Department of Health (Dr. Jose N. Rodriguez Memorial Hospital) vs.

NLRC
G.R. No. 113212, December 29, 1995
Topic: Scope of the Civil Service

FACTS
Ceferino Laur, a former patient of the Dr. Jose N. Rodriguez Memorial Hospital (DJRMH), was employed
as a "patient-assistant" in 1975 and performed tasks as part of the hospital's police force. In 1990, following
a mauling incident involving a minor, Laur was dismissed by the hospital’s director. Laur filed a complaint
for illegal dismissal and monetary claims before the National Labor Relations Commission (NLRC).
The Labor Arbiter ruled in Laur's favor, ordering his reinstatement, back wages, and other monetary
benefits. The hospital contested the ruling, arguing that Laur’s employment fell under the Civil Service Law,
and thus, jurisdiction belonged to the Civil Service Commission (CSC). The NLRC dismissed the hospital’s
appeal for being filed late, prompting this petition for certiorari before the Supreme Court.

ISSUE
Which body has jurisdiction over disputes involving employees of a government hospital: the Civil Service
Commission or the NLRC?

RULING

The Supreme Court ruled in favor of the Department of Health and DJRMH, holding that the dispute falls
under the jurisdiction of the Civil Service Commission. The Supreme Court reversed the decisions of the
NLRC and the Labor Arbiter for having been rendered without jurisdiction. The Dr. Jose N. Rodriguez
Memorial Hospital was affirmed to be within the scope of the Civil Service Law, and the temporary
restraining order issued earlier was made permanent.
DOCTRINE

HELD
Scope of the Civil Service:
Under Section 2, Article IX-B of the 1987 Constitution, all government employees, including those
in public health institutions like DJRMH, are covered by the Civil Service Law. The hospital
exercises governmental functions as a public medical facility attached to the Department of Health.

Exclusive Jurisdiction of the CSC:

The Civil Service Commission is the sole arbiter of disputes involving government employees.
Jurisdiction cannot be conferred upon the NLRC, as Labor Code provisions on employment
conditions explicitly exclude government employees.
Labor Arbiter's Decision Nullified:
The Labor Arbiter's findings of an employer-employee relationship and his order for monetary
awards were deemed void for lack of jurisdiction. Participation in NLRC proceedings did not estop
the hospital from raising the issue of jurisdiction.

DISPOSITIVE PORTION

Disputes involving government employees are within the exclusive jurisdiction of the Civil Service
Commission, as mandated by the Constitution and the Civil Service Law, even if such employees are
engaged in tasks resembling private employment.
Felimon Luego v. Civil Service Commission and Felicula Tuozo
G.R. No. L-69137 | August 5, 1986 | J. Cruz

Facts:

Felimon Luego was appointed as Administrative Officer II by the Cebu City Mayor on February 18, 1983, with
his appointment described as "permanent." The Civil Service Commission (CSC) approved it only as
"temporary," citing pending protests and further qualification checks. Later, the CSC found Felicula Tuozo
better qualified for the position, revoked Luego’s appointment, and directed Tuozo’s appointment instead.
Luego challenged the CSC’s decision, asserting his permanent appointment and invoking his security of tenure.

Issue: Can the Civil Service Commission revoke a permanent appointment based on its determination that
another individual is better qualified for the position?

Ruling: No. The Supreme Court ruled in favor of Felimon Luego.

Held: Constitutional Mandate (Article IX-B, Section 2 of the 1987 Constitution):
Under Article IX-B, Section 2(1):
"The Civil Service embraces all branches, subdivisions, instrumentalities, and
agencies of the Government, including government-owned or controlled
corporations with original charters."
Section 2(2) provides that appointments in the civil service shall be made only according to merit
and fitness, determined as far as practicable by competitive examination.
Section 2(3) further states that no officer or employee in the Civil Service shall be removed or
suspended except for cause provided by law.
These provisions reinforce the principle of security of tenure for permanent appointees and limit the CSC’s role
to verifying qualifications.

