G.R. No. 122196 January 15, 1997
F. F. MAÑACOP CONSTRUCTION CO., INC., petitioner, vs. COURT OF APPEALS and THE MANILA INTERNATIONAL AIRPORT AUTHORITY, respondents.

FACTS

Petitioner F.F. Mañacop Construction Co., Inc. commenced construction of a perimeter fence for respondent Manila International Airport Authority (MIAA) in September 1985 based on a quotation, even prior to the formal signing of a Notice to Proceed, due to the urgency of preventing squatting. The project was 95% complete when it was halted by MIAA’s new general manager after the February 1986 revolution. Petitioner repeatedly demanded payment for the completed work worth P282,068.00 but was ignored for two years, compelling it to file a collection case.
The trial court found that petitioner indeed rendered services and, in the absence of a written contract, awarded payment on a quantum meruit basis in the amount of P238,501.48, as evaluated by MIAA itself, plus attorney’s fees due to MIAA’s bad faith. On appeal, MIAA argued for the first time that the computation of the amount due should be referred to the Commission on Audit (COA), citing Eslao v. Commission on Audit. The Court of Appeals agreed and set aside the trial court’s decision, ordering the referral to COA.

ISSUE

Whether the Court of Appeals erred in taking cognizance of the issue regarding referral to the COA, which was raised for the first time on appeal, and whether payment on a quantum meruit basis is proper.

RULING

The Supreme Court reversed the Court of Appeals. While the general rule precludes raising an issue for the first time on appeal, the Court may consider it for a complete resolution, especially when it involves the disposition of public funds and a constitutional duty of the COA. On the merits, the Court held that payment on a quantum meruit basis is justified.
The legal logic is anchored on the existence of a quasi-contract and the applicability of the principles in Eslao. The Court enumerated specific circumstances present: the quasi-contract was not fraudulent; the project had a specific appropriation; an implied obligation to pay exists; the subject matter was within MIAA’s contractual powers; the project fell under exemptions from public bidding due to urgency and adjacency to an ongoing project; petitioner substantially complied in good faith; equity supports the claim as MIAA benefits from the fence; there is no proof of collusion; and payment is limited to actual costs chargeable against certified funds. These circumstances collectively negate fraud and validate recovery based on the reasonable value of the benefit conferred. The referral to COA was thus unnecessary, and the trial court’s award based on MIAA’s own evaluation is reinstated.