FACTS:
Officers of Clark
Development Corporation (Clark Co.), a government-owned and controlled
corporation, approached the law firm of Laguesma Magsalin Consulta and Gastardo
for the assistance in handling the corporation’s labor cases. Clark Co. "sought
from the Office of the Government Corporate Counsel [‘OGCC’] its approval for
the engagement of [Laguesma Magsalin Consulta and Gastardo] as external
counsel.
On December 4, 2001, the
Office of the Government Corporate Counsel denied the request. Clark
Development Corporation then filed a request for reconsideration. The OGCC reconsidered
the request and approved the engagement of Laguesma. It also furnished Clark
Development Corporation a copy of a pro-forma retainership contract containing
the suggested terms and conditions of the retainership. It instructed
Clark Co to submit a copy of the contract to the OGCC after all the parties
concerned have signed it.
In the meantime, Laguesma rendered
legal services to Clark Co. Clark Co, through its Board of Directors, approved
Laguesma’s engagement as private counsel.
Clark Development
Corporation requested the Commission on Audit for concurrence of the
retainership contract it executed with Laguesma. According to the law firm, it
was only at this point when Clark Co informed them that the Commission on Audit
required the clearance and approval of the OGCC before it could approve the
release of Clark Co’s funds to settle the legal fees due to the law firm.
However, State Auditor IV Elvira
G. Punzalan informed Clark Development Corporation that its request for
clearance could not be acted upon until the OGCC approves the retainership
contract with finality.
Clark Co sent a letter request
to the OGCC for the final approval of the retainership contract, in compliance
with the Commission on Audit’s requirements.
However, Government
Corporate Counsel Devanadera denied Clark Co’s request for approval on the
ground that the proforma retainership contract given to them was not "based
on the premise that the monthly retainer’s fee and concomitant charges are
reasonable and could pass in audit by COA." She found that Clark Co
adopted instead the law firm’s proposals concerning the payment of a retainer’s
fee on a per case basis without informing the OGCC. She, however, ruled
that the law firm was entitled to payment under the principle of quantum meruit
and subject to Clark Co Board’s approval and the usual government auditing
rules and regulations.
Clark Co relayed Government Corporate
Counsel Devanadera’s letter to the Commission’s Audit Team Leader, highlighting
the portion on the approval of payment to Laguesma on the basis of quantum
meruit.
The Commission on Audit’s
Office of the General Counsel, Legal and Adjudication Sector issued a
"Third Indorsement" denying Clark Development Corporation’s request for
clearance, citing its failure to secure a prior written concurrence of the COA
and the approval with finality of the OGCC. It also stated that its request for
concurrence was made three (3) years after engaging the legal services of the
law firm.
Laguesma appealed the "Third
Indorsement" to the Commission on Audit and Clark Co also filed a motion
for reconsideration.
The Commission on Audit denied
the appeal and motion for reconsideration. It ruled that Clark Co violated
Commission on Audit Circular No. 98-002 and Office of the President Memorandum
Circular No. 9 when it engaged the legal services of Laguesma without the final
approval and written concurrence of the Commission on Audit. It also ruled
that it was not the government’s responsibility to pay the legal fees already
incurred by Clark Co, but rather by the government officials who violated the
regulations on the matter.
Clark Co and Laguesma separately
filed motions for reconsideration, which the Commission on Audit denied.
The resolution also disallowed the payment of legal fees to the law firm on the
basis of quantum meruit since the Commission on Audit Circular No. 86-255
mandates that the engagement of private counsel without prior approval
"shall be a personal liability of the officials concerned."
Laguesma
filed this petition for certiorari. Petitioner states that it
filed this petition under Rule XI, Section 1 of the 1997 Revised Rules of
Procedure of the Commission on Audit.
Issues:
1. Whether the petition was filed on time; and
2. Whether petitioner is the real party-in-interest.
Ruling:
Section 3 of Rule 64 of the
Rules of Civil Procedure states:
SEC. 3. Time to file
petition. — The petition shall be filed within thirty (30) days from notice of
the judgment or final order or resolution sought to be reviewed. The filing of
a motion for new trial or reconsideration of said judgment or final order or
resolution, if allowed under the procedural rules of the Commission concerned,
shall interrupt the period herein fixed. If the motion is denied, the aggrieved
party may file the petition within the remaining period, but which shall not be
less than five (5) days in any event, reckoned from notice of denial.
Under this rule, a party may
file a petition for review on certiorari within 30 days from notice of the
judgment being assailed. The reglementary period includes the time taken to
file the motion for reconsideration and is only interrupted once the motion is
filed. If the motion is denied, the party may file the petition only within the
period remaining from the notice of judgment.
In this case, petitioner
received the decision of the Commission on Audit on October 16, 2007.It filed a
motion for reconsideration on November 6, 2007, or after 21 days. It
received notice of the denial of its motion on November 20, 2008.The receipt of
this notice gave petitioner nine (9) days, or until November 29, 2008, to file
a petition for certiorari. Since November 29, 2008 fell on a Saturday,
petitioner could still have filed on the next working day, or on December 1,
2008. It, however, filed the petition on December 19, 2008, which was well
beyond the reglementary period.
This petition could have been dismissed outright for being filed out of time. This court, however, recognizes that there are certain exceptions that allow a relaxation of the procedural rules.
In Sanchez v. Court of
Appeals, the Court restated the reasons which may provide justification for a
court to suspend a strict adherence to procedural rules, such as: (a) matters
of life, liberty, honor or property[,] (b) the existence of special or
compelling circumstances, (c) the merits of the case, (d) a cause not entirely
attributable to the fault or negligence of the party favored by the suspension
of the rules, (e) a lack of any showing that the review sought is merely
frivolous and dilatory, and (f) the other party will not be unjustly prejudiced
thereby.
Considering that the issues
in this case involve the right of petitioner to receive due compensation on the
one hand and respondents’ duty to prevent the unauthorized disbursement of
public funds on the other, a relaxation of the technical rules is in order.
Petitioner is a real party-in-interest
Petitioner is a real
party-in-interest, as defined in Rule 3, Section 2 of the 1997 Rules of Civil
Procedure:
SEC. 2. Parties in
interest.— A real party in interest is the party who stands to be benefited or
injured by the judgment in the suit, or the party entitled to the avails of the
suit. Unless otherwise authorized by law or these Rules, every action must be
prosecuted or defended in the name of the real party in interest.
The net effect of upholding
or setting aside the assailed Commission on Audit rulings would be to either
disallow or allow the payment of legal fees to petitioner. Petitioner,
therefore, stands to either be benefited or injured by the suit, or entitled to
its avails. It is a real party-in-interest. Clark Development Corporation’s
Board of Directors, on the other hand, should have been impleaded in this case
as a necessary party.
A necessary party is defined
as "one who is not indispensable but who ought to be joined as a party if
complete relief is to be accorded as to those already parties, or for a
complete determination or settlement of the claimed subject of the action."
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