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ENBANC
ILDEFONSO T. PATDU, JR., G.R. No. 218461

Petitioner,
Present:
GESMUNDO, CJ,
PERLAS-BERNABE,
LEONEN,
CAGUIOA,
HERNANDO,
CARANDANG,
LAZARO-JAVIER,
- versus -
INTING,
ZALAMEDA,
LOPEZ, M.,
GAERLAN,
ROSARIO, and
LOPEZ, J., JJ.
Promulgated:
COMMISSION ON AUDIT, September 14, 2021

Respondent. ~ - - .- - - - - - -
x----------------------------------------------- -----------x
DECISION
LOPEZ, J., J.:
Before the Court is a Petition for Certiorari 1 filed under Rule 64, in
relation to Rule 65, of the Rules of Court assailing the December 13, 2010
Decision2 and the April 6, 2015 Resolution3 of respondent Commission on
Audit (COA).
Rollo, pp. 3-24.

2
Penned by Chairman Reynaldo A. Villar, with Commissioners Juanito G. Espino, Jr. and Evelyn R.
San Buenaventura, concurring; id. at 28-35.
3
Id. at 36-43.
Decision 2 • G.R. No. 218461
FACTUAL ANTECEDENTS
In 1992, the Government of the Republic of the Philippines, through

the then Department of Transportation and Communications (DOTC),
internationally bid out the construction of the Davao Fishing Port Complex
under the National Fishing Development Program (project). 4 The undertaking
is of the nature of a foreign-assisted project, 5 being funded by the Overseas
Economic Cooperation Fund (OECF), 6 a funding institution in Japan, under
the 17th Yen Credit Package (PH-126). 7
Three proponents submitted their bids, namely: (i) Hanil Development

Company; (ii) the consortium of C. Itoh, F .F. Cruz and DMC; and (iii) the
joint venture of Engineering Equipment, Inc. and J.E. Manalo (EEI/Manalo
Joint Venture). 8
The EEI/Manalo Joint Venture offered the lowest bid at

P347,000,005.00. 9 Hence, on December 7, 1992, the Pre-Qualification, Bids
and Awards Committee of the DOTC recommended that the contract for the
project be awarded to the EEI/Manalo Joint Venture. 10 Subsequently, the
DOTC and the EEI/Manalo Joint Venture executed a construction contract
dated April 20, 1993, entitled "Construction ofDavao Fishing Port Complex
for the Nationwide Fishing Ports Development Program (Fishing Ports
Package II)" (Construction Contract), with DOTC as project owner and
EEI/Manalo Joint Venture as project contractor therein. 11 Under the
Construction Contract, EEI/Manalo Joint Venture was obligated to execute,
complete and maintain construction works related to the project. 12
During the period of the Construction Contract, the EEI/Manalo Joint

Venture offered to construct the relevant construction works within a shorter
period, from 1,096 days as stipulated in the bidding documents to a period of
910 days. 13 In consideration for the early completion of the project, DOTC
agreed to pay EEI/Manalo Joint Venture an early completion incentive bonus
in the amount of P35,445,070.35 (Incentive Bonus). 14
4
Id. at 5.
Id.
6
Id.
7
Id.
Id.
9
Id.
10
Id.
11
Id. at 66-69.
12
Id.
13
Id. at 5.
14
Id. at 7.
Decision - 3 G.R. No. 218461
During construction, the DOTC issued several vanat10n orders,

amounting to '?7,450,855.91 (Variation Orders). 15 The only Variation Orders
at issue in this petition are the following: (i) Variation Order No. 5, which
sought to change the original design of the preparation/landing wharf; (ii)
Variation Order No. 7, which sought to change the design of the pavement
and landscaping, and construction of certain parts of the drainage/sewerage
system, fresh water supply, and masonry works; and (iii) Variation Order No.
8, which sought to change the quantity and materials of parts of the drainage
system, fresh water supply, wharf, and breakwater. 16 Petitioner, as the project
engineer, was responsible for reviewing the amounts as stated under Variation
Order Nos. 5, 7 and 8. 17
On June 18, 1997, the COA Auditor assigned to DOTC issued a Notice
of Disallowance (ND) No. 97-011-102 (DOTC) (95), disallowing
P53,95 l,955.03 of the project. 18 The disallowance stemmed from the findings
of COA's Special Task Force on Flagship Projects (STFFP), which
determined that the project's actual cost of P354,450,860.91 manifestly
exceeded COA's estimated cost of the project that amounted to
'?300,498,905.88.
Pursuant to the mandate given to COA to review and evaluate contracts,

and to inspect and appraise infrastructure projects, 19 it issued Resolution No.
91-052 dated September 17, 1991, which requires an auditorial review and
evaluation of infrastructure contracts awarded as a result of public bidding, to
determine its regularity and the reasonableness of the contract price. More
specifically, Section 5 of the Resolution provides that "[ f]or purposes of
determining the reasonableness of the contract price as a technical aspect of
the review and evaluation process, the Approved Agency Estimate (AAE)
shall serve as a reference value for the formulation of the COA cost estimate."
Section 7 provides that "[t]he total contract price should be equal to or less
than the total COA estimate plus ten percent (10%) in order to sustain a
finding of reasonableness, otherwise, the contract price will be deemed
excessive."
Accordingly, upon the STFFP's determination that the project was in

excess of P53,951,955.03 over the COA estimated cost (Excess Project Cost),
the COA Auditor disallowed such excess amount. 20
On December 12, 1997, the DOTC requested the Office of the COA
Chainnan to lift ND No. 97-011-102 (DOTC) (95) dated June 18, 1997 .21 The
15
Id at 5.
16
Id at 6.
17
Id. at 41.
18
Id. at 70.
19
See Section 7(6), Chapter 3, Subtitle B, Title I, Book V, Administrative Code of 1987.
20
Id.
21
Id. at 83-97.
Decision G.R. No. 218461
COA Chairman referred the DOTC request to the COA Auditor for
appropriate action which the COA Auditor treated the request as a request for
reconsideration. 22
\Vith respect to the incentive bonus, the COA Auditor determined on

May 28, 1998 that the amount of P35,445,070.35 is excessive, and reduced
the same to P20,129,354.80. 23 Hence, the COA Auditor disallowed the excess
of Pl5,315,715.55 of the incentive bonus through ND No. 98-004-102
(DOTC) (96). 24
On July 14, 1999, DOTC filed a motion to dismiss 25 with the Office of
the COA Chairman on the ground that foreign-assisted projects of the
government are exempt from the requirement of auditorial review as provided
in the September 17, 1991 COA Resolution that formed the basis of the COA
disallowance. The DOTC cited the exempting clause in the Implementing
Rules and Regulations (IRR) of Presidential Decree (P.D.) No. 1594, which
provides:
The above notwithstanding, nothing in these implementing rules and

regulations shall negate any existing and future commitments with respect to
the bidding, award and execution of contracts financed partly or wholly with
funds from international financial institutions, as well as from bilateral and
other similar sources. 26
The DOTC then stated that the above exempting clause excluded
foreign-assisted projects from P.D. No. 1594 and its IRR. Hence, the
September 17, 1991 COA Resolution, which lays down the rule on the
reasonableness of the project cost of a contract pursuant to P.D. No. 1594 and
its IRR, is not applicable. 27
On January 31, 2000, the COA Auditor issued a letter entitled "4 th
Indorsement" 28 to the Director ofNational Government Audit Office (NGAO)
II, recommending the lifting ofND No. 97-011-102 (DOTC) (95) dated June
18, 1997 on the ground that the project is a foreign-assisted or Official
Development Assistance (ODA)-funded project of the Philippine
Government, and therefore, Philippine procurement law and procedure,
specifically P.D. No. 1594 and its IRR, is not applicable. 29 The COA Auditor
relied on the clarification issued by the Secretary of Justice in his Opinion30
22
Id. at 97-100.
23
Id.
24
Id.
25
Id. at 88.
26
Second paragraph, clause 1, Section VI ofthe IRRofP.D. No. 1594.
27
Supra.
28
Rollo, p. 7.
29
Id.
30
Id. at 90-91.
Decision -5- G.R. No. 218461
dated April 21, 1987 that the exempting clause in the IRR of P.D. No. 1594
effectively excluded foreign-assisted projects from the coverage of P.D. No.
1594 and its IRR, especially on the designation of ceiling in the amounts of
contracts.
On July 19, 2001, the NGAO II Director issued a letter entitled "5 th
Indorsement" 31 to the COA Auditor, sustaining the lifting ofND No. 97-011-
102 (DOTC) (95) dated June 18, 1997 based on the ground raised by the COA
Auditor in the 4th Indorsement dated January 31, 2000.
On November 14, 2002, the DOTC requested the lifting ofND No. 98-
004-J02 (DOTC) (96) dated May 28, 1998 with the COA Auditor, 32 based on
the same position taken by the NGAO II Director in the 5th Indorsement that
was issued in ND No. 97-011-102 (DOTC) (95). The matter was then raised
to the COA' s Legal and Adjudication Office.
The COA's Legal and Adjudication Office denied the request for the
lifting of ND No. 98-004-102 (DOTC) (96) dated May 28, 1998 in LAO-N
Decision No. 2005-039 dated January 27, 2005 and LAO-N Resolution No.
2005-039A dated November 24, 2005, on the ground that P.D. No. 1594 and
its IRR are applicable to the project and that, therefore, the notice of
disallowance should be sustained. 33 The Legal and Adjudication Office found
that the Construction Contract incorporated the content of the bidding
documents for the project, and the bidding documents state that P.D. No. 15 94
and its IRR shall be applicable. 34
DOTC appealed LAO-N Decision No. 2005-039 dated January 27,

2005 and LAO-N Resolution No. 2005-039A dated November 24, 2005 to the
COA Proper (COA-CP).
Ruling of the COA-CP
In Decision No. 2010-133 35 dated December 13, 2010, the COA-CP

denied the appeal of the DOTC, and affirmed ND No. 98-004-102 (DOTC)
(96) dated May 28, 1998. 36 In addition, the COA in the same appeal also set
aside the 5th Indorsement dated July 19, 2001 of the NGAO II Director and
reinstated ND No. 97-011-102 (DOTC) (95) dated June 18, 1997. The
dispositive portion of the December 13, 2010 COA-CP Decision reads:
31
Id. at 92-94.
32
Id. at 95-96.
33
Id.
34
Id. at 99-100.
35
Id. at 28-34.
36
Id. at 34.
Decision 6 ' G.R. No. 218461
WHEREFORE, premises considered, the herein appeal is DENIED.

Accordingly, LAO-N Decision No. 2005-039 and LAO-N Resolution No.
2005-039A denying the request to lift ND No. 98-004-102 (DOTC) (96) are
hereby AFFIRMED. Likewise, the 5th Indorsement dated July 19, 2001 of
the Director of then NGAO II lifting ND No. 97-011-102 (DOTC) (95) is
hereby SET ASIDE. The decision of the DOTC Department Auditor
disallowing the project cost difference/excess is hereby REINSTATED. 37
In the said Decision, the COA-CP found that the parties themselves
voluntarily agreed on the applicability of P.D. No. 1594. Volume 1 of the Bid
and Contract Documents which provides that "[t]he provisions of Presidential
Decree No. 1594, and its implementing rules and regulations, and other
relevant laws and employer regulations shall apply to this bidding and any
contract based thereon." 38 The NGAO II Director therefore erroneously lifted
ND No. 97-011-102 (DOTC) (95) dated June 18, 1997.
DOTC filed a motion for reconsideration from Decision No. 2010-133

dated December 13, 2010, 39 which the COA denied in Resolution No. 2015-
13540 dated April 6, 2015.
Petitioner Ildefonso Patdu, Jr. (Petitioner), who was held civilly liable
under ND No. 97-011-102 (DOTC) (95), thereafter filed the instant petition
to assail the December 13, 2010 Decision and April 6, 2015 Resolution of the
COA.
ISSUES
I.
Whether the decision of the NGAO II Director to lift and set
aside ND No. 97-011-102 (DOTC) (95) dated June 18, 1997 had
attained finality, and hence, had become immutable and
unalterable
II.
Whether ND No. 97-011-102 (DOTC) (95) dated June 18, 1997
and ND No. 98-004-102 (DOTC) (96) should be lifted and set
aside
III.
Whether the petitioner should be held liable for the audit
disallowance arising from Variation Order Nos. 5, 7 and 8
37
Id.
38
Id. at 32.
39
Id. at 44-6 1.
40
Id. at 36-43.
Decision • 7 G.R. No. 218461
COURT'S RULING
At the outset, it must be clarified that the assailed Decision dated

December 13, 2010 and the Resolution dated April 6, 2015 rendered by the
COA involved two notices of disallowance. Nevertheless, as petitioner was
held civilly liable only under ND No. 97-011-102 (DOTC) (95), the resolution
of this case shall be limited to the said notice of disallowance. With the two
notices of disallowance involving different parties, and without any
pronouncement on the liability of petitioner in ND No. 98-004-102 (DOTC)
(96), this is not the proper forum for him to assail the COA Decision and
Resolution insofar as the latter notice of disallowance is concerned. In the
absence of a direct injury suffered by petitioner, he clearly lacks the legal
standing to assail the affirmance of ND No. 98-004-102 (DOTC) (96) in this
petition.
Finality of Lifting of a COA Notice of

Disallowance by the COA Director
Petitioner postulates that the lifting of ND No. 97-011-102 (DOTC)

