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Prof. Joselito Guianan Chan's The Labor Code of the Philippines, Annotated Labor Standards & Social Legislation Volume I of a 3-Volume Series 2019 Edition (3rd Revised Edition)
 

 
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UNITED STATES SUPREME COURT JURISPRUDENCE
 

 
PHILIPPINE SUPREME COURT JURISPRUDENCE
 

   
June-1995 Jurisprudence                 

  • G.R. No. 87775 June 1, 1995 : PEOPLE OF THE PHIL. vs. FEDERICO DADO

  • G.R. Nos. 97162-64 June 1, 1995 : ALFREDO L. OANIA, ET AL. vs. NATIONAL LABOR RELATIONS COMMISSION, ET AL.

  • G.R. No. 101309 June 1, 1995 : PEOPLE OF THE PHIL. vs. FELICIANO STA. AGATA

  • G.R. No. 106283 June 1, 1995 : PEOPLE OF THE PHIL. vs. RICHARD VALLENA

  • G.R. No. 107751 June 1, 1995 : LETICIA LIGON vs. COURT OF APPEALS, ET AL.

  • Adm. Matter No. MTJ-94-894 MTJ June 2, 1995 : FELIXBERTO N. BOQUIREN vs. EMPERATRIZ DEL ROSARIO-CRUZ, ET AL.

  • Adm. Matter No. P-94-1057 June 2, 1995 : CRISPO B. BORJA, SR. vs. ROQUE ANGELES

  • G.R. No. 74240 June 2, 1995 : PEOPLE OF THE PHIL. vs. DAVID B. SUNGA

  • G.R. No. 75723 June 2, 1995 : SIMEON FLORO vs. ORLANDO A. LLENADO

  • G.R. No. 100921 June 2, 1995 : PEOPLE OF THE PHIL. vs. ALBERTO B. SOMOOC

  • G.R. No. 102253 June 2, 1995 : SOUTH SEA SURETY AND INSURANCE COMPANY, INC. vs. COURT OF APPEALS, ET AL.

  • G.R. No. 107225 June 2, 1995 : ARCHILLES MANUFACTURING CORPORATION, ET AL. vs. NLRC, ET AL.

  • G.R. No. 111484 June 2, 1995 : MARIANO R. DE LUNA vs. COURT OF APPEALS, ET AL.

  • G.R. No. 112844 June 2, 1995 : PHILIPPINE MERCHANT MARINE SCHOOL, INC., ET AL. vs. COURT OF APPEALS, ET AL.

  • G.R. No. 113843 June 2, 1995 : LIWAYWAY VINZONS-CHATO vs. ELI G.C. NATIVIDAD

  • G.R. No. 114787 June 2, 1995 : MAM REALTY DEVELOPMENT CORPORATION, ET AL. vs. NATIONAL LABOR RELATIONS COMMISSION, ET AL.

  • Adm. Matter No. RTJ-94-1150 June 5, 1995 : JULIO V. CUI, ET AL. vs. JOB B. MADAYAG

  • G.R. No. 102522 June 5, 1995 : PEOPLE OF THE PHIL. vs. JUDRITO B. ADAYA

  • G.R. No. 115829 June 5, 1995 : MARIANO T. NASSER vs. COURT OF APPEALS, ET AL.

  • G.R. No. 117438 June 8, 1995 : RAUL SESBREÑO vs. COURT OF APPEALS, ET AL.

  • G.R. No. 91890 June 9, 1995 : PHILIPPINE AIRLINES, INC. vs. COMMISSION ON AUDIT, ET AL.

  • Adm. Matter No. P-95-1142 June 16, 1995 : OFFICE OF THE COURT ADMINISTRATOR vs. MANUEL B. GADON, ET AL.

  • Adm. Matter No. RTJ-94-1217 June 16, 1995 : RODRIGO SANTOS vs. CARLOS C. OFILADA

  • G.R. Nos. 73257-58 June 16, 1995 : PEOPLE OF THE PHIL. vs. RICARDO CAYANAN, ET AL.

  • G.R. No. 97285 June 16, 1995 : PEOPLE OF THE PHIL. vs. CRESENTE PIJA, ET AL.

