G.R. No.
L-30671 November 28, 1973 corresponding Alias Writ of Execution [was issued] dated June 26, 1969, .... 10. On
REPUBLIC OF THE PHILIPPINES, petitioner,
vs.
HON. GUILLERMO P. VILLASOR, as Judge of the Court of First Instance of
Cebu, Branch I, THE PROVINCIAL SHERIFF OF RIZAL, THE SHERIFF
OF QUEZON CITY, and THE SHERIFF OF THE CITY OF MANILA, THE
CLERK OF COURT, Court of First Instance of Cebu, P. J. KIENER CO.,
LTD., GAVINO UNCHUAN, AND INTERNATIONAL CONSTRUCTION
CORPORATION, respondents.
Office of the Solicitor General Felix V. Makasiar and Solicitor Bernardo P. Pardo
for petitioner.
Andres T. Velarde and Marcelo B. Fernan for respondents.
FERNANDO, J.:
The Republic of the Philippines in this certiorari and prohibition proceeding
challenges the validity of an order issued by respondent Judge Guillermo P. Villasor,
then of the Court of First Instance of Cebu, Branch I, 1 declaring a decision final and
executory and of an alias writ of execution directed against the funds of the Armed
Forces of the Philippines subsequently issued in pursuance thereof, the alleged
ground being excess of jurisdiction, or at the very least, grave abuse of discretion. As
thus simply and tersely put, with the facts being undisputed and the principle of law
that calls for application indisputable, the outcome is predictable. The Republic of
the Philippines is entitled to the writs prayed for. Respondent Judge ought not to
have acted thus. The order thus impugned and the alias writ of execution must be
nullified.
In the petition filed by the Republic of the Philippines on July 7, 1969, a summary of
facts was set forth thus: "7. On July 3, 1961, a decision was rendered in Special
Proceedings No. 2156-R in favor of respondents P. J. Kiener Co., Ltd., Gavino
Unchuan, and International Construction Corporation, and against the petitioner
herein, confirming the arbitration award in the amount of P1,712,396.40, subject of
Special Proceedings. 8. On June 24, 1969, respondent Honorable Guillermo P.
Villasor, issued an Order declaring the aforestated decision of July 3, 1961 final and
executory, directing the Sheriffs of Rizal Province, Quezon City [as well as] Manila
to execute the said decision. 9. Pursuant to the said Order dated June 24, 1969, the
the strength of the afore-mentioned Alias Writ of Execution dated June 26, 1969, the
Provincial Sheriff of Rizal (respondent herein) served notices of garnishment dated
June 28, 1969 with several Banks, specially on the "monies due the Armed Forces of
the Philippines in the form of deposits sufficient to cover the amount mentioned in
the said Writ of Execution"; the Philippine Veterans Bank received the same notice
of garnishment on June 30, 1969 .... 11. The funds of the Armed Forces of the
Philippines on deposit with the Banks, particularly, with the Philippine Veterans
Bank and the Philippine National Bank [or] their branches are public funds duly
appropriated and allocated for the payment of pensions of retirees, pay and
allowances of military and civilian personnel and for maintenance and operations of
the Armed Forces of the Philippines, as per Certification dated July 3, 1969 by the
AFP Controller,..." 2. The paragraph immediately succeeding in such petition then
alleged: "12. Respondent Judge, Honorable Guillermo P. Villasor, acted in excess of
jurisdiction [or] with grave abuse of discretion amounting to lack of jurisdiction in
granting the issuance of an alias writ of execution against the properties of the
Armed Forces of the Philippines, hence, the Alias Writ of Execution and notices of
garnishment issued pursuant thereto are null and void." 3 In the answer filed by
respondents, through counsel Andres T. Velarde and Marcelo B. Fernan, the facts set
forth were admitted with the only qualification being that the total award was in the
amount of P2,372,331.40. 4
The Republic of the Philippines, as mentioned at the outset, did right in filing
this certiorari and prohibition proceeding. What was done by respondent Judge is
not in conformity with the dictates of the Constitution. .
