EN BANC
G.R. No. 231015, January 26, 2021
RG CABRERA CORPORATION, INC., Petitioner, v. DEPARTMENT OF PUBLIC WORKS AND HIGHWAYS AND COMMISSION ON AUDIT, Respondents.
G.R. No. 240618
RG CABRERA CORPORATION, INC., A.K.A. RG CABRERA CONSTRUCTION, INC. AND RG CABRERA SR TRUCKING CORPORATION, PETITIONER VS. DEPARTMENT OF PUBLIC WORKS AND HIGHWAYS AND COMMISSION ON AUDIT, Respondents.
G.R. No. 249212
RG CABRERA CORPORATION INC., A.K.A. RG CABRERA CONSTRUCTION AND SUPPLIES AND RG CABRERA SR TRUCKING CORPORATION Petitioner, v. DEPARTMENT OF PUBLIC WORKS AND HIGHWAYS AND COMMISSION ON AUDIT, Respondents.
D E C I S I O N
DELOS SANTOS, J.:
Before this Court are consolidated Petitions1 for Certiorari under Rule 64 in relation to Rule 65 of the Rules of Court docketed as G.R. Nos. 231015,2 240618,3 and 249212.4
The first Petition, docketed as G.R. No. 231015, is filed by RG Cabrera Corporation, Inc. (RGCCI), against the Department of Public Works and Highways (DPWH) and Commission on Audit (COA; collectively, respondents) seeking the reversal of Decision No. 2015-4115 dated December 28, 2015 and Resolution No. 2017-0106 dated February 27, 2017 of the COA in COA CP Case No. 2013-050.
The second Petition, G.R. No. 240618, filed by RGCCI against the DPWH and the COA, seeks the reversal of Decision No. 2017-0947 dated April 26, 2017 and Resolution No. 2018-0468 dated March 8, 2018 of the COA in COA CP Case No. 2012-116.
Lastly, in G.R. No. 249212, filed by RGCCI against the COA and the DPWH, RGCCI seeks to overturn Decision No. 2016-4809 dated December 29, 2016 and Resolution No. 2019-37810 dated August 22, 2019 of the COA in COA CP Case No. 2013-049.
WHEREFORE, premises considered, the petition for money claim filed by RG Cabrera Corporation Incorporated, represented by Mr. Ruben G. Cabrera, against the Department of Public Works and Highways Pampanga 2nd District Engineering Office for payment of rental fees of the equipment used in the maintenance of the detour road at Mancatian, Porac, Pampanga, in the amount of [P]313,542.50 plus interest, is hereby DENIED for lack of merit.21RGCCI moved for reconsideration but the same was denied by the COA in its Resolution No. 2017-01022 dated February 27, 2017.
WHEREFORE, premises considered, the Petition for Money Claim of RG Cabrera Corporation, Inc., represented by Ruben V. Cabrera, Jr., against Department of Public Works and Highways (DPWH), Port Area, Manila and DPWH 2nd Pampanga Engineering District, San Antonio, Guagua, Pampanga, for and payment of the outstanding balance for the bulldozing of Porac River, Ascomo Pulungmasle, Guagua, Pampanga, from Sta. 0+580 to Sta. 1+500, amounting to [P]1,574,580.50, plus legal interest, from the date of last demand until full payment isRGCCI moved for reconsideration but the same was denied by the COA in its Resolution No. 2018-04628 dated March 8, 2018.
hereby DENIED for lack of merit.27
WHEREFORE, premises considered, the Petition for Money Claim of RG Cabrera Corporation, Inc., represented by Ruben V. Cabrera, Jr., against the Department of Public Works and Highways (DPWH), Port Area, Manila, and DPWH 2nd Pampanga Engineering District, for payment of the outstanding balance relative to the Excavation of Channel, Pushing and Diking of Gumain River, Floridablanca, Pampanga, from Sta. 1+000 to Sta. 1+750, amounting to [P]1,853,836.20, plus legal interest from the date of last demand until full payment, is hereby DENIED for lack of merit.31RGCCI filed a motion for reconsideration dated December 29, 2016, but was denied in Resolution32 No. 2019-378.
