Republic of the Philippines

Court of Appeals
Cebu City

EIGHTEENTH (18th) DIVISION

ROMULO T. TORRES, CA-G.R. CV NO. 06568

Petitioner-Appellant,
Members:
- versus -

SANGGUNIANG DELOS SANTOS, E.L., Chairperson,

LAGURA-YAP, M.B.,
PANLUNGSOD NG CEBU,
MONTEJO-GONZAGA, D.P. JJ.
EDGARDO C. LABELLA,
NESTOR D. ARCHIVAL, SR., Promulgated: April 30, 2019
MARGARITA V. OSMEÑA, LEA
O. JAPSON, EUGENIO F.
GABUYA JR., MARY ANN C. DE
LOS SANTOS, DAVID F.
TUMULAK, NENDELL HANZ L.
ABELLA, SISIONIO M.
ANDALES, ALVIN B. ARCILLA,
ROBERTO A. CABARRUBIAS,
MA. NIDA C. CABRERA,
GERARDO A. CARILLO, JAMES
ANTHONY R. CUENCO, ALVIN
M. DIZON, RICHARD Z.
OSMEÑA, NOEL ELEUTERIO G.
WENCESLAO, PHILIP S.
ZAFRA, in their official capacity
as members of the Sangguniang
Panlungsod of Cebu City,
Respondents-Appellees.
CA-GR CV NO. 06568 Page 2 of 14
Decision

DECISION

MONTEJO-GONZAGA, J.:

This is an appeal from the Joint Order1 promulgated on 18

November 2015 by the Regional Trial Court, Branch 9 of Cebu City
dismissing the Petition for Declaratory Relief and Injunction filed by the
herein appellant, the decretal portion of which reads:

“WHEREFORE, premises
considered, this Court hereby:

1. DENIES the Motion to Remand Case to

RTC Branch 23 filed by plaintiff;
2. DENIES Urgent Motion for
Reconsideration of the Order dated October 1,
2015 with Manifestation filed by plaintiff; and
3. DENIES the Motion for Intervention filed
by German B. Perez; and
4. DISMISSES the instant petition.

SO ORDERED.”2

Assailed, too, is the Order3 dated 10 December 2015, denying

the Motion for Reconsideration4 of the said Joint Order.

THE ANTECEDENTS

Petitioner-appellant Romulo Torres (Torres), as a citizen and

taxpayer, instituted a Petition for Declaratory Relief and Injunction 5 on
17 September 2015 docketed as Civil Case No. CEB-42095 against the
1
Penned by Presiding Judge Alexander N.V. Acosta, Records, pp. 210-218, Rollo, pp. 46-54.
2
Rollo, p. 54.
3
Id., pp. 55-56.
4
Id., pp. 219-226.
5
Records, pp. 2-9.
CA-GR CV NO. 06568 Page 3 of 14
Decision

members of the Sangguniang Panlungsod ng Cebu (Sanggunian)

praying to declare Cebu City Resolution No. 13-0418-20146 dated 13
August 2014 as null and void. The pertinent portion of the said
resolution states:

“RESOLVED, to authorize
Honorable City Mayor Michael L. Rama, for
and on behalf of the City of Cebu, to negotiate
and dispose by sale through Public Bidding to
any interested and qualified parties, the City-
owned lot known as Lot No. 8 or a portion
thereof containing a total land area of 26
hectares, more or less, located in the South
Road Properties (SRP) embraced and covered
by Transfer Certificate of Title No. 107-
2010002288 issued by the Register of Deeds of
Cebu City, subject to Commission on Audit rules
and regulations;

RESOLVED FURTHER, to authorize

the Honorable City Mayor, for and on behalf of
the City of Cebu, to negotiate and dispose by sale
through Public Bidding to any interested and
qualified parties, the City-owned consolidated
lot known as Lot No. 7 and Lot No. 17 or a
portion thereof, containing a total land area of
19.2 hectares, more or less, located in the South
Road Properties (SRP) embraced and covered
respectively by Transfer Certificate of Title No.
107-2010002287 and Transfer Certificate of Title
No. 107-1000072 issued by the Register of Deeds
of Cebu City, subject to Commission on Audit
rules and regulations.”

