GR 252411 2022
GR 252411 2022
GR 252411 2022
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Promulgated:
February 15, 2022
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RESOLUTION
This Petition for Certiorari 1 under Rule 64, in relation to Rule 65, of
the Revised Rules of Court assails the Commission on Audit (COA) Proper
Decision No. 2020-043 2 dated January l 0, 2020, which denied Metro Laundry
1
Rollo, pp. 3-27.
2
Id. at 29-34. Composed of Chairperson Michael G. Aguinaldo, Commissioners Jose A. Fabia,
and Roland C. Pondoc.
Resolution 2 G.R. No. 252411 '
February 15, 2022
Services' (Metro Laundry) money claim for the unpaid services it rendered at
the Ospital ng Maynila Medical Center (OMMC).
FACTS
The City of Manila, through its Bids and Awards Committee (BAC),
conducted a public bidding to procure "Laundry Services of Soiled and Dirty
Linens for the 3rd and 4th Quarter of 2010" 3 for OMMC with an approved
budget of Pl,080,000.00. Metro Laundry was declared the winning bidder as
evidenced by BAC Resolution No. 2010-327 and Notice of Award4 dated
September 6, 2010. Metro Laundry then provided laundry services to OMMC
in accordance with the terms of the contract. 5 The contract expired on
December 31, 2010, but OMMC retained Metro Laundry's services from
January 1, 2011 to March 31, 2011 upon the request of Dr. Janet del Mundo-
Tan, then Officer-in-Charge (OIC), Hospital Director of OMCC. For this
purpose, the City of Manila and Metro Laundry executed an Extension
Contract of Services6 with the same terms and conditions as in the previous
contract.
3
Id. at 29.
4
Id. at 39-40.
5
Id. at 29.
6
Id. at 41-44.
7
Id. at 29-30.
8
Id. at 29.
9
Id. at 45.
10
Id. at 46.
11
Id. at 5.
12
Id. at 47.
13
Id. at 48.
14 Id.
r
1s Id.
Resolution 3 G.R. No. 252411
February 15, 2022
16
Id. at 49-51.
17
Id. at 52.
18
Id. at 53.
19
Id. at 56-57.
20
Id. at 58.
21
Id. at 59.
22 Id.
23
Id. at 60.
24
Id., emphasis in the original omitted.
25
Id. at 61-62.
26
Jd.at63-70.
27
Id. at 72-74.
28
Id. at 73.
d
Resolution 4 G.R. No. 252411 '
February 15, 2022
In its assailed Decision No. 2020-043 32 dated January 10, 2020, the
COA Proper focused on the illegaljty of the extended contract. Relying mainly
upon COAResolutionNo. 86-58 33 dated November 15, 1986, the COAProper
ruled that the patent disregard of the mandatory requirements for procurement
of services under Section 1034 of Republic Act (RA) No. 9184 35 and Sections
85(1)36 and 8637 of Presidential Decree (PD) No. 1445 38 nullified Metro
Laundry's legal claim for payment. The COA Proper explained that, pursuant
to Section 48, 39 Book V, Title I, Subtitle B, Chapter 8 of the Administrative
Code of 1987,40 Metro Laundry's recourse should be against the OMMC
officials who secured its services in disregard of government procurement
rules. Hence, with a 2-3 vote, Metro Laundry's claim was disposed as follows:
29
Id. at 31.
30
Not attached in the rollo; mentioned in COA Decision dated January 10, 2020, id. at 31.
31
Id. at 31.
32 Id. at 29-34.
33
Re: Policy on the Recovery by Government Contractors on the Basis of Quantum Meruit.
34 SEC. 10. Competitive Bidding. - All Procurement shall be done through Competitive Bidding,
except as provided for in Article XVI of this Act.
35
Entitled "AN ACT PROVIDING FOR THE MODERNIZATION, STANDARDIZATION AND REGULATION
OF THE PROCUREMENT ACTIVITIES OF THE GOVERNMENT AND FOR OTHER PURPOSES," otherwise known as
the "GOVERNMENT PROCUREMENT REFORM ACT," dated January I 0, 2003.
36
SEC. 85. Appropriation before entering into contract.-
I. No contract involving the expenditure of public funds shall be entered into unless there is an
appropriation therefor, the unexpended balance of which, free of other obligations, is sufficient to cover the
proposed expenditure.
37
SEC. 86. Certificate showing appropriation to meet contract. - Except in the case of a
contract for personal service, for supplies for current consumption or to be carried in stock not exceeding the
estimated consumption for three months, or banking transactions of government-owned or controlled banks[,]
no 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 fiscal year is available for expenditure on account
thereof, subject to verification by the auditor concerned. The certificate signed by the proper accounting
official and the auditor who verified it, shall be attached to and become an integral part of the proposed
contract, and the sum so certified shall not thereafter be available for expenditure for any other purpose until
the obligation of the government agency concerned under the contract is fully extinguished.
