CALLADO VS.

IRRI The grant of immunity to IRRI is clear and unequivocal and an express waiver by its Director-
G.R. No. 106483, May 22 1995, 244 SCRA 210 General is the only way by which it may relinquish or abandon this immunity.

FACTS: On the matter of waiving its immunity from suit, IRRI had, early on, made its position clear.
Petitioner Ernesto Callado was employed as a driver at the International Rice Research Institute Through counsel, the Institute wrote the Labor Arbiter categorically informing him that the Institute
(IRRI). On February 11, 1990, while driving an IRRI vehicle on an official trip to the Ninoy Aquino will not waive its diplomatic immunity.
International Airport and back to the IRRI, petitioner figured in an accident. After evaluating
petitioner's answer, explanations and other evidence by IRRI's Human THE HOLY SEE vs. THE HON. ERIBERTO U. ROSARIO, JR., as Presiding Judge of the
ResourceDevelopment Department Manager, the latter issued a Notice of Termination to petitioner Regional Trial Court of Makati, Branch 61 and STARBRIGHT SALES ENTERPRISES, INC.
on December 7, 1990. G.R. No. 101949 December 1, 1994

FACTS:
Petitioner then filed a complaint before the Labor Arbiter for illegal dismissal, illegal suspension
and indemnity pay with moral and exemplary damages and attorney's fees. Private respondent Petitioner is the Holy See who exercises sovereignty over the Vatican City in Rome, Italy, and is
likewise informed the Labor Arbiter, through counsel, that the Institute enjoys immunity from legal represented in the Philippines by the Papal Nuncio; Private respondent, Starbright Sales
process by virtue of Article 3 of Presidential Decree No. 1620, and that it invokes such diplomatic Enterprises, Inc., is a domestic corporation engaged in the real estate business.
immunity and privileges as an international organization in the instant case filed by petitioner, not This petition arose from a controversy over a parcel of land consisting of 6,000 square meters
having waived the same. located in the Municipality of Paranaque registered in the name of petitioner. Said lot was
contiguous with two other lots registered in the name of the Philippine Realty Corporation (PRC).
However, the Labor Arbiter finds private respondent IRRI to have waived its immunity considered The three lots were sold to Ramon Licup, through Msgr. Domingo A. Cirilos, Jr., acting as agent to
the defense of immunity no longer a legal obstacle in resolving the case. the sellers. Later, Licup assigned his rights to the sale to private respondent.
In view of the refusal of the squatters to vacate the lots sold to private respondent, a dispute arose as
ISSUE: to who of the parties has the responsibility of evicting and clearing the land of squatters.
Whether or not IRRI waived its immunity from suit in this dispute which arose from an employer- Complicating the relations of the parties was the sale by petitioner of Lot 5-A to Tropicana
employee relationship. Properties and Development Corporation (Tropicana).
private respondent filed a complaint with the Regional Trial Court, Branch 61, Makati, Metro
HELD: Manila for annulment of the sale of the three parcels of land, and specific performance and
The Court ruled in the negative and vote to dismiss the petition. Theres no merit in petitioner's damages against petitioner, represented by the Papal Nuncio, and three other defendants: namely,
arguments, thus IRRI's immunity from suit is undisputed. Presidential Decree No. 1620, Article 3 Msgr. Domingo A. Cirilos, Jr., the PRC and Tropicana
provides: petitioner and Msgr. Cirilos separately moved to dismiss the complaint petitioner for lack of
Immunity from Legal Process. The Institute shall enjoy immunity from any penal, jurisdiction based on sovereign immunity from suit, and Msgr. Cirilos for being an improper party.
civil and administrative proceedings, except insofar as that immunity has been An opposition to the motion was filed by private respondent.
expressly waived by the Director-General of the Institute or his authorized the trial court issued an order denying, among others, petitioners motion to dismiss after finding
representatives. that petitioner shed off [its] sovereign immunity by entering into the business contract in question
Petitioner forthwith elevated the matter to us. In its petition, petitioner invokes the privilege of
sovereign immunity only on its own behalf and on behalf of its official representative, the Papal dispose off the same because the squatters living thereon made it almost impossible for petitioner to
Nuncio. use it for the purpose of the donation. The fact that squatters have occupied and are still occupying
the lot, and that they stubbornly refuse to leave the premises, has been admitted by private
ISSUE: respondent in its complaint
Private respondent is not left without any legal remedy for the redress of its grievances. Under both
Whether the Holy See is immune from suit insofar as its business relations regarding selling a lot to Public International Law and Transnational Law, a person who feels aggrieved by the acts of a
a private entity foreign sovereign can ask his own government to espouse his cause through diplomatic channels.
