Supreme Court: Republic of The Philippines

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Republic of the Philippines

Supreme Court
Baguio City
FIRST DIVISION
SANGGUNIANG PANLUNGSOD NG G.R. No. 160025

BAGUIO CITY,
Petitioner,
- versus -
JADEWELL PARKING SYSTEMS

CORPORATION,
Respondent.
x----------------------------------------------x

CORPORATION, G.R. No. 163052
Petitioner,
- versus -
MAYOR BERNARDO M. VERGARA,

CITY MAYOR OF BAGUIO, VICE
MAYOR BETTY LOURDES F.
TABANDA, VICE MAYOR OF
BAGUIO, COUNCILOR BRAULIO D.
YARANON, COUNCILOR ELMER
O. DATUIN, COUNCILOR
ANTONIO R. TABORA, JR.,
COUNCILOR GALO D. WEYGAN,
COUNCILOR EDILBERTO B.
TENEFRANCIA, COUNCILOR
FEDERICO J. MANDAPAT, JR.,
COUNCILOR RICHARD A.
CARINO, COUNCILOR FAUSTINO
A. OLOWAN, COUNCILOR DELFIN
V. BALAJADIA, COUNCILOR
RUFINO M. PANAGAN, CITY
SECRETARY RONALDO B. PEREZ,
SANGGUNIANG PANLUNGSOD NG
BAGUIO,
Respondents.
Decision 1 G.R Nos. 160025, 163052,164107, 165564,
172215, 172216, 173043, 174879 & 181488
x- - - - - - - - - - - - - - - - - - - - - - - - - - - x
JADEWELL PARKING SYSTEMS G. R. No. 164107

CORPORATION,
Petitioner,
- versus -
CITY MAYOR BRAULIO D.

YARANON,
Respondent.
x----------------------------------------------x

CORPORATION, G. R. No. 165564
Petitioner,
- versus -

YARANON,
Respondent.
x----------------------------------------------x
CORPORATION,
Petitioner,
- versus –
JUDGE FERNANDO VIL

PAMINTUAN, PRESIDING JUDGE
OF BRANCH 3 OF THE REGIONAL
TRIAL COURT OF BAGUIO CITY,
BENEDICTO BALAJADIA,
PATERNO AQUINO, RICHARD
LABERINTO, ROLANDO
ABELLERA, FERNANDO
SANGALANG, ALLAN ATOS,
ANGELINO SANGALANG, CITY OF
BAGUIO, AND CITY MAYOR
BRAULIO D. YARANON,
Respondents.
Decision 1 G.R Nos. 160025, 163052,164107, 165564,
172215, 172216, 173043, 174879 & 181488
x- - - - - - - - - - - - - - - - - - - - - - - - - - - x

CORPORATION,
Petitioner,
- versus -
JUDGE FERNANDO VIL

PAMINTUAN,
PRESIDING JUDGE, BRANCH 03
REGIONAL TRIAL COURT OF
BAGUIO CITY,
Respondent.
x ---------------------------------------------x

Petitioner,
- versus -

YARANON,
Respondent.
x----------------------------------------------x

Petitioner,
- versus -
ACTING CITY MAYOR AND

FORMERLY VICE MAYOR AND
PRESIDING OFFICER OF THE
BAGUIO, REINALDO A. BAUTISTA,
JR., MEMBERS OF THE
BAGUIO, LEONARDO B. YANGOT,
JR., ROCKY THOMAS A.
Decision 4 G.R Nos. 160025, 163052,164107, 165564,
172215,172216,173043, 174879& 181488
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- - - ----- -- -- - - - --
)(- BERSA
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VILLARAMA,
CITY JR., and
REYES,JJ.
Promulgated
:
APR 2 3
201
x------- -------------
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DECISION
SERENO, CJ:
Before this Court

are nine (9) Petitions
involving essentially
the same parties -
officials of the City
Government of Baguio
and Jadewell Parking
Systems Corporation
(Jadewell). The only
party here that is
neither an official of
the City Government of
Baguio nor an officer of
Jadewell is former
Judge Fernando Vii
Pamintuan.
(
Decision 1 G.R Nos. 160025, 163052,164107, 165564,
172215, 172216, 173043, 174879 & 181488
The two principal parties executed a Memorandum of Agreement

(MOA) on 26 June 2000, whereby the City of Baguio authorized Jadewell to
regulate and collect parking fees for on-street parking in the city, as well as
to implement the installation of modern parking meters.
The legal disputes embodied in the nine Petitions began when the
Sangguniang Panlungsod of Baguio City (Sanggunian) revoked the MOA
through City Resolution No. 037, Series of 2002 (Resolution 37), alleging
substantial breach of the MOA on the part of Jadewell. Then Mayor
Alfredo Vergara vetoed the Resolution. The Sanggunian Panlungsod
overrode the veto through an unnumbered Resolution dated 17 April 2002.
These twin Resolutions constitute what we call here as the first act of
rescission1 of the MOA by the city officials of Baguio. Jadewell denied the
breach and commenced an action before the Regional Trial Court (RTC) of
Baguio,2 questioning the validity of the MOA’s revocation and the
Sanggunian’s capacity to pass a resolution revoking the MOA.
There was a second act of rescission that the city officials of

Baguio performed in 2006, the circumstances of which will be narrated
later on.
While the main case was under litigation, and then under appeal, the
parties filed contempt charges against each other. Six of these cases are part
of the consolidated Petitions before us.
These nine highly-voluminous cases, however, all boil down

essentially to just these five sets of legal questions requiring resolution:
(a) The validity or invalidity and legal efficacy of Saggunian’s two

distinct acts of rescission of the MOA;
(b) The duty of a trial judge to dismiss a case assailing the validity
of the MOA and the city resolution approving it in view of the pendency
of the various petitions before this Court;
(c) the liability of : (i) respondent city officials of Baguio, for

various counts of indirect contempt of this court, (ii) some respondents,
who are lawyers at the same time, for acts that require the disciplinary
action of disbarment, (iii) respondent Judge Pamintuan, for taking
cognizance of a civil case allegedly in defiance of this Court’s authority;
(d) the validity of the administrative suspension of one of the

respondents herein, former Mayor Braulio Yaranon, by the Office of the
President in relation to his acts of non-recognition of the MOA; and
1 By “rescission” we mean “resolution” as provided for in Article 1191 of the Civil Code of the Philippines.
2 The case was docketed as Civil Case No. 6089-R and assigned to Regional Trial Court of Baguio City
(Branch 3) then presided by Judge Fernando Vil Pamintuan.
(e) the nullification of certain acts of officials of Baguio City
directed against Jadewell pursuant to their belief that the latter had no
authority to continue implementing the terms of the MOA.
THE ANTECEDENT FACTS
On 1 March 1999, Jadewell proposed the privatization3 of the

administration of on-street parking in Baguio City using Schlumberger’s
DG4S Pay and Display Parking Meter (hereinafter “DG4S P&D”), which it
touted as “technologically advanced, up to the level of more progressive
countries and which would make the city as the first and only city in the
Philippines, if not in Asia, to have metered parking as an important part of
its traffic and parking system.”4
Respondent Sanggunian acted favorably on the proposal.5 On 31 May

2000, it passed Resolution No. 159, Series of 1999, authorizing the City
Mayor of Baguio to negotiate and enter into a Memorandum of Agreement
with Jadewell for the installation of its proposed DG4S parking technology.6
On 16 July 1999, the City Mayor of Baguio wrote to Jadewell,

transmitting to it the finalized draft of the MOA, with amendments
emanating from his office. The City Mayor informed Jadewell that the
finalization of the MOA would be subject to the appropriate action of
the Sanggunian and the passage of an enabling ordinance.7
On 27 March 2000, respondent Sanggunian enacted City Ordinance

No. 003, Series of 2000 (Ordinance No. 003-2000) amending Ordinance
No. 13, Series of 1983, outlining the rules and policy on the privatization of
the administration of on-street parking in the city streets of Baguio.8 For this
purpose, the City of Baguio authorized the intervention of a private operator
for the regulation, charging and collection of parking fees and the
installation of modern parking meters, among others.
On 10 April 2000, the City Legal Officer of Baguio City advised the
City Mayor that the project for the regulation of on-street parking and
installation of parking meters was not an infrastructure. Hence, the project
was not covered by the Build-Operate-Transfer Law9 and did not require
publication of a notice for its validity.10
3
Rollo (G.R. No. 160025), p. 360.
4 Id. at 394.
5 Id.
6 Id. at 37.
7
Id. at 37-38.
8 Id. at 71.
9 Republic Act No. 6957 – “An Act Authorizing the Financing, Construction, Operation and
Maintenance of Infrastructure Projects by the Private Sector and for Other Purposes.”
10
Rollo (G.R. No. 160025), p. 2984.
Nevertheless, for the sake of transparency, the City Legal Officer
recommended the publication of the appropriate notice on the project and an
invitation to bid. An invitation to bid for the proposed regulation of on-street
parking and installation of parking meters on Baguio City’s streets was
published in the Philippine Daily Inquirer on 8, 9 and 10 May 2000. Four
interested bidders submitted their proposals, but three were disqualified. The
bid of Jadewell was the only one not disqualified; hence, it was awarded the
project.11
On 26 June 2000, the MOA was finally executed between Jadewell

and the City of Baguio – through its then City Mayor, Mauricio G.
Domogan – for the installation, management and operation of the DG4S
P&D parking meters.12
On 17 July 2000, the Sanggunian confirmed the MOA through its

Resolution No. 205-2000.13
On 31 August 2000, the parties executed a supplemental MOA to

include the Ganza/Burnham parking space, owned by the Philippine
Tourism Authority and managed by the City of Baguio, in the project.14 This
supplemental agreement was neither confirmed nor ratified by the
Sanggunian.
In September of 2000, Jadewell began to mobilize and take over the

parking facilities at the Ganza/Burnham Park area.15 Around this time,
questions arose regarding the compliance by Jadewell with the provisions of
the MOA, notably on matters such as obtaining the recommendation from
the Department of Public Works and Highways (DPWH) for the installation
of the parking meters and the legality of the collection of parking fees being
done by its parking attendants prior to the installation of the parking meters
at Burnham Park.16
On 20 December 2000, Jadewell wrote then Vice-Mayor Daniel T.

Fariñas to inform him of the progress of the deputization by the Department
of Transportation and Communications–Land Transportation Office
(DOTC-LTO) of parking attendants required for the implementation of the
MOA. Jadewell explained that they were still working on the required
deputization of Jadewell’s parking attendants. Nevertheless, it claimed that
its parking attendants were authorized to collect parking fees pending the
actual installation of the parking meters. It also claimed that the parking
11 Id. at 2985.
12 Id. at 107.
13 Id. at 39.
14
Rollo, (G.R. NO. 164107), pp. 145-146.
15
Id. at 2986.
16
Id. at 2987.
meters had not yet been installed because the necessary civil works were yet
to be completed.17
Shortly thereafter, a case was filed by Edgar M. Avila, et al. with the
RTC-Baguio City (Branch 61), assailing Ordinance No. 003-2000 as
unconstitutional and seeking to restrain the City Government of Baguio from
implementing the provisions of the MOA. It further alleged that the City
Government could not delegate the designation of pay parking zones to
Jadewell, that the parking attendants deployed by Jadewell were not
deputized, and that the questioned ordinance creates class legislation as the
designated taxi and jeepney stands were discriminatorily removed. The case
was docketed as Civil Case No. 4892-R.18 This was dismissed on motion by
Jadewell joined by the City Government of Baguio. The lower court
declared that Ordinance No. 003-2000 is constitutional and that all acts
emanating from it are deemed “reasonable and non-discriminatory...having
been enacted in accordance with the powers granted to Baguio City by
law.”19 Complainants’ Motion for Reconsideration (MR) was denied.
On 24 August 2001, Edgar Avila, et al., filed a Rule 65 Petition for

Certiorari, Prohibition and Mandamus with the Supreme Court assailing the
RTC’s dismissal of their Complaint. The case was docketed as G.R. No.
149642. On 10 October 2001, this Court issued a Resolution dismissing the
petition of Avila, et al. for failure to state in their petition the material dates
when they received the appealed resolution and order, and to append the
original or certified true copies of the questioned resolution and order
subject of their petition.20 There was no resolution on the merits. The
Resolution became final and executory on 2 April 2002.21
A case was also filed by Nelia G. Cid against then Mayor Bernardo
Vergara, et al. when her vehicle was clamped, towed away, and impounded
by Jadewell after the latter found her car to be illegally parked. She refused
to pay the corresponding fees to Jadewell and as a result, the latter refused to
release her vehicle.22 Cid filed a case for replevin and questioned the validity
of Ordinance No. 003-2000 and the MOA, as well as the authority of
Jadewell to clamp down/tow away vehicles whose owners refuse to pay
parking fees. The case was docketed as Civil Case No. 5165-R and was
assigned to Branch 7 of RTC-Baguio. On 24 May 2002, an Omnibus Order
was issued by this RTC that addressed several pending incidents related to
the authority of Jadewell to clamp down/tow away vehicles. The Omnibus
Order upheld Jadewell’s authority to retain the vehicle of petitioner Nelia G.
Cid pending her payment of the parking and towage fees to Jadewell, and
held that the authority of Jadewell was lawfully provided in Ordinance No.
17
Id.
18
Rollo (G.R. No. 172215), pp. 351-352.
19 Id. at 359.
20 Id. at 362.
21 Id. at 366.
22 RTC records (Civil Case No. 6089-R – RTC-Br. 07 – Baguio City), pp. 85-86.
003-2000 and the MOA. Also, the RTC-Baguio took cognizance of the
ruling by this Court in G.R. No. 149642 which, in its mistaken view, upheld
the validity of the questioned ordinance and the MOA.23
Ultimately, Jadewell was able to install no more than 14 parking

meters in three (3) areas of Baguio City: six (6) on Session Road, five (5) on
Harrison Road and three (3) on Lake Drive.24 At the time that these meters
were installed, there were already verbal complaints being raised against
Jadewell by the Sanggunian for the following alleged violations:
a. Failure to install parking meters for each parking space as specified

in Section 3-F of Ordinance No. 003-2000;25
b. Failure to install a convenient and technologically advanced

parking device that is solar-powered and can measure the time a
vehicle stays in a parking slot;26
c. Failure to give the City of Baguio the latter's share of the collected
parking fee;27
d. Failure to post a performance bond in the amount of ₱1

million after its previous bond expired.28
The Sanggunian passed Resolution No. 395, Series of 2000, directing

