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    EPG Construction Co vs. Vigilar

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    Meshellee Cruz Paquibot
    This case involves a dispute over unpaid balances for additional construction work carried out on a government housing project. While the verbal contracts for the additional work were invalid, the court upheld the contractors' right to compensation under the principle of quantum meruit. The court also found that the state is not immune from suit in this case, as that principle cannot be used to perpetrate injustice.

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    EPG Construction Co vs. Vigilar

    Uploaded by

    Meshellee Cruz Paquibot
    165 views2 pages
    This case involves a dispute over unpaid balances for additional construction work carried out on a government housing project. While the verbal contracts for the additional work were invalid, the court upheld the contractors' right to compensation under the principle of quantum meruit. The court also found that the state is not immune from suit in this case, as that principle cannot be used to perpetrate injustice.

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    This case involves a dispute over unpaid balances for additional construction work carried out on a government housing project. While the verbal contracts for the additional work were invalid, the court upheld the contractors' right to compensation under the principle of quantum meruit. The court also found that the state is not immune from suit in this case, as that principle cannot be used to perpetrate injustice.

    Copyright:

    © All Rights Reserved
    Download as DOC, PDF, TXT or read online from Scribd
    Download as doc, pdf, or txt
    165 views2 pages

    EPG Construction Co vs. Vigilar

    Uploaded by

    Meshellee Cruz Paquibot
    This case involves a dispute over unpaid balances for additional construction work carried out on a government housing project. While the verbal contracts for the additional work were invalid, the court upheld the contractors' right to compensation under the principle of quantum meruit. The court also found that the state is not immune from suit in this case, as that principle cannot be used to perpetrate injustice.

    Copyright:

    © All Rights Reserved
    Download as DOC, PDF, TXT or read online from Scribd
    Download as doc, pdf, or txt
    of 2

    EPG Construction Co. vs.

    Vigilar
    Buena, March 16, 2001

    Topic: Sovereignty - Suits not against the State - Justice and Equity

    Facts:

     In 1983, the Ministry of Human Settlement (MHS), through the BLISS


    Development Corporation, intiated a housing project on a government property
    along the east bank of Manggahan Floodway in Pasig

     The MHS entered into a Memorandum of Agreement (MOA) with Ministry of


    Public Works and Highways (MPWH) where the latter undertook to develop the
    housing site and construct thereon 145 housing units

     By virtue of the MOA, MPWH forged individual contracts with petitioners EPG,
    Ciper, Septa, Phil. Plumbing, Home Construction, World Builders, Glass World,
    Performance Builders, and De Leon Araneta Construction for the construction
    of the housing units

     Under the contracts, the scope of construction and funding covered only
    around "2/3 of each housing unit"

     Petitioners agreed to undertake and perform "additional constructions" for the


    completion of the housing units despite the fact that there was only a verbal
    promise, and not a written contract, by the MPWH Undersecretary Aber Canlas
    that additional funds will be available and forthcoming

     Unpaid balance for the additional constructions amounted to P5,918,315.63

     Upon a demand letter from the petitioners, on November 14, 1988, DPWH Asst.
    Secretary Madamba opined that payment of petitioners' money claims should
    be based on quantum meruit (what one has earned) and should be forwarded
    to the Commission on Audit (COA)

     In a Letter of the Undersecretary of Budget and Management dated December


    20, 1994, the amount of P5,819,316.00 was then released for the payment of
    the petitioners' money claims under Advise of Allotment No. A4-1303-04-41-303

     In an indorsement dated December 27, 1995, the COA referred anew the
    money claims to the DPWH

     In a letter dated August 26, 1996, respondent Secretary Gregorio Vigilar denied
    the subject money claims

     Petitioners filed before the RTC of QC, Branch 226 a Petition for Mandamus to
    order the respondent to pay petitioners their money claims plus damages and
    attorney's fees.

     Lower court denied the petition on February 18, 1997

    Issue:

    1. Whether or not the implied, verbal contracts between the petitioners and then
    Undersecretary Canlas should be upheld

    2. Whether or not the State is immune from suit

    Holding:
    1. Yes.

    2. No.

    Ratio:

    1. While the court agrees with the respondent that the implied contracts are
    void, in view of violation of applicable laws, auditing rules, and lack of legal
    requirements, it still finds merit in the instant petition

    o The illegality of the implied contracts proceeds from an express


    declaration or prohibition by law, not from any intrinsic illegality

    o "in the interest of substantial justice," petitioners-contractors' right to


    be compensated is upheld, applying the principle of quantum meruit

    o Even the DPWH Asst. Sec. for Legal Affairs recommends their
    compensation; even the DPWH Auditor did not object to the payment of
    the money claims 聽

    2. The respondent may not conveniently hide under the State's cloak of invincibility
    against suit, considering that this principle yields to certain settled exceptions.

    o The State's immunity cannot serve as an instrument perpetrating


    injustice

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