It is a fundamental postulate of constitutionalism flowing from the juristic concept of
sovereignty that the state as well as its government is immune from suit unless it
gives its consent. It is readily understandable why it must be so. In the classic
formulation of Holmes: "A sovereign is exempt from suit, not because of any formal
conception or obsolete theory, but 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." 5 Sociological jurisprudence supplies an answer not dissimilar. So it was
indicated in a recent decision, Providence Washington Insurance Co. v. Republic of
the Philippines, 6 with its affirmation that "a continued adherence to the doctrine of
non-suability is not to be deplored for as against the inconvenience that may be
caused private parties, the loss of governmental efficiency and the obstacle to the
performance of its multifarious functions are far greater if such a fundamental
principle were abandoned and the availability of judicial remedy were not thus
restricted. With the well known propensity on the part of our people to go to court, at
Page 1 of 8
the least provocation, the loss of time and energy required to defend against law
suits, in the absence of such a basic principle that constitutes such an effective
obstacle, could very well be imagined." 7
This fundamental postulate underlying the 1935 Constitution is now made explicit in
the revised charter. It is therein expressly provided: "The State may not be sued
without its consent." 8 A corollary, both dictated by logic and sound sense from a
basic concept is that public funds cannot be the object of a garnishment proceeding
even if the consent to be sued had been previously granted and the state liability
adjudged. Thus in the recent case of Commissioner of Public Highways v. San
Diego, 9 such a well-settled doctrine was restated in the opinion of Justice
Teehankee: "The universal rule that where the State gives its consent to be sued by
private parties either by general or special law, it may limit claimant's action 'only up
to the completion of proceedings anterior to the stage of execution' and that the
power of the Courts ends when the judgment is rendered, since government funds
and properties may not be seized under writs of execution or garnishment to satisfy
such judgments, is based on obvious considerations of public policy. Disbursements
of public funds must be covered by the corresponding appropriation as required by
law. The functions and public services rendered by the State cannot be allowed to be
paralyzed or disrupted by the diversion of public funds from their legitimate and
specific objects, as appropriated by law." 10 Such a principle applies even to an
attempted garnishment of a salary that had accrued in favor of an employee. Director
of Commerce and Industry v. Concepcion, 11 speaks to that effect. Justice Malcolm as
ponente left no doubt on that score. Thus: "A rule which has never been seriously
questioned, is that money in the hands of public officers, although it may be due
government employees, is not liable to the creditors of these employees in the
process of garnishment. One reason is, that the State, by virtue of its sovereignty,
may not be sued in its own courts except by express authorization by the Legislature,
and to subject its officers to garnishment would be to permit indirectly what is
prohibited directly. Another reason is that moneys sought to be garnished, as long as
they remain in the hands of the disbursing officer of the Government, belong to the
latter, although the defendant in garnishment may be entitled to a specific portion
thereof. And still another reason which covers both of the foregoing is that every
consideration of public policy forbids it." 12
In the light of the above, it is made abundantly clear why the Republic of the
Philippines could rightfully allege a legitimate grievance.
WHEREFORE, the writs of certiorari and prohibition are granted, nullifying and
setting aside both the order of June 24, 1969 declaring executory the decision of July
3, 1961 as well as the alias writ of execution issued thereunder. The preliminary
injunction issued by this Court on July 12, 1969 is hereby made permanent.
Zaldivar (Chairman), Antonio, Fernandez and Aquino, JJ., concur.
G.R. No. 104269 November 11, 1993
DEPARTMENT OF AGRICULTURE, petitioner,
vs.
THE NATIONAL LABOR RELATIONS COMMISSION, et al., respondents.
Roy Lago Salcedo for private respondents.
VITUG, J.:
For consideration are the incidents that flow from the familiar doctrine of non-
suability of the state.
In this petition for certiorari, the Department of Agriculture seeks to nullify the
Resolution, 1 dated 27 November 1991, of the National Labor Relations Commission
(NLRC), Fifth Division, Cagayan de Oro City, denying the petition for injunction,
prohibition and mandamus that prays to enjoin permanently the NLRC's Regional
Arbitration Branch X and Cagayan de Oro City Sheriff from enforcing the
decision 2 of 31 May 1991 of the Executive Labor Arbiter and from attaching and
executing on petitioner's property.
The Department of Agriculture (herein petitioner) and Sultan Security Agency
entered into a contract 3 on 01 April 1989 for security services to be provided by the
latter to the said governmental entity. Save for the increase in the monthly rate of the
guards, the same terms and conditions were also made to apply to another contract,
dated 01 May 1990, between the same parties. Pursuant to their arrangements, guards
were deployed by Sultan Agency in the various premises of the petitioner.
