G.R. No. 39842; March 28, 1934
IMUS ELECTRIC COMPANY, INC., plaintiff-appellant, vs. THE MUNICIPALITY OF IMUS, PROVINCE OF CAVITE, ET AL., defendants-appellants.

FACTS

The Imus Electric Company and the Municipality of Imus entered into a 10-year contract on June 11, 1931, for the company to furnish street lighting service. The municipality later refused to pay, arguing the contract was void for violating sections 607 and 608 of the Revised Administrative Code. These sections required that municipal contracts involving the expenditure of sums over P2,000 must have an appropriation ordinance covering the amount and a certification from the provincial treasurer that funds are available. The municipality contended that since the total estimated cost for the 10-year contract was P24,300, the required prior appropriation and certification were lacking, rendering the contract invalid.

ISSUE

Whether the contract for street lighting service is valid despite the lack of a prior appropriation ordinance covering the total estimated cost for its entire 10-year term.

RULING

Yes, the contract is valid and binding. The Supreme Court ruled that the contract did not violate sections 607 and 608 of the Revised Administrative Code. The municipality’s obligation was to pay monthly (P202.50) for the electric current after it was furnished, not in advance for the entire contract period. Therefore, the required appropriation need only cover a reasonable period, such as one month or one year, not the total sum for the entire 10-year term. The contract did not involve an immediate expenditure exceeding P2,000 requiring a prior appropriation for the full amount. The Court reversed the lower court’s judgment and declared the contract valid.

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