Consolidated Cases in Political Law

8/22/2019 Consolidated Cases in Political Law

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POLITICAL LAW

CASE DIGESTS

A. Preliminary Considerations

In RE: Joaquin T. Borromeo (21 February 1995)

241 SCRA 405

per curiam

FACTS:

BACKGROUND. "A Little learning is a dangerous thing, and he who act as his own lawyer has a fool fora client.

o Joaquin Borromeo is not a lawyer but had read some law books and had superficial awareness offew substantive principles and procedural rules. With a couple of learning he had been prosecuting

legal proceedings in various courts dogmatically pontificating errors supposedly committed bycourts, including the Supreme Court. His illusions of being a lawyer has presumably given him

competence to represent himself in original and review proceedings. With this, he circulated

statements against judges, court employees, and lawyers, aside from the many cases he filed

against bank employees.

o Borromeo had loan transactions with three banks (Traders Royal Bank (TRB), United CoconutPlanters Bank(UCPB) and Security Bank and Trust Co) with his property and property of his

familiy and a third person as a collateral. However, Borromeo failed to pay his obligations to the

said banks, and when demands were made for him to do so, he laid down his own terms for his

satisfaction which were inconsistent with those agreed upon.

o When the bank refused to agree with him, he brought suits left and right against the said banks,officers of the banks, lawyers representing the banks and public prosecutors. He sued as well

judges of trial courts, justices of the court of appeals and Supreme Court who at one time or

another, rendered judgement, resolutions or orders that were adverse to him. In aggregate , he had

initiated an astounding number of no less than 50 original or review proceedings, civil, criminal

and administrative.

ISSUE

Whether or not Borromeo is guilty of constructive contempt for repetitious disrespect to court officials andtheir decisions?

RULING

Borromeo is found and declared guilty of constructive contempt.o There can scarcely be any doubt of Borromeo's guilt of contempt, for abuse of and interference

with judicial rules and processes, gross disrespect to courts and judges and improper conduct

directly impeding, obstructing and degrading the administration of justice. He stubbornly litigated

issues already declared to be without merit, rendered adversely to him in many suits and

proceedings, rulings which had become final and executory, obdurately and unreasonably insisting

on the application of his own individual version of the rules, founded on nothing more than his

personal (and quite erroneous) reading of the Constitution and the law; he insulted judges and

court officers, including the attorneys appearing for his adversaries, needlessly overloaded the

court dockets and sorely tried the patience of the judges and court employees who had to act on


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his repetitious and largely unfounded complaints, pleadings and motions.

On the contention that he "was exercising his rights of freedom of speech, of expression, and to petition thegovernment for redress of grievances as guaranteed by the Constitution (Sec. 4, Art. III) and in accordance

with the accountability of public officials.": The constitutional rights invoked by him afford no justification

for repetitious litigation of the same causes and issues, for insulting lawyers, judges, court employees; and

other persons, for abusing the processes and rules of the courts, wasting their time, and bringing them into

disrepute and disrespect.


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Conducto v. Monzon (2 July 1998)

A.M. MTJ-98-1147

FACTS

BACKGROUNDER. An administrative complaint filed by petitioner Conducto against respondent JudgeIluminado C. Monzon of Municipal Trial Court, San Pablo City with ignorance of law when he

deliberately refused to suspend a barangay chairman who was charged with the crime of unlawful

appointment under Article 244 of the Revised Penal Code.

o In Aug 30, 1993, Jesus Conducto (complainant) filed a complaint against Barangay ChairmanBenjamin Maghirang with violation of Section 394 of the Local Government Code and Article 244

of the Revised Penal Code for appointing his sister-in-law as barangay secretary in May 17, 1989.

o Section 394 of the LGC prohibits a punong barangay from appointing a relative within the fourthcivil degree of consanguinity or affinity as barangay secretary.

o The City Prosecutor dismissed the complaint, stating that the appointment was made before theeffectivity of the Local Government Code of 1991 [which allow such appointment?].

o In October, complainant Conducto obtained an opinion from DILG Director Opinion declaringthat the appointment violated par(2), Section 95 of BP 337, the Local Government Code prior to

the Local Government Code of 1991.

o In Feb 1994, the Ombudsman recommended and approved the filing of an information forunlawful appointment (Article 244 of the Revised Penal Code) against Maghirang.

o The City Prosecutor filed a criminal case against Maghirang together with a motion for hissuspension pursuant to Sec. 13 of RA 3019 or the Anti Graft and Corrupt Practices Act (which

provides that any incumbent public officer or official under criminal prosecution under Title 7,

Book II of the RPC shall be suspended).

o Judge Monzon denied the motion for suspension. The judge opined that that the suspension soughtby the prosecution is premised upon the act charged allegedly committed during the previous term

of the accused as Barangay Chairman, who was subsequently re-elected during the last Barangay

Election of May 9, 1994. He opined that preventive suspension is applicable only if there is an

administrative case filed against a local official who is at the same time criminally charged in

Court [so, both administrative and criminal charges have to be present, according to Monzon?].

At present, the records of the Court show that there is no pending administrative case existing or

filed against the accused.

[PRESENT CASE. Was the case brought to the CA and later to the SC? What was CAs decision?] ISSUE

Whether or not the elective official will be free from criminal liability upon his reelection to officeRULING

No. Judge Monzon was fined for Php 5,000 The Supreme Court explicitly ruled that the reelection of public official extinguishes only the

administrative and not criminal liability incurred by him in his previous term of office. Thus: the ruling

therefore, that -when the people have elected a man to his office it must be assumed that they did this with

knowledge of his life and character and that they disregarded or forgave his fault or misconduct if he had

been guilty of any- refers only to administrative case and not to criminal case, because a crime according to


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the supreme court is a public wrong more atrocious in character than mere misfeasance committed by a

public officer in the discharge of his duty, and injurious not only to a person but also to the state as whole.

Article 89 of the revised penal code enumerates the ground for extinction of the criminal liability andreelection to office of public official is not one of them. Only the President of the Philippines can grant the

pardon of a criminal offense (Philippine constitution) [which section in what article?]


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Republic v. Sandiganbayan (21 July 2003)

G.R. No. 104768

Carpio, J.

Complete Title

REPUBLIC OF THE PHILIPPINES, Petitioner, vs. SANDIGANBAYAN, MAJOR GENERAL JOSEPHUS

Q. RAMAS and ELIZABETH DIMAANO, Respondents.

FACTS

BACKGROUND. There are three major issues involved in the case and our main concern for our Consti 1class is the third. At any rate, it may be good for everyone to know what the 3 issues are: 1. PCGGs

Jurisdiction to Investigate Private Respondents; 2. Propriety of Dismissal of Case Before Completion of

Presentation of Evidence; and 3. Legality of the Search and Seizure

o Immediately upon her assumption to office following the successful EDSA Revolution, thenPresident Corazon C. Aquino issued Executive Order No. 1 ("EO No. 1") creating the Presidential

Commission on Good Government ("PCGG"). EO No. 1 primarily tasked the PCGG to recover allill-gotten wealth of former President Ferdinand E. Marcos, his immediate family, relatives,

subordinates and close associates.

o PCGG created an AFP Anti-Graft Board ("AFP Board") tasked to investigate reports ofunexplained wealth and corrupt practices by AFP personnel, whether in the active service or

retired.

o Based on its mandate, the AFP Board investigated various reports of alleged unexplained wealthof respondent Major General Josephus Q. Ramas ("Ramas"). On 27 July 1987, the AFP Board

issued a Resolution on its findings and recommendation on the reported unexplained wealth of

Ramas, to wit: house and lot located at 15-Yakan St., La Vista, Quezon City; house and lot located

in Cebu City; The equipment/items and communication facilities which were found in the

premises of Elizabeth Dimaano, money in the amount of P2,870,000.00 and $50,000 US Dollars

o Where is the love story being asked by the prof? Elizabeth Dimaano is the mistress of respondent.That respondent usually goes and stays and sleeps in the alleged house of Elizabeth Dimaano in

Barangay Tengga, Itaas, Batangas City and when he arrives, Elizabeth Dimaano embraces and

kisses respondent. That on February 25, 1986, a person who rode in a car went to the residence of

Elizabeth Dimaano with four (4) attache cases filled with money and owned by MGen Ramas.

Sworn statement in the record disclosed also that Elizabeth Dimaano had no visible means of

income and is supported by respondent for she was formerly a mere secretary.

