ELIAS V. PACETE, PETITIONER, VS. THE HONORABLE ACTING CHAIRMAN OF THE COMMISSION ON AUDIT, THE HONORABLE ASSISTANT EXECUTIVE SECRETARY, MIGUEL PENALOSA, JR., IN HIS CAPACITY AS …

On July 22, 1968,
petitioner Elias V. Pacete was appointed by the then
Mayor Antonio C. Acharon of General
Santos City
as City Attorney of the said city.  On June 24, 1971, Mayor Acharon was charged with murder in the Court of First
Instance of General Santos City and was detained without bail.  A few months later, on November 8, 1971, Mayor Acharon
ran for and was reelected as City Mayor of General Santos City pending the criminal
case against him and even while he was in jail. 
On January 1, 1972,
Mayor Acharon issued Administrative Order No. 1
designating Vice Mayor Erlindo R. Grafilo
as Acting
Mayor.  On June 29, 1972, Acharon, while
still in prison, issued another memorandum which had the effect of revoking the
aforementioned January 1, 1972
memorandum.

Subsequently, Acharon filed two cases
with the Supreme Court challenging the authority of Acting Mayor Grafilo to act as such,
claiming that notwithstanding the fact that he was confined as a detention prisoner due to the
murder charge against him, Acharon may lawfully
discharge the duties and functions of the Office of the Mayor of General Santos
City.  Both petitions, City of
General Santos and Hon. Antonio Acharon v. Atty. Erlindo
Grafilo, et al., G.R. No.
35303 and Antonio C. Acharon v.
Pedro Samson C. Anomas,
et al., G.R. No. L-33835, were dismissed by the Court.  The Court, in a Resolution dated October 20,
1972 stated that “the continued detention of . . . Antonio Acharon in jail, pending hearing and determination of his
case of murder, for which he has been denied bail, constitutes temporary
incapacity to discharge the duties of his Office of Mayor of General Santos
City, under Section 17 of Republic Act No. 6388 which incapacity justifies the
assumption of the Office of Mayor by respondent Vice-Mayor Erlindo
Grafilo . . .” [City of General Santos and Hon.
Antonio C. Acharon v. Atty. Erlindo
Grafilo, et al., G.R. No. L-35303, October 20, 1972.]

In the meantime, acting Mayor Erlindo Grafilo suspended petitioner Elias V. Pacete
as City Attorney for a period of ten (10) days effective July 11, 1972. 
Finally, on July 20, 1972,
notice was served on petitioner that he had been removed as the City Attorney
of General Santos City on the ground of loss of confidence.  Ostensibly, the Acting Mayor’s loss of
confidence in petitioner was the result of the legal opinion of the latter
impugning the authority of Acting Mayor Grafilo to
act as such and upholding the authority of Mayor Acharon
to discharge the functions of the Office of the Mayor even while the latter was
in prison.

Petitioner appealed to the Civil Service Commission the
termination of his services as City Attorney. 
The Acting Commissioner on Civil Service in an indorsement
dated October 13, 1972
directed Acting Mayor Grafilo to allow Atty. Pacete to continue in service as City Attorney pending
resolution of the merits of his appeal. 
Acting Mayor Grafilo disregarded the directive
of the Civil Service Commissioner branding the same as an illegal order and
contrary to the Supreme Court decisions in Claudio vs. Subido, 40 SCRA 481 and Besa
vs. PNB, 33 SCRA 330.  On September 14, 1972, Acting Mayor Grafilo appointed Atty. Hilarion Polistico as City Attorney of General Santos City.

