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SINGH, J.:
On July 10, 2017, the NPO released an Invitation to Apply for Eligibility and to Submit Proposal for a Joint Venture Undertaking with the NPO in the Augmentation of Printing Capacity Phase I (Invitation to Bid).[7]
Capital outlay and operating expense required under the proposed joint venture agreement/s except for personnel and marketing costs, shall be for the exclusive account of the selected JV partner/s. The Revenue Sharing Arrangement shall be set forth in the Instruction to Private Sector Participants (ITPSP) which shall be made available by the Secretary of the NPO Joint Venture Special Committee.[9]Topbest submitted its proposal and was eventually issued a Notice of Award,[10] dated September 13, 2017, by the NPO. The Notice of Award stated that Topbest is awarded Lot 2 of the Printing Capacity Augmentation Project Phase I.[11]
Subcontracting the printing of the accountable forms in the guise of ELA with private printers paying a total amount of [PHP] 3.71 billion from August 9, 2011 to August 13, 2017 contrary to the Government Procurement Policy Board Resolution No. 05-2010 dated October 29, 2010.[13]The NPO responded to the AOM arguing that it could enter into joint venture agreements with private printers because it is a government instrumentality with corporate powers.[14]
The transactions are being disallowed in audit because records of that transactions, upon examination and review, disclosed that the payments made to the private printers under subcontracting is irregular, in violation of Section 4.6 of the Government Procurement Policy Board (GPPB) Resolution No. 05-2010, which provides that:The Notice of Disallowance also stated that Topbest, as payee, is liable for the rental fee that it received from the NPO.[16]The appropriate RGP engaged by the procuring entity shall directly undertake the printing services for the contracts entered into, and cannot engage, subcontract, or assign any private printer to undertake the performance of the printing service.[15]
However, scrutiny and examination of the records show that the payments are made not on the value of the output from the machine on running basis but at the rate of 85% and 15% between the private printers and the NPO, respectively, of the total cost of the JO/WO.Thus, the COA-NGAS Decision concluded that the ELA, being a subcontracting agreement, violated Government Procurement Policy Board (GPPB) Resolution No. 05-2010 (GPPB Resolution No. 05-2010) which approved the Guidelines on the Procurement of Printing Services. The Guidelines on the Procurement of Printing Services expressly prohibited the NPO from subcontracting its printing services.[24]
....
A further research revealed that a Technical Evaluation Report dated May 11, 2012 was issued by this Technical Service Division, National Government Sector A, this Commission, relative to the Review and Evaluation of contracts of leases of printing services of the NPO and TPC. In the said Report, it was revealed what constituted the 85% and 15% division Item 4, Letter E states that:The unit cost per Job Orders (J.O.s) to the lessor was considered standard transaction costs between NPO and its government clients from which NPO deducts 15% as its profit. The rental cost and materials cost are taken from the remaining amount (85%) of the Job Order.Applying this, it becomes clear that the 15% represented the profit of the NPO from the JOs/WOs, it also confirms that the 85% does not only represent the rental fee but also includes the material cost, maintenance cost, power, operator and etc. Given this additional information, we now ask, is the ELA just [a] Lease Contract, considering it's not only the equipment but including the entire costs of production or did the NPO farm out the JOs/WOs and reserved the 15% of its cost as its profit?
....
