G.R. No. 30888

Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. 30888 September 28, 1929

VIUDA E HIJOS DE CRISPULO ZAMORA, petitioner,
vs.
BEN F. WRIGHT and F. SEGADO, as Insular Auditor and Purchasing Agent, respectively, of the Government of the Philippine Islands, respondents.

Jose Yulo for petitioner.
Attorney-General Jaranilla for respondents.

STATEMENT

The petitioner is a commercial partnership with its principal office and place of business in the City of Manila. The respondent, Ben F. Wright, is the Insular Auditor of the Philippine Islands, and F. Segado, is Purchasing Agent.

March 17, 1926, the petitioner sent to the Bureau of Posts a letter, the material portions of which are as follows:

Mr. JOSE TOPACIO
Director of Posts
Manila, P. I.

DEAR SIR: Re our double utility telegraph pole crossarm, patent of which has been applied for, we wish to quote as follows:

Standard size—

Complete with bolts and nuts...............

each....

2.98

Extra clip with bolts and nuts...................

do......

.52

Larger size—

Complete with bolts and nuts...............

each....

3.59

Extra clip with bolts and nuts...................

do......

.62

(Difference in price between standard size and larger size is due to additional cost of material. The larger size being 24 inches long by 2 1/2 inches wide, is stronger.)

xxx xxx xxx

You have seen the working model of the double utility cross-arm. Permit us to enumerate some of the advantages:

1. It does not cost much more than the ordinary cross-arms now on the market which looses its utility as soon as the lines are increased.

2. When increase of business demands additional lines the nominal cost of the extra clip for the purpose does away with the necessity of reinstalling the lines, first, and second, it saves the cost of wood cross-arms which, of necessity, entails the higher cost of up-keep.

xxx xxx xxx

4. We guarantee every component part of the cross-arm against any defect of manufacture assuring you the same high grade material for all time.

5. This cross-arm is made in our own factory, right here in the City of Manila, which is a decided advantage for meeting rush orders.

xxx xxx xxx

We want to call your special attention towards our larger size which we saw fit to manufacture in the following dimensions: Twenty-four inches long by two and one-half inches wide, thusly allowing a total spread of nearly 48 inches. As its whole is more rugged it permits the lines to be taut enough to prevent contact among the lines in a strong wind.

xxx xxx xxx

With our Double Utility Cross-Arms you can start a line just as easy and practically as cheap as at present and when business justified the increase of lines, all you do is buy extra clips from us and install them in no time, saving the cost of wood cross-arms and the reinstallation of the old lines.

It is then alleged that the Bureau of Supply, through its then a Purchasing Agent, awarded the contract to the petitioner as follows:

This award binds the contractor to furnish the Government the supplies herein enumerated, subject to the printed conditions on back hereof, or as expressly modified hereby, and entitles him to full payment of the value thereof on compliance with these conditions.

Quantity

Unit

Description

Unit price

Time of delivery, calendar days

8,200

only

Cross-arms, cast iron, complete with bolts and nuts to be made as per sample submitted to the Director of Posts.

3.95 each ___

Delivery will commence in 10 days, and complete delivery to be made in 75 days.

3,100

only

Extra clips with
bolts and nuts.

NOTE. -- It is understood that the contractor guarantees the bending strain of the cross-arms should not be less than 1,200 pounds (to fracture) by the method used by the Bureau of Science in test made under Laboratory Report No. 161779, dated March 24, 1926.

.65 each

It is understood that a discount of 3 per cent is to be allowed on the above prices.

which, among others, had the following general conditions:

2. Delivery of said supplies is to be made within the time as stated on face hereof, subject to inspection and acceptance by the Purchasing Agent or his authorized representative; unless otherwise stated, delivery is to be made to the Receiving Room, Bureau of Supply.

