[G.R. No. 137718.

July 27, 1999]

REYNALDO O. MALONZO, in his capacity as City Mayor of Caloocan City,

OSCAR MALAPITAN, in his capacity as Vice-Mayor of Caloocan City,
CHITO ABEL, BENJAMIN MANLAPIG, EDGAR ERICE, DENNIS
PADILLA, ZALDY DOLARTE, LUIS TITO VARELA, SUSAN
PUNZALAN, HENRY CAMAYO, in their capacities as Members of the
Sangguniang Panlungsod of Caloocan City, petitioners, vs. HON.
RONALDO B. ZAMORA, in his capacity as Executive Secretary, HON.
RONALDO V. PUNO, in his capacity as Under-secretary of the
Department of Interior and Local Government, and EDUARDO
TIBOR, respondents.

DECISION
ROMERO, J.:

Consistent with the doctrine that local government does not mean the creation
of imperium in imperii or a state within a State, the Constitution has vested the President of the
Philippines the power of general supervision over local government units.[1] Such grant of power
includes the power of discipline over local officials, keeping them accountable to the public, and
seeing to it that their acts are kept within the bounds of law. Needless to say, this awesome
supervisory power, however, must be exercised judiciously and with utmost circumspection so as
not to transgress the avowed constitutional policy of local autonomy. As the facts unfold, the issue
that obtrudes in our minds is: Should the national government be too strong vis--vis its local
counterpart to the point of subverting the principle of local autonomy enshrined and zealously
protected under the Constitution? It is in this light that the instant case shall now be resolved.
During the incumbency of then Macario A Asistio, Jr., the Sangguniang Panlungsod of
Caloocan City passed Ordinance No. 0168, S. 1994,[2] authorizing the City Mayor to initiate
proceedings for the expropriation of Lot 26 of the Maysilo Estate registered in the name of CLT
Relaty Development Corporation (CLT). The lot, covering an area of 799,955 square meters, was
intended for low-cost housing and the construction of an integrated bus terminal, parks and
playgrounds, and related support facilities and utilities. For this purpose, the said ordinance
appropriated the amount of P35,997,975.00,[3] representing 15% of the fair market value of Lot 26
that would be required of the city government as a deposit prior to entry into the premises to be
expropriated.
It turned out, however, that the Maysilo Estate straddled the City of Caloocan and the
Municipality of Malabon, prompting CLT to file a special civil action[4] for Interpleader with
Prayer for the Issuance of a Temporary Restraining Order and/or Writ of Preliminary Injunction
on August 6, 1997, before the Caloocan City Regional Trial Court, branch 124. The complaint
specifically sought to restrain the defendants City of Caloocan and Municipality of Malabon from
assessing and collecting real property taxes from CLT and to interplead and litigate among
themselves their conflicting rights to claim such taxes.
On December 11, 1997, the Caloocan City Sangguniang Panlungsod, under the stewardship
of incumbent Mayor Reynaldo O. Malonzo, enacted Ordinance No. 0246, S. 1997,[5] entitled AN
ORDINANCE AMENDING AND SUPPLEMENTING THE PROVISIONS OF CITY
ORDINANCE NO. 0168, SERIES OF 1994 AND FOR OTHER RELATED PURPOSES.[6] Under
this ordinance, certain amendments were introduced, foremost of which was the city councils
decision to increase the appropriated amount of P35,997,975.00 in the previous ordinance to
P39,352,047.75, taking into account the subject propertys current fair market value.
After failing to conclude a voluntary sale of Lot 26, the city government commenced on March
23, 1998, a suit for eminent domain[7] against CLT before the Caloocan City Regional Trial Court,
Branch 126, to implement the subject propertys expropriation. Apparently disturbed by this
development, the Caloocan City Legal Officer informed the City Mayor through a letter-
memorandum[8] dated April 7, 1998, of the pending interpleader case covering Lot 26 and that the
same was a Prejudicial Question which must be resolved first by the proper court in order not to