  • G.R. No. 102719 June 16, 1995 : PEOPLE OF THE PHIL. vs. RONNIE QUINONES

  • G.R. No. 104662 June 16, 1995 : PEOPLE OF THE PHIL. vs. LEONARDO M. LOPEZ

  • G.R. No. 107362 June 16, 1995 : PEOPLE OF THE PHIL. vs. BERNARD SIA

  • G.R. No. 112313 June 16, 1995 : BIENVENIDO S. EVANGELISTA vs. SANDIGANBAYAN, ET AL.

  • G.R. No. 114138 June 16, 1995 : PONCIANO LAYUG vs. SANDIGANBAYAN, ET AL.

  • G.R. Nos. 111810-11 June 16, 1995 : JAMES YU, ET AL. vs. NATIONAL LABOR RELATIONS COMMISSION, ET AL.

  • G.R. No. 85723 June 19, 1995 : BIENVENIDO RODRIGUEZ vs. COURT OF APPEALS, ET AL.

  • G.R. No. 96107 June 19, 1995 : CORAZON JALBUENA DE LEON vs. COURT OF APPEALS, ET AL.

  • G.R. No. 98395 June 19, 1995 : GOVERNMENT SERVICE INSURANCE SYSTEM vs. CIVIL SERVICE COMMISSION, ET AL.

  • G.R. No. 99858 June 19, 1995 : PHILIPPINE TELEGRAPH AND TELEPHONE CORP. vs. NLRC, ET AL.

  • G.R. Nos. 104687-88 June 19, 1995 : PONCIANO CORTEZ, ET AL. vs. COURT OF APPEALS, ET AL.

  • G.R. No. 107979 June 19, 1995 : DANILO F. GATCHALIAN vs. COURT OF APPEALS, ET AL.

  • G.R. No. 111342 June 19, 1995 : PORFIRIO BALLADARES, JR., ET AL. vs. NATIONAL LABOR RELATIONS COMMISSION, ET AL.

  • Adm. Matter No. MTJ-95-1035 June 21, 1995 : EMETERIO GALLO vs. JOSE CORDERO

  • Adm. Matter No. P-93-799 June 21, 1995 : NELIA B. ESMERALDA-BAROY vs. JUVY N. COSCA

  • Adm. Matter No. P-95-1119 June 21, 1995 : ROSALIND M. APAGA vs. PHOEBE P. PONCE

  • G.R. No. 57023 June 22, 1995 : RAYMUNDO DE LA PAZ, ET AL. vs. DOMINGO D. PANIS

  • G.R. No. 96754 June 22, 1995 : JAMES L. CHIONGBIAN, ET AL. vs. OSCAR M. ORBOS, ET AL.

  • G.R. No. 105135 June 22, 1995 : SUNLIFE ASSURANCE COMPANY OF CANADA vs. COURT OF APPEALS, ET AL.

  • G.R. No. 108490 June 22, 1995 : PEOPLE OF THE PHIL. vs. RENATO CANTURIA, ET AL.

  • Adm. Matter No. MTJ-93-884 June 23, 1995 : JULIUS N. RABOCA vs. GREGORIO D. PANTANOSAS, JR.

  • Adm. Matter No. P-89-384 June 23, 1995 : PEDRO SAN JOSE vs. BENJAMIN CENTENO

  • Adm. Matter No. RTJ-95-1317 June 27, 1995 : DALMACIO CELINO vs. ZEUS C. ABROGAR

  • G.R. Nos. 101107-08 June 27, 1995 : PEOPLE OF THE PHIL. vs. ROMEO B. BARROS

  • G.R. No. 106082 June 27, 1995 : LORETO VDA. DE BALTAZAR, ET AL. vs. COURT OF APPEALS, ET AL.

  • G.R. No. 108662 June 27, 1995 : PEOPLE OF THE PHIL. vs. FERNANDO N. HALILI

  • G.R. No. 111105 June 27, 1995 : ROLANDO REVIDAD, ET AL. vs. NATIONAL LABOR RELATIONS COMMISSION, ET AL.

  • G.R. No. 111190 June 27, 1995 : LORETO D. DE LA VICTORIA vs. JOSE BURGOS, ET AL.

  • G.R. No. 112850 June 27, 1995 : GREENHILLS AIRCON SERVICES, INC., ET AL. vs. NATIONAL LABOR RELATIONS COMMISSION, ET AL.

