Republic vs Pasig Rizal

REPUBLIC OF THE PHILIPPINES VS. PASIG RIZAL CO., INC.
[ G.R. No. 213207. February 15, 2022 ] EN BANC

Petitioner: Republic of the Philippines

Respondent: Pasig Rizal Co., Inc.

Ponente: Justice Caguioa

Nature: Petition for review on certiorari filed under Rule 45 against the decision of the CA First Division and Special First Division

Keywords: substantial requirements for registration, RA 11573, Section 7, Public Domain, Public Dominion, Patrimonial Property

Facts: Sometime in 1958, Manuel Dee Ham (Manuel) caused the survey of the Subject Property under Plan Psu-169919. The plan was subsequently approved by the Director of Lands, and the Subject Property was declared in Manuel's name for tax purposes.

Manuel died in 1961. Consequently, the Subject Property was inherited by his surviving wife Esperanza Gerona (Esperanza), and their children, who, in turn, collectively transferred their beneficial ownership over the Subject Property to the Dee Ham family corporation, PRCI. Thereafter, PRCI began paying the real property taxes due in its name.

On November 6, 2009, Esperanza executed an Affidavit to formalize the transfer.

In 2010, Esperanza, as President of PRCI, filed before the RTC an application for original registration of title over the Subject Property, for and on behalf of the latter. There, Esperanza asserted that PRCI is the owner of the Subject Property and all improvements found thereon, and that PRCI and its predecessors in interest have been in open, continuous, exclusive, and notorious possession of the Subject Property for more than fifty (50) years. Esperanza also averred that the Subject Property has neither been encumbered, nor has it been adversely possessed or claimed by any other party.

No opposition was entered against the application after due notice and publication. Thus, an order of general default was entered against the whole world, with the exception of the Republic of the Philippines (Republic).

PRCI presented the following evidence:

a) Approved Survey Plan, Technical Description and Surveyor's Certification of [the Subject Property] showing its area and boundaries;

 

b) Tax Declarations and Tax Receipts proving that since 1956, [the Subject Property] was already declared for tax purposes and the corresponding realty taxes were paid; 

c) Affidavit of Esperanza Gerona establishing the transfer of ownership and possession of the subject realty to [PRCI]; 

d) Certification of the Regional Technical Director of Forest Management Service of the Department of Environment and Natural Resources (DENR) proving that the subject lot is within the alienable and disposable land of public domain, as verified under Project No. 21 of Pasig pursuant to [Land Classification] Map 639 which was approved on [March 11, 1927 and] per ocular inspection on the ground on [September 12, 2011; and 

e) Affidavit of Bernarda Lu, a friend and neighbor of the Dee Ham family, attesting to [PRCI's] ownership of the [Subject Property] and its uninterrupted possession as well as the payment of land taxes thereon.

RTC: Confirmed and affirmed title of PRCI

OSG, (as Republic): Assailed the RTC before the CA via Appeal (Rule 41)

CA: Assailed decision dismissing the Appeal brought by the OSG and held that the evidence presented by PRCI sufficiently established that subject property is alienable and disposable.

Republic: Filed an MR

CA: Denied the MR

Republic: Filed present case and asserts that lands of the public domain become patrimonial only when there is an express government manifestation that the property is no longer retained for public service or the development of national wealth.

Issue: 

Whether PRCI has established that the Subject Property forms part of the alienable and disposable agricultural land of the public domain in accordance with the requirements set by prevailing law.

Held:

PRCI and its predecessors in interest, has been in open, continuous, exclusive, and notorious possession and occupation of the Subject Property since 1956. PRCI application stood unopposed before the RTC when presented evidence to prove that the Subject Property forms part of the alienable and disposable agricultural land of the public domain. Under the new parameters set by Sec. 7 RA 11573, these certifications are not acceptable proof of the required land classification status. Nevertheless, in the interest of substantial justice, bearing in mind the curative nature of RA 11573, and recognizing the long period of possession by PRCI, the Court deems it proper to remand the case to the CA for the reception of evidence on the Subject Property’s land classification status in accordance with Section 7 of RA 11573.

