G.R. No. L-58910




Republic of the Philippines SUPREME COURT Manila EN BANC G.R. No. L-58910 July 5, 1983 THE ROBERT DOLLAR COMPANY, acting through its Legal Counsel RODOLFO D. DELA CRUZ, petitioner, vs. THE HON. JUAN C. TUVERA and HON. JOAQUIN T. VENUS, JR., Presidential & Deputy Presidential Executive Assistants; the HON. CESAR E.A. VIRATA, etc., et al. respondents. Rodolfo dela Cruz for petitioner. The Solicitor General for respondents. ESCOLIN, J.: In this petition for certiorari and prohibition, Robert Dollar Co. assails the resolution of respondents Hon. Juan C. Tuvera and Hon. Joaquin T. Venus, Jr., incumbent Presidential Executive Assistant and Deputy Presidential Executive Assistant, respectively, reversing Office of the President Decision No. 1483, s. 1975, as affirmed by O.P. Decision No. 2926, s. 1977, upon an allegedly pro forma second motion for reconsideration filed by then Acting Minister of Finance six (6) months after receipt of O.P. Decision No. 2926, s. 1977. Urging the finality and partial execution of O.P. decisions Nos. 1483 and 2926, petitioner seeks to annul and set aside, for manifest want of jurisdiction, the said resolution issued by respondent Presidential Executive Assistants, and to reinstate the said O.P. decisions, including all the rights and interest vested thereunder in favor of the petitioners. The instant petition brings us back to October 2, 1930, when petitioner, a corporation organized and existing under the laws of the United States and previously licensed to do business in the Philippines, entered into lease contract, denominated RECLAIMED LAND LEASE CONTRACT No. 145 (E-66), with the Philippine Government, represented by the Hon. Rafael R. Alunan, then Secretary of the Department of Agriculture and Natural Resources, over a parcel of land situated in Port Area, Manila. As stipulated, the lease was to run for 25 years, renewable for another period not to exceed 25 years. It was likewise agreed therein that upon termination of the lease, "all improvements made on the land ... shall vest in and become the property of the Government." On November 6, 1947, said contract of lease, which would have expired on August 7, 1955, was extended to June 7, 1959 by the Secretary of Agriculture and Natural Resources, pursuant to Commonwealth Act No. 720, dated November 1, 1945, which provides "for the extension of time within which any term, condition or stipulation contained in public lands, forest and mineral concessions may be performed, accomplished or complied with, ... if the Secretary of Agriculture and Natural Resources finds that an extension of nine is justified by attending circumstance ... as by reason of the war." Before the expiry date of the contract as extended, petitioner sought the renewal of the same. On March 24, 1956, an "Order of Renewal of Lease" was issued by the Director of Lands and approved by the then Secretary of Agriculture and Natural Resources, "extending" the contract of lease for a period of 25 years or up to June 6, 1984. It appears that on March 14, 1967, then Acting Commissioner of Customs, Juan Ponce Enrile, gave notice of cancellation of the aforesaid contract of lease, because "the areas ... are needed by the Bureau of Customs Services for the public interest, considering that Pier 15 will soon be operational ... ." Thus, on March 30, 1967, petitioner and its sub-lessee, the United States Lines, Inc., turned over the premises to the Bureau of Customs, with petitioner simultaneously demanding payment of the value of the improvements. However, it was only on December 13, 1973 that the lease contract was formally cancelled. Petitioner repeated its demand from the Secretary of Finance for payment of the value of the improvements, consisting of the Robert Dollar Building with a centralized air-conditioning system installed in 1960 and a canteen constructed on March 31, 1967. As basis for its claim, petitioner invoked Clause 13 of the Lease Contract, to wit: Thirteenth: That if at any time during the existence of this lease, or any time when the lessee has obligations pending with the government, in accordance with Act No. 2874, as amended, it appears that the land leased is necessary, in the public interest, for the protection of any source of water, or for any work for the public benefit that the Government wishes to undertake, the Secretary of Agriculture and Natural Resources may order the cancellation of the lease, upon payment of the value of the improvements, if any, made by the lessee; The Secretary of Finance resolved petitioner's claim in a letter-decision, dated July 8, 1974, limiting the government's liability only to those improvements introduced by the company after the contract was renewed on June 7, 1959, thus disallowing payment of the cost of the improvements already existing as of said date, on the theory that the contract