Considering all these material information in relation to the laws and jurisprudence mentioned above, one thing is clear, the NPO farmed out its contracts with the requisitioning-agencies to different private printers, in this case TPC. In sum, the NPO subcontracted its projects to TPC at a value of 85% of the JOs/WOs.[23] (Emphasis in the original; citations omitted)
WHEREFORE, premises considered, Ms. Shirley L. Dionisio, TOPBEST Printing Corporation, from Notice of Disallowance No. No. 19-Â001-207542-17 dated January 22, 2019, for the rental fee of leased printing machines/equipment paid National Printing Office to twelve (12) private printers for the period of April to December 2017, in the total amount of [PHP]499,376,515.60, is hereby DENIED. Accordingly, the Appellant's liability in the amount of [PHP]6,039,057.54, is hereby AFFIRMED.[27] (Emphasis in the original)Topbest received the Decision on May 24, 2022. Instead of filing an appeal before the COA Commission Proper in accordance with Rule VII, Section 3 of the COA Rules of Procedure, Topbest filed this Petition before the Court on June 23, 2022.[28]
Section 3. Period of Appeal. The appeal shall be taken within the time remaining of the six (6) months period under Section 4, Rule V, taking into account the suspension of the running thereof under Section 5 of the same Rule in case of appeals from the Director's decision, or under Sections 9 and 10 of Rule VI in case of decision of the ASB.[29]Topbest states that considering that it only had one day to file an appeal before the COA Commission Proper, "there is no longer any appeal, or any plain, speedy, and adequate remedy." Thus, Topbest asserts that recourse to the Court through a special civil action for certiorari under Rule 64 in connection with Rule 65 of the Rules of Court is proper.[30]
The doctrine of exhaustion of administrative remedies is a cornerstone of our judicial system. The thrust of the rule is that courts must allow administrative agencies to carry out their functions and discharge their responsibilities within the specialized areas of their respective competence. The rationale for this doctrine is obvious. It entails lesser expenses and provides for the speedier resolution of controversies. Comity and convenience also impel courts of justice to shy away from a dispute until the system of administrative redress has been completed.[52]This is especially true in the case of the COA, a constitutional commission mandated specifically to audit the expenditures of government funds. That the Court is not a trier of facts further highlights this, because auditing government expenditures often requires the examination of documents and transactions. Thus, the importance of exhausting the remedies available within the COA so as to allow it to perform its constitutional duty cannot be overemphasized.
Topbest failed to establish that the COA acted with grave abuse of discretion |
As an extraordinary remedy, its purpose is simply to keep the public respondent within the bounds of its jurisdiction or to relieve the petitioner from the public respondent's arbitrary acts. In this review, the Court is confined solely to questions of jurisdiction whenever a tribunal, board or officer exercising judicial or quasi-judicial function acts without jurisdiction or in excess of jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction. . .[55] (Emphasis in the original)A Rule 65 petition (and a Rule 64 petition filed in relation to Rule 65) has a high bar and can only be invoked for errors of jurisdiction. It is intended to correct grave abuse of discretion amounting to lack or excess of jurisdiction. The definition of grave abuse of discretion is well-established. It "denotes capricious, arbitrary[,] and whimsical exercise of power. The abuse of discretion must be patent and gross as to amount to an evasion of positive duty or to a virtual refusal to perform a duty enjoined by law, as not to act at all in contemplation of law, or where the power is exercised in an arbitrary and despotic manner by reason of passion or hostility."[56]
The limitation of the Court's power of review over COA rulings merely complements its nature as an independent constitutional body that is tasked to safeguard the proper use of the government and, ultimately, the people's property by vesting it with power to (i) determine whether the government entities comply with the law and the rules in disbursing public funds; and (ii) disallow legal disbursements of these funds.[57] (Emphasis in the original)The Court further highlights that the factual findings of administrative bodies, such as the COA, "charged with their specific field of expertise, are afforded great weight by the courts, and in the absence of substantial showing that such findings were made from an erroneous estimation of the evidence presented, they are deemed conclusive and binding upon this Court. In the interest of stability of the governmental structure, they should not be disturbed."[58]
It is settled that the essence of due process lies in the opportunity to be heard. In disallowance cases, which are in the nature of administrative proceedings, "one is heard when he is accorded a fair and reasonable opportunity to explain his case or is given the chance to have the ruling complained of reconsidered."The COA's duty in the issuance of a notice of disallowance is well-defined under the COA Rules of Procedure. Rule IV, Section 4 Thereof, states:
Procedural due process requirements in disallowance cases are satisfied when the person held liable for a disallowance: (a) is notified of the auditor's conclusions, recommendations or dispositions, and the applicable laws, regulations, jurisprudence, and the generally accepted accounting and auditing principles upon which the audit findings were based; and (b) interposes an appeal therefrom, as allowed under the law and the COA Rules.[62] (Citations omitted)
