Reyna v. Commission On Audit

PERALTA, J.:

Before this Court is a Petition for certiorari,1 under Rule 64 of the Rules of Court, seeking to set aside Resolution No. 2004-046,2 dated December 7, 2004, of the Commission on Audit (COA). The facts of the case are as follows: The Land Bank of the Philippines (Land Bank) was engaged in a cattle-financing program wherein loans were granted to various cooperatives. Pursuant thereto, Land Bank's Ipil, Zamboanga del Sur Branch (Ipil Branch) went into a massive information campaign offering the program to cooperatives.

Cooperatives who wish to avail of a loan under the program must fill up a Credit Facility Proposal (CFP) which will be reviewed by the Ipil Branch. As alleged by Emmanuel B. Bartocillo, Department Manager of the Ipil Branch, the CFP is a standard and prepared form provided by the Land Bank main office to be used in the loan application as mandated by the Field Operations Manual.3 One of the conditions stipulated in the CFP is that prior to the release of the loan, a Memorandum of Agreement (MOA) between the supplier of the cattle, Remad Livestock Corporation (REMAD), and the cooperative, shall have been signed providing the level of inventory of stocks to be delivered, specifications as to breed, condition of health, age, color, and weight. The MOA shall further provide for a buy-back agreement, technology, transfer, provisions for biologics requirement and technical visits and replacement of sterile, unproductive stocks.4 Allegedly contained in the contracts was a stipulation that the release of the loan shall be made sixty (60) days prior to the delivery of the stocks.5 The Ipil Branch approved the applications of four cooperatives.

R.T. Lim Rubber Marketing Cooperative (RT Lim RMC) and Buluan Agrarian Reform Beneficiaries MPC (BARBEMCO) were each granted two loans. Tungawan Paglaum Multi-Purpose Cooperative (Tungawan PFMPC) and Siay Farmers' Multi-Purpose Cooperative (SIFAMCO) were each granted one loan. Pursuant to the terms of the CFP, the cooperatives individually entered into a contract with REMAD, denominated as a "Cattle-Breeding and Buy-Back Marketing Agreement."6 In December 1993, the Ipil Branch granted six loans to the four cooperative borrowers in the following amounts: Date of Release Name of Borrower Amount of Loan Amount of Livestock Insurance Amount Paid to Cattle Supplier (REMAD) 12-10-93 RTLim RMC ₱ 795,305 ₱ 62,305 ₱ 733,000 12-10-93 BARBEMCO 482,825 37,825 445,000 12-16-93 Tungawan PFMPC 482,825 37,825 445,000 12-22-93 SIFAMCO 983,010 77,010 906,000 12-22-93 RTLim RMC 187,705 14,705 173,000 12-22-93 BARBEMCO 448,105 35,105 413,000 TOTAL