J.A.B. Bulao & Associates

LEGAL NOTE 0026-A: EXCEPTION TO THE RULE ON EXHAUSTION OF ADMINSTRATIVE REMEDIES. 

SOURCE: GREGORIO R. VIGILAR, SECRETARY OF THE DEPARTMENT OF PUBLIC WORKS AND HIGHWAYS (DPWH), DPWH UNDERSECRETARIES TEODORO E. ENCARNACION AND EDMUNDO E. ENCARNACION AND EDMUNDO V. MIR, DPWH ASSISTANT SECRETARY JOEL L. ALTEA, DPWH REGIONAL DIRECTOR VICENTE B. LOPEZ, DPWH DISTRICT ENGINEER ANGELITO M. TWAÑO, FELIX A. DESIERTO OF THE TECHNICAL WORKING GROUP VALIDATION AND AUDITING TEAM, AND LEONARDO ALVARO, ROMEO N. SUPAN, VICTORINO C. SANTOS OF THE DPWH PAMPANGA 2^ND ENGINEERING DISTRICT VS. ARNULFO D. AQUINO (G.R. No. 180388, 18 JANUARY 2011, SERENO, J.) SUBJECTS: EXCEPTION TO EXHAUSTION OF ADMIN REMEDIES; GOVT IMMUNITY FROM SUIT NOT APPLIED. (BRIEF TITLE: VIGILAR ET AL VS. AQUINO)

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AQUINO SUED DPWH IN COURT FOR COLLECTION. DPWH ARGUES THAT AQUINO SHOULD HAVE FIRST EXHAUSTED ADMIN REMEDIES BY FILING ITS CLAIM AT COA. IS DPWH CORRECT.

THE DEFENSE OF DPWH IS NOT CORRECT. 

 AQUINO’S CASE FALSE UNDER THE EXCEPTIONS TO THE RULE ON EXHAUSTION OF ADMIN REMEDIES BECAUSE THERE IS UNREASONABLE DELAY OR OFFICIAL INACTION THAT WILL IRRETRIEVABLY PREJUDICE THE COMPLAINANT AND THE QUESTION INVOLVED IS PURELY LEGAL AND WILL ULTIMATELY HAVE TO BE DECIDED BY THE COURTS OF JUSTICE.

Said the Court:

Firstly, petitioners claim that the Complaint filed by respondent before the Regional Trial Court was done without exhausting administrative remedies. Petitioners aver that respondent should have first filed a claim before the Commission on Audit (COA) before going to the courts. However, it has been established that the doctrine of exhaustion of administrative remedies and the doctrine of primary jurisdiction are not ironclad rules. In Republic of the Philippines v. Lacap,^[1][9] this Court enumerated the numerous exceptions to these rules, namely: (a) where there is estoppel on the part of the party invoking the doctrine; (b) where the challenged administrative act is patently illegal, amounting to lack of jurisdiction; (c) where there is unreasonable delay or official inaction that will irretrievably prejudice the complainant; (d) where the amount involved is relatively so small as to make the rule impractical and oppressive; (e) where the question involved is purely legal and will ultimately have to be decided by the courts of justice; (f) where judicial intervention is urgent; (g) where the application of the doctrine may cause great and irreparable damage; (h) where the controverted acts violate due process; (i) where the issue of non-exhaustion of administrative remedies has been rendered moot; (j) where there is no other plain, speedy and adequate remedy; (k) where strong public interest is involved; and (l) in quo warranto proceedings. In the present case, conditions (c) and (e) are present.

The government project contracted out to respondent was completed almost two decades ago. To delay the proceedings by remanding the case to the relevant government office or agency will definitely prejudice respondent.

More importantly, the issues in the present case involve the validity and the enforceability of the “Contract of Agreement” entered into by the parties. These are questions purely of law and clearly beyond the expertise of the Commission on Audit or the DPWH. In Lacap, this Court said:

… It does not involve an examination of the probative value of the evidence presented by the parties. There is a question of law when the doubt or difference arises as to what the law is on a certain state of facts, and not as to the truth or the falsehood of alleged facts. Said question at best could be resolved only tentatively by the administrative authorities. 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. (Emphasis supplied.)

LEGAL NOTE 0026: CONTRUCTOR SUED DPWH. CAN HE SUE WITHOUT FIRST EXHAUSTING ADMIN REMEDIES? CAN CONTRACTOR BE PAID EVEN IF HE DID NOT COMPLY WITH PD1445? CAN DPWH INVOKE THE DOCTRINE OF THE NON-SUABILITY OF THE STATE?

