Case Summary (G.R. No. L-52688)
Petitioner
Fortune Life Insurance Company, Inc., which sought judicial relief by filing a petition for certiorari under Rule 64 (in relation to Rule 65) of the Rules of Court to challenge COA’s disallowance of the LGU payment and the denial of related administrative remedies.
Respondents
Commission on Audit (COA) proper; COA Regional Office No. VI–Western Visayas; Audit Group LGS‑B, Province of Antique; and the Provincial Government of Antique (the local government unit whose payment was disallowed).
Key Dates
COA decision denying the petition for money claim: November 15, 2012 (received by petitioner on December 14, 2012). Motion for reconsideration filed: January 14, 2013. Denial of the motion received by petitioner: July 14, 2014. Petition for certiorari filed by petitioner: August 12 (as stated in antecedents) / August 13, 2014 (as used in the Court’s reckoning). Resolution dismissing the petition: promulgated August 19, 2014. Motion for reconsideration of the dismissal denied by the Court; the Court’s resolution on reconsideration was promulgated January 27, 2015.
Applicable Law and Authorities
Constitutional basis: 1987 Constitution (decision rendered in 2015). Statutes and rules applied or invoked: Republic Act No. 7160 (Local Government Code), specifically Sections 447 and 458; Republic Act No. 9184 (Government Procurement Reform Act), specifically Section 21 on publication; Rules of Court — Rule 64 (certiorari to review judgments/orders of administrative commissions), Rule 65 (general certiorari), Rule 42 (petition for review), and Section 13, Rule 13 (proof of service); A.M. No. 11‑9‑4‑SC (Efficient Use of Paper Rule). Controlling precedents cited by the Court include Neypes v. Court of Appeals, Pates v. Commission on Elections, Cruz v. Court of Appeals, Reyna v. Commission on Audit, Canton v. City of Cebu, and Delos Santos v. Court of Appeals.
Antecedents and Administrative Rulings
The Provincial Government of Antique and Fortune Life executed a memorandum for group life insurance coverage of barangay officials and personnel, with the provincial government obligating P4,393,593.60 and submitting the disbursement voucher to COA–Antique for pre‑audit. COA disallowed the payment for lack of legal basis under the Local Government Code. The LGU’s appeal within the COA administrative process was denied. Fortune Life filed a petition for money claim before COA, which COA denied in a decision dated November 15, 2012. In that decision COA held that Sections 447 and 458 of the Local Government Code expressly vest the power to secure group insurance for barangay workers in municipal or city governments (not the provincial government), and COA also noted lack of required publication under Section 21 of RA 9184. The petitioner received the COA decision on December 14, 2012, filed a motion for reconsideration on January 14, 2013, and received the denial on July 14, 2014. The petitioner then filed a petition for certiorari in the Supreme Court, which was dismissed by resolution dated August 19, 2014 for late filing, non‑submission of required proof of service and verified declaration, and failure to show grave abuse of discretion by respondents.
Issues Presented to the Court
- Whether the petition for certiorari was timely, in light of the “fresh period” rule articulated in Neypes v. Court of Appeals (i.e., whether the filing period for a Rule 64 petition is measured from receipt of the denial of the motion for reconsideration). 2. Whether the petitioner complied with Rules of Court requirements on proof of service and verified declaration (including invocation of the Efficient Use of Paper Rule and submission of the petition on CD). 3. Whether the petitioner established grave abuse of discretion on the part of COA warranting relief (arguments cited: divided COA membership in the decision, delay in promulgation, terseness of the denial, novelty of the issue, and disagreement by Senator Aquilino Pimentel with COA’s position). 4. Whether the petitioner and counsel’s language accusing Court staff and Members warranted contempt proceedings.
Ruling — Noncompliance with Proof of Service Requirements
The Court denied the motion for reconsideration in part because the petitioner failed to comply with Section 13, Rule 13 (proof of service) of the Rules of Court. Section 13 requires two forms of proof when service is by registered mail: (a) an affidavit of the person effecting the mailing; and (b) the registry receipt issued by the mailing office (or the registry return card/unclaimed letter together with the postmaster’s notice in lieu thereof). Compliance is mandatory; absence of either component defeats proof of service. The petition included an affidavit of service stating that service was effected under certain registry receipt numbers, but it only contained cut print‑outs of what appeared to be registry receipt numbers rather than the original registry receipts themselves. The Court held that reproductions or cut print‑outs of registry receipt numbers do not satisfy the rule’s requirement that the registry receipts be appended; the rule demands the original registry receipts (or the alternatives expressly provided). Consequently, the Court correctly concluded there was no compliance with proof of service requirements, which justified dismissal on procedural grounds. The Court relied on precedent establishing the mandatory nature of the requirement (Cruz v. Court of Appeals).