Ruling: 

Petition for review on certiorari by Republic - DENIED in part.

SC also AFFIRMED decision of CA insofar as it holds that Pasig Rizal Co., Inc., by itself and through its predecessors in interest, has been in open, continuous, exclusive, and notorious possession and occupation of the Subject Property since 1956.

The case is REMANDED to the Court of Appeals for reception of evidence on the Subject Property's land classification status based on the parameters set forth in Section 7 of Republic Act No. 11573. Thereafter, the Court of Appeals is directed to resolve the present case in accordance with this Decision with due and deliberate dispatch.

Doctrine:

Land classification under the 1987 Constitution and the Civil Code

The Regalian doctrine has long been recognized as the foundation of the State's property regime and has been consistently adopted under the 1935, 1973, and 1987 Constitutions. In essence, the Regalian doctrine espouses that lands not appearing to be clearly under private ownership are generally presumed to form part of the public domain belonging to the State.

However, this general rule admits of a single exception: native title to land. Claims of private ownership pursuant to native title are presumed to have been held even before the Spanish conquest. Thus, lands subject of native titles are deemed excluded from the mass of lands forming part of the public domain.

Public Domain under the constitution - pertain to all lands owned or held by the state in a public or private capacity.

Public Dominon - pertains to those which are intended for public use, public service, or the development of national wealth, and excludes patrimonial property (held by the State in its private capacity to attain economic ends).

SANTIAGO VS. BAUTISTA

SANTIAGO VS. BAUTISTA

judicial power and judicial function

Teodoro Santiago was a Grade 6 pupil at Sero Elem. School. He was adjudged 3^rd Honors (3^rd placer). 3 days before graduation, Teodoro and his parents sought the invalidation of the ranking of honor students. They filed a CERTIORARI case against the principal and teachers who composed the committee on rating honors.

They contend that the committee acted with grave abuse of official discretion because they claim that

o     the 1^st and 2^nd placers had never been a close rival of Santiago before, except in Grade 5 only.

o    That Santiago was a consistent honor student from Grade 1 to 5

o    that the 1^st placer was coached and tutored by grade 6 teachers during the summer (gaining unfair advantage)

o    The committee was composed only of Grade 6 teachers.

o    That some teachers gave Santos a 75% with an intention to pull him to a much lower rank

o    That in the Honors Certificate in Grade 1,  the word “first place” was erased and replaced with “second place”

o    That the Principal and district supervisors merely passed the buck to each other to delay his grievances.

The respondents filed a MTD claiming that the action was improper, and that even assuming it was proper, the question has become academic (because the graduation already proceeded). 

 Respondents also argue that there was no GADALEJ on the part of the teachers since the Committee on Ratings is not a tribunal, nor board, exercising judicial functions. (under Rule 65, certiorari is a remedy against judicial functions)

ISSUE: may judicial function be exercised in this case? What is judicial power?

SC:

A judicial function is an act performed by virtue of judicial powers. The exercise of judicial function is the doing of something in the nature of the action of the court. In order for an action for certiorari to exist, (TEST TO DETERMINE WHETHER A TRIBUNAL OR BOARD EXERCISES JUDICIAL FUNCTIONS)

1) there must be specific controversy involving rights of persons brought before a tribunal for hearing and determination. , and

2) that the tribunal must have the power and authority to pronounce judgment and render a decision.

3) the tribunal must pertain to that branch of the sovereign which belongs to the judiciary (or at least the not the legislative nor the executive)

It maybe said that the exercise of judicial function is to determine what the law is, and what the legal rights of parties are, with respect to a matter in controversy.

The phrase judicial power is defined:

• as authority to determine the rights of persons or property.
• authority vested in some court, officer or persons to hear and determine when the rights of persons or property or the propriety of doing an act is the subject matter of adjudication.
• The power exercised by courts in hearing and determining cases before them.
• The construction of laws and the adjudication of legal rights.