Jadewell to comply with its obligations under the MOA for the installation
of the necessary number of parking meters.29
On 15 March 2001, Jadewell wrote to the City Mayor in response to

the mentioned Resolution, informing the said office that the former had
started operation of the off-street parking on 2 December 2000 and of the
on-street parking on 15 December 2000.30 On 27 January 2001, Jadewell
also wrote the City Treasurer that the former had completed installation of
the parking meters.31
In response to the letter of Jadewell, the City Treasurer demanded the

remittance of Baguio’s share of the parking fees collected by Jadewell since
it started operations. Jadewell responded by saying that it had complied with
this obligation.32
23
Rollo (G.R. No. 172215), pp. 365-371.
24
Rollo (G.R. No. 160025), p. 76.
25 Id. at 2987. There were 100 designated parking spaces.
26 Id. at 2988.
27 Id. at 2990.
28 Id.
29
Id. at 400.
30
Id.
31
Rollo (G.R. No. 164107), p. 218.
32
Rollo (G.R. No. 172215), p. 401.
On 19 February 2002, the Sanggunian passed Resolution 37,33
expressing its intent to rescind the MOA with Jadewell. The said Resolution
enumerated in the “Whereas” clauses the alleged violations of Jadewell
prompting it to rescind the MOA. It reads:
xxxx
WHEREAS, it now appears from verified facts that:
1. contrary to its commitment to install a technologically based P &

D parking system, at no cost to the City, including “such equipment and
paraphernalia to meter the length of usage of the affected parking spaces
for purposes of payment of the parking fees”, Jadewell has installed only
fourteen (14) parking meters (only 12 of which are working) in only three
(3) streets, and Jadewell does not intend to install anymore [sic]; instead it
has resorted as a rule to an exceptional circumstance of manual collection
of parking fees by parking attendants who, despite express provisions of
the Ordinance, are not duly deputized by the DOTC-LTO. Despite
assurances to the Honorable City Mayor that Jadewell would stop
collection of parking fees until the parking meters have been duly
installed, Jadewell continues to collect parking fees manually by using
undeputized parking attendants to do the collection;
2. contrary to its commitment to install a technologically based P &

D parking system, at no cost to the City, Jadewell has charged the cost of
such and similar equipment as direct costs, thus substantially eroding the
share of the City in the parking fees;
3. contrary to its obligation to post a performance bond, Jadewell has

not fully complied, and when required to update its performance bond
Jadewell refused to do so rationalizing its non-compliance by the
assertion that they are already performing and therefore are no longer
obligated to post a performance bond;
4. contrary to its obligation to remit the share of the City within the
first ten (10) days of the following month, Jadewell had initially resisted
making payments to the City on the pretext that the profits cannot be
determined until after the end of the fiscal year and initially failed to have
their tickets pre-numbered and registered with the Office of the City
Treasurer;
5. contrary to its promise that the City would derive substantial

revenue from the on-street pay parking system, Jadewell has not paid a
single centavo of the City share in on-street parking operation; whatever
Jadewell has remitted to the City are properly chargeable against the
share of the City in the MOA on off-street parking (the Burnham Parking
Area near Ganza), and it appears less than what the City is entitled
thereto; and
6. contrary to its representations that the P & D System which it

proposed would eliminate fraud in the collection of parking fees,
Jadewell has perpetrated fraud on the City by, according to the affidavit
33
Rollo (G.R. No. 160025), pp. 120-122.
of its former bookkeeper, Mr. Adonis Cabungan, doctoring the financial
statements before the same are submitted to City authorities.34
WHEREAS, there has been no substantial improvement of the

traffic situation in the City even with the introduction of the P & D
Parking System and thus it increasingly appears that the system
introduced by Jadewell is more for revenue raising than for regulatory
purposes. As a consequence the legal principle applies that the collection
of taxes cannot be let to any person. In other words, government cannot
allow private persons to collect public funds for themselves with the
agreement that part thereof or as it turned out in this case no part thereof
is shared with the City;
WHEREAS, in its financial reports to the City showing substantial

loses [sic] and in its statement to other persons that it is losing money on
the project, the kindest thing that the City can do for Jadewell is to
prevent Jadewell from incurring anymore [sic] loses.
NOW THEREFORE, on motion of Hon. Bautista, and Hon.

Cariño, seconded by Hon. Yaranon, Hon. Weygan and Hon. Tabora, be it
RESOLVED, as it is hereby resolved, to rescind the Memorandum

of Agreement (MOA) executed between the City of Baguio and Jadewell
Parking System Corporation dated 26 June 2000 on the basis of the
foregoing premises and exercising its rights under Section 12 of the MOA
on the subject of On-Street Parking executed between the City of Baguio
and Jadewell Parking Systems Corporation dated 26 June 2000 and, more
importantly, performing its duty to protect and promote the general
welfare of the people of Baguio City.
RESOLVED FURTHER, to direct the City Legal Officer to cause

the proper notice of rescission to Jadewell Parking Systems Corporation
forthwith and to take all appropriate steps to implement and enforce the
intent of this Resolution.
RESOLVED FURTHERMORE, to inform all City officials and

employees and all other persons concerned to be guided accordingly.35
On 1 March 2002, the then City Mayor of Baguio, Bernardo M.

Vergara, vetoed Resolution 37, through a letter dated 1 March 2002
addressed to the Vice-Mayor, as Presiding Officer of the Sanggunian, and its
members. Mayor Vergara reasoned that it was premature for the
Sangguniang Panlungsod to rescind the MOA, because the latter provides
for a minimum period of five years before the right of rescission can be
34 Rollo (G.R. No. 163052), pp. 376-377. The affidavit of Adonis Cabungan was appended to the 13
July 2003 Report of the COA-CAR. Mr. Cabungan stated in his affidavit that as bookkeeper of
Jadewell, he noticed that the financial statements (FS) the company submitted to the local government of
Baguio City were altered or changed. He detailed his observations on the altered FS as follows: a) the
expenses reflected in the FS actually included the salary of Mr. Tan’s personal housemaid and the rental
for of his house in Bukaneg St., Baguio City; b) the FS for the months of April to August 2001 was
padded by Jadewell by
₱300,000 that was reflected as salaries of its managers, office personnel and utility; and c) that the monthly
depreciation of a motorcycle with side car was included despite its being not operational. He further stated
that he was instructed by Mrs. Tan not to sign the monthly FS he submits to Jadewell and to send those by
facsimile to their office in Manila.
35 Supra note
33.
exercised; and, that the right of Jadewell to due process was violated due to
the lack of opportunity to hear the latter’s side. The City Mayor proposed a
re-negotiation of the MOA with Jadewell as a solution to the problem.36
Meanwhile, on 13 March 2002, the DOTC–Cordillera Autonomous

Region (DOTC-CAR) issued a cease and desist order to Jadewell prohibiting
it from clamping down and/or towing away vehicles in Baguio City for
violation of traffic rules and regulations.37
On 17 April 2002, the Sanggunian resolved through a Resolution of

the same date, to override the veto of the City Mayor, worded thus:
NOW THEREFORE, the Sangguniang Panlungsod (City Council)

in Regular Session assembled, by twelve affirmative votes constituting
more that [sic] a two-thirds vote of all its Members, has resolved to
override, as it hereby overrides, the veto of His Honor, Mayor Bernardo
M. Vergara, of City Resolution Numbered 037, Series of 2002, entitled
“Rescinding the Memorandum of Agreement (MOA) Executed Between
the City of Baguio and Jadewell Parking Systems Corporation Dated 26
June 2000.”38
Also at this time, Braulio D. Yaranon, who was then a member of the
Sanggunian, requested a special audit from the Commission on Audit–
Cordillera Autonomous Region (COA-CAR) on the operations of Jadewell
as regards the pay parking project embodied in the MOA.
On 27 May 2002, Jadewell filed with the RTC of Baguio City a Rule
65 Petition for Certiorari, Prohibition and Mandamus with Prayer for the
Issuance of a Writ of Preliminary Injunction, assailing the validity of
Resolution No. 037-2002, which rescinded the MOA between the
Sangguniang Panlungsod and Jadewell.39 The case was docketed as Civil
Case No. 5285-R and was raffled off to RTC-Baguio (Branch 61).
On 8 October 2002, the RTC Br. 61 promulgated its Decision40

finding the Sanggunian’s rescission of the MOA unlawful. The Sanggunian
then filed an appeal assailing the RTC’s decision with the Court of Appeals;
the case was docketed as CA-G.R. SP No. 74756.
Meanwhile, pending resolution of CA-G.R. SP No. 74756 before the

CA, the Sanggunian passed Resolution No. 089, Series of 2003. The
resolution sought the assistance of the DOTC-CAR specifically, for it to take
immediate action against the officers and personnel of Jadewell for defying
the 13 March 2002 cease-and-desist Order it issued prohibiting the latter
36
Rollo (G.R. No. 160025), p. 124.
37
Rollo (G.R. No. 166094), p. 33.
38
Rollo (G.R. No. 160025), p. 125.
39
Id. at 74.
40
Id. at 145-159.
from clamping down and/or towing away vehicles.41 On 27 May 2003, City
Mayor Vergara approved and signed Resolution No. 089-2003. In response,
Jadewell filed a Petition for Indirect Contempt with the CA against Mayor
Vergara, the Sanggunian and other local government officers. The case was
docketed as CA-G.R. SP No. 77341. The original petition was followed by
three (3) supplemental petitions filed by Jadewell in the same case.
On 7 July 2003, the CA rendered a Decision42 in CA G.R. SP No.

74756, affirming the assailed Decision of the trial court which declared as
invalid the Sanggunian’s rescission of the MOA. The Sanggunian filed a
Motion For Reconsideration, but this was denied by the CA through a
Resolution dated 4 September 2003.43 Aggrieved by the denial of their
appeal, the Sanggunian filed a Rule 45 Petition for Review on Certiorari
with this Court, seeking to reverse and set aside the 7 July 2003 Decision
and its Resolution dated 04 September 2003 of the CA. The petition was
docketed as G.R. No. 160025, the first of the consolidated petitions herein.44
In CA-G.R. SP No. 77341, the CA dismissed in a Decision45

promulgated on 28 July 2004 the contempt petitions filed by Jadewell for
lack of merit. The latter’s Motion For Reconsideration was likewise denied
by the CA.46 Jadewell elevated the dismissal of its contempt petitions to this
Court on 8 December 2004 by filing a Rule 45 Petition for Review on
Certiorari. The case was docketed as G.R. No. 166094. This is not among
the consolidated petitions herein.
On 13 July 2003, the COA-CAR promulgated the requested Report.47

The Report’s objective was to ascertain compliance by the contracting
parties – the City of Baguio and Jadewell – with Ordinance No. 003-2000
and the MOA. The COA-CAR Report has 12 findings, essentially as
follows:
1) The provisions of the MOA and its Supplement as regards the

sharing of the fees are contradicting, hence the share of the City
Government cannot be determined;48
2) There was no proper segregation by area of the parking fees
collected, hence the proper share of Baguio City cannot be determined;49
3) The City Government did not strictly implement the collection

of penalties arising from the late remittances of Jadewell, hence
additional revenues were not collected;50
41
Rollo (G.R. No. 166094), p. 34.
42
Rollo (G.R. No. 160025), p. 70.
43 Id. at 83.
44 Id. at 32.
45
Rollo (G.R. No. 166094), p. 30.
46
Id. at 49.
47
Rollo (G.R. No. 163052), pp. 173 to 467.
48 Id. at 182.
49 Id. at 187.
50 Id. at 191
4) The City Treasurer did not conduct an audit of the books and
accounts of Jadewell, thus the City Government’s share from parking fees
cannot be ascertained;51
5) The use of the P&D parking meters were [sic] not maximized
due to Jadewell’s non-compliance with Ordinance No. 003-2000 and the
MOA, resulting in the collection of meager income from its use;52
6) The MOA does not specify the guidelines for determining the
economic viability of installing the parking meters and the period within
which to install it [sic];53
7) The Supplemental MOA was not confirmed by the City Council of

Baguio in violation of R.A. No. 7160 (the Local Government Code);54
8) The coverage of the parking operations contained in Annex “A” of

the MOA was not confirmed by the City Council in violation of R.A. No.
7160;55
9) The City Government failed to ensure proper compliance by

Jadewell with the MOA provisions;56
10) The pay parking project was awarded to a bidder who did not have
all the qualifications as stated in the “Invitation to Bid” in violation of
R.A. No. 7160 and Audit Circular No. 92-386;57
11) The provisions on deputization in Ordinance No. 003-2000 and the

MOA are contrary to R.A. No. 4136 (the Land Transportation and Traffic
Code), thus rendering it invalid;58
12) The monthly minimum amount to be remitted to the City

