FLORES vs.
COMELEC Case Digest the RTC in a protest appealed to it from
FLORES vs. COMELEC
184 SCRA 484
Facts: Petitioner Roque Flores was
declared by the board of canvassers as
having the highest number of votes for
kagawad on the March 1989 elections,
in Barangay Poblacion, Tayum, Abra,
and thus proclaimed punong barangay
in accordance with Section 5 of R.A.
6679. However, his election was
protested by private respondent
Rapisora, who placed second in the
election with one vote less than the
petitioner. The Municipal Circuit Trial
Court of Tayum sustained Rapisora and
installed him as punong barangay in
place of the petitioner after deducting
two votes as stray from the latters total.
Flores appealed to the RTC, which
affirmed the challenged decision in toto.
The judge agreed that the four votes
cast for Flores only, without any
distinguishing first name or initial, should
all have been considered invalid instead
of being divided equally between the
petitioner and Anastacio Flores, another
candidate for kagawad. The total
credited to the petitioner was correctly
reduced by 2, demoting him to second
place.
The petitioner went to the COMELEC,
which dismissed his appeal on the
ground that it had no power to review
the decision of the RTC, based on
Section 9 of R.A. 6679, that decisions of
(Public Officer, Appointments, CSC)
the municipal trial court in barangay
elections on questions of fact shall be
final and non-appealable. In his petition
for certiorari, the COMELEC is faulted
for not taking cognizance of the
petitioners appeal.
Issue: Whether or not the decisions of
Municipal or Metropolitan Courts in barangay
election contests are subject to the exclusive
appellate jurisdiction of the COMELEC
considering Section 9 of R.A. No. 6679?
Held: The dismissal of the appeal is justified, but
on an entirely different and more significant
ground, to wit, Article IX-C, Section 2(2) of the
Constitution, providing that the COMELEC shall
Exercise exclusive original jurisdiction over all
contests relating to the elections, returns and
qualifications of all elective regional, provincial,
and city officials, and appellate jurisdiction over
all contests involving elective municipal officials
decided by trial courts of general jurisdiction, or
involving elective barangay officials decided by
trial courts of limited jurisdiction. Municipal or
Metropolitan Courts being courts of limited
jurisdiction, their decisions in barangay election
contests are subject to the exclusive appellate
jurisdiction of the COMELEC under the afore-
quoted section. Hence, the decision rendered by
the Municipal Circuit Trial Court, should have
been appealed directly to the COMELEC and
not to the RTC. Accordingly, Section 9 of Rep.
Act No. 6679, insofar as it provides that the
decision of the municipal or metropolitan court in
a barangay election case should be appealed to
the RTC, must be declared unconstitutional.
Luego vs CSC, 143 SCRA 327
Posted by Pius Morados on November 7,
2011
.entry-meta
.entry-header
Facts: Petitioner was appointed Admin Officer II,
Office of the City Mayor, Cebu City, by Mayor
Solon. The appointment was described as
permanent but the CSC approved it as
temporary, subject to the final action taken in
the protest filed by the private respondent and
another employee.
Subsequently, the CSC found the private
respondent better qualified than the petitioner for
the contested position and, accordingly directed
that the latter be appointed to said position in
place of the petitioner whose appointment is
revoked. Hence, the private respondent was so
appointed to the position by Mayor Duterte, the
new mayor.
The petitioner, invoking his earlier permanent
appointment, questions the order and the validity
of the respondents appointment.
Issue: WON the CSC is authorized to
disapprove a permanent appointment on the
ground that another person is better qualified
than the appointee and, on the basis of this
finding, order his replacement.
Held: No. The appointment of the petitioner was
not temporary but permanent and was therefore
protected by Constitution. The appointing
authority indicated that it was permanent, as he
had the right to do so, and it was not for the
respondent CSC to reverse him and call it
temporary.
Section 9(h), Art V of the Civil Service Decree
provides that the Commission shall have inter
alia the power to approve all appointments,
whether original or promotional, to positions in
the civil service .and disapprove those
where the appointees do not possess
appropriate eligibility or required qualifications.
The CSC is not empowered to determine the
kind or nature of the appointment extended by
the appointing officer, its authority being limited
to approving or reviewing the appointment in the
light of the requirements of the CSC Law. When
the appointee is qualified and all the other legal
requirements are satisfied, the Commission has
no choice but to attest to the appointment in
accordance with the CSC Laws.