Ruling — Inapplicability of the Neypes “Fresh Period” Rule to Rule 64 Petitions
The Court rejected the petitioner’s contention that the “fresh period” rule (as enunciated in Neypes) should govern the filing period for a Rule 64 petition and thereby render the petition timely. The Court explained the procedural and substantive distinctions between a petition for review under Rule 42 and a petition for certiorari under Rule 64: Rule 42 is an appeal from an RTC in its appellate jurisdiction and is concerned with errors of fact or law (with a 15‑day filing period measured from receipt of the decision or from denial of a motion for new trial/reconsideration); Rule 64 is a petition for certiorari akin to Rule 65 and is available to challenge a judgment, final order, or resolution of constitutional commissions (such as COA) only on the ground of grave abuse of discretion amounting to lack or excess of jurisdiction, and it has a 30‑day filing period from notice of the judgment/order/resolution. Under Section 3 of Rule 64, a motion for new trial or reconsideration interrupts the running of the 30‑day period, but if the motion is denied the petitioner may file within the remaining period, which shall not be less than five days from notice of denial. The Court found the petitioner’s motion for reconsideration was filed beyond 30 days from receipt of the COA decision (it was filed 31 days after receipt), and, critically, when the denial was received on July 14, 2014 the petitioner had only five days (until July 19, 2014) to file the Rule 64 petition. The petitioner filed in August (August 12/13, 2014), rendering the petition untimely by some 25 days. The Court relied on Pates v. Commission on Elections in holding that misapprehension that the Neypes fresh period rule applied did not excuse the late filing; relaxation of procedural rules is permissible only in circumstances that would relieve a litigant from injustice not commensurate with the litigant’s own neglect, which was absent here.
Ruling — Failure to Establish Grave Abuse of Discretion on the Merits
Separately, the Court found that the petition for certiorari lacked merit on substantive grounds because it failed to demonstrate grave abuse of discretion by COA. The Court reiterated the stringent standard of grave abuse — capricious, whimsical, arbitrary or despotic exercise of judgment so patent and gross as to amount to an evasion of a positive duty or a virtual re
Case Syllabus (G.R. No. L-52688)
Title and Source
- Reported as 752 Phil. 97, En Banc, G.R. No. 213525, January 27, 2015.
- Case caption as set forth in the source: Fortune Life Insurance Company, Inc., petitioner, versus the Commission on Audit (COA) Proper; COA Regional Office No. VI–Western Visayas; Audit Group LGS-B, Province of Antique; and the Provincial Government of Antique, respondents.
- Resolution authored by Justice Bersamin; concurrence by Justices Carpio, Velasco, Jr., Leonardo-De Castro, Peralta, Del Castillo, Villarama, Jr., Perez, Mendoza, Reyes, Perlas-Bernabe, Leonen, and Jardeleza; Chief Justice Sereno and Justice Brion noted as on leave (Sereno on leave; Brion on official leave); Acting Chief Justice designated per Special Order No. 1914.
Nature of Petition and Relief Sought
- Petition for certiorari under Rule 64 in relation to Rule 65 of the Rules of Court filed by petitioner Fortune Life Insurance Company, Inc.
- Petitioner sought review of COA decisions that disallowed payment of premiums and denied its petition for money claim.
- Relief requested in the petition for certiorari was reversal or annulment of the COA decision(s) and allowance of petitioner’s money claim.
Procedural Posture and Disposition Below
- The Court dismissed the petition for certiorari by resolution promulgated August 19, 2014.
- Grounds stated in the dismissal: (a) late filing of the petition; (b) non-submission of proof of service and verified declaration; and (c) failure to show grave abuse of discretion by respondents.
- The present document is the petitioner’s motion for reconsideration of that dismissal, which the Supreme Court denied by the January 27, 2015 resolution.
