Case # 21:

Atty. Virgilio A. Sevandal Vs. Atty. Melita B. Adame

A.C. No. 10571, November 11, 2020

FACTS:

On September 6, 2011, Atty. Virgilio A. Sevandal filed with the Integrated Bar of the
Philippines Commission on Bar Discipline for disbarment against Atty. Melita B. Adame in
violation of Rules 8.02, 2 Canon 8 (encroaching upon the professional employment of another
lawyer) and Rule 10.01, 3 Canon 10 (doing any falsehood) of the Code of Professional
Responsibility (CPR). Atty. Sevandal claimed that through a verbal agreement, Merlina Borja-
Sevandal (Merlina) engaged his professional services to provide legal advice and assistance, as
well as file court cases to Merlina's claims with Fuyoh Shipping and Bandila Maritime. On the
other hand, Atty. Adame, in behalf of Merlina, filed a Complaint with the National Labor Relations
Commission (NLRC) against Fuyoh Shipping and Bandila Maritime for the payment of death
benefits, sickness allowance and damages. DRPI informed Atty. Sevandal that Merlina's claim for
death benefits was discontinued due to the filing of the complaint by Atty. Adame with the NLRC.
Atty. Sevandal entered his appearance as counsel for Merlina at the NLRC mandatory
conference, for and in the absence of Atty. Adame, as counsel for Merlina.

The Investigating Connnissioner of the IBP-CBD issued a Report and Reconnnendation27

finding that Atty. Adame did not encroach on the professional employment of Atty. Sevandal nor
commit any falsehood.

ISSUE: Whether or not the IBP is correct in suspending Atty. Sevandal from the practice of law
for two (2) years and in directing him to return the amount ofi'300,000.00 to the client.

RULING:

Atty. Sevandal's acts were in direct violation of Rule 8.02, Canon 8 of the CPR, which
states:

Rule 8.02 - A lawyer shall not, directly or indirectly, encroach upon the professional
employment of another lawyer, however, it is the right of any lawyer, without fear or favor,
to give proper advice and assistance to those seeking relief against unfaithful or
neglectful counsel.

It is undisputed that Atty. Sevandal was not the counsel of record in NLRC Case No. NCR
OFW (M) 05-06890-11. It was Atty. Adame who filed the complaint with the NLRC and the only
counsel on record of Merlina.

Atty. Sevandal's insistence that he executed a Retainer Contract and an Addendum to

Retainer Contract with Merlina as basis for appearing on her behalf before the NLRC is untenable.
Not having been engaged by the client to appear before the NLRC, Atty. Sevandal had no
authority to enter his appearance as counsel and encroach on the services of &,other lawyer. He
also had no right to receive the amount ofr'300,000.00 as attorney's fees awarded by the NLRC.

1
Case # 22:
Lucila Purificacion Vs. Charles T. Gobing and Atty. Jaime Villanueva
G.R. No. 191359, November 11, 2020

FACTS:

A parcel of agricultural land in Imus, Cavite, was formerly owned by Elmer Virgil
Villanueva, Franci Andrew Villanueva, Mine-O Jeno Villanueva and Paul Frederick Villanueva.
Petitioner Lucila and her late husband, Jacinto Purificacion, were tenants in the foregoing subject
lot. Atty. Jaime Villanueva, representing the former landowners of the subject lot sold to
respondent Charles Gobing of Charles Builders, Inc. Respondent Gobing then converted the
purchased lot into a residential subdivision called Gold Lane Subdivision. However, Lucila claimed
that respondents did not fulfill their promise to give them 1,000 square meters of the subject lot.
Instead, Gobing demanded Lucila to vacate the land. Respondents mainly argued that Lucila has
no legal right to demand an additional disturbance compensation of 1,000 square meters of land
because she had already been well compensated in the amount of P1,046,460.00, which was
more than the amount she can legally claim for pursuant to Department of Agrarian Reform (DAR)
Administrative Order.

ISSUE: Whether CA is correct in affirming the Decision of the Department of Agrarian Reform
Adjudication Board that Lucila’s action has already prescribed.

RULING:

Section 38 of RA No. 3844, otherwise known as the Agricultural Land Reform Code,
provides:

SECTION 38. Statute of Limitations. - An action to enforce any cause of action

under this Code shall be barred if not commenced within three years after such cause of
action accrued.

In the instant case, Lucila's cause of action arose when the Purificacion spouses executed
the notarized Malayang Salaysay dated July 1, 1993. In the said document, the Purificacion
spouses relinquished their tenancy rights in favor of the former landowners in exchange for
P1,046,460.00, representing their disturbance compensation.

This Court finds that respondents have already properly compensated Lucila in the
amount of P1,046,460.00 as disturbance compensation. We note that the DARAB and the
appellate court had made identical and sound dispositions on the same issues posed by Lucila
before them. Well settled is the rule that findings of fact of administrative bodies, such as the
DARAB in the instant case, if based on substantial evidence, and especially if affirmed by the
appellate court, are controlling on the reviewing authority. Administrative decisions on matters
within their jurisdiction are entitled to respect and can only be set aside on proof of grave abuse
of discretion, fraud or error of law, none of which obtains in this case

2
Case # 23:
National Transmission Corporation vs. Commission on Audit
G.R. No. 244193, November 10, 2020

FACTS:

TransCo is a GOCC created in June 2001 by virtue of Section 8 of Republic Act No. (RA)
9136,4 otherwise known as the Electric Power Industry Reform Act (EPIRA). It assumed the
electrical transmission function of the National Power Corporation (NAPOCOR) and presently
operates NAPOCOR's nationwide electrical transmission and subtransmission system.

Supervising Auditor Corazon V. Espafio and Audit Team Leader Minerva T. Cabigting
issued Notice of Disallowance which disapproved the payments of EME in the amount of
P1,841,165.44. The ND provides that payments of EME were made on a commutable basis and
were not supported by receipts, contrary to Item III of COA Circular No. 2006-001 dated January
3, 2006.

The COA ruled that the absence of receipts or supporting documents evidencing
disbursements of the EME and the uniformity of the amounts paid to Transco officials are
conclusive proof that the EME were paid on a commutable basis. It dismissed TransCo's claim of
good faith because of its "disregard of the applicable law or rules." Ultimately, it found Transco
officials who had direct participation and/or authorized the payment of the EME solidarily liable
with the payees for the disallowed amount.

ISSUE: Whether the COA acted with grave abuse of discretion in ruling that Transco has the
burden of proof to show that payments were not made on a commutable basis, as it alleged.

RULING:

No. Transco has the burden of proof to show that it is entitled to reimbursement of EMF,
incurred by its officials.

COA Circular No. 2006-001 dated January 3, 2006 prescribes the rules and regulations
governing the disbursement of EME and other similar expenses to GOCCs/GFis and their
subsidiaries. It aims to regulate the incurrence of EME by the qualified officials of GOCCs/GFis
and their subsidiaries and ensure the prevention or disallowance of irregular, unnecessary,
excessive, extravagant, or unconscionable expenditures or uses of government funds. 26 This
breathes life to COA's constitutional mandate, as guardian of public funds, to promulgate
accounting and auditing rules and regulations in the exercise of its general audit power.

In this case, Transco 's claim for reimbursement was not supported by any receipt from its
officials. Considering the absence of receipts and/or supporting documents to substantiate
TransCo's claim of reimbursement, the COA correctly disallowed the EME of Transco officials.

