G.R. No. 136760 - Senate Blue Ribbon Committee vs. Majaducon

Catalina Esteban was the lessee and operator of the Makati-Jolo Ferry for the fiscal year July 1, 1951 to June 30, 1952 under a duly executed lease contract.
On September 15, 1952, the municipality of Makati, Rizal advertised for bids to operate the ferry for the fiscal year October 1, 1952 to September 30, 1953.
Ildefonsa Coronado, the petitioner, submitted the highest bid at the public bidding.
By authority of the municipal council, the mayor formalized the lease contract in favor of Ildefonsa Coronado, which was ratified and approved by the council on October 19, 1952.
After the issuance of the contract, Ildefonsa Coronado immediately commenced operation of the ferry in accordance with its terms.

On January 22, 1953, Catalina Esteban, assisted by her husband Pelagio Victorino, filed a complaint in the Court of First Instance of Rizal.
The complaint alleged:

That the lease contract (Annex B) entered in favor of Ildefonsa Coronado was illegal and void.
That Catalina Esteban’s previous lease contract was still subsisting and valid.
A request was made for a preliminary writ to enjoin the defendants from enforcing or making use of the contract with Coronado.

On January 26, 1953, the respondent judge issued a preliminary writ enjoining the petitioner from operating the ferry.
On January 27, 1953, the writ was amended to allow the petitioner to operate the ferry service during the pendency of the case.
After a failed motion for reconsideration, the petitioner elevated the matter to the Supreme Court through a petition for certiorari (initially rejected for lack of sufficient supporting papers, and subsequently amended to comply with procedural requirements).

The notice for bids contained an essential condition regulating the fares for various classes of passengers and articles.
The lease contract awarded to Ildefonsa Coronado contained an additional stipulation permitting the collection of twice the normal fares from 7:00 p.m. to 5:00 a.m.
When ratifying the contract, the municipal council passed Resolution No. 144 acknowledging the additional stipulation, justifying it as a prevailing customary practice among ferry concessionaires.
Subsequently, the mayor and Ildefonsa Coronado were prosecuted for falsification of public documents on account of the additional stipulation, and were convicted after trial.
In his conviction, Judge Bienvenido Tan described Resolution No. 144 as “of doubtful creation” and opined that it could not sanitize an act that was per se illegal.
The criminal conviction was under appeal in the Court of Appeals at the time the petition reached the Supreme Court.

Whether the issuance of the preliminary mandatory injunction by the lower court, which removed possession of the ferry from Ildefonsa Coronado and allowed Catalina Esteban to take possession, was proper.

Specifically, whether the alleged falsification (by inserting an additional stipulation in the contract) rendered the contract awarded to Ildefonsa Coronado null and void.
Whether Catalina Esteban’s prior lease contract, which was limited to the fiscal year 1951-1952, could legitimately give her a right to possess and operate the ferry despite her participation in the ensuing bidding process.

Whether the writ of injunction (in its mandatory nature) properly addressed the balance of equities and maintained the proper status quo pending the resolution of the underlying controversy.