SUELYN

Case Title THE PEOPLE OF THE PHILIPPINE ISLANDS, plaintiff-appellee,

vs.
GREGORIO PERFECTO, defendant-appellant
G.R. No. L-18463 October 4, 1922
Fact/s On August 20, 1920 Fernando M. Guerrero, the Secretary of the
Philippine Senate, discovered that a document which consists of
records of testimony given by witnesses in the investigation of oil
companies had disappeared from his office.

The day after he had informed the Senate body of the loss of
documents in the session called by the Governor-General, an article
against the Senate, which was edited by the herein defendant, Mr.
Gregorio Perfecto, was published in the newspaper La Nacion. Mr.
Perfecto was accused to have violated the Article 256 of the Spanish
Penal Code (SPC) which punishes ―any person who, by *** writing,
shall defame, abuse, or insult, any Minister of the Crown or other
person in authority‖.
Issue/s Whether or not the Article 256 of the Spanish Penal Code (SPC) is
still in effect despite the change of sovereignty from Spanish to
United State.
Ruling/ No, the Article 256 of the SPC is not in effect and cannot be applied
Decision/ in this case.
Held
First, the article was enacted to protect the Spanish officials who
were representatives of the King. However, there are no longer Kings
nor representatives of the Kings to protect at present and ―Minister
of the Crown‖ does not exist in the current government.

Second, the Philippine Libel Law (Act No. 227) had repealed so much
in the provision that relates to written defamation, abuse and insult
in the SPC and based on the facts, the defendant violated neither of
the two laws.

Lastly, the change from Spanish to American sovereignty of the

Philippines.

As stated as a general principle of public law, the laws that

regulate the relations of the inhabitants of the acquired territory
to the previous sovereign are abrogated.

Therefore, the judgment was reversed, and the defendant-appellant was

acquitted.

1
 LUCKY

Case Title JOSUE JAVELLANA, petitioner,

vs.
THE EXECUTIVE SECRETARY, THE SECRETARY OF NATIONAL DEFENSE, THE
SECRETARY OF JUSTICE AND THE SECRETARY OF FINANCE, respondents
G.R. No. L-36142 March 31, 1973
Fact/s On January 20, 1973, just two days before the Supreme Court decided
the sequel of plebiscite cases, Javellana filed this suit against the
respondents to restrain them from implementing any of the provisions
of the proposed Constitution not found in the present 1935
Constitution.

This is a petition filed by him as a Filipino citizen and a qualified

and registered voter and as a class suit, for himself and in behalf
of all citizens and voters similarly situated.

Javellana also alleged that the President had announced the immediate
implementation of the new constitution, thru his Cabinet, respondents
including.

Respondents are acting without or in excess of jurisdiction in

implementing the said proposed constitution upon ground the that the
President as Commander-in-Chief of the AFP is without authority to
create the Citizens Assemblies; without power to approve proposed
constitution; without power to proclaim the ratification by the
Filipino people of the proposed constitution; and the election held
to ratify the proposed constitution was not a free election, hence
null and void.

Following that, petitioners prayed for the nullification of

Proclamation No. 1102 and any order, decree, and proclamation which
have the same import and objective.
Issue/s 1. Whether or not the issue of the validity of Proclamation No. 1102
is a justiciable or political question, and therefore non-
justiciable.

2. Whether or not the constitution proposed by the 1971

Constitutional Convention has been ratified validly conforming to
the applicable constitutional and statutory provisions.

3. Whether or not the proposed Constitution has been acquiesced in

(with or without valid ratification) by the people.

4. Whether or not the petitioners are entitled for relief.

5. Whether or not the proposed Constitution by the 1971

Constitutional Convention in force.
Ruling/ The court was severely divided on the following issues raised in the
Decision/ petition: but when thecrucial question of whether the petitioners are
Held entitled to relief, six members of the court(Justices Makalintal,
Castro, Barredo, Makasiar, Antonio and Esguerra) voted to dismiss
thepetition. Concepcion, together Justices Zaldivar, Fernando and
2
Teehankee, voted to grant therelief being sought, thus upholding the
1973 Constitution.

First. To determine whether or not the new constitution is in force

depends upon whether or not the said new constitution has been
ratified in accordance with the requirements of the 1935
Constitution.

It is well settled that the matter of ratification of an amendment to

the constitution should be settled applying the provisions of the
constitution in force at the time of the alleged ratification of the
old constitution.

The issue whether the new constitution proposed has been ratified in
accordance with the provisions of Article XV of the 1935 Constitution
is justiciable as jurisprudence here and in the US (from whom we
patterned our 1935 Constitution) shall show.

Second. The Constitution does not allow Congress or anybody else to

vest in those lacking the qualifications and having the
disqualifications mentioned in the Constitution the right of
suffrage.

The votes of persons less than 21 years of age render the proceedings
in the Citizen‘s assemblies void.

Proceedings held in such Citizen‘s Assemblies were fundamentally

irregular, in that persons lacking the qualifications prescribed in
Article V Section 1 of the 1935 Constitution were allowed to vote in
said Assemblies. And, since there is no means by which the invalid
votes of those less than 21 years of age can be separated or
segregated from those of the qualified voters, the proceedings in the
Citizen‘s Assemblies must be considered null and void.

Viva voce voting for the ratification of the constitution is void.

Article XV of the 1935 Constitution envisages with the term "votes
cast" choices made on ballots – not orally or by raising hands – by
the persons taking part in plebiscites.

This is but natural and logical, for, since the early years of the
American regime, we had adopted the Australian Ballot System, with
its major characteristics, namely, uniform official ballots prepared
and furnished by the Government and secrecy in the voting, with the
advantage of keeping records that permit judicial inquiry, when
necessary, into the accuracy of the election returns.

The plebiscite on the constitution not having been conducted under

the supervision of COMELEC is void.

The point is that, such of the Barrio Assemblies as were held took
place without the intervention of the COMELEC and without complying
with the provisions of the Election Code of 1971 or even of those of
Presidential Decree No. 73.

3
The procedure therein mostly followed is such that there is no
reasonable means of checking the accuracy of the returns filed by the
officers who conducted said plebiscites. This is another patent
violation of Article X of the 1935 Constitution which form part of
the fundamental scheme set forth in the 1935 Constitution, as
amended, to insure the "free, orderly, and honest" expression of the
people's will. For this, the alleged plebiscite in the Citizen‘s
Assemblies is null and void, insofar as the same are claimed to have
ratified the revised Constitution.

Third. Proclamation No. 1102 is not an evidence of ratification.

Article X of the 1935 Constitution places COMELEC the "exclusive"
charge to the "the enforcement and administration of all laws
relative to the conduct of elections," independently of the
Executive. But there is not even a certification by the COMELEC in
support of the alleged results of the citizen‘s assemblies relied
upon in Proclamation No. 1102.

Also, on January 17, 1973 neither the alleged president of the

Federation of Provincial or City Barangays nor the Department of
Local Governments had certified to the President the alleged result
of the citizens' assemblies all over the Philippines. The citizen‘s
assemblies did not adopt the proposed constitution. It is to my mind
a matter of judicial knowledge that there have been no such citizen‘s
assemblies in many parts of Manila and suburbs, not to say, also, in
other parts of the Philippines.

Fourth. The Court is not prepared to concede that the acts the
officers and offices of the Executive Department, in line with
Proclamation No. 1102, connote recognition of or acquiescence to the
proposed Constitution.

A department of the Government cannot ―recognize‖ its own acts.

Recognition normally connotes the acknowledgment by a party of the
acts of another. Individual acts of recognition by members of
Congress do not constitute congressional recognition, unless the
members have performed said acts in session duly assembled. This is a
well-established principle of Administrative Law and of the Law of
Public Officers.

The compliance by the people with the orders of martial law

government does not constitute acquiescence to the proposed
Constitution. Neither does the Court prepared to declare that the
people's inaction as regards Proclamation No. 1102, and their
compliance with a number of Presidential orders, decrees and/or
instructions, some or many of which have admittedly had salutary
effects, issued subsequently thereto, amounts to a ratification,
adoption or approval of said Proclamation No. 1102. The intimidation
is there, and inaction or obedience of the people, under these
conditions, is not necessarily an act of conformity or acquiescence.
As regards the applicability to these cases of the "enrolled bill"
rule, it is well to remember that the same refers to a document
certified to the President for his action under the Constitution by
the Senate President and the Speaker of the House of Reps, and
attested to by the respective Secretaries of both Houses, concerning
4
legislative measures approved by said Houses. Whereas, Proclamation
No. 1102 is an act of the President declaring the results of a
plebiscite on the proposed Constitution, an act which Article X of
the 1935 Constitution denies the executive department of the
Government.

In all other respects and with regard to the other respondent in said
case, petitions therein should be given due course, there being more
than prima facie showing that the proposed Constitution has not been
ratified in accordance with Article XV of the 1935 Constitution,
either strictly, substantially, or has been acquiesced in by the
people or majority thereof; that said proposed Constitution is not in
force and effect; and that the 1935 Constitution is still the
Fundamental Law of the Land, without prejudice to the submission of
said proposed Constitution to the people at a plebiscite for its
ratification or rejection in accordance with Articles V, X and XV of
the 1935 Constitution and the provisions of the Revised Election Code
in force at the time of such plebiscite.

Fifth. Four (4) members of the Court, namely, Justices Barredo,

Makasiar, Antonio and Esguerra hold that it is in force by virtue of
the people's acceptance thereof; 4 members of the Court, namely,
Justices Makalintal, Castro, Fernando and Teehankee cast no vote
thereon on the premise stated in their votes on the third question
that they could not state with judicial certainty whether the people
have accepted or not accepted the Constitution; and 2 members of the
Court, namely, Justice Zaldivar and myself voted that the
Constitution proposed by the 1971 Constitutional Convention is not in
force; with the result, there are not enough votes to declare that
the new Constitution is not in force.

5
 LUCKY

Case Title Philippine Bar Association, petitioner

vs.
Commission on Elections, respondent
140 SCRA 455 January 7, 1986
Fact/s 11 petitions were filed for prohibition against the enforcement of BP
883 which calls for special national elections on February 7, 1986
(Snap elections) for the offices of President and Vice President of
the Philippines. BP 883 in conflict with the constitution in that it
allows the President to continue holding office after the calling of
the special election.

Senator Pelaez submits that President Marcos‘ letter of conditional

―resignation‖ did not create the actual vacancy required in Section
9, Article 7 of the Constitution which could be the basis of the
holding of a special election for President and Vice President
earlier than the regular elections for such positions in 1987. The
letter states that the President is: ―irrevocably vacat(ing) the
position of President effective only when the election is held and
after the winner is proclaimed and qualified as President by taking
his oath office ten (10) days after his proclamation.‖

The unified opposition, rather than insist on strict compliance with

the cited constitutional provision that the incumbent President
actually resign, vacate his office and turn it over to the Speaker of
the Batasang Pambansa as acting President, their standard bearers
have not filed any suit or petition in intervention for the purpose
nor repudiated the scheduled election. They have not insisted that
President Marcos vacate his office, so long as the election is clean,
fair and honest.
Issue/s Is BP 883 unconstitutional, and should the Supreme Court therefore
stop and prohibit the holding of the elections
Ruling/ The petitions in these cases are dismissed and the prayer for the
Decision/ issuance of an injunction restraining respondents from holding the
Held election on February 7, 1986, in as much as there are less than the
required 10 votes to declare BP 883 unconstitutional.

The events that have transpired since December 3,as the Court did not
issue any restraining order, have turned the issue into a political
question (from the purely justiciable issue of the questioned
constitutionality of the act due to the lack of the actual vacancy of
the President‘s office) which can be truly decided only by the people
in their sovereign capacity at the scheduled election, since there is
no issue more political than the election. The Court cannot stand in
the way of letting the people decide through their ballot, either to
give the incumbent president a new mandate or to elect a new
president.

6
 LUCKY

Case Title IN THE MATTER OF THE PETITION FOR HABEAS CORPUS OF

BENIGNO S. AQUINO, JR., RAMON MITRA, JR., FRANCISCO RODRIGO, AND
NAPOLEON RAMA, petitioners,
vs.
HON JUAN PONCE ENRILE, SECRETARY OF NATIONAL DEFENSE; GEN. ROMEO
ESPINO, CHIEF OF STAFF, ARMED FORCES OF THE PHILIPPINES; AND GEN.
FIDEL V. RAMOS, CHIEF, PHILIPPINE CONSTABULARY, respondents
G.R. No. L-35546 September 17, 1974
Fact/s The cases are all habeas corpus petitions, with the petitioners
arrested and held by the military under Proclamation 1081.

In pursuant of the General Order No. 2 of the President, the

petitioners were arrested and detained "for being participants to
take over the Government by force."

Enrile, the former Minister of National Defense, carried out Marcos'

order and ordered the arrest of a number of people, including Benigno
Aquino Jr, despite the fact that no charges had been filed against
them. As a result, Aquino and others filed a habeas corpus petition
against Juan Ponce Enrile. According to Enrile, the arrest is legal
because of Marcos' proclamation of martial law.
Issue/s Whether or not the detention of the petitioners is legal in
accordance with the declaration of Martial law.
Ruling/ IN VIEW OF ALL THE FOREGOING AND FOR THE REASONS STATED BY THE
Decision/ MEMBERS OF THE COURT IN THEIR SEPARATE OPINIONS, JUDGMENT IS HEREBY
Held RENDERED DISMISSING ALL THE PETITIONS, EXCEPT THOSE WHICH HAVE BEEN
PREVIOUSLY WITHDRAWN BY THE RESPECTIVE PETITIONERS WITH THE APPROVAL
OF THIS COURT, AS HEREINABOVE MENTIONED. NO COSTS.

In the case of invasion, insurrection, or rebellion, or an immediate

danger to the state, the President may suspend the privilege of the
writ of habeas corpus or declare martial law in the Philippines or
any part of it, according to the Constitution. In the issue at hand,
the Supreme Court decided that the country's condition of rebellion
had not yet vanished, posing a clear and impending threat to the
state.
Five (5) Justices ruled that the matter is a political question that
should not be investigated by the courts. The other four (4)
Justices, on the other hand, believed the matter was justiciable.
However, any Supreme Court inquiry into the constitutional adequacy
of the factual basis for the declaration of martial law in the
current instances has become irrelevant and academic.
The suspension of the writ of habeas corpus with respect to persons
arrested or detained for acts related to the basic objective of the
proclamation, which is to suppress invasion, insurgency, or
rebellion, or to protect public safety from imminent danger thereof,
is implicit in the state of martial law.

The issue is justiciable, according to the court.

Implicit - implied though not plainly expressed.

Writ of Habeas Corpus - used to bring a prisoner or other detainee
before the court to determine if the person's imprisonment or
detention is lawful.
7
 LUCKY

Case Title THE PROVINCE OF NORTH COTABATO, duly represented by GOVERNOR JESUS
SACDALAN and/or VICE-GOVERNOR EMMANUEL PIÑOL, for and in his own
behalf, petitioners,
vs.
THE GOVERNMENT OF THE REPUBLIC OF THE PHILIPPINES PEACE PANEL ON
ANCESTRAL DOMAIN (GRP), represented by SEC. RODOLFO GARCIA, ATTY.
LEAH ARMAMENTO, ATTY. SEDFREY CANDELARIA, MARK RYAN SULLIVAN and/or
GEN. HERMOGENES ESPERON, JR., the latter in his capacity as the
present and duly-appointed Presidential Adviser on the Peace
Process (OPAPP) or the so-called Office of the Presidential Adviser
on the Peace Process, respondents
G.R. No. 183591 October 14, 2008
Fact/s Subject of this case is the Memorandum of Agreement on the
Ancestral Domain (MOA-AD) which is scheduled to be signed by the
Government of the Republic of the Philippines and the MILF in
August 05, 2008. Five cases bearing the same subject matter.

The MOA-AD is a result of various agreements entered into by and between the
government and the MILF starting in 1996; then in 1997, they signed the Agreement
on General Cessation of Hostilities; and the following year, they signed the
General Framework of Agreement of Intent on August 27, 1998. However, in 1999 and
in the early of 2000, the MILF attacked a number of municipalities in Central
Mindanao. In March 2000, they took the hall of Kauswagan, Lanao del Norte; hence,
then Pres. Estrada declared an all-out war-which tolled the peace negotiation. It
was when then Pres. Arroyo assumed office, when the negotiation regarding peace in
Mindanao continued. MILF was hesitant; however, this negotiation proceeded when
the government of Malaysia interceded. Formal peace talks resumed and MILF
suspended all its military actions. The Tripoli Agreement in 2001 lead to the
ceasefire between the parties. After the death of MILF Chairman Hashim and Iqbal
took over his position, the crafting of MOA-AD in its final form was born.

Embodied in concepts and principles, is the definition of

Bangsamoro as all indigenous peoples of Mindanao and its adjacent
islands. These people have the right to self- governance of their
Bangsamoro homeland to which they have exclusive ownership by
virtue of their prior rights of occupation in the land. The MOA-AD
goes on to describe the Bangsamoro people as "the ‗First Nation'
with defined territory and with a system of government having
entered into treaties of amity and commerce with foreign nations."
It then mentions for the first time the "Bangsamoro Juridical
Entity" (BJE) to which it grants the authority and jurisdiction
over the Ancestral Domain and Ancestral Lands of the Bangsamoro.

As defined in the territory of the MOA-AD, the BJE shall embrace

the Mindanao-Sulu-Palawan geographic region, involving the present
ARMM, parts of which are those which voted in the inclusion to ARMM
in a plebiscite. The territory is divided into two categories, ―A‖
which will be subject to plebiscite not later than 12 mos. after
the signing and ―B‖ which will be subject to plebiscite 25 years
from the signing of another separate agreement. Embodied in the
MOA-AD that the BJE shall have jurisdiction over the internal
waters-15kms from the coastline of the BJE territory; they shall
also have "territorial waters," which shall stretch beyond the BJE
internal waters up to the baselines of the Republic of the
8
 Philippines (RP) south east and south west of mainland Mindanao;
and that within these territorial waters, the BJE and the
government shall exercise joint jurisdiction, authority and
management over all natural resources. There will also be sharing
of minerals in the territorial waters; but no provision on the
internal waters.

Included in the resources is the stipulation that the BJE is free

to enter into any economic cooperation and trade relations with
foreign countries and shall have the option to establish trade
missions in those countries, as well as environmental cooperation
agreements, but not to include aggression in the GRP. The external
defense of the BJE is to remain the duty and obligation of the
government. The BJE shall have participation in international
meetings and events" like those of the ASEAN and the specialized
agencies of the UN. They are to be entitled to participate in
Philippine official missions and delegations for the negotiation of
border agreements or protocols for environmental protection and
equitable sharing of incomes and revenues involving the bodies of
water adjacent to or between the islands forming part of the
ancestral domain. The BJE shall also have the right to explore its
resources and that the sharing between the Central Government and
the BJE of total production pertaining to natural resources is to
be 75:25 in favor of the BJE. And they shall have the right to
cancel or modify concessions and TLAs.

And lastly in the governance, the MOA-AD claims that the

relationship between the GRP and MILF is associative i.e.
characterized by shared authority and responsibility. This
structure of governance shall be further discussed in the
Comprehensive Compact, a stipulation which was highly contested
before the court. The BJE shall also be given the right to build,
develop and maintain its own institutions, the details of which
shall be discussed in the comprehensive compact as well.
Issue/s 1. WON the petitions have complied with the procedural requirements
for the exercise of judicial review

2. WON respondents violate constitutional and statutory provisions

on public consultation and the right to information when they
negotiated and later initialed the MOA-AD; and

3. WON the contents of the MOA-AD violated the Constitution and the
laws
Ruling/ The SC declared the MOA-AD contrary to law and the Constitution.
Decision/
Held 1st issue: As regards the procedural issue, SC upheld that there is
indeed a need for the exercise of judicial review.

The power of judicial review is limited to actual cases or

controversy, that is the court will decline on issues that are
hypothetical, feigned problems or mere academic questions. Related
to the requirement of an actual case or controversy is the
requirement of ripeness. The contention of the SolGen is that there
is no issue ripe for adjudication since the MOA-AD is only a
proposal and does not automatically create legally demandable
9
rights and obligations. Such was denied.

The SC emphasized that the petitions are alleging acts made in

violation of their duty or in grave abuse of discretion. Well-
settled jurisprudence states that acts made by authority which
exceed their authority, by violating their duties under E.O. No. 3
and the provisions of the Constitution and statutes, the petitions
make a prima facie case for Certiorari, Prohibition, and Mandamus,
and an actual case or controversy ripe for adjudication exists.
When an act of a branch of government is seriously alleged to have
infringed the Constitution, it becomes not only the right but in
fact the duty of the judiciary to settle the dispute. This is aside
from the fact that concrete acts made under the MOA-AD are not
necessary to render the present controversy ripe and that the law
or act in question as not yet effective does not negate ripeness.

With regards to the locus standi, the court upheld the

personalities of the Province of Cotabato, Province of Zamboanga
del norte, City of Iligan, City of Zamboanga, petitioners in
intervention Province of Sultan Kudarat, City of Isabela and
Municipality of Linnamon to have locus standi since it is their
LGUs which will be affected in whole or in part if include within
the BJE. Intervenors Franklin Drilon and Adel Tamano, in alleging
their standing as taxpayers, assert that government funds would be
expended for the conduct of an illegal and unconstitutional
plebiscite to delineate the BJE territory. On that score alone,
they can be given legal standing. Senator Mar Roxas is also given a
standing as an intervenor. And lastly, the Intervening respondents
Muslim Multi-Sectoral Movement for Peace and Development, an
advocacy group for justice and the attainment of peace and
prosperity in Muslim Mindanao; and Muslim Legal Assistance
Foundation Inc., a non-government organization of Muslim lawyers
since they stand to be benefited or prejudiced in the resolution of
the petitions regarding the MOA-AD.

On the contention of mootness of the issue considering the signing

of the MOA-AD has already been suspended and that the President has
already disbanded the GRP, the SC disagrees. The court reiterates
that the moot and academic principle is a general rule only, the
exceptions, provided in David v. Macapagal-Arroyo, that it will
decide cases, otherwise moot and academic, if it finds that (a)
there is a grave violation of the Constitution; (b) the situation
is of exceptional character and paramount public interest is
involved; (c) the constitutional issue raised requires formulation
of controlling principles to guide the bench, the bar, and the
public; and (d) the case is capable of repetition yet evading
review; and that where there is a voluntary cessation of the
activity complained of by the defendant or doer, it does not divest
the court the power to hear and try the case especially when the
plaintiff is seeking for damages or injunctive relief.

Clearly, the suspension of the signing of the MOA-AD and the

disbandment of the GRP did not render the petitions moot and
academic. The MOA-AD is subject to further legal enactments
including possible Constitutional amendments more than ever
10
provides impetus for the Court to formulate controlling principles
to guide the bench, the bar, the public and, in this case, the
government and its negotiating entity.

At all events, the Court has jurisdiction over most if not the rest
of the petitions. There is a reasonable expectation that
petitioners will again be subjected to the same problem in the
future as respondents' actions are capable of repetition, in
another or any form. But with respect to the prayer of Mandamus to
the signing of the MOA-AD, such has become moot and academic
considering that parties have already complied thereat.

2nd Issue: The SC ruled that the MOA-AD is a matter of public

concern, involving as it does the sovereignty and territorial
integrity of the State, which directly affects the lives of the
public at large.

As enshrined in the Constitution, the right to information

guarantees the right of the people to demand information, and
integrated therein is the recognition of the duty of the
officialdom to give information even if nobody demands. The policy
of public disclosure establishes a concrete ethical principle for
the conduct of public affairs in a genuinely open democracy, with
the people's right to know as the centerpiece. It is a mandate of
the State to be accountable by following such policy. These
provisions are vital to the exercise of the freedom of expression
and essential to hold public officials at all times accountable to
the people.

Also, it was held that such stipulation in the Constitution is

self-executory with reasonable safeguards —the effectivity of which
need not await the passing of a statute. Hence, it is essential to
keep open a continuing dialogue or process of communication between
the government and the people. It is in the interest of the State
that the channels for free political discussion be maintained to
the end that the government may perceive and be responsive to the
people's will.

The idea of a feedback mechanism was also sought for since it is

corollary to the twin rights to information and disclosure. And
feedback means not only the conduct of the plebiscite as per the
contention of the respondents. Clearly, what the law states is the
right of the petitioners to be consulted in the peace agenda as
corollary to the constitutional right to information and
disclosure. As such, respondent Esperon committed grave abuse of
discretion for failing to carry out the furtive process by which
the MOA-AD was designed and crafted runs contrary to and in excess
of the legal authority, and amounts to a whimsical, capricious,
oppressive, arbitrary and despotic exercise thereto. Moreover, he
cannot invoke of executive privilege because he already waived it
when he complied with the Court‘s order to the unqualified
disclosure of the official copies of the final draft of the MOA-AD.

In addition, the LGU petitioners has the right to be involved in

matters related to such peace talks as enshrined in the State
11
policy. The MOA-AD is one peculiar program that unequivocally and
unilaterally vests ownership of a vast territory to the Bangsamoro
people, which could pervasively and drastically result to the
diaspora or displacement of a great number of inhabitants from
their total environment.

3rd issue: With regard to the provisions of the MOA-AD, there can
be no question that they cannot be all accommodated under the
present Constitution and laws.

12
 ELDANI

Case Title PROF. MERLIN M. MAGALLONA, AKBAYAN PARTY-LIST REP. RISA HONTIVEROS,
PROF. HARRY C. ROQUE, JR., AND UNIVERSITY OF THE PHILIPPINES COLLEGE
OF LAW STUDENTS, ALITHEA BARBARA ACAS, VOLTAIRE ALFERES, CZARINA MAY
ALTEZ, FRANCIS ALVIN ASILO, SHERYL BALOT, RUBY AMOR BARRACA, JOSE
JAVIER BAUTISTA, ROMINA BERNARDO, VALERIE PAGASA BUENAVENTURA, EDAN
MARRI CAÑETE, VANN ALLEN DELA CRUZ, RENE DELORINO, PAULYN MAY DUMAN,
SHARON ESCOTO, RODRIGO FAJARDO III, GIRLIE FERRER, RAOULLE OSEN
FERRER, CARLA REGINA GREPO, ANNA MARIE CECILIA GO, IRISH KAY KALAW,
MARY ANN JOY LEE, MARIA LUISA MANALAYSAY, MIGUEL RAFAEL MUSNGI,
MICHAEL OCAMPO, JAKLYN HANNA PINEDA, WILLIAM RAGAMAT, MARICAR RAMOS,
ENRIK FORT REVILLAS, JAMES MARK TERRY RIDON, JOHANN FRANTZ RIVERA IV,
CHRISTIAN RIVERO, DIANNE MARIE ROA, NICHOLAS SANTIZO, MELISSA
CHRISTINA SANTOS, CRISTINE MAE TABING, VANESSA ANNE TORNO, MARIA
ESTER VANGUARDIA, and MARCELINO VELOSO III, Petitioners,
vs.
HON. EDUARDO ERMITA, IN HIS CAPACITY AS EXECUTIVE SECRETARY, HON.
ALBERTO ROMULO, IN HIS CAPACITY AS SECRETARY OF THE DEPARTMENT OF
FOREIGN AFFAIRS, HON. ROLANDO ANDAYA, IN HIS CAPACITY AS SECRETARY OF
THE DEPARTMENT OF BUDGET AND MANAGEMENT, HON. DIONY VENTURA, IN HIS
CAPACITY AS ADMINISTRATOR OF THE NATIONAL MAPPING & RESOURCE
INFORMATION AUTHORITY, and HON. HILARIO DAVIDE, JR., IN HIS CAPACITY
AS REPRESENTATIVE OF THE PERMANENT MISSION OF THE REPUBLIC OF THE
PHILIPPINES TO THE UNITED NATIONS, Respondents
G.R No. 187167 August 16, 2011
Fact/s RA 3046 was passed in 1961 which provides among others the
demarcation lines of the baselines of the Philippines as an
archipelago. This is in consonance with UNCLOS I.

RA 5446 amended RA 3046 in terms of typographical errors and included

Section 2 in which the government reserved the drawing of baselines
in Sabah in North Borneo.

RA 9522 took effect on March 2009 amending RA 5446. The amendments,

which are in compliance with UNCLOS III in which the Philippines is
one of the signatory, shortening one baseline while optimizing the
other and classifying Kalayaan Group of Island and Scarborough Shoal
as Regimes of Island.

Petitioners in their capacity as taxpayer, citizen and legislator

assailed the constitutionality of RA 9522:- it reduces the territory
of the Philippines in violation to the Constitution and it opens the
country to maritime passage of vessels and aircrafts of other states
to the detriment of the economy, sovereignty, national security and
of the Constitution as well. They added that the classification of
Regime of Islands would be prejudicial to the lives of the fishermen.
Issue/s 1. WON the petitioners have locus standi to bring the suit; and
2. WON RA 9522 is unconstitutional
Ruling/ Petition is dismissed.
Decision/ 1st Issue:
Held The SC ruled the suit is not a taxpayer or legislator, but as a
citizen suit, since it is the citizens who will be directly injured
and benefitted in affording relief over the remedy sought.
2nd Issue:
The SC upheld the constitutionality of RA 9522.
13
First, RA 9522 did not delineate the territory the Philippines but is
merely a statutory tool to demarcate the country‘s maritime zone and
continental shelf under UNCLOS III. SC emphasized that UNCLOS III is
not a mode of acquiring or losing a territory as provided under the
laws of nations. UNCLOS III is a multi-lateral treaty that is a
result of a long-time negotiation to establish a uniform sea-use
rights over maritime zones (i.e., the territorial waters [12 nautical
miles from the baselines], contiguous zone [24 nautical miles from
the baselines], exclusive economic zone [200 nautical miles from the
baselines]), and continental shelves. In order to measure said
distances, it is a must for the state parties to have their
archipelagic doctrines measured in accordance to the treaty—the role
played by RA 9522. The contention of the petitioner that RA 9522
resulted to the loss of 15,000 square nautical miles is devoid of
merit. The truth is, RA 9522, by optimizing the location of base
points, increased the Philippines total maritime space of 145,216
square nautical miles.

Second, the classification of KGI and Scarborough Shoal as Regime of

Islands is consistent with the Philippines‘ sovereignty. Had RA 9522
enclosed the islands as part of the archipelago, the country will be
violating UNCLOS III since it categorically stated that the length of
the baseline shall not exceed 125 nautical miles. So what the
legislators did is to carefully analyze the situation: the country,
for decades, had been claiming sovereignty over KGI and Scarborough
Shoal on one hand and on the other hand they had to consider that
these are located at non-appreciable distance from the nearest
shoreline of the Philippine archipelago. So, the classification is in
accordance with the Philippines sovereignty and State‘s responsible
observance of its pacta sunt servanda obligation under UNCLOS III.

Third, the new base line introduced by RA 9522 is without prejudice

with delineation of the baselines of the territorial sea around the
territory of Sabah, situated in North Borneo, over which the Republic
of the Philippines has acquired dominion and sovereignty.

And lastly, the UNCLOS III and RA 9522 are not incompatible with the
Constitution‘s delineation of internal waters. Petitioners contend
that RA 9522 transformed the internal waters of the Philippines to
archipelagic waters hence subjecting these waters to the right of
innocent and sea lanes passages, exposing the Philippine internal
waters to nuclear and maritime pollution hazards. The Court
emphasized that the Philippines exercises sovereignty over the body
of water lying landward of the baselines, including the air space
over it and the submarine areas underneath, regardless whether
internal or archipelagic waters. However, sovereignty will not bar
the Philippines to comply with its obligation in maintaining freedom
of navigation and the generally accepted principles of international
law. It can be either passed by legislator as a municipal law or in
the absence thereof, it is deemed incorporated in the Philippines law
since the right of innocent passage is a customary international law,
thus automatically incorporated thereto.

This does not mean that the states are placed in a lesser footing; it
14
just signifies concession of archipelagic states in exchange for
their right to claim all waters inside the baseline. In fact, the
demarcation of the baselines enables the Philippines to delimit its
exclusive economic zone, reserving solely to the Philippines the
exploitation of all living and non-living resources within such zone.
Such a maritime delineation binds the international community since
the delineation is in strict observance of UNCLOS III. If the
maritime delineation is contrary to UNCLOS III, the international
community will of course reject it and will refuse to be bound by it.

