Case Digest (G.R. No. 210936)
Facts:
This is Teodoro B. Cruz, Jr., Melchor M. Alonzo, and Wilfredo P. Alday v. Commission on Audit, G.R. No. 210936, June 28, 2016, the Supreme Court En Banc, Sereno, C.J., writing for the Court.Petitioners were officials of the Light Rail Transit Authority (LRTA): Teodoro B. Cruz, Jr. (administrator), Melchor M. Alonzo (Administrative Department manager), and Wilfredo P. Alday (General Services Division manager). The LRTA Bids and Awards Committee awarded a contract for repair/rewinding of 23 traction motor armatures to TAN-CA International Inc./Yujin Machinery, Ltd. as lowest bidder at US$94,800, although no formal service repair agreement was executed. Twenty-three units were sent to Korea under a Letter of Credit issued by the Land Bank; 13 units were repaired and shipped back in February 2002, three of which were rejected and returned to the LRTA in February 2003, while 10 units remained in Korea. US$58,800 of the Letter of Credit had been paid; the remaining US$36,000 was cancelled at LRTA’s request.
An auditor issued Audit Observation Memorandum (AOM) No. 2003-001 (21 May 2003) noting, among others, absence of a service repair agreement, payment without certification of testing/acceptance, contractor’s failure to return waste materials (TOR Item No. 2.22), and that ten units remained with the contractor. On 27 February 2008 the Commission on Audit (COA) issued Notice of Disallowance (ND) No. LRTA 2008-005 (2002) disallowing US$58,800 and naming several LRTA officers and the contractor as persons responsible; the ND cited lack of supporting documents (P.D. No. 1445, Sec. 4(6)), failure to file legal action, failure to forfeit performance bond, incomplete repairs, and payment for 13 units when only nine passed a one-year warranty.
Petitioners appealed administratively to COA, arguing (inter alia) that payment was justified by circumstances (delivery and five-month testing), that nine units passed the one-year warranty so payment for those was proper, that they did not know of failures that allegedly occurred after they left LRTA, and that COA surreptitiously re-opened a settled account in violation of P.D. No. 1445, Sec. 52 (three-year prescriptive period). COA, through Decision No. 2012-142 (13 September 2012), denied the appeal and affirmed the ND, and its Resolution of 6 December 2013 denied reconsideration. Petitioners then filed a Petition for Certiorari under Rule 64 of the Rules of Court on 10 February 2014 assailing COA’s Decision and Resolution for grave abuse of discretion.
...(Pro-only)Issues:
- Did COA commit grave abuse of discretion in disallowing the payment of US$58,800 and in denying petitioners’ administrative appeal?
- Was the issuance of ND No. LRTA 2008-005 (2002) barred by the three-year prescription under P.D. No. 1445, Sec. 52 because the AOM was issued in 2003 and the ND in 2008?
- Was the obligation to repair the 23 traction motor armatures divisible such that payment for 13 units absolved LRTA officers of liability for the remainder?
- Are petitioners Cruz, Alonzo and Alday personally liable for the disallowed a...(Pro-only)
Ruling:
- (Pro-only)
Ratio:
- (Pro-only)
Doctrine:
- (Pro-only)