LESSON not ratified by the City Council, a fact duly noted in an Audit Observation
174567- Vergara v OMB Memorandum dated 9 August 2002 and issued by the State Auditor Ruben C.
Carpio
The City Council issued a Resolution authorizing the Mayor to purchase the subject lots for
the construction of the new city hall. Petitioner filed a complaint against the mayor and the
city treasurer before the Ombudsman for violation of Sec 3(e) of RA 3019. One of the
arguments raised by petitioner: the documents relating to the sale were not ratified by the
city council. The Ombudsman dismissed the case for lack of probable cause. SC upheld
the resolution issued by the Ombudsman. According to the Court, Ombudsman’s finding
of probable cause, or lack of it, is entitled to great respect absent a showing of GADALEJ
(policy of non-interference). In this case, the findings of the Ombudsman are supported by
substantial evidence. Re: the issue of ratification, SC held that ratification is not a condition
sine qua non for the Mayor to enter into contracts. LGC requires prior authority from the
City Council and not ratification. In this case, there was no bad faith on the part of the
Mayor when it purchased the subject lots since he was authorized by the City Council per
Resolution No. 28.
DOCTRINE
Ratification by the City Council is not condition sine qua non for a mayor to enter into
contracts; the resolution issued by the Sangguniang Panlungsod showed no evident bad
faith in purchasing the subject lots. The lack of ratification alone does not characterize the
purchase of the properties as one that gave unwarranted benefits; the Court has
maintained its policy of non-interference with the Ombudsman’s exercise of its
investigatory and prosecutory powers in the absence of grave abuse of discretion.
FACTS
1. Resolution No. 115. City Council of Calamba (city council) issued Resolution No.
115, series 2011. It authorized Mayor Lajara to negotiate with landowners within the
vicinity of Batangas Real, Halang, and Uno, for a new city hall site. The choice for the
new city hall site was limited to properties owned by Pamana and a lot in Barangay
Saimsim, Calamba.
2. Resolution No. 280. Authorizing mayor Lajara to purchase several lots owned by
Pamana with a total area of 55, 190 sqm. He was also authorized to execute, sign
and deliver the required documents.
3. Pursuant to said resolutions, Mayor Lajara entered into the following agreements: (1)
MOA which discussed the terms and conditions of the sale; (2) Deed of Sale; (3)
Deed of Real Estate Mortgage where the City mortgaged the same properties to
Panaman and Prudential to secure the balance of the purchase price; (4) Deed of
Assignment of Internal Revenue, assigning the 2002-2003 IRAs of the City to Panama
and Prudential Bank. These documents were endorsed to the city council.
4. Petitioner: filed a complaint before the Ombudsman against Mayor Lajara and the
city treasurer for alleged violation of Sec 3(e) of RA 3019 1– (1) the documents were
1 b. Ombudsman Act granted the Office of the Ombudsman full administrative
Section 3. Corrupt practices of public officers. In addition to acts or omissions of public officers
already penalized by existing law, the following shall constitute corrupt practices of any public
officer and are hereby declared to be unlawful.
e) Causing any undue injury to any party, including the Government, or giving any private party
any unwarranted benefits, advantage or preference in the discharge of his official administrative
or judicial functions through manifest partiality, evident bad faith or gross inexcusable
Pagaspas of the Commission on Audit; (2) 5 out of the 15 lots were registered under
the name of Philippine Sugar Estates Development Company (PSEDC) and not
owned by the sellers; (3) no relocation survey prior to the sale; (4) two lots were
offered by Fr. Sulpico at a lower price; (5) 4 lots were considered as road lots; (6) an
existing barangay road and access road were included in the sale
5. Ombudsman: issued a Resolution holding that there is no probable cause for holding
respondents liable for said violation –
a. (1) subject properties have been transferred and are now registered in the
name of City of Calamba;
b. (2) the reasonableness of the purchase price could be deduced from the fact
that the City bought them at 3,800 per sqm., an amount lower than their
zonal value at 6,000 per sqm.;
c. (3) the terms and conditions of the sale were neither onerous or
burdensome since the City was able to immediately take possession of the
lots although they have only paid 10% of the purchase price and was not
required to pay interest on installment payments;
d. (4) no bad faith on the part of the Mayor since he had authority from the City
