PAGE TWO CASES

Manila Prince Hotel v. GSIS, G.R. No. 122156, February 3, 1997

DECISION
(En Banc)

BELLOSILLO, J.:

I. THE FACTS

Pursuant to the privatization program of the Philippine Government, the GSIS sold
in public auction its stake in Manila Hotel Corporation (MHC). Only 2 bidders
participated: petitioner Manila Prince Hotel Corporation, a Filipino corporation,
which offered to buy 51% of the MHC or 15,300,000 shares at P41.58 per share,
and Renong Berhad, a Malaysian firm, with ITT-Sheraton as its hotel operator,
which bid for the same number of shares at P44.00 per share, or P2.42 more than
the bid of petitioner.

Petitioner filed a petition before the Supreme Court to compel the GSIS to allow it
to match the bid of Renong Berhad. It invoked the Filipino First Policy enshrined in
10, paragraph 2, Article XII of the 1987 Constitution, which provides that in the
grant of rights, privileges, and concessions covering the national economy and
patrimony, the State shall give preference to qualified Filipinos.

II. THE ISSUES

1. Whether 10, paragraph 2, Article XII of the 1987 Constitution is a self-

executing provision and does not need implementing legislation to carry it into
effect;
2. Assuming 10, paragraph 2, Article XII is self-executing, whether the
controlling shares of the Manila Hotel Corporation form part of our patrimony as
a nation;
3. Whether GSIS is included in the term State, hence, mandated to implement
10, paragraph 2, Article XII of the Constitution; and
4. Assuming GSIS is part of the State, whether it should give preference to the
petitioner, a Filipino corporation, over Renong Berhad, a foreign corporation, in
the sale of the controlling shares of the Manila Hotel Corporation.

III. THE RULING

[The Court, voting 11-4, DISMISSED the petition.]

1. YES, 10, paragraph 2, Article XII of the 1987 Constitution is a self-executing

provision and does not need implementing legislation to carry it into effect.

Sec. 10, second par., of Art XII is couched in such a way as not to make it appear
that it is non-self-executing but simply for purposes of style. But, certainly, the
legislature is not precluded from enacting further laws to enforce the
constitutional provision so long as the contemplated statute squares with the
Constitution. Minor details may be left to the legislature without impairing the
self-executing nature of constitutional provisions.

xxx xxx xxx

Respondents . . . argue that the non-self-executing nature of Sec. 10, second par.,
of Art. XII is implied from the tenor of the first and third paragraphs of the same
section which undoubtedly are not self-executing. The argument is flawed. If the
first and third paragraphs are not self-executing because Congress is still to enact
measures to encourage the formation and operation of enterprises fully owned
by Filipinos, as in the first paragraph, and the State still needs legislation to
regulate and exercise authority over foreign investments within its national
jurisdiction, as in the third paragraph, then a fortiori, by the same logic, the
second paragraph can only be self-executing as it does not by its language require
any legislation in order to give preference to qualified Filipinos in the grant of
rights, privileges and concessions covering the national economy and
patrimony. A constitutional provision may be self-executing in one part and non-
self-executing in another.

xxx. Sec. 10, second par., Art. XII of the 1987 Constitution is a mandatory, positive
command which is complete in itself and which needs no further guidelines or
implementing laws or rules for its enforcement. From its very words the provision
does not require any legislation to put it in operation. It is per se judicially
enforceable. When our Constitution mandates that [i]n the grant of rights,
privileges, and concessions covering national economy and patrimony, the State
shall give preference to qualified Filipinos, it means just that - qualified Filipinos
shall be preferred. And when our Constitution declares that a right exists in
certain specified circumstances an action may be maintained to enforce such right
notwithstanding the absence of any legislation on the subject; consequently, if
there is no statute especially enacted to enforce such constitutional right, such
right enforces itself by its own inherent potency and puissance, and from which
all legislations must take their bearings. Where there is a right there is a
remedy. Ubi jus ibi remedium.

2. YES, the controlling shares of the Manila Hotel Corporation form part of our
patrimony as a nation.

In its plain and ordinary meaning, the term patrimony pertains to heritage. When
the Constitution speaks of national patrimony, it refers not only to the natural
resources of the Philippines, as the Constitution could have very well used the
term natural resources, but also to the cultural heritage of the Filipinos.

xxx xxx xxx

For more than eight (8) decades Manila Hotel has bore mute witness to the
triumphs and failures, loves and frustrations of the Filipinos; its existence is
impressed with public interest; its own historicity associated with our struggle for
sovereignty, independence and nationhood. Verily, Manila Hotel has become
part of our national economy and patrimony. For sure, 51% of the equity of the
MHC comes within the purview of the constitutional shelter for it comprises the
majority and controlling stock, so that anyone who acquires or owns the 51% will
have actual control and management of the hotel. In this instance, 51% of the
MHC cannot be disassociated from the hotel and the land on which the hotel
edifice stands. Consequently, we cannot sustain respondents claim that
the Filipino First Policy provision is not applicable since what is being sold is only
51% of the outstanding shares of the corporation, not the Hotel building nor the
land upon which the building stands.
3. YES, GSIS is included in the term State, hence, it is mandated to implement
10, paragraph 2, Article XII of the Constitution.

It is undisputed that the sale of 51% of the MHC could only be carried out with
the prior approval of the State acting through respondent Committee on
Privatization. [T]his fact alone makes the sale of the assets of respondents GSIS
and MHC a state action. In constitutional jurisprudence, the acts of persons
distinct from the government are considered state action covered by the
Constitution (1) when the activity it engages in is a public function; (2) when the
government is so significantly involved with the private actor as to make the
government responsible for his action; and, (3) when the government has
approved or authorized the action. It is evident that the act of respondent GSIS in
selling 51% of its share in respondent MHC comes under the second and third
categories of state action. Without doubt therefore the transaction, although
entered into by respondent GSIS, is in fact a transaction of the State and
therefore subject to the constitutional command.

When the Constitution addresses the State it refers not only to the people but
also to the government as elements of the State. After all, government is
composed of three (3) divisions of power - legislative, executive and
judicial. Accordingly, a constitutional mandate directed to the State is
correspondingly directed to the three (3) branches of government. It is
undeniable that in this case the subject constitutional injunction is addressed
among others to the Executive Department and respondent GSIS, a government
instrumentality deriving its authority from the State.

4. YES, GSIS should give preference to the petitioner in the sale of the
controlling shares of the Manila Hotel Corporation.

It should be stressed that while the Malaysian firm offered the higher bid it is not
yet the winning bidder. The bidding rules expressly provide that the highest
bidder shall only be declared the winning bidder after it has negotiated and
executed the necessary contracts, and secured the requisite approvals. Since
the Filipino First Policy provision of the Constitution bestows preference
on qualified Filipinos the mere tending of the highest bid is not an assurance that
the highest bidder will be declared the winning bidder. Resultantly, respondents
are not bound to make the award yet, nor are they under obligation to enter into
one with the highest bidder. For in choosing the awardee respondents are
mandated to abide by the dictates of the 1987 Constitution the provisions of
which are presumed to be known to all the bidders and other interested parties.

xxx xxx xxx

Paragraph V. J. 1 of the bidding rules provides that [i]f for any reason the Highest
Bidder cannot be awarded the Block of Shares, GSIS may offer this to other
Qualified Bidders that have validly submitted bids provided that these Qualified
Bidders are willing to match the highest bid in terms of price per share. Certainly,
the constitutional mandate itself is reason enough not to award the block of
shares immediately to the foreign bidder notwithstanding its submission of a
higher, or even the highest, bid. In fact, we cannot conceive of
a stronger reason than the constitutional injunction itself.

In the instant case, where a foreign firm submits the highest bid in a public
bidding concerning the grant of rights, privileges and concessions covering the
national economy and patrimony, thereby exceeding the bid of a Filipino, there is
no question that the Filipino will have to be allowed to match the bid of the
foreign entity. And if the Filipino matches the bid of a foreign firm the award
should go to the Filipino. It must be so if we are to give life and meaning to
the Filipino First Policy provision of the 1987 Constitution. For, while this may
neither be expressly stated nor contemplated in the bidding rules, the
constitutional fiat is omnipresent to be simply disregarded. To ignore it would be
to sanction a perilous skirting of the basic law.
Rev. Ely Velez Pamatong Vs. Commission on Elections
G.R. No. 161872, April 13, 2004

FACTS:

Petitioner Pamatong filed his Certificate of Candidacy (COC) for President.

Respondent COMELEC declared petitioner and 35 others as nuisance candidates
who could not wage a nationwide campaign and/or are not nominated by a
political party or are not supported by a registered political party with a national
constituency.

Pamatong filed a Petition For Writ of Certiorari with the Supreme Court claiming
that the COMELEC violated his right to "equal access to opportunities for public
service" under Section 26, Article II of the 1987 Constitution, by limiting the
number of qualified candidates only to those who can afford to wage a
nationwide campaign and/or are nominated by political parties. The COMELEC
supposedly erred in disqualifying him since he is the most qualified among all the
presidential candidates, i.e., he possesses all the constitutional and legal
qualifications for the office of the president, he is capable of waging a national
campaign since he has numerous national organizations under his leadership, he
also has the capacity to wage an international campaign since he has practiced
law in other countries, and he has a platform of government.

