[G.R. No. 151992. September 18, 2002.] issued to each registrant as a visual record of the registration.

COMMISSION ON ELECTIONS, COMELEC CHAIRMAN ALFREDO L. On September 9, 1999, the COMELEC issued invitations to pre-
BENIPAYO, COMELEC COMMISSIONERS RESURRECCION Z. qualify and bid for the supply and installation of information
BORRA and FLORENTINO A. TUASON, JR., Petitioners, v. JUDGE technology equipment and ancillary services for its VRIS Project.
MA. LUISA QUIJANO-PADILLA, REGIONAL TRIAL COURT OF 6
QUEZON CITY, BRANCH 215 and PHOTOKINA MARKETING
CORP., Respondents. Private respondent Photokina Marketing Corporation
(PHOTOKINA) pre-qualified and was allowed to participate as
DECISION one of the bidders. After the public bidding was conducted,
PHOTOKINA’s bid in the amount of P6.588 Billion Pesos garnered
the highest total weighted score and was declared the winning
SANDOVAL-GUTIERREZ, J.: bidder. Thus, on September 28, 2000, the COMELEC issued
Resolution No. 3252 7 approving the Notice of Award to
PHOTOKINA, which, in turn, immediately accepted the same. The
The contracting prerogative of public officers is circumscribed parties then proceeded to formalize the contract, with
with a heavy burden of responsibility. They must exercise utmost Commissioner Mehol K. Sadain and Atty. Rodrigo D. Sta. Ana,
caution and observe the law in order to protect the public from acting as negotiators for the COMELEC and PHOTOKINA,
unjust and inequitable government contracts.chanrob1es virtua1 respectively.chanrob1es virtua1 1aw 1ibrary
1aw 1ibrary
However, under Republic Act No. 8760 8 the budget
The case at bar provides us with another occasion to stress that appropriated by Congress for the COMELEC’s modernization
with respect to government contracts, statutes take precedence project was only One (1) Billion Pesos and that the actual
over the public officers’ freedom to contract. Here, the available funds under the Certificate of Availability of Funds
primordial question to be resolved is — may a successful bidder (CAF) issued by the Chief Accountant of the COMELEC was only
compel a government agency to formalize a contract with it P1.2 Billion Pesos.
notwithstanding that its bid exceeds the amount appropriated
by Congress for the project? In December 2000, then COMELEC Chairman Harriet O.
Demetriou issued a memorandum to the COMELEC en banc
Before us is a petition for certiorari under Rule 65 of the 1997 expressing her objections to the contract. Commissioner Sadain,
Rules of Civil Procedure, as amended, alleging that respondent for his part, submitted a draft of the contract 9 providing a price
Judge Ma. Luisa Quijano-Padilla of the Regional Trial Court, that would not exceed the certified available appropriation but
Branch 215, Quezon City, committed grave abuse of discretion in covering only Phase I of the VRIS Project, i.e., issuance of
issuing the (a) Resolution 1 dated December 19, 2001 granting registration cards for 1,000,000 voters in certain areas only. 10
private respondent’s application for a writ of preliminary Under the draft, the "subsequent completion of the whole
prohibitory injunction in Special Civil Action No. Q-01-454052; project shall be agreed upon in accordance with the Bid
and (b) Resolution 3 dated February 7, 2002 denying petitioners’ Documents and the annual funds available for it." 11
Omnibus Motion to dismiss the petition and their motion for
reconsideration of the same Resolution and granting private On February 2, 2001, the term of former Chairman Demetriou
respondent’s application for a writ of preliminary mandatory and those of Commissioners Julio F. Desamito and Teresita Dy-
injunction. Liacco Flores expired. Appointed as their successors were
Alfredo L. Benipayo as Chairman and Resurreccion Z. Borra and
The facts are undisputed. Florentino A. Tuason, Jr. as Commissioners.