The so-called Committee for Rating Honor Students are neither judicial nor quasi-judicial bodies in the performance of its assigned task. It is necessary that there be a LAW that gives rise to some specific rights of persons or property under which adverse claims to such rights are made, and the controversy ensuring therefrom is brought in turn, to the tribunal or board clothed with power and authority to determine what that law is and thereupon adjudicate the respective rights of contending parties.

There is nothing about any rule of law that provides for when teachers sit down to assess individual merits of their pupils for purposes of rating them for honors. Worse still, the petitioners have not presented the pertinent provisions of the Service Manual for Teachers which was allegedly violated by the Committee.

The judiciary has no power to reverse the award of the board of judges.

And for that matter, it would not interfere in literary contests, beauty contests, and similar competitions.

Bagatsing vs Committee on Privitization, 246 SCRA 334

Bagatsing v Committee on Privitization 246 SCRA 334

         

PETRON was originally registered with the Securities and Exchange Commission (SEC) in 1966 under the corporate name "Esso Philippines, Inc." (ESSO) as a subsidiary of Esso Eastern, Inc. and Mobil Petroleum Company, Inc.

          

In 1973, at the height of the world-wide oil crisis brought about by the Middle East conflicts, the Philippine government acquired ESSO through the PNOC. ESSO became a wholly-owned company of the government under the corporate name PETRON and as a subsidiary of PNOC.

            

In acquiring PETRON, the government aimed to have a buffer against the vagaries of oil prices in the international market. It was felt that PETRON can serve as a counterfoil against price manipulation that might go unchecked if all the oil companies were foreign-owned. Indeed, PETRON helped alleviate the energy crises that visited the country from 1973 to 1974, 1979 to 1980, and 1990 to 1991.

            

On December 8, 1986, President Corazon C. Aquino promulgated Proclamation No. 50 in the exercise of her legislative power under the Freedom Constitution.

            

The Proclamation is entitled "Proclaiming and Launching a Program for the Expeditious Disposition and Privatization of Certain Government Corporations and/or the Assets thereof, and Creating the Committee on Privatization and the Asset Privatization Trust." Implicit in the Proclamation is the need to raise revenue for the Government and the ideal of leaving business to the private sector. The Government can then concentrate on the delivery of basic services and the performance of vital public functions.

            

On March 25, 1993, the Government Corporate Monitoring and Coordinating Committee (GCMCC) recommended a 100% privatization of PETRON.

            

Petitioners claims, among others, that there was a failed bidding, contend that there were only three bidders. One of them, PETRONAS, submitted a bid lower than the floor price while a second, failed to pre-qualify. Citing Section V-2-a of COA Circular No. 89-296 dated January 27, 1989, they argue that where only one bidder qualifies, there is a failure of public auction.

            

Under said COA Circular, there is a failure of bidding when: 1) there is only one offeror; or (2) when all the offers are non-complying or unacceptable.

In the case at bench, there were three offerors: SAUDI ARAMCO, PETRONAS and WESTMONT.

            

While two offerors were disqualified, PETRONAS for submitting a bid below the floor price and WESTMONT for technical reasons, not all the offerors were disqualified. To constitute a failed bidding under the COA Circular, all the offerors must be disqualified.

            

Petitioners urge that in effect there was only one bidder and that it can not be said that there was a competition on "an equal footing". But the COA Circular does not speak of accepted bids but of offerors, without distinction as to whether they were disqualified.

            

The COA itself, the agency that adopted the rules on bidding procedure to be followed by government offices and corporations, had upheld the validity and legality of the questioned bidding. The interpretation of an agency of its own rules should be given more weight than the interpretation by that agency of the law it is merely tasked to administer.

