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[G.R. No. L-30671. November 28, 1973.

] Veterans Bank received the same notice of garnishment on June 30, 1969 . . .
11. The funds of the Armed Forces of the Philippines on deposit with the Banks,
REPUBLIC OF THE PHILIPPINES, Petitioner, v. HON. GUILLERMO P. particularly, with the Philippine Veterans Bank and the Philippine National Bank
VILLASOR, as Judge of the Court of First Instance of Cebu, Branch I, [or] their branches are public funds duly appropriated and allocated for the
THE PROVINCIAL-SHERIFF OF RIZAL, THE SHERIFF OF QUEZON CITY, payment of pensions of retirees, pay and allowances of military and civilian
and THE SHERIFF OF THE CITY OF MANILA, THE CLERK OF COURT, personnel and for maintenance and operations of the Armed Forces of the
Court of First Instance of Cebu, P.J. KIENER CO., LTD., GAVINO Philippines, as per Certification dated July 3, 1969 by the AFP Comptroller, . .
UNCHUAN, and INTERNATIONAL CONSTRUCTION ." 2 The paragraph immediately succeeding in such petition then alleged: "12.
CORPORATION, Respondents. Respondent Judge, Honorable Guillermo P. Villasor, acted in excess of
jurisdiction [or] with grave abuse of discretion amounting to lack of jurisdiction
Solicitor General Felix V . Makasiar and Solicitor Bernardo P. Pardo in granting the issuance of an alias writ of execution against the properties of
for Petitioner. the Armed Forces of the Philippines, hence, the Alias Writ of Execution and
notices of garnishment issued pursuant thereto are null and void." 3 In the
Andres T . Velarde & Marcelo B. Fernan for Respondents. answer filed by respondents, through counsel Andres T. Velarde and Marcelo B.
Fernan, the facts set forth were admitted with the only qualification being that
the total award was in the amount of P2,372,331.40. 4
DECISION
The Republic of the Philippines, as mentioned at the outset, did right in filing
this certiorari and prohibition proceeding. What was done by respondent Judge
is not in conformity with the dictates of the Constitution.
FERNANDO, J.:
It is a fundamental postulate of constitutionalism flowing from the juristic
concept of sovereignty that the state as well as its government is immune from
The Republic of the Philippines in this certiorari and prohibition proceeding suit unless it gives its consent. It is readily understandable why it must be so.
challenges the validity of an order issued by respondent Judge Guillermo P. In the classic formulation of Holmes: "A sovereign is exempt from suit, not
Villasor, then of the Court of First Instance of Cebu, Branch I, 1 declaring a because of any formal conception or obsolete theory, but on the logical and
decision final and executory and of an alias writ of execution directed against practical ground that there can be no legal right as against the authority that
the funds of the Armed Forces of the Philippines subsequently issued in makes the law on which the right depends." 5 Sociological jurisprudence
pursuance thereof, the alleged ground being excess of jurisdiction, or at the supplies an answer not dissimilar. So it was indicated in a recent decision,
very least, grave abuse of discretion. As thus simply and tersely put, with the Providence Washington Insurance Co. v. Republic of the Philippines, 6 with its
facts being undisputed and the principle of law that calls for application affirmation that "a continued adherence to the doctrine of non-suability is not
indisputable, the outcome is predictable. The Republic of the Philippines is to be deplored for as against the inconvenience that may be caused private
entitled to the writs prayed for. Respondent Judge ought not to have acted parties, the loss of governmental efficiency and the obstacle to the
thus. The order thus impugned and the alias writ of execution must be performance of its multifarious functions are far greater if such a fundamental
nullified. 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
In the petition filed by the Republic of the Philippines on July 7, 1969, a court, at the least provocation, the loss of time and energy required to defend
summary of facts was set forth thus: "7. On July 3, 1961, a decision was against law suits, in the absence of such a basic principle that constitutes such
rendered in Special Proceedings No. 2156-R in favor of respondents P. J. an effective obstacle, could very well be imagined." 7
Kiener Co., Ltd., Gavino Unchuan, and International Construction Corporation,
and against the petitioner herein, confirming the arbitration award in the This fundamental postulate underlying the 1935 Constitution is now made
amount of P1,712,396.40, subject of Special Proceedings. 8. On June 24, explicit in the revised charter. It is therein expressly provided: "The State may
1969, respondent Honorable Guillermo P. Villasor, issued an Order declaring not be sued without its consent." 8 A corollary, both dictated by logic and
the aforestated decision of July 3, 1961 final and executory, directing the sound sense from such a basic concept is that public funds cannot be the
Sheriffs of Rizal Province, Quezon City [as well as] Manila to execute the said object of a garnishment proceeding even if the consent to be sued had been
decision. 9. Pursuant to the said Order dated June 24, 1969, the corresponding previously granted and the state liability adjudged. Thus in the recent case of
Alias Writ of Execution [was issued] dated June 26, 1969, . . . 10. On the Commissioner of Public Highways v. San Diego, 9 such a well-settled doctrine
strength of the afore-mentioned Alias Writ of Execution dated June 26, 1969, was restated in the opinion of Justice Teehankee: "The universal rule that
the Provincial Sheriff of Rizal (respondent herein) served notices of where the State gives its consent to be sued by private parties either by
garnishment dated June 28, 1969 with several Banks, specially on the `monies general or special law, it may limit claimant’s action `only up to the completion
due the Armed Forces of the Philippines in the form of deposits, sufficient to of proceedings anterior to the stage of execution’ and that the power of the
cover the amount mentioned in the said Writ of Execution’; the Philippine Courts ends when the judgment is rendered, since government funds and
properties may not be seized under writs of execution or garnishment to satisfy
such judgments, is based on obvious considerations of public policy.
Court of First Instance of Manila, GEORGE F.
Disbursements of public funds must be covered by the corresponding MOORE, ET AL., Respondents.
appropriation as required by law. 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 and specific objects, as appropriated by law." Gibbs, Gibbs, Chuidian and Quasha for petitioner.
10 Such a principle applies even to an attempted garnishment of a salary that
had accrued in favor of an employee. Director of Commerce and Industry v.
J. A. Wolfson for respondent.
Concepcion, 11 speaks to that effect. Justice Malcolm as ponente left no doubt
on that score. Thus: "A rule, which has never been seriously questioned, is that
money in the hands of public officers, although it may be due government
MONTEMAYOR, J.:
employees, is not liable to the creditors of these employees in the process of
garnishment. One reason is, that the State, by virtue of its sovereignty, may
not be sued in its own courts except by express authorization by the
For the purposes of this decision, the following
Legislature, and to subject its officers to garnishment would be to permit facts gathered from and based on the pleadings,
indirectly what is prohibited directly. Another reason is that moneys sought to
be garnished, as long as they remain in the hands of the disbursing officer of may be stated. The plaintiffs named Pedro,
the Government, belong to the latter, although the defendant in garnishment Gonzalo, and Leopoldo, all surnamed Syquia, are
may be entitled to a specific portion thereof. And still another reason which
covers both of the foregoing is that every consideration of public policy forbids the undivided joint owners of three apartment
it." 12 buildings situated in the City of Manila known as
In the light of the above, it is made abundantly clear why the Republic of the the North Syquia Apartments, South Syquia
Philippines could rightfully allege a legitimate grievance.
Apartments and Michel Apartments located at
WHEREFORE, the writs of certiorari and prohibition are granted, nullifying and 1131 M. H. del Pilar, 1151 M. H. del Pilar 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 1188 A. Mabini Streets, respectively. chanroble svi rtualaw lib rary cha nrob les vi rtual law lib rary

preliminary injunction issued by this Court on July 12, 1969 is hereby made
permanent.
About the middle of the year 1945, said plaintiffs
Zaldivar, Antonio, Fernandez and Aquino, JJ., concur. executed three lease contracts, one for each of
Barredo, J., did not take part. the three apartments, in favor of the United
States of America at a monthly rental of P1,775
for the North Syquia Apartments, P1,890 for the
South Syquia Apartment, and P3,335 for the
EN BANC Michel Apartments. The term or period for the
three leases was to be "for the duration of the
G.R. No. L-1648 August 17, 1949 war and six months thereafter, unless sooner
terminated by the United States of America." The
PEDRO SYQUIA, GONZALO SYQUIA, and apartment buildings were used for billeting and
LEOPOLDO SYQUIAPetitioners, vs. NATIVIDAD quartering officers of the U. S. armed forces
ALMEDA LOPEZ, Judge of Municipal Court of stationed in the Manila area.
chanroblesvi rtua lawlib rary cha nro bles vi rtua l law lib ra ry

Manila, CONRADO V. SANCHEZ, Judge of


In March 1947, when these court proceedings June 6, 1946, refused to execute new leases but
were commenced, George F. Moore was the advised that "it is contemplated that the United
Commanding General, United States Army, States Army will vacate subject properties prior to
Philippine Ryukus Command, Manila, and as 1 February 1947." Not being in conformity with
Commanding General of the U. S. Army in the the continuance of the old leases because of the
Manila Theatre, was said to control the occupancy alleged comparatively low rentals being paid
of the said apartment houses and had authority in thereunder, plaintiffs formally requested Tillman
the name of the United States Government to to cancel said three leases and to release the
assign officers of the U. S. Army to said apartment buildings on June 28, 1946. Tillman
apartments or to order said officers to vacate the refused to comply with the request. Because of
same. Erland A. Tillman was the Chief, Real the alleged representation and assurance that the
Estate Division, Office of the District Engineers, U. U.S. Government would vacate the premises
S. Army, Manila, who, under the command of before February 1, 1947, the plaintiffs took no
defendant Moore was in direct charge and control further steps to secure possession of the buildings
of the lease and occupancy of said three and accepted the monthly rentals tendered by the
apartment buildings. Defendant Moore and predecessors in office of Moore and Tillman on
Tillman themselves did not occupy any part of the the basis of a month to month lease subject to
premises in question. chanroble svirtualawl ibra ry chan roble s virtual law lib rary cancellation upon thirty days notice. Because of
the failure to comply with the alleged
Under the theory that said leases terminated six representation and assurance that the three
months after September 2, 1945, when Japan apartment buildings will be vacated prior to
surrendered, plaintiffs sometime in March, 1946, February 1, 1947, plaintiffs on February 17,
approached the predecessors in office of 1947, served formal notice upon defendants
defendants Moore and Tillman and requested the Moore and Tillman and 64 other army officers or
return of the apartment buildings to them, but members of the United States Armed Forces who
were advised that the U. S. Army wanted to were then occupying apartments in said three
continue occupying the premises. On May 11, buildings, demanding (a) cancellation of said
1946, said plaintiffs requested the predecessors leases; (b) increase in rentals to P300 per month
in office of Moore and Tillman to renegotiate said per apartment effective thirty days from notice;
leases, execute lease contract for a period of (c) execution of new leases for the three or any
three years and to pay a reasonable rental higher one or two of the said apartment buildings for a
than those payable under the old contracts. The definite term, otherwise, (d) release of said
predecessors in office of Moore in a letter dated
apartment buildings within thirty days of said Acting upon a motion to dismiss filed through the
notice in the event of the failure to comply with Special Assistant of the Judge Advocate,
the foregoing demands. The thirty-day period Philippine Ryukus Command on the ground that
having expired without any of the defendants the court had no jurisdiction over the defendants
having complied with plaintiffs' demands, the and over the subject matter of the action,
plaintiffs commenced the present action in the because the real party in interest was the U.S.
Municipal Court of Manila in the form of an action Government and not the individual defendants
for unlawful detainer (desahucio) against Moore named in the complaint, and that the complaint
and Tillman and the 64 persons occupying did not state a cause of action, the municipal
apartments in the three buildings for the purpose court of Manila in an order dated April 29, 1947,
of having them vacate the apartments, each found that the war between the United States of
occupants to pay P300 a month for his particular America and her allies on one side and Germany
apartment from January 1, 1947 until each of and Japan on the other, had not yet terminated
said particular defendant had vacated said and, consequently, the period or term of the
apartment; to permit plaintiffs access to said three leases had not yet expired; that under the
apartment buildings for the purpose of appraising well settled rule of International Law, a foreign
the damages sustained as the result of the government like the United States Government
occupancy by defendants; that defendants be cannot be sued in the courts of another state
ordered to pay plaintiffs whatever damages may without its consent; that it was clear from the
have been actually caused on said property; and allegations of the complaint that although the
that in the event said occupants are unable to United States of America has not been named
pay said P300 a month and/or the damages therein as defendant, it is nevertheless the real
sustained by said property, the defendants Moore defendant in this case, as the parties named as
and Tillman jointly and severally be made to pay defendants are officers of the United States Army
said monthly rentals of P300 per month per and were occupying the buildings in question as
apartment from January 1, 1947 to March 19, such and pursuant to orders received from that
1947, inclusive, and/or the damages sustained by Government. The municipal court dismissed the
said apartments, and that defendants Moore and action with costs against the plaintiffs with the
Tillman be permanently enjoined against ordering suggestion or opinion that a citizen of the
any additional parties in the future from entering Philippines, who feels aggrieved by the acts of the
and occupying said premises. chanroble svirtualawl ibra ry chan roble s virtual law lib rary Government of a foreign country has the right to
demand that the Philippine Government study his
claim and if found meritorious, take such judgment in these proceedings may become a
diplomatic steps as may be necessary for the charge against the U. S. Treasury, then under the
vindication of rights of that citizen, and that the rule laid down in the case of Land vs. Dollar, 91
matter included or involved in the action should Law. ed., 1209, the present suit must be
be a proper subject matter of representations regarded as one against the United States
between the Government of the Government of Government itself, which cannot be sued without
the United States of America and the Philippines. its consent, specially by citizens of another
Not being satisfied with the order, plaintiffs country.chanroblesv irtualawli bra ry chan roble s virtual law l ibra ry

appealed to the Court of Manila, where the


motion to dismiss was renewed. chanroblesvi rtua lawlib rary cha nro bles virtua l law lib rary
The plaintiffs as petitioners have brought this
case before us on a petition for a writ of
The Court of First Instance of Manila in an order mandamus seeking to order the Municipal Court
dated July 12, 1947, affirmed the order of the of Manila to take jurisdiction over the case. On
municipal court dismissing plaintiffs' complaint. It October 30, 1947, counsel for respondents
conceded that under the doctrine laid down in the Almeda Lopez, Sanchez, Moore and Tillman filed a
case of U. S. vs. Lee, 106 U. S., 196 and affirmed motion to dismiss on several grounds. The case
in the case of Tindal vs. Wesley, 167 U. S., 204 was orally argued on November 26, 1947. On
ordinarily, courts have jurisdiction over cases March 4, 1948, petitioners filed a petition which,
where private parties sue to recover possession among other things, informed this Court that the
of property being held by officers or agents acting North Syquia Apartments, the South Syquia
in the name of the U. S. Government even Apartments and Michel Apartments would be
though no suit can be brought against the vacated by their occupants on February 29, March
Government itself, but inasmuch as the plaintiffs 31, and May 31, 1948, respectively. As a matter
in the present case are bringing this action of fact, said apartments were actually vacated on
against officers and agents of the U. S. the dates already mentioned and were received
Government not only to recover the possession of by the plaintiff-owners. chanroblesvi rtua lawlib rary c hanro bles vi rt ual law li bra ry

the three apartment houses supposedly being


held illegally by them in the name of their On the basis of this petition and because of the
government, but also to collect back rents, not return of the three apartment houses to the
only at the rate agreed upon in the lease owners, counsel for respondents Almeda Lopez,
contracts entered into by the United States of Sanchez, Moore and Tillman filed a petition to
America but in excess of said rate, to say nothing dismiss the present case on the ground that it is
of the damages claimed, as a result of which, a moot. Counsel for the petitioners answering the
motion, claimed that the plaintiffs and petitioners left the Islands for other Army assignments, and
possession of the three apartment houses, now that both the possession of the three
reserving all of their rights against respondents apartments in question as well as the rentals for
including the right to collect rents and damages; their occupation have already been received by
that they have not been paid rents since January the petitioners renew their motion for dismissal
1, 1947; that respondents admitted that there is on the ground that this case has now become
a total of P109,895 in rentals due and owing to moot.chanroble svirtualawl ibra ry chan roble s virtual law l ib rary

petitioners; that should this case be now


dismissed, the petitioners will be unable to The main purpose of the original action in the
enforce collection; that the question of law municipal court was to recover the possession of
involved in this case may again come up before the three apartment houses in question. The
the courts when conflicts arise between Filipino recovery of rentals as submitted by the very
civilian property owners and the U.S. Army counsel for the petitioner was merely incidental to
authorities concerning contracts entered into in the main action. Because the prime purpose of
the Philippines between said Filipinos and the the action had been achieved, namely, the
U.S. Government. Consequently, this Court, recovery of the possession of the premises, apart
according to the petitioners, far from dismissing from the fact that the rentals amounting to
the case, should decide it, particularly the P109,895 had been paid to the petitioners and
question of jurisdiction.
chanroble svirtualawl ibra ry chan roble s virtual law l ibrary
accepted by them though under reservations, this
Court may now well dismiss the present
On June 18, 1949, through a "petition to amend proceedings on the ground that the questions
complaint" counsel for the petitioners informed involved therein have become academic and
this court that petitioners had already received moot. Counsel for the petitioners however, insists
the U. S. Army Forces in the Western Pacific the that a decision be rendered on the merits,
sum of P109,895 as rentals for the three particularly on the question of jurisdiction of the
apartments, but with the reservation that said municipal court over the original action, not only
acceptance should not be construed as for the satisfaction of the parties involved but
jeopardizing the rights of the petitioners in the also to serve as a guide in future cases involving
case now pending in the courts of the Philippines cases of similar nature such as contracts of lease
or their rights against the U. S. Government with entered into between the Government of the
respect to the three apartment houses. In view of United States of America on one side and Filipino
this last petition, counsel for respondents alleging citizens on the other regarding properties of the
that both respondent Moore and Tillman had long latter. We accept the suggestion of petitioners
and shall proceed to discuss the facts and law the Government, then the suit should be
involved and rule upon them. chanroble svirtualawl ibra ry chan roble s virtual law l ib rary regarded as one against the government itself,
and, consequently, it cannot prosper or be validly
We shall concede as correctly did the Court of entertained by the courts except with the consent
First Instance, that following the doctrine laid of said Government. (See case of Land vs. Dollar,
down in the cases of U. S. vs. Lee and U. S. vs. 91 Law. ed., 1209.) chanrob les vi rtual law lib rary

Tindal, supra, a private citizen claiming title and


right of possession of a certain property may, to From a careful study of this case, considering the
recover possession of said property, sue as facts involved therein as well as those of public
individuals, officers and agents of the knowledge of which we take judicial cognizance,
Government who are said to be illegally we are convinced that the real party in interest as
witholding the same from him, though in doing defendant in the original case is the United States
so, said officers and agents claim that they are of America. The lessee in each of the three lease
acting for the Government, and the court may agreements was the United States of America and
entertain such a suit altho the Government itself the lease agreement themselves were executed in
is not included as a party-defendant. Of course, her name by her officials acting as her agents.
the Government is not bound or concluded by the The considerations or rentals was always paid by
decision. The philosophy of this ruling is that the U. S. Government. The original action in the
unless the courts are permitted to take municipal court was brought on the basis of these
cognizance and to assume jurisdiction over such a three lease contracts and it is obvious in the
case, a private citizen would be helpless and opinion of this court that any back rentals or
without redress and protection of his rights which increased rentals will have to be paid by the U. S.
may have been invaded by the officers of the Government not only because, as already stated,
government professing to act in its name. In such the contracts of lease were entered into by such
a case the officials or agents asserting rightful Government but also because the premises were
possession must prove and justify their claim used by officers of her armed forces during the
before the courts, when it is made to appear in war and immediately after the terminations of
the suit against them that the title and right of hostilities.
cha nro blesvi rtua lawlib rary c hanro bles vi rt ual law li bra ry

possession is in the private citizen. However, and


this is important, where the judgment in such a We cannot see how the defendants and
case would result not only in the recovery of respondents Moore and Tillman could be held
possession of the property in favor of said citizen individually responsible for the payments of
but also in a charge against or financial liability to rentals or damages in relation to the occupancy
of the apartment houses in question. Both of defendant Moore, could be held personally liable
these army officials had no intervention for the payment of rentals or increase thereof, or
whatsoever in the execution of the lease damages said to have been suffered by the
agreements nor in the initial occupancy of the plaintiffs.
chanroble svi rtualaw lib rary chan rob les vi rtual law lib rary

premises both of which were effected thru the


intervention of and at the instance of their With respect to defendant General Moore, when
predecessors in office. The original request made he assumed his command in Manila, these lease
by the petitioners for the return of the apartment agreement had already been negotiated and
buildings after the supposed termination of the executed and were in actual operation. The three
leases, was made to, and denied not by Moore apartment buildings were occupied by army
and Tillman but by their predecessors in office. officers assigned thereto by his predecessors in
The notice and decision that the U. S. Army office. All that he must have done was to assign
wanted and in fact continued to occupy the or billet incoming army officers to apartments as
premises was made not by Moore and Tillman but they were vacated by outgoing officers due to
by predecessors in office. The refusal to changes in station. He found these apartment
renegotiate the leases as requested by the buildings occupied by his government and
petitioners was made not by Moore but by his devoted to the use and occupancy of army
predecessors in office according to the very officers stationed in Manila under his command,
complaint filed in the municipal court. The and he had reasons to believe that he could
assurance that the U. S. Army will vacate the continue holding and using the premises
premises prior to February 29, 1947, was also theretofore assigned for that purpose and under
made by the predecessors in office of Moore. chanroblesvi rtua lawlib rary cha nro bles vi rtua l law lib ra ry
contracts previously entered into by his
government, as long as and until orders to the
As to the defendant Tillman, according to the contrary were received by him. It is even to be
complaint he was Chief, Real State Division, presumed that when demand was made by the
Office of the District Engineer, U. S. Army, and plaintiffs for the payment of increased rentals or
was in direct charge and control of the leases and for vacating the three apartment buildings,
occupancy of the apartment buildings, but he was defendant Moore, not a lawyer by profession but
under the command of defendant Moore, his a soldier, must have consulted and sought the
superior officer. We cannot see how said advise of his legal department, and that his action
defendant Tillman in assigning new officers to in declining to pay the increased rentals or to
occupy apartments in the three buildings, in eject all his army officers from the three buildings
obedience to order or direction from his superior, must have been in pursuance to the advice and
counsel of his legal division. At least, he was not ever entered their minds, and continued to live in
in a position to pay increased rentals above those their apartments unless and until orders to the
set and stipulated in the lease agreements, contrary were received by them, could they later
without the approval of his government, unless be held personally liable for any back rentals
he personally assumed financial responsibility which their government may have failed to pay to
therefor. Under these circumstances, neither do the owners of the building, or for any damages to
we believe nor find that defendant Moore can be the premises incident to all leases of property,
held personally liable for the payment of back or specially in the absence of proof that such
increased rentals and alleged damages. chanrob lesvi rtua lawlib rary cha nrob les vi rtua l law lib rary damages to property had been caused by them
and not by the previous occupants, also army
As to the army officers who actually occupied the officers who are not now parties defendant to this
apartments involved, there is less reason for suit? Incidentally it may be stated that both
holding them personally liable for rentals and defendants Moore and Tillman have long left
supposed damages as sought by the plaintiffs. It these Islands to assume other commands or
must be remembered that these army officers assignments and in all probability none of their 64
when coming to their station in Manila were not co-defendants is still within this jurisdiction.
chanrob lesvi rtua lawlib rary cha nro bles vi rtua l law lib ra ry

given the choice of their dwellings. They were


merely assigned quarters in the apartment On the basis of the foregoing considerations we
buildings in question. Said assignments or billets are of the belief and we hold that the real party
may well be regarded as orders, and all that defendant in interest is the Government of the
those officers did was to obey them, and, United States of America; that any judgment for
accordingly, occupied the rooms assigned to back or increased rentals or damages will have to
them. Under such circumstances, can it be be paid not by defendants Moore and Tillman and
supposed or conceived that such army officers their 64 co-defendants but by the said U. S.
would first inquire whether the rental being paid Government. On the basis of the ruling in the
by the government for the rooms or apartments case of Land vs. Dollar already cited, and on what
assigned to them by order of their superior officer we have already stated, the present action must
was fair and reasonable or not, and whether the be considered as one against the U. S.
period of lease between their government and the Government. It is clear that the courts of the
owners of the premises had expired, and whether Philippines including the Municipal Court of Manila
their occupancy of their rooms or apartments was have no jurisdiction over the present case for
legal or illegal? And if they dismissed these unlawful detainer. The question of lack of
seemingly idle speculations, assuming that they jurisdiction was raised and interposed at the very
beginning of the action. The U. S. Government The petition must be granted. This is the
has not given its consent to the filing of this suit conclusion we have arrived at long ago, soon
which is essentially against her, though not in after this case had been submitted for our
name. Moreover, this is not only a case of a decision. We regret that, to avoid further delay in
citizen filing a suit against his own Government the promulgation of the decision in this case, we
without the latter's consent but it is of citizen are constrained to limit ourselves to a synthesis
filing an action against a foreign government of the reasons for our stand. So that this opinion
without said government's consent, which may be released immediately, we are making it
renders more obvious the lack of jurisdiction of as short as possible. To said effect we have to
the courts of his country. The principles of the law waive the opportunity of elaborating on our
behind this rule are so elementary and of such arguments. chanroble svirtualawl ibra ry chan rob les vi rtual law lib rary

general acceptance that we deem it unnecessary


to cite authorities in support thereof. chanroble svi rtualaw lib rary chan rob les vi rtual law lib rary
We are of the opinion that both the municipal
court and the Court of First Instance of Manila
In conclusion we find that the Municipal Court of erred in dismissing petitioners' complaint and the
Manila committed no error in dismissing the case majority of the Supreme Court have given their
for lack of jurisdiction and that the Court of First exequatur to such grievous error. chanroble svirtual awlibra ry chan robles v irt ual law l ibra ry

