2.

Heirs of Mendoza vs DPWH

GR 2013834, July 9, 2014

Facts
Mendoza, under the name of Superior Builders, was the winning bidder for the construction of
two road projects (Package VI and Package IX) in Benguet. During the preconstruction survey,
he alleged that the Package VI project had no road right of way (RROW). He further alleged
that the respondents conspired to make it appear that Superior Builders incurred a negative
slippage of 29% and recommended the forfeiture of the contracts of Package VI and Package
IX. DPWH blacklisted Superior Builders from participating in any bidding or entering into any
contract with DPWH for 1 year.

The trial court found Superior Builders cannot be faulted for its failure to perform its obligation
Upon appeal, the CA reversed the decision, adding that DPWH cannot be sued. Thus the case
at hand, filed by the heirs of Mendoza. Petitioners argue that by entering into contract, DPWH
waived its immunity from suit.

Issue
Whether DPWH’s contractual obligation was made in the exercise of its governmental function
and is therefore immune from suit.

Ruling
Yes, DPWH is immune from suit because it has no separate juridical personality of its own and
its functions are purely governmental.

The general rule is that a state may be not be sued unless it consents to be sued, either
expressly when a law provides or impliedly when it enters into a contract or it initiates the
litigation. In order for it to be a valid implied waiver, however, the contract must be entered
into by its proprietary or private capacity.

The contracts were entered into by DPWH in the exercise of its governmental functions.