G.R. No. L-26522. February 27, 1969
ANTONIO FAVIS AND CORAZON FAVIS, DOING BUSINESS UNDER THE TRADE NAME “UNION GROCERY & HARDWARE”, PLAINTIFFS-APPELLANTS, VS. MUNICIPALITY OF SABAÑGAN, BONTOC, MOUNTAIN PROVINCE, …
TEEHANKEE, J.:
An appeal on questions of law, directly elevated to this Court by
plaintiffs-appellants from the adverse decision of the Court of First Instance
of Baguio City.
Plaintiffs-appellants, Antonio Favis
and Corazon Favis, doing business under the trade
name of “Union Grocery and Hardware”, originally instituted on February
4, 1965, in the City Court of Baguio City, this
action for collection against defendant-appellee, the
Municipality of Sabañgan, Bontoc,
Mountain Province, for the recovery of the principal sum of P1,115.00,
representing the charge invoice value of G.I. pipes of various sizes needed by
defendant-appellee in its municipal waterworks
construction, besides twelve (12%) per cent interest and twenty-five (25%)
attorney’s fees and costs.[1]
Defendant-appellee, through its mayor,
Agustin Velasco, timely filed its Answer to the Complaint, alleging that
according to its records, “the then Municipal Mayor of Sabañgan
wan never authorized to contract or buy on credit from the plaintiff, various
and different sizes of G.I. Pipes needed in the construction of its municipal
waterworks, hence, defendant municipality can not in any way, be legally bound
for the acts of the then mayor….”[2]
The City Court of Baguio, after trial,
rendered judgment in favor of plaintiffs-appellants, as prayed for in their
complaint. Defendant-appellee
interposed its appeal from said decision to the Court of First Instance of Baguio City, but did not pay or deposit the Court of First
Instance docket fee nor file an appeal bond, as required by Rule 40, section 2
of the Rules of Court.
Plaintiffs-appellants, therefore, moved the Court a quo to
dismiss the appeal on the ground of non-perfection of the appeal, contending
that only the Republic of the Philippines
is exempt from the said requirements for appeal, under Section 16 of Rule 141
of the Rules of Court.[3]
The Court a quo denied plaintiffs-appellants dismissal
motion, holding that:
“The Municipality of Sabañgan, being
a branch of the Government of
the Republic of the Philippines, is exempt from the filing of ouch fees in
accordance with Section 16 of Rule 141, in conjunction with Section 2 of the
Revised Administrative Code.” (Rec. on App., 14-15)
Plaintiffs-appellants’ motion for reconsideration having been denied by the Court a quo, the case
proceeded to trial and the said Court thereafter rendered its decision
dismissing the complaint on the
ground of lack of legal liability on the part of defendant municipality.[4]
Plaintiffs-appellants have filed this “direct appeal to this
Court, expressly pursuant to Section 2 of Rule 42 of the Rules of Court.[5]
The only issue of law raised by them in two related assignments of error in
their brief is “the correct interpretation of Section 16 of Rule 141 of
the new Rules of Court’; which provides that –
“Section 16. Government
Exempt. – The Republic of the Philippines
is exempt from paying the legal fees provided in this rule.”
They
contend in their brief that “the defendant-appellee,
not being the Republic of the Philippines, is not exempt from filing an Appeal Bond
and in the payment of the legal fees provided for under the said Section 16 of
Rule 141 of the new Rules of Court.
Consequently, the decision of the City Court in Civil Case No. 3114 was
not vacated because the appeal was not perfected. (Section 9 of Rule 40). It follows that the Court of First Instance
of Baguio did not have jurisdiction to try the case
on its merit, and hence, the decision rendered by the said Court of First
Instance in Civil Case No. 1604 is null and void and has
no legal effect.”[6]
Plaintiffs’ appeal must
fail for lack of merit:
1. We sustain
plaintiffs-appellants in their contention that the exemption clause in Rule
141, Sec. 16 of the new Rules of Court (formerly Rule 130) exempting the
Republic of the Philippines from paying the legal fees provided therein is
applicable only to the Republic of the Philippines; i.e. the National
Government, and not to local governments or subdivisions, as correctly ruled by
the late Secretary of Justice Pedro Tuason.[7] Section 2 of the Revised Administrative
Code specifically defines “National Government” as referring “to
the central government as distinguished from the different forms of local
government” and differentiates it from “specially organized
provinces”, “regularly organized provinces”,
“municipalities” and “chartered cities” which constitute
“”the provincial or municipal branches or other form of local
government.” That such exemption from the payment of legal fees is
available only to the State, the Republic per se, is evident from
the similar construction of long usage to the analogous provision of Rule 142,
Section 1 of the Rules of Court that “no costs shall be allowed against
the Republic of the Philippines
unless otherwise provided by law.” As early as 1920, it has been held by
this Court in Palanca vs. The City of Manila and
Trinidad[8],
that while no costs shall be allowed against the Government of the Philippines
where it is the unsuccessful party, the general rule that costs are imposed
upon the unsuccessful party applies to public corporations which sue and can
be sued and municipal corporations.