In its petitions, RGCCI contends that the requirements of certification of availability of funds, prior appropriations before entering into a contract, and authority of officers to enter into contracts are mere technical requirements, non-compliance of which will not bar recovery on the basis of quantum meruit by the contractor because the contract is not void but only voidable. Moreover, denial of its claims will result in unjust enrichment in favor of the government after RGCCI faithfully performed its undertakings under the contract.39
1.) WHETHER RGCCI HAS LOCUS STANDI TO FILE THE INSTANT PETITIONS; 2.) WHETHER THE COA ERRED WHEN IT DENIED RGCCI'S MONEY CLAIM ON THE BASIS OF THE CONTRACT BEING VOID FOR BEING ENTERED INTO WITHOUT THE NECESSARY APPROPRIATION AND INCOMPLETE DOCUMENTATION; and 3.) WHETHER RGCCI IS ENTITLED TO PAYMENT ON THE BASIS OF QUANTUM MERUIT.
SEC. 2. Parties in interest. - A real party in interest is the party who stands to be benefited or injured by the judgment in the suit, or the party entitled to the avails of the suit. Unless otherwise provided by law or these Rules, every action must be prosecuted or defended in the name of the real party in interest.The Court in Goco v. Court of Appeals45 discussed:cralawred
This provision has two requirements: 1) to institute an action, the plaintiff must be the real party in interest; and 2) the action must be prosecuted in the name of the real party in interest. Interest within the meaning of the Rules of Court means material interest or an interest in issue to be affected by the decree or judgment of the case, as distinguished from mere curiosity about the question involved. One having no material interest cannot invoke the jurisdiction of the court as the plaintiff in an action. When the plaintiff is not the real party in interest, the case is dismissible on the ground of lack of cause of action.46In the instant cases, it is clear that RGCCI, RG Cabrera Construction and Supplies, and RG Cabrera, Sr. Trucking Corporation are one and the same entity and therefore, can be considered as a real party-in-interest who stands to be benefited or injured by the judgment in the suit. First of all, the names of the corporations stated contain the name of the deceased family patriarch, Ruben G. Cabrera. Secondly, all of the corporations use the Cabrera ancestral house at L&M Subdivision, Guagua, Pampanga as their address. Lastly, the corporations are composed of the same family members. In sum, it is immaterial as to under which name the DPWH directs its payment because ultimately, the payment will end in the hands of the performer of the services under the contract, thus, extinguishing the obligation.
SECTION 86. Certificate Showing Appropriation to Meet Contract. - Except in the case of a contract for personal service, for supplies for current consumption or to be carried in stock not exceeding the estimated consumption for three months, or banking transactions of government-owned or controlled banks, no contract involving the expenditure of public funds by any government agency shall be entered into or authorized unless the proper accounting official of the agency concerned shall have certified to the officer entering into the obligation that funds have been duly appropriated for the purpose and that the amount necessary to cover the proposed contract for the current fiscal year is available for expenditure on account thereof, subject to verification by the auditor concerned. The certificate signed by the proper accounting official and the auditor who verified it, shall be attached to and become an integral part of the proposed contract, and the sum so certified shall not thereafter be available for expenditure for any other purpose until the obligation of the government agency concerned under the contract is fully extinguished.Indeed, the existence of the appropriation and certification as to the availability of funds together with the written contract is vital and necessary for the execution of government contracts. Nevertheless, the mere absence of these documents would not necessarily rule out the possibility of the contractor receiving payment for the services rendered for the government.48
SECTION 87. Void Contract and Liability of Officer. - Any contract entered into contrary to the requirements of the two immediately preceding sections shall be void, and the officer or officers entering into the contract shall be liable to the government or other contracting party for any consequent damage to the san1e extent as if the transaction had been wholly between private parties.