That about June 9, 1926, the petitioner completed the delivery of such cross-arms, for which the Bureau of Supply issued a receipt and paid the purchase price in full, amounting to P30,419.20. That on June 8, 1926, the Acting Purchasing Agent placed another order with the petitioner as follows:

xxx xxx xxx

GENTLEMEN: With reference to our Letter Order No. 19582 dated March 27, 1926, for cross-arms, I have the honor to advise you that you are hereby authorized to make delivery to the Bureau of Posts of 8,200 more cross-arms on the same specifications, price, and under the same conditions as stated to the letter order referred to. In other words, you are to furnish a total, on this order, of 16,400 cross-arms.

xxx xxx xxx

That pursuant to this order, the petitioner delivered, through the Bureau of Supply, to the Purchasing Agent, the full amount of cross-arms specified in that order, for which the Purchasing Agent delivered to the petitioner Bureau of Supply Warrant No. 811044 for P9,875.86, as a partial payment, and thereafter warrants for P12,292.52 and P6,189.89, the last two of which were sent to the Insular Auditor for signature. That he refused to countersign those warrants, claiming that then petitioner had not complied with its contracts which called for 32,800 pieces of cross-arms instead of 16,400 pieces, as delivered by the petitioner. It is alleged that this contention is contrary to the tenors of the contracts as understood by both the petitioner and the Purchasing Agent. That is the legal duty of the Insular Auditor to countersign the warrants in question and that his refusal to do so is illegal and arbitrary, and is a gross abuse of discretion. That the petitioner has made repeated request upon the Insular Auditor to countersign the warrants, but he has refused to do so. Petitioner prays that the writ of mandamus be issued ordering the Insular Auditor to countersign the two warrants in question, and that the Purchasing Agent be ordered to deliver them when so countersigned to the petitioner.

To the petition, a demurrer was filed by the Insular Auditor upon the ground that it did not state facts sufficient to constitute a cause of action, and that the court has no jurisdiction. After arguments, the demurrer was overruled, and the Insular Auditor filed an answer in which he admits paragraphs 1, 2 and 3 of the petition, and denies all the allegations except as herein after admitted, and, as a first special defense, alleges the writing of the letter to the Director of Posts on March 17, 1926, as alleged in the petition. That on March 22, 1926, the Director of Posts requested the Bureau of Supply to purchase 8,200 cross-arms of the kind offered by the petitioner, with extra clips, as follows:

It is understood that the stock of standard two-line iron cross-arms (the kind hereto used by the Bureau), costing P3.11 each, including surcharges of the Bureau of Supply, is now exhausted.

That on March 27, 1926, the Purchasing Agent awarded the contract to the petitioner for 8,200 cast iron cross-arms and 3,100 extra clips, as alleged in the petition. It is then alleged:

4. That the sample of the cross-arm mentioned in the above award of contract submitted to the Director of Posts consisted of two pieces which could be fastened to a telegraph pole by means of bolts and nuts so as to form a cross-arm is attached to this answer marked Exhibit 1 and made a part hereof.

5. That previous to, and at the time the request of the Bureau of Posts to the Bureau of Supply referred to in paragraph 2 of this defense was made, the Bureau of Posts through the Bureau of Supply, had purchased and received and was purchasing and receiving from the United States malleable iron cross-arms consisting of two pieces at P3.11 per cross-arm, which cross-arm were for all practical purposes similar to the cross-arms offered for sale by petitioner, and such facts were known at the time by the petitioner.

6. That the award of contract quoted in paragraph 3 of the special defense called for 8,200 cross-arms (each cross-arm consisting of two pieces) and the parties so understood.

7. That on or about June 9, 1926, petitioner delivered to the Bureau of Posts 4,100 cross-arms consisting of two pieces and 3,100 extra clips, but through mistake or oversight, the property clerk of the Bureau of Posts, believing that the cross- arm consisted of only one piece, signed receipt prepared by the petitioner for a total of 8,200 cross-arms.

8. That in view of the above receipts signed by mistake as above stated, the Bureau of Supply paid the petitioner the sum of P30,419.20 in full payment of the award of contract transcribed in paragraph 3 of this special defense.

The awarding of the second contract, as alleged in the petition.

It is then alleged:

10. That pursuant to the last mentioned order, petitioner delivered to the Bureau of Posts 4,100 cross-arms, each cross-arm consisting of two pieces; but through mistake or oversight, the property clerk of the Bureau of Posts, believing that a cross-arm consisted of one piece only, signed receipts for a total of 8,200 cross-arms prepared by the petitioner.

