Case Digest Political

POLITICAL LAW JURISPRUDENCE ATTY.
GOROSPE
PRELIMINARY
CONSIDERATIONS
A.M. No. 93-7-696-0 February 2!
99"
I# Re $OA%&IN T. 'ORROMEO! E(
Re). Cebu C*+y C,a-+er o. +,e
I#+e/ra+e0 'ar o. +,e P,*)*--*#e1.
HELD:
Joaquin Borromeo was declared guilty
of constructive contempt of court for
repetitiously disrespecting the decisions and
resolutions issued by the courts, and even by
issuing a circular containing libelous and
offending accusations li!e whimsical,
capricious, and tyrannical" against the
#upreme $ourt %ustices and its employees& He
even delivered a letter accusing lawyers of
defamatory comments and insults& 'his is due
to his series of dismissed complaints and
appeals against ( ban!s namely 'raders )oyal
Ban!, *nited $oconut +lanters Ban!, and
#ecurity Ban! and 'rust $o& from which he
obtained loans with unfulfilled mortgages& ,n
relation to this, he filed cases against the
lawyers of these ban!s and even against the
cler!s of court who signed the minute
resolutions of these cases& 'he actions reached
the alarming number of -. cases varying from
civil, criminal, to administrative cases&
,n response, the court answered all his
false alleged accusations through a resolution
along with declaring him guilty of contempt of
court&
A.M. MT$-92-37 $u)y 2! 992
$ES&S S. COND&CTO vs.
$&D4E IL&MINADO C. MON5ON
/0$'#:
0 complaint was filed by petitioner
$onducto with the #angguniang +anlungsod of
#an +ablo $ity against Ben%amin 1aghirang,
the barangay chairman of Barangay ,,,2E of
#an +ablo $ity, for abuse of authority, serious
irregularity and violation of law in that, among
other things for appointing his sister2in2law to
the position of barangay secretary which
violates the law& 0 case was filed against
1aghirang for violating 0rt 344 *nlawful
0ppointment" under the )+$& +etitioner see!s
that 1aghirang be suspended from his office
but it was denied by the respondent %udge
holding that the requirement for such action is
a simultaneous e5istence of administrative and
criminal cases as against the accused, which
according to him is not present in this case,
and that the reelection of the Barangay
$hairman is a condonation of his mista!es
during his prior term& Hence, petitioner filed a
case against the respondent %udge for
ignorance of the law&
,##*E: 678 respondent %udge is guilty of
ignorance of the law&
HELD: 9E#&
'he 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& ,t is well settled that #ection :( of )0
(.:; ma!es it mandatory for the
#andiganbayan or the $ourt" to suspend any
public officer against whom a valid information
charging violation of this law, Boo! ,,, 'itle < of
the )+$, or any offense involving fraud upon
government or public funds or property is filed
in court& Barangay $hairman Ben%amin
1aghirang was charged with *nlawful
0ppointment, punishable under 0rticle 344,
'itle <, Boo! ,, of the )evised +enal
$ode& 'herefore, it was mandatory on Judge
1on=on>s part, considering the 1otion filed, to
order the suspension of 1aghirang&
0lso, ,n Ingco v. Sanchez,
?:<@
this $ourt
e5plicitly ruled that the re2election of a public
official e5tinguishes only the administrative,
but not the criminal, liability incurred by him
during his previous term of office&
Be that as it may, it would also do well
to note that good faith and lac! of malicious
intent cannot completely free respondent from
liability&
Digested and compiled by Monica S. Cajucom, UST Law
Its not how good you are, its how good you want to be. Paul Arden
POLITICAL LAW JURISPRUDENCE ATTY. GOROSPE
A.M. No. 33-$ May 3! 922
'ERNARDITA R. MACARIOLA
61. 7ONORA'LE ELIAS '.
AS&NCION! $u0/e o. +,e Cour+ o.
F*r1+ I#1+a#8e o. Ley+e
/0$'#:
'his is a complaint of petitioner against
respondent %udge of Aacts unbecoming of a
%udgeB regarding an act following the
unfavorable decision rendered by the
respondent %udge against the former
concerning disputed properties of her deceased
father which were being claimed by the latter>s
children from a subsequent marriage& ,t turned
out that respondent %udge purchased one of
the lots in the case decided by him and
transferred it to the fishing corporation where
he is a stoc!holder and a ran!ing officer& 0long
with this, other misdeeds were also e5posed
such as that his involvement in the mentioned
business corporation while he is sitting as a
%udge is in violation of the law, his alleged
coddling of and close relations with an
impostor, Dominador 'an, who misrepresents
himself as a practicing attorney, and other
disregard for ethics&
,##*E: 678 respondent %udge should be held
guilty of Aacts unbecoming of a %udge&B
HELD: 87&
)espondent Judge cannot be held liable
for involving himself in a business because
there is no showing that respondent
participated or intervened in his
official capacity in the business or transactions
of the 'raders 1anufacturing and /ishing
,ndustries, ,nc& ,n the case at bar, the business
of the corporation in which respondent
participated has obviously no relation or
connection with his %udicial office& ,t does not
appear also from the records that the aforesaid
corporation gained any undue advantage in its
business operations by reason of respondentCs
financial involvement in it, or that the
corporation benefited in one way or another in
any case filed by or against it in court& 8o
provision in both the :;(- and :;<(
$onstitutions of the +hilippines, nor is there an
e5isting law e5pressly prohibiting members of
the Judiciary from engaging or having interest
in any lawful business
Li!ewise, 0rticle :4 of the $ode of
$ommerce which prohibits %udges from
engaging in commerce is, as heretofore stated,
deemed abrogated automatically upon the
transfer of sovereignty from #pain to 0merica,
because it is political in nature& virtual law
library1oreover, the prohibition in paragraph -,
0rticle :4;: of the 8ew $ivil $ode against the
purchase by %udges of a property in litigation
before the court within whose %urisdiction they
perform their duties, cannot apply to
respondent Judge because the sale of the lot in
question to him too! place after the finality of
his decision in $ivil $ase 8o& (.:. as well as
his two orders approving the pro%ect of
partitionD hence, the property was no longer
sub%ect of litigation& virtual l
6E are not, however, unmindful of the
fact that respondent Judge and his wife had
withdrawn on January (:, :;E< from the
aforesaid corporation and sold their respective
shares to third parties& #uch disposal or sale
by respondent and his wife of their shares in
the corporation only 33 days after the
incorporation of the corporation, indicates that
respondent reali=ed that early that their
interest in the corporation contravenes the
aforesaid $anon 3-&
6ith respect to the third and fourth
causes of action, complainant alleged that
respondent was guilty of coddling an impostor
and acted in disregard of %udicial decorum, and
that there was culpable defiance of the law and
utter disregard for ethics& 'hat fact even if true
did not render respondent guilty of violating
any canon of %udicial ethics as long as his
friendly relations with Dominador 0& 'an and
family did not influence his official actuations
as a %udge where said persons were concerned&
'here is no tangible convincing proof that
herein respondent gave any undue privileges in
his court to Dominador 0rigpa 'an or that the
latter benefitted in his practice of law from his
personal relations with respondent, or that he
used his influence, if he had any, on the Judges
of the other branches of the $ourt to favor said
Dominador 'an.
4.R. No. "2"3 $u)y "! 2003
REP&'LIC OF T7E P7ILIPPINES
61. 7ONORA'LE
SANDI4AN'AYAN 9SPECIAL
FIRST DI:ISION;! Fer0*#a#0 E.
Mar8o1 9re-re1e#+e0 by ,*1
e1+a+e<,e*r1= I>e)0a R. Mar8o1!
Mar*a I>e)0a ?I>ee@ Mar8o1-
Ma#o+o8! Fer0*#a#0 R. Mar8o1! $r.
a#0 Ire#e Mar8o1-Ara#e+a; a#0
I>e)0a Ro>ua)0eA Mar8o1
/0$'#:
+etitioner )epublic, through the
+residential $ommission on Food Fovernment
+$FF", represented by the 7ffice of the
#olicitor Feneral 7#F", filed a petition for
forfeiture before the #andiganbayan& +etitioner
sought the declaration of the aggregate
amount of *#G(-E million now estimated to
be more than *#GE-H million inclusive of
interest" deposited in escrow in the +8B, as ill2
gotten wealth& 'he funds were previously held
by the following five account groups, using
various foreign foundations in certain #wiss
ban!s& ,n addition, the petition sought the
forfeiture of *#G3- million and *#G- million in
treasury notes which e5ceeded the 1arcos
couple>s salaries, other lawful income as well
as income from legitimately acquired property&
'he treasury notes are fro=en at the
$entral Ban! of the +hilippines by virtue of the
free=e order issued by the +$FF& Before the
case was set for pre2trial, a Feneral 0greement
and the #upplemental 0greement dated
December 3H, :;;( were e5ecuted by the
1arcos children and then +$FF $hairman
1agtanggol Funigundo for a global settlement
of the assets of the 1arcos family to identify,
collate, cause the inventory of and distribute
all assets presumed to be owned by the 1arcos
family under the conditions contained therein&
,##*E: 678 the #wiss funds can be forfeited
in favor of the )epublic, on the basis of the
1arcoses> lawful income&
HELD: 87&
)0 :(<; raises the prima facie
presumption that a property is unlawfully
acquired, hence sub%ect to forfeiture, if its
amount or value is manifestly disproportionate
to the official salary and other lawful income of
the public officer who owns it& 'he following
facts must be established in order that
forfeiture or sei=ure of the #wiss deposits may
be effected: :" ownership by the public officer
of money or property acquired during his
incumbency, whether it be in his name or
otherwise, and 3" the e5tent to which the
amount of that money or property e5ceeds, i&
e&, is grossly disproportionate to, the legitimate
income of the public officer& Herein, the
spouses /erdinand and ,melda 1arcos were
public officials during the time material to the
present case was never in dispute&
'he spouses accumulated salary of
G(.4,(<3&4( should be held as the only !nown
lawful income of the 1arcoses since they did
not file any #tatement of 0ssets and Liabilities
#0L", as required by law, from which their net
worth could be determined& Besides, under the
:;(- $onstitution, /erdinand E& 1arcos as
+resident could not receive Iany other
emolument from the Fovernment or any of its
subdivisions and instrumentalitiesI& Li!ewise,
under the :;<( $onstitution, /erdinand E&
1arcos as +resident could Inot receive during
his tenure any other emolument from the
Fovernment or any other source&I
'heir only !nown lawful income of
G(.4,(<3&4( can therefore legally and fairly
serve as basis for determining the e5istence of
a prima facie case of forfeiture of the #wiss
funds& 'he )epublic did not fail to establish a
prima facie case for the forfeiture of the #wiss
deposits&
'he #wiss deposits which were
transferred to and are deposited in escrow at
the +hilippine 8ational Ban! in the estimated
aggregate amount of *#GE-H,:<-,(<(&E. as of
(: January 3..3, plus interest, were forfeited
in favor of the )epublic&
T7E STATE
4.R. No. L-26379 De8e>ber 27!
