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COMMISSION ON AUDIT RESOLUTION NO.

80-138 July 24, 1980

This has reference to the claim of Willie Quetolio Construction for payment of
P1,225,935.52, for its work done on the Librada Outfall Flood Control Project,
Paranaque, Metro Manila. It appears that the Office of the President in Decision No.
2973, dated June 26, 1979, approved the request of the Director of Public Works for
authority to pay said firm directly on the basis of quantum merit.

The Ministry of Public Works, Transportation and Communications negotiated a


contract with A.M. Limjoco Construction, a single proprietorship of Mr. Antonio M.
Limjoco, for the construction of the Librada Outfall Flood Control Project. On November
11, 1977, after 19.06% of the work had been accomplished, Willie Quetolio Construction
continued with and prosecuted the same to completion on the basis of a Deed of
Assignment dated October 13, 1977 and an Agreement of Sub-contract dated October
19, 1977 with A.M. Limjoco. The Minister of Public Works, Transportation and
Communications did not approve either the Agreement of Sub-contract or the Deed of
Assignment. However, the Bureau of Public Works came to know of this fact only on
January 27, 1978 after Mr. A.M. Limjoco’s death on January 20, 1978.

This Bureau recommended to the Minister of Public Works, Transportation and


Communications the termination of the contract of A.M. Limjoco and the award of the
remaining work to Willie Quetolio Construction, so as to enable W. Quetolio to receive
payment for work accomplished. The Ministry of Public Works and Transportation
approved the termination of the contract but denied the award of the remaining work to
Willie Quetolio Construction. A reconsideration of the denial was sought but was
likewise denied. The Bureau recommended, as an alternative, payment on the basis of
quantum meruit. The Acting Minister did not interpose objection thereon, subject,
however to the approval of this Commission.

In a 3rd Indorsement dated November 3, 1978, this Commission disapproved


the payment on the basis of quantum meruit for the following reasons:

a) Prior approval by the Ministry of Public Works, Transportation and


Communications to the Agreement of Sub-contract was not obtained;

b) Willie Quetolio Construction is not bereft of other legal remedies to satisfy


its claim. It may file its claim against A.M. Limjoco Construction or the
decedent’s estate; and

c) The contractor violated a specific mandate of the original contract which


prohibited him from sub-contracting the same without the approval of the
Minister of Public Works, Transportation and Communications.

From COA’s denial, the Bureau of Public Works on November 28,1978, sought
from the Office of the President authority to pay Willie Quetolio Construction directly on
the basis of quantum meruit. In effect COA’s order dated November 3, 1978 was sought
to be reviewed.
The Office of the President in O.P. Decision No. 2975, dated June 26, 1979,
reconsidered its earlier stand. In reconsidering its decision, the Office of the President
took note of the operation of estoppel -- the fact that the government tacitly approved the
work of Willie Quetolio Construction, at least, up to September 6, 1978. The Contractor,
the case pointed out, was allowed to continue with the construction even after the death
on January 20, 1978 of Mr. Antonio M. Limjoco when the Agreement of Sub-contract and
the Deed of Assignment were presented to the Bureau. The construction was stopped
only on September 6, 1978, or after lapse of more than seven months from said death
upon notice from the Ministry of Public Works, Transportation and Communications that
the request for award was denied (Director’s 1st Indorsement dated September 19,
1978).

It may be recalled that the proper forum to which appeals from rulings and
decisions of this Office may be elevated – prior to January 25, 1979, the effectivity of
P.D. 1445, was to the Office of the President. Hence, on November 28, 1978, when
Director Anolin of the Bureau of Public Works sought the Office of the President for
authority to pay Willie Quetolio Construction directly on the basis of quantum meruit, the
appeal may be viewed as having been elevated to the proper forum.

However, both Art. XI Sec. 3 of the New Constitution and Sec. 2 of CA 327
provide that an appeal may be taken only by an “aggrieved party.” The question then to
be resolved is whether Director Anolin may be considered as an aggrieved party within
the contemplation of the law.

This Commission is of the opinion that apparently Director Anolin does not come
within the purview of the term. Thus, the Office of the President has not acquired
jurisdiction over the subject matter. Our jurisprudence holds that: “Jurisprudence, the
power to hear and decide a case, is conferred only by the Constitution or by law. It
cannot be fixed by the will of the parties nor can it be acquired through, enlarged or
diminished by, any act or omission of the parties (Vicente Francisco, The Revised Rules
of Court in the Philippines, p. 106 citing Bacalso et.al. v. Ramolete et.al., G.R. No. L-
22488 26 October 1967).”

The second issue to be resolved and is incidental to the first issue is whether this
Office has the power to inquire into the issue of lack of jurisdiction. This Commission is
of the considered view that such matter is better addressed to the courts. To do
otherwise would encroach on judicial rulemaking.

Upon a careful review and evaluation of the records of the case as well as the
prevailing circumstances attendant thereto, this Commission resolves to allow payment
hereon, in view of the fact that the appellate body (at that time) took cognizance of the
case despite its defects. To deny payment would be defeating the purpose for
empowering the Office of the President under CA 327, among others, and vesting upon
it statutory authority to rule on appellate issues elevated by parties aggrieved by
decisions rendered by the then General Auditing Office. Consequently, allowing
payment hereon is more in keeping with the legislative intent.

WHEREFORE, premises considered, this Commission hereby resolves to take


cognizance of the findings of the Office of the President in Decision No. 2973, dated
June 26, 1979, approving the request of the Director of Public Works for authority to pay
directly to Willie Quetolio Construction for its work on the Librada Outfall Flood Control
Project at Paranaque, Metro Manila, on the basis of quantum meruit and further
stresses that this case should not be considered as a precedent for other cases similarly
situated.

Quezon City, Philippines, July 24, 1980.

(SGD.) FRANCISCO S. TANTUICO, JR., Acting Chairman


(SGD.) SILVESTRE D. SARMIENTO, Commissioner

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