On October 12, 1972,
petitioner filed with the City Treasurer of General Santos City a claim for the
payment of his back salaries in the amount of P2,275.00
corresponding to the period from July 11 to October 15, 1972 invoking in support of his claim the
aforementioned directive of the Commission on Civil Service.  Petitioner’s voucher was forwarded by
respondent City Treasurer to respondent City
Auditor who in turn referred the same to the Auditor General in an indorsement dated October
26, 1972 for decision.  The
Auditor General referred the claim to the Office of the President for
opinion.  On February 18, 1974, the
respondent Assistant Executive Secretary, by Authority of the President,
rendered an opinion stating that:  (1)
the termination of petitioner’s services as City Attorney by Acting Mayor Grafilo was in accordance with law and; (2) Atty. Pacete may not rightfully demand payment of back salaries
for the period during which he was out of the service and was physically and
legally not discharging his duties as City Attorney of General Santos City
[Annex “I” to the Petition; Rollo, p. 64.]
Petitioner filed a motion for reconsideration which was denied by respondent
Assistant Executive Secretary on July
8, 1974 [Annex “J” to the Petition; Rollo,
p. 72.] On May 22, 1974,
the Commission on Audit, which by virtue of the 1973 Constitution took over the
powers and functions of the Auditor General, rendered a decision disallowing
petitioner’s claim for backwages.  Consequently, respondent City Auditor Miguel Penalosa, Jr. refused to pass in audit petitioner’s claim
for backwages [Annex “R” to the Petition; Rollo, p. 103.]

On October 15, 1974,
petitioner filed the present petition with essentially the following
prayers:  (1) payment of backwages from the time petitioner was suspended on July 11, 1972 until the final
termination of this case; and (2) payment by respondent City Auditor Miguel Penalosa, Jr. of damages for his refusal to pass in audit
petitioner’s claim for backwages.  Petitioner did not pray for reinstatement.

After the filing by the parties of their respective pleadings,
the Court, through its Second Division, resolved on June 30, 1975, to consider the case submitted for
decision.  Unfortunately, no action was
taken thereon until after the reorganization of the Court upon the ratification
of the 1987 Constitution.

On February 8, 1988, the Court, noting the considerable length of
time during which the case has been pending and to determine whether
supervening events have rendered the case moot and academic required the
parties to move in the premises.

The respondents
City Auditor and City Treasurer of
General Santos City filed a manifestation claiming that the case has become
moot and academic because petitioner has been appointed Hearing Officer IV of
the National Police Commission on February
25, 1976.  On the other hand,
the Solicitor General filed a manifestation stating that:  (1) there is no showing that the
parties have lost interest in the case; and (2) there is no supervening event
which would render the case moot and academic. 
Likewise, petitioner filed a manifestation
underscoring his interest in pursuing the case and reiterating his claims for backwages and damages.

Petitioner first assails the legality of the opinion of
respondent Assistant Executive Secretary contending that the decision of the
Auditor General cannot be reviewed by the Office of the President without
violating the principles of separation of powers and non-delegation of powers.

This contention is unmeritorious because the Office of the
President did not review the ruling of the Auditor General.  Instead, what transpired was the referral of
petitioner’s case by the Auditor General to the Office of the President for
opinion, on the basis of which the respondent Acting Chairman of the Commission
on Audit, who as noted earlier
took over the functions of the Auditor General, rendered a decision disallowing
petitioner’s claim [Annex “K” to the Petition; Rollo,
p. 102.] In other words, the respondent Acting Chairman of the Commission on
Audit did issue a separate decision rejecting petitioner’s money claim.  It cannot, therefore be claimed that the
Commission on Audit (formerly the Auditor General) abdicated in favor of the
Office of the President its authority over cases involving the settlement of
accounts or money claims against the government.

Petitioner next contends that the failure of the Auditor General
to decide his claim within sixty (60) days from the presentation of the same
resulted in the automatic grant of petitioner’s claim for backwages
in accordance with Sec. 1 of Commonwealth Act No. 327.

This contention is bereft of merit.  Sec. 1 of Commonwealth Act No. 327 provides:

Section 1. In all cases involving the
settlement of accounts or claims, other than those of accountable
officers, the Auditor General shall act and decide the same within sixty (60)
days, exclusive of Sundays and holidays, after their presentation.