Section 4. Audit Disallowances/Charges/Suspensions.— In the course of the audit, whenever there are differences arising from the settlement of accounts by reason of disallowances or charges, the auditor shall issue Notices of Disallowance/Charge (ND/NC) which shall be considered as audit decisions. Such ND/NC shall be adequately established by evidence and the conclusions, recommendations or dispositions shall be supported by applicable laws, regulations, jurisprudence and the generally accepted accounting and auditing principles. The Auditor may issue Notices of Suspension (NS) for transactions of doubtful legality/validity/propriety to obtain further explanation or documentation. (Emphasis supplied)Here, it is undisputed that Topbest was notified of the Audit Team's findings through the Notice of Disallowance which it was able to contest through its appeal before the Director. While Topbest makes it appear that the Notice of Disallowance was not based on any evidence, this is belied by the Notice of Disallowance itself which categorically stated that the Audit Team examined and reviewed the records of the transactions pertaining to the lease of printing machines and equipment to twelve (12) printers for the period of April to December 2017.[63] The Court rules that this suffices to comply with the COA's duty to parties in the issuance of a Notice of Disallowance. To be sure, the COA is not required to painstakingly enumerate all the pieces of evidence it considered and specify all the reasons why these pieces of evidence have weight. Nor is the COA required to "tender the evidence" or furnish parties copies of these pieces of evidence when, as Director Gemora stated in the Decision, the evidence consist of documents and transactions which came from Topbest and the NPO themselves.[64]
Further, the appellant failed to realize that before the issuance of the questioned ND, the Audit Team – NPO gathered its evidence as basis therefor. The Audit Team has its working papers, which composed of the voluminous transactions, records and receipts. The sources of these pieces of evidence came from the appellant and the NPO themselves. It is unfair, therefore, to assume that the questioned ND was issued without any evidence.[65]Topbest harps on its argument that the COA-NGAS Decision purportedly hinged its ruling on the payment scheme between Topbest and the NPO, which was supposedly based on the Technical Evaluation Report, dated May 11, 2012. Topbest misreads the import of the COA-NGAS Decision.
Nothing is more settled in law than that when a judgment becomes final and executory it becomes immutable and unalterable. The same may no longer be modified in any respect, even if the modification is meant to correct what is perceived to be an erroneous conclusion of fact or law, and whether made by the highest court of the land. The reason is grounded on the fundamental considerations of public policy and sound practice that, at the risk of occasional error, the judgments or orders of courts must be final at some definite date fixed by law.[68]Thus, the Court can no longer modify the COA-NGAS Decision and Notice of Disallowance. Topbest must suffer the consequences of its failure to comply with clear and settled rules for the proper filing of an appeal in the COA.
The Court has further allowed the relaxation of the rigid rule on the immutability of a final judgment in order to serve substantial justice in considering: (1) matters of life, liberty, honor or property; or (2) the existence of special or compelling circumstances; or (3) the merits of the case; or (4) a cause not entirely attributable to the fault or negligence of the party favored by the suspension of the rules; or (5) a lack of any showing that the review sought is merely frivolous and dilatory; or (6) that the other party will not be unjustly prejudiced thereby.[12] (Citation omitted)Save for Topbest's procedural misstep being entirely attributable to itself, this case presents all considerations identified in Estalilla.
The terms of the contract between NPO and Topbest encompass lease |
Records disclosed that the NPO entered into an ELA with [Topbest] to provide additional facilities and increase NPO's capabilities to serve its purpose.Nonetheless, the COA-NGAS still found the terms of the contract ambiguous and hence, justified its resort to other "extrinsic evidence" to determine the true nature of the ELA. It ultimately concluded that the arrangement between NPO and Topbest was a subcontracting agreement because Topbest did not only supply the equipment but included the entire cost of production. The relevant portion of the Decision reads:
A scant reading of the ELA provide[s] simple lease agreements between the NPO and the private printers. In fact, in the naked eye, the provisions of the ELAs are valid in form and in substance. Item 3 of the ELA is read as follows:3. RENTAL FEE
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3.2 The Lessee shall pay the Lessor after the completion of the job order (JO)/work order (WO) on running basis. The rental fee for the aforementioned machines shall be computed on the value of the output from the machines on running basis only.[15]
However, scrutiny and examination of the records show that the payments are made not on the value of the output from the machine on running basis but at the rate of 85% and 15% between the private printers and the NPO. respectively, of the total cost of JO/WO. From the Billing Statements the 85% of the value of the JO/WO represents only the rental fee, and thus, it appears that the remaining 15% represents the labor, raw materials, and revenue costs.However, apart from the conclusion that "the 85% does not only represent the rental fee but also includes the material cost, maintenance cost, power, operator and etc.,"[17] nothing in the cited Technical Evaluation Report definitively confirmed that it was Topbest that did the printing. As to the bundling of other costs, the Invitation to Submit Proposal[18] provides:
The [Audit Team-NPO] inquired [into] the basis of the term of payment for all of the ELAs, however, the NPO answered that 85% and 15% division relative to the total cost of the JOs/WOs was only the decision of the Head of the NPO in 2012 without any guidelines and supporting documents to justify this term of payment.
