Republic of the Philippines REGIONAL TRIAL COURT Branch 17, Cebu City MCWD BOARD OF DIRECTORS namely: ATTY. RALPH J. SEVILLA, CIVIL CASE NO. AUGUSTUS G. PE, JR. and ATTY. R-CEB-19-09477-CV_ CECILIA J. ADLAWAN, in their FOR: DECLARATION OF official and personal capacities, NULLITY OF NOTICE OF Plaintiffs, TERMINATION, LWUA’S. DESIGNATION OF INTERIM -versus- BOARD OF DIRECTORS WITH URGENT PRAYER FOR HONORABLE CEBU CITY TEMPORARY RESTRAINING MAYOR EDGARDO C. LABELLA, ORDER & INJUNCTION, ETC. LOCAL WATER UTILITIES ADMINISTRATION (LWUA), ACTING ADMINISTRATOR JECI LAPUS, INTERIM BOARD OF DIRECTORS, NAMELY: ATTY. ROBERTO S. SAN ANDRES, MS. EILEEN L. DELA VEGA, and MS. CRISTINA L. MARCELINA(sic) and METROPOLITAN CEBU WATER DISTRICT, Defendants. -/ DECISION ‘Absent any contrary statutory _ provision, the power to appoint carries with it the power to remove or to discipline(Napay v. Office of the Municipal Vice-Mayor of Daraga, Albay, G.R. No. 242983, January 14, 2019; citing Aguirre, Jr. v. De Castro, GR. No. 127631, December 17, 1999). This is an action for declaration of nullity of the notices of termination issued by defendant Cebu City Mayor Edgardo Labella(Mayor Labella), who is now deceased, as well as the designation of the Interim Board of Directors of the Metro Cebu Water District(MCWD) issued by the Local Water Utilities Administration(LWUA) through its then Acting Administrator Jeci Lapus(Lapus). who is also deceased now, filed by the plaintiffs against defendant Mayor Labella, LWUA, Acting LWUA Administrator Lapus, Interim Members of the BOD of MCWD namely: Atty. Roberto San Andres(Aity. San Andres), Bileen Dela Vega(Dela Vega), and Cristina Marcelino(Marcelino), and MCWD as unwilling plaintiff. Briefly, plaintiffs Atty. Ralph Sevilla(Sevilla), Agustus Pe, Jr.(Pe), and Atty. Cecilia Adlawan(Adlawan) allege in their second Amended Complaint that sometime on October 15, 2019, defendant Mayor Labella sent Notices of EE(2) Termination(Annexes “B” to “F”-Amended Complaint) to the Chairman of the Board of Directors(BOD) of MCWD Joel Mari Yu/Yu), Vice Chairman Sevilla, Secretary ‘Adlawan, Member Procopio E. Fernandez(Fernandez), and Member Pe, informing them that their respective services were terminated effective on the said date when they received copies thereof. They claim that their rights to due process, privacy, and to be presumed innocent until proven otherwise were violated because defendant Mayor Labella announced his action to the media thereby subjecting them to trial by publicity. Sometime on October 17, 2019, defendant MCWD through its BOD Chairman and General Manager sent “Reply to Notice of Termination dated 15 October 2019 "(Annex “G"-Amended Complaint) to defendant Mayor Labella informing him that his termination order had violated the Constitution, P.D. No. 198, and other laws. As their dismissal was devoid of due process, the BOD of MCWD continued to perform their functions as such. On October 21, 2019, the BOD held a meeting as previously set, attended by the plaintiffs. In the afternoon of the said date, Chairman Yu submitted his resignation addressed to defendant Lapus effective immediately. On October 22, 2019, the plaintiffs held another BOD meeting wherein they passed a Resolution No. 10-147- 2019 directing MCWD to file this case against defendant Mayor Labella. In the afternoon of the same date, they received a letter/Annex “H”-Amended Complaint) ftom defendant Lapus addressed to Chairman Yu and the BOD informing them that he had designated interim members of the BOD of MCWD. On October 25, 2019, the Office of the BOD received a Memorandum dated October 21, 2019(Annex “I") from defendant Lapus designating the following LWUA personnel as members of the Interim BOD of MCWD, namely: Atty. San Andres as Chairman, Dela Vega and Marcelino as members. ‘The plaintiffs assert that defendant MCWD is independent and autonomous from the local government units(LGUs), citing certain Sections of PD 198, and DILG Memorandum Circular No. 2019-03 dated January 10, 2019. It has a BOD consisting of five(5) members which is the policy-making body of MCWD. If the BOD is charged administratively, it must be based on its function as policy maker, and not for just on any ground. It has the power to appoint a director to fill in a vacancy in the BOD in case the appointing authority fails to make an appointment within the period of thirty (30) days. They submit that defendant Mayor Labella and the BOD share the same power to appoint. Hence, he has no power to terminate a BOD member. The terms of the regular members of the BOD “shall be for six years commencing on January 1 of odd-numbered years”. They aver that in 2016, Yu and Sevilla were appointed by the then Cebu City Mayor Tomas R. Osmefia(Mayor Osmefia) as directors of MCWD, and their term of office started on January 1, 2017, until December 31, 2022. In 2018, Pe and Adlawan were appointed by Mayor Osmefia as directors of MCWD, and their term of office began on January 1, 2019, up to December 31, 2024. Prior to his resignation, Yu was the Chairman of the BOD, Sevilla was the Vice-Chairman, Adlawan was the Secretary, while Pe and Fernandez were members. ‘The plaintiffs claim that the services of the BOD members of MCWD were terminated without valid cause and due process. Their removal contravened their security of tenure under P.D, No. 198 and Section 1, Article III of the 1987 Constitution. It violates the independence and autonomy of defendant MCWD pursuant to P.D. 198 and ia(3) existing DILG Circulars. They claim that defendant Mayor Labella had the power to appoint the members of the BOD of MCWD, but he had no power to remove them. Even granting that he had such power to remove them, he could not do so without a valid cause and due process. They allege that they were not formally charged and given the opportunity to defend themselves since they were terminated immediately upon receipt of the notices of termination on October 15, 2019. As BOD members, they could only be removed based on a valid cause under the Civil Service Law such as gross misconduct, simple misconduct, etc. They submit that “widespread dissatisfaction over the services of MCWD”, which