Prior to the issuance of the foregoing Resolution, that is on 18

July 2012, the Sanggunian approved Ordinance No. 23327 entitled “An
Ordinance Protecting the South Road Properties and its Stakeholders from

6
Records, pp. 20-23.
7
Id., pp. 10-14; Rollo, pp. 136-140.
CA-GR CV NO. 06568 Page 4 of 14
Decision

Unlawful and Unauthorized Transactions and Dealings.” The relevant

excerpt of Ordinance No. 2332 reads:
“Section 2. UNSOLICITED
PROPOSALS FOR INVESTMENT OR
PARTICIPATION IN THE DEVELOPMENT OF
THE SOUTH ROAD PROPERTIES. - The City of
Cebu declares as a matter of policy that
unsolicited proposals from parties, investors or
stakeholders interested in investing or
participating in the development of the South
Road Properties are encouraged and are
welcome.
Such parties, investors or
stakeholders may submit unsolicited proposals
for study and evaluation of the merits and
benefits of such proposal.

Section 3. NO PRIOR AUTHORITY

TO OFFER, SELL, DISPOSE, TRANSFER OR
OTHERWISE CONVEY PROPERTY IN THE
SOUTH ROAD PROPERTIES. - Absent a
specific prior approval from the Sangguniang
Panlungsod of the City of Cebu, no person,
employee or official of the City of Cebu,
including without limitation the Mayor of the
City of Cebu and/or the Bids and Awards
Committee, is authorized to: (a) sell, dispose,
transfer or otherwise convey any of the
properties in the South Road Properties; (b)
advertise or publish for sale, disposal, transfer or
other conveyance; (c) invite for public bidding,
negotiated sale or other mode of sale, disposal,
transfer or conveyance; or (d) transact in any
manner whatsoever in furtherance of such sale,
disposal, transfer or conveyance of any property
in the South Road Properties belonging to or in
the name of the City of Cebu; Provided,
however, that the Cebu Investment Promotions
Center shall continue performing its tasks as the
primary marketing arm of the South Road
Properties.”8

8
Rollo, p. 139.
CA-GR CV NO. 06568 Page 5 of 14
Decision

The then Mayor of Cebu, Mayor Michael Rama (Rama) voteod 9

the Ordinance but was overriden by the Sanggunian in Resolution No.
12-3815-201210 dated 15 August 2012.

In view of the conflict of Ordinance No. 2332 from Resolution No.

13-0418-2014, the Sanggunian issued on 24 June 2015 Resolution No.
13-3399-2015 resolving to refer to the Department of Interior and
Local Government (DILG) – Manila the issue on whether Resolution
No. 13-0418-2014 can supersede or amend Ordinance No. 2332.

On 30 July 2015, the DILG issued an opinion11 that Resolution

No. 13-0418-2014 cannot validly supersede or amend City Ordinance
No. 2332. The general rule is that ordinances are amended only by
ordinances, or in the two (2) instances where legislative measures
denominated by the local sanggunians as resolutions which have the
effect of ordinances, that is (1) in case of resolutions adopting a local
development plan and public investment programs formulated by
the local development councils, and (2) in case of a legislative
measure but has the formal and substantive requisites of an
ordinance. However, the instant Resolution No. 13-0418-2014 could
not qualify in the two (2) instances, thus, could not validly supersede
City Ordinance No. 2332.

Still on 24 June 2015, the Sanggunian likewise issued Resolution

No. 13-3398-201512 resolving to request the Bids and Awards
Committee (BAC) to hold in abeyance the bidding of certain lots in
the South Road Properties as there were still some concerns
propounded by the would-be locators.

