Constitutional Law 1

Page 1 of 328A. Preliminary Considerations 1. In Re: Joaquin T. Borromeo, 241 SCRA 405 (1995) A.M. No. 93-7-696-0 February 21, 1995 In Re JOAQUIN T. BORROMEO, Ex Rel. Cebu City Chapter of the Integrated Bar of the Philippines. It is said that a little learning is a dangerous thing; and that he who acts as his own lawyer has a fool for a client. There would seem to be more than a grain of truth in these aphorisms; and they appear to find validation in the proceeding at bench, at least. The respondent in this case, Joaquin T. Borromeo, is not a lawyer but has apparently read some law books, and ostensibly come to possess some superficial awareness of a few substantive legal principles and procedural rules. Incredibly, with nothing more than this smattering of learning, the respondent has, for some sixteen (16) years now, from 1978 to the present, been instituting and prosecuting legal proceedings in various courts, dogmatically pontificating on errors supposedly committed by the courts, including the Supreme Court. In the picturesque language of former Chief Justice Enrique M. Fernando, he has "with all the valor of ignorance," been verbally jousting with various adversaries in diverse litigations; or in the words of a well-known song, rushing into arenas "where angels fear to tread." Under the illusion that his trivial acquaintance with the law had given him competence to undertake litigation, he has ventured to represent himself in numerous original and review proceedings. Expectedly, the results have been disastrous. In the process, and possibly in aid of his interminable and quite unreasonable resort to judicial proceedings, he has seen fit to compose and circulate many scurrilous statements against courts, judges and their employees, as well as his adversaries, for which he is now being called to account. Respondent Borromeo's ill-advised incursions into lawyering were generated by fairly prosaic transactions with three (3) banks which came to have calamitous consequences for him chiefly because of his failure to comply with his contractual commitments and his stubborn insistence on imposing his own terms and conditions for their fulfillment. These banks were: Traders Royal Bank (TRB), United Coconut Planters Bank (UCPB), Security Bank & Trust Co. (SBTC). Borromeo obtained loans or credit accommodation from them, to secure which he constituted mortgages over immovables belonging to him or members of his family, or third persons. He failed to pay these obligations, and when demands were made for him to do so, laid down his own terms for their satisfaction which were quite inconsistent with those agreed upon with his obligees or prescribed by law. When, understandably, the banks refused to let him have his way, he brought suits right and left, successively if not contemporaneously, against said banks, its officers, and even the lawyers who represented the banks in the actions brought by or against him. He sued, as well, the public prosecutors, the Judges of the Trial Courts, and the Justices of the Court of Appeals and the Supreme Court who at one time or another, rendered a judgment, resolution or order Page 2 of 328 adverse to him, as well as the Clerks of Court and other Court employees signing the notices thereof. In the aggregate, he has initiated or spawned in different fora the astounding number of no less-than fifty (50) original or review proceedings, civil, criminal, administrative. For some sixteen (16) years now, to repeat, he has been continuously cluttering the Courts with his repetitive, and quite baseless if not outlandish complaints and contentions. I. CASES INVOLVING TRADERS ROYAL BANK (TRB) The first bank that Joaquin T. Borromeo appears to have dealt with was the Traders Royal Bank (TRB). On June 2, 1978, he got a loan from it in the sum of P45,000.00. This he secured by a real estate mortgage created over two parcels of land covered by TCT No. 59596 and TCT No. 59755 owned, respectively, by Socorro Borromeo-Thakuria (his sister) and Teresita Winniefred Lavarino. On June 16, 1978, Borromeo obtained a second loan from TRB in the amount of P10,000.00, this time giving as security a mortgage over a parcel of land owned by the Heirs of Vicente V. Borromeo, covered by TCT No. RT-7634. Authority to mortgage these three lots was vested in him by a Special Power of Attorney executed by their respective owners. Additionally, on April 23, 1980, Borromeo obtained a Letter of Credit from TRB in the sum of P80,000.00, in consideration of which he executed a Trust Receipt (No. 595/80) falling due on July 22, 1980. Borromeo failed to pay the debts as contracted despite demands therefor. Consequently, TRB caused the extra-judicial foreclosure of the mortgages given to secure them. At the public sale conducted by the sheriff on September 7, 1981, the three mortgaged parcels of land were sold to TRB as the highest bidder, for P73,529.09. Within the redemption period, Borromeo made known to the Bank his intention to redeem the properties at their auction price. TRB manager Blas C. Abril however made clear that Borromeo would also have to settle his outstanding account under Trust Receipt No. 595/80 (P88,762.78), supra. Borromeo demurred, and this disagreement gave rise to a series of lawsuits commenced by him against the Bank, its officers and counsel, as aforestated. A. CIVIL CASES 1. RTC Case No. R-22506; CA-G.R.CV No. 07015; G.R. No. 83306 On October 29, 1982 Borromeo filed a complaint in the Cebu City Regional Trial Court for specific performance and damages against TRB and its local manager, Blas Abril, docketed as Civil Case No. R22506. The complaint sought to compel defendants to allow redemption of the foreclosed properties only at their auction price, with stipulated interests and charges, without need of paying the obligation secured Page 3 of 328 by the trust receipt above mentioned. Judgment was rendered in his favor on December 20, 1984 by Branch 23 of the Cebu City RTC; but on defendants' appeal to the Court of Appeals — docketed as CAG.R. CV No. 07015 — the judgment was reversed, by decision dated January 27, 1988. The Court of Appeals held that the "plaintiff (Borromeo) has lost his right of redemption and can no longer compel defendant to allow redemption of the properties in question." Borromeo elevated the case to this court where his appeal was docketed as G.R. No. 83306. By Resolution dated August 15, 1988, this Court's First Division denied his petition for review "for failure . . . to sufficiently show that the respondent Court of Appeals had committed any reversible error in its questioned judgment, it appearing on the contrary that the said decision is supported by substantial evidence and is in accord with the facts and applicable law." Reconsideration was denied, by Resolution dated November 23, 1988. A second motion for reconsideration was denied by Resolution dated January 30, 1989, as was a third such motion, by Resolution dated April 19, 1989. The last resolution also directed entry of judgment and the remand of the case to the court of origin for prompt execution of judgment. Entry of judgment was made on May 12, 1989. By Resolution dated August 7, 1989, the Court denied another motion of Borromeo to set aside judgment; and by Resolution dated December 20, 1989, the Court merely noted without action his manifestation and motion praying that the decision of the Court of Appeals be overturned, and declared that "no further motion or pleading . . . shall be entertained . . . ." 2. RTC Case No. CEB 8750; CA-G.R. SP No. 22356 The ink was hardly dry on the resolutions just mentioned before Borromeo initiated another civil action in the same Cebu City Regional Court by which he attempted to litigate the same issues. The action, against the new TRB Branch Manager, Jacinto Jamero , was docketed as Civil Case No. CEB-8750. As might have been anticipated, the action was, on motion of the defense, dismissed by Order dated May 18, 1990, on the ground of res judicata, the only issue raised in the second action — i.e., Borromeo's right to redeem the lots foreclosed by TRB — having been ventilated in Civil Case No. R-22506 (Joaquin T. Borromeo vs. Blas C. Abril and Traders Royal Bank) ( supra) and, on appeal, decided with finality by the Court of Appeals and the Supreme Court in favor of defendants therein. The Trial Court's judgment was affirmed by the Court of Appeals in CA-G.R. SP No. 22356. 3. RTC Case No. CEB-9485; CA-G.R. SP No. 28221 In the meantime, and during the pendency of Civil Case No. R-22506, TRB consolidated its ownership over the foreclosed immovables. Contending that act of consolidation amounted to a criminal offense, Borromeo filed complaints in the Office of the City Prosecutor of Cebu against the bank officers and lawyers. These complaints were however, and quite correctly, given short shrift by that Office. Page 4 of 328 Borromeo then filed suit in the Cebu City RTC, this time not only against the TRB, TRB officers Jacinto Jamero and Arceli Bustamante, but also against City Prosecutor Jufelinito Pareja and his assistants, Enriqueta Belarmino and Eva A. Igot, and the TRB lawyers, Mario Ortiz and the law, firm, HERSINLAW . The action was docketed as Civil Case No. CEB-9485. The complaint charged Prosecutors Pareja, Belarmino and Igot with manifest partiality and bias for dismissing the criminal cases just mentioned; and faulted TRB and its manager, Jamero, as well as its lawyers, for consolidating the titles to the foreclosed properties in favor of the bank despite the pendency of Case No. R-22506. This action also failed. On defendants' motion, it was dismissed on February 19, 1992 by the RTC. (Branch 22) on the ground of res judicata (being identical with Civil Case Nos. R-22506 and CEB-8750, already decided with finality in favor of TRB), and lack of cause of action (as to defendants Pareja, Belarmino and Igot). Borromeo's certiorari petition to the Court of Appeals (CA G.R. SP No. 28221) was dismissed by that Court's 16th Division on October 6, 1992, for the reason that the proper remedy was appeal. 4. RTC Case No. CEB-10368; CA-G.R. SP No. 27100 Before Case No. CEB-9845 was finally decided, Borromeo filed, on May 30, 1991, still another civil action for the same cause against TRB, its manager, Jacinto Jamero, and its lawyers, Atty . Mario Ortiz and the HERSINLAW law office. This action was docketed as Civil Case No. CEB-10368, and was described as one for "Recovery of Sums of Money, Annulment of Titles with Damages." The case met the same fate as the others. It was, on defendants' motion, dismissed on September 9, 1991 by the RTC (Branch 14 ) on the ground of litis pendentia. The RTC ruled that — Civil Case No. CEB-9485 will readily show that the defendants therein, namely the Honorable Jufelinito Pareja, Enriqueta Belarmino, Eva Igot, Traders Royal Bank, Arceli Bustamante, Jacinto Jamero, Mario Ortiz and HERSINLAW are the same persons or nearly all of them who are impleaded as defendants in the present Civil Case No. CEB-10368, namely, the Traders Royal Bank, Jacinto Jamero, Mario Ortiz and HERSINLAW. The only difference is that more defendants were impleaded in Civil Case No. CEB-9485, namely, City Prosecutor Jufelinito Pareja and his assistants Enriqueta Belarmino and Eva Igot. The inclusion of the City Prosecutor and his two assistants in Civil Case No. CEB-9485 was however merely incidental as apparently they had nothing to do with the questioned transaction in said case. . . . The Court likewise found that the reliefs prayed for were the same as those sought in Civil Case No. CEB-9485, and the factual bases of the two cases were essentially the same — the alleged fraudulent foreclosure and consolidation of the three properties mortgaged years earlier by Borromeo to TRB. For some reason, the Order of September 9, 1991 was set aside by an Order rendered by another Judge on November 11, 1991 — the Judge who previously heard the case having inhibited himself; but Page 5 of 328 this Order of November 11, 1991 was, in turn, nullified by the Court of Appeals (9th Division), by Decision promulgated on March 31, 1992 in CA-G.R. SP No. 27100 (Traders Royal Bank vs. Hon. Celso M. Gimenez, etc. and Joaquin T. Borromeo), which decision also directed dismissal of Borromeo's complaint. 5. RTC Case No. CEB-6452 When a new branch manager, Ronald Sy, was appointed for TRB, Cebu City, Borromeo forthwith made that event the occasion for another new action, against TRB, Ronald Sy, and the bank's attorneys — Mario Ortiz, Honorato Hermosisima, Jr ., Wilfredo Navarro and HERSINLAW firm. This action was docketed as Civil Case No. CEB-6452, and described as one for "Annulment of Title with Damages." The complaint, dated October 20, 1987, again involved the foreclosure of the three (3) immovables above mentioned, and was anchored on the alleged malicious, deceitful, and premature consolidation of titles in TRB's favor despite the pendency of Civil Case No. 22506. On defendant's motion, the trial court dismissed the case on the ground of prematurity, holding that "(a)t this point . . ., plaintiff's right to seek annulment of defendant Traders Royal Bank's title will only accrue if and when plaintiff will ultimately and finally win Civil Case No. R-22506." 6. RTC Case No. CEB-8236 Having thus far failed in his many efforts to demonstrate to the courts the "merit" of his cause against TRB and its officers and lawyers, Borromeo now took a different tack by also suing (and thus also venting his ire on) the members of the appellate courts who had ruled adversely to him. He filed in the Cebu City RTC, Civil Case No. CEB-8236, impleading as defendants not only the same parties he had theretofore been suing — TRB and its officers and lawyers (HERSINLAW, Mario Ortiz) — but also the Chairman and Members of the First Division of the Supreme Court who had repeatedly rebuffed him in G.R. No. 83306 (SEE sub-head I, A, 1, supra), as well as the Members of the 5th, 9th and 10th Divisions of the Court of Appeals who had likewise made dispositions unfavorable to him . His complaint, dated August 22, 1989, aimed to recover damages from the defendants Justices for — . . . maliciously and deliberately stating blatant falsehoods and disregarding evidence and pertinent laws, rendering manifestly unjust and biased resolutions and decisions bereft of signatures, facts or laws in support thereof, depriving plaintiff of his cardinal rights to due process and against deprivation of property without said process, tolerating, approving and legitimizing the patently illegal, fraudulent, and contemptuous acts of defendants TRB, (which) constitute a) GRAVE DERELICTION OF DUTY AND ABUSE OF POWER emanating from the people, b) FLAGRANT VIOLATIONS OF THE CONSTITUTION, CARDINAL PRIMARY RIGHTS DUE PROCESS, ART. 27, 32, CIVIL CODE, Art. 208, REV. PENAL CODE, and R.A. 3019, for which defendants must be held liable under said laws. The complaint also prayed for reconveyance of the "fake titles obtained fraudulently by TRB/HERSINLAW," and recovery of "100,000.00 moral damages; 30,000.00 exemplary damages; and P5,000.00 litigation Page 6 of 328 expenses." This action, too, met a quick and unceremonious demise. On motion of defendants TRB and HERSINLAW, the trial court, by Order dated November 7, 1989, dismissed the case. 7. RTC Case No. CEB-13069 It appears that Borromeo filed still another case to litigate the same cause subject of two (2) prior actions instituted by him. This was RTC Case No. CEB-13069, against TRB and the latter's lawyers, Wilfredo Navarro and Mario Ortiz. The action was dismissed in an Order dated October 4, 1993, on the ground of res judicata — the subject matter being the same as that in Civil Case No. R-22506, decision in which was affirmed by the Court of Appeals in CA-G.R. CV No. 07015 as well as by this Court in G.R. No. 83306 — and litis pendentia — the subject matter being also the same as that in Civil Case No. CEB-8750, decision in which was affirmed by the Court of Appeals in CA G.R. SP No. 22356. 8. RTC Criminal Case No. CBU-19344; CA-G.R. SP No. 28275; G.R. No. 112928 On April 17, 1990 the City Prosecutor of Cebu City filed an information with the RTC of Cebu (Branch 22) against Borromeo charging him with a violation of the Trust Receipts Law. The case was docketed as Criminal Case No. CBU-19344. After a while, Borromeo moved to dismiss the case on the ground of denial of his right to a speedy trial. His motion was denied by Order of Judge Pampio A. Abarintos dated April 10, 1992. In the same order, His Honor set an early date for Borromeo's arraignment and placed the case "under a continuous trial system on the dates as may be agreed by the defense and prosecution." Borromeo moved for reconsideration. When his motion was again found without merit, by Order dated May 21, 1992, he betook himself to the Court of Appeals on a special civil action of certiorari, to nullify these adverse orders, his action being docketed as CA-G.R. SP No. 28275. Here again, Borromeo failed. The Court of Appeals declared that the facts did not show that there had been unreasonable delay in the criminal action against him, and denied his petition for being without merit. Borromeo then filed a petition for review with this Court (G.R. No. 112928), but by resolution dated January 31, 1994, the same was dismissed for failure of Borromeo to comply with the requisites of Circulars Numbered 1-88 and 19-91. His motion for reconsideration was subsequently denied by Resolution dated March 23, 1994. a. Clarificatory Communications to Borromeo Re “Minute Resolutios” He next filed a Manifestation dated April 6, 1994 calling the Resolution of March 23, 1994 "UnConstitutional, Arbitrary and tyrannical and a gross travesty of 'Justice,'" because it was "signed only by a No." The Court responded with another Resolution. Borromeo filed criminal complaints with the Office of the Cebu City Prosecutor against Jacinto Jamero (then still TRB Branch Manager). 87897.Page 7 of 328 mere clerk and . to wit: that dated July 31. B. who "in duress." Said Resolution of June 22. Carreon (of this Court's Third Division) dealing with the subject. 1 June 1990. and in the letter to him of Clerk of Court (Second Division) Fermin J. 1989. as well." This was not.R. 90-1187 and 90-1188 On March 7." agreed to the sale thereof for only P671. and with some patience drew his attention to the earlier resolution "in his own previous case (Joaquin T. 1987." and "the petition was not resolved on MERITS nor by any Justice but by a mere clerk. "John Doe and officers of Traders Royal Bank. The same matter was also dealt with in the letter received by him from Clerk of Court Luzviminda D. thru its manager. she should have received P588. will now be dealt with here. 1989. 1990.00. 1989. Nos.030. that the communications (notices) signed by the Clerk of Court start with the opening clause — Quoted hereunder. additionally stated that Borromeo "knew.R. _________. 1. The record shows that on July 10. fear and lack of legal knowledge. thereby indisputably showing that it is not the Clerk of Court who prepared or signed the resolutions. among others that the bank and its officers. S.R.S. is a resolution of the First Division of this Court dated. CRIMINAL CASES Mention has already been made of Borromeo's attempt — with "all the valor of ignorance" — to fasten not only civil." The complaints (docketed as I. although in light of then prevailing market prices. 90-1187-88) accused the respondents of "Estafa and Falsification of Public Documents. Borromeo vs. dated May 19. after reiterating that the notices sent by the Clerk of Court of the Court En Banc or any of the Divisions simply advise of and quote the resolution actually adopted by the Court after deliberation on a particular matter. No. G. I. for your information. deceit and false pretenses. promulgated on June 22. sold properties not owned by them: that by fraud. Nos. Jacinto Jamero. 1994. And the same subject was treated of in another Resolution of this Court. the first time that the matter had been explained to Borromeo. 1994." He claimed. No. 82273. notice of which was in due course served on him. Several other attempts on his part to cause criminal prosecution of those he considered his adversaries. Puno. Garma. in G. Court of Appeals and Samson Lao. 77243. . dated April 4.00 more. respondents negotiated and effected the purchase of the (foreclosed) properties from his (Borromeo's) mother. . (failed) to state clear facts and law. in relation to G. . by the way. he received a letter from Clerk of Court Julieta Y. 186 SCRA 1) and on the same issue he now raises. but also criminal liability on TRB. its officers and lawyers.000. Page 8 of 328 In a Joint Resolution dated April 11, 1990, the Cebu City Fiscal's office dismissed the complaints observing that actually, the Deed of Sale was not between the bank and Borromeo's mother, but between the bank and Mrs. Thakuria (his sister), one of the original owners of the foreclosed properties; and that Borromeo, being a stranger to the sale, had no basis to claim injury or prejudice thereby. The Fiscal ruled that the bank's ownership of the foreclosed properties was beyond question as the matter had been raised and passed upon in a judicial litigation; and moreover, there was no proof of the document allegedly falsified nor of the manner of its falsification. a. I.S. Nos. 87-3795 and 89-4234 Evidently to highlight Borromeo's penchant for reckless filing of unfounded complaints, the Fiscal also adverted to two other complaints earlier filed in his Office by Borromeo — involving the same foreclosed properties and directed against respondent bank officers' predecessors (including the former Manager, Ronald Sy) and lawyers — both of which were dismissed for lack of merit. These were: a. I. S. No. 87-3795 (JOAQUIN T. BORROMEO vs. ATTY. MARIO ORTIZ and RONALD SY) for "Estafa Through Falsification of Public Documents, Deceit and False Pretenses." — This case was dismissed by Resolution dated January 19, 1988 of the City Prosecutor's Office because based on nothing more than a letter dated June 4, 1985, sent by Bank Manager Ronald Sy to the lessee of a portion of the foreclosed immovables, advising the latter to remit all rentals to the bank as new owner thereof, as shown by the consolidated title; and there was no showing that respondent Atty. Ortiz was motivated by fraud in notarizing the deed of sale in TRB's favor after the lapse of the period of redemption, or that Ortiz had benefited pecuniarily from the transaction to the prejudice of complainant; and b. I.S. No. 89-4234 (JOAQUIN T. BORROMEO vs. RONALD SY, ET AL.) for "Estafa Through False Pretenses and Falsification of Public Documents." — This case was dismissed by Resolution dated January 31, 1990. 2. I.S.Nos. 88-205 to 88-207 While Joaquin Borromeo's appeal (G.R. No. 83306) was still pending before the Supreme Court, an affidavit was executed in behalf of TRB by Arceli Bustamante, in connection with the former's fire insurance claim over property registered in its name — one of two immovables formerly owned by Socorro B. Thakuria (Joaquin Borromeo's sister) and foreclosed by said bank. In that affidavit, dated September 10, 1987, Bustamante stated that "On 24 June 1983, TRB thru foreclosure acquired real property together with the improvements thereon which property is located at F. Ramos St., Cebu City covered by TCT No. 87398 in the name or TRB." The affidavit was notarized by Atty. Manuelito B. Inso. Page 9 of 328 Claiming that the affidavit was "falsified and perjurious" because the claim of title by TRB over the foreclosed lots was a "deliberate, wilful and blatant fasehood in that, among others: . . . the consolidation was premature, illegal and invalid," Borromeo filed a criminal complaint with the Cebu City Fiscal's Office against the affiant (Bustamante) and the notarizing lawyer (Atty. Inso) for "falsification of public document, false pretenses, perjury." On September 28, 1988, the Fiscal's Office dismissed the complaint. It found no untruthful statements in the affidavit or any malice in its execution, considering that Bustamante's statement was based on the Transfer Certificate of Title in TRB's file, and thus the document that Atty. Inso notarized was legally in order. 3. OMB-VIS-89-00136 This Resolution of this Court (First Division) in G.R. No. 83306 dated August 15, 1988 — sustaining the judgment of the Court of Appeals (10th Division) of January 27, 1988 in CA-G.R. CV No. 07015, supra, was made the subject of a criminal complaint by Borromeo in the Office of the Ombudsman, Visayas, docketed as OMB-VIS-89-00136. His complaint — against "Supreme Court Justice (First Div.) and Court of Appeals Justice (10th Div)" — was dismissed for lack of merit in a Resolution issued on February 14, 1990 which, among other things, ruled as follows: It should be noted and emphasized that complainant has remedies available under the Rules of Court, particularly on civil procedure and existing laws. It is not the prerogative of this Office to make a review of Decisions and Resolutions of judicial courts, rendered within their competence. The records do not warrant this Office to take further proceedings against the respondents. In addition, Sec. 20. of R.A. 6770, "the Ombudsman Act states that the Office of the Ombudsman may not conduct the necessary investigation of any administrative act or omission complained of if it believes that (1) the complainant had adequate remedy in another judicial or quasi-judicial body;" and Sec. 21 the same law provides that the Office of the Ombudsman does not have disciplinary authority over members of the Judiciary. II. CASES INVOLVING UNITED COCONUT PLANTERS BANK (UCPB) As earlier stated, Borromeo (together with a certain Mercader) also borrowed money from the United Coconut Planters Bank (UCPB) and executed a real estate mortgage to secure repayment thereof. The mortgage was constituted over a 122-square-meter commercial lot covered by TCT No. 75680 in Borromeo's name. This same lot was afterwards sold on August 7, 1980 by Borromeo to one Samson K. Lao for P170,000.00, with a stipulation for its repurchase ( pacto de retro) by him (Borromeo, as the vendor). The sale was made without the knowledge and consent of UCPB. A. CIVIL CASES Page 10 of 328 Now, just as he had defaulted in the payment of the loans and credit accommodations he had obtained from the Traders Royal Bank, Borromeo failed in the fulfillment of his obligations to the UCPB. Shortly after learning of Borromeo's default, and obviously to obviate or minimize the ill effects of the latter's delinquency, Lao applied with the same bank (UCPB) for a loan, offering the property he had purchased from Borromeo as collateral. UCPB was not averse to dealing with Lao but imposed several conditions on him, one of which was for Lao to consolidate his title over the property. Lao accordingly instituted a suit for consolidation of title, docketed as Civil Case No. R-21009. However, as will shortly be narrated, Borromeo opposed the consolidation prayed for. As a result, UCPB cancelled Lao's application for a loan and itself commenced proceedings foreclose the mortgage constituted by Borromeo over the property. This signaled the beginning of court battles waged by Borromeo not only against Lao, but also against UCPB and the latter's lawyers, battles which he (Borromeo) fought contemporaneously with his court war with Traders Royal Bank. 1. RTC Case No. R-21009; AC-G.R. No. CV-07396; G.R. No. 82273 The first of this new series of court battles was, as just stated, the action initiated by Samson Lao in the Regional Trial Court of Cebu (Branch 12), docketed as Case No. R-21009, for consolidation of title in his favor over the 122-square-meter lot subject of the UCPB mortgage, in accordance with Article 1007 of the Civil Code. In this suit Lao was represented by Atty. Alfredo Perez, who was later substituted by Atty. Antonio Regis. Borromeo contested Lao's application. Judgment was in due course rendered by the RTC (Branch 12, Hon. Francis Militante, presiding) denying consolidation because the transaction between the parties could not be construed as a sale with pacto de retro being in law an equitable mortgage; however, Borromeo was ordered to pay Lao the sum of P170,000.00, representing the price stipulated in the sale a retro, plus the amounts paid by Lao for capital gains and other taxes in connection with the transaction (P10,497.50). Both Lao and Borromeo appealed to the Court of Appeals. Lao's appeal was dismissed for failure of his lawyer to file brief in his behalf. Borromeo's appeal — AC-G.R. No. CV-07396 — resulted in a Decision by the Court of Appeals dated December 14, 1987, affirming the RTC's judgment in toto. The Appellate Court's decision was, in turn, affirmed by this Court (Third Division) in a four-page Resolution dated September 13, 1989, promulgated in G.R. No. 82273 — an appeal also taken by Borromeo. Borromeo filed a motion for reconsideration on several grounds, one of which was that the resolution of September 13, 1989 was unconstitutional because contrary to "Sec. 4 (3), Art. VIII of the Constitution," it was not signed by any Justice of the Division, and there was "no way of knowing which justices had deliberated and voted thereon, nor of any concurrence of at least three of the members." Since the motion was not filed until after there had been an entry of judgment, Borromeo having failed to Page 11 of 328 move for reconsideration within the reglementary period, the same was simply noted without action, in a Resolution dated November 27, 1989. Notices of the foregoing Resolutions were, in accordance with established rule and practice, sent to Borromeo over the signatures of the Clerk of Court and Assistant Clerk of Court (namely: Attys. Julieta Y. CARREON and Alfredo MARASIGAN, respectively). a. RTC Case No. CEB-8679 Following the same aberrant pattern of his judicial campaign against Traders Royal Bank, Borromeo attempted to vent his resentment even against the Supreme Court officers who, as just stated, had given him notices of the adverse dispositions of this Court's Third Division. He filed Civil Case No. CEB-8679 in the Cebu City RTC (CFI) for recovery of damages against "Attys. Julieta Y. Carreon and Alfredo Marasigan, Division Clerk of Court and Asst. Division Clerk of Court, Third Division, and Atty. Jose I. Ilustre, Chief of Judicial Records Office." He charged them with usurpation of judicial functions, for allegedly "maliciously and deviously issuing biased, fake, baseless and unconstitutional 'Resolution' and 'Entry of Judgment' in G.R. No. 82273." Summonses were issued to defendants by RTC Branch 18 (Judge Rafael R. Ybañez, presiding). These processes were brought to the attention of this Court's Third Division. The latter resolved to treat the matter as an incident in G.R. No. 82273, and referred it to the Court En Banc on April 25, 1990. By Resolution (issued in said G.R. No. 82273, supra) dated June 1, 1990, the Court En Banc ordered Judge Ybañez to quash the summonses, to dismiss Civil Case No. CEB-8679, and "not to issue summons or otherwise to entertain cases of similar nature which may in the future be filed in his court." Accordingly, Judge Ibañez issued an Order on June 6, 1990 quashing the summonses and dismissing the complaint in said Civil Case No. CEB-8679. The Resolution of June 1, 1990 explained to Borromeo in no little detail the nature and purpose of notices sent by the Clerks of Court of decisions or resolutions of the Court En Banc or the Divisions, in this wise: This is not the first time that Mr. Borromeo has filed charges/complaints against officials of the Court. In several letter complaints filed with the courts and the Ombudsman, Borromeo had repeatedly alleged that he "suffered injustices," because of the disposition of the four (4) cases he separately appealed to this Court which were resolved by minute resolutions, allegedly in violation of Sections 4 (3), 13 and 14 of Article VIII of the 1987 Constitution. His invariable complaint is that the resolutions which disposed of his cases do not bear the signatures of the Justices who participated in the deliberations and resolutions and do not show that they voted therein. He likewise complained that the resolutions bear no certification of the Chief Justice and that they did Page 12 of 328 not state the facts and the law on which they were based and were signed only by the Clerks of Court and therefore "unconstitutional, null and void." xxx xxx xxx The Court reminds all lower courts, lawyers, and litigants that it disposes of the bulk of its cases by minute resolutions and decrees them as final and executory, as were a case is patently without merit, where the issues raised are factual in nature, where the decision appealed from is in accord with the facts of the case and the applicable laws, where it is clear from the records that the petition is filed merely to forestall the early execution of judgment and for non-compliance with the rules. The resolution denying due course always gives the legal basis. As emphasized in In Re: Wenceslao Laureta, 148 SCRA 382, 417 [1987], "[T]he Court is not 'duty bound' to render signed Decisions all the time. It has ample discretion to formulate Decisions and/or Minute Resolutions, provided a legal basis is given, depending on its evaluation of a case" . . . This is the only way whereby it can act on all cases filed before it and, accordingly, discharge its constitutional functions. . . . . . . (W)hen the Court, after deliberating on a petition and any subsequent pleadings, manifestations, comments, or motions decides to deny due course to the petition and states that the questions raised are factual, or no reversible error in the respondent court's decision is shown, or for some other legal basis stated in the resolution, there is sufficient compliance with the constitutional requirement . . . (of Section 14, Article VIII of the Constitution "that no petition for review or motion for reconsideration shall be refused due course or denied without stating the legal basis thereof"). For a prompt dispatch of actions of the Court, minute resolutions are promulgated by the Court through the Clerk of Court, who takes charge of sending copies thereof to the parties concerned by quoting verbatim the resolution issued on a particular case. It is the Clerk of Court's duty to inform the parties of the action taken on their cases quoting the resolution adopted by the Court. The Clerk of Court never participates in the deliberations of a case. All decisions and resolutions are actions of the Court. The Clerk of Court merely transmits the Court's action. This was explained in the case — G.R. No. 56280, "Rhine Marketing Corp. v. Felix Gravante, et al.," where, in a resolution dated July 6, 1981, the Court said — "[M]inute resolutions of this Court denying or dismissing unmeritorious petitions like the petition in the case at bar, are the result of a thorough deliberation among the members of this Court, which does not and cannot delegate the exercise of its judicial functions to its Clerk of Court or any of its subalterns, which should be known to counsel. When a petition is denied or dismissed by this Court, this Court sustains the challenged decision or order together with its findings of facts and legal conclusions. Page 13 of 328 Minute resolutions need not be signed by the members of the Court who took part in the deliberations of a case nor do they require the certification of the Chief Justice. For to require members of the Court to sign all resolutions issued would not only unduly delay the issuance of its resolutions but a great amount of their time would be spent on functions more properly performed by the Clerk of Court and which time could be more profitably used in the analysis of cases and the formulation of decisions and orders of important nature and character. Even with the use of this procedure, the Court is still struggling to wipe out the backlogs accumulated over the years and meet the ever increasing number of cases coming to it. . . . b. RTC CIVIL CASE NO. CEB-(6501) 6740; G.R. No. 84054 It is now necessary to digress a little and advert to actions which, while having no relation to the UCPB, TRB or SBTC, are relevant because they were the predicates for other suits filed by Joaquin Borromeo against administrative officers of the Supreme Court and the Judge who decided one of the cases adversely to him. The record shows that on or about December 11, 1987, Borromeo filed a civil action for damages against a certain Thomas B. Tan and Marjem Pharmacy, docketed as Civil Case No. CEB-6501. On January 12, 1988, the trial court dismissed the case, without prejudice, for failure to state a cause of action and prematurity (for non-compliance with P.D. 1508). What Borromeo did was simply to re-file the same complaint with the same Court, on March 18, 1988. This time it was docketed as Civil Case No. CEB-6740, and assigned to Branch 17 of the RTC of Cebu presided by Hon. Mario Dizon. Again, however, on defendants' motion, the trial court dismissed the case, in an order dated May 28, 1988. His first and second motions for reconsideration having been denied, Borromeo filed a petition for review before this Court, docketed as G.R. No. 84054 (Joaquin T. Borromeo vs. Tomas Tan and Non. Mario Dizon). In a Resolution dated August 3, 1988, the Court required petitioner to comply with the rules by submitting a verified statement of material dates and paying the docket and legal research fund fees; it also referred him to the Citizens Legal Assistance Office for help in the case. His petition was eventually dismissed by Resolution of the Second Division dated November 21, 1988, for failure on his part to show any reversible error in the trial court's judgment. His motion for reconsideration was denied with finality, by Resolution dated January 18, 1989. Borromeo wrote to Atty. Fermin J. Garma (Clerk of Court of the Second Division) on April 27, 1989 once more remonstrating that the resolutions received by him had not been signed by any Justice, set forth no findings of fact or law, and had no certification of the Chief Justice. Atty. Garma replied to him on May 19, 1989, pointing out that "the minute resolutions of this Court denying dismissing petitions, like the petition in the case at bar, which was denied for failure of the counsel and/or petitioner to sufficiently 82273.000. which does not and cannot delegate the exercise of its judicial function to its Clerk of Court or any of its subalterns. denying his motion for reconsideration — had been signed only by the defendant clerks of court and not by the Justices. 1988]. Court of Appeals and Samson-Lao. 87897. Therein he complained essentially of the same thing he had been harping on all along: that in relation to G. 91030 — in which the Supreme Court dismissed his petition for "technical reasons" and failure to demonstrate any reversible error in the challenged judgment — the notice sent to him — of the "unsigned and unspecific" resolution of February 19.00. 1990 in G. yet another in an already long series. This the Court ordered expunged from the record (Resolution. are the result of a thorough deliberation among the members of this Court.R. 1990 in G. RTC Case No. defendants had usurped judicial functions by issuing resolutions signed only by them and not by any Justice. Branch 17. filed on June 1. was to commence a suit against Supreme Court (Second Division) Clerk of Court Fermin J." Borromeo obviously had learned nothing from the extended Resolution of June 1. 1990. 82273. No. 1990. July 19. and without stating the factual and legal basis thereof. They were the officers who had sent him notices of the unfavorable resolutions in G. 84054. No. Hon. . malicious and patently abusive acts" had caused him "grave mental anguish.Page 14 of 328 show that the Regional Trial Court of Cebu. Judge Renato C. Nos.R.00 and exemplary damages of P10.R. Bernardo Salas presiding). 1990. When the petition is denied or dismissed by the Court. severe moral shock. No. Borromeo vs. entitled "Joaquin T." which they ignored. Borromeo filed a "Manifestation/Motion" dated June 27. On June 8.R. and that the intervention of the Clerk consists merely in the ministerial and routinary function of communicating the Court's action to the parties concerned. he was entitled to moral damages of no less than P20. evidently smarting from this latest judicial rebuff. had committed any reversible error in the questioned judgment [resolution dated November 21.R. According to him. Dacudao ordered the records of the case transmitted to the Supreme Court conformably with its Resolution dated June 1. and defendants' "wanton. was docketed as Case No." supra — directing that all complaints against officers of that Court be forwarded to it for appropriate action. he had thereupon written letters to defendants demanding an explanation for said "patently unjust and un-Constitutional resolutions. sleepless nights and worry. 1990). 83306. No. 84999. supra.000.000. CEB-9042 What Borromeo did next. c. CEB-9042 (Branch 8. Hon. and litigation expenses of P5.00. His suit. it sustains the challenged decision or order together with its findings of facts and legal conclusions. embarrassment. 77248 and 84054." and consequently. supra (or the earlier communications to him on the same subject) which had so clearly pointed out that minute resolutions of the Court are as much the product of the Members' deliberations as full-blown decisions or resolutions. Garma and Assistant Clerk of Court Tomasita Dris. 1990 asking the Court to "rectify the injustices" committed against him in G. 1989 filed by petitioner himself and Resolved to DENY the same for lack of merit. Rule 45). 11. and for a time. In this Resolution.00. UCPB was represented in the action by Atty. G. CV No. Antonio Regis. J. CV No.00. Enrique Farrarons (UCPB Cebu Branch Manager) and Samson K . Honorato Hermosisima (both being then resident partners of ACCRA Law Office). Tomol. attorney's fees amounting to P10. or is prosecuted manifestly for delay or the question raised is too unsubstantial to require consideration" (Section 3. concurring). Circular No. United Coconut Planters Bank. 87897 dismissed it for insufficiency in form and substance and for being "largely unintelligible. in G. 1989 does . Petitioner is further advised that the first sentence of Section 14. 1-88). Named defendants in the complaint were UCPB. first by the Regional Trial Court of Cebu and then by the Court of Appeals. CA-G. Borromeo vs. thru its Ninth Division (per Martinez.. No. The Cebu RTC (Br. R-21880 (Joaquin T. ponente. 1989. or that only questions of fact are raised in the petition. Lao was represented by Atty." which was docketed as Civil Case No. 1989). Borromeo was rebuffed. and a petition for review may be dismissed summarily on the ground that "the appeal is without merit. this time by this Court. 1989 which directed as well entry of judgment (effected on August 1. That Court. Rule 45. with de la Fuente and Pe. Article VIII of the 1987 Constitution refers to a decision. and has no application to a resolution as to which said section pertinently provides that a resolution denying a motion for reconsideration need state only the legal basis therefor. the Court (First Division) said: The Court considered the Motion for Reconsideration dated July 4.R. JJ. Danilo Deen. In the Cebu City RTC. R-21880. et al. 1989 denying petitioner's first Motion for Reconsideration dated May 25. he filed a complaint for "Damages with Injunction. Rule 45).).R.000. presiding) dismissed the complaint. 1989 and the Motion for Reconsideration dated May 25. Judge Valeriano R. Lao.00." Borromeo's motion for reconsideration was denied by Resolution dated June 25. Petitioner is advised that a review of a decision of the Court of Appeals is not a matter of right but of sound judicial discretion and will be granted only when there is a special and important reason therefor (Section 4.R. RTC Case No.R. upheld UCPB's right to foreclose. and granted its counterclaim for moral damages in the sum of P20. Rules of Court) apart from being a reiteration merely of the averments of the Petition for Review dated April 14. and that the resolution of June 26. No. Jr. and litigation expenses of P1. by Atty. Once again.Page 15 of 328 2. the motion having been filed without "express leave of court" (Section 2. It should be noted that petitioner's claims have already been twice rejected as without merit. A second motion for reconsideration was denied in a Resolution dated July 31. Borromeo perfected an appeal to the Court of Appeals where it was docketed as CA-G. 1989. Rule 52. What petitioner desires obviously is to have a third ruling on the merits of his claims. 87897 Borromeo also sued to stop UCPB from foreclosing the mortgage on his property.000.. 10951. or the petition otherwise fails to comply with the formal requisites prescribed therefor (Sections 1 and 2.000. 10951. Borromeo filed a petition far review with the Supreme Court which. dismissed his appeal and affirmed the Trial Court's judgment. denouncing the resolution above mentioned as "a LITANY OF LIES. there is obviously no point in reproducing and restating the conclusions and reasons therefor of the Court of Appeals. Laurence Fernandez. impertinent and scandalous matter (Section 5.R. 1989. . Hon. . Borromeo vs. The plain and patent signification of the grounds for denial set out in the Resolution of June 26. which he had unsuccessfully tried to prevent in Case No. UCPB. Borromeo filed another action to invalidate the foreclosure effected at the instance of UCPB." Another letter of the same ilk. 1988 for submission of certified true copies of the Trial . 84999 In arrant disregard of established rule and practice. SP No. 14519. Deen. No. 1989. 1987.'" (2) his "Open Letter of Warning" dated August 12.000. Estrella C. and ABSURD SELF-SERVING LOGIC from a Supreme Court deluded and drunk with power which it has forgotten emanates from the people. 1989 Borromeo wrote to Atty." Here. CA G. Phil. . G. the Cebu City RTC (Br. et al. Pagtanac. CEB-21880.) for "Annulment of Title with Damages. News Ombudsman.Page 16 of 328 indeed state the legal reasons therefor. CEB-4852. VII. but his action was dismissed by the Appellate Court on June 7. On December 26. Premises considered. and characterizing the conclusions therein as "the height of ARROGANCE and ARBITRARINESS assuming a KING-LIKE AND EVEN GOD-LIKE POWER totally at variance and contradicted by . UNSPECIFIC. Daily Inquirer.R. and in such a case. there was no cause to modify the conclusions set forth in that judgment. 14519). Borromeo instituted a certiorari action in the Court of Appeals to annul this judgment (CA G. then the Clerk of Court of the Court's First Division. . dated August 10. CEB-4852 of the Cebu City RTC (Joaquin T. the Court further Resolved to DIRECT ENTRY OF JUDGMENT.00) and litigation expenses (P1. Rule 9 of the Rules of Court). was simply "NOTED without action" by Resolution promulgated on December 13. His letter was ordered expunged from the record because containing "false. RTC Case No. Quimlat. CONSTITUTIONAL provisions . This was Civil Case No. Generoso A. 1989. SP No." aside from being "patently UNCONSTITUTIONAL for absence of signatures and facts and law: . 1989 protesting the Court's "issuing UNSIGNED. 1989. presiding) dismissed the complaint on the ground of litis pendentia and ordered Borromeo to pay attorney's fees (P5. and (3) a communication of Domingo M. EVASIONS. On August 13.R.000. . UCPB was represented by Atty. . dated November 7. in consultation with Atty. 3. and BASELESS 'MINUTE RESOLUTIONS.00)." To the letter Borromeo attached copies of (1) his "Open Letter to the Ombudsman" dated August 10. 1989 is that the petitioner's arguments — aimed at the setting aside of the resolution denying the petition for review and consequently bringing about a review of the decision of the Court of Appeals — had failed to persuade the Court that the errors imputed to the Court of Appeals had indeed been committed and therefore. Juaban. 1988 on account of his failure to comply with that Court's Resolution of May 13. and Judge Lee's compliance. Judge Generoso Juaban. . namely." Borromeo went up to this Court on appeal. After due proceedings. Shortly thereafter. In an En Banc Resolution dated October 2. Borromeo's petition was dismissed. 84999. 84999 — filed with this Court his withdrawal of appearance. (his) knowledge and advice" — and declaring that he had "not advised and . and Hon. . 1989. 84999 — this Court. papers.R. Cerilles — who. On the other hand. CEB-8178. . and others. No. Atty. 4. CA-G. 04097. order. a. was commenced by Borromeo in the RTC of Cebu City. were noted by the Court in its Resolution dated November 29. and required Borromeo to secure the services of counsel. 1988. His motion for reconsideration dated April 4. CEB-374. .R. 1988. Civil Case No. . Jose L. the Second Division required comment on Borromeo's petition for review by the respondents therein named. on said defendants in and of the Supreme Court. CEB-8178 Predictably. without . Cerilles' withdrawal of appearance. RTC Case No. CEB-8178 on motion of the principal defendants therein.R. 1987 and its Order of February 26. Also impleaded as defendants were UCPB. G. RTC Case No. in his "Compliance" dated October 23.R. Lee of Branch 15 of said Court — to which the case was raffled — caused issuance of summonses which were in due course served on September 22. 1988. Pagtanac and Marissa Villarama (then. another action. . Jose L. 1989. Borromeo — because "Borromeo had been filing pleadings. and for statement of "the dates he received . Atty. (had) no hand in the filing of (said) Civil Case CEB 8178 before the Regional Trial Court in Cebu. Atty. Judge Generoso Juaban and United Coconut Planters Bank (UCPB). 1989. No. On November 9. required Judge Lee and the Clerk of Court and Assistant Clerk of Court of the Cebu RTC to show cause why no disciplinary action should be taken against them for issuing said summonses. respectively. among others.Page 17 of 328 Court's decision of December 26. was denied. No. again complaining that the resolution contained no findings of fact and law. alleging that there was "no compatibility" between him and his client. Cerilles entered his appearance for Borromeo. . 1989. 77248 It is germane to advert to one more transaction between Borromeo and Samson K. as already stated. . his appeal being docketed as G. First Division). In a Resolution dated October 10. had for a time represented Borromeo in G. Estrella G. No. etc. Judge Lee. Clerk of Court and Assistant Clerk of Court of the First Division ). CV No. . this time against the Trial Judge who had lately rendered judgment adverse to him. by Resolution dated March 6. Lao which gave rise to another action that ultimately landed in this Court. (said) decision and . Judge German G. 1989 — in G. apologized to the Court and informed it that he had already promulgated an order dismissing Civil Case No. 1989 of the Second Division for failure to sufficiently show that the Court of Appeals had committed any reversible error in the questioned judgment.R. Andres Narvasa (then Chairman. By Resolution of the Second Division of March 16. Jr. 1987. CARREON B. Borromeo attempted to hold his adversaries in the cases concerning the UCPB criminally liable. Borromeo came up to this Court. are the result of a thorough deliberation among the members of this Court. 1987. Borromeo appealed to the Court of Appeals.R. reading as follows: Dear Mr. Resolution dated July 6. Rhine Marketing Corp. and the subsequent sale thereof by Lao to Logarta. 34785). 04097. The action was docketed as Case No. CV No. Clerk of Court of the Third Division. by Decision promulgated on October 10. 77243 whereby the motion for reconsideration of the dismissal of the petition was denied for lack of merit. When a petition is denied or dismissed by this Court. Borromeo: This refers to your letter dated June 9. allow us to cite for your guidance. Carreon. 1986. 56280. which should be known to counsel. CRIMINAL CASES Just as he had done with regard to the cases involving the Traders Royal Bank. 1987. his petition was denied for the reason that "a) the petition as well as the docket and legal research fund fees were filed and paid late. in CA-G. which does not and cannot delegate the exercise of its judicial functions to its Clerk of Court or any of its subalterns. He thereafter insistently and persistently still sought reconsideration of said adverse resolutions through various motions and letters. et al. Felix Gravante. 1987 requesting for a copy of the actual resolution with the signatures of all the Justices of the Second Division in Case G. wherein the Supreme Court declared that "(m)inute resolutions of this Court denying or dismissing unmeritorious petitions like the petition in the case at bar. 1981 in G. In connection therewith. One of his letters — inter alia complaining that the notice sent to him by the Clerk of Court did not bear the signature of any Justice — elicited the following reply from Atty.. 77248. dated July 10. all of which were denied. . affirmed the Trial Court's judgment. JULIETA Y. this was denied by Resolution dated June 3. No. Very truly yours. on appeal. but that Court.R. his review petition being docketed as G. v. CEB-374." It is the Clerk of Court's duty to notify the parties of the action taken on their case by quoting the resolution adopted by the Court. Borromeo sued Lao and another person (Mariano Logarta) in the Cebu Regional Trial Court on the theory that his contract with the latter was not an absolute sale but an equitable mortgage. No. Julieta Y.R. Judgment was rendered against him by the Trial Court (Branch 12) declaring valid and binding the purchase of the property by Lao from him.R. and (b) the issues raised are factual and the findings thereon of the Court of Appeals are final. however. No." He moved for reconsideration. this Court sustains the challenged decision or order together with its findings of facts and legal conclusions.Page 18 of 328 The transaction involved a parcel of land of Borromeo's known as the "San Jose Property" (TCT No.. and similarly without foundation. Secretary of Justice Sedfrey Ordoñez. OMB-VIS-90-00418 A second complaint was filed by Borromeo with the Office of the Ombudsman (Visayas). CASES INVOLVING SECURITY BANK & TRUST CO. 82273 which did not bear the justices' signatures. 21615. From it Borromeo had obtained five (5) loans in the aggregate sum of P189.) for supposedly usurping judicial functions in that they issued Supreme Court resolutions (actually. 1979.19. "Finally. dated January 12. 87987). and Cebu City Prosecutor Jufelinito Pareja. OMB-VIS-89-00181 In relation to the dispositions made of Borromeo's appeals and other attempts to overturn the judgment of the RTC in Civil Case No. 3019 (and the Constitution. we find it unreasonable for complainant to dispute and defiantly refuse to acknowledge the authority of the decree rendered by the highest tribunal of the land in this case.Page 19 of 328 1. 1990. No.R. To secure payment thereof. opining that the matters therein dealt with had already been tried and their merits determined by different courts including the Supreme Court (decision. Borromeo failed to discharge his contractual obligations. 94769 The third banking institution which Joaquin T. 20617. it cannot be reasonably and fairly inferred that respondents really were the ones rendering them. was the Security Bank & Trust Company (SBTC). .A.R. Supreme Court. Undersecretary of Justice Silvestre Bello III. etc. Case No. June 26. notices of resolutions) in connection with G. . the Rules of Court. . (SBTC) A. charging them with violations of the Anti-Graft and Corrupt Practices Act and the Revised Penal Code. SBTC brought an action in the Cebu City RTC against Borromeo and Summa for collection. 1989. CIVIL CASES 1. No." and "it is not the prerogative of this office to review the correctness of judicial resolutions. Borromeo filed with the Office of the Ombudsman (Visayas) on August 18. No. 1989. a complaint against the Chairman and Members of the Supreme Court's First Division. . in G." 2.000. 21880. G. charging them with a violation of R. Again. the Members of the Ninth Division of the Court of Appeals. Case No. Hence. (Summa) issued a performance bond which set a limit of P200." III. the Office of the Ombudsman dismissed his complaint for "lack of merit" declaring inter alia that "in all the questioned actuations of the respondents alleged to constitute usurpation .R. No.00 on its liability thereunder. 1990. against Atty. and others. Borromeo engaged in running court battles. as in the case of his obligations to Traders Royal Bank and UCPB. . Summa Insurance Corp. By Resolution dated January 12. In a Resolution dated March 19.R. CA-G. 1990. consolidated in a single Promissory Note on May 31. RTC Case No. the Office of the Ombudsman dismissed Borromeo's complaint. The resolution inter alia stated that. Julieta Carreon. . Clerk of Court of the Third Division.126. with Restraining Order and Injunction. Unjust Judgment. Judgment by default was rendered in the case on January 5. as one for "Damages from Denial of Due Process.R. and P5. docketed as Civil Case No. 20617). these proceedings did not signify the end of litigation concerning Borromeo's aforesaid contractual commitments to SBTC. Leonardo Cañares. Failing in his bid for reconsideration. solidarily. and even the Judge who tried and disposed of the suit. and subsequently denied with finality his motion for reconsideration. presiding. HERSINLAW. Branch 16 (Hon. . 94769 was yet pending in the Supreme Court. both defendents were sentenced to pay to SBTC. Edgar Gica. Hon. CEB-9267. worry. . However. and eventually sold at public auction on October 19. Godardo Jacinto. . Edgar Gica. Plaintiff SBTC was represented by Atty. the amount of P436.771. No. 1990. Borromeo filed a motion to set aside the judgment by default. By Order dated May 21. but the latter dismissed his petition. 25% thereof as attorney's fees (but in no case less than P20. He denominated his action. the lawyers who represented it in Civil Case No .00 as litigation expenses. who later withdrew and was substituted by the law firm. Atty. SBTC. Fraud.R. RTC Case No. R-21615. Borromeo commenced a suit of his own in the Cebu RTC against SBTC.000. and the costs. 1989. this Court dismissed his petition.Page 20 of 328 The action was docketed as Civil Case No. civil and criminal concerning the same matter.00). On September 17. social embarrassment and severe anxiety for which he sought payment of moral and exemplary damages as well as litigation expenses. malicious and deceitful acts" in "conniving to deny plaintiff due process and defraud him through excessive attorney's fees. 2. No.000. it would be superfluous to still require defendants to present their own evidence as there is nothing for them to controvert. as will now be narrated. Borromeo appealed to this Court on certiorari — his appeal being docketed as G. The latter appeared in the suit through Atty. 94769. His Motion for Reconsideration having likewise been denied. Judge Leonardo Cañares. On February 5. 1991.. Borromeo went to the Court of Appeals for relief (CA-G. but only marked the start of another congeries of actions and proceedings. Wilfredo Navarro. Entry of Judgment was made on December 26. (his) causes of action asserted . No. Breach of Contract. and was assigned to Branch 10. A writ of execution issued in due course pursuant to which an immovable of Borromeo was levied on. the RTC of Cebu City. Atty . instituted by Borromeo. sleepless nights. presiding) granted the demurrer to evidence filed by defendants and dismissed the complaint. but the same was denied on March 6. 1990. 1990." which acts caused him grave mental and moral shock.R. holding that "since plaintiff failed to introduce evidence to support . R-21625 — HERSINLAW. . 1990. Wilfredo Navarro. CEB-9267 While G. 1989 in favor of the highest bidder. and as might now have been anticipated in light of his history of recalcitrance and bellicosity." .32." His complaint accused defendants of "wanton. and embarrassment for which the former are liable under Arts. 21. RTC Case No. CV No. he filed motions to cite Atty. lawyer of SBTC. sufficiently warned that similar displays in the future shall accordingly be dealt with with commensurate severity. Fraud and Breach of Contract). on the contrary the appellant who precariously treads the acceptable limits of argumentation and personal advocacy. Said the Court: Stripped of their disparaging and intemperate innuendoes. was. worry. the appellant is." and contended that defendants committed "wanton. according to Borromeo. and 32 of the Civil Code. and his apparent penchant for argumentum ad hominen. in fact. in fact.. Jr. 39047 Nothing daunted. honor and reputation of the Courts. Denial of Equal Protection of the Laws Violation of the Constitution. 39047. it is. one "for Damages (For Unjust Judgment and Orders. moral shock. CV No. Wilfredo F. docketed as Civil Case No. and lack of jurisdiction. HERSINLAW." on account of which he had been "caused untold mental anguish.R. 1993. 27. however. which docketed it as CA-G." The defendants filed motions to dismiss. for contempt of court. Borromeo filed on July 2. Navarro." Borromeo faulted Judges Cañares and Jacinto "for the way they decided the two cases (CVR-21615 & CEB NO. the only reason that his otherwise contumacious behavior is presently accorded the patience and leniency it probably does not deserve. by far. 20. 1991. or cannot. presiding) dismissed the complaint on grounds of res judicata. exhibited.Page 21 of 328 2. proffer nothing but a stark difference in opinion as to what can. Borromeo took an appeal to the Court of Appeals.R. Branch 15 (Judge German G. and running true to form. be considered res judicata under the circumstances. In the course thereof. Lee. This suit. The motions were denied by Resolution of the Court of Appeals (Special 7th Division) dated April 13. xxx xxx xxx By their distinct disdainful tenor towards the appellees. OTHER CASES . the RTC of Cebu City. CEB10458. takes particular note of the irresponsible leaflets he admits to have authored and finds them highly reprehensible and needlessly derogatory to the dignity. 9267). 1991 still another suit against the same parties — SBTC. malicious. Considering the temperament he has. the subject motions. CEB-10458 CA-G. IV. That he is not a licensed law practitioner is. By Order dated August 30. The Court. who had rendered the latest judgment against him. immunity of judges from liability in the performance of their official functions. sleepless nights. moreover. and unjust acts" by "conniving to defraud plaintiff and deny him equal protection of the laws and due process. and Judge Cañares — but now including Judge Godardo Jacinto. CEB-2074. On August 31. Later. 14770. Borromeo subsequently sued PBCom. .00 by the Philippine Bank of Communications (PBCom) on the security of a lot belonging to him in San Jose Street. No. docketed as G." Stubbornly. Hon. issued a Resolution inter alia dismissing Borromeo's complaint "on grounds of lack of jurisdiction and res judicata. On May 29. G. . in consideration of which a deed of sale was executed in his favor by Borromeo over two (2) parcels of land. 1994 the presiding judge. RTC Case No. His appeal to this Court. was given short shrift. The acts or omissions complained of by the plaintiff against the herein defendant and the other . Borromeo was granted a loan of P165.R. Lao is pertinent. No. 1991.Page 22 of 328 A. On March 21. . (T)his Court is of the well-considered view and so holds that this Court has indeed no jurisdiction to review. issued a Resolution denying Borromeo's motion for reconsideration. covered by TCT No. some of its personnel.R. as Chairman of the Third Division at the time in question. This is Case No. to sufficiently show that respondent court had committed any reversible error in its questioned judgment. which was yet another case filed by Borromeo outlandishly founded on the theory that a judgment promulgated against him by the Supreme Court (Third Division) was wrong and "unjust.000. Lao then mortgaged the land to PBCom as security for his own loan in the amount of P240. Judgment was rendered against him by the Trial Court. CA-G. Borromeo elevated the case to the Court of Appeals where his appeal was docketed as CA-G. Galicano O. B. 1991. RTC Case No. 1990. 14770.00. 98929. It appears that sometime in 1979. . CV No. CEB-11528 of the Regional Trial Court at Cebu City (Branch 18).00 from Republic Planters Bank. said Court rendered judgment affirming the Trial Court's decision. and Samson Lao in the Cebu Regional Trial Court alleging that the defendants had conspired to deprive him of his property. one of which was that mortgaged to PBCom. are two orders issued in Civil Case No. 98929 One other case arising from another transaction of Borromeo with Samson K. in his motion for reconsideration.R. the Court (First Division) promulgated a Resolution denying his petition for review "for being factual and for failure .000. with Samson Lao as co-maker." Impleaded as defendant in the action was former Chief Justice Marcelo B. as above stated." His Honor made the following pertinent observations: . CEB-11528 What would seem to be the latest judicial dispositions rendered against Borromeo. Borromeo failed to pay his obligations. Arriesgado. Lao agreed to. CV No. 34785. and on February 7. CEB-2974 of the Regional Trial Court of Cebu. interpret or reverse the judgment or order of the Honorable Supreme Court. at least as of date of this Resolution.R. Cebu City. Borromeo obtained a letter of credit in the amount of P37. he insisted the notices of the resolutions sent to him were unconstitutional and void because bearing no signatures of the Justices who had taken part in approving the resolution therein mentioned.000. Fernan. and did pay Borromeo's obligations to both banks (PBCom and Republic). although it was actually an equitable mortgage. 8 of the Constitution by the defendant herein. all in violation of their lawyer's oath to do no falsehood nor consent to the doing of any in Court. Borromeo's motion for reconsideration dated September 20. interpret or reverse the judgment or order of the Honorable Supreme Court would appear not only presumptuous but also contemptuous. filed by the Integrated Bar of the Philippines . 14. Lower courts are without supervising jurisdiction to interpret or to reverse the judgment of the higher courts. 1990. Borromeo averred that the respondent lawyers connived with their clients in (1) maliciously misrepresenting a deed of sale with pacto de retro as a genuine sale. the appropriate remedy should not have been obtained before this Court. 1994. V. For an inferior court to reverse. 3433 A. these lawyers were: Messrs." July 10. (2) fraudulently depriving complainant of his proprietary rights subject of the Deed of Sale. Borromeo alleged that respondents Perez and Regis falsely attempted to consolidate title to his property in favor of Lao. Fernan in his personal capacity.Page 23 of 328 personnel of the highest Court of the land as alleged in paragraphs 6 to 12 of plaintiff's complaint are certainly beyond the sphere of this humble court to consider and pass upon to determine their propriety and legality. a careful perusal of the allegations in the complaint clearly shows that all material allegations thereof are directed against a resolution of the Supreme Court which was allegedly issued by the Third Division composed of five (5) justices. interpret or review the acts of a superior court might be construed to a certain degree as a show of an uncommon common sense. 3433." In a pleading dated July 10. As argued by the lawyer for the defendant. how could this Court question the wisdom of the final order or judgment of the Supreme Court (Third Division) which according to the plaintiff himself had issued a resolution denying plaintiffs petition and affirming the Lower Court's decision as reflected in the "Entry of Judgment. and (3) defying two lawful Court orders. due process and Sec. entitled " Comments and Counter Motion to Cite Joaquin Borromeo in Contempt of Court . ADMINISTRATIVE CASE No. As already mentioned. Complaint Against Lawyers of his Court Adversaries Borromeo also initiated administrative disciplinary proceedings against the lawyers who had appeared for his adversaries — UCPB and Samson K. Lao — in the actions above mentioned. Danilo Deen. His complaint against them." Perhaps. docketed as Administrative Case No. if there was such violation of the Rules of Court. Honorato Hermosisima. and others. 1990. 1994 was denied "for lack of sufficient factual and legal basis" by an Order dated November 15. prayed for their disbarment. Answer of Respondent Lawyers The respondent lawyers denounced the disbarment complaint as "absolutely baseless and nothing but pure harassment. Laurence Fernandez. and Alfredo Perez. Art. B. That being the case. No allegation is made directly against defendant Marcelo B. To try to review. Antonio Regis. Legaspi. . And lawyers included. They tend to bring dishonor to the Judiciary and subvert the public confidence on the courts. Espina (Director). Fernan with supposed infidelity and violation of the constitution. and Ana Mar Evangelista P. reached after due investigation. . here is a non-lawyer who. Cebu City Chapter. Ildefonsa A. Lainid (Director). as well as the corresponding records in seven (7) volumes. and other members of the Judiciary are clearly and grossly disrespectful. Sylvia G. Ulysses Antonio C.. Said decision approved and adopted the Report and Recommendation dated December 15. Corazon E. signed by Domero C.Page 24 of 328 Cebu City Chapter. Juliano Neri (Vice-President). Manuel P. 1994. Estenzo (President). Velasquez (Secretary)." C. with gleeful abandon and unmitigated insolence. President. recommending dismissal of the complaint as against . Valencia (Director). . it is very unfortunate that here is a non-lawyer who uses the instruments of justice to harass lawyers and courts who crosses his path more especially if their actuations do not conform with his whims and caprices. the National Executive Director. Subsequently. representing the IBP Commission on Bar Discipline. Almase (Director). in the same proceeding. While men of the legal profession regard members of the Judiciary with deferential awe and respect sometimes to the extent of cowering before the might of the courts. Manuel A. Felipe B. Jose Aguila Grapilon) transmitted to this Court the notice and copy of the decision in the case. If unchecked. Borromeo filed another pleading protesting the alleged "refusal" of the Cebu City Chapter of the Integrated Bar of the Philippines to act on his disbarment cases "filed against its members. For indeed. IBP. Decision of the IBP On March 28. (S)omething should be done to protect the integrity of the courts and the legal profession. insolent and contemptuous. The lawyers made the following observations: It is ironic. Yap (Treasurer). Batiguin (Auditor). inter alia charging then Chief Justice Marcelo B. the scurrilous attacks will undermine the dignity of the courts and will result in the loss of confidence in the country's judicial system and administration of justice. 1993 of Atty. Adverting to letters publicly circulated by Borromeo. Virgilio U. IBP (Atty. has cast aspersions and shown utter disregard to the authority and name of the courts. So many baseless badmouthing have been made by Borromeo against this Honorable Court and other courts that for him to go scot-free would certainly be demoralizing to members of the profession who afforded the court with all the respect and esteem due them. the lawyers went on to say the following: The conduct and statement of Borromeo against this Honorable Court. etc. Ybañez (Director). . oppressors. corrupt. Fernan." flyers or leaflets harshly and quite unwarrantedly derogatory of the many court judgments or directives against him and defamatory of his adversaries and their lawyers and employees." VI. nuisance. sanctions injustice and the trampling of the rule of law and due process. supra. The writing and circulation of these defamatory writing were apparently undertaken by Borromeo as a parallel activity to his "judicial adventures." Another circulated letter of his. the courts are agents of oppression. particularly in their issuance of so-called Minute Resolutions devoid of FACT or LAW or SIGNATURES . Due Process and Rule of Law." In those publicly circulated writings. instead of being saviours and defenders of the people. he wrote to the editor of the "Daily Star" as regards the reported conferment on then Chief Justice Marcelo B. and does not comply with the Constitution when it should be the first to uphold and defend it . 3433. many times. . he observed that "3 years after EDSA. violators of the Constitution and the laws.." In another letter to Chief Justice Fernan. . Fernan of an "Award from the University of Texas for his contributions in upholding the Rule of Law. and harassment suits' while failing to refute the irrefutable evidences therein . as well as the judges and court employees involved in the said adverse dispositions — some of which scurrilous writings were adverted to by the respondent lawyers in Adm. (which were found to be) highly reprehensible and needlessly derogatory to the dignity. etc. . . . 1989 and captioned. ." He sent a copy of his letter in the Supreme Court. . which in effect sanction the theft and . Sometime in July. "Open Letter to Supreme Court Justices Marcelo Fernan and Andres Narvasa. he calls judges and lawyers ignorant. "circulars. . The saddest part is that (referring again to minute resolutions) even the Supreme Court. Justice." declaring that he had "suffered INJUSTICE after INJUSTICE from you who are sworn to render TRUE JUSTICE but done the opposite.." repeated his plaint of having "been the victim of many . . the court of last resort. ." The Court of Appeals had occasion to refer to his "apparent penchant for argumentum ad hominen" and of the "irresponsible leaflets he admits to have authored ." stressing that Fernan "and the Supreme Court persist in rendering rulings patently violative of the Constitution. 'Minute Resolutions' . honor and reputation of the Courts. He circulated an "OPEN LETTER TO SC justices. labeled my cases as 'frivolous. Injustice continues and as you said. AND INSTEAD OF RECTIFYING THEM. dated June 21." in the same letter. Case No. etc. .Page 25 of 328 all the respondents and the issuance of a "warning to Borromeo to be more cautious and not be precipitately indiscriminate in the filing of administrative complaints against lawyers. he specified what he considered to be some of "the terrible injustices inflicted on me by this Court. SCURRILOUS WRITINGS Forming part of the records of several cases in this Court are copies of letters ("open" or otherwise). 1990. . your pledges have not been fulfilled. for instance. ." Another flyer has at the center the caricature of a person. surrounded by such statements as. "Sa TRB para kami ay royalty. and UNCONSTITUTIONAL sham rulings that Narvasa & Co." In another flyer entitled in big bold letters.Page 26 of 328 landgrabbing and arson of my properties by TRADERS ROYAL BANK. "A Gov't That Lies! Blatant attempt to fool people!" he mentions what he regards as "The blatant lies and contradictions of the Supreme Court. Art. . or signatures violate the Constitution" and ends with the admonition: "Supreme Court. NARVASA – TYRANTS!!! - CODDLERS OF CROOKS! VIOLATOR OF LAWS by: JOAQUIN BORROMEO NARVASA's SC has denied being a DESPOT nor has it shielded CROOKS in the judiciary." One other "circular" reads: SC. have CODDLED CROOKS like crony bank TRB. . . TAN — all without stating any FACT or LAW to support your dismissal of . and through said fake resolutions that Narvasa has LIED or shown IGNORANCE of the LAW in ruling that CONSIGNATION IS NECESSARY IN RIGHT OF REDEMPTION (GR 83306). law. (my) cases. It is precisely through said TYRANNICAL." These are lame. It is pure and simply TYRANNY when Narvasa and associates issued UNSIGNED. UCPB. 14. 8 of the Constitution. and SBTC. Nakaw at nakaw! Kawat Kawat! TRB WILL STEAL!" etc Still another "circular" proclaims: "So the public may know: Supreme Court minute resolutions w/o facts. . Adding "The SCRA (SC Reports) will attest to this continuing vigilance Of the supreme Court. AND one TOMAS B. UNCLEAR. 4(3). . have sanctioned UCPB/ACCRA's defiance of court orders and naked land grabbing — What are these if not TYRANNY? (GR 84999). UNITED COCONUT PLANTERS BANK. CA to support the landgrabbing by Traders Royal Bank of Borromeos' Lands. SWEEPING "Minute Resolutions" devoid of CLEAR FACTS and LAWS in patent violation of Secs. Through said despotic resolutions. cowardly and self-serving denials and another "self-exoneration" belied by evidence which speak for themselves (Res Ipsa Loquitor) (sic) — the SCRA itself. NARVASA & CO. Justice Fernan: STOP VIOLATING THE CHARTER. despite your firm assurances (Justice Fernan) that you would cite me such facts or laws (during our talk in your house last March 12 1989)." and that "you in fact have no such facts or laws but simply want to ram down a most unjust Ruling in favor of a wrongful party. seated on a throne marked Traders Royal Bank. But their acts speak for themselves! NARVASA & ASSOC: ANSWER AND REFUTE THESE SERIOUS CHARGES OR RESIGN!! IMPEACH NARVASA • ISSUING UNSIGNED. 82273). and even MERE CLERKS TO BE IMMUNE FROM SUIT AND UN-ACCOUNTABLE TO THE PEOPLE and REFUSING TO ANSWER AND REFUTE CHARGES AGAINST HIMSELF JOAQUIN T. HENCE IN DEFAULT • CORRUPTION AND/OR GROSS IGNORANCE OF THE LAW IN RULING. not in fact trampling on the rule of law and rules of court and DUE PROCESS in so doing? (GR No. JUSTICES. CONTRADICTING LAW AND SC'S OWN RULINGS — TO ALLOW CRONY BANK TRB TO STEALS LOTS WORTH P3 MILLION • CONDONING CRONY BANK UCPB'S DEFIANCE OF TWO LAWFUL COURT ORDERS AND STEALING OF TITLE OF PROPERTY WORTH P4 MILLION • BEING JUDGE AND ACCUSED AT THE SAME TIME AND PREDICTABLY EXONERATING HIMSELF AND FELLOW CORRUPT JUSTICES • DECLARING HIMSELF. 14. BORROMEO Mabolo. SWEEPING. 7-56-49. TYRANTS will never admit that they are tyrants. 82273). dated June 21. Was it not tyranny and abuse of power for the SC to order a case dismissed against SC clerks (CEBV-8679) and declare justices and said clerks "immune from suit" — despite their failure to file any pleading? Were Narvasa & Co. 8. ART. Constitution • VIOLATING RULES OF COURT AND DUE PROCESS IN ORDERING CASE AGAINST SC CLERKS (CEB-8679) DISMISSED DESPITE THE LATTER'S FAILURE TO FILE PLEADINGS. UNCLEAR. UNCONSTITUTIONAL "MINUTE RESOLUTIONS" VIOLATIVE OF SECS.R No. 4(3). Cebu City Te.Page 27 of 328 Was it not tyranny for the SC to issue an Entry of Judgment without first resolving the motion for reconsideration (G. VI. Letter of Cebu City Chapter IBP. IMMEDIATE ANTECEDENTS OF PROCEEDINGS AT BAR A. 1992 . THAT CONSIGNATION IS NECESSARY IN RIGHT OF REDEMPTION. President. among others. Atty. Resolution of July 22. In that letter Atty. Borromeo v.e. 87897 (Joaquin T. Borromeo v. Borromeo for his condemnable act.sent to the IBP Cebu City Chapter and probably other officers . Court of Appeals. The records further disclose subsequent adverse rulings by the Court in other cases instituted by Borromeo in this Court. Borromeo vs. . Its President thereupon addressed a letter to this Court. and taking account of the related facts on record.. Traders Royal Bank [referred to by Borromeo in the "circular" adverted to by the relator herein. 83306 (Joaquin T. Puno. 1989. the IBP Cebu City Chapter]) and two (2) other cases also filed with the Court by Borromeo: G.R. ." B. Court of Appeals and Samson Lao). Acting on the letter dated June 21. The resolution pertinently reads as follows: xxx xxx xxx The records of the Court disclose inter alia that as early as April 4. . Borromeo concerning G. all resolved adversely to him by different Divisions of the Court. No. dated June 21. i. 77248 (Joaquin T. Integrated . the Acting Clerk of Court. which (1) drew attention to one of them — that last quoted. the Court Resolved: 1) to REQUIRE: (a) the Clerk of Court (1) to DOCKET the matter at bar as a proceeding for contempt against Joaquin T. above — " . . 1992. . Hon. No. Puno explained to Borromeo very briefly the legal principles applicable to his cases and dealt with the matters mentioned in his circular." described as containing "highly libelous and defamatory remarks against the Supreme Court and the whole justice system"— and (2) in behalf of the Chapter's "officers and members. 1993 of the Cebu City Chapter of the Integrated Bar of the Philippines thru its above named. requiring comment by Borromeo on the letter.R. the Court En Banc issued a Resolution on July 22.Page 28 of 328 Copies of these circulars evidently found their way into the hands. 82273 (Joaquin T. as well as the existence of other communications made public by Borromeo reiterating the arguments already passed upon by the court in his cases and condemning the court's rejection of those arguments. Mario Dizon and Tomas Tan). et al. wrote a four page letter to Mr. Borromeo instituted at the relation of said Cebu City Chapter.) and No. 1993. in Cebu." strongly urged the Court "to impose sanctions against Mr.R.R. No. of some members of the Cebu City Chapter of the Integrated Bar of the Philippines. Borromeo v. notice of which was sent to him by the Office of the Clerk of Court. 1993 Acting thereon. Borromeo v. No. Luzviminda D. Samson Lao and Mariano Logarta) and G. 84054 (Joaquin T. G. explained to Borromeo for perhaps the second time. 1993 In response to the Resolution of July 22. to wit: that dated July 31. 1. Puno's Letter of April 4. and (2) to SEND to the City Sheriff.R. 1994 in G. (and) this case should be heard by an impartial and independent body. to file a comment on the letter and its annexes as well as on the other matters set forth in this resolution. and three resolutions of this Court. No. Garma. 1987. No. Cebu City. . 82274 (186 SCRA 1)." hence. referred to in the first paragraph of the resolution just mentioned. No. R. 1993 together with its annexes.Page 29 of 328 Bar of the Philippines. Cebu City. C. treated of in several other communications and resolutions sent to him by the Supreme Court. and 2) to ORDER said Joaquin T. 1993 and its annexes. notices of which were in due course served on him. and (b) said City Sheriff of Cebu City to CAUSE PERSONAL SERVICE of said notice of resolution and a copy of the Chapter's letter dated June 21. that dated June 1. Borromeo's Comment of August 27. 112928. together with its annexes.R.R No. 1989." 2) the Chief Justice and other Members of the Court should inhibit themselves "since they cannot be the Accused and Judge at the same time. from Clerk of Court Julieta Y. precisely the principles and established practice relative to "minute resolutions" and notices thereof." . Palace of Justice Building. in G. SO ORDERED. the Cebu City Chapter of the Integrated Bar of the Philippines. "a certified copy duly signed by Justices is respectfully requested. notice of this resolution and copies of the Chapter's letter dated June 21. Cebu City. Carreon (of this Court's Third Division) (in relation to G. 77243 ) the letter to him of Clerk of Court (Second Division) Fermin J. Borromeo filed a Comment dated August 27. . to wit: the letter received by him on July 10. . within ten (10) days from receipt of such notice and the IBP Chapter's letter of June 21. Atty. on Joaquin T. serving copy thereof on the relator. Capitol. and that dated June 11. Borromeo at his address at Mabolo. Borromeo. 1993 (requiring comment) violates the Constitution which requires "signatures and concurrence of majority of members of the High Court. 87897. 1993. 1989 Clerk of Court Puno's letter to Borromeo of April 4. 1989. 1993. dated May 19. 1990 in G. 1993 in which he alleged the following: 1) the resolution of July 22. 1989. " and does not appear that Atty. notice of which was again served on him by the Office of the Clerk of Court. Legaspi has authority to speak or file a complaint "in behalf of those accused in the "libelous circular. and be reprsented by an attorney. . is vague. 1993." the circular merely states the truth and asks for justice based on the facts and the law. . D. on the letter of President Manuel P. 1993. the Court Resolved to GRANT Joaquin T. SO ORDERED. Atty. Legaspi . . . 1992 Borromeo filed a "Supplemental Comment" dated October 15. Borromeo's Supplemental Comment of October 15." viz. III) and in accordance with the accountability of public officials. 5) he "stands by the charges in his circular and is prepared to support them with pertinent facts. 1993.. Legaspi of the relator dated June 21. 4. dated August 26. should specify under oath which statements are false and lies." 4) in making the circular. Borromeo an additional period of fifteen (15) days from notice hereof within which to engage the services or otherwise seek the assistance of a lawyer and submit such further arguments in addition to or in amplification of those set out in his Comment dated August 27. 1993 After receipt of the comment. and to petition the government for redress of grievances as guaranteed by the Constitution (Sec. reiterating the arguments and allegations in his Comment of August 27. . if he be so minded. and desiring to accord Borromeo the fullest opportunity to explain his side. 1992. The return of service filed by Sheriff Jessie A. 1993. dated August 27. it is not libelous nor disrespectful but rather to be commended and encouraged. Legaspi "is not verified nor signed by members of said (IBP Cebu Chapter) Board. .: 1) the IBP and Atty. and the Comment of Joaquin Borromeo. unspecific. Art. . are both NOTED. Chief Justice and members of the High Court to either refute said charges or dispense the justice that they are duty bound to dispense. ." and it is "incumbent on the Hon. After deliberating on the allegations of said Comment. . . the Court promulgated the following Resolution on September 30. . . .Page 30 of 328 3) the letter of Atty. . he (Borromeo) "was exercising his rights of freedom of speech. Resolution of September 30. and sweeping" because failing to point out "what particular statements in the circular are allegedly libelous and condemnable. of expression. evidence and law. 1993. (they should) be ordered to file a VERIFIED COMPLAINT . . E. . Office of the Clerk of Court Regional Trial Court of Cebu City. . Legaspi have failed "to specify and state under oath the alleged 'libelous' remarks contained in the circular . 1993. (said) Comment. . . . Belarmino. . and setting forth "additional arguments and amplification to . he has insulted the judges and court officers. Borromeo's ”Manifestation” of November 26. there can scarcely be any doubt of Borromeo's guilt of contempt. obstinately closing his eyes to the many rulings rendered adversely to him in many suits and proceedings. Nos. He has wasted the time of the courts. 2) the allegations in their circular are not libelous nor disrespectful but "are based on the TRUTH and the LAW". Legaspi to substantiate his charges under oath and the failure of the concerned Justices to refute the charges in the alledged "libelous circular" and. Court has deplorably condoned crony banks TRB and UCPB's frauds and defiance of court orders in G. adverting to "the failure of the IBP and Atty. obstructing and degrading the administration of justice. c) this Hon. of his adversaries. b) there is no basis nor thruth to this Hon. founded on nothing more than his personal (and quite erroneous) reading of the Constitution and the law. F. Respondent's Liability for Contempt of Court Upon the indubitable facts on record. pleadings and motions. gross disrespect to courts and judges and improper conduct directly impeding.R. Court has ruled in many rulings that CONSIGNATION IS UNNECESSARY in right of redemption. More particularly. construing these as "and admission of the thruth in said circular. 13. VIII of the Constitution. 1993. since no less than this Hon." VII. 14. of the judges and court employees who have had the bad luck of having to act in one way or another on his unmeritorious cases. needlessly overloaded the court dockets and sorely tried the patience of the judges and court employees who have had to act on his repetitious and largely unfounded complaints. 1993 Borromeo afterwards filed a "Manifestation" under date of November 26. Legaspi's baseless and false charges. including the attorneys appearing for his adversaries. THE COURT CONCLUSIONS A. He has stubbornly litigated issues already declared to be without merit." theorized that it is "incumbent on the said Justices to rectify their grave as well as to dismiss Atty. despite his attention having been called many times to the egregious error of his theory that . 83306 and 878997 and 84999. Art.Page 31 of 328 (failing in which. namely: a) "minute resolutions" bereft of signatures and clear facts and laws are patent violations of Secs. obdurately and unreasonably insisting on the application of his own individual version of the rules. Court's affirmation to the Appelate Court's ruling that the undersigned "lost" his right of redemption price. they should) be cited in contempt of court for making false charges and wasting the precious time of this Highest Court by filing a baseless complaint. 4(32). for abuse of and interference with judicial rules and processes. rulings which had become final and executory. courts would be inferior to prosecuting officers and impotent to perform their functions with dispatch and absolute independence. the court employees and parties involved. Equally as superficial. ." His claim — that the letter of Atty. . III) and in accordance with the accountablity of public officials. is still another illustration of an entirely unwarranted. Art. Legaspi "is not verified nor signed by members of said (IBP Cebu Chapter) Board. Untenability of Proffered Defenses The first defense that he proffers. lawyers and the public. The charge may be made by the fiscal. . is essential to the preservation of its dignity and of the respect due it from litigants. in order to bring the guilty to justice. Were the intervention of the prosecuting officer required and judges obliged to file complaints for contempts against them before the prosecuting officer. . The institution of charges by the prosecuting officer is not necessary to hold persons guilty of civil or criminal contempt amenable to trial and punishment by the court. Basic Principles Governing the Judicial Function . is his other contention that in making the allegations claimed to be contumacious. 4. arrogant and reprehensible assumption of a competence in the field of the law: he again uses up the time of the Court needlessly by invoking an argument long since declared and adjudged to be untenable. that the Chief Justice and other Members of the Court should inhibit themselves "since they cannot be the Accused and Judge at the same time . and bringing them into disrepute and disrespect." and it does not appear that Atty. he has mulishly persisted in ventilating that self-same theory in various proceedings. deserving no serious treatment. is vague. unspecific. and to petition the government for redress of grievances as guaranteed by the Constitution (Sec. and other persons. plainly nothing but superficial philosophizing. for insulting lawyers. causing much loss of time. of expression." The constitutional rights invoked by him afford no justification for repetitious litigation of the same causes and issues. judges. All that the law requires is that there be a charge in writing duly filed in court and an opportunity to the person charged to be heard by himself or counsel. wasting their time. by the judge. . court employees. Legaspi has authority to speak or file a complaint "in behalf of those accused in the 'libelous' circular" — is in the premises. or even by a private person. (and) this case should be heard by an impartial and independent body. annoyance and vexation to the courts. B. . . It is axiomatic that the "power or duty of the court to institute a charge for contempt against itself.Page 32 of 328 the so-called "minute resolutions" of this Court should contain findings of fact and conclusions of law. and should be signed or certified by the Justices promulgating the same. he "was exercising his rights of freedom of speech. for abusing the processes and rules of the courts. and sweeping" because failing to point out what particular statements in the circular are allegedly libelous and condemnable. without the intervention of the fiscal or prosecuting officer. 1. . and sophistical. a party "may think highly of his intellectual endowment. or terminated. Judicial Hierarchy Courts exist in every civilized society for the settlement of controversies. the presentation of evidence by the parties — a trial or hearing in the first instance — as well as a review of the judgments of lower courts by higher tribunals. Its decision should not and cannot be appealed to or reviewed by any other entity. is that judgments of the highest tribunal of the land may not be reviewed by any other agency. no further ventilation of the same subject matter is allowed. and a more or less comprehensive system of review of judgments and final orders of lower courts. but the Court's.. or official of Government. Hence. As observed by this Court in Rheem of the Philippines v. This is his misfortune. Once the Supreme Court has spoken. indeed. on the part of the losing parties. continuing disagreement with the verdict. and is in the very nature of things. And he may suffer frustration at what he feels is others' lack of it. should not be allowed to harden into a belief that he may attack a court's decision in words calculated to jettison the time-honored aphorism that courts are the temples of right. salutary and self-evident principle prevailing in this as in most jurisdictions. To be sure. and. there the matter must rest. after the procedures and processes for lawsuits have been undergone. it is not their will. Some such frame of mind. branch. and the modes of review set by law have been exhausted. In every country there is a more or less established hierarchical organization of courts. flawed in its . is to be expected. 2. Paramount Need to end Litigation at Some Point It is withal of the essence of the judicial function that at some point. and the conclusions therein embodied." 3. Judgments of Supreme Court Not Reviewable The sound. department. exclusive to the courts. That is his privilege. generally by consideration anew and ventilation of the factual and legal issues through briefs or memoranda. litigation must end. the issues must be laid to rest and the court's dispositions thereon accorded absolute finality. to repeat. i. much less reversed or modified on the ground that it is tainted by error in its findings of fact or conclusions of law.e. which must prevail. a 1967 decision. Ferrer. public policy demands that at some definite time.Page 33 of 328 The facts and issues involved in the proceeding at bench make necessary a restatement of the principles governing finality of judgments and of the paramount need to put an end to litigation at some point. there may be. however. This is of no moment. but. Reason for courts. The procedure for review is fixed by law. and to lay down definite postulates concerning what is perceived to be a growing predilection on the part of lawyers and litigants — like Borromeo — to resort to administrative prosecution (or institution of civil or criminal actions) as a substitute for or supplement to the specific modes of appeal or review provided by law from court judgments or orders. The judicial system in this jurisdiction allows for several levels of litigation. 1. Inc. et al. whether an en banc or division. As aptly declared in the Chief Justice's Statement of December 24. without jeopardizing the principle of separation of powers and undermining one of the cornerstones of our democractic system — the remedy is by amendment or curative legislation." It is elementary that "(A)s has ever been stressed since the early case of Arnedo vs. and to determine the respective rights of the parties.. which the Court hereby adopts in toto. and for deliberatly causing "undue injury" to respondent . not by judicial decree" is fully and reciprocally applicable to Supreme Court orders. Lopez Vito. et al. If there has been any mistake in the printing of the bill before it was certified by the officers of Congress and approved by the Executive [as claimed by petitioner-importer who unsuccessfully sought refund of margin fees] — on which we cannot speculate. 1986. (Luzon Brokerage Co. Inc. Pons. Co. resolutions of the Supreme Court as a collegiate court. 263 [1911]) "controlling and irresistible reasons of public policy and of sound practice in the courts demand that at the risk of occasional error. into which. In an extended Resolution promulgated on March 12. 729. 34 Phil. . Llorente (18 Phil. . 1987 in In Re: Wenceslao Laureta — involving an attempt by a lawyer to prosecute before the Tanod bayan "members of the First Division of this Court collectively with having knowingly and deliberately rendered an 'unjust extended minute Resolution' with deliberate bad faith in violation of Article 204 of the Revised penal Code ".. . so as to be thereafter beyond the control even of the court which rendered them for the purpose of correcting errors of fact or of law. in violation of the Anti-Graft and Corrupt Practices Act . public and private. . .. is conclusive upon the courts as regards the tenor of the measure passed by Congress and approved by the President. . 78 Phil. 118. vs. 1) The Supreme Court's pronouncement of the doctrine that "(I)t is well settled that the enrolled bill . and her co-heirs because of the "unjust Resolution" promulgated. Mabanag vs. speak for themselves and are entitled to full faith and credence and are beyond investigation or inquiry under the same principle of conclusiveness of enrolled bills of the legislature. . or otherwise erroneous in some other respect. and constitutional and traditional principle. 316-317) xxx xxx xxx Indeed. in the opinion of the court it may have fallen. — the following pronouncements were made in reaffirmation of established doctrine: . vs. . . . 86 SCRA 305..S. or by a rule of practice recognized by law. Gardiner. judgments of courts determining controversies submitted to them should become final at some definite time fixed by law. vs. Maritime Bldg. . on the indisputable and unshakable foundation of public policy. to decide the questions submitted to the litigants. 61 Phil.Page 34 of 328 logic or language.. Paredes. The very purpose for which the courts are organized is to put an end to controversy. 257. (U. No other department or agency may pass upon its judgments or declare them "unjust. This. "(I)t is elementary that the Supreme Court is supreme — the third great department of government entrusted exclusively with the judicial power to adjudicate with finality all justiciable disputes. a review of a ruling or act of a court on the ground that it was rendered without or in excess of its jurisdiction. They may. 34 SCRA 275. 61 Phil. administrative complaints are being presented to the Office of the Court Administrator. no longer be reviewed. legislative and judicial departments being left alone to discharge their duties as they see fit" (Tan vs. (Tecson vs. in accordance with fixed and familiar rules and conformably with the hierarchy of courts. 4. depending on whether questions of both fact and law. It has thus maintained in the same way that the judiciary has a right to expect that neither the President nor Congress would cast doubt on the mainspring of its orders or decisions. Inc. civil actions for recovery of damages commenced in the Regional Trial Courts against trial judges. 7 SCRA 347. should judgments of lower courts — which may normally be subject to review by higher tribunals — become final and executory before. are raised.. or of law only. 43 SCRA 677). and an appeal to either the Court of Appeals or the Supreme Court. impervious to modification. Gimenez. the Court takes judicial notice of the fact that there has been of late a regrettable increase in the resort to administrative prosecution — or the institution of a civil or criminal action — as a substitute for or supplement to appeal. Administrative Civil or Criminal Action against Judge.Page 35 of 328 resolutions and decisions. 350. However. not even by the Supreme Court. (Casco Phil. Paredes. Lopez Vito. branch or department of Government. C. Final and Executory Judgments of Lower Courts Not Reviewable Even by Supreme Court In respect of Courts below the Supreme Court. With rising frequency. . the ordinary remedies available under law to a party who is adversely affected by their decisions or orders are a motion for new trial (or reconsideration) under Rule 37. Proscribed by Law and Logic Now. (Citing Primicias vs. 120. mutatis mutandis. Comelec. may be had through the special civil action of certiorari or prohibition pursuant to Rule 65 of the Rules of Court. Macias vs. or with grave abuse of discretion. or without. criminal complaints are being filed with the Office of the Ombudsman or the public prosecutor's office. The concept of separation of powers presupposes mutual respect by and between the three departments of the government. 118. become inviolable. or a reluctance to exercise them. and justices of the Court of Appeals and even of the Supreme Court. or in anyway modified directly or indirectly. 78 Phil. The Court has consistently stressed that the "doctrine of separation of powers calls for the executive. much less by any other official. 1. such a resort to these remedies operates as a form of threat or intimidation to coerce judges into timorous surrender of their prerogatives. too. they. Chemical Co. Exceptionally. exhaustion of all recourse of appeal. Macapagal. 286-287). then. Whether intended or not. Mabanag vs. Not Substitute for Appeal. it should refrain from speculating as to alleged hidden forces at work that could have impelled either coordinate branch into acting the way it did. 3 SCRA 1). vs. Salas. by a higher court. 2. and must wait on the result thereof. Such actions are impermissible and cannot prosper. or with law or jurisprudence. within the power of public prosecutors. confer the prosecutor (or Ombudsman) with an incongruous function pertaining. and demonstrate that any contrary postulation can have only intolerable legal implications. civil or criminal prosecution for unjust judgment against the issuing judge would. and long-standing processes and procedures. a party may file an administrative or criminal complaint against the judge for rendition of an unjust judgment. is whether or not these complaints are proper. the Ombudsman or the Trial Court: a review of the decision or order of the respondent Judge or Justice to determine its correctness or erroneousness .Page 36 of 328 1. to review judgments or final orders or resolutions of the Courts of the land. a possibility here after more fully explored. Common Basis of Complaints Against Judges Many of these complaints set forth a common indictment: that the respondent Judges or Justices rendered manifestly unjust judgments or interlocutory orders — i. Allowing a party who feels aggrieved by a judicial order or decision not yet final and executory to mount an administrative. The power of review — by appeal or special civil action — is not only lodged exclusively in the Courts themselves but must be exercised in accordance with a well-defined and long established hierarchy. or are tainted by grave abuse of discretion — thereby causing injustice. If he does proceed despite that impediment. No other review is allowed. having opted for appeal. or both. Given the nature of the judicial function. Exclusivity of Specific Procedures for Correction of Judgments and Orders The question then. These principles were stressed in In Re: Wenceslao Laureta. or. may nonetheless simultaneously seek also such administrative or criminal remedies. judgments or orders which are allegedly not in accord with the evidence. whatever determination he makes could well set off a proliferation of administrative or criminal litigation. but to the courts: the determination of whether the questioned disposition is erroneous in its findings of fact or conclusions of law. not to him. . at a minimum and as an indispensable first step. Simple reflection will make this proposition amply clear.e. Resolution of complaints of this sort quite obviously entails a common requirement for the fiscal. It is not. as basic premise for a pronouncement of liability. and actionable and compensable injury to the complainants (invariably losing litigants). as already pointed out. directly or vicariously. or the Ombudsman or his deputies. the power vested by the Constitution in the Supreme Court and the lower courts established by law. otherwise litigation would be interminable. supra. and vexatiously repetitive.. whether or not in lieu of the prescribed recourses for appeal or review of judgments and orders of courts. the question submits to only one answer: the administrative or criminal remedies are neither alternative nor cumulative to judicial review where such review is available. Dissatisfied litigants and/or their counsels cannot without violating the separation of powers mandated by the Constitution relitigate in another forum the final judgment of this Court on legal issues submitted by them and their adversaries for final determination to and by the Supreme Court and which fall within the judicial power to determine and adjudicate exclusively vested by the Constitution in the Supreme Court and in such inferior courts as may be established by law. . "For it is a general principle of the highest importance to the proper administration of justice that a judicial officer in exercising the authority vested in him. S. shall be free to act upon his own convictions. and would destroy that independence without which no judiciary can be either respectable or useful. xxx xxx xxx To allow litigants to go beyond the Court's resolution and claim that the members acted "with deliberate bad faith" and rendered an "unjust resolution" in disregard or violation of the duty of their high office to act upon their own independent consideration and judgment of the matter at hand would be to destroy the authenticity.Page 37 of 328 Respondents should know that the provisions of Article 204 of the Revised Penal Code as to "rendering knowingly unjust judgment. To allow such collateral attack would destroy the separation of powers and undermine the role of the Supreme Court as the final arbiter of all justiciable disputes." (Bradley vs. it is not the prosecutor who would pass judgment on the "unjustness" of the decision rendered by him but the proper appellate court with jurisdiction to review the same. and subordinate the judiciary to the executive. Respondents should likewise know that said penal article has no application to the members of a collegiate court such as this Court or its Divisions who reach their conclusions in consultation and accordingly render their collective judgment after due deliberation. without apprehension of personal consequences to himself. Liability to answer to everyone who might feel himself aggrieved by the action of the judge would be inconsistent with the possession of this freedom. integrity and conclusiveness of such collegiate acts and resolutions and to disregard utterly the presumption of regular performance of official duty. either the Court of Appeals and/or the Supreme Court." refer to an individual judge who does so "in any case submitted to him for decision" and even then. xxx xxx xxx To subject to the threat and ordeal of investigation and prosecution. 80 U. more so a member of the Supreme Court for official acts done by him in good faith and in the regular exercise of official duty and judicial functions is to subvert and undermine that very independence of the judiciary. consequently. that a charge of violation of the Anti-Graft and Corrupt Practices Act on the ground that such a collective decision is "unjust" cannot prosper. 335). Fisher. a judge. It also follows. a judgment is rendered by a municipal trial court. but by necessary implication that the decisions or orders of the Regional Trial Court Judge. no other entity or official of the Government. i. The prosecution of the municipal trial court judge who rendered the original decision (for knowingly rendering a manifestly unjust judgment) would appear to be out of the question. under Fixed Rules to Declare Judgments or Orders Erroneous or Unjust To belabor the obvious. or other wrongdoing. and lead to absurd consequences. the latter's judgment is appealed to and in due course affirmed by the Court of Appeals. and finally. Such judgments. as well as the Justices of the Court of Appeals and the Supreme Court who affirmed the original judgment were also all wrong and unjust — most certainly an act of supreme arrogance and very evident supererogation. it is reviewed and affirmed by the proper Regional Trial Court. To repeat. the determination of whether or not a judgement or order is unjust — or was (or was not) rendered within the scope of the issuing judge's authority. or are tainted by grave abuse of discretion — as distinguished from accusations of corruption. disagreeing with the verdict of all four (4) courts. Only Courts Authorized. not only that the judge's decision was wrong and unjust. or immorality. not the prosecution or investigation service or any other branch. or that the judge had exceeded his jurisdiction and powers or maliciously delayed the disposition of a case — is an essentially judicial function. it would also result in a futile and circuitous exercise. Pursuing the proposition further. which. too. assuming that the public prosecutor or Ombudsman should nevertheless opt to undertake a review of the decision in question — despite its having been affirmed at all three (3) appellate levels — and thereafter. nor any functionary thereof. file an information in the Regional Trial Court against the Municipal Trial . Assume that a case goes through the whole gamut of review in the judicial hierarchy. otherwise appealable. consist simply of the accusation that the decisions or interlocutory orders are seriously wrong in their conclusions of fact or of law. which have become final and executory.. 