put the expropriation proceedings in question. He therefore recommended that pending the final
determination and resolution of the court on the issue (territorial jurisdiction) raised in Civil Case
No. C-18019 before Branch 124 of the Regional Trial Court of Caloocan City, the expropriation
of the subject property be cancelled and/or abandoned.
In the meantime, after the successful re-election bid of Malonzo, Vice-Mayor Oscar G.
Malapitan wrote him a letter[9] dated June 4, 1998, requesting the immediate repair and renovation
of the offices of the incoming councilors, as well as the hiring of additional personnel and the
retention of those currently employed in the offices of the councilors.
Malonzo acted on said letter and endorsed the same to the Office of the City Treasurer. The
latter in turn manifested through a memorandum[10]dated June 26, 1998, that since the expropriation
of CLT Property is discontinued, the appropriation for expropriation of FIFTY MILLION PESOS
(P50M)[11] can be reverted for use in a supplemental budget stating further that he certifies (F)or
its reversion since it is not yet obligated, and for its availability for re-appropriation in a
supplemental budget.
Pursuant to the treasurers certification on the availability of funds to accommodate Vice-
Mayor Malapitans request, Malonzo subsequently endorsed to the Sangguniang
Panlungsod Supplemental Budget No. 01, Series of 1998, appropriating the amount of
P39,343,028.00. The city council acted favorably on Malonzos endorsement and, thus,
passed Ordinance No. 0254, S. 1998[12] entitled AN ORDINANCE PROVIDING PAYMENTS
FOR APPROVED ITEMS IN THE SUPPLEMENTAL BUDGET NO. 1 CALENDAR YEAR
1998 AND APPROPRIATING CORRESPONDING AMOUNT WHICH SHALL BE TAKEN
FROM THE GENERAL FUND (REVERSION OF APPROPRIATION-EXPROPRIATION OF
PROPERTIES).
Alleging, however, that petitioners conspired and confederated in willfully violating certain
provisions of the Local Government Code of 1991 (hereinafter the "Code") through the passage of
Ordinance No. 0254, S. 1998, a certain Eduardo Tibor, by himself and as a taxpayer, filed on July
15, 1998, an administrative complaint for Dishonesty, Misconduct in Office, and Abuse of
Authority against petitioners before the Office of the President (OP).[13]
After the complaint was given due course, petitioners filed on October 15, 1998 their
Consolidated Answer,[14] pointing out, among other things, that said complaint constituted
collateral attack of a validly enacted ordinance whose validity should only be determined in a
judicial forum. They also claimed that the assailed ordinance was enacted strictly in accordance
with Article 417 of the Rules and Regulations Implementing the Local Government Code of 1991
(hereinafter, the Rules), as amended by Administrative Order No. 47 dated April 12, 1993.
After several exchanges of pleadings,[15] petitioners, citing Section 326 of the Code and Article
422, Rule XXXIV of the Rules, filed on February 7, 1999, a Motion to Refer the Case to the
Department of Budget and Management (DBM) on the ground that the DBM has been granted
power under the Code to review ordinances authorizing the annual or supplemental appropriations
of, among other things, highly urbanized cities such as Caloocan City. This motion, however,
remained unresolved.
Two days later, after learning that a certain Teotimo de Guzman Gajudo had filed an action
for the Decalaration of Nullity of Ordinance No. 0254, Series of 1998, before the Caloocan City
Regional Trial Court,[16] petitioners filed with the OP a Manifestation and Very Urgent Motion to
Suspend Proceedings on the ground that the determination of the validity of said ordinance was a
prejudicial question. Likewise, this motion was not acted upon by the OP.
Thus, without resolving the foregoing motions of petitioners, the OP rendered its assailed
judgment[17] on March 15, 1999, the decretal portion of which reads:

WHEREFORE, herein respondents Mayor Reynaldo Malonzo, Vice-mayor Oscar G.