Undeterred by the issuance of Resolution No. 13-3398-2015, the

then Mayor Rama sold by public bidding on 30 June 2015 some
portions of the SRP lots. On 5 August 2015, a Notice of Award13 was
conveyed to Filinvest Land, Inc. for Lot 1 (a consolidation from
portions of Lots 7 and 17) of the South Road Properties with an area

9
Veto message, Records, pp. 15-16.
10
Resolution No. 12-3815-2012, id., pp. 17-19.
11
Id., pp. 25-34.
12
Id., p. 24; rollo, p. 126.
13
Records, p. 130.
CA-GR CV NO. 06568 Page 6 of 14
Decision

of 192,385 square meters. Another Notice of Award14 was granted to

the Ayala, Cebu Holdings, Inc. and SM Prime Holdings, Inc.
consortium for Lot 8-B-1 (a portion of Lot 8-B) containing an area of
263,384 square meters. Out of the sale, the City of Cebu received fifty
percent (50%) of the purchase price of the said lots.

On 5 August 2015, the Sanggunian issued Resolution No. 13-

0295-201515 resolving to defer further action on the sale of the lots at
the South Road Properties as far as the signing of the Deed of Sale
and payments from the winning bidders are concerned in view of the
opinion rendered by the DILG.

Due to the alleged conflict in the manner of disposition or

development of the South Road Properties as prescribed in City
Ordinance No. 2332 and Resolution No. 130418-2014, the petitioner
filed a Petition for Declaratory Relief and Injunction praying to declare
the latter Resolution illegal and invalid for being in conflict with the
former Ordinance.

RULING OF THE TRIAL COURT

In the assailed Joint Order dated 18 November 2015, the Trial

Court dismissed the case below on the ground that the court a quo
found no actual case or controversy which called for the exercise of
judicial power. In short, the petitioner-appellant had no cause of
action against the respondent-appellees. The Trial Court declared
Resolution No. 130418-2014 valid because in its “whereas clauses”, the
Sanggunian merely expressed its opposition to the sale of property in
the SRP for the purpose of speculation and appreciation in the value
of the real estate. Nothing in the said resolution prohibits the sale of
the property in the SRP for the purpose of actively generating
income. As the subject resolution vested authority to the then Mayor
of Cebu City to dispose a portion of the SRP lots for the purpose of
actively generating income, such resolution could not be considered
in conflict with Ordinance No. 2332. Besides, said Resolution No.
130418-2014 has imposed conditions to be complied with by the

14
Id., pp. 131-132.
15
Id., p. 32.
CA-GR CV NO. 06568 Page 7 of 14
Decision

qualified bidders for the purpose of actively generating income in

and from the operations in the SRP.

ASSIGNMENT OF ERRORS

Saddened, petitioner-appellant Torres files the instant appeal

pointing out the following assigned errors, viz:

I.

THE HONORABLE TRIAL COURT ERRED

WHEN IT RULED THAT NO CAUSE OF
ACTION EXISTS IN THIS CASE;

II.

THE HONORABLE TRIAL COURT GRAVELY

ERRED WHEN IT RULED THAT RESOLUTION
NO. 13-0418-2014 IS THE REQUIRED “SPECIFIC
PRIOR APPROVAL” BY ORDINANCE NO. 2332;

III.

THE HONORABLE TRIAL COURT GRAVELY

ERRED WHEN IT DID NOT ISSUE A WRIT OF
PRELIMINARY INJUNCTION OR PERMANENT
INJUNCTION PRAYED FOR.16

While the instant case was pending appeal, the parties, on 5

November 2018, filed a Joint Motion To Approve Compromise
Agreement17 attaching therein the Compromise Agreement18 dated 29
October 2018 executed by the petitioner-appellant and the City
Government of Cebu, represented by Mayor Tomas R. Osmeña,
under the authority of SP Resolution No. 14-0598-2018.19

16
Rollo, p. 29.
17
Id., pp. 79-81.
18
Id., pp. 85-91.
19
Id., pp. 82-84.
CA-GR CV NO. 06568 Page 8 of 14
Decision

On 13 December 2018, the Court denied20 the Motion as the

terms and conditions of the said Compromise Agreement would
affect the rights and obligations of other parties not a party to the
instant case. The Court pronounced that such Compromise
Agreement will, in effect, declare something which has not been
passed upon by the Courts, hence, contrary to law and public policy.

