G.R. No. 232199 , December 1, 2020
National Transmission Corporation, Petitioner, vs. Commission on Audit and COA Chairperson Michael G. Aguinaldo, Respondents. (Concurring Opinion, Caguioa, J.)

FACTS

Pursuant to the privatization under the Electric Power Industry Reform Act (EPIRA), the National Transmission Corporation (NTC) Board of Directors (BOD) issued a resolution authorizing separation benefits using the statutory formula: ((monthly salary x 1.5) x years of service). The NTC President/CEO subsequently issued a Circular modifying this by applying a 1.5 multiplier to the years of service component, resulting in the formula: ((monthly salary x 1.5) x (years of service x 1.5)). This modification caused an overpayment of approximately P883,341.63 to payee Sabdullah T. Macapodi, whose credited service was erroneously calculated as 61 instead of 42.9 years.
The Commission on Audit (COA) issued a Notice of Disallowance (ND) for the excess payment. The COA Commission Proper affirmed the ND but modified the liabilities, ruling the payee need not return the amount, while the verifying/certifying officers were liable and a supplemental ND should hold the BOD accountable. The ponencia partly granted NTC’s petition, upholding the disallowance for violating EPIRA, holding the payee liable to return the excess, absolving the verifying/certifying officers and the BOD, and finding the President/CEO responsible.

ISSUE

Whether the COA correctly disallowed the excess separation benefits and properly determined the liabilities for refund among the payee and the officers involved.

RULING

Justice Caguioa concurred, agreeing that the disallowance was correct and that the liability for refund must be determined under the Madera v. COA “Rules on Return.” The legal logic is anchored on the application of fundamental civil law principles. The payment of excess benefits violated the explicit formula in Sections 63 and 12(c) of the EPIRA, making the disbursement illegal. Consequently, the obligation to refund arises from the principles of solutio indebiti and unjust enrichment.
Under Madera, a payee or passive recipient is liable to return disallowed amounts received unless the amount was given as genuine consideration for services rendered. Good faith is not a defense for the payee to retain the amount, as the mere receipt of funds not legally due constitutes undue enrichment at government expense. Thus, Macapodi must refund the excess. The amount, being substantial, cannot be excused as de minimis or under any equitable exception. For officers, solidary liability attaches only if they are clearly shown to have acted in bad faith or with gross negligence, per Madera Rule 2(b). The concurrence emphasizes that the President/CEO, who unlawfully introduced the multiplier via Circular, may be held accountable, while officers who acted in good faith by relying on official directives are not civilly liable.