11. That on the account of deliveries mentioned in the preceding paragraph, the Bureau of Supply paid to the petitioner on September 16, 1926, P9,875.86 by warrant No. 811044, and subsequently issued in favor of same petitioner warrants Nos. 812146 and 812568 for the total amount of P18,482.41.

12. That the Insular Auditor, having been informed and having found after a thorough investigation that of the 16,400 cross-arms called for in the two orders of the Bureau of Supply mentioned in paragraph 3 and 9 of this special defense, only 8,200 cross-arms have been delivered, refused to countersign warrants Nos. 812146 and 812568, and, after several hearings in which the petitioner and his counsel, the Director of Posts and the Purchasing Agent were present and explained their views, rendered the following decisions.

That for such reasons, the Insular Auditor refused to countersign the warrants.

As a second special defense, it is alleged that this is an action against the Government without its consent, and that the claim in question was submitted by the petitioner to the Insular Auditor and by him decided within two months after it was presented.

As a third special defense, it is alleged that the warrants in question have been cancelled, and that there is not now any appropriation for their payment.

As a fourth special defense, it is alleged that the claim of the petitioner was decided adverse to it by the respondent in the excercise of the power granted to him by the Jones Law and the acts of the Philippine Legislature, and that his decision are final and conclusive, and will not be reviewed by this court, and he prays that the action be dismissed, with costs.

After the evidence was taken on such issues and briefs filed by respective parties, the respondent applied for, and obtained, leave to introduce further evidence, which was taken, and the case is now submitted for final decision.

JOHNS, J.:

Ruling Case Law, vol. 18, p. 128, says:

41. In General. — It is a well established general rule that only specific legal rights are enforceable by mandamus, and the right sought to be enforced must be certain and clear, it is one of the highest writs known to our jurisprudence and will not be issued in cases where the right is doubtful.

This court has held that it is fundamental that the duties to be enforced by mandamus must be those which are clear and enjoined by law or by reason of official station, and that petitioner must have a clear, legal right to the thing demanded, and that it must be the legal duty of the defendant to perform the required act.

It is now the settled law of this court that mandamus will lie to compel the Insular Auditor to perform a ministerial act, and that it is for the court and not for the Insular Auditor to say what is not a ministerial act.

Be that as it may, the real question involved in this case is the legal construction of the contract between the petitioner and the Government made by and through its Purchasing Agent, and the powers and duties of the Insular Auditor are merely incidental in the construction of the contract.

It is admitted that prior to the making of the contract in question the Government was purchasing its cross-arms from the United States at a cost of P3.11 for each cross-arm, a sample of which is in the record, known as Exhibit 2. This cross-arm consists of two pieces which are fastened around the pole by means of nuts and bolts, and from the end of either piece, the wires are strung. It is made of malleable iron, and its length is about 35 inches, leaving a distance between the opposite wires on each end of the cross-arm of about 32 inches. Such in general were the cross-arms in use at a cost to the Government of P3.11, when the petitioner submitted its offer of March 17, 1926, in which it is said:

Larger size—

Complete with bolts and nuts................

each....

P3.59

Extra clip with bolts and nuts.................

do......

.62

And "You have seen the working model of the double utility cross-arm." "It does not cost much more than the ordinary cross-arms now on the market which looses its utility as soon as the lines are increased."

And "With our Double Utility Cross-Arms you can start a line just as easy and practically as cheap as at present and when business justifies the increase of lines, all you do is buy extra clips from us and stall them in no time, saving the cost of wood cross-arms and the reinstallation of the old lines." From which it is very apparent that the petitioner stated and represented that its cross-arm would not cost much more than the ordinary cross-arms would not cost much more than the ordinary cross-arms now on the market, and that the Government could start a line just as easy and practically as cheap as at present. In the very nature of things, that specific language must have reference to the cross-arms for which the Government had been paying P3.11 when complete.

The petitioner's proposition to furnish the cross-arms to Topacio, as Director of Posts, was made on March 17, 1926, and on March 22, 1926, Topacio requested the Bureau of Supply to purchase 8,200 cross-arms in which he says:

It is understood that the stock of the standard two-line iron cross-arms (the kind hereto used by the Bureau), costing P3.11 each, including surcharges of the Bureau of Supply, is now exhausted.

