October 3, 2023

A Benguet court has dismissed the complaint of the Cooperative Bank of Benguet, Inc. (CBBI) against the municipality of La Trinidad, Benguet over its purchase of the once controversial blackhole machine for lack of merit. 

In a June 16 decision, Benguet Regional Trial Court Branch 63 Judge Jennifer Humiding said the contracts of loan in the principal amount of P18 million entered into by former La Trinidad mayor Gregorio Abalos, Jr. and the CBBI is violative of the provisions of the Local Government Code and existing rules and regulations. 

CBBI has filed the complaint against the municipality over the latter’s unpaid loan of P18M it used to purchase the zero-waste technology known as the “black hole machine” in 2011. 

The court also absolved the municipality from the responsibility to pay the loan because it was an ultra vires act or done beyond the scope of the authority of then mayor Abalos.

While the court finds that the super black hole project was operational at the start but ceased to operate when then mayor Edna Tabanda assumed office, it is not relevant to support the claim of CBBI for a sum of money against the municipality.

The court said the contract of loan entered into between the CBBI with the municipality is not an ordinary contract of loan.

It said the municipality cannot be held liable for the loans because it only backed the loans through a resolution authorizing the then mayor Abalos to represent and sign on behalf of the municipality to obtain the financial assistance from the CBBI in the amount of P18M.

The authorization for the local chief executive does not need to be in an ordinance, but the contract of loan must be in a law or an ordinance.

 “The subsequent Resolution 228-2011 acknowledging and recognizing the scope, objective, and commitment of the ‘bridging loan assistance offered by CBBI to the municipality in full support to the latter’s solid waste management program,’ is not the law or ordinancecontemplated by the Local Government Code. This resolution was merely an expression of a sentiment,” the court decision stated.

In the absence of a law or ordinance, the court said the loan with CBBI and the purchase of the zero waste or super blackhole technology where Abalos was the signatory are void.

“Consequently, the act of mayor Abalos in entering into a contract of loan with CBBI is ultra vires,” the decision stated.

The court also said the disbursement of the loan proceeds of Abalos without any law or ordinance to support it, does not impose on the municipality the obligation to pay for the loan.

The court added that claims and counter-claims for damages by the CBBI were denied for lack of factual and legal basis. – Ofelia C. Empian