V. THE PHILIPPINES AS A STATE

1. Republic vs. Santos III685 SCRA 51 (Novemeber 12, 2012)

Bersamin, J.

Facts:

Respondent Arcadio Ivan Santos III together with Arcadio Santos Jr. owned parcels of land in the City of Paranaque which were both adjacent to the Paranaque River. In 1998, they sought for the application for land registration of a property that had been formed through accretion and had been in their joint, open, notorious, public, continuous and adverse possession for more than 30 years. The City of Paranaque opposed the application stating that the property was needed for its flood control program and that the property could not be registered in favor of the Santos' for the reason that the property was part of the Paranaque river bed that had dried up, not a result of accretion.

The RTC decided in favor of the Santos' and granted the title to the 1045 sqm. property as L-4998-B, the City of Paranaque elevated the case to the Court of Appeals but the same decision was reached, both courts deemed there was accretion based on Art. 457 (To the owners of the lands adjoining the bank of rivers belong the accretion which they gradually receive from the effects of the current of the waters.) and that acquisitive prescription applied. Thus the case was appealed to the Supreme Court with the following issues:

Issues:

Whether or not Article 457 of the Civil Code was applicable herein?

Whether or not respondents could claim the property by virtue of acquisitive prescription?

Ruling:

1st issue: NO. City of Paranaque submits that the application by both lower courts of Article 457 of the Civil Code was erroneous in the face of the fact that respondents’ evidence did not establish accretion, but instead the drying up of the Parañaque River. The petitioner's submission is correct. Respondents as the applicants for land registration carried the burden of proof to establish the merits of their application by a preponderance of evidence, by which is meant such evidence that is of greater weight, or more convincing than that offered in opposition to it. They would be held entitled to claim the property as their own and apply for its registration under the Torrens system only if they established that, indeed, the property was an accretion to their land.

Accretion is the process whereby the soil is deposited along the banks of rivers.12 The deposit of soil, to be considered accretion, must be: (a) gradual and imperceptible; (b) made through the effects of the current of the water; and (c) taking place on land adjacent to the banks of rivers. Accordingly, respondents should establish the concurrence of the elements of

accretion to warrant the grant of their application for land registration. However, respondents did not discharge their burden of proof. They did not show that the gradual and imperceptible deposition of soil through the effects of the current of the river had formed Lot 4998-B. Instead, their evidence revealed that the property was the dried-up river bed of the Parañaque River, leading both the RTC and the CA to themselves hold that Lot 4998-B was “the land which was previously part of the Parañaque River xxx (and) became an orchard after it dried up.”

The RTC and the CA grossly erred in treating the dried-up river bed as an accretion that became respondents’ property pursuant to Article 457 of the Civil Code. That land was definitely not an accretion. The process of drying up of a river to form dry land involved the recession of the water level from the river banks, and the dried-up land did not equate to accretion, which was the gradual and imperceptible deposition of soil on the river banks through the effects of the current. In accretion, the water level did not recede and was more or less maintained. Hence, respondents as the riparian owners had no legal right to claim ownership of Lot 4998-B.

The State exclusively owned Lot 4998-B and may not be divested of its right of ownership. Article 502 of the Civil Code expressly declares that rivers and their natural beds are public dominion of the State. It follows that the river beds that dry up, like Lot 4998-B, continue to belong to the State as its property of public dominion, unless there is an express law that provides that the dried-up river beds should belong to some other person.

2nd Issue: NO. The relevant legal provision is Section 14(1) of Presidential Decree

No. 1529 (Property Registration Decree), which pertinently states:

Section 14. Who may apply. —The following persons may file in the proper [Regional Trial Court] an application for registration of title to land, whether personally or through their duly authorized representatives:

(1) Those who by themselves or through their predecessors-ininterest have been in open, continuous, exclusive and notorious possession and occupation of alienable and disposable lands of the public domain under a bona fide claim of ownership since June 12,1945, or earlier.

Under Section 14(1), then, applicants for confirmation of imperfect title must prove the following, namely: (a) that the land forms part of the disposable and alienable agricultural lands of the public domain; and (b) that they have been in open, continuous, exclusive, and notorious possession and occupation of the land under a bona fide claim of ownership either since time immemorial or since June 12, 1945.

The RTC apparently reckoned respondents’ period of supposed possession to be “more than thirty years” from the fact that “their predecessors in interest are the adjoining owners of the subject parcel of land.” Yet, its decision nowhere indicated what acts respondents had performed showing their possession of the property “continuously, openly, publicly and adversely” in that length of time. The decision mentioned only that they had paid realty taxes and had caused the survey of the property to be made. That, to us, was not enough to justify the foregoing findings, because, firstly, the payment of realty taxes did not conclusively prove the payor’s ownership of the land the taxes were paid for,25 the tax declarations and payments being mere indicia of a claim of ownership;26 and, secondly, the causing of surveys of the property involved was not itself an of continuous, open, public and adverse possession.

Yet, even conceding, for the sake of argument, that respondents possessed Lot 4998-B for more than thirty years in the character they claimed, they did not thereby acquire the land by prescription or by other means without any competent proof that the land was already declared as alienable and disposable by the Government. Absent that declaration, the land still belonged to the State as part of its public dominion. Article 419 of the Civil Code distinguishes property as being either of public dominion or of private ownership. Article 420 of the Civil Code lists the properties considered as part of public dominion, namely: (a) those intended for public use, such as roads, canals, rivers, torrents, ports and bridges constructed by the State, banks, shores, roadsteads, and others of similar character; and (b) those which belong to the State, without being for public use, and are intended for some public service or for the development of the national wealth. As earlier mentioned, Article 502 of the Civil Code declares that rivers and their natural beds are of public dominion.

To prove that the land subject of an application for registration is alienable, an applicant must conclusively establish the existence of a positive act of the Government, such as a presidential proclamation, executive order, administrative action, investigation reports of the Bureau of Lands investigator, or a legislative act or statute, not a mere survey plan notation as depended on by respondent. Until then, the rules on confirmation of imperfect title do not apply.

Under the Regalian doctrine, all lands not otherwise appearing to be clearly within private ownership are presumed to belong to the State. No public land can be acquired by private persons without any grant, express or implied, from the Government. It is indispensable, therefore, that there is a showing of a title from the State. Occupation of public land in the concept of owner, no matter how long, cannot ripen into ownership and be registered as a title.

WHEREFORE, the Court REVERSES and SETS ASIDE the decision of the Court of Appeals promulgated on May 27, 2003; DISMISSES the application for registration of Arcadio C. Santos, Jr. and Arcadio Ivan S. Santos III respecting Lot 4998-B with a total area of 1,045 square meters, more or less, situated in Barangay San Dionisio, Parañaque City, Metro Manila; and

DECLARES Lot 4998-B as exclusively belonging to the State for being part of the dried-up bed of the Paranaque River.

2) G.R. No. L-13250 October 29, 1971THE COLLECTOR OF INTERNAL REVENUE, petitioner, vs. ANTONIO CAMPOS RUEDAFERNANDO, J.: EN BANC

Facts: The collector of internal revenue (CIR)is assessing Campos Rueda for deficiency of taxes. Capos Rueda is the administrator of the estate of Estrella Soriano Vda. de Cerdeira. Cerdeira is a Spanish national and a resident of Tangier, Morocco(this is a small territory somewhere). Campos Rueda seeks exemption under sec122 of the NIRC of 1939 which provides exemptions to foreign nationals of estate tax in PH with regards to intangible properties when the law in the foreign country where decedent is residing does not tax Filipino as well.

Ito ung relevant provision ng 122: "That no tax shall be collected under this Title in respect of intangible personal property (a) if the decedent at the time of his death was a resident of a foreign country which at the time of his death did not impose a transfer tax or death tax of any character in respect of intangible person property of the Philippines not residing in that foreign country, or (b) if the laws of the foreign country of which the decedent was a resident at the time of his death allow a similar exemption from transfer taxes or death taxes of every character in respect of intangible personal property owned by citizens of the Philippines not residing in that foreign country."

CIR denied the exemption saying “no reciprocity”. Campos Rueda ask for reconsideration, again denied on the grounds that there was no reciprocity [with Tangier, which was moreover] a mere principality, not a foreign country.

Elevated to CTA which ruled “expression "foreign country", used in the last proviso of Section 122 of the National Internal Revenue Code, refers to a government of that foreign power which, although not an international person in the sense of international law, does not impose transfer or death upon intangible person properties of our citizens not residing therein”

(hindi relevant)Appealed to SC. SC remanded to CTA to proved that Tangier law provides exemption to Filipino not residing there. It was proved.

Raised again to SC on the issue bellow.

Issue: whether or not the acquisition of internal personality is a condition sine qua non to Tangier being considered a "foreign country". (kinopy ko lang yan sa full text di ko alam ung internal personality – baka same sa international personality as ruled by CTA)

HELD: SC, affirm CTA. Reciprocity should apply, thus exempt from estate tax

It does not admit of doubt that if a foreign country is to be identified with a state, it is required in line with Pound's formulation that it be a politically organized sovereign community independent of outside control bound by penalties of nationhood, legally supreme within its territory, acting through a government functioning under a regime of law. It is thus a sovereign person with the people composing it viewed as an organized corporate society under a government with the legal competence to exact obedience to its commands. It

has been referred to as a body-politic organized by common consent for mutual defense and mutual safety and to promote the general welfare. Correctly has it been described by Esmein as "the juridical personification of the nation." This is to view it in the light of its historical development. The stress is on its being a nation, its people occupying a definite territory, politically organized, exercising by means of its government its sovereign will over the individuals within it and maintaining its separate international personality. Laski could speak of it then as a territorial society divided into government and subjects, claiming within its allotted area a supremacy over all other institutions. McIver similarly would point to the power entrusted to its government to maintain within its territory the conditions of a legal order and to enter into international relations. With the latter requisite satisfied, international law do not exact independence as a condition of statehood.

Case cited by SC to support i ts decision:

In Collector of Internal Revenue v. De Lara SC held There can be no doubt that California as a state in the American Union was lacking in the alleged requisite of international personality. Nonetheless, it was held to be a foreign country within the meaning of Section 122 of the National Internal Revenue Code.

 in Kiene v. Collector of Internal Revenue, This Court did commit itself to the doctrine that even a tiny principality, that of Liechtenstein, hardlyan international personality in the traditional sense, did fall under this exempt category

3) Shipside, Inc. vs. Court of AppealsG.R. No. 143377.  February 20, 2001

MELO, J.:

OCT No. 0-381 was issued in favor of Rafael Galvez over four parcels of land. Lots No. 1&4 were conveyed by Rafael Galvez in favor of Filipina Mamaril, et al. who sold the same in favor of Lepanto Consolidated Mining Company.

