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Case No.

G.R. No. 104226 August 12, 1993


CONCHITA ROMUALDEZ-YAP, petitioner, vs. THE CIVIL SERVICE COMMISSION and THE PHILIPPINE
NATIONAL BANK, respondents.

PADILLA, J.:
This is a special civil action for certiorari under Rule 65 of the Rules of Court, assailing Resolution No. 92-201 of the
respondent Civil Service Commission, which upheld the petitioner's separation from the Philippine National
Bank(PNB) as a result of the abolition of the Fund Transfer Department pursuant to a reorganization under
Executive Order No. 80, dated 3 December 1986.
Petitioner Conchita Romualdez-Yap started working with the Philippine National Bank on 20 September 1972 as
special assistant with the rank of Second Assistant Manager assigned to the office of the PNB President. After
several promotions, she was appointed in 1983 Senior Vice President assigned to the Fund Transfer Department.
Starting 1 April 1986 up to 20 February 1987, petitioner filed several applications for leave of absence (due to
medical reasons) which were duly approved. While she was on leave, Executive Order No. 80 (Revised Charter of
the PNB) was approved on 3 December 1986. Said executive order authorized the restructure/reorganization and
rehabilitation of PNB. Pursuant to the reorganization plan, the Fund Transfer Department was abolished and its
functions transferred to the International Department.
Consequently, petitioner was notified of her separation from the service in a letter dated 30 January 1987, thus:
Pursuant to the Transitory Provision of the 1986 Revised Charter of the Bank, please be informed that
Management has approved your separation from the service effective February 16, 1986. You shall be entitled to
the regular benefits allowed under existing law. (emphasis supplied)
Please be informed further that under Sec. 37 of the Bank's 1986 Revised Charter, any officer or employee who
feels aggrieved by any matter treated above may submit his case to the Civil Service
Commission.1
This letter was received by petitioner's secretary at the PNB head office on 16 February 1987.
Petitioner's first recorded appeal to the Civil Service Commission questioning her separation is a letter dated 4
August 1989. Then CSC Chairman Samilo N. Barlongay upheld the validity of her separation from the service in a
letter/opinion dated 30 August 1989 (this was allegedly received by petitioner only on 26 February 1990) stating
thus:
xxx xxx xxx
It may be mentioned in this connection, that inasmuch as you did not avail of the ERIP/Supplementary Retirement
Plans adopted by the PNB in 1986, you have therefore lost your right thereto. Moreover, since you lack the
required number of years of service to entitle you to retirement benefits under existing laws, you may be entitled
to the return of your GSIS personal contributions. Considering further that you have exhausted all your
accumulated leave credits as you went on leave of absence for the period from April 1, 1986 to February 20, 1987,
there is no legal or valid basis to entitle you to payment of terminal leave.
Finally, pursuant to Section 16, Article XVIII of the Transitory Provisions of the 1987 Philippine Constitution, you
may be entitled to payment of separation subject to auditing rules and regulations.2
In her motion for reconsideration with the Civil Service Commission, dated 5 March 1990, questioning Chairman
Barlongay's ruling, petitioner claimed:
1. The opinion/ruling was not fully supported by the evidence on record;
2. Errors of law prejudicial to the interest of the movant have been committed. She argued:
. . . that her separation from the service was illegal and was done in bad faith considering that her termination
on February 16, 1986 was made effective prior to the effectivity of Executive Order No. 80 on December 3, 1986,
which law authorized the reorganization of the PNB, and even before February 25, 1986, when President Corazon
C. Aquino came into power. She further claims that although the notice of termination was dated January 30, 1987
it was only served upon her on February 16, 1987 when the new Constitution which guarantees security of tenure
to public employees was already in effect.3
xxx xxx xxx
. . . the bad faith in her separation from the service in 1987 was evident from the recent restoration of the Fund
Transfer Department as a separate and distinct unit from the International Department . . . 4
Denying the motion for reconsideration, the Civil Service Commission in its aforecited Resolution No. 92-201,
dated 30 January, 1992, ruled:
Sec. 33 of EO 80 (1986 Revised Charter of the PNB) provides:
Sec. 33. Authority to Reorganize. In view of reduced operations contemplated under this charter in pursuance of
the national policy expressed in the "Whereas" clause hereof, a reorganization of the Bank and a reduction in force
are hereby authorized to achieve greater efficiency and economy in operations, including the adoption of a new
staffing pattern to suit the reduced operations envisioned. The program of reorganization shall begin immediately
after the approval of this Order, and shall be completed within six (6) months and shall be fully implemented
within eighteen (18) months thereafter." Clearly; as aforequoted, PNB was authorized to undergo reorganization
and to effect a reduction in force to "achieve greater efficiency and economy in operations". It cannot, be disputed
that reduction in force necessitates, among others, the abolition of positions/offices. The records show that prior to
its reorganization, PNB originally had 7,537 positions which were reduced to 5,405 after the reorganization.
Indeed, 2,132 positions were abolished, that is, the original positions in PNB were reduced by 28%. This reduction
in force likewise included the senior officer positions, in PNB, which were reduced, thus:
Positions Incumbents Proposed Position
President 1 1 1
Sr. Exec. VP 1 1 0
Exec. VP 3 2 2
Senior VP 12 11 7
Vice Pres. 33 27 15
The position of movant Yap (SVP) was one among the original twelve (12) SVP positions. It was one among the five
(5) SVP positions which were abolished. In fact, the FTD of which she was then the incumbent SVP, was merged
with the International Department to which its functions were closedly related.
It should be noted that as ruled by the Supreme Court in Dario vs. Mison (G.R. NO. 81954):
Reorganizations in this jurisdiction have been regarded as valid provided they are pursued in good faith. As a
general rule, a reorganization is carried out in "good faith" if it is for the purpose of economy or to make
bureaucracy more efficient. In that event, no dismissal or separation actually occurs because the position itself
ceases to exist. And in that case, security of tenure would not be a Chinese Wall. . . . .
. . . Good faith, as a component of a reorganization under a constitutional regime is judged from the facts of each
case.
In the instant case, therefore, this Commission is inclined to believe that the reorganization of PNB was done in
good faith. For indeed, the reorganization was pursued to achieve economy. It undertook reduction in force as a
means to streamline the numbers of the workforce. It was incidental that movant Yap's position was one among
those abolished. Movant Yap failed to substantiate her claim by clear and convincing evidence that the abolition of
her position was a result of her close identification with the previous regime, being a sister of former First Lady
Imelda Romualdez Marcos. This being so, and pursuant to the presumption of regularity in the performance of
official functions, the abolition of movant Yap's position should be upheld. PNB, in the instant case, has clearly
proved by substantial evidence that its act in terminating the services of some of its employees was done in good
faith. 5
Overruling her imputation of bad faith, i.e. her separation was illegal because it took effect on 16 February 1986 or
even before the promulgation of EO No. 80 on 3 December 1986, the CSC noted that the year "1986" stated in the
notice of her separation from the service was a typographical error. PNB submitted documents (p. 6 of Resolution
No. 92-201) supporting its stand that the separation actually took effect on 16 February 1987.
On the issue of bad faith as related to the later restoration of the Fund Transfer Department, the subject CSC
resolution adds:
xxx xxx xxx
It may be mentioned that the recent restoration of the Fund Transfer Department, actually was a merger of the
Fund Transfer Group, the Foreign Remittance Development and Coordinating Unit based on board Resolution No.
60 of March 12, 1991, or after the lapse of over four (4) years from the date it was abolished in 1987. Moreover, the
restoration of the Fund Transfer Department and other offices in the PNB was primarily caused by the improved
financial capability and present needs of the Bank. This improved financial condition of the PNB is evident from the
1990 Annual Report it submitted. It may be further stated that the re-established FTD is headed by a Vice
President, a position much lower in rank than the former department headed by a Senior Vice President.
Furthermore, it should be noted that granting arguendo that movant Yap's termination from the service was
tainted with bad faith, she however, is now barred from assailing the same as she did not seasonably assert her
right thereto. Records show that she was separated from PNB on February 16, 1987 and it was only in 1989 or
about 2 years thereafter when she brought this matter to this Commission. By her inaction in questioning her
termination within a period of one year, she is considered to have acquiesced to her separation from the service
and abandoned her right to the position.6
In the present petition before the Court, the following issues are raised:
1. Existence of bad faith in the reorganization of the Philippine National Bank resulting in the separation from the
service of petitioner.
2. Erroneous application of the Dario v. Mison doctrine vis-a-vis PNB's reorganization.
3. Erroneous application of the one (1) year prescriptive period for quo warranto proceedings in petitioner's case.
Dario v. Mison7 laid down the requirement of good faith in the reorganization of a government bureau wherein
offices are abolished. It says:
. . . Reorganizations in this jurisdiction have been regarded as valid provided they are pursued in good faith. As a
general rule, a reorganization is carried out in "good faith" if it is for the purpose of economy or to make
bureaucracy more efficient. In that event, no dismissal (in case of dismissal) or separation actually occurs because
the position itself ceases to exist. And in that case, security of tenure would not be a Chinese wall. Be that as it may,
if the "abolition," which is nothing else but a separation or removal, is done for political reasons or purposely to
defeat security of tenure, or otherwise not in good faith, no valid "abolition" takes place and whatever "abolition" is
done, is void ab initio. There is an invalid "abolition" as where there is merely a change of nomenclature of
positions, or where claims of economy are belied by the existence of ample funds. It is to be stressed that by
predisposing a reorganization to the yardstick of good faith, we are not, as a consequence, imposing a "cause" for
restructuring. Retrenchment in the course of a reorganization in good faith is still removal "not for cause" if by
"cause" we refer to "grounds" or conditions that call for disciplinary action. Good faith, as a component of a
reorganization under a constitutional regime, is judged from the facts of each case.
In Petitioner's case, the following instances are cited by her as indicia of bad faith:
1. The abolished department was later restored and the number of senior vice presidents was increased.
2. PNB did not follow the prescribed sequence of separation of employees from the service contained in Rep. Act
No. 6656 which is:
Sec. 3. In the separation of personnel pursuant to reorganization, the following order of removal shall be followed:
(a) Casual employees with less than five (5) years of government service;
(b) Casual employees with five (5) years or more of government service;
(c) Employees holding temporary appointments; and
(d) Employees holding permanent appointments: Provided, That those in the same category as enumerated above,
who are least qualified in terms of performance and merit shall be laid off first, length of service notwithstanding.
3. Petitioner was not extended preference in appointment to the positions in the new staffing pattern as mandated
by Sec. 4 of Rep. Act 6656, her qualification and fitness for new positions were never evaluated or considered in
violation of Sec. 27 of P.D. 807 which was incorporated as Sec. 29 Ch. 5 Subtitle A, Book V of the Administrative
Code of 1987.
4. Lack of notice and bearing before separation from the service.
5. Petitioner was forced to take a leave of absence and prevented from reporting for work.
6. There is a discrepancy in the date of her separation from the service and the effectivity thereof.
7. PNB employees in the Fund Transfer Department identified with her were reassigned or frozen.
8. She is listed as having resigned instead of being separated or dismissed which was what actually happened.
9. The dismissal was politically motivated, she being a sister of Mrs. Imelda Romualdez Marcos, wife of deposed
President Ferdinand Marcos.
Executive Order No. 80 conferred upon the PNB the authority to reorganize. The order was issued by then Pres.
Corazon Aquino on 3 December 1986 while she was exercising the powers vested in the President of the
Philippines by the Freedom Constitution. After 3 December 1986, what remained to be done was the
implementation of the reorganization. There is no doubt as to the legal basis for PNB's reorganization. The real
question is: was it done in good faith, tested by the Dario v. Mison doctrine?
To start with it is almost absurd for petitioner to insist that her termination from the service was antedated to 16
February 1986. At that time, the reorganization of PNB had not even been conceived. In most of PNB's pleadings, it
has documented and supported its stand that the year of petitioner's separation is 1987 not 1986. The antedating
of the termination date, aside from being clearly a typographical error, is a periphernal issue. The real issue is
existence of bad faith consisting of tangible bureaucratic/management pressures exerted to ease her out of office.
Bad faith has been defined as a state of mind affirmatively operating with furtive design or with some motive of self
interest or ill will or for an ulterior purpose.8 It is the performance of an act with the knowledge that the actor is
violating the fundamental law or right, even without willful intent to injure or purposive malice to perpetrate a
damnifying harm.9
PNB's reorganization, to repeat, was by virtue of a valid law. At the time of reorganization, due to the critical
financial situation of the bank, departments, positions and functions were abolished or merged. The abolition of
the Fund Transfer Department (FTD) was deemed necessary. This, to the Court's mind, was a management
prerogative exercised pursuant to a business judgment. At this point, a distinction can be made in ruling on the
validity of a reorganization between a government bureau or office performing constituent functions (like the
Customs) and a government-owned or controlled corporation performing ministrant functions (like the PNB).
Constituent function are those which constitute the very bonds of society and are compulsory in nature; ministrant
functions are those undertaken by way of advancing the general interests of society, and are merely optional.
Commercial or universal banking is, ideally, not a governmental but a private sector, endeavor. It is an optional
function of government.
. . . The principles determining whether or not a government shall exercise certain of 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 those 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 (Malcolm, The Government
of the Philippine Islands, pp. 19-20)
From the above we may infer that, strictly speaking, 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, and those which it may exercise to promote merely the welfare, progress and prosperity of the people.
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. 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 corporation under the Corporation Law. (Bacani
vs. Nacoco, No, L-9657, November 29, 1956, 100 Phil. 468)
But a reorganization whether in a government bureau performing constituent functions or in a government-owned
or controlled corporation performing ministrant functions must meet a common test, the test of good faith. In this
connection, the philosophy behind PNB's reorganization is spelled out in the whereas clauses of Executive Order
No. 80:
WHEREAS, within the context of the general policy there nevertheless exists a clear role for direct government-
participation in the banking system, particularly in servicing the requirements of agriculture, small and medium
scale industry, export development, and the government sector.
WHEREAS, in pursuit of this national policy there is need to restructure the government financial institutions,
particularly the Philippine National Bank, to achieve a more efficient and effective use of available scarce
resources, to improve its viability, and to avoid unfair competition with the private sector, and
WHEREAS, the reorganization and rehabilitation of the Philippine National Bank into a similar but stronger and
more operationally viable bank is an important component of the nationalization programs for both the financial
system and the government corporation sector; . . . .
Whether there was a hidden political agenda to persecute petitioner due to her consanguinial relation to Mrs.
Imelda Romualdez Marcos, the widow of former President Marcos, is not clearly shown. On the other hand, it is
entirely possible that, precisely because of such consanguinial relation, petitioner may have been the object of
deferential, if not special treatment under the Marcos regime. It is part of the Filipino culture to extend such
deferential, if not special treatment to close relatives of persons in power. Many times this is carried to
unwholesome extremes. But a discontinuance of such deferential or special treatment in the wake of a change in
government or administration is not bad faith per se. It may be merely putting things in their proper places.
Due to the restructuring and this is empirically verifiable PNB became once more a viable banking institution.
The restoration of the FTD four years after it was abolished and its functions transferred to the International
Department, can be attributed to the bank's growth after reorganizations, thereby negating malice or bad faith in
that reorganization. The essence of good faith lies in an honest belief in the validity of one's right. 10 It consists of an
honest intention to abstain from taking an unconscionable and unscrupulous advantage of another, its absence
should be established by convincing evidence. 11
The records also clearly indicate that starting April 1986 to February 1987, petitioner went on leave of absence for
medical reasons. While she was not reporting to the office, the bank's reorganization got underway. She continued,
however, receiving her salaries, allowances, emoluments, honoraria and fees up to March 1987. Employees who
were affected by the reorganization had the option to avail of the bank's Separation Benefits Plan/Early
Retirement Plan (SBP/ERIP). Petitioner opted not to avail of such plan and instead submitted to the result of the
bank's ongoing reorganization and management's discretion. If petitioner had the desire for continued
employment with the bank, she could have asserted it for management's consideration. There is no proof on record
that she affirmatively expressed willingness to be employed. Since she cannot rebut the CSC finding that her
earliest appeal was made on 4 August 1989, there is no reason for this Court to hold that she did not sleep on her
rights. On the contrary, her present argument that bad faith existed at the time of the abolition of the FTD because
it was restored four years later is a little too late. Who could have predicted in 1986 or 1987 that PNB would be
able to rise from its financial crisis and become a viable commercial bank again? The decision to abolish the FTD at
the time it was abolished, to repeat, was a business judgment made in good faith.
PNB for its part submits that its reorganization was effected in good faith
because
a) There was not only a perceptible but substantial restructuring of the PNB hierarchy showing reduction of
personnel, consolidation of offices and abolition of positions.
b) Two thousand one hundred thirty two (2,132) positions were abolished during the period from February 16,
1986 to January 14, 1987 leaving a lean workforce of five thousand four hundred five (5,405) as of latter date per
B.R. No. 34 hereto attached as Annex "R".
c) The number of senior officers, including Senior Vice Presidents, was accordingly reduced.
Another issue raised by petitioner is PNB's alleged non-compliance with the mandate of Sections 2 and 4 of Rep.
Act No. 6656. These Sections provide:
Sec. 2. No officer or employee in the career service shall be removed except for a valid cause and after due notice
and hearing. A valid cause for removal exists when, pursuant to a bona fide reorganization, a position has been
abolished or rendered redundant or there is a need to merge, divide, or consolidate positions in order to meet the
exigencies of the service, or other lawful causes allowed by the Civil Service Law. The existence of any or some of
the following circumstances may be considered as evidence of bad faith in the removals made as a result of
reorganization, giving to a claim for reinstatement or reappointment by an aggrieved party.
(a) Where there is a significant increase in the number of positions in the new staffing pattern of the department or
agency concerned;
(b) Where an office is abolished and another performing substantially the same functions is created;
(c) Where incumbents are replaced by those less qualified in terms of status of appointment, performance and
merit;
(d) Where there is a reclassification of offices in the department or agency concerned and the reclassified offices
perform substantially the same functions as the original offices;
(e) Where the removal violates the order of separation provided in Section 3 hereof.
xxx xxx xxx
Sec. 4. Officers and employees holding permanent, appointments shall be given preference for appointment to the
new position in the approved staffing pattern comparable to their former positions or in case there are not enough
comparable positions, to positions next lower in rank.
No new employees shall be taken in until all permanent officers and employees have been appointed, including
temporary and casual employees who possess the necessary qualification requirements, among which is the
appropriate civil service eligibility, for permanent appointment to positions in the approved staffing pattern, in
case there are still positions to be filled, unless such positions are policy-determining, primarily confidential or
highly technical in nature.
In the first place, Rep. Act No. 6656 cannot be invoked by petitioner because it took effect on 15 June 1987, or after
PNB's reorganization had already been implemented. But assuming, ex gratia argumenti, that it is applicable here
and petitioner must be accorded preferential right to appointment in the bank, PNB in its rejoinder impressively
asserts:
Needless to say, there were various committees that were created in the implementation of the organizational
restructuring of the Bank based on the foregoing policy guidelines. Each personnel to be retained was evaluated in
terms of relative fitness and merit along with the other personnel of the Bank. Thus, when then SVP Federico
Pascual was chosen to head the International Department from among other officers of the Bank, including Ms.
Yap, his qualifications far exceeded those of the other candidates for the position.
We attach hereto as Annexes "G-1" and "G-2" the service records of Mr. Federico Pascual and Petitioner Ms. Yap,
respectively, which clearly show that the qualifications of Mr. Pascual far exceed those of Petitioner Yap. Aside
from being a lawyer having been a law graduate from the University of the Philippines, he is also a Bachelor of Arts
degree holder from Ateneo de Manila and a Master of Laws graduate o Columbia Law School. He had studied
Masteral Arts in Public Administration at the London School of Economics and had undergone extensive seminars
since 1974 at the International Department and had been assigned in several foreign branches of the Bank. Before
he resigned from the Bank, he held the second highest position of Executive Vice President and served as Acting
President of the Bank before the incumbent president, President Gabriel Singson assumed his position.
On the other hand, the service record of Petitioner Yap will show that she only holds a Bachelor of Science in
Commerce Degree from Assumption Convent and has undergone only one seminar on Management and
Leadersbip Training Program. She entered the Bank service in 1972. (Rollo at pp. 312 to 313)
xxx xxx xxx
The prayer in the petition at bar seeks petitioner's immediate reinstatement to her former position as senior vice
president and head of the Fund Transfer Department, or reappointment to a position of comparable or equivalent
rank without loss of seniority rights and pay, etc., under the bank's new staffing pattern.
A person claiming to be entitled to a public office or position usurped or unlawfully held or exercised by another
may bring an action for quo warranto (Rule 66, Sec. 6, Rules of Court). The petitioner therein must show a clear
legal right to the office allegedly held unlawfully by another. 12
An action for quo warranto should be brought within one (1) year after ouster from office;13 the failure to institute
the same within the reglementary period constitutes more than a sufficient basis for its dismissal 14 since it is not
proper that the title to a public office be subjected to continued
uncertainty . . . 15 An exception to this prescriptive period lies only if the failure to file the action can be attributed
to the acts of a responsible government officer and not of the dismissed employee.16
Measured by the above jurisprudence, petitioner's action may be said to be one for quo warranto, seeking
reinstatement to her former position which at present is occupied by another. She cannot invoke De Tavera
v. Phil.Tuberculosis Society, Inc., et. al. 17 and contend that there is no claim of usurpation of office, and that quo
warrantomay be availed of to assert one's right to an office in the situation obtaining in the case at bar.
Santos v. CA, et. al. 18 and Magno v. PNNC Corp. 19 are invoked by petitioner to illustrate that this action is one for
separation without just cause, hence, the prescriptive period is allegedly four (4) years in accordance with Article
1146 of the Civil Code. 20 We do not agree. Petitioner's separation from the service was due to the abolition of her
office in implementation of a valid reorganization. This is not the unjustifiable cause which results in injury to the
rights of a person contemplated by Article 1146. The abolition of the office was not a whimsical, thoughtless move.
It was a thoroughly evaluated action for streamlining functions based on a rehabilitation plan. 21 At the time of the
abolition of the Fund Transfer Department in 1986, foreign exchange losses of the bank amounted to P81.1
Million. 22 The head of office was a Senior Vice President. At the time of restoration of the department in 1991, it
was headed by a vice president (lower in rank) and showed earnings of P2,620.0 Million. 23 Other departments
abolished in 1986 were also subsequently restored.
Restoring petitioner to her previous position with backwages would be unjust enrichment to her, considering that
she had abandoned or showed lack of interest in reclaiming the same position when the bank was not yet fully
rehabilitated and she only insisted on reinstatement in August 1989 or two (2) years after her alleged unjustified
separation.
To those who feel that their unjustified separation from the service is for a cause beyond their control, the
aforecited Magno case teaches:
. . . while We fully recognize the special protection which the Constitution, labor laws, and social legislation accord
the workingman, We cannot, however, alter or amend the law on prescription to relieve him of the consequences of
his inaction. Vigilantibus, non dormientibus, jura subveniunt (Laws come to the assistance of the vigilant, not of the
sleeping). His explanation that he could not have filed the complaint earlier because "he was prevented to do so
beyond his control for the simple reason that private respondent have (sic) tried to circumvent the law by merely
floating" him is very flimsy and does not even evoke sympathetic consideration, if at all it is proper and necessary.
We note that petitioner herein is not an unlettered man; he seems to be educated and assertive of his rights and
appears to be familiar with judicial procedures. He filed a motion for extension of time to file the petition and the
petition itself without the assistance of counsel. We cannot believe that if indeed he had a valid grievance against
PNCC he would not have taken immediate positive steps for its redress.
WHEREFORE, premises considered, the assailed CSC resolution is AFFIRMED. The petition is DISMISSED for failure
to show grave abuse of discretion on the part of said CSC in rendering the questioned resolution. No
pronouncement as to costs.
SO ORDERED.
Case No. 2

[G.R. No. 143377. February 20, 2001]


SHIPSIDE INCORPORATED, petitioner, vs. THE HON. COURT OF APPEALS [Special Former Twelfth Division],
HON. REGIONAL TRIAL COURT, BRANCH 26 (San Fernando City, La Union) & The REPUBLIC OF THE
PHILIPPINES, respondents.
DECISION
MELO, J.:
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, 1999 and May 23, 2000,
which respectively, dismissed a petition for certiorari and prohibition and thereafter denied a motion for
reconsideration.
The antecedent facts are undisputed:
On October 29, 1958, Original Certificate of Title No. 0-381 was issued in favor of Rafael Galvez, over four parcels of
land Lot 1 with 6,571 square meters; Lot 2, with 16,777 square meters; Lot 3 with 1,583 square meters; and Lot 4,
with 508 square meters.
On April 11, 1960, Lots No. 1 and 4 were conveyed by Rafael Galvez in favor of Filipina Mamaril, Cleopatra Llana,
Regina Bustos, and Erlinda Balatbat in a deed of sale which was inscribed as Entry No. 9115 OCT No. 0-381 on
August 10, 1960. Consequently, Transfer Certificate No. T-4304 was issued in favor of the buyers covering Lots No.
1 and 4.
Lot No. 1 is described as:
A parcel of land (Lot 1, Plan PSU-159621, L. R. Case No. N-361; L. R. C. Record No. N-14012, situated in the Barrio of
Poro, Municipality of San Fernando, Province of La Union, bounded on the NE, by the Foreshore; on the SE, by
Public Land and property of the Benguet Consolidated Mining Company; on the SW, by properties of Rafael Galvez
(US Military Reservation Camp Wallace) and Policarpio Munar; and on the NW, by an old Barrio Road. Beginning at
a point marked 1 on plan, being S. 74 deg. 11W. , 2670. 36 from B. L. L. M. 1, San Fernando, thence
S. 66 deg. 19E., 134.95 m. to point 2; S. 14 deg. 57W., 11.79 m. to point 3;
S. 12 deg. 45W., 27.00 m. to point 4; S. 12 deg. 45W, 6.90 m. to point 5;
N. 69 deg., 32W., 106.00 m. to point 6; N. 52 deg., 21W., 36. 85 m. to point 7;
N. 21 deg. 31E., 42. 01 m. to the point of beginning; containing an area of SIX THOUSAND FIVE HUNDRED AND
SEVENTY-ONE (6,571) SQUARE METERS, more or less. All points referred to are indicated on the plan; and marked
on the ground; bearings true, date of survey, February 421, 1957.
Lot No. 4 has the following technical description:
A parcel of land (Lot 4, Plan PSU-159621, L. R. Case No. N-361 L. R. C. Record No. N-14012), situated in the Barrio
of Poro, Municipality of San Fernando, La Union. Bounded on the SE by the property of the Benguet Consolidated
Mining Company; on the S. by property of Pelagia Carino; and on the NW by the property of Rafael Galvez (US
Military Reservation, Camp Wallace). Beginning at a point marked 1 on plan, being S. deg. 24W. 2591. 69 m. from B.
L. L. M. 1, San Fernando, thence S. 12 deg. 45W., 73. 03 m. to point 2; N. 79 deg. 59W., 13.92 m. to point 3; N. 23 deg.
26E. , 75.00 m. to the point of beginning; containing an area of FIVE HUNDED AND EIGHT (508) SQUARE METERS,
more or less. All points referred to are indicated in the plan and marked on the ground; bearings true, date of
survey, February 4-21, 1957.
On August 16, 1960, Mamaril, et al. sold Lots No. 1 and 4 to Lepanto Consolidated Mining Company. The deed of
sale covering the aforesaid property was inscribed as Entry No. 9173 on TCT No. T-4304.Subsequently, Transfer
Certificate No. T-4314 was issued in the name of Lepanto Consolidated Mining Company as owner of Lots No. 1 and
4.
On February 1, 1963, unknown to Lepanto Consolidated Mining Company, the Court of First Instance of La Union,
Second Judicial District, issued an Order in Land Registration Case No. N-361 (LRC Record No. N-14012) entitled
Rafael Galvez, Applicant, Eliza Bustos, et al., Parties-In-Interest; Republic of the Philippines, Movant declaring OCT
No. 0-381 of the Registry of Deeds for the Province of La Union issued in the name of Rafael Galvez, null and void,
and ordered the cancellation thereof.
The Order pertinently provided:
Accordingly, with the foregoing, and without prejudice on the rights of incidental parties concerned herein to
institute their respective appropriate actions compatible with whatever cause they may have, it is hereby declared
and this court so holds that both proceedings in Land Registration Case No. N-361 and Original Certificate No. 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, are null and void; 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 issued subsequent thereto having reference to the
same parcels of land; without pronouncement as to costs.
On October 28, 1963, Lepanto Consolidated Mining Company sold to herein petitioner Lots No. 1 and 4, with the
deed being entered in TCT NO. 4314 as entry No. 12381. Transfer Certificate of Title No. T-5710 was thus issued in
favor of the petitioner which starting since then exercised proprietary rights over Lots No. 1 and 4.
In the meantime, Rafael Galvez filed his motion for reconsideration against the order issued by the trial court
declaring OCT No. 0-381 null and void. The motion was denied on January 25, 1965. On appeal, the Court of
Appeals ruled in favor of the Republic of the Philippines in a Resolution promulgated on August 14, 1973 in CA-G.
R. No. 36061-R.
Thereafter, the Court of Appeals issued an Entry of Judgment, certifying that its decision dated August 14, 1973
became final and executory on October 23, 1973.
On April 22, 1974, the trial court in L. R. C. Case No. N-361 issued a writ of execution of the judgment which was
served on the Register of Deeds, San Fernando, La Union on April 29, 1974.
Twenty four long years thereafter, on January 14, 1999, the Office of the Solicitor General received a letter dated
January 11, 1999 from Mr. Victor G. Floresca, Vice-President, John Hay Poro Point Development Corporation,
stating that the aforementioned orders and decision of the trial court in L. R. C. No. N-361 have not been executed
by the Register of Deeds, San Fernando, La Union despite receipt of the writ of execution.
On April 21, 1999, 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, San Fernando, La Union) docketed
therein as Civil Case No. 6346 entitled, Republic of the Philippines, Plaintiff, versus Heirs of Rafael Galvez,
represented by Teresita Tan, Reynaldo Mamaril, Elisa Bustos, Erlinda Balatbat, Regina Bustos, Shipside
Incorporated and the Register of Deeds of La Union, Defendants.
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. 0-381, namely: (a) Shipside Inc. which is presently the registered owner in fee simple
of Lots No. 1 and 4 covered by TCT No. T-5710, with a total area of 7,079 square meters; (b) Elisa Bustos, Jesusito
Galvez, and Teresita Tan who are the registered owners of Lot No. 2 of OCT No. 0-381;and (c) Elisa Bustos, Filipina
Mamaril, Regina Bustos and Erlinda Balatbat who are the registered owners of Lot No. 3 of OCT No. 0-381, now
covered by TCT No. T-4916, with an area of 1,583 square meters.
In its complaint in Civil Case No. 6346, the Solicitor General argued that since the trial court in LRC Case No. 361
had ruled and declared OCT No. 0-381 to be null and void, which ruling was subsequently affirmed by the Court of
Appeals, the defendants-successors-in-interest of Rafael Galvez have no valid title over the property covered by
OCT No. 0-381, and the subsequent Torrens titles issued in their names should be consequently cancelled.
On July 22, 1999, petitioner Shipside, Inc. filed its Motion to Dismiss, 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; (2) the plaintiff is not the real party-in-interest because the real property covered by the
Torrens titles sought to be cancelled, allegedly part of Camp Wallace (Wallace Air Station), were under the
ownership and administration of the Bases Conversion Development Authority (BCDA) under Republic Act No.
7227; (3) plaintiffs cause of action is barred by prescription; (4) twenty-five years having lapsed since the issuance
of the writ of execution, no action for revival of judgment may be instituted because under Paragraph 3 of Article
1144 of the Civil Code, such action may be brought only within ten (10) years from the time the judgment had been
rendered.
An opposition to the motion to dismiss was filed by the Solicitor General on August 23, 1999, alleging among
others, that: (1) the real party-in-interest is the Republic of the Philippines;and (2) prescription does not run
against the State.
On August 31, 1999, the trial court denied petitioners motion to dismiss and on October 14, 1999, its motion for
reconsideration was likewise turned down.
On October 21, 1999, petitioner instituted a petition for certiorari and prohibition with the Court of Appeals,
docketed therein as CA-G.R. SP No. 55535, 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.
On November 4, 1999, the Court of Appeals dismissed the petition in CA-G.R. SP No. 55535 on the ground that the
verification and certification in the petition, under the signature of Lorenzo Balbin, Jr., was made without authority,
there being no proof therein that Balbin was authorized to institute the petition for and in behalf and of petitioner.
On May 23, 2000, the Court of Appeals denied petitioners 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, and in the
absence thereof, the petition cannot prosper and be granted due course;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.
Hence, the instant petition.
In support of its petition, Shipside, Inc. asseverates that:
1. The Honorable Court of Appeals gravely abused its discretion in dismissing the petition when it made a
conclusive legal presumption that Mr. Balbin had no authority to sign the petition despite the clarity of laws,
jurisprudence and Secretarys certificate to the contrary;
2. The Honorable Court of Appeals abused its discretion when it dismissed the petition, 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, in violation of clear laws and jurisprudence.
Petitioner likewise adopted the arguments it raised in the petition and comment/reply it filed with the Court of
Appeals, attached to its petition as Exhibit L and N, respectively.
In his Comment, the Solicitor General moved for the dismissal of the instant petition based on the following
considerations: (1) Lorenzo Balbin, who signed for and in behalf of petitioner in the verification and certification of
non-forum shopping portion of the petition, failed to show proof of his authorization to institute the petition
for certiorari and prohibition with the Court of Appeals, thus the latter court acted correctly in dismissing the
same; (2) the real party-in-interest in the case at bar being the Republic of the Philippines, its claims are
imprescriptible.
In order to preserve the rights of herein parties, the Court issued a temporary restraining order on June 26, 2000
enjoining the trial court from conducting further proceedings in Civil Case No. 6346.
The issues posited in this case are: (1) whether or not an authorization from petitioners 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; and (2) whether or not the Republic of the Philippines can maintain the action for revival of judgment
herein.
We find for petitioner.
Anent the first issue:
The Court of Appeals dismissed the petition for certiorari on the ground that Lorenzo Balbin, the resident manager
for petitioner, who was the signatory in the verification and certification on non-forum shopping, failed to show
proof that he was authorized by petitioners board of directors to file such a petition.
A corporation, such as petitioner, has no power except those expressly conferred on it by the Corporation Code and
those that are implied or incidental to its existence. In turn, a corporation exercises said powers through its board
of directors and / or its duly authorized officers and agents. Thus, 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, Inc. v. CA, 264 SCRA 11 [1996]). In turn, physical acts of the corporation, like
the signing of documents, 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.
It is undisputed that on October 21, 1999, the time petitioners Resident Manager Balbin filed the petition, there
was no proof attached thereto that Balbin was authorized to sign the verification and non-forum shopping
certification therein, as a consequence of which the petition was dismissed by the Court of Appeals. However,
subsequent to such dismissal, petitioner filed a motion for reconsideration, attaching to said motion a certificate
issued by its board secretary stating that on October 11, 1999, or ten days prior to the filing of the petition, Balbin
had been authorized by petitioners board of directors to file said petition.
The Court has consistently held that the requirement regarding verification of a pleading is formal, not
jurisdictional (Uy v. LandBank, G.R. No. 136100, July 24, 2000). Such requirement is simply a condition affecting the
form of the pleading, non-compliance with which does not necessarily render the pleading fatally
defective. Verification is simply intended to secure an assurance that the allegations in the pleading are true and
correct and not the product of the imagination or a matter of speculation, and that the pleading is filed in good
faith. The court may order the correction of the pleading if verification is lacking or act on the pleading although it
is not verified, 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.
On the other hand, the lack of certification against forum shopping is generally not curable by the submission
thereof after the filing of the petition. Section 5, 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, including the
certification against forum shopping, shall be sufficient ground for the dismissal thereof. 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.
In certain exceptional circumstances, however, the Court has allowed the belated filing of the
certification. In Loyola v. Court of Appeals, et. al. (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. In Roadway Express, Inc. v. Court of Appeals, et. al. (264 SCRA 696 [1996]), the Court allowed the filing
of the certification 14 days before the dismissal of the petition. In Uy v. LandBank, supra, the Court had dismissed
Uys petition for lack of verification and certification against non-forum shopping.However, it subsequently
reinstated the petition after Uy submitted a motion to admit certification and non-forum shopping certification. In
all these cases, there were special circumstances or compelling reasons that justified the relaxation of the rule
requiring verification and certification on non-forum shopping.
In the instant case, the merits of petitioners case should be considered special circumstances or compelling
reasons that justify tempering the requirement in regard to the certificate of non-forum shopping.Moreover,
in Loyola, Roadway, and Uy, the Court excused non-compliance with the requirement as to the certificate of non-
forum shopping. With more reason should we allow the instant petition since petitioner herein did submit a
certification on non-forum shopping, failing only to show proof that the signatory was authorized to do so. That
petitioner subsequently submitted a secretarys certificate attesting that Balbin was authorized to file an action on
behalf of petitioner likewise mitigates this oversight.
It must also be kept in mind that while the requirement of the certificate of non-forum shopping is mandatory,
nonetheless the requirements must not be interpreted too literally and thus defeat the objective of preventing the
undesirable practice of forum-shopping (Bernardo v. NLRC, 255 SCRA 108 [1996]). Lastly, technical rules of
procedure should be used to promote, not frustrate justice. While the swift unclogging of court dockets is a
laudable objective, the granting of substantial justice is an even more urgent ideal.
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, Rule 39 of the 1997 Rules on Civil Procedure. Article 1144(3)
provides that an action upon a judgment must be brought within 10 years from the time the right of action accrues."
On the other hand, Section 6, 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, but that after the lapse of such time, and before it is
barred by the statute of limitations, a judgment may be enforced by action. Taking these two provisions into
consideration, it is plain that an action for revival of judgment must be brought within ten years from the time said
judgment becomes final.
From the records of this case, it is clear that the judgment sought to be revived became final on October 23,
1973. On the other hand, the action for revival of judgment was instituted only in 1999, or more than twenty-five
(25) years after the judgment had become final. Hence, the action is barred by extinctive prescription considering
that such an action can be instituted only within ten (10) years from the time the cause of action accrues.
The Solicitor General, nonetheless, argues that the States cause of action in the cancellation of the land title issued
to petitioners predecessor-in-interest is imprescriptible because it is included in Camp Wallace, which belongs to
the government.
The argument is misleading.
While it is true that prescription does not run against the State, the same may not be invoked by the government in
this case since it is no longer interested in the subject matter. While Camp Wallace may have belonged to the
government at the time Rafael Galvezs title was ordered cancelled in Land Registration Case No. N-361, the same
no longer holds true today.
Republic Act No. 7227, otherwise known as the Bases Conversion and Development Act of 1992, created the Bases
Conversion and Development Authority. Section 4 pertinently provides:
Section 4. Purposes of the Conversion Authority. The Conversion Authority shall have the following purposes:
(a) To own, hold and/or administer the military reservations of John Hay Air Station, Wallace Air Station, ODonnell
Transmitter Station, San Miguel Naval Communications Station, Mt. Sta. Rita Station (Hermosa, Bataan) and those
portions of Metro Manila military camps which may be transferred to it by the President;
Section 2 of Proclamation No. 216, issued on July 27, 1993, also provides:
Section 2. Transfer of Wallace Air Station Areas to the Bases Conversion and Development Authority. 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, as amended, excluding those covered by Presidential Proclamations
and some 25-hectare area for the radar and communication station of the Philippine Air Force, are hereby
transferred to the Bases Conversion Development Authority
With the transfer of Camp Wallace to the BCDA, the government no longer has a right or interest to
protect. Consequently, the Republic is not a real party in interest and it may not institute the instant action. Nor
may it raise the defense of imprescriptibility, the same being applicable only in cases where the government is a
party in interest. Under Section 2 of Rule 3 of the 1997 Rules of Civil Procedure, every action must be prosecuted or
defended in the name of the real party in interest. To qualify a person to be a real party in interest in whose name
an action must be prosecuted, he must appear to be the present real owner of the right sought to enforced (Pioneer
Insurance v. CA, 175 SCRA 668 [1989]). A real party in interest is the party who stands to be benefited or injured by
the judgment in the suit, or the party entitled to the avails of the suit. And by real interest is meant a present
substantial interest, as distinguished from a mere expectancy, or a future, contingent, subordinate or consequential
interest (Ibonilla v. Province of Cebu, 210 SCRA 526 [1992]). Being the owner of the areas covered by Camp
Wallace, it is the Bases Conversion and Development Authority, not the Government, which stands to be benefited
if the land covered by TCT No. T-5710 issued in the name of petitioner is cancelled.
Nonetheless, 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, particularly of Central Luzon and, in general, the countrys goal
for enhancement (Section 2, Republic Act No. 7227). 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, but
simply a recognition of the need to create a body corporate which will act as its agent for the realization of its
program. It is consequently asserted that the Republic remains to be the real party in interest and the Conversion
Authority merely its agent.
We, however, must not lose sight of the fact that the BCDA is an entity invested with a personality separate and
distinct from the government. Section 3 of Republic Act No. 7227 reads:
Section 3. Creation of the Bases Conversion and Development Authority. 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.
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. While public benefit and public welfare, particularly, the promotion
of the economic and social development of Central Luzon, may be attributable to the operation of the BCDA, yet it is
certain that the functions performed by the BCDA are basically proprietary in nature. The promotion of economic
and social development of Central Luzon, in particular, and the countrys goal for enhancement, in general, do not
make the BCDA equivalent to the Government. Other corporations have been created by government to act as its
agents for the realization of its programs, the SSS, GSIS, NAWASA and the NIA, to count a few, and yet, the Court has
ruled that these entities, although performing functions aimed at promoting public interest and public welfare, are
not government-function corporations invested with governmental attributes. It may thus be said that the BCDA is
not a mere agency of the Government but a corporate body performing proprietary functions.
Moreover, Section 5 of Republic Act No. 7227 provides:
Section 5. Powers of the Conversion Authority. To carry out its objectives under this Act, the Conversion Authority is
hereby vested with the following powers:
(a) To succeed in its corporate name, to sue and be sued in such corporate name and to adopt, alter and use a
corporate seal which shall be judicially noticed;
Having the capacity to sue or be sued, it should thus be the BCDA which may file an action to cancel petitioners
title, not the Republic, the former being 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. Ralla, 199 SCRA 495 [1991]). A suit may
be dismissed if the plaintiff or the defendant is not a real party in interest. If the suit is not brought in the name of
the real party in interest, a motion to dismiss may be filed, as was done by petitioner in this case, on the ground
that the complaint states no cause of action (Tanpingco v. IAC, 207 SCRA 652 [1992]).
However, E. B. Marcha Transport Co. , Inc. v. 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 institution of the suit was no
longer held by the national government but by the Philippine Ports Authority. In E. B. Marcha, the Court ruled:
It can be said that in suing for the recovery of the rentals, the Republic of the Philippines, acted as principal of the
Philippine Ports Authority, directly exercising the commission it had earlier conferred on the latter as its agent. We
may presume that, by doing so, the Republic of the Philippines did not intend to retain the said rentals for its own
use, considering that by its voluntary act it had transferred the land in question to the Philippine Ports Authority
effective July 11, 1974. The Republic of the Philippines had simply sought to assist, not supplant, the Philippine
Ports Authority, whose title to the disputed property it continues to recognize. We may expect then that the said
rentals, once collected by the Republic of the Philippines, shall be turned over by it to the Philippine Ports
Authority conformably to the purposes of P. D. No. 857.
E. B. Marcha is, however, not on all fours with the case at bar. In the former, 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. To dismiss the complaint in E. B. Marcha would have brought needless delay in the
settlement of the matter since the PPA would have to refile the case on the same claim already litigated upon. Such
is not the case here since to allow the government to sue herein enables it to raise the issue of imprescriptibility, a
claim which is not available to the BCDA. 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, it being said that when the title of the
Republic has been divested, its grantees, although artificial bodies of its own creation, are in the same category as
ordinary persons (Kingston v. LeHigh Valley Coal Co., 241 Pa 469). By raising the claim of imprescriptibility, a claim
which cannot be raised by the BCDA, the Government not only assists the BCDA, as it did in E. B. Marcha, it even
supplants the latter, a course of action proscribed by said case.
Moreover, 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, on behalf of government-owned or controlled corporations, causes of action which
have already prescribed, on the pretext that the Government is the real party in interest against whom prescription
does not run, said corporations having been created merely as agents for the realization of government programs.
Parenthetically, 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, nay, being made to suffer financial losses.
It should also be noted that petitioner is unquestionably a buyer in good faith and for value, having acquired the
property in 1963, or 5 years after the issuance of the original certificate of title, as a third transferee. If only not to
do violence and to give some measure of respect to the Torrens System, petitioner must be afforded some measure
of protection.
One more point.
Since the portion in dispute now forms part of the property owned and administered by the Bases Conversion and
Development Authority, it is alienable and registerable real property.
We find it unnecessary to rule on the other matters raised by the herein parties.
WHEREFORE, the petition is hereby granted and the orders dated August 31, 1999 and October 4, 1999 of the
Regional Trial Court of the First National Judicial Region (Branch 26, San Fernando, La Union) in Civil Case
No. 6346 entitled Republic of the Philippines, Plaintiff, versus Heirs of Rafael Galvez, et. al., Defendants as well as
the resolutions promulgated on November 4, 1999 and May 23, 2000 by the Court of Appeals (Twelfth Division) in
CA-G. R. SP No. 55535 entitled Shipside, Inc., Petitioner versus Hon. Alfredo Cajigal, as Judge, RTC, San Fernando, La
Union, Branch 26, and the Republic of the Philippines, Respondents are hereby reversed and set aside. The
complaint in Civil Case No. 6346, Regional Trial Court, Branch 26, San Fernando City, La Union entitled Republic of
the Philippines, Plaintiff, versus Heirs of Rafael Galvez, et al." is ordered dismissed, without prejudice to the filing of
an appropriate action by the Bases Development and Conversion Authority.
SO ORDERED.
Case No. 3

G.R. No. L-25843 July 25, 1974


MELCHORA CABANAS, plaintiff-appellee,
vs.
FRANCISCO PILAPIL, defendant-appellant.
Seno, Mendoza & Associates for plaintiff-appellee.
Emilio Benitez, Jr. for defendant-appellant.