969
BILLIAM C. REA4AN! ET. AL 61.
COMMISSIONER OF INTERNAL
RE:EN&E
/0$'#:
+etitioner )eagan, a civilian employee
of an 0merican corporation providing technical
assistance to the *# 0ir /orce in the
+hilippines, questioned the payment of the
income ta5 assessed on him by respondent $,)
on an amount reali=ed by him on a sale of his
automobile to a member of the *# 1arine
$orps, the transaction having ta!en place at
the $lar! /ield 0ir Base at +ampanga& ,t is his
contention, that in legal contemplation the sale
was made outside +hilippine territory and
therefore beyond our %urisdictional power to
ta5& He see!s that an amount of +3,;<;&.. as
the income ta5 paid by him be refunded&
,##*E: 678 the $lar! /ield 0ir Base is a
foreign property therefore e5cluded from the
power of +hilippine ta5ation&
HELD: 87&
By the ?1ilitary Bases@ 0greement, it
should be noted, the +hilippine Fovernment
merely consents that the *nited #tates
e5ercise %urisdiction in certain cases& 'he
consent was given purely as a matter of
comity, courtesy, or e5pediency over the bases
as part of the +hilippine territory or divested
itself completely of %urisdiction over offenses
committed therein& 'his provision is not and
can not on principle or authority be construed
as a limitation upon the rights of the +hilippine
Fovernment&
'he #tate is not precluded from
allowing another power to participate in the
e5ercise of %urisdictional right over certain
portions of its territory& ,f it does so, it by no
means follows that such areas become
impressed with an alien character& 'hey retain
their status as native soil& 'hey are still sub%ect
to its authority& ,ts %urisdiction may be
diminished, but it does not disappear& #o it is
with the bases under lease to the 0merican
armed forces by virtue of the military bases
agreement of :;4<& 'hey are not and cannot
be foreign territory&
4.R. No. 7"222
S&5ETTE NICOLAS 61. ROM&LO
/0$'#:
)espondent Lance $orporal LJ$+L"
Daniel #mith is a member of the *# 0rmed
/orces& He was charged with the crime of rape
committed against a /ilipina, petitioner herein,
sometime on 8ovember :, 3..-& +ursuant to
the Kisiting /orces 0greement K/0" between
the )epublic of the +hilippines and the *#
entered into, the *#, at its request, was
granted custody of #mith& 'he )'$ of 1a!ati
rendered a decision finding defendant #mith
guilty due to sufficient evidence&
Defendant #mith was ta!en out of the
1a!ati %ail by a contingent of +hilippine law
enforcement agents, purportedly acting under
orders of the D,LF and brought to a facility for
detention under the control of the *#
government under the new agreements
between the +hilippines and the *#, referred to
as the )omulo2Lenney 0greement&
+etitioners contend that
the +hilippines should have custody of
defendant LJ$+L #mith because, first of all, the
K/0 is void and unconstitutional&
,##*E: 678 the K/0 is void and
unconstitutional&
HELD: 87&
0rt& MK,,,, #ec& 3- states:
#ec& 3-& 0fter the e5piration in :;;:
of the 0greement between the
+hilippines and the *nited #tates of
0merica concerning 1ilitary Bases,
foreign military bases, troops, or
facilities shall not be allowed in the
+hilippines e5cept under a treaty duly
concurred in by the #enate and, when
the $ongress so requires, ratified by a
ma%ority of the votes cast by the
people in a national referendum held
for that purpose, and recogni=ed as a
treaty by the other contracting #tate&
'he provision of 0rt& MK,,,, #ec& 3- of the
$onstitution, is complied with by virtue of the
fact that the presence of the *# 0rmed /orces
through the K/0 is a presence Aallowed underB
the )+2*# 1utual Defense 'reaty& #ince the
)+2*# 1utual Defense 'reaty itself has been
ratified and concurred in by both the +hilippine
#enate and the *# #enate, there is no
violation of the $onstitutional provision
resulting from such presence&
'he K/0 being a valid and binding
agreement, the parties are required as a
matter of international law to abide by its
terms and provisions&
0pplying, however, the provisions of
K/0, the $ourt finds that there is a different
treatment when it comes to detention as
against custody& Art. V, Sec. 10. The
confinement or detention by Philiine
a!thorities of "nited States ersonnel shall be
carried o!t in facilities agreed on by
aroriate Philiines and "S a!thorities.#
'herefore, the )omulo2Lenney
0greements of December :; and 33, 3..E,
which are agreements on the detention of the
accused in the United States Embassy, are
not in accord with the K/0 itself because such
detention is not Aby +hilippine
authorities&B )espondents should therefore
comply with the K/0 and negotiate with
representatives of the *nited #tates towards
an agreement on detention facilities under
+hilippine authorities as mandated by 0rt& K,
#ec& :. of the K/0&
4.R. No. L-96"7. No6e>ber 29!
9"6
LEOPOLDO T. 'ACANI a#0 MATEO
A. MATOTO 61. NATIONAL
COCON&T CORPORATION! ET AL.!
NATIONAL COCON&T
CORPORATION a#0 'OARD OF
LI%&IDATORS

/0$'#:
+laintiffs herein are court
stenographers assigned in Branch K, of the
$ourt of /irst ,nstance of 1anila& During the
pendency of $ivil $ase 8o& 33;( of said court,
entitled /rancisco #ycip vs& 8ational $oconut
$orporation, 0ssistant $orporate $ounsel
/ederico 0li!pala, counsel for Defendant,
requested said stenographers for copies of the
transcript of the stenographic notes ta!en by
them during the hearing& +laintiffs complied
with the request by delivering to $ounsel
0li!pala the needed transcript containing <:4
pages and thereafter submitted to him their
bills for the payment of their fees& 'he 8ational
$oconut $orporation paid the amount of +-E4
to Leopoldo '& Bacani and +:-. to 1ateo 0&
1atoto for said transcript at the rate of +: per
page& However, the 0uditor Feneral disallowed
the payment of these fees and ordered that it
shall be reimbursed for the reason that
80$7$7, being a public corporation, is
e5empted from the fees& /or reimbursement to
ta!e place, it was further ordered that the
amount of +3- per payday be deducted from
the salary of Bacani and +:. from the salary of
1atoto& Hence, this petition&
,##*E: 678 80$7$7 is e5empt from legal
fees being an alleged government corporation&
HELD: 87&
'here are functions which our
government is required to e5ercise to promote
its ob%ectives as e5pressed in our $onstitution
and which are e5ercised by it as an attribute of
sovereignty constitute", and those which it
may e5ercise to promote merely the welfare,
progress and prosperity of the people
ministrant"& 'o this latter class belongs the
organi=ation of those corporations owned or
controlled by the government to promote
certain aspects of the economic life of our
people such as the 8ational $oconut
$orporation& 'hese are what we call
government2owned or controlled corporations
which may ta!e on the form of a private
enterprise or one organi=ed with powers and
formal characteristics of a private corporations
under the $orporation Law& 'hey do not
acquire the status of a government entity for
the simple reason that they do not come under
the classification of municipal or public
corporation& 80$7$7 is a F7$$& 'hus, not
part of the government&
4.R. No. L-2323 No6e>ber
29! 969
T7E A4RIC&LT&RAL CREDIT
AND COOPERATI:E FINANCIN4
ADMINISTRATION 9ACCFA; 61.
CONFEDERATION OF &NIONS IN
4O:ERNMENT CORPORATIONS
AND OFFICES 9C&4CO;! e+. a).
/0$'#:
'he 0gricultural $redit and $ooperative
/inancing 0dministration 0$$/0" was a
government agency created under )epublic 0ct
8o& H3:, as amended& ,ts administrative
machinery was reorgani=ed and its name
changed to 0gricultural $redit 0dministration
0$0" under the Land )eform $ode )epublic
0ct 8o& (H44"&
7n #eptember 4, :;E: a collective
bargaining agreement, which was to be
effective for a period of one :" year was
entered into by and between the *nions and
the 0$$/0& 0 few months thereafter, the
*nions started protesting against alleged
violations and non2implementation of said
agreement& 'hereafter *nions declared a
strike, which was ended when the stri!ers
voluntarily returned to wor!& 'he *nions,
together with its mother union, the
$onfederation of *nions in Fovernment
$orporations and 7ffices $*F$7", filed a
complaint with the $ourt of ,ndustrial )elations
against the 0$$/0 for having allegedly
committed acts of unfair labor practice&
,##*E: 678 the *nions and $*F$7 had the
right to commence a $B0 with 0$0, formerly
0$$/0&
HELD: 87&
6e hold that the respondent *nions
are not entitled to the certification election
sought in the $ourt below& #uch certification is
admittedly for purposes of bargaining in behalf
of the employees with respect to terms and
conditions of employment, including the right
to stri!e as a coercive economic weapon, as in
fact the said unions did stri!e in :;E3 against
the 0$$/0& 'his is contrary to #ection :: of
)epublic 0ct 8o& H<-, which provides for
the prohibition against to stri!e in the
government&
6ith the reorgani=ation of the 0$$/0
and its conversion into the 0$0 under the Land
)eform $ode and in view of our ruling as to the
governmental character of the functions of the
0$0, the decision of the respondent $ourt
dated 1arch 3-, :;E(, and the resolution en
banc affirming it, in the unfair labor practice
case filed by the 0$$/0, which decision is the
sub%ect of the present review in F& )& 8o& L2
3:4H4, has become moot and academic,
particularly insofar as the order to bargain
collectively with the respondent *nions is
concerned& 'he respondent *nions have no
right to the certification election sought by
them nor, consequently, to bargain collectively
with the petitioner, no further fringe benefits
may be demanded on the basis of any
collective bargaining agreement&
4.R. No. 33377. February 20!