FIRST CASE [with the Sandiganbayan by PCGG]. It was recommended by the AFB Board that Maj. Gen.Josephus Q. Ramas (ret.) be prosecuted and tried for violation of RA 3019, as amended ("Anti -Graft and

Corrupt Practices Act") and RA 1379, as amended ("The Act for the Forfeiture of Unlawfully Acquired

Property.")

o 1 August 1987, the PCGG filed a petition for forfeiture under Republic Act No. 1379 ("RA No.1379") against Ramas.

o Before Ramas could answer the petition, then Solicitor General Francisco I. Chavez filed anAmended Complaint naming the Republic of the Philippines ("petitioner"), represented by the

PCGG, as plaintiff and Ramas as defendant. The Amended Complaint also impleaded Elizabeth

Dimaano ("Dimaano") as co-defendant.

o After several petitions by PCGG to delay the trial, Ramas and Dimaano filed their motions todismiss based on Republic v. Migrino. The Court held in Migrino that the PCGG does not have


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jurisdiction to investigate and prosecute military officers by reason of mere position held without a

showing that they are "subordinates" of former President Marcos.

o 18 November 1991, Sandiganbayan dismissed the Amended Complaint, without pronouncementas to costs. The counterclaims are likewise dismissed for lack of merit, but the confiscated sum of

money, communications equipment, jewelry and land titles are ordered returned to Elizabeth

Dimaano. The records of the case were remanded and referred to the Ombudsman, who has

primary jurisdiction over the forfeiture cases under R.A. No. 1379 and to the Commissioner of the

Bureau of Internal Revenue for a determination of any tax liability of respondent Elizabeth

Dimaano.

o 4 December 1991, petitioner filed its Motion for Reconsideration.o In answer to the Motion for Reconsideration, private respondents filed a Joint

Comment/Opposition to which petitioner filed its Reply on 10 January 1992.

o 25 March 1992, the Sandiganbayan rendered a Resolution denying the Motion forReconsideration.

FINAL CASE [to the SC]. This is a petition for review on certiorari seeking to set aside the Resolutions ofthe Sandiganbayan.

ISSUE

[Take note that there are three issues involved in the case as mentioned above but we are limiting ourselvesto issue number 3]

Did the respondent court err in holding articles and things such as sums of money, communicationsequipment, jewelry and land titles confiscated from Dimaano, and that these were illegally seized and

therefore excluded as evidence? Can Ramas and Dimaano claim exclusionary right during that time when

there was no enforceable Constitution in place? [NB: exclusionary rule is a rule of evidence that disallows

the use of illegally obtained evidence in criminal trials]

RULING

SC said that the correct issues are: (1) whether the revolutionary government was bound by the Bill of Rightsof the 1973 Constitution during the interregnum, that is, after the actual and effective take -over of power

by the revolutionary government following the cessation of resistance by loyalist forces up to 24 March

1986 (immediately before the adoption of the Provisional Constitution); and (2) whether the protection

accorded to individuals under the International Covenant on Civil and Political Rights ("Covenant") and

the Universal Declaration of Human Rights ("Declaration") remained in effect during the interregnum.

SC held that the Bill of Rights under the 1973 Constitution was not operative during the interregnum.However, they ruled that the protection accorded to individuals under the Covenant and the Declarationremained in effect during the interregnum.

Thus, to rule that the Bill of Rights of the 1973 Constitution remained in force during the interregnum,absent a constitutional provision excepting sequestration orders from such Bill of Rights, would clearly

render all sequestration orders void during the interregnum. Nevertheless, even during the interregnum the

Filipino people continued to enjoy, under the Covenant and the Declaration, almost the same rights found

in the Bill of Rights of the 1973 Constitution.

The revolutionary government, after installing itself as the de jure government, assumed responsibility forthe States good faith compliance with the Covenant to which the Philippines is a signatory. Article 2(1) of

the Covenant requires each signatory State "to respect and to ensure to all individuals within its territory

and subject to its jurisdiction the rights recognized in the present Covenant." Under Article 17(1) of the

Covenant, the revolutionary government had the duty to insure that "[n]o one shall be subjected to arbitrary

or unlawful interference with his privacy, family, home or correspondence."


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The Declaration, to which the Philippines is also a signatory, provides in its Article 17(2) that "[n]o one shallbe arbitrarily deprived of his property." Although the signatories to the Declaration did not intend it as a

legally binding document, being only a declaration, the Court has interpreted the Declaration as part of the

generally accepted principles of international law and binding on the State.

Thus, the revolutionary government was also obligated under international law to observe the rights ofindividuals under the Declaration. The revolutionary government did not repudiate the Covenant or the

Declaration during the interregnum.

During the interregnum when no constitution or Bill of Rights existed, directives and orders issued bygovernment officers were valid so long as these officers did not exceed the authority granted them by the

revolutionary government. The directives and orders should not have also violated the Covenant or the

Declaration. In this case, the revolutionary government presumptively sanctioned the warrant since the

revolutionary government did not repudiate it. The warrant, issued by a judge upon proper application,

specified the items to be searched and seized. The warrant is thus valid with respect to the items

specifically described in the warrant.

Hence, both Ramas and Dimaano still had their exclusionary rights intact by virtue of both the Covenant andthe Declaration.

However, the Constabulary raiding team seized items not included in the warrant. As admitted by petitionerswitnesses, the raiding team confiscated items not included in the warrant

The seizure of these items was therefore void, and unless these items are contraband per se, and they are not,they must be returned to the person from whom the raiding seized them. However, we do not declare that

such person is the lawful owner of these items, merely that the search and seizure warrant could not be

used as basis to seize and withhold these items from the possessor. It was thus held that these items should

be returned immediately to Dimaano.

The petition for certiorari was DISMISSED. The questioned Resolutions of the Sandiganbayan dated 18November 1991 and 25 March 1992 in Civil Case No. 0037, were remanded to the Ombudsman for

appropriate action as the evidence may warrant, and referred to the Commissioner of the Bureau of Internal

Revenue for a determination of any tax liability of respondent Elizabeth Dimaano.


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Reagan v. Commissioner of Internal Revenue (27 December 1969)

30 SCRA 968

Fernando, J.

FACTS

BACKGROUND. William Reagan was a US citizen and employee of Bendix Radio, Division of BendixAviation Corporation which provides technical assistance to the US Air Force. He was assigned to Clark

Air Base in Pampanga on July 7, 1959. He imported on April 22, 1960 a tax free 1960 Cadillac car with

accessories worth $6,443.83.

o On July 11, 1960, he was granted by the Base Commander to sell his car provided that it would besold to a member of US Armed Forces. On the same date, the petitioner sold his car to Willie

Johnson Jr. (US Marine Corps. in Cavite) in Clark Air Base.

o Johnson, on the other hand, sold it to Fred Meneses for Php32,000 in Manila. The Commissionerof Internal Revenue rendered him liable for income tax (Php 2,912) he earned based from the sale.

Reagan paid but sought for refund from the Commissioner after claiming tax exemption.

FIRST STAGE. Even though the action for the refund was pending he filed a case with the Court of TaxAppeals.

o As regards the ruling of the CTA, there was a contention if Clark Air Base is considered a foreignsoil as it is an American base. The court has no answer in the contention. The CTA ruled that there

is nothing objectionable in the tax assessment and denied the refund.

FINAL STAGE. Reagan appealed the decision of the CTA to the SC.ISSUE

Whether or not the Philippines has jurisdiction over US Bases in the country for purposes of taxationRULING

The ruling of the Court of Tax appeals was affirmed. The petitioner is liable for the income tax arisingfrom sale of his automobile in Clark Field Air Base which is within the territorial jurisdiction of the

country. The law does not look with favor on tax exemptions and that he who would seek to be thus

privileged must justify it by words too plain to be mistaken and top categorical to be misinterpreted. In

claiming tax exemptions, the court is strictly against the person claiming it. He must prove first that he is

covered by such exemption. The petitioners liability for the income tax due to him as a result of the sale

was unavoidable since the sale took place in Philippine territory.

Being independent and sovereign, the Philippines may exercise its authority over its entire domain.However, the state may restrict the use of its power expressly or impliedly.

o This refers to concept of state sovereignty which is called "auto-limitation." It is defined byJellinek as the "property of a state-force due to which it has the exclusive capacity of legal self-

determination and self-restriction." It may refrain from its exercise ofillimitable competence [its

definition was not provided but based in the context it refers to the illimitable power of the state to

control its territory unless it refrains or limits itself from exercising its authority.]

o RE the Military Bases Agreement of 1947: though Philippines does not preclude itself fromallowing another power to participate in its jurisdictional right over its territory, the areas covered

have alien character but their status as native soil remains and still subject to its authority. Its

jurisdiction may be diminished but it does not disappear. [Sovereignty refers to the power of the

state over its local affairs within its territory and this territorial sovereignty of the state is also

referred to here as jurisdiction.]

o Taking from these statements, US bases in the Philippines are not and cannot be foreign territory.