And that the kinds offered by the petitioner "are acceptable to this office if no cheaper one can be obtained elsewhere," and "that the two-line cross-arms, are of the same strength and durability as the kind we are using, and that the four- line cross-arms are twice as strong as the two-line cross-arms." It is suggested that the samples be obtained from Zamora and sent to the Bureau of Science, and he says that "the distance between the holes of two-line cross- arms must be exactly the same as that between the holes of the kind we are using, and the distance between those of the four-line cross-arms must be at least 12 inches."

Such are the specific instructions which were given by Topacio, as Director of Posts, to the Purchasing Agent.

The whole length of the two combined pieces of the cross-arm of the petitioner, known in the record as Exhibit 1, is 39 1/2 inches, and the distance between the line on each end is 37 inches, or 5 inches more than the distance between the end lines on Exhibit 2. But in the event that four lines are strung on Exhibit 1, the distance from each end line to the center line is 9 inches only, as against the instructions of the Director of Posts which says that "the distance between those of the four-line cross-arms must be at least 12 inches," and further statement that the petitioner's cross-arms are "acceptable to this office if no cheaper ones can be obtained elsewhere." That is to say, the Purchasing Agent of the Bureau of Supply had specific instruction as to both the kind, quality and dimensions and probable cost of the cross-arms, for which the requisition was made, and specific reference was made to the cost of P3.11 of the cross-arm now in use. In the face of those instructions, the Purchasing Agent, acting for, and on behalf of, the Government, entered into a contract with the petitioner, and now claims, and testified, that it was his understanding that the petitioner should have and receive 3P.59 for each piece of the cross-arm, or a total of P7.18 for the two pieces when joined together as one cross-arm, and in the event that four lines are used, the petitioner should have sixty centavos (P0.60) for each extra clip, with bolts and nuts. That is to say, that the actual cost of cross-arm of the petitioner complete and ready for use with two lines is P7.18 as against P3.11, for which it was formerly purchased, and that the actual cost of the petitioner's cross-arm complete and ready for use, with four lines, including the extra clips, with bolts and nuts, is P7.78.

Even so the petitioner vigorously and forcibly contends that was the contract which it made by the Government, and that the Purchasing Agent, who made the contract, testified that under the terms and provisions of the contract, the petitioner should have and receive 3.59 for each piece of the two pieces of the cross-arm, and that he so understood it, and that such construction and understanding of the Purchasing Agent is binding on the Government. In other words, that the Bureau of Posts made a requisition on the Bureau of Supply for the purchase of 8,200 cross-arms, with specific advice that the Government had been paying P3.11 for its two-line cross-arms then in use, and that the cross-arms of the petitioner "are acceptable to this office if no cheaper ones can be obtained elsewhere," and that "the distance between those of the four-line cross-arms must be at least 12 inches," and that by reason of the fact that the Purchasing Agent entered into a contract with the petitioner of the purchase of the cross-arms in question, the Government is now bound not only by the contract but it also bound by the construction of the contract as it is construed by the Purchasing Agent. This contention overlooks the underlying, fundamental fact, first, that after the contract is once made, it is the duty of the courts, and not of the Purchasing Agent, to construe it legal force and effect, and, second, that the cross-arms were purchased by the Bureau of Supply for and on the account of, and as the agent of, the Bureau of Posts, and that the powers and duties of the Purchasing Agent are like those of any other agent.

Ruling Case Law, vol. 22, page 461, says:

124. Duty of Good Faith. — Every public officer is bound to perform the duties of his office faithfully and to use reasonable skill and diligence and to act primarily for the benefit of the public. In other words he is bound, virtute Officii, to bring to the discharge of his duties that prudence, caution and attention which careful men usually excercise in the management of their own affairs.

Tested by that rule, it was the duty of the Purchasing Agent to follow the specific instructions of the Director of Posts as to the kind, cost and quality of the cross-arms, and he had no legal right to make any contract which violated the tenor of those instructions.

