The result was that Villanueva was prevented from

Republic of the Philippines

receiving (1) his salaries in the total amount of
SUPREME COURT
P13,313.30, (2) his transportation and representation
Manila
expenses as Administrative Officer and Training
FIRST DIVISION Coordinator of the seminars amount in to P2,205.00, and
(3) the money value of his terminal leave, P14,796.29.
G.R. No. L-53585 February 15, 1990
On top of this, Villanueva was charged by the Commission
ROMULO VILLANUEVA, petitioner,
on Audit with malversation of public funds before the
vs.
Tanodbayan. 2 The Tanodbayan however dismissed the
HON. FRANCISCO TANTUICO, JR., and EMILIANA
case upon the Special Prosecutor's finding that the
CRUZ, respondents.
seminar fees were not public funds, and they had been
Mariano C. Cortezano for petitioner. disbursed by Villanueva in good faith. The Commission's
motion for reconsideration was denied for lack of merit.

NARVASA, J.: Villanueva then addressed a letter to the President of the

Philippines, appealing for reversal of Auditor Cruz's action
This case treats of the liability of a Government officer of in preventing the payment of his salaries and other
the Bureau of Records Management who was designated money benefits due him. The matter was referred to the
Administrative Officer and Training Coordinator of two (2) Commission on Audit which however found no cogent
regional seminars of the Bureau, and who, as such, and reason to recommend favorable action on Villanueva's
having custody of seminar fees collected from the appeal. 3
participants, authorized disbursements to certain of the
latter for transportation expenses, food, etc. although, as To obtain relief from these adverse dispositions,
subsequently disclosed, they had already collected and Villanueva has instituted the special civil action of
received amounts corresponding to said items from their certiorari at bar, faulting the respondents with having
respective offices. acted with lack or excess of jurisdiction or grave abuse of
discretion. He argues that:
The officer involved is Romulo Villanueva, petitioner
herein. The seminars of his Bureau were organized and 1) the seminar fees entrusted to him were
conducted pursuant to a directive of the Secretary of private, not public funds;
General Services with a view to updating records 2) any conclusion that he "is indebted to
management techniques. 1 The seminar fees were the Government" so that, according to
charged against the appropriations of the participants' Section 624 of the Revised Administrative
respective offices in accordance with Memo Circular 830 Code, "any money due him or his estate"
issued by the Office of the President, authorizing the may be withheld and "applied in
attendance of records officers from the different satisfaction of such indebtedness," must
government agencies at the seminars. All the fees proceed from judgment of a competent
collected, P43,000.00 in the aggregate, were placed court, not a mere opinion and
under Villanueva's control and supervision, and were pronouncement of an auditor or even by
made disbursable only upon his authorization and for the the COA; and
purposes of the seminars specified in Seminar Operation
3) in any event, he is not in truth
Plans Numbered 001 and 002.
"indebted to the Government," no
For both seminars, Villanueva authorized disbursements disbursement authorized by him being in
of P41,148.20 in payment of food, snacks, transportation violation of the President's Memo Circular
expenses, seminar kits and hand-outs of the participants; 830, or Seminar Regulations Nos. 001 and
hauling services; additional allowance for training staff 002 of the Bureau of Records
(including snacks for personnel who worked overtime in Management, or any existing auditing rule
preparation for the seminars); hotel bills and honoraria of or regulation.
resource speakers. The balance of P1,851.80 was
1. The petitioner's first submission is quickly disposed of.
deposited with the Cashier of the Bureau of Records
The record shows that the seminar fees collected from
Management after the conclusion of the seminars, this
seminar participants and entrusted to Villanueva were
being evidenced by Official Receipt No. 0926496 dated
chargeable against the appropriations of the participants'
October 8, 1975.
respective offices or agencies in accordance with the
It was subsequently discovered that employees and President's Memorandum Circular No. 830. Those fees
officers designated to take part in the seminars had must therefore be deemed public, not private, funds. The
earlier collected from the offices or corporations to which audit of the disbursements of said funds conducted by a
they pertained, their transportation expenses, per diems, government auditor was therefore entirely in order.
and other allowances. For this reason, the Auditor of the
2. The ratiocinations and conclusions of the auditor,
Bureau of Records Management, herein respondent
sustained by the Commission on Audit, are something
Emiliana Cruz, disallowed the disbursement of seminar
else. Auditor Cruz made the finding, on the basis of her
funds in the total amount of P31,949.15 which Villanueva
examination of the relevant records, that Villanueva was
had authorized for the transportation expenses, food and
indebted to the Government in the sum of P31,949.15 —
other expenses of said employees and officers. In Auditor
representing supposedly unauthorized disbursements,
Cruz's view, this amount should also have been deposited
which she had consequently disallowed — and in reliance
with the Cashier of the Bureau of Records Management.
on Section 624 of the Revised Administrative Code, supra,
Auditor Cruz accordingly wrote to Villanueva demanding the indebtedness may properly. be offset against
restitution of this sum of P31,949.15. Villanueva Villanueva's salary and other monetary benefits payable
demurred, claiming that the seminar funds were private to him by the Government. The proposition is untenable.
