[G.R. No. 143684.

July 31, 2000]

RODOLFO MADRID, JR., vs. HON. ANIANO A. DESIERTO, et al.

FIRST DIVISION

Gentlemen:

Quoted hereunder, for your information, is a resolution of this Court dated JUL 31 2000.

G.R. No. 143684 (Rodolfo Madrid, Jr., vs. Hon. Aniano A. Desierto, et al.)

This is a special civil action for certiorari wherein petitioner seeks the nullification of the
Resolution and Order of the Office of the Ombudsman in OMB-1-98-0215, entitled "Albay
Accredited Constructors Association, Inc. vs. Mayor Imelda Roces, et al." which dismissed
petitioner’s complaint and denied his motion for reconsideration, respectively.

This case started when the City Government of Legazpi City, Albay, invited bidders to
participate in the development and construction of the Legazpi City Public Market. Portland
Trade and Realty Corporation, Chanelay Development Corporation and Liberty Commercial
Center (hereinafter, "Liberty") participated in the bidding. After submitting their bid
statements, the bidding committee announced that it was awarding the project to Liberty.
Thus, the city Government of Legazpi, through Mayor Imelda Roces, entered into a renewable
50-year contract of lease with Liberty wherein the latter will construct a public market on the
property of the city government and, thereafter, pay the city government a P5.5 million annual
lease for the use of the property. It was also stipulated in the contract that after the end of the
50-year lease, Liberty will transfer ownership of the public market in favor of the City
Government of Legazpi City.

Claiming the irregularities, amounting to violations of Sec. 3(e), (g) and (j) of Republic
Act No. 3019, attended the awarding of the project to Liberty, petitioner filed a complaint on 9
January 1998, against respondents before the Office of the Ombudsman. In its resolution, dated
29 November 1999, the Ombudsman discussed each of the seven issues raised by petitioner
and found no probable cause to hold respondents liable for allegedly violating Republic Act No.
3019. Thus, petitioner’s complaint was dismissed. Petitioner filed a motion for reconsideration
but the same was denied in his Order dated 16 March 2000. Undaunted, petitioner filed the
instant special civil action for certiorari.

In dismissing the complaint for lack of probable cause, the Ombudsman stated:

First. On the issue of procedural infirmity due to the lack of approval

from the ICC of NEDA Board as required under R.A. 6957, the respondent
public officers have sufficiently established that the said procedural
requirement is not necessary in the subject transaction. The requirements
under R.A. 6957 refer to transaction under the build-operate-transfer scheme
of the government and not to contract involving lease of property just like the
one involved in the instant case.

All the elements of a contract of lease are present in the transaction.

There is a subject matter, the use of the property of the Legazpi City; a cause
or consideration which is the amount of rental that shall be paid by the LCC;
and consent among the parties. The mere provision in the contract that the
building shall belong to the city government of Legazpi at the termination of
the contract will not be sufficient to classify the transaction under the BOT
scheme. This kind of provision is ordinary in long-term lease agreement.

However, even granting that the transaction properly falls under the
BOT scheme, We likewise submit that the mere lack of the required approval
from NEDA would not be a cause for violation of the Anti-Graft and Corrupt
Practices Act. If, at all, this defect may be a ground for the rescission or
cancellation of the contract.

Second. The issue that another bidder, Chanelay Corporation, ought to

have won the bidding is mere conjectural. There was no evidence presented
to show that the Chanelay Corporation offered a better bid than the LCC.
Moreover, if this allegation has some semblance of truth, We submit that the
Chanelay Corporation would have been the first to complain.

Third. On the issue that the conduct of lease failed to specify the value
of the market that LCC would construct, the approved plans and specifications
attached to the contract negate this charge. In addition, We submit that
appropriate measures were resorted by the public respondents to assure that
the construction of the market would comply with the approved plans and
specifications by providing under the contract that the City Engineer of
Legazpi shall oversee the construction of the project.

Fourth. On the issue that the government is prejudiced by the option

given to LCC to pay rent on a monthly basis (instead on an annual basis), We
find in the negative. Whether the rent is paid monthly or annually would
result in the same thing – the receipt by the government of the same sum of
money. Moreover, We submit that mere reference made in the contract that
the amount of rent shall be such amount annually does not necessarily mean
that payment should be made in an annual basis. On the issue raised on the
grant of tax relief, We find that it is allowed under Ordinance No. 96-016
(Legazpi City Investment Incentive Code of 1996).

Fifth. The issue that the period of lease granted to LCC may be
extended indefinitely without public bidding and the required government
 approval is belied by the provision contained in the contract. The contract
provides that after the term of the lease, the government shall have the
option to negotiate for its renewal. This provision, which incidentally is
standard in any contract of lease, does not mean that the procedural
requirement in the execution of the contract as well as the limit in the term of
the contract shall not be observed in case the contract is renewed.

Sixth. The issue raised that the LCC has the absolute right to determine
and fix reasonable fees, rentals and charges on the market is misplaced. It is
but proper that being the lessee of the leased premises and the operator of
the market, discretion and prerogatives must be exercised by the LCC in the
management of the market.

Seventh. The issue that the LCC did not post any performance bond
was adequately explained by the fact that the city government of Legazpi has
failed to completely surrender the leased premises to the LCC free from any
occupant. In effect, the obligation of LCC to proceed with the construction of
the commercial complex and the concomitant obligation to post performance
are conditional upon the fulfillment by the city government of Legazpi of its
obligation to clear the premises from its old market tenants. We find that the
non-fulfillment by the lessor of its obligation has the effect of suspending the
obligation of the lessee-LCC.

The prevailing rule is that the court will not interfere with the decision of the
Ombudsman in prosecuting or dismissing a complaint. Only in instances where there is a
showing of patent abuse of discretion will this Court step in and substitute its judgment over
that of the ombudsman.

Our review of the very exhaustive pleading of petitioner shows that the decision of the
Office of the Ombudsman must be upheld. Petitioner failed to sufficiently show that any grave
abuse of discretion was committed by the Ombudsman in rendering the challenged resolution
and order which, on the contrary, appear to be in accord with the facts and applicable law.

IN VIEW OF THE FOREGOING, the petition is hereby DISMISSED.

Very truly yours,

VIRGINIA ANCHETA-SORIANO

Clerk of Court

(Sgd.) ENRIQUETA ESGUERRA-VIDAL

Asst. Clerk of Court