Nature of Appointment:
1. The appointing authority has exclusive discretion to determine the nature of an appointment. In
this case, Luego’s appointment was explicitly designated as permanent, which the CSC had no
power to alter.
2. The CSC's approval serves merely as an attestation of compliance with qualifications, not as
authority to redefine the appointment.
Role of the Civil Service Commission:
1. As provided under the Civil Service Law (Presidential Decree No. 807) and consistent with
Article IX-B, the CSC is empowered only to approve or disapprove appointments based on
qualifications.
2. If the appointee is qualified, the CSC must approve the appointment. It cannot revoke a valid
permanent appointment by asserting that another candidate is better qualified, as this undermines
the discretion of the appointing authority.
Security of Tenure:
1. Luego’s permanent appointment is protected under Article IX-B, Section 2(3) of the
Constitution, which guarantees civil service employees protection from arbitrary removal.
2. Revoking a permanent appointment based on subjective assessments, as done by the CSC,
violates this constitutional protection.

Disposition: The Supreme Court set aside the CSC's resolution and upheld Luego’s permanent
appointment to the contested position.
Key Principle: Under Article IX-B of the 1987 Constitution, the Civil Service Commission is limited to
verifying qualifications and compliance with legal requirements. It cannot revoke a permanent appointment
based on its assessment of relative merit, as this encroaches on the appointing authority's discretion and violates
the constitutional guarantee of security of tenure.
Rimonte v. Civil Service Commission, et al.
G.R. No. 112045 | May 29, 1995
Topic: Approval of Appointments

Facts:
 Danilo Rimonte (petitioner) contested the appointment of Henrietta Roque (respondent) as Records
Officer V in the Office of the Ombudsman.
 Rimonte, then a Planning Officer III, also applied for the same position, alleging he was more qualified
based on his performance rating.
 Ombudsman Conrado Vasquez appointed Roque, emphasizing that appointment was his discretionary
prerogative, provided the appointee met the minimum qualifications.
 Rimonte appealed to the Civil Service Commission (CSC), which upheld Roque's appointment, finding
her qualified for the position.
 CSC found no basis to nullify the appointment, prompting Rimonte to file a petition for certiorari before
the Supreme Court.

Issues:
1. Whether the Civil Service Commission erred in affirming the appointment of Roque.
2. Whether the Ombudsman committed grave abuse of discretion in appointing Roque.

Ruling: Petition dismissed. The Supreme Court affirmed the CSC's resolutions, upholding Roque's
appointment.

Discretionary Nature of Appointments:

 Appointing authorities have broad discretion in selecting candidates for civil service positions, provided
the appointee meets the minimum qualifications.
 The choice of appointee from among those qualified involves political and administrative
considerations, which the appointing authority is in the best position to evaluate.
Qualifications of Roque:
 The CSC found that Roque met the educational, experiential, and eligibility requirements for the
position of Records Officer V.
 Petitioner’s superior credentials do not invalidate Roque’s appointment since the selection of appointees
is the prerogative of the appointing authority.
Constitutional Basis:
 Article IX-B, Section 2(2) of the 1987 Philippine Constitution states:
"Appointments in the civil service shall be made only according to merit and fitness to be determined, as
far as practicable, and except to positions which are policy determining, primarily confidential, or
highly technical, by competitive examination."
 The Ombudsman’s discretion to appoint within these parameters is consistent with the constitutional
provision, provided that the appointee possesses the minimum qualifications.
No Grave Abuse of Discretion:
 The Ombudsman complied with procedural rules for personnel evaluation and exercised his prerogative
in appointing Roque.
 The CSC’s review confirmed that Roque satisfied the minimum qualifications, and the Court found no
grave abuse of discretion or legal infirmity in the Ombudsman’s decision.
Key Principle: Appointments in the civil service are within the discretion of the appointing authority, subject
only to compliance with the constitutional requirement of merit and fitness. The CSC’s role is limited to
verifying legal qualifications and eligibility, without substituting its judgment for that of the appointing officer.
Disposition: The petition was denied, affirming the validity of Henrietta Roque’s appointment as Records
Officer V.
Sarmiento v. COMELEC, 212 SCRA 307\
Topic: En Banc and Division cases

