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DISSENTING OPINION
KAPUNAN, J.:
I took a hard look at the facts and issues presented herein, but with all due respect, I find myself unable to agree with the majority opinion.
Let me revisit the antecedents that brought the instant case to the fore.
I
In 1994, Ordinance No. 0168, S. 1994, was enacted by the Sangguniang Panlungsod (SP) of Caloocan City authorizing the Mayor of Caloocan City to initiate expropriation proceedings for the acquisition of Lot 26 of the Maysilo Estate which is covered by TCT No. T-77013 and registered in the name of CLT Realty Development Corporation. The intended acquisition was to be used for low cost-housing, an integrated bus terminal, parks and playgrounds and related support facilities and utilities. The ordinance appropriated P35,997,975.00 representing 15% of the fair market value of the property sought to be expropriated at that time.1
Because of a brewing territorial dispute involving Lot 26, CLT Realty filed an action for interpleader before the Regional Trial Court (RTC) of Caloocan City on August 6, 1997, praying that the City of Caloocan and the Municipality of Malabon be ordered to litigate their conflicting claims over the right to collect real estate taxes over Lot 26 and to restrain the said local government units from assessing and collecting real property taxes from CLT Realty.2
On December 11, 1997, the SP of Caloocan City passed Ordinance No. 0246, S. 1997 amending and supplementing some provisions of Ordinance No. 0168, S. of 1994. As amended, the enactment provided that the property to be expropriated shall be used for low-cost housing for the poor and the landless, integrated bus terminal and commercial complex, integrated food terminal complex including warehouses, public market and slaughter house and other related facilities, parks and playgrounds and other support facilities. The SP likewise increased the appropriated amount of P35,997,975.00 to P39,352,047.75 which represented 15% of the fair market value of Lot 26 at that time. On January 7, 1997, petitioner Mayor Reynaldo Malonzo approved Ordinance No. 0246, S. 1997.3
On March 23, 1998, the City of Caloocan initiated a complaint for expropriation against CLT Realty before the RTC of Caloocan City for the acquisition of Lot 26. The City prayed for the issuance of a writ of possession immediately upon its filing of the complaint and after its deposit of an amount equivalent to the assessed value of subject property.4
On April 7, 1998, the City Legal Officer informed the City Mayor about the interpleader case filed by CLT Realty and recommended that the expropriation case filed by the city against CLT Realty be cancelled and/or abandoned.
Meanwhile, the SP passed the citys annual budget and appropriated therein, among other things, the amount of Fifty Million (P50,000,000,00) Pesos for Expropriation of Properties.5
On June 4, 1998, the Vice-Mayor wrote the City Mayor requesting for the immediate repair and renovation of the offices of the incoming councilors, as well as the hiring of additional personnel and the retention of those currently employed in the offices of the councilors. The City Mayor endorsed the letter to the City Treasurer who in turn manifested in a letter-memorandum to the Mayor that "since the expropriation of the CLT Property is discontinued, the appropriation for expropriation of Fifty Million Pesos (P50 M) can be reverted for use in a supplemental budget."6
On July 7, 1998, the SP of Caloocan City enacted Ordinance No. 0254, S. 1998 entitled "AN ORDINANCE PROVIDING PAYMENTS OF APPROVED ITEMS IN THE SUPPLE MENTAL BUDGET NO. 1 CALENDER YEAR 1998 AND APPROPRIATING CORRESPONDING AMOUNT WHICH SHALL BE TAKEN FROM THE GENERAL FUND (Reversion of Appropriation-Expropriation of Properties)."
On July 8, 1998, petitioner Mayor approved Ordinance No. 0254. The ordinance appropriated the amount of P39,343,028.007 for the payment of lump sum appropriation for emergency employees, appropriation for additional cash gift of all city officials and employees, lump sum appropriation for part time instructors for the Caloocan City Polytechnic College and for the repair and maintenance of government facilities.
