G.R. No. 143596 - Leynes vs. Commission on Audit

Case Summary (G.R. No. 143596)

Factual Background

Judge Leynes received salary and RATA from the Supreme Court. Beginning 1984 he also received a monthly local allowance of P944 from Naujan municipal funds. On May 7, 1993 the Sangguniang Bayan of Naujan enacted Resolution No. 101 increasing his monthly local allowance to P1,600 effective May 1993. The municipal supplemental budget and the 1994 annual municipal budget providing for this allowance were approved by the Sangguniang Panlalawigan of Oriental Mindoro and the Office of Provincial Budget and Management. Provincial Auditor Dalisay directed cessation of payments and refund of amounts paid on Feb. 17, 1994, opining that the municipality could not grant RATA in addition to national RATA, citing Section 36 of RA 7645 and NCC No. 67. COA Regional Director Ong upheld the provincial auditor and added that Resolution No. 101 failed to comply with Section 3 of LBC No. 53. COA later issued a disallowance; payments were made to petitioner only from May 1993 to January 1994.

Procedural History

Petitioner appealed the provincial auditor’s opinion to the COA Regional Director, then to the Commission on Audit. COA issued a decision on Sept. 14, 1999 affirming the Regional Director’s resolution and declaring SB Resolution No. 101 null and void for failing to comply with LBC No. 53 and holding that a national official may not collect RATA from more than one source. Petition for certiorari under Rule 65 was filed in the Supreme Court; petitioner’s motion for reconsideration before COA was denied on May 30, 2000. The Supreme Court issued the decision reviewed here.

Issues Presented

Validity of SB Resolution No. 101, Series of 1993, granting additional allowance (increasing RATA to P1,600) to the Municipal Trial Judge of Naujan.
Whether municipal governments’ power to grant additional allowances and benefits to national government employees is explicit and unequivo cal under RA 7160 (Sections 17, 22, 447).
Whether DBM can restrict municipal legislative discretion via budget circulars.
Whether RA 7160 Section 447 was repealed or modified by RA 7645 and the GAA of 1993.
Whether petitioner was entitled to receive the allowance under SB Resolution No. 101.

Position of COA and DBM Instruments Relied Upon

COA contended the municipality could not validly grant RATA in addition to national RATA because: (1) NCC No. 67 required RATA to be paid from the agency where the official draws salary and stated that “no one shall be allowed to collect RATA from more than one source”; (2) Section 36 of RA 7645 required RATA to be paid from programmed appropriations of the officials’ national offices; and (3) LBC No. 53 prohibited LGUs from granting allowances that are similar to those granted by the national government. COA applied these instruments to sustain its disallowance.

Position of Petitioner

Petitioner maintained that RA 7160 expressly and unequivocally empowers LGUs to provide additional allowances to judges “when the finances of the municipal government allow,” and that no other statutory restriction was imposed by the Local Government Code. Petitioner argued DBM circulars cannot amend or curtail a substantive statutory grant of power and that budget circulars must conform to, not modify, the statute.

Legislative and Administrative History of LGU Allowances to Judges

LOI No. 1418 (1984) allowed provincial, city, and municipal governments to pay additional allowances to judges out of available local funds (with monetary caps then). DBM Circular No. 91-7 (1991) permitted continuance of allowances judges were receiving as of June 30, 1989, subject to voluntariness, availability of local funds, non-diminution of compensation, co-terminosity with incumbent judges, and termination upon transfer. RA 7160 (Local Government Code, effective Jan. 1, 1992) expressly incorporated the power for LGUs to grant additional allowances to national officials, including judges (Sections 447, 458, 468). DBM issued LBC No. 55 (Mar. 15, 1994) attempting to set maximum amounts LGUs may grant; LBC No. 53 (Sept. 1, 1993) set implementing conditions, including a paragraph (e) forbidding LGUs to grant allowances similar to those given by the national government. The Court had earlier declared LBC No. 55 invalid in Dadole v. COA (Dec. 3, 2002) for overstepping DBM authority and unduly restricting LGU autonomy.

Controlling Legal Principles

Administrative circulars cannot supersede, abrogate, modify, or nullify statutes; statutes are superior to administrative issuances.
Repeal by implication is disfavored; a general law does not repeal a special law (generalia specialibus non derogant). RA 7160 is a special law on LGUs; GAAs are general.
Statutory provisions on local autonomy (1987 Constitution, Sections invoked) and the Local Government Code must be read to preserve LGU discretion consistent with the Code’s text and purpose.

Analysis — NCC No. 67 and RA 7645

The Court analyzed NCC No. 67’s prohibition “no one shall be allowed to collect RATA from more than one source” in context. Read as a whole, NCC No. 67 aims to prevent dual collection of RATA from more than one national agency budget — i.e., to prevent a national official from drawing RATA from two national agencies when detailed. The sentence immediately follows the rule that RATA shall be paid from the appropriations of the national agency where the official draws salary. Therefore, the DBM prohibition targets multiple national agency sources and does not extend to local government funds. RA 7645’s Section 36 likewise prescribes that RATA of national officials be paid from programmed appropriations of their national offices and that officials on detail be paid from their parent agencies. RA 7645, being a general appropriation act, did not expressly repeal or amend RA 7160; absent clear legislative intent to repeal, the special provisions of RA 7160 remain controlling for LGU powers.

