G.R. No. 222810, July 11, 2023
FORMER MUNICIPAL MAYOR CLARITO A. POBLETE, MUNICIPAL BUDGET OFFICER MA. DOLORES JEANETH BAWAL, AND MUNICIPAL ACCOUNTANT NEPHTALI V. SALAZAR, PETITIONERS, VS. COMMISSION ON AUDIT, RESPONDENT.

FACTS

The Commission on Audit (COA) issued twelve (12) Notices of Disallowance (NDs) totaling ₱2,891,558.31 against the petitioners, who were officials of the Municipality of Silang, Cavite. The disallowance stemmed from the Municipality’s payment in 2010 for various local projects (e.g., road concreting, canal rehabilitation, improvement of road right of way, payment for additional materials, fabrication of long tables, installation of additional lights for election day) that were actually undertaken and completed in the years 2004, 2006, and 2007. The COA held that this violated Section 350 of the Local Government Code, which mandates that expenditures be taken up in the accounts of the fiscal year they are incurred. The COA also found violations of Sections 46, 47, and 48 of the Administrative Code of 1987, as the contracts were entered into without the requisite appropriation and certification of availability of funds, rendering them void. The COA Regional Office affirmed the NDs. The COA Proper dismissed the petitioners’ appeal for being filed out of time due to failure to pay the required filing fees within the prescribed period.

ISSUE

Whether the principle of quantum meruit should be applied to reduce the liability of the petitioners for the disallowed amounts, notwithstanding the invalidity of the contracts and the finality of the disallowance due to a procedural lapse.

RULING

Justice Caguioa, in his Concurring and Dissenting Opinion, concurred with the ponencia’s finding that the disallowance was proper due to violations of the Local Government Code and the Administrative Code. He also agreed that the belated payment of filing fees rendered the appeal unseasonable. However, he dissented from the ruling that the principle of quantum meruit does not apply.
Justice Caguioa argued that the principle of quantum meruit should be considered to prevent unjust enrichment on the part of the government. He noted that the projects were successfully completed and the government benefited from them. Citing jurisprudence (Geronimo v. COA, Dr. Eslao v. COA, EPG Construction Co. v. Vigilar), he emphasized that recovery under quantum meruit has been allowed despite invalid or absent contracts to compensate for work done and benefits received by the government.
He further argued that the rule on immutability of judgment admits exceptions, such as when its execution would be unjust and inequitable, and should be relaxed to serve substantial justice. Citing Torreta v. COA, he pointed to the guideline that the civil liability for a disallowed amount may be reduced by amounts due to the recipient based on quantum meruit. Therefore, he concluded it would be unjust to hold petitioners liable for the entire disallowed amount without considering this principle. He voted to PARTLY GRANT the petition and REMAND the case to the COA for determination of the amount for which petitioners may be liable after applying quantum meruit.