[ G.R. No. 237874, February 16, 2021 ]
MIGUEL C. WYCOCO, FORMER REGIONAL MANAGER OF NATIONAL FOOD AUTHORITY - ZAMBOANGA REGIONAL OFFICE, ARACELY C. VALLEDOR, AND ALL CONCERNED NATIONAL FOOD AUTHORITY REGION IX EMPLOYEES, PETITIONERS, VS. MILAGROS L. AQUINO AND ESTRELLA B. AVILA, AUDIT TEAM LEADER AND SUPERVISING AUDITOR, RESPECTIVELY, NILDA B. PLARAS, DIRECTOR IV, COMMISSION SECRETARY, COA, - CORPORATE GOVERNMENT SECTOR, AUDIT GROUP C, ZAMBOANGA CITY, RESPONDENTS.
[G.R. No. 239036]
ERIC L. BONILLA AND ALL CONCERNED OFFICIALS AND EMPLOYEES OF THE NATIONAL FOOD AUTHORITY - AGUSAN DEL NORTE PROVINCIAL OFFICE, PETITIONERS, VS. THE COMMISSION ON AUDIT, RESPONDENT.
CONCURRING OPINION
PERLAS-BERNABE, J.:
I concur.
However, I tender this opinion to further elucidate my views concerning the proper application of res judicata in this case and the appropriate parameters of Rule 2d of the guidelines recently established in the landmark case of Madera v. COA (Madera).1
I. Res judicata applies but only in the concept of conclusiveness of judgment relative to the issue of the propriety of the disallowance.
To recall, the consolidated petitions assailed the Commission on Audit's (COA) disallowances of food and grocery incentive (FGI) granted by the National Food Authority's (NFA) Zamboanga Regional Office and Agusan Del Norte Provincial Office for the calendar years of 2010 and 2012, respectively, for lack of legal basis and in violation of Section 12 of Republic Act No. 6758.2
Nonetheless, as correctly ruled by the ponencia, the issue regarding the propriety of the disallowance cannot anymore be disturbed applying the principle of res judicata by virtue of the final judgment in Escarez v. COA (Escarez).3
Res judicata means "a matter adjudged; a thing judicially acted upon or decided; a thing or matter settled by judgment."4 It has two (2) concepts: (a) bar by prior judgment, which means that "the judgment or decree of the court of competent jurisdiction on the merits concludes the litigation between the parties, as well as their privies, and constitutes a bar to a new action or suit involving the same cause of action before the same or any other tribunal";5 and (b) conclusiveness of judgment. The key difference between these two (2) concepts is that in the second concept of conclusiveness of judgment, identity of causes of action is not required. In Oropeza Marketing Corporation v. Allied Banking Corporation,6 the Court ruled that:
If as between the two cases, only identity of parties can be shown, but not identical causes of action, then res judicata as "conclusiveness of judgment" applies.7
In Escarez, the Court upheld the COA's disallowances of FGI granted by several NFA regional and provincial offices8 for lack of legal basis, finding that the alleged imprimatur of former Presidents Joseph Ejercito Estrada and Gloria Macapagal-Arroyo did not approve their release, viz.:
What President Estrada approved was the grant of the Food Assistance and Emergency Allowance in the amount of P7,000 for the yuletide season in the year 1998. Nothing in the letter gave the impression that the grant of the benefit shall be an annual practice.
On the other hand, the purported approval by President Macapagal-Arroyo consisted of a Memorandum dated 4 November 2003 issued by Cabinet Secretary Ricardo L. Saluda. In it, the cabinet members appealed to the good sense of the heads and boards of government financial institutions and government-owned and -controlled corporations to moderate the grant of year-end bonuses to their employees.
On the other hand, OGCC Opinion No. 219 dated 24 November 2003 looked with favor on the NFA's grant of food subsidy/grocery incentive in the form of gift checks to its officials and employees as had traditionally been done during the Christmas season.
As correctly observed by COA, these justifications consistently relate to the grant of additional incentives to NFA officials and employees during the Christmas season. It is well to note that the FGI in question was released in specific months of the year, not one tranche of which coincided with the yuletide season.