FERNANDO, J.:p
The disputants in this appeal from a question of law from a lower court decision are the mother and the uncle of a
minor beneficiary of the proceeds of an insurance policy issued on the life of her deceased father. The dispute
centers as to who of them should be entitled to act as trustee thereof. The lower court applying the appropriate
Civil Code provisions decided in favor of the mother, the plaintiff in this case. Defendant uncle appealed. As noted,
the lower court acted the way it did following the specific mandate of the law. In addition, it must have taken into
account the principle that in cases of this nature the welfare of the child is the paramount consideration. It is not an
unreasonable assumption that between a mother and an uncle, the former is likely to lavish more care on and pay
greater attention to her. This is all the more likely considering that the child is with the mother. There are no
circumstances then that did militate against what conforms to the natural order of things, even if the language of
the law were not as clear. It is not to be lost sight of either that the judiciary pursuant to its role as an agency of the
State as parens patriae, with an even greater stress on family unity under the present Constitution, did weigh in the
balance the opposing claims and did come to the conclusion that the welfare of the child called for the mother to be
entrusted with such responsibility. We have to affirm.
The appealed decision made clear: "There is no controversy as to the facts. "1 The insured, Florentino Pilapil had a
child, Millian Pilapil, with a married woman, the plaintiff, Melchora Cabanas. She was ten years old at the time the
complaint was filed on October 10, 1964. The defendant, Francisco Pilapil, is the brother of the deceased. The
deceased insured himself and instituted as beneficiary, his child, with his brother to act as trustee during her
minority. Upon his death, the proceeds were paid to him. Hence this complaint by the mother, with whom the child
is living, seeking the delivery of such sum. She filed the bond required by the Civil Code. Defendant would justify
his claim to the retention of the amount in question by invoking the terms of the insurance policy.2
After trial duly had, the lower court in a decision of May 10, 1965, rendered judgment ordering the defendant to
deliver the proceeds of the policy in question to plaintiff. Its main reliance was on Articles 320 and 321 of the Civil
Code. The former provides: "The father, or in his absence the mother, is the legal administrator of the property
pertaining to the child under parental authority. If the property is worth more than two thousand pesos, the father
or mother shall give a bond subject to the approval of the Court of First Instance." 3 The latter states: "The property
which the unemancipated child has acquired or may acquire with his work or industry, or by any lucrative title,
belongs to the child in ownership, and in usufruct to the father or mother under whom he is under parental
authority and whose company he lives; ...4
Conformity to such explicit codal norm is apparent in this portion of the appealed decision: "The insurance
proceeds belong to the beneficiary. The beneficiary is a minor under the custody and parental authority of the
plaintiff, her mother. The said minor lives with plaintiff or lives in the company of the plaintiff. The said minor
acquired this property by lucrative title. Said property, therefore, belongs to the minor child in ownership, and in
usufruct to the plaintiff, her mother. Since under our law the usufructuary is entitled to possession, the plaintiff is
entitled to possession of the insurance proceeds. The trust, insofar as it is in conflict with the above quoted
provision of law, is pro tanto null and void. In order, however, to protect the rights of the minor, Millian Pilapil, the
plaintiff should file an additional bond in the guardianship proceedings, Sp. Proc. No. 2418-R of this Court to raise
her bond therein to the total amount of P5,000.00."5
It is very clear, therefore, considering the above, that unless the applicability of the two cited Civil Code provisions
can be disputed, the decision must stand. There is no ambiguity in the language employed. The words are rather
clear. Their meaning is unequivocal. Time and time again, this Court has left no doubt that where codal or statutory
norms are cast in categorical language, the task before it is not one of interpretation but of application. 6 So it must
be in this case. So it was in the appealed decision.
1. It would take more than just two paragraphs as found in the brief for the defendant-appellant7 to blunt the force
of legal commands that speak so plainly and so unqualifiedly. Even if it were a question of policy, the conclusion
will remain unaltered. What is paramount, as mentioned at the outset, is the welfare of the child. It is in consonance
with such primordial end that Articles 320 and 321 have been worded. There is recognition in the law of the deep
ties that bind parent and child. In the event that there is less than full measure of concern for the offspring, the
protection is supplied by the bond required. With the added circumstance that the child stays with the mother, not
the uncle, without any evidence of lack of maternal care, the decision arrived at can stand the test of the strictest
scrutiny. It is further fortified by the assumption, both logical and natural, that infidelity to the trust imposed by
the deceased is much less in the case of a mother than in the case of an uncle. Manresa, commenting on Article 159
of the Civil Code of Spain, the source of Article 320 of the Civil Code, was of that view: Thus "El derecho y la
obligacion de administrar el Patrimonio de los hijos es una consecuencia natural y lgica de la patria potestad y de
la presuncin de que nadie cuidar de los bienes de acqullos con mas cario y solicitude que los padres. En
nuestro Derecho antiguo puede decirse que se hallaba reconocida de una manera indirecta aquelia doctrina, y asi
se desprende de la sentencia del Tribunal Supremeo de 30 de diciembre de 1864, que se refiere a la ley 24, tit. XIII
de la Partida 5. De la propia suerte aceptan en general dicho principio los Codigos extranjeros, con las limitaciones
y requisitos de que trataremos mis adelante."8
2. The appealed decision is supported by another cogent consideration. It is buttressed by its adherence to the
concept that the judiciary, as an agency of the State acting as parens patriae, is called upon whenever a pending suit
of litigation affects one who is a minor to accord priority to his best interest. It may happen, as it did occur here,
that family relations may press their respective claims. It would be more in consonance not only with the natural
order of things but the tradition of the country for a parent to be preferred. it could have been different if the
conflict were between father and mother. Such is not the case at all. It is a mother asserting priority. Certainly the
judiciary as the instrumentality of the State in its role of parens patriae, cannot remain insensible to the validity of
her plea. In a recent case,9 there is this quotation from an opinion of the United States Supreme Court: "This
prerogative of parens patriae is inherent in the supreme power of every State, whether that power is lodged in a
royal person or in the legislature, and has no affinity to those arbitrary powers which are sometimes exerted by
irresponsible monarchs to the great detriment of the people and the destruction of their liberties." What is more,
there is this constitutional provision vitalizing this concept. It reads: "The State shall strengthen the family as a
basic social institution." 10 If, as the Constitution so wisely dictates, it is the family as a unit that has to be
strengthened, it does not admit of doubt that even if a stronger case were presented for the uncle, still deference to
a constitutional mandate would have led the lower court to decide as it did.
WHEREFORE, the decision of May 10, 1965 is affirmed. Costs against defendant-appellant.
Case No. 4

G.R. No. L-409 January 30, 1947


ANASTACIO LAUREL, petitioner,
vs.
ERIBERTO MISA, respondent.
Claro M. Recto and Querube C. Makalintal for petitioner.
First Assistant Solicitor General Reyes and Solicitor Hernandez, Jr., for respondent.
RESOLUTION
In G.R. No. L-409, Anastacio Laurel vs. Eriberto Misa, etc., the Court, acting on the petition for habeas corpusfiled by
Anastacio Laurel and based on a theory that a Filipino citizen who adhered to the enemy giving the latter aid and
comfort during the Japanese occupation cannot be prosecuted for the crime of treason defined and penalized by
article 114 of the Revised Penal Code, for the reason (1) that the sovereignty of the legitimate government in the
Philippines and, consequently, the correlative allegiance of Filipino citizens thereto was then suspended; and (2)
that there was a change of sovereignty over these Islands upon the proclamation of the Philippine Republic:
(1) Considering that a citizen or subject owes, not a qualified and temporary, but an absolute and permanent
allegiance, which consists in the obligation of fidelity and obedience to his government or sovereign; and that this
absolute and permanent allegiance should not be confused with the qualified and temporary allegiance which a
foreigner owes to the government or sovereign of the territory wherein he resides, so long as he remains there, in
return for the protection he receives, and which consists in the obedience to the laws of the government or
sovereign. (Carlisle vs. Unite States, 21 Law. ed., 429; Secretary of State Webster Report to the President of the
United States in the case of Thraser, 6 Web. Works, 526);
Considering that the absolute and permanent allegiance of the inhabitants of a territory occupied by the enemy of
their legitimate government or sovereign is not abrogated or severed by the enemy occupation, because the
sovereignty of the government or sovereign de jure is not transferred thereby to the occupier, as we have held in
the cases of Co Kim Cham vs. Valdez Tan Keh and Dizon (75 Phil., 113) and of Peralta vs. Director of Prisons (75 Phil.,
285), and if it is not transferred to the occupant it must necessarily remain vested in the legitimate government;
that the sovereignty vested in the titular government (which is the supreme power which governs a body politic or
society which constitute the state) must be distinguished from the exercise of the rights inherent thereto, and may
be destroyed, or severed and transferred to another, but it cannot be suspended because the existence of
sovereignty cannot be suspended without putting it out of existence or divesting the possessor thereof at least
during the so-called period of suspension; that what may be suspended is the exercise of the rights of sovereignty
with the control and government of the territory occupied by the enemy passes temporarily to the occupant; that
the subsistence of the sovereignty of the legitimate government in a territory occupied by the military forces of the
enemy during the war, "although the former is in fact prevented from exercising the supremacy over them" is one
of the "rules of international law of our times"; (II Oppenheim, 6th Lauterpacht ed., 1944, p. 482), recognized, by
necessary implication, in articles 23, 44, 45, and 52 of Hague Regulation; and that, as a corollary of the conclusion
that the sovereignty itself is not suspended and subsists during the enemy occupation, the allegiance of the
inhabitants to their legitimate government or sovereign subsists, and therefore there is no such thing as suspended
allegiance, the basic theory on which the whole fabric of the petitioner's contention rests;
Considering that the conclusion that the sovereignty of the United State was suspended in Castine, set forth in the
decision in the case of United States vs. Rice, 4 Wheaton, 246, 253, decided in 1819, and quoted in our decision in
the cases of Co Kim Cham vs. Valdez Tan Keh and Dizon and Peralta vs. Director of Prisons, supra, in connection with
the question, not of sovereignty, but of the existence of a government de factotherein and its power to promulgate
rules and laws in the occupied territory, must have been based, either on the theory adopted subsequently in the
Hague Convention of 1907, that the military occupation of an enemy territory does not transfer the sovereignty to
the occupant; that, in the first case, the word "sovereignty" used therein should be construed to mean the exercise
of the rights of sovereignty, because as this remains vested in the legitimate government and is not transferred to
the occupier, it cannot be suspended without putting it out of existence or divesting said government thereof; and
that in the second case, that is, if the said conclusion or doctrine refers to the suspension of the sovereignty itself, it
has become obsolete after the adoption of the Hague Regulations in 1907, and therefore it can not be applied to the
present case;
Considering that even adopting the words "temporarily allegiance," repudiated by Oppenheim and other publicists,
as descriptive of the relations borne by the inhabitants of the territory occupied by the enemy toward the military
government established over them, such allegiance may, at most, be considered similar to the temporary allegiance
which a foreigner owes to the government or sovereign of the territory wherein he resides in return for the
protection he receives as above described, and does not do away with the absolute and permanent allegiance
which the citizen residing in a foreign country owes to his own government or sovereign; that just as a citizen or
subject of a government or sovereign may be prosecuted for and convicted of treason committed in a foreign
country, in the same way an inhabitant of a territory occupied by the military forces of the enemy may commit
treason against his own legitimate government or sovereign if he adheres to the enemies of the latter by giving
them aid and comfort; and that if the allegiance of a citizen or subject to his government or sovereign is nothing
more than obedience to its laws in return for the protection he receives, it would necessarily follow that a citizen
who resides in a foreign country or state would, on one hand, ipso factoacquire the citizenship thereof since he has
enforce public order and regulate the social and commercial life, in return for the protection he receives, and
would, on the other hand, lose his original citizenship, because he would not be bound to obey most of the laws of
his own government or sovereign, and would not receive, while in a foreign country, the protection he is entitled to
in his own;
Considering that, as a corollary of the suspension of the exercise of the rights of sovereignty by the legitimate
government in the territory occupied by the enemy military forces, because the authority of the legitimate power
to govern has passed into the hands of the occupant (Article 43, Hague Regulations), the political laws which
prescribe the reciprocal rights, duties and obligation of government and citizens, are suspended or in abeyance
during military occupation (Co Kim cham vs. Valdez Tan Keh and dizon, supra), for the only reason that as they
exclusively bear relation to the ousted legitimate government, they are inoperative or not applicable to the
government established by the occupant; that the crimes against national security, such as treason and espionage;
inciting to war, correspondence with hostile country, flight to enemy's country, as well as those against public
order, such as rebellion, sedition, and disloyalty, illegal possession of firearms, which are of political complexion
because they bear relation to, and are penalized by our Revised Penal Code as crimes against the legitimate
government, are also suspended or become inapplicable as against the occupant, because they can not be
committed against the latter (Peralta vs. Director of Prisons, supra); and that, while the offenses against public
order to be preserved by the legitimate government were inapplicable as offenses against the invader for the
reason above stated, unless adopted by him, were also inoperative as against the ousted government for the latter
was not responsible for the preservation of the public order in the occupied territory, yet article 114 of the said
Revised Penal Code, was applicable to treason committed against the national security of the legitimate
government, because the inhabitants of the occupied territory were still bound by their allegiance to the latter
during the enemy occupation;
Considering that, although the military occupant is enjoined to respect or continue in force, unless absolutely
prevented by the circumstances, those laws that enforce public order and regulate the social and commercial life of
the country, he has, nevertheless, all the powers of de facto government and may, at his pleasure, either change the
existing laws or make new ones when the exigencies of the military service demand such action, that is, when it is
necessary for the occupier to do so for the control of the country and the protection of his army, subject to the
restrictions or limitations imposed by the Hague Regulations, the usages established by civilized nations, the laws
of humanity and the requirements of public conscience (Peralta vs.Director of Prisons, supra; 1940 United States
Rules of Land Warfare 76, 77); and that, consequently, all acts of the military occupant dictated within these
limitations are obligatory upon the inhabitants of the territory, who are bound to obey them, and the laws of the
legitimate government which have not been adopted, as well and those which, though continued in force, are in
conflict with such laws and orders of the occupier, shall be considered as suspended or not in force and binding
upon said inhabitants;
Considering that, since the preservation of the allegiance or the obligation of fidelity and obedience of a citizen or
subject to his government or sovereign does not demand from him a positive action, but only passive attitude or
forbearance from adhering to the enemy by giving the latter aid and comfort, the occupant has no power, as a
corollary of the preceding consideration, to repeal or suspend the operation of the law of treason, essential for the
preservation of the allegiance owed by the inhabitants to their legitimate government, or compel them to adhere
and give aid and comfort to him; because it is evident that such action is not demanded by the exigencies of the
military service or not necessary for the control of the inhabitants and the safety and protection of his army, and
because it is tantamount to practically transfer temporarily to the occupant their allegiance to the titular
government or sovereign; and that, therefore, if an inhabitant of the occupied territory were compelled illegally by
the military occupant, through force, threat or intimidation, to give him aid and comfort, the former may lawfully
resist and die if necessary as a hero, or submit thereto without becoming a traitor;
Considering that adoption of the petitioner's theory of suspended allegiance would lead to disastrous
consequences for small and weak nations or states, and would be repugnant to the laws of humanity and
requirements of public conscience, for it would allow invaders to legally recruit or enlist the Quisling inhabitants of
the occupied territory to fight against their own government without the latter incurring the risk of being
prosecuted for treason, and even compel those who are not aid them in their military operation against the
resisting enemy forces in order to completely subdue and conquer the whole nation, and thus deprive them all of
their own independence or sovereignty such theory would sanction the action of invaders in forcing the people
of a free and sovereign country to be a party in the nefarious task of depriving themselves of their own freedom
and independence and repressing the exercise by them of their own sovereignty; in other words, to commit a
political suicide;
(2) Considering that the crime of treason against the government of the Philippines defined and penalized in article
114 of the Penal Code, though originally intended to be a crime against said government as then organized by
authority of the sovereign people of the United States, exercised through their authorized representative, the
Congress and the President of the United States, was made, upon the establishment of the Commonwealth
Government in 1935, a crime against the Government of the Philippines established by authority of the people of
the Philippines, in whom the sovereignty resides according to section 1, Article II, of the Constitution of the
Philippines, by virtue of the provision of section 2, Article XVI thereof, which provides that "All laws of the
Philippine Islands . . . shall remain operative, unless inconsistent with this Constitution . . . and all references in
such laws to the Government or officials of the Philippine Islands, shall be construed, in so far as applicable, to refer
to the Government and corresponding officials under this constitution;
Considering that the Commonwealth of the Philippines was a sovereign government, though not absolute but
subject to certain limitations imposed in the Independence Act and incorporated as Ordinance appended to our
Constitution, was recognized not only by the Legislative Department or Congress of the United States in approving
the Independence Law above quoted and the Constitution of the Philippines, which contains the declaration that
"Sovereignty resides in the people and all government authority emanates from them" (section 1, Article II), but
also by the Executive Department of the United States; that the late President Roosevelt in one of his messages to
Congress said, among others, "As I stated on August 12, 1943, the United States in practice regards the Philippines
as having now the status as a government of other independent nations in fact all the attributes of complete and
respected nationhood" (Congressional Record, Vol. 29, part 6, page 8173); and that it is a principle upheld by the
Supreme Court of the United States in many cases, among them in the case of Jones vs. United States (137 U.S., 202;
34 Law. ed., 691, 696) that the question of sovereignty is "a purely political question, the determination of which by
the legislative and executive departments of any government conclusively binds the judges, as well as all other
officers, citizens and subjects of the country.
Considering that section I (1) of the Ordinance appended to the Constitution which provides that pending the final
and complete withdrawal of the sovereignty of the United States "All citizens of the Philippines shall owe allegiance
to the United States", was one of the few limitations of the sovereignty of the Filipino people retained by the United
States, but these limitations do not away or are not inconsistent with said sovereignty, in the same way that the
people of each State of the Union preserves its own sovereignty although limited by that of the United States
conferred upon the latter by the States; that just as to reason may be committed against the Federal as well as
against the State Government, in the same way treason may have been committed during the Japanese occupation
against the sovereignty of the United States as well as against the sovereignty of the Philippine Commonwealth;
and that the change of our form of government from Commonwealth to Republic does not affect the prosecution of
those charged with the crime of treason committed during the Commonwealth, because it is an offense against the
same government and the same sovereign people, for Article XVIII of our Constitution provides that "The
government established by this constitution shall be known as the Commonwealth of the Philippines. Upon the
final and complete withdrawal of the sovereignty of the United States and the proclamation of Philippine
independence, the Commonwealth of the Philippines shall thenceforth be known as the Republic of the
Philippines";
This Court resolves, without prejudice to write later on a more extended opinion, to deny the petitioner's petition,
as it is hereby denied, for the reasons above set forth and for others to be stated in the said opinion, without
prejudice to concurring opinion therein, if any. Messrs. Justices Paras and Hontiveros dissent in a separate opinion.
Mr. justice Perfecto concurs in a separate opinion.

Separate Opinions
PERFECTO, J., concurring:
Treason is a war crime. It is not an all-time offense. It cannot be committed in peace time. While there is peace,
there are no traitors. Treason may be incubated when peace reigns. Treasonable acts may actually be perpetrated
during peace, but there are no traitors until war has started.
As treason is basically a war crime, it is punished by the state as a measure of self-defense and self-preservation.
The law of treason is an emergency measure. It remains dormant until the emergency arises. But as soon as war
starts, it is relentlessly put into effect. Any lukewarm attitude in its enforcement will only be consistent with
national harakiri. All war efforts would be of no avail if they should be allowed to be sabotaged by fifth columnists,
by citizens who have sold their country out to the enemy, or any other kind of traitors, and this would certainly be
the case if he law cannot be enforced under the theory of suspension.
Petitioner's thesis that allegiance to our government was suspended during enemy occupation is advanced in
support of the proposition that, since allegiance is identical with obedience to law, during the enemy occupation,
the laws of the Commonwealth were suspended. Article 114 of the Revised Penal Code, the law punishing treason,
under the theory, was one of the laws obedience to which was also suspended.
Allegiance has been defined as the obligation for fidelity and obedience which the individual owes to his
government or his sovereign in return for the protection which he receives.
"Allegiance", as the return is generally used, means fealty or fidelity to the government of which the person is
either a citizen or subject. Murray vs. The Charming Betsy, 6 U.S. (2 Cranch), 64, 120; 2 Law. ed., 208.
"Allegiance" was said by Mr. Justice Story to be "nothing more than the tie or duty of obedience of a subject to the
sovereign, under whose protection he is." United States vs. Wong Kim Ark, 18 S. Ct., 461; 169 U.S., 649; 42 Law. ed.,
890.
Allegiance is that duty which is due from every citizen to the state, a political duty binding on him who enjoys the
protection of the Commonwealth, to render service and fealty to the federal government. It is that duty which is
reciprocal to the right of protection, arising from the political relations between the government and the citizen.
Wallace vs. Harmstad, 44 Pa. (8 Wright), 492, 501.
By "allegiance" is meant the obligation to fidelity and obedience which the individual owes to the government
under which he lives, or to his sovereign, in return for the protection which he receives. It may be an absolute and
permanent obligation, or it may be a qualified and temporary one. A citizen or subject owes an absolute and
permanent allegiance to his government or sovereign, or at least until, by some open and distinct act, he renounces
it and becomes a citizen or subject of another government or sovereign, and an alien while domiciled in a country
owes it a temporary allegiance, which is continuous during his residence. Carlisle vs.United States, 83 U.S. (16
Wall.), 147, 154; 21 Law ed., 426.
"Allegiance," as defined by Blackstone, "is the tie or ligament which binds the subject to the King, in return for that
protection which the King affords the subject. Allegiance, both expressed and implied, is of two sorts, the one
natural, the other local, the former being perpetual, the latter temporary. Natural allegiance is such as is due from
all men born within the King's dominions immediately upon their birth, for immediately upon their birth they are
under the King's protection. Natural allegiance is perpetual, and for this reason, evidently founded on the nature of
government. Allegiance is a debt due from the subject upon an implied contract with the prince that so long as the
one affords protection the other will demean himself faithfully. Natural-born subjects have a great variety of rights
which they acquire by being born within the King's liegance, which can never be forfeited but by their own
misbehaviour; but the rights of aliens are much more circumscribed, being acquired only by residence, and lost
whenever they remove. If an alien could acquire a permanent property in lands, he must owe an allegiance equally
permanent to the King, which would probably be inconsistent with that which he owes his natural liege lord;
besides, that thereby the nation might, in time, be subject to foreign influence and feel many other inconveniences."
Indians within the state are not aliens, but citizens owing allegiance to the government of a state, for they receive
protection from the government and are subject to its laws. They are born in allegiance to the government of the
state. Jackson vs. Goodell, 20 Johns., 188, 911. (3 Words and Phrases, Permanent ed., 226-227.)
Allegiance. Fealty or fidelity to the government of which the person is either a citizen or subject; the duty which
is due from every citizen to the state; a political duty, binding on him who enjoys the protection of the
commonwealth, to render service and fealty to the federal government; the obligation of fidelity and obedience
which the individual owes to the government or to the sovereign under which he lives in return for the protection
he receives; that duty is reciprocal to the right of protection he receives; that duty which is reciprocal to the right of
protection, arising from the political relations between the government and the citizen.
Classification. Allegiance is of four kinds, namely: (1) Natural allegiance that which arises by nature and birth;
(2) acquired allegiance that arising through some circumstance or act other than birth, namely, by denization or
naturalization; (3) local allegiance-- that arising from residence simply within the country, for however short a
time; and (4) legal allegiance that arising from oath, taken usually at the town or leet, for, by the common law,
the oath of allegiance might be tendered to every one upon attaining the age of twelve years. (3 C.J.S., p.885.)
Allegiance. the obligation of fidelity and obedience which the individual owes to the government under which he
lives, or to his sovereign in return for the protection he receives. 15 R.C.L., 140. (Ballentine Law Dictionary, p. 68.).
"Allegiance," as its etymology indicates, is the name for the tie which binds the citizen to his state the obligation
of obedience and support which he owes to it. The state is the political person to whom this liege fealty is due. Its
substance is the aggregate of persons owing this allegiance. The machinery through which it operates is its
government. The persons who operate this machinery constitute its magistracy. The rules of conduct which the
state utters or enforces are its law, and manifest its will. This will, viewed as legally supreme, is its sovereignty.
(W.W. Willoughby, Citizenship and Allegiance in Constitutional and International Law, 1 American Journal of
International Law, p. 915.).
The obligations flowing from the relation of a state and its nationals are reciprocal in character. This principle had
been aptly stated by the Supreme Court of the United States in its opinion in the case of Luria vs. United States:
Citizenship is membership in a political society and implies a duty of allegiance on the part of the member and a
duty protection on the part of the society. These are reciprocal obligations, one being a compensation for the other.
(3 Hackworth, Digest of International Law, 1942 ed., p.6.)
Allegiance. The tie which binds the citizen to the government, in return for the protection which the government
affords him. The duty which the subject owes to the sovereign, correlative with the protection received.
It is a comparatively modern corruption of ligeance (ligeantia), which is derived from liege (ligius), meaning
absolute or unqualified. It signified originally liege fealty, i. e., absolute and qualified fealty. 18 L. Q. Rev., 47.
xxx xxx xxx
Allegiance may be an absolute and permanent obligation, or it may be a qualified and temporary one; the citizen or
subject owes the former to his government or sovereign, until by some act he distinctly renounces it, whilst the
alien domiciled in the country owes a temporary and local allegiance continuing during such residence.
(Carlisle vs. United States, 16 Wall. [U.S.], 154; 21 Law. ed., 426. (1 Bouvier's Law Dictionary, p. 179.).
The above quotations express ideas that do not fit exactly into the Philippine pattern in view of the revolutionary
insertion in our Constitution of the fundamental principle that "sovereignty resides in the people and all
government authority emanates from them." (Section 1, Article II.) The authorities above quoted, judges and
juridical publicists define allegiance with the idea that sovereignty resides somewhere else, on symbols or subjects
other than the people themselves. Although it is possible that they had already discovered that the people and only
the people are the true sovereign, their minds were not yet free from the shackles of the tradition that the powers
of sovereignty have been exercised by princes and monarchs, by sultans and emperors, by absolute and tyrannical
rules whose ideology was best expressed in the famous words of one of the kings of France: "L'etat c'est moi," or
such other persons or group of persons posing as the government, as an entity different and in opposition to the
people themselves. Although democracy has been known ever since old Greece, and modern democracies in the
people, nowhere is such principle more imperative than in the pronouncement embodied in the fundamental law
of our people.
To those who think that sovereignty is an attribute of government, and not of the people, there may be some
plausibility in the proposition that sovereignty was suspended during the enemy occupation, with the consequence
that allegiance must also have been suspended, because our government stopped to function in the country. But
the idea cannot have any place under our Constitution. If sovereignty is an essential attribute of our people,
according to the basic philosophy of Philippine democracy, it could not have been suspended during the enemy
occupation. Sovereignty is the very life of our people, and there is no such thing as "suspended life." There is no
possible middle situation between life and death. Sovereignty is the very essence of the personality and existence
of our people. Can anyone imagine the possibility of "suspended personality" or "suspended existence" of a people?
In no time during enemy occupation have the Filipino people ceased to be what they are.
The idea of suspended sovereignty or suspended allegiance is incompatible with our Constitution.
There is similarity in characteristics between allegiance to the sovereign and a wife's loyalty to her husband.
Because some external and insurmountable force precludes the husband from exercising his marital powers,
functions, and duties and the wife is thereby deprived of the benefits of his protection, may the wife invoke the
theory of suspended loyalty and may she freely share her bed with the assailant of their home? After giving aid and
comfort to the assailant and allowing him to enjoy her charms during the former's stay in the invaded home, may
the wife allege as defense for her adultery the principle of suspended conjugal fidelity?
Petitioner's thesis on change of sovereignty at the advent of independence on July 4, 1946, is unacceptable. We
have already decided in Brodett vs. De la Rosa and Vda. de Escaler (p. 752, ante) that the Constitution of the
Republic is the same as that of the Commonwealth. The advent of independence had the effect of changing the
name of our Government and the withdrawal by the United States of her power to exercise functions of sovereignty
in the Philippines. Such facts did not change the sovereignty of the Filipino people. That sovereignty, following our
constitutional philosophy, has existed ever since our people began to exist. It has been recognized by the United
States of America, at least since 1935, when President Roosevelt approved our Constitution. By such act, President
Roosevelt, as spokesman of the American people, accepted and recognized the principle that sovereignty resides in
the people that is, that Philippine sovereignty resides in the Filipino people.
The same sovereignty had been internationally recognized long before the proclamation of independence on July 4,
1946. Since the early part of the Pacific war, President Quezon had been sitting as representative of a sovereign
people in the Allied War Council, and in June, 1945, the same Filipino people took part outstanding and brilliant,
it may be added in the drafting and adoption of the charter of the United Nations, the unmistakable forerunner
of the future democratic federal constitution of the world government envisioned by all those who adhere to the
principle of unity of all mankind, the early realization of which is anxiously desired by all who want to be spared
the sufferings, misery and disaster of another war.
Under our Constitution, the power to suspend laws is of legislative nature and is lodged in Congress. Sometimes it
is delegated to the Chief Executive, such as the power granted by the Election Code to the President to suspend the
election in certain districts and areas for strong reasons, such as when there is rebellion, or a public calamity, but it
has never been exercised by tribunals. The Supreme Court has the power to declare null and void all laws violative
of the Constitution, but it has no power, authority, or jurisdiction to suspend or declare suspended any valid law,
such as the one on treason which petitioner wants to be included among the laws of the Commonwealth which, by
his theory of suspended allegiance and suspended sovereignty, he claims have been suspended during the Japanese
occupation.
Suppose President Quezon and his government, instead of going from Corregidor to Australia, and later to
Washington, had fled to the mountains of Luzon, and a group of Filipino renegades should have killed them to
serve the interests of the Japanese imperial forces. By petitioner's theory, those renegades cannot be prosecuted
for treason or for rebellion or sedition, as the laws punishing them were suspended. Such absurd result betrays the
untenability of the theory.
"The defense of the State is a prime duty of Government, and in the fulfillment of that duty all citizens may be
required by law to render personal, military or civil service." Thus, section 2 of Article II of the Constitution
provides: That duty of defense becomes more imperative in time of war and when the country is invaded by an
aggressor nation. How can it be fulfilled if the allegiance of the citizens to the sovereign people is suspended during
enemy occupation? The framers of the Constitution surely did not entertain even for the moment the absurdity
that when the allegiance of the citizens to the sovereign people is more needed in the defense of the survival of the
state, the same should be suspended, and that upon such suspension those who may be required to render
personal, military or civil service may claim exemption from the indispensable duty of serving their country in
distress.
Petitioner advances the theory that protection in the consideration of allegiance. He argues that the
Commonwealth Government having been incapacitated during enemy occupation to protect the citizens, the latter
were relieved of their allegiance to said government. The proposition is untenable. Allegiance to the sovereign is an
indispensable bond for the existence of society. If that bond is dissolved, society has to disintegrate. Whether or not
the existence of the latter is the result of the social compact mentioned by Roseau, there can be no question that
organized society would be dissolved if it is not united by the cohesive power of the citizen's allegiance. Of course,
the citizens are entitled to the protection of their government, but whether or not that government fulfills that
duty, is immaterial to the need of maintaning the loyalty and fidelity of allegiance, in the same way that the physical
forces of attraction should be kept unhampered if the life of an individual should continue, irrespective of the
ability or inability of his mind to choose the most effective measures of personal protection.
After declaring that all legislative, executive, and judicial processes had during and under the Japanese regime,
whether executed by the Japanese themselves or by Filipino officers of the puppet government they had set up, are
null and void, as we have done in our opinions in Co Kim Cham vs. Valdez Tan Keh and Dizon (75 Phil., 113),
in Peralta vs. Director of Prison (75, Phil., 285), and in several other cases where the same question has been
mentioned, we cannot consistently accept petitioner's theory.
If all laws or legislative acts of the enemy during the occupation were null and void, and as we cannot imagine the
existence of organized society, such as the one constituted by the Filipino people, without laws of the
Commonwealth were the ones in effect during the occupation and the only ones that could claim obedience from
our citizens.
Petitioner would want us to accept the thesis that during the occupation we owed allegiance to the enemy. To give
way to that paradoxical and disconcerting allegiance, it is suggested that we accept that our allegiance to our
legitimate government was suspended. Petitioner's proposition has to fall by its own weight, because of its glaring
absurdities. Allegiance, like its synonyms, loyalty and fidelity, is based on feelings of attraction, love, sympathy,
admiration, respect, veneration, gratitude, amity, understanding, friendliness. These are the feelings or some of the
feelings that bind us to our own people, and are the natural roots of the duty of allegiance we owe them. The enemy
only provokes repelling and repulsive feelings hate, anger, vexation, chagrin, mortification, resentment,
contempt, spitefulness. The natural incompatibility of political, social and ethical ideologies between our people
and the Japanese, making impossible the existence of any feeling of attraction between them, aside from the initial
fact that the Japanese invaded our country as our enemy, was aggravated by the morbid complexities of
haughtiness, braggadocio and beastly brutality of the Nippon soldiers and officers in their dealings with even the
most inoffensive of our citizens.
Giving bread to our enemy, and, after slapping one side of our face, offer him the other to be further slapped, may
appear to be divinely charitable, but to make them a reality, it is necessary to change human nature. Political
actions, legal rules and judicial decisions deal with human relations, taking man as he is, not as he should be. To
love the enemy is not natural. As long as human pyschology remains as it is, the enemy shall always be hated. Is it
possible to conceive an allegiance based on hatred?
The Japanese, having waged against us an illegal war condemned by prevailing principles of international law,
could not have established in our country any government that can be legally recognized as de facto. They came as
bandits and ruffians, and it is inconceivable that banditry and ruffianism can claim any duty of allegiance even a
temporary one from a decent people.
One of the implications of petitioner's theory, as intimated somewhere, is that the citizens, in case of invasion, are
free to do anything not forbidden by the Hague Conventions. Anybody will notice immediately that the result will
be the doom of small nations and peoples, by whetting the covetousness of strong powers prone on imperialistic
practices. In the imminence of invasion, weak-hearted soldiers of the smaller nations will readily throw away their
arms to rally behind the paladium of the invaders.
Two of the three great departments of our Government have already rejected petitioner's theory since September
25, 1945, the day when Commonwealth Act No. 682 took effect. By said act, creating the People's Court to try and
decide all cases of crime against national security "committed between December 8, 1941 and September 2, 1945,"
(section 2), the legislative and executive departments have jointly declared that during the period above
mentioned, including the time of Japanese occupation, all laws punishing crimes against national security,
including article 114 of the Revised Penal Code, punishing treason, had remained in full effect and should be
enforced.
That no one raised a voice in protest against the enactment of said act and that no one, at the time the act was
being considered by the Senate and the House of Representatives, ever dared to expose the uselessness of creating
a People's Court to try crime which, as claimed by petitioner, could not have been committed as the laws punishing
them have been suspended, is a historical fact of which the Supreme Court may take judicial notice. This fact shows
universal and unanimous agreement of our people that the laws of the Commonwealth were not suspended and
that the theory of suspended allegiance is just an afterthought provoked by a desperate effort to help quash the
pending treason cases at any cost.
Among the arguments adduced in favor of petitioner's theory is that it is based on generally accepted principles of
international law, although this argument becomes futile by petitioner's admission that the theory is advantageous
to strong powers but harmful to small and weak nations, thus hinting that the latter cannot accept it by heart.
Suppose we accept at face value the premise that the theories, urged by petitioner, of suspended allegiance and
suspended sovereignty are based on generally accepted principles of international law. As the latter forms part of
our laws by virtue of the provisions of section 3 of Article II of the Constitution, it seems that there is no alternative
but to accept the theory. But the theory has the effect of suspending the laws, especially those political in nature.
There is no law more political in nature than the Constitution of the Philippines. The result is an inverted
reproduction of the Greek myth of Saturn devouring his own children. Here, under petitioner's theory, the
offspring devours its parent.
Can we conceive of an instance in which the Constitution was suspended even for a moment?
There is conclusive evidence that the legislature, as policy-determining agency of government, even since the
Pacific war started on December 7, 1941, intimated that it would not accept the idea that our laws should be
suspended during enemy occupation. It must be remembered that in the middle of December, 1941, when Manila
and other parts of the archipelago were under constant bombing by Japanese aircraft and enemy forces had
already set foot somewhere in the Philippines, the Second National Assembly passed Commonwealth Act No. 671,
which came into effect on December 16, 1941. When we approved said act, we started from the premise that all our
laws shall continue in effect during the emergency, and in said act we even went to the extent of authorizing the
President "to continue in force laws and appropriations which would lapse or otherwise become inoperative,"
(section 2, [d]), and also to "promulgate such rules and regulations as he may deem necessary to carry out the
national policy," (section 2), that "the existence of war between the United States and other countries of Europe
and Asia, which involves the Philippines, makes it necessary to invest the President with extraordinary powers in
order to meet the resulting emergency." (Section 1.) To give emphasis to the intimation, we provided that the rules
and regulations provided "shall be in force and effect until the Congress of the Philippines shall otherwise provide,"
foreseeing the possibility that Congress may not meet as scheduled as a result of the emergency, including invasion
and occupation by the enemy. Everybody was then convinced that we did not have available the necessary means
of repelling effectivity the enemy invasion.
Maybe it is not out of place to consider that the acceptance of petitioner's theory of suspended allegiance will cause
a great injustice to those who, although innocent, are now under indictment for treason and other crimes involving
disloyalty to their country, because their cases will be dismissed without the opportunity for them to revindicate
themselves. Having been acquitted upon a mere legal technicality which appears to us to be wrong, history will
indiscriminality classify them with the other accused who were really traitors to their country. Our conscience
revolts against the idea of allowing the innocent ones to go down in the memory of future generations with the
infamous stigma of having betrayed their own people. They should not be deprived of the opportunity to show
through the due process of law that they are free from all blame and that, if they were really patriots, they acted as
such during the critical period of test.

HILADO, J., concurring:


