person to represent a client, the latter will be bound where it has knowledge of the fact that it is being represented by an attorney in a particular litigation and takes no prompt measure to repudiate the assumed authority. Such acquiescence in the employment of an attorney as occurred in this case is tantamount to ratification (Tan Lua v. O' Brien, 55 Phil. 53). The act of the successor provincial board and provincial officials in allowing respondent Atty. Pablo P. Garcia to continue as counsel and in joining him in the suit led the counsel to believe his services were still necessary. We apply a rule in the law of municipal corporations: "that a municipality may become obligated upon an implied contract to pay the reasonable value of the benefits accepted or appropriated by it as to which it has the general power to contract. The doctrine of implied municipal liability has been said to apply to all cases where money or other property of a party is received under such circumstances that the general law, independent of express contract implies an obligation upon the municipality to do justice with respect to the same." (38 Am Jur. Sec. 515, p. 193):

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The obligation of a municipal corporation upon the doctrine of an implied contract does not connote an enforceable obligation. Some specific principle or situation of which equity takes cognizance must be the foundation of the claim. The principle of liability rests upon the theory that the obligation implied by law to pay does not originate in the unlawful contract, but arises from considerations outside it. The measure of recovery is the benefit received by the municipal corporation. The amount of the loan, the value of the property or services, or the compensation specified in the contract, is not the measure. If the price named in the invalid contract is shown to be entirely fair and reasonable not only in view of the labor done, but also in reference to the benefits conferred, it may be taken as the true measure of recovery. The petitioner can not set up the plea that the contract was ultra vires and still retain benefits thereunder. Having regarded the contract as valid for purposes of reaping some benefits, the petitioner is estopped to question its validity for the purposes of denying answerability. The trial court discussed the services of respondent Garcia as follows: ... Thus because of his effort in the filing of this case and in securing the issuance of the injunction preventing the City of Cebu and Sergio Osmea, Jr., from selling or disposing the lots to third parties, on the part of the members of the Provincial Board from extending the date of the automatic reversion beyond August 15, 1965, on the part of the Register of Deeds from effecting the transfer of title of any of the donated lots to any vendee or transferee, the disposition of these lots by the City of Cebu to third parties was frustrated and thus: saved these lots for their eventual recovery by the province of Cebu. Actually it was Governor Espina who filed the case against Cebu City and Mayor Osmea. Garcia just happened to be the lawyer, Still Atty. Garcia is entitled to compensation. To deny private respondent compensation for his professional services would amount to a deprivation of property without due process of law (Cristobal v. Employees' Compensation Commission, 103 SCRA 329). The petitioner alleges that although they do not deny Atty. Garcia's services for Governor Espina (who ceased to be such Governor of Cebu on September 13, 1969) and the original plaintiffs in the case, "it cannot be said with candor and fairness that were it not for his services the lots would have already been lost to the province forever, because the donation itself he was trying to enjoin and annul in said case was subject to a reversion clause under which lots remaining undisposed of by the City as of August 15, 1965 automatically reverted to the province and only about 17 lots were disposed of by August 15, 1965." We quote respondent counsel's comment with approval: xxx xxx xxx While it is true that the donation was subject to a reversion clause, the same clause gave the Provincial Board the discretion to extend the period of reversion beyond August 15, 1965 (see paragraph 3 of donation). With the known predisposition of the majority of the members of the Provincial Board, there would have been no impediment to the extension of the reversion date to beyond August 15, 1965. Once the date of reversion is extended, the disposition of an the donated lots would be only a matter of course. We have carefully reviewed the records of this case and conclude that 30% or even 5% of properties already worth (P120,000,000.00) in 1979 as compensation for the private respondent's services is simply out of the question. The case handled by Atty. Garcia was decided on the basis of a compromise agreement where he no longer participated. The decision was rendered after pre-trial and without any hearing on the merits. The factual findings and applicable law in this petition are accurately discussed in the exhaustive and well-written Order of then Trial Judge, now Court of Appeals Justice Alfredo Marigomen We agree with his determination of reasonable fees for the private lawyer on the basis of quantum meruit. The trial court fixed the compensation at P30,000.00 and ordered reimbursement of actual expenses in the amount of P289.43. WHEREFORE, the questioned October 18, 1985 decision of the Intermediate Appellate Court is set aside. The Order of the Trial Court dated May 30, 1979 is REINSTATED. SO ORDERED.

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G.R. No. 110249 August 21, 1997 ALFREDO TANO, BALDOMERO TANO, DANILO TANO, ROMUALDO TANO, TEOCENES MIDELLO, ANGEL DE MESA, EULOGIO TREMOCHA, FELIPE ONGONION, JR., ANDRES LINIJAN, ROBERT LIM, VIRGINIA LIM, FELIMON DE MESA, GENEROSO ARAGON, TEODORICO ANDRE, ROMULO DEL ROSARIO, CHOLITO ANDRE, ERICK MONTANO, ANDRES OLIVA, VITTORIO SALVADOR, LEOPOLDO ARAGON, RAFAEL RIBA, ALEJANDRO LEONILA, JOSE DAMACINTO, RAMIRO MANAEG, RUBEN MARGATE, ROBERTO REYES, DANILO PANGARUTAN, NOE GOLPAN, ESTANISLAO ROMERO, NICANOR DOMINGO, ROLDAN TABANG, ADRIANO TABANG, FREDDIE SACAMAY, MIGUEL TRIMOCHA, PACENCIO LABABIT, PABLO H. OMPAD, CELESTINO A. ABANO, ALLAN ALMODAI, BILLY D. BARTOLAY, ALBINO D. LIQUE, MECHOR J. LAYSON, MELANIE AMANTE, CLARO E. YATOC, MERGELDO B. BALDEO, EDGAR M. ALMASETA, JOSELITO MANAEG, LIBERATO ANDRADA, JR., ROBERTO BERRY, RONALD VILLANUEVA, EDUARDO VALMORIA, WILFREDO MENDOZA, NAPOLEON BABANGGA, ROBERTO TADEPA, RUBEN ASINGUA, SILVERIO GABO, JERRY ROMERO, DAVID PANGGARUTAN, DANIEL PANGGARUTAN, ROMEO AGAWIN, FERNANDO EQUIZ, DITO LEQUIZ, RONILO MODERABLE, BENEDICTO TORRES, ROSITO A. VALDEZ, CRESENCIO A. SAYANG, NICOMEDES S. ACOSTA, ERENEO A. SEGARINO, JR., WILFREDO A. RAUTO, DIOSDADO A. ACOSTA, BONIFACIO G. SISMO, TACIO ALUBA, DANIEL B. BATERZAL, ELISEO YBAEZ, DIOSDADO E. HANCHIC, EDDIE ESCALICAS, ELEAZAR B. BATERZAL, DOMINADOR HALICHIC, ROOSEVELT RISMO-AN, ROBERT C. MERCADER, TIRSO ARESGADO, DANIEL CHAVEZ, DANILO CHAVEZ, VICTOR VILLAROEL, ERNESTO C. YBAEZ, ARMANDO T. SANTILLAN, RUDY S. SANTILLAN, JODJEN ILUSTRISIMO, NESTOR SALANGRON, ALBERTO SALANGRON, ROGER L. ROXAS, FRANCISCO T. ANTICANO, PASTOR SALANGRON, BIENVENIDO SANTILLAN, GILBUENA LADDY, FIDEL BENJAMIN, JOVELITO BELGANO, HONEY PARIOL, ANTONIO SALANGRON, NICASIO SALANGRON, & AIRLINE SHIPPERS ASSOCIATION OF PALAWAN, petitioners, vs. HON. GOV. SALVADOR P. SOCRATES, MEMBERS OF SANGGUNIANG PANLALAWIGAN OF PALAWAN, namely, VICE-GOVERNOR JOEL T. REYES, JOSE D. ZABALA, ROSALINO R. ACOSTA, JOSELITO A. CADLAON, ANDRES R. BAACO, NELSON P. PENEYRA, CIPRIANO C. BARROMA, CLARO E. ORDINARIO, ERNESTO A. LLACUNA, RODOLFO C. FLORDELIZA, GILBERT S. BAACO, WINSTON G. ARZAGA, NAPOLEON F. ORDONEZ and GIL P. ACOSTA, CITY MAYOR EDWARD HAGEDORN, MEMBERS OF SANGGUNIANG PANLUNGSOD NG PUERTO PRINCESA, ALL MEMBERS OF BANTAY DAGAT, MEMBERS OF PHILIPPINE NATIONAL POLICE OF PALAWAN, PROVINCIAL AND CITY PROSECUTORS OF PALAWAN and PUERTO PRINCESA CITY, and ALL JUDGES OF PALAWAN, REGIONAL, MUNICIPAL AND METROPOLITAN,respondents.

DAVIDE, JR., J.: Petitioners caption their petition as one for " Certiorari, Injunction With Preliminary and Mandatory Injunction, with Prayer for Temporary Restraining Order" and pray that this Court: (1) declare as unconstitutional: (a) Ordinance No. 15-92, dated 15 December 1992, of the Sangguniang Panglungsod of Puerto Princesa; (b) Office Order No. 23, Series of 1993, dated 22 January 1993, issued by Acting City Mayor Amado L. Lucero of Puerto Princesa City; and (c) Resolution No. 33, Ordinance No. 2, Series of 1993, dated 19 February 1993, of the Sangguniang Panlalawigan of Palawan; (2) enjoin the enforcement thereof; and (3) restrain respondents Provincial and City Prosecutors of Palawan and Puerto Princesa City and Judges of the Regional Trial Courts, Metropolitan Trial Courts 1 and Municipal Circuit Trial Courts in Palawan from assuming jurisdiction over and hearing cases concerning the violation of the Ordinances and of the Office Order. More appropriately, the petition is, and shall be treated as, a special civil action for certiorari and prohibition. The following is petitioners' summary of the factual antecedents giving rise to the petition: 1. On December 15, 1992, the Sangguniang Panlungsod ng Puerto Princesa City enacted Ordinance No. 15-92 which took effect on January 1, 1993 entitled: "AN ORDINANCE BANNING THE SHIPMENT OF ALL LIVE FISH AND LOBSTER OUTSIDE PUERTO PRINCESA CITY FROM JANUARY 1, 1993 TO JANUARY 1, 1998 AND PROVIDING EXEMPTIONS, PENALTIES AND FOR OTHER PURPOSES THEREOF", the full text of which reads as follows: Sec. 1. Title of the Ordinance. This Ordinance is entitled: AN ORDINANCE BANNING THE SHIPMENT OF ALL LIVE FISH AND LOBSTER OUTSIDE PUERTO PRINCESA CITY FROM JANUARY 1, 1993 TO JANUARY 1, 1998 AND PROVIDING EXEMPTIONS, PENALTIES AND FOR OTHER PURPOSES THEREOF. Sec. 2. Purpose, Scope and Coverage. To effectively free our City Sea Waters from Cyanide and other Obnoxious substance[s], and shall cover all persons and/or entities operating within and