Instance acted correctly in affirming the


municipal court's order of dismissal. Case There is no question that the Municipal Court of
dismissed, without pronouncement as to Manila had and has completed jurisdiction to take
costs.chanroble svirtualawl ibra ry chan rob les vi rtual law lib rary
cognizance of and decide the case initiated by
petitioners. That jurisdiction is the same whether
Moran, C.J., Paras, Feria, Bengzon, Tuason and the true defendants are those specifically
Reyes, JJ., concur. mentioned in the complaint or the Government of
the United States. chanro blesvi rt ualawlib ra ry chanrobles vi rt ual law li bra ry

The contention that the Government of the United


States of America is the real party defendant
Separate Opinions chanroble s virtual law lib rary

does not appear to be supported either by the


pleadings or by the text of the contract of lease in
PERFECTO, J., dissenting:
question. If said government is the real property
chanrobles vi rt ual law li bra ry

defendant and had intended to impugn the


jurisdiction of the Municipal Court of Manila, it
must have done so through its diplomatic Moral principles and principles of justice are as
representative in the Philippines, i. e., the valid and applicable as well with regard to private
American Ambassador. It does not appear that individuals as with regard to governments either
the American Ambassador had intervened in the domestic or foreign. Once a foreign government
case in any way and we believe no one appearing enters into a private contract with the private
in the case has the legal personality to represent citizens of another country, such foreign
said government. chanroblesvi rtualaw lib rary cha nrob les vi rtual law lib rary government cannot shield its non-performance or
contravention of the terms of the contract under
In the hypothesis that the Government of the the cloak of non-jurisdiction. To place such
United States of America is the lessee in the foreign government beyond the jurisdiction of the
contract in question and, therefore, should be domestic courts is to give approval to the
considered as the real party defendant in the execution of unilateral contracts, graphically
ejectment case, that simple fact does not deprive described in Spanish as "contratos leoninos,"
our courts of justice of their jurisdiction to try any because one party gets the lion's share to the
legal litigation relating to said contract of lease. detriment of the other. To give validity to such
The very fact that the government of the United contract is to sanctify bad faith, deceit, fraud. We
States of America had entered into a private prepare to adhere to the thesis that all parties in
contract with private citizens of the Philippines a private contract, including governments and the
and the deed executed in our country concerns most powerful of them, are amenable to law, and
real property located in Manila, place said that such contracts are enforceable through the
government, for purposes of the jurisdiction of help of the courts of justice with jurisdiction to
our courts, on the same legal level of the take cognizance of any violation of such contracts
lessors.chanroblesvi rt ualawlib ra ry chan robles v irt ual law li bra ry

if he same had been entered into only by private


individuals.
Although, generally, foreign governments are
chanrob lesvi rtua lawlib rary c hanro bles vi rtua l law lib ra ry

beyond the jurisdiction of domestic courts of To advance the proposition that the Government
justice, such rule is inapplicable to cases in which of the United States of America, soon after
the foreign government enters into private liberating the Philippines from the invading
contracts with the citizens of the court's Japanese forces, had entered with the petitioners
jurisdiction. A contrary view would simply run in to the lease contract in question with the
against all principles of decency and violative of knowledge that petitioners could not bring an
all tenets of morals. chan roble svirtualawl ibra ry chan rob les vi rtual law lib rary

action in our courts of justice to enforce the


terms of said contract is to hurl against said
government the blackest indictment. Under such 2. POLITICAL LAW; DOCTRINE OF DIPLOMATIC IMMUNITY; EXTENDS TO
INTERNATIONAL ORGANIZATION, ITS OFFICIALS AND FUNCTIONARIES;
situation, all the vociferous avowals of adherence PURPOSE THEREOF. — As a matter of state policy as expressed in the
Constitution, the Philippine Government adopts the generally accepted
to the principles of justice, liberty, democracy, of principles of international law. Being a member of the United Nations and a
said Government would appear as sham. We party to the Convention on the Privileges and Immunities of the Specialized
Agencies of the United Nations, the Philippine Government adheres to the
cannot believe that the Government of the United doctrine of immunity granted to the United Nations and its specialized
States of America can in honest conscience agencies. Both treaties have the force and effect of law. In World Health
Organization v. Aquino, 48 SCRA 242 (1972), we had occasion to rule that: "It
support the stand of respondents in this case. We is a recognized principle of international law and under our system of
separation of powers that diplomatic immunity is essentially a political question
cannot believe that said government is so callous and courts should refuse to look beyond a determination by the executive
as not to understand the meaning of the shame branch of the government, and where the plea of diplomatic immunity is
recognized and affirmed by the executive branch of the government as in the
entailed in the legal stand of non-jurisdiction case at bar, it is then the duty of the courts to accept the claim of immunity
intended to place said government beyond the upon appropriate suggestion by the principal law officer of the government, the
Solicitor General or other officer acting under his direction. Hence, in
reach of our courts of justice. adherence to the settled principle that courts may not so exercise their
jurisdiction by seizure and detention of property, as to embarrass the executive
arm of the government in conducting foreign relations, it is accepted doctrine
that "in such cases the judicial department of (this) government follows the
action of the political branch and will not embarrass the latter by assuming an
antagonistic jurisdiction." We recognize the growth of international
organizations dedicated to specific universal endeavors, such as health,
agriculture, science and technology and environment. It is not surprising that
their existence has evolved into the concept of international immunities. The
[G.R. Nos. 109095-109107. February 23, 1995.] reason behind the grant of privileges and immunities to international
organizations, its officials and functionaries is to secure them legal and
ELPEDIO LASCO, RODOLFO ELISAN, URBANO BERADOR, FLORENTINO practical independence in fulfilling their duties. Immunity is necessary to
ESTOBIO, MARCELINO MATURAN, FRAEN BALIBAG, CARMELITO GAJOL, assure unimpeded performance of their functions. The purpose is "to shield to
DEMOSTHENES MANTO, SATURNINO BACOL, SATURNINO LASCO, affairs of international organizations, in accordance with international practice,
RAMON LOYOLA, JOSENIANO B. ESPINA, all represented by MARIANO from political pressure or control by the host country to the prejudice of
R. ESPINA, and MARIANO R. ESPINA, Petitioners, v. UNITED NATIONS member States of the organization, and to ensure the unhampered
REVOLVING FUND FOR NATURAL RESOURCES EXPLORATION performance of their functions."cralaw virtua 1aw lib rary

(UNRFNRE) represented by its operations manager, DR. KYRIACOS


LOUCA, OSCAR N. ABELLA, LEON G. GONZAGA, JR., MUSIB M. BUAT, 3. ID.; ID.; ID.; DETERMINATION THEREOF, A POLITICAL QUESTION. — In the
Commissioners of National Labor Relations Commission (NLRC), Fifth International Catholic Migration Commission case, we held that there is no
Division, Cagayan de Oro City and IRVING PETILLA, Labor Arbiter of conflict between the constitutional duty of the State to protect the rights of
Butuan City, Respondents. workers and to promote their welfare, and the grant of immunity to
international organizations. Clauses on jurisdictional immunity are now
standard in the charters of international organizations to guarantee the smooth
SYLLABUS discharge of their functions. The diplomatic immunity of private respondent
was sufficiently established by the letter of the Department of Foreign Affairs,
recognizing and confirming the immunity of UNRFNRE in accordance with the
1946 Convention on Privileges and Immunities of the United Nations where the
1. REMEDIAL LAW; SPECIAL CIVIL ACTIONS; CERTIORARI; DOES NOT LIE Philippine Government was a party. The issue whether an international
UNLESS A MOTION FOR RECONSIDERATION IS FIRST FILED. — Certiorari as a organization is entitled to diplomatic immunity is a "political question" and such
special civil action will not lie unless a motion for reconsideration is first filed determination by the executive branch is conclusive on the court and quasi-
before the respondent tribunal, to allow it an opportunity to correct its judicial agencies. Our courts can only assume jurisdiction over private
assigned errors. respondent if it expressly waived its immunity, which is not so in the case at
bench.
DECISION Article 223 of the Labor Code of the Philippines, as amended, provides that
decisions of the NLRC are final and executory. Thus, they may only be
questioned through certiorari as a special civil action under Rule 65 of the
Revised Rules of Court.
QUIASON, J.:
Ordinarily, certiorari as a special civil action will not lie unless a motion for
reconsideration is first filed before the respondent tribunal, to allow it an
This is a petition for certiorari under Rule 65 of the Revised Rules of Court to opportunity to correct its assigned errors (Liberty Insurance Corporation v.
set aside the Resolution dated January 25, 1993 of the National Labor Court of Appeals, 222 SCRA 37 [1993]). chan roble svirtualawl ibra ry

Relations Commission (NLRC), Fifth Division, Cagayan de Oro City. chanroble svi rtual lawlib rary

In the case at bench, petitioner’s failure to file a motion for reconsideration is


We dismiss the petition. fatal to the instant petition. Moreover, the petition lacks any explanation for
such omission, which may merit its being considered as falling under the
I recognized exceptions to the necessity of filing such motion.

Notwithstanding, we deem it wise to give due course to the petition because of


Petitioners were dismissed from their employment with private respondent, the the implications of the issue in our international relations.
United Nations Revolving Fund for Natural Resources Exploration (UNRFNRE),
which is a special fund and subsidiary organ of the United Nations. The Petitioners argued that the acts of mining exploration and exploitation are
UNRFNRE is involved in a joint project of the Philippine Government and the outside the official functions of an international agency protected by diplomatic
United Nations for exploration work in Dinagat Island. immunity. Even assuming that private respondent was entitled to diplomatic
immunity, petitioners insisted that private respondent waived it when it
Petitioners are the complainants in NLRC Cases Nos. SRAB 10-03-00067-91 to engaged in exploration work and entered into a contract of employment with
10-03-00078-91 and SRAB 10-07-00159-91 for illegal dismissal and damages. petitioners.

In its Motion to Dismiss, private respondent alleged that respondent Labor Petitioners, likewise, invoked the constitutional mandate that the State shall
Arbiter had no jurisdiction over its personality since it enjoyed diplomatic afford full protection to labor and promote full employment and equality of
immunity pursuant to the 1946 Convention on the Privileges and Immunities of employment opportunities for all (1987 Constitution, Art. XIII, Sec. 3).
the United Nations. In support thereof, private respondent attached a letter
from the Department of Foreign Affairs dated August 26, 1991, which The Office of the Solicitor General is of the view that private respondent is
acknowledged its immunity from suit. The letter confirmed that private covered by the mantle of diplomatic immunity. Private respondent is a
respondent, being a special fund administered by the United Nations, was specified agency of the United Nations. Under Article 105 of the Charter of the
covered by the 1946 Convention on the Privileges and Immunities of the United United Nations: chan roblesv irt uallawl ibra ry

Nations of which the Philippine Government was an original signatory (Rollo, p.


21). "1. The Organization shall enjoy in the territory of its Members such privileges
and immunities as are necessary for the fulfillment of its purposes.
On November 25, 1991, respondent Labor Arbiter issued an order dismissing
the complaints on the ground that private respondent was protected by "2. Representatives of the Members of the United Nations and officials of the
diplomatic immunity. The dismissal was based on the letter of the Foreign Organization shall similarly enjoy such privileges and immunities as are
Office dated September 10, 1991. necessary for the independent exercise of their functions in connection with the
Organization." cralaw virtua 1aw lib rary

Petitioner’s motion for reconsideration was denied. Thus, an appeal was filed
with the NLRC, which affirmed the dismissal of the complaints in its Resolution Corollary to the cited article is the Convention on the Privileges and Immunities
dated January 25, 1993. chanroble svi rtual lawlib rary
of the Specialized Agencies of the United Nations, to which the Philippines was
a signatory (Vol. 1, Philippine Treaty Series, p. 621.) We quote Sections 4 and
Petitioners filed the instant petition for certiorari without first seeking a 5 of Article III thereof: jgc:chan robles .com.p h

reconsideration of the NLRC resolution.


"Sec. 4. The specialized agencies, their property and assets, wherever located
II and by whomsoever held, shall enjoy immunity from every form of legal
process except insofar as in any particular case they have expressly waived
their immunity. It is, however, understood that no waiver of immunity shall
extend to any measure of execution (Emphasis supplied). Private respondent is not engaged in a commercial venture in the Philippines.
Its presence here is by virtue of a joint project entered into by the Philippine
"Sec. 5. The premises of the specialized agencies shall be inviolable. The Government and United Nations for mineral exploration in Dinagat Island. Its
property and assets of the specialized agencies, wherever located and by mission is not to exploit our natural resources and gain pecuniarily thereby but
whomsoever held, shall be immune from search, requisition, confiscation, to help improve the quality of life of the people, including that of petitioners.
law libra ry
chanro bles. com : virt ual

expropriation and any other form of interference, whether by executive,


administrative, judicial or legislative action" (Emphasis supplied). This is not to say that petitioners have no recourse. Section 31 of the
Convention on the Privileges and Immunities of the Specialized Agencies of the
As a matter of state policy as expressed in the Constitution, the Philippine United Nations states that "each specialized agency shall make a provision for
Government adopts the generally accepted principles of international law (1987 appropriate modes of settlement of: (a) disputes arising out of contracts or
Constitution, Art. II, Sec. 2). Being a member of the United Nations and a other disputes of private character to which the specialized agency is a party." cralaw

party to the Convention on the Privileges and Immunities of the Specialized


virtua 1aw lib rary

Agencies of the United Nations, the Philippine Government adheres to the WHEREFORE, the petition is DISMISSED.
doctrine of immunity granted to the United Nations and its specialized
agencies. Both treaties have the force and effect of law. chanrobl esvirt uallawl ibra ry

SO ORDERED.

In World Health Organization v. Aquino, 48 SCRA 242 (1972), we had occasion


to rule that:
jgc:chanro bles. com.ph

"It is a recognized principle of international law and under our system of


separation of powers that diplomatic immunity is essentially a political question
and courts should refuse to look beyond a determination by the executive
branch of the government, and where the plea of diplomatic immunity is
recognized and affirmed by the executive branch of the government as in the
case at bar, it is then the duty of the courts to accept the claim of immunity
upon appropriate suggestion by the principal law officer of the government, the G.R. No. 106483 May 22, 1995
Solicitor General or other officer acting under his direction. Hence, in
adherence to the settled principle that courts may not so exercise their
jurisdiction by seizure and detention of property, as to embarrass the executive ERNESTO L.
arm of the government in conducting foreign relations, it is accepted doctrine
that �in such cases the judicial department of (this) government follows the
CALLADO, Petitioner, v. INTERNATIONAL RICE
action of the political branch and will not embarrass the latter by assuming as RESEARCH INSTITUTE, Respondent. chanroble s virtual law lib rary

antagonistic jurisdiction" (Emphasis supplied).

international organizations to guarantee the smooth discharge of their ROMERO, J.:


functions.

The diplomatic immunity of private respondent was sufficiently established by Did the International Rice Research Institute
the letter of the Department of Foreign Affairs, recognizing and confirming the
immunity of UNRFNRE in accordance with the 1946 Convention on Privileges (IRRI) waive its immunity from suit in this dispute
and Immunities of the United Nations where the Philippine Government was a which arose from an employer-employee
party. The issue whether an international organization is entitled to diplomatic
immunity is a "political question" and such determination by the executive relationship? chanroble s virtual law l ibra ry

branch is conclusive on the courts and quasi-judicial agencies (The Holy See v.
Hon. Eriberto U. Rosario, Jr., G.R. No. 101949, Dec. 1, 1994; International
Catholic Migration Commission v. Calleja, supra). chanrob lesvi rtua llawlib ra ry
We rule in the negative and vote to dismiss the
petition.
Our courts can only assume jurisdiction over private respondent if it expressly
chanroblesvi rt ualawlib ra rychan roble s vi rtual law lib rary

waived its immunity, which is not so in the case at bench (Convention on the
Privileges and Immunities of the Specialized Agencies of the United Nations,
Art. III, Sec. 4).
Ernesto Callado, petitioner, was employed as a evidence, IRRI issued a Notice of Termination to
driver at the IRRI from April 11, 1983 to petitioner on December 7, 1990. 4
December 14, 1990. On February 11, 1990, while
driving an IRRI vehicle on an official trip to the Thereafter, petitioner filed a complaint on
Ninoy Aquino International Airport and back to December 19, 1990 before the Labor Arbiter for
the IRRI, petitioner figured in an accident. chanroblesvi rtua lawlib rary chan roble s virtual law l ibra ry
illegal dismissal, illegal suspension and indemnity
pay with moral and exemplary damages and
Petitioner was informed of the findings of a attorney's fees.chanroblesvi rtua lawlib rary chan rob les virtual law l ibra ry

preliminary investigation conducted by the IRRI's


Human Resource Development Department On January 2, 1991, private respondent IRRI,
Manager in a Memorandum dated March 5, through counsel, wrote the Labor Arbiter to
1990. 1 In view of the aforesaid findings, he was inform him that the Institute enjoys immunity
charged with: from legal process by virtue of Article 3 of
Presidential Decree No. 1620, 5 and that it
(1) Driving an institute vehicle while on official invokes such diplomatic immunity and privileges
duty under the influence of liquor; chanroble s virtual law l i brary as an international organization in the instant
case filed by petitioner, not having waived the
(2) Serious misconduct consisting of your failure same. 6
to report to your supervisors the failure of your
vehicle to start because of a problem with the car IRRI likewise wrote in the same tenor to the
battery which, you alleged, required you to Regional Director of the Department of Labor and
overstay in Manila for more than six (6) hours, Employment. 7
whereas, had you reported the matter to IRRI,
Los Baños by telephone, your problem could have While admitting IRRI's defense of immunity, the
been solved within one or two hours; chanrob les vi rtua l law lib rary
Labor Arbiter, nonetheless, cited an Order issued
by the Institute on August 13, 1991 to the effect
(3) Gross and habitual neglect of your duties. 2
chanrobles vi rt ual law li bra ry that "in all cases of termination, respondent IRRI
waives its immunity," 8 and, accordingly,
In a Memorandum dated March 9, 1990, considered the defense of immunity no longer a
petitioner submitted his answer and defenses to legal obstacle in resolving the case. The
the charges against him. 3 After evaluating dispositive portion of the Labor arbiter's decision
petitioner's answer, explanations and other dated October 31, 1991, reads:
WHEREFORE, premises considered, judgment is We find no merit in petitioner's arguments. chanroblesvi rtua lawlib rary chan roble s virtual law l ibra ry

hereby rendered ordering respondent to reinstate


complainant to his former position without loss or IRRI's immunity from suit is undisputed. chanroblesvi rtual awlib raryc han robles v irt ual law l ibra ry

(sic) seniority rights and privileges within five (5)


days from receipt hereof and to pay his full Presidential Decree No. 1620, Article 3 provides:
backwages from March 7, 1990 to October 31,
Art. 3. Immunity from Legal Process. The
1991, in the total amount of P83,048.75
Institute shall enjoy immunity from any penal,
computed on the basis of his last monthly
civil and administrative proceedings, except
salary. 9
insofar as that immunity has been expressly
chanrobles vi rt ual law li bra ry

The NLRC found merit in private respondent' s waived by the Director-General of the Institute or
appeal and, finding that IRRI did not waive its his authorized representatives.
immunity, ordered the aforesaid decision of the
In the case of International Catholic Migration
Labor Arbiter set aside and the complaint
Commission v. Hon. Calleja, et al. and Kapisanan
dismissed. 10
ng Manggagawa at TAC sa IRRI v. Secretary of
Hence, this petition where it is contended that the Labor and Employment and IRRI, 12the Court
immunity of the IRRI as an international upheld the constitutionality of the aforequoted
organization granted by Article 3 of Presidential law. After the Court noted the letter of the Acting
Decree No. 1620 may not be invoked in the case Secretary of Foreign Affairs to the Secretary of
at bench inasmuch as it waived the same by Labor dated June 17, 1987, where the immunity
virtue of its Memorandum on "Guidelines on the of IRRI from the jurisdiction of the Department of
handling of dismissed employees in relation to Labor and Employment was sustained, the Court
P.D. 1620." 11 stated that this opinion constituted "a categorical
recognition by the Executive Branch of the
It is also petitioner's position that a dismissal of Government that . . . IRRI enjoy(s) immunities
his complaint before the Labor Arbiter leaves him accorded to international organizations, which
no other remedy through which he can seek determination has been held to be a political
redress. He further states that since the question conclusive upon the Courts in order not
investigation of his case was not referred to the to embarass a political department of
Council of IRRI Employees and Management Government. 13We cited the Court's earlier
(CIEM), he was denied his constitutional right to pronouncement in WHO v. Hon. Benjamin Aquino,
due process. chanroblesv irt ualawli bra rycha nrob les vi rtual law lib rary
et al., 14to wit:
It is a recognized principle of international law the Department of Labor in these instances would
and under our system of separation of powers defeat the very purpose of immunity, which is to
that diplomatic immunity is essentially a political shield the affairs of international organizations, in
question and courts should refuse to look beyond accordance with international practice, from
a determination by the executive branch of the political pressure or control by the host country to
government, and where the plea of diplomatic the prejudice of member States of the
immunity is recognized and affirmed by the organization, and to ensure the unhampered the
executive branch of the government as in the performance of their functions. 16 chanroble s virtual law lib rary

case at bar, it is then the duty of the courts to


accept the claim of immunity upon appropriate The grant of immunity to IRRI is clear and
suggestion by the principal law officer of the unequivocal and an express waiver by its
government . . . or other officer acting under his Director-General is the only way by which it may
direction. Hence, in adherence to the settled relinquish or abandon this immunity. chanroble svi rtualaw lib raryc han robles v irt ual law li bra ry

principle that courts may not so exercise their


jurisdiction . . . as to embarass the executive arm On the matter of waiving its immunity from suit,
of the government in conducting foreign relations, IRRI had, early on, made its position clear.
it is accepted doctrine that in such cases the Through counsel, the Institute wrote the Labor
judicial department of (this) government follows Arbiter categorically informing him that the
the action of the political branch and will not Institute will not waive its diplomatic immunity.
embarrass the latter by assuming an antagonistic In the second place, petitioner's reliance on the
jurisdiction. 15 Memorandum with "Guidelines in handling cases
of dismissal of employees in relation to P.D.
chanro bles vi rtua l law lib ra ry

Further, we held that "(t)he raison d'etre for 1620" dated July 26, 1983, is misplaced. The
these immunities is the assurance of unimpeded Memorandum reads, in part:
performance of their functions by the agencies
concerned. Time and again the Institute has reiterated that it
will not use its immunity under P.D. 1620 for the
The grant of immunity from local jurisdiction to . . purpose of terminating the services of any of its
. and IRRI is clearly necessitated by their employees. Despite continuing efforts on the part
international character and respective purposes. of IRRI to live up to this undertaking, there
The objective is to avoid the danger of partiality appears to be apprehension in the minds of some
and interference by the host country in their IRRI employees. To help allay these fears the
internal workings. The exercise of jurisdiction by following guidelines will be followed hereafter by
the Personnel/Legal Office while handling cases of From the last paragraph of the foregoing
dismissed employees. quotation, it is clear that in cases involving
dismissed employees, the Institute may waive its
xxx xxx xxx chanroble s virtual law l ibrary

immunity, signifying that such waiver is


discretionary on its part.
2. Notification/manifestation to MOLE or labor
chanroble svi rtualawl ib raryc hanrobles vi rt ual law li bra ry

arbiter We agree with private respondent IRRI that this


memorandum cannot, by any stretch of the
If and when a dismissed employee files a imagination, be considered the express waiver by
complaint against the Institute contesting the the Director-General. Respondent Commission
legality of dismissal, IRRI's answer to the has quoted IRRI's reply thus:
complaint will:
The 1983 . . . is an internal memo addressed to
1. Indicate in the identification of IRRI Personnel and Legal Office and was issued for its
that it is an international organization guidance in handling those cases where IRRI opts
operating under the laws of the to waive its immunity. It is not a declaration of
Philippines including P.D. 1620. and waiver for all cases. This is apparent from the use
chanrobles vi rt ual law li bra ry

of the permissive term "may" rather than the


mandatory term "shall" in the last paragraph of
2. Base the defense on the merits and
the memo. Certainly the memo cannot be
facts of the case as well as the legality
considered as the express waiver by the Director
of the cause or causes for termination.
General as contemplated by P.D. 1620, especially
3) Waiving immunity under P.D. 1620 since the memo was issued by a former Director-
General. At the very least, the express
If the plaintiff's attorney or the arbiter, asks if declaration of the incumbent Director-general
IRRI will waive its immunity we may reply that supersedes the 1983 memo and should be
the Institute will be happy to do so, as it has in accorded greater respect. It would be equally
the past in the formal manner required thereby important to point out that the Personnel and
reaffirming our commitment to abide by the laws Legal Office has been non-existent since 1988 as
of the Philippines and our full faith in the integrity a result of major reorganization of the IRRI.
and impartially of the legal system. 17 (Emphasis Cases of IRRI before DOLE are handled by an
in this paragraphs ours) external Legal Counsel as in this particular
case. 18 (Emphasis supplied)
The memorandum, issued by the former Director- Neither are the employees of IRRI without
General to a now-defunct division of the IRRI, remedy in case of dispute with management as,
was meant for internal circulation and not as a in fact, there had been organized a forum for
pledge of waiver in all cases arising from better management-employee relationship as
dismissal of employees. Moreover, the IRRI's evidenced by the formation of the Council of IRRI
letter to the Labor Arbiter in the case at bench Employees and Management (CIEM) wherein
made in 1991 declaring that it has no intention of "both management and employees were and still
waiving its immunity, at the very least, supplants are represented for purposes of maintaining
any pronouncement of alleged waiver issued in mutual and beneficial cooperation between IRRI
previous cases. chanroblesvi rtua lawlib rary chan roble s virt ual law li bra ry and its employees." The existence of this Union
factually and tellingly belies the argument that
Petitioner's allegation that he was denied due Pres. Decree No. Decree No. 1620, which grants
process is unfounded and has no basis. chanrob lesvi rtua lawlib rary chan robles v irt ual law l ibra ry

to IRRI the status, privileges and immunities of


an international organization, deprives its
It is not denied that he was informed of the employees of the right to self-organization.
findings and charges resulting from an
investigation conducted of his case in accordance We have earlier concluded that petitioner was not
with IRRI policies and procedures. He had a denied due process, and this, notwithstanding the
chance to comment thereon in a Memorandum he non-referral to the Council of IRRI Employees and
submitted to the Manager of the Human Resource Management. Private respondent correctly
and Development Department. Therefore, he was pointed out that petitioner, having opted not to
given proper notice and adequate opportunity to seek the help of the CIEM Grievance Committee,
refute the charges and findings, hereby fulfilling prepared his answer by his own self. 20 He cannot
the basic requirements of due process. chanroblesvi rtua lawlib rary chan roble s virtual law l ib rary

now fault the Institute for not referring his case


to the CIEM.
Finally, on the issue of referral to the Council of
chanroblesv irt ualawli bra rycha nrob les vi rtual law lib rary

