158. GR.

201112, 13 June 2012 Capalla v COMELEC

(requisites of a judicial inquiry)

Petitioners Archbishop Fernando R. Capalla, Omar Solitario Ali and Mary Anne L. Susano
pray that a Temporary Restraining Order (TRO) be issued enjoining the Comelec from
purchasing the PCOS machines until after final judgment of the instant case; a writ of
prohibition be issued against the Comelec for the purchase of these defective PCOS
machines; a writ of mandamus be issued compelling the Comelec to conduct the necessary
bidding for the equipment and facilities which shall be used for the 2013 National and Local
Elections; and to declare Comelec Resolution Nos. 9376, 9377, and 9378, on the purchase of
PCOS machines, null and void.

FACTS:

Pursuant to its authority to use an Automated Election System (AES), the Commission on
Elections (COMELEC) posted and published an invitation to apply for eligibility and to bid
for the 2010 Poll Automation Project. COMELEC awarded the contract for the project to
respondent Smartmatic-TIM. Thereafter, COMELEC and Smartmatic-TIM entered into a
Contract for the Provision of an Automated Election System for the May 10, 2010
Synchronized National and Local Elections (AES Contract, for brevity). The contract
between the COMELEC and Smartmatic-TIM was one of “lease of the AES with option to
purchase (OTP) the goods listed in the contract.” In said contract, the Comelec was given
until December 31, 2010 within which to exercise the option.

In a letter, Smartmatic-TIM, through its Chairman Cesar Flores (Flores), proposed a

temporary extension of the option period to buy the PCOS machines until March 31, 2011.
The COMELEC did not exercise the option within the extended period. Several extensions
were given for the COMELEC to exercise the OTP until its final extension on March 31,
2012. On March 29, 2012, the COMELEC issued a resolution resolving to accept
Smartmatic-TIM’s offer to extend the period to exercise the OTP until March 31, 2012.

Archbishop Capalla, et al. thus assailed the validity and constitutionality of the COMELEC
Resolutions for the purchase of the subject PCOS machines as well as the Extension
Agreement and the Deed of Sale covering said goods mainly on the ground that the option
period provided for in the AES contract between the COMELEC and Smartmatic-TIM had
already lapsed and, thus, could no longer be extended, such extension being prohibited by the
contract.

ISSUE:

Whether or not the unilateral extension of the option period which Smartmatic-TIM granted
to COMELEC and which the latter accepted constitutes circumvention of the law on public
bidding

HELD:

It is a basic rule in the interpretation of contracts that an instrument must be construed so as

to give effect to all the provisions of the contract. In essence, the contract must be read and
taken as a whole. While the contract indeed specifically required the COMELEC to notify
Smartmatic-TIM of its OTP the subject goods until December 31, 2010, a reading of the
other provisions of the AES contract would show that the parties are given the right to amend
the contract which may include the period within which to exercise the option. There is,
likewise, no prohibition on the extension of the period, provided that the contract is still
effective.

Considering, however, that the AES contract is not an ordinary contract as it involves
procurement by a government agency, the rights and obligations of the parties are governed
not only by the Civil Code but also by RA 9184. In this jurisdiction, public bidding is the
established procedure in the grant of government contracts. The award of public contracts,
through public bidding, is a matter of public policy. The parties are, therefore, not at full
liberty to amend or modify the provisions of the contract bidded upon.

A winning bidder is not precluded from modifying or amending certain provisions of the
contract bidded upon. However, such changes must not constitute substantial or material
amendments that would alter the basic parameters of the contract and would constitute a
denial to the other bidders of the opportunity to bid on the same terms. The determination of
whether or not a modification or amendment of a contract bidded out constitutes a substantial
amendment rests on whether the contract, when taken as a whole, would contain substantially
different terms and conditions that would have the effect of altering the technical and/or
financial proposals previously submitted by the other bidders. The modifications in the
contract executed between the government and the winning bidder must be such as to render
the executed contract to be an entirely different contract from the one bidded upon.

Smartmatic-TIM was not granted additional right that was not previously available to the
other bidders. Admittedly, the AES contract was awarded to Smartmatic-TIM after
compliance with all the requirements of a competitive public bidding. Although the AES
contract was amended after the award of the contract to Smartmatic-TIM, the amendment
only pertains to the period within which the COMELEC could exercise the option because of
its failure to exercise the same prior to the deadline originally agreed upon by the parties.

Decision:
WHEREFORE, premises considered, the petitions are DISMISSED. The Temporary
Restraining Order issued by the Court on April 24, 2012 is LIFTED

173. Gr. 172852, 30 Jan 2013 Cebu v Dedamo

(decisions of the court)

This is a Petition for Review on Certiorari under Rule 45 of the Rules of Court seeking to
annul and set aside the Decision dated November 30, 2005 of the Court of Appeals (CA)
ordering petitioner City of Cebu (petitioner) to pay twelve percent (12%) legal interest per
annum on the unpaid balance of the just compensation paid to respondent Apolonio Dedamo,
Jr. (respondent). Likewise assailed is the Resolution dated May 9, 2006 denying
reconsideration.

FACTS:

The City of Cebu filed an expropriation case against spouses Apolonio and Blasa Dedamo
(Sps. Dedamo) in the RTC. The RTC approved the Commissioners report on the amount of
just compensation. The RTC Order was affirmed by the Court of Appeals.

When the said decision became final and executory, the case was remanded for execution of
the RTC. Hence, the RTC issued a writ of execution. In the meantime, Spouses Dedamo
passed away and they were substituted by respondent Apolonio Dedamo (Apolonio).

The City of Cebu paid the difference in just compensation. However, Apolonio filed a
Manifestation and Motion before the RTC to order the City of Cebu to pay interest on the just
compensation computed from the time of actual taking of the lands. The RTC denied the
motion. Dedamo appealed to the CA asserting that City of Cebu is liable to pay: (a) 12%
legal interest on the unpaid balance of the just compensation computed from the time of
actual taking of the property up to the date of payment of just compensation; and (b) 12%
legal interest from the time the decision awarding just compensation became final and
executory.

As to Apolonio first claim, the CA rejected the same since it was belatedly raised. But as
regards the second claim, the CA awarded legal interest accruing from the time of RTCs
decision.

Both parties appealed the CAs decision before the High Court. Apolonios petition was
docketed as G.R. No. 172942 where he prayed that the 12% interest rate be reckoned from
the date of taking of the property and not from the date of finality of the Decision. The Court
denied his petition.

The City of Cebu filed this instant petition questioning the same CA decision in G.R. No.
172942.

ISSUE:

Whether or not the appeal made by the City of Cebu should be given due course?

HELD:

The petition is denied on the ground of res judicata.

A perusal of the allegations in the present case evidently shows that the petitioner broaches
the issues similarly raised and already resolved in G.R. No. 172942.

Under the principle of conclusiveness of judgment, when a right or fact has been judicially
tried and determined by a court of competent jurisdiction, or when an opportunity for such
trial has been given, the judgment of the court, as long as it remains unreversed, should be
conclusive upon the parties and those in privity with them. Stated differently, conclusiveness
of judgment bars the re-litigation in a second case of a fact or question already settled in a
previous case.

Thus, the judgment in G.R. No. 172942 bars the present case as the relief sought in the latter
is inextricably related to the ruling in the former.

Petition is DENIED.