I concur in the result reached in the majority opinion to the effect that during the so-called Japanese occupation of
the Philippines (which was nothing more than the occupation of Manila and certain other specific regions of the
Islands which constituted the minor area of the Archipelago) the allegiance of the citizens of this country to their
legitimate government and to the United States was not suspended, as well as the ruling that during the same
period there was no change of sovereignty here; but my reasons are different and I proceed to set them forth:
I. SUSPENDED ALLEGIANCE.
(a) Before the horror and atrocities of World War I, which were multiplied more than a hundred-fold in World War
II, the nations had evolved certain rules and principles which came to be known as International Law, governing
their conduct with each other and toward their respective citizens and inhabitants, in the armed forces or civilian
life, in time of peace or in time of war. During the ages which preceded that first world conflict the civilized
governments had no realization of the potential excesses of which "men's inhumanity to man" could be capable. Up
to that time war was, at least under certain conditions, considered as sufficiently justified, and the nations had not
on that account, proscribed nor renounced it as an instrument of national policy, or as a means of settling
international disputes. It is not for us now to dwell upon the reasons accounting for this historical fact. Suffice it to
recognize its existence in history.
But when in World War I civilized humanity saw that war could be, as it actually was, employed for entirely
different reasons and from entirely different motives, compared to previous wars, and the instruments and
methods of warfare had been so materially changed as not only to involve the contending armed forces on well
defined battlefields or areas, on land, in the sea, and in the air, but to spread death and destruction to the innocent
civilian populations and to their properties, not only in the countries engaged in the conflict but also in neutral
ones, no less than 61 civilized nations and governments, among them Japan, had to formulate and solemnly
subscribe to the now famous Briand-Kellogg Pact in the year 1928. As said by Justice Jackson of the United States
Supreme Court, as chief counsel for the United States in the prosecution of "Axis war criminals," in his report to
President Truman of June 7, 1945:
International law is not capable of development by legislation, for there is no continuously sitting international
legislature. Innovations and revisions in international law are brought about by the action of governments
designed to meet a change circumstances. It grows, as did the common law, through decisions reached from time to
time in adopting settled principles to new situations.
xxx xxx xxx
After the shock to civilization of the war of 1914-1918, however, a marked reversion to the earlier and sounder
doctrines of international law took place. By the time the Nazis came to power it was thoroughly established that
launching an aggressive war or the institution of war by treachery was illegal and that the defense of legitimate
warfare was no longer available to those who engaged in such an enterprise. It is high time that we act on the
juridical principle that aggressive war-making is illegal and criminal.
The re-establishment of the principle of justifiable war is traceable in many steps. One of the most significant is the
Briand-Kellogg Pact of 1928 by which Germany, Italy, and Japan, in common with the United States and practically
all the nations of the world, renounced war as an instrument of national policy, bound themselves to seek the
settlement of disputes only by pacific means, and condemned recourse to war for the solution of international
controversies.
Unless this Pact altered the legal status of wars of aggression, it has no meaning at all and comes close to being an
act of deception. In 1932 Mr. Henry L. Stimson, as United States Secretary of State, gave voice to the American
concept of its effect. He said, "war between nations was renounced by the signatories of the Briand-Kellogg Treaty.
This means that it has become illegal throughout practically the entire world. It is no longer to be the source and
subject of rights. It is no longer to be the principle around which the duties, the conduct, and the rights of nations
revolve. It is an illegal thing. . . . By that very act we have made obsolete many legal precedents and have given the
legal profession the task of re-examining many of its Codes and treaties.
This Pact constitutes only one reversal of the viewpoint that all war is legal and has brought international law into
harmony with the common sense of mankind that unjustifiable war is a crime.
Without attempting an exhaustive catalogue, we may mention the Geneva Protocol of 1924 for the Pacific
Settlement of International Disputes, signed by the representatives of forty-eight governments, which declared
that "a war of aggression constitutes .. an International crime. . . .
The Eight Assembly of the League of Nations in 1927, on unanimous resolution of the representatives of forty-eight
member-nations, including Germany, declared that a war of aggression constitutes an international crime. At the
Sixth Pan-American Conference of 1928, the twenty-one American Republics unanimously adopted a resolution
stating that "war of aggression constitutes an international crime against the human species."
xxx xxx xxx
We therefore propose to change that a war of aggression is a crime, and that modern international law has
abolished the defense that those who incite or wage it are engaged in legitimate business. Thus may the forces of
the law be mobilized on the side of peace. ("U.S.A. An American Review," published by the United States Office of
War Information, Vol. 2, No. 10; emphasis supplied.).
When Justice Jackson speaks of "a marked reversion to the earlier and sounder doctrines of international law" and
"the re-establishment of the principle of justifiable war," he has in mind no other than "the doctrine taught by
Grotius, the father of international law, that there is a distinction between the just and the unjust war the war of
defense and the war of aggression" to which he alludes in an earlier paragraph of the same report.
In the paragraph of said report immediately preceding the one last above mentioned Justice Jackson says that
"international law as taught in the 19th and the early part of the 20th century generally declared that war-making
was not illegal and no crime at law." But, as he says in one of the paragraphs hereinabove quoted from that report,
the Briand-Kellogg Pact constitutes a reversal of the view-point that all war is legal and has brought international
law into harmony with the common sense of mankind that unjustifiable war is a crime. Then he mentions as
other reversals of the same viewpoint, the Geneva Protocol of 1924 for the Pacific Settlement of International
Disputes, declaring that a war of aggression constitutes an international crime; the 8th assembly of the League of
Nations in 1927, declaring that a war of aggression constitutes an international crime; and the 6th Pan-American
conference of 1928, which unanimously adopted a resolution stating that war of aggression constitutes an
international crime against the human species: which enumeration, he says, is not an attempt at an exhaustive
catalogue.
It is not disputed that the war started by Japan in the Pacific, first, against the United States, and later, in rapid
succession, against other allied nations, was a war of aggression and utterly unjustifiable. More aggressive still, and
more unjustifiable, as admitted on all sides, was its attack against the Philippines and its consequent invasion and
occupation of certain areas thereof.
Some of the rules and principles of international law which have been cited for petitioner herein in support of his
theory of suspended allegiance, have been evolved and accepted during those periods of the history of nations
when all war was considered legal, as stated by Justice Jackson, and the others have reference to military
occupation in the course of really justifiable war.
Japan in subscribing the Briand-Kellogg Pact thirteen years before she started the aggressive war which threw the
entire Pacific area into a seething cauldron from the last month of 1941 of the first week of September, 1945,
expressly agreed to outlaw, proscribe and renounce war as an instrument of national policy, and bound herself to
seek the settlement of her disputes with other nations only by pacific means. Thus she expressly gave her consent
to that modification of the then existing rules and principles of international law governing the matter. With the
modification, all the signatories to the pact necessarily accepted and bound themselves to abide by all its
implications, among them the outlawing, prescription and renunciation of military occupation of another nation's
territory in the course of a war thus outlawed, proscribed and renounced. This is only one way of saving that the
rules and principles of international law therefore existing on the subject of military occupation were
automatically abrogated and rendered ineffective in all future cases of war coming under the ban and
condemnation of the pact.
If an unjustifiable war is a crime; if a war of aggression constitutes an international crime; if such a war is an
international crime against the human species: a nation which occupies a foreign territory in the course of such a
war cannot possibly, under any principle of natural or positive law, acquire or posses any legitimate power or right
growing out or incident to such occupation. Concretely, Japan in criminally invading the Philippines and occupying
certain portions of its territory during the Pacific war, could not have nor exercise, in the legal sense and only
this sense should we speak here with respect to this country and its citizens, any more than could a burglar
breaking through a man's house pretends to have or to exercise any legal power or right within that house with
respect either to the person of the owner or to his property. To recognize in the first instance any legal power or
right on the part of the invader, and in the second any legal power or right on the part of the burglar, the same as in
case of a military occupant in the course of a justifiable war, would be nothing short of legalizing the crime itself. It
would be the most monstrous and unpardonable contradiction to prosecute, condemn and hang the appropriately
called war criminals of Germany, Italy, and Japan, and at the same time recognize any lawfulness in their
occupation invaded. And let it not be forgotten that the Philippines is a member of the United Nations who have
instituted and conducted the so-called war crimes trials. Neither should we lose sight of the further fact that this
government has a representative in the international commission currently trying the Japanese war criminals in
Tokyo. These facts leave no room for doubt that this government is in entire accord with the other United Nations
in considering the Pacific war started by Japan as a crime. Not only this, but this country had six years before the
outbreak of the Pacific war already renounced war as an instrument of national policy (Constitution, Article II,
section 2), thus in consequence adopting the doctrine of the Briand-Kellogg Pact.
Consequently, it is submitted that it would be absolutely wrong and improper for this Court to apply to the
occupation by Japan of certain areas of the Philippines during that war the rules and principles of international law
which might be applicable to a military occupation occurring in the course of a justifiable war. How can this Court
recognize any lawfulness or validity in that occupation when our own government has sent a representative to said
international commission in Tokyo trying the Japanese "war criminals" precisely for the "crimes against humanity
and peace" committed by them during World War II of which said occupation was but part and parcel? In such
circumstances how could such occupation produce no less an effect than the suspension of the allegiance of our
people to their country and government?
(b) But even in the hypothesis and not more than a mere hypothesis that when Japan occupied the City of
Manila and certain other areas of the Philippines she was engaged in a justifiable war, still the theory of suspended
allegiance would not hold good. The continuance of the allegiance owed to a notion by its citizens is one of those
high privileges of citizenship which the law of nations denies to the occupant the power to interfere with.
. . . His (of occupant) rights are not, however, commensurate with his power. He is thus forbidden to take certain
measures which he may be able to apply, and that irrespective of their efficacy. The restrictions imposed upon him
are in theory designed to protect the individual in the enjoyment of some highly important privileges. These
concern his allegiance to the de jure sovereign, his family honor and domestic relations, religious convictions,
personal service, and connection with or residence in the occupied territory.
The Hague Regulations declare that the occupant is forbidden to compel the inhabitants to swear allegiance to the
hostile power. . . . (III Hyde, International Law, 2d revised ed., pp. 1898-1899.)
. . . Nor may he (occupant) compel them (inhabitants) to take an oath of allegiance. Since the authority of the
occupant is not sovereignty, the inhabitants owe no temporary allegiance to him. . . . (II Oppenheim, International
Law, pp. 341-344.)
The occupant's lack of the authority to exact an oath of allegiance from the inhabitants of the occupied territory is
but a corollary of the continuance of their allegiance to their own lawful sovereign. This allegiance does not consist
merely in obedience to the laws of the lawful sovereign, but more essentially consists in loyalty or fealty to him. In
the same volume and pages of Oppenheim's work above cited, after the passage to the effect that the inhabitants of
the occupied territory owe no temporary allegiance to the occupant it is said that "On the other hand, he may
compel them to take an oath sometimes called an 'oath of neutrality' . . . willingly to submit to his 'legitimate
commands.' Since, naturally, such "legitimate commands" include the occupant's laws, it follows that said occupant,
where the rule is applicable, has the right to compel the inhabitants to take an oath of obedience to his laws; and
since according to the same rule, he cannot exact from the inhabitants an oath of obedience to his laws; and since,
according to the same rule, he cannot exact from the inhabitants an oath of allegiance, it follows that obedience to
his laws, which he can exact from them, does not constitute allegiance.
(c) The theory of suspended allegiance is unpatriotic to the last degree. To say that when the one's country is
unable to afford him in its protection, he ceases to be bound to it by the sacred ties of allegiance, is to advocate the
doctrine that precisely when his country is in such distress, and therefore most needs his loyalty, he is absolved
from the loyalty. Love of country should be something permanent and lasting, ending only in death; loyalty should
be its worth offspring. The outward manifestation of one or the other may for a time be prevented or thwarted by
the irresistible action of the occupant; but this should not in the least extinguish nor obliterate the invisible
feelings, and promptings of the spirit. And beyond the unavoidable consequences of the enemy's irresistible
pressure, those invisible feelings and promptings of the spirit of the people should never allow them to act, to
speak, nor even to think a whit contrary to their love and loyalty to the Fatherland. For them, indicted, to face their
country and say to it that, because when it was overrun and vanquished by the barbarous invader and, in
consequence was disabled from affording them protection, they were released from their sacred obligation of
allegiance and loyalty, and could therefore freely adhere to its enemy, giving him aid and comfort, incurring no
criminal responsibility therefor, would only tend to aggravate their crime.
II. CHANGE OF SOVEREIGNTY
Article II, section 1, of the Constitution provides that "Sovereignty resides in the people and all government
authority emanates from them." The Filipino people are the self-same people before and after Philippine
Independence, proclaimed on July 4, 1946. During the life of the Commonwealth sovereignty resided in them under
the Constitution; after the proclamation of independence that sovereignty remained with them under the very
same fundamental law. Article XVIII of the said Constitution stipulates that the government established thereby
shall be known as the Commonwealth of the Philippines; and that upon the final and complete withdrawal of the
sovereignty of the United States and the proclamation of Philippine independence, "The Commonwealth of the
Philippines shall thenceforth be known as the Republic of the Philippines." Under this provision the Government of
the Philippines immediately prior to independence was essentially to be the identical government thereafter
only the name of that government was to be changed.
Both before and after the adoption of the Philippine Constitution the people of the Philippines were and are always
the plaintiff in all criminal prosecutions, the case being entitled: "The People of the Philippines vs. (the defendant or
defendants)." This was already true in prosecutions under the Revised Penal Code containing the law of treason.
"The Government of the Philippines" spoken of in article 114 of said Code merely represents the people of the
Philippines. Said code was continued, along with the other laws, by Article XVI, section 2, of the Constitution which
constitutional provision further directs that "all references in such laws to the Government or officials of the
Philippine Islands shall be construed, in so far as applicable, to refer to the Government and corresponding officials
under this Constitution" of course, meaning the Commonwealth of the Philippines before, and the Republic of
the Philippines after, independence (Article XVIII). Under both governments sovereignty resided and resides in the
people (Article II, section 1). Said sovereignty was never transferred from that people they are the same people
who preserve it to this day. There has never been any change in its respect.
If one committed treason againsts the People of the Philippines before July 4, 1946, he continues to be criminally
liable for the crime to the same people now. And if, following the literal wording of the Revised Penal Code, as
continued by the Constitution, that accused owed allegiance upon the commission of the crime to the "Government
of the Philippines," in the textual words of the Constitution (Article XVI, section 2, and XVIII) that was the same
government which after independence became known as the "Republic of the Philippines." The most that can be
said is that the sovereignty of the people became complete and absolute after independence that they became,
politically, fully of age, to use a metaphor. But if the responsibility for a crime against a minor is not extinguished
by the mere fact of his becoming of age, why should the responsibility for the crime of treason committed against
the Filipino people when they were not fully politically independent be extinguished after they acquire this status?
The offended party continues to be the same only his status has changed.
PARAS, J., dissenting:
During the long period of Japanese occupation, all the political laws of the Philippines were suspended. This is full
harmony with the generally accepted principles of the international law adopted by our Constitution(Article II,
section 3) as a part of the law of the Nation. Accordingly, we have on more than one occasion already stated that
"laws of a political nature or affecting political relations, . . . are considered as suspended or in abeyance during the
military occupation" (Co Kim Cham vs. Valdez Tan Keh and Dizon, 75 Phil., 113, 124), and that the rule "that laws of
political nature or affecting political relations are considered suspended or in abeyance during the military
occupation, is intended for the governing of the civil inhabitants of the occupied territory." (Ruffy vs. Chief of Staff,
Philippine Army, 75, Phil., 875, 881.)
The principle is recognized by the United States of America, which admits that the occupant will naturally
suspends all laws of a political nature and all laws which affect the welfare and safety of his command, such action
to be made known to the inhabitants.(United States Rules of Land Welfare, 1940, Article 287.) As allegiance to the
United States is an essential element in the crime of treason under article 114 of the Revised Penal Code, and in
view of its position in our political structure prior to the independence of the Philippines, the rule as interpreted
and practiced in the United States necessarily has a binding force and effect in the Philippines, to the exclusion of
any other construction followed elsewhere, such as may be inferred, rightly or wrongly, from the isolated
cases 1 brought to our attention, which, moreover, have entirely different factual bases.
Corresponding notice was given by the Japanese occupying army, first, in the proclamation of its Commander in
chief of January 2, 1942, to the effect that as a "result of the Japanese Military operations, the sovereignty of the
United States of America over the Philippines has completely disappeared and the Army hereby proclaims the
Military Administration under martial law over the district occupied by the Army;" secondly, in Order No. 3 of the
said Commander in Chief of February 20, 1942, providing that "activities of the administrative organs and judicial
courts in the Philippines shall be based upon the existing statutes, orders, ordinances and customs until further
orders provided that they are not inconsistent with the present circumstances under the Japanese Military
Administration;" and, thirdly, in the explanation to Order No. 3 reminding that "all laws and regulations of the
Philippines has been suspended since Japanese occupation," and excepting the application of "laws and regulations
which are not proper act under the present situation of the Japanese Military Administration," especially those
"provided with some political purposes."
The suspension of the political law during enemy occupation is logical, wise and humane. The latter phase
outweighs all other aspects of the principle aimed more or less at promoting the necessarily selfish motives and
purposes of a military occupant. It thus consoling to note that the powers instrumental in the crystallization of the
Hague Conventions of 1907 did not forget to declare that they were "animated by the desire to serve . . . the
interest of the humanity and the over progressive needs of civilization," and that "in case not included in the
Regulations adopted by them, the inhabitants and the belligerents remain under the protection and the rule of the
principles of international law, as they result from the usages established among civilized peoples, from the laws of
humanity, and the dictates of the public conscience." These saving statements come to the aid of the inhabitants in
the occupied territory in a situation wherein, even before the belligerent occupant "takes a further step and by
appropriate affirmative action undertakes to acquire the right of sovereignty for himself, . . . the occupant is likely
to regard to himself as clothed with freedom to endeavor to impregnate the people who inhabit the area concerned
with his own political ideology, and to make that endeavor successful by various forms of pressure exerted upon
enemy officials who are permitted to retain the exercise of normal governmental functions." (Hyde, International
Law, Vol. III, Second Revised Edition, 1945, p. 1879.)
The inhabitants of the occupied territory should necessarily be bound to the sole authority of the invading power,
whose interest and requirements are naturally in conflict with those of the displaced government, if it is legitimate
for the military occupant to demand and enforce from the inhabitants such obedience as may be necessary for the
security of his forces, for the maintenance of law and order, and for the proper administration of the country
(United States Rules of Land Warfare, 1940, article 297), and to demand all kinds of services "of such a nature as
not to involve the population in the obligation of taking part in military operations against their own country"
(Hague Regulations, article 52);and if, as we have in effect said, by the surrender the inhabitants pass under a
temporary allegiance to the government of the occupant and are bound by such laws, and such only, as it chooses
to recognize and impose, and the belligerent occupant `is totally independent of the constitution and the laws of
the territory, since occupation is an aim of warfare, and the maintenance and safety of his forces, and the purpose
of war, stand in the foreground of his interest and must be promoted under all circumstances or conditions."
(Peralta vs. Director of Prisons, 75 Phil., 285, 295), citing United States vs. Rice, 4 Wheaton, 246, and quoting
Oppenheim, International Law, Vol. II. Sixth Edition, Revised, 1944,p. 432.)
He would be a bigot who cannot or would refuse to see the cruel result if the people in an occupied territory were
required to obey two antagonistic and opposite powers. To emphasize our point, we would adopt the argument, in
a reverse order, of Mr. Justice Hilado in Peralta vs. Director of Prisons (75 Phil., 285, 358), contained in the following
passage:
To have bound those of our people who constituted the great majority who never submitted to the Japanese
oppressors, by the laws, regulations, processes and other acts of those two puppet governments, would not only
have been utterly unjust and downright illegal, but would have placed them in the absurd and impossible condition
of being simultaneously submitted to two mutually hostile governments, with their respective constitutional and
legislative enactments and institutions on the one hand bound to continue owing allegiance to the United States
and the Commonwealth Government, and, on the other, to owe allegiance, if only temporary, to Japan.
The only sensible purpose of the treason law which is of political complexion and taken out of the territorial law
and penalized as a new offense committed against the belligerent occupant, incident to a state of war and
necessary for the control of the occupant (Alcantara vs. Director of Prisons, 75 Phil., 494), must be the
preservation of the nation, certainly not its destruction or extermination. And yet the latter is unwittingly wished
by those who are fond of the theory that what is suspended is merely the exercise of sovereignty by the de
jure government or the latter's authority to impose penal sanctions or that, otherwise stated, the suspension refers
only to the military occupant. If this were to be the only effect, the rule would be a meaningless and superfluous
optical illusion, since it is obvious that the fleeing or displaced government cannot, even if it should want,
physically assert its authority in a territory actually beyond its reach, and that the occupant, on the other hand, will
not take the absurd step of prosecuting and punishing the inhabitants for adhering to and aiding it. If we were to
believe the opponents of the rule in question, we have to accept the absurd proposition that the guerrillas can all
be prosecuted with illegal possession of firearms. It should be borne in the mind that "the possession by the
belligerent occupant of the right to control, maintain or modify the laws that are to obtain within the occupied area
is an exclusive one. The territorial sovereign driven therefrom, can not compete with it on an even plane. Thus, if
the latter attempt interference, its action is a mere manifestation of belligerent effort to weaken the enemy. It has
no bearing upon the legal quality of what the occupant exacts, while it retains control. Thus, if the absent territorial
sovereign, through some quasi-legislative decree, forbids its nationals to comply with what the occupant has
ordained obedience to such command within the occupied territory would not safeguard the individual from the
prosecution by the occupant." (Hyde, International Law, Vol. III, Second Revised Edition, 1945, p. 1886.)
As long as we have not outlawed the right of the belligerent occupant to prosecute and punish the inhabitants for
"war treason" or "war crimes," as an incident of the state of war and necessity for the control of the occupied
territory and the protection of the army of the occupant, against which prosecution and punishment such
inhabitants cannot obviously be protected by their native sovereign, it is hard to understand how we can justly rule
that they may at the same time be prosecuted and punished for an act penalized by the Revised Penal Code, but
already taken out of the territorial law and penalized as a new offense committed against the belligerent occupant.
In Peralta vs. Director of Prisons, 75 Phil., 285, 296), we held that "the Constitution of the Commonwealth
Government was suspended during the occupation of the Philippines by the Japanese forces or the belligerent
occupant at regular war with the United States," and the meaning of the term "suspended" is very plainly expressed
in the following passage (page 298):
No objection can be set up to the legality of its provisions in the light of the precepts of our Commonwealth
Constitution relating to the rights of the accused under that Constitution, because the latter was not in force during
the period of the Japanese military occupation, as we have already stated. Nor may said Constitution be applied
upon its revival at the time of the re-occupation of the Philippines by the virtue of the priciple of postliminium,
because "a constitution should operate prospectively only, unless the words employed show a clear intention that
it should have a retrospective effect," (Cooley's Constitutional Limitations, seventh edition, page 97, and a case
quoted and cited in the foot-note), especially as regards laws of procedure applied to cases already terminated
completely.
In much the same way, we should hold that no treason could have been committed during the Japanese military
occupation against the United States or the Commonwealth Government, because article 114 of the Revised Penal
Code was not then in force. Nor may this penal provision be applied upon its revival at the time of the reoccupation
of the Philippines by virtue of the principle of postliminium, because of the constitutional inhibition against any ex
post facto law and because, under article 22 of the Revised Penal Code, criminal laws shall have a retroactive effect
only in so far as they favor the accused. Why did we refuse to enforce the Constitution, more essential to
sovereignty than article 114 of the Revised Penal Code in the aforesaid of Peralta vs. Director of Prisons if, as alleged
by the majority, the suspension was good only as to the military occupant?
The decision in the United States vs. Rice (4 Wheaton, 246), conclusively supports our position. As analyzed and
described in United States vs. Reiter (27 Fed. Cas., 773), that case "was decided by the Supreme Court of the United
States the court of highest human authority on that subject and as the decision was against the United States,
and in favor of the authority of Great Britain, its enemy in the war, and was made shortly after the occurrence of
the war out of which it grew; and while no department of this Government was inclined to magnify the rights of
Great Britain or disparage those of its own government, there can be no suspicion of bias in the mind of the court in
favor of the conclusion at which it arrived, and no doubt that the law seemed to the court to warrant and demand
such a decision. That case grew out of the war of 1812, between the United States and Great Britain. It appeared
that in September, 1814, the British forces had taken the port of Castine, in the State of Maine, and held it in
military occupation; and that while it was so held, foreign goods, by the laws of the United States subject to duty,
had been introduced into that port without paying duties to the United States. At the close of the war the place by
treaty restored to the United States, and after that was done Government of the United States sought to recover
from the persons so introducing the goods there while in possession of the British, the duties to which by the laws
of the United States, they would have been liable. The claim of the United States was that its laws were properly in
force there, although the place was at the time held by the British forces in hostility to the United States, and the
laws, therefore, could not at the time be enforced there; and that a court of the United States (the power of that
government there having since been restored) was bound so to decide. But this illusion of the prosecuting officer
there was dispelled by the court in the most summary manner. Mr. Justice Story, that great luminary of the
American bench, being the organ of the court in delivering its opinion, said: 'The single question is whether goods
imported into Castine during its occupation by the enemy are liable to the duties imposed by the revenue laws
upon goods imported into the United States.. We are all of opinion that the claim for duties cannot be sustained. . . .
The sovereignty of the United States over the territory was, of course, suspended, and the laws of the United States
could no longer be rightfully enforced there, or be obligatory upon the inhabitants who remained and submitted to
the conquerors. By the surrender the inhabitants passed under a temporary allegiance of the British Government,
and were bound by such laws, and such only, as it chose to recognize and impose. From the nature of the case no
other laws could be obligatory upon them. . . . Castine was therefore, during this period, as far as respected our
revenue laws, to be deemed a foreign port, and goods imported into it by the inhabitants were subjects to such
duties only as the British Government chose to require. Such goods were in no correct sense imported into the
Unites States.' The court then proceeded to say, that the case is the same as if the port of Castine had been foreign
territory, ceded by treaty to the United States, and the goods had been imported there previous to its cession. In
this case they say there would be no pretense to say that American duties could be demanded; and upon principles
of public or municipal law, the cases are not distinguishable. They add at the conclusion of the opinion: 'The
authorities cited at the bar would, if there were any doubt, be decisive of the question. But we think it too clear to
require any aid from authority.' Does this case leave room for a doubt whether a country held as this was in armed
belligerents occupation, is to be governed by him who holds it, and by him alone? Does it not so decide in terms as
plain as can be stated? It is asserted by the Supreme Court of the United States with entire unanimity, the great and
venerated Marshall presiding, and the erudite and accomplished Story delivering the opinion of the court, that such
is the law, and it is so adjudged in this case. Nay, more: it is even adjudged that no other laws could be obligatory;
that such country, so held, is for the purpose of the application of the law off its former government to be deemed
foreign territory, and that goods imported there (and by parity of reasoning other acts done there) are in no
correct sense done within the territory of its former sovereign, the United States."
But it is alleged by the majority that the sovereignty spoken of in the decision of the United States vs. Rice should be
construed to refer to the exercise of sovereignty, and that, if sovereignty itself was meant, the doctrine has become
obsolete after the adoption of the Hague Regulations in 1907. In answer, we may state that sovereignty can have
any important significance only when it may be exercised; and, to our way of thinking, it is immaterial whether the
thing held in abeyance is the sovereignty itself or its exercise, because the point cannot nullify, vary, or otherwise
vitiate the plain meaning of the doctrinal words "the laws of the United States could no longer be rightfully
enforced there, or be obligatory upon the inhabitants who remained and submitted to the conquerors." We cannot
accept the theory of the majority, without in effect violating the rule of international law, hereinabove adverted to,
that the possession by the belligerent occupant of the right to control, maintain or modify the laws that are to
obtain within the occupied area is an exclusive one, and that the territorial sovereign driven therefrom cannot
compete with it on an even plane. Neither may the doctrine in the United States vs. Rice be said to have become
obsolete, without repudiating the actual rule prescribed and followed by the United States, allowing the military
occupant to suspend all laws of a political nature and even require public officials and inhabitants to take an oath
of fidelity (United States Rules of Land Warfare, 1940, article 309). In fact, it is a recognized doctrine of American
Constitutional Law that mere conquest or military occupation of a territory of another State does not operate to
annex such territory to occupying State, but that the inhabitants of the occupied district, no longer receiving the
protection of their native State, for the time being owe no allegiance to it, and, being under the control and
protection of the victorious power, owe to that power fealty and obedience. (Willoughby, The Fundamental
Concepts of Public Law [1931], p.364.)
The majority have resorted to distinctions, more apparent than real, if not immaterial, in trying to argue that the
law of treason was obligatory on the Filipinos during the Japanese occupation. Thus it is insisted that a citizen or
subject owes not a qualified and temporary, but an absolute and permanent allegiance, and that "temporary
allegiance" to the military occupant may be likened to the temporary allegiance which a foreigner owes to the
government or sovereign to the territory wherein he resides in return for the protection he receives therefrom.
The comparison is most unfortunate. Said foreigner is in the territory of a power not hostile to or in actual war
with his own government; he is in the territory of a power which has not suspended, under the rules of
international law, the laws of political nature of his own government; and the protections received by him from
that friendly or neutral power is real, not the kind of protection which the inhabitants of an occupied territory can
expect from a belligerent army. "It is but reasonable that States, when they concede to other States the right to
exercise jurisdiction over such of their own nationals as are within the territorial limits of such other States, should
insist that States should provide system of law and of courts, and in actual practice, so administer them, as to
furnish substantial legal justice to alien residents. This does not mean that a State must or should extend to aliens
within its borders all the civil, or much less, all the political rights or privileges which it grants to its own citizens;
but it does mean that aliens must or should be given adequate opportunity to have such legal rights as are granted
to them by the local law impartially and judicially determined, and, when thus determined, protected."
(Willoughby, The Fundamental Concepts of Public Law [1931], p. 360.)
When it is therefore said that a citizen of a sovereign may be prosecuted for and convicted of treason committed in
a foreign country or, in the language of article 114 of the Revised Penal Code, "elsewhere," a territory other than
one under belligerent occupation must have been contemplated. This would make sense, because treason is a
crime "the direct or indirect purpose of which is the delivery, in whole or in part, of the country to a foreign power,
or to pave the way for the enemy to obtain dominion over the national territory" (Albert, The Revised Penal Code,
citing 3 Groizard, 14); and, very evidently, a territory already under occupation can no longer be "delivered."
The majority likewise argue that the theory of suspended sovereignty or allegiance will enable the military
occupant to legally recruit the inhabitants to fight against their own government, without said inhabitants being
liable for treason. This argument is not correct, because the suspension does not exempt the occupant from
complying with the Hague Regulations (article 52) that allows it to demand all kinds of services provided that they
do not involve the population "in the obligation of taking part military operations against their own country."
Neither does the suspension prevent the inhabitants from assuming a passive attitude, much less from dying and
becoming heroes if compelled by the occupant to fight against their own country. Any imperfection in the present
state of international law should be corrected by such world agency as the United Nations organizations.
It is of common knowledge that even with the alleged cooperation imputed to the collaborators, an alarming
number of Filipinos were killed or otherwise tortured by the ruthless, or we may say savage, Japanese Army.
Which leads to the conclusion that if the Filipinos did not obey the Japanese commands and feign cooperation,
there would not be any Filipino nation that could have been liberated. Assuming that the entire population could
go to and live in the mountains, or otherwise fight as guerrillas after the formal surrender of our and the
American regular fighting forces, they would have faced certain annihilation by the Japanese, considering that
the latter's military strength at the time and the long period during which they were left military unmolested by
America. In this connection, we hate to make reference to the atomic bomb as a possible means of destruction.
If a substantial number of guerrillas were able to survive and ultimately help in the liberation of the Philippines, it
was because the feigned cooperation of their countrymen enabled them to get food and other aid necessary in the
resistance movement. If they were able to survive, it was because they could camouflage themselves in the midst of
the civilian population in cities and towns. It is easy to argue now that the people could have merely followed their
ordinary pursuits of life or otherwise be indifferent to the occupant. The fundamental defect of this line of thought
is that the Japanese assumed to be so stupid and dumb as not to notice any such attitude. During belligerent
occupation, "the outstanding fact to be reckoned with is the sharp opposition between the inhabitants of the
occupied areas and the hostile military force exercising control over them. At heart they remain at war with each
other. Fear for their own safety may not serve to deter the inhabitants from taking advantage of opportunities to
interfere with the safety and success of the occupant, and in so doing they may arouse its passions and cause to
take vengeance in cruel fashion. Again, even when it is untainted by such conduct, the occupant as a means of
attaining ultimate success in its major conflict may, under plea of military necessity, and regardless of conventional
or customary prohibitions, proceed to utilize the inhabitants within its grip as a convenient means of military
achievement." (Hyde, International Law, Vol. III, Second Revised Edition [1945], p. 1912.) It should be stressed that
the Japanese occupation was not a matter of a few months; it extended over a little more than three years. Said
occupation was a fact, in spite of the "presence of guerrilla bands in barrios and mountains, and even in towns of
the Philippines whenever these towns were left by Japanese garrisons or by the detachments of troops sent on
patrol to those places." (Co Kim Cham vs. Valdez Tan Keh and Dizon, 75 Phil., 371, 373.) The law of nations accepts
belligerent occupation as a fact to be reckoned with, regardless of the merits of the occupant's cause. (Hyde,
International Law, Second Revised Edition [1945], Vol. III, p. 1879.)
Those who contend or fear that the doctrine herein adhere to will lead to an over-production of traitors, have a
wrong and low conception of the psychology and patriotism of their countrymen. Patriots are such after their birth
in the first place, and no amount of laws or judicial decisions can make or unmake them. On the other hand, the
Filipinos are not so base as to be insensitive to the thought that the real traitor is cursed everywhere and in all
ages. Our patriots who fought and died during the last war, and the brave guerrillas who have survived, were
undoubtedly motivated by their inborn love of country, and not by such a thing as the treason law. The Filipino
people as a whole, passively opposed the Japanese regime, not out of fear of a treason statute but because they
preferred and will prefer the democratic and civilized way of life and American altruism to Japanese barbaric and
totalitarian designs. Of course, there are those who might at heart have been pro-Japanese; but they met and will
unavoidably meet the necessary consequences. The regular soldiers faced the risks of warfare; the spies and
informers subjected themselves to the perils of military operations, likely received summary liquidation or
punishments from the guerrillas and the parties injured by their acts, and may be prosecuted as war spies by the
military authorities of the returning sovereign; those who committed other common crimes, directly or through
the Japanese army, may be prosecuted under the municipal law, and under this group even the spies and
informers, Makapili or otherwise, are included, for they can be made answerable for any act offensive to person or
property; the buy-and-sell opportunists have the war profits tax to reckon with. We cannot close our eyes to the
conspicuous fact that, in the majority of cases, those responsible for the death of, or injury to, any Filipino or
American at the hands of the Japanese, were prompted more by personal motives than by a desire to levy war
against the United States or to adhere to the occupant. The alleged spies and informers found in the Japanese
occupation the royal road to vengeance against personal or political enemies. The recent amnesty granted to the
guerrillas for acts, otherwise criminal, committed in the furtherance of their resistance movement has in a way
legalized the penal sanctions imposed by them upon the real traitors.
It is only from a realistic, practical and common-sense point of view, and by remembering that the obedience and
cooperation of the Filipinos were effected while the Japanese were in complete control and occupation of the
Philippines, when their mere physical presence implied force and pressure and not after the American forces of
liberation had restored the Philippine Government that we will come to realize that, apart from any rule of
international law, it was necessary to release the Filipinos temporarily from the old political tie in the sense
indicated herein. Otherwise, one is prone to dismiss the reason for such cooperation and obedience. If there were
those who did not in any wise cooperate or obey, they can be counted by the fingers, and let their names adorn the
pages of Philippine history. Essentially, however, everybody who took advantage, to any extent and degree, of the
peace and order prevailing during the occupation, for the safety and survival of himself and his family, gave aid and
comfort to the enemy.
Our great liberator himself, General Douglas MacArthur, had considered the laws of the Philippines ineffective
during the occupation, and restored to their full vigor and force only after the liberation. Thus, in his proclamation
of October 23, 1944, he ordained that "the laws now existing on the statute books of the Commonwealth of the
Philippines . . . are in full force and effect and legally binding upon the people in areas of the Philippines free of
enemy occupation and control," and that "all laws . . . of any other government in the Philippines than that of the
said Commonwealth are null and void and without legal effect in areas of the Philippines free of enemy occupation
and control." Repeating what we have said in Co Kim Cham vs. Valdez Tan Keh and Dizon (75 Phil., 113, 133), "it is to
be presumed that General Douglas MacArthur, who was acting as an agent or a representative of the Government
and the President of the United States, constitutional Commander-in-Chief of the United States Army, did not
intend to act against the principles of the law of nations asserted by the Supreme Court of the United States from
the early period of its existence, applied by the President of the United States, and later embodied in the Hague
Conventions of 1907."
The prohibition in the Hague Conventions (Article 45) against "any pressure on the population to take oath to the
hostile power," was inserted for the moral protection and benefit of the inhabitants, and does not necessarily carry
the implication that the latter continue to be bound to the political laws of the displaced government. The United
States, a signatory to the Hague Conventions, has made the point clear, by admitting that the military occupant can
suspend all the laws of a political nature and even require public officials and the inhabitants to take an oath of
fidelity (United States Rules of Land Warfare, 1940, article 309), and as already stated, it is a doctrine of American
Constitutional Law that the inhabitants, no longer receiving the protection of their native state, for the time being
owe no allegiance to it, and, being under the control and protection of the victorious power, owe to that power
fealty and obedience. Indeed, what is prohibited is the application of force by the occupant, from which it is fair to
deduce that the Conventions do not altogether outlaw voluntary submission by the population. The only strong
reason for this is undoubtedly the desire of the authors of the Conventions to give as much freedom and allowance
to the inhabitants as are necessary for their survival. This is wise and humane, because the people should be in a
better position to know what will save them during the military occupation than any exile government.
"Before he was appointed prosecutor, Justice Jackson made a speech in which he warned against the use of judicial
process for non judicial ends, and attacked cynics who "see no reason why courts, just like other agencies, should
not be policy weapons. If we want to shoot Germans as a matter of policy, let it be done as such, said he, but don't
hide the deed behind a court. If you are determined to execute a man in any case there is no occasion for a trial; the
word yields no respect for courts that are merely organized to convict." Mussoloni may have got his just desserts,
but nobody supposes he got a fair trial. . . . Let us bear that in mind as we go about punishing criminals. There are
enough laws on the books to convict guilty Nazis without risking the prestige of our legal system. It is far, far better
that some guilty men escape than that the idea of law be endangered. In the long run the idea of law is our best
defense against Nazism in all its forms." These passages were taken from the editorial appearing in the Life, May
28, 1945, page 34, and convey ideas worthy of some reflection.
If the Filipinos in fact committed any errors in feigning cooperation and obedience during the Japanese military
occupation, they were at most borrowing the famous and significant words of President Roxas errors of the
mind and not of the heart. We advisedly said "feigning" not as an admission of the fallacy of the theory of
suspended allegiance or sovereignty, but as an affirmation that the Filipinos, contrary to their outward attitude,
had always remained loyal by feeling and conscience to their country.
Assuming that article 114 of the Revised Penal Code was in force during the Japanese military occupation, the
present Republic of the Philippines has no right to prosecute treason committed against the former sovereignty
existing during the Commonwealth Government which was none other than the sovereignty of the United States.
This court has already held that, upon a change of sovereignty, the provisions of the Penal Code having to do with
such subjects as treason, rebellion and sedition are no longer in force (People vs. Perfecto, 43 Phil., 887). It is true
that, as contended by the majority, section 1 of Article II of the Constitution of the Philippines provides that
"sovereignty resides in the people," but this did not make the Commonwealth Government or the Filipino people
sovereign, because said declaration of principle, prior to the independence of the Philippines, was subervient to
and controlled by the Ordinance appended to the Constitution under which, in addition to its many provisions
essentially destructive of the concept of sovereignty, it is expressly made clear that the sovereignty of the United
States over the Philippines had not then been withdrawn. The framers of the Constitution had to make said
declaration of principle because the document was ultimately intended for the independent Philippines. Otherwise,
the Preamble should not have announced that one of the purposes of the Constitution is to secure to the Filipino
people and their posterity the "blessings of independence." No one, we suppose, will dare allege that the
Philippines was an independent country under the Commonwealth Government.
The Commonwealth Government might have been more autonomous than that existing under the Jones Law, but
its non-sovereign status nevertheless remained unaltered; and what was enjoyed was the exercise of sovereignty
over the Philippines continued to be complete.
The exercise of Sovereignty May be Delegated. It has already been seen that the exercise of sovereignty is
conceived of as delegated by a State to the various organs which, collectively, constitute the Government. For
practical political reasons which can be easily appreciated, it is desirable that the public policies of a State should
be formulated and executed by governmental agencies of its own creation and which are not subject to the control
of other States. There is, however, nothing in a nature of sovereignty or of State life which prevents one State from
entrusting the exercise of certain powers to the governmental agencies of another State. Theoretically, indeed, a
sovereign State may go to any extent in the delegation of the exercise of its power to the governmental agencies of
other States, those governmental agencies thus becoming quoad hoc parts of the governmental machinery of the
State whose sovereignty is exercised. At the same time these agencies do not cease to be Instrumentalities for the
expression of the will of the State by which they were originally created.
By this allegation the agent State is authorized to express the will of the delegating State, and the legal hypothesis is
that this State possesses the legal competence again to draw to itself the exercise, through organs of its own
creation, of the powers it has granted. Thus, States may concede to colonies almost complete autonomy of
government and reserve to themselves a right of control of so slight and so negative a character as to make its
exercise a rare and improbable occurence; yet, so long as such right of control is recognized to exist, and the
autonomy of the colonies is conceded to be founded upon a grant and the continuing consent of the mother
countries the sovereignty of those mother countries over them is complete and they are to be considered as
possessing only administrative autonomy and not political independence. Again, as will be more fully discussed in
a later chapter, in the so-called Confederate or Composite State, the cooperating States may yield to the central
Government the exercise of almost all of their powers of Government and yet retain their several sovereignties. Or,
on the other hand, a State may, without parting with its sovereignty of lessening its territorial application, yield to
the governing organs of particular areas such an amplitude of powers as to create of them bodies-politic endowed
with almost all of the characteristics of independent States. In all States, indeed, when of any considerable size,
efficiency of administration demands that certain autonomous powers of local self-government be granted to
particular districts. (Willoughby, The Fundamental Concepts of Public Law [1931], pp. 74, 75.).
The majority have drawn an analogy between the Commonwealth Government and the States of the American
Union which, it is alleged, preserve their own sovereignty although limited by the United States. This is not true for
it has been authoritatively stated that the Constituent States have no sovereignty of their own, that such
autonomous powers as they now possess are had and exercised by the express will or by the constitutional
forbearance of the national sovereignty, and that the sovereignty of the United States and the non-sovereign status
of the individual States is no longer contested.
It is therefore plain that the constituent States have no sovereignty of their own, and that such autonomous powers
as they now possess are had and exercised by the express will or by the constitutional forbearance of the national
sovereignty. The Supreme Court of the United States has held that, even when selecting members for the national
legislature, or electing the President, or ratifying proposed amendments to the federal constitution, the States
act, ad hoc, as agents of the National Government. (Willoughby, the Fundamental Concepts of Public Law [1931],
p.250.)
This is the situation at the present time. The sovereignty of the United States and the non-sovereign status of the
individual States is no longer contested. (Willoughby, The Fundamental Concepts of Public Law [1931], pp. 251,
252.)
Article XVIII of the Constitution provides that "The government established by this Constitution shall be known as
the Commonwealth of the Philippines. Upon the final and complete withdrawal of the sovereignty of the United
States and the proclamation of Philippine independence, the Commonwealth of the Philippines shall thenceforth be
known as the Republic of the Philippines." From this, the deduction is made that the Government under the
Republic of the Philippines and under the Commonwealth is the same. We cannot agree. While the Commonwealth
Government possessed administrative autonomy and exercised the sovereignty delegated by the United States and
did not cease to be an instrumentality of the latter (Willoughby, The Fundamental Concepts of Public Law [1931],
pp. 74, 75), the Republic of the Philippines is an independent State not receiving its power or sovereignty from the
United States. Treason committed against the United States or against its instrumentality, the Commonwealth
Government, which exercised, but did not possess, sovereignty (id., p. 49), is therefore not treason against the
sovereign and independent Republic of the Philippines. Article XVIII was inserted in order, merely, to make the
Constitution applicable to the Republic.
Reliance is also placed on section 2 of the Constitution which provides that all laws of the Philippines Islands shall
remain operative, unless inconsistent therewith, until amended, altered, modified or repealed by the Congress of
the Philippines, and on section 3 which is to the effect that all cases pending in courts shall be heard, tried, and
determined under the laws then in force, thereby insinuating that these constitutional provisions authorize the
Republic of the Philippines to enforce article 114 of the Revised Penal Code. The error is obvious. The latter article
can remain operative under the present regime if it is not inconsistent with the Constitution. The fact remains,
however, that said penal provision is fundamentally incompatible with the Constitution, in that those liable for
treason thereunder should owe allegiance to the United States or the government of the Philippines, the latter
being, as we have already pointed out, a mere instrumentality of the former, whereas under the Constitution of the
present Republic, the citizens of the Philippines do not and are not required to owe allegiance to the United States.
To contend that article 114 must be deemed to have been modified in the sense that allegiance to the United States
is deleted, and, as thus modified, should be applied to prior acts, would be to sanction the enactment and
application of an ex post facto law.
In reply to the contention of the respondent that the Supreme Court of the United States has held in the case of
Bradford vs. Chase National Bank (24 Fed. Supp., 38), that the Philippines had a sovereign status, though with
restrictions, it is sufficient to state that said case must be taken in the light of a subsequent decision of the same
court in Cincinnati Soap Co. vs. United States (301 U.S., 308), rendered in May, 1937, wherein it was affirmed that
the sovereignty of the United States over the Philippines had not been withdrawn, with the result that the earlier
case only be interpreted to refer to the exercise of sovereignty by the Philippines as delegated by the mother
country, the United States.
No conclusiveness may be conceded to the statement of President Roosevelt on August 12, 1943, that "the United
States in practice regards the Philippines as having now the status as a government of other independent nations--
in fact all the attributes of complete and respected nationhood," since said statement was not meant as having
accelerated the date, much less as a formal proclamation of, the Philippine Independence as contemplated in the
Tydings-McDuffie Law, it appearing that (1) no less also than the President of the United States had to issue the
proclamation of July 4, 1946, withdrawing the sovereignty of the United States and recognizing Philippine
Independence; (2) it was General MacArthur, and not President Osmea who was with him, that proclaimed on
October 23, 1944, the restoration of the Commonwealth Government; (3) the Philippines was not given official
participation in the signing of the Japanese surrender; (4) the United States Congress, and not the Commonwealth
Government, extended the tenure of office of the President and Vice-President of the Philippines.
The suggestion that as treason may be committed against the Federal as well as against the State Government, in
the same way treason may have been committed against the sovereignty of the United States as well as against the
sovereignty of the Philippine Commonwealth, is immaterial because, as we have already explained, treason against
either is not and cannot be treason against the new and different sovereignty of the Republic of the Philippines.
Case No. 5

G.R. No. L-46930 June 10, 1988


DALE SANDERS, AND A.S. MOREAU, JR, petitioners, vs. HON. REGINO T. VERIDIANO II, as Presiding Judge,
Branch I, Court of First Instance of Zambales, Olongapo City, ANTHONY M. ROSSI and RALPH L.
WYERS, respondents.

CRUZ, J.:
The basic issue to be resolved in this case is whether or not the petitioners were performing their official duties
when they did the acts for which they have been sued for damages by the private respondents. Once this question
is decided, the other answers will fall into place and this petition need not detain us any longer than it already has.
Petitioner Sanders was, at the time the incident in question occurred, the special services director of the U.S. Naval
Station (NAVSTA) in Olongapo City. 1 Petitioner Moreau was the commanding officer of the Subic Naval Base, which
includes the said station. 2 Private respondent Rossi is an American citizen with permanent residence in the
Philippines,3 as so was private respondent Wyer, who died two years ago. 4 They were both employed as
gameroom attendants in the special services department of the NAVSTA, the former having been hired in 1971 and
the latter in 1969. 5
On October 3, 1975, the private respondents were advised that their employment had been converted from
permanent full-time to permanent part-time, effective October 18, 1975. 6 Their reaction was to protest this
conversion and to institute grievance proceedings conformably to the pertinent rules and regulations of the U.S.
Department of Defense. The result was a recommendation from the hearing officer who conducted the proceedings
for the reinstatement of the private respondents to permanent full-time status plus backwages. The report on the
hearing contained the observation that "Special Services management practices an autocratic form of
supervision." 7
In a letter addressed to petitioner Moreau on May 17, 1976 (Annex "A" of the complaint), Sanders disagreed with
the hearing officer's report and asked for the rejection of the abovestated recommendation. The letter contained
the statements that: a ) "Mr. Rossi tends to alienate most co-workers and supervisors;" b) "Messrs. Rossi and
Wyers have proven, according to their immediate supervisors, to be difficult employees to supervise;" and c) "even
though the grievants were under oath not to discuss the case with anyone, (they) placed the records in public
places where others not involved in the case could hear."
On November 7, 1975, before the start of the grievance hearings, a-letter (Annex "B" of the complaint) purportedly
corning from petitioner Moreau as the commanding general of the U.S. Naval Station in Subic Bay was sent to the
Chief of Naval Personnel explaining the change of the private respondent's employment status and requesting
concurrence therewith. The letter did not carry his signature but was signed by W.B. Moore, Jr. "by direction,"
presumably of Moreau.
On the basis of these antecedent facts, the private respondent filed in the Court of First Instance of Olongapo City a
for damages against the herein petitioners on November 8, 1976.8 The plaintiffs claimed that the letters contained
libelous imputations that had exposed them to ridicule and caused them mental anguish and that the prejudgment
of the grievance proceedings was an invasion of their personal and proprietary rights.
The private respondents made it clear that the petitioners were being sued in their private or personal capacity.
However, in a motion to dismiss filed under a special appearance, the petitioners argued that the acts complained
of were performed by them in the discharge of their official duties and that, consequently, the court had no
jurisdiction over them under the doctrine of state immunity.
After extensive written arguments between the parties, the motion was denied in an order dated March 8,
1977, 9 on the main ground that the petitioners had not presented any evidence that their acts were official in
nature and not personal torts, moreover, the allegation in the complaint was that the defendants had acted
maliciously and in bad faith. The same order issued a writ of preliminary attachment, conditioned upon the filing of
a P10,000.00 bond by the plaintiffs, against the properties of petitioner Moreau, who allegedly was then about to
leave the Philippines. Subsequently, to make matters worse for the defendants, petitioner Moreau was declared in
a default by the trial court in its order dated August 9, 1977. The motion to lift the default order on the ground that
Moreau's failure to appear at the pre-trial conference was the result of some misunderstanding, and the motion for
reconsideration of the denial of the motion to dismiss, which was filed by the petitioner's new lawyers, were
denied by the respondent court on September 7, 1977.
This petition for certiorari, prohibition and preliminary injunction was thereafter filed before this Court, on the
contention that the above-narrated acts of the respondent court are tainted with grave abuse of discretion
amounting to lack of jurisdiction.
We return now to the basic question of whether the petitioners were acting officially or only in their private
capacities when they did the acts for which the private respondents have sued them for damages.
It is stressed at the outset that the mere allegation that a government functionary is being sued in his personal
capacity will not automatically remove him from the protection of the law of public officers and, if appropriate, the
doctrine of state immunity. By the same token, the mere invocation of official character will not suffice to insulate
him from suability and liability for an act imputed to him as a personal tort committed without or in excess of his
authority. These well-settled principles are applicable not only to the officers of the local state but also where the
person sued in its courts pertains to the government of a foreign state, as in the present case.
The respondent judge, apparently finding that the complained acts were prima facie personal and tortious, decided
to proceed to trial to determine inter alia their precise character on the strength of the evidence to be submitted by
the parties. The petitioners have objected, arguing that no such evidence was needed to substantiate their claim of
jurisdictional immunity. Pending resolution of this question, we issued a temporary restraining order on
September 26, 1977, that has since then suspended the proceedings in this case in the court a quo.
In past cases, this Court has held that where the character of the act complained of can be determined from the
pleadings exchanged between the parties before the trial, it is not necessary for the court to require them to
belabor the point at a trial still to be conducted. Such a proceeding would be superfluous, not to say unfair to the
defendant who is subjected to unnecessary and avoidable inconvenience.
Thus, in Baer v. Tizon, 10 we held that a motion to dismiss a complaint against the commanding general of the
Olongapo Naval Base should not have been denied because it had been sufficiently shown that the act for which he
was being sued was done in his official capacity on behalf of the American government. The United States had not
given its consent to be sued. It was the reverse situation in Syquia v. Almeda Lopez," where we sustained the order
of the lower court granting a where we motion to dismiss a complaint against certain officers of the U.S. armed
forces also shown to be acting officially in the name of the American government. The United States had also not
waived its immunity from suit. Only three years ago, in United States of America v. Ruiz, 12 we set aside the denial by
the lower court of a motion to dismiss a complaint for damages filed against the United States and several of its
officials, it appearing that the act complained of was governmental rather than proprietary, and certainly not
personal. In these and several other cases 13 the Court found it redundant to prolong the other case proceedings
after it had become clear that the suit could not prosper because the acts complained of were covered by the
doctrine of state immunity.
It is abundantly clear in the present case that the acts for which the petitioners are being called to account were
performed by them in the discharge of their official duties. Sanders, as director of the special services department
of NAVSTA, undoubtedly had supervision over its personnel, including the private respondents, and had a hand in
their employment, work assignments, discipline, dismissal and other related matters. It is not disputed that the
letter he had written was in fact a reply to a request from his superior, the other petitioner, for more information
regarding the case of the private respondents.14 Moreover, even in the absence of such request, he still was within
his rights in reacting to the hearing officer's criticismin effect a direct attack against him-that Special Services
was practicing "an autocratic form of supervision."
As for Moreau,what he is claimed to have done was write the Chief of Naval Personnel for concurrence with the
conversion of the private respondents' type of employment even before the grievance proceedings had even
commenced. Disregarding for the nonce the question of its timeliness, this act is clearly official in nature,
performed by Moreau as the immediate superior of Sanders and directly answerable to Naval Personnel in matters
involving the special services department of NAVSTA In fact, the letter dealt with the financial and budgetary
problems of the department and contained recommendations for their solution, including the re-designation of the
private respondents. There was nothing personal or private about it.
Given the official character of the above-described letters, we have to conclude that the petitioners were, legally
speaking, being sued as officers of the United States government. As they have acted on behalf of that government,
and within the scope of their authority, it is that government, and not the petitioners personally, that is responsible
for their acts. Assuming that the trial can proceed and it is proved that the claimants have a right to the payment of
damages, such award will have to be satisfied not by the petitioners in their personal capacities but by the United
States government as their principal. This will require that government to perform an affirmative act to satisfy the
judgment, viz, the appropriation of the necessary amount to cover the damages awarded, thus making the action a
suit against that government without its consent.
There should be no question by now that such complaint cannot prosper unless the government sought to be held
ultimately liable has given its consent to' be sued. So we have ruled not only in Baer but in many other decisions
where we upheld the doctrine of state immunity as applicable not only to our own government but also to foreign
states sought to be subjected to the jurisdiction of our courts. 15
The practical justification for the doctrine, as Holmes put it, is that "there can be no legal right against the authority
which makes the law on which the right depends.16 In the case of foreign states, the rule is derived from the
principle of the sovereign equality of states which wisely admonishes that par in parem non habet imperium and
that a contrary attitude would "unduly vex the peace of nations." 17 Our adherence to this precept is formally
expressed in Article II, Section 2, of our Constitution, where we reiterate from our previous charters that the
Philippines "adopts the generally accepted principles of international law as part of the law of the land.
All this is not to say that in no case may a public officer be sued as such without the previous consent of the state.
To be sure, there are a number of well-recognized exceptions. It is clear that a public officer may be sued as such to
compel him to do an act required by law, as where, say, a register of deeds refuses to record a deed of sale; 18 or to
restrain a Cabinet member, for example, from enforcing a law claimed to be unconstitutional; 19 or to compel the
national treasurer to pay damages from an already appropriated assurance fund; 20 or the commissioner of internal
revenue to refund tax over-payments from a fund already available for the purpose; 21 or, in general, to secure a
judgment that the officer impleaded may satisfy by himself without the government itself having to do a positive
act to assist him. We have also held that where the government itself has violated its own laws, the aggrieved party
may directly implead the government even without first filing his claim with the Commission on Audit as normally
required, as the doctrine of state immunity "cannot be used as an instrument for perpetrating an injustice." 22
This case must also be distinguished from such decisions as Festejo v. Fernando, 23 where the Court held that a
bureau director could be sued for damages on a personal tort committed by him when he acted without or in
excess of authority in forcibly taking private property without paying just compensation therefor although he did
convert it into a public irrigation canal. It was not necessary to secure the previous consent of the state, nor could it
be validly impleaded as a party defendant, as it was not responsible for the defendant's unauthorized act.
The case at bar, to repeat, comes under the rule and not under any of the recognized exceptions. The government
of the United States has not given its consent to be sued for the official acts of the petitioners, who cannot satisfy
any judgment that may be rendered against them. As it is the American government itself that will have to perform
the affirmative act of appropriating the amount that may be adjudged for the private respondents, the complaint
must be dismissed for lack of jurisdiction.
The Court finds that, even under the law of public officers, the acts of the petitioners are protected by the
presumption of good faith, which has not been overturned by the private respondents. Even mistakes concededly
committed by such public officers are not actionable as long as it is not shown that they were motivated by malice
or gross negligence amounting to bad faith.24 This, to, is well settled .25 Furthermore, applying now our own penal
laws, the letters come under the concept of privileged communications and are not punishable, 26 let alone the fact
that the resented remarks are not defamatory by our standards. It seems the private respondents have overstated
their case.
A final consideration is that since the questioned acts were done in the Olongapo Naval Base by the petitioners in
the performance of their official duties and the private respondents are themselves American citizens, it would
seem only proper for the courts of this country to refrain from taking cognizance of this matter and to treat it as
coming under the internal administration of the said base.
The petitioners' counsel have submitted a memorandum replete with citations of American cases, as if they were
arguing before a court of the United States. The Court is bemused by such attitude. While these decisions do have
persuasive effect upon us, they can at best be invoked only to support our own jurisprudence, which we have
developed and enriched on the basis of our own persuasions as a people, particularly since we became
independent in 1946.
We appreciate the assistance foreign decisions offer us, and not only from the United States but also from Spain
and other countries from which we have derived some if not most of our own laws. But we should not place undue
and fawning reliance upon them and regard them as indispensable mental crutches without which we cannot come
to our own decisions through the employment of our own endowments We live in a different ambience and must
decide our own problems in the light of our own interests and needs, and of our qualities and even idiosyncrasies
as a people, and always with our own concept of law and justice.
The private respondents must, if they are still sominded, pursue their claim against the petitioners in accordance
with the laws of the United States, of which they are all citizens and under whose jurisdiction the alleged offenses
were committed. Even assuming that our own laws are applicable, the United States government has not decided
to give its consent to be sued in our courts, which therefore has not acquired the competence to act on the said
claim,.
WHEREFORE, the petition is GRANTED. The challenged orders dated March 8,1977, August 9,1977, and September
7, 1977, are SET ASIDE. The respondent court is directed to DISMISS Civil Case No. 2077-O. Our Temporary
restraining order of September 26,1977, is made PERMANENT. No costs.
SO ORDERED.
Case No. 6

G.R. No. 86773 February 14, 1992


SOUTHEAST ASIAN FISHERIES DEVELOPMENT CENTER-AQUACULTURE DEPARTMENT (SEAFDEC-AQD), DR.
FLOR LACANILAO (CHIEF), RUFIL CUEVAS (HEAD, ADMINISTRATIVE DIV.), BEN DELOS REYES (FINANCE
OFFICER), petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION and JUVENAL LAZAGA, respondents.
Ramon Encarnacion for petitioners.
Caesar T. Corpus for private respondent.

NOCON, J.:
This is a petition for certiorari to annul and set aside the July 26, 1988 decision of the National Labor Relations
Commission sustaining the labor arbiter, in holding herein petitioners Southeast Asian Fisheries Development
Center-Aquaculture Department (SEAFDEC-AQD), Dr. Flor Lacanilao, Rufil Cuevas and Ben de los Reyes liable to
pay private respondent Juvenal Lazaga the amount of P126,458.89 plus interest thereon computed from May 16,
1986 until full payment thereof is made, as separation pay and other post-employment benefits, and the resolution
denying the petitioners' motion for reconsideration of said decision dated January 9, 1989.
The antecedent facts of the case are as follows:
SEAFDEC-AQD is a department of an international organization, the Southeast Asian Fisheries Development
Center, organized through an agreement entered into in Bangkok, Thailand on December 28, 1967 by the
governments of Malaysia, Singapore, Thailand, Vietnam, Indonesia and the Philippines with Japan as the
sponsoring country (Article 1, Agreement Establishing the SEAFDEC).
On April 20, 1975, private respondent Juvenal Lazaga was employed as a Research Associate an a probationary
basis by the SEAFDEC-AQD and was appointed Senior External Affairs Officer on January 5, 1983 with a monthly
basic salary of P8,000.00 and a monthly allowance of P4,000.00. Thereafter, he was appointed to the position of
Professional III and designated as Head of External Affairs Office with the same pay and benefits.
On May 8, 1986, petitioner Lacanilao in his capacity as Chief of SEAFDEC-AQD sent a notice of termination to
private respondent informing him that due to the financial constraints being experienced by the department, his
services shall be terminated at the close of office hours on May 15, 1986 and that he is entitled to separation
benefits equivalent to one (1) month of his basic salary for every year of service plus other benefits (Rollo, p. 153).
Upon petitioner SEAFDEC-AQD's failure to pay private respondent his separation pay, the latter filed on March 18,
1987 a complaint against petitioners for non-payment of separation benefits plus moral damages and attorney's
fees with the Arbitration Branch of the NLRC (Annex "C" of Petition for Certiorari).
Petitioners in their answer with counterclaim alleged that the NLRC has no jurisdiction over the case inasmuch as
the SEAFDEC-AQD is an international organization and that private respondent must first secure clearances from
the proper departments for property or money accountability before any claim for separation pay will be paid, and
which clearances had not yet been obtained by the private respondent.
A formal hearing was conducted whereby private respondent alleged that the non-issuance of the clearances by
the petitioners was politically motivated and in bad faith. On the other hand, petitioners alleged that private
respondent has property accountability and an outstanding obligation to SEAFDEC-AQD in the amount of
P27,532.11. Furthermore, private respondent is not entitled to accrued sick leave benefits amounting to
P44,000.00 due to his failure to avail of the same during his employment with the SEAFDEC-AQD (Annex "D", Id.).
On January 12, 1988, the labor arbiter rendered a decision, the dispositive portion of which reads:
WHEREFORE, premises considered, judgment is hereby rendered ordering respondents:
1. To pay complainant P126,458.89, plus legal interest thereon computed from May 16, 1986 until full payment
thereof is made, as separation pay and other post-employment benefits;
2. To pay complainant actual damages in the amount of P50,000, plus 10% attorney's fees.
All other claims are hereby dismissed.
SO ORDERED. (Rollo, p. 51, Annex "E")
On July 26, 1988, said decision was affirmed by the Fifth Division of the NLRC except as to the award of P50,000.00
as actual damages and attorney's fees for being baseless. (Annex "A", p. 28, id.)
On September 3, 1988, petitioners filed a Motion for Reconsideration (Annex "G", id.) which was denied on January
9, 1989. Thereafter, petitioners instituted this petition for certiorari alleging that the NLRC has no jurisdiction to
hear and decide respondent Lazaga's complaint since SEAFDEC-AQD is immune from suit owing to its international
character and the complaint is in effect a suit against the State which cannot be maintained without its consent.
The petition is impressed with merit.
Petitioner Southeast Asian Fisheries Development Center-Aquaculture Department (SEAFDEC-AQD) is an
international agency beyond the jurisdiction of public respondent NLRC.
It was established by the Governments of Burma, Kingdom of Cambodia, Republic of Indonesia, Japan, Kingdom of
Laos, Malaysia. Republic of the Philippines, Republic of Singapore, Kingdom of Thailand and Republic of Vietnam
(Annex "H", Petition).
The Republic of the Philippines became a signatory to the Agreement establishing SEAFDEC on January 16,1968.
Its purpose is as follows:
The purpose of the Center is to contribute to the promotion of the fisheries development in Southeast Asia by
mutual co-operation among the member governments of the Center, hereinafter called the "Members", and
through collaboration with international organizations and governments external to the Center. (Agreement
Establishing the SEAFDEC, Art. 1; Annex "H" Petition) (p.310, Rollo)
SEAFDEC-AQD was organized during the Sixth Council Meeting of SEAFDEC on July 3-7, 1973 in Kuala Lumpur,
Malaysia as one of the principal departments of SEAFDEC (Annex "I", id.) to be established in Iloilo for the
promotion of research in aquaculture. Paragraph 1, Article 6 of the Agreement establishing SEAFDEC mandates:
1. The Council shall be the supreme organ of the Center and all powers of the Center shall be vested in the Council.
Being an intergovernmental organization, SEAFDEC including its Departments (AQD), enjoys functional
independence and freedom from control of the state in whose territory its office is located.
As Senator Jovito R. Salonga and Former Chief Justice Pedro L. Yap stated in their book, Public International Law (p.
83, 1956 ed.):
Permanent international commissions and administrative bodies have been created by the agreement of a
considerable number of States for a variety of international purposes, economic or social and mainly non-political.
Among the notable instances are the International Labor Organization, the International Institute of Agriculture,
the International Danube Commission. In so far as they are autonomous and beyond the control of any one State,
they have a distinct juridical personality independent of the municipal law of the State where they are situated. As
such, according to one leading authority "they must be deemed to possess a species of international personality of
their own." (Salonga and Yap, Public International Law, 83 [1956 ed.])
Pursuant to its being a signatory to the Agreement, the Republic of the Philippines agreed to be represented by one
Director in the governing SEAFDEC Council (Agreement Establishing SEAFDEC, Art. 5, Par. 1, Annex "H", ibid.) and
that its national laws and regulations shall apply only insofar as its contribution to SEAFDEC of "an agreed amount
of money, movable and immovable property and services necessary for the establishment and operation of the
Center" are concerned (Art. 11, ibid.). It expressly waived the application of the Philippine laws on the
disbursement of funds of petitioner SEAFDEC-AQD (Section 2, P.D. No. 292).
The then Minister of Justice likewise opined that Philippine Courts have no jurisdiction over SEAFDEC-AQD in
Opinion No. 139, Series of 1984
4. One of the basic immunities of an international organization is immunity from local jurisdiction, i.e.,that it is
immune from the legal writs and processes issued by the tribunals of the country where it is found. (See Jenks, Id.,
pp. 37-44) The obvious reason for this is that the subjection of such an organization to the authority of the local
courts would afford a convenient medium thru which the host government may interfere in there operations or
even influence or control its policies and decisions of the organization; besides, such subjection to local jurisdiction
would impair the capacity of such body to discharge its responsibilities impartially on behalf of its member-states.
In the case at bar, for instance, the entertainment by the National Labor Relations Commission of Mr. Madamba's
reinstatement cases would amount to interference by the Philippine Government in the management decisions of
the SEARCA governing board; even worse, it could compromise the desired impartiality of the organization since it
will have to suit its actuations to the requirements of Philippine law, which may not necessarily coincide with the
interests of the other member-states. It is precisely to forestall these possibilities that in cases where the extent of
the immunity is specified in the enabling instruments of international organizations, jurisdictional immunity from
the host country is invariably among the first accorded. (SeeJenks, Id.; See also Bowett, The Law of International
Institutions, pp. 284-1285).
Respondent Lazaga's invocation of estoppel with respect to the issue of jurisdiction is unavailing because estoppel
does not apply to confer jurisdiction to a tribunal that has none over a cause of action. Jurisdiction is conferred by
law. Where there is none, no agreement of the parties can provide one. Settled is the rule that the decision of a
tribunal not vested with appropriate jurisdiction is null and void. Thus, in Calimlim vs. Ramirez, this Court held:
A rule, that had been settled by unquestioned acceptance and upheld in decisions so numerous to cite is that the
jurisdiction of a court over the subject matter of the action is a matter of law and may not be conferred by consent
or agreement of the parties. The lack of jurisdiction of a court may be raised at any stage of the proceedings, even
on appeal. This doctrine has been qualified by recent pronouncements which it stemmed principally from the
ruling in the cited case of Sibonghanoy. It is to be regretted, however, that the holding in said case had been applied
to situations which were obviously not contemplated therein. The exceptional circumstances involved
in Sibonghanoy which justified the departure from the accepted concept of non-waivability of objection to
jurisdiction has been ignored and, instead a blanket doctrine had been repeatedly upheld that rendered the
supposed ruling in Sibonghanoy not as the exception, but rather the general rule, virtually overthrowing altogether
the time-honored principle that the issue of jurisdiction is not lost by waiver or by estoppel. (Calimlim vs. Ramirez,
G.R. No. L-34362, 118 SCRA 399; [1982])
Respondent NLRC'S citation of the ruling of this Court in Lacanilao v. De Leon (147 SCRA 286 [1987]) to justify its
assumption of jurisdiction over SEAFDEC is misplaced. On the contrary, the Court in said case explained why it
took cognizance of the case. Said the Court:
We would note, finally, that the present petition relates to a controversy between two claimants to the same
position; this is not a controversy between the SEAFDEC on the one hand, and an officer or employee, or a person
claiming to be an officer or employee, of the SEAFDEC, on the other hand. There is before us no question involving
immunity from the jurisdiction of the Court, there being no plea for such immunity whether by or on behalf of
SEAFDEC, or by an official of SEAFDEC with the consent of SEAFDEC (Id., at 300; emphasis supplied).
WHEREFORE, finding SEAFDEC-AQD to be an international agency beyond the jurisdiction of the courts or local
agency of the Philippine government, the questioned decision and resolution of the NLRC dated July 26, 1988 and
January 9, 1989, respectively, are hereby REVERSED and SET ASIDE for having been rendered without jurisdiction.
No costs.
SO ORDERED.
Case No. 7

[G.R. No. 142396. February 11, 2003]


