nazareth vs villar

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NAZARETH VS VILLAR

Republic of the PhilippinesSUPREME COURT

EN BANC

G.R. No. 188635 January 29, 2013

BRENDA L. NAZARETH, REGIONAL DIRECTOR, DEPARTMENT OF SCIENCE AND TECHNOLOGY, REGIONAL OFFICE NO. IX,ZAMBOANGA CITY,Petitioner,vs.THE HON. REYNALDO A. VILLAR, HON. JUANITO G. ESPINO, JR., (COMMISSIONERS OF THE COMMISSION ON AUDIT), and DIR.KHEM M. INOK,Respondents.

D E C I S I O N

BERSAMIN, J.:

No money shall be paid out of the Treasury except in pursuance of an appropriation made by law.1 A violation of this constitutional edict warrantsthe disallowance of the payment. However, the refund of the disallowed payment of a benefit granted by law to a covered person, agency or officethe Government may be barred by the good faith of the approving official and of the recipient.

Being assailed by petition for certiorari on the ground of its being issued with grave abuse of discretion amounting to lack or excess of jurisdictiothe decision rendered on June 4, 2009 by the Commission on Audit (COA) in COA Case No. 2009-045 entitled Petition of Ms. Brenda L. NazareRegional Director, Department of Science and Technology, Regional Office No. IX, Zamboanga City, for review of Legal and Adjudication Offic(LAO)-National Decision No. 2005-308 dated September 15, 2005 and LAO-National Resolution No. 2006-308A dated May 12, 2006 on disallowof subsistence, laundry, hazard and other benefits in the total amount of P3,591,130.36,2affirming the issuance of notices of disallowance (NDs) by theAudit Team Leader of COA Regional Office No. IX in Zamboanga City against the payment of benefits to covered officials and employees of theDepartment of Science and Technology (DOST) for calendar year (CY) 2001 out of the savings of the DOST.

The petitioner DOST Regional Director hereby seeks to declare the decision dated June 4, 2009 "null and void," and prays for the lifting of thedisallowance of the payment of the benefits for CY2001 for being within the ambit of Republic Act No. 8439 (R.A. No. 8439), otherwise known Magna Carta for Scientists, Engineers, Researchers, and other Science and Technology Personnel in the Government (Magna Carta, for short), anthe strength of the Memorandum of Executive Secretary Ronaldo B. Zamora dated April 12, 2000 authorizing the use of the savings for the purpo

Antecedents

On December 22, 1997, Congress enacted R.A. No. 8439 to address the policy of the State to provide a program for human resources developmenscience and technology in order to achieve and maintain the necessary reservoir of talent and manpower that would sustain the drive for total scieand technology mastery.3 Section 7 of R.A. No. 8439 grants the following additional allowances and benefits (Magna Carta benefits) to the covereofficials and employees of the DOST, to wit:

(a) Honorarium. - S & T personnel who rendered services beyond the established irregular workload of scientists, technologists, researcand technicians whose broad and superior knowledge, expertise or professional standing in a specific field contributes to productivity aninnovativeness shall be entitled to receive honorarium subject to rules to be set by the Department;

(b) Share in royalties. - S & T scientists, engineers, researchers and other S & T personnel shall be entitled to receive share in royalties sto guidelines of the Department. The share in royalties shall be on a sixty percent-forty percent (60%-40%) basis in favor of the Governand the personnel involved in the technology/ activity which has been produced or undertaken during the regular performance of theirfunctions. For the purpose of this Act, share in royalties shall be defined as a share in the proceeds of royalty payments arising frompatents, copyrights and other intellectual property rights;

If the researcher works with a private company and the program of activities to be undertaken has been mutually agreed upon by theparties concerned, any royalty arising therefrom shall be divided according to the equity share in the research project;

(c) Hazard allowance. - S & T personnel involved in hazardous undertakings or assigned in hazardous workplaces, shall be paid hazardallowances ranging from ten (10%) to thirty (30%) percent of their monthly basic salary depending on the nature and extent of the hazarinvolved. The following shall be considered hazardous workplaces:

(1) Radiation-exposed laboratories and service workshops;

(2) Remote/depressed areas;
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(3) Areas declared under a state of calamity or emergency;

(4) Strife-torn or embattled areas;

(5) Laboratories and other disease-infested areas.

(d) Subsistence allowance. - S & T personnel shall be entitled to full subsistence allowance equivalent to three (3) meals a day, which mcomputed and implemented in accordance with the criteria to be provided in the implementing rules and regulations. Those assigned ouof their regular work stations shall be entitled to per diem in place of the allowance;

(e) Laundry allowance. - S & T personnel who are required to wear a prescribed uniform during office hours shall be entitled to a laundrallowance of not less than One hundred fifty pesos (P150.00) a month;

(f) Housing and quarter allowance. - S & T personnel who are on duty in laboratories, research and development centers and othergovernment facilities shall be entitled to free living quarters within the government facility where they are stationed: Provided, That thepersonnel have their residence outside of the fifty (50)-kilometer radius from such government facility;

(g) Longevity pay. - A monthly longevity pay equivalent to five percent (5%) of the monthly basic salary shall be paid to S & T personnevery five (5) years of continuous and meritorious service as determined by the Secretary of the Department; and

(h) Medical examination. - During the tenure of their employment, S & T personnel shall be given a compulsory free medical examinationce a year and immunization as the case may warrant. The medical examination shall include:

(1) Complete physical examination;

(2) Routine laboratory, Chest X-ray and ECG;

(3) Psychometric examination;

(4) Dental examination;

(5) Other indicated examination.

Under R.A. No. 8439, the funds for the payment of the Magna Carta benefits are to be appropriated by the General Appropriations Act (GAA) of year following the enactment of R.A. No. 8439.4

The DOST Regional Office No. IX in Zamboanga City released the Magna Carta benefits to the covered officials and employees commencing in 1998 despite the absence of specific appropriation for the purpose in the GAA. Subsequently, following the post-audit conducted by COA StateAuditor Ramon E. Vargas on April 23, 1999, October 28, 1999, June 20, 2000, February 27, 2001, June 27, 2001, October 10, 2001 and October 1several NDs were issued disapproving the payment of the Magna Carta benefits. The justifications for the disallowance were stated in the post-aureport, as follows:

a) ND Nos. 99-001-101 (98) to 99-105-101 (98) Payment of Subsistence and Laundry Allowances and Hazard Pay for the months ofFebruary-November 1998 The State Auditor claims that no funds were appropriated in the 1998 General Appropriations Act for the saidpurpose notwithstanding the effectivity of the Magna Carta, providing for payment of allowances and benefits, among others, to Sciencand Technology Personnel in the Government;

b) ND Nos. 2000-101-101 (99) to 2000-010-101 (99) Payment of Subsistence and Laundry Allowances and Hazard Pay for the months January-June 1999 The State Auditor claims that no Department of Budget and Management (DBM) and Civil Service Commission (Cguidelines were issued by the said Departments on the payment thereof;

c) ND Nos. 2001-001-101 (00) to 2001-013-101 (00) Payment of Subsistence and Laundry Allowances, Hazard Pay and Health Care Prfor the month of October 1999 and January-September 2000 The State Auditor claims that there was no basis for the payment of the saidallowances because the President vetoed provisions of the General Appropriations Act (GAA) regarding the use of savings for the paymof benefits;

d) ND Nos. 2001-014-101(00) to 2001-025-101 (00) Payment of Subsistence and Laundry Allowances, Hazard Pay and Medical Benefithe months of January-October 2001 The provision for the use of savings in the General Appropriations Act (GAA) was vetoed by the

President; hence, there was no basis for the payment of the aforesaid allowances or benefits according to the State Auditor.5

The disallowance by the COA prompted then DOST Secretary Dr. Filemon Uriarte, Jr. to request the Office of the President (OP) through his
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Memorandum dated April 3, 2000 (Request for Authority to Use Savings for the Payment of Magna Carta Benefits as provided for in R.A. 8439) the authority to utilize the DOSTs savings to pay the Magna Car ta benefits.6 The salient portions of the Memorandum of Secretary Uriarte, Jr.explained the request in the following manner:

x x x. However, the amount necessary for its full implementation had not been provided in the General Appropriations Act (GAA). Since the Actseffectivity, the Department had paid the 1998 MC benefits out of its current years savings as provided for in the Budget Iss uances of the Departmentof Budget and Management while the 1999 MC benefits were likewise sourced from the years savings as authorized in the 1999 G AA.

