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DIGESTED CASES FOR STAT CON:

PUBLIC ESTATES AUTHORITY, Petitioner, vs.COMMISSION ON AUDIT,Respondent.

FACTS:

This is a petition for certiorari assailing COAs decision.

Petitioner Public Estates Authority (PEA) alleged that the COA committed grave abuse of discretion amounting to lack or excess of

jurisdiction when it ruled that petitioners employees hired after July 1, 1989 are not entitled to a grant of rice subsidy.

Petitioner is a government owned and controlled corporation established pursuant to Presidential Decree No. 1084. It is tasked with,

among others, reclaiming and administering foreshore lands and other public properties.

Respondent COA is the constitutional body mandated to examine and audit all government instrumentalities and investment of public

funds.2

Sometime in January 1999, petitioner granted its employees 191 sacks of rice with a total cost of P219,650.90. On post-audit, the

COA resident auditor disallowed 130 sacks amounting to P149,500.00 under Notice of Disallowance No. 99-012D-99 dated May 4,

1999.8The resident auditor ruled that the grant of rice allowance to 130 personnel hired after July 1, 1989 has no legal basis. He relied

on Section 12 of R.A. No. 6758 providing that only incumbent personnel as of July 1, 1989 are entitled to receive additionalallowances.

ISSUE:

Whether respondent COA committed grave abuse of discretion amounting to lack or excess of jurisdiction in disallowing the rice

subsidy granted to petitioners employees hired after July 1, 1989 when R.A. No. 6758 took effect.

HELD:

At the heart of the controversy is the proper interpretation of Section 12 of R.A. No. 6758 which provides:

SEC. 12. Consolidation of Allowances and Compensation.All allowances, except for representation and transportation allowances,clothing and laundry allowances; subsistence allowance of marine officers and crew on board government vessels and hospital

personnel; hazard pay; allowances of foreign service personnel stationed abroad; and such other additional compensation not

otherwise specified herein as may be determined by the DBM, shall be deemed included in the standardized salary rates herein

prescribed. Such other additional compensation, whether in cash or in kind, being received by incumbents only as of July 1,

1989 not integrated into the standardized salary rates shall continue to be authorized.

The foregoing clause must be read in relation to Section 17 of the same law reproduced below:

SEC. 17. Salaries of incumbents.Incumbents of positions presently receiving salaries and additional compensation/fringe benefits

including those absorbed from local government units and other emoluments, the aggregate of which exceeds the standardized salary

rate as herein prescribed, shall continue to receive such excess compensation, which shall be referred to as transition allowance. The

transition allowance shall be reduced by the amount of salary adjustment that the incumbent shall receive in the future.

Under the above provisions, we rule that petitioners personnel hired after July 1, 1989 are not entitled to rice subsidy.

It is thus decisively clear that rice subsidy may only be granted to petitioners personnel who were incumbents as of July 1, 1989.

Hence, in disallowing the grant of rice subsidy to employees hired after that date, respondent COA did not gravely abuse its discretion.

We find, however, that the personnel concerned, in receiving the rice subsidy, acted in good faith in the honest belief they were

entitled to such benefit. Hence, following our rulings in Blanquera v. Alcala,15De Jesus v. Commissioner of Audit,16Kapisanan ng

mga Manggagawa sa Government Service Insurance System (KMG) v. Commission on Audit,17andPhilippine Ports Authority v.

Commission on Audit,18the affected employees of petitioner PEA need not refund the rice subsidy they received. In these cases, the

parties, in receiving incentive benefits, acted in good faith. Thus, they were no longer ordered to refund those benefits disallowed by

COA.

THE PETITION IS DISMISSED.

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JOSELITO R. MENDOZA, Petitioner,

vs.

COMMISSION ON ELECTIONS AND ROBERTO M. PAGDANGANAN, Respondents.

FACTS:

When the language of the law is clear and explicit, there is no room for interpretation, only application. And if statutory construction be necessary,

the statute should be interpreted to assure its being in consonance with, rather than repugnant to, any constitutional command or prescription.1

It isupon these basic principles that the petition must be granted.

Petitioner Joselito R. Mendoza was proclaimed the winner of the 2007 gubernatorial election for the province of Bulacan, besting respondent Roberto

M. Pagdanganan by a margin of 15,732 votes. On 1 June 2007, respondent filed the Election Protest which, anchored on the massive electoral fraudallegedly perpetrated by petitioner, was raffled to the Second Division of the Commission on Elections (COMELEC) as EPC No. 2007-44. With

petitioners filing of his Answer with Counter-Protest on 18 June 2007, the COMELEC proceeded to conduct the preliminary conference and to ordera revision of the ballots from the contested precincts indicated in said pleadings.