  • G.R. No. 113690 June 27, 1995 : PEOPLE OF THE PHIL. vs. VICENTE VITOR

  • G.R. No. 115656 June 27, 1995 : PEOPLE OF THE PHIL. vs. NILO B. RAMOS

  • Adm. Matter No. P-94-1056 June 29, 1995 : ALFONSO L. VELASCO vs. MA. LOURDES C. PASCUAL

  • G.R. No. 87187 June 29, 1995 : PEOPLE OF THE PHIL. vs. PAULINO O. RIVERA

  • G.R. Nos. 112070-71 June 29, 1995 : PEOPLE OF THE PHIL. vs. SIXTO VIÑAS, SR., ET AL.

  • G.R. No. 114091 June 29, 1995 : BACALTOS COAL MINES, ET AL. vs. COURT OF APPEALS, ET AL.

  • G.R. No. 117186 June 29, 1995 : ALLAN M. LOYOLA vs. COURT OF APPEALS, ET AL.

  • G.R. No. 104234 June 30, 1995 : AIR FRANCE vs. COURT OF APPEALS, ET AL.

  • G.R. No. 107623 June 30, 1995 : PEOPLE OF THE PHIL. vs. ANGELITO P. MANALO

  • G.R. No. 110889 June 30, 1995 : JOY L. BOMBASE vs. NATIONAL LABOR RELATIONS COMMISSION, ET AL.

  • G.R. No. 87775 June 1, 1995 - PEOPLE OF THE PHIL. v. FEDERICO DADO

  • G.R. Nos. 97162-64 June 1, 1995 - ALFREDO L. OANIA, ET AL. v. NATIONAL LABOR RELATIONS COMMISSION, ET AL.

  • G.R. No. 101309 June 1, 1995 - PEOPLE OF THE PHIL. v. FELICIANO STA. AGATA

  • G.R. No. 106283 June 1, 1995 - PEOPLE OF THE PHIL. v. RICHARD VALLENA

  • G.R. No. 107751 June 1, 1995 - LETICIA LIGON v. COURT OF APPEALS, ET AL.

  • Adm. Matter No. MTJ-94-894 MTJ June 2, 1995 - FELIXBERTO N. BOQUIREN v. EMPERATRIZ DEL ROSARIO-CRUZ, ET AL.

  • Adm. Matter No. P-94-1057 June 2, 1995 - CRISPO B. BORJA, SR. v. ROQUE ANGELES

  • G.R. No. 74240 June 2, 1995 - PEOPLE OF THE PHIL. v. DAVID B. SUNGA

  • G.R. No. 75723 June 2, 1995 - SIMEON FLORO v. ORLANDO A. LLENADO

  • G.R. No. 100921 June 2, 1995 - PEOPLE OF THE PHIL. v. ALBERTO B. SOMOOC

  • G.R. No. 102253 June 2, 1995 - SOUTH SEA SURETY AND INSURANCE COMPANY, INC. v. COURT OF APPEALS, ET AL.

  • G.R. No. 107225 June 2, 1995 - ARCHILLES MANUFACTURING CORPORATION, ET AL. v. NLRC, ET AL.

  • G.R. No. 111484 June 2, 1995 - MARIANO R. DE LUNA v. COURT OF APPEALS, ET AL.

  • G.R. No. 112844 June 2, 1995 - PHILIPPINE MERCHANT MARINE SCHOOL, INC., ET AL. v. COURT OF APPEALS, ET AL.

  • G.R. No. 113843 June 2, 1995 - LIWAYWAY VINZONS-CHATO v. ELI G.C. NATIVIDAD

  • G.R. No. 114787 June 2, 1995 - MAM REALTY DEVELOPMENT CORPORATION, ET AL. v. NATIONAL LABOR RELATIONS COMMISSION, ET AL.

  • Adm. Matter No. RTJ-94-1150 June 5, 1995 - JULIO V. CUI, ET AL. v. JOB B. MADAYAG

  • G.R. No. 102522 June 5, 1995 - PEOPLE OF THE PHIL. v. JUDRITO B. ADAYA

  • G.R. No. 115829 June 5, 1995 - MARIANO T. NASSER v. COURT OF APPEALS, ET AL.

  • G.R. No. 117438 June 8, 1995 - RAUL SESBREÑO v. COURT OF APPEALS, ET AL.