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There is nothing in the agreement that Clark Air Base is a foreign territory for purposes of income

tax legislation. It clearly says that the country's jurisdictional rights including power to tax have

been preserved. However, Reagan invoked the exemption clause in Act XII of the Military Bases

Agreement which states that a "US national serving or employed in the Philippines in connection

with the construction, maintenance, operation or defense of the bases and residing in the

Philippines only by reason of employment is not to be taxed on his income unless he derived it

from Philippine source or sources other than the US sources." This statement does not apply to

income derived from the bases which are clearly derived from the Philippines [you mean that

income generated from the US bases in the Philippines are considered Philippine income? Not

actually, but the sources of income in US bases were from Philippine sources. According to the

ruling of the court, the exemption clause in the Agreement does not apply to income derived in

the bases which are clearly derived in the Philippines. For income tax purposes, the Clark Air

Force Base is not outside Philippine territory.]

The court cited decisions from US courts:o Chief Justice Marshall (Schooner Exchange v. M'Faddon, 1812): "The jurisdiction of the nation

within its own territory is necessarily exclusive and absolute. It is susceptible of no limitation notimposed by itself.

o Chief Justice Taney (1857): "For undoubtedly every person who is found within the limits of agovernment, whether temporary purposes or as a resident, is bound by its laws.

o Justice Van Devanter: "the territory subject to its jurisdiction includes the land areas under itsdominion and control the ports, harbors, bays, and other inclosed arms of the sea along its coast,

and a marginal belt of the sea extending from the coast line outward a marine league, or 3

geographic miles."

o Hyde (International Law): not even the embassy premises of a foreign power are to be consideredoutside territorial domain of the host state.

The petitioner cited the 1951 decision of the court (Saura Import and Export, Co. v. Meer) where JusticeTuason said that "US state forces that brought in such equipment later disposed of as surplus, when no

longer needed for military purposes, was beyond the reach of our tax statues." Justice Tuason also added,

"while in army bases or installations within the Philippines those goods were in contemplation of law on

foreign soil." This statement of Justice Tuason was clearly obiter and not being necessary for the resolution

of the issue. It was only said by way of legal fiction.

o However, Justice Barrera in the 1962 decision in Co Po v. Collector of Internal Revenue said thatthe "US Military Air Bases are not foreign territories both in the political and geographical sense"

It is thus concluded that the claim of the petitioner that Clark Air Force Base is outside Philippine territoryis without merit. Nevertheless, Justice Tuason, in the case of People v. Acierto, ruled that the MilitaryBases Agreement merely consents the US exercising jurisdiction on certain cases in matters of comity,

courtesy, or expediency over bases as part of Philippine territory. It should not be construed as a limitation

upon the rights of the Philippine government.


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Bacani and Matoto v. Natl Coconut Corp., et al. (November 29, 1956)

100 PHIL 468

[pls put the name of the ponente here]

FACTS

BACKGROUND. Bacani and Matoto are court stenographers of Branch VI of the Court of First Instanceof Manila. [can you add a story here that led to the case? Please include NACOCOs entry into the story]

FIRST STAGE. In the pendency of case Civil Case No. 2293, Federico Alikpala, counsel for NACOCOrequested said stenographers transcript of stenography taken by them. Leopldo Bacani was paid 564 and

Mateo Matoto 150 for the transcript at 1 per page.

o Upon inspecting the books of this corporation, the Auditor General disallowed the payment ofthese fees.

o On January19, 1953 DOJ expressed an opinion that NACOCO being a government entity isexempted from the said fees thus, plaintiffs are required to reimburse said amounts. This shall be

reimbursed through deducting it from the plaintiffs salary- 25 for Bacani and 10 for Matoto

every payday

SECOND STAGE. To prevent [the enforcement of the above?] deductions and securing judicial rulingthat NACOCO is not a government entity, this Action was instituted in the Court of First Instance of

Manila, under the purview of section 16, Rule 130 of the Rules of Court [please put what this rule says

here]. While NACOCO countered with a defense that they are a government entity with the purview of

section 2 of Revised Administrative Code of 1917.

[is there an intermittent case at the CA?] [Is this case a petition for certiorari at the SC?]

ISSUE

Whether or not NACOCO may be considered as included in the term Government of the Republic of thePhilippines

RULING

The NACOCO is a government-owned or controlled corporation, they are not a part of the Governmentand do not acquire that status for the simple reason that they do not come under the classification of

municipal or public corporation and this court aptly said, The mere fact that the Government happens to

be a majority stockholder does not make it a public corporation (Natl Coal Co v. Collector of Internal

Revenue) While NACOCO was organized with the purpose and a function to which our government has

chosen to exercise to promote the coconut industry, it was given a corporate power separate and distinct


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from our government. They are governed by the Corporation Law. Their powers, duties and liabilities

have t be determined in the light of that law and of their corporate charters.

[can you explain what GOCCs are and their nature vis--vis their connection with the government? Theyare owned by the government but they are not governmental in nature? This is important in explaining the

outcome of the case]

Wherefore, the decision appealed from is affirmed, without pronouncement as to costs. [are you referringto the payments to the stenographers? What happened to them in the end? Made to reimburse or no? why?]


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ACCFA vs. CUGCO(29 November 1969)

GR L-21484

J. Makalintal

FACTS

BACKGROUND. The Agricultural Credit and Cooperative Financing Administration (ACCFA) was agovernment agency created under Republic Act No. 821, as amended. Its administrative machinery was

reorganized and its name changed to Agricultural Credit Administration (ACA) under the Land Reform

Code (Republic Act No. 3844).

o On 4 September 1961 a collective bargaining agreement (contract between an employer and aunion to define conditions for work, benefit and dispute relations), which was to be effective for a

period of 1 year from 1 July 1961, was entered into by and between the Unions and

theAgricultural Credit and Cooperative Financing Administration (ACCFA). A few months

thereafter, the Unions started protesting against alleged violations andnon-implementation of said

agreement. Finally, on 25 October 1962 the Unions declared astrike, which was ended when

thestrikers voluntarily returned to work on 26 November 1962. FIRST STAGE. On 30 October1962 the Unions, together with its mother union, the Confederation of

Unions in Government Corporations and Offices (CUGCO), filed a complaint withthe Court ofIndustrial

Relations against the ACCFA (Case3450-ULP) for having allegedly committed acts of unfair labor

practice, namely:

o violation of the CBA in order to discourage the members of the Unions in the exercise of theirright to self-organization

o discrimination against said members in thematter of promotionso refusal to bargain.

The ACCFA denied the charges and interposed as affirmative and special defenses lack of jurisdiction of

the CIR over the case, illegality of the bargaining contract, expiration of said Contract and lack of approval

by the office of the President of the fringe benefits provided for therein.

Brushing aside the foregoing defenses, the CIR in its decision dated 25 March 1963 ordered the ACCFA:

to cease and desist from committing further acts tending to discourage the members of complainant unions

in the exercise of their right to self organization; to comply with and implement the provision of the

collective bargaining contract executed on 4 September 1961, including the payment of P30.00 a month

living allowance; to bargain in good faith and expeditiously with the herein complainants;

SECOND STAGE. ACCFA moved to reconsider but was turned down in a resolution dated 25 April 1963 ofthe CIR en banc. Thereupon it brought the appeal by certiorari to the Supreme Court (GR L-21484).

o During the pendency of the ACCFA's case, specifically on 8 August 1963, the President of thePhilippines signed into law the Agricultural Land Reform Code (Republic Act 3844), which among

other things required the reorganization of the administrative machinery of the Agricultural Credit and

Cooperative Financing Administration (ACCFA) and changed its name to Agricultural Credit

Administration (ACA).

o On 17 March 1964 the Unions filed a petition for certification election with the Court of IndustrialRelations (Case No. 1327-MC) praying that they be certified as the exclusive bargaining agents for

the supervisors and rank-and-file employees, respectively, in the ACA. The trial Court in its order

dated 30 March 1964 directed the Manager or Officer-in-Charge of the ACA to allow the posting of

said order "for the information of all employees and workers thereof," and to answer the petition.

o ACA denied that the Unions represented the majority of the supervisors and rank-and-file workers. Itfurther alleged that the petition was premature, that the ACA was not the proper party to be notified


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and to answer the petition, and that the employees and supervisors could not lawfully become

members of the Unions, nor be represented by them.

