LAND BANK OF THE PHILIPPINES v.

CACAYURAN  

                                    [G.R. No. 191667, 17 April 2013] 

FACTS: 

The Municipality of Agoo entered into two loans with Land Bank in order to
finance a Redevelopment Plan of the Agoo Public Plaza. The Sangguniang Bayan
authorized Mayor Eriquel to enter into P4M loan with Land Bank and again for the
amount of P28M to construct a commercial center called Agoo People’s Center. The
Municipality use as collateral a 2,323.75 square meter lot situated at the southern
portion of the Agoo plaza.

The construction of the commercial center of the Agoo plaza was opposed by
Cacayuran and some residents. They claim that highly irregular, violative of the law, and
detrimental to public interest. Cacayuran request for the documents relating to plaza’s
redevelopment.

When Land Bank failed to furnish certified copies of various documents related to
the aforementioned conversion including, among others, the resolutions approving the
Redevelopment Plan as well the loan agreements for the sake of public information and
transparency, Cacayuran file a suit against the implicated officers and Land Bank. 

The Regional Trial Court (RTC) ruled in favor of Cacayuran, declaring the nullity
of the subject Loans, Resolution approving the procurement passed irregularly and
detrimental to public interest.

Petitioner went up to the Court of Appeals. Argued that Cacayuran was not a
party to question the Subject Loan, and the Subject Resolution provided ample authority
for Mayor Eriquel to contract the subject loans.

The court of Appeals found that Vice Mayor Eslao exclude from the personal
liability arising from Subject Loans. Cacayuran has locus to standi to file his complaint
as a resident of municipality, and Resolution approving loan are invalidly passed.

ISSUE:

Whether or not the Court of Appeals was correct in allowing Cacayuran to file
instant suit, and invalidating the Subject Resolution as basis for the Subject Loans.

 
 RULING: 

The Court of Appeals was correct in allowing Cacayuran to stand a sue to

respondent Land Bank, as well as invalidating the Subject Resolution thereon., For the
following reasons: 

Respondent need not to be privy to the Subject Loans in order to proffer his
objections thereto. A taxpayer need not be a party to the contract to challenge its
validity; as long as taxes are involved, people have a right to question contacts entered
into by the government. 

Contrary to the petitioner's assertion, Cacayuran did not have any standing to
contest from the Subject Loans and not from public funds. Cacayuran was not even a
party to any Subject Loans and thus, precluded from questioning the same. 

The SB violated Section 444(b)(1)(vi) of the LGC altogether.The Subject

Resolutions was also tainted with other irregularities, such as (1) the SB's failure to
submit the Subject Resolutions to the Sangguniang Panlalawigan of La Union for its
review contrary to Section 56 of the LGC;[41] and (2) the lack of publication and posting
in contravention of Section 59 of the LGC.[42] 

Said otherwise, the loans and even the Redevelopment Plan itself were not
approved pursuant to any law or ordinance but through mere resolutions. 

Contrary to petitioner's assertion, Land Bank avers that the Subject Resolutions
provided ample authority for Mayor Eriguel to contract the Subject Loans. It posits that
Section 444(b)(1)(vi) of the LGC merely requires that the municipal mayor be authorized
by the SB concerned and that such authorization need not be embodied in an
ordinance.