Private respondent can ask the Philippine government, through the Foreign Office, to espouse its
RULING: claims against the Holy See. Its first task is to persuade the Philippine government to take up with
the Holy See the validity of its claims. Of course, the Foreign Office shall first make a
The Republic of the Philippines has accorded the Holy See the status of a foreign sovereign. The determination of the impact of its espousal on the relations between the Philippine government and
Holy See, through its Ambassador, the Papal Nuncio, has had diplomatic representations with the the Holy See (Young, Remedies of Private Claimants Against Foreign States, Selected Readings on
Philippine government since 1957 (Rollo, p. 87). This appears to be the universal practice in Protection by Law of Private Foreign Investments 905, 919 [1964]). Once the Philippine
international relations. government decides to espouse the claim, the latter ceases to be a private cause.
There are two conflicting concepts of sovereign immunity, each widely held and firmly established. WHEREFORE, the petition for certiorari is GRANTED and the complaint in Civil Case No. 90-
According to the classical or absolute theory, a sovereign cannot, without its consent, be made a 183 against petitioner is DISMISSED.
respondent in the courts of another sovereign. According to the newer or restrictive theory, the
immunity of the sovereign is recognized only with regard to public acts or acts jure imperii of a
state, but not with regard to private acts or acts jure gestionis
If the act is in pursuit of a sovereign activity, or an incident thereof, then it is an act jure imperii,
especially when it is not undertaken for gain or profit.
In the case at bench, if petitioner has bought and sold lands in the ordinary course of a real estate REPUBLIC OF INDONESIA VS VINZON
business, surely the said transaction can be categorized as an act jure gestionis. However, G.R. No. 154705 405 SCRA 126 June 26, 2003
petitioner has denied that the acquisition and subsequent disposal of Lot 5-A were made for THE REPUBLIC OF INDONESIA, HIS EXCELLENCY AMBASSADOR SOERATMIN, and
profit but claimed that it acquired said property for the site of its mission or the Apostolic MINISTER COUNSELLOR AZHARI KASIM, petitioners,
Nunciature in the Philippines. Private respondent failed to dispute said claim. vs.
Lot 5-A was acquired by petitioner as a donation from the Archdiocese of Manila. The donation JAMES VINZON, doing business under the name and style of VINZON TRADE AND
was made not for commercial purpose, but for the use of petitioner to construct thereon the official SERVICES, respondent.
place of residence of the Papal Nuncio. The right of a foreign sovereign to acquire property, real or Facts:
personal, in a receiving state, necessary for the creation and maintenance of its diplomatic mission,
is recognized in the 1961 Vienna Convention on Diplomatic Relations (Arts. 20-22). This treaty This is a petition for review of the decision made by Court of Appeals in ruling that the Republic of
was concurred in by the Philippine Senate and entered into force in the Philippines on November Indonesia gave its consent to be sued and voluntarily submitted itself to the laws and jurisdiction of
15, 1965. Philippine courts and that petitioners Ambassador Soeratmin and Minister Counsellor Kasim
The decision to transfer the property and the subsequent disposal thereof are likewise clothed with a waived their immunity from suit.
governmental character. Petitioner did not sell Lot 5-A for profit or gain. It merely wanted to
Petitioner, Republic of Indonesia, represented by its Counsellor, Siti Partinah, entered into a
Maintenance Agreement with respondent James Vinzon, sole proprietor of Vinzon Trade and
Services. The equipment covered by the Maintenance Agreement are air conditioning units and was
to take effect in a period of four years.
When Indonesian Minister Counsellor Kasim assumed the position of Chief of Administration, he
allegedly found respondents work and services unsatisfactory and not in compliance with the
standards set in the Maintenance Agreement. Hence, the Indonesian Embassy terminated the
agreement.
The respondent claims that the aforesaid termination was arbitrary and unlawful. Hence, he filed a
complaint against the petitioners which opposed by invoking immunity from suit.
Issues:
Whether or not the Republic of Indonesia can invoke the doctrine of sovereign immunity from suit.
Whether or not petitioners Ambassador Soeratmin and Minister Counsellor Kasim may be sued
herein in their private capacities.
Discussions:
The rule that a State may not be sued without its consent is a necessary consequence of the
principles of independence and equality of States. The practical justification for the doctrine of
sovereign immunity is that there can be no legal right against the authority that makes the law on
which the right depends. In the case of foreign States, the rule is derived from the principle of the
sovereign equality of States, as expressed in the maxim par in parem non habet imperium. All states
are sovereign equals and cannot assert jurisdiction over one another.] A contrary attitude would
unduly vex the peace of nations.