On July 15, 1998, Eduardo Tibor, as a taxpayer of the City of Caloocan, filed a complaint for dishonesty, misconduct in office and abuse of authority against petitioners before the Department of Interior and Local Government (DILG). The complaint reads:
On or about July 7, 1998, in Caloocan City, Philippines, and within the jurisdiction of the Honorable Office, respondents HON. OSCAR MALAPITAN in his capacity as Presiding Officer of the Sangguniang Panlunsod of Caloocan City, acting upon prior instructions from HON. REYNALDO O. MALONZO, City Mayor of Caloocan City, conspiring and confederating with his co-respondents City Councilors of Caloocan City, did then and there, passed a resolution/ordinance enacting a supplemental budget realigning the budget ordinance of Caloocan City, knowing pretty well that they are without authority to do so on account of legal constraints.8
Pursuant to Section 61 (a) of R.A. No. 7160, the complaint was endorsed by the DILG to the Office of the President (OP) on July 16, 1998. The administrative complaint was docketed as O.P. Case No. 98-H-8520. On September 1, 1998, the Office of the President, through Executive Secretary Ronaldo Zamora, directed petitioners to submit their verified answers to the administrative complaint.9
On October 15, 1998, petitioners filed their consolidated answer10 to the aforesaid complaint alleging, among others things, in their Counter Statement of Facts that:
xxx
K. On account of this unexpected turn of events, the expropriation proceedings earlier filed by the City and for which an allocation of P39,352,047.75 out of the P50 Million appropriation for expropriation of properties alloted in the 1998 Annual Budget had been set aside, must necessarily be suspended pending final resolution of the boundary dispute raised by CLT REALTY DEVELOPMENT CORPORATION.11
xxx
Thereafter, the case was referred to the DILG for investigation pursuant to Section 1, Rule 5 in relation to Section 3, Rule 1 of Administrative Order No. 23, S. of 1992, as amended.
In a letter-report dated January 28, 1999, the DILG ruled that the passage of SP Ordinance No. 0254, S. 1998 is tainted with irregularity constituting dishonesty, misconduct and abuse of authority on the part of petitioners and recommended their suspension for six (6) months.12
On March 15, 1999, the Office of the President, through Executive Secretary Ronald o Zamora, rendered a decision,13 the dispositive portion of which reads:
WHEREFORE, herein respondents Mayor Reynaldo Malonzo, Vice-Mayor Oscar G. Malapitan and Councilors Chito Abel, Benjamin Manlapig, Edgar Erice, Dennis Padilla, Zaldy Dolatre, Susana Punzalan, Henry Camayo and Luis Tito Valera, all of Caloocan City, are hereby adjudged guilty of misconduct and each is meted the penalty of SUSPENSION from office for a period of three (3) months without pay to commence upon receipt of this Decision. This Decision is immediately executory.
SO ORDERED.14
Hence, this petition for certiorari and prohibition with application for preliminary injunction and prayer for restraining order, with alternative prayer for preliminary mandatory injunction.
On April 5, 1999, this Court issued a resolution setting the case for oral argument on April 20, 1999 and at the same time directing the parties to maintain the status quo prior to March 15, 1999.
II
The core issue in this case is whether or not the passage of SP Ordinance No. 0254, S. 1998 is tainted with irregularity which constitutes dishonesty, misconduct and abuse of authority on the part of petitioners.
Petitioners enacted Ordinance No. 0254, S. 1998 in violation of law, there being no funds actually available.
Changes in the annual budget and reversion of unexpended balances of appropriations are provided for in Sections 321 and 322 of Republic Act No. 7160, otherwise known as the Local Government Code, to wit:
Section 321. Changes in the Annual Budget. All budgetary proposals shall be included and considered in the budget preparation process. After the local chief executive concerned shall have submitted the executive budget to the sanggunian, no ordinance providing for a supplemental budget shall be enacted, except when supported by funds actually available as certified by the local treasurer or by new revenue sources.
A supplemental budget may also be enacted in times of public calamity buy way of budgetary realignment to set aside appropriations for the purchase of supplies and materials or the payment of services which are exceptionally urgent or absolutely indispensable to prevent imminent danger to, or loss of, life or property, in the jurisdiction of the local government unit or in other areas declared by the President in a state of calamity. Such ordinance shall clearly indicate the sources of funds available for appropriations, as certified under oath by the local treasurer and local accountant and attested by the local chief executive, and the various items of appropriations affected and reasons for the change.