Philippine Air Lines vs COA, 245 SCRA39

Philippine Air Lines vs COA, 245 SCRA39

FACTS:

            

In this special civil action for certiorari and prohibition, petitioner Philippine Airlines. Inc. (PAL) seeks to review, annul end reverse Decision No. 1127 of the Commission on Audit (COA) dated January 5, 1990 and to prohibit, enjoin and prevent COA from enforcing or in any way implementing Department Order No. 19, s. 1974 of the then Department of General Services as implemented by COA Circular No. 78-84, Memorandum No. 498 and Memorandum No. 88-565. COA Decision No. 1127 required PAL to purchase its fuel requirements solely from Petron Corporation (Petron).

            

PAL is a domestic corporation organized and existing under the Philippine laws, principally engaged in the air transport business, both domestic and international. At the time of the filing of the petition on February 8, 1990, majority of its shares of stock was owned by the Government Service Insurance System (GSIS), a government corporation.

            

To assure itself of continuous, reliable and cost-efficient supply of fuel, PAL adopted a system of bidding out its fuel requirements under a multiple supplier set-up whereby PAL awarded to the lowest bidder sixty percent (60%) of its fuel requirements and to the second lowest bidder the remaining forty percent(40%), provided it matched the price of the lowest bidder.

            

On August 17, 1989, COA wrote PAL a letter  stating “It has come to our attention that PAL international fuel supply contracts are expiring this August 31, 1989. In this connection, you are advised to desist from bidding the company's fuel supply contracts, considering that existing regulations require government-owned or controlled corporations and other agencies of government to procure their petroleum product requirements from PETRON Corporation.”

            

PAL sought reconsideration of the August 17, 1989 advice, reiterating its reasons contained in an earlier letter, for preferring to bid out and secure its fuel supply from more than one supplier and for its contention that Department Order No. 19, s. 1974, as circularized by COA Office Memorandum No. 490, should not apply to PAL. The final appeal for reconsideration however it was denied. Hence this assailed decision.

ISSUE:

            

Whether the Commission on Audit committed grave abuse of discretion amount to lack or excess of jurisdiction in holding that Department Order No. 19,  of the defunct department of general services applies to PAL?

HELD:

            

[the Court is compelled to dismiss the petition pursuant to the government's privitization program, PAL's shares of stock were bidded out earlier this year, resulting in the acquisition by PR Holdings, a private corporation, of 67% PAL's outstanding stocks. PAL having ceased to be a government-owned or controlled corporation, is no longer under the audit jurisdiction of the COA.. Accordingly, the question raised in this petition has clearly become moot and academic.]

            

Had it not been for this supervening event, PAL would have obtained the relief sought in the instant petition. For although COA was correct in ruling that Department Order No. 19 applied to PAL as a government agency at the time, it nonetheless gravely abused its discretion in not exempting PAL therefrom.

            

The COA is clothed under Section 2(2), Article IX-D of the 1987 Constitution with the "exclusive authority, subject to the limitations in this Article, to define the scope of its audit and examination, establish the techniques and methods required therefor, and promulgate accounting and auditing rules, and regulations including those for the prevention and disallowance of irregular, unnecessary, excessive, extravagant or unconscionable expenditures, or uses of government funds and properties." The authority granted under this constitutional provision, being broad and comprehensive enough, enables COA to adopt as its own, simply by reiteration or by reference, without the necessity of repromulgation, already existing rules and regulations. It may also expand the coverage thereof to agencies or instrumentalities under its audit jurisdiction.

            

The reasons given by PAL for seeking exemption from the operation of Department Order No. 19 were, to our mind, meritorious. They far outweigh the policy enunciated in Department Order No. 19 of giving preference to government sources in the filling of the needs of the government for supplies. Thus, PAL's bidding requirement conformed to the accepted policy of the government to subject every transaction/contract to public bidding in order to protect public interest by giving the public the best possible advantages thru open competition and to avoid or preclude suspicion of favoritism and anomalies in the execution of public contracts.

