Alameda v. Commission on Audit
REITERATIONFacts
The Antecedents: This case concerns the disallowance of P1,248,085.69 in salaries, personnel benefits, and operating expenses paid to Dr. Edmund L. Lamela for his services as Municipal Health Officer (MHO) of San Agustin, Surigao del Sur, from September 12, 2013, to December 31, 2014. Dr. Lamela's initial appointment was temporary and valid for 12 months, expiring on September 11, 2013. Despite the expiration of his temporary appointment, he continued to perform MHO duties. The Notice of Disallowance identified Mayor Libertad O. Alameda, Municipal Accountant Maria Lourdes A. Navaja, Municipal Treasurer Julia R. Orcullo, Municipal Budget Officer Rosenda D. Lamela, and Dr. Lamela himself as liable for the disallowed amount, along with Administrative Officer IV/HRMO Designate Abundia P. Salinas. Procedural History: Petitioners, including Mayor Alameda, Municipal Accountant Navaja, and Municipal Budget Officer Lamela, along with Ms. Salinas and Ms. Orcullo, appealed the Notice of Disallowance to the Commission on Audit (COA) Regional Office XIII. The Regional Office affirmed the disallowance but found Dr. Lamela and Ms. Orcullo not liable, holding Mayor Alameda, Ms. Navaja, Ms. Lamela, and Ms. Salinas liable due to lack of due care or negligence. Upon automatic review, the COA, in Decision No. 2018-350, affirmed the disallowance but modified the disposition, exempting both Dr. Lamela and Ms. Orcullo from liability. The COA's Resolution No. 2020-291 denied the Joint Partial Motion for Reconsideration filed by the petitioners. This led to the filing of the present Petition for Certiorari with the Supreme Court. The Petition: The petitioners seek to annul and set aside the COA's Decision No. 2018-350 and Resolution No. 2020-291, arguing that the COA committed grave abuse of discretion. They contend that the COA erred in declaring that Dr. Lamela was not a de facto officer, that the disallowance had no legal or factual basis, and that they were ordered to refund the disallowed amount without due process. The petition also raises a procedural issue regarding the COA's determination of the filing date of their motion for reconsideration. The Office of the Solicitor General, in a surprising turn, filed a Manifestation in Lieu of Comment, siding with the petitioners and arguing that the COA disregarded the element of general public acquiescence in its de facto officer determination and that the disallowance order was absurd.
Issue(s)
Whether the COA committed grave abuse of discretion in declaring the material dates of the case without basis in law or fact, violating petitioners' right to due process. Whether the COA committed grave abuse of discretion in declaring Dr. Lamela not a de facto officer without basis in law or substantial evidence, violating petitioners' right to due process. Whether the COA committed grave abuse of discretion in concluding that Dr. Lamela is entitled to compensation based solely on equity without recognizing him as a de facto officer, contrary to law and without substantial evidence, violating petitioners' right to due process. Whether the COA committed grave abuse of discretion in ordering petitioners to refund the amount under ND No. 15-001-101-(13&14) without factual or legal basis, violating petitioners' right to due process.
Ruling
The Supreme Court granted the Petition for Certiorari, reversed and set aside the assailed COA Decision and Resolution, and lifted the Notice of Disallowance. The prayer for injunctive relief became non momentum est.
Ratio Decidendi
On the procedural issue of due process regarding the filing date of the motion for reconsideration: The Court acknowledged that the COA erred in determining the correct filing date of the Joint Partial Motion for Reconsideration by relying on the date of receipt instead of the date of mailing, as mandated by the 2009 Revised Rules of Procedure of the COA. However, the Court held that this procedural error did not violate the petitioners' right to due process because their motion was resolved on the merits. The essence of due process in administrative proceedings is the opportunity to be heard and to seek reconsideration, which was afforded to the petitioners. Therefore, no crucial procedural faux pas affecting the disposition of the case on the merits was committed. On whether Dr. Lamela was a de facto officer: The Court found that the COA erred in ruling that Dr. Lamela was not a de facto officer. The Court reiterated the elements for a de facto officer: (1) a de jure office; (2) a color of right or general acquiescence by the public; and (3) actual physical possession of the office in good faith. While the COA correctly identified the de jure office and acknowledged Dr. Lamela's physical possession, it erroneously concluded that the color of authority was lost upon the expiration of his temporary appointment. The Court emphasized that "general acquiescence by the public" is a sufficient basis for color of right, which was evidenced by Dr. Lamela's inclusion in the appropriation ordinance, the plantilla of personnel, and his recognition through certificates of appreciation for his services. The COA's reasoning that the appointment lacked a badge of authority, while overlooking public acquiescence, was deemed sophistry. On the entitlement to compensation and the validity of payments: Having established that Dr. Lamela was a de facto MHO who performed his functions in good faith and rendered services beneficial to the public, the Court ruled that any payments he received in consideration for these services were valid. The Court reasoned that since the government benefited from Dr. Lamela's services, it incurred no loss, thereby warranting the lifting of the disallowance. The principle of quantum meruit, while applied by the COA, was secondary to the recognition of Dr. Lamela as a de facto officer whose compensation was legally due. On the liability of the petitioners for refund: The Court found that the COA erred in ordering the petitioners to refund the amount of P1,248,085.69. The Court held that mistakes committed by public officers are not actionable absent a clear showing of malice or gross negligence amounting to bad faith. The petitioners, in allowing Dr. Lamela to hold his position, acted in good faith, believing in the validity of his appointment or at least in the benefit derived from his services. The Court emphasized that bad faith requires dishonest purpose, moral obliquity, or conscious doing of a wrong, which was not demonstrated in this case. Therefore, no return of the funds was required.
Main Doctrine
The Supreme Court held that Dr. Lamela was a de facto officer, as evidenced by the general acquiescence by the public and his actual possession of the office in good faith, despite the expiration of his temporary appointment. Consequently, payments made for his services were valid, and the Notice of Disallowance was lifted.