Case Summary (G.R. No. 254394)
Procedural Posture
Petitioners sought certiorari under Rule 64 (in relation to Rule 65) challenging COA En Banc Decision No. 2018-350 and COA Resolution No. 2020-291 which affirmed and/or modified a regional Notice of Disallowance. COA had initially issued ND No. 15-001-101-(13&14) demanding refund of P1,248,085.69 and identified municipal officials as liable. Regional COA affirmed the ND; COA En Banc later approved the regional decision but modified the liability disposition. Petitioners moved for reconsideration, were denied, and elevated the matter to the Supreme Court.
Core Facts
Dr. Edmund L. Lamela was appointed MHO on 11 September 2012 under a temporary appointment valid 12 months under the Administrative Code. After the 12-month period, he continued to perform MHO duties through at least 31 December 2014 and received salary and MOOE payments. COA issued a Notice of Disallowance covering payments for the period from 12 September 2013 to 31 December 2014, identifying municipal officials (including the incumbent mayor and accounting/budget/treasury officers) as participants in the transaction and holding them liable for the disallowed amount. Petitioners argued Dr. Lamela acted as MHO in a de facto capacity, that they acted in good faith, and that appropriations existed supporting the payments.
COA Regional Decision (2015) — Findings and Rationale
The COA Regional Office found no proof that Dr. Lamela’s temporary appointment had been renewed or converted to permanent status and therefore held that payments after the temporary appointment’s expiration were made without authority and were illegal. The regional COA applied the quantum meruit principle to award a reasonable compensation of P1,248,085.69 to Dr. Lamela for services rendered but found municipal officials (Mayor Alameda, Municipal Accountant Navaja, Municipal Budget Officer Lamela, and HRMO designate Salinas) liable for negligence and lack of due diligence in disbursing funds without verifying appointment validity. The Municipal Treasurer was considered to have performed ministerial duties only and was absolved at that level.
COA En Banc Decision and Reconsideration Resolution (2018, 2020)
On automatic review, COA En Banc issued Decision No. 2018-350, which approved the regional findings but modified the disallowance to exempt Dr. Edmund Lamela and Municipal Treasurer Julia Orcullo from liability. A subsequent COA Resolution (No. 2020-291) denied petitioners’ motion for reconsideration. Petitioners then filed the present certiorari petition before the Supreme Court.
Issues Presented to the Supreme Court
Petitioners alleged COA committed grave abuse of discretion and violated due process by: (I) declaring material dates without basis; (II) concluding Dr. Lamela was not a de facto officer without substantial evidence; (III) awarding compensation on equitable grounds while denying de facto status; and (IV) ordering refund without factual or legal basis. Procedural complaints also included an asserted error in COA’s reckoning of the filing date of the motion for reconsideration.
Procedural Due Process Determination by the Court
The Supreme Court found COA erred in determining the filing date of petitioners’ Joint Partial Motion for Reconsideration by relying on COA’s receipt stamp rather than the post office mailing stamp. However, the Court held no violation of due process occurred because the motion was resolved on the merits and petitioners had the opportunity to be heard. The Court emphasized that the essence of due process in administrative proceedings is the opportunity to explain one’s side, which was satisfied.
Legal Doctrine Applied — The De Facto Officer
The Court reiterated Philippine jurisprudence on de facto officership: an officer de facto is one who exercises office under color of authority and whose acts are validated for the protection of the public and third parties. The Court recited the Tuanda formulation requiring (1) existence of a de jure office; (2) color of authority or general acquiescence by the public; and (3) actual physical possession in good faith. The Court also cited historic definitions (Luna) identifying categories under which de facto officership may be found and underscored the rationale—public policy and convenience—behind validating acts of de facto officers.