200
S7IPSIDE INCORPORATED vs.
T7E 7ON. CO&RT OF APPEALS!
7ON. RE4IONAL TRIAL CO&RT!
'RANC7 26 9Sa# Fer#a#0o C*+y!
La &#*o#; C T,e REP&'LIC OF
T7E P7ILIPPINES
/0$'#:
7ctober 3;, :;-H, 7riginal $ertificate
of 'itle was issued in favor of )afael Falve=,
over four parcels of land& Lots 8o& : and 4
were conveyed by )afael Falve= in favor of
/ilipina 1amaril, $leopatra Llana, )egina
Bustos, and Erlinda Balatbat in a deed of sale&
'hen 1amaril et al& sold Lots 8o& : and 4 to
Lepanto $onsolidated 1ining $ompany&
*n!nown to the latest owner, the $,) of La
*nion issued an 7rder in Land )egistration
$ase 8o& 82(E: declaring the deed of sale
between Falve= and 1amaril, et& al& 7$' 8o&
.2(H:" null and void, and ordered the
cancellation thereof&
Lepanto $onsolidated 1ining $ompany
sold to herein petitioner #hipside ,nc& Lots 8o&
: and 4&
'wenty2four years after, the lots have
never been e5ecuted& $onsequently, a
complaint for revival of %udgment and
cancellation of titles was filed by the 7#F&
,##*E: 678 Republic of the hilippines can
maintain the action fo! !e"i"al of judgment he!ein
despite the issue of p!esc!iption.
HELD: 87&
6hile it is true that prescription does not
run against the #tate, the same may not be
invo!ed by the government in this case since it
is no longer interested in the sub%ect matter&
1oreover, to recogni=e the Fovernment as
a proper party to sue in this case would set a
bad precedent as it would allow the )epublic to
prosecute, on behalf of government2owned or
controlled corporations, causes of action which
have already prescribed, on the prete5t that
the Fovernment is the real party in interest
against whom prescription does not run, said
corporations having been created merely as
agents for the reali=ation of government
programs&
+arenthetically, petitioner was not a party
to the original suit for cancellation of title
commenced by the )epublic twenty2seven
years for which it is now being made to
answer, nay, being made to suffer financial
losses&
,t should also be noted that petitioner is
unquestionably a buyer in good faith and for
value, having acquired the property in :;E(, or
- years after the issuance of the original
certificate of title, as a third transferee& ,f only
not to do violence and to give some measure
of respect to the 'orrens #ystem, petitioner
must be afforded some measure of protection&
STATE IMM&NITY
ACT NO. 3023
AN ACT DEFININ4 T7E
CONDITIONS &NDER B7IC7
T7E 4O:ERNMENT OF T7E
P7ILIPPINE ISLANDS MAY 'E
S&ED
Section 1. Complaint against Government&
N #ub%ect to the provisions of this 0ct, the
Fovernment of the +hilippine ,slands hereby
consents and submits to be sued upon any
moneyed claim involving liability arising from
contract, e5pressed or implied, which could
serve as a basis of civil action between private
parties&
Sec. 2& 0 person desiring to avail himself of
the privilege herein conferred must show that
he has presented his claim to the ,nsular
0uditor : and that the latter did not decide the
same within two months from the date of its
presentation&
Sec. 3. Venue. 7riginal actions brought
pursuant to the authority conferred in this 0ct
shall be instituted in the $ourt of /irst ,nstance
of the $ity of 1anila or of the province were
the claimant resides, at the option of the latter,
upon which court e5clusive original %urisdiction
is hereby conferred to hear and determine
such actions&
Sec. !. 0ctions instituted as aforesaid shall be
governed by the same rules of procedure, both
original and appellate, as if the litigants were
private parties&
Sec. ". 6hen the Fovernment of the +hilippine
,sland is plaintiff in an action instituted in any
court of original %urisdiction, the defendant
shall have the right to assert therein, by way of
set2off or counterclaim in a similar action
between private parties&
Sec. #. +rocess in actions brought against the
Fovernment of the +hilippine ,slands pursuant
to the authority granted in this 0ct shall be
served upon the 0ttorney2Feneral 3 whose
duty it shall be to appear and ma!e defense,
either himself or through delegates&
Sec. $. E%ecution. 8o e5ecution shall issue
upon any %udgment rendered by any court
against the Fovernment of the +hilippine
,slands under the provisions of this 0ctD but a
copy thereof duly certified by the cler! of the
$ourt in which %udgment is rendered shall be
transmitted by such cler! to the Fovernor2
Feneral, ( within five days after the same
becomes final&
Sec. &. 'ransmittal o( )ecision. 'he
Fovernor2Feneral, 4 at the commencement of
each regular session of the Legislature, - shall
transmit to that body for appropriate action all
decisions so received by him, and if said body
determine that payment should be made, it
shall appropriate the sum which the
Fovernment has been sentenced to pay,
including the same in the appropriations for
the ensuing year&
Sec. *. 'his 0ct shall ta!e effect on its
approval&
Aroved$ %arch 1&, 1'().
COMMONBEALT7 ACT NO. 327
AN ACT FIDIN4 T7E TIME
BIT7IN B7IC7 T7E A&DITOR
4ENERAL S7ALL RENDER 7IS
DECISIONS AND PRESCRI'IN4
T7E MANNER OF APPEAL
T7EREFROM
Section 1. ,n all cases involving the
settlement of accounts or claims, other than
those of accountable officers, the 0uditor
Feneral shall act and decide the same within
si5ty days, e5clusive of #undays and holidays,
after their presentation& ,f said accounts or
claims need reference to other persons, office
or offices, or to a party interested, the period
aforesaid shall be counted from the time the
last comment necessary to a proper decision is
received by him& 6ith respect to the accounts
of accountable officers, the 0uditor Feneral
shall act on the same within one hundred days
after their submission, #undays and holidays
e5cepted&
,n case of accounts or claims already
submitted to but still pending decision by the
0uditor Feneral on or before the approval of
this 0ct, the periods provided in this section
shall commence from the date of such
approval&
Section 2. 'he party aggrieved by the final
decision of the 0uditor Feneral in the
settlement of an account for claim may, within
thirty days from receipt of the decision, ta!e
an appeal in writing:
+a, 'o the +resident of the *nited #tates,
pending the final and complete withdrawal of
her sovereignty over the +hilippines, or
+b, 'o the +resident of the +hilippines, or
+c, 'o the #upreme $ourt of the +hilippines if
the appellant is a private person or entity&
,f there are more than one appellant, all
appeals shall be ta!en to the same authority
resorted to by the first appellant&
/rom a decision adversely affecting the
interests of the Fovernment, the appeal may
be ta!en by the proper head of the department
or in case of local governments by the head of
the office or branch of the Fovernment
immediately concerned&
'he appeal shall specifically set forth the
particular action of the 0uditor Feneral to
which e5ception is ta!en with the reasons and
authorities relied on for reversing such
decision&
Section 3. 'his 0ct shall ta!e effect upon its
approval&
Aroved$ *!ne 1+. 1')+.
PRESIDENTIAL DECREE No. 207
PRESCRI'IN4 T7E PROCED&RE
B7ERE'Y T7E REP&'LIC OF
T7E P7ILIPPINES MAY BAI:E
SO:EREI4N IMM&NITY FROM
S&IT AND OT7ER LE4AL
PROCEEDIN4 BIT7 RESPECT TO
ITSELF OR ITS PROPERTY IN
CONNECTION BIT7 FOREI4N
O'LI4ATIONS CONTRACTED 'Y
IT P&RS&ANT TO LAB
6HE)E0#, in the pursuit of economic growth
and development, it has become imperative for
the )epublic of the +hilippines to enter into
contracts or transactions with international
ban!ing, financial and other foreign
enterprisesD
6HE)E0#, recogni=ing this need, e5isting
legislation e5pressly authori=e the )epublic of
the +hilippines to contract foreign obligations,
including borrowings in foreign currency, and
to guarantee foreign obligations of corporations
and other entities owned or controlled by the
Fovernment of the +hilippinesD
6HE)E0#, circumstances in the international
mar!et may require that sovereign states
entering into contracts or transactions ma!e
e5press waivers of sovereign immunity in
connection with such contracts or transactionsD
6HE)E0#, it is in the national interest that a
procedure be prescribed with respect to the
waiver of sovereign immunity of the )epublic
of the +hilippines in respect of international
contracts or transactions entered into by itD
876, 'HE)E/7)E, ,, /E)D,808D E& 10)$7#,
+resident of the )epublic of the +hilippines, by
virtue of the powers vested in me by the
$onstitution, do hereby order and decree:
Section 1. Proced!re for, and ,onditions of,
-aiver of Sovereign Imm!nity.
,n instances where the law e5pressly
authori=es the )epublic of the +hilippines to
contract or incur a foreign obligation, it may
consent to be sued in connection therewith&
'he +resident of the +hilippines or his duly
designated representative may, in behalf of the
)epublic of the +hilippines, contractually agree
to waive any claim to sovereign immunity from
suit or legal proceedings and from set2off,
attachment or e5ecutive with respect to its
property, and to be sued in any appropriate
%urisdiction in regard to such foreign obligation&
/or purposes of this decree, a foreign
obligation means any direct, indirect, or
contingent obligation or liability capable of
pecuniary estimation and payable in a currency
other than +hilippine currency&
Section 2. Validity of e.isting -aivers.
8othing in this Decree shall be construed to
revo!e or repeal any waiver of sovereign
immunity from suit or legal proceedings or
from set2off, attachment or e5ecution granted
under or pursuant to other provisions of law&
Section 3. /ffectivity. 'his Decree shall ta!e
effect immediately&
ARTICLE 220 9NCC;
555
'he #tate is responsible in li!e manner when it
acts through a special agentD but not when the
damage has been caused by the official to
whom the tas! done properly pertains, in
which case what is provided in 0rticle 3:<E
shall be applicable.
555
4.R. No. L-"3 Mar8, 2!
