MISAMIS ORIENTAL TELEPHONE SYSTEMS, INC. (MISORTEL), REPRESENTED BY ITS GENERAL MANAGER RELIO B. ACERO AND PROVINCE OF MISAMIS ORIENTAL, PLAINTIFFS-APPELLANTS, VS. DEVELOPMENT B…
INTING, J.:
WHEREFORE, for lack of cause of action, this case is ordered DISMISSED.
SO ORDERED.
The facts of the case are as follows:
MISORTEL is a corporation owned and controlled by the Province of Misamis Oriental.[3] DBP is the depository bank of MISORTEL and the Province of Misamis Oriental.[4]
On November 11, 2003, the Office of the President (OP) placed then Governor Antonio P. Calingin (Calingin) under preventive suspension for a period of sixty (60) days.[5] The Sangguniang Panlalawigan (SP) then issued a Resolution recognizing Vice Governor J. Miguel De Jesus (De Jesus) as the Acting Governor.[6]
On December 10, 2003, the OP rendered a decision finding Calingin guilty of dishonesty, gross negligence and grave misconduct suspending him from office for six (6) months.[7]
On December 17, 2003, the Regional Trial Court (RTC) issued a status quo ante order in favor of Calingin.[8]
On December 18, 2003, De Jesus sent a letter to DBP to desist from honoring financial transactions such as encashment of checks issued by Calingin.[9] But in an Order dated December 17, 2003, the RTC directed and ordered all the depository banks of the Province of Misamis Oriental to continue with the uninterrupted operation of the accounts under the customary signatures of the signatories set in place in the Province prior to November 14, 2003.[10]
On December 23, 2003, Calingin issued a check in the amount of P1,100,000.00 drawn against the account of MISORTEL, which DBP honored.[11]
On January 19, 2004, the Board of Directors of MISORTEL, presided by Calingin, passed a Resolution authorizing the president and corporate treasurer to temporarily use the MISORTEL account as conduit for the release of the General Fund to pay the Province’s contractual, statutory and other obligations in the light of the prevailing political crisis.[12]
Calingin then issued a Memorandum dated January 19, 2004 for the cash advance of P4,600,000.00 to be taken from the confidential and intelligence expense, anti-insurgency expense and extra-ordinary and miscellaneous expense.[13] An Allotment and Obligation Slip, Disbursement Voucher, and Check in the amount of P4,600,000.00 were then prepared.[14]
On January 20, 2004, the amount of P26,393,164.00 was transferred from the account of the Province to MISORTEL[15], which was later on returned by DBP to the account of the Province.[16]
Despite the return of the amount, the following were already encashed by DBP: (1) the check amounting to P1,100,000.00 and (2) the check amounting to P4,600,000.00. Consequently, appellants filed an action for sum of money to recover these amounts in addition to damages.
The RTC ruled against appellants invoking the principle of exhaustion of administrative remedies. Aggrieved, appellants filed the instant appeal and raised the following sole error:
THE LOWER COURT ERRED IN DISMISSING THE CASE BECAUSE OF LACK OF CAUSE OF ACTION.
During the pendency of the appeal, a Compromise Agreement[17] was drawn up between appellants and some of the appellees with the assistance of the appellate court mediator. The Compromise Agreement reads in part:
The parties further agree that they will no longer pursue their case against each other and hereby pray that the following Defendants-Appellees, namely, Calvin Akut, Bernardino Balo, Jr., Elias A. Suacillo, Claudita P. Baliton and Catalino D. Salahid be dropped.
IN WITNESS WHEREOF, the parties hereto have mutually and voluntarily agreed to the above stipulations, and sign this Agreement, at the Philippine Mediation Center, Court of Appeals, on this 14th DAY OF NOVEMBER 2013 for the consideration and approval of the Honorable Court.
MISAMIS ORIENTAL
TELEPHONE SYSTEMS,INC.