  • G.R. No. 91890 June 9, 1995 - PHILIPPINE AIRLINES, INC. v. COMMISSION ON AUDIT, ET AL.

  • Adm. Matter No. P-95-1142 June 16, 1995 - OFFICE OF THE COURT ADMINISTRATOR v. MANUEL B. GADON, ET AL.

  • Adm. Matter No. RTJ-94-1217 June 16, 1995 - RODRIGO SANTOS v. CARLOS C. OFILADA

  • G.R. Nos. 73257-58 June 16, 1995 - PEOPLE OF THE PHIL. v. RICARDO CAYANAN, ET AL.

  • G.R. No. 97285 June 16, 1995 - PEOPLE OF THE PHIL. v. CRESENTE PIJA, ET AL.

  • G.R. No. 102719 June 16, 1995 - PEOPLE OF THE PHIL. v. RONNIE QUINONES

  • G.R. No. 104662 June 16, 1995 - PEOPLE OF THE PHIL. v. LEONARDO M. LOPEZ

  • G.R. No. 107362 June 16, 1995 - PEOPLE OF THE PHIL. v. BERNARD SIA

  • G.R. No. 112313 June 16, 1995 - BIENVENIDO S. EVANGELISTA v. SANDIGANBAYAN, ET AL.

  • G.R. No. 114138 June 16, 1995 - PONCIANO LAYUG v. SANDIGANBAYAN, ET AL.

  • G.R. Nos. 111810-11 June 16, 1995 - JAMES YU, ET AL. v. NATIONAL LABOR RELATIONS COMMISSION, ET AL.

  • G.R. No. 85723 June 19, 1995 - BIENVENIDO RODRIGUEZ v. COURT OF APPEALS, ET AL.

  • G.R. No. 96107 June 19, 1995 - CORAZON JALBUENA DE LEON v. COURT OF APPEALS, ET AL.

  • G.R. No. 98395 June 19, 1995 - GOVERNMENT SERVICE INSURANCE SYSTEM v. CIVIL SERVICE COMMISSION, ET AL.

  • G.R. No. 99858 June 19, 1995 - PHILIPPINE TELEGRAPH AND TELEPHONE CORP. v. NLRC, ET AL.

  • G.R. Nos. 104687-88 June 19, 1995 - PONCIANO CORTEZ, ET AL. v. COURT OF APPEALS, ET AL.

  • G.R. No. 107979 June 19, 1995 - DANILO F. GATCHALIAN v. COURT OF APPEALS, ET AL.

  • G.R. No. 111342 June 19, 1995 - PORFIRIO BALLADARES, JR., ET AL. v. NATIONAL LABOR RELATIONS COMMISSION, ET AL.

  • Adm. Matter No. MTJ-95-1035 June 21, 1995 - EMETERIO GALLO v. JOSE CORDERO

  • Adm. Matter No. P-93-799 June 21, 1995 - NELIA B. ESMERALDA-BAROY v. JUVY N. COSCA

  • Adm. Matter No. P-95-1119 June 21, 1995 - ROSALIND M. APAGA v. PHOEBE P. PONCE

  • G.R. No. 57023 June 22, 1995 - RAYMUNDO DE LA PAZ, ET AL. v. DOMINGO D. PANIS

  • G.R. No. 96754 June 22, 1995 - JAMES L. CHIONGBIAN, ET AL. v. OSCAR M. ORBOS, ET AL.

  • G.R. No. 105135 June 22, 1995 - SUNLIFE ASSURANCE COMPANY OF CANADA v. COURT OF APPEALS, ET AL.

  • G.R. No. 108490 June 22, 1995 - PEOPLE OF THE PHIL. v. RENATO CANTURIA, ET AL.

  • Adm. Matter No. MTJ-93-884 June 23, 1995 - JULIUS N. RABOCA v. GREGORIO D. PANTANOSAS, JR.

  • Adm. Matter No. P-89-384 June 23, 1995 - PEDRO SAN JOSE v. BENJAMIN CENTENO

  • Adm. Matter No. RTJ-95-1317 June 27, 1995 - DALMACIO CELINO v. ZEUS C. ABROGAR

  • G.R. Nos. 101107-08 June 27, 1995 - PEOPLE OF THE PHIL. v. ROMEO B. BARROS

  • G.R. No. 106082 June 27, 1995 - LORETO VDA. DE BALTAZAR, ET AL. v. COURT OF APPEALS, ET AL.