COMELEC render decision which annulled and set aside petitioners proclamation as governor of Bulacan and proclaimed respondent duly elected tosaid position by a winning margin of 4,321 votes. Coupled with a directive to the Department of Interior and Local Government to i mplement thesame, the resolution ordered petitioner to immediately vacate said office, to cease and desist from discharging the functions pertaining thereto and tocause a peaceful turn-over thereof to respondent.

ISSUE:

WHETHER OR NOT COMELEC HAD ERRED IN RENDERING DECISION IMMEDIATELY ANNULLING AND SETTING ASIDE

PETITIONERS PROCLAMATION AS GOVERNOR OF BULACAN

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REPUBLIC OF THE PHILIPPINES, represented by the DEPARTMENT OF PUBLIC WORKS AND HIGHWAYS, COMMISSION ON

AUDIT and THE NATIONAL TREASURER, Petitioner,

vs.

CARLITO LACAP, doing business under the name and style CARWIN CONSTRUCTION AND CONSTRUCTION SUPPLY, Respondent.

FACTS:

This is a Petition for Review on Certiorari under Rule 45 of the Revised Rules of Court assailing the Decision1which affirmed with modification theDecision2of the Regional Trial Court in Civil Case, granting the complaint for Specific Performance and Damages filed by Carlito Lacap(respondent) against the Republic of the Philippines (petitioner).

Respondent, doing business under the name and style CARWIN CONSTRUCTION and CONSTRUCTION SUPPLY, was pre-

qualified together with the two constructors. Since respondent submitted the lowest bid, he was awarded the contract for the

concreting of Sitio 5 Bahay Pare. On November4, 1992, a contract agreement was executed by respondent and petitioner.

Accordingly, respondent undertook the works, made advances for the purchase of the materials and payment for labor costs.

Personnel of the Office of the District Engineer of San Fernando, Pampanga conducted a final inspection of the project and found it 100% completed

in accordance with the approved plans and specifications. Thereafter, respondent sought to collect payment for the completed project. However, theDPWH withheld payment for the respondent after the District Auditor of the Commission on Audit (COA) disapproved the final release of funds onthe ground that the contractors license of respondent had expired at the time of the execution of the contract.

Director III of the DPWH Legal department opined that since RA No 4566, otherwise known as the Contractors License Law, doesnot provide thata contract entered into after the license has expired is void and there is no law which expressly prohibits or declares void such contract, the contract

is enforceable and payment maybe paid, without prejudice to any appropriate administrative liability action that may be imposed on the contractorand the government officials or employees concerned.

Respondent filed the complaint for Specific Performance and Damages against petitioner before RTC.

ISSUE: Whether a contractor with an expired license is entitled to be paid for completed projects

HELD:

Section 35 of R.A. No. 4566 explicitly provides:

SEC. 35. Penalties. Any contractor who, for a price, commission, fee or wage, submits or attempts to submit a bid to construct, or contracts to or

undertakes to construct, or assumes charge in a supervisory capacity of a construction work within the purview of this Act, without first securing a

license to engage in the business of contracting in this country; or who shall present or file the license certificate of another, give false evidence ofany kind to the Board, or any member thereof in obtaining a certificate or license, impersonate another, or use an expired or revoked certificate orlicense, shall be deemed guilty of misdemeanor, and shall, upon conviction, be sentenced to pay a fine of not less than five hundred pesos but notmore than five thousand pesos. (Emphasis supplied)

The "plain meaning rule" or verba legisin statutory constructionis that if the statute is clear, plain and free from ambiguity, it must be given itsliteral meaning and applied without interpretation.40This rule derived from the maximIndex animi sermo est(speech is the index of intention) restson the valid presumption that the words employed by the legislature in a statute correctly express its intention or will and preclude the court fromconstruing it differently. The legislature is presumed to know the meaning of the words, to have used words advisedly, and to have expressed itsintent by use of such words as are found in the statute.41Verba legis non est recedendum, or from the words of a statute there should be nodeparture.42

The wordings of R.A. No. 4566 are clear. It does not declare, expressly or impliedly, as void contracts entered into by a contractor whose license hadalready expired. Nonetheless, such contractor is liable for payment of the fine prescribed therein. Thus, respondent should be paid for the projects he

completed. Such payment, however, is without prejudice to the payment of the fine prescribed under the law.

The present petition is DENIEDfor lack of merit. The assailed Decision of the Court of Appeals was AFFIRMED.

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