The parties then, on 15 January 2019, filed a Joint Omnibus

Motion for Reconsideration21 of the foregoing Resolution asserting that
the Compromise Agreement binds only the parties in this case, that is
petitioner-appellant Torres and the City of Cebu, not the SM-Ayala
Consortium and/or Filinvest. In that said Motion, the parties
submitted another Compromise Agreement22 dated 11 January 2019 for
the approval of this Court.

As the instant case has already been submitted for Decision, the
Court opts to resolve the instant controversy on its merits.

The petitioner-appellant insists that there exists an actual case

or controversy in this case, that is, whether or not the Mayor of the
City could validly sell the SRP lots with a mere resolution and not an
ordinance authorizing him to do so. He likewise contends that while
Ordinance No. 2332 did not specify the kind of “specific approval”
required for a person to sell government property, the Local
Government Code itself provides that the mayor cannot enter into
contracts without the authority of the Sanggunian or if not through
the earlier passage of a law or ordinance. The Revised Administrative
Code of 1987 further requires that a law must be enacted to convey
patrimonial property of public corporations.

THE COURT'S RULING

The Petition is devoid of merit.

Section 1 of Rule 63 of the Rules of Court, which deals with

petitions for declaratory relief, provides in part:
20
Resolution dated December 13, 2018, id., pp. 93-99.
21
Id., pp. 103-114.
22
Id., pp. 128-135.
CA-GR CV NO. 06568 Page 9 of 14
Decision

Section 1. Who may file petition.- Any person

interested under a deed, will, contract or other
written instrument, whose rights are affected
by a statute, executive order or regulation,
ordinance, or any other governmental
regulation may, before breach or violation
thereof, bring an action in the appropriate
Regional Trial Court to determine any question
of construction or validity arising, and for a
declaration of his rights or duties thereunder.

Based on the foregoing, an action for declaratory relief should

be filed by a person interested under a deed, a will, a contract or
other written instrument, and whose rights are affected by a statute,
an executive order, a regulation or an ordinance. The purpose of the
remedy is to interpret or to determine the validity of the written
instrument and to seek a judicial declaration of the parties’ rights or
duties thereunder. The essential requisites of the action are as
follows: (1) there is a justiciable controversy; (2) the controversy is
between persons whose interests are adverse; (3) the party seeking
the relief has a legal interest in the controversy; and (4) the issue is
ripe for judicial determination.23

Not all of the foregoing requisites for an action for declaratory

relief are present in this case.

First of all, no justiciable controversy or a definite and concrete

dispute touching on the legal relations of parties having adverse legal
interests, which may be resolved by a court of law through the
application of a law,24 is attendant in this case. A justiciable
controversy is an existing case or controversy that is appropriate or
ripe for judicial determination, not one that is conjectural or merely
anticipatory.25

23
Velarde vs. Social Justice Society, G.R. No. 159357, April 28, 2004; Bayan Telecommunications Inc.
vs. Republic of the Philippines and National Telecommunications Commission , G.R. No. 161140, January 31,
2007.
24
Bayan Telecommunications Inc. vs. Republic of the Philippines and National Telecommunications
Commission, G.R. No. 161140, January 31, 2007.
25
Velarde vs. Social Justice Society, G.R. No. 159357, April 28, 2004.
CA-GR CV NO. 06568 Page 10 of 14
Decision

Here, the petitioner-appellant insists that there exists an actual

case or controversy which revolves on whether or not the mayor can
validly sell the SRP lots only with a mere resolution and not via an
ordinance authorizing him to do so.

The Court disagrees.

A thorough reading of the questioned ordinance and resolution

reveals that no actual controversy is obtaining in the instant case.