The 2000 GAA has no provision for the use of savings. The Department, therefore, cannot continue the payment of the Magna Carta benefits from2000 savings. x x x. The DOST personnel are looking forward to His Excellencys favorable consideration for the payment of sa id MC benefits, beingpart of the administrations 10 -point action program to quote "I will order immediate implementation of RA 8439 (the Magna Carta for Science andTechnology Personnel in Government)" as published in the Manila Bulletin dated May 20, 1998.

Through the Memorandum dated April 12, 2000, then Executive Secretary Ronaldo Zamora, acting by authority of the President, approved therequest of Secretary Uriarte, Jr.,7 viz:

With reference to your Memorandum dated April 03, 2000 requesting authority to use savings from the appropriations of that Department and itsagencies for the payment of Magna Carta Benefits as provided for in R.A. 8439, please be informed that the said request is hereby approved.

On July 28, 2003, the petitioner, in her capacity as the DOST Regional Director in Region IX, lodged an appeal with COA Regional Cluster DireEllen Sescon, urging the lifting of the disallowance of the Magna Carta benefits for the period covering CY 1998 to CY 2001 amounting toP4,363,997.47. She anchored her appeal on the April 12, 2000 Memorandum of Executive Secretary Zamora, and cited the provision in the GAA 1998,8 to wit:

Section 56. Priority in the Use of Savings. In the use of savings, priority shall be given to the augmentation of the amounts set aside forcompensation, bonus, retirement gratuity, terminal leave, old age pension of veterans and other personnel benefits authorized by law and thoseexpenditure items authorized in agency Special Provisions and in Sec. 16 and in other sections of the General Provisions of this Act.9

In support of her appeal, the petitioner contended that the DOST Regional Office had "considered the subsistence and laundry allowance as fallininto the category other personnel benefits authorized by law, hence the payment of such allowances were charged to account 100 -900 for OtherBenefits (Honoraria), which was declared to be the savings of our Office."10 She argued that the April 12, 2000 Memorandum of Executive SecretaryZamora not only ratified the payment of the Magna Carta benefits out of the savings for CY 1998 and CY 1999 and allowed the use of the savingCY 2000, but also operated as a continuing endorsement of the use of savings to cover the Magna Carta benefits in succeeding calendar years.

The appeal was referred to the Regional Legal and Adjudication Director (RLAD), COA Regional Office IX in Zamboanga City, which denied thappeal and affirmed the grounds stated in the NDs.

Not satisfied with the result, the petitioner elevated the matter to the COA Legal and Adjudication Office in Quezon City

On September 15, 2005, respondent Director Khem N. Inok of the COA Legal and Adjudication Office rendered a decision in LAO-N-2005-308,11 denying the petitioners appeal with the modification that only the NDs covering the Magna Carta benefit s for CY 2000 were to be set aside inview of the authorization under the Memorandum of April 12, 2000 issued by Executive Secretary Zamora as the alter ego of the President. Thedecision explained itself as follows:

In resolving the case, the following issues should first be resolved:

1. Whether or not the "approval" made by the Executive Secretary on April 12, 2000 on the request for authority to use savings of the agto pay the benefits, was valid; and

2. Whether or not the payments of the benefits made by the agency using its savings for the years 1998 and 1999 based on Section 56 of8522 (General Appropriations Act of 1998 [GAA]) were legal and valid.

Anent the first issue, the law in point is Article VI, Section 25(5) of the 1987 Constitution, which aptly provides that:

"(5) No law shall be passed authorizing any transfer of appropriations, however, the PRESIDENT, x x x may by law, be authorized to augment anitem in the general appropriations law for their respective offices from savings in other items of their respective appropriations."

Simply put, it means that only the President has the power to augment savings from one item to another in the budget of administrative agenciesunder his control and supervision. This is the very reason why the President vetoed the Special Provisions in the 1998 GAA that would authorize department heads to use savings to augment other items of appropriations within the Executive Branch. Such power could well be extended to hisCabinet Secretaries as alter egos under the "doctrine of qualified political agency" enunciated by the Supreme Court in the case of Binamira v.Garrucho, 188 SCRA 154, where it was pronounced that the official acts of a Department Secretary are deemed acts of the President unlessdisapproved or reprobated by the latter. Thus, in the instant case, the authority granted to the DOST by the Executive Secretary, being one of the a
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egos of the President, was legal and valid but in so far as the use of agencys savings for the year 2000 onl y. Although 2000 budget was reenacted in2001, the authority granted on the use of savings did not necessarily extend to the succeeding year.

On the second issue, the payments of benefits made by the agency in 1998 and 1999 were admittedly premised on the provisions of the GeneralAppropriations Acts (GAA) for CY 1998 and 1999 regarding the use of savings which states that:

"In the use of savings, priority shall be given to the augmentation of the amount set aside for compensation, bonus, retirement gratuity, terminalleave, old age pensions of veterans and other personal benefits x x x." (Underscoring ours.)

It can be noted, however, that augmentation was likewise a requisite to make payments for such benefits which means that Presidential approval wnecessary in accordance with the above-cited provision of the 1987 Constitution. Therefore, the acts of the agency in using its savings to pay the sbenefits without the said presidential approval were illegal considering that during those years there was no appropriations provided in the GAA tpay such benefits.

Further, COA Decision Nos. 2003-060 dated March 18, 2003 and 2002-022 dated January 11, 2002, where this Commission lifted the DOSTdisallowance on the payments of similar benefits in 1992 to 1995, can not be applied in the instant case. The disallowances therein dealt more on classification of the agency as health related or not while the instant case deals mainly on the availability of appropriated funds for the benefits unRA 8439 and the guidelines for their payments.

Likewise, the certification of the DOST Secretary declaring work areas of S and T personnel as hazardous for purposes of enti tlement to hazardallowance is not valid and may be considered as self-serving. Under RA 7305 and its Implementing Rules and Regulation[s] (Magna Carta of PubHealth Workers), the determination which agencies are considered health-related establishments is within the competence of the Secretary of Heawhich was used by this Commission in COA Decision No. 2003-060, supra, to wit:

x x x x

"It bears emphasis to state herein that it is within the competence of the Secretary of Health as mandated by RA 7305 and its IRR to determine whagencies are health-related establishments. Corollary thereto, the certifications dated October 10, 1994 issued by then DOH Secretary Juan M. Flathat certain DOST personnel identified by DOST Secretary Padolina in his letter dated September 29, 1994 to be engaged in health and health-relwork and that of Secretary Hilarion J. Ramiro dated December 12, 1996 confirming the staff and personnel of the DOST and its attached agenciesengaged in health-related work and further certified to be a health-related establishment were sufficient basis for reconsideration of the disallowanon subsistence and laundry allowances paid for 1992, 1993 and 1995."

x x x x

Assuming that the situation in the DOST and its attached agencies did not change as to consider it health-related establishment for its entitlementmagna carta benefits, still the payments of the benefits cannot be sustained in audit not only for lack of said certification from the Secretary ofDepartment of Health for the years 1998 and 1999 but more importantly, for lack of funding.

WHEREFORE, premises considered, the herein Appeal is DENIED with modification. NDs Nos. 2001-001-101 (00) to 2001-013-101 (00) issuedpayments of benefits for CY 2000 are hereby SET ASIDE while NDs pertaining to benefits paid for CY 1998, 1999 and 2001 shall STAY.

On December 1, 2005, the petitioner filed her motion for reconsideration in the COA Legal and Adjudication Office-National in Quezon City.

