Republic v. Lacap, G.R. No.

158253
March 2, 2007
FACTS
• Case is a petition for certoriari,
assailing the decision of
the Court of Appeals which
affirmed,with modifications,
ruling by the RTC granting the
complaint for Specific
Performance anddamages filed by
Lacap against RP
• Dist. Eng. Of Pampanga issued an
invitation to bid
dated Jan 27, 1992 where Lacap and
twoother
contractors were pre-qualified
• Being the lowest bidder, Lacap won
the bid for
concreting of a certain baranggay,
andthereafter
undertook the works and purchased
materials and labor
in connection with
• On Oct 29, 1992, Office of the Dist.
Eng conducted
final investigation of end product and
fountit 100%
completed according to specs. Lacap
thereafter sought
the payment of the DPWH
• DPWH withheld payment on the
grounds that the CoA
disapproved final release of funds
dueto Lacap’s license
as contractor having expired
• Dist. Eng sought the opinion of
DPWH legal. Legal then
responded to Dist. Eng that
theContractors License Law
(RA 4566) does not provide that a
contract entered into
by acontractor after expiry of license
is void and that
there is no law that expressly prohibits
or declares void
such a contract
• DPWH Legal Dept, through Dir III
Cesar Mejia, issued
First Indorsement on July 20
1994recommending that
payment be made to Lacap. Despite
such
recommendation, no paymentwas
issued
• On July 3, 1995, respondent filed the
complaint for
Specific Performance and
Damagesagainst petitioner
before the RTC.14
• On September 14, 1995, petitioner,
through the Office
of the Solicitor General (OSG), filed
aMotion to Dismiss
the complaint on the grounds that the
complaint states
no cause of actionand that the RTC
had no jurisdiction
over the nature of the action since
respondent did
notappeal to the COA the decision of
the District Auditor
to disapprove the claim.
• Following the submission of
respondent’s Opposition to
Motion to Dismiss,the RTC issued
anOrder dated March
11, 1996 denying the Motion to
Dismiss. The OSG filed
a Motion for Reconsideration18 but it
was likewise
denied by the RTC in its Order dated
May 23, 1996.
• On August 5, 1996, the OSG filed its
Answer invoking
the defenses of non-exhaustion of
administrative
remedies and the doctrine of non-
suability of the State
• Following trial, the RTC rendered on
February 19, 1997
a decision ordering DPWH to
payLacap for the contract
of the project, 12% interest from
demand until fully paid,
and the costs of the sui
Republic v. Lacap, G.R. No. 158253
March 2, 2007
FACTS
• Case is a petition for certoriari,
assailing the decision of
the Court of Appeals which
affirmed,with modifications,
ruling by the RTC granting the
complaint for Specific
Performance anddamages filed by
Lacap against RP
• Dist. Eng. Of Pampanga issued an
invitation to bid
dated Jan 27, 1992 where Lacap and
twoother
contractors were pre-qualified
• Being the lowest bidder, Lacap won
the bid for
concreting of a certain baranggay,
andthereafter
undertook the works and purchased
materials and labor
in connection with
• On Oct 29, 1992, Office of the Dist.
Eng conducted
final investigation of end product and
fountit 100%
completed according to specs. Lacap
thereafter sought
the payment of the DPWH
• DPWH withheld payment on the
grounds that the CoA
disapproved final release of funds
dueto Lacap’s license
as contractor having expired
• Dist. Eng sought the opinion of
DPWH legal. Legal then
responded to Dist. Eng that
theContractors License Law
(RA 4566) does not provide that a
contract entered into
by acontractor after expiry of license
is void and that
there is no law that expressly prohibits
or declares void
such a contract
• DPWH Legal Dept, through Dir III
Cesar Mejia, issued
First Indorsement on July 20
1994recommending that
payment be made to Lacap. Despite
such
recommendation, no paymentwas
issued
• On July 3, 1995, respondent filed the
complaint for
Specific Performance and
Damagesagainst petitioner
before the RTC.14
• On September 14, 1995, petitioner,
through the Office
of the Solicitor General (OSG), filed
aMotion to Dismiss
the complaint on the grounds that the
complaint states
no cause of actionand that the RTC
had no jurisdiction
over the nature of the action since
respondent did
notappeal to the COA the decision of
the District Auditor
to disapprove the claim.
• Following the submission of
respondent’s Opposition to
Motion to Dismiss,the RTC issued
anOrder dated March
11, 1996 denying the Motion to
Dismiss. The OSG filed
a Motion for Reconsideration18 but it
was likewise
denied by the RTC in its Order dated
May 23, 1996.
• On August 5, 1996, the OSG filed its
Answer invoking
the defenses of non-exhaustion of
administrative
remedies and the doctrine of non-
suability of the State
• Following trial, the RTC rendered on
February 19, 1997
a decision ordering DPWH to
payLacap for the contract
of the project, 12% interest from
demand until fully paid,
and the costs of the sui
Republic v. Lacap,

