HON. GABRIEL LUIS QUISUMBING, HON. ESTRELLA P. YAPHA,
HON. VICTORIA G. COROMINAS, HON. RAUL D., vs. HON. GWENDOLYN F. GARCIA, HON. DELFIN P.
AGUILAR, HON. HELEN S. HILAYO, and HON. ROY L. URSAL
G.R. No. 175527, December 8, 2008
FACTS:
The Commission on Audit (COA) conducted a financial
audit and its report stated that "Several contracts in the total amount of
P102,092,841.47 were not supported with a Sangguniang Panlalawigan
resolution authorizing the Provincial Governor to enter into a contract, as
required under Section 22 of R.A. No. 7160."
Gov. Garcia sought for reconsideration from COA but
without waiting for its resolution, she instituted an action for Declaratory
Relief where she alleged that the infrastructure contracts complied
with R.A. No. 9184 bidding procedures and were entered into pursuant to the
general and/or supplemental appropriation ordinances passed by the Sangguniang
Panlalawigan, hence a separate authority from SP to enter into such
contracts was no longer necessary.
On the question of the
remedy of declaratory relief being improper because a breach had already been
committed, the trial court held that the case would ripen into and be treated
as an ordinary civil action.
Petitioners insisted
that the RTC committed reversible error in granting due course to Gov. Garcia’s
petition for declaratory relief despite a breach of the law subject of the
petition having already been committed. This breach was allegedly already the
subject of a pending investigation by the Deputy Ombudsman for the Visayas.
Petitioners further maintained that prior authorization from the Sangguniang
Panlalawigan should be secured before Gov. Garcia could validly enter
into contracts involving monetary obligations on the part of the province.
Gov. Garcia claimed that
at the time of the filing of the petition for declaratory relief, there was not
yet any breach of R.A. No. 7160.
COA officials alleged
that the petition for declaratory relief should have been dismissed for the
failure of Gov. Garcia to exhaust administrative remedies, rendering the
petition not ripe for judicial determination.
ISSUE:
Whether the petition for declaratory relief is proper.
RULING:
No. The petition for declaratory relief is not proper.
The Court held that the case should be remanded to the lower court and treated as an ordinary civil action rather
than as a declaratory relief action.
Parenthetically, Gov.
Garcia’s petition for declaratory relief should have been dismissed because it
was instituted after the COA had already found her in violation of Sec. 22(c)
of R.A. No. 7160.
One of the important
requirements for a petition for declaratory relief under Sec. 1, Rule 63 of the
Rules of Court is that it be filed before breach or violation of a deed, will,
contract, other written instrument, statute, executive order, regulation,
ordinance or any other governmental regulation.
In Martelino v.
National Home Mortgage Finance Corporation, we held that the
purpose of the action is to secure an authoritative statement of the rights and
obligations of the parties under a statute, deed, contract, etc.,
for their guidance in its enforcement or compliance and not to settle issues
arising from its alleged breach. It may be entertained only before the breach
or violation of the statute, deed, contract, etc. to which it
refers. Where the law or contract has already been contravened prior to the
filing of an action for declaratory relief, the court can no longer assume
jurisdiction over the action. Under such circumstances, inasmuch as a cause of
action has already accrued in favor of one or the other party, there is nothing
more for the court to explain or clarify, short of a judgment or final order.
Thus, the trial court
erred in assuming jurisdiction over the action despite the fact that the
subject thereof had already been breached by Gov. Garcia prior to the filing of
the action. Nonetheless, the conversion of the petition into an ordinary civil
action is warranted under Sec. 6, Rule 63 of the Rules of Court.
Erroneously, however,
the trial court did not treat the COA report as a breach of the law and
proceeded to resolve the issues as it would have in a declaratory relief
action. Thus, it ruled that prior authorization is not required if there exist
ordinances which authorize the local chief executive to enter into contracts.
The problem with this ruling is that it fails to take heed of the incongruent
facts presented by the parties. What the trial court should have done, instead
of deciding the case based merely on the memoranda submitted by the parties, was
to conduct a full-blown trial to thresh out the facts and make an informed and
complete decision.
As things stand, the
declaration of the trial court to the effect that no prior authorization is
required when there is a prior appropriation ordinance enacted does not put the
controversy to rest. The question which should have been answered by the trial
court, and which it failed to do was whether, during the period in question,
there did exist ordinances (authorizing Gov. Garcia to enter into the questioned
contracts) which rendered the obtention of another authorization from the Sangguniang
Panlalawigan superfluous. It should also have determined the character
of the questioned contracts, i.e., whether they were, as Gov. Garcia claims,
mere disbursements pursuant to the ordinances supposedly passed by the sanggunian or,
as petitioners claim, new contracts which obligate the province without the
provincial board’s authority.
It cannot be
overemphasized that the paramount consideration in the present controversy is
the fact that the Province of Cebu was operating under a re-enacted budget in
2004, resulting in an altogether different set of rules as directed by Sec. 323
of R.A. 7160. This Decision, however, should not be so construed as to
proscribe any and all contracts entered into by the local chief executive
without formal sanggunian authorization.
In view of the
foregoing, the instant case should be treated as an ordinary civil action
requiring for its complete adjudication the confluence of all relevant facts.
Guided by the framework laid out in this Decision, the trial court should
receive further evidence in order to determine the nature of the questioned
contracts entered into by Gov. Garcia, and the existence of ordinances
authorizing her acts.
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