CSC is without authority to revoke an
appointment because of its belief that another
person was better qualified, which is an
encroachment on the discretion vested solely in
the city mayor.
Luego v. Civil Service Commission (G. R.
No. L-69137)
0 hearing took place. The GSIS took the issue to
FACTS: Petitioner was appointed Administrative
Officer II, Office of the City Mayor, Cebu City, by
Mayor Florentino Solon on 18 February 1983.
The appointment was described as permanent
but the Civil Service Commission approved it as
temporary. On 22 March 1984, the Civil
Service Commission found the private
respondent better qualified than the petitioner for
the contested position and accordingly directed
herein private respondent in place of petitioners
position. The private respondent was so
appointed on 28 June 1984, by the new mayor;
Mayor Ronald Duterte. The petitioner is now
invoking his earlier permanent appointment as
well as to question the Civil Service
Commissions order and the private
respondents title.
ISSUE: Whether or not the Civil Service
Commission is authorized to disapprove a
permanent appointment on the ground that
another person is better qualified than the
appointee and, on the basis of this finding, order
his replacement by the latter?
HELD: The Supreme Court ruled in the
negative. The Civil Service Commission is not
empowered to determine the kind or nature of
the appointment extended by the appointing
officer, its authority being limited to approving or
reviewing the appointment in the light of the
requirements of the Civil Service Law. When the
appointee is qualified and the other legal
requirements are satisfied, the Commission has
no choice but to attest to the appointment in
accordance with the Civil Service Laws. Hence,
the Civil Service Commissions resolution is set
aside.
GSIS V. CIVIL SERVICE
FACTS
The GSIS dismissed six government employees
on account of irregularities in the canvassing of
supplies. The employees appealed to the Merit
Board. Said board found for the employees and
declared the dismissal as illegal because no
the Civil Service which then ruled that the
dismissal was indeed illegal. The CSC thereafter
ordered the reinstatement of the employees and
demanded the payment of backwages. The
replacements of the dismissed employees
should then be released from service.
The GSIS remained unconvinced and raised the
issue to the SC. SC affirmed the Civil Service
ruling saying o The CSC acted within its
authority o Reinstatement was proper o
However, the SC modified the requirement of
backpay. Said backpay should be made after the
outcome of the disciplinary proceedings.
Heirs of the dismissed employees filed a motion
for execution of the Civil Service resolution so
that backwages can be paid. GSIS however
denied the motion saying that the SC modified
that part of the ruling.
CSC nonetheless thumbed its nose to the GSIS
and granted the motion. GSIS was made to pay.
Backed against the wall, GSIS filed certiorari
with the SC asking that the CSC order be
nullified. The GSIS contends that the CSC has
no power to execute its judgments.
ISSUE
Whether the Civil Service has the power to
enforce its judgments
HELD
YES. The Civil Service Commission is a
consitutional commission invested by the
Constitution and relevant laws not only with
authority to administer the civil service, but also
with quasi-judicial powers. It has the authority to
hear and decide administrative disciplinary
cases instituted directly with it or brought to it on
appeal. It has the power, too, sitting en banc, to
promulgate its own rules concerning pleadings
and practice before it or before any of its offices,
which rules should not however diminish,
increase, or modify substantive rights.
In light of all the foregoing consitutional and
statutory provisions, it would appear absurd to
deny to the Civil Service Commission the power
or authority or order execution of its decisions,
resolutions or orders. It would seem quite
obvious that the authority to decide cases is
inutile unless accompanied by the authority to
see that what has been decided is carried out.
Hence, the grant to a tribunal or agency of
adjudicatory power, or the authority to hear and
adjudge cases, should normally and logically be
deemed to include the grant of authority to
enforce or execute the judgments it thus
renders, unless the law otherwise provides.
Therefore, the GSIS must yield to the order of
the CSC.
Garces v CA
FACTS:
Lucita Garces was appointed Election Registrar
of Gutalac, Zamboanga del Norte on July 27,
1986. She was to replace respondent Election
Registrar Claudio Concepcion, who, in turn, was
transferred to Liloy, Zamboanga del Norte.