Government is doubtful due to the discrepancy in the amounts collected
and expenses for the year 1999 provided by the City Government to
Jadewell as against the amount certified by the Office of the City Architect
and Parks Superintendent-Burnham Parks Office for the City Government
overseeing the Ganza-Burnham parking spaces.59
51 Id. at 196.
52 Id. at 200.
53 Id. at 203.
54 Id. at 206.
55 Id. at 208.
56 Id. at 212.
57 Id. at 217. The CAR-COA Report found that Jadewell lacked the 10-year experience in the pay
parking business as specified in the “Invitation to Bid”. Thus:
xxxx
Management awarded the pay parking project to a bidder whose performance on implementing a
technologically-based parking system using the Schlumberger DG4s Pay & Display machines is not tested.
Except for the Ganza parking area which employs a different machine, almost all collections from the other
parking places were made manually.
The audit team issued an Audit Observation Memorandum (Annex 54), requesting for the minutes
of the meeting of the Committee on Awards. This document could have revealed whether there was a
prequalification of bidders as it was apparent that none of the bidders were qualified.
xxxx
58 Id. at 220.
59 Id. at 120.
On 11 February 2004, after G.R. No. 160025 was filed and pending
resolution by this Court, the Sangguniang Panlungsod adopted Resolution
No. 056, Series of 2004. The said Resolution informs the general public that
Jadewell had neither the authority nor the police power to clamp, tow, or
impound vehicles at any place in the City of Baguio.60 Also, on the same
date, the Sangguniang Panlungsod passed Resolution No. 059, Series of
2004, in which it made a formal demand upon Jadewell to restore to it
possession of the Ganza Parking Area.61
With these developments, Jadewell filed directly with this Court its
first indirect contempt case against Bernardo M. Vergara (then City Mayor
of Baguio), its Vice-Mayor, and the entire City Council for enacting
Resolution Nos. 056 & 059, Series of 2004 pending resolution by this Court
of G.R. 160025. The case was docketed as G.R. No. 163052.
On 23 June 2004, this Court through its First Division, ordered G.R.
No. 163052 consolidated with G.R. No. 160025.62
On 1 July 2004, then Baguio City Mayor Braulio D. Yaranon issued

Executive Order No. 001-04,63 the decretal portion of which reads:
NOW, THEREFORE, the undersigned City Mayor, pursuant to his

authority to enforce all laws and ordinances relative to the governance of
the City, and to issue executive orders for the faithful and appropriate
enforcement and execution of such laws and ordinances (Sec. 455 (b) (2)
and (iii), R.A. 7160) hereby affirms and gives protection to the right of the
citizenry, particularly affected motor vehicle owners, operators, and
drivers, to refuse to submit to the enforcement of Ordinance 003-2000, by
the Jadewell Parking Systems Corporation, and further to refuse to pay
public revenue in the form of fees, charges, impositions, fines, and
penalties provided for in the said ordinance, to the said entity, such acts
being patently illegal and prohibited by law; this Executive Order shall be
in force and effect until the City Council, as the legislative arm of the City
of Baguio, shall have adopted appropriate remedial or corrective measures
on the matters and concerns specified hereinabove.
On 8 July 2004, Mayor Yaranon issued a Memorandum64 to the City

Director of the Baguio City Police Department, directing the department to
stop and prevent Jadewell from clamping, towing, and impounding vehicles;
to arrest and file criminal charges against Jadewell personnel who would
execute the proscribed acts specified in the said Memorandum; and to
confiscate the equipment used by Jadewell to clamp, tow, or impound
vehicles under the authority of the rescinded MOA.
60
Rollo (G.R. No. 163052), p. 7.
61
Supra.
62
Rollo (G.R. No. 163052), p. 102.
63
Rollo (G.R. No. 164107), p. 4.
64
Rollo (G.R. No. 164107), pp. 25-26.
On 12 July 2004, Jadewell filed its second Petition for indirect
contempt again with this Court, this time against Mayor Yaranon for having
issued the above-cited Order also for the same reasons given in its first
contempt petition with this Court. The Petition was docketed as G.R. No.
164107.
Furthermore, on 15 July 2004, Jadewell filed an administrative case

against Mayor Yaranon before the Office of the President (OP). Docketed as
Case No. OP 04-G-294, it sought the mayor’s suspension and removal from
office. The case against Mayor Yaranon was for his issuance of the
following: (1) Executive Order No. 001-04 dated 1 July 2004; (2) the
Memorandum dated 7 July 2004 limiting the pay parking business of
Jadewell to certain parts of Baguio City; and (3) Memorandum dated 8 July
2004 directing the Baguio City Police Department to prevent Jadewell from
apprehending, towing and impounding vehicles. A supplemental petition
filed by Jadewell on 19 January 2005, complaining of Executive Order No.
005-2004, which was issued on 15 October 2004, was also included in
administrative case OP 04-G-294.
On the following day, 16 July 2004, Jadewell filed a Supplemental

Petition with Motion for Leave of this Court65 in the second contempt
petition before this Court, G.R. No. 164107, alleging as a supplemental fact,
Mayor Yaranon’s Memorandum of 08 July 2004.
On 15 October 2004, Mayor Yaranon issued Executive Order No.

005-2004.66 This was a cease and desist order against Jadewell to prevent it
from performing the following acts: (1) charging and collecting from
motorists, parking fees without their consent;67 (2) seizing and detaining
vehicles of motorists who refuse to pay parking fees to Jadewell;68 and (3)
using yellow-colored heavy wreckers or tow trucks bearing the name “City
of Baguio”.69
In addition to Executive Order No. 005-2004, Mayor Yaranon issued

Executive Order No. 005-2004-A, which is essentially a rehash of
Executive Order No. 005-2004.70
On 25 October 2004, Jadewell filed a third Petition with this Court,

praying that Mayor Yaranon be cited for contempt and that Executive Order
No. 005-2004 be nullified.71 This case was docketed as G.R. No. 165564.
On 16 November 2004, Jadewell filed a Supplemental Petition to this
65
Id. at 18.
66
Rollo (G.R. No. 165564), pp. 14-16
67 Id. at 6.
68 Id. at 7.
69 Id.
70 Id. at 20.
71 Id. at 11.
Petition alleging as a supplemental ground the issuance of Executive Order
No. 005-2004-A.72
On 20 December 2004, Mayor Yaranon issued Administrative Order

No. 622, Series of 2004, which declared that Jadewell exceeded its area of
operations for the administration of on-street parking and was thus required
to show lawful cause why its business permit should not be revoked. In
response to this Order, Jadewell filed a Second Supplemental Petition for
contempt against Mayor Yaranon in G.R. No. 165564 on 25 January 2005.
On 10 January 2005, this Court through a Resolution73 ordered the

consolidation of G.R. No. 160025 with G.R. Nos. 163052, 164107, and
165564.
On 17 January 2005, this Court denied Jadewell’s petition in G.R. No.

166094 for failure to show any reversible error on the part of the CA in
dismissing its petition for contempt in CA-G.R. SP No. 77341.74 Its Motion
For Reconsideration was likewise denied with finality.75
In the beginning of the year 2005, Jadewell attempted to renew its

business permit from the City of Baguio and tendered the fees required.
However, the Office of the City Mayor refused to renew the business permit
and returned the amount tendered.76 Because of these actions of Mayor
Yaranon, Jadewell filed on 15 April 2005 its Third Supplemental Petition in
G.R. No. 164107, which had been consolidated with G.R. Nos. 160025,
163052, and 165564. Aside from its main prayer to cite the mayor for
contempt, Jadewell also prayed that Mayor Yaranon, a lawyer, be
disbarred.77 On 25 April 2005, this Court, through its Third Division,
admitted the Third Supplemental Petition of Jadewell.78
On 9 February 2005, this Court, in G.R. No. 160025, issued a Writ of

preliminary mandatory injunction ordering Mayor Yaranon to immediately
reopen the streets and premises occupied and/or operated by Jadewell. The
Court also required Jadewell to post a cash or surety bond in the amount of
₱100,000 within five days from receipt of the
order.79
The order, in part, reads:
Acting on the urgent motion dated January 26, 2005 of respondent

Jadewell Parking Systems Corporation for the issuance of a
temporary mandatory/preventive order and/or for writ of
preliminary
72 Id. at 28.
73 Id. at 165.
74
Rollo (G.R. No. 166094), p. 56.
75
Id. at 65.
76
Rollo (G.R. No. 164107), pp. 319-320.
77 Id. at 323.
78 Id. at 341.
79
Rollo (G.R. No. 160025), pp. 460-461.
mandatory/prohibitory injunction pending appeal in G.R. No. 160025,
alleging that the effects of the acts of City Mayor Yaranon, unless stayed,
would also make effective what the petitioner Sangguniang Panglungsod
ng Baguio failed to obtain in the instant case, the net effect of which
would not only be grave damage and injury to the respondent but also to
the City of Baguio, the Court further Resolved:
(a) to ISSUE, the WRIT OF PRELIMINARY MANDATORY

INJUNCTION prayed for, effective immediately,
commanding City Mayor Yaranon to immediately reopen
the streets and/or premises operated and/or occupied by the
respondent and to let them remain open, until further orders
of this Court; and
(b) to require petitioner to POST a CASH BOND or a

SURETY BOND from a reputable bonding company of
indubitable solvency in the amount of ONE HUNDRED
THOUSAND PESOS (P100,000.00), with terms and
conditions to be approved by the Court, within five (5)
days from notice, otherwise, the writ of preliminary
mandatory injunction herein issued shall
AUTOMATICALLY be lifted.
NOW THEREFORE, You, [City Mayor Braulio D. Yaranon],

your agents, representatives and/or any person or persons acting upon
your orders or in your place or stead, are hereby DIRECTED to
IMMEDIATELY REOPEN the streets and/or premises operated and/or
occupied by the respondents and to let the said streets and premises
remain OPEN, until further orders from this Court.
On 8 April 2005, Mayor Yaranon issued a Memorandum80 directing

Col. Isagani Nerez, Director of the Baguio City Police District, to create a
special task force to stop Jadewell from clamping, towing, and impounding
vehicles in violation of parking rules in Baguio City; to impound the
wrecker/tow trucks used by Jadewell.
On 20 April 2005, this Court promulgated a Resolution in G.R. No.

160025, finding Mayor Yaranon guilty of direct and indirect contempt. He
was cited for direct contempt when it was proven that he had submitted
pleadings before this Court containing falsehoods. Mayor Yaranon had
stated in his Compliance that the streets were opened for Jadewell to resume
operations, but upon inspection these were found to be closed.81 He was also
cited for indirect contempt, for having continuously refused to carry out the
writ issued by this Court to reopen the streets so Jadewell could resume
operations.82 This Court likewise fined Mayor Yaranon the amount of
₱10,000, which he paid. The Court further ordered the National Bureau of
Investigation (NBI) to immediately arrest and detain Mayor Yaranon
pending his compliance with the 9 February 2005 writ of preliminary
80
Rollo (G.R. No. 164107), p. 332.
81
Id. at 333-340.
82
Id. at 339.
mandatory injunction issued by this Court, which ordered the reopening of
some streets so Jadewell could continue its operations.83
On 10 August 2005, Benedicto Balajadia, et al. filed Civil Case No.

6089-R against Jadewell before the RTC–Baguio City. The case was
subsequently raffled to Branch 3 of the RTC presided by Judge Fernando Vil
Pamintuan.84 Balajadia, et al. sought to nullify the MOA between Jadewell
and the City Government of Baguio and its enabling ordinance, Ordinance
No. 003-2000. The complainants also prayed for the issuance of a
Temporary Restraining Order (TRO) and for a writ of preliminary injunction
against Jadewell.
On 19 April 2006, Judge Pamintuan issued an Order in Civil Case No.

6089-R granting the prayer of complainants Balajadia et al. for the issuance
of a Writ of Preliminary Prohibitory Injunction. The injunction was meant to
restrain Jadewell from proceeding with the supervision and collection of
parking, towing, and impounding fees on the streets of Baguio City. Further,
Judge Pamintuan ordered the holding in abeyance of the implementation of
City Ordinance No. 003-2000 and the MOA.85
On 27 April 2006, Jadewell filed with this Court a Rule 65 Petition for
Certiorari, Prohibition, and Mandamus against Judge Pamintuan86 for
refusing to dismiss Civil Case No. 6089-R. The case was docketed as G.R.
No. 172215. On the same day, Jadewell filed a Petition asking this Court to
cite Judge Pamintuan for contempt. This fourth contempt case, albeit
primarily against a member of the judiciary, was docketed as G.R. No.
172216.
On 19 June 2006, G.R. No. 172215 was ordered consolidated with

G.R. Nos. 160025, 163052, 164107, and 165564.87
On 23 June 2006, Mayor Yaranon wrote Jadewell a letter demanding

that it desist from operating the pay parking system in Baguio City.
Simultaneously, he wrote the Sanggunian, requesting it to cancel Ordinance
No. 003-2000, the enabling ordinance for the MOA.
On 26 June 2006, Jadewell filed a Supplemental Petition88 in G.R.

