Administrative Order No. 306




MALACAÑAN PALACE MANILA BY THE PRESIDENT OF THE PHILIPPINES [ Administrative Order No. 306, August 14, 1959 ] RELIEVING MR. NONICO L. IMPERIAL AS MAYOR OF NAGA CITY. This is an administrative case against Mr. Monico L. Imperial, Mayor of Naga City, whe is charged in a complaint filed by Mr. Sulpicio do la Trinidad with (1) illegal collection of quarters allowance beginning June 1, 1954 at the rate of P166.66 monthly through his first cousin Dr. Arsenio Imperial by virtue of a simulated private contract executed between them on May 1, 1954 under which Mayor Imperial shall pay P170.00 a month as rent for the use of his (respondents) own house, effective on the said date; and (2) having collected thru his son, Ernesto Imperial, various sums of money from the city government under a contract to furnish the city 500 cubic meters of gravel. The case was investigated by a special investigator of this office, who recommended that the respondent be relieved of his office as Mayor of Naga City in accordance, with the provisions of section 7 of the City Charter. It appears that on May 1, 1954 the respondent, for and in consideration of o loan of P3,000 given by his first cousin Dr. Arsenio Imperial, executed a document (Exhibit A) whereby he coded to the latter the possession and usufruct of his house and lot located in the City of Naga, The pertinent portion of the said document reads as follows: “2. That for and in consideration of the sum of Three Thousand Pesos (P3,000.00), Philippine Currency, which the Party of the First received in full and to his entire satisfaction from the Party of the Second, the Party of the First hereby codes the possession and usufruct of the lot described in par. 1 and the Party of the First agrees that within a period of Six (6) years from the execution of this instrument he shall redeem the same by paying back the principal consideration of this contract to the Party of the Second Part who hereto expresses his conformity. “3. That during the period stated in par. 2, the party of the First shall use and occupy the house and lot above mentioned, upon payment of a minimum rental of one hundred and Seventy Pesos (P170.00) a month, which shall be made from time to time between the Parties.” The respondent affirmed the genuineness of the document and admitted that he has occupied the said house continuously since May 1, 1954. He denied, however, that the document was simulated to enable him to collect quarters allowance to which he would not be entitled if he occupies his own house during his incumbency. The respondent was appointed as mayor on May 29, 1954 upon recommendation made by the political loaders of the Bicol region. He assumed the office of mayor on the same day. He claimed that he had no previous knowledge of his forthcoming appointment when he executed the document. Exhibit A, and that the said appointment was a surprise to him. His testimony to this effect has not been controverted. The evidence discloses that in accordance with the said contract, he paid to Dr. Imperial the rental for the use of the house in question for the month of May, 1954. Since June, 1954, hewever, Dr. Imperial has been collecting the monthly rental of P166.66 from the City Government, corresponding to the respondents quarters allowance granted to the latter effective upon his assumption of office, pursuant to section 7, Article II of the City Charter. Altheugh there is no positive proof to show conclusively that the respondent clandestinely received the monthly house allowance from Dr. Arsenio Imperial or paid no rentals to him, yet there are strong indications that point to the questionable character of the contract and which warrant the belief that the cession of the house and lot in favor of Dr. Imperial and its lease to the respondent at a monthly rental of P170 was not mode in good faith but was resorted to so as to enable the respondent to receive the house allowance which he would not have been entitled to had he kept his house and lot. As q patter of fact, the respondent had not actually paid the sail rental to his cousin Dr. Imperial from June 1, 1954 to November 5, 1954 when the Office of the President granted him non-commutable quarters allowance, because Dr. Imperial collected the rentals corresponding to the said period only after the said allowance had been granted. In the first place, it is rather unusual for a person who codes a property in usufruct to retain the possession of the same. Ordinarily, the usufructuary would have the possession and enjoyment of the property, or he may derive income therefrom by leasing it to someone other than the owner. It is not in keeping with the nature of a usufruct that the property should be leased back the very owner from whom it comes and who thereby retains the use and possession of the same by paying rentals therefor. In the second place, usufruct is not availed of as an accessory obligation to guarantee payment of a loan contracted by the owner. If the rentals due for the use of the property by the owner would not be credited to the amortization of the principal obligation, there is really no loan. Under the arrangement the rentals of P170 would be equivalent to interest on the principal obligation and not considered as fruits of the property. It is hart to believe that the respondent who is on intelligent man would pay a monthly interest of P170 on a loan of P3,000 payable in six years. That would be shockingly usurious and if the respondent apparently consented to this arrangement the only probable reason for so doing was that he did not pay the supposed rental because there was really no loan. In the third place, the usufruct of the house and lot was never recorded as encumbrance thereon. This circumstance gains added significance when we consider that the property, notwithstanding the alleged usufruct, was mortgaged by the respondent without the intervention of the usufructuary to guaranty a loan of P5,000 from the Philippine National Bank (PNB). If the property was held in usufruct, Dr. Arsenio Imperial, the usufructuary, should have been informed of the subsequent mortrage of the property to the PND. The records show that the respondent was able to mortgage the property as his title thereto was clean and unencumbered. And lastly, if the house and lot were really coded to Dr. Arsenio Imperial, and for the duration of the usufruct respondent would be bound to pay a monthly rental of P170 for the use of the property, his first impulse upon receiving the P5,000 from the PNB would have been to liquidate the loan of P3,000 so as to release his property and be relieved of the obligation of paying the monthly rentals. That the respondent did not show any interest and remained unconcerned over the cession of his property to Dr. Arsenio Imperial tends to show that such arrangement was more beneficial to him as he would continue receiving the monthly house allowance from the city government of Naga as it would appear that he had no house of his own. A person who apparently does not core to protect his material interest would not take that attitude unless he derives some kind of benefit from his deliberate omission. On the whole, I am convinced that the respondent subordinated the interest of the city to his own so as to enjoy a personal benefit in the form of monthly house allowance, thereby failing in his bounden duty under the city charter to safeguard the financial interest of the city. The second charge that the respondent collected through his son, Ernesto Imperial, various sums of money from the city government under the contract to furnish the city with 500 cu.1aшphi1 meters of gravel was not substantiated. The evidence shows that the contract was awarded to the Bicol Development Company through a public bidding conducted by the City Treasurer and approved by the City Engineer and City Auditor. Although Ernesto Imperial is a partner in the Bicol Development Company, the respondent did not in any way intervene in the award of the contract to said firm. Furthermore, the Bicol Development Companys bid was accepted because it was the lowest and most advantageous to the city.1aшphi1 For all the foregoing, and pursuant to the provisions of Section 7 of the Charter of Naga City that the city mayor shall held office at the pleasure of the President hereby terminate the services of Mayor Monico L. Imperial and relieve him of the Office of Mayor of the City of Naga effective upon receipt of notice hereof. Done in the City of Manila, this 14th day of August in the year of Our Lord, nineteen hundred and fifty-nine and of the Independence of the Philippines, the fourteenth. (Sgd.) CARLOS P. GARCIA President of the Philippines By the President: (Sgd.) JUAN C. PAJO Executive Secretary The Lawphil Project - Arellano Law Foundation