Asiatic Integrated Corp. vs. Alikpala 72 SCRA 285

VOL. 72, AUGUST 3, 1976 285

Asiatic Integrated Corp. vs. Alikpala

No. L37187. August 3, 1976.*

ASIATIC INTEGRATED CORPORATION, petitioner, vs.HON. FEDERICO ALIKPALA, etc., et al., respondents.

No. L37248. August 3, 1976.

THE CITY OF MANILA, et al., petitioners, vs. HON.FEDERICO ALIKPALA, etc., et al., respondents.

No. L37249. August 3, 1976.

ASIATIC INTEGRATED CORPORATION, petitioner, vs.HON. FEDERICO ALIKPALA, etc., et al., respondents.

TEEHANKEE, J., dissenting:

Upon consideration of respondents motions forreconsideration with Motions for New Trial and for OralArgument, vis a vis the majority decision of September 15,1975 which reversed the trial courts decision of July 13,1973 and instead declared legal and valid the December28, 1972 contract for Asiatics management and operationof all the City of Manilas thirtyfive (35) public marketsand talipapas for a period of ten (10) years and theFebruary 13, 1974 postdecision amended contractextending the period to twentyfive (25) years, I amconstrained to reconsider my qualified concurrence

________________

* See main decision in 67 SCRA 60.

286

286 SUPREME COURT REPORTS ANNOTATED


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 andgrossly disadvantageous] appear as per the main opinion to

have been overriden by the Presidents Memorandum ofJanuary 12, 1973) and to vote for the reconsideration and

setting aside in toto of the said majority decision ofSeptember 15, 1975.

1. It seems manifest that as correctly stressed by the

lower court, it is the Municipal Board of the City ofManila 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 orpermit the operation of public markets by any person,entity, association or corporation other than the City ofManila. Under ordinance No. 2898, the Municipal Board

prohibited the maintenance of public markets within theterritorial limits of the City of Manila by any person otherthan the City itself. Accordingly, the City of Manila (thereto 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 theCity of Manila.

1

2. To set aside this fundamental bedrock of the lowercourts opinion declaring null and void the contract for lack

of authority, the majority opinion availed of new facts andresolved the new factual and legal issues arising the reformalthough admittedly these new facts and developmentswere never raised before nor considered by the lower courtas they were not even existing yet during the first joiningof 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 ofPresidential Decree No. 345 (A)uthorizing the reversion ofthe accumulated thirty (30%) percent sinking fund to the

general fund of the City of Manila, for the undertaking ofits public works projects, and for other purposes, and the

Municipal Boards enactment on January 3, 1974 ofOrdinance No. 7451 entitled An ordinance authorizing his

Honor, the Mayor, to lease vacant, unused and

________________

1 Decision of lower court, pp. 78; Rollo, pp. 7475; notes in parentheses

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

287

VOL. 72, AUGUST 3, 1976 287


unencumbered patrimonial properties, or other leasablepatrimonial properties to reputable and highly qualifiedpersons, firms or corporations, under certain conditions.

3. It should also be underscored that a purportedunnumbered Resolution allegedly adopted January 12,1973 denominated Resolution expressing concurrence withand support for the contract entered into by the City ofManila turning over the management and operation ofpublic markets and talipapas in the City to a privateconcern and supposedly signed by twelve members of theBoard which the majority opinion pronounced asindicative of their ratification, required by Republic Act6039, of the (December 28, 1972) contract which had beenprecisely recommended by the Market Committee

3 was

never identified below nor introduced in evidence bypetitioners in the lower court notwithstanding that theyhad all the time and opportunity to do so and was for thefirst time submitted in this Court as Annex G of thepetition in G.R. No. L37248 filed on August 27, 1973 bypetitioner City of Manila in its appeal from the lowercourts adverse decision.

4

As to such alleged resolution of ratification of January12, 1973, very grave factual and legal questions have beenraised by the movants for reconsideration, inter alia, thatnew issues with factual facets and complications whichwere not presented and passed upon by the lower court arebarred by timehonored doctrine from being raised andconsidered for the first time on appeal, as otherwise courtsof justice would become veritable battlegrounds of fakedocuments submitted after termination of actualhearings

5, that the said resolution is fake, since

resolutions validly adopted by the Municipal Board are not

signed by councilors but only by the ViceMayor orPresiding Officer, the board secretary, the City Mayor andhis secretary as the certifying officials, and that such nonexistence of the alleged resolution as duly certified by H.R.Noriega as assistant secretary of the board was arbitrarilybrushed aside by the majority decision with the statementthat there is no showing that the one who made suchcertification is the legal custodian of the records of theBoard, although petitioners never

________________

3 Idem, at page 33, note in parenthesis supplied.4 Idem, at page 11.5 Supplemental petitionmanifestationmemorandum dated December

22, 1975, page 6.

288



challeged in their pleadings that Mr. Noriega is indeed thelegal custodian of the board records.

4. These new factual issues involve a determination ofthe actual facts which is beyond the competence of thisCourtsince this Court is not a trier, nor even a reviewer,of facts. Furthermore, since petitioners appealed the trialcourts decision directly to this Court, the facts as found bythe trial court are admitted and petitioners could raise noquestions of fact but solely questions of law.