KHOSROW MINUCHER, petitioner, vs. HON. COURT OF APPEALS and ARTHUR SCALZO, respondents.
DECISION
VITUG, J.:
Sometime in May 1986, an Information for violation of Section 4 of Republic Act No. 6425, otherwise also known as
the Dangerous Drugs Act of 1972, was filed against petitioner Khosrow Minucher and one Abbas Torabian with the
Regional Trial Court, Branch 151, of Pasig City. The criminal charge followed a buy-bust operation conducted by
the Philippine police narcotic agents in the house of Minucher, an Iranian national, where a quantity of heroin, a
prohibited drug, was said to have been seized. The narcotic agents were accompanied by private respondent
Arthur Scalzo who would, in due time, become one of the principal witnesses for the prosecution. On 08 January
1988, Presiding Judge Eutropio Migrino rendered a decision acquitting the two accused.
On 03 August 1988, Minucher filed Civil Case No. 88-45691 before the Regional Trial Court (RTC), Branch 19, of
Manila for damages on account of what he claimed to have been trumped-up charges of drug trafficking made by
Arthur Scalzo. The Manila RTC detailed what it had found to be the facts and circumstances surrounding the case.
"The testimony of the plaintiff disclosed that he is an Iranian national. He came to the Philippines to study in the
University of the Philippines in 1974. In 1976, under the regime of the Shah of Iran, he was appointed Labor Attach
for the Iranian Embassies in Tokyo, Japan and Manila, Philippines. When the Shah of Iran was deposed by Ayatollah
Khomeini, 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.
He came to know the defendant on May 13, 1986, when the latter was brought to his house and introduced to him
by a certain Jose Iigo, an informer of the Intelligence Unit of the military. Jose Iigo, on the other hand, was met by
plaintiff at the office of Atty. Crisanto Saruca, a lawyer for several Iranians whom plaintiff assisted as head of the
anti-Khomeini movement in the Philippines.
During his first meeting with the defendant on May 13, 1986, upon the introduction of Jose Iigo, the defendant
expressed his interest in buying caviar. As a matter of fact, he bought two kilos of caviar from plaintiff and paid
P10,000.00 for it. Selling caviar, aside from that of Persian carpets, pistachio nuts and other Iranian products was
his business after the Khomeini government cut his pension of over $3,000.00 per month. During their
introduction in that meeting, the defendant gave the plaintiff his calling card, which showed that he is working at
the US Embassy in the Philippines, as a special agent of the Drug Enforcement Administration, Department of
Justice, of the United States, and gave his address as US Embassy, Manila. At the back of the card appears a
telephone number in defendants own handwriting, the number of which he can also be contacted.
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. The defendant told him that he [could] help plaintiff for a fee of $2,000.00
per visa. Their conversation, however, was more concentrated on politics, carpets and caviar. Thereafter, the
defendant promised to see plaintiff again.
On May 19, 1986, the defendant called the plaintiff and invited the latter for dinner at Mario's Restaurant at
Makati. He wanted to buy 200 grams of caviar. Plaintiff brought the merchandize but for the reason that the
defendant was not yet there, he requested the restaurant people to x x x place the same in the
refrigerator. Defendant, however, came and plaintiff gave him the caviar for which he was paid. Then their
conversation was again focused on politics and business.
On May 26, 1986, defendant visited plaintiff again at the latter's residence for 18 years at Kapitolyo, Pasig. The
defendant wanted to buy a pair of carpets which plaintiff valued at $27,900.00. After some haggling, they agreed at
$24,000.00. For the reason that defendant did not yet have the money, they agreed that defendant would come
back the next day. The following day, at 1:00 p.m., he came back with his $24,000.00, which he gave to the plaintiff,
and the latter, in turn, gave him the pair of carpets.
At about 3:00 in the afternoon of May 27, 1986, the defendant came back again to plaintiff's house and directly
proceeded to the latter's bedroom, where the latter and his countryman, Abbas Torabian, were playing
chess. Plaintiff opened his safe in the bedroom and obtained $2,000.00 from it, gave it to the defendant for the
latter's fee in obtaining a visa for plaintiff's wife. 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. Without much ado, and without putting on his shirt as he was only in his pajama pants, he
followed the defendant where he saw a parked cab opposite the street. To his complete surprise, an American
jumped out of the cab with a drawn high-powered gun. He was in the company of about 30 to 40 Filipino soldiers
with 6 Americans, all armed. He was handcuffed and after about 20 minutes in the street, he was brought inside the
house by the defendant. He was made to sit down while in handcuffs while the defendant was inside his
bedroom. The defendant came out of the bedroom and out from defendant's attach case, he took something and
placed it on the table in front of the plaintiff.They also took plaintiff's wife who was at that time at the boutique
near his house and likewise arrested Torabian, who was playing chess with him in the bedroom and both were
handcuffed together. Plaintiff was not told why he was being handcuffed and why the privacy of his house,
especially his bedroom was invaded by defendant. He was not allowed to use the telephone. In fact, his telephone
was unplugged.He asked for any warrant, but the defendant told him to `shut up. He was nevertheless told that he
would be able to call for his lawyer who can defend him.
The plaintiff took note of the fact that when the defendant invited him to come out to meet his cousin, his safe was
opened where he kept the $24,000.00 the defendant paid for the carpets and another $8,000.00 which he also
placed in the safe together with a bracelet worth $15,000.00 and a pair of earrings worth $10,000.00. He also
discovered missing upon his release his 8 pieces hand-made Persian carpets, valued at $65,000.00, a painting he
bought for P30,000.00 together with his TV and betamax sets. He claimed that when he was handcuffed, the
defendant took his keys from his wallet. There was, therefore, nothing left in his house.
That his arrest as a heroin trafficker x x x had been well publicized throughout the world, in various newspapers,
particularly in Australia, America, Central Asia and in the Philippines. He was identified in the papers as an
international drug trafficker. x x x
In fact, the arrest of defendant and Torabian was likewise on television, not only in the Philippines, but also in
America and in Germany. His friends in said places informed him that they saw him on TV with said news.
After the arrest made on plaintiff and Torabian, they were brought to Camp Crame handcuffed together, where
they were detained for three days without food and water."[1]
During the trial, the law firm of Luna, 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. The trial court granted the motion. On 27 October 1988, Scalzo
filed another special appearance to quash the summons on the ground that he, not being a resident of the
Philippines and the action being one in personam, was beyond the processes of the court. The motion was denied
by the court, in its order of 13 December 1988, 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. Scalzo filed a motion for reconsideration of the court
order, 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. Scalzo argued that in cases involving
the United States government, as well as its agencies and officials, 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. The court a quo denied the motion for reconsideration in its order of 15 October 1989.
Scalzo filed a petition for review with the Court of Appeals, there docketed CA-G.R. No. 17023, assailing the
denial. In a decision, dated 06 October 1989, the appellate court denied the petition and affirmed the ruling of the
trial court. Scalzo then elevated the incident in a petition for review on certiorari, docketed G.R. No. 91173, to this
Court. The petition, however, was denied for its failure to comply with SC Circular No. 1-88; in any event, the Court
added, Scalzo had failed to show that the appellate court was in error in its questioned judgment.
Meanwhile, at the court a quo, an order, dated 09 February 1990, 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. On 12 March
1990, Scalzo filed a motion to set aside the order of default and to admit his answer to the complaint. Granting the
motion, the trial court set the case for pre-trial. In his answer, Scalzo denied the material allegations of the
complaint and raised the affirmative defenses (a) of Minuchers 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. Scalzo interposed a counterclaim of
P100,000.00 to answer for attorneys' fees and expenses of litigation.
Then, on 14 June 1990, after almost two years since the institution of the civil case, Scalzo filed a motion to dismiss
the complaint on the ground that, being a special agent of the United States Drug Enforcement Administration, he
was entitled to diplomatic immunity. He attached to his motion Diplomatic Note No. 414 of the United States
Embassy, dated 29 May 1990, addressed to the Department of Foreign Affairs of the Philippines and a Certification,
dated 11 June 1990, of Vice Consul Donna Woodward, certifying that the note is a true and faithful copy of its
original. In an order of 25 June 1990, the trial court denied the motion to dismiss.
On 27 July 1990, Scalzo filed a petition for certiorari with injunction with this Court, docketed G.R. No. 94257 and
entitled "Arthur W. Scalzo, Jr., vs. Hon. Wenceslao Polo, et al.," asking that the complaint in Civil Case No. 88-45691
be ordered dismissed. The case was referred to the Court of Appeals, there docketed CA-G.R. SP No. 22505, per this
Courts resolution of 07 August 1990. On 31 October 1990, the Court of Appeals promulgated its decision sustaining
the diplomatic immunity of Scalzo and ordering the dismissal of the complaint against him.Minucher filed a
petition for review with this Court, docketed G.R. No. 97765 and entitled "Khosrow Minucher vs. the Honorable
Court of Appeals, et. al. (cited in 214 SCRA 242), appealing the judgment of the Court of Appeals. In a decision,
dated 24 September 1992, penned by Justice (now Chief Justice) Hilario Davide, Jr., this Court reversed the decision
of the appellate court and remanded the case to the lower court for trial. The remand was ordered on the theses (a)
that the 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. 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, absent any evidence to the contrary, the issue on Scalzos diplomatic
immunity could not be taken up.
The Manila RTC thus continued with its hearings on the case. On 17 November 1995, the trial court reached a
decision; it adjudged:
WHEREFORE, and in view of all the foregoing considerations, judgment is hereby rendered for the plaintiff, who
successfully established his claim by sufficient evidence, against the defendant in the manner following:
"`Adjudging defendant liable to plaintiff in actual and compensatory damages of P520,000.00; moral damages in
the sum of P10 million; exemplary damages in the sum of P100,000.00; attorney's fees in the sum of P200,000.00
plus costs.
`The Clerk of the Regional Trial Court, Manila, 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."[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, it ruled that he, nevertheless, should be held accountable for the
acts complained of committed outside his official duties. On appeal, 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.
Hence, this recourse by Minucher. The instant petition for review raises a two-fold issue: (1) whether or not the
doctrine of conclusiveness of judgment, following the decision rendered by this Court in G.R. No. 97765, should
have precluded the Court of Appeals from resolving the appeal to it in an entirely different manner, and (2)
whether or not Arthur Scalzo is indeed entitled to diplomatic immunity.
The doctrine of conclusiveness of judgment, or its kindred rule of res judicata, would require 1) the finality of the
prior judgment, 2) a valid jurisdiction over the subject matter and the parties on the part of the court that renders
it, 3) a judgment on the merits, and 4) an identity of the parties, subject matter and causes of action. [3] Even while
one of the issues submitted in G.R. No. 97765 - "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" - is also a pivotal question raised in the instant petition, the ruling in G.R. No. 97765,
however, has not resolved that point with finality. Indeed, the Court there has made this observation -
"It may be mentioned in this regard that private respondent himself, in his Pre-trial Brief filed on 13 June 1990,
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. Having thus reserved his
right to present evidence in support of his position, which is the basis for the alleged diplomatic immunity, the
barren self-serving claim in the belated motion to dismiss cannot be relied upon for a reasonable, intelligent and
fair resolution of the issue of diplomatic immunity."[4]
Scalzo contends that the Vienna Convention on Diplomatic Relations, to which the Philippines is a signatory, grants
him absolute immunity from suit, 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.S., (and) having ascertained the target, (he then) would inform
the Philippine narcotic agents (to) make the actual arrest." Scalzo has submitted to the trial court a number of
documents -
1. Exh. '2' - Diplomatic Note No. 414 dated 29 May 1990;
2. Exh. '1' - Certification of Vice Consul Donna K. Woodward dated 11 June 1990;
3. Exh. '5' - Diplomatic Note No. 757 dated 25 October 1991;
4. Exh. '6' - Diplomatic Note No. 791 dated 17 November 1992; and
5. Exh. '7' - Diplomatic Note No. 833 dated 21 October 1988.
6. Exh. '3' - 1st Indorsement of the Hon. Jorge R. Coquia, Legal Adviser, Department of Foreign Affairs, dated 27
June 1990 forwarding Embassy Note No. 414 to the Clerk of Court of RTC Manila, Branch 19 (the trial court);
7. Exh. '4' - Diplomatic Note No. 414, appended to the 1st Indorsement (Exh. '3'); and
8. Exh. '8' - Letter dated 18 November 1992 from the Office of the Protocol, Department of Foreign Affairs, through
Asst. Sec. Emmanuel Fernandez, addressed to the Chief Justice of this Court.[5]
The documents, according to Scalzo, 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; (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 (3) that the United States Embassy repeatedly urged the Department of Foreign Affairs to take
appropriate action to inform the trial court of Scalzos diplomatic immunity. The other documentary exhibits were
presented to indicate that: (1) the Philippine government itself, through its Executive Department, recognizing and
respecting the diplomatic status of Scalzo, formally advised the Judicial Department of his diplomatic status and his
entitlement to all diplomatic privileges and immunities under the Vienna Convention; and (2) the Department of
Foreign Affairs itself authenticated Diplomatic Note No. 414. Scalzo additionally presented Exhibits "9" to "13"
consisting of his reports of investigation on the surveillance and subsequent arrest of Minucher, 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, and the special power of attorney executed by
him in favor of his previous counsel[6] to show (a) that the United States Embassy, affirmed by its Vice Consul,
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, (b) that, on May 1986, with
the cooperation of the Philippine law enforcement officials and in the exercise of his functions as member of the
mission, he investigated Minucher for alleged trafficking in a prohibited drug, 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 Attach of the United States diplomatic mission and
accredited with diplomatic status by the Government of the Philippines. In his Exhibit 12, Scalzo described the
functions of the overseas office of the United States Drugs Enforcement Agency, i.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, 2) to establish and maintain liaison with the host country and counterpart
foreign law enforcement officials, and 3) to conduct complex criminal investigations involving international
criminal conspiracies which affect the interests of the United States.
The Vienna Convention on Diplomatic Relations was a codification of centuries-old customary law and, by the time
of its ratification on 18 April 1961, its rules of law had long become stable. Among the city states of ancient Greece,
among the peoples of the Mediterranean before the establishment of the Roman Empire, and among the states of
India, the person of the herald in time of war and the person of the diplomatic envoy in time of peace were
universally held sacrosanct.[7] By the end of the 16th century, when the earliest treatises on diplomatic law were
published, the inviolability of ambassadors was firmly established as a rule of customary international
law.[8] Traditionally, the exercise of diplomatic intercourse among states was undertaken by the head of state
himself, as being the preeminent embodiment of the state he represented, and the foreign secretary, the official
usually entrusted with the external affairs of the state. Where a state would wish to have a more prominent
diplomatic presence in the receiving state, it would then send to the latter a diplomatic mission. Conformably with
the Vienna Convention, the functions of the diplomatic mission involve, by and large, the representation of the
interests of the sending state and promoting friendly relations with the receiving state.[9]
The Convention lists the classes of heads of diplomatic missions to include (a) ambassadors or nuncios accredited
to the heads of state,[10] (b) envoys,[11] ministers or internuncios accredited to the heads of states; and (c) charges d'
affairs[12] accredited to the ministers of foreign affairs.[13] Comprising the "staff of the (diplomatic) mission" are the
diplomatic staff, the administrative staff and the technical and service staff. Only the heads of missions, as well as
members of the diplomatic staff, excluding the members of the administrative, technical and service staff of the
mission, are accorded diplomatic rank. Even while the Vienna Convention on Diplomatic Relations provides for
immunity to the members of diplomatic missions, it does so, nevertheless, with an understanding that the same be
restrictively applied. Only "diplomatic agents," under the terms of the Convention, are vested with blanket
diplomatic immunity from civil and criminal suits. The Convention defines "diplomatic agents" as the heads of
missions or members of the diplomatic staff, thus impliedly withholding the same privileges from all others. It
might bear stressing that even consuls, who represent their respective states in concerns of commerce and
navigation and perform certain administrative and notarial duties, such as the issuance of passports and visas,
authentication of documents, and administration of oaths, do not ordinarily enjoy the traditional diplomatic
immunities and privileges accorded diplomats, mainly for the reason that they are not charged with the duty of
representing their states in political matters. Indeed, 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.
Scalzo asserted, particularly in his Exhibits 9 to 13, that he was an Assistant Attach of the United States diplomatic
mission and was accredited as such by the Philippine Government. An attach belongs to a category of officers in the
diplomatic establishment who may be in charge of its cultural, press, administrative or financial affairs. There
could also be a class of attaches belonging to certain ministries or departments of the government, other than the
foreign ministry or department, who are detailed by their respective ministries or departments with the embassies
such as the military, naval, air, commercial, agricultural, labor, science, and customs attaches, or the like. Attaches
assist a chief of mission in his duties and are administratively under him, but their main function is to observe,
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.[14] These officials are not generally regarded as
members of the diplomatic mission, nor are they normally designated as having diplomatic rank.
In an attempt to prove his diplomatic status, Scalzo presented Diplomatic Notes Nos. 414, 757 and 791, all
issued post litem motam, respectively, on 29 May 1990, 25 October 1991 and 17 November 1992. The presentation
did nothing much to alleviate the Court's initial reservations in G.R. No. 97765, viz:
"While the trial court denied the motion to dismiss, the public respondent gravely abused its discretion in
dismissing Civil Case No. 88-45691 on the basis of an erroneous assumption that simply because of the diplomatic
note, the private respondent is clothed with diplomatic immunity, thereby divesting the trial court of jurisdiction
over his person.
xxxxxxxxx
And now, to the core issue - the alleged diplomatic immunity of the private respondent. Setting aside for the
moment the issue of authenticity raised by the petitioner and the doubts that surround such claim, in view of the
fact that it took private respondent one (1) year, 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, before he could secure the Diplomatic Note from the US Embassy in Manila,
and even granting for the sake of argument that such note is authentic, the complaint for damages filed by
petitioner cannot be peremptorily dismissed.
xxxxxxxxx
"There is of course the claim of private respondent that the acts imputed to him were done in his official
capacity. Nothing supports this self-serving claim other than the so-called Diplomatic Note. x x x. The public
respondent then should have sustained the trial court's denial of the motion to dismiss. Verily, it should have been
the most proper and appropriate recourse. 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. The undue haste
with which respondent Court yielded to the private respondent's claim is arbitrary."
A significant document would appear to be Exhibit No. 08, dated 08 November 1992, issued by the Office of
Protocol of the Department of Foreign Affairs and signed by Emmanuel C. Fernandez, Assistant Secretary,
certifying that "the records of the Department (would) show that Mr. Arthur W. Scalzo, Jr., during his term of office
in the Philippines (from 14 October 1985 up to 10 August 1988) was listed as an Assistant Attach of the United
States diplomatic mission and was, therefore, accredited diplomatic status by the Government of the
Philippines." No certified true copy of such "records," the supposed bases for the belated issuance, was presented
in evidence.
Concededly, vesting a person with diplomatic immunity is a prerogative of the executive branch of the
government. In World Health Organization vs. Aquino,[15] the Court has recognized that, in such matters, the hands
of the courts are virtually tied. Amidst apprehensions of indiscriminate and incautious grant of immunity, designed
to gain exemption from the jurisdiction of courts, it should behoove the Philippine government, specifically its
Department of Foreign Affairs, to be most circumspect, that should particularly be no less than compelling, in
its post litem motam issuances. 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; it is, rather, an immunity from the exercise of
territorial jurisdiction.[16] The government of the United States itself, which Scalzo claims to be acting for, has
formulated its standards for recognition of a diplomatic agent.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.[17]Supplementary criteria for accreditation are the possession of a valid diplomatic passport or,
from States which do not issue such passports, a diplomatic note formally representing the intention to assign the
person to diplomatic duties, the holding of a non-immigrant visa, being over twenty-one years of age, and
performing diplomatic functions on an essentially full-time basis.[18] Diplomatic missions are requested to provide
the most accurate and descriptive job title to that which currently applies to the duties performed. The Office of the
Protocol would then assign each individual to the appropriate functional category.[19]
But while the diplomatic immunity of Scalzo might thus remain contentious, it was sufficiently established that,
indeed, 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. If it should be ascertained that
Arthur Scalzo was acting well within his assigned functions when he committed the acts alleged in the complaint,
the present controversy could then be resolved under the related doctrine of State Immunity from Suit.
The precept that a State cannot be sued in the courts of a foreign state is a long-standing rule of customary
international law then closely identified with the personal immunity of a foreign sovereign from suit [20] and, with
the emergence of democratic states, made to attach not just to the person of the head of state, or his representative,
but also distinctly to the state itself in its sovereign capacity. [21] If the acts giving rise to a suit are those of a foreign
government done by its foreign agent, although not necessarily a diplomatic personage, but acting in his official
capacity, the complaint could be barred by the immunity of the foreign sovereign from suit without its
consent. Suing a representative of a state is believed to be, in effect, suing the state itself.The proscription is not
accorded for the benefit of an individual but for the State, in whose service he is, under the maxim - par in parem,
non habet imperium - that all states are sovereign equals and cannot assert jurisdiction over one another.[22] The
implication, in broad terms, is that if the judgment against an official would require the state itself to perform an
affirmative act to satisfy the award, such as the appropriation of the amount needed to pay the damages decreed
against him, the suit must be regarded as being against the state itself, although it has not been formally
impleaded.[23]
In United States of America vs. Guinto,[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, possession and use of
prohibited drugs, this Court has ruled -
"While the doctrine (of state immunity) appears to prohibit only suits against the state without its consent, it is
also applicable to complaints filed against officials of the state for acts allegedly performed by them in the
discharge of their duties. x x x. 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. It follows that for
discharging their duties as agents of the United States, they cannot be directly impleaded for acts imputable to
their principal, which has not given its consent to be sued. x x x As they have acted on behalf of the government,
and within the scope of their authority, it is that government, and not the petitioners personally, [who were]
responsible for their acts."[25]
This immunity principle, however, has its limitations. Thus, Shauf vs. 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. As was clearly set forth by Justice Zaldivar in Director of the Bureau of
Telecommunications, et al., vs. Aligaen, et al. (33 SCRA 368): `Inasmuch as the State authorizes only legal acts by its
officers, unauthorized acts of government officials or officers are not acts of 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 State within the rule of immunity of the State from suit. In the same tenor, 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, he violates or invades the personal and property rights of the plaintiff,
under an unconstitutional act or under an assumption of authority which he does not have, is not a suit against the
State within the constitutional provision that the State may not be sued without its consent. The rationale for this
ruling is that the doctrine of state immunity cannot be used as an instrument for perpetrating an injustice.
xxxxxxxxx
(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. The cloak of protection afforded the officers and agents
of the government is removed the moment they are sued in their individual capacity. This situation usually arises
where the public official acts without authority or in excess of the powers vested in him. 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.[27]
A foreign agent, operating within a territory, 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 of the host state is an
indispensable requirement of basic courtesy between the two sovereigns. Guinto and Shauf both involve officers
and personnel of the United States, stationed within Philippine territory, under the RP-US Military Bases
Agreement. 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), the consent or imprimatur of the Philippine government to the activities
of the United States Drug Enforcement Agency, however, can be gleaned from the facts heretofore elsewhere
mentioned. The official exchanges of communication between agencies of the government of the two countries,
certifications from officials of both the Philippine Department of Foreign Affairs and the United States Embassy, 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, may be inadequate to support the "diplomatic status" of the
latter but they give enough indication that the Philippine government has given its imprimatur, if not consent, to
the activities within Philippine territory of agent Scalzo of the United States Drug Enforcement Agency. The job
description of Scalzo has tasked him to conduct surveillance on suspected drug suppliers and, after having
ascertained the target, to inform local law enforcers who would then be expected to make the arrest. In conducting
surveillance activities on Minucher, later acting as the poseur-buyer during the buy-bust operation, and then
becoming a principal witness in the criminal case against Minucher, Scalzo hardly can be said to have acted beyond
the scope of his official function or duties.
All told, this Court is constrained to rule that respondent Arthur Scalzo, 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, is entitled to the defense of state immunity from suit.
WHEREFORE, on the foregoing premises, the petition is DENIED. No costs.
SO ORDERED.
Case No. 8

G.R. No. 106483 May 22, 1995


ERNESTO L. CALLADO, petitioner,
vs.
INTERNATIONAL RICE RESEARCH INSTITUTE, respondent.

ROMERO, J.:
Did the International Rice Research Institute (IRRI) waive its immunity from suit in this dispute which arose from
an employer-employee relationship?
We rule in the negative and vote to dismiss the petition.
Ernesto Callado, petitioner, was employed as a driver at the IRRI from April 11, 1983 to December 14, 1990. On
February 11, 1990, while driving an IRRI vehicle on an official trip to the Ninoy Aquino International Airport and
back to the IRRI, petitioner figured in an accident.
Petitioner was informed of the findings of a preliminary investigation conducted by the IRRI's Human Resource
Development Department Manager in a Memorandum dated March 5, 1990. 1 In view of the aforesaid findings, he
was charged with:
(1) Driving an institute vehicle while on official duty under the influence of liquor;
(2) Serious misconduct consisting of your failure to report to your supervisors the failure of your vehicle to start
because of a problem with the car battery which, you alleged, required you to overstay in Manila for more than six
(6) hours, whereas, had you reported the matter to IRRI, Los Baos by telephone, your problem could have been
solved within one or two hours;
(3) Gross and habitual neglect of your duties. 2
In a Memorandum dated March 9, 1990, petitioner submitted his answer and defenses to the charges against
him. 3After evaluating petitioner's answer, explanations and other evidence, IRRI issued a Notice of Termination to
petitioner on December 7, 1990. 4
Thereafter, petitioner filed a complaint on December 19, 1990 before the Labor Arbiter for illegal dismissal, illegal
suspension and indemnity pay with moral and exemplary damages and attorney's fees.
On January 2, 1991, private respondent IRRI, through counsel, wrote the Labor Arbiter to inform him that the
Institute enjoys immunity from legal process by virtue of Article 3 of Presidential Decree No. 1620, 5 and that it
invokes such diplomatic immunity and privileges as an international organization in the instant case filed by
petitioner, not having waived the same. 6
IRRI likewise wrote in the same tenor to the Regional Director of the Department of Labor and Employment. 7
While admitting IRRI's defense of immunity, the Labor Arbiter, nonetheless, cited an Order issued by the Institute
on August 13, 1991 to the effect that "in all cases of termination, respondent IRRI waives its immunity," 8 and,
accordingly, considered the defense of immunity no longer a legal obstacle in resolving the case. The dispositive
portion of the Labor arbiter's decision dated October 31, 1991, reads:
WHEREFORE, premises considered, judgment is hereby rendered ordering respondent to reinstate complainant to
his former position without loss or (sic) seniority rights and privileges within five (5) days from receipt hereof and
to pay his full backwages from March 7, 1990 to October 31, 1991, in the total amount of P83,048.75 computed on
the basis of his last monthly salary. 9
The NLRC found merit in private respondent' s appeal and, finding that IRRI did not waive its immunity, ordered
the aforesaid decision of the Labor Arbiter set aside and the complaint dismissed. 10
Hence, this petition where it is contended that the immunity of the IRRI as an international organization granted by
Article 3 of Presidential Decree No. 1620 may not be invoked in the case at bench inasmuch as it waived the same
by virtue of its Memorandum on "Guidelines on the handling of dismissed employees in relation to P.D. 1620." 11
It is also petitioner's position that a dismissal of his complaint before the Labor Arbiter leaves him no other remedy
through which he can seek redress. He further states that since the investigation of his case was not referred to the
Council of IRRI Employees and Management (CIEM), he was denied his constitutional right to due process.
We find no merit in petitioner's arguments.
IRRI's immunity from suit is undisputed.
Presidential Decree No. 1620, Article 3 provides:
Art. 3. Immunity from Legal Process. The Institute shall enjoy immunity from any penal, civil and administrative
proceedings, except insofar as that immunity has been expressly waived by the Director-General of the Institute or
his authorized representatives.
In the case of International Catholic Migration Commission v. Hon. Calleja, et al. and Kapisanan ng Manggagawa at
TAC sa IRRI v. Secretary of Labor and Employment and IRRI, 12 the Court upheld the constitutionality of the
aforequoted law. After the Court noted the letter of the Acting Secretary of Foreign Affairs to the Secretary of Labor
dated June 17, 1987, where the immunity of IRRI from the jurisdiction of the Department of Labor and
Employment was sustained, the Court stated that this opinion constituted "a categorical recognition by the
Executive Branch of the Government that . . . IRRI enjoy(s) immunities accorded to international organizations,
which determination has been held to be a political question conclusive upon the Courts in order not to embarass a
political department of Government. 13 We cited the Court's earlier pronouncement in WHO v. Hon. Benjamin
Aquino, et al., 14 to wit:
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, and where the plea of diplomatic immunity is recognized and affirmed by the
executive branch of the government as in the case at bar, 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 . . . or other officer acting
under his direction. Hence, in adherence to the settled principle that courts may not so exercise their jurisdiction . .
. as to embarass the executive arm of the government in conducting foreign relations, it is accepted doctrine that in
such cases the judicial department of (this) government follows the action of the political branch and will not
embarrass the latter by assuming an antagonistic jurisdiction. 15
Further, we held that "(t)he raison d'etre for these immunities is the assurance of unimpeded performance of their
functions by the agencies concerned.
The grant of immunity from local jurisdiction to . . . and IRRI is clearly necessitated by their international character
and respective purposes. The objective is to avoid the danger of partiality and interference by the host country in
their internal workings. The exercise of jurisdiction by the Department of Labor in these instances would defeat
the very purpose of immunity, which is to shield the affairs of international organizations, in accordance with
international practice, from political pressure or control by the host country to the prejudice of member States of
the organization, and to ensure the unhampered the performance of their functions. 16
The grant of immunity to IRRI is clear and unequivocal and an express waiver by its Director-General is the only
way by which it may relinquish or abandon this immunity.
On the matter of waiving its immunity from suit, IRRI had, early on, made its position clear. Through counsel, the
Institute wrote the Labor Arbiter categorically informing him that the Institute will not waive its diplomatic
immunity. In the second place, petitioner's reliance on the Memorandum with "Guidelines in handling cases of
dismissal of employees in relation to P.D. 1620" dated July 26, 1983, is misplaced. The Memorandum reads, in part:
Time and again the Institute has reiterated that it will not use its immunity under P.D. 1620 for the purpose of
terminating the services of any of its employees. Despite continuing efforts on the part of IRRI to live up to this
undertaking, there appears to be apprehension in the minds of some IRRI employees. To help allay these fears the
following guidelines will be followed hereafter by the Personnel/Legal Office while handling cases of dismissed
employees.
xxx xxx xxx
2. Notification/manifestation to MOLE or labor arbiter
If and when a dismissed employee files a complaint against the Institute contesting the legality of dismissal, IRRI's
answer to the complaint will:
1. Indicate in the identification of IRRI that it is an international organization operating under the
laws of the Philippines including P.D. 1620. and
2. Base the defense on the merits and facts of the case as well as the legality of the cause or causes for
termination.
3) Waiving immunity under P.D. 1620
If the plaintiff's attorney or the arbiter, asks if IRRI will waive its immunity we may reply that the Institute will be
happy to do so, as it has in the past in the formal manner required thereby reaffirming our commitment to abide by
the laws of the Philippines and our full faith in the integrity and impartially of the legal system. 17 (Emphasis in this
paragraphs ours)
From the last paragraph of the foregoing quotation, it is clear that in cases involving dismissed employees, the
Institute may waive its immunity, signifying that such waiver is discretionary on its part.
We agree with private respondent IRRI that this memorandum cannot, by any stretch of the imagination, be
considered the express waiver by the Director-General. Respondent Commission has quoted IRRI's reply thus:
The 1983 . . . is an internal memo addressed to Personnel and Legal Office and was issued for its guidance in
handling those cases where IRRI opts to waive its immunity. It is not a declaration of waiver for all cases. This is
apparent from the use of the permissive term "may" rather than the mandatory term "shall" in the last paragraph of
the memo. Certainly the memo cannot be considered as the express waiver by the Director General as
contemplated by P.D. 1620, especially since the memo was issued by a former Director-General. At the very least,
the express declaration of the incumbent Director-general supersedes the 1983 memo and should be accorded
greater respect. It would be equally important to point out that the Personnel and Legal Office has been non-
existent since 1988 as a result of major reorganization of the IRRI. Cases of IRRI before DOLE are handled by an
external Legal Counsel as in this particular
case. 18 (Emphasis supplied)
The memorandum, issued by the former Director-General to a now-defunct division of the IRRI, was meant for
internal circulation and not as a pledge of waiver in all cases arising from dismissal of employees. Moreover, the
IRRI's letter to the Labor Arbiter in the case at bench made in 1991 declaring that it has no intention of waiving its
immunity, at the very least, supplants any pronouncement of alleged waiver issued in previous cases.
Petitioner's allegation that he was denied due process is unfounded and has no basis.
It is not denied that he was informed of the findings and charges resulting from an investigation conducted of his
case in accordance with IRRI policies and procedures. He had a chance to comment thereon in a Memorandum he
submitted to the Manager of the Human Resource and Development Department. Therefore, he was given proper
notice and adequate opportunity to refute the charges and findings, hereby fulfilling the basic requirements of due
process.
Finally, on the issue of referral to the Council of IRRI Employees and Management (CIEM), petitioner similarly fails
to persuade the Court.
The Court, in the Kapisanan ng mga Manggagawa at TAC sa IRRI case, 19 held:
Neither are the employees of IRRI without remedy in case of dispute with management as, in fact, there had been
organized a forum for better management-employee relationship as evidenced by the formation of the Council of
IRRI Employees and Management (CIEM) wherein "both management and employees were and still are
represented for purposes of maintaining mutual and beneficial cooperation between IRRI and its employees." The
existence of this Union factually and tellingly belies the argument that Pres. Decree No. Decree No. 1620, which
grants to IRRI the status, privileges and immunities of an international organization, deprives its employees of the
right to self-organization.
We have earlier concluded that petitioner was not denied due process, and this, notwithstanding the non-referral
to the Council of IRRI Employees and Management. Private respondent correctly pointed out that petitioner,
having opted not to seek the help of the CIEM Grievance Committee, prepared his answer by his own self. 20 He
cannot now fault the Institute for not referring his case to the CIEM.
IN VIEW OF THE FOREGOING, the petition for certiorari is DISMISSED. No costs.
SO ORDERED.
Case No. 9

G.R. No. L-41299 February 21, 1983


SOCIAL SECURITY SYSTEM, petitioner,
vs.
COURT OF APPEALS, DAVID B. CRUZ, SOCORRO CONCIO CRUZ, and LORNA C. CRUZ, respondents.
The Solicitor General for petitioner.
Eribert D. Ignacio for respondents David Cruz, Socorro Concio Cruz and Lorna Cruz.

MELENCIO-HERRERA, J.:
This Petition for Review on certiorari of the Decision of the Court of Appeals 1 stems from the following facts, as
narrated by the Trial Court, adopted by the Court of Appeals, and quoted by both petitioner 2 and private
respondents 3 :
Sometime in March, 1963 the spouses David B. Cruz and Socorro Concio Cruz applied for and were granted a real
estate loan by the SSS with their residential lot located at Lozada Street, Sto. Rosario, Pateros, Rizal covered by
Transfer Certificate of Title No. 2000 of the Register of Deeds of Rizal as collateral. Pursuant to this real estate ban
said spouses executed on March 26, 1963 the corresponding real estate mortgage originally in the amount of
P39,500.00 which was later increased to P48,000.00 covering the aforementioned property as shown in their
mortgage contract, Exhibit A and 1. From the proceeds of the real estate loan the mortgagors constructed their
residential house on the mortgaged property and were furnished by the SSS with a passbook to record the monthly
payments of their amortizations (Exhibits B and B-1). The mortgagors, plaintiffs herein, complied with their
monthly payments although there were times when delays were incurred in their monthly payments which were
due every first five (5) days of the month (Exhibits 3-A to 3-N). On July 9, 1968, defendant SSS filed an application
with the Provincial Sheriff of Rizal for the foreclosure of the real estate mortgage executed by the plaintiffs on the
ground, among others:
That the conditions of the mortgage have been broken since October, 1967 with the default on the part of the
mortgagor to pay in full the installments then due and payable on the principal debt and the interest thereon, and,
all of the monthly installments due and payable thereafter up to the present date; ...
That by the terms of the contract herein above referred to, the indebtedness to the mortgagee as of June, 1968
amounts to Ten Thousand Seven Hundred Two Pesos & 58/100 (P10,702.58), Philippine Currency, excluding
interests thereon, plus 20% of the total amount of the indebtedness as attorney's fees, also secured by the said
mortgage. (Exhibit "C ")
Pursuant to this application for foreclosure, the notice of the Sheriff's Sale of the mortgaged property was initially
published in the Sunday Chronicle in its issue of July 14, 1968 announcing the sale at public auction of the said
mortgaged property. After this first publication of the notice, and before the second publication of the notice,
plaintiff herein thru counsel formally wrote defendant SSS, a letter dated July 19, 1968 and received on the same
date by said entity demanding, among others, for said defendant SSS to withdraw the foreclosure and discontinue
the publication of the notice of sale of their property claiming that plaintiffs were up-to-date in the payment of
their monthly amortizations (Exhibits "E" and "E-1"). In answer to this letter defendant SSS sent a telegram to Atty.
Eriberto Ignacio requesting him to come to their office for a conference. This telegram was received by said counsel
on July 23, 1968 (Exhibit "G " and "G-1 "). To this telegraphic answer, Atty. Ignacio sent a telegraphic reply
suggesting instead that a representative of the SSS be sent to him because his clients were the aggrieved parties
(Exhibit-. "G-2"). Nothing came out of the telegraphic communications between the parties and the second and
third publications of the notice of foreclosure were published successively in the Sunday Chronicle in its issues of
July 21 and 28, 1968 (Exhibits "N-1 " and "O-1"). 4
On July 24, 1968, the Cruz spouses, together with their daughter Lorna C. Cruz, instituted before the Court of First
Instance of Rizal an action for damages and attorney's fees against the Social Security System (SSS) and the
Provincial Sheriff of Rizal alleging, among other things, that they had fully and religiously paid their monthly
amortizations and had not defaulted in any payment.
In its Answer, with counterclaim, the SSS stressed its right to foreclose the mortgage executed in its favor by
private respondents by virtue of the automatic acceleration clause provided in the mortgage contract, even after
private respondents had paid their amortization installments. In its counterclaim, the SSS prayed for actual and
other damages, as well as attorney's fees, for malicious and baseless statements made by private respondents and
published in the Manila Chronicle.
On September 23, 1968, the Trial Court enjoined the SSS from holding the sale at public auction of private
respondent's property upon their posting of a P2,000.00 bond executed in favor of the SSS.
The Trial Court rendered judgment on March 5, 1971, the dispositive portion of which reads:
WHEREFORE, judgment is rendered against defendant SSS, directing it to pay plaintiffs the following amounts:
(a) P2,500.00 as actual damage;
(b) P35,000.00 as moral damage;
(c) P10,000.00 as exemplary or corrective damages; and
(d) P5,000.00 as attorney's fees.
Defendant SSS shall further pay the costs. 5
In respect of the moral and temperate damages awarded, the Trial Court stated:
With respect to moral and temperate damages, the Court holds that the first publication of the notice was made in
good faith but committed by defendant SSS in gross negligence considering the personnel at its command and the
ease with which verifications of the actual defaulting mortgagors may be made. On this initial publication of the
notice of foreclosure (Exhibits "M" and "M-1"), the Court believes plaintiffs are entitled to the amount of P5,000.00.
The second publication of the notice of foreclosure is another matter. There was already notice by plaintiffs to
defendant SSS that there was no reason for the foreclosure of their mortgaged property as they were never in
default. Instead of taking any corrective measure to rectify its error, defendant SSS adopted a position of
righteousness and followed the same course of action contending that no error has open committed. This act of
defendant indeed was deliberate, calculated to cow plaintiffs into submission, and made obviously with malice. On
this score, the Court believes defendant SSS should pay and indemnify plaintiffs jointly in the sum of P10,000.00.
Lastly, on the third publication of the notice of foreclosure, the Court finds this continued publication an outright
disregard for the reputation and standing of plaintiffs. The publication having reached a bigger segment of society
and also done with malice and callous disregard for the rights of its clients, defendant SSS should compensate
plaintiffs jointly in the sum of P20,000.00. All in all, plaintiffs are entitled to P35,000.00 by way of moral damages. 6
On appeal, the Court of Appeals affirmed the lower Court judgment in a Decision promulgated on March 14, 1975,
but upon SSS's Motion for Reconsideration, modified the judgment by the elimination of the P5,000.00 moral
damages awarded on account of the initial publication of the foreclosure notice. To quote:
xxx xxx xxx
After a re-examination of the evidence, we find that the negligence of the appellant is not so gross as to warrant
moral and temperate damages. The amount of P5,000.00 should be deducted from the total damages awarded to
the plaintiffs.
WHEREFORE, the decision promulgated on March 14, 1975 is hereby maintained with the sole modification that
the amount of P5,000.00 awarded on account of the initial publication is eliminated so that the said amount should
be deducted from the total damages awarded to the plaintiffs.
SO ORDERED. 7
In so far as exemplary and corrective damages are concerned, the Court of Appeals had this to say.
The Court finds no extenuating circumstances to mitigate the irresponsible action of defendant SSS and for this
reason, said defendant should pay exemplary and corrective damages in the sum of P10,000.00 ...
Upon denial of its Motion for Reconsideration by respondent Court, the SSS filed this Petition alleging .
I. Respondent Court of Appeals erred in not finding that under Condition No. 10 of the Mortgage contract, which is
a self-executing, automatic acceleration clause, all amortizations and obligations of the mortgagors become ipso
jure due and demandable if they at any time fail to pay any of the amortizations or interest when due;
II. Respondent Court of Appeals erred in holding that a previous notice to the mortgagor was necessary before the
mortgage could be foreclosed;
III. Respondent Court of Appeals erred in not holding that, assuming that there was negligence committed by
subordinate employees of the SSS in staking 'Socorro C. Cruz' for 'Socorro J. Cruz' as the defaulting borrower, the
fault cannot be attributed to the SSS, much less should the SSS be made liable for their acts done without its
knowledge and authority;
IV. Respondent Court of Appeals erred in holding that there is no extenuating circumstance to mitigate the liability
of petitioner;
V. Respondent Court of Appeals erred in not holding that petitioner is not liable for damages not being a profit-
oriented governmental institution but one performing governmental functions petitions. 8
For failure of the First Division to obtain concurrence of the five remaining members (Justices Plana and Gutierrez,
Jr. could take no part), the case was referred to the Court en banc.
The pivotal issues raised are: (1) whether the Cruz spouses had, in fact, violated their real estate mortgage contract
with the SSS as would have warranted the publications of the notices of foreclosure; and (2) whether or not the SSS
can be held liable for damages.
The first issue revolves around the question of appreciation of the evidence by the lower Court as concurred in by
the Court of Appeals. The appraisal should be left undisturbed following the general rule that factual findings of the
Court of Appeals are not subject to review by this Court, the present case not being one of the recognized
exceptions to that rule. 9 Accordingly, we are upholding the finding of the Court of Appeals that the SSS application
for foreclosure was not justified, particularly considering that the real estate loan of P48,000.00 obtained by the
Cruzes in March, 1963, was payable in 15 years with a monthly amortization of P425.18, and that as of July 14,
1968, the date of the first notice of foreclosure and sale, the outstanding obligation was still P38,875.06 and not
P10,701.58, as published.
The appellant was not justified in applying for the extrajudicial foreclosure of the mortgage contract executed in its
favor by the spouses, David B. Cruz and Socorro Concio-Cruz, Exh. 'A'. While it is true that the payments of the
monthly installments were previously not regular, it is a fact that as of June 30, 1968 the appellee, David B. Cruz
and Socorro Concio-Cruz were up-to-date and current in the payment of their monthly installments. Having
accepted the prior late payments of the monthly installments, the appellant could no longer suddenly and without
prior notice to the mortgagors apply for the extra-judicial foreclosure of the mortgage in July 1968. 10
A similar conclusion was reached by the trial Court.
Defendant's contention that there was clerical error in the amount of the mortgage loan due as of June, 1968 as per
their application for foreclosure of real estate mortgage is a naive attempt to justify an untenable position. As a
matter of fact plaintiffs were able to establish that the mortgagor who actually committed the violation of her
mortgage loan was a certain 'Socorro J. Cruz' who was in arrears in the amount of P10,702.58 at the time the
application for foreclosure of real estate mortgage was filed Exhibits "BB" and "EE"). Defendant mortgagee must
have committed an error in picking the record of plaintiff 'Socorro C. Cruz' instead of the record of 'Socorro J. Cruz'.
Defendant SSS, however, denied having committed any error and insists that their motion for foreclosure covers
the real estate mortgage of spouses David E. Cruz and Socorro C. Cruz. This Court is nonetheless convinced that the
foreclosure proceedings should have been on the real estate mortgage of 'Socorro J. Cruz' who was in arrears as of
June, 1968 in the amount of P10,701.58, the exact amount mentioned in the application for foreclosure of real
estate mortgage by defendant SSS. 11
We come now to the amendability of the SSS to judicial action and legal responsibility for its acts. To our minds,
there should be no question on this score considering that the SSS is a juridical entity with a personality of its
own. 12 It has corporate powers separate and distinct from the Government. 13 SSS' own organic act specifically
provides that it can sue and be sued in Court. 14 These words "sue and be sued" embrace all civil process incident to
a legal action. 15 So that, even assuming that the SSS, as it claims, enjoys immunity from suit as an entity performing
governmental functions, by virtue of the explicit provision of the aforecited enabling law, the Government must be
deemed to have waived immunity in respect of the SSS, although it does not thereby concede its liability. That
statutoy law has given to the private-citizen a remedy for the enforcement and protection of his rights. The SSS
thereby has been required to submit to the jurisdiction of the Courts, subject to its right to interpose any lawful
defense. Whether the SSS performs governmental or proprietary functions thus becomes unnecessary to belabor.
For by that waiver, a private citizen may bring a suit against it for varied objectives, such as, in this case, to obtain
compensation in damages arising from contract 16 and even for tort.
A recent case squarely in point anent the principle, involving the National Power Corporation, is that of Rayo vs.
Court of First Instance of Bulacan, 110 SCRA 457 (1981), wherein this Court, speaking through Mr. Justice Vicente
Abad Santos, ruled:
It is not necessary to write an extended dissertation on whether or not the NPC performs a governmental function
with respect to the management and operation of the Angat Dam. It is sufficient to say that the government has
organized a private corporation, put money in it and has snowed it to sue and be sued in any court under its
charter. (R.A. No. 6395, Sec. 3[d]). As a government owned and controlled corporation, it has a personality of its
own, distinct and separate from that of the Government. (See National Shipyards and Steel Corp. vs. CIR, et al., L-
17874, August 31, 1963, 8 SCRA 78 1). Moreover, the charter provision that the NPC can 'sue and be sued in any
court' is without qualification on the cause of action and accordingly it can include a tort claim such as the one
instituted by the petitioners.
The proposition that the SSS is not profit-oriented was rejected in the case of SSS Employees' Association vs. Hon.
Soriano. 17 But even conceding that the SSS is not, in the main, operated for profit, it cannot be denied that, in so far
as contractual loan agreements with private parties are concerned, the SSS enters into them for profit considering
that the borrowers pay interest, which is money paid for the use of money, plus other charges.
In so far as it is argued that to hold the SSS liable for damages would be to deplete the benefit funds available for its
covered members, suffice it to say, that expenditures of the System are not confined to the payment of social
security benefits. For example, the System also has to pay the salaries of its personnel. Moreover, drawing a
parallel with the NASSCO and the Virginia Tobacco Administration, whose funds are in the nature of public funds, it
has been held that those funds may even be made the object of a notice of garnishment. 18
What is of paramount importance in this controversy is that an injustice is not perpetrated and that when damage
is caused a citizen, the latter should have a right of redress particularly when it arises from a purely private and
contractual relationship between said individual and the System.
We find, however, that under the circumstances of the case, the SSS cannot be held liable for the damages as
awarded by the Trial Court and the Appellate Tribunal.
As basis for the award of actual damages, the Trial Court relied on the alleged expenses incurred by private
respondents for the wardrobe they were supposed to use during their trip abroad, which was allegedly aborted
because of the filing of the foreclosure application by the SSS. We find the foregoing too speculative. There could
have been other reasons why the trip did not materialize. Moreover, it appears that private respondents' passports
had already expired but that they made no effort to secure new passports. 19 Nor did they secure the necessary
visas from the local consulates of foreign countries they intended to visit for their trip abroad. 20
Nor can the SSS be held liable for moral and temperate damages. As concluded by the Court of Appeals "the
negligence of the appellant is not so gross as to warrant moral and temperate damages", 21 except that, said Court
reduced those damages by only P5,000.00 instead of eliminating them. Neither can we agree with the findings of
both the Trial Court and respondent Court that the SSS had acted maliciously or in bad faith. The SSS was of the
belief that it was acting in the legitimate exercise of its right under the mortgage contract in the face of irregular
payments made by private respondents, and placed reliance on the automatic acceleration clause in the contract.
The filing alone of the foreclosure application should not be a ground for an award of moral damages in the same
way that a clearly unfounded civil action is not among the grounds for moral damages. 22
With the ruling out of compensatory, moral and temperate damages, the grant of exemplary or corrective damages
should also be set aside. 23 Moreover, no proof has been submitted that the SSS had acted in a wanton, reckless and
oppressive manner. 24
However, as found by both the Trial and Appellate Courts, there was clear negligence on the part of SSS when they
mistook the loan account of Socorro J. Cruz for that of private respondent Socorro C. Cruz. Its attention was called
to the error, but it adamantly refused to acknowledge its mistake. The SSS can be held liable for nominal damages.
This type of damages is not for the purpose of indemnifying private respondents for any loss suffered by them but
to vindicate or recognize their rights which have been violated or invaded by petitioner SSS. 25
The circumstances of the case also justify the award of attorney's fees, as granted by the Trial and Appellate Courts,
particularly considering that private respondents were compelled to litigate for the prosecution of their
interests. 26
WHEREFORE, the judgment sought to be reviewed is hereby modified in that petitioner SSS shall pay private
respondents: P3,000.00 as nominal damages; and P5,000.00 as attorney's fees.
Costs against petitioner Social Security System.
SO ORDERED.
Teehankee, Concepcion, Jr., Guerrero, Abad Santos, De Castro, Vasquez and Relova, JJ., concur.
Fernando, C.J., concurs in the result.
Plana, Escolin ** and Gutierrez, Jr., *** JJ., took no part.

Separate Opinions

AQUINO, J., concurring:


I concur. The award of moral damages is not justified under arts. 2219 and 2220 of the Civil Code. I vote to award
the private respondents the additional sum of P2,000 as litigation expenses.
MAKASIAR, J., dissenting:
I dissent.
I
To begin with, the negligent acts committed by the officers and employees of the petitioner, Social Security System,
amounted to not simply a contractual breach but tort. For the record is clear that petitioner's officers and
employees were grossly negligent bordering on malice or bad faith in applying for the extrajudicial foreclosure of
the mortgage contract executed in its favor by the spouses David B. Cruz and Socorro Concio-Cruz, and that even
after private respondents had brought to the attention of the petitioner's officers and employees their mistake,
they insisted on their course of action, instead of making the necessary rectifications, which grossly negligent and
oppressive acts caused damage to private respondents. As found by the Court of Appeals:
The appellant was not justified in applying for the extrajudicial foreclosure of the mortgage contract executed in its
favor by the spouses David B. Cruz and Socorro Concio-Cruz, Exh. 'A'. While it is true that the payments of the
monthly installments were previously not regular, it is a fact that as of June 30, 1968 the appellees, David B. Cruz
and Socorro Concio-Cruz were up-to-date and current in the payment of their monthly installments. Having
accepted the prior late payments of the monthly installments, the appellant could no longer suddenly and without
prior notice to the mortgagors apply for the extra-judicial foreclosure of the mortgage in July, 1968.
It is obvious that the appellant applied for the extra-judicial foreclosure of the mortgage in question because of
the gross negligence of its employees. This negligence was aggravated when the appellant, after being informed of the
error, insisted on proceeding with the extra-judicial foreclosure by invoking alleged violations of the mortgage
contract. But these violations are either too minor to warrant the drastic step of foreclosure or were deemed
condoned when the appellant accepted late payments prior to June 30, 1968. Hence the trial court did not err in
concluding that 'the act of defendant indeed was deliberate, calculated to cow plaintiffs into submission and made
obviously with malice (p. 54, rec.; emphasis supplied).
The circumstance that there was a pre-existing contractual relationship between the herein contending parties,
does not bar the tort liability of the officers and employees of petitioner; because tort liability may still exist
despite presence of contractual relations as the act that breaks the contract may also be a tort, as in this case (Air
France vs. Carrascoso, L-21438, Sept. 28, 1966, 18 SCRA 155, 168-169; Singson & Castillo vs. Bank of the Philippine
Islands, L-24837, June 27, 1968, 23 SCRA 1117, 1119-20).
Consequently, a tortious act being involved, the applicable provision of law is Article 2180 in relation to Article
2176 of the New Civil Code. Under Article 2180, ... The State is responsible in like manner when it acts through a
special agent; but not when the damage has been caused by the official to whom the task done properly pertains, in
which case what is provided in Article 2176 shall be applicable.
In the case at bar, the petitioner Social Security System as the instrumentality of the State to implement the social
justice guarantee enunciated in the Constitution, did not act through a special agent. Hence, the Social Security
System cannot be liable for the damages caused by the tortious acts of its officers and employees while in the
performance of their regular functions. The remedy therefore of private respondents is to proceed against the
guilty officers and employees of petitioner Social Security System as mandated by Article 2176 of the New Civil
Code.
For as held in the leading case of Merritt vs. Government of the Philippine Islands (34 Phil. 311).
The responsibility of the State is limited by Article 1903 to the case wherein it acts through a special agent, ... so
that in representation of the state and being bound to act as an agent thereof, he executes the trust confided to him.
This concept does not apply to any executive agent who is an employee of the active 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.
While Article 2180 of the New Civil Code was not invoked by the petitioner as a defense, this does not prevent this
Tribunal from taking cognizance of the same. For as stressed in Ortigas, Jr. vs. Lufthansa German Airlines (June 30,
1975, 64 SCRA 610, 633), failure to assign a defense as an error on appeal is a pure technicality that should not
prevail over the substantial issues in a controversy as the same would not serve the interest of justice, and "this
Court is clothed with ample authority to review matters even if they are not assigned as errors in the appeal, if it
finds that our consideration is necessary in arriving at a just decision of the case" (citing Saura & Export Co., Inc.,
May 31, 1963, 8 SCRA 143). Further, We have, time and again, re-stated the rule that the Supreme Court can
suspend its own rules to serve the ends of justice (Jose vs. C.A., et al., L-38581, March 31, 1976; Phil. Blooming Mills
Employees Organization, et al. vs. PBM Co., et al., L-31195, 51 SCRA 189, 215; Ronquillo vs. Marasigan, May 31,
1962, 5 SCRA 304, 312-313; Ordoveza vs. Raymundo, 63 Phil. 275).
The principle that a defense not expressly pleaded is deemed waived unless such failure is satisfactorily explained,
is merely a general rule which is subject to exceptions, among which is when the Court can take judicial notice of
such defense. In this case, We can take judicial notice of the law, like Article 2180 of the New Civil Code. It must be
emphasized that the courts have as much duty as the Commission on August to protect the public treasury from
being mulcted or raided illegally. And this becomes more imperative considering that a substantial portion of the
funds of the petitioner comes from the contributions of- employees and workers in private firms and is therefore in
the nature of a trust fund to be expended only for their welfare and benefit, with the government merely giving
some subsidy. Any amount of damages illegally assessed against the Social Security System will deplete the benefit
funds available to its covered members for the contingencies of sickness, disability, retirement or death.
It cannot likewise be seriously questioned that the Social Security System is comprehended in the definition in
Section 2 of the Revised Administrative Code of the term "Government of the Republic of the Philippines ... which
refers to the corporate governmental entity through which the functions of government are exercised throughout
the Philippine Islands, including, save as the contrary appears from the context, the various arms through which
political authority is made effective in the Philippines, whether pertaining to the central Government or to the
provincial or municipal branches or other forms of local government." And the second paragraph of said Section 2
provides that the term "national government" refers to the central government as distinguished from the different
forms of local government. There is nothing therein nor in the Social Security Act, as amended, intimating that the
national government does not include the Social Security System.
It is true that the Social Security System has a corporate or juridical personality of its own. But this does not
remove it as an integral part of the national or central government. For such corporate or juridical personality
invested in it is more for facility and convenience in the attainment of the objectives for which it was created by the
legislative. Such vesting of corporate or juridical personality in the Social Security System was never intended to
destroy the shield from liability afforded it as an integral part of the State or Government by Article 2180 of the
New Civil Code. Relatedly, such corporate or juridical personality of the Social Security System and the express
provision of the law creating the same that it can sue and be sued, have the effect of merely waiving its immunity
from suit as an entity performing governmental functions. Such waiver of its immunity from suit is not an
admission of its liability. Such waiver merely allows a private citizen a remedy for the enforcement and protection
of his rights, but always subject to the lawful defenses of the Social Security System one of which is Article 2180 of
the New Civil Code as aforestated. In other words, such waiver of immunity from suit is not equivalent to instant
liability. The Social Security System can only be held liable for damages arising from the tortious acts of its officers
and employees only if it acts through a special agent, which is not true in the case at bar.
II
It must be finally stressed that the Social Security System cannot be liable for damages because it is an entity of
government performing governmental functions; hence, not profit-oriented. The 1963 doctrine in SSSEA vs.
Soriano(7 SCRA 1016 [1963]) that the system is exercising proprietary functions, is no longer controlling.
For in 1969, the distinction between constituent and ministrant functions of the Government as laid down in the
case of Bacani vs. Nacoco (100 Phil. 468 [1956]) has been obliterated. In the case of Agricultural Credit and
Cooperative Financing Administration (ACCFA) vs. Confederation of Unions in Government Corporations and
Offices (CUGCO) [30 SCRA 649 (1969)], this Court in re-examining the aforesaid Bacani ruling observed that the
trend has been to abandon and reject the traditional "Constituent- Ministrant" criterion in governmental functions
in favor of the more responsive postulate that the growing complexities of modern society have rendered the
traditional classification of government functions unrealistic and obsolete.
WE held in the ACCFA case, thus:
The growing complexities of modern society, however, have rendered this traditional classification of the functions
of government quite unrealistic, not to say obsolete. The areas which used to be left to private enterprise and
initiative and which the government was called upon to enter optionally, and only 'because it was better equipped
to administer for the public welfare than is any private individual or groups of individuals,' continue to lose their
well-defined boundaries and to be absorbed within activities that the government must have undertaken in its
sovereign capacity if it is to meet the increasing social challenges of the times. Here as almost everywhere, else, the
tendency is undoubtedly towards a greater socialization of economic forces. Here of course, this development was
envisioned indeed adopted as a national policy, by the Constitution itself in its declaration of principle concerning
the promotion of social justice.
Chief Justice Fernando, then Associate Justice, in his concurring opinion stressed that:
The decision reached by this Court so ably given expression in the opinion of Justice Makalintal, characterized with
vigor, clarity and precision, represents what for me is a clear tendency not to be necessarily bound by our previous
pronouncements on what activities partake of a nature that is governmental. Of even greater significance, there is a
definite rejection of the 'constituent-ministrant' criterion of governmental functions, followed in Bacani vs.
National Coconut Corporation. That indeed is cause for gratification. For me at least, there is again full adherence to
the basic philosophy of the Constitution as to the extensive and vast power lodged in our government to cope with
the social and economic problems that even now sorely beset us. There is therefore full concurrence on my part to
the opinion of the court, distinguished by its high quality of juristic craftsmanship (pp. 666-667).
xxx xxx xxx
4. With the decision reached by us today, the government is freed from the compulsion exerted by the Bacani
doctrine of the 'constituent-ministrant' test as a criterion for the type of activity in which it may engage. It
constricting effect is consigned to oblivion. No doubts or misgivings need assail us that government efforts to
promote the public wealth whether through regulatory legislation of vast scope and emplitude or through the
undertaking of business activities, would have to face a searching and rigorous scrutiny. It is clear that their
legitimacy cannot be challenged on the ground alone of their being offensive to the implications of the laissez- faire
concept. Unless there be a repugnancy then to the limitations expressly set forth in the Constitution to protect
individual rights, the government enjoys a much wider latitude of action as to the means it chooses to cope with
grave social and economic problems that urgently press for solution. For me, at least, that is to manifest deference
to the philosophy of our fundamental law. Hence my full concurrence, as announced at the outset. (pp- 682-683,
emphasis supplied).
The 1935 Constitution declared:
Sec. 5. The promotion of social justice to insure the well being and economic security of all the people should be the
concern of the State. (Art. II, Declaration of Principles).
The present 1973 Constitution provides under its Declaration of Principles and State Policies (Article 11), that
The State shall promote social justice to ensure the dignity, welfare, and security of all the people. Towards this
end, the State shall regulate the acquisition, ownership, use, enjoyment, and disposition of private property, and
equitably diffuse property ownership and profits. (Section 6);
and
The State shall establish, maintain, and ensure adequate social services in the field of education, health, housing,
employment, welfare, and social security to guarantee the enjoyment by the people of a decent standard of living.
(Section 7).
The strictly governmental function of the SSS is spelled out unmistakably in Section 2 of R.A. No. 1161 entitled "The
Social Security Act of 1954," thus:
It is hereby declared to be the policy of the Republic of the Philippines to develop, establish gradually and perfect a
social security system which shall be suitable to the needs of the people throughout the Philippines, and shall
provide protection against the hazards of disability, sickness, old age and death.
As stated in the Explanatory Note to the Bill that became R. A. No. 1161, the Social Security Act of 1954:
It is a recognized principle in free societies that the State must help its citizens to make provision for emergencies
beyond their control, such as unemployment, sickness requiring expensive medical treatment, and similar
emergencies to a greater or lesser degree by means of social security legislation in a variety of forms.
And this Court, in Roman Catholic Archbishop of Manila vs. SSS (L-15045, 1 SCRA 10 [1961]), declared that "the
Social Security Law was enacted pursuant to the 'policy of the Republic to develop, establish gradually and perfect
a social security system which shall be suitable to the needs of the people throughout the Philippines and provide
protection to employees against the hazards of disability, sickness, old age and death' (Sec. 2, Republic Act No.
1161, as amended). Such enactment is a legitimate exercise of the police power. It affords protection to labor,
especially to working women and minors, and is in full accord with the constitutional provisions on the 'promotion
of social justice to insure the well being and economic security of all the people.
It is interesting to note that aforesaid pronouncement of this Court was incorporated in the Social Security Act
(R.A. 1161) by Presidential Decree No. 24 issued on October 19, 1972. Thus, as amended by said Decree, its section
2 now reads: "It is the policy of the Republic of the Philippines to establish, develop, promote and perfect a sound
viable 'tax exempt social security service suitable to the needs of the people throughout the Philippines, which
shall provide to covered employees and their families protection against the hazards of disability, sickness, old age,
and death, with a view to promoting their well-being in the spirit of social justice" (emphasis supplied). And one of its
whereases expressly states that "the measure is necessary to effect reforms in SSS operations and to revitalize its
structure as an important agency in the promotion of the social and economic development programs of the
Government; ... (emphasis supplied).
Considering therefore that the establishment and maintenance of an adequate social security and social services,
which the Social Security System seeks to perform and achieve are functions pursuant to the basic constitutional
mandate directing the State to promote "social justice to insure the well-being and economic security of all the
people" (1935 Constitution) or "to insure the dignity, welfare and security of all the people" as well as the police
power of the State, the inescapable conclusion is that the function of the SSS is and has always been governmental.
It thus becomes clear that petitioner Social Security System, under the obtaining facts and applicable laws in the
case, is not liable for the damages caused to private respondents by the tortious acts of its officers and employees
to whom the task done properly pertained.
A contrary rule as that enunciated in the majority opinion invites conspiracy between officials and employees of
the Social Security System and private parties to create financial liabilities against the System. Its funds are public
funds and more importantly trust funds, which must be protected.