As provided under paragraph 4.5 of DBM Budget Circular No. 16 dated 28 November 1998, agencies are prohibited from granting any food, rice, gift checks, or any other form of incentives/allowances, except those authorized by the Office of the President through an administrative order.
Thus, without specific authority from the President or Congress, the NFA Council Resolution cannot by itself serve as a justification for the release of the FGI.9 (Emphases and underscoring supplied)
Notably, while Escarez was merely disposed of by the Court by way of an unsigned resolution, it still amounts to an adjudication on the merits10 for which the rule on conclusiveness of judgment applies. Again, "[t]here is 'conclusiveness of judgment' when any right, fact, or matter in issue, directly adjudicated on the merits in a previous action by a competent court or necessarily involved in its determination, is conclusively settled by the judgment in such court and cannot again be litigated between the parties and their privies whether or not the claim, demand, purpose, or subject matter of the two actions is the same."11 "[O]nly the identities of parties and issues are required for the operation of the principle of conclusiveness of judgment."12
Since the instant case similarly involves the legality of the grant of FGI by local offices of the NFA acting under NFA Council Resolution No. 226-2K5, I agree with the ponencia that such issue should not anymore be litigated anew. Although herein petitioners are not exactly the same as those in Escarez, "the concept of conclusiveness of judgment still applies because jurisprudence does not dictate absolute identity but only substantial identity of parties."13 As observed by the ponencia, there is community of interest between petitioners in this case and those of Escarez, considering that both groups consist of officials or employees of the NFA aggrieved by the disallowance of FGI.
However, the foregoing notwithstanding, it should be clarified that Escarez should only be deemed conclusive insofar as the issue of the propriety of the disallowance is concerned, and not with respect to the actual civil liability for the return of the disallowed amounts under the presently assailed disallowances. This is because "[while a] former judgment between the same parties will be final and conclusive in the second if that same point or question was in issue and adjudicated in the first suit[,] the adjudication of an issue in the first case is not conclusive of an entirely different and distinct issue arising in the second[.]"14
The issue of civil liability under Notice of Disallowance No. 11-003-GOF(10) dated September 13, 2011 (assailed in G.R. No. 237874) and Notice of Disallowance No. 2014-01(12) (assailed in G.R. No. 239036) is a different issue from the propriety of the disallowance. Also, the resolution of the civil liability as per the notices of disallowance in Escarez15 is not automatically applicable to this case, since each notice of disallowance consists of a separate cause of action that must be resolved based on its own factual and attending peculiarities.ℒαwρhi৷ What is only settled between the parties is the issue of the propriety of disallowance based on the applicability of the conclusiveness of judgment principle as discussed herein. Hence, the ponencia correctly took cognizance of the issue of civil liability as raised in the instant consolidated petitions, especially in the light of the recent paradigm shift governing such issue instituted in Madera.
II. The circumstances of this case do not justify the equitable invocation of Rule 2d of the Madera Rules, which should not apply just because of the length of time that a disallowance case has been pending, or that the benefits were based on benevolent intentions in favor of employees.
On the issue of civil liability for the disallowances, I agree with the ponencia that, in view of the existence of certain badges of good faith attending the grant of the disallowed amounts, the approving/certifying officers cannot be held solidarity liable for such amounts under Sections 3816 and 4317 of the Administrative Code.18 Likewise, the ponencia is correct in finding that the circumstances surrounding this case fail to furnish any highly exceptional reason to apply Rule 2d ofthe Madera Rules.19
In the recent case of Abellanosa v. COA (Abellanosa),20 the Court, as a supplement to Madera, refined the parameters that underlie the proper application of Rule 2d as an equitable ground to excuse the return of unlawfully disbursed public funds, viz.:
To stress, Rule 2c as well as Rule 2d should remain true to their nature as exceptional scenarios; they should not be haphazardly applied as an excuse for non-return, else they effectively override the general rule which, again, is to return disallowed public expenditures.