By resolution dated May 12, 2006,12 the COA Legal and Adjudication Office-National denied the motion for reconsideration.

Thence, the petitioner filed a petition for review in the COA Head Office, insisting that the payment of Magna Carta benefits to qualified DOSTRegional Office No. IX officials and employees had been allowed under R.A. No. 8349.

On June 4, 2009, the COA rendered the assailed decision, further modifying the decision of respondent Director Inok by also lifting and setting athe NDs covering the Magna Carta benefits for CY 1998 and CY 1999 for the same reason applicable to the lifting of the NDs for CY 2000, but

maintaining the disallowance of the benefits for CY 2001 on the ground that they were not covered by the authorization granted by the Memorandof April 12, 2000 of Executive Secretary Zamora.

The pertinent portions of the decision are quoted below, to wit:

Hence, the appellant filed the instant petition for review with the main argument that the payment of Magna Carta benefits to qualified DOSTRegional Office No. IX employees is allowed pursuant to RA No. 8439.

ISSUE

The sole issue to be resolved is whether or not the payment of Magna Carta benefits for CYs 1998, 1999 and 2001 is valid and legal.
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DISCUSSION

It is clear that the funds utilized for the payment of the Magna Carta benefits came from the savings of the agency. The approval by the ExecutiveSecretary of the request for authority to use the said savings for payments of the benefits was an affirmation that the payments were authorized. TMemorandum dated April 3, 2000 of the DOST Secretary requested for the approval of the payment out of savings of the CY 2000 benefits. Likethe same Memorandum mentioned the 1998 Magna Carta benefits which were paid out of its current years savings as pr ovided for in the budgetissuances of the DBM and the 1999 Magna Carta benefits which were sourced from the years savings as authorized in the 1999 G AA. When suchmemorandum request was approved by the Executive Secretary in a Memorandum dated April 12, 2000, it was clear that the approval covered theperiods stated in the request, which were the 1998, 1999 and 2000 Magna Carta benefits.

Thus, this Commission hereby affirms LAO-National Decision No. 2005-308 dated September 15, 2005 which lifted ND Nos. 2001-001-101 (00013-101 (00) for the payments of Magna Carta benefits for CY 2000 and which sustained the NDs for payments in 2001. However, for thedisallowances covering payments in 1998 and 1999, this Commission is inclined to lift the same. This is in view of the approval made by the ExeSecretary for the agency to use its savings to pay the benefits for the years covered. Thus, when the Executive Secretary granted the request of theDOST Secretary for the payment of the Magna Carta benefits to its qualified personnel, the said payments became lawful for the periods covered the request, that is, CYs 1998, 1999 and 2000. Since the Magna Carta benefits paid in 2001 were not covered by the approval, the same were corrdisallowed in audit.

In a previous COA Decision-No. 2006-015 dated January 31, 2006, the payment of hazard, subsistence and laundry allowances given to personnethe DOST, Regional Office No. VI, Iloilo City, was granted. The same decision also stated that in (sic) no doubt the DOST personnel, who arequalified, are entitled to receive the Magna Carta benefits. The 1999 GAA did not prohibit the grant of these benefits but merely emphasized thediscretion of the agency head, upon authority of the President, to use savingsfrom the Departments appropriation, to implement the payment ofbenefits pursuant to the DOST Charter.

RULING

WHEREFORE, premises considered, the instant appeal on the payment of Magna Carta benefits for CYs 1998 and 1999 which were disallowed iNos. 99-001-101 (98) to 99-015-101 (98) and 2000-001-101 (99) to 2000-010-101 (99), is hereby GRANTED. Likewise, the lifting of ND Nos. 2(00) to 2001-013-101 (00) as embodied in LAO-National Decision No. 2005-308 dated September 15, 2005 is hereby CONFIRMED. While thedisallowances on the payment of said benefits for 2001 as covered by ND Nos. 2001-014-101 (01) to 2001-032-101 (01) are hereby AFFIRMED

Issues

Hence, this special civil action for certiorari, with the petitioner insisting that the COA gravely abused its discretion amounting to lack or excess o jurisdiction in affirming the disallowance of the Magna Carta benefits for CY 2001 despite the provisions of R.A. No. 8439, and in ruling that theMemorandum of April 12, 2000 did not cover the payment of the Magna Carta benefits for CY 2001.

Did the COA commit grave abuse of discretion in issuing ND No. 2001-014-101(01) to ND No. 2001-032-101(01)?

Ruling

The petition for certiorari lacks merit.

R. A. No. 8439 was enacted as a manifestation of the States recognition of science and technology as an essential component for the attainment ofnational development and progress. The law offers a program of human resources development in science and technology to help realize andmaintain a sufficient pool of talent and manpower that will sustain the initiative for total science and technology mastery. In furtherance of thisobjective, the law not only ensures scholarship programs and improved science and engineering education, but also affords incentives for thosepursuing careers in science and technology. Moreover, the salary scale of science and technology personnel is differentiated by R. A. No. 8439 frothe salary scales of government employees under the existing law.

As earlier mentioned, Section 7 of R. A. No. 8439 confers the Magna Carta benefits consisting of additional allowances and benefits to DOST offand employees, such as honorarium, share in royalties, hazard, subsistence, laundry, and housing and quarter allowances, longevity pay, and mediexamination. But the Magna Carta benefits will remain merely paper benefits without the corresponding allocation of funds in the GAA.

The petitioner urges the Court to treat the authority granted in the April 12, 2000 Memorandum of Executive Secretary Zamora as a continuingauthorization to use the DOSTs savings to pay the Magna Carta benefits.

We cannot agree with the petitioner.

The April 12, 2000 Memorandum was not a blanket authority from the OP to pay the benefits out of the DOSTs savings. Although the Memorandumwas silent as to the period covered by the request for authority to use the DOSTs savings, it was clear just the same that t he Memorandumencompassed only CY 1998, CY 1999 and CY 2000. The limitation of its applicability to those calendar years was based on the tenor of the requeSecretary Uriarte, Jr. to the effect that the DOST had previously used its savings to pay the Magna Carta benefits in CY 1998 and CY 1999; that t2000 GAA did not provide for the use of savings; andthat the DOST personnel were looking forward to the Presidents favorable consideration. The


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Memorandum could only be read as an authority covering the limited period until and inclusive of CY 2000. The text of the Memorandum was albereft of any indication that the authorization was to be indefinitely extended to any calendar year beyond CY 2000.

As we see it, the COA correctly ruled on the matter at hand. Article VI Section 29 (1) of the 1987 Constitution firmly declares that: "No money spaid out of the Treasury except in pursuance of an appropriation made by law." This constitutional edict requires that the GAA be purposeful,deliberate, and precise in its provisions and stipulations. As such, the requirement under Section 2013 of R.A. No. 8439 that the amounts needed tofund the Magna Carta benefits were to be appropriated by the GAA only meant that such funding must be purposefully, deliberately, and preciselincluded in the GAA. The funding for the Magna Carta benefits would not materialize as a matter of course simply by fiat of R.A. No. 8439, but minitially be proposed by the officials of the DOST as the concerned agency for submission to and consideration by Congress. That process is whatcomplies with the constitutional edict. R.A. No. 8439 alone could not fund the payment of the benefits because the GAA did not mirror every

provision of law that referred to it as the source of funding. It is worthy to note that the DOST itself acknowledged the absolute need for theappropriation in the GAA. Otherwise, Secretary Uriarte, Jr. would not have needed to request the OP for the express authority to use the savings tpay the Magna Carta benefits.

In the funding of current activities, projects, and programs, the general rule should still be that the budgetary amount contained in the appropriatiobill is the extent Congress will determine as sufficient for the budgetary allocation for the proponent agency. The only exception is found in Secti(5),14 Article VI of the Constitution, by which the President, the President of the Senate, the Speaker of the House of Representatives, the Chief Juof the Supreme Court, and the heads of Constitutional Commissions are authorized to transfer appropriations to augment any it em in the GAA fortheir respective offices from the savings in other items of their respective appropriations. The plain language of the constitutional restriction leaveroom for the petitioners posture, which we should now dispose of as untenable.

