Pilar vs. Sanguniang Bayan of Dasol, Pangasinan

A public officer who, in gross and evident bad faith, refuses or neglects without just cause to perform a duty — such as vetoing an appropriation for a subordinate's lawful salary when sufficient municipal funds exist — is personally liable for actual, moral, and exemplary damages as well as attorney's fees.

Petitioner Expedito B. Pilar was elected Vice Mayor of Dasol, Pangasinan in the 1980 local elections, with Lodovico Espinosa as Municipal Mayor. Under Batas Pambansa Blg. 51, as implemented by Circular No. 9-A of the Joint Commission on Local Government and Personnel Administration, the position of vice mayor was entitled to an annual salary of P16,044.00, equivalent to that of the municipal treasurer. The Sanguniang Bayan, the municipal legislative body, was responsible for appropriating funds for the payment of salaries of municipal officials.

Petitioner Expedito B. Pilar was elected Vice Mayor of Dasol, Pangasinan in the 1980 local elections, alongside Lodovico Espinosa as Municipal Mayor and several members of the Sanguniang Bayan. All assumed office on March 1, 1980, with additional members joining the body later. On March 4, 1980, the Sanguniang Bayan adopted Resolution No. 1, which increased the annual salaries of the mayor and municipal treasurer to P18,636.00 and P16,044.00, respectively, but made no provision for the vice mayor's salary, notwithstanding that the position was entitled to P16,044.00 per annum under Circular No. 9-A of the Joint Commission on Local Government and Personnel Administration.

Petitioner questioned the omission and wrote letters to the proper authorities seeking correction. Provincial and national officials endorsed compliance with Circular No. 9-A, and the Executive Secretary of the Commission advised the mayor that the municipality should pay the vice mayor the salary equivalent to that of the municipal treasurer per Circular No. 15. On December 12, 1980, the Sanguniang Bayan enacted a resolution appropriating only P500 per month as petitioner's salary, an amount later increased to P774 per month in December 1981 — both far below the prescribed rate.

On October 26, 1982, the Sanguniang Bayan enacted a resolution appropriating P15,144.00 as payment of petitioner's unpaid salaries from January 1, 1981 to December 31, 1982. Respondent Mayor Lodovico Espinosa vetoed the resolution, prompting petitioner to file the present petition for mandamus on February 16, 1983. Respondents contended that the petition was premature for failure to exhaust administrative remedies, that it involved a question of fact beyond the Supreme Court's jurisdiction, and that it had been rendered moot by an appropriation ordinance enacted on April 20, 1983, which included P29,985.00 for petitioner's salary differentials. In his memorandum, petitioner admitted that he had been fully paid of his salaries as provided under Batas Pambansa Blg. 51 and Circular No. 9-A, thereby rendering the salary claim moot. The Court nonetheless found that respondent Mayor had acted in gross and evident bad faith in vetoing the October 26, 1982 resolution, given the existence of sufficient municipal funds, and that petitioner had been forced to litigate for three years to recover his plainly valid and demandable claim.

• Exhaustion of Administrative Remedies: Petitioner argued that there was no violation of the doctrine of exhaustion of administrative remedies because the writ of mandamus offered him an adequate and speedy remedy, and the doctrine may be dispensed with when the issue is purely legal — specifically, whether the appropriation of a vice mayor's salary is a discretionary or ministerial act.
• Jurisdiction over Factual Issues: Petitioner maintained that the only factual issue involved was the ascertainment of damages, and that the existence of municipal funds was no longer a factual issue due to the municipal treasurer's certification as to the existence of such funds.
• Mootness: Petitioner contended that the issue had not become moot and academic because there was no guarantee that actual payment would be made even after the enactment of an appropriation resolution.

