Case Summary (G.R. No. 185544)
Procedural History
After belatedly requesting COA concurrence (July 2005) and receiving notice of OGCC’s denial of final approval (December 2005), CDC and the law firm appealed to COA. COA denied clearance (September 2007) for violation of Circular No. 98-002 and Memorandum Circular No. 9, disallowed payment, and ruled personal liability on CDC officials. Motions for reconsideration were denied (November 2008). The law firm filed a certiorari petition (December 2008) under COA’s Rules and Rule 64 of the Rules of Civil Procedure.
Issues
Procedural:
- Whether the petition was timely filed.
- Whether petitioner is a real party-in-interest.
Substantive:
3. Whether COA erred in denying CDC’s request for clearance to engage petitioner.
4. Whether COA properly relied on Polloso v. Gangan and PHIVIDEC Industrial Authority v. Capitol Steel Corp.
5. Whether COA erred in disallowing quantum meruit payment and imposing personal liability on CDC officials.
Petitioner’s Contentions
• Authorization: May 20, 2002 OGCC letter equates to final approval for all but two cases.
• Precedents inapplicable: Polloso and PHIVIDEC involved agencies lacking any OGCC/COA approvals.
• Real party-in-interest: firm rendered services for CDC and for the Republic, entitled to fees.
Respondents’ Contentions
• Timeliness: petition filed beyond the 30-day reglementary period after denial of reconsideration.
• Real party-in-interest: actual aggrieved party is CDC, not the law firm.
• Lack of final OGCC approval and COA concurrence; request made three years after engagement.
• Precedents control: indispensability of both OGCC/OSG conformity and COA written concurrence before hiring private counsel.
Timeliness of the Petition
Under Rule 64, Section 3, Rules of Civil Procedure, the petition must be filed within 30 days from receipt of the denial of reconsideration, inclusive of the time consumed by filing that motion. Petitioner received denial on November 20, 2008, allowing filing until December 1. The petition was filed on December 19, well beyond the reglementary period. Although procedural rules may be relaxed under exceptional circumstances involving life, liberty, property or honor, special and compelling circumstances, and to avoid unjust enrichment, COA found no such justification here.
Real Party-in-Interest
A real party-in-interest “stands to be benefited or injured by the judgment.” The question is payment of fees to the law firm. Upholding COA’s rulings either denies or allows that payment. The law firm is therefore a real party-in-interest. CDC’s Board, whose actions triggered the dispute, should have been impleaded as necessary parties for complete relief.
Requirement of Prior Authorization
1987 Constitution Article IX-D, Section 2(2), Administrative Code Section 10, EO 292, and Memorandum Circular No. 9 vest OGCC with exclusive handling of GOCC legal matters and allow private counsel only in exceptional cases with OGCC conformity and COA concurrence. COA Circular No. 86-255 (as amended) expressly requires both written OGCC/OSG conformity and COA concurrence before hiring private counsel; failure to comply disallows payment and creates personal liability for officials. CDC did not submit the signed retainership contract after conditional OGCC approval; OGCC final approval was denied; COA concurrence was sought only three years later. COA correctly disallowed the engagement as unauthorized.
Application of Polloso and PHIVIDEC
In Polloso v. Gangan and PHIVIDEC Industrial Authority v. Capitol Steel Corp., this Court enforced Circular No. 86-255 and Memorandum Circular No. 9, disallowing payment where no prior OGCC/OSG conformity and COA concurrence were secured. Exceptions are strictly construed. Conditional OGCC letters, absent final contract approval and COA concurrence, do not satisfy the rules. The precedents therefore apply and support COA’s denial.
Quantum Meruit and Personal Liability
Quantum meruit entitles an attorney to reasonable compensation for services rendered in the absence of an express agreement. But where engagement was unauthorized, payment by the government entity is erroneous. The personal liability clause of Circular No. 86-255 (pre-1998 amendment), reinforce
...continue readingCase Syllabus (G.R. No. 185544)
Facts and Background
- In 2001, Clark Development Corporation (CDC), a government-owned and controlled corporation, engaged the law firm of Laguesma Magsalin Consulta and Gastardo to handle labor cases.
- CDC sought the Office of the Government Corporate Counsel’s (OGCC) written approval for retention; initial request denied on December 4, 2001.
- CDC’s reconsideration succeeded on May 20, 2002: OGCC (Counsel Valdez) approved engagement subject to execution and submission of a pro-forma retainership contract.
- Despite lacking OGCC’s final approval and COA’s concurrence, the law firm began work; CDC’s Board of Directors approved the engagement on June 28, 2002, and additional assignments in 2003.
- On July 13, 2005, CDC belatedly requested COA concurrence; COA (Auditor Punzalan) deferred pending OGCC’s final approval.
- CDC’s December 10, 2005 letter to OGCC for final approval was denied on December 22, 2005 by Counsel Devanadera for deviation from pro-forma contract; she allowed payment only on quantum meruit, subject to CDC Board approval and audit rules.
- COA’s Office of the General Counsel issued a “Third Indorsement” on November 9, 2006, disallowing clearance for lack of prior OGCC and COA approvals and three-year delay.
- COA denied appeals and motions for reconsideration in its September 27, 2007 Decision and November 5, 2008 Resolution, disallowing payment of retainer fees and quantum meruit claim; placed liability on CDC officials.
- The law firm filed this petition for certiorari on December 19, 2008.
Procedural History
- Petition for certiorari filed under Rule XI, Section 1 of COA Rules (30-day reglementary period).
- COA decisions assailed: September 27, 2007 Decision and November 5, 2008 Resolution disallowing payments.
- Respondents filed comment (May 7, 2009); petitioner replied (September 1, 2009).
- Supreme Court considered: timeliness of petition; real party in interest; substantive correctness of COA rulings.
Issues Presented
- Procedural:
• Was the certiorari petition filed within the 30-day period?
• Is petitioner the real