G.R. No. L-15198. May 30, 1960
EDUARDO J. JALANDONI, PLAINTIFF AND APPELLANT, VS. NATIONAL RESETTLEMENT AND REHABILITATION ADMINISTRATION, ET AL., DEFENDANTS AND APPELLEES.
BARRERA, J.:
representation of Jaro Machineries and Engineering Co., from an order
of the Court of First Instance of Manila, dismissing the complaint in
Civil Case No. 31607 of said court.
In answer to the
invitation to a public bidding, which was held on October 10, 1955,
issued by the National Resettlement and Rehabilitation Administration
(NARRA), for the plowing and harrowing of its projects in Wao, Lanao;
Maramag, Bukidnon; Tabugon and Cabanban, Negros Occidental; and Buluan,
Cotabato, NARRA received the following proposals:
Offer for
Total Cost of 1st and 2nd Plowing
and 1st and 2nd Harrowing
3,000 has.
Bukidnon
3,000 has.
Cabanbanan,
Neg. Occ.
4,000 has.
1,000 has.
Cotabato
1. George W. Bachelder 2. Guevarra & Sons 3. G. A. Machineries, & Engr. Co. Inc. 4. Jaro Machineries, & Engr. Co. 5. Radiowealth Inc. ________________________________________________________________________
These offers were made subject to the following conditions expressly imposed by the NARRA, to wit:
“1.
The bidder must submit, together with his bid, a list of the farm
machinery and equipment he proposes to use in connection with his bid.
The list must be duly certified by the manager or the treasurer of the
bidding company as to the actual existence of the items therein listed.“2. The bidder must show evidence or evidences in the form of documents
to show that he can finance his operations in connection with his bid.“3. The rates must be on a per hectare basis: (1) initial plowing
(newly-opened land), (2) 1st harrowing, (3) 2nd plowing, (4) 2nd
harrowing. It is understood that there must be at least an interval of
two weeks between every plowing and harrowing operation.“4. The bidder must file a proposal bond which must not be less than 5%
of his total bid price, in the form of cash, certified check or
certificate of fixed deposit issued by any reputable banking
institution, payable to the NARRA or a surety bond issued by a duly
licensed and authorized domestic bonding company.“5. The bidder must state in his bid the number of days within which he proposes to finish his operations in each project.
“6. That awardee or awardees of this bidding must agree, when required,
to file a performance bond equal to 10% of the value of the contract
which shall be awarded to him as a result of this bidding, in the form
of cash, certified cheek or certificate of fixed deposit issued by any
reputable banking institution, payable to the NARRA or a surety bond
issued by a duly licensed and authorized domestic bonding company.“7.
The right is reserved to reject any or all bids, to waive informality
in the bids received and to accept such bid or bids as may be the most
advantageous to the NARRA.”
With the
favorable recommendation of the Committee on Bids, the Abstract of Bids
showing Jaro Machineries & Engineering Co. to be the sole bidder
for the Tabugon and Cabanbanan project and the lowest bidder for the
Maramag project, was forwarded to the NARRA Board of Directors for
approval. In its special meeting of October 27, 1955, however, the
Board resolved to reject all the bids, for the reason that the prices
offered therein were too high. Later, apparently abandoning the plan to
give the work to private contractors, the Board decided to have the
land-preparation project undertaken by NARRA itself.
Claiming that the NARRA Board of Directors abused its discretion in
rejecting its bids, the Jaro Machineries & Engineering Co.
protested to the President of the Philippines. Considering the
explanation given by the General Manager of the NARRA, in connection
with the aforementioned protest, the President denied the same, as well
as the alternative prayer of the Company that, as the NARRA undertook
the work in the projects subject of the bidding, it be awarded instead
the work on 9,000 hectares out of the 167,000 hectares to be opened by
August or October, 1956, under the same conditions of the bid
previously rejected by the NARRA. Its request for a reconsideration of
the ruling of the President having been denied, appellant Eduardo
Jalandoni, proprietor and manager of the Jaro Machineries &
Engineering Co., filed with the Court of First Instance of Manila, an
action for damages with mandatory and prohibitory injunction against
the NARRA and the individual members of its Board of Directors, praying
that he be awarded the total sum of P200,000.00 representing unrealized
profits, exemplary, nominal, and moral damages, and attorney’s fees;
that pending final disposition of the case, defendants be compelled “to
sign the contract of plowing and harrowing the land-preparation
projects of Maramag, Bukidnon, and Tabugon and Cabanbanan, Negros
Occidental” in his favor, and that defendants be restrained “from
negotiating the work of plowing and harrowing its land-preparation
projects in the aforecited projects to any other bidder to administer
them.”
