Nunal v. Commission on Audit
REVERSALFacts
The Antecedents: Petitioner Rafael Nunal was appointed Municipal Administrator of Isabela, Basilan. He was dismissed for dishonesty, misconduct, and lack of confidence, reinstated upon appeal, and then dismissed again for lack of confidence. He filed suits for mandamus, damages, and back salaries. During the pendency of these cases, his position was abolished by resolution and ordinance. Petitioner and his wife, along with municipal officials, entered into a Compromise Agreement stipulating payment of back salaries, emoluments, bonuses, and separation pay. The Court approved this agreement. Petitioner later collected retirement benefits, though not explicitly included in the compromise. He then filed a claim for separation pay. Procedural History: The Provincial Auditor initially found the claim legal but subject to fund availability and COA ruling. The Regional Director of COA reversed this, denying the claim. The COA Central Office denied the separation pay claim and disallowed other payments made to petitioner, directing recovery of payments made for periods when he was no longer in service. This led to the instant petition for certiorari. The Petition: Petitioner sought reconsideration of the Court's Minute Resolution dismissing his petition for certiorari, alleging grave abuse of discretion by the Commission on Audit (COA). He argued the decision lacked clarity, the Municipality was bound by the compromise, and COA gravely abused its discretion in denying his separation pay claim.
Issue(s)
Whether the Municipality of Isabela, Basilan, is bound by the compromise agreement. Whether the Commission on Audit (COA) committed grave abuse of discretion in denying petitioner's claim for separation pay. Whether the Supreme Court's Minute Resolution of May 11, 1988, violated Section 14, Article VIII of the 1987 Constitution.
Ruling
The Supreme Court partially reconsidered its previous resolution. It set aside the disallowance by the COA of amounts ordered paid by the Court of First Instance of Basilan pursuant to the compromise agreement. However, it sustained the COA's disallowance of petitioner's claim for separation pay.
Ratio Decidendi
On the binding effect of the compromise agreement on the Municipality: The Court held that the Municipality of Isabela should be deemed impleaded in the case, citing Gementiza vs. Court of Appeals. This was based on the fact that the compromise agreement was signed by the Municipal Mayor in his official capacity and as Presiding Officer of the Sangguniang Bayan, the Municipal Treasurer, and the Provincial Fiscal. The Court reasoned that the officials concerned were sued in their official capacity, and the Municipality was not deprived of its day in court. Therefore, payments made pursuant to the compromise agreement, such as back salaries and accumulated leave credits, were upheld. On the denial of separation pay: The Court sustained the COA's ruling that the claim for separation pay was bereft of legal basis. The Court noted that petitioner was dismissed from service on January 29, 1981, and his position was abolished while he was no longer in service. Therefore, his separation was due to dismissal, not the abolition of the position. Consequently, Section 76 of Batas Pambansa Blg. 337, which provides for separation pay upon abolition of a position, could not be validly invoked. Furthermore, the Court pointed out that petitioner had already received retirement benefits, and granting separation pay in addition would constitute double gratuity, which is prohibited, citing Cajiuat, et al. vs. Mathay, Sr.. On the alleged violation of the Constitution: The Court clarified that its Minute Resolution of May 11, 1988, was not a "Decision" within the meaning of Section 14, Article VIII of the 1987 Constitution, which applies only to cases "submitted for decision." The mandate does not apply to an Order or Resolution refusing due course to a Petition for Certiorari. The Court also stated that the assailed Resolution did state the legal basis for dismissing the petition, thus complying with the constitutional provision. The Court reiterated that a writ of certiorari is a prerogative writ, never demandable as a matter of right, and issued only in the exercise of judicial discretion.
Main Doctrine
While a compromise agreement may stipulate for separation pay, such claim must still be subject to audit and cannot be granted if it results in double gratuity, especially when the employee has already received retirement benefits. Furthermore, separation pay under Section 76 of BP 337 is only applicable when the separation from service is directly attributable to the abolition of the position, not to a prior dismissal.