The Court expressed that it is within the Congress who has the
prerogative to determine the passing of a law and not the Court.
Moreover, such enactment was necessary in order to comply with the
UNCLOS III; otherwise, it shall backfire on the Philippines for its
territory shall be open to seafaring powers to freely enter and
exploit the resources in the waters and submarine areas around our
archipelago and it will weaken the country‘s case in any
international dispute over Philippine maritime space.

The enactment of UNCLOS III compliant baselines law for the

Philippine archipelago and adjacent areas, as embodied in RA 9522,
allows an internationally-recognized delimitation of the breadth of
the Philippines‘ maritime zones and continental shelf. RA 9522 is
therefore a most vital step on the part of the Philippines in
safeguarding its maritime zones, consistent with the Constitution and
our national interest.

15
 ELDANI

Case Title PHILIPPINE VIRGINIA TOBACCO ADMINISTRATION, petitioner,

vs.
COURT OF INDUSTRIAL RELATIONS, REUEL ABRAHAM, MILAGROS ABUEG, et. al,
respondents.
G.R. No. L-32052 July 25, 1975
Fact/s Private respondents alleged their employment relationship, the
overtime services in excess of the regular eight hours a day rendered
by them, and the failure to pay them overtime compensation in
accordance with Commonwealth Act No. 444. Philippine Virginia Tobacco
Administration denied the allegations and raising the special
defenses of lack of a cause of action and lack of jurisdiction. The
respondent Court issued an order sustaining the claims of private
respondents for overtime services and directing petitioner to pay the
same, minus what it had already paid. There was a motion for
reconsideration but it was denied by the respondent Court. Petitioner
Philippine Virginia Tobacco Administration contends that it is beyond
the jurisdiction of respondent Court as it is exercising governmental
functions and that it is exempt from the operation of Commonwealth
Act No. 444.
Issue/s Whether or not petitioner discharges governmental and not proprietary
functions.
Ruling/ Yes, the Petitioner discharges governmental and not proprietary
Decision/ functions. The Supreme Court ruled that a reference to the enactments
Held creating Petitioner Corporation suffices to demonstrate the merit of
petitioner‘s plea that it performs governmental and not proprietary
functions. Under Republic Act No. 2265, its purposes and objectives
are: "(a) To promote the effective merchandising of Virginia tobacco
in the domestic and foreign markets so that those engaged in the
industry will be placed on a basis of economic security; (b) To
establish and maintain balanced production and consumption of
Virginia tobacco and its manufactured products, and such marketing
conditions as will insure and stabilize the price of a level
sufficient to cover the cost of production plus reasonable profit
both in the local as well as in the foreign market; (c) To create,
establish, maintain, and operate processing, warehousing and
marketing facilities in suitable centers and supervise the selling
and buying of Virginia tobacco so that the farmers will enjoy
reasonable prices that secure a fair return of their investments; (d)
To prescribe rules and regulations governing the grading,
classifying, and inspecting of Virginia tobacco; and (e) To improve
the living and economic conditions of the people engaged in the
tobacco industry."

The appealed Order of March 21, 1970 and the Resolution of respondent
Court en banc of May 8, 1970 denying a motion for reconsideration are
hereby affirmed. The last sentence of the Order of March 21, 1970
reads as follows: "To find how much each of them [private
respondents] is entitled under this judgment, the Chief of the
Examining Division, or any of his authorized representative, is
hereby directed to make a reexamination of records, papers and
documents in the possession of respondent PVTA pertinent and proper
under the premises and to submit his report of his findings to the
Court for further disposition thereof." Accordingly, as provided by
the New Labor Code, this case is referred to the National Labor
16
Relations Commission for further proceedings conformably to law. No
costs.

The amendatory statute, Republic Act No. 4155, renders even more
evident its nature as a governmental agency. Its first section on the
declaration of policy reads: "It is declared to be the national
policy, with respect to the local Virginia tobacco industry, to
encourage the production of local Virginia tobacco of the qualities
needed and in quantities marketable in both domestic and foreign
markets, to establish this industry on an efficient and economic
basis, and, to create a climate conducive to local cigarette
manufacture of the qualities desired by the consuming public,
blending imported and native Virginia leaf tobacco to improve the
quality of locally manufactured cigarettes."

It is thus readily apparent from a cursory perusal of such statutory

provisions why petitioner can rightfully invoke the doctrine
announced in the leading Agricultural Credit and Cooperative
Financing Administration decision and why the objection of private
respondents with its overtones of the distinction between constituent
and ministrant functions of governments. Under this traditional
classification, such constituent functions are exercised by the State
as attributes of sovereignty, and not merely to promote the welfare,
progress and prosperity of the people - these latter functions being
ministrant, the exercise of which is optional on the part of the
government.

17
 ELDANI

Case Title THE AGRICULTURAL CREDIT and COOPERATIVE FINANCING ADMINISTRATION

(ACCFA), petitioner,
vs.
ACCFA SUPERVISORS' ASSOCIATION, ACCFA WORKERS' ASSOCIATION, and THE
COURT OF INDUSTRIAL RELATIONS, respondents
G.R. No. L-21484 November 29, 1969
Fact/s ACCFA, a government agency created under RA 821, as amended was
reorganized and its name changed to Agricultural Credit
Administration (ACA) under the RA 3844 or Land Reform Code. While
ACCFA Supervisors' Association (ASA) and the ACCFA Workers'
Association (AWA), are labor organizations (the Unions) composed of
the supervisors and the rank-and-file employees in the ACCFA.

A CBA was agreed upon by labor unions (ASA and AWA) and ACCFA. The
said CBA was supposed to be effective on 1 July 1962. Due to non-
implementation of the CBA the unions held a strike. And 5 days later,
the Unions, with its mother union, the Confederation of Unions in
Government Corporations and Offices (CUGCO), filed a complaint
against ACCFA before the CIR on ground of alleged acts of unfair
labor practices; violation of the collective bargaining agreement in
order to discourage the members of the Unions in the exercise of
their right to self-organization, discrimination against said members
in the matter of promotions and refusal to bargain.

ACCFA moved for a reconsideration but while the appeal was pending,
RA 3844 was passed which effectively turned ACCFA to ACA. Then, ASA
and AWA petitioned that they obtain sole bargaining rights with ACA.
While this petition was not yet decided upon, EO 75 was also passed
which placed ACA under the Land Reform Project Administration.
Notwithstanding the latest legislation passed, the trial court and
the appellate court ruled in favor of ASA and AWA.
Issue/s W/N ACA is a government entity
Ruling/ YES.
Decision/
Held The decisions and orders appealed from are set aside and/or modified
in accordance with the foregoing pronouncements. No costs.

It was in furtherance of such policy that the Land Reform Code was
enacted and the various agencies, the ACA among them, established to
carry out its purposes. There can be no dispute as to the fact that
the land reform program contemplated in the said Code is beyond the
capabilities of any private enterprise to translate into reality. It
is a purely governmental function, no less than, the establishment
and maintenance of public schools and public hospitals. And when,
aside from the governmental objectives of the ACA, geared as they are
to the implementation of the land reform program of the State, the
law itself declares that the ACA is a government office, with the
formulation of policies, plans and programs vested no longer in a
Board of Governors, as in the case of the ACCFA, but in the National
Land Reform Council, itself a government instrumentality; and that
its personnel are subject to Civil Service laws and to rules of
standardization with respect to positions and salaries, any vestige
of doubt as to the governmental character of its functions
disappears.
18
The growing complexities of modern society, however, have rendered
this traditional classification of the functions of government quite
unrealistic, not to say obsolete. The areas which used to be left to
private enterprise and initiative and which the government was called
upon to enter optionally, and only "because it was better equipped to
administer for the public welfare than is any private individual or
group of individuals,"5continue to lose their well-defined boundaries
and to be absorbed within activities that the government must
undertake in its sovereign capacity if it is to meet the increasing
social challenges of the times. Here as almost everywhere else the
tendency is undoubtedly towards a greater socialization of economic
forces. Here of course this development was envisioned, indeed
adopted as a national policy, by the Constitution itself in its
declaration of principle concerning the promotion of social justice.

The Unions have no bargaining rights with ACA. EO 75 placed ACA under
the LRPA and by virtue of RA 3844 the implementation of the Land
Reform Program of the government is a governmental function NOT a
proprietary function. Being such, ACA can no longer step down to deal
privately with said unions as it may have been doing when it was
still ACCFA. However, the growing complexities of modern society have
rendered the classification of the governmental functions as
unrealistic, if not obsolete. Ministerial and governmental functions
continue to lose their well-defined boundaries and are absorbed
within the activities that the government must undertake in its
sovereign capacity if it to meet the increasing social challenges of
the times and move towards a greater socialization of economic
forces.

19
 ELDANI

Case Title JUAN ANTONIO, ANNA ROSARIO and JOSE ALFONSO, all surnamed OPOSA,
minors, and represented by their parents ANTONIO and RIZALINA OPOSA,
ROBERTA NICOLE SADIUA, et. al and THE PHILIPPINE ECOLOGICAL NETWORK,
INC., petitioners,
vs.
THE HONORABLE FULGENCIO S. FACTORAN, JR., in his capacity as the
Secretary of the Department of Environment and Natural Resources, and
THE HONORABLE ERIBERTO U. ROSARIO, Presiding Judge of the RTC,
Makati, Branch 66, respondents
G.R. No. 101083 July 30, 1993
Fact/s A taxpayer‘s class suit was filed by minors Juan Antonio Oposa, et
al., representing their generation and generations yet unborn, and
represented by their parents against Fulgencio Factoran Jr.,
Secretary of DENR. They prayed that judgment be rendered ordering the
defendant, his agents, representatives and other persons acting in
his behalf to:

1. Cancel all existing Timber Licensing Agreements (TLA) in the

country;
2. Cease and desist from receiving, accepting, processing, renewing,
or appraising new TLAs;

And granting the plaintiffs ―such other reliefs just and equitable
under the premises.‖ They alleged that they have a clear and
constitutional right to a balanced and healthful ecology and are
entitled to protection by the State in its capacity as parens
patriae. Furthermore, they claim that the act of the defendant in
allowing TLA holders to cut and deforest the remaining forests
constitutes a misappropriation and/or impairment of the natural
resources property he holds in trust for the benefit of the plaintiff
minors and succeeding generations.
The defendant filed a motion to dismiss the complaint on the
following grounds:
1. Plaintiffs have no cause of action against him;
2. The issues raised by the plaintiffs is a political question which
properly pertains to the legislative or executive branches of the
government.
Issue/s Do the petitioner-minors have a cause of action in filing a class
suit to ―prevent the misappropriation or impairment of Philippine
rainforests?‖
Ruling/ Being impressed with merit, the instant Petition is hereby GRANTED,
Decision/ and the challenged Order of respondent Judge of 18 July 1991
Held dismissing Civil Case No. 90-777 is hereby set aside. The petitioners
may therefore amend their complaint to implead as defendants the
holders or grantees of the questioned timber license agreements.

No pronouncement as to costs.

Yes. Petitioner-minors assert that they represent their generation as

well as generations to come. The Supreme Court ruled that they can,
for themselves, for others of their generation, and for the
succeeding generation, file a class suit. Their personality to sue in
20
behalf of succeeding generations is based on the concept of
intergenerational responsibility insofar as the right to a balanced
and healthful ecology is concerned. Such a right considers the
―rhythm and harmony of nature‖ which indispensably include, inter
alia, the judicious disposition, utilization, management, renewal and
conservation of the country‘s forest, mineral, land, waters,
fisheries, wildlife, offshore areas and other natural resources to
the end that their exploration, development, and utilization be
equitably accessible to the present as well as the future
generations. Needless to say, every generation has a responsibility
to the next to preserve that rhythm and harmony for the full
enjoyment of a balanced and healthful ecology. Put a little
differently, the minor‘s assertion of their right to a sound
environment constitutes at the same time, the performance of their
obligation to ensure the protection of that right for the generations
to come.

21
 HANA

Case Title THE GOVERNMENT OF THE PHILIPPINE ISLANDS, represented by the

Treasurer of the Philippine Islands, plaintiff-appellee,
vs.
EL MONTE DE PIEDAD Y CAJA DE AHORRAS DE MANILA, defendant-appellant
G.R. No. L-9959 December 13, 1916
Fact/s On June 3, 1863, an Earthquake took place in the Philippine Islands,
which was then under the Spanish Crown, that devastated lot of
civilians. Therefore n Oct. 6 of that year, a central relief board
was appointed, by authority of the King of Spain, to distribute the
money voluntarily contributed by donors. After a thorough
investigation and consideration, the relief board allotted $365703.50
to the various sufferers name in its resolution.

These were later distributed in accordance with the above mentioned

allotments, the sum of $30,299.65, leaving a balance of $365.403.85
for distribution. Upon the petition of the governing body of the
Monte de Piedad, dated February 1, 1833, the Philippine Government,
by order dated the first month, directed its treasured to turn over
Monte de Piedad the sum of $80,000 of relief fund in its installment
of 20,000 each. These amounts received on the following dates:
February 15, March 12, April 14, and June 2, 1883, and are still in
the possession of Monte de Piedad.

The Attorney General in representation of the Philippine Islands, a

file of claim for the $80000 together with interest, for the benefit
of those persons or their heirs appearing in the list of names
published in the Official Gazette instituted on May, 3, 1912 by the
Government of the Philippine Islands, represented by the Insular
Treasurer, and after due trial in the lower court, judgment was
entered in honor of the plaintiff currency, together with legal
interest from February 28, 1912, and cost of cause. The Monte de
Piedad then contended that the present Philippine Government cannot
file suit on the ground that the obligation of the former was wiped
out when there was a change of sovereignty.
Issue/s Whether or not the government of the Philippine Islands has capacity
to file a suit against the Monte de Piedad for the recovery of the
said amount.
Ruling/ Under the Principle of Parens Patriae, the Philippine Government
Decision/ being the guardian of the ―rights of the people‖ can represent the
Held legitimate claimants of the beneficiary and therefore has the
capacity to file a suit against the appellant. The Philippine
Government is not merely a nominal party that‘s why it can bring and
prosecute this action by exercising its sovereign powers. The supreme
court then held the right of the government to file the case.

For the foregoing reasons the judgment appealed from is affirmed,

with costs against the appellant. So ordered.

22
 HANA

Case Title ANTONIO M. SERRANO, Petitioner,

vs.
Gallant MARITIME SERVICES, INC. and MARLOW NAVIGATION CO., INC.,
Respondents
G.R. No. 167614 March 24, 2009
Fact/s Serrano signed a Contract of Employment for Chief Officer, with
basic monthly salary of US$1,400, with Gallant Maritime Services,
Inc. and Marlow Navigation Co., Ltd for 12 months.

However on the date of his departure, March 19, 1998, petitioner was
constrained to accept a downgraded employment contract for the
position of Second Officer with a monthly salary of US$1,000, upon
the assurance and representation of respondents that he would be
made Chief Officer by the end of April 1998.

Respondents did not deliver on their promise. Hence, petitioner

refused to stay on as Second Officer and was repatriated to the
Philippines on May 26, 1998. Petitioner had only served 2 months and
7 days of his contract, leaving an unexpired portion of 9 months and
23 days.

Petitioner filed with the Labor Arbiter a complaint against

respondents for constructive dismissal and for payment of his money
claims, for the unexpired portion of his contract plus adjustments
to chief mate‘s salary, totaling US$26,442.73.

The last clause in paragraph 10 of RA 8042 states that ―In case of

termination of overseas employment without just, valid or authorized
cause as defined by law or contract, the workers shall be entitled
to the full reimbursement of his placement fee with interest of
twelve percent (12%) per annum, plus his salaries for the unexpired
portion of his employment contract or for three (3) months for every
year of the unexpired term, whichever is less.‖

Relying on this, the LA based his computation on the salary period

of 3 months only rather than the entire unexpired portion of 9
months and 23 days of the petitioner‘s employment contract. Thus,
the LA awarded petitioner monetary benefits in the sum $8,770.00.
Issue/s What is the source of authority of the state to protect seafarers?

Why is there a need to protect workers and eliminate discrimination?

Who bears the burden of evidence in proving some labor standards

claims?
Ruling/ The Court GRANTS the Petition. The subject clause "or for three
Decision/ months for every year of the unexpired term, whichever is less" in
Held the 5th paragraph of Section 10 of Republic Act No. 8042 is DECLARED
UNCONSTITUTIONAL; and the December 8, 2004 Decision and April 1,
2005 Resolution of the Court of Appeals are MODIFIED to the effect
that petitioner is AWARDED his salaries for the entire unexpired
portion of his employment contract consisting of nine months and 23
days computed at the rate of US$1,400.00 per month. No costs.
23
Equality is one ideal which cries out for bold attention and action
in the Constitution. The Preamble proclaims "equality" as an ideal
precisely in protest against crushing inequities in Philippine
society. To address these inequities, our Constitution, has adopted
the policy of social justice to guarantee social and economic rights
to marginalized groups of society, including labor. Under the policy
of social justice, the law bends over backward to accommodate the
interests of the working class on the humane justification that
those with less privilege in life should have more in law.

While these provisions on social justice are described as nonself-

executing and does not directly bestow on the working class any
actual enforceable rights, the provisions urges not only on the
legislative and executive branches but also on the judiciary to
translate this pledge into a living reality.

The law guarantees equal protection to all – that no person shall be

deprived of life, liberty, or property without due process of law
nor shall any person be denied the EQUAL PROTECTION OF THE LAW.

Section 18,63 Article II and Section 3,64 Article XIII accord all
members of the labor sector, without distinction as to place of
deployment, full protection of their rights and welfare. To Filipino
workers, the rights guaranteed under the foregoing constitutional
provisions translate to economic security and parity: all monetary
benefits should be equally enjoyed by workers of similar category,
while all monetary obligations should be borne by them in equal
degree; none should be denied the protection of the laws which is
enjoyed by, or spared the burden imposed on, others in like
circumstances.

Laws are presumed constitutional until they are proclaimed by the

court to be otherwise. Generally, the petitioner has the burden of
proof in proving that a statute is unconstitutional. But if the
challenge to the statute is premised on the denial of a fundamental
right, or the perpetuation of prejudice against persons favored by
the Constitution with special protection, it is incumbent upon the
government to prove that there is a compelling state interest for
the denial of such right.

In the present case, the Court dug deep into the records but found
no compelling state interest that the subject clause may possibly
serve.

The Court ruled that the Government has failed to discharge its
burden of proving the existence of a compelling state interest that
would justify the perpetuation of the discrimination against OFWs
under the subject clause.

24
 HANA

Case Title BASES CONVERSION AND DEVELOPMENT AUTHORITY, Petitioner,

vs.
COMMISSION ON AUDIT, Respondent
G.R. No. 178160 February 26, 2009
Fact/s Congress approved Republic Act (RA) No. 7227 creating the Bases
Conversion and Development Authority (BCDA). The Board adopted a new
compensation and benefit scheme which included a P10,000 year-end
benefit granted to each contractual employee, regular permanent
employee, and Board member.

In a memorandum, President Ramos approved the new compensation and

benefit scheme. the full-time consultants of the BCDA also received
the year-end benefit. BCDA officials and employees received a P30,000
year-end benefit, and, on 1 October 2002, the Board passed Resolution
No. 2002-10-193 approving the release of a P30,000 year-end benefit
for 2002. State Auditor IV Corazon V. Españo of the COA issued Audit
Observation Memorandum (AOM) No. 2003-004 stating that the grant of
year-end benefit to Board members was contrary to Department of
Budget and Management (DBM) Circular Letter No. 2002-2. In Notice of
Disallowance (ND) No. 03-001-BCDA-(02), Director IV Rogelio D.
Tablang (Director Tablang), COA, Legal and Adjudication Office-
Corporate, disallowed the grant of year-end benefit to the Board
members and full-time consultants. In Decision, Director Tablang
"concurred" with AOM No. 2003-004 and ND No. 03-001-BCDA-(02). In a
letter, BCDA President and Chief Executive Officer Rufo Colayco
requested the reconsideration of Decision No. 2004-013.

Director Tablang denied the request. The BCDA filed a notice of

appeal with the COA. the COA affirmed the disallowance of the year-
end benefit granted to the Board members and full-time consultants
and held that the presumption of good faith did not apply to them.
Hence, this petition.
Issue/s Whether or not the denial of year-end benefit to the Board members
and full-time consultants violates Section 1, Article III of the
Constitution.

Whether or not the Board members and full-time consultants of the

BCDA are entitled to the year-end benefit.
Ruling/ The petition is PARTIALLY GRANTED. Commission on Audit Decision No.
Decision/ 2007-020 dated 12 April 2007 is AFFIRMED with the MODIFICATION that
Held the Board members and full-time consultants of the Bases Conversion
and Development Authority are not required to refund the year-end
benefits they have already received.

Every presumption should be indulged in favor of the

constitutionality of RA No. 7227 and the burden of proof is on the
BCDA to show that there is a clear and unequivocal breach of the
Constitution. The BCDA failed to show that RA No. 7227 unreasonably
singled out Board members and full-time consultants in the grant of
the year-end benefit. It did not show any clear and unequivocal
breach of the Constitution. The claim that there is no difference
between regular officials and employees, and Board members and full-
time consultants because both groups "have mouths to feed and
25
stomachs to fill" is fatuous. Surely, persons are not automatically
similarly situated — thus, automatically deserving of equal
protection of the laws — just because they both "have mouths to feed
and stomachs to fill". Otherwise, the existence of a substantial
distinction would become forever highly improbable. The Board members
and full-time consultants of the BCDA are not entitled to the yearend
benefit. Section 9 specifies that Board members shall receive a per
diem for every board meeting; limits the amount of per diem to not
more than P5,000; and limits the total amount of per diem for one
month to not more than four meetings. the specification of
compensation and limitation of the amount of compensation in a
statute indicate that Board members are entitled only to the per diem
authorized by law and no other. Members of the Board of Directors of
agencies are not salaried officials of the government. As non-
salaried officials they are not entitled to YEB and retirement
benefits unless expressly provided by law." RA No. 7227 does not
state that the Board members are entitled to a year-end benefit.

26
 HANA

Case Title BUREAU OF FISHERIES AND AQUATIC RESOURCES (BFAR) EMPLOYEES UNION,
REGIONAL OFFICE NO. VII, CEBU CITY, petitioner,
vs.
COMMISSION ON AUDIT, respondent
G.R. No. 169815 August 13, 2008
Fact/s The BFAR Employees Union issued a resolution requesting the BFAR
Central Office for a Food Basket Allowance. It justified its request
on the high cost of living which makes it hard to sustain even the
four basic needs. On post-audit, COA disallowed the grant of Food
Basket Allowance. Petitioners moved for reconsideration and prayed
for the lifting of the disallowance for being unconstitutional as it
contravenes the fundamental principle of the State enshrined under
Sections 9 and 10, Article II of the 1987 Constitution:

Section 9. The State shall promote a just and dynamic social order
that will ensure the prosperity and independence of the nation and
free the people from poverty through policies that provide adequate
social services, promote full employment, a rising standard of
living, and an improved quality of life for all.

Section 10. The State shall promote social justice in all phases of
national development.
Issue/s Is the disallowance in question unconstitutional?
Ruling/ The court denied the petition. The Decision and Resolution of the
Decision/ Commission on Audit – Legal and Adjudication Office dated April 8,
Held 2005 and August 5, 2005, respectively, in LAO-N-2005-119, are
AFFIRMED.

Social justice provisions of the Constitution are not self-executing

principles ready for enforcement through the courts. They are merely
statements of principles and policies giving guidelines for
legislation and that they do not embody judicially enforceable
constitutional rights.

27
 SOPHIANA

Case Title MELCHORA CABANAS, plaintiff-appellee,

vs.
FRANCISCO PILAPIL, defendant-appellant
G.R. No. L-25843 July 25, 1974
Fact/s The lower court applying the appropriate Civil Code provisions
decided in favor of the mother, the plaintiff in this case. Defendant
uncle appealed.

The insured, Florentino Pilapil had a child, Millian Pilapil, with a

married woman, the plaintiff, Melchora Cabanas.
She was ten years old at the time the complaint was... filed on
October 10, 1964.

The defendant, Francisco Pilapil, is the brother of the deceased. The

deceased insured himself and instituted as beneficiary, his child,
with his brother to act as trustee during her minority. Upon his
death, the proceeds were paid to... him. Hence this complaint by the
mother, with whom the child is living, seeking the delivery of such
sum.

Defendant would justify his claim to the retention of the amount in

question by invoking the terms of the... insurance policy.
Issue/s The disputants in this appeal from a question of law from a lower
court decision are the mother and the uncle of a minor beneficiary of
the proceeds of an insurance policy issued on the life of her
deceased father. The dispute centers as to who of them... should be
entitled to act as trustee thereof.
Ruling/ If, as the Constitution so wisely dictates, it is the family unit
Decision/ that has to be strengthened, it does not... admit of doubt that even
Held if a stronger case were presented for the uncle, still deference to a
constitutional mandate would have led the lower court to decide as it
did.

WHEREFORE, the decision of May 10, 1965 is affirmed.Costs against

defendant-appellant.

28
 SOPHIANA

Case Title ELISEO F. SORIANO, Petitioner,

vs.
MA. CONSOLIZA P. LAGUARDIA, in her capacity as Chairperson of the
Movie and Television Review and Classification Board, MOVIE AND
TELEVISION REVIEW AND CLASSIFICATION BOARD, JESSIE L. GALAPON, ANABEL
M. DELA CRUZ, MANUEL M. HERNANDEZ, JOSE L. LOPEZ, CRISANTO SORIANO,
BERNABE S. YARIA, JR., MICHAEL M. SANDOVAL, and ROLDAN A. GAVINO,
Respondents
G.R. No. 164785 April 29, 2009
Fact/s In these two petitions for certiorari and prohibition under Rule 65,
petitioner Eliseo F. Soriano seeks to nullify and set aside an order
and a decision of the Movie and Television Review and Classification
Board (MTRCB) in connection with certain utterances... he made in his
television show, Ang Dating Daan.

After a preliminary conference in which petitioner appeared, the

MTRCB, by Order of August 16, 2004, preventively suspended the
showing of Ang Dating Daan program for 20 days, in accordance with
Section 3(d) of Presidential Decree No. (PD) 1986, creating the
MTRCB, in... relation to Sec. 3, Chapter XIll of the 2004
Implementing Rules and Regulations (IRR) of PD 1986 and Sec. 7, Rule
VII of the MTRCB Rules of Procedure. [5] The same order also set the
case for preliminary investigation.

The following day, petitioner sought reconsideration of the

preventive suspension order, praying that Chairperson Consoliza P.
Laguardia and two other members of the adjudication board recuse
themselves from hearing the case. Two days after,... however,
petitioner sought to withdraw his motion for reconsideration,
followed by the filing with this Court of a petition for certiorari
and prohibition,[8] docketed as G.R. No. 164785, to nullify the
preventive suspension order... thus issued.
Issue/s THE ORDER OF PREVENTIVE SUSPENSION PROMULGATED BY RESPONDENT IMTRCB
DATED 16 AUGUST 2004 AGAINST THE TELEVISION PROGRAM ANG DATING DAAN
IS NULL AND VOID FOR BEING ISSUED WITH GRAVE ABUSE OF DISCRETION
AMOUNTING TO LACK OR EXCESS OF JURISDICTION?

We shall first dispose of the issues in G.R. No. 164785, regarding

It is petitioner's threshold posture that the preventive suspension
imposed against him and the relevant IRR provision authorizing it are
invalid inasmuch as PD 1986 does not expressly authorize the MTRCB to
issue preventive suspension.
Ruling/ WHEREFORE, the decision of the MTRCB in Adm. Case No. 01-04 dated
Decision/ September 27, 2004 is hereby AFFIRMED with the MODIFICATION of
Held limiting the suspension to the program Ang Dating Daan. As thus
modified, the fallo of the MTRCB shall read as follows:

WHEREFORE, in view of all the foregoing, a Decision is hereby

rendered, imposing a penalty of THREE (3) MONTHS SUSPENSION on the
television program, Ang Dating Daan, subject of the instant petition.
Co-respondents Joselito Mallari, Luzviminda Cruz, and UNTV Channel 37
and its owner, PBC, are hereby exonerated for lack of evidence. Costs
against petitioner.
29
Petitioner's contention is untenable.

Administrative agencies have powers and functions which may be

administrative, investigatory, regulatory, quasi-legislative, or
quasi-judicial, or a mix of the five, as may be conferred by the
Constitution or by statute. They have in fine only... such powers or
authority as are granted or delegated, expressly or impliedly, by
law. And in determining whether an agency has certain powers, the
inquiry should be from the law itself. But once ascertained as
existing, the authority given should... be liberally construed.

A perusal of the MTRCB's basic mandate under PD 1986 reveals the

possession by the agency of the authority, albeit impliedly, to issue
the challenged order of preventive suspension. And this authority
stems naturally from, and is necessary for the exercise of, its power
of... regulation and supervision.

The issuance of a preventive suspension comes well within the scope

of the MTRCB's authority and functions expressly set forth in PD
1986, more particularly under its Sec. 3(d), as quoted above, which
empowers the MTRCB to "supervise, regulate, and grant, deny or
cancel, permits... for the xxx exhibition, and/or television
broadcast of all motion pictures, television programs and publicity
materials to the end that no such pictures, programs and materials as
are determined by the BOARD to be objectionable in accordance with
paragraph (c) hereof shall be... × xx exhibited and/or broadcast by
television."
Recall that the MTRCB is expressly empowered by statute to regulate
and supervise television... programs to obviate the exhibition or
broadcast of, among others, indecent or immoral materials and to
impose sanctions for violations and, corollarily, to prevent further
violations as it investigates. Contrary to petitioner's assertion,
the aforequoted Sec. 3 of the IRR... neither amended PD 1986 nor
extended the effect of the law. Neither did the MTRCB, by imposing
the assailed preventive suspension, outrun its authority under the
law. Far from it. The preventive suspension was actually done in
furtherance of the law, imposed pursuant, to repeat,... to the
MTRCB's duty of regulating or supervising television programs,
pending a determination of whether or not there has actually been a
violation. In the final analysis, Sec. 3, Chapter XIlI of the 2004
IRR merely formalized a power which PD 1986 bestowed, albeit...
impliedly, on MTRCB.
Even if we concede that petitioner's remarks are not obscene but merely indecent
speech, still the Court rules that petitioner cannot avail himself of the
constitutional protection of free speech. Said statements were made in a medium
easily accessible to children. With respect... to the young minds, said utterances
are to be treated as unprotected speech.
In ending, what petitioner obviously advocates is an unrestricted speech paradigm in
which absolute permissiveness is the norm. Petitioner's flawed belief that he may
simply utter gutter profanity on television without adverse consequences, under the
guise of free speech, does... not lend itself to acceptance in this jurisdiction. We
repeat: freedoms of speech and expression are not absolute freedoms. To say "any act
that restrains speech should be greeted with furrowed brows" is not to say that any
act that restrains or regulates speech or... expression is per se invalid. This only
recognizes the importance of freedoms of speech and expression, and indicates the
necessity to carefully scrutinize acts that may restrain or regulate speech.
30
 SOPHIANA

Case Title JENIE SAN JUAN DELA CRUZ and minor CHRISTIAN DELA CRUZ "AQUINO,"
represented by JENIE SAN JUAN DELA CRUZ, Petitioners,
vs.
RONALD PAUL S. GRACIA, in his capacity as City Civil Registrar of
Antipolo City, Respondent

G.R. No. 177728 July 31, 2009

Fact/s Jenie was denied the registration of her child's birth because the
document attached to the Affidavit to use the Surname of the Father
(AUSF) entitled "Autobiography," did not include the signature of the
deceased father, and "because he was born out of wedlock and the
father unfortunately died prior to his birth and has no more capacity
to acknowledge his paternity to the child."