Defendants filed a motion to dismiss the complaint,
for lack of cause of action, on the ground that in submitting the
proposal, plaintiff voluntarily subjected himself to the conditions of
such public bidding, among which, is the right of NARRA to reject any
and all bids. And as the latter did reject all bids, including those of
plaintiff, he cannot now claim to have a cause of action against the
NARRA. Furthermore, defendants pointed out that plaintiff failed to
comply with the prerequisite conditions in said bidding, i.e., in
connection with requirement No. 1—that the bidders submit a list of
farm machinery and equipment they proposed to use, plaintiff annotated
in his proposal: “Two (2) D-4-present equipment will add as soon as
offer is accepted; with respect to the requirement of proof or
financial ability, plaintiff wrote: “Reference: P.N.B. certificate if
offer is accepted”. Defendants contended that this deficiency made’his
proposal pro-forma. Over plaintiff’s opposition, the court
dismissed the case. Plaintiff appealed to the Court of Appeals, but
upon motion of defendants, the case was elevated to this Court pursuant
to Section 17 of Republic Act No. 296, as amended.
The only
question to be resolved in this case is whether the lower court acted
correctly in dismissing the complaint, without setting the motion for
hearing and allowing the parties to submit further evidence.
There is no doubt that by participating in the public bidding called by
the NARRA, plaintiff-appellant submitted himself (through the company
owned by him) to the conditions laid down by the former,[1]
among which, is the reservation of its right to reject any and all bids
to be made therein. The wisdom of this saving clause cannot be
questioned. Under a statute requiring contracts to be awarded to the
lowest bidder, the authorities charged with the duty to make such
award, acting in good faith, may refuse to make the award, if they deem
it best for the entity to do so.[2]
The discretion given to the authorities on this matter is of such wide
latitude that the courts will not interfere therewith, unless it is
apparent that it is isued as a shield to a fraudulent award[3].
There is, however, nothing of the sort in the instant case. The
rejection of the bids, including those of plaintiff-appellant, was
brought about by the alleged unreasonableness of the prices offered, as
a direct consequence of which, the Board decided to let the NARRA
undertake the work itself. We find nothing fraudulent or improper—and
none has been shown—in the Board’s desire to effect economy.
Neither can it be contended that the fact that appellant gave the
lowest quotation, which was favorably indorsed by the Committee on
Bids, created a vested right in favor of the said bidder. Admittedly,
the offers were rejected by the Board of Directors. It is clear,
therefore, that there having been no meeting of the minds of the
parties, there was no perfected contract between them which could be
the basis of action against the defendants-appellees.
The presentation by a reliable and
responsible bidder of the lowest bid to officials whose duty it is to
let the contract to the lowest reliable and responsible bidder, but who
have the right and have given notice that they reserve the right to
reject any and all bids, dees not constitute an agreement that they
will make a contract with such a bidder, nor vest in him such an
absolute right to the contract as against a higher bidder (Colorado
Paving Co. vs. Murphy, [CCA 8th] 78 P. 28, 37 LRA (630.)The mere determination of a public official or board to accept the
proposal of a bidder does not constitute a contract (Smithmeyer vs.
United States, 147 U.S. 342, 37 L. ed. 196, 13 S. Ct. 321); the
decision must be communicated to the bidder (Cedar Rapids Lumber Co. vs. Fisher, 129 Iowa 332, 105 N.W. 595, 4 LEA [NS] 177.)No contractual relation can arise merely from a bid, unless by the
terms of the statute and the advertisement, a bid in pursuance thereof
is, as a matter of law, an acceptance of an offer, wholly apart from
any action on the part of the municipality or any of its officers
(Molloy vs. Rochelle, supra.)
Considering
that the aforementioned facts are averred in, and evident from the
complaint and the annexes thereto, and it appearing that the evidence
plaintiff-appellant would present, had a hearing been called for, would
not have materially affected or changed the foregoing facts, we find
that the lower court committed no error in dismissing the case.[4]
In a memorandum filed by the amicus curiae,
we are asked to make a ruling clarifying the powers of a government
corporation under Executive Order No. 298, series of 1940, which
requires public bidding for government contracts, to reject all bids
and then immediately negotiate to enter into contracts, claiming that
such a procedure could be a source of dishonesty and discrimination.
Conscious of the limitations on the exercise of the powers of this
Court exclusively to matters submitted to it for judicial adjudication,
we must decline to express our views, and reserve judgment until we are
called upon to do so, on an appropriate case properly coming before us.
The facts of the instant case, as they appear in the pleading and order
of the lower court, do not present such a situation.
Wherefore, the order appealed from, is hereby affirmed, with costs against ther plaintiff-appellant. So ordered.
Paras C. J., Bengzon, Montemayor, Bautista Angelo, Labrador, Concepcion, and Gutierrez David, JJ., concur.
Reyes, J.B.L., J., on leave, took no part.
[1] Leoquinco vs. Postal Savings Bank, 47 Phil., 772.
[2] Molloy vs. New Rochelle, 193 N. Y. 402, 92 N. E. 94, 30 L.R.A. (NS) 126.
[3] Borromeo vs. Lanuza, 62 Phil., 512.
[4] See Jamora vs. Blanco, 78 Phil., 497.