Both appointments were to take effect upon
assumption of office. Concepcion, however,
refused to transfer post as he did not request for
it. Garces was directed by the Office of Assistant
Director for Operations to assume the Gutalac
post. But she was not able to do so because of a
Memorandum issued by respondent Provincial
Election Supervisor Salvador Empeynado that
prohibited her from assuming office as the same
is not vacant.
Garces received a letter from the Acting
Manager, Finance Service Department, with an
enclosed check to cover for the expenses on
construction of polling booths. It was addressed
Mrs. Lucita Garces E.R. Gutalac, Zamboanga
del Norte which Garces interpreted to mean as
superseding the deferment order. Meanwhile,
since Concepcion continued occupying the
Gutalac office, the COMELEC en banc cancelled
his appointment to Liloy.
Garces filed before the RTC a petition for
mandamus with preliminary prohibitory and
mandatory injunction and damages against
Empeynado and Concepcion. Meantime, the
COMELEC en banc resolved to recognize
respondent Concepcion as the Election
Registrar of Gutalac and ordered that the
appointments of Garces be cancelled.
Empeynado moved to dismiss the petition for
mandamus alleging that the same was rendered
moot and academic by the said COMELEC
Resolution, and that the case is cognizable only
by the COMELEC under Sec. 7 Art. IX-A of the
1987 Constitution. Empeynado argues that the
matter should be raised only on certiorari before
the Supreme Court and not before the RTC, else
the latter court becomes a reviewer of an en
banc COMELEC resolution contrary to Sec. 7,
Art. IX-A.
RTC dismissed the petition for mandamus on
two grounds, viz., (1) that quo warranto is the
proper remedy, and (2) that the cases or
matters referred under the constitution pertain
only to those involving the conduct of elections.
CA affirmed the RTCs dismissal of the case.
ISSUE:
Whether or not the case is cognizable by the
Supreme Court?
HELD:
No. The case is cognizable in the RTC.
Sec. 7, Art. IX-A of the Constitution provides:
Each commission shall decide by a majority
vote of all its members
any case or matter brought before it within sixty
days from the date of its submission for decision
or resolution. A case or matter is deemed
submitted for decision or resolution upon the
filing of the last pleading, brief, or memorandum
required by the rules of the commission or by the
commission itself. Unless otherwise provided by
this constitution or by law, any decision, order, or
ruling of each commission may be brought to the
Supreme Court on certiorari by the aggrieved
party within thirty days from receipt of a copy
thereof.
This provision is inapplicable as there was no
case or matter filed before the COMELEC. On
the contrary, it was the COMELECs resolution
that triggered this Controversy.
The case or matter referred to by the PAL refused. Thus, Pantejo was forced to seek
constitution must be something within the
jurisdiction of the COMELEC, i.e., it must pertain
to an election dispute. The settled rule is that
decision, rulings, order of the COMELEC that
may be brought to the Supreme Court
on certiorari under Sec. 7 Art. IX-A are those
that relate to the COMELECs exercise of
its adjudicatory or quasi-judicial powers involving
elective regional, provincial and city officials.
In this case, what is being assailed is the
COMELECs choice of an appointee to occupy
the Gutalac Post which is an administrative duty
done for the operational set-up of an agency.
The controversy involves an appointive, not an
elective, official. Hardly can this matter call for
the certiorari jurisdiction of the Supreme Court.
To rule otherwise would surely burden the Court
with trivial administrative questions that are best
ventilated before the RTC, a court which the law
vests with the power to exercise original
jurisdiction over all cases not within the
exclusive jurisdiction of any court, tribunal,
person or body exercising judicial or quasi-
judicial functions.
CASE DIGEST (Transportation Law): PAL. vs.
C.A.
Philippine Air Lines vs. Court of Appeals
GR 120262, 17 July 1997)
FACTS:
On 23 October 1988, Leovigildo A. Pantejo, then
City Fiscal of Surigao City, boarded a PAL plane
in Manila and disembarked in Cebu City where
he was supposed to take his connecting flight to
Surigao City. However, due to typhoon Osang,
the connecting flight to Surigao City was
cancelled. To accommodate the needs of its
stranded passengers, PAL initially gave out cash
assistance of P 100.00 and, the next day,
P200.00, for their expected stay of 2 days in
Cebu. Pantejo requested instead that he be
billeted in a hotel at the PALs expense because
he did not have cash with him at that time, but
and accept the generosity of a co-passenger, an
engineer named Andoni Dumlao, and he shared
a room with the latter at Sky View Hotel with the
promise to pay his share of the expenses upon
reaching Surigao. On 25 October 1988 when the
flight for Surigao was resumed, Pantejo came to
know that the hotel expenses of his co-
passengers, one Superintendent Ernesto
Gonzales and a certain Mrs. Gloria Rocha, an
Auditor of the Philippine National Bank, were
reimbursed by PAL. At this point, Pantejo
informed Oscar Jereza, PALs Manager for
Departure Services at Mactan Airport and who
was in charge of cancelled flights, that he was
going to sue the airline for discriminating against
him. It was only then that Jereza offered to pay
Pantejo P300.00 which, due to the ordeal and
anguish he had undergone, the latter declined.