(95) dated June 18, 1997 by the NGAO II Director in the 5th Indorsement had
attained finality and hence, has become immutable and unalterable. 41
Consequently, the COA-CP may no longer reverse and set aside, after almost
ten (10) years, the lifting ofND No. 97-011-102 (DOTC) (95) dated June 18,
1997. 42 To support its contention, petitioner cites the doctrine of finality or
immutability of judgments. 43
On the other hand, respondent insists that the NGAO II Director did not
elevate the decision for review, and that the State cannot be put in estoppel by
the mistakes or errors of its officials or agents. 44 Thus, the NGAO II Director's
decision did not attain finality. 45
We uphold the arguments raised by the petitioner.
In Civil Service Commission v. Moralde, 46 We held that:
[t]he doctrine of immutability of judgments applies as much to

decisions of agencies exercising quasi-judicial powers as they do to judicial
decisions. Jurisprudence is categorical: 'the principle of conclusiveness of
prior adjudications is not confined in its operation to the judgments of what
41
Id at 10-15.
42
Id
43
Id.
44
Id. at 8-13.
45
Id.
46
838 Phil. 840,856 (2018).
Decision 8 . G.R. No. 218461
are ordinarily known as courts, but extends to all bodies upon which judicial
powers had been conferred."'
Moreover, the related doctrine of res judicata, which bars a subsequent

action when a former identical action has already lapsed into finality, equally
applies to decisions rendered by quasi-judicial bodies. 47
The exercise of quasi-judicial powers by administrative officers or

bodies involves the investigation of facts or ascertainment of the existence of
facts, holding of hearings, weighing of evidence, and drawing conclusions
from them as basis for official action and exercise of discretion in a judicial
nature. 48 In this case, the proceeding before the NGAO II Director was in the
exercise of quasi-judicial functions as it involves the investigation of facts
concerning (i) the expenditure of funds intended for a government project; (ii)
ruling on appeal whether such expenditure is illegal, irregular, unnecessary,
excessive, extravagant or unconscionable; and (iii) deciding on appeal
whether to disallow such expenditure. Hence, the doctrine of immutability of
judgments applies to the decision of the NGAO II Director.
Further, the manner by which a ruling attains finality depends on the

peculiar relevant law and/or rules of procedure governing the proceeding
before the adjudicating body. For proceedings before the COA, a ruling attains
finality in accordance with Section 6, Rule V of the COA Revised Rules of
Procedure, which provides:
SECTION 6. Power of Director on Appeal. - The Director may reverse,

modify, alter, or affinn the decision or ruling of the Auditor. However,
should the Director render a decision reversing, modifying or altering the
decision or ruling of the Auditor, the Director shall, within ten (10) days,
certify the case and elevate the entire record to the Commission Proper for
review and approval.
Based on this provision, it is only in cases where the NGAO II Director

reverses, modifies, or alters the decision or ruling of the Auditor that the
decision should be elevated to the COA-CP for automatic review. Conversely,
when the NGAO II Director affirms or sustains the ruling of the Auditor,
further elevation and review are unnecessary. Thus, as pointed out by
Senior Associate Justice Estela Perlas-Bernabe (Justice Perlas-Bernabe)
during the deliberations of this case, the affirmance, when not anymore
appealed by an aggrieved party in accordance with the COA rules, will simply
lapse into finality. The reason for the automatic review provision is palpable:
the COA-CP is tasked to resolve the seeming conflict between the Auditor's
and the Director's rulings to arrive at a proper conclusion on an audit case.
However, if no conflict exists, then there is no need for the COA-CP to
47
Brillantes v. Castro, 99 Phil. 497, 503 (1956).
48
The Special Audit Team, Commission on Audit v. Court of Appeals and Government Service
Insurance System, 709 Phil. 167, 183 (2013).
Decision ~.. 9- G.R. No. 218461
automatically review the matter since both the Auditor and Director are
already in agreement.
In this case, the Auditor lifted the original disallowance, and this
decision was sustained by the NGAO II Director. Thus, in the final analysis,
both the Auditor and Director were in agreement on the lifting of the
disallowance, which negates the application of Section 6, Rule V of the 1997
COA Rules of Procedure.
The EEI/Manalo Joint Venture, as one of the persons held liable for the
disallowed amount, wrote the Letter dated December 12, 1997 to the COA
Auditor assailing the issuance ofND No. 97-011-102 (DOTC) (95). Treating
the letter as a request for reconsideration, the COA Auditor eventually
recommended the total lifting of the disallowance through a 4th Indorsement
dated January 31, 2000. In tum, this recommendation was sustained in full by
the NGAO II Director in a 5th lndorsement dated July 19, 2001. 49
Given that the NGAO II Director decided to sustain the lifting of the
disallowance, petitioner correctly pointed out that the elevation of the NGAO
II Director's ruling to the COA-CP was not required under Section 6, Rule V
of the 1997 COA Rules of Procedure. Hence, since the NGAO II Director's
decision to sustain the Auditor's recommended lifting of disallowance was
not anymore subjected to an appeal, the same had already lapsed into finality.
As such, the conditions for the automatic review provision under the COA
Rules was not validly met. Consequently, COA gravely abused its discretion
in reinstating the same.
Likewise, We share the observation of Justice Perlas-Bernabe that the

COA's reinstatement of the notice of dis allowance came after the lapse of an
inordinate period of almost ten (10) years. \vnile the decision of the NGAO
II Director was issued on July 19, 2001, the reinstatement of the COA was
made only on December 13, 2010. Undoubtedly, it would be clearly unjust to
resurrect a money claim against petitioner when an unreasonable length of
time had already passed.
Accordingly, We rule that the lifting of ND No. 97-011-102 (DOTC)

(95) dated June 18, 1997 by the NGAO H Director in the 5th Indorsement is
final, immutable and unalterable. As such, COA should not have included the
said notice of disallowance when it resolved the appeal ofDOTC concerning
the disallowance covered by ND No. 98-004-102 (DOTC) (96). Simply
because the resolution of the two notices of disallowance was premised on the
same issue concerning the interpretation of the applicability of P.D. No. 1594
to foreign-assisted projects, should not authorize the automatic application of
a later issuance; now carrying a different interpretation, to reverse a previous
49
Rollo, p. 93.
Decision 10, G.R. No. 218461
issuance. This is especially true in this case when the previous issuance
involving ND No. 97-011-102 (DOTC) (95), with petitioner relying on the
NGAO II Director's ruling that P.D. No. 1594 is not applicable to foreign-
assisted projects, has already attained :finality. Considerations of due process
dictates that petitioner should not be hailed back to a proceeding that has
already absolved him of liability because of a sudden change in the
interpretation of a law, more so, when made in a proceeding involving a
different notice of disallowance. As held in Social Securiry System v. Jsip: 50
When a final judgment is executory, it becomes immutable and

unalterable. It may no longer be modified in any respect either by the court
which rendered it or even by this Court. The doctrine is founded on
considerations of public policy and sound practice that, at the risk of
occasional errors, judgments must become final at some definite point in
time.
Hence, the COA-CP is precluded from issuing Decision No. 2010-133

dated December 13, 2010 and Resolution No. 2015-135 dated April 6, 2015,
insofar as it reinstated and affirmed ND No. 97-011-102 (DOTC) (95) dated
June 18, 1997.
There is no malice, bad faith or

negligence in the issuance of
Variation Order Nos. 5, 7 and 8
We hasten to point out that while main reason for the issuance of
the two notices of disallowance concerns the interpretation of the applicability
of P.D. No. 1594 to foreign-assisted projects, we must exercise judicial
restraint in issuing a ruling thereon, for two reasons: Firstly, the interpretation
given by the COA NGAO Director II has already attained :finality insofar as
ND No. 97-011-102 (DOTC) (95) is concerned. This already constitutes the
law of the case and could no longer be the subject of an appeal. Secondly, we
could not rule on the different interpretation subsequently adopted by the
COA in ND No. 98-004-102 (DOTC) (96) considering that the instant case
was brought by petitioner, whose legal standing in court extends only insofar
as ND No. 97-011-102 (DOTC) (95) is concerned.
Nonetheless, even if We examine the assailed COA Decision and

Resolution concerning ND No. 97-011-102 (DOTC) (95) and apply the
provisions of P.D. No. 1594, petitioner would still be absolved from liability.
During the construction of the project, the DOTC issued Variation Orders in
the total amount of P7,450,855.91. 51 This increased the total actual amount of
the project, 52 as follows:
50
549 Phil. 112, 116 (2007).
51
Rollo, p. 5.
52
Id. at 41.
Decision ., 11 · G.R. No. 218461
Original Project Cost P347,000,005

Add: Cost on Variation Orders 7,450,855
Total Project Cost P354,450,860
The COA only allowed a project cost of P300,498,905.87. Thus, the

Excess Project Cost, as per COA's finding, is P53,951,954.13, 53 computed as
follows:
Total Project Cost P354,450,860.00

Adq: COA-Allowed Project Cost 300,498,905.87
Excess Project Cost P53,951,954.13
It must be pointed out that the excess on the cost of the Variation Orders
is only a portion of the aforementioned ·Excess Project Cost. With specific
reference to the Variation Orders, the COA found that these are excessive by
an amount of PS,210,744.29, 54 computed as follows:
Cost on Variation Orders P7,450,85 5 .00

Less: COA-Allowed Cost on Variation Orders 2,240,110.71
Excess Cost on Variation Orders P5,210, 744.29
The Variation Orders found to be in excess of the COA-allowed cost

are as follows: (i) Variation Order No. 5, which sought to change the original
design of the preparation/landing wharf; (ii) Variation Order No. 7, which
sought to change the design of the pavement and landscaping, and
construction of certain parts of the drainage/sewerage system, fresh water
supply, and masonry works; and (iii) Variation Order No. 8, which sought to
change the quantity and materials of parts of the drainage system, fresh water
supply, wharf, and breakwater. 55 The other Variation Orders were not raised
in issue in this petition.
Here, petitioner, as the project engineer, was responsible for reviewing

the amounts of variation orders in Variation Order Nos. 5, 7 and 8. We quote
the April 6, 2015 COA Resolution, thus:
It can be gleaned from the above computation that the amounts of

the variation orders reviewed by Mr. Patdu as Project Engineer were part of
the total project cost, a portion of which was found excessive and disallowed
in audit. Mr. Patdu failed to diligently review the variation orders which
resulted in the overpricing of the project[.! However, his liability shall only
53
Id.
54
Id.
55
id. at 6.
be on the excess costs for the variation orders he reviewed, in the total
amount of [P]S,210,744.29. 56
Petitioner explains that Variation Order Nos. 5, 7 and 8, which he

reviewed as the Project Engineer of the project, were necessary and are
reasonable. 57
We agree.
It bears pointing out that variation orders per se in government

infrastructure contracts are not automatically invalid. In the IRR of P.D. No.
1594, variation orders involve the "increase/decrease in quantities or
reclassification of items [x x x] usually due to change of plans, design or
alignment to suit actual field conditions, or as a result of great disparity
between the preconstruction plans used for purposes of bidding and the 'as
staked plans' or construction drawings prepared after a joint survey by the
contractor and the government after award of the contract." 58 The IRR of P.D.
No. 1954 provides detailed requirements and standards for the execution,
implementation, and payment of variation orders. Relevantly, this provision
on variation orders has been reiterated in the 2016 Revised Implementing
Rules and Regulations of the Government Procurement Refonn Act, which
recognizes variation orders as:
x x x those orders issued by the procuring entity to cover any

"increase/decrease in quantities, including the introduction of new work items
that are not included in the original contract or reclassification of work items
that are either due to change of plans, design or alignment to suit actual field
conditions resulting in disparity between the preconstruction plans used for
purposes of bidding and the 'as staked plans' or construction drawings
prepared after a joint survey by the contractor and_ the Government after
award of the contract, provided that the cumulative amount of the positive or
additive Variation Order does not exceed ten percent (10%) of the original
contract price. 59
In short, vanat1on orders are necessary adjustments to construction

projects, and as long as they are within the general scope of the project and
are compliant with the relevant audit and procurement rules, they are
permissible.
In this case, the vanat10n orders at issue sought to introduce

adjustments to construction works relating to the fishing port, specifically
adjustments in the design of the preparation/landing wharf, the design of the
pavement and landscaping, construction of certain parts of the
56
Id. at 41.
57
Id. at 15-23.
58
Section III.CI.1.1, IRR of P.D. No. 1594.
59
Annex E (Contract Implementation Guidelines for the Procurement ofInfrastructure Projects),
2016 Revised Implementing Rules and Regulations of the Government Procurement Reform Act.
Decision 13 G.R. No. 218461
drainage/sewerage system, fresh water supply, and masonry works, and

change in the quantity and materials of parts of the drainage system, fresh
water supply, wharf, and breakwater. The relevance of these additional
adjustments to the project is not in question. The respondent likewise did
not dispute that these adjustments are within the general scope of the
project. What is merely at issue is the excess cost of such variation orders,
based on the COA estimate of the appropriate and justifiable cost of such
orders.
In this case, petitioner justified the necessity of issuing the Variation

Orders, as follows:
6.46.1. Variation Order No. 5 - Mobilization / Demobilization cost for

dredging equipment was included in the aforementioned variation order
because there is a new item of work, i.e., dredging, which is not included
in the original contract and there is a need to bring in said equipment to the
project site, hence the cost of mobilization/demobilization.
6.46.2. Variation Order No. 7 - The original contract calls for the use of
Concrete Asphalt for Roadway and Parking Area. Due to the absence of
supply of concrete asphalt in the area, the Contractor in his desire not to
delay the project, offered to use PCCP instead at the same cost as Concrete
Asphalt. The said substitution resulted to an increase in the thickness of
the pavement and a decrease in the thickness of the sub-base. This off-
setting resulted to a cost difference of Pl 0,902,431.33 in favour of the
government.
6.46.3. Variation Order No. 7E - Construction of Deepwell, the cost of

deepwell for Variation Order No. 3 cannot be adopted because they vary
in depth. Deepwell for V.O#3 is 42 meters deep, while for V.O. #7E, it is
75 meters deep.
6.46.4. Variation Order No. 8 - The discrepancy between the quantity

take-off and the B0Q resulted to an overestimate of quantities in V.O.
No. 8, however, this [sic] quantities were rectified in the Final
Quantification. 60
Notably, these justifications were favorably considered by the Auditor

when he recommended the lifting of (ND) No. 97-011-102 (DOTC) (95). 61
60
Rollo, p. 22 (citing the letter dated December 12, 1997).
61
Id. at 43.
With respect to the civil liability imposed for the excess cost of the
variation orders, Sections 38 62 and 43 63 of the Administrative Code, 64 as
interpreted in prevailing case law, 65 provides that the civil liability of
approving/authorizing public officers for disallowances issued by the COA
will only arise upon a clear showing of bad faith, malice, or gross negligence.
Otherwise, such officers are presumed to have acted within the regular
performance of their official functions and in good faith, and hence, are not
accountable for the return of disallowed amounts.
In disallowances involving unlawful or irregular government contracts,

the parameters on determining the civil liability of approving/authorizing
officers are reflected under Rules 2 (a) and (b) of the recently established
guidelines in Torreta v. Commission on Audit: 66
Accordingly, we hereby adopt the proposed guidelines on return of

disallowed amounts in cases involving unlawful/irregular government
contracts submitted by herein Justice Perlas-Bernabe, to wit:
1. If a Notice of Disallowance is set aside by the Court, no return shall be

required from any of the persons held liable therein.
2. If a Notice of Disallowance is upheld, the rules on return are as follows:
a. Approving and certifying officers who acted in good

faith, in the regular performance of official functions, and
with the diligence of a good father of the family are not
civilly liable to return consistent with Section 38 of the
Administrative Code of 1987.
b. Pursuant to Section 43 of the Administrative Code of

