G.R. No. 231120 - Herrera vs. Mago

Case Summary (G.R. No. 231120)

Factual Background

On May 15, 2013, the DBM issued Local Budget Circular No. 103 granting an increase in Representation and Transportation Allowances chargeable to the LGUs and retroactive to January 1, 2013, subject to the forty-five percent to fifty-five percent limitation on personal services under Section 325(a) of RA 7160. The Sangguniang Bayan of Vinzons, Camarines Norte enacted Supplemental Budget No. 21-2013 and Appropriation Ordinance No. 02-2013 on August 12, 2013 appropriating P4,136,512.83 to cover RATA increases for January to June 2013, which Mayor Agnes Diezno-Ang partially vetoed insofar as it exceeded the forty-five percent statutory limit. The Sangguniang Bayan overrode the veto on October 14, 2013.

Disbursement to Former Councilors

On December 25, 2013, former councilor Enrique Palacio, Jr. requested release of his RATA differential for January to June 2013. Radames F. Herrera, then Vice-Mayor, instructed Municipal Accountant Leonilo Pajarin to prepare payrolls not only for Palacio but also for three other former councilors. Pajarin, Municipal Budget Officer Raul Rigodon, and Municipal Treasurer Cynthia Jimenez each expressed reservations or refused to sign the obligation request and disbursement voucher on grounds that the four former councilors were no longer in active service and thus not entitled to the differential under Section 106 of PD 1445 and Section 454 of RA 7160, and that the appropriation exceeded the personal services limit. Despite those objections, Obligation Request No. 713-12-13-2722 for P76,800.00 was released and Disbursement Voucher No. 1002014030061 for P76,800.00 was prepared and signed solely by petitioner in his capacity as agency head, resulting in payment to the four former councilors.

Review by Sangguniang Panlalawigan and COA Action

On review, the Sangguniang Panlalawigan of Camarines Norte declared Supplemental Budget No. 21-2013 and Appropriation Ordinance No. 02-2013 inoperative to the extent they exceeded the forty-five percent personal services limitation. The Commission on Audit, Daet issued a Notice of Disallowance dated October 14, 2014 disallowing P76,800.00. The four former councilors and petitioner were directed to return the amount, which they did.

Administrative Complaint and Ombudsman Proceedings

On January 9, 2015, respondents filed a Complaint-Affidavit with the Office of the Ombudsman, accusing petitioner of grave abuse of authority, gross ignorance of law, conduct prejudicial to the best interest of the service, and violation of rules on disbursement of public funds for facilitating the release of RATA differentials despite the expressed objections of municipal officers. Petitioner denied wrongdoing, asserted good faith belief in the entitlement of the former councilors, and alleged political motivation. He maintained that municipal officers voluntarily signed documents and that funds were available; when COA disallowed the payment the amounts were returned.

Decision of the Ombudsman

By Decision dated October 2, 2015, the Office of the Ombudsman found petitioner administratively liable for grave misconduct and conduct prejudicial to the best interest of the service, and imposed the penalty of dismissal from the service with accessory penalties, citing petitioner’s interference with the release of funds despite objections, the absence of required signatures of the municipal accountant and treasurer on the disbursement voucher, and his manifest intent to violate the law. The Ombudsman ordered implementation of the decision pursuant to its rules and related administrative orders. Petitioner’s motion for reconsideration was denied by Joint Order dated January 18, 2016.

Proceedings before the Court of Appeals

Petitioner elevated his challenge to the Court of Appeals, principally asserting good faith and political motivation, and that he did not compel municipal officers to sign. By Decision dated October 24, 2016, the Court of Appeals affirmed the Ombudsman’s factual findings and administrative penalties, reasoning that Ombudsman findings supported by substantial evidence merit great respect and finality. The appellate court found that petitioner violated the mandatory procedure in Section 344 of RA 7160 requiring certification of appropriation by the local budget officer, obligation by the local accountant, and certification of availability of funds by the local treasurer before any disbursement. The court held that petitioner could not successfully invoke good faith given the municipal officers’ explicit objections and refusals to sign, and concluded that petitioner’s conduct constituted both grave misconduct and conduct prejudicial to the best interest of the service. The Court of Appeals denied petitioner’s motion for reconsideration on April 7, 2017.

