FIRST DIVISION
[G.R. No. 210029. November 20, 2017.]
REPUBLIC OF THE PHILIPPINES, REPRESENTED BY THE DEPARTMENT OF PUBLIC WORKS AND HIGHWAYS [DPWH], petitioner, vs.DAVAO CONTRACTORS DEVELOPMENT COOPERATIVE [DACODECO], respondent.
NOTICE
Sirs/Mesdames :
Please take notice that the Court, First Division, issued a Resolution datedNovember 20, 2017, which reads as follows: AcICHD
"G.R. No. 210029 — Republic of the Philippines, represented by the Department of Public Works and Highways [DPWH] vs. Davao Contractors Development Cooperative [DACODECO].
Petitioner, thru the Office of the Solicitor General, assails the Decision 1 dated July 27, 2011 and Resolution 2 dated November 11, 2013 of the Court of Appeals (CA) in CA-G.R. SP No. 02719, which affirmed the ruling of the Regional Trial Court (RTC) of Davao City, Branch 10, denying petitioner's Motion to Dismiss for lack of cause of action.
In 2006, Barangay Captain Custodio D. Luayon, Jr. (Luayon, Jr.) of Barangay New Clarin and Barangay Captain Primitivo Martel (Martel) of Barangay Bonifacio awarded to respondent Davao Contractors Development Cooperative (DACODECO) the project for the construction of their respective water systems in Bansalan, Davao del Sur. 3
DACODECO proceeded with the construction of both projects. However, after it allegedly completed 45% of each project, District Engineer Orlando N. Hernani, Jr. (District Engr. Hernani) of the Department of Public Works and Highway (DPWH) ordered DACODECO to discontinue with the project since Barangay Captains Luayo, Jr. and Martel had no authority to award the implementation of the water system project to it or to any other contractor. 4
After being assured by Barangay Captain Martel and District Engineer Hernani that it will be commensurately paid of its accomplishments, DACODECO complied with DPWH's order. 5
Subsequently, a bidding was conducted by DPWH for the construction of the subject water systems. Davao Concrete Products (DCP) emerged as the winner. 6
DACODECO learned that DPWH began to process the payment to DCP without any provision as regards Barangay Captain Martel and District Engineer Hernani's payment commitment. 7
Consequently, DACODECO filed two separate cases for Injunction, Sum of Money, Attorney's Fees, and Costs of Litigation with Urgent Application for Temporary Restraining Order and Writ of Preliminary Injunction against the barangay council of Barangays New Clarin and Bonifacio, DCP, and District Engineer Hernani of DPWH in the RTC of Davao City, Branch 10, in Civil Case Nos. 31-708-07 8 and 31-709-07. 9
The District Engineer of DPWH filed a Motion to Dismiss, 10 stressing that the complaint states no cause of action because DPWH is not a party to the contract of construction of the subject water systems.
In an Order 11 dated August 1, 2008, the RTC denied the Motion and ruled that DPWH, being the implementing agency of the water system projects in Barangays New Clarin and Bonifacio, processes the payments of said water works. As such, DACODECO may enjoin DPWH's payment to DCP. The fallo thereof reads:
Based on the foregoing, this Court holds that the Motion to Dismiss is not meritorious. For lack of merit, the Motion to Dismiss is DENIED.
SO ORDERED. 12
Aggrieved, the District Engineer of DPWH filed a Motion for Reconsideration, 13 which was denied in an Order 14 dated October 27, 2008. The dispositive portion states:
Thus, for lack of merit the Motion for Reconsideration is DENIED.
SO ORDERED. 15
In a petition 16 for certiorari filed by the petitioner, represented by DPWH, the CA sustained the denial of the Motion to Dismiss and rendered the assailed Decision 17 dated July 27, 2011. The dispositive portion thereof reads:
FOR REASONS STATED, the Petition for Certiorari is DENIED.
SO ORDERED. 18
A Motion for Reconsideration 19 was filed, which was denied in the assailed Resolution 20 dated November 11, 2013.
Petitioner argues that the complaint should have been dismissed for lack of cause of action because it is not a party to the award of construction contracts and in the bidding process conducted by the barangay officials of Barangays New Clarin and Bonifacio in favor of DACODECO.