Unknown to Lepanto Consolidated Mining Company, the CFI of La Union issued an Order declaring OCT No. 0-381 issued in the name of Rafael Galvez, null and void, and ordered the cancellation thereof.

Lepanto Consolidated Mining Company sold to herein petitioner Lots No. 1 & 4. TCT No. T-5710 was issued in favor of the petitioner which starting since then exercised proprietary rights over Lots No. 1 & 4. 

Rafael Galvez filed his motion for reconsideration against the order issued by the trial court declaring OCT No. 0-381 null and void.  The motion was denied. On appeal, the CA ruled in favor of the Republic of the Philippines. The decision became final and executory.The trial courtissued a writ of execution of the judgment which was served on the Register of Deeds.

Twenty four long years thereafter, on January 14, 1999, the Office of the Solicitor General received a letter dated January 11, 1999 from Mr.  Victor G.  Floresca, Vice-President, John Hay Poro Point Development Corporation, stating that the aforementioned orders and decision of the trial court in L. R. C. No. N-361 have not been executed by the Register of Deeds, San Fernando, La Union despite receipt of the writ of execution.

On April 21, 1999, the Office of the Solicitor General filed a complaint for revival of judgment and cancellation of titles entitled, “Republic of the Philippines, Plaintiff, versus Heirs of Rafael Galvez, represented by Teresita Tan, Reynaldo Mamaril, Elisa Bustos, ErlindaBalatbat, Regina Bustos, Shipside

Incorporated and the Register of Deeds of La Union, Defendants.”

Shipside, Inc. filed its Motion to Dismiss, based on the grounds that the plaintiff is not the real party-in-interest because the real property, allegedly part of Camp Wallace (Wallace Air Station), were under the ownership and administration of the Bases Conversion Development Authority (BCDA) under Republic Act No. 7227; that the plaintiff’s cause of action is barred by prescription; and that twenty-five years having lapsed since the issuance of the writ of execution, no action for revival of judgment may be instituted because under Article 1144 of the Civil Code, such action may be brought only within ten (10) years from the time the judgment had been rendered.

The Solicitor General argues that the State’s cause of action in the cancellation of the land title issued to petitioner’s predecessor-in-interest is imprescriptible because it is included in Camp Wallace, which belongs to the government.

ISSUE:Whether or not the Republic of the Philippines can maintain

the action for revival of judgment herein.

HELD:NO. While it is true that prescription does not run against

the State, the same may not be invoked by the government in this case since it is no longer interested in the subject matter.  While Camp Wallace may have belonged to the government at the time Rafael Galvez’s title was ordered cancelled, the same no longer holds true today.Section 2 of Proclamation No. 216 provides that areas covered by the Wallace Air Stationare hereby transferred to the Bases Conversion Development Authority.

With the transfer of Camp Wallace to the BCDA, the government no longer has a right or interest to protect.  Consequently, the Republic is not a real party in interest and it may not institute the instant action.  Nor may it raise the defense of imprescriptibility, the same being applicable only in cases where the government is a party in interest.

Being the owner of the areas covered by Camp Wallace, it is the Bases Conversion and Development Authority, not the Government, which stands to be benefited if the land covered by TCT No.  T-5710 issued in the name of petitioner is cancelled.

It may not be amiss to state at this point that the functions of government have been classified into governmental or constituent and proprietary or ministrant.  While public benefit and public welfare, particularly, the promotion of the economic and social development of Central Luzon, may be attributable to the operation of the BCDA, yet it is certain that the functions performed by the BCDA are basically proprietary in nature.  The promotion of economic and social development of Central Luzon, in particular, and the country’s goal for enhancement, in general, do not make the BCDA equivalent to the Government.  Other corporations have been created by government to act as its agents for the realization of its programs, the SSS, GSIS, NAWASA and the NIA, to count a few, and yet, the Court has ruled that these entities, although performing functions aimed at promoting public interest and public welfare, are not government-function corporations invested with governmental attributes.  It may thus be said that the BCDA is not a mere agency of the Government but a corporate body performing proprietary functions.

4) MELCHORA CABANAS vs. FRANCISCO PILAPIL G.R. No. L-25843 July 25, 1974

FERNANDO, J.:

Facts: Florentino Pilapil, deceased, left an insurance having his

child, Millian Pilapil, as the beneficiary and authorized his brother,

Francisco Pilapil, to act as trustee during his daughter’s minority.

The lower court decided to give the mother of the child, Melchora

Cabanas, the right to act as trustee citing the appropriate

provisions in the Civil Code and the consideration of the child’s

welfare. The defendant appealed for the case. He claims the

retention of the amount in question by invoking the terms of the

insurance policy. He is the rightful trustee of the insurance policy.

Issue: Whether the mother should be entitled to act as a trustee

of a minor beneficiary of the proceeds of an insurance policy from

the deceased.

Ruling: With the provisions Articles 320 and 321 of the Civil

Code as basis, the decision is affirmed with costs against the

defendant-appellant, Francisco Pilapil. Article 320 states that “the

father, or in his absence the mother, is the legal administrator of

the property pertaining to the child under parental authority. If the

property is worth more than two thousand pesos, the father or

mother shall give a bond subject to the approval of the Court of

First Instance." And Article 321 states that "The property which

the child has acquired or may acquire with his work or industry,

or by any lucrative title, belongs to the child in ownership, and in

usufruct to the father or mother under whom he is under parental

authority and whose company he lives.”

With the added condition that the child stays with the mother, not

the uncle, without any evidence of lack of maternal care, the

decision arrived at stand the test of the strictest scrutiny. The

appealed decision is supported by another rational consideration.

It is reinforced by its adherence to the concept that the judiciary,

as an agency of the State acting as parens patriae, is called upon

whenever a pending suit of litigation affects one who is a minor to

accord priority to his best interest This prerogative of parens

patriae is inherent in the supreme power of every State, whether

that power is lodged in a royal person or in the legislature, and

has no affinity to those arbitrary powers which are sometimes

exerted by irresponsible monarchs to the great detriment of the

people and the destruction of their liberties." There is a

constitutional provision vitalizing this concept that "The State

shall strengthen the family as a basic social institution." If, as the

Constitution so wisely dictates, it is the family as a unit that has to

be strengthened, it does not admit of doubt that even if a stronger

case were presented for the uncle, still deference to a

constitutional mandate would have led the lower court to decide

as it did.

The trust, insofar as it is in conflict with the above quoted

provision of law, is pro tanto null and void. In order, however, to

protect the rights of the minor, Millian Pilapil, the plaintiff should

file an additional bond in the guardianship proceedings, Sp. Proc.

No. 2418-R of this Court to raise her bond therein to the total

amount of P5,000.00."

5) ANASTACIO LAUREL, petitioner, vs. ERIBERTO MISA, respondent.

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

EN BANC R E S O L U T I O N

FACTS:

FACTS: The accused was charged with treason. During the Japanese occupation, the accused adhered to the enemy by giving the latter aid and comfort. He claims that he cannot be tried for treason since his allegiance to the Philippines was suspended at that time. Also, he claims that he cannot be tried under a change of sovereignty over the country since his acts were against the Commonwealth which was replaced already by the Republic.

ISSUE: Whether or not the accused is guilty of treason.

HELD:

YES. A citizen or subject owes, not a qualified and temporary, but an absolute and permanent allegiance, which consists in the obligation of fidelity and obedience to his government or sovereign; and that this absolute and permanent allegiance should not be confused with the qualified and temporary allegiance which a foreigner owes to the government or sovereign of the territory wherein he resides, so long as he remains there, in return for the protection he receives, and which consists in the obedience to the laws of the government or sovereign.

The absolute and permanent allegiance of the inhabitants of a territory occupied by the enemy of their legitimate government or sovereign is not abrogated or severed by the enemy occupation, because the sovereignty of the government or sovereign de jure is not transferred thereby to the occupier and if it is not transferred to the occupant it must necessarily remain vested in the legitimate government; that the sovereignty vested in the titular government (which is the supreme power which governs a body politic or society which constitute the state) must be distinguished from the exercise of the rights inherent thereto, and

may be destroyed, or severed and transferred to another, but it cannot be suspended because the existence of sovereignty cannot be suspended without putting it out of existence or divesting the possessor thereof at least during the so-called period of suspension; that what may be suspended is the exercise of the rights of sovereignty with the control and government of the territory occupied by the enemy passes temporarily to the occupant; that the subsistence of the sovereignty of the legitimate government in a territory occupied by the military forces of the enemy during the war, "although the former is in fact prevented from exercising the supremacy over them" is one of the "rules of international law of our times"; and that, as a corollary of the conclusion that the sovereignty itself is not suspended and subsists during the enemy occupation, the allegiance of the inhabitants to their legitimate government or sovereign subsists, and therefore there is no such thing as suspended allegiance, the basic theory on which the whole fabric of the petitioner's contention rests;

PARAS, J., dissenting:

During the long period of Japanese occupation, all the political laws of the Philippines were suspended. This is full harmony with the generally accepted principles of the international law adopted by our Constitution(Article II, section 3) as a part of the law of the Nation. Accordingly, we have on more than one occasion already stated that "laws of a political nature or affecting political relations, . . . are considered as suspended or in abeyance during the military occupation" (Co Kim Cham vs. Valdez Tan Keh and Dizon, 75 Phil., 113, 124), and that the rule "that laws of political nature or affecting political relations are considered suspended or in abeyance during the military occupation, is intended for the governing of the civil inhabitants of the occupied territory." (Ruffy vs. Chief of Staff, Philippine Army, 75, Phil., 875, 881.)

6) WILLIAM F. PERALTA, VS THE DIRECTOR OF PRISONS

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

Feria, J.:

Petitioner-defendant, a member of the Metropolitan Constabulary of Manila charged with the supervision and control of the production, procurement and distribution of goods and other necessaries as defined in section 1 of Act No. 9 of the National Assembly of the so-called Republic of the Philippines, was prosecuted for the crime of robbery.