The rules of International Law, however, are not unbending or immune to change. The increasing
need of sovereign States to enter into purely commercial activities remotely connected with the
discharge of their governmental functions brought about a new concept of sovereign immunity. This
concept, the restrictive theory, holds that the immunity of the sovereign is recognized only with
regard to public acts or acts jure imperii (public acts of the government of a state), but not with
regard to private acts or acts jure gestionis (the commercial activities of a state.)
Rulings:
The Supreme Court ruled that the republic of Indonesia cannot be deemed to have waived its
immunity to suit. The mere entering into a contract by a foreign state with a private party cannot be
construed as the ultimate test of whether or not it is an act juri imperii or juri gestionis. Such act is
only the start of the inquiry. There is no dispute that the establishment of a diplomatic mission is an
act juri imperii. The state may enter into contracts with private entities to maintain the premises,
furnishings and equipment of the embassy. The Republic of Indonesia is acting in pursuit of a
sovereign activity when it entered into a contract with the respondent. The maintenance agreement
was entered into by the Republic of Indonesia in the discharge of its governmental functions. It
cannot be deemed to have waived its immunity from suit.
Article 31 of the Vienna Convention on Diplomatic Relations provides that a diplomatic agent shall
enjoy immunity from the criminal jurisidiction of the receiving State. He shall also enjoy immunity
from its civil and administrative jurisdiction, except in the case of:
1. a real action relating to private immovable property situated in the territory of the receiving State,
unless he holds it on behalf of the sending State for the purposes of the mission;
2. an action relating to succession in which the diplomatic agent is involved as executor,
administrator, heir or legatee as a private person and not on behalf of the sending State;
3. an action relating to any professional or commercial activity exercised by the diplomatic agent in
the receiving State outside his official functions.
The Solicitor General believes that said act may fall under subparagraph (c) thereof, but said
provision clearly applies only to a situation where the diplomatic agent engages in any professional
or commercial activity outside official functions, which is not the case herein.
USA and Bradford v. Hon. Luis R. Reyes and Montoya
[219 SCRA 192, March 1, 1993]
G.R. No. 79253
Facts:
 Private respondent [Montoya] is an American citizen was employed as an identification
(I.D.) checker at the U.S. Navy Exchange (NEX) at the Joint United States Military Assistance
Group (JUSMAG) headquarters in Quezon City. Petitioner [Bradford] also worked at NEX
JUSMAG as an activity manager. There was an incident on 22 January 1987 whereby Bradford
had Montoyas person and belongings searched in front of many curious onlookers. This caused
Montoya to feel aggrieved and to file a suit for damages.
Contentions:
Bradford claimed that she was immune from suit because:
1) (This) action is in effect a suit against the United States of America, a foreign \\\\\
2) sovereign immune from suit without its consent for the cause of action pleaded in the
complaint; and
2) Defendant, Maxine Bradford, as manager of the US Navy Exchange Branch at
JUSMAG, Quezon City, is immune from suit for act(s) done by her in the performance of
her official functions under the Philippines-United States Military Assistance Agreement of
1947 and Military Bases Agreement of 1947, as amended.
Montoya argued that:
(a) Bradford, in ordering the search upon her person and belongings outside the
NEX JUSMAG store in the presence of onlookers, had committed an improper,
unlawful and highly discriminatory act against a Filipino employee and had
exceeded the scope of her authority; (b) having exceeded her authority, Bradford
cannot rely on the sovereign immunity of the public petitioner because her liability
is personal; (c) Philippine courts are vested with jurisdiction over the case because
Bradford is a civilian employee who had committed the challenged act outside the
U.S. Military Bases; such act is not one of those exempted from the jurisdiction of
Philippine courts; and (d) Philippine courts can inquire into the factual
circumstances of the case to determine whether or not Bradford had acted within or
outside the scope of her authority.
The doctrine of state immunity is at the core of this controversy.
Doctrine of State Immunity:
The doctrine of state immunity and the exceptions thereto are summarized in Shauf vs. Court of
Appeals, thus:
I. The rule that a state may not be sued without its consent, now expressed in
Article XVI Section 3, of the 1987 Constitution, is one of the generally accepted
principles of international law that we have adopted as part of the law of our land
under Article II, Section 2. This latter provision merely reiterates a policy earlier
embodied in the 1935 and 1973 Constitutions and also intended to manifest our
resolve to abide by the rules of the international community.