96
E. MERRITT 61.
4O:ERNMENT OF T7E
P7ILIPPINE ISLANDS
/0$'#:
$ounsel for the plaintiff insists that the
trial court erred :" Iin limiting the general
damages which the plaintiff suffered to +-,...,
instead of +3-,... as claimed in the
complaint,I and 3" Iin limiting the time when
plaintiff was entirely disabled to two months
and twenty2one days and fi5ing the damage
accordingly in the sum of +3,EEE, instead of
+E,... as claimed by plaintiff in his complaint&I
'he 0ttorney2Feneral on behalf of the
defendant urges that the trial court erred: a"
in finding that the collision between the
plaintiffCs motorcycle and the ambulance of the
Feneral Hospital was due to the negligence of
the chauffeur, who is an alleged agent or
employee of the FovernmentD b" in holding
that the Fovernment of the +hilippine ,slands
is liable for the damages sustained by the
plaintiff as a result of the collision, even if it be
true that the collision was due to the
negligence of the chauffeurD and c" in
rendering %udgment against the defendant for
the sum of +:4,<4:&
$onsequently, the Fovernment issued
an act allowing the plaintiff to commence a
lawsuit against it&
,##*E:
:" 678 the Fovernment conceded its
liability to the plaintiff by allowing a lawsuit to
commence against it&
3" 678 the chauffeur is a government
employee or agent&
HELD:
:" 87&
By consenting to be sued a state simply
waives its immunity from suit& ,t does not
thereby concede its liability to plaintiff, or
create any cause of action in his favor, or
e5tend its liability to any cause not previously
recogni=ed& ,t merely gives a remedy to
enforce a pree5isting liability and submits itself
to the %urisdiction of the court, sub%ect to its
right to interpose any lawful defense&
3" 87&
6e will now e5amine the substantive law
touching the defendantCs liability for the
negligent acts of its officers, agents, and
employees& +aragraph - of article :;.( of the
$ivil $ode reads: The state is liable in this
sense 0hen it acts thro!gh a secial agent, b!t
not 0hen the damage sho!ld have been
ca!sed by the official to 0hom roerly it
ertained to do the act erformed, in 0hich
case the rovisions of the receding article
shall be alicable& 'he responsibility of the
state is limited to that which it contracts
through a special agent, duly empowered by
a definite order or commission to erform
some act or charged 0ith some definite
!rose 0hich gives rise to the claim&
'he chauffeur of the ambulance of the
Feneral Hospital was not such an agent&
4RN L-3"63" May 22! 92".
&NITED STATES OF AMERICA!
CAPT. $AMES '. 4ALLOBAY!
BILLIAM I. COLLINS a#0
RO'ERT 4O7IER 61. 7ON. :. M.
R&I5! Pre1*0*#/ $u0/e o. 'ra#8,
D:! Cour+ o. F*r1+ I#1+a#8e o. R*Aa)
a#0 ELI4IO DE 4&5MAN C CO.!
INC.
/0$'#:
'he *nited #tates of 0merica had a
naval base in #ubic, Oambales& 'he base was
one of those provided in the 1ilitary Bases
0greement between the +hilippines and the
*nited #tates&
#ometime in 1ay, :;<3, the *nited
#tates invited the submission of bids for a
couple of repair pro%ects& Eligio de Fu=man
land $o&, ,nc& responded to the invitation and
submitted bids& #ubsequent thereto, the
company received from the *# two telegrams
requesting it to confirm its price proposals and
for the name of its bonding company& 'he
company construed this as an acceptance of its
offer so they complied with the requests& 'he
company received a letter which was signed by
6illiam ,& $ollins of Department of the 8avy of
the *nited #tates, also one of the petitioners
herein informing that the company did not
qualify to receive an award for the pro%ects
because of its previous unsatisfactory
performance rating in repairs, and that the
pro%ects were awarded to third parties& 'he
company filed a complaint against the
defendants herein demanding specific
performance that the company be allowed to
perform the wor! on the pro%ects and, in the
event that specific performance was no longer
possible, to order the defendants to pay
damages&
,##*E: 678 the *# is immune from suit
having dealt with a private corporation&
HELD: 9E#&
0 #tate may be said to have descended
the the level of an individual and can thus be
deemed to have tacitly given its consent to be
sued only when it enters into business
contracts& ,t does not apply where the contract
relates to the e5ercise of its sovereign
functions& ,n this case the pro%ects are an
integral part of the naval base which is devoted
to the defense of both the *nited #tates and
the +hilippines, indisputably a function of the
government of the highest order, they are not
utili=ed for nor dedicated to commercial or
business purposes&
4.R. No. 29306 Mar8, 6!
2006
re-re1e#+e0 by +,e
PRESIDENTIAL COMMISSION ON
4OOD 4O:ERNMENT 9PC44; 61.
SANDI4AN'AYAN 9SECOND
DI:ISION; a#0 RO'ERTO S.
'ENEDICTO.
/0$'#:
'he +$FF issued writs placing under
sequestration all business enterprises, entities
and other properties, real and personal, owned
or registered in the name of private respondent
Benedicto, or of corporations in which he
appeared to have controlling or ma%ority
interest due to his involvement in cases of ill2
gotten wealth& 0mong the properties thus
sequestered and ta!en over by +$FF fiscal
agents were the 33< shares in 87F$$, owned
by and registered under the name of private
respondent& 0s sequester of the 33< shares
formerly owned by Benedicto, +$FF did not
pay the monthly membership fee& Later on, the
shares were declared to be delinquent to be
put into an auction sale& Despite filing a writ of
in%unction, it was nevertheless dismissed& #o
petitioner )epublic and private respondent
Benedicto entered into a $ompromise
0greement which contains a general release
clause where petitioner agreed and bound itself
to lift the sequestration on the 33< 87F$$,
shares ac!nowledging that it was within private
respondent>s capacity to acquire the same
shares out of his income from business and the
e5ercise of his profession& ,mplied in this
underta!ing is the recognition by petitioner
that the sub%ect shares of stoc! could not have
been ill2gotten
Benedicto filed a 1otion for )elease
from #equestration and )eturn of #equestered
#haresJDividends praying, inter alia, that his
87F$$, shares of stoc! be specifically released
from sequestration and returned, delivered or
paid to him as part of the parties> $ompromise
0greement in that case& ,t was granted but the
shares were ordered to be put under the
custody of the $ler! of $ourt& 0long with this,
+$FF was ordered to deliver the shares to the
$ler! of $ourt which it failed to comply with
without any %ustifiable grounds&
,n a last2ditch attempt to escape
liability, petitioner )epublic, through the
+$FF, invo!es state immunity from suit&
,##*E: 678 the )epublic can invo!e state
immunity&
HELD: 87&
,n fact, by entering into a $ompromise
0greement with private respondent Benedicto,
petitioner )epublic thereby stripped itself of its
immunity from suit and placed itself in the
same level of its adversary& 6hen the #tate
enters into contract, through its officers or
agents, in furtherance of a legitimate aim and
purpose and pursuant to constitutional
legislative authority, whereby mutual or
reciprocal benefits accrue and rights and
obligations arise therefrom, the #tate may be
sued even without its e5press consent,
precisely because by entering into a contract
the sovereign descends to the level of the
citi=en& ,ts consent to be sued is implied from
the very act of entering into such contract,
breach of which on its part gives the
corresponding right to the other party to the
agreement&
4.R. No. L-2339 De8e>ber 7!
966
MO'IL P7ILIPPINES
EDPLORATION! INC. 61.
C&STOMS ARRASTRE SER:ICE
a#0 '&REA& o. C&STOMS
/0$'#:
/our cases of rotary drill parts were
shipped from abroad on #&#& ILeovilleI
consigned to 1obil +hilippines E5ploration, ,nc&,
1anila& ,t was discharged to the custody of the
$ustoms 0rrastre #ervice, the unit of the
Bureau of $ustoms then handling arrastre
operations therein& 'he $ustoms 0rrastre
#ervice later delivered to the bro!er of the
consignee three cases only& +etitioner filed suit
in the $ourt of /irst ,nstance of 1anila against
the $ustoms 0rrastre #ervice and the Bureau
of $ustoms to recover the value of the
undelivered case plus other damages& 'he
respondents filed a motion to dismiss on the
ground that not being persons under the law,
they cannot be sued&
,##*E: 678 the defendants can invo!e state
immunity&
HELD: 9E#&
8ow, the fact that a non2corporate
government entity performs a function
proprietary in nature does not necessarily
result in its being suable& ,f said non2
governmental function is underta!en as an
incident to its governmental function, there is
no waiver thereby of the sovereign immunity
from suit e5tended to such government entity&
'he Bureau of $ustoms, to repeat, is
part of the Department of /inance with no
personality of its own apart from that of the
national government& ,ts 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& 'o this function, arrastre
service is a necessary incident&
4.R. No. L-332 $u#e "! 972
P7ILIPPINE NATIONAL 'ANE 61.
7ON. $&D4E $A:IER PA'ALAN!
$u0/e o. +,e Cour+ o. F*r1+
I#1+a#8e! 'ra#8, III! La &#*o#!
A4OO TO'ACCO PLANTERS
ASSOCIATION! INC.! P7ILIPPINE
:IR4INIA TO'ACCO
ADMINISTRATION! a#0 PANFILO
P. $IMENE5! De-u+y S,er*F! La
&#*o#
/0$'#:
'he reliance of petitioner +hilippine 8ational
Ban! against respondent Judge Javier +abalan
who issued a writ of e5ecution, followed
thereafter by a notice of garnishment of the
funds of respondent +hilippine Kirginia 'obacco
0dministration, deposited with it, is on the
fundamental constitutional law doctrine of non2
suability of a state, it being alleged that such
funds are public in character&
,##*E: 678 the funds are public in character,
thus immune from suit&
HELD: 87&
,t is to be admitted that under the
present $onstitution, what was formerly
implicit as a fundamental doctrine in
constitutional law has been set forth in e5press
terms: I'he #tate may not be sued without its
consent&I ,f the funds appertained to one of
the regular departments or offices in the
government, then, certainly, such a provision
would be a bar to garnishment& #uch is not the
case here&
,t is well2settled that when the
government enters into commercial business, it
abandons its sovereign capacity and is to be
treated li!e any other corporation& By engaging
in a particular business thru the
instrumentality of a corporation, the
government divests itself ro hac vice of its
sovereign character, so as to render the
corporation sub%ect to the rules of law
governing private corporations&
4.R. No. L-363" Au/u1+ 3! 97
AN4EL MINISTERIO a#0
AS&NCION SADAYA 61.