Section 2 of the City Ordinance No. 2332 expressly provided

that “the City of Cebu declares as a matter of policy that unsolicited
proposals from parties, investors or stakeholders interested in investing or
participating in the development of the South Road Properties are
encouraged and are welcome.” Section 3 thereof merely requires
“specific prior approval” from the Sangguniang Panlungsod of the City
of Cebu before any official or employee of the City of Cebu can,
among others, sell, dispose, transfer or convey any of the properties
in the South Road Properties. It is clear that SP Resolution No. 13-
0418-2014 is that “specific prior approval” required under the
Ordinance No. 2332 which explicitly authorized then City Mayor
Michael Rama, for and in behalf of the City, to negotiate and dispose
by sale through public bidding to any interested and qualified parties
Lot Nos. 7, 8 and 17 of the South Road Properties. Nowhere in the
said Ordinance did it distinctively require that there be another
ordinance authorizing the mayor to negotiate and dispose of portions
of the SRP lots. Hence, The SP Resolution No. 13-0418-2014 can
already be considered that “specific prior approval” required under
Ordinance No. 2332. Apparently, there is no conflict between the
subject resolution and the ordinance.

The petitioner-appellant further asserts that while Ordinance

No. 2332 did not specifically indicate the “specific prior approval” to
dispose the SRP lots, this “specific prior approval” should only be in
the form of an ordinance as indicated in Republic Act No. 7160 or the
Local Government which provides that the mayor cannot enter into
contracts without the authority of the Sanggunian or if not pursuant
to law or ordinance.

We are not convinced.

CA-GR CV NO. 06568 Page 11 of 14
Decision

Section 455 of R.A. No. 7160 provides for the powers of the city
mayor, one of which is:

(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;

Reaped from the foregoing, it is clear that the city mayor can
enter into contracts and obligations when clothed with authority
from the Sanggunian or pursuant to law or ordinance. Emphasis
must be placed on the conjunction “OR” which signify an option or
an alternative. The word "or" is a disjunctive conjunction which, in
the ordinary usage, signifies dissociation and independence of one
thing from each of the other things mentioned.26 Hence, the city
mayor may either be authorized by the Sanggunian, with no specific
requirement as to how the authority will be granted, or if not,
through a law or ordinance. Observance of any one of the two (2)
options is already considered a compliance with the requirement
provided in the law. Indeed, even based on R.A. No. 7160 or the
Local Government Code, the city mayor may represent the city to
enter into contracts even if clothed only with authority from the
Sanggunian, in this case, the SP Resolution No. 13-0418-2014. There is
thus no conflict between R.A. No. 7160 and the foregoing resolution.
Accordingly, no justiciable controversy prevails in this case thereby
warranting its outright dismissal.

Besides, the petitioner-appellant had no cause of action against

herein respondents-appellees.

A cause of action is an act or an omission of one party in

violation of the legal right or rights of another, causing injury to the
latter. The failure of a complaint to state a cause of action is a ground
for its outright dismissal.27 However, in special civil actions for
declaratory relief, the concept of a cause of action under ordinary

26
Kataniag vs. People, G.R. No. L-48398, November 28, 1942.
27
Supra note 25.
CA-GR CV NO. 06568 Page 12 of 14
Decision

civil actions does not strictly apply. The reason for this exception is
that an action for declaratory relief presupposes that there has been
no actual breach of the instruments involved or of rights arising
thereunder. Nevertheless, a breach or violation should be impending,
imminent or at least threatened.28

In the present case, there is nowhere in the petitioner-

appellant's petition that he asserted any personal legal right which he
seeks to protect. His sole allegation in this regard is:

“30. That defendant Sanggunian is about to

appropriate or spend the money that Cebu City
had received pursuant to the sale where it ought
to be held in trust, being the proceeds of an
invalid act. It is in the process of approving a
supplemental budget which identified the
proceeds of the sale as the funding source.

xxx xxx xxx

33. That in the event that said money be

appropriated and spent, then the City of Cebu
would not be able to fulfill its obligation to
return the payment received as a consequence of
the annulment of the sale. This would put Cebu
City in debt, if not in more debt, which would
result in the difficulty of delivering basic services
to its residents, including the petitioner. In sum,
petitioner, together with the other residents of
Cebu City, will suffer a grave and irreparable
injury that is not susceptible to mathematical
ascertainment.”

