Case Digest: Vigilar vs. Altea

G.R. No. 180388: January 18, 2011

GREGORIO R. VIGILAR, SECRETARY OF THE DEPARTMENT OF PUBLIC WORKS AND HIGHWAYS (DPWH), DPWH UNDERSECRETARIES TEODORO E. ENCARNACION AND EDMUNDO E. ENCARNACION AND EDMUNDO V. MIR, DPWH ASSISTANT SECRETARY JOEL L. ALTEA, DPWH REGIONAL DIRECTOR VICENTE B. LOPEZ, DPWH DISTRICT ENGINEER ANGELITO M. TWAO, FELIX A. DESIERTO OF THE TECHNICAL WORKING GROUP VALIDATION AND AUDITING TEAM, AND LEONARDO ALVARO, ROMEO N. SUPAN, VICTORINO C. SANTOS OF THE DPWH PAMPANGA 2ND ENGINEERING DISTRICT,Petitioners vs. ARNULFO D. AQUINO,Respondent

SERENO, J.:


FACTS: Respondent was invited to bid for a dike project in Pampanga. Respondent eventually won the bid, and finished constructing the dike. However, petitioners, government officials of the DPWH, refused to pay petitioner the contract price. Petitioners refuse because the contract is void for violation of P.D. 1445, for absence of an appropriation. Respondent brought suit in the RTC, which petitioners sought to dismiss, raising the non-suability of the state, as well as non-exhaustion of administrative remedies. The lower court ruled for the validity of the contract and ordered payment for the project. Upon appeal, the Court of Appeals reversed the ruling of the lower court and declared the contract invalid. However, the CA ordered the Commission on Audit to determine the value of the services rendered by respondent, and compensate him based on quantum meruit.

ISSUES: Whether or not the case should have been dismissed for failure to exhaust administrative remedies. Whether or not the case should have been dismissed as it is a suit against the State, and the State may not be sued. Whether or not it was proper for the CA to order payment for respondent.

HELD: The petition is without merit.

Remedial Law: The rule for exhaustion of all administrative remedies admits of several exceptions. Some of these obtain in the case at hand. The further delay of respondent compensation will work injustice against him, as the government and public has derived benefit from the dike constructed for almost two decades already. Remanding the case to an administrative agency would further prejudice respondent. In addition, the issue at hand is the validity of the contract, which is purely a question of law. As such, only the courts may address the issue directly.

Civil Law: The non-suability of the State also admits of exceptions. In this case, upholding such would lead to the State unjust enrichment, and would work injustice against the respondent. The Court will not allow such to occur. The CA was correct in declaring the contract void, but ordering payment based on quantum meruit. The contract is illegal due to violations of requirements of P.D. 1445. However, it is not illegal per se. As such, it is only proper that respondent be compensated as the completed project has already benefited the State and the public. Such a ruling is supported by a long line of Jurisprudence.

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