Firstly, petitioners claim that the Complaint filed by respondent before the Regional Trial Court was done without exhausting administrative remedies. Petitioners aver that respondent should have first filed a claim before the Commission on Audit (COA) before going to the courts. However, it has been established that the doctrine of exhaustion of administrative remedies and the doctrine of primary jurisdiction are not ironclad rules. In Republic of the Philippines v. Lacap, [9] this Court enumerated the numerous exceptions to these rules, namely:
(a) where there is estoppel on the part of the party invoking the doctrine;
(b) where the challenged administrative act is patently illegal, amounting to lack of jurisdiction;
(c) where there is unreasonable delay or official inaction that will irretrievably prejudice the complainant;
(d) where the amount involved is relatively so small as to make the rule impractical and oppressive;
(e) where the question involved is purely legal and will ultimately have to be decided by the courts of justice;
(f) where judicial intervention is urgent;
(g) where the application of the doctrine may cause great and irreparable damage;
(h) where the controverted acts violate due process; (i) where the issue of non-exhaustion of administrative remedies has been rendered moot;
(j) where there is no other plain, speedy and adequate remedy;
(k) where strong public interest is involved; and
(l) in quo warranto proceedings.
In the present case, conditions (c) and (e) are present.
The government project contracted out to respondent was completed almost two decades ago. To delay the proceedings by remanding the case to the relevant government office or agency will definitely prejudice respondent. More importantly, the issues in the present case involve the validity and the enforceability of the "Contract of Agreement" entered into by the parties. These are questions purely of law and clearly beyond the expertise of the Commission on Audit or the DPWH. In Lacap, this Court said:
... It does not involve an examination of the probative value of the evidence presented by the parties. There is a question of law when the doubt or difference arises as to what the law is on a certain state of facts, and not as to the truth or the falsehood of alleged facts. Said question at best could be resolved only tentatively by the administrative authorities. The final decision on the matter rests not with them but with the courts of justice. Exhaustion of administrative remedies does not apply, because nothing of an administrative nature is to be or can be done. The issue does not require technical knowledge and experience but one that would involve the interpretation and application of law
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Under these circumstances, respondent may not validly invoke the Royal Prerogative of Dishonesty and conveniently hide under the State's cloak of invincibility against suit, considering that this principle yields to certain settled exceptions. True enough, the rule, in any case, is not absolute for it does not say that the state may not be sued under any circumstance.
... ... ...
Although the Amigable and Ministerio cases generously tackled the issue of the State's immunity from suit vis a vis the payment of just compensation for expropriated property, this Court nonetheless finds the doctrine enunciated in the aforementioned cases applicable to the instant controversy, considering that the ends of justice would be subverted if we were to uphold, in this particular instance, the State's immunity from suit.
To be sure, this Court -- as the staunch guardian of the citizens' rights and welfare -- cannot sanction an injustice so patent on its face, and allow itself to be an instrument in the perpetration thereof. Justice and equity sternly demand that the State's cloak of invincibility against suit be shred in this particular instance, and that petitioners-contractors be duly compensated -- on the basis of quantum meruit -- for construction done on the public works housing project.
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