  • G.R. No. 108662 June 27, 1995 - PEOPLE OF THE PHIL. v. FERNANDO N. HALILI

  • G.R. No. 111105 June 27, 1995 - ROLANDO REVIDAD, ET AL. v. NATIONAL LABOR RELATIONS COMMISSION, ET AL.

  • G.R. No. 111190 June 27, 1995 - LORETO D. DE LA VICTORIA v. JOSE BURGOS, ET AL.

  • G.R. No. 112850 June 27, 1995 - GREENHILLS AIRCON SERVICES, INC., ET AL. v. NATIONAL LABOR RELATIONS COMMISSION, ET AL.

  • G.R. No. 113690 June 27, 1995 - PEOPLE OF THE PHIL. v. VICENTE VITOR

  • G.R. No. 115656 June 27, 1995 - PEOPLE OF THE PHIL. v. NILO B. RAMOS

  • Adm. Matter No. P-94-1056 June 29, 1995 - ALFONSO L. VELASCO v. MA. LOURDES C. PASCUAL

  • G.R. No. 87187 June 29, 1995 - PEOPLE OF THE PHIL. v. PAULINO O. RIVERA

  • G.R. Nos. 112070-71 June 29, 1995 - PEOPLE OF THE PHIL. v. SIXTO VIÑAS, SR., ET AL.

  • G.R. No. 114091 June 29, 1995 - BACALTOS COAL MINES, ET AL. v. COURT OF APPEALS, ET AL.

  • G.R. No. 117186 June 29, 1995 - ALLAN M. LOYOLA v. COURT OF APPEALS, ET AL.

  • G.R. No. 104234 June 30, 1995 - AIR FRANCE v. COURT OF APPEALS, ET AL.

  • G.R. No. 107623 June 30, 1995 - PEOPLE OF THE PHIL. v. ANGELITO P. MANALO

  • G.R. No. 110889 June 30, 1995 - JOY L. BOMBASE v. NATIONAL LABOR RELATIONS COMMISSION, ET AL.

  •  





     
     

    G.R. No. 91890  June 9, 1995 : PHILIPPINE AIRLINES, INC. vs. COMMISSION ON AUDIT, ET AL.

     

    EN BANC


    [G.R. No. 91890. June 9, 1995.]


    PHILIPPINE AIRLINES, INC, Petitioner, v. COMMISSION ON AUDIT and PETRON CORPORATION, Respondents.


    D E C I S I O N


    ROMERO, J.:


    In this special civil action for Certiorari and prohibition, petitioner Philippine Airlines, Inc. (PAL) seeks to review, annul and reverse Decision No. 1127 of the Commission on Audit (COA) dated January 5, 1990 and to prohibit, enjoin and prevent COA from enforcing or in any way implementing Department Order No. 19, s. 1974 of the then Department of General Services as implemented by COA Circular No. 78-84, Memorandum No. 498 and Memorandum No. 88-565. COA Decision No. 1127 required PAL to purchase its fuel requirements solely from Petron Corporation (Petron).cralaw

    PAL is a domestic corporation duly organized and existing under Philippine laws, principal engaged in the air transport business, both domestic and international. At the time of the filing of the petition of February 8, 1990, majority of its shares of stock was owned by the Government Service Insurance System (GSIS), a government corporation.

    To assure itself of continuous, reliable and cost-efficient supply to fuel, PAL adopted a system of bidding out its fuel requirements under a multiple supplier set-up whereby PAL awarded to the lowest bidder sixty percent (60%) of its fuel requirements and to the second lowest bidder the remaining forty percent (40%), provided it matched the price of the lowest bidder.

    For the period September 1988 to August 1989, the fuel supply requirements of PAL were allocated among Petron, Caltex and Shell in the following proportions:nadchanroblesvirtualawlibrary

    Location Petron Shell Caltex Total

    Requirements

    Mla. Int'l. 36, 720 1 (60%) 24,480 (40%) — 61,200

    Mactan Int'l. 1,450 (100%) — — 1,450

    Package A 2 — 13,256 (40%) 19,884 (60%) 33,140

    Package B 3 7,450 (100%) — — 7,450

    ----- ----- ----- ---

    OVERALL 45,620 (44%) 37,736 (37%) 19,884 (19%) 103,240

    On August 17, 1989, COA wrote PAL a letter 4 stating:nadchanroblesvirtualawlibrary

    "It has come to our attention that PAL international fuel supply contracts are expiring this August 31, 1989. In this connection, you are advised to desist from bidding the company's fuel supply contracts, considering that existing regulations require government-owned or controlled corporations and other agencies of government to procure their petroleum product requirements from PETRON Corporation."