The petition for habeas corpus is based on the ground that the Court of Special and Executive Criminal Jurisdiction created by Ordinance No. 7 "was a political instrumentality of the military forces of the Japanese Imperial Army, the aims and purposes of which are repugnant to those aims and political purposes of the Commonwealth of the Philippines, as well as those of the United States of America, and therefore, null and void ab initio," that the

provisions of said Ordinance No. 7 are violative of the fundamental laws of the Commonwealth of the Philippines and "the petitioner has been deprived of his constitutional rights"; that the petitioner herein is being punished by a law created to serve the political purpose of the Japanese Imperial Army in the Philippines, and "that the penalties provided for are much (more) severe than the penalties provided for in the Revised Penal Code."

Issues:

1) Whether the creation of the Court of Special and Exclusive Criminal Jurisdiction, and of the summary procedure adopted is valid

2) Whether the validity of the sentence which imprisonment during the Japanese military occupation; and

3) Whether if they were then valid, the effect on said punitive sentence of the reoccupation of the Philippines and the restoration therein of the Commonwealth Government.

Ruling:

1) YES. As to the validity of the creation of the Court of Special and Exclusive Criminal Jurisdiction by Ordinance No. 7, the only factor to be considered is the authority of the legislative power which promulgated said law or ordinance. It is well established in International Law that "The criminal jurisdiction established by the invader in the occupied territory finds its source neither in the laws of the conquering or conquered state, — it is drawn entirely form the law martial as defined in the usages of nations. The authority thus derived can be asserted either through special tribunals, whose authority and procedure is defined in the military code of the conquering state, or through the ordinary courts and authorities of the occupied district.

The so-called Republic of the Philippines, being a governmental instrumentality of the belligerent occupant, had therefore the power or was competent to create the Court of Special and Exclusive Criminal Jurisdiction. No question may arise as to whether or not a court is of political complexion, for it is mere a governmental agency charged with the duty of applying the law to cases falling within its jurisdiction. Its judgments and sentences may be of political complexion, or not depending upon the nature or character of the law so applied. There is no room for doubt, therefore, as to the validity of the creation of the court in question.

With respect to the Summary procedure adopted by Ordinance No. 7, and followed in the trial of the case which resulted in the conviction of the herein petitioner, there is also no question as to the power or competence of the belligerent occupant to promulgate the law providing for such procedure

(2) YES. The validity of the sentence rendered by the Court of Special and Exclusive Criminal Jurisdiction which imposes life imprisonment upon the herein petitioner, depends upon the competence or power of the belligerent occupant to promulgate Act No. 65 which punishes the crime of which said petitioner was convicted.

Westlake says that Article XLIII, Section III, of the Hague Conventions of 1907 "indicates that the laws to be enforced by the occupant consist of, first, the territorial law in general, as that

which stands to the public order and social and commercial life of the district in a relation of mutual adaptation, so that any needless displacement of it would defeat the object which the invader is enjoined to have in view, and secondly, such variations of the territorial law as may be required by real necessity and are not expressly prohibited by any of the rules which will come before us. Such variations will naturally be greatest in what concerns the relation of the communities and individuals within the district to the invading army and its followers, it being necessary for the protection of the latter, and for the unhindered prosecution of the war by them, that acts committed to their detriment shall not only lose what justification the territorial law might give them as committed against enemies, but shall be repressed more severely than the territorial law would repress acts committed against fellow subjects. Indeed the entire relation between the invaders and the invaded, so far as it may fall within the criminal department whether by the intrinsic nature of the acts done or in consequence of the regulations made by the invaders, may be considered as taken out of the territorial law and referred to what is called martial law."

All judgments of political complexion of the courts during the Japanese regime, ceased to be valid upon the reoccupation of the islands by virtue of the principle or right of postliminium. Applying that doctrine to the present case, the sentence which convicted the petitioner of a crime of a political complexion must be considered as having ceased to be valid ipso facto upon the reoccupation or liberation of the Philippines by General Douglas MacArthur.

It may not be amiss to say in this connection that it is not necessary and proper to invoke the proclamation of General Douglas MacArthur declaring null and void all laws, among them Act No. 65, of the so-called Republic of the Philippines under which petitioner was convicted, in order to give retroactive effect to the nullification of said penal act and invalidate sentence rendered against petitioner under said law, a sentence which, before the proclamation, had already become null and of no effect.

3) We therefore hold that the punitive sentence under consideration, although good and valid during the military occupation of the Philippines by the Japanese forces, ceased to be good and valid ipso facto upon the reoccupation of these Island and the restoration therein of the Commonwealth Government.

In view of all the foregoing, the writ of habeas corpus prayed for is hereby granted and it is ordered that the petitioner be released forthwith, without pronouncement as to costs. So ordered.

7) SOUTHEAST ASIAN FISHERIES DEVELOPMENT CENTER V NLRC206 SCRA 283NOCON, j.:

Facts:SEAFDEC-AQD is a department of an international organization, the Southeast Asian Fisheries Development Center, organized through an agreement entered into in Bangkok, Thailand on December 28, 1967 by the governments of Malaysia, Singapore, Thailand, Vietnam, Indonesia and the Philippines with Japan as the sponsoring country.private respondent Juvenal Lazaga was employed as a Research Associate an a probationary basis by the SEAFDEC- AD and was appointed Senior External Affairs Officer on January 5, 1983 with a monthly basic salary of P8,000.00 and a monthly

allowance of P4,000.00. Thereafter, he was appointed to the position of Professional III and designated as Head of External Affairs Office with the same pay and benefits.

On May 8, 1986, petitioner Lacanilao in his capacity as Chief of SEAFDEC-AQD sent a notice of termination to private respondent informing him that due to the financial constraints being experienced by the department, his services shall be terminated at the close of office hours on May 15, 1986 and that he is entitled to separation benefits equivalent to one (1) month of his basic salary for every year of service plus other benefits (Rollo, p. 153).

Upon petitioner SEAFDEC-AQD's failure to pay private respondent his separation pay, the latter filed on March 18, 1987 a complaint against petitioners for non-payment of separation benefits plus moral damages and attorney's fees with the Arbitration Branch of the NLRC

Issue:Whether NLRC has jurisdiction

Ruling :No. Petitioner Southeast Asian Fisheries Development Center-Aquaculture Department (SEAFDEC-AQD) is an international agency beyond the jurisdiction of public respondent NLRC.

It was established by the Governments of Burma, Kingdom of Cambodia, Republic of Indonesia, Japan, Kingdom of Laos, Malaysia. Republic of the Philippines, Republic of Singapore, Kingdom of Thailand and Republic of Vietnam (Annex "H", Petition).

The Republic of the Philippines became a signatory to the Agreement establishing SEAFDEC on January 16,1968. Its purpose is as follows:

The purpose of the Center is to contribute to the promotion of the fisheries development in Southeast Asia by mutual co-operation among the member governments of the Center, hereinafter called the "Members", and through collaboration with international organizations and governments external to the Center. (Agreement Establishing the SEAFDEC, Art. 1; Annex "H" Petition) (p.310, Rollo)

SEAFDEC-AQD was organized during the Sixth Council Meeting of SEAFDEC on July 3-7, 1973 in Kuala Lumpur, Malaysia as one of the principal departments of SEAFDEC (Annex "I", id.) to be established in Iloilo for the promotion of research in aquaculture. Paragraph 1, Article 6 of the Agreement establishing SEAFDEC mandates:

1. The Council shall be the supreme organ of the Center and all powers of the Center shall be vested in the Council.

Being an intergovernmental organization, SEAFDEC including its Departments (AQD), enjoys functional independence and freedom from control of the state in whose territory its office is located.

As Senator Jovito R. Salonga and Former Chief Justice Pedro L. Yap stated in their book, Public International Law (p. 83, 1956 ed.):

Permanent international commissions and administrative bodies have been created by the agreement of a considerable number of States for a variety of international purposes, economic or social and mainly non-political. Among the notable instances are the International Labor Organization, the International Institute of Agriculture, the International Danube Commission. In so far as they are autonomous and beyond the control of any one State, they have a distinct juridical personality independent of the municipal law of the State where they are situated. As such, according to one leading authority "they must be deemed to possess a species of international personality of their own." (Salonga and Yap, Public International Law, 83 [1956 ed.])

Pursuant to its being a signatory to the Agreement, the Republic of the Philippines agreed to be represented by one Director in the governing SEAFDEC Council (Agreement Establishing SEAFDEC, Art. 5, Par. 1, Annex "H", ibid.) and that its national laws and regulations shall apply only insofar as its contribution to SEAFDEC of "an agreed amount of money, movable and immovable property and services necessary for the establishment and operation of the Center" are concerned (Art. 11, ibid.). It expressly waived the application of the Philippine laws on the disbursement of funds of petitioner SEAFDEC-AQD (Section 2, P.D. No. 292).

The then Minister of Justice likewise opined that Philippine Courts have no jurisdiction over SEAFDEC-AQD in Opinion No. 139, Series of 1984 —

4. One of the basic immunities of an international organization is immunity from local jurisdiction, i.e., that it is immune from the legal writs and processes issued by the tribunals of the country where it is found. (See Jenks, Id., pp. 37-44) The obvious reason for this is that the subjection of such an organization to the authority of the local courts would afford a convenient medium thru which the host government may interfere in there operations or even influence or control its policies and decisions of the organization; besides, such subjection to local jurisdiction would impair the capacity of such body to discharge its responsibilities impartially on behalf of its member-states. In the case at bar, for instance, the entertainment by the National Labor Relations Commission of Mr. Madamba's reinstatement cases would amount to interference by the

Philippine Government in the management decisions of the SEARCA governing board; even worse, it could compromise the desired impartiality of the organization since it will have to suit its actuations to the requirements of Philippine law, which may not necessarily coincide with the interests of the other member-states. It is precisely to forestall these possibilities that in cases where the extent of the immunity is specified in the enabling instruments of international organizations, jurisdictional immunity from the host country is invariably among the first accorded. (See Jenks, Id.; See also Bowett, The Law of International Institutions, pp. 284-1285).

Respondent Lazaga's invocation of estoppel with respect to the issue of jurisdiction is unavailing because estoppel does not apply to confer jurisdiction to a tribunal that has none over a cause of action. Jurisdiction is conferred by law. Where there is none, no agreement of the parties can provide one. Settled is the rule that the decision of a tribunal not vested with appropriate jurisdiction is null and void.