While the doctrine appears to prohibit only suits against the state without its
consent, it is also applicable to complaints filed against officials of the state for
acts allegedly performed by them in the discharge of their duties. The rule is that if
the judgment against such officials will require the state itself to perform an
affirmative act to satisfy the same, such as the appropriation of the amount needed
to pay the damages awarded against them, the suit must be regarded as against the
state itself although it has not been formally impleaded. It must be noted, however,
that the rule is not so all-encompassing as to be applicable under all
circumstances.
It is a different matter where the public official is made to account in his capacity
as such for acts contrary to law and injurious to the rights of plaintiff. As was
clearly set forth by Justice Zaldivar in Director of the Bureau of
Telecommunications, et al. vs. Aligaen, etc., et al. "Inasmuch as the State
authorizes only legal acts by its officers, unauthorized acts of government officials
or officers are not acts of the State, and an action against the officials or officers
by one whose rights 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. In the same tenor, it has been said that an action at law or suit in equity
against a State officer or the director of a State department on the ground that,
while claiming to act or the State, he violates or invades the personal and property
rights of the plaintiff, under an unconstitutional act or under an assumption of
authority which he does not have, is not a suit against the State within the
constitutional provision that the State may not be sued without its consent." The
 rationale for this ruling is that the doctrinaire of state immunity cannot be used as
an instrument for perpetrating an injustice.
In the case of Baer, etc. vs. Tizon, etc., et al., it was ruled that:
There should be no misinterpretation of the scope of the decision
reached by this Court. Petitioner, as the Commander of the
United States Naval Base in Olongapo, does not possess
diplomatic immunity. He may therefore be proceeded against in
his personal capacity, or when the action taken by him cannot be
imputed to the government which he represents.
Also, in Animos, et al. vs. Philippine Veterans Affairs Office, et al., we held that:
. . . it is equally well-settled that where a litigation may have
adverse consequences on the public treasury, whether in the
disbursements of funds or loss of property, the public official
proceeded against not being liable in his personal capacity, then
the doctrine of non-suability may appropriately be invoked. It has
no application, however, where the suit against such a
functionary had to be instituted because of his failure to comply
with the duty imposed by statute appropriating public funds for
the benefit of plaintiff or petitioner. . . . .
The aforecited authorities are clear on the matter. They state that the doctrine of
immunity from suit will not apply and may not be invoked where the public
official is being sued in his private and personal capacity as an ordinary citizen.
The cloak of protection afforded the officers and agents of the government is
removed the moment they are sued in their individual capacity. This situation
usually arises where the public official acts without authority or in excess of the
powers vested in him. It is a well-settled principle of law that a public official may
be liable in his personal private capacity for whatever damage he may have caused
by his act donewith malice and in bad faith, or beyond the scope of his authority or
jurisdiction.
The agents and officials of the United States armed forces stationed in Clark Air
Base are no exception to this rule. [footnotes omitted]
In the present case, it appears that Bradford was sued for acts done beyond the scope and
beyond her place of official functions. Thus she may not avail of immunity.
She may not even avail of diplomatic immunity because Article 31 of the Vienna
Convention on Diplomatic Relations admits of exceptions. It reads:
1. A diplomatic agent shall enjoy immunity from the criminal jurisdiction of the
receiving State. He shall also enjoy immunity from its civil and administrative
jurisdiction except in the case of:
xxx xxx xxx
(c) an action relating to any professional or commercial activity exercised
by the diplomatic agent in the receiving State outside his official
functions (Emphasis supplied).
Disposition:
Petition was dismissed.
EPG CONSTRUCTION VS VIGILAR
March 16, 2001
FACTS:
(1983) The herein petitioners-contractors, under contracts with DPWH,constructed 145 housing
units but coverage of construction and funding under the said contracts was only for 2/3 of each
housing unit. Through the verbal request and assurance of then DPWH Undersecretary Canlas, they
undertook additional constructions for the completion of the project, but said additional
constructions were not issued payment by DPWH.With a favorable recommendation from the
DPWH Asst. Secretary for Legal Affairs, the petitioners sent a demand letter to the DPWH
Secretary. The DPWH Auditor did not object to the payment subject to whatever action COA may
adopt.

(1992) Through the request of then DPWH Secretary De Jesus, the DBM released the amount for
payment but (1996) respondent DPWH Secretary Vigilar denied the money claims prompting
petitioners to file a petition for mandamus before the RTC which said trial court denied. Hence, this
petition. Among others, respondent-secretary argues that the state may not be sued invoking the
constitutional doctrine of Non-suability of the State also known as the Royal Prerogative of
Dishonesty.
