Source: http://lawlibrary.chanrobles.com/index.php?option=com_content&view=article&id=82776:56622&catid=1579&Itemid=566
Timestamp: 2019-04-19 22:52:04+00:00

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The doctrine of in pari delicto, which stipulates that the guilty parties to an illegal contract are not entitled to any relief, cannot prevent a recovery if doing so violates the public policy against unjust enrichment.
To pay the cost of this suit.
Section 6. Assignment and Subcontract. - The contractor shall not assign, transfer, pledge, subcontract or make any other disposition of the contract or any part or interest therein except with the approval of the Minister of Public Works, Transportation and Communications, the Minister of Public Highways, or the Minister of Energy, as the case may be. Approval of the subcontract shall not relieve the main contractor from any liability or obligation under his contract with the Government nor shall it create any contractual relation between the subcontractor and the Government.
We do not concur with the CA’s finding that the guilt of Tarnate for violation of Section 6 of Presidential Decree No. 1594 was lesser than that of Gonzalo, for, as the CA itself observed, Tarnate had voluntarily entered into the agreements with Gonzalo.14 Tarnate also admitted that he did not participate in the bidding for the project because he knew that he was not authorized to contract with the DPWH.15 Given that Tarnate was a businessman who had represented himself in the subcontract as “being financially and organizationally sound and established, with the necessary personnel and equipment for the performance of the project,”16 he justifiably presumed to be aware of the illegality of his agreements with Gonzalo. For these reasons, Tarnate was not less guilty than Gonzalo.
WHEREFORE, we AFFIRM the decision promulgated on February 18, 2003, but DELETE the awards of moral damages, attorney’s fees and litigation expenses; IMPOSE legal interest of 6% per annum on the principal of P233,526.13 reckoned from September 13, 1999; and DIRECT the petitioner to pay the costs of suit.
9Rollo, pp. 16-34; penned by Associate Justice Remedios A. Salazar-Fernando, and concurred in by Associate Justice Ruben T. Reyes (later Presiding Justice and a Member of the Court, but already retired) and Associate Justice Edgardo F. Sundiam (retired/deceased).
13Nool v. Court of Appeals, G.R. No. 116635, July 24, 1997, 276 SCRA 149, 157.
17Rellosa v. Gaw Chee Hun, 93 Phil. 827, 831 (1953).
18Pajuyo v. Court of Appeals, G.R. No. 146364, June 3, 2004, 430 SCRA 492, 515.
19Avon Cosmetics, Incorporated v. Luna, G.R. No. 153674, December 20, 2006, 511 SCRA 376, 393-394.
25Hulst v. PR Builders, Inc., supra note 20, at 94-95; Menchavez v. Teves, Jr., G.R. No. 153201, January 26, 2005, 449 SCRA 380, 398-399.

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