            

Its multiple supplier set-up was designed precisely to meet every contingency that might disrupt its fuel supply. It bespoke of foresight, careful planning and sound business judgment on the part of PAL. As a business operation heavily dependent on fuel supply, for PAL to rely solely on a single supplier would indeed be impracticable. To compel it to do so would amount to a grave abuse of discretion on its part as this might well lead to irregular, excessive or unconscionable expenditures, the very evil sought to be avoided in the creation of the COA.

Rebecca Barbo vs Commission on Audit (October 10, 2008)

Rebecca Barbo v Commission on Audit (October 10, 2008)

FACTS:

           

Petitioners are officials of the Local Water Utilities Administration (LWUA) and designated members of the Interim Board of Directors of the San Fernando Water District (SFWD).

           

On December 4, 1995 and February 12 1996, the LWUA Board of Trustees issued Board Resolution No. 313, Series of 1995 and Board Resolution No. 39, Series of 1996 respectively. These Board Resolutions authorized the Board of Directors of SFWD to receive reimbursable allowances in the form of Representation and Transportation Allowance (RATA), Travel Allowance, and Extraordinary & Miscellaneous Expense (EME); Christmas Bonus; Uniform Allowance; Rice Allowance; Medical and Dental Benefits; and Productivity Incentive Bonus.

            

Pursuant to the said Board Resolutions, petitioners received EME, Rice Allowance, Christmas Bonus, and Productivity Bonus from SFWD during the calendar years starting 1994 until 1996.

            

On June 30, 1997, a Special Audit Team of COA Regional Office No. III at San Fernando, Pampanga audited the financial accounts of SFWD for the period covering January 1, 1994 to July 15, 1996. The COA Special Audit Team disallowed the payment of the above-mentioned benefits and allowances received by petitioners after the same were found to be excessive and contrary to Sections 228, 162 and 163 of the Government Accounting and Auditing Manual (GAAM) and to Civil Service Commission (CSC) Resolution No. 954073 in relation to Section 13 of Presidential Decree (PD) No. 198 (Provincial Water Utilities Act of 1973) as amended. Petitioner were directed to refund the benefits and allowances subject to the disallowance.

            

Petitioners contend that the COA lacks jurisdiction to declare whether or not LWUA Board Resolution Nos. 313 and 39 are consistent with Section 13 of PD No. 198, as amended, on matters pertaining to the compensation and "other benefits" of the Directors of the LWD. This is allegedly the function of the courts.

            

The Regional Director affirmed the disallowance. Petitioners elevated the matter to COA. COA declared that the subject bonuses and allowances received by petitioners constituted additional compensation or remuneration. Petitioners' motion for reconsideration was denied. Hence this instant petition.

ISSUE:

1.     Whether respondent has the jurisdiction to motu proprio declare LWUA Board Resolution No. 313, S. 1995, as amended by Resolution No. 39, S. 1996, to bbe totally in conflict with Sec. 13 of PD No. 198 as amended.

2.     Whether Sec 13, PD 198, as amended, prohibiting petitioners' entitlement to RATA, EME, Bonuses and Other Benefits and Allowances.

HELD:

            

The Court has already settled this issue in a myriad of cases. Particularly, in Rodolfo S. de Jesus [Catbalogan Water District] v. COA, the Court upheld the authority and jurisdiction of the COA to rule on the legality of the disbursement of government funds by a water district and declared that such power does not conflict with the jurisdiction of the courts, the DBM, and the LWUA. Citing Section 2, Subdivision D, Article IX of the 1987 Constitution the Court declared that it is the mandate of the COA to audit all government agencies, including government-owned and controlled corporations with original charters. Indeed, the Constitution specifically vests in the COA the authority to determine whether government entities comply with laws and regulations in disbursing government funds, and to disallow illegal or irregular disbursements of government funds. This independent constitutional body is tasked to be vigilant and conscientious in safeguarding the proper use of the government's, and ultimately the people's, property.

            

Anent the second issue, a water district is a government-owned and controlled corporation with a special charter since it is created pursuant to a special law, Presidential Decree (PD) 198. It is undeniable that PD 198 expressly prohibits the grant of RATA, EME, and bonuses to members of the board of Water Districts.

