Case Name EURO-MED LAB V PROVINCE OF BATANGAS

Topic Doctrine of Primary Jurisdiction

Case No. | GR NO. 148106 | JULY 17, 2006
Date

Ponente CORONA, J.

Doctrine
https://chanrobles.com/cralaw/2006julydecisions.php?id=862
Link

RELEVANT FACTS:

This case concerns a monetary dispute involving the Province of Batangas (referred to
hereafter as the "Province") and Euro-Med Lab (referred to hereafter as the "Lab"). The
dispute revolves around an alleged outstanding amount of P487,662.80, which the
Province is said to owe to the Lab. This debt stems from the acquisition of medical
products, a transaction that is substantiated by invoices duly endorsed and signed by
representatives authorized by the Province.

The Province has initiated legal proceedings by submitting a motion aimed at the
dismissal of the Lab's complaint. The foundation for this motion lies in the contention that
the primary authority for adjudicating claims related to the contested sum of money lies
with the Commission on Audit (COA). The Province argues that the Lab's claim is
subject to the provisions outlined in the Local Government Code (LGC) and the
regulations promulgated by the COA governing supply and property management within
Local Government Units (LGUs). As a result, the Province asserts that the resolution of
this case necessitates an examination of whether the Lab's claim conforms to these
aforementioned LGC provisions and COA regulations. They contend that this inquiry falls
exclusively within the purview of the COA.

RTC dismissed Lab’s complaint without prejudice to the filing of the proper money claim
with the COA. Motion for Reconsideration was also denied. Hence, this petition.

ISSUE: Whether it is the COA or the RTC which has primary jurisdiction to pass
upon Lab's money claim.
RULING:

COA has the primary jurisdiction.

The doctrine of primary jurisdiction holds that if a case is such that its determination
requires the expertise, specialized training and knowledge of an administrative body,
relief must first be obtained in an administrative proceeding before resort to the
courts is had even if the matter may well be within their proper jurisdiction.

It applies where a claim is originally cognizable in the courts and comes into play
whenever enforcement of the claim requires the resolution of issues which, under a
regulatory scheme, have been placed within the special competence of an
administrative agency.

In such a case, the court in which the claim is sought to be enforced may suspend
the judicial process pending referral of such issues to the administrative body for its
view or, if the parties would not be unfairly disadvantaged, dismiss the case without
prejudice.

Here, although Lab's collection suit was w/in the jurisdiction of the RTC, the
circumstances surrounding the claim brought it clearly within the ambit of the COA's
jurisdiction.

First, Lab was seeking the enforcement of a claim against an LGU. This brought the
case within the COA's domain to pass upon money claims against the gov’t or any
subdivision thereof under Sec. 26 of the Government Auditing Code of the PH:

The authority and powers of the COA shall extend to and comprehend all
matters relating to . . . the examination, audit, and settlement of all debts and
claims of any sort due from or owing to the Government or any of its
subdivisions, agencies, and instrumentalities.

However, the scope of the COA's authority is limited only to liquidated claims, or
those determined or readily determinable from vouchers, invoices, and such other
papers within reach of accounting officers. Lab's claim was for a fixed amount which
was readily determinable from the receipts, invoices and other documents. Thus, the
claim was well within the COA's jurisdiction.

Second, Lab's money claim was founded on a series of purchases for the medical
supplies of the Province's public hospitals. Both parties agreed that these
transactions were governed by the LGC provisions and their implementing rules and
regulations promulgated by the COA.

Lab's claim therefore involved compliance with applicable auditing laws and rules on
procurement. Such matters are not within the usual area of knowledge, experience,
and expertise of most judges but within the special competence of COA auditors and
accountants. Thus, it was but proper, out of fidelity to the doctrine of primary
jurisdiction, for the RTC to dismiss Lab's complaint.

Lab argues, however, that Province could no longer question the RTC's jurisdiction
over the matter after it had filed its answer and participated in the subsequent
 proceedings. To this, we need only state that the court may raise the issue of primary
jurisdiction sua sponte and its invocation cannot be waived by the failure of the
parties to argue it as the doctrine exists for the proper distribution of power between
judicial and administrative bodies and not for the convenience of the parties.

RULING

WHEREFORE, the petition is hereby DENIED. The March 7, and May 16, 2001 orders
of the Regional Trial Court of Batangas City are hereby AFFIRMED.