x x x x
x x x In Madera, the Court also recognized that the existence of undue prejudice, social justice considerations, and other bona fide exceptions, as determined on a case-to-case basis, may also negate the strict application of solutio indebiti. This exception was borne from the recognition that in certain instances, the attending facts of a given case may furnish an equitable basis for the payees to retain the amounts they had received. While Rule 2d is couched in broader language as compared to Rule 2c, the application of Rule 2d should always remain true to its purpose: it must constitute a bona fide instance which strongly impels the Court to prevent a clear inequity arising from a present directive to return. Ultimately, it is only in highly exceptional circumstances, after taking into account all factors (such as the nature and purpose of the disbursement, and its underlying conditions) that the civil liability to return may be excused. For indeed, it was never the Court's intention for Rules 2c and 2d of Madera to be a jurisprudential loophole that would cause the government fiscal leakage and debilitating loss. (Emphases and underscoring supplied)
In this case, it is my view that the long passage of time and the benevolent intent behind the grant of the disallowed FGI may not justify the excuse of their refund based on considerations of undue prejudice.ℒαwρhi৷ As I see it, these reasons, without more, are not compelling enough to justify their equitable excuse under Rule 2d of the Madera Rules. To expound, the length of time in which a benefits disallowance case has remained pending for review before various adjudicative tribunals per se should not be considered a form of undue prejudice under Rule 2d. This is because such circumstance may very well loosely apply to the bulk of disallowance cases pending before the Court. In this regard, it is well to note that the Court's docket is rife with numerous petitions seeking the review of COA disallowances issued several years or even decades ago against government officers and personnel.
Similarly, with respect to a general notion of benevolent intent surrounding the grant of the disallowed amounts, it may be said that the grant of benefits - by their very nature - is intended for the betterment of employee welfare.
To broadly recognize these two (2) reasons as circumstances to invoke Rule 2d will certainly affect the Court's resolution of future cases, and in effect, dilute the general rule on return of disallowed amounts instituted by Madera; this, to the detriment of the government's ability to recover unlawfully disbursed public funds. Once again, as exhorted in Abellanosa, "it is only in highly exceptional circumstances, after taking into account all factors (such as the nature and purpose of the disbursement, and its underlying conditions) that the civil liability to return may be excused. For indeed, it was never the Court's intention for Rules 2c and 2d of Madera to be a jurisprudential loophole that would cause the government fiscal leakage and debilitating loss."
While the circumstances of this case appear to be similar to the case of Agra v. COA (Agra)21 insofar as the lengthy period for which they had been pending for review before the COA and the Court, it should be highlighted that Agra was decided prior to the Court's paradigm shift in disallowance jurisprudence as ushered in by Madera. Hence, a resort to old case pre-Madera would not necessarily capture the sentiments of the Court under the intended current doctrine.
Further, Abellanosa, which was decided post-Madera, was intended as a practical reminder for the Court to be stringently circumspect with how it applies Rules 2c and 2d, bearing in mind that recovery should be the general rule in favor of the government.
In fine, standing alone, the mere length of time in which a disallowance was pending for review, or a general notion of benevolent intent surrounding the grant of disallowed benefits, should not be automatically considered as bona fide instances for an equitable excuse under Rule 2d of the Madera Rules in the absence of other compelling factors.
As a final point, It is noteworthy that a Deed of Undertaking was executed by the payee-recipients in this case. As stated in the ponencia:22
Dispelling petitioners' claim of good faith, the COA Proper held that contrary to the approving/certifying officers' assertion, their participation was not ministerial as it paved the way for the payment of FGI. On the other hand, the Deed of Undertaking executed by the payees was found antithetical to their claim of good faith. Petitioners' motion for reconsideration was also denied.
x x x x
The COA [P]roper also ruled [that] the disallowance did not violate the principle of non-diminution of benefits more so as the recipients were never entitled to the same. Further, it agreed with the COA Corporate Government Sector 5 (COA CGS-5) that the good faith defense is unavailing: 1) previous NDs were already issued against the grant of FGI; and 2) the employees signed an undertaking consenting to salary deduction should the FGI be disallowed.23 (Emphases supplied)
Based on the foregoing, it therefore appears that the payee-recipients have agreed to the return of the FGI via salary deduction in the event that it would be subject to disallowance. Thus, their consent to such contingency negates any undue prejudice that they may suffer by sheer length of time that this case has been pending.
