[ G.R. No. 242082, June 15, 2021 ]
SER JOHN PASTRANA, VIVIAN VERIDIANO DACANAY, AND NORLYN TOMAS, PETITIONERS, VS. COMMISSION ON AUDIT, RESPONDENT.
[G.R. No. 242083]
MARY JANE G. YSMAEL, PETITIONER, VS. COMMISSION ON AUDIT, RESPONDENT.
CONCURRING OPINION
PERLAS-BERNABE, J.:
I concur.
The consolidated petitions question the Commission on Audit's (COA) imposition of civil liability against petitioners Ser John Pastrana, Vivian Veridiano Dacanay, Norlyn Tomas, and Mary Jane Ysmael (petitioners) for their active participation as recommending, ce1iifying, and approving officers (approving/certifying officers) in the illegal disbursement of collective negotiation agreement (CNA) incentives by the Land Registration Authority to its rank-and-file employees for the calendar year of 2009 in the total amount of P30,180,000.00, which was disallowed in audit by virtue of Notice of Disallowance No. 2011-001-151(10) dated January 6, 2011.1 Petitioners assail the rulings of the COA-Proper, which, in a Resolution2 dated January 30, 2018,excused the payee-recipients from refunding the disallowed amounts received by them on account of their good faith, but nonetheless sustained petitioners' liability as approving/certifying officers for the disallowance:3
WHEREFORE, premises considered, the Motion for Reconsideration of Gabay ng Land Registration Authority (LRA), Inc., represented by its President Mr. Ser John Pastrana, in behalf of the members of the employees' union, is hereby PARTLY GRANTED. Accordingly, Commission on Audit Decision No. 2015-004 dated January 28, 2015 and Notice of Disallowance No. 2011-001-151 (10) dated January 6, 2011 on the payment of Collective Negotiation Agreement Incentives to LRA officials and employees, in the total amount of P30,180,000.00, are AFFIRMED with MODIFICATION. The payees who received the disallowed incentives in good faith need not refund the same. However, the recommending, certifying, and approving officers named liable for the disallowance shall remain liable therefor.
xxxx4 (Emphases and underscoring supplied)
Particularly, petitioners insist that they should not be held civilly liable for the disallowance by reason of their good faith participation in the disallowed transaction as approving/certifying officers.5
Nonetheless, as now ruled by the ponencia, petitioners' civil liability in this case must be sustained but only as to the net disallowed amount.
At the onset, it is noteworthy to underscore that, based on recent case law, the COA's absolution of the payee-recipients from civil liability should already be deemed final and immutable.
It is recognized that in National Transmission Corporation v. Commission on Audit6 and Hagonoy Water District v. Commission on Audit,7 the Court held the payee-recipients civilly liable to return the amounts they received notwithstanding the fact that: (1) they had already been absolved by the COA based on the old good faith rule which was subscribed to prior to the promulgation of the Madera v. COA8 (Madera); and (2) they were not parties before the Court and consequently, the issue of their civil liability was not anymore raised.
However, in Ancheta v. Commission on Audit9 (Ancheta), the Court expressly resolved not to rule on the civil liability of the payee-recipients who are not approving/certifying officers for the reason that the assailed COA ruling was already final and immutable insofar as it concerns their civil liability:
We note that the following matters were no longer raised in this Petition: (1) Corpuz's exemption from solidary liability; and (2) the recipients' absolution from liability. As such, the COA Resolution dated December 27, 2017 is considered final and immutable insofar as they are concerned. We further note that the SWD Board of Directors, who were not included in the original ND, but made liable in the COA Resolution dated December 27, 2017 and are yet to be included in a Supplemental ND, are not represented in the present Petition. Consequently, this resolution shall be limited to the disposition of the civil liabilities of the SWD approving and certifying officers.10 (Emphases and underscoring supplied)
This approach to the civil liability of payee-recipients was definitively upheld and edified in the April 27, 2021 case of Securities and Exchange Commission v. Commission on Audit11 (SEC) which is now the controlling ruling on the matter. In SEC, the Court decided not to delve into the civil liability of payee-recipients for their improper receipt of counterpart contributions to the provident fund based on the recognition that they were already excused from liability by the COA, which absolution was not questioned before the Court:
[The COA-Proper] excused the SEC employees from refunding the amount they each received from the counterpart contribution of the SEC to the provident fund; but held the approving, certifying and authorizing officers solidarily liable for the total disallowance.