Pantejo filed a suit for damages against PAL
with the RTC of Surigao City which, after trial,
rendered judgment, ordering PAL to pay Pantejo
P300.00 for actual damages, P150,000.00 as
moral damages, P100,000.00 as exemplary
damages, P15,000.00 as attorneys fees, and
6% interest from the time of the filing of the
complaint until said amounts shall have been
fully paid, plus costs of suit.
On appeal, the appellate court affirmed the
decision of the court a quo, but with the
exclusion of the award of attorneys fees and
litigation expenses.
The Supreme Court affirmed the challenged
judgment of Court of Appeals, subject to the
modification regarding the computation of the
6% legal rate of interest on the monetary awards
granted therein to Pantejo.
ISSUE:
Whether petitioner airlines acted in bad faith
when it failed and refused to provide hotel
accommodations for respondent Pantejo or to
reimburse him for hotel expenses incurred by
reason of the cancellation of its connecting flight
to Surigao City due to force majeur.
HELD:
A contract to transport passengers is quite
different in kind and degree from any other
contractual relation, and this is because of the
relation which an air carrier sustains with the
public. Its business is mainly with the travelling
public. It invites people to avail of the comforts
and advantages it offers. The contract of air
carriage, therefore, generates a relation
attended with a public duty. Neglect or
malfeasance of the carriers employees naturally
could give ground for an action for damages.
The discriminatory act of PAL against Pantejo
ineludibly makes the former liable for moral
damages under Article 21 in relation to Article
2219 (10) of the Civil Code. As held in Alitalia
Airways vs. CA, et al., such inattention to and
lack of care by the airline for the interest of its
passengers who are entitled to its utmost
consideration, particularly as to their
convenience, amount to bad faith which entitles
the passenger to the award of moral damages.
Moral damages are emphatically not intended to
enrich a plaintiff at the expense of the defendant.
They are awarded only to allow the former to
obtain means, diversion, or amusements that will
serve to alleviate the moral suffering he has
undergone due to the defendants culpable
action and must, perforce, be proportional to the
suffering inflicted. However, substantial
damages do not translate into excessive
damages. Herein, except for attorneys fees and
costs of suit, it will be noted that the Courts of
Appeals affirmed point by point the factual
findings of the lower court upon which the award
of damages had been based.
The interest of 6% imposed by the court should
be computed from the date of rendition of
judgment and not from the filing of the complaint.
The rule has been laid down in Eastern Shipping
Lines, Inc. vs. Court of Appeals, et. al. that
when an obligation, not constituting a loan or
forbearance of money, is breached, an interest
on the amount of damages awarded may be
imposed at the discretion of the court at the rate
of 6% per annum. No interest, however, shall be
adjudged on unliquidated claims or damages
except when or until the demand can be
established with reasonable certainty.
Accordingly, where the demand is established
with reasonable certainty, the interest shall begin
to run from the time the claim is made judicially
or extrajudicially (Art. 1169, Civil Code) but when
such certainty cannot be so reasonably
established at the time the demand is made, the
interest shall begin to run only from the date the
judgment of the court is made (at which time the
quantification of damages may be deemed to
have been reasonably ascertained). The actual
base for the computation of legal interest shall,
in any case, be on the amount finally adjudged.
This is because at the time of the filling of the
complaint, the amount of the damages to which
Pantejo may be entitled remains unliquidated
and not known, until it is definitely ascertained,
assessed and determined by the court, and only
after the presentation of proof thereon.
[G.R. No. 101370. September 2, 1993.]