On 13 September 1990, several guards of the Sultan Security Agency filed a
complaint for underpayment of wages, non-payment of 13th month pay, uniform
allowances, night shift differential pay, holiday pay and overtime pay, as well as for
damages, 4 before the Regional Arbitration Branch X of Cagayan de Oro City,
docketed as NLRC Case No. 10-09-00455-90 (or 10-10-00519-90, its original docket
number), against the Department of Agriculture and Sultan Security Agency.
Page 2 of 8
The Executive Labor Arbiter rendered a decision on 31 May finding herein petitioner
and jointly and severally liable with Sultan Security Agency for the payment of
money claims, aggregating P266,483.91, of the complainant security guards. The
petitioner and Sultan Security Agency did not appeal the decision of the Labor
Arbiter. Thus, the decision became final and executory.
On 18 July 1991, the Labor Arbiter issued a writ of execution. 5 commanding the
City Sheriff to enforce and execute the judgment against the property of the two
respondents. Forthwith, or on 19 July 1991, the City Sheriff levied on execution the
motor vehicles of the petitioner, i.e. one (1) unit Toyota Hi-Ace, one (1) unit Toyota
Mini Cruiser, and one (1) unit Toyota Crown. 6 These units were put under the
custody of Zacharias Roa, the property custodian of the petitioner, pending their sale
at public auction or the final settlement of the case, whichever would come first.
A petition for injunction, prohibition and mandamus, with prayer for preliminary
writ of injunction was filed by the petitioner with the National Labor Relations
Commission (NLRC), Cagayan de Oro, alleging, inter alia, that the writ issued was
effected without the Labor Arbiter having duly acquired jurisdiction over the
petitioner, and that, therefore, the decision of the Labor Arbiter was null and void
and all actions pursuant thereto should be deemed equally invalid and of no legal,
effect. The petitioner also pointed out that the attachment or seizure of its property
would hamper and jeopardize petitioner's governmental functions to the prejudice of
the public good.
On 27 November 1991, the NLRC promulgated its assailed resolution; viz:
WHEREFORE, premises considered, the following orders are issued:
1. The enforcement and execution of the judgments against petitioner in NLRC
RABX Cases Nos. 10-10-00455-90; 10-10-0481-90 and 10-10-00519-90 are
temporarily suspended for a period of two (2) months, more or less, but not
extending beyond the last quarter of calendar year 1991 to enable petitioner to source
and raise funds to satisfy the judgment awards against it;
2. Meantime, petitioner is ordered and directed to source for funds within the period
above-stated and to deposit the sums of money equivalent to the aggregate amount. it
has been adjudged to pay jointly and severally with respondent Sultan Security
Agency with the Regional Arbitration Branch X, Cagayan de Oro City within the
same period for proper dispositions;
3. In order to ensure compliance with this order, petitioner is likewise directed to put
up and post sufficient surety and supersedeas bond equivalent to at least to fifty
(50%) percent of the total monetary award issued by a reputable bonding company
duly accredited by the Supreme Court or by the Regional Trial Court of Misamis
Oriental to answer for the satisfaction of the money claims in case of failure or
default on the part of petitioner to satisfy the money claims;
4. The City Sheriff is ordered to immediately release the properties of petitioner
levied on execution within ten (10) days from notice of the posting of sufficient
surety or supersedeas bond as specified above. In the meanwhile, petitioner is
assessed to pay the costs and/or expenses incurred by the City Sheriff, if any, in
connection with the execution of the judgments in the above-stated cases upon
presentation of the appropriate claims or vouchers and receipts by the city Sheriff,
subject to the conditions specified in the NLRC Sheriff, subject to the conditions
specified in the NLRC Manual of Instructions for Sheriffs;
5. The right of any of the judgment debtors to claim reimbursement against each
other for any payments made in connection with the satisfaction of the judgments
herein is hereby recognized pursuant to the ruling in the Eagle Security case, (supra).
In case of dispute between the judgment debtors, the Executive Labor Arbiter of the
Branch of origin may upon proper petition by any of the parties conduct arbitration
proceedings for the purpose and thereby render his decision after due notice and
hearings;
7. Finally, the petition for injunction is Dismissed for lack of basis. The writ of
preliminary injunction previously issued is Lifted and Set Aside and in lieu thereof,
a Temporary Stay of Execution is issued for a period of two (2) months but not
extending beyond the last quarter of calendar year 1991, conditioned upon the
posting of a surety or supersedeas bond by petitioner within ten (10) days from
notice pursuant to paragraph 3 of this disposition. The motion to admit the complaint
in intervention is Denied for lack of merit while the motion to dismiss the petition
filed by Duty Sheriff is Noted
SO ORDERED.
