Buisan vs. Commission on Audit

A petition for review of a COA decision must be signed by the petitioners themselves, not by an unauthorized representative, and failure to comply with the certification against forum shopping requirement is a ground for dismissal. Moreover, money claims against the government for quasi-delict must be instituted within four years from accrual of the cause of action, and unreasonable delay in asserting such claims constitutes laches. Finally, an unincorporated government agency performing a governmental function is immune from suit under the doctrine of non-suability of the State unless consent is given.

In 1989, the Department of Public Works and Highways constructed the Liguasan Cut-off Channel in Tunggol, Pagalungan, Maguindanao, a flood-mitigation project. After heavy rains caused flooding, numerous landowners claimed that the premature opening of the channel damaged their crops, properties, and improvements. The DPWH Regional Office investigated but, owing to the lapse of time and insufficient evidence, no final resolution issued. The matter was referred to the Commission on Audit, which has primary jurisdiction over money claims against the government. On April 14, 2010, the claimants, through Mayor Bai Annie C. Montawal of Montawal, Maguindanao, filed a petition before the COA seeking payment of ₱122,051,850.00. The COA denied the claims for lack of merit, holding them barred by laches and prescription. Petitioners then elevated the case to the Supreme Court.

• The Government Project: In 1989, the DPWH undertook construction of the Liguasan Cut-off Channel in Tunggol, Pagalungan, Maguindanao, to minimize perennial flooding. The project involved a diversion channel intended to relieve upstream areas.
• Claims of Damage: Beginning in April 2001, various landowners claimed that the premature opening of the channel caused flash floods that damaged their crops, properties, and improvements. The DPWH Regional Office No. XII and a Technical Working Group investigated; in 2004, they recommended just compensation but noted that the actual quantity of damaged crops could no longer be physically verified. A 2006 ad hoc committee made no final resolution.
• Filing with COA: On April 14, 2010, 144 named individuals, allegedly landowners, filed a petition before the COA through their representative, Mayor Bai Annie C. Montawal of Montawal, Maguindanao. They prayed that the DPWH be ordered to pay ₱122,051,850.00. Montawal signed the verification and certification against forum shopping, claiming to be their “duly constituted attorney-in-fact,” but did not attach any Special Power of Attorney from the claimants.
• Conflict Among Claimants: Some petitioners, specifically Madag Buisan, filed a Motion to Dismiss the petition before the COA, alleging that Montawal lacked authority to represent them and that a separate petition based on the same claim had been filed.
• DPWH Defense: The DPWH argued that the claimants failed to prove ownership of the damaged property, that the damage was caused by the project, and that the action was barred by prescription.
• COA Factual Findings: The COA identified material inconsistencies in the evidence. The Assistant Team Leader’s 5th Indorsement noted: the lists of claimants originated from an unsigned, undated document; the same lots were claimed by two or more claimants; the claimed fruit-tree density (2–3 meters apart) was improbable for fruit-bearing trees; numerous lots were not downstream of the project and their flooding could not be attributed to the channel; several listed lots did not appear on the parcellary map; all Declarations of Real Property were signed by the same Municipal Assessor on the same date (April 12, 2007); no land titles were submitted; and the majority of lots were located in Pagalungan, not Datu Montawal.

• Authority to Sign Certification: Petitioners argued that Montawal was duly authorized to file the petition and sign the certification against forum shopping, and that there was no willful violation of the rule.
• Prescription and Laches: Petitioners contended that their cause of action arose in 1992, not 1989, and that their claims filed with the DPWH in 2001 or 2004 were therefore timely; they asserted that the COA gravely abused its discretion in holding the claims prescribed and barred by laches.
• Merits of the Claim: Petitioners maintained that the DPWH’s premature opening of the cut-off channel caused actual damage to their property, entitling them to just compensation, and that substantial evidence of their losses was ignored.

• Certification Defect: The DPWH and COA posited that the petition should be dismissed because the certification against forum shopping was signed by Montawal, a non-party who lacked proper authorization, in violation of Section 5 in relation to Section 3 of Rule 46.
• State Immunity: The DPWH argued that it is immune from suit because the construction of the flood-control channel was a governmental function, and the State had not consented to be sued.
• Prescription and Laches: Respondents maintained that the money claims, filed more than 10 years after the alleged 1989 damage, were barred by the four-year prescriptive period under Article 1146 of the Civil Code for quasi-delict and that the unreasonable delay constituted laches.
• No Grave Abuse of Discretion: The COA asserted that its denial was based on substantial evidence of inconsistencies and lack of proof, and that its factual findings are entitled to great respect and finality.