[MISORTEL], ETC.,
ET. AL.,
Plaintiffs-AppellantsCALVIN AKUT,
BERNARDINO BALO, JR.,
ELIAS A. SUACILLO,
CLAUDITA P. BALITON,
CATALINO D. SALAHID, JR.
Defendants-Appelleesby: ENGR. RENE GUINGGUING,
JABI BERNALDEZ,
NANCY MADJOS,
Appellate Court MediatorConsequently, a Partial Judgment Based on a Compromise Agreement[18] was rendered by the Court on December 11, 2013.
Our Ruling
The appeal is without merit.
The Supreme Court held[19]:
This Court, in a long line of cases, has consistently held that if a remedy within the administrative machinery can still be resorted to by giving the administrative officer concerned every opportunity to decide on a matter that comes within his jurisdiction, then such remedy should be exhausted first before the court’s judicial power can be sought. The party with an administrative remedy must not merely initiate the prescribed administrative procedure to obtain relief but also pursue it to its appropriate conclusion before seeking judicial intervention in order to give the administrative agency an opportunity to decide the matter itself correctly and prevent unnecessary and premature resort to the court. The underlying principle of the rule rests on the presumption that the administrative agency, if afforded a complete chance to pass upon the matter will decide the same correctly.
Related to the doctrine of exhaustion of administrative remedies is the doctrine of primary jurisdiction.
“The doctrine of primary jurisdiction holds that if a case is such that its determination requires the expertise, specialized training and knowledge of an administrative body, relief must first be obtained in an administrative proceeding before resort to the courts is had even if the matter may well be within their proper jurisdiction. It applies where a claim is originally cognizable in the courts and comes into play whenever enforcement of the claim requires the resolution of issues which, under a regulatory scheme, have been placed within the special competence of an administrative agency. In such a case, the court in which the claim is sought to be enforced may suspend the judicial process pending referral of such issues to the administrative body for its view or, if the parties would not be unfairly disadvantaged, dismiss the case without prejudice.[20]“
Thus the Supreme Court once held[21]:
We have consistently declared that the doctrine of exhaustion of administrative remedies is a cornerstone of our judicial system. The thrust of the rule is that courts must allow administrative agencies to carry out their functions and discharge their responsibilities within the specialized areas of their respective competence. The rationale for this doctrine is obvious. It entails lesser expenses and provides for the speedier resolution of controversies. Comity and convenience also impel courts of justice to shy away from a dispute until the system of administrative redress has been completed.
In the case of Republic v. Lacap, we expounded on the doctrine of exhaustion of administrative remedies and the related doctrine of primary jurisdiction in this wise:
The general rule is that before a party may seek the intervention of the court, he should first avail of all the means afforded him by administrative processes. The issues which administrative agencies are authorized to decide should not be summarily taken from them and submitted to a court without first giving such administrative agency the opportunity to dispose of the same after due deliberation.
Corollary to the doctrine of exhaustion of administrative remedies is the doctrine of primary jurisdiction; that is, courts cannot or will not determine a controversy involving a question which is within the jurisdiction of the administrative tribunal prior to the resolution of that question by the administrative tribunal, where the question demands the exercise of sound administrative discretion requiring the special knowledge, experience and services of the administrative tribunal to determine technical and intricate matters of fact.
It is true that the foregoing doctrine admits of exceptions, such that in Lacap, we also held:
Nonetheless, the doctrine of exhaustion of administrative remedies and the corollary doctrine of primary jurisdiction, which are based on sound public policy and practical considerations, are not inflexible rules. There are many accepted exceptions, such as: (a) where there is estoppel on the part of the party invoking the doctrine; (b) where the challenged administrative act is patently illegal, amounting to lack of jurisdiction; (c) where there is unreasonable delay or official inaction that will irretrievably prejudice the complainant; (d) where the amount involved is relatively small so as to make the rule impractical and oppressive; (e) where the question involved is purely legal and will ultimately have to be decided by the courts of justice; (f) where judicial intervention is urgent; (g) when its application may cause great and irreparable damage; (h) where the controverted acts violate due process; (i) when the issue of non-exhaustion of administrative remedies has been rendered moot; (j) when there is no other plain, speedy and adequate remedy; (k) when strong public interest is involved; and, (l) in quo warranto proceedings. x x x.