WHEREFORE, finding SEAFDEC-AQD to be an international agency beyond the jurisdiction of the courts or local agency of the Philippine government, the questioned decision and resolution of the NLRC dated July 26, 1988 and January 9, 1989, respectively, are hereby REVERSED and SET ASIDE for having been rendered without jurisdiction. No costs.

8) KHOSROW MINUCHER vs. HON. COURT OF APPEALS and ARTHUR SCALZO

G.R. No. 142396, February 11, 2003Vitug, J.:

Sometime in May 1986, an Information for violation of Section 4 of Republic Act No. 6425, otherwise also known as the "Dangerous Drugs Act of 1972," was filed against petitioner Khosrow Minucher and one Abbas Torabian with the RTC of Pasig City. The criminal charge followed a "buy-bust operation" conducted by the Philippine police narcotic agents in the house of Minucher, an Iranian national, where a quantity of heroin, a prohibited drug, was said to have been seized. The narcotic agents were accompanied by private respondent Arthur Scalzo who would, in due time, become one of the principal witnesses for the prosecution.

Minucher filed a civil case before the RTC Manila for damages on account of what he claimed to have been trumped-up charges of drug trafficking made by Arthur Scalzo. The testimony of the plaintiff disclosed that he is an Iranian national. He came to the Philippines to study in the University of the Philippines in 1974. In 1976, under the regime of the Shah of Iran, he was appointed Labor Attaché for the Iranian Embassies in Tokyo, Japan and Manila, Philippines.

He came to know the defendant on May 1986, when the latter was brought to his house and introduced to him by a certain Jose Iñigo, an informer of the Intelligence Unit of the military. During his first meeting with the defendant, upon the introduction of Jose

Iñigo, the defendant expressed his interest in buying caviar. As a matter of fact, he bought two kilos of caviar from plaintiff and paid P10,000.00 for it. Selling caviar, aside from that of Persian carpets, pistachio nuts and other Iranian products was his business after the Khomeini government cut his pension of over $3,000.00 per month. During their introduction in that meeting, the defendant gave the plaintiff his calling card, which showed that he is working at the US Embassy in the Philippines, as a special agent of the Drug Enforcement Administration, Department of Justice, of the United States, and gave his address as US Embassy, Manila.

It was also during this first meeting that plaintiff expressed his desire to obtain a US Visa for his wife and the wife of a countryman named Abbas Torabian. The defendant told him that he [could] help plaintiff for a fee of $2,000.00 per visa. The defendant called the plaintiff and invited the latter for dinner at Mario's Restaurant at Makati. He wanted to buy 200 grams of caviar.

Defendant visited plaintiff again at the latter's residence for 18 years at Kapitolyo, Pasig. The defendant wanted to buy a pair of carpets which plaintiff valued at $27,900.00. After some haggling, they agreed at $24,000.00. For the reason that defendant did not yet have the money, they agreed that defendant would come back the next day. The following day, at 1:00 p.m., he came back with his $24,000.00, which he gave to the plaintiff, and the latter, in turn, gave him the pair of carpets.

"At about 3:00 in the afternoon of May 27, 1986, the defendant came back again to plaintiff's house and directly proceeded to the latter's bedroom, where the latter and his countryman, Abbas Torabian, were playing chess. Plaintiff opened his safe in the bedroom and obtained $2,000.00 from it, gave it to the defendant for the latter's fee in obtaining a visa for plaintiff's wife. The defendant told him that he would be leaving the Philippines very soon and requested him to come out of the house for a while so that he can introduce him to his cousin waiting in a cab. Without much ado, and without putting on his shirt as he was only in his pajama pants, he followed the defendant where he saw a parked cab opposite the street. To his complete surprise, an American jumped out of the cab with a drawn high-powered gun. He was in the company of about 30 to 40 Filipino soldiers with 6 Americans, all armed. He was handcuffed and after about 20 minutes in the street, he was brought inside the house by the defendant. He was made to sit down while in handcuffs while the defendant was inside his bedroom. The defendant came out of the bedroom and out from defendant's attaché case, he took something and placed it on the table in front of the plaintiff. They also took plaintiff's wife who was at that time at the boutique near his house and likewise arrested Torabian, who was playing chess with him in the bedroom and both were handcuffed together.

The plaintiff took note of the fact that when the defendant invited him to come out to meet his cousin, his safe was opened where he kept the $24,000.00 the defendant paid for the carpets and another $8,000.00 which he also placed in the safe together with a bracelet worth $15,000.00 and a pair of earrings worth $10,000.00. He also discovered missing upon his release his 8 pieces hand-made Persian carpets, valued at $65,000.00, a painting he bought for P30,000.00 together with his TV and betamax sets. He claimed that when he was handcuffed, the defendant took his keys from his wallet. There was, therefore, nothing left in his house.

Then, on 14 June 1990, after almost two years since the institution of the civil case, Scalzo filed a motion to dismiss the

complaint on the ground that, being a special agent of the United States Drug Enforcement Administration, he was entitled to diplomatic immunity.

While the trial court gave credence to the claim of Scalzo and the evidence presented by him that he was a diplomatic agent entitled to immunity as such, it ruled that he, nevertheless, should be held accountable for the acts complained of committed outside his official duties. On appeal, the Court of Appeals reversed the decision of the trial court and sustained the defense of Scalzo that he was sufficiently clothed with diplomatic immunity during his term of duty and thereby immune from the criminal and civil jurisdiction of the "Receiving State" pursuant to the terms of the Vienna Convention.

ISSUE: Whether defendant Scalzo enjoys diplomatic immunity.

HELD: NO, defendant Scalzo does not enjoy diplomatic immunity. HOWEVER, considering that he is a representative of the US government, he is enjoys state immunity from suit.

The Vienna Convention lists the classes of heads of diplomatic missions to include (a) ambassadors or nuncios accredited to the heads of state, (b) envoys, ministers or internuncios accredited to the heads of states; and (c) charges d' affairs accredited to the ministers of foreign affairs. Comprising the "staff of the (diplomatic) mission" are the diplomatic staff, the administrative staff and the technical and service staff. Only the heads of missions, as well as members of the diplomatic staff, excluding the members of the administrative, technical and service staff of the mission, are accorded diplomatic rank. Even while the Vienna Convention on Diplomatic Relations provides for immunity to the members of diplomatic missions, it does so, nevertheless, with an understanding that the same be restrictively applied. Only "diplomatic agents," under the terms of the Convention, are vested with blanket diplomatic immunity from civil and criminal suits. The Convention defines "diplomatic agents" as the heads of missions or members of the diplomatic staff, thus impliedly withholding the same privileges from all others. It might bear stressing that even consuls, who represent their respective states in concerns of commerce and navigation and perform certain administrative and notarial duties, such as the issuance of passports and visas, authentication of documents, and administration of oaths, do not ordinarily enjoy the traditional diplomatic immunities and privileges accorded diplomats, mainly for the reason that they are not charged with the duty of representing their states in political matters. Indeed, the main yardstick in ascertaining whether a person is a diplomat entitled to immunity is the determination of whether or not he performs duties of diplomatic nature.

Scalzo asserted, that he was an Assistant Attaché of the United States diplomatic mission and was accredited as such by the Philippine Government. An attaché belongs to a category of officers in the diplomatic establishment who may be in charge of its cultural, press, administrative or financial affairs. There could also be a class of attaches belonging to certain ministries or departments of the government, other than the foreign ministry or department, who are detailed by their respective ministries or departments with the embassies such as the military, naval, air, commercial, agricultural, labor, science, and customs attaches, or the like. Attaches assist a chief of mission in his duties and are administratively under him, but their main function is to observe, analyze and interpret trends and developments in their respective fields in the host country and submit reports to their own ministries or departments in the home government. These officials are not generally regarded as members of the diplomatic

mission, nor are they normally designated as having diplomatic rank.

But while the diplomatic immunity of Scalzo might thus remain contentious, it was sufficiently established that, indeed, he worked for the United States Drug Enforcement Agency and was tasked to conduct surveillance of suspected drug activities within the country on the dates pertinent to this case. If it should be ascertained that Arthur Scalzo was acting well within his assigned functions when he committed the acts alleged in the complaint, the present controversy could then be resolved under the related doctrine of State Immunity from Suit.

The precept that a State cannot be sued in the courts of a foreign state is a long-standing rule of customary international law then closely identified with the personal immunity of a foreign sovereign from suit and, with the emergence of democratic states, made to attach not just to the person of the head of state, or his representative, but also distinctly to the state itself in its sovereign capacity. If the acts giving rise to a suit are those of a foreign government done by its foreign agent, although not necessarily a diplomatic personage, but acting in his official capacity, the complaint could be barred by the immunity of the foreign sovereign from suit without its consent. Suing a representative of a state is believed to be, in effect, suing the state itself.

This immunity principle, however, has its limitations. Thus, Shauf vs. Court of Appeals elaborates:

"It is a different matter where the public official is made to account in his capacity as such for acts contrary to law and injurious to the rights of the plaintiff. Unauthorized acts of government officials or officers are not acts of the State, and an action against the officials or officers by one whose rights have been invaded or violated by such acts, for the protection of his rights, is not a suit against the State within the rule of immunity of the State from suit. In the same tenor, it has been said that an action at law or suit in equity against a State officer or the director of a State department on the ground that, while claiming to act 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. The rationale for this ruling is that the doctrine of state immunity cannot be used as an instrument for perpetrating an injustice.

"(T)he doctrine of immunity from suit will not apply and may not be invoked where the public official is being sued in his private and personal capacity as an ordinary citizen. The cloak of protection afforded the officers and agents of the government is removed the moment they are sued in their individual capacity. A foreign agent, operating within a territory, can be cloaked with immunity from suit but only as long as it can be established that he is acting within the directives of the sending state. The consent of the host state is an indispensable requirement of basic courtesy between the two sovereigns.”

