Tan C. Tee & Co. v. Wright
REITERATIONFacts
The Antecedents: Tan C. Tee & Co., a general mercantile partnership, sought a writ of mandamus against Ben F. Wright, the Insular Auditor, to compel the issuance of a certificate of availability of funds for the construction of the Iloilo marginal wharf. Funds for the project were derived from the sale of bonds authorized by Act No. 3417. The Insular Treasurer certified the availability of P1,592,385. The Director of Public Works advertised for bids, and Tan C. Tee & Co. submitted the lowest bid of P1,481,354. The Secretary of Commerce and Communications approved the award to Tan C. Tee & Co. The Director of Public Works then requested the Insular Auditor for the certificate of availability of funds, submitting a copy of the proposed contract. Procedural History: The Insular Auditor refused to issue the certificate, citing the need for further information and later stating the contract was void and not let to the lowest responsible bidder. The Director of Public Works defended the procedure, asserting it conformed to established practice and that the award was justified. The matter was elevated to the Governor-General, who ruled against the Insular Auditor, finding his actions to be usurpation of administrative functions. The Governor-General forwarded the issue to the Secretary of War. The Secretary of War decided that the Insular Auditor had no legal authority to control the Director of Public Works' discretion in determining the lowest responsible bidder and no authority to refuse the certificate based on such review. The Secretary of War directed that the ruling be furnished to the Insular Auditor. The Petition: Tan C. Tee & Co. filed an original action for mandamus to compel the Insular Auditor to issue the certificate of availability of funds.
Issue(s)
Whether the Insular Auditor has the authority to review the administrative discretion of the Director of Public Works in determining the lowest responsible bidder. Whether the award of a contract by the Director of Public Works, prior to securing the Insular Auditor's certificate of availability of funds, renders the contract void. Whether the duty of the Insular Auditor to issue a certificate of availability of funds, when all prerequisites are met and funds are available, is ministerial or discretionary.
Ruling
The Supreme Court granted the petition for mandamus, ordering the Insular Auditor to issue the certificate of availability of funds within fifteen days. The Court held that the Insular Auditor has no legal authority to control the discretion of the Director of Public Works in determining the lowest responsible bidder and that his duty to issue the certificate of availability of funds is ministerial when the legal requirements are met and funds are available.
Ratio Decidendi
On the Insular Auditor's authority to review the determination of the lowest responsible bidder: The Court held that the law grants the power to award contracts to the lowest responsible bidder exclusively to the Director of Public Works, not the Insular Auditor. The Insular Auditor's role is to bring irregular expenditures to the attention of the proper administrative officer, not to veto Government contracts. The case of Wright vs. Ynchausti & Co. was cited, emphasizing that the Auditor's function is ministerial when the warrant is drawn by the proper officer upon a decision of the proper tribunal and is applicable to an existing appropriation, without administrative discretion over the merits of the claim. On the validity of the contract awarded prior to the certificate of availability of funds: The Court clarified that awarding a contract is not equivalent to entering into it. Section 607 of the Administrative Code requires a copy of the proposed contract to be submitted for the certificate, implying that the award must precede the proposed contract. The Auditor's argument that the contract is void because the certificate was not secured before the award was deemed circular reasoning. The Court found that all steps were taken to consummate the contract except for securing the certificate and executing the formal contract, and no illegal act was committed in this process. On whether the duty to issue the certificate is ministerial or discretionary: The Court determined that the duty of the Insular Auditor to issue the certificate of availability of funds is strictly ministerial. This conclusion was based on the fact that funds were duly appropriated, the Insular Treasurer had certified their availability, the appropriation was recorded by the Auditor, and the Auditor himself admitted that ample funds were available. When the facts are admitted and the law requires certification of these facts, the Auditor's role becomes a ministerial act, enforceable by mandamus. The Court distinguished this from cases where the Auditor exercises administrative discretion, citing Wright vs. Ynchausti & Co. and Posadas vs. City of Manila.
Main Doctrine
The Insular Auditor's duty to issue a certificate of availability of funds, when all legal prerequisites are met and funds are demonstrably available, is ministerial and enforceable by mandamus. The Auditor cannot usurp administrative functions vested in other officials, such as determining the lowest responsible bidder.