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outside the City of Puerto Princesa who is are (sic) directly or indirectly in the business or shipment of live fish and lobster outside the City. Sec. 3. Definition of terms. For purpose of this Ordinance the following are hereby defined: A. SEA BASS A kind of fish under the family of Centropomidae, better known as APAHAP; B. CATFISH A kind of fish under the family of Plotosidae, better known as HITO-HITO; C. MUDFISH A kind of fish under the family of Orphicaphalisae better known as DALAG; D. ALL LIVE FISH All alive, breathing not necessarily moving of all specie[s] use[d] for food and for aquarium purposes. E. LIVE LOBSTER Several relatively, large marine crusteceans [sic] of the genus Homarus that are alive and breathing not necessarily moving. Sec. 4. It shall be unlawful [for] any person or any business enterprise or company to ship out from Puerto Princesa City to any point of destination either via aircraft or seacraft of any live fish and lobster except SEA BASS, CATFISH, MUDFISH, AND MILKFISH FRIES. Sec. 5. Penalty Clause. Any person/s and or business entity violating this Ordinance shall be penalized with a fine of not more than P5,000.00 or imprisonment of not more than twelve (12) months, cancellation of their permit to do business in the City of Puerto Princesa or all of the herein stated penalties, upon the discretion of the court. Sec. 6. If the owner and/or operator of the establishment found violating the provisions of this ordinance is a corporation or a partnership, the penalty prescribed in Section 5 hereof shall be imposed upon its president and/or General Manager or Managing Partner and/or Manager, as the case maybe [sic]. Sec. 7. Any existing ordinance or any provision of any ordinance inconsistent to [ sic] this ordinance is deemed repealed. Sec. 8. This Ordinance shall take effect on January 1, 1993. SO ORDAINED. xxx xxx xxx 2. To implement said city ordinance, then Acting City Mayor Amado L. Lucero issued Office Order No. 23, Series of 1993 dated January 22, 1993 which reads as follows: In the interest of public service and for purposes of City Ordinance No. PD 426-14-74, otherwise known as "AN ORDINANCE REQUIRING ANY PERSON ENGAGED OR INTENDING TO ENGAGE IN ANY BUSINESS, TRADE, OCCUPATION, CALLING OR PROFESSION OR HAVING IN HIS POSSESSION ANY OF THE ARTICLES FOR WHICH A PERMIT IS REQUIRED TO BE HAD, TO OBTAIN FIRST A MAYOR'S PERMIT" and "City Ordinance No. 15-92, AN ORDINANCE BANNING THE SHIPMENT OF ALL LIVE FISH AND LOBSTER OUTSIDE PUERTO PRINCESA CITY FROM JANUARY 1, 1993 TO JANUARY 1, 1998, you are hereby authorized and directed to check or conduct necessary inspections on cargoes containing live fish and lobster being shipped out from the Puerto Princesa Airport, Puerto Princesa Wharf or at any port within the jurisdiction of the City to any point of destinations [sic] either via aircraft or seacraft. The purpose of the inspection is to ascertain whether the shipper possessed the required Mayor's Permit issued by this Office and the shipment is covered by invoice or clearance issued by the local office of the Bureau of Fisheries and Aquatic Resources and as to compliance with all other existing rules and regulations on the matter.

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Any cargo containing live fish and lobster without the required documents as stated herein must be held for proper disposition. In the pursuit of this Order, you are hereby authorized to coordinate with the PAL Manager, the PPA Manager, the local PNP Station and other offices concerned for the needed support and cooperation. Further, that the usual courtesy and diplomacy must be observed at all times in the conduct of the inspection. Please be guided accordingly. xxx xxx xxx 3. On February 19, 1993, the Sangguniang Panlalawigan, Provincial Government of Palawan enacted Resolution No. 33 entitled: "A RESOLUTION PROHIBITING THE CATCHING, GATHERING, POSSESSING, BUYING, SELLING AND SHIPMENT OF LIVE MARINE CORAL DWELLING AQUATIC ORGANISMS, TO WIT: FAMILY: SCARIDAE (MAMENG), EPINE PHELUS FASCIATUS (SUNO). CROMILEPTES ALTIVELIS(PANTHER OR SENORITA), LOBSTER BELOW 200 GRAMS AND SPAWNING, TRIDACNA GIGAS(TAKLOBO), PINCTADA MARGARITEFERA (MOTHER PEARL, OYSTERS, GIANT CLAMS AND OTHER SPECIES), PENAEUS MONODON (TIGER PRAWN-BREEDER SIZE OR MOTHER), EPINEPHELUS SUILLUS (LOBA OR GREEN GROUPER) AND FAMILY: BALISTIDAE (TROPICAL AQUARIUM FISHES) FOR A PERIOD FIVE (5) YEARS IN AND COMING FROM PALAWAN WATERS", the full text of which reads as follows: WHEREAS, scientific and factual researches [sic] and studies disclose that only five (5) percent of the corals of our province remain to be in excellent condition as [a] habitat of marine coral dwelling aquatic organisms; WHEREAS, it cannot be gainsaid that the destruction and devastation of the corals of our province were principally due to illegal fishing activities like dynamite fishing, sodium cyanide fishing, use of other obnoxious substances and other related activities; WHEREAS, there is an imperative and urgent need to protect and preserve the existence of the remaining excellent corals and allow the devastated ones to reinvigorate and regenerate themselves into vitality within the span of five (5) years; WHEREAS, Sec. 468, Par. 1, Sub-Par. VI of the [sic] R.A. 7160 otherwise known as the Local Government Code of 1991 empowers the Sangguniang Panlalawigan to protect the environment and impose appropriate penalties [upon] acts which endanger the environment such as dynamite fishing and other forms of destructive fishing, among others. NOW, THEREFORE, on motion by Kagawad Nelson P. Peneyra and upon unanimous decision of all the members present; Be it resolved as it is hereby resolved, to approve Resolution No. 33, Series of 1993 of the Sangguniang Panlalawigan and to enact Ordinance No. 2 for the purpose, to wit: ORDINANCE NO. 2 Series of 1993 BE IT ORDAINED BY THE SANGGUNIANG PANLALAWIGAN IN SESSION ASSEMBLED: Sec. 1. TITLE This Ordinance shall be known as an "Ordinance Prohibiting the catching, gathering, possessing, buying, selling and shipment of live marine coral dwelling aquatic organisms, to wit: 1. Family: Scaridae (Mameng), 2. Epinephelus Fasciatus (Suno) 3. Cromileptes altivelis (Panther or Senorita), lobster below 200 grams and spawning), 4. Tridacna Gigas (Taklobo), 5. Pinctada Margaretefera (Mother Pearl, Oysters, Giant Clams and other species), 6. Penaeus Monodon (Tiger Prawn-breeder size or mother), 7. Epinephelus Suillus (Loba or Green Grouper) and 8. Family: Balistidae (T[r]opical Aquarium Fishes) for a period of five (5) years in and coming from Palawan Waters. Sec. II. PRELIMINARY CONSIDERATIONS

9
1. Sec. 2-A (Rep. Act 7160). It is hereby declared, the policy of the state that the territorial and political subdivisions of the State shall enjoy genuine and meaningful local autonomy to enable them to attain their fullest development as self-reliant communities and make them more effective partners in the attainment of national goals. Toward this end, the State shall provide for [a] more responsive and accountable local government structure instituted through a system of decentralization whereby local government units shall be given more powers, authority, responsibilities and resources. 2. Sec. 5-A (R.A. 7160). Any provision on a power of [a] local Government Unit shall be liberally interpreted in its favor, and in case of doubt, any question thereon shall be resolved in favor of devolution of powers and of the lower government units. "Any fair and reasonable doubts as to the existence of the power shall be interpreted in favor of the Local Government Unit concerned." 3. Sec. 5-C (R.A. 7160). The general welfare provisions in this Code shall be liberally interpreted to give more powers to local government units in accelerating economic development and upgrading the quality of life for the people in the community. 4. Sec. 16 (R.A. 7160). General Welfare. Every local government unit shall exercise the powers expressly granted, those necessarily implied therefrom, as well as powers necessary, appropriate, or incidental for its efficient and effective governance; and those which are essential to the promotion of the general welfare. Sec. III. DECLARATION OF POLICY. It is hereby declared to be the policy of the Province of Palawan to protect and conserve the marine resources of Palawan not only for the greatest good of the majority of the present generation but with [the] proper perspective and consideration of [sic] their prosperity, and to attain this end, the Sangguniang Panlalawigan henceforth declares that is (sic) shall be unlawful for any person or any business entity to engage in catching, gathering, possessing, buying, selling and shipment of live marine coral dwelling aquatic organisms as enumerated in Section 1 hereof in and coming out of Palawan Waters for a period of five (5) years; Sec. IV. PENALTY CLAUSE. Any person and/or business entity violating this Ordinance shall be penalized with a fine of not more than Five Thousand Pesos (P5,000.00), Philippine Currency, and/or imprisonment of six (6) months to twelve (12) months and confiscation and forfeiture of paraphernalias [sic] and equipment in favor of the government at the discretion of the Court; Sec. V. SEPARABILITY CLAUSE. If for any reason, a Section or provision of this Ordinance shall be held as unconditional [sic] or invalid, it shall not affect the other provisions hereof. Sec. VI. REPEALING CLAUSE. Any existing Ordinance or a provision of any ordinance inconsistent herewith is deemed modified, amended or repealed. Sec. VII. EFFECTIVITY This Ordinance shall take effect ten (10) days after its publication. SO ORDAINED. xxx xxx xxx 4. The respondents implemented the said ordinances, Annexes "A" and "C" hereof thereby depriving all the fishermen of the whole province of Palawan and the City of Puerto Princesa of their only means of livelihood and the petitioners Airline Shippers Association of Palawan and other marine merchants from performing their lawful occupation and trade; 5. Petitioners Alfredo Tano, Baldomero Tano, Teocenes Midello, Angel de Mesa, Eulogio Tremocha, and Felipe Ongonion, Jr. were even charged criminally under criminal case no. 93-05-C in the 1st Municipal Circuit Trial Court of Cuyo-Agutaya-Magsaysay, an original carbon copy of the criminal complaint dated April 12, 1993 is hereto attached as Annex "D"; while xerox copies are attached as Annex "D" to the copies of the petition; 6. Petitioners Robert Lim and Virginia Lim, on the other hand, were charged by the respondent PNP with the respondent City Prosecutor of Puerto Princess City, a xerox copy of the complaint is hereto attached as Annex "E"; Without seeking redress from the concerned local government units, prosecutor's office and courts, petitioners directly invoked our original jurisdiction by filing this petition on 4 June 1993. In sum, petitioners contend that:

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First, the Ordinances deprived them of due process of law, their livelihood, and unduly restricted them from the practice of their trade, in violation of Section 2, Article XII and Sections 2 and 7 of Article XIII of the 1987 Constitution. Second, Office Order No. 23 contained no regulation nor condition under which the Mayor's permit could be granted or denied; in other words, the Mayor had the absolute authority to determine whether or not to issue the permit. Third, as Ordinance No. 2 of the Province of Palawan "altogether prohibited the catching, gathering, possession, buying, selling and shipping of live marine coral dwelling organisms, without any distinction whether it was caught or gathered through lawful fishing method," the Ordinance took away the right of petitioners-fishermen to earn their livelihood in lawful ways; and insofar as petitioners-members of Airline Shippers Association are concerned, they were unduly prevented from pursuing their vocation and entering "into contracts which are proper, necessary, and essential to carry out their business endeavors to a successful conclusion." Finally, as Ordinance No. 2 of the Sangguniang Panlalawigan is null and void, the criminal cases based thereon against petitioners Tano and the others have to be dismissed. In the Resolution of 15 June 1993 we required respondents to comment on the petition, and furnished the Office of the Solicitor General with a copy thereof. In their comment filed on 13 August 1993, public respondents Governor Socrates and Members of the Sangguniang Panlalawigan of Palawan defended the validity of Ordinance No. 2, Series of 1993, as a valid exercise of the Provincial Government's power under the general welfare clause (Section 16 of the Local Government Code of 1991 [hereafter, LGC]), and its specific power to protect the environment and impose appropriate penalties for acts which endanger the environment, such as dynamite fishing and other forms of destructive fishing under Section 447 (a) (1) (vi), Section 458 (a) (1) (vi), and Section 468 (a) (1) (vi), of the LGC. They claimed that in the exercise of such powers, the Province of Palawan had "the right and responsibility . . . to insure that the remaining coral reefs, where fish dwells [ sic], within its territory remain healthy for the future generation." The Ordinance, they further asserted, covered only live marine coral dwelling aquatic organismswhich were enumerated in the ordinance and excluded other kinds of live marine aquatic organisms not dwelling in coral reefs; besides the prohibition was for only five (5) years to protect and preserve the pristine coral and allow those damaged to regenerate. Aforementioned respondents likewise maintained that there was no violation of the due process and equal protection clauses of the Constitution. As to the former, public hearings were conducted before the enactment of the Ordinance which, undoubtedly, had a lawful purpose and employed reasonable means; while as to the latter, a substantial distinction existed "between a fisherman who catches live fish with the intention of selling it live, and a fisherman who catches live fish with no intention at all of selling it live," i.e., "the former uses sodium cyanide while the latter does not." Further, the Ordinance applied equally to all those belonging to one class. On 25 October 1993 petitioners filed an Urgent Plea for the Immediate Issuance of a Temporary Restraining Order, claiming that despite the pendency of this case, Branch 50 of the Regional Trial Court of Palawan was bent on proceeding with Criminal Case No. 11223 against petitioners Danilo Tano, Alfredo Tano, Eulogio Tremocha, Romualdo Tano, Baldomero Tano, Andres Linijan and Angel de Mesa for violation of Ordinance No. 2 of the Sangguniang Panlalawigan of Palawan. Acting on said plea, we issued on 11 November 1993 a temporary restraining order directing Judge Angel Miclat of said court to cease and desist from proceeding with the arraignment and pre-trial of Criminal Case No. 11223. On 12 July 1994, we excused the Office of the Solicitor General from filing a comment, considering that as claimed by said office in its Manifestation of 28 June 1994, respondents were already represented by counsel. The rest of the respondents did not file any comment on the petition. In the resolution of 15 September 1994, we resolved to consider the comment on the petition as the Answer, gave due course to the petition and required the parties to submit their respective memoranda. 2 On 22 April 1997 we ordered impleaded as party respondents the Department of Agriculture and the Bureau of Fisheries and Aquatic Resources and required the Office of the Solicitor General to comment on their behalf. But in light of the latter's motion of 9 July 1997 for an extension of time to file the comment which would only result in further delay, we dispensed with said comment. After due deliberation on the pleadings filed, we resolved to dismiss this petition for want of merit, and on 22 July 1997, assigned it to the ponente to write the opinion of the Court. I

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There are actually two sets of petitioners in this case. The first is composed of Alfredo Tano, Baldomero Tano, Danilo Tano, Romualdo Tano, Teocenes Midello, Angel de Mesa, Eulogio Tremocha, Felipe Ongonion, Jr., Andres Linijan, and Felimon de Mesa, who were criminally charged with violating Sangguniang Panlalawigan Resolution No. 33 and Ordinance No. 2, Series of 1993, of the Province of Palawan, in Criminal Case No. 93-05-C of the 1st Municipal Circuit Trial Court (MCTC) of Palawan; 3 and Robert Lim and Virginia Lim who were charged with violating City Ordinance No. 15-92 of Puerto Princesa City and Ordinance No. 2, Series of 1993, of the Province of Palawan before the Office of the City Prosecutor of Puerto Princesa. 4 All of them, with the exception of Teocenes Midello, Felipe Ongonion, Jr., Felimon de Mesa, Robert Lim and Virginia Lim, are likewise the accused in Criminal Case No. 11223 for the violation of Ordinance No. 2 of the Sangguniang Panlalawigan of Palawan, pending before Branch 50 of the Regional Trial Court of Palawan. 5 The second set of petitioners is composed of the rest of the petitioners numbering seventy-seven (77), all of whom, except the Airline Shippers Association of Palawan an alleged private association of several marine merchants are natural persons who claim to be fishermen. The primary interest of the first set of petitioners is, of course, to prevent the prosecution, trial and determination of the criminal cases until the constitutionality or legality of the Ordinances they allegedly violated shall have been resolved. The second set of petitioners merely claim that being fishermen or marine merchants, they would be adversely affected by the ordinance's. As to the first set of petitioners, this special civil for certiorari must fail on the ground of prematurity amounting to a lack of cause of action. There is no showing that said petitioners, as the accused in the criminal cases, have filed motions to quash the informations therein and that the same were denied. The ground available for such motions is that the facts charged therein do not constitute an offense because the ordinances in question are unconstitutional. 6 It cannot then be said that the lower courts acted without or in excess of jurisdiction or with grave abuse of discretion to justify recourse to the extraordinary remedy of certiorari or prohibition. It must further be stressed that even if petitioners did file motions to quash, the denial thereof would not forthwith give rise to a cause of action under Rule 65 of the Rules of Court. The general rule is that where a motion to quash is denied, the remedy therefrom is not certiorari, but for the party aggrieved thereby to go to trial without prejudice to reiterating special defenses involved in said motion, and if, after trial on the merits an adverse decision is rendered, to appeal therefrom in the manner authorized by law. 7 And, even where in an exceptional circumstance such denial may be the subject of a special civil action for certiorari, a motion for reconsideration must have to be filed to allow the court concerned an opportunity to correct its errors, unless such motion may be dispensed with because of existing exceptional circumstances. 8 Finally, even if a motion for reconsideration has been filed and denied, the remedy under Rule 65 is still unavailable absent any showing of the grounds provided for in Section 1 thereof. 9 For obvious reasons, the petition at bar does not, and could not have, alleged any of such grounds. As to the second set of petitioners, the instant petition is obviously one for DECLARATORY RELIEF, i.e., for a declaration that 10 the Ordinances in question are a "nullity . . . for being unconstitutional." As such, their petition must likewise fail, as this 11 Court is not possessed of original jurisdiction over petitions for declaratory relief even if only questions of law are involved, it 12 being settled that the Court merely exercises appellate jurisdiction over such petitions. II Even granting arguendo that the first set of petitioners have a cause of action ripe for the extraordinary writ of certiorari, there is here a clear disregard of the hierarchy of courts, and no special and important reason or exceptional and compelling circumstance has been adduced why direct recourse to us should be allowed. While we have concurrent jurisdiction with Regional Trial courts and with the Court of Appeals to issue writs of certiorari, prohibition, mandamus, quo warranto, habeas corpus and injunction, such concurrence gives petitioners no unrestricted freedom of choice of court forum, so we held 13 in People v. Cuaresma. This concurrence of jurisdiction is not . . . to be taken as according to parties seeking any of the writs an absolute unrestrained freedom of choice of the court to which application therefor will be directed. There is after all hierarchy of courts. That hierarchy is determinative of the venue of appeals, and should also serve as a general determinant of the appropriate forum for petitions for the extraordinary writs. A becoming regard for that judicial hierarchy most certainly indicates that petitions for the issuance of extraordinary writs against first level ("inferior") courts should be filed with the Regional Trial Court, and those against the latter, with the Court of Appeals. A direct invocation of the Supreme Court's original jurisdiction to issue these writs should be allowed only when there are special and important reasons therefor, clearly and specifically set out in the petition. This is established policy. It is a policy necessary to prevent inordinate demands upon the Court's time and attention which are better devoted to those matters within its exclusive jurisdiction, and to prevent further over-crowding of the Court's docket. . . . The Court feels the need to reaffirm that policy at this time, and to enjoin strict adherence thereto in the light of what it perceives to be a growing tendency on the part of litigants and lawyers to have their applications for the so-called extraordinary writs, and sometimes even their appeals, passed upon and adjudicated directly and immediately by the highest tribunal of the land. . . .

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In Santiago v. Vasquez, this Court forcefully expressed that the propensity of litigants and lawyers to disregard the hierarchy of courts must be put to a halt, not only because of the imposition upon the precious time of this Court, but also because of the inevitable and resultant delay, intended or otherwise, in the adjudication of the case which often has to be remanded or referred to the lower court, the proper forum under the rules of procedure, or as better equipped to resolve the issues since this Court is not a trier of facts. We reiterated "the judicial policy that this Court will not entertain direct resort to it unless the redress desired cannot be obtained in the appropriate courts or where exceptional and compelling circumstances justify availment of a remedy within and calling for the exercise of [its] primary jurisdiction." III Notwithstanding the foregoing procedural obstacles against the first set of petitioners, we opt to resolve this case on its merits considering that the lifetime of the challenged Ordinances is about to end. Ordinance No. 15-92 of the City of Puerto Princesa is effective only up to 1 January 1998, while Ordinance No. 2 of the Province of Palawan, enacted on 19 February 1993, is effective for only five (5) years. Besides, these Ordinances were undoubtedly enacted in the exercise of powers under the new LGC relative to the protection and preservation of the environment and are thus novel and of paramount importance. No further delay then may be allowed in the resolution of the issues raised. It is of course settled that laws (including ordinances enacted by local government units) enjoy the presumption of 15 constitutionality. To overthrow this presumption, there must be a clear and unequivocal breach of the Constitution, not merely a doubtful or argumentative contradiction. In short, the conflict with the Constitution must be shown beyond reasonable 16 17 doubt. Where doubt exists, even if well-founded, there can be no finding of unconstitutionality. To doubt is to sustain. After a scrutiny of the challenged Ordinances and the provisions of the Constitution petitioners claim to have been violated, we find petitioners' contentions baseless and so hold that the former do not suffer from any infirmity, both under the Constitution and applicable laws. Petitioners specifically point to Section 2, Article XII and Sections 2 and 7, Article XIII of the Constitution as having been transgressed by the Ordinances. The pertinent portion of Section 2 of Article XII reads: Sec. 2. . . . The State shall protect the nation's marine wealth in its archipelagic waters, territorial sea, and exclusive economic zone, and reserve its use and enjoyment exclusively to Filipino citizens. The Congress may, by law, allow small-scale utilization of natural resources by Filipino citizens, as well as cooperative fish farming, with priority to subsistence fishermen and fishworkers in rivers, lakes, bays, and lagoons. Sections 2 and 7 of Article XIII provide: Sec. 2. The promotion of social justice shall include the commitment to create economic opportunities based on freedom of initiative and self-reliance. xxx xxx xxx Sec. 7. The State shall protect the rights of subsistence fishermen, especially of local communities, to the preferential use of the communal marine and fishing resources, both inland and offshore. It shall provide support to such fishermen through appropriate technology and research, adequate financial, production, and marketing assistance, and other services. The State shall also protect, develop, and conserve such resources. The protection shall extend to offshore fishing grounds of subsistence fishermen against foreign intrusion. Fishworkers shall receive a just share from their labor in the utilization of marine and fishing resources. There is absolutely no showing that any of the petitioners qualifies as a subsistence or marginal fisherman. In their petition, petitioner Airline Shippers Association of Palawan is self-described as "a private association composed of Marine Merchants;" petitioners Robert Lim and Virginia Lim, as "merchants;" while the rest of the petitioners claim to be "fishermen," without any qualification, however, as to their status. Since the Constitution does not specifically provide a definition of the terms "subsistence" or "marginal" 18 fishermen, they should be construed in their general and ordinary sense. A marginal fisherman is an individual
14