The official exchanges of communication between agencies of the government of the two countries, certifications from officials of both the Philippine Department of Foreign Affairs and the United States Embassy, as well as the participation of members of the Philippine Narcotics Command in the "buy-bust operation" conducted at the residence of Minucher at the behest of Scalzo,

may be inadequate to support the "diplomatic status" of the latter but they give enough indication that the Philippine government has given its imprimatur, if not consent, to the activities within Philippine territory of agent Scalzo of the United States Drug Enforcement Agency. The job description of Scalzo has tasked him to conduct surveillance on suspected drug suppliers and, after having ascertained the target, to inform local law enforcers who would then be expected to make the arrest. In conducting surveillance activities on Minucher, later acting as the poseur-buyer during the buy-bust operation, and then becoming a principal witness in the criminal case against Minucher, Scalzo hardly can be said to have acted beyond the scope of his official function or duties.

9) PHILIPPINE TOURISM AUTHORITY, petitioner, vs. PHILIPPIN

E GOLF DEVELOPMENT & EQUIPMENT, INC., respondent.

[G.R. No. 176628. March 19, 2012.]

BRION, J p:

FACTS:

PTA, an agency of the Department of Tourism, whose main function is to bolster and promote tourism, entered into a contract with Atlantic Erectors, Inc. (AEI) for the construction of the Intramuros Golf Course Expansion Projects (PAR 60-66) for a contract price of Fifty-Seven Million Nine Hundred Fifty-Four Thousand Six Hundred Forty-Seven and 94/100 Pesos (P57,954,647.94).

The civil works of the project commenced. Since AEI was incapable of constructing the golf course aspect of the project, it entered into a sub-contract agreement with PHILGOLF, a duly organized domestic corporation, to build the golf course amounting to Twenty-Seven Million Pesos (P27,000,000.00). The sub-contract agreement also provides that PHILGOLF shall submit its progress billings directly to PTA and, in turn, PTA shall directly pay PHILGOLF. 

PHILGOLF filed a collection suit against PTA amounting to Eleven Million Eight Hundred Twenty Thousand Five Hundred Fifty and 53/100 Pesos (P11,820,550.53), plus interest, for the construction of the golf course. Within the period to file a responsive pleading, PTA filed a motion for extension of time to file an answer.

the RTC granted the motion for extension of time to file an answer, twice. The RTC again granted the motion. Despite such, PTA failed to answer the complaint. Hence, the RTC rendered a judgment of default, ordering the defendant to pay plaintiff: The amount of Eleven Million, Eight Hundred Twenty Thousand, Five Hundred Fifty Pesos and Fifty Three Centavos (P11,820,550.53), representing defendant's outstanding obligation, plus interest thereon of twelve percent (12%) per annum from the time the unpaid billings of plaintiff were due for payment by the defendant, until they are fully paid.

PTA seasonably appealed the case to the CA. But before the appeal of PTA could be perfected, PHILGOLF already filed a motion for execution pending appeal with the RTC. The RTC, in an Order granted the motion and a writ of execution pending appeal was issued against PTA. Subsequently, a notice of garnishment was issued against PTA's bank account at the Land

Bank of the Philippines, NAIA-BOC Branch to fully satisfy the judgment.

PTA filed a petition for certiorari with the CA, imputing grave abuse of discretion on the part of the RTC for granting the motion for execution pending appeal. The CA ruled in favor of PTA and set aside the order granting the motion for execution pending appeal.

Thereafter, PTA withdrew its appeal of the RTC decision and, instead, filed a petition  for annulment of judgment under Rule 47 of the Rules of Court. The petition for annulment of judgment was premised on the argument that the gross negligence of PTA's counsel prevented the presentation of evidence before the RTC.

the CA dismissed the petition for annulment of judgment for lack of merit. Hence, this present petition for certiorari. 

ISSUES: first, that the negligence of PTA's counsel amounted to an extrinsic fraud warranting an annulment of judgment; second, that since PTA is a government entity, it should not be bound by the inactions or negligence of its counsel; and third, that there were no other available remedies left for PTA but a petition for annulment of judgment.

HELD:

We find the petition unmeritorious.

The Rules of Court specifically provides for deadlines in actions before the court to ensure an orderly disposition of cases. PTA cannot escape these legal technicalities by simply invoking the negligence of its counsel. This practice, if allowed, would defeat the purpose of the Rules on periods since every party would merely lay the blame on its counsel to avoid any liability. The rule is that "a client is bound by the acts, even mistakes, of his counsel in the realm of procedural technique[,] and unless such acts involve gross negligence that the claiming party can prove, the acts of a counsel bind the client as if it had been the latter's acts." 

It is not disputed that the summons together with a copy of the complaint was personally served upon, and received by PTA through its Corporate Legal Services Department. Thus, in failing to submit a responsive pleading within the required time despite sufficient notice, the RTC was correct in declaring PTA in default.

There was no extrinsic fraud

"Extrinsic fraud refers to any fraudulent act of the prevailing party in the litigation which is committed outside of the trial of the case, whereby the unsuccessful party has been prevented from exhibiting fully his case, by fraud or deception practiced on him by his opponent."  we do not see the acts of PTA's counsel to be constitutive of extrinsic fraud. The records reveal that the judgment of default  was sent via registered mail to PTA's counsel. However, PTA never availed of the remedy of a motion to lift the order of default.  Since the failure of PTA to present its evidence was not a product of any fraudulent acts committed outside trial, the RTC did not err in declaring PTA in default.

Annulment of judgment is notthe proper remedy

PTA's appropriate remedy was only to appeal the RTC decision. "Annulment of Judgment under Rule 47 of the Rules of Court is a recourse equitable in character and allowed only in exceptional cases where the ordinary remedies of new trial, appeal, petition for relief or other appropriate remedies are no longer available through no fault of petitioner."  In this case, appeal was an available remedy.

PTA was acting in a proprietarycharacter

PTA also erred in invoking state immunity simply because it is a government entity. The application of state immunity is proper only when the proceedings arise out of sovereign transactions and not in cases of commercial activities or economic affairs. The State, in entering into a business contract, descends to the level of an individual and is deemed to have tacitly given its consent to be sued.   Since the Intramuros Golf Course Expansion Projects partakes of a proprietary character entered into between PTA and PHILGOLF, PTA cannot avoid its financial liability by merely invoking immunity from suit.

10) Social Security System vs. Court of Appeals, David Cruz, Socorro Cruz and Lorna CruzL-41299 February 21, 1983Melencio-Herrera, J.

FACTS:

Spouses David and Socorro Cruz were granted a real estate loan by SSS with their residential lot located in Pateros, Rizal as collateral. On July 9, 1968, SSS applied with the provincial sheriff of Rizal for the foreclosure of the real estate mortgage. It was alleged by SSS that the mortgagors were in default of their installments for the principal amount of the loan, as well as the interest. After the first publication of the notice of the Sheriff’s sale, Spouses Cruz, thru counsel wrote to SSS and demanded the latter to withdraw the foreclosure and discontinue the publication of the notice of sale of their property claiming that they were up-to-date in payment of their monthly amortizations.

Nothing came out of the telegraphic communications between the parties. Thereafter, spouses Cruz instituted before the CFI an action for damages and attorney’s fees against SSS and the provincial Sheriff alleging among other things that they had fully and religiously paid their monthly amortizations and had not defaulted in any payment. On the other hand, in its answer with counterclaim, SSS stressed its right to foreclose the mortgage by virtue of the automatic acceleration clause provided in the mortgage contract even after they had paid their amortization installments. The CFI enjoined the SSS from holding the sale at public auction of property of spouses Cruz upon their posting of a P2,000.00 bond executed in favor of the SSS and awarded damages to them. The CA affirmed the decision of the trial court. On appeal, SSS claimed that the CA erred in not holding that they are not liable for damages not being a profit-oriented governmental institution but one performing governmental functions petitions.

ISSUE: Whether or not SSS can be sued and be held liable for damages?

HELD:

YES. SSS is a juridical entity with a personality of its own. It has corporate powers separate and distinct from the government. SSS’ own organic act specifically provides that it can sue and be sued in court. This embraces all civil process incident to a legal action. So that, even assuming that the SSS as it claims enjoys immunity from suit as an entity performing governmental functions, by virtue of the explicit provision of the aforecited enabling law, the government must be deemed to have waived immunity in respect of the SSS, although it does not thereby concede liability. That statutory law has given to the private-citizen a remedy for the enforcement and protection of his rights. The SSS thereby has been required to submit to the jurisdiction of the Courts, subject to its right to interpose any lawful defense. Whether the SSS performs governmental or proprietary functions thus becomes unnecessary to belabor. For by that waiver, a private citizen may bring a suit against it for varied objectives, such as, in this case, to obtain compensation in damages arising from contract and even for tort.

The proposition that the SSS is not profit-oriented was rejected in the case of SSS Employees' Association vs. Hon. Soriano. But even conceding that the SSS is not, in the main, operated for profit, it cannot be denied that, in so far as contractual loan agreements with private parties are concerned, the SSS enters into them for profit considering that the borrowers pay interest, which is money paid for the use of money, plus other charges. What is of paramount importance in this controversy is that an injustice is not perpetrated and that when damage is caused a citizen, the latter should have a right of redress particularly when it arises from a purely private and contractual relationship between said individual and the System.

Under the circumstances of the case, SSS was only held liable for nominal damages, there being no proof that it acted in a wanton, reckless and oppressive manner. There was only negligence when they adamantly refused to acknowledge that they mistook the account of Socorro J. Cruz for private respondent Socorro C. Cruz.

11) BUREAU OF PRINTING, SERAFIN SALVADOR and MARIANO LEDESMA V. THE BUREAU OF PRINTING EMPLOYEES ASSOCIATION (NLU), PACIFICO ADVINCULA, ROBERTO MENDOZA, PONCIANO ARGANDA and TEODULO TOLERANG.R. No. L-15751, January 28, 1961Gutierrez David, J.:FACTS:

Upon complaint of respondents Bureau of Printing Employees Association (NLU) a case was filed against petitioners Bureau of Printing, Serafin Salvador, the Acting Secretary of the Department of General Services, and Mariano Ledesma the Director of the Bureau of Printing. The complaint alleged that

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

Petitioners Bureau of Printing, Salvador and Ledesma denied the charges and by way of affirmative defense alleged, among other things, the following:

1) that respondents were suspended pending result of an administrative investigation against them for breach of Civil Service rules and regulations petitions;

2) that the Bureau of Printing has no juridical personality to sue and be sued;

3) that said Bureau of Printing is not an industrial concern engaged for the purpose of gain but is an agency of the Republic performing government functions.

They prayed that the case be dismissed for lack of jurisdiction.