ISSUE:

Is there a constitutional right to run for or hold public office?

RULING:

No. What is recognized in Section 26, Article II of the Constitution is merely a

privilege subject to limitations imposed by law. It neither bestows such a right nor
elevates the privilege to the level of an enforceable right. There is nothing in the
plain language of the provision which suggests such a thrust or justifies an
interpretation of the sort.

The "equal access" provision is a subsumed part of Article II of the Constitution,

entitled "Declaration of Principles and State Policies." The provisions under the
Article are generally considered not self-executing, and there is no plausible
reason for according a different treatment to the "equal access" provision. Like
the rest of the policies enumerated in Article II, the provision does not contain
any judicially enforceable constitutional right but merely specifies a guideline for
legislative or executive action. The disregard of the provision does not give rise to
any cause of action before the courts.

Obviously, the provision is not intended to compel the State to enact positive
measures that would accommodate as many people as possible into public office.
Moreover, the provision as written leaves much to be desired if it is to be
regarded as the source of positive rights. It is difficult to interpret the clause as
operative in the absence of legislation since its effective means and reach are not
properly defined. Broadly written, the myriad of claims that can be subsumed
under this rubric appear to be entirely open-ended. Words and phrases such as
"equal access," "opportunities," and "public service" are susceptible to countless
interpretations owing to their inherent impreciseness. Certainly, it was not the
intention of the framers to inflict on the people an operative but amorphous
foundation from which innately unenforceable rights may be sourced.

The privilege of equal access to opportunities to public office may be subjected to

limitations. Some valid limitations specifically on the privilege to seek elective
office are found in the provisions of the Omnibus Election Code on "Nuisance
Candidates. As long as the limitations apply to everybody equally without
discrimination, however, the equal access clause is not violated. Equality is not
sacrificed as long as the burdens engendered by the limitations are meant to be
borne by any one who is minded to file a certificate of candidacy. In the case at
bar, there is no showing that any person is exempt from the limitations or the
burdens which they create.

The rationale behind the prohibition against nuisance candidates and the
disqualification of candidates who have not evinced a bona fide intention to run
for office is easy to divine. The State has a compelling interest to ensure that its
electoral exercises are rational, objective, and orderly. Towards this end, the State
takes into account the practical considerations in conducting elections. Inevitably,
the greater the number of candidates, the greater the opportunities for logistical
confusion, not to mention the increased allocation of time and resources in
preparation for the election. The organization of an election with bona fide
candidates standing is onerous enough. To add into the mix candidates with no
serious intentions or capabilities to run a viable campaign would actually impair
the electoral process. This is not to mention the candidacies which are palpably
ridiculous so as to constitute a one-note joke. The poll body would be bogged by
irrelevant minutiae covering every step of the electoral process, most probably
posed at the instance of these nuisance candidates. It would be a senseless
sacrifice on the part of the State.

The question of whether a candidate is a nuisance candidate or not is both legal

and factual. The basis of the factual determination is not before this Court. Thus,
the remand of this case for the reception of further evidence is in order. The SC
remanded to the COMELEC for the reception of further evidence, to determine
the question on whether petitioner Elly Velez Lao Pamatong is a nuisance
candidate as contemplated in Section 69 of the Omnibus Election Code.

Obiter Dictum: One of Pamatong's contentions was that he was an international

lawyer and is thus more qualified compared to the likes of Erap, who was only a
high school dropout. Under the Constitution (Article VII, Section 2), the only
requirements are the following: (1) natural-born citizen of the Philippines; (2)
registered voter; (3) able to read and write; (4) at least forty years of age on the
day of the election; and (5) resident of the Philippines for at least ten years
immediately preceding such election.

At any rate, Pamatong was eventually declared a nuisance candidate and was
disqualified.
MAGALONA VS ERMITA
G.R. No. 187167 16Aug2011
Prof. Merlin Magalona, et al., Petitioners,
vs
Hon. Eduardo Ermita in his capacityas Executive Secretary, et al., Respondents.

Facts:
In March 2009, R.A. 9522 was enacted by the Congress to comply with the terms
of the United Nations Convention on the Law of the Sea (UNCLOS III), which the
Philippines ratified on February 27, 1984.

Professor Merlin Magallona et al questioned the validity of RA 9522 as they

contend, among others, that the law decreased the national territory of the
Philippines. Some of their particular arguments are as follows:
RA 9522 reduces Philippine maritime territory, and logically, the reach of the
Philippine states sovereign power, in violation of Article 1 of the 1987
Constitution, embodying the terms of the Treaty of Paris and ancillary treaties.
RA 9522 opens the countrys waters landward of the baselines to maritime
passage by all vessels and aircrafts, undermining Philippine sovereignty and
national security, contravening the countrys nuclear-free policy, and damaging
marine resources, in violation of relevant constitutional provisions.
RA 9522s treatmentof the KIG as regime of islands not only results in the loss of
a large maritime area but also prejudices the livelihood of subsistence fishermen.

Hence, petitioners files action for the writs of certiorari and prohibition assails the
constitutionality of Republic Act No. 95221 (RA 9522) adjusting the countrys
archipelagic baselines and classifying the baseline regime of nearby territories.

Issues:
Whether or not RA 9522, the amendatory Philippine Baseline Law is
unconstitutional.

Discussions:
The provision of Art I 198 Constitution clearly affirms the archipelagic doctrine,
which we connect the outermost points of our archipelago with straight baselines
and consider all the waters enclosed thereby as internal waters. RA 9522, as a
Statutory Tool to Demarcate the Countrys Maritime Zones and Continental Shelf
Under UNCLOS III, gave nothing less than an explicit definition in congruent with
the archipelagic doctrine.

Rulings:
No. The Court finds R.A. 9522 constitutional. It is a Statutory Tool to Demarcate
the Countrys Maritime Zones and Continental Shelf Under UNCLOS III, not to
Delineate Philippine Territory. It is a vital step in safeguarding the countrys
maritime zones. It also allows an internationally-recognized delimitation of the
breadth of the Philippines maritime zones and continental shelf.

Additionally, The Court finds that the conversion of internal waters into
archipelagic waters will not risk the Philippines as affirmed in the Article 49 of the
UNCLOS III, an archipelagic State has sovereign power that extends to the waters
enclosed by the archipelagic baselines, regardless of their depth or distance from
the coast. It is further stated that the regime of archipelagic sea lanes passage will
not affect the status of its archipelagic waters or the exercise of sovereignty over
waters and air space, bed and subsoil and the resources therein.

The Court further stressed that the baseline laws are mere mechanisms for the
UNCLOS III to precisely describe the delimitations. It serves as a notice to the
international family of states and it is in no way affecting or producing any effect
like enlargement or diminution of territories.
PROVINCE OF NORTH COTABATO VS GOVERNMENT OF THE REPUBLIC OF THE
PHILIPPINES
Posted by kaye lee on 9:43 PM

G.R. No. 183591 October 14 2008

Province of North Cotabato vs Government of the Republic of the Philippines

FACTS:
On August 5, 2008, the Government of the Republic of the Philippines and the
Moro Islamic Liberation Front (MILF) were scheduled to sign a Memorandum of
Agreement of the Ancestral Domain Aspect of the GRP - MILF Tripoli Agreement
on Peace of 2001 in Kuala Lumpur, Malaysia.
Invoking the right to information on matters of public concern, the petitioners
seek to compel respondents to disclose and furnish them the complete and
official copies of the MA-AD and to prohibit the slated signing of the MOA-AD and
the holding of public consultation thereon. They also pray that the MOA-AD be
declared unconstitutional. The Court issued a TRO enjoining the GRP from signing
the same.

ISSUES:
1. Whether or not the constitutionality and the legality of the MOA is ripe for
adjudication;
2. Whether or not there is a violation of the people's right to information on
matters of public concern (Art 3 Sec. 7) under a state policy of full disclosure of all
its transactions involving public interest (Art 2, Sec 28) including public
consultation under RA 7160 (Local Government Code of 1991)
3. Whether or not the signing of 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)
RULINGS:
1. Yes, the petitions are ripe for adjudication. The failure of the respondents to
consult the local government units or communities affected constitutes a
departure by respondents from their mandate under EO No. 3. Moreover, the
respondents exceeded their authority by the mere act of guaranteeing
amendments to the Constitution. Any alleged violation of the Constitution by any
branch of government is a proper matter for judicial review.
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.
In Pimentel, Jr. v. Aguirre, this Court held:
x x x [B]y the mere enactment of the questioned law or the approval of the
challenged action, the dispute is said to have ripened into a judicial controversy
even without any other overt act . Indeed, even a singular violation of the
Constitution and/or the law is enough to awaken judicial duty.x x x x
By the same token, when an act of the President, who in our constitutional
scheme is a coequal of Congress, is seriously alleged to have infringed the
Constitution and the laws x x x settling the dispute becomes the duty and the
responsibility of the courts.
That the law or act in question is not yet effective does not negate ripeness.

