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Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. L-10405

December 29, 1960

WENCESLAO PASCUAL, in his official capacity as Provincial Governor of Rizal,

petitioner-appellant,
vs.
THE SECRETARY OF PUBLIC WORKS AND COMMUNICATIONS, ET AL., respondentsappellees.

Asst. Fiscal Noli M. Cortes and Jose P. Santos for appellant.

Office of the Asst. Solicitor General Jose G. Bautista and Solicitor A. A. Torres for
appellee.

CONCEPCION, J.:

Appeal, by petitioner Wenceslao Pascual, from a decision of the Court of First

Instance of Rizal, dismissing the above entitled case and dissolving the writ of
preliminary injunction therein issued, without costs.

On August 31, 1954, petitioner Wenceslao Pascual, as Provincial Governor of Rizal,

instituted this action for declaratory relief, with injunction, upon the ground that
Republic Act No. 920, entitled "An Act Appropriating Funds for Public Works",
approved on June 20, 1953, contained, in section 1-C (a) thereof, an item (43[h]) of
P85,000.00 "for the construction, reconstruction, repair, extension and
improvement" of Pasig feeder road terminals (Gen. Roxas Gen. Araneta Gen.
Lucban Gen. Capinpin Gen. Segundo Gen. Delgado Gen. Malvar Gen.
Lim)"; that, at the time of the passage and approval of said Act, the aforementioned
feeder roads were "nothing but projected and planned subdivision roads, not yet
constructed, . . . within the Antonio Subdivision . . . situated at . . . Pasig, Rizal"
(according to the tracings attached to the petition as Annexes A and B, near Shaw
Boulevard, not far away from the intersection between the latter and Highway 54),
which projected feeder roads "do not connect any government property or any
important premises to the main highway"; that the aforementioned Antonio
Subdivision (as well as the lands on which said feeder roads were to be construed)
were private properties of respondent Jose C. Zulueta, who, at the time of the
passage and approval of said Act, was a member of the Senate of the Philippines;
that on May, 1953, respondent Zulueta, addressed a letter to the Municipal Council
of Pasig, Rizal, offering to donate said projected feeder roads to the municipality of
Pasig, Rizal; that, on June 13, 1953, the offer was accepted by the council, subject to
the condition "that the donor would submit a plan of the said roads and agree to
change the names of two of them"; that no deed of donation in favor of the
municipality of Pasig was, however, executed; that on July 10, 1953, respondent
Zulueta wrote another letter to said council, calling attention to the approval of
Republic Act. No. 920, and the sum of P85,000.00 appropriated therein for the
construction of the projected feeder roads in question; that the municipal council of
Pasig endorsed said letter of respondent Zulueta to the District Engineer of Rizal,
who, up to the present "has not made any endorsement thereon" that inasmuch as
the projected feeder roads in question were private property at the time of the
passage and approval of Republic Act No. 920, the appropriation of P85,000.00
therein made, for the construction, reconstruction, repair, extension and
improvement of said projected feeder roads, was illegal and, therefore, void ab
initio"; that said appropriation of P85,000.00 was made by Congress because its
members were made to believe that the projected feeder roads in question were
"public roads and not private streets of a private subdivision"'; that, "in order to give
a semblance of legality, when there is absolutely none, to the aforementioned
appropriation", respondents Zulueta executed on December 12, 1953, while he was

a member of the Senate of the Philippines, an alleged deed of donation copy of

which is annexed to the petition of the four (4) parcels of land constituting said
projected feeder roads, in favor of the Government of the Republic of the
Philippines; that said alleged deed of donation was, on the same date, accepted by
the then Executive Secretary; that being subject to an onerous condition, said
donation partook of the nature of a contract; that, such, said donation violated the
provision of our fundamental law prohibiting members of Congress from being
directly or indirectly financially interested in any contract with the Government, and,
hence, is unconstitutional, as well as null and void ab initio, for the construction of
the projected feeder roads in question with public funds would greatly enhance or
increase the value of the aforementioned subdivision of respondent Zulueta, "aside
from relieving him from the burden of constructing his subdivision streets or roads
at his own expense"; that the construction of said projected feeder roads was then
being undertaken by the Bureau of Public Highways; and that, unless restrained by
the court, the respondents would continue to execute, comply with, follow and
implement the aforementioned illegal provision of law, "to the irreparable damage,
detriment and prejudice not only to the petitioner but to the Filipino nation."