In  Carabao, Inc. v. Agricultural
Productivity Commission, G.R. No. L-29304, September 30,
1970, 35 SCRA 224, the Court held that in case of failure by the Auditor
General to decide a claim within sixty (60) days, a claimant’s remedy is to
institute mandamus proceedings to compel the rendition of a decision by the Auditor General.  The lapse of the sixty (60) day period does
not result in the automatic grant of the claim. 
Nowhere in Commonwealth Act No. 327 can the petitioner’s theory of
automatic grant be inferred.

Having resolved the preliminary issues, the Court will now deal
with petitioner’s claim for backwages which is
anchored on the legality of the termination of the services of petitioner as
City Attorney of General Santos City, which, in turn, hinges on the issue of
whether or not the position of City Attorney is confidential, for which loss of
confidence is a valid ground
for termination.

This is not the first time that this question has been raised
before the Court.  In Besa v. Philippine National Bank,
G.R. No. L-26838, May 29, 1970, 33 SCRA 331, the Court ruled that the
position of Chief Legal Counsel of the Philippine National Bank is both
confidential and technical in nature.  In Claudio v. Subido,
G.R. No. L-30865, August 31, 1971, 40 SCRA 481, 484, the Court likewise
ruled that “[t]he position in question, that of the City Legal Officer, is
one that requires the utmost confidence on the part of the Mayor.”

The same conclusion was reached by the Court in Cadiente v. Santos, G.R. No. L-35592,
June 11, 1986, 142 SCRA 280, where petitioner
Cadiente was discharged as the City Legal Officer of Davao City by the newly elected mayor on the ground that
the position was primarily confidential in nature.  In upholding Cadiente’s
termination, the Court stated the following:

In resolving the merits of the instant case, We
find as an undeniable fact that
the position of a City Legal
Officer is one which is “primarily confidential”.  This Court held in the case of Claudio vs. Subido, L-30865, August 31, 1971, 40 SCRA 481, that the
position of a City Legal Officer is one requiring that utmost confidence on the
part of the mayor be extended to said officer. 
The relationship existing between a lawyer and his client, whether a
private individual or a public officer, is one that depends on the highest
degree of trust that the latter entertains for the counsel selected.  As stated in the case of Pinero
vs. Hechanova, L-22562, October 22, 1966, 18 SCRA
4176 (citing De los Santos vs. Mallare,
87 Phil. 289), the phrase ‘primarily confidential’ “denotes not only
confidence in the aptitude of the appointee for the duties of the office but
primarily close intimacy which insures freedom of intercourse, without
embarrassment on freedom from misgivings of betrayals of personal trust on
confidential matters of state.” (Italics supplied).

The tenure of officials holding primarily confidential positions
ends upon loss of confidence, because their term of office lasts only as long
as confidence in them endures; and thus their cessation involves no removal
(Corpus vs. Cuaderno, L-23721, March 31, 1965, 13
SCRA 591-596).  When such confidence is
lost and the officer holding such position is separated from the service, such
cessation entails no removal but an expiration of his term.  In the case of Hernandez vs. Villegas,
L-17287, June 30, 1965, 14
SCRA 548, it was held –

It is to be understood of course that officials and employees
holding primarily confidential positions continue only for so long as
confidence in them endures.  The
termination of their official relation can be justified on the ground of loss
of confidence because in that case their cessation from office involved no
removal but merely the expiration of the term of office – two different causes
for the termination of official relations recognized in the Law of Public
Officers.

The Court, after a careful consideration of the instant case,
finds no cogent reason to depart from the ruling of the aforecited
cases that the position of Legal Counsel or City Attorney is confidential in
nature, for which loss of confidence is a valid ground for termination.  Hence, the Court must rule that petitioner is
not entitled to the backwages claimed.  Moreover, having determined the legality of
petitioner’s termination from service as City Attorney, the Court must likewise
hold that respondent City Auditor Miguel Penalosa,
Jr. cannot be held liable for damages since his refusal to pass in audit
petitioner’s claim for backwages was pursuant to a
lawful order made by the respondent Acting Commissioner on Audit.

WHEREFORE, the petition is hereby DISMISSED for lack of merit.

SO ORDERED.

Fernan, C.J., Gutierrez, Jr.,
Feliciano, and Bidin,
JJ., concur.