IRRI Employees and Management (CIEM), IN VIEW OF THE FOREGOING, the petition
petitioner similarly fails to persuade the Court.
libra ry
chanroblesv irt ualawli bra rychan rob les vi rtual law

for certiorari is DISMISSED. No costs. chanroblesvi rt ualawlib ra rychan roble s virtual law lib rary

The Court, in the Kapisanan ng mga Manggagawa SO ORDERED.


at TAC sa IRRI case, 19held:
"1. Motor Vehicle with Plate No. HAK-733
loaded with one thousand and twenty six
[G.R. No. 115634. April 27, 2000] (1,026) board feet of illegally sourced lumber
valued at P8,544.75, being driven by one Pio
FELIPE CALUB and RICARDO VALENCIA, Gabon and owned by [a certain] Jose
DEPARTMENT of ENVIRONMENT and NATURAL Vargas.
RESOURCES (DENR), CATBALOGAN,
SAMAR, petitioners, vs. COURT OF APPEALS, 2. Motor Vehicle with Plate No. FCN-143
MANUELA T. BABALCON, and CONSTANCIO loaded with one thousand two hundred
ABUGANDA, respondents. twenty four and ninety seven (1,224.97)
board feet of illegally-sourced lumber valued
DECISION at P9,187.27, being driven by one
Constancio Abuganda and owned by [a
QUISUMBING, J.: certain] Manuela Babalcon. " .[3]

For review is the decision dated May 27, 1994, of the


.[1]
Constancio Abuganda and Pio Gabon, the drivers of the
Court of Appeals in CA-G.R. SP No. 29191, denying the vehicles, failed to present proper documents and/or
petition filed by herein petitioners for certiorari, licenses. Thus, the apprehending team seized and
prohibition and mandamus, in order to annul the Order impounded the vehicles and its load of lumber at the
dated May 27, 1992, by the Regional Trial Court of DENR-PENR (Department of Environment and Natural
Catbalogan, Samar. Said Order had denied petitioners Resources-Provincial Environment and Natural
(a) Motion to Dismiss the replevin case filed by herein Resources) Office in Catbalogan. Seizure receipts were
.[4]

private respondents, as well as (b) petitioners Motion for issued but the drivers refused to accept the
Reconsideration of the Order of said trial court dated receipts.. Felipe Calub, Provincial Environment and
[5]

April 24, 1992, granting an application for a Writ of Natural Resources Officer, then filed before the
replevin.. h Y
[2]
Provincial Prosecutors Office in Samar, a criminal
complaint against Abuganda, in Criminal Case No. 3795,
The pertinent facts of the case, borne by the records, are
for violation of Section 68 [78), Presidential Decree 705
as follows:
as amended by Executive Order 277, otherwise known
as the Revised Forestry Code. Mis sc
[6]
On January 28, 1992, the Forest Protection and Law
Enforcement Team of the Community Environment and
On January 31, 1992, the impounded vehicles were
Natural Resources Office (CENRO) of the DENR
forcibly taken by Gabon and Abuganda from the custody
apprehended two (2) motor vehicles, described as
of the DENR, prompting DENR Officer Calub this time to
follows:
file a criminal complaint for grave coercion against
Gabon and Abuganda. The complaint was, however, in an Order dated April 24, 1992. Petitioners filed a
.[10]

dismissed by the Public Prosecutor. .[7] motion to dismiss which was denied by the trial court. [11]

On February 11, 1992, one of the two vehicles, with plate Thus, on June 15, 1992, petitioners filed with the
number FCN 143, was again apprehended by a Supreme Court the present Petition for Certiorari,
composite team of DENR-CENR in Catbalogan and Prohibition and Mandamus with application for
Philippine Army elements of the 802nd Infantry Brigade Preliminary Injunction and/or a Temporary Restraining
at Barangay Buray, Paranas, Samar. It was again loaded Order. The Court issued a TRO, enjoining respondent
with forest products with an equivalent volume of RTC judge from conducting further proceedings in the
1,005.47 board feet, valued at P10,054.70. Calub duly civil case for replevin; and enjoining private respondents
filed a criminal complaint against Constancio Abuganda, from taking or attempting to take the motor vehicles and
a certain Abegonia, and several John Does, in Criminal forest products seized from the custody of the
Case No. 3625, for violation of Section 68 [78], petitioners. The Court further instructed the petitioners to
Presidential Decree 705 as amended by Executive Order see to it that the motor vehicles and other forest products
277, otherwise known as the Revised Forestry Code. .[8] seized are kept in a secured place and protected from
deterioration, said property being in custodia legis and
In Criminal Cases Nos. 3795 and 3625, however, subject to the direct order of the Supreme Court. In a
.[12]

Abegonia and Abuganda were acquitted on the ground of Resolution issued on September 28, 1992, the Court
reasonable doubt. But note the trial court ordered that a referred said petition to respondent appellate court for
copy of the decision be furnished the Secretary of appropriate disposition. .[13]

Justice, in order that the necessary criminal action may


be filed against Noe Pagarao and all other persons On May 27, 1994, the Court of Appeals denied said
responsible for violation of the Revised Forestry Code. petition for lack of merit. It ruled that the mere seizure of
For it appeared that it was Pagarao who chartered the a motor vehicle pursuant to the authority granted by
subject vehicle and ordered that cut timber be loaded on Section 68 [78] of P.D. No. 705 as amended by E.O. No.
it.
.[9] 277 does not automatically place said conveyance
in custodia legis. According to the appellate court, such
Subsequently, herein private respondents Manuela authority of the Department Head of the DENR or his
Babalcon, the vehicle owner, and Constancio Abuganda, duly authorized representative to order the confiscation
the driver, filed a complaint for the recovery of and disposition of illegally obtained forest products and
possession of the two (2) impounded vehicles with an the conveyance used for that purpose is not absolute
application for replevin against herein petitioners before and unqualified. It is subject to pertinent laws,
the RTC of Catbalogan. The trial court granted the regulations, or policies on that matter, added the
application for replevin and issued the corresponding writ appellate court. The DENR Administrative Order No. 59,
series of 1990, is one such regulation, the appellate court against the State; and that a public officer might be sued
said. For it prescribes the guidelines in the confiscation, for illegally seizing or withholding the possession of the
forfeiture and disposition of conveyances used in the property of another..[16]

commission of offenses penalized under Section 68 [78]


of P.D. No. 705 as amended by E.O. No. 277. .[14] Respondent court brushed aside other grounds raised by
petitioners based on the claim that the subject vehicles
Additionally, respondent Court of Appeals noted that the were validly seized and held in custody because they
petitioners failed to observe the procedure outlined in were contradicted by its own findings. Their petition
.[17]

DENR Administrative Order No. 59, series of 1990. They was found without merit. Rtc spped
[18]

were unable to submit a report of the seizure to the


DENR Secretary, to give a written notice to the owner of Now, before us, the petitioners assign the following
the vehicle, and to render a report of their findings and errors:
.[19]

recommendations to the Secretary. Moreover, petitioners


failure to comply with the procedure laid down by DENR (1) THE COURT OF APPEALS ERRED IN
Administrative Order No. 59, series of 1990, was HOLDING THAT MERE SEIZURE OF A
confirmed by the admission of petitioners counsel that no CONVEYANCE PURSUANT TO SECTION
confiscation order has been issued prior to the seizure of 68-A [78-A] OF P.D. NO. 705 AS AMENDED
the vehicle and the filing of the replevin suit. Therefore, in BY EXECUTIVE ORDER 277 DOES NOT
failing to follow such procedure, according to the PLACE SAID CONVEYANCE IN CUSTODIA
appellate court, the subject vehicles could not be LEGIS;
considered in custodia legis. .[15]

(2) THE COURT OF APPEALS ERRED IN


Respondent Court of Appeals also found no merit in NOT HOLDING THAT THE OPERATIVE
petitioners claim that private respondents complaint for ACT GIVING RISE FOR THE SUBJECT
replevin is a suit against the State. Accordingly, CONVEYANCE TO BE IN CUSTODIA
petitioners could not shield themselves under the LEGIS IS ITS LAWFUL SEIZURE BY THE
principle of state immunity as the property sought to be DENR PURSUANT TO SECTION 68-A [78-
recovered in the instant suit had not yet been lawfully A] OF P.D. NO. 705, AS AMENDED BY E.O.
adjudged forfeited in favor of the government. Moreover, NO. 277; AND
according to respondent appellate court, there could be
no pecuniary liability nor loss of property that could (3) THE COURT OF APPEALS ERRED IN
ensue against the government. It reasoned that a suit HOLDING THAT THE COMPLAINT FOR
against a public officer who acted illegally or beyond the REPLEVIN AGAINST THE PETITIONERS
scope of his authority could not be considered a suit IS NOT A SUIT AGAINST THE STATE.
In brief, the pertinent issues for our consideration are: illegally used in the area where the timber or
forest products are found.
(1) Whether or not the DENR-seized motor vehicle, with
plate number FCN 143, is in custodia legis. This provision makes mere possession of timber or other
forest products without the accompanying legal
(2) Whether or not the complaint for the recovery of documents unlawful and punishable with the penalties
possession of impounded vehicles, with an application imposed for the crime of theft, as prescribed in Articles
for replevin, is a suit against the State. 309-310 of the Revised Penal Code. In the present case,
the subject vehicles were loaded with forest products at
We will now resolve both issues. the time of the seizure. But admittedly no permit
evidencing authority to possess and transport said load
The Revised Forestry Code authorizes the DENR to of forest products was duly presented. These products,
seize all conveyances used in the commission of an in turn, were deemed illegally sourced. Thus there was
offense in violation of Section 78. Section 78 states: a prima facieviolation of Section 68 [78] of the Revised
Forestry Code, although as found by the trial court, the
Sec. 78. Cutting, Gathering, and or persons responsible for said violation were not the ones
Collecting Timber, or Other Forest Products charged by the public prosecutor.
without License. Any person who shall cut,
gather, collect, remove timber or other forest The corresponding authority of the DENR to seize all
products from any forestland, or timber from conveyances used in the commission of an offense in
alienable or disposable public land, or from violation of Section 78 of the Revised Forestry Code is
private land, without any authority, or pursuant to Sections 78-A and 89 of the same Code.
possess timber or other forest products They read as follows: Sc
without the legal documents as required
under existing forest laws and regulations, Sec. 78-A. Administrative Authority of the
shall be punished with the penalties imposed Department Head or His Duly Authorized
under Articles 309 and 310 of the Revised Representative to Order Confiscation. -- In
Penal Codeslx mis all cases of violation of this Code or other
forest laws, rules and regulations, the
The Court shall further order the confiscation Department Head or his duly authorized
in favor of the government of the timber or representative, may order the confiscation of
any forest products cut, gathered, collected, any forest products illegally cut, gathered,
removed, or possessed, as well as the removed, or possessed or abandoned, and
machinery, equipment, implements and tools all conveyances used either by land, water or
air in the commission of the offense and to
dispose of the same in accordance with deputized officers of the DENR
pertinent laws, regulations or policies on the are authorized to seize said conveyances
matter. subject to policies and guidelines pertinent
thereto. Deputized military personnel and
Sec. 89. Arrest; Institution of criminal actions. officials of other agencies apprehending
-- A forest officer or employee of the Bureau illegal logs and other forest products and
[Department] or any personnel of the their conveyances shall notify the nearest
Philippine Constabulary/Philippine National DENR field offices, and turn over said forest
Police shall arrest even without warrant any products and conveyances for proper action
person who has committed or is committing and disposition. In case where the
in his presence any of the offenses defined apprehension is made by DENR field officer,
in this Chapter. He shall also seize and the conveyance shall be deposited with the
confiscate, in favor of the Government, the nearest CENRO/PENRO/RED Office as the
tools and equipment used in committing the case may be, for safekeeping wherever it is
offense... [Emphasis supplied.] most convenient and secured. [Emphasis
supplied.]
Note that DENR Administrative Order No. 59, series of
1990, implements Sections 78-A and 89 of the Forestry Upon apprehension of the illegally-cut timber while being
Code, as follows: transported without pertinent documents that could
evidence title to or right to possession of said timber, a
Sec. 2. Conveyances Subject to Confiscation warrantless seizure of the involved vehicles and their
and Forfeiture. -- All conveyances used in load was allowed under Section 78 and 89 of the
the transport of any forest product obtained Revised Forestry Code. Slxs c
or gathered illegally whether or not covered
with transport documents, found spurious or Note further that petitioners failure to observe the
irregular in accordance with Sec. 68-A [78-A] procedure outlined in DENR Administrative Order No. 59,
of P.D. No. 705, shall be confiscated in favor series of 1990 was justifiably explained. Petitioners did
of the government or disposed of in not submit a report of the seizure to the Secretary nor
accordance with pertinent laws, regulations give a written notice to the owner of the vehicle because
or policies on the matter. on the 3rd day following the seizure, Gabon and
Abuganda, drivers of the seized vehicles, forcibly took
Sec. 4. Who are Authorized to Seize the impounded vehicles from the custody of the DENR.
Conveyance. -- The Secretary or his duly Then again, when one of the motor vehicles was
authorized representative such as the forest apprehended and impounded for the second time, the
officers and/or natural resources officers, or
petitioners, again were not able to report the seizure to ". . . the writ of replevin has been repeatedly
the DENR Secretary nor give a written notice to the used by unscrupulous plaintiffs to retrieve
owner of the vehicle because private respondents their chattel earlier taken for violation of the
immediately went to court and applied for a writ of Tariff and Customs Code, tax assessment,
replevin. The seizure of the vehicles and their load was attachment or execution. Officers of the
done upon their apprehension for a violation of the court, from the presiding judge to the sheriff,
Revised Forestry Code. It would be absurd to require a are implored to be vigilant in their execution
confiscation order or notice and hearing before said of the law otherwise, as in this case, valid
seizure could be effected under the circumstances. seizure and forfeiture proceedings could
easily be undermined by the simple devise of
Since there was a violation of the Revised Forestry Code a writ of replevin..." Scslx
.[21]

and the seizure was in accordance with law, in our view


the subject vehicles were validly deemed in custodia On the second issue, is the complaint for the recovery of
legis. It could not be subject to an action for replevin. For possession of the two impounded vehicles, with an
it is property lawfully taken by virtue of legal process and application for replevin, a suit against the State?
considered in the custody of the law, and not otherwise. .[20]

Well established is the doctrine that the State may not be


In Mamanteo, et. al. v. Deputy Sheriff Magumun, A.M. sued without its consent. And a suit against a public
.[22]

No. P-98-1264, promulgated on July 28, 1999, the case officer for his official acts is, in effect, a suit against the
involves property to be seized by a Deputy Sheriff in a State if its purpose is to hold the State ultimately
replevin suit. But said property were already impounded liable.. However, the protection afforded to public
[23]

by the DENR due to violation of forestry laws and, in fact, officers by this doctrine generally applies only to activities
already forfeited in favor of the government by order of within the scope of their authority in good faith and
the DENR. We said that such property was deemed without willfulness, malice or corruption. In the present
[24]

in custodia legis. The sheriff could not insist on seizing case, the acts for which the petitioners are being called
the property already subject of a prior warrant of seizure. to account were performed by them in the discharge of
The appropriate action should be for the sheriff to inform their official duties. The acts in question are clearly
the trial court of the situation by way of partial Sheriffs official in nature. In implementing and enforcing
[25]

Return, and wait for the judges instructions on the proper Sections 78-A and 89 of the Forestry Code through the
procedure to be observed. seizure carried out, petitioners were performing their
duties and functions as officers of the DENR, and did so
Note that property that is validly deposited in custodia within the limits of their authority. There was no malice
legis cannot be the subject of a replevin suit. In nor bad faith on their part. Hence, a suit against the
Mamanteo v. Deputy Sheriff Magumun, we elucidated
further:
petitioners who represent the DENR is a suit against the
State. It cannot prosper without the States consent.

Given the circumstances in this case, we need not [G.R. No. L-9990. September 30, 1957.]
pursue the Office of the Solicitor Generals line for the
defense of petitioners concerning exhaustion of ENRIQUE J. L. RUIZ and JOSE V. HERRERA, in their behalf and as
minority stockholders of the Allied Technologists, Inc., Plaintiffs-
administrative remedies. We ought only to recall that Appellants, v. HON. SOTERO B. CABAHUG, Secretary of National
exhaustion must be raised at the earliest time possible, Defense, Col. NICOLAS JIMENEZ, Head of the Engineer Group, Office of
the Secretary of National Defense, THE FINANCE OFFICER of the
even before filing the answer to the complaint or pleading Department of National Defense, the AUDITOR of the Department of
asserting a claim, by a motion to dismiss. If not invoked
.[26] the National Defense, PABLO D. PANLILIO and ALLIED
TECHNOLOGISTS, INC., Defendants-Appellees.
at the proper time, this ground for dismissal could be
deemed waived and the court could take cognizance of Diokno & Sison for Appellants.

the case and try it. Mesm


[27]
L. D. Panlilio for appellee Pablo Panlilio.

Manuel Sales for defendant Allied Technologists, Inc.


ACCORDINGLY, the Petition is GRANTED, and the
assailed Decision of the Court of Appeals in CA-G.R. SP Solicitor General Ambrosio Padilla and Assistant Solicitor Jose G.
Bautista for appellees Hon. Sotero Cabahug and Col. Nicolas Jimenez,
No. 29191 is SET ASIDE. Consequently, the Order Et. Al.
issued by the Regional Trial Court of Catbalogan, dated
May 27, 1992, and the Writ of replevin issued in the SYLLABUS
Order dated April 24, 1992, are ANNULLED. The Sheriff
of the Regional Trial Court of Catbalogan, Branch 29, is
ACTION; PUBLIC OFFICERS; WHEN SUIT IS NOT ONE AGAINST THE
directed to take possession of the subject motor vehicle, GOVERNMENT. — Where the facts and circumstances show that the
with plate number FCN 143, for delivery to the custody of Government does not any longer have interested in the subject matter of the
action which the defendants-officials have retained and refused to pay the
and appropriate disposition by petitioners. Let a copy of plaintiffs, or to the person or entity to which it should be paid, and plaintiffs do
this decision be provided the Honorable Secretary of not seek to sue the Government to require it to pay the amount or involve it in
the litigation, Held: That the suit is not one against the Government or a claim
Justice for his appropriate action, against any and all against it, but one against the officials to compel them to act in accordance
persons responsible for the abovecited violation of the with the rights to be established by the contending architects, or to prevent
them from making payment and recognition until the contending architects
Revised Forestry Code. have established their respective rights and interest in the funds retained and
in the credit for the work done.
Costs against private respondents.
DECISION
SO ORDERED.
LABRADOR, J.:
Appeal from a judgment of the Court of First Instance of Manila dismissing I
plaintiffs’ amended complaint.

The facts upon which plaintiffs’ first cause of action are based are alleged as THE LOWER COURT ERRED IN RULING THAT THE PRESENT SUIT IS ONE
follows:cha nro b1es vi rtua l 1aw lib ra ry AGAINST THE GOVERNMENT AND THEREFORE CANNOT BE VALIDLY
ENTERTAINED BECAUSE THE GOVERNMENT CANNOT BE SUED WITHOUT ITS
On July 31, 1950 the Secretary of National Defense accepted the bid of the CONSENT.
Allied Technologists, Inc., to furnish the architectural and engineering services
in the construction of the Veterans Hospital at a price of P302,700. The plans, II
specifications, sketches and detailed drawings and other architectural
requirements submitted by the Allied Technologists through three of its
architects, Messrs. Enrique J. L. Ruiz, Jose V. Herrera and Pablo D. Panlilio THE LOWER COURT ERRED IN HOLDING THAT THE PROVISIONS OF ACT 3083,
were approved by the United States Veterans Administration in Washington, AS AMENDED BY COMMONWEALTH ACT 327 ARE APPLICABLE TO THIS CASE;
D.C. Because of the technical objection to the capacity of the Allied IT ERRED IN HOLDING THAT PLAINTIFFS’ CLAIM SHOULD HAVE BEEN FILED
Technologists, Inc. to practice architecture and upon the advice of the WITH THE AUDITOR GENERAL.
Secretary of Justice, the contract was signed on the part of the Allied
Technologists, Inc. by E. J. L. Ruiz as President and P. D. Panlilio as Architect. III
When the defendants-officials paid the Allied Technologists the contract price
for the architectural engineering service, they retained 15 per cent of the sum
due, for the reason that defendant Panlilio has asserted that he is the sole and THE LOWER COURT ERRED IN RULING THAT THE MINORITY SUIT IS
only architect of the Veterans Hospital to the exclusion of plaintiffs Ruiz and UNTENABLE.
Herrera, assertion aided and abetted by defendant Jimenez. Unless defendants
are prevented from recognizing defendant Panlilio as the sole architect of the
IV
contract and from paying the 15 per cent retained, plaintiffs will be deprived of
the monetary value of their professional services and their professional
prestige and standing would be seriously impaired.
THE LOWER COURT ERRED IN DISMISSING THE AMENDED COMPLAINT
INJUNCTION.
Under the second cause of action the following facts are alleged: Under Title II
of the contract entered into between plaintiffs and the Secretary of National
Evidently, the plaintiffs-appellants do not question the dismissal of the second
Defense, at any time prior to six months after completion and acceptance of
cause of action. So, the appeal has relation to the first cause of action only.
the work under Title I, the Government may direct the Allied Technologists,
Inc. to perform the services specified in said Title II. But notwithstanding such
A careful study of the allegations made in the amended complaint discloses the
completion or acceptance, the Government has refused to direct the plaintiffs
following facts and circumstances: The contract price for the architectural
to perform the work, entrusting such work to a group of inexperienced and
engineering services rendered by the Allied Technologists, Inc. and the
unqualified engineers.
plaintiffs is P231,600. All of that sum has been set aside for payment to the
Allied Technologists, Inc. and its architects, except the sum of P34,740,
The prayer based on the first cause of action is that defendants desist from
representing 15 per cent of the total costs, which has been retained by the
recognizing Panlilio as the sole and only architect of the Veterans Hospital and
defendants-officials. Insofar as the Government of the Philippines is concerned,
from paying him the 15 per cent retained as above indicated, and that after
the full amount of the contract price has been set aside and said full amount
hearing Ruiz, Herrera and Panlilio be recognized as the architects of the
authorized to be paid. The Government does not any longer have any interest
Veterans Hospital. Under the second cause of action it is prayed that the
in the amount, which the defendants-officials have retained and have refused
defendants be directed to turn over the supervision called for by Title II of the
to pay to the plaintiffs, or to the person or entity to which it should be paid.
contract.
And the plaintiffs do not seek to sue the Government to require it to pay the
amount or involve it in the litigation. The defendant Jimenez is claimed to have
The court a quo dismissed the complaint on the ground that the suit involved is
"aided and abetted defendant Panlilio in depriving the Allied Technologists, Inc.
one against the Government, which may not be sued without its consent. It is
and its two architects (Ruiz and Herrera) of the honor and benefit due to them
also held that as the majority of the stockholders of the Allied Technologists,
under the contract Annex ‘C’ thereof." It is further claimed by plaintiffs that the
Inc. have not joined in the action, the minority suit does not lie. It dismissed
defendant-officials are about to recognize Panlilio as the sole architect and are
the second cause of action on the ground that the optional services under Title
about to pay him the 15 per cent which they had retained, and thus deprive
II have already been performed.
plaintiffs of their right to share therein and in the honor consequent to the
recognition of their right. The suit, therefore, is properly directed against the
On this appeal the plaintiffs assign the following errors: chan rob 1es virt ual 1aw li bra ry
officials and against them alone, not against the Government, which does not agents, is as well settled in the jurisprudence of this country as is the general
have any interest in the outcome of the controversy between plaintiffs on the rule first above mentioned; for in such a suit no relief is demanded which
one hand, and Panlilio on the other. The suit is between these alone, to requires any affirmative action on the part of the state. Such a suit is only to
determine who is entitled to the amount retained by the officials; and if the the end that the officers and agents of the state stay off the private property of
latter did aid and abet Panlilio in his pretense, to the exclusion and prejudice of the citizen and cease to damage that property, the state having no right or title
plaintiffs, it is natural that they alone, and not the Government, should be the thereto." (State Mineral Lease Commission v. Lawrence [1934], 157 So. 857,
subject of the suit. Had said officials chosen not to take sides in the 898- 899.)
controversy between the architects, and had disclaimed interest in said
controversy, the suit would have been converted into one of interpleader. But We hold that under the facts and circumstances alleged in the amended
they have acted to favor one side, and have abetted him in his effort to obtain complaint, which should be taken on its face value, the suit is not one against
payment to him of the sum remaining unpaid and credit for the work, to the the Government, or a claim against it, but one against the officials to compel
exclusion of the plaintiffs. Hence, the suit. them to act in accordance with the rights to be established by the contending
architects, or to prevent them from making payment and recognition until the
We are not wanting in authority to sustain the view that the State need not be contending architects have established their respective rights and interests in
a party in this and parallel cases. the funds retained and in the credit for the work done. The order of dismissal is
hereby reversed and set aside, and the case is remanded to the court a quo for
"There is no proposition of law which is better settled than the general rule that further proceedings. With costs against the defendants-appellees.
a sovereign state and its political subdivision cannot be sued in the courts
except upon the statutory consent of the state. Numerous decisions of this Paras, C.J., Bengzon, Montemayor, Reyes, A., Bautista Angelo, Concepcion,
court to that effect may be cited; but it is enough to note that this court, in Reyes, J. B. L., Endencia and Felix, JJ., concur.
banc in a recent case, State v. Woodruf (Miss.) , 150 So. 760, has so held; and
therein overruled a previous decision which had adjudicated that such consent
could be worked out of a statute by implication, when express consent was
absent from the terms of that statute.