The trial court on the basis of the established factssubmitted to and determined by it correctly held that theCity Mayor of Manila had not been authorized by anystatute or ordinance to sign in behalf of the City thecontract with Asiatic; that the recommendation of theMarket Committee is obviously not a statute or ordinance;that in formulating policies and rules governing publicmarkets, the same should first be submitted by the MarketCommittee to the Municipal Board for ratification, whichwas 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 thePresident had expressed a desire for inclusion in thecontract

6 (viz, that the public should be part owner of

such markets by the public sale of shares7

).

5. In their petitions at bar, the burden of petitionerssubmission 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 Presidents memorandum of January 12,1973 and by Article XVII, section 12 of the 1973Constitution (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 documentssubmitted to the trial court but on the basis of new factsand other developments not raised in nor considered by thetrial court, namely, the alleged resolution of January 12,1973, purportedly signed by twelve board members (over

the contrary certification of the boards assistant secretaryas to its nonadoption) and which the majority considered

as indicative of their ratification;8

P.D.

________________

6 Rollo, pages 7678.

7 Presidents memorandum, par. 3.

8 Majority opinion, page 33.

289

VOL. 72, AUGUST 3, 1976 289


No. 345 issued on November 26, 1973 authorizing the

reversion of 30% sinking fund from market fees and theappropriation thereof for the Citys public works projects

which the majority considered as the present equivalent ofratification by legislative enactment;

9

and the enactment

of Ordinance No. 7451 on January 3, 1974 authorizing theleasing of vacant, unused and patrimonial propertieswithout a monopoly in favor of any corporation orenterprise which the majority considered as a more

positive act of ratification, practically explicit, of thecontract in issue.

10

6. Fundamental due process and elementary fairness as

well as the demands of an orderly procedure whichsquarely joins the issues militate against the majoritys

reversal of the trial courts adverse judgment on the basisof new averments and developments that were neverraised in the trial court and on which the trial court was

not given the opportunity of discharging its principal taskto try and determine the actual facts. Respondents in theircomment (answer) to the petition had timely raised the

objection that questions of facts and special defenseswhich 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, 1974of the contract from ten (10) to twentyfive (25) years up tothe turn of the century in 1997 after the passage onJanuary 3, 1974 of Ordinance No. 7451 where neither theextension agreement nor the ordinance were even the

subject of the suits in the trial court. As stressed in myoriginal dissent, any judgment on this Courts part

declaring legal and valid the 15year extension to 1997

(without even waiting for the results of the original 10yearcontract to expire in 1982 and the longrange 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 thecontract 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

________________

9 Idem, page 35.

10 Idem, page 37.

11 Rollo in L37187, page 201.

290



City of Manila notwithstanding that the trial court madeno findings of the determinative facts since it deemed thesame unnecessary in view of its essential determination of

nullity ab initio of the contract. Since the trial court madeno findings of fact whatsoever on this question of therelative advantages and disadvantages of the contract, andthis Court is not a trier of facts, the least that should bedone on this aspect (assuming the validity of the contract)is to remand the case for the trial courts determination ofthe material facts.

8. It is settled doctrine that ratification of anunauthorized contract must be clear and express so as not

to admit of any doubt or vagueness. The majority opinionstheory that the Asiatic December 28, 1972 contract was

impliedly ratified fails this test and should be set aside for

the following considerations:

(a) The Presidents 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 respondentsmovants contention that a deeper

analysis of the said Presidents 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 and

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

________________

12 Supplemental petitionmanifestationmemorandum dated December

22, 1975, p. 24.

13 Idem, pp. 2526.

291

VOL. 72, AUGUST 3, 1976 291


or adoption, as timely raised in respondents comment (answer)14

, cannot

be taken as a ratification of the contract, since as early as January 4,

1973 at the boards first working session, the board had adopted a

contrary resolution, stating that the Municipal Board has not passed

any ordinance or resolution which authorizes 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 pressreports that the City had accepted Asiatics withdrawal

offer from the contract but that the City had sued Asiatic

for

________________

14 Rollo in L37187, p. 202.

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

292



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.

I vote, therefore, to set aside in toto the decision ofSeptember 15, 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

Sir:

Please take notice that on August 3, 1976 a resolution,quoted hereunder, was rendered by the Supreme Court in

the aboveentitled cases, with the separate dissenting

opinion of Justice Claudio Teehankee, copy attached, the

original of which is now on file in this office:

L37187 (Asiatic Integrated Corporation vs. Hon. Federico

Alikpala, etc., et al.); L37248 (The City of Manila, et al. vs. Hon.

Federico Alikpala, etc., et al.); and L37249 (Asiatic Integrated

Corporation vs. 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 motion 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

petitionmanifestation

293

VOL. 72, AUGUST 3, 1976 293


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.

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 Center Bldg. 1350 Roxas Blvd., Manila

294

Documents

Asiatic Integrated Corp. vs. Alikpala 72 SCRA 285