In 1996, the Philippine Congress passed Republic Act No. 8189, Meanwhile, PHOTOKINA, as the winning bidder, wrote several
otherwise known as the "Voter’s Registration Act of 1996," letters to the COMELEC requesting the formal execution of the
providing for the modernization and computerization of the contract, but to no avail. 12
voters’ registration list and the appropriation of funds therefor
"in order to establish a clean, complete, permanent and updated Then Chairman Benipayo, through various press releases and
list of voters." 4 public statements, announced that the VRIS Project has been
"scrapped, dropped, junked, or set aside." He further announced
Pursuant thereto, the Commission on Elections (COMELEC) his plan to "re-engineer" the entire modernization program of
promulgated Resolution No. 00-0315 5 approving in principle the the COMELEC, emphasizing his intention to replace the VRIS
Voters’ Registration and Identification System Project (VRIS Project with his own version, the "Triple E Vision." 13
Project for brevity). The VRIS Project envisions a computerized
database system for the May 2004 Elections. The idea is to have On October 2, 2001, Senator Edgardo J. Angara directed the
a national registration of voters whereby each registrant’s creation of a technical working group to "assist the COMELEC in
fingerprints will be digitally entered into the system and upon evaluating all programs for the modernization of the COMELEC
completion of registration, compared and matched with other which will also consider the PHOTOKINA contract as an
entries to eliminate double entries. A tamper-proof and alternative program and various competing programs for the
counterfeit-resistant voter’s identification card will then be purpose." chanrob1es virtua1 1aw 1ibrary
Unsatisfied with the adverse turn of events, PHOTOKINA filed injunction bond from P20,000,000.00 to P10,000,000.00; (4)
with the Regional Trial Court, Branch 215, Quezon City a petition Clarify its Resolution dated December 19, 2001 to the extent that
for mandamus, prohibition and damages (with prayer for the writ of preliminary prohibitory injunction will also enjoin
temporary restraining order, preliminary prohibitory injunction Respondents, their agents, successors and assigns from
and preliminary mandatory injunction) against the COMELEC and disregarding the contract for the VRIS Project between Petitioner
all its Commissioners, 14 docketed as Special Civil Action No. Q- and Respondent COMELEC; (5) deny Petitioner’s motion to
01-45405. PHOTOKINA alleged three causes of action: first, the declare Respondents in default.
deliberate refusal of the COMELEC and its Commissioners to
formalize the contract rendered nugatory the perfected contract "Accordingly, let a writ of preliminary mandatory injunction issue
between them; second, in announcing that the VRIS Project has directing all respondent Commissioners to immediately resume
been junked and that he has plans to re-engineer the COMELEC’s negotiations to formalize the execution of the contract with
entire modernization program, Chairman Benipayo committed Petitioner for the VRIS Project upon petitioner’s posting of a
grave abuse of discretion; and third, the COMELEC’s failure to bond, separate from the above bond for the writ of preliminary
perform its duty under the contract has caused PHOTOKINA to prohibitory injunction, in the amount of P20,000,000.00, which
incur damages since it has spent substantial time and resources bond shall answer for whatever damages that may be sustained
in the preparation of the bid and the draft contract. by reason of the issuance of the said writ, if it turns out that
Petitioner is not entitled thereto.
In support of its application for writs of preliminary prohibitory
and mandatory injunction, PHOTOKINA adopted the evidence it "SO ORDERED." 18
adduced during the hearing of its application for the issuance of
a temporary restraining order. Hence, the instant petition for certiorari filed by the Office of the
Solicitor General (OSG) in behalf of then COMELEC Chairman
On December 19, 2001, respondent Judge Ma. Luisa Quijano- Alfredo L. Benipayo and Commissioners Resurreccion Z. Borra
Padilla issued the first assailed Resolution granting PHOTOKINA’s and Florentino A. Tuason, Jr..
application for a writ of preliminary prohibitory injunction,
thus:jgc:chanrobles.com.ph Petitioners contend that: (1) a petition for mandamus and
prohibition does not lie to enforce contractual obligations,
"WHEREFORE, premises considered, the Court resolves to: (1) hence, PHOTOKINA’s proper recourse before the Regional Trial
grant the application for the issuance of a writ of preliminary Court should have been an action for specific performance; (2)
prohibitory injunction; and (2) deny the application for the respondent judge, by issuing the injunctive writs, already
issuance of a writ of preliminary mandatory injunction. assumed that the VRIS Project was lawfully awarded by the
COMELEC to PHOTOKINA, and that there is a valid perfected
Accordingly, let a writ of preliminary prohibitory injunction issue contract between them, thus, manifesting her prejudgment; and
enjoining respondents, their agents, successors and assigns from (3) injunctive writs should not be issued when an action for
replacing the VRIS Project upon petitioner’s posting of a bond in damages can adequately compensate for the injuries. Petitioners
the amount of P20,000,000.00, which bond shall answer for pray that the two assailed Resolutions be nullified and Special
whatever damages which may be sustained by reason of the Civil Action No. Q-01-45405 be dismissed outright. 19
issuance of the said writ, if it turns out that the plaintiffs are not
entitled thereto. On February 21, 2002, the majority of the COMELEC
Commissioners — Luzviminda G. Tancangco, Rufino S.B. Javier,
SO ORDERED." 15 Ralph C. Lantion and Mehol K. Sadain — filed with this Court a
Manifestation 20 that "the Chairman and the two
Both parties filed their respective motions for reconsideration. Commissioners who filed the instant Petition acted without
PHOTOKINA reiterated its plea for a writ of preliminary authority from the COMELEC en banc to take such
mandatory injunction. 16 For their part, the COMELEC and its action." chanrob1es virtua1 1aw 1ibrary
Commissioners, through the Solicitor General, prayed that the
writ of preliminary prohibitory injunction be set aside and that PHOTOKINA filed a Comment with Motion to Dismiss, 21 the
the petition for mandamus, prohibition and damages be present petition, on two procedural grounds. First, the petition
dismissed. 17chanrob1es virtua1 1aw 1ibrary violates the doctrine of hierarchy of courts. And second, the OSG
has no authority and/or standing to file the petition considering
On February 8, 2002, respondent judge issued the second that the petitioners have not been authorized by the COMELEC
assailed Resolution denying the COMELEC’s Omnibus Motion en banc to take such action. Without the concurrence of at least
and, this time, granting PHOTOKINA’s application for a writ of a majority of the members of the COMELEC, neither petitioners
preliminary mandatory injunction, thus:jgc:chanrobles.com.ph nor the OSG could file the petition in behalf of the COMELEC.