FACTS:
The special civil actions seek to set aside the Resolutions of respondent Commission on Elections(COMELEC)
in the following Special Cases (SPC):
1) G.R. No. 105628 —granting the appeal from the ruling of the Municipal Board of Canvassers of
Virac,Catanduanes which ordered the exclusion from the canvass of one (1) election return;
2) G.R. No. 105725 —reversing the ruling of the City Board of Canvassers of Iriga City which ordered
theexclusion from the canvass of six (6) election returns and in ordering the said Board of Canvassers toinclude
in the canvass the election returns involved therein;
3) G.R. No. 105727 —dismissing the appeal of petitioner from the ruling of the Provincial Board ofCanvassers
of Catanduanes which ordered the inclusion in the canvass the certificate of canvass for themunicipality of
Virac, excluding the returns from 48 precincts;
4) G.R. No. 105730 —affirming the ruling of the Municipal Board of Canvassers of Jose
Panganiban,Camarines Norte which dismissed petitioner's opposition to the composition of the said Municipal
Boardof Canvassers;
5) G.R. No. 105771 —affirming the ruling of the Municipal Board of Canvassers of Cabusao, CamarinesSur
which, among others, rejected petitioner's objection to certain election returns;
6) G.R. No. 105778 —dismissing said case for non-compliance with Section 20 of R.A. No. 7166;
7) G.R. No. 105797 —affirming the rulings of the Provincial Board of Canvassers of Davao Oriental
whichrejected petitioner's objections to the canvass of some certificates of canvass;
8) G.R. No. 105919 —dismissing petitioner's appeal from the ruling of the Municipal Board of Canvassersof
Upi Nuro, Maguindanao;
9) G.R. No. 105977 —denying the amended pre-proclamation petition, which is an appeal from therulings of
the Municipal Board of Canvassers of Ternate, Cavite, and denying a subsequent motion toresolve the issues
raised in said amended petition.

Petitioners impugn the challenged resolutions above specified as having been issued with grave abuse of
discretion in that, inter alia, the Commission, sitting en banc, took cognizance of and decided theappeals
without first referring them to any of its Divisions.

ISSUE:
Whether or not the challenged resolutions above specified were issued with grave abuse of discretion

HELD:
Indisputably, the COMELEC en banc acted without jurisdiction, or with grave abuse of discretion, when
itresolved the appeals of petitioners in the abovementioned Special Cases without first referring them toany of
its Divisions. Said resolutions are, therefore, null and void and must be set aside. Consequently,the appeals are
deemed pending before the Commission for proper referral to a Division. Section 3, subdivision C, Article IX of
the 1987 Constitution expressly provides:

Sec. 3. The Commission on Elections may sit en banc or in two divisions, and shall promulgate its rules
ofprocedure in order to expedite disposition of election cases, including pre-proclamation controversies.All such
election cases shall be heard and decided in division, provided that motions for reconsiderationof decisions shall
be decided by the Commission en banc.

The 1973 Constitution prescribed another rule. Its Section 3, subdivision C of Article XII provided asfollows:
Sec. 3. The Commission on Elections may sit en banc or in three divisions. All election cases may beheard and
decided by divisions, except contests involving Members of the Batasang Pambansa, whichshall be heard and
decided en banc. . . .

It is clear from the abovequoted provision of the 1987 Constitution that election cases include pre-proclamation
controversies, and all such cases must first be heard and decided by a Division of theCommission. The
Commission, sitting en banc, does not have the authority to hear and decide the sameat the first instance. In the
COMELEC RULES OF PROCEDURE, pre-proclamation cases are classified asSpecial Cases 1 and, in
compliance with the above provision of the Constitution, the two (2) Divisions ofthe Commission are vested
with the authority to hear and decide these Special Cases. 2 Rule 27 thereofgoverns Special Cases; specifically,
Section 9 of the said Rule provides that appeals from rulings of theBoard of Canvassers are cognizable by any
of the Divisions to which they are assigned and not by theCommission en banc.