T7E CO&RT OF FIRST INSTANCE
OF CE'&! Four+, 'ra#8,! Pre1*0e0
by +,e 7o#orab)e! $u0/e $OSE C.
'ORROMEO! T7E P&'LIC
7I47BAY COMMISSIONER! a#0
T7E A&DITOR 4ENERAL
/0$'#:
+etitioners sought the payment of %ust
compensation for a registered lot alleging that
in :;3< the 8ational Fovernment through its
authori=ed representatives too! physical and
material possession of it and used it for the
widening of a national road, without paying
%ust compensation and without any agreement,
either written or verbal& 'here was an
allegation of repeated demands for the
payment of its price or return of its possession,
but defendants +ublic Highway $ommissioner
and the 0uditor Feneral refused to restore its
possession&
,##*E: 678 the defendants are immune from
suit&
HELD: 87&
6here the %udgment in such a case
would result not only in the recovery of
possession of the property in favor of said
citi=en but also in a charge against or financial
liability to the Fovernment, then the suit
should be regarded as one against the
government itself, and, consequently, it cannot
prosper or be validly entertained by the courts
e5cept with the consent of said Fovernment&
,nasmuch as the #tate authori=es only
legal acts by its officers, unauthori-ed acts
o( government o((icials or o((icers are not
acts o( the State, and an action against the
officials or officers by one whose rights have
been invaded or violated by such acts, for the
protection of his rights, is not a suit against the
#tate within the rule of immunity of the #tate
from suit&
4.R. No. 69303 Mar8,
3! 2007
T7E DEPARTMENT OF 7EALT7!
SECRETARY MAN&EL M. DAYRIT!
&SEC. MA. MAR4ARITA 4ALON
a#0 &SEC. ANTONIO M.
LOPE5! 61.
P7IL. P7ARMABEALT7! INC.
/0$'#:
)espondent +hil& +harmawealth, ,nc& is
a domestic corporation engaged in the
business of manufacturing and supplying
pharmaceutical products to government
hospitals in the +hilippines& 'hen #ecretary of
Health 0lberto F& )omualde=, Jr& issued
0dministrative 7rder 0&7&" 8o& 3< outlining
the guidelines and procedures on the
accreditation of government suppliers for
pharmaceutical products& 0&7& 8o& 3< was later
amended by providing for additional
guidelines (or accreditation of drug
suppliers aimed at ensuring that only qualified
bidders can transact business with petitioner&
)espondent submitted to petitioner
D7H a request for the inclusion of additional
items in its list of accredited drug products,
including the antibiotic I+enicillin F
Ben=athine&I D7H issued an ,nvitation for Bids
for the procurement of :&3 million units vials of
+enicillin F Ben=athine& Despite the lac! of
response from petitioner D7H regarding
respondent>s request for inclusion of additional
items in its list of accredited products,
respondent submitted its bid for the +enicillin F
Ben=athine contract& 7nly two companies
participated, the respondent being the lower
bidder& ,n view, however, of the non.
accreditation of respondent>s +enicillin F
Ben=athine product, the contract was awarded
to the other company& Hence, respondent filed
a complaint in%unction, mandamus and
damages against D7H&
,##*E: 678 D7H can invo!e immunity from
suit&
HELD: 87&
'he suability of a government official
depends on whether the official concerned was
acting within his official or %urisdictional
capacity, and whether the acts done in the
performance of official functions will result in a
charge or financial liability against the
government& ,n the first case, the $onstitution
itself assures the availability of %udicial
review, and it is the official concerned who
should be impleaded as the proper party& 0s
regards petitioner D7H, the defense of
immunity from suit will not avail despite its
being an unincorporated agency of the
government, for the only causes of action
directed against it are preliminary in%unction
and mandamus&
4.R. No. 3"33. Mar8, 6! 200
EP4 CONSTR&CTION CO.! ET. AL.
vs. 7ONORA'LE 4RE4ORIO R.
:I4ILAR! I# 7*1 Ca-a8*+y a1
Se8re+ary o. Pub)*8 BorG1 a#0
7*/,Hay1
/0$'#:
'he 1inistry of Human #ettlement,
through the BL,## Development $orporation,
initiated a housing pro%ect on a government
property along the east ban! of the
1anggahan /loodway in +asig $ity& /or this
purpose, the 1inistry of Human #ettlement
entered into a 1emorandum of 0greement
170" with the 1inistry of +ublic 6or!s and
Highways, where the latter undertoo! to
develop the housing site and construct thereon
:4- housing units& By virtue of the 170, the
1inistry of +ublic 6or!s and Highways forged
individual contracts with herein petitioners E+F
$onstruction $o&, et& al& for the construction of
the housing units&
By reason of the verbal request and
assurance of then D+6H that additional funds
would be available and forthcoming, petitioners
agreed to underta!e and perform Aadditional
constructionsB for the completion of the
housing units, despite the absence of
appropriations and written contracts to cover
subsequent e5penses for the Aadditional
constructions&B +etitioners then received
payment for the construction wor! duly
covered by the individual written contracts,
thereby leaving an unpaid balance
representing the Aadditional constructions&B
+etitioners sent a demand letter to the
D+6H #ecretary and submitted that their claim
for payment was favorably recommended by
D+6H 0ssistant #ecretary for Legal #ervices
who recogni=ed the e5istence of implied
contracts covering the additional
constructions&
)espondent argues that the #tate may not
be sued in the instant case, invo!ing the
constitutional doctrine of /on.suability o( the
State, otherwise !nown as the 0oyal
1rerogative o( )ishonesty.
,##*E: 678 D+6H can invo!e state immunity&
HELD: 87&
*nder these circumstances, respondent
may not validly invo!e the 0oyal 1rerogative
o( )ishonesty and conveniently hide under
the State1s cloa2 of invincibility against
s!it, considering that this principle yields to
certain settled e5ceptions& 'rue enough, the
rule, in any case, is not absolute for it does not
say that the state may not be sued under any
circumstance& 'he doctrine of governmental
immunity from suit cannot serve as an
instrument for perpetrating an in%ustice on a
citi=en&
'o be sure, this $ourt P as the staunch
guardian of the citi=ens> rights and welfare P
cannot sanction an in%ustice so patent on its
face, and allow itself to be an instrument in the
perpetration thereof& Justice and equity sternly
demand that the #tate>s cloa! of invincibility
against suit be shred in this particular instance,
and that petitionersPcontractors be duly
compensated P on the basis of quantum
meruit P for construction done on the public
wor!s housing pro%ect&
4.R. No. L-3223 De8e>ber 9!
972
ILDEFONSO SANTIA4O!
re-re1e#+e0 by ,*1 A++or#ey-*#-
Fa8+! ALFREDO T. SANTIA4O 61.
/0$'#:
#antiago>s plea was for the revocation of a
deed of donation e5ecuted by him and his
spouse with the Bureau of +lant ,ndustry as
the donee& 0s alleged in such complaint, such
Bureau, contrary to the terms of the donation,
failed to Iinstall lighting facilities and water
system on the property donated and to build
an office building and par!ing ?lot@ thereon
which should have been constructed and ready
for occupancy& 'hat led him to conclude that
under the circumstances, he was e5empt from
compliance with such an e5plicit constitutional
command&
,##*E: 678 the Bureau is immune from suit&
HELD: 9E#&
,f an order of dismissal would suffice,
then the element of unfairness enters, the
facts alleged being hypothetically admitted& ,t
is the considered opinion of this $ourt then
that to conform to the high dictates of equity
and %ustice, the presumption of consent could
be indulged in safely& 'hat would serve to
accord to petitioner as plaintiff, at the very
least, the right to be heard&
'he doctrine of governmental immunity
from suit cannot serve as an instrument for
perpetrating an in%ustice on a citi=en&
*nder the circumstances, the
fundamental postulate of non2suability cannot
stand in the way& ,t is made to accommodate
itself to the demands of procedural due
process, which is the negation of arbitrariness
and inequity& 'he government, in the final
analysis, is the beneficiary& ,t thereby
manifests its adherence to the highest ethical
standards, which can only be ignored at the
ris! of losing the confidence of the people, the
repository of the sovereign power&
4.R. No. L-29993 O8+ober 23! 972
LA&DENCIO TORIO! ET. AL. 61.
ROSALINA! AN4ELINA!
LEONARDO! ED&ARDO! ARTEMIO!
AN4ELITA! ANITA! ERNESTO!
NORMA! :IR4INIA! REMEDIOS
a#0 RO'ERTO! a)) 1ur#a>e0
FONTANILLA! a#0 T7E
7ONORA'LE CO&RT OF APPEALS
/0$'#:
'he 1unicipal $ouncil of 1alasiqui,
+angasinan, passed a resolution whereby Iit
resolved to manage the :;-; 1alasiqui town
fiesta celebration& 0nother resolution was also
passed creating the I:;-; 1alasiqui C'own
/iesta E5ecutive $ommitteeI which in turn
organi=ed a sub2committee on entertainment
and stage& 'he council appropriated an amount
for the construction of 3 stages, one for the
I=ar=uelaI and another for the cancionan Jose
1acaraeg supervised the construction of the
stage& 'he I=ar=uelaI then began but before
the dramatic part of the play was reached, the
stage collapsed and Kicente /ontanilla who was
at the rear of the stage was pinned
underneath& /ontanilia was ta!en to the
hospital where he died in the afternoon of the
following day&
'he heirs of Kicente /ontanilia filed a
complaint against 1unicipality& 0nswering the
complaint defendant municipality invo!ed inter
alia the principal defense that as a legally and
duly organi=ed public corporation it performs
sovereign functions and the holding of a town
fiesta was an e5ercise of its governmental
functions from which no liability can arise to
answer for the negligence of any of its agents&
,##*E: 678 the defendant 1unicipality was
performing sovereign functions therefore
immune from suit&
HELD: 87&
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& 'he mere
fact that the celebration, as claimed was not to
secure profit or gain but merely to provide
entertainment to the town inhabitants is not a
conclusive test& /or instance, the maintenance
of par!s is not a source of income for the
nonetheless it is private underta!ing as
distinguished from the maintenance of public
schools, %ails, and the li!e which are for public
service&
'here can be no hard and fast rule for
purposes of determining the true nature of an
underta!ing or function of a municipalityD the
surrounding circumstances of a particular case
are to be considered and will be decisive& 'he
basic element, however beneficial to the public
the underta!ing may be, is that it is
governmental in essence, otherwise& the
function becomes private or proprietary in
character& Easily, no governmental or public
policy of the state is involved in the celebration
of a town fiesta&
4.R. No. L-"279 A-r*) 2! 99
M&NICIPALITY OF SAN
FERNANDO! LA &NION 61.