• Premature Filing: Respondents alleged that the petition was premature because petitioner did not exhaust all administrative remedies, contending that he should have lodged his complaint first with the Ministry of Local Government and Community Development.
• Lack of Jurisdiction: Respondents argued that the petition involved a question of fact — the availability or non-availability of municipal funds — which is not cognizable by the Supreme Court.
• Mootness: Respondents asserted that the petition had become moot and academic because on April 20, 1983, the Sanguniang Bayan enacted an appropriation ordinance appropriating P29,985.00 as payment of salary differentials of the petitioner pursuant to Supplemental Budget No. 3, Gen. Fund, C.Y. 1983.

• Mootness: Whether the petition has been rendered moot and academic by the subsequent appropriation and payment of petitioner's salary claims.
• Damages and Attorney's Fees: Whether petitioner is entitled to damages and attorney's fees notwithstanding the mootness of the salary claim, and whether respondent Mayor should be held personally liable therefor.

• Mootness: Yes. The case is moot and academic, petitioner having admitted in his memorandum that he had been fully paid of his salaries under Batas Pambansa Blg. 51 and Circular No. 9-A.
• Damages and Attorney's Fees: Yes. Petitioner is entitled to actual, moral, and exemplary damages plus attorney's fees, all payable personally by respondent Mayor, because the mayor acted in gross and evident bad faith in vetoing without just cause the resolution appropriating petitioner's salary, thereby forcing petitioner to litigate for three years to claim his plainly valid and demandable claim.

• Mootness: Since petitioner admitted in his memorandum that he had already been fully paid of his salaries as provided under Batas Pambansa Blg. 51 and implemented by Circular No. 9-A, the principal relief sought — payment of unpaid salaries — had been satisfied. The Court therefore declared the petition moot and academic, as there was no longer any live controversy requiring adjudication on the salary claim itself.

• Damages and Attorney's Fees: Notwithstanding the mootness of the salary claim, the Court found that petitioner was entitled to damages and attorney's fees under Article 2208(2) and (5) of the New Civil Code, which authorize recovery of attorney's fees when the defendant's act or omission has compelled the plaintiff to litigate with third persons or to incur expenses to protect his interest, and in cases where the defendant acted in gross and evident bad faith in refusing to satisfy the plaintiff's plainly valid, just, and demandable claim. The facts showed that petitioner was forced to litigate to recover his lawful salary, which had been unduly denied him for three years. Respondent Mayor Lodovico Espinosa was identified as solely responsible: he vetoed without just cause the October 26, 1982 Sanguniang Bayan resolution appropriating petitioner's salary, notwithstanding the existence of sufficient municipal funds. While the act of vetoing involves the exercise of discretion, the mayor exceeded his authority in an arbitrary manner. His refusal, neglect, or omission to comply with the directives of the Provincial Budget Officer and the Director of the Bureau of Local Government was reckless and oppressive, warranting exemplary or corrective damages by way of example or correction for the public good. Actual damages and costs of litigation were reduced from P13,643.50 to P5,000.00; moral damages of P5,000.00 were awarded for mental anguish, serious anxiety, wounded feelings, moral shock, social humiliation, and similar injury; exemplary damages of P5,000.00 were imposed; and attorney's fees of P5,000.00 were awarded. All sums were ordered paid personally by respondent Mayor from his private funds.

• Personal Liability of Public Officers for Bad Faith — A public officer who acts in gross and evident bad faith in refusing to satisfy a plainly valid, just, and demandable claim is personally liable for damages, including actual, moral, and exemplary damages, as well as attorney's fees. The Court applied this by holding respondent Mayor personally liable for vetoing the salary appropriation without just cause, thereby forcing petitioner to litigate for three years. The liability is personal — payable from the officer's private funds, not public funds.

• Moot and Academic Doctrine — When the principal relief sought has been satisfied or the controversy has ceased to present a justiciable controversy, the case is rendered moot and academic. The Court applied this by declaring the petition moot after petitioner admitted full payment of his salary claims, but proceeded to adjudicate the ancillary issue of damages, which remained a live controversy.

• Veto Power Exercised Arbitrarily — While the power to veto or not to veto involves the exercise of discretion, a mayor exceeds his authority when he vetoes a resolution arbitrarily — particularly where sufficient municipal funds exist to satisfy the appropriation. The Court found that respondent Mayor's veto of the October 26, 1982 resolution was made without just cause and in the face of sufficient funds, constituting gross and evident bad faith.