Application of the De Facto Doctrine to the Facts
The Court found that COA improperly omitted the “general acquiescence by the public” element in concluding that color of authority was lost upon expiration of the temporary appointment. The petitioners submitted evidence supporting general acquiescence and the public’s perception of Dr. Lamela as MHO, including: an appropriation ordinance listing the MHO and salary, plantilla of personnel across fiscal years, photographs showing Dr. Lamela with municipal health personnel, and certificates recognizing his contributions to barangay-level sanitation achievements. These items demonstrated the public and municipal apparatus treated Dr. Lamela as MHO, thereby satisfying the color-of-authority/acquiescence element. The Court concluded Dr. Lamela had the requisite de facto status for the period in question.
Quantum Meruit and Validation of Payments
Although COA had applied quantum meruit to compensate Dr. Lamela while denying de facto status, the Supreme Court found that if an individual is a de facto officer who rendered services in good faith benefiting the government, payments received for such services are valid and the government sustained no loss warranting disallowance. Thus, payments made to Dr. Lamela for services rendered as de facto MHO were lawful and not subject to refund.
Liability of Municipal Officials and Standard for Bad Faith
The Court rejected COA’s imposition of liability on petitioners for alleged lack of due diligence. It emphasized controlling jurisprudence that mistakes by public officers do not con
Case Syllabus (G.R. No. 254394)
Case Caption, Citation, and Tribunal
- En Banc decision of the Supreme Court of the Philippines in G.R. No. 254394, promulgated on 05 April 2022.
- Petitioners: Libertad O. Alameda, D.M.D., Municipal Mayor; Maria Lourdes A. Navaja, Municipal Accountant (retired); and Rosenda D. Lamela, Municipal Budget Officer.
- Respondent: Commission on Audit (COA), represented by Michael G. Aguinaldo, Chairperson; Jose A. Fabia, Commissioner; and Isabel D. Agito, Commissioner.
- Relief sought: Certiorari with prayer for issuance of a writ of preliminary injunction and/or temporary restraining order under Rule 64 in relation to Rule 65 of the Rules of Court.
- The challenged COA issuances: Decision No. 2018-350 dated 3 October 2018 (COA En Banc) and Resolution No. 2020-291 dated 31 January 2020 (denying the Joint Partial Motion for Reconsideration).
Core Disposition of the Supreme Court
- The Supreme Court granted the petition for certiorari.
- Decision No. 2018-350 dated 3 October 2018 and Resolution No. 2020-291 dated 31 January 2020 of the Commission on Audit were reversed and set aside.
- Notice of Disallowance No. 15-001-101-(13&14) in the total amount of P1,248,085.69 was lifted.
- The injunctive relief sought became non momentum est.
- The opinion was authored by Justice Dimaampao; Chief Justice Gesmundo and Justices Perlas‑Bernabe, Leonen, Caguioa, Hernando, Lazaro‑Javier, Inting, Zalameda, M. Lopez, Gaerlan, Rosario, J. Lopez, Marquez, and Kho, Jr., concurred.
Precursor Facts and Appointment of Dr. Edmund L. Lamela
- On 11 September 2012, Dr. Edmund L. Lamela was appointed Municipal Health Officer (MHO) of San Agustin, Surigao del Sur by former Mayor Honolulu C. Go under a temporary appointment.
- The temporary appointment was valid for twelve months pursuant to Executive Order No. 292 (Administrative Code of 1987).
- During the 2013 national and local elections, petitioner Libertad O. Alameda was elected as the new municipal mayor and thereafter performed the duties and functions of municipal mayor.
Notice of Disallowance Issued by COA Team 2 LGS (Surigao del Sur)
- Notice of Disallowance (ND) dated 26 January 2015 covered the total amount of P1,248,085.69.
- The ND disallowed payments representing salaries, personnel benefits, and other operating expenses of Dr. Lamela for the period 12 September 2013 to 31 December 2014.
- Persons identified as liable in the ND and their alleged roles:
- Libertad O. Alameda — Municipal Mayor — for approving the payment.
- Maria Lourdes A. Navaja — Municipal Accountant — for certifying completeness of supporting documents.