7ON. $&D4E ROMEO N. FIRME!
ET. AL.
/0$'#:
0t about <am of December :E, :;E-, a
collision occurred involving a passenger
%eepney driven by Bernardo Balagot owned by
the Estate of 1acario 8ieveras", a gravel and
sand truc! driven by Jose 1anandeg owned
by 'anquilino Kelasque=", and a dump truc! of
the 1unicipality of #an /ernando, La *nion and
driven by 0lfredo Bislig& Due to the impact,
several passengers of the %eepney including
Laureano BaniQa #r& died as a result of the
in%uries they sustained and four others suffered
varying degrees of physical in%uries&
'he private respondents instituted a
complaint for damages against the Estate of
1acario 8ieveras and Bernardo Balagot, owner
and driver, respectively, of the passenger
%eepney& However, the aforesaid defendants
filed a 'hird +arty $omplaint against the
petitioner and the driver of a dump truc! of
petitioner&
+etitioner raised as one of its defenses
the non2suability of the #tate&
,##*E: 678 the 1unicipality of #an /ernando
is immune from suit&
HELD: 9E#&
0nent the issue of whether or not the
municipality is liable for the torts committed by
its employee, the test of liability of the
municipality depends on whether or not the
driver, acting in behalf of the municipality, is
performing governmental or proprietary
functions&
,n the case at bar, the driver of the
dump truc! of the municipality insists that Ihe
was on his way to the 8aguilian river to get a
load of sand and gravel for the repair of #an
/ernandoCs municipal streets&I 6e already
stressed in the case of Palafo.,
et& al& vs& Province of Ilocos 3orte, the District
Engineer, and the +rovincial 'reasurer :.3 +hil
::HE" that Ithe construction or maintenance of
roads in which the truc! and the driver wor!ed
at the time of the accident are admittedly
governmental activities&I
6e arrive at the conclusion that the
m!niciality cannot be held liable for the torts
committed by its reg!lar emloyee, 0ho 0as
then engaged in the discharge of
governmental f!nctions& Hence, the death of
the passenger PP tragic and deplorable though
it may be PP imposed on the municipality no
duty to pay monetary compensation&
4.R. No. L-3067 No6e>ber 22!
973
61.
7ON. 4&ILLERMO P. :ILLASOR!
ET. AL.
/0$'#:
,n the petition filed by the )epublic of
the +hilippines, a summary of facts was set
forth thus:
0 decision was rendered in favor of
respondents +& J& Liener $o&, Ltd&, Favino
*nchuan, and ,nternational $onstruction
$orporation, and against the petitioner herein,
confirming the arbitration award in the
amount of +:,<:3,(;E&4., sub%ect of #pecial
+roceedings& )espondent Judge Killasor, issued
an 7rder declaring the aforestated decision
final and e5ecutory, directing the #heriffs of
)i=al +rovince, Rue=on $ity ?as well as@ 1anila
to e5ecute the said decision& +ursuant to the
said 7rder, the corresponding 0lias 6rit of
E5ecution ?was issued@& 7n the strength of the
afore2mentioned 0lias 6rit of E5ecution, the
+rovincial #heriff of )i=al respondent herein"
served notices of garnishment with several
Ban!s, specially on the monies due the 0rmed
/orces of the +hilippines in the form of deposits
sufficient to cover the amount mentioned in
the said 6rit of E5ecution& 'he +hilippine
Keterans Ban! received the same notice of
garnishment& 'he funds of the 0rmed /orces of
the +hilippines on deposit with the Ban!s,
particularly, with the +hilippine Keterans Ban!
and the +hilippine 8ational Ban! ?or@ their
branches are public funds duly appropriated
and allocated for the payment of pensions of
retirees, pay and allowances of military and
civilian personnel and for maintenance and
operations of the 0rmed /orces of the
+hilippines&
,##*E: 678 the )epublic can invo!e state
immunity from suit&
HELD: 9E#&
#ince government funds and properties
may not be sei=ed under writs of e5ecution or
garnishment to satisfy such %udgments, is
based on obvious considerations of public
policy& Disbursements of public funds must be
covered by the corresponding appropriation as
required by law& 'he functions and
public services rendered by the #tate cannot
be allowed to be paraly=ed or disrupted by the
diversion of public funds from their legitimate
and specific ob%ects, as appropriated by law&
A.M. No. RT$-0"-9"9
61. $&D4E :ICENTE A. 7IDAL4O!
Pre1*0*#/ $u0/e o. +,e Re/*o#a)
Tr*a) Cour+ o. Ma#*)a! 'ra#8, 37
/0$'#:
'arcila Laperal 1endo=a filed an action
for the annulment or declaration of nullity of
the title and deed of sale, reconveyance andJor
recovery of ownership and possession a
property against the )epublic of the
+hilippinesin the )'$ of 1anila&
,t is also !nown as the Arleg!i
4esidence which housed two +hilippine
presidents and which now holds the 7ffice of
the +ress #ecretary and the 8ews ,nformation
Bureau&
'he case was initially dismissed by the
presiding Judge of the 1anila )'$ Branch (-"
on the ground of state immunity& 'he case was
re2raffled to the 1anila )'$ Branch (<", with
respondent Kicente 0& Hidalgo as presiding
Judge& ,n an 7rder, Judge Hidalgo declared the
)epublic in default for failure of #olicitor
Fabriel /rancisco )amire=, the handling
solicitor, to file the required 0nswer within the
period prayed for in his motion for e5tension&
,t is contended that the respondent
Judge violated the $onstitution and the
fundamental rule that government funds are
e5empt from e5ecution or garnishment when
he caused the issuance of the writ of e5ecution
against the )epublic&
,##*E: 678 the )epublic can invo!e immunity
from suit&
HELD:
,t is settled that when the #tate gives
its consent to be sued, it does not thereby
necessarily consent to an unrestrained
e5ecution against it& 'ersely put, when the
#tate waives its immunity, all it does, in effect,
is to give the other party an opportunity to
prove, if it can, that the state has a liability&
'he functions and public services
rendered by the #tate cannot be allowed to
paraly=ed or disrupted by the diversion of
public funds from their legitimate and specific
ob%ects, as appropriated by law
4.R. No1. 29292-99 O8+ober !
990
M&NICIPALITY OF MAEATI 61.
T7E 7ONORA'LE CO&RT OF
APPEALS! 7ON. SAL:ADOR P. DE
4&5MAN! $R.! a1 $u0/e RTC o.
MaGa+*! 'ra#8, CDLII ADMIRAL
FINANCE CREDITORS
CONSORTI&M! INC.! a#0
S7ERIFF SIL:INO R. PASTRANA
/0$'#:
'he present petition for review is an
off2shoot of e5propriation proceedings initiated
by petitioner 1unicipality of 1a!ati against
private respondent 0dmiral /inance $reditors
$onsortium, ,nc&, Home Building #ystem S
)ealty $orporation and one 0rceli +& Jo,
involving a parcel of land and improvements
and registered in the name of the latter&
,t was certified that a ban! account
had been opened with the +8B Buendia Branch
under petitionerCs name made pursuant to the
provisions of +res& Decree 8o& 43& 0fter due
hearing where the parties presented their
respective appraisal reports regarding the
value of the property, respondent )'$ %udge
rendered a decision fi5ing the appraised value
of the property at +-,3;:,EEE&.., and ordering
petitioner to pay this amount minus the
advanced payment which was earlier released
to private respondent&
+etitioner however refused to comply
with the garnishment despite its having two
ban! accounts in +8B& 'he first one was
dedicated for e5propriation proceedings while
the other was for public funds& 'he first ban!
account cannot cover the remaining amount
due, while the other account had more than
enough to satisfy the amount due& +etitioner
reasoned out that its funds at the +8B Buendia
Branch could neither be garnished nor levied
upon e5ecution, for to do so would result in the
disbursement of public funds without the
proper appropriation required under the law&
,##*E: 678 the 1unicipality of 1a!ati is
e5empt from paying %ust compensation&
HELD: 87&
/or three years now, petitioner has
en%oyed possession and use of the sub%ect
property notwithstanding its ine5cusable failure
to comply with its legal obligation to pay %ust
compensation& 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 ta!ing& 6ithout prompt payment,
compensation cannot be considered I%ustI for
the property owner is made to suffer the
consequence of being immediately deprived of
his land while being made to wait for a long
period&
'he #tateCs power of eminent domain
should be e5ercised within the bounds of fair
play and %ustice& ,n the case at bar, considering
that valuable property has been ta!en, the
compensation to be paid fi5ed and the
municipality is in full possession and utili=ing
the property for public purpose, for three ("
years, the $ourt finds that the municipality has
had more than reasonable time to pay full
compensation&
4.R. No. 63222 O8+ober 2! 200"
TERESITA M. Y&$&ICO 61.
7ON. $OSE L. ATIEN5A! ET. AL.