A further research revealed that a Technical Evaluation Report dated May 11, 2012 was issued by this Technical Service Division, National Government Sector A, this Commission, relative to the Review and Evaluation of contracts of leases of printing services of the NPO and [Topbest]. In the said Report, it was revealed what constituted the 85% and 15% division, Item 4, Letter E, states that:The unit cost per [JOs] to the lessor was considered standard transaction costs between NPO and its government clients from which NPO deducts 15% as its profit. The rental costs and materials cost are taken from the remaining amount (85%) of the [JO] . ...Applying this, it becomes clear that the 15% represented the profit of the NPO from the JOs/WOs, it also confirms that the 85% does not only represent the rental fee but also includes the material cost, maintenance cost, power, operator and etc. Given this additional information, we now ask, is the ELA just Lease Contract, considering it's not only the equipment but including the entire costs of production or did the NPO farm out the JOs/WOs and reserved the 15% of its cost as its profit?[16] (Emphasis supplied)
Capital outlay and operating expense required under the proposed joint venture arrangement/s, except for personnel and marketing costs, shall be for the exclusive account of the selected JV partner/s. The Revenue Sharing Arrangement shall be set forth in the Instruction to Private Sector Participants (ITPSP) which shall be made available by the Secretary of the NPO Joint Venture Special Committee.[19] (Emphasis in the original)This will naturally be the arrangement, given that NPO receives no funding to acquire plant, property, or equipment (PPE) from its regular appropriations and thus is constrained to rely on leasing printing equipment from private sector partners to increase the capacity of its printing operations. In turn, the printing operations generate income that allows NPO to sustain itself—to pay for the salaries of its personnel, and to maintain its own PPE, among others. NPO's regular appropriations for 2017 did not include any appropriation for capital outlay or operating expense pertaining to PPE not belonging to it.
While Topbest alleges that under Article 1654 of the Civil Code, the lessor has the duty to make necessary repairs, it should be clarified that the maintenance cost and labor cost are not usually included in the rental fee in ordinary lease agreements. Ordinary lease agreements are arrangements where one party is allowed to use a property owned by the other party for a fee. It does not cover a situation where the owner of the property not only leases it to another person but also obligates the lessee to perform the lessors' work, after which they split the revenue. This was precisely what the Notice of Disallowance and the Decision found questionable in the NPO's and Topbest's transactions.[20]This is not borne by the ND, or by the COA-NGAS Decision. Nowhere did the COA-NGAS Decision refer to any act that Topbest as lessor required NPO as lessee. To repeat, the COA-NGAS Decision anchored its finding that it was a subcontracting agreement because it considered the 85% payment as covering the entire costs of production. Even the maintenance of the leased equipment undertaken by Topbest as owner and lessor was construed as evidence of subcontracting. This, in the face of Topbest's adamant assertion that it entered into a contract of lease and performed its obligation to turn over and maintain its equipment in good working condition and maintain NPO in quiet enjoyment of the leased equipment under the said contract of lease, without having ever performed the printing for NPO.