2. The Court a quo, however, did not commit a
fatal error of jurisdiction in erroneously holding that the defendant
Municipality was exempt from payment
of the appellate court docket fee provided in Rule 40, Section 2, and taking
cognizance of its appeal. As far as the writer’s research shows, this is the first time that the question of
the applicability to local governments of the exemption from legal fees under
Rule 141, Section 16, has been squarely put in issue in a case before this
Court, although this Court has invariably required local governments to pay
such docket fees in cases brought on
appeal. The parties-litigants were properly before the Court a quo, which duly heard them in a trial de
novo and rendered judgment accordingly.
Plaintiffs-appellants’ contention that non-payment by defendant-appellee of
the legal fees and non?posting of the appeal bond renders null and void
the Court a quo’s decision
– when the said Court, in exercise of its appellate jurisdiction had held defendant municipality to be exempt from such
requirements – is legally untenable. This Court,
speaking through Justice J. B. L. Reyes, in National Waterworks & Sewerage Authority vs. Sec. of Public
Works & Communication, G.R. No. L-20928, March 31, 1966, has already ruled
out such a contention, holding
that in appealed cases, failure to pay
the docketing fees does not automatically result in the dismissal of
the appeal, much less affect the
Court’s jurisdiction, the dismissal
being discretionary in the appellate
court, and that this rule is
applicable by analogy to Courts of First Instance in the exercise of
the appellate jurisdiction conferred upon them.
“In its first assignment of error, the defendant Secretary
contends that, admitting that the NAWASA’s complaint
in appeal was sent by registered mail
on the last of the 30 days allowed by the Irrigation Act for appealing
the administrative decision to the court
of competent jurisdiction, still the complaint, may not be deemed to have been filed on the same day,
for the reason that there is no
showing that the filing fees were simultaneously paid.”
“The appellant’s argument, however, fails to take into account that, in appealed cases, failure
to pay the docketing fees does
not automatically result in the dismissal of the appeal; the dismissal
is discretionary in the appellate
court. Rule 141, Section 3,
speaking of the fees of the clerk of the Court of Appeals or the Supreme Court,
provides that:
‘If the fees are not paid, the court may refuse to proceed with the
action until they are paid and may dismiss the appeal or the action or
proceeding.’
“The rule quoted is applicable by analogy to the Court of
First Instance of Manila in the instant case, since the Court was exercising
appellate jurisdiction conferred upon it by law to review administrative
decisions under the Irrigation Act.” (Emphasis supplied)
3. The Court a quo’s
appealed decision[9]
dismissing plaintiffs-appellants’ complaint for lack of legal liability on the
part of defendant municipality remains to be passed upon on its merits, although
appellants did not assail the merits thereof in their brief and appellee in turn did not file any brief.
It should be noted that plaintiffs appellants having directly
elevated their appeal on questions of law to this Court, pursuant to Rule 42,
Section 2, they are foreclosed from disputing the Court a quo’s findings of
fact in its decision, as reproduced hereinafter.[10]
On the basis of the facts as found by the Court a quo, we hold its decision on the legal issues to be in accord with
the law and pertinent jurisprudence.
“And Sec. 3, Rep. Act 2264 under Purchasing provides:
“Purchasing. — Subject to Auditing rules and
regulations, provinces, cities and municipalities are hereby empowered to make
purchases, equipment and supplies that they respectively need either locally or
elsewhere without the necessity of buying the same thru the Bureau of Supply:
Provided, however: –
“(a) xxxx
“(b) xxxx
“(c) That purchases shell be made by public
bidding, and awards shall be made by the Provincial, City or Municipal
Committee on Award, composed of x x x the Municipal Mayor, the Municipal Treasurer and a
councilor chosen by the Municipal
Council in the case of municipalities and regularly organized municipal
districts.