No. 172215 complaining of Judge Pamintuan’s issuance of the following
Orders in Civil Case No. 6089-R: (a) Order dated 24 April 200689 directing
the parties to file a pre-trial brief and setting the pre-trial of the case; (b)
83
Rollo (G.R. No. 160025), p. 602.
84
Rollo (G.R. No. 172215), p. 111.
85
Id. at 53-56.
86
Presiding Judge of Branch 3, Regional Trial Court of Baguio City.
87
Rollo (G.R. No. 160025), p. 697.
88
Rollo (G.R. No. 172215), p. 593.
89
Id. at 610.
Order dated 01 June 200690 informing Jadewell that public respondent was
not suspending the proceedings, because he believed he was not covered by
the writ issued by this Court; (c) Order dated 14 June 200691 upholding the
writ he issued in the civil case despite his receipt of a copy of the writ of
preliminary injunction issued by this Court; and (d) Order dated 16 June
200692 directing Jadewell to comply with the writ of preliminary prohibitory
injunction under pain of direct contempt.
On the same day, 26 June 2006, the Office of the President (OP)
rendered a Decision in OP 04-G-294, the administrative case Jadewell had
filed against Mayor Yaranon, finding him guilty of grave misconduct, abuse
of authority, and oppression. Mayor Yaranon was meted out a penalty
totalling 12 months suspension from office.93 This suspension was
implemented by the Department of Interior and Local Government (DILG).
Aggrieved by his suspension, Mayor Yaranon filed his Motion For
Reconsideration, which was denied on 22 August 2006 by the OP.
On 29 June 2006, in response to Mayor Yaranon’s letters of 23 June

2006, Jadewell filed before this Court yet another case for contempt – its
fifth contempt case, and the third one specifically against Mayor Yaranon. In
addition to its prayer to cite the mayor for contempt, Jadewell also prayed
that Mayor Yaranon, a lawyer, be disbarred.94 The case was docketed as
G.R. No. 173043.
On 31 July 2006, G.R. No. 173043 was ordered consolidated with

G.R. Nos. 160025, 163052, 164107, 165564, and 172215.95 On 27
September 2006, G.R. No. 172216 was consolidated with G.R. Nos. 160025,
163052, 164107, 165564.96
On 23 August 2006, while the consolidated cases were pending

resolution before this Court, the Sangguniang Panlungsod enacted
Resolution No. 204, Series of 2006. The Resolution directed the City Legal
Officer to notify Jadewell of the Baguio City Government’s intention to
rescind the MOA, and to inform Jadewell to stop its operations under the
MOA 60 days after receipt of the Notice.97
On 28 August 2006, the legal counsel for Jadewell wrote to Baguio

City Vice-Mayor Bautista, Jr., informing him that the OP had denied the
Motion for Reconsideration of Mayor Yaranon assailing the OP resolution
ordering the latter’s suspension as City Mayor of Baguio City.98 The counsel
90
Id. at 611-615.
91 Id. at 16.
92 Id. at 217.
93
Rollo, (G.R. No. 181488), p. 166.
94
Rollo (G.R. No. 173043), p.10.
95
Id. at 102.
96
Rollo (G.R. No. 172216), p. 273.
97
Id. at 21.
98
Rollo (G.R. No. 174879), p. 24.
for Jadewell likewise stated in his letter that they were aware that the
Sanggunian was planning to issue a resolution to repeal Ordinance No. 003-
2000 and rescind the MOA. The letter requested the Vice-Mayor to veto the
measure in light of the pending petitions with the Supreme Court.99 The said
counsel likewise sent a similar letter to the Sanggunian, urging it to desist
from implementing the repeal of Ordinance No. 003-2000 and the rescission
of the MOA pending the resolution of the cases with the Supreme Court.100
On 13 September 2006, Mayor Yaranon appealed to the CA, in a case

docketed as CA G.R. CV SP No. 96116, praying for the lifting of the
penalty of suspension meted him in OP 04-G-294, but this appeal was
denied. Mayor Yaranon moved for reconsideration.101
On 22 September 2006, City Legal Officer Rabanes wrote a letter to

Jadewell, through its President, Mr. Rogelio Tan, informing Jadewell of
Resolution No. 204, Series of 2006, which rescinded the MOA, and
ordering it to stop operations within 60 days from notice.102 This letter was
received on the same day it was issued;103 hence, the 60-day period lapsed
on 22 November 2006. This notice, together with the resolution,
constitute the second act of rescission of the MOA by the city officials of
Baguio.
On 19 October 2006, Jadewell filed the sixth contempt case with this
Court against the acting City Mayor of Baguio, Reinaldo A. Bautista, Jr.,
and the members of the Sanggunian, including City Legal Officer Melchor
Carlos R. Rabanes, for the second act of rescission of the MOA.104 The case
was docketed as G.R. No. 174879.
On 9 October 2007, the CA dismissed Mayor Yaranon’s Petition in

CA G.R. CV SP No. 96116 on the ground that it had become moot and
academic due to Mayor Yaranon’s failure to be re-elected in the 17 May
2007 elections. Mayor Yaranon filed a Motion for Reconsideration on 07
November 2007, but this was also denied by the CA on 24 January 2008.
Thus, on 17 March 2008, Mayor Yaranon filed a Rule 45 Petition before this
Court seeking to reverse and set aside the CA Decision and Resolution. It
was docketed as G.R. No. 181488.
On 12 November 2008, G.R. No. 181488 was ordered

consolidated with the cases already mentioned.105
99 Id.
100 Id. at 25.
101
Rollo (G.R. No. 181488), p. 19.
102
Rollo (G.R. No. 174879), p. 23.
103
104
Id.
Id. at pp. 13-19.
105
Rollo (G.R. No. 181488), p. 454.
THE ISSUES
1. On G.R. No. 160025 and on the

claim in G.R. No. 174879 that the second
act of rescission was a valid act of
rescission.
Whilst the issues are spread out among the nine cases, we have
grouped these according to what are common to the specific cases.
In our effort to simplify the issues and provide forms of relief to the
parties that are not purely academic, it is necessary to examine the operative
effects that may result from any resolution of this Court. Such examination
may also help guide the parties in their future actions, and perhaps the
overly-litigated matters brought before us in the consolidated petitions may
finally be put to rest.
We note at the outset that on 22 November 2006, 60 days had lapsed

from receipt of the letter dated 22 September 2006, informing Jadewell of
the decision of the City of Baguio to rescind the MOA under Section 12
thereof. It may be recalled that Section 12 requires that notice of the
intention to rescind be given 60 days prior to the effectivity of the rescission.
Jadewell has not questioned the legal efficacy of this notice. It has brought
this matter of a second rescission to the Court’s attention only as a matter of
contumacious behavior on the part of the respondents in G.R. No. 174879, in
the same way that it brought various actions of the public respondents before
the Court in its other contempt petitions. Since the legal efficacy of the
rescission in 2006 has not been contested by Jadewell in any of the petitions
before us, we thus consider this notice of rescission to have taken legal
effect and therefore, at the latest, the MOA between the City of Baguio
and Jadewell has ceased to legally exist as of 22 November 2006.
Parenthetically, we note that while the validity of the second act of

rescission described in G.R. No. 174879 is not principally determinative of
the respondents’ liability for indirect contempt therein, a conclusion that the
second act of rescission was undertaken competently and appropriately will
to a certain degree impact our appreciation of such possible liability. We will
discuss this issue in our subsequent discussion on the charges of contempt.
Inasmuch as there is no longer any existing MOA, no order of this

Court can have the effect of directing the City of Baguio to enforce any
of the terms of the MOA, which brings us to the matter of G.R. No.
160025. In whatever direction we rule on the question of the validity of
the first act of rescission, such ruling will only have the effect of either
providing Jadewell a basis to seek damages from the City of Baguio for
the wrongful termination of the MOA, should we find wrongful
termination to have taken place, or, deny Jadewell that right. The
possible susceptibility of the City of Baguio and its officials to an action for
damages on a finding of wrongful termination is why we do not consider
G.R. No. 160025 as having been rendered moot by the lawful rescission of
the MOA on 22 November 2006. Thus, we will proceed to rule on the issues
in G.R. No. 160025.
The fallo of the RTC Decision upheld by the CA, which affirmance is
the lis mota in G.R. No. 160025, reads as follows:
WHEREFORE, judgment is rendered declaring both Sangguniang

Panlungsod Resolution No. 037, Series of 2002 and the April 17, 2002
Resolution overriding the Mayor’s veto as NULL and VOID. The Writ of
Preliminary Injunction earlier issued by this Court is made
PERMANENT, with costs against respondents.106
The RTC did not order the respondents therein to comply with the
MOA. An order to perform a contract is not necessarily subsumed in an
order not to terminate the same.
Contrast this legal point with the fact that the prayer of Jadewell in its
original petition asked the RTC, in relevant part:
...that the writ of preliminary injunction be made permanent and the writs
applied for be issued against the respondents nullifying and voiding
Resolution No. 037, series of 2002 and the resolution over-riding the veto
… and instead, directing them to perform what the memorandum of
agreement requires them to do. (Emphasis supplied)107
This latter part, which is effectively a prayer for a permanent

mandatory injunction against respondents therein to perform the terms of the
MOA, are not in the fallo of the RTC decision. We consider therefore that
the RTC deliberately withheld granting the specific prayer to order Baguio
City to perform the MOA. No motion to correct or clarify the said fallo
having been filed by Jadewell, the prayer to order the city officials of Baguio
to perform the MOA is hereby deemed abandoned.
We further note three things:
1. Jadewell has not questioned - in its Petition, Reply

to Comment, and Memorandum before this Court - the
implication of the RTC and CA Decisions to the effect that the
Sanggunian had the authority to perform acts of contractual
106 CA rollo, Annex “E” RTC, Civil Case No. 5285-R, p. 15.
107 Id., Annex “C” RTC Civil Case No. 5285-R, id.
rescission on behalf of the City of Baguio when both these
courts ignored the issue raised by Jadewell in its Petition before
the RTC, and we therefore do not consider this to be a genuine
issue in this Petition before us;
2. While the Sangguniang Panlungsod has insinuated
that there was fraud and excess of authority on the part of the
mayor in the execution108 of the MOA - because the latter
provided for a smaller sharing of “20 % from the gross profit
of the operation or 50% of the net profit whichever is higher”
instead of the intended “20% of gross receipts,”109- petitioners
in G.R. No. 160025 conceded even at the RTC level that they
are not assailing the MOA for being defective but for having
been breached in the performance. We thus disregard all
arguments in G.R. No. 160025 regarding the validity of the
execution of the MOA, for being a non-issue in this case;110
3. We also immediately set aside claims of Jadewell

in its Petition before the RTC that an alternative relief should be
provided by the courts in the form of compensation for
terminated Build-Operate-Transfer (BOT) contracts under the
BOT Law (Republic Act No. 6957) as there is not the slightest
basis on record that the administration of on-street parking can
be classified as an infrastructure contract, a basic element that
must be present for any contract to come within the terms of the
BOT Law.
Having preliminarily screened out the non-issues in this case, we

proceed to examine the rulings of the courts a quo in G.R. 160025.
The CA affirmed the RTC Decision in toto, along the following

points:
1. On the sole procedural issue. - The RTC was

correct in treating the Petition as one for permanent injunction
with a prayer for a preliminary injunction, instead of treating it
by its formal title: “Petition for Certiorari, Prohibition and
Mandamus with a Prayer for a Writ of Preliminary Injunction.”
It was correct in holding that if the Petition had been treated by
its formal denomination, then it would have been dismissed for
failing to satisfy the requirement that the act sought to be
108 By “execution” is meant the signing of the Memorandum of Agreement, not its
implementation.
109 This claim of the Sanggunian is doubtful, the terms of the Ordinance Number 003, series
of 2000, clearly provide for 20% of gross profit not gross receipts, as claimed by the Sanggunian in
its various pleadings. See Rollo (G.R. No. 160025), pp. 106, 116.
110 We will however tangentially deal with this issue when we discuss G.R.
No. 172215.
nullified was rendered in a judicial or quasi-judicial capacity by
the respondents, but then this formal denomination could be
disregarded and the nature of the Petition should be determined
by its allegations and prayers. Since there was a prayer to
permanently enjoin respondents from enforcing the questioned
resolutions, the RTC was correct in treating it as one for
permanent injunction.
2. On the substantive issues:
a. On the lack of due process afforded Jadewell. –

The RTC was correct in ruling that Jadewell was denied the
right to be heard before the Sanggunian rescinded the MOA.
There is no evidence on record that the Sanggunian afforded
Jadewell an opportunity to present its side or refute the charges
of the latter’s violation committed under the MOA.111
b. On the authority of the RTC to consider the effect

of Section 9 of the MOA112 when Jadewell never raised the
matter of Section 9 in any of its pleadings. – The RTC correctly
considered Jadewell’s letter dated 24 November 2001,
addressed to the Sanggunian and offered during the trial, which
introduced the subject matter of the five (5) year guarantee
against rescission provided in Section 9 of the MOA. The CA
regarded the RTC’s consideration of said letter as judicious and
added that even without it, the MOA, and its provisions, form
part of the case records.113
c. On the failure to observe the 60-day notice

requirement. – The RTC correctly found that the Sanggunian
cannot validly and unilaterally rescind the MOA without
observing the provisions in Section 12 of the MOA requiring
that a 60-day notice be given before rescission can take place.
To allow the Sanggunian to unilaterally rescind the MOA
without giving Jadewell an opportunity to present its side is to
render the right to rescission provided in the MOA legally
vulnerable.114
d.On the lack of substantiveness of the alleged

breach of performance of the MOA by Jadewell. – The CA
reviewed the records of the case and upheld the findings of the
111 CA rollo, p. 149.

112 Rollo (G.R. No. 160025), p. 117; “9. Minimum Guaranty – The FIRST PARTY guaranties a
minimum period of five (5) years against rescission; provided that after such period, the parties may agree
to increase
to a reasonable rate the parking fees and the share of the city from the parking fees collected as provided
for in the guidelines, (Annex “B”).
113
Id. at 152-153.
114 Id.
RTC that the violations of Jadewell were not substantial to
merit the consequence of rescission under the MOA.115
We elucidate on the arguments of the parties, the RTC, and the CA.
In its Petition before the RTC, Jadewell argues that the rescission of
the MOA was not valid, on due process grounds, and also because there was
no substantial breach on its part to justify a rescission of the MOA.116 It also
asserts that the Sanggunian had no authority to rescind the MOA, because
the latter was not a party thereto.117
Jadewell sought a writ of preliminary injunction to prevent the

implementation of the questioned Resolution, and prayed that after hearing,
the preliminary injunction be made permanent. It further prayed for the
issuance of a writ of certiorari to nullify the assailed Resolution; and for a
mandatory injunction to compel the City Government to perform the latter’s
obligations under the MOA.118 Jadewell alternatively invoked the provisions
of Section 18 of the Implementing Rules and Regulations (IRR) of the BOT
Law,119 in the event the RTC would uphold the validity of the questioned
Resolution.
The trial court ruled that the rescission violated the due process clause
of the Constitution and failed to meet the requirements for rescission under
the Civil Code and the MOA itself. In the Sanggunian’s Memorandum, on
appeal before the CA, the Sanggunian assigned three errors to the Decision
of the trial court: (1) the RTC ignored the evidence on record and the
requirements of Rule 65 when it declared the subject Resolution void; (2)
Jadewell was not denied due process when the MOA was rescinded; and (3)
by ruling that the Sangguniang Panlungsod had no right of rescission for the
first 5 years of the MOA – an issue not raised in the pleadings – the trial
court improperly took up the cudgels for Jadewell in the case.120
As earlier stated, the CA upheld the RTC’s Decision in toto.
The Sanggunian filed its Motion for Reconsideration arguing that the
CA had erred as follows: (1) treating Jadewell’s petition as an original action
for injunction;121 (2) ruling that Jadewell was deprived of due process122
when it rescinded the MOA; and (3) finding that the MOA stipulated for a
115 Id. at 151.