of lease, aggregating a term of 50 years, contemplated two phases with distinct and definite durations and that after the initial phase, i.e., the first 25 years, the improvements made on the land automatically belonged to the government without it being compelled to pay for their value, conformably to the 15th Clause of the Contract which reads: Fifteenth: That upon the termination of this lease or any extension thereof, all the improvements made by the PARTY OF THE SECOND PART, his successors and assigns shall vest in and become the property of the Government of the Philippine Islands. On petitioner's appeal, the Office of the President through then Deputy Executive Secretary Roberto V. Reyes, rendered O.P. Decision No. 1483, s. 1975, dated August 12, 1975, setting aside the decision of the Secretary of Finance. The dispositive portion of the Reyes decision reads: In view of all the foregoing, this Office is of the opinion and so holds that the lessor-lessee relationship between the Government and appellant did not terminate after the expiration of the original term of the contract of lease. In accordance, therefore, with the 13th clause authorizing the Government to take possession of the leased premises even before the final termination of the contract upon payment of the value of the improvements, if any, made thereon by the lessee, and considering that it has in fact assumed control of the area, Robert Dollar Company should now be paid not only for the value of the improvement introduced during the original period of the lease, but also those made thereafter. The decision appealed from is accordingly set aside. However, in order to determine the fair market value of all existing improvements introduced on the leased premises by Robert Dollar Company, the Acting Chairman of the Commission on Audit is hereby directed to create a committee for the purpose. By authority of the President: (Sgd.) Roberto V. Reyes ROBERTO V. REYES Deputy Executive Secretary. Six (6) months after receipt of said decision, the Secretary of Finance filed a first motion for reconsideration dated February 27, 1976. Said motion was denied under O.P. Decision No. 2926, s. 1977, dated October 26, 1977, per Presidential Assistant Ronaldo B. Zamora, in this wise: As pointed out in the decision sought to be reconsidered, 'since the Government caused the termination of the lease for reason other than what was provided in the 15th clause, but under the 13th clause, the disposition of all the improvements should be governed by the latter clause. In view of all the foregoing the instant motion for reconsideration is hereby denied. Accordingly, the Department of Finance should now nominate its representative to the three-man Committee created by the Commission on Audit created under Office Order No. 10030 dated October 10, 1975, in compliance with the directive of this Office, to finally determine the fair market value of the existing improvements introduced by the Company in the leased premises. By authority of the President: (Sgd.) Ronaldo B. Zamora RONALDO B. ZAMORA Presidential Assistant for Legal Affairs. On February 20, 1978, Secretary of Finance Cesar E.A. Virata, in deference to said decision, designated Commissioner Rufino J. Ruales, Jr. of the Central Board of Assessment Appeals as representative of the Department of Finance to the 3 Man-Valuation Committee called for in Decisions Nos. 1483 and 2926, for the purpose of determining the value of the improvements introduced by petitioners. Then, even after the duly constituted 3-Man Valuation Committee had commenced its work, Acting Secretary of Finance Pedro M. Almanzor filed on May 2, 1978, or six (6) months after receipt of the Zamora decision, a second motion for reconsideration. Over the written objection of the petitioner, the Office of the President took cognizance of the said 2nd motion for reconsideration and, through Deputy Presidential Assistant Joaquin T. Venus, issued Resolution No. 1728, dated June 23, 1981, which modified the Reyes and Zamora decisions by adopting the previous ruling of the Secretary of Finance. Its motion for reconsideration having been denied, petitioner filed the instant petition for certiorari and mandamus against respondents Tuvera, Venus, Cesar E.A. Virata as Minister of Finance and Ramon Farolan, Acting Commissioner of Customs. Petitioner argues that the finality and partial execution of the Reyes and Zamora decisions foreclosed the authority of respondents Presidential Executive Assistants to reverse or modify the same. In addition, it contends that the respondents' resolution giving due course to the second motion for reconsideration of co-respondent Minister of Finance is in violation of the proviso found in Section 5 of Executive Order No. 19, s. of 1966, that "only one petition for reconsideration by any party shall be allowed." We