ISSUE:Whether or not the Principle of State Immunity is applicable in the case at bar.
HELD:
The principle of state immunity finds no application in this case. Under the circumstances,
respondent may not validly invoke the Royal Prerogative of Dishonesty and hide under the states
cloak of invincibility against suit. Considering that this principle yields to certain settled
exceptions. The rule is not absolute for it does not say that the state may not be sued under any
circumstance. The doctrine of governmental immunity from suit cannot serve as an instrument for
perpetrating an injustice on acitizen. It is just as important that there be fidelity to legal norms on
the part of officialdom if the rule of law is to be maintained. The ends of justice would be subverted
if we were to uphold, in this instance, the states immunity from suit.This court - as the staunch
guardian of the citizens rights and welfare- cannot sanction an injustice so patent on its face, and
allow itself to be an instrument of perpetration thereof. Justice and equity sternly demand that
the states cloak of invincibility against suit be shred in this particular instance and that
petitioners-contractors be duly compensated , on the basis of quantum meruit, for
construction done on the public works housing project
Petition GRANTED.
Dept. of Education, Albay vs. Onate
Facts:
Spouses Claro Onate and Gregoria Los Banos owns the disputed lot Lot No. 6849 (27,907 sqm)
registered under the Torrens System of land registration with an Original Certificate of Title (OCT).
This lot was already settled through a Deed of Extrajudicial Settlement of Estate and Cession in
1991, in favor of respondent as his three sisters waived their rights to the property. It turns out that
the same land was where the Daraga North Central Elementary School was built and had been
operating since 1940, then named Bagumbayan Elementary School of Daraga. The Municipality of
Daraga gave that land to Dept. of Education, Culture and Sports (DECS), now Dept. of Education
(DepEd) through a Deed of Donation, confident that the municipality owned the land through
buying it from Claro Onate, the respondents grandfather, sometime in 1940.
Respondent testified that he only knew of the dispute on 1973, from which he took possession of
the lot the same year;
that he knew only of the schools occupation on a portion of the land on 1991 and knew of the Deed
of Donation on 1992. The petitioner then claimed that respondent was guilty of laches.
Issue:
Is the respondent guilty of laches? Will it be applied to him in this case? Is the State immune from
this case? Can DECS be sued independently from the State?
Ruling:
YES.
Laches is defined as the failure or neglect, or an unreasonable and unexplained length of time, to do
that which could or should have been done earlier. Elements of laches have set in: 1) disputed land
has been used for public education since 1940, 2) respondent failed to prove that him and his
predecessors undertook steps to regain the use of their land, to protest the building of the school as
early as 1940, 3) petitioner DECS did not anticipate that their occupancy of the land would be later
questioned, and 4) preliminary facts show grave prejudice to the petitioner DECS as they have
made major changes in construction and expansion of the school. The laches, however, apply only
to disputed Lot No. 6849-A. By virtue of laches, respondent Onate cannot claim Lot No. 6849-A
anymore.
NO. DECS can be sued as a result of being privy to the Deed of Donation executed by the
Municipality of Daraga (as its recipient) over disputed property. By giving its consent to the
donation, it brings DECS down to level of ordinary citizen. Following the sequestration process, PCGG representatives sat as members of the Board of
Directors of NOGCCI, which passed, sometime in October 1986, a resolution effecting a corporate
YES, DECS can be sued independently from the State as it gave its authority to continue with the
donation, which carries with it the full responsibility of suing or being sued. policy change. The change consisted of assessing a monthly membership due of P150.00 for each
Therefore, DepEd (formerly DECS) now has the rights of possession and property over Lot No.
NOGCCI share. Prior to this resolution, an investor purchasing more than one NOGCCI share was
6849-A. Onarte cannot sell, mortgage or encumber said Lot while still being used by DepEd. The
lots rights will be returned to respondents the moment DECS no longer needs it. DECS being exempt from paying monthly membership due for the second and subsequent shares that he/she
nonsuable has become moot. owned.

Subsequently, on March 29, 1987, the NOGCCI Board passed another resolution, this time
increasing the monthly membership due from P150.00 to P250.00 for each share.
REPUBLIC v. SANDIGANBAYAN

As sequestrator of the 227 shares of stock in question, PCGG did not pay the
Civil Case No. 0034 entitled Republic of the Philippines, plaintiff, v. Roberto S. Benedicto, et al.,
corresponding monthly membership due thereon totaling P2,959,471.00. On account thereof, the
defendants, is a complaint for reconveyance, reversion, accounting, reconstitution and damages.