• Certification Against Forum Shopping: Whether the petition should be dismissed because the certification against forum shopping was signed by Montawal, who was not a party and lacked proper authorization.
• State Immunity: Whether the DPWH is immune from suit for damages arising from the construction of the Liguasan Cut-off Channel.
• Prescription and Laches: Whether the COA gravely abused its discretion in ruling that the petitioners’ money claims were barred by prescription and laches.
• Grave Abuse of Discretion by COA: Whether the COA acted with grave abuse of discretion in denying the claims on the merits given the evidentiary inconsistencies and lack of substantial evidence.

• Certification Against Forum Shopping: The petition was procedurally defective. Under Rule 46, Section 3, the certification must be executed by the petitioners themselves, not by an unauthorized representative, because the parties have personal knowledge of any similar pending actions. Montawal’s bare claim of being attorney-in-fact was insufficient; no Special Power of Attorney was appended. Moreover, her authority was expressly questioned by the very petitioners she purported to represent when they filed a motion to dismiss the COA case. The defect alone warranted dismissal.
• State Immunity: The DPWH, as the government’s engineering and construction arm, performs governmental functions. The flood-control project was undertaken pursuant to its mandate under the Administrative Code of 1997. Under the doctrine of non-suability, the State may not be sued without its consent. No consent, express or implied, was alleged in the petition. The failure to allege such consent is a fatal defect requiring dismissal of the complaint against the DPWH.
• Prescription and Laches: The cause of action—the alleged injury from the flooding—arose no later than 1992. The claims were first presented to the DPWH only in 2001 or 2004, well beyond the four-year prescriptive period for quasi-delict under Article 1146 of the Civil Code. The COA correctly held the claims prescribed. Furthermore, all elements of laches were present: (a) the DPWH’s construction and opening of the channel occurred in 1989/1992; (b) the petitioners delayed 15 years before formally filing with the COA in 2010; (c) the delay was unreasonable and left the DPWH without adequate notice of the assertion of rights; and (d) the DPWH was prejudiced by the impossibility of verifying stale claims due to the changed conditions and lack of records. No grave abuse of discretion attended the COA’s application of these bars.
• Grave Abuse of Discretion by COA: The COA did not act capriciously, arbitrarily, or whimsically. Its denial was grounded on substantial evidence revealing material inconsistencies: conflicting claims over identical lots, improbable crop densities, absence of land titles, lots not located downstream, and declarations all dated the same day. The COA, vested with constitutional authority and specialized expertise over money claims against the government, exercised its audit discretion within permissible bounds. Its factual findings are accorded great respect and finality absent a clear showing of unfairness or arbitrariness.

• Doctrine of Non-Suability of the State — The State cannot be sued without its consent, a postulate flowing from the juristic concept of sovereignty. An unincorporated government agency performing a governmental function is immune from suit unless the State consents, expressly or impliedly. The DPWH, in constructing a flood-control project, exercises a governmental function and is protected by this immunity. Failure to allege State consent in the complaint is a fatal defect.
• Certification Against Forum Shopping — Under Sections 3 and 5 of Rule 46 in relation to Rule 64, the certification against forum shopping must be executed by the plaintiff or petitioner themselves because they have personal knowledge of any pending similar actions. A representative’s authority must be proved by a special power of attorney or competent evidence; a bare assertion of representation is insufficient. Non-compliance is a ground for dismissal.
• Prescription of Quasi-Delict Claims — Article 1146 of the Civil Code prescribes a four-year period for actions upon an injury to the rights of the plaintiff and upon a quasi-delict. The period is computed from the time the cause of action accrues, i.e., when the injury occurs. Filing a claim beyond four years extinguishes the right of action.
• Laches — Laches is the failure or neglect, for an unreasonable and unexplained length of time, to do that which, by exercising due diligence, could or should have been done earlier. Its elements are: (1) conduct on the part of the defendant giving rise to the situation complained of; (2) delay in asserting the complainant’s rights after knowledge of the defendant’s conduct and after an opportunity to sue; (3) lack of knowledge or notice on the part of the defendant that the complainant would assert the right; and (4) injury or prejudice to the defendant if relief is accorded.
• Grave Abuse of Discretion Standard for COA — The COA’s factual findings, when supported by substantial evidence, are accorded great respect and finality. Reviewing courts will not substitute their judgment for that of the COA absent a showing that the COA exercised its power in a capricious, arbitrary, or whimsical manner tantamount to an evasion of positive duty or a virtual refusal to perform a duty.