2. Yes. The Court finds that there is a grave violation of the Constitution involved
in the matters of public concern (Sec 7 Art III) under a state policy of full
disclosure of all its transactions involving public interest (Art 2, Sec 28) including
public consultation under RA 7160 (Local Government Code of 1991).
(Sec 7 ArtIII) The right to information guarantees the right of the people to
demand information, while Sec 28 recognizes the duty of officialdom to give
information even if nobody demands. The complete and effective exercise of the
right to information necessitates that its complementary provision on public
disclosure derive the same self-executory nature, subject only to reasonable
safeguards or limitations as may be provided by law.
The contents of the MOA-AD is a matter of paramount public concern involving
public interest in the highest order. In declaring that the right to information
contemplates steps and negotiations leading to the consummation of the
contract, jurisprudence finds no distinction as to the executory nature or
commercial character of the agreement.
E.O. No. 3 itself is replete with mechanics for continuing consultations on both
national and local levels and for a principal forum for consensus-building. In fact,
it is the duty of the Presidential Adviser on the Peace Process to conduct regular
dialogues to seek relevant information, comments, advice, and recommendations
from peace partners and concerned sectors of society.

3.
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;

Yes. The provisions of the MOA indicate, among other things, that the Parties
aimed to vest in the BJE the status of an associated state or, at any rate, a status
closely approximating it.
The concept of association is not recognized under the present Constitution.

No province, city, or municipality, not even the ARMM, is recognized under our
laws as having an associative relationship with the national government.
Indeed, the concept implies powers that go beyond anything ever granted by the
Constitution to any local or regional government. It also implies the recognition of
the associated entity as a state. The Constitution, however, does not contemplate
any state in this jurisdiction other than the Philippine State, much less does it
provide for a transitory status that aims to prepare any part of Philippine territory
for independence.

The BJE is a far more powerful entity than the autonomous region recognized in
the Constitution. It is not merely an expanded version of the ARMM, the status of
its relationship with the national government being fundamentally different from
that of the ARMM. Indeed, BJE is a state in all but name as it meets the criteria of
a state laid down in the Montevideo Convention, namely, a permanent
population, a defined territory, a government, and a capacity to enter into
relations with other states.

Even assuming arguendo that the MOA-AD would not necessarily sever any
portion of Philippine territory, the spirit animating it which has betrayed itself
by its use of the concept of association runs counter to the national sovereignty
and territorial integrity of the Republic.

The defining concept underlying the relationship between the national

government and the BJE being itself contrary to the present Constitution, it is not
surprising that many of the specific provisions of the MOA-AD on the formation
and powers of the BJE are in conflict with the Constitution and the laws. The BJE is
more of a state than an autonomous region. But even assuming that it is covered
by the term autonomous region in the constitutional provision just quoted, the
MOA-AD would still be in conflict with it.

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

The MOA-AD provides that any provisions of the MOA-AD requiring amendments
to the existing legal framework shall come into force upon the signing of a
Comprehensive Compact and upon effecting the necessary changes to the legal
framework, implying an amendment of the Constitution to accommodate the
MOA-AD. This stipulation, in effect, guaranteed to the MILF the amendment of
the Constitution .

It will be observed that the President has authority, as stated in her oath of office,
only to preserve and defend the Constitution. Such presidential power does not,
however, extend to allowing her to change the Constitution, but simply to
recommend proposed amendments or revision. As long as she limits herself to
recommending these changes and submits to the proper procedure for
constitutional amendments and revision, her mere recommendation need not be
construed as an unconstitutional act.

The suspensive clause in the MOA-AD viewed in light of the above-discussed

standards.

Given the limited nature of the Presidents authority to propose constitutional

amendments, she cannot guarantee to any third party that the required
amendments will eventually be put in place, nor even be submitted to a
plebiscite. The most she could do is submit these proposals as recommendations
either to Congress or the people, in whom constituent powers are vested.
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)
This strand begins with the statement that it is the birthright of all Moros and all
Indigenous peoples of Mindanao to identify themselves and be accepted as
Bangsamoros. It defines Bangsamoro people as the natives or original
inhabitants of Mindanao and its adjacent islands including Palawan and the Sulu
archipelago at the time of conquest or colonization, and their descendants
whether mixed or of full blood, including their spouses.

Thus, the concept of Bangsamoro, as defined in this strand of the MOA-AD,

includes not only Moros as traditionally understood even by Muslims, but all
indigenous peoples of Mindanao and its adjacent islands. The MOA-AD adds that
the freedom of choice of indigenous peoples shall be respected. What this
freedom of choice consists in has not been specifically defined. The MOA-AD
proceeds to refer to the Bangsamoro homeland, the ownership of which is
vested exclusively in the Bangsamoro people by virtue of their prior rights of
occupation. Both parties to the MOA-AD acknowledge that ancestral domain does
not form part of the public domain.

Republic Act No. 8371 or the Indigenous Peoples Rights Act of 1997 provides for
clear-cut procedure for the recognition and delineation of ancestral domain,
which entails, among other things, the observance of the free and prior informed
consent of the Indigenous Cultural Communities/Indigenous Peoples. Notably, the
statute does not grant the Executive Department or any government agency the
power to delineate and recognize an ancestral domain claim by mere agreement
or compromise.

Two, Republic Act No. 7160 or the Local Government Code of 1991 requires all
national offices to conduct consultations beforeany project or program critical to
the environment and human ecology including those that may call for the eviction
of a particular group of people residing in such locality, is implemented therein.
The MOA-AD is one peculiar program that unequivocally and unilaterally vests
ownership of a vast territory to the Bangsamoro people, which could pervasively
and drastically result to the diaspora or displacement of a great number of
inhabitants from their total environment.

CONCLUSION:
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.
REPUBLIC OF THE PHILIPPINES v. SANDIGANBAYAN et al . 402 SCRA 84(2003)
The PCGG cannot vote sequestered shares to elect the ETPI Board of Directors or
to amend the Articles of Incorporation for the purpose of increasing the
authorized capital stock unless there is a prima facie evidence showing that said
shares are ill-gotten and there is an imminent danger of dissipation.
Two sets of board and officers of Eastern Telecommunications, Philippines, Inc.
(ETPI) were elected, one by the Presidential Commission on Good Government
(PCGG) and the other by the registered ETPI stockholders.Victor Africa, a
stockholder of ETPI filed a petition for Certiorari before the Sandiganbayan
alleging that the PCGG had been illegally exercising the rights of stockholders of
ETPI, in the election of the members of the board of directors. The
Sandiganbayan ruled that only the registered owners, their duly authorized
representatives or their proxies may vote their corresponding shares. The PCGG
filed a petition for certiorari, mandamus and prohibition before the Court which
was granted. The Court referred the PCGGs petition to hold the special
stockholders meeting to the Sandiganbayan for reception of evidence and
resolution. The Sandiganbayan granted the PCGG authority to cause the holding
of a special stockholders meeting of ETPI and held that there was an urgent
necessity to increase ETPIs authorized capital stock; there existed a prima facie
factual foundation for the issuance of the writ of sequestration covering the Class
A shares of stock; and the PCGG was entitled to vote the sequestered shares of
stock. The PCGG-controlled ETPI board of directors held a meeting and the
increase in ETPIs authorized capital stock from P250 Million to P2.6 Billion was
unanimously approved. Africa filed a motion to nullify the stockholders
meeting, contending that only the Court, and not the Sandiganbayan, has the
power to authorize the PCGG to call a stockholders meeting and vote the
sequestered shares. The Sandiganbayan denied the motions for reconsideration
of prompting Africa to file before the Court a second petition, challenging the
Sandiganbayan Resolutions authorizing the holding of a stockholders meeting and
the one denying the motion for reconsideration.
ISSUES:
1. Whether or not the Sandiganbayan gravely abused its discretion in ordering the
holding of a stockholders meeting to elect the ETPI board of directors without first
setting in place, through the amendment of the articles of incorporation and the
by-laws of ETPI 2. Whether the PCGG can vote the sequestered ETPI Class A
shares in the stockholders meeting for the election of the board of directors.
HELD:
First Issue :
On the PCGGs imputation of grave abuse of discretion upon the Sandiganbayan
for ordering the holding of a stockholders meeting to elect the ETPI board of
directors without first setting in place, through the amendment of the articles of
incorporation and the by-laws of ETPI, the safeguards prescribed in Cojuangco, Jr.
v. Roxas. The Court laid down those safeguards because of the obvious need to
reconcile the rights of the stockholder whose shares have been sequestered and
the duty of the conservator to preserve what could be ill-gotten wealth. There is
nothing in the Cojuangco case that would suggest that the above measures
should be incorporated in the articles and by-laws before a stockholders meeting
for the election of the board of directors is held. The PCGG nonetheless insists
that those measures should be written in the articles and by-laws before such
meeting, otherwise, the {Marcos] cronies will elect themselves or their
representatives, control the corporation, and for an appreciable period of time,
have every opportunity to disburse funds, destroy or alter corporate records, and
dissipate assets. That could be a possibility, but the peculiar circumstances of the
case require that the election of the board of directors first be held before the
articles of incorporation are amended. Section 16 of the Corporation Code
requires the majority vote of the board of directors to amend the articles of
incorporation. At the time Africa filed his motion for the holding of
the annual stockholders meeting, there were two sets of ETPI directors, one
controlled by the PCGG and the other by the registered stockholders. Which of
them is the legitimate board of directors? Which of them may rightfully vote to
amend the articles of incorporation and integrate the safeguards laid down in
Cojuangco? It is essential, therefore, to cure the aberration of two boards of
directors sitting in a single corporation before the articles of incorporation are
amended to set in place the Cojuangco safeguards. The danger of the so-called
Marcos cronies taking control of the corporation and dissipating its assets is, of
course, a legitimate concern of the PCGG, charged as it is with the duties of a
conservator. Nevertheless, such danger may be averted by the substantially
contemporaneous amendment of the articles after the election of the board.
Second Issue :
The principle laid down in Baseco vs. PCGG was further enhanced in the
subsequent cases of Cojuangco v. Calpo and Presidential Commission on Good
Government v. Cojuangco, Jr., where the Court developed a two-tiered test in
determining whether the PCGG may vote sequestered shares. The issue of
whether PCGG may vote the sequestered shares in SMC necessitates a
determination of at least two factual matters: a.) whether there is prima facie
evidence showing that the said shares are ill-gotten and thus belong to the state;
and b.) whether there is an immediate danger of dissipation thus necessitating
their continued sequestration and voting by the PCGG while the main issue pends
with the Sandiganbayan. The two-tiered test, however, does not apply in cases
involving funds of public character. In such cases, the government is granted
the authority to vote said shares, namely: (1) Where government shares are taken
over by private persons or entities who/which registered them in their own
names, and (2) Where the capitalization or shares that were acquired with public
funds somehow landed in private hands. In short, when sequestered
shares registered in the names of private individuals or entities are alleged to
have been acquired with ill-gotten wealth, then the two-tiered test is applied.
However, when the sequestered shares in the name of private individuals or
entities are shown, prima facie, to have been (1) originally government shares, or
(2) purchased with public funds or those affected with public interest, then the
two-tiered test does not apply. The rule in the jurisdiction is, therefore, clear. The
PCGG cannot perform acts of strict ownership of sequestered property. It is a
mere conservator. It may not vote the shares in a corporation and elect members
of the board of directors. The only conceivable exception is in a case of a takeover
of a business belonging to the government or whose capitalization comes from
public funds, but which landed in private hands as in BASECO. In short, the
Sandiganbayan held that the public character exception does not apply, in which
case it should have proceeded to apply the two-tiered test. This it failed to do.
The questions thus remain if there is prima facie evidence showing that the
subject shares are ill- gotten and if there is imminent danger of dissipation. The
Court is not, however, a trier of facts, hence, it is not in a position to rule on the
correctness of the PCGGs contention. Consequently, the issue must be remanded
to the Sandiganbayan for resolution.
Begosa vs. PVA