Before the case could be heard, petitioners filed an "Omnibus Motion" for a preliminary hearing on the question of jurisdiction and for suspension of the trial of the case on the merits pending the determination of such jurisdictional question. The motion was granted, but after hearing, the trial judge of the Industrial Court in an order sustained the jurisdiction of the court on the theory that the functions of the Bureau of Printing are "exclusively proprietary in nature," and, consequently, denied the prayer for dismissal. Reconsideration of this order having been also denied by the court, the petitioners brought the case to this Court through the present petition for certiorari and prohibition.

ISSUE: Whether the Bureau of Printing is a government entity involved in governmental functions; hence, the Bureau has no juridical personality to sue and be sued

HELD: YES, the Bureau is a government entity involved in governmental functions. As an office of the Government without any corporate or juridical personality, the Bureau of Printing cannot be sued, and it follows that the Government cannot be sued without its consent.

The Bureau of Printing is an office of the Government created by the Administrative Code of 1916. 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 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 . . .." (See. 1644, Rev. Adm. Code). It has no corporate existence, and its appropriations are provided for in the General Appropriations Act. Designed to meet the printing needs of the Government, it is primarily a service bureau and obviously, not engaged in business or occupation for pecuniary profit.

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 work on regular working days and on holidays, but these facts do not justify the conclusion that its functions are "exclusively proprietary in nature." Overtime work in the Bureau of Printing is done only when the interest of the service so requires. As a matter of administrative policy, the overtime compensation may be paid, but such payment is discretionary with the head of the Bureau depending upon its current appropriations, so that it cannot be the basis for holding that the functions of said Bureau are wholly proprietary in character. Anent the additional work it executes for private persons, we find that such work is done upon request, as distinguished from those solicited, and only "as the requirements of Government work will permit", and "upon terms fixed by the Director of Printing, with the approval of the Department Head". As shown by the uncontradicted evidence of the petitioners, most of these works consist of orders for greeting cards during Christmas from government officials, and for printing of checks of private banking institutions. On those greeting cards, the Government seal, of which only the Bureau of Printing is authorized to use, is embossed, and on the bank cheeks, only the Bureau of Printing can print the reproduction of the official documentary stamps appearing thereon.

The volume of private jobs done, in comparison with government jobs, is only one-half of 1 per cent, and in computing the costs for work done for private parties, the Bureau does not include profit 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.

The Court of Industrial Relations did not acquire jurisdiction over the respondent Bureau of Printing, and is thus devoid of any authority to take cognizance of the case.

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 Court). Any suit, action or proceeding against it, if it were to produce any effect, would actually be a suit, action or proceeding against the Government itself, and the rule is settled that the Government cannot be sued without its consent, much less over its objection. 12) DEPARTMENT OF AGRICULTURE V. THE NATIONAL LABOR RELATIONS COMMISSIONG.R. No. 104269. November 11, 1993.VITUG, J.

FACTS:

Department of Agriculture (DA) and Sultan Security Agency entered into a contract for security services to be provided by the latter to the said governmental entity. Pursuant to their arrangements, guards were deployed by Sultan Security Agency in the various premises of the DA. Thereafter, several guards filed a complaint for underpayment of wages, nonpayment of 13th month pay, uniform allowances, night shift differential pay, holiday pay, and overtime pay, as well as for damages against the DA and the security agency.

The Labor Arbiter rendered a decision finding the DA jointly and severally liable with the security agency for the payment of money claims of the complainant security guards. The DA and the security agency did not appeal the decision. Thus, the decision became final and executory. The Labor Arbiter issued a writ of execution to enforce and execute the judgment against the property of the DA and the security agency. Thereafter, the City Sheriff levied on execution the motor vehicles of the DA.

The petitioner filed a petition for injunction with the NLRC which was later dismissed for lack of basis. The petitioner charges the NLRC with grave abuse of discretion for refusing to quash the writ of execution. The petitioner faults the NLRC for assuming jurisdiction over a money claim against the Department, which, it claims, falls under the exclusive jurisdiction of the Commission on Audit. More importantly, the petitioner asserts, the NLRC has disregarded the cardinal rule on the non-suability of the State.

The private respondents, on the other hand, argue that the petitioner has impliedly waived its immunity from suit by concluding a service contract with Sultan Security Agency.

ISSUE:

Whether or not the Department of Agriculture may be sued.

HELD:

YES. A sovereign is exempt from suit based on the logical and practical ground that there can be no legal right as against the authority that makes the law on which the right depends. The State’s consent to be sued may be given expressly or impliedly. Express consent may be made through a general law or a special law while implied consent is conceded when the State itself commences litigation, thus opening itself to a counterclaim, or when it enters into a contract whereby the government is deemed to have descended to the level of the other contracting party and to have divested itself of its sovereign immunity.

However, not all contracts entered into by the government operate as a waiver of its non-suability; distinction must still be made between one which is executed in the exercise of its sovereign function and another which is done in its proprietary capacity. A State may be said to have descended to the level of an individual and can this be deemed to have actually given its consent to be sued only when it enters into business contracts. It does not apply where the contract relates to the exercise of its sovereign functions.

In this case, the DA has not pretended to have assumed a capacity apart from its being a governmental entity when it entered into the questioned contract; nor that it could have performed any act proprietary in character.

But, be that as it may, the claims of the complainant security guards clearly constitute money claims. Act No. 3083 gives the consent of the State to be sued upon any moneyed claim involving liability arising from contract, express or implied. Pursuant, however, to Commonwealth Act 327, as amended by PD 1145, the money claim must first be brought to the Commission on Audit.

13) Sanders v. Veridiano IIFACTS:

Petitioner Sanders was, at the time the incident in question occurred, the special services director of the U.S. Naval Station (NAVSTA) in Olongapo City. Petitioner Moreau was the commanding officer of the Subic Naval Base, which includes the said station. Private respondent Rossi is an American citizen with permanent residence in the Philippines, as so was private respondent Wyer, who died two years ago. They were both employed as gameroom attendants in the special services department of the NAVSTA, the former having been hired in 1971 and the latter in 1969.

On October 3, 1975, the private respondents were advised that their employment had been converted from permanent full-time to permanent part-time, effective October 18, 1975.  Their reaction was to protest this conversion and to institute grievance proceedings conformably to the pertinent rules and regulations of the U.S. Department of Defense. The result was a recommendation from the hearing officer who conducted the proceedings for the reinstatement of the private respondents to permanent full-time status plus backwages. The report on the hearing contained the observation that "Special Services management practices an autocratic form of supervision." 

Sanders disagreed with the hearing officer's report and asked for the rejection of the recommendation. The letter contained the statements that: a ) "Mr. Rossi tends to alienate most co-workers and supervisors;" b) "Messrs. Rossi and Wyers have proven, according to their immediate supervisors, to be difficult employees to supervise;" and c) "even though the grievants were under oath not to discuss the case with anyone, (they) placed the records in public places where others not involved in the case could hear."

On November 7, 1975, before the start of the grievance hearings, a-letter purportedly corning from petitioner Moreau as the commanding general of the U.S. Naval Station in Subic Bay was sent to the Chief of Naval Personnel explaining the change of the private respondent's employment status and requesting concurrence therewith. The letter did not carry his signature but was signed by W.B. Moore, Jr. "by direction," presumably of Moreau.

On the basis of these antecedent facts, the private respondent filed in the Court of First Instance of Olongapo City for damages against the herein petitioners on November 8, 1976. The plaintiffs claimed that the letters contained libelous imputations that had exposed them to ridicule and caused them mental anguish and that the prejudgment of the grievance proceedings was an invasion of their personal and proprietary rights.

The private respondents made it clear that the petitioners were being sued in their private or personal capacity. However, in a motion to dismiss filed under a special appearance, the petitioners argued that the acts complained of were performed by them in the discharge of their official duties and that, consequently, the court had no jurisdiction over them under the doctrine of state immunity.

ISSUE:

Whether or not the petitioners were performing their official duties when they did the acts for which they have been sued for damages by the private respondents

HELD:

Mere allegation that a government functionary is being sued in his personal capacity will not automatically remove him from the protection of the law of public officer and doctrine of state immunity; The acts for which the petitioners are being called to account were performed by them in the charge of their official duties. Sanders, as director of the special services department of NAVSTA, had supervision over its personnel, including the private respondents, and had a hand in matters of employment, dismissal, etc. It was clear that Sanders was within his rights in the perpetration of the new directives with regards to change in employment status.

Having acted on the performance of their duties, the petitioners have established to have acted on behalf of the State and within the scope of their authority, and are being sued as so. Therefore, they are not being sued in their private or personal capacity, rather, it is the government that is being sued, given which, the complaint cannot prosper unless the government sought to be ultimately liable has given its consent to be sued. The doctrine of state of immunity as applicable not only to our own government but also to foreign states sought to be subjected to the jurisdiction of our courts.

14) Republic v. Sandoval220 SCRA 124CAMPOS, JR., J.:

FACTS: Farmer-rallyists marched to Malacanang calling for a genuine land reform program. There was a marchers-police confrontation which resulted in the death of 12 rallyists and scores were wounded. As a result, then Pres. Aquino issued AO 11 creating the Citizens Mendiola Commission for the purpose of conducting an investigation. The most significant recommendation of the Commission was for the heirs of the deceased and wounded victims to be compensated by the government. Based on such recommendation, the victims of Mendiola massacre filed an action for damages against the Republic and the military/police officers involved in the incident.

The Solicitor General filed a Motion to Dismiss on the ground that the State cannot be sued without its consent. The petitioners argued that the State has waived its immunity by instituting a Commission by the recommendation of which to indemnify the victims. Another petition filed to Respondent Judge Sandoval, Sandoval dismissed the complaint as against the Republic of the Philippines on the ground that there was no waiver by the State.

ISSUE: (1) Whether or not there is a valid waiver of immunity(2) Whether or not the State is liable for damages

Held: (1) The Court held that there was NO valid waiver of immunity as claimed by the petitioners. The constitution expressly provided in Article 16, Section 3 that the State cannot be sued without its consent. The Citizen’s Mendiola Commission was created to act as a fact-finding committee to shed light to the occurrence, thus providing only a preliminary venue for the investigations that whatever recommendation it makes cannot in any way bind the State immediately, such recommendation not having become

final and executory. The recommendation made by the Commission to indemnify the heirs of the deceased and the victims does not in any way mean that liability attaches to the State. AO 11 merely states the purpose of the creation of the Commission and, therefore, whatever is the finding of the Commission only serves as the basis for a cause of action in the event any party decides to litigate the same. Thus, the recommendation of the Commission does not in any way bind the State.