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xxx. We are confronted by the fact that the COA [Proper] had already absolved the SEC payees-recipients from civil liability. Their absolution has not been questioned in the present petition.12 (Emphases and underscoring supplied)
Thus, in view of the latest shift in jurisprudence and considering that similar payee-recipients in this case had likewise been absolved at the COA level, the issue of the latter's civil liability should not anymore be touched upon by the Court. To do so would, as explained in Ancheta, would run contrary to the doctrine of immutability of judgments. Besides, it is doubtful that the Court could acquire certiorari jurisdiction over the issue of the payee-recipients' civil liability, much more subserve due process considerations, since when they were already absolved by the COA, they are not anymore parties at the Court's level.
Furthermore, it is discerned that the COA's discretion not to go after the payee-recipients who are not approving/certifying officers must be respected. As stated in my opinion in Madera, the decision as to who the State will go after and the extent of the amount to be claimed falls within the discretion and prerogative of the COA.13 As provided for in Section 16.3 of COA Circular 2009-006:14
Section 16. DETERMINATION OF PERSONS RESPONSIBLE/LIABLE
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16.3 The liability of persons determined to be liable under an ND/NC shall be solidary and the Commission may go against any person liable without prejudice to the latter's claim against the rest of the persons liable. (Emphasis supplied)
Meanwhile, the consequence of respecting the payee-recipients' absolution at the COA level is that the amounts respectively received by them should already be removed from the equation when determining the civil liability of the approving/certifying officers who are parties at the Court's level. In a sense, this is an application of the concept of the "net disallowed amount," which term was originally intended to refer to "the total disallowed amount minus the amounts excused to be returned by recipients"15 based on the exceptions found in Madera's Rules 2c and 2d16 but may as well apply to amounts excused to be returned by recipients on account of the COA's discretion not to anymore exact civil liability from certain parties.
Once the net disallowed amount is determined by excluding the amounts respectively received by the payee-recipients who were excused at the COA level, the civil liability of the remaining parties, i.e., approving/certifying officers, before the Court is the only remaining issue to be determined.
If the approving/certifying officers who were not absolved at the COA level have likewise individually received disallowed amounts, then only the amounts they received would be considered as the net disallowed amount. This net disallowed amount would then be the focal point of civil liability determination at the Court's level.
When the approving/certifying officers not absolved by the COA are also payee-recipients, each of them should be individually held liable as payee-recipients for the amounts they respectively received, unless there are grounds to excuse return under Madera's Rules 2c and 2d.17 In SEC, the Court held that approving/certifying officers in good faith who have also received the disallowed amounts should be absolved from civil liability since they are on the same plane as the payee-recipients absolved at the COA level. The Court considered this as a highly equitable circumstance that falls under the exception of Rule 2d:
Yet, we apply Rule 2d of the Rules of Return on ground of undue prejudice and, per Abellanosa, "to prevent a clear inequity arising from a directive to return".
First. We are confronted by the fact that the COA En Banc had already absolved the SEC payees-recipients from civil liability. Their absolution has not been questioned in the present petition. Notably, the concerned SEC officers are also payees-recipients in their own right, hence, the absolution of civil liability by COA En Banc also applied to them. It would be highly iniquitous to let the SEC officers return the amounts they received while the rest of the SEC payees-recipients go scot free. xxx
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True, it may be argued that the COA En Banc had already absolved all the payees-recipients, except the concerned SEC officers, and the only remaining point to be resolved is whether SEC officials should be held civilly liable. But, again, to order the SEC officers to return will result in an inequitable and unjust situation where the SEC officers, who are also payees-recipients, have a different civil liability while the rest of the payees-recipients are forgiven. To sanction such course of action would violate their right to equal protection.
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Here, there is no substantial distinction to justify a different treatment of SEC officers, who are payees-recipients, from other payeesrecipients when it comes to individual civil liability. In fact, as payeesrecipients themselves, the SEC officers are within the same class as the SEC employees, for they all received a 15% counterpart contribution from the SEC that was sourced from its retained earnings. Verily, to hold the SEC officers individually and civilly liable amounts to undue prejudice, thus, they should be likewise exempted from such liability.
Second, it is erroneous, nay, unfair to conclude that only the SEC Officers benefited from the agency's unauthorized counterpart contributions to their provident fund accounts. For provident funds are set up in a way that all members will derive a set of benefits by reason of their membership - securing loans, grant of dividends, disability benefits, retirement benefits, and severance packages. Once the funds are put into the provident fund, they are already intermingled and become a trust fund for the benefit of all provident fund. In GERSIP Association, Inc. v. GSIS, the Court held that a provident fund is essentially an express trust.
In other words, all other provident fund members benefited from the SEC's contribution under the account of its officers, albeit indirectly.ℒαwρhi৷ Thus, if we were to apply solutio indebiti as basis for liability, the SEC Officers should not bear the obligation to return alone; it should be shared by all provident fund members. As it was, however, these other members had already been absolved from liability. It would therefore be unfair to hold the SEC Officers liable to pay for the benefits which these other members indirectly received.
