G.R. No. 197559 - Bernardez, Jr. vs. City Government of Baguio

On January 1, 2004, the Sangguniang Panglungsod of the City Government of Baguio enacted Ordinance No. 01, Series of 2004, which appropriated funds amounting to P713,579,000.00 for the reorganization or restructuring of local departments.
Pursuant to Ordinance No. 01, the then City Mayor, Braulio D. Yaranon, issued Administrative Order (AO) No. 171, Series of 2004 on September 9, 2004. This AO designated Engineer Oscar V. Flores as the Acting Building Official of Baguio City pending the appointment of a permanent officer to head the newly created City Building and Architecture Office (CBAO).

Leo C. Bernardez, Jr., then City Engineer, filed a complaint with the Regional Trial Court (RTC), seeking the nullification of AO 171 based on several assertions:

The AO usurped and divested him of his functions as City Engineer.
It violated the Local Government Code (LGC), particularly Article VII, Section 477(a), which mandates that the City Engineer must simultaneously act as the Building Official.
It contravened the principle of security of tenure as guaranteed under the Civil Service Rules.
The reorganization element embedded in Ordinance No. 01 was improper because an appropriations measure should not include non-appropriation provisions such as departmental restructuring.

On June 10, 2005, petitioner amended his complaint by impleading the Secretary of the Department of Public Works and Highways (DPWH), thereby extending his challenge to include the DPWH’s role in the designation of Flores.

The RTC initially granted a temporary restraining order (TRO) but later lifted it and denied petitioner’s application for a writ of preliminary mandatory injunction.
After trial, the RTC dismissed the complaint by holding that:

The validity of Ordinance No. 01 could not be subjected to a collateral attack.
Since the ordinance was valid, AO 171, implemented pursuant to it, was likewise valid.
Petitioner had voluntarily turned over his functions to the newly organized CBAO and was estopped from questioning the order.
Petitioner had failed to exhaust available administrative remedies.

The Court of Appeals (CA) affirmed the RTC’s decision on January 31, 2011, and further denied petitioner’s subsequent motion for reconsideration in its June 22, 2011 Resolution.

Asserted that AO 171 was invalid as it improperly reallocated roles through a reorganization that lacked a legislative basis under RA 6656 and the 1986 Constitution.
Contended that the inclusion of reorganization measures in an appropriations ordinance was unconstitutional.
Claimed that the creation of a separate Building Official’s office and the subsequent appointment of Flores deprived him of his exclusive functions as City Engineer and Building Official, as mandated by Section 477(a) of the LGC.

Maintained that AO 171 was issued in accordance with the powers of the City Mayor under the LGC and that its implementation was validated by both the Civil Service Commission (CSC) and the Department of Budget and Management (DBM).
Argued that the appointment of a separate and distinct Building Official was legally justified under the National Building Code (NBC) and its Implementing Rules and Regulations (IRR), specifically Rule II, Section 203.
Asserted that the DPWH, under its authority to enforce the NBC, had the power to designate building officials as a matter of national concern.

Subsequent to the issuance of AO 171, Flores was appointed as the Department Head of the newly created CBAO—a development that effectively rendered the disputed designation as acting Building Official moot.
The Court noted that with this supervening appointment, the primary controversy regarding the legality and operativeness of AO 171 diminished, as the factual controversy no longer persisted.

Whether the CA erred in affirming the validity of AO 171 by holding that its issuance was proper pursuant to the powers granted by the Local Government Code and the National Building Code.
Whether the CA improperly determined that the appointment of a separate Building Official, distinct from the City Engineer as mandated under Section 477(a) of the LGC, was legally permissible.
Whether the CA erred in applying doctrines of estoppel and the failure to exhaust administrative remedies against petitioner.
Whether the supervening appointment of Flores as the Department Head of the CBAO rendered the case moot and thus precluded any merit in further judicial review of AO 171.