NPO was constrained to enter into ELAs due to the provisions of Executive Order No. 378 and the special provisions of its annual appropriations |
SEC. 3. In the exercise of its functions, the amount to be appropriated for the programs, projects and activities of the NPO in the General Appropriations Act (GAA) shall be limited to its income without additional financial support from the government.This is confirmed and implemented by the appropriations for NPO and the special provisions for their release in the annual GAA.
| D. NATIONAL PRINTING OFFICE | ||||
| For general administration and support, and operations, as indicated hereunder | ........................................................................ | P 129,314,000 | ||
=========== | ||||
| | Current Operating Expenditures | |||
| | Personnel Services _____________ | Maintenance and Other Operating Expenses ___ | Capital Outlays _________ | Total ___________ |
| PROGRAMS | | | | |
| | | | | |
| General Administration and Support | P 24,962,000 | | | P 24,962,000 |
| Operations | 104,352,000 | | | 104,352,000 |
| | -------------- | | | -------------- |
| MFO 1: NATIONAL | 104,352,000 | | | 104,352,000 |
| PRINTING SERVICES | -------------- | | | -------------- |
| Total, Programs | 129,314,000 | | | 129,314,000 |
| | -------------- | | | -------------- |
| TOTAL NEW | P129,314,000 | | | P129,314,000 |
| APPROPRIATIONS | ========== | | | =========== |
Special Provision(s)Similarly, NPO had no Capital Outlay appropriation from 2010 and no maintenance and other operating expenses (MOOE) from 2015 to 2017 when the ELA was flagged and disallowed. Across these years and couched in different phrasing, the condition for the release of NPO's budget it needs to run its operations and to pay its personnel is this: it must first realize that income. In other words, NPO funds itself from income from operations. For the period relevant to the controversy, expectedly, NPO was not among the offices that received budgetary support from the National Government.[22]
1. Revolving Fund for the National Printing Office. The revolving fund constituted from income derived from the production and other printing activities of the National Printing Office (NPO) shall be used to cover its operating requirements consistent with Section 3 of E.O. No. 378 s. 2004. Disbursements shall be made in accordance with budgeting, accounting, and auditing rules and regulations.
Disbursements or expenditures by the NPO in violation of the above requirements shall be void and shall subject the erring officials and employees to disciplinary actions in accordance with Section 43, Chapter 5 and Section 80, Chapter 7, Book VI of E.O. 292, and to appropriate criminal action under existing penal laws.
The NPO shall submit to the DBM, the Speaker of the House of Representatives, the President of the Senate of the Philippines, the House Committee on Appropriations and Senate Committee on Finance, either in printed form or by way of electronic document, quarterly reports on income and expenditures. The Director of NPO and the Agency's web administrator or his/her equivalent shall be responsible for ensuring that said quarterly reports are likewise posted in the NPO website.
2. Appropriations for the National Printing Office. The amount of One Hundred Twenty Nine Million Three Hundred Fourteen Thousand Pesos (P129,314,000) appropriated herein for Personnel Services shall only be released upon submission by the NPO to the DBM of a certification from the BTr that the corresponding amount sourced from collections under this fund has been deposited with the National Treasury: PROVIDED, That the DBM is authorized to make an advance release to cover the first month Personnel Services requirements of the NPO in the event the revolving fund is not sufficient to provide for the said requirements: PROVIDED, FURTHER, That the expenditures sourced from this fund shall be consistent with the performance indicators identified herein and shall be considered the commitment and accountability of the Director of the NPO.
The NPO shall submit to the DBM, the Speaker of the House of Representatives, the President of the Senate of the Philippines, the House Committee on Appropriations and the Senate Committee on Finance, quarterly reports on income and expenditures. The Director of the NPO and the agency's web administrator or his/her equivalent shall be responsible for ensuring that said quarterly reports are likewise posted on the official website of the NPO.
Failure to comply with any of the foregoing shall render any disbursement from said income void, and shall subject the erring officials and employees to disciplinary actions in accordance with Section 43, Chapter 5 and Section 80, Chapter 7, Book VI of E.O. 292 s. 1987 and to appropriate criminal action under existing laws.
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Even if the ND is valid, Topbest should be allowed to retain the rentals |
73. Assuming arguendo that the NPO indeed committed violations of the GPPB Resolution No. 05-2010 and [Republic Act] No. 9184 in its transactions with the private printers, petitioner cannot be held liable for the same.I agree. As stated, the ELA is a lease, and even if it were not, Topbest should be able to retain the rentals it was paid.
