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Vigilar v.

January 18, 2011
Sereno, J.
Gregorio R. Vigilar (DPWH Sec.), DPWH Undersecretaries Teodoro Encarnacion and Edmundo Mir, DPWH Assistant
Sec. Joel Altea, DPWH Regional Director Vicente Lopez, DPWH District Engineer Angelito Twao, Felix Desierto of
the Technical Working Group Validation and Auditing Team, DPWH Pampanga 2
Engineering District Members
Leonardo Alvaro, Romeo Supan and Victorino Santos
Arnulfo D. Aquino
Petition for a review on certiorari of a decision of the Court of Appeals
Respondent finished the construction of a dike completed almost two decades ago but DPWH refused to pay.
Angelito M. Twao, petitioner, then the OIC District Engr. of DPWH 2nd Engineering District of Pampanga
sent an Invitation to bid to respondent Arnulfo D. Aquino (owner of A.D. Aquino Construction and
supplies). The bidding was for the construction of a dike by bull-dozing a part of the Porac River at Brgy.
Ascomo-Pulungmasle, Guagua, Pampanga.
On July 7, 1992, the project was awarded to respondent, and a "Contract Agreement" has been executed
between him and petitioners for the amount of Php 1,873,790.69 to cover the project cost. On July 9,
1992, the project was completed, and respondent was issued a Certificate of Project Completion on July
16 (signed by Yumul, Supan and Twao).
Respondent Aquino, however claimed that Php 1,262,696.20 was still due to him, but petitioners refused
to pay. He thus filed a complaint for the collection of sum of money with damages before the RTC of
Petitioners has the following contentions: that the Complaint was a suit against the State; that
respondent failed to exhaust administrative remedies; and that the Contract of Agreement was void for
violating PD 1445 (Government Auditing Code)- absent the proper appropriation and the Certificate of
Availability of Funds.
On November 28,2003, lower court ruled in favor of the respondent. The lower court ordered DPWH to
play Aquino the amount for the completion of the project (Php 1,873,790.69- Take note Aquino said 1.2 M
na lng kulang), Php 50,000 attorney's fees and cost of the suit.
On appeal, CA reversed and set aside the decision. It said that Contract Agreement is declared null and
void ab initio. CA ordered COA to determine the total obligation due to Aquino on a quantum meruit
basis. [[quantum meruit definition fr. net= When a person employs another to do work for him, without
any agreement as to his compensation, the law implies a promise from, the employer to the workman that
he will pay him for his services, as much as he may deserve or merit]]
Dissatisfied with the Decision the Court of Appeals, petitioners are seeking for the reversal of the
appellate court's decision and dismissal of the Complain in civil case
1. WON the CA erred in not dismissing the complaint for failure of respondent to exhaust all
administrative remedies
NO. Doctrine of exhaustion of administrative remedies and doctrine of primary jurisdiction are not ironclad rules.
There are numerous exceptions, and the pertinent ones in this case are 1.) Where there is unreasonable delay or
official inaction that will irretrievably prejudice the complainant; 2.) Where the question involved is purely legal
and will ultimately have to be decided by courts of justice. Also, the issues of the present case involve the validity
and enforceability of the Contract of Agreement entered into by the parties which are questions of law and clearly
beyond the expertise of COA.
The Final 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.
2. WON the CA erred in ordering the COA to allow payment to respondent on a quantum meruit basis
despite the latters failure to comply with the requirements of PD 1445
NO. The Court has held that contracts which involved government projects undertaken in violation ofn the
relevant laws, rules etc. covering public bidding , budge appropriations and release of funds were VOID for failing
to meet the requirements mandated by law. However, THE CONTRACTOR SHOULD BE COMPENSATED FOR
The government project was completed almost two decades ago, and the public has benefitted from the work
done by the respondent. The contractor should be duly compensated. Not doing so would unjustly enrich the
government. Justice and equity demand compensation on the basis of quantum meruit.
3. WON the CA erred in holding that the doctrine of non-suability of the State has no application in this
NO. The doctrine of governmental immunity from suit cannot serve as an instrument for perpetrating injustice to a
citizen. This rule is not absolute anyway.
Petition is denied for lack of merit. The assailed decision of the CA dated Sept. 25, 2006 is affirmed. Panalo ung