    The existing regulations referred to in the letter were Department Order No. 19 dated May 1, 1974 of the defunct Department of General Services, COA Office Memorandum No. 498 dated September 12, 1974 and COA Circular No. 78-84 dated August 1, 1978, which required strict compliance with said Department Order No. 19, as well as COA Memorandum No. 88-565 dated August 2, 1988, reiterating COA Circular No. 78-84 and COA Office Memorandum No. 498. Department Order No. 19 reads as follows:nadchanroblesvirtualawlibrary

    "SUBJECT : PROCUREMENT OF PETROLEUM PRODUCTS BY

    GOVERNMENT.

    TO : All Heads of Departments and Chiefs of Bureaus,

    Offices and Agencies of the Government.

    To give essence to the policy of preference to government resources in the filling of the needs of the government for supplies, it is hereby prescribed that all departments, bureaus, offices and/or agencies of the Philippine government, procure their petroleum product requirements (gasoline, diesel, fuel, bunker fuel, jet fuel, aviation oil, marine oil, kerosene, lubricants, greases and asphalt) from the PETROPHIL 5 Corporation, a government-owned corporation, whenever these commodities are adequately available and whenever these commodities are adequately available and whenever practicable, at prices not exceeding those set by the Oil Industry Commission.

    The PETROPHIL Corporation shall furnish copies of the price lists, showing points of delivery, to the Commission on Audit and all prospective government requisitioners.

    For statistical purposes, the PETROPHIL Corporation shall under a quarterly report to the Bureau of Supply Coordination (BSC) of deliveries made during the quarter in accordance with the format prescribed by the BSC and to be submitted within forty five (45) days after the end of each quarter.

    This Department Order shall take effect immediately.

    (SGD.) CONSTANCIO E. CASTAÑEDA

    Secretary

    PAL sought reconsideration of the August 17, 1989 advice, reiterating its reasons contained in an earlier letter, for preferring to bid out and secure its fuel supply from more than one supplier and for its contention that Department Order No. 19, s. 1974, as circularized by COA Office Memorandum No. 490, should not apply to PAL. 6

    In a letter 7 dated September 5, 1989, COA denied PAL's request for reconsideration, holding that Department Order No. 19 s. 1974 applied to government-owned or controlled corporations, including subsidiaries. It disposed of PAL's contention that competitive bidding ensured the best price by suggesting that "PAL negotiate with PETRON for the lowest possible price for its fuel requirements and to request PETRON to ensure adequate and continued fuel supply to PAL."

    A final appeal for reconsideration was made by PAL in a letter 8 dated September 15, 1989, but this was denied in the now assailed COA Decision No. 1127, the essential portion of which states:nadchanroblesvirtualawlibrary

    "In this regard, we obtained information from PETRON Corporation that it can easily supply PAL's total jet fuel requirement on a daily basis and that there is an existing Borrow and Loan Agreement (BLA) among oil companies whereby they assist each other during times of product shortfall conformably to industry practice. In view thereof, this Commission is unable to find merit in your justifications for the procurement of petroleum products by PAL from oil companies other than PETRON Corporation thru bidding as an exception to Department Order No. 19, s. 1974 of the then Department of General Services, as implemented by COA Memorandum No. 88-565. Your contention that PAL is not covered by subject department order has already been considered by this Commission when it rendered the decision in question."

