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Pacifer Victorino C.

Ticao
Public Corporation

Romeo R. Salalima, et. al.


vs.
Executive Secretary Teofisto Guingona, Jr., et. al.
G.R. Nos. 117589-92. May 22, 1996

Facts:

NPC filed a case against the Province of Albay questioning the validity of the
auction sale, which the Province conducted because of NPCs failure to pay real
property taxes assessed. The Albay Sangguniang Panlalawigan, through a resolution,
authorized respondent Governor to engage the services of a Manila-based law firm
(Cortes & Reyna Law Firm) to handle the case against NPC.Later, the Province also
engaged the services of Atty. Cornago. This is despite the availability of the
Provincial Legal Officer, Atty. Ricafort, who already filed the Provinces comment on
the NPC petition. A retainer agreement was entered into which provided that Atty.
Cornago and the law firm shall receive P50,000 as acceptance fee and 18% of
the value of the property subject matter of the case which isP214 Million. The
province had already paid P7,380,410.31 as attorneys fees when the COA disallowed
further disbursements for lack of the requisite prior written conformity and
acquiescence of the Sol Gen and the written concurrence of the COA as required by
COA Circular No. 86-255.- An administrative complaint was then filed against Gov.
Salalima, Vice Gov. Azaa, and other AlbaySangguniang Panlalawigan Members
relative to the questioned retainer contract and the disbursementof public funds in
payment thereof.

Issue:
WON respondents have incurred administrative liability in entering into the
retainer agreement with Atty. Cornago and the Cortes & Reyna Law Firm
and in making payments pursuant to said agreement

Held:

YES. In hiring private lawyers to represent the Province of Albay, respondents


exceeded their authority and violated a provision of the LGC and a Supreme Court
doctrine. Moreover, the entire transaction was attended by irregularities.

Ratio:

Sec. 481 LGC : requires the appointment of a legal officer to represent the LGU
in all civilactions and specal proceedings wherein the LGU or any official thereof, in
his official capacity is a party.

EXCEPTION: In actions or proceedings where a component city or municipality is


a party adverse to the provincial government or to another component city or
municipality, a special legal officer may be employed to represent the adverse party

In Municipality of Bocaue, et al. v. Manotok, LGUs cannot be represented by


private lawyers and it is solely the Provincial Fiscal who can rightfully represent
them.

Attendant Irregularities:
* No prior written approval of the Sol Gen and COA before the disbursements
were made.
* The resolution passed by the Sanggunian only authorized the Governor to sign
a retainer contract with the Cortes & Reyna Law Firm and yet he also signed with
Atty. Cornago, a different entity.
* The Province paid the Cortes & Reyna Law Firm despite the fact that it didnt
appear as counsel for the Province in the SC case.
* Considering the standing of both Atty. Cornago the Cortes & Reyna Law Firm,
the P38.5 Million
attorneys fees is unconscionable and violative of (a) COA Circular No. 85-55-
A prohibiting irregular,
unnecessary, excessive or extravagant expenditures or uses of funds; and (b)
Sec. 3(e) and (g) of the
Anti-Graft and Corrupt Practices Act.
* However, it was held that respondents could no longer be subject to
disciplinary action for such administrative misconduct as it was committed during
a prior term.