Jenie and the child promptly filed a complaint for

injunction/registration of name against Gracia. The trial court held
that even if Dominique, the father, was the author of the unsigned
handwritten Autobiography, the same does not contain any express
recognition of paternity.
Issue/s Whether or not the unsigned handwritten instrument of the deceased
father of minor Christian can be considered as a recognition of
paternity.
Ruling/ WHEREFORE, the petition is GRANTED. The City Civil Registrar of
Decision/ Antipolo City is DIRECTED to immediately enter the surname of the
Held late Christian Dominique Sto. Tomas Aquino as the surname of
petitioner minor Christian dela Cruz in his Certificate of Live
Birth, and record the same in the Register of Births. SO ORDERED.

Yes. Article 176 of the Family Code, as amended by RA 9255, permits

an illegitimate child to use the surname of his/her father if the
latter had previously recognized him/her as his offspring through an
admission made in a pubic of private handwritten instrument.

Article 176, as amended, does not explicitly state that there must be
a signature by the putative father in the private handwritten
instrument.

The following rules respecting the requirement of affixing the

signature of the acknowledging parent in any private handwritten
instrument wherein an admission of filiation of a legitimate or
illegitimate child is made:

1) Where the private handwritten instrument is the lone piece of

evidence submitted to prove filiation, there should be strict
compliance with the requirement that the same must be signed by the
acknowledging parent; and

2) Where the private handwritten instrument is accompanied by other

relevant and competent evidence, it suffices that the claim of
filiation therein be shown to have been made and handwritten by the
acknowledging parent as it is merely corroborative of such other
evidence.

31
 SOPHIANA

Case Title CO KIM CHAM (alias CO KIM CHAM), petitioner,

vs.
EUSEBIO VALDEZ TAN KEH and ARSENIO P. DIZON, Judge of First Instance
of Manila, respondents

G.R. No. L-5 September 17, 1945

Fact/s Petitioner filed a motion for mandamus praying that the respondent
judge be ordered to continue the proceedings in civil case no. 3012,
which was initiated under the regime of the so-called Republic of the
Philippines established during the Japanese military occupation of
the islands.

The respondent judge refused to take cognizance of and continue the

proceedings on the following grounds:

1) The proclamation issued on October 23, 1944 by Gen.

Mac Arthur had the effect of invalidating and nullifying all judicial
proceedings and judgments of the courts of the Philippines under the
Philippine Executive Commission and the Republic established during
the Japanese occupation;

2) The lower courts have no jurisdiction to take cognizance of and

continue judicial proceedings pending in the courts of the defunct
Republic in the absence of enabling law granting such authority;

3) The government established in the Philippines during the Japanese

occupation was not a de facto government.
Issue/s 1. Whether the government established during the Japanese occupation
was a de facto government.

2. Whether the judicial acts and proceedings of the courts existing

in the Philippines under the Philippine Executive Commission and the
Republic of the Philippines were good and valid and remained so even
after the liberation or reoccupation of the Philippines by the US and
Filipino forces.

3. Whether the courts of Commonwealth, which were the same courts

existing prior to and continue during the Japanese military
occupation of the Philippines may continue those proceedings in said
courts at the time the Philippines were reoccupied and liberated by
the US and Filipino forces and the Commonwealth of the Philippines
were reestablished.
Ruling/ In view of all the foregoing it is adjudged and decreed that a writ of
Decision/ mandamus issue, directed to the respondent judge of the Court of First
Held Instance of Manila, ordering him to take cognizance of and continue to final
judgment the proceedings in civil case No. 3012 of said court. No
pronouncement as to costs. So ordered.
1. YES. The government established under the names of Philippine
Executive Commission and Republic of the Philippines during the
Japanese occupation was a civil government and a de facto government
of the second kind: that which is established and maintained by
military forces who invade and occupy a territory of the enemy in the
course of war. The distinguishing characteristics of this kind of de

32
facto government are; (1) that its existence is maintained by active
military power within the territories, and against the rightful
authority of an established and lawful government; and (2) that while
it exists it must necessarily be obeyed in civil matters by private
citizens who, by acts of obedience rendered in submission to such
force, do not become responsible, as wrongdoers, for those acts,
though not warranted by the laws of the rightful government.
2. YES. Being a de facto government, it necessarily follows that the
judicial acts and proceedings of the courts of justice of those
governments, which are not of a political complexion, were good and
valid, and, by virtue of the well-known principle of postliminy in
international law, remained good and valid after the liberation or
reoccupation of the Philippines by the American and Filipino forces.
3. NO. The phrase -processes of any other government is broad and may
refer not only to judicial processes, but also to administrative or
legislative, as well as constitutional processes of the Republic of
the Philippines or other governmental agencies established in the
Islands during the Japanese occupation. Taking into consideration the
fact that, according to the well-known principles of international
law, all judgments and judicial proceedings, which are not of a
political complexion, of the de facto government during the Japanese
occupation were good and valid before and remained so after the
occupied territory had come again into the power of the titular
sovereign, it should be presumed that it was not, and could not have
been, the intention of the Gen. Mac Arthur, in using the phrase -
processes of any government to refer to judicial processes, in
violation of said principles of international law. The only
reasonable construction of the said phrase is that it refers to
governmental processes other than judicial processes, or court
proceedings, for according to a well-known statutory construction,
statute ought never to be constituted to violate the law of phrase -
processes of any government to refer to judicial processes, in
violation of said principles of international law. The only
reasonable construction of the said phrase is that it refers to
governmental processes other than judicial processes, or court
proceedings, for according to a well-known statutory construction,
statute ought never to be construed to violate the law of nations if
any other possible construction remains.
4. YES. Although in theory, the authority of the local civil and
judicial administration is suspended as a matter of course as soon as
military occupation takes place, in practice, the invader does not
usually take the administration of justice into his own hands, but
continues the ordinary courts or tribunals to administer the laws of
the country to which he is enjoined, unless absolutely prevented. If
the proceedings pending in the different courts of the Islands prior
to the Japanese military occupation had been continued during the
Japanese military administration, the Philippine Executive Commission
and the so-called Republic of the Philippines, it stands to reason
the same courts, which become reestablished and conceived of as
having been in continued existence upon the reoccupation and
liberation of the Philippines by virtue of the principle of
postliminy, may continue the proceedings in cases then pending in
said courts, without necessity of enacting laws conferring
jurisdiction upon them to continue said proceedings.

33
 LAQUERRE REY

Case Title LAWYERS LEAGUE FOR A BETTER PHILIPPINES/ OLIVER A. LOZANO, petitioner
vs.
PRES. CORAZON C. AQUINO, et. al, respondent

G.R. No. 73748 May 22, 1986

Fact/s President Corazon Aquino issued Proclamation No. 1 on February 25,
1986 announcing that she and Vice President Laurel were taking power.
On March 25, 1986, proclamation No.3 was issued providing the basis
of the Aquino government assumption of power by stating that the "new
government was installed through a direct exercise of the power of
the Filipino people assisted by units of the New Armed Forces of the
Philippines."

Petitioners alleged that the Aquino government is illegal because it

was not established pursuant to the 1973 Constitution.
Issue/s Whether or not the government of Corazon Aquino is legitimate.
Ruling/ Yes. The legitimacy of the Aquino government is not a justiciable
Decision/ matter but belongs to the realm of politics where only the people are
Held the judge.

The Supreme Court further held that:

 The people have accepted the Aquino government which is in
effective control of the entire country;
 It is not merely a de facto government but in fact and law a de
jure government; and
 The community of nations has recognized the legitimacy of the
new government.

A de jure government is the legal, legitimate government of a state

and is so recognized by other states. In contrast, a de facto
government is in actual possession of authority and control of the
state.

34
 LAQUERRE REY

Case Title NATIONAL DEVELOPMENT COMPANY, represented by its Agents,

THE PHILIPPINE NATIONAL BANK, plaintiff-appellant,
vs.
JOSE YULO TOBIAS, defendant-appellee

G.R. No. L-17467 April 23, 1963

Fact/s Plaintiff NADECO, through agent of PNB, seeks to recover P6,905, plus
interest and attorney‘s fees, against Defendant Tobias, but a motion
to dismiss was filed due to the action upon which the complaint is
based has prescribed long ago, more than ten (10) years has elapsed,
but the plaintiff find it erroneous since they are not covered by
statute of limitations because the same is an instrumentality of the
government.
Issue/s Whether or not the plaintiff is covered by statute of limitation.
Ruling/ In fact, plaintiff was sentenced to pay costs in Batongbacal v.
Decision/ National Development Co. (49 O.G. 229), and National Development Co.
Held vs. CIR, L-13209 (September 30, 1959), despite the fact that "no
costs shall be allowed against the Republic of the Philippines,
unless otherwise provided by Law," pursuant to Rule 131, Section 1,
of the Rules of Court. WHEREFORE, the order appealed from is hereby
affirmed, with the costs of this instance against plaintiff-
appellant.

No. Plaintiff Nadeco does not exercise sovereign powers, rather, an

agency of the government that exercises purely corporate, proprietary
or business functions.

35
 LAQUERRE REY

Case Title THE UNITED STATES, complainant-appellee,

vs.
FRED L. DORR, ET AL., defendants-appellants

G.R. No. 1051 May 19, 1903

Fact/s The defendants have been convicted upon a complaint charging them
with the offense of writing, publishing, and circulating a scurrilous
libel against the Government of the United States and the Insular
Government of the Philippine Islands.

The complaint is based upon section 8 of Act No. 292 of the

Commission, which is as follows:

The alleged libel was published as an editorial in the issue of the

"Manila Freedom"... under the caption of "A few hard facts."...
appointing rascally natives to important Government positions

"There is no doubt but that the Filipino office holders of the

Islands are in a good many instances rascals.

"The Commission has exalted to the highest positions in the islands

Filipinos who are alleged to be notoriously corrupt and rascally, and
men of no personal character.

There can be no such thing as a scurrilous libel, or any sort of a

libel, upon an abstraction like the Government in the sense of the
laws and institutions of a country
Issue/s What is meant in section 8 of Act No. 292 by the expression "the
Insular Government of the Philippine Islands." Does it mean in a
general and abstract sense the existing laws and institutions of the
Islands, or does it mean the aggregate... of the individuals by whom
the Government of the Islands is, for the time being, administered?
Ruling/ The judgment of conviction is reversed and the defendants are
Decision/ acquitted.
Held
"We understand, in modern political science, * * * by the term
government, that institution or aggregate of institutions by which an
independent society makes and carries out those rules of action which
are necessary to enable men to live in a social state, or which...
are imposed upon the people forming that society by those who possess
the power or authority of prescribing them. Government is the
aggregate of authorities which rule a society. By administration,
again, we understand in modern times, and especially in more or
less... free countries, the aggregate of those persons in whose hands
the reins of government are for the time being (the chief ministers
or heads of departments)." (Bouvier, Law Dictionary, 891.

The term "government" would appear to be used here in the... abstract

sense of the existing political system, as distinguished from the
concrete organisms of the Government the Houses of Congress and the
Executive which are also specially mentioned.

36
Upon the whole, we are of the opinion that this is the sense in which
the term is used in the enactment under consideration.

The article in question contains no attack upon the governmental

system of the United States, and it is quite apparent that, though
grossly abusive as respects both the Commission as a body and some of
its individual members, it contains no attack upon the governmental
system... by which the authority of the United States is enforced in
these Islands.

It is the character of the men who are intrusted with the

administration of the government that the writer is seeking to...
bring into disrepute by impugning the purity of their motives, their
public integrity, and their private morals, and the wisdom of their
policy. The publication of the article, therefore, no seditious
tendency being apparent, constitutes no offense under Act No. 292,
section.

37
 LAQUERRE REY

Case Title ANASTACIO LAUREL, petitioner,

vs.
ERIBERTO MISA, respondent

G.R. No. L-409 January 30, 1947

Fact/s A petition for habeas corpus was filed by Anastacio Laurel. He claims
that a Filipino citizen who adhered to the enemy giving the latter
aid and comfort during the Japanese occupation cannot be prosecuted
for the crime of treason defined and penalized by the Article 114 of
the Revised Penal Code on the grounds that the sovereignty of the
legitimate government in the Philippines and consequently the
correlative allegiance of Filipino citizen thereto were then
suspended; and that there was a change of sovereignty over these
Islands upon the proclamation of the Philippines.
Issue/s WHETHER THE ABSOLUTE ALLEGIANCE OF A FILIPINO CITIZEN TO THE
GOVERNMENT BECOMES SUSPENDED DURING ENEMY OCCUPATION.

WHETHER THE PETITIONER IS SUBJECT TO ARTICLE 114 OF THE REVISED PENAL

CODE.
Ruling/ This Court resolves, without prejudice to write later on a more
Decision/ extended opinion, to deny the petitioner's petition, as it is hereby
Held denied, for the reasons above set forth and for others to be stated
in the said opinion, without prejudice to concurring opinion therein,
if any. Messrs. Justices Paras and Hontiveros dissent in a separate
opinion. Mr. justice Perfecto concurs in a separate opinion.

No. The absolute and permanent allegiance of the inhabitants of a

territory occupied by the enemy of their legitimate government or
sovereign is not abrogated (repealed) or severed by the enemy
occupation because the sovereignty of the government or sovereign de
jure is not transferred thereby to the occupier.

(Permanent allegiance is the unending allegiance owed by citizens or

subjects to their states. Generally, a person who owes permanent
allegiance to a state is called a national)

It remains vested in the legitimate government. (Article II, section

1, of the Constitution provides that "Sovereignty resides in the
people and all government authority emanates from them.") What may be
suspended is the exercise of the rights of sovereignty with the
control and government of the territory occupied by the enemy passes
temporarily to the occupant.

The political laws which prescribe the reciprocal rights, duties and
obligation of government and citizens, are suspended in abeyance
during military occupation.

The petitioner is subject to the Revised Penal Code for the change of
form of government does not affect the prosecution of those charged
with the crime of treason because it is an offense to the same
government and same sovereign people.

38
(Art. 114. Treason. — Any person who, owing allegiance to (the United
States or) the Government of the Philippine Islands, not being a
foreigner, levies war against them or adheres to their enemies,
giving them aid or comfort within the Philippine Islands or
elsewhere, shall be punished by reclusion temporal to death and shall
pay a fine not to exceed P20,000 pesos.)

DISSENT: During the long period of Japanese occupation, all the

political laws of the Philippines were suspended. This is full
harmony with the generally accepted principles of the international
law adopted by our Constitution [ Art. II, Sec. 3 ] as part of law of
the nation. The inhabitants of the occupied territory should
necessarily be bound to the sole authority of the invading power
whose interest and requirements are naturally in conflict with those
of displaced government, if it is legitimate for the military
occupant to demand and enforce from the inhabitants such obedience as
may be necessary for the security of his forces, for the maintenance
of the law and order, and for the proper administration of the
country.

39
 YASHIER

Case Title RAMON RUFFY, ET AL., petitioners,

vs.
THE CHIEF OF STAFF, PHILIPPINE ARMY, ET AL., respondents

G.R. No. L-533 August 20, 1946

Fact/s During the Japanese occupation, herein petitioner, Ramon Ruffy, a
Provincial Commander of the Philippine Constabulary, retreated in the
mountains instead of surrendering to the enemy. He organized and led
a guerrilla outfit known as Bolo Combat Team or Bolo Area. The said
Bolo Area was a contingent of the 6th Military District, which has
been recognized and placed under the operational control of the US
Army in the South Pacific. Sometime later, Col. Jurado effected a
change of command in the Bolo Area. Major Ruffy who was then acting
as Commanding Officer for the Bolo Area was relieved of his position.
Later on or on October 19, 1944, Lieut. Col Jurado was slain
allegedly by the petitioners. It was this murder which gave rise to
petitioner‗s trial.

The trial court convicted petitioner and he now filed this instant
petition with the contention that he was not subject to military law
at the time the offense for which he had been placed on trial was
committed. Petitioners contended that by the enemy occupation of the
Philippines, the National Defense Act and all laws and regulations
creating and governing the existence of the Philippine Army including
the Articles of War, were suspended and in abeyance during such
belligerent occupation. He also assailed the constitutionality of 93d
Article of War which provides that ―any person subject to military
law who commits murder in the time of war should suffer death or
imprisonment for life, as the court martial may direct. Petitioner
argued that the said law was in violation of Article VII, section 2
of the Constitution since 93d of Article of War fails to allow a
review by the Supreme Court of judgments of courts martial imposing
death or life imprisonment.
Issue/s Whether petitioner was subject to military law at the time the
alleged offense was committed.

Whether 93d of Articles of War was constitutional.

Ruling/ Our conclusion, therefore, is that the petition has no merit and that
Decision/ it should be dismissed with costs. It is so ordered.
Held
First. YES, petitioner was subject to military law at the time the
alleged offense was committed. The rule that laws of political nature
or affecting political relations are considered superseded or in
abeyance during the military occupation, is intended for the
governing of the civil inhabitants of the occupied territory. It is
not intended for and does not bind the enemies in arms.

By the occupation of the Philippines by Japanese forces, the officers

and men of the Philippine army did not cease to be fully in the
service, though, in a measure, only in measure, they were not subject
to the military jurisdiction, if they were not in active duty. In the
latter case, like officers and soldiers on leave of absence or held
40
as prisoners of war, they could not be held guilty of breach of the
discipline of the command or of a neglect of duty x x x; but for an
act unbecoming of a gentleman or an act which constitutes an offense
of the class specified in the 95th Article of War, they may in
general be legally held subject to military jurisdiction and trial.

Moreover, petitioners, by their acceptance of appointments as

officers in the Bolo Area from the General Headquarters of the 6th
Military District, they became members of the Philippine Army
amenable to the Articles of War. x x x As officers in the Bolo Area
and the 6th Military District, the petitioners operated under the
orders of a duly established and duly appointed commanders of the
United States Army and thus covered by Article 2 of the Articles of
War which provides for persons subject to military law.

Second. YES, 93d of the Articles of War was constitutional. It does

not violate Article VII, section 2 of the Constitution, which
provides that ―the National Assembly may not deprive the Supreme
Court of its original jurisdiction over all criminal cases in which
the penalty imposed is death or life imprisonment. Court Martial are
agencies of executive character, and one of the authorities ―for
ordering of courts martial has been held to be attached to the
constitutional functions of the President as Commander in Chief,
independently of legislation. Unlike courts of law, they are not a
portion of the judiciary.

x x x court martial are in fact simply instrumentalities of the

executive power, provided by Congress for the President as Commander
in Chief, to aid him in properly commanding the army and navy and
enforcing discipline therein, and utilized under his orders or those
of his authorized military representatives.

41
 YASHIER

Case Title WILLIAM F. PERALTA, petitioner,

vs.
THE DIRECTOR OF PRISONS, respondent

G.R. No. L-49 November 12, 1945

Fact/s William Peralta, a member of the Metropolitan Constabulary of Manila
charged with the supervision and control of the production,
procurement and distribution of goods and other necessaries, was
prosecuted for the crime of robbery and was sentenced to life
imprisonment which he commenced to serve on August 21, 1944 as
defined and penalized by Act No. 65 of the National Assembly of the
Republic of the Philippines. The petition for habeas corpus is based
on the contention that the Court of Special and Exclusive Criminal
Jurisdiction created by Ordinance No. 7 was a political
instrumentality of the military forces of Japan and which is
repugnant to the aims of the Commonwealth of the Philippines for it
does not afford fair trial and impairs the constitutional rights of
the accused
Issue/s Whether or not the creation of court by Ordinance No. 7 is
constitutional.

Whether or not the (a) creation of the Court of Special and Exclusive
Criminal Jurisdiction and of the (b) summary procedure adopted for
that court is valid.

Whether or not the sentence which imprisonment during the Japanese

military occupation is valid. If valid, the effect on said punitive
sentence of the reoccupation of the Philippines and the restoration
therein of the Commonwealth Government.
Ruling/ Yes, it is constitutional. There is no room for doubt to the validity
Decision/ of Ordinance No. 7 since the criminal jurisdiction established by the
Held invader is drawn entirely from the law martial as defined in the
usages of nations. It is merely a governmental agency. The sentence
rendered, likewise, is good and valid since it was within the power
and competence of the belligerent occupant to promulgate Act No. 65.
All judgments of political complexion of the courts during Japanese
regime ceased to be valid upon reoccupation of the Islands, as such,
the sentence which convicted the petitioner of a crime of a political
complexion must be considered as having ceased to be valid.

1. Valid. As to the validity of the (a) creation of the Court of

Special and Exclusive Criminal Jurisdiction by Ordinance No. 7, the
only factor to be considered is the authority of the legislative
power which promulgated said law or ordinance. It is well established
in International Law that "The criminal jurisdiction established by
the invader in the occupied territory finds its source neither in the
laws of the conquering or conquered state, — it is drawn entirely
form the law martial as defined in the usages of nations. The
authority derived can be asserted either through special tribunals,
whose authority and procedure is defined in the military code of the
conquering state, or through the ordinary courts and authorities of
the occupied district. The so-called Republic of the Philippines,
being a governmental instrumentality of the belligerent occupant, had
42
therefore the power or was competent to create the Court of Special
and Exclusive Criminal Jurisdiction. No question may arise as to
whether or not a court is of political complexion, for it is mere a
governmental agency charged with the duty of applying the law to
cases falling within its jurisdiction. Its judgments and sentences
may be of political complexion, or not depending upon the nature or
character of the law so applied. There is no room for doubt,
therefore, as to the validity of the creation of the court in
question. With respect to the (b) Summary procedure adopted by
Ordinance No. 7, and followed in the trial of the case which resulted
in the conviction of the herein petitioner, there is also no question
as to the power or competence of the belligerent occupant to
promulgate the law providing for such procedure. For "the invader
deals freely with the relations of the inhabitants of the occupied
territory towards himself.

2. Valid. The validity of the sentence rendered by the Court of

Special and Exclusive Criminal Jurisdiction which imposes life
imprisonment upon the herein petitioner, depends upon the competence
or power of the belligerent occupant to promulgate Act No. 65 which
punishes the crime of which said petitioner was convicted. It was
within the power and competence of the belligerent occupant to
promulgate, through the National Assembly of the so-called Republic
of the Philippines, Act No. 65 of the said Assembly, which penalizes
the crimes of robbery and other offenses by imprisonment ranging from
the maximum period of the imprisonment prescribed by the laws and
ordinances promulgated by the President of the so-called Republic as
minimum, to life imprisonment or death as maximum. Although these
crimes are defined in the Revised Penal Code, they were altered and
penalized by said Act No. 65 with different and heavier penalties, as
new crimes and offenses demanded by military necessity, incident to a
state of war, and necessary for the control of the country by the
belligerent occupant, the protection and safety of the army of
occupation, its support and efficiency, and the success of its
operations. It is, therefore, evident that the sentence rendered by
the Court of Special and Exclusive Criminal Jurisdiction against the
petitioner, imposing upon him the penalty of life imprisonment, was
good and valid, since it was within the admitted power or competence
of the belligerent occupant to promulgate the law penalizing the
crime of which petitioner was convicted.

3. The principle of postliminy upon sentences of the tribunals

continued or created by the belligerent occupant, opines "that
judicial acts done under this control, when they are not of a
political complexion, administrative acts so done, to the extent that
they take effect during the continuance of his control, and the
various acts done during the same time by private persons under the
sanction of municipal law, remain good. Political acts on the other
hand fall through as of course, whether they introduce any positive
change into the organization of the country, or whether they only
suspend the working of that already in existence. The execution also
of punitive sentences ceases as of course when they have had
reference to acts not criminal by the municipal law of the state,
such for example as acts directed against the security or control of
the invader." The punitive sentence under consideration, although
43
good and valid during the military occupation of the Philippines by
the Japanese forces, ceased to be good and valid ipso facto upon the
reoccupation of these Islands and the restoration therein of the
Commonwealth Government. The writ of habeas corpus prayed for is
hereby granted and it is ordered that the petitioner be released
forthwith, without pronouncement as to costs. So ordered.

44
 YASHIER

Case Title ANICETO ALCANTARA, petitioner,

vs.
DIRECTOR OF PRISONS, respondent

G.R. No. L-6 November 29, 1945

Fact/s Aniceto Alcantara was convicted in the CFI Ilocos Sur in Criminal
Case 23for the felony of illegal discharge of firearms with less
serious physical injuries. Upon his appeal, the Court of Appeals of
Northern Luzon in Baguio City modified his sentence to an
indeterminate sentence ranging from 4 mos. and 21 days of arresto
mayor to 3 years, 9 mos. and 3 days of prision correctional.

Petition for writ of habeas corpus by Alcantara on the ground that he

was unduly deprived of liberty due to rendition of the judgment
against him for felony of illegal discharge of firearms with less
serious physical injuries by CFI Ilocos Sur, which was affirmed with
modification by Court of Appeals of Northern Luzon.
Issue/s W/N the Court of Appeals of Northern Luzon had jurisdiction over the
caseof Alcantara, on the ground that it was a validly-created court
(Court of Appeals ofNorthern Luzon was created during the Japanese
occupation) and that it hasauthority to hold sessions in Baguio City,
in relation to Commonwealth Act No. 3?
Ruling/ The petitioner for the writ of habeas corpus is denied.
Decision/
Held The Court held that the sentence served by Alcantara (illegal
discharge of firearms with less serious physical injuries) is an
criminal act that has no political complexion.

A punitive or penal sentence becomes that of a political complexion

when it penalizes either a new act not defined in the municipal laws
or acts already penalized by the latter as a crime against the
legitimate government, but taken out of the territorial law and
penalized as new offense committed against the belligerent occupant.

It cited the case of Co Kim Cham vs Valdez, where the Japanese

Republic (of the Philippines) and the Phil. Executive Commission were
governments de facto and the judicial acts of the courts thereof were
good and valid and remained as such even after the Commonwealth
Government was restored, except those crimes with political
complexion (political crimes).

Also, there was no substantial change in the jurisdiction and

structure of the Court of Appeals when the Japanese-initiated
Republic abolished the pre-World War II Court of Appeals, and
reorganized it into several courts.

45
 YASHIER

Case Title BERNARDITA R. MACARIOLA, complainant,

vs.
HONORABLE ELIAS B. ASUNCION, Judge of the Court of First Instance of
Leyte, respondent

A.M. No. 133-J May 31, 1982

Fact/s A complaint for partition was filled by filed by Sinforosa R. Bales,
Luz R. Bakunawa, Anacorita Reyes, Ruperto Reyes, Adela Reyes, and
Priscilla Reyes, plaintiffs, against Bernardita R. Macariola,
defendant, concerning the properties left by the deceased Francisco
Reyes (Civil Case #3010)

Macariola claims that:

 Sinforosa R. Bales was not a daughter of the deceased;
 the only legal heirs were defendant Macariola and the remaining
plaintiffs as children of the deceased from the second marriage
with Irene Ondes
 the properties left were all conjugal properties from the first
marriage
 those conjugal properties should be partitioned into two parts:
(1) half portion to be adjudicated to Macariola & the remaining
half to be divided equally among the children of the deceased
from two marriages

On June 8, 1963, Judge Asuncion rendered decision on the partition

case and became final for the lack of appeal.

On October 16, 1963, a project of partition signed by the respective

counsel of the plaintiffs and defendant was submitted and was
approved by Judge Asuncion on October 23, 1963.

On March 6, 1965, Dr. Galapon sold Lot 1184-E to Judge Asuncion & his
wife, and was declared by the latter for tax purposes.

On August 31, 1966, spouses of Judge Asuncion & Dr. Galapon conveyed
their respective shares & interest in Lot 1184-E to The Traders
Manufacturing and Fishing Industries, Inc., as Judge Asuncion being
the President.

On August 9, 1968, Macariola filed complaint alleging Judge Asuncion

in violation of Article 1491 (5) of New CivilCode for acquiring Lot
1184-3 as one of the properties in the partition case which was
decided by the latter andArticle 14 of Code of Commerce as he
associated himself with the Traders Manufacturing and Fishing
Industries, Inc.as a stockholder and a ranking officer.

An action is filled against Judge Asuncion in violation against the

following: (1) Article 1491 of New Civil Code -when purchased the Lot
1184-E, a portion of the property involved in partition case which he
presides over and Article 14of Code of Commerce – when he
associated himself with the Traders Manufacturing and Fishing

46
 Industries, Inc. as a stockholder and a ranking officer. The court
held the case at bar: (1) not in violation of Article 1491 (5) as he
purchased the property no longer subject for litigation and brought
it from Dr. Galapon, a party not involved in the partition case and
(2) Article 14 of Code of Commerce has no legal and binding effect
and cannot apply to the respondent since it is a political law, which
is abrogated upon the change of sovereignty.
Issue/s Whether or not Judge Asuncion violated Article 1491 of New Civil Code
& Article 14 of Code of Commerce?
Ruling/ NO. (1) The prohibition of Article 1491 applies only to the sale or
Decision/ assignment of the property that takes place during the pendency of
Held the litigation involving the property.

Though it is true that Judge Asuncion did not violate Article 1491,
it was improper for him to have acquired the same. He should be
reminded of Canon 3 of the Canons of Judicial Ethics. One who
occupies an exalted position in the judiciary has the duty and
responsibility of maintaining the faith and trust of the citizenry in
the courts of justice, so that not only must he be truly honest and
just, but his actuations must be such as not give cause for doubt and
mistrust in the uprightness of his administration of justice.

(2) Article 14 of the Code of Commerce has no legal and binding

effect and cannot apply to the respondent. It is a general principle
of the public law that on acquisition of territory the previous
political relations of the ceded region are totally abrogated.
Article 14 of the Code of Commerce partakes more of the nature of an
administrative law because it regulates the conduct of certain public
officers and employees with respect to engaging in business; hence,
political in essence.

Article 1491. The following persons cannot acquire by purchase, even

at a public or judicial action, either in person or through the
mediation of another: xxx xxx xxx
(5) ―Justices, judges, prosecuting attorneys, clerks of
superior and inferior courts, and other officers and employees
connected with the administration of justice, the property and
rights in litigation or levied upon an execution before the
court within whose jurisdiction or territory they exercise
their respective functions; this prohibition includes the act
of acquiring by assignment and shall apply to lawyers, with
respect to the property and rights which may be the object of
any litigation in which they may take part by virtue of their
profession"

"A judge's official conduct should be free from the appearance of

impropriety, and his personal behavior, not only upon the bench and
in the performance of judicial duties, but also in his everyday life,
should be beyond reproach‖

Article 14 — The following cannot engage in commerce, either in

person or by proxy, nor can they hold any office or have any direct,
administrative, or financial intervention in commercial or industrial
companies within the limits of the districts, provinces, or towns in
which they discharge their duties:
47
 "1. Justices of the Supreme Court, judges and officials of the
department of public prosecution in active service. This
provision shall not be applicable to mayors, municipal judges,
and municipal prosecuting attorneys nor to those who by chance
are temporarily discharging the functions of judge or
prosecuting attorney. xxx xxx xxx
"5. Those who by virtue of laws or special provisions may not
engage in commerce in a determinate territory."

Political Law has been defined as that branch of public law which
deals with the organization and operation of the governmental organs
of the State and define the relations of the state with the
inhabitants of its territory.

It is significant to note that the present Code of Commerce is the

Spanish Code of Commerce of 1885, with some modifications made by
the "Comision de Codificacion de las Provincias de
Ultramar," which was extended to thePhilippines by the Royal
Decree of August 6, 1888, and took effect as law in this jurisdiction
on December 1, 1888.

In conclusion, while respondent Judge Asuncion, now Associate Justice

of the Court of Appeals, did not violate any law in acquiring by
purchase a parcel of land which was in litigation in his court and in
engaging in business by joining a private corporation during his
incumbency as judge of the Court of First Instance of Leyte, he
should be reminded to be more discreet in his private and business
activities, because his conduct as a member of the Judiciary must not
only be characterized with propriety but must always be above
suspicion. WHEREFORE, THE RESPONDENT ASSOCIATE JUSTICE OF THE COURT
OF APPEALS IS HEREBY REMINDED TO BE MORE DISCREET IN HIS PRIVATE AND
BUSINESS ACTIVITIES. SO ORDERED.

48
 ZHARIMAE

Case Title Vilas, petitioner

vs.
City of Manila, respondent

US 345 (1991)
Fact/s Petitioners are creditors of the city of Manila before the cession of
the Philippine Islands to the United States. The Supreme Court of the
Philippine Islands denied relief, holding that the present
municipality is a totally different corporate identity from the
previous one and is not liable for the debts of the Spanish
municipality.

