G.R. No.

195640               December 4, 2012

SUGAR REGULATORY ADMINISTRATION, represented by its Administrator, Petitioner, vs. ENCARNACION B. TORMON,
EDGARDO B. ALISAJE, LOURDES M. DOBLE, TERESITA Q. LIM, EDMUNDO R. JORNADAL, JIMMY C. VILLANUEVA ,
DEANNA M. JANCE, HENRY G. DOBLE, REYNALDO D. LUZANA, MEDELYN P. TOQUILLO, SEVERINO A. ORLIDO,
RHODERICK V. ALIPOON, JONATHAN CORDERO, DANILO B. BISCOCHO, BELLO C. LUCASAN, LUBERT V. TIVE, and the
COMMISSION ON AUDIT, Respondents. PERALTA, J.:
FACTS: Private respondents were former employees of Philippine Sugar Institute (PHILSUGIN) and the Sugar Quota Administration
(SQA) that were abolished when Philippine Sugar Commission (PHILSUCOM) was created. Private respondents were separated from
the service. Thus, they were paid their retirement/gratuity and incentive benefits. They were, however, reinstated by PHILSUCOM
subject to the condition that the former would refund in full the retirement/gratuity and incentive benefits they received from
PHILSUGIN or SQA from which the private respondents complied with. Subsequently, when the Sugar Regulatory Administration
(petitioner SRA) was created, it replaced PHILSUCOM. SRA retained some of the latter’s personnel which included the private
respondents. SRA had its Rationalization Program for the purpose of strengthening its vital services and refocusing its resources to
priority programs and activities, and reducing its personnel with the payment of retirement gratuity and incentives for those who
opted to retire from the service. Among those separated from the service were private respondents. Under the SRA Rationalization
Program, petitioner computed its employees' incentives and terminal leave benefits based on their creditable years of service
contained in their respective service records on file with petitioner.
However, petitioner found out that there was no showing that private respondents had refunded their gratuity benefits
received from PHILSUGIN or SQA. Hence, petitioner considered private respondents' length of service as having been interrupted
which commenced only at the time they were re-employed by PHILSUCOM. Petitioner then recomputed private respondents'
retirement and incentive benefits and paid only the 75% equivalent of the originally computed benefits and withheld the remaining
25% in view of the latter's inability to prove the refund. On the other hand, private respondents claim that they had already
refunded these benefits through salary deduction, therefore, they are entitled to the payment of the amounts withheld by petitioner.
As the private respondents failed to submit proofs of refund of gratuity received from PHILSUGIN or SQA, their request for re-
computation was denied. Private respondents wrote a letter to the COA, asking the latter to order petitioner to pay the balance
representing the 25% of their retirement and incentive benefits withheld by petitioner. They claimed that they had already refunded
the full amount of the incentive benefits through salary deductions and since petitioner could no longer find the PHILSUCOM payrolls
reflecting those deductions, private respondents submitted the affidavits of Messrs. Hilario T. Cordova and Nicolas L. Meneses
Jr., petitioner's Chief, Administrative Division, and Manager, Administrative and Finance Department, respectively, attesting to the
fact of refund. Petitioner filed its Answer thereto contending among others that since private respondents alleged payment, they
were duty-bound to present evidence substantiating the said refund; that no records of payments existed to clearly establish their
claim, thus, their resort to secondary evidence which were the sworn affidavits of petitioner's former officials were insufficient to
prove the fact of the alleged payment. The COA ruled that –
the affidavits presented were insufficient proofs that they have refunded to PHILSUCOM the gratuity/incentive benefits they
received from PHILSUGIN/SQA. Evidence other than the affidavits must be presented to substantially prove their claims.
xxx In so ruling, the COA found that since private respondents alleged payment, they had the burden of proving the same
by clear and positive evidence; that the affidavits of Messrs. Cordova and Meneses, Jr. stating that private respondents had
refunded to PHILSUCOM the benefits they received from PHILSUGIN/SQA were not the best evidence of such refunds; that
an affidavit was made without notice to the adverse party or opportunity to cross examine; and that the contents of these
affidavits were too general and did not state private respondents’ respective final payments.
Upon MR, private respondents obtained a favourable decision. The COA ruled that the affidavits submitted were not
secondary evidence within the context of Section 5, Rule 130 of the Rules of Court, hence, admissible in evidence, since technical
rules of procedure and evidence are not strictly applied in administrative proceedings. The COA found in the records certain
significant circumstances which, when taken together with the affidavits, established that indeed private respondents had refunded
the incentives in question. Since private respondents had discharged their burden of proof, it was incumbent on petitioner to
discharge the burden of evidence that respondents had not paid the said incentives; that it was the PHILSUCOM, then petitioner,
being the successor of PHILSUGIN and SQA, that had been tasked with the official custody of all the records and books of their
predecessors, as mandated under Section 10 of Presidential Decree No. 388; that if petitioner's Accounting Division cannot issue a
certification because it has no records, it is never an excuse to shift the burden to the employees. Hence, the petition. Petitioner
claimed that the affiants attested on a matter which happened 30 years ago; thus, how could they recall that each of the 16
employees had actually refunded the gratuity/incentives way back in 1977; that each of the private respondents held different
positions with salaries different from each other and the dates when they respectively re-assumed service in the government differed
from each other; that it may not even be entirely correct that all 16 respondents refunded the gratuity incentives in question by
salary deduction.
ISSUE: WON the subject affidavits were admissible in evidence.
RULING: The Court ruled in the affirmative.
One who pleads payment has the burden of proving it. Even where the creditor alleges non-payment, the general rule
is that the onus rests on the debtor to prove payment, rather than on the creditor to prove non-payment. The debtor has the burden
of showing with legal certainty that the obligation has been discharged by payment. Well settled also is the rule that a receipt of
payment is the best evidence of the fact of payment. In Monfort v. Aguinaldo, the receipts of payment, although not
