G.R. No. L-8847; October 31, 1957
PEDRO P. RIVERA, petitioner, vs. MUNICIPALITY OF MALOLOS, respondent.

FACTS

In August 1949, the Municipality of Malolos, Bulacan, called for public bids for road construction materials. Petitioner Pedro P. Rivera submitted the lowest bid. On August 28, 1949, the acting municipal treasurer informed Rivera that the contract was awarded to him. On August 31, 1949, a contract was signed by the municipal mayor and Rivera, stipulating that Rivera would furnish and deliver 2,700 cubic meters of crushed adobe stone and 1,400 cubic meters of gravel for P19,235. Rivera made the deliveries to designated places. On July 29, 1950, Rivera wrote to the municipal treasurer requesting payment, noting the fiscal year had expired, and asked for the obligation to be included in the next year’s appropriations. On August 2, 1950, the municipal treasurer’s office informed Rivera that the Municipal Council agreed to treat the amount as a standing obligation, authorizing payment when funds were available. On October 16, 1951, the municipal council passed Resolution No. 68 ratifying the public bidding and the contract. Rivera filed a complaint in the Court of First Instance of Bulacan on October 30, 1951, to collect P19,235. The court dismissed the case without prejudice on January 8, 1954. Rivera then sought the intervention of the Presidential Complaints and Action Committee, which forwarded his claim to the Auditor General. The Auditor General denied the claim on January 14, 1955, on the grounds that there was no appropriation to meet the obligation before the contract’s execution as required by law, rendering the contract void under the Revised Administrative Code, and that the deliveries could no longer be verified by the Provincial Auditor. Rivera’s motion for reconsideration was denied. Rivera petitioned the Supreme Court for review.

ISSUE

Whether the contract entered into by the municipal mayor of Malolos with Pedro P. Rivera for the supply of road construction materials is valid and enforceable, and whether the Auditor General correctly denied Rivera’s claim for payment.

RULING

The Supreme Court affirmed the decision of the Auditor General denying the claim. The contract entered into by the municipal mayor was not in accordance with law. Before a municipality can validly enter into a contract involving expenditure, the law requires that there must be an appropriation of municipal funds to meet the obligation, certified by the municipal treasurer as available. The contract in question was entered into contrary to these requirements and was therefore void. Furthermore, the law requires that the provincial auditor or his representative must check deliveries made under a valid contract; no such check was conducted here. The Court also held that the allocation of funds under the Motor Vehicle Law ( Act No. 3992 ) for municipal roads does not constitute a sufficient appropriation or authority to disburse funds for paying Rivera’s claim. The petitioner’s remedy lies under Section 608 of the Revised Administrative Code. The decision under review was affirmed without costs.