PEDRO G. PERALTA, PETITIONER, VS. AUDITOR GENERAL ISMAEL MATHAY, RESPONDENT.

There is need in this appeal from a decision of respondent Auditor
General Ismael Mathay for
an inquiry into the meaning and significance of the constitutional inhibition
against an officer or employee of the government receiving additional or double
compensation unless specifically authorized by law,^[1]
the decisive legal question being whether or not the cost of living allowance
as well as incentive and Christmas bonuses paid to petitioner Pedro G. Peralta,
a Trustee of the Government Service Insurance System, hereinafter called the
GSIS, did fall within such a ban.  The answer given by respondent Auditor
General was in the affirmative.  After a
careful study of the matter, this Court arrives at a similar conclusion.  Hence this appeal cannot prosper.

The facts are undisputed. 
As set forth in the brief of petitioner, the GSIS, on May 17, 1966, in a resolution duly
passed, granted him an optional retirement gratuity of P40,336.07.  Of that amount, he was not able to collect the
sum of P7,032.26, covering P3,982.26 as cost of living allowance, P1,275.00 as
incentive bonus, and P1,775.00 as Christmas bonus.  Such items were not passed in audit, the view
of respondent Auditor General being that they should be deducted from his
gratuity, although during petitioner’s incumbency as Trustee, no question was
raised when he was paid such allowance and bonuses.  Respondent Auditor General justified his
action on the ground that they “partake of the nature of additional
compensation,” a trustee’s remuneration being fixed by law in the form of
a per diem of P25.00 for every board meeting of the GSIS attended.  Respondent so ruled on June 28, 1966, and maintained such a stand on September 1, 1966 when he denied a
motion for reconsideration.  Hence this
appeal for review filed on September
29, 1966.

The ruling of respondent
Auditor General, being in accordance with what the Constitution requires, must
be upheld.

1.      It is expressly provided in the Constitution:  “No officer or employee of the
government shall receive additional or double compensation unless specifically
authorized by law.”^[2]
This is to manifest a commitment to the fundamental principle that a public
office is a public trust.  It is expected
of a government official or employee that he keeps uppermost in mind the
demands of public welfare.  He is there to render public service.  He is of course entitled to be rewarded for
the performance of the functions entrusted to him, but that should not be the
overriding consideration.  The intrusion
of the thought of private gain should be unwelcome.  The temptation to further personal ends,
public employment as a means for the acquisition of wealth, is to be
resisted.  That at least is the
ideal.  There is then to be an awareness
on the part of an officer or employee of the govern­ment that he is to receive
only such compensation as may be fixed by law. 
With such a realization, he is expected not to avail himself of devious
or circuitous means to increase the remuneration attached to his position.  It is an entirely different matter if the
legislative body would itself determine for reasons satisfactory to it that he
should receive something more.  If it
were to be thus though, there must be a law to that effect.  So the Constitution decrees.

As is expressly declared in the Constitution, the Civil Service
is to embrace “all branches and subdivisions of the Government * *
*.”^[3]
Conformably to the above, the Philippine Civil Service, by law, includes
“all branches, subdivisions and instrumentalities of the Government, inclu­ding
government-owned or controlled corporations * *.”^[4]
Petitioner has not disputed, nor can he dispute that as a trustee, he was an
officer of the government, the GSIS having been established in order “to
promote the efficiency and welfare of the
employees of the Government of the Philippines and to replace the [then] pension systems
established in [previous acts].”^[5] As such officer, petitioner cannot receive
additional or double compensation unless specifically authorized by law.  Under the GSIS Act, he is entitled as trustee
“to a per diem of P25.00 for each day of actual attendance in
session.”^[6] As in the case of government-controlled
corporations, the term “per diems” was used in the sense of the
compensation or remuneration attached to the office of Trustee.^[7] Such is not the meaning usually attached to
it.  So it was noted in Lexal Laboratories v. National Chemical Industries Workers
Union.^[8] A “per diem” is commonly
identified with the daily allowance “for each day he (an officer or
employee) was away from his home base.” Its usual signification is
thus that of a reimbursement for expenses incurred in the performance of one’s
duties.  If employed in a statute, as in
this case, in the concept of remuneration, however, there must be, to justify
an additional compensation, a specific
law that so provides.  Otherwise,
fidelity to the constitutional command is lacking.