was defendant Mayor Labella’s reason for removing them, is not a valid cause. They claim that they suffered serious anxiety, sleepless nights, untold worries, and besmirched reputation, and they would also incur litigation expenses. He acted with evident bad faith because he removed them for being the appointees of his political rival, former Mayor Osmefia. Thus, he should be held liable to pay them the amount of Phpl million as moral damages. The Cebu City Council did not even pass any resolution authorizing his action, Additionally, the plaintiff’ allege that defendants Mayor Labella and Lapus conspired with each other in removing them since in his letter dated October 1, 2019(Annex mended Complain)) addressed to Mayor Labella, defendant Lapus stated that he interposed no objection to the Mayor Labella’s plan to remove the BOD members of MCWD. Citing Section 8 of P.D. 198, they argue that LWUA has no power to designate the interim members of the BOD of MCWD. The only instance when LWUA may appoint any of its personnel to sit as a BOD member of a water district is when the latter has an unpaid loan from the former. MCWD, however, has no loan from LWUA. Hence, they submit that all acts of the Interim Board of MCWD are illegal. ‘There are now two(2) sets of BOD of MCWD since they allegedly continued to function as BOD members. They assert that their rights are well-established, and that in order to prevent the continuation of defendants’ acts, they ask for the issuance of TRO and writ of preliminary injunction against the defendants. They also pray that, after trial, the writ of preliminary injunction be made permanent, that the Notices of Termination issued by defendant Mayor Labella as well as the designation of the Interim BOD of MCWD issued by defendant Lapus be declared void, and that the defendants be ordered to pay them the amount of Php1 million as moral damages. In his Answer, defendant Mayor Labella through the Cebu City Legal Office denies the material allegations in the second Amended Complaint. As affirmative defenses, he asserts that LWUA has original and exclusive jurisdiction over this case. The plaintiffs have no cause of action since the case was prematurely filed in Court as LWUA has not yet reviewed the termination order. The amended Complaint, the withdrawal of MCWD as one of the plaintiffs, and the plaintiffs’ prayer for Php|million damages did not cure such defect. Thus, he submits that the Court has no power to grant the injunctive reliefs prayed for by the plaintifis. Moreover, he argues that the plaintifi are not entitled to the injunctive writ because they have no clear and unmistakable right to be protected as there is no vested right to public office. The injury that they allegedly suffered could not be considered as irreparable since it can be compensated by Php! million as stated in the Complaint. The act sought to be enjoined has already been consummated as they have already been TE(4) removed and replaced as directors by the new BOD members at the time when the original Complaint was filed in Court. On February 18, 2020, the appointments of Atty. Jose Daluz Ill, Atty. Francisco Malilong, Jr., and Miguelito Pato as new members of BOD had already been confirmed by LWUA. He likewise claims that the issuance of the injunctive writ would constitute as a prejudgment of the merits of the main case. Citing Section 11 of P.D. 198 as amended, defendant Mayor Labella contends that the mayor of Cebu City has the exclusive power to appoint and remove the members of the BOD of MCWD subject to review and approval of LWUA. His power to appoint carries with it the power to remove or discipline them unless there is an express provision of law prohibiting him to do so. The operational autonomy of water districts under P.D. 198 as amended and DILG Memorandum Circular No. 2019-03 does not diminish the mandate of the LGU to ensure efficient delivery of water supply to its constituents. He alleges that in order to maintain check and balance among the LGUs, the water district, and the LWUA, P.D. 198 delineates their respective roles. The local chief executive appoints and removes the members of the BOD; the BOD appoints and removes the General Manager; and the LWUA establishes the standards on how the BOD and the General Manager perform their functions. LWUA also has the power to review the appointment and removal of the directors made by the local chief executive. It can only appoint a director when the water district has obtained a loan from the former, and the LWUA-appointed director sits as director until the loan is paid. The BOD may appoint a BOD member whenever a vacancy in the BOD occurs in default of the appointing authority. His power to appoint is not co-equal with BOD, and his power to appoint or remove a director of MCWD does not need a resolution from the City Council as such power is essentially executive in nature. He argues that a local chief executive is not required to conduct a hearing before removing a BOD member since the essence of due process is simply an opportunity to be heard. The aggrieved party may file a motion for reconsideration or appeal in the LWUA who approves the order of removal. He submits that the function of the members of MCWD's BOD is policy-making, and their positions are non-career and confidential in nature that require the highest degree of confidence. Their tenure is co-terminus with that of the appointing authority or is at the latter’s pleasure. The dissatisfaction of the Cebuanos with MCWD’s services shows plaintiffs’ lackluster performance as BOD members of MCWD. He maintains that his loss of trust and confidence in them is a just cause for their removal. Thus, he prays that the case be dismissed. On its part, defendant MCWD denies as well in its Answer the material allegations in the Complaint. As affirmative defenses, MCWD avers that the Complaint does not state a cause of action as far as it is concerned because it had no participation in the questioned acts of defendants Mayor Labella and LWUA. The Complaint did not even state why it is considered as an unwilling co-plaintiff. It submits that the issuance of the TRO has become moot because the