"But the rule applies only when the state or its subdivision is actually made a
party upon the record, or is actually necessary to be made a party in order to
furnish the relief demanded by the suit. It does not apply when the suit is
against an officer or agent of the state, and the relief demanded by the suit
requires no affirmative official action on the part of the state nor the FIRST DIVISION
affirmative discharge of any obligation which belongs to the state in its political
capacity, even though the officers or agents who are made defendants disclaim [G.R. No. 52179. April 8, 1991.]
any personal interest in themselves and claim to hold or to act only by virtue of
a title of the state and as its agents and servants. MUNICIPALITY OF SAN FERNANDO, LA UNION, Petitioner, v. HON.
JUDGE ROMEO N. FIRME, JUANA RIMANDO-BANIÑA, LAUREANO
"Thus it will be found, as illustrative of what has been above said, that nearly BANIÑA, JR., SOR MARIETA BANIÑA, MONTANO BANIÑA ORJA
all the cases wherein the rule of immunity from suit against the state, or a BANIÑA AND LYDIA R. BANIÑA, Respondents.
subdivision thereof, has been applied and upheld, are those which demanded a
money judgment, and wherein the discharge of the judgment, if obtained, Mauro C . Cabading, Jr. for Petitioner.
would require the appropriation or an expenditure therefrom, which being
legislative in its character is a province exclusively of the political departments Simeon G. Hipol for Private Respondent.
of the state. And in the less frequent number of cases where no money
judgment is demanded, and the rule of immunity is still upheld, it will be found
in them that the relief demanded would be, nevertheless, to require of the
state or its political subdivision the affirmative performance of some asserted DECISION
obligation, belong to the state in its political capacity.

"When, therefore, officers or agents of the state, although acting officially and MEDIALDEA, J.:
not as individuals, seize the private property of a citizen, the state having no
valid right or title thereto, or trespass upon that property or damage it, the
jurisdiction of the courts to eject the officers or agents, or to enjoin them from
further trespass or damage, in a suit by the owner against the officers or
This is a petition for certiorari with prayer for the issuance of a writ of Petitioner filed its answer and raised affirmative defenses such as lack of
preliminary mandatory injunction seeking the nullification or modification cause of action, non-suability of the State, prescription of cause of action
of the proceedings and the orders issued by the respondent Judge Romeo and the negligence of the owner and driver of the passenger jeepney as
N. Firme, in his capacity as the presiding judge of the Court of First the proximate cause of the collision. chanrob lesvi rtua lawlib rary

Instance of La Union, Second Judicial District, Branch IV, Bauang, La Union


in Civil Case No. 107-BG, entitled "Juana Rimando Baniña, Et. Al. v. In the course of the proceedings, the respondent judge issued the
Macario Nieveras, Et. Al." dated November 4, 1975; July 13, 1976; August following questioned orders, to wit: chanrob 1es vi rtua l 1aw lib rary

23, 1976; February 23, 1977; March 16, 1977; July 26, 1979; September
7, 1979; November 7, 1979 and December 3, 1979 and the decision dated (1) Order dated November 4, 1975 dismissing the cross-claim against
October 10, 1979 ordering defendants Municipality of San Fernando, La Bernardo Balagot;
Union and Alfredo Bislig to pay, jointly and severally, the plaintiffs for
funeral expenses, actual damages consisting of the loss of earning capacity (2) Order dated July 13, 1976 admitting the Amended Answer of the
of the deceased, attorney’s fees and costs of suit and dismissing the Municipality of San Fernando, La Union and Bislig and setting the hearing
complaint against the Estate of Macario Nieveras and Bernardo Balagot. on the affirmative defenses only with respect to the supposed lack of
jurisdiction;
The antecedent facts are as follows: chanrob 1es vi rtual 1aw lib rary

(3) Order dated August 23, 1976 deferring the resolution of the grounds
Petitioner Municipality of San Fernando, La Union is a municipal for the Motion to Dismiss until the trial;
corporation existing under and in accordance with the laws of the Republic
of the Philippines. Respondent Honorable Judge Romeo N. Firme is (4) Order dated February 23, 1977 denying the motion for reconsideration
impleaded in his official capacity as the presiding judge of the Court of of the order of July 13, 1976 filed by the Municipality and Bislig for having
First Instance of La Union, Branch IV, Bauang, La Union. While private been filed out of time;
respondents Juana Rimando-Baniña, Laureano Baniña, Jr., Sor Marietta
Baniña, Montano Baniña, Orja Baniña and Lydia R. Baniña are heirs of the (5) Order dated March 16, 1977 reiterating the denial of the motion for
deceased Laureano Baniña Sr. and plaintiffs in Civil Case No. 107-Bg reconsideration of the order of July 13, 1976;
before the aforesaid court.
(6) Order dated July 26, 1979 declaring the case deemed submitted for
At about 7 o’clock in the morning of December 16, 1965, a collision decision it appearing that parties have not yet submitted their respective
occurred involving a passenger jeepney driven by Bernardo Balagot and memoranda despite the court’s direction; and
owned by the Estate of Macario Nieveras, a gravel and sand truck driven
by Jose Manandeg and owned by Tanquilino Velasquez and a dump truck (7) Order dated September 7, 1979 denying the petitioner’s motion for
of the Municipality of San Fernando, La Union and driven by Alfredo Bislig. reconsideration and or order to recall prosecution witnesses for cross
Due to the impact, several passengers of the jeepney including Laureano examination.
Baniña Sr. died as a result of the injuries they sustained and four (4)
others suffered varying degrees of physical injuries. On October 10, 1979 the trial court rendered a decision, the dispositive
portion is hereunder quoted as follows: jgc:chanro bles. com.ph

On December 11, 1966, the private respondents instituted a compliant for


damages against the Estate of Macario Nieveras and Bernardo Balagot, "IN VIEW OF ALL OF (sic) THE FOREGOING, judgment is hereby rendered
owner and driver, respectively, of the passenger jeepney, which was for the plaintiffs, and defendants Municipality of San Fernando, La Union
docketed Civil Case No. 2183 in the Court of First Instance of La Union, and Alfredo Bislig are ordered to pay jointly and severally, plaintiffs Juana
Branch I, San Fernando, La Union. However, the aforesaid defendants filed Rimando-Baniña, Mrs. Priscilla B. Surell, Laureano Baniña, Jr., Sor Marietta
a Third Party Complaint against the petitioner and the driver of a dump Baniña, Mrs. Fe B. Soriano, Montano Baniña, Orja Baniña and Lydia B.
truck of petitioner.
chanrob les lawl ibra ry : red nad Baniña the sums of P1,500.00 as funeral expenses and P24,744.24 as the
lost expected earnings of the late Laureano Baniña Sr., P30,000.00 as
Thereafter, the case was subsequently transferred to Branch IV, presided moral damages, and P2,500.00 as attorney’s fees. Costs against said
over by respondent judge and was subsequently docketed as Civil Case defendants. chan roblesv irt uallawl ibra ry

No. 107-Bg. By virtue of a court order dated May 7, 1975, the private
respondents amended the complaint wherein the petitioner and its regular "The Complaint is dismissed as to defendants Estate of Macario Nieveras
employee, Alfredo Bislig were impleaded for the first time as defendants. and Bernardo Balagot.
sued without its consent." cra law virtua1aw lib ra ry

"SO ORDERED." (Rollo, p. 30)


Stated in simple parlance, the general rule is that the State may not be
Petitioner filed a motion for reconsideration and for a new trial without sued except when it gives consent to be sued. Consent takes the form of
prejudice to another motion which was then pending. However, respondent express or implied consent.
judge issued another order dated November 7, 1979 denying the motion
for reconsideration of the order of September 7, 1979 for having been filed Express consent may be embodied in a general law or a special law. The
out of time. 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
Finally, the respondent judge issued an order dated December 3, 1979 be passed to enable a person to sue the government for an alleged quasi-
providing that if defendants municipality and Bislig further wish to pursue delict, as in Merritt v. Government of the Philippine Islands (34 Phil 311).
the matter disposed of in the order of July 26, 1979, such should be (see United States of America v. Guinto, G.R. No. 76607, February 26,
elevated to a higher court in accordance with the Rules of Court. Hence, 1990, 182 SCRA 644, 654.)
this petition.
Consent is implied when the government enters into business contracts,
Petitioner maintains that the respondent judge committed grave abuse of thereby descending to the level of the other contracting party, and also
discretion amounting to excess of jurisdiction in issuing the aforesaid when the State files a complaint, thus opening itself to a counterclaim.
orders and in rendering a decision. Furthermore, petitioner asserts that (Ibid)
while appeal of the decision maybe available, the same is not the speedy
and adequate remedy in the ordinary course of law. Municipal corporations, for example, like provinces and cities, are agencies
of the State when they are engaged in governmental functions and
On the other hand, private respondents controvert the position of the therefore should enjoy the sovereign immunity from suit. Nevertheless,
petitioner and allege that the petition is devoid of merit, utterly lacking the they are subject to suit even in the performance of such functions because
good faith which is indispensable in a petition for certiorari and prohibition. their charter provided that they can sue and be sued. (Cruz, Philippine
(Rollo, p. 42.) In addition, the private respondents stress that petitioner Political Law, 1987 Edition, p. 39)
has not considered that every court, including respondent court, has the
inherent power to amend and control its process and orders so as to make A distinction should first be made between suability and liability. "Suability
them conformable to law and justice. (Rollo, p. 43.) 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
The controversy boils down to the main issue of whether or not the not necessarily mean that it is liable; on the other hand, it can never be
respondent court committed grave abuse of discretion when it deferred held liable if it does not first consent to be sued. Liability is not conceded
and failed to resolve the defense of non-suability of the State amounting by the mere fact that the state has allowed itself to be sued. When the
to lack of jurisdiction in a motion to dismiss. 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
In the case at bar, the respondent judge deferred the resolution of the America v. Guinto, supra, p. 659-660).
defense of non-suability of the State amounting to lack of jurisdiction until
trial. However, said respondent judge failed to resolve such defense, Anent the issue of whether or not the municipality is liable for the torts
proceeded with the trial and thereafter rendered a decision against the committed by its employee, the test of liability of the municipality depends
municipality and its driver. on whether or not the driver, acting in behalf of the municipality, is
performing governmental or proprietary functions. As emphasized in the
The respondent judge did not commit grave abuse of discretion when in case of Torio v. Fontanilla (G.R. No. L-29993, October 23, 1978. 85 SCRA
the exercise of its judgment it arbitrarily failed to resolve the vital issue of 599, 606), the distinction of powers becomes important for purposes of
non-suability of the State in the guise of the municipality. However, said determining the liability of the municipality for the acts of its agents which
judge acted in excess of his jurisdiction when in his decision dated October result in an injury to third persons.
10, 1979 he held the municipality liable for the quasi-delict committed by
its regular employee. chanroblesv irt ualawli bra ry Another statement of the test is given in City of Kokomo v. Loy, decided
by the Supreme Court of Indiana in 1916, thus: jg c:chan roble s.com.p h

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 "Municipal corporations exist in a dual capacity, and their functions are
twofold. In one they exercise the right springing from sovereignty, and
while in the performance of the duties pertaining thereto, their acts are ACCORDINGLY, the petition is GRANTED and the decision of the
political and governmental. Their officers and agents in such capacity, respondent court is hereby modified, absolving the petitioner municipality
though elected or appointed by them, are nevertheless public functionaries of any liability in favor of private respondents.
performing a public service, and as such they are officers, agents, and
servants of the state. In the other capacity the municipalities exercise a SO ORDERED.
private, proprietary or corporate right, arising from their existence as legal
persons and not as public agencies. Their officers and agents in the
performance of such functions act in behalf of the municipalities in their
corporate or individual capacity, and not for the state or sovereign power."
(112 N.E., 994-995) (Ibid, pp. 605-606.)

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 G.R. No. L-51806 November 8, 1988
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.
CIVIL AERONAUTICS ADMINISTRATION, Petitioner,
(Cruz, supra, p. 44.) vs. COURT OF APPEALS and ERNEST E.
SIMKE, Respondents.
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." (Rollo, p. 29.) The Solicitor General for petitioner. chanrobl es virtual law li brary

In the absence of any evidence to the contrary, the regularity of the Ledesma, Guytingco, Veleasco & Associates for respondent
performance of official duty is presumed pursuant to Section 3(m) of Rule Ernest E. Simke.
131 of the Revised Rules of Court. Hence, We rule that the driver of the
dump truck was performing duties or tasks pertaining to his office. cralawnad

CORTES, J.:
We already stressed in the case of Palafox, et. al. v. Province of Ilocos
Norte, the District Engineer, and the Provincial Treasurer (102 Phil 1186) Assailed in this petition for review on certiorari is the decision of the Court of Appeals affirming the trial
that "the construction or maintenance of roads in which the truck and the court decision which reads as follows:
driver worked at the time of the accident are admittedly governmental
activities."
cralaw vi rtua1aw l ib rary

WHEREFORE, judgment is hereby rendered ordering defendant to pay


plaintiff the amount of P15,589.55 as full reimbursement of his actual medical
After a careful examination of existing laws and jurisprudence, We arrive and hospital expenses, with interest at the legal rate from the
at the conclusion that the municipality cannot be held liable for the torts commencement of the suit; the amount of P20,200.00 as consequential
committed by its regular employee, who was then engaged in the damages; the amount of P30,000.00 as moral damages; the amount of
discharge of governmental functions. Hence, the death of the passenger —
P40,000.00 as exemplary damages; the further amount of P20,000.00 as
tragic and deplorable though it may be imposed on the municipality no
attorney's fees and the costs [Rollo, p. 24].
duty to pay monetary compensation.

All premises considered, the Court is convinced that the respondent The facts of the case are as follows: c hanrobles virtual l aw li brar y

judge’s dereliction in failing to resolve the issue of non-suability did not


amount to grave abuse of discretion. But said judge exceeded his Private respondent is a naturalized Filipino citizen and at the time of the
jurisdiction when it ruled on the issue of liability. incident was the Honorary Consul Geileral of Israel in the Philippines. c hanr obl es virtual awlibr ar ychanrobles virtual l aw libr ar y
In the afternoon of December 13, 1968, private respondent with several other this Honorable Court of the said finding of fact of respondent appellate court
persons went to the Manila International Airport to meet his future son-in-law. (Garcia v. Court of Appeals, 33 SCRA 622; Ramos v. CA, 63 SCRA 331.) chanrobles virtual l aw libr ar y

In order to get a better view of the incoming passengers, he and his group
proceeded to the viewing deck or terrace of the airport. chanr obl es virtual awlibr arychanrobles virtual l aw libr ar y

3. The Court of Appeals gravely erred in ordering petitioner to pay actual,


consequential, moral and exemplary damages, as well as attorney's fees to
While walking on the terrace, then filled with other people, private respondent respondent Simke - although there was no substantial and competent proof
slipped over an elevation about four (4) inches high at the far end of the to support said awards I Rollo, pp. 93-94 1.
terrace. As a result, private respondent fell on his back and broke his thigh
bone.chanrobles virtualawli brar yc hanrobl es virtual law li brar y

I
chanr obl es virtual law librar y

The next day, December 14, 1968, private respondent was operated on for Invoking the rule that the State cannot be sued without its consent, petitioner
about three hours. chanrobles virtualawlibr ar yc hanrobles virtual l aw li brar y

contends that being an agency of the government, it cannot be made a party-


defendant in this case. c hanrobl es virtual awlibrar yc hanr obl es vir tual law library

Private respondent then filed an action for damages based on quasi-delict


with the Court of First Instance of Rizal, Branch VII against petitioner Civil This Court has already held otherwise in the case of National Airports
Aeronautics Administration or CAA as the entity empowered "to administer, Corporation v. Teodoro, Sr. [91 Phil. 203 (1952)]. Petitioner contends that the
operate, manage, control, maintain and develop the Manila International said ruling does not apply in this case because: First, in the Teodoro case,
Airport ... ." [Sec. 32 (24), R.A. 776]. chanr obles virtualawlibr ar yc hanrobles virtual l aw li brar y

the CAA was sued only in a substituted capacity, the National Airports
Corporation being the original party. Second, in the Teodoro case, the cause
Said claim for damages included, aside from the medical and hospital bills, of action was contractual in nature while here, the cause of action is based
consequential damages for the expenses of two lawyers who had to go on a quasi-delict. Third, there is no specific provision in Republic Act No.
abroad in private respondent's stead to finalize certain business transactions 776, the law governing the CAA, which would justify the conclusion that
and for the publication of notices announcing the postponement of private petitioner was organized for business and not for governmental purposes.
respondent's daughter's wedding which had to be cancelled because of his [Rollo, pp. 94-97]. c hanrobles virtualawli brar yc hanr obl es virtual law librar y

accident [Record on Appeal, p. 5]. c hanr obl es virtual awlibr arychanrobles virtual l aw libr ar y

Such arguments are untenable.


Judgment was rendered in private respondent's favor prompting petitioner to
appeal to the Court of Appeals. The latter affirmed the trial court's decision. First, the Teodoro case, far from stressing the point that the CAA was only
Petitioner then filed with the same court a Motion for, Reconsideration but substituted for the National Airports Corporation, in fact treated the CAA as
this was denied. chanrobles vir tualawli brar yc hanrobl es virtual law li brar y

the real party in interest when it stated that:

Petitioner now comes before this Court raising the following assignment of xxx xxx xxx chanr obl es vir tual law libr ary

errors:
... To all legal intents and practical purposes, the National Airports
1. The Court of Appeals gravely erred in not holding that the present the CAA Corporation is dead and the Civil Aeronautics Administration is its heir or
is really a suit against the Republic of the Philippines which cannot be sued legal representative, acting by the law of its creation upon its own rights and
without its consent, which was not given in this case. c hanrobles virtualawlibr ar yc hanrobles virtual l aw li brar y

in its own name. The better practice there should have been to make the
Civil Aeronautics Administration the third party defendant instead of the
2. The Court of Appeals gravely erred in finding that the injuries of National Airports Corporation. [National Airports Corp. v. Teodoro, supra, p.
respondent Ernest E. Simke were due to petitioner's negligence - although 208.] chanr obl es vir tual law libr ar y

there was no substantial evidence to support such finding; and that the
inference that the hump or elevation the surface of the floor area of the xxx xxx xxx
terrace of the fold) MIA building is dangerous just because said respondent
tripped over it is manifestly mistaken - circumstances that justify a review by
Second, the Teodoro case did not make any qualification or limitation as to (24) To administer, operate, manage, control, maintain and develop the
whether or not the CAA's power to sue and be sued applies only to Manila International Airport and all government-owned aerodromes except
contractual obligations. The Court in the Teodoro case ruled that Sections 3 those controlled or operated by the Armed Forces of the Philippines including
and 4 of Executive Order 365 confer upon the CAA, without any qualification, such powers and duties as: (a) to plan, design, construct, equip, expand,
the power to sue and be sued, albeit only by implication. Accordingly, this improve, repair or alter aerodromes or such structures, improvement or air
Court's pronouncement that where such power to sue and be sued has been navigation facilities; (b) to enter into, make and execute contracts of any kind
granted without any qualification, it can include a claim based on tort or with any person, firm, or public or private corporation or entity; ... . c hanr obl es virtual awlibr ar ychanrobles virtual l aw libr ar y

quasi-delict [Rayo v. Court of First Instance of Bulacan, G.R. Nos. 55273-83,


December 19,1981, 1 1 0 SCRA 4561 finds relevance and applicability to the (25) To determine, fix, impose, collect and receive landing fees, parking
present case. space fees, royalties on sales or deliveries, direct or indirect, to any aircraft
for its use of aviation gasoline, oil and lubricants, spare parts, accessories
Third, it has already been settled in the Teodoro case that the CAA as an and supplies, tools, other royalties, fees or rentals for the use of any of the
agency is not immune from suit, it being engaged in functions pertaining to a property under its management and control. c hanrobl es virtual awlibrar yc hanr obl es virtual law librar y

private entity.
xxx xxx xxx
xxx xxx xxx chanr obl es vir tual law libr ary

From the foregoing, it can be seen that the CAA is tasked with private or non-
The Civil Aeronautics Administration comes under the category of a private governmental functions which operate to remove it from the purview of the
entity. Although not a body corporate it was created, like the National Airports rule on State immunity from suit. For the correct rule as set forth in the
Corporation, not to maintain a necessary function of government, but to run Tedoro case states:
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 xxx xxx xxx chanr obl es vir tual law libr ary

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 Not all government entities, whether corporate or non-corporate, are immune
private concerns. [National Airports Corp. v. Teodoro, supra, p. 207.] c hanrobles virtual l aw li brar y

from suits. Immunity functions suits is determined by the character of the


objects for which the entity was organized. The rule is thus stated in Corpus
xxx xxx xxx Juris:

True, the law prevailing in 1952 when the Teodoro case was promulgated Suits against State agencies with relation to matters in which they have
was Exec. Order 365 (Reorganizing the Civil Aeronautics Administration and assumed to act in private or non-governmental capacity, and various suits
Abolishing the National Airports Corporation). Republic Act No. 776 (Civil against certain corporations created by the state for public purposes, but to
Aeronautics Act of the Philippines), subsequently enacted on June 20, 1952, engage in matters partaking more of the nature of ordinary business rather
did not alter the character of the CAA's objectives under Exec, Order 365. than functions of a governmental or political character, are not regarded as
The pertinent provisions cited in the Teodoro case, particularly Secs. 3 and 4 suits against the state. The latter is true, although the state may own stock or
of Exec. Order 365, which led the Court to consider the CAA in the category property of such a corporation for by engaging in business operations
of a private entity were retained substantially in Republic Act 776, Sec. 32 through a corporation, the state divests itself so far of its sovereign character,
(24) and (25). Said Act provides: and by implication consents to suits against the corporation. (59 C.J., 313)
[National Airport Corporation v. Teodoro, supra, pp. 206-207; Emphasis
Sec. 32. Powers and Duties of the Administrator. Subject to the general - supplied.]
control and supervision of the Department Head, the Administrator shall have
among others, the following powers and duties: c hanrobles virtual l aw li brar y

This doctrine has been reaffirmed in the recent case of Malong v. Philippine
National Railways [G.R. No. L-49930, August 7, 1985, 138 SCRA 631, where
xxx xxx xxx chanr obl es vir tual law libr ary it was held that the Philippine National Railways, although owned and
operated by the government, was not immune from suit as it does not
exercise sovereign but purely proprietary and business functions.
Accordingly, as the CAA was created to undertake the management of These factual findings are binding and conclusive upon this Court. Hence,
airport operations which primarily involve proprietary functions, it cannot avail the CAA cannot disclaim its liability for the negligent construction of the
of the immunity from suit accorded to government agencies performing elevation since under Republic Act No. 776, it was charged with the duty of
strictly governmental functions. chanrobles virtualawli brar yc hanrobles virtual law li brar y planning, designing, constructing, equipping, expanding, improving, repairing
or altering aerodromes or such structures, improvements or air navigation
II
chanr obl es vir tual law libr ary
facilities [Section 32, supra, R.A. 776]. In the discharge of this obligation, the
CAA is duty-bound to exercise due diligence in overseeing the construction
Petitioner tries to escape liability on the ground that there was no basis for a and maintenance of the viewing deck or terrace of the airport. chanr obl es virtualawlibr ar yc hanrobles virtual l aw li brar y

finding of negligence. There can be no negligence on its part, it alleged,


because the elevation in question "had a legitimate purpose for being on the It must be borne in mind that pursuant to Article 1173 of the Civil Code, "(t)he
terrace and was never intended to trip down people and injure them. It was fault or negligence of the obligor consists in the omission of that diligence
there for no other purpose but to drain water on the floor area of the terrace" which is required by the nature of the obligation and corresponds with the
[Rollo, P. 99]. c hanr obl es virtual awlibr ar ychanrobles virtual l aw libr ar y
circumstances of the person, of the time and of the place." Here, the
obligation of the CAA in maintaining the viewing deck, a facility open to the
public, requires that CAA insure the safety of the viewers using it. As these
To determine whether or not the construction of the elevation was done in a
people come to the viewing deck to watch the planes and passengers, their
negligent manner, the trial court conducted an ocular inspection of the
tendency would be to look to where the planes and the incoming passengers
premises.
are and not to look down on the floor or pavement of the viewing deck. The
CAA should have thus made sure that no dangerous obstructions or
xxx xxx xxx chanr obl es vir tual law libr ary

elevations exist on the floor of the deck to prevent any undue harm to the
public. c hanrobl es virtual awlibrar yc hanr obl es virtual law librar y

... This Court after its ocular inspection found the elevation shown in Exhs. A
or 6-A where plaintiff slipped to be a step, a dangerous sliding step, and the The legal foundation of CAA's liability for quasi-delict can be found in Article
proximate cause of plaintiffs injury... chanrobles virtualawlibr ar yc hanrobles virtual l aw li brar y