227 sequestered shares were declared delinquent to be disposed of in an auction sale.
The case is one of several suits involving ill-gotten or unexplained wealth that petitioner Republic,
through the PCGG, filed with the Sandiganbayan against private respondent Roberto S. Benedicto
Apprised of the above development and evidently to prevent the projected auction sale of
and others pursuant to Executive Order (EO) No. 14,[3] series of 1986.
the same shares, PCGG filed a complaint for injunction with the Regional Trial Court (RTC)
of Bacolod City, thereat docketed as Civil Case No. 5348. The complaint, however, was dismissed,
Pursuant to its mandate under EO No. 1,[4] series of 1986, the PCGG issued writs placing under
paving the way for the auction sale for the delinquent 227 shares of stock. On August 5, 1989, an
sequestration all business enterprises, entities and other properties, real and personal, owned or
auction sale was conducted.
registered in the name of private respondent Benedicto, or of corporations in which he appeared to
have controlling or majority interest. Among the properties thus sequestered and taken over by
On November 3, 1990, petitioner Republic and private respondent Benedicto entered into
PCGG fiscal agents were the 227 shares in NOGCCI owned by private respondent Benedicto and
a Compromise Agreement in Civil Case No. 0034. The agreement contained a general release
registered in his name or under the names of corporations he owned or controlled.
clause[5] whereunder petitioner Republic agreed and bound itself to lift the sequestration on the 227
NOGCCI shares, among other Benedictos properties, petitioner Republic acknowledging that it was
within private respondent Benedictos capacity to acquire the same shares out of his income from
[6]
business and the exercise of his profession. Implied in this undertaking is the recognition
by petitioner Republic that the subject shares of stock could not have been ill-gotten.
In a decision dated October 2, 1992, the Sandiganbayan approved the Compromise Agreement and
accordingly rendered judgment in accordance with its terms.
In the process of implementing the Compromise Agreement, either of the parties would, from time
to time, move for a ruling by the Sandiganbayan on the proper manner of implementing or
interpreting a specific provision therein.
On February 22, 1994, Benedicto filed in Civil Case No. 0034 a Motion for Release from
Sequestration and Return of Sequestered Shares/Dividends praying, inter alia, that his NOGCCI
shares of stock be specifically released from sequestration and returned, delivered or paid to him as
part of the parties Compromise Agreement in that case. In a Resolution [7] promulgated
on December 6, 1994, the Sandiganbayan granted Benedictos aforementioned motion but placed
the subject shares under the custody of its Clerk of Court, thus:
WHEREFORE, in the light of the foregoing, the said Motion for Release
From Sequestration and Return of Sequestered Shares/Dividends is
hereby GRANTED and it is directed that said shares/dividends be
delivered/placed under the custody of the Clerk of Court,
Sandiganbayan, Manila subject to this Courts disposition.
On March 28, 1995, the Sandiganbayan came out with the herein first assailed Resolution,
[8]
which clarified its aforementioned December 6, 1994 Resolution and directed the immediate
implementation thereof by requiring PCGG, among other things:
(b) To deliver to the Clerk of Court the 227 sequestered shares of [NOGCCI]
registered in the name of nominees of ROBERTO S. BENEDICTO free
from all liens and encumbrances, or in default thereof, to pay their
value at P150,000.00 per share which can be deducted from [the
Republics] cash share in the Compromise Agreement. [Words in bracket
added] (Emphasis Supplied).
Owing to PCGGs failure to comply with the above directive, Benedicto filed in Civil Case No.
0034 a Motion for Compliance dated July 25, 1995, followed by an Ex-Parte Motion for Early
Resolution dated February 12, 1996. Acting thereon, the Sandiganbayan promulgated yet another
Resolution[9] on February 23, 1996, dispositively reading:
WHEREFORE, finding merit in the instant motion for early resolution and
considering that, indeed, the PCGG has not shown any justifiable ground as to
why it has not complied with its obligation as set forth in the Order of December
6, 1994 up to this date and which Order was issued pursuant to the Compromise
Agreement and has already become final and executory, accordingly, the
Presidential Commission on Good Government is hereby given a final extension
of fifteen (15) days from receipt hereof within which to comply with the Order of
December 6, 1994 as stated hereinabove.
On April 1, 1996, PCGG filed a Manifestation with Motion for Reconsideration,[10] praying for the
setting aside of the Resolution of February 23, 1996. On April 11, 1996, private
respondent Benedicto filed a Motion to Enforce Judgment Levy. Resolving these two motions, the
[11]
Sandiganbayan, in its second assailed Resolution dated March 13, 1997, denied that portion of
the PCGGs Manifestation with Motion for Reconsideration concerning the subject 227 NOGCCI
shares and granted Benedictos Motion to Enforce Judgment Levy.