Petitioner prayed, therefore, that the contested item of Republic Act No. 920 be
declared null and void; that the alleged deed of donation of the feeder roads in
question be "declared unconstitutional and, therefor, illegal"; that a writ of
injunction be issued enjoining the Secretary of Public Works and Communications,
the Director of the Bureau of Public Works and Highways and Jose C. Zulueta from
ordering or allowing the continuance of the above-mentioned feeder roads project,
and from making and securing any new and further releases on the aforementioned
item of Republic Act No. 920, and the disbursing officers of the Department of Public
Works and Highways from making any further payments out of said funds provided
for in Republic Act No. 920; and that pending final hearing on the merits, a writ of
preliminary injunction be issued enjoining the aforementioned parties respondent
from making and securing any new and further releases on the aforesaid item of
Republic Act No. 920 and from making any further payments out of said illegally
appropriated funds.

Respondents moved to dismiss the petition upon the ground that petitioner had "no
legal capacity to sue", and that the petition did "not state a cause of action". In
support to this motion, respondent Zulueta alleged that the Provincial Fiscal of Rizal,
not its provincial governor, should represent the Province of Rizal, pursuant to
section 1683 of the Revised Administrative Code; that said respondent is " not
aware of any law which makes illegal the appropriation of public funds for the
improvements of . . . private property"; and that, the constitutional provision
invoked by petitioner is inapplicable to the donation in question, the same being a

pure act of liberality, not a contract. The other respondents, in turn, maintained that
petitioner could not assail the appropriation in question because "there is no actual
bona fide case . . . in which the validity of Republic Act No. 920 is necessarily
involved" and petitioner "has not shown that he has a personal and substantial
interest" in said Act "and that its enforcement has caused or will cause him a direct
injury."

Acting upon said motions to dismiss, the lower court rendered the aforementioned
decision, dated October 29, 1953, holding that, since public interest is involved in
this case, the Provincial Governor of Rizal and the provincial fiscal thereof who
represents him therein, "have the requisite personalities" to question the
constitutionality of the disputed item of Republic Act No. 920; that "the legislature is
without power appropriate public revenues for anything but a public purpose", that
the instructions and improvement of the feeder roads in question, if such roads
where private property, would not be a public purpose; that, being subject to the
following condition:

The within donation is hereby made upon the condition that the Government of the
Republic of the Philippines will use the parcels of land hereby donated for street
purposes only and for no other purposes whatsoever; it being expressly understood
that should the Government of the Republic of the Philippines violate the condition
hereby imposed upon it, the title to the land hereby donated shall, upon such
violation, ipso facto revert to the DONOR, JOSE C. ZULUETA. (Emphasis supplied.)

which is onerous, the donation in question is a contract; that said donation or

contract is "absolutely forbidden by the Constitution" and consequently "illegal", for
Article 1409 of the Civil Code of the Philippines, declares in existence and void from
the very beginning contracts "whose cause, objector purpose is contrary to law,
morals . . . or public policy"; that the legality of said donation may not be contested,
however, by petitioner herein, because his "interest are not directly affected"
thereby; and that, accordingly, the appropriation in question "should be upheld" and
the case dismissed.

At the outset, it should be noted that we are concerned with a decision granting the
aforementioned motions to dismiss, which as much, are deemed to have admitted
hypothetically the allegations of fact made in the petition of appellant herein.
According to said petition, respondent Zulueta is the owner of several parcels of
residential land situated in Pasig, Rizal, and known as the Antonio Subdivision,

certain portions of which had been reserved for the projected feeder roads
aforementioned, which, admittedly, were private property of said respondent when
Republic Act No. 920, appropriating P85,000.00 for the "construction,
reconstruction, repair, extension and improvement" of said roads, was passed by
Congress, as well as when it was approved by the President on June 20, 1953. The
petition further alleges that the construction of said roads, to be undertaken with
the aforementioned appropriation of P85,000.00, would have the effect of relieving
respondent Zulueta of the burden of constructing his subdivision streets or roads at
his own expenses, 1and would "greatly enhance or increase the value of the
subdivision" of said respondent. The lower court held that under these
circumstances, the appropriation in question was "clearly for a private, not a public
purpose."

