G.R. No. 254394 . April 05, 2022
LIBERTAD O. ALAMEDA, D.M.D., MUNICIPAL MAYOR, MARIA LOURDES A. NAVAJA, MUNICIPAL ACCOUNTANT (RETIRED), AND ROSENDA D. LAMELA, MUNICIPAL BUDGET OFFICER, PETITIONERS, VS. COMMISSION ON AUDIT, REPRESENTED BY MICHAEL G. AGUINALDO, CHAIRPERSON, JOSE A. FABIA, COMMISSIONER, AND ISABEL D. AGITO, COMMISSIONER, RESPONDENTS.

FACTS

On September 11, 2012, Dr. Edmund L. Lamela was appointed as Municipal Health Officer (MHO) of San Agustin, Surigao del Sur under a temporary appointment valid for 12 months. Following the 2013 elections, petitioner Libertad O. Alameda became the new Municipal Mayor. On February 13, 2015, Mayor Alameda, through petitioner Municipal Accountant Maria Lourdes A. Navaja, received a Notice of Disallowance (ND) dated January 26, 2015, from the Commission on Audit (COA). The ND disallowed a total amount of P1,248,085.69, representing salaries, benefits, and operating expenses paid to and for Dr. Lamela from September 12, 2013, to December 31, 2014. The ND held several officials liable, including Mayor Alameda (for approving payment), Accountant Navaja (for certifying supporting documents), Municipal Budget Officer Rosenda D. Lamela (for certifying appropriation), and Dr. Lamela (for receiving payment), among others. Petitioners appealed, arguing Dr. Lamela performed his duties in a de facto capacity and was entitled to emoluments, and that they acted in good faith believing his appointment was permanent. The COA Regional Office affirmed the ND but applied the principle of quantum meruit to allow Dr. Lamela to retain the disallowed amounts as reasonable compensation for services rendered, while holding the approving/certifying officers liable for refund due to their negligence. On automatic review, the COA Commission Proper affirmed the disallowance but modified the liability, absolving Dr. Lamela and the Municipal Treasurer. It held that Dr. Lamela was not a de facto officer after his temporary appointment expired, as he lacked color of authority, but allowed him to keep the compensation based on equity (quantum meruit). The COA held the approving/certifying officers (petitioners) liable to refund the disallowed amounts. Petitioners’ motion for reconsideration was denied.

ISSUE

Whether the Commission on Audit committed grave abuse of discretion in: (1) declaring the material dates of the case without basis; (2) declaring that Dr. Lamela was not a de facto officer; (3) concluding Dr. Lamela was entitled to compensation only on equity without recognizing him as a de facto officer; and (4) ordering petitioners to refund the disallowed amount.

RULING

The Supreme Court DISMISSED the petition and AFFIRMED the assailed Commission on Audit Decision and Resolution. The COA did not commit grave abuse of discretion.
1. On the material dates and de facto officer status: The Court held that Dr. Lamela’s temporary appointment expired by operation of law on September 11, 2013, after the 12-month period under the Administrative Code. From September 12, 2013, onward, he no longer held a valid appointment. The elements of a de facto officer are: (a) a de jure office; (b) color of right or authority; and (c) actual physical possession of the office. “Color of authority” means an appointment derived from a known or competent authority, even if the appointment is later discovered to be legally defective. After the expiration of his temporary appointment, Dr. Lamela continued serving without any new appointment, renewal, or any document purporting to appoint him. Therefore, he lacked any color of authority. His continued service and the public’s acquiescence did not constitute color of authority, as the authority must stem from an official source, not mere performance or public perception. Thus, the COA correctly ruled he was not a de facto officer for the disallowed period.
2. On entitlement to compensation and liability for refund: The Court upheld the COA’s application of the principle of quantum meruit, allowing Dr. Lamela to keep the disallowed amounts as reasonable compensation for services actually rendered and from which the government benefited. This is an equitable remedy. However, this principle does not extend to exempt the approving/certifying officers from liability. Petitioners, as accountable officers, were negligent in failing to ascertain the validity of Dr. Lamela’s appointment before disbursing funds. Their duties (approving, certifying completeness of documents, and certifying lawful appropriation) are not merely ministerial but involve the exercise of discretion and diligence to ensure payments are lawful. Their failure to verify the existence of a valid appointment after the temporary one expired constituted gross negligence. Therefore, they were correctly held solidarily liable to refund the disallowed amounts, following the doctrine of solutio indebiti and established jurisprudence that recipients who are not in good faith and approving officers who are grossly negligent must refund disallowed amounts. The Court found no grave abuse of discretion in the COA’s findings and conclusions.