Hence, the Republics present recourse on the sole issue of whether or not the public respondent
Sandiganbayan, Second Division, gravely abused its discretion in holding that the PCGG is at fault
for not paying the membership dues on the 227 sequestered NOGCCI shares of stock, a failing
which eventually led to the foreclosure sale thereof.
The petition lacks merit.
To begin with, PCGG itself does not dispute its being considered as a receiver insofar as the
sequestered 227 NOGCCI shares of stock are concerned. [12] PCGG also acknowledges that as such
receiver, one of its functions is to pay outstanding debts pertaining to the sequestered entity or
property,[13] in this case the 227 NOGCCI shares in question. It contends, however, that membership
dues owing to a golf club cannot be considered as an outstanding debt for which PCGG, as receiver,
must pay. It also claims to have exercised due diligence to prevent the loss through delinquency sale
of the subject NOGCCI shares, specifically inviting attention to the injunctive suit, i.e., Civil Case
No. 5348, it filed before the RTC of Bacolod City to enjoin the foreclosure sale of the shares.
The filing of the injunction complaint adverted to, without more, cannot plausibly tilt the balance in
favor of PCGG. To the mind of the Court, such filing is a case of acting too little and too late. It
cannot be over-emphasized that it behooved the PCGGs fiscal agents to preserve, like a responsible
father of the family, the value of the shares of stock under their administration. But far from acting
as such father, what the fiscal agents did under the premises was to allow the element of
delinquency to set in before acting by embarking on a tedious process of going to court after the
auction sale had been announced and scheduled.
The PCGGs posture that to the owner of the sequestered shares rests the burden of paying the
membership dues is untenable. For one, it lost sight of the reality that such dues are basically
obligations attached to the shares, which, in the final analysis, shall be made liable, thru
delinquency sale in case of default in payment of the dues. For another, the PCGG as sequestrator-
receiver of such shares is, as stressed earlier, duty bound to preserve the value of such shares.
Needless to state, adopting timely measures to obviate the loss of those shares forms part of such
duty and due diligence.
The Sandiganbayan, to be sure, cannot plausibly be faulted for finding the PCGG liable for the loss
of the 227 NOGCCI shares. There can be no quibbling, as indeed the graft court so declared in its
assailed and related resolutions respecting the NOGCCI shares of stock, that PCGGs fiscal agents,
while sitting in the NOGCCI Board of Directors agreed to the amendment of the rule pertaining to
membership dues. Hence, it is not amiss to state, as did the Sandiganbayan, that the PCGG-
designated fiscal agents, no less, had a direct hand in the loss of the sequestered shares through
delinquency and their eventual sale through public auction. While perhaps anti-climactic to so
mention it at this stage, the unfortunate loss of the shares ought not to have come to pass had those
fiscal agents prudently not agreed to the passage of the NOGCCI board resolutions charging
membership dues on shares without playing representatives.
Given the circumstances leading to the auction sale of the subject NOGCCI shares, PCGGs lament
about public respondent Sandiganbayan having erred or, worse still, having gravely abused its
discretion in its determination as to who is at fault for the loss of the shares in question can hardly
be given cogency.
For sure, even if the Sandiganbayan were wrong in its findings, which does not seem to be in this
case, it is a well-settled rule of jurisprudence that certiorari will issue only to correct errors of
jurisdiction, not errors of judgment. Corollarily, errors of procedure or mistakes in the courts
[14]
findings and conclusions are beyond the corrective hand of certiorari. The extraordinary writ
of certiorari may be availed only upon a showing, in the minimum, that the respondent tribunal or
officer exercising judicial or quasi-judicial functions has acted without or in excess of its or his
jurisdiction, or with grave abuse of discretion.[15]
The term grave abuse of discretion connotes capricious and whimsical exercise of judgment as is
[16]
equivalent to excess, or a lack of jurisdiction. The abuse must be so patent and gross as to
amount to an evasion of a positive duty or a virtual refusal to perform a duty enjoined by law, or to
act at all in contemplation of law as where the power is exercised in an arbitrary and despotic
manner by reason of passion or hostility. [17] Sadly, this is completely absent in the present case. For,
at bottom, the assailed resolutions of the Sandiganbayan did no more than to direct PCGG to
comply with its part of the bargain under the compromise agreement it freely entered into with
private respondent Benedicto. Simply put, the assailed resolutions of the Sandiganbayan have firm
basis in fact and in law.