[is this another stage? They raised the matter to the NLRC?] However, in a joint manifestation of the Unionsdated 7 May 1964, with the conformity of the ACA Administrator and of the Agrarian Counsel in his capacity

as such and as counsel for the National Land Reform Council, it was agreed "that the union in this case

represent the majority of the employees in their respective bargaining units" and that only the legal issues

raised would be submitted for the resolution of the trial Court.

o Finding the remaining grounds for ACA's opposition to the petition to be without merit, the trial Courtin its order dated 21 May 1964 certified the Unions as the sole and exclusive bargaining

representatives of the rank-and-file employees and supervisors, respectively, of ACA. Said order was

affirmed by the CIR en banc in its resolution dated 24 August 1964.

[Was there not case filed at the CA before the SC below?] FINAL STAGE. On 2 October 1964 the ACA filed in the Supreme Court a petition for certiorari with urgent

motion to stay (court order suspending something from proceeding) the CIR order (GR L-23605). In a

resolution dated 6 October 1964, the Supreme Court dismissed the petition for lack of adequate allegations,"

but the dismissal was later reconsidered when the ACA complied with the formal requirement stated in saidresolution. As prayed for, the Court ordered the CIR to stay the execution of its order of 21 May 1964.

ISSUE

Whether or not the ACA is engaged in governmental or proprietary functionsRULINGS

The ACA is a government office or agency engaged in governmental, not proprietary functions. Thesefunctions may notbe strictly what President Wilson described as "constituent" (as distinguished from

"ministrant"), suchas those relating to the maintenance of peace and the prevention of crime, those

regulating property and property rights, those relating tothe administration ofjustice and the

determination of political duties of citizens, and those relating to national defense and foreign relations.

Under this traditional classification, such constituent functions are exercised by the Stateas attributes of

sovereignty, and not merely to promote the welfare, progress andprosperity of the people these latter

functions being ministrant, the exercise of which is optional on the part ofthe government.

The growing complexities of modern society, however, have rendered this traditional classification of thefunctionsof government quite unrealistic, not to say obsolete. The areas which used to be left to private

enterprise and initiative and which the government was calledupon to enter optionally, and only "because

it was better equipped to administer for the public welfare than is any private individual or group of

individuals" continue to lose their well-defined boundaries and to beabsorbed within activities that thegovernment must undertake in its sovereign capacity ifit is tomeet the increasing social challenges of

thetimes. Here as almost everywhere else the tendency is undoubtedly towards agreater socialization of

economic forces. Hereof course this development was envisioned, indeed adopted as a national policy, by

the Constitution itself inits declaration of principle concerning the promotion ofsocial justice.

It was in furtherance of such policy that the Land Reform Code was enacted and the various agencies, theACA among them, established to carry out its purposes. There can be no dispute as tothe fact that the land

reform program contemplated in the said Codeis beyond the capabilities ofany private enterprise to

translate into reality. It is a purely governmental function, no less than, say, the establishment and

maintenance of public schools and public hospitals. And when, aside from the governmental objectives of

the ACA, geared as they are to the implementation of the land reform program ofthe State, the law

itselfdeclares that the ACA is a government office, with the formulation of policies, plans and programs

vested no longer in a Board of Governors, as in the caseof the ACCFA, but in theNational Land Reform


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Council, itself agovernment instrumentality; and that its personnel are subjectto Civil Service laws and

torules of standardization with respect to positions and salaries, any vestige of doubt as tothe

governmental character of its functions disappears.

Inview of the foregoing premises, the Unions are notentitled to the certification election sought inthelower Court. Such certification is admittedly for purposes of bargaining in behalf ofthe employees with

respect to terms andconditions of employment, including the right to strike as a coercive economic

weapon, as in fact the said unionsdid strike in 1962 against the ACCFA (GRL-21824). This iscontrary to

Section 11 ofRepublic Act 875.

With the reorganization of theACCFA and its conversion intothe ACA under the Land Reform Code andin view of the Court's ruling as tothe governmental character of the functions of the ACA, the decision of

the lower Court dated 25 March 1963, and the resolution en banc affirming it, in the unfair labor practice

case filed by the ACCFA, which decision is the subject of the present review in GR No. L -21484, has

become moot and academic, particularly insofar as the order to bargain collectively with the Unions is

concerned.

[In simple words, can you explain the difference between the constituent and ministrant functions of theState; and whether ACAs functions fall within either the c/m function; and why the SC used that to justifytheir resolution on this matter?]


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C. State Immunity

E. MERRITT v. GOVERNMENT OF THE PHILIPPINE ISLANDS (21 March 1916)

34 PHIL 311

[kindly put the name of the ponente here]

FACTS

BACKGROUND. Plaintiff (Merritt) was driving a motorcycle toward the western part of Padre Faura(Calle Padre Faura) with a speed of 10 to 12 miles an hour upon crossing Taft Avenue. When he was 10

feet from the southwest intersection, the General Hospital ambulance turned suddenly to the right side of

Taft Ave. without sounding the horn. Such act violated the Motor Vehicle Act which prescribes that after

passing the center, the vehicle should have turned south to reach the left side. This resulted to the

ambulances collision with the plaintiff who was six feet from the southwest point.

o The plaintiff sustained the severe injuries as diagnosed by Dr. Saleeby. He suffered depression inthe left parietal region, wound in the same area and in the back of the head, and nose bleeding. He

was also unconscious. His pulse was weak and irregular at the time of his operation (10:00pm).

His right leg was also broken that the fracture extended to the outer skin.

o He had a weak mental condition and was also slightly deaf. [were these a consequence of theaccident? The wording may mean that he had been like that even before]

o Because of this condition, the plaintiff could no longer perform his duties as a contractorefficiently that he had to dissolve the partnership he formed with the engineer.

FIRST STAGE. Legislature passed Act no. 2457 effective Feb. 3, 1915, enabling the plaintiff to file suitagainst the government. The government cannot be sued by an individual without its consent.

Act No. 2457, effective February 3, 1915, reads:

An Act authorizing E. Merritt to bring suit against the Government of the Philippine Islands and

authorizing the Attorney-General of said Islands to appear in said suit.

Whereas a claim has been filed against the Government of the Philippine Islands by Mr. E. Merritt, of

Manila, for damages resulting from a collision between his motorcycle and the ambulance of the

General Hospital on March twenty-fifth, nineteen hundred and thirteen;

Whereas it is not known who is responsible for the accident nor is it possible to determine the amount

of damages, if any, to which the claimant is entitled; and

Whereas the Director of Public Works and the Attorney-General recommended that an Act be passed

by the Legislature authorizing Mr. E. Merritt to bring suit in the courts against the Government, in

order that said questions may be decided: Now, therefore,

By authority of the United States, be it enacted by the Philippine Legislature, that:

SECTION 1. E. Merritt is hereby authorized to bring suit in the Court of First Instance of the

city of Manila against the Government of the Philippine Islands in order to fix the responsibility for


16/44

the collision between his motorcycle and the ambulance of the General Hospital, and to determine the

amount of the damages, if any, to which Mr. E. Merritt is entitled on account of said collision, and the

Attorney-General of the Philippine Islands is hereby authorized and directed to appear at the trial on

the behalf of the Government of said Islands, to defendant said Government at the same.

SEC. 2. This Act shall take effect on its passage.

SECOND STAGE. Both parties appealed regarding judgement rendered by Court of First Instance ofManila City (which was in favor of the plaintiff with the sum of P14,471).

o The plaintiff said the trial court erred: 1) "in limiting the general damages which the plaintiff suffered to P5,000, instead of

P25,000 as claimed in the complaint,"

2) "in limiting the time when plaintiff was entirely disabled to two months and twenty -one days and fixing the damage accordingly in the sum of P2,666, instead of P6,000 as

claimed by plaintiff in his complaint."

o Meanwhile, the defendant said the trial court erred: 1) in finding that the collision between the plaintiff's motorcycle and the ambulance of

the General Hospital was due to the negligence of the chauffeur

2) in holding that the Government of the Philippine Islands is liable for the damagessustained by the plaintiff as a result of the collision, even if it be true that the collision

was due to the negligence of the chauffeur

3) in rendering judgment against the defendant for the sum of P14,741ISSUES

Did the defendant, in enacting the above quoted Act, simply waive its immunity from suit or did it alsoconcede its liability to the plaintiff?

The issue is whether the government is legally-liable for the damages resulting therefrom. Does the Actauthorize us to hold that the Government is legally liable for that amount? If not, we must look elsewhere

for such authority, if it exists.

RULINGS

The Court was in full accord with the trial court that the accident was due to the negligence of thechauffeur.

o The Act was passed "in order that said questions may be decided."We have "decided"that theaccident was due solely to the negligence of the chauffeur, who was at the time an employee of the

defendant, and we have also fixed the amount of damages sustained by the plaintiff as a result of

the collision.