116
Rollo (G.R. No. 160025), pp. 91-92.
117 Id. at 96.
118 Id. at 99.
119 Jadewell invokes the cited provision as an alternative prayer in its original action before the
trial court. The provision cited mandates the local government unit to compensate the project proponent
in the event
that the project is revoked, cancelled or terminated.
120 CA rollo, pp.88-89.
121 Id. at 155.
122 Id. at 156.
five-year minimum guarantee against rescission.123 This was denied, and this
denial and the CA Decision are the subjects of G. R. 160025.
2. G.R. No. 172215 – Certiorari,

Prohibition and Mandamus, filed by
Jadewell against Judge Pamintuan
for not dismissing Civil Case No.
6089-R
Jadewell directly filed the instant Rule 65 Petition for Certiorari

before this Court to nullify the denial by the trial court of its Motion to
Dismiss and its Motion for Reconsideration of the same order,124 and for
ordering Jadewell to cease collecting parking fees, and from towing and
impounding vehicles on the streets of Baguio City. It also seeks to nullify
the proceedings in Civil Case No. 6089-R, invoking both res judicata and
litis pendentia.125 It contends that, since the issue on the validity of the
questioned city ordinance and the MOA was favorably ruled upon
previously by RTC Branches 7 and 61 of Baguio City in separate cases,
Branch 3 of the same RTC presided by Judge Pamintuan is bound by the
rulings of the other branches.126 Litis pendentia is being invoked in relation
to the petitions already before this Court.
Mayor Yaranon is impleaded in this case on the basis of the order of

Judge Pamintuan to the city mayor to perform his duty to supervise the
roads, streets and park of Baguio City, in coordination with the police and
the LTO during the validity of the Writ of Injunction that Judge Pamintuan
issued.127
The main issue to be resolved in Jadewell’s Petition for certiorari is

whether Judge Pamintuan’s rulings in Civil Case No. 6089-R violated the
res judicata/litis pendentia doctrines.
3. G.R. No. 181488 – The

Certiorari petition filed by Yaranon
seeking to reverse Resolutions dated
9 October 2008 and 24 January 2008
in CA-G.R. SP No. 96116 which
upheld the validity of his suspension
as City Mayor of
Baguio.
Mayor Yaranon’s instant Petition before this Court raises the

following issues: (1) that his failed re-election bid was not a supervening
123
Id. at 169-170.
124
Rollo (G.R. No. 172215), pp. 8-9.
125 Id. at 28 -30.
126 Id. at 27.
127 Id. at 10.
event in the final determination by the CA of whether he was guilty of grave
misconduct, abuse of authority, and oppression; and (2) that the CA should
rule on the substantive validity of his suspension.
4. The Petitions for

Contempt
a.G.R. No. 163052 – This is the first contempt petition filed by

Jadewell directly with this Court against City Mayor Vergara, the Vice
Mayor, and the entire Sanggunian, for enacting Resolution Nos. 056 & 059,
Series of 2004. To recall, Resolution No. 056, Series of 2004 informs the
general public that Jadewell had neither the authority nor the police power to
clamp, tow or impound vehicles at any place in the City of Baguio.128 In
Resolution No. 059, Series of 2004, the City of Baguio made a formal
demand upon Jadewell to surrender the Ganza and Burnham Park Parking
Areas within thirty days. In the same Resolution, the City of Baguio also
directed the City Legal Officer to file the appropriate legal actions necessary
to recover the said parking areas and to ask for damages against Jadewell.129
The core issue to be resolved in this case is whether the Sanggunian

Panlungsod is guilty of indirect contempt for enacting the above resolutions,
pending resolution of G.R. No. 160025.
b.G.R. No. 164107 – This contempt petition was filed directly

with this Court against then Baguio City Mayor Braulio D. Yaranon after he
issued Executive Order No. 001-04 announcing that, as City Mayor, he
would give protection to motor vehicle owners, operators, and drivers who
would refuse to submit to the enforcement of traffic rules by Jadewell such
as by refusing to pay the parking fees or fines the latter imposes.
Yaranon also issued a Memorandum dated 8 July 2004, ordering the

arrest and filing of criminal charges against Jadewell personnel who would
clamp, tow, or impound motor vehicles in defiance of Executive Order No.
001-04. This was followed by a Memorandum on 8 April 2005 directing the
Baguio City Police District to create a special task force to prevent Jadewell
from clamping, towing, and impounding vehicles found to be in violation of
the parking rules in Baguio City.
The issue to be resolved in this petition is whether Mayor Yaranon

could be cited for contempt for the above, pending resolution of the issue of
the validity of the rescission of the MOA in G.R. Nos. 160025 and 163052.
G.R. No. 165564 – Jadewell filed this third contempt petition

c.
against Mayor Yaranon for issuing Executive Order No. 005-2004 dated 15
October 2004. The order directs Jadewell to cease and desist from: (a)
128
Rollo (G.R. no. 163052), p. 7.
129
Id. at 66.
charging and collecting parking fees on the streets of Baguio City without
the consent of the City Government;130 (b) seizing and detaining vehicles of
motorists who refuse to pay the parking fees to Jadewell131 and (c) using
yellow-colored tow trucks bearing the name “City of Baguio”.132 Jadewell’s
petition also seeks to nullify Executive Order No. 005-2004.
On 16 November 2004, Jadewell filed a Supplemental Petition. The

act complained of this time was the issuance of Executive Order No. 005-
2004-A which is a mere rehash of Executive Order No. 005-2004.133 On 25
January 2005, Jadewell filed a Second Supplemental Petition in connection
with Mayor Yaranon’s issuance of Administrative Order No. 622, Series of
2004. The said administrative order declared that Jadewell exceeded its area
of operations for the administration of on-street parking and it required to
show lawful cause why its business permit should not be revoked.
Like in the earlier contempt petitions, Jadewell alleges that these

issuances by Mayor Yaranon are contumacious because they were made
while the main petition, G.R. No. 160025 questioning the rescission of the
MOA by the Sanggunian, is still pending resolution with this Court.
d.G.R. No. 172216 – On 27 April 2006, Jadewell filed a petition

for contempt against Judge Fernando Vil Pamintuan, Presiding Judge of
RTC-Branch 3 of Baguio City, in relation to Civil Case No. 6089-R pending
before his sala.134 In the said civil case, Judge Pamintuan issued an Order
directing Jadewell to desist from the collection of parking fees, from towing
and impounding vehicles on the streets of Baguio City and to hold in
abeyance the implementation of City Ordinance 003-2000 and the MOA.
The validity of the Order of Judge Pamintuan is the subject of a Petition for
Certiorari, Prohibition, and Mandamus instituted by Jadewell in G.R. No.
172215.
The main issue to be resolved in this case is whether Judge Pamintuan

should be cited for indirect contempt by this Court for issuing the assailed
Orders.
e. G.R. No. 173043 – On 29 June 2006, Jadewell filed yet another

contempt case against Mayor Yaranon. In addition to its prayer to cite him
for contempt, Jadewell also prays that Mayor Yaranon, as a lawyer, be
disbarred.135 Jadewell instituted this fifth contempt case after it received a
letter from Mayor Yaranon demanding that it stop its business operations in
Baguio City, at the same time directing the Sangguniang Panlungsod to
cancel Ordinance 003-2000.
130
Rollo (G.R. No. 165564), p. 6.
131 Id. at 7.
132 Id.
133 Id. at 20.
134
Rollo (G.R. No. 172216), p. 5.
135
Rollo, (G.R. No. 173043), pp. 3, 10.
The issue to be resolved in this case is whether Mayor Yaranon was
guilty of indirect contempt and professional misconduct for the above acts
pending resolution of G.R. Nos. 160025, 163052,164107, 165564 and
172215.136
f. G.R. No. 174879 - On 19 October 2006, Jadewell filed a

contempt case against the acting City Mayor of Baguio, Reinaldo A.
Bautista, Jr., and the members of the Sangguniang Panlungsod, including
City Legal Officer Melchor Carlos R. Rabanes, in connection with the
second act of rescission.137 Jadewell also asks that the respondents who are
lawyers, namely: Rocky Thomas A. Balisong, Edilberto B. Tenefrancia,
Faustino A. Olowan, Federico J. Mandapat, Perlita L. Chan-Rondez, and
Jose M. Molintas, be disbarred.
These acts, in Jadewell’s view, are contumacious in light of the

pending G.R. No. 160025 before this Court.
OUR RULINGS
1. On G.R. No. 160025
a. On the Treatment of
Jadewell’s Petition as one for
Permanent Injunction.
The CA sustained the position of the Sanggunian that certiorari could

not prosper because when the latter enacted Resolution 37, the Sanggunian
was exercising its legislative function and not its judicial or quasi-judicial
function. The writ of certiorari under Rule 65 requires: (a) that it is directed
against a tribunal, a board or an officer exercising judicial or quasi-judicial
functions; (b) that such tribunal, board, or officer has acted without or in
excess of jurisdiction or with grave abuse of discretion; and (c) that there is
no appeal nor any plain, speedy and adequate remedy in the ordinary course
of law.138
The CA nevertheless proceeded to treat the Petition as an original

action for injunction, ruling in this wise:
xxxx
Although in the trial court, Jadewell filed said petition for

Certiorari, Prohibition and Mandamus under Rule 65, it is essentially one
for Injunction under Rule 58. Said petition’s form and substance satisfied
136
Id. at 8.
137
Rollo (G.R. No. 174879), p. 3.
138 CA rollo, p. 147.
all the requirements of a civil action for Injunction, which is the proper
remedy under the attendant circumstances.
The rules of procedure ought not to be applied in a very rigid

technical sense, rules of procedure are used only to help secure, not
override substantial justice. If a technical and rigid enforcement of the
rules is made, their aim would be defeated.
Considering the clear and patent denial of due process committed

by the Sanggunian in precipitately rescinding the MOA and in the interest
of substantial justice, WE deem it more prudent to treat the petition filed
below as an action for Injunction under Rule 58, which is well within the
jurisdiction of the trial court. Consequently, the present appeal shall be
considered as an appeal from the permanent injunction ordered by the trial
court, which is properly appealable to this Court, as held in Casilan vs.
Ybaňez.139
xxxx
We sustain the ruling of the appellate court treating Jadewell’s

original action for certiorari as one for injunction based on the allegations in
the latter’s pleadings.
In Ramon Jimenez, Jr. v. Juan Jose Jordana,140 the issue to be

resolved was whether the nature of the action was one for specific
performance or for recovery of real property. In determining that the case
was one for the recovery of real property, the Court characterized the suit on
the basis of the allegations in the Complaint. We restated the rule that the
nature of an action is determined by the material averments in the complaint
and the character of the relief sought. In the recent case of Reyes v. Alsons
Development and Investment Corporation,141 we likewise ruled that the
nature of an action is determined by the allegations in the pleadings.
In Lee, Jr. v. Court of Appeals,142 the controversy to be resolved was

whether the appeal filed by the petitioner was one under Rule 65 or Rule 42.
The determination of the issue was crucial, because the appellate court had
dismissed the appeal of the petitioner, saying that the wrong mode of appeal
had been used. The CA had ruled that petitioner should have filed a
certiorari petition under Rule 65 – instead of a petition under Rule 42 – to
appeal the assailed decision rendered by the RTC in the exercise of its
appellate jurisdiction.
We held:
Our perusal of the petition filed before the Court of Appeals
clearly shows that it is a petition for review under Rule 42, and not a
139 Id. at 148.

140
486 Phil. 452 (2004).
141
G.R. No. 153936, 2 March 2007, 517 SCRA 244.
142
577 Phil. 400, 407-408 (2008).
special civil action for certiorari under Rule 65. We note that in the Court
of Appeals’ petition, under the heading “Nature of the Petition,” petitioner
stated that it was a “petition for review on certiorari to set aside,
invalidate and reverse the Decision dated December 14, 2001 of public
respondent Judge Victor T. Llamas, Jr.” Also, the reversal sought was
premised on the ground that the decision was issued in gross error. The
statement under the heading “Nature of the Petition” that the trial
courts’ decisions were issued with grave abuse of discretion
amounting to lack of jurisdiction, and even the caption impleading the
lower courts, would not automatically bring the petition within the
coverage of Rule 65. It is hornbook doctrine that it is not the caption
of the pleading but the allegations therein that determine the nature
of the action. (Emphasis supplied)
In the original action filed by Jadewell before the RTC of Baguio