Finally, undue prejudice would also occur if the payees-recipients, including the concerned SEC officers, are made to foot an additional 15% contribution which ought to have been shouldered by the SEC itself. To repeat, payees-recipients contribute an equivalent of 3% of their monthly salary. To order them to answer for the 15% counterpart contribution of the SEC would, in effect, make their total contribution equivalent to 18% of their monthly salary. Under Section 43 of the General Provisions of GAA 2010, salary deductions for provident funds, among others, is allowed so long as an employee's total take home pay will not fall below Php3,000.00. By ordering payees-recipients to return, and in effect increasing their provident fund contributions to 18%, low-ranked employees may already have a take home pay of less than Php3,000.00.18
On the contrary, if the approving/certifying officers who had likewise received disallowed amounts are not in good faith (or in other words, acted in bad faith, with malice, or are grossly negligent), then they cannot avail of the equitable exception under Rule 2d because equity should not be accorded to a party in bad faith or who is grossly negligent. They should thus be allowed to individually return the amounts they respectively received.
Moreover, in addition to their individual liability for the amounts they respectively received, the liability of the approving/certifying officers who had likewise received disallowed amounts but are not in good faith is also solidary for the entire net disallowed amount, i.e. the total disallowed amount minus the amounts received by payee-recipients absolved at the COA level. Notably, practically speaking, the net disallowed amount in this scenario would effectively be the amounts received by the erring approving/certifying officers as recipients themselves. To be sure, the aforesaid solidary liability is based on Section 38 (1), Chapter 9, Book I in relation to Section 43, Chapter 5, Book VI of the Administrative Code of 1987, which pertinently state:
BOOK I - SOVEREIGNTY AND GENERAL ADMINISTRATION
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CHAPTER 9
General Principles Governing Public Officers
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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.
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BOOK VI - NATIONAL GOVERNMENT BUDGETING
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CHAPTER 5
Budget Execution
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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.
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The fact that the civil liability of the remaining approving/certifying officers in bad faith or who are grossly negligent is solidary means that the COA can exact the full amount of the net disallowed amount from any of the approving/certifying officers, which in this situation, pertains to the total disallowed amount minus the amounts received by the payee-recipients absolved at the COA level. Again, the net disallowed amount would effectively be the amounts received by the erring approving/certifying officers as recipients themselves.
In this case, as the ponencia correctly observes, petitioners were grossly negligent in the performance of their duties as approving/certifying officers in the disbursement of the disallowed CNA incentives. Hence, they should be held solidarily liable as provided under the aforementioned Administrative Code provisions. However, considering that the amounts received by the payee-recipients were already finally excused by the COA as herein discussed, petitioners' solidary liability should only be limited to the net disallowed amount, i.e. the total disallowed amount minus the amounts received by payee-recipients absolved at the COA level.
ACCORDINGLY, the petition should be DISMISSED and the assailed COA rulings be AFFIRMED with MODIFICATION. Petitioners, as grossly negligent approving/certifying officers, should be held solidarily liable for the net disallowed amount, without prejudice to the filing of appropriate administrative or criminal charges against any of them if so warranted under existing laws and jurisprudence.
Footnotes
1 See ponencia, pp. 2-4.
2 Rollo, pp. 46-55.
3 See ponencia, pp. 5-6.
4 Id. at 5.
5 See rollo, p. 9.
6 See G.R. No. 232199, December 1, 2020.
7 See G.R. No. 247228, March 2, 2021.
8 See G.R. No. 244128, September 8, 2020.
9 See G.R. No. 236725, February 2, 2021.
10 See id.
11 See G.R. No. 252198, April 27, 2021.
12 See id.
13 See Separate Opinion of Senior Associate Justice Estela M. Perlas-Bernabe in Madera v. COA.
14 Shall be known as "The 2009 Rules and Regulations on the Settlement of Accounts," approved on September 15, 2009.
15 See Separate Opinion of Senior Associate Justice Estela M. Perlas-Bernabe in Madera v. COA, supra note 8.
16 Which read:
E. The Rules on Return
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2. If a Notice of Disallowance is upheld, the rules on return are as follows:
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c. Recipients - whether approving or certifying officers or mere passive recipients - are liable to return the disallowed amounts respectively received by them, unless they are able to show that the amounts they received were genuinely given in consideration of services rendered.
d. The Court may likewise excuse the return of recipients based on undue prejudice, social justice considerations, and other bona fide exceptions as it may determine on a case to case basis.
17 See Madera v. COA, supra note 8.
18 See Securities and Exchange Commission v. COA, supra note 11; citations omitted.
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