MMDA vs.

JANCOM

FACTS:

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:

We, therefore, hold that 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. There being a perfected
contract, MMDA cannot revoke or renounce the same without the consent of the other. From the moment
of perfection, the parties are bound not only to the fulfillment of what has been expressly stipulated but
also to all the consequences which, according to their nature, may be in keeping with good faith, usage,
and law (Article 1315, Civil Code). The contract has the force of law between the parties and they are
expected to abide in good faith by their respective contractual commitments, not weasel out of them. Just
as nobody can be forced to enter into a contract, in the same manner, once a contract is entered into, no
party can renounce it unilaterally or without the consent of the other. It is a general principle of law that
no one may be permitted to change his mind or disavow and go back upon his own acts, or to proceed
contrary thereto, to the prejudice of the other party.