3. are certainly not reviewable by any other body or authority. has competence to review a judicial order or decision — whether final and executory or not — and pronounce it erroneous so as to lay the basis for a criminal or administrative complaint for rendering an unjust judgment or order. Contrary Rule Results in Circuitousness and Leads to Absurd Consequences Pragmatic considerations also preclude prosecution for supposed rendition of unjust judgments or interlocutory orders of the type above described. as regards judgments. it would mean that the Office of the Ombudsman or of the public prosecutor would have to find. being no longer reviewable by higher tribunals. lodged by existing law and immemorial practice in a hierarchy of courts and ultimately in the highest court of the land.Page 38 of 328 This is true. That prerogative belongs to the courts alone.e. To allow institution of such proceedings would not only be legally improper. the appellate court's decision is brought up to and affirmed by the Supreme Court. 4. at the preliminary investigation. at bottom. on the part of the judge in rendering said judgement or order. Primordial Requisites for Administrative Criminal Prosecution This is not to say that it is not possible at all to prosecute judges for this impropriety. and there be also evidence of malice or bad faith. or against the Justices of the Court of Appeals or the Supreme Court who should affirm his conviction. the fate of such an indictment at the hands of the Sandiganbayan or the Regional Trial Court would be fairly predictable. Moreover. in his turn. What immediately comes to mind in this connection is a decision of acquittal or dismissal in a criminal action. ignorance or inexcusable negligence. Such a pronouncement may result from either (a) an action of certiorari or prohibition in a higher court impugning the validity of the. e. criminal or administrative proceeding that is availed of as the vehicle to prosecute the judge for supposedly rendering an unjust decision or order.. Even in this case. would necessarily be sustained. in such a scenario. the appeal before the Supreme Court or the Court of Appeals would have an inevitable result: given the antecedents. judgment. or with grave abuse of discretion. for knowingly rendering an unjust judgment. an administrative proceeding in the Supreme Court against the judge precisely for promulgating an unjust judgment or order. there has been a denial of due process to the prosecution. That final declaration is ordinarily contained in the judgment rendered in the appellate proceedings in which the decision of the trial court in the civil or criminal action in question is challenged.Page 39 of 328 Court Judge. however the circumstances of the case may be modified. but. or the Regional Trial Court Judge who should convict him of the offense. from filing a criminal action against the Sandiganbayan Justices. etc. through inexcusable ignorance or negligence. The situation is ridiculous. as to which — the same being unappealable — it would be unreasonable to deny the State or the victim of the crime (or even public-spirited citizens) the opportunity to put to the test of proof such charges as they might see fit to press that it was unjustly rendered. . with malice or by deliberate design. the indispensable requisites are that there be a final declaration by a competent court in some appropriate proceeding of the manifestly unjust character of the challenged judgment or order. the verdict of conviction would be set aside and the correctness of the judgment in question. taking account of all the foregoing considerations. and regardless of whether it is a civil. as having been rendered without or in excess of jurisdiction. already passed upon and finally resolved by the same appellate courts. Until and unless there is such a final.g. or (b) if this be not proper. Even if for some reason the Municipal Trial Court Judge is convicted by the Sandiganbayan or a Regional Trial Court. nothing would prevent the Municipal Trial Judge. the essential requisite is that there be an authoritative judicial pronouncement of the manifestly unjust character of the judgment or order in question. 5. of rendering an unjust judgment or interlocutory order. deliberate and malicious. E. They should not be subject to intimidation. which must be recognized independently of statute." no civil or criminal action against the judge concerned is legally possible or should be entertained. To hold otherwise would be nothing short of harassment and would make his position doubly unbearable. violates or in any manner impedes or impairs any of the enumerated rights and liberties of another person — which rights are the same as those guaranteed in the Bill of Rights (Article III of the Constitution). without pressure or influence from external forces or factors. to the extent that the offenses therein described have "unjust judgment or "unjust interlocutory order" for an essential element. the fear of civil. Afterword . 190. This Court has repeatedly and uniformly ruled that a judge may not be held administratively accountable for every erroneous order or decision he renders. criminal or administrative sanctions for acts they may do and dispositions they may make in the performance of their duties and functions. Hence it is sound rule. that judges are not generally liable for acts done within the scope of their jurisdiction and in good faith." Exception to this general rule is found in Article 32 of the Civil Code. such liability is not demandable from a judge unless his act or omission constitutes a violation of the Penal Code or other penal statute. But again. providing that any public officer or employee. D. justice of the peace or assessor shall be liable to a civil action for the recovery of damages by reason of any judicial action or judgment rendered by him in good faith. much less maintained. or incurred with evident bad faith. not inconsistent with any subsequent legislative issuance or court rule: "No judge. or any private individual." Based on Section 9. Act No.Page 40 of 328 authoritative judicial declaration that the decision or order in question is "unjust. it is only in these cases that administrative sanctions are called for as an imperative duty of the Supreme Court. However. unless there be a final judicial pronouncement of the unjust character of the decision or order in issue. Judges Must be Free from Influence or Pressure Judges must be free to judge. existing doctrine is that "judges of superior and general jurisdiction are not liable to respond in civil action for damages for what they may do in the exercise of their judicial functions when acting within their legal powers and jurisdiction. and within the limits of his legal powers and jurisdiction. — shall be liable to the latter for damages. for no one called upon to try the facts or interpret the law in the process of administering justice can be infallible in his judgment. The error must be gross or patent. As far as civil or criminal liability is concerned. who directly or indirectly obstructs. the doctrine is still good law. defeats. for want of an indispensable requisite. it need only be reiterated that prosecution of a judge for any of them is subject to the caveat already mentioned: that such prosecution cannot be initiated. and to the end that he may ponder his serious errors and grave misconduct and learn due respect for the Courts and their authority. Monzon. The imposition on the time of the courts and the unnecessary work occasioned by respondent's crass adventurism are self-evident and require no further elaboration. with ignorance of law. The Court accordingly serves notice to those with the same conceit or delusions that it will henceforth deal with them. with more promptitude. Conducto v. would somehow seep into his understanding and deter him from further forays along his misguided path. He is warned that a repetition of any of the offenses of which he is herein found guilty. as has repeatedly been declared. If the Court. respondent. born of affected bravado or sheer egocentrism. to the extent of even involving the legislative and executive departments.00). however. must come to an end. Unfortunately the Court's forbearance had no effect on him.Page 41 of 328 Considering the foregoing antecedents and long standing doctrines. 1998] JESUS S. between reasoned dissent and self-seeking pretense. 291 SCRA 619 (1998) [A. the Ombudsman included. or any similar or other offense against courts. will merit further and more serious sanctions. in their assaults against the Judiciary in pursuit of personal agendas. the continued leniency and tolerance extended to him were read as signs of weakness and impotence. CONDUCTO. he is hereby sentenced to serve a term of imprisonment of TEN (10) DAYS in the City Jail of Cebu City and to pay a fine of ONE THOUSAND PESOS (P1. complainant. Monzon of the Municipal Trial Court in Cities. complainant charged respondent Judge Iluminado C. good or bad. Borromeo is found and declared GUILTY of constructive contempt repeatedly committed over time. with a firm and even hand. 2. In a sworn letter-complaint dated 14 October 1996. MTJ-98-1147. Worse. WHEREFORE. JUDGE ILUMINADO C. with the attendant lectures on the error of his ways. it may well be asked why it took no less than sixteen (16) years and some fifty (50) grossly unfounded cases lodged by respondent Borromeo in the different rungs of the Judiciary before this Court decided to take the present administrative measure. San Pablo City. it was in the hope that the repeated rebuffs he suffered.000. decisively and fairly. Joaquin T. and it is time for the Court to now draw the line. in that he deliberately . MONZON. despite warnings and instructions given to him. judges or court employees.M. Instead. bore with him with Jobian patience. After all. respondent's irresponsible audacity appears to have influenced and emboldened others to just as flamboyantly embark on their own groundless and insulting proceedings against the courts. and resolutely impose such punitive sanctions as may be appropriate to maintain the integrity and independence of the judicial institutions of the country. the power of contempt is exercised on the preservative and not the vindictive principle. vs. But all things. July 2. 1993 of Director Montesa. the Deputy Ombudsman for Luzon transmitted the record of the case to the Office of the City Prosecutor of San Pablo City and instructed the latter to file the corresponding information against Maghirang with the proper court and to prosecute the case. which declared that the appointment issued by Maghirang to his sister-in-law violated paragraph (2). Deputy . dismissed on 30 September 1993 on the ground that Maghirang’s sister-in-law was appointed before the effectivity of the Local Government Code of 1991.Page 42 of 328 refused to suspend a barangay chairman who was charged before his court with the crime of unlawful appointment under Article 244 of the Revised Penal Code. to the position of barangay secretary on 17 May 1989 in violation of Section 394 of the Local Government Code. but ordered Maghirang to replace his sister-in-law as barangay secretary. The order of dismissal was submitted to the Office of the Deputy Ombudsman for Luzon. said respondent Maghirang appointed his sister-in-law. the presiding judge. On 30 August 1993. On 22 October 1993. the Local Government Code prior to the Local Government Code of 1991. In its Revised Resolution of 29 November 1993.00 bond for his provisional liberty. The information for violation of Article 244 of the Revised Penal Code was forthwith filed with the Municipal Trial Court in Cities in San Pablo City and docketed as Criminal Case No. which prohibits a punong barangay from appointing a relative within the fourth civil degree of consanguinity or affinity as barangay secretary. Mrs. Domingo. On 20 December 1993. s. 1993 from Director Jacob Montesa of the Department of Interior and Local Government. complainant moved that the Office of the Deputy Ombudsman for Luzon reconsider the order of 29 November 1993. 246. The factual antecedents recited in the letter-complaint are not controverted. The recommendation was duly approved by Manuel C. Graft Investigation Officer II of the Office of the Deputy Ombudsman for Luzon. Ombudsman for Luzon.P. Acting on the motion. in light of Opinion No. issued an order on 8 February 1994 granting the motion for reconsideration and recommending the filing of an information for unlawful appointment (Article 244 of the Revised Penal Code) against Maghirang. complainant obtained Opinion No. Blg. 246. complainant filed a complaint with the Sangguniang Panlungsod of San Pablo City against one Benjamin Maghirang. among other things. 26240. At the same time. Florian Maghirang. with a recommendation of a P200. for abuse of authority. the Office of the Deputy Ombudsman for Luzon dismissed the case. 337. Section 95 of B. In a 3rd indorsement dated 4 March 1994. serious irregularity and violation of law in that. the barangay chairman of Barangay III-E of San Pablo City. complainant filed a complaint for violation of Article 244 of the Revised Penal Code with the Office of the City Prosecutor against Maghirang. respondent herein. issued a warrant for the arrest of Maghirang. Francisco Samala. s. On 11 April 1994. however. which was. No. from exerting undue influence. during [Maghirang’s] terms (sic) of office from 1989 to 1994 and said accused was again re-elected as Barangay Chairman during the last Barangay Election of May 9. In his Order of 30 June 1995. 1992).. shall be suspended from office. respondent judge denied the motion for suspension on the ground that: [T]he alleged offense of UNLAWFUL APPOINTMENT under Article 244 of the Revised Penal Code was committed on May 17. 1971) and. hence. respondent denied the motion for reconsideration. L-34636. 13. Book II of the Revised Penal Code or for any offense involving fraud upon government or public funds or property whether as a single or as complex offense and in whatever stage of execution and mode of participation. on 4 May 1995. not criminal. is pending in Court. et al. 94115. 1989.R. . … said public official can be temporarily removed to prevent him from wielding undue influence which will definitely be a hindrance for justice to take its natural course. while the criminal case against him is pending. 1994. the City Prosecutor filed. liabilities. alleging that the court had confused removal as a penalty in administrative cases and the “temporary removal from office (or suspension) as a means of preventing the public official.A. Any incumbent public officer against whom any criminal prosecution under a valid information under this Act or under Title 7. which reads. G. incurred during previous terms. intimidate (sic) witnesses which may affect the outcome of the case. No. When the people have elected a man to office. an order of suspension from office relating to a given term may not be the basis of contempt with respect to ones (sic) assumption of the same office under a new term (Oliveros vs. No. No. Villaluz. et al. The prosecution moved for reconsideration of the order. the Court should never remove a public officer for acts done prior to his present term of office. and that they disregarded or forgave his fault or misconduct (sic). 26240.” Accordingly. G. Hechanova.Page 43 of 328 With prior leave from the Office of the Deputy Ombudsman for Luzon. In his order of 3 August 1995. as amended.R. May 17. 1965).. offenses committed during previous term is (sic) not a cause for removal (Lizarez vs. May 30. August 21. in part: SEC. in Criminal Case No. 3019. if he had been guilty if any. Santos. G. it must be assumed that they did this with knowledge of his life and character.” The prosecution then enumerated the cases decided by this Court reiterating the rule that what a re-election of a public official obliterates are only administrative.R. To do otherwise would deprieve (sic) the people of their right to elect their officer. L-22059. a motion for the suspension of accused Maghirang pursuant to Section 13 of R. thus: (Aguinaldo vs. “while a re-elected public official cannot be administratively punished by removing him from office for offenses committed during his previous term. the former is a penalty or sanction whereas the latter is a mere procedural remedy. In his comment dated 14 February 1997. et al. who was subsequently re-elected as Barangay Chairman again during the last Barangay Election of May 9. Reyes of the Regional Trial Court of San Pablo City. He thus prayed for dismissal of this case. L-22059. respondent voluntarily inhibited himself.” . It was held in the concluding paragraph of the decision by the Honorable Supreme Court in Lizares vs.. III-E.” citing authorities in support thereof. that “Since petitioner. 17 SCRA 58. filed in compliance with the resolution of this Court of 27 January 1997. et al. likewise. In his order of 21 September 1995. 1966. having been duly re-elected.” “otherwise. assuming that he has erred. Escoses per order of Executive Judge Bienvenido V. the determination whether the respondent validly acted in imposing upon him one month’s suspension for act [sic] done during his previous term as mayor is now merely of theoretical interest. Certainly. Hechanova. to hold a judge administratively accountable for every erroneous ruling or decision he renders.” He emphasized. It is opined by the Court that preventive suspension is applicable only if there is [sic] administrative case filed against a local official who is at the same time criminally charged in Court. complainant filed his sworn letter-complaint with the Office of the Court Administrator.. 1994. and that he issued the two challenged orders “only after due appreciation of prevailing jurisprudence on the matter. the records of the Court shows [sic] that there is no pending administrative case existing or filed against the accused. May 17. the error must be “so gross and patent as to produce an inference of ignorance or bad faith or that the judge knowingly rendered an unjust decision. At present. 26240.Page 44 of 328 There is no dispute that the suspension sought by the prosecution is premised upon the act charged allegedly committed during the accused [sic] previous term as Barangay Chairman of Brgy. Hechanova. On 15 October 1996. The instant case run [sic] parallel with the case of Lizares vs. is no longer amenable to administrative sanctions for any acts committed during his former tenure. would be nothing short of harassment and that would be intolerable. respondent asserted that he had been “continuously keeping abreast of legal and jurisprudential development [sic] in the law” since he passed the 1955 Bar Examinations. that the error had to be “so grave and on so fundamental a point as to warrant condemnation of the judge as patently ignorant or negligent. The case was assigned to Judge Adelardo S. had not the accused been re-elected the prosecution will not file the instant motion to suspend him as there is no legal basis or the issue has become academic. San Pablo City. wherein the Supreme Court subscribed to the rule denying the right to remove from office because of misconduct during a prior term. arguing that to warrant a finding of ignorance of law and abuse of authority.” Complainant then moved that respondent inhibit himself from Criminal Case No. and that complainant made inconsistent claims. or any offense involving fraud upon government or public funds or property is filed in court. is pending in court. by way of separate letters.Page 45 of 328 Respondent further alleged that he earned complainant’s ire after denying the latter’s Motion for the Suspension of Barangay Chairman Maghirang. informed the Court that they agreed to have this case decided on the basis of the pleadings already filed. Title 7 of the RPC. the parties. findings and conclusions: The claim of respondent Judge that a local official who is criminally charged can be preventively suspended only if there is an administrative case filed against him is without basis. he had maintained his integrity.” Finally. San Pablo City. shall be suspended from office. the OCA makes the following . with respondent explicitly specifying that only the complaint and the comment thereon be considered. Section 13 of RA 3019 (Anti-Graft and Corrupt Practices Act) states that: “Suspension and loss of benefits – Any incumbent public officer against whom any criminal prosecution under a valid information under this Act or under Title 7. after he denied the request. competence and dignity. respondent Judge avowed that he would not dare soil his judicial robe at this time. The court trying a case has neither discretion nor duty to determine whether preventive suspension is required to prevent the accused from using his office to intimidate witnesses or frustrate his prosecution or continue committing malfeasance in office. for he had only three (3) years and nine (9) months more before reaching the compulsory age of retirement of seventy (70). while in his letter of 4 September 1995 requesting respondent to inhibit from the case.” It is well settled that Section 13 of RA 3019 makes it mandatory for the Sandiganbayan (or the Court) to suspend any public officer against whom a valid information charging violation of this law. All that is required is for the court to make a finding that the accused stands charged under a valid information for any of the above-described crimes for the purpose of granting or denying the In support thereof. The Office of the Court Administrator (OCA) recommends that this Court hold respondent liable for ignorance of the law and that he be reprimanded with a warning that a repetition of the same or similar acts in the future shall be dealt with more severely. very incompetent and has no place in Court of Justice. concretely. complainant branded respondent as a “judge of poor caliber and understanding of the law. In compliance with the Court’s resolution of 9 March 1998. Book II. and that for the last 25 years as municipal judge in the seven (7) towns of Laguna and as presiding judge of the MTCC. Book II of the Revised Penal Code or for any offense involving fraud upon government or public funds or property whether as a simple or as a complex offense and in whatever stage of execution and mode of participation. complainant declared that he believed in respondent’s integrity. which was filed only after Maghirang was re-elected in 1994. while concededly. complainant is prohibited from filing a petition for certiorari. however. he failed and refused to do. to order the suspension of Maghirang for a maximum period of ninety (90) days. as this will put the accused in double jeopardy. 1994]. Chairman Maghirang. it will continue for ninety (90) days.Page 46 of 328 sought for suspension. The foregoing rule. punishable under Article 244. G. there was nothing shown however to indicate that he acted in bad faith or with malice. that ‘when the people have elected a man to office it must be assumed that they did this with knowledge of his life and character and that they disregarded or forgave his faults or misconduct if he had been guilty of any’ refers only to an action for removal from office and does not apply to a criminal case. Since a case for Unlawful Appointment is covered by Summary Procedure. In the case of Rodolfo E. incorporating in his appeal the grounds assailing the interlocutory orders.” (Underscoring ours) Clearly. 110503 [August 4. No. finds no application to criminal cases x x x” (Underscoring supplied) Likewise. All things considered. preventive suspension will last for less than ninety (90) days only if the case is decided within that period. it was mandatory on Judge Monzon’s part.” Barangay Chairman Benjamin Maghirang was charged with Unlawful Appointment. 235 SCRA 103). the Court held that “the rule is that a public official cannot be removed for administrative misconduct committed during a prior term since his re-election to office operates as a condonation of the officer’s previous misconduct committed during a prior term. even if the alleged unlawful appointment was committed during Maghirang’s first term as barangay chairman and the Motion for his suspension was only filed in 1995 during his second term. (Bolastig vs. considering the Motion filed.R. Therefore. G. Sanchez. to the extent of cutting off the right to remove him therefor. Luis Santos and Melvin Vargas. respondent Judge manifested his ignorance of the law in denying complainant’s Motion for Suspension of Brgy. 212 SCRA 768. Title 7. This. 18 December 1967. his re-election is not a bar to his suspension as the suspension sought for is in connection with a criminal case. In the same case. Aguinaldo vs. No. Neither can he file an appeal from the court’s adverse final judgment. it would . that “The ruling. 21 SCRA 1292. the Court held that “as applied to criminal prosecutions under RA 3019. otherwise. Book II of the Revised Penal Code. Judge Monzon’s contention denying complainant’s Motion for Suspension because “offenses committed during the previous term (is) not a cause for removal during the present term” is untenable. Be that as it may.R. Sandiganbayan. L-23220. Respondent’s denial of complainant’s Motion for Reconsideration left the complainant with no other judicial remedy. it was specifically declared in the case of Ingco vs. therefore. mandamus or prohibition involving an interlocutory order issued by the court. Hon. as follows: There is a whale of a difference between the two cases. respondent. does not include reelection to office as one of them. liability incurred by him during his previous term of office. and which is sought to be restrained. 199 SCRA 48. dishonesty or corruption.” The findings and conclusions of the Office of the Court Administrator are in order. at least insofar as a public officer is concerned. and is injurious not only to a person or group of persons but to the State as a whole.“when the people have elected a man to his office it must be assumed that they did this with knowledge of his life and character and that they disregarded or forgave his faults or misconduct if he had been guilty of any” -. that -. But. ruled: “In the absence of fraud. under the Constitution. in view of the fact that despite his claim that he has been “continuously keeping abreast of legal and jurisprudential development [sic] in law” ever since he passed the Bar Examinations in 1995. The basis of the investigation which has been commenced here. this Court did not yield to petitioner’s insistence that he was benefited by the ruling in Pascual v. wittingly or otherwise.e.Page 47 of 328 also do well to note that good faith and lack of malicious intent cannot completely free respondent from liability. Provincial Board of Nueva Ecija that a public officer should never be removed for acts done prior to his present term of office. is a criminal accusation the . i. A judge owes it to the public and the administration of justice to know the law he is supposed to apply to a given controversy. but not the criminal. it is only the President who may grant the pardon of a criminal offense. This must be the reason why Article 89 of the Revised Penal Code. the penalty recommended. because a crime is a public wrong more atrocious in character than mere misfeasance or malfeasance committed by a public officer in the discharge of his duties. it is highly imperative that they should be conversant with basic principles. This Court. thus: The ruling.refers only to an action for removal from office and does not apply to a criminal case.. failed to recall that as early as 18 December 1967 in Ingco v. this Court explicitly ruled that the re-election of a public official extinguishes only the administrative. which enumerates the grounds for extinction of criminal liability. Sanchez. yet. In Ingco. even though such acts may be erroneous. is too light. administration of justice only if there be a belief on the part of litigants that the occupants of the bench cannot justly be accused of a deficiency in their grasp of legal principles. He is called upon to exhibit more than a There will be faith in the cursory acquaintance with the statutes and procedural rules. the acts of a judge done in his judicial capacity are not subject to disciplinary action. However. while judges should not be disciplined for inefficiency on account merely of occasional mistakes or errors of judgment. in the case of Libarios and Dabalos. Also. reprimand. therefore. 1967 the Makati electorate reelected all of them. They ground their position on Pascual vs. Provincial Board of Nueva Ecija . Provincial Governor and Lizares v. and that Pascual v. The Provincial Governor. the Anti-Graft and Corrupt Practices Act (Republic Act 3019). While the criminal cases involves the character of the mayor as a private citizen and the People of the Philippines as a community is a party to the case. in Luciano v. Hechanova. Then again. 1967. an administrative case involves only his actuations as a public officer as [they] affect the populace of the municipality where he serves. Hechanova referred only to administrative liabilities committed during the previous term of an elective official. Here involved is a criminal prosecution under a special statute. The two cases relied upon have laid down the precept that a reelected public officer is no longer amenable to administrative sanctions for acts committed during his former tenure. in Oliveros v. We are not here confronted with administrative charges to which the two cited cases refer. . a councilor prior thereto. thus: 1. the subject of the investigation was an administrative charge against the officers therein involved and its object was merely to cause his suspension or removal from public office. this Court likewise categorically declared that criminal liabilities incurred by an elective public official during his previous term of office were not extinguished by his re-election. or prior to the 1967 elections. 106 Phil. this Court held: I The first question presented for determination is whether a criminal offense for violation of Republic Act 3019 committed by an elective officer during one term may be the basis of his suspension in a subsequent term in the event of his reelection to office. et al. Said respondents would want to impress upon us the fact that in the last These general elections of November 14. on 30 May 1974. 1967. Then on 20 June 1969. The first problem we are to grapple with is the legal effect of the reelection of respondent municipal officials. 17 SCRA 58. A circumspect view leaves us unconvinced of the soundness of respondents' position. except that Vice-Mayor Teotimo Gealogo. But the present case rests on an entirely different factual and legal setting.Page 48 of 328 object of which is to cause the indictment and punishment of petitioner-appellant as a private citizen. and Lizares vs. Villaluz. whereas in the cases cited.. was elevated to vice-mayor. 466. It is to be recalled that the acts averred in the criminal information in Criminal Case 18821 and for which they were convicted allegedly occurred on or about July 26. respondents contend that their reelection erected a bar to their removal from office for misconduct committed prior to November 14. . In Luciano vs. On the contrary. inter alia. that such condonation of an officer's fault or misconduct during a previous expired term by virtue of his reelection to office for a new term can be deemed to apply only to his administrative and not to his criminal guilt. The Court has in subsequent cases made it clear that the Pascual ruling (which dealt with administrative liability) applies exclusively to administrative and not to criminal liability and sanctions. Article 9 of the Anti-Graft Act imposes as one of the penalties in case of conviction perpetual disqualification from public office and Article 30 of the Revised Penal Code declares that such penalty of perpetual disqualification entails "the deprivation of the public offices and employments which the offender may have held. Reelection to public office is not provided for in Article 89 of the Revised Penal Code as a mode of extinguishing criminal liability incurred by a public officer prior to his reelection. Petitioner's reliance on the loose language used in Pascual vs. particularly. that an official may amass wealth thru graft and corrupt practices and thereafter use the same to purchase reelection and thereby launder his evil acts. as in the case at bar. the same are not barred by reelection of the public officer. even if conferred by popular election." but contends that "said respondent's power to preventively suspend petitioner under section 13 of Republic Act 3019 became inefficacious upon petitioner's reelection" arguing that the power of the courts cannot be placed over that of sovereign and supreme people who ordained his return to office. . Antonio's memorandum for the State. in Ingco vs. one of the penalties attached to the offense is perpetual disqualification from public office and it "is patently offensive to the objectives and the letter of the Anti-Graft and Corrupt Practice Act . for violations of the Anti-Graft and Corrupt Practices Act. Provincial Board of Nueva Ecija that "each term is separate from other terms and that the reelection to office operates as a condonation of the officer's previous misconduct to the extent of cutting off the right to remove him therefor" is misplaced." It is manifest then. Thus." Punishment for a crime is a vindication for an offense against the State and the body politic. As succinctly stated in then Solicitor General (now Associate Justice) Felix Q.Page 49 of 328 Petitioner concedes that "the power and authority of respondent judge to continue trying the criminal case against petitioner may not in any way be affected by the fact of petitioner's reelection. since. The small segment of the national electorate that constitutes the electorate of the municipality of Antipolo has no power to condone a crime against the public justice of the State and the entire body politic. "to hold that petitioner's . Provincial Governor the Court stressed that the cases of Pascual and Lizares are authority for the precept that "a reelected public officer is no longer amenable to administrative sanctions for acts committed during his former tenure" but that as to criminal prosecutions. Sanchez the Court ruled that the reelection of a public officer for a new term does not in any manner wipe out the criminal liability incurred by him in a previous term. for while his constituents may condone the misdeed of a corrupt official by returning him back to office. wanting in the desired level of mastery of a revered doctrine on a simple issue. on 21 August 1992. Thus far. Needless to state. a criminal action initiated against the latter can only be heard and tried by a court of justice. it has been said that a judge is called upon to exhibit more than just a cursory acquaintance with statutes and procedural rules. in this instance. or deliberate disregard of a long settled doctrine pronounced by this Court. which is one of laws and not of men. The foregoing rule. Villaluz and . his nefarious act having been committed against the very State whose laws he had sworn to faithfully obey and uphold. in Aguinaldo v. finds no application to criminal cases pending against petitioner for acts he may have committed during the failed coup. since his re-election to office operates as a condonation of the officer’s previous misconduct to the extent of cutting off the right to remove him therefor. if respondent judge deliberately disregarded the doctrine laid down in Ingco v. the rule is that a public official cannot be removed from administrative misconduct committed during a prior term. The latter. On the other hand. Oliveros v. Santos.and. Thus. Villaluz and Aguinaldo v. members of the Bar -. respondent was.” it was impossible for him to have missed or misread these cases. would only manifest either incompetence. exceeded only by his passion for truth. A contrary rule would erode the very system upon which our government is based. of course. since both cases were written in plain and simple language thereby foreclosing any possibility of misunderstanding or confusion. no ruling to the contrary has even rippled the doctrine enunciated in the above-mentioned cases.Page 50 of 328 reelection erased his criminal liability would in effect transfer the determination of the criminal culpability of an erring official from the court to which it was lodged by law into the changing and transient whim and caprice of the electorate." Finally. however. it is imperative that he be conversant with basic legal principles and aware of well-settled and authoritative doctrines.comprehending the decisions is a different matter. Santos in support of his 30 June 1995 order. If respondent has truly been “continuously keeping abreast of legal and jurisprudential development [sic] in the law. He should strive for excellence. of course. What is then evident is that respondent either did not thoroughly read these cases or that he simply miscomprehended them. Provincial Governor. While diligence in keeping up-to-date with the decisions of this Court is a commendable virtue of judges -. for it is in that area where one’s competence may then be put to the test and proven. this Court stated: Clearly then. What detracts from his claim of assiduity is the fact that he even cited the cases of Oliveros v. to the end that he be the personification of justice and the Rule of Law. Sanchez and reiterated in the succeeding cases of Luciano v. This cannot be so. but rather than disposing of the case in accordance with his personal views he must first think that it is his duty to apply the law as interpreted by the Highest Court of the Land. it is apropos to quote what this Court said sixty-one years ago in People v. that the application of a doctrine promulgated by this Superiority is against his way of reasoning. The grave abuse of discretion is thus manifest. and judicial chaos would result. still believes that he cannot follow Our rulings. in Luzon Stevedoring Corp. v. All other courts should then be guided by the decisions of this Court. as a sequel. he may state his opinion on the matter. To judges who find it difficult to do so. v. that tribunals in the lower rungs of the judiciary would at the very least. Our meaning was clear and unmistakable. . this Court has the last word on what the law is. 43 Phil. C. Vivo v. respondent Court is not excluded from such a category.” A becoming modesty of inferior courts demands conscious realization of the position that they occupy in the interrelation and operation of the integrated judicial system of the nation. Vera: As already observed by this Court in Shioji vs. and as a reminder to all judges. and that any deviation from the principle laid down by the latter would unavoidably cause. a Judge. and that its decisions applying or interpreting the Constitution and laws form part of this country’s legal system. We had spoken clearly and unequivocally. or against his conscience. 333. Contreras. unnecessary inconveniences. had indicated what the rule should be. Justice Laurel had indicated in terms too clear for misinterpretation what is expected of them.Page 51 of 328 Aguinaldo v. then he has no other alternative than to place himself in the position that he could properly avoid the duty of having to render judgment on the case concerned (Art. 337). this Court affirmed that by tradition and in our system of judicial administration. then.” In the constitutional sense. Cloribel warned: Now.. We were within our power in doing so. delays and expenses to the litigants. take notice and yield deference. It would not be too much to expect. On this point. not once but at least four times. Likewise.C. 9. We did take pains to explain why it must be thus. but certainly not when this Court. it may then be said that he simply wished to enjoy the privilege of overruling this Court’s doctrinal pronouncements. Thus: “A becoming modesty of inferior court[s] demands conscious realization of the position that they occupy in the interrelation and operation of the integrated judicial system of the nation. in the fulfillment of his mission of deciding cases. Santos. and reiterated in subsequent cases “if each and every Court of First Instance could enjoy the privilege of overruling decisions of the Supreme Court. There was no ambiguity in what we said. Harvey [1922]. In Caram Resources Corp. Court of Appeals: The spirit and initiative and independence on the part of men of the robe may at times be commendable.). if a Judge of a lower Court feels. there would be no end to litigation. And if despite of what is here said. and he has only one legal way to do that. complainant. vs. respondent. considering respondent is due for compulsory retirement on 29 November 2000 and that this is his first offense.Page 52 of 328 Finally. thus: "Civil Case No. Asuncion of the Court of First Instance of Leyte. with a warning that a commission of similar acts in the future shall be dealt with more severely is. Macariola. Mrs. the last sentence of Canon 18 of the Canons of Judicial Ethics directs a judge to administer his office with due regard to the integrity of the system of the law itself.00) and warned that the commission of similar acts in the future shall be dealt with more severely. 133-J. Anacorita Reyes." The factual setting of the case is stated in the report dated May 27. or deliberate disregard of such doctrine in violation of Canon 18 of the Canons of Judicial Ethics. respondent Judge Iluminado C. but a judge under the sanction of law. with "acts unbecoming a judge. Macariola charged respondent Judge Elias B. Monzon is hereby FINED in the amount of Five Thousand Pesos (P5. 1982. May 31. and the remaining plaintiffs who were the children of the deceased by his second marriage with Irene Ondes. 3010 of the Court of First Instance of Leyte was a complaint for partition filed by Sinforosa R. Macariola alleged among other things that: a) plaintiff Sinforosa R. "In her defenses to the complaint for partition. to whom this case was referred on October 28. plaintiffs. 1968 Bernardita R. c) the properties left by the deceased were all the conjugal properties of the . Case No.] BERNARDITA R. at the very least. That having been said. 1971 of then Associate Justice Cecilia Muñoz Palma of the Court of Appeals now retired Associate Justice of the Supreme Court. Luz R.000.000. ASUNCION. Judge of the Court of First Instance of Leyte. 114 SCRA 77 (1982) [Adm. WHEREFORE. concerning the properties left by the deceased Francisco Reyes. for incompetence as a result of ignorance of a settled doctrine interpreting a law. HONORABLE ELIAS B. remembering that he is not a depository of arbitrary power. 3.00. Asuncion. MACARIOLA. A fine of P5. b) the only legal heirs of the deceased were defendant Macariola. appropriate. Bales. and Priscilla Reyes. now Associate Justice of the Court of Appeals. Bakunawa. defendant. against Bernardita R. she being the only offspring of the first marriage of Francisco Reyes with Felisa Espiras. 1968 for investigation. Bales was not a daughter of the deceased Francisco Reyes. Macariola v. the common father of the plaintiff and defendant. we cannot but conclude that the recommended penalty of reprimand is not commensurate with the misdeed committed. Ruperto Reyes. In a verified complaint dated August 6. Adela Reyes. 996 in relation to Art. Macariola. Adela Reyes and Priscilla Reyes as the only children legitimated by the subsequent marriage of Francisco Reyes Diaz to Irene Ondez. 5265. (9) Directing the parties. and one part is to be adjudicated solely to defendant it being the share of the latter's deceased mother. for approval. 1184 as belonging exclusively to the deceased Francisco Reyes Diaz.G. Bakunawa. Bishop of Jaro. finds and so holds. upon a preponderance of evidence. 2304 and one-half (1/2) of one-fourth (1/4) of Lot No. 3416 as belonging to the spouses Francisco Reyes Diaz and Irene Ondez in common partnership. and no properties were acquired by the deceased during his second marriage. a decision was rendered by respondent Judge Asuncion in Civil Case 3010. 4474. 4506 and 1/4 of Lot 1145 as belonging to the conjugal partnership of the spouses Francisco Reyes Diaz and Felisa Espiras. 4803. (6) Declaring the defendant Bernardita R. Macariola. Bales to have been an illegitimate child of Francisco Reyes Diaz. and the other half which is the share of the deceased Francisco Reyes was to be divided equally among his children by his two marriages. 3416 as belonging to the estate of Francisco Reyes Diaz. "On June 8. Bales. Diancin vs. a project of partition of the hereditary estate in the proportion above indicated. 4475. 3416. Adela Reyes. and in such . 5265. 5265. 892.Page 53 of 328 latter and his first wife. and hereby renders judgment (1) Declaring the plaintiffs Luz R. 4892. (5) Declaring that 1/2 of Lot No. (8) Directing the division or partition of the estate of Francisco Reyes Diaz in such a manner as to give or grant to Irene Ondez. 4474. New Civil Code). (3) Declaring Lots Nos. 983. 14 Phil. par 2. 4892. (2) Declaring the plaintiff Sinforosa R. Anacorita Reyes. 528. 4581. and the remaining portion of the estate to be divided among the plaintiffs Sinforosa R. in such a way that the extent of the total share of plaintiff Sinforosa R. as the exclusive owner of one-half of each of Lots Nos. each of the latter to receive equal shares from the hereditary estate. [3rd Ed. Anacorita Reyes. 2304 and 1/4 of Lot No. Felisa Espiras. Bakunawa. Bautista. Priscilla Reyes and defendant Bernardita R. O. Luz R. 4474. being the only legal and forced heir of her mother Felisa Espiras.] p. 4803. as surviving widow of Francisco Reyes Diaz. and the remaining one-half (1/2) of each of said Lots Nos. Ruperto Reyes. (4) Declaring Lot No. 4581. 33). d) if there was any partition to be made. the Court. Ruperto Reyes. a hereditary share of one-twelfth (1/12) of the whole estate of Francisco Reyes Diaz (Art. New Civil Code). 4803. 4892. 4475. within thirty days after this judgment shall have become final to submit to this court. (Ramirez vs. 1154 as belonging to the estate of Francisco Reyes Diaz. the dispositive portion of which reads: "'IN VIEW OF THE FOREGOING CONSIDERATIONS. the remaining one-half (1/2) of Lot 2304 and the remaining one-half (1/2) of one fourth (1/4) of Lot No. Bales in the hereditary estate shall not exceed the equivalent of two-fifth (2/5) of the total share of any or each of the other plaintiffs and the defendant (Art. 4506 and one-half (1/2) of one-fourth (1/4) of Lot No. 1963. those conjugal properties should first be partitioned into two parts. 4506. 4581. 4475. (7) Declaring Irene Ondez to be the exclusive owner of one-half (1/2) of Lot No. Felisa Espiras. kind. '3. 1963. 1184 and the remaining portion of Lot No. however that the remaining portion of Lot No.834. which for convenience is quoted hereunder in full: 'The parties. 3416 consisting of 2. deemed convenient and equitable to them taking into consideration the location. 4803. quality. 3416 consisting of 1. a project of partition was submitted to Judge Asuncion which is marked Exh. Ruperto Reyes. nature and value of the properties involved. Bales and defendant Bernardita R.Page 54 of 328 manner as the parties may. C]. presented to this Court for approval the following project of partition: 'COMES NOW.55 square meters along the western part of the lot shall likewise be awarded to Sinforosa Reyes-Bales. '5. and (11) Dismissing all other claims of the parties [pp. (10) Directing the plaintiff Sinforosa R.373. by agreement. '6. 'WHEREFORE. 1154. 4892 and 5265 shall be awarded to Sinforosa Reyes Bales. 1963. and on October 16. (SGD) BONIFACIO RAMO Atty.49 square meters along the eastern part of the lot shall be awarded likewise to Bernardita R. A portion of Lot No. TOLETE . 4474 and 4475 shall be divided equally among Luz Reyes Bakunawa. '2. October 16. it is respectfully prayed that the Project of Partition indicated above which is made in accordance with the decision of the Honorable Court be approved. Adela Reyes and Priscilla Reyes in equal shares. Macariola to pay the costs of this suit. Ruperto Reyes. Lot No. Notwithstanding the fact that the project of partition was not signed by the parties themselves but only by the respective counsel of plaintiffs and defendant. Macariola. provided. 'Tacloban City. Judge Asuncion approved it in his Order dated October 23. for the Defendant Tacloban City '(SGD) ZOTICO A. to this Honorable Court respectfully submit the following Project of Partition: '1. in the proportion of one-third (1/3) by the first named and two-thirds (2/3) by the second named. '4. A. 27-29 of Exh. Anacorita Reyes. A portion of Lot No. 3416 after taking the portions awarded under item (2) and (4) above shall be awarded to Luz Reyes Bakunawa. Lots Nos. Anacorita Reyes. "The decision in civil case 3010 became final for lack of an appeal. 3416 shall belong exclusively to Priscilla Reyes. Lots Nos. The whole of Lots Nos. through their respective counsels. the plaintiffs and the defendant in the above-entitled case. 2304 and 4506 shall belong exclusively to Bernardita Reyes Macariola. 1963. Adela Reyes and Priscilla Reyes in equal shares. U). a stenographer in Judge Asuncion's court (Exhs.162. interests and participations which were adjudicated to the respective parties. meters.172. upon assurance of both counsels of the respective parties to this Court that the Project of Partition. 1963. and Priscilla all surnamed Reyes in equal shares. which according to the decision was the exclusive property of the deceased Francisco Reyes. The parties. finding the above-quoted project of Partition to be in accordance with law. this 23rd day of October. and that both lawyers had represented to the Court that they are given full authority to sign by themselves the Project of Partition. hereby approves the same. ASUNCION Judge' "EXH. F. Adela. "Lot 1184-D was conveyed to Enriqueta D.5556 sq. as outlined in the Project of Partition and the delivery of the respective properties adjudicated to each one in view of said Project of Partition. was adjudicated in said project of partition to the plaintiffs Luz. B. V). F-1 and V-1).Page 55 of 328 Atty. only for the purpose of giving authority to the Register of Deeds of the Province of Leyte to issue the corresponding transfer certificates of title to the respective adjudicatees in conformity with the project of partition (see Exh. 'SO ORDERED. for the Plaintiff Tacloban City 'While the Court thought it more desirable for all the parties to have signed this Project of Partition. therefore. documents or instrument sufficient in form and substance for the vesting of the rights. meters was sold on July 31. 1963. as above-quoted. Anota. "One of the properties mentioned in the project of partition was Lot 1184 or rather one-half thereof with an area of 15. This lot. 'Given in Tacloban City. nevertheless. Anacorita. Ruperto. are directed to execute such papers. was amended on November 11.5 sq. "The above Order of October 23. 1963. therefore. 1964 to Dr. while Lot 1184-E which had an area of 2. had been made after a conference and agreement of the plaintiffs and the defendant approving the above Project of Partition. '(SGD) ELIAS B. . and to perform such other acts as are legal and necessary to effectuate the said Project of Partition. the Court. and when the project of partition was approved by the trial court the adjudicatees caused Lot 1184 to be subdivided into five lots denominated as Lot 1184-A to 1184-E inclusive (Exh. of R. 12).' (Exh. [2] that he likewise violated Article 14. for investigation.Page 56 of 328 Arcadio Galapon (Exh. Asuncion (Exh. Humilia Jalandoni Tan. Asuncion as the secretary (Exhs. by associating himself with the Traders Manufacturing and Fishing Industries. spouses Asuncion and spouses Galapon conveyed their respective shares and interest in Lot 1184-E to 'The Traders Manufacturing and Fishing Industries Inc. 3019. with Judge Asuncion as the President and Mrs. F). 2338 of the Register of Deeds of the city of Tacloban (Exh. 1968 his answer to which a reply was filed on October 16. E-4 to E-7). 1968 by herein complainant. and for the second cause of action. Justice Palma recommended that respondent Judge be exonerated. 1965. At the time of said sale the stockholders of the corporation were Dominador Arigpa Tan. report and recommendation. Macariola filed on August 9. 1968 alleging four causes of action. After hearing. paragraphs 1 and 5 of the Code of Commerce. 378-385. 1971 recommending that respondent Judge should be reprimanded or warned in connection with the first cause of action alleged in the complaint. Inc. rec. 1968. 3010 decided by him. Respondent Judge Asuncion filed on September 24. the said Investigating Justice submitted her report dated May 27. In Our resolution of October 28. to wit: [1] that respondent Judge Asuncion violated Article 1491. Asuncion. E)" [pp. 1967 (Exh. rec. Section 12. [3] that respondent was guilty of coddling an impostor and acted in disregard of judicial decorum by closely fraternizing with a certain Dominador Arigpa Tan who openly and publicly advertised himself as a practising attorney when in truth and in fact his name does not appear in the Rolls of Attorneys and is not a member of the Philippine Bar.). and Canon 25 of the Canons of Judicial Ethics. 1-7. 11). Section 3. The Articles of Incorporation of 'The Traders Manufacturing and Fishing Industries. of the New Civil Code in acquiring by purchase a portion of Lot No.A. and the latter's wife. We referred this case to then Justice Cecilia Muñoz Palma of the Court of Appeals. Dr. otherwise known as the Anti-Graft and Corrupt Practices Act. Inc.. paragraph H. On the third and fourth causes of action. Complainant Bernardita R. meters to Judge Asuncion and his wife. . Rule XVIII of the Civil Service Rules. 1184-E which was one of those properties involved in Civil Case No. Arcadio Galapon and his wife sold a portion of Lot 1184-E with an area of around 1. Victoria S. Jaime Arigpa Tan. 2) who was issued transfer certificate of title No. 15 & 16).' which we shall henceforth refer to as 'TRADERS' were registered with the Securities and Exchange Commission only on January 9. which particular portion was declared by the latter for taxation purposes (Exh. 1968 the instant complaint dated August 6. "On March 6. Victoria S. 1966. "On August 31.306 sq. Judge Asuncion. as a stockholder and a ranking officer while he was a judge of the Court of First Instance of Leyte. paragraph 5. and [4] that there was a culpable defiance of the law and utter disregard for ethics by respondent Judge (pp.]. respondent should be warned in case of a finding that he is prohibited under the law to engage in business. "(a) the sum of FOUR HUNDRED THOUSAND PESOS [P400. It appears. the cases against defendants Serafin P. Tolete were dismissed with the conformity of complainant herein. entitled "Bernardita R. Mrs. Inc. 1968 (pp. complainant herein instituted an action before the Court of First Instance of Leyte. Arcadio Galapon was dismissed because he was no longer a real party in interest when Civil Case No. 477. who was directed and authorized on June 2. Ben Barraza Go. 1969 by the then Secretary (now Minister) of Justice and now Minister of National Defense Juan Ponce Enrile to hear and decide Civil Case No. Nepomuceno of the Court of First Instance of Leyte. Asuncion. et al.00] for nominal damages. 4234 was filed as the portion of Lot 1184 acquired by her and respondent Judge from Dr. 481. "(b) the sum of TWO HUNDRED THOUSAND PESOS [P200. Arcadio Galapon was already sold on August 31." which was docketed as Civil Case No.000. ASUNCION — "(1) declaring that only Branch IV of the Court of First Instance of Leyte has jurisdiction to take cognizance of the issue of the legality and validity of the Project of Partition [Exhibit "B"] and the two Orders [Exhibits 'C' and 'C-3'] approving the partition. 3010 and the two orders issued by respondent Judge approving the same. On November 2. rendered a decision. versus Sinforosa R. "(c) the sum of FIFTY THOUSAND PESOS [P50. 4235.. Salvador Anota and Enriqueta Anota and Atty. and "(d) the sum of TEN THOUSAND PESOS [P10. Celestial. 1966 to the Traders Manufacturing and Fishing Industries. Inc.00] for exemplary damages. 1965 a portion of lot 1184-E to respondent Judge and on August 31. rec.00] for Attorney's Fees. seeking the annulment of the project of partition made pursuant to the decision in Civil Case No. plaintiff.000. "(3) adjudging the plaintiff. Catalina Cabus. and her counsel. Judge Jose D.Page 57 of 328 The records also reveal that on or about November 9 or 11.. "(2) dismissing the complaint against Judge Elias B. that some defendants were dropped from the civil case.000. .). Bernardita R. IN THE CASE AGAINST JUDGE ELIAS B. as well as the partition of the estate and the subsequent conveyances with damages. the dispositive portion of which reads as follows: "A. Macariola. Alfredo R. For one. Jesus Perez. the case against Dr. however. Traders Manufacturing and Fishing Industries. having already conveyed on March 6. the case against defendant Victoria Asuncion was dismissed on the ground that she was no longer a real party in interest at the time the aforesaid Civil Case No. Ramento. Inc. 4234 was filed. plaintiff therein. Likewise. 4234. Leopoldo Petilla and Remedios Petilla. 1966 the remainder was sold to the Traders Manufacturing and Fishing Industries. Asuncion. defendants.00] for moral damages. Celestial and Pilar P. Bales. Zotico A. 1970. Similarly.000. Macariola to pay defendant Judge Elias B. Eng and Ruperto O. either in person or through the mediation of another: xxx xxx xxx "(5) Justices. paragraph 5. Bakunawa. Priscilla R. ET AL. BALES. "(2) Directing the plaintiff to pay the defendants Mariquita Villasin and the heirs of Gerardo Villasin the cost of the suit. prosecuting attorneys. 1184-E which was one of those properties involved in Civil Case No. Anacorita R. "SO ORDERED" [pp. even at a public or judicial action. Macariola. . the property and rights in litigation or levied upon an execution before the court within whose jurisdiction or territory they exercise their respective functions. of the New Civil Code in acquiring by purchase a portion of Lot No. Solis.Page 58 of 328 "B. WE have already ruled that ". 3010. 1971. Herrer. this prohibition includes the act of acquiring by assignment and shall apply to lawyers. under her first cause of action. IN THE CASE AGAINST THE DEFENDANT SINFOROSA R. for the .. Bales. judges. that respondent Judge Elias B. IN THE CASE AGAINST DEFENDANT BONIFACIO RAMO — "(1) Dismissing the complaint against Bonifacio Ramo. "D. It is further disclosed by the record that the aforesaid decision was elevated to the Court of Appeals upon perfection of the appeal on February 22. FOR HERSELF AND FOR THE HEIRS OF THE DECEASED GERARDO VILLASIN — "(1) Dismissing the complaint against the defendants Mariquita Villasin and the heirs of the deceased Gerardo Villasin. WHO WERE PLAINTIFFS IN CIVIL CASE NO. 3010 — "(1) Dismissing the complaint against defendants Sinforosa R. "C.]. 531-533. clerks of superior and inferior courts. with respect to the property and rights which may be the object of any litigation in which they may take part by virtue of their profession" [italics supplied]. and other officers and employees connected with the administration of justice. Luz R. "(2) Directing the plaintiff to pay the defendant Bonifacio Ramo the cost of the suit. rec. . I WE find that there is no merit in the contention of complainant Bernardita R. Asuncion violated Article 1491. Adela R. The prohibition in the aforesaid Article applies only to the sale or assignment of the property which is the subject of litigation to the persons disqualified therein. Reyes. IN THE CASE AGAINST THE DEFENDANT MARIQUITA VILLASIN. That Article provides: "Article 1491. The following persons cannot acquire by purchase. now Court of Appeals Justice. hence. after the finality of the decision which he rendered on June 8. Galapon for which he was issued TCT No. the sale or assignment of the property must take place during the pendency of the litigation involving the property" (The Director of Lands vs. and the same was subdivided into five lots denominated as Lot 1184-A to 1184-E. namely. 3010 and of the subsequent two aforesaid orders therein approving the project of partition. 3010 but from Dr. 2338 by the Register of Deeds of Tacloban City. Bakunawa after the finality of the decision in Civil Case No. While it appears that complainant herein filed on or about November 9 or 11. Priscilla Reyes. when the respondent Judge purchased on March 6. The subsequent filing on November 9. at the time of the sale on March 6. hence. Moreover. Lot 1184-E was sold on July 31.. 1963 project of partition made pursuant to the June 8. 1965 a portion of Lot 1184-E from Dr. Ababa. 646 [1978]). In the case at bar. Adela Reyes. is of no moment. 3010 and his two questioned orders dated October 23. 1963 decision. as well as the partition of the estate and the subsequent conveyances. 1963 approving the October 16. Adela Reyes. 3010 which he rendered on June 8. 1968 an action before the Court of First Instance of Leyte docketed as Civil Case No. respondent Judge did not buy the lot in question on March 6. took place long after the finality of the decision in Civil Case No. As aforestated. Inc. Luz Bakunawa. 1965 a portion of Lot 1184E. 1965 directly from the plaintiffs in Civil Case No. change or affect the aforesaid facts — that the questioned sale to respondent Judge. . 1968 of Civil Case No. The fact remains that respondent Judge purchased on March 6. Court of Appeals. 1963. 1963 and the amended order dated November 11. respondent's order dated October 23. in which respondent was the president and his wife was the secretary. Therefore. 1965. 1965 he sold a portion of said lot to respondent Judge and his wife who declared the same for taxation purposes only. the lot in question was no longer subject of the litigation. Ruperto Reyes and Anacorita Reyes in the project of partition. 4234. Rosario vda. the property was no longer subject of litigation. 86 SCRA 641. Arcadio Galapon who earlier purchased on July 31. 3010. The subsequent sale on August 31.Page 59 of 328 prohibition to operate. de Laig vs. et al. 1964 to Dr. Arcadio Galapon. 1963 and November 11. It may be recalled that Lot 1184 or more specifically onehalf thereof was adjudicated in equal shares to Priscilla Reyes. 88 SCRA 513. 1966 by spouses Asuncion and spouses Galapon of their respective shares and interest in said Lot 1184-E to the Traders Manufacturing and Fishing Industries. and on March 6.. the same. 4234 can no longer alter. and Luz R. had long become final for there was no appeal from said orders. 1964 Lot 1184-E from three of the plaintiffs. 1963 in Civil Case No. seeking to annul the project of partition and the two orders approving the same. however. 1963 was already final because none of the parties therein filed an appeal within the reglementary period. Furthermore. the decision in Civil Case No. or 11. 519 [1979]. was effected and consummated long after the finality of the aforesaid decision or orders. Adela Reyes and Luz R. (See Exh. p. We quote with approval the findings of the Investigating Justice. whatever error was committed by respondent in that respect was done in good faith as according to Judge Asuncion he was assured by Atty. Arcadio Galapon by Priscilla Reyes. nor did Atty. 1969). xxx xxx xxx "On this point. Article 1491 of the New Civil Code. 1964 of Lot 1184-E to Dr. or previous understanding with Judge Asuncion" (pp. (See p. Ramo appear to corroborate the statement of respondent. his affidavit being the only one that was presented as respondent's Exh. Galapon appeared to this investigator as a respectable citizen. there was no violation of paragraph 5. in the purchase of Lot 1184-E. We agree with the findings of the Investigating Justice thus: "And so we are now confronted with this all-important question whether or not the acquisition by respondent of a portion of Lot 1184-E and the subsequent transfer of the whole lot to 'TRADERS' of which respondent was the President and his wife the Secretary. 391-394. Arcadio Galapon acted as a mere 'dummy' of respondent in acquiring Lot 1184-E from the Reyeses. Bakunawa was only a mere scheme to conceal the illegal and unethical transfer of said lot to respondent Judge as a consideration for the approval of the project of partition. Galapon had acted. Exh. that he was authorized by his client to submit said project of partition. While it is true that such written authority if there was any. January 20. and not during the pendency of the litigation. 14 of Respondent's Memorandum). the sale of a portion of Lot 1184-E to respondent Judge having taken place over one year after the finality of the decision in Civil Case No. rec.Page 60 of 328 Consequently. Dr. It is also argued by complainant herein that the sale on July 31. as follows: "1. credible and sincere. and I believe him when he testified that he bought Lot 1184-E in good faith and for valuable consideration from the Reyeses without any intervention of. "Respondent vehemently denies any interest or participation in the transactions between the Reyeses and the Galapons concerning Lot 1184-E. B and tsn. I agree with respondent that there is no evidence in the record showing that Dr. the counsel of record of Mrs. In this connection.). A. Macariola. I agree with complainant that respondent should have required the signature of the parties more particularly that of Mrs. Macariola lead this investigator to . Bonifacio Ramo. in mediation for him and his wife. certain actuations of Mrs. On the contention of complainant herein that respondent Judge acted illegally in approving the project of partition although it was not signed by the parties. 10. Macariola on the project of partition submitted to him for approval. was not presented by respondent in evidence. was intimately related to the Order of respondent approving the project of partition. however. and he insists that there is no evidence whatsoever to show that Dr. 24. 3010 as well as the two orders approving the project of partition. however. 1968) from which we can deduce that she could not have been kept ignorant of the proceedings in civil case 3010 relative to the project of partition. 1963 (Exh. It is also significant at this point to state that Mrs. Decena (tsn. 9a). A. November 28. It is this 1/4 share in Lot 1154 which complainant sold to Dr. 1963. A. 7-A). On this certificate of title the Order dated November 11. several days after the preparation of the project of partition.Page 61 of 328 believe that she knew the contents of the project of partition. (Exh. which was approved by respondent on October 23. Exh. Macariola admitted during the cross-examination that she went to Tacloban City in connection with the sale of Lot 1154 to Dr. 1963. and that she gave her conformity thereto. the same having been adjudicated to her as her share in the estate of her father Francisco Reyes Diaz as per decision of the Court of First Instance of Leyte under case No. In this deed of sale the vendee stated that she was the absolute owner of said one-fourth share. 3010 (Exh. 1963. C-3 & C-4). it was for no other reason than that she was well aware of the distribution of the properties of her deceased father as per Exhs. Felisa Espiras. Exh. U) approving the project of partition was duly entered and registered on November 26. 9-e). Such contention is absurd because from the decision. A. if Mrs. 1963. C. p. 1963 (see Exh. followed by an amending Order on November 11. 9 — Certified true copy of OCT No. it is clear that one-half of one-fourth of Lot 1154 belonged to the estate of Francisco Reyes Diaz while the other half of said one-fourth was the share of complainant's mother. 1963. The deed of sale was duly registered and annotated at the back of OCT 19520 on December 3. in other words. A and B. 1963. Complainant. however. Complainant became the owner of the entire one fourth of Lot 1154 only by means of the project of partition. "2) Exh. "Counsel for complainant stresses the view. that the latter sold her one-fourth share in Lot 1154 by virtue of the decision in Civil Case 3010 and not because of the project of partition. did not present any direct and positive evidence to prove the alleged gross inequalities in the . Hector Decena the one-fourth share of the late Francisco Reyes-Diaz in Lot 1154. 1963. I refer to the following documents: "1) Exh. the decision did not adjudicate the whole of the onefourth of Lot 1154 to the herein complainant (see Exhs. Macariola. Exh. 7 — Certified copy of a deed of absolute sale executed by Bernardita Reyes Macariola on October 22. conveying to Dr. 19520 covering Lot 1154 of the Tacloban Cadastral Survey in which the deceased Francisco Reyes holds a '1/4 share' (Exh. Decena on October 22. "In connection with the abovementioned documents it is to be noted that in the project of partition dated October 16. 9-D). Therefore. Exh. 92. Macariola sold Lot 1154 on October 22. "Complainant also assails the project of partition because according to her the properties adjudicated to her were insignificant lots and the least valuable. Lot 1154 or rather 1/4 thereof was adjudicated to Mrs. Page 62 of 328 choice and distribution of the real properties when she could have easily done so by presenting evidence on the area. said corporation having been organized to engage in business. In this particular case of respondent. LexLib II With respect to the second cause of action. and his personal behavior. This provision shall not be applicable to mayors. the lawyers practising in his court. Finally. it was. improper for him to have acquired the same. Article 14 of the Code of Commerce when he associated himself with the Traders Manufacturing and Fishing Industries. nor can they hold any office or have any direct. so that not only must he be truly honest and just. Said Article provides that: "Article 14 — The following cannot engage in commerce. Even if respondent honestly believed that Lot 1184-E was no longer in litigation in his court and that he was purchasing it from a third person and not from the parties to the litigation. location. either in person or by proxy. rec. to avoid possible suspicion that his acquisition was related in one way or another to his official actuations in civil case 3010.). the complainant alleged that respondent Judge violated paragraphs 1 and 5. Without such evidence there is nothing in the record to show that there were inequalities in the distribution of the properties of complainant's father" (pp. . or financial intervention in commercial or industrial companies within the limits of the districts. One who occupies an exalted position in the judiciary has the duty and responsibility of maintaining the faith and trust of the citizenry in the courts of justice. rec. . he should nonetheless have refrained from buying it for himself and transferring it to a corporation in which he and his wife were financially involved. as a stockholder and a ranking officer. Article 1491 of the New Civil Code in acquiring by purchase a portion of Lot 1184-E which was in litigation in his court. or towns in which they discharge their duties: "1. provinces. 395-396. kind. it was unwise and indiscreet on the part of respondent to have purchased or acquired a portion of a piece of property that was or had been in litigation in his court and caused it to be transferred to a corporation of which he and his wife were ranking officers at the time of such transfer." And as aptly observed by the Investigating Justice: ". Justices of the Supreme Court. but his actuations must be such as not give cause for doubt and mistrust in the uprightness of his administration of justice. the assessed and market value of said properties. administrative. He should be reminded of Canon 3 of the Canons of Judicial Ethics which requires that: "A judge's official conduct should be free from the appearance of impropriety. not only upon the bench and in the performance of judicial duties. Inc. but also in his everyday life.). should be beyond reproach. judges and officials of the department of public prosecution in active service. The conduct of respondent gave cause for the litigants in civil case 3010. . while it is true that respondent Judge did not violate paragraph 5. however. he cannot deny that the transactions over Lot 1184-E are damaging and render his actuations open to suspicion and distrust. and the public in general to doubt the honesty and fairness of his actuations and the integrity of our courts of justice" (pp. 386-389. such political laws of the prior sovereignty as are not in conflict with the constitution or institutions of the new . . Law. (Halleck's Int. 1888. 887. par. either following a conquest or otherwise. It may be recalled that political law embraces constitutional law. It is significant to note that the present Code of Commerce is the Spanish Code of Commerce of 1885. however. xxx xxx xxx "5. . Article 14 of the Code of Commerce partakes more of the nature of an administrative law because it regulates the conduct of certain public officers and employees with respect to engaging in business. 34. Those who by virtue of laws or special provisions may not engage in commerce in a determinate territory.' (Opinion. the political laws do not. political in essence. July 10. 43 Phil. chap. it. 330. those laws which are political in their nature and pertain to the prerogatives of the former government immediately cease upon the transfer of sovereignty.. Perfecto." It is Our considered view that although the aforestated provision is incorporated in the Code of Commerce which is part of the commercial laws of the Philippines. upon the cession of territory by one nation to another. "While municipal laws of the newly acquired territory not in conflict with the laws of the new sovereign continue in force without the express assent or affirmative act of the conqueror. 897 [1922]). like justices and judges. Atty. and took effect as law in this jurisdiction on December 1. Gen. 14). Specifically. Political Law has been defined as that branch of public law which deals with the organization and operation of the governmental organs of the State and define the relations of the state with the inhabitants of its territory (People vs. with some modifications made by the "Comision de Codificacion de las Provincias de Ultramar. law of public corporations. Collector of Customs (23 Phil. hence. 311 [1912]) that: "'By well-settled public law. are automatically abrogated. Thus. Upon the transfer of sovereignty from Spain to the United States and later on from the United States to the Republic of the Philippines." which was extended to the Philippines by the Royal Decree of August 6. 1888. unless they are expressly re-enacted by affirmative act of the new sovereign. the political laws of the former sovereign. administrative law including the law on public officers and elections. However. partakes of the nature of a political law as it regulates the relationship between the government and certain public officers and employees. and municipal prosecuting attorneys nor to those who by chance are temporarily discharging the functions of judge or prosecuting attorney. 1899). Article 14 of this Code of Commerce must be deemed to have been abrogated because where there is change of sovereignty. . whether compatible or not with those of the new sovereign. We held in Roa vs. 315.Page 63 of 328 municipal judges. the business of the corporation in which respondent participated has obviously no relation or connection with his judicial . Corrupt practices of public officers." There appears no enabling or affirmative act that continued the effectivity of the aforestated provision of the Code of Commerce after the change of sovereignty from Spain to the United States and then to the Republic of the Philippines. 3. Ed. 897 [1922]). Consequently. otherwise known as the Anti-Graft and Corrupt Practices Act. now Associate Justice of the Court of Appeals. 242). The same act which transfers their country. 3019. although that which regulates the intercourse and general conduct of individuals." Respondent Judge cannot be held liable under the aforestated paragraph because there is no showing that respondent participated or intervened in his official capacity in the business or transactions of the Traders Manufacturing and Fishing Industries. until altered by the newly-created power of the State. or in which he is prohibited by the Constitution or by any law from having any interest. [26 U. in People vs. Section 3 of Republic Act No. 142).'" Likewise. 171 U. contract or transaction in connection with which he intervenes or takes part in his official capacity. vs. is necessarily changed. which provides that: "Sec. the following shall constitute corrupt practices of any public officer and are hereby declared to be unlawful: xxx xxx xxx "(h) Directly or indirectly having financial or pecuniary interest in any business.] 511. (Ely's Administrator vs.Page 64 of 328 sovereign. 542. Their relations with their former sovereign are dissolved. 7 L. Cos. In the case at bar. Ed. and new relations are created between them and the government which has acquired their territory. 887. It is also argued by complainant herein that respondent Judge violated paragraph H. it has never been held that the relations of the inhabitants with each other undergo any change. Inc. — In addition to acts or omissions of public officers already penalized by existing law. Article 14 of the Code of Commerce has no legal and binding effect and cannot apply to the respondent. transfers the allegiance of those who remain in it. or by Congress in time of peace.S. Perfecto (43 Phil.S. 356 Bales of Cotton (1 Pet. may be continued in force if the conqueror shall so declare by affirmative act of the commander-in-chief during the war. this Court stated that: "It is a general principle of the public law that on acquisition of territory the previous political relations of the ceded region are totally abrogated. United States. and the law which may be denominated political. 43 L. Chief Justice Marshall said: 'On such transfer (by cession) of territory. In the case of American and Ocean Ins. remains in force. 220. then Judge of the Court of First Instance. As a matter of fact. . that Civil Case No. The business of said corporation is not that kind where respondent intervenes or takes part in his capacity as Judge of the Court of First Instance.. 4234 was filed only on November 9 or 11. he has to intervene in said contracts or transactions. because it is political in nature. hence. Nepomuceno when respondent Judge was no longer connected with the corporation. 4234 entitled "Bernardita R. the official who intervenes in contracts or transactions which have no relation to his office cannot commit this crime" (People vs. It may be pointed out that Republic Act No. municipal judges may engage in teaching or other vocation not involving the practice of law after office hours but with the permission of the district judge concerned. Macariola. plaintiff. however. having disposed of his interest therein on January 31. as amended. As was held in one case involving the application of Article 216 of the Revised Penal Code which has a similar prohibition on public officers against directly or indirectly becoming interested in any contract or business in which it is his official duty to intervene. under Section 77 of said law. It does not appear also from the records that the aforesaid corporation gained any undue advantage in its business operations by reason of respondent's financial involvement in it. respondent is not liable under the same paragraph because there is no provision in both the 1935 and 1973 Constitutions of the Philippines. Article 14 of the Code of Commerce which prohibits judges from engaging in commerce is.G. Article 1491 of the New Civil Code against the purchase by judges of a property in litigation before the court within whose jurisdiction they perform their duties. nor is there an existing law expressly prohibiting members of the Judiciary from engaging or having interest in any lawful business. 40 O. II [1976]). Aquino. 1174. 134. 1968 and decided on November 2. the property was no longer subject of litigation. as heretofore stated. Likewise. C. It must be noted." wherein the complainant herein sought to recover Lot 1184-E from the aforesaid corporation. Bales. 296. Vol.Page 65 of 328 office. Moreover. 3010 as well as his two orders approving the project of partition. 11th Supp. 1970 by CFI Judge Jose D. the prohibition in paragraph 5. cited by Justice Ramon C. It is undisputed that there was no case filed in the different branches of the Court of First Instance of Leyte in which the corporation was either party plaintiff or defendant except Civil Case No. "(I)t is not enough to be a public official to be subject to this crime: it is necessary that by reason of his office.A. does not contain any prohibition to that effect. et al. hence. Revised Penal Code. or that the corporation benefited in one way or another in any case filed by or against it in court. also known as the Judiciary Act of 1948. p. cannot apply to respondent Judge because the sale of the lot in question to him took place after the finality of his decision in Civil Case No. deemed abrogated automatically upon the transfer of sovereignty from Spain to America. Furthermore. 1967. Meneses. and. versus Sinforosa O. or profession or be connected with any commercial. and only on two grounds. do not apply to the members of the Judiciary. as amended. and upon the recommendation of the Supreme Court. Under Section 67 of said law. . On the contention of complainant that respondent Judge violated Section 12. credit. for . 2260) and the Civil Service Rules promulgated thereunder. or upon information of the Secretary (now Minister) of Justice to conduct the corresponding investigation. agricultural or industrial undertaking without a written permission from the head of department. Thus. that is. although Section 12. particularly Section 12 of Rule XVIII. 6 and 7. demote him in rank. Under said Section 12: "No officer or employee shall engage directly in any private business. 1973 Constitution. Article X." Thus. the same. suspend him for not more than one year without pay or fine him in an amount not exceeding six months' salary. Rule XVIII of the Civil Service Rules made pursuant to the Civil Service Act of 1959 prohibits an officer or employee in the civil service from engaging in any private business. violation of the existing Civil Service Law and rules or of reasonable office regulations. otherwise known as the Judiciary Act of 1948 and by Section 7." It must be emphasized at the outset that respondent. a violation of Section 12 of Rule XVIII is a ground for disciplinary action against civil service officers and employees. or in the interest of the service. may not fall within the purview of paragraph h. serious misconduct and inefficiency.A. . upon its own motion. We hold that the Civil Service Act of 1959 (R. agricultural or industrial undertaking without a written permission from the Head of Department . or profession or be connected with any commercial. . is covered by Republic Act No. the aforesaid section defines the grounds and prescribes the special procedure for the discipline of judges. Section 3 of the Anti-Graft and Corrupt Practices Act because the last portion of said paragraph speaks of a prohibition by the Constitution or law on any public officer from having any interest in any business and not by a mere administrative rule or regulation. vocation. a violation of the aforesaid rule by any officer or employee in the civil service. credit. remove any subordinate officer or employee from the service. No. Rule XVIII of the Civil Service Rules. only the Supreme Court can discipline judges of inferior courts as well as other personnel of the Judiciary. . which alone is authorized.Page 66 of 328 In addition. vocation. Clearly. the power to remove or dismiss judges was then vested in the President of the Philippines. being a member of the Judiciary. not in the Commissioner of Civil Service. engaging in private business without a written permission from the Department Head may not constitute graft and corrupt practice as defined by law. namely. however. And under Sections 5. 296. . It is true that under Section 33 of the Civil Service Act of 1959: "The Commissioner may. Article X of the 1973 Constitution. guidelines and regulations governing the administration of discipline" (emphasis supplied). Moreover." WE are not. Ang-Angco vs. certainly. 2260) [1959]). except as provided by law. and suspension and upon all matters relating to the conduct.A. Art. No. 1. all administrative cases against permanent officers and employees in the competitive service. Although the actuation of respondent Judge in engaging in private business by joining the Traders Manufacturing and Fishing Industries. X. R. a violation of Section 12. is not violative of the provisions of Article 14 of the Code of Commerce and Section 3(h) of the Anti-Graft and Corrupt Practices Act as well as Section 12. we emphasized that only permanent officers and employees who belong to the classified service come under the exclusive jurisdiction of the Commissioner of Civil Service" (Villaluz vs. he should not retain such investments previously made. separation. for. . it is the Commissioner of Civil Service who has original and exclusive jurisdiction "(T)o decide. the Judiciary is the only other or second branch of the government (Sec. Besides. refrain from all relations which would normally tend to arouse the suspicion that such relations warp or bias his judgment. Rule XVIII cannot be considered as a ground for disciplinary action against judges because to recognize the same as applicable to them. Inc. and. The Revised Administrative Code (Section 89) and the Civil Service Law itself state that the Chief Justice is the department head of the Supreme Court (Sec. within one hundred twenty days. . namely. There is no question that a judge belong to the non-competitive or unclassified service of the government as a Presidential appointee and is therefore not covered by the aforesaid provision. WE have already ruled that ". discipline. 9 SCRA 619 [1963]). 2260. unmindful of the fact that respondent Judge and his wife had withdrawn on January 31. longer than a period sufficient to enable him to dispose of them without serious loss. the impropriety of the same is clearly unquestionable because Canon 25 of the Canons of Judicial Ethics expressly declares that: "A judge should abstain from making personal investments in enterprises which are apt to be involved in litigation in his court. after submission to it. . Rule XVIII of the Civil Service Rules promulgated pursuant to the Civil Service Act of 1959. judges cannot be considered as subordinate civil service officers or employees subject to the disciplinary authority of the Commissioner of Civil Service. so far as reasonably possible. or prevent his impartial attitude of mind in the administration of his judicial duties. as a stockholder and a ranking officer. and efficiency of such officers and employees. under Section 16(i) of the Civil Service Act of 1959. 713 [1965l. and prescribe standards. 15 SCRA 710. would be adding another ground for the discipline of judges and. It is desirable that he should. to have final authority to pass upon their removal. 1967 from the aforesaid corporation and sold their respective shares to third parties. and under the 1973 Constitution. Castillo. . Zaldivar. however.Page 67 of 328 However. . the Commissioner is not the head of the Judicial Department to which they belong. 20. and it . after his accession to the bench. and. in interpreting Section 16(i) of Republic Act No. 1973 Constitution). Section 67 of the Judiciary Act recognizes only two grounds for their removal. as aforestated. serious misconduct and inefficiency. The "respondent denies knowing that Dominador Arigpa Tan was an 'impostor' and claims that all the time he believed that the latter was a bona fide member of the bar. complainant alleged that respondent was guilty of coddling an impostor and acted in disregard of judicial decorum. Respondent Judge and his wife therefore deserve the commendation for their immediate withdrawal from the firm after its incorporation and before it became involved in any court litigation. Tan and family did not influence his official actuations as a judge where said persons were concerned. Tan's child at baptism (Exh. 1967. WE agree. . I and I-1) to indicate his office. that fact even if true did not render respondent guilty of violating any canon of judicial ethics as long as his friendly relations with Dominador A. It has been shown by complainant that Dominador Arigpa Tan represented himself publicly as an attorney-at-law to the extent of putting up a signboard with his name and the words 'Attorney-at-Law' (Exh. I-1 and J) when in truth and in fact said Dominador Arigpa Tan does not appear in the Roll of Attorneys and is not a member of the Philippine Bar as certified to in Exh. if he had any. up to its incorporation on January 9. and the eventual withdrawal of respondent on January 31. M & M-1). with the recommendation of the Investigating Justice that respondent Judge be exonerated because the aforesaid causes of action are groundless. and that there was culpable defiance of the law and utter disregard for ethics. I.Page 68 of 328 appears also that the aforesaid corporation did not in anyway benefit in any case filed by or against it in court as there was no case filed in the different branches of the Court of First Instance of Leyte from the time of the drafting of the Articles of Incorporation of the corporation on March 12. and it was but natural for respondent and any person for that matter to have accepted that statement on its face value. or that he used his influence. indicates that respondent realized that early that their interest in the corporation contravenes the aforesaid Canon 25. and WE quote the pertinent portion of her report which reads as follows: "The basis for complainant's third cause of action is the claim that respondent associated and closely fraternized with Dominador Arigpa Tan who openly and publicly advertised himself as a practising attorney (see Exhs. I see no reason for disbelieving this assertion of respondent. Such disposal or sale by respondent and his wife of their shares in the corporation only 22 days after the in corporation of the corporation. III With respect to the third and fourth causes of action. on the Judges of the other branches of the Court to favor said Dominador Tan. 1966. however. "Now with respect to the allegation of complainant that respondent is guilty of fraternizing with Dominador Arigpa Tan to the extent of permitting his wife to be a godmother of Mr. 1967 from said corporation. There is no tangible convincing proof that herein respondent gave any undue privileges in his court to Dominador Arigpa Tan or that the latter benefitted in his practice of law from his personal relations with respondent. K. now Associate Justice of the Court of Appeals. FERDINAND E. al. FERDINAND R. AND IRENE MARCOS-ARANETA) AND IMELDA ROMUALDEZ MARCOS. filed a petition for forfeiture before the Sandiganbayan. MARCOS. and (2) reinstate its earlier decision dated September 19. 0141 entitled Republic of the Philippines vs. petitioner sought the declaration of the aggregate amount of US$356 million (now estimated to be more than US$658 million inclusive of interest) deposited in escrow in the PNB.373. Marcos. Marcos. Sandiganbayan. . petitioner. Canons of Judicial Ethics). as ill-gotten wealth. he should be reminded to be more discreet in his private and business activities. This is a petition for certiorari under Rule 65 of the Rules of Court seeking to (1) set aside the Resolution dated January 31. while respondent Judge Asuncion. 4. pursuant to RA 1379 in relation to Executive Order Nos. JR. et. HONORABLE SANDIGANBAYAN (SPECIAL FIRST DIVISION). 403-405. MARIA IMELDA [IMEE] MARCOS-MANOTOC. MARCOS. did not violate any law in acquiring by purchase a parcel of land which was in litigation in his court and in engaging in business by joining a private corporation during his incumbency as judge of the Court of First Instance of Leyte. THE RESPONDENT ASSOCIATE JUSTICE OF THE COURT OF APPEALS IS HEREBY REMINDED TO BE MORE DISCREET IN HIS PRIVATE AND BUSINESS ACTIVITIES.). 2000 which forfeited in favor of petitioner Republic of the Philippines (Republic) the amount held in escrow in the Philippine National Bank (PNB) in the aggregate amount of US$658. . Republic v. represented by the Office of the Solicitor General (OSG). Ferdinand E. rec. 2002 issued by the Special First Division of the Sandiganbayan in Civil Case No.175. 14 and 14-A. through the Presidential Commission on Good Government (PCGG). Ferdinand E. but if a Judge does have social relations. 2002. docketed as Civil Case No. 407 SCRA 10 (2003) REPUBLIC OF THE PHILIPPINES.60 as of January 31. 30. Marcos. WHEREFORE. 1. In said case. On December 17. respondents. petitioner Republic. MARCOS (REPRESENTED BY HIS ESTATE/HEIRS: IMELDA R. 0141 entitled Republic of the Philippines vs. 2. In conclusion. because his conduct as a member of the Judiciary must not only be characterized with propriety but must always be above suspicion. 1991. that in itself would not constitute a ground for disciplinary action unless it be clearly shown that his social relations beclouded his official actuations with bias and partiality in favor of his friends" (pp.Page 69 of 328 "Of course it is highly desirable for a member of the judiciary to refrain as much as possible from maintaining close friendly relations with practising attorneys and litigants in his court so as to avoid suspicion 'that his social or business relations or friendship constitute an element in determining his judicial course" (par. represented by his Estate/Heirs and Imelda R. vs. now Bangko Sentral ng Pilipinas. Respondent Ferdinand. by virtue of the freeze order issued by the PCGG.Page 70 of 328 The funds were previously held by the following five account groups. Consandey declared the various deposits in the name of the enumerated foundations to be of illegal provenance and ordered that they be frozen to await the final verdict in favor of the parties entitled to restitution. Marcos. Maria Imelda M. a General Agreement and the Supplemental Agreements dated December 28. the petition sought the forfeiture of US$25 million and US$5 million in treasury notes which exceeded the Marcos couple’s salaries. cause the inventory of and distribute all assets presumed to be owned by the Marcos family under the conditions contained therein. Subsequently. Before the case was set for pre-trial.” The said decision of the Swiss Federal Supreme Court affirmed the decision of Zurich District Attorney Peter Consandey. The aforementioned General Agreement specified in one of its premises or “whereas clauses” the fact that petitioner “obtained a judgment from the Swiss Federal Tribunal on December 21. that the Three Hundred Fifty-six Million U.Avertina Foundation accounts. Araneta and Ferdinand R. dollars (US$356 million) belongs in principle to the Republic of the Philippines provided certain conditionalities are met x x x. Irene M. filed their answer. 1993. 1995 for the approval of said agreements and for the enforcement thereof. using various foreign foundations in certain Swiss banks: (1) (2) (3) (4) (5) Azio-Verso-Vibur Foundation accounts. Jr. Hearings were conducted by the Sandiganbayan on the motion to approve the General/Supplemental Agreements. Marcos. In addition. was presented as witness for the purpose of establishing the partial implementation of said agreements. respondents Imelda R. granting petitioner’s request for legal assistance. Manotoc. Trinidad-Rayby-Palmy Foundation accounts. On October 18. collate.S. The General Agreement/Supplemental Agreements sought to identify. respondent Marcos children filed a motion dated December 7. 1993 were executed by the Marcos children and then PCGG Chairman Magtanggol Gunigundo for a global settlement of the assets of the Marcos family. Rosalys-Aguamina Foundation accounts and Maler Foundation accounts. 1990. The treasury notes are frozen at the Central Bank of the Philippines. other lawful income as well as income from legitimately acquired property. Xandy-Wintrop: Charis-Scolari-Valamo-Spinus. . Jr. petitioner filed a motion for summary judgment and/or judgment on the pleadings. the Sandiganbayan denied petitioner’s motion for summary judgment and/or judgment on the pleadings on the ground that the motion to approve the compromise agreement “(took) precedence over the motion for summary judgment. In its resolution dated November 20. The Sandiganbayan. Subsequently. petitioner. . the Swiss Federal Supreme Court. Marcos filed her opposition thereto which was later adopted by respondents Mrs. Manotoc.A. 1997. filed another motion for summary judgment pertaining to the forfeiture of the US$356 million. Mrs. 1998 claiming she was not a party to the motion for approval of the Compromise Agreement and that she owned 90% of the funds with the remaining 10% belonging to the Marcos estate. 1379 ARE ADMITTED BY RESPONDENTS IN THEIR PLEADINGS AND OTHER SUBMISSIONS MADE IN THE COURSE OF THE PROCEEDING. 1999 and January 21. After several resettings. respondent Marcos children moved that the funds be placed in custodia legis because the deposit in escrow in the PNB was allegedly in danger of dissipation by petitioner. respectively.” Respondent Mrs. 1998. On appeal by the Marcoses. the funds were remitted to the Philippines in escrow. the case was set for trial. 1997. petitioner filed with the District Attorney in Zurich. in a decision dated December 10. The request was granted. Petitioner contended that. Marcos filed a manifestation on May 26. Respondent Mrs. 1996. certain facts were established. NO. granted the motion. II RESPONDENTS’ ADMISSION MADE DURING THE PRE-TRIAL THAT THEY DO NOT HAVE ANY INTEREST OR OWNERSHIP OVER THE FUNDS SUBJECT OF THE ACTION FOR FORFEITURE TENDERS NO GENUINE ISSUE OR CONTROVERSY AS TO ANY MATERIAL FACT IN THE PRESENT ACTION. 2000. an additional request for the immediate transfer of the deposits to an escrow account in the PNB. based on the following grounds: I THE ESSENTIAL FACTS WHICH WARRANT THE FORFEITURE OF THE FUNDS SUBJECT OF THE PETITION UNDER R. Meanwhile. Araneta and Ferdinand. 1995. in its resolution dated September 8. Jr. In 1998.Page 71 of 328 On October 18. THUS WARRANTING THE RENDITION OF SUMMARY JUDGMENT. 2000. warranting a summary judgment on the funds sought to be forfeited. on August 10. on March 10. After the pre-trial and the issuance of the pre-trial order and supplemental pre-trial order dated October 28. after the pre-trial conference. Switzerland. upheld the ruling of the District Attorney of Zurich granting the request for the transfer of the funds. Marcos. Jr. In a decision dated September 19. the Sandiganbayan reversed its September 19. Manotoc and Ferdinand. 2000 adopting the motion for reconsideration of Mrs. perforce. Mrs. petitioner filed its opposition thereto. thus denying petitioner’s motion for summary judgment: CONCLUSION In sum. The basis for the forfeiture in favor of the government cannot be deemed to have been established and our judgment thereon. which opposition was later adopted by her co-respondents Mrs. the Sandiganbayan granted petitioner’s motion for summary judgment: CONCLUSION There is no issue of fact which calls for the presentation of evidence. Mrs.544. Manotoc. Araneta and Ferdinand. 2000.Page 72 of 328 Respondent Mrs. declaring the Swiss deposits which were transferred to and now deposited in escrow at the Philippine National Bank in the total aggregate value equivalent to US$627. Likewise. 2000. 2000 decision. 2000. a hearing on the motion for summary judgment was conducted.608. The Motion for Summary Judgment is hereby granted. In a resolution dated January 31. the evidence offered for summary judgment of the case did not prove that the money in the Swiss Banks belonged to the Marcos spouses because no legal proof exists in the record as to the ownership by the Marcoses of the funds in escrow from the Swiss Banks. DISPOSITION WHEREFORE. Subsequently. Araneta filed a manifestation dated October 4. 2000. 2000 together with the increments thereof forfeited in favor of the State. Manotoc and Ferdinand. must also have been without basis. Marcos filed her opposition to the petitioner’s motion for summary judgment. Respondent Mrs. Mrs. . Jr. The Swiss deposits which were transmitted to and now held in escrow at the PNB are deemed unlawfully acquired as ill-gotten wealth. judgment is hereby rendered in favor of the Republic of the Philippines and against the respondents. filed their own motion for reconsideration dated October 5. Mrs. Jr. On March 24. 2002.95 as of August 31. Marcos filed a motion for reconsideration dated September 26. WERE PROHIBITED FROM ENGAGING IN THE MANAGEMENT OF FOUNDATIONS. MARCOS AS PUBLIC OFFICIALS. B. 1379: A.Page 73 of 328 WHEREFORE. committed grave abuse of discretion amounting to lack or excess of jurisdiction considering that -I PETITIONER WAS ABLE TO PROVE ITS CASE IN ACCORDANCE WITH THE REQUISITES OF SECTIONS 2 AND 3 OF R. Hence. 2000 is reconsidered and set aside. the instant petition. PETITIONER HAS ESTABLISHED A PRIMA FACIE PRESUMPTION OF UNLAWFULLY ACQUIRED WEALTH. in reversing its September 19. and this case is now being set for further proceedings. II SUMMARY JUDGMENT IS PROPER SINCE PRIVATE RESPONDENTS HAVE NOT RAISED ANY GENUINE ISSUE OF FACT CONSIDERING THAT: . ADMISSIONS IN PRIVATE RESPONDENTS’ ANSWER. In filing the same. D. AND 4. PRIVATE RESPONDENTS ALSO ADMITTED THE EXISTENCE OF THE SWISS DEPOSITS AND THEIR OWNERSHIP THEREOF: 1. PRIVATE RESPONDENTS CATEGORICALLY ADMITTED NOT ONLY THE PERSONAL CIRCUMSTANCES OF FERDINAND E. ADMISSION IN THE GENERAL / SUPPLEMENTAL AGREEMENTS THEY SIGNED AND SOUGHT TO IMPLEMENT. NO. 2000 decision. MARCOS AND IMELDA R. MARCOS AND IMELDA R. MARCOS AND IN THE MOTION TO PLACE THE RES IN CUSTODIA LEGIS. the decision of this Court dated September 19. C. petitioner argues that the Sandiganbayan. MARCOS AS PUBLIC OFFICIALS BUT ALSO THE EXTENT OF THEIR SALARIES AS SUCH PUBLIC OFFICIALS. PETITIONER HAS PROVED THE EXTENT OF THE LEGITIMATE INCOME OF FERDINAND E. ADMISSION IN THE UNDERTAKING TO PAY THE HUMAN RIGHTS VICTIMS. 3. ADMISSION IN A MANIFESTATION OF PRIVATE RESPONDENT IMELDA R. 2.A. WHO UNDER THE CONSTITUTION. accuracy and admissibility of the Swiss decisions ever challenged. .000. it was incorrect for the Sandiganbayan to use the issue of lack of authenticated translations of the decisions of the Swiss Federal Supreme Court as the basis for reversing itself because respondents themselves never raised this issue in their motions for reconsideration and supplemental motion for reconsideration. Petitioner faults the Sandiganbayan for questioning the non-production of the authenticated translations of the Swiss Federal Supreme Court decisions as this was a marginal and technical matter that did not diminish by any measure the conclusiveness and strength of what had been proven and admitted before the Sandiganbayan. PRIVATE RESPONDENTS ABANDONED THEIR SHAM DEFENSE OF LEGITIMATE ACQUISITION. Petitioner. AND THIS FURTHER JUSTIFIED THE RENDITION OF A SUMMARY JUDGMENT. in the main. this particular issue relating to the translation of the Swiss court decisions could not be resurrected anymore because said decisions had been previously utilized by the Sandiganbayan itself in resolving a “decisive issue” before it. AND B. V PRIVATE RESPONDENTS ARE DEEMED TO HAVE WAIVED THEIR OBJECTION TO THE AUTHENTICITY OF THE SWISS FEDERAL SUPREME COURT DECISIONS. IN SUBSEQUENTLY DISCLAIMING OWNERSHIP OF THE SWISS DEPOSITS. III THE FOREIGN FOUNDATIONS NEED NOT BE IMPLEADED. asserts that nowhere in the respondents’ motions for reconsideration and supplemental motion for reconsideration were the authenticity. IV THE HONORABLE PRESIDING JUSTICE COMMITTED GRAVE ABUSE OF DISCRETION IN REVERSING HIMSELF ON THE GROUND THAT ORIGINAL COPIES OF THE AUTHENTICATED SWISS DECISIONS AND THEIR “AUTHENTICATED TRANSLATIONS” HAVE NOT BEEN SUBMITTED TO THE COURT.000.00) TO THE HUMAN RIGHTS VICTIMS. Furthermore. that is. 1999 WHEN IT DENIED THE MOTION TO RELEASE ONE HUNDRED FIFTY MILLION US DOLLARS ($150. that the funds deposited by the Marcoses constituted ill-gotten wealth and thus belonged to the Filipino people. Otherwise stated. PRIVATE RESPONDENTS’ DEFENSE THAT SWISS DEPOSITS WERE LAWFULLY ACQUIRED DOES NOT ONLY FAIL TO TENDER AN ISSUE BUT IS CLEARLY A SHAM.Page 74 of 328 A. WHEN EARLIER THE SANDIGANBAYAN HAS QUOTED EXTENSIVELY A PORTION OF THE TRANSLATION OF ONE OF THESE SWISS DECISIONS IN HIS “PONENCIA” DATED JULY 29. Araneta were filed on May 27. petitioner had legally bound itself to go to trial on the basis of existing issues. After several motions for extension which were all granted. Thus. is a penal statute. to proceed to trial and submit authenticated translations of the Swiss decisions. the comment of Mrs. prayed for the dismissal of the petition on the grounds that: (A) BY THE TIME PETITIONER FILED ITS MOTION FOR SUMMARY JUDGMENT ON 10 MARCH 2000.Page 75 of 328 In compliance with the order of this Court. Jr. As such. (2) By its positive acts and express admissions prior to filing the Motion for Summary Judgment on 10 March 1990. Jr. (1) Republic Act No. IT WAS ALREADY BARRED FROM DOING SO. particularly the essential elements stated in section 3 thereof. Marcos filed her comment to the petition on May 22. Marcos asserts that the petition should be denied on the following grounds: A. Manotoc and Ferdinand. petitioner now elevates the matter to this Court. in their comment. its provisions. B. Mrs. Mrs. Corollarily. estoppel by laches had already set in against petitioner. AND ADEQUATE REMEDY AT THE SANDIGANBAYAN. Marcos contends that petitioner has a plain. it clearly waived whatever right it had to move for summary judgment. the Sandiganbayan’s ruling to set the case for further proceedings cannot and should not be considered a capricious and whimsical exercise of judgment. Marcos. 2000 directing petitioner to submit the authenticated translations of the Swiss decisions. 2002. Likewise. Since petitioner has a plain. 1379. its petition before this Court must be dismissed. 2002. According to Mrs. PETITIONER HAS A PLAIN. the applicable law. Instead of availing of said remedy. Mrs. and the separate comment of Mrs. THE SANDIGANBAYAN DID NOT ABUSE ITS DISCRETION IN SETTING THE CASE FOR FURTHER PROCEEDINGS. Thus. (B) EVEN ASSUMING THAT PETITIONER WAS NOT LEGALLY BARRED FROM FILING THE MOTION FOR SUMMARY JUDGMENT. are mandatory in nature. SPEEDY. by the time the Motion was filed on 10 March 2000. speedy and adequate remedy. (1) The Motion for Summary Judgment was based on private respondents’ Answer and other documents that had long been in the records of the case.. Mrs. a petition for certiorari which does not comply with the requirements of the rules may be dismissed. THE SANDIGANBAYAN IS CORRECT IN RULING THAT PETITIONER HAS NOT YET ESTABLISHED A PRIMA FACIE CASE FOR THE FORFEITURE OF THE SWISS FUNDS. speedy and adequate remedy in the ordinary course of law in view of the resolution of the Sandiganbayan dated January 31. that is. . Manotoc and Ferdinand. as well as the other written and testimonial statements submitted in relation thereto. petitioner has failed to establish the other proper earnings and income from legitimately acquired property of the Marcos couple over and above their government salaries. (a) Petitioner has failed to prove that the Marcos couple “acquired” or own the Swiss funds. ownership.A.Page 76 of 328 These should be strictly construed against petitioner and liberally in favor of private respondents. therefore. and (e) of Section 3. Rule 130 of the Rules of Court. (2) Petitioner has failed to establish the third and fourth essential elements in Section 3 of R. AND PRIVATE RESPONDENTS HAVE NOT MADE ANY JUDICIAL ADMISSION THAT WOULD HAVE FREED IT FROM ITS BURDEN OF PROOF. R. 1379 with respect to the identification. 1379. (3) In contravention of the essential element stated in Section 3 (e) of R. for the sake of argument. the inescapable conclusion is that the prima facie presumption of unlawful acquisition of the Swiss funds has not yet attached.A. (d). and approximate amount of the property which the Marcos couple allegedly “acquired during their incumbency”. (b) Even assuming. petitioner has categorically admitted that it has no evidence showing how much of the Swiss funds was acquired “during the incumbency” of the Marcos couple from 31 December 1965 to 25 February 1986. (4) Since petitioner failed to prove the three essential elements provided in paragraphs (c). 1379. there would be a demonstrable showing that no such “judicial admissions” were made by private respondents. (D) SINCE PETITIONER HAS NOT (YET) PROVEN ALL THE ESSENTIAL ELEMENTS TO ESTABLISH A PRIMA FACIE CASE FOR FORFEITURE. that the fact of acquisition has been proven. (1) Under Section 27. (2) Had petitioner bothered to weigh the alleged admissions together with the other statements on record. are expressly barred from being admissible in evidence against private respondents. There can.A. be no premature forfeiture of the funds. THE SANDIGANBAYAN DID NOT COMMIT . (C) IT WAS ONLY BY ARBITRARILY ISOLATING AND THEN TAKING CERTAIN STATEMENTS MADE BY PRIVATE RESPONDENTS OUT OF CONTEXT THAT PETITIONER WAS ABLE TO TREAT THESE AS “JUDICIAL ADMISSIONS” SUFFICIENT TO ESTABLISH A PRIMA FACIE AND THEREAFTER A CONCLUSIVE CASE TO JUSTIFY THE FORFEITURE OF THE SWISS FUNDS. the General and Supplemental Agreements. " of their public office and/or using their powers. Araneta. public policy and deep historical repercussions. Mrs. THEREFORE. 