"WHEREFORE, premises considered, this Court resolves to: (1) In refutation of petitioners’ arguments, PHOTOKINA contends
deny Respondents’ Omnibus Motion for the dismissal of this that mandamus is an appropriate remedy since what is involved
case and for the reconsideration of this Court’s Resolution in Special Civil Action No. Q-01-45405 is the performance of a
granting the writ of preliminary prohibitory injunction; (2) grant ministerial duty. Citing Isada v. Bocar, 22 PHOTOKINA maintains
Petitioner’s Motion dated January 2, 2002 insofar as it prays for that mandamus may be availed of by private parties to compel
the issuance of a writ of preliminary mandatory injunction; (3) public officers to act on a contract entered into pursuant to law.
Grant the prayer for the reduction of the preliminary prohibitory In its Supplemental Comment, 23 PHOTOKINA invites the Court’s
attention to Metropolitan Manila Development Authority v. interest and of serious implications, it never hesitated to set
Jancom Environmental Corporation 24 whereby the winning aside the rule and proceed with the judicial determination of the
bidder was afforded every right to seek enforcement of its case. 33 The case at bar is of similar import. It is in the interest of
perfected contract with the government. the State that questions relating to government contracts be
settled without delay. This is more so when the contract, as in
The petition is impressed with merit. this case, involves the disbursement of public funds and the
modernization of our country’s election process, a project that
Initially, we must resolve the procedural roadblocks.chanrob1es has long been overdue.
virtua1 1aw 1ibrary
We now resolve the following substantive issues:chanrob1es
PHOTOKINA alleges that the OSG has no standing to file the virtual 1aw library
present petition since its legal position is contrary to that
espoused by the majority of the COMELEC Commissioners. This 1) Is a petition for mandamus the appropriate remedy to enforce
is a leap to a non-sequitur conclusion. The OSG is an contractual obligations? and 2) May a successful bidder compel a
independent office. Its hands are not shackled to the cause of its government agency to formalize a contract with it
client agency. In the discharge of its task, the primordial concern notwithstanding that its bid exceeds the amount appropriated
of the OSG is to see to it that the best interest of the government by Congress for the project?chanrob1es virtua1 1aw 1ibrary
is upheld. 25 This is regardless of the fact that what it perceived
as the "best interest of the government" runs counter to its I
client agency’s position. 26 Endowed with a broad perspective
that spans the legal interest of virtually the entire government
officialdom, the OSG may transcend the parochial concerns of a No rule of law is better settled than that mandamus does not lie
particular client agency and instead, promote and protect the to enforce the performance of contractual obligations. 34 As
public weal. 27 Our ruling in Orbos v. Civil Service Commission, early as 1924, Justice Street, in Quiogue v. Romualdez, 35
28 is relevant, thus:jgc:chanrobles.com.ph already set forth the justification of this rule,
thus:jgc:chanrobles.com.ph
". . . It is incumbent upon him (Solicitor General) to present to
the court what he considers would legally uphold the best "Upon the facts above stated we are of the opinion that the writ
interest of the government although it may run counter to a of mandamus is not the appropriate, or even an admissible
client’s position. . . .. remedy. It is manifest that whatever rights the petitioner may
have, upon the facts stated, are derived from her contract with
"In the present case, it appears that after the Solicitor General the city; and no rule of law is better settled than that mandamus
studied the issues he found merit in the cause of the petitioner never lies to enforce the performance of private contracts. . . .
based on the applicable law and jurisprudence. Thus, it is his The petitioner’s remedy, if any she has, is by an original action in
duty to represent the petitioner as he did by filing this petition. the Court of First Instance to compel the city to pay the agreed