Respondents do not deny the accuracy of this conclusion, which is self-evident.

2However, respondent Zulueta contended, in his motion to dismiss that:

A law passed by Congress and approved by the President can never be illegal
because Congress is the source of all laws . . . Aside from the fact that movant is not
aware of any law which makes illegal the appropriation of public funds for the
improvement of what we, in the meantime, may assume as private property . . .
(Record on Appeal, p. 33.)

The first proposition must be rejected most emphatically, it being inconsistent with
the nature of the Government established under the Constitution of the Republic of
the Philippines and the system of checks and balances underlying our political
structure. Moreover, it is refuted by the decisions of this Court invalidating
legislative enactments deemed violative of the Constitution or organic laws. 3

As regards the legal feasibility of appropriating public funds for a public purpose,
the principle according to Ruling Case Law, is this:

It is a general rule that the legislature is without power to appropriate public

revenue for anything but a public purpose. . . . It is the essential character of the
direct object of the expenditure which must determine its validity as justifying a tax,
and not the magnitude of the interest to be affected nor the degree to which the
general advantage of the community, and thus the public welfare, may be
ultimately benefited by their promotion. Incidental to the public or to the state,

which results from the promotion of private interest and the prosperity of private
enterprises or business, does not justify their aid by the use public money. (25 R.L.C.
pp. 398-400; Emphasis supplied.)

The rule is set forth in Corpus Juris Secundum in the following language:

In accordance with the rule that the taxing power must be exercised for public
purposes only, discussed supra sec. 14, money raised by taxation can be expended
only for public purposes and not for the advantage of private individuals. (85 C.J.S.
pp. 645-646; emphasis supplied.)

Explaining the reason underlying said rule, Corpus Juris Secundum states:

Generally, under the express or implied provisions of the constitution, public funds
may be used only for public purpose. The right of the legislature to appropriate
funds is correlative with its right to tax, and, under constitutional provisions against
taxation except for public purposes and prohibiting the collection of a tax for one
purpose and the devotion thereof to another purpose, no appropriation of state
funds can be made for other than for a public purpose.

The test of the constitutionality of a statute requiring the use of public funds is
whether the statute is designed to promote the public interest, as opposed to the
furtherance of the advantage of individuals, although each advantage to individuals
might incidentally serve the public. (81 C.J.S. pp. 1147; emphasis supplied.)

Needless to say, this Court is fully in accord with the foregoing views which, apart
from being patently sound, are a necessary corollary to our democratic system of
government, which, as such, exists primarily for the promotion of the general
welfare. Besides, reflecting as they do, the established jurisprudence in the United
States, after whose constitutional system ours has been patterned, said views and
jurisprudence are, likewise, part and parcel of our own constitutional law.lawphil.net

This notwithstanding, the lower court felt constrained to uphold the appropriation in
question, upon the ground that petitioner may not contest the legality of the
donation above referred to because the same does not affect him directly. This
conclusion is, presumably, based upon the following premises, namely: (1) that, if
valid, said donation cured the constitutional infirmity of the aforementioned
appropriation; (2) that the latter may not be annulled without a previous declaration
of unconstitutionality of the said donation; and (3) that the rule set forth in Article
1421 of the Civil Code is absolute, and admits of no exception. We do not agree with
these premises.

