Professional Documents
Culture Documents
Lacap
Facts
The District Engineer of Pampanga, issued and duly published an invitation to bid, where Lacap was
awarded as the lowest bidder. Accordingly, the latter undertook the works, made advances for the
purchase of materials and payment for labor costs.
On October 29, 1992 the office of the DE issued Certification of Final Inspection and Acceptance for
100% completion of project in accordance with specifications.
The respondent sought to collect payment but Department of Public Works and Highways withheld
payment after the District Auditor of Commission on Audit disapproved final release of funds on the
ground that contractors license had expired.
Opinion of the DPWH Legal Department was sought by the District Engineer. The former then responded
that RA No. 4566 does not provide that a contract entered into after the license has expired is void and
that there is no law which expressly prohibits such a contract void. Furthermore, Cesar D. Mejia, Director
III of the Legal Department in a First Indorsement, recommended the payment should be made to Carwin
Construction. However, no payment was made.
On July 3, 1995, respondent filed the complaint through Office of the Solicitor General for Specific
Performance and Damages against petitioner before the RTC. Petitioner filed a Motion to Dismiss the
complaint on September 14, 1995 on the grounds that complaint states no cause of action and RTC had no
jurisdiction since respondent did not appeal to COA. RTC denied the Motion to Dismiss.
The OSG filed a Motion for Reconsideration but was likewise denied by RTC, in its order on May 23,
1996. On August 5, 1996, the OSG filed its Answer invoking defense of non-exhaustion of administrative
remedies and doctrine of non-suability of the State.
Following the trial, the RTC rendered on February 19, 1997 its decision ordering the DPWH to pay the
contract price plus interest at 12% from demand until fully paid and the costs of the suit.
Issue: Whether or not a contractor with an expired license at the time of execution of its contract is
entitled to be paid for completed projects?
Held:
Yes. The petitioner must be required to pay the contract price since it has accepted the completed project
and enjoyed the benefits thereof. To allow petitioner to acquire the finished project at no cost would
undoubtedly constitute unjust enrichment for the petitioner to the prejudice of respondent. Such unjust
enrichment is not allowed by law.
FACTS: On February 22, 1983, petitioner MHP Garments, Inc., was awarded by the Boy Scouts of the
Philippines, the exclusive franchise to sell and distribute official Boy Scouts uniforms, supplies, badges,
and insignias. In their Memorandum Agreement, petitioner corporation was given the authority to
"undertake or cause to be undertaken the prosecution in court of all illegal sources of scout uniforms and
other scouting supplies." Sometime in October 1983, MHP received information that respondents were
selling Boy Scout items and paraphernalia. Larry De Guzman, employee of MHP, was then tasked to
undertake the necessary surveillance and to make a report to the Philippine Constabulary.
On October 25, 1983, at about 10:30 A.M., petitioner and constabulary men of the Reaction Force
Battalion went to the stores of respondents and seized the boy and girl scouts pants, dresses and suits on
display at respondents stalls without any warrant. The seizure caused a commotion and embarrassed
private respondents. Receipts were issued for the seized items. The items were then turned over by
Captain Peafiel to petitioner corporation for safekeeping.
A criminal complaint for unfair competition was then filed against private respondents. During its
pendency, petitioner de Guzman exacted from private respondent Lugatiman P3,100.00 in order to be
dropped from the complaint. On December 6, 1983, the Provincial Fiscal of Rizal dismissed the
complaint. On February 6, 1984, he also ordered the return of the seized items. The seized items were not
immediately returned despite demands. 3 Private respondents had to go personally to petitioners' place of
business to recover their goods. Even then, not all the seized items were returned. The other items
returned were of inferior quality.
A civil case for sums of money and damages was filed by the private respondents against the petitioners.
The RTC ruled in favor of respondent which was later affirmed by CA.
Issue:
Did CA err in imputing liability for damages to petitioners?
Held:
No. The petitioners did not apply for a warrant despite the sufficiency of time. They seized the goods of
private respondents and in doing so, they took the risk of a suit for damages in case the seizure would be
proved to violate the right of private respondents against unreasonable search and seizure.
The raid was conducted with the active participation of petitioners employee. De Guzman did not lift a
finger to stop the seizure. By standing by and apparently assenting thereto, he was liable to the same
extent as the officers themselves. The nature of Article 32 is that the wrong maybe civil or criminal. It is
not necessary that there should be malice or bad faith. To make such a requisite would defeat the main
purpose of Article 32 which is the effective protection of individual rights.