2176 of the Civil Code which provides that "(w)hoever by act or omission
causes damage to another, there being fault or negligence, is obliged to pay
xxx xxx xxx chanr obl es vir tual law libr ary
for the damage done... As the CAA knew of the existence of the dangerous
elevation which it claims though, was made precisely in accordance with the
This Court during its ocular inspection also observed the dangerous and plans and specifications of the building for proper drainage of the open
defective condition of the open terrace which has remained unrepaired terrace [See Record on Appeal, pp. 13 and 57; Rollo, p. 391, its failure to
through the years. It has observed the lack of maintenance and upkeep of have it repaired or altered in order to eliminate the existing hazard constitutes
the MIA terrace, typical of many government buildings and offices. Aside such negligence as to warrant a finding of liability based on quasi-delict upon
from the litter allowed to accumulate in the terrace, pot holes cause by CAA. chanrobles virtualawli brar yc hanrobles virtual l aw li brar y

missing tiles remained unrepaired and unattented. The several elevations


shown in the exhibits presented were verified by this Court during the ocular The Court finds the contention that private respondent was, at the very least,
inspection it undertook. Among these elevations is the one (Exh. A) where guilty of contributory negligence, thus reducing the damages that plaintiff
plaintiff slipped. This Court also observed the other hazard, the slanting or may recover, unmeritorious. Contributory negligence under Article 2179 of
sliding step (Exh. B) as one passes the entrance door leading to the terrace the Civil Code contemplates a negligent act or omission on the part of the
[Record on Appeal, U.S., pp. 56 and 59; Emphasis supplied.] plaintiff, which although not the proximate cause of his injury, contributed to
his own damage, the proximate cause of the plaintiffs own injury being the
The Court of Appeals further noted that: defendant's lack of due care. In the instant case, no contributory negligence
can be imputed to the private respondent, considering the following test
The inclination itself is an architectural anomaly for as stated by the said formulated in the early case of Picart v. Smith, 37 Phil. 809 (1918):
witness, it is neither a ramp because a ramp is an inclined surface in such a
way that it will prevent people or pedestrians from sliding. But if, it is a step The test by which to determine the existence of negligence in a particular
then it will not serve its purpose, for pedestrian purposes. (tsn, p. 35, Id.) case may be stated as follows: Did the defendant in doing the alleged
[rollo, p. 29.] negligent act use that reasonable care and caution which an ordinarily
prudent man would have used in the same situation? If not, then he is guilty III chanrobles virtual l aw libr ar y

of negligence. The law here in effect adopts the standard supposed to be


supplied by the imaginary conduct of the discreet paterfamilias of the Roman Finally, petitioner appeals to this Court the award of damages to private
law. The existence of the negligence in a given case is not determined by respondent. The liability of CAA to answer for damages, whether actual,
reference to the personal judgment of the actor in the situation before him. moral or exemplary, cannot be seriously doubted in view of one conferment
The law considers what would be reckless, blameworthy, or negligent in the of the power to sue and be sued upon it, which, as held in the case of Rayo
man of ordinary intelligence and prudence and determines liability by v. Court of First Instance, supra, includes liability on a claim for quasi-dilict. In
that.
c hanr obl es virtual awlibr ar ychanrobles virtual l aw libr ar y

the aforestated case, the liability of the National Power Corporation to


answer for damages resulting from its act of sudden, precipitate and
The question as to what would constitute the conduct of a prudent man in a simultaneous opening of the Angat Dam, which caused the death of several
given situation must of course be always determined in the light of human residents of the area and the destruction of properties, was upheld since the
experience and in view of the facts involved in the particular case. Abstract o,rant of the power to sue and be sued upon it necessarily implies that it can
speculations cannot be here of much value but this much can be profitably be held answerable for its tortious acts or any wrongful act for that matter.
virtual law li brar y
chanr obles virtualawlibr ar yc hanrobles

said: Reasonable men-overn their conduct by the circumstances which are


before them or known to them. They are not, and are not supposed to be With respect to actual or compensatory damages, the law mandates that the
omniscient of the future. Hence they can be expected to take care only when same be proven.
there is something before them to suggest or warn of danger. Could a
prudent man, in the case under consideration, foresee harm as a result of the
Art. 2199. Except as provided by law or by stipulation, one are entitled to an
course actually pursued' If so, it was the duty of the actor to take precautions
adequate compensation only for such pecuniary loss suffered by him as he
to guard against that harm. Reasonable foresight of harm, followed by the
has duly proved. Such compensation is referred to as actual on
ignoring of the suggestion born of this prevision, is always necessary before
compensatory damages [New Civil Code].
negligence can be held to exist.... [Picart v. Smith, supra, p. 813; Emphasis
supplied.]
Private respondent claims P15,589.55 representing medical and
hospitalization bills. This Court finds the same to have been duly proven
The private respondent, who was the plaintiff in the case before the lower
through the testimony of Dr. Ambrosio Tangco, the physician who attended
court, could not have reasonably foreseen the harm that would befall him,
to private respondent (Rollo, p. 26) and who Identified Exh. "H" which was his
considering the attendant factual circumstances. Even if the private
bill for professional services [Rollo, p. 31].
respondent had been looking where he was going, the step in question could
c hanrobles virtual awlibrar y chanr obl es vir tual law libr ar y

not easily be noticed because of its construction. As the trial court found:
Concerning the P20,200.00 alleged to have been spent for other expenses
such as the transportation of the two lawyers who had to represent private
In connection with the incident testified to, a sketch, Exhibit O, shows a
respondent abroad and the publication of the postponement notices of the
section of the floorings oil which plaintiff had tripped, This sketch reveals two
wedding, the Court holds that the same had also been duly proven. Private
pavements adjoining each other, one being elevated by four and one-fourth
respondent had adequately shown the existence of such losses and the
inches than the other. From the architectural standpoint the higher, pavement
amount thereof in the testimonies before the trial court [CA decision, p. 81. At
is a step. However, unlike a step commonly seen around, the edge of the
any rate, the findings of the Court of Appeals with respect to this are findings
elevated pavement slanted outward as one walks to one interior of the
of facts [One Heart Sporting Club, Inc. v. Court of Appeals, G.R. Nos.
terrace. The length of the inclination between the edges of the two
5379053972, Oct. 23, 1981, 108 SCRA 4161 which, as had been held time
pavements is three inches. Obviously, plaintiff had stepped on the inclination
and again, are, as a general rule, conclusive before this Court [Sese v.
because had his foot landed on the lower pavement he would not have lost
Intermediate Appellate Court, G.R. No. 66186, July 31, 1987,152 SCRA
his balance. The same sketch shows that both pavements including the
585].
inclined portion are tiled in red cement, and as shown by the photograph
chanr obl es virtualawlibr ar yc hanrobles virtual l aw libr ar y

Exhibit A, the lines of the tilings are continuous. It would therefore be difficult
for a pedestrian to see the inclination especially where there are plenty of With respect to the P30,000.00 awarded as moral damages, the Court holds
persons in the terrace as was the situation when plaintiff fell down. There private respondent entitled thereto because of the physical suffering and
was no warning sign to direct one's attention to the change in the elevation of physical injuries caused by the negligence of the CAA [Arts. 2217 and 2219
the floorings. [Rollo, pp. 2829.] (2), New Civil Code]. c hanr obl es virtual awlibr arychanrobles virtual l aw libr ar y
With respect to the award of exemplary damages, the Civil Code explicitly, WHEREFORE, finding no reversible error, the Petition for review on certiorari
states: is DENIED and the decision of the Court of Appeals in CA-G.R. No. 51172-R
is AFFIRMED. chanrobles virtualawlibr ar yc hanrobles virtual l aw li brar y

Art. 2229. Exemplary or corrective damages, are imposed, by way of


example or correction for the public good, in addition to the moral, liquidated SO ORDERED.
or compensatory chanrobles virtual l aw libr ar y

Fernan, C.J., Gutierrez, Jr., Feliciano and Bidin, JJ., concur.


Art. 2231. In quasi-delicts, exemplary damages may be granted if the
defendant acted with gross negligence.

Gross negligence which, according to the Court, is equivalent to the term


"notorious negligence" and consists in the failure to exercise even slight care
[Caunan v. Compania General de Tabacos, 56 Phil. 542 (1932)] can be
attributed to the CAA for its failure to remedy the dangerous condition of the
questioned elevation or to even post a warning sign directing the attention of
the viewers to the change in the elevation of the floorings notwithstanding its
knowledge of the hazard posed by such elevation [Rollo, pp. 28-29; Record [G.R. No. L-23139. December 17, 1966.]
oil Appeal, p. 57]. The wanton disregard by the CAA of the safety of the
MOBIL PHILIPPINES EXPLORATION, INC., Plaintiff-Appellant, v.
people using the viewing deck, who are charged an admission fee, including
CUSTOMS ARRASTRE SERVICE and BUREAU OF CUSTOMS, Defendants-
the petitioner who paid the entrance fees to get inside the vantage place [CA Appellees.
decision, p. 2; Rollo, p. 25] and are, therefore, entitled to expect a facility that
is properly and safely maintained - justifies the award of exemplary damages Alejandro Basin, Jr. & Associates, for Plaintiff-Appellant.
against the CAA, as a deterrent and by way of example or correction for the
public good. The award of P40,000.00 by the trial court as exemplary Felipe T . Cuison for Defendants-Appellees.
damages appropriately underscores the point that as an entity changed with
providing service to the public, the CAA. like all other entities serving the
public. has the obligation to provide the public with reasonably safe SYLLABUS
service.c hanr obl es virtual awlibr arychanrobles virtual l aw libr ar y

Finally, the award of attorney's fees is also upheld considering that under Art. 1. REMEDIAL LAW; PARTIES TO CIVIL ACTION. — A defendant in a civil suit
2208 (1) of the Civil Code, the same may be awarded whenever exemplary must be (1) a natural person; (2) a juridical person or (3) an entity authorized
by law to be sued.
damages are awarded, as in this case, and,at any rate, under Art. 2208 (11),
the Court has the discretion to grant the same when it is just and 2. ID.; ID.; BUREAU OF CUSTOMS OR CUSTOMS ARRASTRE SERVICE NOT
equitable. chanrobles virtualawlibr ar yc hanrobles virtual l aw li brar y

PERSONS: IMMUNITY FROM SUIT. — Neither the Bureau of Customs (a fortiori)


nor its function unit, the Customs Arrastre Service, is a person. They are
However, since the Manila International Airport Authority (MIAA) has taken merely parts of the machinery of Government. The Bureau of Customs is a
over the management and operations of the Manila International Airport bureau under the Department of Finance (Sec. 81, Rev. Adm. Code); and the
Customs Arrastre Service is a unit of the Bureau of Customs, set up under
[renamed Ninoy Aquino International Airport under Republic Act No. 6639]
Customs Administrative Order No. 8-62 of November 9, 1962. It follows that
pursuant to Executive Order No. 778 as amended by executive Orders Nos. defendants herein cannot be sued under the first two above-mentioned
903 (1983), 909 (1983) and 298 (1987) and under Section 24 of the said categories of natural or juridical persons.
Exec. Order 778, the MIAA has assumed all the debts, liabilities and
obligations of the now defunct Civil Aeronautics Administration (CAA), the 3. ARRASTRE SERVICE; NATURE OF ARRASTRE SERVICE. — The statutory
liabilities of the CAA have now been transferred to the MIAA. c hanrobl es virtual awlibrar yc hanr obl es virtual law librar y provision on arrastre service is found in Section 1213 of Republic Act 1937
(Tariff and Customs Code, effective June 1, 1957). The statutory provisions
authorizing the grant by contract to any private party of the right to render
said arrastre services necessarily imply that the same is deemed by Congress
to be proprietary or non-governmental function. are strictly construed and waiver of immunity, being in derogation of
sovereignty, will not be lightly inferred (49 Am. Jur., States, Territories and
4. ID.; PERFORMANCE BY NON-CORPORATE GOVERNMENT ENTITY OF Dependencies, Sec. 96, p. 314; Petty v. Tennessee-Missouri Bridge Com, 359
PROPRIETARY FUNCTIONS DOES NOT MAKE IT SUABLE. — The fact that a non- U.S. 275, 3 L. Ed. 804, 79 S. Ct. 785).
corporate government entity performs a function proprietary in nature does not
necessarily result in its being suable. If said non-governmental function is
undertaken as an incident to its governmental function, there is no waiver DECISION
thereby of the sovereign immunity from suit extended to such government
entity (Bureau of Printing, Et Al., v. Bureau of Printing Employees Association,
Et Al., G.R. No. L-15751, January 28, 1961).
BENGZON, J.P., J.:
5. ID.; ARRASTRE FUNCTION OF BUREAU OF CUSTOMS ALTHOUGH
PROPRIETARY IS NECESSARY INCIDENT TO ITS GOVERNMENTAL FUNCTION.
— Although said arrastre function may be deemed proprietary, it is a necessary Four cases of rotary drill parts were shipped from abroad on S.S. "Leoville"
incident of the primary and governmental function of the Bureau of Customs, sometime in November of 1962, consigned to Mobil Philippines Exploration,
so that engaging in the same does not necessarily render said Bureau liable to Inc., Manila. The shipment arrived at the Port of Manila on April 10, 1963, and
suit. For otherwise, it could not perform its governmental function without was discharged to the custody of the Customs Arrastre Service, the unit of the
necessarily exposing itself to suit. Sovereign immunity granted as to the end, Bureau of Customs then handling arrastre operations therein. The Customs
should not be denied as to the necessary means to that end. Arrastre Service later delivered to the broker of the consignee three cases only
of the shipment. chanrob les vi rtual lawlib rary

6. ADMINISTRATIVE LAW; NATURE OF FUNCTIONS OF BUREAU OF CUSTOMS;


ARRASTRE SERVICE NECESSARY INCIDENT TO FUNCTIONS OF BUREAU. — The On April 4, 1964 Mobil Philippines Exploration, Inc., filed suit in the Court of
Bureau of Customs is part of the Department of Finance (Sec. 81, Rev. Adm. First Instance of Manila against the Customs Arrastre Service and the Bureau
Code), with no personality of its own apart from that of the national of Customs to recover the value of the undelivered case in the amount of
government. Its primary function is governmental, that of assessing and P18,493.37 plus other damages.
collecting lawful revenues from imported articles and all other tariff and
customs duties, fees, charges, fines, and penalties (Sec. 602, Republic Act No. On April 20, 1964 the defendants filed a motion to dismiss the complaint on
1937). To this function, arrastre service is a necessary incident. For practical the ground that not being persons under the law, defendants cannot be sued.
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 After plaintiff opposed the motion, the court, on April 25, 1964, dismissed the
merchandise being imported and imposing the duty provided in the Tariff law. complaint on the ground that neither the Customs Arrastre Service nor the
Customs authorities and officers must see to it that the declaration tallies with Bureau of Customs is suable. Plaintiff appealed to Us from the order of
the merchandise actually landed. And this checking up requires that the landed dismissal.
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 Raised, therefore, in this appeal is the purely legal question of the defendants’
operations. suability under the facts stated.

7. CONSTITUTIONAL LAW; STATE CANNOT BE SUED WITHOUT ITS CONSENT. Appellant contends that not all government entities are immune from suit; that
— Regardless of the merits of the claim against it, the State, for obvious defendant Bureau of Customs as operator of the arrastre service at the Port of
reasons of public policy, cannot be sued without its consent. Plaintiff should Manila, is discharging proprietary functions and as such can be sued by private
have filed its present claim with the General Auditing Office, it being for individuals.
money, under the provisions of Commonwealth Act No. 327, which state the
conditions under which money claims against the Government may be filed. The Rules of Court, in Section 1, Rule 3, provide: jgc: chan robles .com.p h

8. ID.; ID.; BUREAU OF CUSTOMS IMMUNE FROM SUIT. — The Bureau of "SECTION 1. Who may be parties. — Only natural or juridical persons or
Customs, acting as part of the machinery of the national government in the entities authorized by law may be parties in a civil action." cralaw virt ua1aw lib ra ry

operation of the arrastre service, pursuant to express legislative mandate and


as a necessary incident of its prime governmental function, is immune from Accordingly, a defendant in a civil suit must be (1) a natural person; (2) a
suit, there being no statute to the contrary. juridical person or (3) an entity authorized by law to be sued. Neither the
Bureau of Customs nor (a fortiori) its function unit, the Customs Arrastre
9. ID.; ID.; STATUTORY PROVISIONS WAIVING STATE IMMUNITY FROM SUIT, Service, is a person. They are merely parts of the machinery of Government.
HOW CONSTRUED. — Statutory provisions waiving State immunity from suit The Bureau of Customs is a bureau under the Department of Finance (Sec. 81,
Revised Administrative Code); and as stated, the Customs Arrastre Service is a Customs can be sued. Said issue of suability was not resolved, the resolution
unit of the Bureau of Customs, set up under Customs Administrative Order No. stating only that "the issue on the personality or lack of personality of the
8-62 of November 9, 1962 (Annex "A" to Motion to Dismiss, pp. 13-15, Record Bureau of Customs to be sued does not affect the jurisdiction of the lower court
on Appeal). It follows that the defendants herein cannot be sued under the first over the subject matter of the case, aside from the fact that amendment may
two above-mentioned categories of natural or juridical persons. be made in the pleadings by the inclusion as respondents of the public officers
deemed responsible for the unfair labor practice acts charged by petitioning
Nonetheless it is urged that by authorizing the Bureau of Customs to engage in Unions."
arrastre service, the law thereby impliedly authorizes it to be sued as arrastre
operator, for the reason that the nature of this function (arrastre service) is Now, the fact that a non-corporate government entity performs a function
proprietary, not governmental. Thus, insofar as arrastre operation is proprietary in nature does not necessarily result in its being suable. If said
concerned, appellant would put defendants under the third category of "entities non-governmental function is undertaken as an incident to its governmental
authorized by law" to be sued. Stated differently, it is argued that while there function, there is no waiver thereby of the sovereign immunity from suit
is no law expressly authorizing the Bureau of Customs to sue or be sued, still extended to such government entity. This is the doctrine recognized in Bureau
its capacity to be sued is implied from its very power to render arrastre service of Printing Et. Al., v. Bureau of Printing Employees Association, Et Al., L-15751,
at the Port of Manila, which, it is alleged, amounts to the transaction of a January 25, 1961: jgc:chanroble s.com.p h

private business.
"The Bureau of Printing is an office of the Government created by the
The statutory provision on arrastre service is found in Section 1213 of Republic Administrative Code of 1916 (Act No. 2657). As such instrumentality of the
Act No. 1937 (Tariff and Customs Code, effective June 1, 1957), and it Government, it operates under the direct supervision of the Executive
states:jgc:chanrob les.co m.ph Secretary, Office of the President, and is ‘charged with the execution of all
printing and binding, including work incidental to those processes, required by
"SECTION 1213. Receiving, Handling, Custody and Delivery of Articles. — The the National Government and such other work of the same character as said
Bureau of Customs shall have exclusive supervision and control over the Bureau may, by law or by order of the (Secretary of Finance) Executive
receiving, handling, custody and delivery of articles on the wharves and piers Secretary, be authorized to undertake. . . .’ (Sec. 1644, Rev. Adm. Code). It
at all ports of entry and in the exercise of its functions it is hereby authorized has no corporate existence, and its appropriations are provided for in the
to acquire, take over, operate and superintend such plants and facilities as may General Appropriations Act. Designed to meet the printing needs of the
be necessary for the receiving, handling, custody and delivery of articles, and Government, it is primarily a service bureau and, obviously, not engaged in
the convenience and comfort of passengers and the handling of baggage, as business or occupation for pecuniary profit.
well as to acquire fire protection equipment for use in the piers: Provided, That
whenever in his judgment the receiving, handling, custody and delivery of x x x
articles can be carried on by private parties with greater efficiency, the
Commissioner may, after public bidding and subject to the approval of the
department head, contract with any private party for the service of receiving, ". . . Clearly, while the Bureau of Printing is allowed to undertake private
handling, custody and delivery of articles, and in such event, the contract may printing jobs, it cannot be pretended that it is thereby an industrial or business
include the sale or lease of government-owned equipment and facilities used in concern. The additional work it executes for private parties is merely incidental
such service." cralaw virt ua1aw li bra ry
to its function, and although such work may be deemed proprietary in
character, there is no showing that the employees performing said proprietary
In Associated Workers Union, Et Al., v. Bureau of Customs, Et Al., L-21397, function are separate and distinct from those employed in its general
resolution of August 6, 1963, this Court indeed held "that the foregoing governmental functions.
statutory provisions authorizing the grant by contract to any private party of
the right to render said arrastre services necessarily imply that the same is x x x
deemed by Congress to be proprietary or non-governmental function." The
issue in said case, however, was whether laborers engaged in arrastre service
fall under the concept of employees in the Government employed in "Indeed, as an office of the Government, without any corporate or judicial
governmental functions for purposes of the prohibition in Section 11, Republic personality, the Bureau of Printing cannot be sued. (Sec. 1, Rule 3, Rules of
Act 875 to the effect that "employees in the Government . . . shall not strike," Court.) Any suit, action or proceeding against it, if it were to produce any
but "may belong to any labor organization which does not impose the effect, would actually be a suit, action or proceeding against the Government
obligation to strike or to join in strike" which prohibition "shall apply only to itself, and the rule is settled that the Government cannot be sued without its
employees employed in governmental functions of the Government. . . ." cralaw virt ua1aw lib rary

consent much less over its objection. (See Metran v. Paredes, 45 Off. Gaz.,
2835; Angat River Irrigation System, Et Al., v. Angat River Workers Union, Et
Thus, the ruling therein was that the Court of Industrial Relations had Al., G.R. Nos. L-10943-44, December 28, 1957.)"
jurisdiction over the subject matter of the case, but not that the Bureau of
its present claim with the General Auditing Office, it being for money, under
The situation here is not materially different. The Bureau of Customs, to the provisions of Commonwealth Act 327, which state the conditions under
repeat, is part of the Department of Finance (Sec. 81, Rev. Adm. Code), with which money claims against the Government may be filed.
no personality of its own apart from that of the national government. Its
primary function is governmental, that of assessing and collecting lawful It must be remembered that statutory provisions waiving State immunity from
revenues from imported articles and all other tariff and customs duties, fees, suit are strictly construed and that waiver of immunity, being in derogation of
charges, fines and penalties (Sec. 602, R. A. 1937). To this function, arrastre sovereignty, will not be lightly inferred. (49 Am. Jur., States, Territories and
service is a necessary incident. For practical reasons said revenues and Dependencies, Sec. 96, p. 314; Petty v. Tennessee-Missouri Bridge Com., 359
customs duties can not be assessed and collected by simply receiving the U.S. 275, 3 L. Ed. 804, 79 S. Ct. 785.) From the provision authorizing the
importer’s or ship agent’s or consignee’s declaration of merchandise being Bureau of Customs to lease arrastre operations to private parties, We see no
imported and imposing the duty provided in the Tariff law. Customs authorities authority to sue the said Bureau in the instances where it undertakes to
and officers must see to it that the declaration tallies with the merchandise conduct said operation itself. The Bureau of Customs, acting as part of the
actually landed. And this checking up requires that the landed merchandise be machinery of the national government in the operation of the arrastre service,
hauled from the ship’s side to a suitable place in the customs premises to pursuant to express legislative mandate and as a necessary incident of its
enable said customs officers to make it, that is, it requires arrastre operation. 1 prime governmental function, is immune from suit, there being no statute to
the contrary.chanroblesv irtuallaw lib rary:re d

Clearly, therefore, although said arrastre function may be deemed proprietary,


it is a necessary incident of the primary and governmental function of the WHEREFORE, the order of dismissal appealed from is hereby affirmed, with
Bureau of Customs, so that engaging in the same does not necessarily render costs against appellant. So ordered.
said Bureau liable to suit. For otherwise, it could not perform its governmental
function without necessarily exposing itself to suit. Sovereign immunity, Concepcion, C.J., Reyes, J.B.L., Barrera, Dizon, Regala, Zaldivar, and
granted as to the end, should not be denied as to the necessary means to that Sanchez, JJ., concur.
end. chanro bles. com:cra law:nad

Makalintal, J., concurs in the result.


And herein lies the distinction between the present case and that of National
Airports Corporation v. Teodoro, 91 Phil., 203, on which appellant would rely. Castro, J., reserves his vote.
For there, the Civil Aeronautics Administration was found to have for its prime
reason for existence not a governmental but a proprietary function, so that to
it the latter was not a mere incidental function: jgc:chan rob les.com. ph

"Among the general powers of the Civil Aeronautics Administration are, under
Section 3, to execute contracts of any kind, to purchase property, and to grant
concession rights, and under Section 4, to charge landing fees, royalties on
sales to aircraft of aviation gasoline, accessories and supplies, and rentals for
[G.R. No. L-15751. January 28, 1961.]
the use of any property under its management.
BUREAU OF PRINTING, SERAFIN SALVADOR and MARIANO
"These provisions confer upon the Civil Aeronautics Administration, in our
LEDESMA, Petitioners, v. THE BUREAU OF PRINTING EMPLOYEES
opinion, the power to sue and be sued. The power to sue and be sued is
ASSOCIATION (NLU), PACIFICO ADVINCULA, ROBERTO MENDOZA,
implied from the power to transact private business . . .
PONCIANO ARGANDA and TEODULO TOLERAN, Respondents.
x x x Solicitor General for Petitioner.

Eulogio Lerum for Respondents.


"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 revenue be not its prime objectives but SYLLABUS
rather the promotion of travel and the convenience of the traveling public . . ."
virtua 1aw lib rary
cralaw

Regardless of the merits of the claim against it, the State, for obvious reasons 1. JURISDICTION; FUNCTIONS OF BUREAU OF PRINTING NOT EXCLUSIVELY
of public policy, cannot be sued without its consent. Plaintiff should have filed PROPRIETARY IN NATURE; COURT OF INDUSTRIAL RELATIONS WITHOUT
JURISDICTION OVER UNFAIR LABOR PRACTICE BROUGHT AGAINST THE
BUREAU. — The Bureau of Printing is primarily a service bureau and is not relief, they prayed that the case be dismissed for lack of jurisdiction.
engaged in business or occupation for pecuniary benefit. Although it receives Thereafter, before the case could be heard, petitioners filed an "Omnibus
outside jobs and many of its employees are paid for overtime work on regular Motion" asking for a preliminary hearing on the question of jurisdiction raised
working days and on holidays, these facts do not justify the conclusion that its by them in their answer and for suspension of the trial of the case on the
functions are "exclusively proprietary in nature." Hence, the Court of Industrial merits pending the determination of such jurisdictional question. The motion
Relations is without jurisdiction to hear and determine complaints for unfair was granted, but after hearing, the trial judge of the Industrial Court in an
labor practice filed against the Bureau of Printing. order dated January 27, 1959 sustained the jurisdiction of the court on the
theory that the functions of the Bureau of Printing are "exclusively proprietary
2. ADMINISTRATIVE LAW; SUITS AGAINST THE STATE; BUREAU OF PRINTING in nature," and, consequently, denied the prayer for dismissal. Reconsideration
NOT SUBJECT TO SUIT WITHOUT ITS CONSENT. — As an office of the of this order having been also denied by the court en banc, the petitioners
Government, without any corporate or juridical personality, the Bureau of brought the case to this court through the present petition for certiorari and
Printing cannot be sued without its consent, much less over its objection. prohibition.
(Angat River Irrigation System, et. al. v. Angat River Workers’ Union, et. al.,
102 Phil., 789.) We find the petition to be meritorious.