appointment of the new set of BOD members has already been confirmed by defendant LWUA as stated in the letter dated January 27, 2020(Annex “]"-MCWD’s Answer). It posits that as far as it is concerned, there is no we(5) basis for the plaintiffs’ prayer for damages. Thus, it prays that the case be dismissed and the plaintiffs" application for TRO and writ of preliminary injunction be denied. On the other hand, defendants LWUA, Acting Administrator Lapus, Interim BOD members, namely: Atty. San Andres, Dela Vega, and Marcelino likewise deny in their ‘Answer the material allegations in the Complaint. As affirmative defenses, citing Section 11 of P.D. 198 as amended by P.D. 768, they allege that LWUA has the original, exclusive, and primary jurisdiction over this case, and in fact, it has already taken cognizance and exercised its jurisdiction over it. They claim that the plaintiff’ have no cause of action against the defendants because they failed to exhaust administrative remedies. LWUA’s power to review is the remedy available to a director of a water district who has been removed from his position in order to determine whether the termination was for a valid cause. They should have waited first for the LWUA’s resolution on the action taken by defendant Mayor Labella before resorting to judicial action. They argue that even assuming that the Court has jurisdiction over the case, the Complaint should still be dismissed as it did not seek for the declaration of nullity of LWUA’s ruling on defendant Mayor Labella’s Notice of Termination. In addition, they claim that the Complaint is defective since the newly appointed members of the BOD of MCWD, namely: Jodelyn May Seno, Atty. Manolette Dinsay, Atty. Jose Daluz III, Miguelito Pato, and Atty. Francisco Malilong, have not been impleaded as defendants in this case. They submit that the said new BOD members are indispensable parties since without them there can be no final determination in this action and any decision in this case would not be binding on them. Hence, they pray that the case be di ised. The records show that this case was filed in Court on November 11, 2019, and was raffled to RTC-7, Cebu City presided over by its Presiding Judge, Hon. James Stewart Ramon Himalaloan(Hon. Himalaloan). In the original Complaint, MCWD was one of the plaintiffs. Later, it filed a Notice to Withdraw as co-plaintiff. Defendant Mayor Labella filed a Motion to Dismiss arguing that LWUA has the original and exclusive jurisdiction over the case, and that the plaintiffs have no cause of action against defendant Mayor Labella as the Complaint was prematurely filed. The plaintiffs filed their Opposition thereto. On March 12, 2020, while the Motion to Dismiss was pending, the plaintifi8 filed its first Amended Complaint impleading MCWD as one of the defendants for allegedly being an unwilling co-plaintiff. Defendant Mayor Labella filed another Motion to Dismiss and Opposition to the plaintiffs’ application for TRO which substantially reiterated the allegations in his previous Motion to Dismiss. On November 24, 2020, before the said branch could resolve the plaintiffs’ application for TRO and defendant Mayor Labella’s Motion to Dismiss, the plaintiffs filed their second Amended Complaint impleading the Interim BOD members of MCWD. Defendant Mayor Labella and MCWD filed their respective Answers with Affirmative Defenses thereto. On March 15, 2021, RTC-7 through its Presiding Judge, Hon. Himalaloan, issued a TRO. On motion of defendant Mayor Labella, Hon. Himalaloan inhibited himself from handling the case(see Order dated April 19, 2021). On May 8, 2021, LWUA and the Interim Members of BOD of MCWD filed their Answer with Affirmative Defenses. On May 14, 2021, the plaintiffs filed a motion for reconsideration of the aforementioned Order dated April 19, 2021. The said branch did not rule on the plaintiffs" motion for reconsideration. The case was re-(6) raffled to RTC-14, Cebu City presided over by its Presiding Judge, Hon. Merlo Bagano. During the hearing on the plaintiffs’ application for writ of preliminary injunction, defendant Mayor Labella offered the testimony of Atty. Jose Daluz III while defendants LWUA and the Interim BOD presented Atty. Roberto San Andres as their witness. It required both parties to submit their memoranda on whether the plaintiffs" application for writ of preliminary injunction should be granted. Both parties submitted their memoranda. The said branch denied the plaintiffs’ application for writ of preliminary injunction(see Order dated June 30, 2021). It also denied the affirmative defenses of defendant Mayor Labella as well as the affirmative defenses of defendants LWUA and the Interim BOD members of MCWD(see Order dated July 9, 2021). The plaintifis filed a motion for reconsideration of the Order dated June 30, 2021 and motion for inhibition. Hon. Bagano granted the motion for inhibition and recused himself from the case(see Order dated July 22, 2021). Eventually, the case was re-raffled to this Branch. The Court required the defendants to file their comment on the plaintiffs’ motion for reconsideration dated June 30, 2021. They filed their Opposition thereto except for defendant MCWD. Defendant LWUA also filed a motion to dismiss arguing that the case has been mooted since it has already confirmed the appointment of the new members of the BOD of MCWD. It also argues that the proper remedy to question the appointment of the new members of BOD of MCWD js quo warranto, and not this action. The plaintiffs objected to the motion. On its part, defendant MCWD filed a motion to resolve its affirmative defenses incorporated in its Answer which was filed when this case was still pending in RTC-7, Cebu City. On July 7, 2022, defendant LWUA submitted a Manifestation notifying the Court that its Acting Administrator and herein co-defendant Lapus died on July 11,2021, It further manifested that he was replaced by Officer-in-charge and co-defendant Dela Vega who adopts the official stand of the late Acting Administrator Lapus. On the other hand, on July 19, 2022, the Office of the City Attomey of Cebu City likewise submitted a Manifestation apprising the Court that defendant