1987, approving and certifying officers who are clearly
shown to have acted with bad faith, malice, or gross
negligence, are solidarily liable together with the recipients
for the return of the disallowed amount.
c. The civil liability for the disallowed amount may be reduced

by the amounts due to the recipient based on the application of
the principle of quantum meruit on a case to case basis.
d. These rules are without prejudice to the application of the

more specific provisions of law, COA rules and regulations,
62
Section 38. Liability of Superior Officers. - (1) A public officer shall not be civilly liable for acts
done in the performance of his official duties, unless there is a clear showing of bad faith, malice or gross
negligence.
63
Section 43. Liability for Illegal Expenditures. - Every expenditure or obligation authorized or
incurred in violation of the provisions of this Code or of the general and special provisions contained in the
annual General or other Appropriations Act shall be void. Every payment made in violation of said provisions
shall be illegal and every official or employee authorizing or making such payment, or taking part therein,
and every person receiving such payment shall be jointly and severally liable to the Government for the full
amount so paid or received.
64
Executive Order No. 292, entitled "Instituting the 'Administrative Code ofl 987"' (August 3, 1988).
65
See Madera v. Commission on Audit, G.R. No. 244128, September 8, 2020.
66
G.R. No. 242925, November 10, 2020.
Decision . 15 G.R. No. 218461
and accounting principles depending on the nature of the

government contract involved. 67
Herein, as pointed by Justice Perlas-Bernabe, during the deliberations

of this case, apart from the statement that "[petitioner] failed to diligently
review VO Nos. 5, 7, and 8 which resulted in the overpricing of the project as
computed by the [COA-STFFP]," there was nothing in COA's ruling that
specifies any acts or omissions of petitioner amounting to bad faith, malice,
or gross negligence relative to his participation on the project. 68 Indeed, in
Daplas v. Department of Finance, 69 We ruled that "[a]n act done in good
faith, which constitutes only an error of judgment and for no ulterior motives
and/or purposes [x xx] is merely Simple Negligence." Accordingly, the lack
of specific factual determination on the petitioner's bad faith, malice, or gross
negligence is fatal to the COA's finding of his civil liability.
Moreover, petitioner justified the necessity of the Variation Orders by

identifying the technical adjustments and rectifications made during the
course of the project, which resulted in additional project costs. 70 These were
not rebutted by the respondent in its Comment.
Perforce, in view of the foregoing, petitioner's civil liability in ND No.

97-011-102 (DOTC) (95) should not be reinstated.
ACCORDINGLY, the instant petition is PARTIALLY GRANTED.

The December 13, 2010 Decision and April 6, 2015 Resolution No. 2015-135
of the Commission on Audit are REVERSED and -SET ASIDE insofar as
ND No. 97-011-102 (DOTC) (95) is concerned. Notice of Disallowance No.
97-011-102 (DOTC) (95) is hereby LIFTED.
SO ORDERED.
JHOS~OPEZ
Associate Justice
67
Id., emphases supplied.
68
Reflections, p. 11.
69
808 Phil. 763, 774 (2017).
70
Rollo, p. 30.
Decision- , .. 16, G.R. No. 218461
vVECONCUR~
---
{fr '
./>UIML ~rW'rv ~
iA(J_~
'1.liERLAS-BERNAB
Associate Justice
AlVI
-• · .:Assooiate Justice
HEN.
:~=~ Associate:Justke .
OSARIO
Decision . 17 G.R. No. 218461
CERTIFICATION
Pursuant to Section 13, Article VIII of the Constitution, I certify that

the conclusions in the above Decision had been reached in consultation before
the case was assigned to the writer of the opinion of the Court.
~
~_._,, ... " G. GESMUNDO
EN BANC
G.R. No. 218461 - ILDEFONSO T. PATDU, JR., Petitioner v.

COMMISSION ON AUDIT, Respondent.
Promulgated:
September 14, 2021
CONCURRING OPINION
PERLAS-BERNABE, J.:
I concur.
Petitioner Ildefonso T. Patdu, Jr. (Patdu, Jr.) filed the instant petition
assailing the Decision 1 dated December 13, 2010 in Decision No. 2010-133
and the Resolution dated April 6, 2015 2 in Decision No. 2015-135 of
respondent Commission on Audit (COA), which among others: (a) reinstated
the Notice of Disallowance (ND) No. 97-011-102 (DOTC) (95) dated June
18, 1997 (ND 95) disallowing the excessive costs of construction of the Davao
Fishing Port Complex (the Project) in the total amount of ?53,951,955.03 3 for
violating the rule on unreasonable excessiveness of government infrastructure
contracts pursuant to Presidential Decree (PD) No. 1594 and its implementing
rules and regulations (IRR); and (b) held Patdu, Jr., among other persons,
civilly liable for the portion of P5,210,744.29 corresponding to the Variation
Orders (VO) he reviewed that were found to be infirm. 4
Pertinent portions of the disputed ND and assailed COA rulings read:
ND No. 97-011-102 (DOTC) (95) dated June 18, 1997 5
PAYEE AMOUNT PERSONS LIABLE FACT AND/OR

DISALLOWED REASONS FOR
DISALLOWANCE
EEI/JE P53,951,955.03 PBAC for the award of the Excess amount after
Manalo contract. re-evaluation of
Construction 1. Jose R. Valdecanas PMO justification on
Joint -Chairman the result of COA
Venture 2. Cesar T. Valbuena technical review of
Rollo, pp. 28-35. Signed by Chairman Reynaldo A. Villar and Commissioners Juanito G. Espino, Jr. and
Evelyn R. San Buenaventura.
2
Id. at 36-43. Signed by Commissioners Heidi L. Mendoza and Jose A. Fabia.
3
"P53,95 l ,954.02" in the dispositive portion of April 6, 2015 Resolution; id. at 42.
4
See id. at 40-42.
5
Id. at 70; emphasis supplied.
Concurring Opinion 2 G.R. J\fo. 218461
-Member the contract for the

3. Wilfredo M. Trinidad construction of
-Member Davao Fishing Port.
4. Florencio T. Aricheta
-Member
5. The Consultant:
PCI/Basic which
prepared the agency
estimate.
6. Dir. Samuel C. Custodio
- Project Director
7. Ildefonso Patdu
- Project Manager.
Responsible for the
review of variation
orders.
8. EEI/JE Manalo
construction Joint Venture
COA Decision No. 2010-133 dated December 13, 2010
WHEREFORE, premises considered, the herein appeal is

DENIED. Accordingly, LAO-N Decision No. 2005-039 and LAO-N
Resolution No. 2005-039A denying the request to lift ND No. 98-004-102
(DOTC) (96) are hereby AFFIRMED. Likewise, the 5th Indorsement dated
July 19, 2001 of the Director of then NGAO II lifting ND No. 97-011-102
(DOTC) (95) is hereby SET ASIDE. The decision of the DOTC Department
Auditor disallowing the project cost difference/excess is hereby
REINSTATED.
The incumbent Auditor is directed to inform the Management and

the persons liable of the reinstated disallowance. 6 (Underscoring supplied)
COA Decision No. 2015-135 dated April 6, 2015
Consequently, the liability of Mr. Ildefonso T. Patdu, Jr. under ND

No. 97-011-102 (DOTC) (95) is hereby AFFIRMED. However, Mr. Patdu
should only be held liable for the excessive costs in the variation orders he
reviewed, specifically, Variation Order Nos. 5, _7 and 8, in the total amount
of [P]S,210,744.29.
The rest of the persons liable under ND Nos. 97-011-102 (DOTC)

(95) dated June 18, 1997 and 98-004-102 (DOTC) (96) dated May 28, 1998,
and COA Decision No. 2010-133 dated December 13, 2010, shall remain
to be liable therefor. 7 (Emphasis and underscoring supplied)
Notably, records show that the subject matter of the assailed rulings
actually pertains to the appeal of the Notice of Disallowance (ND) No. 98-
004-103 (DOTC) (96) (ND 96) which similarly relates to irregularities
6
Id. at 34.
7
Id. at 42.
concurring Opinion 3 G.R. No. 218461
concerning the Davao Fishing Port Complex project but involves a different
transaction and a different set of parties. 8 In this regard, it should be
highlighted that petitioner was not a party to ND 96 and thus, was not
originally privy to the appeal before the COA Proper, which was brought by
parties held civilly liable under the said disallowance. As may be gathered
from the assailed COA rulings, the reinstatement of ND 95 - and along with
it, Patdu, Jr.'s liability thereunder - was made only as a side incident in
the appeal of ND 96. 9
In his petition before the Court, Patdu, Jr. essentially argues that the
lifting of ND 95 by the Director of the National Government Audit Office II
(NGAO Director) through the 5th Indorsement dated July 19, 2001 had already
attained finality. Thus, he posits that the COA gravely abused its discretion in
reinstating the said disallowance following the doctrine of finality or
immutability of judgments. 10 However, notwithstanding the fact that Patdu
Jr. 's interest is limited to ND 95, he nevertheless prayed for the lifting and
setting aside of both ND 95 and ND 96 in the prayer of his petition. The COA,
on the other hand, primarily asserts that it is given wide latitude by the
Constitution in terms of its audit functions. 11
At the onset, it is well to note that, since he was not an aggrieved party
insofar as ND 96 is concerned, Patdu Jr. lacks the requisite standing to
question the same before the Court. 12 "Necessarily, the person availing of a
judicial remedy must show that he possesses a legal interest or right to it,
otherwise, the issue presented would be purely hypothetical and academic." 13
Hence, the ponencia is correct in limiting its ruling only to issues concerning
ND95.
The doctrine of immutability of judgments

applies in the instant case.
Well-settled is the rule that once a judgment has become final and
executory, it may no longer be modified in any respect. In Heirs of Gabule v.
Jumuad, 14 the Court held that:
It is a hornbook rule that once a judgment has become final and

executory, it may no longer be modified in any respect, even if the
modification is meant to correct an erroneous conclusion of fact or law, and
regardless of whether the modification is attempted to be made by the court
rendering it or by the highest court of the land, as what remains to be done
See id. at 31-34.

9
See id.
10
See id. at 10-15.
11
See Comment dated December 17, 2015; id. at 122-123.
12
See Association of Medical Clinics for Overseas Workers, Inc. v. GCC Approved Medical Centers
Association, Inc., 802 Phil. 116 (2016).
13
Id. at 151-152.
14
See G.R. No. 211755, October 7, 2020.
J
Concurring Opinion 4 G.R. No. 218461
is the purely ministerial enforcement or execution of the judgment. This is

known as the doctrine of immutability of judgments. x x x. 15
Notably, the doctrine of immutability or finality of judgments is not a

mere technical rule of procedure sourced solely from the Rules of Court, but
is primarily a general principle borne from substantive considerations.
Corollary to the well-enshrined policy that litigation must end at some point, 16
it ensures a winning party's right to reap the benefits of the finality of a
favorable judgment. As held in numerous cases on the subject: 17
In staying its own hand in disturbing final judgments, this Court

emphasized that the immutability of final judgments is not a matter of
mere technicality, "but of substance and merit." In Pena v. Government
Service Insurance System:
[I]t is axiomatic that final and executory judgments can no

longer be attacked by any of the parties or be modified,
directly or indirectly, even by the highest court of the land.
Just as the losing party has the right to file an appeal within
the prescribed period, so also the winning party has the
correlative right to enjoy the finality of the resolution of
the case.
xxxx
The rule on finality of decisions, orders or

resolutions of a judicial, quasi-judicial or administrative
body is "not a question of technicality but of substance
and merit," [as its) underlying consideration [isl . . .
protecti[ng] ... the winning party['s substantive rights] .
. . Nothing is more settled in law than that a decision that
has acquired finality becomes immutable and unalterable
and may no longer be modified in any respect even if the
modification is meant to correct erroneous conclusions of
fact or law and whether it will be made by the court that
rendered it or by the highest court of the land. 18 (Emphases
and underscoring supplied)
In the instant case, the ponencia correctly holds that the doctrine of
immutability of judgments is applicable to the decision of the NGAO
Director. 19 As the Court has categorically declared in past cases, the said
doctrine equally applies to judgments rendered by quasi-judicial bodies. 20
Verily, the interest of the winning party to reap the benefits of a judgment
remains the same whether in the context of a judicial or an administrative
proceeding.
15
Id., citing One Shipping Corporation v. Penafiel, 751 Phil. 204, 210 (2015).
16
See Zarate v. Director of Lands, 39 Phil. 747, 749 (1919).
17
See Civil Service Commission v. Mora/de, 838 Phil. 840 (2018); Torres v. Philippine Amusement and
Gaming Corp., 677 Phil. 672 (2011); Fua, Jr. v. COA, 622 Phil. 368 (2009); and Pena v. Government
Service Insurance System, 533 Phil. 670 (2006).
18
Civil Service Commission v. Mora/de, id. at 855, citing Pena v. Government Service Insurance System,
id. at 683-690.
19
Ponencia, p. 8.
20
See Civil Service Commission v. Mora/de, supra at 856.
The COA gravely abused its discretion in

reinstating ND 95, which lifting should already
be deemed final and immutable.
The foregoing general premises notwithstanding, it is important to

highlight that the manner by which a ruling attains finality remains to be
governed by the applicable laws or rules of procedure of the pertinent
adjudicating body.
For judicial cases in which the Rules of Court apply, Rule 36

(Judgments, Final Orders and Entry Thereof) in relation to Rule 39
(Execution, Satisfaction, and Effect of Judgments) are the primary governing
rules with respect to the attainment of finality. On the other hand, for COA
cases, a ruling attains finality based on the COA' s own rules of procedure.
Specifically, Section 6, Rule V of the 1997 COA Revised Rules of Procedure21
(COA Rules), which was in effect during the pendency of the case, provides:
Section 6. Power of Director on Appeal. - The Director may

reverse, modify, alter, or affirm the decision or ruling of the Auditor.
However, should the Director render a decision reversing, modifying or
altering the decision or ruling of the Auditor, the Director shall, within ten
( 10) days, certify the case and elevate the entire record to the Commission
Proper for review and approval.
As may be gleaned from the above-cited provision, it is only in cases

where the NGAO Director reverses, modifies, or alters the decision or ruling
of the Auditor that the decision should be elevated to the COA Proper for
automatic review. Conversely, when the NGAO Director affirms or sustains
the ruling of the Auditor, further elevation and review are unnecessary. As
such, the affirmance, when not anymore appealed by an aggrieved party in
accordance with the COA rules, will simply lapse into finality. The reason for
the automatic review provision is palpable: the COA Proper is tasked to
resolve the seeming conflict between the Auditor and Director's rulings to
arrive at a proper conclusion on an audit case. However, if no conflict exists,
then there is no need for the COA Proper to automatically review the matter
since both the Auditor and Director are already in agreement.
In this case, the NGAO Director sustained the COA Auditor's 4th
Indorsement dated January 31, 2000 recommending the lifting of the
disallowance. Considering that the NGAO Director's decision was not
appealed, the same had already lapsed into finality. Notably, this is, in fact,
the thrust of Patdu, Jr.'s petition before this Court:
21
Approved January 23, 1997.
6.4. It must be recalled that the Auditor favorably considered Mr.

