JUAN DE G. RODRIGUEZ, ETC., ET AL., PETITIONERS, VS. AURELIO MONTINOLA, ETC., ET AL., RESPONDENTS.

This is an original action of certiorari instituted in this Court by
the Provincial Governor and the members of the Provincial Board of
Pangasinan to nullify the disapproval of the Secretary of Finance of
their Resolution No. 55 dated January 30, 1952, abolishing the
positions of three special counsel in the province, to prohibit the
provincial treasurer and the district auditor from paying the salaries
of three special counsel from February 1,1952, and to prevent the
latter from continuing to occupy and exercise the functions incident to
their positions.

On January 30, 1952, a month after the petitioners assumed their
respective offices as a result of the victory of the Nacionalista Party
in the Province of Pangasinan in the general elections of 1951, the
provincial board passed Resolution No. 55, the pertinent provisions of
which are as follows:

* * * * * * *

WHEREAS, the continuation of the offices of special counsel in this province is not an urgent necessity for the present;

WHEREAS,
the discontinuance of the offices of special counsel will not impair
the administration of justice to the people of Pangasinan as there are
at present three assistant provincial fiscals, one provincial fiscal
and one Special Prosecutor making five in all.

* * * * * * *

RESOLVED, to abolish as they are hereby abolished
effective on the 1st day of February, 1952, the various positions of
Special Counsel in the Province of Pangasinan, without prejudice of
recreating them in the future if and when necessity arises and exigency
of times demand their recreation in the interest of the promotion of
peace and tranquility, and provided that the funds of the province
shall warrant their recreations. The following day, January 31, 1952,
the provincial board ordered the reversion of the amounts appropriated
for the salaries of the three positions above mentioned to the general
fund of the province, the same to be available for other purposes to be
later specified by the provincial board. (Resolution No. 63, Annex B.)
On February 6, 1952, by Resolution No, 71, a new position of
clerk-stenographer was created in the office of the provincial
governor, with compensation at the rate of Pl,680 per annum, the salary
to be paid out of the funds1 reverted to the general fund due to the
abolition of the positions of special counsel (Annex C). That same day,
February 6, 1952, the provincial board also appropriated the sum of
P2,000 to defray the cost of printing circulars in the interest of a
campaign to restore peace and order and to increase the production of
agricultural crops (Annex D).

Upon being informed of the suppression of the said positions, the
provincial fiscal of Pangasinan sent a communication to the Secretary
of Justice calling attention thereto and to the fact that the
provincial fiscal^ the three assistant fiscals, and the special
prosecutor in the province would not be able to handle all the cases
pending before the Courts of First Instance holding sessions within the
province. He asked that steps be taken with the Secretary of Finance to
have the resolution in question disapproved (Annex 1, attached to the
letter to the Secretary of Finance). Pursuant to the communication of
the provincial fiscal, the Secretary of Finance on February 15, 1952,
disapproved the said Resolution No. 55. His letter of disapproval is as
follows: Gentlemen:

This refers to your current Resolution No. 55
abolishing the three positions of Special Counsel at P3600 per annum
each in the Office of the Provincial Fiscal, fund for which having been
provided in the current fiscal year annual general fund budget. Under
the provisions of section 1686 of the Administrative Code, said
positions are of temporary character and may be abolished upon the
termination of the specific cases assigned to their incumbents. In
view, however, of the statement contained in the letter of the
Provincial Fiscal dated February 2, 1952, to the Honorable, the
Secretary of Justice who forwarded it to this Department, to the effect
that the services of said officers are still needed to attend to the
numerous cases still pending adjudication in the seven courts of that
province, the abolition of said positions can not be given favorable
consideration.

Respectfully,

Sgd.) AURELIO MONTINOLA                    
Secretary                        

The issue squarely presented before us, therefore, is: Does
Resolution No. 55 require the approval of the Secretary of Finance in
order to have force and effect? The respondents contend that such
approval is necessary, as the resolution in question affects the
appropriation of the Province of Pangasinan, which is expressly placed
under the Secretary of Finance for approval.

