GR 78648; (January, 1989) (Digest)
G.R. No. 78648 January 24, 1989
RAFAEL N. NUNAL, petitioner, vs. COMMISSION ON AUDIT AND MUNICIPALITY OF ISABELA, BASILAN, respondents.
FACTS
Petitioner Rafael N. Nunal was appointed Municipal Administrator of Isabela, Basilan. After being dismissed and subsequently reinstated, he was dismissed again in 1981. He filed a suit for mandamus and damages against municipal officials, seeking reinstatement with backwages. During the case’s pendency, the Sangguniang Bayan abolished his position. In 1984, a Compromise Agreement was entered into between Nunal and Mayor Alvin Dans (signing as Mayor and Presiding Officer of the Sangguniang Bayan), the Municipal Treasurer, and the Provincial Fiscal. The agreement stipulated payment of back salaries, emoluments, and separation pay from 1980 to 1984, and considered Nunal “retired” upon receipt. The trial court approved it. Nunal collected retirement benefits in 1985 and later filed a claim for separation pay pursuant to the Local Government Code.
The Commission on Audit (COA) denied the separation pay claim and disallowed all prior payments made under the Compromise Agreement. COA ruled the Municipality was not bound by the agreement as it was not impleaded as an indispensable party. Nunal filed a petition for certiorari, which the Supreme Court initially dismissed. He then filed this Motion for Reconsideration.
ISSUE
The primary issues are: (1) Whether the Compromise Agreement is binding on the Municipality of Isabela; and (2) Whether the COA gravely abused its discretion in disallowing the separation pay claim and the payments made under the agreement.
RULING
The Court partially granted the Motion for Reconsideration. On the first issue, it ruled the Compromise Agreement is binding on the Municipality. Following Gementiza vs. Court of Appeals, the municipal officials were sued in their official capacity in the underlying case for reinstatement and backwages. Therefore, the Municipality is deemed impleaded, and the agreement, signed by the Mayor, Municipal Treasurer, and Provincial Fiscal, is enforceable against it. The Municipality was not deprived of its day in court. Consequently, COA’s disallowance of the payments for back salaries and emoluments ordered by the trial court is set aside.
However, on the second issue, the Court sustained COA’s disallowance of the separation pay claim. The Compromise Agreement considered Nunal “retired,” and he had already collected retirement benefits. Granting additional separation pay would constitute an unwarranted double gratuity, contrary to government policy. The claim for separation pay, though mentioned in the agreement, still required proper audit and approval, which COA correctly denied. Furthermore, the Court addressed Nunal’s procedural contention, stating that the initial Minute Resolution dismissing his petition complied with constitutional requirements, as it stated a legal basis and pertained to a prerogative writ not demandable as a right.