NATIONAL HOUSING CORPORATION,
Petitioner, v. COMMISSION ON AUDIT and
ARTURO D. DADUFALZA, in his capacity as
COA Director, Technical Services Office,
Respondents.
Government Corporate Counsel for petitioner
The Solicitor General for Respondents.
DECISION
PUNO, J.:
Foreign loans usually obligate the debtor country
to hire expatriate consultants. This part of the
package makes these loans more onerous. The
petition at bar assails the disallowance by the
respondent COA of a contract extending the
services of a foreign consultant on the ground
that his work could well be performed by
Filipinos. It cannot
succeed.chanrobles.com:cralaw:red
There are no uncertainties on the facts of the
case. Our government forged an agreement on
financial cooperation with the Republic of
Germany. On April 10, 1981, a Loan and Project
Agreement was executed between the Republic
of the Philippines as "Borrower" and the National
Housing Authority (NHA) as "Project Sponsor"
on the one hand, and the Kreditanstalt Fur
Weideraufbau (KFW) on the other hand, for
Urban Housing Dagat-Dagatan Project II A/B. 1
The agreement empowered the NHA and the
KFW to determine the details of the project as
well as the goods and services to be financed
from the loan. They hired the services of
Engineer Brian W. Murdoch of Kinhill Pty. Ltd.
(Kinhill), a foreign corporation organized under
the laws of Australia.
In 1987, the KFW proposed to extend the
contract of Engr. Murdoch for another year. The
NHA Board of Directors approved only a 3-
month extension, from March 9 to June 9, 1987.
2 It also directed its management to make
representations with KFW to replace Engr.
Murdoch with a local consultant after June 9,
1987 if the project would still be unfinished. The
3-month consultancy contract was submitted to
the National Economic Development Authority
(NEDA) for approval. 3 On April 1, 1987, NEDA
approved the contract with the following
observations:jgc:chanrobles.com.ph
"This Office has no objection to the approval of
the contract. His (NHA-General Manager)
attention is called however on the previous
observations made by this Office in the review of
previous extension of services of Engr. Murdoch
that Engr. Murdoch has been the consultant of
NHA since August 1978 or about 8 years now
and that considering the relatively simple
supervision work required for the finishing
stages of the Dagat-Dagatan Project, NHA
should have considered hiring local consultant. It
is expected that this extension of services of
Engr. Murdoch is the last and that NHA shall
make representations with KFW to substitute a
qualified local consultant for Engr. Murdoch after
expiration of the contract if a consultant for the
project is still necessary."cralaw virtua1aw library
On April 10, 1987, NHA and Kinhill executed the
consultancy contract (original) covering the
months of March 9 to June 9, 1987. It involved
the amount of US $30,800.00 (foreign cost) and
P123,690.00 (local cost).
The 3-month contract, however, did not satisfy
KFW. It wanted a 12-month contract. In June
1987, it got what it wanted. NHA and Kinhill
signed a First Supplemental Contract. It
extended the consultancy contract for nine (9)
more months from June 9, 1987 to March 8,
1988. Its total cost was US $85,500.00 (foreign
cost) and P332,850.00 (local cost).
The Urban Housing Dagat-Dagatan Project II
was not completed as scheduled. On December
15, 1987, a request was made for an extension
of the Loan Agreement for another year. KFW
agreed provided the consultancy contract with
Kinhill would be extended until the end of
December 1988. NHA did not appear to have
much choice. On May 8, 1988, it signed a
Second Supplemental Contract extending the
contract of Kinhill for another eight (8) months,
from April 4 to December 4, 1988. Its total cost
was US $78,500.00 (foreign) and P315,000.00
(local).chanrobles lawlibrary : rednad
The Loan Agreement was supposed to have
expired on December 4, 1988. Nonetheless,
there was another request for its extension for a
period of six (6) months. KFW had no objection
but again conditioned its approval on the
extension of the consultancy services of Kinhill
also for a period of six (6) months. This resulted
in the signing on February 23, 1987 of the Third
Supplemental Contract which extended Kinhills
consultancy services from January 4 to July 3,
1989. Its cost was US $58,200.00 (foreign) and
P250,000.00 (local).
NHAs legal difficulties started when the Third
Supplemental Contract was reviewed in post
audit by the Technical Services Office (TSO).