Mayor Labella died on November 19, 2021, and he was succeeded by Vice Mayor Hon. Mayor Michael Rama, who eventually won as City Mayor during the May 9, 2022 elections. It further informed the Court that Hon. Mayor Michael Rama(Mayor Rama) “decides not to adopt or continue and is not adopting the action of his predecessor”, deceased defendant Mayor Labella. The Court denied the plaintiffs’ motion for reconsideration of the Order dated June 30, 2021, defendant LWUA’s motion to dismiss, and MCWD's affirmative defenses(see Order dated September 30, 2022). In a separate Order likewise dated September 30, 2022, the Court allowed Officer-in-Charge Dela Vega to substitute for the late Acting Director Lapus as representative for defendant LWUA. On the other hand, although Mayor Rama manifested that he “decides not to adopt or continue and is not adopting the action of his predecessor”, the Court held that the case has to continue since the late Mayor Labella was sued in his official capacity and there is no indication in Mayor Rama's Manifestation that he took steps for the return of the plaintiffs to their previous positions. His inaction was construed by the Court that he adopted the acts of his predecessor. Hence, in compliance with the requirements of due process especially that7) the plaintiffs are asking for Php1 million damages, the Court directed Mayor Rama to substitute for the late defendant Mayor Labella(see separate Order dated September 30, 2022). Mayor Rama filed a motion for reconsideration but it was also denied(see Order dated November 17, 2022). During the pre-trial conference, the parties had agreed that the issues to be resolved in this case are the following, to wit: 1) Whether the late Cebu City Mayor Edgardo C. Labella had the authority to validly terminate the tenure of the plaintiffs as members of the Board of Directors of MCWD; 2) Assuming that the late Cebu City Mayor Labella had the authority to terminate, whether the plaintiffs were given due process; 3) Whether the Local Water Utilities Administration (LWUA) has the power to review the order issued by the late Cebu City Mayor Labella removing the plaintiffs as members of the Board of Directors of MCWD; and 4) Whether the plaintiffs are entitled to their claims for damages. Inasmuch as the material factual allegations in the second Amended Complaint are substantially undisputed, the parties had further agreed to subject this case to summary judgment, and that they would just submit their respective memoranda, Accordingly, the parties were given 15 days from the date of the pre-trial within which to submit their respective memoranda setting forth the law and the facts which would support their respective claims and defenses on the foregoing issues, attaching thereto the judicial affidavits of their witnesses, if necessary. After the submission of their memoranda, the case would be deemed submitted for decision. The plaintiffs and defendant LWUA submitted their respective Memoranda. On the other hand, Mayor Rama or the Cebu City Legal Office and co-defendant MCWD did not submit any Memorandum within the period given, hence the submission of their respective memoranda is considered waived. In their Memorandum, the plaintiffs substantially reiterated the allegations in their ‘Amended Complaint as well as in their Motion for Reconsideration of the Order dated June 30, 2021 issued by RTC-14, Cebu City which denied their application for writ of preliminary injunction. On its part, LWUA’s Memorandum likewise re-stated to a large extent the averments in its Answer. RULING OF THE COURT There is no quibbling that the plaintiffs were used to be members of the BOD of MCWD together with Yu and Fernandez. Plaintiff Sevilla was appointed by the then Cebu City Mayor Osmefia as director sometime in 2016. His term of office started on January 1, 2017 until December 31, 2022. On the other hand, plaintiffs Pe and Adlawan were appointed by Mayor Osmeiia as directors sometime in 2018. Their term of office began on January 1, 2019 up to December 31, 2024. Sometime on October 15, 2019, defendant Mayor Labella served Notices of Termination(Annexes “B” to “F"-Amended Complaint) on all the five(5) members of the BOD of MCWD including the plaintiffs. In(8) the said Notices, he told them that he was constrained to terminate their services after the legislative bodies of the local governments of Cebu City, Mandaue City, Talisay City, the Municipalities of Consolacion, Lilo-an, and Cordova as well as the Province of Cebu passed their respective Resolutions expressing their dissatisfaction over the poor services of MCWD in their respective localities, He further informed each of them that “your services are henceforth deemed terminated effective today, 15 October 2019.” Before removing them, defendant Mayor Labella wrote co-defendant Lapus, who was then the Acting LWUA Administrator, about his plan to terminate their services, to which the latter posed no objection thereto as indicated in his letter dated October 1, 2019 addressed to the former(Annex “N"-Amended Complaint). Further, it is undisputed that the BOD members were not administratively charged or had received any show cause order from defendant Mayor Labella involving any ground for disciplinary action before their services were terminated. Sometime on October 25, 2019, defendant Lapus designated LWUA personnel and co-defendants Atty. San Andres as Chairman, Dela Vega and Marcelino as members of the Interim BOD of the MCWD in order to avoid vacuum in the positions of the MCWD’s BOD. There is also no dispute that when LWUA reviewed defendant Mayor Labella’s Notices of Termination, it issued orders all dated October 25, 2019/Exhibit “4” to “4-B"-LWUA's Memorandum) through defendant Lapus requiring the plaintiffs, within five(5) days from receipt of their copies thereof, to submit their comment on the said Notices but they failed to do so. Hence, defendant Lapus considered their right to submit their comment as being waived, terminated their services as BOD members, and directed the Interim BOD to accept nominations for the new set of MCWD’s BOD members as shown in the letter dated December 5, 2019 addressed to