G.R. No. 158253 March 2, 2007

FACTS

• Case is a petition for certoriari, assailing the decision ofthe Court of Appeals which affirmed,with
modifications, ruling by the RTC granting the complaint for Specific Performance anddamages filed by
Lacap against RP
• Dist. Eng. Of Pampanga issued an invitation to bid dated Jan 27, 1992 where Lacap and twoother
contractors were pre-qualified

• Being the lowest bidder, Lacap won the bid for concreting of a certain baranggay, andthereafter
undertook the works and purchased materials and labor in connection with

• On Oct 29, 1992, Office of the Dist. Eng conducted final investigation of end product and fountit 100%
completed according to specs. Lacap thereafter sought the payment of the DPWH

• DPWH withheld payment on the grounds that the CoA disapproved final release of funds dueto
Lacap’s license as contractor having expired

• Dist. Eng sought the opinion of DPWH legal. Legal thenresponded to Dist. Eng that theContractors
License Law (RA 4566) does not provide that a contract entered into by acontractor after expiry of
license is void and that there is no law that expressly prohibits or declares void such a contract

• DPWH Legal Dept, through Dir III Cesar Mejia, issued First Indorsement on July 20 1994 recommending
that payment be made to Lacap. Despite such recommendation, no paymentwas issued

• On July 3, 1995, respondent filed the complaint for Specific Performance and Damagesagainst
petitioner before the RTC.14

• On September 14, 1995, petitioner, through the Office of the Solicitor General (OSG), filed aMotion to
Dismiss the complaint on the grounds that the complaint states no cause of actionand that the RTC had
no jurisdiction over the nature of the action since respondent did notappeal to the COA the decision of
the District Auditor to disapprove the claim.

• Following the submission of respondent’s Opposition toMotion to Dismiss,the RTC issued anOrder
dated March 11, 1996 denying the Motion to Dismiss. The OSG filed a Motion for Reconsideration18 but
it was likewise denied by the RTC in its Order dated May 23, 1996.

• On August 5, 1996, the OSG filed its Answer invoking the defenses of non-exhaustion of administrative
remedies and the doctrine of non-suability of the State

• Following trial, the RTC rendered on February 19, 1997a decision ordering DPWH to payLacap for the
contract of the project, 12% interest from demand until fully paid, and the costs of the sui

• CA affirmed the decision but lowered interest to 6%

ISSUE:

WON a contractor with an expired license is entitled to be paid for completed projects

RULING

A contractor with an expired license is entitled payment for completed projects, but does notexonerate
him from corresponding fines thereof. Section 35 of R.A. No. 4566explicitly provides:“SEC. 35. Penalties.
Any contractor who, for a price, commission, fee or wage, submits or attemptsto submit a bid to
construct, or contracts to or undertakes to construct, or assumes charge in asupervisory capacity ofa
construction work within the purview of this Act, without first securing alicense to engage in the
business of contracting in this country; or who shall present or file thelicense certificate of another, give
false evidence of any kind to the Board, or any member thereof inobtaining a certificate or license,
impersonate another, or use an expired or revoked certificate or license, shall be deemed guilty of
misdemeanor, and shall, upon conviction, be sentenced to pay afine of not less than five hundred pesos
but not more than five thousand pesos.

The "plain meaningrule" or verba legis in statutory construction is that if the statute is clear, plain and
free fromambiguity, it must be given its literal meaning and applied without interpretation. The
wordings of R.A. No. 4566 are clear. It does not declare, expressly or impliedly, as void contracts entered
into bya contractor whose license had already expired. Nonetheless, such contractor is liable for
paymentof the fine prescribed therein. Thus, respondent should be paid for the projectshe completed.
Suchpayment, however, is without prejudice to the payment of the fine prescribed under thelaw