Philippine Supreme Court Jurisprudence

Upon consideration of respondents’ motions for reconsideration with Motions for New Trial and for Oral Argument, vis a vis the majority decision of September 15, 1975 which reversed the trial court’s decision of July 13, 1973 and instead "declared legal and valid" the December 28, 1972 contract for Asiatic’s management and operation of all the City of Manila’s thirty-five (35) public markets and talipapas for a period of ten (10) years and the February 13, 1974 post-decision amended contract extending the period to twenty-five (25) years, I am constrained to reconsider my qualified concurrence in my previous separate opinion (that "the serious objections against the December 28, 1972 contract [viz. lack of authority, and that the contract is ultra vires and grossly disadvantageous] appear as per the main opinion to have been overridden by the President’s Memorandum of January 12, 1973") and to vote for the reconsideration and setting aside in toto of the said majority decision of September 15, 1975.

1. It seems manifest that as correctly stressed by the lower court, "it is the Municipal Board of the City of Manila which has the authority (under its charter R.A. 409, sec. 18) not only to provide for the establishment and maintenance of public markets, but also to prohibit or permit the operation of public markets by any person, entity, association or corporation other than the City of Manila. Under ordinance No. 2898, the Municipal Board prohibited the maintenance of public markets within the territorial limits of the City of Manila by any person other than the City itself. Accordingly, the City of Manila (there to enter into a contract with ASIATIC, a private corporation, which would grant to the latter authority to manage, operate and maintain the city public markets, which are all situated within the territorial limits of the City of Manila." 1

2. To set aside this fundamental bedrock of the lower court’s opinion declaring null and void the contract for lack of authority, the majority opinion availed of new facts and resolved the new factual and legal issues arising the reform although admittedly these new facts and developments were never raised before nor considered by the lower court as they "were not even existing yet during the first joining of the issues (even) in this (Supreme) Court" 2 in the very language of the majority opinion.

These new facts refer to events that occurred after the lower court rendered its adverse decision of July 13, 1973, principally, the issuance on November 26, 1973 of Presidential Decree No. 345" (A)uthorizing the reversion of the accumulated thirty (30%) percent sinking fund to the general fund of the City of Manila, for the undertaking of its public works projects, and for other purposes", and the Municipal Board’s enactment on January 3, 1974 of Ordinance No. 7451 entitled "An ordinance authorizing his Honor, the Mayor, to lease vacant, unused and unencumbered patrimonial properties, or other leasable patrimonial properties to reputable and highly qualified persons, firms or corporations, under certain conditions." chanroblesvirtual|awlibrary

3. It should also be underscored that a purported unnumbered Resolution allegedly adopted January 12, 1973 denominated "Resolution expressing concurrence with and support for the contract entered into by the City of Manila turning over the management and operation of public markets and talipapas in the City to a private concern" and supposedly signed by twelve members of the Board which the majority opinion pronounced as "indicative of their ratification, required by Republic Act 6039, of the (December 28, 1972) contract which had been precisely recommended by the Market Committee" 3 was never identified below nor introduced in evidence by petitioners in the lower court notwithstanding that they had all the time and opportunity to do so and was for the first time submitted in this Court as Annex G of the petition in G.R. No. L- 37248 filed on August 27, 1973 by petitioner City of Manila in its appeal from the lower court’s adverse decision. 4

As to such alleged resolution of ratification of January 12, 1973, very grave factual and legal questions have been raised by the movants for reconsideration, inter alia. that new issues with factual facets and complications which were not presented and passed upon by the lower court are barred by time-honored doctrine from being raised and considered for the first time on appeal, as otherwise "courts of justice would become veritable battlegrounds of fake documents submitted after termination of actual hearings" 5, that the said resolution is "fake", since resolutions validly adopted by the Municipal Board are not signed by councilors but only by the Vice-Mayor or Presiding Officer, the board secretary, the City Mayor and his secretary as the certifying officials, and that such non-existence of the alleged resolution as duly certified by H.R. Noriega as assistant secretary of the board was arbitrarily brushed aside by the majority decision with the statement that "there is no showing that the one who made such certification is the legal custodian of the records of the Board", although petitioners never challenged in their pleadings that Mr. Noriega is indeed the legal custodian of the board records.

4. These new factual issues involve a determination of the actual facts which is beyond the competence of this Court — since this Court is not a trier, nor even a reviewer, of facts. Furthermore, since petitioners appealed the trial court’s decision directly to this Court, the facts as found by the trial court are admitted and petitioners could raise no questions of fact but solely questions of law.

The trial court on the basis of the established facts submitted to and determined by it correctly held that "the City Mayor of Manila had not been authorized by any statute or ordinance to sign in behalf of the City" the contract with Asiatic; that "the recommendation of the Market Committee is obviously not a statute or ordinance;" that "in formulating policies and rules governing public markets, the same should first be submitted by the Market Committee to the Municipal Board for ratification, which was not obtained in the present case (clause IV, R.A. No. 6039)" ; and that the supplementary contract of March 30, 1973 did not embody one of the provisions for which the President had "expressed a desire for inclusion in the contract" 6 (viz, that "the public should be part owner of such markets by the public sale of shares" 7).

