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RTC JUDGE MERCEDES G. DADOLE v. COMMISSION ON AUDIT

FACTS:

The petitioner judges, stationed in Mandaue City, received monthly allowances of P1,260 each in 1986, which was increased to P1,500 each in 1991. In 1994, the Department of Budget and Management (DBM) issued Local Budget Circular No. 55 (LBC 55) stating that additional honorarium should not exceed certain amounts. The Mandaue City Auditor reduced the judges' allowances and required them to reimburse the excess amount received. The judges protested and filed a motion for reconsideration with the Commission on Audit (COA), but their motion was denied. On November 27, 1995, Executive Judge Mercedes Gozo-Dadole filed a motion for reconsideration. The petitioner judges then filed a petition for certiorari, questioning the statutory and constitutional basis of the City of Mandaue to provide additional allowances to judges. They argued that LBC 55 infringes on the local autonomy of Mandaue City, lacks statutory basis, and was not properly published. The Solicitor General supported the petitioner judges, while the COA argued that the authority of the city government to provide allowances to judges is not absolute and subject to limitations imposed by Congress. The court ruled in favor of the petitioner judges and declared LBC 55 null and void.

The case involves the Local Government of Makati City and the Metropolitan Manila Development Authority (MMDA). Makati City enacted an ordinance known as LBC 55, which aimed to regulate trucks and heavy commercial vehicles within its jurisdiction. The MMDA questioned the validity of LBC 55, claiming that it encroached upon its authority and violated the principle of uniformity in the regulation of traffic. The MMDA argued that its own traffic rules and regulations, particularly its Traffic Code, should prevail over the local ordinance. Makati City contended that LBC 55 was enacted in the exercise of its autonomy as a local government unit and that it had the power to regulate traffic within its boundaries. The case reached the Supreme Court for resolution.

ISSUES:

  1. Whether LBC 55 of the DBM is void for going beyond the supervisory powers of the President and for not having been published.

  2. Whether the yearly appropriation ordinance enacted by the City of Mandaue that provides for additional allowances to judges contravenes the annual appropriation laws enacted by Congress.

  3. Whether the circular issued by the Department of Budget and Management (DBM) imposing a maximum limit on additional allowances granted to judges is valid.

  4. Whether the lack of publication of the circular renders it void.

  5. Whether or not Mandaue City used its IRA to pay for the additional allowances of judges.

  6. Whether or not the provisions in the ordinance granting additional allowances to judges are legal.

RULING:

  1. The Court ruled in favor of the petitioner judges. On the first issue, the Court declared LBC 55 to be null and void. The Court recognized that while local government units have autonomy, this autonomy is subject to the power of control by Congress and the power of supervision by the President. The Court emphasized that the President's supervisory power does not include any restraining authority over local government units, but merely oversight to ensure that they are acting within the scope of their authority. Consequently, any directive that seeks to alter the decision of a local government unit on local affairs is a patent nullity.

  2. On the second issue, the Court held that the yearly appropriation ordinance enacted by the City of Mandaue providing for additional allowances to judges does not contravene the annual appropriation laws enacted by Congress. The Court noted that the General Appropriations Acts of 1994 and 1995 did not specifically mention the disbursement of additional allowances to judges as one of the allowable uses of the Internal Revenue Allotment (IRA), from which Mandaue City obtained the funds for the said allowances. However, the Court ruled that the provisions of the ordinance granting additional allowances to judges are valid, as they promote a just compensation for judges and are not contrary to law.

  3. The circular issued by the DBM imposing a maximum limit on additional allowances granted to judges is invalid. The provision in the law that serves as the legal basis for granting additional allowances to judges does not authorize setting a definite maximum limit. Therefore, the DBM exceeded its power by imposing a prohibition that did not correspond with the law it sought to implement.

  4. The lack of publication of the circular renders it void. Administrative rules and regulations must be published if their purpose is to enforce or implement existing law pursuant to a valid delegation. In this case, the circular is not a mere interpretative or internal regulation but one that substantially affects the income of government workers. Therefore, publication is required for it to be effective and enforceable.

  5. The Court held that respondent COA failed to prove that Mandaue City used its IRA to spend for the additional allowances of judges. There was no evidence presented showing the breakdown of the expenses of the city government and the funds used for said expenses. Therefore, it cannot be concluded that the additional allowances were taken from the IRA and not from the city's own revenues.

  6. The Court ruled that the provisions in the ordinance granting additional allowances to judges stationed in Mandaue City are legal. The DBM did not conduct a formal review or order a disapproval of Mandaue City's appropriation ordinances in accordance with the procedure outlined by Sections 326 and 327 of RA 7160. As such, the ordinance granting additional allowances to judges was deemed to have been properly reviewed and deemed to have taken effect.

PRINCIPLES:

  • Local government units have autonomy, but this autonomy is subject to the power of control by Congress and the power of supervision by the President.

  • The supervisory power of the President over local government units does not include any restraining authority, but merely oversight to ensure that they are acting within their authority.

  • The President or any of his or her alter egos cannot interfere in local affairs of a local government unit as long as the unit acts within the parameters of the law and the Constitution.

  • Any directive by the President or his or her alter egos seeking to alter a law-conforming judgment on local affairs is a patent nullity.

  • Just compensation for judges is protected under the Constitution and a valid appropriation ordinance providing for additional allowances to judges does not contravene the annual appropriation laws enacted by Congress.

  • The finances of a city government may allow the grant of additional allowances higher than the prescribed limit if the revenues of the city exceed its annual expenditures.

  • Administrative rules and regulations must be published if their purpose is to enforce or implement existing law pursuant to a valid delegation.

  • Prior publication of laws and regulations is required to inform the public of their contents and to protect the rights and interests of individuals affected by them.

  • The burden of proof rests on the party asserting a fact or rights necessary to establish its claim or defense.

  • The DBM must conduct a formal review or order the disapproval of appropriation ordinances within 90 days from receipt of copies of such ordinance. Failure to do so would result in the ordinance being deemed to have been properly reviewed and deemed to have taken effect.