Custodio's Motion for Reconsideration of ND No. 97-011-102 (DOTC)
(95). Guided by Sec. 7, Rule IV, 1997 Revised Rules of Procedure of the
COA, the Auditor elevated his decision lifting the audit disallowance to the
Director, NGAO II, for automatic review. Through his 4th Indorsement, the
Auditor recommended to the Director the lifting of the audit disallowance.
6.5. On review, NGAO II Director Tobias P. Lozada sustained the

decision of the Auditor to lift ND No. 97-011-102 (DOTC) (95). The
pertinent portion of his decision contained in a 5th Indorsement dated July
19, 2001 reads:
Premises considered, pursuant to the Revised CSE

Manual, this Office sustains the DOTC Auditor's decision
lifting the disallowance under ND No.97-011-102 (DOTC)
dated June 18, 1997 in the amount of [?]53,951,955.03.
6.6. It can be readily seen from the Decision of the Director,

NGAO II, that the latter did not reverse, modify or alter the decision
or ruling of the Auditor. Of pertinence to the said decision of the Director
is Section 6, Rule V, 1997 Revised Rules of Procedure of the COA, relating
to Appeal front Auditor to Director. Sec. 6 of the Rules reads:
RULEY
APPEAL FROM AUDITOR TO DIRECTOR
xxxx
Section 6. Power of Director on Appeal. - The

Director may reverse, modify, alter, or affirm the decision or
ruling of the Auditor. However, should the Director render a
decision reversing, modifying or altering the decision or
ruling of the Auditor, the Director shall, within ten (10) days,
certify the case and elevate the entire record to the
Commission Proper for review and approval.
6.7. From the foregoing provision, it is crystal clear that it is only

when the Director reverses, modifies or alters the decision or ruling of the
Auditor that the rule on automatic review by the Commission Proper sets
in. If the Director affirms the decision or recommendation of the
Auditor as in the present case, the rule on automatic review does not
filillly.
6.8. Considering that the Director affirmed the decision or ruling of

the Auditor to lift ND No. 97-011-102 (DOTC) (95), the rule on automatic
review provided under Section 6, Rule V of the 1997 Revised Rules of
Procedure of the COA did not set in. Accordingly, Director Lozada was
correct in not elevating the matter to the Commission Proper for Automatic
Review.
6.9. It must be accentuated that decision of the NGAO II Director

sustaining and affirming the decision of the Auditor to lift ND No. 97-011-
102 (DOTC) (95) remained uncontested for almost 10 years. This being so,
it has attained finality. Consequently, it became immutable and
unalterable. 22 (Emphases and underscoring supplied)
22
Rollo,pp.11-12.
Patdu, Jr.' s foregoing contention is consistent with what appears on

record. As therecords show, the contractor, i.e., EEI/JE Manalo Construction
Joint Venture, wrote a Letter dated December 12, 1997 to the COA Auditor
assailing the issuance of ND 95. As stated, the COA Auditor treated the letter
as a request for reconsideration and eventually recommended the total lifting
of the disallowance through a 4th Indorsement dated January 31, 2000. The
NGAO Director, in tum, sustained in full this recommendation in a 5th
Indorsement23 dated July 19, 2001, which reads in relevant part:
In a 4 th Indorsement dated January 31, 2000, the DOTC Auditor

recommended the total lifting of the disallowance amount to
P53,951,955.03
xxxx
In accordance with the Revised Manual on CSB, the lifting of the

ND's should be concurred in by the Director of the issuing Auditor.
xxxx
Premises considered, pursuant to the Revised CSB Manual, this

Office sustains DOTC Auditor's decision lifting the disallowance under
ND No. 97-011-102 (DOTC) dated June 18, 1997 in the amount of
P53,951,955.03. 24 (Emphases supplied)
Based on the foregoing disposition, Patdu, Jr. correctly averred that the
elevation of the NGAO ruling to the COA Proper was not required under
Section 6, Rule V of the COA Rules. Hence, as the same was not anymore
appealed, the NGAO Director's decision had lapsed into finality.
At this juncture, it is noteworthy to also highlight that the COA Proper' s

reinstatement came after the lapse of an inordinate period of almost ten (10)
years. To recall, while the decision of the NGAO Director was issued way
back on July 19, 2001, the reinstatement by the COA Proper was made only
on December 13, 2010. Undoubtedly, aside from its impropriety, the COA
Proper's course of action is riddled with inordinate delay.
For its part, the COA, in its Comment, 25 merely traverses this issue by
asserting that it is given wide latitude by the Constitution in terms of its audit
functions. However, the COA should be reminded that while it does enjoy
wide latitude in conducting its audit, it should also not arbitrarily apply its
own rules to the undue prejudice of the public. It should be stressed that, in
past cases, 26 the Court had already exhorted quasi-judicial tribunals to "be the
first to respect and obey its own rules, if only to provide the proper example
23
Id. at 92-94.
24
Id. at 93-94 ..
25
Dated December 17, 2015. Id. at 114-126.
26
See Basarte v. Commission on Elections, 551 Phil. 76, 84-85 (2007), citing Agbayani v. Commission on
Elections, 264 Phil. 861, 868 (1990). See also Republic v. Sandiganbayan, 328 Phil. 21 0 (1996).
to those appearing before it and to avoid all suspicion of bias or arbitrariness

in its proceedings." 27
Given the circumstances of this case where automatic review is not

warranted under the COA Rules and further considering the lapse of almost
ten (10) long years from the time Patdu, Jr. was led on to believe that the
disallowance had already been lifted, it would be the height of injustice to
sustain the COA's blanket assertion of its authority to audit without any
reasonable or fair regard to the application of its own rules to the parties before
it. As the records itself bear out, the lifting of ND 95 had already lapsed into
finality and, hence, should not have been revived by the COA Proper based
on its own caprice and whim. Accordingly, the COA committed grave abuse
of discretion in reinstating the same.
At any rate, Patdu, Jr. 's civil liability for the

disallowance remains suspect based on
prevailing jurisprudence.
At any rate, even if one were to discount the issue of finality, Patdu, Jr.
should not be held civilly liable under prevailing jurisprudence.
Under Section 38, 28 Chapter 9, Book I and Section 43, 29 Chapter 5, Book
VI of the Administrative Code, 30 as interpreted in prevailing case law, 31 the
civil liability of approving/authorizing public officers for disallowances
issued by the COA will only arise upon a clear showing of bad faith, malice,
or gross negligence. Otherwise, such officers are presumed to have acted
within the regular performance of their official functions and in good faith,
and hence, are not accountable for the return of disallowed amounts.
27
Agbayani v. Commission on Elections, id.
28
Which reads:
Section 38. Liability ofSuperior Officers. -( 1) A public officer shall not be civilly
liable for acts done in the performance of his official duties, unless there is a clear showing
of bad faith, malice or gross negligence.
xx xx (Emphases and underscoring supplied)
29
Which reads:
Section 43. Liability for Illegal Expenditures. - Every expenditure or obligation
authorized or incurred in violation of the provisions of this Code or of the general and
special provisions contained in the annual General or other Appropriations Act shall be
void. Every payment made in violation of said provisions shall be illegal and every official
or employee authorizing or making such payment, or taking part therein, and every
person receiving such payment shall be jointly and severally liable to the Government
for the full amount so paid or received.
x x xx (Emphases and underscoring supplied)
30
Executive Order No. 292, entitled "Instituting the 'Administrative Code of 1987'" (August 3, 1988).
31
See Madera v. COA, G.R. No. 244128, September 8, 2020.
In disallowance cases involving government contracts, the foregoing

precepts are reflected under Rules 2 (a) and (b) of the guidelines recently
established in Torreta v. COA, 32 to wit:
Accordingly, we hereby adopt the proposed guidelines on return of

disallowed amounts in cases involving unlawful/irregular government
contracts submitted by herein Justice Perlas-Bernabe, to wit:
1. If a Notice of Disallowance is set aside by the Court, no

return shall be required from any of the persons held liable
therein.
2. If a Notice of Disallowance is upheld, the rules on return

are as follows:
a. Approving and certifying officers who acted in

good faith, in the regular performance of official
functions, and with the diligence of a good father
of the family are not civilly liable to return
consistent with Section 38 of the Administrative
Code of 1987.
b. Pursuant to Section 43 of the Administrative Code

of 1987, approving and certifying officers who are
clearly shown to have acted with bad faith, malice,
or gross negligence, are solidarily liable together
with the recipients for the return of the disallowed
amount.
c. The civil liability for the disallowed an1ount may be

reduced by the amounts due to the recipient based on
the application of the principle of quantum meruit on a
case to case basis.
d. These rules are without prejudice to the application of

the more specific provisions of law, COA rules and
regulations, and accounting principles depending on
the nature of the government contract involved.
(Emphases and underscoring supplied)
In holding Patdu, Jr. civilly liable for the disallowance, the COA Proper
in this case advanced the following ratiocination:
Mr. Patdu was included among the persons liable under ND No.
97-011-102 (DOTC) (95) for reviewing the variation orders. Based on
Decision No. 2010-133 dated December 13, 2010, the project cost was
found to be excessive by [P]53,951,954.13, computed as follows:
xxxx
It can be gleaned from the above computation that the amounts of

the variation orders reviewed by Mr. Patdu as Project Engineer were
part of the total project cost, a portion of which was found excessive
32
See G.R. No. 242925, November 10, 2020.
and disallowed in audit. Mr. Patdu failed to diligently review the

variation orders which resulted in the overpricing of the project as
computed by the COA-STTFP. However, his liability shall only be on the
excess costs for the variation orders he reviewed, in the total amount of
[P]S,210,744.29. 33 (Emphases and underscoring supplied)
However, apart from the statement that "[petitioner] failed to diligently

review [VO Nos. 5, 7, and 8] which resulted in the overpricing of the project
as computed by the COA-[Special Task Force on Flagship Project (STFFP)],"
the COA Proper's ruling was silent with respect to Patdu, Jr. 's bad faith,
malice, or gross negligence relative to his participation in the project.
More significantly, contrary to the COA Proper's action, Patdu, Jr.

amply justified his participation with respect to the questioned VOs relative
to the Davao Fishing Port Complex project:
6.45. The construction of the project was already underway when

petitioner reviewed the "variations orders". Significantly, these orders were
recommended by the consultants during the construction stage as they were
necessary in the implementation of the project.
6.46. It must be recalled that in his letter dated December 12, 1997,
Mr. Custodio presented the justifications on these Variation Orders, to wit:
6.46.1. Variation Order No. 5 - Mobilization I

Demobilization cost for dredging equipment was included in the
aforementioned variation order because there is a new item of
work, i.e., dredging, which is not included in the original contract
and there is a need to bring in said equipment to the proiect site,
hence the cost of mobilization/demobilization.
6.46.2. Variation Order No. 7-The original contract calls

for the use of Concrete Asphalt for Roadway and Parking Area.
Due to the absence of supply of concrete asphalt in the area, the
Contractor in his desire not to delay the proiect, offered to use
PCCP instead at the same cost as Concrete Asphalt. The said
substitution resulted to an increase in the thickness of the
pavement and a decrease in the thickness ofthe sub-base. This off-
setting resulted to a cost difference of PJ0,902,431.33 in favour of
the government.
6.46.3. Variation Order No. 7E - Construction of

Deepwell, the cost ofdeepwell for Variation Order No. 3 can not
be adopted because they vary in depth. Deepwell for V.O #3 is 42
meters deep, while for V.O. #7E, it is 75 meters deep.
6.46.4. Variation Order No. 8 - The discrepancy between

the quantity take-off and the BOO resulted to an overestimate of
quantities in V.O. No. 8, however, this quantities were rectified in
the Final Quantification.
33
Rollo, p. 41.
✓
6.4 7. Apparently, these justifications were favourably considered by

the Auditor when he recommended the lifting of (ND) No. 97-011-102
(DOTC) (95) which included the audit disallowances on these variations
orders.
6.48. Significantly, the justifications were not refuted by the STFFP.

There was nothing from the records to dispute the justification that
Variation Order No. 5 included an item of work that was included in the
original contract. Since this was a new item of work that requires the use of
equipment, it is imperative to mobilize these equipment to the project site.
Obviously, they will be demobilized after the completion of the variation
order. There was also nothing to show that the equipment mobilized for the
original contract included the same equipment used for the new item of
work covered by Variation Order No. 5.
6.49. As has been explained in the December 12, 1997 letter of Mr.
Custodio, the contractor used Portland Cement Concrete Pavement instead
of concrete asphalt because of the absence of supply of the latter in the area.
It was not disputed either that indeed Portland Cement Concrete Pavement
was used Roadway and Parking Area. Difference in thickness alone will not
sustain the audit disallowance covered by Variation Order No. 7 simply
because the use of Portland Cement Concrete Pavement on one hand, and
the use of concrete asphalt on the other hand, involved different scope of
work and different cost. 34 (Emphases and underscoring supplied)
Evidently, his justifications pertain to technical

adjustments/rectifications made during the course of the Project, which
resulted in additional costs to the government. To note, the foregoing
contentions were not rebutted by the COA in its Comment.
Case law explains that for negligence to be characterized as gross, the

breach of duty must be flagrant or palpable, otherwise a mere error of
judgment only amounts to simple negligence, which is compatible with the
defense of good faith:
Negligence is the omission of the diligence which is required by the

nature of the obligation and corresponds with the circumstances of the
persons, of the time, and of the place. In the case of public officials, there
is negligence when there is a breach of duty or failure to perform the
obligation, and there is gross negligence when a breach of duty is
flagrant and palpable. An act done in good faith, which constitutes only
an error of judgment and for no ulterior motives and/or purposes, as
in the present case, is merely Simple Negligence. 35
Hence, considering the prevailing jurisprudential parameters on civil

liability and taking into account Patdu, Jr.'s unrebutted defenses in his
petition, the imposition of civil liability on the latter's part cannot be
maintained.
34
Id. at 22-23.
35
Daplas v. Department of Finance, 808 Phil. 763, 774 (2017).
Concurring Opinion 12 G.R. 1-lo. 218461
In any event, as afore-discussed, since the 5th Indorsement dated July

19, 2001 issued by the NGAO Director had sustained the COA Auditor's
decision recommending the lifting of ND 9 5, the same was not required to be
elevated to the COA Proper. Such decision, therefore, had already lapsed into
finality. Consequently, Patdu, Jr.'s petition should be granted in part.
Accordingly, I vote to PARTIALLY GRANT the petition. The

