DPWH vs. Quiwa et.

al
G. R. No. 183444
February 8, 2012

Facts:
After the Mt. Pinatubo eruption in 1991, the Department of Public Works and
Highways engaged the services of several contractors for the rehabilitation of
affected river systems. Efren N. Rigor and Romeo R. Dimatulac, owners of Save for
Chiara Construction and Ardy Construction, respectively, signed written agreements
with DPWHs project manager, Engineer Philip Menez.

The contractors completed their rehabilitation works. However, DPWH
alleged that their contracts with the companies were void due to non-compliance
with legal requirements and thus refused to pay them. Because of this, the
contractors filed an action for sum of money against DPWH.

The Regional Trial Court ruled that the contracts were valid and required
DPWH to pay the contractors. DPWH filed an appeal to the Court of Appeals who
also ruled in favor of the contractors. The petitioner averred that the respondents
failed to comply with the legal requirements concerning government contracts and
in ascertaining the extent of authority of the public official with whom they
contracted. Therefore, the petitioner must not be made to pay huge amounts of
money arising from void contracts.

Issue:
Whether or not the contracts between DPWH and the contractors are valid.

Held:
Even with the respondents supposed failure to ascertain the validity of the
contract and the authority of the public official involved in the construction
agreements, there is no such confusion as to the matter of the contracts validity and
the equivalent compensation. As found by the court a quo, petitioner had assured
the contractors that they would be paid for the work that they would do, as even
DPWH Undersecretary Teodoro T. Encarnacion had told them to fast-track the
project. Hence, respondents cannot by any stretch of logic, be deprived of
compensation for their services when - despite their ostensible omissions - they
only heeded the assurance of DPWH and proceeded to work on the urgent project.