find merit in petitioner's contention. While Section 4 of Executive Order No. 19, s. 1966 1 grants a party the right to file a petition for reconsideration of a decision rendered by the Office of the President within fifteen (15) days from receipt of copy thereof, the exercise of such right is, however, restricted by Section 5 of said executive order which reads as follows: Sec. 5. Petitions for reconsideration filed after the aforesaid period shall not be entertained unless the Office of the President, for exceptionally meritorious causes, decides to act thereon, provided that only one petition for reconsideration by any party shall be allowed. The proviso in the above section denies the respondent Presidential Executive Assistants the power to entertain the second motion for reconsideration filed by Acting Secretary of Finance Pedro M. Almanzor. In Vito vs. Lacson, 2 where this Court interpreted paragraph (d) of the Rules and Regulations for Appeals to the Secretary of Interior (now Presidential Executive Assistant) which provides that "[d] No second motion for reconsideration shall be entertained," we laid down the following rule — While it my be admitted that the Executive Secretary may alter, modify or reverse the previous actuations of his office even without any petition for reconsideration or can motu propio alter, modify or reverse his own decision, the same can only be done before it becomes final and executory. Otherwise, such action can no longer be taken for it would be contrary to the very rule adopted by the Department of the Interior. Furthermore, it is significant to note that, after denial of the first motion for reconsideration of the Reyes decision on October 26, 1977, Secretary Virata voluntarily ratified the said decision by designating Commissioner Ruales as the representative of the Department of Finance to a 3-Man Valuation Committee called for in the Reyes decision. Thus, when Acting Secretary of Finance Pedro M. Almanzor filed a second motion for reconsideration on May 2, 1978, the decision sought to be reconsidered had already been partially executed. This fact alone would have called for the outright denial of the motion. Since Verches vs. Rios, 3 reiterated in Desbarats vs. de Vera, 4 Asian Surety and Insurance Co. vs. Relucio, 5 and more recently in PVTA vs. delos Angeles, 6 this Court has invariably sustained the rule that The party who voluntarily executes, either partially or in toto a judgment rendered for or against him, or who voluntarily acquiesces in or ratifies or partially or in toto the execution of such judgment is not permitted to appeal from it. And it is a dogma consistently adhered to that: There is no justification in law and in fact for respondent judge's act of ordering the reopening of the case which has long become final and which has in fact been executed. It is settled that once a decision becomes final and executory, it is removed from the power or jurisdiction of the court which rendered it to further alter or amend, much less revoke it. As the Court stated in the case of Lee Buh Ting v. Aligaen, 'Reasons of public policy, judicial orderliness, economy and judicial time and the interest of litigants as well as the peace and order of society, all require that stability be accorded the solemn and final judgments of the Courts or tribunals of competent jurisdiction. [Turquesa v. Hernando, et al., G.R. No. L- 51626, April 30,1980,97 SCRA 483]. The above pronouncement applies with equal force to decisions of the courts as well as those of quasi-judicial tribunals, boards or commissions. Respondent Secretary [now Minister] of Finance sought to limit his liability by distinguishing between the legal effects of a "renewal" and "extension" of a lease contract. But, as pointed out in O.P. Decision No. 1483, which We quote with approval: The question presented here is chiefly one of determining whether subject lease contract may be considered as terminated at the end of the first 25 years, thus indeed vesting in the Government improvements constructed on the leased premises during said period. The 7th Clause is crucial in resolving the issue. It reads: Seventh: That the said PARTY OF SECOND PART shall not sublet the whole or any part of the premises herein described, assign this lease or encumber his rights thereunder, without permission, in writing, of the Secretary of Agriculture and Natural Resources, first had and obtained, and it is expressly understood that this lease shall terminate and expire on the 7th day of August, 1955, unless renewed or terminated under the provisions hereof ... Unmistakable is the implication of this provision, i.e., if renewed, the contract of lease does not expire on the 7th day of August, 1955. Otherwise stated, the termination or expiration of the lease after the lapse of the original period is conditioned upon whether