Appeals court orders Talisay to pay engineering firm P10M

CEBU, Philippines - The Court of Appeals 19th Division has ordered the Talisay City government to pay some P9.7 million to an engineering consultancy firm for its construction supervisory services during the construction of the New Talisay City Public Market in barangay Lagtang.

In its decision, which was promulgated last June 29, the CA’s 19th division upheld the decision of the Regional Trial Court Branch 21 ordering the city government to pay A.S. Enriquez Engineering Consultancy P9,729,588.23. 

In September 2003, the Talisay City government contracted AS Enriquez Engineering Consultancy for the architecture and engineering designs of the project, which cost about P8.640-million.

The city also contracted the AS Enriquez Engineering to undertake the project, which started in March 2004.

But according to Enriquez, on August 4 that year, Mayor Socrates Fernandez issued a notice terminating the contract due to alleged major changes in the project. 

The city and the firm then agreed to settle for P1,347,702 as partial payment from its total collectible of P5,277,319.55.

But the city refused to pay the P3,929,617.50 balance despite several demand letters sent by the firm. 

Apollo Enriquez, through his lawyer Alan Gaviola, asked the court to compel the city government to pay the remaining balance and the 18 percent interest per annum. 

On January 3,2008, the court ordered the city government to pay the firm P3,929,617.50 with a 12 percent per annum interest until fully paid.

The firm also asked for P300,000 for moral damages, P150,000 for attorney’s fees, and P50,000 for litigation expenses from the city. 

However, the city elevated the case to the CA.

The court said that based on the Auditing Code of the Philippines and the 1987 Administrative Code of the Philippines, the Certificate of Availability of Funds must be attached to a proposed contract before it will be approved. 

“Since the Certification of Public Funds is required to be attached to the proposed contract, the certificate is only indispensable during the negotiation and perfection stage of the contract but not during the consummation stage,” the decision read. 

Also, there was no pronouncement by the Commission on Audit regarding the supposed nullity of the contract nor were the payments made to the city disallowed by the COA on post-audit. 

“The contract is in accordance with the law,” the decision read. 

Furthermore, the decision also reads “sufficient authority was given to the mayor and it was enacted with the concurrence of the city council leading the court to believe that appropriate funds were available for the project.” 

The court also said the city must pay the firm according to the provisions of the contract, which it voluntarily executed.

The city must pay to the firm the compensation of five months and 20 days of work of estimated man-months or equivalent to 94-percent manpower utilization to be deducted with the payment made by the city in the amount of P1.3 million. 

“In accordance with the appellee’s (consultancy firm) prayer, the appellant (city) is bound to pay P3,929,617.50 with legal interest of 12 percent until full payment is made to the appellee,” the decision read, which is signed by Associate Justice chairperson Edgardo delos Santos. 

But on matters of attorney’s fees and litigation expenses, the court, however, deleted on the ground that RTC failed to set forth the ground for their award. – (FREEMAN)