He cannot be disqualified from appearing for the petitioner even price or to pay damages for the breach of contract.
if in so doing his representation runs against the interests of the
CSC. ". . . As said in Lowe v. Phelps (14 Bush, 642):chanrob1es virtual
1aw library
"This is not the first time that the Office of the Solicitor General
has taken a position adverse to his clients like the CSC, the ‘It must, therefore, appear upon every application for a
National Labor Relations Commission, among others, and even mandamus that it is the legal duty of the respondent to do that
the People of the Philippines. . . ." (Emphasis supplied) which it is sought to compel him to do, and that he has upon
proper application refused to perform that duty.’ (Citing
Hence, while petitioners’ stand is contrary to that of the majority numerous authorities).
of the Commissioners, still, the OSG may represent the COMELEC
as long as in its assessment, such would be for the best interest "It was not intended to aid a plaintiff in the enforcement of a
of the government. For, indeed, in the final analysis, the client of mere contract right, or to take the place of the other remedies
the OSG is not the agency but no less than the Republic of the provided by law for the adjudication of disputed claims. Looking
Philippines in whom the plenum of sovereignty resides. 29 at the case from the standpoint of appellant, it involves nothing
more than an ordinary breach of contract. If, as contended, the
Moreover, it must be emphasized that petitioners are also public appellant had a valid contract with the school board, it also had
officials entitled to be represented by the OSG. Under Executive an adequate remedy at law to recover damages for its breach;
Order No. 292 30 and Presidential Decree No. 478, 31 the OSG is and to permit the writ of mandamus to be used for the purpose
the lawyer of the government, its agencies and instrumentalities, of enforcing a mere contract right would be a wide departure
and its officials or agents. Surely, this mandate includes the three from the settled practice in respect to the character of cases in
petitioners 32 who have been impleaded as public respondents which relief by mandamus may be obtained.
in Special Civil Action No. Q-01-45405.
"In Parrott v. City of Bridgeport (44 Conn., 180), the writ was
Anent the alleged breach of the doctrine of hierarchy of courts, refused where the petitioner sought to compel a city to
suffice it to say that it is not an iron-clad dictum. On several construct a public street in a certain manner agreeably to the
instances where this Court was confronted with cases of national terms of a special agreement between the petitioner and the
city. In the course of the opinion the court Bocar 46 where the act of the respondent public officer has the
said:jgc:chanrobles.com.ph effect of setting aside contracts already in the process of
consummation. In contrast with Isada, the alleged contract here
" * * * The duty, therefore, if any, which rests upon the city in has not yet been fully performed by PHOTOKINA; and though it
this regard, is one which it owes to the petitioner as an avers readiness to perform, petitioners raised serious questions
individual, not to the public, and the special contract is the as to its validity. Their posture is tenable. guil
foundation upon which it rests. But the writ of mandamus has
never been considered as an appropriate remedy for the II
enforcement of contract rights of a private and personal nature
and obligations which rest wholly upon contract and which
involve no questions of public trusts or official duty. Indeed, To spare PHOTOKINA the drudgery of a fruitless pursuit, we
strictly speaking, it never lies where the party aggrieved has deem it appropriate to lay down the principles governing
adequate remedy at law, and its aid is only to be invoked to government contracts and to apply them to the instant case.
prevent an absolute failure of justice in cases where ordinary Meanwhile, as PHOTOKINA will later on deduce from the
legal processes furnish no relief." (Emphasis supplied)chanrob1es discussion, the contract subject of this controversy is one that
virtua1 1aw 1ibrary can be slain in sight for being patently void and unenforceable.