Saligumba vs COA, 117 SCRA 669

Saligumba v COA 117 SCRA 669

FACTS:

On the basis of the sworn complaint of Editha Saligumba, the COA instituted the administrative case against Leonardo Estella, Auditing Examiner III, in the Auditor's Office of Misamis Occidental. The charge was that the respondent raped Editha Saligumba on several occasions. For insufficiency of evidence, the charge was dropped by COA.

           

Saligumba now wants the Supreme Court of review the COA decision. She insists that the decision of the COA is contrary to the evidence and the same time raises factual issues.

ISSUE:

            

Whether the action will prosper?

HELD:

The petition has to be dismissed for the following reasons:

1.      Our power to review COA decisions refers to money matters and not to administrative cases involving the discipline of its personnel.

2.      Even assuming that We have jurisdiction to review decisions on administrative matters as mentioned above, We can not do so on factual issues; Our power to review is limited to legal issues.

Bustamante vs COA, 216 SCRA 134

Bustamante v COA 216 SCRA 134

FACTS:

            

Petitioner is the Regional Legal Counsel of National Power Corporation (NPC). As such he was issued a government vehicle with plate number SCC 387. Pursuant to NPC policy as reflected in the Board Resolution No. 81-95 authorizing the monthly disbursement of transportation allowance, the petitioner, in addition to the use of government vehicle, claimed his transportation allowance for the month of January 1989. On May 31, 1990, the petitioner received an Auditor's Notice to Person Liable dated April 17, 1990 from respondent Regional Auditor Martha Roxana Caburian disallowing P1,250.00 representing aforesaid transportation allowance. The petitioner moved for reconsideration of the disallowance of the claim for transportation allowance which was denied.

            

Petitioner appealed this denial to the Commission on Audit which denied do due course. Hence this petition.

            

The petitioner takes exception from the coverage of said circular contending that such circular did not mention the NPC as one of the corporations/offices covered by it ( COA Circular No. 75-6)

ISSUE:

            

Whether such denial to give due course to the appeal of herein petitioner constitutes grave abuse of discretion amounting to lack of jurisdiction?

            

Whether NPC takes an exception from such coverage of the said circular contending that such circular did not mention NPC as one of the corporations/offices covered by it.

HELD:

            

NO. Grave abuse of discretion implies such capricious and whimsical exercise of judgment as is equivalent to lack of jurisdiction, or in other words where the power is exercised in an arbitrary or despotic manner by reason of passion or personal hostility, and it must be so patent and gross as to amount to an evasion of positive duty or to a virtual refusal to perform the duty enjoined or to act at all in contemplation of law.

            

NO. It is very patent that the circular is addressed, among others, to managing heads of Government-owned or Controlled Corporations, the NPC being held under such category of corporations. We likewise cannot sustain petitioner's contention that the Commission, in the exercise of its power granted by the Constitution, usurped the statutory functions of the NPC Board of Directors for its leads to the absurd conclusion that a mere Board of Directors of a government-owned and controlled corporation, by issuing a resolution, can put to naught a constitutional provision which has been ratified by the majority of the Filipino people. If We will not sustain the Commission's power and duty to examine, audit and settle accounts pertaining to this particular expenditures or use of funds and property, owned or held in trust by this government-owned and controlled corporation, the NPC, We will be rendering inutile this Constitutional Body which has been tasked to be vigilant and conscientious in safeguarding the proper use of the government's, and ultimately, the people's property.

Sambeli vs Province of Isabela, 210 SCRA 80

Sambeli v Province of Isabela 210 SCRA 80

FACTS:

            

An agreement was entered into by and between the City of Isabela and ECS Enterprise for the purchase of 300 units of wheelbarrows, 837 pieces of shovels, and 1 set of radio communication equipment. Based on the finding of the Price Evaluation Division – COA Technical Services Office, the Provincial Auditor advised the Provincial Treasurer that an overpriced in the total amount of P619,042.20 exists out of the total price of P761,077.20 offered by ECS Enterprises or an overpayment of P195,893.10. It recommended that the future claim of ECS Enterprises be withheld. Provincial Auditor formally forwarded the matter with the Regional Director who formally endorsed the stand. ECS appealed the decision but was denied for lack of merit.