Sec. 322. Reversion of Unexpended Balances of Appropriations, Continuing Appropriations. Unexpended balances of appropriations authorized in the annual appropriations ordinance shall revert to the unappropriated surplus of the general fund at the end of the fiscal year and shall not thereafter be available for expenditure except by subsequent enactment. However, appropriations for capital outlays shall continue and remain valid until fully spent, reverted or the project is completed. Reversion of the continuing appropriations shall not be allowed unless obligations therefor have been fully paid or otherwise settled.
The balances of continuing appropriations shall be reviewed as part of the annual budget preparation and the sanggunian concerned may approve, upon recommendation of the local chief executive, the reversion of funds no longer needed in connection with the activities funded by said continuing appropriations subject to the provisions of this Section.
Article 418 of the Implementing Rules and Regulations of R.A. 7160 states:
ART. 418. Reversion of Unexpended Balances of Appropriations; Continuing Appropriations.- (a) Unexpended balances of appropriations authorized in the appropriations ordinance shall revert to the balance at the end of the fiscal year and shall not thereafter be available for expenditure except by the subsequent enactment. Appropriations for capital outlays shall continue and remain valid until fully spent or the project is completed.
(b) Reversions of continuing appropriations shall not be allowed unless obligations therefor have been fully paid or otherwise settled. Balances of continuing appropriations shall be reviewed as part of the annual budget preparation. The sanggunian concerned may approve, upon recommendation of the local chief executive, the reversion of funds no longer needed in connection with the activities funded by said continuing appropriations.
Continuing appropriations refers to appropriations available to support obligations for a specified purpose or project, even when these obligations are beyond the budget year.
From the foregoing, it is clear that the general rule is that no supplemental budget may be enacted. This rule, however, admits of only two exceptions, i.e., when (a) the supplemental budget is supported by funds actually available as certified by the local treasurer or by new revenue sources; or (b) there is a public calamity. The ordinance shall indicate the sources of funds available for appropriations, as certified under oath by the local treasurer and the local accountant and attested to by the governor or the mayor, as well as the various items of the appropriations that are affected and the reasons for the change.
The questioned ordinance did not comply with the enumerated requirements.
First. There were no funds actually available at the time the ordinance was enacted. I do not subscribe to the argument that the P50 million is unobligated and actually available and therefore maybe subject of realignment because the expropriation of Lot 26 of the Maysilo Estate was discontinued. Article 417 of the Implementing Rules of the Local Government Code provides that:
Funds are likewise deemed actually available when there are savings. For this purpose, savings refer to portions or balances as of any given point in the fiscal year of any programmed or alloted appropriation which remain free of any obligation or encumbrance and which are still available after the satisfactory completion or the unavoidable discontinuance or abandonment of the work, activity, or purpose for which the appropriation was originally authorized, or which result from unobligated compensation and related costs pertaining to vacant positions and leaves of absence without pay.
The records bear out that the expropriation case before the RTC was never actually withdrawn, suspended, discontinued or abandoned by the City of Caloocan. While the intention of the city officials was to abandon or discontinue the expropriation case, the same was never actually realized as no motion to withdraw/abandon the case or motion to suspend prosecution of the claim was ever filed. The dispute on the boundaries of Lot 26 cannot constitute, to my mind, as an unavoidable discontinuance or an abandonment of the work or activity. City officials should have been more prudent in the exercise of their official functions, especially so when such public function called for the disbursement of public funds.
Second. The facts do not show the existence of a certificate of availability of funds executed under oath by the local treasurer and the local accountant and attested to by the mayor, as required by Section 321 of the Local Government Code. What is extant is a letter-memorandum of the City Treasurer to the City Mayor, dated July 26, 1998 which reads:
Sir, this has reference to your endorsement to the undersigned regarding the request of Hon. Oscar G. Malapitan, Vice Mayor elect and the new Presiding Officer of the incoming members of the Sangguniang Panlungsod, this City.