Analysis — LBC No. 53 and Its Section 3(e)

Section 3 of LBC No. 53 outlined preconditions for LGUs to grant allowances, including budgetary certifications and devolution requirements; paragraph (e) prohibited LGUs from granting allowances that are also granted by the

Case Syllabus (G.R. No. 143596)

Citation and Court

Full citation: 463 Phil. 557 EN BANC, G.R. No. 143596, December 11, 2003.
Decision authored by Justice Corona.
Case decided en banc.
Concurring justices: Davide, Jr., C.J., Puno, Vitug, Panganiban, Quisumbing, Ynares‑Santiago, Sandoval‑Gutierrez, Carpio, Austria‑Martinez, Carpio‑Morales, Callejo, Sr., Azcuna, and Tinga, JJ.

Procedural Posture and Relief Sought

Petition for certiorari under Rule 65 in relation to Section 2, Rule 64 of the Rules of Court.
Petitioner seeks reversal and setting aside of COA decision dated September 14, 1999, which affirmed COA Regional Director Gregoria S. Ong’s resolution (March 29, 1994) and Provincial Auditor Salvacion M. Dalisay’s opinion (October 19, 1993).
Relief requested by petitioner: validation of Sangguniang Bayan Resolution No. 101 (1993) of Naujan granting a P1,600 monthly allowance and correction of COA disallowance which stopped payment and required refund of sums paid.

Factual Antecedents

Petitioner Tomas C. Leynes: formerly sole presiding judge of the Municipal Trial Court of Naujan, Oriental Mindoro; at time of decision presiding judge, Regional Trial Court, Calapan City, Branch 40.
Petitioner’s regular salary and representation and transportation allowance (RATA) were drawn from the Supreme Court budget.
Since 1984 petitioner received a monthly allowance of P944 from the local funds of the Municipality of Naujan (COA later mischaracterized this as RATA from the Supreme Court).
On March 15, 1993, Sangguniang Bayan of Naujan sought opinion from the Provincial Auditor and Provincial Budget Officer on budgetary limits for granting a monthly allowance to the municipal judge.
On May 7, 1993, Sangguniang Bayan unanimously approved Resolution No. 101 increasing petitioner’s monthly allowance from P944 to P1,600 effective May 1993 (an increase of P656).
The municipal government approved a supplemental budget pursuant to that resolution; Sangguniang Panlalawigan and the Office of Provincial Budget and Management of Oriental Mindoro likewise approved the supplemental budget.
In 1994 the Municipality again provided for the P1,600 monthly allowance in its annual budget, approved by the Sangguniang Panlalawigan and Office of Provincial Budget and Management.
On February 17, 1994, Provincial Auditor Salvacion M. Dalisay directed the municipal officials to stop payment of the P1,600 monthly allowance and to require refund of amounts paid, opining that the municipality could not grant RATA to petitioner in addition to RATA received from the Supreme Court.
Based on the Provincial Auditor’s directive, COA Regional Director Gregoria S. Ong upheld the disallowance and added that Resolution No. 101 failed to comply with Section 3 of DBM Local Budget Circular No. 53 (September 1, 1993).
A formal disallowance was issued; petitioner received the P1,600 only for May 1993 to January 1994.
COA, in its September 14, 1999 decision, affirmed the regional director and provincial auditor; petitioner’s motion for reconsideration was denied on May 30, 2000, prompting the present petition.

Assigned Issues / Petitioner’s Enumerated Assignments of Error

I: Validity of Resolution No. 101, Series of 1993 of Naujan which increased the municipal trial judge’s monthly allowance to P1,600 effective 1993.
II: Whether municipal governments’ power to grant additional allowances and other benefits to national government employees stationed in their municipality is explicit and unequivocal under the Local Government Code of 1991 (particularly Section 447 in relation to Sections 17 and 22).
III: Whether the Department of Budget and Management (DBM) can, via budget circulars, restrict a municipal government from exercising its legislative power to provide additional allowances and benefits to national employees assigned to the municipality, so long as municipal finances allow.
IV: Whether Section 447(a)(1)(xi) of the Local Government Code of 1991 was expressly or impliedly repealed or modified by Republic Act No. 7645 (General Appropriations Act of 1993).
V: Whether petitioner was entitled to receive the additional allowances by virtue of Resolution No. 101, Series of 1993.

Positions of the Parties

Commission on Audit (COA) / Respondents:
- Opposed the grant of P1,600 monthly allowance to petitioner, arguing municipality cannot grant RATA in addition to RATA from the Supreme Court.
- Relied on DBM National Compensation Circular No. 67 (NCC No. 67, Jan 1, 1992) stating RATA of national officials shall be payable from the appropriations of the agency where they draw salary and that no one shall collect RATA from more than one source.
- Relied on Section 36 of RA 7645 (GAA 1993) providing RATA payable from programmed appropriations of respective national offices.
- Argued Sangguniang Bayan Resolution No. 101 failed Section 3 of DBM Local Budget Circular No. 53 (LBC No. 53, Sept 1, 1993) preconditions, particularly paragraph (e) forbidding LGUs from granting allowances if similar allowances are granted by the national government.
Petitioner Judge Tomas C. Leynes:
- Asserted RA 7160 (Local Government Code of 1991) expressly and unequivocally empowers LGUs to appropriate funds and provide additional allowances and benefits to judges when municipal finances allow (Section 447(a)(1)(xi)).
- Contended the only legislative condition is that municipal finances allow; no further restrictions appear in the Code.
- Argued DBM cannot amend or modify a substantive statute via administrative budget circulars; circulars must conform to the law, not change it.
Additional note: Solicitor General manifested support for petitioner judges in related context (noted in the case history), explaining DBM’s and COA’s powers under RA 7160.

Relevant Legislative and Administrative Instruments Cited

Letter of Instruction (LOI) No. 1418 (July 18, 1984) which permitted provincial, city and municipal governments to pay additional allowances to members and personnel of the J