Part 2Republic v. Lacap, G.R. No.

158253 March 2, 2007FACTS

Case is a petition for certoriari, assailing the decision of the Court of Appeals which
affirmed,with modifications, ruling by the RTC granting the complaint for Specific
Performance anddamages filed by Lacap against RP

Dist. Eng. Of Pampanga issued an invitation to bid dated Jan 27, 1992 where Lacap
and twoother contractors were pre-qualified

Being the lowest bidder, Lacap won the bid for concreting of a certain baranggay,
andthereafter undertook the works and purchased materials and labor in connection
with

On Oct 29, 1992, Office of the Dist. Eng conducted final investigation of end product
and fountit 100% completed according to specs. Lacap thereafter sought the
payment of the DPWH

DPWH withheld payment on the grounds that the CoA disapproved final release of
funds dueto Lacaps license as contractor having expired

Dist. Eng sought the opinion of DPWH legal. Legal then responded to Dist. Eng that
theContractors License Law (RA 4566) does not provide that a contract entered into
by acontractor after expiry of license is void and that there is no law that expressly
prohibits or declares void such a contract

DPWH Legal Dept, through Dir III Cesar Mejia, issued First Indorsement on July 20
1994recommending that payment be made to Lacap. Despite such
recommendation, no paymentwas issued

On July 3, 1995, respondent filed the complaint for Specific Performance and
Damagesagainst petitioner before the RTC.14

On September 14, 1995, petitioner, through the Office of the Solicitor General
(OSG), filed aMotion to Dismiss the complaint on the grounds that the complaint
states no cause of actionand that the RTC had no jurisdiction over the nature of the
action since respondent did notappeal to the COA the decision of the District Auditor
to disapprove the claim.

Following the submission of respondents Opposition to Motion to Dismiss,the RTC

issued anOrder dated March 11, 1996 denying the Motion to Dismiss. The OSG filed
a Motion for Reconsideration18 but it was likewise denied by the RTC in its Order
dated May 23, 1996.

On August 5, 1996, the OSG filed its Answer invoking the defenses of nonexhaustion of administrative remedies and the doctrine of non-suability of the State

Following trial, the RTC rendered on February 19, 1997 a decision ordering DPWH to
payLacap for the contract of the project, 12% interest from demand until fully paid,
and the costs of the suit

CA affirmed the decision but lowered interest to 6%

ISSUE
WON a contractor with an expired license is entitled to be paid for completed
projects
RULING
A contractor with an expired license is entitled payment for completed projects, but
does notexonerate him from corresponding fines thereof. Section 35 of R.A. No.
4566 explicitly provides:
SEC. 35. Penalties. Any contractor who, for a price, commission, fee or wage,
submits or attemptsto submit a bid to construct, or contracts to or undertakes to
construct, or assumes charge in asupervisory capacity of a construction work within
the purview of this Act, without first securing alicense to engage in the business of
contracting in this country; or who shall present or file thelicense certificate of
another, give false evidence of any kind to the Board, or any member thereof
inobtaining a certificate or license, impersonate another, or use an expired or
revoked certificate or license, shall be deemed guilty of misdemeanor, and shall,

upon conviction, be sentenced to pay afine of not less than five hundred pesos but
not more than five thousand pesos.
The "plain meaningrule" or verba legis in statutory construction is that if the statute
is clear, plain and free fromambiguity, it must be given its literal meaning and
applied without interpretation. The wordings of R.A. No. 4566 are clear. It does not
declare, expressly or impliedly, as void contracts entered into bya contractor whose
license had already expired. Nonetheless, such contractor is liable for paymentof
the fine prescribed therein. Thus, respondent should be paid for the projects he
completed. Suchpayment, however, is without prejudice to the payment of the fine
prescribed under the law.