G.R. No. 222423 . February 20, 2019.
METROPOLITAN MANILA DEVELOPMENT AUTHORITY, Petitioner, vs. D.M. CONSUNJI, INC. and R-II BUILDERS, INC., Respondents.

FACTS

The Metropolitan Manila Development Authority (MMDA) initiated a process for an interim waste disposal project. The project was awarded to the joint venture of D.M. Consunji, Inc. (DMCI) and R-II Builders, Inc. (R-II Builders). The parties executed a “Contract for the Development, Operation and Maintenance of Interim Integrated Waste Management Facility for Metropolitan Manila” on January 4, 2001. The contract required the approval of the President of the Philippines to become valid and binding, which approval was never obtained. Allegedly upon instruction of the then MMDA Chairman, respondents proceeded with preparatory work. However, the operation was halted by temporary restraining orders issued by a Regional Trial Court in Antique. Respondents then demanded reimbursement from MMDA for expenses amounting to P19,920,936.17 incurred for the partial execution of the project. MMDA rejected the claim, citing the lack of Presidential approval for the contract and a contract stipulation that court actions shall not give rise to claims. Respondents filed a complaint for sum of money based on quantum meruit. The Regional Trial Court granted respondents’ motion for judgment on the pleadings and ordered MMDA to pay the claimed amount. The Court of Appeals affirmed the trial court’s decision. MMDA elevated the case to the Supreme Court via a petition for review.

ISSUE

Whether respondents’ money claim against the MMDA, based on the principle of quantum meruit for services rendered under a contract that required but never received Presidential approval, should be filed directly with the courts or with the Commission on Audit (COA).

RULING

The Supreme Court SET ASIDE the Decision and Resolution of the Court of Appeals. The Court ruled that respondents’ money claim against the MMDA, premised on quantum meruit for services rendered under a void contract, is a money claim against the government. Pursuant to settled jurisprudence and Commonwealth Act No. 327 , as amended, such claims must first be filed with the Commission on Audit (COA). The COA has primary jurisdiction to adjudicate money claims against government agencies arising from void contracts under the quantum meruit principle. The MMDA, as a government agency, cannot be sued without the State’s consent, and the doctrine of sovereign immunity applies. The proper remedy for respondents is to file their claim with the COA.