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106 Phil. 638

[ G.R. No. L-13225, November 28, 1959 ]




Manuel G.  Torres  is appealing from the decision of the Court of First Instance of Davao (Branch II) in  Special Civil Case No. 101, dismissing his petition for mandamus, seeking his reinstatement as patrolman,  on the ground that the Municipal Ordinance No. 33 of the Municipality of Malalag, Davao, creating the position to which he had been  appointed, was invalid  for lack of the  necessary approval of the Secretary of Finance.

The facts in the case are not disputed.  On September 15,1955, the Municipal Council of Malalag enacted General Appropriation Ordinance No. 33 for the fiscal year 1955-1956, and  created six additional positions for patrolman in the police force, at the same time appropriating the sum of P22440.00 for the entire police force, including the six additional positions for patrolman, as against the amount of P14,760.00 for said police force for the preceding fiscal year.   The ordinance was sent directly to the Department of Finance, but on  November 19, 1955,  the department referred the  same to the Provincial Treasurer of  Davao, who in turn referred it  to the  Municipal Treasurer  of Malalag, requesting  that  a budget analysis  and plantilla of personnel  be submitted.  On  February 21,  1956,  the Davao Provincial Treasurer returned the Ordinance to the Secretary of  Finance, recommending that the creation of six additional positions for patrolman be held in abeyance until  the. municipality could pay  the Provincial Government its obligation amounting to P6,892.20.

In the meantime, on November 15,1955, appellant Torres, a patrolman civil service eligible; was appointed by Mayor Lanzar to one  of the six  additional positions  created by Ordinance No. 33.  There is no  evidence showing that said appointment was made with the consent of the Municipal Council, as  required  by Section 2159 of the Revised Administrative Code, as amended, which reads thus:
"Appointments to  all non-elective positions in. the municipal) service shall be made by the municipal mayor by and with the consent of a majority of  all the members of the  municipal council except that  of the municipal secretary which shall be made exclusively by the mayor.  This requirement shall not however apply to the employment of laborers engaged for the performance of authorized works, nor to local employees  or laborers whose duties are connected with health work and who shall be appointed by the Chief local health officer upon recommendation of the mayor."  (Italics supplied)
On January 9,  1956,  upon the advent of the new local administration,  the  new Municipal Council passed .Resolution  No. 13, abolishing the  six  positions  of  patrolman aforementioned, including  the one then already occupied by Torres, the  reason given for the abolition  being that Appropriation Ordinance No. 33  had not been approved by the Secretary  of Finance  and also because there was a letter by the  Provincial  Treasurer's Office, advising the Municipal Council to abolish said six  positions  because the municipality of Malalag had a standing obligation of P7,029.00 as of that date.

On January 14, 1956, the new Mayor issued  an official order implementing Resolution No. 13, declaring appellant Torres one of those separated from  the service, effective on the close of  office hours on January  15, 1956.  Torres went to the Mayor, requesting that he be retained in  the service, but the Mayor told him that  he  could not do anything on the matter.   Torres next  wrote to the PCAC about his alleged illegal  dismissal, and although the PCAC sent  a representative to Davao to look into the matter, no action  was taken  on his complaint.

On June 31,  1956,  the same Municipal Council  that passed Resolution No. 13 abolishing1 the six positions  of patrolman, passed Resolution No. 76, increasing the police force of Malalag by five (one lieutenant,  two corporals, and  two  patrolmen), the  reason given  being that  "the Municipality of Malalag is now capable to pay the salaries of additional positions  in the police force as well as other positions, after paying the standing obligation of the Municipality to the provincial government."  Upon the creation  of these five additional positions in the police force, Torres again went to the Mayor, asking for his reinstatement, but his  request was denied.   So,  on July 24, 1956, Torres  initiated the present case for mandamus.  After hearing, the trial court dismissed the petition, holding in effect that the  position to which appellant Torres had been appointed did not  legally  exist, nor the amount  appropriated for it, for the reason that Appropriation Ordinance No.  33, Series of 1955, had  never been  approved by the Secretary of Finance.

To us,  the  important and  decisive question involved is whether or not Appropriation Ordinance No. 33, Series of 1955, of the Municipal Council of Malalag was valid and effective at the time that petitioner Torres was appointed to one of the six additional positions for patrolman created by said  ordinance.  After a  careful  study of this legal point,  we  agree with the trial court, presided by Judge Amador E. Gomez,, who incidentally, rendered an exhaustive  and well  prepared decision, that said Appropriation Ordinance No. 33 required the approval of the Secretary of Finance.  Section;2296 of the Revised  Administrative Code as amended by Republic Act No. 1062, in part reads as follows:
"SEC. 2296. Appropriation Ordinance. Upon receipt of the budget, the municipal council shall, on the basis thereof, enact the general appropriation ordinance, including therein all statutory and contractual  obligations  of the municipality  and  upon  enactment by the council and approved by the mayor, the ordinance  shall, on the date therein fixed for its effectivity and subject to appeal to the provincial board as hereinafter provided, be in full force and  effect: Provided however, that  if the aggregate amount so appropriated  exceeds the said  estimated receipts, then the ordinance shall be effective only when approved by the Secretary of  Finance. * * *" (Italics supplied).
It is true that under the legal provisions above-reproduced, the  approval of the Secretary of  Finance is required if the aggregate amount appropriated exceeds  the  estimated receipts.  However, it is in our opinion also  clear that the inclusion in  the said appropriation ordinance of all statutory  and contractual obligations of the. municipality is mandatory, otherwise, the  non-inclusion of said statutory and  contractual obligations and  provisions for their payment might  result in an unbalanced budget,  namely,  that the municipality would be appropriating and spending more money than  It has  or it will have during the fiscal year, the very case or situation included in the proviso, namely, the aggregate amount appropriated exceeding the estimated receipts, which require  the approval of the  Secretary of Finance for  the effectivity  of the appropriation ordinance.  As the  trial court wisely observed, failure to state in an appropriation ordinance the statutory and contractual obligations of the municipality and appropriation or provision for their payment would "violate and  ignore the essence of all appropriation measures, which  is,  that they must provide  not  only for the  contemplated expenditures  but also for the  payment of outstanding obligations." There is a similar provision of law regarding  provincial budgets, contained in Section 2120 of  the Revised Administrative Code,  as amended by Republic Act  No.  1063. In the  instructions of  the  Provincial Treasurer to all Municipal  Treasurers in the Province  of Davao,  as  contained in his Office Circular No. 517, dated April 12, 1956, regarding the effectivity of appropriation ordinances,  the following provisions appear:

"Under the provisions of Republic Acts  Nos.  1063  and 1062, provincial and municipal budgets shall be in full force and effect on the date therein mixed for their effectivity  by the provincial board and municipal council respectively, provided that:

(1) Full provisions have  been made  for  all statutory  and/or current contractual obligations;    

(2) The aggregate amount  appropriated  does  not  exceed  the receipts estimated  by the Treasurer; Therefore, if any or both of these conditions are met, the budget shall riot take effect unless approved by the Department of Finance in the manner prescribed by law," It  is true that said office circular, being dated  April 12, 1956,  was subsequent to the approval by  the Municipal Council of  Appropriation Ordinance No.  33, but  we find that said Office  Circular No. 517 was  based on  and was copied  verbatim from Provincial Circular  No.  10,  dated July 81,  1954, of the  Department of Finance, which reads as follows:   

*     *      *      *     *      *      *
"Effectivity of Budgets   

"Under  the provisions  of Republic  Acts Nos. 1063 and 1062, provincial and municipal budgets shall be in full force and effect 'on the date therein-fixed for their  effectivity by the  provincial board and  municipal council, respectively  provided  that:       

(1) Full provisions have been made for all statutory  and  or current  contractual obligations; and  

(2) The aggregate amount appropriated does not exceed the receipts  estimated by the treasurer.     

"Therefore, if any  or both of these two conditions are not met, the budget shall not take effect unless approved by the Department of Finance in the manner prescribed by law." 
The above-reproduced circular of the Department of Finance of July 31, 1954 certainly was binding on the effectivity  of municipal appropriation ordinances  passed by municipal councils, particularly, Appropriation Ordinance No.  33; which was passed in 1955.   It will be observed from this circular No. 10  that the approval of the Department of Finance is required not only  when the  aggregate; amount appropriated  exceeds the estimated receipts' but also when there  is failure to provide for the payment of all  statutory and current contractual  obligations of the municipality.  This circular of the Department of Finance may be  considered  as a Contemporaneous interpretation of Section 2296  of the  Revised Administrative Code, as amended, by the Department concerned,  and constitutes persuasive authority to which we agree.   We believe that when a  municipality has  standing obligations,  statutory or contractual, it should state the same in its appropriation ordinance and provide for their payment, and if the municipality concerned fails to  do so, it is reasonable that the Department of Finance take a  hand in the matter and make suggestions or impose conditions for the payment or liquidation of said obligation before the appropriation ordinance becomes  effective, which effectivity depends on the approval by the Department of Finance.

Having arrived at this conclusion, we deem it unnecessary to determine the effect of Resolution No. 13 of January  9,  1956, abolishing the  six positions of patrolman, including the one then occupied by petitioner Torres, for the reason that  if  the  appropriation ordinance creating said additional  positions did  not take effect  because  it was never  approved by the  Secretary of  Finance, and consequently, said six additional positions did not legally exist, then  there was nothing  to abolish.

In conclusion,  we hold that the position to which petitioner Torres was appointed as patrolman did not exist at the time of his appointment on November 15, 1955.  Consequently, there was no position to which he could be reinstated.  Furthermore, as already stated,  petitioner  failed to prove that he was legally appointed with the consent of the municipal council, which consent is necessary for a valid appointment by the Mayor.  In a case of mandamus, the petitioner should establish a clear right, not  one  based on a mere presumption of the law that in the absence of evidence to the  contrary, his appointment was  consented to by the municipal council.  The copy of his appointment, Exhibit  "B", shows neither approval  of the  municipal council nor that of the Commissioner  of  Civil Service. 

However, considering the circumstances surrounding the present case, we cannot help  but sympathize with the petitioner.   He  is a civil  service eligible, was  appointed to a position which he thought existed, accepted  the appointment and occupied  the position. Legally, there was no such position, and therefore, there could have been no valid  appointment.  However,  the  Municipal Council  of Malalag  later created five positions  in its police force.  Why  petitioner,  considering  his  civil  service  elegibility was not appointed to one of said positions,  even as patrolman, at least to make amends for the error  of the municipal council and the Mayor and for the trouble caused to the petitioner, is not explained.  It might  be a  good idea and an  act  of simple justice if the Mayor or the council could appoint petitioner to one of said five positions in the police force if not yet filled, or  else  accord  him preference in appointment to the next vacancy.  But  this is  a mere idea or suggestion,  not  an order.

In view  of the foregoing,  the  decision  appealed  from is  hereby affirmed.  

No costs.  We deem  it unnecessary to discuss and determine the other questions  raised in the appeal.

Paras, C, J., Bengzon, Padilla, Bautista  Angela, Labrador, Endencia, Barrera,  and Gutierrez David, JJ.,  concur.