Gaudencio A. Begosa, plantiff-appellee,

vs. Chairman, Philippine Veterans Administration; and Members of the Board of
Administrators, Philippine Veterans Administration, defendants
-
appellants
.
Nature:
Appeal from a decision of the CFI of Manila
Date:
April 30, 1970
Ponente:
Fernando,
J.
Facts:
Plaintiff sought the aid of the judiciary to obtain the benefits to which he
believed he was entitled under the Veterans Bill of Rights.
He filed his claim for disability pension on March 4, 1955 but was erroneously
disapproved on June 21, 1955 due to his dishonorable discharge from the army.
The Board of Administrators of PVA finally approved his claim on September 2,
1964, entitling him with a pension of P30 a month, to take effect on October 5 of
that year.
Believing that his pension should have taken effect back in 1955 when his claim
was disapproved, and that he is entitled to a higher pension of P50 (RA No. 1362
amending Section 9 of RA No. 65) as a permanently incapacitated person, which
was increased toP100 a month when RP 1362 was amended by RA No. 1920 on
June 22, 1957, Begosa filed a case against PVA in the Court of First Instance.
CFI ruled in favor plaintiff.
Defendants claim that the plaintiff has not exhausted all administrative
remedies before resorting to court action and that the plaintiffs claim is in reality
a suit against
the Government which cannot be entertained by this Court for lack of jurisdiction
because the Government has not given its consent.

Issue:
WON the SC can entertain the suit against PVA.

Held:

Yes.

Ratio:
Where a litigation may have adverse consequences on the public treasury,
whether in the disbursements of funds or loss of property, the public official
proceeded against not being liable in his personal capacity, then the
doctrine of non-suitability may appropriately be invoked.

However, it has no application where the suit against such a functionary hadto be
instituted because of his failure to comply with the duty imposed bystatue
appropriating public funds for the benefit of plaintiff.

Also, where there is a stipulation of facts, the question before the lower court
beingsolely one of law and on the face of the decision, the actuation of appellants
being patently illegal, the doctrine of exhaustion of administrative remedies
certainly does not come into play.
REPUBLIC VS FELICIANO
G.R. No. 70853 148 SCRA 424 March 12, 1987
REPUBLIC OF THE PHILIPPINES, petitioner-appellee,
PABLO FELICIANO and INTERMEDIATE APPELLATE COURT, respondents-appellants

Facts:
The appeal was filed by 86 settlers of Barrio of Salvacion, representing the
Republic of the Philippines to dismiss the complaint filed by Feliciano, on the
ground that the Republic of the Philippines cannot be sued without its consent.

Prior to this appeal, respondent Pablo Feliciano filed a complaint with the Court of
First Instance against the Republic of the Philippines, represented by the Land
Authority, for the recovery of ownership and possession of a parcel of land
consisting of four lots. The trial court rendered a decision declaring Lot No. 1 to be
the private property of Feliciano and the rest of the property, Lots 2, 3 and 4,
reverted to the public domain.

The trial court reopened the case due to the filing of a motion to intervene and to
set aside the decision of the trial court by 86 settlers, alleging that they had been
in possession of the land for more than 20 years under claim of ownership. The
trial court ordered the settlers to present their evidence but they did not appear
at the day of presentation of evidence. Feliciano, on the other hand, presented
additional evidence. Thereafter, the case was submitted for decision and the trial
court ruled in favor of Feliciano.

The settlers immediately filed a motion for reconsideration. The case was
reopened to allow them to present their evidence. But before this motion was
acted upon, Feliciano filed a motion for execution with the Appellate Court but it
was denied.

The settlers filed a motion to dismiss on the ground that the Republic of the
Philippines cannot be sued without its consent and hence the action cannot
prosper. The motion was opposed by Feliciano.

Issue/s:
Whether or not the state can be sued for recovery and possession of a parcel of
land.
Discussions:
A suit against the State, under settled jurisprudence is not permitted, except upon
a showing that the State has consented to be sued, either expressly or by
implication through the use of statutory language too plain to be misinterpreted.
It may be invoked by the courts sua sponte at any stage of the proceedings.

Waiver of immunity, being a derogation of sovereignty, will not be inferred lightly.

but must be construed in strictissimi juris (of strictest right). Moreover, the
Proclamation is not a legislative act. The consent of the State to be sued must
emanate from statutory authority. Waiver of State immunity can only be made by
an act of the legislative body.
Ruling/s:
No. The doctrine of non-suability of the State has proper application in this case.
The plaintiff has impleaded the Republic of the Philippines as defendant in an
action for recovery of ownership and possession of a parcel of land, bringing the
State to court just like any private person who is claimed to be usurping a piece of
property. A suit for the recovery of property is not an action in rem, but an
action in personam. It is an action directed against a specific party or parties, and
any judgment therein binds only such party or parties. The complaint filed by
plaintiff, the private respondent herein, is directed against the Republic of the
Philippines, represented by the Land Authority, a governmental agency created by
Republic Act No. 3844.

The complaint is clearly a suit against the State, which under settled jurisprudence
is not permitted, except upon a showing that the State has consented to be sued,
either expressly or by implication through the use of statutory language too plain
to be misinterpreted. There is no such showing in the instant case. Worse, the
complaint itself fails to allege the existence of such consent.
Merritt vs Government of the Philippine Islands

FACTS: Merrit was riding a motorcycle along Padre Faura Street when he was
bumped by the ambulance of the General Hospital. Merrit sustained severe
injuries rendering him unable to return to work. The legislature later enacted Act
2457 authorizing Merritt to file a suit against the Government in order to fix the
responsibility for the collision between his motorcycle and the ambulance of the
General Hospital, and to determine the amount of the damages, if any, to which
he is entitled. After trial, the lower court held that the collision was due to the
negligence of the driver of the ambulance. It then determined the amount of
damages and ordered the government to pay the same.

ISSUES:

1. Did the Government, in enacting the Act 2457, simply waive its immunity from
suit or did it also concede its liability to the plaintiff?