The contract was disallowed in view of the
following findings:jgc:chanrobles.com.ph
"This has reference to the review of the Third
Supplemental Contract dated February 23, 1989
involving the amount of US$58,200.00 (foreign
cost) plus P250,000.00 (local cost) in the
contract amount and covering an extension of
six (6) months issued in favor of Kinhill Pty. Ltd.
relative to the Consulting Services for Technical
Assistance to National Housing Authority (NHA)
under the Kreditanstalt Fuer Wiederaufbau
(KFW) Loan for Dagat-Dagatan Project.
"Please be informed that the Consultants
monthly rate was established as reasonable,
however, the review conducted disclosed the
following observations:chanrob1es virtual 1aw
library
a. Based on submitted documents, it was noted
that this supplemental contract has no approval
from KFW and the Secretary of Public Works
and Highways as required in Article III,
Paragraph 3.02 of the contract and Section 3 of
Executive Order No. 164 dated May 5, 1987.
b. The output requirements are not specified and
there is no PERT/CPM 4 Network Diagram or
equivalent program of work, thus there is no
clear basis for NHAs evaluation of the
consultants accomplishment for purposes of
payment. (Note: Appendix "AA" only reflects
objectives).
c. There is no contract provision for liquidated
damages in case of delay in project completion
attributed to direct fault of the consultant.
"In addition we reiterate our opinion that the
KFW components of the Dagat-Dagatan Project
involves simple design and construction
procedures and it being in its finishing stage,
requires simple engineering advisory services
that can be undertaken by NHA or DPWH in-
house technical staff or at the most a local
consultant. However, perusal of the documents
submitted showed NHA was compelled to
continue the consultancy services of Kinhill,
otherwise, NHA cannot get reimbursement from
the KFW loan to pay their contractors.
(underscoring supplied).
"It was also noted that in this supplemental
contract the Management did not take into
consideration the results of our review made on
the previous contracts contained in our
Memorandum dated September 7, 1988.
"In view of the above observation, it is
recommended that the contract be disallowed in
audit.
"Likewise, it is informed that the review of the
selection and the manner of award and the
evaluation concerning all reimburseable direct
expense of the consultant are left with the
Auditor.
"Attention is invited to the attached Consultancy
Contract Review dated April 11, 1989, which is
self-explanatory.
"sgd. EDITHA A. DE LA CRUZ
Assistant Commissioner
Officer-in-Charge
Technical Services Office"
On November 26, 1990, NHA requested for
reconsideration. It offered the following
explanations:jgc:chanrobles.com.ph
"ISSUE NO. 1. This Supplemental Contract
has no approval from KFW and the Secretary of
the Public Works and Highways.
"ANSWER: 1.1. On KFW approval, attached
for your reference is a copy of KFW telex of no
objection, dated December 22, 1988 "EXHIBIT
A." The reply, action of KFW is usually
communicated thru telex. Perusal of all previous
consultancy contracts would support this.
Furthermore, let it be informed that it was KFWs
requirement why this consultancy Contract was
engaged despite our earlier manifestation that
we hire local consultants "EXHIBIT B."cralaw
virtua1aw library
1.2 On the approval by the Secretary of the
Department of Public Works and Highways . . .
the Third Supplemental Agreement was
approved by the NHA Board under Resolution
No. 1231 5 of March 13, 1987 (sic) "EXHIBIT
C."cralaw virtua1aw library
It may be pointed out at this juncture, that the
main reason why the consultancy had to be
extended was due to the delay in the completion
of the KFW-Funded River Bank Improvement
Works, which was directly implemented by the
Department of Public Works and Highways,
hence, the presence of the foreign consultant
was with the knowledge and acquiescence of
the DPWH.
"ISSUE NO. 2. The output requirements are
not specified . . . or equivalent program of work .
. .thus there is no clear basis for . . . payment.
"ANSWER: In the original Consultancy Contract,
as well as the First and the Second
Supplemental Contract Agreements, the main
basis for determining the consultants
responsibility have been defined in the Terms of
Reference which specified the technical
assistance to be provided by the Consultant to
the National Housing Authority under the KFW
Loan Agreement, to wit:chanrob1es virtual 1aw
library
Assistance to the National Housing Authority for
the Dagat-Dagatan Project in the form of
engineering designs, contract documentation,
project programming, supervision and
monitoring procedures, evaluation and
concurrence on contractors billings and
institutional arrangements with regards
associated agencies. In addition, responsibility
will include all associated functions necessary
for the timely and satisfactory completion of the
revetment works along the river banks in which
the Department of Public Works and Highways
is the responsible agency.
