Orocio v. Commission on Audit
REITERATIONFacts
The Antecedents: An accident occurred at the Malaya Thermal Plant of the National Power Corporation (NPC) on May 25, 1982, resulting in tube leaks and the release of steam and hot water. Two employees were injured: Ernesto Pumaloy suffered burns, and Domingo Abodizo, a casual employee of O.P. Landrito's General Services (OPLGS), suffered severe burns. NPC advanced P53,802.26 for Abodizo's hospitalization. OPLGS requested a refund of this amount, which was initially recommended favorably by NPC's Legal Services Chief D (petitioner Victoriano V. Orocio), who was then Officer-in-Charge of the Office of the General Counsel. The recommendation was based on Article 2176 of the Civil Code and the doctrine of res ipsa loquitor, inferring NPC's liability due to want of care by the Metro Manila Regional Center (MMRC) crew. Procedural History: The amount was refunded to OPLGS. Subsequently, the Commission on Audit (COA), through its Unit Auditor Jose M. Agustin, disallowed the refund in Certificate of Settlement and Balances (CSB) No. 01-04-83, stating there was no employer-employee relationship between NPC and OPLGS employees, thus NPC was not answerable for the expenses. NPC's General Counsel requested reconsideration, arguing that liability could arise from quasi-delict due to the MMRC crew's negligence. Agustin maintained his stand, asserting that fault or negligence must be proven and that NPC's legal opinion did not prove negligence. The COA Regional Director confirmed the disallowance. NPC's General Counsel made a second request for reconsideration, citing NPC's charter. The COA General Counsel, Ricardo G. Nepomuceno, Jr., concurred with the Unit Auditor's views. Subsequently, Agustin ordered the disallowance to be booked in petitioner Orocio's name, jointly and severally with other officials, amending previous findings. A Debit Memorandum was issued against Orocio. The Petition: Petitioner Orocio filed a petition seeking to annul the COA issuances holding him personally liable, arguing he acted within his official functions as Officer-in-Charge of the NPC's Office of the General Counsel, and that his discretion in rendering legal opinions is not subject to re-examination by the COA. He contended he is not personally liable as he was performing official duties without malice or bad faith.
Issue(s)
Whether the legal opinion of petitioner, as NPC's General Counsel, precludes the COA from disallowing a disbursement. Whether the General Counsel of the COA has the authority to decide a motion for reconsideration of a disallowance. Whether petitioner is personally liable for the disallowed disbursement based on his legal opinion.
Ruling
The petition is GRANTED. The challenged 5th indorsement of the COA General Counsel, Agustin's Memorandum of June 30, 1986 (holding petitioner personally liable), and the Debit Memo of July 22, 1986, are set aside as null and void.
Ratio Decidendi
On the first issue: The Court held that the petitioner "overrates the power of the General Counsel of the NPC and belittles the authority of the COA." Section 15-A of NPC's charter does not confer infallibility upon the General Counsel's opinions, nor does it subordinate the Supreme Court to such opinions. Public office is a public trust, and government-owned corporations like NPC are under the COA's audit power. The COA's constitutional mandate to examine, audit, and settle accounts, and to prevent irregular, unnecessary, excessive, or extravagant expenditures, is broad and extensive. The COA should not be bound by the opinion of an agency's legal counsel, as this would render its auditing function meaningless. In this case, the COA auditor had reason to believe the disbursement was irregular, as there was no competent evidence showing NPC or its employees were responsible for the accident, and the contractor itself admitted the incident was accidental. On the second issue: The Court found that the 5th Indorsement by the COA General Counsel was not a decision of the COA. The motion for reconsideration was a matter for the COA, a collegial body, to resolve. The General Counsel, not being a Commissioner, cannot act for the Commission. His indorsement was merely an opinion to aid the COA. Therefore, respondent Agustin acted prematurely and with undue haste in implementing the disallowance based on this opinion, as it was not a valid decision of the COA. On the third issue: The Court ruled that even if the disallowance was proper, there was no basis for holding petitioner personally liable. Initially, the disallowance did not name petitioner as liable, only the approving authority, examiners, and chief accountant. While expenditures in violation of law are a personal liability of the official directly responsible, petitioner's role was to provide a legal opinion, which could be adopted or rejected. There was no showing that the NPC's governing board or authorized official formally approved the claim based on his opinion. Furthermore, holding petitioner liable without notice and hearing would violate his right to due process. A public official is not civilly liable for acts done in the performance of official duties unless there is clear bad faith, malice, or gross negligence, which was not established against petitioner.
Main Doctrine
The Commission on Audit (COA) is not bound by the opinion of the legal counsel of a government agency when determining the legality of a disbursement; the COA's auditing power is a constitutional mandate to act as a watchdog of the government, and its decisions must be based on pertinent laws and regulations, not on the opinion of an agency's legal counsel. Furthermore, a public official is not personally liable for acts done in the performance of official duties unless there is a clear showing of bad faith, malice, or gross negligence.