Malapitan and Councilors Chito Abel, Benjamin Manlapig, Edgar Erice, Dennis
Padilla, Zaldy Dolatre, Susana Punzalan, Henry Camayo, and Luis Tito Varela, all of
Caloocan City, are hereby adjudged guilty of misconduct and each is meted the
penalty of SUSPENSION[18] from office for a period of three (3) months without pay to commence upon
receipt of this Decision. This Decision is immediately executory.

SO ORDERED.

On even date, the Department of Interior and Local Government (DILG) administered
Macario E. Asistio IIIs oath of office as Acting Mayor of Caloocan City.
Without moving for reconsideration of the OPs decision, petitioners filed before this Court on
March 22, 1999, the instant Petition for Certiorari and Prohibition With Application for
Preliminary Injunction and Prayer for Restraining Order, With alternative Prayer for Preliminary
Mandatory Injunction.[19]
In a resolution of this Court dated April 5, 1999, we resolved to set the case for oral
argument[20] on April 20, 1999 while at the same time directed the parties to maintain the status
quo before March 15, 1999.
To support their petition, petitioners contend that on account of the filing of an action for
interpleader by CLT, the expropriation proceedings had to be suspended pending final resolution
of the boundary dispute between Malabon and Caloocan City. Due to his dispute, the P50 million
appropriation for the expropriation of properties under current operating expenses had not been
obligated and no security deposit was forthcoming. It was not at the time a continuing
appropriation. This unavoidable discontinuance of the purpose for which the appropriation was
made effectively converted the earlier expropriation of P39,352,047.75 into savings as defined by
law.
They argue further that there is no truth in the allegation that Ordinance No. 0254, S. 1998
was passed without complying with Sections 50 and 52 of the Local Government Code requiring
that on the first regular session following the election of its members and within 90 days thereafter,
the Sanggunian concerned shall adopt or update its existing rules of procedure. According to them,
the minutes of the session held on July 2, 1998 would reveal that the matter of adoption or updating
of the house rules was taken up and that the council arrived at a decision to create an ad
hoc committee to study the rules.[21] Moreover, even if the Sanggunian failed to approve the new
rules of procedure for the ensuing year, the rules which were applied in the previous year shall be
deemed in force and effect until a new ones are adopted.
With respect to the OPs assumption of jurisdiction, petitioners maintained that the OP
effectively arrogated unto itself judicial power when it entertained a collateral attack on the validity
of Ordinance No. 0254, S. 1998. Furthermore, primary jurisdiction over the administrative
complaint of Tibor should have pertained to the Office of the Ombudsman, as prescribed by Article
XI, Sections 13 and 15 of the Constitution. They also asserted that the declaration in the OPs
decision to the effect that Ordinance No. 0254, S. 1998 was irregularly passed constituted a
usurpation of the DBMs power of review over ordinances authorizing annual or supplemental
appropriations of, among others, highly-urbanized cities like Caloocan City as provided under
Section 326 of the Local Government Code of 1991. In light of said statutory provision, petitioners
opined that respondents should have deferred passing upon the validity of the subject ordinance
until after the DBM shall have made are view thereof.
Finally, petitioners complained that respondents violated the right to equal protection of the
laws when Vice-Mayor Oscar Malapitan was placed in the same class as the rest of the councilors
when in truth and in fact, as Presiding Officer of the council, he did not even vote nor participate
in the deliberations. The violation of such right, according to petitioners, made the OPs decision a
nullity. They concluded that the administrative complaint was anathema to the States avowed
policy of local autonomy as the threat of harassment suits could become a sword of Damocles
hanging over the heads of local officials.