2. Is the Government liable for the negligent act of the driver of the ambulance?

HELD:

1. By consenting to be sued a state simply waives its immunity from suit. It does
not thereby concede its liability to plaintiff, or create any cause of action in his
favor, or extend its liability to any cause not previously recognized. It merely gives
a remedy to enforce a preexisting liability and submits itself to the jurisdiction of
the court, subject to its right to interpose any lawful defense.

2. Under the Civil Code, the state is liable when it acts through a special agent, but
not when the damage should have been caused by the official to whom properly
it pertained to do the act performed. A special agent is one who receives a
definite and fixed order or commission, foreign to the exercise of the duties of his
office if he is a special official. This concept does not apply to any executive agent
who is an employee of the acting administration and who on his own
responsibility performs the functions which are inherent in and naturally pertain
to his office and which are regulated by law and the regulations. The driver of the
ambulance of the General Hospital was not a special agent; thus the Government
is not liable. (Merritt vs Government of the Philippine Islands, G.R. No. L-11154,
March 21 1916, 34 Phil. 311)

NOTE:

The State is responsible in like manner when it acts through a special agent;
but not when the damage has been caused by the official to whom the task done
properly pertains. (Art. 2180 par. 6, Civil Code)

The state is not responsible for the damages suffered by private individuals in
consequence of acts performed by its employees in the discharge of the functions
pertaining to their office, because neither fault nor even negligence can be
presumed on the part of the state in the organization of branches of public
service and in the appointment of its agents. (Merritt vs. Government of the
Philippine Islands)
The State is not liable for the torts committed by its officers or agents whom it
employs, except when expressly made so by legislative enactment. The
government does not undertake to guarantee to any person the fidelity of the
officers or agents whom it employs since that would involve it in all its operations
in endless embarrassments, difficulties and losses, which would be subversive of
the public interest. (Merritt vs. Government of the Philippine Islands)
Santos v. Santos
92 Phil. 281 November 26, 1952

Facts: An undivided parcel of land situated in the Municipality of Las Pias,

Province of Rizal with an area of 21,577 square meters was owned by the
petitioners and the respondent in the proportion of 1/7 undivided share for
Teodora Santos and 1/14 undivided share each for Josefina Santos and Emiliana
Santos and 5/7 undivided share for Leoncio Santos. Petitioners complained that
from 1945 to 1949 Leoncio Santos collected from the Army of the United States of
America rentals for the use and occupation of a parcel of land and later sold the
lot the Administrator of the Civil Aeronautics Administration on or about 13 May
1949. Petitioners demand for the accounting of the payments for the rentals of
the lot and to give to the portion of the fruits of the rentals according to their
portion of the said lot. They also prayed to restore to their ownership the portions
of the said land that belongs to them contending that the said contract of sale is
null and void because it is performed without their consent and to pay the
petitioners for damages and cost. The Administrator of the Civil Aeronautics
Administration moved to dismiss the complaint for lack of jurisdiction and
insufficiency of the complaint against him. This motion was granted on the
ground that the Civil Aeronautics Administration not being a juridical person has
no capacity to sue and be sued and for that reason it cannot come under the
jurisdiction of the court.

Issue: whether or not the petitioners can sue the Civil Aeronautics Administration
who is not a juridical entity.
Held: An obligation or liability of the state created by statute is enforceable
against the officer or agent charged with the duty to execute the law. If there
should be anything demandable which had been paid or delivered to or collected
by officers or agents of the state without the authority of law, the action would
not be against the state but against the responsible officers or agents who
received what was not due the state or made the unauthorized collection.
Punishable acts or omissions committed by officers or agents of the state are
crimes and violations of law perpetuated by such officers or agents and not by the
state.
The same postulate may be applied to torts committed by officers or agents of
the state. Nevertheless, if, where and when the state or its government enters
into a contract, through its officers or agents, in furtherance of a legitimate aim
and purpose and pursuant to constitutional legislative authority, whereby mutual
or reciprocal benefits accrue and rights and obligations arise therefrom, and if the
law granting the authority to enter into such contract does not provide for or
name the officer against whom action may be brought in the event of a breach
thereof, the state itself may be sued even without its consent, because by
entering into a contract the sovereign state has descended to the level of the
citizen and its consent to be used is implied from the very act of entering into
such contract. If the dignity of the state, the sacredness of the institution, the
respect for the government are to be preserved and the dragging of its name in a
suit to be prevented, the legislative department should name the officer or agent
against whom the action may be brought in the event of breach of the contract
entered into under its name and authority. And the omission or failure of the
legislative department to do so is no obstacle or impediment for an individual or
citizen, who is aggrieved by the breach of the contract, to bring an action against
the state itself for the reasons already adverted to, to wit; the descent of the
sovereign state to the level of the individual or citizen with whom it entered into a
contract and its consent to be sued implied from the act of entering into such
contract.
The Civil Aeronautics Administration, even if it is not a juridical entity, cannot
legally prevent a party or parties from enforcing their propriety rights under the
cloak or shield of lack of juridical personality, because it took over all the powers
and assumed all the obligations of the defunct corporation which had entered
into the contract in question. In National Airports Corporation vs. Teodoro *, G.R.
No. L-5122, 30 April 1952, we held that the Civil Aeronautics Administration may
be sued and that the principle of state immunity from suit does not apply to it.
The order appealed from dismissing the complaint as to the Civil Aeronautics
Administration is reversed and the case remanded to the lower court for further
proceedings in accordance with law. No cost shall be taxed.
Aytona v. Castillo
43 SCRA 1 January 19, 1962

Facts: On December 29, 1961, then President Carlos P. Garcia appointed

Dominador R. Aytona as ad interim Governor of the Central Bank. On the same
day, the latter took the corresponding oath. On December 30, 1961, President-
elect Diosdado Macapagal assumed office. The following day, he issued
Administrative Order No. 2 recalling, withdrawing, and cancelling all ad interim
appointment made by President Garcia after December 13, 1961, the date when
he was proclaimed by the Congress as President. On January 1, 1962, President
Macapagal appointed Andres V. Castillo as ad interim Governor of the Central
Bank, and the latter qualified immediately. The records shows that outgoing
President Carlos P. Garcia, all in all, appointed 350 midnight or last minute
appointments on December 29, 1961,which includes Dominador R. Aytona as ad
interim Governor of the Central Bank.
On January 2, 1962, both appointed exercised the powers of their office, although
Castillo informed Aytona of his title thereto; and some unpleasantness developed
in the premises of the Central Bank. However, the next day and thereafter,
Aytona was definitely prevented from holding office in the Central Bank.
Petitioner instituted a proceeding which is practically, a quo warranto, challenging
Castillo's right to exercise the powers of Governor of the Central Bank. Aytona
claims he was validly appointed, had qualified for the post, and therefore, the
subsequent appointment and qualification of Castillo was void, because the
position was then occupied by him. Castillo replies that the appointment of
Aytona had been revoked by Administrative Order No. 2 of Macapagal; and so,
the real issue is whether the new President had power to issue the order of
cancellation of the ad interim appointments made by the past President, even
after the appointees had already qualified.
Issue: Can the new President issue the order of cancellation of the ad interim
appointments made by the past President, even after the appointees had already
qualified.
Held: Normally, when the President makes appointments the consent of the
Commission on Appointments, he has benefit of their advice. When he makes ad
interim appointments, he exercises a special prerogative and is bound to be
prudent to insure approval of his selection either previous consultation with the
members of the Commission or by thereafter explaining to them the reason such
selection. Where, however, as in this case, the Commission on Appointments that
will consider the appointees is different from that existing at the time of the
appointment2 and where the names are to be submitted by successor, who may
not wholly approve of the selections, the President should be doubly careful in
extending such appointments. Now, it is hard to believe that in signing 350
appointments in one night, President Garcia exercised such "double care" which
was required and expected of him; and therefore, there seems to be force to the
contention that these appointments fall beyond the intent and spirit of the
constitutional provision granting to the Executive authority to issue ad interim
appointments.
Under the circumstances above described, what with the separation of powers,
this Court resolves that it must decline to disregard the Presidential
Administrative Order No. 2, cancelling such "midnight" or "last-minute"
appointments.
Of course, the Court is aware of many precedents to the effect that once an
appointment has been issued, it cannot be reconsidered, specially where the
appointee has qualified. But none of them refer to mass ad interim appointments
(three-hundred and fifty), issued in the last hours of an outgoing Chief Executive,
in a setting similar to that outlined herein. On the other hand, the authorities
admit of exceptional circumstances justifying revocation and if any circumstances
justify revocation, those described herein should fit the exception.
WHEREFORE, the Court exercising its judgment and discretion in the matter,
hereby dismiss the action, without costs.
USA v. RUIZ
GR No. L-35645; May 22, 1985

FACTS:
Sometime in May 1972, the United States invited the submission of bids for
certain naval projects. Eligio de Guzman & Co. Inc. responded to the invitation
and submitted bids. Subsequently, the company received two telegrams
requesting it to confirm its price. In June 1972, the copany received a letter which
said that the company did not qualify to receive an award for the projects. The
company then sued the United States of America and individual petitioners
demanding that the company perform the work on the projects, or for the
petitioners to pay damages and to issue a writ of preliminary injunction to
restrain the petitioners from entering into contracts with third parties concerning
the project.