defendant Mayor Labella/Exhibit 5-LWUA’s Memorandum). Later, LWUA approved the appointments of Atty. Jose Daluz III, Atty. Francisco Malilong, Jr., and Miguelito Pato as new regular members of the BOD of MCWD as shown ina letter dated January 27, 2020 signed by defendant Lapus(Annex “I”-MCWD''s Answer). The first, second and third issues are intertwined, hence the Court would resolve them jointly. The plaintiffs maintain in their Memorandum that the Cebu City Mayor has no authority to remove a member of the BOD of MCWD. They submit that it is the BOD of MCWD which has the sole power to remove its own members. Citing Sections 6 and 7 of P.D. 198, DILG Memorandum Circular No. 97-78 dated April 14, 1997, DILG Memorandum Circular No. 2005-21 dated March 4, 2005, and DILG Memorandum Circular No. 2019-03 dated January 10, 2019, they explain that although MCWD is a quasi-public corporation or a government instrumentality with corporate power but it exercises the powers, rights, and privileges of a private corporation. They argue that even the Legal Manager of LWUA and co-defendant, Atty. San Andres, supports their view that defendant Mayor Labella has only the power to appoint a member of the BOD of MCWD but he does not have the power to discipline them. They submit that the water districts including MCWD are not under the jurisdiction or control of any political subdivision in order to maintain their autonomy. Likewise, LWUA supports the plaintiffs’ stand. In a letter dated December 5, 2019(Annex “5"-LWUA’s Memorandum) signed by its Acting Administrator and co- defendant Lapus addressed to defendant Mayor Labella, LWUA reasons out that Mayor Tt(9) Labella has no power to remove the BOD members of MCWD because upon the formation of MCWD, the local governments lose ownership, supervision and control or any right whatsoever over the water districts, citing Section 7 of R.A. 198 and DILG Memorandum Circular No. 2019-03. After a careful examination of the parties’ pleadings, their admissions, the evidence on record, and the existing applicable laws and jurisprudence, the Court finds that the Mayor of Cebu City particularly defendant Mayor Labella has the power to remove or discipline the members of the BOD of MCWD. For a better understanding, the Court finds it necessary to clarify first as to who has the power to appoint the members of the BOD of MCWD. Section 3(b) of P.D. 198 as amended, among others, states that “(i)n the event that more than seventy-five percent Of the total active water service connections of a local water district are within the boundary of any city or municipality, the appointing authority shall be the mayor of that city or municipality, as the case may be; otherwise, the appointing authority shall be the governor of the province within which the district is located. If portions of more than one province are included within the boundary of the district, and the appointing authority is to be the governors then the power to appoint shall rotate between the governors involved with the initial appointments made by the governor in whose province the greatest number of service connections exists.” In the case of Rama vy. Moises, G.R. No. 197146, December 6, 2016, although the Highest Tribunal declared the aforesaid said provision as partially unconstitutional, it categorically held that the Mayor of the City of Cebu is the appointing authority of the members of the BOD of MCWD. In fact, in the case at bar, it was the former Cebu City Mayor Osmefia who appointed the plaintiffs as members of the BOD of MCWD. The only instance when the BOD of a water district may appoint a director is when there is a vacancy in the BOD which may occur before the expiration of any director's term, and the appointing authority fails to make an appointment within 30 days after submission to him of a list of nominees, the vacancy shall be filled from such list by a majority vote of the remaining members of the Board of Directors constituting a quorum/Section 12, P.D. 198; emphasis supplied). After it is settled as to who has the power to appoint the members of BOD of MCWD, the more important question now is, who has the power to remove or discipline them? Section 11 of P.D. 198 as amended by PD 768 provides that "(o)f the five initial directors of each newly-formed district, two shall be appointed for a maximum term of two years, two for a maximum term of four years, and one for a maximum term of six years. Terms of office of all directors in a given district shall be such that the term of at least one director, but not more than two, shall expire on December 31 of each even- numbered year. Regular terms of office after the initial terms shall be for six years commencing on January | of odd-numbered years. Directors may be removed for cause only, subject to review and approval of the Administrationemphasis supplied). It is clear from the foregoing that the BOD members of a water district may be removed for cause but subject to review and approval of LWUA. Unfortunately, P.D. 198 a(10) as amended particularly the aforesaid Section does not expressly provide as who has the power or authority to remove or discipline them. In the case of Davao City Water District v. Civil Service Commission, G.R. Nos. 95237-38, September 13, 1991, the Highest Tribunal had categorically held that water districts are “definitely not private corporations”. They are considered as "government- owned or controlled corporations with original charter" which fall under the jurisdiction of the CSC and COA(emphasis supplied). All branches, subdivisions, instrumentalities and agencies of the government, including government owned and controlled corporations with original charters are covered by the civil service and its rules and regulations(Jocom v. Regalado, G.R. No. 77373, August 22, 1991). Thus, it is the civil service laws, rules and regulations that apply as regards the removal or imposition of disciplinary action against the BOD members of MCWD, and not the provisions of the Revised Corporation Code Moreover, under the doctrine of implication, the power to appoint carries with it the power to remove except when such power to remove is expressly vested