The starting point from which the question may be considered is
article VII, section 10, of the Constitution of the Philippines,
sub-paragraph (1) of which provides as follows:

(1) The President shall have control of all the
executive departments, bureaus, or offices, exercise general
supervision over all local governments as may be provided by law, and
take care that the laws be faithfully executed.

It might be helpful to recall that under the Jones Law the Governor
General had both control and supervision over all local governments.
(Section 22, Jones Law.) The evident aim of the members of the
Constitutional Convention in introducing the change, therefore, must
have been to free local governments from the control exercised by the
central government, merely allowing the latter supervision over them.
But this supervisory jurisdiction is not unlimited; it is to be
exercised “as may be provided by law.”

At the time of the adoption of the Constitution, provincial
governments had been in existence for over thirty years, and their
relations with the central government had already been defined by law.
Provincial governments were organized in the Philippines way back in
the year 1901 upon the approval of Act No. 82 by the Philippine
Commission on January 31, 1901. The policy enjoined by the President of
the United States in his Instructions to the Philippine Commission was
for the insular government to have “only supervision and control over
local governments as may be necessary to secure and enforce faithful
and efficient administration by local officers.” (McKinley,
Instructions to the Philippine Commission, April 7, 1900.) The aim of
the policy was to enable the Filipinos to acquire experience in the art
of self-government, with the end in view of later allowing them to
assume complete management and control of the administration of their
local affairs. This policy is the one now embodied in the above-quoted
provision of the Constitution.

With the above background in mind, we shall now proceed to examine
the nature of the relationship between the Secretary of Finance, as
head of an executive department, and the provincial governments. The
following provisions of law have some bearing with the disputed power
of the provincial board.

SEC. 2106. Powers to be exercised with approval of Department Head.—Upon
approval by the Department Head of the particular resolution by which
such action shall be taken, the provincial boards of the respective
provinces shall have authority:

(a) To appropriate money for
purposes not specified by law, having in view the general welfare of
the province and its inhabitants. (Revised Administrative Code, as
amended up to June 17, 1950.)

SEC. 2120. Estimate of revenues and receipts for current year— Annual provincial budget.—Immediately
upon receipt of the statement of receipts and expenditures from the
provincial treasurer, the provincial board will make a careful estimate
of the revenues and receipts for the current year. Upon the basis of
such estimated income the provincial board will, likewise, make
detailed appropriations covering the estimated expenditures for the
year, but in no case shall such appropriations be in excess of the
estimated revenues and receipts. The statement of receipts and
expenditures for the preceding year, together with the estimates and
appropriations by the provincial board for the current year, shall be
known as the annual provincial budget. Changes in the estimates and
appropriations may be made by the provincial board from time to time
during the year by supplemental budgets: Provided, That no changes
shall be made to appropriations made for health without first
consulting the chief of the sanitary division. (Ibid.)

SEC.
1. The powers and administrative supervision heretofore exercised by
the Secretary of the Interior over the assessment of real property,
appropriation, and other financial affairs of the provincial, municipal
and city governments and over the offices of provincial, municipal and
city Treasurers and provincial and city assessors are hereby
transferred to the Secretary of Finance. (Commonwealth Act No. 78.)

Our attention has also been called to the following provisions of Executive Order No. 167 dated October 8, 1938:

SEC. 2. The Department of Finance is the agency of
the National Government for the supervision and control of the
financial affairs of the provincial, city, and municipal governments.

SEC.
3. In conformity with the foregoing, the budgets of the provincial
governments shall be submitted to the Department of Finance, through
the Department of the Interior, such budgets to contain the plantilla
of personnel in such details as heretofore prescribed and clear and
specific statements both of the estimated income and the proposed
expenditures for the corresponding fiscal year. In thus submitting the
budget, the provincial board should enclose a written opinion of the
provincial treasurer as prescribed in section Two thousand one hundred
seven of the Administrative Code, together with a statement of the
district engineer containing his comments on the proposed expenditures
for his office as well as for public works, and also similar written
statements of the division superintendent of schools, the district
health officer, the provincial auditor, the provincial fiscal, and the
provincial agricultural supervisor regarding the different kinds of
proposed expenditures for the activities respectively under them. The
budget with all the accompanying statements shall be sent to the
Department of Interior, which should make its comment on the proposed
expenditures. The Secretary of the Interior shall then send the budget
with his comment and recommendation together with the corresponding
opinion and statements of the chiefs of local offices to the Department
of Finance, in taking action on the budget, shall be guided by the
comment and recommendation of the Secretary of the Interior.