ISSUE:
1) Do the petitioners exercise governmental or proprietary functions?
2) Does the Court have jurisdiction over the case?

HELD:
The rule of State immunity exempts a State from being sued in the courts of
another state without its consent or waiver. This is a necessary consequence of
the principles of independence and equality of states. However, state immunity
now extends only to governmental acts of the state. The restrictive application of
State immunity is proper only when the proceedings arise out of commercial
transactions of the foreign sovereign. In this case, the projects are integral part of
the naval base which is devoted to the defense of the USA and Philippines which
is, indisputably, a function of the government. As such, by virtue of state
immunity, the courts of the Philippines have no jurisdiction over the case for the
US government has not given consent to the filing of this suit.
THE HOLY SEE vs. THE HON. ERIBERTO U. ROSARIO, JR., as Presiding Judge of the
Regional Trial Court of Makati, Branch 61 and STARBRIGHT SALES ENTERPRISES,
INC.
G.R. No. 101949 December 1, 1994
FACTS: Petitioner is the Holy See who exercises sovereignty over the Vatican City
in Rome, Italy, and is represented in the Philippines by the Papal Nuncio; Private
respondent, Starbright Sales Enterprises, Inc., is a domestic corporation engaged
in the real estate business.
This petition arose from a controversy over a parcel of land consisting of 6,000
square meters located in the Municipality of Paranaque registered in the name of
petitioner. Said lot was contiguous with two other lots registered in the name of
the Philippine Realty Corporation (PRC).
The three lots were sold to Ramon Licup, through Msgr. Domingo A. Cirilos, Jr.,
acting as agent to the sellers. Later, Licup assigned his rights to the sale to private
respondent.
In view of the refusal of the squatters to vacate the lots sold to private
respondent, a dispute arose as to who of the parties has the responsibility of
evicting and clearing the land of squatters. Complicating the relations of the
parties was the sale by petitioner of Lot 5-A to Tropicana Properties and
Development Corporation (Tropicana).
private respondent filed a complaint with the Regional Trial Court, Branch 61,
Makati, Metro Manila for annulment of the sale of the three parcels of land, and
specific performance and damages against petitioner, represented by the Papal
Nuncio, and three other defendants: namely, Msgr. Domingo A. Cirilos, Jr., the
PRC and Tropicana
petitioner and Msgr. Cirilos separately moved to dismiss the complaint
petitioner for lack of jurisdiction based on sovereign immunity from suit, and
Msgr. Cirilos for being an improper party. An opposition to the motion was filed
by private respondent.
the trial court issued an order denying, among others, petitioners motion to
dismiss after finding that petitioner shed off [its] sovereign immunity by entering
into the business contract in question Petitioner forthwith elevated the matter
to us. In its petition, petitioner invokes the privilege of sovereign immunity only
on its own behalf and on behalf of its official representative, the Papal Nuncio.
ISSUE:
Whether the Holy See is immune from suit insofar as its business relations
regarding selling a lot to a private entity
RULING:
The Republic of the Philippines has accorded the Holy See the status of a foreign
sovereign. The Holy See, through its Ambassador, the Papal Nuncio, has had
diplomatic representations with the Philippine government since 1957 (Rollo, p.
87). This appears to be the universal practice in international relations.
There are two conflicting concepts of sovereign immunity, each widely held and
firmly established. According to the classical or absolute theory, a sovereign
cannot, without its consent, be made a respondent in the courts of another
sovereign. According to the newer or restrictive theory, the immunity of the
sovereign is recognized only with regard to public acts or acts jure imperii of a
state, but not with regard to private acts or acts jure gestionis
If the act is in pursuit of a sovereign activity, or an incident thereof, then it is an
act jure imperii, especially when it is not undertaken for gain or profit.
In the case at bench, if petitioner has bought and sold lands in the ordinary course
of a real estate business, surely the said transaction can be categorized as an act
jure gestionis. However, petitioner has denied that the acquisition and
subsequent disposal of Lot 5-A were made for profit but claimed that it acquired
said property for the site of its mission or the Apostolic Nunciature in the
Philippines. Private respondent failed to dispute said claim.
Lot 5-A was acquired by petitioner as a donation from the Archdiocese of Manila.
The donation was made not for commercial purpose, but for the use of petitioner
to construct thereon the official place of residence of the Papal Nuncio. The right
of a foreign sovereign to acquire property, real or personal, in a receiving state,
necessary for the creation and maintenance of its diplomatic mission, is
recognized in the 1961 Vienna Convention on Diplomatic Relations (Arts. 20-22).
This treaty was concurred in by the Philippine Senate and entered into force in
the Philippines on November 15, 1965.
The decision to transfer the property and the subsequent disposal thereof are
likewise clothed with a governmental character. Petitioner did not sell Lot 5-A for
profit or gain. It merely wanted to dispose off the same because the squatters
living thereon made it almost impossible for petitioner to use it for the purpose of
the donation. The fact that squatters have occupied and are still occupying the
lot, and that they stubbornly refuse to leave the premises, has been admitted by
private respondent in its complaint
Private respondent is not left without any legal remedy for the redress of its
grievances. Under both Public International Law and Transnational Law, a person
who feels aggrieved by the acts of a foreign sovereign can ask his own
government to espouse his cause through diplomatic channels.
Private respondent can ask the Philippine government, through the Foreign
Office, to espouse its claims against the Holy See. Its first task is to persuade the
Philippine government to take up with the Holy See the validity of its claims. Of
course, the Foreign Office shall first make a determination of the impact of its
espousal on the relations between the Philippine government and the Holy See
(Young, Remedies of Private Claimants Against Foreign States, Selected Readings
on Protection by Law of Private Foreign Investments 905, 919 [1964]). Once the
Philippine government decides to espouse the claim, the latter ceases to be a
private cause.
WHEREFORE, the petition for certiorari is GRANTED and the complaint in Civil
Case No. 90-183 against petitioner is DISMISSED.
LIANG VS PEOPLE OF THE PHILIPPINES GR no. 125865 January 28, 2000

Petitioner: Jeffrey Liang

Respondent: People of the Philippines

FACTS:
Petitioner is an economist working with the Asian Development Bank (ADB).
Sometime in 1994, for allegedly uttering defamatory words against fellow ADB
worker Joyce Cabal, he was charged before the MeTC of Mandaluyong City with
two counts of oral defamation. Petitioner was arrested by virtue of a warrant
issued by the MeTC. After fixing petitioners bail, the MeTC released him to the
custody of the Security Officer of ADB. The next day, the MeTC judge received an
office of protocol from the DFA stating that petitioner is covered by immunity
from legal process under section 45 of the Agreement between the ADB and the
Philippine Government regarding the Headquarters of the ADB in the country.
Based on the said protocol communication that petitioner is immune from suit,
the MeTC judge without notice to the prosecution dismissed the criminal cases.
The latter filed a motion for reconsideration which was opposed by the DFA.
When its motion was denied, the prosecution filed a petition for certiorari and
mandamus with the RTC of Pasig City which set aside the MeTC rulings and
ordered the latter court to enforce the warrant of arrest it earlier issued. After the
motion for reconsideration was denied, the petitioner elevated the case to the SC
via a petition for review arguing that he is covered by immunity under the
Agreement and that no preliminary investigation was held before the criminal
case.

ISSUES:
(1) Whether or not the petitioners case is covered with immunity from legal
process with regard to Section 45 of the Agreement between the ADB and the
Philippine Govt.
(2) Whether or not the conduct of preliminary investigation was imperative.

HELD:
(1) NO. The petitioners case is not covered by the immunity. Courts cannot
blindly adhere to the communication from the DFA that the petitioner is covered
by any immunity. It has no binding effect in courts. The court needs to protect the
right to due process not only of the accused but also of the prosecution. Secondly,
the immunity under Section 45 of the Agreement is not absolute, but subject to
the exception that the acts must be done in official capacity. Hence, slandering
a person could not possibly be covered by the immunity agreement because our
laws do not allow the commission of a crime, such as defamation, in the name of
official duty.
(2) NO. Preliminary Investigation is not a matter of right in cases cognizable by
the MeTC such as this case. Being purely a statutory right, preliminary
investigation may be invoked only when specifically granted by law. The rule on
criminal procedure is clear that no preliminary investigation is required in cases
falling within the jurisdiction of the MeTC.

Hence, SC denied the petition.

ERNESTO CALLADO vs. INTERNATIONAL RICE RESEARCH INSTITUTE (IRRI)

ERNESTO CALLADO vs. INTERNATIONAL RICE RESEARCH INSTITUTE (IRRI)

G.R. No. 106483 May 22, 1995/ ROMERO, J.:

Facts: Ernesto Callado, petitioner, was employed as a driver at the IRRI. One day
while driving an IRRI vehicle on an official trip to the NAIA and back to the IRRI,
petitioner figured in an accident.