It bears emphasizing that the exception in favor of the high officials named in Section 25(5), Article VI of the Constitution limiting the authority transfer savings only to augment another item in the GAA is strictly but reasonably construed as exclusive. As the Court has expounded in Lokinv. Commission on Elections:15

When the statute itself enumerates the exceptions to the application of the general rule, the exceptions are strictly but reasonably construed. Theexceptions extend only as far as their language fairly warrants, and all doubts should be resolved in favor of the general provision rather than theexceptions. Where the general rule is established by a statute with exceptions, none but the enacting authority can curtail the former. Not even thecourts may add to the latter by implication, and it is a rule that an express exception excludes all others, although it is always proper in determininthe applicability of the rule to inquire whether, in a particular case, it accords with reason and justice.

The appropriate and natural office of the exception is to exempt something from the scope of the general words of a statute, which is otherwise wthe scope and meaning of such general words. Consequently, the existence of an exception in a statute clarifies the intent that the statute shall appto all cases not excepted. Exceptions are subject to the rule of strict construction; hence, any doubt will be resolved in favor of the general provisiand against the exception. Indeed, the liberal construction of a statute will seem to require in many circumstances that the exception, by which theoperation of the statute is limited or abridged, should receive a restricted construction.

The claim of the petitioner that the payment of the 2001 Magna Carta benefits was upon the authorization extended by the OP through the 12 Apr2000 Memorandum of Executive Secretary Zamora was outrightly bereft of legal basis. In so saying, she inexplicably, but self-servingly, ignored

important provisions in the 2000 GAA on the use of savings, to wit:

Sec. 54. Use of Savings. The President of the Philippines, the President of the Senate, the Speaker of the House of Representatives, the Chief Justthe Supreme Court, the Heads of Constitutional Commissions under Article IX of the Constitution, the Ombudsman and the Chairman of theCommission on Human Rights are hereby authorized to augment any item in this Act for their respective offices from savings in other items of threspective appropriations.

Sec. 55. Meaning of Savings and Augmentation. Savings refer to portions or balances of any programmed appropriation in this Act free of anyobligation or encumbrance still available after the completion or final discontinuance or abandonment of the work, activity or purpose for which tappropriation is authorized, or arising from unpaid compensation and related costs pertaining to vacant positions and leaves of absence without pa

Augmentation implies the existence in this Act of an item, project, activity or purpose with an appropriation which upon implementation orsubsequent evaluation of needed resources is determined to be deficient. In no case, therefore, shall a non-existent item, project, activity, purpose object of expenditure be funded by augmentation from savings or by the use of appropriations authorized otherwise in this Act. (Bold emphases

added)

Under these provisions, the authority granted to the President was subject to two essential requisites in order that a transfer of appropriation from agencys savings would be validly effected. The first required that there must be savings from the authorized appropriation o f the agency. The seconddemanded that there must be an existing item, project, activity, purpose or object of expenditure with an appropriation to which the savings wouldtransferred for augmentation purposes only.

At any rate, the proposition of the petitioner that savings could and should be presumed from the mere transfer of funds is plainly incompatible wthe doctrine laid down in Demetria v. Alba,16 in which the petition challenged the constitutionality of paragraph 1 of Section 4417 of PresidentialDecree No. 1177 (Budget Reform Decree of 1977) in view of the express prohibition contained in Section 16(5)18 of Article VIII of the 1973 Constitutionagainst the transfer of appropriations except to augment out of savings,19 with the Court declaring the questioned provision of Presidential DecreeNo. 1177 "null and void for being unconstitutional" upon the following reasoning, to wit:
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The prohibition to transfer an appropriation for one item to another was explicit and categorical under the 1973 Constitution. However, to afford theads of the different branches of the government and those of the constitutional commissions considerable flexibility in the use of public funds aresources, the constitution allowed the enactment of a law authorizing the transfer of funds for the purpose of augmenting an item from savings inanother item in the appropriation of the government branch or constitutional body concerned. The leeway granted was thus limited. The purpose aconditions for which funds may be transferred were specified, i.e., transfer may be allowed for the purpose of augmenting an item and such transfmay be made only if there are savings from another item in the appropriation of the government branch or constitutional body.

Paragraph 1 of Section 44 of P.D. No. 1177 unduly overextends the privilege granted under said Section 16(5). It empowers the President toindiscriminately transfer funds from one department, bureau, office or agency of the Executive Department to any program, project, or activity of department, bureau or office included in the General Appropriations Act or approved after its enactment, without regard as to whether or not the

funds to be transferred are actually savings in the item from which the same are to be taken, or whether or not the transfer is for the purpose ofaugmenting the item to which said transfer is to be made. It does not only completely disregard the standards set in the fundamental law, therebyamounting to an undue delegation of legislative powers, but likewise goes beyond the tenor thereof. Indeed, such constitutional infirmities renderprovision in question null and void.

Clearly and indubitably, the prohibition against the transfer of appropriations is the general rule. Consequently, the payment of the Magna Cartabenefits for CY 2001 without a specific item or provision in the GAA and without due authority from the President to utilize the DOSTs savings inother items for the purpose was repugnant to R.A. No. 8439, the Constitution, and the re-enacted GAA for 2001.

The COA is endowed with sufficient latitude to determine, prevent, and disallow the irregular, unnecessary, excessive, extravagant, orunconscionable expenditures of government funds. It has the power to ascertain whether public funds were utilized for the purposes for which thehad been intended by law. The "Constitution has made the COA the guardian of public funds, vesting it with broad powers over all accountspertaining to government revenue and expenditures and the uses of public funds and property, including the exclusive authority to define the scopof its audit and examination, to establish the techniques and methods for such review, and to promulgate accounting and auditing rules andregulations".20

Thus, the COA is generally accorded complete discretion in the exercise of its constitutional duty and responsibility to examine and auditexpenditures of public funds, particularly those which are perceptibly beyond what is sanctioned by law. Verily, the Court has sustained thedecisions of administrative authorities like the COA as a matter of general policy, not only on the basis of the doctrine of separation of powers bualso upon the recognition that such administrative authorities held the expertise as to the laws they are entrusted to enforce.21 The Court has accordednot only respect but also finality to their findings especially when their decisions are not tainted with unfairness or arbitrariness that would amoungrave abuse of discretion.22

Only when the COA has acted without or in excess of jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction, mthe Court entertain and grant a petition for certiorari brought to assail its actions.23 Section 1 of Rule 65,24 Rules of Court, demands that the petitionermust show that, one, the tribunal, board or officer exercising judicial or quasi-judicial functions acted without or in excess of jurisdiction or with abuse of discretion amounting to lack or excess of jurisdiction, and, two, there is neither an appeal nor any plain, speedy and adequate remedy in ordinary course of law for the purpose of amending or nullifying the proceeding. Inasmuch as the sole office of the writ of certiorari is the correctof errors of jurisdiction, which includes the commission of grave abuse of discretion amounting to lack of jurisdiction, the petitioner should estab

that the COA gravely abused its discretion. The abuse of discretion must be grave, which means either that the judicial or quasi-judicial power waexercised in an arbitrary or despotic manner by reason of passion or personal hostility, or that the respondent judge, tribunal or board evaded apositive duty, or virtually refused to perform the duty enjoined or to act in contemplation of law, such as when such judge, tribunal or boardexercising judicial or quasi-judicial powers acted in a capricious or whimsical manner as to be equivalent to lack of jurisdiction.25 Mere abuse ofdiscretion is not enough to warrant the issuance of the writ.26

The petitioner dismally failed to discharge her burden.1wphi1 We conclude and declare, therefore, that the COAs assailed decision was issued insteadfast compliance of its duty under the Constitution and in the judicious exercise of its general audit power conferred to it by the Constitution.