Even if the approving/certifying officers did not act in bad faith or with malice or gross
negligence, all the payees are liable to return the disallowed amounts respectively received by
them.

3
Case # 24:
Eduardo B. Manalang Vs. Atty. Cristina Benosa Buendia
A.C. No. 12079, November 10, 2020

FACTS:

Sometime in 2011, Manalang engaged the services of Atty. Buendia for the declaration of
nullity of his marriage. Atty. Buendia told Manalang that the proceeding usually lasts from one (1)
to two (2) years, but with her services, it can be hastened to six (6) months to one (1) year.
Manalang hesitated at first, but Atty. Buendia assured him that everything was legal. Thus, an
agreement was made where Manalang would pay legal fees amounting to P275,000.00 plus
documentation and out of pocket expenses.

When Manalang inspected the decision, he observed that it contained fabricated details
regarding his marriage, such as physical violence allegedly inflicted on him. He also noticed that
the facts therein were different from what he had narrated to Atty. Buendia. These made him
doubt the veracity of the documents.

Atty. Buendia said that she has never handled a nullity case before and for this reason,
she referred Manalang to Atty. Neil Tabbu (Atty. Tabbu). She claimed that Manalang insisted on
not appearing in the proceedings-something she did not take seriously as she advised Manalang
to talk to Atty. Tabbu instead.

The Integrated Bar of the Philippines Investigating Commissioner found that Atty. Buendia
violated Canon 1, Rule 1.01, and Canon 18, Rules 18.03 and 18.04, of the Code of Professional
Responsibility and recommended the penalty of disbarment for gross misconduct.

ISSUE: Whether or not respondent Atty. Buendia should be disbarred for her misrepresentations
and for deceiving her client.

RULING:

Yes. At all times, members of the legal profession must remain highly ethical and should
observe faithful compliance with the rules of the profession. Failure to dispense these duties
results in this Court's exercise of its ultimate power of disciplining errant members. This Court's
authority to discipline the members of the legal profession arises from its constitutional prerogative
to regulate the practice of law. Moreover, the "power to discipline attorneys, who are officers of
the court, is an inherent and incidental power in courts of record, and one which is essential to an
orderly discharge of judicial functions.”

Rule 138, Section 27 of the Rules of Court enumerates the grounds for disbarment or
suspension of lawyers:

SECTION 27. Attorneys removed or suspended by Supreme Court on what

grounds. - A member of the bar may be removed or suspended from his office as attorney
by the Supreme Court for any deceit, malpractice, or other gross misconduct in such office,
grossly immoral conduct, or by reason of his conviction of a crime involving moral
turpitude, or for any violation of the oath which he is required to take before the admission
to practice, or for a willful disobedience of any lawful order of a superior court, or for
corruptly or willful appearing as an attorney for a party to a case without authority so to
do. The practice of soliciting cases at law for the purpose of gain, either personally or
through paid agents or brokers, constitutes malpractice.

The duty of a lawyer to uphold the Constitution, obey the laws of the land, and promote respect
for law and legal processes36 demands that he or she shall "not engage in unlawful, dishonest,
immoral or deceitful conduct."

4
Case # 25:
Divine Grace P. Cristobal Vs. Atty. Jonathan A. Cristobal
A.C. No. 12702. November 10, 2020
FACTS:

Divine and Atty. Cristobal were married and were blessed with four children. They did not
encounter any major marital problem during the early years of their married life. However, Atty.
Cristobal's behavior changed when he became a lawyer. He became abusive and irresponsible
towards his family and subjected Divine to verbal, emotional, psychological, and physical abuse.
Divine described six particular instances of such abuse. Divine filed with the Office of the
Provincial Prosecutor of Ilagan, Isabela a Complaint against Atty. Cristobal for violation of the
Anti-Violence Against Women and Their Children Act of 2004 (AVAWC) on December 14, 2009.
Pictures of her black (right) eye, the police blotter, and a medico-legal report were attached to the
instant disbarment complaint.

With Atty. Cristobal's failure to refute and disprove Divine's allegations, coupled with a
pending criminal case filed against him, the IBP-BOG found him guilty of violating Canons 1 and
7 of the CPR and recommended Atty. Cristobal's disbarment.

ISSUE: Whether Atty. Cristobal is guilty of violation of the Code of Professional Responsibility.

RULING:

Yes. This Court has emphasized the need to regulate the legal profession with the goal of
raising the standards of the legal profession, improving the administration of justice, and efficiently
discharging one's public responsibility as an officer of the courts. This Court's power to purge the
legal profession of people who do not exemplify the traits of honesty, integrity, and good moral
character is necessary to promote the public's faith in the legal profession. Otherwise, the integrity
of the judicial system is suspect since lawyers are the bridge between the lay and the courts.

The instant administrative case is hinged on Atty. Cristobal's violent and abusive behavior
towards his wife, Divine. The dismissal of the criminal case filed by Divine against him does not
exculpate him from administrative liability. While We correct Divine's allegation that a
preponderance of evidence is needed in administrative cases, this Court nevertheless finds Atty.
Cristobal guilty under Rule 1.01 for unlawful conduct based on substantial evidence - that which
is more than a mere scintilla but is such relevant evidence as a reasonable mind might accept as
adequate to support a conclusion.

Atty. Cristobal's violence towards his spouse shows his lack of respect for the sanctity of
marriage. It is violative of his legal obligation to respect Divine.73 Even negating their relationship
as husband and wife, Atty. Cristobal's actions may clearly be subject of a criminal proceeding -
had it not been for Divine's desistance. Divine's alleged attempts to reconcile with Atty. Cristobal
will not erase the fact that Atty. Cristobal did not conduct himself in the manner required of him
as a member of the Bar.

WHEREFORE, premises considered, respondent Atty. Jonathan A. Cristobal is found

GUILTY of violating Rules 1.01 and 7 .03 of the Code of Professional Responsibility, and is hereby
SUSPENDED for a period of three (3) months from the practice of law, with a WARNING that a
repetition of the same or similar offense will warrant a more severe penalty.

5
Case # 26:
Edmundo Jose T. Buencamino vs. People of the Philippines and Sandiganbayan
G.R. Nos. 216745-46, November 10, 2021

FACTS:

Petitioner was charged with violation of Section 3(e) of R.A. 3019, by ordering the
apprehension and impounding of the delivery trucks of the Rosemoor Mining and Development
Corporation (a corporation duly awarded by the Department of Environment and Natural
Resources (DENR) through the Mines and Geosciences Bureau, a permit to conduct mining
operations) allegedly for failure to pay the "pass way fee" imposed by the accused on all the
delivery trucks that pass within the territorial jurisdiction of San Miguel, Bulacan, said accused
knowing fully well that the said collection was not legally sanctioned by any resolution or
ordinance, having been declared by the Sangguniang Panlalawigan, Malolos, Bulacan, to be null
and void, being an ultra vires act.
In finding petitioner guilty, the Sandiganbayan found that all the elements of unlawful acts
penalized under Section 3(e) were proven by the prosecution, and held that petitioner did cause
undue injury to Constantino, RMDC, and the government, through acts that were attended by
evident bad faith and gross inexcusable negligence.
Petitioner now seeks the reversal of his conviction on the following errors: (1) he was
convicted based on documentary evidence which were mere photocopies despite petitioner's
objection; (2) his conviction infringed upon the fundamental rule that the prosecution must prove
the accused's guilt beyond reasonable doubt; and (3) he was convicted of a manner of
commission of Section 3(e) of R.A. 3019 which was not alleged in the Informations, in violation of
his right to be informed of the nature of the accusation against him.

