LUIS ACHONDOA, PLAINTIFF-APPELLANT, VS. PROVINCE OF MISAMIS OCCIDENTAL, DEFENDANT-APPELLEE.

Plaintiff seeks to recover from defendant the sum of P20,000.00,
plus legal interest thereon from September 20, 1950, and attorney’s
fees in the amount of P6,000.00.

Defendant set up as a defense that the provincial treasurer was not
authorized by defendant to secure any loan from plaintiff or from any
other person to pay the salaries of its employees and since the deposit
made by plaintiff consists of emergency notes and the same was not
withdrawn prior to 1950 the provincial treasurer registered said notes
pursuant to Republic Act No. 22 in the name of defendant without its
knowledge or consent. Defendant further avers that under the graduated
scale of redemption provided in Republic Act No. 369 the redemption
value of the amount deposited is lees than P5,000.00.

After trial, the court a quo rendered decision holding that the
provincial treasurer had no authority under the law to receive the
amount claimed either as a deposit or as a loan and so his act was
ultra vires and cannot bind the province of Misamis Occidental.
Wherefore, it absolved the defendant from the complaint. However, since
the money advanced by the treasurer was used by defendant in paying its
officials and employees who served during the occupation, the court
suggested that ways and means be devised by the corresponding
authorities whereby plaintiff may be reimbursed of the equivalent of
the money he had advanced which should be determined taking into
account the scale of values that may be adopted inasmuch as defendant
has benefited from the transaction.

Defendant has appealed directly to this Court on questions of law.

Sometime in June, 1945, after the American forces of liberation had
occupied the province of Misamis Occidental and its civil government
has been restored plaintiff was prevailed upon by the provincial
treasurer of said province to deposit in his office the amount of
F20,000.00 in emergency notes which was used to pay 50 % of the
salaries of the employees of the province who were retained in the
service during the occupation. The question to be determined is whether
the province of Misamis Occidental is bound by the act of the
provincial treasurer in securing the money from the plaintiff and so
whether it can be legally obliged to return the same to the plaintiff.

It is contended that the money taken from the plaintiff by the
provincial treasurer was in the form of a loan as evidenced by the
receipts issued in relation thereto wherein it appears the words
“deposit for safekeeping” followed by the following statement: “to be
withdrawn in installments as per agreement provided there will be
available cash.” As a matter of fact, plaintiff contends, the trial
court found that the money was used to pay 50% of the salaries of the
employees who were retained by the province during the war. The money
given being in the form of a loan and defendant having been benefited
therefrom it is but fair that it be returned to the plaintiff even if
the provincial treasurer is not authorized by law to borrow money in
the exercise of his functions.

This contention cannot be sustained. Section 2089 of the Revised
Administrative Code which prescribes the functions and duties of the
provincial treasurer does not contain any provision which may authorize
him to borrow money from a third .person or entity even if it may be
needed to pay the expenses of the province for such power devolves upon
the provincial government itself (Section 2086, Revised Administrative
Code). Thus from said Section 2089 it may be inferred that one of the
functions of the provincial treasurer is to “have charge of the
disbursement of all provincial funds and other funds the custody of
which may be entrusted to him by law or. other competent authority” (d)
and if he finds that the funds in his possession are not sufficient to
cover the expenses of the provincial government his duty is to apprise
the provincial board of such^ shortage in order that it may devise ways
and means to remedy the situation (a), and if notwithstanding such step
the provincial board cannot remedy the situation what the provincial
treasurer should do is to suspend the payment of any expenditure if by
doing so he may incur in an overdraft, but he does not have the power
to cover the shortage by borrowing money because such power has been
withheld from him (Section 615, Revised Manual of Instruction to
Treasurers). It is evident that the act of the provincial treasurer in
securing a loan from the plaintiff is ultra vires and hence is not binding on the province.

In the circumstances, we find correct the following pronouncement of the trial court:

“Whether we consider the transaction between the
plaintiff Luis Achondoa and the Province of Misamis Occidental, as a
deposit or a loan, the conclusion is indubitable that said transaction
is not sanctioned by law as it is not within the power of the
Provincial Treasurer either to receive such deposit or to obtain such a
loan. Considering, therefore, that the action of the Provincial
Treasurer of Misamis Occidental or of his Assistant is ultra vires,
such action cannot obligate or bind the province of Misamis Occidental.

x x x x

“In
the interest of justice, therefore, this Court suggests to the
corresponding authorities of the National Government including the
Legislative to find ways and means so that the plaintiff may be paid
the equivalent amount of money representing the P20,000.00 which was
deposited with the office of the Provincial Treasurer under a just
scale of values, once it is determined, the kind of emergency money
which the plaintiff had deposited with the province” of Misamis
Occidental by and thru the request of the office of the Provincial
Treasurer.”

WHEREFORE, the decision appealed from is affirmed, without costs.

Padilla, Labrador, Concepcion, Barrera, Paredes, Dizon, and De Leon, JJ., concur.
Bengzon, C.J., took no part.