Nonetheless, the Court opines that the DOST officials who caused the payment of the Magna Carta benefits to the covered officials and employeeacted in good faith in the honest belief that there was a firm legal basis for the payment of the benefits. Evincing their good faith even after receivthe NDs from the COA was their taking the initiative of earnestly requesting the OP for the authorization to use the DOSTs s avings to pay the MagnaCarta benefits. On their part, the DOST covered officials and employees received the benefits because they considered themselves rightfully deseof the benefits under the long-awaited law.

The Court declares and holds that the disallowed benefits received in good faith need not be reimbursed to the Government. This accords withconsistent pronouncements of the Court, like that issued in De Jesus v. Commission on Audit,27 to wit:

Nevertheless, our pronouncement in Blaquera v. Alcala28 supports petitioners position on the refund of the benefits they received. In Blaquera, theofficials and employees of several government departments and agencies were paid incentive benefits which the COA disallowed on the ground tAdministrative Order No. 29 dated 19 January 1993 prohibited payment of these benefits. While the Court sustained the COA on the disallowancnevertheless declared that:

Considering, however, that all the parties here acted in good faith, we cannot countenance the refund of subject incentive benefits for the year 199which amounts the petitioners have already received. Indeed, no indicia of bad faith can be detected under the attendant facts and circumstances. officials and chiefs of offices concerned disbursed such incentive benefits in the honest belief that the amounts given were due to the recipients anthe latter accepted the same with gratitude, confident that they richly deserve such benefits.
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E. THE THREATENED AND CONTINUING TRANSFER OF FUNDS BY THE PRESIDENT AND THE IMPLEMENTATTHEREOF BY THE BUDGET MINISTER AND THE TREASURER OF THE PHILIPPINES ARE WITHOUT OR IN EXCTHEIR AUTHORITY AND JURISDICTION.2

Commenting on the petition in compliance with the Court resolution dated September 19, 1985, the Solicitor General, for the public respondents,questioned the legal standing of petitioners, who were allegedly merely begging an advisory opinion from the Court, there being no justiciablecontroversy fit for resolution or determination. He further contended that the provision under consideration was enacted pursuant to Section 16[5]Article VIII of the 1973 Constitution; and that at any rate, prohibition will not lie from one branch of the government to a coordinate branch to enthe performance of duties within the latter's sphere of responsibility.

On February 27, 1986, the Court required the petitioners to file a Reply to the Comment. This, they did, stating, among others, that as a result of tchange in the administration, there is a need to hold the resolution of the present case in abeyance "until developments arise to enable the parties tconcretize their respective stands."3

Thereafter, We required public respondents to file a rejoinder. The Solicitor General filed a rejoinder with a motion to dismiss, setting forth asgrounds therefor the abrogation of Section 16[5], Article VIII of the 1973 Constitution by the Freedom Constitution of March 25, 1986, which haallegedly rendered the instant petition moot and academic. He likewise cited the "seven pillars" enunciated by Justice Brandeis in Ashwander v.TVA, 297 U.S. 288 (1936)4 as basis for the petition's dismissal.

In the case ofEvelio B. Javier v. The Commission on Elections and Arturo F. Pacificador , G.R. Nos. 68379-81, September 22, 1986, We stated that:

The abolition of the Batasang Pambansa and the disappearance of the office in dispute between the petitioner and the privaterespondents both of whom have gone their separate ways could be a convenient justification for dismissing the case. Butthere are larger issues involved that must be resolved now, once and for all, not only to dispel the legal ambiguities here raised

The more important purpose is to manifest in the clearest possible terms that this Court will not disregard and in effect condonwrong on the simplistic and tolerant pretext that the case has become moot and academic.

The Supreme Court is not only the highest arbiter of legal questions but also the conscience of the government. The citizen coto us in quest of law but we must also give him justice. The two are not always the same. There are times when we cannot grathe latter because the issue has been settled and decision is no longer possible according to the law. But there are also times whalthough the dispute has disappeared, as in this case, it nevertheless cries out to be resolved. Justice demands that we act then,not only for the vindication of the outraged right, though gone, but also for the guidance of and as a restraint upon the future.

It is in the discharge of our role in society, as above-quoted, as well as to avoid great disservice to national interest that We take cognizance of thipetition and thus deny public respondents' motion to dismiss. Likewise noteworthy is the fact that the new Constitution, ratified by the Filipinopeople in the plebiscite held on February 2, 1987, carries verbatim section 16[5], Article VIII of the 1973 Constitution under Section 24[5], ArticlAnd while Congress has not officially reconvened, We see no cogent reason for further delaying the resolution of the case at bar.

The exception taken to petitioners' legal standing deserves scant consideration. The case ofPascual v. Secretary of Public Works, et al., 110 Phil. 331, isauthority in support of petitioners'locus standi. Thus:

Again, it is well-settled that the validity of a statute may be contested only by one who will sustain a direct injury in consequeof its enforcement. Yet, there are many decisions nullifying at the instance of taxpayers, laws providing for the disbursement opublic funds, upon the theory that the expenditure of public funds by an officer of the state for the purpose of administeringan unconstitutional act constitutes amisapplication of such funds which may be enjoined at the request of a taxpayer. Althoughthere are some decisions to the contrary, the prevailing view in the United States is stated in the American Jurisprudence asfollows:

In the determination of the degree of interest essential to give the requisite standing to attack theconstitutionality of a statute, the general rule is that not only persons individually affected, but alsotaxpayershave sufficient interest in preventing the illegal expenditures of moneys raised by taxation and may therefore questionthe constitutionality of statutes requiring expenditure of public moneys. [ 11 Am. Jur. 761, Emphasis supplied.

Moreover, inTan v. Macapagal, 43 SCRA 677 andSanidad v. Comelec, 73 SCRA 333, We said that as regards taxpayers' suits, this Court enjoys that opediscretion to entertain the same or not.

The conflict between paragraph 1 of Section 44 of Presidential Decree No. 1177 and Section 16[5], Article VIII of the 1973 Constitution is readilperceivable from a mere cursory reading thereof. Said paragraph 1 of Section 44 provides:

The President shall have the authority to transfer any fund, appropriated for the different departments, bureaus, offices andagencies of the Executive Department, which are included in the General Appropriations Act, to any program, project or activof any department, bureau, or office included in the General Appropriations Act or approved after its enactment.

On the other hand, the constitutional provision under consideration reads as follows:


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Sec. 16[5]. No law shall be passed authorizing any transfer of appropriations, however, the President, the Prime Minister, theSpeaker, the Chief Justice of the Supreme Court, and the heads of constitutional commis ions may by law be authorized toaugment any item in the general appropriations law for their respective offices from savings in other items of their respectiveappropriations.

The prohibition to transfer an appropriation for one item to another was explicit and categorical under the 1973 Constitution. However, to afford theads of the different branches of the government and those of the constitutional commissions considerable flexibility in the use of public funds aresources, the constitution allowed the enactment of a law authorizing the transfer of funds for the purpose of augmenting an item from savings inanother item in the appropriation of the government branch or constitutional body concerned. The leeway granted was thus limited. The purpose aconditions for which funds may be transferred were specified, i.e. transfer may be allowed for the purpose of augmenting an item and such transfe

may be made only if there are savings from another item in the appropriation of the government branch or constitutional body.

Paragraph 1 of Section 44 of P.D. No. 1177 unduly over extends the privilege granted under said Section 16[5]. It empowers the President toindiscriminately transfer funds from one department, bureau, office or agency of the Executive Department to any program, project or activity of department, bureau or office included in the General Appropriations Act or approved after its enactment, without regard as to whether or not thefunds to be transferred are actually savings in the item from which the same are to be taken, or whether or not the transfer is for the purpose ofaugmenting the item to which said transfer is to be made. It does not only completely disregard the standards set in the fundamental law, therebyamounting to an undue delegation of legislative powers, but likewise goes beyond the tenor thereof. Indeed, such constitutional infirmities renderprovision in question null and void.

