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 …

Pacete versus the Acting Chairman of the Commission on Audit

The Case

This is a petition for certiorari and mandamus filed with the Supreme Court by Elias V. Pacete, who had been removed as City Attorney of General Santos City by the Acting Mayor on the ground of loss of confidence. Pacete asked the Court to order payment of his back salaries and to hold the City Auditor liable for damages for refusing to pass his claim in audit. The case matters because it settles two things a reviewee must know: that the position of City Attorney is primarily confidential, so that loss of confidence is a valid ground for termination, and that the failure of the auditing authority to decide a money claim within sixty days does not automatically grant the claim.

Procedural History

This was an original action in the Supreme Court, not an appeal from any lower court. Pacete filed the petition on October 15, 1974, praying for backwages from the time he was suspended on July 11, 1972 until the final termination of the case, and for damages against the City Auditor. He did not pray for reinstatement. The Court, through its Second Division, resolved on June 30, 1975 to consider the case submitted for decision, but no action was taken until after the reorganization of the Court upon the ratification of the 1987 Constitution. On February 8, 1988, noting the length of time the case had been pending, the Court required the parties to move in the premises to determine whether supervening events had rendered the case moot. The City Auditor and City Treasurer claimed the case had become moot because Pacete had been appointed Hearing Officer IV of the National Police Commission on February 25, 1976, but the Solicitor General and Pacete both maintained that no supervening event had rendered the case moot and that Pacete retained his interest in his claims.

Facts

On July 22, 1968, petitioner Elias V. Pacete was appointed by then Mayor Antonio C. Acharon as City Attorney of General Santos City. On June 24, 1971, Mayor Acharon was charged with murder before the Court of First Instance of General Santos City and was detained without bail. A few months later, on November 8, 1971, he ran for and was reelected as City Mayor pending the criminal case and even while he was in jail. On January 1, 1972, Mayor Acharon issued Administrative Order Number 1 designating Vice Mayor Erlindo R. Grafilo as Acting Mayor. On June 29, 1972, Acharon, while still in prison, issued another memorandum revoking that earlier designation.

Acharon then filed two cases with the Supreme Court challenging the authority of Acting Mayor Grafilo, claiming that despite his confinement as a detention prisoner he could lawfully discharge the duties of Mayor. Both petitions were dismissed. In a Resolution dated October 20, 1972, the Court held that Acharon's continued detention in jail, pending hearing and determination of the murder case for which he had been denied bail, constituted temporary incapacity to discharge the duties of his office under Section 17 of Republic Act Number 6388, which incapacity justified the assumption of the office by Vice Mayor Grafilo.

In the meantime, Acting Mayor Grafilo suspended Pacete as City Attorney for ten days effective July 11, 1972. On July 20, 1972, notice was served on Pacete that he had been removed as City Attorney on the ground of loss of confidence, apparently because of his legal opinion impugning the authority of the Acting Mayor and upholding that of Mayor Acharon. Pacete appealed to the Civil Service Commission, and the Acting Commissioner directed the Acting Mayor to allow him to continue in service pending resolution of the appeal, but the Acting Mayor disregarded the directive and appointed Atty. Hilarion Polistico as City Attorney on September 14, 1972. Pacete then filed a claim for back salaries of 2,275 pesos covering the period from July 11 to October 15, 1972. The claim was referred to the Auditor General, who in turn sought the opinion of the Office of the President. On February 18, 1974, the Assistant Executive Secretary, by authority of the President, opined that the termination was in accordance with law and that Pacete could not demand back salaries. On May 22, 1974, the Commission on Audit, which had taken over the powers of the Auditor General under the 1973 Constitution, rendered a decision disallowing the claim, and the City Auditor accordingly refused to pass it in audit.

Issues

• Whether or not the opinion of the Office of the President on petitioner's claim violated the principles of separation of powers and non-delegation of powers.
• Whether or not the failure of the Auditor General to decide petitioner's claim within sixty days resulted in the automatic grant of the claim under Section 1 of Commonwealth Act Number 327.
• Whether or not the position of City Attorney is primarily confidential, so that loss of confidence is a valid ground for termination and petitioner is not entitled to backwages.
• Whether or not the City Auditor may be held liable for damages for refusing to pass petitioner's claim in audit.

Applicable Provisions

Section 1 of Commonwealth Act Number 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.

This is the provision on which petitioner rested his theory of automatic grant, and which the Court construed as a mere directive to act within sixty days, not a grant of the claim upon lapse of that period.

Ruling

On the first issue, the Court held that the Office of the President did not review the ruling of the Auditor General. What happened was that the Auditor General referred the case to the Office of the President for opinion, and on the basis of that opinion the Acting Chairman of the Commission on Audit issued a separate decision rejecting the claim. There was therefore no abdication of the Commission's authority over the settlement of accounts or money claims against the government.

On the second issue, the Court held that the contention was bereft of merit. In Carabao, Incorporated versus Agricultural Productivity Commission, the Court had ruled that the claimant's remedy, upon failure of the Auditor General to decide within sixty days, is to institute mandamus proceedings to compel rendition of a decision. The lapse of the period does not result in the automatic grant of the claim, and nowhere in Commonwealth Act Number 327 can that theory be inferred.

On the third issue, the Court held that the position of City Attorney is primarily confidential in nature, for which loss of confidence is a valid ground for termination. It relied on its earlier rulings that the position of Chief Legal Counsel of the Philippine National Bank is both confidential and technical, and that the City Legal Officer's position requires the utmost confidence on the part of the Mayor. In Cadiente versus Santos, the Court explained the phrase primarily confidential:

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 Court added that the tenure of officials holding primarily confidential positions ends upon loss of confidence, because their term lasts only as long as confidence in them endures, and their cessation involves no removal. Hence petitioner is not entitled to the backwages claimed. On the fourth issue, having determined the legality of the termination, the Court held that the City Auditor cannot be held liable for damages, since his refusal to pass the claim in audit was pursuant to a lawful order of the Acting Commissioner on Audit.

Doctrine

The position of City Attorney or City Legal Officer is primarily confidential in nature. Loss of confidence is a valid ground for termination, and the cessation of a primarily confidential officer involves no removal but merely the expiration of his term, so he is not entitled to backwages. 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, and freedom from misgivings of betrayal of personal trust on confidential matters of state. Under Section 1 of Commonwealth Act Number 327, the lapse of the sixty day period does not automatically grant the claim; the claimant's remedy is mandamus to compel a decision. A referral by the Auditor General to the Office of the President for opinion does not amount to a review of the Auditor General's ruling, and the Commission on Audit does not abdicate its authority when it renders its own separate decision on the claim.

Disposition

The petition was dismissed for lack of merit, and petitioner was denied backwages and damages.

Remember This

The single line worth memorizing is that the City Attorney holds a primarily confidential position whose tenure ends upon loss of confidence, and that the sixty day period under Commonwealth Act Number 327 does not automatically grant a money claim. Examiners like to use this case on the nature of primarily confidential positions in local government and on the remedy of mandamus against the auditing authority.