by law in an office or authority other than the appointing power. In short, the general rule is that power to appoint carries with it the power to discipline. The exception is when the power to discipline or to remove is expressly vested in another office or authority(Gatchalian v. Urrutia, G.R. No, 223595, March 16, 2022; emphasis supplied). Absent any contrary statutory, the power to appoint carries with it the power to remove or discipline provision(Napay v. Office of the Municipal Vice-Mayor of Daraga, Albay, G.R. No. 242983,January 14, 2019; citing Aguirre, Jr. v. De Castro, G.R. No. 127631, December17, 1999; emphasis supplied). In this case, it is settled that the Mayor of Cebu City is the appointing authority of the members of the BOD of MCWD pursuant to P.D. 198 as amended. The said law does not expressly state that the power to remove or discipline them is vested in another office or authority. It merely states that the “(d)irectors may be removed for cause only, subject to review and approval of the Administration(emphasis suppled). So, whose decision is it that has to be reviewed and approved by LWUA? Apparently, such a decision is not that of the BOD of a water district since there is no provision in P.D. 198 as amended giving it the power to appoint a member thereof, much less to remove a director except when there is a vacancy in the BOD which may occur before the expiration of any director's term, and the appointing authority fails to make an appointment within 30 days after submission to him of a list of nominees pursuant to Section 12 of P.D. 198. Besides, to allow the BOD of a water district to remove or discipline its own members may dangerously result in mutual protection among the BOD members themselves. Thus, the only logical and reasonable conclusion then is that the decision which may be the subject to review and approval of LWUA must be that of the chief executive of the local government unit who has also the power to appoint the BOD members of a water district under P.D. 198 as amended. Section 7 of P.D. 198 as amended stipulates that upon the formation of the water district, “the local government or governments concerned shall lose ownershij We(1) supervision and control or any right whatsoever over the said water district.” However, to the mind of the Court, the fact that the chief executive of the local subdivision unit where such district is located has the disciplining power over the members of the BOD of MCWD does not in any way affect its being independent from the local government unit. It appears that the intent of the afore-quoted provision is merely to prevent the local government unit concemed from meddling or interfering in purely internal affairs, management or operation of the water district. Otherwise, P.D. 198 as amended should not have given at all the local chief executives the power to appoint the members of the BOD of the water districts, or at least it should have expressly provided that the power to discipline a member of BOD is vested in a particular office or agency other than the local chief executives so that the doctrine of implication would not apply. More importantly, under Section 11 of P.D. 198 as amended, a BOD member of a water district can only be removed or disciplined for cause and such decision of the local chief executive is subject {o review and approval of the LWUA. The autonomy of the water districts may be compared to the autonomy of the local government units. ‘The President of the Philippines does not dip his finger into the governance of any local government unit but he has the power to discipline any local chief executive. In fine, the Court believes and so holds that the doctrine of implication applies to this case. The Mayor of Cebu City has the power to remove or discipline the members of the BOD of MCWD subject to review and approval of LWUA. He has the concurrent disciplining power over them with the Office of the Ombudsman and Civil Service Commission. Stated otherwise, the late defendant Mayor Labella had the power or authority to terminate the services of the plaintifi as BOD Members of MCWD. In arguing that the Mayor of Cebu City has no power to discipline a BOD member of MCWD, the plaintiffs mainly rely on the original provision of Section 1 of P.D. 198 which reads as follows: Section 6. Formation of District. - This Act is the source of authorization and power to form and maintain a district. Once formed, a district is subject to the provisions of this Act and not under the jurisdiction of any political subdivision. To form a district, the legislative body of any city, ‘municipality or province shall enact a resolution containing the following (a) The name of the local water district, which shall include the name of the city, municipality, or province, or region thereof, served by said system, followed by the words "Water District" (b) A description of the boundary of the district. In the case of a city or ‘municipality, such boundary may include all lands within the city or municipality. A district may include one or more municipalities, cities or provinces, or portions thereof. (©) A statement of intent to transfer any and all waterworks and/or sewerage facilities owned by such city, municipality or province to such district pursuant to a contract authorized by Section 31 (b) of this Title. AXxecnxx(emphasis supplied).