G.R. No. L-54081 April 27, 1984
ADELAIDO HERRERA, plaintiff-appellee, vs. IÑAKI LARRAZABAL, in his capacity as City Mayor and his personal capacity, JESUS B. LLADOC, in his capacity as Acting City Mayor; and GODOFREDO SEVILLA, in his capacity as Acting City Treasurer, defendants-appellants.

FACTS

Adelaido Herrera, a patrolman in Ormoc City, was preventively suspended on August 4, 1967, due to a criminal case. He was later acquitted in that case and in a subsequent criminal case. An administrative case, however, remained pending before the Police Commission (POLCOM). After his acquittals and the lapse of more than sixty days from the filing of the administrative case, Herrera sought reinstatement, which was denied. He then filed a mandamus case. The parties entered into an Amicable Settlement, approved by the trial court on February 3, 1972. It stipulated Herrera’s reinstatement effective February 1, 1972, and the payment of his back salaries from the time of suspension, but with a proviso: payment was to be made “immediately only upon receipt… of the final decision of the Police Commission… exonerating the plaintiff.” Herrera was reinstated, but the city officials refused to pay the back salaries, citing the unresolved administrative case. Herrera filed an omnibus motion for execution, which the trial court granted, ordering payment of back salaries from October 4, 1967 (after the initial 60-day suspension period), invoking Section 16 of the Police Act of 1966 (RA 4864).

ISSUE

Whether the trial court correctly ordered the payment of Herrera’s back salaries based on Section 16 of the Police Act, disregarding the specific condition in the Amicable Settlement that made payment contingent upon his exoneration in the administrative case.

RULING

The Supreme Court reversed the trial court’s order. The legal logic centers on the supremacy of the contractual terms in the judicially approved Amicable Settlement over a general statutory interpretation. The Court held that the Amicable Settlement, voluntarily entered into by the parties and approved by the court, constituted a binding contract that defined the specific conditions for the payment of back salaries. Paragraph 2 of the Settlement explicitly conditioned payment on the receipt of a final decision from the Police Commission exonerating Herrera. This specific stipulation governed the parties’ rights and obligations. The trial court erred in applying Section 16 of the Police Act to override this clear contractual term. The Court clarified that while Section 16 provides for reinstatement and payment of salaries upon acquittal in a criminal case, the right to back salaries during a preventive suspension for an administrative case is distinct and generally accrues only upon exoneration in that administrative proceeding, as reinforced by contemporaneous police regulations. Since the final decision in the administrative case (which was later shown to have dismissed Herrera from service, not exonerated him) had not been received at the time of the motion, the condition precedent for payment under the Settlement had not been fulfilled. Therefore, the obligation to pay back salaries had not yet accrued, making the writ of execution premature. The Court set aside the order for the issuance of an alias writ of execution.