G.R. No. 11491 - Quiroga vs. Parsons Hardware Co.

Peter B. Favila (petitioner) served as the Secretary of the Department of Trade and Industry (DTI) from 2008 to 2010.
Favila was an ex-officio member of the Board of Directors (BOD) of the Trade and Investment Development Corporation of the Philippines (TIDCORP), a government corporate entity established under PD No. 1080 and amended by RA No. 8494.

Between 2005 and 2007, TIDCORP’s BOD approved eight Board Resolutions granting monetary benefits including productivity enhancement pay, developmental contribution bonuses, corporate guaranty, grocery subsidy, and anniversary bonuses to its board members and their alternates.
These benefits were purportedly granted to board members in their ex-officio capacities.

On July 13, 2012, COA issued Notice of Disallowance (ND) No. 2012-001 disallowing various disbursement vouchers amounting to PHP 4,539,835.02, representing monetary benefits granted to TIDCORP board members for the period January 1, 2005 to December 31, 2010.
The disallowance was based on Article IX-B, Section 8 of the 1987 Constitution, which prohibits double, additional, or indirect compensation for public officers unless specifically authorized by law.
Favila was identified as a recipient of PHP 454,598.28 in benefits from October 2008 to May 2010.

TIDCORP, on behalf of Favila and others, contested the disallowance, arguing that under Section 7 of RA 8494, the Board has exclusive power to fix remuneration and benefits. They also claimed COA violated due process by issuing the ND without prior notice of suspension.
COA counters that Section 7 pertains only to officers and employees, not the Board members or ex-officio members; the latter are limited to per diem allowances under Section 13 of RA 8494.

In Decision No. 2019-001 (January 13, 2019), the COA Proper affirmed the disallowance, ruling that board members in their ex-officio capacity were not entitled to additional compensation as their services were already compensated from their principal offices.
Motions for reconsideration filed by Favila were denied in COA Resolution No. 2020-177.
Favila filed a Petition for Certiorari before the Supreme Court, asserting entitlement to the benefits, good faith receipt, and procedural due process violations.
COA in its Comment maintained the correctness of its decisions and the necessity for Favila to refund the benefits.

The Supreme Court, in its November 29, 2022 Decision, dismissed the petition and affirmed COA's rulings, holding Favila solidarily liable as approving officer and recipient for the full amount of PHP 4,539,835.02.
The Court relied on its prior ruling in Suratos v. COA, which held that ex-officio members are only entitled to per diem, and the authorized benefits granted were ultra vires.
The Court rejected Favila’s claim of good faith, holding he was not a mere passive recipient.

Favila filed a Motion for Reconsideration, asserting he neither approved the resolutions nor participated in their approval and that he received benefits in good faith.
The Court granted the Motion in part, holding he is liable only as a recipient/passive payee and must return only the amount he actually received (PHP 454,598.28).
The Court applied the rules on return from Madera v. Commission on Audit, which distinguish liability levels based on the role of the person — as approving officer or mere recipient.
Favila was not involved in approving the resolutions (which were approved before he joined the BOD in 2008) and thus is not liable as an approving officer.
The benefits granted lacked lawful basis and were not given as consideration for services rendered, so exceptions excusing return do not apply.
There were no social justice or humanitarian grounds to exempt Favila from refund.

Whether Petitioner Peter B. Favila, as ex-officio member of TIDCORP’s Board, was lawfully entitled to receive the monetary benefits in question.
Whether Favila acted as an approving or certifying officer responsible for the grant of the benefits.
Whether Favila’s right to procedural due process was violated by COA’s issuance of the Notice of Disallowance without prior notice of suspension.
Whether Favila is liable to return the full disallowed amount or only the amount he actually received.
Whether Favila’s claim of good faith receipt of benefits exempts him from liability to return the amounts received.