The Bureau of Printing is an office of the Government created by the


DECISION Administrative Code of 1916 (Act No. 2657). As such instrumentality of the
Government, it operates under the direct supervision of the Executive
Secretary, Office of the President, and is "charged with the execution of all
printing and binding, including work incidental to those processes, required by
GUTIERREZ DAVID, J.: the National Government and such other work of the same character as said
Bureau may, by law or by order of the (Secretary of Finance) Executive
Secretary, be authorized to undertake . . . ." (Sec. 1644, Rev. Adm. Code.) It
This is a petition for certiorari and prohibition with preliminary injunction to has no corporate existence, and its appropriations are provided for in the
annul certain orders of the respondent Court of Industrial Relations and to General Appropriations Act. Designed to meet the printing needs of the
restrain it from further proceeding in the action for unfair labor practice Government, it is primarily a service bureau and is obviously, not engaged in
pending before it on the ground of lack of jurisdiction. Giving due course to the business or occupation for pecuniary profit.
petition, this Court ordered the issuance of the writ of preliminary injunction
prayed for without bond. It is true, as stated in the order complained of, that the Bureau of Printing
receives outside jobs and that many of its employees are paid for overtime
The action in question was — upon complaint of the respondent Bureau of work on regular working days and on holidays, but these facts do not justify
Printing Employees Association (NLU), Pacifico Advincula, Roberto Mendoza, the conclusion that its functions are "exclusively proprietary in nature."
Ponciano Arganda and Teodulo Toleran — filed by an acting prosecutor of the Overtime work in the Bureau of Printing is done only when the interest of the
Industrial Court against herein petitioners Bureau of Printing, Serafin Salvador, service so requires (sec. 566, Rev. Adm. Code). As a matter of administrative
the Acting Secretary of the Department of General Services, and Mariano policy, the overtime compensation may be paid, but such payment is
Ledesma, the Director of the Bureau of Printing. The complaint alleged that discretionary with the head of the Bureau depending upon its current
Serafin Salvador and Mariano Ledesma have been engaging in unfair labor appropriations, so that it cannot be the basis for holding that the functions of
practice by interfering with, or coercing the employees of the Bureau of said Bureau are wholly proprietary in character. Anent the additional work it
Printing, particularly the members of the complaining association, in the executes for private persons, we find that such work is done upon request, as
exercise of their right to self-organization and discriminating in regard to hire distinguished from those solicited, and only "as the requirements of
and tenure of their employment in order to discourage them from pursuing Government work will permit" (sec. 1654, Rev. Adm. Code), and "upon terms
their union activities. fixed by the Director of Printing, with the approval of the Department Head"
(sec. 1665, id.) . As shown by the uncontradicted evidence of the petitioners,
Answering the complaint, the petitioners Bureau of Printing, Serafin Salvador most of these works consist of orders for greeting cards during Christmas from
and Mariano Ledesma denied the charges of unfair labor practices attributed to government officials, and for printing of checks of private banking institutions.
them and, by way of affirmative defenses, alleged, among other things, that On those greeting cards, the Government seal, of which only the Bureau of
respondents Pacifico Advincula, Roberto Mendoza, Ponciano Arganda and Printing is authorized to use, is embossed, and on the bank checks, only the
Teodulo Toleran were suspended pending result of an administrative Bureau of Printing can print the reproduction of the official documentary
investigation against them for breach of Civil Service rules and regulations; stamps appearing thereon. The volume of private jobs done, in comparison
that the Bureau of Printing has no juridical personality to sue and be sued; that with government jobs, is only one-half of 1 per cent, and in computing the
said Bureau of Printing is not an industrial concern engaged for the purpose of costs for work done for private parties, the Bureau does not include profit,
gain but is an agency of the Republic performing governmental functions. For because it is not allowed to make any. 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.

From what has been stated, it is obvious that the Court of Industrial Relations
did not acquire jurisdiction over the respondent Bureau of Printing, and is thus
SECOND DIVISION
devoid of any authority to take cognizance of the case. This Court has already
held in a long line of decisions that the Industrial Court has no jurisdiction to
hear and determine the complaint for unfair labor practice filed against
G.R. No. L-30044 December 19, 1973
institutions or corporations not organized for profit and, consequently, not an
industrial or business organization. This is so because the Industrial Peace Act
was intended to apply only to industrial employment, and to govern the
LORENZO SAYSON, as Highway Auditor,
relations between employers engaged in industry and occupations for purposes Bureau of Public Highways, Cebu First
of gain, and their industrial employees. (University of the Philippines, Et. Al. v.
CIR, Et Al., G.R No. L-15416, April 28, 1960; University of Sto. Tomas v. Engineering District; CORNELIO FORNIER, as
Villanueva, Et Al., G.R No. L-13282, April 22, 1960; See also the cases cited Regional Supervising Auditor, Eastern
therein.)
Visayas Region; ASTERIO, BUQUERON,
Indeed, as an office of the Government, without any corporate or juridical
personality, the Bureau of Printing cannot be sued. (Sec. 1, Rule 3, Rules of
ADVENTOR FERNANDEZ, MANUEL S.
Court.) Any suit, action or proceeding against it, if it were to produce any LEPATAN, RAMON QUIRANTE, and
effect, would actually be a suit, action or proceeding against the Government
itself, and the rule is settled that the Government cannot be sued without its
TEODULFO REGIS, Petitioners, vs. FELIPE
consent, much less over its objection. (See Metran v. Paredes, 45 Off. Gaz., SINGSON, as sole owner and proprietor of
2835; Angat River Irrigation System, Et. Al. v. Angat River Workers’ Union, Et
Al., G.R. Nos. L-10943-44, December 28, 1957). Singkier Motor Service, Respondent.
The record also discloses that the instant case arose from the filing of
administrative charges against some officers of the respondent Bureau of Office of the Solicitor General Felix V. Makasiar
Printing Employees’ Association by the Acting Secretary of General Services. and Solicitor Bernardo P. Pardo for petitioners.
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 Teodoro Almase and Casiano U. Laput for
officials. Under the law, the Heads of Departments and Bureaus are authorized
to institute and investigate administrative charges against erring subordinates. respondent.
For the Industrial Court now to take cognizance of the case filed before it,
which is in effect a review of the acts of executive officials having to do with
the discipline of government employees under them, would be to interfere with FERNANDO, J.:
the discharge of such functions by said officials.

WHEREFORE, the petition for a writ of prohibition is granted. The orders The real party in interest before this Court in
complained of are set aside and the complaint for unfair labor practice against this certiorari proceeding to review a decision of
the petitioners is dismissed, with costs against respondents other than the
respondent court. the Court of First Instance of Cebu is the Republic
Bengzon, Bautista, Angelo, Labrador, Paredes and Dizon, JJ., concur.
of the Philippines, although the petitioners are the
public officials who were named as
Reyes, J.B.L., J., concurs in the result.
respondents 1 in a mandamus suit below. Such is
the contention of the then Solicitor General, now Secretary sent a letter-order to the Singkier
Associate Justice, Felix V. Makasiar, 2 for as he Motor Service, Mandaue, Cebu requesting it to
did point out, what is involved is a money claim immediately deliver the items listed therein for
against the government, predicated on a the lot price of P43,530.00. ... It would appear
contract. The basic doctrine of non-suability of that a purchase order signed by the District
the government without its consent is thus Engineer, the Requisitioning Officer and the
decisive of the controversy. There is a governing Procurement Officer, was addressed to the
statute that is controlling. 3 Respondent Felipe Singkier Motor Service. ... In due course the
Singson, the claimant, for reasons known to him, Voucher No. 07806 reached the hands of Highway
did not choose to abide by its terms. That was a Auditor Sayson for pre-audit. He then made
fatal misstep. The lower court, however, did not inquiries about the reasonableness of the price.
see it that way. We cannot affirm its decision. chanroblesvi rt ualawlib ra rychan roble s virtual law lib rary ... Thus, after finding from the indorsements of
the Division Engineer and the Commissioner of
As found by the lower court, the facts are the Public Highways that the prices of the various
following: "In January, 1967, the Office of the spare parts are just and reasonable and that the
District Engineer requisitioned various items of requisition was also approved by no less than the
spare parts for the repair of a D-8 bulldozer, ... . Secretary of Public Works and Communications
The requisition (RIV No. 67/0331) was signed by with the verification of V.M. Secarro a
the District Engineer, Adventor Fernandez, and representative of the Bureau of Supply
the Requisitioning Officer (civil engineer), Manuel Coordination, Manila, he approved it for payment
S. Lepatan. ... It was approved by the Secretary in the sum of P34,824.00, with the retention of
of Public Works and Communications, Antonio V. 20% equivalent to P8,706.00. ... His reason for
Raquiza. It is noted in the approval of the said withholding the 20% equivalent to P8,706.00 was
requisition that "This is an exception to the to submit the voucher with the supporting papers
telegram dated Feb. 21, 1967 of the Secretary of to the Supervising Auditor, which he did. ... The
Public Works and Communications." ... So, a voucher ... was paid on June 9, 1967 in the
canvass or public bidding was conducted on May amount of P34,824.00 to the petitioner
5, 1967 ... . The committee on award accepted [respondent Singson]. On June 10,1967, Highway
the bid of the Singkier Motor Service [owned by Auditor Sayson received a telegram from
respondent Felipe Singson] for the sum of Supervising Auditor Fornier quoting a telegraphic
P43,530.00. ... Subsequently, it was approved by message of the General Auditing Office which
the Secretary of Public Works and states: "In view of excessive prices charge for
Communications; and on May 16, 1967 the
purchase of spare parts and equipment shown by of the then Solicitor General Makasiar. Thus: "It
vouchers already submitted this Office direct all is apparent that respondent Singson's cause of
highway auditors refer General Office payment action is a money claim against the government,
similar nature for appropriate action." ... In for the payment of the alleged balance of the cost
the interim it would appear that when the of spare parts supplied by him to the Bureau of
voucher and the supporting papers reached the Public Highways. Assuming momentarily the
GAO, a canvass was made of the spare parts validity of such claim, although as will be shown
among the suppliers in Manila, particularly, the hereunder, the claim is void for the cause or
USI (Phil.), which is the exclusive dealer of the consideration is contrary to law, morals or public
spare parts of the caterpillar tractors in the policy, mandamus is not the remedy to enforce
Philippines. Said firm thus submitted its the collection of such claim against the State but
quotations at P2,529.64 only which is P40,000.00 a ordinary action for specific performance ... .
less than the price of the Singkier. ... In view of Actually, the suit disguised as one for mandamus
the overpricing the GAO took up the matter with to compel the Auditors to approve the vouchers
the Secretary of Public Works in a third for payment, is a suit against the State, which
indorsement of July 18, 1967. ... The Secretary cannot prosper or be entertained by the Court
then circularized a telegram holding the district except with the consent of the State ... . In other
engineer responsible for overpricing." 4 What is words, the respondent should have filed his claim
more, charges for malversation were filed against with the General Auditing Office, under the
the district engineer and the civil engineer provisions of Com. Act 327 ... which prescribe the
involved. It was the failure of the Highways conditions under which money claim against the
Auditor, one of the petitioners before us, that led government may be
to the filing of the mandamus suit below, with filed ...." 5 Commonwealth Act No. 327 is quite
now respondent Singson as sole proprietor of explicit. It is therein provided: "In all cases
Singkier Motor Service, being adjudged as involving the settlement of accounts or claims,
entitled to collect the balance of P8,706.00, the other than those of accountable officers, the
contract in question having been upheld. Hence Auditor General shall act and decide the same
this appeal by certiorari.
chanroblesvi rt ualawlib ra rychan roble s virtual law lib rary within sixty days, exclusive of Sundays and
holidays, after their presentation. If said accounts
1. To state the facts is to make clear the solidity or claims need reference to other persons, office
of the stand taken by the Republic. The lower or offices, or to a party interested, the period
court was unmindful of the fundamental doctrine aforesaid shall be counted from the time the last
of non-suability. So it was stressed in the petition
comment necessary to a proper decision is WHEREFORE, the decision of the Court of First
received by Instance of Cebu of September 4, 1968 is
him." 6 Thereafter, the procedure for appeal is reversed and set aside, and the suit for
indicated: "The party aggrieved by the final mandamus filed against petitioners, respondents
decision of the Auditor General in the settlement below, is dismissed. With costs against
of an account or claim may, within thirty days respondent Felipe Singson.
from receipt of the decision, take an appeal in
writing: (a) To the President of the United States, Zaldivar (Chairman), Barredo, Antonio
pending the final and complete withdrawal of her
sovereignty over the Philippines, or (b) To the
President of the Philippines, or (c) To the
Supreme Court of the Philippines if the appellant
is a private person or entity." 7 chanroble s virtual law lib rary

2. With the facts undisputed and the statute far


from indefinite or ambiguous, the appealed G.R. No. L-26400 February 29, 1972
decision defies explanation. It would be to
VICTORIA AMIGABLE, Plaintiff-
disregard a basic corollary of the cardinal
Appellant, v. NICOLAS CUENCA, as
postulate of non-suability. It is true that once
Commissioner of Public Highways and
consent is secured, an action may be filed. There
REPUBLIC OF THE PHILIPPINES, defendants-
is nothing to prevent the State, however, in such
appellees.
statutory grant, to require that certain
administrative proceedings be had and be MAKALINTAL, J.:
exhausted. Also, the proper forum in the judicial
hierarchy can be specified if thereafter an appeal This is an appeal from the decision of the Court of
would be taken by the party aggrieved. Here, First Instance of Cebu in its Civil Case No. R-
there was no ruling of the Auditor General. Even 5977, dismissing the plaintiff's complaint.
had there been such, the court to which the
chanro blesvi rt ualawlib ra rychan roble s virtual law lib rary

matter should have been elevated is this Victoria Amigable, the appellant herein, is the
Tribunal; the lower court could not legally act on registered owner of Lot No. 639 of the Banilad
the matter. What transpired was anything but Estate in Cebu City as shown by Transfer
that. It is quite obvious then that it does not have Certificate of Title No. T-18060, which superseded
the imprint of validity.
chanro blesvi rtua lawlib rary chan roble s virtual law l ib rary
Transfer Certificate of Title No. RT-3272 (T-3435) Cuenca, in his capacity as Commissioner of Public
issued to her by the Register of Deeds of Cebu on Highways for the recovery of ownership and
February 1, 1924. No annotation in favor of the possession of the 6,167 square meters of land
government of any right or interest in the traversed by the Mango and Gorordo Avenues.
property appears at the back of the certificate. She also sought the payment of compensatory
Without prior expropriation or negotiated sale, damages in the sum of P50,000.00 for the illegal
the government used a portion of said lot, with occupation of her land, moral damages in the
an area of 6,167 square meters, for the sum of P25,000.00, attorney's fees in the sum of
construction of the Mango and Gorordo P5,000.00 and the costs of the suit. chanro blesvi rt ualawlib ra rychan roble s virtual law lib rary

Avenues. chanroble svi rtualaw lib raryc hanrobles vi rt ual law li bra ry

Within the reglementary period the defendants


It appears that said avenues were already filed a joint answer denying the material
existing in 1921 although "they were in bad allegations of the complaint and interposing the
condition and very narrow, unlike the wide and following affirmative defenses, to wit: (1) that the
beautiful avenues that they are now," and "that action was premature, the claim not having been
the tracing of said roads was begun in 1924, and filed first with the Office of the Auditor General;
the formal construction in (2) that the right of action for the recovery of any
1925." * amount which might be due the plaintiff, if any,
had already prescribed; (3) that the action being
On March 27, 1958 Amigable's counsel wrote the a suit against the Government, the claim for
President of the Philippines, requesting payment moral damages, attorney's fees and costs had no
of the portion of her lot which had been valid basis since as to these items the
appropriated by the government. The claim was Government had not given its consent to be
indorsed to the Auditor General, who disallowed it sued; and (4) that inasmuch as it was the
in his 9th Indorsement dated December 9, 1958. province of Cebu that appropriated and used the
A copy of said indorsement was transmitted to area involved in the construction of Mango
Amigable's counsel by the Office of the President Avenue, plaintiff had no cause of action against
on January 7, 1959. chanroblesvi rt ualawlib ra rychan rob les vi rtual law lib rary

the defendants. chanroblesvi rtua lawlib rary chan robles v irt ual law l ibra ry

On February 6, 1959 Amigable filed in the court a During the scheduled hearings nobody appeared
quo a complaint, which was later amended on for the defendants notwithstanding due notice, so
April 17, 1959 upon motion of the defendants, the trial court proceeded to receive the plaintiff's
against the Republic of the Philippines and Nicolas evidence ex parte. On July 29, 1959 said court
rendered its decision holding that it had no government without thereby violating the
jurisdiction over the plaintiff's cause of action for doctrine of governmental immunity from suit
the recovery of possession and ownership of the without its consent. We there said: .
portion of her lot in question on the ground that
the government cannot be sued without its ... . If the constitutional mandate that the owner
consent; that it had neither original nor appellate be compensated for property taken for public use
jurisdiction to hear, try and decide plaintiff's claim were to be respected, as it should, then a suit of
for compensatory damages in the sum of this character should not be summarily dismissed.
P50,000.00, the same being a money claim The doctrine of governmental immunity from suit
against the government; and that the claim for cannot serve as an instrument for perpetrating an
moral damages had long prescribed, nor did it injustice on a citizen. Had the government
have jurisdiction over said claim because the followed the procedure indicated by the governing
government had not given its consent to be sued. law at the time, a complaint would have been
Accordingly, the complaint was dismissed. Unable filed by it, and only upon payment of the
to secure a reconsideration, the plaintiff appealed compensation fixed by the judgment, or after
to the Court of Appeals, which subsequently tender to the party entitled to such payment of
certified the case to Us, there being no question the amount fixed, may it "have the right to enter
of fact involved. chanroble svi rtualawl ib rary chanrobles vi rt ual law li bra ry
in and upon the land so condemned, to
appropriate the same to the public use defined in
The issue here is whether or not the appellant the judgment." If there were an observance of
may properly sue the government under the facts procedural regularity, petitioners would not be in
of the case.chanroble svirtualawl ibra rycha nro bles vi rtua l law lib ra ry the sad plaint they are now. It is unthinkable then
that precisely because there was a failure to
In the case of Ministerio vs. Court of First abide by what the law requires, the government
Instance of Cebu, 1 involving a claim for payment would stand to benefit. It is just as important, if
of the value of a portion of land used for the not more so, that there be fidelity to legal norms
widening of the Gorordo Avenue in Cebu City, this on the part of officialdom if the rule of law were
Court, through Mr. Justice Enrique M. Fernando, to be maintained. It is not too much to say that
held that where the government takes away when the government takes any property for
property from a private landowner for public use public use, which is conditioned upon the
without going through the legal process of payment of just compensation, to be judicially
expropriation or negotiated sale, the aggrieved ascertained, it makes manifest that it submits to
party may properly maintain a suit against the the jurisdiction of a court. There is no thought
then that the doctrine of immunity from suit could court a quo for the determination of
still be appropriately invoked. compensation, including attorney's fees, to which
the appellant is entitled as above indicated. No
Considering that no annotation in favor of the pronouncement as to costs.
government appears at the back of her certificate
of title and that she has not executed any deed of
conveyance of any portion of her lot to the
government, the appellant remains the owner of
the whole lot. As registered owner, she could
bring an action to recover possession of the
portion of land in question at anytime because G.R. No. L-36084 August 31, 1977
possession is one of the attributes of ownership.
However, since restoration of possession of said REPUBLIC OF THE PHILIPPINES, Petitioner,
portion by the government is neither convenient vs. HONORABLE AMANTE P. PURISIMA, the
nor feasible at this time because it is now and has Presiding Judge of the court of first Instance
been used for road purposes, the only relief of Manila (Branch VII), and YELLOW BALL
available is for the government to make due FREIGHT LINES, INC., Respondents.
compensation which it could and should have
done years ago. To determine the due Solicitor General Estelito P. Mendoza, Assistant
compensation for the land, the basis should be Solicitor General Santiago M. Kapunan, Solicitor
the price or value thereof at the time of the Oscar C. Fernandez and Special Attorney Renato
taking. 2 chanrob les vi rtual law lib rary
P. Mabugat for petitioner.chanrobles vi rtua l law lib ra ry

As regards the claim for damages, the plaintiff is Jose Q. Calingo for private respondent.
entitled thereto in the form of legal interest on
the price of the land from the time it was taken FERNANDO, Acting C.J.: chanrobles vi rtual law lib rary

up to the time that payment is made by the


The jurisdictional issued raised by Solicitor
government. 3In addition, the government should
General Estelito P. Mendoza on behalf of the
pay for attorney's fees, the amount of which
Republic of the Philippines in this certiorari and
should be fixed by the trial court after hearing.
prohibition proceeding arose from the failure of
chanroble svirtualawl ibra ryc hanro bles vi rt ual

law libra ry

respondent Judge Amante P. Purisima of the


WHEREFORE, the decision appealed from is
Court of First Instance of Manila to apply the well-
hereby set aside and the case remanded to the
known and of-reiterated doctrine of the non- non-suability recognized in this jurisdiction even
suability of a State, including its offices and prior to the effectivity of the [1935] Constitution
agencies, from suit without its consent. it was so is a logical corollary of the positivist concept of
alleged in a motion to dismiss filed by defendant law which, to para-phrase Holmes, negates the
Rice and Corn Administration in a pending civil assertion of any legal right as against the state,
suit in the sala of respondent Judge for the in itself the source of the law on which such a
collection of a money claim arising from an right may be predicated. Nor is this all. Even if
alleged breach of contract, the plaintiff being such a principle does give rise to problems,
private respondent Yellow Ball Freight Lines, considering the vastly expanded role of
Inc. 1 Such a motion to dismiss was filed on government enabling it to engage in business
September 7, 1972. At that time, the leading pursuits to promote the general welfare, it is not
case of Mobil Philippines Exploration, Inc. v. obeisance to the analytical school of thought
Customs Arrastre Service, 2were Justice Bengzon alone that calls for its continued applicability.
stressed the lack of jurisdiction of a court to pass Why it must continue to be so, even if the matter
on the merits of a claim against any office or be viewed sociologically, was set forth
entity acting as part of the machinery of the in Providence Washington Insurance Co. v.
national government unless consent be shown, Republic thus: "Nonetheless, a continued
had been applied in 53 other decisions. 3 There is adherence to the doctrine of non-suability is not
thus more than sufficient basis for an allegation to be deplored for as against the inconvenience
of jurisdiction infirmity against the order of that may be caused private parties, the loss of
respondent Judge denying the motion to dismiss governmental efficiency and the obstacle to the
dated October 4, 1972. 4 What is more, the performance of its multifarious functions are far
position of the Republic has been fortified with greater if such a fundamental principle were
the explicit affirmation found in this provision of abandoned and the availability of judicial remedy
the present Constitution: "The State may not be were not thus restricted. With the well-known
sued without its consent." 5 chanrobles v irt ual law li bra ry propensity on the part of our people to go the
court, at the least provocation, the loss of time
The merit of the petition for certiorari and and energy required to defend against law suits,
prohibition is thus obvious.chanroble svirtualawl ibra ryc hanro bles vi rt ual law li bra ry

in the absence of such a basic principle that


constitutes such an effective obstacle, could very
1. There is pertinence to this excerpt well be imagined." 7 It only remains to be added
from Switzerland General Insurance Co., Ltd. v. that under the present Constitution which, as
Republic of the Philippines: 6 "The doctrine of
noted, expressly reaffirmed such a doctrine, the 3. Apparently respondent Judge was misled by
following decisions had been rendered: Del mar the terms of the contract between the private
v. The Philippine veterans respondent, plaintiff in his sala, and defendant
Administration; 8Republic v. Villasor; 9 Sayson v. Rice and Corn Administration which, according to
Singson; 10 and Director of the Bureau of Printing him, anticipated the case of a breach of contract
v. Francisco. 11chanrob les vi rtual law lib rary within the parties and the suits that may
thereafter arise. 13 The consent, to be effective
2. Equally so, the next paragraph in the above though, must come from the State acting through
opinion from the Switzerland General Insurance a duly enacted statute as pointed out by Justice
Company decision is likewise relevant: "Nor is Bengzon in Mobil. Thus, whatever counsel for
injustice thereby cause private parties. They defendant Rice and Corn Administration agreed to
could still proceed to seek collection of their had no binding force on the government. That
money claims by pursuing the statutory remedy was clearly beyond the scope of his authority. At
of having the Auditor General pass upon them any rate, Justice Sanchez, in Ramos v. Court of
subject to appeal to judicial tribunals for final Industrial Relations, 14 was quite categorical as to
adjudication. We could thus correctly conclude as its "not [being] possessed of a separate and
we did in the cited Provindence Washington distinct corporate existence. On the contrary, by
Insurance decision: "Thus the doctrine of non- the law of its creation, it is an office directly
suability of the government without its consent, 'under the Office of the President of the
as it has operated in practice, hardly lends itself Philippines." 15
chanroble s virtual law l ibra ry