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engaged in fishing whose margin of return or reward in his harvest of fish as measured by existing price levels is 19 barely sufficient to yield a profit or cover the cost of gathering the fish, while a subsistence fisherman is one whose 20 catch yields but the irreducible minimum for his livelihood. Section 131(p) of the LGC (R.A. No. 7160) defines a marginal farmer or fisherman as "an individual engaged in subsistence farming or fishing which shall be limited to the sale, barter or exchange of agricultural or marine products produced by himself and his immediate family." It bears repeating that nothing in the record supports a finding that any petitioner falls within these definitions. Besides, Section 2 of Article XII aims primarily not to bestow any right to subsistence fishermen, but to lay stress on the duty of the State to protect the nation's marine wealth. What the provision merely recognizes is that the State may allow, by law, cooperative fish farming, with priority to subsistence fishermen and fishworkers in rivers, lakes, bays and lagoons. Our survey of the statute books reveals that the only provision of law which speaks of a preferential right of marginal fishermen is Section 149 of the LGC, which pertinently provides: Sec. 149. Fishery Rentals, Fees and Charges. . . . (b) The sangguniang bayan may: (1) Grant fishery privileges to erect fish corrals, oyster, mussels or other aquatic beds or bangus fry areas, within a definite zone of the municipal waters, as determined by it: Provided, however, That duly registered organizations and cooperatives of marginal fishermen shall have the preferential right to such fishery privileges . . . . In a Joint Administrative Order No. 3 dated 25 April 1996, the Secretary of the Department of Agriculture and the Secretary of the Department of Interior and Local Government prescribed guidelines concerning the preferential treatment of small fisherfolk relative to the fishery right mentioned in Section 149. This case, however, does not involve such fishery right. Anent Section 7 of Article XIII, it speaks not only of the use of communal marine and fishing resources, but of their protection, development and conservation. As hereafter shown, the ordinances in question are meant precisely to protect and conserve our marine resources to the end that their enjoyment may be guaranteed not only for the present generation, but also for the generations to come. The so-called "preferential right" of subsistence or marginal fishermen to the use of marine resources is not at all absolute. In accordance with the Regalian Doctrine, marine resources belong to the State, and, pursuant to the first paragraph of Section 2, Article XII of the Constitution, their "exploration, development and utilization . . . shall be under the full control and supervision of the State." Moreover, their mandated protection, development and conservation as necessarily recognized by the framers of the Constitution, imply certain restrictions on whatever right of enjoyment there may be in favor of anyone. Thus, as to the curtailment of the preferential treatment of marginal fishermen, the following exchange between Commissioner Francisco Rodrigo and Commissioner Jose F.S. Bengzon, Jr., took place at the plenary session of the Constitutional Commission: MR. RODRIGO: Let us discuss the implementation of this because I would not raise the hopes of our people, and afterwards fail in the implementation. How will this be implemented? Will there be a licensing or giving of permits so that government officials will know that one is really a marginal fisherman? Or if policeman say that a person is not a marginal fisherman, he can show his permit, to prove that indeed he is one. MR. BENGZON: Certainly, there will be some mode of licensing insofar as this is concerned and this particular question could be tackled when we discuss the Article on Local Governments whether we will leave to the local governments or to Congress on how these things will be implemented. But certainly, I think our congressmen and our local officials will not be bereft of ideas on how to implement this mandate. xxx xxx xxx MR. RODRIGO:

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So, once one is licensed as a marginal fisherman, he can go anywhere in the Philippines and fish in any fishing grounds. MR. BENGZON: Subject to whatever rules and regulations and local laws that may be passed, may be 21 existing or will be passed. (emphasis supplied) What must likewise be borne in mind is the state policy enshrined in the Constitution regarding the duty of the State to protect and advance the right of the people to a balanced and healthful ecology in accord with the rhythm and 22 23 harmony of nature. On this score, in Oposa v. Factoran, this Court declared: While the right to a balanced and healthful ecology is to be found under the Declaration of Principles the State Policies and not under the Bill of Rights, it does not follow that it is less important than any of the civil and political rights enumerated in the latter. Such a right belongs to a different category of rights altogether for it concerns nothing less than self-preservation and self-perpetuation aptly and fittingly stressed by the petitioners the advancement of which may even be said to predate all governments and constitutions. As a matter of fact, these basic rights need not even be written in the Constitution for they are assumed to exist from the inception of humankind. If they are now explicitly mentioned in the fundamental charter, it is because of the well-founded fear of its framers that unless the rights to a balanced and healthful ecology and to health are mandated as state policies by the Constitution itself, thereby highlighting their continuing importance and imposing upon the state a solemn obligation to preserve the first and protect and advance the second, the day would not be too far when all else would be lost not only for the present generation, but also for those to come generations which stand to inherit nothing but parched earth incapable of sustaining life. The right to a balanced and healthful ecology carries with it a correlative duty to refrain from impairing the environment. . . . The LGC provisions invoked by private respondents merely seek to give flesh and blood to the right of the people to a balanced and healthful ecology. In fact, the General Welfare Clause, expressly mentions this right: Sec. 16. General Welfare. Every local government unit shall exercise the powers expressly granted, those necessarily implied therefrom, as well as powers necessary, appropriate, or incidental for its efficient and effective governance, and those which are essential to the promotion of the general welfare. Within their respective territorial jurisdictions, local government units shall ensure and support, among other things, the preservation and enrichment of culture, promote health and safety, enhance the right of the people to a balanced ecology, encourage and support the development of appropriate and self-reliant scientific and technological capabilities, improve public morals, enhance economic prosperity and social justice, promote full employment among their residents, maintain peace and order, and preserve the comfort and convenience of their inhabitants. (emphasis supplied). Moreover, Section 5(c) of the LGC explicitly mandates that the general welfare provisions of the LGC "shall be liberally interpreted to give more powers to the local government units in accelerating economic development and upgrading the quality of life for the people of the community." The LGC vests municipalities with the power to grant fishery privileges in municipal waters and impose rentals, fees or charges therefor; to penalize, by appropriate ordinances, the use of explosives, noxious or poisonous substances, electricity, muro-ami, and other deleterious methods of fishing; and to prosecute any violation of the provisions of 24 applicable fishery laws. Further, the sangguniang bayan, the sangguniang panlungsod and the sangguniang panlalawigan are directed to enact ordinances for the general welfare of the municipality and its inhabitants, which shall include, inter alia, ordinances that "[p]rotect the environment and impose appropriate penalties for acts which endanger the environment such as dynamite fishing and other forms of destructive fishing . . . and such other activities which result in pollution, acceleration of eutrophication of rivers and lakes, or of ecological 25 imbalance." Finally, the centerpiece of LGC is the system of decentralization as expressly mandated by the 27 Constitution. Indispensable to decentralization is devolution and the LGC expressly provides that "[a]ny provision on a power of a local government unit shall be liberally interpreted in its favor, and in case of doubt, any question thereon shall be resolved in favor of devolution of powers and of the lower local government unit. Any fair and reasonable doubt as to the existence of the power shall be interpreted in favor of the local government unit 28 concerned." Devolution refers to the act by which the National Government confers power and authority upon the 29 various local government units to perform specific functions and responsibilities.
26

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One of the devolved powers enumerated in the section of the LGC on devolution is the enforcement of fishery laws in 30 municipal waters including the conservation of mangroves. This necessarily includes the enactment of ordinances to effectively carry out such fishery laws within the municipal waters. The term "municipal waters," in turn, includes not only streams, lakes, and tidal waters within the municipality, not being the subject of private ownership and not comprised within the national parks, public forest, timber lands, forest reserves, or fishery reserves, but also marine waters included between two lines drawn perpendicularly to the general coastline from points where the boundary lines of the municipality or city touch the sea at low tide and a third line parallel with the general coastline and fifteen kilometers from 31 it. Under P.D. No. 704, the marine waters included in municipal waters is limited to three nautical miles from the general coastline using the above perpendicular lines and a third parallel line. These "fishery laws" which local government units may enforce under Section 17(b)(2)(i) in municipal waters include: (1) P.D. No. 704; (2) P.D. No. 1015 which, inter alia, authorizes the establishment of a "closed season" in any Philippine water if necessary for conservation or ecological purposes; (3) P.D. No. 1219 which provides for the exploration, exploitation, utilization and conservation of coral resources; (4) R.A. No. 5474, as amended by B.P. Blg. 58, which makes it unlawful for any person, association or corporation to catch or cause to be caught, sell, offer to sell, purchase, or have in possession any of the fish specie called gobiidae or "ipon" during closed season; and (5) R.A. No. 6451 which prohibits and punishes electrofishing, as well as various issuances of the BFAR. To those specifically devolved insofar as the control and regulation of fishing in municipal waters and the protection of its marine environment are concerned, must be added the following: 1. Issuance of permits to construct fish cages within municipal waters; 2. Issuance of permits to gather aquarium fishes within municipal waters; 3. Issuance of permits to gather kapis shells within municipal waters; 4. Issuance of permits to gather/culture shelled mollusks within municipal waters; 5. Issuance of licenses to establish seaweed farms within municipal waters; 6. Issuance of licenses to establish culture pearls within municipal waters; 7. Issuance of auxiliary invoice to transport fish and fishery products; and 8. Establishment of "closed season" in municipal waters. These functions are covered in the Memorandum of Agreement of 5 April 1994 between the Department of Agriculture and the Department of Interior and Local Government. In light then of the principles of decentralization and devolution enshrined in the LGC and the powers granted therein to local government units under Section 16 (the General Welfare Clause), and under Sections 149, 447(a) (1) (vi), 458 (a) (1) (vi) and 468 (a) (1) (vi), which unquestionably involve the exercise of police power, the validity of the questioned Ordinances cannot be doubted. Parenthetically, we wish to add that these Ordinances find full support under R.A. No. 7611, otherwise known as the Strategic Environmental Plan (SEP) for Palawan Act, approved on 19 June 1992. This statute adopts a "comprehensive framework for the sustainable development of Palawan compatible with protecting and enhancing the natural resources and endangered environment of the province," which "shall serve to guide the local government of Palawan and the government agencies concerned in the formulation and implementation of plans, programs and 32 projects affecting said province." At this time then, it would be appropriate to determine the relation between the assailed Ordinances and the aforesaid powers of the Sangguniang Panlungsod of the City of Puerto Princesa and the Sangguniang Panlalawigan of the Province of Palawan to protect the environment. To begin, we ascertain the purpose of the Ordinances as set forth in the statement of purposes or declaration of policies quoted earlier. It is clear to the Court that both Ordinances have two principal objectives or purposes: (1) to establish a "closed season" for the species of fish or aquatic animals covered therein for a period of five years; and (2) to protect the