38
Entitled "ORDAINING AND INSTITUTING A GOVERNMENT AUDITING CODE OF THE PHILIPPINES,"
otherwise known as the "GOVERNMENT AUDITING CODE OF THE PHILIPPINES," dated June 11, 1978.
39
SEC. 48. Void Contract and Liability of Office,: - Any contract entered into contrary to the
requirements of the two (2) immediately preceding sections shall be void, and the officer or officers entering
into the contract shall be liable to the Government or other contracting party for any consequent damage to
the same extent as if the transaction had been wholly between private parties.
40
Executive Order No. 292, entitled "INSTITUTING THE 'ADMINISTRATIVE CODE OF 1987,"' signed
t
on July 25, 1987.
Resolution 5 G.R. No. 252411
February 15, 2022
[T]he Decision makes much reliance on COA Resolution No. [86-58] dated
[November 15, 1986,] which states the policy on the Recovery by
Government Contractors on the Basis of Quantum Meruit. This Resolution,
which curiously limits quantum meruit recovery to a single ground - the
absence of the certificate of availability of funds, has long been rendered
obsolete by numerous decisions of the Supreme Court through the last three
decades. It is archaic, a relic of the past, and totally out of tune with[,] not
just jurisprudence[,J but reality. Relying on the Resolution as a basis for the
denial of the money claim is not simply turning a blind eye to
jurisprudence[,] but being inattentive and unjust.
The justification usually given for the denial of money claims based
on quantum meruit is that contractors continue to violate government
procurement laws. But who actually violates the procurement law? Absent
any proof of collusion, the burden of which falls on the Commission, it
cannot be presumed that the contractor colluded with the government
officials involved. It is the government official who violates the
procurement law, by not holding any public bidding, or proceeding without
appropriation or a written contract. Consequently, the proper patty to
penalize is the government official responsible. The denial of a quantum
meruit money claim, in the absence of proof of collusion, will not have the
effect of lessening procurement law violations for the simple reason that the
wrong person is being penalized. The proper recourse is referral of the
matter to the Office of the Ombudsman for investigation of the government
officials involved.
xxxx
r
45
Id. at 24.
Resolution 6 G.R. No. 252411 .
February 15, 2022
file a motion for reconsideration (MR) before the COA Proper before it sought
remedy to the Court, which would have warranted the dismissal of the
petition. 46 Nevertheless, the OSG prays for the modification of the assailed
Decision No. 2020-043 as it also argues for Metro Laundry's entitlement to
compensation and the application of the principle of quantum meruit since the
City of Manila had admittedly benefited from Metro Laundry's services,
subsequent appropriations for the payment were already . done, and
disbursement vouchers were correspondingly issued therefor. 47 Ho:Vever, the
OSG takes exception to the grant of the whole amount of Pl,851,814.45
claimed, and instead argues that only the amount appearing in the
disbursement vouchers - a total of Pl,666,633.00 - should be granted. 48
ISSUE
The only issue is whether the COA Proper gravely abused its discretion
in denying Metro Laundry's money claim due to the irregularities that
attended the extension of its contract of service with OMMC.
RULING
Preliminarily, since the OSG finds no issue on giving due course to the
petition, we find it unnecessary to belabor on the procedural matter raised in
its Comment49 as regards Metro Laundry's failure to file an MR before
resorting to certiorari. It is settled that the rule on the filing of an MR as a
condition sine qua non for the filing of a petition for certiorari admits of
exceptions, such as when the issue raised is one purely of law, or when the
further delay on the proceedings would already be prejudicial to the interest
of the parties. 50 Here, the ultimate facts are undisputed, and the only issue is
the propriety of applying the principle of quantum meruit. We cannot ignore
the fact that Metro Laundry's ordeal in collecting payment from OMMC's
admitted obligation has been dragged on for more than a decade now,
impelling this Court to finally resolve this controversy to avoid any further
delay.
46
Id. at 139-140.
47
Id. at 141-145.
48
ld. at 144.
49
Id.atl32-148.
50
See Esta/ilia v. Commission on Audit, G.R. No. 217448, September 10, 2019, 919 SCRA 1, 10-
r
11.
Resolution 7 G.R. No. 252411
February 15, 2022
xxxx
51
Supra note 33.
52
De Guzman v. Office of the Ombudsman, 821 Phil. 681, 691 (2017).