to the charge that it could be the fruitful parent of


injustice, considering the vast and ever-widening WHEREFORE, the petitioner for certiorari is
scope of state activities at present being granted and the resolution of October 4, 1972
undertaken. Whatever difficulties for private denying the motion to dismiss filed by the Rice
claimants may still exist, is, from an objective and Corn Administration nullified and set aside
appraisal of all factors, minimal. In the balancing and the petitioner for prohibition is likewise
of interests, so unavoidable in the determination granted restraining respondent Judge from acting
of what principles must prevail if government is on civil Case No. 79082 pending in his sala except
to satisfy the public weal, the verdict must be, as for the purpose of ordering its dismissal for lack
it has been these so many years, for its of jurisdiction. The temporary restraining order
continuing recognition as a fundamental postulate issued on February 8, 1973 by this Court is made
of constitutional law." 12 chanroble s virtual law lib rary permanent terminating this case. Costs against
Yellow Ball Freight Lines, Inc.
Civil Case No. 0034 entitled Republic of the
Philippines, plaintiff, v. Roberto S. Benedicto, et
al., defendants, is a complaint for reconveyance,
reversion, accounting, reconstitution and
damages. The case is one of several suits
[G.R. NO. 129406 : March 6, 2006]
involving ill-gotten or unexplained wealth that
REPUBLIC OF THE PHILIPPINES represented petitioner Republic, through the PCGG, filed with
by the PRESIDENTIAL COMMISSION ON the Sandiganbayan against private respondent
GOOD GOVERNMENT Roberto S. Benedicto and others pursuant to
(PCGG), Petitioner, v. SANDIGANBAYAN Executive Order (EO) No. 14,3 series of 1986.
(SECOND DIVISION) and ROBERTO S.
Pursuant to its mandate under EO No. 1,4 series
BENEDICTO, Respondents.
of 1986, the PCGG issued writs placing under
DECISION sequestration all business enterprises, entities
and other properties, real and personal, owned or
GARCIA, J.: registered in the name of private respondent
Benedicto, or of corporations in which he
Before the Court is this petition appeared to have controlling or majority interest.
for certiorari under Rule 65 of the Rules of Court Among the properties thus sequestered and taken
to nullify and set aside the March 28, 19951 and over by PCGG fiscal agents were the 227 shares
March 13, 19972Resolutions of the in NOGCCI owned by private respondent
Sandiganbayan, Second Division, in Civil Case No. Benedicto and registered in his name or under
0034, insofar as said resolutions ordered the the names of corporations he owned or
Presidential Commission on Good Government controlled.
(PCGG) to pay private respondent Roberto S.
Benedicto or his corporations the value of 227 Following the sequestration process, PCGG
shares of stock of the Negros Occidental Golf and representatives sat as members of the Board of
Country Club, Inc. (NOGCCI) at P150,000.00 per Directors of NOGCCI, which passed, sometime in
share, registered in the name of said private October 1986, a resolution effecting a corporate
respondent or his corporations. policy change. The change consisted of assessing
a monthly membership due of P150.00 for each
The facts: NOGCCI share. Prior to this resolution, an
investor purchasing more than one NOGCCI share
was exempt from paying monthly membership properties, petitioner Republic acknowledging that
due for the second and subsequent shares that it was within private respondent Benedicto's
he/she owned. capacity to acquire the same shares out of his
income from business and the exercise of his
Subsequently, on March 29, 1987, the NOGCCI profession.6 Implied in this undertaking is the
Board passed another resolution, this time recognition by petitioner Republic that the subject
increasing the monthly membership due shares of stock could not have been ill-gotten.
from P150.00 to P250.00 for each share.
In a decision dated October 2, 1992, the
As sequestrator of the 227 shares of stock in Sandiganbayan approved the Compromise
question, PCGG did not pay the corresponding Agreement and accordingly rendered judgment in
monthly membership due thereon accordance with its terms.
totaling P2,959,471.00. On account thereof, the
227 sequestered shares were declared delinquent In the process of implementing the Compromise
to be disposed of in an auction sale. Agreement, either of the parties would, from time
to time, move for a ruling by the Sandiganbayan
Apprised of the above development and evidently on the proper manner of implementing or
to prevent the projected auction sale of the same interpreting a specific provision therein.
shares, PCGG filed a complaint for injunction with
the Regional Trial Court (RTC) of Bacolod City, On February 22, 1994, Benedicto filed in Civil
thereat docketed as Civil Case No. 5348. The Case No. 0034 a "Motion for Release from
complaint, however, was dismissed, paving the Sequestration and Return of Sequestered
way for the auction sale for the delinquent 227 Shares/Dividends" praying, inter alia, that his
shares of stock. On August 5, 1989, an auction NOGCCI shares of stock be specifically released
sale was conducted. from sequestration and returned, delivered or
paid to him as part of the parties' Compromise
On November 3, 1990, petitioner Republic and Agreement in that case. In a
private respondent Benedicto entered into a Resolution7promulgated on December 6, 1994,
Compromise Agreement in Civil Case No. 0034. the Sandiganbayan granted Benedicto's
The agreement contained a general release aforementioned motion but placed the subject
clause5 whereunder petitioner Republic agreed shares under the custody of its Clerk of Court,
and bound itself to lift the sequestration on the thus:
227 NOGCCI shares, among other Benedicto's
WHEREFORE, in the light of the foregoing, the WHEREFORE, finding merit in the instant motion
said "Motion for Release From Sequestration and for early resolution and considering that, indeed,
Return of Sequestered Shares/Dividends" is the PCGG has not shown any justifiable ground as
hereby GRANTED and it is directed that said to why it has not complied with its obligation as
shares/dividends be delivered/placed under the set forth in the Order of December 6, 1994 up to
custody of the Clerk of Court, Sandiganbayan, this date and which Order was issued pursuant to
Manila subject to this Court's disposition. the Compromise Agreement and has already
become final and executory, accordingly, the
On March 28, 1995, the Sandiganbayan came out Presidential Commission on Good Government is
with the herein first assailed Resolution,8 which hereby given a final extension of fifteen (15) days
clarified its aforementioned December 6, 1994 from receipt hereof within which to comply with
Resolution and directed the immediate the Order of December 6, 1994 as stated
implementation thereof by requiring PCGG, hereinabove.
among other things:
On April 1, 1996, PCGG filed a Manifestation with
(b) To deliver to the Clerk of Court the 227 Motion for Reconsideration,10 praying for the
sequestered shares of [NOGCCI] registered in the setting aside of the Resolution of February 23,
name of nominees of ROBERTO S. BENEDICTO 1996. On April 11, 1996, private respondent
free from all liens and encumbrances, or in Benedicto filed a Motion to Enforce Judgment
default thereof, to pay their value at P150,000.00 Levy. Resolving these two motions, the
per share which can be deducted from [the Sandiganbayan, in its second assailed
Republic's] cash share in the Compromise Resolution11 dated March 13, 1997, denied that
Agreement. [Words in bracket added] (Emphasis portion of the PCGG's Manifestation with Motion
Supplied). for Reconsideration concerning the subject 227
NOGCCI shares and granted Benedicto's Motion
Owing to PCGG's failure to comply with the above to Enforce Judgment Levy.
directive, Benedicto filed in Civil Case No. 0034 a
Motion for Compliance dated July 25, 1995, Hence, the Republic's present recourse on the
followed by an Ex-Parte Motion for Early sole issue of whether or not the public respondent
Resolution dated February 12, 1996. Acting Sandiganbayan, Second Division, gravely abused
thereon, the Sandiganbayan promulgated yet its discretion in holding that the PCGG is at fault
another Resolution9 on February 23, 1996, for not paying the membership dues on the 227
dispositively reading: sequestered NOGCCI shares of stock, a failing
which eventually led to the foreclosure sale of delinquency to set in before acting by
thereof. embarking on a tedious process of going to court
after the auction sale had been announced and
The petition lacks merit. scheduled.

To begin with, PCGG itself does not dispute its The PCGG's posture that to the owner of the
being considered as a receiver insofar as the sequestered shares rests the burden of paying
sequestered 227 NOGCCI shares of stock are the membership dues is untenable. For one, it
concerned.12 PCGG also acknowledges that as lost sight of the reality that such dues are
such receiver, one of its functions is to pay basically obligations attached to the shares,
outstanding debts pertaining to the sequestered which, in the final analysis, shall be made liable,
entity or property,13 in this case the 227 NOGCCI thru delinquency sale in case of default in
shares in question. It contends, however, that payment of the dues. For another, the PCGG as
membership dues owing to a golf club cannot be sequestrator-receiver of such shares is, as
considered as an outstanding debt for which stressed earlier, duty bound to preserve the value
PCGG, as receiver, must pay. It also claims to of such shares. Needless to state, adopting timely
have exercised due diligence to prevent the loss measures to obviate the loss of those shares
through delinquency sale of the subject NOGCCI forms part of such duty and due diligence.
shares, specifically inviting attention to the
injunctive suit, i.e., Civil Case No. 5348, it filed The Sandiganbayan, to be sure, cannot plausibly
before the RTC of Bacolod City to enjoin the be faulted for finding the PCGG liable for the loss
foreclosure sale of the shares. of the 227 NOGCCI shares. There can be no
quibbling, as indeed the graft court so declared in
The filing of the injunction complaint adverted to, its assailed and related resolutions respecting the
without more, cannot plausibly tilt the balance in NOGCCI shares of stock, that PCGG's fiscal
favor of PCGG. To the mind of the Court, such agents, while sitting in the NOGCCI Board of
filing is a case of acting too little and too late. It Directors agreed to the amendment of the rule
cannot be over-emphasized that it behooved the pertaining to membership dues. Hence, it is not
PCGG's fiscal agents to preserve, like a amiss to state, as did the Sandiganbayan, that
responsible father of the family, the value of the the PCGG-designated fiscal agents, no less, had a
shares of stock under their administration. But far direct hand in the loss of the sequestered shares
from acting as such father, what the fiscal agents through delinquency and their eventual sale
did under the premises was to allow the element through public auction. While perhaps anti-
climactic to so mention it at this stage, the jurisdiction.16The abuse must be so patent and
unfortunate loss of the shares ought not to have gross as to amount to an evasion of a positive
come to pass had those fiscal agents prudently duty or a virtual refusal to perform a duty
not agreed to the passage of the NOGCCI board enjoined by law, or to act at all in contemplation
resolutions charging membership dues on shares of law as where the power is exercised in an
without playing representatives. arbitrary and despotic manner by reason of
passion or hostility.17 Sadly, this is completely
Given the circumstances leading to the auction absent in the present case. For, at bottom, the
sale of the subject NOGCCI shares, PCGG's assailed resolutions of the Sandiganbayan did no
lament about public respondent Sandiganbayan more than to direct PCGG to comply with its part
having erred or, worse still, having gravely of the bargain under the compromise agreement
abused its discretion in its determination as to it freely entered into with private respondent
who is at fault for the loss of the shares in Benedicto. Simply put, the assailed resolutions of
question can hardly be given cogency. the Sandiganbayan have firm basis in fact and in
law.
For sure, even if the Sandiganbayan were wrong
in its findings, which does not seem to be in this Lest it be overlooked, the issue of liability for the
case, it is a well-settled rule of jurisprudence shares in question had, as both public and private
that certiorari will issue only to correct errors of respondents asserted, long become final and
jurisdiction, not errors of judgment. Corollarily, executory. Petitioner's narration of facts in its
errors of procedure or mistakes in the court's present petition is even misleading as it
findings and conclusions are beyond the conveniently fails to make reference to two (2)
corrective hand of certiorari .14The extraordinary resolutions issued by the Sandiganbayan. We
writ of certiorari may be availed only upon a refer to that court's resolutions of December 6,
showing, in the minimum, that the respondent 199418 and February 23, 199619 as well as
tribunal or officer exercising judicial or quasi- several intervening pleadings which served as
judicial functions has acted without or in excess basis for the decisions reached therein. As it
of its or his jurisdiction, or with grave abuse of were, the present petition questions only and
discretion.15 focuses on the March 28, 199520 and March 13,
199721 resolutions, which merely reiterated and
The term "grave abuse of discretion" connotes clarified the graft court's underlying resolution of
capricious and whimsical exercise of judgment as December 6, 1994. And to place matters in the
is equivalent to excess, or a lack of proper perspective, PCGG's failure to comply with
the December 6, 1994 resolution prompted the petitioner Republic thereby stripped itself of its
issuance of the clarificatory and/or reiteratory immunity from suit and placed itself in the same
resolutions aforementioned. level of its adversary. When the State enters into
contract, through its officers or agents, in
In a last-ditch attempt to escape liability, furtherance of a legitimate aim and purpose and
petitioner Republic, through the PCGG, invokes pursuant to constitutional legislative authority,
state immunity from suit.22 As argued, the order whereby mutual or reciprocal benefits accrue and
for it to pay the value of the delinquent shares rights and obligations arise therefrom, the State
would fix monetary liability on a government may be sued even without its express consent,
agency, thus necessitating the appropriation of precisely because by entering into a contract the
public funds to satisfy the judgment claim.23 But, sovereign descends to the level of the citizen. Its
as private respondent Benedicto correctly consent to be sued is implied from the very act of
countered, the PCGG fails to take stock of one of entering into such contract,26breach of which on
the exceptions to the state immunity principle, its part gives the corresponding right to the other
i.e., when the government itself is the suitor, as party to the agreement.
in Civil Case No. 0034. Where, as here, the State
itself is no less the plaintiff in the main case, Finally, it is apropos to stress that the
immunity from suit cannot be effectively Compromise Agreement in Civil Case No. 0034
invoked.24 For, as jurisprudence teaches, when envisaged the immediate recovery of alleged ill-
the State, through its duly authorized officers, gotten wealth without further litigation by the
takes the initiative in a suit against a private government, and buying peace on the part of the
party, it thereby descends to the level of a private aging Benedicto.27 Sadly, that stated objective
individual and thus opens itself to whatever has come to naught as not only had the litigation
counterclaims or defenses the latter may have continued to ensue, but, worse, private
against it.25Petitioner Republic's act of filing its respondent Benedicto passed away on May 15,
complaint in Civil Case No. 0034 constitutes a 2000,28 with the trial of Civil Case No. 0034 still
waiver of its immunity from suit. Being itself the in swing, so much so that the late Benedicto had
plaintiff in that case, petitioner Republic cannot to be substituted by the administratrix of his
set up its immunity against private respondent estate.29
Benedicto's prayers in the same case.
WHEREFORE, the instant petition is hereby
In fact, by entering into a Compromise DISMISSED.
Agreement with private respondent Benedicto,
SO ORDERED. Counsel for the respondents are warned that a repetition of
their contemptuous act to delay the execution of a final and
executory judgment will be dealt with more severely.

SO ORDERED. [2]

It is important to state at the outset that the dispute


between petitioner and private respondent has been
[G.R. No. 107271. September 10, 2003] litigated thrice before this Court: first, in G.R. No. L-39288-
89, entitled Heirs of Abelardo Palomique, et al. vs. Marcial
Samson, et al., decided on January 31, 1985; second, in
G.R. No. 98366, entitled City Government of Caloocan vs.
CITY OF CALOOCAN and NORMA M. Court of Appeals, et al., resolved on May 16, 1991, and
ABRACIA, petitioners, vs. HON. MAURO T. third, in G.R. No. 102625, entitled Santiago vs. Sto.
ALLARDE, Presiding Judge of Branch 123, Tomas, et al., decided on August 1, 1995. This is not to
RTC of Caloocan City, ALBERTO A. mention the numerous concurrent efforts by the City
CASTILLO, Deputy Sheriff of Branch 123, RTC Government of Caloocan to seek relief from other judicial
of Caloocan City, and DELFINA HERNANDEZ and quasi-judicial bodies. The present petition for
SANTIAGO and PHILIPPINE NATIONAL BANK certiorari is the fourth time we are called upon to resolve
(PNB), respondents. the dispute.

DECISION The factual and procedural antecedents follow.


CORONA, J.: Sometime in 1972, Marcial Samson, City Mayor of
Caloocan City, through Ordinance No. 1749, abolished
Assailed in this petition for certiorari is the the position of Assistant City Administrator and 17 other
decision dated August 31, 1992, of the Court of Appeals
[1] positions from the plantilla of the local government of
in CA G.R. SP No. 27423, ordering the Regional Trial Caloocan. Then Assistant City Administrator Delfina
Court of Caloocan City, Branch 123, to implement an alias Hernandez Santiago and the 17 affected employees of the
writ of execution dated January 16, 1992. The dispositive City Government assailed the legality of the abolition
portion read as follows: before the then Court of First Instance (CFI) of Caloocan
City, Branch 33.
WHEREFORE the petition is hereby granted ordering the
In 1973, the CFI declared the abolition illegal and
Regional Trial Court of Kaloocan City, Branch 123, to
ordered the reinstatement of all the dismissed employees
immediately effect the alias writ of execution dated January
and the payment of their back salaries and other
16, 1992 without further delay.
emoluments. The City Government of Caloocan appealed execution. One of the issues raised and resolved therein
[5]

to the Court of Appeals. Respondent Santiago and her co- was the extent to which back salaries and emoluments
parties moved for the dismissal of the appeal for being were due to respondent Santiago. The appellate court
dilatory and frivolous but the appellate court denied their held that she was entitled to her salaries from October,
motion. Thus, they elevated the case on certiorari before 1983 to December, 1986.
this Court, docketed as G.R. No. L-39288-89, Heirs of
And for the second time, the City Government of
Abelardo Palomique, et al. vs. Marcial Samson, et al. In
Caloocan appealed to this Court in G.R. No. 98366, City
our Resolution dated January 31, 1985, we held that the
Government of Caloocan vs. Court of Appeals, et al. The
appellate court erred in not dismissing the appeal, and that
petition was dismissed, through our Resolution of May 16,
the appeal of the City Government of Caloocan was
1991, for having been filed late and for failure to show any
frivolous and dilatory. In due time, the resolution lapsed
reversible error on the part of the Court of Appeals. The
into finality and entry of judgment was made on February
resolution subsequently attained finality and the
27, 1985.
corresponding entry of judgment was made on July 29,
In 1986, the City Government of Caloocan paid 1991.
respondent Santiago P75,083.37 in partial payment of her
On motion of private respondent Santiago, Judge
backwages, thereby leaving a balance of P530,761.91.
Mauro T. Allarde ordered the issuance of an alias writ of
Her co-parties were paid in full. In 1987, the City of
[3]

execution on March 3, 1992. The City Government of


Caloocan appropriated funds for her unpaid back salaries.
Caloocan moved to reconsider the order, insisting in the
This was included in Supplemental Budget No. 3 for the
main that respondent Santiago was not entitled to
fiscal year 1987. Surprisingly, however, the City later
backwages from 1983 to 1986. The court a quo denied the
refused to release the money to respondent Santiago.
motion and forthwith issued the alias writ of execution.
Respondent Santiago exerted effort for the execution Unfazed, the City Government of Caloocan filed a motion
of the remainder of the money judgment but she met stiff to quash the writ, maintaining that the money judgment
opposition from the City Government of Caloocan. On sought to be enforced should not have included salaries
February 12, 1991, Judge Mauro T. Allarde, RTC of and allowances for the years 1983-1986. The trial court
Caloocan City, Branch 123, issued a writ of execution for likewise denied the motion.
the payment of the remainder of respondent Santiagos
On July 27, 1992, Sheriff Alberto A. Castillo levied and
back salaries and other emoluments. [4]

sold at public auction one of the motor vehicles of the City


For the second time, the City Government of Caloocan Government of Caloocan, with plate no. SBH-165,
went up to the Court of Appeals and filed a petition for for P100,000. The proceeds of the sale were turned over
certiorari, prohibition and injunction to stop the trial court to respondent Santiago in partial satisfaction of her claim,
from enforcing the writ of execution. The CA dismissed the thereby leaving a balance of P439,377.14, inclusive of
petition and affirmed the order of issuance of the writ of interest. Petitioners filed a motion questioning the validity
of the auction sale of the vehicle with plate no. SBH-165, our Resolution dated August 1, 1995, this time ruling in
and a supplemental motion maintaining that the properties favor of respondent Santiago:
of the municipality were exempt from execution. In his
Order dated October 1, 1992, Judge Allarde denied both The issue of petitioner Santiagos right to back salaries for the
motions and directed the sheriff to levy and schedule at period from October 1983 to December 1986 having been
public auction three more vehicles of the City of Caloocan resolved in G.R. No. 98366 on 16 May 1991, CSC Resolution
-[6] No. 91-1124 promulgated later on 24 September 1991 in
particular, its ruling on the extent of backwages due petitioner
ONE (1) Unit Motor Vehicle (Hunter Station Wagon); Motor Santiago was in fact moot and academic at the time of its
No. C-240-199629; Chassis No. MBB-910369C; promulgation. CSC Resolution No. 91-1124 could not, of
course, set aside what had been judicially decided with
ONE (1) Unit Motor Vehicle (Hunter Series 11-Diesel); finality x x x x the court considers that resort by the City
Engine No. 4FB1-174328, Chassis No. MBB-910345C; Plate Government of Caloocan to respondent CSC was but another
No. SDL-653; attempt to deprive petitioner Santiago of her claim to back
salaries x x x and a continuation of the Citys abuse and misuse
ONE (1) Unit Motor Vehicle (Hunter Series 11-Diesel); of the rules of judicial procedure. The Citys acts have resulted
Engine No. 4FB-165196; Chassis No. MBB 910349C. in wasting the precious time and resources of the courts and
respondent CSC. (Underscoring supplied).
All the vehicles, including that previously sold in the
auction sale, were owned by the City and assigned for the On October 5, 1992, the City Council of Caloocan
use of herein petitioner Norma Abracia, Division passed Ordinance No. 0134, Series of 1992, which
Superintendent of Caloocan City, and other officials of the included the amount of P439,377.14 claimed by
Division of City Schools. respondent Santiago as back salaries, plus
Meanwhile, the City Government of Caloocan sought interest. Pursuant to the subject ordinance, Judge
[7]

clarification from the Civil Service Commission (CSC) on Allarde issued an order dated November 10, 1992,
whether respondent Santiago was considered to have decreeing that:
rendered services from 1983-1986 as to be entitled to
backwages for that period. In its Resolution No. 91-1124, WHEREFORE, the City Treasurer (of Caloocan), Norberto
the CSC ruled in the negative. Azarcon is hereby ordered to deliver to this Court within five
(5) days from receipt hereof, (a) managers check covering the
On November 22, 1991, private respondent Santiago amount of P439,378.00 representing the back salaries of
challenged the CSC resolution before this Court in G.R. petitioner Delfina H. Santiago in accordance with Ordinance
No. 102625, Santiago vs. Sto. Tomas, et al. On July 8, No. 0134 S. 1992 and pursuant to the final and executory
1993, we initially dismissed the petition for lack of merit; decision in these cases.
however, we reconsidered the dismissal of the petition in
Then Caloocan Mayor Macario A. Asistio, Jr., another motion with this Court, a Motion to Declare in
however, refused to sign the check intended as payment Contempt of Court; to Set Aside the Garnishment and
for respondent Santiagos claims. This, despite the fact Administrative Complaint against Judge Allarde,
that he was one of the signatories of the ordinance respondent Santiago and PNB. Subsequently, the City
authorizing such payment. On April 29, 1993, Judge Government of Caloocan filed a Supplemental Petition
Allarde issued another order directing the Acting City formally impleading PNB as a party-respondent in this
Mayor of Caloocan, Reynaldo O. Malonzo, to sign the case.
check which had been pending before the Office of the
The instant petition for certiorari is directed this time
Mayor since December 11, 1992. Acting City Mayor
against the validity of the garnishment of the funds of the
Malonzo informed the trial court that he could not comply
City of Caloocan, as well as the validity of the levy and
with the order since the subject check was not formally
sale of the motor vehicles belonging to the City of
turned over to him by the City Mayor who went on official
Caloocan. More specifically, petitioners insist that Judge
leave of absence on April 15, 1993, and that he doubted
Allarde gravely abused his discretion in:
whether he had authority to sign the same. [8]

Thus, in an order dated May 7, 1993, Judge Allarde (a) ordering the garnishment of the funds of the City of
ordered Sheriff Alberto A. Castillo to immediately garnish Caloocan deposited with the PNB, since it is settled that public
the funds of the City Government of Caloocan funds are beyond the reach of garnishment and even with the
corresponding to the claim of respondent Santiago. On [9] appropriation passed by the City Council, the authority of the
the same day, Sheriff Alberto A. Castillo served a copy of Mayor is still needed for the release of the appropriation;
the Notice of Garnishment on the Philippine National Bank
(PNB), Sangandaan Branch, Caloocan City. When PNB (b) ordering the levy and sale at public auction of three (3)
immediately notified the City of Caloocan of the Notice of motor vehicles owned by the City of Caloocan, which vehicles
Garnishment, the City Treasurer sent a letter-advice are necessary for public use and cannot be attached nor sold in
informing PNB that the order of garnishment was illegal, an execution sale to satisfy a money judgment against the City
with a warning that it would hold PNB liable for any of Caloocan;
damages which may be caused by the withholding of the
funds of the city. PNB opted to comply with the order of (c) peremptorily denying petitioner City of Caloocans urgent
Judge Allarde and released to the Sheriff a managers motions to vacate and set aside the auction sale of the motor
check amounting to P439,378. After 21 long years, the vehicle with PLATE NO. SBH-165, notwithstanding that the
claim of private respondent Santiago was finally settled in auction sale by the Sheriff was tainted with serious
full. irregularities, more particularly:

On June 4, 1993, however, while the instant petition i. non-compliance with the mandatory posting of the notice of
was pending, the City Government of Caloocan filed yet sale;
ii. non-observance of the procedure that a sale through public garnishment or levy, in the absence of a corresponding
auction has to be made and consummated at the time of the appropriation as required by law: [11]

auction, at the designated place and upon actual payment of the


purchase price by the winning bidder; Even though the rule as to immunity of a state from suit is
relaxed, the power of the courts ends when the judgment is
iii. violation of Sec. 21, Rule 39 of the Rules of Court to the rendered. Although the liability of the state has been judicially
effect that sale of personal property capable of manual delivery ascertained, the state is at liberty to determine for itself
must be sold within the view of those attending the sale; and, whether to pay the judgment or not, and execution cannot issue
on a judgment against the state. Such statutes do not authorize
iv. the Sheriffs Certificate of Sale contained false narration of a seizure of state property to satisfy judgments recovered, and
facts respecting the actual time of the public auction; only convey an implication that the legislature will recognize
such judgment as final and make provision for the satisfaction
(d) the enforcement of the levy made by the Sheriff covering thereof.
[12]

the three (3) motor vehicles based on an alias writ that has long
expired. The rule is based on obvious considerations of public
policy. The functions and public services rendered by the
The petition has absolutely no merit. The trial court State cannot be allowed to be paralyzed or disrupted by
committed no grave abuse of discretion in implementing the diversion of public funds from their legitimate and
the alias writ of execution to settle the claim of respondent specific objects, as appropriated by law. [13]