Prior to the incorporation of the City of Manila under the RA No.

183, petitioners Vilas, Trigas and Aguado, were all creditors of the
City of Manila prior to the cession of the Philippines from Spain to
the US thru the Treaty of Paris (December 10, 1898).

After the incorporation, Vilas brought an action to recover the sum

of money owed to him by the City.

The City of Manila that incurred the debts has changed its
sovereignty after the cession of the Philippines to the US by the
Treaty of Paris and its contention now is founded on the theory that
by virtue of the Act No. 183 its liability has been extinguished.

The Philippine Supreme Court denied relief, holding that the present
municipality is a totally different corporate entity, and in no way
liable for the debts of the Spanish municipality.

In dismissing that Trigas case, the CFI suggested that Trigas may
have a ―claim against the Crown of Spain which has received from the
United States payment for that done by the plantiff‖

The petitioner appealed to the US Supreme Court.

Issue/s W/N Municipality is liable for obligations incurred prior to cession?
Ruling/ YES. The contention that the liability of the city upon such
Decision/ obligations was destroyed by a mere change of sovereignty is one
Held which is without a shadow of moral force. The city, acting as a
corporation, possesses two kinds of powers: governmental and public.
In view of the dual character of municipal corporations, there is no
public reason for the presuming their total dissolution as a
consequence of military occupation or territorial cession. The
cession did not operate as an extinction or dissolution of
corporations. The present city is, in every legal sense, the
successor of the old. As such, it is entitled to the property and
property rights of the predecessor corporation, and is, in law,
subject to all of its liabilities. All three of plaintiffs in error
are entitled to judgment.

It is a general rule of public law that whenever political

jurisdiction and legislative power over any territory are transferred
from one nation or sovereign to another, the municipal laws of the
49
country -- that is, laws which are intended for the protection of
private rights -- continue in force until abrogated or changed by the
new government or sovereign.

By the cession, public property passes from one government to the

other, but private property remains as before, and with it those
municipal laws which are designed to secure its peaceful use and
enjoyment.

As a matter of course, all laws, ordinances and regulations in

conflict with the political character, institutions, and constitution
of the new government are at one displaced. Thus, upon a cession of
political jurisdiction and legislative power to the United States,
the laws of the country in support of an established religion, or
abridging the freedom of the press, or authorizing cruel and unusual
punishments, and the like, would at once cease to be of obligatory
force without any declaration to that effect, and the laws of the
country on other subjects would necessarily be superseded by existing
laws of the new government upon the same matters.

But with respect to other laws affecting the possession, use and
transfer of property, and designed to secure good order and peace in
the community and promote its health and prosperity, which are
strictly of a municipal character, the rule is general that a change
of government leaves them in force until, by direct action of the new
government, they are altered or repealed.

50
 ZHARIMAE

Case Title Sister Albertina Kawananokoa, et.al complainant-appellee,

vs.
Polybank, defendants-appellants

205 U.S. 349 (1907)

Fact/s
Polybank executed a mortgage to the appellee, Sister Albertina
Kawananokoa. Polybank pleaded that, after the execution of the
mortgage, a part of the mortgaged land had been conveyed by them to
one Damon, and by Damon to the Territory of Hawaii, and was now part
of a public street.

The bill originally made the territory of Hawaii a party, but the
territory demurred and the plaintiffs dismissed their bill as to it
before the above plea was argued.

Polybank‘s plea was overruled, and after answer and hearing, the
decree of foreclosure was made. The decree excepted from the sale the
land conveyed to the territory, and directed a judgment for the sum
remaining due in case the proceeds of the sale were insufficient to
pay the debt. (Eq.Rule 92)

Polybank appealled from the decree. Polybank contended that the

owners of the equity of redemption (Kawanakoa and the Territory of
Hawaii) in all parts of the mortgage land must be joined, and that no
deficiency judgment should be entered until all the mortgage premises
have been sold. In aid of their contention they argue that Territory
of Hawaii is liable to suit like a municipal corporation,
irrespective of the permission given by its statutes, which does not
extend to this case. They liken the territory of Hawaii to the
District of Columbia, (Metropolitan R. Co. v. District of Columbia,
132 U. S. 1), and point out that it has been a party to suits that
have been before this Court.
Issue/s WON the Territory of Hawaii is liable for suit.
Ruling/ The territory could waive its exemption, (Smith v. Reeves, 178 U. S.
Decision/ 436) and take no objection to the proceedings. But, in the case at
Held bar, the territory of Hawaii did object, and the question raised is
whether the plaintiffs were bound to yield. Some doubts have been
expressed as to the source of the immunity of a sovereign power from
suit without its own permission, but the answer has been public
property since before the days of Hobbes. Leviathan A sovereign is
exempt from suit not because of any formal conception or obsolete
theory, but on the logical and practical ground that there can be no
legal right as against the authority that makes the law on which the
right depends. "Car on peut bien recevoir loy d'autruy, mais il est
impossible par nature dese donner loy."

As the ground is thus logical and practical, the doctrine is not

confined to powers that are sovereign in the full sense of juridical
theory, but naturally is extended to those that, in actual
administration, originate and change at their will the law of
contract and property, from which persons within the jurisdiction
51
derive their rights.

A suit presupposes that the defendants are subject to the law

invoked. Of course, it cannot be maintained unless they are so. But
that is not the case with a territory of the United States, because
the territory itself is the fountain from which rights ordinarily
flow.

It is true that Congress might intervene, just as, in the case of a

state, the Constitution does, and the power that can alter the
Constitution might. But the rights that exist are not created by
Congress or the Constitution, except to the extent of certain
limitations of power. The District of Columbia is different, because
there the body of private rights is created and controlled by
Congress, and not by a legislature of the District. But, for the
Territory of Hawaii, it is enough to refer to the organic act.

However it might be in a different case, when the inability to join

all parties and to sell all the land is due to a conveyance by the
mortgagor directly or indirectly to the territory, the court is not
thereby deprived of ability to proceed. Decree affirmed.

52
 ZHARIMAE

Case Title PEDRO SYQUIA, GONZALO SYQUIA, and LEOPOLDO SYQUIA, petitioners,
vs.
NATIVIDAD ALMEDA LOPEZ, Judge of Municipal Court of Manila, CONRADO
V. SANCHEZ, Judge of Court of First Instance of Manila, GEORGE F.
MOORE, ET AL., respondents

G.R. No. L-1648 August 17, 1949

Fact/s 1. About the middle of the year 1945, plaintiffs executed three lease
contracts, one for each of the three apartments, in favor of the
United States of America for billeting and quartering officers of the
U.S. armed forces. The term or period for the three leases was to be
for the duration of the war and six months thereafter, unless sooner
terminated by the United States of America.

2. In March 1947, when these court proceedings were commenced, George

F. Moore was the Commanding General of the US Army and was said to
control the occupancy of the said apartment houses and had authority
in the name of the US Government to assign officers of the US Amy to
said apartments or to order said officers to vacate the same. Erland
Tillman was the Chief, Real Estate Division, who, under the command
of defendant Moore was in direct charge and control of the lease and
occupancy of said three apartment buildings. Defendant Moore and
Tillman themselves did not occupy any part of the premises.

3. When Japan surrendered on September 2, 1945, the lease would be

terminated six months after. On May 11, 1946, said plaintiffs
requested the predecessors in office of Moore and Tillman to
renegotiate said leases, execute lease contract for a period of three
years and to pay a reasonable rental higher than those payable under
the old contracts. The predecessors in office of Moore in a letter
dated June 6, 1946, refused to execute new leases but advised that
"it is contemplated that the United States Army will vacate subject
properties prior to 1 February 1947." 4. Petitioner-plaintiffs sued
before the Municipal Court of Manila with the demand to get the
properties as their agreement supposedly expired, and furthermore
asked for increased rentals until the premises were vacated.
Issue/s Whether or not the court has jurisdiction over the defendants and
over the subject matter of the action.

Whether or not this is a suit against the United States of America.

Ruling/ First. The court had no jurisdiction over the defendants and over the
Decision/ subject matter of the action, because the real party in interest was
Held the U.S. Government and not the individual defendants named in the
complaint. Under the well settled rule of International Law, a
foreign government like the United States Government cannot be sued
in the courts of another state without its consent; that it was clear
from the allegations of the complaint that although the United States
of America has not been named therein as defendant, it is
nevertheless the real defendant in this case, as the parties named as
defendants are officers of the United States Army and were occupying
the buildings in question as such and pursuant to orders received
from that Government.

53
First. The present action must be considered as one against the U. S.
Government. It is clear that the courts of the Philippines including
the Municipal Court of Manila have no jurisdiction over the present
case for unlawful detainer. The U. S. Government has not given its
consent to the filing of this suit which is essentially against her,
though not in name. Moreover, this is not only a case of a citizen
filing a suit against his own Government without the latter's consent
but it is of citizen filing an action against a foreign government
without said government's consent, which renders more obvious the
lack of jurisdiction of the courts of his country.

In conclusion we find that the Municipal Court of Manila committed no

error in dismissing the case for lack of jurisdiction and that the
Court of First Instance acted correctly in affirming the municipal
court's order of dismissal. Case dismissed, without pronouncement as
to costs. OTHER NOTES Where the judgment in such a case would result
not only in the recovery of possession of the property in favor of
said citizen but also in a charge against or financial liability to
the Government, then the suit should be regarded as one against the
government itself, and, consequently, it cannot prosper or be validly
entertained by the courts except with the consent of said Government.

DOCTRINE UNDER THE STATE IMMUNITY Under the rule of International

Law, a foreign government like the United Stated Government cannot be
sued in the courts of another state without its consent.

54
 ZHARIMAE

Case Title CHINA NATIONAL MACHINERY & EQUIPMENT CORP. (GROUP), Petitioner,
vs.
HON. CESAR D. SANTAMARIA, in his official capacity as Presiding Judge
of Branch 145, Regional Trial Court of Makati City, HERMINIO HARRY L.
ROQUE, JR., JOEL R. BUTUYAN, ROGER R. RAYEL, ROMEL R. BAGARES,
CHRISTOPHER FRANCISCO C. BOLASTIG, LEAGUE OF URBAN POOR FOR ACTION
(LUPA), KILUSAN NG MARALITA SA MEYCAUAYAN (KMM-LUPA CHAPTER), DANILO
M. CALDERON, VICENTE C. ALBAN, MERLYN M. VAAL, LOLITA S. QUINONES,
RICARDO D. LANOZO, JR., CONCHITA G. GOZO, MA. TERESA D. ZEPEDA,
JOSEFINA A. LANOZO, and SERGIO C. LEGASPI, JR., KALIPUNAN NG DAMAYANG
MAHIHIRAP (KADAMAY), EDY CLERIGO, RAMMIL DINGAL, NELSON B. TERRADO,
CARMEN DEUNIDA, and EDUARDO LEGSON, Respondents

G.R. No. 185572 February 7, 2012

Fact/s CNMEG entered into a Contract Agreement with the North Luzon Railways
Corporation regarding the construction of the Northrail Project.
Subsequently, a Memorandum of Understanding between the EXIM Bank
(China) and the Department of Finance where China agreed to extend
Preferential Buyers Credit to the Philippine Government for the
Northrail Project. Respondents then filed a civil case against the
parties on the basis that the Contract and Loan Agreement are
unconstitutional. RTC Br. 145 issued an order setting the case for
hearing. CNMEG then filed a motion for reconsideration on the grounds
that the RTC does not have jurisdiction over its person because it
was an agent of the Chinese government and that it was immune from
suit.
Issue/s Whether or not CNMEG is entitled to immunity from suit.

Whether or not the Contract Agreement is an executive agreement

Ruling/ CNMEG is not entitled to immunity from suit. Its main purpose when it
Decision/ entered into an agreement in the Philippines was of a proprietary
Held venture and not one to function with its sovereign powers. An entity
must only be granted immunity from suit if it has acted pursuant to
the functions set by its sovereign state.

The Contract Agreement is not an executive agreement. An executive

agreement is one that allows for it to be regarded as a treaty,
subjecting it to international law. It is clear that when CNMEG and
the North Luzon Railways Corporation entered into agreement, both
parties were not recognized as states. To be recognized as states is
a requisite for an executive agreement and in the case at bar, the
aforementioned were not.

WHEREFORE, the instant Petition is DENIED. Petitioner China National

Machinery & Equipment Corp. (Group) is not entitled to immunity from
suit, and the Contract Agreement is not an executive agreement.
CNMEG’s prayer for the issuance of a TRO and/or Writ of Preliminary
Injunction is DENIED for being moot and academic. This case is
REMANDED to the Regional Trial Court of Makati, Branch 145, for
further proceedings as regards the validity of the contracts subject
of Civil Case No. 06-203. No pronouncement on costs of suit.

55
 SAYFUR

Case Title AIR TRANSPORTATION OFFICE, Petitioner,

vs.
SPOUSES DAVID* ELISEA RAMOS, Respondents

G.R. No. 159402 February 23, 2011

Fact/s Spouses David and Elisea Ramos (respondents) discovered that a
portion of their land registered under Transfer Certificate of Title
No. T-58894 of the Baguio City land records with an area of 985
square meters, was used for Loakan Airport being operated by
petitioner Air Transportation Office (ATO). On August 11, 1995, the
respondents agreed after negotiations to convey the affected portion
by deed of sale to the ATO in consideration of the amount of
P778,150.00. However, the ATO failed to pay despite repeated verbal
and written demands.

Thus, on April 29, 1998, the respondents filed an action for

collection against the ATO. In their answer, the ATO and its co-
defendants invoked as defense the issuance of President Marcos that
had reserved certain parcels of land that included the respondents‘
affected portion for use of the Loakan Airport, that the RTC had no
jurisdiction to entertain the action without the State‘s consent
considering that the deed of sale had been entered into in the
performance of governmental functions.

On November 10, 1998, the RTC denied the ATO‘s motion for a
preliminary hearing of the affirmative defense. After the RTC
likewise denied the ATO‘s motion for reconsideration on December 10,
1998, the ATO commenced a special civil action for certiorari in the
CA to assail the RTC‘s orders. The CA dismissed the petition for
certiorari, however, upon its finding that the assailed orders were
not tainted with grave abuse of discretion.

Subsequently, February 21, 2001, the RTC rendered its decision in

favor of the spouses Ramos. Hence, the appeal by petition for review
on certiorari.
Issue/s The only issue presented for resolution is whether the ATO could be
sued without the State‘s consent.
Ruling/ The petition for review has no merit. WHEREFORE, the Court denies the
Decision/ petition for review on certiorari, and affirms the decision
Held promulgated by the Court of Appeals.No pronouncement on costs of
suit. SO ORDERED.

The immunity of the State from suit, known also as the doctrine of
sovereign immunity or non-suability of the State, is expressly
provided in Article XVI of the 1987 Constitution, viz: Section 3. The
State may not be sued without its consent.

The immunity from suit is based on the political truism that the
State, as a sovereign, can do no wrong. Moreover, a sovereign is
exempt from suit, not because of any formal conception or obsolete
theory, but on the logical and practical ground that there can be no
legal right as against the authority that makes the law on which the
56
right depends.

Practical considerations dictate the establishment of an immunity

from suit in favor of the State. Otherwise, and the State is suable
at the instance of every other individual, government service may be
severely obstructed and public safety endangered because of the
number of suits that the State has to defend against.

According to Father Bernas, a recognized commentator on

Constitutional Law, to wit: [A] continued adherence to the doctrine
of non-suability is not to be deplored for as against the
inconvenience that may be caused private parties, the loss of
governmental efficiency and the obstacle to the performance of its
multifarious functions are far greater if such a fundamental
principle were abandoned and the availability of judicial remedy
were not thus restricted. With the well-known propensity on the part
of our people to go to court, at the least provocation, the loss of
time and energy required to defend against law suits, in the absence
of such a basic principle that constitutes such an effective
obstacle, could very well be imagined.

An unincorporated government agency without any separate juridical

personality of its own enjoys immunity from suit because it is
invested with an inherent power of sovereignty. Accordingly, a claim
for damages against the agency cannot prosper; otherwise, the
doctrine of sovereign immunity is violated.

The need to distinguish between an unincorporated government agency

performing governmental function and one performing proprietary
functions has arisen. The immunity has been upheld in favor of the
former because its function is governmental or incidental to such
function; It has not been upheld in favor of the latter whose
function was not in pursuit of a necessary function of government
but was essentially a business.

Contrary to appellants‘ conclusions, it was not merely the collection

of landing and parking fees which was declared as proprietary in
nature by the High Court in Teodoro, but management and maintenance
of airport operations as a whole, as well. Thus, in the much later
case of Civil Aeronautics Administration vs. Court of Appeals (167
SCRA 28 [1988]), the Supreme Court, reiterating the pronouncements
laid down in Teodoro, declared that the CAA (predecessor of ATO) is
an agency not immune from suit, it being engaged in functions
pertaining to a private entity. It went on to explain in this wise:
The Civil Aeronautics Administration comes under the category of a
private entity. Although not a body corporate it was created, like
the National Airports Corporation, not to maintain a necessary
function of government, but to run what is essentially a business,
even if revenues be not its prime objective but rather the promotion
of travel and the convenience of the travelling public. It is
engaged in an enterprise which, far from being the exclusive
prerogative of state, may, more than the construction of public
roads, be undertaken by private concerns. [National Airports Corp. v.
Teodoro, supra, p. 207.] in Republic Act 776, Sec. 32(24) and (25),
it can be seen that the CAA is tasked with private or non-
57
governmental functions which operate to remove it from the purview of
the rule on State immunity from suit. For the correct rule as set
forth in the Teodoro case states:

Suits against State agencies with relation to matters in which they

have assumed to act in private or non-governmental capacity, and
various suits against certain corporations created by the state for
public purposes, but to engage in matters partaking more of the
nature of ordinary business rather than functions of a governmental
or political character, are not regarded as suits against the state.
The latter is true, although the state may own stock or property of
such a corporation for by engaging in business operations through a
corporation, the state divests itself so far of its sovereign
character, and by implication consents to suits against the
corporation. (59 C.J., 313) [National Airports Corporation v.
Teodoro, supra, pp. 206-207]

Accordingly, as the CAA was created to undertake the management of

airport operations which primarily involve proprietary functions, it
cannot avail of the immunity from suit accorded to government
agencies performing strictly governmental functions.

Lastly, the issue of whether or not the ATO could be sued without the
State‘s consent has been rendered moot by the passage of Republic
Act No. 9497, otherwise known as the Civil Aviation Authority Act of
2008.

With the CAAP having legally succeeded the ATO pursuant to R.A. No.
9497, the obligations that the ATO had incurred by virtue of the
deed of sale with the Ramos spouses might now be enforced against
the CAAP.

58
 SAYFUR

Case Title DEUTSCHE GESELLSCHAFT FÜR TECHNISCHE ZUSAMMENARBEIT, also known as

GERMAN AGENCY FOR TECHNICAL COOPERATION, (GTZ) HANS PETER PAULENZ and
ANNE NICOLAY, Petitioners,
vs.
HON. COURT OF APPEALS, HON. ARIEL CADIENTE SANTOS, Labor Arbiter of
the Arbitration Branch, National Labor Relations Commission, and
BERNADETTE CARMELLA MAGTAAS, CAROLINA DIONCO, CHRISTOPHER RAMOS,
MELVIN DELA PAZ, RANDY TAMAYO and EDGARDO RAMILLO, Respondents

G.R. No. 152318 April 16, 2009

Fact/s The Federal Republic of Germany and the Republic of the Philippines
ratified and agreement which lead to the Social Health Insurance -
Networking and Empowerment (SHINE) program wherein the program seeks
to provide health care to Filipino families' especially the poor.
The Republic of Germany assigned the GTZ as the implementing
corporation for the program, while the Philippines designated the
Department of Health and the Philippine Health Insurance Corporation.
Private respondents, as employed by GTZ for the implementation of the
SHINE had a misunderstanding with the Project manager of SHINE. This
lead to an exchange of letters which was interpreted to be the
resignation of the private respondents. Private respondents then
filed a complaint for illegal dismissal to the labor arbiter. GTZ
contends that it is immune from suit as it is the accredited agency
of the Federal Republic of Germany.
Issue/s Whether or not GTZ can invoke State immunity from suit.
Ruling/ WHEREFORE, the petition is DENIED. No pronouncement as to costs. SO
Decision/ ORDERED.
Held
NO, GTZ cannot invoke State immunity from suit even if their
activities performed pertaining to SHINE project are government in
nature. The principle of state immunity from suit, whether a local
state or a foreign state, is reflected in Section 9, Article XVI of
the Constitution, which states that the State may not be sued
without its consent. In this case, GTZ’s counsel described GTZ as
the implementing agency of the Government of the Federal Republic of
Germany, however it does not automatically mean that it has the
ability to invoke State immunity from suit. They had failed to
adduce evidence, a certification from Department of Foreign Affairs
which could have been their factual basis for its claim of immunity.
At the same time, it appears that GTZ was actually organized not
through a legislative public charter, but under private law, in the
same way that Philippine corporations can be organized under the
Corporation Code even if fully owned by the Philippine government.
The apparent equivalent under Philippine law is that of a corporation
organized under the Corporation Code but owned by the Philippine
government, or a government-owned or controlled corporation (GOCC)
without original charter. And it bears notice that Section 36 of the
Corporate Code states that every corporation incorporated under this
Code has the power and capacity to sue and be sued in its corporate
name.

The Court is thus holds and so rules that GTZ consistently has been
59
unable to establish with satisfaction that it enjoys the immunity
from suit generally enjoyed by its parent country, the Federal
Republic of Germany. The nature of the acts performed by the entity
invoking immunity remains the most important barometer for testing
whether the privilege of State immunity from suit should apply. At
the same time, our Constitution stipulates that a State immunity
from suit is conditional on its withholding of consent; hence, the
laws and circumstances pertaining to the creation and legal
personality of an instrumentality or agency invoking immunity remain
relevant. Consent to be sued, as exhibited in this decision, is
often conferred by the very same statute or general law creating the
instrumentality or agency.

60
 SAYFUR

Case Title DALE SANDERS, AND A.S. MOREAU, JR, petitioners,

vs.
HON. REGINO T. VERIDIANO II, as Presiding Judge, Branch I, Court of
First Instance of Zambales, Olongapo City, ANTHONY M. ROSSI and RALPH
L. WYERS, respondents

G.R. No. L-46930 June 10, 1988

Fact/s Private respondents Anthony Rossi and Ralph Wyers (deceased) were
both employed as game room attendants in the special services
department of the US Naval Station (NAVSTA). They were advised that
their employment had been converted from permanent full-time to
permanent part-time. Their reaction was to protect the conversion
and to institute grievance proceedings. The hearing officer
recommended the reinstatement of private respondents to permanent
full-time status plus back wages.

In a letter addressed to petitioner Moreau, Commanding Officer of

Subic Naval Base, petitioner Sanders, Special Services Director of
NAVSTA, disagreed with the recommendation and asked for its
rejection.

Moreau, even before the start of the grievance hearings, sent a

letter to the Chief of Naval Personnel explaining the change of the
private respondent‗s status and requested concurrence therewith.
Private respondents filed suit for damages claiming that the letters
contained libelous imputations that had exposed them to ridicule and
had caused them mental anguish, and prejudgment of the grievance
proceedings was an invasion of their personal and proprietary rights.
They make it clear that petitioners were being sued in their
personal capacity. A motion to dismiss on the ground of lack of
jurisdiction was filed by the petitioner and was denied.
Issue/s Were the petitioners performing their official duties when they did
the acts for which they are being sued for damages?
Ruling/ YES. It is clear in the present case that the acts for which the
Decision/ petitioners are being called to account were performed by them in
Held the discharge of their official duties. Sanders as director of the
special services department of NAVSTA, undoubtedly had supervision
over its personnel including the private respondents and had a hand
in their employment, work, assignments, discipline, dismissal and
other related matters. The act of Moreau is deadly official in
nature, performed by him as the immediate superior of Sanders and
directly answerable to Naval Personnel in matters involving the
special department of NAVSTA.

WHEREFORE, the petition is GRANTED. The challenged orders dated March

8,1977, August 9,1977, and September 7, 1977, are SET ASIDE. The
respondent court is directed to DISMISS Civil Case No. 2077-O. Our
Temporary restraining order of September 26,1977, is made PERMANENT.
No costs. SO ORDERED.

61
 SAYFUR

Case Title G.R. No. L-20213 January 31, 1966

MARIANO E. GARCIA, plaintiff-appellant,

vs.
THE CHIEF OF STAFF and THE ADJUTANT GENERAL, ARMED FORCES OF THE
PHILIPPINES and/or THE CHAIRMAN, PHILIPPINE VETERANS BOARD and/or THE
AUDITOR GENERAL OF THE PHILIPPINES, defendants-appellees
Fact/s The plaintiff filed with the Court of First Instance of Pangasinan,
an action to collect a sum of money against the above defendants. He
suffered injuries while undergoing a 10-month military training at
Camp Floridablanca, Pampanga. He filed a claim under Commonwealth Act
400 and in April 1957 with the Adjutant General‘s Office which later
disallow his claim for disability benefit. After further demands of
the plaintiff, the same Adjutant General‘s Office denied the claim,
alleging that the Commonwealth Act 400 had already been repealed by
RA 610 which took effect January 1, 1950. That by the reason of the
injuries suffered by plaintiff, he was deprived of his sight or
vision rendering him permanently disabled; and by the reason of
unjustified refusal of defendants on the claim, plaintiff was
deprived of his disability pension from July 1948 totalling no less
than P4,000 at the rate of P20/mo and suffered moral damages and
attorney‘s fees the amount of P2,000. The Philippine Veterans
Administration and the Chief of Staff of AFP file separate motions to
dismiss the complaint on the grounds that the court has no
jurisdiction over the subject matter of the complaint; that the
plaintiff failed to exhaust all administrative remedies before coming
to court; that the complaint states no cause of action; and that the
cause of action is barred by the statute of limitations. Acting on
the said Motion, the Court of First Instance, on March 2, 1962,
rendered an order dismissing the complaint on the ground that action
has prescribed. Motion for reconsideration of the said order having
been denied, the plaintiff has interposed this appeal.
Issue/s Whether or not the lower court is right in dismissing the complaint.
Ruling/ The SC uphold the order of dismissal for the simple reason that the
Decision/ Court of First Instance has no jurisdiction over the subject matter,
Held it being a money claim against the government. It was already held
in the case of New Manila Lumber vs. Republic in L-14248, 4/28/60,
that a claim for the recovery of money against the government should
be filed with the Auditor General, in line with the principle that
the State cannot be sued without its consent.

Commonwealth Act 327 provides:

Section 1. In all cases involving the settlement of accounts or claims, other than
those of accountable officers, the Auditor General shall act and decide the same
within 60 days, exclusive of Sundays and holidays after their presentation….

Section 2. The party aggrieved by the final decision of the Auditor General in the
settlement of an account or claim, may within 30 days from receipt of decision, take
an appeal in writing to (c) the Supreme Court, if the appellant is a private person
or entity.
The well-established rule that no recourse to court can be had until all
administrative remedies had been exhausted and that actions against
administrative officers should not be entertained if superior administrative
officer could grant relief is applicable to this case. The order dismissing
the complaint is hereby affirmed, without pronouncement as to costs.
62
 ALDIN

Case Title G.R. No. 171182 August 23, 2012

UNIVERSITY OF THE PHILIPPINES, JOSE V. ABUEVA, RAUL P. DE GUZMAN,

RUBEN P. ASPIRAS, EMMANUEL P. BELLO, WILFREDO P. DAVID, CASIANO S.
ABRIGO, and JOSEFINA R. LICUANAN, Petitioners,
vs.
HON. AGUSTIN S. DIZON, his capacity as Presiding Judge of the
Regional Trial Court of Quezon City, Branch 80, STERN BUILDERS, INC.,
and SERVILLANO DELA CRUZ, Respondents
Fact/s The UP, through its then President Jose V. Abueva, entered into a
General Construction Agreement with respondent Stern Builders
Corporation (Stern Builders), for the construction of the extension
building and the renovation of the College of Arts and Sciences
Building in the campus of the University of the Philippines in Los
Baños (UPLB).

In the course of the implementation of the contract, Stern Builders

submitted three progress billings corresponding to the work
accomplished, but the UP paid only two of the billings. The third
billing worth P273,729.47 was not paid due to its disallowance by the
Commission on Audit (COA). Despite the lifting of the disallowance,
the UP failed to pay the billing, prompting Stern Builders and dela
Cruz to sue the UP and its co-respondent officials to collect the
unpaid billing and to recover various damages (actual and moral) and
attorney‘s fees.

After trial, the RTC rendered its decision in favor of the

plaintiffs. Following the RTC‘s denial of its motion for
reconsideration, UP filed a notice of appeal. The RTC denied due
course to the notice of appeal for having been filed out of time and
granted the private respondents‘ motion for execution. The RTC issued
the writ of execution and the sheriff of the RTC served the writ of
execution and notice of demand upon the UP. The UP filed an urgent
motion to reconsider the order, to quash the writ of execution and to
restrain the proceedings.

However, the RTC denied the urgent motion. UP assailed the denial of
due course to its appeal through a petition for certiorari in the
Court of Appeals but the latter dismissed the petition for certiorari
upon finding that the UP‘s notice of appeal had been filed late. The
UP sought a reconsideration, but the CA denied the UP‘s motion for
reconsideration. The UP appealed to the Court by petition for review
on certiorari. The Court denied the petition for review. The UP moved
for the reconsideration of the denial of its petition for review but
the Court denied the motion which denial became final and executory.

In the meanwhile that the UP was exhausting the available remedies to

overturn the denial of due course to the appeal and the issuance of
the writ of execution, Stern Builders and dela Cruz filed in the RTC
their motions for execution despite their previous motion having
already been granted and despite the writ of execution having already
issued. The RTC granted another motion for execution filed. The
sheriff served notices of garnishment on the UP‘s depository banks.
63
 The UP assailed the garnishment through an urgent motion to quash the
notices of garnishment; and a motion to quash the writ of execution
but was denied by the RTC. UP moved for the reconsideration of the
order but was denied by the same court.

On their part, Stern Builders and dela Cruz filed their ex parte
motion for issuance of a release order which the RTC granted and
authorized the release of the garnished funds of the UP. The UP
brought a petition for certiorari in the CA to challenge the
jurisdiction of the RTC in issuing the order of December 21, 2004.
While pending resolution, CA issued a temporary restraining order
(TRO) upon application by the UP.

In its decision CA dismissed the UP‘s petition for certiorari, ruling

that the UP had been given ample opportunity to contest the motion to
direct the DBP to deposit the check in the name of Stern Builders and
dela Cruz; and that the garnished funds could be the proper subject
of garnishment because they had been already earmarked for the
project, with the UP holding the funds only in a fiduciary capacity.
After the CA denied their motion for reconsideration on December 23,
2005, the petitioners appealed by petition for review.
Issue/s 1. Whether the funds of the UP were the proper subject of garnishment
in order to satisfy the judgment award.

2. Whether the UP‘s prayer for the deletion of the awards of actual
damages, moral damages and attorney‘s fees could be granted despite
the finality of the judgment of the RTC.
Ruling/ Despite its establishment as a body corporate, the UP remains to be a
Decision/ ―chartered institution‖ performing a legitimate government function.
Held The UP is a government instrumentality, performing the State‘s
constitutional mandate of promoting quality and accessible education.

As a government instrumentality, the UP administers special funds

sourced from the fees and income enumerated under Act No. 1870 and
Section 1 of Executive Order No. 714, and from the yearly
appropriations, to achieve the purposes laid down by Section 2 of Act
1870, as expanded in Republic Act No. 9500.

All the funds going into the possession of the UP, including any
interest accruing from the deposit of such funds in any banking
institution, constitute a ―special trust fund,‖ the disbursement of
which should always be aligned with the UP‘s mission and purpose, and
should always be subject to auditing by the COA. The funds of the UP
are government funds that are public in character. T

hey include the income accruing from the use of real property ceded
to the UP that may be spent only for the attainment of its
institutional objectives. Hence, the funds subject of this action
could not be validly made the subject of writ of execution or
garnishment.

