SC: No Quantum Meruit Payment in Government Contracts Where Claimant Failed to Seasonably Appeal COA Disallowance
August 29, 2023
On August 22, 2023, the Supreme Court declared that the doctrine established in Torreta v. Commission on Audit (G.R. No. 242925, November 10, 2020), i.e., that the civil liability for amounts disallowed by the Commission on Audit (COA) may be reduced by the amounts due to the recipient based on the application of the principle of quantum meruit, does not apply in cases where the private entity who rendered services to the government failed to seasonably appeal the COA’s disallowance of the government’s payment to it.
In clarifying that the principle of quantum meruit in Torreta should not benefit the petitioner in Topbest Printing Corporation v. COA (G.R. No. 261207, August 22, 2023), the Supreme Court, speaking through Associate Justice Maria Filomena D. Singh, ruled that this principle of equity should not apply in instances where the COA decision sought to be assailed has already attained finality. According to the Court, the rule is settled that when a judgment becomes final and executory, it becomes immutable and unalterable. The petitioner, which patently failed to comply with the rules providing the period within which a COA decision may be challenged, and thus allowed the COA decision to attain finality, must suffer the consequences of its lapses.
By denying the petition and highlighting the importance of the doctrine of immutability of judgments, the Supreme Court emphasized that this doctrine is a fundamental element of our judicial system and must be recognized and applied, save for a narrow set of exceptions. Moreover, the judgment of the Supreme Court in Topbest also underscores that a doctrine as essential as the immutability of judgments cannot be set aside especially where doing so would result in tolerating illegal practices, as in this case where it was found that Topbest engaged in prohibited sub-contracting. The law should not grant leniency to parties who violate fundamental procedural rules and adjective law.
The Supreme Court Public Information Office shall upload a copy of G.R. No. 261207, Topbest Printing Corporation v. Commission on Audit, once it receives the same from the Office of the Clerk of Court En Banc. (Courtesy of the Supreme Court Public Information Office)