"For the love of money is the root of all evil: ..." and money belonging to no one in particular, i.e. public funds, provide an even greater temptatiomisappropriation and embezzlement. This, evidently, was foremost in the minds of the framers of the constitution in meticulously prescribing therules regarding the appropriation and disposition of public funds as embodied in Sections 16 and 18 of Article VIII of the 1973 Constitution. Henthe conditions on the release of money from the treasury [Sec. 18(1)]; the restrictions on the use of public funds for public purpose [Sec. 18(2)]; thprohibition to transfer an appropriation for an item to another [See. 16(5) and the requirement of specifications [Sec. 16(2)], among others, were asafeguards designed to forestall abuses in the expenditure of public funds. Paragraph 1 of Section 44 puts all these safeguards to naught. For, ascorrectly observed by petitioners, in view of the unlimited authority bestowed upon the President, "... Pres. Decree No. 1177 opens the floodgatesthe enactment of unfunded appropriations, results in uncontrolled executive expenditures, diffuses accountability for budgetary performance andentrenches the pork barrel system as the ruling party may well expand [sic] public money not on the basis of development priorities but on politicand personal expediency."5 The contention of public respondents that paragraph 1 of Section 44 of P.D. 1177 was enacted pursuant to Section 16(5Article VIII of the 1973 Constitution must perforce fall flat on its face.

Another theory advanced by public respondents is that prohibition will not lie from one branch of the government against a coordinate branch toenjoin the performance of duties within the latter's sphere of responsibility.

Thomas M. Cooley in his " A Treatise on the Constitutional Limitations ," Vol. 1, Eight Edition, Little, Brown and Company, Boston, explained:

... The legislative and judicial are coordinate departments of the government, of equal dignity; each is alike supreme in theexercise of its proper functions, and cannot directly or indirectly, while acting within the limits of its authority, be subjected to

control or supervision of the other, without an unwarrantable assumption by that other of power which, by the Constitution, isnot conferred upon it. The Constitution apportions the powers of government, but it does not make any one of the threedepartments subordinate to another, when exercising the trust committed to it. The courts may declare legislative enactmentsunconstitutional and void in some cases, but not because the judicial power is superior in degree or dignity to the legislative.Being required to declare what the law is in the cases which come before them, they must enforce the Constitution, as theparamount law, whenever a legislative enactment comes in conflict with it. But the courts sit, not to review or revise thelegislative action, but to enforce the legislative will, and it is only where they find that the legislature has failed to keep withinconstitutional limits, that they are at liberty to disregard its action; and in doing so, they only do what every private citizen mado in respect to the mandates of the courts when the judges assumed to act and to render judgments or decrees without jurisdiction. "In exercising this high authority, the judges claim no judicial supremacy; they are only the administrators of thepublic will. If an act of the legislature is held void, it is not because the judges have any control over the legislative power, bubecause the act is forbidden by the Constitution, and because the will of the people, which is therein declared, is paramount tothat of their representatives expressed in any law." [Lindsay v. Commissioners, & c., 2 Bay, 38, 61; People v. Rucker, 5 Col. 5v. Com., 210 Pa. St. 544; 60 Atl. 169, 1 L.R.A. [N.S.] 409, 105 Am. St. Rep. 825] (pp. 332-334).

Indeed, where the legislature or the executive branch is acting within the limits of its authority, the judiciary cannot and ought not to interfere witthe former. But where the legislature or the executive acts beyond the scope of its constitutional powers, it becomes the duty of the judiciary to dewhat the other branches of the government had assumed to do as void. This is the essence of judicial power conferred by the Constitution "in oneSupreme Court and in such lower courts as may be established by law" [Art. VIII, Section 1 of the 1935 Constitution; Art. X, Section 1 of the 197Constitution and which was adopted as part of the Freedom Constitution, and Art. VIII, Section 1 of the 1987 Constitution] and which power thisCourt has exercised in many instances.*

Public respondents are being enjoined from acting under a provision of law which We have earlier mentioned to be constitutionally infirm. Thegeneral principle relied upon cannot therefore accord them the protection sought as they are not acting within their "sphere of responsibility" butwithout it.


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The nation has not recovered from the shock, and worst, the economic destitution brought about by the plundering of the Treasury by the deposeddictator and his cohorts. A provision which allows even the slightest possibility of a repetition of this sad experience cannot remain written in ourstatute books.

WHEREFORE, the instant petition is granted. Paragraph 1 of Section 44 of Presidential Decree No. 1177 is hereby declared null and void for beiunconstitutional.

SO ORDER RED.

IN RE LAURETA AND MARAVILLA

Republic of the PhilippinesSUPREME COURT

Manila

EN BANC

G.R. No. L-68635 May 14, 1987

IN THE MATTER OF PROCEEDINGS FOR DISCIPLINARY ACTION AGAINST ATTY. WENCESLAO LAURETA, AND OF CONTEMPTPROCEEDINGS AGAINST EVA MARAVILLA-ILUSTRE in G.R. No. 68635, entitled "EVA MARAVILLA-ILUSTRE, vs. HON. INTERMEDIATAPPELLATE COURT, ET AL."

R E S O L U T I O N

PER CURIAM:

Before us are 1) Atty. Wenceslao Laureta's Motion for Reconsideration of the Per Curiam Resolution of this Court promulgated on March 12, 198finding him guilty of grave professional misconduct and suspending him indefinitely from the practice of law; and 2) Eva Maravilla-Ilustre's Motfor Reconsideration of the same Resolution holding her in contempt and ordering her to pay a fine of P1,000.00.

Essentially, Atty. Laureta maintains that the Order of suspension without hearing violated his right to life and due process of law and by reasonthereof the Order is null and void; that the acts of misconduct imputed to him are without basis; that the charge against him that it was he who hadcirculated to the press copies of the Complaint filed before the Tanodbayan is unfounded such that, even in this Court's Resolution, his havingdistributed copies to the press is not stated positively; that the banner headline which appeared In the Daily Express is regrettable but that he was responsible for such "misleading headline;" that he "did nothing of the sort" being fully conscious of his responsibilities as a law practitioner andofficer of the Court; that as a former newspaperman, he would not have been satisfied with merely circulating copies of the Complaint to the presenvelopes where his name appears; "he himself would have written stories about the case in a manner that sells newspapers; even a series of juicyarticles perhaps, something that would have further subjected the respondent justices to far worse publicity;" that, on the contrary, the pressconference scheduled by Ilustre was cancelled through his efforts in order to prevent any further adverse publicity resulting from the filing of thecomplaint before the Tanodbayan; that, as a matter of fact, it was this Court's Resolution that was serialized in the Bulletin Today, which newspapalso made him the subject of a scathing editorial but that he "understands the cooperation because after all, the Court rendered a favorable judgmein the Bulletin union case last year;" that he considered it "below his dignity to plead for the chance to present his side" with the Editor, Mr. BenRodriguez, "a long-time personal friend" since he "can afford to be the sacrificial lamb if only to help the Honorable Court uphold its integrity;" the was called by a reporter of DZRH and was asked to comment on the case filed before the Tanodbayan but that his remarks were confined to thfiling of the case by Ilustre herself, and that the judgment of the trial Court had attained its finality long ago; that he is not Ilustre's counsel beforeTanodbayan and did not prepare the complaint filed before it, his professional services having been terminated upon the final dismissal of Ilustre'case before this Court; that similarities in the language and phraseology used in the Ilustre letters, in pleadings before this Court and before theTanodbayan do not prove his authorship since other lawyers "even of a mediocre caliber" could very easily have reproduced them; that thediscussions on the merits in the Per Curiam Resolution are "more properly addressed to the Tanodbayan, Justice Raul M. Gonzales being competeto deal with the case before him;" that he takes exception to the accusation that he has manifested lack of respect for and exposed to public ridicultwo highest Courts of the land, all he did having been to call attention to errors or injustice committed in the promulgation of judgments or ordersthat he has "not authorized or assisted and/or abetted and could not have prevented the contemptuous statements, conduct, acts and maliciouscharges of Eva Maravilla Ilustre who was no longer his client when these alleged acts were done; that "he is grateful to this Court for the remindethe first duty of a lawyer which is to the Court and not to his client, a duty that he has always impressed upon his law students;" and finally, that "the record, he is sorry for the adverse publicity generated by the filing of the complaint against the Justices before the Tanodbayan."