In this petition for certiorari, 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
Page 3 of 8
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.
The basic postulate enshrined in the constitution that "(t)he State may not be sued
without its consent," 7 reflects nothing less than a recognition of the sovereign
character of the State and an express affirmation of the unwritten rule effectively
insulating it from the jurisdiction of courts. 8 It is based on the very essence of
sovereignty. As has been aptly observed, by Justice Holmes, a sovereign is exempt
from suit, not because of any formal conception or obsolete theory, but 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. 9 True, the doctrine, not too infrequently,
is derisively called "the royal prerogative of dishonesty" because it grants the state
the prerogative to defeat any legitimate claim against it by simply invoking its non-
suability. 10 We have had occasion, to explain in its defense, however, that a
continued adherence to the doctrine of non-suability cannot be deplored, for the loss
of governmental efficiency and the obstacle to the performance of its multifarious
functions would be far greater in severity than the inconvenience that may be caused
private parties, if such fundamental principle is to be abandoned and the availability
of judicial remedy is not to be accordingly restricted. 11
The rule, in any case, is not really absolute for it does not say that the state may not
be sued under any circumstances. On the contrary, as correctly phrased, the doctrine
only conveys, "the state may not be sued without its consent;" its clear import then is
that the State may at times be sued. 12 The States' consent may be given expressly or
impliedly. Express consent may be made through a general law 13 or a special
law. 14 In this jurisdiction, the general law waiving the immunity of the state from
suit is found in Act No. 3083, where the Philippine government "consents and
submits to be sued upon any money claims involving liability arising from contract,
express or implied, which could serve as a basis of civil action between private
parties." 15 Implied consent, on the other hand, is conceded when the State itself
commences litigation, thus opening itself to a counterclaim 16 or when it enters into a
contract. 17 In this situation, the government is deemed to have descended to the level
of the other contracting party and to have divested itself of its sovereign immunity.
This rule, relied upon by the NLRC and the private respondents, is not, however,
without qualification. 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. 18
In the Unites States of America vs. Ruiz, 19 where the questioned transaction dealt
with improvements on the wharves in the naval installation at Subic Bay, we held:
The traditional rule of 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 act ( jure gestionisis). The result is that State
immunity now extends only to acts jure imperii. The restrictive application of State
immunity is now the rule in the United States, the United Kingdom and other states
in Western Europe.
xxx xxx xxx
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 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 contracts 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 not dedicated to commercial or business
purposes.
In the instant case, the Department of Agriculture 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, in fact, performed any act proprietary in
character.
But, be that as it may, the claims of private respondents, i.e. for underpayment of
wages, holiday pay, overtime pay and similar other items, arising from the Contract
for Service, clearly constitute money claims. Act No. 3083, aforecited, 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
("C.A.") No. 327, as amended by Presidential Decree ("P.D.") No. 1145, the money
Page 4 of 8
claim first be brought to the Commission on Audit. Thus, in Carabao, Inc., vs.
Agricultural Productivity Commission, 20 we ruled:
(C)laimants have to prosecute their money claims against the Government under
Commonwealth Act 327, stating that Act 3083 stands now merely as the general law
waiving the State's immunity from suit, subject to the general limitation expressed in
Section 7 thereof that "no execution shall issue upon any judgment rendered by any
Court against the Government of the (Philippines), and that the conditions provided
in Commonwealth Act 327 for filing money claims against the Government must be
strictly observed."
We fail to see any substantial conflict or inconsistency between the provisions of
C.A. No. 327 and the Labor Code with respect to money claims against the State.
The Labor code, in relation to Act No. 3083, provides the legal basis for the State
liability but the prosecution, enforcement or satisfaction thereof must still be pursued
in accordance with the rules and procedures laid down in C.A. No. 327, as amended
by P.D. 1445.