The
same procedure shall be observed in the case of supplemental budgets.
and to Executive Order No. 383 dated December 20, 1950, which transfers
the supervision and control of the personnel and finances of the
provincial governments from the Secretary of the Interior to the
Secretary of Finance.

It is on the strength of the above provisions, asserting that the
abolition of the positions of the three special counsel in the province
of Pangasinan affects’ the financial affairs of the province, that
respondents rest their claim of the alleged power of the Secretary of
Finance to disapprove Resolution No. 55.

We must state frankly at the outset that the use of the word
“control” in Executive Order No. 167 finds no support of jurisdiction
either in the Constitution (which grants the President only powers of
general supervision over local governments), or in any provision of the
law. Any effect or interpretation given to said executive order
premised on the use of the word “control” therein would be of doubtful
validity. That the word was intended not to be given full force or
effect is apparent from the directive contained in Section 9 of the
executive order, which provides:

SEC. 9. In revising the budgets of local governments
and in passing over the expenditures made by such entities, the
Department of the Interior and the Department of Finance shall be
guided by the principle that provided that the expenses contemplated
are within their financial capacity, the local government should be
given a large degree of freedom in determining for themselves the
propriety and wisdom of the expenses that they make.

Is the suppression of the position of three special counsel a
financial matter falling under the supervisory power of the Secretary
of Finance over provincial governments? Whether or not funds are
available to pay for a newly created position is evidently a financial
matter; but the suppression of positions is not a financial matter. The
problem before the provincial board was, should not the services of the
three special counsel be stopped and the funds1 appropriated for them
used for other services? This is not a financial matter. It is so only
in the sense that the sum appropriated for the abolished positions
reverts to the general funds to be thereafter appropriated again as the
provincial board may provide. Were we to consider all changes in the purposes
of appropriations as financial matters, because they may have relation
to the annual appropriations, there would be no form of activity
involving the expenditure of money that would not fall within the power
of the Secretary of Finance to approve or disapprove. Such an
interpretation can not be held to be within the intendment of the
executive order on the approval of the budget of the provincial board.

Having arrived at the conclusion that the suppression of the
positions of three special counsel is not a financial matter, subject
to the approval of the Secretary of Finance, we now proceed to examine
the issue from another angle, i.e., whether the Secretary of Finance,
as an alter ego of the President of the Philippines, may not
have the authority to disapprove the resolution in question under the
general supervisory authority given to the President of the Philippines
in sub-paragraph (1), section 10, of the Constitution. The supervisory
authority of the President is limited by the phrase “as provided for by
law;” but there is no law in accordance with which said authority is to
be exercised. The authority must be exercised, therefore, in accord
with general principles (of law).

“To supervise” is to oversee, to have oversight of, to superintend
the execution of or the performance of a thing, or the movements or
work of a person; to inspect with authority; to inspect and direct the
work of others. (Fluet vs. McCabe, Mass., 12 N. E. 2d 89, 93.) It is to
be noted that there are two senses in which the term “supervision” has
been understood. In one, it means superintending alone or the oversight
of the performance of a thing, without power to control or to direct.
In the other, the inspection is coupled with the right to direct or
even to annul. The decisions of courts in the United States distinguish
between supervision exercised by an official of a department over
subordinates of that department, and supervision for the purpose only
of prevention and punishing abuses, discrimination’s, and so forth.
Thus, in the case of Aull vs. City of Lexington, 18 Mo. 401, 402, where
a board of health was given supervision over the health of the city, it
was held that said power of supervision should be understood as
embracing the power of advising measures necessary for the preservation
of health. In Vantongeren vs. Hefferman, 38 N. W. 52, 55-56, where a
secretary of the interior is given general supervision over all public
business relating to public lands, it was held that the said secretary,
acting through a commissioner, has the power to review all acts of
local officers or to direct and correct any errors committed by them.
It was said that any less power than this would make the supervision an
idle act, a mere overlooking without any power of correction or
suggestion. In the case of State vs. Fremont, E. & M.V.R. Co., 35
N. W. 118, 124, a railroad board which is granted the power of
inspecting and superintending railways was understood to have the power
to prevent unjust discriminations against persons and places and to
prevent and punish abuses, etc.