ISSUE: Whether the Sandiganbayan erred in convicting petitioner of two counts of violation of
Section 3(e) of R.A. 3019.

RULING:

Yes. In all criminal cases, the prosecution is burdened with the duty of establishing with
proof beyond reasonable doubt the guilt of an accused. Where there is reasonable doubt, acquittal
must then follow, for all accused are presumed innocent until the contrary is proved.

Even without the glaring variance between the modality of commission which petitioner
was charged with and the one he was convicted with, the Court remains unconvinced that
petitioner's conviction is in order.

First, several documentary evidence upon which the prosecution relied for establishing
petitioner's guilt were correctly objectionable for being hearsay evidence, and are therefore
inadmissible. The Best Evidence Rule requires that the original document be produced whenever
its contents are the subject of inquiry, except in certain limited cases laid down in Section 3 of
Rule 130 of the Revised Rules of Evidence. Therefore, since the documents offered for the truth
value of their contents, were mere photocopies, these documents are inadmissible for being
hearsay and for failing to comply with the Best Evidence Rule.

Second, even if the Court accords admissibility to the prosecution's core documentary
evidence, the Court finds that they nevertheless fall short of persuading that petitioner's act of
imposing the pass way fees was attended by evident bad faith. Contrary to the summary finding
that petitioner knew that the said Resolution had been earlier revoked, and nevertheless persisted
in imposing the pass way fees said resolution imposed, petitioner was consistent and unwavering
in his denial that at the time he allowed the imposition of said fees, he was under the assured
information from both the Municipal Treasurer and the Sangguniang Bayan Secretary that said
resolution subsisted and was in force. Both on direct and cross examination, petitioner's testimony
maintained that he was not aware of the revocation.

6
Case # 27:
Heirs of Enrique Abad vs. Heirs of Jose Eusebio Abad Gallardo
G.R. No. 229070, November 10, 2020

FACTS:

Private respondents averred that upon the death of Sps. Miguel and Agueda, the land
covered by OCT P- 2769 was inherited by their three children Dionisio, Isabel and Enrique. They
all took possession of the land as co-owners.

Dionisio and Isabel alleged that an Extrajudicial Settlement and Waiver of Rights was
executed, adjudicating the land to Enrique, and by virtue thereof, OCT P-2769 was cancelled and
TCT T-131684 was issued in Enrique's name. Enrique manifested that he had entered into a
compromise agreement with his siblings Dionisio and Isabel.

Civil Case No. 0591 was finally dismissed on the manifestation of Dionisio and Isabel that
a compromise agreement had been forged between them and Enrique.

Respondents filed a motion for judgment on the pleadings, which was heard by the RTC
on March 1, 2016. In the hearing, the counsel for petitioners interposed no opposition to the
motion. Thereafter, the parties submitted their respective memoranda.

RTC found that judgment on the pleadings was proper and res judicata attached in the
present case in view of the proceedings in the earlier Civil Case No. 0591, which the RTC took
judicial notice of.

ISSUE: Whether the RTC erred finding that there is res judicata.

RULING:

The RTC erred in finding that res judicata attached in the instant case because there was
no judgment on the merits in Civil Case No. 0591. Since no compromise agreement was filed with
the RTC and formed part of the records of the prior case, there was no compromise agreement
that was ever judicially approved and no judgment thereon was entered in the prior case. Thus,
there was no judgment on the merits in the prior case. Without a judgment on the merits in the
prior case, the rule of res judicata was incorrectly applied by the RTC in this case.

There is also no identity of causes of action in the prior case and in the present case.
While the prior case concerned the ownership of the subject lot, the present case does not only
involve said cause of action, but also possession and consignation.

7
Case # 28:
Enano-Bote vs. Alvarez, Centennial Air, Inc. and Subic Bay Metropolitan Authority
G.R. No. 223572, November 10, 2020

FACTS:

Palawan Gov. Jose Alvarez has been ordered by the Court of Appeals to reimburse his
former corporate associates about $165,000 in unpaid rental and airport fees incurred at the Subic
free port zone by his Lear jet fleet. As well, Alvarez was ordered to reimburse P300,000 in moral
damages and another P200,000 in lawyer’s fees meted by the court against former Centennial
Air chief executive, Jennifer Enano-Bote. The monetary penalties stem from Alvarez’s troubled
charter jet company, Centennial Air, which has racked up about $165,000 in unpaid rental and
airport fees, excluding interest, since 1999. Subic Bay Metropolitan Authority sued the entire
Centennial Air board, prompting Enano-Bote and her fellow incorporators/directors to implead
Alvarez as third-party defendant, claiming Alvarez had already acquired ownership of Centennial
Air when it leased a hangar in Subic in 1999. After a decade and a half of litigation, the Court of
Appeals upheld SBMA’s monetary claims against the Centennial Air officers, subject to Alvarez,
who is more successful in his BMW, Kia and Peugeot dealerships, reimbursing EnanoBote and
company. CA ruled that Alvarez was “in bad faith” for not updating Centennial Air’s incorporation
papers when it leased a building in Subic, to the prejudice of the original incorporators who also
had to suffer a criminal case from the Social Security System for Centennial Air’s non-payment of
contributions.

ISSUE: Whether the CA committed an error of law in applying the trust fund doctrine to make
petitioners personally and solidarily liable with CAIR for the unpaid rentals claimed by SBMA
against CAIR because of their supposedly unpaid subscriptions in CAIR's capital stock.

RULING:

The trust fund doctrine or theory has been, perhaps, most often applied to the case where
a creditor of an insolvent corporation seeks to compel a stockholder to pay a balance claimed to
be due on stock for which the par value has never been paid to the corporation

It is clear that a corporate creditor cannot immediately invoke the trust fund doctrine to
proceed against unpaid subscriptions of stockholders of the debtor corporation without alleging
and proving the corporation's insolvency or any of the other acceptable grounds where the trust
fund doctrine, theory or principle has been applied. The observation that a corporation has the
beneficial or equitable as well as the legal title of its capital stock and is in business to make
money for itself and its stockholders and not for its creditors is well-taken. As well, the capital
stock of a corporation is a trust to be managed during its corporate life for the benefit of
stockholders. It is only in the event of its dissolution or insolvency, does the capital stock become
a trust fund for the benefit of its creditors.

Unfortunately, SBMA has not even pleaded either insolvency of CAIR or its dissolution.
SBMA failed to either allege or prove any of the two grounds recognized in Halley when the trust
fund doctrine may be applied to compel the stockholders to contribute to the payment of CAIR' s
debts by compelling them to pay the unpaid balances upon their subscriptions. The CA miserably
failed to identify the salient facts of the case constituting the specific ground to justify the
application of the trust fund doctrine.

With the Court's finding that the CA erred in applying the trust fund doctrine to make the
stockholders liable to SBMA for their unpaid subscriptions to the extent of CAIR unpaid obligations
to SBMA, and without any evidence to controvert the total amount of US$163,341.89, plus legal
interest, adjudged by the lower courts in favor of SBMA, only CAIR should be solely liable therefor.
The third-party complaint filed by petitioners against Alvarez should also be dismissed with the
award of damages in favor of petitioners vacated.