The Present Petition and Primary Contentions

Petitioner invoked the discretionary appellate jurisdiction of the Supreme Court under Rule 45, Revised Rules of Court and argued principally that his reelection on May 9, 2016 condoned the alleged prior misconduct under the condonation doctrine, that the Supreme Court’s abandonment of that doctrine in Carpio-Morales v. Court of Appeals should have only prospective application and thus should not affect him, and that he acted in good faith without malice, ill motive, or corruption. Respondents filed a manifestation that they would no longer file a comment.

The Court’s Analysis on the Condonation Doctrine

The Court reviewed the history of the condonation doctrine beginning with Pascual v. Provincial Board of Nueva Ecija and the later abandonment of the doctrine in Carpio-Morales v. Court of Appeals, where this Court declared that reelection does not automatically imply condonation. The Court reiterated that the abandonment of the condonation doctrine was declared prospective. The Court applied the line of cases including Office of the Ombudsman v. Vergara and Crebello v. Ombudsman concerning the prospective effect of Carpio-Morales, and concluded that petitioner could not avail himself of the condonation doctrine because his reelection occurred on May 9, 2016, a date within the prospective application period of Carpio-Morales and after the pivotal dates identified for prospective effect.

The Court’

Case Syllabus (G.R. No. 231120)

Parties and Procedural Posture

Radames F. Herrera was the petitioner who served as Vice-Mayor of the Municipality of Vinzons, Camarines Norte and who filed this petition for review on certiorari under Rule 45, Rules of Court.
Noel P. Mago, Simeon B. Villacrusis, and Jose R. Asis, Sr. were the respondents who initiated the administrative complaint before the Office of the Ombudsman.
The Office of the Ombudsman rendered a Decision dated October 2, 2015 finding petitioner administratively liable and meting the penalty of dismissal with accessory penalties, and denied reconsideration on January 18, 2016.
The Court of Appeals in CA-G.R. SP No. 144741 affirmed the Ombudsman by Decision dated October 24, 2016 and denied reconsideration by Resolution dated April 7, 2017.
The petition sought relief from the Supreme Court to set aside the Court of Appeals' Decision and Resolution.

Key Factual Allegations

The Department of Budget and Management issued Local Budget Circular No. 103 on May 15, 2013 increasing RATA payments retroactive to January 1, 2013 and subject to the forty-five percent to fifty-five percent personal services limitation under Section 325(a) of Republic Act No. 7160.
The Sangguniang Bayan of Vinzons passed Supplemental Budget No. 21-2013 and Appropriation Ordinance No. 02-2013 to appropriate P4,136,512.83 for RATA increases for January to June 2013.
The municipal mayor partially vetoed the appropriation to the extent it exceeded the forty-five percent limit, and the Sangguniang Bayan overrode the veto by Resolution No. 34-2013 dated October 14, 2013.
On December 25, 2013 petitioner instructed Municipal Accountant Leonilo Pajarin to prepare payrolls for "RATA differentials" for four former councilors who were no longer in active service.
The municipal accountant, municipal budget officer, and municipal treasurer each expressed reservations or refused to sign the obligation request and disbursement voucher for the four former councilors, but petitioner signed the disbursement voucher as agency head, and P76,800.00 was released to the four former councilors.
The Sangguniang Panlalawigan later declared the supplemental budget inoperative for exceeding the statutory limit and the Commission on Audit issued a Notice of Disallowance dated October 14, 2014 requiring repayment, which the recipients effected.

Statutory and Regulatory Framework

Section 344, Local Government Code prescribed that no local money shall be disbursed unless the local budget officer certified to the existence of appropriation, the local accountant obligated the appropriation, and the local treasurer certified to the availability of funds.
Section 325(a), Republic Act No. 7160 established the forty-five percent limitation on personal services expenditure.
Section 106, Presidential Decree No. 1445, and Section 454, RA 7160 were invoked by municipal officers to assert that former councilors were not entitled to RATA differentials while not in active service.
The Office of the Ombudsman applied Administrative Order No. 07 as amended by Administrative Order No. 17 and invoked sanctions provided under Section 10, Rule III thereof in relation to Section 25 of Republic Act No. 6770.
Sections 49 and 50, Revised Rules on Administrative Cases in the Civil Service governed imposition of