74. For one, there is nothing in the records which would show that petitioner Topbest was even remotely aware of the alleged "unscrupulous practice" of the NPO. What is clear is that petitioner entered into an Equipment Lease Agreement with the NPO, wherein the former would lease its printing machine to the latter. All of the evidence at hand in relation to the agreement entered into between petitioner and the NPO point to one conclusion – that petitioner agreed only to a lease contract.
75. To reiterate petitioner's submissions in its Appeal Memorandum:"First: Under the Notice of Award dated 13 September 2017, it is stated that appellant is awarded with Lot 2 of the Printing Capacity Augmentation Project Phase 1, as provided under the Online Invitation to Bid dated 10 Ju[l]y 2017 which provides: "Joint provision of property, plant[ ] and equipment, including consumables and services for use in the printing of various specialized/customized accountable and non-accountable forms [."]76. Absent any basis to say otherwise, petitioner cannot be made to suffer the consequences of an allegedly illegal act committed by another entity beyond what it has agreed to. It behooves us to acknowledge that the ELA is the contract petitioner signed. Clearly, petitioner entered only into a lease agreement with the NPO, which is not prohibited under any law. To hold petitioner liable for violating a law due to the acts of another is blatantly ignoring the demands of due process and the very basic tenets of justice.[23]
Nowhere is it stated in both the aforesaid Notice of Award and the Invitation to Bid that the printing would be made by the NPO's prospective Joint Venture partner.
Second: The re-implementation of the Equipment Lease Agreement dated 28 June 2016 enabled the NPO to comply with the requirements of the GPPB's Resolution No. 05-2010 which prohibits the subcontracting of printing projects. This is due to the provision of the aforesaid lease agreement which provides that "the leased machines shall be in tip top running condition which shall he manned/operated by NPO operators assigned at the Lessor's premises."
All told, the attendant circumstances clearly show that, in fact, a contract of lease over a printing equipment was entered into by the NPO and [Topbest] and not a subÂcontracting agreement."
The Court in Torreta further explained the principle of quantum meruit as follows:
- If a [ND] is set aside by the Court, no return shall be required from any of the persons held liable therein.
- If a [ND] is upheld, the rules on return are as follows:
Quantum meruit literally means "as much as he deserves." Under this principle, a person may recover a reasonable value of the thing he delivered or the service he rendered. The principle also acts as a device to prevent undue enrichment based on the equitable postulate that it is unjust for a person to retain benefit without paying for it. The principle of quantum meruit is predicated on equity. In the case of Geronimo v. COA, it has been held that "the [r]ecovery on the basis of quantum meruit was allowed despite the invalidity or absence of a written contract between the contractor and the government agency." In Dr. Eslao v. COA, the Court explained that the denial of the contractor's claim would result in the government unjustly enriching itself. The Court further reasoned that justice and equity demand compensation on the basis of quantum meruit. Thus, in applying this principle, the amount in which the petitioners together with the other liable individuals shall be equitably reduced.[26] (Emphasis supplied; citations omitted)In Torreta, the Court acknowledged the technicalities involved in fixing the amount that should ultimately be returned by the persons solidarity liable under the ND. Accordingly, the Court remanded the case to the COA for the determination of amount of liability of therein petitioners, applying the generally accepted accounting rules and COA rules and regulations.
Although this Court agrees with respondent's postulation that the "implied contracts," which covered the additional constructions, are void, in view of violation of applicable laws, auditing rules and lack of legal requirements, we nonetheless find the instant petition laden with merit and uphold, in the interest of substantial justice, petitioners-contractors' right to be compensated for the "additional constructions" on the public works housing project, applying the principle of quantum meruit.Relevantly, the Court has, on many occasions, relaxed the rule on immutability of judgments in the interest of substantial justice. In Republic of the Philippines v. Dagondon,[31] the Court delved into the merits of a case for reconstitution of an Original Certificate of Title and even resolved the same in favor of therein petitioner despite the fact that the decision of the court a quo had already become final and executory because of therein petitioner's failure to timely file a motion for reconsideration. The Court said that the mandatory nature of the rule on immutability of final judgments "was not designed to be an inflexible tool to excuse and overlook prejudicial circumstances. Hence, the doctrine must yield to practicality, logic, fairness, and substantial justice."[32]
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... Equally important is the glaring fact that the construction of the housing units had already been completed by petitioners-contractors and the subject housing units had been, since their completion, under the control and disposition of the government pursuant to its public works housing project.
