G.R. No. L-37187, L-37248, L-37249. August 3, 1976.
ASIATIC INTEGRATED CORPORATION, petitioner, vs. HON. FEDERICO ALIKPALA, etc., et al., respondents. THE CITY OF MANILA, et al., petitioners, vs. HON. FEDERICO ALIKPALA, etc., et al., respondents.

FACTS

The consolidated cases originated from a contract dated December 28, 1972, wherein the City of Manila, through its Mayor, granted Asiatic Integrated Corporation the management and operation of all thirty-five city public markets and talipapas for ten years. This was later amended on February 13, 1974, to extend the term to twenty-five years. The contract was challenged, leading the Court of First Instance of Manila, Branch XXII, presided by Judge Federico Alikpala, to declare it null and void in a decision dated July 13, 1973. The trial court ruled that the City Mayor lacked the statutory authority under the Manila Charter (R.A. 409) and existing ordinances to enter into such a contract, as the exclusive power to establish and maintain public markets resided in the Municipal Board.
The City of Manila and Asiatic appealed directly to the Supreme Court. In a majority decision dated September 15, 1975, the Supreme Court reversed the trial court and upheld the validity of the contracts. The majority opinion considered new facts and developments that occurred after the trial court’s decision, including Presidential Decree No. 345 and a Municipal Board ordinance, which it found had cured any initial defect in authority. The respondents filed motions for reconsideration, arguing that the Supreme Court improperly considered these new factual matters on appeal.

ISSUE

The core legal issue is whether the Supreme Court, in its appellate jurisdiction, properly considered and resolved new factual issues and evidence that were not presented before nor considered by the trial court, in order to validate the contracts in question.

RULING

The Supreme Court, by a vote of eight to two, denied the motions for reconsideration. The majority maintained its position that the subsequent legislative and executive actions validated the initially defective contract. However, in a dissenting opinion, Justice Teehankee, joined by Justice Makasiar, argued for granting the motions and setting aside the majority decision. The dissent contended that the Court erred as a matter of legal procedure by basing its reversal on new facts. Since the appeal was taken directly from the trial court, the Supreme Court’s review was limited to questions of law based on the facts established in the trial court. The new facts, such as the alleged ratification by the Municipal Board via a resolution and the enactment of subsequent laws, involved factual determinations—including the authenticity and legal effect of documents—that were not part of the trial court record. The dissent emphasized that the Supreme Court is not a trier of facts; these new factual issues should have been first ventilated in the trial court. By resolving them, the majority effectively decided the case on a basis not passed upon by the lower court, contravening settled procedural doctrine that bars raising new factual issues for the first time on appeal.