Hiring by a Municipality of a Private Lawyer to Collect Local Taxes or File a Case upon Non-payment of Taxes Due

February 3, 2004 DILG LEGAL OPINION NO. 026-04 Mayor Giovani Ed M. Napari Kananga, Leyte Dear Mayor Napari : This refers to your request for this Department to "facilitate and approve" the hiring/contracting of the services of a private lawyer by your municipality the collection of local taxes, i. e. , Local Business Taxes and Real Property Tax due from California Energy International Services, Inc. (CalEnergy for brevity) and PNOC-EDC and to file a court case should the latter fail to comply. Further, you requested this Department to assist your municipality to collect what is due your LGU. To properly address your concern, we opt to state the three (3) underlying issues that need to be resolved, viz : 1) Whether or not this Department can facilitate and approve your municipality's intent to hire the services of a private lawyer; 2) Whether or not the LGU can hire a private lawyer to collect the local taxes due from CalEnergy and PNOC-EDC; and, 3) Whether or not the LGU can hire a private lawyer to commence court suits should CalEnergy and PNOC-EDC fail/refuse to pay the local taxes due the latter. In reply to the first issue, please be informed that it is not within the duty and authority of this Department to "facilitate and approve" the hiring of a private lawyer by any given Local Government Unit. May it be stressed that pursuant to Section 22 a (5) of the Local Government Code of 1991 (RA 7160), LGUs are given the power to enter into contracts, subject however to the condition stated under Section 22 (c) of the Code that prior sanggunian authorization should be given to the Local Chief Executive before the latter enters into said contract. The hiring of a private lawyer necessitates the execution of a contract of services which naturally falls within the purview of Section 22 (c) of the Code. Of equal importance however would be our discussion on the second and third issues before your municipality enters into a contract of services with a private lawyer. Insofar as collection of local taxes is concerned, please be advised that a private lawyer can not be hired to do the same because the collection of taxes is a duty of the local treasurer (Sec. 170, RA 7160). Should a taxpayer fail to pay its tax liabilities, the same Code provides for remedies therefor. As regards the contemplated hiring of a private lawyer to commence court suits for the collection of the local taxes, please be guided by the ruling of the Supreme Court, in the case of Edgar Mancenido, et al., vs. Court of Appeals (330 SCRA 419). Thus: "Under Section 481, Article 11, Title V of the Local Government Code, the legal officer of a local government unit shall represent it in all civil actions and special proceedings wherein the local government unit or any official thereof in his official capacity, is a party; and that in actions or proceedings where a component city or municipality is a party adverse to the provincial government or to another component city of municipality, a special legal officer may be employed to represent the adverse party". As the representation of a local government unit by a private attorney, the Supreme Court in the same case, reiterated its previous rulings, to wit: 1. Only when the provincial fiscal is disqualified may the municipal council be authorized to hire the services of a special attorney. 2. The provincial public prosecutor is disqualified from representing a particular municipality; (a) when the jurisdiction of a case involving the municipality lies with the Supreme Court; (b) when the municipality is a party adverse to the provincial government or to some other municipality in the same province; and (c) when in a case involving the municipality, the provincial prosecutor, his spouse, or his child is involved as a creditor, heir, legatee, or otherwise. 3. In resolving whether a local government official may secure the services of a private counsel in an action filed against him in his official capacity, the nature of the action and the relief sought are to be considered. In Albuera vs. Torres (102 Phil., 211 [1957]), the Supreme Court approved the representation by private counsel of a provincial governor sued in his official capacity, where the complaint contained other allegations and a prayer for moral damages, which, if due from the defendants, must be satisfied by them in their private capacity. Foregoing considered, the general rule is that, local government units shall only be represented by government lawyers in all actions involving the former. However, should your predicament fall under any of the exceptions enumerated above, then, hiring of a private lawyer may be proper. Hope we have enlightened you on the matter. HCaDIS Very truly yours, (SGD.) JOSE D. LINA, JR. Secretary Department of Interior and Local Government