Santiago, the satisfaction of which petitioner had been


maliciously evading for 21 years. However, the rule is not absolute and admits of a well-
defined exception, that is, when there is a corresponding
Petitioner argues that the garnishment of its funds in appropriation as required by law. Otherwise stated, the
PNB was invalid inasmuch as these were public funds and rule on the immunity of public funds from seizure or
thus exempt from execution. Garnishment is considered a garnishment does not apply where the funds sought to be
specie of attachment by means of which the plaintiff seeks levied under execution are already allocated by law
to subject to his claim property of the defendant in the specifically for the satisfaction of the money judgment
hands of a third person, or money owed by such third against the government. In such a case, the monetary
person or garnishee to the defendant. [10]
judgment may be legally enforced by judicial processes.
The rule is and has always been that all government Thus, in the similar case of Pasay City Government, et
funds deposited in the PNB or any other official depositary al. vs. CFI of Manila, Br. X, et al., where petitioners
[14]

of the Philippine Government by any of its agencies or challenged the trial courts order garnishing its funds in
instrumentalities, whether by general or special deposit, payment of the contract price for the construction of the
remain government funds and may not be subject to City Hall, we ruled that, while government funds deposited
in the PNB are exempt from execution or garnishment, this
rule does not apply if an ordinance has already been CERTIFICATION
enacted for the payment of the Citys obligations
This is to certify that according to the records available in this
Upon the issuance of the writ of execution, the petitioner- Office the claim for backwages of the HON. JUDGE
appellants moved for its quashal alleging among other things DELFINA H. SANTIAGO has been properly obligated and
the exemption of the government from execution. This move can be collected in accordance with existing accounting and
on the part of petitioner-appellants is at first glance laudable auditing rules and regulations.
for all government funds deposited with the Philippine
National Bank by any agency or instrumentality of the This is to certify further that in case the claim is not collected
government, whether by way of general or special deposit, within the present fiscal year, such claim shall be entered in
remain government funds and may not be subject to the books of Accounts Payable and can still be collected in the
garnishment or levy. But inasmuch as an ordinance has already next fiscal year x x x x (Underscoring supplied)
been enacted expressly appropriating the amount
of P613,096.00 as payment to the respondent-appellee, then Petitioners reliance on Municipality of Makati vs. Court
the herein case is covered by the exception to the general of Appeals, et al., and Commissioner of Public Highways
[15]

rule x x x x vs. San Diego, does not help their cause. Both cases
[16] [17]

implicitly affirmed that public funds may be garnished if


In the instant case, the City Council of Caloocan there is a statute which appropriated the amount so
already approved and passed Ordinance No. 0134, Series garnished. Thus, in Municipality of Makati, citing San
of 1992, allocating the amount of P439,377.14 for Diego, we unequivocally held that:
respondent Santiagos back salaries plus interest. Thus
this case fell squarely within the exception. For all intents In this jurisdiction, well-settled is the rule that public funds are
and purposes, Ordinance No. 0134, Series of 1992, was not subject to levy and execution, unless otherwise provided by
the corresponding appropriation as required by law. The statute x x x x
sum indicated in the ordinance for Santiago were deemed
automatically segregated from the other budgetary Similarly, we cannot agree with petitioners argument
allocations of the City of Caloocan and earmarked solely that the appropriation ordinance of the City Council did not
for the Citys monetary obligation to her. The judgment of authorize PNB to release the funds because only the City
the trial court could then be validly enforced against such Mayor could authorize the release thereof. A valid
funds. appropriation of public funds lifts its exemption from
execution. Here, the appropriation passed by the City
Indeed, this conclusion is further buttressed by the Council of Caloocan providing for the payment of
Certification issued on December 23, 1992 by Norberto C. backwages to respondent was duly approved and
Azarcon, City Treasurer of Caloocan: signed by both the council and then Mayor Macario
Asistio, Jr. The mayors signature approving the budget
ordinance was his assent to the appropriation of funds for the functions of his office. This presumption prevails in the
respondent Santiagos backwages. If he did not agree with absence of substantial evidence to the contrary and
such allocation, he could have vetoed the item pursuant cannot be overcome by bare and self-serving allegations.
to Section 55 of the Local Government Code. There was
[18]
The petitioners failed to convince us that the auction sale
no such veto. conducted by the sheriff indeed suffered from fatal flaws.
No evidence was adduced to prove that the sheriff had
In view of the foregoing discourse, we dismiss
been remiss in the performance of his duties during the
petitioners unfounded assertion, probably made more out
public auction sale. Indeed it would be injudicious for us to
of sheer ignorance of prevailing jurisprudence than a
assume, as petitioners want us to do, that the sheriff failed
deliberate attempt to mislead us, that the rule that public
to follow the established procedures governing public
funds (are) beyond the reach of levy and garnishment is
auctions.
not qualified by any condition. [19]

On the contrary, a review of the records shows that the


We now come to the issue of the legality of the levy on
sheriff complied with the rules on public auction. The sale
the three motor vehicles belonging to the City of Caloocan
of the Citys vehicle was made publicly in front of the
which petitioners claimed to be exempt from execution,
Caloocan City Hall on the date fixed in the notice July 27,
and which levy was based on an alias writ that had
1992. In fact, petitioners in their Motion to Declare in
purportedly expired. Suffice it to say that Judge Allarde, in
Contempt of Court; to Set Aside the Garnishment and
his Order dated November 10, 1992, already lifted the
[20]

Administrative Complaint admitted as much:


levy on the three vehicles, thereby formally discharging
them from the jurisdiction of the court and turning them On July 27, 1992, by virtue of an alias writ of execution issued
over to the City Government of Caloocan: by the respondent court, a vehicle owned by the petitioner xxx
was levied and sold at public auction for the amount
x x x x the levy of the three (3) vehicles made by Sheriff
of P100,000.00 and which amount was immediately delivered
Alberto Castillo pursuant to the Orders of this Court dated
to the private respondent x x x x
[21]

October 1 and 8, 1992 is hereby lifted and the said Sheriff is


hereby ordered to return the same to the City Government in
Hence, petitioners cannot now be heard to impugn the
view of the satisfaction of the decision in these cases x x x x
validity of the auction sale.
It is thus unnecessary for us to discuss a moot issue. Petitioners, in desperation, likewise make much of the
proceedings before the trial court on October 8, 1992,
We turn to the third issue raised by petitioners that the
wherein petitioner Norma Abracia, Superintendent of the
auction sale by Sheriff Alberto A. Castillo of the motor
Division of City Schools of Caloocan, was commanded to
vehicle with plate no. SBH-165 was tainted with serious
appear and show cause why she should not be cited in
irregularities. We need not emphasize that the sheriff
contempt for delaying the execution of judgment. This was
enjoys the presumption of regularity in the performance of
in connection with her failure (or refusal) to surrender the
three motor vehicles assigned to the Division of City the condition that respondent Santiago should withdraw
Schools to the custody of the sheriff. Petitioner Abracia, her motion for contempt in exchange for her promise to
assisted by Mr. Ricardo Nagpacan of the Division of City surrender the subject vehicles. Thus, petitioner Abracias
Schools, appeared during the hearing but requested a ten- claim that she was coerced into surrendering the vehicles
day period within which to refer the matter of contempt to had no basis.
a counsel of her choice. The request was denied by Judge
Even assuming ex gratia argumenti that there indeed
Allarde in his assailed order dated October 8, 1992. Thus
existed certain legal infirmities in connection with the
petitioner Abracia claimed, inter alia, that: (a) she was
assailed orders of Judge Allarde, still, considering the
denied due process; (b) the silence of the order of Judge
totality of circumstances of this case, the nullification of
Allarde on her request for time violated an orderly and
the contested orders would be way out of line. For 21 long
faithful recording of the proceedings, and (c) she was
years, starting 1972 when this controversy started up to
coerced into agreeing to surrender the vehicles.
1993 when her claim was fully paid out of the garnished
We do not think so. What violates due process is the funds of the City of Caloocan, respondent Santiago was
absolute lack of opportunity to be heard. That opportunity, cruelly and unjustly deprived of what was due her. It would
the Court is convinced, was sufficiently accorded to be, at the very least, merciless and unchristian to make
petitioner Abracia. She was notified of the contempt private respondent refund the City of Caloocan the
charge against her; she was effectively assisted by amount already paid to her, only to force her to go through
counsel when she appeared during the hearing on the same nightmare all over again.
October 8, 1992; and she was afforded ample opportunity
At any rate, of paramount importance to us is that
to answer and refute the charge against her. The
justice has been served. No right of the public was violated
circumstance that she opted not to avail of her chance to
and public interest was preserved.
be heard on that occasion by asking for an extension of
time within which to hire a counsel of her choice, a request Finally, we cannot simply pass over in silence the
denied by the trial court, did not transgress nor deprive her deplorable act of the former Mayor of Caloocan City in
of her right to due process. refusing to sign the check in payment of the Citys
obligation to private respondent. It was an open defiance
Significantly, during the hearing on October 8, 1992,
of judicial processes, smacking of political arrogance, and
Mr. Nagpacan manifested in open court that, after
a direct violation of the very ordinance he himself
conferring with petitioner Abracia, the latter was willing to
approved. Our Resolution in G.R. No. 98366, City
surrender these vehicles into the custody of the sheriff on
Government of Caloocan vs. Court of Appeals, et al.,
the condition that the standing motion (for contempt) be
dated May 16, 1991, dismissing the petition of the City of
withdrawn. Her decision was made freely and
[22]

Caloocan assailing the issuance of a writ of execution by


voluntarily, and after conferring with her counsel.
the trial court, already resolved with finality all
Moreover, it was petitioner Abracia herself who imposed
impediments to the execution of judgment in this case.
Yet, the City Government of Caloocan, in a blatant display NATIONAL IRRIGATION ADMINISTRATION
of malice and bad faith, refused to comply with the (NIA), petitioner, vs. HONORABLE COURT OF
decision. Now, it has the temerity to come to this Court APPEALS (4th Division), CONSTRUCTION
once more and continue inflicting injustice on a hapless INDUSTRY ARBITRATION COMMISSION, and
citizen, as if all the harm and prejudice it has already HYDRO RESOURCES CONTRACTORS
heaped upon respondent Santiago are still not enough. CORPORATION, respondents.
This Court will not condone the repudiation of just
obligations contracted by municipal corporations. On the DECISION
contrary, we will extend our aid and every judicial facility DAVIDE, JR., C.J.:
to any citizen in the enforcement of just and valid claims
against abusive local government units. In this special civil action for certiorari under Rule 65 of
the Rules of Court, the National Irrigation Administration
WHEREFORE, the petition is hereby DISMISSED for (hereafter NIA), seeks to annul and set aside the Resolutions[1]of
utter lack of merit. The assailed orders of the trial court the Court of Appeals in CA-GR. SP No. 37180 dated 28 June
dated October 1, 1992, October 8, 1992 and May 7, 1993, 1996 and 24 February 1997, which dismissed respectively NIAs
respectively, are AFFIRMED. petition for certiorari and prohibition against the Construction
Petitioners and their counsels are hereby warned Industry Arbitration Commission (hereafter CIAC), and the
against filing any more pleadings in connection with the motion for reconsideration thereafter filed.
issues already resolved with finality herein and in related Records show that in a competitive bidding held by NIA in
cases. August 1978, Hydro Resources Contractors Corporation
Costs against petitioners. (hereafter HYDRO) was awarded Contract MPI-C-2 for the
construction of the main civil works of the Magat River Multi-
SO ORDERED.
Purpose Project. The contract provided that HYDRO would be
paid partly in Philippine pesos and partly in U.S. dollars.
HYDRO substantially completed the works under the contract
in 1982 and final acceptance by NIA was made in
1984. HYDRO thereafter determined that it still had an account
receivable from NIA representing the dollar rate differential of
the price escalation for the contract.[2]
After unsuccessfully pursuing its case with NIA, HYDRO,
[G.R. No. 129169. November 17, 1999] on 7 December 1994, filed with the CIAC a Request for
Adjudication of the aforesaid claim. HYDRO nominated six
arbitrators for the arbitration panel, from among whom CIAC
appointed Engr. Lauro M. Cruz. On 6 January 1995, NIA filed arbitration as a mode of settlement of disputes, they could not
its Answer wherein it questioned the jurisdiction of the CIAC have contemplated submission of their disputes to CIAC. NIA
alleging lack of cause of action, laches and estoppel in view of further argued that records show that it had not voluntarily
HYDROs alleged failure to avail of its right to submit the submitted itself to arbitration by CIAC citing TESCO Services,
dispute to arbitration within the prescribed period as provided Inc. v. Hon. Abraham Vera, et al.,[8] wherein it was ruled:
in the contract. On the same date, NIA filed a Compliance
wherein it nominated six arbitrators, from among whom CIAC CIAC did not acquire jurisdiction over the dispute arising from
appointed Atty. Custodio O. Parlade, and made a counterclaim the sub-contract agreement between petitioner TESCO and
for P1,000,000 as moral damages; at least P100,000 as private respondent LAROSA. The records do not show that the
exemplary damages; P100,000 as attorneys fees; and the costs parties agreed to submit the disputes to arbitration by the
of the arbitration.[3] CIAC xxxx. While both parties in the sub-contract had agreed
to submit the matter to arbitration, this was only between
The two designated arbitrators appointed Certified Public
themselves, no request having been made by both with the
Accountant Joven B. Joaquin as Chairman of the Arbitration
CIAC. Hence, as already stated, the CIAC, has no jurisdiction
Panel. The parties were required to submit copies of the over the dispute. xxxx. Nowhere in the said article (sub-
evidence they intended to present during the proceedings and
contract) does it mention the CIAC, much less, vest
were provided the draft Terms of Reference.[4]
jurisdiction with the CIAC.
At the preliminary conference, NIA through its counsel
Atty. Joy C. Legaspi of the Office of the Government Corporate On 11 April 1995, the arbitral body issued an order[9] which
Counsel, manifested that it could not admit the genuineness of deferred the determination of the motion to dismiss and resolved
HYDROs evidence since NIAs records had already been to proceed with the hearing of the case on the merits as the
destroyed. NIA requested an opportunity to examine the grounds cited by NIA did not seem to be indubitable. NIA filed
originals of the documents which HYDRO agreed to provide.[5] a motion for reconsideration of the aforesaid Order. CIAC in
denying the motion for reconsideration ruled that it has
After reaching an accord on the issues to be considered by jurisdiction over the HYDROs claim over NIA pursuant to E.O
the arbitration panel, the parties scheduled the dates of hearings 1008 and that the hearing should proceed as scheduled.[10]
and of submission of simultaneous memoranda.[6]
On 26 May 1996, NIA filed with the Court of Appeals an
On 13 March 1995, NIA filed a Motion to Dismiss[7]alleging original action of certiorari and prohibition with prayer for
lack of jurisdiction over the disputes. NIA contended that there restraining order and/or injunction, seeking to annul the Orders
was no agreement with HYDRO to submit the dispute to CIAC of the CIAC for having been issued without or in excess of
for arbitration considering that the construction contract was jurisdiction. In support of its petition NIA alleged that:
executed in 1978 and the project completed in 1982, whereas
the Construction Industry Arbitration Law creating CIAC was A

signed only in 1985; and that while they have agreed to


RESPONDENT CIAC HAS NO AUTHORITY OR THE COMMENCEMENT OF THE ACTION DOES NOT ONLY
JURIDICTION TO HEAR AND TRY THIS DISPUTE APPLY TO THE INSTANT CASE.[11]
BETWEEN THE HEREIN PARTIES AS E.O. NO. 1008
HAD NO RETROACTIVE EFFECT. The Court of Appeals, after finding that there was no grave
abuse of discretion on the part of the CIAC in issuing the
B aforesaid Orders, dismissed the petition in its Resolution dated
28 June 1996. NIAs motion for reconsideration of the said
THE DISPUTE BETWEEN THE PARTIES SHOULD BE decision was likewise denied by the Court of Appeals on 26
SETTLED IN ACCORDANCE WITH GC NO. 25, ART. February 1997.
2046 OF THE CIVIL CODE AND R.A. NO. 876 THE
GOVERNING LAWS AT THE TIME CONTRACT WAS On 2 June 1997, NIA filed before us an original action
EXECUTED AND TERMINATED. for certiorari and prohibition with urgent prayer for temporary
restraining order and writ of preliminary injunction, praying for
C the annulment of the Resolutions of the Court of Appeals dated
28 June 1996 and 24 February 1997. In the said special civil
E.O. NO. 1008 IS A SUBSTANTIVE LAW, NOT MERELY action, NIA merely reiterates the issues it raised before the
PROCEDURAL AS RULED BY THE CIAC. Court of Appeals. [12]
D We take judicial notice that on 10 June 1997, CIAC
rendered a decision in the main case in favor of HYDRO.[13] NIA
AN INDORSEMENT OF THE AUDITOR GENERAL assailed the said decision with the Court of Appeals. In view of
DECIDING A CONTROVERSY IS A DECISION BECAUSE the pendency of the present petitions before us the appellate
ALL THE ELEMENTS FOR JUDGMENT ARE THERE; court issued a resolution dated 26 March 1998 holding in
THE CONTROVERSY, THE AUTHORITY TO DECIDE abeyance the resolution of the same until after the instant
AND THE DECISION. IF IT IS NOT APPEALED petitions have been finally decided.[14]
SEASONABLY, THE SAME BECOMES FINAL.
At the outset, we note that the petition suffers from a
E procedural defect that warrants its outright dismissal. The
questioned resolutions of the Court of Appeals have already
NIA HAS TIMELY RAISED THE ISSUE OF become final and executory by reason of the failure of NIA to
JURISDICTION. IT DID NOT WAIVE NOR IS IT appeal therefrom. Instead of filing this petition
ESTOPPED FROM ASSAILING THE SAME. for certiorari under Rule 65 of the Rules of Court, NIA should
have filed a timely petition for review under Rule 45.
F
There is no doubt that the Court of Appeals has jurisdiction
THE LEGAL DOCTRINE THAT JURISDICTION IS over the special civil action for certiorari under Rule 65 filed
DETERMINED BY THE STATUTE IN FORCE AT THE TIME OF before it by NIA. The original jurisdiction of the Court of
Appeals over special civil actions for certiorari is vested upon For the writ of certiorari under Rule 65 of the Rules of
it under Section 9(1) of B.P. 129. This jurisdiction is concurrent Court to issue, a petitioner must show that he has no plain,
with the Supreme Court[15] and with the Regional Trial Court.[16] speedy and adequate remedy in the ordinary course of law
against its perceived grievance.[22] A remedy is considered plain,
Thus, since the Court of Appeals had jurisdiction over the
speedy and adequate if it will promptly relieve the petitioner
petition under Rule 65, any alleged errors committed by it in the
from the injurious effects of the judgment and the acts of the
exercise of its jurisdiction would be errors of judgment which
lower court or agency.[23] In this case, appeal was not only
are reviewable by timely appeal and not by a special civil action
available but also a speedy and adequate remedy.
of certiorari.[17] If the aggrieved party fails to do so within the
reglementary period, and the decision accordingly becomes Obviously, NIA interposed the present special civil action
final and executory, he cannot avail himself of the writ of certiorari not because it is the speedy and adequate remedy
of certiorari, his predicament being the effect of his deliberate but to make up for the loss, through omission or oversight, of
inaction.[18] the right of ordinary appeal. It is elementary that the special civil
action of certiorari is not and cannot be a substitute for an
The appeal from a final disposition of the Court of Appeals
appeal, where the latter remedy is available, as it was in this
is a petition for review under Rule 45 and not a special civil
case. A special civil action under Rule 65 of the Rules of Court
action under Rule 65 of the Rules of Court, now Rule 45 and
will not be a cure for failure to timely file a petition for review
Rule 65, respectively, of the 1997 Rules of Civil
on certiorari under Rule 45 of the Rules of Court. [24] Rule 65 is
Procedure.[19] Rule 45 is clear that decisions, final orders or
an independent action that cannot be availed of as a substitute
resolutions of the Court of Appeals in any case, i.e., regardless
for the lost remedy of an ordinary appeal, including that under
of the nature of the action or proceedings involved, may be
Rule 45,[25] especially if such loss or lapse was occasioned by
appealed to this Court by filing a petition for review, which
ones own neglect or error in the choice of remedies.[26]
would be but a continuation of the appellate process over the
original case.[20] Under Rule 45 the reglementary period to For obvious reasons the rules forbid recourse to a special
appeal is fifteen (15) days from notice of judgment or denial of civil action for certiorari if appeal is available, as the remedies
motion for reconsideration.[21] of appeal and certiorari are mutually exclusive and not
alternative or successive.[27] Although there are exceptions to the
In the instant case the Resolution of the Court of Appeals
rules, none is present in the case at bar. NIA failed to show
dated 24 February 1997 denying the motion for reconsideration
circumstances that will justify a deviation from the general rule
of its Resolution dated 28 June 1997 was received by NIA on 4
as to make available a petition for certiorari in lieu of taking an
March1997.Thus, it had until 19 March 1997 within which to
appropriate appeal.
perfect its appeal. NIA did not appeal. What it did was to file an
original action for certiorari before this Court, reiterating the Based on the foregoing, the instant petition should be
issues and arguments it raised before the Court of Appeals. dismissed.
In any case, even if the issue of technicality is disregarded already constituted, the arbitral board was actually exercising
and recourse under Rule 65 is allowed, the same result would be current, not retroactive, jurisdiction. As such, there is no need to
reached since a review of the questioned resolutions of the pass upon the issue of whether E.O. No. 1008 is a substantive
CIAC shows that it committed no grave abuse of discretion. or procedural statute.
Contrary to the claim of NIA, the CIAC has jurisdiction NIA also contended that the CIAC did not acquire
over the controversy. Executive Order No.1008, otherwise jurisdiction over the dispute since it was only HYDRO that
known as the Construction Industry Arbitration Law which was requested for arbitration. It asserts that to acquire jurisdiction
promulgated on 4 February 1985, vests upon CIAC original and over a case, as provided under E.O. 1008, the request for
exclusive jurisdiction over disputes arising from, or connected arbitration filed with CIAC should be made by both parties, and
with contracts entered into by parties involved in construction hence the request by one party is not enough.
in the Philippines, whether the dispute arises before or after the
It is undisputed that the contracts between HYDRO and
completion of the contract, or after the abandonment or breach
NIA contained an arbitration clause wherein they agreed to
thereof. The disputes may involve government or private
submit to arbitration any dispute between them that may arise
contracts. For the Board to acquire jurisdiction, the parties to a
before or after the termination of the agreement. Consequently,
dispute must agree to submit the same to voluntary arbitration.[28]
the claim of HYDRO having arisen from the contract is
The complaint of HYDRO against NIA on the basis of the arbitrable. NIAs reliance with the ruling on the case of Tesco
contract executed between them was filed on 7 December 1994, Services Incorporated v. Vera,[30] is misplaced.
during the effectivity of E.O. No. 1008. Hence, it is well within
The 1988 CIAC Rules of Procedure which were applied by
the jurisdiction of CIAC. The jurisdiction of a court is
this Court in Tesco case had been duly amended by CIAC
determined by the law in force at the time of the commencement
Resolutions No. 2-91 and 3-93, Section 1 of Article III of which
of the action.[29]
read as follows:
NIAs argument that CIAC had no jurisdiction to arbitrate on
contract which preceded its existence is untenable. E.O. 1008 is Submission to CIAC Jurisdiction - An arbitration clause in a
clear that the CIAC has jurisdiction over all disputes arising construction contract or a submission to arbitration of a
from or connected with construction contract whether the construction contract or a submission to arbitration of a
dispute arises before or after the completion of the construction dispute shall be deemed an agreement to submit
contract. Thus, the date the parties entered into a contract and an existing or future controversy to CIAC jurisdiction,
the date of completion of the same, even if these occurred before notwithstanding the reference to a different arbitration
the constitution of the CIAC, did not automatically divest the institution or arbitral body in such contract or
CIAC of jurisdiction as long as the dispute submitted for submission. When a contract contains a clause for the
arbitration arose after the constitution of the CIAC. Stated submission of a future controversy to arbitration, it is not
differently, the jurisdiction of CIAC is over the dispute, not the necessary for the parties to enter into a submission agreement
contract; and the instant dispute having arisen when CIAC was before the claimant may invoke the jurisdiction of CIAC.
Under the present Rules of Procedure, for a particular complaint on its face shows that indeed the action has already
construction contract to fall within the jurisdiction of CIAC, it prescribed.[35] In the instant case, the issue of prescription and
is merely required that the parties agree to submit the same to laches cannot be resolved on the basis solely of the complaint. It
voluntary arbitration.Unlike in the original version of Section 1, must, however, be pointed that under the new rules,[36] deferment
as applied in the Tesco case, the law as it now stands does not of the resolution is no longer permitted. The court may either
provide that the parties should agree to submit disputes arising grant the motion to dismiss, deny it, or order the amendment of
from their agreement specifically to the CIAC for the latter to the pleading.
acquire jurisdiction over the same. Rather, it is plain and clear
WHEREFORE, the instant petition is DISMISSED for
that as long as the parties agree to submit to voluntary
lack of merit. The Court of Appeals is hereby DIRECTED to
arbitration, regardless of what forum they may choose, their
proceed with reasonable dispatch in the disposition of C.A. G.R.
agreement will fall within the jurisdiction of the CIAC, such
No. 44527 and include in the resolution thereof the issue of
that, even if they specifically choose another forum, the parties
laches and prescription.
will not be precluded from electing to submit their dispute
before the CIAC because this right has been vested upon each SO ORDERED.
party by law, i.e., E.O. No. 1008.[31]
Moreover, it is undeniable that NIA agreed to submit the
dispute for arbitration to the CIAC. NIA through its counsel
actively participated in the arbitration proceedings by filing an
answer with counterclaim, as well as its compliance wherein it
nominated arbitrators to the proposed panel, participating in the
deliberations on, and the formulation of, the Terms of Reference
of the arbitration proceeding, and examining the documents
submitted by HYDRO after NIA asked for the originals of the
said documents.[32]
As to the defenses of laches and prescription, they are
evidentiary in nature which could not be established by mere
allegations in the pleadings and must not be resolved in a motion
to dismiss. Those issues must be resolved at the trial of the case
on the merits wherein both parties will be given ample
opportunity to prove their respective claims and
defenses.[33] Under the rule[34] the deferment of the resolution of
the said issues was, thus, in order. An allegation of prescription
can effectively be used in a motion to dismiss only when the

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