            

Hence this instant petition. Petitioner assails the ruling of the COA as not valid. It contends that the contract of sale has not only been perfected between the Province of Isabela and petitioner but delivery has been made by it with the corresponding partial payment by the Province of Isabela. Thus, it is allegedly incumbent upon COA to authorize the payment of the balance because to act otherwise will constitute an impairment of contract.

ISSUE:

            

Whether the ruling of COA is invalid so far as it will constitute impairment of contracts?

HELD:

           

In the exercises of the regulatory power vested upon it by the Constitution, the Commission on Audit adheres to the policy that government funds and property should be fully protected and conserved and that irregular, unnecessary, excessive or extravagant expenditures or uses of such funds and property should be prevented. On the proposition that improper or wasteful spending of public funds or immoral use of government property, for being highly irregular or unnecessary, or scandalously excessive or extravagant, offends the sovereign people's will, it behooves the Commission on Audit to put a stop thereto.                       

. . . No less than the Constitution has ordained that the COA shall have exclusive authority to define the scope of its audit and examination, establish the techniques and methods required therefor, and promulgate accounting and auditing rules and regulations, including those for the prevention and disallowance of irregular, unnecessary excessive, extravagant or unconscionable expenditures or use of government funds and properties. (Art. IX D, Sec. 2 (2) 1987 Constitution of the Philippines)

Osmena vs COA, 238 SCRA 363

Osmena v COA 238 SCRA 363

FACTS:

           

Reynaldo de la Cerna was stabbed and was rushed to Cebu City Medical Center but died in the same day due to severe loss of blood. His parents claimed that Reynaldo would not have died were it not for the “ineptitude, gross negligence, irresponsibility, stupidity and incompetence of the medical staff” of the Medical Center. The parents subsequently instituted in the RTC an action for recovery of damages which the City of Cebu was impleaded as defendant on the theory that as employer of the alleged negligent doctors, it is vicariously responsible for the latters' negligence.

           

To put an end to the controversy, a compromise agreement was entered into by the plaintiffs and defendant City of Cebu for the payment of the sum of P30,000. The agreement was ratified by the Sangguniang Panglungsod of the City and authorized the City Budget Officer of Cebu to include in Supplemental Budget No. 6 of the Ciy for the year 1989 the amount of P30,000 for financial assistance to the parents of the late Reynaldo de la Cerna”.

            

However, the respondent COA disallowed the financial assistance granted to the spouses de la Cerna holding that it is not within the power of the Sangguniang to provide financial assistance, either on general welfare clause or humanitarian grounds, to promote economic and private interests of certain individual only. Respondent further stressed that not being a party to the compromise agreement, it was not bound by it and that any money claim arising therefrom was subjected to its usual audit in the pursuance of the valid exercis and discharge of its constitutional power, authority and duty. The City of Cebu filed a Motion for Reconsideraton but was denied.

            

Hence this instant petition.

ISSUE:

            

Whether COA committed grave abuse of discretion in disallowing the city's appropriaton of P30,000 made conformably with the compromise agreement in the civil suit against the City?

HELD:

            

YES. There can be no question of COA's competence to act on the supplemental budget for 1989 of the City of Cebu. It appears that respondent COA greivously misconstrued the undertaking of Cebu City to pay P30,000 to the heirs of the deceased Reynaldo de la Cerna. It was construed as intended only to promote the private welfare and interest of the de la Cerna family. The respondent is well aware that the appropriation was a part of the package agreed upon by all parties in a civil case for the amicable settlement of the controversy. Judicial compromise is conclusive and binding on all the parties.