The passage of time has not eroded the wisdom of the foregoing Enshrined in the 1987 Philippine Constitution is the mandate
rule. Its invocation by this Court in Province of Pangasinan v. that "no money shall be paid out of the Treasury except in
Reparation Commission, 36 Aprueba v. Ganzon, 37 City of Manila pursuance of an appropriation made by law." 47 Thus, in the
v. Posadas, 38 Jacinto v. Director of Lands, 39 National Marketing execution of government contracts, the precise import of this
Corporation v. Cloribel, 40 Astudillo v. The Board of Directors of constitutional restriction is to require the various agencies to
People’s Homesite and Housing Corporation, 41 and Sharp limit their expenditures within the appropriations made by law
International Marketing v. Court of Appeals, 42 virtually for each fiscal year.
reinforces the rule.
Complementary to the foregoing constitutional injunction are
The present case is our latest addition to the above catena of pertinent provisions of law and administrative issuances that are
jurisprudence. We carefully read the pleadings filed in Special designed to effectuate the above mandate in a detailed manner.
Civil Action No. Q-01-45405 and we are convinced that what 48 Sections 46 and 47, Chapter 8, Subtitle B, Title 1, Book V of
PHOTOKINA sought to enforce therein are its rights under the Executive Order No. 292, otherwise known as "Administrative
accepted bid proposal. Its petition alleged that notwithstanding Code of 1987," provide:jgc:chanrobles.com.ph
the COMELEC’s issuance of a Notice of Award and its
(PHOTOKINA’s) subsequent acceptance thereof, the COMELEC "SEC. 46. Appropriation Before Entering into Contract. — (1) No
still refused to formalize the contract. As a relief, PHOTOKINA contract involving the expenditure of public funds shall be
prayed that after trial, petitioners be directed "to review and entered into unless there is an appropriation therefor, the
finalize the formal contract" and to "implement the VRIS unexpended balance of which, free of other obligations, is
Project." 43 Petitioners, on their part, specifically denied the sufficient to cover the proposed expenditure; and . . .
existence of a perfected contract and asserted that even if there
was one, the same is null and void for lack of proper "SEC. 47. Certificate Showing Appropriation to Meet Contract. —
appropriation. Petitioners labeled the contract as illegal and Except in the case of a contract for personal service, for supplies
against public policy. for current consumption or to be carried in stock not exceeding
the estimated consumption for three (3) months, or banking
Akin to our rulings cited above, we hold that mandamus is not transactions of government-owned or controlled banks, no
the proper recourse to enforce the COMELEC’s alleged contract involving the expenditure of public funds by any
contractual obligations with PHOTOKINA. It has other adequate government agency shall be entered into or authorized unless
remedy in law. Moreover, worth stressing is the judicial caution the proper accounting official of the agency concerned shall have
that mandamus applies as a remedy only where petitioner’s right certified to the officer entering into the obligation that funds
is founded clearly in law and not when it is doubtful. 44 In have been duly appropriated for the purpose and that the
varying language, the principle echoed and reechoed is that legal amount necessary to cover the proposed contract for the current
rights may be enforced by mandamus only if those rights are calendar year is available for expenditure on account thereof,
well-defined, clear and certain. 45 Here, the alleged contract, subject to verification by the auditor concerned. The certificate
relied upon by PHOTOKINA as source of its rights which it seeks signed by the proper accounting official and the auditor who
to be protected, is being disputed, not only on the ground that it verified it, shall be attached to and become an integral part of
was not perfected but also because it is illegal and against public the proposed contract, and the sum so certified shall not
policy. thereafter be available for expenditure for any other purpose
until the obligation of the government agency concerned under
Of course, there are cases in which the writ of mandamus has the contract is fully extinguished.chanrob1es virtua1 1aw 1ibrary
been used to compel public officers to perform certain acts, but
it will be generally observed that in such cases, the contracts It is quite evident from the tenor of the language of the law that
have been completely performed by the petitioner, and nothing the existence of appropriations and the availability of funds are
remained to be done except for the government to make indispensable pre-requisites to or conditions sine qua non for the
compensation. These exceptional cases are cited in Isada v. execution of government contracts. The obvious intent is to
impose such conditions as a priori requisites to the validity of the Notice of Cash Availability (NCA) and a multi-year obligational
proposed contract. 49 Using this as our premise, we cannot authority to assume payment of the total VRIS Project for lack of
accede to PHOTOKINA’s contention that there is already a legal basis. 59 Corollarily, under Section 33 of R.A. No. 8760, no
perfected contract. While we held in Metropolitan Manila agency shall enter into a multi-year contract without a multi-year
Development Authority v. Jancom Environmental Corporation 50 obligational authority, thus:jgc:chanrobles.com.ph
that "the effect of an unqualified acceptance of the offer or
proposal of the bidder is to perfect a contract, upon notice of the "SECTION 33. Contracting Multi-Year Projects. — In the
award to the bidder," however, such statement would be implementation of multi-year projects, no agency shall enter into