53
RG Cabrera Corporation, Inc. v. Department of Public rVorks and Highways, G.R. No. 231015,
January 26, 2021.
54
Supra note 37.
!
Resolution 8 G.R. No. 252411 .
February 15, 2022
We, however, highlight that the OfAMC and the City of Manila have
consistently recognized Metro Laundry's entitlement to payment for its actual
services rendered despite non-compliance with the foregoing provisions as
shown by the series of certifications, indorsements, and vouchers issued by
OMMC and concerned city officials. 55 Even the COA Proper, in its assailed
Decision No. 2020-043, 56 agreed that Metro Laundry is entitled to be paid for
its services, although it took exception to Metro Laundry's recourse against
the local government due to the invalidity of the contract, and for that sole
reason, denied Metro Laundry's claim outright. 57
The work done by [the claimant] was impliedly authorized and later
expressly acknowledged by the Ministry of Public Works, which has twice
recommended favorable action on the [claimant's] request for payment.
Despite the admitted absence of a specific covering appropriation as
required under COA Resolution 36-58, the [claimant] may nevertheless be
compensated for the services rendered by it, concededly for public benefit,
from the general fund allotted by law to the Betis River Project. Substantial
compliance with the said resolution, in view of the circumstances of this
case, should suffice. The Court also feels that the remedy suggested by
[the COA], to compensation claimed, [i.e., pursuing claim before a
court of law,] would entail additional expense, inconvenience and delay
which in fairness should not be imposed on the [claimant.]
This case was cited in Dr. Eslao v. The Commission on Audit, 60 wherein
we granted compensation to the contractor for some accomplished work in the
project even if there was failure to go through the mandatory process of public
bidding. The Court reasoned that "to deny payment to the contractor of the
55
Rollo, pp. 4S-60.
56
Id. at 29-36.
57
Id. at 33.
58
G.R. No. 84202, November 22, 1988, as cited in Department of Public Works and Highways v.
Quiwa, 67S Phil. 9 (2011).
59
Melchor v. Commission on Audit, 277 Phil. 801, 815 (1991); and Dr. Eslao v. The Commission
on Audit, 273 Phil. 97, 106-107 (I 991 ).
60
Supra.
I
Resolution 9 G.R. No. 252411
February 15, 2022
two buildings which are almost fully completed and presently occupied by the
university would be to allow the government to unjustly enrich itself at the
expense of another. Justice and equity demand compensation the basis of
quantum meruit."61
This catena of cases clearly shows that the outright denial of Metro
Laundry's legitimate claim for compensation is unjustified. Insofar as Metro
Laundry is concerned, it has fulfilled the services it was contracted for, and in
doing so, no evidence of bad faith or collusion with the approving OMMC
officials was presented against it. Needless to say, the government has
admittedly benefited from Metro Laundry's services. Given these
circumstances, there is no justification for the COA Proper to impose upon
Metro Laundry the burden of pursuing its claim against the public officials
who engaged its services without compliance with the law. 67 The liability of
these erring officers may properly be imposed in a disallowance case, if bad
faith on their part is proven, and/or in an administrative or criminal case, if
warranted. 68 Thus, we find no further obstacle in ruling for the payment of
Metro Laundry's services based on quantum meruit.
61 Id.
62
Supra note 59.
63
Id. at 815.
64
407 Phil. 53 (2001).
65
Id. at 62.
66
Supra note 52.
67
See Department of Public Works and Highways v. Quiwa, 681 Phil. 485, 490-492 (2012).
68
r
See Torreta v. Commission on Audit, G.R. No. 242925, November IO, 2020.
Resolution 10 G.R. No. 252411 •
February 15, 2022
SO ORDERED.
69
Melchor v. Commission on Audit, supra note 58.
70
Rollo, pp. 47-53.
71
Id. at 31.
72
Id. See also Certification dated January 21, 2016, id. at 60.
73
Id. at 56-57.
74
Id. at 144.
Resolution 11 G.R. No. 252411
February 15, 2022
WE CONCUR:
110'(µ✓
ESTELAM. PEltLAS-BERN~
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MARYi M.V.F. LEONEN
Se "or Associate Justice Associate Justice
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L~UC~~ s. CAGUIOA ~LL.HERNANDO
Ju tice Associate Justice
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HE~INTING
Associate Justice
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SAMUEL H. GAERLAN
Associate Justice
. ROSARIO JHOSE~PEZ
Associate Justice
J
ssociate Justice
Resolution 12 G.R. No. 252411 ·
February 15, 2022
CERTIFICATION
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SC Chief Judicial Staff Officer
Office of the Clerk of Court
Supreme Court of the Phili~•pine'.,