GR L 9832; (November, 1957) (Digest)
G.R. No. L-9832; November 29, 1957
BENIGNO C. GUTIERREZ, plaintiff-appellant, vs. THE INSULAR LIFE ASSURANCE CO., LTD., defendant-appellee.
FACTS
The plaintiff-appellant, Benigno C. Gutierrez, filed an action for damages against the defendant-appellee, The Insular Life Assurance Co., Ltd. The complaint alleged that the appellant was the lowest bidder for the electrical wiring construction of the appellee’s proposed building. Despite this, the appellee awarded the contract to the second lowest bidder without any valid reason and despite a significant difference in their bids, causing the appellant to suffer actual and moral damages. The appellee filed a motion to dismiss the complaint, arguing it failed to state a cause of action under Article 1326 of the Civil Code. The Court of First Instance of Manila granted the motion and dismissed the complaint.
ISSUE
Whether the complaint alleges a sufficient cause of action against the appellee for its refusal to award the contract to the appellant, the lowest bidder.
RULING
No. The order of dismissal is affirmed. Under Article 1326 of the Civil Code, advertisements for bidders are merely invitations to make proposals. The advertiser is not obligated to accept the highest or lowest bid unless it expressly states otherwise. The complaint contained no allegation showing that the appellee, in inviting bids, held out that the contract would be awarded to the lowest bidder. Therefore, no enforceable right in favor of the appellant was established. The appellant’s arguments—that the requirement of a bid bond implied an agreement to award to the lowest bidder, and that he is entitled to damages for his preparation costs under general principles of equity—are unavailing. The complaint did not allege the filing of a bond, and even if it did, such a bond merely qualified a bidder to submit a proposal and did not alter the legal rule that the advertiser is not bound to accept any bid. Any expenditures incurred by the appellant in preparing his bid were made voluntarily, with the knowledge that he was taking a chance under the specific rules of the bidding.