All told, the assailed disallowances should be affirmed and the payee-recipients, including the approving/certifying officers in their capacity as payee-recipients, be held individually liable for the return of the disallowed amounts they respectively received.
Footnotes
1 G.R. No. 244128, September 8, 2020.
2 Entitled "AN ACT PRESCRIBING A REVISED COMPENSATION AND POSITION CLASSIFICATION SYSTEM IN THE GOVERNMENT AND FOR OTHER PURPOSES," otherwise known as the "Compensation, and Position Classification Act of 1989" or the "Salary Standardization Law" (effective July 1, 1989).
3 See Notice of Resolution in G.R. Nos. 217818, 218334, 219979, 220201 & 222118, May 31, 2016.
4 See Monterona v. Coca-Cola Bottlers Philippines, Inc., G.R. No. 209116, January 14, 2019.
5 See id., citing Oropeza Marketing Corporation v. Allied Banking Corporation, 441 Phil. 551, 564 (2002); underscoring supplied.
6 See Oropeza Marketing Corporation v. Allied Banking Corporation, id.
7 Id. at 564-565.
8 Particularly, NFA Regional Offices IV and IX, the NFA Zamboanga Provincial Office, and the NFA Batangas Provincial Office.
9 See Escarez, supra note 3.
10 See Section 6 (c), Rule 13 of A.M. No. 10-4-20-SC, otherwise known as "THE INTERNAL RULES Of THE SUPREME COURT," which reads:
Section 6. Manner of Adjudication. - The Court shall adjudicate cases as follows:
x x x x
(c) By unsigned resolution when the Court disposes of the case on the merits, but its ruling is essentially meaningful only to the parties; has no significant doctrinal value; or is of minimal interest to the law profession, the academe, or the public. The resolution shall state clearly and distinctly the facts and the law on which it is based. (Emphasis and underscoring supplied)
11 Presidential Anti-Graft Commission v. Pleyto, 661 Phil. 643, 652-653 (2011); citation omitted.
12 Heirs of Deleste v. Land Bank of the Philippines, 666 Phil. 350, 388 (2011); citation omitted.
13 See Almagro v. Philippine Airlines, Inc., G.R. No. 204803, September 12, 2018.
14 Excellent Essentials International Corp. v. Extra Excel International Philippines, Inc., G.R. No. 192797, April 18, 2018, 861 SCRA 471, 488-489.
15 See ND Nos. 2010-01 (2008) dated 7 January 2010 and 2010-002 (2009) dated 16 April 2010 in G.R. No. 217818; and ND No. 2010-003 (2009) dated 3 December 2010 in G.R. No. 218334 (Escarez, supra note 3).
16 See Section 38 (1), Chapter 9, Book I, which reads:
Section 38. Liability of Superior Officers. - (1) A public officer shall not be civilly liable for acts done in the performance of his official duties, unless there is a clear showing of bad faith, malice or gross negligence. (Emphases and underscoring supplied)
17 See Section 43, Chapter 5, Book VI of the Administrative Code, which reads:
Section 43. Liability for Illegal Expenditures. - Every expenditure or obligation authorized or incurred in violation of the provisions of this Code or of the general and special provisions contained in the annual General or other Appropriations Act shall be void. Every payment made in violation of said provisions shall be illegal and every official or employee authorizing or making such payment, or taking part therein, and every person receiving such payment shall be jointly and severally liable to the Government for the full amount so paid or received. (Emphases and underscoring supplied)
18 Executive Order No. 292, entitled "INSTITUTING THE 'ADMINISTRATIVE CODE OF 1987'" (August 3, 1988).
19 See ponencia, pp. 18-24.
20 G.R. No. 185806, November 17, 2020.
21 677 Phil. 608 (2011).
22 See ponencia, p. 5.
23 Id.
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