The Court also found that the trial court erred in calculating the amount to be paid for the plaintiffs lossof wages. There are two items questioned that constitute the P14,741 (the original total amount to be given

to the plaintiff):

o 1) P5,000 for permanent injuries. The Court found no justification to increase this amount.


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o 2) P2,666 for the loss of wages during the time the plaintiff was incapacitated from pursuing hisoccupation. According to records, the plaintiffs services as contractor amounted to P1,000 per

month. However, the trial court limited the actual time only to the time the plaintiff was confined

which was 2 months and 21 days. The Court said it was clear that the plaintiff was incapacitated

for 6 months, 2 of which was spent in the hospital and the remainder at his home. Thus, the

amount of damages is P18,075.

It was also established that the government can only be made liable for the acts of its officers andemployees when they act as special agents. The chauffeur of the ambulance was not a special agent. (See

citation on Supreme Court of Spain below).

The Court ruled that Legislature is responsible in finding whether the government is legally liable for theamount of damages.

o For the foregoing reasons, the judgment appealed from must be reversed, without costs in thisinstance. Whether the Government intends to make itself legally liable for the amount of damages

above set forth, which the plaintiff has sustained by reason of the negligent acts of one of its

employees, by legislative enactment and by appropriating sufficient funds therefor, we are not

called upon to determine. This matter rests solely with the Legislature and not with the courts.

CITATION OF CASES & OTHER LAWS:

As to the scope of legislative enactments permitting individuals to sue the state where the cause of action arises

out of either fort or contract, the rule is stated in 36 Cyc., 915, [what is this reference? a book? A manual?] thus:

By consenting to be sued a state simply waives its immunity from suit. It does not thereby concede its liability to

plaintiff, or create any cause of action in his favor, or extend its liability to any cause not previously recognized. It

merely gives a remedy to enforce a preexisting liability and submits itself to the jurisdiction of the court, subject to

its right to interpose any lawful defense.

Apfelbacher vs. State of Wisconsin:

It (removing states immunity from suit) simply gives authority to commence suit for the purpose of settling

plaintiff's controversies with the estate. Nowhere in the act is there a whisper or suggestion that the court or courts

in the disposition of the suit shall depart from well -established principles of law, or that the amount of damages is

the only question to be settled It did not pass upon the question of liability, but left the suit just where it would be

in the absence of the state's immunity from suit. (Murdock Grate Co. vs. Commonwealth, 152 Mass., 28; 24 N.E.,

854; 8 L. R. A., 399.)

Sipple vs. State (99 N. Y., 284):

Chief Justice Ruger remarks: "It must be conceded that the state can be made liable for injuries arising from the

negligence of its agents or servants, only by force of some positive statute assuming such liability.

Paragraph 5 ofarticle 1903 of the Civil Code reads:


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The state is liable in this sense when it acts through a special agent, but not when the damage should have been

caused by the official to whom properly it pertained to do the act performed, in which case the provisions of the

preceding article shall be applicable.

(Art. 1903 was cited in examining substantive laws touching the defendant's liability for the negligent acts of its

officers, agents, and employees)

Supreme Court of Spain in defining the scope of paragraph 5:

It follows therefrom that the state, by virtue of such provisions of law, is not responsible for the damages suffered

by private individuals in consequence of acts performed by its employees in the discharge of the functions

pertaining to their office, because neither fault nor even negligence can be presumed on the part of the state

(Supreme Court of Spain, January 7, 1898; 83 Jur. Civ., 24.)

That the Civil Code in chapter 2, title 16, book 4, regulates the obligations which arise out of fault or negligence;

and whereas in the first article thereof. No. 1902, where the general principle is laid down that where a person whoby an act or omission causes damage to another through fault or negligence, shall be obliged to repair the damage

so done, reference is made to acts or omissions of the persons who directly or indirectly cause the damage, the

following articles refers to this persons and imposes an identical obligation upon those who maintain fixed relations

of authority and superiority over the authors of the damage, because the law presumes that in consequence of such

relations the evil caused by their own fault or negligence is imputable to them. This legal presumption gives way to

proof, however, because, as held in the last paragraph of article 1903, responsibility for acts of third persons ceases

when the persons mentioned in said article prove that they employed all the diligence of a good father of a family to

avoid the damage, and among these persons, called upon to answer in a direct and not a subsidiary manner, are

found, in addition to the mother or the father in a proper case, guardians and owners or directors of an

establishment or enterprise, the state, but not always, except when it acts through the agency of a special agent,

doubtless because and only in this case, the fault or negligence, which is the original basis of this kind of

objections, must be presumed to lie with the state

That the responsibility of the state is limited by article 1903 to the case wherein it acts through a special agent

(and a special agent, in the sense in which these words are employed, is one who receives a definite and fixed

order or commission, foreign to the exercise of the duties of his office if he is a special official ) so that in

representation of the state and being bound to act as an agent thereof, he executes the trust confided to him. This

concept does not apply to any executive agent who is an employee of the acting administration and who on his own

responsibility performs the functions which are inherent in and naturally pertain to his office and which areregulated by law and the regulations." (Supreme Court of Spain, May 18, 1904; 98 Jur. Civ., 389, 390.)


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United States of America vs. Hon. Ruiz [date of SC decision]

136 SCRA 487

FACTS

BACKGROUNDER. The United States of America had a naval base in Subic, Zambales which wasprovided in the Military Bases Agreement between the Philippines and the United States.

o Sometime in May 1972, the US opened the submission of bids for the following projects: Repair offender system [what is this?] Repair typhoon damage to certain parts of the base

o Eligio de Guzman & Co., Inc. submitted bids. Subsequent thereto, the company received twotelegrams from the US requesting it to confirm its price proposals and the name of its bonding

company. The company in turn complied with such request.

o In June 1972, the company received a letter signed by William Collins (director, contractsDivision, Naval Facilities engineering Command, Southwest Pacific, Dept. of the Navy of the US)

that says that the company did not qualify to receive an award for the projects due to its previous

unsatisfactory performance on a repair contract for the sea wall at the boat landings of the US

Naval Station in Subic Bay.

o That the projects have been awarded to third parties [the present projects being bidded?]o Company [Eligio de Guzmans?] then sued the USA and the members of the Engineering

Command of the US Navy.

Complaint is to order the said company to perform the works on the projects and theevent that specific performance was no longer possible, to order the defendants to pay

damages. [I do not understand what you mean: the company wants the US to hire them

for this project?]

The company also seek for the issuance of a writ of preliminary injunction to retrain [totrain them again?] the defendants from entering into contracts with third parties.

o The defendants entered their special appearance for the purpose only of questioning thejurisdiction of this court over the subject matter of the complaint and the persons of defendants,

the subject matter of the complaint being acts and omissions of the individual defendants as agents

of defendant United States of America, a foreign sovereign which has not given her consent to this

suit or any other suit for the causes of action asserted in the complaint."

Subsequently the defendants filed a motion to dismiss the complaint which included anopposition to the issuance of the writ of preliminary injunction. The company opposed the

motion. The trial court denied the motion and issued the writ. The defendants moved

twice to reconsider but to no avail.

Hence, this petition [to the SC for certiorari? Was there no case filed to the CA?]

ISSUE

Whether or not the United States can invoke State Immunity [for what?]


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HELD

YES. The traditional role of the state immunity exempts a state from being sued inthe courts of another state without its consent or waiver. This rule is necessary

consequence of the principle of independence and equality of states. However, the

rules of international law are not petrified; they are continually and evolving and

because the activities of states have multiplied.

It has been necessary to distinguish them between sovereign and governmental actsand private, commercial and proprietary acts. The result is that state immunity now

extends only to sovereign and governmental acts.

A state may be descended to the level of an individual and can thus be deemed tohave tacitly given its consent to be sued only when it enters into business contracts. It

does not apply where the contracts relates the exercise of its sovereign function.

In this case, the projects are integral part of the naval base which is devoted tothe defense of both US and the Philippines indisputably, a function of the

government of highest order, they are not utilized for , nor dedicated to

commercial or business purposes.


21/44

Republic of the Philippines [represented?] by the Presidential Commission on Good Government (PCGG)

vs. Sandiganbayan (2nd

Division) and Roberto S. Benedicto [please put date of the SC decision here]

[please put SCRA entry here]

[please put ponente here]

FACTS

BACKGROUND/FIRST STAGE. PCGG issued writs placing under sequestration all business enterprises,entities and other propertiesreal and personalowned or registered in the name of private respondent

Benedicto.

o Among other things were his 227 shares in Negros Occidental Golf and Country Club (NOGCC)at P150, 000.00 /per.

o In Oct.1986, a corporate policy change was implemented assessing a monthly membership due atP150.00/share and in Mar 1987, it was changed to P250.00/share.

o PCGG did not pay the corresponding monthly membership fee which totaled to P2, 959,471.00.Due to these delinquent shares, an auction sale [by NOGCC?] was projected.

