G.R. No. L-28780 February 18, 1970
ROSALINDA E. MERIS, assisted by her husband JOSE C. MERIS, petitioners-appellants, vs. DOMINGO CUESTA, THE HONORABLE EXECUTIVE SECRETARY, THE HONORABLE SECRETARY OF AGRICULTURE AND NATURAL RESOURCES, THE DIRECTOR OF LANDS and THE DISTRICT LAND OFFICER OF BAGUIO CITY, respondents-appellees.

FACTS

Petitioners Rosalinda E. Meris and her husband filed Townsite Sales Application No. V-1603 to purchase a parcel of public land in Baguio City. The Director of Lands published a notice for the sale of the land via oral bidding on September 6, 1962. The notice required bidders to deposit at least ten percent (10%) of their bid before the commencement of the bidding. Only the petitioners and private respondent Domingo Cuesta participated through representatives. Cuesta was declared the highest bidder at P10.00 per square meter against petitioners’ final bid of P9.05. Both parties subsequently filled out bidding forms and made cash deposits equivalent to 10% of their final bids. Petitioners sought the annulment of the bidding from the Director of Lands, arguing irregularities: the bidders did not deposit 10% of their initial bids before the start, and the bidding was not held in an open place. The Director of Lands annulled the bidding on October 23, 1962, due to the absence of the required pre-bidding deposit. Cuesta appealed to the Secretary of Agriculture and Natural Resources, who reversed the Director’s order and upheld the bidding and award to Cuesta. The Executive Secretary, acting for the President, affirmed this decision. Petitioners then filed an action for certiorari and prohibition in the Court of First Instance of Baguio, which dismissed their petition, prompting this appeal.

ISSUE

Whether the Secretary of Agriculture and Natural Resources and the Executive Secretary committed a grave abuse of discretion in setting aside the order of the Director of Lands and upholding the validity of the bidding and award to respondent Cuesta, despite alleged non-compliance with the requirement for a pre-bidding deposit and the Director’s reserved right to reject bids.

RULING

The Supreme Court affirmed the decision of the Court of First Instance, ruling that there was no grave abuse of discretion. On the first issue, the requirement for a pre-bidding deposit was substantially complied with when, before the bidding commenced, both bidders placed money on the table (petitioners P565.00 and Cuesta P2,000.00, the latter far exceeding the required deposit). Citing Panlilio v. David, the Court held such provisions are directory, not mandatory, and serve to prevent frivolous bids. The public officers reasonably considered the requirement met. Furthermore, petitioners were deemed to have waived the requirement and were estopped from invoking it because they acquiesced in the procedure, participated actively in the bidding, and later submitted the required forms and deposit for their final bid. On the second issue, while the Director of Lands reserved the right to reject bids, his decisions are subject to the control and review of the Secretary of Agriculture and Natural Resources, who has the power to affirm, modify, or reverse them. The Court also noted the Director’s annulment order was issued without giving Cuesta a hearing, violating due process. Thus, the appealed decision was affirmed.