- Julia R. Orcullo — Municipal Treasurer — for certifying availability of funds.
- Rosenda D. Lamela — Municipal Budget Officer — for certifying appropriation/allotment necessary and lawful.
- Edmund L. Lamela — Municipal Health Officer — for receiving the payment.
- Abundia P. Salinas — Administrative Officer IV/HRMO Designate — as HRMO Designate.
Administrative Appeal to COA Regional Office No. XIII
- Petitioners (Dr. Lamela, Navaja, and MBO Lamela), together with Abundia Salinas and Julia Orcullo, filed an Appeal Memorandum before COA Regional Office No. XIII in Butuan City, Agusan del Norte.
- Petitioners sought to set aside the ND and argued principally that:
- Dr. Lamela performed the duties and functions of MHO from September 2013 to December 2014 and rendered numerous accomplishments for the municipality.
- Dr. Lamela acted in a de facto capacity and was legally entitled to the emoluments of the office.
- Petitioners and Orcullo believed in good faith that Dr. Lamela’s appointment was permanent.
- Orcullo averred there was a duly approved appropriation ordinance which she was duty-bound to enforce.
COA Regional Office No. XIII Decision No. 2015-020 (14 December 2015)
- The COA Regional Office affirmed the Notice of Disallowance in full.
- Key findings and reasoning of the Regional Office:
- There was no proof of renewal of Dr. Lamela’s temporary appointment nor proof of change of status from temporary to permanent; therefore, payment of salary and MOOE after the effectivity of the temporary appointment lacked authority.
- Dr. Lamela’s continued assumption of duties did not justify payment because the expenditures were made without authority derived from a valid appointment.
- Petitioners and Orcullo should have exercised due diligence to ascertain effectivity of appointment prior to disbursing government funds; lack of such diligence rendered them liable.
- De facto officership was not established because, in the Regional Office’s view, the position as held by Dr. Lamela during the period lacked authority or color of authority; nevertheless, the Regional Office recognized that Dr. Lamela rendered services and, on equitable grounds, awarded quantum meruit compensation in the amount of P1,248,085.69 as reasonable compensation for services and incidental expenses.
- The Regional Office found Mayor Alameda, Municipal Accountant Navaja, Municipal Budget Officer Lamela, and HRMO Designate Salinas liable due to lack of due care and/or negligence in ascertaining the validity of appointment and legality of disbursements.
- The Regional Office ruled that Municipal Treasurer Orcullo’s participation was merely ministerial and did not obligate her to ensure the legality of payment or existence of Dr. Lamela’s valid appointment.
COA En Banc Decision No. 2018-350 (3 October 2018) and Subsequent Resolution
- On automatic review, COA En Banc rendered Decision No. 2018-350 dated 3 October 2018.
- The COA En Banc affirmed the disallowance but modified the Regional Office’s disposition by exempting Dr. Edmund L. Lamela and Ms. Julia R. Orcullo from liability under the disallowance.
- Petitioners filed a Joint Partial Motion for Reconsideration, which the COA denied by Resolution No. 2020-291 dated 31 January 2020.
Petition to the Supreme Court and Issues Raised
- Petitioners brought the case to the Supreme Court via petition for certiorari, alleging grave abuse of discretion by COA.
- Principal issues advanced by petitioners:
I. COA declared material dates of the case without basis in law or fact, violating petitioners' right to due process.
II. COA declared that Dr. Lamela was not a de facto officer without basis in law or substantial evidence, violating due process.
III. COA concluded Dr. Lamela was entitled to compensation based only on equity but without recognizing him as a de facto officer, contrary to law and without substantial evidence, violating due process.
IV. COA ordered petitioners to refund the amount under ND No. 15-001-101-(13&14) without factual or legal basis, violating due process.
Office of the Solicitor General and COA’s Subsequent Filings
- The Office of the Solicitor General (OSG), acting