Case Digest (G.R. No. 87211) Core Legal Reasoning Model
Core Legal Reasoning Model
Facts:
In Ruben Reyna and Lloyd Soria v. Commission on Audit (G.R. No. 167219, February 8, 2011), the Land Bank of the Philippines (“Land Bank”) Ipil Branch in Zamboanga del Sur implemented a cattle‐financing program under which four agrarian cooperatives—R.T. Lim Rubber Marketing Cooperative, Buluan Agrarian Reform Beneficiaries MPC, Tungawan Paglaum Multi‐Purpose Cooperative, and Siay Farmers’ Multi‐Purpose Cooperative—submitted Credit Facility Proposals (CFPs) requiring the execution of a Cattle‐Breeding and Buy‐Back Marketing Agreement with supplier Remad Livestock Corporation (“REMAD”). Pursuant to the CFP terms, the Ipil Branch released six checks totaling ₱3,115,000.00 as advance payments to REMAD in December 1993, although the cattle were not yet delivered. A post‐audit by Land Bank auditor Belen Oranu‐Lu disallowed the full ₱3,115,000.00 under CSB No. 95-005 and Notices of Disallowance Nos. 96-014 to 96-019, holding six branch officers—among them petitioners Reyna (Senior Fiel Case Digest (G.R. No. 87211) Expanded Legal Reasoning Model
Expanded Legal Reasoning Model
Facts:
- Land Bank Cattle-Financing Program
- Land Bank’s Ipil Branch offered loans to cooperatives under a cattle-breeding and buy-back program; applicants submitted a Credit Facility Proposal (CFP) and executed a Memorandum of Agreement (MOA) with Remad Livestock Corporation (REMAD).
- The CFP purportedly provided for loan release sixty days before cattle delivery and required specifications on inventory, health, buy-back, and replacement terms.
- Loan Granting and Advances
- Four cooperatives (RT Lim Rubber Marketing Cooperative, BARBEMCO, Tungawan PFMPC, SIFAMCO) received six loans totaling ₱3,375,775; REMAD was paid ₱3,115,000 in advanced checks.
- REMAD failed to deliver cattle; Land Bank auditor disallowed the advances under CSB No. 95-005 and Notices of Disallowance Nos. 96-014 to 96-019 for non-delivery and violation of bank policies and PD 1445 Section 88.
- Administrative and Criminal Proceedings
- Six Ipil Branch officers/employees (including petitioners Reyna and Soria) were held personally liable by the auditor and charged before the Ombudsman for gross negligence and graft (RA 3019).
- Petitioners’ motions for reconsideration and appeals to COA Regional Office IX were denied; its decision became final for failure to appeal timely.
- The Ombudsman dismissed the criminal complaint (February 23, 1999) for lack of evidence; BSP approved the write-off of the loans.
- Petitioners sought COA Commission Proper relief; COA Decision No. 2003-107 (July 17, 2003) and Resolution No. 2004-046 (December 7, 2004) affirmed the disallowance and personal liability, without prejudice to recover from REMAD.
Issues:
- Prepayment Scheme
- Whether COA gravely abused discretion by declaring prepayment prohibited under PD 1445 Section 88 and bank manual.
- Whether the CFP or MOA validly authorized prepayment to REMAD.
- Personal Liability
- Whether COA lacked jurisdiction to hold petitioners administratively liable despite adherence to bank’s FOG Lending Operations manual.
- Whether petitioners’ good faith and BSP-approved loan write-off extinguished their refund obligation.
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)