Antecedent Facts and Administrative Proceedings
- The Provincial Government of Antique (LGU) and petitioner executed a memorandum of agreement concerning life insurance coverage for qualified barangay secretaries, treasurers, and tanod.
- The Provincial Government obligated the sum of P4,393,593.60 for the premium payment and submitted the corresponding disbursement voucher to COA–Antique for pre-audit.
- COA–Antique disallowed the payment for lack of legal basis under Republic Act No. 7160 (Local Government Code).
- The LGU appealed COA–Antique’s disallowance; the appeal was denied.
- Petitioner then filed a petition for money claim with the Commission on Audit.
- On November 15, 2012, COA issued a decision denying the petition for money claim.
- COA’s decision held that, under Sections 447 and 458 of the Local Government Code, only municipal or city governments are expressly vested with the power to secure group insurance coverage for barangay workers.
- COA also noted the LGU’s failure to comply with the publication requirement under Section 21 of Republic Act No. 9184 (Government Procurement Reform Act).
- Petitioner received a copy of COA’s decision on December 14, 2012, and filed a motion for reconsideration on January 14, 2013.
- COA denied the motion for reconsideration; the denial was received by petitioner on July 14, 2014.
- Petitioner thereafter filed the petition for certiorari in the Supreme Court (the source records filing as August 12, 2014 in one place and August 13, 2014 in another).
Procedural Issues Raised by Petitioner on Reconsideration
- Petitioner argued that the petition for certiorari was timely filed by invoking the “fresh period” rule enunciated in Neypes v. Court of Appeals (G.R. No. 141524, September 14, 2005, 469 SCRA 633), contending the period to file should be reckoned from receipt of the denial of the motion for reconsideration.
- Petitioner asserted compliance with the proof of service requirement by attaching an affidavit of service to the petition, claiming conformity with Section 3, Rule 13 of the Rules of Court.
- Petitioner admitted to having overlooked submission of a verified declaration and asked the Court to accept the declaration attached to the motion for reconsideration, invoking substantial compliance and the Efficient Use of Paper Rule (A.M. No. 11-9-4-SC, November 13, 2012) because a compact disc containing the petition and annexes had been previously submitted.
- Petitioner contended that it had shown grave abuse of discretion by COA based on several claimed defects in COA’s process and decision.
Court’s Ruling — Summary
- The Court denied the motion for reconsideration for lack of merit and affirmed dismissal of the petition for certiorari.
- The resolution addresses four principal rulings: (I) noncompliance with proof of service requirement; (II) inapplicability of the fresh period rule to a Rule 64 petition; (III) lack of merit in the substantive claim of grave abuse of discretion; and (IV) petitioner’s and counsel’s disrespectful language toward the Court, with orders to show cause for possible contempt and disbarment.
I. Noncompliance with Proof of Service (Section 13, Rule 13, Rules of Court)
- The Court explained Section 13, Rule 13 distinguishes two forms of proof of service: affidavit of service and registry receipt when service is by registered mail.
- Where service is by registered mail, proof must consist of both the affidavit of the person effecting the mailing and the registry receipt issued by the mailing office; both must be appended to the paper being served.
- Compliance with this rule is mandatory; absence of either component results in no proof of service.
- In this case, petitioner appended an affidavit of service executed by Marcelino T. Pascua, Jr., stating service by registered mail under specific registry receipt numbers (70449, 70453, 70458, 70498 and 70524).
- The petition, however, only bore cut print-outs of what appeared to be registry receipt numbers on pages 64–65 of the petition rather than the actual registry receipts.
- The Court held that the rule requires the registry receipts themselves, not reproductions; the cut print-outs did not substantially comply with the rule.
- On that basis, the Court concluded petitioner failed to comply with the proof of service requirement, justifying dismissal.
II. Inapplicability of the Fresh Period Rule to Rule 64 Petitions
- Petitioner argued the fresh period rule (Neypes) applied by analogy to Rule 64 petitions, contending Rule 64 petitions are akin to petitions for review under Rule 42 whose filing period is measured from receipt of denial of a motion for new trial or reconsideration.
- The Court rejected parity between a petition for review under Rule 42 and a petition for certiorari under Rule 64.
- Rule 42 governs appeals from the Regional Trial Court’s appellate jurisdiction and allows review on questions of fact, law, or mixed que