City, although the action was clearly denominated as a Petition for
Certiorari, Prohibition and Mandamus against the Sangguniang Panlungsod,
the allegations actually supported an action for injunction under Rule 58 of
the Revised Rules on Civil Procedure. As can be gleaned from its allegations
and especially in its prayers, Jadewell filed the case with the trial court with
the ultimate end of restraining the implementation of Resolution No. 037,
Series of 2002.
We agree with the CA when it ruled that Jadewell sought permanent

injunction aside from the auxiliary remedy of preliminary injunction, thus:
An action for injunction is a recognized remedy in this jurisdiction. It

is a suit for the purpose of enjoining the defendant, perpetually or for a
particular time, from committing or continuing to commit a specific act, or
compelling the defendant to continue performing a particular act. It has an
independent existence. The action for injunction is distinct from the
ancillary remedy of preliminary injunction, which cannot exist except only
as part or an incident of an independent action or proceeding.143 xxxx...
In Garcia v. Adeva,144 this Court had the opportunity to clarify that

while injunction can be a provisional remedy, it can also be a main case. The
Court had to make this preliminary distinction in order to find out whether
the SEC had the jurisdiction to prevent, on a permanent basis, the
commission of certain acts by the respondents. Thus, the necessity to make
the distinction between injunction as a provisional remedy and injunction as
a main case. It found guidance from Garayblas v. Atienza, Jr.,145 and
quoting from the latter:
Injunction is a judicial writ, process or proceeding whereby a

party is ordered to do or refrain from doing a certain act. It may be the
main action or merely a provisional remedy for and as an incident in the
143
CA rollo, p. 148.
144
550 Phil. 663, 672-673 (2007).
145
525 Phil. 291, 306-307 (2006).
main action. The Court has distinguished the main action for injunction
from the provisional or ancillary remedy of preliminary injunction, thus:
The main action for injunction is distinct from the

provisional or ancillary remedy of preliminary injunction
which cannot exist except only as part or an incident of an
independent action or proceeding. As a matter of course, in
an action for injunction, the auxiliary remedy of
preliminary injunction, whether prohibitory or mandatory,
may issue. Under the law, the main action for injunction
seeks a judgment embodying a final injunction which is
distinct from, and should not be confused with, the
provisional remedy of preliminary injunction, the sole
object of which is to preserve the status quo until the merits
can be heard. A preliminary injunction is granted at any
stage of an action or proceeding prior to the judgment or
final order. It persists until it is dissolved or until the
termination of the action without the court issuing a final
injunction.
We, therefore, rule that the CA did not commit any error in
treating Jadewell’s Petition for Certiorari as an original action for
injunction.
b. On the denial of due process.
The second issue in this Petition is the correctness of the CA’s ruling
that Jadewell was deprived of due process when the Sangguniang
Panlungsod rescinded the MOA. The findings of the CA are as follows:
In the instant case, evidence on record does not show that before the
Sanggunian passed the disputed Resolution it gave Jadewell an
opportunity to present its side. Neither did the Sanggunian convene an
investigatory body to inquire into Jadewell’s alleged violations nor at least
invite Jadewell to a conference to discuss the alleged violations, if only to
give Jadewell the chance to refute any evidence gathered by it against the
latter. As it is, the Sanggunian arrogated upon itself the role of a
prosecutor, judge and executioner in rescinding the MOA, all in clear
violation of Jadewell’s constitutionally embedded right to due process.146
x x x.
Both courts held that Jadewell was denied due process. When the
denial of due process argument is raised, it is directed primarily against the
exercise of governmental authority that “deprives life, liberty and property”
without observance what is, in the circumstances, the applicable standards of
“due process.” It is not an argument that is relevant in situations of
contractual breach between two purely private entities, nor is it available
against the government when the latter is not discharging a governmental
function, but merely pursuing a purely commercial activity in a proprietary
capacity. In order to consider the due process argument, this Court must first
146 CA rollo, pp. 149-150.
determine whether the MOA was entered into by the City of Baguio in a
governmental capacity, or in a purely proprietary capacity.
The regulation of on-street and off-street parking is a governmental

function that can be exercised by local governments. It is important to
understand the objective of the Baguio City Government in: (1) privatizing
the administration of on-street and off-street parking; and (2) its execution of
a MOA with Jadewell. This can be gleaned from the Explanatory Note and
other provisions of the agreement, to wit:
The City of Baguio has earned the reputation of the CLEANEST

AND GREENEST HIGHLY URBANIZED CITY for the previous years.
This has become possible due to the collective effort of both the Citizens
of Baguio and the City Government. However, the increase in population,
volume of vehicles and the absence of a regulatory measure to address this
concern gradually tainted what used to be a reputation we were proud of.
The ever increasing problems, specifically those relevant to the

Traffic situation is at this point the biggest contributor to environmental
degradation. Other Salient points we must consider relevant to this matter
are the problems on OBSTRUCTION AND DOUBLE PARKING which
are very rampant. We further add to these the problems on
DISORGANIZED PARKING, LACK OF DEPUTIZED AGENTS to
monitor, supervise and enforce traffic rules and regulations.
At this point in time, we feel the immediate need of focusing on

these problems. There is an urgent need to adopt measures that would
alleviate these matters. This we recommend that PARKING SPACES
should be REGULATED in such a manner that it would bring advantage
both to the City Government and the Citizens of Baguio. We further
propose the collection of REGULATORY FEES that would be used in
maintaining our roads and to hire people that would de deputized to help
ease the problems as stated above.
Finally, we believe that our roads are beyond the Commerce of

Man. To convert our roads into PAY PARKING SPACES, would be
violative of this principle. However to REGULATE its use and its
eventual effect would redound to the GENERAL WELFARE will be an
appreciated gesture to help preserve our image as the CLEANEST AND
GREENEST HIGHLY URBANIZED CITY.
xxxx
SECTION 4. Parking spaces. A parking place may be divided

into parking spaces and for the purposes of this Ordinance, each space or
for a number of spaces as determined by the private parking operator in
consultation with the concerned Official of the City of Baguio.
xxxx
SECTION 5. Prohibitions against parking outside the parking spaces.

No spaces shall park any motor vehicle on the sidewalk or cause or permit
any motor vehicle to wait to any road or length of road on which in any
place in which or adjacent to or in close proximity to which there is a
parking place.
xxxx
SECTION 7. Payment of Prescribed Charges. (1) No person

shall park any motor vehicle in a parking place or parking space during the
times specified in this Ordinance without paying the prescribed charge for
the required parking period; (2) The prescribed charge payable in respect
to the parking of a motor vehicle in a parking space shall be paid by the
insertion into the parking meter provided for that parking space a
coin/coins of Philippine Currency or by using cards in order to obtain the
payment ticket to evidence the payment of the prescribed charge; (3) The
payment ticket shall be displayed at a conspicuous part of a motor vehicle
in a parking place or parking space; (4) The payment ticket shall be valid
to be used on any parking space within the authorized period indicated in
the payment ticket.
xxxx
SECTION 22. Rules. The Memorandum of Agreement (MOA) to

be entered into by the City Mayor shall be governed by this Ordinance.
From the above, the following are clear: (1) that the City of Baguio
decided on the privatization of the administration of parking for
environmental and peace and safety reasons, both of which are within its
powers under Section 458(A)(5)(v) and (vi) of the Local Government Code;
and (2) that the terms of agreement between the City of Baguio and Jadewell
involve the delegation of governmental functions in terms of regulating the
designation and use of parking spaces as well as the collection of fees for
such use. These are indicators that any privatization contract pursuant to the
above Resolution takes the essential character of a franchise because what is
being privatized is a government-monopolized function.
It would thus be relevant to ask if there is a provision in the applicable

laws or the franchise (MOA) that grants the City of Baguio the right to
revoke the latter either at will, or upon the satisfaction of certain conditions,
such that ordinary due process protection can be considered to have been
waived by the franchisee. We must caution that when we refer to revocation
at will here, we are referring to the revocation of resolutory, not suspensive,
obligations.147
147 When a contract is subject to a suspensive condition, its birth or effectivity can take place
only if and when the event which constitutes the condition happens or is fulfilled. If the suspensive
condition does not take place, the parties would stand as if the conditional obligation has never existed.
(Insular Life Assurance Co., Ltd. v. Young, 424 Phil. 675, 694 (2002). On the other hand, a resolutory
condition is one that constitutes a future and uncertain event upon the happening or fulfillment of which
rights which are already acquired by virtue of the obligation are extinguished or lost. (Multinational
Village v. Ara Security, 484 Phil. 74 (2004).
We have looked closely at Resolution No. 003-2000 and the MOA
and have additionally reflected on the applicable provision under the Civil
Code. We have come to the conclusion that:
(a) There is only one provision that allows for unilateral revocation of the
MOA, which can be found in Section 9 thereof:
9. Minimum Guaranty – The FIRST PARTY guaranties

(sic) a minimum period of five (5) years against rescission;
provided that after such period, the parties may agree to
increase to a reasonable rate the parking fees and the share
of the city from the parking fees collected as provided for
in the guidelines, (Annex “B”);
(b) This Section 9 requires that five years must have lapsed – presumably
from the date of execution of the MOA – before the unilateral right to
revoke the MOA can be exercised;
(c) Therefore, before the five year period has lapsed, the right to revoke
the MOA arises only under Article 1191 of the Civil Code, which
reads:
Art. 1191. The power to rescind obligations is implied in

reciprocal ones, in case one of the obligors should not comply with
what is incumbent upon him.
The injured party may choose between the fulfillment

and the rescission of the obligation, with the payment of
damages in either case. He may also seek rescission, even after
he has chosen fulfillment, if the latter should become impossible.
The court shall decree the rescission claimed, unless there

be just cause authorizing the fixing of a period.
This is understood to be without prejudice to the rights of

third persons who have acquired the thing, in accordance with
Articles 1385 and 1388 and the Mortgage Law.
From the above, it appears that in order to effect a valid revocation of

the MOA prior to the lapse of the 5-year period provided for in Section 9,
the City of Baguio had to approach the problem from one or both of two
perspectives: one, negotiate the termination of the MOA with Jadewell, or
two, exercise its option under Article 1191 of the Civil Code.
The first option, a negotiated pretermination of the contract, is an

inherent right of every party in a contract. This can be inferred from the
freedom of the parties to contract and modify their previous covenants
provided it would not be contrary to law, morals, good customs, public order
or public policy.148 Despite the provision on the minimum warranty against
rescission stipulated in the MOA, the parties were not constrained to
mutually modify such restriction. The Sanggunian could have proposed to
Jadewell the possibility of lifting the warranty against rescission subject to
the condition that the latter will comply with its obligations under the MOA.
This scenario could have impressed upon Jadewell that its contractual
relations with the city government of Baguio were less than ideal. The
suggested approach for the Sanggunian could have been legally sound and
practical. Obviously, this was not done in this case; thus, Jadewell’s
Complaint before the RTC of Baguio City.
The second option is the exercise of the unilateral right to rescind a

bilateral contract on the part of a party who believes that it has been injured
by a breach substantial enough to warrant revocation. Where one party
allegedly failed to comply with his obligations under a contract, the injured
party may rescind the obligation if the other does not perform or is not ready
and willing to perform.149 We will examine the acts of Baguio City in
relation to what is allowed under Article 1191.
Rescission under Article 1191 takes place through either of two

modes: (1) through an extrajudicial declaration of rescission; or (2) upon the
grant of a judicial decree of rescission.
Extrajudicial declaration of rescission is recognized as a power which

does not require judicial intervention.150 If the rescission is not opposed,
extrajudicial declaration of rescission produces legal effect151 such that the
injured party is already relieved from performing the undertaking.152
However, the power of declaring extrajudicial rescission conferred

upon the injured party is regulated by the Civil Code. If the extrajudicial
rescission is impugned by the other party, it shall be subject to a judicial
determination153 where court action must be taken, and the function of the
court is to declare the rescission as having been properly or improperly
made, or to give a period within which the debtor must perform the
obligation alleged to be breached.154 A unilateral cancellation of a contract
may be questioned in courts by the affected party to determine whether or
not cancellation is warranted.155 Thus, in an extrajudicial decree of
rescission, revocation cannot be completely exercised solely on a party’s
148 Brent School v. Zamora, G.R. No. L-48494, 5 February 1990, 181 SCRA 702.
149 ARTURO M. TOLENTINO, CIVIL CODE OF THE PHILIPPINES.Vol. IV 176 (1997).
150 Id. at 177, citing Angeles v. Calasanz, 136 SCRA 323.
151 Id. at 178.
152 Id. at 177.
153 Id. at 178.
154 Id., citing Perez Gonzales & Alguer; 2-I Enneccerus, Kipp & Wolf 196.
155
ARTURO M. TOLENTINO, CIVIL CODE OF THE PHILIPPINES.Vol. IV 179 (1997), citing Angeles v. Calasanz,
136 SCRA 323.
own judgment that the other has committed a breach of the obligation156 but
always subject to the right of the other party to judicially impugn such
decision.
It is important to contextualize that the agreement entered into by the

City of Baguio with Jadewell is the embodiment of a grant of franchise
imbued with public interest and is not merely an agreement between two
private parties.
It is our view that the first act of rescission by the City of Baguio may
be valid even if there is a stipulation against it within the first five years of
the MOA’s existence. Article 1191 of the New Civil Code provides a party
the right to rescind the agreement and clearly overrides any stipulation to the
contrary. However, the grounds that would serve as basis to the application
of the said article must be clearly established.
In the exercise of this option under Article 1191, was it necessary for
the City of Baguio to provide Jadewell an opportunity to air its side on the
matter before the former implemented the rescission of the MOA? In the
instant case, was Jadewell deprived of procedural due process?
We answer in the negative. We disagree with the rulings of the RTC

and the CA that Jadewell was deprived of due process. In Taxicab
Operators of Metro Manila v. The Board of Transportation,157 we
confronted the issue of whether the petitioners were denied procedural due
process when the respondent Board of Transportation issued a circular
ordering the phasing out of old vehicles to be used as taxicabs. In the said
case, the phase-out was embodied in a circular that was promulgated without
holding a public hearing or at least requiring those affected to submit their
position papers on the policy to be implemented. We held for the respondent
Board, and ruled in this wise:
Dispensing with a public hearing prior to the issuance of the

Circulars is neither violative of procedural due process. As held in
Central Bank vs. Hon. Cloribel and Banco Filipino, 44 SCRA 307 (1972):
Previous notice and hearing as elements of due

process, are constitutionally required for the protection of
life or vested property rights, as well as of liberty, when its
limitation or loss takes place in consequence of a judicial or
quasi-judicial proceeding, generally dependent upon a past
act or event which has to be established or ascertained. It is
not essential to the validity of general rules or regulations
156
ARTURO M. TOLENTINO, CIVIL CODE OF THE PHILIPPINES.Vol. IV 177 (1997), citing Rubio de Larena v.
Villanueva, 53 Phil. 923 (1924); Guevara v. Pascual, 12 Phil. 311 (1908); Escueta v. Pando, 76 Phil. 256
(1946).
157
202 Phil. 925, 934 (1982).
promulgated to govern future conduct of a class or persons
or enterprises, unless the law provides otherwise.
In the instant case, the assailed act by the Sanggunian Panlungsod in

rescinding the MOA – be it first or second act of rescission – was clearly in
the exercise of its legislative or administrative functions and was not an
exercise of a judicial or quasi-judicial function. The Sanggunian Panlungsod
does not possess any judicial or quasi-judicial functions. The preamble of
the MOA lends support to this view. Evidently, the foremost reason why the
agreement was entered into by the parties was to provide order, given
Baguio City’s parking problems in identified areas, as well as to generate
income.
The objectives of the Sanggunian Panlungsod, as well as its intention

to rescind the MOA; because it deems to no longer serve the interest of the
City of Baguio, are clearly an exercise of its legislative or administrative
function. However, it is another matter as to whether the City of Baguio was
able to clearly establish the grounds as basis for the exercise of its right to
rescind.
c. On the allegation of Jadewell’s

substantial breach of the MOA.
The Baguio City government has repeatedly mentioned that Jadewell

had so far installed only 14 parking meters, with only 12 functioning. The
COA-CAR Report dated 13 July 2003 enumerated 12 findings,158 a majority
of which indicates that Jadewell was remiss in the fulfilment of its
obligations under the MOA. While Finding Nos. (1), (2), (3), (4), (5), (8)
and (12) of the COA-CAR Report state that Jadewell collected parking fees,
Jadewell failed to properly remit the same. Finding No. (11) of the COA-
CAR Report states that Jadewell failed to have its parking attendants
deputized,159 a condition under the MOA that is also important to the overall
objective of the endeavor.
The MOA does not specifically provide for the exact number of
parking meters to be installed by Jadewell pursuant to the parties’ objective
in regulating parking in the city. Nevertheless, 100 parking spaces were
allotted as mentioned in Annex A of the MOA.160 The agreement also
obligates Jadewell to have its parking attendants deputized by the DOTC-
LTO so that they shall have the authority to enforce traffic rules and
158 Supra note 46.

