It was after the answer key for the midterm exams was released I realized that I got a wrong answer in one of the questions in Constitutional Law 1, which I strongly believe has its own twist. The professor gave us three (3) days to submit an alternative answer, or answers different from the suggested answer in the answer key, which we think is equally correct for his consideration.
In the answer key, was this:
9. Mando Rugas was a government contractor who repaired the comfort rooms in the Municipal Hall of municipality “A”. After he finished the work, the Municipality, headed by Mayor Manda Raya, refused to pay him. What should Mando Rugas do?
a. He should sue Mayor Manda Raya to compel the said mayor to pay for the works performed.
b. He should just accept his fate because no one can sue the state
c. He should sue the Municipal Council to compel them to allocate the funds necessary to pay him for the works
d. None of the above.
(See Nessia v Fermin)
What I can remember from Nessia v Fermin is that there are actually no appropriated funds for the claim of the petitioner. Because of that, I chose “a” to be more proper. I’d like to share my arguments:
The suggested answer based on given facts in the exam is NOT on all fours with the case of Nessia vs. Fermin (G.R. No. 102918. March 30, 1993.)
- The former is about payment of works by a government contractor, the latter is about travelling expenses of a government employee.
- The former necessarily involves procurement (of works) the funding of which is more likely under “maintenance and other operating expense” of fund while the latter falls under funding category of “personal services”.
- The former necessarily involves a contract with the Mayor representing in behalf of the Municipality while the latter has no similar characteristics other than being dependent of available funding.
- The former necessitates payment of goods delivered and services rendered while the latter depends on availability of funds.
1)The former is about payment of works by a government contractor, the latter is about travelling expenses of a government employee.
It is only but logical to think that there is mutual consent between the government contractor and the municipal government and that there is a contract to deliver the obligations of both party. This is far different from the Nessia case where that thing being claimed for is reimbursement of amount incurred for his travelling expenses.
In EPG Construction Co., et al v Hon. Gregorio R. Vigilar, G.R. No. 131544, March 16, 2001 (354 SCRA 566) the Court again refused to stamp with legality [the] act of evading the payment of contracts that had been completed, and from which the government had already benefited. The Court held:
Although this Court agrees with respondent’s postulation that the “implied contracts”, which covered the additional constructions, are void, in view of violation of applicable laws, auditing rules and lack of legal requirements, we nonetheless find the instant petition laden with merit and uphold, in the interest of substantial justice, petitioners-contractors’ right to be compensated for the “additional constructions” on the public works housing project, applying the principle of quantum meruit.
If the claim of the contractor is sustained (which will surely be), there will now be a basis of the mandatory appropriation by the Sangguniang Bayan such amount fixed by Court. But this cannot happen simultaneously as validity of claim must be upheld first.
2) The former necessarily involves procurement (of works) the funding of which is more likely under “maintenance and other operating expense” of fund while the latter falls under funding category of “personal services”.
There is also a big difference in the nature and classification of funding in both cases. Repair and maintenance works will be more likely to fall under Maintenance and Other Operating expense (MOOE). In case of civil works, the funding under this class is intended to either be implemented by (1) administration or force account, or (2) by contract. It is evident that the problem involves the second one, which will be covered by a different rule – procurement.
Travelling allowances are under Personal Services (PS). Under government accounting and auditing rules, PS must not exceed 45% of the annual budget. It includes all the salaries, wages, allowances and other incidental benefits for employees. That is the main reason why some benefits like travelling allowances may be validly refused due to insufficiency of funding.
3) The former necessarily involves a contract with the Mayor representing in behalf of the Municipality while the latter has no similar characteristics other than being dependent of available funding.
As earlier mentioned, the problem in the exam involves procurement. By entering into contract, whether express or implied, the municipal government is already bound comply with procurement laws, rules and regulations. Why sue the Mayor and not the Municipal Council? Under Section 5(5) of the Revised Implementing Rules and Regulations of R.A. No. 9184:
t) Head of Procuring Entity. Refers to: x x x iii) local chief executive, for LGUs x x x (underscoring supplied)
The Mayor, being the Head of Procuring Entity shall be responsible for the approval and disapproval of the procurement process. He is also deemed as the representative of the municipal government on transactions concerning procurement without further approval from the sanggunian. This is further elaborated in DILG Opinion No. 9 s. 2006 (February 17, 2006):
[O]nce the budget for a particular contract is already authorized by the [sanggunian] via an annual or supplemental appropriation ordinance… head of procuring entity, no longer needs to secure any further authorizations from his/her sanggunian to enter into contract… as it could have not been the intent of our Congress to paralyze local government projects/contracts through circuitous or redundant procedures. (emphasis supplied)
4) The former necessitates payment of goods delivered and services rendered while the latter depends on availability of funds.
The suggested answer was probably premised in the cited case of Baldivia vs. Lota, 107 Phil. 1099 (1960):
“Indeed, respondent could have, and should have, either included the claim of petitioners herein in the general budget he is bound to submit, pursuant to section 2295 of the Revised Administrative Code, or prepared a special budget for said claim, and urged the municipal council to appropriate the sum necessary therefor. In any event, if the municipal mayor fails or refuses to make the necessary appropriation, petitioners may bring an action against the municipality for the recovery of what is due them and after securing a judgment therefor, seek a writ of mandamus against the municipal council and the municipal mayor to compel the enactment and approval of the appropriation ordinance necessary therefor (19 R.C.L. 1951-1052; 34 Am. Jur., 950-951; 35 Am. Jur., 21). (emphasis and underscoring supplied)
Problem No. 9 does not include the fact that the Mayor failed to make the necessary appropriation as required under Sec. 2295 of the Revised Administrative Code, so that a writ of mandamus against the municipal council is proper. The only thing clear in the set of facts is that Mayor Manda Raya refused to pay him. There can never be a similar excuse as in the Nessia case that the “claim could not be approved because they have exceeded the budgetary appropriations therefor”. Under Section 7 of R.A. No. 9184:
[N]o government Procurement shall be undertaken unless it is in accordance with the approved Annual Procurement Plan of the Procuring Entity.
The Annual Procurement Plan shall be approved by the Head of the Procuring Entity and must be consistent with its duly approved yearly budget. It follows that there is already an approved Annual Procurement Plan with Approved Budget for the Contract (ABC) as defined under Section 5(a) of R.A No. 9184. Following the presumption of regularity on the procurement process, excuse to pay due to insufficient funding is untenable.
Granting, arguendo, that the hiring of contractor was outside the scope of government procurement, this will not change the answer to sue the Mayor. This will even exculpate the Municipal Council from any suit considering that the Mayor acted in abuse of his discretion without proper authority from the Sanggunian.
This is however, not to say that the “suggested answer” is wrong. The alternative answer must also be given its due course.
Hence, it is respectfully submitted that letter (a) should also be considered.
Unfortunately, my effort was rebutted by, according to the professor, irrelevant assertions. Well, I cannot argue further. Enough that I have established the foundation of my contentions. I did not get any precious point, but I have learned my lesson. Just keep it simple 🙂