The validity of a statute depends upon the powers of Congress at the time of its
passage or approval, not upon events occurring, or acts performed, subsequently
thereto, unless the latter consists of an amendment of the organic law, removing,
with retrospective operation, the constitutional limitation infringed by said statute.
Referring to the P85,000.00 appropriation for the projected feeder roads in question,
the legality thereof depended upon whether said roads were public or private
property when the bill, which, latter on, became Republic Act 920, was passed by
Congress, or, when said bill was approved by the President and the disbursement of
said sum became effective, or on June 20, 1953 (see section 13 of said Act).
Inasmuch as the land on which the projected feeder roads were to be constructed
belonged then to respondent Zulueta, the result is that said appropriation sought a
private purpose, and hence, was null and void. 4 The donation to the Government,
over five (5) months after the approval and effectivity of said Act, made, according
to the petition, for the purpose of giving a "semblance of legality", or legalizing, the
appropriation in question, did not cure its aforementioned basic defect.
Consequently, a judicial nullification of said donation need not precede the
declaration of unconstitutionality of said appropriation.

Again, Article 1421 of our Civil Code, like many other statutory enactments, is
subject to exceptions. For instance, the creditors of a party to an illegal contract
may, under the conditions set forth in Article 1177 of said Code, exercise the rights
and actions of the latter, except only those which are inherent in his person,
including therefore, his right to the annulment of said contract, even though such
creditors are not affected by the same, except indirectly, in the manner indicated in
said legal provision.

Again, it is well-stated that the validity of a statute may be contested only by one
who will sustain a direct injury in consequence of its enforcement. Yet, there are
many decisions nullifying, at the instance of taxpayers, laws providing for the
disbursement of public funds, 5upon the theory that "the expenditure of public

funds by an officer of the State for the purpose of administering an unconstitutional

act constitutes a misapplication of such funds," which may be enjoined at the
request of a taxpayer. 6Although there are some decisions to the contrary, 7the
prevailing view in the United States is stated in the American Jurisprudence as
follows:

In the determination of the degree of interest essential to give the requisite

standing to attack the constitutionality of a statute, the general rule is that not only
persons individually affected, but also taxpayers, have sufficient interest in
preventing the illegal expenditure of moneys raised by taxation and may therefore
question the constitutionality of statutes requiring expenditure of public moneys.
(11 Am. Jur. 761; emphasis supplied.)

However, this view was not favored by the Supreme Court of the U.S. in
Frothingham vs. Mellon (262 U.S. 447), insofar as federal laws are concerned, upon
the ground that the relationship of a taxpayer of the U.S. to its Federal Government
is different from that of a taxpayer of a municipal corporation to its government.
Indeed, under the composite system of government existing in the U.S., the states
of the Union are integral part of the Federation from an international viewpoint, but,
each state enjoys internally a substantial measure of sovereignty, subject to the
limitations imposed by the Federal Constitution. In fact, the same was made by
representatives of each state of the Union, not of the people of the U.S., except
insofar as the former represented the people of the respective States, and the
people of each State has, independently of that of the others, ratified said
Constitution. In other words, the Federal Constitution and the Federal statutes have
become binding upon the people of the U.S. in consequence of an act of, and, in this
sense, through the respective states of the Union of which they are citizens. The
peculiar nature of the relation between said people and the Federal Government of
the U.S. is reflected in the election of its President, who is chosen directly, not by
the people of the U.S., but by electors chosen by each State, in such manner as the
legislature thereof may direct (Article II, section 2, of the Federal
Constitution).lawphi1.net

The relation between the people of the Philippines and its taxpayers, on the other
hand, and the Republic of the Philippines, on the other, is not identical to that
obtaining between the people and taxpayers of the U.S. and its Federal
Government. It is closer, from a domestic viewpoint, to that existing between the
people and taxpayers of each state and the government thereof, except that the
authority of the Republic of the Philippines over the people of the Philippines is more
fully direct than that of the states of the Union, insofar as the simple and unitary

type of our national government is not subject to limitations analogous to those

imposed by the Federal Constitution upon the states of the Union, and those
imposed upon the Federal Government in the interest of the Union. For this reason,
the rule recognizing the right of taxpayers to assail the constitutionality of a
legislation appropriating local or state public funds which has been upheld by the
Federal Supreme Court (Crampton vs. Zabriskie, 101 U.S. 601) has greater
application in the Philippines than that adopted with respect to acts of Congress of
the United States appropriating federal funds.

