Davao City Water District vs. Civil Service Commission

Title: DAVAO CITY WATER DISTRICT vs. CIVIL SERVICE COMMISSION Citation: 201 SCRA 5! "#.R. No. 52!$%!&' Se(te)*e+ 1!' 11, -onente: MEDIALDEA FACTS: Petitioners are among the more than five hundred (500) water districts existing throughout the country formed

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 ursuant to the rovisions of -D No. 1&! as amen amende ded d "y P#s$ P#s$ %&' %&' and and %* %*!! othe otherw rwis isee +now +nown n as the the -+ovin/ial Wate+ tilities A/t o 1$! , which was issued "y then President Ferdinand -$ .arcos "y virtue of his /egis/ative ower$ t authori1ed the different /oca/ /egis/ative "odies to form and create their resective water districts through a reso/ution they wi// ass su"2ect to the guide/ines! ru/es and regu/ations therein /aid down$ The decree decree further created created and formed the Lo/al Wate+ tilities A)inist+ation 3LWA4 ! a nationa/ agency attached to the 3ationa/ -conomic and #eve/oment Authority (3-#A)! and granted with regu/atory ower necessary to otimi1e u"/ic service from water uti/ities oerations$ The resondents! on the other hand! are the Civi/ Service Commission (CSC) and the Commission on Audit

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(C4A)! "oth government agencies and reresented in this case "y the So/icitor enera/$ There exists exists a divergenc divergencee of oinions oinions "etween "etween C4A on one hand! and the (678A)! on the other other hand! with

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resect to the authority of C4A to audit the different water districts$ C4A oined that the audit of the water districts is sim/y an act of discharging the visitoria/ ower vested in them

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 "y /aw $ 4n the other hand! 678A maintained that on/y those water districts with su"sidies from the government fa//

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within the C4A9s 2urisdiction and on/y to the extent of the amount of such su"sidies! ursuant to the rovision of the overnment Auditing Code of the Phi/s$ Petitioners9 main argument is that they are rivate cororations without without origina/ charter! hence they are outside the

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 2urisdiction of resondents resondents CSC and C4A$

SS8-: 7hether or not the 6oca/ 7ater #istricts formed and created ursuant to the rovisions of Presidentia/ #ecree 3o$ *'! as amended! are governmentowned or contro//ed cororations with origina/ charter fa//ing under the Civi/ Service 6aw and;or covered "y the visitoria/ ower of the Commission on Audit

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After a fair consideration of the arties9 arguments cou/ed with a carefu/ study of the a/ica"/e /aws as we// as the constitutiona/ rovisions invo/ved! We +le a6ainst t7e (etitione+s an +eite+ate O+ +lin6 in Tan8a9 /ase e/la+in6 ate+ ist+i/ts 6ove+n)ent%one o+ /ont+olle /o+(o+ations it7 o+i6inal /7a+te+$

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Ascertained from a consideration of the who/e statute! -D 1& is a s(e/ial la a((li/a*le onl9 to t7e ie+ent ate+ ist+i/ts /+eate (+sant t7e+eto. n a// its essentia/ terms! it is o"vious that it ertains to a secia/  urose which is intended to meet a articu/ar set of conditions and circumstances$ The fact that said decree genera//y a/ies to a// water districts throughout the country does not change the fact that P# *' is a secia/ /aw$

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=y >governmentowned or contro//ed cororation with origina/ charter!> 7e mean government owned or contro//ed cororation created "y a secia/ /aw and not under the Cororation Code of the Phi/iines$

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 3o consideration may thus "e given to etitioners9 contention that the oerative act which created the water districts are the reso/utions of the resective /oca/ sanggunians and that conse?uent/y! P# *'! as amended! cannot "e considered as their charter$

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t is to "e noted that P# *'! as amended is the source of authori1ation and ower to form and maintain a district$

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It is /lea+ t7at 7at 7as *een e;/le +o) t7e /ove+a6e o t7e CSC a+e t7ose /o+(o+ations /+eate (+sant to t7e Co+(o+ation Coe. Si6nii/antl9' (etitione+s a+e not /+eate ne+ t7e sai /oe' *t on t7e /ont+a+9' t7e9 e+e /+eate (+sant to a s(e/ial la an a+e 6ove+ne (+i)a+il9 *9 its (+ovision.

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t is c/ear therefrom that the ower to aoint the mem"ers who wi// comrise the =oard of #irectors "e/ongs to the /oca/ executives of the /oca/ su"division units where such districts are /ocated$ n contrast! the mem"ers of the =oard of #irectors or trustees of a rivate cororation are e/ected from among the mem"ers and stoc+ho/ders thereof$ t wou/d not "e amiss to emhasi1e at this oint that a rivate cororation is created for the rivate  urose! "enefit! aim and end of its mem"ers or stoc+ho/ders$ 3ecessari/y! said mem"ers or stoc+ho/ders shou/d  "e given a free hand to choose those who wi// comose the governing "ody of their cororation$ =ut this is not the case here and this c/ear/y indicates that etitioners are definite/y not rivate cororations$

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T7e o+e6oin6 is<isition notit7stanin6' We a+e' 7oeve+' not naa+e o t7e se+ios +e(e+/ssion t7is )a9 *+in6 to t7e t7osans o ate+ ist+i/ts= e)(lo9ees t7+o67ot t7e /ont+9 7o stan to *e ae/te *e/ase t7e9 o not 7ave t7e ne/essa+9 /ivil se+vi/e eli6i*ilities. As t7ese e)(lo9ees a+e e<all9 (+ote/te *9 t7e /onstittional 6a+antee to se/+it9 o ten+e' We in it ne/essa+9 to +le o+ t7e (+ote/tion o s/7 +i67t 7i/7 /annot *e i)(ai+e *9 a s*se<ent +lin6 o t7is Co+t. T7s' t7ose e)(lo9ees 7o 7ave al+ea9 a/<i+e t7ei+ (e+)anent e)(lo9)ent stats at t7e ti)e o t7e (+o)l6ation o t7is e/ision /annot *e +e)ove *9 t7e )e+e +eason t7at t7e9 la/> t7e ne/essa+9 /ivil se+vi/e eli6i*ilities.

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ACC4@#36! etitioners are dec/ared >governmentowned or contro//ed cororations with origina/ charter> which fa// under the 2urisdiction of the u"/ic resondents CSC and C4A$