In this respect, since it is a prerequisite that all
billings to be processed for payment to the
contractors have to be certified by the
consultant, it is the direct responsibility of the
consultant to monitor, the consultant to monitor,
verify and evaluate all the aspects of the project
implementation for contracts funded by KFW
Loan. This process will assure the NHA and
KFW that disbursement are effected only to
cover works accomplishment in accordance with
plans and specifications.chanrobles virtual
lawlibrary
"ISSUE NO. 3 There is no contract provision
for liquidated damages in case of delay in
project completion attributed to the fault of the
consultant.
"ANSWER: We reiterate in full our previous
explanation for this particular
observation:jgc:chanrobles.com.ph
"It is confirmed that there is no contract provision
for liquidated damages. However, there is a
contract provision for termination for default or
for convenience of NHA. Further, considering
that the contract has already expired and there
has been no record of consultants faults or
delays in the project implementation, the
required provision on liquidated damages has
become moot and academic."cralaw virtua1aw
library
"With respect to your opinion that the KFW
components of the Dagat-Dagatan involve
simple design and construction procedures, etc.,
let this be of record that we are 100% in accord
with your observation. However, the hiring of an
expartriate consultant is mandated under the
Loan Agreement to which NHA must adhere to,
unless otherwise authorized." (Italics ours).
On February 28, 1991, TSO Director Arthur
Dadufalza denied the reconsideration. He
opined:jgc:chanrobles.com.ph
"1. Although not stated in the contract that there
is no need for the approval of the DPWH
Secretary, Section 3 of Executive Order No. 164
dated May 5, 1987 requires the said approval.
"2. The consultants responsibility which they
mentioned, as specified in the Terms of
Reference was general. The output
requirements are not specified and there is no
PERT/CPM Network Diagram or equivalent
program of work, hence, we still believed that
there is still no basis for NHAs evaluation of the
consultants accomplishments for purposes of
payment.
"3. It was confirmed by NHA that there is really
no contract provision for liquidated damages. It
so happened that the contract has expired and
there has been no record of consultants fault or
delay, thus, the required provision may be
considered moot and academic. However, it is
recommended that for future projects, the
provisions should be specified/stipulated.
"4. The main reason for the disallowance is that
there is no more need for a foreign consultant in
the final project stage since the remaining work
components of the Dagat-Dagatan Project which
involved simple design and construction
procedure and it being in the finishing stage,
required simple advisory services that can be
undertaken by NHA or DPWH in-house technical
staff or at the most, a local consultant. The
findings was further reinforced by the statements
of the NEDA in the attached 1st Indorsement
dated April 1, 1987 . . . bearing on its no
objection to the approval of the original
contract:jgc:chanrobles.com.ph
"x x x."cralaw virtua1aw library
"The NHA agreed and is 100% in accord with
the observation. However, we do not find in the
documents/records submitted that NHA has
made stronger representation with the KFW for
the hiring of a local consultant (or at all) as
required by the NEDA." (Italics ours).
On May 15, 1991, the COA, in its Decision No.
1895, affirmed Director Dadufalzas findings
except as regards the lack of provision for
liquidated damages which was considered moot
and academic.
NHA filed the instant petition for certiorari where
it raises the following
issues:jgc:chanrobles.com.ph
"a. Whether or not the COA acted beyond its
constitutionally granted powers by disallowing a
duly entered contract, valid, regular, with all the
formalities of law.
"b. Corollary to the above, is whether or not
COA acted beyond its constitutionally granted
powers by disallowing a contract on the basis of
its self-proclaimed and considered defects on
the contract not otherwise provided for in its sets
of regulations promulgated pursuant to the
mandate of the Constitution.
"c. Whether or not COA, by virtue of the powers
granted to it under the Constitution, substitute its
own judgment or disposition in lieu of the
decision of the management or governing body
of government entities."cralaw virtua1aw library
The petition lacks merit.