16
coral in the marine waters of the City of Puerto Princesa and the Province of Palawan from further destruction due to illegal fishing activities. The accomplishment of the first objective is well within the devolved power to enforce fishery laws in municipal waters, such as P.D. No. 1015, which allows the establishment of "closed seasons." The devolution of such power has been expressly confirmed in the Memorandum of Agreement of 5 April 1994 between the Department of Agriculture and the Department of Interior and Local Government. The realization of the second objective clearly falls within both the general welfare clause of the LGC and the express mandate thereunder to cities and provinces to protect the environment and impose appropriate penalties for acts 33 which endanger the environment. The destruction of coral reefs results in serious, if not irreparable, ecological imbalance, for coral reefs are among 34 nature's life-support systems. They collect, retain and recycle nutrients for adjacent nearshore areas such as mangroves, seagrass beds, and reef flats; provide food for marine plants and animals; and serve as a protective 35 shelter for aquatic organisms. It is said that "[e]cologically, the reefs are to the oceans what forests are to 36 continents: they are shelter and breeding grounds for fish and plant species that will disappear without them." The prohibition against catching live fish stems, in part, from the modern phenomenon of live-fish trade which entails the catching of so-called exotic species of tropical fish, not only for aquarium use in the West, but also for "the market 37 for live banquet fish [which] is virtually insatiable in ever more affluent Asia. These exotic species are coral-dwellers, and fishermen catch them by "diving in shallow water with corraline habitats and squirting sodium cyanide poison at passing fish directly or onto coral crevices; once affected the fish are immobilized [merely stunned] and then scooped 38 by hand." The diver then surfaces and dumps his catch into a submerged net attached to the skiff. Twenty minutes later, the fish can swim normally. Back on shore, they are placed in holding pens, and within a few weeks, they expel the cyanide from their system and are ready to be hauled. They are then placed in saltwater tanks or packaged in 39 plastic bags filled with seawater for shipment by air freight to major markets for live food fish. While the fish are meant to survive, the opposite holds true for their former home as "[a]fter the fisherman squirts the cyanide, the first thing to perish is the reef algae, on which fish feed. Days later, the living coral starts to expire. Soon the reef loses its function as habitat for the fish, which eat both the algae and invertebrates that cling to the coral. The reef becomes an underwater graveyard, its skeletal remains brittle, bleached of all color and vulnerable to erosion from the pounding of 40 the waves." It has been found that cyanide fishing kills most hard and soft corals within three months of repeated 41 application. The nexus then between the activities barred by Ordinance No. 15-92 of the City of Puerto Princesa and the prohibited acts provided in Ordinance No. 2, Series of 1993 of the Province of Palawan, on one hand, and the use of sodium cyanide, on the other, is painfully obvious. In sum, the public purpose and reasonableness of the Ordinances may not then be controverted. As to Office Order No. 23, Series of 1993, issued by Acting City Mayor Amado L. Lucero of the City of Puerto Princesa, we find nothing therein violative of any constitutional or statutory provision. The Order refers to the implementation of the challenged ordinance and is not the Mayor's Permit. The dissenting opinion of Mr. Justice Josue N. Bellosillo relies upon the lack of authority on the part of the Sangguniang Panglungsod of Puerto Princesa to enact Ordinance No. 15, Series of 1992, on the theory that the subject thereof is within the jurisdiction and responsibility of the Bureau of Fisheries and Aquatic Resources (BFAR) under P.D. No. 704, otherwise known as the Fisheries Decree of 1975; and that, in any event, the Ordinance is unenforceable for lack of approval by the Secretary of the Department of Natural Resources (DNR), likewise in accordance with P.D. No. 704. The majority is unable to accommodate this view. The jurisdiction and responsibility of the BFAR under P.D. No. 704, over the management, conservation, development, protection, utilization and disposition of all fishery and aquatic resources of the country is not all-encompassing. First, Section 4 thereof excludes from such jurisdiction and responsibility municipal waters, which shall be under the municipal or city government concerned, except insofar as fishpens and seaweed culture in municipal centers are concerned. This section provides, however, that all municipal or city ordinances and resolutions affecting fishing and fisheries and any disposition thereunder shall be submitted to the Secretary of the Department of Natural Resources for appropriate action and shall have full force and effect only 42 upon his approval. Second, it must at once be pointed out that the BFAR is no longer under the Department of Natural Resources (now Department of Environment and Natural Resources). Executive Order No. 967 of 30 June 1984 transferred the BFAR from the control and supervision of the Minister (formerly Secretary) Of Natural Resources to the Ministry of

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Agriculture and Food (MAF) and converted it into a mere staff agency thereof, integrating its functions with the regional offices of the MAF. In Executive Order No. 116 of 30 January 1987, which reorganized the MAF, the BFAR was retained as an attached 43 agency of the MAF. And under the Administrative Code of 1987, the BFAR is placed under the Title concerning the 44 Department of Agriculture. Therefore, it is incorrect to say that the challenged Ordinance of the City of Puerto Princesa is invalid or unenforceable because it was not approved by the Secretary of the DENR. If at all, the approval that should be sought would be that of the Secretary of the Department of Agriculture. However, the requirement of approval by the Secretary of the Department of Agriculture (not DENR) of municipal ordinances affecting fishing and fisheries in municipal waters has been dispensed with in view of the following reasons: (1) Section 534 (Repealing Clause) of the LGC expressly repeals or amends Sections 16 and 29 of P.D. No. 45 704 insofar as they are inconsistent with the provisions of the LGC. (2) As discussed earlier, under the general welfare clause of the LGC, local government units have the power, inter alia, to enact ordinances to enhance the right of the people to a balanced ecology. It likewise specifically vests municipalities with the power to grant fishery privileges in municipal waters, and impose rentals, fees or charges therefor; to penalize, by appropriate ordinances, the use of explosives, noxious or poisonous substances, electricity, muro-ami, and other deleterious methods of fishing; and to prosecute any violation of the provisions of 46 applicable fishery laws. Finally, it imposes upon the sangguniang bayan, the sangguniang panlungsod, and the sangguniang panlalawigan the duty to enact ordinances to "[p]rotect the environment and impose appropriate penalties for acts which endanger the environment such as dynamite fishing and other forms of destructive fishing . . . and such other activities which result in pollution, acceleration of eutrophication of rivers and lakes or of ecological 47 imbalance." In closing, we commend the Sangguniang Panlungsod of the City of Puerto Princesa and Sangguniang Panlalawigan of the Province of Palawan for exercising the requisite political will to enact urgently needed legislation to protect and enhance the marine environment, thereby sharing in the herculean task of arresting the tide of ecological destruction. We hope that other local government units shall now be roused from their lethargy and adopt a more vigilant stand in the battle against the decimation of our legacy to future generations. At this time, the repercussions of any further delay in their response may prove disastrous, if not, irreversible. WHEREFORE, the instant petition is DISMISSED for lack of merit and the temporary restraining order issued on 11 November 1993 is LIFTED. No pronouncement as to costs. SO ORDERED.

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G.R. No. 141616 March 15, 2001

CITY OF QUEZON, petitioner, vs. LEXBER INCORPORATED, respondent. YNARES-SANTIAGO, J.: Before us is a petition for review on certiorari assailing the October 18, 1999 decision of the Court of Appeals in CA-G.R. CV 1 No. 59541 which affirmed in toto the January 26, 1998 decision of the Regional Trial Court of Quezon City in Civil Case No. 2 Q-94-19405. Briefly stated, the facts are as follows On August 27, 1990, a Tri-Partite Memorandum of Agreement was drawn between petitioner City of Quezon, represented by its then Mayor Brigido R. Simon, Jr., respondent Lexber, Inc. and the then Municipality of Antipolo, whereby a 26,010 square 4 meter parcel of land located in Antipolo was to be used as a garbage dumping site by petitioner and other Metro Manila cities or municipalities authorized by the latter, for a 5-year period commencing in January 1991 to December 1995. Part of the agreement was that the landowner, represented by respondent Lexber, shall be hired as the exclusive supplier of manpower, heavy equipment and engineering services for the dumpsite and shall also have the right of first refusal for contracting such services. This led to the drawing of the first negotiated contract between petitioner, represented by Mayor Simon, and respondent Lexber on September 10, 1990, whereby the latter was engaged to construct the necessary infrastructure at the dumpsite, designated as the Quezon City Sanitary Landfill, for the contract price of P4,381,069.00. Construction of said infrastructure was completed by respondent Lexber on November 25, 1991, and the contract price agreed upon was accordingly paid to it by petitioner. Meanwhile, on November 8, 1990, a second negotiated contract was entered into by respondent Lexber with petitioner, again represented by Mayor Simon, whereby it was agreed that respondent Lexber shall provide maintenance services in the form of manpower, equipment and engineering operations for the dumpsite for the contract price of P1,536,796.00 monthly. It was further agreed that petitioner shall pay respondent Lexber a reduced fee of fifty percent (50%) of the monthly contract price, or P768,493.00, in the event petitioner fails to dump the agreed volume of 54,000 cubic meters of garbage for any given month. On December 11, 1991, respondent was notified by petitioner, through the City Engineer, Alfredo Macapugay, Project Manager, Rene Lazaro and Mayor Simon to commence maintenance and dumping operations at the site starting on 7 December 15, 1991. Respondent Lexber alleged that petitioner immediately commenced dumping garbage on the landfill site continuously from December 1991 until May 1992. Thereafter, petitioner ceased to dump garbage on the said site for reasons not made known to respondent Lexber. Consequently, even while the dumpsite remained unused, respondent Lexber claimed it was entitled to payment for its services as stipulated in the second negotiated contract. On December 12, 1992, respondent's counsel sent a demand letter to petitioner demanding the payment of at least 50% of its service fee under the said contract, in the total amount of P9,989,174.00. In view of the idle state of the dumpsite for more than a year, respondent also sought a clarification from petitioner regarding its intention on the dumpsite project, considering the waste of equipment and manpower in the meantime, as well as its loss of opportunity for the property. Petitioner, this time acting through Mayor Ismael A. Mathay, Jr. who succeeded Mayor Simon in the interim, denied any liability under the contract on the ground that the same was invalid and unenforceable. According to Mayor Mathay, the subject contract was signed only by Mayor Simon and had neither the approval nor ratification of the City Council, and it lacked the required budget appropriation.1wphi1.nt Thus, a complaint for Breach of Contract, Specific Performance or Rescission of Contract and Damages was filed by respondent Lexber against petitioner on February 21, 1994 before the Regional Trial Court of Quezon City. Respondent Lexber averred that because petitioner stopped dumping garbage on the dumpsite after May 1992, Lexber's equipment and personnel were idle to its damage and prejudice. Respondent prayed that petitioner be ordered to comply with its obligations under the subject contract or, in the alternative, that the said contract be rescinded and petitioner be ordered to pay damages. On January 26, 1998, after trial on the merits, the lower court rendered judgment in favor of respondent, the dispositive portion of which states: WHEREFORE, premises considered, judgment is hereby rendered in favor of the plaintiff and against the defendant:
6 5 3

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1. Ordering the defendant to pay the plaintiff the amount of SEVEN HUNDRED SIXTY EIGHT THOUSAND FOUR HUNDRED NINETY THREE PESOS (P768,493.00) per month starting December 15, 1991 until December 31, 1995 with legal interest starting December 16, 1992, the date defendant received plaintiffs extra-judicial demand, until defendant finally pays the entire amount; 2. Ordering defendant to pay costs of suit. The claims for attorney's fees and other damages are hereby denied for lack of merit. SO ORDERED.
8