Section 2041 of the Administrative Code, as amended by Act No. 2864, provides:

Functions of Bureau of Supply. — It shall be the function of the Bureau of Supply to procure and finish the supplies to the various Offices, officials, and branches of the Government and to other person entitled to make purchases through said Bureau, then same being required for official and other lawful use; and in the absence of special provision, all purchases of supplies for the use of various Departments, Bureaus, and Offices of the Insular Government or for the use of a chartered city or any province or municipality shall be made exclusively through this Bureau.

The Secretary of Commerce and Communications may also, in his discretion, authorize the performance of the same service for the authorities of the United States in the Philippine Islands or for other person therein.

Section 2045 provides:

Requirement of requisition. — No order for supplies shall be filled by the Bureau of Supply for any branch of the Government except upon written requisition as herein below provided.

And section 2046 says:

Officers having authority to draw requisitions. — Insular requisitions shall be drawn by the chief of Bureau or Office concerned or other officers having control of the appropriation to which expenditure is chargeable; . . .

In the instant case, the requisition of the Director of Posts was made under specific instructions as to what he wanted and the probable cost and dimensions of the cross-arms. In violation of those instructions, the Purchasing Agent entered into a contract with the petitioner to furnish the cross-arms, and in legal effect to pay P7.18 for a two-line cross-arms, for which the Government was formerly paying P3.11, and the cross-arms so purchased, when used with four lines, have a space of 9 inches only between the outside and center lines, as against the specific instructions of the Director of Posts, that "the distance between those of the four-line cross-arms must be at least 12 inches."

It is a matter of common knowledge that the use of electricity is very dangerous, and that when the wires are too close to each other, electricity will jump from a high tension wire to a low tension wire, or from a live wire to a dead wire, and it was for such reason that in his instructions the Director of Posts specified that "the distance between those of the four-line cross-arms must be at least 12 inches." That was a wise precaution which was intended to guard against accidents and injuries. Yet the Purchasing Agent entered into a contract with the petitioner for the purchase and sale of its double utility cross-arm which has a space of 9 inches only between the end and center lines when it is used as a four-line cross-arm. It must follow that if the space of 12 inches between lines is required and necessary for safety in operation, the cross-arm of the petitioner would not be of any value to the Government, and could not be used as a four-line cross-arm, for want of the required space of "12 inches at least between the four lines."

Again, in common parlance and the ordinary use of language, a cross-arm is construed to mean an arm on each side of a pole, and in a common every-day use, no one ever speaks of cross-arm as on one side only of a pole. Here, again, counsel for the petitioner concedes that the use and ordinary meaning of the word "cross-arm" is an arm on both side of a pole. But, again, he contends that the Government is bound by the construction placed on the contract by the Purchasing Agent, and his evidence to the effect that the word 'cross-arm', as used in the contract, was intended to be applied and limited to one piece or one-half of the cross-arm, and that the contract must be so construed.

As stated, the real question involved in this case is the construction of the contract which the petitioner made with the Government, and it is true that the Purchasing Agent testified as to his construction of that contract. But in the final analysis, it is for the court and not for the Purchasing Agent to construe the legal force and effect of the contract.

Section 2051 of the Administrative Code, as amended by Act No. 2864, provides that:

Charges for supplies. — For services rendered and supplies furnished, the Bureau of Supply shall charge the cost thereof plus a surcharge not in excess of seven and one-half per centum which shall be fixed by the Purchasing Agent, with the approval of the Secretary of Commerce and Communications.. . .

That is to say, that in the making of purchases on requisitions, the Bureau of Supply acts as an agent, and is paid for its services. In the instant case , the Purchasing Agent was acting for, and representing, the Bureau of Posts, which was his principal, in the purchase of the cross-arm, and the Bureau of Posts gave the Bureau of Supply specific instructions as to the cost, kind, quality and dimensions of the cross-arms. In the very nature of things, the Purchasing Agent should have more or less latitude in the purchase of the cross-arm, and a substantial compliance with his instructions would be sufficient. But even so, in the instant case, by his own evidence, the Purchasing Agent entered into a contract with the petitioner to purchase 8,200 cross-arms which when used for two lines would cost the Government P29,438, when it appears and is admitted that the price which the Government was previously paying for a similar two-line cross-arm would have amounted for that number to P12,751 only. Yet the Purchasing Agent received commission for his services, and in the making of such purchase, he was acting for, and representing, the Government.

