HON. MICHAEL L. RAMA ET AL v. HON. GILBERT P.

MOISES ET AL
G.R. No. 197146, December 06, 2016, BERSAMIN, J.

FACTS:

On May 25, 1973, President Ferdinand E. Marcos issued Presidential Decree No. 198
(Provincial Water Utilities Act of 1973). By virtue of which, Cebu City formed the Metro
Cebu Water District (MCWD) in 1974. Thereafter, the Cities of Mandaue, Lapu-Lapu and
Talisay, and the Municipalities of Liloan, Compostela, Consolacion, and Cordova turned
over their waterworks systems and services to the MCWD. From 1974 to 2002, the Cebu
City Mayor appointed all the members of the MCWD Board of Directors in accordance
with Section 3 (b) of P. D. No. 198.

In July 2002, Cebu Provincial Governor Pablo L. Garcia wrote to the MCWD to assert his
authority and intention to appoint the members of the MCWD Board of Directors.' He
stated in his letter that since 1996, the active water service connections in Cebu City had
been below 75% of the total active water service connection of the MCWD; that no other
city or municipality under the MCWD had reached the required percentage of 75%; and
that, accordingly, he, as the Provincial Governor of Cebu, was the appointing authority
for the members of the MCWD Board of Directors pursuant to Section 3 (b) of P. D. No.
198.

Later on, the MCWD commenced in the RTC in Cebu City its action for declaratory relief
seeking to declare Section 3(b) of P.D. No. 198 unconstitutional; or, should the provision
be declared valid, it should be interpreted to mean that the authority to appoint the
members of the MCWD Board of Directors belonged solely to the Cebu City Mayor. The
RTC (Branch 7) dismissed the action for declaratory relief.

Governor Garcia commenced an action for declaratory relief to seek the interpretation of
Section 3 (b) of P.D. No. 198 on the proper appointing authority for the members of the
MCWD Board of Directors.

On February 22, 2008, however, Mayor Osmeña appointed Yu as a member of the

MCWD Board of Directors.7 Accordingly, on May 20, 2008, the RTC dismissed the action
for declaratory relief on the ground that declaratory relief became improper once there
was a breach or violation of the provision.

On June 13, 2008, Governor Garcia filed a complaint to declare the nullity of the
appointment of Yu as a member of the MCWD Board of Directors, alleging that the
appointment by Mayor Osmena was illegal; that under Section 3(b) of P.D. No. 198, it
was she as the Provincial Governor of Cebu who was vested with the authority to
appoint members of the MCWD Board of Directors because the total active water service
connections of Cebu City and of the other cities and municipalities were below 75% of
the total water service connections in the area of the MCWD.

On November 16, 2010, the RTC rendered the assailed judgment declaring the
appointment of Yu as illegal and void and ruled that the court has not been able to find
any constitutional infirmity in the questioned provision (Sec. 3) of Presidential Decree
No. 198.

Mayor Osmeña and Yu jointly moved for reconsideration, but the RTC denied their
motion. Hence, the petitioners have instituted this special civil action for certiorari.

Issues:

1. Whether Yu's expiration of term renders case moot and academic.

2. Whether Section 3(b) of P.D. No. 198 was void on its face for violating the
constitutional provision on local autonomy and independence of HUCs under Article X of
the 1987 Constitution.
3. Whether Section 3(b) of P.D. 198 is unconstitutional for violating the Due Process
Clause and the Equal Protection Clause.

Held:

1. Yu's expiration of term did not render case moot and academic. We note that
respondent Yu's term as a member of the MCWD Board of Directors expired on
December 31, 2012. However, this fact does not justify the dismissal of the petition on
the ground of its being rendered moot and academic. The case should still be decided,
despite the intervening developments that could have rendered the case moot and
academic, because public interest is involved, and because the issue is capable of
repetition yet evading review.

For sure, the appointment by the proper official of the individuals to manage the system
of water distribution and service for the consumers residing in the concerned cities and
municipalities involves the interest of their populations and the general public affected
by the services of the MCWD as a public utility. Moreover, the question on the proper
appointing authority for the members of the MCWD Board of Directors should none of
the cities and municipalities have at least 75% of the water consumers will not be
definitively resolved with finality if we dismiss the petition on the ground of mootness.

2. Section 3(b) of P.D. 198 is already superseded. The Court opines that Section 3(b) of
P.D. No. 198 should be partially struck down for being repugnant to the local autonomy
granted by the 1987 Constitution to LGUs, and for being inconsistent with R.A. No. 7160
(1991 Local Government Code) and related laws on local governments.
Hence, all matters relating to its administration, powers and functions were exercised
through its local executives led by the City Mayor, subject to the President's retained
power of general supervision over provinces, HUCs, and independent component cities
pursuant to and in accordance with Section 252 of the 1991 Local Government Code, a
law enacted for the purpose of strengthening the autonomy of the LGUs in accordance
with the 1987 Constitution.

Article X of the 1987 Constitution guarantees and promotes the administrative and fiscal
autonomy of the LGUs. The foregoing statutory enactments enunciate and implement
the local autonomy provisions explicitly recognized under the 1987 Constitution. To
conform with the guarantees of the Constitution in favor of the autonomy of the LGUs,
therefore, it becomes the duty of the Court to declare and pronounce Section 3(b) of P.D.
No. 198 as already partially unconstitutional.

3. Section 3(b) of P.D. 198 is unconstitutional for violating the Due Process Clause and
the Equal Protection Clause. We opine that although Section 3(b) of P.D. No. 198
provided for substantial distinction and was germane to the purpose of P.D. No. 198
when it was enacted in 1973, the intervening reclassification of the City of Cebu into an
HUC and the subsequent enactment of the 1991 Local Government Code rendered the
continued application of Section 3(b) in disregard of the reclassification unreasonable
and unfair. Clearly, the assailed provision no longer provided for substantial distinction
because, firstly, it ignored that the MCWD was built without the participation of the
provincial government; secondly, it failed to consider that the MCWD existed to serve
the community that represents the needs of the majority of the active water service
connections; and, thirdly, the main objective of the decree was to improve the water
service while keeping up with the needs of the growing population.

Hence, we deem it to be inconsistent with the true. objectives of the decree to still leave
to the provincial governor the appointing authority if the provincial governor had
administrative supervision only over municipalities and component cities accounting for
16.92% of the active water service connection in the MCWD. In comparison, the City of
Cebu had 61.28% of the active service water connections; Mandaue, another HUC, 16%;
and Lapu Lapu City, another HUC, 6.8%. There is no denying that the MCWD has been
primarily serving the needs of Cebu City. Although it is impermissible to inquire into
why the decree set 75% as the marker for determining the proper appointing authority,
the provision has meanwhile become unfair for ignoring the needs and circumstances of
Cebu City as the LGU accounting for the majority of the active water service connections,
and whose constituency stood to be the most affected by the decisions made by the
MCWD's Board of Directors. Indeed, the classification has truly ceased to be germane or
related to the main objective for the enactment of P.D. No. 198 in 1973.