• “The fundamental law of the land provides that the State cannot be sued without its consent. It is a fundamental postulate of constitutionalism flowing from the juristic concept of sovereignty that the State, as well as its government, is immune from suit unless it gives its consent.”
• “In the case of natural persons, the rule requires the parties themselves to sign the certification against forum shopping. The reason for such requirement is that the petitioner himself knows better than anyone else whether a separate case has been filed or pending which involves substantially the same issues.”
• “[L]aches has been defined as the failure or neglect, for an unreasonable and unexplained length of time, to do that which, by exercising due diligence could or should have been done earlier.”
• “Absent any showing that COA capriciously, arbitrarily or whimsically exercised its discretion that would tantamount to evasion of a positive duty or a virtual refusal to perform the duty or to act at all in contemplation of law resulting to the prejudice of the rights of the claimants, the Court believes that COA did not abuse, much less gravely, its discretion in denying the claims of the petitioners.”

• Fuentebella v. Castro, 526 Phil. 668 (2006) — Followed for the rule that the certification against forum shopping must be signed by the parties themselves because they know best whether a similar case exists.
• Altres, et al. v. Empleo, et al., 594 Phil. 246 (2008) — Cited for the principle that non-compliance with the certification requirement is a ground for dismissal absent a compelling reason.
• Department of Agriculture v. NLRC, 298 Phil. 491 (1993) — Relied upon for the doctrine of state immunity.
• Republic v. Feliciano, 232 Phil. 391 (1987) — Cited for the rule that failure to allege the State’s consent in the complaint is a fatal defect.
• Akang v. Municipality of Isulan, Sultan Kudarat Province, 712 Phil. 420 (2013) — Cited for the definition of laches.
• Republic v. Marjens Investment Corporation, G.R. No. 156205, November 12, 2014, 739 SCRA 676 — Cited for the elements of laches.
• Espinas v. Commission on Audit, G.R. No. 198271, April 1, 2014, 720 SCRA 302 — Referred to regarding the COA’s constitutional audit power.
• Yap v. Commission on Audit, 633 Phil. 174 (2010) — Cited for the policy of sustaining administrative agency decisions absent grave abuse of discretion.

• Article XVI, Section 3, 1987 Constitution — The State may not be sued without its consent. Applied to insulate the DPWH from suit.
• Article 1146, Civil Code — Prescribes a four-year period for actions upon an injury to the rights of the plaintiff and upon a quasi-delict. Applied to bar the money claims.
• Section 5, Rule 64, Rules of Court — Requires a petition for review of COA decisions to contain a verified certification against forum shopping in accordance with Rule 46.
• Section 3, Rule 46, Rules of Court — Specifies that the certification against forum shopping must be executed by the petitioner and that non-compliance is a ground for dismissal.
• Rule VIII, Section 1(a), 2009 Revised Rules of Procedure of the COA — Vests the COA with original jurisdiction over money claims against the Government.
• Commonwealth Act No. 327, as amended by Section 26 of Presidential Decree No. 1445 — The applicable laws at the time the cause of action arose, providing the COA’s primary jurisdiction over money claims against government agencies.

Chief Justice Maria Lourdes P.A. Sereno; Associate Justices Antonio T. Carpio, Presbitero J. Velasco, Jr., Teresita J. Leonardo-De Castro, Diosdado M. Peralta, Lucas P. Bersamin, Mariano C. Del Castillo, Jose Catral Mendoza, Estela M. Perlas-Bernabe, Marvic M.V.F. Leonen, and Alfredo Benjamin S. Caguioa. (Associate Justice Francis H. Jardeleza took no part.)

N/A (No dissenting opinions were registered.)