inconsequential in a government where the acceptance referred a multi-year contract without a multi-year Obligational Authority
to is yet to meet certain conditions. To hold otherwise is to allow issued by the Department of Budget and Management for the
a public officer to execute a binding contract that would obligate purpose. Notwithstanding the issuance of the multi-year
the government in an amount in excess of the appropriations for Obligational Authority, the obligation to be incurred in any given
the purpose for which the contract was attempted to be made. calendar year, shall in no case exceed the amount programmed
51 This is a dangerous precedent. for implementation during said calendar year."cralaw virtua1aw
library
In the case at bar, there seems to be an oversight of the legal
requirements as early as the bidding stage. The first step of a Petitioners are justified in refusing to formalize the contract with
Bids and Awards Committee (BAC) is to determine whether the PHOTOKINA. Prudence dictated them not to enter into a
bids comply with the requirements. The BAC shall rate a bid contract not backed up by sufficient appropriation and available
"passed" only if it complies with all the requirements and the funds. Definitely, to act otherwise would be a futile exercise for
submitted price does not exceed the approved budget for the the contract would inevitably suffer the vice of nullity. In
contract." 52 Osmeña v. Commission on Audit, 60 this Court
held:jgc:chanrobles.com.ph
Extant on the record is the fact that the VRIS Project was
awarded to PHOTOKINA on account of its bid in the amount of "The Auditing Code of the Philippines (P.D. 1445) further
P6.588 Billion Pesos. However, under Republic Act No. 8760, 53 provides that no contract involving the expenditure of public
the only fund appropriated for the project was P1 Billion Pesos funds shall be entered into unless there is an appropriation
and under the Certification of Available Funds 54 (CAF) only P1.2 therefor and the proper accounting official of the agency
Billion Pesos was available. Clearly, the amount appropriated is concerned shall have certified to the officer entering into the
insufficient to cover the cost of the entire VRIS Project. There is obligation that funds have been duly appropriated for the
no way that the COMELEC could enter into a contract with purpose and the amount necessary to cover the proposed
PHOTOKINA whose accepted bid was way beyond the amount contract for the current fiscal year is available for expenditure on
appropriated by law for the project. This being the case, the BAC account thereof. Any contract entered into contrary to the
should have rejected the bid for being excessive 55 or should foregoing requirements shall be VOID.chanrob1es virtua1 1aw
have withdrawn the Notice of Award on the ground that in the 1ibrary
eyes of the law, the same is null and void. 56
"Clearly then, the contract entered into by the former Mayor
The objections of then Chairman Demetriou to the Duterte was void from the very beginning since the agreed cost
implementation of the VRIS Project, ardently carried on by her for the project (P8,368,920.00) was way beyond the
successor Chairman Benipayo, are therefore in order.chanrob1es appropriated amount (P5,419,180.00) as certified by the City
virtua1 1aw 1ibrary Treasurer. Hence, the contract was properly declared void and
unenforceable in COA’s 2nd Indorsement, dated September 4,
Even the draft contract submitted by Commissioner Sadain, that 1986. The COA declared and we agree, that:chanrob1es virtual
provides for a contract price in the amount of P1.2 Billion Pesos 1aw library
is unacceptable. Indeed, we share the observation of former
Chairman Demetriou that it circumvents the statutory ‘The prohibition contained in Sec. 85 of PD 1445 (Government
requirements on government contracts. While the contract price Auditing Code) is explicit and mandatory. Fund availability is, as
under the draft contract 57 is only P1.2 Billion and, thus, within it has always been, an indispensable prerequisite to the
the certified available funds, the same covers only Phase I of the execution of any government contract involving the expenditure
VRIS Project, i.e., the issuance of identification cards for only of public funds by all government agencies at all levels. Such
1,000,000 voters in specified areas. 58 In effect, the contracts are not to be considered as final or binding unless such
implementation of the VRIS Project will be "segmented" or a certification as to funds availability is issued (Letter of
"chopped" into several phases. Not only is such arrangement Instruction No. 767, s. 1978). Antecedent of advance
disallowed by our budgetary laws and practices, it is also appropriation is thus essential to government liability on
disadvantageous to the COMELEC because of the uncertainty contracts (Zobel v. City of Manila, 47 Phil. 169). This contract
that will loom over its modernization project for an indefinite being violative of the legal requirements aforequoted, the same
period of time. Should Congress fail to appropriate the amount contravenes Sec. 85 of PD 1445 and is null and void by virtue of
necessary for the completion of the entire project, what good Sec. 87." ‘
will the accomplished Phase I serve? As expected, the project
failed "to sell" with the Department of Budget and Management. Verily, the contract, as expressly declared by law, is inexistent
Thus, Secretary Benjamin Diokno, per his letter of December 1, and void ab initio. 61 This is to say that the proposed contract is
2000, declined the COMELEC’s request for the issuance of the without force and effect from the very beginning or from its
incipiency, as if it had never been entered into, and hence,
cannot be validated either by lapse of time or ratification. 62