Orocio vs COA, 213 SCRA 109

Orocio vs COA 213 SCRA 109

FACTS:

            

On accident occurred at the Malaya Power Plant of the National Power Corporation (NPC) where two individuals suffered injury – Ernesto Pumaloy, an NPC employee, and Domingo Abodizo, a casual employee OPLGS, the janitorial contractor of the NPC. The two injured personnel were brought to the hospital.

           

NPC initially advanced the amount for hospitalization expenses for the treatment of Abodizo, and set up this as an account receivable from OPLGS deducted on a staggared basis from the latter's  billing against the NPC util the same was fully satisfied. Subsequently, OPLGS requested a refund of the total amount deducted from their billings representing payment of the advances made by the NPC. In the light of the favorable recommendation of the NPC legal counsel, the amount of hospitalization expenses was refunded to the contractor OPLGS.

            

The Unit Auditor of the Commission on Audit disallowed the refund of the hospitalizattion expenses of Abodizo contending that under the contract, there is no employee-employer relation between the NPC and the OPLGS employees. Hence,NPC is not answerable for such expenses. General Counsel asked for a reconsideration of the said disallowance denied. The COA Regional Director, herein respondent, confirmed the disallowance. NPC General Counself submitted a second request for reconsideration and justifies that his legal opinion is based on Sec 15-A of RA 6395 (NPC Charter) which provides that “... all legal matters shall be handled by the General Counsel of the Corporation...”

ISSUE:

       

Whether the disbursement on the basis of the legal opinion of the legal counsel of the NPC (quasi-judicial function) is within the scope of the auditing power of the COA?

HELD:

             

The Constitution grants the COA the power, authority and duty to examine, audit and settle all accounts pertaining to the expenditures or uses of funds and property pertaining to the Government or any of its subdivisions, agencies or instrumentalities, including government-owned or controlled corporations. The matter of allowing in audit a disbursement account is not a ministerial function, but one which necessitates the exercise of discretion. Besides, the OPLGS, Abodizo's employer, admitted that the incident was purely accidental and that there is no showing whatsoever in the accident report of any negligence on the part of the NPC or its employees.

            

The NPC, as a government-owned corporation, is under the COA's audit power. The COA should not be bound by the opinion of the legal counself of said agency or instrumentality which may have been the basis for the questioned disbursements, otherwise it would become a toothless tiger and its auditing functions would be a meaningless and futile exercise.

Guevarra v Gimenez 6 SCRA 813

Guevarra v Gimenez 6 SCRA 813

FACTS:

            In 1954, the District Engineer of Sorsogon prepared a program of work and detailed estimate for the reconstruction of the Sorsogon Central School building. Specifications consisting of five pages were likewise prepared. The Cost of painting was left out in the detailed estimate and specifications. The papers were submitted to the Division Engineer in Lucena, Quezon, who returned them duly approved with an authorized appropriation of P40,000.00 "provided that painting shall be included". Whereupon, the specification for painting was accordingly made and appended to the specifications as page six.

            In August 1954 the District Engineer advertised an invitation to bid for “furnishing of all materials, labor and plant, for reconstruction” project. Fernando Guevarra's bid of P37,500 was declared lowest and the contract was awarded to him. Eighty five days after completion of the project, Guevarra file with the Director of Public Works a written claim for the payment of P4,620.00 representing cost of painting not covered by the contract.

            After hearing, Secretary of Public Works and Communications denied the claim and two motion for reconsideration were also denied. On appeal,the Auditor General also denied the claim. Guevarra appealed to the Supreme Court pursuant to CA 327.

ISSUE:

            Whether the contract for the reconstruction of the school building included the painting.

HELD:

            Yes. Testimonies of the employees' should be given more weight than those of the contractors. These government employees testified as to what transpired in the performance of their duties. The presumption is that official duty has been regularly performed.

            [Note:The main issue of the case has nothing to do with COA. However, note that, claims and disbursements of public funds should have be coursed to COA]