December 2009 - Philippine Supreme Court Decisions/Resolutions

Philippine Supreme Court Jurisprudence


Philippine Supreme Court Jurisprudence > Year 2009 > December 2009 Decisions > G.R. No. 165109 - Manuel Mamba, et al. v. Edgar R. Lara, et al.:




G.R. No. 165109 - Manuel Mamba, et al. v. Edgar R. Lara, et al.

PHILIPPINE SUPREME COURT DECISIONS

SECOND DIVISION

[G.R. NO. 165109 : December 14, 2009]

MANUEL N. MAMBA, RAYMUND P. GUZMAN and LEONIDES N. FAUSTO, Petitioners, v. EDGAR R. LARA, JENERWIN C. BACUYAG, WILSON O. PUYAWAN, ALDEGUNDO Q. CAYOSA, JR., NORMAN A. AGATEP, ESTRELLA P. FERNANDEZ, VILMER V. VILORIA, BAYLON A. CALAGUI, CECILIA MAEVE T. LAYOS, PREFERRED VENTURES CORP., ASSET BUILDERS CORP., RIZAL COMMERCIAL BANKING CORPORATION, MALAYAN INSURANCE CO., and LAND BANK OF THE PHILIPPINES, Respondents.

D E C I S I O N

DEL CASTILLO, J.:

The decision to entertain a taxpayer's suit is discretionary upon the Court. It can choose to strictly apply the rule or take a liberal stance depending on the controversy involved. Advocates for a strict application of the rule believe that leniency would open floodgates to numerous suits, which could hamper the government from performing its job. Such possibility, however, is not only remote but also negligible compared to what is at stake - "the lifeblood of the State". For this reason, when the issue hinges on the illegal disbursement of public funds, a liberal approach should be preferred as it is more in keeping with truth and justice.

This Petition for Review on Certiorari with prayer for a Temporary Restraining Order/Writ of Preliminary Injunction, under Rule 45 of the Rules of Court, seeks to set aside the April 27, 2004 Order 1 of the Regional Trial Court (RTC), Branch 5, Tuguegarao City, dismissing the Petition for Annulment of Contracts and Injunction with prayer for the issuance of a Temporary Restraining Order/Writ of Preliminary Injunction, 2 docketed as Civil Case No. 6283. Likewise assailed in this Petition is the August 20, 2004 Resolution 3 of RTC, Branch 1, Tuguegarao City denying the Motion for Reconsideration of the dismissal.

Factual Antecedents

On November 5, 2001, the Sangguniang Panlalawigan of Cagayan passed Resolution No. 2001-272 4 authorizing Governor Edgar R. Lara (Gov. Lara) to engage the services of and appoint Preferred Ventures Corporation as financial advisor or consultant for the issuance and flotation of bonds to fund the priority projects of the governor without cost and commitment.

On November 19, 2001, the Sangguniang Panlalawigan, through Resolution No. 290-2001, 5 ratified the Memorandum of Agreement (MOA) 6 entered into by Gov. Lara and Preferred Ventures Corporation. The MOA provided that the provincial government of Cagayan shall pay Preferred Ventures Corporation a one-time fee of 3% of the amount of bonds floated.

On February 15, 2002, the Sangguniang Panlalawigan approved Resolution No. 2002-061-A 7 authorizing Gov. Lara to negotiate, sign and execute contracts or agreements pertinent to the flotation of the bonds of the provincial government in an amount not to exceed P500 million for the construction and improvement of priority projects to be approved by the Sangguniang Panlalawigan.

On May 20, 2002, the majority of the members of the Sangguniang Panlalawigan of Cagayan approved Ordinance No. 19-2002, 8 authorizing the bond flotation of the provincial government in an amount not to exceed P500 million to fund the construction and development of the new Cagayan Town Center. The Resolution likewise granted authority to Gov. Lara to negotiate, sign and execute contracts and agreements necessary and related to the bond flotation subject to the approval and ratification by the Sangguniang Panlalawigan.

On October 20, 2003, the Sangguniang Panlalawigan approved Resolution No. 350-2003 9 ratifying the Cagayan Provincial Bond Agreements entered into by the provincial government, represented by Gov. Lara, to wit:

A. Trust Indenture with the Rizal Commercial Banking Corporation (RCBC) - Trust and Investment Division and Malayan Insurance Company, Inc. (MICO).

b. Deed of Assignment by way of security with the RCBC and the Land Bank of the Philippines (LBP).

c. Transfer and Paying Agency Agreement with the RCBC - Trust and Investment Division.

d. Guarantee Agreement with the RCBC - Trust and Investment Division and MICO.

e. Underwriting Agreement with RCBC Capital Corporation.

On even date, the Sangguniang Panlalawigan also approved Resolution No. 351-2003, 10 ratifying the Agreement for the Planning, Design, Construction, and Site Development of the New Cagayan Town Center 11 entered into by the provincial government, represented by Gov. Lara and Asset Builders Corporation, represented by its President, Mr. Rogelio P. Centeno.

On May 20, 2003, Gov. Lara issued the Notice of Award to Asset Builders Corporation, giving to the latter the planning, design, construction and site development of the town center project for a fee of P213,795,732.39.12

Proceedings before the Regional Trial Court

On December 12, 2003, petitioners Manuel N. Mamba, Raymund P. Guzman and Leonides N. Fausto filed a Petition for Annulment of Contracts and Injunction with prayer for a Temporary Restraining Order/Writ of Preliminary Injunction 13 against Edgar R. Lara, Jenerwin C. Bacuyag, Wilson O. Puyawan, Aldegundo Q. Cayosa, Jr., Norman A. Agatep, Estrella P. Fernandez, Vilmer V. Viloria, Baylon A. Calagui, Cecilia Maeve T. Layos, Preferred Ventures Corporation, Asset Builders Corporation, RCBC, MICO and LBP.???�r?bl?�


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