Accordingly, the instant petitions are DISMISSED without prejudice to the filing by petitioners of
regularelection protests. If the winning candidates for the positions involved in the Special Cases subject ofthese
petitions have already been proclaimed, the running of the period to file the protests shall bedeemed suspended
by the pendency of such cases before the COMELEC and of these petitions beforethis Court.
The Temporary Restraining Orders issued in G.R. No. 105727, G.R. No. 105730 and G.R. No. 105797
arehereby LIFTED.
EMMANUEL M. RELAMPAGOS, petitioner, vs. ROSITA C. CUMBA and the COMMISSION ON
ELECTIONS, respondents.
GR No. 114276, February 9, 1995

DOCTRINE:
The Commission on Elections (COMELEC) has the power to issue extraordinary writs of certiorari, prohibition, and
mandamus in aid of its appellate jurisdiction, as provided by B.P. Blg. 697. This authority remains effective even after the
enactment of the Omnibus Election Code (B.P. Blg. 881), but only in cases where the COMELEC has exclusive appellate
jurisdiction. The exercise of such authority is rooted in both statutory law and the Constitution, specifically the provision
granting the COMELEC exclusive appellate jurisdiction over certain election-related cases.

Facts:
The case involves a petition for certiorari filed by Rosita Cumba, challenging an order of the trial court granting execution
pending appeal in an election-related case. The trial court issued a writ of execution after the petitioner’s appeal had been
perfected and the case records were elevated to the Commission on Elections (COMELEC).
The COMELEC, having already taken cognizance of the appeal, issued a resolution annulling the trial court's order for
execution pending appeal, arguing that the trial court had lost jurisdiction after the perfection of the appeal. Cumba filed a
petition challenging this resolution, asserting that the COMELEC did not have the authority to annul the writ of execution.

Issues:
1. Does the COMELEC have the authority to issue extraordinary writs such as certiorari, prohibition, and
mandamus?
2. Did the COMELEC act within its powers when it annulled the trial court’s order for execution pending
appeal?

Ruling:
The Supreme Court ruled in favor of the COMELEC, affirming its resolution annulling the trial court’s order for
execution pending appeal.
The Court held that the COMELEC has the inherent authority to issue extraordinary writs of certiorari, prohibition, and
mandamus in aid of its appellate jurisdiction. This authority stems from B.P. Blg. 697, specifically Section 50, which
grants the COMELEC exclusive authority to hear and decide petitions for certiorari, prohibition, and mandamus involving
election cases.
The Court clarified that this authority is not constrained by the passage of the Omnibus Election Code (B.P. Blg. 881).
Although the Omnibus Election Code repealed certain election laws, B.P. Blg. 697, particularly Section 50, remains in
effect and allows the COMELEC to exercise its jurisdiction over extraordinary writs only in cases where it has exclusive
appellate jurisdiction, such as in election-related matters.
Furthermore, the Court found that the trial court had lost jurisdiction over the case after the appeal had been perfected and
the records were elevated to the COMELEC. The motion for execution pending appeal was filed after this transfer of
jurisdiction, and the trial court could no longer validly act on it. As such, the COMELEC’s resolution was deemed correct
in setting aside the trial court's action.
Rationale:
The Supreme Court’s decision reaffirmed the powers granted to the COMELEC under B.P. Blg. 697, particularly its
authority to issue extraordinary writs in election cases. The ruling emphasized that the COMELEC’s powers are not
subject to the limitations suggested by the repeal of other election statutes, such as the Omnibus Election Code.
The Court stressed that the COMELEC’s jurisdiction is necessary to preserve the status quo and maintain control over
election-related disputes, particularly when it has exclusive appellate jurisdiction. The issuance of certiorari, prohibition,
and mandamus was thus deemed essential for the COMELEC to effectively exercise its appellate functions in election
cases.
Additionally, the Court cited Article IX-C, Section 2 of the 1987 Constitution, which provides that the COMELEC shall
have exclusive jurisdiction over all cases involving the enforcement of election laws, including the power to resolve
contested elections. The Court's ruling acknowledged that the COMELEC's jurisdiction extends beyond mere adjudication
of disputes but includes the exercise of extraordinary powers to maintain the integrity of the election process.
Legal Principles:
Powers of COMELEC: The COMELEC has the authority to issue extraordinary writs of certiorari, prohibition,
and mandamus in election cases, as vested in it by Section 50 of B.P. Blg. 697. This authority is in aid of its
appellate jurisdiction and is recognized under the 1987 Philippine Constitution, particularly Article IX-C,
Section 2.
1. Section 50, B.P. Blg. 697: "The Commission is hereby vested with the exclusive authority to hear and
decide petitions for certiorari, prohibition, and mandamus involving election cases."
2. Article IX-C, Section 2 of the 1987 Constitution: "The Commission on Elections shall exercise exclusive
jurisdiction over all cases involving the enforcement and interpretation of election laws, including the
power to resolve contested elections."
Jurisdiction: Once an appeal is perfected and records are elevated to the COMELEC, the trial court loses
jurisdiction over the case. Any subsequent motions or actions by the trial court are void. This is aligned with
Section 23 of the Interim Rules Implementing B.P. Blg. 129, which governs the perfection of appeals in
election-related cases.
Effect of Repeal: The Omnibus Election Code did not repeal the provisions of B.P. Blg. 697 granting the
COMELEC jurisdiction over extraordinary writs. The COMELEC’s powers in election cases remain intact.
Loong v. COMELEC G.R. No. 133676, April 4, 1999