The record is conclusive that at the time the petitioner wrote its letter of March seventeenth, it knew that the Government was then paying P3.11 for a two-line cross-arm, and it then said:

1. It does not cost much more than the ordinary cross-arms now on the market which loses its utility as soon as the lines are increased.

And that "you can start a line just as easy and practically as cheap as at present."

The petitioner now seeks to enforce a contract with the Government as it is construed by the Purchasing Agent, and to force the Government to pay P3.59 for each of the two pieces of the cross-arm, or a total of P7.18 for each two-line cross-arm complete, as against a cost of P3.11 which the Government was previously paying for a similar two-line cross-arm. It also appears that on March 30, 1926, and about the time of the original contract, the petitioner sold to the Bureau of Supply forty double utility cross-arms at P3.48 each, and there is evidence tending to show that the forty cross-arms in question consisted of eighty pieces, or two pieces for each cross-arm, and this evidence is not explained or denied by the petitioner. It is conceded that all previous cross-arms purchased under the contract now in question were delivered and paid for at the rate of P3.59 for each of the two pieces of the two-line cross-arms, or a total of P7.18 for the two-line cross-arm complete.

The Insular Auditor claims and alleges, in legal effect, that such previous payments were made through an oversight or mistake, and that the petitioner should be paid P3.59 for each cross-arm, and that under the contract, a cross-arm consists of two pieces and not one, as the petitioner contends.

It is fair that the cross-arm of the petitioner is heavier and made of better material than those which were formerly purchased by the Government at P3.11, and that it is a home product, which would account for some of the difference in price between the respective cross-arms.

In the final analysis, we have this situation: The petitioner is now seeking to enforce the payment of its claim upon the theory that it is entitled to have and receive P3.59 for each one of the two pieces of its double utility cross-arm, and to compel the Insular Auditor to sign the warrants in question in payment. As stated, the petitioner, as a condition precedent, must both allege and prove a clear, legal right to the granting of the writ. The question presented involves the construction of contract and its legal force and effect, and the powers and duties of the Purchasing Agent. As we analyze the record, there is a failure of proof. To say the least, the legal rights of the petitioner are not well defined, clear, definite and certain. There is a serious doubt as to the authority of the Purchasing Agent to make the contract, which he claims to have made, or that it should be construed as he construed it, or that the Government is bound by his construction.

We have given this case the careful consideration which its importance deserves, and are clearly of the opinion that the petitioner has failed to make out a case which would justify this court in issuing the writ of mandamus to compel the Insular Auditor to countersign the warrants in question.

The petition is dismissed, with cost against the petitioner. So ordered.

Avanceña, C.J., Johnson, and Villamor, JJ., concur.
Villa-Real, J., concurs in the result.

Separate Opinions

STREET, J., concurring:

I was at first impressed by the fact that before this contract was made the petitioners submitted a sample of the cross-arm which they were to supply, and this sample (without the clips, bolts and the nuts) consisted only of one piece, from whence it might be inferred that the article which was the subject of contract was intended to comprise only of one piece. It appears, however, that the two ends of the cross-arm proper are identical pieces, and it was not intended and expected that one of these pieces alone should be bracketed to the telegraph post for the purpose of suspending telegraph wires. On the contrary, it was intended that the two pieces together, extending in opposite directions, should be bolted to the telegraph pole. This shows that the cross-arms which were the subject of this contract were the ordinary cross-arms with ends extending from the telegraph pole in both directions.

From the contract itself it also appears that the petitioner represented that the cross-arm to be supplied under this contract would be complete. It results that, by the proper interpretation of the contract, the petitioner were bound to supply complete cross-arms, consisting of two pieces, in the form commonly understood in the use of this term in English. The Insular Auditor is therefore not compelable to countersign the warrant drawn in the amount to which the petitioners suppose themselves entitled, and this notwithstanding the fact that the Insular Purchasing Agent may have understood the situation differently.

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