To our mind, it would be the apex of injustice and highly inequitable for us to defeat petitioners-contractors' right to be duly compensated for actual work performed and services rendered, where both the government and the public have, for years, received and accepted benefits from said housing project and reaped the fruits of petitioners-contractors' honest toil and labor.[30] (Emphasis supplied; citation omitted)
(a) | The RGPs shall undertake the printing requirements themselves and shall not sub-contract any portion thereof to other printers; and |
Time and again, the Court has repeatedly held that "a decision that has acquired finality becomes immutable and unalterable, and may no longer be modified in any respect, even if the modification is meant to correct erroneous conclusions of fact and law, and whether it be made by the court that rendered it or by the Highest Court of the land. This principle, known as the doctrine of immutability of judgment, has a two-fold purpose, namely: (a) to avoid delay in the administration of justice and thus, procedurally, to make orderly the discharge of judicial business; and (b) to put an end to judicial controversies, at the risk of occasional errors, which is precisely why courts exist. Verily, it fosters the judicious perception that the rights and obligations of every litigant must not hang in suspense for an indefinite period of time. As such, it is not regarded as a mere technicality to be easily brushed aside, but rather, a matter of public policy which must be faithfully complied." However, this doctrine "is not a hard and fast rule as the Court has the power and prerogative to relax the same in order to serve the demands of substantial justice considering: (a) matters of life, liberty, honor, or property; (b) the existence of special or compelling circumstances; (c) the merits of the case; (d ) a cause not entirely attributable to the fault or negligence of the party favored by the suspension of the rules; (e) the lack of any showing that the review sought is merely frivolous and dilatory; and (f) that the other party will not be unjustly prejudiced thereby."[7]A reading of the Court's discussion in Aguinaldo IV leads to the understanding that the doctrine of finality and immutability of judgment may still be relaxed despite the absence of the known exceptions "in order to serve the demands of substantial justice considering: (a) matters of life, liberty, honor, or property; (b) the existence of special or compelling circumstances; (c) the merits of the case (d) a cause not entirely attributable to the fault or negligence of the party favored by the suspension of the rules; (e) the lack of any showing that the review sought is merely frivolous and dilatory; and (f) that the other party will not be unjustly prejudiced thereby."[8]
Verily, the peculiarity of cases involving government contracts for procurement of goods or services necessitates the promulgation of a separate guidelines for the return of the disallowed amounts. In these cases, it is deemed fit that the passive recipients be ordered to return what they received subject to the application of the principle of quantum meruit. Quantum meruit literally means "as much as he deserves." Under this principle, a person may recover a reasonable value of the thing he delivered or the service he rendered. The principle also acts as a device to prevent undue enrichment based on the equitable postulate that it is unjust for a person to retain benefit without paying for it. The principle of quantum meruit is predicated on equity. In the case of Geronimo v. COA, it has been held that "the [r]ecovery on the basis of quantum meruit was allowed despite the invalidity or absence of a written contract between the contractor and the government agency." In Dr. Eslao v. COA, the Court explained that the denial of the contractor's claim would result in the government unjustly enriching itself. The Court further reasoned that justice and equity demand compensation on the basis of quantum meruit. Thus, in applying this principle, the amount in which the petitioners together with the other liable individuals shall be equitably reduced.[9] (Emphasis supplied)Applying Torreta, the government unjustly enriching itself is a compelling circumstance for the Court to relax the doctrine of finality and immutability of judgment. In the same manner, the government will not be unjustly prejudiced in relaxing the principle because the government would have already benefitted from the disbursement of public funds. Here, the government benefited as a result of using petitioner's equipment and its performance of printing services which arose from the agreement entered between petitioner and NPO. To require petitioner to return the entire amount that it received from NPO would be contrary to the demands of justice and equity.
Section 51. Finality of decisions of the Commission or any auditor. A decision of the Commission or of any auditor upon any matter within its or his jurisdiction, if not appealed as herein provided, shall be final and executory.(See also Paguio v. Commission on Audit, G.R. No. 223547, April 27, 2021, citing Republic v. Heirs of Cirilo Gotengco, G.R. No. 226355, January 24, 2018.)