5. In their petitions at bar, the burden of petitioners’ submission was that the trial court erred in not declaring that the December 28, 1972 contract as supplemented by the March 30, 1973 agreement had been adopted and/or ratified by the President’s memorandum of January 12, 1973 and by Article XVII, section 12 of the 1973 Constitution (although this "constitutional ratification" argument was not raised in the trial court nor was it seriously pursued before this Court).

As already shown however, the majority opinion sustained the petitioners not on the facts and documents submitted to the trial court but on the basis of new facts and other developments not raised in nor considered by the trial court, namely, the alleged resolution of January 12, 1973, purportedly; signed by twelve board members (over the contrary certification of the board’s assistant secretary as to its non-adoption) and which the majority considered as "indicative of their ratification" ; 8 P.D. No. 345 issued on November 26, 1973 authorizing the reversion of 30% sinking fund from market fees and the appropriation thereof for the City’s public works projects which the majority considered "as the present equivalent of ratification by legislative enactment" ; 9 and the enactment of Ordinance No. 7451 on January 3, 1974 authorizing the leasing of "vacant, unused and patrimonial properties" without "a monopoly in favor of any corporation or enterprise" which the majority considered as "a more positive act of ratification, practically explicit, of the contract in issue." 10chanroblesvirtual|awlibrary

6. Fundamental due process and elementary fairness as well as the demands of an orderly procedure which squarely joins the issues militate against the majority’s reversal of the trial court’s adverse judgment on the basis of new averments and developments that were never raised in the trial court and on which the trial court was not given the opportunity of discharging its principal task to try and determine the actual facts. Respondents in their comment (answer) to the petition had timely raised the objection that "questions of facts and special defenses which were not aired in the lower court cannot properly be invoked now for the first time in this proceeding" 11

This is specially so where the majority opinion declares as valid the extension by agreement of February 13, 1974 of the contract from ten (10) to twenty-five (25) years up to the turn of the century in 1997 after the passage on January 3, 1974 of Ordinance No. 7451 where neither the extension agreement nor the ordinance were even the subject of the suits in the trial court. As stressed in my original dissent, any judgment on this Court’s part declaring "legal and valid" the 15-year extension to 1997 (without even waiting for the results of the original 10- year contract to expire in 1982 and the long-range developments and conditions that may intervene by then) which were never raised in issue nor considered by the trial court nor by the President for that matter is entirely premature and uncalled for.

7. And this is equally so where the majority opinion rejected respondents’ contention that the terms of the contract were grossly disadvantageous to the City and ruled that "we are not prepared to go along with respondents’ contention that the contract they are impugning is grossly disadvantageous to the City of Manila" notwithstanding that the trial court made no findings of the determinative facts since it deemed the same unnecessary in view of its essential determination of nullity ab initio of the contract. Since the trial court made no findings of fact whatsoever on this question of the relative advantages and disadvantages of the contract, and this Court is not a trier of facts, the least that should be done on this aspect (assuming the validity of the contract) is to remand the case for the trial court’s determination of the material facts.

8. It is settled doctrine that ratification of an unauthorized contract must be clear and express so as not to admit of any doubt or vagueness. The majority opinion’s theory that the Asiatic December 28, 1972 contract was impliedly ratified fails this test and should be set aside for the following considerations:chanrob1es virtual 1aw library

(a) The President’s memorandum of January 12, 1973 is clearly not a Presidential Decree that could be deemed as having validly repealed Republic Acts 409 and 6039 which vest the power and control over the operation of public markets in the Municipal Board. At most, it merely expressed the Presidential wish for the public to be "part owner of such markets by the public sale of shares" (without specifics which still have to be laid down, as stated in my original dissent) and which Asiatic has not complied with up to now (three years after the contract) since it has refused to sell any shares to the organized market cooperatives in spite of repeated demands, according to respondents. 12 Withal, there appears to be basis for the respondents-movants’ contention that "a deeper analysis of the said President’s memorandum would reveal a misconception of the real nature of the contract in issue. It would seem that the President was made to believe that Asiatic, under the terms of the contract, had already become the owner of the public markets sad that he would want Asiatic to sell its shares to the vendors and to the general public relative to such ownership." 13

(b) The alleged signed resolution of January 12, 1973, aside from the serious factual question as to its existence or adoption, as timely raised in respondent’s comment (answer) 14 , cannot be taken as a ratification of the contract, since as early as January 4, 1973 at the board’s first working session, the board had adopted a contrary resolution, stating that "the Municipal Board has not passed any ordinance or resolution which authorized the Mayor to enter into a contract covering public markets" and "requesting the Mayor to furnish the Municipal Board with copies of the contract, as well as all papers, communications and documents covering this particular transaction, for further appropriate action." The City charter and ordinances may not legally be amended or repealed by mere resolution, since certain procedural safeguards such as publication before and after the enactment of the repealing ordinance in newspapers of general circulation are mandatorily required. Furthermore, the board in its regular session of October 9, 1975, approved an official resolution belying reports that it "had authorized or ratified the lease of the City of Manila public markets to the Asiatic Integrated Corporation" and proclaiming that it "disclaim(ed) as it hereby disclaims the existence of any resolution or ordinance authorizing or ratifying the lease of the City of Manila public markets to the Asiatic Integrated Corporation." 15