1986. it was attended by . For her part.Page 77 of 328 GRAVE ABUSE OF DISCRETION IN DENYING THE MOTION FOR SUMMARY JUDGMENT. are irrelevant and impertinent as far as this Court is concerned. CERTIORARI. decisions of the Sandiganbayan are brought before this Court under Rule 45. DOES NOT LIE. his immediate family. all other matters. Lobregat: surely x x x an enterprise "of great pith and moment". including the takeover or sequestration of all business enterprises and entities owned or controlled by them during his administration. The instant petition is allegedly an attempt to elevate to this Court matters. One of the foremost concerns of the Aquino Government in February 1986 was the recovery of the unexplained or ill-gotten wealth reputedly amassed by former President and Mrs. issues and incidents which should be properly threshed out at the Sandiganbayan. claims that obviously petitioner is unable to comply with a very plain requirement of respondent Sandiganbayan. She says the authenticated official English version of the Swiss Court decisions should be presented. are impertinent and improper before this Court. Respondent Mrs. connections or relationship. At the outset. whether located in the Philippines or abroad. PROPRIETY OF PETITIONER’S ACTION FOR CERTIORARI But before this Court discusses the more relevant issues. Araneta. issued on February 28. by taking undue advantage influence. But where the case is undeniably ingrained with immense public interest. The urgency of this undertaking was tersely described by this Court in Republic vs. It created the Presidential Commission on Good Government (PCGG) and charged it with the task of assisting the President in the "recovery of all ill-gotten wealth accumulated by former President Ferdinand E. not Rule 65. Araneta prays that the petition be denied for lack of merit and for raising matters which. the very first Executive Order (EO) issued by then President Corazon Aquino upon her assumption to office after the ouster of the Marcoses was EO No. Thus. Marcos. ESPECIALLY AS THIS COURT IS NOT A TRIER OF FACTS. friends and business associates. 1. directly or through nominees. Araneta manifests that she is as eager as respondent Sandiganbayan or any interested person to have the Swiss Court decisions officially translated in our known language. This should stop all speculations on what indeed is contained therein. in her comment to the petition. Thus. subordinates and close associates. respondent Mrs. the question regarding the propriety of petitioner Republic's action for certiorari under Rule 65 of the 1997 Rules of Civil Procedure assailing the Sandiganbayan Resolution dated January 21. save that pertaining to the authentication of the translated Swiss Court decisions. Normally. their relatives. To respondent Mrs. certiorari is allowed notwithstanding the existence and availability of the remedy of appeal. Ferdinand E. we would like to stress that we are treating this case as an exception to the general rule governing petitions for certiorari. relatives. authority. Marcos. in elaborated fashion. 2002 should be threshed out. In all the alleged ill-gotten wealth cases filed by the PCGG. Thus. We thus take cognizance of this case and settle with finality all the issues therein. although an answer may on its face appear to tender issues . this Court has seen fit to set aside technicalities and formalities that merely serve to delay or impede judicious resolution. Estenzo summary judgment was described as a judgment which a court may render before trial but after both parties have pleaded. This Court prefers to have such cases resolved on the merits at the Sandiganbayan.A party seeking to recover upon a claim. depositions or admissions for a summary judgment in his favor upon all or any part thereof. If there is proof of illegal acquisition. Summary judgment is proper when there is clearly no genuine issue as to any material fact in the action. move with supporting affidavits. it was initiated not only out of considerations of simple justice but also out of sheer necessity . supported by affidavits. (1) THE PROPRIETY OF SUMMARY JUDGMENT We hold that respondent Marcoses failed to raise any genuine issue of fact in their pleadings.. and (2) whether or not petitioner Republic was able to prove its case for forfeiture in accordance with Sections 2 and 3 of RA 1379. let it be brought out now. It is ordered by the court upon application by one party. In the early case of Auman vs. This is after the court summarily hears both parties with their respective proofs and finds that there is no genuine issue between them. Rule 35 of the 1997 Rules of Civil Procedure: SECTION 1. with notice upon the adverse party who may in turn file an opposition supported also by affidavits. on motion of petitioner Republic. misappropriation. depositions or other documents. But substantial justice to the Filipino people and to all parties concerned. counterclaim.the national coffers were empty. Summary judgment for claimant. or nearly so. Almost two decades have passed since the government initiated its search for and reversion of such ill-gotten wealth. ISSUES BEFORE THIS COURT The crucial issues which this Court must resolve are: (1) whether or not respondents raised any genuine issue of fact which would either justify or negate summary judgment. Summary judgment is sanctioned in this jurisdiction by Section 1. The theory of summary judgment is that. free from all the delaying technicalities and annoying procedural sidetracks. The definitive resolution of such cases on the merits is thus long overdue. not mere legalisms or perfection of form. depositions or other documents.Page 78 of 328 "great expectations". accumulation. Let the ownership of these funds and other assets be finally determined and resolved with dispatch. fraud or illicit conduct. or cross-claim or to obtain a declaratory relief may. summary judgment should take place as a matter of right. at any time after the pleading in answer thereto has been served. should now be relentlessly and firmly pursued. x x x xxx xxx xxx 11. Respondent Imelda Romualdez Marcos (Imelda. while that of the former First Lady.Page 79 of 328 requiring trial. The data contained in the ITRs and Balance Sheet filed by the “Marcoses are summarized and attached to the reports in the following schedules: Schedule A: Schedule of Income (Annex “T” hereof). ANALYSIS OF RESPONDENTS LEGITIMATE INCOME xxx 12. 5. 1965 up to his ouster by direct action of the people of EDSA on February 22-25. Senator. depositions or admissions that those issues are not genuine but sham or fictitious. M 6221-J 1117-A-9. if it is demonstrated by affidavits.000 a year xxx. for short) the former First Lady who ruled with FM during the 14-year martial law regime. as Minister of Human Settlements from June 1976 to February 22-25. Schedule B: Schedule of Income Tax Paid (Annex “T-1” hereof). Marcos.000 a year. the Court is justified in dispensing with the trial and rendering summary judgment for petitioner Republic. P100. 1365-055-1. 1986.000 a year and from 1977 to 1985. 1986. 1986 was P75. Senate President and President of the Republic of the Philippines from December 31. Based on available documents. . the total salaries of former President Marcos as President form 1966 to 1976 was P60. Imelda R. Marcos (now deceased and represented by his Estate/Heirs) was a public officer for several decades continuously and without interruption as Congressman. occupied the position of Minister of Human Settlements from June 1976 up to the peaceful revolution in February 22-25. She likewise served once as a member of the Interim Batasang Pambansa during the early years of martial law from 1978 to 1984 and as Metro Manila Governor in concurrent capacity as Minister of Human Settlements. 13. At the outset. however. For the years 1976 until 1984. it must be pointed out that based on the Official Report of the Minister of Budget. Respondent Ferdinand E. the returns were filed under Tax Identification No. The Solicitor General made a very thorough presentation of its case for forfeiture: xxx 4. the ITRs of the Marcoses for the years 1965-1975 were filed under Tax Identification No. 191.627.109. Light Rail Transit Authority and Home Development Mutual Fund.91% 15.37% 100.325.00 as President of the Philippines during the period 1966 until 1984.00 and P1.91 in total income over a period of 20 years from 1965 to 1984.00 16.000. FM reported a total of P2. 17.” There is no indication of any payor of the dividends or earnings.442. 1965.325.Page 80 of 328 Schedule C: Schedule of Net Disposable Income (Annex “T-2” hereof). 16. 14.649.646.521.484. The records indicate that the reported income came from her salary from the Ministry of Human Settlements and allowances from Food Terminal.521.408. Schedule D: Schedule of Networth Analysis (Annex “T-3” hereof).00 or US$2.65-M that he decided to later recognize as income. On the other hand. his networth was a mere P120.420.581. conceal the skeletons of their kleptocracy. National Food Authority Council. There are no documents showing any withholding tax certificates. therefore. As summarized in Schedule A (Annex “T” hereof).00 P16.700.109. he was still receiving payments almost 20 years after. In the guise of reporting income using the cash method under Section 38 of the National Internal Revenue Code.836. Imelda reported salaries and allowances only for the years 1979 to 1984 in the amount of P1.00.408.00 in December. The only problem is that in his Balance Sheet attached to his 1965 ITR immediately preceeding his ascendancy to the presidency he did not show any Receivables from client at all.01% 67. Likewise.00 2.71% . P 2. the Marcoses reported P16.00 149. Of the P11.836.442. there is nothing on record that will show any known Marcos client as he has no known law office.00 as Other Income for the years 1972 up to 1976 which he referred to in his return as “Miscellaneous Items” and “Various Corporations.414. incredibly. .000. Inc.00 11. National Home Mortgage Finance Corporation.00 in reported income from legal practice.836. 18. As previously stated. The joint income tax returns of FM and Imelda cannot. much less the P10.00% FM’s official salary pertains to his compensation as Senate President in 1965 in the amount of P15.935.. the amount of P10. FM made it appear that he had an extremely profitable legal practice before he became a President (FM being barred by law from practicing his law profession during his entire presidency) and that.00 or 96% represents “receivables from prior years” during the period 1967 up to 1984. The sources of income are as follows: Official Salaries Legal Practice Farm Income Others Total 15. 667. Under this approach. Computations establish the total networth of spouses Ferdinand and Imelda. Spouses Ferdinand and Imelda did not declare any income from any deposits and placements which are subject to a 5% withholding tax.709. Revenue Region No.233. the taxable reported income over the twenty-year period was P14. with balances amounting to about $356-M with a reservation for the filing of a supplemental or separate forfeiture complaint should the need arise. the Office of the Revenue Collector of Batac. indicates an ending networth of P120. Respondent’s Balance Sheet attached to their 1965 ITR.00 or US$1.994. 4B1. fronts or agents who formed those foundations or corporate entities. Finally. 20. assuming the income from legal practice is real and valid x x x. approach was utilized. Likewise. The following presentation very clearly and overwhelmingly show in detail how both respondents clandestinely stashed away the country’s wealth to Switzerland and hid the same under layers upon layers of foundations and other corporate entities to prevent its detection. covering the year In computing for the networth.77. . taxes and licenses. they opened and maintained numerous bank accounts. The total deductions in the amount of P1. as the case may be. the networth analysis in Schedule D. for the years 1965 until 1984 in the total amount of US$957. as well as the tax-exempt salary of the President for the years 1966 until 1972.220.00 which FM declared as Library and Miscellaneous assets. G.4A. Ferdinand and Imelda. 22.00 which represents 88% of the gross income.097. Leyte. Manila. 21. the income immediately preceding their ascendancy to the presidency.845. medicare fees.000. Tacloban. stationeries and contributions while the other deductions in the amount of P567. Baguio City. the net cumulative disposable income amounts to P6.00 represents 12% of the total gross income. But due to the difficulty if not the impossibility of detecting and documenting all those secret accounts as well as the enormity of the deposits therein hidden.463. they did not find any records involving the tax transactions of spouses Ferdinand and Imelda in Revenue Region No. In Schedule B. depending upon the income earned or loss incurred. BIR attested that no records were found on any filing of capital gains tax return involving spouses FM and Imelda covering the years 1960 to 1965. Revenue Region No. Further.00 represents interest charges. postage. 8. represents the total accumulated networth of spouses. Through their dummies/nominees. The amount is arrived at by adding back to the net income after tax the personal and additional exemptions for the years 1965-1984. This is the amount that represents that portion of the Marcoses income that is free for consumption.301. The Bureau of Internal Revenue attested that after a diligent search of pertinent records on file with the Records Division. the following presentation is confined to five identified accounts groups. the beginning capital is increased or decreased.Page 81 of 328 19.59.75. The Marcoses paid income taxes totaling P8.487. Quezon City and Revenue No.00 represent expenses incurred for subscription. The business expenses in the amount of P861. THE SECRET MARCOS DEPOSITS IN SWISS BANKS 23.748.595.756.00 or US$980. 1. savings and investments. In Schedule C.296. the bank accounts and respective balances of the said VIBUR FOUNDATION remained with SKA. In Sydney. also of SKA Legal Service. The account was officially opened with SKA on September 10. as the foundation’s first and sole beneficiary. comparison of the listing of the securities in the safe deposit register of the VERSO FOUNDATION as of December 31. In an apparent maneuver to bury further the secret deposits beneath the thick layers of corporate entities. 1971. On March 11. a wholly-owned subsidiary of Fides Trust. 1981. 1972. February 27. On June 11. Atty. 27. and Dr. 1986. Apparently. THE AZIO-VERSO-VIBUR FOUNDATION ACCOUNTS 24. 25. AZIO Foundation was formed on June 21. Marcos issued a written directive to liquidated VERSO FOUNDATION and to transfer all its assets to account of FIDES TRUST COMPANY at Bank Hofman in Zurich under the account “Reference OSER. 1986. the liquidation was an attempt by the Marcoses to transfer the foundation’s funds to another account or bank but this was prevented by the timely freeze order issued by the Swiss authorities.Page 82 of 328 H. 28. 26. Marcos changed the first and sole beneficiary to CHARIS FOUNDATION. Pursuant to the said Marcos mandate. 1971. FM again issued another written order naming Austrahil PTY Ltd. legal counsel of Schweizeresche Kreditanstalt or SKA. 1981. the Marcos-designated Board of Trustees decided to liquidate VIBUR A notice of such liquidation was sent to the Office of the Public Register on March 21. 1981 readily reveals that successor of VERSO FOUNDATION. it is certain that the VIBUR FOUNDATION is the beneficial as of However. Benedicto empowering him to transact business in behalf of the said foundation. Under the foregoing circumstances. One of the latest documents obtained by the PCGG from the Swiss authorities is a declaration signed by . Walter Fessler and Ernst Scheller. 1981. 1971. 29. for him to establish the AZIO Foundation. Inc. Ivo Beck and Limag Management. In an undated instrument. the AZIO FOUNDATION was renamed to VERSO FOUNDATION. Ferdinand Marcos issued a written order to Dr. The Board of Trustees remained the same. Ferdinand Marcos was named first beneficiary and the Marcos Foundation. 1981 with that of VIBUR FOUNDATION exactly the same securities were listed. 1978. Helmuth Merling from Schaan were designated as members of the Board of Trustees of the said foundation. On November 12. Theo Bertheau. On August 29. 1981 in Vaduz. Marcos executed a power of attorney in favor of Roberto S. On the same date. FM effected the establishment of VIBUR FOUNDATION on May 13. This change was recorded on December 4. This was recorded on December 14. However. 1971 in Vaduz. FOUNDATION. was second beneficiary. were designated as members of the Board of Trustees. Australia. On March 18. The beneficial owner was not made known to the bank since Fides Trust Company acted as fiduciary.” The Board of Trustees decided to dissolve the foundation on June 25. also known as Swiss Credit Bank. JANE RYAN. The XANDY FOUNDATION was renamed WINTROP FOUNDATION on August 29. As the Flow Chart hereof shows. 33. However. 1978. On March 10. apparently to hide his true identity. 1980. 1986. Marcos. The XANDY FOUNDATION was established on March 3. This is the most intricate and complicated account group. were accomplished forms for “Declaration/Specimen Signatures” submitted by the Marcos couple. This is the biggest group from where the $50-M investment fund of the Marcoses was drawn when they bought the Central Bank’s dollar-denominated treasury notes with high-yielding interests. In the handwritten Regulations signed by the Marcos couple as well as in the type-written Regulations signed by Markus Geel both dated February 13. Jr. March 21. FM and Imelda issued the written mandate to establish the foundation to Markus Geel of SKA on March 3. Ivo Beck (the trustee) stating that the beneficial owner of VIBUR FOUNDATION is Ferdinand E. Imelda Marcos also opened her own bank accounts with the same Found among the voluminous documents in Malacañang shortly after they fled to Hawaii in haste that fateful night of February 25. 1989. WINTROP FOUNDATION was dissolved. XANDY-WINTROP: CHARIS-SCOLARI-VALAMO-SPINUS-AVERTINA FOUNDATION ACCOUNTS 31. The next day. Marcos opened bank accounts with SKA using an alias or pseudonym WILLIAM SAUNDERS. 1970 in Vaduz.W. .Page 83 of 328 Dr. two (2) groups under the foundation organized by Marcos dummies/nominees for FM’s benefit. 1970. (Bongbong) and Irene – as equal third beneficiaries. his First Lady. the Marcos spouses were named the first beneficiaries. 32.00 I. 1968. Souviron was replaced by Dr. Fessler.544.597. 1970. 34. Later. eventually joined together and became one (1) account group under the AVERTINA FOUNDATION for the benefit of both FM and Imelda. the surviving spouse as the second beneficiary and the Marcos children – Imee. These accounts were actively operated and maintained by the Marcoses for about two (2) years until their closure sometime in February. Ferdinand. As of December 31. 1981. Souviron and E. C. 1970 and the balances transferred to XANDY FOUNDATION. Mrs. after his second year in the presidency. under the General Account No. Peter Ritter. Under the caption “signature(s)” Ferdinand and Imelda signed their real names as well as their respective aliases underneath. Scheller were named as members of the Board of Trustees. Another document signed by G. 1968. the balance of the bank accounts of VIBUR FOUNDATION with SKA. Raber of SKA shows that VIBUR FOUNDATION is owned by the “Marcos Familie” 30. on March 27. C. 35. Ferdinand and Imelda Marcos issued a written order to the Board of Wintrop to liquidate the foundation and transfer all its assets to Bank Hofmann in Zurich in favor of FIDES TRUST COMPANY. The Board of Trustees remained the same at the outset. bank using an American-sounding alias. 469857 totaled $3. On March 20. Zurich. 366. On December 13. Latest documents received from Swiss authorities included a declaration signed by IVO Beck stating that the beneficial owners of AVERTINA FOUNDATION are FM and Imelda.190. 1981. 1981. The beneficial owner of AVERTINA was not made known to the bank since the FIDES TRUST CO. Charis Foundation was renamed Scolari Foundation but the directors remained the same. The beneficial owner of the foundation was not made known to the bank since Fides Trust Co.00 while that of Category NES as of 12-31-83 was US$8. Dr. 38. On March 11. Two (2) account categories. the list of securities in the safe deposit register of Valamo Foundation as of December 31. 1974. which started with the CHARIS FOUNDATION. 1972 to act in his behalf with regard to Charis Foundation. AG in favor of Fides Trust Company under the account “Reference OMAL”.Page 84 of 328 36. 40 The SPINUS FOUNDATION was established on May 13. the securities listed in the safe deposit register of WINTROP FOUNDATION Category S as of December 31.. a wholly-owned subsidiary of FIDES TRUST CO. were opened on September 10. 1981 in Vaduz with Atty. FM gave a power of attorney to Roberto S. as members of the Foundation’s Board of Directors. 1989 amounted to US$231. The other groups of foundations that eventually joined AVERTINA were also established by FM Another document signed by G. acted as founding director in behalf of FM by virtue of the mandate and agreement dated November 12. the securities listed in the safe deposit register of WINTROP FOUNDATION Category R as of December 31. However. Trustees. 1981. SKA legal counsel. Under . it is certain that the beneficial successor of WINTROP FOUNDATION is AVERTINA FOUNDATION.894. Likewise. 1971 and the Regulations. 1971. Theo Bertheau.647. Benedicto on February 15. namely: CAR and NES. acted as fiduciary. FM himself was named the first beneficiary and Xandy Foundation as second beneficiary in accordance with the handwritten instructions of FM on November 12. Walter Fessler and Ernst Scheller of SKA and Dr. The balance of Category CAR as of December 31. acted as fiduciary. The AVERTINA FOUNDATION was established on May 13. 1981. 39. 1981. 1980 were the same as those listed in the register of Avertina Category NES as of December 31. 1981 in Vaduz with Atty. a wholly-owned subsidiary of Fides Trust Co. 1980 are practically the same with those listed in the safe deposit register of Spinus Foundation as of December 31. Ivo Beck and as members of the Board of Limag Management. The account was officially opened with SKA on September 10.” 37. 1981 FM ordered in writing that the Valamo Foundation be liquidated and all its assets be transferred to Bank Hofmann.00. Peter Ritter were named as directors. Families. The CHARIS FOUNDATION was established in VADUZ on December 27. 1981. 1980 were the same as those listed in the register of AVERTINA FOUNDATION Category CAR as of December 31.. However.Under the circumstances. Ivo Beck and Limag Management. 1971. Raber of SKA indicates that Avertina Foundation is owned by the “Marcos through his dummies. The Board of Directors decided on the immediate dissolution of Valamo Foundation on June 25. According to written information from SKA dated November 28. a wholly-owned subsidiary of Fides Trust Co. On September 6. thus the establishment of Rayby Foundation. a comparison of the list of securities of the Spinus Foundation as of February 3. The regulations as well as the agreement. one can clearly see that practically the same securities were listed. 1981 in Vaduz with Dr. 1982 with the safe deposit slips of the Avertina Foundation Category CAR as of August 19. Imelda was named the first and only beneficiary of Rayby foundation. However. Moreover. Scheller of SKA and Dr. Irene were named as equal second beneficiaries. Imelda apparently had the intention in 1973 to transfer part of the assets of Trinidad Foundation to another foundation. However. Imelda was named the first beneficiary and her children Imelda (Imee). 41.W. The Trinidad Foundation was organized on August 26. In July/August. Imelda issued a written order to transfer all the assets of Rayby Foundation to Trinidad Foundation and to subsequently liquidate Rayby. 1981. 1970. Fessler and E. several transfers from the foundation’s German marks and US dollar accounts were made to Avertina Category CAR totaling DM 29.5-M and $58-M. when one compares the listing of securities in the safe deposit register of Trinidad Foundation as of December 31. 1970 were likewise signed by Imelda. transfer of assets never took place. she issued a written order to the board of Trinidad to dissolve the foundation and transfer all its assets to Bank Hofmann in favor of Fides Trust Co. TRINIDAD-RAYBY-PALMY FOUNDATION ACCOUNTS 42. 1981. Ivo Beck and Limag Management. Under the account “Reference Dido. Imelda issued a written mandate to establish the foundation to Markus Geel on August 26.” Rayby was dissolved on April 6. 1981 and Trinidad was liquidated on August 3. it is certain that the Spinus Foundation is the beneficial successor of the Valamo Foundation. The account was officially opened with the SKA on September 10. The beneficial owner was not made known to the bank since Fides Trust Co. Ferdinand. (Bongbong) and. there was a written instruction from Spinus Foundation to SKA to close its Swiss Franc account and transfer the balance to Avertina Foundation.1980 with that of the Palmy Foundation as of December 31. J.Page 85 of 328 the circumstances. Imelda issued a written mandate to Dr. 1970 in Vaduz with C. 1980. 1982. 1988. . Under the circumstances. Scheller and Ritter as members of the board of directors. On the same date. 1982. Jr. 44. it is certain that the Palmy Foundation is the beneficial successor of the Trinidad Foundation. Theo Bertheau to establish the foundation with a note that the foundation’s capitalization as well as the cost of establishing it be debited against the account of Trinidad Foundation. acted as fiduciary. both dated August 28. respectively. Otto Tondury as the foundation’s directors. 1981. Rayby Foundation was established on June 22. as members of the Foundation’s Board of Directors. On March 10. 1973 in Vaduz with Fessler. The PALMY FOUNDATION was established on May 13. 43. 1982 shows that all the securities of Spinus were transferred to Avertina. Maler was first created as an establishment. Andre Barbey and Jean Louis Sunier as attorneys of the company and as administrator and manager of all assets held by the company. Rosalys Foundation was liquidated and all its assets were transferred to Aguamina Corporation’s (Panama) Account No. also mentioned in the said document that they bought the Maler Establishment from SBC. Christinaz and R. Geneva. 1985. 46. K. Hence.00. J. A statement of its rules and regulations was found among Malacañang documents. Geneva. Its Articles of Incorporation was executed on September 24. of SBC. 1991 stating that the by-laws dated October 3. As of August 30.214. the ending balance of the bank accounts of Palmy Foundation under General Account No. As of December 31.00. ROSALYS-AGUAMINA FOUNDATION ACCOUNTS 47. which the remaining 50% will be divided in equal parts among their children. 53300.432. Barbey and Mr. 1971 governing Rosalys Foundation was the same by-law applied to Aguamina Corporation Account No. Rossier. 1971 and its By-Laws on October 3. Ivo Beck stating that the beneficial owner of Palmy Foundation is Imelda. Rosalys Foundation was established in 1971 with FM as the beneficiary. 1971. Maler Establishment opened and maintained bank accounts with SBC. L. respectively. The letter was signed by FM and Imelda in their signatures and as John Lewis. It stated. 53300 is evidenced by an opening account documents from the bank. 391528 is $17. The opening bank documents were signed by Dr. The Marcos couple. FM remains the beneficiary of Aguamina Corporation Account No. MALER FOUNDATION ACCOUNTS 49.Page 86 of 328 45. among others. This word will have the same value as the couple’s own personal signature. The ownership by Aguamina Corporation of Account No. that 50% of the Company’s assets will be for sole and full right disposal of FM and Imelda during their lifetime. 1989. Geneva issued a declaration dated September 3. stating that all instructions to be transmitted with regard to Maler will be signed with the word “JOHN LEWIS”. 50. 48. On December 19. 1991. 53300 with SBC. 53300. Sunnier as authorized signatories. FM and Imelda issued a letter addressed to Maler Establishment. Another document signed by Raber shows that the said Palmy Foundation is owned by “Marcos Familie”. 53300 amounted to $80. . They further confirmed that no change of beneficial owner was involved while transferring the assets of Rosalys to Aguamina.483. This foundation maintained several accounts with Swiss Bank Corporation (SBC) under the general account 51960 where most of the bribe monies from Japanese suppliers were hidden.L. First Vice-President and Senior Vice President.566.1968 and signed by Ferdinand and Imelda pertains to the appointment of Dr. On the same date. Latest documents received from Swiss Authorities included a declaration signed by Dr. the ending balance of Account No. Another Malacañang document dated October 19. Maria Imelda M. xxx x x x. 12.195. the attorneys were changed to Michael Amaudruz. Marcos may be served with summons and other processes at No. . Araneta and Ferdinand Marcos.000.929 NY amount SF 9. All the five (5) group accounts in the over-all flow chart have a total balance of about Three Hundred Fifty Six Million Dollars ($356. Irene M. As of June 6. administration of the assets was left to SBC.. and ADMIT the rest. Marcos.. Likewise. Manotoc. Maler Foundation cancelled the power of attorney for the management of its assets in favor of SBC and transferred such power to Sustrust Investment Co. Burgos Street. Respondents specifically deny paragraph 5 of the Petition in so far as it states that summons and other court processes may be served on Respondent Imelda R.000. xxx xxx Respondents ADMIT paragraphs 3 and 4 of the Petition. 52. in their answer. 11. Respondents ADMIT paragraph 11 of the Petition. xxx xxx xxx 10. 254. 1984. Jr. On February 28. S.A. Metro Manila.508 BT and 98. 1981. 1991. et. it became necessary to transform Maler Establishment into a foundation. for a total of SF 25. However. 1980.00. 10-B Bel Air Condominium 5022 P. Makati. The articles of incorporation of Maler Foundation registered on November 17. Respondents Imelda R. 53.825.00) as shown by Annex “R-5” hereto attached as integral part hereof.083.Page 87 of 328 51.278. stated the following: xxx 4. GM only until December 31. the ending balance of Maler Foundation’s Account Nos.567 and SG 16. This account was opened by Maler when it was still an establishment which was subsequently transformed into a foundation. On November 17. 1981 appear to be the same articles applied to Maler Establishment.258. Respondents specifically DENY paragraph 13 of the Petition for lack of knowledge or information sufficient to form a belief as to the truth of the allegation since Respondents cannot remember with exactitude the contents of the alleged ITRs and Balance Sheet. Marcos at the stated address the truth of the matter being that Respondent Imelda R. 5. al. respectively. Respondents specifically DENY paragraph 12 of the Petition for lack of knowledge sufficient to form a belief as to the truth of the allegation since Respondents were not privy to the transactions and that they cannot remember exactly the truth as to the matters alleged. Respondents specifically DENY paragraph 16 of the Petition for lack of knowledge or information sufficient to form a belief as to the truth of the allegation since Respondents cannot remember with exactitude the contents of the alleged ITRs. Respondents specifically DENY paragraph 14 of the Petition for lack of knowledge or information sufficient to form a belief as to the truth of the allegation since Respondents cannot remember with exactitude the contents of the alleged ITRs. 14. 17. 15. and specifically DENY the rest for lack of knowledge or information sufficient to form a belief as to the truth of the allegation since Respondents cannot remember with exactitude the contents of the alleged ITRs or the attachments thereto. Respondents specifically DENY paragraph 22 of the Petition for lack of knowledge or information sufficient to form a belief as to the truth of the allegation since Respondents cannot remember with exactitude the contents of the alleged ITRs. 22. Respondents specifically DENY paragraph 17 of the Petition insofar as it attributes willful duplicity on the part of the late President Marcos. the same being pure conclusions based on pure assumption and not allegations of fact. for being false. Respondents specifically DENY paragraph 21 of the Petition for lack of knowledge or information sufficient to form a belief as to the truth of the allegation since Respondents cannot remember with exactitude the contents of the alleged ITRs. Respondents specifically DENY paragraph 15 of the Petition for lack of knowledge or information sufficient to form a belief as to the truth of the allegation since Respondents cannot remember with exactitude the contents of the alleged ITRs.Page 88 of 328 13. 18. 21. 19. Respondents specifically DENY paragraph 18 of the Petition for lack of knowledge or information sufficient to form a belief as to the truth of the allegation since Respondents cannot remember with exactitude the contents of the alleged ITRs. 20. Respondents specifically DENY paragraph 20 of the Petition for lack of knowledge or information sufficient to form a belief as to the truth of the allegation since Respondents cannot remember with exactitude the contents of the alleged ITRs. 16. Respondents specifically DENY paragraph 19 of the Petition for lack of knowledge or information sufficient to form a belief as to the truth of the allegation since Respondents cannot remember with exactitude the contents of the alleged ITRs and that they are not privy to the activities of the BIR. Respondents specifically DENY paragraph 23 insofar as it alleges that Respondents clandestinely stashed the country’s wealth in Switzerland and hid the same under layers and layers of foundation and . 1993. 34. 26. 45. that “the funds were lawfully acquired” are fully insufficient to tender genuine issues. 33. Marcos. Respondents specifically DENY paragraphs 24. 39. 36. 50. of the Petition for lack of knowledge or information sufficient to form a belief as to the truth of the allegations since Respondents were not privy to the transactions and as to such transaction they were privy to they cannot remember with exactitude the same having occurred a long time ago. Respondents specifically DENY paragraphs 42. 26. Marcos and the Marcos children indubitably failed to tender genuine issues in their answer to the petition for forfeiture. 27. except that as to Respondent Imelda R. Respondents’ defenses of “lack of knowledge for lack of privity” or “(inability to) recall because it happened a long time ago” or. Respondent Marcoses’ defenses were a sham and evidently calibrated to compound and confuse the issues. 40. Respondents specifically DENY paragraphs 49. 28.37. 23. set up in bad faith or patently lacking in substance so as not to constitute a genuine issue for trial. on the part of Mrs. The following pleadings filed by respondent Marcoses are replete with indications of a spurious defense: (a) Respondents' Answer dated October 18. . and 46. Respondents specifically DENY paragraphs 31. the truth being that Respondents aforesaid properties were lawfully acquired. 44. of the Petition for lack of knowledge or information sufficient to form a belief as to the truth of the allegations since Respondents were not privy to the transactions and as to such transaction they were privy to they cannot remember with exactitude the same having occurred a long time ago. except that as to Respondent Imelda R. 51 and 52. the Court finds that respondent Mrs. 43. except that as to Respondent Imelda R. Marcos she specifically remembers that the funds involved were lawfully acquired.Page 89 of 328 corporate entities for being false. Marcos she specifically remembers that the funds involved were lawfully acquired. except that as to Respondent Imelda R. and 41 of the Petition for lack of knowledge or information sufficient to form a belief as to the truth of the allegations since Respondents are not privy to the transactions and as to such transaction they were privy to they cannot remember with exactitude the same having occurred a long time ago. A genuine issue is an issue of fact which calls for the presentation of evidence as distinguished from an issue which is fictitious and contrived. Upon careful perusal of the foregoing. Marcos she specifically remembers that the funds involved were lawfully acquired. 29 and 30 of the Petition for lack of knowledge or information sufficient to form a belief as to the truth of the allegation since Respondents were not privy to the transactions regarding the alleged Azio-Verso-Vibur Foundation accounts. 24. 25. Marcos she specifically remembers that the funds involved were lawfully acquired. 35. 32. 38. 25. All they gave were stock answers like “they have no sufficient knowledge” or “they could not recall because it happened a long time ago. and this shall have the effect of a denial. Respondents’ Answer dated October 18.” without stating the basis of such assertions. An examination of the foregoing pleadings is in order. 2000 filed by Mrs. Marcos. and Manifestation dated October 19. filed by Mrs. Marcos which the other respondents (Marcos children) adopted. Motion for Reconsideration dated October 5. (d) Demurrer to Evidence dated May 2. 1998. Marcos. Jr. whenever practicable. Where a defendant desires to deny only a part of an averment.Page 90 of 328 (b) Pre-trial Brief dated October 4. 1993. respondents failed to specifically deny each and every allegation contained in the petition for forfeiture in the manner required by the rules. “the funds were lawfully acquired. 2000 of the Marcos children. Marcos. provides: A defendant must specify each material allegation of fact the truth of which he does not admit and. (f) Memorandum dated December 12. 2000. 2000 of Mrs. 1999 of Ferdinand. as to Mrs. Supplemental Pre-trial Brief dated October 19.” and. 1999 of Irene Marcos-Araneta adopting the pre-trial briefs of her co. and General/Supplemental Agreement dated December 23. shall set forth the substance of the matters upon which he relies to support his denial.. Rule 8 of the 1997 Rules of Civil Procedure. Manotoc and Ferdinand.respondents. Section 10. and Supplemental Motion for Reconsideration dated October 9. and Mrs. Jr. In their answer. 1993. Jr. 2000 filed by Mrs. 2000 jointly filed by Mrs. (c) Opposition to Motion for Summary Judgment dated March 21. 2000 likewise jointly filed by Mrs. 1999 of Mrs. Where a defendant is without knowledge or information sufficient to form a belief as to the truth of a material averment made in the complaint.. (g) (h) Manifestation dated May 26. (e) Motion for Reconsideration dated September 26. . he shall so state. Marcos. Imee Marcos-Manotoc adopting the pre-trial brief of Mrs. he shall specify so much of it as is true and material and shall deny the remainder. Marcos and Memorandum dated December 17. Marcos and adopted by the Marcos children. Manotoc and Ferdinand. Page 91 of 328 The purpose of requiring respondents to make a specific denial is to make them disclose facts which will disprove the allegations of petitioner at the trial, together with the matters they rely upon in support of such denial. Our jurisdiction adheres to this rule to avoid and prevent unnecessary expenses and waste of time by compelling both parties to lay their cards on the table, thus reducing the controversy to its true terms. As explained in Alonso vs. Villamor, A litigation is not a game of technicalities in which one, more deeply schooled and skilled in the subtle art of movement and position, entraps and destroys the other. It is rather a contest in which each contending party fully and fairly lays before the court the facts in issue and then, brushing aside as wholly trivial and indecisive all imperfections of form and technicalities of procedure, asks that justice be done upon the merits. Lawsuits, unlike duels, are not to be won by a rapier’s thrust. On the part of Mrs. Marcos, she claimed that the funds were lawfully acquired. However, she failed to particularly state the ultimate facts surrounding the lawful manner or mode of acquisition of the subject funds. Simply put, she merely stated in her answer with the other respondents that the funds were “lawfully acquired” without detailing how exactly these funds were supposedly acquired legally by them. Even in this case before us, her assertion that the funds were lawfully acquired remains bare and unaccompanied by any factual support which can prove, by the presentation of evidence at a hearing, that indeed the funds were acquired legitimately by the Marcos family. Respondents’ denials in their answer at the Sandiganbayan were based on their alleged lack of knowledge or information sufficient to form a belief as to the truth of the allegations of the petition. It is true that one of the modes of specific denial under the rules is a denial through a statement that the defendant is without knowledge or information sufficient to form a belief as to the truth of the material averment in the complaint. The question, however, is whether the kind of denial in respondents’ answer qualifies as the specific denial called for by the rules. We do not think so. In Morales vs. Court of Appeals, this Court ruled that if an allegation directly and specifically charges a party with having done, performed or committed a particular act which the latter did not in fact do, perform or commit, a categorical and express denial must be made. Here, despite the serious and specific allegations against them, the Marcoses responded by simply saying that they had no knowledge or information sufficient to form a belief as to the truth of such allegations. Such a general, self-serving claim of ignorance of the facts alleged in the petition for forfeiture was insufficient to raise an issue. Respondent Marcoses should have positively stated how it was that they were supposedly ignorant of the facts alleged. To elucidate, the allegation of petitioner Republic in paragraph 23 of the petition for forfeiture stated: 23. The following presentation very clearly and overwhelmingly show in detail how both respondents clandestinely stashed away the country’s wealth to Switzerland and hid the same under layers upon layers Page 92 of 328 of foundations and other corporate entities to prevent its detection. Through their dummies/nominees, fronts or agents who formed those foundations or corporate entities, they opened and maintained numerous bank accounts. But due to the difficulty if not the impossibility of detecting and documenting all those secret accounts as well as the enormity of the deposits therein hidden, the following presentation is confined to five identified accounts groups, with balances amounting to about $356-M with a reservation for the filing of a supplemental or separate forfeiture complaint should the need arise. Respondents’ lame denial of the aforesaid allegation was: 22. Respondents specifically DENY paragraph 23 insofar as it alleges that Respondents clandestinely stashed the country’s wealth in Switzerland and hid the same under layers and layers of foundations and corporate entities for being false, the truth being that Respondents’ aforesaid properties were lawfully acquired. Evidently, this particular denial had the earmark of what is called in the law on pleadings as a negative pregnant, that is, a denial pregnant with the admission of the substantial facts in the pleading responded to which are not squarely denied. It was in effect an admission of the averments it was directed at. Stated otherwise, a negative pregnant is a form of negative expression which carries with it an affirmation or at least an implication of some kind favorable to the adverse party. It is a denial pregnant with an admission of the substantial facts alleged in the pleading. Where a fact is alleged with qualifying or modifying language and the words of the allegation as so qualified or modified are literally denied, has been held that the qualifying circumstances alone are denied while the fact itself is admitted. In the instant case, the material allegations in paragraph 23 of the said petition were not specifically denied by respondents in paragraph 22 of their answer. The denial contained in paragraph 22 of the answer was focused on the averment in paragraph 23 of the petition for forfeiture that “Respondents clandestinely stashed the country’s wealth in Switzerland and hid the same under layers and layers of foundations and corporate entities.” Paragraph 22 of the respondents’ answer was thus a denial pregnant with admissions of the following substantial facts: (1) (2) the Swiss bank deposits existed and that the estimated sum thereof was US$356 million as of December, 1990. Therefore, the allegations in the petition for forfeiture on the existence of the Swiss bank deposits in the sum of about US$356 million, not having been specifically denied by respondents in their answer, were deemed admitted by them pursuant to Section 11, Rule 8 of the 1997 Revised Rules on Civil Procedure: Material averment in the complaint, xxx shall be deemed admitted when not specifically denied. xxx. Page 93 of 328 By the same token, the following unsupported denials of respondents in their answer were pregnant with admissions of the substantial facts alleged in the Republic’s petition for forfeiture: 23. Respondents specifically DENY paragraphs 24, 25, 26, 27, 28, 29 and 30 of the Petition for lack of knowledge or information sufficient to form a belief as to the truth of the allegation since respondents were not privy to the transactions regarding the alleged Azio-Verso-Vibur Foundation accounts, except that, as to respondent Imelda R. Marcos, she specifically remembers that the funds involved were lawfully acquired. 24. Respondents specifically DENY paragraphs 31, 32, 33, 34, 35, 36, 37, 38, 39, 40, 41 of the Petition for lack of knowledge or information sufficient to form a belief as to the truth of the allegations since respondents were not privy to the transactions and as to such transactions they were privy to, they cannot remember with exactitude the same having occurred a long time ago, except as to respondent Imelda R. Marcos, she specifically remembers that the funds involved were lawfully acquired. 25. Respondents specifically DENY paragraphs 42, 43, 45, and 46 of the petition for lack of knowledge or information sufficient to from a belief as to the truth of the allegations since respondents were not privy to the transactions and as to such transaction they were privy to, they cannot remember with exactitude, the same having occurred a long time ago, except that as to respondent Imelda R. Marcos, she specifically remembers that the funds involved were lawfully acquired. 26. Respondents specifically DENY paragraphs 49, 50, 51 and 52 of the petition for lack of knowledge and information sufficient to form a belief as to the truth of the allegations since respondents were not privy to the transactions and as to such transaction they were privy to they cannot remember with exactitude the same having occurred a long time ago, except that as to respondent Imelda R. Marcos, she specifically remembers that the funds involved were lawfully acquired. The matters referred to in paragraphs 23 to 26 of the respondents’ answer pertained to the creation of five groups of accounts as well as their respective ending balances and attached documents alleged in paragraphs 24 to 52 of the Republic’s petition for forfeiture. Respondent Imelda R. Marcos never specifically denied the existence of the Swiss funds. Her claim that “the funds involved were lawfully acquired” was an acknowledgment on her part of the existence of said deposits. This only reinforced her earlier admission of the allegation in paragraph 23 of the petition for forfeiture regarding the existence of the US$356 million Swiss bank deposits. The allegations in paragraphs 47 and 48 of the petition for forfeiture referring to the creation and amount of the deposits of the Rosalys-Aguamina Foundation as well as the averment in paragraph 52-a of the said petition with respect to the sum of the Swiss bank deposits estimated to be US$356 million were again not specifically denied by respondents in their answer. The respondents did not at all respond to the issues raised in these paragraphs and the existence, nature and amount of the Swiss funds were therefore Page 94 of 328 deemed admitted by them. As held in Galofa vs. Nee Bon Sing , if a defendant’s denial is a negative pregnant, it is equivalent to an admission. Moreover, respondents’ denial of the allegations in the petition for forfeiture “for lack of knowledge or information sufficient to form a belief as to the truth of the allegations since respondents were not privy to the transactions” was just a pretense. Mrs. Marcos’ privity to the transactions was in fact evident from her signatures on some of the vital documents attached to the petition for forfeiture which Mrs. Marcos failed to specifically deny as required by the rules. It is worthy to note that the pertinent documents attached to the petition for forfeiture were even signed personally by respondent Mrs. Marcos and her late husband, Ferdinand E. Marcos, indicating that said documents were within their knowledge. As correctly pointed out by Sandiganbayan Justice Francisco Villaruz, Jr. in his dissenting opinion: The pattern of: 1) creating foundations, 2) use of pseudonyms and dummies, 3) approving regulations of the Foundations for the distribution of capital and income of the Foundations to the First and Second beneficiary (who are no other than FM and his family), 4) opening of bank accounts for the Foundations, 5) changing the names of the Foundations, 6) transferring funds and assets of the Foundations to other Foundations or Fides Trust, 7) liquidation of the Foundations as substantiated by the Annexes U to U-168, Petition [for forfeiture] strongly indicate that FM and/or Imelda were the real owners of the assets deposited in the Swiss banks, using the Foundations as dummies. How could respondents therefore claim lack of sufficient knowledge or information regarding the existence of the Swiss bank deposits and the creation of five groups of accounts when Mrs. Marcos and her late husband personally masterminded and participated in the formation and control of said foundations? This is a fact respondent Marcoses were never able to explain. Not only that. Respondents' answer also technically admitted the genuineness and due execution of the Income Tax Returns (ITRs) and the balance sheets of the late Ferdinand E. Marcos and Imelda R. Marcos attached to the petition for forfeiture, as well as the veracity of the contents thereof. The answer again premised its denials of said ITRs and balance sheets on the ground of lack of knowledge or information sufficient to form a belief as to the truth of the contents thereof. Petitioner correctly points out that respondents' denial was not really grounded on lack of knowledge or information sufficient to form a belief but was based on lack of recollection. By reviewing their own records, respondent Marcoses could have easily determined the genuineness and due execution of the ITRs and the balance sheets. They also had the means and opportunity of verifying the same from the records of the BIR and the Office of the President. They did not. When matters regarding which respondents claim to have no knowledge or information sufficient to form a belief are plainly and necessarily within their knowledge, their alleged ignorance or lack of Page 95 of 328 information will not be considered a specific denial. An unexplained denial of information within the control of the pleader, or is readily accessible to him, is evasive and is insufficient to constitute an effective denial. The form of denial adopted by respondents must be availed of with sincerity and in good faith, and certainly not for the purpose of confusing the adverse party as to what allegations of the petition are really being challenged; nor should it be made for the purpose of delay . In the instant case, the Marcoses did not only present unsubstantiated assertions but in truth attempted to mislead and deceive this Court by presenting an obviously contrived defense. Simply put, a profession of ignorance about a fact which is patently and necessarily within the pleader’s knowledge or means of knowing is as ineffective as no denial at all. Respondents’ ineffective denial thus failed to properly tender an issue and the averments contained in the petition for forfeiture were deemed judicially admitted by them. As held in J.P. Juan & Sons, Inc. vs. Lianga Industries, Inc.: Its “specific denial” of the material allegation of the petition without setting forth the substance of the matters relied upon to support its general denial, when such matters were plainly within its knowledge and it could not logically pretend ignorance as to the same, therefore, failed to properly tender on issue. Thus, the general denial of the Marcos children of the allegations in the petition for forfeiture “for lack of knowledge or information sufficient to form a belief as to the truth of the allegations since they were not privy to the transactions” cannot rightfully be accepted as a defense because they are the legal heirs and successors-in-interest of Ferdinand E. Marcos and are therefore bound by the acts of their father vis-a-vis the Swiss funds. PRE-TRIAL BRIEF DATED OCTOBER 18, 1993 The pre-trial brief of Mrs. Marcos was adopted by the three Marcos children. In said brief, Mrs. Marcos stressed that the funds involved were lawfully acquired. But, as in their answer, they failed to state and substantiate how these funds were acquired lawfully. They failed to present and attach even a single document that would show and prove the truth of their allegations. Section 6, Rule 18 of the 1997 Rules of Civil Procedure provides: The parties shall file with the court and serve on the adverse party, x x x their respective pre-trial briefs which shall contain, among others: xxx (d) the documents or exhibits to be presented, stating the purpose thereof; Page 96 of 328 xxx (f) the number and names of the witnesses, and the substance of their respective testimonies. It is unquestionably within the court’s power to require the parties to submit their pre-trial briefs and to state the number of witnesses intended to be called to the stand, and a brief summary of the evidence each of them is expected to give as well as to disclose the number of documents to be submitted with a description of the nature of each. The tenor and character of the testimony of the witnesses and of the documents to be deduced at the trial thus made known, in addition to the particular issues of fact and law, it becomes apparent if genuine issues are being put forward necessitating the holding of a trial. Likewise, the parties are obliged not only to make a formal identification and specification of the issues and their proofs, and to put these matters in writing and submit them to the court within the specified period for the prompt disposition of the action. The pre-trial brief of Mrs. Marcos, as subsequently adopted by respondent Marcos children, merely stated: xxx WITNESSES 4.1 Respondent Imelda will present herself as a witness and reserves the right to present additional witnesses as may be necessary in the course of the trial. xxx DOCUMENTARY EVIDENCE 5.1 Respondent Imelda reserves the right to present and introduce in evidence documents as may be necessary in the course of the trial. Mrs. Marcos did not enumerate and describe the documents constituting her evidence. Neither the names of witnesses nor the nature of their testimony was stated. What alone appeared certain was the testimony of Mrs. Marcos only who in fact had previously claimed ignorance and lack of knowledge. And even then, the substance of her testimony, as required by the rules, was not made known either. Such cunning tactics of respondents are totally unacceptable to this Court. issue was raised, the case became ripe for summary judgment. OPPOSITION TO MOTION FOR SUMMARY JUDGMENT DATED MARCH 21, 2000 The opposition filed by Mrs. Marcos to the motion for summary judgment dated March 21, 2000 of petitioner Republic was merely adopted by the Marcos children as their own opposition to the said motion. We hold that, since no genuine depositions. 2002 that. her counsel stated that his client was just a beneficiary of the funds. Atty. during the pre-trial. Counsel for Manotoc and Manotoc. Your Honor. TECSON: We joined the Manifestation of Counsel. Motions for Reconsideration. or admissions at least three (3) days before hearing. Mrs. Armando M. supporting affidavits. thereby failing to raise genuine issues of fact. TECSON: Yes. depositions. After hearing.Page 97 of 328 However. Demurrer to Evidence dated May 2. The absence of opposing affidavits. show that. That’s your statement of facts? Atty. . Marcos disclaimed ownership of or interest in the funds. PJ Garchitorena: That’s it. depositions or admissions as required by Section 3. Mrs. This is yet another indication that respondents presented a fictitious defense because. What is your point here? Does the estate of Marcos own anything of the $360 million subject of this case. Jr. and Memoranda of Mrs. Marcelo that the US$360 million more or less subject matter of the instant lawsuit as allegedly obtained from the various Swiss Foundations do not belong to the estate of Marcos or to Imelda Marcos herself. Once more. respondents merely made general denials without alleging facts which would have been admissible in evidence at the hearing. Rule 35 of the 1997 Rules on Civil Procedure: x x x The adverse party may serve opposing affidavits. Your Honor. Marcos insists in her memorandum dated October 21. MARCELO: Yes. it was again not accompanied by affidavits. Marcos and the Marcos children denied ownership of or interest in the Swiss funds: PJ Garchitorena: Make of record that as far as Imelda Marcos is concerned through the statement of Atty. the judgment sought shall be rendered forthwith if the pleadings. PJ Garchitorena: You do not own anything? Atty. depositions and admissions to contradict the sworn declarations in the Republic’s motion only demonstrated that the averments of such opposition were not genuine and therefore unworthy of belief. Marcos and the Marcos children All these pleadings again contained no allegations of facts showing their lawful acquisition of the funds. there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law. Okay. 2000. contrary to petitioner Republic’s allegation that Mrs. except as to the amount of damages. during the pre-trial. and admissions on file. most respectfully manifests: That respondent Imelda R. 1998. That in fact only 10% of the subject matter in the above-entitled case belongs to the estate of the late President Ferdinand E. Anyway we look at it. This was. respondent Marcoses sought to implement the agreed distribution of the Marcos assets. and before this Honorable Court. and now this Court. xxx Atty. Marcos. As to Mrs. In their earlier pleadings. to perplexity. as already pointed out. 1998 filed by MRS. while ostensibly raising important questions or issues of fact. Your Honor. including the Swiss deposits. Mrs. respondents alleged either that they had no knowledge of the existence of the Swiss deposits or that they could no longer remember anything as it happened a long time ago. The “facts” pleaded by respondents. Marcos. SISON: Irene Araneta as heir do (sic) not own any of the amount. . Marcos. to us. if not trying to drag this forfeiture case to eternity. There is no doubt in our mind that they were leading petitioner Republic. respondent Marcoses denied knowledge as well as ownership of the Swiss funds. in reality comprised mere verbiage that was evidently wanting in substance and constituted no genuine issues for trial. Your Honor. Marcos stated that: COMES NOW undersigned counsel for respondent Imelda R. In her Manifestation dated May 26. SISON: I join the position taken by my other compañeros here. Marcos owns 90% of the subject matter of the above-entitled case. during the pre-trial conference. she remembered that it was lawfully acquired.Page 98 of 328 PJ Garchitorena: Counsel for Irene Araneta? Atty. In the Compromise/Supplemental Agreements. Marcos. But. being the sole beneficiary of the dollar deposits in the name of the various foundations alleged in the case. an unequivocal admission of ownership by the Marcoses of the said deposits. We are convinced that the strategy of respondent Marcoses was to confuse petitioner Republic as to what facts they would prove or what issues they intended to pose for the court's resolution. Manifestation dated May 26. 1993 These pleadings of respondent Marcoses presented nothing but feigned defenses. respondent Marcoses have put forth no real defense. General/Supplemental Compromise Agreement dated December 28. to the prejudice of the Republic and ultimately of the Filipino people. Even if on their face the pleadings appear to raise issue. therefore. this Court has encountered cases like this which are either only half-heartedly defended or. depositions or admissions that those issues are not genuine but fictitious. leading to the inescapable conclusion that the matters raised in the Marcoses’ answer were false. if the affidavits. depositions. the movant is entitled to a judgment as a matter of law. thereby failing to raise any genuine issues of fact. if it is established by affidavits. It is a method sanctioned by the Rules of Court for the prompt disposition of a civil action where there exists no serious controversy. A motion for summary judgment is premised on the assumption that the issues presented need not be tried either because these are patently devoid of substance or that there is no genuine issue as to any pertinent fact. under the circumstances. if unaccompanied by any fact which will be admissible in evidence at a hearing. if the semblance of a defense is interposed at all. admissions and affidavits that there are no important questions or issues of fact posed and. thus justifying a summary judgment on the petition for forfeiture. are not sufficient to raise genuine issues of fact and will not defeat a motion for summary judgment. although an answer may on its face appear to tender issues requiring trial. the Court is justified in dispensing with the trial and rendering summary judgment for petitioner. These sworn statements substantiated the ill-gotten nature of the Swiss bank deposits. The theory of summary judgment is that. From the beginning. Summary judgment is a procedural device for the prompt disposition of actions in which the pleadings raise only a legal issue. petitioner Republic attached sworn statements of witnesses who had personal knowledge of the Marcoses' participation in the illegal acquisition of funds deposited in the Swiss accounts under the names of five groups or foundations. In the various annexes to the petition for forfeiture. a candid demonstration of respondents’ good faith should have .Page 99 of 328 We therefore rule that. Under the rules. A summary judgment is one granted upon motion of a party for an expeditious settlement of the case. Under these circumstances. In fact. summary judgment is appropriate when there are no genuine issues of fact requiring the presentation of evidence in a full-blown trial. a trial would have served no purpose at all and would have been totally unnecessary. In their answer and other subsequent pleadings. Time and again. summary judgment is proper. not a genuine issue as to any material fact. depositions and admissions show that such issues are not genuine. it is the law itself which determines when summary judgment is called for. There were no opposing affidavits to contradict the sworn declarations of the witnesses of petitioner Republic. the Marcoses merely made general denials of the allegations against them without stating facts admissible in evidence at the hearing. then summary judgment as prescribed by the rules must ensue as a matter of law. it is only to delay disposition and gain time. mere denials. it appearing from the pleadings. It is certainly not in the interest of justice to allow respondent Marcoses to avail of the appellate remedies accorded by the Rules of Court to litigants in good faith. however. In sum. the plaintiff can move for summary judgment “at any time after the pleading in answer thereto (i. particularly those of the United States where many of our laws and rules were copied. up to the present. at any time after the pleading in answer thereto has been served. it had legally waived whatever right it had to move for summary judgment. move with supporting affidavits.A party against whom a claim. or cross-claim or to obtain a declaratory relief may. Thus. move with supporting affidavits. Since 1991. It has been an incredible charade from beginning to end. depositions or admissions for a summary judgment in his favor as to all or any part thereof. Summary judgment for claimant. No local jurisprudence or authoritative work has touched upon this matter. How else does one construe the phrase "any time after the . when the petition for forfeiture was first filed. in answer to the claim. Without the deceptive reasoning and argumentation. at any time. counterclaim. “the funds were lawfully acquired. . petitioner Republic had bound itself to go to trial on the basis of existing issues. No fixed reglementary period is provided by the Rules. they also claim ownership of 90% of the funds and allege that only 10% belongs preclude it from filing a motion for summary judgment. ." answer has been served?” This issue is actually one of first impression. Rule 35 of the 1997 Rules of Civil Procedure provides: Rule 35 Summary Judgment Section 1.” to the Marcos estate. counterclaim. as to Mrs. 2000.e. In the hope of convincing this Court to rule otherwise. Marcos Jr. depositions or admissions for a summary judgment in his favor upon all or any part thereof. is in order.Page 100 of 328 been made to the court below. all respondents have offered are foxy responses like “lack of sufficient knowledge or lack of privity” or “they cannot recall because it happened a long time ago” or. Marcos. or cross-claim is asserted or a declaratory relief is sought may. contend that "by its positive acts and express admissions prior to filing the motion for summary judgment on March 10. Section 2. This being so. whenever it suits them. this protracted litigation could have ended a long time ago.A party seeking to recover upon a claim. Summary judgment for defending party. (Emphasis ours) Under the rule." We do not think so. respondents Maria Imelda Marcos-Manotoc and Ferdinand R. an examination of foreign laws and jurisprudence. counterclaim or cross-claim) has been served.. The alleged positive acts and express admissions of the petitioner did not But. counterclaim or cross-claim may move for summary judgment at any time after the expiration of 20 days from the commencement of the action or after service of a motion for summary judgment by the adverse party. the plaintiff has to wait for the answer before he can move for summary judgment. and that a party against whom a claim. The Special Term properly held that the answer and the opposing affidavits raised no triable issue. However. a decision was not rendered within sixty days after the final adjournment of the term at which the case was tried. The case was submitted. Under said rule. specifically provide that a motion for summary judgment may not be made until issues have been joined.Page 101 of 328 Rule 56 of the Federal Rules of Civil Procedure provides that a party seeking to recover upon a claim. the plaintiff had waived her right to summary judgment and that the answer and the opposing affidavits raised triable issues. counterclaim or cross-claim is asserted may move for summary judgment at any time. The motion was opposed mainly on the ground that. the motion for summary judgment may be made at any stage of the litigation. Like Rule 113 of the Rules of Civil Practice of New York. and there is no limitation on the power of the court to make such a determination at any stage of the litigation. the New York Supreme Court ruled: "PER CURIAM. that is. Plaintiff introduced her evidence and the defendants rested on the case made by the plaintiff. the motion for summary judgment may be made at any stage of the litigation. after issues have been joined. Muzysh." (emphasis ours) . by proceeding to trial. And like the New York rules. Owing to the serious illness of the trial justice. Rule 113 of the Rules of Civil Practice and the Civil Practice Act prescribe no limitation as to the time when a motion for summary judgment must be made. ours do not provide for a fixed reglementary period within which to move for summary judgment. With the approval of the trial justice. only after an answer has been served. Rule 35. The plaintiff also moved for summary judgment under Rule 113 of the Rules of Civil Practice. meaning. our rules also provide that a motion for summary judgment may not be made until issues have been joined. some rules. The Special Term granted both motions and the defendants have appealed. The object of Rule 113 is to empower the court to summarily determine whether or not a bona fide issue exists between the parties. the New York Supreme Court's interpretation of Rule 113 of the Rules of Civil Practice can be applied by analogy to the interpretation of Section 1. And what exactly does the phrase "at any stage of the litigation" mean? In Ecker vs. the plaintiff moved for a new trial under Section 442 of the Civil Practice Act. after the issues have been joined. of our 1997 Rules of Civil Procedure. The amount due and unpaid under the contract is not in dispute. particularly Rule 113 of the Rules of Civil Practice of New York. Under the New York rule. This being so. No fixed prescriptive period is provided. Faithful therefore to the spirit of the law on summary judgment which seeks to avoid unnecessary expense and loss of time in a trial. plaintiff may move for summary judgment. "any stage of the litigation" means that "even if the plaintiff has proceeded to trial. The fact that petitioner agreed to proceed to trial did not in any way prevent it from moving for summary judgment. Rule 35 of our Rules of Civil Procedure means "at any stage of the litigation. protracted and expensive litigation and encourages the speedy and prompt disposition of cases. Rule 1 of the 1997 Rules of Civil Procedure that the "[r]ules should be liberally construed in order to promote their objective of securing a just. This is rank injustice we cannot tolerate. Respondent Marcoses argue that. we hereby rule that petitioner Republic could validly move for summary judgment any time after the respondents’ answer was filed or. that is. petitioner "waived" its right to summary judgment. this does not preclude him from thereafter moving for summary judgment. the defendant opposed the motion for summary judgment on a ground similar to that raised by the Marcoses. for that matter. A contrary interpretation would go against the very objective of the Rule on Summary Judgment which is to "weed out sham claims or defenses thereby avoiding the expense and loss of time involved in a trial." was ever validly raised by respondent . "that plaintiff had waived her right to summary judgment" by her act of proceeding to trial. as correctly ruled by the New York court." Whenever it becomes evident at any stage of the litigation that no triable issue exists. plaintiff was allowed to move for summary judgment even after trial and submission of the case for resolution. The law looks with disfavor on long. In Ecker." In cases with political undertones like the one at bar. as indeed no genuine issue of fact Marcoses. petitioner moved for summary judgment after pre-trial and before its scheduled date for presentation of evidence. more so should we permit it in the present case where petitioner moved for summary judgment before trial. That is why the law and the rules provide for a number of devices to ensure the speedy disposition of cases. speedy and inexpensive disposition of every action and proceeding." In the case at bar. or that the defenses raised by the defendant(s) are sham or frivolous. at any subsequent stage of the litigation. the phrase "anytime after the pleading in answer thereto has been served" in Section 1. by agreeing to proceed to trial during the pre-trial conference. This interpretation conforms with the guiding principle enshrined in Section 6.Page 102 of 328 On the basis of the aforequoted disquisition. Summary judgment is one of them. Therefore. If. adverse parties will often do almost anything to delay the proceedings in the hope that a future administration sympathetic to them might be able to influence the outcome of the case in their favor. This argument must fail in the light of the New York Supreme Court ruling which we apply by analogy to this case. As a final point. it must be emphasized that laches is not a mere question of time but is principally a question of the inequity or unfairness of permitting a right or claim to be enforced or asserted. It was definitely not because of neglect or inaction that petitioner filed the (second) motion for summary judgment years after respondents' answer to the petition for forfeiture. Nor can estoppel validate an act that contravenes law or public policy. the Marcoses disclaimed ownership of the Swiss deposits. respondents must show not only unjustified inaction but also that some unfair injury to them might result unless the action is barred. We disagree. however. prompting petitioner to file another motion for summary judgment now under consideration by this Court. which prevented petitioner from filing the questioned motion. Petitioner Republic initially filed its motion for summary judgment on October 18. In invoking the doctrine of estoppel by laches. It was the subsequent events that transpired after the answer was filed. therefore. Not being the owners. the doctrine of estoppel or laches does not apply when the government sues as a sovereign or asserts governmental rights. warranting a presumption that the person has abandoned his right or declined to assert it. the Marcoses denied ownership of the Swiss funds. as they claimed. respondents did not have any vested right or interest which could be adversely affected by petitioner's alleged inaction. But even assuming for the sake of argument that laches had already set in. The motion was denied because of the pending compromise agreement between the Marcoses and petitioner. during the pre-trial conference. respondents failed to bear out. But during the pre-trial conference. Estoppel by laches is the failure or neglect for an unreasonable or unexplained length of time to do that which. including the motion for summary judgment. (2) The Propriety of Forfeiture . Equity demands that petitioner Republic should not be barred from pursuing the people's case against the Marcoses. by exercising due diligence. In effect. Thus. therefore. A careful examination of the records.Page 103 of 328 Respondents further allege that the motion for summary judgment was based on respondents' answer and other documents that had long been in the records of the case. estoppel by laches had already set in against petitioner. 1996. by the time the motion was filed on March 10. could or should have been done earlier. In fact. reveals that petitioner was in fact never remiss in pursuing its case against respondent Marcoses through every remedy available to it. This. the principle of laches is one of estoppel because "it prevents people who have slept on their rights from prejudicing the rights of third parties who have placed reliance on the inaction of the original parties and their successors-in-interest". 2000. xxx xxx Sec. the issue of whether or not petitioner Republic was able to prove its case for forfeiture in accordance with the requisites of Sections 2 and 3 of RA 1379 now takes center stage. From the above-quoted provisions of the law. the legitimate income of the public officer. is grossly disproportionate to. That spouses Ferdinand and Imelda Marcos were public officials during the time material to the instant case was never in dispute. hence subject to forfeiture. refer this case to the within three months before any special election.. then the court shall declare such property in question. Provided. in addition. Marcos who once served as a member of the Interim Batasang Pambansa from acquired during his incumbency. Sections 2 and 6 of RA 1379 provide: xxx xxx Section 2. . and by virtue of such judgment the property aforesaid shall become the property of the State. corresponding Executive Department for administrative or criminal action. 6. Hence. Senator. or both. Filing of petition. Judgment – If the respondent is unable to show to the satisfaction of the court that he has lawfully acquired the property in question. if its amount or value is manifestly disproportionate to the official salary and other lawful income of the public officer who owns it. 1965 to February 25. said property shall be presumed prima facie to have been unlawfully acquired.Page 104 of 328 The matter of summary judgment having been thus settled. forfeited in favor of the State. Paragraph 4 of respondent Marcoses' answer categorically admitted the allegations in paragraph 4 of the petition for forfeiture as to the personal circumstances of Ferdinand E. and (2) the extent to which the amount of that money or property exceeds. e. Likewise. i. That no judgment shall be rendered within six months before any general election or The Court may. Marcos as a public official who served without interruption as Congressman. the following facts must be established in order that forfeiture or seizure of the Swiss deposits may be effected: (1) ownership by the public officer of money or property whether it be in his name or otherwise. – Whenever any public officer or employee has acquired during his incumbency an amount or property which is manifestly out of proportion to his salary as such public officer or employee and to his other lawful income and the income from legitimately acquired property. The law raises the prima facie presumption that a property is unlawfully acquired. 1986. respondents admitted in their answer the contents of paragraph 5 of the petition as to the personal circumstances of Imelda R. Senate President and President of the Republic of the Philippines from December 1. from June 1976 to February 1986. Converted to U. or (c) in other stages of .000/year P718.372. The admission may be contradicted only by showing that it was made through palpable mistake or that no such admission was made. The Certification showed that. Hence.583. Marcos and Imelda R.Page 105 of 328 1978 to 1984 and as Metro Manila Governor.750. Rule 129 of the Rules of Court provides that: Section 4.319.43. Marcos had accumulated salaries in the amount of P1.000/year P660.000 and P718. Ferdinand E.33. from 1966 to 1985.570. 1986 issued by then Minister of Budget and Management Alberto Romulo. the total amount had an equivalent value of $304. (b) in the course of the trial either by verbal or written manifestations or stipulations.000/year 1977-1984 at P100. – Judicial admissions – An admission.833.000 Imelda R. their total accumulated salaries amounted to P2. verbal or written.000 P1.288. made by a party in the course of the proceedings in the same case does not require proof. Marcos and Imelda R.570.33. Prescinding from the aforesaid admissions. It is settled that judicial admissions may be made: (a) in the pleadings filed by the parties. as President 1966-1976 at P60. as Minister June 1976-1985 at P75. or a total of P2. concurrently Minister of Human Settlements. Respondent Mrs.000 110. Marcos also admitted in paragraph 10 of her answer the allegations of paragraph 11 of the petition for forfeiture which referred to the accumulated salaries of respondents Ferdinand E.S.000/year 1985 at P110.000 800. Marcos. Marcos.000 In addition to their accumulated salaries from 1966 to 1985 are the Marcos couple’s combined salaries from January to February 1986 in the amount of P30. Marcos. dollars on the basis of the corresponding pesodollar exchange rates prevailing during the applicable period when said salaries were received. The dollar equivalent was arrived at by using the official annual rates of exchange of the Philippine peso and the US dollar from 1965 to 1985 as well as the official monthly rates of exchange in January and February 1986 issued by the Center for Statistical Information of the Bangko Sentral ng Pilipinas.750: Ferdinand E. The combined accumulated salaries of the Marcos couple were reflected in the Certification dated May 27. Section 4. respectively. Besides. and shall also be subject to such other disqualification as may be provided by law. Sec. or practice any profession. As the Act is a penal statute. participate directly or indirectly in the management of any business. or instrumentality thereof including any government owned or controlled corporation during his term of office. paragraphs (c). or instrumentality thereof. Article VIII hereof and may not appear as counsel before any court or administrative body. under the 1973 Constitution. Article IX. Sec. He shall not intervene in any matter before any office of the government for his . pecuniary benefit. its provisions are mandatory and should thus be construed strictly against the petitioner and liberally in favor of respondent Marcoses.Page 106 of 328 judicial proceedings. 11 – No Member of the National Assembly shall appear as counsel before any court inferior to a court with appellate jurisdiction. Their only known lawful income of $304.372.” In fact. was expressly prohibited under the 1973 Constitution: Article VII. under the 1935 Constitution. Ferdinand E. (d) and (e) of RA 1379. Sec. directly or indirectly. Article VII.43 should be held as the only known lawful income of respondents since they did not file any Statement of Assets and Liabilities (SAL). nor may they practice any profession. are deemed admissions of petitioner and respondents. Neither shall he. Marcos as President could not receive “any other emolument from the Government or any of its subdivisions and instrumentalities”. 7 – The Prime Minister and Members of the Cabinet shall be subject to the provision of Section 11. 4(2) – The President and the Vice-President shall not. or in any franchise or special privilege granted by the Government. or in any franchise or special privilege granted by the Government or any other subdivision.43 can therefore legally and fairly serve as basis for determining the existence of a prima facie case of forfeiture of the Swiss funds. be interested financially in any contract with. during their tenure. or be financially interested directly or indirectly in any contract with. Respondents argue that petitioner was not able to establish a prima facie case for the forfeiture of the Swiss funds since it failed to prove the essential elements under Section 3. x x x. Ferdinand E. as in the pre-trial of the case. like the administration of foundations to accumulate funds. Thus. respectively. agency. facts pleaded in the petition and answer. hold any other office except when otherwise provided in this Constitution. as in the case at bar. including any government owned or controlled corporation. or manage any business.372. Likewise. from which their net worth could be determined. his management of businesses. or any subdivision. agency. The sum of $304. as required by law. who are not permitted to contradict them or subsequently take a position contrary to or inconsistent with such admissions. Marcos as President could “not receive during his tenure any other emolument from the Government or any other source. It is of record that respondents judicially admitted that the money deposited with the Swiss banks belonged to them. Further. The respondent Marcos couple did not file any Statement of Assets and Liabilities (SAL) from which their net worth could be determined. . And if indeed there was such other lawful income. the General/Supplemental Agreements. Marcos' Manifestation and Constancia dated May 5. respondents unwittingly admitted their ownership thereof. 1999. in determining prima facie evidence of illgotten wealth.Page 107 of 328 We hold that it was not for petitioner to establish the Marcoses’ other lawful income or income from legitimately acquired property for the presumption to apply because. In their answer. 1999. the admissions made by them in their various pleadings and documents were valid. Mrs. We agree with petitioner that respondent Marcoses made judicial admissions of their ownership of the subject Swiss bank deposits in their answer. Section 11. Their failure to file their SAL was in itself a violation of law and to allow them to successfully assail the Republic for not presenting their SAL would reward them for their violation of the law. the truth being that respondents' aforesaid properties were lawfully acquired. 1 and 2 must be out of proportion to the known lawful income of such persons. As discussed earlier. known lawful income of respondents. (emphasis supplied) By qualifying their acquisition of the Swiss bank deposits as lawful. Respondent Mrs. and the Undertaking dated February 10. Paragraph 22 of respondents' answer stated: 22. respondents should have specifically stated Insofar as petitioner Republic was concerned. the value of the accumulated assets. the latter were in a better position to know if there were such other sources of lawful income. aside from admitting the existence of the subject funds. Section 9 of the PCGG Rules and Regulations provides that. contrary to the claim of respondents. Rule 8 of the 1997 Rules of Civil Procedure provides that material averments in the complaint shall be deemed admitted when not specifically denied. it was enough to specify the the same in their answer. as between petitioner and respondents. properties and other material possessions of those covered by Executive Order Nos. Respondents specifically DENY PARAGRAPH 23 insofar as it alleges that respondents clandestinely stashed the country's wealth in Switzerland and hid the same under layers and layers of foundations and corporate entities for being false. respondents likewise admitted ownership thereof. Marcos also admitted ownership of the Swiss bank deposits by failing to deny under oath the genuineness and due execution of certain actionable documents bearing her signature attached to the petition. We take note of the fact that the Associate Justices of the Sandiganbayan were unanimous in holding that respondents had made judicial admissions of their ownership of the Swiss funds. the parties hereby agree that the PRIVATE PARTY shall be entitled to the equivalent of 25% of the amount that may be eventually withdrawn from said $356 million Swiss deposits. respondents cannot now deny that they voluntarily admitted owning the subject Swiss funds. While the Supplemental Agreement warranted. The stipulations set forth in the General and Supplemental Agreements undeniably indicated the manifest intent of respondents to enter into a compromise with petitioner. respondents’ willingness to agree to an amicable settlement with the Republic only affirmed their ownership of the Swiss deposits for the simple reason that no person would acquiesce to any concession over such huge dollar deposits if he did not in fact own them. The whereas clause in the General Agreement declared that: WHEREAS. provides that “in civil cases. (2) the PCGG’s commitment to exempt from all forms of taxes the properties to be retained by the Marcos heirs was against the Constitution.” We find no merit in this contention. The reasons relied upon by the Court never in the least bit even touched on the veracity and truthfulness of respondents’ admission with respect to their Besides. The declaration of nullity of said agreements was premised on the following constitutional and statutory infirmities: (1) the grant of criminal immunity to the Marcos heirs was against the law. The following observation of Sandiganbayan Justice Catalino Castañeda. that: In consideration of the foregoing. the FIRST PARTY has obtained a judgment from the Swiss Federal Tribunal on December 21. an offer of compromise is not an admission of any liability and is not admissible in evidence against the offeror. They insist that nothing in those agreements could thus be admitted in evidence against them because they stood on the same ground as an accepted offer which. under Section 27. 2000 could not have been better said: . and (3) the government’s undertaking to cause the dismissal of all cases filed against the Marcoses pending before the Sandiganbayan and other courts encroached on the powers of the judiciary. Rule 130 of the 1997 Rules of Civil Procedure. Corollarily. inter alia. notwithstanding the fact that the agreements themselves were later declared null and void. that the $356 million belongs in principle to the Republic of the Philippines provided certain conditionalities are met.Page 108 of 328 The General and Supplemental Agreements executed by petitioner and respondents on December 28. Respondents make much capital of the pronouncement by this Court that the General and Supplemental Agreements were null and void. but even after 7 years. 1990. Jr. the FIRST PARTY has not been able to procure a final judgment of conviction against the PRIVATE PARTY. ownership of the Swiss funds. 1993 further bolstered the claim of petitioner Republic that its case for forfeiture was proven in accordance with the requisites of Sections 2 and 3 of RA 1379. in the decision dated September 19. having made certain admissions in those agreements. ’s formal declarations in open court: ATTY. FERNANDO: What was your reaction when Atty. Mesina informed you of this possibility? F. we are very much always in search of resolution to the problem of the family and any approach that has been made us. FERNANDO: In connection with the ongoing talks to compromise the various cases initiated by PCGG against your family? F. the admissions made in said agreements. we have entertained.: My reaction to all of these approaches is that I am always open.Page 109 of 328 x x x The declaration of nullity of the two agreements rendered the same without legal effects but it did not detract from the admissions of the respondents contained therein. The discussions that led up to the compromise agreement were initiated by our then counsel Atty. or incompetency of a party thereto. did you ever have any meetings with PCGG Chairman Magtanggol C. I have had very many meetings in fact with Chairman. or by reason of not being signed. MARCOS. MARCOS. remain binding on the respondents. what were the true amounts of the assets in the bank? . xxx xxx xxx ATTY. Otherwise stated. Ferdinand Jr. FERNANDO: Mr. xxx xxx xxx We quote the salient portions of ATTY. ATTY. executed or delivered. FERNANDO: Basically. although they may be unenforceable. either by reason of illegality. And so my reaction was the same as what I have always … why not? Maybe this is the one that will finally put an end to this problem. we are always open.: Yes. 1998 also lent credence to the allegations of petitioner Republic that respondents admitted ownership of the Swiss bank accounts. Simeon Mesina x x x. during the hearing on the motion for the approval of the Compromise Agreement on April 29. contracts have been held as competent evidence of admissions. Jr. Accordingly. JR. MARCOS. Gunigundo? F. The testimony of respondent Ferdinand Marcos. FERNANDO: Would you recall when the first meeting occurred? PJ GARCHITORENA: In connection with what? ATTY. JR. A written statement is nonetheless competent as an admission even if it is contained in a document which is not itself effective for the purpose for which it is made. Marcos.: The nature of our meetings was solely concerned with negotiations towards achieving some kind of agreement between the Philippine government and the Marcos family. as quoted above. JR. what the mechanism would be. any assets. such concession has the force of a judicial admission.Page 110 of 328 PJ GARCHITORENA: So. taken in context and in their entirety. xxx xxx xxx What did you do in other words. being the sole beneficiary of the dollar deposits in the name of the various foundations alleged in the case. she failed to specifically deny under oath the authenticity . Marcos' manifestation is as bright as sunlight.: Well. JR. And her claim that she is merely a beneficiary of the Swiss deposits is belied by her own signatures on the appended copies of the documents substantiating her ownership of the funds in the name of the foundations. what the bank accounts. testimony are receivable against him. as a witness. As already mentioned. The rule is that the testimony on the witness stand partakes of the nature of a formal judicial admission when a party testifies clearly and unequivocally to a fact which is peculiarly within his own knowledge. In her Manifestation dated May 26. Admissions of a party in his If a party. 1998. after being apprised of this contract in PJ GARCHITORENA: x x x connection herewith? F. Ferdinand Jr. Marcos owns 90% of the subject matter of the above-entitled case. I was a little surprised because we hadn’t really discussed the details of the transfer of the funds. basically. This was doubtlessly an acknowledgment of ownership on their part. But nevertheless. MARCOS. I was happy to see that as far as the PCGG is concerned. Marcos. we are talking about liquid assets here? Just Cash? F. MARCOS.: I assumed that we are beginning to implement the agreement because this was forwarded through the Philippine government lawyers through our lawyers and then.’s testimony that the Marcos family agreed to negotiate with the Philippine government in the hope of finally putting an end to the problems besetting the Marcos family regarding the Swiss accounts. respondent Imelda Marcos furthermore revealed the following: That respondent Imelda R. subsequently.'s pronouncements. to me. Anything that was under the Marcos name in any of the banks in Switzerland which may necessarily be not cash. That in fact only 10% of the subject matter in the above-entitled case belongs to the estate of the late President Ferdinand E. were a confirmation of respondents’ recognition of their ownership of the Swiss bank deposits. It is apparent from Ferdinand Jr. xxx xxx xxx Respondents’ ownership of the Swiss bank accounts as borne out by Mrs. deliberately concedes a fact. that the agreement was perfected and that we were beginning to implement it and that was a source of satisfaction to me because I thought that finally it will be the end. JR. the Republic may yield to the Marcoses. 1999. . its dissipation or misappropriation by the petitioner looms as a distinct possibility. Such display of deep. in the interest of peace. the Marcos children revealed their ownership of the said deposits. both parties have an inchoate right of ownership over the account. reconciliation and unity. The Republic’s cause of action over the full amount is its forfeiture in favor of the government if found to be ill-gotten. Imelda Marcos prayed for the approval of the Compromise Agreement and the subsequent release and transfer of the $150 million to the rightful owner. Likewise. If it turns out that the account is of Conversely. 1998 asking the Sandiganbayan to place the res (Swiss deposits) in custodia legis: 7. Ferdinand Marcos. respectively. Rule 8 of the 1997 Rules of Civil Procedure. personal interest can only come from someone who believes that he has a marked and intimate right over the considerable dollar deposits. xxx xxx Therefore. the above statements were indicative of Imelda’s admission of the Marcoses’ ownership of the Swiss deposits as in fact “the Marcoses defend that it (Swiss deposits) is a legitimate (Marcos) asset. and Maria Irene Marcos-Araneta filed a motion on May 4. was tantamount to a judicial admission of the genuineness and due execution of said instruments. the Marcoses defend that it is a legitimate asset. much less the genuineness and due execution. in her Constancia dated May 6. in accordance with Section 8. Republic. in firm abidance thereby. the Marcoses must yield to the Consistent with the foregoing. She further made the following manifestations: xxx xxx xxx 2. lawful origin. without prejudice to the final outcome of the litigation respecting the ownership of the remainder.Page 111 of 328 of such documents. hereby affirms her agreement with the Republic for the release and transfer of the US Dollar 150 million for proper disposition. of the instruments bearing her signature. the prevailing situation is fraught with danger! Unless the aforesaid Swiss deposits are placed in custodia legis or within the Court’s protective mantle. Truly. (underscoring supplied) xxx 3. Jr.” On the other hand. and the Marcoses having committed themselves to helping the less fortunate. by filing said motion. On the other hand. respondents Maria Imelda Marcos-Manotoc. defendant MADAM IMELDA ROMUALDEZ MARCOS. especially those involving “William Saunders” and “Jane Ryan” which actually referred to Ferdinand Marcos and Imelda Marcos. Again. That failure of Imelda Marcos to specifically deny the existence. Indeed. 4. assigning and or waiving US$150 million of the funds held in escrow under the Escrow Agreements dated August 14. whether an objection is interposed by the adverse party or not. desires to assist in the satisfaction of the judgment awards of said human rights victims-plaintiffs. 1997. and January 8. The individual and separate admissions of each respondent bind all of them pursuant to Sections 29 and 31. individually and totally. Rule 129 of the Rules of Court: SEC. We analyzed. the evidence of the parties. In the absence of a compelling reason to the contrary. is not usually done by this Court.Page 112 of 328 Lastly. 1998. This Court carefully scrutinized the proofs presented by the parties. All told. assign and/or waive all its rights and interests over said US$150 million to the aforementioned human rights victims-plaintiffs. although the Republic is not obligated to do so under final judgments of the Swiss courts dated December 10 and 19. does not require proof.” The Court is fully aware of the relevance. we considered and examined. made by a party in the course of the proceedings in the same case. This doctrine is embodied in Section 4. by authority of the rules and jurisprudence. Rule 130 of the Rules of Court: The subject Undertaking brought to light their readiness to pay the human rights victims out of the funds held in escrow in the . PNB. The admission may be contradicted only by showing that it was made through palpable mistake or that no such admission was made. the Undertaking entered into by the PCGG. the Republic of the Philippines sympathizes with the plight of the human rights victimsplaintiffs in the aforementioned litigation through the Second Party. ─ An admission. the PNB and the Marcos foundations on February 10. and that all proofs submitted by him contrary thereto or inconsistent therewith should be ignored. 1995. confirmed the Marcoses’ ownership of the Swiss bank deposits. the foregoing disquisition negates the claim of respondents that “petitioner failed to prove that they acquired or own the Swiss funds” and that “it was only by arbitrarily isolating and taking certain statements made by private respondents out of context that petitioner was able to treat these as judicial admissions. the Third Party is likewise willing to release. Judicial admissions. respondents’ judicial admission of ownership of the Swiss deposits is definitely binding on them. verbal or written. by releasing. Owing to the far-reaching historical and political implications of this case. It stated: WHEREAS. materiality and implications of every pleading and document submitted in this case. WHEREAS. even if it might have bordered on factual adjudication which. We have always adhered to the familiar doctrine that an admission made in the pleadings cannot be controverted by the party making such admission and becomes conclusive on him. 1999. assessed and weighed them to ascertain if each piece of evidence rightfully qualified as an admission. There is no doubt in our mind that respondent Marcoses admitted ownership of the Swiss bank deposits. Admission by co-partner or agent. .Page 113 of 328 SEC. declaration. Hence. And where several co-parties to the record are jointly interested in the subject matter of the controversy. said property shall be presumed prima facie to have been unlawfully acquired. Consequently. an admission of one in privity with a party to the record is competent. and (3) said amount is manifestly out of proportion to his salary as such public officer or employee and to his other lawful income and the income from legitimately acquired property. Section 2 of RA 1379 explicitly states that “whenever any public officer or employee has acquired during his incumbency an amount of property which is manifestly out of proportion to his salary as such public officer or employee and to his other lawful income and the income from legitimately acquired property. Respondents insist that the Sandiganbayan is correct in ruling that petitioner Republic has failed to establish a prima facie case for the forfeiture of the Swiss deposits. the first element is clearly extant. ─ The act or declaration of a partner or agent of the party within the scope of his authority and during the existence of the partnership or agency. to say the least. The sudden turn-around of the Sandiganbayan was really strange. or other person jointly interested with the party. It is undisputed that spouses Ferdinand and Imelda Marcos were former public officers. In fact. There is proof of the existence and ownership of these assets and properties and it suffices to comply with the second element. The Marcos couple indubitably acquired and owned properties during their term of office. The second element deals with the amount of money or property acquired by the public officer during his incumbency. is evidence against the former. ─ Where one derives title to property from another. or omission of the latter. the five groups of Swiss accounts were admittedly owned by them. Admission by privies. Without doubt. while holding the title. 31. x x x” The elements which must concur for this prima facie presumption to apply are: (1) the offender is a public officer or employee. may be given in evidence against such party after the partnership or agency is shown by evidence other than such act or declaration. in relation to the property. 29. as its findings and conclusions were not borne out by the voluminous records of this case. joint debtor. privity exists among the respondents in this case. SEC. the term “privity of estate” generally denoting a succession in rights. (2) he must have acquired a considerable amount of money or property during his incumbency. the act. the admission of one is competent against all. The same rule applies to the act or declaration of a joint owner. The declarations of a person are admissible against a party whenever a “privity of estate” exists between the declarant and the party. We disagree. Marcos argues that the foreign foundations should have been impleaded as they were indispensable parties without whom no complete determination of the issues could be made. She asserts that the failure of petitioner Republic to implead the foundations rendered the judgment void as the joinder of indispensable parties was a sine qua non exercise of judicial power. that the total amount of the Swiss deposits was considerably out of proportion to the known lawful income of the Marcoses. Considering. the noninclusion of the foreign foundations violated the conditions prescribed by the Swiss government regarding the deposit of the funds in escrow.43 during their incumbency as government officials. It is the proof of this third element that is crucial in determining whether a prima facie presumption has been established in this case. the burden of proof was on the respondents to dispute this presumption and show by clear and convincing evidence that the Swiss deposits were lawfully acquired and that they had other legitimate sources of income. an . – Any accumulation of assets.372. whose value is out of proportion to their known lawful income is prima facie deemed ill-gotten wealth. money or property is manifestly out of proportion to the public officer’s salary and his other lawful income. and other material possessions of those persons covered by Executive Orders No. Rule 3 of the 1997 Rules of Civil Procedure. it must stand as proved. Furthermore. Otherwise stated. way beyond their aggregate legitimate income of only US$304. Indeed. 1 and No. The Court finds that petitioner Republic did not err in not impleading the foreign foundations. properties. 2. provides for the compulsory joinder of indispensable parties. We believe petitioner was able to establish the prima facie presumption that the assets and properties acquired by the Marcoses were manifestly and patently disproportionate to their aggregate salaries as public officials. therefore. Section 9 of the PCGG Rules and Regulations states: Prima Facie Evidence. petitioner presented enough evidence to convince us that the Marcoses had dollar deposits amounting to US $356 million representing the balance of the Swiss accounts of the five foundations. an amount way.Page 114 of 328 The third requirement is met if it can be shown that such assets. Generally. Section 7. Respondent Mrs. A presumption is prima facie proof of the fact presumed and. the presumption that said dollar deposits were unlawfully acquired was duly established. It was sufficient for the petition for forfeiture to state the approximate amount of money and property acquired by the respondents. taken from Rule 19b of the American Federal Rules of Civil Procedure. unless the fact thus prima facie established by legal presumption is disproved. deprived them of their day in court and denied them their rights under the Swiss constitution and international law. Petitioner Republic presented not only a schedule indicating the lawful income of the Marcos spouses during their incumbency but also evidence that they had huge deposits beyond such lawful income in Swiss banks under the names of five different foundations. and their total government salaries. if the decree will have an injurious effect upon his interest. Thus. The directive given by the Swiss court for the foundations to participate in the proceedings was for the purpose of protecting whatever nominal interest they might have had in the assets as formal owners. Viewed against this admission. Their non-participation in the proceedings did not prevent the court from deciding the case on its merits and according full relief to petitioner Republic. or if the final determination of the controversy in his absence will be inconsistent with equity and good conscience. must be given an opportunity to participate in the proceedings hinged on the assumption that they owned a nominal share of the assets. the foreign foundations were not indispensable parties. though such judgment is not binding on the non-joined party. It negated whatever illusion there was. There are two essential tests of an indispensable party: (1) can relief be afforded the plaintiff without the presence of the other party? and (2) can the case be decided on its merits without prejudicing the rights of the other party? There is. the court is not divested of its power to render a decision even in the absence of indispensable parties. But inasmuch as their ownership was subsequently repudiated by Imelda Marcos. However. they could no longer be considered as indispensable parties and their participation in the proceedings became unnecessary. she cannot now argue that the ruling of the Sandiganbayan violated the conditions set by the Swiss court. . In the present case. The rulings of the Swiss court that the foundations. however. that the foreign foundations owned even a nominal part of the assets in question. The admission of respondent Imelda Marcos only confirmed what was already generally known: that the foundations were established precisely to hide the money stolen by the Marcos spouses from petitioner Republic. as formal owners. Thus. if the court cannot render justice between the parties in his absence. no fixed formula for determining who is an indispensable party. and if this interest is such that it cannot be separated from that of the parties to the suit. Marcos herself. The judgment ordering the return of the $356 million was neither inimical to the foundations’ interests nor inconsistent with equity and good conscience. if any. An indispensable party has been defined as one: [who] must have a direct interest in the litigation.Page 115 of 328 indispensable party must be impleaded for the complete determination of the suit. there was an admission by respondent Imelda Marcos in her May 26. But this was already refuted by no less than Mrs. this can only be determined in the context and by the facts of the particular suit or litigation. failure to join an indispensable party does not divest the court of jurisdiction since the rule regarding indispensable parties is founded on equitable considerations and is not jurisdictional. 