The adverse judgment rendered against the UP in a suit to which it

had impliedly consented was not immediately enforceable by execution
against the UP, because suability of the State did not necessarily
mean its liability.
64
WHEREFORE, the Court GRANTS the petition for review on
certiorari; REVERSES and SETS ASIDE the decision of the Court of
Appeals under review; ANNULS the orders for the garnishment of the
funds of the University of the Philippines and for the release of the
garnished amount to Stern Builders Corporation and Servillano dela
Cruz; and DELETES from the decision of the Regional Trial Court dated
November 28, 2001 for being void only the awards of actual damages of
₱ 5,716,729.00, moral damages of ₱ 10,000,000.00, and attorney's fees
of ₱ 150,000.00, plus ₱ 1,500.00 per appearance, in favor of Stern
Builders Corporation and Servillano dela Cruz.

The Court ORDERS Stem Builders Corporation and Servillano dela Cruz
to redeposit the amount of ₱ 16,370,191.74 within 10 days from
receipt of this decision. Costs of suit to be paid by the private
respondents. SO ORDERED.

65
 ALDIN

Case Title Houston

v.
Ormes

252 U.S. 469 (1920)

Fact/s This was a suit in equity, brought by the late Belva A. Lockwood in
her lifetime in the Supreme Court of the District Columbia, to
establish an equitable lien for attorney's fees upon a fund of $1,200
in the treasury of the United States, appropriated by Congress (Act
of March 4, 1915, c. 140, 38 Stat. 962, 981) to pay a claim found by
the Court of Claims to be due to one Susan Sanders, who was made
defendant together with the Secretary of the Treasury and the
Treasurer of the United States. There were appropriate prayers for
relief by injunction and the appointment of a receiver. Defendant
Sanders voluntarily appeared and answered, denying her indebtedness
to plaintiff; the other defendants answered, admitting the existence
of the fund, and declaring that as a matter of comity and out of
deference to the court it would be retained under their control to
await the final disposition of the case, but objecting to the
jurisdiction of the court over the cause upon the ground that debts
due from the United States have no situs in the District of Columbia,
that there was nothing to show that either the United States or the
defendant Sanders had elected to make the sum alleged to be due from
the United States payable to her in the District, and that in the
absence of personal service upon her the court could make no decree
that would protect the United States. There was a final decree
adjudging that [252 U.S. 469, 472] the sum of $90 was due from the
defendant Sanders to Mrs. Lockwood, with costs, and appointing a
receiver to collect and receive from the Secretary of the Treasury
the $1,200 appropriated in favor of Sanders, directing the Secretary
to pay the latter sum to the receiver, and decreeing that his receipt
should be a full acquittance to the United States for any and all
claims and demands of the parties arising out of or connected with
said claim. The Secretary of the Treasury and the Treasurer appealed
to the Court of Appeals of the District of Columbia; the defendant
Sanders not appealing. That court affirmed the decree (McAdoo v.
Ormes, 47 App. D. C. 364), and a further appeal, taken by the
officials of the Treasury under section 250, Judicial Code (Comp. St.
1227), brings the case here.

The principal contention is that, because the object of the suit and
the effect of the decree were to control the action of the appellants
in the performance of their official duties, the suit was in effect
one against the United States. But since the fund in question has
been appropriated by act of Congress for payment to a specified
person in satisfaction of a finding of the Court of Claims, it is
clear that the officials of the Treasury are charged with the
ministerial duty to make payment on demand to the person designated.
It is settled that in sucha case a suit brought by the person
entitled to the performance of the duty against the official charged
with its performance is not a suit against the government. So it has
been declared by this court in many cases relating to state officers.
Board of Liquidation v. McComb, 92 U.S. 531 , 541; Louisiana v.
66
 Jumel, 107 U.S. 711, 727 , 2 S. Sup. Ct. 128; In re Ayers, 123 U.S.
443, 506 , 8 S. Sup. Ct. 164. In Minnesota v. Hitchcock, 185 U.S.
373, 386 , 22 S. Sup. Ct. 650, 655 ( 46 L. Ed. 954), while holding
that a suit against officers of the United States might be in effect
a suit against the United States, the court said:

'Of course, this statement has no reference to and does not include
those cases in which officers of the United States are sued, in
appropriate [252 U.S. 469, 473] form, to compel them to perform
some ministerial duty imposed upon them by law, and which they
wrongfully neglect or refuse to perform. Such suits would not be
deemed suits against the United States within the rule that the
government cannot be sued except by its consent, nor within the rule
established in the Ayers Case.'

And in Parish v. MacVeagh, 214 U.S. 124 , 29 Sup. Ct. 556, the court
upheld the right of a claimant, in whose favor an appropriation had
been mad by Congress, to have a mandamus against the Secretary of the
Treasury requiring him to pay the claim. To the same effect, Roberts,
Treasurer, v. United States, 176 U.S. 221, 231 , 20 S. Sup. Ct. 376.
Issue/s

Ruling/ In the present case it is conceded, and properly conceded, that

Decision/ payment of the fund in question to the defendant Sanders is a
Held ministerial duty, the performance of which could be compelled by
mandamus. But from this it is a necessary consequence that one who
has an equitable right in the fund as against Sanders may have relief
against the officials of the Treasury through a mandatory writ of
injunction, or a receivership which is its equivalent, making Sanders
a party so as to bind her and so that the decree may afford a proper
acquittance to the government. The practice of bringing suits in
equity for this purpose is well established in the courts of the
District. Sanborn v. Maxwell, 18 App. D. C. 245; Roberts v. Consaul,
24 App. D. C. 551, 562; Jones v. Rutherford, 26 App. D. C. 114;
Parish v. McGowan, 39 App. D. C. 184, s. c. on appeal McGowan v.
Parish, 237 U.S. 285, 295 , 35 S. Sup. Ct. 543. Confined, as it
necessarily must be, to cases where the officials of the government
have only a ministerial duty to perform, and one in which the party
complainant has a particular interest, the practice is a convenient
one, well supported by both principle and precedent.

Section 3477, Rev. Stat. (Comp. St. 6383), regulating the assignment
of claims against the United States, is not an obstacle. As has been
held many times, the object of Congress in this legis lation [252
U.S. 469, 474] was to protect the government, not the claimant; and
it does not stand in the way of giving effect to an assignment by
operation of law after the claim has been allowed. Erwin v. United
States, 97 U.S. 392 , 397; Goodman v. Niblack, 102 U.S. 556 , 560;
Price v. Forrest, 173 U.S. 410 , 423-425, 19 Sup. Ct. 434.

In support of the contention that a court of equity may not control

the action of an officer of the United States within the scope of his
authority, Wells v. Roper, 246 U.S. 335 , 38 Sup. Ct. 317, is cited;
but it is not in point. The official duty sought to be subjected to
67
control in that case was not ministerial, but required an exercise of
official discretion, as the opinion shows. 246 U.S. 338 , 38 Sup. Ct.
317.

It is further objected that debts due from the United States have no
situs at the seat of government, and Vaughan v. Northup, 15 Pet. 1,
6, Mackey v. Cox, 18 How. 100, 105, and Wyman v. Halstead, 109 U.S.
654, 657 , 3 S., sup. Ct. 417, are cited. But in the present case the
qus tion of situs is not material. If the jurisdiction as to the
defendant Sanders had depended upon publication of process against
her as a nonresident under section 105 of the District Code (Act of
March 3, 1901, c. 854, 31 Stat. 1189, 1206), upon the theory that her
claim against the government was 'property within the District,' the
point would require consideration. But the jurisdiction over her
rests upon her having voluntarily appeared and answered the bill
without objection. Hence there is no question that the decree binds
her, and so constitutes a good acquittance to the United States as
against her.

The decree will be Affirmed.

68
 ALDIN

Case Title Sterling

v.
Constantin,
287 U.S. 378 (1932)
Fact/s 1. The Governor of a state is subject to the process of the federal
courts for the relief of private persons when, by his acts under
color of state authority, he invades rights secured to them by the
federal Constitution. P. 287 U. S. 393.

2. The suit is not a suit against the state. Id.

3. In a suit to restrain a state official from violating federal

constitutional rights by action under color of state law, the fact
that it may appear that he exceeded his authority under that law does
not deprive the district court of jurisdiction. Id.
Page 287 U. S. 379

4. In a suit to restrain a state official from invading property

rights under color of state constitutional and statutory provisions,
where the validity of such provisions, if construed to authorize the
acts complained of, is challenged by the plaintiff under the federal
Constitution, the application for an injunction is properly heard by
the District Court of three judges. P. 287 U. S. 393.
5. In such a case, the jurisdiction of the three-judge District
Court, and of this Court on appeal from a decree of injunction,
extends to every question involved, whether of state or of federal
law, and enables the court to rest its judgment on the decision of
such of the questions as, in its opinion, effectively dispose of the
case. P. 287 U. S. 393.

6. Whether or not the constitution and laws of Texas purport to

authorize the acts of the Governor complained of in this case is not
decided. In disposing of the federal question, such authority is
assumed to have existed. P. 287 U. S. 394.

7. The right of a lessee of oil land to extract oil pursuant to his

lease, subject to reasonable regulation by the state in the exercise
of its power to prevent unnecessary loss, destruction, and waste, is
protected by the due process clause of the Fourteenth Amendment. P.
287 U. S. 396.

8. The existence of facts justifying an exertion of military power by

the Governor of a state is subject to judicial inquiry when there is
a substantial showing that such exertion has overridden private
rights secured by the federal Constitution. P. 287 U. S. 398.

9. The Governor of Texas proclaimed "martial law" over several oil-

producing counties of the state, declaring that insurrection and riot
beyond civil control existed there due to wasteful production of oil
by some of the operators in defiance of the state conservation law,
and to violent public feeling thereby excited. After shutting down
all of the wells by military force, he permitted the state commission
69
 that administers the conservation law to fix the limit of production,
and production was resumed accordingly; but when some of the
operators, the plaintiffs in this case, objecting to that limit as
infringing their property rights under the Fourteenth Amendment,
obtained a restraining order in a suit against the Commission in the
federal court, he took military control of all of the wells and
restricted production still further.
Issue/s (1) The question whether an exigency existed justifying such
interference with the plaintiffs' rights was not settled exclusively
by the Governor's acts and declarations, but was subject to judicial
inquiry and determination.

(2) The facts of the situation (set forth in the opinion) show no
such exigency, and the interference as properly enjoined
Ruling/ 10. The fact that a violation of private rights by a state Governor
Decision/ is attributable to a military order does not limit the relief to
Held proceedings calling him to account after the passing of the alleged
emergency on which he claims to have acted; an injunction will be
granted if essential for protection of the injured party. P. 287 U.
S. 403.

11. The general language of an opinion must be taken in connection

with the point actually decided, referring to Moyer v. Peabody, 212
U. S. 78. P. 287 U. S. 400.

12. Appeal from an order granting an interlocutory injunction will be

dismissed when there is also an appeal from a final decree making the
injunction permanent. P. 287 U. S. 386.

No. 11 dismissed; No. 453 affirmed.

Appeals from an order of interlocutory injunction granted by a three-

judge District Court, restraining the Governor and certain military
officials of Texas from enforcing military orders restricting the
production of plaintiffs' oil wells, and from a final decree of the
same court making the injunction permanent.

70
 ALDIN

Case Title G.R. No. 76607 February 26, 1990

UNITED STATES OF AMERICA, FREDERICK M. SMOUSE AND YVONNE REEVES,

petitioners,
vs.
HON. ELIODORO B. GUINTO, Presiding Judge, Branch LVII, Regional Trial
Court, Angeles City, ROBERTO T. VALENCIA, EMERENCIANA C. TANGLAO, AND
PABLO C. DEL PILAR, respondents
Fact/s The cases brought to Supreme Court are consolidated for they are
issues on immunity of the state from being sued.
1. USA vs Hon. Guinto G.R. No. 76607
2. USA vs Hon. Rodrigo G.R. 79470
3. USA vs Hon. Ceballos GR No. 80018
4. USA vs Hon. Vergara G.R. No. 80258

1. USA vs Hon. Guinto G.R. No. 76607, complaint filed by a private

respondent for temporary restraining order against the operation of a
contractor for barbering service for USA Air force, allegedly the
contractor Ramon Dizon did not got a bidding invitation yet he won
the contract.

2. USA vs Hon. Rodrigo G.R. 79470, complaint filed by Fabian

Genove for damages against the cooks of the US Air Force for pouring
urine in the soup stock. Latter, they file a motion to dismiss the
case because they are immune from suit.

3. USA vs Hon. Ceballos GR No. 80018, Louis Bautista a barracks

boy of an extension of US Air Force, allegedly he was arrested
pursuant to RA 6425 (Dangerous Drug Act), he filed a case against
officers of US Air Force for illegal dismissal, the US Officers filed
motion to dismissed the case but it was denied, latter the US
Officers filed a petition for certiorari.

4. USA vs Hon. Vergara G.R. No. 80258, Ricky Sanchez filed against
Major Carns of US Air Force for damages from injury for beating him
and for unleashing dogs that latter bit him. Major Carns filed a
motion to dismiss because he is immune from suit.
Issue/s Whether or not the petitioners can use the State Immunity (Aricle.
XVI, Sec. 3, 1987 Constitution) as defense?
Ruling/ 1. USA vs Hon. Guinto G.R. No. 76607, petition DISMISSED and
Decision/ the respondent Judge proceeds with the hearing Civil Case No.
Held 4772.
2. USA vs Hon. Rodrigo G.R. 79470, the petition GRANTED due
to lack of evidence of the allegation.
3. USA vs Hon. Ceballos GR No. 80018, the petition GRANTED
and the civil case against the officers is DISMMISSED.
4. USA vs Hon. Vergara G.R. No. 80258, petition DISMISSED and
proceed to civil case no. 4996.

REASON: Under Art. XVI, Sec. 3, 1987 Constitution, ―The State may not be sued
without consent‖. However, this does not mean that all times, the State may not
be sued. There need to be consideration on if they were indeed acting within the
capacity of their duties, or if they enter into a contract with a private party.

71
 CHE

Case Title G.R. No. 101949 December 1, 1994

THE HOLY SEE, petitioner,

vs.
THE HON. ERIBERTO U. ROSARIO, JR., as Presiding Judge of the Regional
Trial Court of Makati, Branch 61 and STARBRIGHT SALES ENTERPRISES,
INC., respondents
Fact/s The Lot 5-A under the name of The Holy See along with Lot-B and 5-D
registered to the Philippine Realty Corp. (PRC). These lots were sold
to Ramon Licup of Starbright Sales Ent. (SSEI) through an agent Msgr.
Domingo Cirilos Jr..

Theses lots are occupied by squatters, neither the sellers nor buyer
want to take responsibility to evict and clear the land. The Holy
See, petitioner, insist the SSEI to undertake the action or return
the earnest money of P100,000.00, but the SSEI refused and returned
the money through Msgr. Cirilos and the latter the lots was sold to
Tropicana Properties and Development Corp. (Tropicana).

SSEI filed a civil case complaint of annulment of sale for the

specific performance and damages against Msgr. Cirilos, PRC, and
Tropicana.

The Holy See motion to dismiss due to lack of jurisdiction based on

sovereign immunity from suit. It was denied by RTC and they moved
into motion for reconsideration for certiorari over Court of Appeals.
Issue/s Whether or not the petitioners invoke their sovereign immunity for
its non-suability?
Ruling/ YES. The petition was GRANTED. The lot-5A was acquired as a donation
Decision/ by religious group and the lot was meant for public utilization and
Held not for private purpose or profit gain. The squatter living in the
lot made impossible to utilize and so the subsequent disposal was
made. Therefore sovereign immunity was recognized.

72
 CHE

Case Title G.R. No. 185918 April 18, 2012

LOCKHEED DETECTIVE AND WATCHMAN AGENCY, INC., Petitioner,

vs.
UNIVERSITY OF THE PHILIPPINES, Respondent
Fact/s Petitioner Lockheed entered a contract with UP to provide for
security guard service. In 1998, several security guards assigned at
UP filed a separate complaint against UP and Lockheed for underpaid
wages, overtime, holiday pay, 13th month etc. over the Labor Arbiter.
The Labor Arbiter held UP and Lockheed liable, and without an appeal
a final writ of execution was issued. A notice of garnishment was
issued to PNB UP Diliman Branch for satisfaction of award.

The UP filed an urgent motion to quash the garnishment because their

PNB account is a government/public funds, therefore, it should be
filed first over the Commission of Audit (COA). The motion to quash
was dismissed by Court of Appeals. Hence, the petition was brought to
Supreme Court.
Issue/s Whether or not the garnishment is against the funds of UP is valid?
Ruling/ No, the garnishment was not valid. Based on Political Law Doctrine:
Decision/ It is the COA which has primary jurisdiction to examine, audit and
Held settle ―all debts and claims of any sort‖ due from or owing the
Government or any of its subdivisions, agencies and
instrumentalities, including government-owned or controlled
corporation and their subsidiaries.

WHEREFORE, the petition for review on certiorari is DENIED for lack

of merit. Petitioner Lockheed Detective and Watchman Agency, Inc. is
ordered to REIMBURSE respondent University of the Philippines the
amount of ₱12,062,398.71 plus interest of 6% per annum, to be
computed from September 12, 2005 up to the finality of this Decision,
and 12% interest on the entire amount from date of finality of this
Decision until fully paid. No pronouncement as to costs. SO ORDERED.

73
 CHE

Case Title G.R. No. 167807 December 6, 2011

MANOLITO AGRA, EDMUNDO P. AGUILAR, IMELDA I. AMERICA, EVELYN R.

CONCEPCION, DIOSDADO A. CORSIGA, et.al , ALL NATIONAL ELECTRIFICATION
ADMINISTRATION EMPLOYEES, REPRESENTED BY REGINA FILOTEO, Petitioners,
vs.
COMMISSION ON AUDIT, Respondent
Fact/s On July 1, 1989, R.A. 6758 (The Compensation and Position
Classification Act of 1989) took effect.

Group of Agra Employees, petitioner, claimed that they did not

receive meal, rice and children‘s allowance. Thus, they filed a civil
case over RTC against its Board of Administrators alleging violation
of their right to the equal protection clause under the Constitution.
RTC issued a writ of execution, thereafter, issued a Notice of
Garnishment against the funds of Agra with Development Bank of the
Philippines (DBP). Respondents brought the case to Court of Appeals
and declaring the decision of the RTC null and ordering the
implementation of a writ of execution.

However, the resident auditor of COA did not allow the payment of the
allowances to employees who were not incumbents as of June 30, 1989,
under the Notice of Disallowances. The employees appealed to the COA,
arguing that the subject disbursement was anchored on a court
decision that had become final and for execution.
Issue/s Whether or not the Agra employees hired after June 30, 1989 are
entitled to allowance?
Ruling/ COA resolution is sustained. Based on Constitutional Law: Public
Decision/ Officer; we have defined incumbent as ―a person who is in present
Held possession of an office; one who is authorized to discharge the
duties of an office‖. As petitioner were hired after June 30, 1989,
the COA was correct in disallowing the grant of the benefit to them,
as they were not clearly entitled to it.

WHEREFORE, the petition is GRANTED. The July 4, 2002 Decision of the

Court of Appeals is REVERSED and SET ASIDE. The Resolution dated
December 11, 2000 and Order dated January 8, 2001 of the Regional
Trial Court, Branch 88, Quezon City in Special Civil Action No. Q-99-
38275 are REINSTATED.

WHEREFORE, premises considered, the petition is hereby PARTIALLY

GRANTED. COA Decision No. 2003-134 dated October 9, 2003 and COA
Resolution No. 2005-010 dated February 24, 2005 are hereby AFFIRMED
with the CLARIFICATION that the petitioners shall no longer be
required to refund the rice subsidies for the period January to
August 2001, which they had received from NEA but were later
disallowed by the COA. SO ORDERED.

74
 CHE

Case Title G.R. No. L-36084 August 31, 1977

REPUBLIC OF THE PHILIPPINES, petitioner,

vs.
HONORABLE AMANTE P. PURISIMA, the Presiding Judge of the court of
first Instance of Manila (Branch VII), and YELLOW BALL FREIGHT LINES,
INC., respondents
Fact/s On September 7, 1972, a motion to dismiss was filed by defendant Rice
and Corn Administration for the collection of a money claim arising
from an alleged breach of contract, the plaintiff being private
respondent Yellow Ball Freight Lines, Inc. At that time, the leading
case of Mobil Philippines Exploration, Inc. v. Customs Arrastre
Service, were Justice Bengzon stressed the lack of jurisdiction of a
court to pass on the merits of a claim against any office or entity
acting as part of the machinery of the national government unless
consent be shown, had been applied in 53 other decisions.
On October 4, 1972, respondent Judge denied the motion to dismiss.
Hence, the petition for certiorari and prohibition.
The consent, to be effective though, must come from the State acting
through a dulyenacted statute as pointed out by Justice Bengzon in
Mobil.
Issue/s Whether or not Judge Purisima‘s decision is valid.
Ruling/ No. The merit of the petition for certiorari and prohibition is thus
Decision/ obvious.
Held The doctrine of non-suability of the government without its consent,
as it has operated in practice, hardly lends itself to the charge
that it could be the fruitful parent of injustice, considering the
vast and ever-widening scope of state activities at present being
undertaken. Whatever difficulties for private claimants may still
exist, is, from an objective appraisal of all factors, minimal. In
the balancing of interests, so unavoidable in the determination of
what principles must prevail if government is to satisfy the public
weal, the verdict must be, as it has been these so many years, for
its continuing recognition asa fundamental postulate of
constitutional law.
Respondent Judge was misled by the terms of the contract between the
private respondent, plaintiff in his sala, and defendant Rice and
Corn Administration which, according to him, anticipated the case of
a breach of contract within the parties and the suits that may
thereafter arise. The consent, to be effective though, must come from
the State acting through a duly enacted statute as pointed out by
Justice Bengzon in Mobil. Thus, whatever counsel for defendant Rice
and Corn Administration agreed to hadno binding force on the
government. That was clearly beyond the scope of his authority.
WHEREFORE, the petitioner for certiorari is granted and the resolution
of October 4, 1972 denying the motion to dismiss filed by the Rice and
Corn Administration nullified and set aside and the petitioner for
prohibition is likewise granted restraining respondent Judge from acting
on Civil Case No. 79082 pending in his sala except for the purpose of
orderingits dismissal for lack of jurisdiction. The temporary
restraining order issued on February8, 1973 by this Court is made
permanent terminating this case. Costs against Yellow Ball Freight
Lines, Inc.
75
 FHADZ

Case Title G.R. No. L-26400 February 29, 1972

VICTORIA AMIGABLE, plaintiff-appellant,

vs.
NICOLAS CUENCA, as Commissioner of Public Highways and REPUBLIC OF
THE PHILIPPINES, defendants-appellees
Fact/s 1. Victoria Amigable is the registered owner of Lot No 639 of the
Banilad Estate in Cebu.

2. She had transfer Certificate title issued by the Register of Deeds

of Cebu on Feb. 1, 1924

3. No annotation in favor of the gov't of any right or interest in

the property appears at the back of certificate

4 Without prior expropriation or negotiated sale, 6167 sqm of land

was used for the construction the Mango and Gorordo Avenues.
5. On March 29, 1958, Amigable Counsel wrote to the President of the
Phil, requesting the payment for her lot.

6. The claim was indorsed to Auditor General and was disallowed it in

his gth Indorsement dated Dec. 9, 1958

7. Amigable filed a complaint against Republic of the Philippines and

Nicolas Cuenca in his capacity as Commissioner of Public Highways for
the recovery of the portion of the lot used..
Issue/s Can Amigable properly sue the government?
Ruling/ Yes, In its decision, the Court cited Ministerio v. Court of First
Decision/ Instance of Cebu, which also involve a claim for payment of the value
Held of a portion of land used for widening of Gorordo Avenue in Cebu
City. Where the gov't takes away property from a private landowner
for public use without going through the legal process of
expropriation or negotiated sale, the aggrieve party may properly
maintain a suit against the government without thereby violating the
docrine of governmental immunity without its consent.

WHEREFORE, the decision appealed from is hereby set aside and the
case remanded to the court a quo for the determination of
compensation, including attorney's fees, to which the appellant is
entitled as above indicated. No pronouncement as to costs.

76
 FHADZ

Case Title G.R. Nos. L-71998-99 June 2, 1993

EMILIANO R. DE LOS SANTOS, SPOUSES NORMA A. PADILLA and ISIDORO L.

PADILLA and the HEIRS OF FRANCISCO DAYRIT, petitioners,
vs.
THE HON. INTERMEDIATE APPELLATE COURT, HON. JUDGE CICERRO C. JURADO
and EDILBERTO CADIENTE, respondents
Fact/s De los Santos (DLS) and petitioners alleged that in October 1981,
without their knowledge or consent, Cadiente (a private contractor
and Provincial Engineer of Rizal) constructed a road in their
property, occupying 1,165 square meters of DLS‘ land Aside from the
road, Cadiente also constructed an artificial creek, also without the
knowledge and consent of DLS, that occupied 2,906 square meters of
DLS‘ property DLS then invoked his rights under Art. 4 Secs. 1 and 2
of the Bill of Rights of the 1973 constitution (due process clause
and Eminent domain1) and prayed for the issuance of a restraining
order or a writ of preliminary injunction to stop the construction. o
DLS claimed that the construction was made without their consent and
without due process and just compensation, in violation of the 1973
constitution The lower court initially decided against DLS and
maintained that an action cannot be maintained since they are in
reality suits against the state, which has not given its consent to
be sued. The higher courts reversed this decision.
Issue/s WON respondents can be sued for expropriating petitioners‘ land
despite exercising governmental functions.
WON petitioners are entitled to just compensation.
Ruling/ WHEREFORE, the petition is hereby GRANTED and Civil Cases Nos. 46800
Decision/ and 46801 shall be REMANDED to the lower court for trial on the
Held merits after the Republic of the Philippines shall have been
impleaded as defendant in both cases.
YES • Court referenced Ministerio v. Court of First Instance of Cebu
o ―the doctrine of governmental immunity from suit cannot serve as an
instrument for perpetuating an injustice on a citizen‖ • There were
no expropriation proceedings that occurred before the projects began
o That the account of the Solicitor General regarding the timeline of
events did not include the proper expropriation proceedings • The
belief that the land in question is public property is countered by
the proof that the land is registered under the Torrens system in the
names of DLS and fellow petitioners as early as March 21, 1971 o Had
respondents exercised even ordinary diligence, they would have easily
found out that the land is private property • A public infrastructure
loses its laudibility, if in the process of undertaking it, private
rights are disregarded. o Republic v. Sandiganbayan: ―In exercising
the right of eminent domain, the state exercises jus imperii
(governmental functions)... Yet even in that area, it has been held
that where private property has been taken in expropriation without
just compensation being paid, the defense of immunity from suit
cannot be set up by the state against an action for payment by the
owner.‖

Inherent power of the State to acquire private property for public use, in
exchange for just compensation to the owner of the private property.
77
 FHADZ

Case Title G.R. No. L-31635 August 31, 1971

ANGEL MINISTERIO and ASUNCION SADAYA, petitioners,

vs.
THE COURT OF FIRST INSTANCE OF CEBU, Fourth Branch, Presided by the
Honorable, Judge JOSE C. BORROMEO, THE PUBLIC HIGHWAY COMMISSIONER,
and THE AUDITOR GENERAL, respondents
Fact/s Petitioners sought the payment payment of just compensation for a
registered lot alleging that in 1927 the National Gov't through its
authorized representatives took physical and material possession of
it and used it for the widening of a national roadm without paying
just compensation and without any agreement, either written or
verbal. There was an allegation of repeated demands for the payment
of its price or return of its possession, but defendants Public
Highway Commisioner and the Auditor general refused to restore its
possession.
Issue/s Whether or Not the defendants are immune from suit.
Ruling/ No, where the judgement in such a case would result not only in the
Decision/ recovery of possession of the property in favor of the said citizen
Held but also in charge against the gov't itself, and consequently, it
cannot prosper or be valid entertained by the court except with
consent of said government. In as much as the State authorizes only
legal acts by its officer, unathourized acts of govt officials or
officers are not acts of the State, and an action against the
official or officers by one one whose right have been invaded or
violated by such acts, for the protection of his rights, is not a
suit against the State within the rule of immunity of the State from
suit.

WHEREFORE, the lower court decision of January 30, 1969 dismissing

the complaint is reversed and the case remanded to the lower court
for proceedings in accordance with law.

78
 FHADZ

Case Title G.R. No. 104768 July 21, 2003

REPUBLIC OF THE PHILIPPINES, Petitioner,

vs.
SANDIGANBAYAN, MAJOR GENERAL JOSEPHUS Q. RAMAS and ELIZABETH DIMAANO,
Respondents
Fact/s PCGG filed with the Sandiganbayan a complaint for reconveyance,
reversion, accounting, restitution, and damages against private
respondents Bienvenido Tantoco and Dominador Santiago, et al. Private
respondents jointly moved to strike out some portions of the
complaint and for bill of particulars of other portions, which motion
was oppose by the PCGG. the Sandiganbayan gave the PCGG 45 days to
expand its complaint to make more specific allegation.

2. Private respondents then presented a Motion to leave to file

interrogatories under Rule 25 of the Rules of Court. The
Sandiganbayan denied private respondents motions. Private respondents
filed an Answer to with Compulsory Counterclaim. In response, PCGG
presented a Reply to Counterclaim. Private respondents filed a
pleading denominated Interrogatories to Plaintiff, and Amended
Interrogatories to Plaintiff as well as a motion for production and
inspection of documents.

3. The Sandiganbayan admitted the Amended Interrogatories and granted

the motion for production and inspection of documents respectively.
The PCGG moved for reconsideration, arguing that the documents are
privileged in character since they are intended to be used against
the PCGG and its Commission in violation of Sec. 4, EO No.
1, v12;

4. The Sandiganbayan promulgated two Resolutions. The first, denying

reconsideration of the resolution allowing production of the
documents, and the second, reiterating, by implication the permission
to serve the amended interrogaroties on the plaintiff.
Issue/s Whether or Not the PCGG is immune from suit.
Ruling/ No, The state is of course immune from suit in the sense that it
Decision/ cannot, as a rule, be sued without its consent. However, it is
Held axiomatic that in filing an action, it divests itself of its
sovereign character and sheer immunity from suit, descending to the
lever of an ordinary litigant.

The PCGG cannot claim a superior or preferred status to the State,

even while assuming of an act for the State. The suggestion that the
State makes no implied waiver of immunity by filing a suit except
when in doing so it acts in, or in matters concerning, its propriety
or nongovernmental capacity, is unacceptable. It attempts a
distinction without support in principle or precedent. On the
contrary, - the consent of the State to be sued may be given
expressly or impliedly. Express consent may be manifested either
through a general law or a special law.

Implied consent is given when the State itself commences litigation

or when it enters into a contract.
79
 ROLAN

Case Title G.R. No. L-48214 December 19, 1978

ILDEFONSO SANTIAGO, represented by his Attorney-in-Fact, ALFREDO T.

SANTIAGO, petitioner,
vs.
THE GOVERNMENT OF THE REPUBLIC OF THE PHILIPPINES, represented by the
Director, Bureau of Plant Industry, and the Regional Director, Region
IX, Zamboanga City, respondent
Fact/s The plaintiff sued the government for revocation of a donation on the
ground of failure of the defendant to comply with the stipulated
conditions. The defendant moved to dismiss for lack of its consent to
be sued. The Supreme Court denied the motion, holding that the suit
could prosper because it did not involve a money claim against the
State. As what the plaintiff was seeking was the return only of the
properties donated, he did not even need to file his claim first with
the Commission on Audit under the provisions of C.A. No. 327.