When the state gives its consent to be sued, it does thereby necessarily consent to
unrestrained execution against it. tersely put, when the State waives its immunity, all
it does, in effect, is to give the other party an opportunity to prove, if it can, that the
State has a liability. 21 In Republic vs. Villasor 22 this Court, in nullifying the issuance
of an alias writ of execution directed against the funds of the Armed Forces of the
Philippines to satisfy a final and executory judgment, has explained, thus
The universal rule that where the State gives its consent to be sued by private parties
either by general or special law, it may limit the claimant's action "only up to the
completion of proceedings anterior to the stage of execution" and that the power of
the Courts ends when the judgment is rendered, since government funds and
properties may not be seized under writs or execution or garnishment to satisfy such
judgments, is based on obvious considerations of public policy. Disbursements of
public funds must be covered by the correspondent appropriation as required by law.
The functions and public services rendered by the State cannot be allowed to be
paralyzed or disrupted by the diversion of public funds from their legitimate and
specific objects, as appropriated by law. 23
WHEREFORE, the petition is GRANTED. The resolution, dated 27 November
1991, is hereby REVERSED and SET ASIDE. The writ of execution directed against
the property of the Department of Agriculture is nullified, and the public respondents
are hereby enjoined permanently from doing, issuing and implementing any and all
writs of execution issued pursuant to the decision rendered by the Labor Arbiter
against said petitioner.
SO ORDERED.
SECOND DIVISION
G.R. No. L-55273-83 December 19, 1981
GAUDENCIO RAYO, BIENVINIDO PASCUAL, TOMAS MANUEL,
MARIANO CRUZ, PEDRO BARTOLOME, BERNARDINO CRUZ JOSE
PALAD , LUCIO FAJARDO, FRANCISCO RAYOS, ANGEL TORRES,
NORBERTO TORRES, RODELIO JOAQUIN, PEDRO AQUINO,
APOLINARIO BARTOLOME, MAMERTO BERNARDO, CIRIACO
CASTILLO, GREGORIO CRUZ, SIMEON ESTRELLA, EPIFANIO
MARCELO, HERMOGENES SAN PEDRO, JUAN SANTOS, ELIZABETH
ABAN, MARCELINA BERNABE, BUENAVENTURA CRUZ, ANTONIO
MENESES, ROMAN SAN PEDRO, LOPEZ ESPINOSA, GODOFREDO
PUNZAL, JULIANA GARCIA, LEBERATO SARMIENTO, INOCENCIO DE
LEON, CARLOS CORREA, REYNALDO CASIMIRO, ANTONIO GENER,
GAUDENCIO CASTILLO, MATIAS PEREZ, CRISPINIANO TORRES,
CRESENCIO CRUZ, PROTACIO BERNABE, MARIANO ANDRES,
CRISOSTOMO CRUZ, MARCOS EUSTAQUIO, PABLO LEGASPI,
VICENTE PASCUAL, ALEJANDRA SISON, EUFRACIO TORRES,
ROGELIO BARTOLOME, RODOLFO BERNARDO, APOLONIO
CASTILLO, MARCELINO DALMACIO, EUTIQUIO LEGASPI, LORENZO
LUCIANO and GREGORIO PALAD, petitioners,
vs.
COURT OF FIRST INSTANCE OF BULACAN, BRANCH V, STA. MARIA,
and NATIONAL POWER CORPORATION, respondents.
ABAD SANTOS, J.:
The relevant antecedents of this case are narrated in the petition and have not been
controverted, namely:
3. At about midnight on October 26, 1978, during the height of that infamous
typhoon "KADING" the respondent corporation, acting through its plant
superintendent, Benjamin Chavez, opened or caused to be opened simultaneously all
the three floodgates of the Angat Dam. And as a direct and immediate result of the
sudden, precipitate and simultaneous opening of said floodgates several towns in
Page 5 of 8
Bulacan were inundated. Hardest-hit was Norzagaray. About a hundred of its
residents died or were reported to have died and properties worth million of pesos
destroyed or washed away. This flood was unprecedented in Norzagaray.
4. Petitioners, who were among the many unfortunate victims of that man-caused
flood, filed with the respondent Court eleven complaints for damages against the
respondent corporation and the plant superintendent of Angat Dam, Benjamin
Chavez, docketed as Civil Cases Nos. SM-950 951, 953, 958, 959, 964, 965, 966,
981, 982 and 983. These complaints though separately filed have a common/similar
cause of action. ...
5. Respondent corporation filed separate answers to each of these eleven complaints.
Apart from traversing the material averments in the complaints and setting forth
counterclaims for damages respondent corporation invoked in each answer a special
and affirmative defense that "in the operation of the Angat Dam," it is "performing a
purely governmental function", hence it "can not be sued without the express consent
of the State." ...