1998 Manifestation before the Sandiganbayan that she was the sole beneficiary of 90% of the subject matter in controversy with the remaining 10% belonging to the estate of Ferdinand Marcos. the failure of petitioner to implead them was a curable error. warrant identifying the corporations in question with the person who formed or made use of them to give the color or appearance of lawful. slight reflection would nevertheless lead to the conclusion that the defect is not fatal. as held in the previously cited case of Republic vs. does not. no cause of action against them and no ground to implead them as defendants in said actions. and there is. Rule 5 of the Rules of Court [specifying the remedy of amendment during trial to authorize or to conform to the evidence]. the foreign foundations here were set up to conceal the illegally acquired funds of the Marcos spouses. that the foundations were indispensable parties. fraud or other illicit conduct – in other words. absent any other particular wrongdoing on their part… Such showing of having been formed with. Thus.. their creation or organization was merely the result of their members’ (or stockholders’) manipulations and maneuvers to conceal the illegal origins of the assets or monies invested therein. Rule 20 [governing amendments before trial]. asportation.g. as where said firms were allegedly used. they are simply the res in the actions for the recovery of illegally acquired wealth. Rule 3 of . but are not themselves guilty of misappropriation. but one correctible under applicable adjective rules – e. Sandiganbayan. In this light.. Section 1. of the embezzlement. Distinguished in terms of juridical personality and legal culpability from their erring members or stockholders. said corporations are not themselves guilty of the sins of the latter.Page 116 of 328 In Republic vs. set out in Section 11. however. their impleading is not proper on the strength alone of their having been formed with ill-gotten funds. not so as place on the Government the onus of impleading the former with the latter in actions to recover such wealth. in principle.” Just like the corporations in the aforementioned case. the res thereof – there is no need to implead them either. this Court ruled that impleading the firms which are the res of the action was unnecessary: “And as to corporations organized with ill-gotten wealth. that gave rise to the Government’s cause of action for recovery. etc. without more. and actively cooperated with the defendants. the companies themselves are not the object or thing involved in the action. Assuming arguendo. Sandiganbayan: “Even in those cases where it might reasonably be argued that the failure of the Government to implead the sequestered corporations as defendants is indeed a procedural abberation. in relation to the rule respecting omission of so-called necessary or indispensable parties. etc. they were simply the res in the action for recovery of ill-gotten wealth and did not have to be impleaded for lack of cause of action or ground to implead them. innocent acquisition to illegally amassed wealth – at the least. Section 10. or having received ill-gotten funds.. however strong or convincing. Indeed. as instruments or conduits for conversion of public funds and property or illicit or fraudulent obtention of favored government contracts. Page 117 of 328 the Rules of Court. The rule on joinder of indispensable parties is founded on equity. 6. through motion or on order of the court on its own initiative. where it appears that the complaint otherwise indicates their identity and character as such indispensable parties. Mere delay in filing the joinder motion does not necessarily result in the waiver of the right as long as the delay is excusable. she should have moved for their inclusion. amendments of the complaint in order to implead them should be freely allowed. It prohibits the dismissal of a suit on the ground of nonjoinder or misjoinder of parties and allows the amendment of the complaint at any stage of the proceedings. The court had jurisdiction to render judgment which. If she really felt that she could not be granted full relief due to the absence of the foreign foundations. such cases do not jibe with the matter at hand. jurisprudence on the Federal Rules of Procedure. Rule 3 on indispensable parties was copied. since their presence and participation is essential to the very life of the action. Instead she assailed the judgment rendered. even in the absence of indispensable parties. She never did. Rule 3 of the 1997 Rules of Civil Procedure. particularly in the case of indispensable parties. the Swiss deposits should be considered ill-gotten wealth and forfeited in favor of the State in accordance with Section 6 of RA 1379: SEC. Judgment. And the spirit of the law is reflected in Section 11. for without them no judgment may be rendered. and by virtue of such judgment the property aforesaid shall become property of the State x x x. respondent Mrs. Likewise. respondent Marcoses failed to justify the lawful nature of their acquisition of the said assets. THE FAILURE TO PRESENT AUTHENTICATED TRANSLATIONS OF THE SWISS DECISIONS . In the face of undeniable circumstances and the avalanche of documentary evidence against them. The better view is that non-joinder is not a ground to dismiss the suit or annul the judgment. in fact even after rendition of judgment by this Court. even on appeal. It is relevant in this context to advert to the old familiar doctrines that the omission to implead such parties “is a mere technical defect which can be cured at any stage of the proceedings even after judgment”. from which our Section 7. allows the joinder of indispensable parties even after judgment has been entered if such is needed to afford the moving party full relief. Hence. then the court shall declare such property forfeited in favor of the State. was binding on all the parties before it though not on the absent party.─ If the respondent is unable to show to the satisfaction of the court that he has lawfully acquired the property in question. Marcos cannot correctly argue that the judgment rendered by the Sandiganbayan was void due to the non-joinder of the foreign foundations. Thus. which was allowable at any stage of the proceedings. and that.” Although there are decided cases wherein the non-joinder of indispensable parties in fact led to the dismissal of the suit or the annulment of judgment. RAOULLE OSEN FERRER. B. 2002. PAULYN MAY DUMAN. PROF. The assailed Resolution of the Sandiganbayan dated January 31. HARRY C. the petition is hereby GRANTED. are hereby forfeited in favor of petitioner Republic of the Philippines. JR. What is important is our own assessment of the sufficiency of the evidence to rule in favor of either petitioner Republic or respondent Marcoses. MARIA LUISA MANALAYSAY. MAGALLONA. SHERYL BALOT. In this instance. EDAN MARRI CAÑETE. the Sandiganbayan’s decision was not dependent on the determination of the Swiss courts. JAKLYN HANNA PINEDA. neither is this Court’s.175. MICHAEL OCAMPO. RUBY AMOR BARRACA. The State 1. Ermita. The release of the Swiss funds held in escrow in the PNB is dependent solely on the decision of this jurisdiction that said funds belong to the petitioner Republic. JAMES MARK TERRY . WILLIAM RAGAMAT. 1999 when he denied the motion to release US$150 Million to the human rights victims. plus interest. Magallona v. IRISH KAY KALAW. VALERIE PAGASA BUENAVENTURA. VANN ALLEN DELA CRUZ. VOLTAIRE ALFERES. 655 SCRA 77 (2011) EN BANC [G. AKBAYAN PARTY-LIST REP. RISA HONTIVEROS. ENRIK FORT REVILLAS. ANNA MARIE CECILIA GO. petitioner Republic contends that the Honorable Sandiganbayan Presiding Justice Francis Garchitorena committed grave abuse of discretion in reversing himself on the ground that the original copies of the authenticated Swiss decisions and their authenticated translations were not submitted to the court a quo. For that matter. MERLIN M. ROQUE. CARLA REGINA GREPO. While we are in reality perplexed by such an incomprehensible change of heart. GIRLIE FERRER. ALITHEA BARBARA ACAS.R No. 187167: August 16. AND UNIVERSITY OF THE PHILIPPINES COLLEGE OF LAW STUDENTS. FRANCIS ALVIN ASILO. CZARINA MAY ALTEZ. In short.60 as of January 31. Earlier PJ Garchitorena had quoted extensively from the unofficial translation of one of these Swiss decisions in his ponencia dated July 29. SHARON ESCOTO.373. RODRIGO FAJARDO III. 2011] PROF. MARY ANN JOY LEE. MARICAR RAMOS. The presentation of the authenticated translations of the original copies of the Swiss decision was not de rigueur for the public respondent to make findings of fact and reach its conclusions.. RENE DELORINO. JOSE JAVIER BAUTISTA. WHEREFORE. 2002 is SET ASIDE. the evidence on hand tilts convincingly in favor of petitioner Republic. ROMINA BERNARDO. The Swiss deposits which were transferred to and are now deposited in escrow at the Philippine National Bank in the estimated aggregate amount of US$658. despite the absence of the authenticated translations of the Swiss decisions.Page 118 of 328 Finally. there might nevertheless not be any real need to belabor the issue. MIGUEL RAFAEL MUSNGI. namely: (1) RA 9522 reduces Philippine maritime territory. and contour of baselines of archipelagic States like the Philippines [7] and sets the deadline for the filing of application for the extended continental shelf. JOHANN FRANTZ RIVERA IV. UNCLOS III prescribes the water-land ratio." [9] as the case may be. RESPONDENTS. Congress passed Republic Act No. Thus. ALBERTO ROMULO. HON. ROLANDO ANDAYA. MELISSA CHRISTINA SANTOS. DIONY VENTURA." the breadth of which. HON. MARIA ESTER VANGUARDIA. among others. This original action for the writs of certiorari and prohibition assails the constitutionality of Republic Act No. [10] embodying the terms of the Treaty of Paris [11] and ancillary treaties. the sovereign right of States parties over their "territorial sea. in their respective capacities as "citizens. as "regimes of islands" whose islands generate their own applicable maritime zones. PETITIONERS. was left undetermined. HON. in violation of Article 1 of the 1987 Constitution. NICHOLAS SANTIZO. In March 2009. VS.[8] Complying with these requirements. namely. IN HIS CAPACITY AS ADMINISTRATOR OF THE NATIONAL MAPPING & RESOURCE INFORMATION AUTHORITY.[12] and (2) RA 9522 opens the country's waters . Petitioners. assail the constitutionality of RA 9522 on two principal grounds. optimized the location of some basepoints around the Philippine archipelago and classified adjacent territories. IN HIS CAPACITY AS EXECUTIVE SECRETARY. 9522[1] (RA 9522) adjusting the country's archipelagic baselines and classifying the baseline regime of nearby territories.Page 119 of 328 RIDON. The change was prompted by the need to make RA 3046 compliant with the terms of the United Nations Convention on the Law of the Sea (UNCLOS III). the Kalayaan Island Group (KIG) and the Scarborough Shoal. and logically. Congress amended RA 3046 by enacting RA 9522. IN HIS CAPACITY AS SECRETARY OF THE DEPARTMENT OF FOREIGN AFFAIRS. 5446 [RA 5446]) correcting typographical errors and reserving the drawing of baselines around Sabah in North Borneo. the reach of the Philippine state's sovereign power. EDUARDO ERMITA. 3046 (RA 3046) [2] demarcating the maritime baselines of the Philippines as an archipelagic State. save for legislation passed in 1968 (Republic Act No. CRISTINE MAE TABING. CHRISTIAN RIVERO. VANESSA ANNE TORNO. HON. HILARIO DAVIDE. JR. taxpayers or x x x legislators.. professors of law. the statute now under scrutiny. however. length. DIANNE MARIE ROA.[3] This law followed the framing of the Convention on the Territorial Sea and the Contiguous Zone in 1958 (UNCLOS I). [6] Among others. IN HIS CAPACITY AS REPRESENTATIVE OF THE PERMANENT MISSION OF THE REPUBLIC OF THE PHILIPPINES TO THE UNITED NATIONS. [5] which the Philippines ratified on 27 February 1984. [4] codifying. AND MARCELINO VELOSO III. In 1961. law students and a legislator. AND HON. RA 9522 shortened one baseline. IN HIS CAPACITY AS SECRETARY OF THE DEPARTMENT OF BUDGET AND MANAGEMENT. RA 3046 remained unchanged for nearly five decades. domestically. Attempts to fill this void during the second round of negotiations in Geneva in 1960 (UNCLOS II) proved futile. Whether petitioners possess locus standi to bring this suit. The Ruling of the Court . and damaging marine resources. Commenting on the petition. We left unacted petitioner’s prayer for an injunctive writ. in violation of relevant constitutional provisions. On the merits. The Issues The petition raises the following issues: 1. respondents defended RA 9522 as the country's compliance with the terms of UNCLOS III.Page 120 of 328 landward of the baselines to maritime passage by all vessels and aircrafts. Respondents also question the normative force. undermining Philippine sovereignty and national security. environment and economic interests or relinquish the Philippines’ claim over Sabah. petitioners contend that RA 9522's treatment of 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. under international law. of petitioners' assertion that what Spain ceded to the United States under the Treaty of Paris were the islands and all the waters found within the boundaries of the rectangular area drawn under the Treaty of Paris. On the merits. contravening the country's nuclear-free policy. [13] In addition. whether RA 9522 is unconstitutional. respondent officials raised threshold issues questioning (1) the petition's compliance with the case or controversy requirement for judicial review grounded on petitioners' alleged lack of locus standi and (2) the propriety of the writs of certiorari and prohibition to assail the constitutionality of RA 9522.its failure to reference either the Treaty of Paris or Sabah and its use of UNCLOS III's framework of regime of islands to determine the maritime zones of the KIG and the Scarborough Shoal. preserving Philippine territory over the KIG or Scarborough Shoal. Preliminarily 1. Whether the writs of certiorari and prohibition are the proper remedies to assail the constitutionality of RA 9522. and 2. 2. petitioners facially attack RA 9522 for what it excluded and included . [14] To buttress their argument of territorial diminution. Respondents add that RA 9522 does not undermine the country's security. while having no bearing on the personal interests of the petitioners. we have. thus satisfying one of the requirements for granting citizenship standing. On the merits. Indeed. viewed the writs of certiorari and prohibition as proper remedial vehicles to test the constitutionality of statutes. owing to the peculiar nature of RA 9522. [17] The Writs of Certiorari and Prohibition Are Proper Remedies to Test the Constitutionality of Statutes In praying for the dismissal of the petition on preliminary grounds. respondents seek a strict observance of the offices of the writs of certiorari and prohibition. On the Threshold Issues Petitioners Possess Locus Standi as Citizens Petitioners themselves undermine their assertion of locus standi as legislators and taxpayers because the petition alleges neither infringement of legislative prerogative [15] nor misuse of public funds. quasi-judicial or ministerial powers on the part of respondents and resulting prejudice on the part of petitioners. [16] occasioned by the passage and implementation of RA 9522. however. we recognize petitioners' locus standi as citizens with constitutionally sufficient interest in the resolution of the merits of the case which undoubtedly raises issues of national significance necessitating urgent resolution. we find no basis to declare RA 9522 unconstitutional. [18] Respondents' submission holds true in ordinary civil proceedings. it is understandably difficult to find other litigants possessing "a more direct and specific interest" to bring the suit. non-compliance with the letter of procedural rules notwithstanding. When this Court exercises its constitutional power of judicial review.[20] Issues of constitutional import are sometimes crafted out of statutes which.Page 121 of 328 On the threshold issues. carry such relevance in the life of this nation that the Court inevitably finds itself constrained to take cognizance of the case and pass upon the issues raised. [19] and indeed. we hold that (1) petitioners possess locus standi to bring this suit as citizens and (2) the writs of certiorari and prohibition are proper remedies to test the constitutionality of RA 9522. Nonetheless. . of acts of other branches of government. The statute sought to be reviewed here is one such law. noting that the writs cannot issue absent any showing of grave abuse of discretion in the exercise of judicial. by tradition. the contiguous zone. not to Delineate Philippine Territory Petitioners submit that RA 9522 "dismembers a large portion of the national territory" [21] because it discards the pre-UNCLOS III demarcation of Philippine territory under the Treaty of Paris and related treaties. sea-use rights over maritime zones (i. (Emphasis supplied) . [22] Petitioners’ theory fails to persuade us. .e. the exclusive economic zone and the continental shelf shall be measured from archipelagic baselines drawn in accordance with article 47. among others. Philippine sovereignty over territorial waters extends hundreds of nautical miles around the Philippine archipelago. the exclusive economic zone and the continental shelf. It is a multilateral treaty regulating. exclusive economic zone [200 nautical miles from the baselines]). the territorial waters [12 nautical miles from the baselines]. and continental shelves that UNCLOS III delimits. to serve as geographic starting points to measure the breadth of the maritime zones and continental shelf. UNCLOS III has nothing to do with the acquisition (or loss) of territory. recognizing coastal and archipelagic States' graduated authority over a limited span of waters and submarine lands along their coasts. the contiguous zone. successively encoded in the definition of national territory under the 1935. that Spain supposedly ceded to the United States. embracing the rectangular area delineated in the Treaty of Paris. Measurement of the breadth of the territorial sea. beyond the territorial sea recognized at the time of the Treaty of Paris. On the other hand. baselines laws such as RA 9522 are enacted by UNCLOS III States parties to mark-out specific basepoints along their coasts from which baselines are drawn. Petitioners argue that from the Treaty of Paris' technical description. either straight or contoured. contiguous zone [24 nautical miles from the baselines]. [23] UNCLOS III was the culmination of decades-long negotiations among United Nations members to codify norms regulating the conduct of States in the world's oceans and submarine areas. 1973 and 1987 Constitutions..The breadth of the territorial sea.Page 122 of 328 RA 9522 is Not Unconstitutional RA 9522 is a Statutory Tool to Demarcate the Country's Maritime Zones and Continental Shelf Under UNCLOS III. Article 48 of UNCLOS III on archipelagic States like ours could not be any clearer: Article 48. Petitioners theorize that this constitutional definition trumps any treaty or statutory provision denying the Philippines sovereign control over waters. [28] A comparison of the configuration of the baselines drawn under RA 3046 and RA 9522 and the extent of maritime space encompassed by each law."[24] UNCLOS III and its ancillary baselines laws play no role in the acquisition. Territorial claims to land features are outside UNCLOS III. cession and prescription. "weakens our territorial claim" over that area. the exercise of sovereignty over territorial waters (Article 2). In turn. baselines laws are nothing but statutory mechanisms for UNCLOS III States parties to delimit with precision the extent of their maritime zones and continental shelves. the jurisdiction to enforce customs. lose) territory through occupation. [25] not by executing multilateral treaties on the regulations of sea-use rights or enacting statutes to comply with the treaty's terms to delimit maritime zones and continental shelves. and are instead governed by the rules on general international law. . as petitioners claim. The baselines cannot be drawn from the boundaries or other portions of the rectangular area delineated in the Treaty of Paris. coupled with a reading of the text of RA 9522 and its congressional deliberations. accretion. and the right to exploit the living and non-living resources in the exclusive economic zone (Article 56) and continental shelf (Article 77). not Inconsistent with the Philippines' Claim of Sovereignty Over these Areas Petitioners next submit that RA 9522's use of UNCLOS III's regime of islands framework to draw the baselines. Even under petitioners' theory that the Philippine territory embraces the islands and all the waters within the rectangular area delimited in the Treaty of Paris. enlargement or. this gives notice to the rest of the international community of the scope of the maritime space and submarine areas within which States parties exercise treaty-based rights." prejudicing the livelihood of subsistence fishermen. the baselines of the Philippines would still have to be drawn in accordance with RA 9522 because this is the only way to draw the baselines in conformity with UNCLOS III.Page 123 of 328 Thus.[27] Petitioners add that the KIG's (and Scarborough Shoal's) exclusion from the Philippine archipelagic baselines results in the loss of "about 15. Under traditional international law typology. and sanitation laws in the contiguous zone (Article 33). immigration. States acquire (or conversely. vis-à -vis the Philippines' obligations under UNCLOS III. fiscal. namely. belie this view.000 square nautical miles of territorial waters. and to measure the breadth of the applicable maritime zones of the KIG. [26] RA 9522's Use of the Framework of Regime of Islands to Determine the Maritime Zones of the KIG and the Scarborough Shoal. diminution of territory. but from the "outermost islands and drying reefs of the archipelago. 210 274. taking into account the Treaty of 9522. where there are overlapping exclusive economic zones of opposite or adjacent States.136 32.106 382. as under RA 9522.994 586. increased the Philippines' total maritime space (covering its internal waters. as the map below shows. there will have to be a delineation of maritime boundaries in accordance with UNCLOS III. the KIG and the Scarborough Shoal lie outside of the baselines drawn around the Philippine archipelago. Section 2 of the law commits to text the Philippines' continued claim of sovereignty and jurisdiction over the KIG and the Scarborough Shoal: . Under RA 3046. as Extent of maritime area using RA amended.669 or 166. taking into account UNCLOS Paris' delimitation (in square nautical miles) Internal archipelagic waters Territorial Sea Exclusive Economic Zone TOTAL 440. Petitioners' assertion of loss of "about 15. the reach of the exclusive economic zone drawn under RA 9522 even extends way beyond the waters covered by the rectangular demarcation under the Treaty of Paris. save for at least nine basepoints that RA 9522 skipped to optimize the location of basepoints and adjust the length of one baseline (and thus comply with UNCLOS III's limitation on the maximum length of baselines).435 cartographic fact takes the wind out of petitioners' argument branding RA 9522 as a statutory renunciation of the Philippines' claim over the KIG.858 III (in square nautical miles) 171. assuming that baselines are relevant for this purpose. This undeniable Extent of maritime area using RA 3046. petitioners' argument that the KIG now lies outside Philippine territory because the baselines that RA 9522 draws do not enclose the KIG is negated by RA 9522 itself. by optimizing the location of basepoints.Page 124 of 328 The configuration of the baselines drawn under RA 3046 and RA 9522 shows that RA 9522 merely followed the basepoints mapped by RA 3046. RA 9522. Of course. as shown in the table below:[29] Thus. On the contrary.000 square nautical miles of territorial waters" under RA 9522 is similarly unfounded both in fact and law.216 square nautical miles. [30] Further. territorial sea and exclusive economic zone) by 145. The Philippines would have committed a breach of two provisions of UNCLOS III. This is called contested islands outside our configuration. First." save for three per cent (3%) of the total number of baselines which can reach up to 125 nautical miles. took pains to emphasize the foregoing during the Senate deliberations: What we call the Kalayaan Island Group or what the rest of the world call[] the Spratlys and the Scarborough Shoal are outside our archipelagic baseline because if we put them inside our baselines we might be accused of violating the provision of international law which states: "The drawing of such baseline shall not depart to any appreciable extent from the general configuration of the archipelago. Ngayon." So sa loob ng ating baseline. these outlying areas are located at an appreciable distance from the nearest shoreline of the Philippine archipelago.Page 125 of 328 SEC. Senator Miriam Defensor-Santiago. Article 47 (2) of UNCLOS III requires that "the length of the baselines shall not exceed 100 nautical miles. . 1596 and b) Bajo de Masinloc. Article 47 (3) of UNCLOS III requires that "[t]he drawing of such baselines shall not depart to any appreciable extent from the general configuration of the archipelago." The principal sponsor of RA 9522 in the Senate. tingnan ninyo ang maliit na circle doon sa itaas. itong malaking circle sa ibaba. The baselines in the following areas over which the Philippines likewise exercises sovereignty and jurisdiction shall be determined as "Regime of Islands" under the Republic of the Philippines consistent with Article 121 of the United Nations Convention on the Law of the Sea (UNCLOS): a) The Kalayaan Island Group as constituted under Presidential Decree No. dapat magkalapit ang mga islands. adverse legal effects would have ensued. that is Kalayaan Group or the Spratlys. hindi natin masasabing malapit sila sa atin although we are still allowed by international law to claim them as our own. also known as Scarborough Shoal. 2. (Emphasis supplied) Had Congress in RA 9522 enclosed the KIG and the Scarborough Shoal as part of the Philippine archipelago. [31] Although the Philippines has consistently claimed sovereignty over the KIG [32] and the Scarborough Shoal for several decades. that is Scarborough Shoal. [33] such that any straight baseline loped around them from the nearest basepoint will inevitably "depart to an appreciable extent from the general configuration of the archipelago. We see that our archipelago is defined by the orange line which [we] call[] archipelagic baseline. Dahil malayo ang Scarborough Shoal." Second. The length of the baseline across Moro Gulf (from Middle of 3 Rock Awash to Tongquil Point) is 140. some of the points. 5446. to wit: 1. At least 9 basepoints can be skipped or deleted from the baselines system. any "naturally formed area of land. The selection of basepoints is not optimal. This will enclose an additional 2. which states that "The length of such baselines shall not exceed 100 nautical miles. hindi na sila magkalapit at baka hindi na tatanggapin ng United Nations because of the rule that it should follow the natural configuration of the archipelago . Accordingly. Congress' decision to classify the KIG and the Scarborough Shoal as "`Regime[s] of Islands' under the Republic of the Philippines consistent with Article 121" [36] of UNCLOS III manifests the Philippine State's responsible observance of its pacta sunt servanda obligation under UNCLOS III.Page 126 of 328 Malayo na sila sa ating archipelago kaya kung ilihis pa natin ang dating archipelagic baselines para lamang masama itong dalawang circles. As defined by R. This exceeds the maximum length allowed under Article 47(2) of the [UNCLOS III].A. and not established by geodetic survey methods.[35] Hence. became imperative as discussed by respondents: [T]he amendment of the baselines law was necessary to enable the Philippines to draw the outer limits of its maritime zones including the extended continental shelf in the manner provided by Article 47 of [UNCLOS III].06 nautical miles x x x. far from surrendering the Philippines' claim over the KIG and the Scarborough Shoal. except that up to 3 per cent of the total number of baselines enclosing any archipelago may exceed that length. to optimize the location of basepoints using current maps. the baselines suffer from some technical deficiencies. and in addition." 2.A.195 nautical miles of water. the basepoints were drawn from maps existing in 1968." such as portions of the KIG. The need to shorten this baseline. not on low-water line and drying reefs as prescribed by Article 47.[34] (Emphasis supplied) Similarly. qualifies under the category of "regime of islands." whose islands generate their own applicable maritime zones. which is above water at high tide. [37] . up to a maximum length of 125 nautical miles. 3046. surrounded by water. the length of one baseline that RA 3046 drew exceeded UNCLOS III's limits. particularly along the west coasts of Luzon down to Palawan were later found to be located either inland or on water. as amended by R. 3. Finally. Under Article 121 of UNCLOS III. the Philippines exercises sovereignty over the body of water lying landward of the baselines. The definition of the baselines of the territorial sea of the Philippine Archipelago as provided in this Act is without prejudice to the delineation of the baselines of the territorial sea around the territory of Sabah. [38] Whether referred to as Philippine "internal waters" under Article I of the Constitution [39] or as "archipelagic waters" under UNCLOS III (Article 49 [1]). 1. including overflight. UNCLOS III affirms this: Article 49. of the air space over archipelagic waters and of their bed and subsoil. and the resources contained therein. Legal status of archipelagic waters. keeps open the door for drawing the baselines of Sabah: Section 2. regardless of their depth or distance from the coast. described as archipelagic waters. in violation of the Constitution. including the air space over it and the submarine areas underneath. situated in North Borneo. . The sovereignty of an archipelagic State extends to the waters enclosed by the archipelagic baselines drawn in accordance with article 47. petitioners contend that the law unconstitutionally "converts" internal waters into archipelagic waters.Page 127 of 328 Statutory Claim Over Sabah under RA 5446 Retained Petitioners' argument for the invalidity of RA 9522 for its failure to textualize the Philippines' claim over Sabah in North Borneo is also untenable. Section 2 of RA 5446. hence subjecting these waters to the right of innocent and sea lanes passage under UNCLOS III. over which the Republic of the Philippines has acquired dominion and sovereignty. This sovereignty extends to the air space over the archipelagic waters. (Emphasis supplied) UNCLOS III and RA 9522 not Incompatible with the Constitution's Delineation of Internal Waters As their final argument against the validity of RA 9522. which RA 9522 did not repeal. 2. Petitioners extrapolate that these passage rights indubitably expose Philippine internal waters to nuclear and maritime pollution hazards. as well as to their bed and subsoil. or the exercise by the archipelagic State of its sovereignty over such waters and their air space. operate to grant innocent passage rights over the territorial sea or archipelagic waters. The regime of archipelagic sea lanes passage established in this Part shall not in other respects affect the status of the archipelagic waters. The imposition of these passage rights through archipelagic waters under UNCLOS III was a concession by archipelagic States. subject to the treaty's limitations and conditions for their exercise. the political branches of the Philippine government. international law norms. [41] In the absence of municipal legislation. bills drawing nautical highways for sea lanes passage are now pending in Congress.[43] thus automatically incorporated in the corpus of Philippine law. their archipelagic waters are subject to both the right of innocent passage and sea lanes passage [45] does not place them in lesser footing vis-à -vis continental coastal States which are subject. Thus. the right of innocent passage is a customary international law. as archipelagic waters subject to their territorial sovereignty. Our present state of jurisprudence considers the provisions . now codified in UNCLOS III.Page 128 of 328 xxxx 4. subjecting these waters to the rights of other States under UNCLOS III. expeditious international navigation. in their territorial sea. domestically. The fact that for archipelagic States. [46] Separate islands generate their own maritime zones. in the competent discharge of their constitutional powers. may pass legislation designating routes within the archipelagic waters to regulate innocent and sea lanes passage. [42] Significantly. however. and the resources contained therein. if not marginal. does not preclude the operation of municipal and international law norms subjecting the territorial sea or archipelagic waters to necessary. including the sea lanes. in exchange for their right to claim all the waters landward of their baselines. consistent with the international law principle of freedom of navigation. regardless of their depth or distance from the coast . [40] Indeed. placing the waters between islands separated by more than 24 nautical miles beyond the States' territorial sovereignty. bed and subsoil. burdens in the interest of maintaining unimpeded. More importantly. to the right of innocent passage and the right of transit passage through international straits. [47] Petitioners' invocation of non-executory constitutional provisions in Article II (Declaration of Principles and State Policies)[48] must also fail. (Emphasis supplied) The fact of sovereignty. the recognition of archipelagic States' archipelago and the waters enclosed by their baselines as one cohesive entity prevents the treatment of their islands as separate islands under UNCLOS III. [44] No modern State can validly invoke its sovereignty to absolutely forbid innocent passage that is exercised in accordance with customary international law without risking retaliatory measures from the international community. the exclusive economic zone . the demarcation of the baselines enables the Philippines to delimit its exclusive economic zone. it sends an open invitation to the seafaring powers to freely enter and exploit the resources in the waters and submarine areas around our archipelago. not to this Court. Although Oposa v. Section 2. an archipelagic State like the Philippines will find itself devoid of internationally acceptable baselines from where the breadth of its maritime zones and continental shelf is measured. absent enabling legislation. Absent an UNCLOS III compliant baselines law. reserving solely to the Philippines the exploitation of all living and non-living resources within such zone. the present petition lacks factual basis to substantiate the claimed constitutional violation. paragraph 2[51]) and subsistence fishermen (Article XIII. In fact. RA 9522 and the Philippines’ Maritime Zones Petitioners hold the view that. and second. preserves the traditional freedom of navigation of other States that attached to this zone beyond the territorial sea before UNCLOS III. Section 7 [52]). RA 9522 is therefore a most vital step on the part of the Philippines in safeguarding its maritime zones. Moreover. as well as in interpreting executory provisions of the Constitution. This is recipe for a two-fronted disaster: first. The enactment of UNCLOS III compliant baselines law for the Philippine archipelago and adjacent areas. Nevertheless. UNCLOS III favors States with a long coastline like the Philippines.in waters previously part of the high seas. UNCLOS III creates a sui generis maritime space . If the maritime delineation is contrary to UNCLOS III.[53] UNCLOS III. "do not embody judicially enforceable constitutional rights x x x. the luxury of choosing this option comes at a very steep price. are not violated by RA 9522. consistent with the Constitution and our national interest. the international community will of course reject it and will refuse to be bound by it. allows an internationally-recognized delimitation of the breadth of the Philippines' maritime zones and continental shelf. as embodied in RA 9522. however. relating to the protection of marine wealth (Article XII. which. Such a maritime delineation binds the international community since the delineation is in strict observance of UNCLOS III. based on the permissive text of UNCLOS III. These are consequences Congress wisely avoided. Congress was not bound to pass RA 9522. the prerogative of choosing this option belongs to Congress.Page 129 of 328 in Article II as mere legislative guides. ." [49] Article II provisions serve as guides in formulating and interpreting implementing legislation. The other provisions petitioners cite. UNCLOS III grants new rights to coastal States to exclusively exploit the resources found within this zone up to 200 nautical miles. it weakens the country's case in any international dispute over Philippine maritime space. Factoran[50] treated the right to a healthful and balanced ecology under Section 16 of Article II as an exception.[54] We have looked at the relevant provision of UNCLOS III [55] and we find petitioners' reading plausible. Abad. Perez. The length of such baselines shall not exceed 100 nautical miles. entered into force on 10 September 1964. 2. Brion. UNCLOS III entered into force on 16 November 1994. SO ORDERED.Page 130 of 328 WHEREFORE. including atolls... between. JJ." Entitled the Baselines the 5446. and connecting the various islands of the Philippine archipelago. Jr. The drawing of such baselines shall not depart to any appreciable extent from the general configuration of the archipelago. paragraphs 1-3." [4] One of the four conventions framed during the first United Nations Convention on the Law of the Sea in this treaty. as Amended by Republic Act No. Corona. we DISMISS the petition. provide: Geneva. all the waters around. 3. Territorial and Sea for of Other the Purposes. C. 3046. . Carpio. forming part of the inland waters of the Philippines. Jr. Villarama. [1] Entitled "An Act to Amend Certain Provisions of Republic Act No. and Sereno. (Empashis supplied). is between 1 to 1 and 9 to 1. Velasco. [2] [3] The third "Whereas Clause" of RA 3046 expresses the import of treating the Philippines as an archipelagic State: "WHEREAS. [5] [6] [7] 1.J. An archipelagic State may draw straight archipelagic baselines joining the outermost points of the outermost islands and drying reefs of the archipelago provided that within such baselines are included the main islands and an area in which the ratio of the area of the water to the area of the land. Peralta.. Leonardo-De Castro. excluding the Philippines. Mendoza. irrespective of their width or dimensions. Del Castillo. Article 47. except that up to 3 per cent of the total number of baselines enclosing any archipelago may exceed that length. up to a maximum length of 125 nautical miles. The Philippines signed the treaty on 10 December 1982. Endnotes: Bersamin. have always been considered as necessary appurtenances of the land territory. to Define "An the Act Archipelagic to Define Baselines of the of Philippines." Philippines. and other submarine areas. and Section 16. between. regardless of their breadth and dimensions. The waters around. Section 8. the outer limits of its continental shelf beyond 200nautical miles. Section 2. including its territorial sea. The coastal State shall at the same time give the names of any Commission members who have provided it with scientific and technical advice. [15] . consisting of its terrestrial. p. [9] Rollo. [14] Constitution. barely met the deadline. RA 9522. 171. with all the islands and [10] waters embraced therein. Thus. Spain ceded to the United States "the archipelago known as the Philippine Islands” lying within its technical description. 186 (1995). paragraph 2 and Article XIII. it shall submit particulars of such limits to the Commission along with supporting scientific and technical data as soon as possible but in any case within 10years of the entry into force of this Convention for that State. Under the terms of the treaty. form part of the internal waters of the Philippines. Allegedly in violation of Article XII. between Spain and the United States (7 November 1900). fluvial. and Sibutu and the US-Great Britain Convention (2 January 1930) demarcating boundary lines between the Philippines and North Borneo. Morato. [13] Article II. which took effect on 27 March 2009. Section 7. and aerial domains. the subsoil.” [11] Entered into between the Unites States and Spain on 10 December 1898 following the conclusion of the Spanish-American War. [12] The Treaty of Washington. Sulu. Annex II: "Where a coastal State intends to establish. the insular shelves. V." (Underscoring supplied) In a subsequent meeting. The deadline for the filing of application is mandated in Article 4. Section 7 of the Kilosbayan.Page 131 of 328 xxxx [8] UNCLOS III entered into force on 16 November 1994. 320 Phil. transferring to the US the islands of Cagayan. 34. Inc. the seabed. Which provides: "The national territory comprises the Philippine archipelago. and all other territories over which the Philippines has sovereignty or jurisdiction. in accordance with article76. the States parties agreed that for States which became bound by the treaty before 13 May 1999 (such as the Philippines) the ten-year period will be counted from that date. and connecting the islands of the archipelago. is between 1 to 1 and 9 to 1. Primer on the Law of the Sea 1 [24] [1997] ) (Italization supplied). 25 March 2008. use of force is no longer a valid means of acquiring territory. x x x x" (Merlin M.R. Sanidad v. No.R. 9189). 7 April 2010.R. 5 May 1994. The two other factors are: "the character of funds or assets involved in the controversy and a clear disregard of constitutional or statutory prohibition.” Rollo.[16] Page 132 of 328 Pascual v. Following Article 47 (1) of UNCLOS III which provides: An archipelagic State may draw straight archipelagic baselines joining the outermost points of the outermost islands and drying reefs of the archipelago provided that within such baselines are included the main islands and an area in which the ratio of the area of the water to the area of the land. Jr. No. J. Senate Committee on Accountability of Public Officers and Investigations . (1976). 460 Phil. COMELEC. (Emphasis supplied) [25] [26] Under the United Nations Charter. Aquino III v. [21] Rollo. v. G.g. not for the impropriety of remedy but for lack of merit). The last paragraph of the preamble of UNCLOS III states that "matters not regulated by this . the exploitation of its resources. 113375. 617 SCRA 623 (dismissing a petition [19] for certiorari and prohibition assailing the constitutionality of Republic Act No.g. COMELEC. [17] Guingona. Inc. 611 SCRA 137 (issuing the writ of prohibition to declare unconstitutional Republic Act No. including atolls. 25 January 2010. 9591). COMELEC. 165 Phil. Magallona. 179. No. [20] See e. 232 SCRA 110. 549 SCRA 77 (granting a writ of certiorari against the Philippine Senate and nullifying the Senate contempt order issued against petitioner). Respondents add that "no State is known to have supported this proposition. See e. 9716. pp. 31. G. p. G. 110 Phil. 331 (1960). 144-147. 453 Phil. [18] Rollo. 188078. No. 899 (2003) citing Kilosbayan. concurring). v. Respondents state in their Comment that petitioners' theory "has not been accepted or recognized by [22] either the United States or Spain. COMELEC. House of Representatives . which petitioner Magallona himself defined as "a body of treaty rules and customary norms governing the uses of the sea. G. 586 (2003) (issuing the writs of certiorari and prohibition declaring unconstitutional portions of Republci Act No." the parties to the Treaty of Paris. 155-156 (1995) (Feliciano.” Id.. Macalintal v.. 303 Francisco. p.R. 180643. 830. Neri v. [23] UNCLOS III belongs to that larger corpus of international law of the sea. and the exercise of jurisdiction over maritime regimes . 189793. Secretary of Public Works . Jr. Aldaba v. Article XII of the Constitution uses the term "archipelagic waters" separately [39] from "territorial sea. See note 7. Paragraph 2. 159.” (Emphasis supplied) . the contiguous zone. Based on figures respondents submitted in their Comment (id. Id. Except as provided for in paragraph 3. UNCLOS III." [38] Rollo. pp. -- [35] [36] [37] 1. Senate 14th Congress 44th Session 1416 (27 January 2009).Page 133 of 328 Convention continue to be governed by the rules and principles of general international law. 2. Moreover. An island is a naturally formed area of land. a right of innocent passage as provided in this Convention shall exist in those waters. 64-66. the territorial sea. Rocks which cannot sustain human habitation or economic life of their own shall have no exclusive economic zone or continental shelf. Section 2. Rollo. p. At 51-52. [34] Journal. RA 9522. which is above water at high tide. 60-64. Article 8 (2) of UNCLOS III provides: "Where the establishment of a straight baseline in accordance with the method set forth in article 7 has the effect of enclosing as internal waters areas which had not previously been considered as such." [27] Rollo.such as those enclosed by closing lines across bays and mouths of rivers. p. Article 121 provides: "Regime of islands. 51. At 182). the exclusive economic zone and the continental shelf of an island are determined in accordance with the provisions of this Convention applicable to other land territory. Under Article 74. an archipelagic State may have internal waters . surrounded by water. 3. 1596 classifies the KIG as a municipality of Palawan." Under UNCLOS III. 56-57. KIG lies around 80 nautical miles west of Palawan while Scarborough Shoal is around 123 nautical west [28] [29] [30] [31] [32] [33] of Zambales. See Article 50. Presidential Decree No. Section 2. all normal navigational channels. 6. Such sea lanes and air routes shall traverse the archipelagic waters and the adjacent territorial sea and shall include all normal passage routes used as routes for international navigation or overflight through or over archipelagic waters and. Archipelagic sea lanes passage means the exercise in accordance with this Convention of the rights of navigation and overflight in the normal mode solely for the purpose of continuous. (Emphasis supplied) Article 53. expeditious and unobstructed transit between one part of the high seas or an exclusive economic zone and another part of the high seas or an exclusive economic zone. suitable for the continuous and expeditious passage of foreign ships and aircraft through or over its archipelagic waters and the adjacent territorial sea. An archipelagic State may designate sea lanes and air routes thereabove. 3. Such sea lanes and air routes shall be defined by a series of continuous axis lines from the entry points of passage routes to the exit points. within such routes. The archipelagic State may. Subject to article 53 and without prejudice to article 50. Ships and aircraft in archipelagic sea lanes passage shall not deviate more than 25 nautical miles to either side of such axis lines during passage. 5. provided that duplication of routes of similar convenience between the same entry and exit points shall not be necessary. section 3. Right of innocent passage. ships of all States enjoy the right of innocent passage through archipelagic waters . 4. Right of archipelagic sea lanes passage. without discrimination in form or in fact among foreign ships. . provided that such ships and aircraft shall not navigate closer to the coasts than 10 per cent of the distance between the nearest points on islands bordering the sea lane. -1. An archipelagic State which designates sea lanes under this article may also prescribe traffic separation schemes for the safe passage of ships through narrow channels in such sea lanes. -1. Such suspension shall take effect only after having been duly published. 2. so far as ships are concerned.[40] Page 134 of 328 Mandated under Articles 52 and 53 of UNCLOS III: Article 52. in accordance with Part II. suspend temporarily in specified areas of its archipelagic waters the innocent passage of foreign ships if such suspension is essential for the protection of its security. All ships and aircraft enjoy the right of archipelagic sea lanes passage in such sea lanes and air routes. 2. identically titled "AN ACT TO ESTABLISH THE ARCHIPELAGIC SEA LANES IN THE PHILIPPINE ARCHIPELAGIC WATERS. ships of all States. 11. 10. -1. prescribe or substitute them.” [42] The relevant provision of UNCLOS III provides: Article 17. Ships in archipelagic sea lanes passage shall respect applicable sea lanes and traffic separation schemes established in accordance with this article. good order or security of the coastal State. The archipelagic State shall clearly indicate the axis of the sea lanes and the traffic separation schemes designated or prescribed by it on charts to which due publicity shall be given. when circumstances require. 9. -Subject to this Convention. 12. Passage is innocent so long as it is not prejudicial to the peace. whether coastal or land-locked. Meaning of innocent passage. after which the archipelagic State may designate. The organization may adopt only such sea lanes and traffic separation schemes as may be agreed with the archipelagic State. If an archipelagic State does not designate sea lanes or air routes. the right of archipelagic sea lanes passage may be exercised through the routes normally used for international navigation. after giving due publicity thereto. (Emphasis supplied) [41] Namely. 8. 2738. an archipelagic State shall refer proposals to the competent international organization with a view to their adoption. An archipelagic State may. (Emphasis supplied) Article 19. substitute other sea lanes or traffic separation schemes for any sea lanes or traffic separation schemes previously designated or prescribed by it. Such sea lanes and traffic separation schemes shall conform to generally accepted international regulations. enjoy the right of innocent passage through the territorial sea.Page 135 of 328 7. . PRESCRIBING THE RIGHTS AND OBLIGATIONS OF FOREIGN SHIPS AND AIRCRAFTS EXERCISING THE RIGHT OF ARCHIPELAGIC SEA LANES PASSAGE THROUGH THE ESTABLISHED ARCHIPELAGIC SEA LANES AND PROVIDING FOR THE ASSOCIATED PROTECTIVE MEASURES THEREIN. House Bill No. Such passage shall take place in conformity with this Convention and with other rules of international law. In designating or substituting sea lanes or prescribing or substituting traffic separation schemes. 4153 and Senate Bill No. Right of innocent passage. Passage of a foreign ship shall be considered to be prejudicial to the peace. The coastal State may adopt laws and regulations. (g) the loading or unloading of any commodity. territorial integrity or political independence of the coastal State. . (f) the launching. (c) the protection of cables and pipelines. -1. (b) any exercise or practice with weapons of any kind.Page 136 of 328 2. (i) any fishing activities. landing or taking on board of any aircraft. (k) any act aimed at interfering with any systems of communication or any other facilities or installations of the coastal State. (h) any act of willful and serious pollution contrary to this Convention. (e) the launching. (j) the carrying out of research or survey activities. (b) the protection of navigational aids and facilities and other facilities or installations. currency or person contrary to the customs. (d) any act of propaganda aimed at affecting the defense or security of the coastal State. in conformity with the provisions of this Convention and other rules of international law. or in any other manner in violation of the principles of international law embodied in the Charter of the United Nations. (l) any other activity not having a direct bearing on passage Article 21. good order or security of the coastal State if in the territorial sea it engages in any of the following activities: (a) any threat or use of force against the sovereignty. (c) any act aimed at collecting information to the prejudice of the defence or security of the coastal State. landing or taking on board of any military device. Laws and regulations of the coastal State relating to innocent passage. in respect of all or any of the following: (a) the safety of navigation and the regulation of maritime traffic. immigration or sanitary laws and regulations of the coastal State. relating to innocent passage through the territorial sea. fiscal. V. (f) the preservation of the environment of the coastal State and the prevention. Within the exclusive economic zone. UNCLOS III). the freedoms referred to in article 87 of navigation and overflight .Page 137 of 328 (d) the conservation of the living resources of the sea. freedom. immigration or sanitary laws and regulations of the coastal State. In contrast. (e) the prevention of infringement of the fisheries laws and regulations of the coastal State. whether coastal or land-locked. Rights and duties of other States in the exclusive economic zone. subject to the relevant provisions of this Convention. 3. Article II of the Constitution: "Section 2. The right of innocent passage of aircrafts through the sovereign territory of a State arises only under an international agreement. 2. equality. other States enjoy the following rights under UNCLOS III: [47] Article 58. [46] Falling under Article 121 of UNCLOS III (see note 37). fiscal. -1. construction. Such laws and regulations shall not apply to the design. UNCLOS III). [43] The right of innocent passage through the territorial sea applies only to ships and not to aircrafts (Article 17. adopts the generally accepted principles of international law as part of the law of the land and adheres to the policy of peace. The Law of the Sea 127 (1999). and amity with all nations. R. 4. (h) the prevention of infringement of the customs. reduction and control of pollution thereof. (g) marine scientific research and hydrographic surveys. justice. The coastal State shall give due publicity to all such laws and regulations. cooperation. enjoy. Lowe. Churabill and A. the right of innocent passage through archipelagic [44] waters applies to both ships and aircrafts (Article 53 (12). In the exclusive economic zone.” (Emphasis supplied) [45] "Archipelagic sea lanes passage is essentially the same as transit passage through straits" to which the territorial sea of continental coastal State is subject. all States. Foreign ships exercising the right of innocent passage through the territorial sea shall comply with all such laws and regulations and all generally accepted international regulations relating to the prevention of collisions at sea. The Philippines renounces war as an instrument of national policy. manning or equipment of foreign ships unless they are giving effect to generally accepted international rules or standards.R. Following Section 2. 2. Articles 88 to 115 and other pertinent rules of international law apply to the exclusive economic zone in so far as they are not incompatible with this Part. 2. subject to the conditions laid down in section 2. (e) freedom of fishing. -- 1. (f) freedom of scientific research. subject to Parts VI and XIII. subject to Part VI. and also with due regard for the rights under this Convention with respect to activities in the Area. xxxx Beyond the exclusive economic zone. aircraft and submarine cables and pipelines. Freedom of the high seas is exercised under the conditions laid down by this Convention and by other rules of international law. (d) freedom to construct artificial islands and other installations permitted under international law. It comprises. and compatible with the other provisions of this Convention. Freedom of the high sees. [48] See note 13. The high seas are open to all States.Page 138 of 328 and of the laying of submarine cables and pipelines. (c) freedom to lay submarine cables and pipelines. subject to Part VI. (b) freedom of overflight. . such as those associated with the operation of ships. These freedoms shall be exercised by all States with due regard for the interests of other States in their exercise of the freedom of the high seas. both for coastal and land-locked States: (a) freedom of navigation. inter alia. whether coastal or land-locked. defined under UNCLOS III as follows: Article 87. other States enjoy the freedom of the high seas. and other internationally lawful uses of the sea related to these freedoms. [49] Page 139 of 328 Kilosbayan. the answer to which has far-reaching implications. Fishworkers shall receive a just share from their labor in the utilization of marine and fishing resources.” (Emphasis supplied) 2. 224 SCRA 792. Reagan v. Morato. develop. 338 Phil. Tañada v. and "The State shall protect the rights of subsistence fishermen. 546. Blanco. Barredo. The State shall also protect. v. Respondent. 30 July 1993. production. Assistant Solicitor General Felicisimo R. adequate financial. Article 76. Petitioner. pp. Reagan. 652. --> FERNANDO. Zafra and Tayag for petitioner. both inland and offshore. 5 and 6. and marketing assistance. and conserve such resources. is between 1 to 1 and 9 to 1. 316 Phil." [53] This can extend up to 350 nautical miles if the coastal State proves its right to claim an extended Rollo. "The State shall protect the nation's marine wealth in its archipelagic waters. It shall provide support to such fishermen through appropriate technology and research. territorial sea. and other services. Gal-lang and Special Attorney Gamaliel H. and reserve its use and enjoyment exclusively to Filipino citizens. No.R. J." [52] preferential use of the communal marine and fishing resources. Asperilla. in relation to Article 77). COMMISSIONER OF INTERNAL REVENUE. 580-581 G. Rosete. Commissioner of Internal Revenue.R. REAGAN. 698 (1995). 67-69. including atolls. [50] [51] exclusive economic zone. No. is raised by petitioner William C. 101083. paragraphs 4(a). vs. L-26379 December 27. Quasha. to the (1997). especially of local communities. Mantolino for respondent. The protection shall extend to offshore fishing grounds of subsistence fishermen against foreign intrusion. 30 SCRA 968 (1969) EN BANC G. Inc. 1969 WILLIAM C.. Article 47 (1) provides: "An archipelagic State may draw straight archipelagic baselines joining the continental shelf (see UNCLOS III.: A question novel in character. at one time a civilian employee of an American corporation providing technical . [54] [55] outermost points of the outermost islands and drying reefs of the archipelago provided that within such baselines are included the main islands and an area in which the ratio of the area of the water to the area of the land. Office of the Solicitor General Antonio P. ETC. Solicitor Lolita O. Angara. He would dispute the payment of the income tax assessed on him by respondent Commissioner of Internal Revenue on an amount realized by him on a sale of his automobile to a member of the United States Marine Corps. for a permit to sell the car. As the Court of Tax Appeals reached a similar conclusion. Sangley Point. as the American armed forces being exempt could not be taxed as such under the National Internal Revenue Code. 1959 . It certainly cannot control the resolution of the specific question that confronts us. was assigned at Clark Air Base.. including freight. to render the truth unmistakable. more than two (2) months after the 1960 Cadillac car was imported into the Philippines. a citizen of the United States and an employee of Bendix Radio. Philippines. found expression anew in a 1962 decision. petitioner imported on April 22. insurance and other charges. 1 petitioner ignoring that such utterance was made purely as a flourish of rhetoric and by way of emphasizing the decision reached.2 Such an assumption. On the same date. which provides technical assistance to the United States Air Force. petitioner requested the Base Commander. military bases in the Philippines. . .S.Page 140 of 328 assistance to the United States Air Force in the Philippines.83. 1960. it is manifest that such a view amounts at most to a legal fiction and is moreover obiter. that the trading firm as purchaser of army goods must respond for the sales taxes due from an importer. petitioner's liability for the income tax due as a result thereof was unavoidable. inspired by the commendable aim to render unavailing any attempt at tax evasion on the part of such vendee. petitioner sold his car for $6. Such a plea. The sale having taken place on what indisputably is Philippine territory. 1960. he would justify by invoking. we sustain its decision now before us on appeal. Pfc. started the recital of facts thus: "It appears that petitioner. Clark Air Base. seriously and earnestly expressed. (Private first class). that in legal contemplation the sale was made outside Philippine territory and therefore beyond our jurisdictional power to tax.00 as evidenced by a deed of sale executed in Manila. United States Marine Corps. Jr. On the same date. Nine (9) months thereafter and before his tour of duty expired. We declare our stand in an unequivocal manner. as shown by a Bill of Sale . the Court of Tax Appeals. on or about July 7. sold the car to Fred Meneses for P32.00 to a certain Willie Johnson. Jr. 1960 a tax-free 1960 Cadillac car with accessories valued at $6. that "the areas covered by the United States Military Bases are not foreign territories both in the political and geographical sense. Division of Bendix Aviation Corporation.3 coupled with the reminder however.000. which was granted provided that the sale was made to a member of the United States Armed Forces or a citizen of the United States employed in the U." 4 Then came the following: "On July 11. the transaction having taken place at the Clark Field Air Base at Pampanga. after stating the nature of the case. Cavite. Philippines. mistakenly as will hereafter be more fully shown an observation to that effect in a 1951 opinion. on its face betraying no kinship with reality. Willie (William) Johnson. ..443. executed at Clark Air Base. It is his contention. July 11. In the decision appealed from." 5 ." As thus clarified. far-fetched and implausible.600. Resort to fundamentals is unavoidable to place things in their proper perspective.912. if at all is to be derived from such an obiter dictum. It is not precluded from allowing another power to participate in the exercise of jurisdictional right over certain portions of its territory.979. there is a diminution of its sovereignty.979. Necessarily. in the succinct language of Jellinek. To repeat.00 as income tax and denied the refund on the same. Hence. respondent Commissioner of Internal Revenue. fixed as his net taxable income arising from such transaction the amount of P17. scant comfort. the Court of Tax Appeals found nothing objectionable in the assessment and thereafter the payment of P2. Its jurisdiction may be diminished. both territorial and personal. which.Page 141 of 328 As a result of the transaction thus made.00 was legally collected by respondent for petitioner. is a base outside the Philippines" the sale therefore having taken place on "foreign soil". So it is with the bases under lease . Petitioner cannot make out a case for reversal. and everyone to whom it applies must submit to its terms. express or implied. but it does not disappear. by its consent. They are still subject to its authority. Its laws govern therein."7 A state then. its commands paramount.979. it has to be exclusive. If it were not thus. Nor does the matter end there. Its laws may as to some persons found within its territory no longer control. That is the extent of its jurisdiction. its decrees are supreme. this appeal predicated on a legal theory we cannot accept. There may thus be a curtailment of what otherwise is a power plenary in character.34. "is the property of a state-force due to which it has the exclusive capacity of legal self-determination and selfrestriction." 6 After discussing the legal issues raised. That is the concept of sovereignty as auto-limitation. After paying the sum. petitioner apparently feeling justified in his refusal to defer to basic postulates of constitutional and international law. he sought a refund from respondent claiming that he was exempt. It is to be admitted that any state may. its authority may be exercised over its entire domain. Nothing is better settled than that the Philippines being independent and sovereign. rendering him liable for income tax in the sum of P2. If it does so. As noted in the appealed decision: "The only issue submitted for our resolution is whether or not the said income tax of P2.979. induced no doubt by the weight he would accord to the observation made by this Court in the two opinions earlier referred to. may refrain from the exercise of what otherwise is illimitable competence. if it chooses to. likewise. after deducting the landed cost of the car as well as the personal exemption to which petitioner was entitled.00. one which is likewise far from reflecting the fact as it is. but pending action on his request for refund. 1.00 plus the legal rate of interest. There is no portion thereof that is beyond its power. They retain their status as native soil. he filed the case with the Court of Tax Appeals seeking recovery of the sum of P2. primarily the contention that the Clark Air Base "in legal contemplation. it by no means follows that such areas become impressed with an alien character. Within its limits. submit to a restriction of its sovereign rights. his immunity from prosecution is not because he has not violated the local law. Hyde." Chief Justice Taney. . 9 affirmed the fundamental principle of everyone within the territorial domain of a state being subject to its commands: "For undoubtedly every person who is found within the limits of a government. Moore. deriving validity from an external source. speak to that effect with impressive unanimity. Decisions coming from petitioner's native land." 11 He could cite moreover. It is susceptible of no limitation not imposed by itself. this time from the pen of Justice Van Devanter. . As a matter of fact. such eminent treatise-writers as Kent. is bound by its laws." After which came this paragraph: "All exceptions. Westlake. If an attache commits an offense within the precincts of an embassy. or whose immunity is waived. in an 1857 decision. therefore. Thus: "The ground occupied by an embassy is not in fact the territory of the foreign State to which the premises belong through possession or ownership. to the full and complete power of a nation within its own territories. even though its criminal code normally does not contemplate the punishment of one who commits an offense outside of the national domain. contrary to the will of the State of his sojourn.8 an 1812 decision: "The jurisdiction of the nation within its own territory is necessarily exclusive and absolute. made clear that not even the embassy premises of a foreign power are to be considered outside the territorial domain of the host state. Wilson. They are not and cannot be foreign territory." It is no exaggeration then for Justice Brewer to stress that the United States government "is one having jurisdiction over every foot of soil within its territory. Wheaton and Oppenheim. bays. that an ambassador himself possesses the right to exercise jurisdiction. and other in closed arms of the sea along its coast. Any restriction upon it. if it secures custody of the offender. We start with the citation from Chief Justice Marshall. It is not believed. Thus: "It now is settled in the United States and recognized elsewhere that the territory subject to its jurisdiction includes the land areas under its dominion and control the ports. M'Faddon. must be traced up to the consent of the nation itself. in addition to many American decisions. the territorial sovereign. may subject him to prosecution. and a marginal belt of the sea extending from the coast line outward a marine league. They can flow from no other legitimate source. whether the temporary purposes or as a resident. The lawfulness or unlawfulness of acts there committed is determined by the territorial sovereign. harbors. but rather for the reason that the individual is exempt from prosecution. or 3 geographic miles. announced in the leading case of Schooner Exchange v. and an investment of that sovereignty to the same extent in that power which could impose such restriction. even . penned by jurists of repute. similarly commits a crime therein. would imply a diminution of its sovereignty to the extent of the restriction. If a person not so exempt. therefore.Page 142 of 328 to the American armed forces by virtue of the military bases agreement of 1947. . the eminent commentator Hyde in his three-volume work on International Law. as interpreted and applied by the United States."10 Not too long ago. and acting directly upon each [individual found therein]. there was a reiteration of such a view. was beyond the reach of our tax statutes. tax evasion would have been facilitated. certainly not excluding the power to tax. At any rate. He could have stopped there." 12 2. who spoke for the Court. adhered to such a rationale. within the contemplation of the National Internal Revenue Code provision. he did say: "While in army bases or installations within the Philippines those goods were in contemplation of law on foreign soil. 15 holding liable as an importer. He chose not to do so. quoting extensively from the earlier opinion. There is nothing in the Military Bases Agreement that lends support to such an assertion. It is easily understandable why. which would be made to yield such an unwarranted interpretation at war with the controlling constitutional and international law principles. This country's jurisdictional rights therein. Meer ." . If it were not thus. he proceeded to discuss the role of the American military contingent in the Philippines as a belligerent occupant. when no longer needed for military purposes. the trading firm that purchased army goods from a United States government agency in the Philippines. have been preserved. As thus correctly viewed. he would seek to impart plausibility to his claim by the ostensible invocation of the exemption clause in the Agreement by virtue of which a "national of the United States serving in or employed in the Philippines in connection with the construction. is more apparent than real for as noted at the outset of this opinion. this Court affirmed a decision rendered about seven months previously. Petitioner could not have been unaware that to maintain the contrary would be to defy reality and would be an affront to the law. even if such a contention were more adequately pressed and insisted upon. It has not become foreign soil or territory. The transaction having occurred in 1946. In the light of the above. to repeat. As to certain tax matters. it is on its face devoid of merit as the source clearly was Philippine. petitioner's hope for the reversal of the decision completely fades away. an appropriate exemption was provided for. v. Justice Tuason. petitioner places more faith not on the language of the provision on exemption but on a sentiment given expression in a 1951 opinion of this Court. The United States forces that brought in such equipment later disposed of as surplus. In Saura Import and Export Co.14 the case above referred to." 13 The reliance.Page 143 of 328 within his embassy with respect to acts there committed. While his first assigned error is thus worded. maintenance. In the course of such a dissertion. the first and crucial error imputed to the Court of Tax Appeals to the effect that it should have held that the Clark Air Force is foreign soil or territory for purposes of income tax legislation is clearly without support in law. not so long after the liberation of the Philippines. drawing on his well-known gift for rhetoric and cognizant that he was making an as if statement. operation or defense of the bases and residing in the Philippines only by reason of such employment" is not to be taxed on his income unless "derived from Philippine source or sources other than the United States sources. Nor is there apparent at the present time any tendency on the part of States to acquiesce in his exercise of it. it was by way of pure embellishment. What is more. decision as to the liability for sales taxes as an importer by the purchaser. to reach the conclusion that it was the purchaser of army goods. It could be utilized again. while far from objectionable as thus enunciated. a legal fiction. properly used. this time from military bases. thus: "It is true that the areas covered by the United States Military Bases are not foreign territories both in the political and geographical sense. Again.16 It was an opinion "uttered by the way. not to be disregarded. namely to stigmatize as without support in law any attempt on the part of a taxpayer to escape an obligation incumbent upon him. this observation of Justice Tuason could be misused or misconstrued in a clumsy manner to reach an offensive result. the liability of the petitioner for income tax which. as here." To lend further support to a conclusion already announced. What is more.Page 144 of 328 It is thus evident that the first. and thereafter the controlling. could have been reached without any need for such expression as that given utterance by Justice Tuason. Note his stress on "in contemplation of law. in every opinion. what was said by him was in the way of a legal fiction. Its value then as an authoritative doctrine cannot be as much as petitioner would mistakenly attach to it. they may be respected.20 a 1962 decision relied upon by petitioner. To repeat."21 Justice Tuason moreover made explicit that rather than corresponding with reality. Collector of Internal Revenue. Chief Justice Marshall could again be listened to with profit. It was clearly obiter not being necessary for the resolution of the issue before this Court. This is not to discount the uses of a fictio juris in the science of the law. is squarely raised for the first time. but ought not to control the judgment in a subsequent suit when the very point is presented for decision. who penned the Co Po opinion. a legal fiction . that general expressions. the statement on its face is. 22 Certainly. That was farthest from the thought of Justice Tuason. as it undoubtedly was.18 On this point. Thus: "It is a maxim. This is not to say that it should have been ignored altogether afterwards. as announced at the opening of this opinion. especially so for the purpose intended. It certainly does not justify any effort to render futile the collection of a tax legally due. being at that a confirmation of what had been arrived at in the earlier case. an observation certainly not to be taken literally was thus given utterance. to repeat. then. the purpose that animated the reiteration of such a view was clearly to emphasize that through the employment of such a fiction. how far divorced from the truth was such statement was emphasized by Justice Barrera. It was Cardozo who pointed out its value as a device "to advance the ends of justice" although at times it could be "clumsy" and even "offensive". are to be taken in connection with the case in which those expressions are used." 19 Nor did the fact that such utterance of Justice Tuason was cited in Co Po v. If they go beyond the case." 17 It could not then be controlling on the question before us now. tax evasion is precluded. that must respond for the advance sales taxes as importer. So it was quoted with that end in view in the Co Po case. distinguished by its sound appreciation of the issue then before this Court and to preclude any tax evasion. put a different complexion on the matter. there being no need to repeat it. Again. 4. leading to results that would have shocked its originator. It certainly is not susceptible of the mischievous consequences now sought to be fastened on it by petitioner.could be relied upon by the law. He did stress further the full extent of our territorial jurisdiction in words that do not admit of doubt. it should be noted. whether by design or inadvertence. to be guilty of succumbing to the vice of literalness. that petitioner was liable for the income tax arising from a sale of his automobile in the Clark Field Air Base. in the pursuit of legitimate ends. is utterly without merit. Thus: "This provision is not and can not on principle or authority be construed as a limitation upon the rights of the Philippine Government. If anything. there is nothing that stands in the way of an affirmance of the Court of Tax Appeals decision." Nor did he stop there. 23 Petitioner then would be well-advised to take to heart such counsel of care and circumspection before invoking not a legal fiction that would avoid a mockery of the law by avoiding tax evasion but what clearly is a misinterpretation thereof. the only one that calls for discussion to the effect that for income tax purposes the Clark Air Force Base is outside Philippine territory. To so conclude is. to paraphrase Frankfurter. So we have said earlier. To impute then to the statement of Justice Tuason the meaning that petitioner would fasten on it is. to misread it. For his real and genuine sentiment on the matter in consonance with the imperative mandate of controlling constitutional and international law concepts was categorically set forth by him. Acierto24 thus: "By the [Military Bases] Agreement. courtesy. petitioner himself being fully aware that if the Clark Air Force Base is Page 145 of 328 . it is an emphatic recognition and reaffirmation of Philippine sovereignty over the bases and of the truth that all jurisdictional rights granted to the United States and not exercised by the latter are reserved by the Philippines for itself. We hold. which clearly is and cannot otherwise be other than. 3. the Philippine Government merely consents that the United States exercise jurisdiction in certain cases. The consent was given purely as a matter of comity. No useful purpose would be served by discussing the other assigned errors. or expediency over the bases as part of the Philippine territory or divested itself completely of jurisdiction over offenses committed therein. within our territorial jurisdiction to tax. not as an obiter but as the rationale of the decision. With the mist thus lifted from the situation as it truly presents itself. The conclusion is thus irresistible that the crucial error assigned. in People v. as announced at the outset. To so attribute such a bizarre consequence is to be guilty of a grave disservice to the memory of a great jurist." 25 It is in the same spirit that we approach the specific question confronting us in this litigation. as Frankfurter noted. That it would be fraught with such peril to the enforcement of our tax statutes on the military bases under lease to the American armed forces could not have been within the contemplation of Justice Tuason. J. Dizon.. Makalintal. Meer. operation or defense of the . 35 (1937). 7 Cranch 116. 262 US 100 (1922). Cunard Steamship Co. pp. 186. 1966 denying the refund of P2. 202 affirming Go Cheng Tee v. 20-21. 26 Petitioner had not done so. 136. WHEREFORE.. 158 US 564 (1894). Petitioner cannot do so.00 as the income tax paid by petitioner is affirmed. Castro and Teehankee. Philippine soil or territory. Recent Theories of Sovereignty. reads: "No national of the United States serving in or employed in the Philippines in connection with the construction. 13 Act XII of the Military Bases Agreement. 183. National Internal Revenue Code. 1285-1286 (1947). 23.979. pp.L. International Law Chiefly as Interpreted and Applied by the United States. C. Meer. Endnotes: 1 Saura Import and Export Co. Sanchez. his claim for exemption from the income tax due was distinguished only by its futility. Annex 4. par. Decision. p. Mellon. With costs against petitioner. We thus manifest fealty to a pronouncement made time and time again that the law does not look with favor on tax exemptions and that he who would seek to be thus privileged must justify it by words too plain to be mistaken and too categorical to be misinterpreted. J. JJ. v. Ibid. Co Po v. 18 (1950).. 21. 3 4 5 6 7 8 9 10 11 12 2 Hyde. Brown v. J.J. 2 Sec. 87 Phil. 19 How. Ibid. 5 SCRA 1057. There is further satisfaction in finding ourselves unable to indulge petitioner in his plea for reversal. 194. as it ought to be and as it is.. Reyes. Brief for Petitioner-Appellant. maintenance.. concurs in the result Barredo. p. Jellinek as quoted in Cohen.. v. 88 Phil. the decision of the Court of Tax Appeals of May 12. Collector of Internal Revenue. In re Debs. Zaldivar. 199. p.. 2. took no part. Duchesne. Concepcion.Page 146 of 328 to be considered.B. Northern Nat. Cardozo.R. 219 US 380 (1911). de Yance.. 310 US 362 (1940). J. 20 25 SCRA 1057. United States. 3.Page 147 of 328 bases and residing in the Philippines by reason only of such employment. p. Weyerhaeuser v. 565 (1930). 227 (1925). 302 US 583 (1938). de los Reyes v. 355 US 184 (1957). National Coconut Corporation (NACOCO). Inc. 18 (1950). 95 Phil. 48 Phil. 534. St. 17 People v. 199 (1951). 34 Phil. PLAINTIFFS AND APPELLEES. 21 22 23 24 25 26 See also E. 357. United States. Macadaeg. No. 264. United States. Ibid. Hoyt. Carganillo Vda. Meer. DEFENDANTS. Cf. ET AL. 14 88 Phil. Paredes. v. Collector of Customs. 18 19 Bank. (1926). 51 (1954). Porter Township. The Paradoxes of Legal Science. 100 Phil. L-9657. Wright v. 110 US 608 (1884). 6 Wheat. 542 (1953). 410 (1952). Morales v. 300 US 98. Osaka Shosen Kaisha Line v. 91 Phil. 55 Phil. BACANI AND MATEO A. 362 [1968]). MATOTO. NATIONAL COCONUT CORPORATION AND BOARD OF LIQUIDATORS. 272 US 52. United States. Green v. or his spouse and minor children and dependent parents of either spouse. shall be liable to pay income tax in the Philippines except in respect of income derived from Philippine source or sources other than the United States sources. NATIONAL COCONUT CORPORATION. 534. 28 SCRA 1119 (1969). Guerrero. Abad v.. p. 1059. 15 16 Uy Po v. Cf. Bacani v. Browning.. Louis Ry v.: . 153 (1916). 399 (1821) reiterated in Myers v. 92 Phil. 21 SCRA 180 (1967) and the cases therein cited. de Villa. 87 Phil. Ibid. DEFENDANTS-APPELLANTS. v. Rodriguez. 468 (1956) [ G. November 29. Collector of Internal Revenue. Nashville C. 1956 ] LEOPOLDO T. BAUTISTA ANGELO. 34 (1928). VS." (1 Philippine Treaty Series. Go Cheng Tee v. Commissioner of Internal Revenue v. Cf. this action was instituted in the Court of First Instance of Manila. On January 19. the Auditor General required the plaintiffs to reimburse said amounts on the strength of a circular of the Department of Justice wherein the opinion was expressed that the National Coconut Corporation. Defendants set up as a defense that the National Coconut Corporation is a government entity within the purview of section 2 of the Revised Administrative Code of 1917 and. To prevent deduction of these fees from1 their salaries and secure a judicial ruling that the National Coconut Corporation is not a government entity within the purview of section 16. the Government of the Philippines is exempt from paying the legal fees provided for therein. hence. requested said stenographers for copies of the transcript of the stenographic notes taken by them duririg the hearing. Rule 130 of the Rules of Court. for copies of the stenographic transcripts in question. The fees in question are for the transcript of notes taken during the hearing of a ease in which the National Coconut Corporation is interested. Assistant Corporate Counsel Federico Alikpala. Under section 16. Rule 130 of the Rules of Court." This is an appeal from said decision. and the transcript was requested by its assistant corporate counsel for the use of said corporation. 1954. (2) that the payments already made by said defendant to plaintiffs herein and received by the latter from the former in the total amount of P714. and among these fees are those which stenographers may charge for the transcript of notes taken by them that may be requested by any interested person (section 8). counsel for defendant. Matoto for said transcript at the rate of P1 per page. Rules of Court. 1954. it is exempt from paying the stenographers' fees under Rule 130 of. 1953. After trial. the Rules of Court. Rule 130 of the. entitled Francisco Sycip vs. being a government entity. Matoto the amount of P10 every payday beginning March 30. On February 6. the Auditor General issued an order directing the Cashier of the Department of Justice to deduct from the salary of Leopold© T.Page 148 of 328 Plaintiffs herein are court stenographers assigned in Branch VI of the Court of First Instance of Manila. Upon inspecting the books of this corporation. Baeani and P150 to Mateo A. 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. was exempt from the payment of the fees in question. the Auditor General disallowed the payment of these fees and sought the recovery of the amounts paid. During the pendency of Civil Case No. National Coconut Corporation. and (3) that plaintiffs are under no obligation whatsoever to make a refund of these payments already received by them. just and legal. Bacani the amount of P25 every payday and from the salary of Mateo A. the court found for the plaintiffs declaring (1) "that defendant National Coconut Corporation is not a government entity within the purview of section 16. 2293 of said court. section 2 of the Revised Administrative Code defines the scope of the term "Government of the Republic of the Philippines" as follows: . The National Coconut Corporation paid the amount of P564 to Leopoldo T. are valid. On the other hand. vs." The question now to be determined is whether the National Coconut Corporation may be considered as included in the term "Government of the Republic of the Philippines" for the purposes of the exemption of the legal fees provided for in Rule 130 of the Rules of Court. This institution. As may be noted. whether pertaining to the central government or to the provincial or municipal branches or other form of local government. executive. 332). To begin with. whether pertaining to the central Government or to the provincial or. Dorr. the term "Government of the Republic of the Philippines" refers to a government entity through which the functions of government are exercised. '(3) The regulation of the holding. . save as the contrary appears from the context. and interchange of property. The former are those which constitute the very bonds of society and are compulsory in nature.. and the judicial. '(5) The definition and punishment of crime. '(2) The fixing of the legal relations between man and wife and between parents and children. including.S. the various arras through which political authority is made effective in said Islands. transmission. and the determination of its liabilities for debt or for crime. municipal branches or other form of local government. '(6) The administration of justice in civil cases. we state that the term "Government" may be defined as "that institution or aggregate of institutions by which an independent society makes and carries out those rules of action which are necessary to enable men to live in a social state. including the various arms through which political authority is made effective in the Philippines. 2 Phil. the legislative. President Wilson enumerates the constituent functions as follows: "'(1) The keeping of order and providing for the protection of persons and property from violence and robbery. '(4) The determination of contract rights between individuals. the latter are those that are undertaken only by way of advancing the general interests of society. and are merely optional.Page 149 of 328 " 'The Government of the Philippine Islands' is a term which refers to the corporate governmental entity through which the functions of government are exercised throughout the Philippine Islands. or which are imposed upon the people forming that society by those who possess the power or authority of prescribing them" (U. when referring to the national government. This requires a little digression on the nature and functions of our government as instituted in our Constitution. through which the powers and functions of government are exercised. has reference to what our Constitution has established composed of three great departments. These functions are twofold: constitute and ministrant. strictly speaking. Collector of Internal Revenue. The principles determining whether or not a government shall exercise certain o£ these optional functions are: (1) that a government should do for the public welfare those things which private capital would not naturally undertake and (2) that a government should do these things which by its very nature it is better equipped to administer for the public welfare than is any private individual or group of individuals. 518). * * * Unlike the Government. progress and prosperity of the people. "By becoming a stockholder in the National £oal Company. 46 PML. The question that now arises is: Does the fact that these corporation perform certain functions of government make them a part of the Government of the Philippines? The answer is simple: they do not acquire that status for the simple reason that they do not come under the classification of municipal or public corporation. vs. As this Court has aptly said. These are what we call government-owned or controlled corporations which may take on the form of a private enterprise or one organized with powers and formal characteristics of a private corporations under the Corporation Law. and regulations of trade and industry. (Malcom. and in this sense it "The mere fact that the is an entity different from our government.) The most important of the ministrant functions are: public works. The Government of the Philippine Islands. '(8) Dealings of the state with foreign powers: the preservation of the state from external danger or encroachment and the advancement of its international interests.Page 150 of 328 '(7) The determination of the political duties. and relations of citizens. the corporation may be sued without its consent. health and safety regulations. It may sue and be sued in the same manner as any other private corporations. and those which it may exercise to promote merely the welfare. p. Government happens to be a majority stockholder does not make it a public corporation" (National Goal Co. privileges. there are functions which our government is required to exercise to promote its objectives as expressed in our Constitution and which are exercised by it as an attribute of sovereignty. pp.) From the above we may infer that. 19. an4 is . public charity. for it was made subject to the provisions of our Corporation Law in so far as its corporate existence and the powers that it may exercise are concerned (sections 2 and 4. Take for instance the National Coconut Corporation. however. it was given a corporate power separate and distinct from our government. a the better curing of copra products function which our government has chosen to exercise to promote the coconut industry. To this latter class belongs the organization of those corporations owned or controlled by the government to promote certain aspects of the economic life of our people such as the National Coconut Corporation. 586-587). the Government divested itself of its sovereign character so far as respects the transactions of the corporation. public education.'" (Malcolm. Commonwealth Act No. While it was organized with and the proper the purpose of "adjusting the coconut industry to a position independent of trade preferences in the United States" and of providing "Facilities for utilization of coconut by products". The Government of the Philippine Islands. 19-20. ) It is true that under section 3. define a municipal corporation in its historical and strict sense to be the incorporation. it embraces only incorporated villages. but in this case the National Coconut Corporation has agreed and in fact has paid 1P1. civil government and police regulations of the inhabitants of the particular district included in the boundaries of the corporation. I. They do not include government entities which are given a corporate personality separate and distinct from the government and which are governed by the Corporation Law. 1459. of the inhabitants of a particular place or district. Rule 130 of the Rules of Court. These are what we call municipal corporations. The payment of the fees in question became therefore contractual and as such is valid even if it goes beyond the limit prescribed in section 8.30 for each page of transcript of not less than £00 words before the appeal is taken and P0. Rule 130 of our Rules of Court. Dunn vs. 59. therefore . "Public corporations are those formed or organized for the government of a portion of the State. This power of local government is the distinctive purpose and the distinguishing feature of a municipal corporation proper. towns and cities. 85 Ala. They do not therefore come within the exemption clause prescribed in section 16." (Dillon. Stremmel. and other public corporations created by government for political purposes.) "We may. 288. duties and liabilities have to be determined in the light of that law and of their corporate charters. Yet the National Coal Company remains an agency or instrumentality of government.) To recapitulate. 4 So. 385. municipal or other form of local government. Springer. and in this are included those arms through which political authority is made effective whether they be provincial." "In its more general sense the phrase ''municipal corporation' may include both towns and counties." (McQuillin. Republic Act No. Municipal Corporations. Corporation Law) "'The generally accepted definition of a municipal corporation would only include organized cities and towns. 312. and like organizations. we may mention that the term "Government of the Republic of the Philippines" used in section 2 of the Revised Administrative Code refers only to that government entity through which the functions of the government are exercised as an attribute of sovereignty.. with political and legislative powers for the local." (Section 3.Page 151 of 328 subject to taxation. Municipal Corporations.00 per page for the services rendered by the plaintiffs and has not raised any objection to the amount paid until its propriety was disputed by the Auditor General. p.' Heller vs." (Government of the Philippine Islands vs. In its more common and limited signification. by the authority of the government. Court of County Revenues. I.15 for each page after the filing of the appeal. Their powers. and authorizing them tin their corporate capacity to exercise subordinate specified powers of legislation and regulation with respect to their local and internal concerns.( Vol. Rule 130. l44. 2nd ed. 146. Vol. p. 52 Mo. . stenographers may only charge as fees P0. 50 Phil. 309. 5th ed. 661. AND THE COURT OF INDUSTRIAL RELATIONS. L-21484) and the order dated May 21. 3844). the decision appealed from is affirmed. VS. L-23605) as affirmed by the resolutions en banc. 1969 ] THE AGRICULTURAL CREDIT AND COOPERATIVE FINANCING ADMINISTRATION (ACCFA). Wherefore. in Cases Nos. respectively. ACCFA SUPERVISORS' ASSOCIATION. being practically the same and the principal issues involved related. ACCFA WORKERS' ASSOCIATION (AWA) AND THE COURT OF INDUSTRIAL RELATIONS. On the other hand. No. Its administrative machinery was reorganized and its name changed to Agricultural Credit Administration (ACA) under the Land Reform Code (Republic Act No. CONFEDERATION OF UNIONS IN GOVERNMENT CORPORATIONS AND OFFICES (CUGCO).R. 821. 4. 30 SCRA 649 (1969) [ G. L-21484 .R.Page 152 of 328 As regards the question of procedure raised by appellants. 3450-ULP and 1327-MC. The Agricultural Credit and Cooperative Financing Administration (ACCFA) was a government agency created under Republic Act No. 1963 (G. PETITIONER. hereinafter referred to as the Unions. NOVEMBER 29. the ACCFA Supervisors' Association (ASA) and the ACCFA Workers' Association (AWA). VS. without pronouncement as to costs. 1964 (G. suffice it to say that the same is insubstantial. except the Confederation of Unions in Government Corporations and Offices (CUGCO). November 29. 1969] THE AGRICULTURAL CREDIT ADMINISTRATION (ACA). [G. The parties. L-23605. as amended. These are two separate appeals by certiorari from the decision dated March 25. RESPONDENTS. a money claim disapproved by the Auditor General but to an action of prohibition the purpose of which is to restrain the officials concerned from deducting from plaintiffs' salaries the amount paid to them as stenographers' fees. No. This case does not come under section 1. respectively. PETITIONER. are labor organizations composed of the supervisors and the rank-and-file employees. only one decision is now rendered in these two cases.R. Rule 45 of the Rules of Court relative to appeals from a decision of the Auditor General. of the Court of Industrial Relations. Confederation of Unions in Government Corporations and Offices (CUGCO). L-21484. ACCFA SUPERVISORS' ASSOCIATION (ASA). No. considering that this case refers not to. Agricultural Credit and Cooperative Financing Administration (ACCFA) v. in the ACCFA (now ACA).R.R. G. ACCFA WORKERS' ASSOCIATION. RESPONDENTS. No. Whether or not the collective bargaining agreement between the petitioner and the respondent union is valid. Brushing aside the foregoing defenses. No. and if not. "3. discrimination against said members in the matter of promotions. 3. was entered into by and between the Unions and the ACCFA: A few months thereafter. 1961. to wit: "1. the CIR in its decision dated March 25.Page 153 of 328 On September 4. which was to be effective for a period of one (1) year from July 1. "2.R. 1963 of the CIR en banc. whether or not it has already lapsed. To bargain in good faith and expeditiously with the herein complainants.00 a month living allowance. 1961. including the payment of P30. To cease and desist from committing further acts tending to discourage the members of complainant unions in the exercise of their right to self-organization. whether or not its (sic) fringe benefits are already enforceable." G." The ACCFA moved to reconsider but was turned down in a resolution dated April 25. on October 25. 3450-ULP) for having allegedly committed acts of unfair labor practice. filed a complaint with the Court of Industrial Relations against the ACCFA (Case No. 1962 the Unions declared a strike. if valid. Whether or not there is a legal and/or factual basis for the finding of the respondent court that the petitioner had committed acts of unfair labor practice. Whether or not the respondent court has jurisdiction over this case. Thereupon it brought this appeal by certiorari. To comply with and implement the provision of the collective bargaining contract executed on September 4. the Confederation of Unions in Government Corporations and Offices (CUGCO). 4. the same having already expired. together with its mother union. 1963 ordered the ACCFA: "1. The ACCFA raises the following issues in its petition. 1962. namely: violation of the collective bargaining agreement in order to discourage the members of the The ACCFA denied the charges and interposed as Unions in the exercise of their right to self-organization. 1961 a collective bargaining agreement. Finally. 1962 the Unions. and refusal to bargain. illegality of the bargaining contract. Whether or not it is within the competence of the court to enforce the collective bargaining agreement between the petitioner and the respondent unions. affirmative and special defenses lack of jurisdiction of the CIR over the case. the Unions started protesting against alleged violations and non-implementation of said agreement. On October 30. L-23605 . 2. which in turn depends on whether or not the ACCFA exercised governmental or proprietary functions. which was ended when the strikers voluntarily returned to work on November 26. expiration of said contract and lack of approval by the office of the President of the fringe benefits provided for therein. the ACA. It further alleged that the petition was premature. in the ACA. The trial Court in its order dated March 30.+ to extend credit and similar assistance to agriculture. the President of the Philippines signed into law the Agricultural Land Reform Code (Republic Act No. 1964. In this appeal. Under Section 3 of the Agricultural Land Reform Code the ACA was established. 1964 the ACCFA Supervisors' Association and the ACCFA Workers' Association filed a petition for certification election with the Court of Industrial Relations (Case No. the trial Court in its order dated May 21. denied that the Unions represented the majority of the supervisors and rank-and-file workers. 3844). nor be represented by them. while Manager or Officer-in-Charge of the ACA to allow the posting of said order "for the information of all employees and workers thereof. this Court ordered the CIR to stay the execution of its order of May 21." and to answer the petition. The Unions join the issue on this single point. In a resolution dated October 6. L-21484). However. respectively. the ACA in effect challenges the jurisdiction of the CIR to entertain the petition of the Unions for certification election on the ground that it (ACA) is engaged in governmental functions.Page 154 of 328 During the pendency of the above mentioned case (G. and that the employees and supervisors could not lawfully become members of the Unions." Said order was affirmed by the CIR en banc in its resolution dated August 24. As prayed for. this Court dismissed the petition for "lack of adequate allegations. No.R. it was agreed "that the union petitioners in this case represent the majority of the employees in their respective bargaining units" and that only the legal issues raised would be submitted for the resolution of the trial Court. 1964. specifically on August 8. with the conformity of the ACA Administrator and of the Agrarian Counsel in his capacity as such and as counsel for the National Land Reform Council. Finding the remaining grounds for ACA's opposition to the petition to be without merit. respectively. 1964 the ACA filed in this Court a petition for certiorari with urgent motion to stay the CIR order of May 21. On March 17. respectively. which among other things required the reorganization of the administrative machinery of the Agricultural Credit and Cooperative Financing Administration (ACCFA) and changed its name to Agricultural Credit Administration (ACA). in pursuance of the policy enunciated in Section 2 as follows: + . 1963. that the ACA was not the proper party to be notified and to answer the petition. 1964 certified "the ACCFA Workers' Association and the ACCFA Supervisors' Association as the sole and exclusive bargaining representatives of the rank-and-file employees and supervisors. admitting most of the allegations in the petition. 1327MC) praying that they be certified as the exclusive bargaining agents for the supervisors and rank-and-file employees. in the ACA. 1964 directed the In compliance therewith. of the Agricultural Credit Administration. On October 2. in a joint manifestation of the Unions dated May 7. among other governmental agencies." but the dismissal was later reconsidered when the ACA complied with the formal requirement stated in said resolution. 1964. 1964. 1964. contending that the ACA performs proprietary functions. Section 103 grants the ACA the privilege of rediscounting with the Central Bank. Sections 113 to 118. as a consequence.000. on a cooperative basis. Section 110 provides that "the administrative machinery of the ACCFA shall be reorganized to enable it to align its activities with the requirements and objectives of this Code and shall be known as the Agricultural Credit Administration. without lawful cause. such as irrigation and transport systems. (5) and (6) To make the small farmers more independent. the head of the Agricultural Credit Administration shall have the power to audit their operations. genuine strength in our democratic society. Section 105 directs the loaning activities of the ACA "to stimulate the development of farmers' cooperatives.For the effective supervision of farmers' cooperatives." Section 106 deals with the extension by ACA of credit to small farmers in order to stimulate agricultural production. (4) To apply all labor laws equally and without discrimination to both industrial and agricultural wage earners.It is the policy of the State: (1) To establish owner-cultivatorships and the economic family-size farm as the basis of Philippine agriculture and. Any person who. 113. documents and records in the conduct of such audit or of any inquiry into their affairs. is spelled out in Sections 110 to 118. records and books of account and to issue subpoena and subpoena duces tecum to compel the attendance of witnesses and the production of books." Under Section 112 the sum of P150. invest the ACA with certain rights and powers not accorded to nongovernmental entities. established to support production and/or marketing of agricultural products. Auditing of Operations. Sections 107 to 112 lay down certain guidelines to be followed in connection with the granting of loans. fails to obey such subpoena or subpoena duces tecum shall. interest and supervision of credit. of the Land Reform Code. inclusive. Declaration of Policy. divert landlord capital in agriculture to industrial development. and a source of To provide a more vigorous and systematic land resettlement program and public land distribution. (2) To achieve a dignified existence for the small farmers free from pernicious institutional restraints and practices. 2.000 was appropriated out of national funds to finance the additional credit functions of the ACA as a result of the land reform program laid down in the Code. insofar as the role of the ACA therein is concerned. . such as security. (3) To create a truly viable social and economic structure in agriculture conducive to greater productivity and higher farm incomes. The implementation of the policy thus enunciated. . inclusive. self-reliant and responsible citizens. thus: "SEC. services and facilities. be liable to ." including those "relating to the production and marketing of agricultural products and those formed to manage and/or own.Page 155 of 328 "Sec. upon application of the head of Agricultural Credit Administration with the proper court. the Development Bank of the Philippines and the Philippine National Bank. Subject to the approval of the President upon recommendation of the Auditor General.The Agricultural Credit Administration is hereby exempted from the payment of all duties. SEC. shall have the power to file and prosecute any and all actions which it may have against any and all officials or employees of farmers' cooperatives arising from misfeasance or malfeasance in office. free of charge any instrument relative to a loan made under this Code. the Agricultural Credit Administration may write-off from its books. 116." The power to audit the operations of farmers' cooperatives and otherwise inquire into their affairs. . taxes. SEC. 75 was promulgated. is in the nature of the visitorial power of the sovereign. On March 19. or where the debtor has been verified to have no income or property whatsoever with which to effect payment. including docket and sheriff's fees. SEC. levies. in the performance of its functions and in the exercise of its powers hereunder. It is entitled: "Rendering in Full Force and Effect the Plan of Reorganization Proposed by the Special Committee on Reorganization of Agencies for Land Reform for the Administrative Machinery of the Agricultural Land Reform Code. of whatever nature or kind. In all cases. . to suspension or removal from office.Page 156 of 328 punishment for contempt in the manner provided by law and if he is an officer of the Association. Free Notarial Service. SEC. Prosecution of Officials. unsecured and outstanding loans and accounts receivable which may become uncollectible by reason of the death or disappearance of the debtor. 114. as given by Section 113. 118." and contains the following pertinent provisions: "Section 3. 115. which only a government agency specially delegated to do so by the Congress may legally exercise. in his capacity as notary ex-oficio. . persons from one agency may be freely assigned to positions in another agency within the LRPA when the interest of the service so demands. Free Registration of Deeds. . the writing-off shall be after five years from the date the debtor defaults. through the appropriate provincial or city fiscal. and fees.Any register of deeds shall accept for registration. 1964 Executive Order No. .Any justice of the peace. Writing-off Unsecured and Outstanding Loans. The Land Reform Project Administration (+) shall be considered a single organization and the personnel complement of the member agencies including the legal officers of the Office of the Agrarian Counsel which shall provide legal services to the LRPA shall be regarded as one personnel pool from which the requirements of the operations shall be drawn and subject only to the civil service laws. 117. rules and regulations. Taxes and Levies.The Agricultural Credit Administration. SEC. ( . shall render service free of charge to any person applying for a loan under this Code either in adminis tering the oath or in the acknowledgement of instruments relating to such loan. Exemption from Duties. should there be no visible means of collecting the same in the foreseeable future. particularly in the consideration of person next in rank. not a proprietary. and far that purpose Executive Order No.000. position classification and wage structures. as follows: "Appointments of officials and employees of the National Land Reform Council and its agencies may be made only by the President. together with the other member agencies. 7) ( . subject only to Civil Service laws. 3844 is most certainly a governmental. to pinpoint responsibility for many losses in the government. rules and regulations. 75 has placed the ACA under the Land Reform Project Administration. July 3. 1963) "The reason is obvious. When the Agricultural Reform Code was being considered by the Congress. 