    Pursuant to Article IX(A), Section 7 of the Constitution, and there being no appeal or any other plain, speedy, adequate and effective remedy in the ordinary course of law from the aforementioned Decision, PAL instituted the present petition, alleging that:nadchanroblesvirtualawlibrary

    "I

    THE COMMISSION ON AUDIT COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO EXCESS OR LACK OF JURISDICTION IN HOLDING THAT DEPARTMENT ORDER NO. 19 OF THE DEFUNCT DEPARTMENT OF GENERAL SERVICES APPLIES TO PAL

    II

    THE COA LIKEWISE EXCEEDED ITS JURISDICTION IN EXTENDING THE APPLICATION OF SAID DEPARTMENT ORDER TO PETITIONER

    III

    ASSUMING ARGUENDO THAT THE ORDER IN QUESTION WAS INTENDED TO COVER PAL, THE SAME, CONSTITUTES AN ARBITRARY, CAPRICIOUS, AND WHIMSICAL REGULATION THAT DEPRIVES PETITIONER OF ITS RIGHTS UNDER THE CONSTITUTIONAL GUARANTEE OF SUBSTANTIVE DUE PROCESS."

    On May 17, 1990, after COA, through the Office of the Solicitor General, had filed its Comment on the petition, the Court resolved "to dismiss the petition, there being no grave abuse of discretion committed by the respondent Commission on Audit in rendering the questioned decision." 9 PAL moved for reconsideration; whereupon, the Court resolved on July 10, 1990 to implead Petron Corporation as respondent in the case and to required both COA and Petron to comment on the motion for reconsideration. 10

    Respondents having filed their respective Comments and petitioner, its Reply to the comments, the motion for reconsideration was set for hearing on November 13, 1990. Thereafter, the Court resolved to grant the motion for reconsideration, reinstate the petition, consider the respondent's comment as Answer to the petition, give due course to the petition and require the parties to file simultaneously their respective Memoranda. 11 The Court further resolved to issue a temporary restraining order directing the respondent COA, or any other officer or subordinate official thereof to cease and desist from enforcing its Decision No. 1127.

    Once, again, we find ourselves compelled to dismiss the petition. Pursuant to the government's privatization program, PAL's shares of stock were bidded out early this year, resulting in the acquisition by PR Holdings, a private corporation, of 67% of PAL's outstanding stocks. PAL, having ceased to be a government-owned or controlled corporation, is no longer under the audit jurisdiction of the COA. Accordingly, the question raised in this petition has clearly become moot and academic.

    Had it not been for this supervening event, PAL would have obtained the relief sought in the instant petition. For although COA was correct in ruling that Department Order No. 19 applied to Pal as a government agency at the time, it nonetheless gravely abused its discretion in not exempting PAL therefrom.

    The COA is clothed under Section 2(2), Article IX-D of the 1987 Constitution with the "exclusive authority, subject to the limitations in this Article, to define the scope of its audit and examination, establish the techniques and methods required therefor, and promulgate accounting and auditing rules, and regulations including those for the prevention and disallowance of irregular, unnecessary, excessive, extravagant or unconscionable expenditures, or uses of government funds and properties." The authority granted under this constitutional provision, being broad and comprehensive enough, enables COA to adopt as its own, simply by reiteration or by reference, without the necessity of repromulgation, already existing rules and regulations. It may also expand the coverage thereof to agencies to instrumentalities under its audit jurisdiction. It is in this light that we view COA Memorandum No. 88-565 issued on August 1, 1988.

    As asserted by the Solicitor General, while Memorandum No. 88-565 still referred to Office Memorandum No. 498, dated September 12, 1974 requiring strict compliance with Department Order No. 19 dated May 1, 1974 in restraining in full said Department Order No. 19 in Memorandum No. 88-565, COA effectively adopted it as its own, thereby expanding its coverage to government-owned or controlled corporations. Such action was in consonance with its jurisdiction as defined under the 1987 Constitution, as follows,

    "Sec. 2. (1) The Commission on Audit shall have the power, authority and duty to examine, audit and settle all accounts pertaining to the revenue and property, owned or held in trust by, or pertaining to, the Government, or any of its subdivisions, agencies, or instrumentalities, including government-owned and controlled corporations with original charters, and on a post-audit basis: (a) constitutional bodies, commissions and offices that have been granted fiscal autonomy under this Constitution; (b) autonomous state colleges and universities; (c) other government-owned or controlled corporations with original charted and their subsidiaries; and (d) such non-governmental entities receiving subsidy or equity, directly or indirectly, from or through the government, which are required by law of the granting institution to submit to such audit as a condition of subsidy or equity. . . ."

    as well as the settled legal meaning of the phrase "agency of the Government," as incorporated in Section 2, Chapter I, Subtitle B, of the Revised Administrative Code of 1987, thus:nadchanroblesvirtualawlibrary

    "(8) 'Government agency' or 'agency of the government,' or 'agency' refers to any department, bureau or office of the National Government, or any of its branches and instrumentalities, or any political sub-division, as well as any government-owned or controlled corporation, including its subsidiaries or other self-governing board or commission of the Government."