8
Case # 29:
The Department of Agrarian Reform Employees Association vs. CA
G.R. No. 217285, November 10, 2020

FACTS:

Department of Agrarian Reform (DAR) Secretary Rene Villa (Secretary Villa) and the
DAREA executed a Collective Negotiation Agreement (CNA). Pursuant to this CNA, the DAR
Regional Office No. 02 (DAR-R02) released a total of P6,598,000.00 to its officials and employees
as incentives for accomplishing their targets from 2008 to 2009: P1,894,000.00 for January to
June 2008; P1,584,000.00 for January to June 2009; and P3,120,000.00 for October to December
2009. These disbursements were, however, disallowed. The COA Audit Team found that the CNA
Incentives were illegally charged against the Comprehensive Agrarian Reform Program (CARP)
Fund or Fund 158 in violation of Section 4(3) of Presidential Decree (PD) No. 144514 or the
"Government Auditing Code of the Philippines," stating that "[t]rust funds shall be available and
may be spent only for the specific purpose for which the trust was created or the funds received."

The COA affirmed that the CARP Fund is a special fund, similar to a trust fund, which is
segregated for a specific purpose. As such, it should be used solely for the purpose for which it
was created. Any unused balance from the fund cannot be used for another purpose by the
agency because it is required to be transmitted to the general funds of the government. The COA
concluded that the CNA Incentives cannot be directly sourced from the CARP Fund. The DAR-
R02 officers and employees, who approved and release the CNA Incentives were then held
solidarily liable to return the disallowed amounts. The other recipients, on the other hand, were
held liable only up to the amounts that they received pursuant to the principle of solutio indebiti.

The DAR-R02 did not question the COA Decision. This prompted the DAREA,
representing its members who are rank-and-file employees, to seek relief from this Court,
imputing grave abuse of discretion on the part of the COA. The DAREA insists that the CNA
Incentives can be derived from the CARP Fund savings following DBM Undersecretary for
Operations, Mario L. Relampagos, and DBM Secretary Rolando G. Andaya, Jr., stating that the
CARP Fund is considered "consolidated and operationally one" with Fund 101 or the DAR's
general fund for use in pursuit of CARP outputs and objectives that includes payment of salaries,
wages, and MOOE. The DAR.EA also argues that it will be "grossly unfair, unjust, and inequitable"
to require its members to refund the benefits that they received in good faith.

ISSUE: Whether the disbursements were properly disallowed by the COA for being illegally
sourced from the CARP Fund.

RULING:

Yes. Indeed, the CARP Fund is a special fund created under EO No. 229, particularly to
cover the cost of the CARP. As such, it should be used exclusively for its avowed purpose. The
rationale behind the restriction on the use of special funds is to deter abuse in their disposition.
Any attempt to appropriate funds for another reason, no matter how noble or beneficial, would be
struck down as unconstitutional.

Only savings generated after the signing of the CNA may be used for the CNA Incentive.
The CNA Incentives shall be sourced only from the savings generated during the life of the CAN.
Further, the management and the accredited employees' organization are obliged to identify in
the CNA the cost-cutting measures and systems improvement to be jointly undertaken by them
to achieve effective service delivery and agency targets at lesser cost. Strict compliance with the
DBM policy and guidelines was also provided for its implementation.

Considering the explicit rules, the Court finds no grave abuse of discretion on the part of
the COA in upholding the NDs. As the COA observed, none of these requirements were complied
with in the DAR-R02's release of the CNA Incentives in 2008 and 2009.

9
Case # 30:
Naomi K. Torreta and Jaime M. Lopez Vs. Commission on Audit
G.R. No. 242925, November 10, 2020

FACTS:

NDA is a government-owned and controlled corporation and was created to be the central
policy determining and directing body tasked to ensure the accelerated development of the
Philippine dairy industry. Under the NDA's Dairy Multiplier Farm Program (Program), NDA is to
distribute imported, mature female dairy animal to eligible and qualified participants, who, within
a certain period of time, would make a repayment-in-kind: For every one mature female dairy
animals, payment shall be by way of two mature female dairy animals with similar or higher dairy
blood composition and with condition similar to the animals originally received by the Multiplier
Farm Partner from the NDA.

NDA found Hapicows qualified for the program and a MOA was executed. COA,
thereafter, conducted a post-audit on NDA's Program. It issued a Notice of Disallowance (ND)
stating that the dispersal of the 150 heads of dairy animals to Hapicows was irregular as it lacks
proper evaluation and supporting documents holding herein petitioners, together with Molina,
President-CEO of Hapicows, Orkhan H. Usman, NDA Former Administrator and Suplicio Bayawa
Jr., NDA-Operations Department OIC, liable as signatories of the MOA.

ISSUE: Whether COA committed grave abuse of discretion amounting to lack or in excess of
jurisdiction when its audit was wrongly based on its perceived evaluation process instead of what
the NDA, as the country's sole dairy authority, had observed and implemented.

RULING:

No. Given the scope of the audit made, COA was clearly justified in requiring the
submission of the additional documents which consisted mainly of the documents listed under
Section 3.2 of the MOA, in order to determine Hapicow' s compliance with its duties and
obligations under the Program.

On this score, it is well to note that the extent of the auditor's review does not unnecessarily
encroach upon the administrative functions of the NDA. For one, no less than the Constitution
has vested COA with the exclusive authority to define the scope of its audit and examination, and
establish techniques and methods required therefor. As such, it is vested with the broadest
latitude to discharge its role as the guardian of public funds and property and is accorded the
complete discretion to exercise its constitutional duty.

Furthermore, the action taken by COA auditor of monitoring the progress of the project,
with a view of ascertaining if the public assets were utilized economically, efficiently and
effectively; and evaluating the adequacy of controls over the account, was completely in accord
with the following examination standards and objectives prescribed under Sections 55 and 58 of
P.D. No. 1445, otherwise known as the Government Auditing Code of the Philippines.

In view of the foregoing, We find that COA acted within its mandate. It did not act beyond
what was expected of it to do in audit. The Court is mindful that the implementation of the Program
and the enforcement of the provisions of the subject MOA are functions which are lodged primarily
in the NDA as the central policy in determining and directing the body of the Philippine dairy
industry. However, in keeping with the COA's role as the watchdog of the financial operations of
the government and the guardian of the people's property, it was well-within the scope of the
respondent's audit power to enjoin the submission of the documentary requirements under
Section 3.2 of the MOA for audit purposes.

10
Case # 31:
Office of the Court Administrator vs. Judge Antonio Reyes
A.M. No. RTJ-17-2506, November 10, 2020

FACTS:

President Rodrigo Roa Duterte publicly named seven judges who were allegedly involved
in illegal drugs. Only four of the named judges were sitting judges at the time of the
announcement, Judge Exequil L. Dagala, Judge Adriano S. Savillo, Judge Domingo L. Casiple,
Jr., and herein respondent Judge. Justice Abad rendered a report regarding Judges Dagala,
Casiple and Savilla finding no evidence linking them to illegal drugs. As regards the respondent
judge, Justice Abad submitted his report recommending the institution of an administrative case
against the respondent judge.

It was found that a certain Paul Black submitted an Affidavit stating that he gave Norma
Domingo P50,000.00 for the respondent judge in exchange for the acquittal of the charge against
his wife, Marina Black. Also, Melchora executed an Affidavit stating that Norma visited her offering
to work for her release for P100,000.00 to be paid to the respondent judge. Melchora's family
bargained for P50,000.00 and gave the said amount to Norma. Thereafter, Melchora was
acquitted from her criminal charge. Norma requested Melchora to accompany her in delivering to
the respondent judge the amount of P300,000.00 paid by Richard Lagunilla in consideration of
the acquittal of the criminal charge of the wife. An anonymous letter was also sent to Justice Abad
stating that four lawyers who are close with the respondent judge obtained acquittals for their
client. These allegations were confirmed by the judicial audit since cases of Marina Black, Norma
Domingo, Melchora Nagen and Wilhelmina Lagunilla were all acquitted of their criminal charges.