Lest it be overlooked, the issue of liability for the shares in question had, as both public and private
respondents asserted, long become final and executory. Petitioners narration of facts in its present
petition is even misleading as it conveniently fails to make reference to two (2) resolutions issued
by the Sandiganbayan. We refer to that courts resolutions of December 6, 1994[18] and February 23,
1996[19] as well as several intervening pleadings which served as basis for the decisions reached
therein. As it were, the present petition questions only and focuses on the March 28,
1995[20] and March 13, 1997[21]resolutions, which merely reiterated and clarified the graft courts
underlying resolution of December 6, 1994. And to place matters in the proper perspective, PCGGs
failure to comply with the December 6, 1994 resolution prompted the issuance of the clarificatory
and/or reiteratory resolutions aforementioned.
In a last-ditch attempt to escape liability, petitioner Republic, through the PCGG, invokes state
immunity from suit.[22] As argued, the order for it to pay the value of the delinquent shares would
fix monetary liability on a government agency, thus necessitating the appropriation of public funds
to satisfy the judgment claim.[23] But, as private respondent Benedicto correctly countered, the
PCGG fails to take stock of one of the exceptions to the state immunity principle, i.e., when the
government itself is the suitor, as in Civil Case No. 0034. Where, as here, the State itself is no less
the plaintiff in the main case, immunity from suit cannot be effectively invoked. [24] For,
as jurisprudence teaches, when the State, through its duly
authorized officers, takes the initiative in a suit against a private party, it thereby descends to the
level of a private individual and thus opens itself to whatever counterclaims or defenses the latter
may have against it.[25] Petitioner Republics act of filing its complaint in Civil Case No.
0034 constitutes a waiver of its immunity from suit. Being itself the plaintiff in that
case, petitioner Republic cannot set up its immunity against private respondent Benedictos prayers
in the same case.
In fact, by entering into a Compromise Agreement with private
respondent Benedicto, petitioner Republic thereby stripped itself
of its immunity from suit and placed itself in the same level of its adversary. When the State
enters into 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 therefrom, the State may be sued even without its express consent,
precisely because by entering into a contract the sovereign descends to the level of the citizen. Its
consent to be sued is implied from the very act of entering into such contract, [26] breach of which on
its part gives the corresponding right to the other party to the agreement.
Finally, it is apropos to stress that the Compromise Agreement in Civil Case No. 0034 envisaged the
immediate recovery of alleged ill-gotten wealth without further litigation by the government, and
buying peace on the part of the aging Benedicto. [27] Sadly, that stated objective has come to naught
as not only had the litigation continued to ensue, but, worse, private respondent Benedicto passed
away on May 15, 2000,[28] with the trial of Civil Case No. 0034 still in swing, so much so that the
[29]
late Benedicto had to be substituted by the administratrix of his estate. WHEREFORE, the
instant petition is hereby DISMISSED.
SO ORDERED.
REPUBLIC OF THE PHILIPPINES vs. JUDGE VICENTE A. HIDALGO,Presiding Judge of the
RegionalTrial Court of Manila, Branch 37
FACTS:
Tarcila Laperal Mendoza filed an action for the annulment or declaration of nullity of the title and
deed of sale, reconveyance and/or recovery of ownership and possession a property against the
Republic of the Philippines in the RTC of Manila.It is also known as the Arlegui Residence which
housed two Philippine presidents and which now holds the Office of the Press Secretary and the
News Information Bureau.
The case was initially dismissed by the presiding Judge of the Manila RTC (Branch 35)on the
ground of state immunity. The case was re-raffled to the Manila RTC (Branch 37), with respondent
Vicente A. Hidalgo as presiding Judge. In an Order, Judge Hidalgo declared the Republic in default
for failure of Solicitor Gabriel Francisco Ramirez, the handling solicitor, to file the required Answer
within the period prayed for in his motion for extension. It is contended that the respondent Judge
violated the Constitution and the fundamental rule that government funds are exempt from
execution or garnishment when he caused the issuance of the writ of execution against the
Republic.
ISSUE: WON the Republic can invoke immunity from suit.
HELD:

It is settled that when the State gives its consent to be sued, it does not thereby necessarily consent
to an unrestrained execution against it. Tersely put, when the State waives its immunity, all it does,
in effect,is to give the other party an opportunity to prove, if it can, that the state has a liability.The
functions and public services rendered by the State cannot be allowed to paralyzed or disrupted by
the diversion of public funds from their legitimate and specific objects, as appropriated by law