    As a corporation, the majority shares of stocks of which were owned by the GSIS at that time, PAL could not hope to escape the operation of Memorandum No. 88-565.

    Be that as it may, it must be noted that Department Order No. 19 itself states that the procurement of petroleum product requirements from the then PETROPHIL, now PETRON Corporation, is prescribed "whenever these commodities are adequately available and whenever practicable, at prices not exceeding those set by the Oil Industry Commission."

    In its letters of reconsideration addressed to COA, PAL stated the reasons why procuring all its fuel requirements from PETRON Corporation might not be practicable. On reason was that bidding gave the best and lowest prices. If compelled to purchase all of its fuel needs from PETRON, PAL stood to lose some P34,055,377.00; indeed, a considerable amount for corporation trying to effect a financial turnabout, and consequently, an additional burden to the riding public which has to eventually shoulder the added operating costs.

    Another reason given by PAL was that relying on a single fuel supplier would put into jeopardy the regularity of its services, as there were possible contingencies not within PETRON's control which could cause a disruption of fuel supply. In fact, during the pendency of the petition, PETRON gave notice to PAL of its inability at the time to serve PAL's requirement at Nichols/Cebu/Davao/Zamboanga and suggested that PAL arrange with its other suppliers for the balance of its needs by simply extending all of its existing contracts covering domestic fuels.

    The reasons given by PAL for seeking exemption from the operation of Department Order No. 19 were, to our mind, meritorious. They far outweigh the policy enunciated in Department Order No. 19 of giving preference to government sources in the filling of the needs of the government for supplies. Thus, PAL's bidding requirement conformed to the accepted policy of the government to subject every transaction/contract to public bidding in order to protect public interest by giving the public the best possible advantages thru open competition and to avoid or preclude suspicion of favoritism and anomalies in the execution of public contracts. 12

    Its multiple supplier set-up was designed precisely to meet every contingency that might disrupt its fuel supply. It bespoke of foresight, careful planning and sound business judgment on the part of PAL. As a business operation heavily dependent on fuel supply, for PAL to rely solely on a single supplier would indeed be impracticable. To compel it to do so would amount to a grave abuse of discretion on its part as this might well lead to irregular, excessive or unconscionable expenditures, the very evil sought to be avoided in the creation of the COA.

    This, however, is so much water under the bridge. PAL's corporate complexion having charged during the pendency of the instant petition from government-controlled to private ownership, we dismiss the petition for being moot and academic.

    WHEREFORE, the petition is hereby DISMISSED for being moot and academic. No pronouncement as to costs.

    SO ORDERED.

    Regalado, Davide, Jr., Melo, Kapunan and Francisco, JJ., concur.

    Narvasa, C.J., Feliciano, Bellosillo and Quiason, JJ., is on leave.

    Padilla, Puno, Vitug and Mendoza, JJ., concur in the result.

    Endnotes:




    1. All figures in Thousand U.S. Gallons.

    2. Nichols, Mactan Domestic, Davao, Zamboanga.

    3. Iloilo, Cagayan de Oro, Bacolod, Tacloban, Cotabato, Legazpi, Puerto Princesa, Tuguegarao, Laoag.

    4. Annex "C", Petition, Rollo, p. 34.

    5. Now PETRON.

    6. Annex "D", Ibid., Rollo, p. 35.

    7. Annex "E", Ibid., Rollo, pp. 36-37.

    8. Annex "F", Petition, Rollo, pp. 38-40.

    9. Rollo, p. 85.

    10. Resolution dated July 10, 1990, Rollo, p. 102-A.

    11. Resolution of November 13, 1990, Rollo, pp. 191-192.

    12. Danville Maritime, Inc. v. Commission on Audit, G. R. No. 85285, July 28, 1989, 175 SCRA 701.

     

    G.R. No. 91890  June 9, 1995 : PHILIPPINE AIRLINES, INC. vs. COMMISSION ON AUDIT, ET AL.


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