6. On motion of the respondent corporation a preliminary hearing was held on its
affirmative defense as though a motion to dismiss were filed. Petitioners opposed the
prayer for dismissal and contended that respondent corporation is performing not
governmental but merely proprietary functions and that under its own organic act,
Section 3 (d) of Republic Act No. 6395, it can sue and be sued in any court. ...
7. On July 29, 1980 petitioners received a copy of the questioned order of the
respondent Court dated December 21, 1979 dismissing all their complaints as against
the respondent corporation thereby leaving the superintendent of the Angat Dam,
Benjamin Chavez, as the sole party-defendant. ...
8. On August 7, 1980 petitioners filed with the respondent Court a motion for
reconsideration of the questioned order of dismissal. ...
9. The respondent Court denied petitioners' motion for reconsideration in its order
dated October 3, 1980. ... Hence, the present petition for review on certiorari under
Republic Act No. 5440. (Rollo, pp. 3-6.)
The Order of dismissal dated December 12, 1979, reads as follows:
Under consideration is a motion to dismiss embodied as a special affirmative defense
in the answer filed by defendant NPC on the grounds that said defendant performs a
purely governmental function in the operation of the Angat Dam and cannot
therefore be sued for damages in the instant cases in connection therewith.
Plaintiffs' opposition to said motion to discuss, relying on Sec. 3 (d) of Republic Act
6396 which imposes on the NPC the power and liability to sue and be sued in any
court, is not tenable since the same refer to such matters only as are within the scope
of the other corporate powers of said defendant and not matters of tort as in the
instant cases. It being an agency performing a purely governmental function in the
operation of the Angat Dam, said defendant was not given any right to commit
wrongs upon individuals. To sue said defendant for tort may require the express
consent of the State.
WHEREFORE, the cases against defendant NPC are hereby dismissed. (Rollo, p.
60.)
The Order dated October 3, 1980, denying the motion for reconsideration filed by the
plaintiffs is pro forma; the motion was simply denied for lack of merit. (Rollo, p.
74.)
The petition to review the two orders of the public respondent was filed on October
16, 1980, and on October 27, 1980, We required the respondents to comment. It was
only on April 13, 1981, after a number of extensions, that the Solicitor General filed
the required comment. (Rollo, pp. 107-114.)
On May 27, 1980, We required the parties to file simultaneous memoranda within
twenty (20) days from notice. (Rollo, p. 115.) Petitioners filed their memorandum on
July 22, 1981. (Rollo, pp. 118-125.) The Solicitor General filed a number of motions
for extension of time to file his memorandum. We granted the seventh extension
with a warning that there would be no further extension. Despite the warning the
Solicitor General moved for an eighth extension which We denied on November 9,
1981. A motion for a ninth extension was similarly denied on November 18, 1981.
The decision in this case is therefore, without the memorandum of the Solicitor
General.
The parties are agreed that the Order dated December 21, 1979, raises the following
issues:
1. Whether respondent National Power Corporation performs a governmental
function with respect to the management and operation of the Angat Dam; and
Page 6 of 8
2. Whether the power of respondent National Power Corporation to sue and be sued
under its organic charter includes the power to be sued for tort.
The petition is highly impressed with merit.
It is not necessary to write an extended dissertation on whether or not the NPC
performs a governmental function with respect to the management and operation of
the Angat Dam. It is sufficient to say that the government has organized a private
corporation, put money in it and has allowed it to sue and be sued in any court under
its charter. (R.A. No. 6395, Sec. 3 (d).) As a government owned and controlled
corporation, it has a personality of its own, distinct and separate from that of the
Government. (See National Shipyards and Steel Corp. vs. CIR, et al., L-17874,
August 31, 1963, 8 SCRA 781.) Moreover, the charter provision that the NPC can
"sue and be sued in any court" is without qualification on the cause of action and
accordingly it can include a tort claim such as the one instituted by the petitioners.
WHEREFORE, the petition is hereby granted; the Orders of the respondent court
dated December 12, 1979 and October 3, 1980, are set aside; and said court is
ordered to reinstate the complaints of the petitioners. Costs against the NPC.
SO ORDERED.
G.R. No. L-15751 January 28, 1961
BUREAU OF PRINTING, SERAFIN SALVADOR and MARIANO
LEDESMA, petitioners,
vs.