3. such appointments should be prepared for the signature of the Executive Secretary." "Senator Manglapus: "x x x But assuming that hypothesis. It is supposed to be a public service of the government to the lessees and farmer-owners of the lands that may be bought after expropriation from owners. shall be made applicable to the Land Reform Project Ad ministration as a single agency so that qualified individuals in one member agency must be considered in considering promotion to higher positions in another member agency. the personnel complement of all of which are placed in one single pool and made available for assignment from one agency to another." (+). The government should not exact a higher interest than what we are telling a private landowner now in his relation to his tenants if we give to their farmers a higher rate of interest x x x . 17 & 18. "Section 5. 1964.to pinpoint responsibility for many losses x x x. as stated in a 1st indorsement by his office to the Chairman of the National Reform Council dated May 22. pursuant to the provisions of Section 79(D) of the Revised Administrative Code. in order to avoid irresponsible lending of government money -." (pp.Page 157 of 328 "Section 4. rules and regulations with respect to promotions. In accordance with the policy and practice. It is the government here that is the lender. that is the reason why we are appropriating P150. The appointing authority in respect of the officials and employees of the ACA is the President of the Philippines." The implementation of the land reform program of the government according to Republic Act No. The Civil Service laws.000. function. Senate Journal No. 'By Authority of the President'. Senate Journal No. 16.00 for the Agricultural Credit Administration which will go to intensified credit operations on the barrio level x x x" (p. the nature of the ACA was the subject of the following exposition on the Senate floor: "Senator Tolentino: x x x "The ACA is not going to be a profit making institution. The Land Reform Project Administration shall be considered as one organization with respect to the standardization of job descriptions position classification and wage and salary structures to the end that positions involving the same or equivalent qualifications and equal responsibilities and effort shall have the same remuneration. and hence against the grant of their basic petition for certification election as proper bargaining units. Here of course this development was envisioned. 7. (++) such as those relating to the maintenance of peace and the prevention of crime. have rendered this traditional classification of the functions of government quite unrealistic. those regulating property and property rights. The growing complexities of modern society. 4 & 5 of Senate Journal No. and only "because it was better equipped to administer for the public welfare than is any private individual or group of individuals. so that the Agricultural Credit Administration will concentrate entirely on the facilitation of credit on the barrio level with the massive support of 150 million provided by the government. Senate Journal No. The ACA is a government office or agency engaged in governmental. 1963) "x x x But by releasing them from this situation. such constituent functions are exercised by the State as attributes of sovereignty. 875. which on the barrio level will provide them that credit directly x x x". The considerations set forth above militate quite strongly against the recognition of collective bargaining powers in the respondent Unions within the context of Republic Act No.Page 158 of 328 "That it is the reason why we are providing for the expansion of the ACCFA and the weeding out of the cooperative activity of the ACCFA and turning this over to the Agricultural Productivity Commission. we feel that we are putting them in a much better condition than that in which they are found by providing them with a business-like way of ob taining credit. no less than. x x x" (pp. the exercise of which is optional on the part of the government. 1963 (underscoring supplied)". There can be no dispute as to the fact that the land reform program contemplated in the said Code is beyond the capabilities of any private enterprise to translate into reality. say. (p. a government office. the es tablishment and ( + . not depending on a paternalistic system but one which is business-like--that is to say. established to carry out its purposes. by the Constitution itself in its declaration of principle concerning the promotion of social justice. These functions may not be strictly what President Wilson described as "constituent" (as distinguished from "ministrant"). however. progress and prosperity of the people . Under this traditional classification. the ACA among them. Here as almost everywhere else the tendency is undoubtedly towards a greater socialization of economic forces. The areas which used to be left to private enterprise and initiative and which the government was called upon to enter optionally. indeed adopted as a national policy."+ continue to lose their well-defined boundaries and to be absorbed within activities that the government must undertake in its sovereign capacity if it is to meet the increasing social challenges of the times. and not merely to promote the welfare. those relating to the administration of justice and the determination of political duties of citizens. July 3. July 3. It is a purely governmental function. and those relating to national defense and foreign relations.these latter functions being ministrant. 40. 7. not proprietary functions. It was in furtherance of such policy that the Land Reform Code was enacted and the various agencies. not to say obsolete. plans and programs vested no longer in a Board of Governors. The Unions. contend that no such condition existed in the bargaining contract. L21824).R. we hold that the respondent Unions are not entitled to the certification election sought in the Court below." ++ With the reorganization of the ACCFA and its conversion into the ACA under the Land Reform Code and in view of our ruling as to the governmental character of the functions of the ACA. It is to be noted that under Section 3. any vestige of doubt as to the governmental character of its functions disappears. 67. What remains to be resolved is the question of fringe benefits provided for in the collective bargaining contract of September 4. as in fact the said unions did strike in 1962 against the ACCFA (G. in the unfair labor practice case filed by the ACCFA. In view of the foregoing premises. itself a government instrumentality. and the respondent Court upheld this contention in its decision. 875. on the other hand. the same "shall not become effective unless and until the same is duly ratified by the Board of Governors of the Administration. Such certification is admittedly for purposes of bargaining in behalf of the employees with respect to terms and conditions of employment. the law itself declares that the ACA is a government office. 11 Prohibition Against Strike in the Government.Page 159 of 328 maintenance of public schools and public hospitals. are governed by law and it is declared to be the policy of this Act that employees therein shall not strike for the purposes of securing changes or modification in their terms and conditions of employment. of the agreement. Article XIV. And when. that this section shall apply only to employees employed in governmental functions of the Government including but not limited to governmental corporations. However. including the right to strike as a coercive economic weapon. 1963. No.The terms and conditions of employment in the Government. with the formulation of policies. particularly insofar as the order to bargain collectively with the respondent Unions is concerned. the decision of the respondent Court dated March 25. aside from the governmental objectives of the ACA. geared as they are to the implementation of the land reform program of the State. No. and the resolution en banc affirming it.R. The position of the ACCFA in this regard is that the said fringe benefits have not become enforceable because the condition that they should first be approved by the Office of the President has not been complied with. 1961. Such employees may belong to any labor organization which does not impose the obligation to strike or to join in strike: Provided. which provides: "SEC.+ This is contrary to Section 11 of Republic Act No. has become moot and academic. Regular + + . but in the National Land Reform Council. and that its personnel are subject to Civil Service laws and to rules of standardization with respect to positions and salaries. including any political subdivision or instrumentality thereof. . L-21484. which decision is the subject of the present review in G. by virtue of "Resolution No." Such approval was given even before the formal execution of the agreement. as in the case of the ACCFA. FY 1960-61. 1963 shall be paid to all employees entitled thereto." On July 24. On October 23.. however.Page 160 of 328 Meeting No. 1963. All benefits accruing after July 1." The condition is. 1962 the Office of the President. shall be allowed to accumulate but payable only after all benefits accruing up to June 30. 2) Cost of Living Adjustment and Longevity Pay. 3) The unpaid balance due employees on Item A (1) and (2) this paragraph shall be paid in monthly installments as finances permit but not beyond December 20.. and hence justifies the conclusion that this particular condition imposed by the Office of the President in its approval of the bargaining contract was satisfied. 1963 the ACCFA management and the Unions entered into an agreement for the implementation of the decision of the respondent Court concerning the fringe benefits. only Cost of Living Adjustment." On July 1. therefore. are believed to be reasonable considering the exigencies of the service and the welfare of the employees. and are well within the financial ability of the particular corporation to bear. held August 17. 1963. 1961 to June 30. provided. . 1963 and for a period of only two (2) months thereafter (during which period the ACCFA and the Unions shall negotiate a new Collective Bargaining Agreement) the provisions of the September 4. in the following manner: (A) The sum of P180. as per CIR decision hereinabove referred to shall have been settled in full.000 shall be set aside for the payment of: 1) Night differential benefits for Security Guards. 1961. 7. that commencing July 1. 3450-ULP. except as to Cost of Living Adjustment and "political" or non-economic privileges and benefits thereunder. but with the express qualification that the same was "without prejudice to the pending appeal in the Supreme Court. pursuant to the provision thereof requiring such ratification. expressed its approval of the bargaining contract "provided the salaries and benefits therein fixed are not in conflict with applicable laws and regulations. to our mind. in a letter signed by the Executive Secretary. deemed to be incorporated into the agreement by reference. 3. thus: "In the meantime." The payment of the fringe benefits agreed upon. shows that the same were within the financial capability of the ACCFA then. Longevity Pay.in Case No. and Night Differential Benefits accruing from July 1. 1963." but with the proviso that "the fringe benefits contained therein shall take effect only if approved by the office of the President. 1961 Collective Bargaining Agreement shall be temporarily suspended. 1963 the ACCFA Board of Governors ratified the agreement thus entered into. there is no reason to set aside the decision of the respondent Court. Nov. supra. JJ. Agricultural Productivity Commission. upon the recommendation of the chief of bureaus or office concerned... Teehankee. Castro. 19-20. but that since the respondent Unions have no right to the certification election sought by them nor. No costs. may petition for a certification election and compel the employer to bargain collectively with it for purposes other than to secure changes or modifications in the terms and conditions of their employment. 75) ( +) Section 79(D) of the Revised Administrative Code provides in part: "The Department Head. Dizon. 29. ( +) The Land Reform Project Administration is the organization through which the field operations of member agencies (of which the ACA is one) shall be undertaken by their respective personnel under a unified administration. p. Concepcion. consequently. J. Reyes. + Land Authority. It must be stated.G. Malcolm. C. in the result. The decisions and orders appealed from are set aside and/or modified in accordance with the foregoing pronouncements. G. 2800. no further fringe benefits may be demanded on the basis of any collective bargaining agreement. pp.J. concurs in a separate opinion." ( ++) Bacani vs. Bacani vs. x x x. Sanchez. concur. Land Bank. albeit obiter. it may not be amiss to observe. which is allowed under the legal provision just quoted provided such organization does not impose the obligation to strike or to join in strike. shall appoint all subordinate officers and employees whose appointments is not expressly vested by law in the President of the Philippines. L-9657. (Section 2 of Article 1. Zaldivar. National Coconut Corporation. that we do not here decide the question . Office of the Agrarian Counsel. and Barredo. The Government of the Philippines.Page 161 of 328 We hold therefore that insofar as the fringe benefits already paid are concerned. Withal. however.R. National Coconut Corporation.. 1956. No. Executive Order No. to bargain collectively with the petitioner. 53 O. Fernando. that the right to organize thus allowed would be meaningless unless there is a correlative right on the part of the organization to be + ( ( ( + + .not at issue in this case .. JJ.of + + whether or not a labor organization composed of employees discharging governmental functions. L. Regina Bustos. 2670. which respectively. situated in the Barrio of Poro. vs. L. Cleopatra Llana. 1 and 4. Transfer Certificate No. R. and on the NW. with 508 square meters. On April 11.571 square meters. 1960. 28(c) of the Civil Service Act of 1959. COURT OF APPEALS [Special Former Twelfth Division]. 1. by the Foreshore. respondents. No. BRANCH 26 (San Fernando City. 1958. 143377. THE HON. such as those provided for in Section 28(b) of Republic Act No. 1960. over four parcels of land – Lot 1 with 6. with 16. concerning complaints and grievances of the employees. San Fernando. 5. 2260. + + Reenacted in Sec. 2000. R. 2260. T-4304 was issued in favor of the buyers covering Lots No. 1 is described as: A parcel of land (Lot 1. Before the Court is a petition for certiorari filed by Shipside Incorporated under Rule 65 of the 1997 Rules on Civil Procedure against the resolutions of the Court of Appeals promulgated on November 4. Shipside Incorporated v. Original Certificate of Title No. bounded on the NE. Lot 2. February 20. Court of Appeals.583 square meters. 36 from B. Lot No. C. Municipality of San Fernando. petitioner. . Record No. and Lot 4. on the SW. REGIONAL TRIAL COURT. La Union) & The REPUBLIC OF THE PHILIPPINES. 2001] SHIPSIDE INCORPORATED. No. L. 9115 OCT No. HON. Lots No.777 square meters. R.A. being S. by an old Barrio Road. 0-381 was issued in favor of Rafael Galvez. N-14012. 352 SCRA 334 (2001) [G. L. M. Province of La Union. Consequently. by Public Land and property of the Benguet Consolidated Mining Company. Plan PSU-159621. The antecedent facts are undisputed: On October 29. by properties of Rafael Galvez (US Military Reservation Camp Wallace) and Policarpio Munar. on the SE. 0-381 on August 10. 1999 and May 23. Lot 3 with 1. thence + . Beginning at a point marked “1” on plan.Page 162 of 328 recognized as the proper representative of the employees and to bargain in their behalf in relation to matters outside the limitations imposed by the statute. dismissed a petition for certiorari and prohibition and thereafter denied a motion for reconsideration. 1 and 4 were conveyed by Rafael Galvez in favor of Filipina Mamaril. 11’W. 74 deg. and Erlinda Balatbat in a deed of sale which was inscribed as Entry No. Case No.R. N-361. Applicant.571) SQUARE METERS. and marked on the ground. N. 45’W. S. to point 3. N-361 L. unknown to Lepanto Consolidated Mining Company. 4 has the following technical description: A parcel of land (Lot 4. L. to point 5. 1 and 4. to point 2. N. 27. L. 1960. San Fernando. 66 deg. thence S. Eliza Bustos. The Order pertinently provided: Accordingly. from B. N. by property of Pelagia Carino. 21’W. date of survey. are null and void. 19’E. issued an Order in Land Registration Case No. Beginning at a point marked “1” on plan. date of survey. 52 deg.00 m. to point 4.79 m. 11. L. 75. sold Lots No. 69 m. containing an area of FIVE HUNDED AND EIGHT (508) SQUARE METERS. Subsequently. 42. 01 m. The deed of sale covering the aforesaid property was inscribed as Entry No. Second Judicial District. deg. 0-381 of the Registry of Deeds for the Province of La Union issued in the name of Rafael Galvez. N-14012).92 m. On August 16. Camp Wallace). 1 and 4 to Lepanto Consolidated Mining Company. 31’E. 14 deg. 13. N-361 (LRC Record No.00 m. 32’W. to the point of beginning. S. 21 deg. February 4–21.00 m. Record No. 45’W.90 m.. 9173 on TCT No. 1963. Mamaril. more or less. S. to the point of All beginning. N-361 and Original Certificate No. containing an area of SIX THOUSAND FIVE HUNDRED AND SEVENTY-ONE (6. La Union. more or less. 6. 12 deg. Plan PSU-159621. bearings true.. On February 1. 03 m. Transfer Certificate No. null and void. 36. 0-381 of the Registry of Deeds for the province of La Union issued in virtue thereof and registered in the name of Rafael Galvez. 12 deg.. Lot No. 24’W. R. 59’W. 1957. to point 7. . Bounded on the SE by the property of the Benguet Consolidated Mining Company. All points referred to are indicated on the plan. 12 deg. and on the NW by the property of Rafael Galvez (US Military Reservation. the Court of First Instance of La Union..95 m. Parties-In-Interest. to point 6. 45’W. 134. N14012) entitled “Rafael Galvez.. Republic of the Philippines... the Register of Deeds for the Province of La Union is hereby ordered to cancel the said original certificate and / or such other certificates of title points referred to are indicated in the plan and marked on the ground. . Movant” declaring OCT No. with the foregoing. Case No. et al. 1957. N. 69 deg.. on the S.. 106. T-4304. 79 deg. being S. it is hereby declared and this court so holds that both proceedings in Land Registration Case No. C. to point 3. 1.Page 163 of 328 S.. situated in the Barrio of Poro. 85 m. R. 73. et al. February 4-21. 23 deg. bearings true. 57’W. and without prejudice on the rights of incidental parties concerned herein to institute their respective appropriate actions compatible with whatever cause they may have. 26’E. M. to point 2. T-4314 was issued in the name of Lepanto Consolidated Mining Company as owner of Lots No. N. 2591. and ordered the cancellation thereof.. Municipality of San Fernando. ” The evidence shows that the impleaded defendants (except the Register of Deeds of the province of La Union) are the successors-in-interest of Rafael Galvez (not Reynaldo Galvez as alleged by the Solicitor General) over the property covered by OCT No. 12381. namely: (a) Shipside Inc. T-4916. N-361 issued a writ of execution of the judgment which was served on the Register of Deeds. 1999. 1974. 6346 entitled. on January 14. 1 and 4. John Hay Poro Point Development Corporation. 0-381. La Union on April 29. 1973. N-361 have not been executed by the Register of Deeds. San Fernando. Case No. 36061-R.079 square meters. 3 of OCT No. On October 28. 0-381. 1965. Thereafter. the Court of Appeals ruled in favor of the Republic of the Philippines in a Resolution promulgated on August 14. 0-381 null and void. C. Filipina Mamaril. the Court of Appeals issued an Entry of Judgment. The motion was denied on January 25. “Republic of the Philippines. On April 22. (b) Elisa Bustos. 1 and 4 covered by TCT No. . 1974. R. certifying that its decision dated August 14. 1963. No. and Teresita Tan who are the registered owners of Lot No. 2 of OCT No. On April 21. 1973 in CA-G. 1999. 0-381. with an area of 1. No. Plaintiff. San Fernando. Elisa Bustos. T-5710. In the meantime. 1 and 4. versus Heirs of Rafael Galvez. T-5710 was thus issued in favor of the petitioner which starting since then exercised proprietary rights over Lots No. the Office of the Solicitor General received a letter dated January 11. 1973 became final and executory on October 23. La Union) docketed therein as Civil Case No. Vice-President. Regina Bustos and Erlinda Balatbat who are the registered owners of Lot No. Jesusito Galvez. the Office of the Solicitor General filed a complaint for revival of judgment and cancellation of titles before the Regional Trial Court of the First Judicial Region (Branch 26. Defendants. Regina Bustos. Transfer Certificate of Title No. C. represented by Teresita Tan. Floresca. Victor G. now covered by TCT No. San Fernando. Lepanto Consolidated Mining Company sold to herein petitioner Lots No. Twenty four long years thereafter.Page 164 of 328 issued subsequent thereto having reference to the same parcels of land. Rafael Galvez filed his motion for reconsideration against the order issued by the trial court declaring OCT No. 4314 as entry No. R. stating that the aforementioned orders and decision of the trial court in L. R. Erlinda Balatbat.583 square meters. Reynaldo Mamaril. with the deed being entered in TCT NO. On appeal. with a total area of 7. Shipside Incorporated and the Register of Deeds of La Union. 1999 from Mr. without pronouncement as to costs. La Union despite receipt of the writ of execution. the trial court in L. which is presently the registered owner in fee simple of Lots No.and (c) Elisa Bustos. under the signature of Lorenzo Balbin. 55535. that: (1) the real party-in-interest is the Republic of the Philippines. On November 4. 0-381. An opposition to the motion to dismiss was filed by the Solicitor General on August 23. 2000.. Jr.R. and the subsequent Torrens titles issued in their .R. based on the following grounds: (1) the complaint stated no cause of action because only final and executory judgments may be subject of an action for revival of judgment. which ruling was subsequently affirmed by the Court of Appeals. there being no proof therein that Balbin was authorized to institute the petition for and in behalf and of petitioner.and (2) petitioner was unable to show that it had substantially complied with the rule requiring proof of authority to institute an action or proceeding. 1999. the defendants-successors-in-interest of Rafael Galvez have no valid title over the property covered by OCT No. the Court of Appeals denied petitioner’s motion for reconsideration on the grounds that: (1) a complaint filed on behalf of a corporation can be made only if authorized by its Board of Directors. (3) plaintiff’s cause of action is barred by prescription. and in the absence thereof. 361 had ruled and declared OCT No. alleging among others.Page 165 of 328 In its complaint in Civil Case No. 1999. 1999. 1999. docketed therein as CA-G. was made without authority. 0-381 to be null and void. its motion for reconsideration was likewise turned down. 1999.and (2) prescription does not run against the State. such action may be brought only within ten (10) years from the time the judgment had been rendered. SP No. On July 22. the trial court denied petitioner’s motion to dismiss and on October 14. SP No. petitioner Shipside. the Court of Appeals dismissed the petition in CA-G. 7227. On August 31. On May 23. 6346. on the ground that the orders of the trial court denying its motion to dismiss and its subsequent motion for reconsideration were issued in excess of jurisdiction. names should be consequently cancelled. Hence. 55535 on the ground that the verification and certification in the petition. (2) the plaintiff is not the real party-in-interest because the real property covered by the Torrens titles sought to be cancelled. the instant petition. were under the ownership and administration of the Bases Conversion Development Authority (BCDA) under Republic Act No. the Solicitor General argued that since the trial court in LRC Case No. Inc. petitioner instituted a petition for certiorari and prohibition with the Court of Appeals. allegedly part of Camp Wallace (Wallace Air Station). filed its Motion to Dismiss. 1999. On October 21. no action for revival of judgment may be instituted because under Paragraph 3 of Article 1144 of the Civil Code. the petition cannot prosper and be granted due course. (4) twenty-five years having lapsed since the issuance of the writ of execution. a corporation exercises said powers through its board of directors and / or its duly authorized officers and agents. 264 SCRA 11 [1996]). The issues posited in this case are: (1) whether or not an authorization from petitioner’s Board of Directors is still required in order for its resident manager to institute or commence a legal action for and in behalf of the corporation. The Honorable Court of Appeals gravely abused its discretion in dismissing the petition when it made a conclusive legal presumption that Mr. who signed for and in behalf of petitioner in the verification and certification of non-forum shopping portion of the petition. In order to preserve the rights of herein parties. its claims are imprescriptible. and (2) whether or not the Republic of the Philippines can maintain the action for revival of judgment herein. (2) the real party-in-interest in the case at bar being the Republic of the Philippines. who was the signatory in the verification and certification on non-forum shopping. Thus. In his Comment. in violation of clear laws and jurisprudence. Inc. has no power except those expressly conferred on it by the Corporation Code and those that are implied or incidental to its existence. in effect affirming the grave abuse of discretion committed by the lower court when it refused to dismiss the 1999 Complaint for Revival of a 1973 judgment. CA. the Court issued a temporary restraining order on June 26. thus the latter court acted correctly in dismissing the same. 2000 enjoining the trial court from conducting further proceedings in Civil Case No. 2. the resident manager for petitioner. respectively. Anent the first issue: The Court of Appeals dismissed the petition for certiorari on the ground that Lorenzo Balbin. In turn. We find for petitioner. In turn. failed to show proof that he was authorized by petitioner’s board of directors to file such a petition. Petitioner likewise adopted the arguments it raised in the petition and comment/reply it filed with the Court of Appeals. Shipside. the Solicitor General moved for the dismissal of the instant petition based on the following considerations: (1) Lorenzo Balbin. attached to its petition as Exhibit “L” and “N”.Page 166 of 328 In support of its petition. Inc. it has been observed that the power of a corporation to sue and be sued in any court is lodged with the board of directors that exercises its corporate powers (Premium Marble Resources. The Honorable Court of Appeals abused its discretion when it dismissed the petition. jurisprudence and Secretary’s certificate to the contrary. failed to show proof of his authorization to institute the petition for certiorari and prohibition with the Court of Appeals. A corporation. such as petitioner. . v. Balbin had no authority to sign the petition despite the clarity of laws. asseverates that: 1. 6346. 2000). Verification is simply intended to secure an assurance that the allegations in the The court may order the correction of the pleading if verification is pleading are true and correct and not the product of the imagination or a matter of speculation. et. the Court had dismissed Uy’s petition for lack of verification and certification against non-forum shopping. if the attending circumstances are such that strict compliance with the rules may be dispensed with in order that the ends of justice may thereby be served. as a consequence of which the petition was dismissed by the Court of Appeals. In the instant case. however. Section 5. In Roadway Express. LandBank. lacking or act on the pleading although it is not verified. It is undisputed that on October 21. 136100. or ten days prior to the filing of the petition. (264 SCRA 696 [1996]). it subsequently reinstated the petition after Uy submitted a motion to admit certification and non-forum shopping certification. petitioner filed a motion for reconsideration. 1999. In all these cases. non-compliance with which does not necessarily render the pleading fatally defective. the lack of certification against forum shopping is generally not curable by the submission thereof after the filing of the petition. G. Balbin had been authorized by petitioner’s board of directors to file said petition. the merits of petitioner’s case should be considered special circumstances or compelling reasons that justify tempering the requirement in regard to the certificate of non-forum . there was no proof attached thereto that Balbin was authorized to sign the verification and non-forum shopping certification therein. In Uy v. can be performed only by natural persons duly authorized for the purpose by corporate by-laws or by a specific act of the board of directors. Court of Appeals. Court of Appeals. The same rule applies to certifications against forum shopping signed by a person on behalf of a corporation which are unaccompanied by proof that said signatory is authorized to file a petition on behalf of the corporation. there were special circumstances or compelling reasons that justified the relaxation of the rule requiring verification and certification on non-forum shopping. shall be sufficient ground for the dismissal thereof. et. LandBank. attaching to said motion a certificate issued by its board secretary stating that on October 11. the time petitioner’s Resident Manager Balbin filed the petition. On the other hand.Page 167 of 328 physical acts of the corporation. the Court allowed the filing of the certification 14 days before the dismissal of the petition.R. not jurisdictional (Uy v. the Court has allowed the belated filing of the certification. supra. al. like the signing of documents. Such requirement is simply a condition affecting the form of the pleading. The Court has consistently held that the requirement regarding verification of a pleading is formal. and that the pleading is filed in good faith. In certain exceptional circumstances. In Loyola v. including the certification against forum shopping. However. subsequent to such dismissal. v. No. 1999. Rule 45 of the 1997 Rules of Civil Procedure provides that the failure of the petitioner to submit the required documents that should accompany the petition. (245 SCRA 477 [1995]). the Court considered the filing of the certification one day after the filing of an election protest as substantial compliance with the requirement. However. Inc. July 24. al. argues that the State’s cause of action in the cancellation of the land title issued to petitioner’s predecessor-in-interest is imprescriptible because it is included in Camp Wallace. Now to the second issue: The action instituted by the Solicitor General in the trial court is one for revival of judgment which is governed by Article 1144(3) of the Civil Code and Section 6. While Camp Wallace may have belonged to the government at the time Rafael Galvez’s title was ordered cancelled in Land Registration Case No. but that after the lapse of such time. this oversight. and Uy. From the records of this case. Article 1144(3) provides that an action upon a judgment “must be brought within 10 years from the time the right of action accrues. Rule 39 of the 1997 Rules on Civil Procedure. That petitioner subsequently submitted a secretary’s certificate attesting that Balbin was authorized to file an action on behalf of petitioner likewise mitigates extinctive prescription considering that such an action can be instituted only within ten (10) years from . On the other hand. The argument is misleading. a judgment may be enforced by action. 1973. the time the cause of action accrues. While the swift unclogging of court dockets is a laudable objective. Moreover. It must also be kept in mind that while the requirement of the certificate of non-forum shopping is mandatory.Page 168 of 328 shopping. With more reason should we allow the instant petition since petitioner herein did submit a certification on non-forum shopping . Taking these two provisions into consideration. the same may not be invoked by the government in this case since it is no longer interested in the subject matter. the action for revival of judgment was instituted only in 1999. NLRC. nonetheless the requirements must not be interpreted too literally and thus defeat the objective of preventing the undesirable practice of forum-shopping ( Bernardo v. The Solicitor General. the action is barred by than twenty-five (25) years after the judgment had become final. in Loyola. 255 SCRA 108 [1996]). technical rules of procedure should be used to promote. Roadway. the same no longer holds true today. it is plain that an action for revival of judgment must be brought within ten years from the time said judgment becomes final. Lastly. N-361. it is clear that the judgment sought to be revived became final on October 23. and before it is barred by the statute of limitations. or more Hence. nonetheless. While it is true that prescription does not run against the State. Rule 39 provides that a final and executory judgment or order may be executed on motion within five (5) years from the date of its entry. which belongs to the government." On the other hand. the granting of substantial justice is an even more urgent ideal. Section 6. not frustrate justice. the Court excused non-compliance with the requirement as to the certificate of non-forum shopping. failing only to show proof that the signatory was authorized to do so. he must appear to be the present real owner of the right sought to enforced ( Pioneer Insurance v. as amended. San Miguel Naval Communications Station. T-5710 issued in the name of petitioner is cancelled. as distinguished from a mere expectancy. Section 4 pertinently provides: Section 4. “To qualify a person to be a real party in interest in whose name an action must be prosecuted. 7227. Mt. Being the owner of the areas covered by Camp Wallace. Rita Station (Hermosa. in general. the Republic is not a real party in interest and it may not institute the instant action. Province of Cebu . Nonetheless. 210 SCRA 526 [1992]). A real party in interest is the party who stands to be benefited or injured by the judgment in the suit. Republic Act No. purposes: (a) To own. hold and/or administer the military reservations of John Hay Air Station. or the party entitled to the avails of the suit. the government no longer has a right or interest to protect. — The Conversion Authority shall have the following Station. excluding those covered by Presidential Proclamations and some 25-hectare area for the radar and communication station of the Philippine Air Force. it has been posited that the transfer of military reservations and their extensions to the BCDA is basically for the purpose of accelerating the sound and balanced conversion of these military reservations into alternative productive uses and to enhance the benefits to be derived from such property as a measure of promoting the economic and social development. it is the Bases Conversion and Development Authority. Nor may it raise the defense of imprescriptibility. Transfer of Wallace Air Station Areas to the Bases Conversion and Development Authority. 1993. Sta. also provides: Section 2. or a future. otherwise known as the Bases Conversion and Development Act of 1992. And by real interest is meant a present substantial interest. are hereby transferred to the Bases Conversion Development Authority … With the transfer of Camp Wallace to the BCDA. issued on July 27. Wallace Air Purposes of the Conversion Authority. Under Section 2 of Rule 3 of the 1997 Rules of Civil Procedure. — All areas covered by the Wallace Air Station as embraced and defined by the 1947 Military Bases Agreement between the Philippines and the United States of America. Section 2 of Proclamation No. Consequently.Page 169 of 328 Republic Act No. It is contended that the transfer of these military reservations to the Conversion Authority does not amount to an abdication on the part of the Republic of its interests. contingent. created the Bases Conversion and Development Authority. particularly of Central Luzon and. CA. the country’s goal for enhancement (Section 2. Bataan) and those portions of Metro Manila military camps which may be transferred to it by the President. 216. O’Donnell Transmitter Station. 175 SCRA 668 [1989]). the same being applicable only in cases where the government is a party in interest. not the Government. subordinate or consequential interest (Ibonilla v. which stands to be benefited if the land covered by TCT No. “every action must be prosecuted or defended in the name of the real party in interest. 7227). but simply a recognition of the need to create a body corporate . Ralla. E. 207 SCRA 652 [1992]). 7227 provides: Section 5. If the suit is not brought in the name of the real party in interest. One having no right or interest to protect cannot invoke the jurisdiction of the court as a party plaintiff in an action ( Ralla v. — There is hereby created a body corporate to be known as the Conversion Authority which shall have the attribute of perpetual succession and shall be vested with the powers of a corporation. However. Section 3 of Republic Act No. . The promotion of economic and social development of Central Luzon. Other corporations have been created by government to act as its agents for the realization of its programs. It is consequently asserted that the Republic remains to be the real party in interest and the Conversion Authority merely its agent. v. GSIS. It may thus be said that the BCDA is not a mere agency of the Government but a corporate body performing proprietary functions. Inc. not the Republic.Page 170 of 328 which will act as its agent for the realization of its program. Marcha Transport Co. yet it is certain that the functions performed by the BCDA are basically proprietary in nature. the Court has ruled that these entities. IAC (147 SCRA 276 [1987]) is cited as authority that the Republic is the proper party to sue for the recovery of possession of property which at the time of the . Section 5 of Republic Act No. NAWASA and the NIA. the former being the real party in interest. it should thus be the BCDA which may file an action to cancel petitioner’s title. 7227 reads: Section 3. We. as was done by petitioner in this case. are not government-function corporations invested with governmental attributes. — To carry out its objectives under this Act. While public benefit and public welfare. although performing functions aimed at promoting public interest and public welfare. the promotion of the economic and social development of Central Luzon. on the ground that the complaint states no cause of action (Tanpingco v. in general. must not lose sight of the fact that the BCDA is an entity invested with a personality separate and distinct from the government. Moreover. the SSS. Powers of the Conversion Authority. B. however. A suit may be dismissed if the plaintiff or the defendant is not a real party in interest. 199 SCRA 495 [1991]). in particular. and yet. and the country’s goal for enhancement. alter and use a corporate seal which shall be judicially noticed. a motion to dismiss may be filed. to count a few. IAC. do not make the BCDA equivalent to the Government. to sue and be sued in such corporate name and to adopt. the Conversion Authority is hereby vested with the following powers: (a) To succeed in its corporate name. may be attributable to the operation of the BCDA. Creation of the Bases Conversion and Development Authority . particularly. It may not be amiss to state at this point that the functions of government have been classified into governmental or constituent and proprietary or ministrant. Having the capacity to sue or be sued. To dismiss the complaint in E. petitioner was not a party to the original suit for cancellation of title commenced by the Republic twenty-seven years for which it is now being made to answer.. B. nay. a claim which is not available to the BCDA. B. although artificial bodies of its own creation. the Republic of the Philippines did not intend to retain the said rentals for its own use. LeHigh Valley Coal Co. to recognize the Government as a proper party to sue in this case would set a bad precedent as it would allow the Republic to prosecute. 241 Pa 469). the Republic of the Philippines. considering that by its voluntary act it had transferred the land in question to the Philippine Ports Authority effective July 11. B. In the former. or 5 years after the issuance of the original certificate of title. the Philippine Ports Authority. petitioner must be afforded some measure of protection. directly exercising the commission it had earlier conferred on the latter as its agent. as it did in E. The Republic of the Philippines had simply sought to assist. on behalf of government-owned or controlled corporations. not supplant. No. Marcha would have brought needless delay in the settlement of the matter since the PPA would have to refile the case on the same Such is not the case here since to allow the government to sue herein enables it to raise the issue of imprescriptibility. however.Page 171 of 328 institution of the suit was no longer held by the national government but by the Philippine Ports Authority. on the pretext that the Government is the real party in interest against whom prescription does not run. B. a claim which cannot be raised by the BCDA. being made to suffer financial losses. having acquired the property in 1963. causes of action which have already prescribed. The rule that prescription does not run against the State does not apply to corporations or artificial bodies created by the State for special purposes. Marcha. We may presume that. Marcha is. 857. D. shall be turned over by it to the Philippine Ports Authority conformably to the purposes of P. claim already litigated upon. a course of action proscribed by said case. it even supplants the latter. acted as principal of the Philippine Ports Authority. by doing so. It should also be noted that petitioner is unquestionably a buyer in good faith and for value. the Court considered the Republic a proper party to sue since the claims of the Republic and the Philippine Ports Authority against the petitioner therein were the same. are in the same category as ordinary persons (Kingston v. its grantees. the Court ruled: It can be said that in suing for the recovery of the rentals. once collected by the Republic of the Philippines. not on all fours with the case at bar. Marcha. Parenthetically. it being said that when the title of the Republic has been divested. In E. 1974. E. the Government not only assists the BCDA. whose title to the disputed property it continues to recognize. By raising the claim of imprescriptibility. as a third transferee. We may expect then that the said rentals. Moreover. said corporations having been created merely as agents for the realization of government programs. If only not to do violence and to give some measure of respect to the Torrens System. . concur. La Union) in Civil Case No. et al. WHEREFORE. however. 6346 entitled “Republic of the Philippines. Panganiban. et. . SEPARATE OPINION VITUG. otherwise known as the Bases Conversion and Development Act of 1992. and Sandoval-Gutierrez. as Judge. La Union entitled “Republic of the Philippines. R. and the Republic of the Philippines. the petition is hereby granted and the orders dated August 31. .Page 172 of 328 One more point. Regional Trial Court. authorizes the transfer of the military reservations and their extensions to the conversion Authority. the same. if not brought within ten (10) years from the time the right of action accrues. Respondents” are hereby reversed and set aside. San Fernando City. Plaintiff.. al. Inc. Branch 26.. versus Heirs of Rafael Galvez. versus Heirs of Rafael Galvez. Alfredo Cajigal. I still am unable to subscribe to the idea that prescription may not be invoked by the government in this case upon the thesis that the transfer of Camp Wallace to the Bases Conversion Development authority renders the Republic with no right or interest to protect and thus unqualified under the rules of procedure to be the real party-in-interest. With due respect. Vitug. J. We find it unnecessary to rule on the other matters raised by the herein parties. 1999 of the Regional Trial Court of the First National Judicial Region (Branch 26. SO ORDERED. pursuant to Article 1144(3) of the New Civil Code. 1999 and May 23. Gonzaga-Reyes. it is alienable and registerable real property. however. Mr. The complaint in Civil Case No. 2000 by the Court of Appeals (Twelfth Division) in CA-G. Since the portion in dispute now forms part of the property owned and administered by the Bases Conversion and Development Authority. Petitioner versus Hon. 1999. While it is true that Republic Act 7227. 6346. 1999 and October 4. without prejudice to the filing of an appropriate action by the Bases Development and Conversion Authority." is ordered dismissed.: I find no doctrinal difficulty in adhering to the draft ponencia written by our esteemed Chairman. Branch 26. Please see separate opinion. RTC. SP No. is basically for the It appears that the judgment in the instant case has become final on 23 October 1973 or well more than two decades prior to the action for its revival instituted only in . J. insofar as it declares that an action for revival of judgment is barred by extinctive prescription. San Fernando. JJ. San Fernando. Plaintiff. 55535 entitled “Shipside. Justice JARM. Defendants” as well as the resolutions promulgated on November 4. La Union. considering that by its voluntary act it had transferred the land in question to the Philippine Ports authority effective July 11. the republic of the Philippines did not intend to retain the said rentals for its own use. ii[2] the Court succinctly resolved the issue of whether or not the Republic of the Philippines would be a proper party to sue for the recovery of possession of property which at time of the institution of the suit was no longer being held by the national government but by the Philippine Ports Authority. B. vs. “It can be said that in suing for the recovery of the rentals. acted as principal of the Philippine Ports Authority. Marcha Transport Co.Page 173 of 328 purpose of accelerating the sound and balanced conversion of these military reservations into alternative productive uses and to enhance the benefits to be derived from such property as a measure of promoting the economic and social development. not supplant. and it was only in 1992 that the subject military camp was transferred to the Conversion Authority. The Republic of the Philippines had simply sought to assist. the Republic of the Philippines. whose title to the disputed property it continues to recognize. Such a decision would require the Philippine Ports Authority to refile the very same complaint already proved by the Republic of the Philippines and bring . dismissing the complaint on the ground that the Republic of the Philippines is not the proper party would result in needless delay in the settlement of this matter and also in derogation of the policy against multiplicity of suits. . back the parties as it were to square one. We may presume that. Intermediate Appellate Court. 857. in general. Inc. The Court ruled: It ought to follow that the Republic remains to be the real party-in-interest and the Conversion authority being “More importantly. D.i[1] The transfer of these military reservations to the Conversion Authority does not amount to an abdication on the part of the Republic of its interests but simply a recognition of the need to create a body corporate which will act as its agent for the realization of its program specified in the Act. merely its agent. shall be turned over by it to the Philippine Ports Authority conformably to the purposes of P. In E. No. of Central Luzon and. particularly. by doing so. the country’s goal for enhancement. as we see it. directly exercising the commission it had earlier conferred on the latter as its agent." There would seem to be no cogent reason for ignoring that rationale specially when taken in light of the fact that the original suit for cancellation of title of petitioner’s predecessor-in-interest was commenced by the Republic itself. the Philippine Ports Authority. We may expect then that the said rentals. once collected by the Republic of the Philippines. 1974. 3083 . 7. State Immunity [See also] Act 3083. Execution. — Subject to the provisions of this Act. at the option of the latter. — No execution shall issue upon any judgment rendered by any court against the Government of the Philippine Islands under the provisions of this Act. either himself or through delegates. 5. A person desiring to avail himself of the privilege herein conferred must show that he has presented his claim to the Insular Auditor 1 and that the latter did not decide the same within two months from the date of its presentation. Art. the Government of the Philippine Islands hereby consents and submits to be sued upon any moneyed claim involving liability arising from contract. Complaint against Government. by way of set-off or counterclaim in a similar action between private parties. ii[2] 147 SCRA 276. 2. 3 within five days after the same becomes final. PD 1807. When the Government of the Philippine Island is plaintiff in an action instituted in any court of original jurisdiction. upon which court exclusive original jurisdiction is hereby conferred to hear and determine such actions. 2180 of Civil Code ACT NO. the defendant shall have the right to assert therein. 4. both original and appellate. CA 327. but a copy thereof duly certified by the clerk of the Court in which judgment is rendered shall be transmitted by such clerk to the Governor-General. Sec. Process in actions brought against the Government of the Philippine Islands pursuant to the authority granted in this Act shall be served upon the Attorney-General 2 whose duty it shall be to appear and make defense.i[1] Section 2. . Sec. C. Sec. which could serve as a basis of civil action between private parties. Republic Act 7227. 3. Sec. — Original actions brought pursuant to the authority conferred in this Act shall be instituted in the Court of First Instance of the City of Manila or of the province were the claimant resides. expressed or implied. 6. Venue. Sec.AN ACT DEFINING THE CONDITIONS UNDER WHICH THE GOVERNMENT OF THE PHILIPPINE ISLANDS MAY BE SUED Section 1. as if the litigants were private parties. Sec. Actions instituted as aforesaid shall be governed by the same rules of procedure. Id. Transmittal of Decision. 4 at the commencement of each regular session of the Legislature. Approved: March 16. 2. 3. Now President of the Philippines. 327 . and if said body determine that payment should be made. 8. exclusive of Sundays and holidays. In case of accounts or claims already submitted to but still pending decision by the Auditor General on or before the approval of this Act. Sundays and holidays excepted. The party aggrieved by the final decision of the Auditor General in the settlement of an account for claim may. Sec. 9. it shall appropriate the sum which the Government has been sentenced to pay. With respect to the accounts of accountable officers. including the same in the appropriations for the ensuing year. If said accounts or claims need reference to other persons. or to a party interested. This Act shall take effect on its approval. within thirty days from receipt of the decision. the Auditor General shall act on the same within one hundred days after their submission. the period aforesaid shall be counted from the time the last comment necessary to a proper decision is received by him.AN ACT FIXING THE TIME WITHIN WHICH THE AUDITOR GENERAL SHALL RENDER HIS DECISIONS AND PRESCRIBING THE MANNER OF APPEAL THEREFROM Section 1. Footnotes 1. In all cases involving the settlement of accounts or claims. 5. after their presentation. office or offices. Now Congress. Section2. COMMONWEALTH ACT NO. other than those of accountable officers. the periods provided in this section shall commence from the date of such approval. Now Solicitor-General. 1923. 4. the Auditor General shall act and decide the same within sixty days. 5 shall transmit to that body for appropriate action all decisions so received by him. — The Governor-General.Sec. take an appeal in writing: . Now Auditor-General. including borrowings in foreign currency. If there are more than one appellant. From a decision adversely affecting the interests of the Government. Approved: June 18. WHEREAS. The appeal shall specifically set forth the particular action of the Auditor General to which exception is taken with the reasons and authorities relied on for reversing such decision. or (c) To the Supreme Court of the Philippines if the appellant is a private person or entity. 1807 PRESCRIBING THE PROCEDURE WHEREBY THE REPUBLIC OF THE PHILIPPINES MAY WAIVE SOVEREIGN IMMUNITY FROM SUIT AND OTHER LEGAL PROCEEDING WITH RESPECT TO ITSELF OR ITS PROPERTY IN CONNECTION WITH FOREIGN OBLIGATIONS CONTRACTED BY IT PURSUANT TO LAW WHEREAS. and to guarantee foreign obligations of corporations and other entities owned or controlled by the Government of the Philippines. WHEREAS. or (b) To the President of the Philippines.(a) To the President of the United States. 1938. pending the final and complete withdrawal of her sovereignty over the Philippines. PRESIDENTIAL DECREE No. recognizing this need. in the pursuit of economic growth and development. existing legislation expressly authorize the Republic of the Philippines to contract foreign obligations. the appeal may be taken by the proper head of the department or in case of local governments by the head of the office or branch of the Government immediately concerned. This Act shall take effect upon its approval. it has become imperative for the Republic of the Philippines to enter into contracts or transactions with international banking. circumstances in the international market may require that sovereign states entering into contracts or transactions make express waivers of sovereign immunity in connection with such contracts or transactions. . Section3. financial and other foreign enterprises. all appeals shall be taken to the same authority resorted to by the first appellant. indirect. The obligation imposed by Article 2176 is demandable not only for one's own acts or omissions. 2180. Procedure for. attachment or executive with respect to its property. it may consent to be sued in connection therewith. NOW. President of the Republic of the Philippines. The President of the Philippines or his duly designated representative may. The father and. I. Waiver of Sovereign Immunity. the mother. and Conditions of. it is in the national interest that a procedure be prescribed with respect to the waiver of sovereign immunity of the Republic of the Philippines in respect of international contracts or transactions entered into by it. in behalf of the Republic of the Philippines. nineteen hundred and eighty-one. For purposes of this decree. FERDINAND E. Done in the City of Manila. Section 2. are responsible for the damages caused by the minor children who live in their company. Guardians are liable for damages caused by the minors or incapacitated persons who are under their authority and live in their company. or contingent obligation or liability capable of pecuniary estimation and payable in a currency other than Philippine currency. contractually agree to waive any claim to sovereign immunity from suit or legal proceedings and from set-off. This Decree shall take effect immediately. this 16th day of January in the year of Our Lord. The owners and managers of an establishment or enterprise are likewise responsible for damages caused by their employees in the service of the branches in which the latter are employed or on . Nothing in this Decree shall be construed to revoke or repeal any waiver of sovereign immunity from suit or legal proceedings or from set-off.WHEREAS. attachment or execution granted under or pursuant to other provisions of law. a foreign obligation means any direct. Section 3. in case of his death or incapacity. In instances where the law expressly authorizes the Republic of the Philippines to contract or incur a foreign obligation. but also for those of persons for whom one is responsible. MARCOS. Validity of existing Waivers. THEREFORE. do hereby order and decree: Section 1. by virtue of the powers vested in me by the Constitution. Effectivity. Art. and to be sued in any appropriate jurisdiction in regard to such foreign obligation. : This is an appeal by both parties from a judgment of the Court of First Instance of the City of Manila in favor of the plaintiff for the sum of P14.000 as claimed by plaintiff in his complaint. so long as they remain in their custody. Counsel for the plaintiff insist that the trial court erred (1) “in limiting the general damages which the plaintiff suffered to P5. Defendant-Appellant. Government. instead of P6. Merritt v. 1916 E.R. 34 Phil.666. GOVERNMENT OF THE PHILIPPINE ISLANDS.the occasion of their functions. vs. Employers shall be liable for the damages caused by their employees and household helpers acting within the scope of their assigned tasks. No. MERRITT.” . instead of P25. The State is responsible in like manner when it acts through a special agent.741. teachers or heads of establishments of arts and trades shall be liable for damages caused by their pupils and students or apprentices. in which case what is provided in Article 2176 shall be applicable. TRENT. J. 311 (1916) EN BANC G. but not when the damage has been caused by the official to whom the task done properly pertains. L-11154 March 21. together with the costs of the cause.” and (2) “in limiting the time when plaintiff was entirely disabled to two months and twenty-one days and fixing the damage accordingly in the sum of P2. Lastly.000 as claimed in the complaint. (1903a) 1.000. The responsibility treated of in this article shall cease when the persons herein mentioned prove that they observed all the diligence of a good father of a family to prevent damage. even though the former are not engaged in any business or industry. Plaintiff-Appellant . The marks revealed that he had one or more fractures of the skull and that the grey matter and brain has had suffered material injury. as is prescribed by the ordinance and the Motor Vehicle Act. upon reaching said avenue. The patient apparently was slightly deaf. (b) in holding that the Government of the Philippine Islands is liable for the damages sustained by the plaintiff as a result of the collision. The trial court’s findings of fact. while blood issued from his nose and he was entirely unconscious. had a light weakness in his eyes and in his mental condition. By reason of the resulting collision. At ten o’clock of the night in question. who examined him on the very same day that he was taken to the General Hospital. Saleeby noticed that the plaintiff’s leg showed a contraction of an inch and a half and a curvature that made his leg very weak and painful at the point of the fracture. his pulse was so weak and so irregular that. are as follows: It is a fact not disputed by counsel for the defendant that when the plaintiff. he was suffering from a depression in the left parietal region. without having sounded any whistle or horn. into the right side of Taft Avenue. the plaintiff was so severely injured that.The Attorney-General on behalf of the defendant urges that the trial court erred: (a) in finding that the collision between the plaintiff’s motorcycle and the ambulance of the General Hospital was due to the negligence of the chauffeur. a wound in the same place and in the back part of his head. the General Hospital ambulance. upon crossing Taft Avenue and when he was ten feet from the southwestern intersection of said streets. there was little hope that he would live. according to Dr. Dr. passing along the west side thereof at a speed of ten to twelve miles an hour. after passing the center thereof. which was the time set for performing the operation. Examination of his head revealed a notable readjustment of the functions of the brain and nerves. in his opinion. who was already six feet from the southwestern point or from the post place there. At another examination six days before the day of the trial.741. instead of turning toward the south. especially when he attempted to use his money . which are fully supported by the record. His right leg was broken in such a way that the fracture extended to the outer skin in such manner that it might be regarded as double and then would be exposed to infection. for which reason it was of the most serious nature. This latter weakness was always noticed when the plaintiff had to do any difficult mental labor. even if it be true that the collision was due to the negligence of the chauffeur. turned suddenly and unexpectedly and long before reaching the center of the street. by which movement it struck the plaintiff. was going toward the western part of Calle Padre Faura. so that it would be on the left side of said avenue. and (c) in rendering judgment against the defendant for the sum of P14. Saleeby. riding on a motorcycle. 741 and which are drawn in question by the plaintiff are (a) P5. According to the various merchants who testified as witnesses. would not prevent recovery for the whole time. therefore. As a contractor. As to the second. is P18. and the trial court so found. find that the amount of damages sustained by the plaintiff. and he had to give up a contract he had for the construction of the Uy Chaco building.666. the amount allowed for the loss of wages during the time the plaintiff was incapacitated from pursuing his occupation. As the negligence which caused the collision is a tort committed by an agent or employee of the Government. which the plaintiff was actually confined in the hospital. We. Wilson. however.for mathematical calculations. he could no longer.075.000. . We find nothing in the record which would justify us in increasing the amount of the first. that the plaintiff’s services as a contractor were worth P1. the record shows. because he was incapacitated from making mathematical calculations on account of the condition of his leg and of his mental faculties. and that after having received the injuries that have been discussed. the award awarded for permanent injuries. as he had before done. and (b) the P2. limited the time to two months and twenty-one days. In this we think there was error.” We may say at the outset that we are in full accord with the trial court to the effect that the collision between the plaintiff’s motorcycle and the ambulance of the General Hospital was due solely to the negligence of the chauffeur. the inquiry at once arises whether the Government is legally liable for the damages resulting therefrom. he had to dissolve the partnership he had formed with the engineer.000 per month. The two items which constitute a part of the P14. As a consequence of the loss the plaintiff suffered in the efficiency of his work as a contractor. The court. The mere fact that he remained in the hospital only two months and twenty-one days while the remainder of the six months was spent in his home. because it was clearly established that the plaintiff was wholly incapacitated for a period of six months. the plaintiff’s mental and physical condition prior to the accident was excellent. and ability that he had constantly displayed before the accident as one of the best constructors of wooden buildings and he could not now earn even a half of the income that he had secured for his work because he had lost 50 per cent of his efficiency. energy. climb up ladders and scaffoldings to reach the highest parts of the building. his physical condition had undergone a noticeable depreciation. without any fault on his part. for he had lost the agility. in order that said questions may be decided: Now. and the Attorney-General of the Philippine Islands is hereby authorized and directed to appear at the trial on the behalf of the Government of said Islands. for damages resulting from a collision between his motorcycle and the ambulance of the General Hospital on March twenty-fifth. E. 1915. Enacted. and Whereas the Director of Public Works and the Attorney-General recommended that an Act be passed by the Legislature authorizing Mr. SEC. . 2. 1915. Did the defendant. February 3. effective February 3. E. E. if any. Merritt to bring suit against the Government of the Philippine Islands and authorizing the Attorney-General of said Islands to appear in said suit. be it enacted by the Philippine Legislature. to which Mr. then it cannot be held that the Act created any new cause of action in favor of the plaintiff or extended the defendant’s liability to any case not previously recognized. and to determine the amount of the damages. Merritt is entitled on account of said collision. therefore. As the consent of the Government to be sued by the plaintiff was entirely voluntary on its part. if any. It is also admitted that the instant case is one against the Government. that: SECTION 1. it is our duty to look carefully into the terms of the consent. 2457. nineteen hundred and thirteen. of Manila. c By authority of the United States.Act No. Whereas a claim has been filed against the Government of the Philippine Islands by Mr. to which the claimant is entitled. and render judgment accordingly. in enacting the above quoted Act. Whereas it is not known who is responsible for the accident nor is it possible to determine the amount of damages. E. reads: An Act authorizing E. Merritt to bring suit in the courts against the Government. Merritt. simply waive its immunity from suit or did it also concede its liability to the plaintiff? If only the former. to defendant said Government at the same. Merritt is hereby authorized to bring suit in the Court of First Instance of the city of Manila against the Government of the Philippine Islands in order to fix the responsibility for the collision between his motorcycle and the ambulance of the General Hospital. This Act shall take effect on its passage. All admit that the Insular Government (the defendant) cannot be sued by an individual without its consent. or unauthorized exercise of powers by its officers or agents. Kirkpatrick. a state institution created by the legislature for the purpose of improving agricultural and kindred industries.” We have “decided” that the accident was due solely to the negligence of the chauffeur. Clodfelter vs. thus: .... 51.) In the case of Melvin vs. 93 Cal. Merritt is entitled on account of said collision. and we have also fixed the amount of damages sustained by the plaintiff as a result of the collision. 9 Wheat. Rep. St.. sec. to which Mr. “does not undertake to guarantee to any person the fidelity of the officers or agents whom it employs. 319. 690. difficulties and losses. . State (121 Cal.. being objects similar to those sought by the public school system. 2457. 86 N.” we may look to the decisions of the high courts of that country for aid in determining the purpose and scope of Act No. by reason of the misfeasance. citing U. since that would involve it in all its operations in endless embarrassments. vs. S. Story on Agency. Rep. S. 43 Am. Ed. State. State.” says Justice Story. laches.... St. the court said: No claim arises against any government is favor of an individual. 203. 527. to disseminate information calculated to educate and benefit the industrial classes. except when expressly made so by legislative enactment. which would be subversive of the public interest. and Beers vs. The Act was passed “in order that said questions may be decided. the rule is stated in 36 Cyc. U. 27 Am. Ed. E. 440. 158. 491. 720. who was at the time an employee of the defendant. 53. States. if it exists.. 321. . 199. 103 Minn. “The Government. 104 Cal. 16). The Government of the Philippine Islands having been “modeled after the Federal and State Governments in the United States. Does the Act authorize us to hold that the Government is legally liable for that amount? If not. 269.) As to the scope of legislative enactments permitting individuals to sue the state where the cause of action arises out of either tort or contract.. Hart..” (Claussen vs. if any.. Chapman vs. C. Rep. 15 L. In the United States the rule that the state is not liable for the torts committed by its officers or agents whom it employs. (Citing Gibbons vs. 73 Cal. 8 Wall.. Green vs. 29.. 20 How.The plaintiff was authorized to bring this action 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. In passing upon the question of the state’s liability for the negligent acts of its officers or agents.” These were the two questions submitted to the court for determination. 41 Am. State. and to advance by such means the material interests of the state. is well settled.. 991. 6 L. Bourn vs. . City of Luverne. . 915. we must look elsewhere for such authority. the plaintiff sought to recover damages from the state for personal injuries received on account of the negligence of the state officers at the state fair. and relative to the use of the waters of said Bark River and Nagawicka Lake. In determining the scope of this act.) In Denning vs.By consenting to be sued a state simply waives its immunity from suit. are hereby authorized. the fish hatchery of the State of Wisconsin on the Bark River. the Act of 1913.. (Murdock Grate Co. to bring suit in such court or courts and in such form or forms as he may be advised for the purpose of settling and determining all controversies which he may now have with the State of Wisconsin. It simply gives authority to commence suit for the purpose of settling plaintiff’s controversies with the estate. 399. vs. It is difficult to see how the act does. more than remove the state’s immunity from suit. 152 Mass. 316). but would have done so in express terms. are as follows: All persons who have. Nowhere in the act is there a whisper or suggestion that the court or courts in the disposition of the suit shall depart from well established principles of law.. W. A. It merely gives a remedy to enforce a preexisting liability and submits itself to the jurisdiction of the court.E. In Apfelbacher vs. 28. it would not have left so important a matter to mere inference. all in the county of Waukesha. read: SECTION 1. 144. 8 L. claims on contract or for negligence against the state not allowed by the state board of examiners. decided April 16. advanced sheets). It did not pass upon the question of liability. Wisconsin. Commonwealth.. and that the suit now stands just as it would stand between private parties. R. or its duly authorized officers and agents. State (123 Cal. or shall hereafter have. It does not thereby concede its liability to plaintiff. 854.. State (152 N. the provisions of the Act of 1893. Wisconsin. or extend its liability to any cause not previously recognized. or was intended to do. the court said: Plaintiff claims that by the enactment of this law the legislature admitted liability on the part of the state for the acts of its officers. Authority is hereby given to George Apfelbacher. or create any cause of action in his favor. or that the amount of damages is the only question to be settled. 24 N. and the mill property of Evan Humphrey at the lower end of Nagawicka Lake. subject to its right to interpose any lawful defense. relative to the mill property of said George Apfelbacher. Waukesha County. which authorized the bringing of this suit. on the terms and . The act opened the door of the court to the plaintiff.. of the town of Summit. 1915. If the Legislature had intended to change the rule that obtained in this state so long and to declare liability on the part of the state. relied upon and considered. but left the suit just where it would be in the absence of the state’s immunity from suit. Rep. (Chapman vs. 43 Am. 104 Cal. agents. and prosecute the same to final judgment. Melvin vs. to bring suit thereon against the state in any of the courts of this state of competent jurisdiction. except as herein otherwise provided. but not when the damage should have been caused by the official to whom properly it pertained to do the act performed. and in both it was held that said statute did not create any liability or cause of action against the state where none existed before. in which case the provisions of the preceding article shall be applicable. Commonwealth (152 Mass.) A statute of Massachusetts enacted in 1887 gave to the superior court “jurisdiction of all claims against the commonwealth.conditions herein contained. 16. and employees. In construing this statute the court. whether at law or in equity. 2457 does not operate to extend the Government’s liability to any cause not previously recognized. by the terms of the statute of New York. 690. in Murdock Grate Co. said: The statute we are discussing disclose no intention to create against the state a new and heretofore unrecognized class of liabilities. The Supreme Court of Spain in defining the scope of this paragraph said: . jurisdiction of claims for damages for injuries in the management of the canals such as the plaintiff had sustained. St. State (99 N.. State. 28). 284). but merely gave an additional remedy to enforce such liability as would have existed if the statute had not been enacted..” with an exception not necessary to be here mentioned. And the court said: This statute has been considered by this court in at least two cases. Y. 158. 121 Cal.” It being quite clear that Act No. vs. Paragraph 5 of article 1903 of the Civil Code reads: The state is liable in this sense when it acts through a special agent. State.... The rules of practice in civil cases shall apply to such suits. we will now examine the substantive law touching the defendant’s liability for the negligent acts of its officers. In Sipple vs. but only an intention to provide a judicial tribunal where well recognized existing liabilities can be adjudicated. where the board of the canal claims had. Chief Justice Ruger remarks: “It must be conceded that the state can be made liable for injuries arising from the negligence of its agents or servants. arising under different facts. only by force of some positive statute assuming such liability. by his own fault or negligence. January 7. but not always. 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. on that the person obligated. no relations of a private nature governed by the civil law can arise except in a case where the state acts as a judicial person capable of acquiring rights and contracting obligations. No.. Between these latter and the state. as held in the last paragraph of article 1903. and among these persons. takes part in the act or omission of the third party who caused the damage. Title 16. guardians and owners or directors of an establishment or enterprise. responsibility for acts of third persons ceases when the persons mentioned in said article prove that they employed all the diligence of a good father of a family to avoid the damage. and whereas in the first article thereof. Book 4.) That the Civil Code in Chapter 2. therefore.That the obligation to indemnify for damages which a third person causes to another by his fault or negligence is based. (Supreme Court of Spain. regulates the obligations which arise out of fault or negligence. by virtue of such provisions of law. where the general principle is laid down that where a person who by an act or omission causes damage to another through fault or negligence. shall be obliged to repair the damage so done. 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. called upon to answer in a direct and not a subsidiary manner. on the contrary. That although in some cases the state might by virtue of the general principle set forth in Article 1902 respond for all the damage that is occasioned to private parties by orders or resolutions which by fault or negligence are made by branches of the central administration acting in the name and representation of the state itself and as an external expression of its sovereignty in the exercise of its executive powers. Civ. however. This legal presumption gives way to proof. as is evidenced by the same Law 3. the fault or negligence. which is the original basis of this kind of objections. in addition to the mother or the father in a proper case. doubtless because and only in this case. reference is made to acts or omissions of the persons who directly or indirectly cause the damage. It follows therefrom that the state. the state. Title 15. 1902. are found. 24. 1898. we must presuppose all foresight humanly possible on its part in order that each branch of service serves the general weal and that of private persons interested in its operation. the following articles refers to this persons and imposes an identical obligation upon those who maintain fixed relations of authority and superiority over the authors of the damage. Partida 7. because. must be presumed to lie with the state. except when it acts through the agency of a special agent. 83 Jur. because the law presumes that in consequence of such relations the evil caused by their own fault or negligence is imputable to them. yet said article is not applicable in the case of damages said to . 1904. May 18.) That according to paragraph 5 of article 1903 of the Civil Code and the principle laid down in a decision. the judgment appealed from must be reversed. acting in the exercise of his powers. for the acts of its agents. 1904. 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. Consequently. caused by an official of the second class referred to. (Supreme Court of Spain.have been occasioned to the petitioners by an executive official. which the plaintiff has sustained by reason of the negligent acts of one of its employees. and not where the claim is based on acts or omissions imputable to a public official charged with some administrative or technical office who can be held to the proper responsibility in the manner laid down by the law of civil responsibility. duly empowered by a definite order or commission to perform some act or charged with some definite purpose which gives rise to the claim. in a damage case. has by erroneous interpretation infringed the provisions of articles 1902 and 1903 of the Civil Code. 1911. is one who receives a definite and fixed order or commission. according to the above quoted decisions of the Supreme Court of Spain.) It is. . 389. Civ.” (Supreme Court of Spain. 390. evidence that the State (the Government of the Philippine Islands) is only liable. This matter rests solely with the Legislature and not with the courts. 98 Jur. That the responsibility of the state is limited by Article 1903 to the case wherein it acts through a special agent (and a special agent. and that the chauffeur of the ambulance of the General Hospital was not such an agent. Civ. 146. the responsibility of the state is limited to that which it contracts through a special agent. in the sense in which these words are employed. we are not called upon to determine. he executes the trust confided to him. officers and employees when they act as special agents within the meaning of paragraph 5 of article 1903. 122 Jur. therefore. foreign to the exercise of the duties of his office if he is a special official) so that in representation of the state and being bound to act as an agent thereof.. among others. without costs in this instance. of the 18th of May. in proceedings to enforce the collections of certain property taxes owing by the owner of the property which they hold in sublease. by legislative enactment and by appropriating sufficient funds therefor.. supra. July 30. Whether the Government intends to make itself legally liable for the amount of damages above set forth. For the foregoing reasons. the trial court in not so deciding and in sentencing the said entity to the payment of damages. INC. Sometime in May. The base was one of those provided in the Military Bases Agreement between the Philippines and the United States. Ruiz. This is a petition to review. set aside certain orders and restrain the respondent judge from trying Civil Case No. Director. [In its complaint.) The truth of this allegation has not been tested because the case has not reached the trial stage. Zambales.. 2. VS. the company received a letter which was signed by William I..S. May 22. RUIZ. No. 1985 ] UNITED STATES OF AMERICA. Subsequent thereto. NAVBASE Subic Bay. the company received from the United States two telegrams requesting it to confirm its price proposals and for the name of its bonding company. Philippines. 1972. V.R. Naval Facilities Engineering Command. 1972. the company alleges that the United States had accepted its bids because "A request to confirm a price proposal confirms the acceptance of a bid pursuant to defendant United States' bidding practices. Repair typhoon damage to NAS Cubi shoreline. Contracts Division. Inc. The company complied with the requests.2. RESPONDENTS. PETITIONERS. COLLINS AND ROBERT GOHIER. Naval Station Subic Bay. Eligio de Guzman & Co." (Rollo. and repair to Leyte Wharf approach. Repair fender system. Department of the Navy of the United States. HON. WILLIAM I. The factual background is as follows: At times material to this case. COURT OF FIRST INSTANCE OF RIZAL AND ELIGIO DE GUZMAN & CO. Southwest Pacific. M. The letter said that the company did not qualify to receive an award for the projects because of its previous unsatisfactory . L-35645.] In June. the United States invited the submission of bids for the following projects: 1. PRESIDING JUDGE OF BRANCH XV. who is one of the petitioners herein. Philippines. JAMES E. United States of America v. Collins. GALLOWAY. repair typhoon damage to shoreline revetment. the United States of America had a naval base in Subic. p. CAPT. 30. 136 SCRA 487 (1985) EN BANC [ G. responded to the invitation and submitted bids.. 779-M of the defunct Court of First Instance of Rizal. Alava Wharf at the U. NAVBASE Subic. The company opposed the motion. to order the defendants to pay damages. The complaint is to order the defendants to allow the plaintiff to perform the work on the projects and.S. Naval Station in Subic Bay. And because the activities of states have multiplied. The result is that State immunity now extends only to acts jure imperii. the company sued the United States of America and Messrs. The company also asked for the issuance of a writ of preliminary injunction to restrain the defendants from entering into contracts with third parties for work on the projects. The letter further said that the projects had been awarded to third parties. The trial court denied the motion and issued the writ. the subject matter of the complaint being acts and omissions of the individual defendants as agents of defendant United States of America. p. Navy. Galloway. it has been necessary to distinguish them — between sovereign and governmental acts ( jure imperii) and private. the rules of International Law are not petrified. James E. William I. pp. the United Kingdom and other states in western Europe. 50.) Subsequently the defendants filed a motion to dismiss the complaint which included an opposition to the issuance of the writ of preliminary injunction. 779-M for lack of jurisdiction on the part of the trial court. Hence the instant petition which seeks to restrain perpetually the proceedings in Civil Case No. (See Coquia and Defensor-Santiago. In the abovementioned Civil Case No. This rule is a necessary consequence of the principles of independence and equality of States. they are constantly developing and evolving. Collins and Robert Gohier all members of the Engineering Command of the U. The traditional rule of State immunity exempts a State from being sued in the courts of another State without its consent or waiver. commercial and proprietary acts ( jure gestionis). The defendants moved twice to reconsider but to no avail.) The respondent judge recognized the restrictive doctrine of State immunity when he said in his . However. a foreign sovereign which has not given her consent to this suit or any other suit for the causes of action asserted in the complaint. The defendants entered their special appearance "for the purpose only of questioning the jurisdiction of this court over the subject matter of the complaint and the persons of defendants. in the event that specific performance was no longer possible.S.” ( Rollo. The restrictive application of State immunity is now the rule in the United States. The petition is highly impressed with merit. 779-M. 207-209 [1984]. Public International Law.performance rating on a repair contract for the sea wall at the boat landings of the U. As aptly pointed out by plaintiff's counsel in his reply citing the ruling in the case of Lyons. dismissal was elevated to this Court for review. and (b) plaintiff failed to exhaust the administrative remedies provided in the contract. this Court said: "It appearing in the complaint that appellant has not complied with the procedure laid down in Article XXI of the contract regarding the prosecution of its claim against the United States Government. '" ( Rollo. 'x x x .) The order of xxx xxx . supra . 598. In sustaining the action of the lower court..: 'It is however contended that when a sovereign state enters into a contract with a private person. through its agency at Subic Bay. The trial court. entered into a contract with appellant for stevedoring and miscellaneous labor services within the Subic Bay Area.S. it is evident that it can bring an action before our courts for any contractual liability that that political entity may assume under the contract. a U. [104 Phil. vs. plaintiff brought suit in the Court of First Instance of Manila to collect several sums of money on account of a contract between plaintiff and defendant. the state can be sued upon the theory that it has descended to the level of an individual from which it can be implied that it has given its consent to be sued under the contract. Inc. 594 (1958)]. therefore. p. and considering that the United States government. pp.) The reliance placed on Lyons by the respondent judge is misplaced for the following reasons: In Harry Lyons. and which this Court quotes with approval. the lower court acted properly in dismissing this case. The defendant filed a motion to dismiss on the ground that the court had no jurisdiction over defendant and over the subject matter of the action. has jurisdiction to entertain this case x x x. it has failed to first exhaust its administrative remedies against said Government. x x x.Order denying the defendants' (now petitioners) motion: "A distinction should be made between a strictly governmental function of the sovereign state from its private. Inc. The United States of America. 20. stated differently." (Rollo. 'We agree to the above contention. proprietary or nongovernmental acts. The court granted the motion on the grounds that: (a) it had no jurisdiction over the defendant who did not give its consent to the suit. the respondent judge also said: "It is the Court's considered opinion that entering into a contract for the repair of wharves or shoreline is certainly not a governmental function altho it may partake of a public nature or character." (At p.) However. Naval Reservation. viz. 20-21. or. S. Dollar already cited. That the correct test for the application of State immunity is not the conclusion of a contract by a State but the legal nature of the act is shown in Syquia vs. Government. that any judgment for back or increased rentals or damages will have to be paid not by defendants Moore and Tillman and their 64 co-defendants but by the said U. Government. In denying the petition.S. It is clear that the courts of the Philippines including the Municipal Court of Manila have no jurisdiction over the present case for unlawful detainer. this is not only a case of a citizen filing a suit against his own Government without the latter's consent but it is of a citizen filing an action against a foreign government without said government's consent. a State may be said to have descended to the level of an individual and can thus be deemed to have tacitly given its consent to be sued only when it enters into business contracts. 312 (1949). In that case the plaintiffs leased three apartment buildings to the United States of America for the use of its military officials. they are not utilized for nor dedicated to commercial or business purposes. Moreover.S. Stated differently. It does not apply where the contract relates to the exercise of its sovereign functions. The defendants who were armed forces officers of the United States moved to dismiss the suit for lack of jurisdiction on the part of the court. 84 Phil. this Court said: "On the basis of the foregoing considerations we are of the belief and we hold that the real party defendant in interest is the Government of the United States of America. and on what we have already stated. the plaintiffs went to this Court for review on certiorari. which renders more . obiter so that it has no value as an imperative authority. the present action must be considered as one against the U. 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. The plaintiffs sued to recover possession of the premises on the ground that the term of the leases had expired. sustained by the Court of First Instance. The Municipal Court of Manila granted the motion to dismiss. though not in name. therefore. The question of lack of jurisdiction was raised and interposed at the very beginning of the action. They also asked for increased rentals until the apartments shall have been vacated.It can thus be seen that the statement in respect of the waiver of State immunity from suit was purely gratuitous and. The U. 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. Lopez. Government has not given its consent to the filing of this suit which is essentially against her. indisputably a function of the government of the highest order. On the basis of the ruling in the case of Land vs. plaintiff. insofar as said resolutions ordered the Presidential Commission on Good Government (PCGG) to pay private respondent Roberto S. v. reconstitution and . versus SANDIGANBAYAN (SECOND DIVISION) and ROBERTO S. [*] He signed before he left. BENEDICTO.R. 2006 REPUBLIC OF THE PHILIPPINES represented by the PRESIDENTIAL COMMISSION ON GOOD GOVERNMENT (PCGG). 0034. Civil Case No. 0034 entitled Republic of the Philippines. Respondents. Sandiganbayan (2nd Division). et al. 1995[1] and March 13. 1997[2] Resolutions of the Sandiganbayan. 323. the United States concluded contracts with private individuals but the contracts notwithstanding the United States was not deemed to have given or waived its consent to be sued for the reason that the contracts were for jure imperii and not for jure gestionis. No. Benedicto. Second Division. reversion. Republic v. SO ORDERED. Roberto S. Costs against the private respondent. defendants. The principles of law behind this rule are so elementary and of such general acceptance that we deem it unnecessary to cite authorities in support thereof. the questioned orders of the respondent judge are set aside and Civil Case No.. 129406 March 6.obvious the lack of jurisdiction of the courts of his country.00 per share. Benedicto or his corporations the value of 227 shares of stock of the Negros Occidental Golf and Country Club. WHEREFORE. 3. accounting. is a complaint for reconveyance.000.) In Syquia. the petition is granted. registered in the name of said private respondent or his corporations. Before the Court is this petition for certiorari under Rule 65 of the Rules of Court to nullify and set aside the March 28. (NOGCCI) at P150. 484 SCRA 119 (2006) G." (At p. Petitioner. Inc. 779-M is dismissed. in Civil Case No. 1987. 0034.damages. an auction sale was conducted. 1. petitioner Republic acknowledging that it was within private respondent Benedicto’s capacity to acquire the same shares out of his income from business and the exercise of his profession. on March 29. 1989. On November 3. however. On account thereof.[3] series of 1986. sometime in October 1986. Pursuant to its mandate under EO No.00 for each NOGCCI share.00 to P250. The case is one of several suits involving ill-gotten or unexplained wealth that petitioner Republic. Subsequently. The change consisted of assessing a monthly membership due of P150. thereat docketed as Civil Case No. the PCGG issued writs placing under sequestration all business enterprises.471.00. a resolution effecting a corporate policy change. The complaint. or of corporations in which he appeared to have controlling or majority interest. 14. PCGG did not pay the corresponding monthly membership due thereon totaling P2.00 for each share. petitioner Republic and private respondent Benedicto entered into a Compromise Agreement in Civil Case No. . was dismissed. the 227 sequestered shares were declared delinquent to be disposed of in an auction sale. On August 5. entities and other properties. The agreement contained a general release clause[5] whereunder petitioner Republic agreed and bound itself to lift the sequestration on the 227 NOGCCI shares. PCGG filed a complaint for injunction with the Regional Trial Court (RTC) of Bacolod City. As sequestrator of the 227 shares of stock in question. which passed. Prior to this resolution. Apprised of the above development and evidently to prevent the projected auction sale of the same shares.959.[6] Implied in this undertaking is the recognition by petitioner Republic that the subject shares of stock could not have been ill-gotten.[4] series of 1986. Benedicto and others pursuant to Executive Order (EO) No. filed with the Sandiganbayan against private respondent Roberto S. through the PCGG. PCGG representatives sat as members of the Board of Directors of NOGCCI. owned or registered in the name of private respondent Benedicto. Following the sequestration process. 1990. among other Benedicto’s properties. Among the properties thus sequestered and taken over by PCGG fiscal agents were the 227 shares in NOGCCI owned by private respondent Benedicto and registered in his name or under the names of corporations he owned or controlled. the NOGCCI Board passed another resolution. this time increasing the monthly membership due from P150. an investor purchasing more than one NOGCCI share was exempt from paying monthly membership due for the second and subsequent shares that he/she owned. 5348. real and personal. paving the way for the auction sale for the delinquent 227 shares of stock. indeed. 1996. dispositively reading: WHEREFORE. On March 28. the said “Motion for Release From Sequestration and Return of Sequestered Shares/Dividends” is hereby GRANTED and it is directed that said shares/dividends be delivered/placed under the custody of the Clerk of Court. from time to time. Acting thereon. 1994 up to this date and which . Benedicto filed in Civil Case No. the PCGG has not shown any justifiable ground as to why it has not complied with its obligation as set forth in the Order of December 6. that his NOGCCI shares of stock be specifically released from sequestration and returned. 0034 a Motion for Compliance dated July 25. inter alia. the Sandiganbayan granted Benedicto’s aforementioned motion but placed the subject shares under the custody of its Clerk of Court. 1995. followed by an Ex-Parte Motion for Early Resolution dated February 12.000. 1992. either of the parties would. In a Resolution[7] promulgated on December 6. thus: WHEREFORE. move for a ruling by the Sandiganbayan on the proper manner of implementing or interpreting a specific provision therein. 1996. the Sandiganbayan came out with the herein first assailed Resolution. 1994 Resolution and directed the immediate implementation thereof by requiring PCGG. finding merit in the instant motion for early resolution and considering that. delivered or paid to him as part of the parties’ Compromise Agreement in that case. Sandiganbayan. [Words in bracket added] (Emphasis Supplied).[8] which clarified its aforementioned December 6. In the process of implementing the Compromise Agreement. 1994. On February 22. BENEDICTO free from all liens and encumbrances. in the light of the foregoing.In a decision dated October 2. Owing to PCGG’s failure to comply with the above directive. 1994. to pay their value at P150. 0034 a “Motion for Release from Sequestration and Return of Sequestered Shares/Dividends” praying. or in default thereof. Manila subject to this Court’s disposition. the Sandiganbayan approved the Compromise Agreement and accordingly rendered judgment in accordance with its terms. Benedicto filed in Civil Case No. 1995. the Sandiganbayan promulgated yet another Resolution[9] on February 23.00 per share which can be deducted from [the Republic’s] cash share in the Compromise Agreement. among other things: (b) To deliver to the Clerk of Court the 227 sequestered shares of [NOGCCI] registered in the name of nominees of ROBERTO S. a failing which eventually led to the foreclosure sale thereof. . without more. 5348. It contends. such filing is a case of acting too little and too late. On April 11. accordingly. 1997.[13] in this case the 227 NOGCCI shares in question. 1996. To begin with.[12] PCGG also acknowledges that as such receiver. Hence. Civil Case No. however. must pay. like a responsible father of the family. what the fiscal agents did under the premises was to allow the element of delinquency to set in before acting by embarking on a tedious process of going to court after the auction sale had been announced and scheduled. cannot plausibly tilt the balance in favor of PCGG.Order was issued pursuant to the Compromise Agreement and has already become final and executory. PCGG filed a Manifestation with Motion for Reconsideration . as receiver. the Republic’s present recourse on the sole issue of whether or not the public respondent Sandiganbayan. 1996. gravely abused its discretion in holding that the PCGG is at fault for not paying the membership dues on the 227 sequestered NOGCCI shares of stock. The petition lacks merit. that membership dues owing to a golf club cannot be considered as an outstanding debt for which PCGG. 1994 as stated hereinabove. denied that portion of the PCGG’s Manifestation with Motion for Reconsideration concerning the subject 227 NOGCCI shares and granted Benedicto’s Motion to Enforce Judgment Levy.. It cannot be over-emphasized that it behooved the PCGG’s fiscal agents to preserve.e. But far from acting as such father. the Presidential Commission on Good Government is hereby given a final extension of fifteen (15) days from receipt hereof within which to comply with the Order of December 6. private respondent Benedicto filed a Motion to Enforce Judgment Levy. in its second assailed Resolution[11] dated March 13. PCGG itself does not dispute its being considered as a receiver insofar as the sequestered 227 NOGCCI shares of stock are concerned. The filing of the injunction complaint adverted to. Second Division. specifically inviting attention to the injunctive suit. Resolving these two motions. the Sandiganbayan. one of its functions is to pay outstanding debts pertaining to the sequestered entity or property. the value of the shares of stock under their administration. it filed before the RTC of Bacolod City to enjoin the foreclosure sale of the shares. i. 1996. It also claims to have exercised due diligence to prevent the loss through delinquency sale of the subject NOGCCI shares.[10] praying for the setting aside of the Resolution of February 23. To the mind of the Court. On April 1. as stressed earlier.[15] having gravely abused its discretion in its determination as to who is at fault for the loss of the shares in question The term “grave abuse of discretion” connotes capricious and whimsical exercise of judgment as is equivalent to excess. errors of procedure or mistakes in the court’s findings and conclusions are beyond the corrective hand of certiorari. no less. the PCGG as sequestrator-receiver of such shares is. even if the Sandiganbayan were wrong in its findings.[16] The abuse must be so patent and gross as to amount to an evasion of a positive duty or a virtual refusal to perform a duty enjoined by law. For another. can hardly be given cogency.[14] The extraordinary writ of certiorari may be availed only upon a showing. had a direct hand in the loss of the sequestered shares through delinquency and their eventual sale through public auction. as did the Sandiganbayan. For sure. or with grave abuse of discretion. The Sandiganbayan. it is not amiss to state. it is a well-settled rule of jurisprudence that certiorari will issue only to correct errors of jurisdiction. duty bound to preserve the value of such shares. adopting timely measures to obviate the loss of those shares forms part of such duty and due diligence. worse still. Hence. While perhaps anti-climactic to so mention it at this stage. There can be no quibbling. that the respondent tribunal or officer exercising judicial or quasi-judicial functions has acted without or in excess of its or his jurisdiction. thru delinquency sale in case of default in payment of the dues.The PCGG’s posture that to the owner of the sequestered shares rests the burden of paying the membership dues is untenable. that PCGG’s fiscal agents. it lost sight of the reality that such dues are basically obligations attached to the shares. which does not seem to be in this case. or to act at all in contemplation of law as where the power is exercised in an . Needless to state. not errors of judgment. cannot plausibly be faulted for finding the PCGG liable for the loss of the 227 NOGCCI shares. which. For one. PCGG’s lament about public respondent Sandiganbayan having erred or. Given the circumstances leading to the auction sale of the subject NOGCCI shares. or a lack of jurisdiction. Corollarily. as indeed the graft court so declared in its assailed and related resolutions respecting the NOGCCI shares of stock. while sitting in the NOGCCI Board of Directors agreed to the amendment of the rule pertaining to membership dues. the unfortunate loss of the shares ought not to have come to pass had those fiscal agents prudently not agreed to the passage of the NOGCCI board resolutions charging membership dues on shares without playing representatives. shall be made liable. that the PCGG-designated fiscal agents. in the final analysis. in the minimum. to be sure. as here. in furtherance of a legitimate aim and purpose and pursuant to constitutional legislative authority. the State itself is no less the plaintiff in the main case. For.[24] For. the issue of liability for the shares in question had.[23] But. the assailed resolutions of the Sandiganbayan did no more than to direct PCGG to comply with its part of the bargain under the compromise agreement it freely entered into with private respondent Benedicto. 1994.arbitrary and despotic manner by reason of passion or hostility. petitioner Republic. at bottom. the order for it to pay the value of the delinquent shares would fix monetary liability on a government agency. As it were. it thereby descends to the level of a private individual and thus opens itself to whatever counterclaims or defenses the latter may have against it. the present petition questions only and focuses on the March 28. takes the initiative in a suit against a private party. When the State enters into contract. this is completely absent in the present case. 1994 resolution prompted the issuance of the clarificatory and/or reiteratory resolutions aforementioned.e.[17] Sadly. by entering into a Compromise Agreement with private respondent Benedicto. as both public and private respondents asserted. the assailed resolutions of the Sandiganbayan have firm basis in fact and in law. as in Civil Case No. 1997[21] resolutions. 1996[19] as well as several intervening pleadings which served as basis for the decisions reached therein. We refer to that court’s resolutions of December 6. through its officers or agents. precisely .. Simply put. thus necessitating the appropriation of public funds to satisfy the judgment claim. invokes state immunity from suit. 1995[20] and March 13. as private respondent Benedicto correctly countered. In fact. And to place matters in the proper perspective. Lest it be overlooked. through the PCGG. immunity from suit cannot be effectively invoked. the because by entering into a State may be sued even without its express consent. whereby mutual or reciprocal benefits accrue and rights and obligations arise therefrom. petitioner Republic cannot set up its immunity against private respondent Benedicto’s prayers in the same case. Being itself the plaintiff in that case. i. PCGG’s failure to comply with the December 6. long become final and executory. In a last-ditch attempt to escape liability. when the government itself is the suitor.[25] Petitioner Republic’s act of filing its complaint in Civil Case No. 1994[18] and February 23. Where.[22] As argued. petitioner Republic thereby stripped itself of its immunity from suit and placed itself in the same level of its adversary. which merely reiterated and clarified the graft court’s underlying resolution of December 6. when the State. as jurisprudence teaches. the PCGG fails to take stock of one of the exceptions to the state immunity principle. through its duly authorized officers. 0034 constitutes a waiver of its immunity from suit. Petitioner’s narration of facts in its present petition is even misleading as it conveniently fails to make reference to two (2) resolutions issued by the Sandiganbayan. 0034. Rollo. 28-43. the instant petition is hereby DISMISSED. pp. 0034 envisaged the immediate recovery of alleged ill-gotten wealth without further litigation by the government. so much so that the late Benedicto had to be substituted by the administratrix of his estate. pp. dummies. 44-46. relatives and close associates and defining its powers. Corazon C.[27] Sadly.contract the sovereign descends to the level of the citizen. pp. SO ORDERED. 14-27. subordinates. close relatives. Creating the PCGG to assist the President in the recovery of vast government resources allegedly amassed by then former President Marcos. Rollo. Petition. Annex 9 of Comment. Finally. pp. with Associate Justices Minita Chico-Nazario (now a member of this Court) and Roberto M. 127-132. but.[26] breach of which on its part gives the corresponding right to the other party to the agreement.[28] with the trial of Civil Case No. Escareal. Rollo. Rollo. Its consent to be sued is implied from the very act of entering into such contract. Par. Marcos. Rollo. Rollo. Issued by then Pres. concurring. pp. members of his immediate family. Annex “A” of the Petition. that stated objective has come to naught as not only had the litigation continued to ensue. agents and nominees. 0034 still in swing. close and/or business associates. private respondent Benedicto passed away on May 15. and buying peace on the part of the aging Benedicto. 138-139. Rollo. Annex 6 of Comment. 14-27. 6. pp. [2] [3] [4] [5] [6] [7] [8] [9] [10] . II (a). his immediate family. Annex “C” of the Petition.[29] WHEREFORE. Lagman. Aquino investing the Sandiganbayan exclusive and original jurisdiction over cases involving the ill-gotten wealth of former President Ferdinand E. [1] Penned by Associate Justice Romeo M. it is apropos to stress that the Compromise Agreement in Civil Case No. 2000. p. worse. [11] [12] [13] Rollo, pp. 28-43, Annex “B” of the Petition. Petition, Rollo, p. 7. Id. at pp. 7-8, Petition, citing Bataan Shipyard & Engineering Co. v. PCGG, 150 SCRA 181 (1987). Lee v. People, 393 SCRA 397 (2002). Camacho v. Coresis, Jr., 387 SCRA 628 (2002). Litton Mills, Inc. v. Galleon Trader, Inc., 163 SCRA 489 (1988). Duero v. Court of Appeals, 373 SCRA 11 (2002). See Note #7, supra. See Note #9, supra. See Note # 1, supra. See Note #2, supra. Reply, Rollo, p. 160; and Memorandum, Rollo, pp. 260-261. Id., citing Garcia v. Chief of Staff, 16 SCRA 120 (1966). Rejoinder, Rollo, pp. 169-170. Froilan v. Pan Oriental Shipping Co., 95 Phil. 905, 912 (1954). Santos v. Santos, 92 Phil. 281, 284 (1952). March 28, 1995 Resolution of the Sandiganbayan; Rollo, p. 20. Notice of death, Rollo, pp. 210-212. Rollo, p. 228. [14] [15] [16] [17] [18] [19] [20] [21] [22] [23] [24] [25] [26] [27] [28] [29] 4. Mobil Philippines Exploration, Inc. v. Customs Arrastre Service, 18 SCRA 1120 (1966) [ G.R. No. L-23139, December 17, 1966 ] MOBIL PHILIPPINES EXPLORATION, INC., PLAINTIFF-APPELLANT, VS. CUSTOMS ARRASTRE SERVICE AND BUREAU OF CUSTOMS, DEFENDANTS-APPELLEES. Four cases of rotary drill parts were shipped from abroad on S.S. "Leoville" sometime in November of 1962, consigned to Mobil Philippines Exploration, Inc., Manila. The shipment arrived at the Port of Manila on April 10, 1963, and was discharged to the custody of the Customs Arrastre Service, the unit of the Bureau of Customs then handling arrastre operations therein. The Customs Arrastre Service later delivered to the broker of the consignee three cases only of the shipment. On April 4, 1964 Mobil Philippines Exploration, Inc., filed suit in the Court of First Instance of Manila against the Customs Arrastre Service and the Bureau of Customs to recover the value of the undelivered case in the amount of P18,493.37 plus other damages. On April 20, 1964 the defendants filed a motion to dismiss the complaint on the ground that not being persons under the law, defendants cannot be sued. After plaintiff opposed the motion, the court, on April 25, 1964, dismissed the complaint on the ground that neither the Customs Arrastre Service nor the Bureau of Customs issuable. Plaintiff appealed to Us from the order of dismissal. Raised, therefore, in this appeal is the purely legal question of the defendants' suability under the facts stated. Appellant contends that not all government entities are immune from suit; that defendant Bureau of Customs as operator of the arrastre service at the Port of Manila, is discharging proprietary functions and as such can be sued by private individuals. The Rules of Court, in Section 1, Rule 3, provide: "SECTION 1. Who may be parties.