Facts:
In a bid to improve our elections, Congress enacted R.A. No. 8436 on December 22, 1997 prescribing the
adoption of an automated election system. The new system was used in the May 11, 1998 regular elections held
in the Autonomous Region in Muslim Mindanao (ARMM) which includes the Province of Sulu. Atty. Jose
Tolentino, Jr. headed the COMELEC Task Force to have administrative oversight of the elections in Sulu.

During the election it was noticed that there was an error in the printing of the local ballots, as a consequence of
which, the automated machines failed to read them correctly.

Atty. Tolentino, Jr. called for an emergency meeting of the local candidates and the military-police officials
overseeing the Sulu elections. The meeting discussed how the ballots in Pata should be counted in light of the
misaligned ovals. Some recommended a manual count while other insisted on an automated count. In view of
their differences in opinion, Atty. Tolentino, Jr. requested the parties to submit their written position papers.

Petitioner argues that he automated counting is mandatory and could not be substituted by a manual counting.
Where the machines are allegedly defective, the only remedy provided for by law is to replace the machine.
Manual counting is prohibited by law;

Issue:

Whether or not COMELEC had the authority to order a manual count.

Held:

YES. In enacting R.A. No. 8436, Congress obviously failed to provide a remedy where the error in counting is
not machine-related for human foresight is not all-seeing. We hold, however, that the vacuum in the law cannot
prevent the COMELEC from levitating above the problem. Section 2(1) of Article IX(C) of the Constitution
gives the COMELEC the broad power "to enforce and administer all laws and regulations relative to the
conduct of an election, plebiscite, initiative, referendum and recall." Undoubtedly, the text and intent of this
provision is to have COMELEC all the necessary and incidental powers for it to achieve the objective of
holding free, orderly, honest, peaceful, and credible elections. Congruent to this intent, this Court has not been
niggardly in defining the parameters of powers of COMELEC in the conduct of our elections.

Our elections are not conducted under laboratory conditions. In running for public offices, candidates do not
follow the rules of Emily Post. Too often, COMELEC has to make snap judgments to meet unforseen
circumstances that threaten to subvert the will of our voters. In the process, the actions of COMELEC may not
be impeccable, indeed, may even be debatable. We cannot, however, engage in a swivel chair criticism of these
actions often taken under very difficult circumstances.
Alfredo Guieb vs. Hon. Luis M. Fontanilla, in his capacity as the Presiding Judge of the RTC, Branch 42,
Dagupan City, and Manuel Asuncion
G.R. No. 118118, August 14, 1995

Facts:
Alfredo Guieb and Manuel Asuncion were candidates for the position of Punong Barangay in Barangay
Nilombot, Sta. Barbara, Pangasinan, in the May 9, 1994 barangay elections. Guieb was proclaimed the winner,
but Asuncion filed an election protest before the Municipal Trial Court (MTC) of Sta. Barbara. The MTC ruled
in favor of Guieb, confirming his proclamation. Asuncion appealed the MTC decision to the Regional Trial
Court (RTC) of Dagupan City, which, on August 31, 1994, reversed the MTC decision and declared Asuncion
the winner. Guieb's motion for reconsideration was denied. On December 12, 1994, Guieb filed a petition with
the Supreme Court.

