Case Digest (G.R. No. L-3659)
Facts:
Philippine Operations, Inc. v. Auditor General of the Philippines and the Bureau of Prisons, G.R. No. L-3659. April 30, 1954, the Supreme Court, Labrador, J., writing for the Court.Philippine Operations, Inc. (petitioner) entered on October 3, 1947 into a barter agreement with the Bureau of Prisons (respondent) under which petitioner would deliver a sawmill (complete, with accessories) and two landing barges/LCMs in exchange for 350,000 board feet of sawn lumber delivered in monthly instalments (70,000 bd. ft. beginning thirty days after installation of the sawmill). The contract did not expressly state monetary values for the equipment or the lumber.
Upon delivery, government receipts and inspection reports disclosed defects and missing parts in the sawmill (no belting for main saw, broken carriage frame, missing head block hook and doe, missing steel rope cable; many parts worn and rusty) and in one barge (spare parts missing); some missing items (cable and belting) were later furnished on February 4, 1948. The Bureau of Prisons' indorsements record that petitioner's representatives were verbally advised of defects and that petitioner’s manager agreed to reimburse repair expenses; a receiving official recommended deduction of needed spare parts from the contract price.
Because of delay and installation problems, petitioner proposed in late 1948 and 1949 alternative means of liquidation—crediting petitioner with P70,000 for future surplus offerings or applying credits toward purchase of surplus properties—but no suitable surplus properties were located; the Bureau of Prisons nonetheless indicated readiness to deliver lumber (the Director of Prisons’ indorsement of November 26, 1948). Petitioner rejected a later offer (August 26, 1949) to begin delivery of lumber, claiming such delivery came too late and demanding cash P70,000 plus P35,000 in damages. By April 1950 the parties agreed to sell the lumber and remit proceeds to petitioner; petitioner received P45,500, leaving petitioner’s claims (at submission) limited to P4,500 (alleged shortfall from P70,000) and P35,000 for alleged delay damages.
On June 20, 1949 petitioner filed a claim with the Auditor General for P105,000. The Auditor General sought the opinion of the Secretary of Justice, who on January 3, 1950 advised that the contract was a pure barter and that petitioner’s demand for P70,000 should be denied and the contract should be carried out by delivery o...(Pro-only)
Issues:
- Does the Auditor General have jurisdiction under Commonwealth Act No. 327 (and related statutes) to hear and decide unliquidated moneyed claims for damages against the Government?
- On the merits, is petitioner entitled to recover the alleged shortfall and damages (P4,500 and P35,000) for delay in delivery of lumber under the Octobe...(Pro-only)
Ruling:
- (Pro-only)
Ratio:
- (Pro-only)
Doctrine:
- (Pro-only)