SECOND STAGE. In 1990, Republic and Benedicto entered into a Compromise Agreement, where PCGGagreed to lift the sequestration of the said 227 shares, [do the succeeding words refer to the reason why the

sequestration was lifted? Kindly rephrase them. The sentence is too long and is prone to being

misunderstood] that it is within Benedictos capacity to acquire the same out of his income from business

and exercise of profession, that subject shares could not have been ill- gotten and in 1992 it was approved

by Sandiganbayan.

THIRD STAGE. In February 1994, Benedicto filed a motion to release the shares and return to him or [?]payment of 227 shares at P150, 000.00/share by PCGG as part of the Compromise Agreement and it was

granted by Sandiganbayan but to be placed under the custody of its Clerk of Court.

o On 6 December 1994, Sandiganbayan directed PCGG to deliver the shares to the Clerk of Courtbut it failed to comply without showing any justifiable ground. Republic invokes state immunity

from suit. [there is a jump from the last two sentences: explain why PCGG becomes

Republic]

ISSUE

Whether or not Republics invocation of state immunity from suit is tenable.

RULING

NO, PCGG cannot be benefited of state immunity. One of the exceptions to the state immunity principle isthat the Government itself is the suitor, the state itself is the petitioner [explain the difference between state

and government].

When the State, through its duly authorized officers, takes the initiative in a suit against a private party, itdescends to the level of a private individual thereby waiving its right to immunity from suit. Also, byentering [into a] Compromise Agreement, the Republic stripped itself of the immunity. [This happens]

when the State enters into a contract, through its officers or agents, in furtherance of a legitimate aim and


22/44

purpose and pursuant to constitutional legislative authority [I do not understand why the latter phrase was

added. It appears like a sudden jump. Can you explain a bit more for the flow of ideas to come more

smoothly?].


23/44

Mobil Philippines Exploration Inc. v. Customs Arrastre Service and Bureau of Customs (1966)

18 SCRA 1120

[please put name of the ponente here]

FACTS

BACKGROUND. Four cases of rotary drill parts were shipped from abroad on S.S. "Leoville" sometimein November of 1962, consigned to Mobil Philippines Exploration, Inc., Manila.

o The shipment arrived at the Port of Manila on April 10, 1963, and was discharged to the custodyof the Customs Arrastre Service, the unit of the Bureau of Customs then handling arrastre

operations therein.

o The Customs Arrastre Service later delivered to the broker of the consignee three cases only of theshipment.

FIRST STAGE. On April 4, 1964 Mobil Philippines Exploration, Inc., filed a suit at the Court of FirstInstance of Manila against the Customs Arrastre Service and the Bureau of Customs to recover the value of

the undelivered case in the amount of P18,493.37 plus other damages.

o The defendants filed a motion to dismiss the complaint on the ground that not being persons underthe law, defendants cannot be sued.

o After plaintiff opposed the motion, the court dismissed the complaint on the ground that neitherthe Customs Arrastre Service nor the Bureau of Customs is suable.

SECOND STAGE. Plaintiff appealed to Us [to us or the US?] from the order of dismissal. [is this a case atthe CA?]

FINAL STAGE. [this is the case at bar at the SC, right?] Raised, therefore, in this appeal is the purely legalquestion of the defendants' suability under the facts stated. Appellant contends that not all government

entities are immuned from suit; that defendant Bureau of Customs as operator of the arrastre service at the

Port of Manila, is discharging proprietary functions and as such, can be sued by private individuals.

ISSUE

Whether or not State Immunity applies to the Customs of Arrastre Service and Bureau of Customs.

RULING

Yes. The Rules of Court, in Section 1, Rule 3, provide:SECTION 1. Who may be parties.Only natural or juridical persons or entities authorized by law may be

parties in a civil action.

Accordingly, a defendant in a civil suit must be (1) a natural person; (2) a juridical person or (3) an entityauthorized by law to be sued. Neither the Bureau of Customs nor (a fortiori) its function unit, the Customs

Arrastre Service, is a person. They are merely parts of the machinery of Government. 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 unit of the Bureau of Custom, set up under Customs

Administrative Order No. 8-62 of November 9, 1962 (Annex "A" to Motion to Dismiss, pp. 13-15, Record

an Appeal). It follows that the defendants herein cannot he sued under the first two above mentioned

categories of natural or juridical persons. [please explain in simple words why the Customs AS and BOC

are not considered persons]

The fact that a non-corporate government entity performs a function proprietary in nature does notnecessarily result in its being suable. If [is] said [that] non-governmental function is undertaken as an


24/44

incident to its governmental function, there is no waiver thereby of the sovereign immunity from suit

extended to such government entity.

The Bureau of Customs, to repeat, is part of the Department of Finance (Sec. 81, Rev. Adm. Code), withno personality of its own apart from that of the national government. Its primary function is governmental,

that of assessing and collecting lawful revenues from imported articles and all other tariff and customs

duties, fees, charges, fines and penalties (Sec. 602, R.A. 1937). To this function, arrastre service is a

necessary incident. Customs authorities and officers must see to it that the declaration tallies with the

merchandise actually landed. And this checking up requires that the landed merchandise be hauled from

the ship's side to a suitable place in the customs premises to enable said customs officers to make it, that is,

it requires arrastre operations. Clearly, therefore, although arrastre function may be deemed proprietary, it

is a necessary incident of the primary and governmental function of the Bureau of Customs, so that

engaging in the same does not necessarily render said Bureau liable to suit. For otherwise, it could not

perform its governmental function without necessarily exposing itself to suit. Sovereign immunity, granted

as to the end, should not be denied as to the necessary means to that end.

Regardless of the merits of the claim against it, the State, for obvious reasons of public policy, cannot besued without its consent. Plaintiff should have filed its present claim to the General Auditing Office, itbeing for money [is this the way it was written? It is not easy to understand] under the provisions of

Commonwealth Act 327, which state the conditions under which money claims against the Government

may be filed. It must be remembered that statutory provisions waiving State immunity from suit are strictly

construed and that waiver of immunity, being in derogation of sovereignty, will not be lightly inferred. (49

Am. Jur., States, Territories and Dependencies, Sec. 96, p. 314; Petty vs. Tennessee-Missouri Bridge

Com., 359 U.S. 275, 3 L. Ed. 804, 79 S. Ct. 785). From the provision authorizing the Bureau of Customs to

lease arrastre operations to private parties, We see no authority to sue the said Bureau in the instances

where it undertakes to conduct said operation itself. The Bureau of Customs, acting as part of the

machinery of the national government in the operation of the arrastre service, pursuant to express

legislative mandate and as a necessary incident of its prime governmental function, is immune from suit,

there being no statute to the contrary.


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DOH v. PPI (13 March 2007)

G.R. No. 169304

CARPIO MORALES,J.

Complete Case Title:

THE DEPARTMENT OF HEALTH, SECRETARY MANUEL M. DAYRIT, USEC. MA. MARGARITA

GALON and USEC. ANTONIO M. LOPEZ, Petitioners, vs. PHIL. PHARMAWEALTH, INC., Respondent.

FACTS

BACKGROUND. Phil. Pharmawealth, Inc. or PPI (respondent) is a domestic corporation engaged in thebusiness of manufacturing and supplying pharmaceutical products to government hospitals in the

Philippines.

o December 22, 1998: then Secretary of Health Alberto G. Romualdez, Jr. issued AdministrativeOrder (A.O.) No. 27 outlining the guidelines and procedures on the accreditation of government

suppliers for pharmaceutical products.

o In 2000, A.O. No. 27 was later amended by A.O. No. 10 providing for additional guidelines foraccreditation of drug suppliers aimed at ensuring that only qualified bidders can transact business

with DOH. It also specified that Only products accredited by the Committee shall be allowed to

be procured by the DOH and all other entities under its jurisdiction.

o May 9, 2000 and May 29, 2000 respondent submitted to petitioner DOH a request for theinclusion of additional items in its list of accredited drug products, including the antibiotic

"Penicillin G Benzathine."

o September 2000, DOH, through petitioner Antonio M. Lopez, issued an Invitation for Bids for theprocurement of 1.2 million units vials of Penicillin G Benzathine. Despite the lack of response

from DOH regarding respondents request for inclusion of additional items in its list of accredited

products, respondent submitted its bid for the Penicillin G Benzathine contract.

o October 11, 2000, only two companies participated, with PPI submitting the lower bid at P82.24per unit, compared to Cathay/YSS Laboratories (YSS) bid of P95.00 per unit. In view, however,

of the non- accreditation of PPIs Penicillin G Benzathine product, the contract was awarded to

YSS.