A similar approach is called for in determining the nature of a
cost of living allowance.  If it could
rightfully be considered as in the nature of a reimbursement rather than
additional emoluments or perquisites, then the ruling of respondent Auditor
General cannot find support in the Constitution.  What was said in an American
State decision^[9]
has relevance.  It was therein
categorically stated “that it is universally held that an allowance for
expenses incident to the discharge of the duties of office is not an increase
of salary, a perquisite, nor an emolument of office.”^[10]
To the same effect is this excerpt appearing later in the opinion:  “A careful and, we believe, exhaustive
exami­nation of the decisions fails to disclose a single case in which it has
ever been held that a legislative act, providing for an allowance, for expenses
incurred in the discharge of official duties, to a public officer, whose salary
or compensation was fixed at a stated sum, was in violation of provisions such
as are found in many state Constitutions, forbidding an increase of salary
during official terms, or forbidding the granting of ‘fees,’ ‘perquisites,’ or
’emoluments’ to such officer.  Legislative
acts which directly in terms, or as construed, attempted to increase such
salaries, have been held invalid.  But no
decision has been found or, as we believe, can be found, which holds a
legislative act to be unconstitutional which merely relieves an officer, who
received a fixed salary or com­pensation, from expending such salary for
expenses incident to the performance of his official duties.”^[11]
It is worth noting that there are specific provisions in the applicable
statutes allowing trustees or directors, traveling expenses which may be collected
by the board of directors of the Philippine Virginia Tobacco Administration;^[12]
traveling and subsistence expenses by the members and board of directors of the
Central Luzon-Cagayan Valley Authority;^[13]
and traveling and other necessary expenses by the members of the Philippine
Medical Care Commission.^[14]
Such provisions are prompted by what may appear to be an excess of caution, for
the accepted doctrine is that an allowance to take care of expenses incurred by
an official to enable him to fulfill his task cannot be looked upon as an
additional compensation.  Such a
principle does not come to the aid of petitioner though.  He was unable to show that the cost of living
allowance received by him was in the nature of a reimbursement.  It did amount then to an additional com­pensation.

So it is in the case of the bonuses received by him.  It is quite obvious that by its very nature,
a bonus partakes of an additional remuneration or compensation.^[15]
The very characterization of what was received by petitioner as bonuses being
intended by way of an incentive to spur him possibly to more diligent efforts
and to add to the feeling of well-being traditionally associated with the
Christmas season would remove any doubt that the Auditor General had no choice
except to deduct from petitioner’s gratuity such items.

2. It is apparent that respondent Auditor General accorded respect
and deference to a constitutional command. 
To impute legal error to his actuation is to be oblivious of the
fundamental postulate that the Constitution is supreme.  Obedience is manda­tory.  It cannot be disregarded.  Every public official is sworn to uphold
it.  There can be no justification for
any other course of action.  To condone
whether by intent or inadvertence any deviation from what it prescribes is to
display less than full fealty to the cardinal precept of our polity.  A mistaken sympathy for the situation in
which the petitioner did find himself cannot suffice to confer authority on
respondent to grant what is asked of him in view of the constitutional
ban.  Both petitioner, who was himself
once a public official, and respondent Auditor General must be cognizant of the
paramount character of the Constitution. 
Thus everyone in the public service is only the more strongly bound to
submit to such supremacy and to abide by the limitations which it imposes upon
every aspect of the authority thus conferred.^[16]

WHEREFORE, the decision of the Auditor General of June 28, 1966, as reiterated in its
order denying the motion for reconsideration of September 1, 1966, is affirmed.  Without pronouncement as to costs.

Concepcion, C.J., Reyes, Dizon, Makalintal, Zaldivar, Ruiz Castro, Villamor, and Makasiar, JJ., concur.

Teehankee and Barredo, JJ., no part.

^[1]
According to Article XII, Sec. 3 of the Constitution:  “No officer or employee of the
Government shall receive additional or double compensation unless specifically
authorized by law.”

^[2]
Art. XII, Sec. 3, Constitution of the Philippines.

^[3]
According to Art. XII, Sec. 1:  “A
Civil Service embracing all branches and subdivisions of the Government shall
be provided by law.  Appointments in the
Civil Service, except as to those which are policy-determining, primarily confi­dential
or highly technical in nature, shall be made only according to merit and
fitness, to be determined as far as practicable by competitive
examination.”

