Petitioners Vs Vs Respondent: en Banc
Petitioners Vs Vs Respondent: en Banc
DECISION
SERENO , J : p
Before the Court is a Petition for Review on Certiorari 1 under Rule 45 of the Rules
of Court, assailing the Decision 2 of the Court of Appeals in C.A.-G.R. CV No. 82268,
dated 25 September 2006.
The antecedent facts are as follows:
On 19 June 1992, petitioner Angelito M. Twaño, then O cer-in-Charge (OIC)-
District Engineer of the Department of Public Works and Highways (DPWH) 2nd
Engineering District of Pampanga sent an Invitation to Bid to respondent Arnulfo D.
Aquino, the owner of A.D. Aquino Construction and Supplies. The bidding was for the
construction of a dike by bulldozing a part of the Porac River at Barangay Ascomo-
Pulungmasle, Guagua, Pampanga.
Subsequently, on 7 July 1992, the project was awarded to respondent, and a
"Contract of Agreement" was thereafter executed between him and concerned
petitioners for the amount of PhP1,873,790.69, to cover the project cost.
By 9 July 1992, the project was duly completed by respondent, who was then
issued a Certi cate of Project Completion dated 16 July 1992. The certi cate was
signed by Romeo M. Yumul, the Project Engineer; as well as petitioner Romeo N. Supan,
Chief of the Construction Section, and by petitioner Twaño.
Respondent Aquino, however, claimed that PhP1,262,696.20 was still due him,
but petitioners refused to pay the amount. He thus led a Complaint 3 for the collection
of sum of money with damages before the Regional Trial Court of Guagua, Pampanga.
The complaint was docketed as Civil Case No. 3137.
Petitioners, for their part, set up the defense 4 that the Complaint was a suit
against the state; that respondent failed to exhaust administrative remedies; and that
the "Contract of Agreement" covering the project was void for violating Presidential
Decree No. 1445, absent the proper appropriation and the Certi cate of Availability of
Funds. 5 SCIacA
SO ORDERED. 6
It is to be noted that respondent was only asking for PhP1,262,696.20; the award
in paragraph 1 above, however, conforms to the entire contract amount.
On appeal, the Court of Appeals reversed and set aside the Decision of the lower
court and disposed as follows:
WHEREFORE , premises considered, the appeal is GRANTED. The
"CONTRACT AGREEMENT" entered into between the plaintiff-appellee's
construction company, which he represented, and the government, through the
Department of Public Works and Highway (DPWH)-Pampanga 2nd Engineering
District, is declared null and void ab initio.
The assailed decision of the court a quo is hereby REVERSED AND SET
ASIDE.
No pronouncement as to costs.
SO ORDERED . 8
Dissatis ed with the Decision of the Court of Appeals, petitioners are now before
this Court, seeking a reversal of the appellate court's Decision and a dismissal of the
Complaint in Civil Case No. G-3137. The Petition raises the following issues:
1. WHETHER OR NOT THE COURT OF APPEALS ERRED IN HOLDING THAT
THE DOCTRINE OF NON-SUABILITY OF THE STATE HAS NO APPLICATION
IN THIS CASE.
Firstly, petitioners claim that the Complaint led by respondent before the
Regional Trial Court was done without exhausting administrative remedies. Petitioners
aver that respondent should have rst led a claim before the Commission on Audit
(COA) before going to the courts. However, it has been established that the doctrine of
exhaustion of administrative remedies and the doctrine of primary jurisdiction are not
ironclad rules. In Republic of the Philippines v. Lacap , 9 this Court enumerated the
numerous exceptions to these rules, namely: (a) where there is estoppel on the part of
the party invoking the doctrine; (b) where the challenged administrative act is patently
illegal, amounting to lack of jurisdiction; (c) where there is unreasonable delay or official
inaction that will irretrievably prejudice the complainant; (d) where the amount involved
is relatively so small as to make the rule impractical and oppressive; (e) where the
question involved is purely legal and will ultimately have to be decided by the courts of
justice; (f) where judicial intervention is urgent; (g) where the application of the doctrine
may cause great and irreparable damage; (h) where the controverted acts violate due
process; (i) where the issue of non-exhaustion of administrative remedies has been
rendered moot; (j) where there is no other plain, speedy and adequate remedy; (k)
where strong public interest is involved; and (l) in quo warranto proceedings. In the
present case, conditions (c) and (e) are present.
The government project contracted out to respondent was completed almost
two decades ago. To delay the proceedings by remanding the case to the relevant
government o ce or agency will de nitely prejudice respondent. More importantly, the
issues in the present case involve the validity and the enforceability of the "Contract of
Agreement" entered into by the parties. These are questions purely of law and clearly
beyond the expertise of the Commission on Audit or the DPWH. In Lacap , this Court
said:
. . . It does not involve an examination of the probative value of the
evidence presented by the parties. There is a question of law when the doubt or
difference arises as to what the law is on a certain state of facts, and not as to
the truth or the falsehood of alleged facts. Said question at best could be resolved
only tentatively by the administrative authorities. The nal decision on the
matter rests not with them but with the courts of justice. Exhaustion of
administrative remedies does not apply, because nothing of an
administrative nature is to be or can be done. The issue does not
require technical knowledge and experience but one that would involve
the interpretation and application of law. (Emphasis supplied.)
WHEREFORE , in view of the foregoing, the Petition is DENIED for lack of merit.
The assailed Decision of the Court of Appeals in CA-G.R. No. 82268 dated 25
September 2006 is AFFIRMED .
SO ORDERED .
Corona, C.J., Carpio, Carpio Morales, Velasco, Jr., Nachura, Leonardo-de Castro,
Brion, Peralta, Bersamin, Del Castillo, Abad, Villarama, Jr., Perez and Mendoza, JJ., concur.
Footnotes
1.Rollo at 10-32.
2.Penned by Associate Justice Amelita G. Tolentino, with Associate Justices Portia Aliño-
Hormachuelos and Arcangelita Romilla-Lontok concurring, rollo at 33-48.
3.Rollo at 51-55.
4.Petitioners' Answer, rollo at 56-59.
5.Sections 85-87, Ordaining and Instituting a Government Auditing Code of the Philippines
(1978).
6.Rollo at 60-64.
7.G.R. Nos. 151373-74, November 17, 2005, 475 SCRA 218.
8.Rollo at 47.
15.DOH v. C.V. Canchela Associates, Architects, G.R. Nos. 151373-74, November 17, 2005, 475
SCRA 218.