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20. City Councilor of Cebu City v. Cuizon, etc.

etal Cuizon continued with the transaction by placing the


Oct. 31, 1972 order with the Equipment Division of the Continental Ore
Corporation of New York U.S.A. for the purchase of the said
Facts: heavy equipment. Hence, plaintiffs-appellants filed their
FACTS: complaint against defendants-appellees. The lower court
The plaintiffs are majority members of the city of Cebu dismissed the appeal.
praying that the contract entered into on February 5, 1966 by ISSUE:
and between defendant, Mayor Cuizon on behalf of the city for Whether City of Cebu is exempted and the same not
the purchase of road construction equipment from Tropical be liable for any and all obligations to the defendant Philippine
declared as null and void ab initio. National Bank:
The contract was without the necessary authority and HELD:
approval of the city council, and that the city treasurer had not 1. The lower court gravely erred in issuing its dismissal
certified to the city mayor, as required by section 607 of the order on the ground of plaintiffs' alleged lack of interest or legal
Revised Administrative Code that funds have been duly standing as city councilors or as taxpayers. The error was in
appropriated for the said contract and that the amount treating plaintiffs' complaint as a personal suit. The suit is,
necessary to cover the contract was available for expenditure rather, a representative suit on behalf and for the benefit of the
on account thereof. city of Cebu. The appeal at bar must therefore be granted and
The City Council approved Resolution No. 1648 the case ordered remanded to the lower court to be properly
authorizing the City Mayor, to negotiate and to contract for, by given the opportunity at the trial to present evidence in support
public bidding, on deferred payment plan and by lot bid, U.S. or of their respective contentions.
European made road construction equipments for the City of 2. The lower court entirely missed that the action filed
Cebu and authorizing him for this purposes, to sign the to declare null and void the P3-million contract executed by
corresponding contract and other pertinent papers. defendant for the purchase of road construction equipment
It also approved Resolution No. 1831, authorizing the purportedly on behalf of the city from its co-defendant
City Mayor, in connection with the authority granted him under Tropical, the corresponding letters of credit opened with the
Resolution No. 1648, current series, to utilize the Time Deposit bank by defendant; and, to prevent the disbursement of any
of the City of Cebu with the Philippine National Bank. city funds, and to exempt the City of Cebu and hold it not liable
The bid was awarded to the only bidder, the for any obligation arising from such contract and letters of
defendant Tropical Commercial Co., Inc. Hence, on January 20, credit specifically and precisely questioned in the complaint
1966, the City Council approved Resolution No. 122, to request filed by plaintiffs on behalf of the City as having been executed
the Award Committee to forward to this Body the pertinent without authority and contrary to law.
papers in connection with the bidding for two (2) complements 3. Plaintiffs' right and legal interest as taxpayers to file
of light and heavy equipments to be used by the City the suit and seek judicial assistance to prevent what they
Engineering Department. believe to be an attempt to unlawfully disburse public funds of
Notwithstanding the request contained in Resolution the city and to contest the expenditure of public funds under
No. 122, the defendant Cuizon, without having been duly contracts and commitments with defendants bank and Tropical
authorized thru proper resolution of the City Council, and which they assert to have been entered into by the mayor
without compliance with Resolution No. 122, signed a contract without legal authority. Since the defendant’s authority to
with the Tropical Commercial Co., Inc. for the acquisition of the enter transactions was revoked by the city council through its
heavy equipments on February 5, 1966. resolution No. 473 on March 10, 1966.
The City Council, without knowledge that the contract 4. Plaintiffs' right and legal interest as city councilors to
had already been signed, revoked the prior resolutions. file the suit and to prevent unlawful disbursements of city funds
The presiding officer of the City Council, City Councilor entered into by the defendant, notwithstanding the city
Florencio S. Urot, sent a telegram to the Manager of the council's revocation of his authority with due notice to
Philippine National Bank. The defendant Acting City Treasurer, defendant bank must be recognized.
