BACANI v NACOCO
Facts:
Plaintiffs Bacani and Matto are both court stenographers
assigned in Branch VI of the Court of First Instance of
Manila.
During the pendency of a civil case in the said court,
Francisco Sycip vs. National Coconut Corporation, Assistant
Corporate Counsel Federico Alikpala, counsel for
Defendant, requested said stenographers for copies of the
transcript of the stenographic notes taken by them during
the hearing. Plaintiffs complied with the request by
delivering to Counsel Alikpala the needed transcript
containing 714 pages and thereafter submitted to him
their bills for the payment of their fees.
The National Coconut Corporation (NACOCO) paid the
amount of P564 to Leopoldo T. Bacani and P150 to Mateo
A. Matoto for said transcript at the rate of P1 per page. But
the Auditor General required the plaintiffs to reimburse
said amounts by virtue of a Department of Justice circular
which stated that NACOCO, being a government entity,
was exempt from the payment of the fees in question.
For reimbursement to take place, it was further ordered
that the amount of P25 per payday be deducted from the
salary of Bacani and P10 from the salary of Matoto.
Petitioners filed an action in Court countering that
NACOCO is not a government entity within the purview of
section 16, Rule 130 of the Rules of Court. On the other
hand, the defendants set up a defense that NACOCO is a
government entity within the purview of section 2 of the
Revised Administrative Code of 1917 hence, it is exempted
from paying the stenographers’ fees under Rule 130 of the
Rules of Court.
Issues:
Whether or not National Coconut Corporation (NACOCO),
which performs certain functions of government, make
them a part of the Government of the Philippines.
MACEDA v MACARAIG
FACTS:
Commonwealth Act 120 created NAPOCOR as a public
corporation to undertake the development of hydraulic
power and the production of power from other sources.
RA 358 granted NAPOCOR tax and duty exemption
privileges. RA 6395 revised the charter of the NAPOCOR,
tasking it to carry out the policy of the national
electrification and provided in detail NAPOCOR’s tax
exceptions.
PD 380 specified that NAPOCOR’s exemption includes all
taxes, etc. imposed “directly or indirectly.” PD 938 dated
May 27, 1976 further amended the aforesaid provision by
integrating the tax exemption in general terms under one
paragraph.
ISSUE:
Whether or not NPC has ceased to enjoy indirect tax and
duty exemption with the enactment of PD 938 on May 27,
1976 which amended PD 380 issued on January 11, 1974
RULING:
No, it is still exempt.
NAPOCOR is a non-profit public corporation created for the
general good and welfare, and wholly owned by the
government of the Republic of the Philippines. From the
very beginning of the corporation’s existence, NAPOCOR
enjoyed preferential tax treatment “to enable the
corporation to pay the indebtedness and obligation” and
effective implementation of the policy enunciated in
Section 1 of RA 6395.
From the preamble of PD 938, it is evident that the
provisions of PD 938 were not intended to be interpreted
liberally so as to enhance the tax exempt status of
NAPOCOR.
It is recognized that the rule on strict interpretation does
not apply in the case of exemptions in favor of government
political subdivision or instrumentality. In the case of
property owned by the state or a city or other public
corporations, the express exception should not be
construed with the same degree of strictness that applies
to exemptions contrary to the policy of the state, since as
to such property “exception is the rule and taxation the
exception.”
 Air Transport Office (ATO) v Ramos virtue of the deed of sale with the Ramos spouses might
now be enforced against the CAAP.
Sps. Ramos discovered that a portion of their land
(somewhere in Baguio) was being used as part of the
runway and running shoulder of the Loakan Airport which
is operated by ATO. Sometime in 1995, respondents agreed
to convey the subject portion by deed of sale to ATO in
consideration of the amount of Php778,150.00. However,
ATO failed to pay despite repeated verbal and written
demands. Thus, an action for collection against ATO was
filed by the respondents before the RTC. ATO’s primary
contention was that the deed of sale was entered into the
performance of governmental functions. RTC ruled in favor
of the respondents. CA affirmed RTC. Hence, the petition.

Issue: Whether ATO could be sued without the State’s

consent.

Held:
SC dismissed the petition for lack of merit.

The State’s immunity from suit does not extend to the

petitioner (ATO) because it is an agency of the State
engaged in an enterprise that is far from being the State’s
exclusive prerogative. The CA thereby correctly
appreciated the juridical character of the ATO as an agency
of the Government not performing a purely governmental
or sovereign function, but was instead involved in the
management and maintenance of the Loakan Airport, an
activity that was not the exclusive prerogative of the State
in its sovereign capacity. Hence, the ATO had no claim to
the State’s immunity from suit. The SC further observes
that the doctrine of sovereign immunity cannot be
successfully invoked to defeat a valid claim for
compensation arising from the taking without just
compensation and without the proper expropriation
proceedings being first resorted to of the plaintiff’s
property.

Lastly, the issue of whether or not the ATO could be sued

without the States consent has been rendered moot by the
passage of Republic Act No. 9497, otherwise known as the
Civil Aviation Authority Act of 2008. R.A. No. 9497
abolished the ATO and u nder its Transitory Provisions, R.A.
No. 9497 established in place of the ATO the Civil Aviation
Authority of the Philippines (CAAP), which thereby
assumed all of the ATOs powers, duties and rights, assets,
real and personal properties, funds, and revenues. Section
23 of R.A. No. 9497 enumerates the corporate powers
vested in the CAAP, including the power to sue and be
sued, to enter into contracts of every class, kind and
description, to construct, acquire, own, hold, operate,
maintain, administer and lease personal and real
properties, and to settle, under such terms and conditions
most advantageous to it, any claim by or against it. With
the CAAP having legally succeeded the ATO pursuant to
R.A. No. 9497, the obligations that the ATO had incurred by
 DOH v Phil. Pharmawealth done in the performance of official functions will result in a
charge or financial liability against the government. In its
Defense of state immunity does not apply where the public
complaint, DOH sufficiently imputes grave abuse of
official is charged in his official capacity for acts that are
discretion against petitioners in their official capacity. Since
unauthorized or unlawful and injurious to the rights of
judicial review of acts alleged to have been tainted with
others neither does it apply where the public official is
grave abuse of discretion is guaranteed by the
clearly being sued not in his official capacity but in his
Constitution, it necessarily follows that it is the official
personal capacity, although the acts complained of may
concerned who should be impleaded as defendant or
have been committed while he occupied a public position.
respondent in an appropriate suit.

FACTS: Secretary of Health Alberto G. Romualdez, Jr. issued

As regards petitioner DOH, the defense of immunity from
an Administrative Order providing for additional guidelines
suit will not avail despite its being an unincorporated
for accreditation of drug suppliers aimed at ensuring that
agency of the government, for the only causes of action
only qualified bidders can transact business with petitioner
directed against it are preliminary injunction and
Department of Health (DOH). Respondent Phil.
mandamus. Under Section 1, Rule 58 of the Rules of Court,
Pharmawealth, Inc. (Pharmawealth) submitted to DOH a
preliminary injunction may be directed against a party or a
request for the inclusion of additional items in its list of
court, agency or a person. Moreover, the defense of state
accredited drug products, including the antibiotic
immunity from suit does not apply in causes of action
―Penicillin G Benzathine.
which do not seek to impose a charge or financial liability
against the State.
Petitioner DOH issued an Invitation for Bids for the
procurement of 1.2 million units vials of Penicillin G
Hence, the rule does not apply where the public official is
Benzathine. Despite the lack of response from DOH
charged in his official capacity for acts that are
regarding Pharmawealth‘s request for inclusion of
unauthorized or unlawful and injurious to the rights of
additional items in its list of accredited products, the latter
others. Neither does it apply where the public official is
submitted its bid for the Penicillin G Benzathine contract
clearly being sued not in his official capacity but in his
and gave the lowest bid thereof. . In view, however, of the
personal capacity, although the acts complained of may
non-accreditation of respondent‘s Penicillin G Benzathine
have been committed while he occupied a public position.
product, the contract was awarded to Cathay/YSS
Laboratories‘ (YSS).
In the present case, suing individual petitioners in their
personal capacities for damages in connection with their
Respondent Pharmawealth filed a complaint for injunction,
alleged act of ―illegally abusing their official positions to
mandamus and damages with prayer for the issuance of a
make sure that plaintiff Pharmawealth would not be
writ of preliminary injunction and/or temporary restraining
awarded the Benzathine contract [which act was] done in
order with the Regional Trial praying, inter alia, that the
bad faith and with full knowledge of the limits and breadth
trial court ―nullify the award of the Penicillin G
of their powers given by law‖ is permissible, in consonance
Benzathine contract to YSS Laboratories, Inc. and direct
with the foregoing principles. For an officer who exceeds
petitioners DOH et al. to declare Pharmawealth as the
the power conferred on him by law cannot hide behind the
lowest complying responsible bidder for the Benzathine
plea of sovereign immunity and must bear the liability
contract, and that they accordingly award the same to
personally.
plaintiff company‖ and ―adjudge defendants Romualdez,
Galon and Lopez liable, jointly and severally to plaintiff.
Petitioners DOH et al. subsequently filed a motion to As a general rule, a state may not be sued. However, if it
dismiss praying for the dismissal of the complaint based on consents,either expressly or impliedly, then it may be the
the doctrine of state immunity. The trial court, however, subject of a suit.There is express consent when a law,
denied the motion to dismiss. The Court of Appeals (CA) either special or general, so provides. On the other hand,
denied DOH‘s petition for review which affirmed the order there is implied consent when the state “enters into a
issued Regional Trial Court of Pasig City denying contract or it itself commences litigation.” However, it
petitioners‘ motion to dismiss the case. must be clarified that when a state enters into a contract,
it does notautomatically mean that it has waived its
nonsuability. The State “will be deemed to have impliedly
ISSUE: Whether or not the charge against the public
waived its non
officers acting in their official capacity will prosper // WON
DOH is under the mantle of State immunity -suability [only] ifit has entered into a contract in its
proprietary or private capacity.[However,] when the
contract involves its sovereign or governmentalcapac
HELD: The suability of a government official depends on
ity, x x x no such waiver may be implied.” “Statutory
whether the official concerned was acting within his
provisions waiving state immunity are construed
official or jurisdictional capacity, and whether the acts
in strictissimi juris. For, waiver of immunity is in derogation
of sovereignty.”
UST, et. al vs. Danes B. Sanchez
G.R. No. 165569, July 29, 2010
A Complaint for Damages filed by respondent Danes B.
Sanchez (respondent) against the University of Santo
Tomas (UST) and its Board of Directors, the Dean and the
Assistant Dean of the UST College of Nursing, and the
University Registrar for their alleged unjustified refusal to
release the respondents Transcript of Records (ToR).
In his Complaint, respondent alleged that he graduated
from UST on April 2, 2002 with a Bachelors Degree of
Science in Nursing. He was included in the list of
candidates for graduation and attended graduation
ceremonies. Respondent sought to secure a copy of his
ToR with the UST Registrars Office, paid the required fees,
but was only given a Certificate of Graduation by the
Registrar. Despite repeated attempts by the respondent to
secure a copy of his ToR, and submission of his class cards
as proof of his enrolment, UST refused to release his
records, making it impossible for him to take the nursing
board examinations, and depriving him of the opportunity
to make a living. The respondent prayed that the RTC order
UST to release his ToR and hold UST liable for actual,
moral, and exemplary damages, attorneys fees, and the
costs of suit.
Petitioners filed a Motion to Dismiss where they claimed
that they refused to release respondents ToR because he
was not a registered student, since he had not been
enrolled in the university for the last three semesters. They
claimed that the respondents graduation, attendance in
classes, and taking/passing of examinations were
immaterial because he ceased to be a student when he
failed to enroll during the second semester of school year
2000-2001.
Petitioners then filed a Supplement to their Motion to
Dismiss, alleging that respondent sought administrative
recourse before the Commission on Higher Education
(CHED) through a letter-complaint. Petitioners claimed that
the CHED had primary jurisdiction to resolve matters
pertaining to school controversies.
Issues:
1) The CHED exercises quasi-judicial power over
controversies involving school matters and has primary
jurisdiction over respondents demand for the release of his
ToR. Thus, respondent failed to exhaust administrative
remedies;
2) Since respondent sought recourse with both the
CHED and the RTC, respondent violated the rule against
forum-shopping; and
3) The Complaint failed to state a cause of action,
since respondent admitted that he was not enrolled in UST
in the last three semesters prior to graduation.
Held:
1. 1. The doctrine of exhaustion of administrative
remedies requires that where a remedy before an
administrative agency is provided, the administrative
agency concerned must be given the opportunity to decide
a matter within its jurisdiction before an action is brought
before the courts. Failure to exhaust administrative
remedies is a ground for dismissal of the action.
In this case, the doctrine does not apply because
petitioners failed to demonstrate that recourse to the
CHED is mandatory or even possible in an action such as
that brought by the respondent, which is essentially one
for mandamus and damages. The doctrine of exhaustion of
administrative remedies admits of numerous
exceptions, one of which is where the issues are purely
legal and well within the jurisdiction of the trial court, as in
the present case. Petitioners liability if any for damages
will have to be decided by the courts, since any judgment
inevitably calls for the application and the interpretation of
the Civil Code. As such, exhaustion of administrative
remedies may be dispensed with. The Supreme Court held
in Regino v. Pangasinan Colleges of Science and
Technology
x x x exhaustion of administrative remedies is applicable
when there is competence on the part of the
administrative body to act upon the matter complained
of .Administrative agencies are not courts; x x x neither
[are they] part of the judicial system, [or] deemed judicial
tribunals.
Specifically, the CHED does not have the power to award
damages. Hence, petitioner could not have commenced
her case before the Commission.
In addition, the rule on primary jurisdiction applies only
where the administrative agency exercises quasi-judicial or
adjudicatory functions. Thus, an essential requisite for this
doctrine to apply is the actual existence of quasi-judicial
power. However, petitioners have not shown that the
CHED possesses any such power to investigate facts or
ascertain the existence of facts, hold hearings, weigh
evidence, and draw conclusions. Indeed, Section 8 of
Republic Act No. 7722 otherwise known as the Higher
Education Act of 1994, certainly does not contain any
express grant to the CHED of judicial or quasi-judicial
power.
2. 2.
Forum shopping exists when, as a result of an adverse opi
nion in one forum, a party seeks a favorable opinion (other
than by appeal or certiorari) in another, or when he
institutes two or more actions or proceedings grounded on
the same cause, on the gamble that one or the other court
would make a favorable disposition. Here, there can be no
forum shopping precisely because the CHED is without
quasi-judicial power, and cannot make any disposition of
the case whether favorable or otherwise.

3.3. Under Rule 16, Section 1(g) of the Rules of Court, a

motion to dismiss may be made on the ground that the
pleading asserting the claim states no cause of action. To
clarify the essential test required to sustain dismissal on
this ground, we have explained that the test of the
sufficiency of the facts found in a petition, to constitute a
cause of action, is whether admitting the facts alleged, the
court could render a valid judgment upon the same in
accordance with the prayer of the petition. Stated
otherwise, a complaint is said to assert a sufficient cause of
action if, admitting what appears solely on its face to be
correct, the plaintiff would be entitled to the relief prayed
for.
The Complaint makes the following essential allegations:
that petitioners unjustifiably refused to release
respondents ToR despite his having obtained a degree
from UST; that petitioners claim that respondent was not
officially enrolled is untrue; that as a result of petitioners
unlawful actions, respondent has not been able to take the
nursing board exams since 2002; that petitioners actions
violated Articles 19-21 of the Civil Code; and that
petitioners should be ordered to release respondents ToR
and held liable for P400,000.00 as moral
damages,P50,000.00 as exemplary damages, P50,000.00 as
attorneys fees and costs of suit, and P15,000.00 as actual
damages. Clearly, assuming that the facts alleged in the
Complaint are true, the RTC would be able to render a
valid judgment in accordance with the prayer in the
Complaint.