—Only natural or juridical persons or entities authorized by law may be parties in a civil action." Accordingly, a defendant in a civil suit must be (l) a natural person; (2) a juridical person or (3) an entity authorized by law to be sued. Neither the Bureau of Customs nor ( a fortiori) its function unit, the Customs Arrastre Service, is a person. They are merely parts of the machinery of Government. The Bureau of Customs is a bureau under the Department of Finance (Sec. 81, Revised Administrative Code); and as stated, the Customs Arrastre Service is a unit of the Bureau of Customs, set up under Customs Administrative Order No. 8-62 of November 9, 1962 (Annex "A" to Motion to Dismiss, pp. 13-15, Record on Appeal). It follows that the defendants herein cannot be sued under the first two abovementioned categories of natural or juridical persons. Nonetheless it is urged that by authorizing the Bureau of Customs to engage in arrastre service, the law thereby impliedly authorizes it to be sued as arrastre operator, for the reason that the nature of this function (arrastre service) is proprietary, not governmental. Thus, insofar as arrastre operation is concerned, appellant would put defendants under the third category of "entities authorized by law" to be sued. Stated differently, it is argued that while there is no law expressly authorizing the Bureau of Customs to sue or be sued, still its capacity to be sued is implied from its very power to render arrastre service at the Port of Manila, which, it is alleged, amounts to the transaction of a private business. The statutory provision on arrastre service is found in Section 1213 of Republic Act 1937 (Tariff and Customs Code, effective June 1, 1957), and it states: "SEC. 1213. Receiving, Handling, Custody and Delivery of Articles. —The Bureau of Customs shall have exclusive supervision and control over the receiving, handling, custody and delivery of articles on the wharves and piers at all ports of entry and in the exercise of its functions it is nereby authorized to acquire, take over, operate and superintend such plants and facilities as may "be necessary for the receiving, handling, custody and delivery of articles, and the convenience and comfort of passengers and the handling of baggage, as well as to acquire fire protection equipment for use in the piers: Provided, That whenever in his judgment the receiving, handling, custody and delivery of articles can be carried on by private parties with greater efficiency, the Commissioner may, after public bidding and subject to the approval of the department head, contract with any private party for the service of receiving, handling, custody and delivery of articles, and in such event, the contract may include the sale or lease of government-owned equipment and facilities used in such service. In Associated Workers Union, et al. v. Bureau of Customs, et al, L-21397, resolution of August 6, 1963, this Court indeed held "that the foregoing statutory provisions authorizing the grant by contract to any private party of the right to render said arrastre services necessarily imply that the same is deemed by Congress to be proprietary or non-governmental function". The issue in said case, however, was whether laborers engaged in arrastre service fall under the concept of employees in the Government employed in governmental functions for purposes of the prohibition in Section 11, Republic Act 875 to the effect that "employees in the Government x x x shall not strike," but "may belong to any labor organization which does not impose the obligation to strike or to join in strike", which prohibition "shall apply only to employees employed in governmental functions of the Government x x x". Thus, the ruling therein was that the Court of Industrial Relations had jurisdiction over the subject matter of the case, but not that the Bureau of Customs can be sued. Said issue of suability was not resolved, the resolution stating only that "the issue on the personality or lack of personality of the Bureau of Customs to be sued does not affect the Jurisdiction of the lower court over the subject matter of the case, aside from the fact that amendment may be made in the pleadings by the inclusion as respondents of the public officers deemed responsible for the unfair labor practice acts charged by petitioning Unions". Now, the fact that a non-corporate government entity performs a function proprietary in nature does not necessarily result in its being suable. If said non-governmental function is undertaken as an incident to its governmental function, there is no waiver thereby of the sovereign immunity from suit extended to such government entity. This is the doctrine recognized in Bureau of Printing, et al. v. Bureau of Printing Employees Association, et al., L-15751, January 28, 1961: "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 (Secretary of Finance) Executive Secretary, be authorized to undertake xxx.' (Sec. 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. xxxx "x x x 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. "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, a ction 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, 4-5 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 situation here is not materially different. The Bureau of Customs, to repeat, is part of the Department of Finance (Sec. 81, Rev. Adm. Code), with no personality of its own apart from that of the national government. Its primary function is governmental, that of assessing and collecting lawful revenues from imported articles and all other tariff and customs duties, fees, charges, fines and penalties (Sec. 602, R.A. 1937). To this function, arrastre service is a necessary incident. For practical reasons said revenues and customs duties can not be assessed and collected by simply receiving the importer's or ship agent's or consignee's declaration of merchandise being imported and imposing the duty provided in the Tariff law. Customs authorities and officers must see to it that the declaration tallies with the merchandise actually landed. And this checking up requires that the landed merchandise be hauled from the ship's side to a suitable place in the customs premises to enable said customs officers to make it, that is, it requires arrastre operations. [1] Clearly, therefore, although said arrastre function may be deemed proprietary, it is a necessary incident of the primary and governmental function of the Bureau of Customs, so that engaging in the same does not necessarily render said Bureau liable to suit. For otherwise, it could not perform its governmental function without necessarily exposing itself to suit. Sovereign immunity, granted as to the end, should not be denied as to the necessary means to that end. And herein lies the distinction between the present case and that of National Airports Corporation v. Teodoro, 91 Phil. 203, on which appellant would rely. For there, the Civil Aeronautics Administration was found to have for its prime reason for existence not a governmental but a proprietary function, so that to it the latter was not a mere incidental function: "Among the general powers of the Civil Aeronautics Administration are, under Section 3, to execute contracts of any kind, to purchase property, and to grant concession rights, and under Section 4, to charge landing fees, royalties on sales to aircraft of aviation gasoline, accessories and supplies, and rentals for the use of any property under its management. "These provisions confer upon the Civil Aeronautics Administration, in our opinion, the power to sue and be sued. The power to sue and be sued is implied from the power to transact private business. x x x. xxxxx "The Civil Aeronautics Administration comes,under the category of a private entity. Although not a body corporate it was created, like the National Airports Corporation, not to maintain a necessary function of government, but to run what is essentially a business, even if revenues be not its prime objective but rather the promotion of travel and the convenience of the travelling public. x x x" Regardless of the merits of the claim against it, the State, for obvious reasons of public policy, cannot be sued without its consent. Plaintiff should have filed its present claim to the General Auditing Office, it being for money, under the provisions of Commonwealth Act 327, which state the conditions under which money claims against the Government may be filed. It must be remembered that statutory provisions waiving State immunity from suit are strictly construed and that waiver of immunity, being in derogation of sovereignty, will not be lightly inferred. (49 Am. Jur., States, Territories and Dependencies, Sec. 96, p. 314; Petty v. TennesseeMissouri Bridge Com., 359 U.S. 275, 3 L. Ed. 804, 79 S. Ct. 785.) From the provision authorizing the Bureau of Customs to lease arrastre operations to private parties, We see no authority to sue the said Bureau in the instances where it undertakes to conduct said operation itself. The Bureau of Customs, acting as part of the machinery of the national government in the operation of the arrastre service, pursuant to express legislative mandate and as a necessary incident of its prime governmental function, is immune from suit, there being no statute to the contrary. WHEREFORE, the order of dismissal appealed from is hereby affirmed, with costs against appellant. SO ORDERED. [1] Associated Workers Union Case, supra. 5. Philippine National Bank v. Pabalan, 83 SCRA 595 (1978) [ G.R. No. L-33112, June 15, 1978 ] PHILIPPINE NATIONAL BANK, PETITIONER, VS. HON. JUDGE JAVIER PABALAN, JUDGE OF THE COURT OF FIRST INSTANCE, BRANCH III, LA UNION, AGOO TOBACCO PLANTERS ASSOCIATION, INC., PHILIPPINE VIRGINIA TOBACCO ADMINISTRATION, AND PANFILO P. JIMENEZ, DEPUTY SHERIFF, LA UNION, is on the fundamental constitutional law doctrine of non-suability of a state. Only last January. left no doubt that the funds of public corporations could properly be made the object of a . This petition must be dismissed. then. certainly. coupled with an inquiry as to whether or not respondent Philippine Virginia Tobacco Administration had funds deposited with petitioner's La Union branch. The reliance of petitioner Philippine National Bank in this certiorari and prohibition proceeding against respondent Judge Javier Pabalan who issued a writ of execution. This is not the first time petitioner raised that issue. that sufficient funds of the Philippine Virginia Tobacco Administration now deposited with the Philippine National Bank. 724. it being alleged that such funds are public in character. Court of Industrial Relations . it is now ordered. such a provision would be a bar to garnishment. It did not meet with success.RESPONDENTS. 1971 that the order sought to be set aside in this certiorari proceeding was issued by respondent Judge. as noted in the opening paragraph of this decision. this Court. in a case brought by the same petitioner precisely invoking such a doctrine." [11] If the funds appertained to one of the regular departments or offices in the government. [2] deposited with it. in accordance with law. As noted at the outset. by petitioner Philippine National Bank on the above ground.66." [10] Hence this certiorari and prohibition proceeding. outcome is indicated. 1970. Manila Hotel Company . It did so before in Philippine National Bank v.[7] There was a notice of garnishment for the full amount mentioned in such writ of execution in the sum of P12.[5] that funds of public corporations which can sue and be sued were not exempt from garnishment. Such is not the case here. A writ of execution was. in order. what was formerly implicit as a fundamental doctrine in constitutional law has been set forth in express terms: "The State may not be sued without its consent. As respondent Philippine Virginia [6] Tobacco a similar Administration is likewise a public corporation possessed of the same attributes. therefore. petitioner Philippine National Bank would invoke the doctrine of nonsuability. [9] Its dispositive portion reads as follows: "Conformably with the foregoing. 1970. It was accordingly issued on December 17. [1] followed thereafter by a notice of garnishment of the funds of respondent Philippine Virginia Tobacco Administration. shall be garnished and delivered to the plaintiff immediately to satisfy the Writ of Execution for one-half of the amount awarded in the decision of November 16. It is to be admitted that under the present Constitution. It is undisputed that the judgment against respondent Philippine Virginia Tobacco Administration had reached the stage of finality. it was not until January 25. this Court ruling in accordance with the two previous cases of National Shipyard and Steel Corporation [4] and Manila Hotel Employees Association v. however.[3] decided only last January. La Union Branch. [8] In view of the objection. Garnishment would lie. Planters' Bank . that petitioner Bank could not legally set forth as a bar or impediment to a notice of garnishment the doctrine of nonsuability. the ruling was the appropriate remedy for the prevailing party which could proceed against the funds of a corporate entity even if owned or controlled by the government. as amended."[14] It is worth mentioning that Justice Ozaeta could find support for such a pronouncement from the leading American Supreme Court case of United States v. 1459. 9 Wheat. it may sue and be sued and may be subjected to court processes just like any other corporation (Section 13. National Shipyard and Steel Corporation v. This excerpt from the aforecited decision of Philippine National Bank v. It is apparent. 6 L. so as to render the corporation subject to the rules of law governing private corporations. it is well-settled that when the government enters into commercial business. To repeat. ."[12] 2.)' . ( Bank of the United States v. . . The ruling therein could be inferred from the judgment announced in Manila Hotel Employees Association v. ed. Court of Industrial Relations makes manifest why such an argument is far from persuasive: "The premise that the funds could be spoken of as public in character may be accepted in the sense that the People's Homesite and Housing Corporation was a government-owned entity. 904. 1. 1950 * * *. It does not follow though that they were exempt from garnishment. Manila Hotel Company. and that. Planters' Bank. The alleged grave abuse of discretion. Concepcion: 'The allegation to the effect that the funds of the NASSCO are public funds of the government. [15] with the opinion coming from the illustrious Chief Justice Marshall. this petition must fail. ." Accordingly. it abandons its sovereign capacity and is to be treated like any other corporation. Justice Ozaeta: "On the other hand. By engaging in a particular business thru the instrumentality of a corporation. as such. later Chief Justice. the basis of this certiorari proceeding.[13] In the language of its ponente. was sought to be justified on the failure of respondent Judge to set aside the notice of garnishment of funds belonging to respondent Philippine Virginia Tobacco Administration. . distinct and separate from that of the Government. Accordingly. decided as far back as 1941. pursuant to which the NASSCO has been established — "all the powers of a corporation under the Corporation Law. The National Shipyard and Steel Corporation decision was not the first of its kind. the same may not be garnished. dated October 23. attached or levied upon. 1824 to be exact. Act No. Court of Industrial Relations is squarely in point. 356. It has — pursuant to Section 2 of Executive Order No. 244). the government divests itself pro hac vice of its sovereign character. . As was explicitly stated in the opinion of the then Justice. therefore. the NASSCO has a personality of its own.notice of garnishment. is untenable for. It was handed down more than one hundred fifty years ago. as a government-owned and controlled corporation. Fourth Branch. Annex C to Petition. 118 Phil. The National Shipyard decision. 1971 ANGEL MINISTERIO and ASUNCION SADAYA. 388-389. Annex S. July 25. Ibid. [14] [15] 6. 73 Phil. [7] Annex B to Petition. 374 (1941). Section 16. Statement of Facts. Article XV. [8] [9] [10] [11] [12] L-32667. 6 L. Ministerio v. January 31. was promulgated in 1963 and reported in 118 Phil. Constitution of the Philippines. [2] [3] [4] [5] [6] Cf. ed. Ibid. this petition for certiorari and prohibition is dismissed. Court of First Instance of Cebu. Petitioners. 1978. 904. vs. 12. Respondents. [1] Petition. par. Court of Industrial Relations. No. L-31635 August 31. THE PUBLIC HIGHWAY COMMISSIONER. 65 SCRA 416. January 31. Annex S to Petition. 244. 782 (1963). BORROMEO. Philippine Virginia Tobacco Administration v. THE COURT OF FIRST INSTANCE OF CEBU. as previously mentioned.WHEREFORE. and THE AUDITOR GENERAL. 1975. 11. No costs. L-32667. L-32052. par. 1978. 782. [13] 73 Phil. Judge JOSE C. 9 Wheat. Presided by the Honorable. 40 SCRA 464 (1971) G. 374.R. Ibid. . Annex A. 6. either the restoration of possession or the payment of the just compensation.045 square meters. After a careful consideration and with a view to avoiding the grave inconvenience. 647-B at P50. Thereafter. 1965. Barredo. 90. seeking the just compensation to which they are entitled under the Constitution for the expropriation of their property necessary for the widening of a street. 5988 and more particularly described in Transfer Certificate of Title No. sought the payment of just compensation for a registered lot. but defendants Public Highway Commissioner and the Auditor General refused to restore its possession. through the then Solicitor General. the parties submitted a stipulation of facts to this effect: "That the plaintiffs are the registered owners of Lot 647-B of the Banilad estate described in the Survey plan RS-600 GLRO Record No. That the Appraisal Committee of Cebu City approved Resolution No. containing an area of 1045 square meters. Series of 1965 fixing the . no consent having been shown.What is before this Court for determination in this appeal by certiorari to review a decision of the Court of First Instance of Cebu is the question of whether or not plaintiffs. the principal defense relied upon was that the suit in reality was one against the government and therefore should be dismissed. the appraisal committee of the City of Cebu approved Resolution No. either written or verbal.chanroblesvirtualawlibrary chanrobles virtual law library In the answer filed by defendants. That the National Government in 1927 took possession of Lot 647-B Banilad estate. Then on July 11. 1969. It was further alleged that on August 25. Cebu City. now Associate Justice. not to say possible injustice contrary to the constitutional mandate. now petitioners. The lower court. 90. we reverse. The matter was then elevated to us. without paying just compensation and without any agreement. and used the same for the widening of Gorordo Avenue.00 per square meter or a total price of P52. Antonio P.chanroblesvirtualawlibrary chanrobles virtual law library Petitioners as plaintiffs in a complaint filed with the Court of First Instance of Cebu. alleging that in 1927 the National Government through its authorized representatives took physical and material possession of it and used it for the widening of the Gorordo Avenue. dated April 13. There was an allegation of repeated demands for the payment of its price or return of its possession. no condemnation proceeding having been filed. now respondents. this Court arrives at a different conclusion.250.00. that would be the result if no such suit were permitted. could sue defendants Public Highway Commissioner and the Auditor General. 1966. 1966 in the sense that the remedy prayed for was in the alternative. in their capacity as public officials without thereby violating the principle of government immunity from suit without its consent. held that they could not and dismissed the suit. RT-5963 containing an area of 1. relying on what it considered to be authoritative precedents. Accordingly. and sustains the right of the plaintiff to file a suit of this character. appraising the reasonable and just price of Lot No. a national road. the complaint was amended on June 30. The government is immune from suit without its consent. 647-B is still in the possession of the National Government the same being utilized as part of the Gorordo Avenue. The principal error assigned would impugn the holding that the case being against the national government which was sued without its consent should be dismissed. No evidence was presented whether or not there was an agreement or contract between the government and the original owner and whether payment was paid or not to the original owner of the land. but. Considering that the herein defendants are sued in their official capacity the action is one against the National Government who should have been made a party in this case.price of Lot No. It may be contended that the present case is brought against the Public Highway Commissioner and the Auditor General and not against the National Government. This is clearly so where a litigation would result in a financial responsibility for the government." 1 chanrobles virtual law library The lower court decision now under review was promulgated on January 30. As is evident from the excerpt to be cited. But granting that no compensation was given to the owner of the land. with its consent. 4 chanrobles virtual law library . Cebu City. It may be presumed that when the land was taken by the government the payment of its value was made thereafter and no satisfactory explanation was given why this case was filed only in 1966. The party that could be adversely affected is government. and that the National Government has not as yet paid the value of the land which is being utilized for public use. such a principle could still be an effective bar." 2 chanrobles virtual law library Then came this petition for certiorari to review the above decision. That Lot No. If it appears that the action. 1969. the case is undoubtedly against the National Government and there is no showing that the government has consented to be sued in this case. It follows then that even if the defendants named were public officials. as stated before. Hence the defense of non-suability may be interposed. as it was in fact dismissed. would in fact hold it liable. 647-B at P50. Thus: "It is uncontroverted that the land in question is used by the National Government for road purposes. Under such circumstances.00 per square meter. As was indicated in the opening paragraph of this opinion. the plea that the suit was against the government without its consent having been manifested met with a favorable response. the doctrine calls for application. the liability of the official sued is not personal. whether in the disbursements of funds or loss of property.chanroblesvirtualawlibrary chanrobles virtual law library 1. We shall proceed to explain why. The decision of the lower court cannot stand. 3 Nor is it indispensable that it be the party proceeded against. this assignment of error is justified. may it "have the right to enter in and upon the land so condemned" to appropriate . and an action against the officials or officers by one whose rights have been invaded or violated by such acts. In the same tenor. and only upon payment of the compensation fixed by the judgment. now petitioners. and this is important. while claiming to act for the State. as it should. or after tender to the party entitled to such payment of the amount fixed. therefore. Pasay City." It was made clear in such decision that compensation should have been made "as far back as the date of the taking. road purposes. where the judgment in such a case would result not only in the recovery of possession of the property in favor of said citizen but also in a charge against or financial liability to the Government. the lower court. However. that petitioners would be absolutely remediless since recovery of possession is in effect barred by the above decision? If the constitutional mandate that the owner be compensated for property taken for public use 13 were to be respected. is not a suit against the State within the constitutional provision that the State may not be sued without its consent. It would follow then that the prayer in the amended complaint of petitioners being in the alternative. and. Had the government followed the procedure indicated by the governing law at the time. The doctrine of governmental immunity from suit cannot serve as an instrument for perpetrating an injustice on a citizen. as required by the then Code of Civil Procedure. Aligean : 7 "Inasmuch as the State authorizes only legal acts by its officers. as noted in Alfonso v." 6 chanrobles virtual law library 2. Almeda Lopez: 5 "However. for the recovery of the possession of the disputed lot." Does it result. was instituted. he violates or invades the personal and property rights of the plaintiff. consequently. . is not a suit against the State within the rule of immunity of the State from suit. instead of dismissing the same. for the protection of his rights. unauthorized acts of government officials or officers are not acts of the State.So it has been categorically set forth in Syquia v. It is a different matter where the public official is made to account in his capacity as such for acts contrary to law and injurious to the rights of plaintiff. under an unconstitutional act or under an assumption of authority which he does not have. since no proceeding for eminent domain. a complaint would have been filed by it. then the suit should be regarded as one against the government itself. As was clearly set forth by Justice Zaldivar in Director of the Bureau of Telecommunications v. it has been said that an action at law or suit in equity against a State officer or the director of a State department on the ground that.." 11 10 9 this Court speaking through Justice Montemayor. then a suit of this character should not be summarily dismissed. in the opinion of this Court. restoration would be "neither convenient nor feasible because it is now and has been used for The only relief.. would be for the government "to 12 make due compensation. could have passed upon the claim of plaintiffs there. it cannot prosper or be validly entertained by the courts except with the consent of said Government." 8 chanrobles virtual law library 3. " 14 If there were an observance of procedural regularity. the rule is that to determine due compensation for lands appropriated by the Government. Republic. 29 SCRA 598. 102 Phil." 16 chanrobles virtual law library WHEREFORE. 3 Cf. taking into account the ruling in the above Alfonso case: "As to the value of the property. 354 (1914). citing Ruiz v. pp. S. 33 SCRA 368. April 30. to be judicially ascertained. 807 (1954). Cabahug. Phil. May 29. March 30. 2 Ibid. War Damage Commission. 15 chanrobles virtual law library Accordingly. There is no thought then that the doctrine of immunity from suit could still be appropriately invoked. Providence Washington Insurance Co. although the plaintiff claims the present market value thereof. 85 Phil. 7 L-31135. Such a doctrine goes back to Tan Te v. It is not too much to say that when the government takes any property for public use. Moon v. the government would stand to benefit. Jan. L-26386. Almeda Lopez. which is conditioned upon the payment of just compensation. 84 Phil. It is just as important.. Harrison. it makes manifest that it submits to the jurisdiction of a court. 5 84 Phil. v. v. 30. 110 (1957) and Syquia v. 1970. United States Lines Co. petitioners would not be in the sad plaint they are now. 27 (1949) and Johnson v. 1 and 2. Begosa v. v. 1969 dismissing the complaint is reversed and the case remanded to the lower court for proceedings in accordance with law. Ltd. L-26533. Fireman's Fund Insurance Co. Switzerland General Insurance Company. 1970. Cf. 4 Cf. Chairman Philippine Veterans Administration. 1970. 319. 377-378. 8 Ibid. 30.. 312 (1949) affirmed in Marvel Building Corp. . p. L-25916.4. 6 Ibid. if not more so. pp. Bell. It is unthinkable then that precisely because there was a failure to abide by what the law requires.the same to the public use defined in the judgment. 32 SCRA 466.. Annex H. p. Sept. Annex I. 43 Phil 27 (1922). 32 SCRA 227. the lower court decision is reversed so that the court may proceed with the complaint and determine the compensation to which petitioners are entitled. L. the lower court decision of January 30. 1970. 1 Petition. 27 Phil. 31 SCRA 309. L-27389. that there be fidelity to legal norms on the part of officialdom if the rule of law were to be maintained. 1969. v. the basis should be the price or value at the time that it was taken from the owner and appropriated by the Government. 312 (1949). Turner. 94 Phil. Republic. Salgado v. According to Section 241 of such Code: "The Government of the Philippine Islands. Department of Health v. Republic of the Philippines. November 15. Santos. Inc. 13 "According to Article III. 789 (1957). 518 SCRA 240 (2007) [ G. 311 (1916).. L-27189. Government of the Philippine Islands. Pasay City. 27 SCRA 519. Customs Arrastre Service. or of any municipality. Froilan v. 10 106 Phil. In case the defendant and his attorney absent themselves from the court or decline to receive the same. Santos vs. L-22784.." Sec. 1969. 102 Phil. Merrit v. December 17. 12 Ibid. 67 Phil. 190 (1901). 169304." The next section reads: "The complaint in condemnation proceedings shall state with certainty the right of condemnation. Government. v. Angat River Irrigation v. Insurance Co. 106 Phil. v. or after tender to him of the amount so fixed and payment of the costs. United States of America.. L-23139. March 28. showing the interest of each defendant separately. 92 Phil. Inc. 64 Phil. 724 (1937). Section 1. 1017 (1960). 1022-1023 (1960). paragraph 2 of the Constitution: "Private property shall not be taken for public use without just compensation. or public or private corporation having by law the right to condemn private property for public use shall exercise that right in the manner hereinafter prescribed. Ramos. 34 Phil. 1017. p. No. 16 Alfonso v. 281 (1952) . 2007 ] . 190 reads in full: "Upon payment by the plaintiff to the defendant of compensation as fixed by the judgment. 95 Phil. 663 (1924). v. Phil. L26386." 15 Cf. P. Sept. Yatco. to appropriate the same to the public use defined in the judgment. or of any province or department thereof. 242. Pharmawealth.. 104 Phil. Concepcion.R. Osaka Shosen Kaisha. Lyons.9 Act No. 1022. 1966. and such officer shall be responsible on his bond therefor and shall be compelled to receive it. v. 21 SCRA 860. the plaintiff shall have the right to enter in and upon the land so condemned. and any person. L-24544. Inc. of North America v. D. Firemen's Fund Insurance Co. Providence Washington Insurance Co.. 7. March 28. v. 1967. Compania General de Tabacos v. J. 27 SCRA 780. 18 SCRA 1120. Mobil Philippines Exploration. 29 SCRA 598. 11 Ibid. payment may be made to the clerk of the court for him. Marchessini & Co. 45 Phil." 14 Section 247 of Act No. Bull v. March 13. diss. 728 (1939). 1969. and describe the property sought to be condemned. Angat River Workers' Union. 1969. Pan Oriental Shipping Co.. 905 (1954). 593 (1958). 30. Maersk Line Far East Service. Hartford Insurance Co. in part: 1.. of the Regional Trial Court of Pasig City. it appears that processing of and release of the result of respondent's request were due on September 2000. USEC. SECRETARY MANUEL M.[3] Series of 1998. Janolo. No.) No. Phil. Branch 264 denying petitioners' motion to dismiss Civil Case No. 10. 68208.[5] (Underscoring supplied) On May 9. Inc. Jr. Jr. VS. then Secretary of Health Alberto G. No. 10 reads. No. 2000[6] and May 29. INC.O. PHIL. 2005 which affirmed the order issued by Judge Leoncio M. Romualdez.R. ANTONIO M. LOPEZ. 2.O. Part V of A. and b) Resolution [2] dated August 9. On December 22. SP No.O. Pharmawealth. DAYRIT. Drug Trader and Drug Importer shall be allowed to apply for accreditation. A separate accreditation is required for the drug suppliers and for their specific products. Accreditation shall be done by the Central Office-Department of Health. to wit: a) Decision[1] dated May 12. 2000. outlining the guidelines and procedures on the accreditation of government suppliers for pharmaceutical products. 27 was later amended by A. Drug Manufacturer. MARGARITA GALON AND USEC.THE DEPARTMENT OF HEALTH." Based on the schedule provided by petitioner DOH. PETITIONERS. 3. including the antibiotic "Penicillin G Benzathine.O. xxxx 12. RESPONDENT. PHARMAWEALTH. providing for additional guidelines for accreditation of drug suppliers aimed at ensuring that only qualified bidders can transact business with petitioner Department of Health (DOH).[7] respondent submitted to petitioner DOH a request for the inclusion of additional items in its list of accredited drug products. the . 84457. 1998. 2005 which denied petitioners' motion for reconsideration. Only products accredited by the Committee shall be allowed to be procured by the DOH and all other entities under its jurisdiction. [4] Series of 2000. Assailed via petition for review are issuances of the Court of Appeals in CA-G. A. issued Administrative Order (A. (respondent) is a domestic corporation engaged in the business of manufacturing and supplying pharmaceutical products to government hospitals in the Philippines. MA. 27. To petitioners' motion to dismiss. Respondent thus filed a complaint [10] for injunction.2 million units vials of Penicilin G Benzathine (Penicilin G Benzathine contract). Secretary Alberto Romualdez. and individual petitioners Undersecretaries Margarita Galon and Antonio Lopez argued for the dismissal of the complaint for lack of merit in view of the express reservation made by petitioner DOH to accept or reject any or all bids without incurring liability to the bidders.last month of the quarter following the date of its filing. however. inter alia. that the doctrine of state immunity is not applicable considering that individual petitioners are being sued both in their official and personal capacities. Jr. issued an Invitation for Bids [9] for the procurement of 1. with respondent submitting the lower bid at P82. Petitioners subsequently filed a Manifestation and Motion [13] (motion to dismiss) praying for the outright dismissal of the complaint based on the doctrine of state immunity. Inc. they alleged that respondent's representative was not duly authorized by its board of directors to file the complaint. respondent filed its comment/opposition [14] contending. Dayrit. bids and awards committee. mandamus and damages with prayer for the issuance of a writ of preliminary injunction and/or temporary restraining order with the Regional Trial Court of Pasig City praying. for [the therein specified damages]. When the bids were opened on October 11. they. Galon and Lopez liable. defendant Galon and defendant Lopez to declare plaintiff Pharmawealth as the lowest complying responsible bidder for the Benzathine contract. the contract was awarded to YSS. .[12] petitioner DOH. 2000-10-11 [14] ) to YSS Laboratories. and that they accordingly award the same to plaintiff company" and "adjudge defendants Romualdez.” [11] In their Comment. who was later succeeded by petitioner Secretary Manuel M. only two companies participated. in the main. 2000. compared to Cathay/YSS Laboratories' (YSS) bid of P95. chairperson of the pre-qualifications. jointly and severally to plaintiff. through petitioner Antonio M. they positing that government agencies have such full discretion. [8] Sometime in September 2000. Lopez. respondent submitted its bid for the Penicillin G Benzathine contract. of the non-accreditation of respondent's Penicillin G Benzathine product. hence. Additionally. Despite the lack of response from petitioner DOH regarding respondent's request for inclusion of additional items in its list of accredited products. that the trial court "nullify the award of the Penicillin G Benzathine contract (IFB No. would be liable for damages. defendant Romualdez. In view. and direct defendant DOH. not the state.00 per unit. petitioner DOH.24 per unit. [20] In its complaint. it denied petitioners' motion for reconsideration. for the only causes of action directed against it are preliminary injunction and mandamus. Rule 58 [23] of the Rules of Court. agency or a person. [21] Moreover. the trial court[15] denied petitioners' motion to dismiss. By the assailed Decision[18] of May 12. Since judicial review of acts alleged to have been tainted with grave abuse of discretion is guaranteed by the Constitution. Under Section 1. [19] and it is the official concerned who should be impleaded as the proper party. The petitition fails. the Constitution itself assures the availability of judicial review. the defense of immunity from suit will not avail despite its being an unincorporated agency of the government. the instant petition for review which raises the sole issue of whether the Court of Appeals erred in upholding the denial of petitioner’s motion to dismiss. and whether the acts done in the performance of official functions will result in a charge or financial liability against the government. In the first case. respondent sufficiently imputes grave abuse of discretion against petitioners in their official capacity. [16] petitioners filed a petition for certiorari[17] with the Court of Appeals. Their motion for reconsideration having been denied. it necessarily follows that it is the official concerned who should be impleaded as defendant or respondent in an appropriate suit. 2005. the Court of Appeals affirmed the trial court's Order. The suability of a government official depends on whether the official concerned was acting within his official or jurisdictional capacity. Moreover. part of the reliefs prayed for by respondent is the enjoinment of the implementation. the defense of state immunity from suit does not apply in causes of action which do not seek to impose a charge or financial liability against the State. 2005. [22] As regards petitioner DOH. And by Resolution of August 9. [24] . the grant of which may not be enforced against individual petitioners and their successors except in their official capacities as officials of the DOH. as well as the nullification of the award to YSS. Hence. preliminary injunction may be directed against a party or a court. before which they maintained that the suit is against the state.By Order of December 8. 2003. and an action against the officials or officers by one whose rights have been invaded or violated by such acts.. which we have now adopted as part of the law of the land. (Emphasis and underscoring supplied) Hence. he violates or invades the personal and property rights of the plaintiff. Neither does it apply where the public official is clearly being sued not in his official capacity but in his personal capacity. is not so all-encompassing as to be applicable under all circumstances. . is one of the generally accepted principles of international law. etc. Article XVI of the 1987 Constitution. it is also applicable to complaints filed against officials of the state for acts allegedly performed by them in the discharge of their duties. is not a suit against the State within the rule of immunity of the State from suit. the following discussion on the applicability of the defense of state immunity from suit is relevant.[29] " Inasmuch as the State authorizes only legal acts by its officers. under an unconstitutional act or under an assumption of authority which he does not have. Aligaen. Shauf v. In the same tenor. [26] The suit is regarded as one against the state where satisfaction of the judgment against the officials will require the state itself to perform a positive act. [25] While the doctrine of state immunity appears to prohibit only suits against the state without its consent. the rule does not apply where the public official is charged in his official capacity for acts that are unauthorized or unlawful and injurious to the rights of others. et al. however. although the acts complained of may have been committed while he occupied a public position. Court of Appeals[28] elucidates: It is a different matter where the public official is made to account in his capacity as such for acts contrary to law and injurious to the rights of plaintiff.[27] The rule. is not a suit against the State within the constitutional provision that the State may not be sued without its consent. such as the appropriation of the amount necessary to pay the damages awarded against them. unauthorized acts of government officials or officers are not acts of the State. [30] . et al. As was clearly set forth by Justice Zaldivar in Director of the Bureau of Telecommunications. for the protection of his rights.As regards individual petitioners' suability for damages. while claiming to act for the State." The rationale for this ruling is that the doctrine of state immunity cannot be used as an instrument for perpetrating an injustice. The rule that a state may not be sued without its consent. vs. it has been said that an action at law or suit in equity against a State officer or the director of a State department on the ground that. now embodied in Section 3. pp. p. Neither. upon the other hand. 125-A. [1] CA rollo. . [14] Id. The mere allegation that a government official is being sued in his personal capacity does not automatically remove the same from the protection of the doctrine of state immunity. at 43-44. 2005 and Resolution dated August 9. at 37-38. [9] CA rollo. [7] Id. 186-197. [32] It bears stressing. at 46-47. SO ORDERED. [13] Id. at 224-226. the petition is DENIED. at 45-51. s. [4] Id. RTC records. at 41-42. [10] RTC records. 33. at 182-187. pp. [6] Id. at 210-213. [11] Id. at 13-14. [3] Id. suing individual petitioners in their personal capacities for damages in connection with their alleged act of "illegal[ly] abus[ing] their official positions to make sure that plaintiff Pharmawealth would not be awarded the Benzathine contract [which act was] done in bad faith and with full knowledge of the limits and breadth of their powers given by law" [31] is permissible. Salazar-Fernando and Rosmari D. WHEREFORE. 2000.In the present case. [33] These are matters of evidence which should be presented and proven at the trial. 2005 issued by the Court of Appeals are AFFIRMED. [8] Memorandum No. at 127-137. The assailed Decision dated May 12. [2] Id. Carandang. [5] Id. penned by Associate Justice Monina Arevalo-Zenarosa and concurred in by Associate Justices Remedios A. pp. [12] Id. For an officer who exceeds the power conferred on him by law cannot hide behind the plea of sovereign immunity and must bear the liability personally. however. 2-15. 57-67. does the mere invocation of official character suffice to insulate such official from suability and liability for an act committed without or in excess of his or her authority. in consonance with the foregoing principles. that the statements in the immediately foregoing paragraph in no way reflect a ruling on the actual liability of petitioners to respondent. PANGASINAN. See also Sanders v. MAGSANOC. 1988.29993. May 3. 90314. [21] Philippine Agila Satellite. v. at 229-234. G.R. No. March 1. supra. [29] G. Court of Appeals. NORMA.[15] [16] Id. Trinidad-Lichauco.R. L.30183. 94 Phil. 1990. [22] See Philippine Agila Satellite. 33 SCRA 368. [19] Section 1. Trinidad-Lichauco. MALASIQUI. v. June 10. MANUEL DE GUZMAN. [18] Id. [20] See Philippine Agila Satellite. G. RAMON TULAGAN. L. Fernando. EDUARDO. 219 SCRA 192. L-46930. Veridiano II.R. OCTOBER 23. Court of Appeals. Court of Appeals. No. [30] Lansang v. ANGELINA. October 23. AND THE HONORABLE COURT OF APPEALS. 1970. 142362. GUILLERMO EVANGELISTA.A preliminary injunction is an order granted at any stage of an action or proceeding prior to the judgment or final order. 1-15. Fontanilla. p. No. Records. 1978] . [25] Shauf v. [31] RTC records. [32] Festejo v. Article VIII of the 1987 Constitution. REMEDIOS AND ROBERTO. classes. v. The Constitution of the Republic of the Philippines: A Commentary 1275 (2003 ed. Trinidad-Lichauco. p. 504 (1954). [24] Philippine Agila Satellite. 85 SCRA 599 (1978) [ G. . pp. Inc. ROSALINA.R. Inc. [28] Id. Veridiano II. G. No. MAXIMO MANANGAN. ANGELITA. 8. ANITA. [17] CA rollo. 79253. Trinidad-Lichauco. VIRGINIA. supra. ERNESTO. 2004. v. 2006. at 186-197. VS. [33] Sanders v.R. 1993. 141 (2000). [23] Section 1.R. MELCHOR VIRAY. supra. 162 SCRA 88. at 727. supra. ALL SURNAMED FONTANILLA. Inc. May 29. PETITIONERS. LEONARDO. as cited in Bernas. JESUS MACARANAS. RESPONDENTS. agency or a person to refrain from a particular act or acts. 11. 489 SCRA 22. [G. G. It may also require the performance of a particular act or acts. ALL MEMBERS OF THE MUNICIPAL COUNCIL OF MALASIQUI IN 1959. November 27. Reyes. in which case it shall be know as a preliminary mandatory injunction. ARTEMIO. ALFONSO R. requiring a party or a court. No. 1978 ] LAUDENCIO TORIO. L-31135.R. Torio v. 255. 383 Phil. Inc. supra. FIDEL MONTEMAYOR.). Through Order dated March 15. Preliminary injunction defined. [26] Ibid. 191 SCRA 713 cited in United States of America v. [27] Shauf v. ANGELINA. one for the " zarzuela" and another for the " cancionan". These Petitions for review present the issue of whether or not the celebration of a town fiesta authorized by a municipal council under Sec. . Pangasinan. The program started at about 10:15 o'clock that evening with some speeches. and the members of the Municipal Council of Malasiqui. ALL SURNAMED FONTANILLA. 159 whereby "it resolved to manage the 1959 Malasiqui town fiesta celebration on January 21. with Jose Macaraeg as Chairman. had a wooden floor high at the rear and was supported by 24 bamboo posts -. VS. the stage collapsed and Vicente Fontanilla who was at the rear of the stage was pinned underneath. The troupe arrived in the evening of January 22 for the performance and one of the members of the group was Vicente Fontanilla. and which was attributed to the negligence of the municipality and its council members. The following facts are not in dispute: On October 21. ANGELITA. 182 was also passed creating the "1959 Malasiqui Town Fiesta Executive Committee" which in turn organized a subcommittee on entertainment and stage. viz: the civil liability for damages of the Municipality of Malasiqui. the Municipal Council of Malasiqui." [1] The "zarzuela" entitled "Midas Extravaganza" was donated by an association of Malasiqui employees of the Manila Railroad Company in Caloocan. The council appropriated the amount of P100. 1959. and many persons went up the stage.with bamboo braces." Resolution No. ROSALINA. ERNESTO. AND THE HONORABLE COURT OF APPEALS. 22. 4 in the rear and 5 on each side -. Jose Macaraeg supervised the construction of the stage and as constructed the stage for the " zarzuela" was "5-1/2 meters by 8 meters in size. EDUARDO. ANITA. passed resolution No.MUNICIPALITY OF MALASIQUI. and 23. 2282 of the Municipal Law as embodied in the Revised Administrative Code is a governmental or a corporate or proprietary function of the municipality. Fontanilla was taken to the San Carlos General Hospital where he died in the afternoon of the following day. Rizal. 1958. REMEDIOS AND ROBERTO. 1959. NORMA.4 in a row in front. LEONARDO. for a death which occurred during the celebration of the town fiesta on January 22. PETITIONER. RESPONDENTS. The "zarzuela" then began but before the dramatic part of the play was reached. A resolution of that issue will lead to another.00 for the construction of 2 stages. ARTEMIO. province of Pangasinan. VIRGINIA. and the costs. narrowed the issue to whether or not the defendants exercised due diligence in the construction of the stage. 1968. 1959 to recover damages.00 by way of moral and actual damages. consequently. The complaint was accordingly dismissed in a decision dated July 10. furthermore. P1. Serrano reversed the trial court's decision and ordered all the defendants-appellees to pay jointly and severally the heirs of Vicente Fontanilla the sums of P12. 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.000. Lantin. Yatco and Eulogio S. the Presiding Judge. Answering the complaint defendant municipality invoked inter alia the principal defense 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.00 as attorney's fees. the Municipal Council of Malasiqui and all the individual members of the Municipal Council in 1959.200.[3] The Fontanillas appealed to the Court of Appeals. In a decision promulgated on October 31. Gregorio T. Nicasio A.[2] After trial. Esguerra. they had exercised due care and diligence in implementing the municipal ordinance. the Court of Appeals through its Fourth Division composed at the time of Justices Salvador V. 1962. Named party-defendants were the Municipality of Malasiqui. the defendants were not liable for damages for the death of Vicente Fontanilla. [4] The case is now before Us on various assignments of errors all of which center on the proposition stated at the opening sentence of this Opinion and which We repeat: Is the celebration of a town fiesta an undertaking in the exercise of a municipality's governmental or public function or is it of a private or proprietary character? . Hon.The heirs of Vicente Fontanilla filed a complaint with the Court of First Instance of Manila on September 11. From his findings he arrived at the conclusion that the Executive Committee appointed by the municipal Council had exercised due diligence and care like a good father of the family in selecting a competent man to construct a stage strong enough for the occasion and that if it collapsed that was due to forces beyond the control of the committee on entertainment. 1916.1. Loy. [5] The powers of a municipality are twofold in character . and servants of the state. and political. In McQuillin on Municipal Corporations. Governmental powers are those exercised by the corporation in administering the powers of the state and promoting the public welfare and they include the legislative. the rule is stated thus: "A municipal corporation proper has . The evolution of the municipal law in American jurisprudence.. In the other capacity the municipalities exercise a private. and in their proper corporate name. and contract and be contracted with. public. the Supreme Court. private. that is generally a difficult matter to determine. and as such they are officers.. and private (so-called) insofar as it is to promote local necessities and conveniences for its own community.public. inter alia. or proprietary on the other. Trent. has shown that none of the tests which have evolved and are stated in textbooks have set down a conclusive principle or rule. and corporate. 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. sue and be sued. a public character as regards the state at large insofar as it is its agent in government.E. their acts are political and governmental. so that each case will have to be determined on the basis of attending circumstances. relying mainly on American jurisprudence classified certain activities of the . are nevertheless public functionaries performing a public service.. and while in the performance of the duties pertaining thereto."[7] Another statement of the test is given in City of Kokomo v. thus: "Municipal corporations exist in a dual capacity. or political on the one hand. arising from their existence as legal persons and not as public agencies." (112 N. they may. and their functions are twofold. decided by the Supreme Court of Indiana in 1916. In one they exercise the right springing from sovereignty. Municipal powers on the other hand are exercised for the special benefit and advantage of the community and include those which are ministerial.[6] As to when a certain activity is governmental and when proprietary or private. Under Philippine laws municipalities are political bodies corporate and as such are endowed with the faculties of municipal corporations to be exercised by and through their respective municipal governments in conformity with law. though elected or appointed by them. through Justice Grant T. Their officers and agents in such capacity. de Leon. proprietary or corporate right. governmental. private and corporate. for instance. 994-995) In the early Philippine case of Mendoza v. judicial. agents.. fall within the operation of this rule of law. Coming to the case before Us.[9] 2. preservation of public peace. Pangasinan. etc. 1610. that the superior or employer must answer civilly for the negligence or want of skill of his agent or servant in the course or line of his employment. accordingly. bathing establishments. et al. If the injury is caused in the course of the performance of a governmental function or duty no recovery. 514) 3. Secs. is injured. This distinction of powers becomes important for purposes of determining the liability of the municipality for the acts of its agents which result in an injury to third persons. Province of Ilocos Norte. e.. so long as they performed their duties honestly and in good faith or that they did not act wantonly and maliciously. cemeteries and airports among others. 1958. 5th ed.and however tragic and deplorable it may be. and are liable.[10] nor from its officers. and applying the general tests given above. xx xx" ( Dillon on Municipal Corporations. [11] In Palafox. cited in Mendoza v. We hold that the holding of the town fiesta in 1959 by the Municipality of Malasiqui. the death of Palafox imposed on the province no duty to pay monetary consideration.the construction and maintenance of roads . to civil actions for damages when the requisite elements of liability coexist.[12] With respect to proprietary functions. 1647. x x x xxx xxx xxx "The rule of law is a general one. Municipal corporations under the conditions herein stated.. wharves. de Leon. supra. while the following are corporate or proprietary in character. slaughterhouses.g. markets. . by which another. et al. post-offices. a truckddriver employed by the provincial government of Ilocos Norte ran over Proceto Palafox in the course of his work at the construction of a road. establishment of schools. golf courses. [8] Maintenance of parks. as a rule. ferries. can be had from the municipality unless there is an existing statute on the matter. was an exercise of a private or proprietary function of the municipality. stables. who is free from contributory fault. v.[14] "Municipal corporations are subject to be sued upon contracts and in tort. disease. are also recognized as municipal or city activities of a proprietary character.: regulations against fire. The Supreme Court in affirming the trial court's dismissal of the complaint for damages held that the province could not be made liable because its employee was in the performance of a governmental function . the settled rule is that a municipal corporation can be held liable to third persons ex contractu[13] or ex delicto. and fisheries. viz: municipal waterworks. maintenance of municipal prisons.municipality as governmental. x x x" On this point. x x x" "Art. but also for those of persons for whom one is responsible. It follows that under the doctrine of respondeat superior.Section 2282 of the Chapter on Municipal Law of the Revised Administrative Code provides: "Section 2282. by resolution of the council. is obliged to pay for the damage done. . and the like which are for public service. The basic element. was not to secure profit or gain but merely to provide entertainment to the town inhabitants is not a conclusive test. the surrounding circumstances of a particular case are to be considered and will be decisive. 2176. or agents. as claimed. nonetheless it is a private undertaking as distinguished from the maintenance of public schools. there can be no hard and fast rule for purposes of determining the true nature of an undertaking or function of a municipality. no governmental or public policy of the state is involved in the celebration of a town fiesta. there being fault or negligence." This provision simply gives authority to the municipality to celebrate a yearly fiesta but it does not impose upon it a duty to observe one. . Easily. in which case it may be held at a later date in the same year. "Art. petitioner municipality is to be held liable for damages for the death of Vicente Fontanilla if that was attributable to the negligence of the municipality's officers. Civil Code: Whoever by act or omission causes damage to another. such as typhoons. jails. except when. earthquakes. A fiesta shall not be held upon any other date than that lawfully fixed therefor. employees. is that it is governmental in essence.A fiesta may be held in each municipality not oftener than once a year upon a date fixed by the municipal council. 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. Celebration of fiestas. or other public calamities. inundations. the fiesta cannot be held in the date fixed. As stated earlier. For instance. however beneficial to the public the undertaking may be. for weighty reasons. otherwise. Civil Code: The obligation imposed by article 2176 is demandable not only for one's own acts or omission. the function becomes private or proprietary in character.[15] 4. the maintenance of parks is not a source of income for the town. epidemics. the Court of Appeals found and held that there was negligence. 2180. The mere fact that the celebration. The Court of Appeals said: "Amor by himself alone could not have removed the two braces which must be about ten meters long and fastened them on top of the stage for the curtain. much more two poles. the defendants-appellees were negligent and are liable for the death of Vicente Fontanilla.The trial court gave credence to the testimony of Angel Novado. if that did happen. and rightly so. for the stage curtain. 4 at the rear. it would be impractical and unwieldy to use a ten meter bamboo pole. the posts and braces used were of bamboo material.00 was appropriated for the construction of two stages and while the floor of the " zarzuela" stage was of wooden planks. nevertheless there were only 4 in front. particularly. Surely. the guitarist who was pointed to by Novado as the person who removed the two bamboo braces denied having done so.[16] That being the case. The stage was only five and a half meters wide. there was indeed negligence as there was lack of supervision over the use of the stage to prevent such an occurrence. rollo. Having failed to take the necessary steps to maintain the safety of the stage for the use of the participants in the stage presentation prepared in connection with the celebration of the town fiesta. At any rate. 30-31." (pp. According to said defendants. and 5 on each side. it becomes incredible that any person in his right mind would remove those principal braces and leave the front portion of the stage practically unsupported. Where were the rest? The Court of Appeals thus concluded: "The court a quo itself attributed the collapse of the stage 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. that a member of the "extravaganza troupe" removed two principal braces located on the front portion of the stage and used them to hang the screen or " telon". and that when many people went up the stage the latter collapsed. in preventing nonparticipants or spectators from mounting and accumulating on the stage which was not constructed to meet the additional weight. those two braces were "mother" or "principal" braces located semi-diagonally from the front ends of the stage to the front posts of the ticket booth located at the rear of the stage and were fastened with a bamboo twine. L-29993) ."[17] The appellate court also found that the stage was not strong enough considering that only P100. Moreover. We likewise observe that although the stage was described by the petitioners as being supported by "24" posts. This testimony was not believed however by respondent appellate court. a witness of the defendants (now petitioners). The city was conducting a "Know your City Week" and one of the features was the showing of a motion picture in the city auditorium to which the general public was invited and plaintiff Sanders was one of those who attended. City of Long Beach . and that when the Municipality of Malasiqui accepted the donation of services and constructed precisely a "zarzuela stage" for the purpose. [21] We can say that the deceased Vicente Fontanilla was similarly situated as Sanders. in Caloocan. the District Court of Appeal. which was an action against the city for injuries sustained from a fall when plaintiff was descending the steps of the city auditorium. Lastly. the participants in the stage show had the right to expect that the Municipality through its "Committee on entertainment and stage" would build or put up a stage or platform strong enough to sustain the weight or burden of the performance and take the necessary measures to insure the personal safety of the participants. that defendant owed to plaintiff. private respondents argue that the "Midas Extravaganza" which was to be performed during the town fiesta was a "donation" offered by an association of Malasiqui employees of the Manila Railroad Co. held inter alia that the "Know your City Week" was a "proprietary activity" and not a "governmental one" of the city. Second District. and plaintiff was entitled to assume that she would not be exposed to a danger (which in this case consisted of lack of sufficient illumination of the premises) that would come to her through a violation of defendant's duty.[18] Liability rests on negligence which is "the want of such care as a person of ordinary prudence would exercise under the circumstances of the case. In sustaining the award for damages in favor of plaintiff."[19] Thus.The findings of the respondent appellate court that the facts as presented to it establish negligence as a matter of law and that the Municipality failed to exercise the due diligence of a good father of the family. it created a committee in charge of the entertainment and stage. an association of Malasiqui residents responded to the call for the festivities and volunteered to present a stage show. California. petitioner or appellant Municipality cannot evade responsibility and/or liability under the claim that it was Jose Macaraeg who constructed the stage. 1942. The Municipality of Malasiqui resolved to celebrate the town fiesta in January of 1959. an "invitee". the duty of exercising ordinary care for her safety. Vicente Fontanilla was one of the participants who like Sanders had the right to expect that he would not be exposed to danger on that occasion.[20] We agree. Quite relevant to that argument is the American case of Sanders v. will not be disturbed by Us in the absence of a clear showing of an abuse of discretion or a gross misapprehension of facts. The Municipality acting through its . it does not apply to a case of negligence or misfeasance in carrying out an official duty. and are for the peculiar benefit of the corporation in its local or special interest. can hold them responsible for the manner in which they discharge their trust. If the corporation appoints or elects them.municipal council appointed Macaraeg as chairman of the sub-committee on entertainment and in charge of the construction of the "zarzuela" stage. to perform his official duty may file an action for damages and other relief against the latter." [23] In their Petition for review the municipal councilors allege that the Court of Appeals erred in ruling that the holding of a town fiesta is not a governmental function and that there was negligence on their part for not maintaining and supervising the safe use of the stage. and if those duties relate to the exercise of corporate powers. a cardinal inquiry is. . Vol. and the maxim of respondent superior applies. petitioner is responsible or liable for the negligence of its agent acting within his assigned tasks. Macaraeg acted merely as an agent of the Municipality. and in not holding Jose Macaraeg liable for the collapse of the stage and the consequent death of Vicente Fontanilla. [24] We agree with petitioners that the Court of Appeals erred in applying Article 27 of the Civil Code against them. 5th Ed. The Court of Appeals held the councilors jointly and solidarily liable with the municipality for damages under Article 27 of the Civil Code which provides that "any person suffering material or moral loss because a public servant or employee refuses or neglects. p. can continue or remove them. in applying Article 27 of the Civil Code against them." x x x (Dillon on Municipal Corporations. 2879) 5. without just cause. it is because of a plain error committed by respondent court which however is not invoked in petitioners' brief. they may justly be regarded as its agents or servants. whether they are the servants or agents of the corporation. Under the doctrine of respondeat superior mentioned earlier. for this particular article covers a case of non-feasance or nonperformance by a public officer of his official duty. can control them in the discharge of their duties. The remaining question to be resolved centers on the liability of the municipal councilors who enacted the ordinance and created the fiesta committee. IV..[22] "x x x when it is sought to render a municipal corporation liable for the act of servants or agents. If We are led to set aside the decision of the Court of Appeals insofar as these petitioners are concerned. et al. the injury. The Court of Appeals. ) xxx xxx xxx "Directors who merely employ one to give a fireworks exhibition on the corporate grounds are not personally liable for the negligent acts of the exhibitor. he must be a participant in the wrongful act. through Justice. 11. The Court of Appeals in its decision now under review held that the celebration of a town fiesta by the Municipality of Malasiqui was not a governmental function. 3A. Fred Ruiz Castro. It is an elementary principle that a corporation has a personality. merely by reason of his office. 207) "Officers of a corporation are not held liable for the negligence of the corporation merely because of their official relation to it. ibid. The records do not show that said petitioners directly participated in the defective . 207-208. To make an officer of a corporation liable for the negligence of the corporation there must have been upon his part such a breach of duty as contributed to. now Chief Justice. that is to say. separate and distinct from its officers. and that this is authorized under Sec. or helped to bring about." xx xx xx (pp. he must be shown to have personally voted for or otherwise participated in them. is not personally liable for the torts of his corporation.) On these principles We absolve the municipal councilors from any liability for the death of Vicente Fontanilla. 211. held that the Supreme Court is vested with ample authority to review matters not assigned as errors in an appeal if it finds that their consideration and resolution are indispensable or necessary in arriving at a just decision in a given case. directors. 7." (p. the Court." xx xx xx (Fletcher Cyclopedia Corporations... or persons composing it[26] and the latter are not as a rule co-responsible in an action for damages for tort or negligence (culpa aquiliana) committed by the corporation's employees or agents unless there is a showing of bad faith or gross or wanton negligence on their part.In Miguel v. Vol. ibid. [25] We believe that this pronouncement can well be applied in the instant case.[27] “xxx xxx xxx "The ordinary doctrine is that a director. but because of some wrongful or negligent act by such officer amounting to a breach of duty which resulted in an injury . Chap. We upheld that ruling.. p. 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. Rule 51 of the Rules of Court. Under paragraph 11.200. Sup. Martin on the Revised Administrative Code. 482-483. 509 Dept. We AFFIRM in toto the decision of the Court of Appeals insofar as the Municipality of Malasiqui is concerned (L-30183). de Leon. 381. Ct. of Indiana. the records show however that attempts were made by plaintiffs. 21-31. p. although respondent appellate court failed to state the grounds for awarding attorney's fees. Art. pp. The amount of P1. [1] pp.00 is fair and reasonable. cited in Dept. City of Evansville. Sec.[28] We hold. sec. pp. 42-44. rollo of L-29993. pp. Without pronouncement as to costs. 2d 952.954. [8] supra. ibid. In this case of Vicente Fontanilla. Municipal Law as embodied in the Revised Administrative Code. 956 [9] . pp. to secure an extrajudicial compensation from the municipality. 136-137. Art. 56 Am Jur 2d 254. 2125. pp. 126. ibid. 1. p. that the latter gave promises and assurances of assistance but failed to comply. City of Evansville. 199.construction of the "zarzuela" stage or that they personally permitted spectators to go up the platform. [7] 2nd Ed. citing Cooley’s Municipal Corporation. PREMISES CONSIDERED. and it was only eight months after the incident that the bereaved family of Vicente Fontanilla was compelled to seek relief from the courts to ventilate what was believed to be a just cause. of Treasury v. One last point We have to resolve is on the award of attorney's fees by respondent court. 508. Vol. 1. 1963 ed.. of Treasury v. supra. 60 N. 6. 35-37. and We absolve the municipal councilors from liability and SET ASIDE the judgment against them (L-29993). 3-4 of Petitioner's brief. 33 Phil. p. [2] [3] [4] [5] [6] Mendoza v. Sec. now private respondents. 2208 of the Civil Code attorney's fees and expenses of litigation may be granted when the court deems it just and equitable. therefore.E. that there is no error committed in the grant of attorney's fees which after all is a matter of judicial discretion. Petitioner-municipality assails the award. . 2189.. calculated to entertain and instruct the people generally and to arouse and stimulate patriotic sentiments and love of country. Provinces. Unrep. 513 [15] We came across an interesting case which shows that surrounding circumstances plus the political. bridges. supra. supra. et al. The case of Pope v. This was denied. including a display of fireworks. 21 Phil. These celebrations. Cajuigan. de Leon. Art. and sent up a bomb intended to explode in the air. particularly when acting tortiously. 72. The dependants demurred to the complaint invoking the defense that the city was engaged in the performance of a public governmental duty from which it received no pecuniary benefit and for negligence in the performance of which no statutory liability is imposed.. July 4th as a national holiday. accompanied by a musical program including patriotic airs. 629. Ilocos Norte v. Manaois. streets. [12] L-10659. unless made liable by statute. July 5th. 1186 [13] Municipality of Paoay. et al. when that date falls upon Sunday. he is not entitled to protection on account of his office but is liable for his acts like any private individual. is made a public holiday. called Independence Day.. the City of Cebu. by our statutes. or injuries suffered by. al. and have recognized since the government was established. any person by reason of the defective condition of roads. In affirming the order. or. 1958. January 31. 51) This decision was concurred in by three Judges while two dissented.R. the different departments of the government recognize. p. Municipality of Moncada v. social. This demurrer was sustained by the Superior Court of New Haven County. public buildings. All or nearly all of the other states have similar statutes. the Supreme Court of Errors of Connecticut held inter alia: Municipal corporations are exempt from liability for the negligent performance of purely public governmental duties." [11] Mendoza v. and cultural backgrounds may have a decisive bearing on this question. under permissive authority of its charter or of statute. frequently take the form of literary exercises consisting of patriotic speeches and the reading of the Constitution. et. Plaintiff sought to amend his complaint to allege that the celebration was for the corporate advantage of the city.. Civil Code provides - "Art." (99 A. While there is no United States statute making a similar provision.. was an action to recover damages for personal injuries caused during a Fourth of July fireworks display resulting in the death of a bystander alleged to have been caused by dependants' negligence. Throughout the country it has been recognized and celebrated as such. 86 Phil. de Leon.. 2189. sometimes preceded by the firing of cannon and followed by fireworks. 513 In Palma v. City of New Haven. the Court held that although the prosecution of crimes is a governmental function and as a rule the province and city of Cebu are not civilly liable by reason thereof. At any rate the rationale of the Majority Opinion is evident from this excerpt: "July 4th. was engaged in the performance of a governmental duty. nonetheless when a public official goes beyond the scope of his duty. 184 [14] Mendoza v. cities and municipalities shall be liable for damages for the death of. That such celebrations are of advantage to the general public and their promotion a . conducted a public Fourth of July celebration. Graciano.[10] For instance. which. et al. 102 Phil.. "A municipal corporation. and then killed a spectator. but which failed to explode until it reached the ground. 99 Phil. and other public works under their control or supervision. proper subject of legislation can hardly be questioned. x x x" (ibid., p. 52) [16] See page 8 of Court of Appeals decision, p. 28 rollo L-29993 p. 29, ibid. [17] [18] De Gala-Sison v. Manalo, 8 SCRA 595; Ramos v. Pepsi-Cola Bottling Co., 19 SCRA 289; Tan v. Court of Appeals, et al., 20 SCRA 54; Chan v. Court of Appeals, et al., 33 SCRA 737, among others. [19] 19 Cal. Jur., p. 548; Corliss v. Manila Railroad Co., 27 SCRA 674 Respondents' brief, p. 70, rollo L-29993 129 P. 2d 511, 514 See page 8 of this Decision for quotation from Dillon on Municipal Corporations. p. 31, rollo L-29993 pp. 1-3, petitioners' brief 29 SCRA 760 [20] [21] [22] [23] [24] [25] [26] Banque General Belge, et al. v. Walter Bull & Co., Inc. and Walter Bull, 47 Off. Gaz., No. 1, 140 [27] See Mindanao Motor Line, Inc. et al. v. Court of Industrial Relations, et al., 6 SCRA 710 pp. 34, 72-73, rollo L-29993 [28] 9. Municipality of San Fernando, La Union v. Firme, 195 SCRA 692 (1991) G.R. No. L-52179 April 8, 1991 MUNICIPALITY OF SAN FERNANDO, LA UNION, petitioner vs. HON. JUDGE ROMEO N. FIRME, JUANA RIMANDO-BANIÑA, IAUREANO BANIÑA, JR., SOR MARIETA BANIÑA, MONTANO BANIÑA, ORJA BANIÑA, AND LYDIA R. BANIÑA, Respondents. This is a petition for certiorari with prayer for the issuance of a writ of preliminary mandatory injunction seeking the nullification or modification of the proceedings and the orders issued by the respondent Judge Romeo N. Firme, in his capacity as the presiding judge of the Court of First Instance of La Union, Second Judicial District, Branch IV, Bauang, La Union in Civil Case No. 107BG, entitled "Juana Rimando Baniña, et al. vs. Macario Nieveras, et al." dated November 4, 1975; July 13, 1976; August 23,1976; February 23, 1977; March 16, 1977; July 26, 1979; September 7, 1979; November 7, 1979 and December 3, 1979 and the decision dated October 10, 1979 ordering defendants Municipality of San Fernando, La Union and Alfredo Bislig to pay, jointly and severally, the plaintiffs for funeral expenses, actual damages consisting of the loss of earning capacity of the deceased, attorney's fees and costs of suit and dismissing the complaint against the Estate of Macario Nieveras and Bernardo Balagot. The antecedent facts are as follows: Petitioner Municipality of San Fernando, La Union is a municipal corporation existing under and in accordance with the laws of the Republic of the Philippines. Respondent Honorable Judge Romeo N. Firme is impleaded in his official capacity as the presiding judge of the Court of First Instance of La Union, Branch IV, Bauang, La Union. While private respondents Juana Rimando-Baniña, Laureano Baniña, Jr., Sor Marietta Baniña, Montano Baniña, Orja Baniña and Lydia R. Baniña are heirs of the deceased Laureano Baniña Sr. and plaintiffs in Civil Case No. 107-Bg before the aforesaid court. At about 7 o'clock in the morning of December 16, 1965, a collision occurred involving a passenger jeepney driven by Bernardo Balagot and owned by the Estate of Macario Nieveras, a gravel and sand truck driven by Jose Manandeg and owned by Tanquilino Velasquez and a dump truck of the Municipality of San Fernando, La Union and driven by Alfredo Bislig. Due to the impact, several passengers of the jeepney including Laureano Baniña Sr. died as a result of the injuries they sustained and four (4) others suffered varying degrees of physical injuries. On December 11, 1966, the private respondents instituted a compliant for damages against the Estate of Macario Nieveras and Bernardo Balagot, owner and driver, respectively, of the passenger jeepney, which was docketed Civil Case No. 2183 in the Court of First Instance of La Union, Branch I, San Fernando, La Union. However, the aforesaid defendants filed a Third Party Complaint against the petitioner and the driver of a dump truck of petitioner. Thereafter, the case was subsequently transferred to Branch IV, presided over by respondent judge and was subsequently docketed as Civil Case No. 107-Bg. By virtue of a court order dated May 7, 1975, the private respondents amended the complaint wherein the petitioner and its regular employee, Alfredo Bislig were impleaded for the first time as defendants. Petitioner filed its answer and raised affirmative defenses such as lack of cause of action, non-suability of the State, prescription of cause of action and the negligence of the owner and driver of the passenger jeepney as the proximate cause of the collision. In the course of the proceedings, the respondent judge issued the following questioned orders, to wit: (1) Order dated November 4, 1975 dismissing the cross-claim against Bernardo Balagot; (2) Order dated July 13, 1976 admitting the Amended Answer of the Municipality of San Fernando, La Union and Bislig and setting the hearing on the affirmative defenses only with respect to the supposed lack of jurisdiction; (3) Order dated August 23, 1976 deferring there resolution of the grounds for the Motion to Dismiss until the trial; (4) Order dated February 23, 1977 denying the motion for reconsideration of the order of July 13, 1976 filed by the Municipality and Bislig for having been filed out of time; (5) Order dated March 16, 1977 reiterating the denial of the motion for reconsideration of the order of July 13, 1976; (6) Order dated July 26, 1979 declaring the case deemed submitted for decision it appearing that parties have not yet submitted their respective memoranda despite the court's direction; and (7) Order dated September 7, 1979 denying the petitioner's motion for reconsideration and/or order to recall prosecution witnesses for cross examination. On October 10, 1979 the trial court rendered a decision, the dispositive portion is hereunder quoted as follows: IN VIEW OF ALL OF (sic) THE FOREGOING, judgment is hereby rendered for the plaintiffs, and defendants Municipality of San Fernando, La Union and Alfredo Bislig are ordered to pay jointly and severally, plaintiffs Juana Rimando-Baniña, Mrs. Priscilla B. Surell, Laureano Baniña Jr., Sor Marietta Baniña, Mrs. Fe B. Soriano, Montano Baniña, Orja Baniña and Lydia B. Baniña the sums of P1,500.00 as funeral expenses and P24,744.24 as the lost expected earnings of the late Laureano Baniña Sr., P30,000.00 as moral damages, and P2,500.00 as attorney's fees. Costs against said defendants. The Complaint is dismissed as to defendants Estate of Macario Nieveras and Bernardo Balagot. SO ORDERED. (Rollo, p. 30) Petitioner filed a motion for reconsideration and for a new trial without prejudice to another motion which was then pending. However, respondent judge issued another order dated November 7, 1979 denying the motion for reconsideration of the order of September 7, 1979 for having been filed out of time. Finally, the respondent judge issued an order dated December 3, 1979 providing that if defendants municipality and Bislig further wish to pursue the matter disposed of in the order of July 26, 1979, such should be elevated to a higher court in accordance with the Rules of Court. Hence, this petition. Petitioner maintains that the respondent judge committed grave abuse of discretion amounting to excess of jurisdiction in issuing the aforesaid orders and in rendering a decision. Furthermore, petitioner asserts that while appeal of the decision maybe available, the same is not the speedy and adequate remedy in the ordinary course of law. On the other hand, private respondents controvert the position of the petitioner and allege that the petition is devoid of merit, utterly lacking the good faith which is indispensable in a petition for certiorari and prohibition. (Rollo, p. 42.) In addition, the private respondents stress that petitioner has not considered that every court, including respondent court, has the inherent power to amend and control its process and orders so as to make them conformable to law and justice. ( Rollo, p. 43.) The controversy boils down to the main issue of whether or not the respondent court committed grave abuse of discretion when it deferred and failed to resolve the defense of non-suability of the State amounting to lack of jurisdiction in a motion to dismiss. In the case at bar, the respondent judge deferred the resolution of the defense of non-suability of the State amounting to lack of jurisdiction until trial. However, said respondent judge failed to resolve such defense, proceeded with the trial and thereafter rendered a decision against the municipality and its driver. The respondent judge did not commit grave abuse of discretion when in the exercise of its judgment it arbitrarily failed to resolve the vital issue of non-suability of the State in the guise of the municipality. However, said judge acted in excess of his jurisdiction when in his decision dated October 10, 1979 he held the municipality liable for the quasi-delict committed by its regular employee. The doctrine of non-suability of the State is expressly provided for in Article XVI, Section 3 of the Constitution, to wit: "the State may not be sued without its consent." Stated in simple parlance, the general rule is that the State may not be sued except when it gives consent to be sued. Consent takes the form of express or implied consent. Express consent may be embodied in a general law or a special law. 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. A special law may be passed to enable a person to sue the government for an alleged quasi-delict, as in Merritt v. Government of the Philippine Islands (34 Phil 311). (see United States of America v. Guinto, G.R. No. 76607, February 26, 1990, 182 SCRA 644, 654.) Consent is implied when the government enters into business contracts, thereby descending to the level of the other contracting party, and also when the State files a complaint, thus opening itself to a counterclaim. (Ibid) Municipal corporations, for example, like provinces and cities, 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. (Cruz, Philippine Political Law, 1987 Edition, p. 39) A distinction should first be made between suability and liability. "Suability depends on the consent of the state to be sued, liability on the applicable law and the established facts. 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." (United States of America vs. Guinto, supra, p. 659-660) Anent the issue of whether or not the municipality is liable for the torts committed by its employee, the test of liability of the municipality depends on whether or not the driver, acting in behalf of the municipality, is performing governmental or proprietary functions. As emphasized in the case of Torio vs. Fontanilla (G. R. No. L-29993, October 23, 1978. 85 SCRA 599, 606), the distinction of powers becomes important for purposes of determining the liability of the municipality for the acts of its agents which result in an injury to third persons. Another statement of the test is given in City of Kokomo vs. Loy, decided by the Supreme Court of Indiana in 1916, thus: Municipal corporations exist in a dual capacity, and their functions are twofold. 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 them, 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." (112 N.E., 994-995) (Ibid, pp. 605-606.) It has already been remarked that 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 capacity. In permitting such entities to be sued, the State merely gives the claimant the right to show that the defendant was not acting in its governmental capacity when the injury was committed or that the case comes under the exceptions recognized by law. Failing this, the claimant cannot recover. (Cruz, supra, p. 44.) In the case at bar, 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 Fernando's municipal streets." (Rollo, p. 29.) 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, We rule that the driver of the dump truck was performing duties or tasks pertaining to his office. We already stressed in the case of Palafox, et. al. vs. Province of Ilocos Norte, the District Engineer, and the Provincial Treasurer (102 Phil 1186) that "the construction or maintenance of roads in which the truck and the driver worked at the time of the accident are admittedly governmental activities." After a careful examination of existing laws and jurisprudence, We arrive at the conclusion that the municipality cannot be held liable for the torts committed by its regular employee, who was then engaged in the discharge of governmental functions . Hence, the death of the passenger �� tragic and deplorable though it may be �� imposed on the municipality no duty to pay monetary the Republic gave as justification therefor the fact that the case involves an over TWO BILLION PESO judgment against the State. Via this verified petition for certiorari and prohibition under Rule 65 of the Rules of Court. By any standard. VICENTE A. 118527 of the Registry of Deeds of Manila in the name of the herein private respondent Tarcila Laperal Mendoza (Mendoza). RESPONDENTS. No. Hidalgo. 2007 ] REPUBLIC OF THE PHILIPPINES. October 04. ACCORDINGLY. VS.60-square meter lot once covered by Transfer Certificate of Title (TCT) No." for short). HON. IN HIS CAPACITY AS SHERIFF IV. Republic V. the Republic of the Philippines ("Republic.compensation. the case indeed involves a colossal sum of money which. The lot is situated at No.. the petition is GRANTED and the decision of the respondent court is hereby modified. 1440 Arlegui St. This consideration. Manila. San Miguel. 534 SCRA 619 (2007) [ G.924. CARMELO V. Branch 37. HIDALGO. absolving the petitioner municipality of any liability in favor of private respondents. now stands the Presidential Guest House which was home to two (2) . SO ORDERED. law and jurisprudence. AND TARCILA LAPERAL MENDOZA. IN HIS CAPACITY AS PRESIDING JUDGE OF THE REGIONAL TRIAL COURT OF MANILA. presents special and compelling reasons of public interests why direct recourse to the Court should be allowed. allegedly rendered in blatant violation of the Constitution. All premises considered. in its Civil Case No. BRANCH 37. In directly invoking the Court's original jurisdiction to issue the extraordinary writs of certiorari and prohibition. married to Perfecto Mendoza. on the face of the assailed decision. the Court is convinced that the respondent judge's dereliction in failing to resolve the issue of non-suability did not amount to grave abuse of discretion. 99-94075. comes to this Court to nullify and set aside the decision dated August 27. 10. 2003 and other related issuances of the Regional Trial Court (RTC) of Manila. thru the Office of the Solicitor General (OSG). PETITIONER. juxtaposed with the constitutional and legal questions surrounding the controversy. in fine. CACHERO. shall be the liability of the national government or. But said judge exceeded his jurisdiction when it ruled on the issue of liability. near the Malacañang Palace complex.R. On this lot. hereinafter referred to as the Arlegui property. 161657. without challenge from any of the respondents. as an exception to the policy on hierarchy of courts. REGIONAL TRIAL COURT OF MANILA. the taxpayers. At the core of the litigation is a 4. In her complaint. the RTC. Fidel Vivar. 118911 in the name of the Republic. 118527 and had left and/or vacated the subject property. 118527. What is material is that in an Order of March 17. and . 2003 and set a date for pre-trial. No. the Register of Deeds of Manila and one Atty. the RTC of Manila. 99-94075. she added. docketed as Civil Case No.R. The court would also deny. in open court and in the presence of the Republic's counsel. continued "until the first week of July 1975 when a group of armed men representing themselves to be members of the Presidential Security Group [PSG] of the then President Ferdinand E. 118527 had already been cancelled by virtue of a deed of sale in favor of the Republic allegedly executed by her and her deceased husband on July 15. the Republic set up.. in G. Mendoza filed a Motion for Leave of Court to file a Third Amended Complaint with a copy of the intended third amended complaint thereto attached. In the May 16. she and her predecessors-in-interest had been in peaceful and adverse possession of the property as well as of the owner's duplicate copy of TCT No. SP No. 60749. Branch 35. [she] handed her Owner's Duplicate Certificate Copy of TCT No. The intervening legal tussles are not essential to this narration. Such possession. admitted the third amended complaint.[2] On appeal.[3] From Branch 35 of the trial court whose then presiding judge inhibited himself from hearing the remanded Civil Case No. Answering. On a petition for certiorari. in another order dated May 12. and compelled her and the members of her household to vacate the same . 118527.. Mendoza essentially alleged being the owner of the disputed Arlegui property which the Republic forcibly dispossessed her of and over which the Register of Deeds of Manila issued TCT No. 2000. ordered the Republic to file its answer thereto within five (5) days from May 16.[4] In the same third amended complaint. the State's immunity from suit.former Presidents of the Republic and now appears to be used as office building of the Office of the President. Mendoza filed a suit with the RTC of Manila for reconveyance and the corresponding declaration of nullity of a deed of sale and title against the Republic..[1] The facts: Sometime in June 1999. 118911.. On May 5. 2000. Copy of TCT No. this Court. presided by the respondent judge. 1975. since time immemorial. 2003 setting to hear the motion. Marcos. sustained the CA's reversal action. among other affirmative defenses. the Court of Appeals (CA). dismissed Mendoza's complaint. TCT No. 99-94075 and eventually raffled to Branch 35 of the court.. had forcibly entered [her] residence and ordered [her] to turn over to them her . Mendoza's omnibus motion for reconsideration." Mendoza further alleged the following: 1. 155231. Per verification. the case was re-raffled to Branch 37 thereof. 118911 in the name of the Republic.. in CA-G. reversed the trial court's assailed orders and remanded the case to the court a quo for further proceedings. 1975 which provided the instrumentation toward the issuance of TCT No. 118525 . thus. And aside from the cancellation of TCT No.. Mendoza sought the declaration of nullity of a supposed deed of sale dated July 15. Mendoza also asked for the reinstatement of her TCT No. as later amended. 1975 and acknowledged before Fidel Vivar which deed was annotated at the back of TCT No. however. Mendoza averred that. 2003.R. In her adverted third amended complaint for recovery and reconveyance of the Arlegui property. out of fear for their lives. 118527 under PE: 2035/T-118911 dated July 28. consisted of her testimony denying having executed the alleged deed of sale dated July 15. 2003 declaring the petitioner Republic as in default and allowing the private respondent to present her evidence ex-parte. 2003. the trial court rendered a judgment by default[10] for Mendoza and against the Republic. 2003. asked that it be given a period of thirty (30) days from May 21. 2003 came and went. 2003 or until June 20. the Republic manifested its inability to simply adopt its previous answer and. null and void from the beginning. Republic to pay plaintiff's counsel a sum equivalent to TWENTY FIVE (25%) PER CENT of the current value of the subject property and/or whatever amount is recovered under the premises. That the aforementioned deed of sale is fictitious as she (Mendoza) and her husband have not executed any deed of conveyance covering the disputed property in favor of the Republic. beginning July 1975 until it finally vacates the same. Declaring the deed of sale dated July 15. Eventually. 5. as non-existent and/or fictitious. since the trial court had meanwhile issued an order[6] dated July 7. Dated August 27. therefore. 118911. the trial court's decision dispositively reads as follows: WHEREFORE. let alone appearing before Fidel Vivar. and. To the trial court. while Exhibit "F"[8] states that Fidel Vivar was not a commissioned notary public for and in the City of Manila for the year 1975. be located. but no answer was filed. however.. 2003. 1975 which paved the way for the issuance of TCT No.. According to her. In it. "F"). said deed is fictitious or inexistent. by the Office of Clerk of Court. judgment is hereby rendered: 1. 2003 within which to submit an Answer. the OSG moved for a 30-day extension at each instance. as evidenced by separate certifications. as plaintiff a quo. the first (Exh. 2003 and again on August 19.. just and equitable under the premises. Exhibit "E"[7] states that a copy of the supposed conveying deed cannot. plaintiff prays for such other relief. On July 18. she prayed for the following: 4. annotated at the back of [TCT] No. On May 21. The filing of the last two motions for extension proved to be an idle gesture. 118527 as PE:2035/T-118911. plus interest thereon at the legal rate.[5] June 20. the Republic had veritably confiscated Mendoza's property. "E"). represented by the OSG. . and deprived her not only of the use thereof but also denied her of the income she could have had otherwise realized during all the years she was illegally dispossessed of the same. filed a Motion for Extension (With Motion for Cancellation of scheduled pre-trial). accordingly. the Republic. The evidence for the private respondent. RTC Manila. Three other witnesses[9] testified. 1975. despite diligent efforts of records personnel.2. albeit their testimonies revolved around the appraisal and rental values of the Arlegui property. Ordering the . Republic to pay plaintiff [Mendoza] a reasonable compensation or rental for the use or occupancy of the subject property in the sum of FIVE HUNDRED THOUSAND (P500. Inter alia. issued by the Register of Deeds for Manila and the second (Exh..000.00) PESOS a month with a five (5%) per cent yearly increase. Further. Ordering the . On January 22. Ordering the defendant Republic .. Declaring that [TCT] No. 118527 and to issue.627.. to cancel plaintiff's TCT No.. plus an additional interest at the legal rate.. to pay the plaintiff the sum of ONE BILLION FOUR HUNDRED EIGHTY MILLION SIX HUNDRED TWENTY SEVEN THOUSAND SIX HUNDRED EIGHTY EIGHT (P1. and the opportunity cost at the rate of three (3%) per cent per annum. SO ORDERED. With pronouncement as to the costs of suit.. to pay just compensation in the sum of ONE HUNDRED FORTY THREE MILLION SIX HUNDRED THOUSAND (P143.. when this case was called for the purpose.[11] Denied also was its subsequent plea for reconsideration. 118527. a new Transfer Certificate of Title in favor of the defendant Republic.00) PESOS. 2007.) Subsequently. plus interest at the legal rate. directing the defendant Register of Deeds.Order denying the Notice of Appeal filed on November 27..[12] These twin denial orders were followed by several orders and processes issued by the trial court on separate dates as hereunder indicated: 1.600. until the whole amount is paid in full for the acquisition of the subject property.[13] 2..00) PESOS. By Resolution[17] of November 20. 6. and. 2007 to submit the compromise . 2003 . commencing from this date until the whole amount is paid in full. the interest thereon at the legal rate. Ordering the defendant Republic . the same having been filed beyond the reglementary period. (Words in bracket and emphasis added. 2003 . 2003 . 2003. on the other hand. the case was set for oral arguments.480. to pay the plaintiff attorney's fee. but was denied.[14] 3. to execute the necessary deed of conveyance in favor of the defendant Republic . in an amount equivalent to FIFTEEN (15%) PER CENT of the amount due to the plaintiff..688.[16] Hence. 4. 2003 . both parties manifested their willingness to settle the case amicably.. Ordering the defendant Register of Deeds for the City of Manila to reinstate plaintiff [Mendoza's TCT] No.Order[15] granting the private respondent's motion for execution.. 3. this petition for certiorari. 2003. representing the reasonable rental for the use of the subject property. December 17. upon payment of the just compensation for the acquisition of her property.. commencing July 1975 continuously up to July 30. a new trial per order of the trial court of October 7. the Republic moved for. upon presentation of the said deed of conveyance. 2003.Certificate of Finality declaring the August 27. for which reason the Court gave them up to February 28. 4. 2003 decision final and executory. thereby making it null and void from the beginning. 7. 118911 of the defendant Republic of the Philippines has no basis.000.2. Ordering the plaintiff. in lieu thereof. 5. November 27.Writ of Execution.. Ordering the defendant Republic . 2006. December 19. December 22. [19] While the ideal lies in avoiding orders of default. what the respondent judge did hew with what Section 3. the mere issuance by the trial court of the order of default followed by a judgment by default can easily be sustained as correct and doubtless within its jurisdiction. Sought to be nullified. connotes capricious. also on the ground that they were issued in grave abuse of discretion amounting to lack or in excess of jurisdiction. ..If the defending party fails to answer within the time allowed therefor.[23] Under the premises.[18] Grave abuse of discretion. the validity of the default judgment. declare the defending party in default. are the orders and processes enumerated immediately above issued after the rendition of the default judgment. but this does not mean that its right to due process had been violated. the OSG. cannot plausibly be laid at the doorstep of the respondent judge on account of his having issued the default order against the petitioner. Following several approved extensions of the February 28. in its procedural aspect." usually used in tandem with "arbitrary.[20] the policy of the law being to have every litigated case tried on its full merits. the defaulting defendant is deemed to have waived his right to be heard or to take part in the trial. For. consequent to being declared in default. Default. It starts off by impugning the order of default and the judgment by default. manifested that it is submitting the case for resolution on the merits owing to the inability of the parties to agree on an acceptable compromise. Surely. vitiate. Petitioner's posture is simply without merit. despotic..[22] The abuse must be of such degree as to amount to an evasion of a positive duty or a virtual refusal to perform a duty enjoined by law." conveys the notion of willful and unreasoning action. Deprivation of procedural due process is obviously the petitioner's threshold theme. The petitioner may have indeed been deprived of such hearing. declaration of. the law itself imposes such deprivation of the right to participate as a form of penalty against one unwilling without justification to join issue upon the allegations tendered by the plaintiff. Thereupon.[21] the act of the respondent judge in rendering the default judgment after an order of default was properly issued cannot be struck down as a case of grave abuse of discretion. however. the court shall. guarantees in the minimum the opportunity to be heard. on August 6. a disposition directing the Republic to pay an enormous sum without the trial court hearing its side does not. The word "capricious. the petitioner urges the Court to strike down as a nullity the trial court's order declaring it in default and the judgment by default that followed. To the petitioner. The handling solicitors simply squandered the Republic's opportunity to be heard. Rule 9 of the Rules of Court prescribes and allows in the event the defending party fails to seasonably file a responsive pleading.agreement for approval." in its juridical sense. The term "grave abuse of discretion. on due procedural ground. the court shall proceed to render judgment granting the claimant such relief as his pleading may warrant. upon motion of the claiming party with notice to the defending party. without more. 3. Due process. 2007 deadline. 2007. as where the power is exercised in a capricious manner. oppressive or whimsical exercise of judgment as is equivalent to lack of jurisdiction. and proof of such failure. too. In this recourse. The provision reads: SEC.. For. But more importantly.. the respondent judge committed serious jurisdictional error when he proceeded to hear the case and eventually awarded the private respondent a staggering amount without so much as giving the petitioner the opportunity to present its defense. unless the court in its discretion requires the claimant to submit evidence . then proceeding with the hearing and eventually rendering a default judgment. Petitioner lists five (5) overlapping grounds for allowing its petition. can not be interrupted by a pro forma motion. and hence accountability should go up all the way to the top of the totem pole of authority. the issuance by the trial court of the Order dated December 17. what the trial court wrote in its aforementioned impugned order of December 17.[24] Withal. it is not a remedy to correct errors of judgment. 2003[25] denying the petitioner's notice of appeal after the court caused the issuance on November 27. the petitioner would ascribe jurisdictional error on the respondent judge for denying its motion for new trial based on any or a mix of the following factors. as the petitioner would have this Court believe. that of the handling solicitor.[27] that a void transfer of property can be recovered by accion reivindicatoria. 2003 a copy of the RTC decision in this case.[26] (Words in bracket added. the assistant solicitor and the Solicitor General himself. 2003 merits approval: In the case at bar. 2003.. which the RTC denied. the OSG receiving a copy of the order of denial on October 9. which motion was subsequently denied. a Monday. Emphasis in the original.[28] and that the legal fiction of indefeasibility of a Torrens title cannot be used as a shield to perpetuate fraud. In this regard. new trial within which to perfect [an] appeal .. 2003 decision can hardly be described as arbitrary. let alone the fact that an action for the declaration of the inexistence of a contract. and (3) the value of the property involved. For. The Court is not convinced. they had one (1) day from receipt of a copy of the order denying .. the OSG sought reconsideration of the order denying the motion for new trial. the defendants filed a motion for reconsideration which was later declared by the Court as pro forma motion in the Order dated 25 November 2003. supra: (a) The petitioner. partly covered by and discussed under the first ground for allowing its petition. Then. when defendants [Republic et al. Hence the filing of the notice of appeal on 27 November 2007 came much too late for by then the judgment had already become final and executory. xxx Accordingly.And going to another point. Since defendants had received a copy of the order denying their motion for new trial on 09 October 2003. Given the foregoing time perspective. hence had up to September 13. Hence. 2003. But instead of doing so. The motion for reconsideration was denied per Order dated November 25. they only have one (1) day left within which to file the notice of appeal. about the trial court taking cognizance of the case notwithstanding private respondent's claim or action being barred by prescription and/or laches cannot be considered favorably. 2003. thru the OSG. the cited reasons advanced by the petitioner for a new trial are not recognized under Section 1. and (c) On October 24. The running of the prescriptive period.. therefore.. (b) On September 15. Rule 37 of the Rules of Court for such recourse. too. viz. 2003 of a certificate of finality of its August 27.] filed their motion for new trial on the last day of the fifteen day (15) prescribed for taking an appeal. as here.) It cannot be over-emphasized at this stage that the special civil action of certiorari is limited to resolving only errors of jurisdiction. a copy of which the OSG received on the same date. Even as the Court particularly notes what the trial court had said on the matter of negligence: that all of the petitioner's pleadings below bear at least three signatures. (1) the failure to file an answer is attributable to the negligence of the former handling solicitor. the Court takes stock of the following key events and material dates set forth in the assailed December 17. 2003. within which to perfect an appeal. there is no cogent reason to disturb the denial by the trial court of the motion for new trial and the denial of the reiterative motion for reconsideration.. the OSG filed its motion for new trial. the petitioner's lament. received on August 29. a Saturday. does not prescribe. 2003. 2003 was denied and the moving party has only the remaining period from notice of notice of denial within which to file a notice of appeal. 2003 order. it is clear that the motion for new trial filed on the fifteenth (15th) day after the decision was received on August 29.[29] the trial court's . reckoned from that date. (2) the meritorious nature of the petitioner's defense. but by what is fair.e. And the error relates to basic fundamentals of law as to constitute grave abuse of discretion. the trial court would have the Republic pay the total amount of about P1. i.000.688. Accordingly. The court acts in excess of jurisdiction if it awards an amount beyond the claim made in the complaint or beyond that proved by the evidence. Section 3(d) of the Rules of Court[30] which defines the extent of the relief that may be awarded in a judgment by default. private respondent's total rental claim would. however. private respondent fixed the assessed value of her Arlegui property at P2. The evidence adduced below indeed adequately supports a conclusion that the Office of the President. let alone paying such owner just compensation.00 which represents the acquisition cost of the disputed property.900. The restoration ought to be complemented by some form of monetary compensation for having been unjustly deprived of the beneficial use thereof. with a five percent (5%) yearly increase plus interest at the legal rate beginning July 1975.480. and the reinstatement of her cancelled certificate of title are legally correct as they are morally right. 118911) in the name of petitioner Republic. but not.48 Billion or the mindboggling amount of P1. however. The Court finds the monetary award set forth therein to be erroneous. This is not to mention the award of attorney's fees in an amount equivalent to 15% of the amount due the private respondent.[31] While a defaulted defendant may be said to be at the mercy of the trial court.624 Billion.00.388. after all. In its assailed decision. And in the prayer portion of her third amended complaint for recovery. All told. she asked to be restored to the possession of her property and that the petitioner be ordered to pay her. This figure is on top of the P143. a month before the trial court rendered judgment.388.426. for the taking of a property with a declared assessed value of P2. restoring private respondent to her possession of the Arlegui property is still legally and physically feasible.00. but without going through the legal process of expropriation. In doing so. the trial court ordered the petitioner to pay private respondent the total amount of over P1. only so much as has been alleged and proved. From July 1975 when the PSG allegedly took over the subject property to July 2003. While not exactly convenient because the Office of the President presently uses it for mix residence and office purposes. granting private respondent's basic plea for recovery of the Arlegui property. at best. as reasonable compensation or rental use or occupancy thereof.627. the Rules of Court and certainly the imperatives of fair play see to it that any decision against him must be in accordance with law. in the varying amounts and level fixed in the assailed decision of the trial court and set to be executed by the equally assailed writ of execution. is a registered owner of a piece of land who. representing the reasonable rental for the property. or P6 Million a year. the respondent judge brazenly went around the explicit command of Rule 9. As may be noted. to be exact..990. 118527) in the name of the private respondent and the issuance of a new one (TCT No. For what is before us. which was legally hers all along. or a period of 28 years. wrested possession of the property in question and somehow secured a certificate of title over it without a conveying deed having been executed to legally justify the cancellation of the old title (TCT No. errors of judgment not correctable by certiorari.00 a month.