funds, and they had been disbursed in pursuance to the
While Section 624 of the Revised Administrative Code
objectives of the seminars.
does indeed authorize the set-off of a person's
What Cruz did was to cause the issuance to Villanueva of indebtedness to the Government against "any money due
a certificate of permanent disallowance in virtue of which him or his estate to be applied in satisfaction of such
all money collectible by him from the Government would indebtedness," that indebtedness must be one that is
be applied in satisfaction of the amount of P31,949.15 admitted by the alleged debtor or pronounced by final
which she had disallowed in audit. She did this in reliance judgment of a competent court. In such a case, the person
on Section 624 of the Revised Administrative Code, viz.: and the Government are in their own right both debtors
SEC. 624. When any person is indebted to and creditors of each other, and compensation takes
the Government of the Philippine Islands, place by operation of law in accordance with Article 1278
the Insular Auditor may direct the proper of the Civil Code. 4 Absent, however, any such categorical
officer to withhold the payment of any admission by an obligor or final adjudication, no legal
money due him or his estate, the same to compensation can take place, as this Court has already
be applied in satisfaction of such had occasion to rule in an early case. 5 Unless admitted by
indebtedness. a debtor himself, the conclusion that he is in truth
indebted to the Government cannot be definitely and
Auditor Cruz characterized as an "indebtedness" within finally pronounced by a Government auditor, no matter
the meaning of Section 624, the disbursement of how convinced he may be from his examination of the
P31,949.15 authorized by Villanueva to certain seminar pertinent records of the validity of that conclusion. Such a
participants (which she had disallowed as aforestated).
declaration, that a government employee or officer is commenced by third person and
indeed indebted to the Government, if it is to have communicated in due time to the debtor.
binding authority, may only be made by a court. That
5 La Compania General de Tabacos de
determination is after all, plainly a judicial, not an
Filipinas v. C.H. French, as Auditor of the
administrative function. No executive officer or
Philippine Islands, et al., 39 Phil. 34.
administrative body possesses such a power.
3. In any case, the record does not show Villanueva to
have made illegitimate disbursements of the public funds
in his custody for reimbursement of which to the
Government he had become obliged. The Court is
satisfied that his disbursements were within the letter and
contemplation of the Seminar Operation Plans in question,
Numbered 001 and 002. The disbursements were for
items explicitly specified as authorized expenditures, i.e.,
food, snacks, transportation, hauling services, additional
allowances for the training staff, acquisition costs of
seminar kits and hand-outs, and grocery items for the
snacks of the training staff who had worked overtime
without pay, or for items which were allowable as
reasonably necessary expenses for the seminars upon
approval (actually given) of the Director of the Bureau of
Records Management, such as hotel bills and honoraria
for resource speakers. There is moreover no showing
whatever, contrary to Auditor Cruz's claim, that Villanueva
had knowledge at the time of making the disputed
disbursements, that some of the seminar participants had
already collected from their home offices or agencies
certain amounts to cover some of their expenses for
attendance at the seminar. Hence, assuming that some of
the participants, after having received certain amounts
from their home offices in connection with their
participation in the seminars, had again received other
amounts for the same purpose from petitioner Villanueva,
the liability for that duplication in disbursements should
be exacted from the participants concerned, not from
Villanueva.
It is difficult, in fine, to discern any irregularity in
Villanueva's conduct as officer in charge of the seminars
such as would make him a debtor of the Government, it
appearing on the contrary that he has done naught but
fulfill his duties in good faith and in accordance with the
applicable rules and guidelines. He did not deserve the
harsh treatment accorded to him in the premises. In
meting it out to him, there was grave abuse of discretion.
WHEREFORE, the writ of certiorari prayed for is granted,
annulling and declaring void ab initio the certificate of
permanent disallowance issued by Auditor Cruz against
petitioner Villanueva and the resolution or order of the
Commission on Audit sustaining the same, and ordering
the Commission on Audit to cause the immediate
payment to the petitioner of the sums rightfully due but
improperly withheld from him, i.e., his salaries in the total
amount of P13,313.30, the transportation and
representation expenses due him as Administrative
Officer and Training Coordinator of the seminars in the
sum of P2,205.00, and the money value of his terminal
leave: P14,796.29.
SO ORDERED.
Cruz, Gancayco, Griño-Aquino and Medialdea, JJ., concur.

Footnotes
1 The participants were the records
officers of the various offices and agencies
of the national government and of
government-owned or -controlled
corporations. The first seminar was held in
Quezon City from May 7-16, 1975; the
second, in Naga City from June 18-27,
1975.
2 The complaint was filed on August 9,
1979 and was docketed as I.S. No. 79-
12147.
3 Record, p. 2; Exh. A.
4 ART. 1279 provides that in order that
compensation may be proper, it is
necessary: (1) that each one of the
obligors be bound principally, and that he
be at the same time a principal creditor of
the other; (2) that both debts consist in a
sum of money .. (3) that the two debts be
due; (4) that they be liquidated and
demandable; (5) that over neither of them
there be any retention or controversy,