SOURCE: GREGORIO R. VIGILAR, SECRETARY OF THE DEPARTMENT OF PUBLIC WORKS AND HIGHWAYS (DPWH), DPWH UNDERSECRETARIES TEODORO E. ENCARNACION AND EDMUNDO E. ENCARNACION AND EDMUNDO V. MIR, DPWH ASSISTANT SECRETARY JOEL L. ALTEA, DPWH REGIONAL DIRECTOR VICENTE B. LOPEZ, DPWH DISTRICT ENGINEER ANGELITO M. TWAÑO, FELIX A. DESIERTO OF THE TECHNICAL WORKING GROUP VALIDATION AND AUDITING TEAM, AND LEONARDO ALVARO, ROMEO N. SUPAN, VICTORINO C. SANTOS OF THE DPWH PAMPANGA 2^ND ENGINEERING DISTRICT VS. ARNULFO D. AQUINO (G.R. No. 180388, 18 JANUARY 2011, SERENO, J.) SUBJECTS: EXCEPTION TO EXHAUSTION OF ADMIN REMEDIES; GOVT IMMUNITY FROM SUIT NOT APPLIED. (BRIEF TITLE: VIGILAR ET AL VS. AQUINO)

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THE CASE STORY:

AQUINO CONSTRUCTED A DIKE BULLDOZING A PART OF THE PORAC RIVER IN JULY 1992. HE FILED  A COLLECTION CASE AGAINST DPWH ET AL. THE DEFENSES OF DPWH ARE: NON-SUABILITY OF THE STATE; FAILURE OF AQUINO TO EXHAUST ADMIN REMEDIES AND HIS FAILURE TO COMPLY WITH PD 1445. RTC AND CA RULED IN FAVOR OF AQUINO. SC AFFIRMED.

THE DOCTRINES:

DPWH ARGUES THAT AQUINO SHOULD HAVE EXHAUSTED ADMIN REMEDIES BY FIRST FILING ITS CLAIM AT COA.

SC SAID, AQUINO’S CASE FALSE UNDER THE EXCEPTIONS TO THE RULE ON EXHAUSTION OF ADMIN REMEDIES BECAUSE THERE IS UNREASONABLE DELAY OR OFFICIAL INACTION THAT WILL IRRETRIEVABLY PREJUDICE THE COMPLAINANT AND THE QUESTION INVOLVED IS PURELY LEGAL AND WILL ULTIMATELY HAVE TO BE DECIDED BY THE COURTS OF JUSTICE.

Said the Court:

Firstly, petitioners claim that the Complaint filed by respondent before the Regional Trial Court was done without exhausting administrative remedies. Petitioners aver that respondent should have first filed a claim before the Commission on Audit (COA) before going to the courts. However, it has been established that the doctrine of exhaustion of administrative remedies and the doctrine of primary jurisdiction are not ironclad rules. In Republic of the Philippines v. Lacap,^[1][9] this Court enumerated the numerous exceptions to these rules, namely: (a) where there is estoppel on the part of the party invoking the doctrine; (b) where the challenged administrative act is patently illegal, amounting to lack of jurisdiction; (c) where there is unreasonable delay or official inaction that will irretrievably prejudice the complainant; (d) where the amount involved is relatively so small as to make the rule impractical and oppressive; (e) where the question involved is purely legal and will ultimately have to be decided by the courts of justice; (f) where judicial intervention is urgent; (g) where the application of the doctrine may cause great and irreparable damage; (h) where the controverted acts violate due process; (i) where the issue of non-exhaustion of administrative remedies has been rendered moot; (j) where there is no other plain, speedy and adequate remedy; (k) where strong public interest is involved; and (l) in quo warranto proceedings. In the present case, conditions (c) and (e) are present.

The government project contracted out to respondent was completed almost two decades ago. To delay the proceedings by remanding the case to the relevant government office or agency will definitely prejudice respondent.

More importantly, the issues in the present case involve the validity and the enforceability of the “Contract of Agreement” entered into by the parties. These are questions purely of law and clearly beyond the expertise of the Commission on Audit or the DPWH. In Lacap, this Court said:

… It does not involve an examination of the probative value of the evidence presented by the parties. There is a question of law when the doubt or difference arises as to what the law is on a certain state of facts, and not as to the truth or the falsehood of alleged facts. Said question at best could be resolved only tentatively by the administrative authorities. 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. (Emphasis supplied.)