• "We find and rule that petitioner is entitled to damages and attorney's fees because the facts show that petitioner was forced to litigate in order to claim his lawful salary which was unduly denied him for three (3) years and that the Mayor acted in gross and evident bad faith in refusing to satisfy petitioner's plainly valid, just and demandable claim." — This passage states the ratio decidendi for the award of damages, linking the mayor's bad faith to the statutory basis under Article 2208(2) and (5) of the New Civil Code.

• "While 'to veto or not to veto involves the exercise of discretion' as contended by respondents, respondent Mayor, however, exceeded his authority in an arbitrary manner when he vetoed the resolution since there exists sufficient municipal funds from which the salary of the petitioner could be paid." — This passage defines the boundary between lawful exercise of veto discretion and arbitrary excess of authority, a principle relevant to local government law.

• "All the above sums as damages including attorney's fees in the amount of P5,000.00 shall be paid personally by respondent Mayor Lodovico Espinosa from his private funds." — This passage establishes that damages for bad faith of a public officer are personal, not chargeable against public funds.

• Javellana vs. Tayo, 116 Phil. 1342 — Cited in the concurring opinion of Aquino, J., as authority for the proposition that a municipal mayor may be adjudged liable for moral damages and attorney's fees for failure to perform his official duty, specifically for failure to sign payrolls for the per diems of councilors. Applied by analogy to hold respondent Mayor personally liable for damages.

• Guerrero vs. Carbonell, 6 Phil. 977 — Cited in the concurring opinion as authority for the propriety of mandamus as the remedy resorted to by the petitioner.

• Bernardo vs. Pascual, 93 Phil. 345 — Cited in the concurring opinion, together with Guerrero vs. Carbonell, as authority for the propriety of mandamus in cases of this nature.

• Batas Pambansa Blg. 51 — The governing law prescribing the salary entitlement of the vice mayor, as implemented by Circular No. 9-A of the Joint Commission on Local Government and Personnel Administration, which fixed the vice mayor's annual salary at P16,044.00.

• Circular No. 9-A, Joint Commission on Local Government and Personnel Administration — The implementing circular that prescribed the revised salary rates for local government officials, including the vice mayor's entitlement to P16,044.00 per annum, equivalent to the municipal treasurer's salary.

• Article 2208(2) and (5), New Civil Code — Authorizes the award of attorney's fees where the defendant's act or omission has compelled the plaintiff to litigate with third persons or to incur expenses to protect his interest (par. 2), and where the defendant acted in gross and evident bad faith in refusing to satisfy the plaintiff's plainly valid, just, and demandable claim (par. 5). Applied to hold respondent Mayor liable for attorney's fees.

• Article 27, Civil Code — Cited in the concurring opinion; makes a public servant or employee liable for damages for refusal or neglect, without just cause, to perform his official duty. Applied as the governing law for the mayor's personal liability.

• Article 2219(10), Civil Code — Cited in the concurring opinion; allows moral damages in an action under Article 27 of the Civil Code.

• Section 4, Rule 65, Rules of Court — Cited in the concurring opinion; allows the petitioner to recover damages by reason of the respondent's wrongful act in a mandamus proceeding.

Makasiar, Concepcion Jr., Abad Santos, De Castro, and Escolin, JJ., concurred. Aquino, J., filed a separate concurring opinion, arguing that the governing law is Article 27 of the Civil Code, which makes a public servant liable for damages for refusal or neglect to perform his official duty, and citing Javellana vs. Tayo as directly analogous authority. Justice Aquino also invoked Article 2219(10) for moral damages, Section 4 of Rule 65 for recovery of damages in mandamus, and Article 2208 for attorney's fees. He expressed the personal view that P15,000 would have been an adequate aggregate award for moral and exemplary damages, attorney's fees, and litigation expenses, rather than the P20,000 total awarded by the majority.