exclusive, were deemed to be the best evidence. Private respondents could not present any receipt since they alleged that their
payments were made through salary deductions and the payrolls which supposedly contained such deductions were in petitioner's
possession which had not been produced. In order to prove their allegations of refund, private respondents submitted the affidavits
of Messrs. Cordova and Meneses, Jr.
Messrs. Cordova, being petitioner's head of the Personnel Department, and Meneses, Jr., as petitioner's Chief of Budget
Division, and later Manager of the Administrative and Finance Department, were in the best positions to attest to the fact of private
respondents' refund through salary deductions of the amounts of retirement and incentive benefits previously received, especially
since these officials were in those departments since PHILSUCOM took over in 1977 and later with petitioner until their retirement in
2003. There was nothing on record to show that Messrs. Cordova and Meneses, Jr. were actuated with any ill motive in the execution
of their affidavits attesting to the fact of refund. The general rule is that administrative agencies are not bound by the
technical rules of evidence. It can accept documents which cannot be admitted in a judicial proceeding where the Rules of Court
are strictly observed. It can choose to give weight or disregard such evidence, depending on its trustworthiness. Here, we find no
grave abuse of discretion committed by the COA when it admitted the affidavits of Messrs. Cordova and Meneses, Jr. and gave
weight to them in the light of the other circumstances established by the records which will be shown later in the decision.
Significantly, Messrs. Cordova and Meneses, Jr. were petitioner's former officials who held key positions in the two
divisions, namely, Personnel and Accounting Divisions xxx. Moreover, as we said, while the COA admitted the affidavits, it did not
rely solely on those affidavits to conclude that refunds were already made by private respondents. The matter of refund was proven
by several circumstances which the COA found extant in the records of the case. We find apropos to quote the COA findings in this
wise:
First, movants were reemployed by PHILSUCOM with the condition that they must return the benefits they had already
received. In his 16 March 1978 letter, Mr. Eduardo F. Gamboa, directed Ms. Tormon to refund the amount and to inform the
Personnel Department when the refund was made. He warned Ms. Tormon to make the refund or they will be constrained to
recommend corrective measures. The fact was that claimants were reinstated. That management did not take any
corrective measures to compel the refund – except perhaps, the enforced salary deduction which claimants said was the
mode of refund undertaken - is a point in favor of claimants. It would be unbelievable that in all these years, from 1977 to
2007, the SRA management, indubitably having the higher authority, just slept on its right to enforce the refund and did
nothing about it. The natural and expected action that SRA ought to have taken was to enforce the refund through salary
deduction, not through voluntary direct payment since the latter option does not carry with it the mandatory character of an
automatic salary deduction.
xxx Fourth, under the SRA Rationalization program, the affected employees' incentive and terminal leave benefits were
computed based on their creditable years of services as contained in their respective service records with the agency as
validated by the GSIS. Accordingly, SRA computed movants' incentive and terminal leave benefits as of December 31, 2006
which was approved by the Department of Budget and Management (DBM) Secretary Rolando Andaya. This only showed
that even the SRA was convinced that movants had no more financial accountability with the SRA at the time.
Fifth, then SRA Administrator James C. Ledesma informed movants that not one of the records of the payments they
claimed was available at the office; thus, the SRA could not be definite as to the actual payments made by them and the
equivalent periods corresponding thereto, Also, Ms. Amelita A. Papasin, Accountant IV, Accounting Unit, SRA, Bacolod,
stated that they could not find any record showing payments made as claimed by Ms. Tormon, et al., to refund the
severance gratuities paid to them during their termination on September 30, 1977. Indeed, the SRA could not comply with
the request of Mr. Antonio M. Malit, Audit Team leader (ATL), SRA, to produce copies of payroll or index of payments, or
any accounting records covering the 32-year period which would have shown whether movants paid or did not pay the
required refund. These payrolls and other records would have conclusively established the fact of payment or non-payment,
But then all the SRA could say was there is no record of such payment. Absence of record is different from saying
there was no payment.
Factual findings of administrative bodies charged with their specific field of expertise, are afforded great weight by the
courts, and in the absence of substantial showing that such findings were made from an erroneous estimation of the evidence
presented, they are conclusive, and in the interest of stability of the governmental structure, should not be disturbed. Petitioner's
claim that the COA made its own assumptions which were not even based on the allegations made by private respondents in any of
their pleadings is devoid of merit. In their Reply to petitioner's Supplemental Comment/Opposition to private respondents' motion for
reconsideration, private respondents had alleged some of these above- mentioned circumstances to support their claim that refunds
had already been made. We also find that the records of the case support the above-quoted circumstances enumerated by the COA.
Considering that private respondents had introduced evidence that they had refunded their retirement and incentive benefits through
salary deduction, the burden of going forward with the evidence- as distinct from the general burden of proof- shifts to
the petitioner, who is then under a duty of producing some evidence to show non-payment.  However, the payroll to
establish whether or not deductions had been made from the salary of private respondents were in petitioner's custody, but
petitioner failed to present the same due to the considerable lapse of time. All told, we find no grave abuse of discretion amounting
to lack or excess of jurisdiction committed by the COA in rendering its assailed decision. There is grave abuse of discretion when
there is an evasion of a positive duty or a virtual refusal to perform a duty enjoined by law or to act in contemplation of law as when
the judgment rendered is not based on law and evidence but on caprice, whim and despotism, which is wanting in this case.

The petition was dismissed.