Case Digest (G.R. No. 225895)
Facts:
In Republic of the Philippines, represented by the Department of Public Works and Highways, Commission on Audit and the National Treasurer (petitioner) vs. Carlito Lacap, doing business under the name and style Carwin Construction and Construction Supply (respondent), the respondent was pre-qualified and awarded the lowest bid under an Invitation to Bid dated January 27, 1992 for the concreting of Sitio 5 Bahay Pare in Pampanga. A Contract Agreement was executed on November 4, 1992, following the issuance of the Notice to Proceed on September 25, 1992. Respondent completed the works, advanced for materials and labor, and on October 29, 1992, the project was inspected and 100% accepted by the Office of the District Engineer, which issued the Certificate of Final Inspection and Final Acceptance. When respondent sought payment, disbursement vouchers were prepared but payment was withheld because the District Auditor of the Commission on Audit disapproved the release on the ground tCase Digest (G.R. No. 225895)
Facts:
- Invitation to Bid and Award
- On January 27, 1992, the District Engineer of Pampanga published an “Invitation To Bid” for the concreting of Sitio 5, Bahay Pare, Candaba, Pampanga.
- Carlito Lacap, doing business as Carwin Construction, was pre-qualified and submitted the lowest bid, resulting in the award of the contract.
- Contract Execution and Project Completion
- On November 4, 1992, Carwin Construction and the Republic of the Philippines (represented by DPWH) executed the Contract Agreement.
- A Notice to Proceed was issued on September 25, 1992; by October 29, 1992, DPWH personnel found the project 100% complete and issued Certificates of Final Inspection and Final Acceptance.
- Withholding of Payment
- DPWH prepared a Disbursement Voucher for payment to Carwin Construction.
- Payment was withheld after the COA District Auditor disapproved the release, citing that Carwin Construction’s contractor’s license had expired at the time of contract execution.
- The DPWH Legal Department issued two opinions (September 1, 1993 and July 20, 1994) that, although a contractor with an expired license may face administrative sanctions, the contract remains enforceable and payment should be made.
- Judicial Proceedings
- On July 3, 1995, respondent filed a complaint for Specific Performance and Damages before the RTC, Branch 41, San Fernando, Pampanga.
- The Office of the Solicitor General moved to dismiss for lack of cause of action and non-exhaustion of administrative remedies; RTC denied the motions (Orders dated March 11 and May 23, 1996).
- After trial, RTC rendered judgment on February 19, 1997, ordering payment of ₱457,000 plus 12% interest from demand and costs of suit.
- Petitioner appealed to the CA; on April 28, 2003, the CA affirmed with modification—interest at 6% per annum from June 21, 1995.
- Petitioner filed a Rule 45 petition in the Supreme Court, alleging (a) failure to exhaust administrative remedies before the COA and (b) COA’s primary jurisdiction over money claims against the government.
Issues:
- Did respondent prematurely resort to judicial action by failing to appeal the COA District Auditor’s disapproval under Section 48, P.D. 1445?
- Does the COA have primary jurisdiction to decide respondent’s money claim against the government under the Constitution and P.D. 1445?
- Can a contractor with an expired license at contract execution nevertheless enforce payment for duly completed government works?
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)