The Secretary of Finance is an official of the central government,
not of provincial governments, which are distinct and separate. If any
power of general supervision is given him over local governments,
certainly it can not be understood to mean or to include the right to
direct action or even to control action, as in cases of school
superintendents or supervisors within their respective districts. Such
power (of general supervision) may include correction of violations of
law, or of gross errors-, abuses, offenses, or maladministration.
Unless the acts of local officials or provincial governments constitute
maladministration, or an abuse or violation of a law, the power of
general supervision can not be exercised. In synthesis, we hold that
the power of general supervision granted the President, in the absence
of any express provision of law, may not generally be interpreted to
mean that he, or his alter ego, the Secretary of Finance, may direct the form and manner in which local officials shall perform or comply with their duties.

The act of the provincial board in suppressing the positions of
three special counsel not being contrary to law, or an act of
maladministration, nor an act of abuse, the same may not be disapproved
by the Secretary of Finance acting as a representative of the President
by virtue of the latter’s power of general supervision over local
governments. For a provincial board to determine that other services
are more necessary than the services of three special counsel in the
province, or that the funds appropriated for the three special counsel
may be more profitably used in other activities or services, is no
violation of law, and neither does it constitute an abuse of discretion
or abuse of power. If the Legislature had thought it convenient or
necessary that the services of three additional counsel are to be
utilized in the province to handle the prosecution of many pending
cases before the courts holding sessions in the province, it should
have inserted said positions in the law.

We do not lose sight of the fact that the disapproval of the
resolution by the Secretary of Finance was based on the objection
thereto of the provincial fiscal, who had certified that the services
of said special counsel were necessary in order to cope with the big
number of criminal cases pending before the Courts of First Instance
holding sessions in the province. The need of the services of said
counsel may have been paramount; the objection thereto of the
provincial fiscal, we admit, is of great weight. However, the question
before us is not one of necessity or usefulness, but exclusively one of
authority or prerogative. It is the provincial board that created the
positions of the special counsel; it is its consequent prerogative to
abolish the positions in the exercise of its discretion. We do not deny
that political motives may have induced the suppression; but neither
can we deny that the same motives may have induced their creation. Be
that as it may, as the need for the positions is, in the very natural
order of things, within the competence or prerogative of the provincial
board to determine, the provincial fiscal should have appealed to the
provincial board to retain the positions, instead of seeking the
disapproval of the board’s resolution by the Secretary of Finance, on
the ground that it involves a financial matter. We are not prepared to
declare that in accordance with general principles the action of the
provincial board is an abuse of the power and discretion lodged in it
by existing law, subject to disapproval by higher authority under its
power of general supervision.

For the foregoing considerations, the writ prayed for is hereby
granted, and the act of the Secretary of Finance in disapproving
Resolution No. 55 of the provincial board of Pangasinan is hereby
declared to be of no force and effect; the three positions of special
counsel in the office of the provincial fiscal of Pangasinan are hereby
declared vacant from the date of the promulgation of this decision, and
the respondents Jose D. Parayno, Alejandro de Guzman, Jr., and
Victoriano Gayagoy are prohibited from performing the functions
pertaining, or receiving the emoluments attached, thereto; and the
provincial treasurer and provincial auditor are ordered to desist from
paying and auditing the salaries of said respondents from the date of
the promulgation of this decision.

Paras, C. J., Pablo, Bengzon, Reyes, Jugo, Bautista Angelo, and Concepcion, JJ., concur.