Case Digest (G.R. No. 170530)
Facts:
Sargasso Construction & Development Corporation/Pick & Shovel, Inc./Atlantic Erectors, Inc. (Joint Venture) v. Philippine Ports Authority, G.R. No. 170530, July 05, 2010, Supreme Court Second Division, Mendoza, J., writing for the Court.Petitioner (the joint venture) was the winning contractor for construction of Pier 2 and an adjacent rock causeway at the Port of San Fernando, La Union, under a public bidding by respondent Philippine Ports Authority (PPA); implementation began August 14, 1990. By letter dated October 1, 1992, the joint venture offered to perform an extra work—reclamation between Timber Pier and Pier 2—for P36,294,857.03. PPA’s Assistant General Manager replied on December 18, 1992 reducing the price to P30,794,230.89 and stating the award would be "subject to the approval of higher authority."
On August 26, 1993 PPA’s General Manager issued a Notice of Award for the phase I Reclamation Contract in the reduced amount and instructed the contractor to execute the contract and furnish performance security; the Notice also made as a condition that fendering of Pier No. 2 and Tabaco be completed before approval of the reclamation contract. PPA’s Board of Directors, at its September 9, 1994 meeting, decided not to approve the negotiated supplemental contract, explaining that the reclamation differed materially from the original Pier 2 project and thus should be bid.
When PPA did not execute the supplemental (reclamation) contract, petitioner filed a complaint for specific performance and damages on June 30, 1997 before the Regional Trial Court (RTC) of Manila (Civil Case No. 97-83916). The RTC (Judge Inocencio D. Maliaman) found a perfected contract and ordered PPA to execute the contract for P30,794,230.89 (June 8, 1998 Decision). PPA’s counterclaim was dismissed.
PPA appealed to the Court of Appeals (CA). The CA initially dismissed PPA’s appeal as unperfected for lateness (June 27, 2000 Resolution). PPA sought relief in the Supreme Court; in Philippine Ports Authority v. Sargasso Construction and Development Corp., G.R. No. 146478, July 30, 2004 (en banc), the Court granted PPA’s petition on a liberal construction of procedural rules and remanded for further CA proceedings. On August 22, 2005 the CA (CA-G.R. CV No. 63180) reversed the RTC and dismissed petitioner’s complaint for lack of merit, holding that the PPA General Manager lacked authority to bind PPA to a negotiated supplemental contract absent Board or statu...(Subscriber-Only)
Issues:
- Was there a perfected contract between the joint venture and PPA—i.e., did the PPA General Manager have authority to bind PPA to the negotiated reclamation contract?
- If the General Manager lacked actual authority, can apparent authority or equitable estoppel bind PPA and render the Notice of A...(Subscriber-Only)
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)