Petitioner Ildefonso Santiago filed on August 9, 1976 an action in

the Court of First Instance of Zamboanga City naming as defendant the
government of the Republic of the Philippines represented by the
Director of the Bureau of Plant Industry for the revocation of a deed
of donation executed by him and his spouse in January of 1971 with
the Bureau of Plant Industry as the done

As alleged in such complaint, such Bureau, contrary to the terms of

the donation, failed to "install lighting facilities and water system
on the property donated and to build an office building and parking
lot thereon which should have been constructed and ready for
occupancy on or before December 7, 1974

The lower court in its Order dated October 20, 1977, sustained a
motion to dismiss on the part of th defendant Republic of the
Philippines, now named as one of the respondents, the other
respondent being the Court of First Instance of Zamboanga City,
Branch II on the ground that ―the state cannot be sued without its
consent

Solicitor General Estelito P. Mendoza, in the comment on the petition

filed with this Court, is for the affirmance of the order of
dismissal of respondent Court precisely to accord deference to the
above categorical constitutional mandate
Issue/s Whether or not the government of the Republic of the Philippines can
be sued
Ruling/ Yes. To rule that a donor, with the Republic or any of its agency
Decision/ being the donee, is entitled to go to court in case of an alleged
Held breach of the conditions of such donation. He has the right to be
heard. Under the circumstances, the fundamental postulate of non-
suability cannot stand in the way. It is made to accommodate itself
to the demands of procedural due process, which is the negation of
arbitrariness and inequity. The government, in the final analysis, is
the beneficiary. It thereby manifests its adherence to the highest
80
ethical standards, which can only be ignored at the risk of losing
the confidence of the people, the repository of the sovereign power.
The judiciary under this circumstance has the grave responsibility of
living up to the ideal of objectivity and impartiality, the very
essence of the rule of law. Only by displaying the neutrality
expected of an arbiter, even if it happens to be one of the
departments of a litigant, can the decision arrived at, whatever it
may be, command respect and be entitled to acceptance.

WHEREFORE, the writ of certiorari prayed for is granted and the order
of dismissal of October 20, 1977 is nullified, set aside and declared
to be without force and effect. The Court of First Instance of
Zamboanga City, Branch II, is hereby directed to proceed with this
case, observing the procedure set forth in the Rules of Court. No
costs.

81
 ENGR AK

Case Title G.R. No. L-6060 September 30, 1954

FERNANDO A. FROILAN, plaintiff-appellee,

vs.
PAN ORIENTAL SHIPPING CO., defendant-appellant,
REPUBLIC OF THE PHILIPPINES, intervenor-appellee
Fact/s Defendant Pan Oriental took possession of the vessel in question
after it had been repossessed by the Shipping Administration and
title thereto reacquired by the government, following the original
purchaser, Fernando Froilan‘s, default in his payment of the unpaid
balance and insurance premiums for the said vessel. Pan Oriental
chartered said vessel and operated the same after it had repaired the
vessel and paid the stipulated initial payment, thereby exercising
its option to purchase, pursuant to a bareboat charter contract
entered between said company and the Shipping Corporation. The
Cabinet resolved to restore Froilan to his right sunder the original
contract of sale on condition that he shall pay a sum of money upon
delivery of the vessel to him, that he shall continue paying the
remaining installments due, and that he shall assume the expenses
incurred for the repair and by docking of the vessel.

Pan Oriental protested to this restoration of Froilan‘s right sunder

the contract of sale, for the reason that when the vessel was
delivered to it, the Shipping Administration had authority to dispose
of said authority to the property, Froilan having already
relinquished whatever rights he may have thereon. Froilan paid the
required cash of P10,000.00 and as Pan Oriental refused to surrender
possession of the vessel, he filed an action for in the CFI of Manila
to recover possession thereof and have him declared the rightful
owner of said property. The Republic of the Philippines was allowed
to intervene in said civil case praying for the possession of the in
order that the chattel mortgage constituted thereon may be
foreclosed.
Issue/s Whether or not the Republic of the Philippines is immune from suit.
Ruling/ No, because the moment when the government filed its complaint in
Decision/ intervention which in effect waived its right of non-suability.
Held
Wherefore, the appealed order is hereby reversed and set aside and
the case remanded to the lower court for further proceedings. So
ordered, without costs.

The immunity of the state from suits does not deprive it of the right
to sue private parties in its own courts. The state as plaintiff may
avail itself of the different forms of actions open to private
litigants. In short, by taking the initiative in an action against a
private party, the state surrenders its privileged position and comes
down to the level of the defendant. The latter automatically
acquires, within certain limits, the right to set up whatever claims
and other defenses he might have against the state.

Doctrine of State Immunity

82
The immunity of the state from suits does not deprive it of the right
to sue private parties in its own courts. The state as plaintiff may
avail itself of the different forms of actions open to private
litigants. In short, by taking the initiative in an action against a
private party, the state surrenders its privileged position and comes
down to the level of the defendant. The latter automatically
acquires, within certain limits, the right to set up whatever claims
and other defenses he might have against the state. The United States
Supreme Court thus explains:

"No direct suit can be maintained against the United States.

But when an action is brought by the United States to recover
money in the hands of a party who has a legal claim against
them, it would be a very rigid principle to deny to him the
right of setting up such claim in a court of justice, and turn
him around to an application to Congress." (Sinco, Philippine
Political Law, Tenth Ed., pp. 36-37, citing U. S. vs. Ringgold,
8 Pet. 150, 8 L. ed. 899.)

83
 ENGR AK

Case Title G.R. No. L-8587 March 24, 1960

BENITO E. LIM, as administrator of the Intestate Estate of Arsenia

Enriquez, plaintiff-appellant,
vs.
HERBERT BROWNELL, JR., Attorney General of the United States, and
ASAICHI KAGAWA, defendants-appellee, REPUBLIC OF THE PHILIPPINES,
intervenor-appellee
Fact/s This is an appeal from an order of the Court of First Instance of
Manila, dismissing plaintiff's action for the recovery of real
property for lack of jurisdiction over the subject matter. The
property in dispute consists of four parcels of land situated in
Tondo, City of Manila, with a total area of 29,151 square meters.

The lands were, after the last world war, found by the Alien Property
Custodian of the United States to be registered in the name of
Asaichi Kagawa, national of an enemy country, Japan, as evidenced by
Transfer Certificates of Title Nos. 64904 to 65140, On March 14,
1946, issued a vesting order on the authority of the Trading with the
Enemy Act of the United States, as amended, vesting in himself the
ownership over two of the said lots, Lots Nos. 1 and 2 On July, 6,
1948, the Philippine Alien Property Administrator (successor of the
Alien Property Custodian) under the authority of the same statute
issued a supplemental vesting order, vesting in himself title to the
remaining Lots Nos. 3 and 4.

On August 3, 1948, the Philippine Alien Property Administrator

(acting on behalf of the President of the United States) and the
President of the Philippines, executed two formal agreements, one
referring to Lots 1 and 2 and the other to Lots 3 and 4, whereby the
said Administrator transferred all the said four lots to the Republic
of the Philippines upon the latter's undertaking fully to indemnify
the United States for all claims in relation to the property
transferred, which claims are payable by the United States of America
or the Philippine Alien Property Administrator of the United States
under the Trading with the Enemy Act, as amended, and for all such
costs and expenses of administration as may by law be charged against
the property or proceeds thereof hereby transferred.

On November 15, 1948, the latter's son Benito E. Lim filed a formal
notice of claim to the property with the Philippine Alien Property
Administrator On the theory that the lots in question still belonged
to Arsenia Enriquez. that they were mortgaged by her to the
Mercantile Bank of China; that the mortgage having been foreclosed,
the property was sold at public auction during the war to the
Japanese Asaichi Kagawa, who, by means of threat and intimidation
succeeded in preventing Arsenia Enriquez from exercising her right of
redemption; and that Kagawa never acquired any valid title to the
property because he was ineligible under the Constitution to acquire
residential land in the Philippines by reason of alien age.

On March 7, 1950, the claim was disallowed by the Vested Property

Claims Committee of the Philippine Alien Property Administrator, and
84
 copy of the decision disallowing the claim was received by claimant's
counsel on the 15th of that month On November 13, 1950, the claimant
Benito E. Lim, as administrator of the intestate estate of Arsenia
Enriquez, filed a complaint in the Court of First Instance of Manila
against the Philippine Alien Property Administrator (later
substituted by the Attorney General of the United States) for the
recovery of the property in question with back rents. The complaint
was later amended to include Asaichi Kagawa as defendant.
Issue/s 1. Whether or not Intervenor-Appellee (Republic of the Philippines)
be sued?
Ruling/ No suit or claim for the return of said properties pursuant to
Decision/ Section 9 or 32 (a) of the Trading with the Enemy Act was filed by
Held Plaintiff within two years from the date of vesting, the ―later‖ date
and the last on which suit could be brought. A condition precedent to
a suit for the return of property vested under Trading with the Enemy
Act is that it should be filed not later than April 30, 1949, or
within two years from the date of vesting, whichever is later, but in
computing the two years, the period during which there was pending a
suitor claim for the return of the property of the Act shall be
excluded. The court states that In view of the foregoing, the order
appealed from insofar as it dismisses the complaint with respect to
Lots 1 and 2 and the claim for damages against the Attorney General
of the United States and the Republic of the Philippines, is
affirmed, but revoked insofar as it dismisses the complaint with
respect to Lots 3 and 4, as to which the case is hereby remanded to
the court below for further proceedings.

85
 CRIS

Case Title G.R. No. L-4699 November 26, 1952

TEODORA SANTOS, assisted by her husband DONATO DE CASTRO, JOSEFINA

SANTOS, assisted by her husband Santiago Rodriguez and EMILIANA
SANTOS, plaintiffs-appellants,
vs.
LEONCIO SANTOS, THE ADMINISTRATOR OF THE CIVIL AERONAUTICS
ADMINISTRATION, and NATIONAL AIRPORTS CORPORATION, defendants-
appellees
Fact/s An undivided parcel of land was owned by the petitioner and the
respondent in the proportion of 1/7 undivided share for Teodora and ¼
undivided share for Leoncio. Leoncio collected from the Army of the
United States of America rentals for the use and occupation of said
parcel of land.
They made a demand upon Leoncio for the accounting of which and
payment of their respective shares therein but the latter failed and
refused to do so. They also complain that they made a demand upon
Leoncio to have the lot partitioned among them but the latter again
refused. Instead, he sold the lot to the Administrator of the Civil
Aeronautics Administration.
Upon these allegations they pray that Leoncio be ordered to render an
accounting of the rentals and to pay and deliver, their shares in the
land; that the parcel of land be partitioned among them in the
proportion above stated; that the purported sale by Leoncio to the
National Airports Corporation (the predecessor of the Civil
Aeronautics Administration) insofar as their shares are concerned be
declared null and void; that the Administrator of the Civil
Aeronautics Administration be directed to vacate the portions of the
lot belonging to them, to pay them a reasonable rental until after
possession of their shares in the lot shall have been restored to
them and to pay damages and costs.
The Administrator of the Civil Aeronautics Administration moved to
dismiss the complaint for lack of jurisdiction and insufficiency of
the complaint against him, and invoking immunity from suit.
Issue/s W/N the Civil Aeronautics Administration can be sued
Ruling/ YES. The Civil Aeronautics Administration, even if it is not a
Decision/ juridical entity, cannot legally prevent a party or parties from
Held enforcing their proprietary rights for lack of juridical personality,
because it took over all the powers and assumed all the obligations
of the defunct corporation which had entered into the contract in
question.
Where the state or its government enters into a contract, through its
officers or agents, in furtherance of a legitimate aim and purpose and
pursuant to constitutional legislative authority, whereby mutual or
reciprocal benefits accrue and rights and obligations arise there from.
and if the law granting the authority to enter into such contract does
not provide for or name the officer against whom such action mav be
brought in the event of a breach thereof the state itself mav be sued
even without its consent. Because by entering into a contract the
sovereign state has descended to the level of the citizen and its
consent to be sued is implied from the verv act of entering into such
contract.

86
 CRIS

Case Title G.R. No. L-11786. September 26, 1958

HARRY LYONS, INC., Plaintiff-Appellant,

v.
THE UNITED STATES OF AMERICA (651 United States Naval Supply Depot,
U.S. Navy, Philippines), Defendant-Appellee
Fact/s Harry Lyons, Inc. and USA entered into a contract for stevedoring
service at the US Naval Base in Subic Bay.The said contract is valid
until June 30, 1956, and was entered into pursuant to the provisions
of Sec. 2 (c)(1) of the Armed Services Procurement Act of 1947 of the
USA.

Harry Lyons Inc., brought this action before the CFI Manila to
collect several sums of money arising fromthe contract.

As a defense, the defendant USA filed a motion to dismiss. It argued

that the CFI has no jurisdiction overthe defendant and over the
subject matter of the action since the USA is a sovereign state which
cannotbe sued without its consent. USA also argued that Lyons failed
to exhaust the administrative remediesprovided for in Art. XXI of the
contract.

On the other hand, Lyons contends that when a sovereign state enters
into a contract with a privateperson, the state can be sued upon the
theory that it has descended to the level of an individual fromwhich
it can be implied that it has given its consent to be sued under the
contract. Lyons used the case of Santos vs. Santos (92 Phil 280) as
legal basis.
Issue/s WON the USA as a sovereign state may be sued when it enters into a
contract - Yes

WON CFI erred in dismissing the complaint on the ground that Lyons
has failed to comply with the condition presented in the contract
before an action could be taken in court against the US Government -
No
Ruling/ Where and when the state or its government enters into a contract,
Decision/ the state itself may be sued even without its consent.
Held
As long as the contract is entered into through its officers or
agents, in furtherance of a legitimate aim and purpose and
pursuant to constitutional legislative authority, whereby
mutual or reciprocal benefits accrue and rights and obligations
arise therefrom, and if the law granting the authority to enter
into such contract does not provide for or name the officer
against whom action may be brought in the event of a breach
thereof.

However, this is only an exception. It is still the general

rule that a state cannot be sued without its consent.

In the case at bar, the SC held the contract entered into (for
87
 stevedoring and miscellaneous labor services within the Subic
Bay area, a US Navy Reservation) by the US Government, through
its agency at Subic Bay, is a valid one. Thus, Lyons can bring
an action before the Philippine courts for any contractual
liability that political entity may assume under the contract.
Therefore, the trial court has jurisdiction over the case.2.

The CFI did not err in dismissing the complaint on the ground that
Lyons has failed to comply with the condition presented in the
contract before an action could be taken in court against the US
Government.

Art. XXI of the contract (between Lyons & USA) lays down the
procedure to be followed by Lyonsshould it desire to obtain a
remedy under the contract.

It provides that the remedy is to file its claim with the

Contracting Officer who is empowered to act and render a
decision. An appeal may be filed to the Secretary of the
Navy where the plaintiff will be afforded an opportunity
to be heard & present evidence. This decision by the
Secretary of the Navy shall be final unless a court of
competent jurisdiction finds that the decision is
fraudulent, arbitrary, capricious or so grossly erroneous.
In other words, it is only after the claim has been
decided on appeal by the secretary that Lyons can resort
to a court of competent jurisdiction.

It is clear that Lyons did not follow this provision/procedure,

thus his failure to exhaust administrative remedies against
USA. The CFI decision is thus affirmed.

Doctrine State Can‘t be sued - The general rule is that States cannot
be sued unless it has given its consent. However, an exception to
this is when the state enters into a contract. In such case, the
state may be sued even without its consent. But before suing the
state, administrative remedies shall first be exhausted.

88
 CRIS

Case Title G.R. No. L-35645 May 22, 1985

UNITED STATES OF AMERICA, CAPT. JAMES E. GALLOWAY, WILLIAM I. COLLINS

and ROBERT GOHIER, petitioners,
vs.
HON. V. M. RUIZ, Presiding Judge of Branch XV, Court of First
Instance of Rizal and ELIGIO DE GUZMAN & CO., INC., respondents
Fact/s At times material to this case, the United States of America had a
naval base in Subic, Zambales. The base was one of those provided in
the Military Bases Agreement between the Philippines and the United
States.

Sometime in May, 1972, the United States invited the submission of

bids for the following projects:

1. Repair fender system, Alava Wharf at the U.S. Naval Station Subic
Bay, Philippines.

2. Repair typhoon damage to NAS Cubi shoreline; repair typhoon damage

to shoreline revetment, NAVBASE Subic; and repair to Leyte Wharf
approach, NAVBASE Subic Bay, Philippines.

Eligio de Guzman & Co., Inc. responded to the invitation and

submitted bids.

The company received from the United States two telegrams requesting
it to confirm its price proposals and for the name of its bonding
company. The company complied... with the requests.

In June, 1972, the company received a letter... the company did not
qualify to receive an award for the projects because of its previous
unsatisfactory performance rating on a repair contract for the sea
wall at the boat landings of the U.S. Naval Station in Subic Bay.

The projects had... been awarded to third parties.

the company sued the United States of America... to order the

defendants to allow the... plaintiff to perform the work on the
projects and, in the event that specific performance was no longer
possible, to order the defendants to pay damages.

The defendants entered their special appearance "for the purpose only
of questioning the jurisdiction of this court over the subject matter
of the complaint and the persons of defendants, the subject matter of
the complaint being acts and omissions of the individual
defendants... as agents of defendant United States of America, a
foreign sovereign which has not given her consent to this suit or any
other suit for the causes of action asserted in the complaint."

The trial court denied the motion and issued the writ.
Issue/s W/N restrains perpetually the proceedings in Civil Case No. 779-M for
lack of jurisdiction on the part of the trial court.
89
Ruling/ WHEREFORE, the petition is granted; the questioned orders of the
Decision/ respondent judge are set aside and Civil Case No. is dismissed. Costs
Held against the private respondent. The petition is highly impressed with
merit.

The respondent judge recognized the restrictive doctrine of State

immunity when he said in his Order denying the defendants' (now
petitioners) motion: "A distinction should be made between a strictly
governmental function of the sovereign state from its private,
proprietary or... non-governmental acts." (Rollo, p. 20.) However,
the respondent judge also said: "It is the Court's considered opinion
that entering into a contract for the repair of wharves or shoreline
is certainly not a governmental function altho it may partake of a
public nature or... character.

The reliance placed on Lyons by the respondent judge is misplaced

It can thus be seen that the statement in respect of the waiver of

State immunity from suit was purely gratuitous and, therefore, obiter
so that it has no value as an imperative authority.

The restrictive application of State immunity is proper only when the

proceedings arise out of commercial transactions of the foreign
sovereign, its commercial activities or economic affairs. Stated
differently, a State may be said to have descended to the level of
an... individual and can thus be deemed to have tacitly given its
consent to be sued only when it enters into business contracts. It
does not apply where the contract relates to the exercise of its
sovereign functions. In this case the projects are an integral part
of the... naval base which is devoted to the defense of both the
United States and the Philippines, indisputably a function of the
government of the highest order; they are not utilized for nor
dedicated to commercial or business purposes.

In Syquia, the United States concluded contracts with private

individuals but the contracts notwithstanding the United States was
not deemed to have given or waived its consent to be sued for the
reason that the contracts were for jure imperii and not for jure...
gestionis.

Principles:

The traditional rule of State immunity exempts a State from being sued in
the courts of another State without its consent or waiver. This rule is a
necessary consequence of the principles of independence and equality of
States. However, the rules of International Law... are not petrified; they
are constantly developing and evolving. And because the activities of
states have multiplied, it has been necessary to distinguish them between
sovereign and governmental acts (jure imperii) and private, commercial and
proprietary acts (jure gestionis). The result is that State immunity now
extends only to acts jure imperii. The restrictive application of State
immunity is now the rule in the United States, the United Kingdom and other
states in western Europe.

That the correct test for the application of State immunity is not the
conclusion of a contract by a State but the legal nature of the act.

90
 RARA

Case Title G.R. No. L-33112 June 15, 1978

PHILIPPINE NATIONAL BANK, petitioner,

vs.
HON. JUDGE JAVIER PABALAN, Judge of the Court of First Instance,
Branch III, La Union, AGOO TOBACCO PLANTERS ASSOCIATION, INC.,
PHILIPPINE VIRGINIA TOBACCO ADMINISTRATION, and PANFILO P. JIMENEZ,
Deputy Sheriff, La Union, respondents
Fact/s The reliance of petitioner Philippine National Bank in this
certiorari and prohibition proceeding against respondent Judge Javier
Pabalan who issued a writ of execution, followed thereafter by a
notice of garnishment of the funds of respondent Philippine Virginia
Tobacco Administration, deposited with it, is on the fundamental
constitutional law doctrine of non-suability of a state, it being
alleged that such funds are public in character. This Court ruling in
accordance with the two previous cases of National Shipyard and Steel
Corporation and Manila Hotel Employees Association v. Manila Hotel
Company, that funds of publie corporations which can sue and be sued
were not exempt from garnishment. As respondent Philippine Virginia
Tobacco Administration is likewise a public corporation possessed of
the same attributes, a similar outcome is indicated. This petition
must be dismissed.

It is undisputed that the judgment against respondent Philippine

Virginia Tobacco Administration had reached the stage of finality. A
writ of execution was, therefore, in order. There was a notice of
garnishment for the full amount mentioned in such writ of execution
in the sum of P12,724,66. In view of the objection, however, by
petitioner Philippine National Bank on the above ground, coupled with
an inquiry as to whether or not respondent Philippine Virginia
Tobacco Administration had funds deposited with petitioner's La Union
branch, the order sought to be set aside in this certiorari
proceeding was issued by respondent Judge. Hence this certiorari and
prohibition proceeding.
Issue/s Whether the state can be sued without its consent.
Ruling/ WHEREFORE, this petition for certiorari and prohibition is dismissed.
Decision/ No costs.
Held
As noted at the outset, petitioner Philippine National Bank would
invoke the doctrine of non-suability. It is to be admitted that under
the present Constitution, what was formerly implicit as a fundamental
doctrine in constitutional law has been set forth in express terms:
"The State may not be sued without its consent.* If the funds
appertained to one of the regular departments or offices in the
government, then, certainly, such a provision would be a bar to
garnishment. Such is not the case here. Garnishment would lie. Only
last January, as noted in the opening paragraph of this decision,
this Court, in a case brought by the same petitioner precisely
invoking such a doctrine, left no doubt that the funds of public
corporations could properly be made the object of a notice of
garnishment. Accordingly, this petition must fail.

91
The alleged grave abuse of discretion, the basis of this certiorari
proceeding, was sought to be justified on the failure of respondent
Judge to set aside the notice of garnishment of funds belonging to
respondent Philippine Virginia Tobacco Administration. This excerpt
from the aforecited decision of Philippine National Bank v. Court of
Industrial Relations makes manifest why such an argument is far from
persuasive. "The premise that the funds could be spoken as public
character may be accepted in the sense that the People Homesite and
Housing Corporation was a government-owned entity. It does not follow
though that they were exempt. from garnishment. National Shipyard and
Steel Corporation v. Court of Industrial Relations is squarely in
point. As was explicitly stated in the opinion of the then Justice,
later Chief Justice, Concepcion: "The allegation to the effect that
the funds of the NASSCO are public funds of the government, and that,
as such, the same may not be garnished, attached or levied upon, is
untenable for, as a government owned and controlled corporation, the
NASSCO has a personality of its own. distinct and separate from that
of the Government. It has - pursuant to Section 2 of Executive Order
No. 356, dated October 23, 1950 .... pursuant to which The NASSCO has
been established - all the powers of a corporation under the
Corporation Law ..." Accordingly, it may be sue and be sued and may
be subiected to court processes just like any other corporation
(Section 13, Act No. 1459, as amended.)" ... To repeat, the ruling
was the appropriate remedy for the prevailing party which could
proceed against the funds of a corporate entity even if owned or
controlled by the government."

The National Shipyard and Steel Corporation decision was not the
first of its kind. The ruling therein could be inferred from the
judgment announced in Manila Hotel Employees Association v. Manila
Hotel Company, decided as far back as 1941. In the language of its
ponente Justice Ozaeta "On the other hand, it is well-settled that
when the government enters into commercial business, it abandons its
sovereign capacity and is to be treated like any other corporation.
By engaging in a particular business thru the instrumentality of a
corporation, the government divests itself pro hac vice of its
sovereign character, so as to render the corporation subject to the
rules of law governing private corporations." It is worth mentioning
that Justice Ozaeta could find support for such a pronouncement from
the leading American Supreme Court case of united States v. Planters'
Bank, with the opinion coming from the illustrious Chief Justice
Marshall. It was handed down more than one hundred fifty years ago,
1824 to be exact. It is apparent, therefore, that petitioner Bank
could it legally set forth as a bar or impediment to a notice of
garnishment the doctrine of non-suability.

92
 RARA

Case Title G.R. No. L-8670, May 18, 1956

EUTIQUIO BERMOY, ET AL., PLAINTIFFS-APPELLANTS,

V.S.
PHILIPPINE NORMAL COLLEGE, ET AL. DEFENDANTS-APPELLEES
Fact/s On July 6, 1954, twenty employees of the Philippine Normal College
(PNC), who were working as cooks, waiters, dishwasher, and in various
other capacities in its dormitory known as Normal Hall, filed an
action in the Court of First Instance of Manila against the said
Philippine Normal College and/or Philippine Normal School for the
recovery of salary differentials and overtime pay. The Solicitor
General filed an answer on behalf of the defendants denying the
latter's liability. But before the case was tried on the merits, the
court ordered it dismissed on the ground that neither one of the
defendants was a corporation or a juridical entity with capacity to
be sued.

Reconsideration of this order having been denied, plaintiffs took

this appeal to this Court, alleging that It was error to dismiss
their case on the ground mentioned.
Issue/s Is PNC, as a government corporation, sueable?
Ruling/ Wherefore, the order appealed from is revoked and the case remanded
Decision/ to the court of origin for further proceedings. No costs.
Held
Yes, PNC is sueable.

It enshired in Art. 16 Section 3 of the Constitution that "the State

may not be sued without its consent". As a rule, an instrumentality
of the state, in the discharge of its function, cannot be sued. The
exception to this rule is when the state gives its consent. Consent
can be express or implied. Express consent must be embodied in a duly
enacted statute.

In this case, the government has given express consent by investing

PNC with the express power "to sue or be sued in any court. It is
encoded in Section 6 of R.A 416 that "All process against the Board
of Trustees shall be served on the president or secretary thereof",
making it clear that PC can be sued.

93
 AJ

Case Title G.R. No. L-20869 August 28, 1975

ALICIA O. ARCEGA, assisted by her husband RAF. L. ARCEGA, doing

business under the firm name of "FAIRMONT ICE CREAM CO.," petitioner,
vs.
THE COURT OF APPEALS, THE CENTRAL BANK OF THE PHILIPPINES, and THE
PHILIPPINE NATIONAL BANK, respondents
Fact/s On August 17, 1956 the petitioner Alicia O. Arcega, doing business
under the firm name "Fairmont Ice Cream Company," filed a complaint
against the respondents Central Bank of the Philippines and
Philippine National Bank, for the refund, under four causes of
action, of the total sum of P18,030.13 representing allegedly
unauthorized payments made by her in the concept of the 17% special
excise tax on foreign exchange cover the costs and transportation and
other charges incident to the importation into the Philippines.

Philippine National Bank moved to dismiss the complaint on the ground

that it does not state a sufficient cause of action because, although
the PNB is being sued as an agent of the Central Bank, there is no
allegation in the complaint that it had contracted in its own name or
exceeded its authority as such agent, hence, even assuming that the
averments of the complaint could be established, it cannot be held
liable for the amount of the special excise tax it had collected from
the petitioner. The trial court denied the motion.

Central Bank also moved to dismiss the complaint on the grounds that:
(1) the trial court has no jurisdiction over the subject-matter of
the action, because the judgment sought will constitute a financial
charge against the Government, and therefore the suit is one against
the Government, which cannot prosper without its consent, and in this
case no such consent has been given;
(2) the complaint states no cause of action; and
(3) there is a misjoinder of party defendant, for neither the
Treasurer of the Philippines nor the Secretary of Finance was
impleaded as Party defendant, notwithstanding that either of them,
representing the Government of the Philippines, is an indispensable
party, not only because the foreign exchange tax accrued to the
National Treasury but also because, December 31, 1955, the expiry
date of the foreign exchange tax law, the authority to order the
refund of special excise taxes or to approve exemptions under the
foreign exchange tax law upon tie Secretary of Finance.

A certificate dated December 18, 1956 and signed by Jose Carmona,

Chief Accountant of the Central Bank, was attached as an annex to the
Central Bank's opposition, certifying "that the balance of
P7,137,747.71 as of December 29, 1955 of the total amount collected
as special excise tax on sales of foreign exchange was turned over to
the Treasurer of the Philippines on June 20, 1956."
Issue/s W/N Suability of the Central Bank for the refund of taxes collected
by it under Republic Act 601.
Ruling/ The Appeal was set aside. The case is remanded back to the original
Decision/ court for proper cause of action.
94
Held
The point however, is that the case dealt with the Central Bank (i.e.
a government agency by its charter can be sued)
Principle: Under Republic Act 601, as amended, the cost of
importations of" machinery, equipment, accessories and spare parts
for the use of industries, miners, mining enterprises, planters and
farmers" was exempt from the 17% foreign exchange tax, but the
complaint does not alleged

(a) when the corresponding letters of credit were opened,

(b) the kind of "machinery, equipment, accessories and spare parts"

imported by the petitioner to be used in her ice cream industry,

(c) when the goods arrived, and

(d) when the foreign exchange tax was paid.

The proper course of action the trial court should have taken was to
treat the motion to dismiss as one for a bill of particulars and
consequently require the plaintiff to submit a bill of particulars.

95
 AJ

Case Title G.R. No. L-55273-83 December 19, 1981

GAUDENCIO RAYO, BIENVINIDO PASCUAL, TOMAS MANUEL, MARIANO CRUZ, PEDRO

BARTOLOME, et.al, petitioners,
vs.
COURT OF FIRST INSTANCE OF BULACAN, BRANCH V, STA. MARIA, and
NATIONAL POWER CORPORATION, respondents
Fact/s At midnight of Oct. 26, 1978, during the of typyhoon "KADING",
National Power Corporation (NPC), acting through its plant
superintendent Benjamin Chavez, opened or caused to be opened
simultaneously all the 3 floodgates of the Angat Dam.

As a direct and immediate result of the sudden, precipitate and

simultaneous opening of said floodgates, several towns in Bulacan
were inundated. Hardest-hit was Norzagaray. About a hundred of its
residents died or were reported to have died and properties worth
millions were destroyed or washed away. Petitioners, victims of the
man-caused flood, filed with CFI Bulacan 11 complaints for damages
against NPC and plant superintendent Chavez.

NPC invoked in its answer that in the operation of the Angat Dam, it
is "performing a purely governmental function", hence it cannot be
sued without the express consent of the State." Petitioners opposed
NPC's prayer of dismissal and contended that NPC is performing not
governmental but merely proprietary functions and that under its own
organic act (Sec. 3(d) of RA 6395), it can sue and be sued in any
court. CFI Bulacan dismissed all of petitioner's complaints against
NPC leaving Chavez as sole party-defendant.

Petitioners filed a motion for reconsideration of the dismissal. CFI

denied the petitioner's motion for reconsideration. Hence, the
petition.
Issue/s Whether NPC performs a governmental function with respect to the
management and operation of the Angat Dam.
Ruling/ WHEREFORE, the petition is hereby granted; the Orders of the
Decision/ respondent court dated December 12, 1979 and October 3, 1980, are set
Held aside; and said court is ordered to reinstate the complaints of the
petitioners. Costs against the NPC.

It is not necessary to write an extended dissertation on whether or

not the NPC performs a governmental function with respect to the
management and operation of the Angat Dam. It is sufficient to say
that the government has organized a private corporation, put money in
it and has allowed it to sue and be sued in any court under its
charter. As a GOCC, it has a personality of its own, distinct and
separate from that of the Government.

The charter provision that the NPC can "sue and be sued in any court"
is without qualification on the cause of action and accordingly it
can include a tort claim such as the one instituted by the
petitioners.
96
 AJ

Case Title G.R. No. 70547 January 22, 1993

PHILIPPINE NATIONAL RAILWAYS and HONORIO CABARDO, petitioners,

vs.
INTERMEDIATE APPELLATE COURT, and BALIWAG TRANSIT, INC., respondents
Fact/s The passenger express train of Philippine National Railways (PNR) and
a passenger bus of Baliwag Transit Inc. collided at the railroad
crossing at Barrio Balungao, Calumpit Bulacan at 1:30 in the
afternoon of August 10, 1947 causing damage to the bus and its
passengers, 18 of whom died and 53 suffered physical injuries.
Plaintiff alleges that the collision was due to the negligence and
imprudence of PNR and its engineer Honorio Cirbado in operating in a
busy intersection without any bars, semaphores, signal lights,
flagman or switchman.
Issue/s 1) Who between the petitioner and respondent was negligent?