Separate Opinions

AQUINO, J., concurring:


I concur. The award of moral damages is not justified under arts. 2219 and 2220 of the Civil Code. I vote to award
the private respondents the additional sum of P2,000 as litigation expenses.

MAKASIAR, J., dissenting:


I dissent.
I
To begin with, the negligent acts committed by the officers and employees of the petitioner, Social Security System,
amounted to not simply a contractual breach but tort. For the record is clear that petitioner's officers and
employees were grossly negligent bordering on malice or bad faith in applying for the extrajudicial foreclosure of
the mortgage contract executed in its favor by the spouses David B. Cruz and Socorro Concio-Cruz, and that even
after private respondents had brought to the attention of the petitioner's officers and employees their mistake,
they insisted on their course of action, instead of making the necessary rectifications, which grossly negligent and
oppressive acts caused damage to private respondents. As found by the Court of Appeals:
The appellant was not justified in applying for the extrajudicial foreclosure of the mortgage contract executed in its
favor by the spouses David B. Cruz and Socorro Concio-Cruz, Exh. 'A'. While it is true that the payments of the
monthly installments were previously not regular, it is a fact that as of June 30, 1968 the appellees, David B. Cruz
and Socorro Concio-Cruz were up-to-date and current in the payment of their monthly installments. Having
accepted the prior late payments of the monthly installments, the appellant could no longer suddenly and without
prior notice to the mortgagors apply for the extra-judicial foreclosure of the mortgage in July, 1968.
It is obvious that the appellant applied for the extra-judicial foreclosure of the mortgage in question because of
the gross negligence of its employees. This negligence was aggravated when the appellant, after being informed of the
error, insisted on proceeding with the extra-judicial foreclosure by invoking alleged violations of the mortgage
contract. But these violations are either too minor to warrant the drastic step of foreclosure or were deemed
condoned when the appellant accepted late payments prior to June 30, 1968. Hence the trial court did not err in
concluding that 'the act of defendant indeed was deliberate, calculated to cow plaintiffs into submission and made
obviously with malice (p. 54, rec.; emphasis supplied).
The circumstance that there was a pre-existing contractual relationship between the herein contending parties,
does not bar the tort liability of the officers and employees of petitioner; because tort liability may still exist
despite presence of contractual relations as the act that breaks the contract may also be a tort, as in this case (Air
France vs. Carrascoso, L-21438, Sept. 28, 1966, 18 SCRA 155, 168-169; Singson & Castillo vs. Bank of the Philippine
Islands, L-24837, June 27, 1968, 23 SCRA 1117, 1119-20).
Consequently, a tortious act being involved, the applicable provision of law is Article 2180 in relation to Article
2176 of the New Civil Code. Under Article 2180, ... The State is responsible in like manner when it acts through a
special agent; but not when the damage has been caused by the official to whom the task done properly pertains, in
which case what is provided in Article 2176 shall be applicable.
In the case at bar, the petitioner Social Security System as the instrumentality of the State to implement the social
justice guarantee enunciated in the Constitution, did not act through a special agent. Hence, the Social Security
System cannot be liable for the damages caused by the tortious acts of its officers and employees while in the
performance of their regular functions. The remedy therefore of private respondents is to proceed against the
guilty officers and employees of petitioner Social Security System as mandated by Article 2176 of the New Civil
Code.
For as held in the leading case of Merritt vs. Government of the Philippine Islands (34 Phil. 311).
The responsibility of the State is limited by Article 1903 to the case wherein it acts through a special agent, ... so
that in representation of the state and being bound to act as an agent thereof, he executes the trust confided to him.
This concept does not apply to any executive agent who is an employee of the active 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.
While Article 2180 of the New Civil Code was not invoked by the petitioner as a defense, this does not prevent this
Tribunal from taking cognizance of the same. For as stressed in Ortigas, Jr. vs. Lufthansa German Airlines (June 30,
1975, 64 SCRA 610, 633), failure to assign a defense as an error on appeal is a pure technicality that should not
prevail over the substantial issues in a controversy as the same would not serve the interest of justice, and "this
Court is clothed with ample authority to review matters even if they are not assigned as errors in the appeal, if it
finds that our consideration is necessary in arriving at a just decision of the case" (citing Saura & Export Co., Inc.,
May 31, 1963, 8 SCRA 143). Further, We have, time and again, re-stated the rule that the Supreme Court can
suspend its own rules to serve the ends of justice (Jose vs. C.A., et al., L-38581, March 31, 1976; Phil. Blooming Mills
Employees Organization, et al. vs. PBM Co., et al., L-31195, 51 SCRA 189, 215; Ronquillo vs. Marasigan, May 31,
1962, 5 SCRA 304, 312-313; Ordoveza vs. Raymundo, 63 Phil. 275).
The principle that a defense not expressly pleaded is deemed waived unless such failure is satisfactorily explained,
is merely a general rule which is subject to exceptions, among which is when the Court can take judicial notice of
such defense. In this case, We can take judicial notice of the law, like Article 2180 of the New Civil Code. It must be
emphasized that the courts have as much duty as the Commission on August to protect the public treasury from
being mulcted or raided illegally. And this becomes more imperative considering that a substantial portion of the
funds of the petitioner comes from the contributions of- employees and workers in private firms and is therefore in
the nature of a trust fund to be expended only for their welfare and benefit, with the government merely giving
some subsidy. Any amount of damages illegally assessed against the Social Security System will deplete the benefit
funds available to its covered members for the contingencies of sickness, disability, retirement or death.
It cannot likewise be seriously questioned that the Social Security System is comprehended in the definition in
Section 2 of the Revised Administrative Code of the term "Government of the Republic of the Philippines ... which
refers to the corporate governmental entity through which the functions of government are exercised throughout
the Philippine Islands, including, save as the contrary appears from the context, the various arms through which
political authority is made effective in the Philippines, whether pertaining to the central Government or to the
provincial or municipal branches or other forms of local government." And the second paragraph of said Section 2
provides that the term "national government" refers to the central government as distinguished from the different
forms of local government. There is nothing therein nor in the Social Security Act, as amended, intimating that the
national government does not include the Social Security System.
It is true that the Social Security System has a corporate or juridical personality of its own. But this does not
remove it as an integral part of the national or central government. For such corporate or juridical personality
invested in it is more for facility and convenience in the attainment of the objectives for which it was created by the
legislative. Such vesting of corporate or juridical personality in the Social Security System was never intended to
destroy the shield from liability afforded it as an integral part of the State or Government by Article 2180 of the
New Civil Code. Relatedly, such corporate or juridical personality of the Social Security System and the express
provision of the law creating the same that it can sue and be sued, have the effect of merely waiving its immunity
from suit as an entity performing governmental functions. Such waiver of its immunity from suit is not an
admission of its liability. Such waiver merely allows a private citizen a remedy for the enforcement and protection
of his rights, but always subject to the lawful defenses of the Social Security System one of which is Article 2180 of
the New Civil Code as aforestated. In other words, such waiver of immunity from suit is not equivalent to instant
liability. The Social Security System can only be held liable for damages arising from the tortious acts of its officers
and employees only if it acts through a special agent, which is not true in the case at bar.
II
It must be finally stressed that the Social Security System cannot be liable for damages because it is an entity of
government performing governmental functions; hence, not profit-oriented. The 1963 doctrine in SSSEA vs.
Soriano(7 SCRA 1016 [1963]) that the system is exercising proprietary functions, is no longer controlling.
For in 1969, the distinction between constituent and ministrant functions of the Government as laid down in the
case of Bacani vs. Nacoco (100 Phil. 468 [1956]) has been obliterated. In the case of Agricultural Credit and
Cooperative Financing Administration (ACCFA) vs. Confederation of Unions in Government Corporations and
Offices (CUGCO) [30 SCRA 649 (1969)], this Court in re-examining the aforesaid Bacani ruling observed that the
trend has been to abandon and reject the traditional "Constituent- Ministrant" criterion in governmental functions
in favor of the more responsive postulate that the growing complexities of modern society have rendered the
traditional classification of government functions unrealistic and obsolete.
WE held in the ACCFA case, thus:
The growing complexities of modern society, however, have rendered this traditional classification of the functions
of government quite unrealistic, not to say obsolete. The areas which used to be left to private enterprise and
initiative and which the government was called upon to enter optionally, and only 'because it was better equipped
to administer for the public welfare than is any private individual or groups of individuals,' continue to lose their
well-defined boundaries and to be absorbed within activities that the government must have undertaken in its
sovereign capacity if it is to meet the increasing social challenges of the times. Here as almost everywhere, else, the
tendency is undoubtedly towards a greater socialization of economic forces. Here of course, this development was
envisioned indeed adopted as a national policy, by the Constitution itself in its declaration of principle concerning
the promotion of social justice.
Chief Justice Fernando, then Associate Justice, in his concurring opinion stressed that:
The decision reached by this Court so ably given expression in the opinion of Justice Makalintal, characterized with
vigor, clarity and precision, represents what for me is a clear tendency not to be necessarily bound by our previous
pronouncements on what activities partake of a nature that is governmental. Of even greater significance, there is a
definite rejection of the 'constituent-ministrant' criterion of governmental functions, followed in Bacani vs.
National Coconut Corporation. That indeed is cause for gratification. For me at least, there is again full adherence to
the basic philosophy of the Constitution as to the extensive and vast power lodged in our government to cope with
the social and economic problems that even now sorely beset us. There is therefore full concurrence on my part to
the opinion of the court, distinguished by its high quality of juristic craftsmanship (pp. 666-667).
xxx xxx xxx
4. With the decision reached by us today, the government is freed from the compulsion exerted by the Bacani
doctrine of the 'constituent-ministrant' test as a criterion for the type of activity in which it may engage. It
constricting effect is consigned to oblivion. No doubts or misgivings need assail us that government efforts to
promote the public wealth whether through regulatory legislation of vast scope and emplitude or through the
undertaking of business activities, would have to face a searching and rigorous scrutiny. It is clear that their
legitimacy cannot be challenged on the ground alone of their being offensive to the implications of the laissez- faire
concept. Unless there be a repugnancy then to the limitations expressly set forth in the Constitution to protect
individual rights, the government enjoys a much wider latitude of action as to the means it chooses to cope with
grave social and economic problems that urgently press for solution. For me, at least, that is to manifest deference
to the philosophy of our fundamental law. Hence my full concurrence, as announced at the outset. (pp- 682-683,
emphasis supplied).
The 1935 Constitution declared:
Sec. 5. The promotion of social justice to insure the well being and economic security of all the people should be the
concern of the State. (Art. II, Declaration of Principles).
The present 1973 Constitution provides under its Declaration of Principles and State Policies (Article 11), that
The State shall promote social justice to ensure the dignity, welfare, and security of all the people. Towards this
end, the State shall regulate the acquisition, ownership, use, enjoyment, and disposition of private property, and
equitably diffuse property ownership and profits. (Section 6);
and
The State shall establish, maintain, and ensure adequate social services in the field of education, health, housing,
employment, welfare, and social security to guarantee the enjoyment by the people of a decent standard of living.
(Section 7).
The strictly governmental function of the SSS is spelled out unmistakably in Section 2 of R.A. No. 1161 entitled "The
Social Security Act of 1954," thus:
It is hereby declared to be the policy of the Republic of the Philippines to develop, establish gradually and perfect a
social security system which shall be suitable to the needs of the people throughout the Philippines, and shall
provide protection against the hazards of disability, sickness, old age and death.
As stated in the Explanatory Note to the Bill that became R. A. No. 1161, the Social Security Act of 1954:
It is a recognized principle in free societies that the State must help its citizens to make provision for emergencies
beyond their control, such as unemployment, sickness requiring expensive medical treatment, and similar
emergencies to a greater or lesser degree by means of social security legislation in a variety of forms.
And this Court, in Roman Catholic Archbishop of Manila vs. SSS (L-15045, 1 SCRA 10 [1961]), declared that "the
Social Security Law was enacted pursuant to the 'policy of the Republic to develop, establish gradually and perfect
a social security system which shall be suitable to the needs of the people throughout the Philippines and provide
protection to employees against the hazards of disability, sickness, old age and death' (Sec. 2, Republic Act No.
1161, as amended). Such enactment is a legitimate exercise of the police power. It affords protection to labor,
especially to working women and minors, and is in full accord with the constitutional provisions on the 'promotion
of social justice to insure the well being and economic security of all the people.
It is interesting to note that aforesaid pronouncement of this Court was incorporated in the Social Security Act
(R.A. 1161) by Presidential Decree No. 24 issued on October 19, 1972. Thus, as amended by said Decree, its section
2 now reads: "It is the policy of the Republic of the Philippines to establish, develop, promote and perfect a sound
viable 'tax exempt social security service suitable to the needs of the people throughout the Philippines, which
shall provide to covered employees and their families protection against the hazards of disability, sickness, old age,
and death, with a view to promoting their well-being in the spirit of social justice" (emphasis supplied). And one of its
whereases expressly states that "the measure is necessary to effect reforms in SSS operations and to revitalize its
structure as an important agency in the promotion of the social and economic development programs of the
Government; ... (emphasis supplied).
Considering therefore that the establishment and maintenance of an adequate social security and social services,
which the Social Security System seeks to perform and achieve are functions pursuant to the basic constitutional
mandate directing the State to promote "social justice to insure the well-being and economic security of all the
people" (1935 Constitution) or "to insure the dignity, welfare and security of all the people" as well as the police
power of the State, the inescapable conclusion is that the function of the SSS is and has always been governmental.
It thus becomes clear that petitioner Social Security System, under the obtaining facts and applicable laws in the
case, is not liable for the damages caused to private respondents by the tortious acts of its officers and employees
to whom the task done properly pertained.
A contrary rule as that enunciated in the majority opinion invites conspiracy between officials and employees of
the Social Security System and private parties to create financial liabilities against the System. Its funds are public
funds and more importantly trust funds, which must be protected.
Case No. 10

G.R. No. L-15751 January 28, 1961


BUREAU OF PRINTING, SERAFIN SALVADOR and MARIANO LEDESMA, petitioners,
vs.
THE BUREAU OF PRINTING EMPLOYEES ASSOCIATION (NLU), PACIFICO ADVINCULA, ROBERTO MENDOZA,
PONCIANO ARGANDA and TEODULO TOLERAN, respondents.
Office of the Solicitor General for petitioners.
Eulogio R. Lerum for respondents.
GUTIERREZ DAVID, J.:
This is a petition for certiorari and prohibition with preliminary injunction to annul Certain orders of the
respondent Court of Industrial Relations and to restrain it from further proceeding in the action for unfair labor
practice pending before it on the ground of lack of jurisdiction. Giving due course to the petition, this Court ordered
the issuance of the writ of preliminary injunction prayed for without bond.
The action in question was upon complaint of the respondents Bureau of Printing Employees Association (NLU)
Pacifico Advincula, Roberto Mendoza, Ponciano Arganda and Teodulo Toleran filed by an acting prosecutor of
the Industrial Court against herein petitioner Bureau of Printing, Serafin Salvador, the Acting Secretary of the
Department of General Services, and Mariano Ledesma the Director of the Bureau of Printing. The complaint
alleged that Serafin Salvador and Mariano Ledesma have been engaging in unfair labor practices by interfering
with, or coercing the employees of the Bureau of Printing particularly the members of the complaining association
petition, in the exercise of their right to self-organization an discriminating in regard to hire and tenure of their
employment in order to discourage them from pursuing the union activities.
Answering the complaint, the petitioners Bureau of Printing, Serafin Salvador and Mariano Ledesma denied the
charges of unfair labor practices attributed to the and, by way of affirmative defenses, alleged, among other things,
that respondents Pacifico Advincula, Roberto Mendoza Ponciano Arganda and Teodulo Toleran were suspended
pending result of an administrative investigation against them for breach of Civil Service rules and regulations
petitions; that the Bureau of Printing has no juridical personality to sue and be sued; that said Bureau of Printing is
not an industrial concern engaged for the purpose of gain but is an agency of the Republic performing government
functions. For relief, they prayed that the case be dismissed for lack of jurisdiction. Thereafter, before the case
could be heard, petitioners filed an "Omnibus Motion" asking for a preliminary hearing on the question of
jurisdiction raised by them in their answer and for suspension of the trial of the case on the merits pending the
determination of such jurisdictional question. The motion was granted, but after hearing, the trial judge of the
Industrial Court in an order dated January 27, 1959 sustained the jurisdiction of the court on the theory that the
functions of the Bureau of Printing are "exclusively proprietary in nature," and, consequently, denied the prayer for
dismissal. Reconsideration of this order having been also denied by the court in banc, the petitioners brought the
case to this Court through the present petition for certiorari and prohibition.
We find the petition to be meritorious.
The Bureau of Printing is an office of the Government created by the Administrative Code of 1916 (Act No. 2657).
As such instrumentality of the Government, it operates under the direct supervision of the Executive Secretary,
Office of the President, and is "charged with the execution of all printing and binding, including work incidental to
those processes, required by the National Government and such other work of the same character as said Bureau
may, by law or by order of the (Secretary of Finance) Executive Secretary, be authorized to undertake . . .." (See.
1644, Rev. Adm. Code). It has no corporate existence, and its appropriations are provided for in the General
Appropriations Act. Designed to meet the printing needs of the Government, it is primarily a service bureau and
obviously, not engaged in business or occupation for pecuniary profit.
It is true, as stated in the order complained of, that the Bureau of Printing receives outside jobs and that many of its
employees are paid for overtime work on regular working days and on holidays, but these facts do not justify the
conclusion that its functions are "exclusively proprietary in nature." Overtime work in the Bureau of Printing is
done only when the interest of the service so requires (sec. 566, Rev. Adm. Code). As a matter of administrative
policy, the overtime compensation may be paid, but such payment is discretionary with the head of the Bureau
depending upon its current appropriations, so that it cannot be the basis for holding that the functions of said
Bureau are wholly proprietary in character. Anent the additional work it executes for private persons, we find that
such work is done upon request, as distinguished from those solicited, and only "as the requirements of
Government work will permit" (sec. 1654, Rev. Adm. Code), and "upon terms fixed by the Director of Printing, with
the approval of the Department Head" (sec. 1655, id.). As shown by the uncontradicted evidence of the petitioners,
most of these works consist of orders for greeting cards during Christmas from government officials, and for
printing of checks of private banking institutions. On those greeting cards, the Government seal, of which only the
Bureau of Printing is authorized to use, is embossed, and on the bank cheeks, only the Bureau of Printing can print
the reproduction of the official documentary stamps appearing thereon. The volume of private jobs done, in
comparison with government jobs, is only one-half of 1 per cent, and in computing the costs for work done for
private parties, the Bureau does not include profit because it is not allowed to make any. Clearly, while the Bureau
of Printing is allowed to undertake private printing jobs, it cannot be pretended that it is thereby an industrial or
business concern. The additional work it executes for private parties is merely incidental to its function, and
although such work may be deemed proprietary in character, there is no showing that the employees performing
said proprietary function are separate and distinct from those employed in its general governmental functions.
From what has been stated, it is obvious that the Court of Industrial Relations did not acquire jurisdiction over the
respondent Bureau of Printing, and is thus devoid of any authority to take cognizance of the case. This Court has
already held in a long line of decisions that the Industrial Court has no jurisdiction to hear and determine the
complaint for unfair labor practice filed against institutions or corporations not organized for profit and,
consequently, not an industrial or business organization. This is so because the Industrial Peace Act was intended
to apply only to industrial employment, and to govern the relations between employers engaged in industry and
occupations for purposes of gain, and their industrial employees. (University of the Philippines, et al. vs. CIR, et al.,
G.R. No. L-15416, April 28, 1960; University of Sto. Tomas vs. Villanueva, et al., G.R. No. L-13748, October 30, 1959;
La Consolacion College vs. CIR, G.R. No. L-13282, April 22, 1960; See also the cases cited therein.) .
Indeed, as an office of the Government, without any corporate or juridical personality, the Bureau of Printing
cannot be sued. (Sec. 1, Rule 3, Rules of Court). Any suit, action or proceeding against it, if it were to produce any
effect, would actually be a suit, action or proceeding against the Government itself, and the rule is settled that the
Government cannot be sued without its consent, much less over its objection. (See Metran vs. Paredes, 45 Off. Gaz.
2835; Angat River Irrigation System, et al. vs. Angat River Workers' Union, et. al., G.R. Nos. L-10943-44, December
28, 1957).
The record also discloses that the instant case arose from the filing of administrative charges against some officers
of the respondent Bureau of Printing Employees' Association by the Acting Secretary of General Services. Said
administrative charges are for insubordination, grave misconduct and acts prejudicial to public service committed
by inciting the employees, of the Bureau of Printing to walk out of their jobs against the order of the duly
constituted officials. Under the law, the Heads of Departments and Bureaus are authorized to institute and
investigate administrative charges against erring subordinates. For the Industrial Court now to take cognizance of
the case filed before it, which is in effect a review of the acts of executive officials having to do with the discipline of
government employees under them, would be to interfere with the discharge of such functions by said officials.
WHEREFORE, the petition for a writ of prohibition is granted. The orders complained of are set aside and the
complaint for unfair labor practice against the petitioners is dismissed, with costs against respondents other than
the respondent court.
Case No. 11

G.R. No. 104269 November 11, 1993


DEPARTMENT OF AGRICULTURE, petitioner,
vs.
THE NATIONAL LABOR RELATIONS COMMISSION, et al., respondents.
Roy Lago Salcedo for private respondents.

VITUG, J.:
For consideration are the incidents that flow from the familiar doctrine of non-suability of the state.
In this petition for certiorari, the Department of Agriculture seeks to nullify the Resolution, 1 dated 27 November
1991, of the National Labor Relations Commission (NLRC), Fifth Division, Cagayan de Oro City, denying the petition
for injunction, prohibition and mandamus that prays to enjoin permanently the NLRC's Regional Arbitration
Branch X and Cagayan de Oro City Sheriff from enforcing the decision 2 of 31 May 1991 of the Executive Labor
Arbiter and from attaching and executing on petitioner's property.
The Department of Agriculture (herein petitioner) and Sultan Security Agency entered into a contract3 on 01 April
1989 for security services to be provided by the latter to the said governmental entity. Save for the increase in the
monthly rate of the guards, the same terms and conditions were also made to apply to another contract, dated 01
May 1990, between the same parties. Pursuant to their arrangements, guards were deployed by Sultan Agency in
the various premises of the petitioner.
On 13 September 1990, several guards of the Sultan Security Agency filed a complaint for underpayment of wages,
non-payment of 13th month pay, uniform allowances, night shift differential pay, holiday pay and overtime pay, as
well as for damages,4 before the Regional Arbitration Branch X of Cagayan de Oro City, docketed as NLRC Case No.
10-09-00455-90 (or 10-10-00519-90, its original docket number), against the Department of Agriculture and
Sultan Security Agency.
The Executive Labor Arbiter rendered a decision on 31 May finding herein petitioner
and jointly and severally liable with Sultan Security Agency for the payment of money claims, aggregating
P266,483.91, of the complainant security guards. The petitioner and Sultan Security Agency did not appeal the
decision of the Labor Arbiter. Thus, the decision became final and executory.
On 18 July 1991, the Labor Arbiter issued a writ of execution. 5 commanding the City Sheriff to enforce and execute
the judgment against the property of the two respondents. Forthwith, or on 19 July 1991, the City Sheriff levied on
execution the motor vehicles of the petitioner, i.e. one (1) unit Toyota Hi-Ace, one (1) unit Toyota Mini Cruiser, and
one (1) unit Toyota Crown.6 These units were put under the custody of Zacharias Roa, the property custodian of
the petitioner, pending their sale at public auction or the final settlement of the case, whichever would come first.
A petition for injunction, prohibition and mandamus, with prayer for preliminary writ of injunction was filed by the
petitioner with the National Labor Relations Commission (NLRC), Cagayan de Oro, alleging, inter alia, that the writ
issued was effected without the Labor Arbiter having duly acquired jurisdiction over the petitioner, and that,
therefore, the decision of the Labor Arbiter was null and void and all actions pursuant thereto should be deemed
equally invalid and of no legal, effect. The petitioner also pointed out that the attachment or seizure of its property
would hamper and jeopardize petitioner's governmental functions to the prejudice of the public good.
On 27 November 1991, the NLRC promulgated its assailed resolution; viz:
WHEREFORE, premises considered, the following orders are issued:
1. The enforcement and execution of the judgments against petitioner in NLRC RABX Cases Nos. 10-10-00455-90;
10-10-0481-90 and 10-10-00519-90 are temporarily suspended for a period of two (2) months, more or less, but
not extending beyond the last quarter of calendar year 1991 to enable petitioner to source and raise funds to
satisfy the judgment awards against it;
2. Meantime, petitioner is ordered and directed to source for funds within the period above-stated and to deposit
the sums of money equivalent to the aggregate amount. it has been adjudged to pay jointly and severally with
respondent Sultan Security Agency with the Regional Arbitration Branch X, Cagayan de Oro City within the same
period for proper dispositions;
3. In order to ensure compliance with this order, petitioner is likewise directed to put up and post
sufficient surety and supersedeas bond equivalent to at least to fifty (50%) percent of the total monetary award
issued by a reputable bonding company duly accredited by the Supreme Court or by the Regional Trial Court of
Misamis Oriental to answer for the satisfaction of the money claims in case of failure or default on the part of
petitioner to satisfy the money claims;
4. The City Sheriff is ordered to immediately release the properties of petitioner levied on execution within ten
(10) days from notice of the posting of sufficient surety or supersedeas bond as specified above. In the meanwhile,
petitioner is assessed to pay the costs and/or expenses incurred by the City Sheriff, if any, in connection with the
execution of the judgments in the above-stated cases upon presentation of the appropriate claims or vouchers and
receipts by the city Sheriff, subject to the conditions specified in the NLRC Sheriff, subject to the conditions
specified in the NLRC Manual of Instructions for Sheriffs;
5. The right of any of the judgment debtors to claim reimbursement against each other for any payments made in
connection with the satisfaction of the judgments herein is hereby recognized pursuant to the ruling in the Eagle
Security case, (supra). In case of dispute between the judgment debtors, the Executive Labor Arbiter of the Branch
of origin may upon proper petition by any of the parties conduct arbitration proceedings for the purpose and
thereby render his decision after due notice and hearings;
7. Finally, the petition for injunction is Dismissed for lack of basis. The writ of preliminary injunction previously
issued is Lifted and Set Aside and in lieu thereof, a Temporary Stay of Execution is issued for a period of two (2)
months but not extending beyond the last quarter of calendar year 1991, conditioned upon the posting of a surety
or supersedeas bond by petitioner within ten (10) days from notice pursuant to paragraph 3 of this disposition.
The motion to admit the complaint in intervention is Denied for lack of merit while the motion to dismiss the
petition filed by Duty Sheriff is Noted
SO ORDERED.
In this petition for certiorari, the petitioner charges the NLRC with grave abuse of discretion for refusing to quash
the writ of execution. The petitioner faults the NLRC for assuming jurisdiction over a money claim against the
Department, which, it claims, falls under the exclusive jurisdiction of the Commission on Audit. More importantly,
the petitioner asserts, the NLRC has disregarded the cardinal rule on the non-suability of the State.
The private respondents, on the other hand, argue that the petitioner has impliedly waived its immunity from suit
by concluding a service contract with Sultan Security Agency.
The basic postulate enshrined in the constitution that "(t)he State may not be sued without its consent," 7 reflects
nothing less than a recognition of the sovereign character of the State and an express affirmation of the unwritten
rule effectively insulating it from the jurisdiction of courts. 8 It is based on the very essence of sovereignty. As has
been aptly observed, by Justice Holmes, a sovereign is exempt from suit, not because of any formal conception or
obsolete theory, but on the logical and practical ground that there can be no legal right as against the authority that
makes the law on which the right depends. 9 True, the doctrine, not too infrequently, is derisively called "the royal
prerogative of dishonesty" because it grants the state the prerogative to defeat any legitimate claim against it by
simply invoking its non-suability. 10 We have had occasion, to explain in its defense, however, that a continued
adherence to the doctrine of non-suability cannot be deplored, for the loss of governmental efficiency and the
obstacle to the performance of its multifarious functions would be far greater in severity than the inconvenience
that may be caused private parties, if such fundamental principle is to be abandoned and the availability of judicial
remedy is not to be accordingly restricted. 11
The rule, in any case, is not really absolute for it does not say that the state may not be sued under any
circumstances. On the contrary, as correctly phrased, the doctrine only conveys, "the state may not be sued without
its consent;" its clear import then is that the State may at times be sued. 12 The States' consent may be given
expressly or impliedly. Express consent may be made through a general law13 or a special law. 14 In this
jurisdiction, the general law waiving the immunity of the state from suit is found in Act No. 3083, where the
Philippine government "consents and submits to be sued upon any money claims involving liability arising from
contract, express or implied, which could serve as a basis of civil action between private parties." 15 Implied
consent, on the other hand, is conceded when the State itself commences litigation, thus opening itself to a
counterclaim16 or when it enters into a contract. 17 In this situation, the government is deemed to have descended
to the level of the other contracting party and to have divested itself of its sovereign immunity. This rule, relied
upon by the NLRC and the private respondents, is not, however, without qualification. Not all contracts entered
into by the government operate as a waiver of its non-suability; distinction must still be made between one which
is executed in the exercise of its sovereign function and another which is done in its proprietary capacity. 18
In the Unites States of America vs. Ruiz, 19 where the questioned transaction dealt with improvements on the
wharves in the naval installation at Subic Bay, we held:
The traditional rule of immunity exempts a State from being sued in the courts of another State without its consent
or waiver. This rule is a necessary consequence of the principles of independence and equality of States. However,
the rules of International Law are not petrified; they are constantly developing and evolving. And because the
activities of states have multiplied, it has been necessary to distinguish them between sovereign and
governmental acts ( jure imperii) and private, commercial and proprietary act ( jure gestionisis). The result is that
State immunity now extends only to acts jure imperii. The restrictive application of State immunity is now the rule
in the United States, the United Kingdom and other states in Western Europe.
xxx xxx xxx
The restrictive application of State immunity is proper only when the proceedings arise out of commercial
transactions of the foreign sovereign, its commercial activities or economic affairs. Stated differently, a state may
be said to have descended to the level of an individual and can this be deemed to have actually given its consent to
be sued only when it enters into business contracts. It does not apply where the contracts relates to the exercise of
its sovereign functions. In this case the projects are an integral part of the naval base which is devoted to the
defense of both the United States and the Philippines, indisputably a function of the government of the highest
order; they are not utilized for not dedicated to commercial or business purposes.
In the instant case, the Department of Agriculture has not pretended to have assumed a capacity apart from its
being a governmental entity when it entered into the questioned contract; nor that it could have, in fact, performed
any act proprietary in character.
But, be that as it may, the claims of private respondents, i.e. for underpayment of wages, holiday pay, overtime pay
and similar other items, arising from the Contract for Service, clearly constitute money claims. Act No. 3083,
aforecited, gives the consent of the State to be "sued upon any moneyed claim involving liability arising from
contract, express or implied, . . . Pursuant, however, to Commonwealth Act ("C.A.") No. 327, as amended by
Presidential Decree ("P.D.") No. 1145, the money claim first be brought to the Commission on Audit. Thus,
in Carabao, Inc., vs. Agricultural Productivity Commission, 20 we ruled:
(C)laimants have to prosecute their money claims against the Government under Commonwealth Act 327, stating
that Act 3083 stands now merely as the general law waiving the State's immunity from suit, subject to the general
limitation expressed in Section 7 thereof that "no execution shall issue upon any judgment rendered by any Court
against the Government of the (Philippines), and that the conditions provided in Commonwealth Act 327 for filing
money claims against the Government must be strictly observed."
We fail to see any substantial conflict or inconsistency between the provisions of C.A. No. 327 and the Labor Code
with respect to money claims against the State. The Labor code, in relation to Act No. 3083, provides the legal basis
for the State liability but the prosecution, enforcement or satisfaction thereof must still be pursued in accordance
with the rules and procedures laid down in C.A. No. 327, as amended by P.D. 1445.
When the state gives its consent to be sued, it does thereby necessarily consent to unrestrained execution against
it. tersely put, when the State waives its immunity, all it does, in effect, is to give the other party an opportunity to
prove, if it can, that the State has a liability. 21 In Republic vs. Villasor 22 this Court, in nullifying the issuance of an
alias writ of execution directed against the funds of the Armed Forces of the Philippines to satisfy a final and
executory judgment, has explained, thus
The universal rule that where the State gives its consent to be sued by private parties either by general or special
law, it may limit the claimant's action "only up to the completion of proceedings anterior to the stage of execution"
and that the power of the Courts ends when the judgment is rendered, since government funds and properties may not
be seized under writs or execution or garnishment to satisfy such judgments, is based on obvious considerations of
public policy. Disbursements of public funds must be covered by the correspondent appropriation as required by
law. The functions and public services rendered by the State cannot be allowed to be paralyzed or disrupted by the
diversion of public funds from their legitimate and specific objects, as appropriated by law.23
WHEREFORE, the petition is GRANTED. The resolution, dated 27 November 1991, is hereby REVERSED and SET
ASIDE. The writ of execution directed against the property of the Department of Agriculture is nullified, and the
public respondents are hereby enjoined permanently from doing, issuing and implementing any and all writs of
execution issued pursuant to the decision rendered by the Labor Arbiter against said petitioner.
SO ORDERED.
Case No. 12

G.R. No. 84607 March 19, 1993


REPUBLIC OF THE PHILIPPINES, GEN. RAMON MONTANO, GEN. ALFREDO LIM, GEN. ALEXANDER AGUIRRE,
COL. EDGAR DULA TORRES, COL. CEZAR NAZARENO, MAJ. FILEMON GASMEN, PAT. NICANOR ABANDO, PFC
SERAFIN CEBU, JR., GEN. BRIGIDO PAREDES, COL. ROGELIO MONFORTE, PFC ANTONIO LUCERO, PAT. JOSE
MENDIOLA, PAT. NELSON TUASON, POLICE CORPORAL PANFILO ROGOS, POLICE LT. JUAN B. BELTRAN, PAT.
NOEL MANAGBAO, MARINE THIRD CLASS TRAINEE (3CT) NOLITO NOGATO, 3CT ALEJANDRO B. NAGUIO, JR.,
EFREN ARCILLAS, 3CT AGERICO LUNA, 3CT BASILIO BORJA, 3CT MANOLITO LUSPO, 3CT CRISTITUTO
GERVACIO, 3CT MANUEL DELA CRUZ, JR., MARINE (CDC) BN., (CIVIL DISTURBANCE CONTROL), MOBILE
DISPERSAL TEAM (MDT), LT. ROMEO PAQUINTO, LT. LAONGLAANG GOCE, MAJ. DEMETRIO DE LA CRUZ,
POLICE CAPTAIN RODOLFO NAVAL, JOHN DOE, RICHARD DOE, ROBERTO DOE AND OTHER
DOES, petitioners,
vs.
HON. EDILBERTO G. SANDOVAL, Regional Trial Court of Manila, Branch IX, ERLINDA C. CAYLAO, ANATALIA
ANGELES PEREZ, MYRNA BAUTISTA, CIPRIANA EVANGELIO, ELMA GRAMPA, AMELIA GUTIERREZ, NEMESIO
LAKINDANUM, PURITA YUMUL, MIGUEL ARABE, TERESITA ARJONA, RONALDO CAMPOMANES AND
CARMENCITA ARDONI VDA. DE CAMPOMANES, ROGELIO DOMUNICO, in their capacity as heirs of the
deceased (ROBERTO C. CAYLAO, SONNY "BOY" PEREZ, DIONESIO BAUTISTA, DANTE EVANGELIO, ADELFA
ARIBE, DANILO ARJONA, VICENTE CAMPOMANES, RONILO DOMUNICO) respectively; and (names of sixty-
two injured victims) EDDIE AGUINALDO, FELICISIMO ALBASIA, NAPOLEON BAUTISTA, DANILO CRUZ, EDDIE
MENSOLA, ALBERT PITALBO, VICENTE ROSEL, RUBEN CARRIEDO, JOY CRUZ, HONORIO LABAMBA, JR.,
EFREN MACARAIG, SOLOMON MANALOTO, ROMEO DURAN, NILO TAGUBAT, JUN CARSELLAR, JOEY
CLEMENTE, GERARDO COYOCA, LUISITO DACO, BENJAMIN DELA CRUZ, ARTHUR FONTANILLA, WILSON
GARCIA, CARLOS SIRAY, JOSE PERRAS, TOMAS VALLOS, ARNOLD ENAJE, MARIANITA DIMAPILIS, FRANCISCO
ANGELES, MARCELO ESGUERRA, JOSE FERRER, RODEL DE GUIA, ELVIS MENDOZA, VICTORIANO QUIJANO,
JOEY ADIME, RESIENO ADUL, ALBERTO TARSONA, CARLOS ALCANTARA, MAMERTO ALIAS, EMELITO
ALMONTE, BENILDA ALONUEVO, EMMA ABADILLO, REYNALDO CABALLES, JR., JAIME CALDETO, FABIAN
CANTELEJO, RODRIGO CARABARA, ENRIQUE DELGADO, JUN DELOS SANTOS, MARIO DEMASACA, FRANCISCO
GONZALES, ERNESTO GONZALES, RAMIRO JAMIL, JUAN LUCENA, PERLITO SALAYSAY, JOHNNY SANTOS,
MARCELO SANTOS, EMIL SAYAO, BAYANI UMALI, REMIGIO MAHALIN, BONG MANLULO, ARMANDO
MATIENZO, CARLO MEDINA, LITO NOVENARIO, and ROSELLA ROBALE, respondents.
G.R. No. 84645 March 19, 1993
ERLINDA C. CAYLAO, ANATALIA ANGELES PEREZ, MYRNA BAUTISTA, CIPRIANA EVANGELIO, ELMA
GRAMPA, AMELIA GUTIERREZ, NEMESIO LAKINDANUM, PURITA YUMUL, MIGUEL ARABE, TERESITA
ARJONA, RONALDO CAMPOMANES AND CARMENCITA ARDONI VDA. DE CAMPOMANES, ROGELIO
DOMUNICO, in their capacity as heirs of the deceased (ROBERTO C. CAYLAO, SONNY "BOY" PEREZ,
DIONESIO GRAMPA, ANGELITO GUTIERREZ, BERNABE LAKINDANUM, ROBERTO YUMUL, LEOPOLDO
ALONZO, ADELFA ARIBE, DANILO ARJONA, VICENTE CAMPOMANES, RONILO DOMUNICO) respectively; and
(names of sixty-two injured victims) EDDIE AGUINALDO, FELICISIMO ALBASIA, NAPOLEON BAUTISTA,
DANILO CRUZ, EDDIE MENSOLA, ALBERT PITALBO, VICENTE ROSEL, RUBEN CARRIEDO, JOY CRUZ,
HONORIO LABAMBA, JR. EFREN MACARAIG, SOLOMON MANALOTO, ROMEO DURAN, NILO TAGUBAT, JUN
CARSELLAR, JOEY CLEMENTE, GERARDO COYOCA, LUISITO DACO, BENJAMIN DELA CRUZ, ARTHUR
FONTANILLA, WILSON GARCIA, CARLOS SIRAY, JOSE PERRAS TOMAS VALLOS, ARNOLD ENAJE, MARIANITA
DIMAPILIS, FRANCISCO ANGELES, MARCELO ESGUERRA, JOSE FERRER, RODEL DE GUIA, ELVIS MENDOZA,
VICTORINO QUIJANO, JOEY ADIME, RESIENO ADUL, ALBERTO TARSONA, CARLOS ALCANTARA, MAMERTO
ALIAS, EMELITO ALMONTE, BENILDA ALONUEVO, EMMA ABADILLO, REYNALDO CABALLES, JR., JAIME
CALDETO, FABIAN CANTELEJO, RODRIGO CARABARA, ENRIQUE DELGADO, JUN DELOS SANTOS, MARIO
DEMASACA, FRANCISCO GONZALES, ERNESTO GONZALES, RAMIRO JAMIL, JUAN LUCENA, PERLITO
SALAYSAY, JOHNNY SANTOS, MARCELO SANTOS, EMIL SAYAO, BAYANI UMALI, REMIGIO MAHALIN, BONG
MANLULO, ARMANDO MATIENZO, CARLO MEDINA, LITO NOVENARIO, ROSELLA ROBALE, petitioners,
vs.
REPUBLIC OF THE PHILIPPINES, and HONORABLE EDILBERTO G. SANDOVAL, Regional Trial Court of
Manila, Branch 9, respondents.
The Solicitor General for the Republic of the Philippines.
Structural Alternative Legal Assistance for Grassroots for petitioners in 84645 & private respondents in
84607.

CAMPOS, JR., J.:


People may have already forgotten the tragedy that transpired on January 22, 1987. It is quite ironic that
then, some journalists called it a Black Thursday, as a grim reminder to the nation of the misfortune that
befell twelve (12) rallyists. But for most Filipinos now, the Mendiola massacre may now just as well be a
chapter in our history books. For those however, who have become widows and orphans, certainly they
would not settle for just that. They seek retribution for the lives taken that will never be brought back to
life again.
Hence, the heirs of the deceased, together with those injured (Caylao group), instituted this petition,
docketed as G.R. No. 84645, under Section 1 of Rule 65 of the Rules of Court, seeking the reversal and
setting aside of the Orders of respondent Judge Sandoval,1 dated May 31 and August 8, 1988, dismissing the
complaint for damages of herein petitioners against the Republic of the Philippines in Civil Case No. 88-43351.
Petitioner, the Republic of the Philippines, through a similar remedy, docketed as G.R. No. 84607, seeks to set aside
the Order of respondent Judge dated May 31, 1988, in Civil Case No. 88-43351 entitled "Erlinda Caylao, et al. vs.
Republic of the Philippines, et al."
The pertinent portion of the questioned Order2 dated May 31, 1988, reads as follows:
With respect however to the other defendants, the impleaded Military Officers, since they are being charged in
their personal and official capacity, and holding them liable, if at all, would not result in financial responsibility of
the government, the principle of immunity from suit can not conveniently and correspondingly be applied to them.
WHEREFORE, the case as against the defendant Republic of the Philippines is hereby dismissed. As against the rest
of the defendants the motion to dismiss is denied. They are given a period of ten (10) days from receipt of this
order within which to file their respective pleadings.
On the other hand, the Order3 , dated August 8, 1988, denied the motions filed by both parties, for a
reconsideration of the abovecited Order, respondent Judge finding no cogent reason to disturb the said order.
The massacre was the culmination of eight days and seven nights of encampment by members of the militant
Kilusang Magbubukid sa Pilipinas (KMP) at the then Ministry (now Department) of Agrarian Reform (MAR) at the
Philippine Tobacco Administration Building along Elliptical Road in Diliman, Quezon City.
The farmers and their sympathizers presented their demands for what they called "genuine agrarian reform". The
KMP, led by its national president, Jaime Tadeo, presented their problems and demands, among which were: (a)
giving lands for free to farmers; (b) zero retention of lands by landlords; and (c) stop amortizations of land
payments.
The dialogue between the farmers and the MAR officials began on January 15, 1987. The two days that followed
saw a marked increase in people at the encampment. It was only on January 19, 1987 that Jaime Tadeo arrived to
meet with then Minister Heherson Alvarez, only to be informed that the Minister can only meet with him the
following day. On January 20, 1987, the meeting was held at the MAR conference room. Tadeo demanded that the
minimum comprehensive land reform program be granted immediately. Minister Alvarez, for his part, can only
promise to do his best to bring the matter to the attention of then President Aquino, during the cabinet meeting on
January 21, 1987.
Tension mounted the following day. The farmers, now on their seventh day of encampment, barricaded the MAR
premises and prevented the employees from going inside their offices. They hoisted the KMP flag together with the
Philippine flag.
At around 6:30 p.m. of the same day, Minister Alvarez, in a meeting with Tadeo and his leaders, advised the latter
to instead wait for the ratification of the 1987 Constitution and just allow the government to implement its
comprehensive land reform program. Tadeo, however, countered by saying that he did not believe in the
Constitution and that a genuine land reform cannot be realized under a landlord-controlled Congress. A heated
discussion ensued between Tadeo and Minister Alvarez. This notwithstanding, Minister Alvarez suggested a
negotiating panel from each side to meet again the following day.
On January 22, 1987, Tadeo's group instead decided to march to Malacaang to air their demands. Before the
march started, Tadeo talked to the press and TV media. He uttered fiery words, the most telling of which were:
". . . inalis namin ang barikada bilang kahilingan ng ating Presidente, pero kinakailangan alisin din niya ang
barikada sa Mendiola sapagkat bubutasin din namin iyon at dadanak ang dugo . . . ."4
The farmers then proceeded to march to Malacaang, from Quezon Memorial Circle, at 10:00 a.m. They were later
joined by members of other sectoral organizations such as the Kilusang Mayo Uno (KMU), Bagong Alyansang
Makabayan (BAYAN), League of Filipino Students (LFS) and Kongreso ng Pagkakaisa ng Maralitang Lungsod
(KPML).
At around 1:00 p.m., the marchers reached Liwasang Bonifacio where they held a brief program. It was at this point
that some of the marchers entered the eastern side of the Post Office Building, and removed the steel bars
surrounding the garden. Thereafter, they joined the march to Malacaang. At about 4:30 p.m., they reached C.M.
Recto Avenue.
In anticipation of a civil disturbance, and acting upon reports received by the Capital Regional Command
(CAPCOM) that the rallyists would proceed to Mendiola to break through the police lines and rush towards
Malacaang, CAPCOM Commander General Ramon E. Montao inspected the preparations and adequacy of the
government forces to quell impending attacks.
OPLAN YELLOW (Revised) was put into effect. Task Force Nazareno under the command of Col. Cesar Nazareno
was deployed at the vicinity of Malacaang. The civil disturbance control units of the Western Police District under
Police Brigadier General Alfredo S. Lim were also activated.
Intelligence reports were also received that the KMP was heavily infiltrated by CPP/NPA elements and that an
insurrection was impending. The threat seemed grave as there were also reports that San Beda College and Centro
Escolar University would be forcibly occupied.
In its report, the Citizens' Mendiola Commission (a body specifically tasked to investigate the facts surrounding the
incident, Commission for short) stated that the government anti-riot forces were assembled at Mendiola in a
formation of three phalanges, in the following manner:
(1) The first line was composed of policemen from police stations Nos. 3, 4, 6, 7, 8, 9 and 10 and the Chinatown
detachment of the Western Police District. Police Colonel Edgar Dula Torres, Deputy Superintendent of the Western
Police District, was designated as ground commander of the CDC first line of defense. The WPD CDC elements were
positioned at the intersection of Mendiola and Legarda Streets after they were ordered to move forward from the
top of Mendiola bridge. The WPD forces were in khaki uniform and carried the standard CDC equipment
aluminum shields, truncheons and gas masks.
(2) At the second line of defense about ten (10) yards behind the WPD policemen were the elements of the
Integrated National Police (INP) Field Force stationed at Fort Bonifacio from the 61st and 62nd INP Field Force,
who carried also the standard CDC equipment truncheons, shields and gas masks. The INP Field Force
was under the command of Police Major Demetrio dela Cruz.
(3) Forming the third line was the Marine Civil Disturbance Control Battalion composed of the first and second
companies of the Philippine Marines stationed at Fort Bonifacio. The marines were all equipped with shields,
truncheons and M-16 rifles (armalites) slung at their backs, under the command of Major Felimon B. Gasmin. The
Marine CDC Battalion was positioned in line formation ten (10) yards farther behind the INP Field Force.
At the back of the marines were four (4) 6 x 6 army trucks, occupying the entire width of Mendiola street, followed
immediately by two water cannons, one on each side of the street and eight fire trucks, four trucks on each side of
the street. The eight fire trucks from Fire District I of Manila under Fire Superintendent Mario C. Tanchanco, were to
supply water to the two water cannons.
Stationed farther behind the CDC forces were the two Mobile Dispersal Teams (MDT) each composed of two tear
gas grenadiers, two spotters, an assistant grenadier, a driver and the team leader.
In front of the College of the Holy Spirit near Gate 4 of Malacaang stood the VOLVO Mobile Communications Van
of the Commanding General of CAPCOM/INP, General Ramon E. Montao. At this command post, after General
Montao had conferred with TF Nazareno Commander, Colonel Cezar Nazareno, about the adequacy and readiness
of his forces, it was agreed that Police General Alfredo S. Lim would designate Police Colonel Edgar Dula
Torres and Police Major Conrado Franciscoas negotiators with the marchers. Police General Lim then proceeded to
the WPD CDC elements already positioned at the foot of Mendiola bridge to relay to Police Colonel Torres and
Police Major Francisco the instructions that the latter would negotiate with the marchers.5 (Emphasis supplied)
The marchers, at around 4:30 p.m., numbered about 10,000 to 15,000. From C.M. Recto Avenue, they proceeded
toward the police lines. No dialogue took place between the marchers and the anti-riot squad. It was at this
moment that a clash occurred and, borrowing the words of the Commission "pandemonium broke loose". The
Commission stated in its findings, to wit:
. . . There was an explosion followed by throwing of pillboxes, stones and bottles. Steel bars, wooden clubs and lead
pipes were used against the police. The police fought back with their shields and truncheons. The police line was
breached. Suddenly shots were heard. The demonstrators disengaged from the government forces and retreated
towards C.M. Recto Avenue. But sporadic firing continued from the government forces.
After the firing ceased, two MDTs headed by Lt. Romeo Paquinto and Lt. Laonglaan Goce sped towards Legarda
Street and lobbed tear gas at the remaining rallyist still grouped in the vicinity of Mendiola. After dispersing the
crowd, the two MDTs, together with the two WPD MDTs, proceeded to Liwasang Bonifacio upon order of General
Montao to disperse the rallyists assembled thereat. Assisting the MDTs were a number of policemen from the
WPD, attired in civilian clothes with white head bands, who were armed with long firearms.6 (Emphasis ours)
After the clash, twelve (12) marchers were officially confirmed dead, although according to Tadeo, there were
thirteen (13) dead, but he was not able to give the name and address of said victim. Thirty-nine (39) were
wounded by gunshots and twelve (12) sustained minor injuries, all belonging to the group of the marchers.
Of the police and military personnel, three (3) sustained gunshot wounds and twenty (20) suffered minor physical
injuries such as abrasions, contusions and the like.
In the aftermath of the confrontation, then President Corazon C. Aquino issued Administrative Order No. 11, 7 (A.O.
11, for brevity) dated January 22, 1987, which created the Citizens' Mendiola Commission. The body was composed
of retired Supreme Court Justice Vicente Abad Santos as Chairman, retired Supreme Court Justice Jose Y. Feria and
Mr. Antonio U. Miranda, both as members. A.O. 11 stated that the Commission was created precisely for the
"purpose of conducting an investigation of the disorder, deaths, and casualties that took place in the vicinity of
Mendiola Bridge and Mendiola Street and Claro M. Recto Avenue, Manila, in the afternoon of January 22, 1987". The
Commission was expected to have submitted its findings not later than February 6, 1987. But it failed to do so.
Consequently, the deadline was moved to February 16, 1987 by Administrative Order No. 13. Again, the
Commission was unable to meet this deadline. Finally, on February 27, 1987, it submitted its report, in accordance
with Administrative Order No. 17, issued on February 11, 1987.
In its report, the Commission recapitulated its findings, to wit:
(1) The march to Mendiola of the KMP led by Jaime Tadeo, together with the other sectoral groups, was not
covered by any permit as required under Batas Pambansa Blg. 880, the Public Assembly Act of 1985, in violation of
paragraph (a) Section 13, punishable under paragraph (a), Section 14 of said law.
(2) The crowd dispersal control units of the police and the military were armed with .38 and .45 caliber handguns,
and M-16 armalites, which is a prohibited act under paragraph 4(g), Section 13, and punishable under paragraph
(b), Section 14 of Batas Pambansa Blg. 880.
(3) The security men assigned to protect the WPD, INP Field Force, the Marines and supporting military units, as
well as the security officers of the police and military commanders were in civilian attire in violation of paragraph
(a), Section 10, Batas Pambansa 880.
(4) There was unnecessary firing by the police and military crowd dispersal control units in dispersing the
marchers, a prohibited act under paragraph (e), Section 13, and punishable under paragraph (b), Section 14, Batas
Pambansa Blg. 880.
(5) The carrying and use of steel bars, pillboxes, darts, lead pipe, wooden clubs with spikes, and guns by the
marchers as offensive weapons are prohibited acts punishable under paragraph (g), Section 13, and punishable
under paragraph (e), Section 14 of Batas Pambansa Blg. 880.
(6) The KMP farmers broke off further negotiations with the MAR officials and were determined to march to
Malacaang, emboldened as they are, by the inflammatory and incendiary utterances of their leader, Jaime Tadeo
"bubutasin namin ang barikada . . Dadanak and dugo . . . Ang nagugutom na magsasaka ay gagawa ng sariling
butas. . .
(7) There was no dialogue between the rallyists and the government forces. Upon approaching the intersections of
Legarda and Mendiola, the marchers began pushing the police lines and penetrated and broke through the first line
of the CDC contingent.
(8) The police fought back with their truncheons and shields. They stood their ground but the CDC line was
breached. There ensued gunfire from both sides. It is not clear who started the firing.
(9) At the onset of the disturbance and violence, the water cannons and tear gas were not put into effective use to
disperse the rioting crowd.
(10) The water cannons and fire trucks were not put into operation because (a) there was no order to use them;
(b) they were incorrectly prepositioned; and (c) they were out of range of the marchers.
(11) Tear gas was not used at the start of the disturbance to disperse the rioters. After the crowd had dispersed
and the wounded and dead were being carried away, the MDTs of the police and the military with their tear gas
equipment and components conducted dispersal operations in the Mendiola area and proceeded to Liwasang
Bonifacio to disperse the remnants of the marchers.
(12) No barbed wire barricade was used in Mendiola but no official reason was given for its absence.8
From the results of the probe, the Commission recommended9 the criminal prosecution of four unidentified,
uniformed individuals, shown either on tape or in pictures, firing at the direction of the marchers. In connection
with this, it was the Commission's recommendation that the National Bureau of Investigation (NBI) be tasked to
undertake investigations regarding the identities of those who actually fired their guns that resulted in the death of
or injury to the victims of the incident. The Commission also suggested that all the commissioned officers of both
the Western Police District and the INP Field Force, who were armed during the incident, be prosecuted for
violation of paragraph 4(g) of Section 13, Batas Pambansa Blg. 880, the Public Assembly Act of 1985. The
Commission's recommendation also included the prosecution of the marchers, for carrying deadly or offensive
weapons, but whose identities have yet to be established. As for Jaime Tadeo, the Commission said that he should
be prosecuted both for violation of paragraph (a), Section 13, Batas Pambansa Blg. 880 for holding the rally
without a permit and for violation of Article 142, as amended, of the Revised Penal Code for inciting to sedition. As
for the following officers, namely: (1) Gen. Ramon E. Montao; (2) Police Gen. Alfredo S. Lim; (3) Police Gen. Edgar
Dula Torres; (4) Police Maj. Demetrio dela Cruz; (5) Col. Cezar Nazareno; and (5) Maj. Felimon Gasmin, for their
failure to make effective use of their skill and experience in directing the dispersal operations in Mendiola,
administrative sanctions were recommended to be imposed.
The last and the most significant recommendation of the Commission was for the deceased and wounded victims of
the Mendiola incident to be compensated by the government. It was this portion that petitioners (Caylao group)
invoke in their claim for damages from the government.
Notwithstanding such recommendation, no concrete form of compensation was received by the victims. Thus, on
July 27, 1987, herein petitioners, (Caylao group) filed a formal letter of demand for compensation from the
Government. 10 This formal demand was indorsed by the office of the Executive Secretary to the Department of
Budget and Management (DBM) on August 13, 1987. The House Committee on Human Rights, on February 10,
1988, recommended the expeditious payment of compensation to the Mendiola victims. 11
After almost a year, on January 20, 1988, petitioners (Caylao group) were constrained to institute an action for
damages against the Republic of the Philippines, together with the military officers, and personnel involved in the
Mendiola incident, before the trial court. The complaint was docketed as Civil Case No. 88-43351.
On February 23, 1988, the Solicitor General filed a Motion to Dismiss on the ground that the State cannot be sued
without its consent. Petitioners opposed said motion on March 16, 1988, maintaining that the State has waived its
immunity from suit and that the dismissal of the instant action is contrary to both the Constitution and the
International Law on Human Rights.
Respondent Judge Sandoval, in his first questioned Order, dismissed the complaint as against the Republic of the
Philippines on the ground that there was no waiver by the State. Petitioners (Caylao group) filed a Motion for
Reconsideration therefrom, but the same was denied by respondent judge in his Order dated August 8, 1988.
Consequently, Caylao and her co-petitioners filed the instant petition.
On the other hand, the Republic of the Philippines, together with the military officers and personnel impleaded as
defendants in the court below, filed its petition for certiorari.
Having arisen from the same factual beginnings and raising practically identical issues, the two (2) petitions were
consolidated and will therefore be jointly dealt with and resolved in this Decision.
The resolution of both petitions revolves around the main issue of whether or not the State has waived its
immunity from suit.
Petitioners (Caylao group) advance the argument that the State has impliedly waived its sovereign immunity from
suit. It is their considered view that by the recommendation made by the Commission for the government to
indemnify the heirs and victims of the Mendiola incident and by the public addresses made by then President
Aquino in the aftermath of the killings, the State has consented to be sued.
Under our Constitution the principle of immunity of the government from suit is expressly provided in Article XVI,
Section 3. The principle is based on the very essence of sovereignty, and on the practical ground that there can be
no legal right as against the authority that makes the law on which the right depends. 12 It also rests on reasons of
public policy that public service would be hindered, and the public endangered, if the sovereign authority could
be subjected to law suits at the instance of every citizen and consequently controlled in the uses and dispositions of
the means required for the proper administration of the government. 13
This is not a suit against the State with its consent.
Firstly, the recommendation made by the Commission regarding indemnification of the heirs of the deceased and
the victims of the incident by the government does not in any way mean that liability automatically attaches to the
State. It is important to note that A.O. 11 expressly states that the purpose of creating the Commission was to have
a body that will conduct an "investigation of the disorder, deaths and casualties that took place." 14 In the exercise
of its functions, A.O. 11 provides guidelines, and what is relevant to Our discussion reads:
1 Its conclusions regarding the existence of probable cause for the commission of any offense and of the persons
probably guilty of the same shall be sufficient compliance with the rules on preliminary investigation and the
charges arising therefrom may be filed directly with the proper court. 15
In effect, whatever may be the findings of the Commission, the same shall only serve as the cause of action in the
event that any party decides to litigate his/her claim. Therefore, the Commission is merely a preliminary venue.
The Commission is not the end in itself. Whatever recommendation it makes cannot in any way bind the State
immediately, such recommendation not having become final and, executory. This is precisely the essence of it
being a fact-finding body.
Secondly, whatever acts or utterances that then President Aquino may have done or said, the same are not
tantamount to the State having waived its immunity from suit. The President's act of joining the marchers, days
after the incident, does not mean that there was an admission by the State of any liability. In fact to borrow the
words of petitioners (Caylao group), "it was an act of solidarity by the government with the people". Moreover,
petitioners rely on President Aquino's speech promising that the government would address the grievances of the
rallyists. By this alone, it cannot be inferred that the State has admitted any liability, much less can it be inferred
that it has consented to the suit.
Although consent to be sued may be given impliedly, still it cannot be maintained that such consent was given
considering the circumstances obtaining in the instant case.
Thirdly, the case does not qualify as a suit against the State.
Some instances when a suit against the State is proper are: 16
(1) When the Republic is sued by name;
(2) When the suit is against an unincorporated government agency;
(3) When the, suit is on its face against a government officer but the case is such that ultimate liability will belong
not to the officer but to the government.
While the Republic in this case is sued by name, the ultimate liability does not pertain to the government. Although
the military officers and personnel, then party defendants, were discharging their official functions when the
incident occurred, their functions ceased to be official the moment they exceeded their authority. Based on the
Commission findings, there was lack of justification by the government forces in the use of firearms. 17 Moreover,
the members of the police and military crowd dispersal units committed a prohibited act under B.P. Blg. 880 18 as
there was unnecessary firing by them in dispersing the marchers. 19
As early as 1954, this Court has pronounced that an officer cannot shelter himself by the plea that he is a public
agent acting under the color of his office when his acts are wholly without authority. 20 Until recently in
1991, 21 this doctrine still found application, this Court saying that immunity from suit cannot institutionalize
irresponsibility and non-accountability nor grant a privileged status not claimed by any other official of the
Republic. The military and police forces were deployed to ensure that the rally would be peaceful and orderly as
well as to guarantee the safety of the very people that they are duty-bound to protect. However, the facts as found
by the trial court showed that they fired at the unruly crowd to disperse the latter.
While it is true that nothing is better settled than the general rule that a sovereign state and its political
subdivisions cannot be sued in the courts except when it has given its consent, it cannot be invoked by both the
military officers to release them from any liability, and by the heirs and victims to demand indemnification from
the government. The principle of state immunity from suit does not apply, as in this case, when the relief
demanded by the suit requires no affirmative official action on the part of the State nor the affirmative discharge of
any obligation which belongs to the State in its political capacity, even though the officers or agents who are made
defendants claim to hold or act only by virtue of a title of the state and as its agents and servants. 22 This Court has
made it quite clear that even a "high position in the government does not confer a license to persecute or recklessly
injure another." 23
The inescapable conclusion is that the State cannot be held civilly liable for the deaths that followed the incident.
Instead, the liability should fall on the named defendants in the lower court. In line with the ruling of this court
in Shauf vs. Court of Appeals, 24 herein public officials, having been found to have acted beyond the scope of their
authority, may be held liable for damages.
WHEREFORE, finding no reversible error and no grave abuse of discretion committed by respondent Judge in
issuing the questioned orders, the instant petitions are hereby DISMISSED.
SO ORDERED.
Case No. 13

G.R. No. L-35645 May 22, 1985


UNITED STATES OF AMERICA, CAPT. JAMES E. GALLOWAY, WILLIAM I. COLLINS and ROBERT
GOHIER, petitioners,
vs.
HON. V. M. RUIZ, Presiding Judge of Branch XV, Court of First Instance of Rizal and ELIGIO DE GUZMAN &
CO., INC., respondents.
Sycip, Salazar, Luna & Manalo & Feliciano Law for petitioners.
Albert, Vergara, Benares, Perias & Dominguez Law Office for respondents.

ABAD SANTOS, J.:


This is a petition to review, set aside certain orders and restrain the respondent judge from trying Civil Case No.
779M of the defunct Court of First Instance of Rizal.
The factual background is as follows:
At times material to this case, the United States of America had a naval base in Subic, Zambales. The base was one
of those provided in the Military Bases Agreement between the Philippines and the United States.
Sometime in May, 1972, the United States invited the submission of bids for the following projects
1. Repair offender system, Alava Wharf at the U.S. Naval Station Subic Bay, Philippines.
2. Repair typhoon damage to NAS Cubi shoreline; repair typhoon damage to shoreline revetment, NAVBASE Subic;
and repair to Leyte Wharf approach, NAVBASE Subic Bay, Philippines.
Eligio de Guzman & Co., Inc. responded to the invitation and submitted bids. Subsequent thereto, the company
received from the United States two telegrams requesting it to confirm its price proposals and for the name of its
bonding company. The company complied with the requests. [In its complaint, 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." (Rollo, p. 30.) The truth of this allegation has not been
tested because the case has not reached the trial stage.]
In June, 1972, the company received a letter which was signed by Wilham I. Collins, Director, Contracts Division,
Naval Facilities Engineering Command, Southwest Pacific, Department of the Navy of the United States, who is one
of the petitioners herein. The letter said that the company did not qualify to receive an award for the projects
because of its previous unsatisfactory performance rating on a repair contract for the sea wall at the boat landings
of the U.S. Naval Station in Subic Bay. The letter further said that the projects had been awarded to third parties. In
the abovementioned Civil Case No. 779-M, the company sued the United States of America and Messrs. James E.
Galloway, William I. Collins and Robert Gohier all members of the Engineering Command of the U.S. Navy. The
complaint is to order the defendants to allow the plaintiff to perform the work on the projects and, in the event that
specific performance was no longer possible, to order the defendants to pay damages. 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 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, the subject matter of the complaint being
acts and omissions of the individual defendants as agents of defendant United States of America, 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." (Rollo, p. 50.)
Subsequently the defendants filed a motion to dismiss the complaint which included an opposition to the issuance
of the writ of preliminary injunction. The company opposed the motion. The trial court denied the motion and
issued the writ. The defendants moved twice to reconsider but to no avail. Hence the instant petition which seeks
to restrain perpetually the proceedings in Civil Case No. 779-M for lack of jurisdiction on the part of the trial court.
The petition is highly impressed with merit.
The traditional rule of State immunity exempts a State from being sued in the courts of another State without its
consent or waiver. This rule is a necessary consequence of the principles of independence and equality of States.
However, the rules of International Law are not petrified; they are constantly developing and evolving. And
because the activities of states have multiplied, it has been necessary to distinguish them-between sovereign and
governmental acts (jure imperii) and private, commercial and proprietary acts (jure gestionis). The result is that
State immunity now extends only to acts jure imperil The restrictive application of State immunity is now the rule
in the United States, the United Kingdom and other states in western Europe. (See Coquia and Defensor Santiago,
Public International Law, pp. 207-209 [1984].)
The respondent judge recognized the restrictive doctrine of State immunity when he said in his Order denying the
defendants' (now petitioners) motion: " A distinction should be made between a strictly governmental function of
the sovereign state from its private, proprietary or non- governmental acts (Rollo, p. 20.) However, 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. As aptly
pointed out by plaintiff's counsel in his reply citing the ruling in the case of Lyons, Inc., [104 Phil. 594 (1958)], and
which this Court quotes with approval, viz.:
It is however contended that when a sovereign state enters into a contract with a private person, 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. ...
xxx xxx xxx
We agree to the above contention, and considering that the United States government, through its agency at Subic
Bay, entered into a contract with appellant for stevedoring and miscellaneous labor services within the Subic Bay
Area, a U.S. Naval Reservation, 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. The trial court, therefore, has jurisdiction to entertain this
case ... (Rollo, pp. 20-21.)
The reliance placed on Lyons by the respondent judge is misplaced for the following reasons:
In Harry Lyons, Inc. vs. The United States of America, supra, 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 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. 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; and (b) plaintiff failed to exhaust the administrative remedies
provided in the contract. The order of dismissal was elevated to this Court for review.
In sustaining the action of the lower court, 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, or, stated differently, it has
failed to first exhaust its administrative remedies against said Government, the lower court acted properly in
dismissing this case.(At p. 598.)
It can thus be seen that the statement in respect of the waiver of State immunity from suit was purely gratuitous
and, therefore, obiter so that it has no value as an imperative authority.
The restrictive application of State immunity is proper only when the proceedings arise out of commercial
transactions of the foreign sovereign, its commercial activities or economic affairs. Stated differently, a State may
be said to have descended to the level of an individual and can thus be deemed to have tacitly given its consent to
be sued only when it enters into business contracts. It does not apply where the contract relates to the exercise of
its sovereign functions. In this case the projects are an integral part of the naval base which is devoted to the
defense of both the United States and the Philippines, indisputably a function of the government of the highest
order; they are not utilized for nor dedicated to commercial or business purposes.
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. Lopez, 84 Phil. 312 (1949). In that case the plaintiffs leased three apartment
buildings to the United States of America for the use of its military officials. The plaintiffs sued to recover
possession of the premises on the ground that the term of the leases had expired. They also asked for increased
rentals until the apartments shall have been vacated.
The defendants who were armed forces officers of the United States moved to dismiss the suit for lack of
jurisdiction in the part of the court. The Municipal Court of Manila granted the motion to dismiss; sustained by the
Court of First Instance, the plaintiffs went to this Court for review on certiorari. In denying the petition, 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; 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.S.
Government. On the basis of the ruling in the case of Land vs. Dollar already cited, and on what we have already
stated, the present action must be considered as one against the U.S. Government. It is clear hat the courts of the
Philippines including the Municipal Court of Manila have no jurisdiction over the present case for unlawful
detainer. The question of lack of jurisdiction was raised and interposed at the very beginning of the action. The U.S.
Government has not , given its consent to the filing of this suit which is essentially against her, though not in name.
Moreover, 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, which renders
more obvious the lack of jurisdiction of the courts of his country. 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. (At
p. 323.)
In Syquia,the United States concluded contracts with private individuals but the contracts notwithstanding the
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.
WHEREFORE, the petition is granted; the questioned orders of the respondent judge are set aside and Civil Case
No. is dismissed. Costs against the private respondent.
Teehankee, Aquino, Concepcion, Jr., Melencio-Herrera, Plana, * Escolin, Relova, Gutierrez, Jr., De la Fuente, Cuevas and
Alampay, JJ., concur.
Fernando, C.J., took no part.

Separate Opinions

MAKASIAR, J., dissenting:


The petition should be dismissed and the proceedings in Civil Case No. 779-M in the defunct CFI (now RTC) of Rizal
be allowed to continue therein.
In the case of Lyons vs. the United States of America (104 Phil. 593), where the contract entered into between the
plaintiff (Harry Lyons, Inc.) and the defendant (U.S. Government) involved stevedoring and labor services within
the Subic Bay area, this Court further stated that inasmuch as ". . . the United States Government. through its agency
at Subic Bay, entered into a contract with appellant for stevedoring and miscellaneous labor services within the
Subic Bay area, a U.S. Navy Reservation, 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."
When the U.S. Government, through its agency at Subic Bay, confirmed the acceptance of a bid of a private company
for the repair of wharves or shoreline in the Subic Bay area, it is deemed to have entered into a contract and thus
waived the mantle of sovereign immunity from suit and descended to the level of the ordinary citizen. Its consent
to be sued, therefore, is implied from its act of entering into a contract (Santos vs. Santos, 92 Phil. 281, 284).
Justice and fairness dictate that a foreign government that commits a breach of its contractual obligation in the
case at bar by the unilateral cancellation of the award for the project by the United States government, through its
agency at Subic Bay should not be allowed to take undue advantage of a party who may have legitimate claims
against it by seeking refuge behind the shield of non-suability. A contrary view would render a Filipino citizen, as in
the instant case, helpless and without redress in his own country for violation of his rights committed by the agents
of the foreign government professing to act in its name.
Appropriate are the words of Justice Perfecto in his dissenting opinion in Syquia vs. Almeda Lopez, 84 Phil. 312,
325:
Although, generally, foreign governments are beyond the jurisdiction of domestic courts of justice, such rule is
inapplicable to cases in which the foreign government enters into private contracts with the citizens of the court's
jurisdiction. A contrary view would simply run against all principles of decency and violative of all tenets of
morals.
Moral principles and principles of justice are as valid and applicable as well with regard to private individuals as
with regard to governments either domestic or foreign. Once a foreign government enters into a private contract
with the private citizens of another country, such foreign government cannot shield its non-performance or
contravention of the terms of the contract under the cloak of non-jurisdiction. To place such foreign government
beyond the jurisdiction of the domestic courts is to give approval to the execution of unilateral contracts,
graphically described in Spanish as 'contratos leoninos', because one party gets the lion's share to the detriment of
the other. To give validity to such contract is to sanctify bad faith, deceit, fraud. We prefer to adhere to the thesis
that all parties in a private contract, including governments and the most powerful of them, are amenable to law,
and that such contracts are enforceable through the help of the courts of justice with jurisdiction to take
cognizance of any violation of such contracts if the same had been entered into only by private individuals.
Constant resort by a foreign state or its agents to the doctrine of State immunity in this jurisdiction impinges
unduly upon our sovereignty and dignity as a nation. Its application will particularly discourage Filipino or
domestic contractors from transacting business and entering into contracts with United States authorities or
facilities in the Philippines whether naval, air or ground forces-because the difficulty, if not impossibility, of
enforcing a validly executed contract and of seeking judicial remedy in our own courts for breaches of contractual
obligation committed by agents of the United States government, always, looms large, thereby hampering the
growth of Filipino enterprises and creating a virtual monopoly in our own country by United States contractors of
contracts for services or supplies with the various U.S. offices and agencies operating in the Philippines.
The sanctity of upholding agreements freely entered into by the parties cannot be over emphasized. Whether the
parties are nations or private individuals, it is to be reasonably assumed and expected that the undertakings in the
contract will be complied with in good faith.
One glaring fact of modern day civilization is that a big and powerful nation, like the United States of America, can
always overwhelm small and weak nations. The declaration in the United Nations Charter that its member states
are equal and sovereign, becomes hollow and meaningless because big nations wielding economic and military
superiority impose upon and dictate to small nations, subverting their sovereignty and dignity as nations. Thus,
more often than not, when U.S. interest clashes with the interest of small nations, the American governmental
agencies or its citizens invoke principles of international law for their own benefit.
In the case at bar, the efficacy of the contract between the U.S. Naval authorities at Subic Bay on one hand, and
herein private respondent on the other, was honored more in the breach than in the compliance The opinion of the
majority will certainly open the floodgates of more violations of contractual obligations. American authorities or
any foreign government in the Philippines for that matter, dealing with the citizens of this country, can
conveniently seek protective cover under the majority opinion. The result is disastrous to the Philippines.
This opinion of the majority manifests a neo-colonial mentality. It fosters economic imperialism and foreign
political ascendancy in our Republic.
The doctrine of government immunity from suit cannot and should not serve as an instrument for perpetrating an
injustice on a citizen (Amigable vs. Cuenca, L-26400, February 29, 1972, 43 SCRA 360; Ministerio vs. Court of First
Instance, L-31635, August 31, 1971, 40 SCRA 464).
Under the doctrine of implied waiver of its non-suability, the United States government, through its naval
authorities at Subic Bay, should be held amenable to lawsuits in our country like any other juristic person.
The invocation by the petitioner United States of America is not in accord with paragraph 3 of Article III of the
original RP-US Military Bases Agreement of March 14, 1947, which states that "in the exercise of the above-
mentioned rights, powers and authority, the United States agrees that the powers granted to it will not be used
unreasonably. . ." (Emphasis supplied).
Nor is such posture of the petitioners herein in harmony with the amendment dated May 27, 1968 to the aforesaid
RP-US Military Bases Agreement, which recognizes "the need to promote and maintain sound employment
practices which will assure equality of treatment of all employees ... and continuing favorable employer-employee
relations ..." and "(B)elieving that an agreement will be mutually beneficial and will strengthen the democratic
institutions cherished by both Governments, ... the United States Government agrees to accord preferential
employment of Filipino citizens in the Bases, thus (1) the U.S. Forces in the Philippines shall fill the needs for
civilian employment by employing Filipino citizens, etc." (Par. 1, Art. I of the Amendment of May 27, 1968).
Neither does the invocation by petitioners of state immunity from suit express fidelity to paragraph 1 of Article IV
of the aforesaid amendment of May 2 7, 1968 which directs that " contractors and concessionaires performing
work for the U.S. Armed Forces shall be required by their contract or concession agreements to comply with all
applicable Philippine labor laws and regulations, " even though paragraph 2 thereof affirms that "nothing in this
Agreement shall imply any waiver by either of the two Governments of such immunity under international law."
Reliance by petitioners on the non-suability of the United States Government before the local courts, actually
clashes with No. III on respect for Philippine law of the Memorandum of Agreement signed on January 7, 1979, also
amending RP-US Military Bases Agreement, which stresses that "it is the duty of members of the United States
Forces, the civilian component and their dependents, to respect the laws of the Republic of the Philippines and to
abstain from any activity inconsistent with the spirit of the Military Bases Agreement and, in particular, from any
political activity in the Philippines. The United States shag take all measures within its authority to insure that they
adhere to them (Emphasis supplied).
The foregoing duty imposed by the amendment to the Agreement is further emphasized by No. IV on the economic
and social improvement of areas surrounding the bases, which directs that "moreover, the United States Forces shall
procure goods and services in the Philippines to the maximum extent feasible" (Emphasis supplied).
Under No. VI on labor and taxation of the said amendment of January 6, 1979 in connection with the discussions on
possible revisions or alterations of the Agreement of May 27, 1968, "the discussions shall be conducted on the basis
of the principles of equality of treatment, the right to organize, and bargain collectively, and respect for the
sovereignty of the Republic of the Philippines" (Emphasis supplied)
The majority opinion seems to mock the provision of paragraph 1 of the joint statement of President Marcos and
Vice-President Mondale of the United States dated May 4, 1978 that "the United States re-affirms that Philippine
sovereignty extends over the bases and that Its base shall be under the command of a Philippine Base Commander,"
which is supposed to underscore the joint Communique of President Marcos and U.S. President Ford of December
7, 1975, under which "they affirm that sovereign equality, territorial integrity and political independence of all States
are fundamental principles which both countries scrupulously respect; and that "they confirm that mutual respect for
the dignity of each nation shall characterize their friendship as well as the alliance between their two countries. "
The majority opinion negates the statement on the delineation of the powers, duties and responsibilities of both
the Philippine and American Base Commanders that "in the performance of their duties, the Philippine Base
Commander and the American Base Commander shall be guided by full respect for Philippine sovereignty on the one
hand and the assurance of unhampered U.S. military operations on the other hand and that "they shall promote
cooperation understanding and harmonious relations within the Base and with the general public in the proximate
vicinity thereof" (par. 2 & par. 3 of the Annex covered by the exchange of notes, January 7, 1979, between
Ambassador Richard W. Murphy and Minister of Foreign Affairs Carlos P. Romulo, Emphasis supplied).

Separate Opinions
MAKASIAR, J., dissenting:
The petition should be dismissed and the proceedings in Civil Case No. 779-M in the defunct CFI (now RTC) of Rizal
be allowed to continue therein.
In the case of Lyons vs. the United States of America (104 Phil. 593), where the contract entered into between the
plaintiff (Harry Lyons, Inc.) and the defendant (U.S. Government) involved stevedoring and labor services within
the Subic Bay area, this Court further stated that inasmuch as ". . . the United States Government. through its agency
at Subic Bay, entered into a contract with appellant for stevedoring and miscellaneous labor services within the
Subic Bay area, a U.S. Navy Reservation, 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."
When the U.S. Government, through its agency at Subic Bay, confirmed the acceptance of a bid of a private company
for the repair of wharves or shoreline in the Subic Bay area, it is deemed to have entered into a contract and thus
waived the mantle of sovereign immunity from suit and descended to the level of the ordinary citizen. Its consent
to be sued, therefore, is implied from its act of entering into a contract (Santos vs. Santos, 92 Phil. 281, 284).
Justice and fairness dictate that a foreign government that commits a breach of its contractual obligation in the
case at bar by the unilateral cancellation of the award for the project by the United States government, through its
agency at Subic Bay should not be allowed to take undue advantage of a party who may have legitimate claims
against it by seeking refuge behind the shield of non-suability. A contrary view would render a Filipino citizen, as in
the instant case, helpless and without redress in his own country for violation of his rights committed by the agents
of the foreign government professing to act in its name.
Appropriate are the words of Justice Perfecto in his dissenting opinion in Syquia vs. Almeda Lopez, 84 Phil. 312,
325:
Although, generally, foreign governments are beyond the jurisdiction of domestic courts of justice, such rule is
inapplicable to cases in which the foreign government enters into private contracts with the citizens of the court's
jurisdiction. A contrary view would simply run against all principles of decency and violative of all tenets of
morals.
Moral principles and principles of justice are as valid and applicable as well with regard to private individuals as
with regard to governments either domestic or foreign. Once a foreign government enters into a private contract
with the private citizens of another country, such foreign government cannot shield its non-performance or
contravention of the terms of the contract under the cloak of non-jurisdiction. To place such foreign government
beyond the jurisdiction of the domestic courts is to give approval to the execution of unilateral contracts,
graphically described in Spanish as 'contratos leoninos', because one party gets the lion's share to the detriment of
the other. To give validity to such contract is to sanctify bad faith, deceit, fraud. We prefer to adhere to the thesis
that all parties in a private contract, including governments and the most powerful of them, are amenable to law,
and that such contracts are enforceable through the help of the courts of justice with jurisdiction to take
cognizance of any violation of such contracts if the same had been entered into only by private individuals.
Constant resort by a foreign state or its agents to the doctrine of State immunity in this jurisdiction impinges
unduly upon our sovereignty and dignity as a nation. Its application will particularly discourage Filipino or
domestic contractors from transacting business and entering into contracts with United States authorities or
facilities in the Philippines whether naval, air or ground forces-because the difficulty, if not impossibility, of
enforcing a validly executed contract and of seeking judicial remedy in our own courts for breaches of contractual
obligation committed by agents of the United States government, always, looms large, thereby hampering the
growth of Filipino enterprises and creating a virtual monopoly in our own country by United States contractors of
contracts for services or supplies with the various U.S. offices and agencies operating in the Philippines.
The sanctity of upholding agreements freely entered into by the parties cannot be over emphasized. Whether the
parties are nations or private individuals, it is to be reasonably assumed and expected that the undertakings in the
contract will be complied with in good faith.
One glaring fact of modern day civilization is that a big and powerful nation, like the United States of America, can
always overwhelm small and weak nations. The declaration in the United Nations Charter that its member states
are equal and sovereign, becomes hollow and meaningless because big nations wielding economic and military
superiority impose upon and dictate to small nations, subverting their sovereignty and dignity as nations. Thus,
more often than not, when U.S. interest clashes with the interest of small nations, the American governmental
agencies or its citizens invoke principles of international law for their own benefit.
In the case at bar, the efficacy of the contract between the U.S. Naval authorities at Subic Bay on one hand, and
herein private respondent on the other, was honored more in the breach than in the compliance The opinion of the
majority will certainly open the floodgates of more violations of contractual obligations. American authorities or
any foreign government in the Philippines for that matter, dealing with the citizens of this country, can
conveniently seek protective cover under the majority opinion. The result is disastrous to the Philippines.
This opinion of the majority manifests a neo-colonial mentality. It fosters economic imperialism and foreign
political ascendancy in our Republic.
The doctrine of government immunity from suit cannot and should not serve as an instrument for perpetrating an
injustice on a citizen (Amigable vs. Cuenca, L-26400, February 29, 1972, 43 SCRA 360; Ministerio vs. Court of First
Instance, L-31635, August 31, 1971, 40 SCRA 464).
Under the doctrine of implied waiver of its non-suability, the United States government, through its naval
authorities at Subic Bay, should be held amenable to lawsuits in our country like any other juristic person.
The invocation by the petitioner United States of America is not in accord with paragraph 3 of Article III of the
original RP-US Military Bases Agreement of March 14, 1947, which states that "in the exercise of the above-
mentioned rights, powers and authority, the United States agrees that the powers granted to it will not be used
unreasonably. . ." (Emphasis supplied).
Nor is such posture of the petitioners herein in harmony with the amendment dated May 27, 1968 to the aforesaid
RP-US Military Bases Agreement, which recognizes "the need to promote and maintain sound employment
practices which will assure equality of treatment of all employees ... and continuing favorable employer-employee
relations ..." and "(B)elieving that an agreement will be mutually beneficial and will strengthen the democratic
institutions cherished by both Governments, ... the United States Government agrees to accord preferential
employment of Filipino citizens in the Bases, thus (1) the U.S. Forces in the Philippines shall fill the needs for
civilian employment by employing Filipino citizens, etc." (Par. 1, Art. I of the Amendment of May 27, 1968).
Neither does the invocation by petitioners of state immunity from suit express fidelity to paragraph 1 of Article IV
of the aforesaid amendment of May 2 7, 1968 which directs that " contractors and concessionaires performing
work for the U.S. Armed Forces shall be required by their contract or concession agreements to comply with all
applicable Philippine labor laws and regulations, " even though paragraph 2 thereof affirms that "nothing in this
Agreement shall imply any waiver by either of the two Governments of such immunity under international law."
Reliance by petitioners on the non-suability of the United States Government before the local courts, actually
clashes with No. III on respect for Philippine law of the Memorandum of Agreement signed on January 7, 1979, also
amending RP-US Military Bases Agreement, which stresses that "it is the duty of members of the United States
Forces, the civilian component and their dependents, to respect the laws of the Republic of the Philippines and to
abstain from any activity inconsistent with the spirit of the Military Bases Agreement and, in particular, from any
political activity in the Philippines. The United States shag take all measures within its authority to insure that they
adhere to them (Emphasis supplied).
The foregoing duty imposed by the amendment to the Agreement is further emphasized by No. IV on the economic
and social improvement of areas surrounding the bases, which directs that "moreover, the United States Forces shall
procure goods and services in the Philippines to the maximum extent feasible" (Emphasis supplied).
Under No. VI on labor and taxation of the said amendment of January 6, 1979 in connection with the discussions on
possible revisions or alterations of the Agreement of May 27, 1968, "the discussions shall be conducted on the basis
of the principles of equality of treatment, the right to organize, and bargain collectively, and respect for the
sovereignty of the Republic of the Philippines" (Emphasis supplied)
The majority opinion seems to mock the provision of paragraph 1 of the joint statement of President Marcos and
Vice-President Mondale of the United States dated May 4, 1978 that "the United States re-affirms that Philippine
sovereignty extends over the bases and that Its base shall be under the command of a Philippine Base Commander,"
which is supposed to underscore the joint Communique of President Marcos and U.S. President Ford of December
7, 1975, under which "they affirm that sovereign equality, territorial integrity and political independence of all States
are fundamental principles which both countries scrupulously respect; and that "they confirm that mutual respect for
the dignity of each nation shall characterize their friendship as well as the alliance between their two countries. "
The majority opinion negates the statement on the delineation of the powers, duties and responsibilities of both
the Philippine and American Base Commanders that "in the performance of their duties, the Philippine Base
Commander and the American Base Commander shall be guided by full respect for Philippine sovereignty on the one
hand and the assurance of unhampered U.S. military operations on the other hand and that "they shall promote
cooperation understanding and harmonious relations within the Base and with the general public in the proximate
vicinity thereof" (par. 2 & par. 3 of the Annex covered by the exchange of notes, January 7, 1979, between
Ambassador Richard W. Murphy and Minister of Foreign Affairs Carlos P. Romulo, Emphasis supplied).
Case No. 14

G.R. No. L-34548 November 29, 1988


RIZAL COMMERCIAL BANKING CORPORATION, petitioner,
vs.
THE HONORABLE PACIFICO P. DE CASTRO and PHILIPPINE VIRGINIA TOBACCO
ADMINISTRATION, respondents
Meer, Meer & Meer for petitioner.
The Solicitor General for respondents.

CORTES, J.:
The crux of the instant controversy dwells on the liability of a bank for releasing its depositor's funds upon orders
of the court, pursuant to a writ of garnishment. If in compliance with the court order, the bank delivered the
garnished amount to the sheriff, who in turn delivered it to the judgment creditor, but subsequently, the order of
the court directing payment was set aside by the same judge, should the bank be held solidarily liable with the
judgment creditor to its depositor for reimbursement of the garnished funds? The Court does not think so.
In Civil Case No. Q-12785 of the Court of First Instance of Rizal, Quezon City Branch IX entitled "Badoc Planters, Inc.
versus Philippine Virginia Tobacco Administration, et al.," which was an action for recovery of unpaid tobacco
deliveries, an Order (Partial Judgment) was issued on January 15, 1970 by the Hon. Lourdes P. San Diego, then
Presiding Judge, ordering the defendants therein to pay jointly and severally, the plaintiff Badoc Planters, Inc.
(hereinafter referred to as "BADOC") within 48 hours the aggregate amount of P206,916.76, with legal interests
thereon.
On January 26,1970, BADOC filed an Urgent Ex-Parte Motion for a Writ of Execution of the said Partial Judgment
which was granted on the same day by the herein respondent judge who acted in place of the Hon. Judge San Diego
who had just been elevated as a Justice of the Court of Appeals. Accordingly, the Branch Clerk of Court on the very
same day, issued a Writ of Execution addressed to Special Sheriff Faustino Rigor, who then issued a Notice of
Garnishment addressed to the General Manager and/or Cashier of Rizal Commercial Banking Corporation
(hereinafter referred to as RCBC), the petitioner in this case, requesting a reply within five (5) days to said
garnishment as to any property which the Philippine Virginia Tobacco Administration (hereinafter referred to as
"PVTA") might have in the possession or control of petitioner or of any debts owing by the petitioner to said
defendant. Upon receipt of such Notice, RCBC notified PVTA thereof to enable the PVTA to take the necessary steps
for the protection of its own interest [Record on Appeal, p. 36]
Upon an Urgent Ex-Parte Motion dated January 27, 1970 filed by BADOC, the respondent Judge issued an Order
granting the Ex-Parte Motion and directing the herein petitioner "to deliver in check the amount garnished to
Sheriff Faustino Rigor and Sheriff Rigor in turn is ordered to cash the check and deliver the amount to the plaintiff's
representative and/or counsel on record." [Record on Appeal, p. 20; Rollo, p. 5.] In compliance with said Order,
petitioner delivered to Sheriff Rigor a certified check in the sum of P 206,916.76.
Respondent PVTA filed a Motion for Reconsideration dated February 26,1970 which was granted in an Order dated
April 6,1970, setting aside the Orders of Execution and of Payment and the Writ of Execution and ordering
petitioner and BADOC "to restore, jointly and severally, the account of PVTA with the said bank in the same
condition and state it was before the issuance of the aforesaid Orders by reimbursing the PVTA of the amount of P
206, 916.76 with interests at the legal rate from January 27, 1970 until fully paid to the account of the PVTA This is
without prejudice to the right of plaintiff to move for the execution of the partial judgment pending appeal in case
the motion for reconsideration is denied and appeal is taken from the said partial judgment." [Record on Appeal, p.
58]
The Motion for Reconsideration of the said Order of April 6, 1970 filed by herein petitioner was denied in the
Order of respondent judge dated June 10, 1970 and on June 19, 1970, which was within the period for perfecting
an appeal, the herein petitioner filed a Notice of Appeal to the Court of Appeals from the said Orders.
This case was then certified by the Court of Appeals to this Honorable Court, involving as it does purely questions
of law.
The petitioner raises two principal queries in the instant case: 1) Whether or not PVTA funds are public funds not
subject to garnishment; and 2) Whether or not the respondent Judge correctly ordered the herein petitioner to
reimburse the amount paid to the Special Sheriff by virtue of the execution issued pursuant to the Order/Partial
Judgment dated January 15, 1970.
The record reveals that on February 2, 1970, private respondent PVTA filed a Motion for Reconsideration of the
Order/ Partial Judgment of January 15, 1970. This was granted and the aforementioned Partial Judgment was set
aside. The case was set for hearings on November 4, 9 and 11, 1970 [Rollo, pp. 205-207.] However, in view of the
failure of plaintiff BADOC to appear on the said dates, the lower court ordered the dismissal of the case against
PVTA for failure to prosecute [Rollo, p. 208.]
It must be noted that the Order of respondent Judge dated April 6, 1970 directing the plaintiff to reimburse PVTA t
e amount of P206,916.76 with interests became final as to said plaintiff who failed to even file a motion for
reconsideration, much less to appeal from the said Order. Consequently, the order to restore the account of PVTA
with RCBC in the same condition and state it was before the issuance of the questioned orders must be upheld as to
the plaintiff, BADOC.
However, the questioned Order of April 6, 1970 must be set aside insofar as it ordered the petitioner RCBC, jointly
and severally with BADOC, to reimburse PVTA.
The petitioner merely obeyed a mandatory directive from the respondent Judge dated January 27, 1970, ordering
petitioner 94 "to deliver in check the amount garnished to Sheriff Faustino Rigor and Sheriff Rigor is in turn
ordered to cash the check and deliver the amount to the plaintiffs representative and/or counsel on record."
[Record on Appeal, p. 20.]
PVTA however claims that the manner in which the bank complied with the Sheriffs Notice of Garnishment
indicated breach of trust and dereliction of duty on the part of the bank as custodian of government funds. It
insistently urges that the premature delivery of the garnished amount by RCBC to the special sheriff even in the
absence of a demand to deliver made by the latter, before the expiration of the five-day period given to reply to the
Notice of Garnishment, without any reply having been given thereto nor any prior authorization from its depositor,
PVTA and even if the court's order of January 27, 1970 did not require the bank to immediately deliver the
garnished amount constitutes such lack of prudence as to make it answerable jointly and severally with the
plaintiff for the wrongful release of the money from the deposit of the PVTA. The respondent Judge in his
controverted Order sustained such contention and blamed RCBC for the supposed "hasty release of the amount
from the deposit of the PVTA without giving PVTA a chance to take proper steps by informing it of the action being
taken against its deposit, thereby observing with prudence the five-day period given to it by the sheriff." [Rollo, p.
81.]
Such allegations must be rejected for lack of merit. In the first place, it should be pointed out that RCBC did not
deliver the amount on the strength solely of a Notice of Garnishment; rather, the release of the funds was made
pursuant to the aforesaid Order of January 27, 1970. While the Notice of Garnishment dated January 26, 1970
contained no demand of payment as it was a mere request for petitioner to withold any funds of the PVTA then in
its possession, the Order of January 27, 1970 categorically required the delivery in check of the amount garnished
to the special sheriff, Faustino Rigor.
In the second place, the bank had already filed a reply to the Notice of Garnishment stating that it had in its custody
funds belonging to the PVTA, which, in fact was the basis of the plaintiff in filing a motion to secure delivery of the
garnished amount to the sheriff. [See Rollo, p. 93.]
Lastly, the bank, upon the receipt of the Notice of Garnishment, duly informed PVTA thereof to enable the latter to
take the necessary steps for the protection of its own interest [Record on Appeal, p. 36]
It is important to stress, at this juncture, that there was nothing irregular in the delivery of the funds of PVTA by
check to the sheriff, whose custody is equivalent to the custody of the court, he being a court officer. The order of
the court dated January 27, 1970 was composed of two parts, requiring: 1) RCBC to deliver in check the amount
garnished to the designated sheriff and 2) the sheriff in turn to cash the check and deliver the amount to the
plaintiffs representative and/or counsel on record. It must be noted that in delivering the garnished amount in
check to the sheriff, the RCBC did not thereby make any payment, for the law mandates that delivery of a check
does not produce the effect of payment until it has been cashed. [Article 1249, Civil Code.]
Moreover, by virtue of the order of garnishment, the same was placed in custodia legis and therefore, from that
time on, RCBC was holding the funds subject to the orders of the court a quo. That the sheriff, upon delivery of the
check to him by RCBC encashed it and turned over the proceeds thereof to the plaintiff was no longer the concern
of RCBC as the responsibility over the garnished funds passed to the court. Thus, no breach of trust or dereliction
of duty can be attributed to RCBC in delivering its depositor's funds pursuant to a court order which was merely in
the exercise of its power of control over such funds.
... The garnishment of property to satisfy a writ of execution operates as an attachment and fastens upon the
property a lien by which the property is brought under the jurisdiction of the court issuing the writ. It is brought
into custodia legis, under the sole control of such court [De Leon v. Salvador, G.R. Nos. L-30871 and L-31603,
December 28,1970, 36 SCRA 567, 574.]
The respondent judge however, censured the petitioner for having released the funds "simply on the strength of
the Order of the court which. far from ordering an immediate release of the amount involved, merely serves as a
standing authority to make the release at the proper time as prescribed by the rules." [Rollo, p. 81.]
This argument deserves no serious consideration. As stated earlier, the order directing the bank to deliver the
amount to the sheriff was distinct and separate from the order directing the sheriff to encash the said check. The
bank had no choice but to comply with the order demanding delivery of the garnished amount in check. The very
tenor of the order called for immediate compliance therewith. On the other hand, the bank cannot be held liable for
the subsequent encashment of the check as this was upon order of the court in the exercise of its power of control
over the funds placed in custodia legis by virtue of the garnishment.
In a recent decision [Engineering Construction Inc., v. National Power Corporation, G.R. No. L-34589, June 29,
1988] penned by the now Chief Justice Marcelo Fernan, this Court absolved a garnishee from any liability for
prompt compliance with its order for the delivery of the garnished funds. The rationale behind such ruling
deserves emphasis in the present case:
But while partial restitution is warranted in favor of NPC, we find that the Appellate Court erred in not absolving
MERALCO, the garnishee, from its obligations to NPC with respect to the payment of ECI of P 1,114,543.23, thus in
effect subjecting MERALCO to double liability. MERALCO should not have been faulted for its prompt obedience to
a writ of garnishment. Unless there are compelling reasons such as: a defect on the face of the writ or actual
knowledge on the part of the garnishee of lack of entitlement on the part of the garnisher, it is not incumbent upon
the garnishee to inquire or to judge for itself whether or not the order for the advance execution of a judgment is
valid.
Section 8, Rule 57 of the Rules of Court provides:
Effect of attachment of debts and credits.All persons having in their possession or under their control any credits
or other similar personal property belonging to the party against whom attachment is issued, or owing any debts
to the same, all the time of service upon them of a copy of the order of attachment and notice as provided in the last
preceding section, shall be liable to the applicant for the amount of such credits, debts or other property, until the
attachment be discharged, or any judgment recovered by him be satisfied, unless such property be delivered or
transferred, or such debts be paid, to the clerk, sheriff or other proper officer of the court issuing the attachment.
Garnishment is considered as a specie of attachment for reaching credits belonging to the judgment debtor and
owing to him from a stranger to the litigation. Under the above-cited rule, the garnishee [the third person] is
obliged to deliver the credits, etc. to the proper officer issuing the writ and "the law exempts from liability the
person having in his possession or under his control any credits or other personal property belonging to the
defendant, ..., if such property be delivered or transferred, ..., to the clerk, sheriff, or other officer of the court in
which the action is pending. [3 Moran, Comments on the Rules of Court 34 (1970 ed.)]
Applying the foregoing to the case at bar, MERALCO, as garnishee, after having been judicially compelled to pay the
amount of the judgment represented by funds in its possession belonging to the judgment debtor or NPC, should be
released from all responsibilities over such amount after delivery thereof to the sheriff. The reason for the rule is
self-evident. To expose garnishees to risks for obeying court orders and processes would only undermine the
administration of justice. [Emphasis supplied.]
The aforequoted ruling thus bolsters RCBC's stand that its immediate compliance with the lower court's order
should not have been met with the harsh penalty of joint and several liability. Nor can its liability to reimburse
PVTA of the amount delivered in check be premised upon the subsequent declaration of nullity of the order of
delivery. As correctly pointed out by the petitioner:
xxx xxx xxx
That the respondent Judge, after his Order was enforced, saw fit to recall said Order and decree its nullity, should
not prejudice one who dutifully abided by it, the presumption being that judicial orders are valid and issued in the
regular performance of the duties of the Court" [Section 5(m) Rule 131, Revised Rules of Court]. This should
operate with greater force in relation to the herein petitioner which, not being a party in the case, was just called
upon to perform an act in accordance with a judicial flat. A contrary view will invite disrespect for the majesty of
the law and induce reluctance in complying with judicial orders out of fear that said orders might be subsequently
invalidated and thereby expose one to suffer some penalty or prejudice for obeying the same. And this is what will
happen were the controversial orders to be sustained. We need not underscore the danger of this as a precedent.
xxx xxx xxx
[ Brief for the Petitioner, Rollo, p. 212; Emphasis supplied.]
From the foregoing, it may be concluded that the charge of breach of trust and/or dereliction of duty as well as lack
of prudence in effecting the immediate payment of the garnished amount is totally unfounded. Upon receipt of the
Notice of Garnishment, RCBC duly informed PVTA thereof to enable the latter to take the necessary steps for its
protection. However, right on the very next day after its receipt of such notice, RCBC was already served with the
Order requiring delivery of the garnished amount. Confronted as it was with a mandatory directive, disobedience
to which exposed it to a contempt order, it had no choice but to comply.
The respondent Judge nevertheless held that the liability of RCBC for the reimbursement of the garnished amount
is predicated on the ruling of the Supreme Court in the case of Commissioner of Public Highways v. Hon. San
Diego[G.R. No. L-30098, February 18, 1970, 31 SCRA 616] which he found practically on all fours with the case at
bar.
The Court disagrees.
The said case which reiterated the rule in Republic v. Palacio [G.R. No. L-20322, May 29, 1968, 23 SCRA 899] that
government funds and properties may not be seized under writs of execution or garnishment to satisfy such
judgment is definitely distinguishable from the case at bar.
In the Commissioner of Public Highways case [supra], the bank which precipitately allowed the garnishment and
delivery of the funds failed to inform its depositor thereof, charged as it was with knowledge of the nullity of the
writ of execution and notice of garnishment against government funds. In the aforementioned case, the funds
involved belonged to the Bureau of Public Highways, which being an arm of the executive branch of the
government, has no personality of its own separate from the National Government. The funds involved
were government funds covered by the rule on exemption from execution.
This brings us to the first issue raised by the petitioner: Are the PVTA funds public funds exempt from
garnishment? The Court holds that they are not.
Republic Act No. 2265 created the PVTA as an ordinary corporation with all the attributes of a corporate entity
subject to the provisions of the Corporation Law. Hence, it possesses the power "to sue and be sued" and "to
acquire and hold such assets and incur such liabilities resulting directly from operations authorized by the
provisions of this Act or as essential to the proper conduct of such operations." [Section 3, Republic Act No. 2265.]
Among the specific powers vested in the PVTA are: 1) to buy Virginia tobacco grown in the Philippines for resale to
local bona fide tobacco manufacturers and leaf tobacco dealers [Section 4(b), R.A. No. 2265]; 2) to contracts of any
kind as may be necessary or incidental to the attainment of its purpose with any person, firm or corporation, with
the Government of the Philippines or with any foreign government, subject to existing laws [Section 4(h), R.A. No.
22651; and 3) generally, to exercise all the powers of a corporation under the Corporation Law, insofar as they are
not inconsistent with the provisions of this Act [Section 4(k), R.A. No. 2265.]
From the foregoing, it is clear that PVTA has been endowed with a personality distinct and separate from the
government which owns and controls it. Accordingly, this Court has heretofore declared that the funds of the PVTA
can be garnished since "funds of public corporation which can sue and be sued were not exempt from
garnishment" [Philippine National Bank v. Pabalan, G.R. No. L-33112, June 15, 1978, 83 SCRA 595, 598.]
In National Shipyards and Steel Corp. v. CIR [G.R. No. L-17874, August 31, 1964, 8 SCRA 781], this Court held that
the allegation to the effect that the funds of the NASSCO are public funds of the government and that as such, the
same may not be garnished, attached or levied upon is untenable for, as a government-owned or controlled
corporation, it has a personality of its own, distinct and separate from that of the government. This court has
likewise ruled that other govemment-owned and controlled corporations like National Coal Company, the National
Waterworks and Sewerage Authority (NAWASA), the National Coconut Corporation (NACOCO) the National Rice
and Corn Corporation (NARIC) and the Price Stabilization Council (PRISCO) which possess attributes similar to
those of the PVTA are clothed with personalities of their own, separate and distinct from that of the government
[National Coal Company v. Collector of Internal Revenue, 46 Phil. 583 (1924); Bacani and Matoto v. National
Coconut Corporation et al., 100 Phil. 471 (1956); Reotan v. National Rice & Corn Corporation, G.R. No. L-16223,
February 27, 1962, 4 SCRA 418.] The rationale in vesting it with a separate personality is not difficult to find. It is
well-settled that when the government enters into commercial business, it abandons its sovereign capacity and is
to be treated like any other corporation [Manila Hotel Employees' Association v. Manila Hotel Co. and CIR, 73 Phil.
734 (1941).]
Accordingly, as emphatically expressed by this Court in a 1978 decision, "garnishment 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" inasmuch as "by engaging in a particular business thru the instrumentality of a corporation, the
government divests itself pro hac vice of its sovereign character, so as to render the corporation subject to the rules
of law governing private corporations" [Philippine National Bank v. CIR, G.R No. L-32667, January 31, 1978, 81
SCRA 314, 319.]
Furthermore, in the case of PVTA, the law has expressly allowed it funds to answer for various obligations,
including the one sought to be enforced by plaintiff BADOC in this case (i.e. for unpaid deliveries of tobacco).
Republic Act No. 4155, which discounted the erstwhile support given by the Central Bank to PVTA, established in
lieu thereof a "Tobacco Fund" to be collected from the proceeds of fifty per centum of the tariff or taxes of imported
leaf tobacco and also fifty per centum of the specific taxes on locally manufactured Virginia type cigarettes.
Section 5 of Republic Act No. 4155 provides that this fund shall be expended for the support or payment of:
1. Indebtedness of the Philippine Virginia Tobacco Administration and the former Agricultural Credit and
Cooperative Financing Administration to FACOMAS and farmers and planters regarding Virginia tobacco
transactions in previous years;
2. Indebtedness of the Philippine Virginia Tobacco Administration and the former Agricultural Credit and
Cooperative Financing Administration to the Central Bank in gradual amounts regarding Virginia tobacco
transactions in previous years;
3. Continuation of the Philippine Virginia Tobacco Administration support and subsidy operations including the
purchase of locally grown and produced Virginia leaf tobacco, at the present support and subsidy prices, its
procurement, redrying, handling, warehousing and disposal thereof, and the redrying plants trading within the
purview of their contracts;
4. Operational, office and field expenses, and the establishment of the Tobacco Research and Grading Institute.
[Emphasis supplied.]
Inasmuch as the Tobacco Fund, a special fund, was by law, earmarked specifically to answer obligations incurred
by PVTA in connection with its proprietary and commercial operations authorized under the law, it follows that
said funds may be proceeded against by ordinary judicial processes such as execution and garnishment. If such
funds cannot be executed upon or garnished pursuant to a judgment sustaining the liability of the PVTA to answer
for its obligations, then the purpose of the law in creating the PVTA would be defeated. For it was declared to be a
national policy, with respect to the local Virginia tobacco industry, to encourage the production of local Virginia
tobacco of the qualities needed and in quantities marketable in both domestic and foreign markets, to establish this
industry on an efficient and economic basis, and to create a climate conducive to local cigarette manufacture of the
qualities desired by the consuming public, blending imported and native Virginia leaf tobacco to improve the
quality of locally manufactured cigarettes [Section 1, Republic Act No. 4155.]
The Commissioner of Public Highways case is thus distinguishable from the case at bar. In said case, the Philippine
National Bank (PNB) as custodian of funds belonging to the Bureau of Public Highways, an agency of the
government, was chargeable with knowledge of the exemption of such government funds from execution and
garnishment pursuant to the elementary precept that public funds cannot be disbursed without the appropriation
required by law. On the other hand, the same cannot hold true for RCBC as the funds entrusted to its custody,
which belong to a public corporation, are in the nature of private funds insofar as their susceptibility to
garnishment is concerned. Hence, RCBC cannot be charged with lack of prudence for immediately complying with
the order to deliver the garnished amount. Since the funds in its custody are precisely meant for the payment of
lawfully-incurred obligations, RCBC cannot rightfully resist a court order to enforce payment of such obligations.
That such court order subsequently turned out to have been erroneously issued should not operate to the
detriment of one who complied with its clear order.
Finally, it is contended that RCBC was bound to inquire into the legality and propriety of the Writ of Execution and
Notice of Garnishment issued against the funds of the PVTA deposited with said bank. But the bank was in no
position to question the legality of the garnishment since it was not even a party to the case. As correctly pointed
out by the petitioner, it had neither the personality nor the interest to assail or controvert the orders of respondent
Judge. It had no choice but to obey the same inasmuch as it had no standing at all to impugn the validity of the
partial judgment rendered in favor of the plaintiff or of the processes issued in execution of such judgment.
RCBC cannot therefore be compelled to make restitution solidarily with the plaintiff BADOC. Plaintiff BADOC alone
was responsible for the issuance of the Writ of Execution and Order of Payment and so, the plaintiff alone should
bear the consequences of a subsequent annulment of such court orders; hence, only the plaintiff can be ordered to
restore the account of the PVTA.
WHEREFORE, the petition is hereby granted and the petitioner is ABSOLVED from any liability to respondent PVTA
for reimbursement of the funds garnished. The questioned Order of the respondent Judge ordering the petitioner,
jointly and severally with BADOC, to restore the account of PVTA are modified accordingly.
SO ORDERED.
Case No. 15