Decision dated December 13, 2010 in Decision No. 2010-133 and the
Resolution dated April 6, 2015 in Decision No. 2015-135 of the Commission
on Audit are REVERSED and SET ASIDE insofar as Notice of
Disallowance (ND) No. 97-011-102 (DOTC) (95) dated June 18, 1997 is
concerned. The Notice of Disallowance (ND) No. 97-011-102 (DOTC) (95)
is hereby LIFTED.
~-
ESTELA ~ERLAS-BERNABE
Senior Associate Justice
REPUBLIC OF THE PHILIPPINES
SUPRE1\1E COURT
lVIaniia
EN BANC
DAISY D. PANAGSAGAN,
Complainant, BY: -f--,£/--l--+-f--''---,-:,r----
TiME1~~-.d---/-+,----#-\----
- versus- .C. No. 7733
ATTY. BERNIE E. PANAGSAGAN,

Respondent.
X------------------------------ X
NOTICE OF JUDGMENT
Sirs/Mesdames:
I am sending herewith copy of the Per Curiam Decision which was

promulgated on October 1, 2019, with the information that the middle initial "Y" is
corrected to "E" on pages 1 and 7 of the said decision. .
Very truly yours,
Clerk of Court
ATTY. EDEPIGO T. LITONG (x) ATTY. FLORENIO E. TIERRA, JR. (x)

Counsel for Complainant Counsel for Respondent
c/o Rm. 402 Dofia Amparo Building Rm. 201, 2 nd Fir., ACRE Bldg.
Espana, Sampaloc, Manila 137 Malakas Street, Diliman
Quezon City
DAISY D. PANAGSAGAN (x)
Complainant ATTY. BERNIE E. PANAGSAGAN (x)
No. 23 San Paulo Subdivision Respondent
St. John Street, Brgy. Nangka Isang Nayon c/o Dennis Panagsagan
Novaliches, Quezon City 3 VMN Compound, Potrero
Malabon City
-over-
Notice of Judgment -2- A.C. No. 7733
October 1, 2019
*ATTY.AMOR P. ENTILA (x) HON. JOSE C. MENDOZA (x)

Assistant Bar Confidant HON. NOEL G. TIJAM (x)
Office of the Bar Confidant HON. TORIBIO ELISES ILAO, JR. (x)
Supreme Court, Manila HON. FRANKLIN J.
DEMONTEVERDE (x)
**THE COURT ADMINISTRATOR (x) Members
Deputy Court Administrators Judicial and Bar Council
HON. RAUL B. VILLANUEVA (x) Supreme Court, Manila
HON. JENNY LIND R. ALDECOA-
DELORINO (x) ATTY. SOCORRO D'MARIE T.
HON. LEO T. MADRAZO (x) INTING (x)
Assistant Court Administrators JBC Executive Officer
HON. MARIA REGINA SECRETARIAT (x)
ADORACION FILOMENA M. Judicial and Bar Council
IGNACIO (x) Supreme Court, Manila
HON. LILIAN BARRIBAL-CO (x)
Supreme Court, Manila PUBLIC INFORMATION OFFICE (x)
OFFICE OF THE CHIEF ATTORNEY (x)
***INTEGRATED BAR OF THE PHILIPPINE JUDICIAL ACADEMY (x)
PHILIPPINES (x) LIBRARY(x)
15 Doiia Julia Vargas Avenue Supreme Court, Manila
Ortigas Office Complex, Pasig City
*Copy of this Decision to be attached to Atty. Bernie E. Panagsagan's personal record.
**Copy of this Decision for their information and guidance.
***Copy of this Decision for dissemination to all courts in the Philippines.

'f. ' ..
f'
i·
1.··
( 3&epublic of tbe ~bilippines
f $'upre1ne <tourt
;:!Flflanila
1•.·
f EN BANC
t DAISY D. PANAGSAGAN, A.C. No. 7733

Complainant,
Present:
BERSAMIN, C.J.
CARPIO,
PERALTA,
PERLAS-BERNABE,
LEONEN,
CAGUIOA,
- versus - REYES, A., JR.,
GESMUNDO,
REYES, J., JR.,
HERNANDO,
*CARANDANG,
LAZARO-JAVIER,
INTING, and.
f Q, ZALAMEDA, JJ.
ATTY. BERNIEY.fPANAGSAGAN,
Respondent. . Promulgated:
October 1, 2019
x-------------------------------------------------------------------- --------,&!'
DECISION
PERCURIAM:
Once again, the Court is confronted with the issue of gross immorality
being raised against a lawyer for turning his back on his legitimate wife and
family in order to cohabit with another woman.
The present a11ninistrative complaint for disbarmen\::was initiated by

Daisy D. Panagsagan against her husband, Atty., Bernie Y.pPanagsagan,
charging him with having become unfit to continue as a member of the Bar
by reason of his immorality, infidelity, and abandonment of his family.
• On official leave.
14
Decision 2 A.C. No. 7733
Antecedents
The Office of the Bar Confidant (OBC) summarized the facts in this
manner:
In her complaint, Daisy Panagsagan gave the following accounts:
Complainant got married to respondent on 18 December 2000. At

the start, the marriage was strong but respondent entered into an illicit
relationship with a fellow employee named Corazon Igtos at the Land
Transportation Franchising and Regulatory Board (LTFRB). Respondent
and Igtos begot two children born on May 2004 and July 2006.
Complainant avers that respondent's immoral conduct was known

not only by their officemates, but by the community. Their illicit affair
showing pictures of the romantic relations of respondent with his
paramour were uploaded in an online social networking site.
., On 3 November 2002, respondent packed his things and told

complainant he was leaving the conjugal home. When asked, respondent
only replied that he wanted to try a bachelor's life. On 2 December 2002,
I
respondent came home to complainant and stayed until the New Year.
..:
:i During this time, respondent told complainant that he cannot stay at home
'
anymore because of his love to his mistress, and he made complainant to
choose whether he spend the weekdays with his paramour or she file a
petition for declaration of nullity of their marriage, so that he can marry
Corazon Igtos. Complainant declined to choose.
On May 3, 2003, upon a tip from a friend, complainant found

respondent living with Corazon Igtos in San Rafael, Mandaluyong. Inside
their residence, complainant saw a picture of respondent with his
concubine together and took it. When respondent noticed the picture
missing, she asked complainant to return it but the latter refused.
Respondent then got mad and boxed complainant several times and
bumped her head against the cement wall. The mauling of complainant
was witnessed by their minor child who was with her. ·
On 24 May 2003, respondent returned to their house to get all the

things they acquired together as spouses. Since then, respondent never
returned home and instead decided to live for good with his concubine.
This time respondent completely abandoned complainant and their child.
Even the educational plan of their child and support has been stopped.
In his Answer, respondent alleges that it was complainant that left

the conjugal dwelling on 2003. He claims that marriage with complainant
was a mistake as she was difficult to live with due to her suicidal
tendencies, violeiitoutbursts and delusional episodes. He denies any extra-
marital affair with anybody more· so with Corazon Igtos. However,
respondent admits having .fathered Igtos' children. Respondent further
I
alleges that, while being sweethearts since 1993, respondent alleges that
he had constant quarrels with complainant owing to her attitude and worse
because of her alleged admitted infidelity with a certain Vhein with whom
15
complainant was allegedly living with. Respondent, while having doubts

with the paternity of their child, he nonetheless still married complainant
in 2000.
On February 2003, Respondent avers that it was the complainant

who was the one who asked for "a break and space" and told him that she
would need another place of her own. Complainant allegedly confessed of
having an illicit affair with a Jason Santos, a grandchild of her patient in
PGH. Enraged, respondent finally burned the bridge between him and
complainant. After a few days, respondent went back to the place of
complainant and took all of his personal belongings and tried to talk to her
regarding their conjugal properties. Complainant remained indifferent
even after respondent took their child and entrusted her under the
temporary care of his mother.
On June 2003, complainant forcefully took the child without

informing respondent. He never saw his child or was able to locate their
whereabouts. Sometime on June 2004, respondent was able to locate the
residence of complainant and their child and after a confrontational and
physical "tug-of-war", respondent relented as not to traumatize the child.
Weeks after, respondent learned that complainant moved out of the place,
presumably to hide the child from him. Since then, respondent has been
trying to locate complainant to no avail.
Within the same year, respondent converted to Islam and fell in

love with a woman. On January 2003, respondent chose his second partner
in life as a Muslim. 1
IBP Report and Recommendation
In his Report and Recommendation, 2 IBP Bar Discipline

Commissioner Edmund T. Espina found the respondent guilty of grossly
immoral conduct for having engaged in a scandalous and illicit relationship
with a woman by whom he sired two children during the subsistence of his
marriage with the complainant; that he had committed violence against the
complainant; that he had failed to provide support to his child with her; and
that he had failed to substantiate his allegations that the complainant had
borne suicidal and delusional tendencies, committed violent outbursts, and
engaged in adulterous affairs.
IBP Commissioner Espina observed that the respondent's disregard of

his obligations as husband and father had · made him unfit to remain as a
3
member of the Bar, and that he should be suspended from the practice of
law for two years. 4
!
.
Rollo, pp. 452-453.

Id. at 404-412.
Id. at 410.
Id. at 412.
16
On June 21, 2013, the IBP Board of Governors issued a resolution,

adopting and approving the recommendation of IBP Commissioner. 5
The complainant sought partial reconsideration, 6 arguing that the

respondent should instead be disbarred in view of the very grave acts that he
had committed.
In the extended resolution dated September 5, 2014, 7 the IBP Board of

Governors granted the complainant's motion for reconsideration, and
recommended the disbarment of the respondent, thusly:
WHEREFORE, premises considered, the Board resolves to

partially GRANT complainant's Motion for Reconsideration taking
into consideration the grossly immoral conduct of respondent in
maintaining an illicit affair with another woman and fathering two
children by her; by completely abandoning his family and for
converting himself to Islam with the intention to marry his paramour.
Thus, the Board resolves to AFFIRM witb modification Resolution
NO. XX-2013-715 dated 21 June 2013 and accordingly increase the
penalty of suspension for two years of Atty. Bernie Panagsagan to
DISBARMENT.
SO ORDERED. 8
OBC Report and Recommendation
On October 5, 2016, the Court referred the case to the Office of the
Bar Confidant (OBC) for evaluation, report and recommendation. 9
In compliance, the OBC submitted its Report and Recommendation, 10

wherein it concluded that the respondent's illicit affair with his mistress, the
violence committed against the complainant, and his refusal to support his
child with the complainant, constituted immoral conduct that warranted his
disbarment. 11
Issue
Should the respondent be disbarred from the practice of law due to

his immoral acts and abandonment of family?
l
5
Id. at 432-433.
6
ld.at413-416.
7
Id. at 428-431.
Id. at 431.
9
Id. at 450.
10
Id. at452-455.
11
Id. at 454.
17
"-
Ruling of the Court
We concur with the OBC's findings and recommendation that the

complainant had presented evidence sufficient to substantiate her allegation
that the respondent's acts constituted gross immorality.
The Code of Professional Responsibility mandates all lawyers to

possess good moral character at the time of their application for admission
to the Bar, and requires them to maintain such character until their
retirement from the practice of law. 12 Rule 1.01 and Rule 7. 03 of the Code
further state:
Rule 1.01 - A lawyer shall not engage in unlawful, dishonest,

immoral or deceitful conduct.
xxxx xxxx xxxx
Rule 7.03 - A lawyer shall not engage in conduct that adversely

reflects on his fitness to practice law, nor should he, whether in public or
private life, behave in a scandalous manner to the discredit of the legal
profession.
For a lawyer to be imposed the extreme penalty of disbarment for

immorality, the conduct complained of must not only be immoral, but must
be grossly immoral. Grossly immoral conduct is one that is so corrupt as to
constitute a criminal act, or so unprincipled as to be reprehensible to a high
degree or committed under such scandalous or revolting circumstances as to
shock the common sense of decency. 13 A married attorney's abandonment
of his spouse in order to live and cohabit with another unquestionably
constitutes gross immorality because it amounts to criminal concubinage or
adultery. 14
The respondent merely denied his immoral affair with the mistress,
albeit admitting having sired her two children. The denial was found to be
insincere, for the OBC astutely pointed out that:
Complainant have presented documentary evidence consisting of

the birth certificates of Vernie Mikhaela and Stephanie Beatriz, both
surnamed Panagsagan and the signed admission of paternity of respondent
to prove the fact that respondent sired two illegitimate children out of his
illicit affair with' ··Corazon Igtos. Such acknowledgment coming from
respondent negates his own claim !~at he did not have any extra-marital
relationship with Igtos. Complainant further gathered numerous
12
13
Advincula v. Advincula, A.C. No. 9226, June 14, 2016, 793 SCRA 236, 247.
Naragv. Narag, A.C. No. 3405, June 29, 1998, 291 SCRA 451,464.
J
14
Ceniza v. Ceniza, Jr., A.C. No. 8335, April 10, 2019.
18
photographs from an online social networking site of respondent with his

paramour which depicts their romantic relationship. Clearly, respondent
have no shame to flaunt his adulterous conduct with his paramour, not
minding the exacting moral standards set for the members of the legal
profession.
Indeed, the respondent's admission of siring two children by the

mistress, and his abandonment of his wife and family to cohabit with the
mistress sufficiently established that he had transgressed the high standards
of morality required of him as a lawyer. His transgression was made worse
because he flaunted his illicit relationship with his mistress in social media,
thereby manifesting his insensitivity towards the harsh effects of his
immorality on his wife and their child. In Advincula v. Advincula, 15 we
pointed out that a member of the Bar not only refrains from adulterous
relationships or from keeping a mistress but must also conduct himself as to
avoid scandalizing the public by creating the belief that he was flouting the
moral standards. This is necessary considering that the practice of law must
remain an honorable profession in the eyes of the public in order to attain its
basic ideals. 16 In this respect, the respondent did not live up to the stringent
standards required of him by the law profession.
The respondent would justify his actuations by claiming that he had

already converted to the Islamic faith. We remain unconvinced of the
sincerity of his defense, however, and must still hold him accountable.
Firstly, the certificate submitted by the respondent showed that he had

converted to Islam in 2003. Yet, the certificate itself indicated that it was
registered only on June 16, 2010, which was just two weeks before he
submitted his answer to the complaint. Secondly, around that time, the
respondent had already sired two children by the mistress. Thirdly, in the
birth certificates of the children with the mistress, he stated that his religion
was "Catholic." And, lastly, both birth certificates indicated that the
respondent and the mother were "Not Married." 17 These circumstances
demonstrated how his defense were really unworthy.
Indeed, the IBP-Board of Governors fittingly indicated that after taking

all the circumstances together, the conversion of the respondent to Islam was
a feeble attempt to shield himself from the complaint, and to conceal his
immoral conduct, to wit:
From the foregoing, it is crystal clear thaf respondent attempts to

hide his infidelity, and gross immoral conduct behind a flimsy claim of
having converted to Islam: Assuming for the sake of argument that he
" Supr~nn:::: converted to Islam, h_" _cO uld have only done so after the birth of his J
16
2
Id. at 247-248.
17
Rollo, p. 454.
19
Jtt.M..LL.k.2 &!&L&E. LE..tLK-..LL...L_Jj @. .••. muoot!E.l&,..I .§., .Hk. "'" .t.fi... ....• u ,,,,)/...,,. ,,.; 1,,.,U..if. .¢ u1 ..z.. ,.. ,e
second child with Igtos which indicates that he did so as a way to

legitimize his illicit affair with Corazon Igtos. Either way, his act is
reprehensible and cannot be tolerated in a lawyer. 18
The Court has consistently expressed its intolerance towards lawyers

who openly engaged in illicit affairs during the subsistence of their
19
marriages. In Ceniza v. Ceniza, and in Bustamante-Alejandro v.
20
Alejandro, we imposed the extreme penalty of disbarment on the
respondent attorneys for having abandoned their respective spouses and
having maintained illicit affairs with other partners. In Guevarra v.
Eala,21 we disbarred the respondent attorney for engaging in an extra-
marital affair with a married woman. In Perez v. Catindig, 22 we declared
that the respondent's subsequent marriage during the subsistence of his
previous one warranted his disbarment because he thereby displayed his
deliberate disregard of the sanctity of marriage and the marital vows
protected by the 1987 Constitution.
Every lawyer is expected to be honorable and reliable at all times.