Council;
e. (5) re: alleged overpricing, the affidavit of Fr. Sulpico stated that those lots
were excluded from the offer being creek easement lots;
f. (6) re: ownership, new titles were issued in the name of Panama with
PSEDC as the former registered owner;
g. (7) the absence of relocation survey does not affect the validity of the
transactions.
6. Respondents: (1) it is not sound practice to depart from the policy of non-interference
in the Ombudsman’s exercise of discretion to determine whether to file an information
against an accused; (2) out of the six PSEDC-owned lots, 4 were already transferred
to Panama; (3) re: overpricing, the lower price offered by Fr. Sulpico had been
superseded by his own denial of said offer during the meeting of Sangguniang
Panglungsod on November 14, 2002; (4) re: absence of ratification, Section 22 of
LGC spoke of prior authority not ratification; (5) re: absence of relocation survey, it
would not affect the validity of the transactions.
ISSUE with HOLDING
1. W/N OMB committed GAOD when it dismissed the case against respondents –
NO
a. The mandate of the Ombudsman is stated under Section 12, Article XI of the
Constitution. Section 13 of Art XI lists the powers and functions of the
Ombudsman which includes: “investigate on its own, or on complaint by any
person, any act or omission of any public official, office, or agency, when
such act or omission appears to be illegal, unjust, improper, or inefficient.
authority. Section 15 of the said Act reiterates the investigatory powers of
the Ombudsman.
negligence. This provision shall apply to officers and employees of offices or government
corporations charged with the grant of licenses or permits or other concessions .
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 c. The Ombudsman’s power to investigate and prosecute is plenary and
unqualified. It has the discretion to determine whether a criminal case
should be filed or not. The court has consistently adopted a policy of non-
interference in the exercise of Ombudsman’s constitutionally mandated
powers. The Court, however, may still review the findings of the
Ombudsman on certain instances. The exceptions (see doctrine), however,
are not present in this case.
d. In this case, Ombudsman’s findings were supported by substantial
evidence. The Ombudsman’s finding of probable cause, or lack of it, is
entitled to great respect absent a showing of GADALEJ.
e. In Rubio vs Ombudsman, the court held that what is contextually punishable
under Section 3(e) of RA 3019 is the act of causing any undue injury to any
party, or the giving to any private party unwarranted benefits, advantage or
preference in the discharge of the public officers functions. Furthermore, SC
held in Pecho vs SB, that causing undue injury to any party, including the
government, could only mean actual injury or damage which must be
established by evidence. Here, Ombudsman found that petitioner had not
substantiated his claims against respondents.
2. W/N the documents should be ratified – NO
a. The ratification by the City Council is not a condition sine qua non for the
local chief executive to enter into contracts on behalf of the city. The law
requires prior authorization from the City Council per Section 22 (c) of the
LGC and Section 4552, not ratification.
b. In this case, the City Council issued Resolution No. 280 which authorized
Mayor Lajara to purchase the subject lots. Therefore, there was no bad faith
on the part of the Mayor in purchasing the subject lots. The lack of
ratification alone does not characterize the purchase as one that gave
unwarranted benefits to Panama or Prudential Bank or one that caused
undue injury to the City.

DISPOSITIVE PORTION
Petition dismissed

DIGESTER: Gab.

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Section 22. Corporate Powers.
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(c) Unless otherwise provided in this Code, no contract may be entered into by the local
chief executive in behalf of the local government unit without prior authorization by the
Sanggunian concerned. A legible copy of such contract shall be posted at a conspicuous place
in the provincial
capitol or the city, municipal or barangay hall.

Section 455. Chief Executive: Powers, Duties and Compensation.

(b) For efficient, effective and economical governance the purpose of which is the general
welfare of the city and its inhabitants pursuant to Section 16 of this Code, the city mayor shall:
xxx
(vi) Represent the city in all its business transactions and sign in its behalf all bonds,
contracts and obligations, and such other documents upon authority of the sangguniang
panlungsod or pursuant to law or ordinance.
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