The power of the Commission on Audit to audit
and examine government expenditures is
enshrined in Section 2 (1), Article IX-D of the
1987 Constitution, viz.:jgc:chanrobles.com.ph
"Section 2. (1) The Commission on Audit shall
have the power, authority, and duty to examine,
audit and settle all accounts pertaining to the
revenue and receipts of, and expenditures or
uses of funds and property, owned or held in
trust by, or pertaining to, the Government, or any
of its subdivision, agencies, or instrumentalities,
including government-owned or controlled
corporations with original charters, or on a post
audit basis: (a) constitutional bodies,
commissions, and offices that have been
granted the fiscal autonomy under this
Constitution; . . ."cralaw virtua1aw library
The Constitution also granted to COA the power
to "promulgate accounting and auditing rules
and regulations, including those for the
prevention and disallowance of irregular,
unnecessary, excessive, extravagant, or
unconscionable expenditures, or uses of
government funds and properties." 6
Pursuant to the said constitutional mandate,
COA promulgated Circular No. 88-55-A dated
September 8, 1985 defining the term
"unnecessary" expenditures,
viz.:jgc:chanrobles.com.ph
"The term pertains to expenditures which could
not pass the test of prudence or the diligence of
a good father of a family, thereby denoting non-
responsiveness to the exigencies of the service.
Unnecessary expenditures are those not
supportive of the implementation of the
objectives and mission of the agency relative to
the nature of its operation. This would also
include incurrence of expenditure not dictated by
the demands of good government, and those the
utility of which cannot be ascertained at a
specific time. An expenditure that is not essential
or that which can be dispensed with without loss
or damage to property is considered
unnecessary. The mission and thrust of the
agency incurring the expenditures must be
considered in determining whether or not an
expenditure is necessary." (Italics ours).
In Caltex Philippines, Inc. v. COA, 7 We
recognized the authority of COA to disallow
irregular, unnecessary, excessive, extravagant
or unconscionable (IUEEU) expenditures. We
ruled: "Since the COA is responsible for the
enforcement of the rules and regulations, it goes
without saying that failure to comply with them is
a ground for disapproving the payment of the
proposed expenditure."cralaw virtua1aw library
There can be no dispute on the proposition that
the continued extension of the services of Engr.
Murdoch as a foreign consultant constitutes at
the very least an unnecessary expense.
Crystal clear from the records is that the nature
of the terminal phase of the Dagat-Dagatan
project does not require the expertise of a
foreign consultant. As early as April 1, 1987, the
necessity of extending the services of Engr.
Murdoch has been questioned by NEDA
"considering the relatively simple supervision
work required for the final stages of the project."
8 This observation was echoed by COA in its
post audit review of the First and Second
Supplemental Contracts,
viz:jgc:chanrobles.com.ph
"In addition, it is our opinion that the KFW
components of the Dagat-Dagatan Project
involves simple design and construction
procedures, and it being in its finishing stage,
requires simple advisory services that can be
undertaken by NHA or DPWH in-house technical
staff or at the most a local consultant. Hence,
the NHA should have made stronger
representations with the KFW for the hiring of a
local consultant (or none at all) as required by
NEDA."cralaw virtua1aw library
almighty dollar can justify anybody, especially
foreigners, to mangle the mandates of our
fundamental law. The postulates of our
9 Constitution are not mere platitudes which we
should honor only in rhetorics but not in reality.
In fine, the power to contract a foreign loan does
not carry with it the authority to bargain away the
ideals of our Constitution.
IN VIEW WHEREOF, the petition for certiorari is
dismissed.
SO ORDERED.

Petitioner itself has taken the position that the

services of Engr. Murdoch can be dispensed
with and can well be done by Filipinos. In 1987,
petitioners Board already directed its
management to make representations with KFW
to replace Engr. Murdoch with a Filipino
consultant if the project would still be unfinished.
Again, in its memorandum dated November 26,
1990, petitioner categorically admitted that the
KFW components of the Dagat-dagatan Project
involved simple designs and construction
procedures which could easily be handled by a
local consultant. Despite all these admissions,
petitioner proceeded to extend the unnecessary
services of Engr. Murdoch as it consummated
the disputed Third Supplemental Contract. The
amount of money that was spent for the
unnecessary services of Engr. Murdoch speaks
for itself.chanrobles law library

Petitioner argues that the renewal of the loan

agreement with the KFW would have been
jeopardized if it did not agree to the extension of
the services of Engr. Murdoch. The short answer
to this argument is that the imperative necessity
to comply with the command of our Constitution
prohibiting unnecessary expenses of public
funds is beyond compromise. No amount of the