This must be so, because any lawyer who cannot abide by the laws in his
private life cannot be expected to do so in his professional dealings. 23 By his
scandalous and highly immoral conduct, therefore, the respondent
committed grossly immoral conduct, and violated the fundamental canons of
ethics expected to be obeyed by the members of the legal profession.
Accordingly, we find the need to impose the extreme penalty of disbarment.
· WHEREFQ_~, _the Court FINDS and DECLARES respondent

ATTY. BERNJ.fi_, ~ PANAGSAGAN guilty of· gross immorality
committed in violation of Rule 1.01 and Rule 7 .03 of the Code of
Professional Responsibility; DISBARS him from the practice of law
effective upon receipt of this decision; and ORDERS his name stricken off
the Roll of Attorneys.
Let copies of this decision be furnished to the Office of the Bar

Confidant for immediate implementation; the Office of the Court
Administrator for dissemination to· all courts of the country; and to the
Integrated Bar of the Philippines for its information and guidance.
SO ORDERED.
(
18
Id. at 430.
19
Supra note l 4.
20
Bustamante-Alejandro v. Alejandro, A.C:-No. 4256, February 13, 2004, 422 SCRA 527.
21
A.C. No. 7136, August 1, 2007, 529 SCRA I.
22
A.C. No.5816, March 10, 2015, 752 SCRA 185.
23
Ceniza v. Ceniza, Jr., supra note 14.
20
·• I.~
Senior Associate Justice
AND RE J<liif{EYES, JR.

AssJcifl.te Justice
~~ Associate Justice
J E{.~~-
Associate Justice
(On Official Leave)

ROSMARI D. CARANDANG
Associate Justice Associate Justice
AMIA~-JAVIER
/Associate Justice Associate Justice
.,
2
,,...., _J_
REPUBLIC OF THE PHILIPPINES
SUPREME COURT
Manila
EN BANC
MARIA CELIA A. FLORES (Legal

Researcher II, Regional Trial Court,
Branch 217, Quezon City),
Complainant,
- versus -
OCA IPI No. 10-3450-P
CLARENCE JOHN R. HIPOLITO

(Clerk III, Regional Trial Court,
Respondent.
X-------------------------- X
Complainant,
- versus - A.M. No. P-21-018 [Formerly

OCA IPI No. 11-3761-P]
Respondent.
X---------------------------- X
MYRLA P. NICANDRO, SARAH S.
MIRANDILLA (Court Stenographers),
NAOMI C. PADEN (Court Interpreter
III), CLARENCE HIPOLITO (Clerk-
in-Charge), and RONALD B. OYA
(Utility Worker),
Complainants,
- versus - A.M. No. P-21-017 [Formerly

OCA IPI No. 10-3485-P]
Respondent.
X---------------------------- X
-over-
Notice of Judgment ' - 2 _, OCA IPI No. 10-3450-P
A.M. No. P-21-018 [Formerly OCAIPI No. 11-3761-P]
OCAIPI No. 11-3762-P
May 11, 2021

Complainant,
-versus- OCA IPI No. 11-3762-P

MIRANDILLA (Court Stenographers,
Regional Trial Court, Branch 217,
Quezon City), and NAOMI C. PADEN
(Court Interpreter III), Regional Trial
Court, Branch 217, Quezon City),
Respondents.
X---------------------------- X
NOTICE OF JUDGMENT
Sirs/Mesdames:
Please take notice that on May 11, 2021 a Per Curiam Decision, copy attached
herewith, was rendered by the Supreme Court in the above-entitled cases, the
original of which was received by this Office on December 21, 2021 at 10:30 a.m.
Very truly yours,
Clerk of Court
THE COURT ADMINISTRATOR (x) MARIACELIAA. FLORES (x)

Deputy Court Administrators 26 E. Rodriguez Sr. Avenue
HON. RAUL B. VILLANUEVA (x) Quezon City 1113
HON. JENNY LIND R. ALDECOA-
DELORINO (x) CLARENCE JOHN R. HIPOLITO (x)
HON. LEO T. MADRAZO (x) MYRLAP. NICANDRO (x)
Assistant Court Administrators SARAH S. MIRANDILLA (x)
HON. MARIA REGINA NAOMI C. PADEN (x) and
ADORACION FILOMENAM. RONALD B. OYA (x)
IGNACIO (x)
Regional Trial Court, Branch 217
HON. LILIAN BARRIBAL-CO (x)
Supreme Court, Manila Quezon City
-over-
'Notice of Judgment , - 3 -· OCA IPI No. 10-3450-P
A.M. No. P-21-017 [Formerly OCA IPI No. 10-3485-P]
May 11, 2021
ATTY. CARIDAD A. PABELLO (x) THE PRESIDING JUDGE (x)

Chief, Office of Administrative Services Regional Trial Court, Branch 217
ATTY. GILDA SOMPO-GARCIA (x) Quezon City
Asst. Chief of Office
Financial Management Office HON. ROMEO J. CALLEJO (x)
ATTY. MARILOU MARZAN-ANIGAN (x) Chairperson
Chief, Court Management Office HON. ANGELINA SANDOVAL-GUTIERREZ (x)
ATTY. WILHELMINA D. GERONGA (x) Vice Chairperson
Chief, Legal Office HON. SESINANDO E. VILLON (x)
DOCKET & CLEARANCE DIVISION (x) First Regular Member
RECORDS DIVISION (x) HON. RODOLFO A. PONFERRADA (x)
EMPLOYEE WELFARE AND Second Regular Member
BENEFITS DIVISION (x) Judicial Integrity Board
LEAVE DIVISION (x) Ground Floor, Old Building
Office of the Court Administrator Supreme Court
Supreme Court, Manila
ATTY. ROMULO A. PARAS, JR. (x)
PUBLIC INFORMATION OFFICE (x) General Counsel
OFFICE OF THE CHIEF ATTORNEY (x) ATTY. JAMES D.V. NAVARRETE (x)
PHILIPPINE JUDICIAL ACADEMY (x) Deputy Clerk of Court at-Large
LIBRARY(x) Office of the Court Administrator and
Supreme Court, Manila Acting Executive Director
Judicial Integrity Board
THE MANAGER (x) Ground Floor, Old Building
Claims Department Supreme Court
Government Service Insurance System
GSIS Headquarters, Financial Center THE CHAIRPERSON (x)
Reclamation Area, Roxas Boulevard Civil Service Commission
Pasay City Constitution Hills, Batasang Pambansa
Complex, Diliman, Quezon City
33.epublic of tbe Jlbihppines
$)upre1ne (!Court
;!flllan i la:
ENBANC
MARIA CELIA A. FLORES (Legal OCA IPI No. 10-3450-P

Complainant,
- versus -

Respondent.
x----------------------· ----------------------x
CLARENCE JOHN R. HIPOLITO . A.M. No. P-21-018 [Formerly

(Clerk III, Regional Trial Court, · OCA IPI No. 11-3761-P]
Complainant 1
- versus -
. MARIA CELIA A. FLORES (Legal

Respondent.
x---------------------------------------------x

MIRANDILLA . (Court A.M. No. P-21-017 [Formerly
Stenographers), NAOMI C. PADEN OCA IPI No. 10-3485-P]
(Court Interpreter), CLARENC~
HIPOLITO (Clerk-in-charge), and
RONALD B. OYA (Utility Worker),
Decision 2 OCA IPI No. 10-3450-P
A.M. No. P-21-018 [Formerly OCAIPI No. 11-3761-PJ
A.M. No. P-21-017 [Fom1erly OCA IPI No. 10-3485-P]
Complainants,
- versus -

Respondent.
x---------------------------------------------x
MARIA CELIA A. FLORES (Legal OCA IPI No. 11-3762-P

Branch 217, Quezon City), Present:
Complainant, GESMUNDO, CJ,

. PERLAS-BERNABE,
LEONEN,
- versus - CAGUIOA,
HERNANDO
'
CARANDANG,
MYRLA NICANDRO, SARAH S. LAZARO-JAVIER,
MIRANDILLA (Court INTING,
Stenographers, Regional Trial Court, ZALAMEDA,
Branch 217, Quezon City), and LOPEZ, M.,
NAO1"1I C. PADEN (Court DELOS SANTOS,
Interpreter III, Regional Trial GAERLAN,
Court, Branch 217, Quezon City); ROSARIO,
LOPEZ, J., JJ.
Respondents.
Promul~ated:
May 11~ 2021
DECISION
PERCURJAM
Judicial office demands the best ·possible men and women in the
service to support efforts towards effective administration of justice. Hence,
the Court· will not condone any improper conduct of court employees
constituting infringement of and e,ncroachment upon judicial authority, and
whose acts overstep their powers and responsibilities.
The Case
In these consolidated cases, Maria Celia A. Flores (Flores), a court

legal researcher II, charged Clarence John R. Hipolito (Hipolito) of conduct
prejudicial to the best interest of service and usurpation of function of the
court process server or sheriff. She also accused Myrla P. Nicandro
(Nicandro ), Sarah S. Mirandilla (:tvfirandilla), both court stenographers, and
Naomi C. Paden, a court interpreter III, of habitual tardiness and excessive
absenteeism. Meanwhile, Hipolito, Nicandro, Mirandilla, Paden and Ronald
B. Oya (Oya) charged Flores with willful disregard of a Supreme Court
ruling, conduct unbecoming of a court employee and usurpation of authority.
Hipolito, in his counter-charge, also accused Flores of malfeasance .
. Antecedents
The first administrative complaint 1 was filed on 27 July 20 IO by

Flores, a court legal researcher JI of Regional Trial Court, Branch 127 of
Quezon City (RTC), against Hipolito, the clerk-in-charge of criminal cases
in their court, for conduct prejudicial to the best interest of the service and
usurpation of function of the court's process se01:er or sheriff. 2
According to Flores, Hipolito has been selling Avon products inside

the court premises instead of performing his official duties. Hipolito also
usurped the function of the court's process server. or
deputy sheriff by
releasing a detainee without authority from Flores, who was then the officer-
in-charge (OIC). 3
1
Rollo (OCA IPI No. 10-3450-P), p. 1.
2
Id. at p. 281.
3 Id.
Hipolito, however, branded the allegations of Flores as baseless and

unfounded. He claimed that he stopped being a sales dealer of Avon after he
was appointed to the Judiciary in 2001. However, his co-employees learned
that his mother-in-law was a sales agent and started placing orders thru him
to avail of discounts. However, he never profited from such transactions and
only delivered the products upon reporting for work. 4
Likewise, contrary to the allegation of usurpation of function, Hipolito

averred he was duly authorized by Presiding Judge Santiago M. Arenas
(Judge Arenas) to serve the release order of an accused by virtue of a
Certification dated 21 October 2010 and an Official Business (OB) Pass,
both signed by the Judge Arenas himself. 5
In her Reply, Flores insisted that the lack of monetary gain by Hipolito
is irrelevant. The mere fact of selling Avon products in the Hall of Justice is
a violation of Civil Service Rules. As to the service of the release order,
Flores claimed that the certification and OB pass were irregularly issued and
only served to validate an otherwise unauthorized act of Hipolito. 6
A.M No. P-21-018 [Formerly OCA !PI No. 11-3761-P]
The administrative complaint, docketed as A.M. No. OCA IPI No. 11-
376 l-P, arose from the counter-charge of malfeasance filed by Hipolito
against Flores. Hipolito maintained that the complaint filed by Flores against
him is an act of harassment as the latter was obviously nursing a grudge
against him after he informed Judge Arenas of Flores' illegal act of
preparing pleadings for litigants during office hours for a fee. Attempts by
Judge Arenas to settle the differences between them proved futile and Flores
tried to further throw her weight around the court disrupting the court's
functions. 7
Moreover, Flores' complaint allegedly showed her flawed character,

constantly monitoring the staff so she could use the slightest infraction as
some form of blackmail later. Instead of doing her work, she would dig out
old files to use against her perceived enemies and even use her knowledge of
4 Id.
s Id.
6 Id. at 281-282.
7
Id. at 282.
the law as her weapon and instrument against the helpless and for
intimidation. 8
A.M No. P-21-017 [Formerly OCA IPI No. 10-3485-P]
On 03 September 2010, Court Stenographers Nicandro, Mirandilla,

and Paden, together with Clerk II Hipolito and Utility Worker Oya
(complainants) filed a verified complaint-affidavit9 against Flores for willful
disregard of a Supreme Court ruling, conduct unbecoming of a court
employee and usurpation of authority. 10
As alleged by complainants in this case, Flores openly defied a six-

month suspension ordered by the Supreme Court through a Resolution 11
dated 16 April 2009 relative to a previous administrative case for dishonesty
entitled, Office of the Court of Administrator v. Maria Celia A. Flores. 12
Flores allegedly continued to report for work from 04 May to 25 May 2009
despite having received the order for suspension on 30 April 2009. She
eventually complied with the suspension order on 26 May 2009 but reported
to work on 03 November 2009 before she completed her six-month
suspension. Moreover, Flores sowed discord among the employees through
different controlling acts. She would allegedly adjust the clock in the
staffroom to coincide with her watch, which was five or more minutes
earlier than the time reflected in the clock in the courtroom and in the
judge's chambers. 13
Complainants also cited the following questionable acts of Flores as

ore of their court: (1) signing a writ of possession in a case pending before
their court, which resulted to the filing of an administrative case against her
by the party-litigant, Ms. Mary Sze, before the Office of the Court
Administrator (OCA); (2) signing an order of release dated 31 May 2010 in
Criminal Case No. Q09-158926; (3) instructing Hipolito to prepare a writ of
execution to be signed by her; and (4) scrutinizing the daily time cards of the
employees for the months of April and May 2010 when she was designated
as the ore of their court. 14
s Id.
9 Rollo (A.M. No. P-21-017 [Formerly OCA IPI No. 10-3485-P]), pp. 1-12.
10 Id.
11 603 Phil. 84, 84-94(2009) [Per J. Tinga, Second Division].
12 Id.
13 Rollo (OCA IPI No. 10-3450-P), pp. 282-283.
14
Id. at 283.
A.M. No. P-21-018 [FormerlyOCAIPINo. 11-3761-P]
Nonetheless, Flores denied ever defying the suspension order of the