THE BUREAU OF PRINTING EMPLOYEES ASSOCIATION (NLU),
PACIFICO ADVINCULA, ROBERTO MENDOZA, PONCIANO ARGANDA
and TEODULO TOLERAN, respondents.
Office of the Solicitor General for petitioners.
Eulogio R. Lerum for respondents.
GUTIERREZ DAVID, J.:
This is a petition for certiorari and prohibition with preliminary injunction to annul
Certain orders of the respondent Court of Industrial Relations and to restrain it from
further proceeding in the action for unfair labor practice pending before it on the
ground of lack of jurisdiction. Giving due course to the petition, this Court ordered
the issuance of the writ of preliminary injunction prayed for without bond.
The action in question was upon complaint of the respondents Bureau of Printing
Employees Association (NLU) Pacifico Advincula, Roberto Mendoza, Ponciano
Arganda and Teodulo Toleran filed by an acting prosecutor of the Industrial Court
against herein petitioner 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 Serafin Salvador and Mariano
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.
Answering the complaint, the petitioners Bureau of Printing, Serafin Salvador and
Mariano Ledesma denied the charges of unfair labor practices attributed to the and,
by way of affirmative defenses, alleged, among other things, that respondents
Pacifico Advincula, Roberto Mendoza Ponciano Arganda and Teodulo Toleran were
suspended pending result of an administrative investigation against them for breach
of Civil Service rules and regulations petitions; that the Bureau of Printing has no
juridical personality to sue and be sued; 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. For relief, they prayed that the case be dismissed
for lack of jurisdiction. Thereafter, before the case could be heard, petitioners filed
an "Omnibus Motion" asking for a preliminary hearing on the question of
jurisdiction raised by them in their answer 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 dated
January 27, 1959 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 in banc, the petitioners brought the case to this Court
through the present petition for certiorari and prohibition.
We find the petition to be meritorious.
The Bureau of Printing is an office of the Government created by the Administrative
Code of 1916 (Act No. 2657). As such instrumentality of the Government, it
operates under the direct supervision of the Executive Secretary, Office of the
President, and is "charged with the execution of all printing and binding, including
work incidental to those processes, required by the National Government and such
other work of the same character as said Bureau may, by law or by order of the
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(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 (sec. 566, Rev.
Adm. Code). 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" (sec. 1654, Rev. Adm. Code), and "upon terms fixed by the
Director of Printing, with the approval of the Department Head" (sec. 1655, id.). 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.
From what has been stated, it is obvious that the Court of Industrial Relations did not
acquire jurisdiction over the respondent Bureau of Printing, and is thus devoid of any
authority to take cognizance of the case. This Court has already held in a long line of
decisions that the Industrial Court has no jurisdiction to hear and determine the
complaint for unfair labor practice filed against institutions or corporations not
organized for profit and, consequently, not an industrial or business organization.
This is so because the Industrial Peace Act was intended to apply only to industrial
employment, and to govern the relations between employers engaged in industry and
occupations for purposes of gain, and their industrial employees. (University of the
Philippines, et al. vs. CIR, et al., G.R. No. L-15416, April 28, 1960; University of
Sto. Tomas vs. Villanueva, et al., G.R. No. L-13748, October 30, 1959; La
Consolacion College vs. CIR, G.R. No. L-13282, April 22, 1960; See also the cases
cited therein.) .
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. (See Metran vs. Paredes, 45 Off. Gaz. 2835; Angat River Irrigation
System, et al. vs. Angat River Workers' Union, et. al., G.R. Nos. L-10943-44,
December 28, 1957).
The record also discloses that the instant case arose from the filing of administrative
charges against some officers of the respondent Bureau of Printing Employees'
Association by the Acting Secretary of General Services. Said administrative charges
are for insubordination, grave misconduct and acts prejudicial to public service
committed by inciting the employees, of the Bureau of Printing to walk out of their
jobs against the order of the duly constituted officials. Under the law, the Heads of
Departments and Bureaus are authorized to institute and investigate administrative
charges against erring subordinates. For the Industrial Court now to take cognizance
of the case filed before it, which is in effect a review of the acts of executive officials
having to do with the discipline of government employees under them, would be to
interfere with the discharge of such functions by said officials. WHEREFORE, the
petition for a writ of prohibition is granted. The orders complained of are set aside
and the complaint for unfair labor practice against the petitioners is dismissed, with
costs against respondents other than the respondent court.
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