Contending that the OP decison judiciously applied existing laws and jurisprudence under the
facts obtaining in this case, the Office of the Solicitor General (OSG)[22] disputed petitioners claims
contending that the appropriation of P39,352,047.75 contained in an earlier ordinance (Ord. NO.
0246 S. 1997) for the expropriation of Lot 26 of the Maysilo Estate was a capital outlay as defined
under Article 306 (d) of the Code and not current operating expenditures. Since it was a capital
outlay, the same shall continue and remain valid until fully spent or the project is completed, as
provided under Section 322 of the Code.
The OSG asserted further that the filing on August 6, 1997 of an interpleader case by CLT
which owns Lot 26 should not be considered as an unavoidable discontinuance that automatically
converted the appropriated amount into savings which could be used for supplemental
budget. Since the said amount was not transformed into savings and, hence, no funds were actually
available, then the passage of Ordinance No. 0254, S. 1998 which realigned the said amount on a
supplemental budget violated Section 321 of the Code requiring an ordinance providing for a
supplemental budget to be supported by funds actually available as certified by the local treasurer
or by new revenue sources.
Petitioners were likewise faulted for violating Sections 50 and 52 of the Code requiring
the Sangguniang Panlungsod to adopt or update its existing rules of procedure within the first 90
days following the election of its members. The Sanggunian allegedly conducted three readings of
Ordinance No. 0254, S. 1998 in one day and on the first day of its session (July 2, 1998) without
the Sanggunian having first organized itself and adopted its rules of procedure. It was only on July
23, 1998 that the Sanggunian adopted its internal rules of procedure.
As regard petitioners contention that the administrative complaint of Tibor should have been
filed with the Office of the Ombudsman instead of the OP, the OSG pointed out that under Section
60 and 61 of the Code, the OP is vested with jurisdiction to discipline, remove or suspend a local
elective official for, among other things, misconduct in office. The Ombudsman has never been
vested with original and exclusive jurisdiction regarding administrative complaints involving
government officials.
Finally, the OSG sought to dismiss the petition on the grounds of non-exhaustion of
administrative remedies before the OP and for failure to follow Section 4, Rule 65 of the 1997
Rules of Civil Procedure which prescribes that if it [the subject of the petition] involves the acts
or omissions of a quasi-judicial agency, and unless provided by law or these Rules, the petition
shall be filed in and cognizable only by the Court of Appeals.
The petition is impressed with merit.
Preliminarily, we find a need to resolve a couple of procedural issues which have a bearing
on the propriety of this Courts action on the petition, to wit: (1) whether the Supreme Court is the
proper forum which can take cognizance of this instant petition assailing the decision of the OP,
and (2) whether the Supreme Court may entertain the instant petition despite the absence of a prior
motion for reconsideration filed by petitioners with the OP.
After a very careful and meticulous review of the parties respective positions on these matters,
we find that this Court possesses the requisite power to assume jurisdiction and rule on the petition.
It is not the first time that similar procedural challenges have been brought before this
Court. Just recently, in the case of Fortich, et al. v. Corona, et al.,[23] we again had an occasion to
clarify our position on these questions. By way of backgrounder, said case involved the so-called
Win-Win Resolution of the OP which modified tha approval of the conversion to agro-industrial
area of a 144-hectare land located in San Vicente, Sumilao, Bukidnon. As in this case, the OSG
opposed said petition on the ground that the same should have been filed with the Court of Appeals
since what was sought to be reviewed was the OPs decision. Facing said issues squarely, we
explained that we did not find any reason why such petition should not have been filed in this
Court, holding that:

But the Supreme Court has the full discretionary power to take cognizance of the
petition filed directly to it if compelling reasons, or the nature and importance of the
issues raised, warrant.This has been the judicial policy to be observed and which has
been reiterated in subsequent cases, namely: Uy vs. Contreras, et al., Torres vs.
Arranz, Bercero vs. De Guzman, and Advincula vs. Legaspi, et al. As we have further
stated in Cuaresma:

x x x. A direct invocation of the Supreme Courts original jurisdiction to issue these

writs should be allowed only when there are special and important reasons therefore,
clearly and specifically set out in the petition. This is established policy. It is a policy
that is necessary to prevent inordinate demands upon the Courts time and attention
which are better devoted to those matters within its exclusive jurisdiction, and to
prevent further over-crowding of the Courts docket.

Pursuant to said judicial policy, we resolve to take primary jurisdiction over the
present petition in the interest of speedy justice and to avoid future litigations (sic) so
as to promptly put an end to the present controversy which, as correctly observed by
petitioners, has sparked national interest because of the magnitude of the problem
created by the issuance of the assailed resolution.Moreover, as will be discussed
later, we find the assailed resolution wholly void and requiring the petitioners to file
their petition first with the Court of Appeals would only result in a waste of time and
money.

That the Court has the power to set aside its own rules in the higher interests of justice
is well-entrenched in our jurisprudence. We reiterate what we said in Piczon v. Court
of Appeals:

Be it remembered that rules of procedure are but mere tools designed to facilitate the
attainment of justice. Their strict and rigid application, which would result in
technicalities that tend to frustrate rather than promote substantial justice, must always
be avoided. Time and again, this Court has suspended its own rules and excepted a
particular case from their operation whenever the higher interests of justice so
require. In the instant petition, we forego a lengthy disquisition of the proper
procedure that should have been taken by the parties involved and proceed directly to
the merits of the case. [Underscoring supplied, citations omitted].

In like manner, it is our considered view now that the instant petition has been properly
brought before us in light of the importance of the subject matter and the transcendental nature of
the issues raised. Realignment, as explained in the pleadings, is a common practice borne out of
necessity and sanctioned by law. Just how such a common practice may be carried out within the
bounds of law, considering the fact that public funds are at stake, is, we believe, an issue that is
not only one of the first impression, but likewise of considerable significance as a guide to local
governance. Furthermore, as will be discussed later, the assailed decision of the OP has been
tainted with grave abuse of discretion, thus, requiring the immediate exercise of this Courts
corrective power lest public welfare, more particularly that of the Caloocan City constituents, be
jeopardized by a more circumlocutory procedure which respondents are now insisting upon.
 With respect to the alleged non-exhaustion of administrative remedies, we do not see the same
as a fatal procedural lapse that would prevent us from entertaining the more pressing questions
raised in this case. In any event, jurisprudence is replete with instances instructing us that a motion
for reconsideration is neither always a prerequisite nor a hard-and-fast rule to be followed where
there are particularly exceptional attendant circumstances such as, in the instant case, patent nullity
of the questioned act and the necessity of resolving the issues without further delay.[24]
Having therefore disposed of the procedural questions, we now turn our attention to the more
crucial substantive issues, namely:
1. Whether the Office of the President gravely abused its discretion when it found petitioners
guilty of misconduct for the reason that Ordinance No. 0254, Series of 1998, was allegedly
tainted with irregularity;
2. Whether Ordinance No. 0254, Series of 1998, violated Section 326 of the Local Government
Code of 1991 on reversion of unexpended balances of appropriations;
3. Whether Ordinance No. 0254, Series of 1998, complied with Section 321 of the Local
Government Code of 1991 requiring that changes in the annual budget should be supported
by funds actually available; and
4. Whether Ordinance No. 0254, Series of 1998, was valid considering that prior to its passage
there was as yet no formal adoption of rules of procedure by the Caloocan City Sangguniang
Panlungsod.
As stated earlier, the OP found petitioners guilty of misconduct on the ground that they failed
to strictly comply with certain provisions of the Code relating to the passage of the ordinance in
question. It justified its position, thus:

By respondents (sic) very own admission --- and these facts are a matter of record ---
the P39,352,047.75 appropriated in Ordinance 0254 to fund the approved items listed
therein was merely a portion of the P50 Million included and appropriated in the 1998
Annual Budget for expropriation purpose and that the judicial action for expropriation
--- earlier filed by the city and for which an allocation of P39,352,047.75 out of the
P50 Million appropriation for expropriation of properties --- is still pending with the
court. This being so, the amount allocated for the expropriation cannot be reverted or
be deemed as savings to serve as funds actually available for the supplemental budget.