159 Supra note 59.
160 MOA, Section 6 states:
Parking Fees and Exclusivity – (a) The FIRST PARTY subject to existing ordinances and under
its supervision do hereby authorize the SECOND PARTY the function and responsibility to collect parking
fees, towing fees, impounding fees, fines and penalties as provided for in the ordinance over parking spaces
listed in Annex “A” hereof during the term and existence of this agreement, specifically provided for in the
following Sections of Ordinance No. 003, Series of 2000, x x x.
regulations in the regulated areas.161 To the Court’s mind, these are two of
the most important obligations that Jadewell had to comply with,
considering the nature and objective of the agreement it had entered into.
Despite the enumeration of the above-mentioned faults of Jadewell,

we do not make a categorical finding that there was substantial breach
committed by Jadewell to justify a unilateral rescission of the MOA. We
find, however, that the RTC had not properly received evidence that would
allow it to determine the extent of the claimed violations of the MOA. Had
these violations by Jadewell been proven in a proper hearing, the finding of
a substantial breach of the MOA would have been a distinct probability.
Unfortunately, neither the RTC nor the CA provided a clear basis for
their rulings on the extent of the breach of the MOA by Jadewell. Save from
reiterating the Sanggunian’s litany of violations said to be committed by
Jadewell, there was no testimony on record to prove such facts and no
indication as to whether the RTC or CA dismissed them or took them at face
value.
Whatever the extent of breach of contract that Jadewell may have

committed – and the enumeration of Jadewell’s alleged faults in Resolution
37 is quite extensive – the City of Baguio was still duty-bound to establish
the alleged breach.
Matters became complicated when the RTC and the CA lumped the
issues on the due process violation of Baguio City with Jadewell’s alleged
substantial breaches under the MOA, instead of making a clear finding on
the existence and extent of such breach. The facts and legal issues were thus
muddled.
We find fault in the lower and appellate court’s lapse in examining the
issue on Jadewell’s alleged substantial breach. Evidence-taking had to be
undertaken by these courts before they could arrive at a judicial conclusion
on the presence of substantial breach.
We thus DENY the Petition of the Sanggunian Panlungsod in G.R.

No. 160025 and AFFIRM the questioned CA Decision. However, we reject
the ruling made by the appellate court that the violations of Jadewell under
the MOA were not substantial. We hold that there is no sufficient evidence
on record to make such determination.
While Jadewell prays for damages against the public respondent, and
while ordinarily we could grant the same, the context of this case prevents us
from giving any form of recompense to Jadewell even if the rescission of the
MOA did not follow the required legal procedure. This is because it would
161 Section 4 (b) first paragraph of the MOA.

be appalling to grant Jadewell any award of damages, considering (1) it
installed only 14 out of the apparently 100 contemplated parking meters; (2)
its employees, private citizens who did not possess any authority from the
LTO, were manually collecting parking fees from the public, and (3) it did
not, apparently properly remit any significant amount of money to the City
of Baguio. These three facts are uncontested, these omissions are offensive
to the concept of public service that the residents of Baguio were promised
through Jadewell. From its ambiguous responses extant in the records, it is
clear that Jadewell does not appear to be an investor who has lost in its
investments in the Baguio City project. Thus, we do not award any damages
to Jadewell.
2. On G.R. Nos. 163052, 164107,

165564, 172216, 173043 and 174879
(The Contempt
Petitions)
Section 3 of Rule 71 of the Revised Rules of Civil Procedure

enumerates the acts constituting indirect contempt, thus:
(a) Misbehavior of an officer of a court in the performance of his official

duties or in his official transactions;
(b) Disobedience of or resistance to a lawful writ, process, order, or

judgment of a court, including the act of a person who, after being
dispossessed or ejected from any real property by the judgment or
process of any court of competent jurisdiction, enters or attempts or
induces another to enter into or upon such real property, for the
purpose of executing acts of ownership or possession, or in any
manner disturbs the possession given to the person adjudged to be
entitled thereto;
(c) Any abuse of or any unlawful interference with the processes or

proceedings of a court not constituting direct contempt under Section 1
of this Rule;
(d) Any improper conduct tending, directly or indirectly, to impede,

obstruct, or degrade the administration of justice;
(e) Assuming to be an attorney or an officer of a court, and acting as such

without authority;
(f) Failure to obey a subpoena duly served;
(g) The rescue, or attempted rescue, of a person or property in the custody

of an officer by virtue of an order or process of a court held by him.
But nothing in this section shall be so construed as to prevent the court

from issuing process to bring the respondent into court, or from holding
him in custody pending such proceedings.
The rule alerts us to three possible situations, wherein, in the context
of the facts of these petitions, contumacious behaviour could have been
committed by public respondents. First, disobedience or resistance to a
lawful order of this Court under paragraph (b). Second, unlawful
interference with the proceedings of this Court under paragraph (c). Third,
improper conduct tending, directly or indirectly, to impeded, obstruct, or
degrade the administration of justice by this Court under paragraph (d).
Jadewell, in G.R. Nos. 163052, 164107, 165564, 172216, 173043, and

174879, bases its charges of indirect contempt against public respondents on
a claim that any action that tends to stop the implementation of the MOA is
contumacious. Such actions include desistance orders to desist against
Jadewell itself, the second act of unilateral rescission of the MOA; orders to
other public officers to prevent Jadewell from exercising its authority under
the MOA; and the official encouragement for motorists to resist attempts of
Jadewell to collect parking fees or clamp/tow vehicles that do not observe
the parking regulations.
We find scant jurisprudence to guide us on this matter. The closest

situation is that presented in Southern Broadcasting Network v. Davao Light
and Power,162 penned by Justice Felix Makasiar. In that case, petitioner’s
representative, Carmen Pacquing, wrote a letter to President Marcos asking
for his intervention so that her Motion for Reconsideration (MR) of the
resolution of this Court denying her Petition could be favorably granted.
Respondent Davao Light asked that petitioner Pacquing be cited for
contempt, arguing that her act in writing to the President asking him to
intervene in the case showed disrespect to and disregard for the authority of
this Court as the final arbiter of all cases. We found petitioner Pacquing
guilty of contempt, thus:
x x x. WE hold that such actuation of herein petitioner’s

representative only bespeaks more of her contumacious attempt to trifle
with the orderly administration of justice because if she know that this
Court will ultimately decide the case “regardless of the President’s
intervention,” then she should have desisted from writing to the President.
In the light of the foregoing, there is no doubt that Mrs. Pacquing

committed an “improper conduct tending, directly or indirectly, to impede,
obstruct, or degrade the administration of justice” (Section 3, par. [d] Rule
71, Rules of Court) and impair the respect due to the courts of justice in
general, and the Supreme Court, in particular.
In the above case, respondent Carmen Pacquing was clearly asking

the President to commit an improper act – to influence the Supreme Court –
that obstructs the orderly administration of justice, as the Court is
constitutionally required to act independently free from the promptings of
162
187 Phil. 496, 502 (1980).
the President. Pacquing clearly violated both Sections (c) and (d) of Section
3, Rule 71.
No such similar situation occurred here. Public respondents never

asked anyone to employ pressure or influence on this Court for the former’s
benefit.
Instead, the acts that have been allegedly committed by public

respondents are acts done pursuant to their belief that: (a) the MOA has been
validly voided, and more importantly, (b) that Jadewell’s personnel do not
have the legal authority to perform the governmental function of
administering the regulation of on-street and off-street parking, of towing or
clamping vehicles that violate such regulation, and of collecting parking fees
from motorists.
It is important to note that the Court never gave a mandatory

injunction that is couched in a way that requires public respondents to fully
comply with the terms of the MOA. The writ of preliminary mandatory
injunction (WPMI) issued on 9 February 2005 is directed to Mayor Yaranon
only, and it directs him to perform only one specific act: to reopen, and
maintain open, the street and premises then being occupied and operated by
Jadewell.
Mayor Yaranon did not immediately comply with this WPMI. Thus,
this Court fined him ₱10,000 on 20 April 2005, and ordered the NBI to
arrest him if he further failed to comply with the WPMI. Subsequently,
Mayor Yaranon paid the fine, and there is nothing on record to show that he
has, since April of 2005, further defied this Court on that score.
The Court did not issue a WPMI specifically ordering the parties to
observe the terms of the MOA. Thus, public respondents were not expressly
prohibited to act on their beliefs regarding the validity or invalidity of the
MOA, or, the authority or lack of authority of Jadewell personnel to perform
governmental functions in the streets of Baguio.
This is an important result, because to hold otherwise is to effectively

grant one of the parties a mandatory injunction even without an express
resolution to this effect from the Court. Without an express order, the
pendency of a suit before the Supreme Court is not a prima facie entitlement
of provisional relief to either party.
Public respondents therefore were, at liberty to question and inform

the public of their belief regarding the lack of authority of Jadewell and its
personnel to regulate public parking in Baguio. They were certainly free to
formally write Jadewell on their beliefs and pass the corresponding
resolutions to this effect. The mayor was also not under legal compulsion to
renew Jadewell’s business permit in view of his opinion that Jadewell was
exceeding its allowable area of operation, which Jadewell was not able to
fully disprove. This is especially true for two important reasons: (1) there is
an uncontested cease and desist order that was issued by the DOTC-CAR on
13 March 2002 which Jadewell defied well into 2005, and (2) public
respondents are city officials of Baguio who have the legal duty to ensure
the laws are being followed, including laws that define who may enforce
regulations on public parking.
That Jadewell personnel do not have the legal authority to enforce

regulations on public parking is categorical from the Letter dated 1 February
2001 by the Regional Director of the DOTC-CAR denying the request of
Jadewell for the deputation of its personnel.163
We therefore do not find any of the public respondents who were then
officials of the City of Baguio, liable for indirect contempt, and thereby
dismiss G.R. Nos. 163052, 164107, 165564, 173043 and 174879. In G.R.
174879, we have already pronounced that the Sanggunian was within its full
right to perform the second act of rescission, and thus, it is even with more
reason, that its members and the City Legal Officer cannot be held in
contempt therefor. We deny the prayer in the petitions to disbar the
respondents therein who are lawyers.
We also do not find Judge Fernando Vil Pamintuan liable for

contempt in G.R. No. 172216.
Jadewell wants this Court to cite Judge Pamintuan for contempt for
issuing a writ of preliminary prohibitory injunction ordering Jadewell to stop
collecting parking fees; to refrain from supervising the parking in Baguio
City; as well as to hold in abeyance the implementation of the MOA and its
enabling ordinance.164
It was only on 5 June 2006 that this Court, in G.R. No. 172215, issued
a Temporary Restraining Order (TRO)165 directing the trial court to
discontinue the proceedings in Civil Case No. 6089-R. Upon receipt by
Judge Pamintuan of the TRO, he immediately ordered the cancellation of the
29 June 2006 hearing.166
We do not consider the promulgation of the assailed writ of

preliminary prohibitory injunction against Jadewell as a defiance of our writ
issued on 9 February 2005, considering, it was directed against Mayor
Yaranon only. We have held in Leonidas v. Supnet that “a party cannot be
held in indirect contempt for disobeying a court order which is not addressed
to him.”167 We note that Judge Pamintuan observed deference to the Orders
163
Rollo (G.R. No. 172215), p. 91.
164
Rollo (G.R. No. 172216), pp. 13-14.
165
Rollo (G.R. No. 172215), p. 549.
166
Rollo (G.R. No. 172216), p. 1030.
167
446 Phil. 53, 70 (2003), citing the case of Canas v. Castigador, 348 SCRA 425 (2000).
of this Court when he immediately suspended the proceedings in Civil Case
No. 6089-R upon receipt of the TRO.
G.R. No. 172215
In this Petition for certiorari, prohibition, and mandamus under Rule

65 of the Rules of Civil Procedure, Jadewell assails the Orders of RTC-
Branch 3 (Baguio City) denying its motion to dismiss and motion for
reconsideration in Civil Case No. 6089-R.
We deny the petition of Jadewell in this case.
In Manuel Camacho v. Atty. Jovito Coresis, Jr.,168 we described the

nature of special civil action for certiorari under Rule 65, as follows:
A special civil action for certiorari under Rule 65 of the Rules of

