G.R. No. 156687-88 - Bongcac vs. Sandiganbayan

On April 29, 1997, CSC Region X Director IV Vivencio N. Muego, Jr. issued a Notice/Letter of Award to Engr. Domingo F. Estomo of Domingo F. Estomo Trading & Construction, awarding the contract for complete construction of the third floor of the CSC-X building in the amount of P1,475,789.07.
The Notice referenced applicable resolutions and rules, including Resolution No. 01, s. 1997 of the PBAC and the amended implementing rules.
On May 6, 1997, both parties executed a Contract for Works, with the project commencing on May 8, 1997 and a target completion date of October 5, 1997.

Deductions such as withholding taxes, retention money, and recoupment from an advance payment were applied in computing the net amounts released to Estomo.
The CSC made an advance payment on May 14, 1997 amounting to P221,368.35, which was later subject to partial repayment via deductions from progress billings.

Estomo sent multiple letters requesting extra works essential for the complete construction of the third floor.

Letters dated July 7, 15, 18, and 23, 1997 addressed issues such as additional wall partition, aluminum swing doors, a septic tank, roofing, toilet concrete slabs, kitchen cabinets, and baseboard walling.
On September 5, 1997, Estomo presented a detailed breakdown of extra works totaling P206,008.66.

Subsequent correspondence on November 24, 1997 increased the claimed extra works amount to P261,963.82, adding items like a wood partition, acoustic board, fixed glass window, and additional awning window.
Although Estomo issued several demand letters and submitted supporting documentation (e.g., inspection reports, progress charts, certificates), the CSC maintained that extra works were neither properly approved nor completed according to contract specifications.

Estomo filed a Complaint for Specific Performance, Sum of Money plus Damages against the CSC, who in its answer acknowledged the extra works but disputed their completion and approval.
Estomo moved for Partial Judgment on the Pleadings asserting that the CSC’s admissions confirmed completion of the Contract for Works except for the matter of extra works.
An RTC Order dated March 6, 2000 acknowledged liability, subject to Estomo’s submission of certain documents mandated by Presidential Decree No. 1594, COA circulars, and the Government Accounting and Auditing Manual.
During trial proceedings, various motions were filed by both parties including motions to tender payment (by escrow deposit) and to dismiss on the ground of lack of jurisdiction.
The RTC ultimately released the full escrow deposit amount tendered by the CSC (P217,174.46) in favor of Estomo, ruling in favor of equitable principles and quantum meruit, while also addressing counterclaims for uncompleted works and alleged liquidated damages.

On March 7, 2001, the CSC tendered payment via escrow deposit computed as follows:

ii. Recoupment Fee: P31,766.36 iii. Retention Fee: P14,471.60 iv. Deficiencies: P82,000.00

The retention money deducted from the progress payments and the escrow deposit was contested, especially regarding its proper computation under the applicable rules.
The CSC argued that further deductions (or retention) and adjustments should reduce the amount payable to Estomo, while Estomo maintained that the funds had already been expended in completing both the original and extra works.

The approved amount for extra works was only P144,735.98 (per Resolution No. 97-1101, November 28, 1997), not the P261,963.82 claimed by Estomo.
Estomo’s claim from the Contract for Works should be adjusted by several deductions (e.g., VAT, recoupment, retention, deficiencies).
The escrow deposit of P217,174.46 fulfilled the CSC’s obligation, leading to an extinguishment of further liability.

Estomo’s letters were mere requests without conclusive CSC approval.
Statutorily, payment for extra works could only be claimed based on properly approved change or extra work orders.
The additional amount beyond the approved P144,735.98 would constitute unjust enrichment.

Estomo filed his Motion for Reconsideration before the CA, which was denied in a Resolution dated July 19, 2019.
On petition for review on certiorari, the issues presented include questions on the proper computation of deductions, the legality of withholding retention money, and whether Estomo is entitled to further payment for extra works.
The final debates and documentary discrepancies on the computation of withholding tax, retention fees, and the proper application of the principle of quantum meruit were central to the adjudication.

Whether the case involves a question of fact that properly falls outside the ambit of a Petition for Review on Certiorari under Rule 45 versus a pure question of law.
Whether the deductions made from the original Contract for Works—including retention money, recoupment fee, and withholding taxes—were computed and applied in accordance with Presidential Decree No. 1594, its IRR, and other applicable government guidelines.
Whether Estomo is entitled to claim extra works amounting to P261,963.82 when the CSC approved only P144,735.98, and whether the principle of quantum meruit applies in this context of unapproved extra works.
Whether the retention money withheld from progress payments, and additionally from the escrow deposit, should be released to Estomo, subject to proper tax adjustments (particularly for VAT underpayments).