“The record does not
show that the foregoing requisites have been complied with. But the undisputed fact is that the
municipality is benefited by the
installation of the G.I. pipes. To this
the Supreme Court in G.R. No. L-9920, Bartolome E. San Diego vs. The Municipality of Naujan, Province
of Oriental Mindoro,
promulgated on February 29, 1960,
said:
‘xxxx the doctrine of estoppel
can not be applied as against a municipal
corporation to validate a contract which it has no power to make, or
which it is authorized to make only under prescribed conditions, within
prescribed limitations, or in a prescribed mode or manner, although the
corporation has accepted the benefits thereof and the other party has fully
performed his part of the agreement, or has expended large sums in preparation
for performance. A reason frequently
assigned for this rule, is that to apply the doctrine of estoppel
against a municipality in such case would be to enable it to do indirectly what
it cannot do directly. Also, where a
contract is violative of public policy, the
municipality executing it cannot be estopped to
assert the invalidity on the ground; nor can it be estopped
to assert the invalidity of a contract which has ceded away, controlled or
embarrassed its legislative or governmental powers.’ (38 Am. Jr. pp. 202-204)
“In connection with public biddings which was not complied
with the same decision of the Supreme Court stated: “‘public biddings are held for the best
protection of the public and to give the public the best possible advantages
by means of open competition between the bidders. Thus, contracts requiring public bidding
affect public interest, and to change them without complying with that
requirement would indeed be against public policy.’
“One more significant point in connection with the
acquisition of the assorted pipes is revealed in Exh.
“C”, a portion of which is also marked as Exh.
“2”, for the municipality. The
letter indicates that the payment would come from the release to be made by
former President Garcia which, unfortunately, was frozen. It also indicates that instructions were
given not to install the pipes until all questions were settled. And since the pipes had already been
installed they were ordered dismantled to be piled and to be returned to the
owner if the frozenning (sic) order was not
lifted. It is, therefore, clear that the
mayor, aside from want of authority to execute the contract, had not intended
to bind the municipality of Sabañgan to pay for the
indebtedness for the payment would not come from the funds of the municipality
but from the release of funds by former President Garcia.
“Plaintiff took the risk of delivering the pipes not knowing
definitely from whom the payment would be drawn. He indicated in the invoice that the
articles were sold to Gov. Bado Dangwa
– for Mayor Bodud of Sabañgan. Not able to collect from Gov. Dangwa or Mayor Bodud he sued the
municipality of Sabañgan. Unfortunately, the requisites of municipal
contracts in order to bind the municipality have not been complied with hence
the same may not be enforced against the municipality
of Sabañgan.”
(Rec. on App., 24-28)
This Court’s ruling in
San Diego vs. Municipality of Naujan, correctly
relied upon by the trial court in absolving defendant-municipality, has been
re-affirmed in San Buenaventura vs. Municipality of San Jose, Camarines Sur,[11]
and City of Manila vs. Tarlac Development Corporation, etc.,[12]
in which latter case, this Court further held that even a consent decree, in
which the officials of a municipality
assume obligations not authorized by law, is null and void. This
Court thus held in said latter case that ?
“the fact that, by consent of the municipal officer, an
agreement or stipulation made by them has been put in the form of a judgment, in an effort to give
it the force and effect of a judgment, does not cure a lack of power in the officers to make it, and if
such power is lacking, the judgment as well as the stipulation is
lacking , the judgment as well as the stipulation is void……” (Emphasis
reproduced)
In the present case, as pointed out by the Court a quo,
the mayor of defendant municipality, aside from not having claimed any authority
to make the purchase of the materials delivered by plaintiffs-appellants, had
clearly indicated that the municipality would not be bound to pay therefor and that the plaintiffs-appellants would have to
look for payment to the National Government through funds yet to be released by
way of assistance to the
municipality.
WHEREFORE, the decision appealed from is hereby affirmed,
with the modification that defendant-appellee is
required to pay the legal fees due from it to the Court of First Instance of Baguio by virtue of its appeal from the original decision
of the Baguio City Court in Civil Case No. 3114. Without costs.
Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal, Zaldivar, Sanchez, Castro, Fernando, Capistrano, and Barredo, JJ., concur.
[1]
Record on Appeal, p. 1-4
[2]
Rec. on Appeal, 4-5
[3]
Rec. on Appeal, 12-13
[4]
Idem., 5-65
[5]
Appellants’ Brief, p. 2
[6]
Idem. p. 5-6
[7]
Op. 319, S. of 1954; Rec. on App., pp. 18-21
[8]
41 Phil 125, 133; cf– Macondray
Co. vs. Sarmiento, 90 Phil 709
[9]
Notice of App., Rec. on App., p. 28
[10]
Sotto Pahang v. Sotto, G.R. No. L-21175, July 15, 1968; Perez v. Araneta, G.R. No. L-18414, July 15, 1968; Cebu Portland
Cement Co. v. Naga, G.R. No. L-24116-7, Aug. 22, 1968
[11]
G.R. No. L-19309, Jan. 30, 1965
[12]
G.R. Nos. L-24557, L-24469, L-24451, July 31, 1968