RAMON T. LIM, PETITIONER, VS. COMMISSION ON AUDIT, RESPONDENT.

Ramon Lim versus Commission on Audit

The Case

This is a petition for certiorari brought by Ramon Lim, then the Branch Manager of the Government Service Insurance System in Zamboanga City, against the Commission on Audit. Lim asks the Supreme Court to set aside the Commission's decision and resolution affirming the disallowance in audit of the payment of 239,000 pesos to V.A. Rivera Enterprises for one electric generator set. The case matters because it fixes two working rules every bar candidate should carry: the factual findings of administrative agencies, especially the Commission on Audit, are generally respected and even accorded finality, and a petition for certiorari under Rule 65 reaches only jurisdictional error or grave abuse of discretion, not every equitable claim a petitioner wishes to raise.

Procedural History

The matter began before the Branch Auditor of the Government Service Insurance System in Zamboanga City, Roberto Marquez. On September 11, 1992, he rendered a decision disallowing the payment of 239,000 pesos because the generator was not brand new and because it was 20 KVA instead of the 15 KVA specified in the Invitation to Pre-qualify and Bid. Lim moved for reconsideration, and the motion was denied. He then appealed to the Commission on Audit. On March 1, 1996, the Commission promulgated its decision affirming the Branch Auditor. Lim filed a motion for reconsideration, which the Commission denied in its resolution dated July 29, 1997. Lim then came to the Supreme Court by petition for certiorari, invoking grave abuse of discretion amounting to lack of jurisdiction.

Facts

On January 22, 1991, Lim, as Branch Manager of the Government Service Insurance System in Zamboanga City, requisitioned one generator, intended for the radio-telex machine during power interruptions. After a canvass, the office wrote V.A. Rivera Enterprises, which had offered the lowest price, asking it to deliver a 20 KVA Petter Stamford generator set. On January 8, 1992, V.A. Rivera Enterprises delivered the unit, and the office tested and used it. Lim then sought clearance from the head office in Manila, and on March 3, 1992, Benjamin Dela Pena, Vice President for Physical Resources Group, sent a memorandum approving the purchase.

Because the purchase involved a large amount, the office scheduled a bidding on May 28, 1992 and issued an Invitation to Pre-qualify and Bid for one unit 15 KVA generator set, brand new, single phase, sixty cycle, 240 volts alternating current, including panel board, fuel tank, pilot light, circuit breaker, voltmeter, cycle meter and ammeter. Before the bidding, on May 18, 1992, upon the advice of Branch Auditor Marquez, the office returned the earlier delivered generator set. Having been used from January 8 to May 18, 1992, V.A. Rivera Enterprises demanded 152,000 pesos as rental. It then won the May 28, 1992 bidding, returned the 20 KVA unit, and waived the rental fee.

On June 23, 1992, Branch Auditor Marquez wrote Lim informing him that the generator set was not brand new and that it was the same unit previously offered by V.A. Rivera Enterprises to the Zamboanga City Water District, now the subject of a legal suit between them. On September 11, 1992, the Branch Auditor disallowed the payment of 239,000 pesos. The Commission on Audit affirmed, adding that the machine, as appraised by its Technical Audit Specialist, was not brand new, did not conform to the specifications in the Invitation to Bid, and that the dealer could not present a Tax and Duty Receipt proving the equipment was a duly imported item. The Commission also held that the office is not liable to V.A. Rivera Enterprises for rentals.

Issues

• Whether or not the Commission on Audit acted with grave abuse of discretion amounting to lack of jurisdiction in disallowing the payment of 239,000 pesos in favor of V.A. Rivera Enterprises.
• Whether or not the principle of quantum meruit entitles V.A. Rivera Enterprises to payment of rentals for the use of the generator set, a question the petitioner raised in the same petition.

Applicable Provisions

Section 2 of Rule 64, in relation to Rule 65 of the 1997 Rules of Civil Procedure, governs the petition, and the Court states the scope of the remedy in these words:

In a petition for certiorari under Rule 65 of the 1997 Rules of Civil Procedure, as amended, such as the one at bar, the only issue to be resolved is whether the assailed act of the respondent tribunal, board or officer exercising judicial or quasi-judicial functions was done without or in excess of its or his jurisdiction or with grave abuse of discretion amounting to lack or excess of jurisdiction.

This defines the narrow question before the Court and explains why the rental claim based on quantum meruit cannot be entertained in this proceeding.

Ruling

On the first issue, the Court held that the petitioner's arguments lack merit. As found by the Commission on Audit, what was delivered was a locally assembled 20 KVA generator set previously offered to the Zamboanga City Water District. These factual findings, the Court said, are entitled to respect, because factual findings of administrative agencies are generally respected and even accorded finality owing to the special knowledge and expertise they gain from handling matters within their specialized jurisdiction. The Court quoted its ruling in Tuazon versus Godoy:

Factual findings of administrative agencies are generally held to be binding and final so long as they are supported by substantial evidence in the record of the case.

The Court added that it is not a trier of facts, and that its jurisdiction is limited to reviewing and revising errors of law. Since the 20 KVA generator set did not conform to the specifications in the Invitation to Pre-Qualify and Bid, the disallowance of its payment is in order.

On the second issue, the Court held that the claim for rentals based on quantum meruit is bereft of merit. The payment of rentals for the use of the generator set is certainly not an issue in a petition for certiorari, whose only issue is whether the assailed act was done without or in excess of jurisdiction or with grave abuse of discretion. The Court therefore confined itself to that question and did not pass upon the equitable claim.

Doctrine

First, factual findings of administrative agencies, including the Commission on Audit, are generally binding and final so long as they are supported by substantial evidence in the record, because of the special knowledge and expertise these agencies gain in their specialized jurisdiction. The Supreme Court is not a trier of facts; its jurisdiction is limited to reviewing and revising errors of law.

Second, a petition for certiorari under Rule 65, as applied to judgments and final orders of the Commission on Audit through Rule 64, raises only one issue: whether the respondent tribunal, board or officer exercising judicial or quasi-judicial functions acted without or in excess of jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction. Claims outside that frame, such as a claim for rentals on the principle of quantum meruit, cannot be resolved in the petition.

Disposition

The petition was dismissed, and the decision dated March 1, 1996 and the resolution dated July 29, 1997 of the Commission on Audit were affirmed. The Commission on Audit won.

Remember This

Memorize this line: factual findings of administrative agencies supported by substantial evidence are binding and final, and the Supreme Court is not a trier of facts. Examiners use this case to test the limited scope of a Rule 65 petition against the Commission on Audit, and to test why an equitable claim like quantum meruit cannot be smuggled into a certiorari proceeding.