Interestingly, this case is not of first impression. In Eslao vs. Commission on Audit, this Court likewise allowed recovery by the contractor on the basis of quantum meruit, following our pronouncement in Royal Trust Construction v. Commission on Audit, thus:cralawredIn Royal Trust Construction v. Commission on Audit,52 this Court, applying the principle of quantum meruit in allowing recovery by the contractor, ruled that:cralawred"In Royal Trust Construction vs. COA, a case involving the widening and deepening of the Betis River in Pampanga at the urgent request of the local officials and with the knowledge and consent of the Ministry of Public Works, even without a written contract and the covering appropriation, the project was undertaken to prevent the overflowing of the neighboring areas and to irrigate the adjacent farmlands. The contractor sought compensation for the completed portion in the sum of over P1 million. While the payment was favorably recommended by the Ministry of Public Works, it was denied by the respondent COA on the ground of violation of mandatory legal provisions as the existence of corresponding appropriations covering the contract cost. Under COA Res. No. 36-58 dated November 15, 1986, its existing policy is to allow recovery from covering contracts on the basis of quantum meruit if there is delay in the accomplishment of the required certificate of availability of funds to support a contract."51 (Italics in the original, citations omitted)
The work done by it (the contractor) was impliedly authorized and later expressly acknowledged by the Ministry of Public Works, which has twice recommended favorable action on the petitioner's request for payment. Despite the admitted absence of a specific covering appropriation as required under COA Resolution No. 36-58, the petitioner may nevertheless be compensated for the services rendered by it, concededly for the public benefit, from the general fund allotted by law to the Betis River project. Substantial compliance with the said resolution, in view of the circumstances of this case, should suffice. The Court also feels that the remedy suggested by the respondent, to wit, the filing of a complaint in court for recovery of the compensation claimed, would entail additional expense, inconvenience and delay which in fairness should be imposed on the petitioner.Furthermore, in Melchor v. Commission on Audit,54 the Court nevertheless upheld the payment to the contractor of the cost of the construction of a public school building even if the contract lacked the signature of the chief accountant as witness to the contract. The Court reasoned that it would be unjust for the government not to shoulder the expenditure after it had already received and accepted benefits from the utilization of the project.
Accordingly, in the interest of substantial justice and equity, the respondent Commission on Audit is DIRECTED to determine on a quantum meruit basis the total compensation due to the petitioner for the services rendered by it in the channel improvement of the Betis River in Pampanga and to allow the payment thereof immediately upon completion of the said determination.53 (Emphases ours)
Although this Court agrees with respondent's postulation that the "implied contracts", which covered the additional constructions, are void, in view of violation of applicable laws, auditing rules and lack of legal requirements, we nonetheless find the instant petition laden with merit and uphold, in the interest of substantial justice, petitioners-contractors' right to be compensated for the "additional constructions" on the public works housing project, applying the principle of quantum meruit.56 (Emphasis ours, italics in the original)Intriguingly, the case of Quiwa falls squarely in the cases at bar. The case of Quiwa also involved rehabilitation efforts on the part of the DPWH after certain areas were inundated by lahar after the Mount Pinatubo eruption. In Quiwa, the Court allowed the contractor to recover payments for channeling, desilting, and diking works based on the construction agreement even if the agreement was void for not having been approved by the proper authority and for not complying with the requirement of certification of availability of funds. It must be noted that like in Quiwa, the cases at bar involves a money claim of a contractor who performed services and provided equipment in the aftermath of the Mount Pinatubo eruption where its services redounded to the benefit of the government.
This disposition is without prejudice to any criminal and administrative action against erring Department of Public Works and Highways officials for violation of the law, if any.
- To approve the subject claims of petitioner RG Cabrera Corporation, Inc. in the total amount of P313,542.50 plus interest at the legal rate for G.R. No. 231015;
- To pay petitioner RG Cabrera Corporation, Inc. its claim in the amount of P1,574,580.50 plus interest until fully paid for G.R. No. 240618; and
- To pay petitioner RG Cabrera Corporation, Inc. its claim in the amount of P1,853,836.20 plus interest from July 22, 1992 until fully paid for G.R. No. 249212.
| Very truly yours, |
EDGAR O.