In her own Motion for Reconsideration, Eva Maravilla-Ilustre also raises as her main ground the alleged deprivation of her constitutional right to process. She maintains that as contempt proceedings are commonly treated as criminal in nature, the mode of procedure and rules of evidence incriminal prosecution should be assimilated, as far as practicable, in this proceeding, and that she should be given every opportunity to present herside. Additionally, she states that, with some sympathetic lawyers, they made an "investigation" and learned that the Resolution of the First Diviswas arrived at without any deliberation by its members; that Court personnel were "tight-lipped about the matter, which is shrouded mystery"thereby prompting her to pursue a course which she thought was legal and peaceful; that there is nothing wrong in making public the manner of


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voting by the Justices, and it was for that reason that she addressed Identical letters to Associate Justices Andres Narvasa, Ameurfina M. Herrera,Isagani Cruz and Florentino Feliciano; that "if the lawyers of my opponents were not a Solicitor General, and member of the Supreme Court and aDivision Chairman, respectively, the resolution of May 14, 1986 would not have aroused my suspicion;" that instead of taking the law into her owhands or joining any violent movement, she took the legitimate step of making a peaceful investigation into how her case was decided, and brougher grievance to the Tanodbayan "in exasperation" against those whom she felt had committed injustice against her "in an underhanded manner."

We deny reconsideration in both instances.

The argument premised on lack of hearing and due process, is not impressed with merit. What due process abhors is absolute lack of opportunity be heard (Tajonera vs. Lamaroza, et al., 110 SCRA 438 [1981]). The word "hearing" does not necessarily connote a "trial-type" proceeding. In thecause Resolution of this Court, dated January 29, 1987, Atty. Laureta was given sufficient opportunity to inform this Court of the reasons why heshould not be subjected to dispose action. His Answer, wherein he prayed that the action against him be dismissed, contained twenty-two (22) padouble spaced. Eva Maravilla-Ilustre was also given a like opportunity to explain her statements, conduct, acts and charges against the Court and/the official actions of the Justices concerned. Her Compliance Answer, wherein she prayed that the contempt proceeding against her be dismissedcontained nineteen (19) pages, double spaced. Both were afforded ample latitude to explain matters fully. Atty. Laureta denied having authored thletters written by Ilustre, his being her counsel before the Tanodbayan, his having circularized to the press copies of the complaint filed before saibody, and his having committed acts unworthy of his profession. But the Court believed otherwise and found that those letters and the chargeslevelled against the Justices concerned, of themselves and by themselves, betray not only their malicious and contemptuous character, but also thlack of respect for the two highest Courts of the land, a complete obliviousness to the fundamental principle of separation of powers, and a wantodisregard of the cardinal doctrine of independence of the Judiciary.Res ipsa loquitur. Nothing more needed to have been said or proven. The necessityto conduct any further evidentially hearing was obviated (See People vs. Hon. Valenzuela, G.R. Nos. 63950-60, April 19, 1985, 135 SCRA 712). Laureta and Ilustre were given ample opportunity to be heard, and were, in fact, heard.

(1)

In his Motion for Reconsideration, Atty. Laureta reiterates his allegations in his Answer to the show-cause Resolution that his professional servicwere terminated by Ilustre after the dismissal of the main petition by this Court; that he had nothing to do with the contemptuous letters to theindividual Justices; and that he is not Ilustre's counsel before the Tanodbayan.

Significantly enough, however, copy of the Tanodbayan Resolution dismissing Ilustre's Complaint was furnished Atty. Laureta as "counsel for thecomplainant" at his address of record. Of note, too, is the fact that it was he who was following up the Complaint before the Tanodbayan and, aftedismissal, the Motion for Reconsideration of the Order of dismissal.

Of import, as well, is the report of Lorenzo C. Bardel, a process server of this Court, that after having failed to serve copy of the Per CuriamResolution of March 12, 1987 of this Court on Ilustre personally at her address of record, "101 F. Manalo St., Cubao, Quezon City," having beeninformed that she is 6 not a resident of the place," he proceeded to the residence of Atty. Laureta where the latter's wife "voluntarily received the tcopies of decision for her husband and for Ms. Maravina-Ilustre" (p. 670, Rollo, Vol. 11).

That Ilustre subsequently received copy of this Court's Resolution delivered to Mrs. Laureta is shown by the fact that she fi led, as of March 27, 19"Petition for Extension of Time to file Motion for Reconsideration" and subsequently the Motion for Reconsideration. In that Petition Ilustreacknowledged receipt of the Resolution on March 12, 1987, the very same date Mrs. Laureta received copy thereof. If, indeed, the lawyer-clientrelationship between her husband and Ilustre had been allegedly completely severed, all Mrs. Laureta had to do was to return to the Sheriff the cointended for Ilustre. As it was, however, service on Atty. Laureta proved to be service on Ilustre as well. The close tie- up between the corespondeis heightened by the fact that three process servers of this Court failed to serve copy of this Court's Per Curiam Resolution on Ilustre personally.

Noteworthy, as well, is that by Atty. Laureta's own admission, he was the one called by a "reporter" of DZRH to comment on the Ilustre chargesbefore the Tanodbayan. If, in fact, he had nothing to do with the complaint, he would not have been pinpointed at all. And if his disclaimer were ttruth, the logical step for him to have taken was to refer the caller to the lawyer/s allegedly assisting Ilustre, at the very least, out of elementarycourtesy and propriety. But he did nothing of the sort. " He gave his comment with alacrity.

The impudence and lack of respect of Atty. Laureta for this Court again surfaces when he asserts in his Motion for Reconsideration that he"understands the cooperation" of the Bulletin Today as manifested in the serialized publication of the Per Curiam Resolution of this Court and hisbeing subjected to a scathing editorial by the same newspaper "because after all, the Court rendered a favorable judgment in the Bulletin union ca

last year." The malice lurking in that statement is most unbecoming of an officer of the Court and is an added reason for denying reconsideration.

Further, Atty. Laureta stubbornly contends that discussions on the merits in the Court's Per Curiam Resolution are more properly addressed to theTanodbayan, forgetting, however, his own discourse on the merits in his Answer to this Court's Resolution dated January 29, 1987. He thusincorrigibly insists on subordinating the Judiciary to the executive notwithstanding the categorical pronouncement in the Per Curiam Resolution oMarch 12, 1987, that Article 204 of the Revised Penal Code has no application to the members of a collegiate Court; that a charge of violation of Anti-Graft and Corrupt Practices Act on the ground that a collective decision is "unjust" cannot prosper; plus the clear and extended dissertation ithe same Per Curiam Resolution on the fundamental principle of separation of powers and of checks and balances, pursuant to which it is this Cou"entrusted exclusively with the judicial power to adjudicate with finality all justifiable disputes, public and private. No other department or agencmay pass upon its judgments or declare them 'unjust' upon controlling and irresistible reasons of public policy and of sound practice."

Atty. Laureta's protestations that he has done his best to protect and uphold the dignity of this Court are belied by environmental facts andcircumstances. His apologetic stance for the "adverse publicity" generated by the filing of the charges against the Justices concerned before the


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Tanodbayan rings with insincerity. The complaint was calculated precisely to serve that very purpose. The threat to bring the case to "another foruof justice" was implemented to the fun. Besides, he misses the heart of the matter. Exposure to the glare of publicity is an occupational hazard. If has been visited with disciplinary sanctions it is because by his conduct, acts and statements, he has, overall, deliberately sought to destroy the"authenticity, integrity, and conclusiveness of collegiate acts," to "undermine the role of the Supreme Court as the final arbiter of all justifiabledisputes," and to subvert public confidence in the integrity of the Courts and the Justices concerned, and in the orderly administration of justice.