Petitioner was informed of the findings of a preliminary investigation conducted

by the IRRI's Human Resource Development Department Manager. In view of the
findings, he was charged with:
(1) Driving an institute vehicle while on official duty under the influence of liquor;
(2) Serious misconduct consisting of failure to report to supervisors the failure of
the vehicle to start because of a problem with the car battery, and
(3) Gross and habitual neglect of duties.

Petitioner submitted his answer and defenses to the charges against

him. However, IRRI issued a Notice of Termination to petitioner.

Thereafter, petitioner filed a complaint before the Labor Arbiter for illegal
dismissal, illegal suspension and indemnity pay with moral and exemplary
damages and attorney's fees.

IRRI wrote the Labor Arbiter to inform him that the Institute enjoys immunity
from legal process by virtue of Article 3 of Presidential Decree No. 1620, 5 and
that it invokes such diplomatic immunity and privileges as an international
organization in the instant case filed by petitioner, not having waived the same.

While admitting IRRI's defense of immunity, the Labor Arbiter, nonetheless, cited
an Order issued by the Institute to the effect that "in all cases of termination,
respondent IRRI waives its immunity," and, accordingly, considered the defense of
immunity no longer a legal obstacle in resolving the case.
The NLRC found merit in private respondent's appeal and, finding that IRRI did not
waive its immunity, ordered the aforesaid decision of the Labor Arbiter set aside
and the complaint dismissed.

In this petition petitioner contends that the immunity of the IRRI as an

international organization granted by Article 3 of Presidential Decree No. 1620
may not be invoked in the case at bench inasmuch as it waived the same by virtue
of its Memorandum on "Guidelines on the handling of dismissed employees in
relation to P.D. 1620."

Issue: Did the (IRRI) waive its immunity from suit in this dispute which arose from
an employer-employee relationship?

Held: No.

P.D. No. 1620, Article 3 provides:

Art. 3. Immunity from Legal Process. The Institute shall enjoy immunity from any
penal, civil and administrative proceedings, except insofar as that immunity has
been expressly waived by the Director-General of the Institute or his authorized
representatives.

The SC upholds the constitutionality of the aforequoted law. There is in this case
"a categorical recognition by the Executive Branch of the Government that IRRI
enjoys immunities accorded to international organizations, which determination
has been held to be a political question conclusive upon the Courts in order not to
embarass a political department of Government.
It is a recognized principle of international law and under our system of
separation of powers that diplomatic immunity is essentially a political question
and courts should refuse to look beyond a determination by the executive branch
of the government, and where the plea of diplomatic immunity is recognized and
affirmed by the executive branch of the government as in the case at bar, it is
then the duty of the courts to accept the claim of immunity upon appropriate
suggestion by the principal law officer of the government or other officer acting
under his direction.

The raison d'etre for these immunities is the assurance of unimpeded

performance of their functions by the agencies concerned.
The grant of immunity to IRRI is clear and unequivocal and an express waiver by
its Director-General is the only way by which it may relinquish or abandon this
immunity.

In cases involving dismissed employees, the Institute may waive its immunity,
signifying that such waiver is discretionary on its part.
San Fernando v. Firme
G.R. N. L-579 [April 8, 1991]
FACTS:
On December 16, 1965, a collision occurred involving a passenger jeepney driven
by Balagot and owned by the Estate of Macario Nieveras, a gravel and sand truck
driven by Jose Manandeg and owned by Tanquilino Velasquez and a dump
truck of the Municipality of San Fernando, La Union and driven by Alfredo
Bislig. Several passengers of the jeepney including Laureano Bania Sr. died as a
result of the injuries they sustained and 4 others suffered varying degrees of
physical injuries.
The heirs of Bania Sr. filed a complaint for damages against the Estate of
Nieveras and Balagot. However, the aforesaid defendants filed a Third Party
Complaint against the petitioner and the driver of a dump truck of petitioner. The
case was transferred to branch presided by Judge Firme. The heirs of Bania Sr.
amended the complaint wherein the petitioner and its regular employee Bislig
were impleaded as defendants. Judge Firme in its decision rendered the
Municipality of San Fernando and Bislig jointly and severally liable to pa funeral
expenses, lot expected earnings, moral damages and attorneys fees.
ISSUE:
Whether or not petitioner was liable.
RULING:

The petitioner cannot be held liable by virtue of the non-suability of the State.
The general rule Is that the State may not be sued except when it gives consent to
be sued (Article XVI, Sec. 3 of the Constitution.) Express consent may
be embodied in a general law or a special law. The standing consent of the State
to be sued in case of money claims involving liability arising from contracts is
found in Act No. 3083. Consent is implied when the government enters
into business contracts and also when the State files a complaint. Municipal
corporations are agencies of the State when they are engaged in governmental
functions and therefore should enjoy the sovereign immunity from suit.
Nevertheless, they are subject to suit even in the performance of such functions
because their charter provided that they can sue and be sued. However, the
circumstance that a state is suable does not necessarily mean that it is liable; on
the other hand, it can never be held liable if it does not first consent to be sued.
Liability is not conceded by the mere fact that the state has allowed itself to be
sued. When the state does waive its sovereign immunity, it is only giving the
plaintiff the chance to prove, if it can, that the defendant is liable.
Municipal corporations are suable because their charters grant them the
competence to sue and be sued. Nevertheless, they are generally not liable for
torts committed by them in the discharge of governmental functions and can be
held answerable only if it can be shown that they were acting in a
proprietary capacityHere, the driver of the dump truck of the municipality insists
that he was on his way to the Naguilian river to get a load of sand and gravel for
the repair of San Fernandos municipal streets. In the absence of any evidence to
the contrary, the regularity of the performance of official duty is presumed
pursuant to Section 3(m) of Rule 131 of the Revised Rules of Court.
Hence, the SC held that the driver of the dump truck was performing duties or
tasks pertaining to his office. Municipality cannot be held liable for the torts
committed by its regular employee, who was then engaged in the discharge of
governmental functions.
FAROLAN VS. COURT OF TAX APPEALS
G.R. No. 42204, January 21 1993, 217 SCRA 298

FACTS:
On January 30, 1972, the vessel S/S "Pacific Hawk" arrived at the Port of Manila
carrying, among others, 80 bales of screen net consigned to Bagong Buhay
Trading (Bagong Buhay). Said importation was declared through a customs
broker which was classified under Tariff Heading No. 39.06-B of the Tariff and
Customs Code at 35% ad valorem. Since the customs examinerfound the subject
shipment reflective of the declaration, Bagong Buhay paid the duties and taxes
due which was paid through the Bank of Asia. Thereafter, the
customs appraiser made a return of duty.

Acting on the strength of an information that the shipment consisted of

"mosquito net" made of nylon, the Office of the Collector of Customs ordered a
re-examination of the shipment which revealed that the shipment consisted of 80
bales of screen net, each bale containing 20 rolls or a total of 1,600 rolls. The
value of the shipment was re-appraised. Furthermore, the Collector of Customs
determined the subject shipment as made of synthetic (polyethylene) woven
fabric classifiable under Tariff Heading No. 51.04-B at 100% ad valorem. Thus,
Bagong Buhay Trading was assessed P272,600.00 as duties and taxes due on the
shipment in question. Since the shipment was also misdeclared as to quantity and
value, the Collector of Customs forfeited the subject shipment in favor of the
government which was also affirmed by the Commissioner of Customs.

However, the Court of Tax Appeals reversed the decision of the Commissioner
declaring that the latter erred in imputing fraud upon private respondent because
fraud is never presumed and thus concluded that the forfeiture of the articles in
question was not in accordance with law. As a consequence, several motions
were filed and private respondent demands that the Bureau of Customs be
ordered to pay for damages

ISSUE:
Whether or not the Collector of Customs may be held liable.

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

On this point, the political doctrine that "the state may not be sued without its
consent," categorically applies. As an unincorporated government agency without
any separate juridical personality of its own, the Bureau of Customs
enjoys immunity from suit. Along with the Bureauof Internal Revenue, it is
invested with an inherent power of sovereignty, namely, taxation. As an agency,
the Bureau of Customs performs the governmental function of collecting
revenues which is definitely not a proprietary function. Thus, private
respondent's claim for damages against the Commissioner of Customs must fail.
WYLIE VS. RARANG
G.R. No. 74135, May 28 1992, 209 SCRA 357

FACTS:
Petitioner M. H. Wylie was the assistant administrative officer while petitioner
Capt. James Williams was the commanding officer of the U. S. Naval Base in Subic
Bay, Olongapo City. Private respondent Aurora I. Rarang was an employee in the
office of the Provost Marshal assigned as merchandise control guard.

M. H. Wylie, in his capacity as assistant administrative officer of the U.S. Naval

Station supervised the publication of the "Plan of the Day" (POD) which was
published daily by the US Naval Base station. The POD featured
important announcements, necessary precautions, and general matters of
interest to military personnel. One of the regular features of the POD was the
"action line inquiry." On February 3, 1978, the POD made a publication, under the
"NAVSTA ACTION LINE INQUIRY" which mentioned a certain person named
Auring who is described as a disgrace to her division and to the Office of the
Provost Marshal.

