TL;DR

The Supreme Court ruled that Mario M. Geronimo should be compensated for landscaping services rendered to the Department of Public Works and Highways (DPWH) even without a formal written contract. The court applied the principle of quantum meruit, meaning “as much as he deserves,” emphasizing that Geronimo should receive reasonable payment for his work because the DPWH acknowledged the project’s completion and benefited from it during the 112th Inter-Parliamentary Union Summit in Manila. This decision underscores that government entities must act equitably, compensating contractors for completed projects based on the value of services rendered, preventing unjust enrichment even when procedural requirements like formal contracts are lacking. Thus, the Commission on Audit was directed to determine the compensation due to Geronimo.

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Mario M. Geronimo, doing business as Kabukiran Garden, undertook landscaping projects for the DPWH in preparation for the 112th Inter-Parliamentary Union (IPU) Summit in Manila. Geronimo claimed he was verbally commissioned by DPWH officials, including then-Secretary Florante Soriquez, to complete the projects urgently, with assurances of full payment upon completion. Despite completing the landscaping in July 2005, Geronimo wasn’t paid, leading him to file a claim with the Commission on Audit (COA) based on the principle of quantum meruit. The central legal question is whether Geronimo is entitled to payment for his services despite the lack of a formal written contract and the DPWH’s subsequent denial of liability.

The COA initially acknowledged the DPWH’s liability, citing memoranda and endorsements that supported Geronimo’s claim, but ultimately denied the petition due to insufficient documentation to substantiate the project’s accomplishment and costs. Geronimo argued that the “complete documentation” requirement should encompass any supporting document, including photographs and letters from DPWH officials, and that the principles of quantum meruit and unjust enrichment should override strict adherence to documentation rules. The DPWH countered that no evidence proved the projects were completed according to its plans and specifications and that a written contract was essential for any compensation. The Supreme Court, however, sided with Geronimo, emphasizing the principle of quantum meruit in the absence of a formal contract.

The Court emphasized that while written contracts and certifications of fund availability are typically prerequisites for government contracts, their absence doesn’t automatically preclude a contractor from receiving payment for services rendered. It referenced several precedents, including Dr. Eslao v. The Commission on Audit, where contractors were compensated despite irregularities in bidding processes to prevent the government from unjustly enriching itself. The ruling hinged on the principle that justice and equity demand compensation based on quantum meruit, even without a formal contract.

In Royal Trust Construction vs. COA, a case involving the widening and deepening of the Betis River in Pampanga at the urgent request of the local officials and with the knowledge and consent of the Ministry of Public Works, even without a written contract and the covering appropriation, the project was undertaken to prevent the overflowing of the neighboring areas and to irrigate the adjacent farmlands… the petitioner may nevertheless be compensated for the services rendered by it, concededly for the public benefit, from the general fund alloted by law to the Betis River project.

The DPWH contended that Geronimo failed to prove the existence of the projects or that they acknowledged the work. However, the Court noted that the COA itself found that the DPWH had acknowledged the existence of the obligation. This acknowledgement was evident in letters and memoranda from DPWH officials, where they discussed prioritizing payments for the completed landscaping projects. The Court reiterated that administrative agencies have special expertise and their findings are generally accorded great respect, provided they are supported by substantial evidence. In this case, the COA’s finding that the DPWH acknowledged the debt supported Geronimo’s claim.

Ultimately, the Court determined that the DPWH had indeed recognized the completion of the projects and its corresponding liability. The projects benefited the public by enhancing the country’s image during the IPU Summit. Denying Geronimo compensation would result in unjust enrichment for the government, which contradicts the equitable principles underlying quantum meruit. While acknowledging that Geronimo’s documentation might be insufficient to determine the exact amount due, the Court held that the COA erred in denying the petition outright. Instead, the COA should have required Geronimo to provide additional evidence or employed auditing techniques to ascertain the reasonable value of his services and the market value of the materials used.

The Supreme Court concluded that the COA had abused its discretion by denying Geronimo’s claim despite recognizing his entitlement to compensation. The principle of quantum meruit is rooted in equity, aiming to prevent unjust enrichment. Therefore, the case was remanded to the COA to determine the total compensation due to Geronimo based on the reasonable value of the services he rendered for the landscaping projects related to the 112th Inter-Parliamentary Union Summit in Manila in 2005. The COA was directed to complete this determination and allow payment upon its conclusion.

FAQs

This case reaffirms the importance of equitable principles in government contracts, ensuring that those who provide valuable services are fairly compensated, even in the absence of strict procedural compliance. The Supreme Court’s decision emphasizes that government entities cannot benefit from services without providing just compensation, reinforcing the principles of fairness and equity in public transactions.

For inquiries regarding the application of this ruling to specific circumstances, please contact Atty. Gabriel Ablola through gaboogle.com or via email at connect@gaboogle.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: Geronimo v. COA, G.R. No. 224163, December 04, 2018