Please be informed that I have already discussed with the City budget Officer the possible sources of funding of the above request including other necessary expenditures your Office may include in a supplemental budget.
I agree with him that since the expropriation of CLT Property is discontinued, the appropriation for expropriation of FIFTY MILLION PESOS (P50M) can be reverted for use in a supplemental budget. I shall certify for its reversion since it is not yet obligated, and for its availability for re-appropriation in a supplemental budget.15
The above-quoted letter-memorandum adverting that since the expropriation of the CLT property has been discontinued, the appropriation for expropriation in the annual budget the amount of P50 million can be used in a supplemental budget, does not constitute as a valid certification of the availability of funds for reappropriation/reversion in a supplemental budget as mandated by law. The City Treasurer's issuance cannot in any way alter the fact that the funds referred to therein are not funds actually available because they are to be sourced from an appropriation for capital outlay which cannot be validly reverted or "converted into savings" on the dubious ground that there was an "unavoidable discontinuance" of the expropriation project.
In sum, at the time of the enactment of the ordinance, there were no funds actually available for realignment and there was no valid certification for the availability of funds executed under oath by the city treasurer and the city accountant and attested to by the mayor. Evidently, the city officials violated the provisions of Section 321 of the Local Government Code.
The majority opinion states with great emphasis that the amount of P39,352,047.75 appropriated under Ordinance No. 246, S. 1997 was not the subject of the realignment made under Ordinance No. 254, S. 1998 and that said amount is separate and distinct from the P39,343,028.00 appropriated in the supplemental budget. I believe this is plainly an erroneous conclusion.
It is noteworthy that petitioners, by their own admission in the Consolidated Answer to the complaint filed against them before the OP, categorically declared that the amount of P39,352,047.75 is part of the P50,000,000.00 appropriated in the Annual Budget, generally denominated as "Expropriation of Properties."16 It was only before this Court, by their own pleadings and during the oral argument, that petitioners took a different stand and contended that the amount of P39,352,047.75 is not part of the P50,000,000.00 and that the latter amount was intended for expenses incidental to expropriation. Clearly, the amount realigned is part of capital outlay and is a continuing expropriation which cannot be subject of realignment under the law.
Consequently, the amount of P39,352,047.75 appropriated under Ordinance No. 0246, S. 1997 which is part of the P50,000,000.00 appropriated in the annual budget constituted capital outlay since the benefits from said expropriation extended beyond the fiscal year. Said amount therefore cannot be the subject of realignment as such appropriation shall continue and remain valid until fully spent or the project is completed. As previously stated, the project (expropriation) was never completed nor really completely abandoned or withdrawn.
Moreover, the circumstances that preceded the enactment of Ordinance No. 0254, S. 1998 are irregular, to say the least. First, there was undue haste in conducting the three (3) readings in one session day, especially so when said session day was the first day of the regular session preceding the elections. Although this is not prohibited by law, separate readings were contrived to give local legislators, or national legislators for that matter, ample time for cool reflection and circumspection before a bill is passed into law. Second, no new rules have been adopted by the Sanggunian and no new committees have yet been formed at the time of the enactment of the ordinance, so it is difficult to imagine how petitioners could have passed the ordinance in an orderly, mature and deliberative manner. The argument that if no new rules were adopted by the new council, the old ones could have been availed of is unconvincing considering that petitioners did not ever bother to show what the old rules were. Third, the supplemental budget enacted was not submitted to the Department of Budget and Management (DBM) for review within the prescribed period17 in accordance with Sections 326 and 327 of the Local Government Code, in relation to Article 422 of its Implementing Rules.18 It was after the case was filed against petitioners when, as a blatant afterthought, they submitted the ordinance to the DBM and now, tongue-in-cheek, lamely contend that action thereon by the DBM constitutes a prejudicial question.