On appeal to the Court of Appeals, the said Judgment was affirmed in toto. With the denial of its Motion for Reconsideration on January 26, 2000, petitioner now comes to this Court with the instant petition arguing that the Court of Appeals gravely erred: (a) When it refused to hold that the second Negotiated Contract of November 8, 1990 is null and void ab initio, notwithstanding that the execution thereof was in violation of Secs. 85, 86 and 87 of the Auditing Code of the Philippines (PD 1445) and LOI 968. (b) When it refused to categorically hold that the said Negotiated Contract of November 8, 1990 required the prior approval of the City Council, notwithstanding the fact that the said contract would require the expenditure of public funds in the amount of P18,817,920.00 for one-year dumping operation, or the total amount of P94,089,600.00 for five years, and that it is the City Council that is vested by the Local Government Code (BP Blg. 337) with the power to appropriate city funds to cover expenses of the City Government. (c) When it held that Petitioner started to dump garbage at the dumpsite and paid for such service, despite the fact that Respondent's evidence proved otherwise; furthermore, the Court of Appeals failed to cite any specific evidence to support said conclusions of fact. (d) When it held that the said Negotiated Contract of November 8, 1990 was ratified by the Petitioner by the aforesaid initial dumping of garbage and payment of services, overlooking the elementary doctrine that a void contract cannot be ratified. (e) When it wrongly applied an Executive Order and administrative resolution as the applicable law to govern the aforesaid contract, notwithstanding that the Auditing Code of the Philippines (PD 1445) and the Local Government Code (BP 337) then had not been repealed by any legislative enactment, nor could the said executive issuances repeal them. (f) When it held that the equities of the case should lean in favor of the respondent and thus failed to apply the doctrine that Government is not estopped to question the illegal acts of its officials. (g) When it wrongly applied the lmus case, not the Osmena case, to the present case. Petitioner's remonstrations can be reduced to two (2) essential arguments: First. That the second negotiated contract is null and void ab initio because its execution was done in violation of existing laws, more particularly Sections 85, 86 and 87 of Presidential Decree No. 1445 (otherwise known as the Auditing Code of the Philippines) and Section 177 (b) of Batas Pambansa Blg. 337 (also known as the Local Government Code of 1983); and Second. That the facts and evidence do not support the Court of Appeals, conclusion that, notwithstanding the lack of appropriation, subsequent acts of the petitioner constituted a ratification of the subject negotiated contract. The issue of whether or not the subject negotiated contract is null and void ab initio will be discussed first. Petitioner insists that the subject contract failed to comply with the mandatory requirements of Presidential Decree No. 1445, otherwise known as the Auditing Code of the Philippines. Section 85 thereof provides:
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Section 85. Appropriation before entering into contract. - (1) No contract involving the expenditure of public funds shall be entered into unless there is an appropriation therefor, the unexpected balance of which, free of other obligations, is sufficient to cover the proposed expenditure; (2) Notwithstanding this provision, contracts for the procurement of supplies and materials to be carried in stock may be entered into under regulations of the Commission provided that when issued, the supplies and materials shall be charged to the proper appropriation account. (Underscoring ours) Section 86 of PD 1445 also provides as follows: Section 86. Certificate showing appropriation to meet contract. - Except in a case of a contract for personal service, for supplies for current consumption or to be carried in stock not exceeding the estimated consumption for three months, or banking transactions of government-owned or controlled banks, no contract involving the expenditure of public funds by any government agency shall be entered into or authorized unless the proper accounting official or the agency concerned shall have certified to the officer entering into obligation that funds have been duly appropriated for the purpose and that the amount necessary to cover the proposed contract for the current fiscal year is available for expenditure on account thereof, subject to verification by the auditor concerned. The certification signed by the proper accounting official and the auditor who verified it, shall be attached to and become an integral part of the proposed contract, and the sum so certified shall not thereafter be available for expenditure for any other purpose until the obligation of the government agency concerned under the contract is fully extinguished, (Underscoring ours) Petitioner stresses that failure to comply with the requirements underlined in Sections 85 and 86 of PD 1445 rendered the subject contract void, invoking Section 87 of PD 1445 which provides: Section 87. Void contract and liability of officer. - Any contract entered into contrary to the requirements of the two immediately preceding sections shall be void, and the officer or officers entering into the contract shall be 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. Is a contract entered into by the city mayor involving the expenditure of public funds by the local government without prior appropriation by the city council valid and binding? Petitioner insists that the answer is in the negative, arguing that there is no escaping the stringent and mandatory requirement of a prior appropriation, as well as a certification that funds are available therefor. If we are to limit our disquisition to the cited provisions of Presidential Decree No. 1445, or the Auditing Code of the Philippines, in conjunction with Section 177 (b) of Batas Pambansa Blg. 337, or the Local Government Code of 1983, which empowered the Sangguniang Panlungsod to "appropriate funds for expenses of the city government, and fix the salaries of its officers and employees according to law," there would be no debate that prior appropriation by the city council and a certification that funds are available therefor is indeed mandatorily required. There is no denying that Sections 85 and 86 of P.D. 1445 (Auditing Code of the Philippines) provide that contracts involving expenditure of public funds: 1) can be entered into only when there is an appropriation therefor; and 2) must be certified by the proper accounting official/agency that funds have been duly appropriated for the purpose, which certification shall be attached to and become an integral part of the proposed contact. However, the very same Presidential Decree No. 1445, which is the cornerstone of petitioner's arguments, does not provide that the absence of an appropriation law ipso facto makes a contract entered into by a local government unit null and void. Section 84 of the statute specifically provides: Revenue funds shall not be paid out of any public treasury or depository except in pursuance of an appropriation law or other specific statutory authority. (Underscoring ours) Consequently, public funds may be disbursed not only pursuant to an appropriation law, but also in pursuance of other specific statutory authority, i.e., Section 84 of PD 1445. Thus, when a contract is entered into by a city mayor pursuant to specific statutory authority, the law, i.e., PD 1445 allows the disbursement of funds from any public treasury or depository therefor. It can thus be plainly seen that the law invoked by petitioner Quezon City itself provides that an appropriation law is not the only authority upon which public funds shall be disbursed.

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Furthermore, then Mayor Brigido Simon, Jr. did not enter into the subject contract without legal authority. The Local Government Code of 1983, or B.P. Blg. 337, which was then in force, specifically and exclusively empowered the city mayor to "represent the city in its business transactions, and sign all warrants drawn on the city treasury and all bonds, contracts and 10 obligations of the city." Such power granted to the city mayor by B.P. Blg. 337 was not qualified nor restricted by any prior 11 action or authority of the city council. We note that while the subsequent Local Government Code of 1991, which took effect after the execution of the subject contracts, provides that the mayor's representation must be "upon authority of the 12 sangguniang panlungsod or pursuant to law or ordinance," there was no such qualification under the old code. We must differentiate the provisions of the old Local Government Code of 1983, B.P. Blg. 337, which was then in force, from that of the Local Government Code of 1991, R.A. No.7160, which now requires that the mayor's representation of the city in its business transactions must be "upon authority of the sangguniang panlungsod or pursuant to law or ordinance" (Section 455 [vi]). No such prior authority was required under B.P. Blg. 337. This restriction, therefore, cannot be imposed on the city mayor then since the two contracts were entered into before R.A. No.7160 was even enacted. Under B.P. Blg. 337, while the city mayor has no power to appropriate funds to support the contracts, neither does said law prohibit him from entering into contracts unless and until funds are appropriated therefor. In fact, it is his bounden duty to so represent the city in all its business transactions. On the other hand, the city council must provide for the "depositing, leaving 13 14 or throwing of garbage" and to appropriate funds for such expenses. {Section 177 [b]). It cannot refuse to so provide and appropriate public funds for such services which are very vital to the maintenance of cleanliness of the city and the good health of its inhabitants. By entering into the two contracts, Mayor Simon did not usurp the city council's power to provide for the proper disposal of garbage and to appropriate funds therefor. The execution of contracts to address such a need is his statutory duty, just as it is the city council's duty to provide for said services. There is no provision in B.P. Blg. 337, however, that prohibits the city mayor from entering into contracts for the public welfare, unless and until there is prior authority from the city council. This requirement was imposed much later by R.A. No. 7160, long after the contracts had already been executed and implemented. Even the very Charter of Quezon City, more particularly Section 9(f), Section 12(a) and Section 12(m) thereof, simply provide that the mayor shall exercise general powers and duties, such as signing "all warrants drawn on the city treasurer and all 16 bonds, contracts, and obligations of the city," even as it grants the City Council the power, by ordinance or resolution, "to 17 make all appropriations for the expenses of the government of the city," as well as "to prohibit the throwing or depositing of 18 offal, garbage, refuse, or other offensive matter in the same, and to provide for its collection and disposition x x x." While the powers and duties of the Mayor and the City Council are clearly delineated, there is nothing in the cited provisions, nor even in the statute itself, that requires "prior authorization by the city council by proper enactment of an ordinance" before the City Mayor can enter into contracts. Private respondent Lexber, asserts that the subject contract was entered into by Mayor Simon in behalf of the Quezon City government pursuant to specific statutory authority, more particularly the provisions of Executive Order No. 392. In accordance with Article XVIII, Section 8 of the 1987 Constitution, then President Corazon C. Aquino issued E.O. No. 392 constituting the Metropolitan Manila Authority (or MMA) to be composed of the heads of the four (4) cities and thirteen (13) municipalities comprising the Metropolitan Manila area. The said Executive Order empowered the MMA to "have jurisdiction over the delivery 19 of basic urban services requiring coordination" in the Metropolitan area, including "sanitation and waste management." To fulfil this mandate, the MMA, through Resolution No. 17, Series of 1990, resolved that pursuant to Section 2 of E.O. No. 392, the: x x x LGUs remitting their contributions to the MMA within the prescribed period shall be entitled to a financial assistance in all amount equivalent to 20% of their remittances provided that the amount is used exclusively to augment the effective delivery of basic urban services requiring coordination. The Metropolitan Manila Council (or MMC) also issued Resolution No. 15, Series of 1991, authorizing the Chairman of the MMC to enter into a memorandum of agreement or (MOA) with any local chief executive in Metropolitan Manila for the purpose of managing garbage collection and disposal, among other basic urban services. Taking their cue from Executive Order No. 392 and the pertinent resolutions of the MMA and MMC, the then Mayors of Quezon City and the Municipality of Antipolo entered into a tripartite MOA with respondent Lexber, towards the establishment of the proposed Quezon City Landfill Disposal System. It is true that the first negotiated contract between Mayor Simon, Jr. and respondent Lexber, which provided for the necessary infrastructure of the dumpsite, was executed without prior authority or appropriation by the city council. Nevertheless, recognizing the necessity, if not the urgency, of the project, petitioner honored the said contract and paid respondent Lexber 20 the contract price of P4,381,069.00.
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Respondent Lexber avers that immediately following the completion of the project in December 1991, petitioner in fact availed of the facilities by delivering and dumping garbage at the site in accordance with the stipulations in the second negotiated contract. And yet, after having spent millions of public funds to build the necessary infrastructure, as well as for site development of the sanitary landfill, petitioner, under the newly-installed administration of Mayor Ismael Mathay, Jr., refused to honor the second negotiated contract by: (1) discontinuing the city's use of the sanitary landfill; (2) refusing to pay respondent Lexber for services already rendered from December of 1991 to May of 1992; and (3) denying any liability under the second negotiated contract, on the grounds that the same was without prior authority of the city council, and that it was neither approved nor ratified by the said body. Moreover, Mayor Mathay, Jr. refused to pay its obligation to respondent Lexber since no provision therefor was made in the 1992/1993 annual city budget. The trial court ruled that while there may not have been prior authority or appropriation to enter into and implement the second negotiated contract, the project denominated as "Quezon City Landfill Disposal System" was duly supported by a Certificate of Availability of Funds dated April 4, 1991 signed by the Quezon City Auditor, Reynaldo P. Ventura, and Treasurer, Montano L. Diaz, stating as follows: Pursuant to the provisions of Section 86 of P.D. No. 1445, LOI 968 and Section 46 of P.D. No. 177, I hereby certify that funds have been duly appropriated and alloted under Advice of Allotment No. 1 and 2 dated March 31, 1991 and in the total amount of P2,620,169.00; P11,783,399.00 covering the contract entered into with Lexber, Inc. with 21 business address at 65 Panay Avenue, Quezon City said amount is available for expenditure on account thereof. The existence of said document led the trial court to conclude thus: However, a close examination of the Certificate of Availability of Funds dated December 3, 1990 shows that the appropriated amounts of P1,700,000.00, 2,641,922.00, and P40,000.00 totaled P4,381,922.00 and not P4,341,922.00, which amount is, in fact, P853.00 more than the contract price or Negotiated Contract dated September 10, 1990. This only shows that as of April 4, 1991, there was sufficient appropriation to cover at least for a period of three (3) months, in order to comply with the provisions of Section 86 of PD 1445. Moreover, any payment made will comply with the provision of Section 84 of PD 1445 which states that: "Revenue funds shall not be paid out of any public treasury or depository except in pursuance of an appropriation law or other specific statutory authority." In any case, the defendant city can easily make available the necessary funds at the beginning of the year in the general appropriation to cover the probable expenses which it would have to incur, considering that pursuant to Resolution No, 72, Series of 1990 of the Metropolitan Manila Authority, the Local Government Units are entitled to a financial assistance in an amount equivalent to 20% of their remittances provided that the amount is used exclusively to augment the effective delivery of basic services requiring coordination. In fact, the amount of FIVE MILLION PESOS (P5,000,000.00) has already been set aside in order to be available to augment garbage collection and disposal in Quezon City. It must be noted that the Negotiated Contract dated November 8, 1990 is not ipso facto absolutely null and void. The subject thereof is perfectly within the authority of the city government. It is pursuant to the Tripartite Agreement entered into between the plaintiff, the defendant, and the Municipality of Antipolo. The plaintiff was given the exclusive right to exercise acts stated in the two negotiated contracts, which are entered into to further carry out and 22 implement the provisions of the Tripartite Agreement. The Court of Appeals affirmed the trial court's findings that the second negotiated contract was executed by virtue of a specific statutory authority, or pursuant to law, holding that: Executive Order No. 392 (constituting the Metropolitan Manila Authority, providing for its powers and functions and for other purposes) and pertinent Resolution No. 72, Series of 1990 of MMA, and Resolution No. 15, Series of 1991 of MMC, find application and therefore should govern the subject transactions. Worthy to stress at this point is the fact that pursuant to Sec. 1, E.O. 392, the then Metropolitan Manila Authority was tasked, among others, with the delivery of basic services in the Metropolitan Area, whose services include garbage collection and disposal. To carry out this mandate and effectively deliver other basic urban services requiring coordination of local government units, the Metropolitan Manila Authority through its Resolution No.72, Series of 1990, granted financial assistance to all local government units (LGUs) comprising Metropolitan Manila in an amount equivalent to 20% of their remittances as provided under E.O. 392. Likewise, the Metropolitan Manila Council, in its Resolution No. 15, Series of 1991, resolved to authorize the Chairman or the MMC to enter into memorandum of Agreement (MOA) with the Local Chief Executives in Metro Manila for the purpose of, among other things, the management of garbage collection and its disposal. The foregoing authorities therefore fully clothed Mayor Brigido Simon, Jr. with the authority to enter and sign the 23 subject contract for and in behalf of the city government even without express authority from the City Council.

