Case Summary (G.R. No. L-18751)

Background of the Case

• A. C. Esguerra & Sons operated warehouses in the customs zone under a contract with the Bureau of Customs.
• The contract was initially signed on August 22, 1956, and extended on July 25, 1957.
• As the contract was nearing expiration, the Secretary of Finance directed a public bidding for the operation of the warehouses.
• The bidding invitation was published in local newspapers on March 14, 21, and 28, 1960.
• Various bids were submitted, with A. R. Reyes & Co. offering a conditional bid based on gross income.

Bidding Process and Award

• A bidding committee evaluated the proposals and recommended A. R. Reyes & Co.'s bid as the most favorable to the government.
• The Secretary of Finance approved the recommendation but modified the terms of the bid, ensuring a fixed government share of 55% regardless of gross income.
• A. C. Esguerra & Sons was notified of the award and asked to prepare for the transfer of operations.

Legal Action Initiated by A. C. Esguerra & Sons

• A. C. Esguerra & Sons sought a writ of certiorari against the Secretary of Finance and the Commissioner of Customs to restrain the enforcement of the contract with A. R. Reyes & Co.
• The petition was amended to declare the contract null and void, and a preliminary injunction was issued by the court.

Arguments Presented in Court

• Respondents argued that the government would incur significant losses if the injunction remained in place, as the new bidder would pay a higher percentage of gross income.
• The trial court ruled in favor of A. C. Esguerra & Sons, stating that the Secretary of Finance exceeded his authority by altering the bid conditions.

Court's Rationale and Findings

• The court found that the Secretary of Finance's modification of the bid was improper, as it altered the original terms without proper authority.
• However, the appellate court disagreed, noting that the modification was a mere elimination of surplusage, given the historical income of the warehouses.
• The court emphasized that the government had the discretion to reject any and all bids, a principle well-established i...continue reading

Case Syllabus (G.R. No. L-18751)

Case Overview

• Parties Involved: A.C. Esguerra & Sons (Petitioner and Appellee) vs. Dominador R. Aytona, et al. (Respondents and Appellants).
• Decision Date: April 28, 1962.
• Citation: 114 Phil. 1189 [ G.R. No. L-18751 ].

Factual Background

• A.C. Esguerra & Sons operated warehouses in the customs zone under a contract with the Bureau of Customs, initially established on August 22, 1956, and subsequently extended on July 25, 1957.
• As the operation period neared its conclusion, the Secretary of Finance ordered a public bidding for the warehouses via an indorsement on February 8, 1960.
• The bidding process was initiated with the publication of an invitation to bid in local newspapers on March 14, 21, and 28, 1960.
• Several bids were received, with A.R. Reyes & Co. offering the most favorable terms to the government at 30% of gross income if it did not exceed P35,000, and 55% if it exceeded that amount.

Bidding Process and Subsequent Actions

• A bidding committee evaluated the bids and recommended that A.R. Reyes & Co.'s bid be accepted due to its favorable terms.
• The Secretary of Finance approved the committee's recommendation but altered the terms by stipulating that the contract should guarantee a 55% share for the government, disregarding the 30% clause.
• A.C. Esguerra & Sons was notified of the award to A.R. Reyes & Co., promp...continue reading