Indeed, in the Province of Tayabas vs. Perez (56 Phil., 257), involving the
expropriation of a land by the Province of Tayabas, two (2) taxpayers thereof were
allowed to intervene for the purpose of contesting the price being paid to the owner
thereof, as unduly exorbitant. It is true that in Custodio vs. President of the Senate
(42 Off. Gaz., 1243), a taxpayer and employee of the Government was not
permitted to question the constitutionality of an appropriation for backpay of
members of Congress. However, in Rodriguez vs. Treasurer of the Philippines and
Barredo vs. Commission on Elections (84 Phil., 368; 45 Off. Gaz., 4411), we
entertained the action of taxpayers impugning the validity of certain appropriations
of public funds, and invalidated the same. Moreover, the reason that impelled this
Court to take such position in said two (2) cases the importance of the issues
therein raised is present in the case at bar. Again, like the petitioners in the
Rodriguez and Barredo cases, petitioner herein is not merely a taxpayer. The
Province of Rizal, which he represents officially as its Provincial Governor, is our
most populated political subdivision, 8and, the taxpayers therein bear a substantial
portion of the burden of taxation, in the Philippines.

Hence, it is our considered opinion that the circumstances surrounding this case
sufficiently justify petitioners action in contesting the appropriation and donation in
question; that this action should not have been dismissed by the lower court; and
that the writ of preliminary injunction should have been maintained.

Wherefore, the decision appealed from is hereby reversed, and the records are
remanded to the lower court for further proceedings not inconsistent with this
decision, with the costs of this instance against respondent Jose C. Zulueta. It is so
ordered.

Paras, C.J., Bengzon, Padilla, Bautista Angelo, Labrador, Reyes, J.B.L., Barrera,
Gutierrez David, Paredes, and Dizon, JJ., concur.

Footnotes

1
For, pursuant to section 19(h) of the existing rules and regulation of the
Urban Planning Commission, the owner of a subdivision is under obligation "to
improve, repair and maintain all streets, highways and other ways in his subdivision
until their dedication to public use is accepted by the government."

2
Ex parte Bagwell, 79 P. 2d. 395; Road District No. 4 Shelby County vs. Allred.
68 S.W 2d 164; State ex rel. Thomson vs. Giessel, 53-N.W. 2d. 726, Attorney General
vs. City of Eau Claire, 37 Wis. 400; State ex rel. Smith vs. Annuity Pension Board,
241 Wis. 625, 6 N.W. 2d. 676; State vs. Smith, 293 N.W. 161; State vs. Dammann
280 N.W. 698; Sjostrum vs. State Highway Commission 228 P. 2d. 238; Hutton vs.
Webb, 126 N.C. 897, 36 S.E. 341; Michigan Sugar Co. vs. Auditor General, 124 Mich.
674, 83 N.W. 625; Oxnard Beet Sugar Co. vs. State, 105 N.W. 716.

3
Casanovas vs. Hord. 8 Phil., McGirr vs. Hamilton, 30 Phil., 563; Compania
General de Tabacos vs. Board of Public Utility, 34 Phil., 136; Central Capiz vs.
Ramirez, 40 Phil., 883; Concepcion vs. Paredes, 42 Phil., 599; U.S. vs. Ang Tang Ho,
43 Phil., 6; McDaniel vs. Apacible, 44 Phil., 248; People vs. Pomar, 46 Phil., 440;
Agcaoili vs. Suguitan, 48 Phil., 676; Government of P.I. vs. Springer, 50 Phil., 259;
Manila Electric Co. vs. Pasay Transp. Co., 57 Phil., 600; People vs. Linsangan, 62
Phil., 464; People and Hongkong & Shanghai Banking Corp. vs. Jose O. Vera, 65 Phil.,
56; People vs. Carlos, 78 Phil., 535; 44 Off. Gaz. 428; In re Cunanan, 94 Phil., 534;
50 Off. Gaz., 1602; City of Baguio vs. Nawasa, 106 Phil., 144; City of Cebu vs.
Nawasa, 107 Phil., 1112; Rutter vs. Esteban, 93 Phil., 68; Off. Gaz., [5]1807.