^[4]
Section 3 of the Civil Service Act of 1959, Republic Act No. 2260, reads as
follows:  “The Philippine Civil
Service shall embrace all branches, subdivisions and instrumenta­lities of the
Government, including government-owned or controlled corporations, and appoint­ments
therein, except as to those which are policy-determining, primarily
confidential or highly technical in nature, shall be made only according to
merit and fitness, to be determined as far as practicable by competitive
examination.  Positions included in the
civil service fall into three categories; namely, competitive or classi­fied
service, non-competitive or unclassified service and exempt service.  The exempt service does not fall within the
scope of this law.”

^[5]
Section 3 of the Government Service Insurance Act, Commonwealth Act No. 186, is
to this effect:  “In order to
promote the efficiency and welfare of the employees of the Government of the
Philippines and to replace the present pension systems established in Acts
Numbered Sixteen hundred and thirty-eight, Thirty hundred and fifty, and
Thirty-one hundred and seventy-three, as amended, there is hereby established
an insti­tution to be known as the ‘Government Service Insurance System.’
” (1936)

^[6]
Sec. 16 of Republic Act No. 186, as amended by Republic Act No. 660 (1951);
Republic Act No. 1396 (1961) and Republic Act No. 4847 (1966).

^[7]
Cf. Sec. 12 of Republic Act No. 265, The Central Bank Act (1948); Sec. 5 of
Republic Act No. 776, The Civil Aeronautics Act (1952); Sec. 4 of Republic Act
No. 1135, The Philippine Tobacco Administration Act (1954); Sec. 3 of Republic
Act No. 1161, The Social Security Act (1954); Sec. 6 of Republic Act No. 1145,
The Philippine Coconut Administration Act (1954); Sec. 4 of Republic Act No.
1295, The Abaca Corporation Act (1955); Sec. 7 of Republic Act No. 1345, The Namarco Act (1955); Sec. 4 of Republic Act No. 1383, The Nawasa Act (1955); Sec. 4 of Republic Act No. 1400, The
Land Tenure Administration Act (1955); Sec. 2 of Republic Act No. 1815, The
Philippine Nuclear Energy Commission Act (1957); Sec. 6 of Republic Act No.
2265, The Philippine Virginia Tobacco Administration Act (1959); Sec. 5 of
Republic Act No. 3018, The Rice and Corn Industry Act (1960).

^[8]
L-24632, Oct. 26, 1968, 25
SCRA 668.

^[9]
McCoy v. Handlin, 153 N.W. 361 (1915).

^[10]
Ibid, p. 373.

^[11]
Ibid, p. 374.  The constitutional
provision in question, Art. 5 of Sec. 30 of the Constitution of South Dakota
reads thus:  “The judges of the
Supreme Court, Circuit courts and county courts shall each receive such salary
as may be provided by law, consistent with this Constitution, and no such judge
shall receive any compensation, perquisite or emoluments for or on account of his
office in any form what­ever, except such salary:  Provided, that county judges may accept and
receive such fees as may be allowed under the land laws of the United
States.” Cf. Earhart v. Frohmiller, 178 P2d 436 (1947); State v. Yelle, 110 P2d 162 (1941); Kogel v.
McGoldrick, 35 NYS 2d 916 (1942); Clark v.
Board of Com­missioners, 276 NW 138 (1936); Swartz v. Kingsbury
County, 267 NW 140 (1936); Milwaukee
County v. Halsey, 136 NW 139 (1912).

^[12]
Sec. 6 of the Philippine
Virginia Tobacco Administration Act, Republic Act No. 2265 (1959).

^[13]
Sec. 2 of the Central Luzon-Cagayan Valley
Authority Act, Republic Act No. 3054 (1961).

^[14]
Sec. 4 of the Medical Care Commission Act, Republic Act No. 6111 (1969).

^[15]
Cf. Ansay v. National Development Co., 107
Phil. 997 (1960).  Citing Phil. Education
Co. v. CIR, 92 Phil. 381 (1952); H. E. Heacock
v. National Labor Union, 95 Phil. 553 (1954).  That bonuses constitute additional
compensation is the teaching of the following American decisions:  Hurt v. Cotton States Fertilizer Co.,
C.C.A. Ga., 159 F. 2d 52 (1947); Tucker v. Tucker, 87 A. 2d 650 (1952);
Payne v. United States, 269 F. 871 (1921); Jones v. Loughman, 288 N.Y.S. 44 (1936); Patterson v. Iowa
Bonus Bd., 71 N.W. 2d1 (1955).

^[16]
Cf. United States
v. Lee, 106 US 196 (1882).