(2) NO. The State CANNOT be made liable because the military/police officers who allegedly were responsible for the death and injuries suffered by the marchers acted beyond the scope of their authority. It is a settled rule that the State as a person can commit no wrong. The military and police officers who were responsible for the atrocities can be held personally liable for damages as they exceeded their authority, hence, the acts cannot be considered official.

15) UNITED STATES OF AMERICA, CAPT. JAMES E. GALLOWAY, WILLIAM I. COLLINS and ROBERT GOHIER,

petitioners, vs. HON. V. M. RUIZ, Presiding Judge of Branch XV, Court of First Instance of Rizal and ELIGIO DE GUZMAN & CO.,

INC., respondents.

En BancDoctrine: implied consentDate: May 22, 1985Ponente: Justice Abad-Santos

Facts:

At times material to this case, the United States of America had a naval base in Subic, Zambales. The base was one of those provided in the Military Bases Agreement between the Philippines and the United States.

US invited the submission of bids for Repair offender system and Repair typhoon damages. Eligio de Guzman & Co., Inc. responded to the invitation, submitted bids and complied with the requests based on the letters received from the US.

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

The company sued the United States of America and Messrs. James E. Galloway, William I. Collins and Robert Gohier all members of the Engineering Command of the U.S. Navy. The complaint is to order the defendants to allow the plaintiff to perform the work on the projects and, in the event that specific performance was no longer possible, to order the defendants to pay damages. The company also asked for the issuance of a writ of preliminary injunction to restrain the defendants from entering into contracts with third parties for work on the projects.

The defendants entered their special appearance for the purpose only of questioning the jurisdiction of this court over the subject matter of the complaint and the persons of defendants, the subject matter of the complaint being acts and omissions of the individual defendants as agents of defendant United States of America, a foreign

sovereign which has not given her consent to this suit or any other suit for the causes of action asserted in the complaint." (Rollo, p. 50.)

Subsequently the defendants filed a motion to dismiss the complaint which included an opposition 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 the instant petition which seeks to restrain perpetually the proceedings in Civil Case No. 779-M for lack of jurisdiction on the part of the trial court.

Issue/s:

WON the US naval base in bidding for said contracts exercise governmental functions to be able to invoke state immunity

Held: WHEREFORE, the petition is granted; the questioned orders of the respondent judge are set aside and Civil Case No. is dismissed. Costs against the private respondent.

Ratio:

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

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

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

16 ) G.R. No. L-34548 November 29, 1988

RIZAL COMMERCIAL BANKING CORPORATION, petitioner, vs.THE HONORABLE PACIFICO P. DE CASTRO and

PHILIPPINE VIRGINIA TOBACCO ADMINISTRATION, respondents  

CORTES, J.:

FACTS:

In Civil Case No. Q-12785 which was an action for recovery of unpaid tobacco deliveries, an Order (Partial Judgment) was issued on January 15, 1970 by the Hon. Lourdes P. San Diego, then Presiding Judge, ordering the defendants therein to pay jointly and severally, the plaintiff Badoc Planters, Inc. (hereinafter referred to as "BADOC") within 48 hours the aggregate amount of P206,916.76, with legal interests thereon.

On January 26,1970, BADOC filed an Urgent Ex-Parte Motion for a Writ of Execution of the said Partial Judgment which was granted on the same day by the herein respondent judge who acted in place of the Hon. Judge San Diego who had just been elevated as a Justice of the Court of Appeals. Accordingly, the Branch Clerk of Court on the very same day, issued a Writ of Execution addressed to Special Sheriff Faustino Rigor, who then issued a Notice of Garnishment addressed to the General Manager and/or Cashier of Rizal Commercial Banking Corporation. Upon receipt of such Notice, RCBC notified PVTA thereof to enable the PVTA to take the necessary steps for the protection of its own interest [Record on Appeal, p. 36]

Upon an Urgent Ex-Parte Motion dated January 27, 1970 filed by BADOC, the respondent Judge issued an Order granting the Ex-Parte Motion and directing the herein petitioner "to deliver in check the amount garnished to Sheriff Faustino Rigor and Sheriff Rigor in turn is ordered to cash the check and deliver the amount to the plaintiff's representative and/or counsel on record." [Record on Appeal, p. 20; Rollo, p. 5.] In compliance with said Order, petitioner delivered to Sheriff Rigor a certified check in the sum of P 206,916.76.

ISSUE:

Whether or not PVTA funds are public funds not subject to garnishment

HELD:

The Court holds that they are not.

Republic Act No. 2265 created the PVTA as an ordinary corporation with all the attributes of a corporate entity subject to the provisions of the Corporation Law. Hence, it possesses the power "to sue and be sued" and "to acquire and hold such assets and incur such liabilities resulting directly from operations authorized by the provisions of this Act or as essential to the proper conduct of such operations." [Section 3, Republic Act No. 2265.]

Among the specific powers vested in the PVTA are: 1) to buy Virginia tobacco grown in the Philippines for resale to local bona fide tobacco manufacturers and leaf tobacco dealers [Section 4(b), R.A. No. 2265]; 2) to contracts of any kind as may be necessary or incidental to the attainment of its purpose with any person, firm or corporation, with the Government of the Philippines or with any foreign government, subject to existing laws [Section 4(h), R.A. No. 22651; and 3) generally, to exercise

all the powers of a corporation under the Corporation Law, insofar as they are not inconsistent with the provisions of this Act [Section 4(k), R.A. No. 2265.]

From the foregoing, it is clear that PVTA has been endowed with a personality distinct and separate from the government which owns and controls it. Accordingly, this Court has heretofore declared that the funds of the PVTA can be garnished since "funds of public corporation which can sue and be sued were not exempt from garnishment" [Philippine National Bank v. Pabalan, G.R. No. L-33112, June 15, 1978, 83 SCRA 595, 598.]

Accordingly, as emphatically expressed by this Court in a 1978 decision, "garnishment was the appropriate remedy for the prevailing party which could proceed against the funds of a corporate entity even if owned or controlled by the government" inasmuch as "by engaging in a particular business thru the instrumentality of a corporation, the government divests itself pro hac vice of its sovereign character, so as to render the corporation subject to the rules of law governing private corporations" [Philippine National Bank v. CIR, G.R No. L-32667, January 31, 1978, 81 SCRA 314, 319.]

Furthermore, in the case of PVTA, the law has expressly allowed it funds to answer for various obligations, including the one sought to be enforced by plaintiff BADOC in this case (i.e. for unpaid deliveries of tobacco). Republic Act No. 4155, which discounted the erstwhile support given by the Central Bank to PVTA, established in lieu thereof a "Tobacco Fund" to be collected from the proceeds of fifty per centum of the tariff or taxes of imported leaf tobacco and also fifty per centum of the specific taxes on locally manufactured Virginia type cigarettes.

Inasmuch as the Tobacco Fund, a special fund, was by law, earmarked specifically to answer obligations incurred by PVTA in connection with its proprietary and commercial operations authorized under the law, it follows that said funds may be proceeded against by ordinary judicial processes such as execution and garnishment.

17) G.R. Nos. 89898-99 October 1, 1990

MUNICIPALITY OF MAKATI, petitioner, vs. THE HONORABLE COURT OF APPEALS, HON. SALVADOR P. DE GUZMAN, JR., as Judge RTC of Makati, Branch CXLII ADMIRAL FINANCE CREDITORS CONSORTIUM, INC., and SHERIFF SILVINO R. PASTRANA,respondents.

CORTÉS, J.:

Facts: The present petition for review is an off-shoot of expropriation proceedings initiated by petitioner Municipality of Makati against private respondent Admiral Finance Creditors Consortium, Inc., Home Building System & Realty Corporation and one Arceli P. Jo, involving a parcel of land and improvements thereon. Attached to petitioner's complaint was a certification that a bank account (Account No. S/A 265-537154-3) had been opened with the PNB Buendia Branch under petitioner's name containing the sum of P417,510.00, made pursuant to the provisions of Pres. Decree No. 42. Respondent RTC Judge fixed the appraise value of the property. Pursuant to the final and executory decision, the private respondent filed a motion for execution of the judgment, in which, an Order of Garnishment of the bank account from PNB was issued by the RTC. Petitioner opposed the Order of Garnishment raising that it has two bank accounts with the PNB, one opened exclusively for

the expropriation of the said parcel of land Account No. (S/A 265-537154-3) and one for statutory obligations and other purposes of the municipal government, with a balance of P170,098,421.72 (S/A 263-530850-7 )as of July 12, 1989.

Issue: WON both bank accounts should be garnished.

Held: No.Only the bank account that was opened exclusively for the expropriation of the land of private respondent.Inasmuch as the assailed orders of respondent RTC judge involved the net amount of P4,965,506.45, the funds garnished by respondent sheriff in excess of P99,743.94, which are public funds earmarked for the municipal government's other statutory obligations, are exempted from execution without the proper appropriation required under the law.The funds deposited in the second PNB Account No. S/A 263-530850-7 are public funds of the municipal government. In this jurisdiction, well-settled is the rule that public funds are not subject to levy and execution, unless otherwise provided for by statute. More particularly, the properties of a municipality, whether real or personal, which are necessary for public use cannot be attached and sold at execution sale to satisfy a money judgment against the municipality. Municipal revenues derived from taxes, licenses and market fees, and which are intended primarily and exclusively for the purpose of financing the governmental activities and functions of the municipality, are exempt from execution Absent a showing that the municipal council of Makati has passed an ordinance appropriating from its public funds an amount corresponding to the balance due under the RTC decision dated June 4, 1987, less the sum of P99,743.94 deposited in Account No. S/A 265-537154-3, no levy under execution may be validly effected on the public funds of petitioner deposited in Account No. S/A 263-530850-7.

Nevertheless, this is not to say that private respondent and PSB are left with no legal recourse. Where a municipality fails or refuses, without justifiable reason, to effect payment of a final money judgment rendered against it, the claimant may avail of the remedy of mandamus in order to compel the enactment and approval of the necessary appropriation ordinance, and the corresponding disbursement of municipal funds therefor.

