DAVAO CITY WATER DISTRICT v CSC  “GOCCs with original charter” = GOCCs created
September 13, 1991 || Medialdea, J.
PROVISION
RPC Art 203: “For the purpose of applying the
provisions of this and the preceding titles of this book,
any person who, by direct provision of the law, popular
election or appointment by competent authority, shall
take part in the performance of public functions in the
Government of the Philippine Islands, of shall perform in
said Government or in any of its branches public duties
as an employee, agent or subordinate official, of any
rank or class, shall be deemed to be a public officer.”
FACTS
Petitioners are several Local Water Districts
(LWDs) formed under the “Provincial Water Utilities Act
of 1973” or PD 198 (amended by PD 768 and 1479)
issued by President Marcos, which authorized different
local legislative bodies to form and create LWDs through
a resolution they will pass subject to the guidelines,
rules, and regulations therein laid down. Local Water
Utilities Administration (LWUA), a national agency in
charge of regulating water utilities operations, was also
created under the decree.
Respondent Civil Service Commission
(CSC), following the ruling in Tanjay Water District v
Gabaton (1989), issued Resolution No 90-575 requiring
all appointments of personnel of LWDs to be subject to
the Commission because it has jurisdiction over them
pursuant to Article IX-B, Section 2(1) of the 1987
Constitution, which provides that the Civil Service
embraces all branches of government including GOCCs
with original charters. But later on, there was a
contradicting decision in Metro Iloilo Water District v
NLRC (1990) which ruled that PD 198 cannot be
considered as the charter itself creating LWDs, thus the
Civil Service Laws do not cover them as they do not
have original charters. Pending clarification from the
Supreme Court, CSC suspended Res. No. 575. The
same is the issue between Respondent Commission
on Audit (COA) and LWUA, in which the former
contends that it has visitorial power over the LWDs while
the latter says otherwise.
Petitioners stand by the Metro Iloilo ruling and
argue that they are private corporations without original
charter, hence not within respondents’ jurisdiction. They
said that PD 168 is only a general legislation, and that
the operative act which created the LWDs is not PD168
but the resolution of the sanggunian concerned.
ISSUE
W/N the LWDs formed under PD 198 are GOCCs with
original charter falling under the jurisdiction of CSC and
COA? YES
RATIO
PD 198 is a special law, not a general legislation.
by special law and not under the Corporation
Code of the Philippines
 PD 198 is a special law applicable only to the
different water districts created pursuant thereto.
It pertains to a special purpose which is intended
to meet a particular set of conditions and
circumstances. The fact that it generally applies
to all water districts in the country does not
change the fact that it is a special law.
 Accordingly, the resolution in Metro Iloilo is
hereby abandoned.
PD 198, not the resolution of the sanggunian, is the
very law which gives a water district juridical
personality.
 Based on some pertinent Sections in the decree
which defines the primary purpose and basic
organizational set-up of the corporation, it is
clear that it is made to be the charter of the
different LWDs.
 While it is true that a resolution of a local
sanggunian is still necessary for the final
creation of a district, it cannot be considered as
its charter, for it is intended only to implement
the provisions of PD 198. The local
sanggunian has no authority or discretion to
grant a charter for the creation of a private
corporation. It is merely given the authority for
the formation of a water district, on a local option
basis, to be exercised under and in pursuance of
PD198.
The petitioners are not private corporations, but a
GOCC.
 It is clear in certain Sections in PD 198 that it is
indeed a GOCC and not a private corporation.
o Sec 3(b) of PD 198: the power to
appoint members of the Board of
Directors belongs to the local executives
of the local subdivision units of the
districts.
 Whereas it is different in private
corporations where member or
stockholders elect the members
of the Board of Directors.
PETITION DISMISSED.