MMDA vs Jancom

MMDA v. Jancom

Date: Jan 30, 2002
Petitioner: MMDA
Respondent: Jancom
Ponente: Melo, J.
Nature: Petition for review on certiorari under Rule 45 of the Rules of Civil Procedure
Facts of the case: After bidding for a waste management project with the MMDA, Jancom won a contract for the MMDA’s San Mateo waste management project. A BOT contract for the waste to energy project was signed on Dec 19, 1997, between Jancom and the Philippine Government, represented by the Presidential Task Force on Solid Waste Management through DENR Secretary Victor Ramos, CORD-NCR chair Dionisio dela Serna, and MMDA chair Prospero Oreta.
The contract, however, was never signed by President Ramos as it was too close to the end of his term. He endorsed it to President Estrada, but Estrada refused to sign it, for two reasons: the passage of RA 8749, or the Clean Air Act of 1999 and the clamor of San Mateo residents for the closure of the dumpsite.
When the MMDA published another call for proposals for solid waste management projects for Metro Manila, Jancom filed a petition with the Pasig RTC asking the court to declare as void the resolution of the Greater Metropolitan Manila Solid Waste Management Committee disregarding the BOT contract with Jancom, and the call for bids for a new waste management contract.
On May 29, 2000, the lower court decided in favor of Jancom. Instead of appealing, the MMDA filed with the Court of Appeals a petition for certiorari and a TRO. When the CA dismissed the petition, the MMDA went to the Supreme Court, arguing that the contract with Jancom was not binding because it was not signed by the President, the conditions precedent to the contract were not complied with, and there was no valid notice of award.
The Supreme Court ruled that MMDA should have filed a motion for appeal instead of for certiorari, because a certiorari would only apply in cases where there was grave abuse of jurisdiction, something which the petition did not allege. Correction may be obtained only by an appeal from the final decision. Since the decision was not appeal, the Court said it has become final and “gone beyond the reach of any court to modify in any substantive aspect.”
Though saying it was unnecessary to discuss the substantive issues, the court took it up just the same, “if only to put the petitioner’s mind to rest.”
The contract with Jancom is valid: citing Article 1305, 1315 and 1319 of the Civil Code.
In asserting that there was no valid and binding contract, MMDA can only allege that there was no valid notice of award; the contract does not bear the signature of the President; the conditions precedent specified in the contract were not complied with.
But the Court said that the lack of notice was the government’s fault; though the President did not sign, his alter-ego did; and anyway his signature was only necessary for the effectivity of the contract, not its perfection; and that the two-month period within which Jancom should comply with the conditions had not yet started to run because the contract had not yet taken effect, precisely because of the absence of the President’s signature.
HELD: The Court of Appeals did not err when it declared the existence of a valid and perfected contract between the Republic of the Philippines and Jancom. The MMDA cannot revoke or renounce the same without the consent of the other. Although the contract is a perfected one, it is still ineffective or unimplementable until and unless it is approved by the President.
Voting: vitug, panganiban, Sandoval Gutierrez concur.
Carpio j: No part, I was former counsel to a foreign partner of Jancom Environmental Corporation.

Section 11, Article VIII of the 1987 Constitution says: The Supreme Court en banc shall have the power to discipline judges of lower courts, or order their dismissal by a vote of a majority of the Members who actually took part in the deliberations on the issues in the case and voted thereon.
Does this mean that all administrative decisions and penalties may be rendered only by the Supreme Court en banc?

On February 7, 1989, the Court promulgated Circular No. 2-89 which says: A decision or resolution of a Division of the Court, when concurred in by a majority of its members who actually took part in the deliberations on the issues in a case and voted thereon, and in no case without the concurrence of at least three such Members, is a decision or resolution of the Supreme Court (Sec 4 (3), Article VIII, 1987 Constitution.