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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 ursuant to the rovisions of -D No. 1 &! as amended "y P#s$ %&' and ()%*! otherwise +nown as the .-+ovin/ial Wate+ 0tilities A/t o1 1 $! , which was issued "y then President Ferdinand -$ .arcos "y virtue of his /egis/ative ower$ 0t 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 further created and formed the .Lo/al Wate+ 0tilities A2)inist+ation. 3LW0A4 ! 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 (C4A)! "oth government agencies and re resented in this case "y the So/icitor 5enera/$ There exists a divergence of o inions "etween C4A on one hand! and the (678A)! on the other hand! with 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 "y /aw $ 4n the other hand! 678A maintained that on/y those water districts with su"sidies from the government fa// within the C4A9s 2urisdiction and on/y to the extent of the amount of such su"sidies! ursuant to the rovision of the 5overnment Auditing Code of the Phi/s$ Petitioners9 main argument is that they are rivate cor orations without origina/ charter! hence they are outside the 2urisdiction of res ondents CSC and C4A$

0SS8-: 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

<-6#: 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 +5le a6ainst t7e (etitione+s an2 +eite+ate O5+ +5lin6 in Tan8a9 /ase 2e/la+in6 :ate+ 2ist+i/ts 6ove+n)ent%o:ne2 o+ /ont+olle2 /o+(o+ations :it7 o+i6inal /7a+te+ $

Ascertained from a consideration of the who/e statute! -D 1 & is a s(e/ial la: a((li/a*le onl9 to t7e 2i11e+ent :ate+ 2ist+i/ts /+eate2 (5+s5ant t7e+eto. 0n 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$ =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$ 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$ 0t is to "e noted that P# (*'! as amended is the source of authori1ation and ower to form and maintain a district$ It is /lea+ t7at :7at 7as *een e;/l52e2 1+o) t7e /ove+a6e o1 t7e CSC a+e t7ose /o+(o+ations /+eate2 (5+s5ant to t7e Co+(o+ation Co2e. Si6ni1i/antl9' (etitione+s a+e not /+eate2 5n2e+ t7e sai2 /o2e' *5t on t7e /ont+a+9' t7e9 :e+e /+eate2 (5+s5ant to a s(e/ial la: an2 a+e 6ove+ne2 (+i)a+il9 *9 its (+ovision. 0t 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$ 0n 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$ 0t 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$ T7e 1o+e6oin6 2is<5isition not:it7stan2in6' We a+e' 7o:eve+' not 5na:a+e o1 t7e se+io5s +e(e+/5ssion t7is )a9 *+in6 to t7e t7o5san2s o1 :ate+ 2ist+i/ts= e)(lo9ees t7+o567o5t t7e /o5nt+9 :7o stan2 to *e a11e/te2 *e/a5se t7e9 2o not 7ave t7e ne/essa+9 /ivil se+vi/e eli6i*ilities. As t7ese e)(lo9ees a+e e<5all9 (+ote/te2 *9 t7e /onstit5tional 65a+antee to se/5+it9 o1 ten5+e' We 1in2 it ne/essa+9 to +5le 1o+ t7e (+ote/tion o1 s5/7 +i67t :7i/7 /annot *e i)(ai+e2 *9 a s5*se<5ent +5lin6 o1 t7is Co5+t. T75s' t7ose e)(lo9ees :7o 7ave al+ea29 a/<5i+e2 t7ei+ (e+)anent e)(lo9)ent stat5s at t7e ti)e o1 t7e (+o)5l6ation o1 t7is 2e/ision /annot *e +e)ove2 *9 t7e )e+e +eason t7at t7e9 la/> t7e ne/essa+9 /ivil se+vi/e eli6i*ilities. ACC4@#0356A! 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$

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