Jesus E. Zabate, sent a reply to the Asst. Vice-President of the The defendants supports their contention using
defendant Philippine National Bank in Cebu City refusing the Republic Act No. 3857, that in section 20 (c) thereof, it is only
request of the Philippine National Bank (to withhold P3, the city mayor who is empowered "to cause to be instituted
000,000.00 from the time deposit of the City of Cebu) on the judicial proceedings to recover properties and funds of the city
ground that no appropriation for the purchase of heavy wherever found and cause to be defended all suits against the
equipments was made by the City Council. city," and that plaintiffs' suit must therefore fail since "there is
no provision in the said charter which authorizes expressly or respondent Executive Secretary Macaraig, Jr., confirmed and
impliedly the city council or its members to bring an action in approved FIRB Resolution No. 17-87.
behalf of the city". Though the issues raised was resolved by the Supreme
Their contention is untenable. The lower court's Court in G.R. No. 88291, the issues was again brought to the
narrow and unrealistic interpretation, that the acts of the city Supreme Court for the second time by the petitioner in G.R. No.
mayor are lawful and duly binds the city, would mean that no 88291.
action against a city mayor's actuations and contract in the Issue:
name and on behalf of the city could ever be questioned in Whether or not the powers conferred upon the FIRB by Section
court and subjected to judicial action for a declaration of nullity 2(a), (b), and (c) and (4) of Executive Order No. 93 "constitute
and invalidity, since NO CITY MAYOR WOULD FILE such an undue delegation of legislative power and is, therefore,
action on behalf of the city to question, much less nullify, unconstitutional.”
CONTRACTS EXECUTED BY HIM on behalf of the city and which Held:
he naturally believes to be valid and within his authority. No. With the growing complexities of modern life and
5. Section 20 (c) of the city charter invoked by the the many technical fields of governmental functions, as in
lower court has no applicability to the present suit, which matters pertaining to tax exemptions, delegation of legislative
is not one to recover properties and funds of the city or a powers has become the rule and non-delegation the exception.
suit against the city, but rather a representative suit on behalf The legislature may not have the competence, let alone the
of and purportedly for the benefit of the city, which the city interest and the time, to provide direct and efficacious
mayor is however loath to institute. solutions to many problems attendant upon present day
Under such circumstances, the plaintiffs as city undertakings. The legislature could not be expected to state all
councilors exclusively empowered by the city charter to "make the detailed situations wherein the tax exemption privilege
all appropriations for the expenses of the government of the would be restored. The task may be assigned to an
city" and who were the very source of the authority granted to administrative body like the Fiscal Incentives Review Board
the city mayor to enter into the questioned transactions which (FIRB).
authority was later revoked by them, to file the present suit on When E.O No. 93 (S'86) was issued, President Aquino
behalf of the City and to prevent the disbursement of city funds was exercising both Executive and Legislative powers. Thus,
under contracts impugned by them to have been entered into there was no power delegated to her, rather it was she who
by the city mayor without lawful authority and in violation of was delegating her power. She delegated it to the FIRB, which,
law. for purposes of E.O No. 93 (S'86), is a delegate of the legislature.
Clearly, she was not sub-delegating her power.
ACCORDINGLY, the order appealed from is hereby set E.O. No. 93 (S'86), as a delegating law, was complete
aside and the lower court is ordered to proceed with the trial in itself — it set forth the policy to be carried out 85 and it fixed
and disposition of the case below on its merits. the standard to which the delegate had to conform in the
performance of his functions, 86 both qualities having been
24. ERNESTO M. MACEDA, petitioner, vs. HON. CATALINO enunciated by this Court in Pelaez vs. Auditor General.
MACARAIG, JR For delegation to be constitutionally valid, the law
G.R. No. 88291 May 31, 1991; G.R. No. 88291 June 8, 1993 must be complete in itself and must set forth sufficient
Facts: standards.
On November 3, 1986, Commonwealth Act No. 120 Certain aspects of the taxing process that are not
created the NPC as a public corporation to undertake the really legislative in nature are vested in administrative agencies.
development of hydraulic power and the production of power In this case, there really is no delegation, to wit: a) power to
from other sources. value property; b) power to assess and collect taxes; c) power
Effective March 10, 1987, Executive Order No. 93 once to perform details of computation, appraisement or
again withdrew all tax and duty incentives granted to adjustment; among others.
government and private entities which had been restored
under Presidential Decree Nos. 1931 and 1955 but it gave the
authority to FIRB to restore, revise the scope and prescribe the
date of effectivity of such tax and/or duty exemptions.
On June 24, 1987 the FIRB issued Resolution No. 17-
87 restoring NPC's tax and duty exemption privileges effective
March 10, 1987. On October 5, 1987, the President, through