[32] In the abstract.00. the interest rate thereon at the legal rate and the opportunity cost. only amount to P371.00. however.600. this means that the judgment must not be characterized by outrageous onesidedness. stop with just restoring the private respondent to her possession and ownership of her property. exclusive of interest.disinclination not to appreciate in favor of the Republic the general principles of prescription or laches constitutes. . the sum of P500.440.000. during the administration of then President Marcos. per the OSG's computation. just and equitable that always underlie the enactment of a law. The Court cannot. during the early days of the martial law regime. lost possession thereof to the Government which appropriated the same for some public use. 000. they can not be enforced by processes of law. costs not being allowed against the Republic. Private respondent is in the twilight of her life. The imperatives of fair dealing demand no less.would be fair to both the petitioner and the private respondent and. even perhaps at the present real estate business standards. This asking figure is clearly unconscionable. in law and equity. the Court. Albeit title to the Arlegui property remains in the name of the petitioner Republic. at the same time. if not downright ridiculous. This. citing Herrera v. the amount private respondent particularly sought and attempted to prove. a monthly rental value of at least P500. Pasay City. and in accord with the elementary sense of justice. is the right thing to do. What the martial law regime took over was not exactly an area with a new and imposing structure. The property is relatively small in terms of actual area and had an assessed value of only P2. as reduced herein. while perhaps delayed. the grant of monetary award is not without parallel. an award of P20. is its obligation. The process of balancing the interests of both parties is not an easy one.[34] ordered payment of just compensation but in the form of interest when a return of the property was no longer feasible.00 a month for the use and occupancy of the Arlegui property. If the same office will undertake to pay its obligation with reasonable dispatch or in a manner acceptable to the private respondent. Palacio[38] teaches that a judgment against the State generally operates merely to liquidate and establish the plaintiff's claim in the absence of express provision. while perhaps a little bit arbitrary.for the use and occupancy of the Arlegui property . Accordingly. will have its day.[39] Any delay in the implementation of this .000. Auditor General. The assessment of costs of suit against the petitioner is. if there was any.900. however.[33] a case where a registered owner also lost possession of a piece of lot to a municipality which took it for a public purposes without instituting expropriation proceedings or paying any compensation for the lot. It is basic that government funds and properties may not be seized under writs of execution or garnishment to satisfy such judgments.00.000. given the very restrictive entry and egress conditions prevailing at the vicinity at that time and even after.[37] Republic v. The Arlegui property had minimal rental value during the relatively long martial law years. And the Court would be remiss in the discharge of its duties as dispenser of justice if it does not exhort the Office of the President to comply with what. attendant circumstances considered. then simple justice. to us. nullified. In Alfonso v. is reasonable and may be granted pro hac vice considering the following hard realities which the Court takes stock of: 1. To be sure. being now over 90 years of age. unless otherwise provided by law. it is actually the Office of the President which has beneficial possession of and use over it since the 1975 takeover. be within acceptable legal bounds. the obvious question that comes to mind is the level of compensation which . it behooves that office to make the appropriate budgetary arrangements towards paying private respondent what is due her under the premises. is affirmed.Given the above perspective.00 a year. But surely.000. The award of attorney's fees equivalent to 15% of the amount due the private respondent. otherwise.388. and 3.00 or P6. 2.[35] The assailed trial court's issuance of the writ of execution[36] against government funds to satisfy its money judgment is also nullified. the Arlegui property cannot possibly be assigned. To the Court. petitioner Republic." Petition. is hereby strongly enjoined to take the necessary steps.disposition would be a bitter cut. The respondent court's assailed decision of August 27. 37. the presiding judge of the respondent court. Annex "I. id. their agents and persons acting for and in their behalves are permanently enjoined from enforcing said writ of execution. at 106. id.480. with reasonable dispatch. Should it be necessary. . Mendoza the sum of One Billion Four Hundred Eighty Million Six Hundred Twenty Seven Thousand Six Hundred Eighty Eight Pesos (P1. Mendoza's TCT No. at 108. the Register of Deeds of Manila shall execute the necessary conveying deed to effect the reinstatement of title or the issuance of a new title to her. at 105. 2003 insofar as it nullified TCT No. at 77 et seq. the decision of the Regional Trial Court of Manila dated August 27. at 93. id. It is MODIFIED in the sense that for the use and occupancy of the Arlegui property.688. 2003 against government funds are hereby declared null and void. 2003 insofar as it ordered the petitioner Republic of the Philippines to pay private respondent Tarcila L. Accordingly." Petition. make the appropriate budgetary arrangements to pay private respondent Tarcila L. rollo. [5] Annex "M. 118527. id. Mendoza or her assigns the amount adjudged due her under this disposition. [1] [2] Page 12 of the Decision of the RTC of Manila.000. The portion assessing the petitioner Republic for costs of suit is also declared null and void. [3] Annex "J. at 47. WHEREFORE. thru the Office of the President. [6] Annex "A.627. the private respondent. id." Petition.' Petition. plus an additional interest of 6% per annum on the total amount due upon the finality of this Decision until the same is fully paid. consistent with the basic tenets of justice. Br. [7] Id. petitioner Republic is ordered to pay private respondent the reasonable amount of P20. p. Petitioner is further ordered to pay private respondent attorney's fees equivalent to 15% of the amount due her under the premises. a writ of certiorari is hereby ISSUED in the sense that: 1. or to issue her a new certificate of title is AFFIRMED. 118911 of petitioner Republic of the Philippines and ordered the Register of Deeds of Manila to reinstate private respondent Tarcila L. The Order of the respondent court dated December 19. However. 2003 for the issuance of a writ of execution and the Writ of Execution dated December 22. 2. fairness and equity." Petition. Accordingly.00) representing the purported rental use of the property in question. at 94 et seq. and.00 a month beginning July 1975 until it vacates the same and the possession thereof restored to the private respondent. the interest thereon and the opportunity cost at the rate of 3% per annum plus the interest at the legal rate added thereon is nullified. 59. [4] Annex "K. [8] Id. G. Court of Appeals. 23 SCRA 899. Rollo. Adm. citing Merritt v. id. [22] Regalado. [13] Annex "E. 1992. 1. accident. [35] Sec. [19] First par. 102300. Civil Code. Remolete. San Diego. . [23] Olanolan v. October 01. March 23. L-40098. 1. 2005. Florendo. at 75. p. 8th ed. 8th Revised Edition. No. [39] See Motion for the Issuance of the Writ of Execution. 66 SCRA 452. 2936. 165491. 2907.R. 1410. L-30098. Commentaries and Jurisprudence on the Civil Code. 136 SCRA 208.. 1017 (1960).[9] Engr. [29] Republic v. 173. id. [27] Art." Petition. rollo. [33] 106 Phil. G. 24 Phil 446 (1913). 1970. No.. Remedial Law Compendium. Court of Appeals.. p. Vol. 96432. N. Inc. 1993. No. or (b) Newly discovered evidence . 134913. 31 SCRA 616. February 18. Kempis. Court of Appeals. 1991 ed." Petition. Aportadera. 454 SCRA 807. 1975. at 62 et seq. [28] Tolentino. Chua. G. Insular Government. 11. Annex "B. 1985. Vol. pp. Jan.. Municipality of Makati v. [32] Lim Tanhu v. Remedial Law Compendium. Israel Soguilon. October 21. 215 SCRA 17. [24] Section. citing Acot v. [11] Annex "C. 1990 ] . COMELEC.A judgment rendered against a party in default shall not exceed the amount or different in kind from that prayed for nor award unliquidated damages. [38] No. rollo. [10] Per Judge Vicente A. 875 (1958).G." Petition. March 31. 718. G. Annex "Q. pp. 1.xxx (a) Fraud. 1995. May 29. [31] Regalado. Hernando Gozon. No. 34 Phil. pp. COMELEC. 1990. 134 et seq.. id. 311 (1916). Vol. Hidalgo. Jr. Rule 142 of the Rules of Court. id.R. [36] Supra note 16.R. 19. 1968. [21] Lesaca v. 243 SCRA 108. April 30. Santos. 183 SCRA 1990. [25] [26] Supra note 14. 341.R." Petition. citing Pascua v.R. 1. 3 [20] Citibank. id.. 2001. [17] Rollo.A. of the Cuervo Appraisers. and Engr. 72-73. 349 SCRA 705." Petition. [30] (d) Extent of relief to be awarded. 89898-99." Petition. No. p. Grounds of and period for filing motion for new trial or reconsideration. mistake or excusable negligence which ordinary prudence could not have guarded against and by reason of which such aggrieved party has probably been impaired in his right." Petition. 55 O. L-20322. 190 SCRA 206 (1990) [ G. . citing Coombs v. [12] Annex "D. L38047. Renato Chico of the Land Bank.R. [16] Annex "H. [18] Roces v. March 17. citing Benito v. at 70. G. IV. p. 48 et seq. Nos. 220 SCRA 75. at 76. Mr. March 31. 60169." Petition. of Sec. No. id. at 71. 632. citing cases. at 72 et seq. [14] Annex "F. [34] 102 Phil. No. Case No. August 29. citing cases. [37] Commissioner of Public Highways v. [15] Annex "G. v. on the ground that the manner of payment of the expropriation amount should be done in installments which the respondent RTC judge failed to state in his decision. Respondent RTC judge issued an order requiring PSB to make available the documents pertaining to its transactions over the subject property. JR. Pastrana upon the manager of the PNB Buendia Branch. docketed as Civil Case No.00. The present petition for review is an off-shoot of expropriation proceedings initiated by petitioner Municipality of Makati against private respondent Admiral Finance Creditors Consortium. 1988 was served by respondent sheriff Silvino R. ADMIRAL FINANCE CREDITORS CONSORTIUM. PETITIONER. petitioner filed on July 20. Pending resolution of the above motions. After this decision became final and executory. S-5499.510.160. San Antonio Village. INC. respondent RTC judge rendered a decision on June 4. Private respondent filed its opposition to the motion. fixing the appraised value of the property at P5. 1987. 1987. involving a parcel of land and improvements thereon located at Mayapis St.00 which was earlier released to private respondent. 1986. AND SHERIFF SILVINO R. and ordering petitioner to pay this amount minus the advanced payment of P338. private respondent filed a motion dated January 27. BRANCH CXLII. S/A 265-537154-3) had been opened with the PNB Buendia Branch under petitioner's name containing the sum of P417. Inc. Inc.666. VS. Makati and registered in the name of Arceli P. AS JUDGE RTC OF MAKATI. Jo. PASTRANA. made pursuant to the provisions of Pres.. Petitioner filed a motion to lift the garnishment. As a result of this. and the . HON. After due hearing where the parties presented their respective appraisal reports regarding the value of the property. (PSB). THE HONORABLE COURT OF APPEALS. SALVADOR P.291... respondent sheriff was informed that a "hold code" was placed on the account of petitioner. private respondent moved for the issuance of a writ of execution. Jo under TCT No.00.MUNICIPALITY OF MAKATI. Decree No. It appears that the action for eminent domain was filed on May 20. 1988 praying that an order be issued directing the bank to deliver to respondent sheriff the amount equivalent to the unpaid balance due under the RTC decision dated June 4. After issuance of the writ of execution.. 13699. a Notice of Garnishment dated January 14. 42. 1988 a "Manifestation" informing the court that private respondent was no longer the true and lawful owner of the subject property because a new title over the property had been registered in the name of Philippine Savings Bank. DE GUZMAN. Attached to petitioner's complaint was a certification that a bank account (Account No. Home Building System & Realty Corporation and one Arceli P. However. This motion was granted by respondent RTC judge. RESPONDENTS. ] Respondent trial judge issued an order dated December 21. Respondent RTC judge likewise declared Mr. (2) ordered PNB Buendia Branch to immediately release to PSB the sum of P4. 1988 which: (1) approved the compromise agreement. which was duly opposed by private respondent. the general manager of the PNB Buendia Branch. (3) ordered PSB and private respondent to execute the necessary deed of conveyance over the subject property in favor of petitioner. 1988. Antonio Bautista.45 which corresponds to the balance of the appraised value of the subject property under the RTC decision dated June 4. from the garnished account of petitioner. 1988. S/A 265-537154-3 was an account specifically opened for the expropriation proceedings of the subject property pursuant to Pres. PSB and private respondent entered into a compromise agreement whereby they agreed to divide between themselves the compensation due from the expropriation proceedings.PNB Buendia Branch to reveal the amount in petitioner's account which was garnished by respondent sheriff. petitioner contended that its funds at the PNB Buendia Branch could neither be garnished nor levied upon execution. informed the court that he was still waiting for proper authorization from the PNB head office enabling him to make a disbursement for the amount so ordered. May 29. Decree No. and thus ordered his arrest and detention until his compliance with the said order. citing the case of Republic of the Philippines v. For its part. In compliance with this order. On the other hand. a Mr. Palacio did not apply to the case because petitioner's PNB Account No. garnishment was denied. Petitioner and the bank manager of PNB Buendia Branch then filed separate petitions for certiorari with the Court of Appeals. 23 SCRA 899. After several conferences. Respondent trial judge subsequently issued an order dated September 8. private respondent filed two succeeding motions to require the bank manager to show cause why he should not be held in contempt of court. During the hearings conducted for the above motions. 1988 denying petitioner's motion for reconsideration on the ground that the doctrine enunciated in Republic v. and.R. for failure of the manager of the PNB Buendia Branch to comply with the order dated September 8. L-20322.506.953. Antonio Bautista guilty of contempt of court for his inexcusable refusal to obey the order dated September 8. Petitioner filed a motion for reconsideration. In a decision Petitioner's motion to lift the . 1987. which were eventually consolidated.1968. for to do so would result in the disbursement of public funds without the proper appropriation required under the law. No. 1987. PSB filed a manifestation informing the court that it had consolidated its ownership over the property as mortgagee/purchaser at an extrajudicial foreclosure sale held on April 20. Palacio [G. 42. 11-12. * * * [Petition. Its motion for reconsideration having been denied by the Court of Appeals. and strengthening its reliance on the doctrine that public funds are exempted from garnishment or execution as enunciated in Republic v. with a balance of P170. 1988 and the writ of garnishment issued pursuant thereto. However. (2) Account No. the Court resolved to issue a temporary restraining order enjoining respondent RTC judge. to wit: * (1) * * Account No. sustained the jurisdiction of respondent RTC judge over the funds contained in petitioner's PNB Account No. S/A 263-530850-7 . the Court will give petitioner the benefit of the doubt. pp.94.506. from enforcing and/or carrying out the RTC order dated December 21. Admitting that its PNB Account No. 1989. S/A 265-537154-3 was specifically opened for expropriation proceedings it had initiated over the subject property. and proceed to resolve the principal issues presented based on the factual circumstances thus alleged by petitioner. it is petitioner's main contention that inasmuch as the assailed orders of respondent RTC judge involved the net amount of P4.098. 1989.72. petitioner poses no objection to the garnishment or the levy under execution of the funds deposited therein amounting to P99.promulgated on June 28. 1989.for statutory obligations and other purposes of the municipal government. respondent sheriff. with an outstanding balance of P99. and affirmed his authority to levy on such funds. the funds garnished by .] Because the petitioner has belatedly alleged only in this Court the existence of two bank accounts.94.exclusively for the expropriation of the subject property. 6-7. it may fairly be asked whether the second account was opened only for the purpose of undermining the legal basis of the assailed orders of respondent RTC judge and the decision of the Court of Appeals. pp. and their representatives.743. S/A 265-537154-3 .421. Petitioner not only reiterates the arguments adduced in its petition before the Court of Appeals. as of July 12.45.965. Private respondent then filed its comment to the petition. 265-537154-3. petitioner now files the present petition for review with prayer for preliminary injunction. On November 20. but also alleges for the first time that it has actually two accounts with the PNB Buendia Branch. the Court of Appeals dismissed both petitions for lack of merit. Rollo. Palacio [supra. while petitioner filed its reply.] At any rate.743. No. less the sum of P99. 247 (1960). Nevertheless. the properties of a municipality. 1987 is not disputed by petitioner. Yuviengco v. In this jurisdiction.] More particularly. L-30098. S/A 263-530850-7 are public funds of the municipal government. It cannot be over-emphasized that. Petitioner has benefited from its possession of the property since the same has been the site of Makati West High School since the school year 19861987. 1099 (1960). within . Municipality of San Miguel. are exempt from execution [See Viuda De Tan Toco v. The Commissioner of Public Highways v.] The foregoing rule finds application in the case at bar. 52 (1926). Absent a showing that the municipal council of Makati has passed an ordinance appropriating from its public funds an amount corresponding to the balance due under the RTC decision dated June 4.743. which are public funds earmarked for the municipal government's other statutory obligations are exempted from execution without the proper appropriation required under the law. and which are intended primarily and exclusively for the purpose of financing the governmental activities and functions of the municipality. This Court will not condone petitioner's blatant refusal to settle its legal obligation arising from expropriation proceedings it had in fact initiated. supra. unless otherwise provided for by statute [Republic v. and the corresponding disbursement of municipal funds therefor [See Viuda De Tan Toco v. 107 Phil. the claimant may avail of the remedy of mandamus in order to compel the enactment and approval of the necessary appropriation ordinance. this is not to say that private respondent and PSB are left with no legal recourse. Palacio. Manaois. well-settled is the rule that public funds are not subject to levy and execution. whether real or personal.94. The funds deposited in the second PNB Account No. 1987. 1984. The Municipal Council of Iloilo. 1970. without justifiable reason.. Gonzales. Municipal revenues derived from taxes. Bulacan v. Where a municipality fails or refuses. to effect payment of a final money judgment rendered against it. G. S/A 263-530850-7. licenses and market fees.respondent sheriff in excess of P99. No. The Municipal Council of Iloilo. no levy under execution may be validly effected on the public funds of petitioner deposited in Account No. the validity of the RTC decision dated June 4. Ilocos Norte v. Fernandez. February 18. 130 SCRA 56. supra.743. June 25. 108 Phil. No appeal was taken therefrom. The Municipality of Paoay. petitioner has enjoyed possession and use of the subject property notwithstanding its inexcusable failure to comply with its legal obligation to pay just compensation. 629 (1950). 31 SCRA 616. which are necessary for public use cannot be attached and sold at execution sale to satisfy a money judgment against the municipality. There is merit in this contention. 86 Phil. Baldivia v. G.R.] In the case at bar.94 deposited in Account No. 49 Phil. 61744. Lota.R. San Diego. S/A 265-537154-3. For three years now. for three (3) years. April 18. . August 15. considering that valuable property has been taken. 77765. v.R. WHEREFORE. 153 SCRA 291. See also Provincial Government of Sorsogon v. 1988. In the case at bar.R. Inc. which was rendered in Civil Case No. Petitioner is hereby required to submit to this Court a report of its compliance with the foregoing order without non-extendible period of SIXTY (60) DAYS from the date of receipt of this resolution. 1989 is MADE PERMANENT. No. SO ORDERED. is SET ASIDE and the temporary restraining order issued by the Court on November 20. Inc. de Villaroya.45.506. No. . 2012 ] . 64037. The order of respondent RTC judge dated December 21. University of the Philippines. G.953. 164 SCRA 393. August 27.R. the compensation to be paid fixed and the municipality is in full possession and utilizing the property for public purpose. 1988.the context of the State's inherent power of eminent domain. 1987. . compensation cannot be considered "just" for the property owner is made to suffer the consequence of being immediately deprived of his land while being made to wait for a decade or more before actually receiving the amount necessary to cope with his loss [Cosculluela v. 670 SCRA 206 (2012) [ G. 400. the Court Resolved to ORDER petitioner Municipality of Makati to immediately pay Philippine Savings Bank. No. Without prompt payment. the Court finds that the municipality has had more than reasonable time to pay full compensation. Lockheed Detective and Watchman Agency. 185918. [j]ust compensation means not only the correct determination of the amount to be paid to the owner of the land but also the payment of the land within a reasonable time from its taking.] The State's power of eminent domain should be exercised within the bounds of fair play and justice. 13699. 12. The Honorable Court of Appeals. G. Vda. and private respondent the amount of P4. 1998.057.. refund of deductions for the Mutual Benefits Aids System (MBAS).78 6. 13th month pay.R. the Labor Arbiter rendered a decision as follows: WHEREFORE. 2008 Resolution[2] of the Court of Appeals (CA) in CA-G. EDDIE OLIVAR____77. Inc. 2008 Amended Decision[1] and December 23.983. 2000.00 from November 1997).63 7. refund of cash bond (deducted at P50. 25% overtime pay.546. MATEO TANELA 70.471.595.73 14. PETITIONER. FERDINAND VELASQUEZ 78.62 2. refund of deduction for Mutual Benefits Aids System at the rate of P50.350. (Lockheed) entered into a contract for security services with respondent University of the Philippines (UP). service incentive leave pay. 13th month pay for 1998. and UP as job contractor and principal.70 3.00 per month from June 1996 and P200. which computation forms part of this Decision: 1. premises considered. respondents Lockheed Detective and Watchman Agency. holiday pay. unpaid wages from December 16-31.509. RESPONDENT. Before us is a petition for review on certiorari under Rule 45 of the 1997 Rules of Civil Procedure. JOB SABALAS 59.78 10.03 4. ANTHONY GONZALES76.73 P1. ANDRES DACANAYAN77. Inc. The antecedent facts of the case are as follows: Petitioner Lockheed Detective and Watchman Agency. and attorney’s fees.03 5.97 9. assailing the August 20.705.58 12.403. DINDO MURING80. VS. several security guards assigned to UP filed separate complaints against Lockheed and UP for payment of underpaid wages. 5 days service incentive leave pay.763. SP No.74 GRAND TOTAL AWARD . and attorney’s fees. On February 16. respectively.87 11.362. Underpaid wages/salaries.38 plus 10% attorney’s fees107. as amended.160.LOCKHEED DETECTIVE AND WATCHMAN AGENCY. INC.00 a month.262. holiday pay.077.53 8. UNIVERSITY OF THE PHILIPPINES.TIRSO DOMASIAN76. 91281.869.403. ALEXANDER ALLORDE80. in the total amount of P1.12 broken down as follows per attached computation of the Computation and [E]xamination Unit of this Commission. WILFREDO ESCOBAR80.184. PEDRO FAILORINA80.40 13. are hereby declared to be solidarily liable to complainants for the following claims of the latter which are found meritorious. JOSE SABALAS P77. In 1998. night shift differentials.590.00 per month from January to May 1996. premium pay for work on rest day and special holiday. SAMUEL ESCARIO 80. premium pay for rest days and special holidays. JUAN TAPEL80. P100.546. refund of cash bond. 763.794. SO ORDERED. Rogelio Banjao and Amor Banjao are hereby DISMISSED as amicably settled for and in consideration of the amounts of P12.819. the decision appealed from is hereby modified as follows: 1. The NLRC held: WHEREFORE. respectively. are hereby dismissed for lack of basis. Complainants’ claims for premium pay for work on rest day and special holiday. P12. however. On August 14.12 Third party respondent University of the Philippines is hereby declared to be liable to Third Party Complainant and cross claimant Lockheed Detective and Watchman Agency for the unpaid legislated salary increases of the latter’s security guards for the years 1996 to 1998.271. and 5 days service incentive leave pay.33. The respondent University of the Philippines is still solidarily liable with Lockheed in the payment of the rest of the claims covering the period of their service contract. SO ORDERED. in the total amount of P13. 2002. The Financial Analyst is hereby ordered to recompute the awards of the complainants in accordance with the foregoing modifications. 2002.140.184. As the parties did not appeal the NLRC decision. the NLRC denied said motions.P1. out of which amount the amounts due complainants here shall be paid.44).77 and P12.[3] Both Lockheed and UP appealed the Labor Arbiter’s decision. the same became final and executory on October .[5] The complaining security guards and UP filed their respective motions for reconsideration. The other claims are hereby DISMISSED for lack of merit (night shift differential and 13th month pay) or for having been paid in the course of this proceedings (salaries for December 15-31.72. By Decision[4] dated April 12. 1997 in the amount of P40.315.066. The claims of Erlindo Collado. 2. the NLRC modified the Labor Arbiter’s decision.14. The same was granted on May 23. through the assigned NLRC Sheriff Max L.522. [7] November 23. 2005 issued by the Labor Arbiter directing PNB UP Diliman Branch to release to the NLRC Cashier.142. In a letter[11] dated August 9. we grant this instant appeal. 2002. under the name of UP System Trust Receipts. Lockheed filed a motion for the issuance of an alias writ of execution. 2005.[6] A writ of execution was then issued but later quashed by the Labor Arbiter on Later. said order quashing the writ was reversed by the NLRC by Resolution 2004. the NLRC upheld its resolution but with modification that the satisfaction of the judgment award in favor of Lockheed will be only against the funds of UP which are not identified as public funds.26. the subject funds are covered by Savings Account No. Scholarship Fund. [12] UP contended that the funds being subjected to garnishment at PNB are government/public funds. the judgment award/amount of P12. 2003 on motion of UP due to disputes regarding the amount of the award. however. PNB likewise reminded UP that the bank only has 10 working days from receipt of the order to deliver the garnished funds and unless it receives a notice from UP or the NLRC before the expiry of the 10-day period regarding the issuance of a court order or writ of injunction discharging or enjoining the implementation and execution of the Notice of Garnishment and Writ of Execution.69. Research Grants. 2005. earmarked for Student Guaranty Deposit. UP argued that as public funds. PNB informed UP that it has received an order of release dated August 8. WHEREFORE. Student Fund. SO ORDERED. disposing as follows: dated June 8. 2005. The NLRC order and resolution having become final.142. 275-529999-8. and Miscellaneous Trust Account. On December 28.[9] On July 25. premises considered. UP filed an Urgent Motion to Quash Garnishment.[8] UP moved to reconsider the NLRC resolution. 2005. a Notice of Garnishment[10] was issued to Philippine National Bank (PNB) UP Diliman Branch for the satisfaction of the award of P12. 2004.522. As certified by the University Accountant. On August 16. the subject PNB account cannot be disbursed except pursuant to . The Order dated 23 November 2003 is hereby reversed and set aside.69 (inclusive of execution fee). the bank shall be constrained to cause the release of the garnished funds in favor of the NLRC. The Labor Arbiter is directed to issue a Writ of Execution for the satisfaction of the judgment award in favor of Third-Party complainants. Publications. Lago. UP filed a petition for certiorari before the CA based on the following grounds: I. customs. III. effected the execution that caused paralyzation and dislocation to petitioner’s governmental functions. Respondents NLRC and Arbiter LORA acted without jurisdiction or gravely abused their discretion in a manner amounting to lack or excess of jurisdiction when. and thereby allowed respondent Sheriff to withdraw the same from PNB.71 was withdrawn by the sheriff from UP’s PNB account. however. despite prior knowledge. 2008. It held that without departing from its findings that the funds covered in the savings account sought to be garnished . the amount of P12. respondent LORA gravely abused her discretion when she resolved petitioner’s Motion to Quash Notice of Garnishment addressed to. and intended for. Citing Republic v. more specifically taxes.[15] On March 12. 2005. and when she unilaterally and arbitrarily disregarded an official Certification that the funds garnished are public/government funds.[17] which defines public funds as moneys belonging to the State or to any political subdivisions of the State. the CA issued the assailed Amended Decision.398.[13] On September 2. the CA rendered a decision[16] dismissing UP’s petition for certiorari. II. Respondents gravely abused their discretion in a manner amounting to lack or excess of jurisdiction when they. 2005.062. dismissed the urgent motion for lack of merit on August 30. respondent NLRC gravely abused its discretion in a manner amounting to lack or excess of jurisdiction by misusing such concept to justify the garnishment by the executing Sheriff of public/government funds belonging to UP. COCOFED. 2005. the appellate court ruled that the funds sought to be garnished do not seem to fall within the stated definition. The Labor Arbiter. Similarly. duties and moneys raised by operation of law for the support of the government or the discharge of its obligations. by means of an Alias Writ of Execution against petitioner UP.an appropriation required by law.[14] On September 12. The concept of “solidary liability” by an indirect employer notwithstanding. On reconsideration. however. the NLRC. they authorized respondent Sheriff to garnish UP’s public funds. it cannot shield itself from its private contractual liabilities by simply invoking the public character of its funds. 3. FURTHERMORE. 2. AS THE EXECUTION PROCEEDINGS HAVE ALREADY BEEN TERMINATED. The CA cited Manila International Airport Authority v. Hence this petition by Lockheed raising the following arguments: 1. it reconsiders the dismissal of the petition in light of the ruling in the case of National Electrification Administration v.”[21] Therefore. a government instrumentality exercising corporate powers but not organized as a stock or non-stock corporation. Thus. RESPONDENT UP CAN BE HELD LIABLE AND EXECUTION CAN THUS ENSUE. It contends that UP is not similarly situated with NEA because the jurisdiction of COA over the accounts of UP is only on a post-audit basis. 2008. they are loosely called government corporate entities but not government-owned and controlled corporations in the strict sense. Lockheed moved to reconsider the amended decision but the same was denied in the assailed CA Resolution dated December 23. Lockheed also cites several cases wherein it was ruled that funds of public corporations which can sue and be sued were not exempt from garnishment. IT THEREFORE CANNOT AVAIL OF THE IMMUNITY FROM SUIT OF THE GOVERNMENT. IF THE COURT LENDS IT ASSENT TO THE INVOCATION OF THE DOCTRINE OF STATE IMMUNITY. Court of Appeals[19] which held that UP ranks with MIAA. UP has always granted full management and control of its affairs including its financial affairs. Morales[18] which mandates that all money claims against the government must first be filed with the Commission on Audit (COA). RESPONDENT UP IS A GOVERNMENT ENTITY WITH A SEPARATE AND DISTINCT PERSONALITY FROM THE NATIONAL GOVERNMENT AND HAS ITS OWN CHARTER GRANTING IT THE RIGHT TO SUE AND BE SUED. NOT HAVING IMMUNITY FROM SUIT. MOREOVER. Lockheed likewise argues that the rulings in the NEA and MIAA cases are inapplicable. THIS WILL RESULT [IN] GRAVE INJUSTICE. As to the MIAA case. Moreover. Executive Order No.[20] Lockheed contends that UP has its own separate and distinct juridical entity from the national government and has its own charter. While said corporations are government instrumentalities. it can be sued and be held liable. THE PROTESTATIONS OF THE RESPONDENT ARE TOO LATE IN THE DAY. the liability of MIAA pertains to the real estate . 714 entitled “Fiscal Control and Management of the Funds of UP” recognizes that “as an institution of higher learning.do not fall within the classification of public funds. it did not object to being sued before the labor department. which UP did not invoke in the first place. Lockheed. UP itself admitted its liability and thus it should not be allowed to renege on its contractual obligations. Lockheed also argues that the declaration in MIAA specifically citing UP was mere obiter dictum. On the fait accompli argument.123. to answer for the execution fee of P120. however. Lockheed contends that UP cannot anymore seek the quashal of the writ of execution and notice of garnishment as they are already fait accompli. The mere fact that the CA set aside the writ of garnishment confirms the liability of Lockheed to reimburse and indemnify in accordance with law. For its part. for instance.062. Lockheed contends that this might create a ruinous precedent that would likely affect the relationship between the public and private sectors. Lockheed cannot now claim that invocation of state immunity. which were earmarked for specific educational purposes. Lockheed moreover submits that UP cannot invoke state immunity to justify and perpetrate an injustice. being the party which procured the illegal garnishment. UP cites that damage was done to UP and the beneficiaries of the fund when said funds. The petition has no merit. UP argues that Lockheed cannot wash its hands from liability for the consummated garnishment and execution of UP’s trust fund in the amount of P12. Lastly. UP reiterates that it consented to be sued and even participated in the proceedings below.taxes imposed by the City of Paranaque while the obligation of UP in this case involves a private contractual obligation.98 unilaterally stipulated by the sheriff.398. that suability does not necessarily mean liability. It maintains. were misapplied. As to alleged injustice that may result for invocation of state immunity from suit. should be held primarily liable. can result in injustice. UP argues that the CA correctly applied the NEA ruling when it held that all money claims must be filed with the COA.71. UP contends that it did not invoke the doctrine of state immunity from suit in the proceedings a quo and in fact. . agencies and instrumentalities. WHEREFORE. However. UP consented to be sued when it participated in the proceedings below. Like NEA. 327. This Court finds that the CA correctly applied the NEA case. is ordered to REIMBURSE respondent University of the Philippines the amount of P12. What UP questions is the hasty garnishment of its funds in its PNB account.398. UP is a juridical personality separate and distinct from the government and has the capacity to sue and be sued. [25] We cannot subscribe to Lockheed’s argument that NEA is not similarly situated with UP because the COA’s jurisdiction over the latter is only on post-audit basis.062. A reading of the pertinent Commonwealth Act provision clearly shows that it does not make any distinction as to which of the government subdivisions. including government-owned or controlled corporations and their subsidiaries whose debts should be filed before the COA. 6758. and 12% interest on the entire . With respect to money claims arising from the implementation of Republic Act No. to be computed from September 12. agencies and instrumentalities. subject only to the remedy of appeal by petition for certiorari to this Court. Petitioner Lockheed Detective and Watchman Agency. before execution may be had. also like NEA. 2005 up to the finality of this Decision. Under Commonwealth Act No. Thus.[23] it is the COA which has primary jurisdiction to examine. As to the fait accompli argument of Lockheed. [24] their allowance or disallowance is for COA to decide. audit and settle “all debts and claims of any sort” due from or owing the Government or any of its subdivisions.D. it cannot evade execution. to be computed from the time of judicial demand to be reckoned from the time UP filed a petition for certiorari before the CA which occurred right after the withdrawal of the garnished funds from PNB. since the garnishment was erroneously carried out and did not go through the proper procedure (the filing of a claim with the COA). the petition for review on certiorari is DENIED for lack of merit. Inc.We agree with UP that there was no point for Lockheed in discussing the doctrine of state immunity from suit as this was never an issue in this case. contrary to its claim that there is nothing that can be done since the funds of UP had already been garnished.[22] as amended by Section 26 of P. Clearly. and its funds may be subject to garnishment or levy. 1445. No.71 plus interest of 6% per annum. including government-owned or controlled corporations and their subsidiaries. UP is entitled to reimbursement of the garnished funds plus interest of 6% per annum. a claim for payment of the judgment award must first be filed with the COA. Del Castillo (now a member of this Court) and Romeo F. No. No pronouncement as to costs. [2] Id. 2006. [11] Id.R. Nos. [14] Id. 481. citing NLRC records. and other self-governing boards. 147062-64. Romilla-Lontok with Associate Justices Mariano C. [23] ORDAINING AND INSTITUTING A GOVERNMENT AUDITING CODE OF THE PHILIPPINES. June 24. [3] CA rollo. and papers relating to those accounts. 2001. SO ORDERED. at 37. 618-619. [8] Id. December 14. [5] Id. at 66-73. including their subsidiaries. 154200. [16] Id. July 20. the preservation of vouchers pertaining thereto for a period of ten years. at 65. 528 SCRA 79. at 22-38. [17] G. [21] Id. pp.R. and as herein prescribed. at 39-56. p. including nongovernmental entities subsidized by the government. 372 SCRA 462. [15] Id. 47-50. p. audit. Section 26 thereof provides: ** Section 26. at 24-25. [4] Id. [19] G. 17. [12] Id. 868. and the audit and settlement of the accounts of all persons respecting funds or property received or held by them in an accountable capacity. at 10. [20] Rollo. pp. [7] Id. 2012. [22] AN ACT FIXING THE TIME WITHIN WHICH THE AUDITOR GENERAL SHALL RENDER HIS DECISIONS AND PRESCRIBING THE MANNER OF APPEAL THEREFROM. 23-24. [13] Id. the keeping of the general accounts of the Government. at 79-81. Designated additional member per Raffle dated April 16. [10] Id. Barza concurring. Penned by Associate Justice Arcangelita M. at 122-134. agencies and instrumentalities. 90-91. at 57-64. the examination and inspection of the books. at 55. commissions. 2012. [9] Id. at 44. [6] Id. those funded by donations through the . No. as well as the examination.R.amount from date of finality of this Decision until fully paid. and settlement of all debts and claims of any sort due from or owing to the Government or any of its subdivisions. – The authority and powers of the Commission shall extend to and comprehend all matters relating to auditing procedures. or agencies of the Government. systems and controls. [18] G. 2007. at 74. 155650. at 52-53. 495 SCRA 591. General jurisdiction. records. * Designated additional member per Raffle dated April 2. [1] Rollo. The said jurisdiction extends to all governmentowned or controlled corporations. vs.government. Court of Appeals. and those for which the government has put up a counterpart fund or those partly funded by the government. Villoso for petitioner. Cosculluela v. THE HONORABLE COURT OF APPEALS and the REPUBLIC OF THE PHILIPPINES. L-77765 (1988). the Republic of the Philippines filed a complaint with the Court of First Instance of Iloilo to expropriate two parcels of land in the municipality of Barotac. Pio G. 164 SCRA 393.82 which she had already withdrawn plus P3. sought the enforcement of a writ of execution against government funds. 164 SCRA 393 (1988). the trial court rendered a decision granting the expropriation and ordered the public respondent to pay the following amounts: 1. No. August 15. represented by NATIONAL IRRIGATION ADMINISTRATION. National Electrification Administration v. 1976. Court of Appeals. 400. Morales. Iloilo owned by petitioner Sebastian Cosculluela and one Mita Lumampao. To Mita Lumampao. The Hon.001. and . respondents. at 89-91. those required to pay levies or government share. for the construction of the canal network of the Barotac Irrigation Project.000 attorney's fees. 1976.000 minus P4. state that government funds cannot be disbursed without proper appropriation and that a writ of execution cannot legally issue against the State. 1988 SEBASTIAN COSCULLUELA. supra note 18. Cosculluela v. The petitioner contends that to set aside the writ of execution would be an abridgment of his right to just compensation and due process of law. This is a petition for review on certiorari which seeks to set aside the decision of the Court of Appeals nullifying the orders of the trial court on the ground that said orders in effect. [24] [25] Compensation and Position Classification Act of 1989. On April 4. the sum of P20. On March 8. petitioner. 13. The public respondents on the other hand. 00 respectively. destruction of the sugarcane therein and the reduce in the yield of his sugarcane farm due to water lagging and seepage.2. The respondent filed a petition with the Court of Appeals to annul the orders of May 7 and October 6.000. cannot be disbursed without a government appropriation. on motion of the petitioner. Sebastian Cosculluela. 36. Rollo) On appeal.000. 1986.00 and P2. who is already more .00 and P5. On the other hand. the Court of Appeals modified the trial court's decision in that the attorney's fees and litigation expenses were reduced from P10.000 and litigation expenses of P5. On November 25. contending that the funds of the National Irrigation Authority (NIA) are government funds and therefore. 1986. the respondent Republic filed a motion to set aside the order of May 7. plus attorney's fees of P10. 1986 as well as the writ of execution issued pursuant thereto. In this instant petition. the NIA took possession of the expropriated property in 1975 and for around ten (10) years already.00 to P5. On October 6. the trial court ordered the issuance of a writ of execution to implement the judgment of the appellate court. 1986. He maintains that these constitutional guarantees transcend all administrative and procedural laws and jurisprudence for as between these said laws and the constitutional rights of private citizens. 1986. On August 11. The decision became final and executory on September 21. the amount adjudged in favor of the latter.000.00 which is the reasonable estimate of his actual and consequential loss by reason of the taking of his 3 hectares of land.00. the petitioner. 1986. the petitioner assails the decision of the appellate court as being violative of his right to just compensation and due process of law.000.000. the appellate court rendered the questioned decision setting aside the aforementioned orders of the trial court on the ground that public or government funds are not subject to levy and execution. As admitted by the respondent Republic. On May 7. the lower court issued an order modifying its order of May 7. it has been servicing the farmers on both sides of the Barotac Viejo Irrigation Project in Iloilo Province and has been collecting fees therefor by way of taxes at the expense of the petitioner. the sum of P200.500. 1986. directing instead that the respondenit Republic deposit with the Philippine National Bank (PNB) in the name of the petitioner. 1985. the latter must prevail. (p. M. and in expropriation cases. the provisions now generally found in the modern laws of constitutions of civilized countries to the effect that private property shall not be taken for public use without just compensation have their origin in the recognition of a necessity for restraining the sovereign and protecting the individual. is undergoing frequent hospitalization.. would undoubtedly be held to be a taking without due process of law and a denial of the equal protection of the laws. he did emphasize: "Nevertheless it should be noted that the whole problem of expropriation is resolvable in its ultimate analysis into a constitutional question of due process of law.. 559) Moreover. CFI Judge of Pangasinan. otherwise known as the Jones Law. Land Tenure Administration . argues that while it has no intention of keeping the land and dishonoring the judgment. Tuason and Co. v. 120-121). . the manner by which the same will have to be satisfied must not be inconsistent with prevailing jurisprudence..than eighty (80) years old and sickly. that public funds such as those of the respondent NIA cannot be disbursed without the proper appropriation. in accordance with a constitutional mandate. and is made to suffer further by the unconscionable delay in the payment of just compensation based on a final and executory judgment. on the other hand. Camus (4C) Phil. in the case of Province of Pangasinan v. (31 SCRA 413) Conformably to such a fundamental principle then. Even were there no organic or constitutional provision in force requiring compensation to be paid. If it were otherwise. 558) Nonetheless. ( Ibid. the . the seizure of one's property without payment. 550 [1919]) decided prior to the Commonwealth. even though intended for a public use. It was characterized as "inseparable from sovereignty being essential to the existence of the State and inherent in government even in its most primitive forms. Thus." (Ibid. the matter being governed by the Philippine Autonomy Act of 1916. v. Inc. We rule for the petitioner. Branch VIII (80 SCRA 117. One of the basic principles enshrined in our Constitution is that no person shall be deprived of his private property without due process of law. this Court has never hesitated to assure that there be just compensation. this Court speaking through then Chief Justice Fernando ruled: There is full and ample recognition of the power of eminent domain by Justice Street in a leading case of Visayan Refining Co. and that is. The respondent Republic. he was careful to point out: "In other words. That aspect of the matter was stressed in the recent case of J. an essential element of due process is that there must be just compensation whenever private property is taken for public use. Province of Tayabas v. The following year. 467 [1938] and other related cases).30 with the Philippine National Bank and within the same year. the Barotac Viejo Project was a package project of government. to pay for the property to be seized from the owner. Camus & Paredes. the project has been of service to the farmers nearby in the province of Iloilo. agency. respondent NIA made the required deposit of P2.element of arbitrariness certainly would enter. Not only was the government able to make an initial deposit of P2. San Diego. no government instrumentality. the legislature must first appropriate the additional amount to pay the award. We agree with the petitioner that before the respondent NIA undertook the construction of the Barotac Viejo Irrigation Project. has no choice but to yield to such a taking. 66 Phil. or subdivision has any business initiating expropriation proceedings unless it has adequate funds. It is bad enough that an owner of a property. he is denied all these years the payment to which he is entitled. (See Commissioner of Public Highways v. Perez. 31 SCRA 616 and Visayan Refining Co. This is one of the instances where law and morals speak to the same effect. Since then. v. The NIA officials responsible for the project have to do plenty of explaining as to where they misdirected the funds intended for the expropriated property. salaries of personnel. It does not have to await an express act of Congress to locate funds for this specific purpose. and other expenses incidental to the project. supported by proper appropriation acts. The rule in earlier precedents that the functions and public services rendered by the state cannot be allowed to be paralyzed or disrupted by the . Money was allocated for an entire project. the basic responsibility of paying the owners for property seized from them should have been met. (Cf. It is. It is infinitely worse if thereafter. Needless to state. in the event of the exercise of this sovereign prerogative.097. The present case must be distinguished from earlier cases where payment for property expropriated by the National Government may not be realized upon execution. The property of the petitioner was taken by the government in 1975. Another distinction lies in the fact that the NIA collects fees for the use of the irrigation system constructed on the petitioner's land. inconceivable how this project could have been started without the necessary appropriation for just compensation. As a rule. with the corresponding funds appropriated for the payment of expropriated land and to pay for equipment. the same was duly authorized.097. thus. Before bulldozers and ditch diggers tore up the place and before millions of pesos were put into the development of the project. In the present case.30 but the project was finished in only a year's time. for more than a period of ten (10) years. 550). 40 Phil. the Barotac Viejo Irrigation Project was finished. The imposition of unreasonable requirements and vexatious delays before effecting payment is not only galling and arbitrary but a rich source of discontent with government. . San Diego. (Constitution. In the Commissioner of Public Highways case. it would be the height of abuse and ignominy for the agencies to start earning from those properties while ignoring final judgments ordering the payment of just compensation to the former owners. Just compensation means not only the correct determination of the amount to be paid to the owner of the land but also the payment of the land within a reasonable time from its taking. bridge. supra. Rosa E. Thus. we ruled: The petitioners have been waiting for more than thirty years to be paid for their land which was taken for use as a public high school. There should be some kind of swift and effective recourse against unfeeling and uncaring acts of middle or lower level bureaucrats. When the National Housing Authority expropriates raw land to convert into housing projects for rent or sale to private persons or the NIA expropriates land to construct irrigation systems and sells water rights to farmers. Without prompt payment. compensation cannot be considered "just" for the property owner is made to suffer the consequence of being immediately deprived of his land while being made to wait for a decade or more before actually receiving the amount necessary to cope with his loss. Article III. As a matter of fair procedure. at p. This case illustrates the expanded meaning of "public use" in the eminent domain clause.) The petitioner's land was not taken for the construction of a road. in the case of Provincial Government of Sorsogon v. Vda. the Court stressed that it is incumbent upon the legislature to appropriate the necessary amount because it cannot keep the land and dishonor the judgment. de Villaroyo (153 SCRA 291). 625) is not applicable here. school.diversion of public funds from their legitimate and specific objects (Commissioner of Public Highways v. There is no showing of any public service to be disrupted if the fees collected from the farmers of Iloilo for the use of irrigation water from the disrupted property were utilized to pay for that property. it is the duty of the Government whenever it takes property from private persons against their will to supply all required documentation and facilitate payment of just compensation . public buildings. Section 9. or other traditional objects of expropriation. We must emphasize that nowhere in any expropriation case has there been a deviation from the rule that the Government must pay for expropriated property. immediate return to the owners of the unpaid property is the obvious remedy. The project is benefitting the farmers specifically and the community in general.. Holy See v. Rosario. allow the judgment of the court to become final and executory and then refuse to pay on the ground that there are no appropriations for the property earlier taken and profitably used. 1987 respectively are ANNULLED and SET ASIDE. 14. be considered. public interest. WHEREFORE.00 as just compensation deducting therefrom the partial payment already deposited by the respondent at the institution of the action below with legal interest from September 21. ROSARIO. ln cases where land is taken for public use.R..00 litigation expenses. BRANCH 61 AND STARBRIGHT SALES ENTERPRISES.. We condemn in the strongest possible terms the cavalier attitude of government officials who adopt such a despotic and irresponsible stance. Obviously. the petition is hereby GRANTED. JR. . (Emphasis supplied) In the present case. The decision and order of the respondent appellate court dated November 25. the petitioner's land cannot be returned to him. Sorsogon have been using the disputed land as their high school athletic grounds for thirty years.Under ordinary circumstances. The children of Gubat. 1985. AS PRESIDING JUDGE OF THE REGIONAL TRIAL COURT OF MAKATI. SO ORDERED.000. However. however. 1987 and February 16. Jr. RESPONDENTS. PETITIONER. the irrigation project was completed and has been in operation since 1976. 238 SCRA 524 (1994) EN BANC [ G. must. December 01.000. VS.500. plus P5. THE HON. The Regional Trial Court of Iloilo City is ordered to immediately execute the final judgment in Civil Case No. 1994 ] THE HOLY SEE. ERIBERTO U. 101949. It is arbitrary and capricious for a government agency to initiate expropriation proceedings. No. 10530 and effect payment of P200.00 attorney's fees and P2. it is high time that the petitioner be paid what was due him eleven years ago. seize a person's property. INC. Inc. 1991 Order. 90-183).. Makati. 1990. and three other defendants: namely. Metro Manila for annulment of the sale of the three parcels of land. 1991 and September 19. acting as agent of the sellers. 271108 and 265388 respectively and registered in the name of the Philippine Realty Corporation (PRC). the PRC and Tropicana (Civil Case No. Domingo A. 1991 of the Regional Trial Court. Said Lot 5-A is contiguous to Lots 5-B and 5-D which are covered by Transfer Certificates of Title Nos. private respondent filed a complaint with the Regional Trial Court. Transfer Certificate of Title No. Branch 61. 1991 denied the motion of petitioner to dismiss the complaint in Civil Case No. Private respondent.This is a petition for certiorari under Rule 65 of the Revised Rules of Court to reverse and set aside the Orders dated June 20. Petitioner is the Holy See who exercises sovereignty over the Vatican City in Rome. Cirilos.. . The three lots were sold to Ramon Licup. Cirilos. Branch 61. 90-183. This petition arose from a controversy over a parcel of land consisting of 6. Italy. 1991 denied the motion for reconsideration of the June 20. represented by the Papal Nuncio. Metro Manila in Civil Case No. a dispute arose as to who of the parties has the responsibility of evicting and clearing the land of squatters. The Order dated June 20. Licup assigned his rights to the sale to private respondent. Starbright Sales Enterprises. Jr. Jr. In view of the refusal of the squatters to vacate the lots sold to private respondent. Metro Manila and registered in the name of petitioner. Makati. is a domestic corporation engaged in the real estate business. Complicating the relations of the parties was the sale by petitioner of Lot 5-A to Tropicana Properties and Development Corporation (Tropicana).. and is represented in the Philippines by the Papal Nuncio. Later. Domingo A. I On January 23. through Msgr. 390440) located in the Municipality of Paranaque. while the Order dated September 19. 90-183. Msgr.000 square meters (Lot 5-A. and specific performance and damages against petitioner. 000. petitioner and Msgr.240.000.The complaint alleged that: (1) on April 17. An opposition to the motion was filed by private respondent. On June 8. (3) specific performance of the agreement to sell between it and the owners of the lots. On June 20. (10) private respondent demanded the rescission of the sale to Tropicana and the reconveyance of the lots. Cirilos returned the earnest money of P100. 1991. Licup assigned his rights over the property to private respondent and informed the sellers of the said assignment. 1989. Msgr. (7) Msgr. and that the sellers clear the said lots of squatters who were then occupying the same. (5) thereafter. proposing instead either that private respondent undertake the eviction or that the earnest money be returned to the latter. transferred and registered in the name of Tropicana. Cirilos separately moved to dismiss the complaint petitioner for lack of jurisdiction based on sovereign immunity from suit.. . (8) private respondent sent the earnest money back to the sellers. but in view of the sellers' breach. 1988. and another over Lots 5-B and 5-D.00 per square meter. and (4) damages. (2) the reconveyance of the lots in question. among others. Cirilos that the sellers fulfill their undertaking and clear the property of squatters. Msgr. and Tropicana on the other.00 to P1. it lost profits of not less than P30. the trial court issued an order denying. to no avail.00 be paid by Licup to the sellers. agreed to sell to Ramon Licup Lots 5-A. Cirilos.00. however. (6) private respondent counterproposed that if it would undertake the eviction of the squatters.000. petitioner's motion to dismiss after finding that petitioner "shed off [its] sovereign immunity by entering into the business contract in question" (Rollo. but later discovered that on March 30.00 per square meter. (3) Licup paid the earnest money to Msgr. 20-21). and that the sellers' transfer certificate of title over the lots were cancelled. the purchase price of the lots should be reduced from P1. Cirilos.000. pp.150. private respondent demanded from Msgr. Jr.240. without notice to private respondent. Cirilos for being an improper party. on behalf of petitioner and the PRC. (9) Tropicana induced petitioner and the PRC to sell the lots to it and thus enriched itself at the expense of private respondent. and (11) private respondent is willing and able to comply with the terms of the contract to sell and has actually made plans to develop the lots into a townhouse project. Private respondent thus prayed for: (1) the annulment of the Deeds of Sale between petitioner and the PRC on the one hand. 1990. and Msgr. one over Lot 5-A. 5-B and 5-D at the price of P1. sold the lots to Tropicana.00 and wrote private respondent giving it seven days from receipt of the letter to pay the original purchase price in cash. Cirilos informed private respondent of the squatters' refusal to vacate the lots. petitioner and the PRC. (2) the agreement to sell was made on the condition that earnest money of P100. as evidenced by two separate Deeds of Sale. (4) in the same month. But the general rule admits of exceptions. p.On July 12. 1991. and that it "adopts by reference. a Motion for Intervention was filed before us by the Department of Foreign Affairs. Private respondent opposed the intervention of the Department of Foreign Affairs. The general rule is that an order denying a motion to dismiss is not reviewable by the appellate courts. On October 1. In such a case. the remedy of the movant being to file his answer and to proceed with the hearing before the trial court. the allegations contained in the petition of the Holy See insofar as they refer to arguments relative to its claim of sovereign immunity from suit" (Rollo. 206 SCRA 582 [1992]. On December 9. 87). II A preliminary matter to be threshed out is the procedural issue of whether the petition for certiorari under Rule 65 of the Revised Rules of Court can be availed of to question the order denying petitioner's motion to dismiss. On August 30." So as to facilitate the determination of its defense of sovereign immunity. 216 SCRA 114 [1992]). claiming that it has a legal interest in the outcome of the case as regards the diplomatic immunity of petitioner. the trial court issued an order deferring the resolution on the motion for reconsideration until after trial on the merits and directing petitioner to file its answer (Rollo. 1991. In compliance with the resolution of this Court. 1991. Petitioner forthwith elevated the matter to us. petitioner invokes the privilege of sovereign immunity only on its own behalf and on behalf of its official representative. the Papal Nuncio. . In its petition. it would be a sheer waste of time and energy to require the parties to undergo the rigors of a trial. Florendo. 1991. Zagada v. 22). both parties and the Department of Foreign Affairs submitted their respective memoranda. petitioner prayed that a hearing be conducted to allow it to establish certain facts upon which the said defense is based. p. Civil Service Commission. and one of these is when it is very clear in the records that the trial court has no alternative but to dismiss the complaint (Philippine National Bank v. petitioner filed a "Motion for a Hearing for the Sole Purpose of Establishing Factual Allegation for Claim of Immunity as a Jurisdictional Defense. Private respondent opposed this motion as well as the motion for reconsideration. petitioner moved for reconsideration of the order. Bradford. 48 SCRA 242 (1972). 50 Yale Law Journal 1088 [1941]). 80 Phil. 50 [1945]. Calleja. In Baer v. Tizon. informing the latter that the respondent-employer could not be sued because it enjoyed diplomatic immunity. Aquino. The Solicitor General embodied the "suggestion" in a Manifestation and Memorandum as amicus curiae. Zambales. United States of America v. Embassy asked the Secretary of Foreign Affairs to request the Solicitor General to make. asks the Attorney General to submit to the court a "suggestion" that the defendant is entitled to immunity. the procedure followed is the process of "suggestion. in turn. In the case at bench. In the United States. only the Foreign Office issues a certification to that effect instead of submitting a "suggestion" (O'Connell. the Secretary of Foreign Affairs sent the trial court a telegram to that effect. In cases where the foreign states bypass . the practice is for the foreign government or the international organization to first secure an executive endorsement of its claim of sovereign or diplomatic immunity. a "suggestion" to respondent Judge. the Department of Foreign Affairs. 190 SCRA 130 (1990). In England. 182 SCRA 644 [1990] and companion cases). Miquiabas v. 262 [1948]. a similar procedure is followed. it requests the Foreign Office of the state where it is sued to convey to the court that said defendant is entitled to immunity.The other procedural question raised by private respondent is the personality or legal interest of the Department of Foreign Affairs to intervene in the case in behalf of the Holy See (Rollo. In the Philippines. In International Catholic Migration Commission v. I International Law 130 [1965]. the defense of sovereign immunity was submitted directly to the local courts by the respondents through their private counsels (Raquiza v. 75 Phil.S. In some cases. 186-190). the Secretary of Foreign Affairs just sent a letter directly to the Secretary of Labor and Employment." where the foreign state or the international organization sued in an American court requests the Secretary of State to make a determination as to whether it is entitled to immunity. when a state or international agency wishes to plead sovereign or diplomatic immunity in a foreign court. If the Secretary of State finds that the defendant is immune from suit. in behalf of the Commander of the United States Naval Base at Olongapo City. In World Health Organization v. In Public International Law. the U. through the Office of Legal Affairs moved with this Court to be allowed to intervene on the side of petitioner. But how the Philippine Foreign Office conveys its endorsement to the courts varies. Philippine-Ryukyus Command. 57 SCRA 1 (1974). pp. Note: Immunity from Suit of Foreign Sovereign Instrumentalities and Obligations. he. The Court allowed the said Department to file its memorandum in support of petitioner's claim of sovereign immunity. Guinto. It also recognized the right of the Holy See to receive foreign diplomats. where Italy recognized the exclusive dominion and sovereign jurisdiction of the Holy See over the Vatican City. Some writers even suggested that the treaty created two international persons . it entered into a commercial transaction for the sale of a parcel of land located in the Philippines. III The burden of the petition is that respondent trial court has no jurisdiction over petitioner. With the loss of the Papal States and the limitation of the territory under the Holy See to an area of 108.the Holy See and Vatican City (Salonga and Yap. Before the annexation of the Papal States by Italy in 1870. The Lateran Treaty established the statehood of the Vatican City "for the purpose of assuring to the Holy See absolute and visible independence and of guaranteeing to it indisputable sovereignty also in the field of international relations" (O'Connell. the Pope was the monarch and he. Public and Private 81 [1948]). Italy and the Holy See entered into the Lateran Treaty. as the Holy See. A. In 1929. Public International Law 36-37 [1992]). of its own free will.the Foreign Office.7 acres. being a foreign state enjoying sovereign immunity. the courts can inquire into the facts and make their own determination as to the nature of the acts and transactions involved. was considered a subject of International Law. I International Law 311 [1965]). Questions and Problems In International Law. to send its own diplomats to foreign countries. supra. . the position of the Holy See in International Law became controversial (Salonga and Yap. it is difficult to determine whether the statehood is vested in the Holy See or in the Vatican City.. and to enter into treaties according to International Law. private respondent insists that the doctrine of non-suability is not anymore absolute and that petitioner has divested itself of such a cloak when. The Holy See Before we determine the issue of petitioner's non-suability. On the other hand. 37). In view of the wordings of the Lateran Treaty. (Garcia. a brief look into its status as a sovereign state is in order. such principles of International Law are deemed incorporated as part of the law of the land as a condition and consequence of our admission in the society of nations (United States of America v. One authority wrote that the recognition of the Vatican City as a state has significant implication . and the attribution to it of "sovereignty" must be made in a sense different from that in which it is applied to other states (Fenwick. Guinto. 125.The Vatican City fits into none of the established categories of states. a sovereign cannot. the Papal Nuncio. the world-wide interests and activities of the Vatican City are such as to make it in a sense an "international state" (Fenwick. This appears to be the universal practice in international relations. Even without this affirmation. According to the newer or restrictive theory. Inasmuch as the Pope prefers to conduct foreign relations and enter into transactions as the Holy See and not in the name of the Vatican City. the Vatican City represents an entity organized not for political but for ecclesiastical purposes and international objects. B. p. but not with regard to private acts or acts jure gestionis (United States of . in conformity with its traditions. The Holy See. with the Pope. one can conclude that in the Pope's own view. we have adopted the generally accepted principles of International Law. be made a respondent in the courts of another sovereign. International Law 37 [1991]). has had diplomatic representations with the Philippine government since 1957 (Rollo. Indeed. the Vatican City has an independent government of its own. Kelsen. 46 The American Journal of International Law 308 [1952]). through its Ambassador. Sovereign Immunity As expressed in Section 2 of Article II of the 1987 Constitution. supra. the immunity of the sovereign is recognized only with regard to public acts or acts jure imperii of a state.. without its consent. In a community of national states. According to the classical or absolute theory. The Republic of the Philippines has accorded the Holy See the status of a foreign sovereign. Principles of International Law 160 [1956]). each widely held and firmly established. 87). The Status of the Holy See in International Law. it is the Holy See that is the international person. as the Holy See or Head of State. There are two conflicting concepts of sovereign immunity. International Law 124-125 [1948]. who is also head of the Roman Catholic Church. 182 SCRA 644 [1990]). Despite its size and object. Cruz. and the demands of its mission in the world.that it is possible for any entity pursuing objects essentially different from those pursued by states to be invested with international personality (Kunz. act or conduct or any regular course of conduct that by reason of its nature. The United States passed the Foreign Sovereign Immunities Act of 1976. 182 SCRA 644 [1990]). consisting of three restaurants. is of a "commercial character. Veridiano. has created problems of its own. Ruiz. The restrictive theory came about because of the entry of sovereign states into purely commercial activities remotely connected with the discharge of governmental functions.). Guinto. The Act defines a "commercial activity" as any particular transaction. a cafeteria. supra. Lopez. 312 [1949])." Furthermore. which is intended to be a solution to the host of problems involving the issue of sovereign immunity. which defines a commercial activity as "either a regular course of commercial conduct or a particular commercial transaction or act. 182 SCRA 644 [1990]). This Court has considered the following transactions by a foreign state with private parties as acts jure imperii: (1) the lease by a foreign government of apartment buildings for use of its military officers (Syquia v. Legal treatises and the decisions in countries which follow the restrictive theory have difficulty in characterizing whether a contract of a sovereign state with a private party is an act jure gestionis or an act jure imperii. Public International Law 194 [1984]). and (3) the change of employment status of base employees (Sanders v. the law declared that the "commercial character of the activity shall be determined by reference to the nature of the course of conduct or particular transaction or act. rather than by reference to its purpose. this Court has considered the following transactions by a foreign state with private parties as acts jure gestionis: (1) the hiring of a cook in the recreation center. Some states passed legislation to serve as guidelines for the executive or judicial determination when an act may be considered as jure gestionis. This is particularly true with respect to the Communist states which took control of nationalized business activities and international trading. and (2) the bidding for the operation of barber shops in Clark Air Base in Angeles City (United States of America v. a store." The restrictive theory. On the other hand." The Canadian Parliament enacted in 1982 an Act to Provide For State Immunity In Canadian Courts. Coquia and Defensor-Santiago. and a coffee and pastry shop at the John Hay Air Station in Baguio City.America v. (2) the conduct of public bidding for the repair of a wharf at a United States Naval Station (United States of America v. Ruiz. to cater to American servicemen and the general public (United States of America v. 84 Phil. Rodrigo. 162 SCRA 88 [1988]). a bakery. The operation of the restaurants and other facilities open to the general . 136 SCRA 487 [1987]. Such an act can only be the start of the inquiry. necessary for the creation and maintenance of its diplomatic mission.public is undoubtedly for profit as a commercial and not a governmental activity. Guinto. the mere entering into a contract by a foreign state with a private party cannot be the ultimate test. the particular act or transaction must then be tested by its nature." In the case at bench. or an incident thereof. like any other state. if petitioner has bought and sold lands in the ordinary course of a real estate business. especially when it is not undertaken for gain or profit. This treaty was concurred in by the Philippine Senate and entered into force in the Philippines on November 15. (supra): "There is no question that the United States of America. 1965. we have to come out with our own guidelines. will be deemed to have impliedly waived its non-suability if it has entered into a contract in its proprietary or private capacity. It is only when the contract involves its sovereign or governmental capacity that no such waiver may be implied. If the act is in pursuit of a sovereign activity. In the absence of legislation defining what activities and transactions shall be considered "commercial" and as constituting acts jure gestionis. is recognized in the 1961 Vienna Convention on Diplomatic Relations (Arts. surely the said transaction can be categorized as an act jure gestionis. The right of a foreign sovereign to acquire property. Lot 5-A was acquired by petitioner as a donation from the Archdiocese of Manila. In Article 31(a) of the Convention. The logical question is whether the foreign state is engaged in the activity in the regular course of business. then it is an act jure imperii. in a receiving state. tentative they may be. If the foreign state is not engaged regularly in a business or trade. real or personal. The donation was made not for commercial purpose. As held in United States of America v. Certainly. 20-22). Private respondent failed to dispute said claim. the United States government impliedly divested itself of its sovereign immunity from suit. a diplomatic envoy is granted immunity from the civil and administrative jurisdiction of the receiving state over any real action relating to private . By entering into the employment contract with the cook in the discharge of its proprietary function. 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. However. but for the use of petitioner to construct thereon the official place of residence of the Papal Nuncio. The determination of the executive arm of government that a state or instrumentality is entitled to sovereign or diplomatic immunity is a political question that is conclusive upon the courts (International Catholic Migration Commission v. pp. 156-157). Aquino. has been admitted by private respondent in its complaint (Rollo. which in this case is the Holy See. In view of said certification. Judge Tirso Velasco. particularly the admission of private respondent. Ordinarily. 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. Title I.R. The decision to transfer the property and the subsequent disposal thereof are likewise clothed with a governmental character. it is the duty of the courts to accept this claim so as not to embarrass the executive arm of the government in conducting the country's foreign relations (World Health Organization v. Petitioner did not sell Lot 5-A for profit or gain. 26. such procedure would however be pointless and unduly circuitous (Ortigas & Co. we abide by the certification of the Department of Foreign Affairs. 109645.immovable property situated in the territory of the receiving state which the envoy holds on behalf of the sending state for the purposes of the mission. 1994). Partnership v. The issue of petitioner's non-suability can be determined by the trial court without going to trial in the light of the pleadings. Sec. IV . pp. the procedure would be to remand the case and order the trial court to conduct a hearing to establish the facts alleged by petitioner in its motion. with all the more reason should immunity be recognized as regards the sovereign itself. If this immunity is provided for a diplomatic envoy. Calleja. 48 SCRA 242 [1972]). Book IV. As the department tasked with the conduct of the Philippines' foreign relations (Administrative Code of 1987. Where the plea of immunity is recognized and affirmed by the executive branch. As in International Catholic Migration Commission and in World Health Organization. and that they stubbornly refuse to leave the premises. Ltd. the privilege of sovereign immunity in this case was sufficiently established by the Memorandum and Certification of the Department of Foreign Affairs. The fact that squatters have occupied and are still occupying the lot. G. 190 SCRA 130 [1990]). privileges and immunities of a diplomatic mission or embassy in this country (Rollo. Besides. 3). 27). No. the Department of Foreign Affairs has formally intervened in this case and officially certified that the Embassy of the Holy See is a duly accredited diplomatic mission to the Republic of the Philippines exempt from local jurisdiction and entitled to all the rights. July 25. COURT OF APPEALS AND ARTHUR SCALZO. Court of Appeals. SO ORDERED. 90-183 against petitioner is DISMISSED. HON.its right to ensure. Once the Philippine government decides to espouse the claim. Remedies of Private Claimants Against Foreign States. Private respondent can ask the Philippine government. a State is in reality asserting its own rights . 302 [1924]). 2003 ] KHOSROW MINUCHER. a person who feels aggrieved by the acts of a foreign sovereign can ask his own government to espouse his cause through diplomatic channels. World Court Reports 293. Its first task is to persuade the Philippine government to take up with the Holy See the validity of its claims. 1 Hudson. Of course. the latter ceases to be a private cause. . the forerunner of the International Court of Justice: "By taking up the case of one of its subjects and by resorting to diplomatic action or international judicial proceedings on his behalf.R. to espouse its claims against the Holy See. Under both Public International Law and Transnational Law. the petition for certiorari is GRANTED and the complaint in Civil Case No.Private respondent is not left without any legal remedy for the redress of its grievances. 15. Minucher v. 142396. No. 397 SCRA 244 (2003) [ G. According to the Permanent Court of International Justice. RESPONDENTS. through the Foreign Office. 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. WHEREFORE. VS. 919 [1964]). in the person of its subjects. respect for the rules of international law" (The Mavrommatis Palestine Concessions. Selected Readings on Protection by Law of Private Foreign Investments 905. February 11. PETITIONER. of Manila for damages on account of what he claimed to have been trumped-up charges of drug trafficking made by Arthur Scalzo. As a matter of fact. Branch 151. pistachio nuts and other Iranian products was his business after the Khomeini government cut his pension of over $3. the defendant expressed his interest in buying caviar. as a special agent of the Drug Enforcement Administration. become one of the principal witnesses for the prosecution. the defendant gave the plaintiff his calling card.” was filed against petitioner Khosrow Minucher and one Abbas Torabian with the Regional Trial Court. an Information for violation of Section 4 of Republic Act No. During their introduction in that meeting. . Crisanto Saruca. 1986. Department of Justice. When the Shah of Iran was deposed by Ayatollah Khomeini. Branch 19. he bought two kilos of caviar from plaintiff and paid P10. "The testimony of the plaintiff disclosed that he is an Iranian national. aside from that of Persian carpets. plaintiff became a refugee of the United Nations and continued to stay in the Philippines. He headed the Iranian National Resistance Movement in the Philippines. a prohibited drug. ”During his first meeting with the defendant on May 13. upon the introduction of Jose Iñigo. in due time. The Manila RTC detailed what it had found to be the facts and circumstances surrounding the case. of the United States. was said to have been seized. On 03 August 1988. The criminal charge followed a “buy-bust operation” conducted by the Philippine police narcotic agents in the house of Minucher.000. Japan and Manila. Jose Iñigo. Presiding Judge Eutropio Migrino rendered a decision acquitting the two accused. Selling caviar. the number of which he can also be contacted. which showed that he is working at the US Embassy in the Philippines. Philippines. was met by plaintiff at the office of Atty.Sometime in May 1986. an Iranian national. 1986. an informer of the Intelligence Unit of the military. he was appointed Labor Attaché for the Iranian Embassies in Tokyo. where a quantity of heroin. otherwise also known as the “Dangerous Drugs Act of 1972. “He came to know the defendant on May 13. At the back of the card appears a telephone number in defendant’s own handwriting. on the other hand. 6425. He came to the Philippines to study in the University of the Philippines in 1974. Manila. of Pasig City.00 for it.000. under the regime of the Shah of Iran. and gave his address as US Embassy. The narcotic agents were accompanied by private respondent Arthur Scalzo who would. In 1976. 88-45691 before the Regional Trial Court (RTC). a lawyer for several Iranians whom plaintiff assisted as head of the anti-Khomeini movement in the Philippines. when the latter was brought to his house and introduced to him by a certain Jose Iñigo. Minucher filed Civil Case No.00 per month. On 08 January 1988. Without much ado. 1986. he followed the defendant where he saw a parked cab opposite the street. defendant visited plaintiff again at the latter's residence for 18 years at Kapitolyo. where the latter and his countryman. The following day. his telephone was unplugged. he took something and placed it on the table in front of the plaintiff. The defendant told him that he [could] help plaintiff for a fee of $2. He was made to sit down while in handcuffs while the defendant was inside his bedroom. “On May 26. they agreed at $24.000. “At about 3:00 in the afternoon of May 27. Plaintiff opened his safe in the bedroom and obtained $2. He was handcuffed and after about 20 minutes in the street. all armed. was more concentrated on politics. Plaintiff was not told why he was being handcuffed and why the privacy of his house. The defendant told him that he would be leaving the Philippines very soon and requested him to come out of the house for a while so that he can introduce him to his cousin waiting in a cab. gave it to the defendant for the latter's fee in obtaining a visa for plaintiff's wife.000. the defendant promised to see plaintiff again. “On May 19. but the defendant told . In fact. After some haggling.“It was also during this first meeting that plaintiff expressed his desire to obtain a US Visa for his wife and the wife of a countryman named Abbas Torabian. Pasig.00. in turn. For the reason that defendant did not yet have the money. an American jumped out of the cab with a drawn high-powered gun. 1986. especially his bedroom was invaded by defendant. they agreed that defendant would come back the next day. and the latter. Their conversation. however. He asked for any warrant. carpets and caviar. Plaintiff brought the merchandize but for the reason that the defendant was not yet there.00.00 from it. They also took plaintiff's wife who was at that time at the boutique near his house and likewise arrested Torabian. he was brought inside the house by the defendant. however. Abbas Torabian.00 per visa. He wanted to buy 200 grams of caviar.000.000. he requested the restaurant people to x x x place the same in the refrigerator. He was not allowed to use the telephone.900. Defendant. The defendant wanted to buy a pair of carpets which plaintiff valued at $27. gave him the pair of carpets. at 1:00 p. were playing chess.00. To his complete surprise. and without putting on his shirt as he was only in his pajama pants. Thereafter. He was in the company of about 30 to 40 Filipino soldiers with 6 Americans. came and plaintiff gave him the caviar for which he was paid. which he gave to the plaintiff. who was playing chess with him in the bedroom and both were handcuffed together. The defendant came out of the bedroom and out from defendant's attaché case.m. the defendant called the plaintiff and invited the latter for dinner at Mario's Restaurant at Makati. the defendant came back again to plaintiff's house and directly proceeded to the latter's bedroom. he came back with his $24.. Then their conversation was again focused on politics and business. 1986. His friends in said places informed him that they saw him on TV with said news.000. The trial court granted the motion. where they were detained for three days without food and water. Sison and Manas. filed a special appearance for Scalzo and moved for extension of time to file an answer pending a supposed advice from the United States Department of State and Department of Justice on the defenses to be raised.him to `shut up.000.00 and a pair of earrings worth $10.00 the defendant paid for the carpets and another $8. a motion for extension was peculiarly unavoidable due to the need (1) for both the Department of State and the Department of Justice to agree on the defenses to be raised and (2) to refer the case to a Philippine lawyer who would be expected to first review the case. Scalzo filed a motion for reconsideration of the court order. as well as its agencies and officials." [1] During the trial. He also discovered missing upon his release his 8 pieces hand-made Persian carpets. . There was. Central Asia and in the Philippines.00. the arrest of defendant and Torabian was likewise on television. The motion was denied by the court. holding that the filing by Scalzo of a motion for extension of time to file an answer to the complaint was a voluntary appearance equivalent to service of summons which could likewise be construed a waiver of the requirement of formal notice. He was identified in the papers as an international drug trafficker.000. contending that a motion for an extension of time to file an answer was not a voluntary appearance equivalent to service of summons since it did not seek an affirmative relief. in its order of 13 December 1988. Scalzo filed another special appearance to quash the summons on the ground that he.00 which he also placed in the safe together with a bracelet worth $15. the law firm of Luna. He claimed that when he was handcuffed. not being a resident of the Philippines and the action being one in personam.000. On 27 October 1988. particularly in Australia. in various newspapers. Scalzo argued that in cases involving the United States government. the defendant took his keys from his wallet.000. America.000. but also in America and in Germany. therefore.00. a painting he bought for P30.00 together with his TV and betamax sets.’ He was nevertheless told that he would be able to call for his lawyer who can defend him. his safe was opened where he kept the $24. “The plaintiff took note of the fact that when the defendant invited him to come out to meet his cousin. nothing left in his house. not only in the Philippines. The court a quo denied the motion for reconsideration in its order of 15 October 1989. they were brought to Camp Crame handcuffed together. x x x In fact. valued at $65. “That his arrest as a heroin trafficker x x x had been well publicized throughout the world. “After the arrest made on plaintiff and Torabian. was beyond the processes of the court. this Court reversed the decision of the appellate court and remanded the case to the lower court for trial. Scalzo filed a petition for certiorari with injunction with this Court. In his answer. addressed to the Department of Foreign Affairs of the Philippines and a Certification. docketed G. et al. Hon. SP No. the trial court denied the motion to dismiss. was denied for its failure to comply with SC Circular No. Then. In a decision. there docketed CA-G. No. Scalzo interposed a counterclaim of P100. dated 11 June 1990..” (cited in 214 SCRA 242). penned by Justice (now Chief Justice) Hilario Davide. the appellate court denied the petition and affirmed the ruling of the trial court. the trial court set the case for pre-trial. to this Court. docketed G. after almost two years since the institution of the civil case.R. per this Court’s resolution of 07 August 1990. 414 of the United States Embassy. No. The case was referred to the Court of Appeals. 1-88. He attached to his motion Diplomatic Note No. Granting the motion.00 to answer for attorneys' fees and expenses of litigation. certifying that the note is a true and faithful copy of its original. al. 17023. appealing the judgment of the Court of Appeals.R.. Wenceslao Polo. however. The petition. Jr. at the court a quo. et. Minucher filed a petition for review with this Court. No. docketed G. an order. the Court of Appeals promulgated its decision sustaining the diplomatic immunity of Scalzo and ordering the dismissal of the complaint against him. The remand was ordered on the theses (a) that the . he was entitled to diplomatic immunity. was issued (a) declaring Scalzo in default for his failure to file a responsive pleading (answer) and (b) setting the case for the reception of evidence. Jr." asking that the complaint in Civil Case No. dated 24 September 1992. 97765 and entitled "Khosrow Minucher vs. the Honorable Court of Appeals. assailing the denial. On 27 July 1990. on 14 June 1990. Scalzo filed a motion to set aside the order of default and to admit his answer to the complaint. Scalzo filed a motion to dismiss the complaint on the ground that. 88-45691 be ordered dismissed. Scalzo. dated 29 May 1990. being a special agent of the United States Drug Enforcement Administration. On 12 March 1990.. vs. 22505. Scalzo had failed to show that the appellate court was in error in its questioned judgment. In a decision. the Court added. In an order of 25 June 1990. Scalzo then elevated the incident in a petition for review on certiorari. No. Meanwhile. in any event. On 31 October 1990.R. Scalzo denied the material allegations of the complaint and raised the affirmative defenses (a) of Minucher’s failure to state a cause of action in his complaint and (b) that Scalzo had acted in the discharge of his official duties as being merely an agent of the Drug Enforcement Administration of the United States Department of Justice.R. of Vice Consul Donna Woodward. dated 06 October 1989. there docketed CA-G.Scalzo filed a petition for review with the Court of Appeals. 91173.000. dated 09 February 1990. 94257 and entitled "Arthur W.R. 2) a valid jurisdiction over the subject matter and the . who successfully established his claim by sufficient evidence. nevertheless. On 17 November 1995. or its kindred rule of res judicata.000. The instant petition for review raises a two-fold issue: (1) whether or not the doctrine of conclusiveness of judgment. the issue on Scalzo’s diplomatic immunity could not be taken up. and (2) whether or not Arthur Scalzo is indeed entitled to diplomatic immunity. it ruled that he. On appeal. should have precluded the Court of Appeals from resolving the appeal to it in an entirely different manner.00. is ordered to take note of the lien of the Court on this judgment to answer for the unpaid docket fees considering that the plaintiff in this case instituted this action as a pauper litigant. The doctrine of conclusiveness of judgment. exemplary damages in the sum of P100. this recourse by Minucher. following the decision rendered by this Court in G. `The Clerk of the Regional Trial Court. 414 and (b) that the complaint contained sufficient allegations to the effect that Scalzo committed the imputed acts in his personal capacity and outside the scope of his official duties and. The Manila RTC thus continued with its hearings on the case. and in view of all the foregoing considerations.Court of Appeals erred in granting the motion to dismiss of Scalzo for lack of jurisdiction over his person without even considering the issue of the authenticity of Diplomatic Note No. it adjudged: “WHEREFORE.000.00.’" [2] While the trial court gave credence to the claim of Scalzo and the evidence presented by him that he was a diplomatic agent entitled to immunity as such. judgment is hereby rendered for the plaintiff.R. the trial court reached a decision. attorney's fees in the sum of P200.000. 97765. moral damages in the sum of P10 million. should be held accountable for the acts complained of committed outside his official duties. No. Manila. would require 1) the finality of the prior judgment.00 plus costs. the Court of Appeals reversed the decision of the trial court and sustained the defense of Scalzo that he was sufficiently clothed with diplomatic immunity during his term of duty and thereby immune from the criminal and civil jurisdiction of the “Receiving State” pursuant to the terms of the Vienna Convention. against the defendant in the manner following: "`Adjudging defendant liable to plaintiff in actual and compensatory damages of P520. absent any evidence to the contrary. Hence. to which the Philippines is a signatory. 3. 414 to the Clerk of Court of RTC Manila. Indeed. No. '7' . dated 27 June 1990 forwarding Embassy Note No. 97765 . and 5.R.Diplomatic Note No. 2.R. Sec. and 8. 7. however. Exh. 833 dated 21 October 1988. and 4) an identity of the parties. intelligent and fair resolution of the issue of diplomatic immunity.[3] Even while one of the issues submitted in G. Exh.Letter dated 18 November 1992 from the Office of the Protocol.Diplomatic Note No.is also a pivotal question raised in the instant petition. Having thus reserved his right to present evidence in support of his position. 4. Department of Foreign Affairs. which is the basis for the alleged diplomatic immunity. 414 dated 29 May 1990. addressed to the Chief Justice of . Exh. '6' . Branch 19 (the trial court). 97765. Exh.Certification of Vice Consul Donna K.Diplomatic Note No. unequivocally states that he would present documentary evidence consisting of DEA records on his investigation and surveillance of plaintiff and on his position and duties as DEA special agent in Manila.parties on the part of the court that renders it.1st Indorsement of the Hon. '2' . 791 dated 17 November 1992. 6."whether or not public respondent Court of Appeals erred in ruling that private respondent Scalzo is a diplomat immune from civil suit conformably with the Vienna Convention on Diplomatic Relations" . Exh. '8' . appended to the 1st Indorsement (Exh. '1' . Legal Adviser. (and) having ascertained the target. Emmanuel Fernandez. through Asst.S. '3'). 757 dated 25 October 1991. '3' . Department of Foreign Affairs. the ruling in G. in his Pre-trial Brief filed on 13 June 1990. 414.Diplomatic Note No. has not resolved that point with finality. No. Coquia.Diplomatic Note No. Exh.. Woodward dated 11 June 1990. the Court there has made this observation "It may be mentioned in this regard that private respondent himself. Jorge R. 3) a judgment on the merits." Scalzo has submitted to the trial court a number of documents 1. the barren self-serving claim in the belated motion to dismiss cannot be relied upon for a reasonable. '5' . subject matter and causes of action. describing his functions as an agent of the United States Drugs Enforcement Agency as “conducting surveillance operations on suspected drug dealers in the Philippines believed to be the source of prohibited drugs being shipped to the U. (he then) would inform the Philippine narcotic agents (to) make the actual arrest. grants him absolute immunity from suit. Exh. Exh."[4] Scalzo contends that the Vienna Convention on Diplomatic Relations. '4' . by the time of its ratification on 18 April 1961.this Court. and (3) that the United States Embassy repeatedly urged the Department of Foreign Affairs to take appropriate action to inform the trial court of Scalzo’s diplomatic immunity. and (c) that the Philippine Department of Foreign Affairs itself recognized that Scalzo during his tour of duty in the Philippines (14 October 1985 up to 10 August 1988) was listed as being an Assistant Attaché of the United States diplomatic mission and accredited with diplomatic status by the Government of the Philippines. and the special power of attorney executed by him in favor of his previous counsel[6] to show (a) that the United States Embassy. according to Scalzo. with the cooperation of the Philippine law enforcement officials and in the exercise of his functions as member of the mission. In his Exhibit 12. affirmed by its Vice Consul. The other documentary exhibits were presented to indicate that: (1) the Philippine government itself. on May 1986..e. (1) to provide criminal investigative expertise and assistance to foreign law enforcement agencies on narcotic and drug control programs upon the request of the host country.[5] The documents. its rules of law had long become stable. formally advised the “Judicial Department” of his diplomatic status and his entitlement to all diplomatic privileges and immunities under the Vienna Convention. (2) that the United States Government was firm from the very beginning in asserting the diplomatic immunity of Scalzo with respect to the case pursuant to the provisions of the Vienna Convention on Diplomatic Relations. and (2) the Department of Foreign Affairs itself authenticated Diplomatic Note No. (b) that. recognizing and respecting the diplomatic status of Scalzo. . 414. The Vienna Convention on Diplomatic Relations was a codification of centuries-old customary law and. the certification of the Drug Enforcement Administration of the United States Department of Justice that Scalzo was a special agent assigned to the Philippines at all times relevant to the complaint. Scalzo described the functions of the overseas office of the United States Drugs Enforcement Agency. and 3) to conduct complex criminal investigations involving international criminal conspiracies which affect the interests of the United States. 2) to establish and maintain liaison with the host country and counterpart foreign law enforcement officials. through its Executive Department. i. Scalzo additionally presented Exhibits "9" to "13" consisting of his reports of investigation on the surveillance and subsequent arrest of Minucher. acknowledged Scalzo to be a member of the diplomatic staff of the United States diplomatic mission from his arrival in the Philippines on 14 October 1985 until his departure on 10 August 1988. he investigated Minucher for alleged trafficking in a prohibited drug. would show that: (1) the United States Embassy accordingly advised the Executive Department of the Philippine Government that Scalzo was a member of the diplomatic staff of the United States diplomatic mission from his arrival in the Philippines on 14 October 1985 until his departure on 10 August 1988. when the earliest treatises on diplomatic law were published. who represent their respective states in concerns of commerce and navigation and perform certain administrative and notarial duties.Among the city states of ancient Greece. the administrative staff and the technical and service staff. and among the states of India. such as the issuance of passports and visas." under the terms of the Convention. do not ordinarily enjoy the traditional diplomatic immunities and privileges accorded diplomats. nevertheless. Indeed. Where a state would wish to have a more prominent diplomatic presence in the receiving state. Only the heads of missions. [9] The Convention lists the classes of heads of diplomatic missions to include (a) ambassadors or nuncios accredited to the heads of state. it does so. as being the preeminent embodiment of the state he represented. the main yardstick in ascertaining whether a person is a diplomat entitled to immunity is the determination of whether or not he performs duties of diplomatic nature. An attaché belongs to a category of officers in the diplomatic establishment who may be in charge of its cultural. the functions of the diplomatic mission involve.[8] Traditionally. administrative or financial affairs. [13] Comprising the "staff of the (diplomatic) mission" are the diplomatic staff. the official usually entrusted with the external affairs of the state. Conformably with the Vienna Convention.[7] By the end of the 16th century. excluding the members of the administrative. the person of the herald in time of war and the person of the diplomatic envoy in time of peace were universally held sacrosanct.” that he was an Assistant Attaché of the United States diplomatic mission and was accredited as such by the Philippine Government. and (c) charges d' affairs[12] accredited to the ministers of foreign affairs. technical and service staff of the mission. and the foreign secretary. among the peoples of the Mediterranean before the establishment of the Roman Empire. [10] (b) envoys. thus impliedly withholding the same privileges from all others. the exercise of diplomatic intercourse among states was undertaken by the head of state himself. by and large.[11] ministers or internuncios accredited to the heads of states. with an understanding that the same be restrictively applied. There could also be a class of attaches . and administration of oaths. it would then send to the latter a diplomatic mission. are accorded diplomatic rank. are vested with blanket diplomatic immunity from civil and criminal suits. the inviolability of ambassadors was firmly established as a rule of customary international law. particularly in his Exhibits “9” to “13. Even while the Vienna Convention on Diplomatic Relations provides for immunity to the members of diplomatic missions. mainly for the reason that they are not charged with the duty of representing their states in political matters. as well as members of the diplomatic staff. Only "diplomatic agents. Scalzo asserted. the representation of the interests of the sending state and promoting friendly relations with the receiving state. The Convention defines "diplomatic agents" as the heads of missions or members of the diplomatic staff. It might bear stressing that even consuls. authentication of documents. press. the private respondent is clothed with diplomatic immunity. science. other than the foreign ministry or department. commercial.R. “x x x xxx xxx "There is of course the claim of private respondent that the acts imputed to him were done in his official capacity. it should have been the most proper and appropriate recourse. Verily. eight (8) months and seventeen (17) days from the time his counsel filed on 12 September 1988 a Special Appearance and Motion asking for a first extension of time to file the Answer because the Departments of State and Justice of the United States of America were studying the case for the purpose of determining his defenses. 25 October 1991 and 17 November 1992. The undue haste with which respondent Court . Setting aside for the moment the issue of authenticity raised by the petitioner and the doubts that surround such claim. on 29 May 1990. viz: "While the trial court denied the motion to dismiss. The public respondent then should have sustained the trial court's denial of the motion to dismiss. all issued post litem motam. and customs attaches. thereby divesting the trial court of jurisdiction over his person. but their main function is to observe. 414.belonging to certain ministries or departments of the government. air. before he could secure the Diplomatic Note from the US Embassy in Manila. x x x. to the core issue . In an attempt to prove his diplomatic status.the alleged diplomatic immunity of the private respondent. the public respondent gravely abused its discretion in dismissing Civil Case No. respectively. 97765. who are detailed by their respective ministries or departments with the embassies such as the military. Attaches assist a chief of mission in his duties and are administratively under him. No. nor are they normally designated as having diplomatic rank. agricultural. labor. and even granting for the sake of argument that such note is authentic. the complaint for damages filed by petitioner cannot be peremptorily dismissed. analyze and interpret trends and developments in their respective fields in the host country and submit reports to their own ministries or departments in the home government. Scalzo presented Diplomatic Notes Nos. 757 and 791. naval. or the like. Nothing supports this self-serving claim other than the so-called Diplomatic Note. The presentation did nothing much to alleviate the Court's initial reservations in G.[14] These officials are not generally regarded as members of the diplomatic mission. It should not have been overwhelmed by the self-serving Diplomatic Note whose belated issuance is even suspect and whose authenticity has not yet been proved. “x x x xxx xxx “And now. in view of the fact that it took private respondent one (1) year. 88-45691 on the basis of an erroneous assumption that simply because of the diplomatic note. [18] Diplomatic missions are requested to provide the most accurate and descriptive job title to that which currently applies to the duties performed. Fernandez. The Office of the Protocol would then assign each individual to the appropriate functional category. which Scalzo claims to be acting for. has formulated its standards for recognition of a diplomatic agent. a diplomatic note formally representing the intention to assign the person to diplomatic duties. [16] The government of the United States itself. the present controversy could then be resolved under the related doctrine of State Immunit from Suit. it should behoove the Philippine government. [19] But while the diplomatic immunity of Scalzo might thus remain contentious. therefore. indeed.”[17] Supplementary criteria for accreditation are the possession of a valid diplomatic passport or. It might be recalled that the privilege is not an immunity from the observance of the law of the territorial sovereign or from ensuing legal liability. during his term of office in the Philippines (from 14 October 1985 up to 10 August 1988) was listed as an Assistant Attaché of the United States diplomatic mission and was. Scalzo. to be most circumspect. being over twenty-one years of age. in such matters. certifying that "the records of the Department (would) show that Mr. accredited diplomatic status by the Government of the Philippines. the hands of the courts are virtually tied. The State Department policy is to only concede diplomatic status to a person who possesses an acknowledged diplomatic title and “performs duties of diplomatic nature. it was sufficiently established that. dated 08 November 1992. Jr." No certified true copy of such "records.[15] the Court has recognized that. from States which do not issue such passports. ." the supposed bases for the belated issuance. specifically its Department of Foreign Affairs. Arthur W. vesting a person with diplomatic immunity is a prerogative of the executive branch of the government. Assistant Secretary. he worked for the United States Drug Enforcement Agency and was tasked to conduct surveillance of suspected drug activities within the country on the dates pertinent to this case. an immunity from the exercise of territorial jurisdiction. and performing diplomatic functions on an essentially full-time basis." A significant document would appear to be Exhibit No. issued by the Office of Protocol of the Department of Foreign Affairs and signed by Emmanuel C. In World Health Organization vs. it is. rather. Aquino. was presented in evidence. Amidst apprehensions of indiscriminate and incautious grant of immunity. 08. that should particularly be no less than compelling. the holding of a nonimmigrant visa. designed to gain exemption from the jurisdiction of courts. in its post litem motam issuances..yielded to the private respondent's claim is arbitrary. Concededly. If it should be ascertained that Arthur Scalzo was acting well within his assigned functions when he committed the acts alleged in the complaint. et al. is that if the judgment against an official would require the state itself to perform an affirmative act to satisfy the award. and within the scope of their authority. It follows that for discharging their duties as agents of the United States. It cannot for a moment be imagined that they were acting in their private or unofficial capacity when they apprehended and later testified against the complainant. Court of Appeals[26] elaborates: “It is a different matter where the public official is made to account in his capacity as such for acts contrary to law and injurious to the rights of the plaintiff. in broad terms. Thus. which has not given its consent to be sued.. made to attach not just to the person of the head of state. Aligaen.