The unusual haste in the enactment of SP Ordinance No. 0254, S. 1998 diverting an alloted appropriation for essential public purposes to fund non-essential expenditures described as "lump sum appropriation for emergency" amounting to P25,000,000.00, "cash gifts," repair and renovation of the offices of the incoming councilors and hiring of additional personnel, and the manifest disregard in the observance of the proper procedure for the enactment of ordinances involving changes in the annual budget all point to acts constituting misconduct which warrants appropriate disciplinary action. Simply put, there was an abuse here in the utilization of local funds. Misconduct is defined as an unlawful behavior by a public officer in relation to public office.19
In view of the foregoing considerations, I find the Office of the President did not commit grave abuse of discretion in rendering the assailed decision. I, therefore, vote to dismiss the petition. However, the penalty of suspension of three months, without pay, imposed upon petitioners by said Office is too severe. It should be decreased to only twenty (20) days, the time already served by the petitioners.
Endnotes:
1 Annex L, Petition.
2 Annex E, Petition, p. 18.
3 Annex M, Petition.
4 Annex N, Petition.
5 Annex K, Petition.
6 Annex O-3.
7 A. EXECUTIVE DIRECTION
Lump sum appropriation for emergency P25,123,000.00
B. Non-office Appropriation for Additional
Cash Gift of all City Officials
and Employees at P2,000.00
each per annum. 8,392,000.00
C. CALOOCAN CITY POLYTECHNIC COLLEGE
Lump sum appropriation for part time
Instructors 3,828,028.00
OFFICE OF THE CITY VICE MAYOR
Repair and Maintenance of
Government Facilities 1,500,000.00
Capital Outlay 500,000.00
TOTAL APPROPRIATION P39,343,028.00
8 Annex B, Petition.
9 Annex D, Petition.
10 Annex E, Petition.
11 Id., at 18.
12 Annex A, Petition, pp. 4-5.
13 Annex A, Petition.
14 Id., at 8.
15 Annex O-3; Underscoring ours.
16 See Note 11, this Opinion.
17 Applying Section 56 of the Local Government Code, the SP of Caloocan City is mandated to submit copies of an ordinance for review to the DBM within three (3) days after its approval.
18 Section 326. Review of Appropriation Ordinances of Provinces, Highly-Urbanized Cities, Independent Component cities, and Municipalities within the Metropolitan Manila Area. The Department of Budget and Management shall review ordinances authorizing the annual or supplemental appropriations of provinces, highly-urbanized cities, independent component cities, and municipalities within the Metropolitan Manila Area in accordance with the immediately succeeding Section.
Section 327. Review of Appropriation Ordinances of Component Cities and Municipalities. The sangguniang panlalawigan shall review the ordinance authorizing annual or supplemental appropriations of component cities and municipalities in the same manner and within the same period prescribed for the review of other ordinances.
If within ninety (90) days from receipt of copies of such ordinance, the sangguniang panlalawigan takes no action thereon, the same shall be deemed to have been reviewed in accordance with law and shall continue to be in full force and effect. If within the same period, the sangguniang panlalawigan shall have ascertained that the ordinance authorizing annual or supplemental appropriations has not complied with the requirements set forth in this Title, the sangguniang panlalawigan shall, within the ninety-day period hereinabove prescribed, declare such ordinance inoperative in its entirety or in part. Items of appropriation contrary to limitations prescribed in this Title or in excess of the amounts prescribed herein shall be disallowed or reduced accordingly.
The sangguniang panlalawigan shall within the same period advise the sangguniang panlungsod or sangguniang bayan concerned through the local chief executive of any action on the ordinance under review. Upon receipt of such advice, the city or municipal treasurer concerned shall not make further disbursements of funds from any of the items of appropriation declared inoperative, disallowed or reduced.
Article 422. Review of Appropriations Ordinances of Provinces, Highly-Urbanized Cities and Independent Component Cities, and Municipalities within the Metropolitan Manila Area. DBM shall review ordinances authorizing the annual or supplemental appropriations of provinces, highly-urbanized cities, independent component cities, and municipalities within MMA in accordance with the immediately succeeding Article.
19 Blacks Law Dictionary, 5th Edition, p. 901; Guillen v. Constantino, 282 SCRA 583 [1998].