/0$'#:
7n H December :;;-, the $ity $ouncil
of 1anila enacted an ordinance authori=ing the
$ity 1ayor to acquire by negotiation or
e5propriation certain parcels of land for
utili=ation as a site for the /rancisco Benite=
Elementary #chool& /ailing to acquire the land
by negotiation, the $ity filed a case for
eminent domain against petitioner as owner of
the property&
,t is the $ity #chool Board which has
the authority to pass a resolution allocating
funds for the full satisfaction of the %ust
compensation fi5ed, the said body is hereby
given thirty (." days from receipt to pass the
necessary resolution for the payments of the
remaining balance due to 9u%uico& However,
despite petitioner demanding compliance from
the $#B after (. days, the latter still did not
ta!e action&
,##*E: 678 respondent is %ustified in not
paying the petitioner her %ust compensation&
HELD: 87&
6hile this $ourt recogni=es the power
of LF* to e5propriate private property for
public use, it will not stand idly by while the
e5propriating authority maneuvers to evade
the payment of %ust compensation of property
already in its possession&
'he notion of e5propriation is hard
enough to ta!e for a private owner& He is
compelled to give up his property for the
common weal& But to give it up and wait in
vain for the %ust compensation decreed by the
courts is too much to bear& ,n cases li!e these,
courts will not hesitate to step in to ensure
that %ustice and fair play are served&
4.R. No. 7776" Au/u1+ "! 922
SE'ASTIAN COSC&LL&ELA 61.
T7E 7ONORA'LE CO&RT OF
APPEALS a#0 +,e REP&'LIC OF
T7E P7ILIPPINES! re-re1e#+e0 by
NATIONAL IRRI4ATION
ADMINISTRATION
/0$'#:
'he )epublic of the +hilippines filed a
complaint with the $ourt of /irst ,nstance of
,loilo to e5propriate two parcels of land in the
municipality of Barotac, ,loilo owned by
petitioner #ebastian $osculluela and one 1ita
Lumampao, for the construction of the canal
networ! of the Barotac ,rrigation +ro%ect&
'he trial court rendered a decision
granting the e5propriation and ordered the
public respondent to pay Lumampao, the sum
of +3.,... and $osculluela, the sum of
+3..,...&..&
'he )epublic contends that the funds
of the 8ational ,rrigation 0uthority 8,0" are
government funds and therefore, cannot be
disbursed without a government appropriation&
,##*E: 678 the )epublic is e5empt from
paying the %ust compensation demanded by
the petitioner in view of non2disbursement of
funds without prior public appropriation&
HELD: 87&
7ne of the basic principles enshrined in
our $onstitution is that no person shall be
deprived of his private property without due
process of lawD and in e5propriation cases, an
essential element of due process is that there
must be %ust compensation whenever private
property is ta!en for public use&
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
ta!ing&
4.R. No. 0939 De8e>ber !
993
T7E 7OLY SEE 61.
T7E 7ON. ERI'ERTO &.
ROSARIO! $R.! a1 Pre1*0*#/ $u0/e
o. +,e Re/*o#a) Tr*a) Cour+ o.
MaGa+*! 'ra#8, 6 a#0
STAR'RI47T SALES
ENTERPRISES! INC.
/0$'#:
'his petition arose from a controversy
over a parcel of land, Lot -20, located in the
1unicipality of +araQaque, 1etro 1anila and
registered in the name of petitioner& #aid Lot
-20 is contiguous to Lots -2B and -2D
registered in the name of the +hilippine )ealty
$orporation +)$"& 'he three lots were sold to
)amon Licup, through 1sgr& Domingo 0&
$irilos, Jr&, acting as agent to the sellers& Later,
Licup assigned his rights to the sale to private
respondent, #tarbright Enterprises&
'he squatters refused to vacate the
lots sold to private respondent so a dispute
arose as to who of the parties has the
responsibility of evicting and clearing the land
of squatters occurred& $omplicating the
relations of the parties was the sale by
petitioner of Lot -20 to 'ropicana +roperties
and Development $orporation 'ropicana"&
+rivate respondent filed a complaint for
annulment of the sale of the three parcels of
land, and specific performance and damages
against petitioner, represented by the +apal
8uncio, and three other defendants: namely,
1sgr& Domingo 0& $irilos, Jr&, the +)$ and
'ropicana&
,##*E: 678 the petitioner Holy #ee is immune
from suit&
HELD: 9E#&
'he logical question is whether the
foreign state is engaged in the activity in the
regular course of business& ,f the foreign state
is not engaged regularly in a business or trade,
the particular act or transaction must then be
tested by its nature& ,f the act is in pursuit of a
sovereign activity, or an incident thereof, then
it is an act 5!re imerii, especially when it is
not underta!en for gain or profit&
Lot -20 was acquired by petitioner as a
donation from the 0rchdiocese of 1anila& 'he
donation was made not for commercial
purpose, but for the use of petitioner to
construct thereon the official place of residence
of the +apal 8uncio& 'he right of a foreign
sovereign to acquire property, real or personal,
in a receiving state, necessary for the creation
and maintenance of its diplomatic mission, is
recogni=ed in the :;E: Kienna $onvention on
Diplomatic )elations&
,n 0rticle (:a" of the $onvention, a
diplomatic envoy is granted immunity from the
civil and administrative %urisdiction of the
receiving state over any real action relating to
private 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& ,f this immunity is
provided for a diplomatic envoy, with all the
more reason should immunity be recogni=ed as
regards the sovereign itself, which in this case
is the Holy #ee&
4.R. No. "370". $u#e 26! 2003
T7E REP&'LIC OF INDONESIA!
7IS EDCELLENCY AM'ASSADOR
SOERATMIN! a#0 MINISTER
CO&NSELLOR A57ARI EASIM vs.
$AMES :IN5ON! 0o*#/ bu1*#e11
u#0er +,e #a>e a#0 1+y)e o.
:IN5ON TRADE AND SER:ICES
/0$'#:
+etitioner, )epublic of ,ndonesia,
represented by its $ounsellor entered into a
1aintenance 0greement with respondent
James Kin=on, owner of Kin=on 'rade and
#ervices& 'he 1aintenance 0greement stated
that respondent shall, for a consideration,
maintain specified equipment at the Embassy
1ain Building, Embassy 0nne5 Building and the
6isma Duta, the official residence of petitioner
0mbassador #oeratmin& 'he equipment
covered by the 1aintenance 0greement are air
conditioning units, generator sets, electrical
facilities, water heaters, and water motor
pumps& ,t is li!ewise stated therein that the
agreement shall be effective for a period of
four years and will renew itself automatically
unless cancelled by either party by giving thirty
days prior written notice from the date of
e5piry&
+etitioners claim that sometime prior to
the date of e5piration of the said agreement,
or before 0ugust :;;;, they informed
respondent that the renewal of the agreement
shall be at the discretion of the incoming $hief
of 0dministration& 6hen the $hief of
0dministration assumed his position, he
allegedly found respondent>s wor! and services
unsatisfactory and not in compliance with the
standards in the 0greement& Hence, the
,ndonesian Embassy terminated the
agreement& +etitioners claim, that they had
earlier verbally informed respondent of their
decision to terminate the agreement&
7n the other hand, respondent claims that
the aforesaid termination was arbitrary and
unlawful& Hence, he filed a complaint against
the petitioners which opposed by invo!ing
immunity from suit&
,##*E: 678 the )epublic of ,ndonesia can
successfully invo!e state immunity from suit&
HELD: 9E#&
'here is no dispute that the
establishment of a diplomatic mission is an
act 5!re imerii& 0 sovereign #tate does not
merely establish a diplomatic mission and
leave it at thatD the establishment of a
diplomatic mission encompasses its
maintenance and up!eep& Hence, the #tate
may enter into contracts with private entities
to maintain the premises, furnishings and
equipment of the embassy and the living
quarters of its agents and officials& ,t is
therefore clear that petitioner )epublic of
,ndonesia was acting in pursuit of a sovereign
activity when it entered into a contract with
respondent for the up!eep or maintenance&
'he #olicitor Feneral, in his $omment,
submits the view that, Athe 1aintenance
0greement was entered into by the )epublic of
,ndonesia in the discharge of its governmental
functions& ,n such a case, it cannot be deemed
to have waived its immunity from suit&B
4.R. No. 32396. February !
2003
E7OSROB MIN&C7ER vs. 7ON.
CO&RT OF APPEALS a#0 ART7&R
SCAL5O
/0$'#:
#ometime in 1ay :;HE, an ,nformation for
violation of #ection 4 of )epublic 0ct 8o& E43-,
otherwise also !nown as the ADangerous Drugs
0ct of :;<3,B was filed against petitioner
Lhosrow 1inucher and one 0bbas 'orabian&
'he criminal charge followed a Abuy2bust
operationB conducted by the +hilippine police
narcotic agents in the house of 1inucher, an
,ranian national, where a quantity of heroin, a
prohibited drug, was said to have been
sei=ed& 'he narcotic agents were accompanied
by private respondent 0rthur #cal=o who
would, in due time, become one of the
principal witnesses for the prosecution& 7n .H
January :;HH, +residing Judge Eutropio 1igrino
rendered a decision acquitting the two
accused&
,##*E: 678 respondent #cal=o can invo!e
immunity from suit&
HELD: 9E#&
'he doctrine of immunity from suit will not
apply and may not be invo!ed where the public
official is being sued in his private and personal
capacity as an ordinary citi=en& 'he cloa! of
protection afforded the officers and agents of
the government is removed the moment they
are sued in their individual capacity& 'his
situation usually arises where the public official
acts without authority or in e5cess of the
powers vested in him
0 foreign agent, operating within a
territory, can be cloa!ed with immunity from
suit but only as long as it can be established
that he is acting within the directives of the
sending state& 'he consent of the host state is
an indispensable requirement of basic courtesy
between the two sovereigns&
'he %ob description of #cal=o has tas!ed
him to conduct surveillance on suspected drug
suppliers and, after having ascertained the
target, to inform local law enforcers who would
then be e5pected to ma!e the arrest& ,n
conducting surveillance activities on 1inucher,
later acting as the poseur2buyer during the
buy2bust operation, and then becoming a
principal witness in the criminal case against
1inucher, #cal=o hardly can be said to have
acted beyond the scope of his official function
or duties&
0ll told, this $ourt is constrained to rule
that respondent 0rthur #cal=o, an agent of the
*nited #tates Drug Enforcement 0gency
allowed by the +hilippine government to
conduct activities in the country to help contain
the problem on the drug traffic, is entitled to
the de(ense o( state immunity (rom suit.
4.R. No. 23772 Au/u1+
3! 2007
PRESIDENTIAL COMMISSION ON
4OOD 4O:ERNMENT a#0
MA4TAN44OL C. 4&NI4&NDO! *#
,*1 8a-a8*+y a1 C7AIRMAN +,ereo.