2) Is PNR immune from suit?

Ruling/ WHEREFORE, the petition is hereby DISMISSED and the decision of
Decision/ respondent court AFFIRMED.
Held
There is no admissible evidence to show that the bus driver did not
take necessary precaution in traversing the track. Contributory
negligence may not be ascribed to the bus driver for he had taken
necessary precautions before passing over the railway track. The
failure of PNR, on the other hand, to put a cross bar, or signal
light, flagman, or switchman or semaphores is evidence of negligence
on their part.

By the doctrine of implied powers, the power to sue and be sued is

implicit from the faculty to transact private business. PNR is not
exercising governmental powers; as such it is not immune from suit.

97
 AJ

Case Title G.R. No. L-5122 April 30, 1952

NATIONAL AIRPORTS CORPORATION, petitioner,

vs.
JOSE TEODORO, SR., as Judge of the Court of First Instance of Negros
Occidental and PHILIPPINE AIRLINES, INC., respondents
Fact/s The NAC was organized RA 224 and was abolished by EO 365 and replaced
by Civil Aeronautics Administration. Before the abolition, The
Philippine Airlines, Inc paid NAC P65,245 as fees for landing and
parking, and these are have been due and payable to Capitol
Subdivision Inc who owned the land by NAC, CSI owner commenced an
action in court of CFI of Negros Occidental against PAL to recover
the above amount.

PAL countered with a third party complaint against NAC and now CAA,
that third party plaintiff alleged that it had paid to the NAC the
fees claimed by CSI.

The solicitor general, after answering the third party complaint

filed a motion to dismiss on the ground that it lacks jurisdiction to
entertain the third party complaint, because NAC has lost its
judicial personality and because it is an agency of the Philippines.
Issue/s WON the NAC now CAA should be regarded as engaged in private
functions and subject to suit.
Ruling/ Wherefore, the petition is denied with costs against the Civil
Decision/ Aeronautics Administration.
Held
Yes, the SC ruled that the CAA comes under the category of a private
entity, because it is engaged in an enterprise which is far from
being the exclusive prerogative of state, and should not claim for
itself the privileges and immunities of the sovereign state.

98
 JULHANI

Case Title G.R. No. 84992 December 15,1989

PHILIPPINE ROCK INDUSTRIES, INC. petitioner,

vs.
BOARD OF LIQUIDATORS, as Liquidator of the defunct REPARATIONS
COMMISSION, respondents
Fact/s PHILROCK filed in the RTC of Manila a complaint against the Board of
Liquidators, as liquidator of the defunct REPACOM, for: (1) the
replacement of the defective rock pulverizing machinery purchased
from REPACOM, or, as alternative, to refund the purchase at 31% of
its contract price; (2) reparation for losses incurred due to the
increased expenses of maintaining the plant at Php5,000 a month and
Php4,000 per day as unrealized profits and exemplary damages; and (3)
Php50,000 attorney fees plus expenses and costs of the suit.

The RTC decided in favor of PHILROCK. The Solicitor General, in

behalf of the State, filed a notice of appeal on the ground that the
payment for damages are public funds, hence, exempt from attachment
and execution. Nevertheless, the RTC judge issued a Writ of
Execution. Subsequently the Board of Liquidators filed a petition for
certiorari and prohibition in the Court of Appeals where the Court of
Appeals set aside the -Writ of Execution by the RTC. Hence, this
petition for review.
Issue/s Whether or not the Board of Liquidators, as a government agency
without juridical capacity, may be sued and held liable as litigators
of REPACOM.
Ruling/ No. The Board of Liquidators is a government agency, created under
Decision/ E.O. 372 to administer the assets and pay the liabilities of the
Held defunct REPACOM, thus it has no juridical personality, separate and
distinct from the government, and therefore, as a general rule, suing
it is akin to suing the State. The State enjoys immunity from suit
except when it conducts business through a government-owned and
controlled corporation or a non-corporate agency set up primarily for
a business purpose, and even then, the State may not be liable for
damages since the purse of the State, or the disbursement of public
funds is in the discretion of the Legislature. The functions and
public services rendered by the State cannot be allowed to be
paralyzed or disrupted by the diversion of public funds from their
legitimate specific objectives, as appropriated by law. Although the
liability of REPACOM has been ascertained, the State is at liberty to
determine for itself how to satisfy such liability. Funds should be
appropriated by the Legislature for the specific purpose of
satisfying the judgement in favor of PHILROCK before said judgement
may be paid.

WHEREFORE, the decision of the Court of appeals is affirmed in toto.

The order of garnishment served by the Sheriff of Manila against
REPACOM's funds in the account of the Board of Liquidators in the
Philippine National Bank, is hereby declared null and void. No costs.

99
 JULHANI

Case Title G.R. No. 42204 January 21, 1993

HON. RAMON J. FAROLAN, JR., in his capacity as Commissioner of

Customs, petitioner,
vs.
COURT OF TAX APPEALS and BAGONG BUHAY TRADING, respondent
Fact/s On January 30, 1972, the vessel S/S ―Pacific Hawk‖ arrived at the
Port of Manila carrying, among others, 80 bales of screen net
consigned to Bagong Buhay Trading (Bagong Buhay).

Said importation was declared through a customs broker which was

classified under Tariff Heading No. 39.06-B of the Tariff and Customs
Code at 35% ad valorem. Since the customs examiner found the subject
shipment reflective of the declaration, Bagong Buhay paid the duties
and taxes due which was paid through the Bank of Asia.

Thereafter, the customs appraiser made a return of duty. Acting on

the strength of an information that the shipment consisted of
―mosquito net‖ made of nylon, the Office of the Collector of Customs
ordered a re-examination of the shipment which revealed that the
shipment consisted of 80 bales of screen net, each bale containing 20
rolls or a total of 1,600 rolls. The value of the shipment was re-
appraised.

Furthermore, the Collector of Customs determined the subject shipment

as made of synthetic (polyethylene) woven fabric classifiable under
Tariff Heading No. 51.04-B at 100% ad valorem.

Thus, Bagong Buhay Trading was assessed P272,600.00 as duties and

taxes due on the shipment in question. Since the shipment was also
misdeclared as to quantity and value, the Collector of Customs
forfeited the subject shipment in favor of the government which was
also affirmed by the Commissioner of Customs.

However, the Court of Tax Appeals reversed the decision of the

Commissioner declaring that the latter erred in imputing fraud upon
private respondent because fraud is never presumed and thus concluded
that the forfeiture of the articles in question was not in accordance
with law.

As a consequence, several motions were filed and private respondent

demands that the Bureau of Customs be ordered to pay for damages.
Issue/s Whether or not the Collector of Customs may be held liable.
Ruling/ WHEREFORE, the decision of the respondent Court of Tax Appeals is
Decision/ AFFIRMED. The Collector of Customs is directed to expeditiously re-
Held compute the customs duties applying Tariff Heading 39.02 at the rate
of 35% ad valorem on the 13,600 kilograms of polyethylene plastic
imported by private respondent.

The Bureau of Customs cannot be held liable for actual damages that
the private respondent sustained with regard to its goods. Otherwise,
to permit private respondent‘s claim to prosper would violate the
doctrine of sovereign immunity.
100
Since it demands that the Commissioner of Customs be ordered to pay
for actual damages it sustained, for which ultimately liability will
fall on the government, it is obvious that this case has been
converted technically into a suit against the state.

On this point, the political doctrine that ―the state may not be sued
without its consent,‖ categorically applies.

As an unincorporated government agency without any separate juridical

personality of its own, the Bureau of Customs enjoys immunity from
suit. Along with the Bureau of Internal Revenue, it is invested with
an inherent power of sovereignty, namely, taxation.

As an agency, the Bureau of Customs performs the governmental

function of collecting revenues which is definitely not a proprietary
function.

Thus, private respondent‘s claim for damages against the Commissioner

of Customs must fail.

101
 JULHANI

Case Title G.R. No. 175299 September 14, 2011

REPUBLIC OF THE PHILIPPINES, represented by the Department of Public

Works and Highways, through the Hon. Secretary, HERMOGENES EBDANE,
Petitioner,
vs.
ALBERTO A. DOMINGO, Respondent
Fact/s Alberto A. Domingo filed a Complaint for Specific Performance with
Damages[5] against the Department of Public Works and Highways
(DPWH), Region III,... Domingo averred that from April to September
1992, he entered into seven contracts with the DPWH Region III for
the lease of his construction equipment to said government agency.

which aimed to control the flow of lahar from Mt. Pinatubo in the
adjacent towns in the provinces of Tarlac and Pampanga. After the
completion of the projects, Domingo claimed that the unpaid rentals
of... the DPWH Region III amounted to P6,320,163.05. Despite repeated
demands, Domingo asserted that the DPWH Region III failed to pay its
obligations. Domingo was, thus, compelled to file the above case for
the payment of the P6,320,163.05 balance, plus P200,000.00 as moral
and... compensatory damages, P100,000.00 as exemplary damages, and
P200,000.00 as attorney's fees.

Thereafter, summons was issued by the RTC. The Proof of Service[8] of

the Sheriff dated May 9, 2002... through Nora Cortez, Clerk III...
as... shown by her signature and stamped mark received by said office
appearing on the original Summons.

the RTC rendered judgment... proven that [Domingo] is entitled to the

relief prayed for.

Domingo filed a Motion for Issuance of Writ of Execution... the RTC

granted the aforesaid motion of Domingo.[16] A Writ of Execution[17]
was then issued on March 24, 2003, commanding the sheriff to enforce
the RTC Decision... the Republic of the Philippines, represented by
the Office of the Solicitor General (OSG), filed with the Court of
Appeals a Petition for Annulment of Judgment with Prayer for the
Issuance of a Temporary Restraining Order and/or a Writ of
Preliminary Injunction.

the Republic averred that, under the law,... the statutory

representatives of the government for purposes of litigation are
either the Solicitor General or the Legal Service Branch of the
Executive Department concerned. Since no summons was issued to
either of said representatives, the trial court never acquired...
jurisdiction over the Republic.

the Court of Appeals promulgated its decision, dismissing the

Petition for Annulment of Judgment filed by the Republic.

The Republic reiterates that the service of summons upon the DPWH
102
 Region III alone was insufficient. According to the Republic, the
applicable rule of procedure in this... case is Section 13, Rule 14
of the Rules of Court, which mandates that when the defendant is the
Republic of the Philippines, the service of summons may be effected
on the Office of the Solicitor General (OSG).
Issue/s If in the act by which the Republic consents to be sued, no
designation is made as to the officer to be served with summons, then
the process can only be served upon the Solicitor General.

whether the Court of Appeals correctly dismissed the Petition for

Annulment of Judgment filed by the Republic.

the Republic argues that the RTC failed to acquire jurisdiction over
the former.
Ruling/ WHEREFORE, the petition is GRANTED. The Decision dated May 19, 2006
Decision/ and the Resolution dated October 25, 2006 of the Court of Appeals in
Held CA-G.R. SP No. 78813 are REVERSED. The Decision dated February 18,
2003 of the Regional Trial Court of Malolos, Bulacan, Branch 18, in
Civil Case No. 333-M-2002 is hereby ANNULLED and SET ASIDE, without
prejudice to the filing of the original action in the proper Regional
Trial Court.

The Court finds merit in the Republic's petition.

Section 13, Rule 14 of the Rules of Court states that:

When the defendant is the Republic of the Philippines, service may be

effected on the Solicitor General; in case of a province, city or
municipality, or like public corporations, service may be effected
on... its executive head, or on such other officer or officers as the
law or the court may direct.

In the instant case, the Complaint for Specific Performance with

Damages filed by Domingo specifically named as defendant the DPWH
Region III. As correctly argued by the Republic, the DPWH and its
regional office are merely the agents of the former (the Republic),
which is... the real party in interest in Civil Case No. 333-M-2002.
Thus, as mandated by Section 13, Rule 14 of the Rules of Court, the
summons in this case should have been served on the OSG.

Quite inexplicably, the Court of Appeals failed to apply, nay, to

even consider, the provisions of Section 13, Rule 14 of the Rules of
Court in rendering its assailed Decision. A perusal of the Decision
dated May 19, 2006 shows that the appellate court mainly...
dissertated regarding the functions and organizational structures of
the DPWH and the OSG, as provided for in the Revised Administrative
Code of 1987, in an attempt to demonstrate the relationship between
the DPWH and its regional offices, as well as to refute the claim
that the... service of summons upon the Republic should be made
exclusively upon the OSG. Such an oversight on the part of the Court
of Appeals is most unfortunate given the relevance and materiality of
Section 13, Rule 14 of the Rules of Court to the instant case, in
addition to the... fact that the Republic itself quoted the aforesaid
provision in its petition before the appellate court.

103
The Court, nonetheless, subscribes to the ruling of the Court of
Appeals that the Republic is not estopped from raising the issue of
jurisdiction in the case at bar in view of the alleged entry of
appearance of the OSG, in behalf of the Republic, in the other civil
cases... supposedly filed by Domingo against the DPWH Region III.

As held by the appellate court, the other civil cases presumably

pertained to transactions involving Domingo and the DPWH Region III,
which were totally different from the contracts involved in the
instant case. The... fact that the OSG entered its appearance in the
other civil cases, notwithstanding that the summons therein were only
served upon the DPWH Region III, has no bearing in the case now
before us. All this indicates is that, despite the improper service
of summons in these... other civil cases, there appeared to be notice
to the OSG and voluntary appearance on the latter's part.

In sum, the Court holds that the Republic was not validly served with
summons in Civil Case No. 333-M-2002. Hence, the RTC failed to
acquire jurisdiction over the person of the Republic. Consequently,
the proceedings had before the trial court and its Decision dated.

104
 ALZIE

Case Title G.R. No. L-15751 January 28, 1961

BUREAU OF PRINTING, SERAFIN SALVADOR and MARIANO LEDESMA,

petitioners,
vs.
THE BUREAU OF PRINTING EMPLOYEES ASSOCIATION (NLU), PACIFICO
ADVINCULA, ROBERTO MENDOZA, PONCIANO ARGANDA and TEODULO TOLERAN,
respondents
Fact/s he action in question was upon complaint of the respondent Bureau of
Printing Employees Association (NLU)... against herein petitioners
Bureau of

Printing,... The complaint alleged that Serafin Salvador and Mariano

Ledesma have been engaging in unfair labor practice by interfering
with,... or coercing the employees of the Bureau of Printing,
particularly the members of the complaining association, in the
exercise of their right to self-organization and discriminating in
regard to hire and tenure of their employment in order to discourage
them from pursuing their... union activities.

the petitioners... denied the charges of unfair labor practices

attributed to them and, by way of affirmative defenses, alleged,
among other things, that respondents... were suspended pending result
of an administrative investigation against them for breach of Civil
Service rules and regulations; that the Bureau of Printing has no
juridical personality to sue and be sued;... that said Bureau of

Printing is not an industrial concern engaged for the purpose of gain

but is an agency of the Republic performing governmental function
Issue/s that the Bureau of Printing has no juridical personality to sue and
be sued
Ruling/ WHEREFORE, the petition for a writ of prohibition is granted. The
Decision/ orders complained of are set aside and the complaint for unfair labor
Held practice against the petitioners is dismissed, with costs against
respondents other than the respondent court.

Clearly, while the Bureau of Printing is allowed to undertake private

printing jobs, it cannot be pretended that it is thereby an
industrial... or business concern. The additional work it executes
for private parties is merely incidental to its function, and
although such work may be deemed proprietary in character, there is
no showing that the employees performing said proprietary function
are separate and distinct... from those employed in its general
governmental functions.

indeed, as an office of the Government, without any corporate or

juridical personality, the Bureau of Printing cannot be sued

Any suit, action or proceeding against it, if it were to produce any

effect, would actually be a suit, action or... proceeding against the
Government itself, and the rule is settled that the Government cannot
105
be sued without its consent, much less over its objection.

Said administrative charges are for insubordination,... grave

misconduct and acts prejudicial to public service committed by
inciting the employees of the Bureau of Printing to walk out of their
jobs against the order of the duly constituted officials. Under the
law, the Heads of Departments and Bureaus are authorized to
institute... and investigate administrative charges against erring
subordinates.

106
 ALZIE

Case Title G.R. No. L-23139 December 17, 1966

MOBIL PHILIPPINES EXPLORATION, INC., plaintiff-appellant,

vs.
CUSTOMS ARRASTRE SERVICE and BUREAU of CUSTOMS, defendants-appellees
Fact/s Four cases of rotary drill parts were shipped from abroad on S.S.
"Leoville" sometime in November of 1962, consigned to Mobil
Philippines Exploration, Inc., Manila. The shipment arrived at the
Port of Manila on April 10, 1963, and was discharged to the custody
of the Customs Arrastre Service, the unit of the Bureau of Customs
then handling arrastre operations therein. The Customs Arrastre
Service later delivered to the broker of the consignee three cases
only of the shipment.

On April 4, 1964 Mobil Philippines Exploration, Inc., filed suit in

the Court of First Instance of Manila against the Customs Arrastre
Service and the Bureau of Customs to recover the value of the
undelivered case in the amount of P18, 493.37 plus other damages. On
April 20, 1964 the defendants filed a motion to dismiss the complaint
on the ground that not being persons under the law, defendants cannot
be sued.
On April 25, 1964, after plaintiff opposed the motion, the court,
dismissed the complaint on the ground that neither the Customs
Arrastre Service nor the Bureau of Customs is suable.

Four cases of rotary drill parts were shipped from abroad on S.S.
―Leoville‖, consigned to Mobile Philippines Exploration, Inc. Manila.
The shipment was discharged to the custody of the Customs Arrastre
Service, the unit of the Bureau of Customs then handling arrastre
operations therein. The Customs Arrastre Service later delivered to
the broker of the consignee three cases only of the shipment.
Issue/s Whether or not State immunity applies in this case.
Ruling/ WHEREFORE, the order of dismissal appealed from is hereby affirmed,
Decision/ with costs against appellant. So ordered.
Held The court stated that a being non-corporate government entity in performing
a proprietary function in nature does not always result to be sued. If said
non-governmental function is undertaken as an incident to its governmental
function, there is no waiver thereby of the sovereign immunity from suit
extended to such government entity. The Bureau of Customs is part of the
Department of Finance with no personality of its own apart from that of the
national government. Its primary function is governmental, that of assessing
and collecting lawful revenues from imported articles and all other tariff
and customs duties, fees, charges, fines and penalties. To this function,
arrastre service is a necessary incident. For practical reasons said
revenues and customs duties cannot be assessed and collected by simply
receiving the importer's or ship agent's or consignee's declaration of
merchandise being imported and imposing the duty provided in the Tariff law.
Customs authorities and officers must see to it that the declaration tallies
with the merchandise actually landed. And this checking up requires that the
landed merchandise be hauled from the ship's side to a suitable place in the
customs premises to enable said customs officers to make it, that is, it
requires arrastre operations. According to the court, Bureau of Customs,
acting as part of the machinery of the national government in the operation
of the arrastre service, pursuant to express legislative mandate and as a
necessary incident of its prime governmental function, is immune from suit,
there being no statute to the contrary.
107
 ALZIE

Case Title G.R. No. 179918 September 8, 2010

SHELL PHILIPPINES EXPLORATION B.V., represented by its Managing

Director, Jeremy Cliff, Petitioner,
vs.
EFREN JALOS, JOVEN CAMPANG, ARNALDO MIJARES, CARLITO TRIVINO, LUCIANO
ASERON, CHARLITO ALDOVINO, ROBERTO FADERA, et.al, Respondents
Fact/s On December 11, 1990 petitioner Shell Philippines Exploration B.V.
(Shell) and the Republic of the Philippines entered into Service
Contract 38 for the exploration and extraction of petroleum in
northwestern Palawan. Two years later, Shell discovered natural gas
in the Camago-Malampaya area and pursued its development of the well
under the Malampaya Natural Gas Project.

This entailed the construction and installation of a pipeline from

Shell‘s production platform to its gas processing plant in Batangas.
The pipeline spanned 504 kilometers and crossed the Oriental Mindoro
Sea. Respondents Efren Jalos, Joven Campang, Arnaldo Mijares, and 75
other individuals (Jalos, et al) filed a complaint for damages
against Shell before the RTC.

They claimed that they were all subsistence fishermen from the
coastal barangay of Bansud, Oriental Mindoro whose livelihood was
adversely affected by the construction and operation of Shell‘s
natural gas pipeline. Jalos, et al claimed that their fish catch
became few after the construction of the pipeline. They said that
"the pipeline greatly affected biogenically hard-structured
communities such as coral reefs and led [to] stress to the marine
life in the Mindoro Sea." They now have to stay longer and farther
out at sea to catch fish, as the pipeline‘s operation has driven the
fish population out of coastal waters. Shell moved for dismissal of
the complaint. It alleged that the trial court had no jurisdiction
over the action, as it is a "pollution case" under Republic Act
(R.A.) 3931, as amended by Presidential Decree (P.D.) 984 or the
Pollution Control Law.

Under these statutes, the Pollution Adjudication Board (PAB) has

primary jurisdiction over pollution cases and actions for related
damages. Shell also claimed that it could not be sued pursuant to the
doctrine of state immunity without the State‘s consent. Shell said
that under Service Contract 38, it served merely as an agent of the
Philippine government in the development of the Malampaya gas
reserves. Moreover, said Shell, the complaint failed to state a cause
of action since it did not specify any actionable wrong or particular
act or omission on Shell‘s part that could have caused the alleged
injury to Jalos, et al.

The complaint likewise failed to comply with requirements of a valid

class suit, verification and certification against forum shopping,
and the requisites for a suit brought by pauper litigants. RTC
dismissed the complaint. CA upheld the jurisdiction of the RTC over
the action. It said that Shell was not being sued for committing
pollution, but for constructing and operating a natural gas pipeline
108
 that caused fish decline and considerable reduction in the
fishermen‘s income. The claim for damages was thus based on a quasi-
delict over which the regular courts have jurisdiction.

The CA also rejected Shell‘s assertion that the suit was actually
against the State. It observed that the government was not even
impleaded as party defendant. CA also held that the complaint
sufficiently alleged an actionable wrong. CA held that Jalos, et al
substantially complied with the technical requirements for filing the
action. But since they failed to prove the requisites of a class
suit, only those who have verified the complaint should be deemed
party plaintiffs.
Issue/s Whether or not the complaint is a pollution case that falls within
the primary jurisdiction of the PAB.
Ruling/ WHEREFORE, the Court GRANTS the petition and REVERSES the decision of
Decision/ the Court of Appeals in CA-G.R. CV 82404 dated November 20, 2006.
Held Respondent Efren Jalos, et al’s complaint for damages against Shell
Philippines Exploration B.V. in Civil Case P-1818-03 of the Regional
Trial Court, Branch 41, Pinamalayan, Oriental Mindoro is ordered
DISMISSED without prejudice to its refiling with the Pollution
Adjudication Board or PAB.

Yes. Although the complaint of Jalos, et al does not use the word
"pollution" in describing the cause of the alleged fish decline in
the Mindoro Sea, it is unmistakable based on their allegations that
Shell‘s pipeline produced some kind of poison or emission that drove
the fish away from the coastal areas. While the complaint did not
specifically attribute to Shell any specific act of "pollution," it
alleged that "the pipeline greatly affected biogenically hard-
structured communities such as coral reefs and led [to] stress to the
marine life in the Mindoro Sea." This constitutes "pollution" as
defined by law.
Section 2(a) of P.D. 984 defines "pollution" as "any alteration
of the physical, chemical and biological properties of any
water x x x as will or is likely to create or render such water
x x x harmful, detrimental or injurious to public health,
safety or welfare or which will adversely affect their
utilization for domestic, commercial, industrial, agricultural,
recreational or other legitimate purposes."
It is clear from this definition that the stress to marine life
claimed by Jalos, et al is caused by some kind of pollution emanating
from Shell‘s natural gas pipeline. The pipeline, they said, "greatly
affected" or altered the natural habitat of fish and affected the
coastal waters‘ natural function as fishing grounds. Inevitably, in
resolving Jalos, et al‘s claim for damages, the proper tribunal must
determine whether or not the operation of the pipeline adversely
altered the coastal waters‘ properties and negatively affected its
life sustaining function.

The power and expertise needed to determine such issue lies with the
PAB. To this extent, the failure of Jalos, et al to allege in their
complaint that they had first taken resort to PAB before going to
court means that they failed to state a cause of action that the RTC
could act on. This warranted the dismissal of their action. Petition
granted.
109
 KONG

Case Title G.R. No. 171673 : May 30, 2011

BANAHAW BROADCASTING CORPORATION, Petitioner,

v.
CAYETANO PACANA III, NOE U. DACER, JOHNNY B. RACAZA, LEONARDO S.
OREVILLO, ARACELI T. LIBRE, GENOVEVO E. ROMITMAN, PORFERIA M.
VALMORES, MENELEO G. LACTUAN, DIONISIO G. BANGGA, FRANCISCO D. MANGA,
NESTOR A. AMPLAYO, LEILANI B. GASATAYA, LORETA G. LACTUAN, RICARDO B.
PIDO, RESIGOLO M. NACUA and ANACLETO C. REMEDIO, Respondents.
Fact/s On June 21, 1996, Labor Arbiter (LA) decided in favour of the DXWG
personnel. Both, parties, however, appealed to the National Labor
Relations Commission (NLRC).

On May 15, 1997, a Motion to Dismiss, Release, Waiver and Quitclaim,

was jointly filed by IBC and the DXWG personnel based on the latter's
admission that IBC is not their employer as it does not own DXWG-
Iligan City. The NLRC granted the Motion with respect to IBC. BBC
filed an MR.

On December 12, 1997, the NLRC issued a Resolution vacating the

Decision of LA and remanding the case to the arbitration branch of
origin on the ground that while nmons, ordered to submit a position
paper, and furnished a copy of the assailed decision.
On October 15, 1998, the new LA rendered a Decision adjudging BBC to
be liable for the same amount discussed in the vacated original
Decision of the previous LA.

Both BBC and respondents appealed to the NLRC. BBC challenged the
moneta award itself. In the same Memorandum of Appeal, BBC
incorporated a Motion for the Recomputation of the Monetary Award (of
the Labor Arbiter), in order that the appeal bond may be reduced.

On September 16, 1999, the NLRC issued an Order Denying the Motion
for the Recomputation of the Monetary Award.

The NLRC ordered BBC to post the required bond within 10 days from
receipt of said Order, with a warning that noncompliance will cause
the dismissal of the appeal for non-perfection. Instead of complying
with the Order to post the required bond, BBC filed a Motion for
Reconsideration, alleging this time that since it is wholly owned by
the Republic of the Philippines, it need not post an appeal bond.

On November 22, 1999, the NLRC rendered its Decision. In said

Decision, the NLRC denied the MR of BBC and accordingly dismissed the
appeal of BBC for non-perfection.

BBC filed an MR which was denied by the NLRC.

BBC filed with the CA a Petition for Certiorari under Rule 65.

On April 15, 2005, the CA rendered the assailed Decision denying BBC
Petition for Certiorari. The CA held that BBC, though owned by the
government, is a corporation with a personality distinct from the
110
 Republic or any of its agencies or instrumentalities, and therefore
do not partake in the latter's exemption from the posting of appeal
bonds.

The Court of Appeals denied the MR. Hence, this Petition for Review.
Issue/s Whether BBC is exempt from posting an appeal bond.
Ruling/ Petition denied.
Decision/
Held GOCCs NOT EXEMPT FROM POSTING BOND

Generally, the government and all the attached agencies with no legal
personality distinct from the former are exempt from posting appeal
bonds, whereas government-owned and controlled corporations (GOCCs)
are not similarly exempted except if it is sued in relation to its
governmental functions.

Here, BBC was organized as a private corporation, sequestered in the

1980s and the ownership of which was subsequently transferred to the
government. Its primary function is to engage in commercial radio and
television broadcasting. It is therefore clear that BBCs function is
commercial or proprietary and not governmental.As such, BBC is not
entitled to an exemption from the posting of an appeal bond.

FAILURE TO POST BOND CONSTITUTED NON-PERFECTIC OF APPEAL

In case of a judgment involving a monetary award, an appeal by the

employer may be perfected only upon the posting of a cash or surety
bond issued by a reputable bonding company duly accredited by the
Commission in the amount equivalent to the monetary award in the
judgment appealed from. The posting of the appeal bond within the
period provided by law is not merely mandatory but jurisdictional.
The failure on the part of BBC to perfect the appeal thus had the
effect of rendering the judgment final and executory.

111
 KONG

Case Title G.R. Nos. L-8895 and L-9191 April 30, 1957

SALVADOR A. ARANETA, ETC., ET AL., petitioners,

vs.
THE HON. MAGNO S. GATMAITAN, ETC., ET AL., respondents.

EXEQUIEL SORIANO, ET AL., petitioners-appellees,

vs.
SALVADOR ARANETA, ETC., ET AL., respondents-appellants.
Fact/s The President issued EO 22 - prohibiting the use of trawls in San
Miguel Bay, and the EO 66 and 80 as amendments to EO 22, as a
response for the general clamor among the majority of people living
in the coastal towns of San Miguel Bay that the said resources of the
area are in danger of major depletion because of the effects of trawl
fishing.

A group of Otter trawl operators took the matter to the court by

filing a complaint for injunction and/or declaratory relief with
preliminary injunction with the Court of First Instance of Manila,
docketed as Civil Case No. 24867, praying that a writ of preliminary
injunction be issued to restrain the Secretary of Agriculture and
Natural Resources and the Director of Fisheries from enforcing said
executive order; to declare the same null and void, and for such
other relief as may be just and equitable in the premises.
Issue/s Whether Executive Orders Nos. 22, 66 and 80 were valid, for the
issuance thereof was not in the exercise of legislative powers unduly
delegated to the President.
Ruling/ Yes. Wherefore, and on the strength of the foregoing considerations
Decision/ We render judgement, as follows:
Held
(a) Declaring that the issues involved in case G.R. No. L-8895 have
become moot, as no writ of preliminary injunction has been issued by
this Court the respondent Judge of the Court of First Instance of
Manila Branch XIV, from enforcing his order of March 3, 1955; and

(b) Reversing the decision appealed from in case G. R. No. L-9191;

dissolving the writ of injunction prayed for in the lower court by
plaintiffs, if any has been actually issued by the court a quo; and
declaring Executive Orders Nos. 22, 66 and 80, series of 1954, valid
for having been issued by authority of the Constitution, the Revised
Administrative Code and the Fisheries Act.

Without pronouncement as to costs. It is so ordered.

As already held by this Court, the true distinction between

delegation of the power to legislate and the conferring of authority
or discretion as to the execution of law consists in that the former
necessary involves a discretion as to what the law shall be, while in
the latter the authority or discretion as to its execution has to be
exercised under and in pursuance of the law.

The first cannot be done; to the latter no valid objection can be

made. In the case of U. S. vs. Ang Tang Ho, 43 Phil. 1, We also held,
112
the power to delegate the Legislature cannot delegate legislative
power to enact any law. If Act No. 2868 is a law unto itself, and it
does nothing more than to authorize the Governor-General to make
rules and regulations to carry it into effect, then the Legislature
created the law. There is no delegation of power and it is valid.

On the other hand, if the act within itself does not define a crime
and is not complete, and some legislative act remains to be done to
make it a law or a crime, the doing of which is vested in the
Governor-General, the act is delegation of legislative power, is
unconstitutional and void. Congress provided under the Fisheries Act
that
a.) it is unlawful to take or catch fry or fish eggs in the
waters of the Philippines and

b.) it authorizes Sec. of Agriculture and Natural Resources to

provide regulations/ restrictions as may be deemed necessary.
The Act was complete in itself and leaves it to the Sec. to
carry into effect its legislative intent.

The President did nothing but show an anxious regard for the welfare
of the inhabitants and dispose of issues of general concern which
were in consonance and strict conformity with law.

