011 FIRST UNITED CONSTRUCTION CORP. V.
VALDEZ equity shall not be controlling, it does not mean that orders in
(IGNACIO)
10 December 2008 | Carpio-Morales, J. | Suppletory/analogous application in
administrative or quasi-judicial proceedings under Sec 4, Rule 1
FACTS:
PETITIONER: First United Construction Corporation (FUCC)
RESPONDENTS: Menandro G. Valdez & Ramon Adea
SUMMARY: The National Housing Authority (NHA) contrated FUCC
for its Freedom Valley Resettlement Project in Antipolo, Rizal. One of
the works to be constructed are the roads leading up to the Project, and
instead of following technical specifications, FUCC used concrete
treated base course (CTBC) instead of the prescribed subbase course; it
also refused to have field density tests and proceeded to pour the
concrete without proper approval. The road collapsed after a typhoon,
and investigations were conducted as to the handling of government
funds in the project. Respondents Valdez and Adea were Principal
Engineers of the NHA assigned to oversee FUCC's contract works, and
they brought up the problem with the Officer-in-Charge (OIC). It was
agreed that tests would be conducted, and Valdez recommended a much
lower billing based on his own assessment of FUCC's work (at 16m
PHP, instead of the 50m PHP billing that FUCC provided).
This prompted FUCC to file administrative cases in the Ombudsman
against respondents Valdez & Adea, alleging that the respondents had
tried (and failed) to extort money from them, which is why they (Valdez
& Adea) refused to act on FUCC's 2nd Progress Billing. Valdez & Adea
countered that FUCC and their superiors from the NHA were pressuring
them (Valdez & Adea) to pass off the collapse of the road as due to
natural causes, and to justify payments that were made outside of the
specifications in the project. The Ombudsman found Valdez & Adea
guilty of extortion and dismissed them from service. Upon petition in
the CA, however, the Ombudsman decision was reversed because it
lacked substantial evidence.
The Supreme Court dismissed FUCC & NHA's petitions, and ruled that
there was no substantial evidence to warrant the termination of Valdez
& Adrea from employment. Although rules of evidence are not
controlling in administrative cases, evidence must still be substantial for
orders and decisions to be justified.
DOCTRINE: While rules of evidence prevailing in courts of law and
administrative proceedings can be justified without substantial
evidence.
1.! FEB 1998: The National Housing Authority (NHA) contracted
FUCC for its Freedom Valley Resettlement Project (the Project) in
Antipolo, Rizal. Valdez & Adea (the respondents) are Principal
Engineers of the NHA and was part of the team that was to oversee
FUCC's contract works.
2.! Problems arose when FUCC refused to comply with the technical
specifications of the Project, by using substituted concrete treated
base course (CTBC) for a subbase course. FUCC also refused to
have necessary materials and field density tests before pouring
concrete on the roads; and even proceeded to pour concrete without
proper approval. (very technical neto, basta long story short pasaway
si FUCC.)
3.! 11 DEC 1998: FUCC submitted its 2nd Progress Billing with an
attached Abstract of Accomplishment (covering the period of 1 JUL
1998- 30 NOV 1998). This billed the NHA for a total of PHP
50,701,846.80; inclusive of the costs for subbase course on major
roads & minor roads.
4.! The road that was built (leading up to the Project) collapsed after
a typhoon, and was reported in three articles in The Philippine Star.
These articles prompted a series of investigations as to the handling
of funds in the project.
5.! 12 JAN 1999: NHA-Contractors held a meeting, where Valdez
(respondent) raised the non-compliance by FUCC with the
specifications of the Project, specifically the use of CTBC (see #1, a)
instead of the subbase course. Though the Officer-in-Charge of the
Project said that the practice of using CBTC was acceptable (and
most advantageous during rainy season), it was agreed that tests
would be conducted to find out of the constructed roads met the
acceptable standard. Valdez also later recommended to the OIC that
based on NHA's own Abstract of Physical Accomplishment, only
PHP 16,342,226.23 should be paid to FUCC.
6.! 29 MAR 1999: FUCC filed an administrative complaint against
respondents Valdez & Adea in the Office of the Ombudsman, on the
grounds of dishonesty, grave misconduct, gross neglect of duty,
and conduct prejudicial to the best interest of the service.
7.! FUCC alleged that Valdez & Adea tried to extort money from them,
but because of FUCC's refusal, Valdez & Adea refused to act on the
 2nd Progress Billing & to officially document various variation orders
despite instructions by their (Valdez) superiors.