The judicial audit conducted by the OCA found questionable acquittals and dismissals of
the cases against the accused. One such questionable acquittal was the case of accused Jericho
Cedo in where the accused was acquitted on his second motion for reconsideration. Respondent
judge denied all the charges against him, that there is no factual or legal basis for any
administrative charge against him. On the charge of gross ignorance of the law, he claimed that
the prohibition on plea bargaining has already been declared unconstitutional by this Court.

ISSUE: Whether respondent judge is administratively liable for gross ignorance of the law, gross
misconduct and violation of Canons 1, 2, and 3 of the New Code of Judicial Conduct.

RULING:

Yes. In administrative proceedings for. disciplinary sanctions against judges, the quantum
of proof necessary is substantial evidence or such relevant evidence as a reasonable mind might
accept as adequate to support a conclusion. A review of the records of this case leads Us to rule
that there is substantial evidence in holding respondent judge administratively liable. As such, this
Court see no compelling reason to deviate from the findings of the OCA.

Respondent judge has been designated as the presiding judge of RTC of Baguio City,
Branch 61, which handles drug cases. It is presumed, even expected that he is well-versed and
well-informed of the rules of procedure and the provisions of the law, especially R.A. 9165. Thus,
his penchant for disregarding rules show that he was motivated by bad faith and corruption.
Section 23 of R.A. 9165 prohibits plea bargaining regardless of the imposable penalty.

Section 2, Rule 52 of the Rules of Court mandates that no second motion for
reconsideration of a judgment or final resolution by the same party shall be entertained. Despite
this provision, respondent judge still entertained the second motion for reconsideration in Criminal
Case No. 32499-R, and even acquitted the accused.

A judge is a visible representation of the law and justice. He should be beyond reproach
and must conduct himself with the highest integrity. Even a suspicion of illegal dealings
concerning the judge loses the public's faith and confidence to the judiciary.

11
Case # 32:
Confederation for Unity, Recognition and Advancement of Government
Employees vs. Secretary of DBM and Secretary of DSWD
G.R. No. 200418, November 10, 2020

FACTS:

The Department of Budget and Management issued Circular Letter, with subject
"Reminder on the Observance of the Guidelines on the Grant of the Collective Negotiation
Agreement (CNA) Incentive." Its Section 3 .0 reiterates Budget Circular No. 2006-1 by mentioning
the Senate and the House of Representatives' Joint Resolution No, 4, series of 2009, approving
the grant of CNA incentives to both management and rank-and-file employees.

On October 26, 2011, Secretary Soliman issued a Memorandum authorizing the CNA
incentive grant of P10,000.00, "to be paid to existing regular, contractual and casual employees"
and released not later than October 28, 2011. On December 3, 2011, she issued another
Memorandum for a second tranche of CNA incentive, worth P20,000.00, to be released on or
before the third week of December 2011. On December 26, 2011, the DBM issued the assailed
Budget Circular No. 2011-5, which provides the supplemental policy and procedural guidelines
for the grant of CAN incentives. Among others, it set a P25,000.00 ceiling on the amount of the
CNA incentives for 2011.

On December 28, 2011, Social Welfare and Development Assistant Secretary Ma. Chona
0. David-Casis issued a Memorandum directing every employee to refund the CNA incentive
received in excess of P25,000.00 through salary deductions. Subsequently, she issued the
assailed January 20, 2012 Memorandum, which directed the employees to refund the P5,000.00
received in excess, and to sign the conforme form consenting to the refund, made through monthly
salary deductions of P500.00 for 10 months beginning February 2012. Aggrieved, the
associations filed this Petition for the Issuance of a Temporary Restraining Order/Writ of
Preliminary Injunction.

ISSUE: Whether or not the Memorandum directing the refund violates Section 4 of the General
Appropriations Act of 2011, which enumerates the allowed deductions from employees' salaries.

RULING:

This Court rules that petitioners have no vested rights to CNA incentives. Nonetheless,
under the circumstances of this case, the order to return the excess P5,000.00 received by the
affected employees was erroneous.

While the Department of Budget and Management can generally impose conditions for
the grant of CNA incentives, in this case, the conditions were imposed after the benefits had
already been released and received by the employees. The Department had not put in place a
ceiling on CNA incentives when the P30,000.00 CNA incentive-the total amount from the October
26, 2011 and December 3, 2011 memoranda issued by respondent Secretary Soliman-was
granted. Budget Circular No. 2011-5, which contains the P25,000.00 ceiling, was issued only on
December 26, 2011 and published only on February 25, 2012.210 Thus, the benefits had already
been vested in the employees' behalf.

Likewise, we confirm petitioners' argument that the January 20, 2012 Memorandum
directing the refund of CNA incentives paid violated Section 43 of the General Appropriations Act
of 2011. As petitioners had argued, the list of allowable salary deductions in the General
Appropriations Act does not include excess CNA incentives. We also note that the Memorandum
should not have been authorized only by the Assistant Secretary, but must also bear the signature
of approval and conforme of respondent Secretary Soliman. Thus, the January 20, 2012
Memorandum, which required employees of the Department of Social Welfare and Development
to refund the P5,000.00 excess through deductions from their salaries, is void.

12
Case # 33:
Salvacion C. Romo vs. Atty. Orheim T. Ferrer
A.C. No. 12833, November 10, 2020

FACTS:

Salvacion Romo engaged the legal services of Atty. Orheim Ferrer in prosecuting an
action for violation of BP 22 against Amada Yu. Thereafter, Amada settled the case and gave a
total amount of P375,000.00 to Atty. Ferrer. Yet, Atty. Ferrer remitted only P80,000.00 to
Salvacion. As such, Salvacion demanded from Atty. Ferrer the balance of P295,000.00. Atty.
Ferrer agreed to pay his obligation on or before October 15, 2012 and promised to deliver a land
title as collateral. However, Atty. Ferrer did not comply with his undertakings. Salvacion sent a
final demand letter to Atty. Ferrer but was ignored. Thus, Salvacion filed an administrative
complaint against Atty. Ferrer for failure to account the funds entrusted to him.

The Commission on Bar Discipline (the Commission) of the Integrated Bar of the
Philippines (IBP) recommended to suspend Atty. Ferrer from the practice of law for a period of
two years. The Commission noted that Atty. Ferrer abused his client's confidence, with evident
intent to misappropriate the funds. Atty. Ferrer admitted that he received P295,000.00 from
Amada but failed to substantiate his claim that he remitted the money to Salvacion's daughter.
The Commission also found that Atty. Ferrer voluntarily signed the memorandum of agreement
and cannot later assail it on the ground of threat or intimidation. The IBP Board of Governors
adopted the Commission's factual findings and recommendations.

ISSUE: Whether Atty. Ferrer guilty of breach of trust to his client Salvacion.

RULING:

A lawyer shall account for all money or property collected or received for or from the client.
The duty to render an accounting is absolute. The failure to do so upon demand amounts to
misappropriation which is a ground for disciplinary action not to mention the possible criminal
prosecution. Here, convincing evidence exists that Atty. Ferrer represented Salvacion in a criminal
case and that he received funds for her in the total amount of P375,000.00. However, Atty. Ferrer
remitted only P80,000.00 and unjustifiably refused to return the balance of P295,000.00, despite
repeated demands.

Verily, Atty. Ferrer breached Salvacion's trust when he failed to render an account of her
funds upon demand. In determining the imposable penalty against an erring lawyer, the purpose
of disciplinary proceedings must be considered, which is to protect the administration of justice
by requiring that those who exercise this important function shall be competent, honorable, and
reliable men in whom courts and clients may repose confidence.

The relationship between a lawyer and his client is highly fiduciary and prescribes on a
lawyer a great fidelity and good faith. The highly fiduciary nature of this relationship imposes upon
the lawyer the duty to account for the money or property collected or received for or from his
client. Thus, a lawyer's failure to return upon demand the funds held by him on behalf of his client,
as in this case, gives rise to the presumption that he has appropriated the same for his own use
in violation of the trust reposed in him by his client. Such act is a gross violation of general morality,
as well as of professional ethics.

13
Case # 34:
El Dorado Consulting Realty and Development Group Corp. vs. Pacific Union
Insurance Company
G.R. Nos. 245617 & 245836, November 10, 2020
FACTS:

Petitioner entered into an Owner-Contractor Agreement with ASPF Construction and

Development, Inc. for the construction of a seven-storey condominium hotel named "The Ritz"
located in Pampanga for a contract price of P170,000,000.00. ASPF Construction obtained a
Performance Bond from Pacific Union Insurance Company (PUIC) in the amount of P78,567,23
to guarantee compliance with all its obligations under the Owner-Contractor Agreement.

During the construction of the project, El Dorado sent several notices to ASPF
Construction for Warnings/Notices of Delayed Works, Site Safety Violation, Notices of Defect,
and Notices to Comply. El Dorado submitted a Notice of Claim to PUIC. It stated that ASPF
Construction has incurred substantial delay in the performance of its obligations which are all
events of default under the Owner-Contractor Agreement. Hence, El Dorado requested that PUIC
release the full amount of P98,209,039.20 under the Performance Bonds. But PUIC informed El
Dorado that the Performance Bonds were cancelled for non-payment of premiums.

Due to this, El Dorado filed a Request for Arbitration against PUIC before the Construction
Industry Arbitration Commission (CIAC). The CIAC held that it cannot grant El Dorado because
the latter is still liable to ASPF Construction for the 0.39% of the contract price. El Dorado will be
unjustly enriched at the expense of ASPF Construction if the same is granted. The CA agreed
that El Dorado is not entitled to reimbursement of rehabilitation and other prerequisite work
because the same is in the nature of actual damages that has to be proved.

ISSUE: Whether the CA correctly affirmed with modification the ruling of the CIAC.

RULING:

No. Jurisprudence has consistently held that for a court or an adjudicative body to have
authority to dispose of the case on the merits, it must acquire, among others, jurisdiction over the
subject matter. Jurisdiction over the subject matter is the power to hear and determine the general
class to which the proceedings in question belong; it is conferred by law and not by the consent
or acquiescence of any or all of the parties or by erroneous belief of the court that it exists. Thus,
when a court has no jurisdiction over the subject matter, the only power it has is to dismiss the
action.

It is clear from the Owner-Contractor Agreement that the Performance Bonds were not
made an integral part of the same. Even though the Performance Bonds made reference to the
Owner-Contractor Agreement, nevertheless, the arbitration clause, which is the basis for CIAC to
take cognizance of the case, was only signed by El Dorado and ASPF Construction. PUIC is not
a signatory of the Owner-Contractor Agreement. Thus, only El Dorado and ASPF Construction,
the parties to the Owner-Contractor Agreement who agreed to the arbitration clause, can invoke
the same. Not being a party to the Agreement, it is not proper for PUIC to be impleaded in the
arbitration proceedings before the CIAC. This is consistent with the basic principle that contracts
shall take effect only between the parties, their assigns, and heirs.

Since the CIAC has no jurisdiction over PUIC, the CIAC cannot rule on the liability of PUIC
over the Performance Bonds. Petition is denied for lack of jurisdiction on the part of the CIAC.

14
Case # 35:
Nacilla vs. MTRCB
G.R. No. 223449, November 10, 2020

FACTS:

Petitioners Mina C. Nacilla (Nacilla) and Roberto C. Jacobe were former employees of the
MTRCB. Nacilla held the position of Administrative Officer V with Salary Grade (SG) 18 while
Jacobe, who passed away on May 21, 2011, was formerly employed as Secretary I or
Administrative Assistant I with SG 7.

The controversy arose from a Collective Negotiation Agreement (CNA) which the MTRCB
and the MTRCB Employees Association executed on October 29, 2004. It appears that Jacobe
was assigned to register the 2004 CNA with the CSC and for which he brought copies to the CSC
Personnel Relations Office (CSC-PRO). He was, however, informed that the 2004 CNA could not
be registered because it was not properly ratified by the MTRCBEA and was not submitted for
registration within 30 days from its execution. CSC-PRO advised Jacobe to cause the signing of
the 2004 CNA anew, post a copy in conspicuous places for at least seven days and ratify it again
before re-submitting it to the CSCPRO for registration. Jacobe printed four copies of the CNA and
executed an Affidavit.

Laguardia called for an investigation of the matter. As the MTRCB Chairperson, she
created an Investigating Committee to look into the alleged falsification of official documents and
to recommend the appropriate action. The Investigating Committee released its Report and
Recommendation dated December 4, 2007 where petitioners were found to be responsible for
the falsification of the 2005 CNA or at least making it appear as a new CNA covering a different
period in order to secure benefits from the MTRCB. Laguardia then formally charged petitioners
for violating civil service rules on dishonesty, grave misconduct and falsification of official
documents. Eventually, the Adjudication Committee rendered a Decision finding petitioners guilty
of dishonesty and falsification of public document and imposed the penalty of dismissal from
service. Petitioners appealed to the CSC but dismissed it for being filed out of time. CA affirmed
CSC.

ISSUE: Whether the Adjudication Committee had the power to dismiss petitioners.

Yes. Petitioners argue that the Adjudication Committee that Laguardi created had no
power or authority to order their dismissal. For petitioners, it is only the entire Board that has the
power to suspend or dismiss any employee for cause. This is error.

Section 16 of the MTRCB Charter provides that the MTRCB "shall have the power to
suspend or dismiss for cause any employee and/or approve or disapprove the appointment,
transfer or detail of employees." Further, Section 3(j) of P.D. No. 1986 states that the Board can
"prescribe the internal and operational procedures for the exercise of its powers and functions as
well as the performance of its duties and responsibilities, including the creation and vesting of
authority upon sub-committees of the BOARD for the work of review and other related matters."
The MTRCB was likewise authorized to promulgate rules and regulations for the implementation
of P.D. No. 1986 and its purposes and objectives.

The MTRCB, given the considerable number of movies and television shows, among
others, that it has to review, and the cases it has to hear for violations of its charter, had divided
the work amongst themselves by creating adjudication committees, with the designation of
members being given to the Board's Chairperson. This procedure was followed in hearing an
administrative case against its employees.

Petition is denied.