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While it is true that the MMA has no legislative power, E.O. No. 392 specifically empowered the MMA to "have jurisdiction over 24 the delivery of basic urban services requiring coordination," such as "sanitation and waste management." Said E.O. did not 25 repeal pertinent provisions of B.P. 337, but specifically exempts the MMA from the application of E.O. 392 (Section 11 of E.O. 392). There is no conflict as well with the provisions of P.D. No. 1445 because Sec. 84 thereof also recognizes appropriation by "other statutory authority." E.O. 392 and MMA Resolutions Nos. 72 and 15 allowed for direct coordination between the MMA and the covered local government units to expedite the effective delivery of basic services requiring coordination, such as collection and disposal of garbage. To this end, the MMA Resolutions (series of 1990) granted financial assistance to all covered local government units in an amount equivalent to 20% of their remittances to fund the delivery of said services, pursuant to the provisions of Sec. 7 of E.O. No. 392: "x x x city and municipal treasurers of the local government units comprising Metropolitan Manila shall continue to collect all revenues and receipts accruing to the Metropolitan Manila Commission and remit the same to the Authority; Provided that such income collections as well as the share of the authority from the regular sources of revenue in the General Fund of the city or municipality as local counterpart for the integrated basic services and developmental projects shall be treated as a trust fund in their account. Provided further that the remittance thereof shall be effected within the first thirty (30) days following the end of each month. x x x" There was, thus, no justifiable reason for petitioner not to allocate or appropriate funds at the start of each fiscal year considering that a trust fund had been established to pay for "the effective delivery of basic urban services requiring coordination," foremost of which is the collection and disposal of garbage. LOI No. 968, signed by then President Marcos on December l7, 1979, also provides in part that "all contracts for capital projects and for supply of commodities and services, including equipment, maintenance contracts, and other agreements requiring payment which are chargeable to agency current operating on capital expenditure funds, shall be signed by agency heads or other duly authorized official only when there are available funds. The chief accountant of the contracting agency shall sign such contracts as witness and contracts without such witness shall be considered as null and void." However, this requirement does not apply to contracts executed by local chief executives since the said LOI No. 968 was directed only to "Ministries and Heads/Chief Accountants of Ministry, Bureau, Office, Agency of the National Government, including State Universities and Colleges, and the Chairman, Commission on Audit." Quezon City, or any urbanized city for that matter, cannot be considered a ministry, bureau, office or agency of the national government; neither is the city mayor a minister or head of a ministry, bureau, office or agency of the national government. Hence, the mayor of Quezon City is not covered by LOI No. 968. The prevailing law in this particular instance is the Local Government Code of 1983 or B.P. Blg. 337. Therefore, we find no cogent reason to disturb the conclusions of the trial court as affirmed by the Court of Appeals in this regard. It is clear that the second negotiated contract was entered into by Mayor Brigido Simon, Jr. pursuant to law or specific statutory authority as required by P. D. No. 1445. There is also no merit in petitioner's claim that there was no appropriation therefor, for it is evident that even as early as April 4, 1991, funds which were certified to as available had been allocated for use in the first few months operation of the sanitary landfill. The problem arose only because the new administration unjustifiably refused to abide by the stipulations in the second negotiated contract. Hence, petitioner's arguments on this issue fail to convince this Court that the second negotiated contract was null and void ab initio for lack of prior appropriation or authority on the part of Mayor Brigido Simon, Jr. It is of no moment that the certificate referred to by the trial court did not state "that the amount necessary to cover the 20 proposed contract for the current fiscal year is available for expenditure on account thereof." The Certificate of Availability of 27 Funds, though dated December 3, 1990, merely showed that funds for the Landfill Disposal System was available. Even if the surplus amount was just sufficient to cover at least three (3) months of operations as of April 4, 1991, said monthly payments were not due yet as the infrastructure was still being completed. The project was completed in December of 1991 and dumping was to commence only thereafter. Thus, the funds to cover the 1992 fiscal year could have been made available and appropriated therefor at the beginning of said year. That the Quezon City government later refused to appropriate and approve payments to respondent Lexber under the contract despite its use of the facilities for several months in 1992, is not respondent's fault, and being the aggrieved party, it cannot be made to suffer the damage wrought by the petitioner's failure or refusal to abide by the contract. On the issue of subsequent ratification by petitioner, the Court of Appeals held: Granting but without conceding that Mayor Brigido Simon, Jr. needs to secure prior authorization from the City Council for the enforceability of the contracts entered into in the name of the City government, which he failed to do according to the appellant, We believe that such will not affect the enforceability of the contract because of the subsequent ratification made by the City government. Thus, when appellant City government, after the construction

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by the appellee of the dumpsite structure in accordance with the contract plans and specifications, started to dump garbage collected in the City and consequently paid the appellee for the services rendered, such acts produce and constitute a ratification and approval of the negotiated contract and necessarily should imply its waiver of the right to 28 assail the contract's enforceability. We are not dissuaded by petitioner's arguments that there can be no ratification due to the absence of an explicit or tacit approval of the second negotiated contract. At the outset, the issue raised by petitioner that the subject contract is null and void ab initio, and therefore not capable of ratification, has been laid to rest by the inevitable conclusion that the said contract is valid and binding. Consequently, ratification of the subject contract is not necessary. Be that as it may, it cannot be denied that there was constructive ratification on the part of petitioner. The records show that upon completion of the infrastructure and other facilities, petitioner, albeit still under the administration of Mayor Brigido Simon, 29 Jr., started to dump garbage in the premises. In fact, on December 11, 1991, a Notice to Commence Work, implementing the contract for the maintenance of the sanitary landfill, starting December 15, 1991 to December 31, 1995, was issued by, said Mayor, as recommended by Project Manager Rene R. Lazaro and City Engineer Alfredo Macapugay. The records also reveal that petitioner issued Disbursement Vouchers of various amounts covering the period between March 1, 1992 to April 30, 1992 for the services rendered by the Mud Regal Group, Incorporated to haul garbage to the sanitary landfill. The said disbursement vouchers were passed in audit and duly approved and paid by petitioner. These are facts and circumstances on record which led the trial court, the appellate court, and this Court to affirm the conclusion that 31 petitioner had actually ratified the subject contract. Also part of the evidence on record are receipts of various amounts paid by respondent Lexber to Mud Regal Group, Inc. for the supply of earth moving equipment used by Lexber to maintain the sanitary landfill covering the period from December 1991 32 to August 1992. There is also a collection letter from Mud Regal Group, Inc. addressed to respondent Lexber for unpaid bills 33 covering the period from September to December 1992. While corresponding vouchers were prepared by petitioner to pay respondent Lexber for work accomplished by the latter in the maintenance of the sanitary landfill for the period spanning 34 December 1991 to June 1992, these were never processed and approved for payment since action thereon was overtaken by the change in leadership of the city government. By then, the new dispensation had already discontinued using the sanitary landfill for reasons it did not make known to respondent Lexber. It is evident that petitioner dealt unfairly with respondent Lexber. By the mere pretext that the subject contract was not approved nor ratified by the city council, petitioner refused to perform its obligations under the subject contract. Verily, the same was entered into pursuant to law or specific statutory authority, funds therefor were initially available and allocated, and petitioner used the sanitary landfill for several months. The present leadership cannot unilaterally decide to disregard the subject contract to the detriment of respondent Lexber. The mere fact that petitioner later refused to continue dumping garbage on the sanitary landfill does not necessarily prove that it did not benefit at the expense of respondent Lexber. Whether or not garbage was actually dumped is of no moment, for respondent Lexber's undertaking was to make available to petitioner the landfill site and to provide the manpower and machinery to maintain the facility. Petitioner, by refusing to abide by its obligations as stipulated in the subject negotiated contract, should be held liable to respondent Lexber in accordance with the terms of the subject contract. Petitioner's refusal to abide by its commitments gave rise to an untenable situation wherein petitioner effectively denied the existence and validity of the subject contract even while respondent Lexber was still bound by it. This situation is inconsistent with the principle that obligations arising from contracts have the force of law between the contracting parties and each party is 35 bound to fulfill what has been expressly stipulated therein. Only respondent Lexber was bound by the contract while 36 petitioner acted as if it were free therefrom. The Court of Appeals held that: Moreover, the contention of appellant, if sustained, will undeniably result in grave injustice and inequity to appellate Lexber, Inc. The records will reveal that appellee never solicited upon the City government to utilize its properties for a landfill site, as appellee originally conceived of devoting its property to a more viable undertaking, bamboo plantation in partnership with foreign firm. On the other hand, it was the City government, then beset with serious garbage problem that enticed and convinced Lexber, Inc. to offer its properties as a landfill site, with the assurance of the opportunities contained in the tri-partite agreement. When appellee acceded to their request, three contracts unilaterally prepared by the City government was presented to him, the terms and conditions of which were all established and prescribed by appellant, and appellee's mere participation in the contract's perfection was simply the affixing of his signature therein. Clearly, the equities of the case are with appellee Lexber, Inc. Even fair dealing alone would have required the appellant to abide by its representations, which it did in the inception, but was later dishonored by the new administration of Mayor Mathay, Jr. Appellee faithfully performed its undertakings set forth in the contract, upon the appellant's assurance that sufficient funds shall come from the city's statutory contribution to the MMA. Had it
30