Just Compensation means not only the correct determination of the amount to be paid to the owner of the land but also the payment of the land within a reasonable time from its taking . Without prompt payment, compensation cannot be considered "just" for the property owner is made to suffer the consequence of being immediately deprived of his land while being made to wait for a decade or more before actually receiving the amount necessary to cope with his loss.

The State's power of eminent domain should be exercised within the bounds of fair play and justice. In the case at bar, considering that valuable property has been taken, the compensation to be paid fixed and the municipality is in full possession and utilizing the property for public purpose, for three (3) years, the Court finds that the municipality has had more than reasonable time to pay full compensation.

18) G.R. No. L-55963 December 1, 1989

SPOUSES JOSE FONTANILLA AND VIRGINIA FONTANILLA, petitioners, vs.HONORABLE INOCENCIO D. MALIAMAN and

NATIONAL IRRIGATION ADMINISTRATION, respondents.

G.R. No. L-61045 December 1, 1989

NATIONAL IRRIGATION ADMINISTRATION, appellant, vs.SPOUSES JOSE FONTANILLA and VIRGINIA FONTANILLA, appellees.

Facts:

A pickup owned and operated by respondent National Irrigation Administration (NIA), a government agency, then driven officially by Hugo Garcia, an employee of said agency as its regular driver, bumped a bicycle ridden by Francisco Fontanilla, son of herein petitioners, as a result of the impact, Francisco died.

NIA was held liable for damages resulting to the death of the son of herein petitioner spouses caused by the fault and/or negligence of the driver of the said agency.NIA maintains that it does not perform solely and primarily proprietary functions but is an agency of the government tasked with governmental functions, and is therefore not liable for the tortious act of its driver Garcia, who was not its special agent.

Issue:Whether NIA is performing governmental functions and is thus exempt form suit for damages caused by the negligent act of its driver who is not its special agent

Held:

                No. The functions of government have been classified into governmental or constituent and proprietary or ministrant. The former involves the exercise of sovereignty and considered as compulsory; the latter connotes merely the exercise of proprietary functions and thus considered as optional. The functions of providing water supply and sewerage service are regarded as mere optional functions of government even though the service rendered caters to the community as a whole and the goal is for the general interest of society.

                The NIA was not created for purposes of local government. While it may be true that the NIA was essentially a service agency of the government aimed at promoting public interest and public welfare, such fact does not make the NIA essentially and purely a “government-function” corporation. NIA was created for the purpose of “constructing, improving, rehabilitating, and administering all national irrigation systems in the Philippines, including all communal and pump irrigation projects.” Certainly, the state and the community as a whole are largely benefited by the services the agency renders, but these functions are only incidental to the principal aim of the agency, which is the irrigation of lands.

                The NIA is a government agency with a juridical personality separate and distinct from the government. It is not a

mere agency of the government but a corporate body performing proprietary functions. Therefore, it may be held liable for the damages caused by the negligent act of its driver who was not its special agent.

19) Province of North Cotabato vs GRP Peace Panel on Ancestral Domain G.R. No. 1833591, October 14, 2008

Decision:

CARPIO MORALES, J.:

Subject of these consolidated cases is the extent of the powers of the President in pursuing the peace process. While the facts surrounding this controversy center on the armed conflict in Mindanao between the government and the Moro Islamic Liberation Front (MILF), the legal issue involved has a bearing on all areas in the country where there has been a long-standing armed conflict. Yet again, the Court is tasked to perform a delicate balancing act. It must uncompromisingly delineate the bounds within which the President may lawfully exercise her discretion, but it must do so in strict adherence to the Constitution, lest its ruling unduly restricts the freedom of action vested by that same Constitution in the Chief Executive precisely to enable her to pursue the peace process effectively.

Facts:

On August 5, 2008, the Government of the Republic of the Philippines (GRP) and the MILF, through the Chairpersons of their respective peace negotiating panels, were scheduled to sign a Memorandum of Agreement on the Ancestral Domain (MOA-AD) Aspect of the GRP-MILF Tripoli Agreement on Peace of 2001 in Kuala Lumpur, Malaysia.

The signing of the MOA-AD between the GRP and the MILF was not to materialize, however, for upon motion of petitioners, specifically those who filed their cases before the scheduled signing of the MOA-AD, this Court issued a Temporary Restraining Order enjoining the GRP from signing the same.

The MOA-AD was preceded by a long process of negotiation and the concluding of several prior agreements between the two parties beginning in 1996, when the GRP-MILF peace negotiations began. On July 18, 1997, the GRP and MILF Peace Panels signed the Agreement on General Cessation of Hostilities. The following year, they signed the General Framework of Agreement of Intent on August 27, 1998.

On July 23, 2008, the Province of North Cotabato and Vice-Governor Emmanuel Piñol filed a petition, docketed as G.R. No. 183591, for Mandamus and Prohibition with Prayer for the Issuance of Writ of Preliminary Injunction and Temporary Restraining Order. Invoking the right to information on matters of public concern, petitioners seek to compel respondents to disclose and furnish them the complete and official copies of the MOA-AD including its attachments, and to prohibit the slated signing of the MOA-AD, pending the disclosure of the contents of

the MOA-AD and the holding of a public consultation thereon. Supplementarily, petitioners pray that the MOA-AD be declared unconstitutional.

Issues:

1. Whether the petitions have become moot and academic

(i) insofar as the mandamus aspect is concerned, in view of the disclosure of official copies of the final draft of the Memorandum of Agreement (MOA); and

(ii) insofar as the prohibition aspect involving the Local Government Units is concerned, if it is considered that consultation has become fait accompli with the finalization of the draft;

2. Whether the constitutionality and the legality of the MOA is ripe for adjudication;

3. Whether respondent Government of the Republic of the Philippines Peace Panel committed grave abuse of discretion amounting to lack or excess of jurisdiction when it negotiated and initiated the MOA vis-à-vis ISSUES Nos. 4 and 5;

4. Whether there is a violation of the people's right to information on matters of public concern (1987 Constitution, Article III, Sec. 7) under a state policy of full disclosure of all its transactions involving public interest (1987 Constitution, Article II, Sec. 28) including public consultation under Republic Act No. 7160 (LOCAL GOVERNMENT CODE OF 1991)[;]

If it is in the affirmative, whether prohibition under Rule 65 of the 1997 Rules of Civil Procedure is an appropriate remedy;

5. Whether by signing the MOA, the Government of the Republic of the Philippines would be BINDING itself

a) to create and recognize the Bangsamoro Juridical Entity (BJE) as a separate state, or a juridical, territorial or political subdivision not recognized by law;

b) to revise or amend the Constitution and existing laws to conform to the MOA;

c) to concede to or recognize the claim of the Moro Islamic Liberation Front for ancestral domain in violation of Republic Act No. 8371 (THE INDIGENOUS PEOPLES RIGHTS ACT OF 1997), particularly Section 3(g) & Chapter VII (DELINEATION, RECOGNITION OF ANCESTRAL DOMAINS)[;]

If in the affirmative, whether the Executive Branch has the authority to so bind the Government of the Republic of the Philippines;

6. Whether the inclusion/exclusion of the Province of North Cotabato, Cities of Zamboanga, Iligan and Isabela, and the Municipality of Linamon, Lanao del Norte in/from the areas covered by the projected Bangsamoro Homeland is a justiciable question; and

7. Whether desistance from signing the MOA derogates any prior valid commitments of the Government of the Republic of the Philippines.

Held:

The main body of the MOA-AD is divided into four strands, namely, Concepts and Principles, Territory, Resources, and Governance.

The power of judicial review is limited to actual cases or controversies. Courts decline to issue advisory opinions or to resolve hypothetical or feigned problems, or mere academic questions. The limitation of the power of judicial review to actual cases and controversies defines the role assigned to the judiciary in a tripartite allocation of power, to assure that the courts will not intrude into areas committed to the other branches of government.

As the petitions involve constitutional issues which are of paramount public interest or of transcendental importance, the Court grants the petitioners, petitioners-in-intervention and intervening respondents the requisite locus standi in keeping with the liberal stance adopted in David v. Macapagal-Arroyo.

Contrary to the assertion of respondents that the non-signing of the MOA-AD and the eventual dissolution of the GRP Peace Panel mooted the present petitions, the Court finds that the present petitions provide an exception to the "moot and academic" principle in view of (a) the grave violation of the Constitution involved; (b) the exceptional character of the situation and paramount public interest; (c) the need to formulate controlling principles to guide the bench, the bar, and the public; and (d) the fact that the case is capable of repetition yet evading review.

The MOA-AD is a significant part of a series of agreements necessary to carry out the GRP-MILF Tripoli Agreement on Peace signed by the government and the MILF back in June 2001. Hence, the present MOA-AD can be renegotiated or another one drawn up that could contain similar or significantly dissimilar provisions compared to the original.

That the subject of the information sought in the present cases is a matter of public concern faces no serious challenge. In fact, respondents admit that the MOA-AD is indeed of public concern. In previous cases, the Court found that the regularity of real estate transactions entered in the Register of Deeds, the need for adequate notice to the public of the various laws, the civil service eligibility of a public employee, the proper management of GSIS funds allegedly used to grant loans to public officials, the recovery of the Marcoses' alleged ill-gotten wealth, and the identity of party-list nominees, among others, are matters of public concern. Undoubtedly, the MOA-AD subject of the present cases is of public concern, involving as it does the sovereignty and territorial integrity of the State, which directly affects the lives of the public at large.

In sum, the Presidential Adviser on the Peace Process

committed grave abuse of discretion when he failed to carry out the pertinent consultation process, as mandated by E.O. No. 3, Republic Act No. 7160, and Republic Act No. 8371. The furtive process by which the MOA-AD was designed and crafted runs contrary to and in excess of the legal authority, and amounts to a whimsical, capricious, oppressive, arbitrary and despotic exercise thereof. It illustrates a gross evasion of positive duty and a virtual refusal to perform the duty enjoined.

The MOA-AD cannot be reconciled with the present Constitution and laws. Not only its specific provisions but the very concept underlying them, namely, the associative relationship envisioned between the GRP and the BJE, are unconstitutional, for the concept presupposes that the associated entity is a state and implies that the same is on its way to independence.

The Memorandum of Agreement on the Ancestral Domain Aspect of the GRP-MILF Tripoli Agreement on Peace of 2001 is declared contrary to law and the Constitution.