appellant renews the contract or not. In the context of the present case, the phrase 'termination of this lease' in Clause No. 15, interpreted in the light of the import of the 7th Clause, is believed to refer to the expiration of the term of the contract as renewed. The foregoing opinion does not stand unsupported. The Supreme Court, passing on a stipulation similar to the 7th Clause, has declared in Mercy's Inc. vs. Verde, 18 SCRA 171, thus: Where the lessees failed to exercise the option or to express their choice as to whether the lease would be renewed or not, the contract expired, and their occupancy of the premises thereafter was only upon the acquiescence of the lessor.' The judicial pronouncement certainly negates the Idea of a contract with a renewal clause expiring at the end of the original term in case the option to renew is seasonably exercised. As was aptly stated in another case, 'Where a contract provides for its renewal at the option of one of the parties, it is on the exercise of such option equivalent to a contract made at the outset for the full term of the original and renewal periods' [Wolf v. Brook, 18 Que. I. B. 17 5 East LR, cited in 13 C.J. 626]. At any rate, any doubt as to the implementation of the 15th Clause, more particularly as to whether the phrase 'termination of this lease' contained therein refers to the expiration of the original period as ruled by the Secretary of Finance, or to the final termination of the contract on June 6, 1984, as appellant claims, is clarified by a perusal of Act No. 2874, as amended, the provisions of which were expressly incorporated into subject lease contract. Under Section 37 thereof, improvements placed by the lessees on public lands vest in the Government only upon final termination of the lease, which in the present case would have had come about at the end of the renewal period. Thus, Section 37 of Act No. 2874 provides: SEC. 37. Leases shall run for a period of not more than twenty-five years but may be renewed for another period of not to exceed twenty-five years, at the option of the lessee. In case the lessee shall have made important improvements which, in the discretion of the Secretary of Agriculture and Natural Resources, justify a renewal of the lease, a further renewal for an additional period not to exceed twenty-five years may be granted. Upon the final expiration of the lease, all buildings and other permanent improvements made by the lessee, his heirs, executors, administrators, successors or assigns shall become the property of the Government. (Emphasis supplied). In view of all the foregoing, this Office is of the opinion and so holds that lessor-lessee relationship between the Government and appellant did not terminate after the expiration of the original term of the contract of lease. In accordance, therefore, with the 13th Clause authorizing the Government to take possession of the leased premises even before the final termination of the contract upon payment of the value of the improvements, if any, made thereon by the lessee, and considering that it has in fact assumed control of the area, Robert Dollar Company should now be paid not only for the value of the improvements introduced during the original period of the lease but also those made thereafter. Likewise, the Order of Renewal of Lease dated March 24, 1956, signed by the Director of Lands and approved by the Secretary of Agriculture and Natural Resources provides: WHEREFORE, the abovementioned contract of lease affecting the land applied for is hereby extended for a period of twenty-five (25) years from June 7, 1959. " Considering, therefore, that "Extension ... having no legal or technical significance, may mean whatever the parties intended when contracting" 7 and that the Government itself did not seek, in the first instance, to qualify between a "renewal and an "extension" of the lease, but rather used the terms interchangeably, We perceive no cogent reason to disturb the aforequoted O.P. Decision, particularly in the light of our initial conclusion that the same had become final. ACCORDINGLY, the writ of certiorari and mandamus prayed for is hereby granted, O.P. Resolution No. 1728 issued by respondents Presidential Executive Assistants is hereby set aside as null and void for having been issued in manifest want of authority, and O.P. Decision No. 1483, as affirmed by O.P. Decision No. 2926, is hereby restored. No costs. SO ORDERED. Makasiar, Concepcion Jr., Guerrero, Abad Santos, De Castro, Vasquez, Relova and Gutierrez, Jr., JJ., concur. Fernando (C.J), Aquino Melencio-Herrera, and Plana, JJ., took no part. Teehankee, J, reserves his vote. Footnotes 1 62 O.G. 2940. 2 3 SCRA 666. 3 48 Phil. 16. 4 83 Phil. 382, 5 47 SCRA 225. 6 61 SCRA 489. 7 35 Corpus Juris Secundum, cited in O.P. Resolution No. 1728. The Lawphil Project - Arellano Law Foundation