Court in the Resolution dated 16 April 2009. As there was no specific date
for the commencement of her suspension, she had to inquire as to when the
effectivity of her suspension will begin. The Court, thereafter, issued a
Resolution dated 24 August 2009 d~claring the suspension of Flores from 26
May 2009to 25 November 2009. 15
Anent the allegation of conduct unbecoming of a court employee,

usurpation: of authority and sowing discord among employees, Flores
claimed these to be frivolous and meant only to divert the attention of the
Court from the wrongdoings incurred by the complainants themselves.
Although her designation as OIC was not permanently confirmed by the
Court, her actions were nevertheless done under the authority of Judge
Arenas. The Court also issued a Resolution dated 10 August 2010 for her
designation as OIC specifically from 13 April 2010 to 31 May 2010,
considering she had already performed the functions of said office before
she received the notice of non-confirmation of her designation. 16
Flores also explained that her acts were merely to. enforce strict
adhere1:ce to office rules. Complaina~ts allegedly viewed these in a bad light
since tp.ese prevented their practice of falsifying daily time records to cover
up their habitual tardiness, sleeping during office hours, excessive absences,
usurpation of functions, and selling within the court premises. 17
OC"A IPI No. 11-3762-P
The fourth administrative complaint was borne by Flores' counter-

charges against Nicandro, Mirandilla and Paden for· habitual tardiness and
excessive absenteeism. The Court is also urged to look into the history of
Nicandro's "notoriety" as borne by her previous administrative cases. It was
alleged that Nicandro was given three (3) "unsatisfactory ratings" for the
years 1996 and 1998 while 1'1iranda has a habit of surreptitiously opening
documents and objects without the consent of the owner. Paden, on the other
hand, is accused of sleeping during office hours and insubordination for
failure to comply with the transfer orders. 18
15
Id. at 283-284.
16 Id at 284.
i7 Id at 283-28.5.
!R Rollo (OCA IPI No. 11-3762-P ), pp. 1-5.
Decision 7 OCAIPI No. 10-3450-P
A.M. No. P-21-017 [Formerly OCAIPINo. 10-3485-P]
Nicandro, Mirandilfa and Paden · denied the charges of habitual

tardiness and excessive abs.enteeism. They could not have made false entries
in their daily time: record· since Flores iras constantly monitoring them.
Mirandilla also explained that her request for flexi-time of 8:30 o'clock in
the morning until 5 o'clock in the afternoon was approved by the Court. 19
As to the individual allegations, Nicandro argued that Flores'

presentation of her 1996 and 1998 performance rating sheets only showed
the latter's propensity to research old files of her perceived enemies.
Moreover, Flores only cited her old performance ratings but never bothered
to check her succeeding ones. Paden also decried the charge of sleeping
during office hours. She explained that everybody in their court would rest
1.luring break time. She, however, admitted that· there were times when she
would wake up five to ten minutes before l dclock in the afternoon. She
also denied the allegation of insubordination and explained that the issue
was merely on room/office arrangement. She and Atty. Marizen B. Grutas
(Atty. Grutas ), their Branch Clerk of Court, already had an agreement as to
her office spot. Lastly, Mirandilla denied opening papers or drawers in the
staff room as she could not have possibly done such acts with Flores
recording any kind of error. 20
.•.
Report of the Investigating Judge
After consolidating the cases, the Court, through a R~solution 21 dated

16 November 2011, referred the administrative matters to the Executive
Judge of the RTC of Quezon City for investigation, . report and
recommendation. 22
On 26 Jvfarch 2012, then Exec11tive Judge Ma. Luisa C. Quijano-

Padilla (investigating Judge )23 issued a Report24 with the following
recommendations:
ln view of the foregoing, it (sic).respectfolly recommended that:

19 Id at 75-76.
20
Id at 33-40, 49 & 76-78.
21
Rollo (A.M. No. P-21-017 [Formerly OCA !PI No. l 0-3485-P]), pp. 125-126.
22 ld.
23 Now, an Associate Justice of the Court of Appeals.
24
Rollo (OCA lPI No. 10-3450-P), pp. 280-300.
OCAIPINo. 11-3762-P
(1) The administrative- complaint filed by complainant Ma.

Celia A. Flores, Legal- Researcher against respondent Clarence John R.
Hipolito, Clerk-in-charge of criminal cases (docketed as OCA IPJ No.
10-3450-P), to be dismissed for lack of merit;
(2) The respondent Ma. Celia. A. Flores (in administrative

complaint No. OCA IFJ No: I 0-3485-P) pe meted out the proper penalty
as provided under pertinent Civil Service Rules (Civil Service
Memorandum Circular No. 30, s. 1989) openly defying the 6-month
suspension order dated April 16, 2009;
(3) The charge of habitual tardiness and excessive absenteeism

against respondents Myrla Nicandro, Sarah Mirandilla, and Naomi Paden
(OCA IP!. No. 11-3762-P), be dismissed;
(4) The charge of surreptitiously opening closed drawers

against respondent Sarah Mirandilla (OCA .. IPJ No . . 11-3762-P) be
dropped as she has effectively resigned from the service on July 2011 or
that the complaint be deemed instituted with the administrative complaint
filed by Ms. Mary Sze before the Office of the Court Administrator; be
dismissed (sic);
(5) The charge of insubordination against respondent Naomi

Paden (OL7A JPJ. No. 11-3762-P) be dismissed for lack of merit;
(6) The respondent,Naomi Paden (OCA JPJ No. 11-3762-P)

be administratively sa11ctioned by a reprimand for sleeping during office
~~; . . .
(7) The charge of notoriety of respondent Myrla Nicandro

(OCA JPJ No. 11-3762-P) be dismissed; and
(8) The respondent Ma. Celia Flores (OCA !Pf No. 11-3761-
p and. OCA IPI No .. 11-3762-P) be held administratively liable for
usurpation of the functions of the . Presiding . Judge, with the
recommended penalty of Fine in the amount of Two Thousand Pesos
(P2,000.00) with stern warning that a repetition of a similar offense shall
be dealt with more severely; while all other charges against her be
dismissed for lack of meriL
Respectfully submitted.
The investigating Judge, aside from hearing the parties involved in the
case, summoned the othei members of the staff of the RTC to shed light on
the allegations. After a thorough review, she recommended for Paden to be
reprimanded for sleeping during office hours. The rest of the charges against
Decision 9 :. OCA IPINo. 10-3450-P
her, as well the charges against Hipolito, Mirandilla and Nicandro were
recommended to be dismissed. However, proof was shown through the
RTC's Daily Attendance Sheet that Flores indeed reported for work before
her suspension was fully served. Flores also issued a release order. which is
·an act of usurpation of judicial authority. 25
Recommendation of the OCA
The OCA, in a Memorandum26 dated 29 April 2013, made the

following recommendations, viz:
WHEREFORE, in view of the foregoing· discussions, it is

respectfully recommended for the consideration of the Honorable Court
~: .
1. the administrative complaint against respondent Clarence John R.

Hipolito docketed as A.M. OCA IPI No. 10-3450-P be DISMISSED for
lack of merit;
--
2. ·the administrative complaints agai11st respondent Maria Celia A.
Flores, Legal Researcher, same court, in A.M. OCA IPI Nos. 11-3761;.P
and 10-3485-P be RE-DOCKETED as a regular adininistrative matter;
3. respondent Flores be found GUILTY of usurpation of the judicial

functions of the Presiding Judge in A.M. OCA IPI No. 11-3761-P and be
FINED in the amount of Five Thousand Pesos (PS,000.00) to be paid
within a non-extendible period of thirty (30) days from notice, with a stem
warning that a repetition of the same or similar act shall be dealt with
more severely, and that all other charges therein be DISMISSED for lack
of merit;
4. respondent Flores be also found GUILTY of simple misconduct in

A.M. OCA IPI No. 10-3485-P and be meted the penalty of
SUSPENSION for a period of six (6) months without pay, with STERN
WARNING that a repetition of the same or similar offense shall be dealt
with more severely;
5. . respondent Naomi Paden, Court Stenographer, same court, be

STERNLY WARNED in A.M. OCA IPl No. 11-3762-P for sleeping
during office hours; .,,
6. the charges of habitual tardiness and excessive absenteeism against

respondents Myrla Nicandro, Sarah Mirandi!la, and Na'omi Paden, all
25 Id at 289-299.
26
see Memorandum (OCA I Pf No. l 0-3450-P) dated 29 April 20 l_ 3, pp. ! -13.
, ,
Decision · 10 OCAIPINo. 10-3450-P

A.M. No. P-21-'017 rFormerlv OCAIPINo. 10-3485-P]
L ,
Court Stenographers, same court, in A.M. OCA IPI No. 11.:3762-P be

DISMISSED for lack of merit; and
7. the charge of n~toriety against respondent :Myrla Nicandro in

A.M. OCA IPI No. 11-3762-P be DISMISSED for insufficiency of
evidence.
Respectfully submitted. 27
The OCA, after taking into consideration the report of the

investigating Judge, agreed with her recommendations but increased the fine
imposed on Flores in A.M. OCA IPI No. 11-3761-P since the earlier fine
recommendation of P2,000.00 was a "mere slap on the wrist." It also
recommended a six-month suspension for Flores; failure to faithfully comply
with her earlier suspension.
Ruling of the Court
The Court adopts the findings of fact of the OCA but modifies the
penalty to be. imposed on Flores.
Charges against Hipolito for selling

inside the court and uswpation of
functions.
The Court agrees with the dismissal of the charges against Hipolito for
lack of merit.
Based on the inquiry conducted by the investigating Judge, as

affirmed by the OCA, there was no evidence shmving that Hipolito was
moonlighting as a seller of Avon products. All four witnesses summoned by
the investigating Judge, who were part of the staff of the RTC, denied that
Hipolito sold Avon products in comi. According to Atty. Grutas, the staff
usually ordered products from a certain outsider named Gigi. However, due
to delays in the delivery, they decided to place their o~ders with Hipolito,
who just brought the products after his arrival at work. She also affirmed the
27
id. at 12-13.
Decision 11 OCAIPI No. 10-3450-P
other witnesses' statements saying that there was never a time when Hipolito
made rounds in the corridors of the Hall of Justice to offer Avon products for
sale. In fact, Hipolito stopped delivering products for them when the
complaint was filed. Ultimately, Hipolito's acts never affected his work and
was even. given a "very satisfactory rating." 28 Further noting Hipolito's
explanation of just being the· delivery guy for his mother-in-law, the Court
finds no merit in the charge against him for selling products in court during
office hours.
Anent Hipolito's alleged act of usurping the functions of the Process

Server or the Sheriff, the Court notes in agreement that Hipolito served the
Order dated 29 April 2010 for the release of a detainee with full authority
from Judge Arenas himself, who issued a certification confirming such
acts. 29 Hence, Hipolito cannot be held guilty of usurping the functions of the
Process Server or the Sheriff. Indeed, Hipolito cannot be faulted for merely
performing a task specifically assigned to him by the Presiding Judge.
. .
Charges , against Nicandro,
Paden and .Nfirandill.
The Court finds no proof or basis to .hold. Nicandro, .Paden and

Mirandilla administrativelyliable for habitual tardiness, excessive absences
and notoriety. The infractions pointed out by Flores were committed way
back in the year 1998 for which the concerned employees were already
given a warning by the OCA. After the issuance of the warnings, there was
no further proof showing Nicandro, Paden or Mirandilla .continued to
commit said infractions. At the same time, Atty. Grutas, who monitors the
daily time record of the staff, belied Flores' claims .regarding the said
employees' attendance and tardiness. She also stated that there is no truth to
the allegation anentNicandro's constant loafing.3.0
Flores also proffered no proot other than her bare allegations, to

support her claim of Mirandilla surreptitiously opened closed drawers from
the staff room. In addition, the charge of notoriety against Nicandro has no
leg to stand on. Penalties or sanctions previously imposed on Nicandro were
28
Rollo (OCA IPI No. l0-3450··P), pp. 289··290.
29 Supra note 2.
30
Rollo (OCA JPI No. 10-3450-P), pp. 292-293.
be'cision 12 OCAIPINo.10-3450-P
,-.. '. l\..M:No. P-21-018 [Formerly OCAIPI No. 11-3761-P]
already served. 31 Her history of previous administrative cases cannot be an

offense in itself and may only be considered in determining the appropriate
penalty in succeeding offenses.
Likewise, the Court agrees with the recommendation to dismiss the

insubordination charge against Paden in relation to her alleged refusal to
comply with the memorandum of Atty. Grutas asking her to transfer from the
court room to the staff room .. Atty. Grutas explained that she later allowed
Paden to remain working in the court room for lack .of space in the staff
room. 32 However, Paden admitted taking naps during lunch time, which
sometimes extended llp tp five or ten minutes before 1 o'clock in the
afternoon; This is an act violative of office rules and regulations 33
categorized as a light offense with ·a penalty of reprimand for the first
offense, suspension of one (1) to thirty (30) days for the second offense; and
dismissal from the service for the third offense. 34 Considering this is Paden's
first offense, the penalty of reprimand is appropriate.
Charges against Flores for failure to

comply with her suspension order and
usurpation of judicial fimctions.
In Office of the Court Administrator v: Flores, 35 Flores was found