8.! FUCC also alleged that Valdez & Adea consistently arrived late at
the project side; used for personal purposes the service vehicles
leased to it by the NHA; and that they used the project site as their
private gun firing range.
9.! In response, Valdez & Adea filed a Joint-Counter Affidavit, alleging
that the complaint was instituted to coerce them into recommending
the full payment of the 2nd Progress billing (worth 50m), and to force
them to help the NHA and FUCC in covering up the investigations
on the project (see #3).
10.! Valdez & Adea likewise alleged that the Project's OIC (Raner) &
NHA's General Manager (Leynes) pressured them to pass off the
collapse of road as due to natural causes; and to justify payment on
the works done outside of the specifications.
11.! 8 AUG 1999: A preliminary conference was held and respondents
manifested that they were foregoing the conduct of a formal hearing
& were submitting the case for resolution on the basis of the
available evidence on record. 30 AUG 1999: Ombudsman limited
the issues of the case & ordered the parties to submit their respective
memoranda.
12.! 13 JAN 2000: The Ombudsman absolved Valdez & Adea of
negligence in acting on FUCC's 2nd Billing, but found them liable
for extortion and using the vehicles leased to NHA for personal
use. Valdez & Adea were dismissed from service.
13.! Valdez & Adea wrote a letter to NHA informing them of their intent
to file an MR to the OMB, and that pending the finality of the case,
they had the right to remain in office. The letter reached the NHA on
15 Feb 2000, and the next day Valdez & Adea received a Memo
dated 14 Feb 2000 which effectively terminated them from
employment.
14.! Valdez & Adea filed in the RTC QC a complaint against NHA, Gen.
Manager Leynes, and NHA HR Dep't Manager Seraspe, for
inkunction with application and prayer for the issuance of
preliminary prohibitory injunction and/or a TRO.
15.! TRO & preliminary prohibitory injunction was issued. NHA filed a
petition in the CA against the RTC judge & respondents, for
certiorari and prohibition with prayer for the issuance of a writ of
preliminary injunction and TRO.
16.! Valdez & Adea filed an MR with the Ombudsman, which was
denied. They petitioned the case to the CA.
17.! The CA issued a TRO, enjoining the Ombudsman and the NHA from
implementing the Ombudsman decision of 13 Jan 2000 (see # 8).
18.! 28 FEB 2002: CA REVERSED the Ombudsmand's decision,
finding that the FUCC's administrative complaint lacked
substantial evidence. The administrative cases were dismissed.
19.! FUCC's MR was DENIED.
20.! Because the administrative cases were dismissed, the CA also
dismissed the NHA petition (see #9, a) for being moot and academic.
21.! FUCC appealed the CA decision (see #11), while NHA appealed the
CA decision which dismissed their petition (see #11, a; #9, a). The
Supreme Court consolidated the two cases in a Resolution dated 16
JUL 2003.
ISSUE/s:
1.! Whether or not FUCC had substantial evidence for the petitions to
prosper against respondents Valdez & Adea? – NO. There was no
substantial evidence to warrant the dismissal of Valdez & Adea. The
petitions cannot prosper.
RULING: IN SUM, FUCC having failed to support its charges against
respondents with substantial evidence, the Court of Appeals did not err in
reversing the Ombudsman decision and accordingly dismissing the
administrative complaint against respondents to thus render NHA's petition
in G.R. No. 157505 moot and academic. WHEREFORE, the petitions are
DENIED.
RATIO:
1.! In administrative proceedings, the complainant has the burden of
proving with substantial evidence the allegations in the complaint.
While rules of evidence prevailing in courts of law and equity shall
not be controlling, it does not mean that orders in administrative
proceedings can be justified without basis in evidence having
rational probative force.
2.! Ombudsman found Valdez & Adea liable for extortion based only on
the affidavits of FUCC's witnesses, holding that cases of extortion
depend on the credibility of the complainant/s' testimony, because
only the participants can testify to their occurrences.
a.! But the records show that Valdez recommended that FUCC
be paid 16m only because he found that FUCC failed to lay
subbase (and used CBTC instead) in accordance with the
specifics of the project.
b.! FUCC itself admitted not having laid subbase, even when it
charged NHA for 50m. FUCC claims that NHA approved
 the use of CBTC, although there is no evidence other than its
own letters to NHA, stating its intention to use CTBC.
3.! As to the charge that Valdez & Adea used NHA vehicles for
personal purposes, it was unsupported by substantial evidence.
Though Valdez' signature appears on the entries of the logbooks of
the trips made by these vehicles, it does not necessarily mean he or
Adea took the trips; this could have been a mere attestation to the
authenticity of the trips. FUCC was also unable to refute the claim.