The private respondent was the only one who was named "Auring" in the Office
of the Provost Marshal and was subsequently proven that it was her being
referred to when petitioner M. H. Wylie wrote her a letter of apology for the
"inadvertent" publication. The private respondent the filed an action for damages
alleging that the article constituted false, injurious, and malicious defamation and
libel tending to impeach her honesty, virtue and reputation exposing her to public
hatred, contempt and ridicule; and that the libel was published and circulated in
the English language and read by almost all the U. S. Naval Base personnel.

The defendants however contended by filing a motion to dismiss based on the

grounds that the defendants M. H. Wylie and Capt. James Williams acted in the
performance of their officialfunctions as officers of the United States Navy and
are, therefore, immune from suit; and the United States Naval Base is an
instrumentality of the US government which cannot be sued without its consent.

ISSUE:
Whether or not the officials of the United States Naval Base are immune from
suit.
HELD:
The subject article in the US Newsletter POD dated February 3, 1978 mentions a
certain "Auring" as ". . a disgrace to her division and to the Office of the Provost
Marshal." The same article explicitly implies that Auring was consuming and
appropriating for herself confiscated items like cigarettes and foodstuffs. There is
no question that the Auring alluded to in the Article was the private respondent
as she was the only Auring in the Office of the Provost Marshal. Moreover, as a
result of this article, the private respondent was investigated by her supervisor.
Before the article came out, the private respondent had been the recipient of
commendations by her superiors for honesty in the performance of her duties.

It may be argued that Captain James Williams as commanding officer of the naval
base is far removed in the chain of command from the offensive publication and it
would be asking too much to hold him responsible for everything which goes
wrong on the base. This may be true as a general rule. In this particular case,
however, the records show that the offensive publication was sent to the
commanding officer for approval and he approved it. The factual findings of the
two courts below are based on the records. The petitioners have shown no
convincing reasons why our usual respect for the findings of the trial court and
the respondent court should be withheld in this particular case and why their
decisions should be reversed.

Article 2176 of the Civil Code prescribes a civil liability for damages caused by a
person's act or omission constituting fault or negligence, to wit:
Art. 2176. Whoever by act or omission, causes damage to another, there being
fault or negligence is obliged to pay for the damage done. Such fault or
negligence, if there is no pre-existing contractual relation between the parties, is
called a quasi-delict and is governed by the provisions of this Chapter.
"Fault" or "negligence" in this Article covers not only acts "not punishable by law"
but also actscriminal in character, whether intentional or voluntary or negligent."

Moreover, Article 2219(7) of the Civil Code provides that moral damages may be
recovered in case of libel, slander or any other form of defamation. In effect, the
offended party in these cases is given the right to receive from the guilty party
moral damages for injury to his feelings and reputation in addition to punitive or
exemplary damages.
Indeed the imputation of theft contained in the POD dated February 3, 1978 is a
defamation against the character and reputation of the private respondent.
Petitioner Wylie himself admitted that the Office of the Provost Marshal explicitly
recommended the deletion of the name Auring if the article were published. The
petitioners, however, were negligent because under their direction
they issued the publication without deleting the name "Auring." Such act or
omission is ultra vires and cannot be part of official duty. It was a tortious act
which ridiculed the private respondent. As a result of the petitioners' act, the
private respondent, according to the record, suffered besmirched reputation,
serious anxiety, wounded feelings and social humiliation, specially so, since the
article was baseless and false. The petitioners, alone, in their personal capacities
are liable for the damages they caused the private respondent.
Palafox vs Province of Ilocos Norte

Facts:

Sabas Torralba was employed as the driver of Ilocos Norte and detailed to the
Office of the District Engineer. While driving his truck, Sabas ran over Proceto
Palafox resulting to the latters death. Sabas was prosecuted for homicidethrough
reckless imprudence to which he pleaded guilty. The heirs of Palafox instituted a
civil case against him, the Province, the District Engineer and the Provincial
Treasurer.

Issue:

Whether or not the Province of Ilocos Norte can be held liable.

Held:

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

On October 21, 1978, the municipal council of Malasiqui, Pangasinan passed 2

resolutions: one for management of the town fiesta celebration and the other for
the creation of the Malasiqui Town Fiesta Executive Committee. The Executive
Committee, in turn, organized a sub-committee on entertainment and stage with
Jose Macaraeg as Chairman. The council appropriated the amount of P100.00 for
the construction of 2 stages, one for the "zarzuela" and another for the
cancionan. While the zarzuela was being held, the stage collapsed. Vicente
Fontanilla was pinned underneath and died in the afternoon of the following day.
Fontanillas heirs filed a complaint for damages with the CFI of Manila. The
defendants were the municipality, the municipal council and the municipal
council members. In its Answer, defendant municipality argued that as a legally
and duly organized public corporation it performs sovereign functions and the
holding of a town fiesta was an exercise of its governmental functions from which
no liability can arise to answer for the negligence of any of its agents. The
defendant councilors, in turn, maintained that they merely acted as agents of the
municipality in carrying out the municipal ordinance providing for the
management of the town fiesta celebration and as such they are likewise not
liable for damages as the undertaking was not one for profit; furthermore, they
had exercised due care and diligence in implementing the municipal ordinance.
CFI held that the municipal council exercised due diligence in selecting the person
to construct the stage and dismissed the complaint. CA reversed the decision and
held all defendants solidarily liable for damages.

Issues:

1. Is the celebration of a town fiesta authorized by a municipal council a

governmental or a corporate function of the municipality?

2. Is the municipality liable for the death of Fontanilla?

3. Are the municipal councilors who enacted the ordinance and created the fiesta
committee liable for the death of Fontanilla?
Held:

1. The holding of the town fiesta in 1959 by the municipality of Malsiqui

Pangasinan was an exercise of a private or proprietary function of the
municipality.

Section 2282 of the Chatter on Municipal Law of the Revised Administrative Code
simply gives authority to the municipality to celebrate a yearly fiesta but it does
not impose upon it a duty to observe one. Holding a fiesta even if the purpose is
to commemorate a religious or historical event of the town is in essence an act for
the special benefit of the community and not for the general welfare of the
public performed in pursuance of a policy of the state. The mere fact that the
celebration, as claimed was not to secure profit or gain but merely to provide
entertainment to the town inhabitants is not a conclusive test. For instance, the
maintenance of parks is not a source of income for the nonetheless it is private
undertaking as distinguished from the maintenance of public schools, jails, and
the like which are for public service. No governmental or public policy of the state
is involved in the celebration of a town fiesta.

Municipal corporations exist in a dual capacity, and their functions are two fold. In
one they exercise the right springing from sovereignty, and while in the
performance of the duties pertaining thereto, their acts are political and
governmental Their officers and agents in such capacity, though elected or
appointed by the are nevertheless public functionaries performing a public
service, and as such they are officers, agents, and servants of the state. In the
other capacity, the municipalities exercise a private, proprietary or corporate
right, arising from their existence as legal persons and not as public agencies.
Their officers and agents in the performance of such functions act in behalf of the
municipalities in their corporate or individual capacity, and not for the state or
sovereign power.

2. Under the doctrine of respondent superior, petitioner-municipality is liable for

damages for the death of Vicente Fontanilla because the accident was
attributable to the negligence of the municipality's officers, employees, or agents.
Art. 2176, Civil Code: Whoever by act or omission causes damage to another,
there being fault or negligence, is obliged to pay for the damage done. . .
Art. 2180, Civil Code: The obligation imposed by article 2176 is demandable not
only for one's own acts or omission, but also for those of persons for whom one is
responsible.
It was found that the stage was not strong enough considering that only P100.00
was appropriate for the construction of two stages and while the floor of the
"zarzuela" stage was of wooden planks, the post and braces used were of bamboo
material. The collapse of the stage was also attributable to the great number of
onlookers who mounted the stage. The municipality and/or its agents had the
necessary means within its command to prevent such an occurrence. But they
failed take the necessary steps to maintain the safety of the stage, particularly, in
preventing non-participants or spectators from mounting and accumulating on
the stage.

Municipality cannot evade ability and/or liability under the fact that it was Jose
Macaraeg who constructed the stage. The municipality acting through its
municipal council appointed Macaraeg as chairman of the sub-committee on
entertainment and in charge of the construction of the "zarzuela" stage.
Macaraeg acted merely as an agent of the Municipality. Under the doctrine of
respondent superior mentioned earlier, petitioner is responsible or liable for the
negligence of its agent acting within his assigned tasks.

3. The celebration of a town fiesta by the Municipality of Malasiqui was not a

governmental function. The legal consequence thereof is that the Municipality
stands on the same footing as an ordinary private corporation with the municipal
council acting as its board of directors. It is an elementary principle that a
corporation has a personality, separate and distinct from its officers, directors, or
persons composing it and the latter are not as a rule co-responsible in an action
for damages for tort or negligence culpa aquilla committed by the corporation's
employees or agents unless there is a showing of bad faith or gross or wanton
negligence on their part. The records do not show that municipal
councilors directly participated in the defective construction of the "zarzuela"
stage or that they personally permitted spectators to go up the platform. Thus,
they are absolved from liability. (Torio vs. Fontanilla, GR No. L-29993, October 23,
1978)