FIRST CASE [with the RTC of Pasig]. PPI filed a complain for injunction, mandamus and damages withprayer for the issuance of a writ of preliminary injunction and/or temporary restraining order with the

Regional Trial Court of Pasig City praying, inter alia, that the trial court "nullify the award of the Penicillin

G Benzathine contract to YSS Laboratories, Inc. and direct DOH, defendant Romualdez, defendant Galon

and defendant Lopez to declare plaintiff Pharmawealth as the lowest complying responsible bidder for theBenzathine contract, and that they accordingly award the same to plaintiff company" and "adjudge

defendants Romualdez, Galon and Lopez liable, jointly and severally to plaintiff, for [the therein specified

damages]."

o In their Comment, DOH Secretary Alberto Romualdez, Jr. (later succeeded by Secretary ManuelM. Dayrit), and individual petitioners Undersecretaries Margarita Galon and Antonio Lopez

argued for the dismissal of the complaint for lack of merit in view of the express reservation made

by petitioner DOH to accept or reject any or all bids without incurring liability to the bidders, they

positing that government agencies have such full discretion.

o Petitioners subsequently filed a Manifestation and Motion (motion to dismiss) praying for theoutright dismissal of the complaint based on the doctrine of state immunity. Additionally, they

alleged that respondents representative was not duly authorized by its board of directors to file the

complaint.


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o PPI argued that the doctrine of state immunity is not applicable considering that individualpetitioners are being sued both in their official and personal capacities, hence, they, not the state,

would be liable for damages.

SECOND CASE [with the CA]. By Order of December 8, 2003, the trial court denied petitioners motion todismiss. Their motion for reconsideration having been denied, petitioners filed a petition for certiorari with

the Court ofAppeals, before which they maintained that the suit is against the state.

o By the assailed Decision of May 12, 2005, the Court of Appeals affirmed the trial courts Order.And by Resolution of August 9, 2005, it denied petitioners motion for reconsideration.

FINAL CASE [with the SC]. This instant petition for review which raises the sole issue of whether the Courtof Appeals erred in upholding the denial of petitioners motion to dismiss.

ISSUE

Does the doctrine of state immunity (from suit) apply to the DOH and its officials in the case at bar?RULING [AND EXPLANATIONS]

No. SC affirmed the ruling of the CA. The suability of a government official depends on:

o whether the official concerned was acting within his official or jurisdictional capacity (theConstitution itself assures the availability of judicial review in this case, i.e., SC can check

whether the act was done within his official capacity; this is in Section 1, Article VIII of the

Constitution); the official concerned who should be impleaded as the proper party (not the DOH,

in this case); this ruling may apply in this case at the petitioners were accused of grave abuse of

discretion in their official capacity.

o whether the acts done in the performance of official functions will result in a charge or financialliability against the government.

Why does the defense of immunity not apply in this case although DOH is an unincorporated agency of thegovernment?

o for the only causes of action directed against it are preliminary injunction and mandamus. UnderSection 1, Rule 5823 of the Rules of Court, preliminary injunction may be directed against a party

or a court, agency or a person.

o Moreover, the defense of state immunity from suit does not apply in causes of action which do notseek to impose a charge or financial liability against the State.

More on the doctrine of state immunity embodied in Section 3, Article XVI of the 1987 Constitution:o This is one of the generally accepted principles of international law, which we have adopted as

part of the law of the lando While the doctrine of state immunity appears to prohibit only suits against the state without its

consent, it is also applicable to complaints filed against officials of the state for acts allegedly

performed by them in the discharge of their duties.

o The suit is regarded as one against the state where satisfaction of the judgment against the officialswill require the state itself to perform a positive act [say, through a legislative act], such as the

appropriation of the amount necessary to pay the damages awarded against them.

Important judicial precedents on state immunity [key ideas are underlined, although most of the text wasquoted for your general comprehension of the entire matter]:

o Shauf v. Court of Appeals: It is a different matter where the public official is made to account inhis capacity as such for acts contrary to law and injurious to the rights of plaintiff Inasmuch as

the State authorizes only legal acts by its officers, unauthorized acts of government officials or

officers are not acts of the State, and an action against the officials or officers by one whose rights


27/44

have been invaded or violated by such acts, for the protection of his rights, is not a suit against the

State within the rule of immunity of the State from suit. In the same tenor, it has been said that an

action at law or suit in equity against a State officer or the director of a State department on the

ground that, while claiming to act for the State, he violates or invades the personal and property

rights of the plaintiff, under an unconstitutional act or under an assumption of authority which he

does not have, is not a suit against the State within the constitutional provision that the State may

not be sued without its consent.

o The rationale for this ruling is that the doctrine of state immunity cannot be used as aninstrument for perpetrating an injustice.

As a summary, applying these elaboration of the doctrine of state immunity in the case at bar:o Hence, the rule does not apply where the public official is charged in his official capacity for acts

that are unauthorized or unlawful and injurious to the rights of others. Neither does it apply where

the public official is clearly being sued not in his official capacity but in his personal capacity,

although the acts complained of may have been committed while he occupied a public position.

o In the present case, suing individual petitioners in their personal capacities for damages inconnection with their alleged act of "illegal[ly] abus[ing] their official positions to make sure thatplaintiff Pharmawealth would not be awarded the Benzathine contract [which act was] done in bad

faith and with full knowledge of the limits and breadth of their powers given by law" is

permissible, in consonance with the foregoing principles. For an officer who exceeds the power

conferred on him by law cannot hide behind the plea of sovereign immunity and must bear the

liability personally.

o But please take note of this last sentence of the ruling: These are matters of evidence which shouldbe presented and proven at the trial.


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Torio v. Fontanilla (23 October 1978)

G.R. No. L-29993

Complete Title

LAUDENCIO TORIO, ET. AL. vs. ROSALINA, ANGELINA, LEONARDO,EDUARDO, ARTEMIO,

ANGELITA,ANITA, ERNESTO, NORMA,VIRGINIA, REMEDIOS and ROBERTO, all surnamed

FONTANILLA, and THE HONORABLE COURT OF APPEALS

FACTS

BACKGROUND: On October 21, 1958, the Municipal Council of Malasiqui, Pangasinan, passedResolution No. 159 whereby "it resolved to manage the 1959 Malasiqui town fiesta celebration on January

21, 22, and 23, 1959." Resolution No. 182 was also passed creating the "1959 Malasiqui 'Town Fiesta

Executive Committee" which in turn organized a sub-committee on entertainment and stage. Jose

Macaraeg supervised the construction of 2 stages, one for the "zarzuela" and the other for cancionan. The

"zarzuela" began but before the dramatic part of the play was reached, the stage collapsed and Vicente

Fontanilla who was at the rear of the stage was pinned underneath. Fontanilia was taken to San Carlos

General Hospital where he died in the afternoon of the following day.

o [where does Torio come in the picture?] FIRST CASE: Heirs of Fontanilla filed a complaint with the First Instance of Manila to recover damages

against the Municipality of Malasiqui, the Municipality Council, and all individual members of the

Municipality Council.

o DEFENSE OF THE MUNICIPALITY: They are duly and organized public corporation whoperforms sovereign functions. Holding town fiesta was an exercise of governmental functionsfrom which no liability can arise to answer for the negligence of any of its agents.

o DEFENSE OF THE COUNCILORS: They merely acted as agents of the municipality in carryingout the municipal ordinance providing for the management of the town fiesta celebration and as

such they are likewise not liable for damages as the undertaking was not one for profit;

furthermore, they had exercised due care and diligence in implementing the municipal ordinance.

o RTC RULING: Executive Committee appointed by the municipal council had exercised duediligence. The defendants were not liable for damages for the death of Vicente Fontanilla.

SECOND CASE: Fontanilla appealed to CA. CA reversed RTCs decision and ordered all the defendant-appellees to pay jointly and severally the heirs of Fontanilla.

FINAL CASE. Petition for review of the decision of the Court of Appeals.ISSUES

1. Whether or not the municipality was exercising its governmental functions in holding the celebration of thetown fiesta, therefore immuned from suit.

2. Whether or not Councilors be held liable for the death of FontanillaRULING

1. NO. We hold that the holding of the town fiesta in 1959 by the municipality of Malsiqui Pangasinan was an

exercise of a private or proprietary function of the municipality.