G.R. Nos. 89898-99 October 1, 1990


MUNICIPALITY OF MAKATI, petitioner,
vs.
THE HONORABLE COURT OF APPEALS, HON. SALVADOR P. DE GUZMAN, JR., as Judge RTC of Makati, Branch
CXLII ADMIRAL FINANCE CREDITORS CONSORTIUM, INC., and SHERIFF SILVINO R. PASTRANA, respondents.
Defante & Elegado for petitioner.
Roberto B. Lugue for private respondent Admiral Finance Creditors' Consortium, Inc.
RESOLUTION

CORTS, J.:
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, Inc., Home Building System & Realty
Corporation and one Arceli P. Jo, involving a parcel of land and improvements thereon located at Mayapis St., San
Antonio Village, Makati and registered in the name of Arceli P. Jo under TCT No. S-5499.
It appears that the action for eminent domain was filed on May 20, 1986, docketed as Civil Case No. 13699.
Attached to petitioner's complaint was a certification that a bank account (Account No. S/A 265-537154-3) had
been opened with the PNB Buendia Branch under petitioner's name containing the sum of P417,510.00, made
pursuant to the provisions of Pres. Decree No. 42. After due hearing where the parties presented their respective
appraisal reports regarding the value of the property, respondent RTC judge rendered a decision on June 4, 1987,
fixing the appraised value of the property at P5,291,666.00, and ordering petitioner to pay this amount minus the
advanced payment of P338,160.00 which was earlier released to private respondent.
After this decision became final and executory, private respondent moved for the issuance of a writ of execution.
This motion was granted by respondent RTC judge. After issuance of the writ of execution, a Notice of Garnishment
dated January 14, 1988 was served by respondent sheriff Silvino R. Pastrana upon the manager of the PNB Buendia
Branch. However, respondent sheriff was informed that a "hold code" was placed on the account of petitioner. As a
result of this, private respondent filed a motion dated January 27, 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, 1987.
Petitioner filed a motion to lift the garnishment, 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. Private
respondent filed its opposition to the motion.
Pending resolution of the above motions, petitioner filed on July 20, 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, Inc. (PSB) Respondent RTC judge issued
an order requiring PSB to make available the documents pertaining to its transactions over the subject property,
and the PNB Buendia Branch to reveal the amount in petitioner's account which was garnished by respondent
sheriff. In compliance with this order, 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, 1987.
After several conferences, PSB and private respondent entered into a compromise agreement whereby they agreed
to divide between themselves the compensation due from the expropriation proceedings.
Respondent trial judge subsequently issued an order dated September 8, 1988 which: (1) approved the
compromise agreement; (2) ordered PNB Buendia Branch to immediately release to PSB the sum of P4,953,506.45
which corresponds to the balance of the appraised value of the subject property under the RTC decision dated June
4, 1987, from the garnished account of petitioner; and, (3) ordered PSB and private respondent to execute the
necessary deed of conveyance over the subject property in favor of petitioner. Petitioner's motion to lift the
garnishment was denied.
Petitioner filed a motion for reconsideration, which was duly opposed by private respondent. On the other hand,
for failure of the manager of the PNB Buendia Branch to comply with the order dated September 8, 1988, 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, the general manager of the PNB Buendia
Branch, a Mr. Antonio Bautista, 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. For its part, petitioner contended that
its funds at the PNB Buendia Branch could neither be garnished nor levied upon execution, for to do so would
result in the disbursement of public funds without the proper appropriation required under the law, citing the case
of Republic of the Philippines v. Palacio [G.R. No. L-20322, May 29, 1968, 23 SCRA 899].
Respondent trial judge issued an order dated December 21, 1988 denying petitioner's motion for reconsideration
on the ground that the doctrine enunciated in Republic v. Palacio did not apply to the case because petitioner's PNB
Account No. S/A 265-537154-3 was an account specifically opened for the expropriation proceedings of the subject
property pursuant to Pres. Decree No. 42. Respondent RTC judge likewise declared Mr. Antonio Bautista guilty of
contempt of court for his inexcusable refusal to obey the order dated September 8, 1988, and thus ordered his
arrest and detention until his compliance with the said order.
Petitioner and the bank manager of PNB Buendia Branch then filed separate petitions for certiorari with the Court
of Appeals, which were eventually consolidated. In a decision promulgated on June 28, 1989, the Court of Appeals
dismissed both petitions for lack of merit, sustained the jurisdiction of respondent RTC judge over the funds
contained in petitioner's PNB Account No. 265-537154-3, and affirmed his authority to levy on such funds.
Its motion for reconsideration having been denied by the Court of Appeals, petitioner now files the present petition
for review with prayer for preliminary injunction.
On November 20, 1989, the Court resolved to issue a temporary restraining order enjoining respondent RTC judge,
respondent sheriff, and their representatives, from enforcing and/or carrying out the RTC order dated December
21, 1988 and the writ of garnishment issued pursuant thereto. Private respondent then filed its comment to the
petition, while petitioner filed its reply.
Petitioner not only reiterates the arguments adduced in its petition before the Court of Appeals, but also alleges for
the first time that it has actually two accounts with the PNB Buendia Branch, to wit:
xxx xxx xxx
(1) Account No. S/A 265-537154-3 exclusively for the expropriation of the subject property, with an
outstanding balance of P99,743.94.
(2) Account No. S/A 263-530850-7 for statutory obligations and other purposes of the municipal government,
with a balance of P170,098,421.72, as of July 12, 1989.
xxx xxx xxx
[Petition, pp. 6-7; Rollo, pp. 11-12.]
Because the petitioner has belatedly alleged only in this Court the existence of two bank accounts, 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, and strengthening its reliance on the
doctrine that public funds are exempted from garnishment or execution as enunciated in Republic v.
Palacio [supra.] At any rate, the Court will give petitioner the benefit of the doubt, and proceed to resolve the
principal issues presented based on the factual circumstances thus alleged by petitioner.
Admitting that its PNB Account No. S/A 265-537154-3 was specifically opened for expropriation proceedings it
had initiated over the subject property, petitioner poses no objection to the garnishment or the levy under
execution of the funds deposited therein amounting to P99,743.94. However, it is petitioner's main contention that
inasmuch as the assailed orders of respondent RTC judge involved the net amount of P4,965,506.45, the funds
garnished by respondent sheriff in excess of P99,743.94, 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.
There is merit in this contention. The funds deposited in the second PNB Account No. S/A 263-530850-7 are public
funds of the municipal government. In this jurisdiction, well-settled is the rule that public funds are not subject to
levy and execution, unless otherwise provided for by statute [Republic v. Palacio, supra.; The Commissioner of
Public Highways v. San Diego, G.R. No. L-30098, February 18, 1970, 31 SCRA 616]. More particularly, the properties
of a municipality, whether real or personal, which are necessary for public use cannot be attached and sold at
execution sale to satisfy a money judgment against the municipality. Municipal revenues derived from taxes,
licenses and market fees, and which are intended primarily and exclusively for the purpose of financing the
governmental activities and functions of the municipality, are exempt from execution [See Viuda De Tan Toco v.
The Municipal Council of Iloilo, 49 Phil. 52 (1926): The Municipality of Paoay, Ilocos Norte v. Manaois, 86 Phil. 629
(1950); Municipality of San Miguel, Bulacan v. Fernandez, G.R. No. 61744, June 25, 1984, 130 SCRA 56]. The
foregoing rule finds application in the case at bar. 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, 1987, less the sum of P99,743.94 deposited in Account No. S/A 265-537154-3, no levy
under execution may be validly effected on the public funds of petitioner deposited in Account No. S/A 263-
530850-7.
Nevertheless, this is not to say that private respondent and PSB are left with no legal recourse. Where a
municipality fails or refuses, without justifiable reason, to effect payment of a final money judgment rendered
against it, the claimant may avail of the remedy of mandamus in order to compel the enactment and approval of the
necessary appropriation ordinance, and the corresponding disbursement of municipal funds therefor [See Viuda
De Tan Toco v. The Municipal Council of Iloilo, supra; Baldivia v. Lota, 107 Phil. 1099 (1960); Yuviengco v.
Gonzales, 108 Phil. 247 (1960)].
In the case at bar, the validity of the RTC decision dated June 4, 1987 is not disputed by petitioner. No appeal was
taken therefrom. For three years now, petitioner has enjoyed possession and use of the subject property
notwithstanding its inexcusable failure to comply with its legal obligation to pay just compensation. 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 1986-1987. This Court will not condone petitioner's blatant refusal to settle its legal obligation arising
from expropriation proceedings it had in fact initiated. It cannot be over-emphasized that, within the context of the
State's inherent power of eminent domain,
. . . [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. 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 [Cosculluela v. The Honorable Court of Appeals, G.R. No. 77765, August 15, 1988, 164 SCRA
393, 400. See also Provincial Government of Sorsogon v. Vda. de Villaroya, G.R. No. 64037, August 27, 1987, 153
SCRA 291].
The State's power of eminent domain should be exercised within the bounds of fair play and justice. In the case at
bar, considering that valuable property has been taken, the compensation to be paid fixed and the municipality is
in full possession and utilizing the property for public purpose, for three (3) years, the Court finds that the
municipality has had more than reasonable time to pay full compensation.
WHEREFORE, the Court Resolved to ORDER petitioner Municipality of Makati to immediately pay Philippine
Savings Bank, Inc. and private respondent the amount of P4,953,506.45. Petitioner is hereby required to submit to
this Court a report of its compliance with the foregoing order within a non-extendible period of SIXTY (60) DAYS
from the date of receipt of this resolution.
The order of respondent RTC judge dated December 21, 1988, which was rendered in Civil Case No. 13699, is SET
ASIDE and the temporary restraining order issued by the Court on November 20, 1989 is MADE PERMANENT.
SO ORDERED.
Case No. 16

G.R. No. L-55963 December 1, 1989


SPOUSES JOSE FONTANILLA AND VIRGINIA FONTANILLA, petitioners,
vs.
HONORABLE INOCENCIO D. MALIAMAN and NATIONAL IRRIGATION ADMINISTRATION, respondents.
G.R. No. L-61045 December 1, 1989
NATIONAL IRRIGATION ADMINISTRATION, appellant,
vs.
SPOUSES JOSE FONTANILLA and VIRGINIA FONTANILLA, appellees.
Cecilio V. Suarez, Jr. for Spouses Fontanilla.
Felicisimo C. Villaflor for NIA.

PARAS, J.:
In G.R. No. L-55963, the petition for review on certiorari seeks the affirmance of the decision dated March 20, 1980
of the then Court of First Instance of Nueva Ecija, Branch VIII, at San Jose City and its modification with respect to
the denial of petitioner's claim for moral and exemplary damages and attorneys fees.
In G.R. No. 61045, respondent National Irrigation Administration seeks the reversal of the aforesaid decision of the
lower court. The original appeal of this case before the Court of Appeals was certified to this Court and in the
resolution of July 7, 1982, it was docketed with the aforecited number. And in the resolution of April 3, this case
was consolidated with G.R. No. 55963.
It appears that on August 21, 1976 at about 6:30 P.M., a pickup owned and operated by respondent National
Irrigation Administration, a government agency bearing Plate No. IN-651, then driven officially by Hugo Garcia, an
employee of said agency as its regular driver, bumped a bicycle ridden by Francisco Fontanilla, son of herein
petitioners, and Restituto Deligo, at Maasin, San Jose City along the Maharlika Highway. As a result of the impact,
Francisco Fontanilla and Restituto Deligo were injured and brought to the San Jose City Emergency Hospital for
treatment. Fontanilla was later transferred to the Cabanatuan Provincial Hospital where he died.
Garcia was then a regular driver of respondent National Irrigation Administration who, at the time of the accident,
was a licensed professional driver and who qualified for employment as such regular driver of respondent after
having passed the written and oral examinations on traffic rules and maintenance of vehicles given by National
Irrigation Administration authorities.
The within petition is thus an off-shot of the action (Civil Case No. SJC-56) instituted by petitioners-spouses on
April 17, 1978 against respondent NIA before the then Court of First Instance of Nueva Ecija, Branch VIII at San
Jose City, for damages in connection with the death of their son resulting from the aforestated accident.
After trial, the trial court rendered judgment on March 20, 1980 which directed respondent National Irrigation
Administration to pay damages (death benefits) and actual expenses to petitioners. The dispositive portion of the
decision reads thus:
. . . . . Judgment is here rendered ordering the defendant National Irrigation Administration to pay to the heirs of
the deceased P12,000.00 for the death of Francisco Fontanilla; P3,389.00 which the parents of the deceased had
spent for the hospitalization and burial of the deceased Francisco Fontanilla; and to pay the costs. (Brief for the
petitioners spouses Fontanilla, p. 4; Rollo, p. 132)
Respondent National Irrigation Administration filed on April 21, 1980, its motion for reconsideration of the
aforesaid decision which respondent trial court denied in its Order of June 13, 1980. Respondent National
Irrigation Administration thus appealed said decision to the Court of Appeals (C.A.-G.R. No. 67237- R) where it filed
its brief for appellant in support of its position.
Instead of filing the required brief in the aforecited Court of Appeals case, petitioners filed the instant petition with
this Court.
The sole issue for the resolution of the Court is: Whether or not the award of moral damages, exemplary damages
and attorney's fees is legally proper in a complaint for damages based on quasi-delict which resulted in the death
of the son of herein petitioners.
Petitioners allege:
1. The award of moral damages is specifically allowable. under paragraph 3 of Article 2206 of the New Civil Code
which provides that the spouse, legitimate and illegitimate descendants and ascendants of the deceased may
demand moral damages for mental anguish by reason of the death of the deceased. Should moral damages be
granted, the award should be made to each of petitioners-spouses individually and in varying amounts depending
upon proof of mental and depth of intensity of the same, which should not be less than P50,000.00 for each of
them.
2. The decision of the trial court had made an impression that respondent National Irrigation Administration acted
with gross negligence because of the accident and the subsequent failure of the National Irrigation Administration
personnel including the driver to stop in order to give assistance to the, victims. Thus, by reason of the gross
negligence of respondent, petitioners become entitled to exemplary damages under Arts. 2231 and 2229 of the
New Civil Code.
3. Petitioners are entitled to an award of attorney's fees, the amount of which (20%) had been sufficiently
established in the hearing of May 23, 1979.
4. This petition has been filed only for the purpose of reviewing the findings of the lower court upon which the
disallowance of moral damages, exemplary damages and attorney's fees was based and not for the purpose of
disturbing the other findings of fact and conclusions of law.
The Solicitor General, taking up the cudgels for public respondent National Irrigation Administration, contends
thus:
1. The filing of the instant petition is rot proper in view of the appeal taken by respondent National Irrigation
Administration to the Court of Appeals against the judgment sought to be reviewed. The focal issue raised in
respondent's appeal to the Court of Appeals involves the question as to whether or not the driver of the vehicle
that bumped the victims was negligent in his operation of said vehicle. It thus becomes necessary that before
petitioners' claim for moral and exemplary damages could be resolved, there should first be a finding of negligence
on the part of respondent's employee-driver. In this regard, the Solicitor General alleges that the trial court
decision does not categorically contain such finding.
2. The filing of the "Appearance and Urgent Motion For Leave to File Plaintiff-Appellee's Brief" dated December 28,
1981 by petitioners in the appeal (CA-G.R. No. 67237-R; and G. R. No.61045) of the respondent National Irrigation
Administration before the Court of Appeals, is an explicit admission of said petitioners that the herein petition, is
not proper. Inconsistent procedures are manifest because while petitioners question the findings of fact in the
Court of Appeals, they present only the questions of law before this Court which posture confirms their admission
of the facts.
3. The fact that the parties failed to agree on whether or not negligence caused the vehicular accident involves a
question of fact which petitioners should have brought to the Court of Appeals within the reglementary period.
Hence, the decision of the trial court has become final as to the petitioners and for this reason alone, the petition
should be dismissed.
4. Respondent Judge acted within his jurisdiction, sound discretion and in conformity with the law.
5. Respondents do not assail petitioners' claim to moral and exemplary damages by reason of the shock and
subsequent illness they suffered because of the death of their son. Respondent National Irrigation Administration,
however, avers that it cannot be held liable for the damages because it is an agency of the State performing
governmental functions and driver Hugo Garcia was a regular driver of the vehicle, not a special agent who was
performing a job or act foreign to his usual duties. Hence, the liability for the tortious act should. not be borne by
respondent government agency but by driver Garcia who should answer for the consequences of his act.
6. Even as the trial court touched on the failure or laxity of respondent National Irrigation Administration in
exercising due diligence in the selection and supervision of its employee, the matter of due diligence is not an issue
in this case since driver Garcia was not its special agent but a regular driver of the vehicle.
The sole legal question on whether or not petitioners may be entitled to an award of moral and exemplary
damages and attorney's fees can very well be answered with the application of Arts. 2176 and 2180 of theNew Civil
Code.
Art. 2176 thus provides:
Whoever by act omission causes damage to another, there being fault or negligence, is obliged to pay for damage
done. Such fault or negligence, if there is no pre-existing cotractual relation between the parties, is called a quasi-
delict and is governed by the provisions of this Chapter
Paragraphs 5 and 6 of Art. 21 80 read as follows:
Employers shall be liable for the damages caused by their employees and household helpers acting within the
scope of their assigned tasks, even the though the former are not engaged in any business or industry.
The State is responsible in like manner when it acts through a special agent.; but not when the damage has been
caused by the official to whom the task done properly pertains, in which case what is provided in Art. 2176 shall be
applicable.
The liability of the State has two aspects. namely:
1. Its public or governmental aspects where it is liable for the tortious acts of special agents only.
2. Its private or business aspects (as when it engages in private enterprises) where it becomes liable as an ordinary
employer. (p. 961, Civil Code of the Philippines; Annotated, Paras; 1986 Ed. ).
In this jurisdiction, the State assumes a limited liability for the damage caused by the tortious acts or conduct of its
special agent.
Under the aforequoted paragrah 6 of Art. 2180, the State has voluntarily assumed liability for acts done through
special agents. The State's agent, if a public official, must not only be specially commissioned to do a particular task
but that such task must be foreign to said official's usual governmental functions. If the State's agent is not a public
official, and is commissioned to perform non-governmental functions, then the State assumes the role of an
ordinary employer and will be held liable as such for its agent's tort. Where the government commissions a private
individual for a special governmental task, it is acting through a special agent within the meaning of the provision.
(Torts and Damages, Sangco, p. 347, 1984 Ed.)
Certain functions and activities, which can be performed only by the government, are more or less generally agreed
to be "governmental" in character, and so the State is immune from tort liability. On the other hand, a service which
might as well be provided by a private corporation, and particularly when it collects revenues from it, the function
is considered a "proprietary" one, as to which there may be liability for the torts of agents within the scope of their
employment.
The National Irrigation Administration is an agency of the government exercising proprietary functions, by express
provision of Rep. Act No. 3601. Section 1 of said Act provides:
Section 1. Name and domicile.-A body corporate is hereby created which shall be known as the National Irrigation
Administration, hereinafter called the NIA for short, which shall be organized immediately after the approval of
this Act. It shall have its principal seat of business in the City of Manila and shall have representatives in all
provinces for the proper conduct of its business.
Section 2 of said law spells out some of the NIA's proprietary functions. Thus-
Sec. 2. Powers and objectives.-The NIA shall have the following powers and objectives:
(a) x x x x x x x x x x x x x x x x x x
(b) x x x x x x x x x x x x x x x x x x
(c) To collect from the users of each irrigation system constructed by it such fees as may be necessary to finance
the continuous operation of the system and reimburse within a certain period not less than twenty-five years cost
of construction thereof; and
(d) To do all such other tthings and to transact all such business as are directly or indirectly necessary, incidental
or conducive to the attainment of the above objectives.
Indubitably, the NIA is a government corporation with juridical personality and not a mere agency of the
government. Since it is a corporate body performing non-governmental functions, it now becomes liable for the
damage caused by the accident resulting from the tortious act of its driver-employee. In this particular case, the
NIA assumes the responsibility of an ordinary employer and as such, it becomes answerable for damages.
This assumption of liability, however, is predicated upon the existence of negligence on the part of respondent NIA.
The negligence referred to here is the negligence of supervision.
At this juncture, the matter of due diligence on the part of respondent NIA becomes a crucial issue in determining
its liability since it has been established that respondent is a government agency performing proprietary functions
and as such, it assumes the posture of an ordinary employer which, under Par. 5 of Art. 2180, is responsible for the
damages caused by its employees provided that it has failed to observe or exercise due diligence in the selection
and supervision of the driver.
It will be noted from the assailed decision of the trial court that "as a result of the impact, Francisco Fontanilla
was thrown to a distance 50 meters away from the point of impact while Restituto Deligo was thrown a little bit
further away. The impact took place almost at the edge of the cemented portion of the road." (Emphasis supplied,)
[page 26, Rollo]
The lower court further declared that "a speeding vehicle coming in contact with a person causes force and impact
upon the vehicle that anyone in the vehicle cannot fail to notice. As a matter of fact, the impact was so strong as
shown by the fact that the vehicle suffered dents on the right side of the radiator guard, the hood, the fender and a
crack on the radiator as shown by the investigation report (Exhibit "E"). (Emphasis supplied) [page 29, Rollo]
It should be emphasized that the accident happened along the Maharlika National Road within the city limits of San
Jose City, an urban area. Considering the fact that the victim was thrown 50 meters away from the point of impact,
there is a strong indication that driver Garcia was driving at a high speed. This is confirmed by the fact that the
pick-up suffered substantial and heavy damage as above-described and the fact that the NIA group was then "in a
hurry to reach the campsite as early as possible", as shown by their not stopping to find out what they bumped as
would have been their normal and initial reaction.
Evidently, there was negligence in the supervision of the driver for the reason that they were travelling at a high
speed within the city limits and yet the supervisor of the group, Ely Salonga, failed to caution and make the driver
observe the proper and allowed speed limit within the city. Under the situation, such negligence is further
aggravated by their desire to reach their destination without even checking whether or not the vehicle suffered
damage from the object it bumped, thus showing imprudence and reckelessness on the part of both the driver and
the supervisor in the group.
Significantly, this Court has ruled that even if the employer can prove the diligence in the selection and supervision
(the latter aspect has not been established herein) of the employee, still if he ratifies the wrongful acts, or take no
step to avert further damage, the employer would still be liable. (Maxion vs. Manila Railroad Co., 44 Phil. 597).
Thus, too, in the case of Vda. de Bonifacio vs. B.L.T. Bus Co. (L-26810, August 31, 1970, 34 SCRA 618), this Court
held that a driver should be especially watchful in anticipation of others who may be using the highway, and his
failure to keep a proper look out for reasons and objects in the line to be traversed constitutes negligence.
Considering the foregoing, respondent NIA is hereby directed to pay herein petitioners-spouses the amounts of
P12,000.00 for the death of Francisco Fontanilla; P3,389.00 for hospitalization and burial expenses of the
aforenamed deceased; P30,000.00 as moral damages; P8,000.00 as exemplary damages and attorney's fees of 20%
of the total award.
SO ORDERED.
Case No. 17

THE PROVINCE OF NORTH COTABATO, duly represented by G.R. No. 183591


GOVERNOR JESUS SACDALAN and/or VICE-GOVERNOR Present:
EMMANUEL PIOL, for and in his own behalf,
Petitioners, PUNO, C.J.,
QUISUMBING,
- versus - YNARES-SANTIAGO,
CARPIO,
AUSTRIA-MARTINEZ,
THE GOVERNMENT OF THE REPUBLIC OF THE PHILIPPINES CORONA,
PEACE PANEL ON ANCESTRAL DOMAIN (GRP), represented by CARPIO MORALES,
SEC. RODOLFO GARCIA, ATTY. LEAH ARMAMENTO, ATTY. AZCUNA,
SEDFREY CANDELARIA, MARK RYAN SULLIVAN and/or GEN. TINGA,
HERMOGENES ESPERON, JR., the latter in his capacity as the CHICO-NAZARIO,
present and duly-appointed Presidential Adviser on the Peace VELASCO, JR.,
Process (OPAPP) or the so-called Office of the Presidential NACHURA,
Adviser on the Peace Process, REYES,
Respondents. LEONARDO-DE CASTRO, &
x--------------------------------------------x BRION, JJ.
CITY GOVERNMENT OF ZAMBOANGA, as represented by HON. Promulgated:
CELSO L. LOBREGAT, City Mayor of Zamboanga, and in his
personal capacity as resident of the City of Zamboanga, Rep. MA. October 14, 2008
ISABELLE G. CLIMACO, District 1, and Rep. ERICO BASILIO A.
FABIAN, District 2, City of Zamboanga,
Petitioners,

- versus -

G.R. No. 183752


THE GOVERNMENT OF THE REPUBLIC OF THE PHILIPPINES
PEACE NEGOTIATING PANEL (GRP), as represented by RODOLFO
C. GARCIA, LEAH ARMAMENTO, SEDFREY CANDELARIA, MARK
RYAN SULLIVAN and HERMOGENES ESPERON, in his capacity as
the Presidential Adviser on Peace Process,
Respondents.
x--------------------------------------------x
THE CITY OF ILIGAN, duly represented by CITY MAYOR
LAWRENCE LLUCH CRUZ,
Petitioner,

- versus

THE GOVERNMENT OF THE REPUBLIC OF THE PHILIPPINES


PEACE PANEL ON ANCESTRAL DOMAIN (GRP), represented by
SEC. RODOLFO GARCIA, ATTY. LEAH ARMAMENTO, ATTY.
SEDFREY CANDELARIA, MARK RYAN SULLIVAN; GEN.
HERMOGENES ESPERON, JR., in his capacity as the present and
duly appointed Presidential Adviser on the Peace Process; and/or
SEC. EDUARDO ERMITA, in his capacity as Executive Secretary.
Respondents.
x--------------------------------------------x
THE PROVINCIAL GOVERNMENT OF ZAMBOANGA DEL NORTE, as
represented by HON. ROLANDO E. YEBES, in his capacity as
Provincial Governor, HON. FRANCIS H. OLVIS, in his capacity as
Vice-Governor and Presiding Officer of the Sangguniang
Panlalawigan, HON. CECILIA JALOSJOS CARREON, G.R. No. 183893
Congresswoman, 1stCongressional District, HON. CESAR G.
JALOSJOS, Congressman, 3rd Congressional District, and Members
of the Sangguniang Panlalawigan of the Province of Zamboanga
del Norte, namely, HON. SETH FREDERICK P. JALOSJOS, HON.
FERNANDO R. CABIGON, JR., HON. ULDARICO M. MEJORADA II,
HON. EDIONAR M. ZAMORAS, HON. EDGAR J. BAGUIO, HON.
CEDRIC L. ADRIATICO, HON. FELIXBERTO C. BOLANDO, HON.
JOSEPH BRENDO C. AJERO, HON. NORBIDEIRI B. EDDING,
HON. ANECITO S. DARUNDAY, HON. ANGELICA J. CARREON and
HON. LUZVIMINDA E. TORRINO,
Petitioners,

- versus -

THE GOVERNMENT OF THE REPUBLIC OF THE PHILIPPINES


PEACE NEGOTIATING PANEL [GRP], as represented by HON.
RODOLFO C. GARCIA and HON. HERMOGENES ESPERON, in his
capacity as the Presidential Adviser of Peace Process,
Respondents.
x--------------------------------------------x
ERNESTO M. MACEDA, JEJOMAR C. BINAY, and AQUILINO L.
PIMENTEL III,
Petitioners,
G.R. No. 183951
- versus -

THE GOVERNMENT OF THE REPUBLIC OF THE PHILIPPINES


PEACE NEGOTIATING PANEL, represented by its Chairman
RODOLFO C. GARCIA, and the MORO ISLAMIC LIBERATION FRONT
PEACE NEGOTIATING PANEL, represented by its Chairman
MOHAGHER IQBAL,
Respondents.
x--------------------------------------------x
FRANKLIN M. DRILON and ADEL ABBAS TAMANO,
Petitioners-in-Intervention.
x--------------------------------------------x
SEN. MANUEL A. ROXAS,
Petitioners-in-Intervention.
x--------------------------------------------x
MUNICIPALITY OF LINAMON duly represented by its Municipal
Mayor NOEL N. DEANO,
Petitioners-in-Intervention,
x--------------------------------------------x
THE CITY OF ISABELA, BASILAN PROVINCE, represented by
MAYOR CHERRYLYN P. SANTOS-AKBAR,
Petitioners-in-Intervention.
x--------------------------------------------x
THE PROVINCE OF SULTAN KUDARAT, rep. by HON. SUHARTO T.
MANGUDADATU, in his capacity as Provincial Governor and a
resident of the Province of Sultan Kudarat,
Petitioner-in-Intervention.
x-------------------------------------------x

RUY ELIAS LOPEZ, for and in his own behalf and on behalf of
Indigenous Peoples in Mindanao Not Belonging to the MILF,
Petitioner-in-Intervention.
x--------------------------------------------x
CARLO B. GOMEZ, GERARDO S. DILIG, NESARIO G. AWAT,
JOSELITO C. ALISUAG and RICHALEX G. JAGMIS, as citizens and
residents of Palawan,
Petitioners-in-Intervention.
x--------------------------------------------x
MARINO RIDAO and KISIN BUXANI,
Petitioners-in-Intervention.
x--------------------------------------------x
MUSLIM LEGAL ASSISTANCE FOUNDATION, INC (MUSLAF),
Respondent-in-Intervention.
x--------------------------------------------x
MUSLIM MULTI-SECTORAL MOVEMENT FOR PEACE &
DEVELOPMENT (MMMPD),
Respondent-in-Intervention. G.R. No. 183962
x--------------------------------------------x

x - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x

DECISION

CARPIO MORALES, J.:

Subject of these consolidated cases is the extent of the powers of the President in pursuing the peace
process. While the facts surrounding this controversy center on the armed conflict in Mindanao between the
government and the Moro Islamic Liberation Front (MILF), the legal issue involved has a bearing on all areas in the
country where there has been a long-standing armed conflict. Yet again, the Court is tasked to perform a delicate
balancing act. It must uncompromisingly delineate the bounds within which the President may lawfully exercise
her discretion, but it must do so in strict adherence to the Constitution, lest its ruling unduly restricts the freedom
of action vested by that same Constitution in the Chief Executive precisely to enable her to pursue the peace
process effectively.
I. FACTUAL ANTECEDENTS OF THE PETITIONS

On August 5, 2008, the Government of the Republic of the Philippines (GRP) and the MILF, through the
Chairpersons of their respective peace negotiating panels, were scheduled to sign a Memorandum of Agreement on
the Ancestral Domain (MOA-AD) Aspect of the GRP-MILF Tripoli Agreement on Peace of 2001 in Kuala
Lumpur, Malaysia.

The MILF is a rebel group which was established in March 1984 when, under the leadership of the late Salamat
Hashim, it splintered from the Moro National Liberation Front (MNLF) then headed by Nur Misuari, on the ground,
among others, of what Salamat perceived to be the manipulation of the MNLF away from an Islamic basis towards
Marxist-Maoist orientations.[1]
The signing of the MOA-AD between the GRP and the MILF was not to materialize, however, for upon motion of
petitioners, specifically those who filed their cases before the scheduled signing of the MOA-AD, this Court issued a
Temporary Restraining Order enjoining the GRP from signing the same.

The MOA-AD was preceded by a long process of negotiation and the concluding of several prior agreements
between the two parties beginning in 1996, when the GRP-MILF peace negotiations began. On July 18, 1997, the
GRP and MILF Peace Panels signed the Agreement on General Cessation of Hostilities. The following year, they
signed the General Framework of Agreement of Intent on August 27, 1998.

The Solicitor General, who represents respondents, summarizes the MOA-AD by stating that the same contained,
among others, the commitment of the parties to pursue peace negotiations, protect and respect human rights,
negotiate with sincerity in the resolution and pacific settlement of the conflict, and refrain from the use of threat or
force to attain undue advantage while the peace negotiations on the substantive agenda are on-going.[2]

Early on, however, it was evident that there was not going to be any smooth sailing in the GRP-MILF peace
process. Towards the end of 1999 up to early 2000, the MILF attacked a number of municipalities in Central
Mindanao and, in March 2000, it took control of the town hall of Kauswagan, Lanao del Norte.[3] In response, then
President Joseph Estrada declared and carried out an all-out-war against the MILF.

When President Gloria Macapagal-Arroyo assumed office, the military offensive against the MILF was suspended
and the government sought a resumption of the peace talks.The MILF, according to a leading MILF member,
initially responded with deep reservation, but when President Arroyo asked the Government of Malaysia through
Prime Minister Mahathir Mohammad to help convince the MILF to return to the negotiating table, the MILF
convened its Central Committee to seriously discuss the matter and, eventually, decided to meet with the GRP.[4]

The parties met in Kuala Lumpur on March 24, 2001, with the talks being facilitated by the Malaysian government,
the parties signing on the same date the Agreement on the General Framework for the Resumption of Peace Talks
Between the GRP and the MILF. The MILF thereafter suspended all its military actions.[5]

Formal peace talks between the parties were held in Tripoli, Libya from June 20-22, 2001, the outcome of which
was the GRP-MILF Tripoli Agreement on Peace (Tripoli Agreement 2001) containing the basic principles and
agenda on the following aspects of the negotiation: Security Aspect, Rehabilitation Aspect, and Ancestral
DomainAspect. With regard to the Ancestral Domain Aspect, the parties in Tripoli Agreement 2001 simply agreed
that the same be discussed further by the Parties in their next meeting.

A second round of peace talks was held in Cyberjaya, Malaysia on August 5-7, 2001 which ended with the signing of
the Implementing Guidelines on the Security Aspect of the Tripoli Agreement 2001 leading to a ceasefire status
between the parties. This was followed by the Implementing Guidelines on the Humanitarian Rehabilitation and
Development Aspects of the Tripoli Agreement 2001, which was signed on May 7,
2002 at Putrajaya, Malaysia. Nonetheless, there were many incidence of violence between government forces and
the MILF from 2002 to 2003.

Meanwhile, then MILF Chairman Salamat Hashim passed away on July 13, 2003 and he was replaced by Al Haj
Murad, who was then the chief peace negotiator of the MILF.Murads position as chief peace negotiator was taken
over by Mohagher Iqbal.[6]

In 2005, several exploratory talks were held between the parties in Kuala Lumpur, eventually leading to the
crafting of the draft MOA-AD in its final form, which, as mentioned, was set to be signed last August 5, 2008.

II. STATEMENT OF THE PROCEEDINGS

Before the Court is what is perhaps the most contentious consensus ever embodied in an instrument the MOA-AD
which is assailed principally by the present petitions bearing docket numbers 183591, 183752, 183893, 183951
and 183962.
Commonly impleaded as respondents are the GRP Peace Panel on Ancestral Domain[7] and the Presidential Adviser
on the Peace Process (PAPP) Hermogenes Esperon, Jr.

On July 23, 2008, the Province of North Cotabato[8] and Vice-Governor Emmanuel Piol filed a petition, docketed
as G.R. No. 183591, for Mandamus and Prohibition with Prayer for the Issuance of Writ of Preliminary Injunction
and Temporary Restraining Order.[9] Invoking the right to information on matters of public concern, petitioners
seek to compel respondents to disclose and furnish them the complete and official copies of the MOA-AD including
its attachments, and to prohibit the slated signing of the MOA-AD, pending the disclosure of the contents of the
MOA-AD and the holding of a public consultation thereon. Supplementarily, petitioners pray that the MOA-AD be
declared unconstitutional.[10]

This initial petition was followed by another one, docketed as G.R. No. 183752, also for Mandamus and
Prohibition[11] filed by the City of Zamboanga,[12] Mayor Celso Lobregat, Rep. Ma. Isabelle Climaco and Rep. Erico
Basilio Fabian who likewise pray for similar injunctive reliefs. Petitioners herein moreover pray that the City
of Zamboangabe excluded from the Bangsamoro Homeland and/or Bangsamoro Juridical Entity and, in the
alternative, that the MOA-AD be declared null and void.

By Resolution of August 4, 2008, the Court issued a Temporary Restraining Order commanding and directing
public respondents and their agents to cease and desist from formally signing the MOA-AD.[13] The Court also
required the Solicitor General to submit to the Court and petitioners the official copy of the final draft of the MOA-
AD,[14]to which she complied.[15]

Meanwhile, the City of Iligan[16] filed a petition for Injunction and/or Declaratory Relief, docketed as G.R. No.
183893, praying that respondents be enjoined from signing the MOA-AD or, if the same had already been signed,
from implementing the same, and that the MOA-AD be declared unconstitutional. Petitioners herein additionally
implead Executive Secretary Eduardo Ermita as respondent.

The Province of Zamboanga del Norte,[17] Governor Rolando Yebes, Vice-Governor Francis Olvis, Rep. Cecilia
Jalosjos-Carreon, Rep. Cesar Jalosjos, and the members[18] of the Sangguniang Panlalawigan of Zamboanga del
Norte filed on August 15, 2008 a petition for Certiorari, Mandamus and Prohibition,[19] docketed as G.R. No.
183951. They pray, inter alia, that the MOA-AD be declared null and void and without operative effect, and that
respondents be enjoined from executing the MOA-AD.

On August 19, 2008, Ernesto Maceda, Jejomar Binay, and Aquilino Pimentel III filed a petition for
Prohibition,[20] docketed as G.R. No. 183962, praying for a judgment prohibiting and permanently enjoining
respondents from formally signing and executing the MOA-AD and or any other agreement derived therefrom or
similar thereto, and nullifying the MOA-AD for being unconstitutional and illegal. Petitioners herein additionally
implead as respondent the MILF Peace Negotiating Panel represented by its Chairman Mohagher Iqbal.
Various parties moved to intervene and were granted leave of court to file their petitions-/comments-in-
intervention. Petitioners-in-Intervention include Senator Manuel A. Roxas, former Senate President Franklin Drilon
and Atty. Adel Tamano, the City of Isabela[21] and Mayor Cherrylyn Santos-Akbar, the Province of Sultan
Kudarat[22] and Gov. Suharto Mangudadatu, the Municipality of Linamon in Lanao del Norte,[23] Ruy Elias Lopez of
Davao City and of the Bagobo tribe, Sangguniang Panlungsod member Marino Ridao and businessman Kisin Buxani,
both of Cotabato City; and lawyers Carlo Gomez, Gerardo Dilig, Nesario Awat, Joselito Alisuag, Richalex Jagmis, all
of Palawan City. The Muslim Legal Assistance Foundation, Inc. (Muslaf) and the Muslim Multi-Sectoral Movement
for Peace and Development (MMMPD) filed their respective Comments-in-Intervention.

By subsequent Resolutions, the Court ordered the consolidation of the petitions. Respondents filed Comments on
the petitions, while some of petitioners submitted their respective Replies.

Respondents, by Manifestation and Motion of August 19, 2008, stated that the Executive Department shall
thoroughly review the MOA-AD and pursue further negotiations to address the issues hurled against it, and thus
moved to dismiss the cases. In the succeeding exchange of pleadings, respondents motion was met with vigorous
opposition from petitioners.
The cases were heard on oral argument on August 15, 22 and 29, 2008 that tackled the following principal issues:

1. Whether the petitions have become moot and academic

(i) insofar as the mandamus aspect is concerned, in view of the disclosure of official copies of the final draft of the
Memorandum of Agreement (MOA); and

(ii) insofar as the prohibition aspect involving the Local Government Units is concerned, if it is considered that
consultation has become fait accompli with the finalization of the draft;

2. Whether the constitutionality and the legality of the MOA is ripe for adjudication;

3. Whether respondent Government of the Republic of the Philippines Peace Panel committed grave abuse of
discretion amounting to lack or excess of jurisdiction when it negotiated and initiated the MOA vis--vis ISSUES Nos.
4 and 5;

4. Whether there is a violation of the peoples right to information on matters of public concern (1987 Constitution,
Article III, Sec. 7) under a state policy of full disclosure of all its transactions involving public interest (1987
Constitution, Article II, Sec. 28) including public consultation under Republic Act No. 7160 (LOCAL GOVERNMENT
CODE OF 1991)[;]

If it is in the affirmative, whether prohibition under Rule 65 of the 1997 Rules of Civil Procedure is an appropriate
remedy;

5. Whether by signing the MOA, the Government of the Republic of the Philippines would be BINDING itself

a) to create and recognize the Bangsamoro Juridical Entity (BJE) as a separate state, or a juridical, territorial or
political subdivision not recognized by law;

b) to revise or amend the Constitution and existing laws to conform to the MOA;

c) to concede to or recognize the claim of the Moro Islamic Liberation Front for ancestral domain in violation of
Republic Act No. 8371 (THE INDIGENOUS PEOPLES RIGHTS ACT OF 1997), particularly Section 3(g) & Chapter VII
(DELINEATION, RECOGNITION OF ANCESTRAL DOMAINS)[;]

If in the affirmative, whether the Executive Branch has the authority to so bind the Government of the Republic of
the Philippines;

6. Whether the inclusion/exclusion of the Province of North Cotabato, Cities of Zamboanga, Iligan and Isabela, and
the Municipality of Linamon, Lanao del Norte in/from the areas covered by the projected Bangsamoro Homeland is
a justiciable question; and

7. Whether desistance from signing the MOA derogates any prior valid commitments of the Government of the
Republic of the Philippines.[24]

The Court, thereafter, ordered the parties to submit their respective Memoranda. Most of the parties submitted
their memoranda on time.

III. OVERVIEW OF THE MOA-AD

As a necessary backdrop to the consideration of the objections raised in the subject five petitions and six petitions-
in-intervention against the MOA-AD, as well as the two comments-in-intervention in favor of the MOA-AD, the
Court takes an overview of the MOA.
The MOA-AD identifies the Parties to it as the GRP and the MILF.

Under the heading Terms of Reference (TOR), the MOA-AD includes not only four earlier agreements between the
GRP and MILF, but also two agreements between the GRP and the MNLF: the 1976 Tripoli Agreement, and the Final
Peace Agreement on the Implementation of the 1976 Tripoli Agreement, signed on September 2, 1996 during the
administration of President Fidel Ramos.

The MOA-AD also identifies as TOR two local statutes the organic act for the Autonomous Region in Muslim
Mindanao (ARMM)[25] and the Indigenous Peoples Rights Act (IPRA),[26] and several international law instruments
the ILO Convention No. 169 Concerning Indigenous and Tribal Peoples in Independent Countries in relation to the
UN Declaration on the Rights of the Indigenous Peoples, and the UN Charter, among others.

The MOA-AD includes as a final TOR the generic category of compact rights entrenchment emanating from the
regime of dar-ul-muahada (or territory under compact) and dar-ul-sulh (or territory under peace agreement) that
partakes the nature of a treaty device.

During the height of the Muslim Empire, early Muslim jurists tended to see the world through a simple dichotomy:
there was the dar-ul-Islam (the Abode of Islam) and dar-ul-harb (the Abode of War). The first referred to those
lands where Islamic laws held sway, while the second denoted those lands where Muslims were persecuted or
where Muslim laws were outlawed or ineffective.[27] This way of viewing the world, however, became more
complex through the centuries as the Islamic world became part of the international community of nations.

As Muslim States entered into treaties with their neighbors, even with distant States and inter-governmental
organizations, the classical division of the world into dar-ul-Islamand dar-ul-harb eventually lost its meaning. New
terms were drawn up to describe novel ways of perceiving non-Muslim territories. For instance, areas like dar-ul-
muahada(land of compact) and dar-ul-sulh (land of treaty) referred to countries which, though under a secular
regime, maintained peaceful and cooperative relations with Muslim States, having been bound to each other by
treaty or agreement. Dar-ul-aman (land of order), on the other hand, referred to countries which, though not
bound by treaty with Muslim States, maintained freedom of religion for Muslims.[28]

It thus appears that the compact rights entrenchment emanating from the regime of dar-ul-muahada and dar-ul-
sulh simply refers to all other agreements between the MILF and the Philippine government the Philippines being
the land of compact and peace agreement that partake of the nature of a treaty device, treaty being broadly defined
as any solemn agreement in writing that sets out understandings, obligations, and benefits for both parties which
provides for a framework that elaborates the principles declared in the [MOA-AD].[29]

The MOA-AD states that the Parties HAVE AGREED AND ACKNOWLEDGED AS FOLLOWS, and starts with its main
body.

The main body of the MOA-AD is divided into four strands, namely, Concepts and Principles, Territory,
Resources, and Governance.

A. CONCEPTS AND PRINCIPLES

This strand begins with the statement that it is the birthright of all Moros and all Indigenous peoples
of Mindanao to identify themselves and be accepted as Bangsamoros. It defines Bangsamoro people as the natives
or original inhabitants of Mindanao and its adjacent islands including Palawan and the Sulu archipelago at the time
of conquest or colonization, and their descendants whether mixed or of full blood, including their spouses.[30]

Thus, the concept of Bangsamoro, as defined in this strand of the MOA-AD, includes not only Moros as traditionally
understood even by Muslims,[31] but all indigenouspeoples of Mindanao and its adjacent islands. The MOA-AD adds
that the freedom of choice of indigenous peoples shall be respected. What this freedom of choice consists in has not
been specifically defined.
The MOA-AD proceeds to refer to the Bangsamoro homeland, the ownership of which is vested exclusively in the
Bangsamoro people by virtue of their prior rights of occupation.[32] Both parties to the MOA-AD acknowledge
that ancestral domain does not form part of the public domain.[33]

The Bangsamoro people are acknowledged as having the right to self-governance, which right is said to be rooted
on ancestral territoriality exercised originally under the suzerain authority of their sultanates and the Pat a
Pangampong ku Ranaw. The sultanates were described as states or karajaan/kadatuan resembling a body politic
endowed with all the elements of a nation-state in the modern sense.[34]

The MOA-AD thus grounds the right to self-governance of the Bangsamoro people on the past suzerain authority of
the sultanates. As gathered, the territory defined as the Bangsamoro homeland was ruled by several sultanates
and, specifically in the case of the Maranao, by the Pat a Pangampong ku Ranaw, a confederation of independent
principalities (pangampong) each ruled by datus and sultans, none of whom was supreme over the others.[35]

The MOA-AD goes on to describe the Bangsamoro people as the First Nation with defined territory and with a
system of government having entered into treaties of amity and commerce with foreign nations.
The term First Nation is of Canadian origin referring to the indigenous peoples of that territory, particularly those
known as Indians. In Canada, each of these indigenous peoples is equally entitled to be called First Nation, hence,
all of them are usually described collectively by the plural First Nations. [36] To that extent, the MOA-AD, by
identifying the Bangsamoro people as the First Nation suggesting its exclusive entitlement to that designation
departs from the Canadian usage of the term.

The MOA-AD then mentions for the first time the Bangsamoro Juridical Entity (BJE) to which it grants the
authority and jurisdiction over the Ancestral Domain and Ancestral Lands of the Bangsamoro.[37]

B. TERRITORY

The territory of the Bangsamoro homeland is described as the land mass as well as the maritime, terrestrial, fluvial
and alluvial domains, including the aerial domain and the atmospheric space above it, embracing the Mindanao-
Sulu-Palawan geographic region.[38]

More specifically, the core of the BJE is defined as the present geographic area of the ARMM thus constituting the
following areas: Lanao del Sur, Maguindanao, Sulu, Tawi-Tawi, Basilan, and Marawi City. Significantly, this core
also includes certain municipalities of Lanao del Norte that voted for inclusion in the ARMM in the 2001
plebiscite.[39]

Outside of this core, the BJE is to cover other provinces, cities, municipalities and barangays, which are grouped
into two categories, Category A and Category B. Each of these areas is to be subjected to a plebiscite to be held on
different dates, years apart from each other. Thus, Category A areas are to be subjected to a plebiscite not later
than twelve (12) months following the signing of the MOA-AD.[40] Category B areas, also called Special Intervention
Areas, on the other hand, are to be subjected to a plebiscite twenty-five (25) years from the signing of a separate
agreement the Comprehensive Compact.[41]

The Parties to the MOA-AD stipulate that the BJE shall have jurisdiction over all natural resources within
its internal waters, defined as extending fifteen (15) kilometers from the coastline of the BJE area; [42] that the BJE
shall also have territorial waters, which shall stretch beyond the BJE internal waters up to the baselines of the
Republic of the Philippines (RP) south east and south west of mainland Mindanao; and that within
these territorial waters, the BJE and the Central Government (used interchangeably with RP) shall
exercise joint jurisdiction, authority and management over all natural resources.[43] Notably, the jurisdiction over
the internal waters is not similarly described as joint.