It cannot be argued that the unexpected turn of events mentioned by the respondents --
- referring to the filing by CLT Realty on August 6, 1997 of a complaint against the
Municipality of Malabon and the City of Caloocan for interpleader amounts to
an unavoidable discontinuance of the expropriation project, and thus effectively
converted the earlier expropriation (sic) of P39,352,047.75 into SAVINGS. For one, it
was only on March 23, 1998, that the City of Caloocan filed an expropriation case
against CLT Realty (docketed as Special Case No. 548 Regional Trial Court,
Caloocan City). If, as respondents argue, the August 6, 1997 interpleader suit
amounted to the unavoidable discontinuance of the expropriation project, thus
effectively turning the earlier appropriation of P39,352,047.75 into savings, then how
explain the March 23, 1998 expropriation case? For another, the records do not
indicate --- not even an allegation to this effect--- that the City of Caloocan has
withdrawn the expropriation case aforementioned which is, ordinarily, the legal route
taken in the event of abandonment of discontinuance of the expropriation project. On
the contrary, the city government, as indicated in its judicial pleadings that now form
part of the records, even sought the issuance of a writ of possession.

In this light, it is all too clear that Ordinance No. 0254 was enacted without funds
actually available as required by Section 321 of the Local Government Code of 1991,
which pertinently reads ---

xxxxxxxxx

The words actually available are so clear and certain that interpretation is neither
required nor permitted. The application of this legal standard to the facts of this case
compels the conclusion that, there being no reversion, as above-explained, the
supplemental budget was not supported by funds actually available, by funds really in
the custody or possession of the treasurer.

Stated differently, it may be that the City Treasurer of Caloocan, vis-a-vis Ordinance
No. 0254, issued a certificate of availability of funds (Annex 9, answer). The issuance,
however cannot alter the reality that the funds referred to therein are not funds
actually available because they are sourced or are to be sourced from an appropriation
for a capital outlay which cannot be validly reverted or converted into savings, as
respondents put it, on ground of unavoidable discontinuance of the expropriation
project.

Adding significance to the conclusion reached herein is the fact that the enactment by
the respondents of the supplemental budget was clearly tainted with undue haste. The
sangguniang panlungsod conducted the three (3) readings (the 1st the 2nd and 3rd) on
the same day, July 2, 1998, its first day of session, adopted it on July 7, 1998, and
approved by respondent mayor on the following day, July 8, 1998, without first
having itself organized and its rules of procedure adopted and without first electing its
officers and chairmen and the members of the different committees in accordance
with [the] provisions of the LGC (see Secs. 50 & 52, RA 7162). This undue haste
implies willful failure to respond to or comply with what the law requires which is the
essence of bad faith.

xxxxxxxxx

We are thus one with the DILG in finding respondents guilty of violating Section 321
in relation to Section 332 of the Local Government Code of 1991. This violation
constitutes misconduct, an offense implying a wrongful intent, an unlawful behavior
in relation to the office, one that usually involves a transgression of some established
and definite rule of action, more particularly unlawful behavior by the public
officer. [Citations omitted].[25]

We cannot, however, agree with the above disquisition.

The OPs premise, in our opinion, rests upon an erroneous appreciation of the facts on
record. The OP seems to have been confused as to the figures and amounts actually involved. A
meticulous analysis of the records would show that there is really no basis to support the OPs
contention that the amount of P39,352,047.75 was appropriated under Ordinance No. 0254, S.
1998, since in truth and in fact, what was appropriated in said ordinance was the amount of
P39,343,028.00. The allocation of P39,352,047.75 is to be found in the earlier Ordinance No.
0246, S. 1997 which is a separate and distinct ordinance. This point of clarification is indeed very
critical and must be emphasized at this juncture because any further discussion would have to
depend upon the accuracy of the figures and amounts being discussed. As will be explained below,
this faulty appreciation of the facts by the OP caused it to arrive at the wrong conclusion even if it
would have correctly interpreted and applied the pertinent statutory provisions.
Section 322 of the Code upon which the OP anchored its opinion that petitioners breached a
statutory mandate provides:

SEC 322. Reversion of Unexpended Balances of Appropriations, Continuing

Appropriations. Unexepended balances of appropriations authorized in the annual
appropriations ordinance shall revert to the unappropriated surplus of the general
funds at the end of the fiscal year and shall not thereafter be available for expenditure
except by subsequent enactment. However, appropriations for capital outlays shall
continue and remain valid until fully spent, reverted or the project is
completed. Reversions of continuing appropriations shall not be allowed unless
obligations therefor have been fully paid or otherwise settled.

