Allarde vs. Commission on Audit

Only transportation, living, and representation allowances that are commutable in character and constitute an integral part of a judge's remuneration may be included in the computation of the five-year lump sum retirement gratuity under Republic Act No. 910, as amended by Presidential Decree No. 1438; reimbursable expense allowances and discretionary honoraria from local governments are excluded.

Petitioner Rodolfo T. Allarde served as Presiding Judge of Branch LXXX, Metropolitan Trial Court in Muntinlupa, Metro Manila, until his courtesy resignation was accepted on January 13, 1987. He applied for retirement under Republic Act No. 910, as amended by Presidential Decree No. 1438, which this Court approved on July 11, 1989. During his incumbency, he received a P4,000 monthly allowance from the Municipality of Muntinlupa, authorized under Letter of Instruction No. 1418, which permits local governments to pay additional allowances to judges within their territorial jurisdictions out of available local funds.

Petitioner Rodolfo T. Allarde was the Presiding Judge of Branch LXXX, Metropolitan Trial Court in Muntinlupa, Metro Manila. During his incumbency, he received a P4,000 monthly allowance from the Municipality of Muntinlupa. His courtesy resignation was accepted on January 13, 1987, and he thereafter applied for retirement under Republic Act No. 910, as amended by Presidential Decree No. 1438, which the Supreme Court approved on July 11, 1989.

In computing his total retirement pay, the Government Service Insurance System included the amount of P240,000, representing the five-year lump sum of the P4,000 monthly allowance, on the condition that said lump sum be charged to the funds of the municipality pursuant to Section 30 of Batas Pambansa Blg. 866 and subject to the availability of funds. On April 16, 1990, the Sangguniang Bayan of Muntinlupa, by Resolution No. 90-145, appropriated and awarded the P240,000 in favor of the petitioner.

Petitioner's claim for payment of that additional retirement benefit reached the Metro Manila Authority, which denied it on the ground that the Commission on Audit had already ruled in similar cases that allowances of the kind granted by the Municipal Government of Muntinlupa were expense items not to be equated with compensation for purposes of computing retirement benefits. On April 4, 1991, petitioner filed his claim with the COA, which rendered Decision No. 1877 on June 5, 1991 denying the claim. A memorandum and motion for reconsideration filed on September 9, 1991 was denied by COA Decision No. 1983 dated November 5, 1991, and a second motion for reconsideration was likewise denied by COA Decision No. 2159 dated January 27, 1992.

The COA found, upon examination of a sample disbursement voucher that petitioner used when claiming the allowance, that the P4,000 was in the nature of reimbursement for expenses which petitioner certified "were incurred by me while performing my duties." The allowance was non-commutable or reimbursable in character, and there was no indication that it was a transportation, living, or representation allowance.

• Statutory Basis: Petitioner anchored his claim on Section 3 of Republic Act No. 910, as amended by Presidential Decree No. 1438, arguing that the P4,000 monthly allowance he received from the Municipality of Muntinlupa should be included in the computation of his five-year lump sum retirement benefits.

• Nature of Allowance: Respondent Commission on Audit countered that the allowances petitioner collected from the Municipality of Muntinlupa were non-commutable or reimbursable in nature, as evidenced by the sample disbursement voucher requiring certification that expenses were incurred while performing duties, and therefore could not be equated with salary or compensation for retirement purposes.
• Discretionary Character: The Solicitor General argued that the use of the word "may" in Letter of Instruction No. 1418 signified that the allowance could not be demanded as a matter of right but was entirely dependent on the will of the municipality, making it an honorarium rather than an integral part of the judge's remuneration.
• Equality Among Judges: The Solicitor General further observed that including the discretionary allowance in retirement computations would produce inequality and disparity among judges, as wealthier municipalities could give more generous allowances while poorer ones could give less or none, leading to unseemly jockeying for assignment in affluent areas.

• Includibility of Allowance: Whether the P4,000 monthly allowance that petitioner received from the Municipality of Muntinlupa should be included in the computation of his retirement benefits under Republic Act No. 910, as amended by Presidential Decree No. 1438.

• Includibility of Allowance: No. The allowance was a reimbursable expense item, not a transportation, living, or representation allowance, and therefore cannot be included in the computation of retirement benefits under Section 3 of PD 1438, which expressly limits includible allowances to those three categories.

