GR 204835; (September, 2015) (Digest)
G.R. No. 204835 , September 22, 2015
MOVERTRADE CORPORATION, PETITIONER, VS. THE COMMISSION ON AUDIT AND THE DEPARTMENT OF PUBLIC WORKS AND HIGHWAYS, RESPONDENTS.
FACTS
On February 7, 1996, petitioner Movertrade Corporation and respondent DPWH entered into a Contract Agreement for dredging and related works in Pampanga Bay and the primary Pasac-Guagua-San Fernando Waterways in Pampanga, amounting to ₱188,698,000.00. The contract specifically required dredge spoils to be dumped at pre-designated spoil sites to prevent them from spilling back into the channel. During project implementation, petitioner requested permission to undertake “side dumping” (dumping within the river) due to alleged absence of spoil sites. This request was denied in writing by DPWH Director Florante Soriquez on August 18, 1997, and again on October 1, 1997, with instructions to use available spoil sites like Pascual “A,” Pascual “B,” and the Regala fishpond. Despite these explicit prohibitions, petitioner continued side dumping. Upon project completion, DPWH paid petitioner ₱180,029,910.15 but withheld ₱7,354,897.10, representing payment for 165,576.27 cubic meters of dredging work done through unauthorized side dumping. Petitioner’s subsequent demand for payment led to the creation of a DPWH Ad Hoc Committee, which initially recommended payment but this was not approved by the DPWH Secretary. Petitioner then filed a money claim with the Commission on Audit (COA) on February 19, 2010.
ISSUE
Whether petitioner is entitled to payment of ₱7,354,897.10 for dredging works performed through side dumping, despite explicit contractual prohibition and written denials of its request to side dump.
RULING
No. The Supreme Court denied the petition and affirmed the COA Decision. The Court held that petitioner breached its contract with DPWH by willfully performing side dumping despite clear and repeated written prohibitions from the implementing office. The contract (Paragraph 11) expressly required dumping at designated spoil sites. The principle of quantum meruit does not apply because there exists a written contract governing the parties’ relations; it is a principle applicable only in the absence of a contract. Petitioner, having violated the contract terms, must bear the loss. The Court found no grave abuse of discretion on the part of COA in denying the money claim for lack of merit.