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not (sic) for the said assurance, Lexber, Inc. for sure, would not have ventured into such costly business undertaking. No one in his right frame of mind would have entered into such kind of contract and invest his fortune unless assured of the availability of funds to compensate its financial investment. As correctly pointed out by the court a quo, appellant having taken advantage of and benefited from the appellee through the assailed negotiated contract shall not be permitted to attack it on the ground that the contract did not bear 37 the necessary approval. Finally, we come to the issue raised by petitioner that the Court of Appeals gravely erred in holding that the Imuscase, not the Osmena case, is applicable to the instant controversy. We note that the Court of Appeals did not discuss either case but merely adopted the exhaustive discussion of the trial court on the matter. Before the court a quo, herein respondent Lexber relied on the ruling of this Court in the case of Imus Electric Company v. Municipality of Imus,
38

wherein this Court ruled:

The defendants contend that the contract in question is null and void on the ground that the former municipal council of Imus approved it without having the necessary funds to pay for the value of the service to be rendered by the plaintiff for a period often (10) years, which amounted to P24,300, and without the provincial treasurer's previous certificate to the effect that said funds have been appropriated and were available, in violation of the provisions of sections 606, 607 and 608 of the Regional Administrative Code of 1917. The above-cited legal provisions read as follows: SEC. 606. Appropriation antecedent to making of contract. - No contract involving the expenditure of public funds shall be made until there is an appropriation therefor, the unexpended balance of which, free of other obligations, is sufficient to cover the proposed expenditure. This provision shall not, however, be construed to prevent the purchasing and carrying of supplies in stock, under the regulations of the Bureau of Audits, provided that when issued such supplies shall be charged to the proper appropriation account. SEC. 607. Certificate showing appropriation to meet contract. - Except in the case of a contract for personal service or for supplies to be carried in stock, no contract involving an expenditure by the Insular Government of three thousand pesos or more shall be entered into or authorized until the Insular Auditor shall have certified to the officer entering into such obligation that funds have been duly appropriated for such purpose and that the amount necessary to cover the proposed contract is available for expenditure on account thereof. When application is made to the Insular Auditor for the certificate herein required, a copy of the proposed contract or agreement shall be submitted to him accompanied by a statement in writing from, the officer making the application showing all obligations not yet presented for audit which have been incurred against the appropriation to which the contract in question would be chargeable; and such certificate, when signed by the Auditor, shall be attached to and become a part of the proposed contract, and the sum so certified shall not thereafter be available for expenditure for any other purpose until the Government is discharged from the contract in question. Except in the case of a contract for supplies to be carried in stock, no contract involving the expenditure by any province, municipality, township, or settlement of two thousand pesos or moreshall be entered into or authorized until the treasurer of the political division concerned shall have certified to the officer entering into such contract that funds have been duly appropriated for such purpose and that the amount necessary to cover the proposed contract is available for expenditure on account thereof. Such certificate, when signed by the said treasurer, shall be attached to and become a part of the proposed contract and the sum so certified shall not thereafter be available for expenditure for any other purpose until the contract in question is lawfully abrogated or discharged. For the purpose of making the certificate hereinabove required ninety per centum of the estimated revenues and receipts which should accrue during the current fiscal year, but which are yet uncollected, shall be deemed to be in the treasury of the particular branch of the Government against which the obligation in question would create a charge. SEC. 608, Void contract; Liability of officer. - A purported contract entered into contract to the requirements of the next preceding section hereof shall be wholly void, and the officer assuming to make such contract shall be 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. (Underscoring ours) The defendants contend that the additional appropriation made by the then municipal council was inadequate on the ground that it was the duty of the latter to appropriate funds for the whole terms of the contract and that the contract in question falls within the prohibition of section 608 because in reality there was no appropriation for the sum of

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P24.300, nor did the provincial treasurer certify that such appropriation was made and that the funds for the same were available. (Underscoring ours) The inconsistency of the defendants' claim becomes obvious merely by taking into consideration that the contract entered into by the parties was for the sale of electric current at the rate of P4.50 monthly for, every lamp or light of 50 watts, or the sum of P201.50 every month. Under this agreement, the municipality of Imus was not found, nor is it bound, to pay the price of the electric current until the same has been furnished and inasmuch as the period of one month was made the basis thereof, there is no doubt but that neither is the said municipality obliged to pay for the current except at the end of every month. It is true that the duration of the contract was fixed at ten (10) years, a period which was accepted by the municipality on the ground that only under the terms of the contract and the law, the municipality was not bound to make advanced payments and, consequently, there was no reason for it to appropriate funds for the said public service except for a period of one month or one year at most, if it had sufficient funds, in order to comply with the provisions of section 2296 of the Revised Administrative Code, which requires that municipalities should. at the beginning of every year, make a general appropriation containing the probable expenses which, they would have to incur. (Emphasis supplied) Petitioner, on the other hand, argued that the above-quoted ruling is no longer applicable, citing this Court's ruling in the more 39 recent case of Osmea v. Commission on Audit, to wit: The Auditing Code of the Philippines (P. D. 1445) further provides that no contract involving the expenditure of public funds shall be entered into unless there is an appropriation therefor and the proper accounting official of the agency concerned shall have certified to the officer entering into the obligation that funds have been duly appropriated for the purpose and the amount necessary to cover the proposed contract for the current fiscal year is available for expenditure on account thereof. Any contract entered into contrary to the foregoing requirements shall be VOID. Clearly then the contract entered into by the former Mayor Duterte was void from the very beginning since the agreed cost for the project (P8,368,920.00) was way beyond the appropriated amount (P5,419,180.00) as certified by the nd City Treasurer. Hence, the contract was properly declared void, and unenforceable in COA's 2 Indorsement, dated September 4, 1986. The COA declared and we agree, that: The prohibition contained in Sec. 85 of PD 1445 (Government Auditing Code) is explicit and mandatory. Fund availability is, as it has always been, an indispensable prerequisite to the execution of any government contract involving the expenditure of public funds by all government agencies at all levels. Such contracts are not to be as final and binding unless a certification as to the funds availability is issued (Letter of Instruction No. 767, s. 1978). Antecedent advance appropriation is thus essential to government liability on contracts. This contract being violative of the legal requirement aforequoted, the same contravenes Sec. 85 of PD. 1445 and is null and void by virtue of Sec. 87. The trial court, which was affirmed by the Court of Appeals, concluded that: The contention of defendant that the Imus case is no longer applicable in view of the explicit provisions of PD 1445 is without merit. The prohibitions expressed in Sections 85, 86, and 87 of PD 1445 are already embodied in the provision of Revised Administrative Code, specifically Sections 606, 607 and 608, yet, the Supreme Court treated the contract therein as valid and required the defendant municipality to comply with its obligation despite the absence of prior approved appropriation at the time of the execution of the contract. The reason is that the obligation is not payable until the performance of the services contracted. That is the difference between the "Imus case" and the "Osmena case." In the former, the obligation to be rendered is the furnishing or sale of electric current which the defendant municipality is not bound to pay until the same has been furnished. While in the latter, the contract is for the construction of a modern abattoir. The amount payable is already fixed at the time the contract was executed. Moreover, what made the Supreme Court declare the contract entered therein as invalid is the attainment of the finality of the findings of the Commission on Audit, which the petitioner mayor previously invoked. Thus, the Highest Tribunal said, and this Court quotes: As a matter of fact, the City of Cebu relied on the above pronouncement and interposed the same as its affirmative defense, so much so that petitioner cannot now assert that it was void having been issued in excess of COA 's jurisdiction. A party cannot invoke the jurisdiction of a court or an administrative body to secure affirmative relief against his opponent and after obtaining or failing to obtain such relief, repudiate or question that same jurisdiction. It is not right for a party who has affirmed and invoked the jurisdiction of a

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court in a particular matter to secure an affirmative relief, to afterwards deny the same jurisdiction to escape a penalty. Besides, neither the petitioner nor HFCCI questioned the ruling of COA declaring the invalidity of the abattoir contract, thereby resulting in its finality even before the civil case was instituted. Petitioner could have brought the case to the Supreme Court on a petition for certiorari within thirty days from receipt of a copy of the COA decision in the manner provided by law and the Rules of Court. A decision of the Commission or 40 any of its Auditor not appealed within the period provided by law, shall be final and executory. Contrary to petitioner's arguments, the facts in the Osmea case are not parallel to the facts in the instant case. While in the former the construction of an abattoir entailed the payment in full of a fixed amount, the case at bar involved a contract for services still to be rendered which was payable on a monthly basis, just as in the Imuscase. In the latter case, the Supreme Court did not declare the contract null and void ab initio for the reason that appropriation for the project can be made subsequent to the execution of the contract. Consequently, the ruling in the Imus case is germane to the instant case. Furthermore, the trial court noted that while herein petitioner would attack the subject contract for being fatally defective, the Commission on Audit did not declare the said contract as null and void, unlike in the Osmea case where the questioned contract was declared invalid by the COA. Hence, the ruling in the Osmea case finds no application in the instant controversy. While the contracts were admittedly negotiated contracts, this fact was never raised by the petitioner before the trial court, Court of Appeals, and in the instant petition. The question of the validity of the said contracts never hinged on the fact that there was no public bidding. What is on record is that it was Mayor Simon who initiated the negotiations to convince respondent to allow the use of its property as a dumpsite. Public bidding may have been dispensed with, not only because "time is of the essence" but in recognition of the reality that offering property to be used as a dumpsite is not an attractive nor lucrative option for property owners. This reality is all the more glaring in the current situation where Metro Manila local government units are seemingly unable to cope with the disastrous lack of garbage dumping sites. A major part of the problem is that no one wants to be the dumping ground of someone else's garbage. This problem is compounded by recent events where tragedy has befallen scavengers and residents in a Quezon City dumpsite that should have been closed years ago. It would no longer be prophetic to say that had Quezon City used the subject dumpsite and discontinued the use of the Payatas dumpsite way back in 1991, tragedy therein would have been averted. Finally, petitioner's refusal to honor the contract is not only contrary to law, but also grossly unfair to respondent Lexber. It was petitioner that first offered and later persuaded respondent Lexber to convert the latter's property into a sanitary landfill for petitioner's exclusive use. While the property could have been used for other more lucrative and pleasant purposes, petitioner convinced respondent Lexber by its assurances and stipulations in the contract. In turn, respondent Lexber relied on petitioner to abide by their contract, only to be rebuffed after petitioner had already taken initial advantage of the facilities. By virtue of the infrastructure intended for the sanitary landfill that was erected thereon, respondent Lexber could not divert its use to other purposes. It is but fair that respondent Lexber be compensated for the financial losses it has incurred in accordance with the obligation of petitioner as stipulated in the second negotiated contract. WHEREFORE, in view of all the foregoing, the Decision of the Court of Appeals in CA-G.R. CV No. 59541 affirming the judgment of the Regional Trial Court of Quezon City, Branch 220 in Civil Case No. Q-94-19405 is herebyAFFIRMED in toto. The instant petition for review is DENIED for lack of merit. No costs. SO ORDERED.1wphi1.nt