Of course, we are not saying that the party who contracts with
the government has no other recourse in law. The law itself
affords him the remedy. Section 48 of E.O. No. 292 explicitly
provides that any contract entered into contrary to the above-
mentioned requirements shall be void, and "the officers entering
into the contract shall be liable to the Government or other
contracting party for any consequent damage to the same as if
the transaction had been wholly between private parties." So
when the contracting officer transcends his lawful and legitimate
powers by acting in excess of or beyond the limits of his
contracting authority, the Government is not bound under the
contract. It would be as if the contract in such case were a
private one, whereupon, he binds only himself, and thus,
assumes personal liability thereunder. 63 Otherwise stated, the
proposed contract is unenforceable as to the
Government.chanrob1es virtua1 1aw 1ibrary

While this is not the proceeding to determine where the

culpability lies, however, the constitutional mandate cited above
constrains us to remind all public officers that public office is a
public trust and all public officers must at all times be
accountable to the people. The authority of public officers to
enter into government contracts is circumscribed with a heavy
burden of responsibility. In the exercise of their contracting
prerogative, they should be the first judges of the legality,
propriety and wisdom of the contract they entered into. They
must exercise a high degree of caution so that the Government
may not be the victim of ill-advised or improvident action. 64

In fine, we rule that PHOTOKINA, though the winning bidder,

cannot compel the COMELEC to formalize the contract. Since
PHOTOKINA’s bid is beyond the amount appropriated by
Congress for the VRIS Project, the proposed contract is not
binding upon the COMELEC and is considered void; and that in
issuing the questioned preliminary writs of mandatory and
prohibitory injunction and in not dismissing Special Civil Action
No. Q-01-45405, respondent judge acted with grave abuse of
discretion. Petitioners cannot be compelled by a writ of
mandamus to discharge a duty that involves the exercise of
judgment and discretion, especially where disbursement of
public funds is concerned.

WHEREFORE, the petition is GRANTED. The Resolutions dated

December 19, 2001 and February 7, 2002 issued by respondent
Judge Padilla are SET ASIDE. Special Civil Action No. Q-01-45405
is hereby ordered DISMISSED.chanrob1es virtua1 1aw 1ibrary

SO ORDERED.

Davide, Jr., C.J., Bellosillo, Puno, Vitug, Mendoza, Panganiban,

Quisumbing, Ynares-Santiago, Carpio, Austria-Martinez, Corona,
Carpio-Morales and Callejo, Sr., JJ., concur.