G.R. No. 213237 & 213331. September 13, 2017.
CIVIL SERVICE COMMISSION, AND THE MUNICIPALITY OF MASIU, LANAO DEL SUR, REPRESENTED BY MAYOR NASSER P. PANGANDAMAN, JR., PETITIONERS, VS. SAMAD M. UNDA, RESPONDENT. [G.R. No. 213331] THE MUNICIPALITY OF MASIU, PROVINCE OF LANAO DEL SUR, REPRESENTED BY NASSER P. PANGANDAMAN, JR., MUNICIPAL MAYOR, PETITIONER, VS. SAMAD M. UNDA, RESPONDENT.

FACTS

Outgoing Mayor Aminullah Arimao appointed Samad M. Unda as Municipal Environment and Natural Resources Officer (MENRO) for Masiu, Lanao del Sur on March 8, 2007. Following the 2007 elections, the newly-elected Mayor, Nasser Pangandaman, Jr., discovered the municipality had operated on a reenacted 2005 budget for 2006 and 2007, with no annual budgets enacted for those years. Mayor Pangandaman identified Unda and eight others as “midnight appointees” whose positions allegedly lacked budgetary appropriation, withheld their salaries, and petitioned the Civil Service Commission (CSC) for the annulment of their appointments. The CSC Regional Office initially upheld Unda’s appointment, finding it complied with pre-election screening.
The CSC Central Office reversed the regional office, disapproving Unda’s appointment. It ruled the MENRO position was a new creation under an unapproved 2006 annual budget and that Unda’s appointment lacked proper screening. The Court of Appeals (CA) subsequently reversed the CSC, reinstating the regional office’s decision. The CA held the position was created by law (Sections 443 and 484 of the Local Government Code), not by a local ordinance, and that Unda’s appointment was made before the election ban. The petitioners, the CSC and the Municipality, elevated the case to the Supreme Court.

ISSUE

The core issue is whether the appointment of respondent Samad M. Unda as MENRO is valid despite the absence of a specific appropriation for the position in the municipal budget.

RULING

The Supreme Court granted the petitions, reversed the CA decision, and reinstated the CSC’s disapproval of Unda’s appointment. The legal logic centers on the distinction between the creation of an office and the creation of a position, and the mandatory requirement of a corresponding appropriation.
First, the Court clarified that while Section 484 of the Local Government Code authorizes the optional creation of a MENRO office, the actual position and its funding must be established by the local sanggunian through an ordinance with the requisite appropriation. An office is a legal institution; a position is the concrete embodiment with salary and duties. The law’s “optional” clause means the local government unit may choose to create the office, but once it does, the position must be funded.
Second, the Court emphasized that no appointment is valid without a corresponding appropriation. This is a fundamental principle of public fiscal administration. The municipality operated on a reenacted 2005 budget, which did not contain an item or appropriation for the MENRO position. Therefore, the appointment extended to Unda was to a non-existent, unfunded position, rendering it ineffectual from the start. The power to create a position is inherently lodged in the legislative body (the sanggunian), not the mayor. Since the sanggunian did not enact an annual budget for 2006 or 2007 that included this item, the mayor’s act of appointing Unda had no legal basis.