Under Philippine laws municipalities are political bodies that are corporate in nature and as such are endowed with


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the faculties of municipal corporations to be exercised by and through their respective municipal governments in

conformity with law, and in their proper corporate name, they may inter alia sue and be sued, and contract and be

contracted with.

Powers of Municipality are twofold in character:

1. Governmentalthose exercised by the corporation in administering the powers of the state and promotingthe public welfare.

2. Corporate, Private, Proprietary - exercised for the special benefit and advantage of the community andinclude those which are ministerial private and corporate.

Distinction of powers becomes important for purposes of determining the liability of the municipality for the acts of

its agents which result in an injury to third persons.

Holding a fiesta even if the purpose is to commemorate a religious or historical event of the town is in essence an

act for the special benefit of the community and not for the general welfare of the public performed in

pursuance of a policy of the state. The mere fact that the celebration, as claimed was not to secure profit or gain but

merely to provide entertainment to the town inhabitants is not a conclusive test. For instance, the maintenance ofparks is not a source of income for nonetheless it is private undertaking as distinguished from the maintenance of

public schools, jails, and the like which are for public service.

It follows that under the doctrine ofrespondent superior(Respondeat superior(Latin: "let the master answer is

alegal doctrinewhich states that, in many circumstances, anemployeris responsible for the actions of employees

performed within the course of their employment.)petitioner-municipality is to be held liable for damages for the

death of Vicente Fontanilia if that was attributable to the negligence of the municipality's officers, employees, or

agents. The Court of Appeals found and held that there was negligence.

2. NO. We absolve the municipal councilors from any liability for the death of Vicente Fontanilla. The records do

not show that said petitioners directly participated in the defective construction of the "zarzuela" stage or that they

personally permitted spectators to go up the platform.

A corporation has a personality, separate and distinct from its officers, directors, or persons composing itand the

latter are not as a rule co-responsible in an action for damages for tort or negligence culpa aquilla (Aquasi-

delictorculpa aquilianais a separate legal institution under the Civil Code, with a substantivity all its own, and

individuality that is entirely apart and independent from a delict or crime.) committed by the corporation's

employees or agents unless there is a showing of bad faith or gross or wanton negligence on their part.

The Court of Appeals in its decision now under review held that the celebration of a town fiesta by the Municipality

of Malasiqui was not a governmental function. We upheld that ruling. The legal consequence thereof is that the

Municipality stands on the same footing as an ordinary private corporation with the municipal council acting as its

board of directors.

Officers of a corporation 'are not held liable for the negligence of the corporation merely because of their official

relation to it, but because of some wrongful or negligent act by such officer amounting to a breach of duty which

resulted in an injury ... To make an officer of a corporation liable for the negligence of the corporation there must

have been upon his part such a breach of duty as contributed to, or helped to bring about, the injury; that is to say,

he must be a participant in the wrongful act. ... (pp. 207-208,Ibid.)
http://en.wikipedia.org/wiki/Latinhttp://en.wikipedia.org/wiki/Legal_doctrinehttp://en.wikipedia.org/wiki/Legal_doctrinehttp://en.wikipedia.org/wiki/Legal_doctrinehttp://en.wikipedia.org/wiki/Employerhttp://en.wikipedia.org/wiki/Employerhttp://en.wikipedia.org/wiki/Employerhttp://en.wikipedia.org/wiki/Employerhttp://en.wikipedia.org/wiki/Legal_doctrinehttp://en.wikipedia.org/wiki/Latin


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Municipality of San Fernando, La Union vs. Hon. Judge Romeo N. Firme [April 8, 1991]

G.R. No. L-52179 [190 SCRA 206]

FACTS

BACKGROUND. At about 7 o'clock in the morning of December 16, 1965, a collision occurred involvinga passenger jeepney driven by Bernardo Balagot 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 of the

Municipality of San Fernando, La Union and driven by Alfredo Bislig. Several passengers of the jeepney

including Laureano Bania Sr. died and four others suffered from physical injuries.

FIRST STAGE. On December 11, 1966, the private respondents instituted a complaint for damages againstthe Nieveras and Balagot, which was docketed Civil Case No. 2183 in the Court of First Instance of La

Union, Branch I, San Fernando, La Union. However, the aforesaid defendants filed a Third Party

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

SECOND STAGE. Thereafter, the case was subsequently transferred to Branch IV, presided over byrespondent judge and was subsequently docketed as Civil Case No. 107-Bg. By virtue of a trial court order

dated May 7, 1975, the private respondents amended the complaint wherein the petitioner and its regular

employee, Alfredo Bislig were impleaded for the first time as defendants. Petitioner filed its answer and

raised affirmative defenses particularly as the non-suability of the State.

o The petitioner also told that respondent trial court committed grave abuse of discretion when itdeferred and failed to resolve the defense of non-suability of the State amounting to lack of

jurisdiction in a motion to dismiss. The respondent judge deferred the resolution of the defense of

non-suability of the State amounting to lack of jurisdiction until trial.

ISSUE Whether or not the Municipality of San Fernando, La Union was liable for the torts committed by its

employee, who was acting in behalf of the municipality? (This case had only one issue and that is the

issue of suability. The doctrine of non-suability of the State is expressly provided for in Article XVI,

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

TORTS and suability of the state dominated in the case.)

RULING

No. The Court of Appeals held that the municipality cannot be held liable for the torts committed by itsregular employee, who was then engaged in the discharge of governmental functions. The Court ruled that

the driver of the dump truck was performing duties or tasks pertaining to his office. As emphasized in the

case of Torio vs. Fontanilla, the distinction of powers becomes important for purposes of determining the

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

It has already been remarked that municipal corporations are suable because their charters grant them thecompetence to sue and be sued. Nevertheless, they are generally not liable for torts committed by them in

the discharge of governmental functions and can be held answerable only if it can be shown that they were

acting in a proprietary capacity. In permitting such entities to be sued, the State merely gives the claimant

the right to show that the defendant was not acting in its governmental capacity when the injury was

committed or that the case comes under the exceptions recognized by law.

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


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The Court stressed in the case ofPalafox, et.al.vs.Province of Ilocos Norte, the District Engineer, and theProvincial Treasurer that "the construction or maintenance of roads in which the truck and the driver

worked at the time of the accident were admittedly governmental activities."

In the case at bar, the respondent judge deferred the resolution of the defense of non-suability of the stateamounting to lack of jurisdiction until trial. The Court was also convinced that the respondent 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 jurisdiction when it ruled on the issue of liability. The doctrine of non-suability of

the State is expressly provided for in Article XVI, Section 3 of the Constitution, to wit: "the State may not

be sued without its consent." The general rule is that the State may not be sued exceptwhen it gives

consent to be sued. Consent takes the form of express or implied consent. Express consent may be

embodied in a general law or a special law. A special law may be passed to enable a person to sue the

government for an alleged quasi-delict, as in Merritt v. Government of the Philippine Islands. Consent is

implied when the government enters into business contracts, thereby descending to the level of the other

contracting party, and also when the State files a complaint, thus opening itself to a counterclaim.


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Municipality of Makati v. Court of Appeals (1 October 1990)

190 SCRA 207

Cortes, J

FACTS

BACKGROUND. [There is no story behind this. See the actual case. ] FIRST STAGE. The Philippine State exercised its power of eminent domain (the power of the state to

rightfully take away lands of private owners for public use and justly compensate them) on the property of

Arceli P. Jo.

o The value of the land was duly appraised by RTC and it was concluded that the land had anappraised value of Php 5,291,666.00 and the petitioners were obliged to pay the remaining

balance, having been able to pay Php 338,160.00 [by the municipality of Makati]. They are the

only indebted party in the case.

o The petitioner for 3 years had been refusing to pay the rightful amount to the respondent.Petitioners contended that the second bank account it has in PNB is an account that has been

opened for public funds and it is a well-settled rule that public funds are not subject to levy andexecution.

SECOND & THIRD STAGES. The petitioner claims that the CA erred in dismissing the petition forreview of the decision rendered by the RTC ordering the payment of the appraised value of the property.

Hence, the present petition for review.

ISSUE

Whether or not the Municipality of Makati erred in not paying the private respondents. Can Makati rightfully claim that they cannot use the money in their second bank account as they are

immuned from liability from suits? [This is a case regarding EMINENT DOMAIN, the power of the state

to rightfully take a property of a private individual. It is related to state immunity because the Municipality

of Makati said that their second bank account cannot be subject to writ of execution and levy]

RULING

Makati has the legal obligation to pay the private petitioners a just compensation. The states power ofeminent domain should be exercised within the bounds of fair play and justice.

They said that their second bank

Consolidated Cases in Political Law

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