ARICHETA | |
Clerk of Court | |
By: | |
(SGD) ANNA-LI R. PAPA-GOMBIO | |
Deputy Clerk of Court En Banc |
Endnotes:
1 This Court consolidated the petitions in our Resolution dated January 15, 2020; see rollo (G.R. No. 240618), p. 167.
2 Petition for Review on Certiorari filed by RG Cabrera Corporation, Inc., rollo (G.R. No. 231015), pp. 3-16.
3 Petition for Review on Certiorari filed by RG Cabrera Corporation, Inc. aka. RG Cabrera Construction, Inc. & RG Cabrera Sr. Trucking Corporation, rollo (G.R. No 240618), pp. 3-22.
4 Petition for Review on Certiorari filed by RG Cabrera Corporation, Inc. aka. RG Cabrera Construction and Supplies & RG Cabrera Sr. Trucking Corporation, rollo (G.R. No. 249212), pp. 3-20.
5Rollo (G.R. No. 231015), pp. 20-25.
6 Id. at 26.
7Rollo (G.R. No. 240618), pp. 24-29.
8 Id. at 30.
9Rollo (G.R. No. 249212), pp. 22-28.
10 Id. at 29-34.
11Rollo (G.R. No. 240618), p. 153.
12 Id.
13 Id. at 154.
14 Id. at 6-7.
15Rollo (G.R. No. 249212), pp. 6-7.
16Rollo (G.R. No. 240618), p. 154.
17 Id. at 154-155.
18Rollo (G.R. No. 231015), pp. 54-63; (G.R. No. 240618), pp. 105-106; (G.R. No. 249212), pp. 67-76.
19 Government Auditing Code of the Philippines.
20Rollo (G.R. No. 231015), pp. 20-25.
21 Id. at 24.
22 Id. at 26.
23Rollo (G.R. No. 240618), pp. 24-29.
24 Id. at 26-27.
25 Id. at 27.
26 Id. at 28.
27 Id.
28 Id. at 90.
29Rollo (G.R. No. 249212), pp. 22-28.
30 Id. at 25-26.
31 Id. at 27.
32 Id. at 29-34.
33Rollo (G.R. No. 231015), pp. 109-117.
34Rollo (G.R. No. 240618), pp. 136-147.
35 Id. at 158-163.
36 Id. at 167-168.
37 Id. at 176-188.
38Rollo (G.R. No. 249212), pp. 162-167.
39Rollo (G.R. No. 231015), pp. 14-15; (G.R. No. 240618), pp. 10-21; (G.R. No. 249212), pp. 11-16.
40Rollo (G.R. No. 249212), pp. 10-11.
41Rollo (G.R. No. 240618), pp. 139-141; (G.R. No. 249212), pp. 111-112.
42Rollo (G.R. No. 231015), pp. 112-115; (G.R. No. 240618), pp. 14l-144; (G.R. No. 249212), pp. 112-116.
43 Id.
44Planters Products, Inc. v. Fertiphil Corp., 572 Phil. 270, 287 (2008).
45 631 Phil. 394 (2010).
46 Id. at 403.
47Santos v. Court of Appeals, 275 Phil. 894, 898 (1991).
48 See Geronimo v. Commission on Audit, G.R. No. 224163, December 4, 2018.
49 273 Phil. 97 (1991).
50 407 Phil. 58 (2001).
51 Id. at 61-62.
52 G.R. No. 84202, November 23, 1988 (Resolution of the Supreme Court En Banc).
53 Id.
54 277 Phil. 801 (1991).
55 675 Phil. 9 (2011).
56 Id. at 25.
57Rollo (G.R. No. 231015), pp. 113-115; (G.R. No. 240618), pp. 144-145; (G.R. No. 249212), pp. 113-116.
58Marcopper Mining Corp. v. Bumolo, 401 Phil. 878, 883 (2000).
59Rollo (G.R. No. 231015), pp. 34-35.
60Rollo (G.R. No. 249212), p. 44.
61Rollo (G.R. No. 240618), p. 42.