Based on the above provision, the OP reached the determination that Ordinance No. 0254, S.
1998 could not have lawfully realigned the amount of P39,352,047.75 which was previously
appropriated for the expropriation of Lot 26 of the Maysilo Estate since such appropriation was in
the nature of a capital outlay until fully spent, reverted; or the project for which it is earmarked is
completed.
The question, however, is not whether the appropriation of P39,352,047.75 could fall under
the definitions of continuing appropriation[26] and capital outlays,[27] considering that such amount
was not the subject of the realignment made by Ordinance No. 0254, Series of 1998. Rather, the
issue is whether petitioners are liable for their actions in regard to said ordinance which actually
realigned a position of the P50 million which was simply denominated in a general manner as
Expropriation of Properties and classified under Current Operating Expenditures in the 1998
Annual Budget of Caloocan City. Clearly, these are two distinct amounts separate from each
other. That this is the case has likewise been clarified in the pleadings and during the oral argument
where petitioners adequately explained that the P50 million was NOT appropriated for the purpose
of purchasing Lot 26 of the Maysilo Estate but rather for expenses incidental to expropriation such
as relocation of squatters, appraissal fee, expenses for publication, mobilization fees, and expenses
for preliminary studies.[28] This position appears to us more convincing than that of the
interpretation of respondents. The appropriation of P39,352,047.75 under Ordinance No. 0246, S.
1997 is, we believe, still a subsisting appropriation that has never been lumped together with other
funds to arrive at the sum of P50 million allocated in the 1998 budget. To be sure, denomination
of the P50 million amount as Expropriation of Properties left much to be desired and would have
been confused with the appropriation for expropriation under Ordinance No. 0246, S, 1997, but
had respondents probed deeper into the actual intention for which said amount was allocated, then
they would have reached an accurate characterization of the P50 million.
Bearing in mind, therefore, the fact that it is the P50 million which is now being realigned,
the next logical question to ask is whether such amount is capable of being lawfully realigned.To
this, we answer in the affirmative.
No less than respondents themselves argued, citing Sections 321 and 322 in relation to Section
306 (d) and (e) of the Code, that realignment shall not be allowed when what is involved are
continuing appropriations or capital outlays. But this argument becomes clearly inapplicable in
view of our disquisition above that the realignment being complained of had nothing to do with
the P39,352,047.75 appropriation for the purchase of Lot 26 of the Maysilo Estate which is clearly
the one that is classifiable as a capital outlay or a continuing appropriation. The realignment, as
we have earlier discussed, pertained to the P50 million which was classified as Current Operating
Expenditures. Having been determined as such by the local council upon which legislative
discretion is granted, then the statutory proscription does not, therefore, apply and respondents
cannot insist that it should.
Moreover, in view of the fact that what is being realigned is the P50 million appropriation
which is classified, neither as a capital outlay nor a continuing appropriation, then respondents
position that Ordinance No. 0254, S. 1998 was enacted without funds actually available and in
violation of Section 321 of the Code likewise falls flat on its face. This is notwithstanding
respondents assertion that the unaviodable discontinuance of the expropriation proceedings for Lot
26 could not have automatically converted the appropriated amount therefor into savings.For one
thing, the Code appears silent and respondents themselves have not shown how unexpected
balances of appropriations revert to the general fund. Likewise, it would be pointless to belabor
this matter because it has been brought out precisely on the assumption that the amount of
P39,352,047.75, has no more leg to stand on, as explained earlier.
As to the alleged violation of Sections 50 and 52 of the Code requiring the adoption of house
rules and the organization of the council, we believe that the same hardly merits even cursory
consideration. We cannot infer the mandate of the Code that no other business may be transacted
