The Supreme Court’s decision in Aniano A. Albon v. Bayani F. Fernando addresses the crucial issue of whether a local government unit (LGU) can use public funds to improve sidewalks in a privately-owned subdivision. The Court held that such use of funds is unlawful if the subdivision owner has not yet donated the land to the LGU or if the land has not been acquired through expropriation. This case clarifies the limits of LGU power, emphasizing that public funds must be spent for public purposes on publicly-owned properties, not to benefit private entities unless public ownership or benefit is clearly established.

Sidewalk Showdown: Who Pays When Public Good Meets Private Property?

In 1999, the City of Marikina undertook a project to widen and repair sidewalks within Marikina Greenheights Subdivision, citing Ordinance No. 59, s. 1993. Aniano Albon, a taxpayer, challenged this action, arguing that the sidewalks were private property, and thus the city’s use of public funds violated the Constitution and relevant laws. He claimed that using government resources on private property was an unconstitutional application of public funds for private benefit.

The Regional Trial Court initially dismissed Albon’s petition, invoking police power and a previous Supreme Court decision. The Court of Appeals upheld the trial court’s decision, asserting the validity of Ordinance No. 59, s. 1993, and the public nature of the sidewalks. However, the Supreme Court disagreed with the lower courts’ reliance on the 1991 White Plains Association ruling, which had been modified in a later decision. This earlier ruling had been interpreted to mean that all open spaces in subdivisions were automatically vested in the LGU.

The Supreme Court emphasized that LGUs possess police power to enact ordinances for public welfare, as outlined in the Local Government Code (RA 7160). This power allows them to regulate activities to protect the lives, health, and property of their constituents. The Court also acknowledged that LGUs can provide basic services and facilities, including infrastructure, funded by their own resources, according to Section 17 of RA 7160.

However, the Court drew a sharp distinction between public and private property. Citing Presidential Decree (PD) 1216, which amended PD 957, the Court recognized that open spaces, roads, alleys, and sidewalks in residential subdivisions are intended for public use. Yet, ownership remains with the subdivision owner until formally transferred to the government through donation or expropriation. The Court also noted that under subdivision laws, road lots include not just roads but also sidewalks and alleys.

The core of the legal issue revolved around Section 335 of RA 7160, which strictly prohibits the use of public funds for private purposes. The Court reaffirmed the principle that local government funds must be used solely for public purposes. Quoting Pascual v. Secretary of Public Works, the Court emphasized that the validity of public expenditure hinges on the “essential character of the direct object of the expenditure.” Incidental public benefits arising from private enterprise do not justify the use of public money to aid those private interests.

Section 335 of RA 7160 is clear and specific that no public money or property shall be appropriated or applied for private purposes. This is in consonance with the fundamental principle in local fiscal administration that local government funds and monies shall be spent solely for public purposes.

To further underscore the principle, the Supreme Court highlighted a crucial precedent. In the case of Young v. City of Manila, the Court addressed a similar scenario where the City of Manila filled low-lying streets in a privately-owned subdivision. The ruling stipulated that the private owner must reimburse the city for the expenses, as long as they retained title and ownership of the subdivision.

The implementing rules of PD 957, as amended, assign responsibility for maintenance, repair, and improvement of road lots and open spaces to the subdivision owner/developer until donation to the LGU is complete. This responsibility is only relieved upon issuance of a certificate of completion and execution of a deed of donation. This legal framework makes it clear that the LGU’s use of funds to improve privately-owned sidewalks directly contravenes Section 335 of RA 7160.

To resolve the specific facts of the case, the Supreme Court ordered a remand to the Regional Trial Court of Marikina City. The RTC was tasked with determining whether V.V. Soliven, Inc., the subdivision owner, had retained ownership of the open spaces and sidewalks or had already donated them to the City of Marikina. The RTC must also determine whether the public had full and unimpeded access to the roads and sidewalks of Marikina Greenheights Subdivision. These factual determinations are essential to assess the validity of the appropriation and disbursement made by the City of Marikina.

In summary, the Supreme Court ruling provides clarity on the permissible use of public funds in private subdivisions. While LGUs have broad powers to enact ordinances and provide public services, these powers are constrained by the prohibition against using public funds for private benefit. Ownership of the land is a crucial factor. Public funds can only be used for improvements on property owned by the LGU or when there is clear and unrestricted public access and benefit, ensuring that such funds are used for truly public purposes.

FAQs

What was the key issue in this case?	The central issue was whether the City of Marikina could legally use public funds to widen and improve sidewalks within a privately-owned subdivision. The petitioner argued that this violated the constitutional prohibition against using public funds for private purposes.
What did the Supreme Court decide?	The Supreme Court ruled that using public funds for improvements on privately-owned sidewalks is unlawful unless the property has been donated to the LGU or acquired through expropriation. The case was remanded to determine the ownership status of the sidewalks.
What is the significance of Section 335 of RA 7160?	Section 335 of the Local Government Code (RA 7160) prohibits the appropriation or application of public money or property for private purposes. This provision was central to the Court’s decision, emphasizing that LGU funds must be spent solely for public benefit.
What is the role of PD 957 and PD 1216 in this case?	PD 957 and PD 1216 regulate the sale of subdivision lots and define open spaces for public use. While they designate sidewalks for public use, ownership remains with the developer until formally transferred to the LGU.
What is the ejusdem generis rule mentioned in the decision?	The rule of ejusdem generis means that when general words follow a list of specific items, the general words are interpreted to include only things similar to the specific items. In this context, “similar facilities” refers to infrastructure owned by the LGU.
What is the difference between donation and expropriation?	Donation is the voluntary transfer of property to the government, while expropriation is the government’s acquisition of private property for public use with payment of just compensation to the owner.
Why was the case remanded to the Regional Trial Court?	The case was remanded to determine whether the subdivision owner had retained ownership or donated the sidewalks to the City of Marikina, and whether the public had unimpeded access. These factual determinations were needed to decide the validity of the city’s actions.
What are the implications for other LGUs?	This ruling clarifies that LGUs must ensure they are spending public funds on publicly-owned properties or for clear public benefit, particularly when dealing with private subdivisions. They need to verify ownership before undertaking infrastructure projects on private land.

This case underscores the importance of distinguishing between public and private property when LGUs allocate public funds for infrastructure projects. It highlights the necessity for LGUs to confirm ownership and public access rights before undertaking such projects in private subdivisions to avoid violating the prohibition against using public funds for private benefit. This ruling serves as a reminder of the fiscal responsibility required of local governments and the need to respect private property rights.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: Aniano A. Albon v. Bayani F. Fernando, G.R. No. 148357, June 30, 2006