Without going into the merits of the case, We resolve to deny the petition. TAIaHE
Inarguably, petitioner is not a party to the contract of constructing the subject water works between the barangay captains and DACODECO. In fact, DPWH, upon learning the construction of the same, ordered DACODECO to halt their operation as it argued that the barangay captains have no authority to hire DACODECO.
However, it cannot be denied that the absence of a contract between DACODECO and DPWH would not prohibit the former from suing under Article 2142 of the Civil Code of the Philippines.
Quasi-contract under Article 2142 of the Civil Code provides that:
Certain lawful, voluntary and unilateral acts give rise to the juridical relation of quasi-contract to the end that no one shall be unjustly enriched or benefited at the expense of another.
In the case of Philippine National Bank v. CA, 21 We declared that "even as Article 2142 of the Civil Code defines a quasi-contract, the succeeding article provides that: the provisions for quasi-contracts in this Chapter do not exclude other quasi-contracts which may come within the purview of the preceding article." 22
However, even though quasi-contract is defined under Article 2142 of the Civil Code, Article 2143 did not exclude other quasi-contracts which may come within the purview of Article 2142. In the case of PNB, We declared that:
[T]he Civil Code does not confine itself exclusively to the quasi-contracts enumerated from Articles 2144 to 2175 but is open to the possibility that, absent a pre-existing relationship, there being neither crime nor quasi-delict, a quasi-contractual relation may be forced upon the parties to avoid a case of unjust enrichment. There being no express consent, in the sense of a meeting of minds between the parties, there is no contract to speak of. However, in view of the peculiar circumstances or factual environment, consent is presume to the end that a recipient of benefits or favors resulting from lawful, voluntary and unilateral acts of another may not be unjustly enriched at the expense of another. 23
Hence, We cannot give merit to the resolution of the OSG that the circumstances prevailing in this case do not come within the operation of Article 2142. OSG opines that the acts of DACODECO are not considered as "voluntary and unilateral" because it could not have commenced its operation were it not for the existence of the contracts entered into by it with the barangay captains. However, to repeat, quasi-contracts include those acts executed even in the absence of a pre-existing contract between the parties, but would nonetheless result into benefits.
In this case, We affirm the findings of the CA that the principle of quasi-contract may be applied to avoid inequity. Although DPWH is not a party to the contract between DACODECO and the barangay captains, benefits would necessarily result from the construction of the water systems, though partly.
As noted by the CA, the OSG admitted that the DPWH is the implementing agency of the subject water works projects and in turn, it processes the payment for the same. To allow DPWH to award the full amount of the subject projects to DCP without ascertaining its ultimate liability to DACODECO would amount to unjust enrichment and inequity. With these, the denial of the Motion to Dismiss was proper.
WHEREFORE, the petition is hereby DENIED. Accordingly, the Decision dated July 27, 2011 and Resolution dated November 11, 2013 of the Court of Appeals in CA-G.R. SP No. 02719 are AFFIRMED in toto. (Jardeleza, J., no part in view of his prior action in the Office of the Solicitor General; Peralta, J., designated additional Member per Raffle dated October 2, 2017.)
SO ORDERED."
Very truly yours,
(SGD.) EDGAR O. ARICHETADivision Clerk of Court
Footnotes
1. Penned by Associate Justice Edgardo T. Lloren, concurred in by Associate Justices Romulo V. Borja and Carmelita Salandanan-Manahan; rollo, pp. 34-38.
2.Id. at 39-42.
3.Id. at 35.
4.Id. at 35-36.
5.Id. at 35.
6.Id. at 89.
7.Id.
8.Id. at 88-93.
9.Id. at 100-107.
10.Id. at 130-134.
11. Penned by Presiding Judge Jose Emmanuel M. Castillo; id. at 135.
12.Id. at 135.
13.Id. at 136-140.
14.Id. at 147-148.
15.Id. at 148.
16.Id. at 149-165.
17.Id. at 34-38.
18.Id. at 38.
19.Id. at 50-63.
20.Id. at 39-42.
21. 291 Phil. 356 (1993).
22. Article 2143 of the Civil Code of the Philippines; id. at 365.
23. Id.