• Includibility of Allowance: Section 3 of Republic Act No. 910, as amended by Presidential Decree No. 1438, provides that the five-year lump sum gratuity is computed on the basis of "the highest monthly salary plus the highest monthly aggregate of transportation, living and representation allowances." The law's language is clear and unambiguous, and under the elementary principle of statutory construction, where the words of a statute are not obscure, the legislative intent must be determined from the language employed, leaving no room for construction. By the doctrine of inclusio unius est exclusio alterius, the express enumeration of transportation, living, and representation allowances excludes all other allowances. Petitioner failed to prove that the P4,000 allowance was any of these three types; the sample disbursement voucher he used showed it was a reimbursement for expenses incurred while performing his duties. The COA correctly distinguished commutable allowances that constitute integral parts of remuneration from non-commutable, reimbursable expense items. Furthermore, Letter of Instruction No. 1418, which authorizes local governments to pay additional allowances to judges, uses the word "may," signifying that the allowance is discretionary and dependent on the liberality of the municipality, not demandable as a matter of right. It should be treated as an honorarium — an amount given not as a matter of obligation but in appreciation for services rendered. Including such a discretionary allowance in retirement computations would produce inequality and disparity among judges of the same rank, as wealthier municipalities could give more generous allowances while poorer ones could give less or none, leading to unseemly jockeying for assignments in affluent areas — a result the retirement law was not intended to produce.

• Inclusio unius est exclusio alterius — The express mention of one thing implies the exclusion of others. The Court applied this canon of statutory construction to Section 3 of PD 1438, holding that because the law expressly limited includible allowances to "transportation, living and representation allowances," all other allowances were excluded from the computation of retirement benefits.
• Plain Meaning Rule (Verba legis) — Where the words and phrases of a statute are not obscure or ambiguous, the meaning and intention of the legislature should be determined from the language employed, and where there is no ambiguity, there is no room for construction. The Court applied this principle to hold that the clear and unambiguous provisions of Section 3, PD 1438, should be given their plain and natural meaning.
• Nature of Honorarium — An honorarium is an amount given not as a matter of obligation but in appreciation for services rendered, a voluntary donation in consideration for services which admit of no compensation in money. The Court applied this doctrine to characterize the discretionary allowance under LOI 1418, which used the word "may," as an honorarium rather than an integral part of a judge's remuneration.

• "As clearly specified in the law, only transportation, living and representation allowances may be included in the computation of the firstfive-year lump sum retirement benefits for members of the judiciary." — This passage states the ratio decidendi, applying the plain meaning of Section 3 of PD 1438 to exclude all allowances other than the three enumerated categories from retirement benefit computations.
• "Inasmuch as the law limits the computation of the lump sum of 5 years' gratuity to 'the highest monthly salary plus the highest monthly aggregate of transportation, living and representation allowances that the judge was receiving on the date of his retirement,' it is understood that other allowances are excluded. Inclusio unius est exclusio alterius." — This passage applies the doctrine of inclusio unius est exclusio alterius as the controlling canon of construction to resolve the issue.
• "such additional allowance does not constitute an integral part of the judge's remuneration for it may or may not be given by the local government and it is dependent on the liberality of the latter." — This passage articulates the policy rationale for excluding discretionary local government allowances from retirement computations, grounding the distinction between commutable compensation and discretionary honoraria.

• Provincial Board of Cebu vs. Presiding Judge of Cebu, CFI, Branch IV, 171 SCRA 1 — Cited as controlling authority for the principle that where the words of a statute are not obscure or ambiguous, legislative intent must be determined from the language employed, and where there is no ambiguity, there is no room for construction.
• Santiago vs. Commission on Audit, 199 SCRA 128, 130 — Cited for the definition of an honorarium as an amount given not as a matter of obligation but in appreciation for services rendered, a voluntary donation in consideration for services which admit of no compensation in money.

• Section 3, Republic Act No. 910, as amended by Presidential Decree No. 1438 — Provides that upon retirement, a justice or judge is entitled to a lump sum of five years' gratuity computed on the basis of the highest monthly salary plus the highest monthly aggregate of transportation, living, and representation allowances received on the date of retirement. Applied to limit includible allowances to the three enumerated categories, excluding the petitioner's reimbursable expense allowance.
• Letter of Instruction No. 1418 — Authorizes provincial, city, and municipal governments to pay additional allowances to members and personnel of the judiciary assigned in their respective areas out of available local funds, not exceeding P1,500 (or P3,000 in Metropolitan Manila). Applied to show that the allowance is discretionary — the use of "may" signifying it cannot be demanded as a matter of right and is dependent on the liberality of the local government.
• Section 30, Batas Pambansa Blg. 866 — Referenced in connection with the GSIS computation requiring that the lump sum be charged to the funds of the municipality, subject to the availability of funds.

Narvasa, C.J., Gutierrez, Jr., Cruz, Feliciano, Padilla, Bidin, Regalado, Davide, Jr., Romero, Nocon, Bellosillo, Melo, and Campos, Jr., JJ., concur.