Angeles vs. Commission on Audit

Factual Background

On March 12, 2010 at 2:30 p.m., cashier Lily De Jesus and revenue collection officer Estrellita Ramos of the Office of the Treasurer of the Municipality of San Mateo, Rizal, together with municipal driver Felix Alcantara, boarded the service vehicle to withdraw P1,300,000.00 in payroll money from the Land Bank of the Philippines located along J.P. Rizal St., Barangay Concepcion, Marikina City. After completing the transaction, they returned to their office. Around 4:30 p.m., they reached a traffic light along J.P. Rizal St. in front of the old barangay hall. A man crossed the street and fired a gunshot on the driver’s side of the vehicle. The bullet hit Felix’s left arm and pierced his left chest, after which Felix felt numb and eventually passed out. Another man then broke the glass window on the passenger’s side and forcibly took the black bag containing the payroll money from Lily. The man subsequently shot Lily, who died as a result.

After the incident, police arrested suspects Jay-ar Magpuri and Virgilio Redito, who were indicted for Robbery with Homicide.

Initial Request for Relief from Accountability

On March 15, 2010, officer-in-charge municipal treasurer Estelita informed the Audit Team Leader of the incident and requested a relief from accountability for the lost payroll money. She explained that she assumed office on October 27, 2008, and that prior practice involved the paymaster or cashier transacting with the depositary bank without any police escort. She further stated that the standard operating procedure required a travel pass from the Human Resource Development Officer indicating the personnel’s name, date, time, and purpose of travel.

Petitioner added that the municipal mayor Jose Rafael Diaz and the Audit Team Leader recommended the grant of relief based on the positive identification of the culprits and the absence of fault or participation on her part. The Audit Team Leader also advised that accountable officers should have a security escort for future similar transactions. The Supervising Auditor did not object to the recommendation.

Adjudication and Settlement Board Ruling

Despite the favorable recommendations, on May 30, 2012, the COA-Adjuciation and Settlement Board denied petitioner’s request for relief and found Estelita and Lily’s estate solidarily liable to pay P1,300,000.00. The Board reasoned that because the amount involved was significant, a security escort was necessary, and the absence of such escort allegedly provided an opportunity for the perpetrators to commit the robbery.

COA Proceedings and Denial

Petitioner elevated the matter to the COA through a petition for review. She contended that she exercised due diligence despite the lack of specific regulations on safeguarding payroll money while in transit. She argued that requiring a security escort would attract attention and increase risk, and that an escort could not have prevented the violent robbery that caused the injuries to the driver and the death of the cashier. She also invoked the recommendations favoring relief.

On April 13, 2015, COA denied the petition and affirmed the Board’s finding of solidary liability. COA held that a higher degree of precaution was required given the amount withdrawn and transported. It further ruled that securing only a travel pass without a security escort fell short of the necessary diligence in handling government funds.

Petitioner moved for reconsideration. COA later denied the motion on June 6, 2016 for being filed out of time and for lack of merit.

Petition for Certiorari: Timeliness Under Rule 64

Petitioner filed a Petition for Certiorari under Rule 64 in relation to Rule 65. She asserted that the absence of a security escort alone did not establish negligence, and she emphasized that the robbery occurred unexpectedly in broad daylight on a public street.

The Supreme Court first addressed procedural timeliness. Citing Section 3, Rule 64 of the Rules of Court, the Court explained that the petition must be filed within thirty (30) days from notice of the COA judgment, and that the period is interrupted only upon filing of a motion for reconsideration. If the motion is denied, the petition may be filed only within the remaining period, which must not be less than five days from notice of denial. The Court required the petition to show when notice of the COA decision was received, when the motion for reconsideration was filed, and when notice of denial was received, so that it could determine whether the petition was timely.