(c) Ordinance No. 7451 enacted on January 3, 1974 cannot be taken either as a ratification of the Asiatic contract not only because of the above later resolution of October 9, 1975 disclaiming any such ratification but more so because of its own terms limiting the leasing of city properties to "vacant, unused and unencumbered patrimonial properties, or other leaseable patrimonial properties" (which excluded the public markets which were already leased to the market vendors) and prohibiting the leasing to any one corporation or enterprise since it would "create a monopoly."

9. In the light, furthermore, of current conflicting press reports that the City had accepted Asiatic’s withdrawal offer from the contract but that the City had sued Asiatic for recovery of the sum of P2.1 million in arrears, the basic question of the nullity of the contract as determined by the trial court, prescinding from the secondary if equally important question of whether the contract is grossly disadvantageous (the facts of which were not determined by the trial court and are not therefore before this Court) deserves the utmost serious consideration.chanroblesvirtualawlibrary

I vote, therefore, to set aside in toto the decision of September 16, 1975 and at the least for the remand of the cases to the trial court for a new trial and proper reception and determination of the material facts (as may be brought out by evidence duly submitted by the parties), which facts were not before the trial court by virtue of their occurrence after the rendition of its decision of July 13, 1973.

Makasiar, J., concurs.

August 9, 1976 - NOTICE OF JUDGMENT

S i r :chanrob1es virtual 1aw library

Please take notice that on August 3, 1976 a resolution, quoted hereunder, was rendered by the Supreme Court in the above- entitled cases, with the separate dissenting opinion of Justice Claudio Teehankee, copy attached, the original of which is now on file in this office:jgc:chanrobles.com.ph

"L-37187 (Asiatic Integrated Corporation v. Hon. Federico Alikpala, ete., Et. Al.); L-37248 (The City of Manila, Et. Al. v. Hon. Federico Alikpala, etc., et al); and L-37249 (Asiatic Integrated Corporation v. Hon. Federico Alikpala, etc., Et. Al.). Considering the grounds of respondents’ motion and supplemental motion for reconsideration of the decision of September 15, 1975 with motion for new trial as well as the respective comments and oppositions of petitioners Asiatic Integrated Corporation, City of Manila and City officials, to the said mention and supplemental motion, the Court Resolved by a vote of eight to two to DENY the motion for reconsideration. Justice Fernando, who presided, certified to the vote of Chief Justice Castro.

The Court further Resolved to NOTE: (a) the manifestation dated December 5, 1975 of the counsel for petitioner Asiatic Integrated Corporation; and (b) the supplemental;. petition-manifestation- memorandum dated December 22, 1975 of Federico A. Blay, counsel for the Manila Market Vendors Association. Teehankee, J., dissents in a separate opinion. Makasiar, J., concurs in the dissenting opinion of Justice Teehankee."cralaw virtua1aw library

Very truly yours,

PEDRO B. RABADON

Asst. Division Clerk of Court

Messrs. Dakila F. Castro & Assoc. (x)

Counsel for Petitioner

2nd Flr., Castro Bldg.

58 Timog Avenue, Quezon City

Atty. Antonio H. Abad, Jr. (x)

Counsel for Private Respondents

3rd Flr., RCA Bldg.

8755 Paseo de Roxas

Makati, Rizal

Hon. Federico Alikpala (x)

CFI of Manila, Br. XXII

City Hall, Manila

The City Legal Officer (x)

City Hall, Manila

Mr. Andreciano F. Caballero (x)

2429 Bato St., Tecson, Gagalangin

Tondo, Manila

Atty. Federico A. Blay (x)

408 Ermita Ccnter Bldg.

13.50 Roxas Blvd., Manila

Endnotes:

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* See main decision in 67 SCRA 60.

1. Decision of lower court, pp. 7-8; Rollo, pp. 74-75; notes in parentheses supplied.

2. Majority decision, pages 25, 31; note in parentheses supplied.

3. Idem, at page 33, note in parenthesis supplied.

4. Item, at page 11.

5. Supplemental petition-manifestation-memorandum dated December 22,1976, page 6.

6. Rollo, pages 76-78

7. President’s memorandum, par. 3.

8. Majority opinion, page 33.

9. Idem, page 35.

10. Idem, page 37.

11. Rollo in L-37187, page 201.

12. Supplemental petition-manifestation-memorandum dated December 22, 1975, p. 24.

13. Idem, pp. 25-26.

14. Rollo in L-37187, p. 202.

15. Annexes 6 and 7, supplemental petition dated December 22, 1975.