EN BANC
[G.R. No. 204108. November 10, 2015.]
DEVELOPMENT BANK OF THE PHILIPPINES, petitioner, vs. COMMISSION ON AUDIT, respondents.
NOTICE
Sirs/Mesdames :
Please take notice that the Court en banc issued a Resolution dated NOVEMBER 10, 2015, which reads as follows:
"G.R. No. 204108 — DEVELOPMENT BANK OF THE PHILIPPINES, Petitioner, v. COMMISSION ON AUDIT, Respondents.
The petitioner assails Decision No. 2010-073 issued on August 18, 2010, 1 whereby the Commission on Audit (COA) En Banc denied the petitioner's request for the lifting of the disallowance of the purchase of vehicles.
The antecedents are undisputed.
In 1988, the petitioner purchased 19 motor vehicles for P5,525,000.00. The vehicles were to be mobilized to enable its personnel to reach out to a wider clientele base. The purchases were included in COA's 1992 Annual Audit Report for being made without Presidential approval, as required by Letter of Instruction No. 667, dated February 2, 1978, and Letter of Implementation No. 29, dated December 5, 1975. On April 23, 1998, the COA issued Certificate of Settlement and Balances No. PSMD 98-01(97) disallowing the purchases. 2
The petitioner requested the lifting of the disallowance, but the COA denied the request through Decision No. 2001-151 dated August 2, 2001. 3 The disallowance was later reduced to P5,000,000.00 as the result of the purchase of two of the 19 vehicles being allowed following an audit in a separate case. Decision No. 2001-151 was affirmed with finality in Decision No. 2003-052 dated February 27, 2003. 4 The matter was elevated to the Court on certiorari (G.R. No. 166933 entitled Development Bank of the Philippines v. Commission on Audit), but the Court dismissed the petition for certiorari on August 10, 2006 on the ground that the COA was not shown to have gravely abused its discretion. 5
According to the petitioner, Mr. Roberto de Ocampo, the Chairman of the Board of Directors at the time of the purchases, was the person accountable for the disallowance. In its letter-request dated June 21, 2007, 6 therefore, the petitioner requested for the settlement of the disallowance through set-off or compensation, pointing out that it had been benefiting from the use of the vehicles for over 10 years as well as from the proceeds of their sale; that if de Ocampo was to be compelled to pay the costs of the vehicles, he should be given the right to collect reasonable rentals for their use; that it would be unjustly enriched at his expense otherwise; and that his liability should consequently be totally extinguished. HEITAD
The COA denied the petitioner's letter-request dated June 21, 2007 through Decision No. 2010-073, 7 which is presently assailed, with the COA holding that the request was tantamount to the renegotiation of the final decision in G.R. No. 166933; that there was no legal basis for the requested set-off or compensation because no debtor-creditor relationship existed between de Ocampo and the petitioner; that De Ocampo's liability arose out of the unauthorized disbursement; and that to allow his claim for rentals for the use of the vehicles would amount to the circumvention of the very control measures promulgated to safeguard public funds against irregular, unnecessary, excessive, or extravagant expenditures.
We note that in Decision No. 2010-073, the COA directed the Supervising Auditor to identify all of the petitioners' officials who had participated in the disallowed transactions.
The petitioner moved for reconsideration, but the COA denied its motion through Decision No. 2012-169 dated October 15, 2012. 8
Hence, this recourse, with the petitioner contending that the COA En Banc thereby committed grave abuse of discretion in not approving the proposed set-off or compensation.
Ruling of the Court
We DISMISS the petition for certiorari for its lack of merit.
We do not agree with the petitioner's submission that it had fully utilized the 19 motor vehicles for about 10 years; and that it did not suffer any loss by virtue of the disallowed purchase because it had received the proceeds of the sale of the vehicles, and had thus fully benefited from the purchase of the vehicles. The cause for the disallowance of the purchase of the vehicles was the petitioner's non-compliance with Letter of Implementation No. 29 and Letter of Instruction No. 667 requiring Presidential approval for the purchase. As a consequence, any benefit enjoyed by the Government, or any actual damage suffered by the Government was not the issue. Indeed, the disallowance due to the non-compliance with Letter of Implementation No. 29 and Letter of Instruction No. 667 was affirmed with finality in G.R. No. 166933.
Moreover, the request for the set-off or compensation had no legal basis. For the set-off or compensation to take place, the parties involved must be creditors and debtors of each other in their own right, and their debts must be liquidated, due, and demandable. 9 If it was clear and unquestionable that de Ocampo was neither a creditor nor a debtor of the petitioner, and even assuming, for the moment, that de Ocampo was entitled to recover the value of rentals and the proceeds of the resale of the vehicles, such value and proceeds still remained unliquidated because the petitioner had not presented evidence to substantiate its allegation that the benefit it had supposedly enjoyed from the purchase and eventual resale of the vehicles was at least equivalent to the disallowed amount of P5,000,000.00.
It behooves us to point out that neither the decision in G.R. No. 166933 nor the assailed Decisions of the COA under review indicated de Ocampo as the person solely liable for the disallowance. The persons liable were still to be identified; hence, as the dispositive portion of Decision 2011-073 shows, the COA thereby directed the Supervising Auditor to still:
. . . determine the identity of all DBP officials who participated in the subject illegal transactions, specifically the signatory in Box A of the pertinent disbursement voucher for certifying in the availability of funds and the completeness of supporting documents, and the signatory in Box B for approving the payment. ATICcS
Section 103 of Presidential Decree No. 1445 (The Government Auditing Code of the Philippines) expressly provides that the "[e]xpenditures of government funds or uses of government property in violation of law or regulations shall be a personal liability of the official or employee found to be directly responsible therefor." Hence, the liability of the officers to be held responsible for the disallowance is defined and fixed by law, and cannot be the proper subject of set-off or compensation.
Under the circumstances, the COA did not err in finding that the petitioner's request amounted to an attempt to renegotiate the final judgment in G.R. No. 166933. In that regard, the COA rightly declared that:
. . . to allow the same would precisely permit circumvention of control measures promulgated by the government to safeguard public funds against irregular, unnecessary, excessive or extravagant expenditures or uses thereof. It would render nugatory the purposes for which this Commission disallows illegal transactions. 10
In fine, the COA did not abuse its discretion, least of all gravely, in rejecting the request of the petitioner. We reiterate that only an act done in an arbitrary, or capricious, or whimsical manner as is equivalent to lack of jurisdiction constitutes grave abuse of discretion. The abuse of discretion that is the basis for issuing the writ of certiorari must be so patent and gross as to amount to an evasion of a positive duty or to a virtual refusal to perform a duty enjoined by law, or to act at all in contemplation of law, such as where the power is exercised in an arbitrary and despotic manner by reason of passion and hostility. 11 But the act of the COA En Banc complained against was not arbitrary, despotic, capricious, or whimsical. ETHIDa
WHEREFORE, the Court DISMISSES the petition for certiorari, without pronouncement on costs of suit." Brion and Mendoza, JJ., on leave. (adv23)
Very truly yours,
(SGD.) FELIPA B. ANAMAClerk of Court
Footnotes
1. Rollo, pp. 30-33.
2. Id. at 42.
3. Id. at 42-44.
4. Id. at 45-47.
5. See 498 SCRA 537.
6. Rollo, pp. 48-50.
7. Supra note 1.
8. Rollo, pp. 34-39.
9. Article 1278 and Article 1279, Civil Code.
10. Rollo, p. 32.
11. Yu v. Reyes-Carpio, G.R. No. 189207, June 15, 2011, 652 SCRA 341, 348.