PROCOPIO F. ELEAZAR, PETITIONER, VS. AUDITOR GENERAL, RESPONDENT.

Petitioner was from 1947 to 1954 the Manager of the Industrial
Department of the Rehabilitation Finance Corporation which later became
the Development Bank of the Philippines. By virtue of Resolution No.
7416 of the Board of Governors of said corporation dated October 6,
1954, petitioner was suspended from office for the reason that he
became involved in Criminal Case No. 36042 of the Court of First
Instance of Manila which arose out of an anomaly committed in
connection with the grant of a loan of P1,000,000.00 to Villanueva
Steamship Co., Inc.

Petitioner was reinstated in March, 1961 by virtue of Board
Resolution No. 1460 dated March 8, 1961 without prejudice to the
continuance of the administrative proceedings then being conducted
against him. And acting upon the recommendation of the committee that
conduced said proceedings, the Board of Governors approved Resolution
No. 4505 dated June 28, 1962 providing (1) that instead of imposing two
months suspension which in effect is a fine equivalent to two months
pay, petitioner be merely reprimanded; (2) that he be paid all his
salaries corresponding to the period of his suspension; and (3) that
his salary for purposes of retirement be increased to P15,260.00 per
annum. Since said resolution did not specifically authorize the payment
of other emoluments such as bonus, cost of living allowances, and gift
certificates, the auditor of the office disallowed such emoluments
amounting to P13,055.41. Petitioner requested the Board that it
authorize the payment to him of said emoluments, but the request was
denied. Petitioner requested the reconsideration of said denial, but
the request was also denied. Hence, the matter was referred to the
Office of the Auditor General who, in a letter dated July 26, 1963,
denied petitioner’s claim over the emoluments above-referred to
amounting to P13,055.41. From this decision, petitioner interposed the
present appeal under Section 1, Rule 44 of the Rules of Court.

There is no dispute that petitioner was suspended from office as
Manager of the Industrial Department of the Development. Bank of the
Philippines because of his involvement in a criminal case which has a
direct relation with a grant of a loan of P1,000,000.00 to Villanueva
Steamship Co., Inc. For reasons that do not clearly appear in the
records, he was only reinstated sometime in March, 1961 by virtue of a
resolution of the Board of Governors of said Bank without prejudice to
the continuance of the administrative proceedings then being conducted
against him. And on June 28, 1962, acting on a recommendation made by
the committee that was conducting said investigation, the Board of
Governors approved another resolution which, among other things, ruled
“that subject to the usual audit, respondent (now petitioner) be paid
all his salaries corresponding to the period of his suspension from
October 6, 1954 to March 6, 1961.” Since this resolution does not
specifically authorize the payment of other emoluments such as bonus,
cost of living allowances, and gift certificates, the office auditor
disallowed said emoluments amounting to P13,055.41.

Petitioner appealed this ruling to the Board of Governors invoking
justice and equity in his favor, but the Board denied his request. And
when the matter was brought to the Auditor General, this official
likewise denied his request stating in part as follows: “Considering
that a perusal of the Board’s resolution granting the emoluments
clearly reveals that cost of living allowances, Christmas bonus and
gift certificates were given out of the profits realized by the
corporation in consideration of the services rendered by its employees,
this Office, much to its regret, cannot grant the payment of the
abovementioned emoluments.”

It appearing that the Board of Governors of the Development Bank in
its Resolution No. 4505 dated June 28, 1962 merely provided that
petitioner be paid all his salaries corresponding to the period of his
suspension and did not authorize the payment of other emoluments such
as bonus, living allowances, and gift certificates that would have
accrued during the same period amounting to P13,055.41, while his
request for reconsideration was denied by said Board in its Resolutions
Nos. 423 and 1574, and bearing in mind that the grant of said
emoluments is not a matter of right but a mere privilege which the
Board may or may not allow considering the circumstances of each case,
this Court finds no valid reason for interfering with the discretion
exercised by the Auditor General when he denied the request of
petitioner. He based his ruling not only on the disallowance of the
emoluments by the auditor of the bank but especially on Resolutions
Nos. 423 and 1574 of said Board which must have been adopted having in
view the best interest of the Bank. Verily, the Auditor General saw no
reason to question such action since under the law the Board of
Governors is invested with the exclusive power to determine the
propriety of such grant in the light of the circumstances surrounding
the suspension (Republic Act No. 5, as amended by Republic Act No. 208
and Republic Act No. 3147). In the circumstances, we also find no
reason to disturb this ruling of the Auditor General.

Wherefore, the appeal is dismissed.^[1] No costs.

Bengzon, C.J., Concepcion, Reyes, J.B.L., Barrera, Regala, Makalintal, Bengzon, J.P., Zaldivar, and Sanchez, JJ., concur.

^[1] Another reason why this
appeal should be dismissed, even though this question is not raised
herein, is that petitioner failed to exhaust his administrative
remedies by not appealing to the President as provided for in Section
3, Article XI of the Constitution and Section 2(b) of Commonwealth Act
No. 327.