In his allegations, the petitioner-appellant plainly asserted that

with the sale of the SRP lots without valid bases, the basic services
that he, along with all the other residents of Cebu City, would be
provided by the City Government of Cebu, will be greatly affected as
the city would be drowned in debt. This is a general statement which

28
Id.
CA-GR CV NO. 06568 Page 13 of 14
Decision

is not sufficient to constitute a legal right or interest. Not only is the

presumed interest not personal in character, it is likewise too vague,
highly speculative and uncertain. The Rules require that the interest
must be material to the issue and affected by the questioned act or
instrument, as distinguished from simple curiosity or incidental
interest in the question raised.29 Such material interest is manifestly
absent in the petitioner-appellant's petition.

Lastly, the interests of the conflicting parties in this case are not
adverse, and the party seeking relief, the herein petitioner-appellant,
has no legal interest in the case.

Legal standing or locus standi is a party’s personal and

substantial interest in a case such that he has sustained or will sustain
direct injury as a result of the governmental act being challenged. It
calls for more than just a generalized grievance. The term "interest"
means a material interest, an interest in issue affected by the decree,
as distinguished from mere interest in the question involved, or a
mere incidental interest.30

In this case, petitioner-appellant instituted the action in his

capacity as a citizen and taxpayer. While it is true that a taxpayer
need not be a party to the contract to challenge its validity, 31 it is
nonetheless required that parties suing as taxpayers must specifically
prove sufficient interest in preventing the illegal expenditure of
money raised by taxation. The expenditure of public funds by an
officer of the State for the purpose of executing an unconstitutional
act constitutes a misapplication of such funds. 32 Here, aside from the
petitioner-appellant's failure to specifically point out in his petition
his sufficient and material interest in preventing the use of the money
already paid to the City of Cebu for the purchase of the subject lots,
he likewise fell short in alleging the specific injury to himself as a
result of the enforcement of the questioned resolution and ordinance.

Besides, petitioner-appellant had no reason to question the

validity of the questioned resolution for it was, as discussed above,
valid in the first place.
29
Id., citing Integrated Bar of the Philippines v. Zamora, G.R. No. 141284, August 15, 2000.
30
Jumamil vs. Cafe, et al., G.R. No. 144570, September 21, 2005.
31
See City Council of Cebu City vs. Cuizon, et al., G.R. No. L-28972, October 31, 1972.
32
Id.
CA-GR CV NO. 06568 Page 14 of 14
Decision

All things considered, the Court finds no grave error in the

Trial Court's dismissal of the petitioner-appellant's action for
declaratory relief. Apparently, the elements of such action are
wanting in this case necessitating its dismissal.

WHEREFORE, premises considered, the appeal is DENIED.

The Joint Order dated 18 November 2015 and Order dated 10
December 2015 of the Regional Trial Court, Branch 9 of Cebu City are
hereby AFFIRMED. The parties' Joint Omnibus Motion for
Reconsideration of this Court's Resolution dated 13 December 2018 is
likewise DENIED for lack of merit.

SO ORDERED.

ORIGINAL SIGNED
DOROTHY P. MONTEJO-GONZAGA
Associate Justice

WE CONCUR:

ORIGINAL SIGNED ORIGINAL SIGNED

EDGARDO L. DELOS SANTOS MARILYN B. LAGURA-YAP
Associate Justice Associate Justice

CERTIFICATION

Pursuant to Article VIII, Section 13 of the Constitution, it is

hereby certified that the conclusions in the above decision were
reached in consultation before the case was assigned to the writer of
the opinion of the Court.

ORIGINAL SIGNED
EDGARDO L. DELOS SANTOS
Associate Justice
Chairperson, Eighteenth Division