G.R. No. L-28360. January 27, 1983.
C & C COMMERCIAL CORPORATION, plaintiff-appellee, vs. ANTONIO C. MENOR, as Acting General Manager of the National Waterworks and Sewerage Authority, and MEMBERS OF THE COMMITTEE ON PRE-QUALIFICATION, NAWASA, defendants-appellants.

FACTS

C & C Commercial Corporation (C & C) filed a mandamus action to compel NAWASA to allow it to participate in a public bidding despite having a pending tax case and lacking a tax clearance certificate. The Court of First Instance of Manila, per Judge Cloribel, ruled in favor of C & C in a March 1, 1967 decision that became final after NAWASA failed to appeal. Relying on this final judgment, C & C participated in the bidding and was found to be the lowest bidder on May 18, 1967. Subsequently, however, NAWASA’s Acting General Manager, Antonio C. Menor, invoked Presidential Administrative Order No. 66, dated June 26, 1967, which disqualified persons or entities with pending tax cases from government biddings and required a tax clearance. Menor demanded C & C comply with this new order.
C & C then filed a motion in the original concluded case, which Judge Cloribel granted in an August 23, 1967 order, directing NAWASA to award the contract to C & C. NAWASA appealed this order to the Supreme Court. While the appeal was pending, NAWASA’s board awarded the contract to another bidder, Regal Trading Corporation, in January 1968, a contract later approved by the Office of the President. C & C initiated multiple legal actions in different courts seeking to nullify this award and restrain its implementation.

ISSUE

Whether the subsequently issued Presidential Administrative Order No. 66 could validly disqualify C & C and justify NAWASA’s refusal to award it the contract, notwithstanding the prior final and executory judgment in C & C’s favor.

RULING

The Supreme Court ruled in favor of C & C and affirmed Judge Cloribel’s order. The Court held that the final judgment in the mandamus case, which qualified C & C to participate in the bidding, constituted the “law of the case” and a vested right that could not be annulled by a subsequent administrative issuance. The judgment had been executed when C & C was allowed to bid and emerged as the lowest bidder. To allow Presidential Administrative Order No. 66 to retroactively nullify this final judicial determination would be an illegal interference by the executive with the judicial power and a deprivation of property (the judgment right) without due process. The Court emphasized that the administrative order could not retroactively overturn a final judicial decree; the judgment necessarily encompassed the right to be awarded the contract if C & C was the lowest bidder, as bidding participation would otherwise be a meaningless exercise. The subsequent award to another bidder based on the administrative order was therefore invalid as it disregarded a final and binding court decision.