guilty of serious dishonesty and thereafter was suspended for six months for
failing to declare her previous administrative charges, suspension and
dismissal from previous employment in her Personal Data Sheet (PDS)
when she applied for the position of Court Legal Researcher IL As explained
by Flores, the Court, in its Resolution dated 24 August 2009, resolved that
her six-month suspension shall be from 26 May 2009 to 25 November 2009.
How~ver, based on the Daily Attendance Sheet of the RTC, as certified by
its Branch Clerk of Court, Flores already reported to work on 3 November
2009 before her suspension was scheduled to end. Instead of explaining her
transgression, Flores refused to squarely address the same and merely
claimed the allegation was based on self-serving opin:ions of complainants in
OCA IPI No. 10-3485-P (now, A.M. No P-21-017).
31 Id. at 293-294.
32
Id. at 295.
33
Garcia v. Buencamitio, 745 PhiL 214, 231 (2014) [Per J Mendoza, Second Division].
34
Uniform Rules on Administrative Cases in the Civil Service, CSC Resolution No. 991936, dated 31
August 1999; See also Revised Rules on Administrative Cases in the Civil Service, CSC Resolution No.
110 [ 502, 08 November 2011.
35
Supra note 11.
Decision· 13 OCA IPI No. 10-3450-P
A.M. No. P-2 l-017 [Formerly OCA IPI No. 10-3485-P]
OCAIPINo. 11-3762-P
Flores' unjustified refusal to faithfully comply with her suspension

order is tantamount to insubordination. As consistently held in our
jurisprudence, the unjustified refusal to follow the resolution of the Court
constitutes defiance of authority or insubordination, which is considered a
less grave penalty under the Uniform Rules on Administrative Cases in the
Civil Service(URACCS). 36 Said offense is penalized with suspension of one
(I) month and one (I) day to six (6) months for the first offense and
dismissal for the second offense. 37
Anent the second charge, the investigating Judge and the OCA are
both in agreement in declaring Flores guilty of usurpation of authority when
she signed the order of release in a criminal case pending before the RTC.
The findings of the investigating Judge are well taken:
A careful perusal of the Order of Release dated May 31, 2010

shows that the same was clearly copied and patterned after the Order of
Discharge from Custody (Form 3.13. in the 2002 Revised Manual for
Clerks of Court., Volume L page 537), which should be signed by the
Presiding Judge. Here, respondent Flores signed the Order of Release in
· her capacity as "Legal Researcher & Officer-in-Charge" despite the fact
that the form clearly indicates that said Order.may only be signed by the
. Presiding Judge. ·
Furthennore, Form 3.13. specifically indicates that a copy of the

Order or Decision must be attached therein, while in the Order of Release
signed by respondent Flores merely stated that the .case against the
accused/detainee "has been provisionally dismissed today."
XXX
In this case, even assuming that Judge Arenas already left the
office on that day, May 31, 20 I 0, leaving the Order of provisional
dismissal unsinged, the undersigned sees no urgency in causing the release
of the detainee without waiting for the Order duly signed by Judge Arenas.
The reason for this is that May 31, 2010 falls on a Monday and the order
of dismissal may still be reasonably forwarded to the jail authorities on the
next working day.
At any rate, whether or not a judge opts to issue a separate order of

discharge, it is undisputed that the authority to _order the release of an
accused/detainee is purely a judicial function and the Clerk of Court or an
Officer-in-Charge, for that matter, may not be allowed to usurp this
36
See Re.: Ramilr 588 PhiL 1, 9 (2008) [Per J. Austria-Martinez, First Division]; See also Himalin v.
Balderian, 456 Phil. 934, 941-943 (2003) [Per Curiam, En Bancj.,
37
Supra note 35.
Decision ,., :- . ·. J4; · OCA IFI No. 10-3450-P
A.M. No. P~2i-6lf[F'ormerly OCA IPI No. 11-3761-P]
A.M. No. P--21-017 [Formerly OCAIPINo. 10-3485-P]
judicial prerogative which belongs exclusively to the Presiding judge.

xxx38
The investigating Judge recommended the pen~lty of a fine in the

amount of P2,000.00 but the OCA increased the same to PS,000.00. We,
however, disagree with the recommended penalty.
The Court, in previous cases, 39 had -considered the act of usurping

judicial functions as grave misconduct punishable by dismissal from service
along with the accessory penalties· of cancellation of eligibility, perpetual
disqualification from holding public_ office, bar from taking_ civil service
examinations, and forfeiture of retirement bene:fits under the URACCS. 40
It must be noted that on 02 October 2018, the Court issued A.M. No.
18-01-05-SC, amending Rule 140 of the Rules of Court, and extending its
application to personnel of the lower courts, to wit:
Rule 140
Discipline of Judges of Regular and Special Courts, Justices of the Court
a/Appeals, the Sandiganbayan, Court of Tax Appeals, Court
Administrator, Deputy Court Administrator and Assistant Court
Administrator
SECTION 1. How Instituted. - Proceedings fi:)r the discipline of Justices

of the Court of Appeals, the Sandiganbayan, Court of Tax Appeals and
Judges and personnel of the lower courts, including the Shari'a Courts,
and the officials and employees of the Office of the Jurisconsult, Court
Administrator, Deputy Court Administrator, Assistant Court Administrator
and their personnel, may be instituteq, motu, proprio, b.y the Supreme
Court, in the Judicial ~ntegrity Board . 41 (Emphasis supplied)
Rule 140 has its own nomenclature and classification of penalties

distinct from those in the lJRACCS. 42 Under the said rule, Flores' act of
usurpation of judicial functions would constitute as gross misconduct which
is considered a serious charge 43 and her insubordination would constitute as
38
Rollo (A.M OCA /Pl No. 10~3450--P), p. 299.
39
See Albior v. Auguis, 452 Phil, 936, 948 (2003), [per CJ Bersamin, En Banc]; See also Biag v.
Gubatanga, 376 Phil. 870, 875-876 (1999) [Per J. Gonzaga-Reyes, Third Division].
40 Supra note 29. ·
41
Creating the Judicial Integrity Board and the Coi-ruptiot1 Prevention and Investigation Office, A.M. No.
18-01-05-SC, 02 October 2018
42 Supra note 35.
43
See SectiQn 22, AM. No. 18-01-05-SC, 07 July 2020.
Decision 15 OCAIPINo.10-3450-P
.A.M. No. P--21-018 [Formerly OCAIPI No. 11-3761-P]
OCAIPINo. 11-3762-P
a violation of a Supreme Court directive considered a less serious one. 44

Since Rule -140 · is the. prev.iiling rule, the Court should already apply the
same in the ·resolution· of ad1ninistrative cases in fµrtherance of the interest
of a uniform application of charges and imposition of penalties against
Judiciary personnei; unless the ret~oadive application Rule 140 would of
not be favorable
' -
.,.
to the employee.
If the Court applies Rule 140 to the present case, Flores would be
charged and penalized with two separate offenses in line with the ruling in
Boston Finance and Investment Carp. v. Gonzalez, 45 where the Court held
that in administrative cases under Rule 140, separate penalties shall be
imposed for every offense. In contrast, only the penalty for the most serious
charge shall be imposed if the· .URACCS is to be .applied, thus:
SECTION 55. Penalty for the 1Host Serious Offense. - If the respondent
is found guilty of two or more charges or counts, the penalty to be
imposed should be that conesponding to the most serious charge or count
and the rest shall be considered as aggravating circumstances.
Considering that the penalty under the URACCS is more favorable to

Flores, the Court deems it best to apply. the said rule and hold Flores guilty
of grave misconduct, which is the more serious offense, aggravated by
insubordination: Since this is not Flores; first administrative infraction - the
first being an administrative complaint 'Where she was found guilty of
serious dishonesty and was suspended instead of being dismissed 46 - the
penalty of disfnissal in the present case is more than proper.
Despite Flores' retirement on 18 Septernber 2018, the Court retains

jµrisdiction to declare h~r either innoc~nt or guilty of the charges against her
and to impose upon her the proper penalties under-. the rules. "Where a
respondent is found guilty of a grave offense but the penalty of dismissal is
no longer possible because of his compulsory. retirement, the Corni has
nevertheless iri1posed the just and appropriate disciplinary measures and
sanctions by dei.~reeing · the forfeiture.· of all benefits·· to which he may be
entitled,' except accrued lem;e credits: \vith prejudice ·tc; re-employment in
any branch or instrumentality of the Government, including Government-
O\vned and Govcrnment-ControHcd Con)orations[.]"47 ,
41
'·See Section 23, A)if NQ, 18-01-05:-sc, 07. July 2020.
4
'SeeA.M. No. R1'J.-J8-2520, 09 Octofier2018 fPerJ Per1as-Bcrr1abe, En Baocl,
46 Szipra 1iote J J; the penalty for serious dishonesry is dismissal. . -
47
Alleged loss ,j/,v,_1rio1ls box.es of COJ)IJ papl!i dip:it;g their tr~HJ§/e( from. Property Division (OAS) to
'~ -- -' ';
' .

A.M. No. P•-21-018 [Formerly OCA IPI No. 11-3761-P]
OCA IPI No. 11-3 762-P
' .
WHEREFORE, in view of the foregoing, the• Court resolves these

consolidated cases as .follows: . .
1. The administrative complaint against respondent Clarence John R.

_Hipolito docketed as OCAlPI No. 10-3450-P is DISMISSED for lack
of merit;
2. The ·administrative complaint against respondent Maria Celia A.

Flores. in OCA IPI Nos. 11~3761-P and 10-3485-P are RE-
DOCKETED as regular administrative matters;
3. Respondent Maria Celia A. Flores is held GUILTY of GRAVE

MISCONDUCT in OCA IPI No. 11-3761-P aggravated by
INSUBORDINATION in OCA IPI No. l 0-3485-P. In view of her
retirement, all benefits due her are hereby FORFEITED in favor of
the government except accrued leave benefits, if any, with prejudice to -
I
her re-employment in any branch or instrumentality in the
government, including government-owned and controlled
corporations;
4. Respondent Naomi C. Paden) OCA IPI No. 11-3762-P, is found

GUILTY of violating office rules and regulations. She is meted the
penalty of REPRIMAND and is
fiJrther WARNED that the
commission of the same or similar acts in the future will be dealt with
more severely by this Court; and
5. The charges of habitual tardiness and excessive absenteeism against

respondents Myrla P. Nicandro, Sarah S. Mirandilla and Naomi C.
Paden in OCA IPI No. 11-3762-P are DISMISSED for lack of merit.
The charge of notoriety . against Myrla P. Nicandro is likewise
DISMISSED for insufficiency of evidence. .
SO ORDERED.
various rooms ofPH.ILJA, 744 Phil. 526,536 (2014) [per C.J Bersamin, En Banc], citing Re Complaint
of Afrs. Co!'aton S. Salvador against Spouses ,Voe! ai1dAn1elia Serafico, 629 Phil. 192, 211-212 (2010)
[Per Curiarn, En Banc]. -
Decision . 17 OCA IPI No. 10-3450-P
A.M. No. P--21-018 [Fomierly OCAIPI No. 11-3761-P]
A.M. No. P-21-017 [Fom1erly OCA IP.I No. 10-3485-P]
~~NDO
· Associate Justice
.1
r
AM C. AZARO-JAVIER
Associate Justice
HENR
.,/
EDGAifi>O L. DELOS SANTOS
Associate Justice
s: Associate Justice
RICA .ROSARIO
JHOSE~OPEZ
Associate Justice

Patdu Jr. Vs Commission On Audit

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epublic of tbe ~bilippincs

ILDEFONSO T. PATDU, JR., G.R. No. 218461

COMMISSION ON AUDIT, September 14, 2021

LOPEZ, J., J.:

Rollo, pp. 3-24.

In 1992, the Government of the Republic of the Philippines, through

Three proponents submitted their bids, namely: (i) Hanil Development

The EEI/Manalo Joint Venture offered the lowest bid at

During the period of the Construction Contract, the EEI/Manalo Joint

During construction, the DOTC issued several vanat10n orders,

Pursuant to the mandate given to COA to review and evaluate contracts,

Accordingly, upon the STFFP's determination that the project was in

\Vith respect to the incentive bonus, the COA Auditor determined on

The above notwithstanding, nothing in these implementing rules and

DOTC appealed LAO-N Decision No. 2005-039 dated January 27,

Ruling of the COA-CP

In Decision No. 2010-133 35 dated December 13, 2010, the COA-CP

WHEREFORE, premises considered, the herein appeal is DENIED.

DOTC filed a motion for reconsideration from Decision No. 2010-133

At the outset, it must be clarified that the assailed Decision dated

Finality of Lifting of a COA Notice of

Petitioner postulates that the lifting of ND No. 97-011-102 (DOTC)

We uphold the arguments raised by the petitioner.

In Civil Service Commission v. Moralde, 46 We held that:

[t]he doctrine of immutability of judgments applies as much to

Moreover, the related doctrine of res judicata, which bars a subsequent

The exercise of quasi-judicial powers by administrative officers or

Further, the manner by which a ruling attains finality depends on the

SECTION 6. Power of Director on Appeal. - The Director may reverse,

Based on this provision, it is only in cases where the NGAO II Director

Likewise, We share the observation of Justice Perlas-Bernabe that the

Accordingly, We rule that the lifting of ND No. 97-011-102 (DOTC)

When a final judgment is executory, it becomes immutable and

Hence, the COA-CP is precluded from issuing Decision No. 2010-133

There is no malice, bad faith or

Nonetheless, even if We examine the assailed COA Decision and

Original Project Cost P347,000,005

The COA only allowed a project cost of P300,498,905.87. Thus, the

Total Project Cost P354,450,860.00

Cost on Variation Orders P7,450,85 5 .00

The Variation Orders found to be in excess of the COA-allowed cost

Here, petitioner, as the project engineer, was responsible for reviewing

It can be gleaned from the above computation that the amounts of

Petitioner explains that Variation Order Nos. 5, 7 and 8, which he

It bears pointing out that variation orders per se in government

x x x those orders issued by the procuring entity to cover any

In short, vanat1on orders are necessary adjustments to construction

In this case, the vanat10n orders at issue sought to introduce

drainage/sewerage system, fresh water supply, and masonry works, and

In this case, petitioner justified the necessity of issuing the Variation

6.46.1. Variation Order No. 5 - Mobilization / Demobilization cost for

6.46.3. Variation Order No. 7E - Construction of Deepwell, the cost of

6.46.4. Variation Order No. 8 - The discrepancy between the quantity

Notably, these justifications were favorably considered by the Auditor

In disallowances involving unlawful or irregular government contracts,

Accordingly, we hereby adopt the proposed guidelines on return of

1. If a Notice of Disallowance is set aside by the Court, no return shall be

2. If a Notice of Disallowance is upheld, the rules on return are as follows: