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Case 13

Republic of the Philippines vs. Sandoval

G.R. No. 84607, March 19, 1993


Case 20
Social Security System (SSS) vs. Court of Appeals
G.R. No. L-41299, February 21, 1983

FACTS: On March 1963, spouses David B. Cruz and Socorro Concio Cruz (respondents) were granted
a real estate loan by SSS with their residential lot as a collateral. From the proceeds of the real
estate loan, the mortgagors (these are, Mr. & Mrs. Cruz ) constructed their residential house on the
mortgaged property (ang gi mortgage na property katong residential lot na ilang gi-use as collateral,
that is, the residential lot mentioned). Upon the delays of monthly payments by the respondents,
thereby having irregularities in the terms of the contract, on July 1968, SSS filed an application with
the Provincial Sheriff of Rizal for the foreclosure of the real estate mortgage executed by the
spouses on this ground. Pursuant to the application of foreclosure, the notice of the Sheriffs Sale of
the mortgaged property was initially published in the Sunday Chronicle. Before the second
publication of notice, spouses Cruz wrote to SSS to withdraw the foreclosure1 and discontinue the
publication of the notice of sale on their contention that they have not defaulted their payments.
The request was not granted on SSSs contention that it has right to foreclose by virtue of the
automatic acceleration clause2 provided in the mortgage contract. The RTC awarded damages in
favor of the spouses to which the Court of Appeals affirms.

ISSUE: 1. Whether or not the Cruz spouses had, in fact, violated their real estate mortgage contract `
with SSS as would have warranted the foreclosure
2. Whether or not the SSS can be held liable for damages, as it claims to have the immunity
from suit as a government agency
RULING: 1. On the first issue, upon the findings of the Court of Appeals, the SSS application for
foreclosure is not justified because, while it is true the payments of the monthly installments were
previously not regular, it is a fact that as of June 30, 1968 the spouses were up-to-date and current
in payment if their monthly installments. Having accepted the irregular or delayed payments would
not entitle SSS to suddenly and without prior notice to the mortgagors apply for extrajudicial
2. SSS performs governmental or proprietary functions and has corporate powers separate and
distinct from the Government. SSSs acts, natural or incidental, specifically provides that it can sue
and be sued in Court. By virtue of the explicit provision of the aforementioned enabling law, the
Government must be deemed to have waived immunity with respect to SSS. As stated in the case,
there was clear negligence on the part of SSS when they mistook the loan account of Socorro J. Cruz
of that private respondent Socorro C. Cruz. This gross negligence will render SSS be sued in favor of

1Foreclosure-extinguishment of mortgagors right of redeeming a mortgaged estate ( based sa case:

spouses Cruz has been stripped off their rights to their residential lot kay wala sila kabayad daw)
2Acceleration Clause- (magbisaya ko) action ni sha either to shorten the payment period or mag-
foreclose before stipulated term if the mortgagor cannot follow the terms of the contracts

Case 27
Lansang vs. Court of Appeals
G.R. No 102667, February 23, 2000

FACTS: General Assembly of the Blind, INC. (GABI) were allegedly awarded a verbal contract of
lease located at Rizal park, a public park, in 1970 by the previous Chairman of National Parks
Development Committee (NPDC), a government initiated civic body engaged in the development of
national parks. GABI were permitted to operate office and library space as well as kiosks area
selling food and drinks. With the change of government after EDSA Revolution, the new chairman of
NPDC Amado J. Lansang, the petitioner herein, sought to clean up Rizal Park. The petitioner then
issued a written notice to terminate the alleged verbal contract of lease and demanded GABI to
vacate the premises and then kiosks it ran privately within the public park. Upon this event, GABI
filed an action for damages and injunction in the RTC against petitioner, contending that GABI
president Jose Iglesias, who is totally blind, was deceived into conforming and signing the notice.
RTC dismissed the case, ruling that the complaint was actually directed against the State without its
consent. Moreover, RTC ruled that GABI could not claim damages under the alleged oral lease
agreement since GABI was a mere accommodation concessionaire. However, the Court of Appeals
reversed the decision of RTC and ruled that the mere allegation that a government official is being
sued in his official capacity is not enough to protect such official from liability for acts done without
or in excess of his authority. CA also found petitioner liable for damages under Articles 19, 21, and
24 of the Civil Code1.
ISSUE: Whether or not petitioner (Lansang) abused his authority in ordering the ejectment of
private respondents (GABI) and be liable for damages
RULING: Supreme Court found no evidence of such abuse of authority on the part of Lansang. Since
Rizal park is a public park and is beyond the commerce of man, it cannot be subject to a lease
contract. The private respondents were allowed to occupy office and kiosk spaces in the park as a
mere accommodation by previous administration. Private respondents cannot claim vested right to
continue to occupy Rizal Park. The petitioner may validly discontinue accommodation extended to
private respondents, who may be ejected from the park when necessary. The doctrine of state
immunity applies in this case since the petitioner as a public official has only done performance of
his duties within his official capacity. SC granted the instant petition, set aside the decision of CA,
and dismissed the complaint for damages for want of merit.

1Naa ni sa atong klase sa Persons, and understandable ra ang articles

Case 35
Malong vs. Philippine National Railways
G.R. No. L-49930, August 7, 1985

FACTS: Francisco Malong and Rosalina Malong, petitioners, filed a complaint against Philippine
National Railways (PNR) because their son Jaime, a paying passenger, was killed when he fell from
a PNR train while it was between Tarlac and Capas. The tragedy occurred because Jaime had to sit
near the door of a coach. The train was overloaded with passengers and baggage in view of the
proximity of All Saints Day. Under the Solicitor Generals motion, RTC dismissed the complaint and
ruled that it has no jurisdiction because the PNR, being a government instrumentality, the action
was a suit against the State (Sec. 16, Article XV of the Constitution). (Note: Manila Railroad
Company, the PNRs predecessor, as a common carrier, was not immune from suit in its charter). The
Malong spouses then appealed.

ISSUE: Whether or not the State act in a sovereign capacity or in a corporate capacity when it
organized the PNR for the purpose of engaging in transportation
RULING: According to SC, the State divested itself of its sovereign capacity when it organized the
PNR, which is no different from its predecessor, the Manila Railroad Company (MRC). The PNR did
not become immune from suit. Accordingly, suits against State agencies with respect to matters in
which they have assumed to act in a private or non-governmental capacity are not suits against the
State. When the government enters into a commercial business, it abandons its sovereign capacity
and is to be treated like any other corporation1. As common carrier, PNR is not performing any
governmental functions, hence PNR cannot enjoy the immunity from suit. It would be unjust if the
heirs of the victim of an alleged negligence of the PNR could not be sued for damages. As held, the
order of dismissal is reversed and set aside.

1Section 36 of the Corporation Code provides that every corporation has the power to sue and be
sued in its corporate name.