ACT NO. 3688 - AN ACT FOR THE
PROTECTION OF PERSONS FURNISHING MATERIAL AND LABOR FOR THE
CONSTRUCTION OF PUBLIC WORKS |
Section 1. Any person, partnership or corporation entering
into a formal contract with the Government of the Philippine Islands
for the construction of any public building, or the prosecution and
completion of any public work, or for repairs upon any public building
or public work, shall be required, before commencing such work, to
execute the usual penal bond, with good and sufficient sureties, with
the additional obligation that such contractor or his or its
sub-contractors shall promptly make payments to all persons supplying
him or them with labor and materials in the prosecution of the work
provided for in such contract; and any person, company or corporation
who has furnished labor or materials used in the construction or repair
of any public building or public work, and payment for which has not
been made, shall have the right to intervene and be made a party to any
action instituted by the Government of the Philippine Islands on the
bond of the contractor, and to have their rights and claims adjudicated
in such action and judgment rendered thereon, subject, however, to the
priority of the claim and judgment of the Government of the Philippine
Islands. If the full amount of the liability of the surety on said bond
is insufficient to pay the full amount of said claims and demands,
then, after paying the full amount due the Government, the remainder
shall be distributed pro rata among said intervener. If no suit should
be brought by the Government of the Philippine Islands within six
months from the completion and final settlement of said contract, or if
the Government expressly waives its right to institute action on the
penal bond, then the person or persons supplying the contractor with
labor and materials shall, upon application therefor, and furnishing
affidavit to the department under the direction of which said work has
been prosecuted, that labor or materials for the prosecution of such
work have been supplied by him or them, and payment for which has not
been made, be furnished with a certified copy of said contract and
bond, upon which he or they shall have a right of action, and shall be,
and are hereby, authorized to bring suit in the name of the Government
of the Philippine Islands in the Court of First Instance in the
district in which said contract was to be performed and executed, and
not elsewhere, for his or their use and benefit, against said
contractor and his sureties, and to prosecute the same to final
judgment and execution: Provided, That where suit is instituted by any
of such creditors on the bond of the contractor it shall not be
commenced until after the complete performance of said contract and
final settlement thereof, and shall be commenced within one year after
the performance and final settlement of said contract, and not later:
Provided, further, That where suit is so instituted by a creditor or by
creditors, only one action shall be brought, and any creditor may file
his claim in such action and be made party thereto within one year from
the completion of the work under said contract and final settlement
thereof, and not later. If the recovery on the bond should be
inadequate to pay the amounts found due to all of said creditors,
judgment shall be given to each creditor pro rata of the amount of the
recovery. The surety on said bond may pay into court, for distribution
among said claimants and creditors, the full amount of the sureties'
liability, to wit, the penalty named in the bond, less any amount which
said surety may have had to pay to the Government by reason of the
execution of said bond, and upon so doing the surety will be relieved
from further liability: And provided, further, That in all suits
instituted under the provisions of this section personal notice of the
pendency of such suits, informing them of their right to intervene as
the court may order, shall be given to all known creditors, and in
addition thereto notice by publication 1 in some newspaper of general
circulation, published in the province or town where the contract is
being performed, for at least three successive weeks, the last
publication to be at least three months before the time limited
therefor. Sec. 2. All acts or parts of acts inconsistent with the provisions of this Act are hereby repealed. Sec. 3. This Act shall take effect upon its approval. Approved: November 7, 1930. Footnotes 1. See PD 1079 regulating the publication of judicial notices, etc. |