In fine, we discern nothing in Atty. Laureta's Motion for Reconsideration that would call for a modification, much less a reversal, of our finding thhe is guilty of grave professional misconduct that renders him unfit to continue to be entrusted with the duties and responsibilities pertaining to anattorney and officer of the Court.

(2)

Neither do we find merit in Ilustre's Motion for Reconsideration. She has turned deaf ears to any reason or clarification. She and her counsel haverefused to accept the untenability of their case and the inevitability of losing in Court. They have allowed suspicion alone to blind their actions anso doing degraded the administration of justice. "Investigation" was utterly uncalled for. All conclusions and judgments of the Court, be theyenbanc or by Division, are arrived at only after deliberation. The fact that no dissent was indicated in the Minutes of the proceedings held on May 141986 showed that the members of the Division voted unanimously. Court personnel are not in a position to know the voting in a ny case because adeliberations are held behind closed doors without any one of them being present. No malicious inferences should have been drawn from theirinability to furnish the information Ilustre and Atty. Laureta desired The personality of the Solicitor General never came into the picture. It was Justice Abad Santos, and not Justice Yap, who was Chairman of the First Division when the Resolution of May 14, 1986 denying the Petition warendered. Thereafter Justice Yap inhibited himself from any participation. The fact that the Courten banc upheld the challenged Resolutions of theFirst Division emphasizes the irrespective of Ilustre's case irrespective of the personalities involved.

Additionally, Ilustre has been trifling with this Court. She has given our process servers the run-around. Three of them failed to serve on herpersonally her copy of this Court's Per Curiam Resolution of March 12, 1987 at her address of record. Mrs. Laureta informed process server LoreC. Bardel that Ilustre was residing at 17-D, Quezon St., Tondo, Manila. Romeo C. Regala, another process server, went to that address to serve cothe Resolution but he reported:

4. That inspite of diligent efforts to locate the address of ms.Eva Maravilla-Ilustre, said address could not be located;

5. That I even asked the occupants (Cerdan Family) of No. 17 Quezon Street, Tondo, Manila, and they informed that there is nsuch Ms. Eva Maravilla-Ilustre in the neighborhood and/or in the vicinity; ... (p. 672, Rollo, Vol. 11).

The third process server, Nelson C. Cabesuela, was also unable to serve copy of this Court's Resolution on Ilustre. He reported:

2. On March 17, 1987, at about 9:30 A.M., I arrived at the house in the address furnished at; the notice of judgment (101 FelixManalo St., Cubao, Quezon City), and was received by an elderly woman who admitted to be the owner of the house butvehemently refused to be Identified, and told me that she does not know the addressee Maravilla, and told me further that she

always meets different persons looking for Miss Maravilla because the latter always gives the address of her house;

3. That, I was reminded of an incident that I also experienced in the same place trying to serve a resolution to Miss Maravillawhich was returned unserved because she is not known in the place; ... (p. 674, Rollo, Vol. II).

And yet, in her Petition for Extension of Time and in her Motion for Reconsideration she persists in giving that address at 101 Felix Manalo St.,Cubao, Quezon City, where our process servers were told that she was not a resident of and that she was unknown thereat. If for her contumaciouelusiveness and lack of candor alone, Ilustre deserves no further standing before this Court.

ACCORDINGLY, the respective Motions for reconsideration of Atty. Wenceslao G. Laureta for the setting aside of the order suspending him frompractice of law, and of Eva Maravilla Ilustre for the lifting of the penalty for contempt are DENIED, and this denial is FINAL. Eva Maravilla Ilusshall pay the fine of P1,000.00 imposed on her within ten (10) days from notice, or, suffer imprisonment for ten (10) days upon failure to pay saidwithin the stipulated period.

SO ORDERED.

METROBANK VS TOBIAS

Republic of the Philippines

Supreme Court

Manila

FIRST DIVISION


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METROPOLITAN BANK & TRUST CO.(METROBANK), represented by ROSELLA A.SANTIAGO,

Petitioner,

-versus-

ANTONINO O. TOBIAS III,

Respondent.

G.R. No. 177780

Present:

CORONA,C.J., Chairperson,

LEONARDO-DE CASTRO,

BERSAMIN,

VILLARAMA, JR., and

*PERLAS-BERNABE, JJ.

Promulgated:

January 25, 2012

x-----------------------------------------------------------------------------------------x

D E C I S I O N

BERSAMIN, J.:

This appeal assails the adverse decision of the Court of Appeals (CA)1 that dismissed the petition forcertiorari brought by the petitioner to nullify and

set aside the resolutions issued by the Secretary of Justice on July 20, 20042 and November 18, 20053 directing the City Prosecutor of Malabon City to

withdraw the information in Criminal Case No. 27020 entitledPeople v. Antonino O. Tobias III .

We affirm the CA in keeping with the principle of non-interference with the prerogative of the Secretary of Justice to review the resolutions of the

public prosecutor in the latters determination of the existence of probable cause, absent any showing that the Secretary of Justice thereby commits

grave abuse of his discretion.

Antecedents
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In 1997, Rosella A. Santiago, then the OIC-Branch Head of Metropolitan Bank & Trust Company (METROBANK) in Valero Street, Makati City

introduced to respondent Antonino O. Tobias III (Tobias) by one Jose Eduardo Gonzales, a valued client of METROBANK. Subsequently, Tobias

opened a savings/current account for and in the name of Adam Merchandising, his frozen meat business. Six months later, Tobias applied for a lo

from METROBANK, which in due course conducted trade and credit verification of Tobias that resulted in negative findings. METROBANK ne

proceeded to appraise the property Tobias offered as collateral by asking him for a photocopy of the title and other related documents.4 The property

consisted of four parcels of land located in Malabon City, Metro Manila with a total area of 6,080 square meters and covered by Transfer Certifica

Title (TCT) No. M-16751.5 Based on the financial statements submitted by Tobias, METROBANK approved a credit l ine for P40,000,000.00. On A

15, 1997, Joselito Bermeo Moreno, Lead Internal Affairs Investigator of METROBANK, proceeded to the Registry of Deeds of Malabon to cause

annotation of the deed of real estate mortgage on TCT No. M-16751. The annotation was Entry No. 26897.6

Thereafter, Tobias initially availed himself of P20,000,000, but took out the balance within six months.7 He paid the interest on the loan for about a

year before defaulting. His loan was restructured to 5-years upon his request. Yet, after two months, he again defaulted. Thus, the mortgage was

foreclosed, and the property was sold to METROBANK as the lone bidder.8 On June 11, 1999, the certificate of sale was issued in favor of

METROBANK.9

When the certificate of sale was presented for registration to the Registry of Deeds of Malabon, no corresponding original copy of TCT No. M-16

was found in the registry vault. Atty. Sarah Principe-Bido, Deputy Register of Deeds of Malabon, went on to verify TCT No. M-16751 and learne

Serial No. 4348590 appearing therein had been issued for TCT No. M-15363 in the name of one Alberto Cruz; while TCT No. 16751 (now TCT N

390146) appeared to have been issued in the name of Eugenio S. Cruz and Co. for a parcel of land located in Navotas.10

Given such findings, METROBANK requested the Presidential Anti-Organized Crime Task Force (PAOCTF) to investigate.11 In its report dated May

29, 2000,12 PAOCTF concluded that TCT No. M-16751 and the tax declarations submitted by Tobias were fictitious. PAOCTF recommended the fi

against Tobias of a criminal complaint forestafa through falsification of public documents under paragraph 2 (a) of Article 315, in relation to Articles

172(1) and 171(7) of theRevised Penal Code.13

The Office of the City Prosecutor of Malabon ultimately charged Tobias withestafa through falsification of public documents through the following

information,14 viz:

xxx

That on or about the 15th day of August, 1997 in the Municipality of Malabon, Philippines and within the jurisdiction of thisHonorable Court, the above-named accused, by means of deceit, false pretense, fraudulent acts and misrepresentation executedprior to or simultaneous with the commission of fraud, represented to METROBANK, as represented by MS. ROSELLA S.
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