Ting v. Commission on Audit
REITERATIONFacts
The Antecedents: Petitioners, Spouses Roque and Fatima Ting, were involved in a land exchange agreement with the Metro Cebu Development Project (MCDP) III, an entity of the City of Cebu, for road widening projects. The MCDP III was to substitute its Lot C-1 for petitioners' Lots 7-A and 7-B. However, MCDP III demolished petitioners' lots in 1999 before the exchange was finalized. This led to petitioners filing a case for Specific Performance and Damages against the City of Cebu. The Regional Trial Court (RTC) ruled in favor of the petitioners on January 3, 2008, ordering the City of Cebu to pay Php33,700,000.00 for the value of the lots, Php3,912,500.00 for demolished warehouses and a resthouse, plus attorney's fees and litigation expenses, all to earn 6% interest annually from the date of the judgment. Procedural History: The City of Cebu appealed the RTC's decision to the Court of Appeals (CA), which affirmed the RTC's ruling in a decision dated November 26, 2013, and subsequently denied the City's motion for reconsideration. The City's further appeal to the Supreme Court was denied, and an Entry of Judgment on March 9, 2015, declared the case final and executory. Following this, the petitioners filed a money claim with the Commission on Audit (COA) for the judgment award of Php37,702,500.00, seeking interest from January 3, 2008. The COA, in its Decision No. 2019-129 and Resolution No. 2020-042, partially granted the claim but fixed the interest reckoning point to May 23, 2017, the day after the money claim was filed, citing petitioners' delay. The Petition: Petitioners filed a petition for certiorari under Rule 64, in relation to Rule 65 of the Rules of Court, assailing the COA's decision and resolution. They argue that the COA acted with grave abuse of discretion by modifying the final and executory RTC decision by changing the interest reckoning date from the date of the RTC judgment (January 3, 2008) to the date of filing the money claim before the COA. The petitioners contend that the interest should accrue from the date of finality of the judgment, which was March 9, 2015. The Office of the Solicitor General, representing the COA, concurred with the petitioners, agreeing that the COA committed grave abuse of discretion and that the interest should be reckoned from the date of finality.
Issue(s)
Whether the Commission on Audit (COA) committed grave abuse of discretion in modifying the reckoning date of the 6% per annum legal interest from the date of finality of the judgment to the date of the filing of the money claim before the Commission.
Ruling
The petition is PARTLY GRANTED. The Decision No. 2019-129 and Resolution No. 2020-042 of the Commission on Audit are AFFIRMED with MODIFICATION, in that the City of Cebu is liable to pay petitioners the amount of Php37,702,500.00 plus interest at six percent (6%) per annum from 09 March 2015 until fully paid.
Ratio Decidendi
On the Issue of Interest Reckoning Point: The Supreme Court held that the Commission on Audit (COA) committed grave abuse of discretion by altering the reckoning point of the legal interest. Applying the landmark ruling in Nacar v. Gallery Frames, the Court clarified that when a judgment awarding a sum of money becomes final and executory, the legal interest of 6% per annum shall be imposed from such finality until its satisfaction. In this case, the judgment became final and executory on March 9, 2015, as evidenced by the Entry of Judgment. The COA's decision to move the reckoning point to May 23, 2017, based on the petitioners' alleged delay in filing the money claim, has no basis in law or jurisprudence. Furthermore, the Court cited Taisei Shimizu Joint Venture v. Commission on Audit, emphasizing that the COA's audit power over money claims confirmed by final court judgments is limited and does not include the power to modify the substantive terms of the judgment. By changing the interest start date, the COA violated the Doctrine of Immutability of Final Judgments, which prohibits the modification of final decisions except for clerical errors or void judgments. Consequently, the interest must be computed from the date the decision became final and executory until full payment is made.
Main Doctrine
The Doctrine of Immutability of Final Judgments dictates that once a judgment becomes final and executory, it may no longer be modified in any respect, even if the modification is meant to correct what is perceived to be an erroneous conclusion of fact or law. In the context of money claims against the government, the Commission on Audit (COA) possesses a limited audit review power; it cannot alter the substantive findings or the interest rates and reckoning points established in a final court decision. Per Nacar v. Gallery Frames, when a judgment awarding a sum of money becomes final, the rate of legal interest of six percent (6%) per annum shall be reckoned from such finality until its satisfaction, as the interim period is deemed a forbearance of credit.