G.R. No. L-22197; October 31, 1969
GONZALO PUYAT & SONS, INC., petitioner, vs. THE HON. AUDITOR GENERAL and THE SUGAR QUOTA ADMINISTRATION, respondents.

FACTS

On December 15, 1961, petitioner Gonzalo Puyat & Sons, Inc. (Puyat) and respondent Sugar Quota Administration (SQA) executed a one-year lease contract for the third floor of the Gonzalo Puyat building, expiring on December 15, 1962, with a monthly rental of P4,650. On October 30, 1962, Puyat notified SQA of its intention not to renew the lease. On November 28, 1962, SQA informed Puyat it would vacate the premises by November 30, 1962, and requested a Puyat representative to be present. On December 1, 1962, SQA turned over possession of the premises to one Bienvenido Jose, allegedly Puyat’s representative. On December 5, 1962, Puyat, through counsel, demanded payment of rental up to the contract’s expiry date of December 15, 1962. On December 18, 1962, Puyat filed a claim with the SQA Auditor for unpaid rental of P2,325 covering December 1-15, 1962. The SQA Auditor forwarded the claim to the Auditor General. On March 7, 1963, the Deputy Auditor General, by 4th indorsement, decided that SQA was not liable to pay the rental for the unexpired period. Puyat received notice of this decision on March 26, 1963. On June 8, 1963, Puyat, through new counsel, wrote the Auditor General again demanding payment and, for the first time, questioned the authority of Bienvenido Jose to receive the premises. On July 12, 1963, the Deputy Auditor General ruled that the March 7, 1963 decision had become final and executory for failure of Puyat to appeal within the reglementary period, and thus the claim could no longer be entertained. Puyat’s motion for reconsideration was denied, prompting the present petition for review.

ISSUE

Whether the Auditor General’s decision of March 7, 1963, denying Puyat’s claim for unpaid rentals, has become final and executory, thereby barring any further claim or appeal.

RULING

Yes, the Auditor General’s decision has become final and executory. The Supreme Court affirmed the rulings of the Deputy Auditor General dated March 7, 1963 and July 12, 1963. The Court held that: (1) Puyat’s letter-claim filed with the SQA Auditor on December 18, 1962 constituted a proper claim filed with the Auditor General, as the SQA Auditor is a representative and subordinate of the Auditor General; (2) The 4th indorsement of the Deputy Auditor General dated March 7, 1963 was a final decision on the merits, not a mere opinion, as it resolved the controversy between Puyat and SQA; (3) The decision became final because Puyat failed to appeal within thirty (30) days from receipt of notice on March 26, 1963, as required by Section 2 of Commonwealth Act 327 and Section 1, Rule 44 of the Rules of Court; (4) Puyat’s subsequent letter of June 8, 1963, raising a new issue on the authority of Bienvenido Jose, could not revive the right to appeal, as the decision had already lapsed into finality; and (5) Puyat was not denied due process, as it had the opportunity to be heard when it filed its claim and could have appealed the decision or raised the new factual issue within the reglementary period, which it did not do. Costs were imposed on petitioner.