4
In the language of the Supreme Court of Nebraska, "An unconstitutional
statute is a legal still birth, which neither moves, nor breathes, nor holds out any
sign of life. It is a form without one vital spark. It is wholly dead from the time of
conception, and, no right, either legal or equitable, arises from such inanimate
thing." (Oxnard Beet Sugar Co. vs. State, 102 N.W. 80.).

5
See, among others, Livermore, vs. Waite, 102 Cal. 113, 25 L.R.A. 312,36 P.
424; Crawford vs. Gilchrist, 64 Fla. 41, 59 So. 963; Lucas vs. American Hawaiian
Engineering and Constr. Co., 16 Haw. 80; Castle vs. Capena, 5 Haw. 27; Littler vs.
Jayne, 124 Ill. 123, 16 N.E. 374; Burke vs. Snively, 208 I11. 328, 70 N.E. 372;
Ellingham vs. Dye, 178 Ind. 336, 99 N.E. 1; Christmas vs. Warfield, 105 Md. 536;
Sears vs. Steel, 55 Or. 544, 107 Pac. 3; State ex rel. Taylor vs. Pennover, 26 Or. 205,
37 Pac. 906; Carman vs. Woodruf, 10 Or. 123; MacKinley vs. Watson, 145 Pac. 266;
Sears vs. James, 47 Or. 50, 82 Pac. 14; Mott vs. Pennsylvania R. Co., 30 Pa. 9, 72
Am. Dec. 664; Bradly vs. Power County, 37 Am. Dec. 563; Frost vs. Thomas, 26 Colo.
227, 77 Am. St. Rep. 259, 56 Pac. 899; Martin vs. Ingham, 38 Kan. 641, 17 Pac. 162;
Martin vs. Lacy, 39 Kan. 703, 18 Pac. 951; Smith vs. Maguerich, 44 Ga. 163;
Giddings vs. Blacker, 93 Mich. 1, 16 L.R.A. 402, 52 N.W. 944; Rippe vs. Becker, 56
Minn. 100, 57 N.W. 331; Auditor vs. Treasurer, 4 S.C. 311; McCullough vs. Brown, 31
S.C. 220, 19 S.E. 458; State ex rel. Lamb vs. Cummingham, 83 Wis. 90, 53 N.W. 35;
State ex rel. Rosenhian vs. Frear, 138 Wis. 173, 119 N.W. 894.

6
Rubs vs. Thompson, 56 N.E. 2d. 761; Reid vs. Smith, 375 Ill. 147, 30N. E. 2d.
908; Fergus vs. Russel, 270 Ill. 304, 110 N.E. 130; Burke vs. Snively, 208 Ill. 328;
Jones vs. Connell, 266 Ill. 443, 107 N.E. 731; Dudick vs. Baumann, 349 [PEPSI] Ill.
46, 181 N.E. 690.

7
Thompson vs. Canal Fund Comps., 2 Abb. Pr. 248; Shieffelin vs. Komfort, 212
N.Y. 520, 106 N.E. 675; Hutchison vs. Skinmer, 21 Misc. 729, 49N. Y. Supp. 360; Long
vs. Johnson, 70 Misc. 308; 127 N.Y. Supp. 756; Whiteback vs. Hooker, 73 Misc. 573,
133 N.Y. Supp. 534; State ex rel. Cranmer vs. Thorson, 9 S.D. 149, 68 N.W. 202;
Davenport vs. Elrod, 20 S.D. 567, 107 N.W. 833; Indiana Jones vs. Reed, 3 Wash. 57,
27 Pac. 1067; Birmingham vs. Cheetham, 19 Wash. 657, 54 Pac. 37; Tacoma vs.
Bridges, 25 Wash. 221, 65 Pac. 186; Hilger vs. State, 63 Wash. 457, 116 Pac. 19.

It has 1,463,530 inhabitants.

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