The Court observed that petitioner merely stated the date she received the COA resolution denying reconsideration. She did not state the date she was notified of the COA decision denying her appeal, nor the date she filed the motion for reconsideration. Even so, the Court “reasonably concluded” that the petition was filed beyond the reglementary period. The Court stressed that if the motion for reconsideration was belatedly filed, the petition for certiorari could have been dismissed outright as out of time. Nevertheless, the Court noted that it has the discretion to proceed despite procedural defects in order to prevent grave injustice, and it invoked jurisprudence where procedural lapses were relaxed in the broader interest of justice.

Liberal Application in the Interest of Substantial Justice

The Court acknowledged that COA denied the motion for reconsideration because it was filed out of time and lacked merit. It also recognized the general rule on procedural compliance. However, the Court held that the circumstances warranted a liberal application of procedural rules to avert a grave injustice to petitioner that was not commensurate with her failure to comply with procedure.

The Court referenced The Law Firm of Laguesma Magsalin Consulta and Gastardo v. Commission on Audit, where the Court relaxed the strict observance of the reglementary period because the issue involved the right to due compensation vis-à-vis COA’s duty to prevent unauthorized disbursement of public funds. It also cited Sto. Nino Construction v. Commission on Audit, where the petition was given due course in the interest of substantial justice despite the belated filing of a motion for reconsideration. The Court reiterated the principle that rules of procedure are tools designed to facilitate the attainment of justice.

Accordingly, the Court proceeded to decide the case on the merits.

Legal Standards on Accountability and Negligence

On the merits, the Court reiterated that public properties and funds for official use and purpose must be utilized with the diligence of a good father of a family. Under Section 105 of PD No. 1445—the Government Auditing Code—accountable officers are liable for losses caused by improper or unauthorized use, and for losses occasioned by negligence in the keeping or use of property, as well as losses attributable to negligence in keeping government funds.

The Court emphasized that accountable officers may be relieved from accountability absent evidence that they acted negligently in handling public properties or funds. It also noted that relief may apply when loss occurs while funds are in transit, or if loss is caused by fire, theft, or other casualty or force majeure.

In Bintudan v. Commission on Audit, the Court had explained that negligence is a relative and comparative concept. It depends on the surrounding circumstances and the degree of care and vigilance that the situation reasonably requires. Negligence is the omission to do something that a reasonable person would do, or the doing of something that a prudent and reasonable person would not do. It is, therefore, want of care required by the circumstances.

Whether Petitioner and Lily Were Negligent

Applying these standards, the Court ruled that petitioner and Lily exercised the reasonable care and caution that an ordinary prudent person would have observed under similar circumstances. The Court found that they had done what was “humanly possible” in light of the facts.

The Court considered that cashier Lily and the revenue collection officer used the service vehicle driven by the municipal driver in going to and from the bank, which was viewed as safer than other means of transportation. It also found that they followed existing practice by securing a travel pass and performing the prescribed procedure for withdrawing payroll money. The bank transaction was conducted during regular office hours. The Court then identified the central event as an armed robbery attack that occurred while the group was returning to the office. The Court accepted petitioner’s argument that the robbery was unexpected in the sense that it occurred in broad daylight on a public street. The Court held that the violent robbery, resulting in injuries to the driver and the death of the cashier, could not have been prevented, and thus was beyond petitioner’s or Lily’s control.

The Court further relied on the fact that the municipal mayor, the audit team leader, and the supervising auditor recommended relief based on the positive identification of the culprits and the absence of petitioner’s fault or participation.

COA’s Reliance on the Absence of Security Escort

The Court disagreed with COA’s conclusion that a higher degree of diligence was required and that the absence of a security escort constituted negligence. It held that the absence of security escort, standing alone, did not indicate negligence. The Court referenced Hernandez v. Chairman, Commission on Audit, where relief from accountability was granted even though the petitioner was un-escorted and used public transport. In Hernandez, the petitioner decided to bring money home to Marilao, Bulacan, for delivery the next day due to timing and hazards of travel, and robbers attacked him in broad daylight. The Court in Hernandez held that the loss was due to a fortuitous event and could not be attributed to imprudence and negligence. It also cited the caution