61.
SANDI4AN'AYAN a#0 OFFICECO
7OLDIN4S! N.:.
/0$'#:
7n < 0pril :;HE, in connection with criminal
proceedings initiated in the +hilippines to
locate, sequester and see! restitution of
alleged ill2gotten wealth amassed by the
1arcoses and other accused from the
+hilippine Fovernment,
:
the 7ffice of the
#olicitor Feneral 7#F" wrote the /ederal
7ffice for +olice 1atters in Berne, #wit=erland,
requesting assistance for the latter office to:
a" ascertain and provide the 7#F with
information as to where and in which cantons
the ill2gotten fortune of the 1arcoses and other
accused are located, the names of the
depositors and the ban!s and the amounts
involvedD and b" ta!e necessary precautionary
measures, such as sequestration, to free=e the
assets in order to preserve their e5isting value
and prevent any further transfer thereof
herein referred to as the ,10$ request"& 'he
7ffice of the District 0ttorney in Ourich,
pursuant to the 7#F>s request, issued an 7rder
directing the #wiss Ban!s in Ourich to free=e
the accounts of the accused&
,##*E: 678 the #wiss officials can invo!e
state immunity from suit&
HELD: 87&
'he act of state doctrine is one of the
methods by which #tates prevent their national
courts from deciding disputes which relate to
the internal affairs of another #tate, the other
two being immunity and non2%usticiability& ,t is
an avoidance technique that is directly related
to a #tate>s obligation to respect the
independence and equality of other #tates by
not requiring them to submit to ad%udication in
a national court or to settlement of their
disputes without their consent& ,t requires the
forum court to e5ercise restraint in the
ad%udication of disputes relating to legislative
or other governmental acts which a foreign
#tate has performed within its territorial limits&
,t is petitioners> contention that the
#andiganbayan Icould not grant or deny the
prayers in ?7fficeco>s@ complaint without first
e5amining and scrutini=ing the free=e order of
the #wiss officials in the light of the evidence,
which however is in the possession of said
officialsI and that it would therefore Isit in
%udgment on the acts of the government of
another country&I 6e disagree&
'he parameters of the use of the act of
state doctrine were clarified in 6anco 3acional
de ,!ba v. Sabbatino.

'here, the *&#& #upreme
$ourt held that international law does not
require the application of this doctrine nor does
it forbid the application of the rule even if it is
claimed that the act of state in question
violated international law& 1oreover, due to the
doctrine>s peculiar nation2to2nation character,
in practice the usual method for an individual
to see! relief is to e5haust local remedies and
then repair to the e5ecutive authorities of his
own state to persuade them to champion his
claim in diplomacy or before an international
tribunal&
4.R. No. 2"26". $a#uary 22! 200
$EFFREY LIAN4 97&EFEN4; 61.
PEOPLE OF T7E P7ILIPPINES
/0$'#:
+etitioner is an economist wor!ing with
the 0sian Development Ban! 0DB"& #ometime
in :;;4, for allegedly uttering defamatory
words against fellow 0DB wor!er Joyce $abal,
he was charged before the 1etropolitan 'rial
$ourt 1e'$" of 1andaluyong $ity with two
counts of grave oral defamation&
+etitioner was arrested by virtue of a
warrant issued by the 1e'$& 0fter fi5ing
petitioner>s bail, the 1e'$ released him to the
custody of the #ecurity 7fficer of 0DB& 'he
ne5t day, the 1e'$ %udge received an Ioffice of
protocolI from the D/0 stating that petitioner
is covered by immunity from legal process
under #ection 4- of the 0greement between
the 0DB and the +hilippine Fovernment
regarding the Headquarters of the 0DB
hereinafter 0greement" in the country& Based
on the said protocol communication that
petitioner is immune from suit, the 1e'$ %udge
without notice to the prosecution dismissed the
two criminal cases&
,##*E: 678 petitioner Liang is immune from
suit&
HELD: 87&
#landering a person could not possibly
be covered by the immunity agreement
because our laws do not allow the commission
of a crime, such as defamation, in the name of
official duty& ,t is well2settled 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 %urisdiction&
#E+0)0'E $78$*)),8F 7+,8,78 7/ J*#',$E
+*87:
The Charter of the ADB p!o"ides unde! #!ticle
$$%i& that office!s and employees of the ban' shall
be immune f!om legal p!ocess with !espect to acts
pe!fo!med by them in thei! official capacity e(cept
when the )an' wai"es immunity. Section *$ %a& of
the #D) +ead,ua!te!s #g!eement acco!ds the
same immunity to the office!s and staff of the
ban'. There can be no dispute that international
officials are entitled to immunity only with
respect to acts performed in their official
capacity, unlike international organizations
which enjoy absolute immunity
Clea!ly, the most impo!tant immunity to an
inte!national official, in the discha!ge of his
inte!national functions, is immunity f!om local
ju!isdiction. The!e is no a!gument in doct!ine o!
p!actice with the p!inciple that an inte!national
official is independent of the ju!isdiction of the local
autho!ities fo! his official acts. Those acts a!e not
his, but a!e imputed to the o!gani-ation, and without
wai"e! the local cou!ts cannot hold him liable fo!
them. In strict law, it would seem that een the
organization itself could hae no right to waie
an official!s immunity for his official acts" This
permits local authorities to assume jurisdiction
oer and indiidual for an act which is not, in
the wider sense of the term, his act at all" It is
the organization itself, as a juristic person,
which should waie its own immunity and
appear in court, not the indiidual, e#cept
insofar as he appears in the name of the
organization"
+isto!ically, inte!national officials we!e g!anted
diplomatic p!i"ileges and immunities and we!e thus
conside!ed immune fo! both p!i"ate and official
acts. .n p!actice, this wide g!ant of diplomatic
p!e!ogati"es was cu!tailed because of p!actical
necessity and because the p!ope! functioning of the
o!gani-ation did not !e,ui!e such e(tensi"e
immunity fo! its officials. Thus, the current status
of the law does not maintain that states grant
jurisdictional immunity to international officials
for acts of their priate lies"
Unde! the /ienna Con"ention on Diplomatic
Relations, a diplomatic en"oy is immune f!om
c!iminal ju!isdiction of the !ecei"ing State fo! all
acts, whethe! p!i"ate o! official, and hence he
cannot be a!!ested, p!osecuted and punished fo!
any offense he may commit, unless his diplomatic
immunity is wai"ed.
0
1n the othe! hand, officials
of international organizations enjoy $functional%
immunities, that is, only those necessary for the
e#ercise of the functions of the organization
and the fulfillment of its purposes. This is the
!eason why the ADB Charter and &ead'uarters
Agreement e(plicitly g!ant immunity f!om legal
p!ocess to ban' office!s and employees only with
!espect to acts pe!fo!med by them in thei! official
capacity, e(cept when the )an' wai"es
immunity. In other words, officials and
employees of the ADB are subject to the
jurisdiction of the local courts for their priate
acts, notwithstanding the absence of a waier
of immunity"
Conside!ing that ban' officials and employees a!e
co"e!ed by immunity only fo! thei! official acts, the
necessa!y infe!ence is that the authority of the
Department of Affairs, or een of the ADB for
that matter, to certify that they are entitled to
immunity is limited only to acts done in their
official capacity. Stated othe!wise, it is not within
the powe! of the D2#, as the agency in cha!ge of
the e(ecuti"e depa!tment3s fo!eign !elations, no!
the #D), as the inte!national o!gani-ation "ested
with the !ight to wai"e immunity, to in"o'e immunity
fo! p!i"ate acts of ban' official and employees,
since no such p!e!ogati"e e(ists in the fi!st place. .f
the immunity does not e(ist, the!e is nothing to
ce!tify.
4.R. No. "232 A-r*) 6!
2009
DE&TSC7E 4ESELLSC7AFT FIR
TEC7NISC7E
5&SAMMENAR'EIT! ET. AL. 61.
7ON. CO&RT OF APPEALS! ET. AL.
/0$'#:
'he governments of the /ederal
)epublic of Fermany and the )epublic of the
+hilippines ratified an 0greement called #ocial
Health ,nsuranceN8etwor!ing and
Empowerment #H,8E which was designed to
Ienable +hilippine familiesPespecially poor
onesPto maintain their health and secure
health care of sustainable quality&I +rivate
respondents were engaged as contract
employees hired by F'O to wor! for #H,8E&
8icolay, a Belgian national, assumed
the post of #H,8E +ro%ect 1anager&
Disagreements eventually arose between
8icolay and private respondents in matters
such as proposed salary ad%ustments, and the
course 8icolay was ta!ing in the
implementation of #H,8E different from her
predecessors&
'he dispute culminated in a signed by
the private respondents, addressed to 8icolay,
and copies furnished officials of the D7H,
+hilheath, and the director of the 1anila office
of F'O& 'he letter raised several issues which
private respondents claim had been brought up
several times in the past, but have not been
given appropriate response&
,n response, 8icolay wrote each of the
private respondents a letter, all similarly
worded e5cept for their respective addressees&
#he informed private respondents that they
could no longer find any reason to stay with
the pro%ect unless 0LL of these issues be
addressed immediately and appropriately&
*nder the foregoing premises and
circumstances, it is now imperative that , am
to accept your resignation, which , e5pect to
receive as soon as possible&
8egotiations ensued between private
respondents and 8icolay, but for naught& Each
of the private respondents received a letter
from 8icolay, informing them of the pre2
termination of their contracts of employment
on the grounds of Iserious and gross
insubordination, among others, resulting to
loss of confidence and trust&I
HELD: 87&
'his self2description of F'O in its own
official website gives further cause for pause in
adopting petitioners> argument that F'O is
entitled to immunity from suit because it is Ian
implementing agency&I 'he above2quoted
statement does not dispute the
characteri=ation of F'O as an Iimplementing
agency of the /ederal )epublic of Fermany,I
yet it bolsters the notion that as a company
organi=ed under private law, it has a legal
personality independent of that of the /ederal
)epublic of Fermany&
'he $ourt is thus holds and so rules
that F'O consistently has been unable to
establish with satisfaction that it en%oys the
immunity from suit generally en%oyed by its
parent country, the /ederal )epublic of
Fermany&

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