G.R. No. 237874 , February 16, 2021
MIGUEL C. WYCOCO, FORMER REGIONAL MANAGER OF NATIONAL FOOD AUTHORITY – ZAMBOANGA REGIONAL OFFICE, ARACELY C. VALLEDOR, AND ALL CONCERNED NATIONAL FOOD AUTHORITY REGION IX EMPLOYEES, PETITIONERS, VS. MILAGROS L. AQUINO AND ESTRELLA B. AVILA, AUDIT TEAM LEADER AND SUPERVISING AUDITOR, RESPECTIVELY, NILDA B. PLARAS, DIRECTOR IV, COMMISSION SECRETARY, COA, – CORPORATE GOVERNMENT SECTOR, AUDIT GROUP C, ZAMBOANGA CITY, RESPONDENTS. [G.R. No. 239036] ERIC L. BONILLA AND ALL CONCERNED OFFICIALS AND EMPLOYEES OF THE NATIONAL FOOD AUTHORITY – AGUSAN DEL NORTE PROVINCIAL OFFICE, PETITIONERS, VS. THE COMMISSION ON AUDIT, RESPONDENT.

FACTS

The consolidated petitions assailed the Commission on Audit’s (COA) disallowances of food and grocery incentive (FGI) granted by the National Food Authority’s (NFA) Zamboanga Regional Office and Agusan Del Norte Provincial Office for the calendar years of 2010 and 2012, respectively. The COA disallowed the grants for lack of legal basis and for violating Section 12 of Republic Act No. 6758 .

ISSUE

1. Whether the principle of res judicata applies to the issue of the propriety of the disallowance.
2. Whether the circumstances of the case justify the application of Rule 2d of the guidelines established in Madera v. COA to excuse the return of the disallowed amounts.

RULING

1. On Res Judicata: The concurring opinion agrees with the ponencia that the principle of res judicata, specifically in its concept of conclusiveness of judgment, applies to the issue of the propriety of the disallowance. This is due to the final judgment in Escarez v. COA, where the Court upheld similar COA disallowances of FGI for lack of legal basis, finding no specific authority from the President or Congress for the NFA Council Resolution that authorized the release. While the parties are not exactly identical, there is substantial identity as both groups consist of NFA officials or employees aggrieved by the disallowance of FGI. However, res judicata applies only to the issue of the propriety of the disallowance itself. The issue of civil liability for the return of the specific disallowed amounts under the notices of disallowance in the present case is a separate and distinct issue that must be resolved based on its own factual peculiarities.
2. On Rule 2d of the Madera Rules: The concurring opinion agrees that the circumstances of this case do not furnish any highly exceptional reason to apply Rule 2d of the Madera Rules as an equitable ground to excuse the return of the disallowed amounts. The opinion clarifies that the length of time a disallowance case has been pending and the benevolent intent behind the grant of benefits, without more, are not compelling enough to constitute undue prejudice or a bona fide exception under Rule 2d. Broadly recognizing these reasons would dilute the general rule on the return of disallowed amounts and detrimentally affect the government’s ability to recover unlawfully disbursed public funds. Rule 2d should be applied only in highly exceptional circumstances that strongly impel the Court to prevent a clear inequity.