Section 26 of Presidential Decree No. 1445 provides for the power of the Commission on Audit, to wit:
The authority and powers of the Commission shall extend to and comprehend all matters relating to auditing procedures, systems and controls, the keeping of the general accounts of the Government, the preservation of vouchers pertaining thereto for a period of ten years, the examination and inspection of the books, records, and papers relating to those accounts; and the audit and settlement of the accounts of all persons respecting funds or property received or held by them in an accountable capacity, as well as the examination, audit, and settlement of all claims of any sort due from or owing to the Government or any of its subdivisions, agencies and instrumentalities. The said jurisdiction extends to all government-owned or controlled corporations, including their subsidiaries, and other self-governing boards, commissions, agencies of the Government, and as herein prescribed, including non-governmental entities subsidized by the government, those funded by donations through the government, those required to pay levies or government share, and those for which the government has put up a counterpart fund or those partly funded by the government.
To reiterate, the power of the COA includes “examination, audit, and settlement of all claims of any sort due from or owing to the Government or any of its subdivisions, agencies and instrumentalities.” The amounts involved in the instant case are public money. The action for collection of these sums is for the benefit of the Provincial government. There can be no doubt that these amounts require the examination and an exercise of the jurisdiction of the COA, pursuant to law.
The need for the findings of the COA, which is missing in the instant case, is made more relevant by the provision of the Local Government Code which states:
SEC. 339. Cash Advances. – No cash advance shall be granted to any local official or employee, elective or appointive, unless made in accordance with the rules and regulations as the Commission on Audit may prescribe.
Besides, the compromise agreement provides in part: “defendant-appellee-accountable officers who secured cash advances from the MISORTEL INC. shall render an account and/or liquidate the amount they received as cash advance pursuant to the GAA rules of the COA xxx.” Consequently, an action of the Court on the instant collection suit would be tantamount to pre-empting the accounting and liquidation of the amounts involved. In relation to that, the agreement which clearly states “pursuant to the GAA rules of the COA” makes COA examination and exercise of jurisdiction a necessity.
Appellants, however, assert that to require the COA to first declare the cash advances as illegal would cause great and irreparable damage to them.[22] Interestingly, they did not say how and why great and irreparable damage would befall them if these transactions would be subjected to a COA examination.
Consequently, the instant appeal must fail.
WHEREFORE, the instant appeal is DENIED. The Decision of the Regional Trial Court is AFFIRMED.
SO ORDERED.
[**]Borja, J., (Acting Chairperson), and Perez, JJ., concur.
[*] Some of the original parties were dropped pursuant to the Compromise Agreement executed between the parties involved, Rollo, p. 203
[**] Designated Member vice J. Camello, per Raffle dated June 18, 2014
[1] Rollo, pp. 15-64
[2] Rollo, pp. 67-77
[3] Rollo, p. 68
[4] Rollo, p. 68
[5] Rollo, p. 18
[6] Rollo, p. 19
[7] Rollo, p. 19
[8] Rollo, p. 19
[9] Rollo, pp. 19-20
[10] Exhibit Folder, pp. 90-97
[11] Rollo, p. 20
[12] Rollo, p. 20
[13] Exhibit Folder, p. 24
[14] Exhibit Folder, pp. 27-29
[15] Rollo, p. 21
[16] Rollo, p. 24
[17] Rollo, p. 203
[18] Rollo, pp. 217-222
[19] Laguna CATV Network, Inc. v. Maraan et al., G.R. No. 139492, November 19, 2002
[20] Euro-Med Laboratories Phils. Inc. v. Province of Batangas, G.R. No. 148106, July 17, 2006
[21] Addition Hills Mandaluyong Civic & Social Org. Inc. v. Megaworld Properties & Holdings Inc. et al., G.R. No. 175039, April 18, 2012
[22] Rollo, p. 29