(12) However, after a careful review of the said law, the Court finds that Section 1 of P.D. 198 had already been amended by P.D 1479, which would now state as follows: ‘Section 1. The first paragraph of Section 6 of Presidential Decree No. 198, as amended, is hereby amended to read as follows: "Sec. 6. Formation of District. This Act is the source of authorization and power to form and maintain a district. For purposes of this Act, a district shalll be considered as a quasi-public corporation performing publie service and supplying public wants. As such, a district shall exercise the powers, rights and privileges given to private corporations under existing laws, in addition to the powers granted in, and subject to such restrictions imposed, under this Act. xxx xxx xxx (©) A statement completely transferring any and all waterworks and/or sewerage facilities managed, operated by or under the control of such city, ‘municipality or province to such district upon the filing of resolution forming the district. It can be readily noticed in the amendment that the second sentence in the first paragraph of the original version of Section 6 which states “(o)nce formed, a district is subject to the provisions of this Act and not under the jurisdiction of any political subdivision.” had been deleted. The Court will now proceed to the next question, did defendant Mayor Labella observe due process when he removed the plaintiffs as members of the MCWD's BOD? The answer is in the negative. Civil service positions are classified into either 1) career service and 2) non-career service positions(Section 6, Chapter 2, Title I, Book V of the Administrative Code). Career positions are characterized by: (1) entrance based on merit and fitness to be determined as far as practicable by competitive examinations, or based on highly technical qualifications; (2) opportunity for advancement to higher career Positions; and (3) security of tenure(Section 7, Chapter 2, Title I, Book V of the Administrative Code). Positions that do not fall under the career service are considered non-career positions, which are characterized by: (1) entrance on bases other than those of the usual tests of merit and fitness utilized for the career service; and (2) tenure which is limited to a period specified by law, or which is co-terminus with that of the appointing authority or subject to his pleasure, or which is limited to the duration of a particular project for which purpose employment was made. The Non-Career Service shall include: (1) Elective officials and their personal or confidential staff: (2) Secretaries and other officials of Cabinet rank who hold their positions at the pleasure of the President and their personal or confidential staffs); (3) Chairman and members of commissions and boards with fixed terms of office and their personal or confidential staff: (4) Contractual personnel or those whose employment in the government is in accordance with a special contract to undertake a specific work or job, requiring special or technical skills not available in the employing agency, to be accomplished within a specific period, which in no case shall exceed one year, and performs or accomplishes the specific work or job, under his own responsibility with a minimum of direction and supervision from the hiring agency; and (5) Emergency and seasonal personnel(Section 9, Chapter 2, Title I, Book V of the Administrative Code; emphasis supplied). Section 11 of P.D. 198 says that the term(13) of office of a BOD member of a water district is six(6) years commencing on January 1 of odd-numbered years. Hence, as members of the MCWD’s BOD, the plaintiffs were occupying non-career positions with fixed terms of office. Section 2[3], Article IX of the 1987 Constitution states that “(n)o officer or employee of the civil service shall be removed or suspended except for cause provided by law." Section 46, Chapter 7, Title 1, Book V of the Administrative Code mandates that “(a)o officer or employee in the Civil Service shall be suspended or dismissed except for cause as provided by law and after due process. "(emphasis supplied). Among the grounds for disciplinary action are:(1) Dishonesty; (2) Oppression; (3) Neglect of duty; (4) Misconduct; (5) Disgraceful and immoral conduct; (6) Being notoriously undesirable: (7) Discourtesy in the course of official duties; (8) Inefficiency and incompetence in the performance of official duties; etc. (Section 46, Chapter 7, Title 1, Book V of the Administrative Code). It is settled that both career and non-career service employees have a right to security of tenure. All permanent officers and employees in the civil service, regardless of whether they belong to the career or non-career service category, are entitled to this guaranty; shey cannot be removed from office except for cause provided by law and after procedural due process(Government of Camarines Norte v. Gonzales, G.R. No. 185740, July 23, 2013). Regardless of the classification of the position held by a government employee covered by civil service rules, be it a career or non-career position, such employee may not be removed without just cause. An employee who belongs to the non-career service is protected from removal or suspension without just cause and non-observance of due process(Jocom v. Regalado, G.R. No. 77373, August 22, 1991). Here, there is no dispute that sometime on October 15, 2019, defendant Mayor Labella served Notices of Termination all dated October 15, 2019(see Annexes “B” to Imended Complaint) on all the five(S) members of the BOD of MCWD including the plaintiff’ informing them that he had terminated their services. He also told them that “your services are henceforth deemed terminated effective today, 15 October 2019.” It appears from the Notices of Termination that he removed them because of their gross neglect of duty or gross incompetence which resulted in the alleged poor services of MCWD. It is clear, however, that they were not given any opportunity to present their side, Defendant Mayor Labella did not bother to issue any show cause order requiring them to explain why they should not be disciplined for their alleged gross neglect of duty or gross incompetence which resulted in the poor services of MCWD. In his Answer with affirmative defenses, defendant Mayor Labella asserts that the plaintiffs were not entitled to notice and hearing prior to their removal because they could seek reconsideration or appeal their removal to the LWUA who ultimately approves the order of removal. He is mistaken. Procedural due process is that which hears before it condemns, which proceeds upon inquiry and renders judgment only after trial. It contemplates notice and opportunity to be heard before judgment is rendered affecting one's person or property(Office of the Ombudsman v. Conti, G.R. No. 221296, February We(14) 22, 2017, emphasis supplied). Thus, defendant Mayor Labella should have given them an opportunity to explain their side before removing the plaintiffs