Issue:
Whether the RTC had jurisdiction over the appeal from the MTC’s decision in the election contest for the
position of Punong Barangay, or whether such an appeal falls under the exclusive jurisdiction of the
Commission on Elections (COMELEC).

Held:
The Supreme Court granted the petition and ruled that the RTC had no jurisdiction over the appeal. The Court
emphasized that, under Article IX-C, Section 2(2) of the 1987 Constitution, the COMELEC has exclusive
original jurisdiction over election contests involving elective barangay officials decided by the MTC. This
provision was further clarified in the Court’s ruling in Flores v. Commission on Elections, where it struck down
the provision of Republic Act No. 6679 that granted appellate jurisdiction to the RTC in such cases. The
decision of the MTC had become final, as Asuncion failed to properly appeal to the COMELEC. Thus, the
RTC’s decision was annulled for lack of jurisdiction.

Ruling:
The petition was granted. The Supreme Court set aside the RTC’s decision and order for lack of jurisdiction and
declared the MTC decision as final. The writ of execution issued by the RTC was also annulled.

Doctrines:

1. Exclusive Original Jurisdiction of COMELEC: The Constitution vests the COMELEC with exclusive
jurisdiction over all election contests involving barangay officials that are initially decided by courts of
limited jurisdiction, such as the MTC.
2. Appellate Jurisdiction: The provision granting RTC appellate jurisdiction over election contests
involving barangay officials was struck down as unconstitutional.
3. Judicial Awareness: Judges are presumed to know the constitutional limits of their jurisdiction, and
they must be familiar with established legal doctrines to avoid mistakes and unnecessary delays in the
legal process.

Legal Provisions:

 Article IX-C, Section 2(2), 1987 Constitution: Grants the COMELEC exclusive jurisdiction over
election contests involving barangay officials.
 Republic Act No. 6679 (Struck Down): Provided appellate jurisdiction to the RTC over barangay
election cases, which the Court declared unconstitutional in Flores v. COMELEC.

Significance:
This case reaffirms the exclusive jurisdiction of the COMELEC over election contests involving barangay
officials and stresses the importance of judicial familiarity with constitutional provisions and established
precedents. It also highlights the need for lower courts to respect the jurisdictional boundaries set by the
Constitution.
[G.R. No. 147066. March 26, 2001]
AKBAYAN vs. COMMISSION ON ELECTIONS, respondent

FACTS:

Petitioners, representing the youth sector, seek to direct the Commission on Elections (COMELEC) to conduct
a special registration before the May 14, 2001 General Elections for new voters aged 18 to 21. Petitioners assert
that approximately four million youth failed to register on or before the December 27, 2000 deadline set by the
respondent COMELEC under Republic Act No. 8189. On February 8, 2001, the COMELEC issued Resolution
No. 3584 denying the petition. Aggrieved by the denial, petitioners AKBAYAN-Youth, SCAP, UCSC, MASP,
KOMPILII (Youth) et al. filed this Petition for Certiorari and Mandamus before the Court.

ISSUE:

Whether or not the Court can compel the respondent COMELEC to conduct a special registration of new voters
during the period between the COMELEC’s imposed December 27, 2000 deadline and the May 14, 2001
general elections.

HELD:

The petitions are bereft of merit. As to the procedural limitation, the act of registration is an indispensable
precondition to the right of suffrage. Registration is part and parcel of the right to vote and an indispensable
element in the election process. Thus, contrary to petitioners’ argument, registration cannot and should not be
denigrated to the lowly stature of a mere statutory requirement.

Proceeding from the significance of registration as a necessary requisite to the right to vote, the State,
undoubtedly, in the exercise of its inherent police power, may enact laws to safeguard and regulate the act of
voter’s registration for the ultimate purpose of conducting honest, orderly, and peaceful elections. This also
ensures that even pre-election activities could be performed by the duly constituted authorities in a realistic and
orderly manner—one which is not indifferent and so far removed from the pressing order of the day and the
prevalent circumstances of the times.

In light of Article IX-C, Section 2 of the Constitution, which grants the Commission on Elections the power
to "enforce and administer all laws and regulations relative to the conduct of an election, plebiscite, initiative,
referendum, and recall," it is within the authority of the COMELEC to regulate the timing and procedures for
voter registration.