15
Case # 36:
Gomez vs. People of the Philippines
G.R. No. 216824, November 10, 2020

FACTS:

Gina Gomez was prosecuted for bribery. The case was tried in court and after the
prosecution and Gomez presented their respective pieces of evidence, the case was submitted
for decision. But instead of promulgating a decision, the trial court issued an order dismissing the
case and acquitting Gomez on the ground that the Information was only signed by an Assistant
City Prosecutor and there was no showing that the Information was approved by the City
Prosecutor. As such, the prosecutor who filed the Information had no authority to file the
Information. According to the trial court, the absence of the approval and signature of the City
Prosecutor in the Information is a jurisdictional defect which cannot be cured. The bases of the
trial court’s decision were (1) Sections 3d and 9, Rule 117 of the Rules of Court which provide
that an Information may be quashed if the prosecutor who filed it had no authority to do so, and
(2) the 1951 case of Villa vs. Ibanez (88 Phil. 402) which had been affirmed by the Supreme Court
numerous times.

ISSUE: Whether a trial court has no jurisdiction over a criminal case if the Information lacks on
its face (1) the word “approved” and (2) the signature of the city prosecutor (or the provincial or
chief state prosecutor).

RULING:

No. Firstly, there is no law that requires that an Information filed must be signed by the
provincial, city, or chief state prosecutor in order for trial courts to acquire jurisdiction over a
criminal case. The ruling in Villa vs. Ibanez which states that the absence of the signature of a
city, provincial, or chief state prosecutor results in a jurisdictional defect is unconstitutional. Only
a law may confer jurisdiction to courts of law. Once jurisdiction is conferred, the jurisdiction does
not cease simply because the prosecutor who filed the Information had no authority. At worst, the
absence of authority on the part of the prosecutor who filed the Information only gives rise to a
question on his standing in court.

The Supreme Court also emphasized that to allow the ruling in Villa vs Ibanez to subsist
is tantamount to judicial legislation – violation of the separation of powers. The court requiring that
a city prosecutor, provincial prosecutor, or chief state prosecutor must first sign an Information
filed before the court can acquire jurisdiction is improper because only law may confer jurisdiction
and its requirements.

Secondly, this defect (which is just a formal defect not a jurisdictional defect) must be
raised by the Accused prior to entering his or her plea. Once a plea is made, any defect in the
Information is deemed waived except those that pertain to Sections 3a (facts charged do not
constitute an offense), 3b (lack of jurisdiction over the offense), 3g (prescription), and 3i (double
jeopardy) of Rule 117 of the Rules of Court.

16
Case # 37:
Dayowan Transport Services or Ringo B. Dayowan vs. Dionito D. Guarino, Jr.
G.R. No. 226409, November 10, 2020

FACTS:

Dionito D. Guarino (Dionito) was employed as a jeepney driver by Ringo B. Dayowan,

doing business under the name of Ringo B. Dayowan Transport Services. Compensated on
boundary basis, Dionito was required to drive Ringo's jeepney five times a week on a ten to
twelve-hour schedule. Dionito earned around P600.00 to P800.00 per day. Since the start of his
employment on July 9, 2009, Dionito was required to deposit to Ringo P20.00 per day for his
Social Security System (SSS) contribution. Sometime in March 2014, Dionito discovered that
Ringo was not remitting his daily deposit to the SSS. On March 5, 2014, Dionito confronted Ringo
about it. Ringo then told Dionito: "Kung ayaw mo ng patakaran dito, wag ka na bumiyahe."The
following day, Dionito reported to work. However, Ringo informed him that he is no longer allowed
to drive the jeepney. Ringo also asked Dionito to sign a resignation letter. Dionito refused and
insisted that he still wants to continue working.

Ringo claims that Dionito voluntarily quit his job. To show that Dionito's allegation is
baseless, Ringo submitted in evidence SSS receipts proving that the SSS contributions of Dionito
and of all seven other drivers were duly remitted. According to Ringo, Dionito surrendered the
jeepney with plate number PKN 375 and its keys on March 4, 2014 because he did not like the
imposed increase on the boundary rate. Ringo asked Dionito to make a resignation letter but
Dionito refused, saying that a resignation letter is unnecessary. Then, Ringo asked Dionito how
would he pay for his unremitted boundary and cash advances in the total amount of P19,500.00
reflected in the PUJ Daily Logbook for PUJ PKN 375. Dionito told Ringo to just consider the
amount as financial assistance. Insulted, Ringo immediately sought legal assistance. The Labor
arbiter dismissed Dionito’s complaint for illegal dismissal because Dionito voluntarity resigned
when he refused to pay the P20.00 increase in the boundary rate per day. NLRC affirmed the LA
decision. CA rulled that Dionito had been illegally dismissed since it found that the record is devoid
of proof that Dionito was given the requisite notices before his employment was terminated.

ISSUE: Whether the CA erred in ruling that Dionito had been illegally dismissed.

RULING:

Yes. For the resignation of an employee to be a viable defense in an action for illegal
dismissal, an employer must prove that the resignation was voluntary, and its evidence thereon
must be clear, positive, and convincing. The employer cannot rely on the weakness of the
employee's evidence.

In this case, Ringo, as an employer, was able to present sufficient evidence to establish
that Dionito resigned as Ringo's jeepney driver. As borne out by the "Sumbong" and the
"Kasunduang Pag-aayos", Dionito did not want to comply with the increased boundary rate
imposed by Ringo. Both the "Sumbong" and the "Kasunduang Pag-aayos" are plainly worded and
written in simple language, which a person of ordinary intelligence can discern the consequences
thereof. The NLRC correctly found that the"Kasunduang Pag-aayos" is clear in its tenor and the
parties' intention does not require different interpretation. Hence, Dionito' s claim that he did not
understand the "Kasunduang Pag-aayos" is not to be believed.

By returning the jeepney and its keys, coupled with his non-payment of the adjusted
boundary rate, Dionito has opted to leave rather than stay employed where he believes that
personal reasons cannot be sacrificed for the favor of employment. Indeed, Dionito has resigned
from employment. Resignation - the formal renunciation or relinquishment of a position or office -
is the voluntary act of an employee compelled by personal reason(s) to dissociate himself from
employment. Like in this case of Dionito, resignation was done with the intention of relinquishing
an office, accompanied by the act of manifesting this intent.

17
Case # 38:
National Transmission Corporation Vs. Commission on Audit
G.R. No. 244193, November 10, 2020

FACTS:

Transco is a GOCC created in June 2001 by virtue of Section 18 of Republic Act No. (RA)
9136, otherwise known as the Electric Power Industry Reform Act (EPIRA). It assumed the
electrical transmission function of the National Power Corporation (NAPOCOR) and presently
operates NAPOCOR's nationwide electrical transmission and subtransmission system.

On various dates in 2010, Transco paid its officials extraordinary and miscellaneous
expenses (EME) pursuant to RA 9970 or the General Appropriations Act of 2010 (GAA). On June
1, 2011, Supervising Auditor Corazon V. Espafio (Supervising Auditor Espafio) and Audit Team
Leader Minerva T. Cabigting issued Notice of Disallowance (ND) which disapproved the
payments of EME in the amount of P1,841,165.44. The ND provides that payments of EME were
made on a commutable basis and were not supported by receipts.

Aggrieved, TransCo appealed the ND to the COA Corporate Government Sector (COA-
CGS). The Cluster Director granted the appeal and lifted the ND. COA disapproved and held that
a mere certification will not suffice to support a claim for reimbursement of EME as it is not a
document evidencing disbursement under COA Circular No. 89-300.

ISSUE: Whether or not the COA acted with grave abuse of discretion in ruling that Transco has
the burden of proof to show that payments were not made on a commutable basis, as it alleged.

RULING:

No. TransCo has the burden of proof to show that it is entitled to reimbursement of EME
incurred by its officials.

