G.R. No. 184068 - Guy vs. Guy

Case Summary (G.R. No. 184068)

Background and Precedent Case

This case is connected to Jacomille v. Abaya, where Reynaldo M. Jacomille questioned the procurement for the MVPSP due to insufficient appropriation under the 2013 GAA and the absence of a required Multi-Year Obligational Authority. The Supreme Court, on April 22, 2015, dismissed Jacomille’s petition as moot because the 2014 GAA appropriated sufficient funds to cover the MVPSP. However, the Court noted that the earlier procurement process was irregular and improperly funded during 2013. The 2014 appropriation “cured” those defects, rendering earlier disputes moot. Jacomille’s motion for reconsideration was denied, affirming the sufficiency of the 2014 GAA’s appropriation.

Factual Antecedents

The Department of Transportation and Communications (DOTC) oversees transportation and communications systems, with the LTO tasked to register vehicles and issue license plates. The LTO formulated the MVPSP to standardize and supply new license plates. In February 2013, the DOTC publicly invited bids for this program with an approved budget of approximately Php 3.85 billion under the 2014 GAA. The DOTC Bids and Awards Committee followed prescribed procedures for the conduct of bidding, resulting in awarding the contract to JKG-Power Plates after evaluation of bids. The contract was signed in February 2014. The Senate, through its Public Services Committee, investigated reported delays in plate release in early 2014. The first batch of plates was delivered in April 2014.

Audit and COA Actions

The Commission on Audit (COA) conducted audits and raised concerns about the legality of advance payments made to JKG-Power Plates, issuing several Audit Observation Memoranda and eventually a Notice of Disallowance in July 2015, stating that certain payments violated provisions of the Administrative Code of 1987, Government Auditing Code, DBM Circulars, and Government Procurement Reform Act rules.

Petitioners’ Arguments

Petitioners sought to annul the implementation of the MVPSP using funds from the 2014 GAA, contending that:

The transfer of appropriations earmarked for Motor Vehicle Registration and Driver's Licensing Regulatory Services to the MVPSP was unconstitutional.
The exclusion of the MVPSP as a separate item in the 2014 GAA deprived the President of veto power under Article VI, Section 27(2) of the Constitution.
The expenditure for the MVPSP without clear appropriation was unconstitutional.

Respondents’ Arguments

The Office of the Solicitor General (OSG) acknowledged the 2014 GAA did not specifically itemize the MVPSP but argued that funds came from a valid appropriation and that no unconstitutional transfer took place. DOTC Secretary Abaya asserted that the 2014 GAA’s allocation under the item "Motor Vehicle Registration and Driver's Licensing Regulatory Services" included MVPSP funding, consistent with legislative intent. JKG-Power Plates contended the procurement legality had been settled in Jacomille v. Abaya and that COA’s Notice of Disallowance was yet pending.

Issues Presented

Whether the 2014 GAA included an appropriation covering the implementation of the MVPSP.
Whether the use of funds appropriated under the 2014 GAA for the MVPSP was constitutional.

Supreme Court’s Findings on Appropriation and Stare Decisis

The Court affirmed that the 2014 GAA sufficiently appropriated funds for the MVPSP under the Major Final Output 2 (MFO2) item “Motor Vehicle Registration and Driver's Licensing Regulatory Services,” amounting to Php 4,843,753,000 including an increase specifically requested for the MVPSP. The Court held that its prior ruling in Jacomille v. Abaya constituted a binding precedent (stare decisis) which settled the question of sufficiency and legality of funding for the MVPSP under the 2014 GAA. The Court stressed that this doctrine obliges courts to adhere to established legal principles when facts are substantially the same, barring relitigation on the matter.

Legislative Intent and Budget Details Support Appropriation

The Court examined budget documents and official correspondence demonstrating that the DOTC requested and received an increase in the MFO2 budget to fund the MVPSP. Congressional appropriations reflected this increase; legislative hearings confirmed the MVPSP as the intended use of these funds. The Court clarified that this was not a transfer of funds from one item to another but a direct appropriation that included the MVPSP within the broader program for motor vehicle registration and licensing services, in line with performance-informed budgeting principles.

Constitutionality of Funds Use and Rejection of Lump-Sum Appropriation Claim

The Court addressed the petitioners’ contention that the MFO2

Case Syllabus (G.R. No. 184068)

Background and Procedural History

The petitioners, members of the House of Representatives and taxpayers, filed a special civil action for certiorari and prohibition challenging the implementation of the Motor Vehicle License Plate Standardization Program (MVPSP) by the Land Transportation Office (LTO), using funds appropriated under the General Appropriations Act of 2014 (2014 GAA).
The case closely relates to the prior decision in Jacomille v. Abaya, which questioned the legality of procurement under the MVPSP due to insufficient budget appropriations under the 2013 GAA and lack of required Multi-Year Obligational Authority (MYOA).
In Jacomille v. Abaya, the Supreme Court dismissed the petition as moot and academic on the basis that the 2014 GAA had appropriated sufficient funds to cover the MVPSP, stating that prior procurement irregularities were "cured" by this appropriation.
The petitioners in the present case do not challenge the COA’s Notice of Disallowance related to the MVPSP payments but focus on the constitutionality of fund transfers and appropriations involved in the MVPSP implementation.
Initially consolidated with Jacomille, the cases were subsequently deconsolidated due to distinct legal issues: Jacomille centered on procurement legality, and this case on implementation funding and constitutionality.
A temporary restraining order was issued on June 14, 2016, directing the halt of license plate release and distribution.

Factual Antecedents

The Department of Transportation and Communications (DOTC) is the government agency responsible for transportation systems and services, including the LTO as a line agency tasked with vehicle registration, issuance of license plates, and regulation.
The LTO formulated the MVPSP to replace existing license plates, which were diverse, sometimes illegible, and difficult to authenticate, thus impairing law enforcement and national security.
The procurement process for the MVPSP was initiated with a public Invitation To Bid in February 2013, scheduled through a series of pre-bid conferences and bid submissions.
Despite irregularities in procurement, such as inadequate appropriation at the time of bidding and failure to secure the MYOA, the DOTC awarded the contract to the lowest bidder JKG-Power Plates.
Though the Notice of Award was issued in July 2013, the contract was only signed in February 2014 after the 2014 GAA appropriated funds necessary for the project.
Deliveries began in April 2014, but subsequent audits by the Commission on Audit (COA) revealed irregularities and resulted in a Notice of Disallowance against advance payments.
The petitioners challenged the constitutionali