DPWH ARGUES THAT AQUINO FAILED TO COMPLY WITH PD 1445.

SC RULED THAT EVEN IF AQUINO  VIOLATED PD 1445, STILL EQUITY AND PUBLIC INTEREST DEMAND THAT AQUINO BE PAID.

Secondly, in ordering the payment of the obligation due respondent on a quantum meruit basis, the Court of Appeals correctly relied on Royal Trust Corporation v. COA,^[2][10] Eslao v. COA,^[3][11] Melchor v. COA,^[4][12] EPG Construction Company v. Vigilar,^[5][13] and Department of Health v. C.V. Canchela & Associates, Architects.^[6][14] All these cases involved government projects undertaken in violation of the relevant laws, rules and regulations covering public bidding, budget appropriations, and release of funds for the projects. Consistently in these cases, this Court has held that the contracts were void for failing to meet the requirements mandated by law; public interest and equity, however, dictate that the contractor should be compensated for services rendered and work done.

Specifically, C.V. Canchela & Associates is similar to the case at bar, in that the contracts involved in both cases failed to comply with the relevant provisions of Presidential Decree No. 1445 and the Revised Administrative Code of 1987. Nevertheless, “(t)he illegality of the subject Agreements proceeds, it bears emphasis, from an express declaration or prohibition by law, not from any intrinsic illegality.  As such, the Agreements are not illegal per se, and the party claiming thereunder may recover what had been paid or delivered.”^[7][15]

The government project involved in this case, the construction of a dike, was completed way back on 9 July 1992. For almost two decades, the public and the government benefitted from the work done by respondent. Thus, the Court of Appeals was correct in applying Eslao to the present case. In Eslao, this Court stated:

…the Court finds that the contractor should be duly compensated for services rendered, which were for the benefit of the general public. To deny the payment to the contractor of the 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 on the basis of quantum meruit. (Emphasis supplied.)

DPWH ARGUES THAT THE STATE IS IMMUNED FROM SUIT.

SC RULED THAT THE DOCTRINE ON IMMUNITY FROM SUIT CANNOT BE USED AS AN INSTRUMENT TO PERPETUATE INJUSTICE.

Neither can petitioners escape the obligation to compensate respondent for services rendered and work done by invoking the state’s immunity from suit.  This Court has long established in Ministerio v. CFI of Cebu,^[8][16] and recently reiterated in Heirs of Pidacan v. ATO,^[9][17] that the doctrine of governmental immunity from suit cannot serve as an instrument for perpetrating an injustice to a citizen. As this Court enunciated in EPG Construction:^[10][18]

To our mind, it would be the apex of injustice and highly inequitable to defeat respondent’s right to be duly compensated for actual work performed and services rendered, where both the government and the public have for years received and accepted benefits from the project and reaped the fruits of respondent’s honest toil and labor.

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Under these circumstances, respondent may not validly invoke the Royal Prerogative of Dishonesty and conveniently hide under the State’s cloak of invincibility against suit, considering that this principle yields to certain settled exceptions. True enough, the rule, in any case, is not absolute for it does not say that the state may not be sued under any circumstance.

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Although the Amigable and Ministerio cases generously tackled the issue of the State’s immunity from suit vis a vis the payment of just compensation for expropriated property, this Court nonetheless finds the doctrine enunciated in the aforementioned cases applicable to the instant controversy, considering that the ends of justice would be subverted if we were to uphold, in this particular instance, the State’s immunity from suit.

To be sure, this Court — as the staunch guardian of the citizens’ rights and welfare — cannot sanction an injustice so patent on its face, and allow itself to be an instrument in the perpetration thereof. Justice and equity sternly demand that the State’s cloak of invincibility against suit be shred in this particular instance, and that petitioners-contractors be duly compensated — on the basis of quantum meruit — for construction done on the public works housing project. (Emphasis supplied.)

 LEGAL NOTE 0025: PRIMER FOR JUDGES RE  DEADLINE FOR DECIDING/RESOLVING CASES/MOTIONS.

