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Commission on Elections vs.

Case No. 36 / ConstiLaw Batch 4

is to impose such conditions as a priori requisites to the validity of the proposed

Nature of the Case:Petition for review on certiorari of a decision of the TRC of contract.
Quezon City.
Court held in Metropolitan case that “the effect of an unqualified acceptance of the
Facts: Congress enacted RA 8189 or the “Voter’s Registration Act of 1996”, this offer or proposal of the bidder is to perfect a contract, upon notice of the award to the
provided for the modernization and computerization of the voter’s registration list, and bidder” HOWEVER, such statement would be inconsequential in a government where
appropriated funds therefor. Pursuant to the said RA, COMELEC promulgated a the acceptance referred to is yet to meet certain conditions. To hold otherwise is to
Resolution approving the Voter’s Registration and Identification Project (VRIS) which allow a public officer to execute a binding contract that would obligate the government
envisions a computerized database system for the May 2004 elections. COMELEC in an amount in excess of the appropriations for the purpose for which the contract
issued invitations for bid and it was awarded to PHOTOKINA Marketing Corporation, was attempted to be made.
which received the highest total weighted score and declared winning bidder. (BID
was 6.58 B Pesos). HOWEVER, RA 8760 provided that the budget appropriated by Clearly the amount appropriated is insufficient to cover the cost of the entire VRIS
Congress for the COMELEC’s modernization project was only 1B and actual available project. There is no way that the COMELEC could enter into a contract with
funds under Certificate of Availability of Funds (CAF) was 1.2B. PHOTOKINA PHOTOKINA whose accepted bid was way beyond the amount appropriated by law
requested the execution of the contract, but to no avail. PHOTOKINA filed a petition for the project.
with the RTC and was granted, it directed the Commissioners to resume negotiations
to formalize the execution of the contract for the VRIS project. COMELEC filed a The contract, as expressly declared by law, is inexistent and void ab initio. Proposed
complaint against respondent judge. contract is without force and effect from the very beginning, as if it had never been
entered into.
Issue: May a successful bidder compel a government agency to formalize a contract
with it notwithstanding that its bid exceeds the amount appropriated by Congress for Relevance to ConstiLaw: NO MONEY PAID OUT OF THE TREASURY EXCEPT IN

Held: PHOTOKINA cannot compel COMELEC. Petition is GRANTED, RESOLUTION

issued by Judge Padilla are SET ASIDE.

Ratio: Enshrined in the 1987 Constitution is the mandate that “no money shall be paid
out of the Treasury except in pursuance of an appropriation made by law.” In the
execution of government contracts the precise import of this constitutional restriction is
to require the various agencies to limit their expenditures within the appropriations
made by law for each fiscal year.

Complementary to the constitutional injuction are the provisions (section 46 and 47,
chapter of EO 292 or “Administrative Code of 1987”) which pertinent provisions read:

Section 47. xxxno contract involving the expenditure of public funds by any
government agency shall be entered into or authorized unless the proper accounting
official of the agency concerned shall have certified to the officer entering into the
obligation that funds have been duly appropriated for the purpose and that the amount
necessary to cover the proposed contract for the current calendar year is available for
expenditure on account thereof xxx

Quite evident from the tenor of the language of the law that the existence of
appropriations and the availability of funds are indispensable pre-requisites to or
conditions sine qua non for the execution of government contracts. The obvious intent

Santos 1