from their positions. It also appears in his Answer that defendant Mayor Labella erroneously considered the positions of the BOD members of MCWD as primarily confidential. A Position is considered to be primarily confidential when there is a primarily close intimacy between the appointing authority and the appointee, which ensures the highest degree of trust and unfettered communication and discussion on the most confidential of matters. This means that where the position occupied is already remote from that of the appointing authority, the element of trust between them is no longer predominant(Civil Service Commission v, Javier, G.R. No. 173264, February 22, 2008). Indeed, no officer or employee in the Civil Service shall be removed or suspended except for cause provided by law. The phrase "cause provided by law," however, includes "loss of confidence." It is an established rule that the tenure of those holding primarily confidential positions ends upon loss of confidence, because their term of office lasts only as long as confidence in them endures. Their termination can be justified on the ground of loss of confidence, in which case, their cessation from office involves no removal but the expiration of their term of office(Tanjay Water District v. Quinit, Jr, G.R. No. 160502, April 27, 2007). Seemingly, there is no close intimacy between the BOD members of MCWD and the Mayor of Cebu City. He is not allowed to meddle in the internal affairs, management or operation of the MCWD since it is an independent and autonomous entity. As already mentioned, the positions of the BOD members of MCWD are considered as non-career positions with fixed terms, and not primarily confidential positions. Their tenure is not co-terminus with that of the appointing authority or subject to his pleasure. In fact, they had validly remained in their positions as BOD members even after the term of Mayor Osmeiia, who appointed them as such, expired on June 30, 2019. Hence, they cannot be validly removed on the ground of loss of confidence. To reiterate, defendant Mayor Labella did not observe due process in terminating the plaintifYs’ services. Be that as it may, case law is settled that in administrative cases, a fair and reasonable opportunity to explain one’s side suffices to meet the requirements of due process. A formal or trial-type hearing is not always necessary. For the purpose of ascertaining the truth, an investigation will be conducted, during which technical rules applicable to judicial proceedings need not always be adhered to. And where the party has the opportunity to appeal or seek reconsideration of the action or ruling complained of, defects in procedural due process may be cured(Autencio v. Maitara, G.R. No. 152752, January 19, 2005). Any defect in the observance of due process is cured by the filing of a motion for reconsideration, and that denial of due process cannot be successfully invoked by a party who was afforded the opportunity to be heard/Vivo v. Philippine Amusement and Gaming Corp., G.R. No. 187854, November 12, 2013). The essence of due process is simply an opportunity to be heard, or as applied to administrative proceedings, an opportunity to seek a reconsideration of the action or ruling complained of. This requirement is met where one is given a chance to explain his side of the controversy, even if no hearing is conducted, Notice and hearing, as aLugiy BRANGH CLERK OF COURT Tir ae (15) requirement of due process, does not connote full adversarial proceedings. As mentioned, the essence of due process is simply an opportunity to be heard, or as applied to administrative proceedings, an opportunity to explain one’s side(Adiong v. Court of Appeals, G.R. No. 136480, December 4, 2001) In the case at bar, the record shows that LWUA through its Administrator and co- defendant Lapus had issued an order dated October 24, 2019 requiring cach of the plaintiff’ to submit, within five(5) days from receipt of a copy thereof, their comment on the Notice of Termination issued by defendant Mayor Labella(see Exhibits “4” to “4-B"- LWUA’s Memorandum). However, they failed to submit their comment despite having received copies of the order on November 15, 2019. Accordingly, in his letter dated December 5, 2019 addressed to defendant Mayor Labella(Exhibit 5-LWUA's Memorandum), defendant Lapus considered their right to submit their comment as being waived, terminated their services as BOD members, and directed the Interim BOD to accept nominations for the new set of MCWD’s BOD. And such decision of LWUA had Jong become final. In fact, the letter dated January 27, 2020 signed by defendant Lapus/Annex “1”-MCWD's Answer) addressed to MCWD's Acting General Manager, Stephen Yee, indicates that the appointments of Atty. Jose Daluz III, Atty. Francisco Malilong, Jr., and Miguelito Pato as new regular members of the BOD of MCWD had been approved by defendant LWUA. Obviously, LWUA, which has undeniably the power to reverse and set aside defendant Mayor Labella’s Notices of Termination, had given the plaintiffs an opportunity to explain their side of the controversy, and refute the accusations against them. Thus, the defect in the observance of due process was cured, and consequently the illegal removal of the plaintiffs from their positions as members of the BOD of MCWD was legitimized. Anent the issue as to whether LWUA has the power to review the decision of defendant Mayor Labella removing the plaintiffs as BOD members of MCWD, the Court need not discuss it since Section 11 of P.D. 198 as amended clearly provides that it has. In fact, the plaintiffs themselves admit that as part of the procedural due process, any removal of the members of the BOD of MCWD. requires the approval of LWUA(see paragraph 42 of the second Amended Complaint) Finally, inasmuch as the illegal removal of the plaintiffs from their positions as members of the BOD of MCWD due to lack of due process was legitimized, there is no basis to award damages to them. IN VIEW OF ALL THE FOREGOING, the Court hereby renders judgment dismissing the plaintiffs’ second Amended Complaint for i SO ORDERED. Cebu City, Philippines. June 30, 2023. zt S. BATHAN- FRANCISCO a4