Court is an extraordinary remedy for the correction of errors of
jurisdiction. To invoke the Court’s power of judicial review under this
Rule, it must first be shown that respondent tribunal, board or officer
exercising judicial or quasi- judicial functions has indeed acted without or
in excess of its or his jurisdiction, and that there is no appeal, or any plain,
speedy and adequate remedy in the ordinary course of law. Conversely,
absent a showing of lack or excess of jurisdiction or grave abuse of
discretion amounting to lack or excess of jurisdiction, the acts of the
respondents may not be subjected to our review under Rule 65.
In Indiana Aerospace University v. Commission on Higher

Education,169 this Court ruled thus:
An order denying a motion to dismiss is interlocutory, and so the

proper remedy in such a case is to appeal after a decision has been
rendered. A writ of certiorari is not intended to correct every
controversial interlocutory ruling; it is resorted to only to correct a grave
abuse of discretion or a whimsical exercise of judgment equivalent to lack
of jurisdiction. Its function is limited to keeping an inferior court within
its jurisdiction and to relieve persons from arbitrary acts -- acts which
courts or judges have no power or authority in law to perform. It is
not designed to correct erroneous findings and conclusions made by the
court.
In East Asia Traders, Inc. v. Republic of the Philippines, et al.,170 we

decreed:
The petition for certiorari and prohibition filed by petitioner with

the Court of Appeals is not the proper remedy to assail the denial by the
RTC of the motion to dismiss. The Order of the RTC denying the
motion to dismiss is merely interlocutory. An interlocutory order does
not terminate nor finally dispose of the case, but leaves something to be
done by the court before the case is finally decided on the merits. It is
168
436 Phil. 449, 458 (2002).
169
408 Phil. 483, 501 (2001).
170
433 SCRA 716, 723-724.
always under the control of the court and may be modified or rescinded
upon sufficient grounds shown at any time before final judgment. This
proceeds from the court’s inherent power to control its process and orders
so as to make them conformable to law and justice. The only limitation is
that the judge cannot act with grave abuse of discretion, or that no
injustice results thereby.
East Asia Trader also reiterated our ruling in Indiana Aerospace.

Further, in Bonifacio Construction Management Corporation v. Hon. Perlas
Bernabe,171 we reiterated our rulings in East Asia Traders and Indiana
Aerospace. We had ruled in these earlier cases that an order of the trial
court denying a motion to dismiss is an interlocutory order, and to use a
writ of certiorari to assail it is improper.
The procedural policy in the cited cases was again referred to in

Bernas v. Sovereign Ventures, Inc.,172 highlighting the following:
Let it be stressed at this point the basic rule that when a motion to
dismiss is denied by the trial court, the remedy is not to file a petition
for certiorari, but to appeal after a decision has been rendered.
(Emphasis supplied)
G.R. No. 181488
The question of law raised by petitioner Yaranon in this Petition for

Review on Certiorari is whether the CA correctly dismissed his appeal
questioning the validity of his suspension from office as City Mayor, on the
ground that his suit had become moot and academic due to his non-re-
election to office. The CA cited Crespo v. Provincial Board of Nueva
Ecija173 as basis for the dismissal.
For his part, Mayor Yaranon contends that the appellate court should
have ruled on the validity of his suspension from office despite his failure to
get re-elected as City Mayor. He argues that he has the right to know
whether his suspension was valid or not and, in the event his suspension is
declared invalid, Mayor Yaranon believes he is entitled to the salaries and
benefits accruing during the period he was suspended.
We deny the Petition of Mayor Yaranon.
The appeal of Mayor Yaranon has been rendered moot and academic.
We hold that the resolution of the issue raised herein would serve no
practical purpose.
171
501 Phil. 79 (2005).
172
528 Phil. 584, 590 (2006).
173
243 Phil. 230 (1988).
In Miriam College v. Court of Appeals,174 we ruled that a case
becomes moot and academic when there is no more actual controversy
between the parties, or when no useful purpose can be served in passing
upon the merits. Further, courts will not determine a moot question in which
no practical relief can be granted.175
Mayor Yaranon has already served his suspension. We find no

practical value in remanding his case to the appellate court for the
determination of the factual basis and legal issues of his appeal pertaining to
the validity of his suspension as then City Mayor of Baguio City.
We have held in Nicart, Jr. v. Sandiganbayan (Third Division),176 that

an issue becomes moot when a petitioner is not entitled to substantial relief:
x x x [T]he propriety of the preventive suspension of petitioner

effected through the assailed Resolution of February 15, 2001 has become
a moot issue, it appearing that he has already served his suspension. An
issue becomes moot and academic when it ceases to present a
justifiable controversy so that a determination thereof would be of no
practical use and value. In such cases, there is no actual substantial
relief to which petitioner would be entitled to and which would be
negated by the dismissal of the petition.
We cannot sustain Mayor Yaranon’s argument that his appeal should

not have been dismissed because, in the event that the finding of the Office
of the President to suspend him is reversed, he is still entitled to the salaries
accruing during the period he was suspended. We take note of the cases
cited by Mayor Yaranon such as Crespo v. Provincial Board of Nueva
Ecija,177 Baquerfo v. Sanchez178 and Reyes v. Cristi,179 among others. These
cases involve substantial issues – such as denial of due process and
procedural irregularities – other than a mere claim for entitlement to salaries.
The factual background and the legal issues for resolution in the cases
mentioned are not similar to the case at bar.
In Triste v. Leyte State College Board of Trustees180 the Court

elucidated on the nature of the salary of a public official:
Mechem states that "(l)ike the requirement of an oath, the fact of

the payment of a salary and/or fees may aid in determining the nature of a
position, but it is not conclusive, for while a salary or fees are usually
annexed to the office, it is not necessarily so. As in the case of the oath,
the salary or fees are mere incidents and form no part of the office.
Where a salary or fees are annexed, the office is often said to be ‘coupled
174
401 Phil. 431 (2000).
175
Serag v. Court of Appeals, 510 Phil. 362 (2005).
176
527 Phil. 402, 407-408 (2006).
177
Supra note 169.
178
495 Phil. 10 (2005).
179
A.M. No. P-04-1801, 02 April 2004, 427 SCRA 8.
180
G.R. No. 78623, 17 December 1990, 192 SCRA 326, 338.
with an interest’; where neither is provided for it is a naked or honorary
office, and is supposed to be accepted merely for the public good."
(Emphasis supplied)
Given the circumstances of this case, we find that Mayor Yaranon’s

claim for unpaid salaries, in case of exoneration, does not constitute such
substantial relief that would justify the revival of his appeal. Even if we did
sustain his Petition, we nevertheless find that it has been mooted by our
resolution in the main petition.
WHEREFORE, we hereby rule as follows:
a.) In G.R. No. 160025, the Petition of the Sangguniang Panlungsod of

Baguio City is DENIED. The CA Decision dated 7 July 2003 in CA
G.R. SP No. 74756 is hereby AFFIRMED with modification. There
is not enough evidence on record to conclude that Jadewell’s
violations were sufficient to justify the unilateral cancellation of the
MOA by the Sangguniang Panlungsod of Baguio City; at the same
time, neither the RTC nor the CA provided a clear finding whether the
breach of the MOA by Jadewell was substantial. We affirm the CA as
to the rest of its dispositions in its assailed Decision. Nevertheless, no
award of damages is hereby made in favour of Jadewell and neither is
there any pronouncement as to costs.
b.) G.R. Nos. 163052, 164107, 165564, 172216, 173043 and 174879, the
Petitions of Jadewell to cite Mayor Braulio D. Yaranon, Mayor
Bernardo M. Vergara, Acting City Mayor Reinaldo A. Bautista, Vice
Mayor Betty Lourdes F. Tabanda, the members of the Sangguniang
Panlungsod of Baguio City namely: Elmer O. Datuin, Antonio R.
Tabora, Edilberto B. Tenefrancia, Federico J. Mandapat, Jr., Richard
A. Carino, Faustino A. Olowan, Rufino M. Panagan, Leonardo B.
Yangot, Jr., Rocky Thomas A. Balisong, Galo P. Weygan, Perlita L.
Chan-Rondez, Jose M. Molintas, and Judge Fernando Vil Pamintuan
for indirect contempt and to disbar Sangguniang Panlungsod members
Rocky Thomas A. Balisong, Edilberto B. Tenefrancia, Faustino A.
Olowan, Federico J. Mandapat, Perlita L. Chan-Rondez, Jose M.
Molintas, Melchor Carlos B. Rabanes and Mayor Braulio D. Yaranon
are all hereby DISMISSED for lack of merit. No pronouncement as to
costs.
c.) We DENY the Petition of Jadewell for lack of merit in G.R. No.
172215. We likewise DENY its prayer for the issuance of a temporary
restraining order and/or writ of preliminary injunction for being moot
and academic. No pronouncement as to costs.
d.) We DENY the Petition of Mayor Braulio D. Yaranon in G.R. No.

181488, for lack of merit and AFFIRM the CA Decision CA-G.R. SP
No. 96116. No pronouncement as to costs.
Decision 49 G.R Nos. 160025, 163052,164107, 165564,
172215,172216,173043, 174879& 181488
SO ORDERED.
MARIA LOURDES P. A. SERENO

Chief Justice, Chairperson
WE CONCUR:
tA .. : -: AI A- 1
rt Si¥A J bNARi)o DE CASTRO
Associate Justice
Associate Justice
CERTIFICATION
Pursuant to Section 13, Article VIII of the Constitution, I certify that

the conclusions in the above Decision had been reached in consultation
before the case was assigned to the writer of the opinion of the Court's
Division.
MARIA LOURDES P. A. SERENO

Chief Justice

Supreme Court: Republic of The Philippines

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Republic of the Philippines

SANGGUNIANG PANLUNGSOD NG G.R. No. 160025

JADEWELL PARKING SYSTEMS

JADEWELL PARKING SYSTEMS

MAYOR BERNARDO M. VERGARA,

JADEWELL PARKING SYSTEMS G. R. No. 164107

CITY MAYOR BRAULIO D.

JADEWELL PARKING SYSTEMS

CITY MAYOR BRAULIO D.

JUDGE FERNANDO VIL

JADEWELL PARKING SYSTEMS G. R. No. 172216

JUDGE FERNANDO VIL

JADEWELL PARKING SYSTEMS

CITY MAYOR BRAULIO D.

JADEWELL PARKING SYSTEMS

ACTING CITY MAYOR AND

Before this Court

The two principal parties executed a Memorandum of Agreement

There was a second act of rescission that the city officials of

These nine highly-voluminous cases, however, all boil down

(a) The validity or invalidity and legal efficacy of Saggunian’s two

(c) the liability of : (i) respondent city officials of Baguio, for

(d) the validity of the administrative suspension of one of the

THE ANTECEDENT FACTS

On 1 March 1999, Jadewell proposed the privatization3 of the

Respondent Sanggunian acted favorably on the proposal.5 On 31 May

On 16 July 1999, the City Mayor of Baguio wrote to Jadewell,

On 27 March 2000, respondent Sanggunian enacted City Ordinance

On 26 June 2000, the MOA was finally executed between Jadewell

On 17 July 2000, the Sanggunian confirmed the MOA through its

On 31 August 2000, the parties executed a supplemental MOA to

In September of 2000, Jadewell began to mobilize and take over the

On 20 December 2000, Jadewell wrote then Vice-Mayor Daniel T.

On 24 August 2001, Edgar Avila, et al., filed a Rule 65 Petition for

Ultimately, Jadewell was able to install no more than 14 parking

a. Failure to install parking meters for each parking space as specified

b. Failure to install a convenient and technologically advanced

d. Failure to post a performance bond in the amount of ₱1

The Sanggunian passed Resolution No. 395, Series of 2000, directing

On 15 March 2001, Jadewell wrote to the City Mayor in response to

In response to the letter of Jadewell, the City Treasurer demanded the

WHEREAS, it now appears from verified facts that:

1. contrary to its commitment to install a technologically based P &

2. contrary to its commitment to install a technologically based P &

3. contrary to its obligation to post a performance bond, Jadewell has

5. contrary to its promise that the City would derive substantial

6. contrary to its representations that the P & D System which it

WHEREAS, there has been no substantial improvement of the

WHEREAS, in its financial reports to the City showing substantial

NOW THEREFORE, on motion of Hon. Bautista, and Hon.

RESOLVED, as it is hereby resolved, to rescind the Memorandum

RESOLVED FURTHER, to direct the City Legal Officer to cause

RESOLVED FURTHERMORE, to inform all City officials and

On 1 March 2002, the then City Mayor of Baguio, Bernardo M.

Meanwhile, on 13 March 2002, the DOTC–Cordillera Autonomous

On 17 April 2002, the Sanggunian resolved through a Resolution of

NOW THEREFORE, the Sangguniang Panlungsod (City Council)

On 8 October 2002, the RTC Br. 61 promulgated its Decision40

Meanwhile, pending resolution of CA-G.R. SP No. 74756 before the

On 7 July 2003, the CA rendered a Decision42 in CA G.R. SP No.

In CA-G.R. SP No. 77341, the CA dismissed in a Decision45

On 13 July 2003, the COA-CAR promulgated the requested Report.47

1) The provisions of the MOA and its Supplement as regards the

3) The City Government did not strictly implement the collection

7) The Supplemental MOA was not confirmed by the City Council of

8) The coverage of the parking operations contained in Annex “A” of

9) The City Government failed to ensure proper compliance by

11) The provisions on deputization in Ordinance No. 003-2000 and the

12) The monthly minimum amount to be remitted to the City

On 1 July 2004, then Baguio City Mayor Braulio D. Yaranon issued

NOW, THEREFORE, the undersigned City Mayor, pursuant to his

On 8 July 2004, Mayor Yaranon issued a Memorandum64 to the City

Furthermore, on 15 July 2004, Jadewell filed an administrative case

On the following day, 16 July 2004, Jadewell filed a Supplemental

On 15 October 2004, Mayor Yaranon issued Executive Order No.