[21] If the acts giving rise to a suit are those of a foreign government done by its foreign agent. [who were] responsible for their acts. has its limitations. the suit must be regarded as being against the state itself.that all states are sovereign equals and cannot assert jurisdiction over one another. although not necessarily a diplomatic personage. under the maxim . but also distinctly to the state itself in its sovereign capacity. or his representative. in whose service he is. vs. the complaint could be barred by the immunity of the foreign sovereign from suit without its consent. As was clearly set forth by Justice Zaldivar in Director of the Bureau of Telecommunications. x x x. Suing a representative of a state is believed to be. [23] In United States of America vs. but acting in his official capacity. in effect.The precept that a State cannot be sued in the courts of a foreign state is a longstanding rule of customary international law then closely identified with the personal immunity of a foreign sovereign from suit [20] and."[25] This immunity principle. they cannot be directly impleaded for acts imputable to their principal. non habet imperium . however. [22] The implication. such as the appropriation of the amount needed to pay the damages decreed against him. et .par in parem. Guinto . although it has not been formally impleaded.[24] involving officers of the United States Air Force and special officers of the Air Force Office of Special Investigators charged with the duty of preventing the distribution. The proscription is not accorded for the benefit of an individual but for the State. suing the state itself. and not the petitioners personally. it is that government. with the emergence of democratic states. x x x As they have acted on behalf of the government. it is also applicable to complaints filed against officials of the state for acts allegedly performed by them in the discharge of their duties. Shauf vs. this Court has ruled "While the doctrine (of state immunity) appears to prohibit only suits against the state without its consent. possession and use of prohibited drugs. In the same tenor. may be inadequate to support the "diplomatic status" of the latter but they give enough indication that the Philippine government has given its imprimatur. The rationale for this ruling is that the doctrine of state immunity cannot be used as an instrument for perpetrating an injustice. as well as the participation of members of the Philippine Narcotics Command in the “buy-bust operation” conducted at the residence of Minucher at the behest of Scalzo. It is a well-settled principle of law that a public official may be liable in his personal private capacity for whatever damage he may have caused by his act done with malice and in bad faith or beyond the scope of his authority and jurisdiction. and an action against the officials or officers by one whose rights have been invaded or violated by such acts. stationed within Philippine territory. is not a suit against the State within the constitutional provision that the State may not be sued without its consent. under an unconstitutional act or under an assumption of authority which he does not have. it has been said that an action at law or suit in equity against a State officer or the director of a State department on the ground that. while claiming to act for the State. to the activities within Philippine territory of agent Scalzo of the United . operating within a territory. however. This situation usually arises where the public official acts without authority or in excess of the powers vested in him. The cloak of protection afforded the officers and agents of the government is removed the moment they are sued in their individual capacity.” [27] A foreign agent. can be gleaned from the facts heretofore elsewhere mentioned. unauthorized acts of government officials or officers are not acts of the State. he violates or invades the personal and property rights of the plaintiff. While evidence is wanting to show any similar agreement between the governments of the Philippines and of the United States (for the latter to send its agents and to conduct surveillance and related activities of suspected drug dealers in the Philippines). certifications from officials of both the Philippine Department of Foreign Affairs and the United States Embassy. can be cloaked with immunity from suit but only as long as it can be established that he is acting within the directives of the sending state. the consent or imprimatur of the Philippine government to the activities of the United States Drug Enforcement Agency. “x x x xxx xxx “(T)he doctrine of immunity from suit will not apply and may not be invoked where the public official is being sued in his private and personal capacity as an ordinary citizen. is not a suit against the State within the rule of immunity of the State from suit. under the RP-US Military Bases Agreement. The official exchanges of communication between agencies of the government of the two countries. The consent of the host state is an indispensable requirement of basic courtesy between the two sovereigns. if not consent.al. Guinto and Shauf both involve officers and personnel of the United States. for the protection of his rights. (33 SCRA 368): `Inasmuch as the State authorizes only legal acts by its officers. WHEREFORE.. HON. No costs. 16. JOEL R. SANTAMARIA. after having ascertained the target. ROMEL R. SO ORDERED. BOLASTIG. In conducting surveillance activities on Minucher. (Group) v. LEAGUE OF URBAN POOR FOR ACTION (LUPA). BUTUYAN. February 07.States Drug Enforcement Agency. 2012 ] CHINA NATIONAL MACHINERY & EQUIPMENT CORP. 665 SCRA 189 (2012) EN BANC [ 665 SCRA 189. China National Machinery & Equipment Corp. PETITIONER. (GROUP). ROGER R. DANILO M. All told. is entitled to the defense of state immunity from suit. and then becoming a principal witness in the criminal case against Minucher. ROQUE. the petition is DENIED. to inform local law enforcers who would then be expected to make the arrest. REGIONAL TRIAL COURT OF MAKATI CITY. CHRISTOPHER FRANCISCO C. later acting as the poseur-buyer during the buy-bust operation. CESAR D. JR. KILUSAN NG MARALITA SA MEYCAUAYAN (KMM-LUPA CHAPTER). this Court is constrained to rule that respondent Arthur Scalzo. Santamaria. BAGARES. Scalzo hardly can be said to have acted beyond the scope of his official function or duties. VS. . RAYEL. an agent of the United States Drug Enforcement Agency allowed by the Philippine government to conduct activities in the country to help contain the problem on the drug traffic. on the foregoing premises. The job description of Scalzo has tasked him to conduct surveillance on suspected drug suppliers and. HERMINIO HARRY L. IN HIS OFFICIAL CAPACITY AS PRESIDING JUDGE OF BRANCH 145. SP No. [4] Under the Aug 30 MOU. VAAL.050.. Jose L. for the conduct of a feasibility study on a possible railway line from Manila to San Fernando. JR. GOZO. La Union (the Northrail Project). LEGASPI.[9] In the Loan Agreement. Cortes. LANOZO.000. the Philippine government and EXIM Bank entered into a counterpart financial agreement – Buyer Credit Loan Agreement No.[10] . represented by its chairperson.000. TERRADO. BLA 04055 (the Loan Agreement). This is a Petition for Review on Certiorari with Prayer for the Issuance of a Temporary Restraining Order (TRO) and/or Preliminary Injunction assailing the 30 September 2008 Decision and 5 December 2008 Resolution of the Court of Appeals (CA) in CA–G. the Export Import Bank of China (EXIM Bank) and the Department of Finance of the Philippines (DOF) entered into a Memorandum of Understanding (Aug 30 MOU). NELSON B. AND SERGIO C. the Chinese Ambassador to the Philippines. TERESA D. KALIPUNAN NG DAMAYANG MAHIHIRAP (KADAMAY). 103351. JOSEFINA A. VICENTE C. AND EDUARDO LEGSON. Phase I of the North Luzon Railway System from Caloocan to Malolos on a turnkey basis (the Contract Agreement). RESPONDENTS. JR. RAMMIL DINGAL. Northrail and CNMEG executed a Contract Agreement for the construction of Section I. [6] On 30 December 2003. MA. QUINONES. payable in 20 years. represented by its president. wrote a letter to DOF Secretary Jose Isidro Camacho (Sec. and at the rate of 3% per annum. EXIM Bank agreed to extend an amount not exceeding USD 400.000 in favor of the DOF. EDY CLERIGO. LANOZO. MERLYN M. Wang Chungui (Amb.[3] The Chinese government designated EXIM Bank as the lender. [5] On 1 October 2003. ALBAN. LOLITA S. entered into a Memorandum of Understanding with the North Luzon Railways Corporation (Northrail). while the Philippine government named the DOF as the borrower. Wang). [1] On 14 September 2002.. ZEPEDA. petitioner China National Machinery & Equipment Corp. EXIM Bank agreed to extend Preferential Buyer’s Credit in the amount of USD 400.CALDERON. wherein China agreed to extend Preferential Buyer’s Credit to the Philippine government to finance the Northrail Project. [7] The contract price for the Northrail Project was pegged at USD 421. (Group) (CNMEG). Jr.000.R. with a 5-year grace period.[8] On 26 February 2004.000 in favor of the Philippine government in order to finance the construction of Phase I of the Northrail Project. CARMEN DEUNIDA. CONCHITA G. Camacho) informing him of CNMEG’s designation as the Prime Contractor for the Northrail Project. [2] On 30 August 2003. Ren Hongbin. RICARDO D. No. the Office of the Executive Secretary.[16] CNMEG then filed a Motion for Reconsideration. the DOF. 292. 9184 (R. otherwise known as the Administrative Code. making it immune from suit. Branch 145 (RTC Br. CNMEG filed an Urgent Motion for Reconsideration of this Order. as it was an agent of the Chinese government. the National Economic Development Authority and Northrail. Makati City. [22] Thus. RTC Br. and (b) the subject matter.[20] Subsequently. 06-203 before the Regional Trial Court. the Department of Budget and Management. CNMEG filed a Motion to Dismiss dated 12 April 2006. (b) Republic Act No. the appellate court dismissed the Petition for Certiorari.A. CNMEG filed before the CA a Petition for Certiorari with Prayer for the Issuance of TRO and/or Writ of Preliminary Injunction dated 4 April 2008. [18] Thus. (c) Presidential Decree No. Whether or not the certification from the Department of Foreign Affairs is necessary under .On 13 February 2006. otherwise known as the Government Auditing Code. raising the following issues: [23] Whether or not petitioner CNMEG is an agent of the sovereign People’s Republic of China. respondents filed a Complaint for Annulment of Contract and Injunction with Urgent Motion for Summary Hearing to Determine the Existence of Facts and Circumstances Justifying the Issuance of Writs of Preliminary Prohibitory and Mandatory Injunction and/or TRO against CNMEG. [21] which was denied by the CA in a Resolution dated 5 December 2008. [17] which was denied by the trial court in an Order dated 10 March 2008. respondents alleged that the Contract Agreement and the Loan Agreement were void for being contrary to (a) the Constitution. 1445. 145 issued an Order dated 17 March 2006 setting the case for hearing on the issuance of injunctive reliefs. National Capital Judicial Region. 145). as the Northrail Project was a product of an executive agreement.[14] Before RTC Br. and (d) Executive Order No. Whether or not the Northrail contracts are products of an executive agreement between two sovereign states. In the Complaint. CNMEG filed a Motion for Reconsideration.[19] In the assailed Decision dated 30 September 2008. 145 issued an Omnibus Order denying CNMEG’s Motion to Dismiss and setting the case for summary hearing to determine whether the injunctive reliefs prayed for should be issued. 145 could rule thereon. [15] On 15 May 2007. CNMEG filed the instant Petition for Review on Certiorari dated 21 January 2009. 9184).[11] The case was docketed as Civil Case No. arguing that the trial court did not have jurisdiction over (a) its person. otherwise known as the Government Procurement Reform Act.[12] RTC Br.[13] On 29 March 2006. Whether or not the Court of Appeals ignored the ruling of this Honorable Court in the Neri case.the foregoing circumstances. citations omitted. but not with regard to private acts or acts jure gestionis. This is particularly true with respect to the Communist states which took control of nationalized business . According to the newer or restrictive theory. (Emphasis supplied. Whether CNMEG is entitled to immunity. namely: 1. According to the classical or absolute theory. 06-203.) xxx xxx xxx The restrictive theory came about because of the entry of sovereign states into purely commercial activities remotely connected with the discharge of governmental functions. The crux of this case boils down to two main issues. It likewise requests this Court for the issuance of a TRO and. Whether or not the Court of Appeals failed to avoid a procedural limbo in the lower court. CNMEG prays for the dismissal of Civil Case No. a writ of preliminary injunction to restrain public respondent from proceeding with the disposition of Civil Case No. without its consent. Whether or not the act being undertaken by petitioner CNMEG is an act jure imperii. Whether the Contract Agreement is an executive agreement. 145 for lack of jurisdiction. later on. Whether or not the Northrail Project is subject to competitive public bidding.[24] to wit: There are two conflicting concepts of sovereign immunity. the immunity of the sovereign is recognized only with regard to public acts or acts jure imperii of a state. be made a respondent in the courts of another sovereign . First issue: Whether CNMEG is entitled to immunity This Court explained the doctrine of sovereign immunity in Holy See v. such that it cannot be questioned by or before a local court. a sovereign cannot. precluding it from being sued before a local court. each widely held and firmly established. 06-203 before RTC Br. 2. Rosario. xxx xxx xxx As it stands now. its commercial activities or economic affairs. A threshold question that must be answered is whether CNMEG performs governmental or proprietary functions. The complexity of relationships between sovereign states. Stated differently. It does not apply where the contract relates to the exercise of its sovereign functions. functions. [28] A. CNMEG is engaged in a propriety activity.) Since the Philippines adheres to the restrictive theory. it is crucial to ascertain the legal nature of the act involved – whether the entity claiming immunity performs governmental. mothered a more restrictive application of the doctrine. A thorough examination of the basic facts of the case would show that CNMEG is engaged in a proprietary activity. Phase I of Philippine North Luzon Railways Project (hereinafter referred to as . National Labor Relations Commission . The view evolved that the existence of a contract does not. a State may be said to have descended to the level of an individual and can thus be deemed to have tacitly given its consent to be sued only when it enters into business contracts.[25] this Court affirmed the Philippines’ adherence to the restrictive theory as follows: The doctrine of state immunity from suit has undergone further metamorphosis. the application of the doctrine of immunity from suit has been restricted to sovereign or governmental activities ( jure imperii). viz:[29] WHEREAS the Employer (Northrail) desired to construct the railways form Caloocan to Malolos. [26] (Emphasis supplied. brought about by their increasing commercial activities. at all times. section I. As held in United States of America v. Ruiz –[27] The restrictive application of State immunity is proper only when the proceedings arise out of commercial transactions of the foreign sovereign. The mantle of state immunity cannot be extended to commercial. per se. as opposed to proprietary. mean that sovereign states may.activities and international trading. be sued in local courts. The parties executed the Contract Agreement for the purpose of constructing the Luzon Railways. In JUSMAG v. private and proprietary acts (jure gestionis). THE PROJECT). supply. including design. . The above-cited portion of the Contract Agreement.. NOW. [30] (b) the letter of Amb. THEREFORE. welcomes CNMEG’s proposal to undertake a Feasibility Study (the “Study”) at no cost to NORTHRAIL CORP. [31] and (c) the Loan Agreement. manufacturing. WHEREAS. In order to fully understand the intention behind and the purpose of the entire undertaking. the parties agree to sign this Contract for the Implementation of the Project. Tarlac. AND WHEREAS the Loan Agreement of the Preferential Buyer’s Credit between ExportImport Bank of China and Department of Finance of Republic of the Philippines. the Contract Agreement must not be read in isolation. Camacho. CNMEG has expressed interest in the rehabilitation and/or modernization of the MLN from Metro Manila to San Fernando. does not on its own reveal whether the construction of the Luzon railways was meant to be a proprietary endeavor. [32] 1. namely: (a) the Memorandum of Understanding dated 14 September 2002 between Northrail and CNMEG. AND WHEREAS the Contractor has offered to provide the Project on Turnkey basis. Memorandum of Understanding dated 14 September 2002 The Memorandum of Understanding dated 14 September 2002 shows that CNMEG sought the construction of the Luzon Railways as a proprietary venture. WHEREAS. The relevant parts thereof read: WHEREAS. Pangasinan and La Union (the ‘Project’). Pampanga. it must be construed in conjunction with three other documents executed in relation to the Northrail Project. CNMEG has the financial capability. and training of the Employer’s personnel. professional competence and technical expertise to assess the state of the [Main Line North (MLN)] and recommend implementation plans as well as undertake its rehabilitation and/or modernization. Instead. La Union passing through the provinces of Bulacan. Wang dated 1 October 2003 addressed to Sec. however. the NORTHRAIL CORP. commissioning. construction. Wang in his letter dated 1 October 2003. xxx II. The parties shall use their best endeavors to formulate and finalize a Contract with a view to signing the Contract within one hundred twenty (120) days from CNMEG’s presentation of the Study . rules and regulations for the selection of a contractor. rules. CNMEG has the proven competence and capability to undertake the Project as evidenced by the ranking of 42 given by the ENR among 225 global construction companies.3 and 1. 2. APPROVAL PROCESS 2.[33] (Emphasis supplied) Clearly. the NORTHRAIL CORP. regulations and procedures required from both parties.4 above and in compliance with necessary governmental laws. CNMEG already signed an MOU with the North Luzon Railways Corporation last xxx xxx September 14. 2000 during the visit of Chairman Li Peng. This would categorize CNMEG as the state corporation within the . the parties shall commence the preparation and negotiation of the terms and conditions of the Contract (the “Contract”) to be entered into between them on the implementation of the Project. and not the Chinese government. but was plainly a business strategy employed by CNMEG with a view to securing this commercial enterprise. also welcomes CNMEG’s interest in undertaking the Project with Supplier’s Credit and intends to employ CNMEG as the Contractor for the Project subject to compliance with Philippine and Chinese laws. the NORTHRAIL CORP. 2. Letter dated 1 October 2003 That CNMEG. thus: 1. WHEREAS. considers CNMEG’s proposal advantageous to the Government of the Republic of the Philippines and has therefore agreed to assist CNMEG in the conduct of the aforesaid Study. and not the Chinese government. they have already established an initial working relationship with your North Luzon Railways Corporation.1 As soon as possible after completion and presentation of the Study in accordance with Paragraphs 1. it was CNMEG that initiated the undertaking.WHEREAS. The Feasibility Study was conducted not because of any diplomatic gratuity from or exercise of sovereign functions by the Chinese government. Such being the case. initiated the Northrail Project was confirmed by Amb. Notwithstanding the foregoing. even if they are clearly engaged in commercial or proprietary pursuits. The Loan Agreement CNMEG claims immunity on the ground that the Aug 30 MOU on the financing of the Northrail Project was signed by the Philippine and Chinese governments. 3. To imply otherwise would result in an absurd situation. and the Borrower’s performance of and compliance with its obligations under this Agreement will constitute. 3.000 for the venture. only CNMEG has the advantage of being fully familiar with the current requirements of the Northrail Project having already accomplished a Feasibility Study which was used as inputs by the North Luzon Railways Corporation in the approvals (sic) process required by the Republic of the Philippines. viz: Article 11. However. the Borrower does not waive any immunity with respect of its assets which are (i) used by a diplomatic or consular mission of the Borrower and (ii) assets of a military character and under control of a . as the case may be. and its assignment as the Primary Contractor did not imply that it was acting on behalf of China in the performance of the latter’s sovereign functions. execution or any other legal process with respect to its obligations under this Agreement.050. the desire of CNMEG to secure the Northrail Project was in the ordinary or regular course of its business as a global construction company. in which all Chinese corporations owned by the state would be automatically considered as performing governmental activities.[34] (Emphasis supplied. in any jurisdiction. private and commercial acts done and performed for commercial purposes under the laws of the Republic of the Philippines and neither the Borrower nor any of its assets is entitled to any immunity or privilege (sovereign or otherwise) from suit. [35] The use of the term “state corporation” to refer to CNMEG was only descriptive of its nature as a government-owned and/or -controlled corporation.) Thus. The implementation of the Northrail Project was intended to generate profit for CNMEG. Among the various state corporations of the People’s Republic of China. which originated from the same Aug 30 MOU.People’s Republic of China which initiated our Government’s involvement in the Project. the Loan Agreement. with the Contract Agreement placing a contract price of USD 421. xxx (j) Commercial Activity The execution and delivery of this Agreement by the Borrower constitute. and its assignment as the Primary Contractor meant that it was bound to perform a governmental function on behalf of China. belies this reasoning. [38] it is clear from the foregoing provisions that the Northrail Project was a purely commercial transaction. execution on judgment. service of process upon it or any agent.[37] Thus. attachment prior to judgment. The waiver of immunity by the Borrower. Notwithstanding the foregoing. and (d) such judgment was not based on a clear mistake of fact or law.5 Waiver of Immunity The Borrower irrevocably and unconditionally waives. evidence for enforcement in any proceedings against the Borrower and its assets in the Republic of the Philippines provided that (a) the court rendering judgment had jurisdiction over the subject matter of the action in accordance with its jurisdictional rules. valid. and not because of any motivation to do business in the Philippines. set-off. any immunity to which it or its property may at any time be or become entitled. (ii) assets of a military character and under control of a military authority or defense agency and (iii) located in the Philippines and dedicated to a public or governmental use (as distinguished from patrimonial assets or assets dedicated to commercial use). (Emphasis supplied. attachment in aid of execution to which it or its assets may be entitled in any legal action or proceedings with respect to this Agreement or any of the transactions contemplated hereby or hereunder. whether characterized as sovereign immunity or otherwise.military authority or defense agency and (iii) located in the Philippines and dedicated to public or governmental use (as distinguished from patrimonial assets or assets dedicated to commercial use). (c) the judgment of the court was not obtained through collusion or fraud. the Loan Agreement likewise contains this express waiver of immunity: 15. . from any suit. the Borrower does not waive any immunity in respect of its assets which are (i) used by a diplomatic or consular mission of the Borrower. binding and enforceable and any judgment obtained in the People’s Republic of China will be if introduced.) (k) Proceedings to Enforce Agreement In any proceeding in the Republic of the Philippines to enforce this Agreement.[36] Further. judgment. despite petitioner’s claim that the EXIM Bank extended financial assistance to Northrail because the bank was mandated by the Chinese government. the irrevocable submissions of the Borrower to the nonexclusive jurisdiction of the courts of the People’s Republic of China and the appointment of the Borrower’s Chinese Process Agent is legal. (b) the Republic had notice of the proceedings. the choice of the laws of the People’s Republic of China as the governing law hereof will be recognized and such law will be applied. in which this Court held that “(i)mmunity from suit is determined by the character of the objects for which the entity was organized. Thus. and GTZ for the implementation of Germany’s contributions. The activities performed by GTZ pertaining to the SHINE project are governmental in nature . This view finds support in Malong v.” [39] In this regard. as held in cases such as Holy See v. this Court’s ruling in Deutsche Gesellschaft Für Technische Zusammenarbeit (GTZ) v. and the Loan Agreement would reveal the desire of CNMEG to construct the Luzon Railways in pursuit of a purely commercial activity performed in the ordinary course of its business. Germany and the Philippines entered into a Technical Cooperation Agreement. pursuant to which both signed an arrangement promoting the Social Health Insurance–Networking and Empowerment (SHINE) project. Amb. this Court held: The arguments raised by GTZ and the [Office of the Solicitor General (OSG)] are rooted in several indisputable facts. B. Wang’s letter dated 1 October 2003. Although the Contract Agreement is silent on the classification of the legal nature of the transaction. such claim does not automatically vest it with immunity. CNMEG failed to adduce evidence that it is immune from suit uder Chinese law. The two governments named their respective implementing organizations: the Department of Health (DOH) and the Philippine Health Insurance Corporation (PHIC) for the Philippines. Philippine National Railways. The fact that GTZ entered into employment contracts with the private respondents did not disqualify it from invoking immunity from suit. under the 1991 agreement. CA[40] must be examined. In ruling that GTZ was not immune from suit. Even assuming arguendo that CNMEG performs governmental functions.. In Deutsche Gesellschaft. the foregoing provisions of the Loan Agreement.Admittedly. The SHINE project was implemented pursuant to the bilateral agreements between the Philippine and German governments. related as they are to the promotion of health insurance in the Philippines. while the Contract Agreement was between Northrail and CNMEG. GTZ was tasked. the Memorandum of Understanding dated 14 September 2002. with the implementation of the contributions of the German government. the Loan Agreement was entered into between EXIM Bank and the Philippine government. piecing together the content and tenor of the Contract Agreement. which set forth what remains valid doctrine: . Jr. nonetheless reveal the intention of the parties to the Northrail Project to classify the whole venture as commercial or proprietary in character. which is an inextricable part of the entire undertaking. Rosario. ” If the instant suit had been brought directly against the Federal Republic of Germany. namely: Is GTZ.Certainly. then it is an act jure imperii. It is necessary for us to understand what precisely are the parameters of the legal personality of GTZ. Counsel for GTZ characterizes GTZ as “the implementing agency of the Government of the Federal Republic of Germany. Yet there is an equally fundamental premise which GTZ and the OSG fail to address. The distinction lies in whether the agency is incorporated or unincorporated. The logical question is whether the foreign state is engaged in the activity in the regular course of business. However. Assuming that the characterization is correct. by conception.” Who or what consists of “the State”? For one. able to enjoy the Federal Republic’s immunity from suit? The principle of state immunity from suit. especially when it is not undertaken for gain or profit. Such an act can only be the start of the inquiry. there would be no doubt that it is a suit brought against a State. which states that “the State may not be sued without its consent. the present suit was brought against GTZ. necessary as it is to avoid “unduly vexing the peace of nations. and the only necessary inquiry is whether said State had consented to be sued. Jurisprudence is replete with examples of incorporated government agencies which were ruled not entitled to invoke immunity from suit. the doctrine is available to foreign States insofar as they are sought to be sued in the courts of the local State. owing to provisions in their charters manifesting their consent to be . whether a local state or a foreign state. or an incident thereof.” a depiction similarly adopted by the OSG. If the foreign state is not engaged regularly in a business or trade. Article XVI of the Constitution. the mere entering into a contract by a foreign state with a private party cannot be the ultimate test. If the act is in pursuit of a sovereign activity. The special law can take the form of the original charter of the incorporated government agency. the particular act or transaction must then be tested by its nature. is reflected in Section 9. it does not automatically invest GTZ with the ability to invoke State immunity from suit. Beyond dispute is the tenability of the comment points (sic) raised by GTZ and the OSG that GTZ was not performing proprietary functions notwithstanding its entry into the particular employment contracts. xxx xxx xxx State immunity from suit may be waived by general or special law. Nevertheless. Is GTZ an incorporated agency of the German government? There is some mystery surrounding that question. it had designated two entities. But that is as far as “implementing agency” could take us. Section 16 (g) of which grants the corporation the power “to sue and be sued in court.” On the other hand.” Applying the previously cited jurisprudence.” and not that of a private corporation. though he was silent on that point in his Decision.” The Labor Arbiter accepted that claim in his Order denying the Motion to Dismiss. xxx xxx xxx It is useful to note that on the part of the Philippine government. The term by itself does not supply whether GTZ is incorporated or unincorporated. Inherently. The PHIC was established under Republic Act No. private respondents were unable to adduce any evidence to substantiate their claim that GTZ was a “private corporation.” and the Labor Arbiter acted rashly in accepting such claim without explanation. GTZ controverts that finding. private respondents argue in their Comment that the finding that GTZ was a private corporation “was never controverted. an agent acts in behalf of a principal. however. whether it has juridical personality independent of the German government or none at all. whether it is owned by the German state or by private interests.” In its Reply. xxx xxx xxx . 7875.” There is no doubt that the 1991 Agreement designated GTZ as the “implementing agency” in behalf of the German government. Yet the catch is that such term has no precise definition that is responsive to our concerns. PHIC would not enjoy immunity from suit even in the performance of its functions connected with SHINE. as the implementing agencies in behalf of the Philippines. and is therefore deemed admitted. But neither has GTZ supplied any evidence defining its legal nature beyond that of the bare descriptive “implementing agency. saying that it is a matter of public knowledge that the status of petitioner GTZ is that of the “implementing agency. private respondents asserted before the Labor Arbiter that GTZ was “a private corporation engaged in the implementation of development projects. Neither GTZ nor the OSG go beyond the claim that petitioner is “the implementing agency of the Government of the Federal Republic of Germany. In truth. the Department of Health and the Philippine Health Insurance Corporation (PHIC).sued. (sic) governmental in nature as (sic) they may be. and the GTZ can be said to act in behalf of the German state. it has not consented to be sued despite it being owned by the Federal Republic of Germany. Its designation as the Primary Contractor does not automatically grant it immunity. We adhere to the rule that in the absence of evidence to the contrary. we are uncertain of the corresponding legal implications under German law surrounding “a private company owned by the Federal Republic of Germany. [41] (Emphasis supplied.) Applying the foregoing ruling to the case at bar. just as the term “implementing agency” has no precise definition for purposes of ascertaining whether GTZ was immune from suit. foreign laws on a particular subject are presumed to be the same as those of the Philippines. this Court has no basis in fact to conclude or presume that GTZ enjoys immunity from suit. even if it contends that it performs governmental functions. in the absence of evidence to the contrary. to wit: . it is readily apparent that CNMEG cannot claim immunity from suit.Again. Thus. it failed to adduce evidence that it has not consented to be sued under Chinese law.” Yet taking the description on face value. Yet in the proceedings below and before this Court. GTZ has failed to establish that under German law. has expressly consented to be sued. As a result. ” It is entirely possible that under German law. and following the most intelligent assumption we can gather. At the very least. GTZ is akin to a governmental owned or controlled corporation without original charter which. like the Labor Arbiter and the Court of Appeals. the apparent equivalent under Philippine law is that of a corporation organized under the Corporation Code but owned by the Philippine government. CNMEG failed to present a certification from the Department of Foreign Affairs. Although CNMEG claims to be a government-owned corporation. C. or a government-owned or controlled corporation without original charter. following this Court’s ruling in Deutsche Gesellschaft. In Holy See. And it bears notice that Section 36 of the Corporate Code states that “[e]very corporation incorporated under this Code has the power and capacity x x x to sue and be sued in its corporate name. it has the capacity to sue and be sued under Section 36 of the Corporation Code.[42] this Court reiterated the oft-cited doctrine that the determination by the Executive that an entity is entitled to sovereign or diplomatic immunity is a political question conclusive upon the courts. by virtue of the Corporation Code. an entity such as GTZ or particularly GTZ itself has not been vested or has been specifically deprived the power and capacity to sue and/or be sued. CNMEG is to be presumed to be a government-owned and -controlled corporation without an original charter. National Labor Relations Commission (NLRC) . In World Health Organization v. 262 [1948]. In some cases. But how the Philippine Foreign Office conveys its endorsement to the courts varies. through the Office of Legal Affairs moved with this Court to be allowed to intervene on the side of petitioner. in Department of Foreign Affairs (DFA) v. the U. Zambales. the courts can inquire into the facts and make their own determination as to the nature of the acts and transactions involved. In the case at bench. In cases where the foreign states bypass the Foreign Office. the practice is for the foreign government or the international organization to first secure an executive endorsement of its claim of sovereign or diplomatic immunity. Calleja. the Secretary of Foreign Affairs just sent a letter directly to the Secretary of Labor and Employment. 182 SCRA 644 [1990] and companion cases).In Public International Law. 57 SCRA 1 (1974). 80 Phil. the Department of Foreign Affairs. which may be considered as conclusive upon the courts. 75 Phil. 190 SCRA 130 (1990). The Solicitor General embodied the “suggestion” in a Manifestation and Memorandum as amicus curiae. Philippine-Ryukyus Command. a “suggestion” to respondent Judge.[43] (Emphasis supplied. when a state or international agency wishes to plead sovereign or diplomatic immunity in a foreign court. In Baer v.) The question now is whether any agency of the Executive Branch can make a determination of immunity from suit.[44] emphasized the DFA’s competence and authority to provide such necessary determination.S. Tizon. to wit: . Guinto. Bradford. The Court allowed the said Department to file its memorandum in support of petitioner’s claim of sovereign immunity. United States of America v. in behalf of the Commander of the United States Naval Base at Olongapo City. 48 SCRA 242 (1972). In International Catholic Migration Commission v. informing the latter that the respondent-employer could not be sued because it enjoyed diplomatic immunity. the Secretary of Foreign Affairs sent the trial court a telegram to that effect. Embassy asked the Secretary of Foreign Affairs to request the Solicitor General to make. the defense of sovereign immunity was submitted directly to the local courts by the respondents through their private counsels (Raquiza v. Aquino . Miquiabas v. xxx xxx xxx In the Philippines. This Court. 50 [1945]. it requests the Foreign Office of the state where it is sued to convey to the court that said defendant is entitled to immunity. had GTZ obtained such certification from the DFA. Certainly. such foreign office in the Philippines being the Department of Foreign Affairs. at the very least.” The requirement might not necessarily be imperative. this task falls principally of (sic) the DFA as being the highest executive department with the competence and authority to so act in this aspect of the international arena. noted that it was imperative for petitioners to secure from the Department of Foreign Affairs “a certification of respondents’ diplomatic status and entitlement to diplomatic privileges including immunity from suits. It may be possible that GTZ tried. it would have been highly prudential for GTZ to obtain the same after the Labor Arbiter had denied the motion to dismiss.[45] (Emphasis supplied. However. the determination of persons and institutions covered by diplomatic immunities. When international agreements are concluded. it would have provided factual basis for its claim of immunity that would. We do not see why GTZ could not have secured such certification or endorsement from the DFA for purposes of this case . when challenge. due to the same concerns that we have discussed herein. establish a disputable evidentiary presumption that the foreign party is indeed immune which the opposing party will have to overcome with its own factual evidence. In our country. the office of the executive branch in charge of our diplomatic relations.The DFA’s function includes. Nowhere in the Comment of the OSG is it manifested that the DFA has endorsed . the fact that this authority is exclusive to the DFA was also emphasized in this Court’s ruling in Deutsche Gesellschaft: It is to be recalled that the Labor Arbiter. Still. we do not see any evidence that the DFA. even at this juncture. the parties thereto are deemed to have likewise accepted the responsibility of seeing to it that their agreements are duly regarded. in both of his rulings. a determination which.) Further. (sic) entitles it to seek relief from the court so as not to seriously impair the conduct of the country's foreign relations. but failed to secure such certification. The DFA must be allowed to plead its case whenever necessary or advisable to enable it to help keep the credibility of the Philippine government before the international community. Would the fact that the Solicitor General has endorsed GTZ’s claim of State’s immunity from suit before this Court sufficiently substitute for the DFA certification? Note that the rule in public international law quoted in Holy See referred to endorsement by the Foreign Office of the State where the suit is filed. has indeed endorsed GTZ’s claim of immunity. among its other mandates. which must be respected by the courts. D. the agreement to submit disputes to arbitration in a foreign country is construed as an implicit waiver of immunity from suit.[48] which is an integral part of the Contract Agreement.[46] (Emphasis supplied. or that the OSG had solicited the DFA’s views on the issue. there is reason to apply the legal reasoning behind the waiver in this case. . However. In the United States.) In the case at bar. The arguments raised by the OSG are virtually the same as the arguments raised by GTZ without any indication of any special and distinct perspective maintained by the Philippine government on the issue. as expressly enunciated in Deutsche Gesellschaft. CNMEG also claims that its immunity from suit has the executive endorsement of both the OSG and the Office of the Government Corporate Counsel (OGCC). or by the OGCC for that matter. does not inspire the same degree of confidence as a DFA certification. In the said law. however. The Conditions of Contract.GTZ’s claim. this determination by the OSG. Although there is no similar law in the Philippines. this is not the kind of certification that can establish CNMEG’s entitlement to immunity from suit. it must be remembered that this Court is not precluded from making an inquiry into the intrinsic correctness of such certification. [49] states: 33. the Foreign Sovereign Immunities Act of 1976 provides for a waiver by implication of state immunity. An agreement to submit any dispute to arbitration may be construed as an implicit waiver of immunity from suit.” Further.1. stating that the Northrail Project is in pursuit of a sovereign activity. [47] Surely. The Comment filed by the OSG does not inspire the same degree of confidence as a certification from the DFA would have elicited . CNMEG offers the Certification executed by the Economic and Commercial Office of the Embassy of the People’s Republic of China. Amicable Settlement Both parties shall attempt to amicably settle all disputes or controversies arising from this Contract before the commencement of arbitration. SETTLEMENT OF DISPUTES AND ARBITRATION 33. as Holy See unequivocally refers to the determination of the “Foreign Office of the state where it is sued. Even with a DFA certification. Thus.33.3 of the Special Rules. this Court held that an executive agreement is similar to a treaty. where any of those individuals resides. and (c) deals with a narrower range of subject matters. [50] . Under the above provisions. Arbitration All disputes or controversies arising from this Contract which cannot be settled between the Employer and the Contractor shall be submitted to arbitration in accordance with the UNCITRAL Arbitration Rules at present in force and as may be amended by the rest of this Clause. In Bayan Muna v. except that the former (a) does not require legislative concurrence. (b) where the acts to be enjoined are being performed.2.2 and 13. both parties are bound to submit the matter to the HKIAC for arbitration. or (e) in the National Capital Judicial Region. Rule 13 thereof provides for the Recognition and Enforcement of a Foreign Arbitral Award. if any dispute arises between Northrail and CNMEG. Under Rules 13. its enforcement in the Philippines would be subject to the Special Rules on Alternative Dispute Resolution (Special Rules). the courts have the competence and jurisdiction to ascertain the validity of the Contract Agreement. whether embodied in a single instrument or in two or more related instruments and whatever its particular designation. From all the foregoing. (b) is usually less formal. Second issue: Whether the Contract Agreement is an executive agreement Article 2(1) of the Vienna Convention on the Law of Treaties (Vienna Convention) defines a treaty as follows: [A]n international agreement concluded between States in written form and governed by international law. it is clear that CNMEG has agreed that it will not be afforded immunity from suit. (d) if any of the parties is an individual. In case the HKIAC makes an arbitral award in favor of Northrail. the party to arbitration wishing to have an arbitral award recognized and enforced in the Philippines must petition the proper regional trial court (a) where the assets to be attached or levied upon is located. The appointing authority shall be Hong Kong International Arbitration Center. (c) in the principal place of business in the Philippines of any of the parties. Romulo. The place of arbitration shall be in Hong Kong at Hong Kong International Arbitration Center (HKIAC). 1 of the Contract Agreement is an integral part of the latter. Since the Contract Agreement explicitly provides that Philippine law shall be applicable. but between Northrail and CNMEG. both Northrail and CNMEG entered into the Contract Agreement as entities with personalities distinct and separate from the Philippine and Chinese governments. That label was only descriptive of its nature as a state-owned corporation. the parties have effectively conceded that their rights and obligations thereunder are not governed by .[54] which under Article 1. the fact that Amb. As previously discussed. The Contract Agreement was not concluded between the Philippines and China. The Contract Agreement is to be governed by Philippine law. CNMEG is neither a government nor a government agency. B.Despite these differences. A. in his letter dated 1 October 2003. Wang. Article 2 of the Conditions of Contract. Neither can it be said that CNMEG acted as agent of the Chinese government. states: APPLICABLE LAW AND GOVERNING LANGUAGE The contract shall in all respects be read and construed in accordance with the laws of the Philippines.[51] By the terms of the Contract Agreement. The first and the third requisites do not obtain in the case at bar. and (c) it must governed by international law. and did not preclude it from engaging in purely commercial or proprietary ventures. Northrail is a government-owned or -controlled corporation. [53] described CNMEG as a “state corporation” and declared its designation as the Primary Contractor in the Northrail Project did not mean it was to perform sovereign functions on behalf of China. to be considered an executive agreement. (b) it must be written. The contract shall be written in English language. while CNMEG is a corporation duly organized and created under the laws of the People’s Republic of China. the following three requisites provided under the Vienna Convention must nevertheless concur: (a) the agreement must be between states. respectively. All correspondence and other documents pertaining to the Contract which are exchanged by the parties shall be written in English language. [52] Thus. I. I. pp. 737. rollo. No. 26. Vol. Vol. rollo. I. rollo. 25. rollo. I. rollo. [5] Memorandum of Understanding dated 30 August 2003. 311-312. [24] G. at 231-232. 413. 648-658. Petitioner China National Machinery & Equipment Corp. [7] Contract Agreement. WHEREFORE. SO ORDERED. CNMEG’s prayer for the issuance of a TRO and/or Writ of Preliminary Injunction is DENIED for being moot and academic. Vol. Vol. [11] Complaint. rollo. rollo. 239 SCRA 224. rollo. Vol. pp. pp. 407-409. Vol. Cesar D. [6] Petition. [16] Omnibus Order dated 15 May 2007. No. 292-307 [15] Motion to Dismiss.R. 1 December 1994. rollo. I. p. rollo. p. the instant Petition is DENIED. Vol. Vol. [10] Id. This case is REMANDED to the Regional Trial Court of Makati. 324-369. 15 December 1994. 101949. rollo. No pronouncement on costs of suit. 108813. I. at 184. pp. [27] 221 Phil. [3] Petition. pp. Vol. pp. pp. I. [19] Petition for Certiorari. I. pp. 738-792.R. I. [4] Id. 412-414. pp. Vol. Vol. [13] Order dated 17 March 2006. Vol. [20] CA Decision. [12] Id. 290-291. Vol. I. Vol. I. 308-310. Vol. 179 (1985). pp. [26] Id. I. Vol. rollo. pp. [21] Motion for Reconsideration. 100-102. pp. 06-203. 27-28. Letter dated 1 October 2003.international law. pp. Santamaria. rollo. 25-26. rollo. rollo. . [14] Urgent Motion for Reconsideration. 126-130. Vol. [25] G. Vol. [8] Memorandum of Agreement dated December 2003. [17] Motion for Reconsideration. Vol. [22] CA Resolution. Memorandum of Understanding dated 14 September 2002. pp. Petition. I. and the Contract Agreement is not an executive agreement. I. Vol. 198-201. 971-1001. 238 SCRA 524. [9] Loan Agreement. 127. I. for further proceedings as regards the validity of the contracts subject of Civil Case No. [1] [2] China National Machinery & Equipment Corporation (Group) v. rollo. rollo. 102-125. pp. rollo. rollo. 663-695. rollo. I. Vol. [18] Order dated 10 March 2008. I. I. Memorandum of Understanding dated 30 August 2003. p. 81-99. pp. It is merely an ordinary commercial contract that can be questioned before the local courts. I. pp. pp. 400-406. I. I. Vol. et al. rollo. I. rollo. pp. Vol. [29] Contract Agreement. [23] Petition. It is therefore clear from the foregoing reasons that the Contract Agreement does not partake of the nature of an executive agreement. I. 308-310. rollo. 407-409. Branch 145. Hon. 242-282. pp. (Group) is not entitled to immunity from suit. 535. [28] Id. Supra note 6. 17.R.[30] [31] [32] [33] [34] [35] [36] [37] [38] [39] [40] [41] [42] [43] [44] [45] [46] [47] [48] [49] Supra note 2. Liang v. . 16 April 2009. Petition. Id. Vol. 330 Phil 573 (1996). Supra note 6. 152318. January 28. 30. No. 415-455. Vol. at 531-533. 323 SCRA 692 (2000) 355 SCRA 125 (2001) {Read Separate Opinion of Justice Puno} [ G. if any to the Contract documents agreed by the Parties Conditions of Contract Technical Documents Preliminary Engineering Design including Bill of Quantities Technical Specification [50] [51] [52] [53] [54] G.R. 47. PEOPLE OF THE PHILIPPINES. 222 Phil 381. Supra note 40. rollo. No. and each shall be read and construed as an integral part of the Contract: (1) (2) (3) (4) (5) (6) Contract Agreement Amendments. rollo. Conditions of Contract. 258-259. 125865. 2000 ] JEFFREY LIANG (HUEFENG). Petition. at 165-173. PETITIONER. 585 SCRA 150. Supra note 9. Supra note 6. I. Supra note 24. 641 SCRA 244. I. 202-241. pp. Id. Id. People. p. G. at 174-175.1 of the Contract Agreement provides: The following documents shall constitute the Contract between the Employer and the Contractor. Vol. Supra note 8. rollo. at 400-402.R. Id. p. 1 February 2011. Supra note 48. VS. Supra note 7. 384 (1985). RESPONDENT. I. Supra note 9. No. at 587-588. 159618. Clause 1. Supra note 7. Supra note 2. at 268-269. Id. at 260-261. for allegedly uttering defamatory words against fellow ADB worker Joyce Cabal. he was charged before the Metropolitan Trial Court (MeTC) of Mandaluyong City with two counts of grave oral defamation docketed as Criminal Cases Nos. Second. The needed inquiry in what capacity petitioner was acting at the time of the alleged utterances requires for its resolution evidentiary basis that has yet to be presented at the proper time. the prosecution filed a petition for certiorari and mandamus with the Regional Trial Court (RTC) of Pasig City which set aside the MeTC rulings and ordered the latter court to enforce the warrant of arrest it earlier issued. the MeTC judge received an "office of protocol" from the Department of Foreign Affairs (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 (hereinafter Agreement) in the country. In receiving exparte the DFA’s advice and in motu proprio dismissing the two criminal cases without notice to the prosecution. The latter filed a motion for reconsideration which was opposed by the DFA. First.00 per criminal charge. under Section 45 of the Agreement which provides: "Officers and staff of the Bank including for the purpose of this Article experts and consultants performing missions for the Bank shall enjoy the following privileges and immunities: .Petitioner is an economist working with the Asian Development Bank (ADB). After the motion for reconsideration was denied. It should be noted that due process is a right of the accused as much as it is of the prosecution. 53170 and 53171. The DFA’s determination that a certain person is covered by immunity is only preliminary which has no binding effect in courts. Sometime in 1994. The next day. When its motion was denied. After fixing petitioner’s bail at P2. petitioner elevated the case to this Court 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 cases were The petition is not impressed with merit. [1] At any rate. the MeTC judge without notice to the prosecution dismissed the two criminal cases. Petitioner was arrested by virtue of a warrant issued by the MeTC. Based on the said protocol communication that petitioner is immune from suit.400. the MeTC released him to the custody of the Security Officer of ADB. it has been ruled that the mere invocation of the immunity clause does not ipso facto result in the dropping of the charges. [2] filed in court. courts cannot blindly adhere and take on its face the communication from the DFA that petitioner is covered by any immunity. the latter’s right to due process was violated. enjoys immunity from criminal jurisdiction of the receiving state except in the case of an action relating to any professional or commercial activity exercised by the diplomatic agent in the receiving state outside his official functions. 1 (c). [4] It appears that even the government’s chief legal counsel. Veterans Affairs Office. the prosecution should have been given the chance to rebut the DFA protocol and it must be accorded the opportunity to present its controverting evidence. Bartolome. on the contention that there was no preliminary investigation conducted. suffice it to say that preliminary investigation is not a matter of right in cases cognizable by the MeTC such as the one at bar.[6] Being purely a statutory right. Sandiganbayan. assuming petitioner is such. 209 SCRA 357. 182 SCRA 644 (1990) Chavez v. See also Minucher v. the commission of a crime is not part of official duty. under the Vienna Convention on Diplomatic Relations. the absence of preliminary investigation does not affect the court’s jurisdiction nor does it impair the validity of the information or otherwise render it defective. [2] [1] . Phil." It is therefore necessary to determine if petitioner’s case falls within the ambit of Section 45(a). Rarang. the petition is DENIED. should it so desire. Finally. Dumlao v. 368 (1992) [4] Shauf v. Jr.[3] The imputation of theft is ultra vires and cannot be part of official functions. Thus. a diplomatic agent. slandering a person could not possibly be covered by the immunity agreement because our laws do not allow the commission of a crime. Guinto. Fourth. 38 SCRA 324 (1971) [8] Section 1. [7] The rule on criminal procedure is clear that no preliminary investigation is required in cases falling within the jurisdiction of the MeTC. [5] As already mentioned above. Rules of Criminal Procedure. Animos v. CA. [8] Besides. 193 SCRA 282 (1991) [3] M. such as defamation. v. does not support the stand taken by petitioner and that of the DFA. It is well-settled principle of law that a public official may be liable in his personal private capacity for whatever damage he may have caused by his act done with malice or in bad faith or beyond the scope of his authority or jurisdiction. in the name of official duty. the Solicitor General. See United States v.H. CA.a. 174 SCRA 214 (1989). preliminary investigation may be invoked only when specifically granted by law. Wylie v. but subject to the exception that the act was done in "official capacity. 270 SCRA 645 (1997) [7] People v. Third. 114 SCRA 247 (1982) [5] Section 31. 214 SCRA 242 (1992) [6] See Del Rosario." the immunity mentioned therein is not absolute. SO ORDERED. CA.[9] WHEREFORE.) immunity from legal process with respect to acts performed by them in their official capacity except when the Bank waives the immunity. Rule 112. 191 SCRA 713 (1990). Abejuela. we held that the immunity cannot cover the commission of a crime such as slander or oral defamation in the name of official duty. RESPONDENT. the Regional Trial Court of Pasig City. THE SLANDERING OF A PERSON WHICH PREJUDGED PETITIONER'S CASE BEFORE THE METROPOLITAN TRIAL COURT (MTC)-MANDALUYONG. PETITIONER. We ruled.3)THE IMMUNITY EXTENDS TO ALL STAFF OF THE ASIAN DEVELOPMENT BANK (ADB). a Chinese national who was employed as an Economist by the Asian Development Bank (ADB).5)THE DECISION OF JANUARY 28. NAMELY. The Motion is anchored on the following arguments: 1)THE DFA'S DETERMINATION OF IMMUNITY IS A POLITICAL QUESTION TO BE MADE BY THE EXECUTIVE BRANCH OF THE GOVERNMENT AND IS CONCLUSIVE UPON THE COURTS. This Court also granted the Motion for Intervention of the Department of Foreign Affairs. 2000. On January 28. denying the petition for review.[9] People v. 1 SCRA 478 (1961) [ G. it is limited to acts performed in an official capacity. No. 2000. 1994. Branch 160. in essence. alleging that on separate occasions on January 28 and January 31. Cabal. the Metropolitan Trial Court of Mandaluyong City. This resolves petitioner's Motion for Reconsideration of our Decision dated January 28. VS. Gomez.R.2)THE IMMUNITY OF INTERNATIONAL ORGANIZATIONS IS ABSOLUTE. 2000 ERRONEOUSLY MADE A FINDING OF FACT ON THE MERITS. acting pursuant to an advice from the Department of Foreign Affairs that petitioner enjoyed immunity from legal processes. 2001 ] JEFFREY LIANG (HUEFENG).4)DUE PROCESS WAS FULLY AFFORDED THE COMPLAINANT TO REBUT THE DFA PROTOCOL.6)THE APPLICABLE TO THIS CASE. the oral arguments of the parties were heard. brought a petition for review with this Court. On a petition for certiorari and mandamus filed by the People. Furthermore. petitioner allegedly uttered defamatory words to Joyce V. This case has its origin in two criminal Informations [1] for grave oral defamation filed against petitioner. Thereafter. On April 13. we rendered the assailed Decision denying the petition for review. Casiano. that the immunity granted to officers and staff of the ADB is not absolute. 1994. annulled and set aside the order of the Metropolitan Trial Court dismissing the criminal cases. [2] VIENNA CONVENTION ON DIPLOMATIC RELATIONS IS NOT Petitioner. On October 18. thus. 2000. PEOPLE OF THE PHILIPPINES. 125865. a member of the clerical staff of ADB. March 26. dismissed the criminal Informations against him. the parties . People v. 117 SCRA 72 (1982). Petitioner argues that the Decision had the effect of prejudging the criminal case for oral defamation against him. shall enjoy the following privileges and immunities: (a) Immunity from legal process with respect to acts performed by them in their official capacity except when the Bank waives the immunity.were directed to submit their respective memorandum. Branch 60. rather. J. Ma.. in general. presided by Hon. cannot be considered as an act performed in an official capacity. The issue of whether or not petitioner's utterances constituted oral defamation is still for the trial court to determine. presided by Hon.Padilla. and Pardo. SO ORDERED. the Motions for Reconsideration filed by petitioner and intervenor Department of Foreign Affairs are DENIED with FINALITY. 2000. We wish to stress that it did not. concur. C. WHEREFORE. boils down to whether or not the statements allegedly made by petitioner were uttered while in the performance of his official functions. Pls. from legal and judicial processes in the Philippines. in view of the foregoing. Jr. JJ.J. in order for this case to fall squarely under the provisions of Section 45 (a) of the "Agreement Between the Asian Development Bank and the Government of the Republic of the Philippines Regarding the Headquarters of the Asian Development Bank. It should be made clear that nowhere in the assailed Decision is diplomatic immunity denied. by any stretch. As we have stated therein. even remotely. including for the purpose of this Article experts and consultants performing missions for the Bank. the slander of a person. The issue in this case. What we merely stated therein is that slander. its officials and staff. join the concurring opinion of Mr. 53170 & 53171 of the Metropolitan Trial Court of Mandaluyong City. See concurring opinion. Justice Puno. 743 of the Regional Trial Court of Pasig City. [2] SCA Case No. Puno." to wit: Officers ands staff of the Bank.. Kapunan. petitioner's Motion for Reconsideration deals with the diplomatic immunity of the ADB. cannot be considered as falling within the purview of the immunity granted to ADB officers and personnel.. Davide. [1] Criminal Cases Nos.. we find no cogent reason to disturb our Decision of January 28. After a careful deliberation of the arguments raised in petitioner's and intervenor's Motions for Reconsideration. For the most part. as well as the constitutional and political bases thereof. Branch 160. Luisa Quijano. . Mariano M. The DFA's determination of immunity is a political question to be made by the executive branch of the government and is conclusive upon the courts. and that a preliminary investigation is not a matter of right in cases cognizable by the Metropolitan Trial Court. The Vienna Convention on diplomatic relations is not applicable to this case. The immunity extends to all staff of the Asian Development Bank (ADB). namely. petitioner cites the following cases: WHO vs. Petitioner contends that a determination of a person's diplomatic immunity by the Department of Foreign Affairs is a political question. . and 6. Due process was fully accorded the complainant to rebut the DFA protocol. In support of his submission. The decision of January 28. 5. 3. The immunity of international organizations is absolute. 2. it is not covered by the immunity agreement.: For resolution is the Motion for Reconsideration filed by petitioner Jeffrey Liang of this Court's decision dated January 28. We there held that: the protocol communication of the Department of Foreign Affairs to the effect that petitioner Liang is covered by immunity is only preliminary and has no binding effect in courts.[2] The Holy See vs. the commission of a crime is not part of official duty. 2000 erroneously made a finding of fact on the merits. Petitioner's motion for reconsideration is anchored on the following arguments: 1. Rosario.[1] International Catholic Migration Commission vs. Aquino. a diplomatic agent. hence. Calleja. enjoys immunity from criminal jurisdiction of the receiving state except in the case of an action relating to any professional or commercial activity exercised by the diplomatic agent in the receiving state outside his official functions. United Nations. It is solely within the prerogative of the executive department and is conclusive upon the courts. Jr. 4. CONCURRING OPINION PUNO. assuming petitioner is such.[3] Lasco vs. the immunity provided for under Section 45(a) of the Headquarters Agreement is subject to the condition that the act be done in an "official capacity". that slandering a person cannot be said to have been done in an "official capacity" and. [4] and DFA vs. under the Vienna Convention on Diplomatic Relations. . the slandering of a person which prejudged petitioner's case before the Metropolitan Trial Court (MTC)-Mandaluyong. 2000 which denied the petition for review. Umali. J. Thus.NLRC. The exception allegedly has no application to the case at bar. The only exceptions to this immunity is when there is an implied or express waiver or when the immunity is expressly limited by statute. issues of interpretation or application of the agreement." Section 51 allows for consultation between the government and the Bank should the government consider that an abuse has occurred. such immunity would impede the course of justice and the waiver would not prejudice the purposes for which the immunities are accorded. Petitioner's argument that a determination by the Department of Foreign Affairs that he is entitled to diplomatic immunity is a political question binding on the courts. is anchored on the ruling enunciated in the case of WHO. the Solicitor General in this case.. among others.[6] viz: "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. et al. vs. Aquino. in its opinion. 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. as to embarrass the executive arm of the government in conducting foreign relations. in adherence to the settled principle that courts may not so exercise their jurisdiction by seizure and detention of property. It is necessary to allow such organizations to discharge their entrusted functions effectively. or other officer acting under his direction. It is designed to safeguard the autonomy and independence of international organizations against interference from any authority external to the organizations. It asserts that the Headquarters Agreement provides for remedies to check abuses against the exercise of the immunity. it is accepted doctrine that in such cases the judicial department of the government follows the action of the political branch and will not embarrass the latter by assuming an antagonistic jurisdiction. Section 49 states that the "Bank shall waive the immunity accorded to any person if. et al. and where the plea of diplomatic immunity is recognized and affirmed by the executive branch of the government as in the case at bar." . The same section provides the mechanism for a dispute settlement regarding. Hence.[5] It is further contended that the immunity conferred under the ADB Charter and the Headquarters Agreement is absolute. Petitioner likewise urges that the international organization's immunity from local jurisdiction empowers the ADB alone to determine what constitutes "official acts" and the same cannot be subject to different interpretations by the member states . as represented by the Papal Nuncio. NLRC involved an illegal dismissal case filed against the Asian Development Bank. an official of the WHO. ICMC and IRRI were declared to possess diplomatic immunity. United Nations. The Court upheld the petitioner's defense of sovereign immunity. ICMC vs. Calleja . which the envoy holds on behalf of the sending state for the purposes of the mission. Finally. which in that case is the Holy See. involved an action for annulment of sale of land against the Holy See. with all the more reason should immunity be recognized as regards the sovereign itself. Verstyft was certified to be entitled to diplomatic immunity pursuant to the Host Agreement executed between the Philippines and the WHO.[10] The case of WHO vs. Jr. UN. Calleja concerned a petition for certification election filed against ICMC and IRRI.[7] The Holy See vs. The Court again upheld the doctrine of diplomatic immunity invoked by the Fund. which is to shield the affairs of international organizations from political pressure or control by the host country and to ensure the unhampered performance of their functions. In Lasco vs. It ruled that where a diplomatic envoy is granted immunity from the civil and administrative jurisdiction of the receiving state over any real action relating to private immovable property situated in the territory of the receiving state.[8] Lasco vs. It was ruled that the exercise of jurisdiction by the Department of Labor over the case would defeat the very purpose of immunity. Jr. It bears to stress that all of these cases pertain to the diplomatic immunity enjoyed by international organizations. the United Nations Revolving Fund for Natural Resources Exploration was sued before the NLRC for illegal dismissal. Petitioner asserts that he is entitled to the same diplomatic immunity and he cannot be prosecuted for acts allegedly done in the exercise of his official functions. DFA v. .This ruling was reiterated in the subsequent cases of International Catholic Migration Commission vs. As international organizations. Pursuant to its Charter and the Headquarters Agreement. Aquino involved the search and seizure of personal effects of petitioner Leonce Verstuyft. Rosario. In Holy See v. Rosario. the diplomatic immunity of the Asian Development Bank was recognized by the Court. NLRC.[9] and DFA vs. It was held that they are not subject to local jurisdictions. such organizations are endowed with some degree of international legal personality such that they are capable of exercising specific rights. meteorology. [13] Issues 1. atomic energy. Whether the authority to determine if an act is official or private is lodged in the courts. They are organized mainly as a means for conducting general international business in which the member states have an interest. 3. on the basis of an international treaty constituting a particular international community. Whether an international official is immune from criminal jurisdiction for all acts. railways. is entitled to diplomatic immunity 2. Discussion I A perusal of the immunities provisions in various international conventions and agreements will show that the nature and degree of immunities vary depending on who the recipient is. functions in the interest of this particular international community. canals. civil aviation. Whether petitioner Liang." [11] International public officials have been defined as: "x x x persons who. as an official of an international organization. Thus: . Whether the certification by the Department of Foreign Affairs that petitioner is covered by immunity is a political question that is binding and conclusive on the courts. 4. telecommunications."is generally used to describe an organization set up by agreement between two or more states. finance. trade. duties and powers. such as posts. or by an organ of it. are appointed by this international community. education and culture. and who are subject to a particular personal status. sea transport. and are under its control to exercise. Under contemporary international law. rivers."[12] "Specialized agencies" are international organizations having functions in particular fields. whether private or official. in a continuous way.The term "international organizations" . health and refugees. the Secretary- . immunity from legal process of every kind. Convention on the Privileges and Immunities of the United Nations "Section 2: The United Nations. shall enjoy immunity from every form of legal process except insofar as in any particular case it has expressly waived its immunity." 2. xxx Section 14: Privileges and immunities are accorded to the representatives of Members not for the personal benefit of the individuals themselves. It is. Consequently. xxx Section 19: In addition to the immunities and privileges specified in Section 18. Article 105(2): Representatives of the Members of the United Nations and officials of the Organization shall similarly enjoy such privileges and immunities as are necessary for the independent exercise of their functions in connection with the Organization. Charter of the United Nations "Article 105 (1): The Organization shall enjoy in the territory of each of its Members such privileges and immunities as are necessary for the fulfillment of its purposes. in respect of words spoken or written and all acts done by them in their capacity as representatives. and. but in order to safeguard the independent exercise of their functions in connection with the United Nations. and it can be waived without prejudice to the purpose for which the immunity is accorded. its property and assets wherever located and by whomsoever held. a Member not only has the right but is under a duty to waive the immunity of its representative in any case where in the opinion of the Member the immunity would impede the course of justice.1. xxx Section 11 (a): Representatives of Members to the principal and subsidiary organs of the United Nations x x shall x x x enjoy x x x immunity from personal arrest or detention and from seizure of their personal baggage. understood that no waiver of immunity shall extend to any measure of execution. xxx Section 18 (a): Officials of the United Nations shall be immune from legal process in respect of words spoken or written and all acts performed by them in their official capacity. however. Vienna Convention on Consular Relations "Article 41(1): Consular officials shall not be liable to arrest or detention pending trial. the privileges and immunities. The receiving State shall treat him with due respect and shall take all appropriate steps to prevent any attack on his person. in his opinion. ." 4. xxx Article 38 (1): Except in so far as additional privileges and immunities may be granted by the receiving State. freedom. or dignity. exemptions and facilities accorded to diplomatic envoys.General and all Assistant Secretaries-General shall be accorded in respect of themselves. He shall also enjoy immunity from its civil and administrative jurisdiction. He shall not be liable to any form of arrest or detention. xxx Article 31(1): A diplomatic agent shall enjoy immunity from the criminal jurisdiction of the receiving State. in respect of official acts performed in the exercise of his functions. in accordance with international law. immunity from legal process of every kind. their spouses and minor children. The Secretary-General shall have the right and the duty to waive the immunity of any official in any case where. Vienna Convention on Diplomatic Relations "Article 29: The person of a diplomatic agent shall be inviolable." 3. Section 20: Privileges and immunities are granted to officials in the interest of the United Nations and not for the personal benefit of the individuals themselves. xxx Section 22: Experts x x x performing missions for the United Nations x x x shall be accorded: (a) immunity from personal arrest or detention and from seizure of their personal baggage. a diplomatic agent who is a national of or permanently a resident in that State shall enjoy only immunity from jurisdiction. and inviolability. except in the case of a grave crime and pursuant to a decision by the competent judicial authority. the immunity would impede the course of justice and can be waived without prejudice to the interests of the United Nations. (b) in respect of words spoken or written and acts done by them in the course of the performance of their mission. except in certain cases. including any official acting on his behalf during his absence from duty. apply in respect of a civil action either: (a) arising out of a contract concluded by a consular officer or a consular employee in which he did not contract expressly or impliedly as an agent of the sending State. and in respect of words spoken or written and all acts done by them in their official capacity. the executive head of each specialized agency." 5. Section 13(a): Representatives of members at meetings convened by a specialized agency shall. however. xxx Section 21: In addition to the immunities and privileges specified in sections 19 and 20. or (b) by a third party for damage arising from an accident in the receiving State caused by a vehicle. vessel or aircraft. while exercising their functions and during their journeys to and from the place of meeting. xxx Section 19(a): Officials of the specialized agencies shall be immune from legal process in respect of words spoken or written and all acts performed by them in their official capacity." 6. however.xxx Article 43(1): Consular officers and consular employees shall not be amenable to the jurisdiction of the judicial or administrative authorities of the receiving State in respect of acts performed in the exercise of consular functions. Convention on the Privileges and Immunities of the Specialized Agencies "Section 4: The specialized agencies. enjoy immunity from personal arrest or detention and from seizure of their personal baggage. his spouse and minor children. the privileges and immunities. understood that no waiver of immunity shall extend to any measure of execution. in accordance with international law. wherever located and by whomsoever held. Article 43(2): The provisions of paragraph 1 of this Article shall not. shall enjoy immunity from every form of legal process except in so far as in any particular case they have expressly waived their immunity. Charter of the ADB . shall be accorded in respect of himself. It is. immunity from legal process of every kind. their property and assets. exemptions and facilities accorded to diplomatic envoys. in which cases actions may be brought against the Bank in a court of competent jurisdiction in the Republic of the Philippines. to guarantee obligations. or to buy and sell or underwrite the sale of securities. Section 45(a): Officers and staff of the Bank. to guarantee obligations. officers and employees of the Bank. subject to corresponding conditions and obligations. Directors. shall enjoy x x x immunity from legal process with respect to acts performed by them in their official capacity. including experts performing missions for the Bank shall be immune from legal process with respect to acts performed by them in their official capacity. the President. except when the Bank waives the immunity. exemptions. during their stay in the Republic of the Philippines in connection with their official duties with the Bank: (a) immunity from personal arrest or detention and from seizure of their personal baggage. or to buy and sell or underwrite the sale of securities. or has appointed an agent for the purpose of accepting service or notice of process. except in cases arising out of or in connection with the exercise of its powers to borrow money."Article 50(1): The Bank shall enjoy immunity from every form of legal process. and (c) in respect of other matters not covered in (a) and (b) above. other representatives of Members. (b) immunity from legal process of every kind in respect of words spoken or written and all acts done by them in their official capacity. alternates. except when the Bank waives the immunity. such other immunities. in which cases actions may be brought against the Bank in a court of competent jurisdiction in the territory of a country in which the Bank has its principal or a branch office. xxx Section 44: Governors. except in cases arising out of or in connection with the exercise of its powers to borrow money. ADB Headquarters Agreement "Section 5: The Bank shall enjoy immunity from every form of legal process. xxx Article 55(i): All Governors. Directors. privileges and facilities as are enjoyed by members of diplomatic missions of comparable rank. Vice-President and executive officers as may be agreed upon between the Government and the Bank shall enjoy." 7. or has issued or guaranteed securities. including for the purposes of this Article experts and consultants performing missions for the Bank." II . Thirdly. as was the case in the Hague Conventions of 1899 and 1907. one of the recognized limitations of diplomatic immunity is that members of the diplomatic staff of a mission may be appointed from among the nationals of the receiving State only with the express consent of that State. namely: (1) that international institutions should have a status which protects them against control or interference by any one government in the performance of functions for the effective discharge of which they are responsible to democratically constituted international bodies in which all the nations concerned are represented. The first is by simple conventional stipulation. The second is by internal legislation whereby the government of a state. International immunities may be specially important in relation to the State of which the official is a national. It is not concerned with the status. dignity or privileges of individuals. and (3) that the international organization should. [15] III Positive international law has devised three methods of granting privileges and immunities to the personnel of international organizations . the effective sanctions which secure respect for diplomatic immunity are the principle of reciprocity and the danger of retaliation by the aggrieved State. apart from inviolability and immunity from jurisdiction in respect of official acts performed in the exercise of their functions. the immunity of a diplomatic agent from the jurisdiction of the receiving State does not exempt him from the jurisdiction of the sending State. upon whose territory the international organization is to carry out its functions. international immunities enjoy no similar protection. as a collectivity of States Members. [14] The generally accepted principles which are now regarded as the foundation of international immunities are contained in the ILO Memorandum. by unilateral measures. in the case of international immunities there is no sending State and an equivalent for the jurisdiction of the Sending State therefore has to be found either in waiver of immunity or in some international disciplinary or judicial procedure. but with the elements of functional independence necessary to free international institutions from national control and to enable them to discharge their responsibilities impartially on behalf of all their members. which reduced them in three basic propositions. certain privileges and immunities to better assure the . recognizes the international character of the organization and grants. Secondly. be accorded the facilities for the conduct of its official business customarily extended to each other by its individual member States. nationals enjoy only such privileges and immunities as may be granted by the receiving State. The thinking underlying these propositions is essentially institutional in character. (2) that no country should derive any financial advantage by levying fiscal charges on common international funds.There are three major differences between diplomatic and international immunities Firstly. They are appointed or elected to . [17] The privileges and immunities of diplomats and those of international officials rest upon different legal foundations. the legal relationship between an ambassador and the state to which he is accredited is entirely different from the relationship between the international official and those states upon whose territory he might carry out his functions. In this third method. Such an obligation can only result from specific treaty provisions. by contractual provisions. This connection is purely historical. The specific definition and application of those general terms are determined by an accord between the organization itself and the state wherein it is located. one finds a conventional obligation to recognize a certain status of an international organization and its personnel. Customary international law places no obligation on a state to recognize a special status of an international official or to grant him jurisdictional immunities. Both types of officials find the basis of their special status in the necessity of retaining functional independence and freedom from interference by the state of residence. treaty obligation for the state in question to grant concessions is lacking.successful functioning of the organization and its personnel. but the status is described in broad and general terms. The connection consists in the granting. This is the case with the League of Nations. Such was the case with the Central Commission of the Rhine at Strasbourg and the International Institute of Agriculture at Rome. The juridical basis of the diplomat's position is firmly established in customary international law. Whereas those immunities awarded to diplomatic agents are a right of the sending stated based on customary international law.the international officials assume a different position as regards their special status . the Permanent Court of Justice.[16] The Asian Development Bank and its Personnel fall under this third category. However. The third is a combination of the first two. There is connection between diplomatic privileges and immunities and those extended to international officials. The diplomatic envoy is appointed by the sending State but it has to make certain that the agreement of the receiving State has been given for the person it proposes to accredit as head of the mission to that State. In this situation. [18] The special status of the diplomatic envoy is regulated by the principle of reciprocity by which a state is free to treat the envoy of another state as its envoys are treated by that state.[19] The staff personnel of an international organization . those granted to international officials are based on treaty or conventional law. of the relatively well-established body of diplomatic privileges and immunities to international functionaries. and the United Nations. legally. It is contrary to the principle of equality of states for one state member of an international organization to assert a capacity to extract special privileges for its nationals from other member states on the basis of a status awarded by it to an international organization. He cannot be. His functions normally are administrative. The juridical basis of their special position is found in conventional law. although they may be judicial or executive. the object of the operation of the principle of reciprocity between states under such circumstances. The interruption of the activities of a diplomatic agent is likely to produce serious harm to the purposes for which his immunities were granted. [23] IV . [21] for it is contradictory to the basic principle of equality of states.their position by the organization itself. the relationship between an international organization and a member-state does not admit of the principle of reciprocity. Moreover. It is upon this principle of sovereign equality that international organizations are built. He does not represent a state or the interest of any specific state. Those of the diplomat are functions in the national interest. The international official does not carry out his functions in the interest of any state. An international organization carries out functions in the interest of every member state equally. The functions of the international official are carried out in the international interest. and the organization in the case of the international official. There is a difference of degree as well as of kind. the state in the case of the diplomat. usually. but they are rarely political or functions of representation. He does not usually "represent" the organization in the true sense of that term. but in serving the organization he serves. The functions of the diplomat and those of the international official are quite different. and its specific interest. cause serious dislocation of the functions of an international secretariat. they are similar in the sense that acts performed in an official capacity by either a diplomatic envoy or an international official are not attributable to him as an individual but are imputed to the entity he represents.[20] since there is no established basis of usage or custom in the case of the international official. indirectly. [22] On the other hand. such as those of the diplomat. they are responsible to the organization and their official acts are imputed to it. It follows from this same legal circumstance that a state called upon to admit an official of an international organization does not have a capacity to declare him persona non grata. or by a competent organ of it. The task of the ambassador is to represent his state. at the capital of another state. each state equally. But the interruption of the activities of the international official does not. and it is said that states have not sought to restrict that immunity of the United Nations by interpretation or amendment. The current tendency is to reduce privileges and immunities of personnel of international organizations to a minimum .Looking back over 150 years of privileges and immunities granted to the personnel of international organizations. to guarantee obligations. The solution to the problem presented by the extension of diplomatic prerogatives to international functionaries lies in the general reduction of the special position of both types of agents in that the special status of each agent is granted in the interest of function. The Covenant of the League which granted "diplomatic immunities and privileges. except in cases arising out of or in connection with the exercise of its powers to borrow money." Today. Section 4 of the Convention on the Privileges and Immunities of the Specialized Agencies likewise provides that the specialized agencies shall enjoy immunity from every form of legal process subject to the same exception. Historically. or to buy and sell or underwrite the sale of securities. While the current direction of the law seems to be to narrow the prerogatives of the personnel of international organizations. the age of the United Nations finds the scope of protection narrowed.the Rhine Treaty of 1804 between the German Empire and France which provided "all the rights of neutrality" to persons employed in regulating navigation in the international interest. Article 50(1) of the ADB Charter and Section 5 of the Headquarters Agreement similarly provide that the bank shall enjoy immunity from every form of legal process. Section 2 of the General Convention on the Privileges and Immunities of the United Nations states that the UN shall enjoy immunity from every form of legal process except insofar as in any particular case it has expressly waived its immunity. The phrase "immunity from every form of legal process" as used in the UN General Convention has been interpreted to mean absolute immunity from a state's jurisdiction to adjudicate or enforce its law by legal process. the reverse is true with respect to the prerogatives of the organizations themselves. The Treaty of Berlin of 1878 which granted the European Commission of the Danube "complete independence of territorial authorities" in the exercise of its functions. The wide grant of diplomatic prerogatives was curtailed because of practical necessity and because the proper functioning of the organization did not require such extensive immunity for its officials . states have been more generous in granting privileges and immunities to organizations than they have to personnel of these organizations. Finally. The tendency cannot be considered as a lowering of the standard but rather as a recognition that the problem on the privileges and immunities of international officials is new. [24] Thus. considered as legal entities. Similar provisions are contained in the Special Agencies Convention as well as in the ADB Charter and Headquarters . it is clear that they were accorded a wide scope of protection in the exercise of their functions . Clearly. However. [25] From this. Then the International Organizations Immunities Act came into effect which gives to designated international organizations the same immunity from suit and every form of judicial process as is enjoyed by foreign governments. aside from the fact that there was no indication in its legislative history that Congress contemplated that result. [26] On the other hand. There is no argument in doctrine or practice with the principle that an international official is independent of the jurisdiction of the local authorities for his official acts. in the discharge of his international functions. but are imputed to the organization." conflict with the United States obligations under the Convention was sought to be avoided by interpreting the Foreign Sovereign Immunities Act. Even in the United States this theory seems to be the prevailing rule. Section 45 (a) of the ADB Headquarters Agreement accords the same immunity to the officers and staff of the bank. These organizations were accorded privileges and immunities in their charters by language similar to that applicable to the United Nations. The Charter of the ADB provides under Article 55(i) that officers and employees of the bank shall be immune from legal process with respect to acts performed by them in their official capacity except when the Bank waives immunity. Section 18(a) of the General Convention on Privileges and Immunities of the United Nations states that officials of the United Nations shall be immune from legal process in respect of words spoken or written and all acts performed by them in their official capacity.Agreement. as not applying to suits against the United Nations. This gives the impression that the Foreign Sovereign Immunities Act has the effect of applying the restrictive theory also to international organizations generally. The Convention on Specialized Agencies carries exactly the same provision. it can be easily deduced that international organizations enjoy absolute immunity similar to the diplomatic prerogatives granted to diplomatic envoys. and considering that the Convention on Privileges and Immunities of the United Nations exempts the United Nations "from every form of legal process. unlike international organizations which enjoy absolute immunity. Those acts are not his. The Foreign Sovereign Immunities Act was passed adopting the "restrictive theory" limiting the immunity of states under international law essentially to activities of a kind not carried on by private persons. international officials are governed by a different rule . and without waiver the local courts cannot hold him liable for them. It is clear therefore that these organizations were intended to have similar privileges and immunities. There can be no dispute that international officials are entitled to immunity only with respect to acts performed in their official capacity. In strict law. the most important immunity to an international official. and the restrictive theory. is immunity from local jurisdiction. it would . The acceptance of the principle is sufficiently widespread to be regarded as declaratory of international law. the state itself tends to assume this competence. In connection with this question. aside from the aforementioned treatises. international officials were granted diplomatic privileges and immunities and were thus considered immune for both private and official acts. It is the organization itself. [29] This much is explicit from the Charter and Headquarters Agreement of the ADB which contain substantially similar provisions to that of the General Convention. in the wider sense of the term. the current status of the law does not maintain that states grant jurisdictional immunity to international officials for acts of their private lives. By the new formula. In practice. VI Who is competent to determine whether a given act is private or official? This is an entirely different question. under the provisions of the General Convention of the United States. not the individual. If the organization is dissatisfied with the decision. the state . and other current dominant instruments. Thus. it may appeal to an international tribunal by procedures outlined in those instruments. Prior to the regime of the United Nations. Thus. except insofar as he appears in the name of the organization.[27] V What then is the status of the international official with respect to his private acts? Section 18 (a) of the General Convention has been interpreted to mean that officials of the specified categories are denied immunity from local jurisdiction for acts of their private life and empowers local courts to assume jurisdiction in such cases without the necessity of waiver. This permits local authorities to assume jurisdiction over and individual for an act which is not.seem that even the organization itself could have no right to waive an official's immunity for his official acts. as a juristic person. this wide grant of diplomatic prerogatives was curtailed because of practical necessity and because the proper functioning of the organization did not require such extensive immunity for its officials. or the Special Convention for Specialized Agencies. [28] It has earlier been mentioned that historically. Provisions for immunity from jurisdiction for official acts appear. his act at all. the determination of this question rested with the organization and its decision was final. which should waive its own immunity and appear in court. the Swiss Arrangement. the current tendency to narrow the scope of privileges and immunities of international officials and representatives is most apparent. in the constitution of most modern international organizations. It means that. of waiver. and since waiver is not mentioned in connection with the provision granting immunities to international officials. he is subject to judicial or administrative process and must claim his immunity in the proceedings by showing that the act in question was an official act. [30] It appears that the inclination is to place the competence to determine the nature of an act as private or official in the courts of the state concerned. Jenks proposes three ways of avoiding difficulty in the matter. who writes that the "jurisdiction of local courts without waiver for acts of private life empowers the local courts to determine whether a certain act is an official act or an act of private life. it is suggested that since an international official does not enjoy personal inviolability from arrest or detention and has immunity only with respect to official acts. the determination of the official or private character of a particular act may pass from international to national control. if a local court assumes jurisdiction over an act without the necessity of waiver from the organization. the dispute between the organization and the state of the forum is to be resolved by negotiation." on the rationale that since the determination of such question. the decision as to whether a given act is official or private is made by the national courts in the first instance. it may invoke proceedings for settlement of disputes between the organization and the member states as provided in Section 30 of the General Convention. That the prevalent notion seems to be to leave to the local courts determination of whether or not a given act is official or private does not necessarily mean that such determination is final. Such a claim would be in effect a claim by the organization that the proceedings . [33] Recognizing the difficulty that by reason of the right of a national court to assume jurisdiction over private acts without a waiver of immunity. but it may be subjected to review in the the international level if questioned by the United Nations. the determination of the nature of the act is made at the national level. Thus. The first would be for a municipal court before which a question of the official or private character of a particular act arose to accept as conclusive in the matter any claim by the international organization that the act was official in character. If the United Nations questions the decision of the Court. [32] Under the Third Restatement of the Law. would consist in the execution. but if the international organization disputes the court's finding. or non-execution. [31] A similar view is taken by Kunz. by an agreed mode of settlement or by advisory opinion of the International Court of Justice.assumes this competence in the first instance. then the decision must rest with local courts. if left in the hands of the organization. Whether an act was performed in the individual's official capacity is a question for the court in which a proceeding is brought. such a claim being regarded as equivalent to a governmental claim that a particular act is an act of State. and criminal or civil process which is not absolute but applies only to acts or omissions in the performance of his official functions. and hence he cannot be arrested. that is. these various possibilities may afford the elements of a solution to the problem. [34] One final point. except when the Bank waives immunity. but apparently the burden is on the consular officer to prove his status as well as his exemption in the circumstances. a diplomatic envoy is immune from criminal jurisdiction of the receiving State for all acts. is not entitled to diplomatic immunity and hence his immunity is not absolute. The international official's immunity for official acts may be likened to a consular official's immunity from arrest. I submit the following conclusions: First.[36] On the other hand. unless his diplomatic immunity is waived. prosecuted and punished for any offense he may commit.against the official were a violation of the jurisdictional immunity of the organization itself which is unqualified and therefore not subject to delimitation in the discretion of the municipal court.[37] This is the reason why the ADB Charter and Headquarters Agreement explicitly grant immunity from legal process to bank officers and employees only with respect to acts performed by them in their official capacity.[35] Submissions On the bases of the foregoing disquisitions. a bank official of ADB. he surmises that taken in combination. In other words. in the absence of special agreement. However. The third would be to have recourse to the procedure of international arbitration. the first might be readily acceptable only in the clearest cases and the second is available only if the executive government of the country where the matter arises concurs in the view of the international organization concerning the official character of the act. he must respond to any process and plead and prove immunity on the ground that the act or omission underlying the process was in the performance of his official functions. Under the Vienna Convention on Diplomatic Relations. petitioner Liang. the US Department of State generally has left it to the courts to determine whether a particular act was within a consular officer's official duties. officials and employees of the ADB . officials of international organizations enjoy "functional" immunities. Jenks opines that it is possible that none of these three solutions would be applicable in all cases. The second would be for a court to accept as conclusive in the matter a statement by the executive government of the country where the matter arises certifying the official character of the act. Since a consular officer is not immune from all legal process. only those necessary for the exercise of the functions of the organization and the fulfillment of its purposes . detention. whether private or official. In the United States. The issue has not been authoritatively determined. it is not within the power of the DFA. As an aside.are subject to the jurisdiction of the local courts for their private acts. or even of the ADB for that matter. This is in consonance with the current trend in international law which seeks to narrow the scope of protection and reduce the privileges and immunities granted to personnel of international organizations. rendered a decision declaring that the defendants are not entitled to immunity because the latter acted beyond the scope of their official duties. since no such prerogative exists in the first place. the necessary inference is that the authority of the Department of Affairs. considering that bank officials and employees are covered by immunity only for their official acts. to invoke immunity for private acts of bank official and employees. there is nothing to certify. Rarang. after trial. The case of M. The Court likewise applied the ruling enunciated in the case of Chavez vs. as the international organization vested with the right to waive immunity. to certify that they are entitled to immunity is limited only to acts done in their official capacity. Second. Sandiganbayan[39] to the effect that a mere invocation of the immunity clause does not ipso facto result in the charges being automatically dropped. One cannot waive the right to a privilege which has never been granted or acquired. vs. notwithstanding the absence of a waiver of immunity. If the immunity does not exist. while at the same time aims to increase the prerogatives of international organizations. the trial court denied the same and. The immunity of ADB is absolute whereas the immunity of its officials and employees is restricted only to official acts. the issue is not entirely novel. Although a motion to dismiss was filed by the defendants therein invoking their immunity from suit pursuant to the RP-US Military Bases Agreement. Petitioner cannot also seek relief under the mantle of "immunity from every form of legal process" accorded to ADB as an international organization. et al.[38] concerns the extent of immunity from suit of the officials of a United States Naval Base inside the Philippine territory. nor the ADB. et al. While there is a dearth of cases on the matter under Philippine jurisprudence. I choose to adopt the view that it is the local courts which have jurisdiction to determine whether or not a given act is official or private. as the agency in charge of the executive department's foreign relations. The Charter and the Headquarters Agreement are clear that the immunity can be waived only with respect to official acts because this is only the extent to which the privilege has been granted. Wylie. ADB cannot even claim to have the right to waive immunity for private acts of its officials and employees. While it is true that . Stated otherwise.H. Third. lack of jurisdiction based on sovereign immunity from suit.. the defense of sovereign immunity was submitted directly to the local courts by the respondents through their private counsels. reconveyance. Petitioner moved to dismiss on the ground of. In the case of The Holy See vs. and subsequently. a "Motion for a Hearing for the Sole Purpose of Establishing Factual Allegation for Claim of Immunity as a Jurisdictional Defense" were filed by petitioner. 238 SCRA 524 (1994). the Court there ruled on the issue of petitioner's non-suability on the basis of the allegations made in the pleadings filed by the parties. 262 SCRA 38 (1996). among others. The trial court deferred resolution of said motions until after trial on the merits. specific performance and damages was filed against petitioner. Supra note 1. it appears from the records of this case that petitioner is a senior economist at ADB and as such he makes country project profiles which will help the bank in deciding whether to lend money or support a particular project to a particular country. On certiorari. it was the local courts which ascertained whether the acts complained of were done in an official or personal capacity. or where the foreign states bypass the Foreign Office. [1] [2] [3] [4] [5] [6] 48 SCRA 242 (1972). [41] Petitioner stands charged of grave slander for allegedly uttering defamatory remarks against his secretary. Considering that the immunity accorded to petitioner is limited only to acts performed in his official capacity.the Chavez case involved a public official. 190 SCRA 130 (1990).[40] a complaint for annulment of contract of sale. it becomes necessary to make a factual determination of whether or not the defamatory utterances were made pursuant and in relation to his official functions as a senior economist. The Court hastened to add that when a state or international agency wishes to plead sovereign or diplomatic immunity in a foreign court. 241 SCRA 681 (1995). the courts can inquire into the facts and make their own determination as to the nature of the acts and transactions involved. the Court did not find any substantial reason why the same rule cannot be made to apply to a US official assigned at the US Naval Station located in the Philippines. in some cases. This is an implicit recognition of the court's jurisdiction to ascertain the suability or nonsuability of the sovereign by assessing the facts of the case. which was denied by the trial court. Jr. I vote to deny the motion for reconsideration. Rosario. A motion for reconsideration. . In this case. the private complainant herein. Finally. [26] Ibid. et al.R. Public International Law 108 (5th ed. supra note 12. Id.K. Supra note 3. 2000. King. as has Hammarskjold. [12] John Kerry King. Jenks.K. [11] ICMC vs. at 25-26. supra note 2. [33] [34] [35] [36] [37] [38] [39] [40] [41] 1 Restatement of the Law Third 512.K. [19] Article 4. [18] Id. supra note 12. in particular. at 259. at 81. King. King. supra note 12. Salonga & Yap. at 253-268. Wilfred Jenks.[7] [8] Supra note 2. citing Articles 57 and 63 of the United Nations Charter. at 189. [22] Id. [16] J.. at 186. Calleja. TSN.K. 193 SCRA 282 (1991). [21] Id.. at 27. The Privileges and Immunities of the Personnel of International Organizations xiii (1949). id. p. King. 125865. Calleja. No. [14] C. 209 SCRA 357 (1992). at 260-261. [20] J. 1 Restatement of the Law Third 475-477. 1 id. Chapter 1. It is important to note that the submission of international officials to local jurisdiction for private act is not completely accepted in doctrine and theory. [32] Joseph L. [28] Id. Jenks. at 17. [13] ICMC vs. [9] Supra note 4. Privileges and Immunities of International Organizations 862 (1947). October 18. Contemporary Development in International Immunities xxxvii (1961). [15] Id. Vienna Convention on Diplomatic Relations. supra note 14. G. Les Fonctionnaires Internationaux (Paris: 1931). at 254-257. at 255. [29] But see id. 1992). p. at 254. Kunz. supra. [30] [31] Id. [10] Supra note 5. at 103. Rollo. . [27] J. 393. citing: Suzanne Basdevant. cited in J. at 117-118. 11. at xiii.K. at 511. [25] 1 Restatement of the Law Third 498-501. King. at 258-259. [17] See id. [23] Id. Supra note 3. has argued for complete jurisdictional immunity. supra note 12. [24] J.