COA Circular No. 2006-001 prescribe the rules and regulations goveming the
disbursement of EME and other similar expenses to GOCCs/GFis and their subsidiaries. It aims
to regulate the incurrence of EME by the qualified officials of GOCCs/GFis and their subsidiaries
and ensure the prevention or disallowance of irregular, unnecessary, excessive, extravagant, or
unconscionable expenditures or uses of government funds. This breathes life to COA's
constitutional mandate as guardian of public funds, to promulgate accounting and auditing rules
and regulations in the exercise of its general audit power.

The claims for reimbursement of EME of GOCCs, like Transco, rest upon the existence of
sufficient proof of the expenditures incurred by the qualified officials such as receipts and/or other
documents evidencing disbursement. It is only when supporting documents are presented that
the GOCC can properly claim reimbursement of EME. Hence, it is incumbent upon Transco and
its officials, as claimants, to prove that all these requirements have been met before they can
properly claim reimbursement of their EME. It is an elementary rule that he who alleges a fact has
the burden of proving it.

In this case, TransCo's claim for reimbursement was not supported by any receipt from its
officials. The only document presented to substantiate the reimbursement claim was a
"certification.”

Clearly, a certification may or may not constitute an adequate proof of disbursement. To be

admitted as a sufficient evidence of payment, this certification presented by the GOCC must
establish "the paying out of an account payable," or a disbursement. It must reflect the transaction
details that are typically found in a receipt which is the best evidence of the fact of payment. It
must specify the nature and description of the expenditures, amount of the expenses, and the
date and place they were incurred.

18
Case # 39:
Erwin Torres vs. AAA
G.R. No. 248567, November 10, 2020

FACTS:

On October 14, 2012, Torres, the step-father of AAA, abused the latter helplessly inside
his room. Torres was then charged with Section 5(b) of R.A. 7610 before the trial court. AAA
claims that the abuse was not a one-time occasion. Nonetheless, Torres denied the said
allegations of AAA.

The RTC acquitted Torres for failure of the prosecution to prove his guilt beyond
reasonable doubt. The RTC was not convinced of the veracity of the testimony of AAA and held
that her statements fell short of the quantum of evidence required in the prosecution of criminal
cases. The RTC noted that AAA's testimony is replete with inconsistencies and lacks specific
details on how the acts of sexual abuse was committed by Torres. The RTC, likewise, found
conflicting statements between AAA' s affidavit and her direct testimony in court.

CA rendered a Decision annulling the ruling of the RTC. The CA found Torres guilty
beyond reasonable doubt of lascivious conduct under Section 5 (b) of R.A. 7610. According to
the CA, the prosecution proved all the elements of violation of Section 5(b) of R.A. 7610. Torres
committed lascivious conduct when he grabbed and mashed AAA's breasts. The CA found that
being AAA's stepfather, Torres exercises moral ascendancy over the former. AAA was only 12
years old at the time the incidents occurred.

ISSUE: Whether the CA violated Torres' right against double jeopardy when it convicted him for
lascivious conduct under Section 5(b) of R.A. 7 610 even if he was previously acquitted by the
RTC.

RULING:

Yes. Judgment of acquittal, whether ordered by the trial or the appellate court, is final,
unappealable, and immediately executory upon its promulgation. This iron clad rule has only one
exception: grave abuse of discretion that is strictly limited whenever there is a violation of the
prosecution's right to due process such as when it is denied the opportunity to present evidence
or where the trial is sham or when there is a mistrial, rendering the judgment of acquittal void.

Here, in setting aside Torres' acquittal, the CA reviewed the evidence presented by the parties
before the RTC. The CA held that the RTC mistakenly ruled that there were inconsistencies
between the affidavit and direct testimony of AAA. In other words, the CA concluded that the RTC
erred in acquitting Torres because of misappreciation of evidence. It is a settled rule that
misappreciation of the evidence is a mere error of judgment that does not qualify as an exception
to the finality-of-acquittal doctrine. An error of judgment is not correctible by a writ of certiorari.

In this case, the petition of AAA before the CA is bereft of any allegation, much less,
evidence that the prosecution's right to due process was violated or that the proceedings before
the RTC were a mockery such that Torres' acquittal was a foregone conclusion. It is immaterial
whether the RTC was correct in its assessment of the evidence leading to the acquittal of Torres.
The fact remains that Torres' right against double jeopardy already attached when the RTC
acquitted him. Hence, no amount of error of judgment will ripen into an error of jurisdiction that
would have allowed the CA to review the same through a petition for certiorari.

Petition for review on certiorari is granted.

19
Case # 40:
Philippine Wireless, Inc. and Republic Telecommunications, Inc. vs.
Optimum Development Bank
G.R. No. 208251. November 10, 2020

FACTS:

In August 1997, Philippine Wireless, Inc. entered into a Credit Agreement with respondent
Capitol Development Bank availing a ₱20,000,000.00 credit facility from Capitol secured by the
corporate suretyship of Republic Telecommunications, Inc. In the Continuing Suretyship
Agreement Retelco executed, it undertook to jointly and severally pay with PWI the obligation PWI
may incur pursuant to the Credit Agreement.

As of June 10, 1998, PWI’s unpaid loans amounted to ₱23,363,378.73. Despite repeated
demands, however, PWI and Retelco failed to pay their outstanding obligations. Thus, Capitol
instituted a Complaint for collection of a sum of money in the RTC rendering a decision in favor
of Capitol.

PWI and Retelco filed an appeal under Rule 41 of the Rules seeking to reverse and set
aside the RTC Decision. While the appeal was pending before the CA, PWI and Retelco instituted
a petition for corporate rehabilitation with the RTC of Makati (Rehabilitation Court). On August 24,
2009, the Rehabilitation Court issued a Stay Order.

ISSUE: Whether the Stay Order issued by the rehabilitation court suspended the appellate
proceedings assailing the Decision of the RTC.

RULING:

No. The collection case instituted by creditor against the principal debtor and its surety
may proceed despite a stay order issued by the rehabilitation court.

At the time the petition for rehabilitation of PWI and Retelco was initiated and the Stay
Order dated August 24, 2009 was issued, the rules governing corporate rehabilitation was the
2008 Rehabilitation Rules. Section 7, Rule 3 of the 2008 Rehabilitation Rules which enumerates
the consequences of the issuance of a stay order, in part, provides:

“The issuance of a stay order does not affect the right to commence actions or
proceedings insofar as it is necessary to preserve a claim against the debtor.”

It is clear that the Court recognizes in the 2008 Rehabilitation Rules the right of creditors
to commence actions or proceedings necessary to safeguard its claim against distressed
corporations like PWI and Retelco despite a stay order.

Though the petition for rehabilitation of PWI and Retelco was filed under the 2008
Rehabilitation Rules, the significant changes incorporated in R.A. 10142 or the Financial
Rehabilitation and Insolvency Act (FRIA) of 2010 may be applied to resolve the present petition.
To integrate the changes introduced in the FRIA, the Court enacted the Financial Rehabilitation
Rules of Procedure (2013 FRIA Rules) on August 27, 2013. Section 2, Rule 1 of the 2013 FRIA
Rules provides that it shall govern rehabilitation cases already pending, except when its
application would not be feasible or would work injustice.

Therefore, the retroactive application of the pertinent provisions of the 2013 FRIA Rules
is permitted in resolving the issue on the non-suspension of the appellate proceedings in the CA
despite the issuance by the rehabilitation court of a stay order during the pendency of the appeal.

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