113
 KONG

Case Title G.R. No. 182431 February 27, 2013

LAND BANK OF THE PHILIPPINES, Petitioner,

vs.
ESTHER ANSON RIVERA, ANTONIO G. ANSON AND CESAR G. ANSON, Respondents
Fact/s Motion for Reconsideration[1] filed by the Land Bank of the
Philippines (LBP) alleging error on the part of this Court in
affirming the award of 12% interest on just compensation due to the
landowner.

The respondents are the co-owners of a parcel of agricultural land...

that was placed under the Operation Land Transfer pursuant to

Presidential Decree No. 27 in 1972. Only 18.8704 hectares of the

total area of 20.5254 hectares were subject of the coverage.

After the Department of Agrarian Reform (DAR) directed payment, LBP

approved the payment of P265,494.20, exclusive of the advance
payments made in the form of lease rental amounting to P75,415.88 but
inclusive of 6% increment of P191,876.99 pursuant to DAR
Administrative Order No. 13, series of 1994.

On 1 December 1994, the respondents instituted Civil Case No. 94-03

for determination and payment of just compensation before the
Regional Trial Court (RTC), Branch 3 of Legaspi City, claiming that
the landholding involved was irrigated with two cropping seasons a
year with an... average gross production per season of 100 cavans of
50 kilos/hectare, equivalent of 200 cavans/year/hectare; and that the
fair market value of the property was not less than
P130,000.00/hectare, or P2,668,302.00 for the entire landholding of
20.5254... hectares.
Issue/s WON the 12% interest is justified.
Ruling/ WHEREFORE, premises considered, we PARTIALLY GRANT the petitioner's
Decision/ Motion for Reconsideration. The Decision dated 17 November 2010 of
Held the Court's First Division is hereby MODIFIED. The petitioner Land
Bank of the Philippines is hereby ORDERED to pay Esther Anson Rivera,
Antonio G. Anson and Cesar G. Anson ₱1,846,373.70 as final just
compensation plus interest at the rate of 12% per annum from the
finality of this decision until full payment.

The Trial Court's Ruling

ACCORDINGLY, the just compensation of the land partly covered by TCT
No. T-95690 is fixed at Php1,297,710. 63. Land Bank of the
Philippines is hereby ordered to pay Esther Anson, Cesar Anson and
Antonio Anson the aforesaid value of the land, plus... interest of
12% per annum or Php194.36 per day effective October 7, 2004, until
the value is fully paid, in cash or in bond or in any other mode of
payment at the option of the landowners in accordance with Sec. 18,
R.A. 6657.[5]

The Court of Appeals' Ruling

WHEREFORE, the DECISION DATED OCTOBER 6, 2004 is MODIFIED, ordering
petitioner LAND BANK OF THE PHILIPPINES to pay to the respondents
114
just compensation (inclusive of interests as of October 6, 2004) in
the amount of P823, 957.23, plus interest of 12% per annum in the
amount of P515, 777.57 or P61, 893.30 per annum, beginning October 7,
2004 until just compensation is fully paid in accordance with this
decision. Costs of suit to be paid by the petitioner.
17 November 2010 Decision, this Court partly granted the prayers of
LBP and deleted the costs adjudged. We agreed that the bank was
indeed performing a governmental function in agrarian reform
proceeding pursuant to Section 1, Rule 142[8] of the Rules of
Court.[9] However, we upheld the imposition of 12% interest on the
just compensation beginning 7 October 2004 until full payment.
WHEREFORE, premises considered, the petition is GRANTED. The
decision of the Court of Appeals in C.A. G.R. SP No. 87463 dated 9
October 2007 is AFFIRMED with the MODIFICATION that LBP is hereby
held exempted from the payment of costs... of suit. In all other
respects, the Decision of the Court of Appeals is AFFIRMED. No
costs.
WHEREFORE, premises considered, we PARTIALLY GRANT the petitioner's
Motion for Reconsideration. The Decision dated 17 November 2010 of
the Court's First Division is hereby MODIFIED.
The petitioner Land Bank of the Philippines is hereby ORDERED to pay
Esther Anson Rivera, Antonio G. Anson and Cesar G. Anson
P1,846,373.70 as final just compensation plus interest at the rate of
12% per annum from the finality of this decision until full...
payment.
Constitutional Law: Expropriation
The constitutional limitation of "just compensation" is considered to
be the sum equivalent to the market value of the property, broadly
described to be the price fixed by the seller in open market in the
usual and ordinary course of legal action and competition or the fair
value of the property as between one who receives, and one who
desires to sell, if fixed at the time of the actual taking by the
government. Thus, if property is taken for public use before
compensation is deposited with the court having jurisdiction over the
case, the final compensation must include interest on its just value
to be computed from the time the property is taken to the time when
compensation is actually paid or deposited with the court.In fine,
between the taking of the property and the actual payment, legal
interests accrue in o to place the owner in a position as good as
(but not better than) the position he was in before the taking
occurred.

However, as regards the costs of suit, Land Bank is exempt. Rule 142
Costs Section 1.Costs ordinarily follow results of suit. Unless
otherwise provided in these rules, costs shall be allowed to the
prevailing party as a matter of coursebut the court shall have power,
for special reasons adjudge that either party shall pay the costs of
an action, or that the same be divided, as may be equitable. No costs
shall be allowed against the Republic of thePhilippines unless
otherwise provided by law.

Since LBP is performing a governmental function in agrarian reform proceeding,

it is exempt from the payment of costs of suit as provided under Rule 142,
Section 1 of the Rules of Court

115
 SUELYN

Case Title GREGORIO SARASOLA, plaintiff-appellant,

vs.
WENCESLAO TRINIDAD, Collector of Internal Revenue of the Philippine
Islands, defendant-appellee
G.R. No. L-14595 October 11, 1919
Fact/s Sarasola filed a complaint for injunction to restrain the Collector
(Trinidad) of Internal Revenue from the alleged illegal collection of
taxes. CIR interposed a demurrer to the complaint on the following
grounds:
a. Court had no jurisdiction of the subject matter because of the
provisions of the Sec. 1578 of the Administrative Code;
b. Facts stated in the complaint did not entitle the plaintiff to the
relief demanded.
The laws in question in this case are Secs. 1578-1579 of the
Administrative Code of 1917 which states:

Sec. 1578: Injunction not available to restrain collection of tax – No

court shall have authority to grant an injunction to restrain the collection
of any internal revenue tax.

Sec. 1579: Recovery of tax paid under protest – When the validity of any tax
is questioned, or its amount disputed, or other question raised as to
liability therefore, the person against whom or against whose property the
same is sought to be enforced shall pay the tax under instant protest, or
upon protest within 10 days, and shall request the decision of the Collector
of Internal Revenue. If the decision of the Collector of Internal Revenue is
adverse, or if no decision is made by him within 6 months from the date when
his decision was requested, the taxpayer may proceed, at any time within 2
years after the payment of the tax, to bring an action against the Collector
of Internal Revenue for the recovery ―without interest‖ of the sum alleged to
have been illegally collected, the process to be
served upon him, upon the provincial treasurer, or upon the officer
collecting the tax.
Judge of CFI sustained the demurrer (basing his decision from
Churchill case).
Sarasola argued that the provisions under Secs. 1578-1579 are
unconstitutional since it prohibits the courts from granting an
injunction to restrain the collection of internal revenue taxes (Sec.
1578) and that it disallows interest on the internal revenue taxes in
the sum alleged to have been illegally collected (Sec. 1579).
Issue/s Whether an interest can be imposed against the State in cases of
recovery of taxes illegally collected.
Or simply, whether or not the words ―without interest‖ is
constitutional.
Ruling/ YES. It is constitutional. It is well settled both on principle and
Decision/ authority that interest is not to be awarded against a sovereign
Held government unless its consent has been manifested by an Act of its
Legislature or by a lawful contract of its executive officers. If
there be doubt upon the subject, that doubt must be resolved in favor
of the State. The state never pays interest unless she expressly
engages to do so.
Our own statute not only does not authorize interest but negatives
the payment of interest. The law is valid, or that Sarasola has not
proven such a case of irreparable injury as would warrant the
issuance of the extraordinary writ of execution.
116
 SUELYN

Case Title MUNICIPALITY OF SAN FERNANDO, LA UNION, petitioner

vs.
HON. JUDGE ROMEO N. FIRME, JUANA RIMANDO-BANIÑA, IAUREANO BANIÑA,
JR., SOR MARIETA BANIÑA, MONTANO BANIÑA, ORJA BANIÑA, AND LYDIA R.
BANIÑA, respondents
G.R. No. L-52179 April 8, 1991
Fact/s Municipality cannot be held liable for the torts committed by its
regular employee, who was then engaged in the discharge of
governmental functions.

While private respondents Juana Rimando-Baniña, Laureano Baniña Jr.,

Sor Marietta Baniña, Montano Baniña, Orja Baniña and Lydia R. Baniña
are heirs of the deceased Laureano Baniña Sr. and plaintiffs in Civil

Case Collision among (1)

At about 7 o'clock in the morning of December 16,1965, a collision

occurred involving a passenger jeepney... driven by Bernardo Balagot
and owned by the Estate of Macario Nieveras

(2)... a gravel and sand truck driven by Jose Manandeg and owned by
Tanquilino Velasquez

(3)... and a dump truck of... the Municipality of San Fernando, La

Union and driven by Alfredo Bislig.

several passengers of the jeepney including Laureano Baniña Sr. died

as a result of the injuries they sustained and four (4) others
suffered varying degrees of physical... injuries.

the private respondents instituted a complaint for damages against

the Estate of Macario Nieveras and Bernardo Balagot, owner and
driver, respectively, of the passenger jeepney,... Jeepney driver, &
owner in their defense filed a case against Municipality of San
fernando.

However, the aforesaid defendants filed a Third Party Complaint

against the petitioner and the driver of a dump truck of petitioner.

the private respondents amended the complaint wherein the petitioner

and... its regular employee, Alfredo Bislig were impleaded for the
first time as defendants. Petitioner filed its answer and raised
affirmative defenses such as... lack of cause of action,... non-
suability of the State

In the case at bar, the respondent judge deferred the resolution of

the defense of non-suability of the State amounting to lack of
jurisdiction until trial. However, said respondent judge failed to
resolve such defense, proceeded with the trial and thereafter
rendered a... decision against the municipality and its driver.
Issue/s Whether or not the respondent court committed grave abuse of
discretion when it deferred and failed to resolve the defense of non-
117
 suability of the State amounting to lack of jurisdiction in a motion
to dismiss.
Ruling/ The respondent judge did not commit grave abuse of discretion when in
Decision/ the exercise of its judgment it arbitrarily failed to resolve the
Held vital issue of non-suability of the State in the guise of the
municipality.

However, said judge acted in excess of his jurisdiction when... in

his decision dated October 10, 1979 he held the municipality liable
for the quasi-delict committed by its regular employee.

Anent the issue of whether or not the municipality is liable for the
torts committed by its employee, the test of liability of the
municipality depends on whether or not the driver, acting in behalf
of the municipality, is performing governmental or proprietary
functions.

the distinction of powers becomes important for purposes of

determining the liability of the municipality for the acts of its
agents which result in an injury to third... persons.

It has already been remarked that municipal corporations are suable

because their charters grant them the competence to sue and be sued.
Nevertheless, they are generally not liable for torts committed by
them in the discharge of governmental functions and can be held...
answerable only if it can be shown that they were acting in a
proprietary capacity.

In permitting such entities to be sued, the State merely gives the

claimant the right to show that the defendant was not acting in its
governmental capacity when the injury was committed or... that the
case comes under the exceptions recognized by law. Failing this, the
claimant cannot recover.

In the case at bar, the driver of the dump truck of the municipality
insists that "he was on his way to the Naguilian river to get a load
of sand and gravel for the repair of San Fernando's municipal
streets."

Hence, We rule that the driver of the dump truck was performing
duties or tasks pertaining to... his office.

"the construction or maintenance of roads in which the truck and the

driver worked at the time of the accident are... admittedly
governmental activities."

After a careful examination of existing laws and jurisprudence, We

arrive at the conclusion that the municipality cannot be held liable
for the torts committed by its regular employee, who was then engaged
in the discharge of governmental functions.

ACCORDINGLY, the petition is GRANTED and the decision of the

respondent court is hereby modified, absolving the petitioner
municipality of any liability in favor of private respondents. SO
ORDERED.
118
Consent to be sued broken down in simple terms:

The doctrine of non-suability of the State is expressly provided for in

Article XVI, Section 3 of the Constitution, to wit: "the State may not
be sued without its consent."

Stated in simple parlance, the general rule is that the State may not be
sued except when it gives consent to be sued. Consent takes the form of
express or implied consent.

Express consent may be embodied in a general law or a special law. The

standing consent of the State to be sued in case of money claims
involving liability arising from contracts is found in Act No. 3083. A
special law may be passed to enable a person to sue the... government
for an alleged quasi-delict, as in Merritt v. Government of the
Philippine Islands (34 Phil 311). (see United States of America v.
Guinto, G.R. No. 76607, February 26, 1990, 182 SCRA 644, 654)

Consent is implied when the government enters into business contracts,

thereby descending to the level of the other contracting party, and also
when the State files a complaint, thus opening itself to a counterclaim.

Municipal Corporations and their suability

Municipal corporations, for example, like provinces and cities, are

agencies of the State when they are engaged in governmental functions
and therefore should enjoy the sovereign immunity from suit.
Nevertheless, they are subject to suit even in the performance of
such... functions because their charter provides that they can sue and
be sued.

SUABILITY v LIABILITY

A distinction should first be made between suability and liability.

"Suability depends on the consent of the state to be sued, liability on
the applicable law and the established facts. The circumstance that a
state is suable does not necessarily mean that it is... liable; on the
other hand, it can never be held liable if it does not first consent to
be sued. Liability is not conceded by the mere fact that the state has
allowed itself to be sued. When the state does waive its sovereign
immunity, it is only giving the plaintiff... the chance to prove, if it
can, that the defendant is liable." (United States of America v. Guinto,
supra, p. 659-660)

Liability of municipal corporations

It has already been remarked that municipal corporations are suable
because their charters grant them the competence to sue and be sued.
Nevertheless, they are generally not liable for torts committed by them
in the discharge of governmental functions and can be held... answerable
only if it can be shown that they were acting in a proprietary capacity.

In permitting such entities to be sued, the State merely gives the

claimant the right to show that the defendant was not acting in its
governmental capacity when the injury was committed or... that the case
comes under the exceptions recognized by law. Failing this, the
claimant cannot recover.
119
 SUELYN

Case Title REPUBLIC OF THE PHILIPPINES, petitioner,

vs.
HON. GUILLERMO P. VILLASOR, as Judge of the Court of First Instance
of Cebu, Branch I, THE PROVINCIAL SHERIFF OF RIZAL, THE SHERIFF OF
QUEZON CITY, and THE SHERIFF OF THE CITY OF MANILA, THE CLERK OF
COURT, Court of First Instance of Cebu, P. J. KIENER CO., LTD.,
GAVINO UNCHUAN, AND INTERNATIONAL CONSTRUCTION CORPORATION,
respondents
G.R. No. L-30671 November 28, 1973
Fact/s A decision was rendered in a Special Proceeding against the Republic
of the Philippines thereby confirming the arbitration award of
P1,712,396.40 in favor of respondent corporation. After the decision
became final and executory, respondent judge issued an order
directing the sheriff to execute the said decision, and the
corresponding alias writ of execution was thus issued.
Hence the sheriff served notices of garnishment with several banks
especially the monies due to the AFP in the form of deposits
sufficient to cover the amount mentioned in the writ. PNB and
Philippine Veterans Bank received such notice. As certified by the
AFP Comptroller, these funds of the AFP with the said banks are
public funds for the pensions, pay, and allowances of its military
and civilian personnel.
The petitioner, in this certiorari and prohibition proceedings,
challenges the validity of the Order issued by Judge Villasor
declaring the decision final and executory and subsequently issuing
an alias writ of execution directed against the funds of the AFP in
pursuance thereof.
Issue/s May the writs of execution and notices of garnishment be sued against
public funds?
Ruling/ NO. Although the State may give its consent to be sued by private
Decision/ parties, there is corollary that public funds cannot be the object of
Held garnishment proceedings even if the consent to be sued has been
previously granted and the state‗s liability has been adjudged.

Thus in the case of Commission of Public Highways vs. San Diego, such
a well settled doctrine was restated in the opinion of Justice
Teehankee. The universal rule that where the state gives its consent
to be sued by private parties either by general or special law, it
may limit claimant‗s action only up to the completion of proceedings
anterior to the stage of execution and that the power of the courts
ends when the judgment is rendered, since the government funds and
properties may not be seized under writs of execution or garnishment
to satisfy such judgment, is based on obvious considerations of
public policy. Disbursement of public funds must be covered by the
corresponding appropriations as required by law. The functions and
public services rendered by the State cannot be allowed to be
paralyzed or disrupted by diversion of public funds from their
legitimate and specific object is appropriated by law.
WHEREFORE, the writs of certiorari and prohibition are granted, nullifying and
setting aside both the order of June 24, 1969 declaring executory the decision
of July 3, 1961 as well as the alias writ of execution issued thereunder. The
preliminary injunction issued by this Court on July 12, 1969 is hereby made
permanent.

120
 SUELYN

Case Title LAUDENCIO TORIO, GUILLERMO EVANGELISTA, MANUEL DE GUZMAN, ALFONSO R.

MAGSANOC, JESUS MACARANAS, MAXIMO MANANGAN, FIDEL MONTEMAYOR, MELCHOR
VIRAY, RAMON TULAGAN, all Members of the Municipal Council of
Malasiqui in 1959, Malasiqui, Pangasinan, Petitioners,
v.
ROSALINA, ANGELINA, LEONARDO, EDUARDO, ARTEMIO, ANGELITA, ANITA,
ERNESTO, NORMA, VIRGINIA, REMEDIOS and ROBERTO, all surnamed
FONTANILLA, and THE HONORABLE COURT OF APPEALS, Respondents
G.R. No. L-29993 October 23, 1978
Fact/s On October 21, 1978, the municipal council of Malasiqui, Pangasinan
passed 2 resolutions: one for management of the town fiesta
celebration and the other for the creation of the Malasiqui Town
Fiesta Executive Committee. The Executive Committee, in turn,
organized a sub-committee on entertainment and stage with Jose
Macaraeg as Chairman. The council appropriated the amount of P100.00
for the construction of 2 stages, one for the "zarzuela" and another
for the cancionan. While the zarzuela was being held, the stage
collapsed. Vicente Fontanilla was pinned underneath and died in the
afternoon of the following day. Fontanilla‘s heirs filed a complaint
for damages with the CFI of Manila. The defendants were the
municipality, the municipal council and the municipal council
members. In its Answer, defendant municipality argued that as a
legally and duly organized public corporation it performs sovereign
functions and the holding of a town fiesta was an exercise of its
governmental functions from which no liability can arise to answer
for the negligence of any of its agents.
Issue/s Whether or not the Municipality of Malasiqui may be held liable.
Ruling/ Yes. The Municipality of Malasiqui was held liable. PREMISES
Decision/ CONSIDERED, We AFFIRM in too the decision of the Court of Appeals
Held insofar as the Municipality of Malasiqui is concerned (L-30183), and
We absolve the municipal councilors from liability and SET ASIDE the
judgment against them (L-29993).

The Court of Appeals in its decision now under review held that the
celebration of a town fiesta by the Municipality of Malasiqui was not
a governmental function. We upheld that ruling. The legal consequence
thereof is that the Municipality stands on the same footing as an
ordinary private corporation with the municipal council acting as its
board of directors. It is an elementary principle that a corporation
has a personality, separate and distinct from its officers,
directors, or persons composing it 26 and the latter are not as a
rule co-responsible in an action for damages for tort or negligence
(culpa aquiliana) committed by the corporation‘s employees or agents
unless there is a showing of bad faith or gross or wanton negligence
on their part.

Under the doctrine of respondent superior, petitioner-municipality is

liable for damages for the death of Vicente Fontanilla because the
accident was attributable to the negligence of the municipality's
officers, employees, or agents.

121
 JIMBOL

Case Title G.R. No. 120385 October 17, 1996

REPUBLIC OF THE PHILIPPINES, represented by ASSET PRIVATIZATION

TRUST, petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION, HON. EDUARDO J. CARPIO, and
PANTRANCO ASSOCIATION OF CONCERNED EMPLOYEES UNION, respondents
Fact/s Pantranco North Express, Inc. (PNEI) was one of the companies
sequestered by the Presidential Commission on Good Government after
the 1986 EDSA uprising. Subsequently, its management was transferred
from the National Investment Development Corp. to APT, which
recommended its privatization in order to prevent it from incurring
further losses. As part of the privatization scheme, some 500
employees were retrenched. Consequently, a series of labor-related
suits was instituted by PNEI employees against their employer before
the NLRC. These are:

Case #1: Members of the Pantranco Employees Association (PEA-PTGWO)

filed a complaint for unfair labor practice, among other claims,
against PNEI. Hon. Carpio of NLRC ruled in favor of the employees and
directed the Sheriff to execute the writ of execution he had issued
earlier. However, the Sheriff was only able to collect P22,300.00
through the sale of the levied assets of PNEI, which left PNEI with a
balance of P68.95 million. As such, the Sheriff served a notice of
garnishment to the deposits of both PNEI or APT in The Land Bank to
cover the balance. But instead of complying, The Land Bank said the
funds of APT were public in nature, hence should not be subject to
garnishment.

Case #2: Members of the Pantranco Association of Concerned Employees

Union (PACEU) filed a complaint for the non-payment of benefits
against PNEI, APT, and DOTC. Similar to the first case, the Labor
Arbiter ruled in favor of the employees and directed the respondent
agencies to pay P39.74 million. By virtue of the writ of execution
issued by the court, the levied assets of PNEI were sold and yielded
P1.2 million. Meanwhile, PEA-PTGWO filed a Motion for Intervention
before the Labor Arbiter, enjoining the sale of PNEI assets in favor
of PACEU because PNEI still owed members of PEA-PTGWO the sum of
P68.95 million (see case #1).

Case #3: Antonio Cabugao, a PNEI employee, filed before the NLRC a
complaint for non-payment of benefits against his employer. Yet
again, the NLRC ruled in his favor and directed PNEI to pay him
P208,954.60. A writ of execution was similarly issued by the court.

But even before any assets of PNEI and APT could be garnished or
levied for sale to satisfy the judgment in case #3, APT filed this
instant petition before the SC, enjoining the courts from
implementing the writs of execution issued in all three cases against
PNEI. Subsequently, the SC issued a TRO preventing the concerned
Sheriffs from implementing any of the aforementioned writs of
execution against APT.
122
Issue/s Whether or not APT, a government instrument that manages a
government-owned company, should be held liable for the latter's
obligations.
Ruling/ WHEREFORE, the petition is GRANTED. The notice of garnishment
Decision/ directed against the funds of APT is NULLIFIED and the temporary
Held restraining order issued by this Court is made PERMANENT. No costs.

No, the Court held that even if express consent to be sued was
provided by APT by way of Proclamation No. 50, such consent does not
amount to automatic liability on the part of APT. All that such a
consent does is to provide the other parties an opportunity to be
heard. Claimants' actions are limited only up to the completion of
the proceedings anterior to the stage of execution. Too, the power of
the courts ends when a judgment has been rendered, since government
funds cannot be seized under warrants of execution or garnishment.

Similarly, the Court held that since all it does is serve as a

conservator of PNEI's assets, APT should not be held solidarily
liable with PNEI's obligations. Therefore, all the writs of execution
and notices of garnishment should be directed only to PNEI and not to
include APT because the two are not one and the same. As such, APT's
petition before the SC is granted, which means all writs of execution
and notices of garnishment against APT in line with PNEI's
obligations are reversed, and the TRO enjoining enjoining the
concerned Sherrifs from looking into the assets of APT is hereby made
permanent.

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Case Title G.R. No. L-10659 January 31, 1958

LEONARDO PALAFOX, et.al, plaintiffs and Appellants,

vs.
PROVINCE OF ILOCOS NORTE, THE DISTRICT ENGINEER AND THE PROVINCIAL
TREASURER, Defendant and Appellees
Fact/s Sabas Torralba was employed as the driver of Ilocos Norte and
detailed to the Office of the District Engineer. While driving his
truck, Sabas ran over Proceto Palafox resulting to the latter‘s
death. Sabas was prosecuted for homicide through reckless imprudence
to which he pleaded guilty. The heirs of Palafox instituted a civil
case against him, the Province, the District Engineer and the
Provincial Treasurer.
Issue/s Whether or not the Province of Ilocos Norte can be held liable.

Ruling/ NO. The general rule is that local government units are not liable
Decision/ for negligent acts of its employees while they are performing
Held governmental functions or duties. In this case, the driver was
involved in the construction or maintenance of roads which was a
governmental duty. Therefore, the province cannot be held liable for
his negligent act. However tragic and deplorable it may be, the death
of Palafox imposed on the province no duty to pay monetary
consideration. (Palafox v. Province of Ilocos Norte, 102 Phil 1186)

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Case Title G.R. No. L-7048 January 12, 1912

THE MUNICIPALITY OF MONCADA, plaintiff-appellee,

vs.
PIO CAJUIGAN, ET AL., defendants-appellants.
Fact/s The municipalities of Moncada and the defendant, Pio Cajuigan,
entered into a contract of lease whereby the plaintiff leased to this
defendant certain fish ponds situated within the jurisdiction of that
municipality for the term embracing July 1, 1908, to June 30,
1909,for which this defendant agreed to pay P3710, in quarterly
installments. Failing upon compliance will abrogate the contract of
lease.

The lessee failed to meet his payments as provided in the contract of

lease, petitioned for and received an extension, first until October
1, 1908, and second until November 30 of the same year. Defendant
Cajuigan claims to have offered the payment twice and both was
rejected. The lease was declared rescinded by the municipal council
on November 30, 1908, and on or about the sixth day of thefollowing
month the plaintiff, through its officials, entered the property and
ejected the defendant and his tenants. Subsequently thereto and on
February 15, 1910, this complaint was filed by the plaintiff, wherein
judgment was asked against the defendant Pio Cajuigan as principal,
and Florentino Sugui, Juan Isla, and Antero Alegado as sureties, for
the sum of P3,710, together with penalties, interest, and costs.

The plaintiff further asked the court to declare that the property of
the sureties described in the complaint be sold to satisfy the
judgment thus asked in case it was not satisfied otherwise.
Allegations were denied, as for the defendants, it is the plaintiff‘s
special defense that the failure to pay the rents as stipulated in
the lease was not due to the fault of the defendant, but to that of
the plaintiff, so as compensation, the defendants asked by way of
cross-complaint damages, however, was denied.

The defendants appealed and made assignment of errors in regards to

the lower court‘s decision as the claims were addressed duly through
witnesses and the court.
Issue/s Whether or not the plaintiff is liable to the assigned errors by the
defendants
Ruling/ Yes. Counsel of the defendants appear to be of the opinion that under
Decision/ no circumstances can a judgment be entered against thelessee's
Held bondsmen in this case for the reason that said bondsmen obligated
themselves to pay the rents in the case the lessee failedto pay by
the end of the term of the lease, and for the further reason that the
lessee was evicted before the said term expired. Inreference to this
point, it is sufficient to say that this action was not instituted
until long after the full term of the lease had expired.

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Case Title G.R. No. 167000 June 8, 2011

GOVERNMENT SERVICE INSURANCE SYSTEM (GSIS), Petitioner,

vs.
GROUP MANAGEMENT CORPORATION (GMC) AND LAPU-LAPU DEVELOPMENT &
HOUSING Corporation (LLDHc), Respondents

x - - - - - - - - - - - - - - - - - - - - - - -x

G.R. No. 169971

GROUP MANAGEMENT CORPORATION (GMC), Petitioner,

vs.
LAPU-LAPU DEVELOPMENT & HOUSING Corporation (LLDHc) and GOVERNMENT
SERVICE INSURANCE SYSTEM (GSIS), Respondents
Fact/s That the exemption of GSIS is not absolute and does not encompass all
of its funds, to wit: In so far as Section 39 of the GSIS charter
exempts the GSIS from execution, suffice it to say that such
exemption is not absolute and does not encompass all the GSIS funds.
THUS, IT MAY SUE AND BE SUED, AS ALSO, EXPLICITLYGRANTED BY ITS
CHARTER. TO SAY, WHERE PROPER, UNDER SECTION 36, THE GSIS MAY BE HELD
LIABLE FORTHE CONTRACTS IT HAS ENTERED INTO IN THE COURSE OF ITS
BUSINESS INVESTMENTS. For GSIS cannot claim aspecial immunity from
liability in regard to its business ventures under said Section. Nor
can it deny contracting parties, in our view, the right of redress
and the enforcement of a claim, particularly as it arises from a
purely contractual relationship, of a private character between an
individual and the GSIS.

G.R. No. 167000

- GSIS is assailing the Orders issued by the Lapu-Lapu RTC on
March 11, 2004 and May 7, 2004 for being legally unenforceable
on GSIS because the titles of the 78 lots in Marigondon, Lapu-
Lapu City were already in LLDHC‘s name, due to the final and
executory judgment rendered by the Manila RTC in Civil Case No.
R-82-3429
- LLDHC alleges that because of this "supervening event," GSIS
cannot be compelled to execute a final deed of sale in GMC‘s
favor, and "LLDHC cannot be divested of its titles, ownership
and possession" of the subject properties.
- GMC in its comment argues that GSIS has no legal standing to
institute this petition because it hasno more interest in the
subject lots, since it is no longer in possession and the
titles thereto have already been registered in LLDHC‘s name.
- GMC claims that the decision of the Special Nineteenth Division
of the Court of Appeals is barredby res judicata, and that
LLDHC is guilty of forum shopping for filing several petitions
before theCourt of Appeals and this Court with the same issues
and arguments.
-
G.R. No. 169971
- GMC is praying that the decision of the Special Nineteenth
Division of the Court of Appeals in CA-G.R. SP No. 84382 be
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 reversed and set aside.
- GMC is claiming that the Court of Appeals, in rendering the
said decision, committed
- LLDHC in its comment insists that there is a supervening event
which rendered it necessary to staythe execution of the
judgment of the Lapu-Lapu RTC
Issue/s Whether or not the decision of the Manila RTC in Civil Case No. R-82-
3429 constitutes a superveningevent, which should be admitted as an
exception to the doctrine of finality of judgments.

Whether or not the September 23, 2005 Decision of the Special

Nineteenth Division of the Court ofAppeals in CA-G.R. SP No. 84382
and GSIS‘s Petition in G.R. No. 167000 are barred by res judicata.

Whether or not there is a legal and physical impossibility for GSIS

to comply with the March 11, 2004and May 7, 2004 Orders of the Lapu-
Lapu RTC in Civil Case No. 2203-L.

Whether or not LLDHC and GSIS are guilty of forum shopping.

Ruling/ WHEREFORE, in view of the foregoing, the petition in G.R. No. 167000
Decision/ is DENIED and the Decision dated November 25, 2004 and Resolution
Held dated January 20, 2005 of the Twentieth Division of the Court of
Appeals are AFFIRMED. The petition in G.R. No. 169971 is GRANTED and
the Decision dated September 23, 2005 of the Special Nineteenth
Division of the Court of Appeals is hereby REVERSED AND SET ASIDE.

Although it is settled that the Lapu-Lapu RTC Decision was not in any
way nullified by the Manila RTC Decision, it is this Court‘s duty to
resolve the legal implications of having two conflicting, final, and
executory decisions in existence.

In summary, this Court finds the execution of the Lapu-Lapu RTC

Decision in Civil Case No. 2203-Lto be in order. We affirm the
assailed Orders of March 11, 2004 and May 7, 2004, which reiterate,
among others, the October 23, 1997 Order issued by the Lapu-Lapu RTC,
directing the Register of Deeds of Lapu-Lapu City to cancel the
certificates of title of LLDHC and to issue new ones in GMC‘s name.
Whatever rights are due LLDHC from GSIS as a result of the final judgment of
the Manila RTC in Civil Case No. R-82-3429, which we have previously
held to be binding between GSIS and LLDHC, may be threshed out in an
appropriate proceeding. Such proceeding shall not further delay the
execution of the Lapu-Lapu RTC Decision.

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