on the first regular session except to take up the matter of adopting or updating rules. All that the
law requires is that on the first regular session the sanggunian concerned shall adopt or update its
existing rules or procedure. There is nothing in the language thereof that restricts the matters to be
taken up during the first regular session merely to the adoption or updating of the house rules. If it
were the intent of Congress to limit the business of the local council to such matters, then it would
have done so in clear and unequivocal terms. But as it is, there is no such intent.
Moreover, adoption or updating of house rules would necessarily entail work beyond the day
of the first regular session. In fact, it took the members of the Sangguniang Panlungsod of
Caloocan City until July 23, 1998 to complete the task of adopting their house rules. Does this
mean that prior thereto, the local councils hands were tied and could not act on any other
matter?That would certainly be absurd for it would result in a hiatus and a paralysis in the local
legislatures work which could not have been intended by the law. Interpretatio talis in ambiguis
semper frienda est, ut evitatur inconveniens et absurdum. Where there is ambiguity, such
interpretation as will avoid inconvenience and absurdity is to be adopted.[29] We believe that there
has been sufficient compliance with the Code when on the first regular session,
the Sanggunian took up the matter of adopting a set of house rules as duly evidenced by the
KATITIKAN NG KARANIWANG PULONG NG SANGGUNIANG PANLUNGSOD NA
GINANAP NOONG IKA-2 NG HULYO, 1998 SA BAGONG GUSALI NG PAMAHALAANG
LUNGSOD NG CALOOCAN[30] where Item No. 3 thereof specifically mentioned the request for
creation of an ad hoc committee to study the existing house rules.
The foregoing explanation leads us to the ineluctable conclusion that, indeed, respondents
committed grave abuse of discretion.[31] Not only are their reasoning flawed but are likewise
lacking in factual and legal support. Misconduct, being a grave administrative offense for which
petitioners stood charged, cannot be treated cavalierly. There must be clear and convincing proof
on record that petitioners were motivated by wrongful intent,[32] committed unlawful behavior in
relation to their respective offices,[33] or transgressed some established and definite rules of
action.[34] But as we have stressed above, petitioners were acting within legal bounds. Respondents
seem to have turned a blind eye or simply refused to consider facts that would have enlightened
them and exculpated herein petitioners to such an extent that they arrived at their erroneous
conclusion. In view hereof, this Court is justified in striking down the impugned act of the Office
of the President.
Two motions filed in accordance with procedural rules were ignored by the Office of the
President and left unresolved: first, the February 7, 1999 Motion to Refer the Case to the DBM
and second, the Manifestation and Very Urgent Motion to Suspend Proceedings on the ground that
the determination of the validity of said ordinance was a prejudicial question. Motions need not
necessarily grant what movant is asking for, but they must be acknowledged and resolved. The
Office of the President, being the powerful office that law and tradition have endowed it, needs no
mighty blows on the anvil of authority to ensure obedience to its pronouncements. It would be
more in keeping with its exalted stature if its actions could safeguard the very freedoms so
sedulously nurtured by the people. Even what it may deem minor lapses, emanating as it does from
such an exalted office, should not be allowed to go unchecked lest our democratic institutions be
gradually eroded.
WHEREFORE, the instant petition is hereby GRANTED. The assailed decision of the Office
of the President in O.P. Case No. 98-H-8520 dated March 15, 1999 is ANNULLED and SET
ASIDE for having been rendered with grave abuse of discretion amounting to lack and/or excess
of jurisdiction. Consequently, respondents, their subordinates, agents, representatives, and
successors-in-interest are permanently enjoined from enforcing or causing the execution in any
manner of the aforesaid decision against herein petitioners.
No pronouncement as to costs.
SO ORDERED.
 Bellosillo, Melo, Puno, Vitug, Mendoza, Panganiban, Purisima, Buena, and Gonzaga-Reyes,
JJ., concur.
Quisumbing, J., in the result.
Kapunan, J., see dissenting opinion.
Pardo, and Ynares-Santiago, JJ., join the dissent of J. Kapunan.
Davide, Jr., C.J., on leave.