 SOURCE: OFFICE OF THE COURT ADMINISTRATOR VS. FORMER JUDGE LEONARDO L. LEONIDA, OF THE REGIONAL TRIAL COURT BRANCH 27, STA. CRUZ, LAGUNA (A.M. NO. RTJ-09-2198, 18 JANUARY 2011, CORONA, C.J) SUBJECT: FAILURE OF JUDGE TO DECIDE CASES WITHIN THE REGLEMENTARY PERIOD. (BRIEF TITLE: OCA VS. JUDGE LEONIDA)

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JUDGE LEONIDA FAILED TO RESOLVE MOTIONS IN TEN (10) CIVIL CASES; DECIDE ELEVEN (11) CRIMINAL CASES, AND TWENTY-SEVEN (27) CIVIL CASES IN BRANCH 27, AND TO DECIDE NINETY-ONE (91) CRIMINAL CASES AND SIXTEEN (16) CIVIL CASES IN BRANCH 74 WITHIN THE REGLEMENTARY PERIOD. WHAT IS HIS OFFENSE AND PENALTY?

JUDGE LEONIDA IS GUILTY OF GROSS INCOMPETENCY AND INEFFICIENCY. SC FINED HIM P50,000.00 PESOS TO BE DEDUCTED FROM HIS RETIREMENT BENEFITS.

WHAT ARE THE EFFECTS OF THE FAILURE OF A JUDGE TO DECIDE A CASE WITHIN THE REGLEMENTARY PERIOD?

IT DEPRIVES LITIGANT OF THE RIGHT TO SPEEDY DISPOSITION OF HIS CASE;

IT MAGNIFIES COST OF SEEKING JUSTICE;

IT UNDERMINES PEOPLE’S FAITH AND CONFIDENCE IN THE JUDICIARY; AND

IT LOWERS ITS STANDARDS AND BRINGS IT TO DISREPUTE.

Precedents have shown that the failure of a judge to decide a case within the reglementary period warrants administrative sanction.  The Court treats such cases with utmost rigor for any delay in the administration of justice; no matter how brief, deprives the litigant of his right to a speedy disposition of his case.^[1][14] Not only does it magnify the cost of seeking justice; it undermines the people’s faith and confidence in the judiciary, lowers its standards and brings it to disrepute.^[2][15]

HOW LONG IS THE REGLEMENTARY PERIOD?

90 DAYS FROM DATE OF SUBMISSION.

No less than Section 15 (1), Article 8 of the 1987 Constitution mandates that all cases or matters filed before all lower courts shall be decided or resolved within three (3) months from the date of submission.  The prescribed period is a firm mandatory rule for the efficient administration of justice and not merely one for indulgent tweaking.

WHAT IS THE NATURE OF SUCH DEADLINE?

MANDATORY.

As a general principle, rules prescribing the time within which certain acts must be done, or certain proceedings taken, are considered absolutely indispensable to the prevention of needless delays and for the orderly and speedy discharge of judicial business. By their very nature, these rules are regarded as mandatory.^[3][16]

WHAT IS THE BASIS?

THE CODE OF JUDICIAL CONDUCT AND ADMIN CIRCULAR DATED 15 JANUARY 1999

 In the same vein, Canon 3, Rule 3.05 of the Code of Judicial Conduct is emphatic in enjoining judges to administer justice without delay by disposing of the court’s business promptly and deciding cases within the period prescribed by law.

Corollary to this, Administrative Circular No. 3-99 dated January 15, 1999, requires all judges to scrupulously observe the periods prescribed in the Constitution for deciding cases, because failure to comply therewith violates the constitutional right of the parties to speedy disposition of the cases.^[4][17] Only in certain meritorious cases, that is, those involving difficult questions of law or complex issues, may a longer period to decide the case be allowed but only upon proper application for extension of the period has been made by the concerned judge.^[5][18] 

IF JUDGE FAILS TO DECIDE WITHIN THE REQUIRED PERIOD, WHAT IS HIS OFFENSE?

GROSS INEFFICIENCY.

The Court has always considered a judge’s delay in deciding cases within the prescribed period of three months as gross inefficiency.^[6][21]   Undue delay cannot be countenanced at a time when the clogging of the court dockets is still the bane of the judiciary.  The raison d’ etre of courts lies not only in properly dispensing justice but also in being able to do so seasonably.^[7][22]

WHAT MUST JUDGES OBSERVE IN CONNECTION WITH SAID DEADLINE?

EFFICIENCY WITH PROBITY.

The administration of justice demands that those who don judicial robes be able to comply fully and faithfully with the task set before them.^[8][24] As frontline officials of the judiciary, judges should, at all times, act with efficiency and with probity.  They are duty-bound not only to be faithful to the law, but likewise to maintain professional competence.  The pursuit of excellence must be their guiding principle. This is the least that judges can do to sustain the trust and confidence which the public reposed on them and the institution they represent. ^[9][25]