Considering the circumstances where the writ of mandamus lies and the peculiarities of the present case, we are
of the firm belief that petitioners failed to establish, to the satisfaction of the Court, that they are entitled to the
issuance of this extraordinary writ so as to effectively compel respondent COMELEC to conduct a special
registration of voters. For the determination of whether or not the conduct of a special registration of voters is
feasible, possible, or practical within the remaining period before the actual date of election, it involves the
exercise of discretion and thus, cannot be controlled by mandamus.

WHEREFORE,

premises considered, the instant petitions for certiorari and mandamus are hereby DENIED.
Commissioner of Internal Revenue v. Commission on Audit, G.R. No. 101976, January 29, 1993
Date: January 29, 1993

Facts:
On June 25, 1986, Tirso B. Savellano, the petitioner, provided the Bureau of Internal Revenue (BIR) with a
confidential affidavit detailing tax violations committed by the National Coal Authority (NCA) and the
Philippine National Oil Company (PNOC), which were found to have unpaid taxes amounting to P234 million.
Following the BIR’s investigation, NCA and PNOC paid the taxes owed. Savellano was recommended to
receive an informer's reward for his role in exposing the tax violations.
However, on February 8, 1989, COA issued Decision No. 7407, disallowing the payment of the informer's
reward, citing that there was no actual revenue recovered from the NCA's tax payments since these were
internal government transactions. COA emphasized that government agencies, being part of the state, cannot
yield informer's rewards under the National Internal Revenue Code (NIRC), as it would involve inter-
governmental transactions.
The Commissioner of Internal Revenue and Savellano filed separate petitions for the reconsideration of COA’s
decision. COA upheld its decision, leading to the filing of consolidated petitions before the Supreme Court.

Issues:
1. Whether COA’s disallowance of the informer's reward is valid given that the tax payments were made
by government-owned corporations.
2. Whether COA has the authority to disallow payments of informer's rewards despite recommendations by
the Department of Finance.

Ruling:
The Supreme Court ruled in favor of the petitioners, stating that the Commission on Audit’s (COA) power of
audit does not extend to the disallowance of rewards granted by the Department of Finance or other competent
administrative bodies, such as the Bureau of Internal Revenue (BIR).
The Court emphasized that the determination of an informer's entitlement to a reward under Section 281
(formerly Section 316) of the National Internal Revenue Code (NIRC) is a function of the BIR and the
Department of Finance, and their decision is conclusive upon the executive branch. COA’s audit jurisdiction
does not extend to overriding this determination, which is based on the statutory authority of the BIR to offer
rewards for tax violations.
The Court also noted that the informer's reward provisions in the NIRC do not require that the payment of taxes
be from non-governmental sources to qualify for a reward. Even though NCA and PNOC are government
entities, the taxes they paid went to the national treasury, benefitting the state. Therefore, the Court found no
valid reason for COA to disallow the reward.
Furthermore, the Court held that COA’s power of audit is constitutional and grounded in Article IX-D, Section
2 of the 1987 Constitution, which grants COA the authority to examine, audit, and settle all accounts
pertaining to the revenue and receipts of, and expenditures or uses of funds and property owned or held in trust
by the government. However, the Court also stated that this audit power does not extend to overriding final
decisions made by the Department of Finance regarding informer's rewards, as these are executive decisions
based on the law.

Conclusion:
The Supreme Court ruled that COA cannot disallow the informer's reward approved by the Department of
Finance, as the final determination on reward entitlement lies with the appropriate executive bodies, not COA.
COA’s audit jurisdiction does not extend to decisions made under Section 281 of the NIRC, and it must respect
the Department of Finance’s conclusive authority in this matter.

Key Provisions:
 Article IX-D, Section 2 of the 1987 Constitution: Grants COA the authority to audit and settle
accounts related to government funds but does not empower it to override executive decisions,
particularly regarding statutory rewards.
 Section 281 of the National Internal Revenue Code: Entitles informers to rewards for providing
information leading to the recovery of tax revenues, provided there is actual recovery.

Held:
COA’s disallowance of the payment of informer's reward was reversed, and the reward to petitioner Savellano
was upheld.