The MOA-AD further provides for the sharing of minerals on the territorial waters between the Central
Government and the BJE, in favor of the latter, through production sharing and economic cooperation
agreement.[44] The activities which the Parties are allowed to conduct on the territorial waters are enumerated,
among which are the exploration and utilization of natural resources, regulation of shipping and fishing activities,
and the enforcement of police and safety measures.[45] There is no similar provision on the sharing of minerals and
allowed activities with respect to the internal waters of the BJE.

C. RESOURCES

The MOA-AD states that the BJE is free to enter into any economic cooperation and trade relations with foreign
countries and shall have the option to establish trade missions in those countries. Such relationships and
understandings, however, are not to include aggression against the GRP. The BJE may also enter into
environmental cooperation agreements.[46]

The external defense of the BJE is to remain the duty and obligation of the Central Government. The Central
Government is also bound to take necessary steps to ensure the BJEs participation in international meetings and
events like those of the ASEAN and the specialized agencies of the UN. The BJE is to be entitled to participate in
Philippine official missions and delegations for the negotiation of border agreements or protocols for
environmental protection and equitable sharing of incomes and revenues involving the bodies of water adjacent to
or between the islands forming part of the ancestral domain.[47]

With regard to the right of exploring for, producing, and obtaining all potential sources of energy, petroleum, fossil
fuel, mineral oil and natural gas, the jurisdiction and control thereon is to be vested in the BJE as the party having
control within its territorial jurisdiction. This right carries the proviso that, in times of national emergency, when
public interest so requires, the Central Government may, for a fixed period and under reasonable terms as may be
agreed upon by both Parties, assume or direct the operation of such resources.[48]

The sharing between the Central Government and the BJE of total production pertaining to natural resources is to
be 75:25 in favor of the BJE.[49]
The MOA-AD provides that legitimate grievances of the Bangsamoro people arising from any unjust dispossession
of their territorial and proprietary rights, customary land tenures, or their marginalization shall be
acknowledged. Whenever restoration is no longer possible, reparation is to be in such form as mutually
determined by the Parties.[50]

The BJE may modify or cancel the forest concessions, timber licenses, contracts or agreements, mining
concessions, Mineral Production and Sharing Agreements (MPSA), Industrial Forest Management Agreements
(IFMA), and other land tenure instruments granted by the Philippine Government, including those issued by the
present ARMM.[51]

D. GOVERNANCE
The MOA-AD binds the Parties to invite a multinational third-party to observe and monitor the implementation of
the Comprehensive Compact. This compact is to embody the details for the effective enforcement and the
mechanisms and modalities for the actual implementation of the MOA-AD. The MOA-AD explicitly provides that the
participation of the third party shall not in any way affect the status of the relationship between the Central
Government and the BJE.[52]

The associative relationship


between the Central Government
and the BJE

The MOA-AD describes the relationship of the Central Government and the BJE as associative, characterized by
shared authority and responsibility. And it states that the structure of governance is to be based on executive,
legislative, judicial, and administrative institutions with defined powers and functions in the Comprehensive
Compact.

The MOA-AD provides that its provisions requiring amendments to the existing legal framework shall take effect
upon signing of the Comprehensive Compact and upon effecting the aforesaid amendments, with due regard to
the non-derogation of prior agreements and within the stipulated timeframe to be contained in the
Comprehensive Compact. As will be discussed later, much of the present controversy hangs on the legality of
this provision.

The BJE is granted the power to build, develop and maintain its own institutions inclusive of civil service, electoral,
financial and banking, education, legislation, legal, economic, police and internal security force, judicial system and
correctional institutions, the details of which shall be discussed in the negotiation of the comprehensive compact.

As stated early on, the MOA-AD was set to be signed on August 5, 2008 by Rodolfo Garcia and Mohagher Iqbal,
Chairpersons of the Peace Negotiating Panels of the GRP and the MILF, respectively. Notably, the penultimate
paragraph of the MOA-AD identifies the signatories as the representatives of the Parties, meaning the GRP and MILF
themselves, and not merely of the negotiating panels.[53] In addition, the signature page of the MOA-AD states that it
is WITNESSED BY Datuk Othman Bin Abd Razak, Special Adviser to the Prime Minister of Malaysia, ENDORSED BY
Ambassador Sayed Elmasry, Adviser to Organization of the Islamic Conference (OIC) Secretary General and Special
Envoy for Peace Process in Southern Philippines, and SIGNED IN THE PRESENCE OF Dr. Albert G. Romulo,
Secretary of Foreign Affairs of RP and Dato Seri Utama Dr. Rais Bin Yatim, Minister of Foreign Affairs, Malaysia, all
of whom were scheduled to sign the Agreement last August 5, 2008.

Annexed to the MOA-AD are two documents containing the respective lists cum maps of the provinces,
municipalities, and barangays under Categories A and B earlier mentioned in the discussion on the strand on
TERRITORY.

IV. PROCEDURAL ISSUES

A. RIPENESS

The power of judicial review is limited to actual cases or controversies.[54] Courts decline to issue advisory opinions
or to resolve hypothetical or feigned problems, or mere academic questions.[55] The limitation of the power of
judicial review to actual cases and controversies defines the role assigned to the judiciary in a tripartite allocation
of power, to assure that the courts will not intrude into areas committed to the other branches of government.[56]

An actual case or controversy involves a conflict of legal rights, an assertion of opposite legal claims, susceptible of
judicial resolution as distinguished from a hypothetical or abstract difference or dispute. There must be a
contrariety of legal rights that can be interpreted and enforced on the basis of existing law and
jurisprudence.[57]The Court can decide the constitutionality of an act or treaty only when a proper case between
opposing parties is submitted for judicial determination.[58]

Related to the requirement of an actual case or controversy is the requirement of ripeness. A question is ripe for
adjudication when the act being challenged has had a direct adverse effect on the individual challenging it. [59] For a
case to be considered ripe for adjudication, it is a prerequisite that something had then been accomplished or
performed by either branch before a court may come into the picture,[60] and the petitioner must allege the
existence of an immediate or threatened injury to itself as a result of the challenged action. [61] He must show that
he has sustained or is immediately in danger of sustaining some direct injury as a result of the act complained of.[62]

The Solicitor General argues that there is no justiciable controversy that is ripe for judicial review in the present
petitions, reasoning that

The unsigned MOA-AD is simply a list of consensus points subject to further negotiations and legislative
enactments as well as constitutional processes aimed at attaining a final peaceful agreement. Simply put, the MOA-
AD remains to be a proposal that does not automatically create legally demandable rights and obligations until the
list of operative acts required have been duly complied with. x x x

xxxx
In the cases at bar, it is respectfully submitted that this Honorable Court has no authority to pass upon issues based
on hypothetical or feigned constitutional problems or interests with no concrete bases. Considering
the preliminary character of the MOA-AD, there are no concrete acts that could possibly violate petitioners and
intervenors rights since the acts complained of are mere contemplated steps toward the formulation of a final
peace agreement. Plainly, petitioners and intervenors perceived injury, if at all, is merely imaginary and illusory
apart from being unfounded and based on mere conjectures. (Underscoring supplied)

The Solicitor General cites[63] the following provisions of the MOA-AD:

TERRITORY

xxxx

2. Toward this end, the Parties enter into the following stipulations:
xxxx

d. Without derogating from the requirements of prior agreements, the Government stipulates to conduct and
deliver, using all possible legal measures, within twelve (12) months following the signing of the MOA-AD, a
plebiscite covering the areas as enumerated in the list and depicted in the map as Category A attached herein (the
Annex). The Annex constitutes an integral part of this framework agreement. Toward this end, the Parties shall
endeavor to complete the negotiations and resolve all outstanding issues on the Comprehensive Compact within
fifteen (15) months from the signing of the MOA-AD.

xxxx

GOVERNANCE

xxxx

7. The Parties agree that mechanisms and modalities for the actual implementation of this MOA-AD shall be spelt
out in the Comprehensive Compact to mutually take such steps to enable it to occur effectively.

Any provisions of the MOA-AD requiring amendments to the existing legal framework shall come into force upon
the signing of a Comprehensive Compact and upon effecting the necessary changes to the legal framework with due
regard to non-derogation of prior agreements and within the stipulated timeframe to be contained in the
Comprehensive Compact.[64] (Underscoring supplied)

The Solicitor Generals arguments fail to persuade.

Concrete acts under the MOA-AD are not necessary to render the present controversy ripe. In Pimentel, Jr. v.
Aguirre,[65] this Court held:

x x x [B]y the mere enactment of the questioned law or the approval of the challenged action, the dispute is said to
have ripened into a judicial controversy even without any other overt act.Indeed, even a singular violation of the
Constitution and/or the law is enough to awaken judicial duty.

xxxx

By the same token, when an act of the President, who in our constitutional scheme is a coequal of Congress, is
seriously alleged to have infringed the Constitution and the laws x x x settling the dispute becomes the duty and the
responsibility of the courts.[66]
In Santa Fe Independent School District v. Doe,[67] the United States Supreme Court held that the challenge to the
constitutionality of the schools policy allowing student-led prayers and speeches before games was ripe for
adjudication, even if no public prayer had yet been led under the policy, because the policy was being challenged as
unconstitutional on its face.[68]

That the law or act in question is not yet effective does not negate ripeness. For example, in New York v. United
States,[69] decided in 1992, the United States Supreme Court held that the action by the State of New York
challenging the provisions of the Low-Level Radioactive Waste Policy Act was ripe for adjudication even if the
questioned provision was not to take effect until January 1, 1996, because the parties agreed that New York had to
take immediate action to avoid the provision's consequences.[70]

The present petitions pray for Certiorari,[71] Prohibition, and Mandamus. Certiorari and Prohibition are remedies
granted by law when any tribunal, board or officer has acted, in the case of certiorari, or is proceeding, in the case
of prohibition, without or in excess of its jurisdiction or with grave abuse of discretion amounting to lack or excess
of jurisdiction.[72] Mandamus is a remedy granted by law when any tribunal, corporation, board, officer or person
unlawfully neglects the performance of an act which the law specifically enjoins as a duty resulting from an office,
trust, or station, or unlawfully excludes another from the use or enjoyment of a right or office to which such other
is entitled.[73] Certiorari, Mandamus and Prohibition are appropriate remedies to raise constitutional issues and to
review and/or prohibit/nullify, when proper, acts of legislative and executive officials.[74]

The authority of the GRP Negotiating Panel is defined by Executive Order No. 3 (E.O. No. 3), issued on February 28,
2001.[75] The said executive order requires that [t]he government's policy framework for peace, including the
systematic approach and the administrative structure for carrying out the comprehensive peace process x x x be
governed by this Executive Order.[76]

The present petitions allege that respondents GRP Panel and PAPP Esperon drafted the terms of the MOA-AD
without consulting the local government units or communities affected, nor informing them of the proceedings. As
will be discussed in greater detail later, such omission, by itself, constitutes a departure by respondents from their
mandate under E.O. No. 3.

Furthermore, the petitions allege that the provisions of the MOA-AD violate the Constitution. The MOA-AD
provides that any provisions of the MOA-AD requiring amendments to the existing legal framework shall come into
force upon the signing of a Comprehensive Compact and upon effecting the necessary changes to the legal
framework, implying an amendment of the Constitution to accommodate the MOA-AD. This stipulation, in
effect, guaranteed to the MILF the amendment of the Constitution.Such act constitutes another violation of its
authority. Again, these points will be discussed in more detail later.
As the petitions allege acts or omissions on the part of respondent that exceed their authority, by violating their
duties under E.O. No. 3 and the provisions of the Constitution and statutes, the petitions make a prima facie case for
Certiorari, Prohibition, and Mandamus, and an actual case or controversy ripe for adjudication exists. When an act
of a branch of government is seriously alleged to have infringed the Constitution, it becomes not only the
right but in fact the duty of the judiciary to settle the dispute.[77]

B. LOCUS STANDI

For a party to have locus standi, one must allege such a personal stake in the outcome of the controversy as to
assure that concrete adverseness which sharpens the presentation of issues upon which the court so largely
depends for illumination of difficult constitutional questions.[78]

Because constitutional cases are often public actions in which the relief sought is likely to affect other persons, a
preliminary question frequently arises as to this interest in the constitutional question raised.[79]

When suing as a citizen, the person complaining must allege that he has been or is about to be denied some right or
privilege to which he is lawfully entitled or that he is about to be subjected to some burdens or penalties by reason
of the statute or act complained of.[80] When the issue concerns a public right, it is sufficient that the petitioner is a
citizen and has an interest in the execution of the laws.[81]

For a taxpayer, one is allowed to sue where there is an assertion that public funds are illegally disbursed or
deflected to an illegal purpose, or that there is a wastage of public funds through the enforcement of an invalid or
unconstitutional law.[82] The Court retains discretion whether or not to allow a taxpayers suit.[83]

In the case of a legislator or member of Congress, an act of the Executive that injures the institution of Congress
causes a derivative but nonetheless substantial injury that can be questioned by legislators. A member of the House
of Representatives has standing to maintain inviolate the prerogatives, powers and privileges vested by the
Constitution in his office.[84]

An organization may be granted standing to assert the rights of its members,[85] but the mere invocation by
the Integrated Bar of the Philippines or any member of the legal profession of the duty to preserve the rule of law
does not suffice to clothe it with standing.[86]

As regards a local government unit (LGU), it can seek relief in order to protect or vindicate an interest of its own,
and of the other LGUs.[87]

Intervenors, meanwhile, may be given legal standing upon showing of facts that satisfy the requirements of the law
authorizing intervention,[88] such as a legal interest in the matter in litigation, or in the success of either of the
parties.

In any case, the Court has discretion to relax the procedural technicality on locus standi, given the liberal attitude it
has exercised, highlighted in the case of David v. Macapagal-Arroyo,[89] where technicalities of procedure were
brushed aside, the constitutional issues raised being of paramount public interest or of transcendental importance
deserving the attention of the Court in view of their seriousness, novelty and weight as precedents. [90] The Courts
forbearing stance on locus standi on issues involving constitutional issues has for its purpose the protection of
fundamental rights.

In not a few cases, the Court, in keeping with its duty under the Constitution to determine whether the other
branches of government have kept themselves within the limits of the Constitution and the laws and have not
abused the discretion given them, has brushed aside technical rules of procedure.[91]

In the petitions at bar, petitioners Province of North Cotabato (G.R. No. 183591) Province of Zamboanga del
Norte (G.R. No. 183951), City of Iligan (G.R. No. 183893) and City of Zamboanga (G.R. No. 183752) and
petitioners-in-intervention Province of Sultan Kudarat, City of Isabela and Municipality of Linamon have locus
standi in view of the direct and substantial injury that they, as LGUs, would suffer as their territories, whether in
whole or in part, are to be included in the intended domain of the BJE.These petitioners allege that they did not
vote for their inclusion in the ARMM which would be expanded to form the BJE territory. Petitioners legal standing
is thus beyond doubt.

In G.R. No. 183962, petitioners Ernesto Maceda, Jejomar Binay and Aquilino Pimentel III would have no
standing as citizens and taxpayers for their failure to specify that they would be denied some right or privilege or
there would be wastage of public funds. The fact that they are a former Senator, an incumbent mayor
of Makati City, and a resident of Cagayan de Oro, respectively, is of no consequence. Considering their invocation of
the transcendental importance of the issues at hand, however, the Court grants them standing.

Intervenors Franklin Drilon and Adel Tamano, in alleging their standing as taxpayers, assert that government
funds would be expended for the conduct of an illegal and unconstitutional plebiscite to delineate the BJE
territory. On that score alone, they can be given legal standing. Their allegation that the issues involved in these
petitions are of undeniable transcendental importance clothes them with added basis for their personality to
intervene in these petitions.
With regard to Senator Manuel Roxas, his standing is premised on his being a member of the Senate and a citizen
to enforce compliance by respondents of the publics constitutional right to be informed of the MOA-AD, as well as
on a genuine legal interest in the matter in litigation, or in the success or failure of either of the parties. He thus
possesses the requisite standing as an intervenor.

With respect to Intervenors Ruy Elias Lopez, as a former congressman of the 3rd district of Davao City, a taxpayer
and a member of the Bagobo tribe; Carlo B. Gomez, et al., as members of the IBP Palawan chapter, citizens and
taxpayers; Marino Ridao, as taxpayer, resident and member of the Sangguniang Panlungsod of
Cotabato City; and Kisin Buxani, as taxpayer, they failed to allege any proper legal interest in the present
petitions. Just the same, the Court exercises its discretion to relax the procedural technicality on locus standi given
the paramount public interest in the issues at hand.

Intervening respondents Muslim Multi-Sectoral Movement for Peace and Development, an advocacy group for
justice and the attainment of peace and prosperity in Muslim Mindanao; and Muslim Legal Assistance
Foundation Inc., a non-government organization of Muslim lawyers, allege that they stand to be benefited or
prejudiced, as the case may be, in the resolution of the petitions concerning the MOA-AD, and prays for the denial
of the petitions on the grounds therein stated. Such legal interest suffices to clothe them with standing.

B. MOOTNESS

Respondents insist that the present petitions have been rendered moot with the satisfaction of all the reliefs
prayed for by petitioners and the subsequent pronouncement of the Executive Secretary that [n]o matter what the
Supreme Court ultimately decides[,] the government will not sign the MOA.[92]

In lending credence to this policy decision, the Solicitor General points out that the President had already
disbanded the GRP Peace Panel.[93]

In David v. Macapagal-Arroyo,[94] this Court held that the moot and academic principle not being a magical formula
that automatically dissuades courts in resolving a case, it will decide cases, otherwise moot and academic, if it finds
that (a) there is a grave violation of the Constitution;[95] (b) the situation is of exceptional character and paramount
public interest is involved;[96] (c) the constitutional issue raised requires formulation of controlling principles to
guide the bench, the bar, and the public;[97] and (d) the case is capable of repetition yet evading review.[98]

Another exclusionary circumstance that may be considered is where there is a voluntary cessation of the activity
complained of by the defendant or doer. Thus, once a suit is filed and the doer voluntarily ceases the challenged
conduct, it does not automatically deprive the tribunal of power to hear and determine the case and does not
render the case moot especially when the plaintiff seeks damages or prays for injunctive relief against the possible
recurrence of the violation.[99]

The present petitions fall squarely into these exceptions to thus thrust them into the domain of judicial review. The
grounds cited above in David are just as applicable in the present cases as they were, not only in David, but also
in Province of Batangas v. Romulo[100] and Manalo v. Calderon[101] where the Court similarly decided them on the
merits, supervening events that would ordinarily have rendered the same moot notwithstanding.

Petitions not mooted

Contrary then to the asseverations of respondents, the non-signing of the MOA-AD and the eventual dissolution of
the GRP Peace Panel did not moot the present petitions. It bears emphasis that the signing of the MOA-AD did not
push through due to the Courts issuance of a Temporary Restraining Order.

Contrary too to respondents position, the MOA-AD cannot be considered a mere list of consensus points, especially
given its nomenclature, the need to have it signed or initialed by all the parties concerned on August 5, 2008,
and the far-reaching Constitutional implications of these consensus points, foremost of which is the creation of
the BJE.
In fact, as what will, in the main, be discussed, there is a commitment on the part of respondents to amend and
effect necessary changes to the existing legal framework for certain provisions of the MOA-AD to take
effect. Consequently, the present petitions are not confined to the terms and provisions of the MOA-AD, but to
other on-goingand future negotiations and agreements necessary for its realization. The petitions have not,
therefore, been rendered moot and academic simply by the public disclosure of the MOA-AD,[102] the manifestation
that it will not be signed as well as the disbanding of the GRP Panel not withstanding.

Petitions are imbued with paramount public interest

There is no gainsaying that the petitions are imbued with paramount public interest, involving a significant part of
the countrys territory and the wide-ranging political modifications of affected LGUs. The assertion that the MOA-
AD is subject to further legal enactments including possible Constitutional amendments more than ever
provides impetus for the Court to formulate controlling principles to guide the bench, the bar, the public
and, in this case, the government and its negotiating entity.

Respondents cite Suplico v. NEDA, et al.[103] where the Court did not pontificat[e] on issues which no longer
legitimately constitute an actual case or controversy [as this] will do more harm than good to the nation as a
whole.

The present petitions must be differentiated from Suplico. Primarily, in Suplico, what was assailed and eventually
cancelled was a stand-alone government procurement contract for a national broadband network involving a one-
time contractual relation between two partiesthe government and a private foreign corporation. As the issues
therein involved specific government procurement policies and standard principles on contracts, the majority
opinion in Suplico found nothing exceptional therein, the factual circumstances being peculiar only to the
transactions and parties involved in the controversy.
The MOA-AD is part of a series of agreements

In the present controversy, the MOA-AD is a significant part of a series of agreements necessary to carry out
the Tripoli Agreement 2001. The MOA-AD which dwells on the Ancestral Domain Aspect of said Tripoli Agreement
is the third such component to be undertaken following the implementation of the Security Aspect in August 2001
and the Humanitarian, Rehabilitation and Development Aspect in May 2002.

Accordingly, even if the Executive Secretary, in his Memorandum of August 28, 2008 to the Solicitor General, has
stated that no matter what the Supreme Court ultimately decides[,] the government will not sign the MOA[-
AD], mootness will not set in in light of the terms of the Tripoli Agreement 2001.

Need to formulate principles-guidelines

Surely, the present MOA-AD can be renegotiated or another one will be drawn up to carry out the Ancestral
Domain Aspect of the Tripoli Agreement 2001, in another or in any form, which could contain similar or
significantly drastic provisions. While the Court notes the word of the Executive Secretary that the government is
committed to securing an agreement that is both constitutional and equitable because that is the only way that
long-lasting peace can be assured, it is minded to render a decision on the merits in the present petitions
to formulate controlling principles to guide the bench, the bar, the public and, most especially, the
government in negotiating with the MILF regarding Ancestral Domain.

Respondents invite the Courts attention to the separate opinion of then Chief Justice Artemio Panganiban
in Sanlakas v. Reyes[104] in which he stated that the doctrine of capable of repetition yet evading review can override
mootness, provided the party raising it in a proper case has been and/or continue to be prejudiced or damaged as a
direct result of their issuance. They contend that the Court must have jurisdiction over the subject matter for the
doctrine to be invoked.
The present petitions all contain prayers for Prohibition over which this Court exercises original jurisdiction. While
G.R. No. 183893 (City of Iligan v. GRP) is a petition for Injunction and Declaratory Relief, the Court will treat it as
one for Prohibition as it has far reaching implications and raises questions that need to be resolved. [105] At all
events, the Court has jurisdiction over most if not the rest of the petitions.

Indeed, the present petitions afford a proper venue for the Court to again apply the doctrine immediately referred
to as what it had done in a number of landmark cases.[106]There is a reasonable expectation that petitioners,
particularly the Provinces of North Cotabato, Zamboanga del Norte and Sultan Kudarat, the Cities of Zamboanga,
Iligan and Isabela, and the Municipality of Linamon, will again be subjected to the same problem in the future as
respondents actions are capable of repetition, in another or any form.

It is with respect to the prayers for Mandamus that the petitions have become moot, respondents having, by
Compliance of August 7, 2008, provided this Court and petitioners with official copies of the final draft of the MOA-
AD and its annexes. Too, intervenors have been furnished, or have procured for themselves, copies of the MOA-AD.
V. SUBSTANTIVE ISSUES

As culled from the Petitions and Petitions-in-Intervention, there are basically two SUBSTANTIVE issues to be
resolved, one relating to the manner in which the MOA-AD was negotiated and finalized, the other relating to its
provisions, viz:

1. Did respondents violate constitutional and statutory provisions on public consultation and the right to
information when they negotiated and later initialed the MOA-AD?

2. Do the contents of the MOA-AD violate the Constitution and the laws?
ON THE FIRST SUBSTANTIVE ISSUE

Petitioners invoke their constitutional right to information on matters of public concern, as provided in Section
7, Article III on the Bill of Rights:

Sec. 7. The right of the people to information on matters of public concern shall be recognized. Access to official
records, and to documents, and papers pertaining to official acts, transactions, or decisions, as well as to
government research data used as basis for policy development, shall be afforded the citizen, subject to such
limitations as may be provided by law.[107]

As early as 1948, in Subido v. Ozaeta,[108] the Court has recognized the statutory right to examine and inspect public
records, a right which was eventually accorded constitutional status.

The right of access to public documents, as enshrined in both the 1973 Constitution and the 1987 Constitution, has
been recognized as a self-executory constitutional right.[109]

In the 1976 case of Baldoza v. Hon. Judge Dimaano,[110] the Court ruled that access to public records is predicated on
the right of the people to acquire information on matters of public concern since, undoubtedly, in a democracy, the
pubic has a legitimate interest in matters of social and political significance.

x x x The incorporation of this right in the Constitution is a recognition of the fundamental role of free exchange of
information in a democracy. There can be no realistic perception by the public of the nations problems, nor a
meaningful democratic decision-making if they are denied access to information of general interest. Information is
needed to enable the members of society to cope with the exigencies of the times. As has been aptly observed:
Maintaining the flow of such information depends on protection for both its acquisition and its dissemination since,
if either process is interrupted, the flow inevitably ceases. x x x[111]
In the same way that free discussion enables members of society to cope with the exigencies of their time, access to
information of general interest aids the people in democratic decision-making by giving them a better perspective
of the vital issues confronting the nation[112] so that they may be able to criticize and participate in the affairs of the
government in a responsible, reasonable and effective manner. It is by ensuring an unfettered and uninhibited
exchange of ideas among a well-informed public that a government remains responsive to the changes desired by
the people.[113]

The MOA-AD is a matter of public concern

That the subject of the information sought in the present cases is a matter of public concern[114] faces no serious
challenge. In fact, respondents admit that the MOA-AD is indeed of public concern.[115] In previous cases, the Court
found that the regularity of real estate transactions entered in the Register of Deeds, [116] the need for adequate
notice to the public of the various laws,[117] the civil service eligibility of a public employee,[118] the proper
management of GSIS funds allegedly used to grant loans to public officials, [119] the recovery of the Marcoses alleged
ill-gotten wealth,[120] and the identity of party-list nominees,[121] among others, are matters of public
concern.Undoubtedly, the MOA-AD subject of the present cases is of public concern, involving as it does
the sovereignty and territorial integrity of the State, which directly affects the lives of the public at large.

Matters of public concern covered by the right to information include steps and negotiations leading to the
consummation of the contract. In not distinguishing as to the executory nature or commercial character of
agreements, the Court has categorically ruled:

x x x [T]he right to information contemplates inclusion of negotiations leading to the consummation of the
transaction. Certainly, a consummated contract is not a requirement for the exercise of the right to
information. Otherwise, the people can never exercise the right if no contract is consummated, and if one is
consummated, it may be too late for the public to expose its defects.
Requiring a consummated contract will keep the public in the dark until the contract, which may be grossly
disadvantageous to the government or even illegal, becomes fait accompli. This negates the State policy of full
transparency on matters of public concern, a situation which the framers of the Constitution could not have
intended. Such a requirement will prevent the citizenry from participating in the public discussion of
any proposed contract, effectively truncating a basic right enshrined in the Bill of Rights. We can allow neither an
emasculation of a constitutional right, nor a retreat by the State of its avowed policy of full disclosure of all its
transactions involving public interest.[122] (Emphasis and italics in the original)

Intended as a splendid symmetry[123] to the right to information under the Bill of Rights is the policy of
public disclosure under Section 28, Article II of the Constitution reading:

Sec. 28. Subject to reasonable conditions prescribed by law, the State adopts and implements a policy of full public
disclosure of all its transactions involving public interest.[124]

The policy of full public disclosure enunciated in above-quoted Section 28 complements the right of access to
information on matters of public concern found in the Bill of Rights. The right to information guarantees the right
of the people to demand information, while Section 28 recognizes the duty of officialdom to give information even
if nobody demands.[125]

The policy of public disclosure establishes a concrete ethical principle for the conduct of public affairs in a
genuinely open democracy, with the peoples right to know as the centerpiece. It is a mandate of the State to be
accountable by following such policy.[126] These provisions are vital to the exercise of the freedom of expression
and essential to hold public officials at all times accountable to the people.[127]

Whether Section 28 is self-executory, the records of the deliberations of the Constitutional Commission so disclose:

MR. SUAREZ. And since this is not self-executory, this policy will not be enunciated or will not be in force and effect
until after Congress shall have provided it.
MR. OPLE. I expect it to influence the climate of public ethics immediately but, of course, the implementing law will
have to be enacted by Congress, Mr. Presiding Officer.[128]

The following discourse, after Commissioner Hilario Davide, Jr., sought clarification on the issue, is enlightening.

MR. DAVIDE. I would like to get some clarifications on this. Mr. Presiding Officer, did I get the Gentleman correctly
as having said that this is not a self-executing provision? It would require a legislation by Congress to implement?

MR. OPLE. Yes. Originally, it was going to be self-executing, but I accepted an amendment from Commissioner
Regalado, so that the safeguards on national interest are modified by the clause as may be provided by law

MR. DAVIDE. But as worded, does it not mean that this will immediately take effect and Congress may
provide for reasonable safeguards on the sole ground national interest?

MR. OPLE. Yes. I think so, Mr. Presiding Officer, I said earlier that it should immediately influence the
climate of the conduct of public affairs but, of course, Congress here may no longer pass a law revoking it, or if
this is approved, revoking this principle, which is inconsistent with this policy.[129] (Emphasis supplied)

Indubitably, the effectivity of the policy of public disclosure need not await the passing of a statute. As
Congress cannot revoke this principle, it is merely directed to provide for reasonable safeguards. The complete and
effective exercise of the right to information necessitates that its complementary provision on public disclosure
derive the same self-executory nature. Since both provisions go hand-in-hand, it is absurd to say that the
broader[130] right to information on matters of public concern is already enforceable while the correlative duty of
the State to disclose its transactions involving public interest is not enforceable until there is an enabling
law. Respondents cannot thus point to the absence of an implementing legislation as an excuse in not effecting such
policy.

An essential element of these freedoms is to keep open a continuing dialogue or process of communication
between the government and the people. It is in the interest of the State that the channels for free political
discussion be maintained to the end that the government may perceive and be responsive to the peoples
will.[131] Envisioned to be corollary to the twin rights to information and disclosure is the design for feedback
mechanisms.

MS. ROSARIO BRAID. Yes. And lastly, Mr. Presiding Officer, will the people be able to participate? Will the
government provide feedback mechanisms so that the people can participate and can react where the
existing media facilities are not able to provide full feedback mechanisms to the government? I suppose
this will be part of the government implementing operational mechanisms.

MR. OPLE. Yes. I think through their elected representatives and that is how these courses take place. There is a
message and a feedback, both ways.

xxxx

MS. ROSARIO BRAID. Mr. Presiding Officer, may I just make one last sentence?

I think when we talk about the feedback network, we are not talking about public officials but also network
of private business o[r] community-based organizations that will be reacting. As a matter of fact, we will put
more credence or credibility on the private network of volunteers and voluntary community-based
organizations. So I do not think we are afraid that there will be another OMA in the making. [132] (Emphasis
supplied)
The imperative of a public consultation, as a species of the right to information, is evident in the marching orders to
respondents. The mechanics for the duty to disclose information and to conduct public consultation regarding the
peace agenda and process is manifestly provided by E.O. No. 3.[133] The preambulatory clause of E.O. No. 3 declares
that there is a need to further enhance the contribution of civil society to the comprehensive peace process by
institutionalizing the peoples participation.
One of the three underlying principles of the comprehensive peace process is that it should be community-based,
reflecting the sentiments, values and principles important to all Filipinos and shall be defined not by the
government alone, nor by the different contending groups only, but by all Filipinos as one community. [134] Included
as a component of the comprehensive peace process is consensus-building and empowerment for peace, which
includes continuing consultations on both national and local levels to build consensus for a peace agenda and
process, and the mobilization and facilitation of peoples participation in the peace process.[135]

Clearly, E.O. No. 3 contemplates not just the conduct of a plebiscite to effectuate continuing consultations,
contrary to respondents position that plebiscite is more than sufficient consultation.[136]

Further, E.O. No. 3 enumerates the functions and responsibilities of the PAPP, one of which is to [c]onduct regular
dialogues with the National Peace Forum (NPF) and other peace partners to seek relevant information, comments,
recommendations as well as to render appropriate and timely reports on the progress of the comprehensive peace
process.[137] E.O. No. 3 mandates the establishment of the NPF to be the principal forum for the PAPP to consult
with and seek advi[c]e from the peace advocates, peace partners and concerned sectors of society on both national
and local levels, on the implementation of the comprehensive peace process, as well as for government[-]civil
society dialogue and consensus-building on peace agenda and initiatives.[138]

In fine, E.O. No. 3 establishes petitioners right to be consulted on the peace agenda, as a corollary to the
constitutional right to information and disclosure.

PAPP Esperon committed grave abuse of discretion

The PAPP committed grave abuse of discretion when he failed to carry out the pertinent consultation. The
furtive process by which the MOA-AD was designed and crafted runs contrary to and in excess of the legal
authority, and amounts to a whimsical, capricious, oppressive, arbitrary and despotic exercise thereof.

The Court may not, of course, require the PAPP to conduct the consultation in a particular way or manner. It may,
however, require him to comply with the law and discharge the functions within the authority granted by the
President.[139]

Petitioners are not claiming a seat at the negotiating table, contrary to respondents retort in justifying the denial of
petitioners right to be consulted. Respondents stance manifests the manner by which they treat the salient
provisions of E.O. No. 3 on peoples participation. Such disregard of the express mandate of the President is not
much different from superficial conduct toward token provisos that border on classic lip service.[140] It illustrates a
gross evasion of positive duty and a virtual refusal to perform the duty enjoined.

As for respondents invocation of the doctrine of executive privilege, it is not tenable under the premises. The
argument defies sound reason when contrasted with E.O. No. 3s explicit provisions on continuing consultation and
dialogue on both national and local levels. The executive order even recognizes the exercise of the publics
right even before the GRP makes its official recommendations or before the government proffers its definite
propositions.[141] It bear emphasis that E.O. No. 3 seeks to elicit relevant advice, information, comments and
recommendations from the people through dialogue.

AT ALL EVENTS, respondents effectively waived the defense of executive privilege in view of their unqualified
disclosure of the official copies of the final draft of the MOA-AD. By unconditionally complying with the
Courts August 4, 2008 Resolution, without a prayer for the documents disclosure in camera, or without a
manifestation that it was complying therewith ex abundante ad cautelam.
Petitioners assertion that the Local Government Code (LGC) of 1991 declares it a State policy to require all national
agencies and offices to conduct periodic consultations with appropriate local government units, non-governmental
and people's organizations, and other concerned sectors of the community before any project or program is
implemented in their respective jurisdictions[142] is well-taken. The LGC chapter on intergovernmental relations
puts flesh into this avowed policy:

Prior Consultations Required. No project or program shall be implemented by government authorities unless the
consultations mentioned in Sections 2 (c) and 26 hereof are complied with, and prior approval of the sanggunian
concerned is obtained: Provided, That occupants in areas where such projects are to be implemented shall not be
evicted unless appropriate relocation sites have been provided, in accordance with the provisions of the
Constitution.[143] (Italics and underscoring supplied)

In Lina, Jr. v. Hon. Pao,[144] the Court held that the above-stated policy and above-quoted provision of the LGU apply
only to national programs or projects which are to be implemented in a particular local community. Among the
programs and projects covered are those that are critical to the environment and human ecology including those
that may call for the eviction of a particular group of people residing in the locality where these will be
implemented.[145] The MOA-AD is one peculiar program that unequivocally and unilaterally vests ownership
of a vast territory to the Bangsamoro people,[146] which could pervasively and drastically result to the
diaspora or displacement of a great number of inhabitants from their total environment.

With respect to the indigenous cultural communities/indigenous peoples (ICCs/IPs), whose interests are
represented herein by petitioner Lopez and are adversely affected by the MOA-AD, the ICCs/IPs have, under the
IPRA, the right to participate fully at all levels of decision-making in matters which may affect their rights, lives and
destinies.[147] The MOA-AD, an instrument recognizing ancestral domain, failed to justify its non-compliance with
the clear-cut mechanisms ordained in said Act,[148] which entails, among other things, the observance of the free
and prior informed consent of the ICCs/IPs.
Notably, the IPRA does not grant the Executive Department or any government agency the power to delineate and
recognize an ancestral domain claim by mere agreement or compromise. The recognition of the ancestral domain is
the raison detre of the MOA-AD, without which all other stipulations or consensus points necessarily must fail. In
proceeding to make a sweeping declaration on ancestral domain, without complying with the IPRA, which is cited
as one of the TOR of the MOA-AD, respondents clearly transcended the boundaries of their authority. As it
seems, even the heart of the MOA-AD is still subject to necessary changes to the legal framework. While paragraph
7 on Governance suspends the effectivity of all provisions requiring changes to the legal framework, such clause is
itself invalid, as will be discussed in the following section.

Indeed, ours is an open society, with all the acts of the government subject to public scrutiny and available always
to public cognizance. This has to be so if the country is to remain democratic, with sovereignty residing in the
people and all government authority emanating from them.[149]

ON THE SECOND SUBSTANTIVE ISSUE

With regard to the provisions of the MOA-AD, there can be no question that they cannot all be accommodated
under the present Constitution and laws. Respondents have admitted as much in the oral arguments before this
Court, and the MOA-AD itself recognizes the need to amend the existing legal framework to render effective at least
some of its provisions. Respondents, nonetheless, counter that the MOA-AD is free of any legal infirmity because
any provisions therein which are inconsistent with the present legal framework will not be effective until the
necessary changes to that framework are made. The validity of this argument will be considered later. For now, the
Court shall pass upon how

The MOA-AD is inconsistent with the Constitution and laws as presently worded.

In general, the objections against the MOA-AD center on the extent of the powers conceded therein to the
BJE. Petitioners assert that the powers granted to the BJE exceed those granted to any local government under
present laws, and even go beyond those of the present ARMM. Before assessing some of the specific powers that
would have been vested in the BJE, however, it would be useful to turn first to a general idea that serves as a
unifying link to the different provisions of the MOA-AD, namely, the international law concept
of association. Significantly, the MOA-AD explicitly alludes to this concept, indicating that the Parties actually
framed its provisions with it in mind.

Association is referred to in paragraph 3 on TERRITORY, paragraph 11 on RESOURCES, and paragraph 4 on


GOVERNANCE. It is in the last mentioned provision, however, that the MOA-AD most clearly uses it to describe
the envisioned relationship between the BJE and the Central Government.

4. The relationship between the Central Government and the Bangsamoro juridical entity shall
be associative characterized by shared authority and responsibility with a structure of governance based on
executive, legislative, judicial and administrative institutions with defined powers and functions in the
comprehensive compact. A period of transition shall be established in a comprehensive peace compact specifying
the relationship between the Central Government and the BJE. (Emphasis and underscoring supplied)

The nature of the associative relationship may have been intended to be defined more precisely in the still to be
forged Comprehensive Compact. Nonetheless, given that there is a concept of association in international law, and
the MOA-AD by its inclusion of international law instruments in its TOR placed itself in an international legal
context, that concept of association may be brought to bear in understanding the use of the term associative in the
MOA-AD.

Keitner and Reisman state that

[a]n association is formed when two states of unequal power voluntarily establish durable links. In the basic
model, one state, the associate, delegates certain responsibilities to the other, the principal, while
maintaining its international status as a state. Free associations represent a middle ground between
integration and independence. x x x[150] (Emphasis and underscoring supplied)

For purposes of illustration, the Republic of the Marshall Islands and the Federated States of Micronesia (FSM),
formerly part of the U.S.-administered Trust Territory of the Pacific Islands,[151] are associated states of the U.S.
pursuant to a Compact of Free Association. The currency in these countries is the U.S. dollar, indicating their very
close ties with the U.S., yet they issue their own travel documents, which is a mark of their statehood. Their
international legal status as states was confirmed by the UN Security Council and by their admission to UN
membership.

According to their compacts of free association, the Marshall Islands and the FSM generally have the capacity to
conduct foreign affairs in their own name and right, such capacity extending to matters such as the law of the sea,
marine resources, trade, banking, postal, civil aviation, and cultural relations. The U.S. government, when
conducting its foreign affairs, is obligated to consult with the governments of the Marshall Islands or the FSM on
matters which it (U.S. government) regards as relating to or affecting either government.

In the event of attacks or threats against the Marshall Islands or the FSM, the U.S. government has the authority
and obligation to defend them as if they were part of U.S. territory. The U.S. government, moreover, has the option
of establishing and using military areas and facilities within these associated states and has the right to bar the
military personnel of any third country from having access to these territories for military purposes.

It bears noting that in U.S. constitutional and international practice, free association is understood as an
international association between sovereigns. The Compact of Free Association is a treaty which is subordinate to
the associated nations national constitution, and each party may terminate the association consistent with the right
of independence. It has been said that, with the admission of the U.S.-associated states to the UN in 1990, the UN
recognized that the American model of free association is actually based on an underlying status
of independence.[152]
In international practice, the associated state arrangement has usually been used as a transitional device of
former colonies on their way to full independence. Examples of states that have passed through the status of
associated states as a transitional phase are Antigua, St. Kitts-Nevis-Anguilla, Dominica, St. Lucia, St.
Vincent and Grenada. All have since become independent states.[153]

Back to the MOA-AD, it contains many provisions which are consistent with the international legal concept
of association, specifically the following: the BJEs capacity to enter into economic and trade relations with foreign
countries, the commitment of the Central Government to ensure the BJEs participation in meetings and events in
the ASEAN and the specialized UN agencies, and the continuing responsibility of the Central Government over
external defense. Moreover, the BJEs right to participate in Philippine official missions bearing on negotiation of
border agreements, environmental protection, and sharing of revenues pertaining to the bodies of water adjacent
to or between the islands forming part of the ancestral domain, resembles the right of the governments of FSM and
the Marshall Islands to be consulted by the U.S. government on any foreign affairs matter affecting them.

These provisions of the MOA indicate, among other things, that the Parties aimed to vest in the BJE the status of
an associated state or, at any rate, a status closely approximating it.

The concept of association is not recognized under the present Constitution

No province, city, or municipality, not even the ARMM, is recognized under our laws as having
an associative relationship with the national government. Indeed, the concept implies powers that go beyond
anything ever granted by the Constitution to any local or regional government. It also implies the recognition of
the associated entity as a state. The Constitution, however, does not contemplate any state in this jurisdiction other
than the Philippine State, much less does it provide for a transitory status that aims to prepare any part of
Philippine territory for independence.

Even the mere concept animating many of the MOA-ADs provisions, therefore, already requires for its validity the
amendment of constitutional provisions, specifically the following provisions of Article X:

SECTION 1. The territorial and political subdivisions of the Republic of the Philippines are the provinces, cities,
municipalities, and barangays. There shall be autonomous regions in Muslim Mindanao and the Cordilleras as
hereinafter provided.

SECTION 15. There shall be created autonomous regions in Muslim Mindanao and in the Cordilleras consisting of
provinces, cities, municipalities, and geographical areas sharing common and distinctive historical and cultural
heritage, economic and social structures, and other relevant characteristics within the framework of this
Constitution and the national sovereignty as well as territorial integrity of the Republic of the Philippines.

The BJE is a far more powerful


entity than the autonomous region
recognized in the Constitution

It is not merely an expanded version of the ARMM, the status of its relationship with the national government
being fundamentally different from that of the ARMM.Indeed, BJE is a state in all but name as it meets the
criteria of a state laid down in the Montevideo Convention,[154] namely, a permanent population, a defined
territory, a government, and a capacity to enter into relations with other states.

Even assuming arguendo that the MOA-AD would not necessarily sever any portion of Philippine territory, the
spirit animating it which has betrayed itself by its use of the concept of association runs counter to the national
sovereignty and territorial integrity of the Republic.
The defining concept underlying the relationship between the national government and the BJE being itself
contrary to the present Constitution, it is not surprising that many of the specific provisions of the MOA-AD
on the formation and powers of the BJE are in conflict with the Constitution and the laws.

Article X, Section 18 of the Constitution provides that [t]he creation of the autonomous region shall be effective
when approved by a majority of the votes cast by the constituent units in a plebiscite called for the purpose,
provided that only provinces, cities, and geographic areas voting favorably in such plebiscite shall be
included in the autonomous region. (Emphasis supplied)

As reflected above, the BJE is more of a state than an autonomous region. But even assuming that it is covered by
the term autonomous region in the constitutional provision just quoted, the MOA-AD would still be in conflict with
it. Under paragraph 2(c) on TERRITORY in relation to 2(d) and 2(e), the present geographic area of the ARMM and,
in addition, the municipalities of Lanao del Norte which voted for inclusion in the ARMM during the 2001
plebiscite Baloi, Munai, Nunungan, Pantar, Tagoloan and Tangkal are automatically part of the BJE without need of
another plebiscite, in contrast to the areas under Categories A and B mentioned earlier in the overview. That the
present components of the ARMM and the above-mentioned municipalities voted for inclusion therein in 2001,
however, does not render another plebiscite unnecessary under the Constitution, precisely because what these
areas voted for then was their inclusion in the ARMM, not the BJE.

The MOA-AD, moreover, would not


comply with Article X, Section 20 of
the Constitution

since that provision defines the powers of autonomous regions as follows:

SECTION 20. Within its territorial jurisdiction and subject to the provisions of this Constitution and national laws,
the organic act of autonomous regions shall provide for legislative powers over:

(1) Administrative organization;


(2) Creation of sources of revenues;
(3) Ancestral domain and natural resources;
(4) Personal, family, and property relations;
(5) Regional urban and rural planning development;
(6) Economic, social, and tourism development;
(7) Educational policies;
(8) Preservation and development of the cultural heritage; and
(9) Such other matters as may be authorized by law for the promotion of the general welfare of the people of the
region. (Underscoring supplied)

Again on the premise that the BJE may be regarded as an autonomous region, the MOA-AD would require an
amendment that would expand the above-quoted provision. The mere passage of new legislation pursuant to sub-
paragraph No. 9 of said constitutional provision would not suffice, since any new law that might vest in the BJE the
powers found in the MOA-AD must, itself, comply with other provisions of the Constitution. It would not do, for
instance, to merely pass legislation vesting the BJE with treaty-making power in order to accommodate paragraph
4 of the strand on RESOURCES which states: The BJE is free to enter into any economic cooperation and trade
relations with foreign countries: provided, however, that such relationships and understandings do not include
aggression against the Government of the Republic of the Philippines x x x. Under our constitutional system, it is
only the President who has that power. Pimentel v. Executive Secretary[155] instructs:

In our system of government, the President, being the head of state, is regarded as the sole organ and authority
in external relations and is the country's sole representative with foreign nations. As the chief architect of
foreign policy, the President acts as the country's mouthpiece with respect to international affairs. Hence, the
President is vested with the authority to deal with foreign states and governments, extend or withhold
recognition, maintain diplomatic relations, enter into treaties, and otherwise transact the business of
foreign relations. In the realm of treaty-making, the President has the sole authority to negotiate with
other states. (Emphasis and underscoring supplied)

Article II, Section 22 of the Constitution must also be amended if the scheme envisioned in the MOA-AD is
to be effected. That constitutional provision states: The State recognizes and promotes the rights of indigenous
cultural communities within the framework of national unity and development. (Underscoring
supplied) An associativearrangement does not uphold national unity. While there may be a semblance of unity
because of the associative ties between the BJE and the national government, the act of placing a portion of
Philippine territory in a status which, in international practice, has generally been a preparation for independence,
is certainly not conducive to nationalunity.

Besides being irreconcilable with the Constitution, the MOA-AD is also inconsistent with prevailing statutory
law, among which are R.A. No. 9054[156] or the Organic Act of the ARMM, and the IPRA.[157]

Article X, Section 3 of the Organic Act of the ARMM is a bar to the adoption of the definition of Bangsamoro
people used in the MOA-AD. Paragraph 1 on CONCEPTS AND PRINCIPLES states:

1. It is the birthright of all Moros and all Indigenous peoples of Mindanao to identify themselves and be
accepted as Bangsamoros. The Bangsamoro people refers to those who are natives or original inhabitants of
Mindanao and its adjacent islands including Palawan and the Sulu archipelago at the time of conquest or
colonization of its descendants whether mixed or of full blood. Spouses and their descendants are classified as
Bangsamoro. The freedom of choice of the Indigenous people shall be respected. (Emphasis and underscoring
supplied)

This use of the term Bangsamoro sharply contrasts with that found in the Article X, Section 3 of the Organic Act,
which, rather than lumping together the identities of the Bangsamoro and other indigenous peoples living in
Mindanao, clearly distinguishes between Bangsamoro people and Tribal peoples, as follows:

As used in this Organic Act, the phrase indigenous cultural community refers to Filipino citizens residing in the
autonomous region who are:

(a) Tribal peoples. These are citizens whose social, cultural and economic conditions distinguish them from other
sectors of the national community; and

(b) Bangsa Moro people. These are citizens who are believers in Islam and who have retained some or all of
their own social, economic, cultural, and political institutions.

Respecting the IPRA, it lays down the prevailing procedure for the delineation and recognition of ancestral
domains. The MOA-ADs manner of delineating the ancestral domain of the Bangsamoro people is a clear departure
from that procedure. By paragraph 1 of TERRITORY, the Parties simply agree that, subject to the delimitations in
the agreed Schedules, [t]he Bangsamoro homeland and historic territory refer to the land mass as well as the
maritime, terrestrial, fluvial and alluvial domains, and the aerial domain, the atmospheric space above it,
embracing the Mindanao-Sulu-Palawan geographic region.

Chapter VIII of the IPRA, on the other hand, lays down a detailed procedure, as illustrated in the following
provisions thereof:

SECTION 52. Delineation Process. The identification and delineation of ancestral domains shall be done in
accordance with the following procedures:

xxxx
b) Petition for Delineation. The process of delineating a specific perimeter may be initiated by the NCIP with the
consent of the ICC/IP concerned, or through a Petition for Delineation filed with the NCIP, by a majority of the
members of the ICCs/IPs;

c) Delineation Proper. The official delineation of ancestral domain boundaries including census of all community
members therein, shall be immediately undertaken by the Ancestral Domains Office upon filing of the application
by the ICCs/IPs concerned. Delineation will be done in coordination with the community concerned and shall at all
times include genuine involvement and participation by the members of the communities concerned;

d) Proof Required. Proof of Ancestral Domain Claims shall include the testimony of elders or community under
oath, and other documents directly or indirectly attesting to the possession or occupation of the area since time
immemorial by such ICCs/IPs in the concept of owners which shall be any one (1) of the following authentic
documents:

1) Written accounts of the ICCs/IPs customs and traditions;

2) Written accounts of the ICCs/IPs political structure and institution;

3) Pictures showing long term occupation such as those of old improvements, burial grounds, sacred places and old
villages;

4) Historical accounts, including pacts and agreements concerning boundaries entered into by the ICCs/IPs
concerned with other ICCs/IPs;

5) Survey plans and sketch maps;

6) Anthropological data;

7) Genealogical surveys;

8) Pictures and descriptive histories of traditional communal forests and hunting grounds;

9) Pictures and descriptive histories of traditional landmarks such as mountains, rivers, creeks, ridges, hills,
terraces and the like; and

10) Write-ups of names and places derived from the native dialect of the community.

e) Preparation of Maps. On the basis of such investigation and the findings of fact based thereon, the Ancestral
Domains Office of the NCIP shall prepare a perimeter map, complete with technical descriptions, and a description
of the natural features and landmarks embraced therein;

f) Report of Investigation and Other Documents. A complete copy of the preliminary census and a report of
investigation, shall be prepared by the Ancestral Domains Office of the NCIP;

g) Notice and Publication. A copy of each document, including a translation in the native language of the ICCs/IPs
concerned shall be posted in a prominent place therein for at least fifteen (15) days. A copy of the document shall
also be posted at the local, provincial and regional offices of the NCIP, and shall be published in a newspaper of
general circulation once a week for two (2) consecutive weeks to allow other claimants to file opposition thereto
within fifteen (15) days from date of such publication: Provided, That in areas where no such newspaper exists,
broadcasting in a radio station will be a valid substitute: Provided, further, That mere posting shall be deemed
sufficient if both newspaper and radio station are not available;

h) Endorsement to NCIP. Within fifteen (15) days from publication, and of the inspection process, the Ancestral
Domains Office shall prepare a report to the NCIP endorsing a favorable action upon a claim that is deemed to have
sufficient proof. However, if the proof is deemed insufficient, the Ancestral Domains Office shall require the
submission of additional evidence: Provided, That the Ancestral Domains Office shall reject any claim that is
deemed patently false or fraudulent after inspection and verification: Provided, further, That in case of rejection,
the Ancestral Domains Office shall give the applicant due notice, copy furnished all concerned, containing the
grounds for denial. The denial shall be appealable to the NCIP: Provided, furthermore, That in cases where there
are conflicting claims among ICCs/IPs on the boundaries of ancestral domain claims, the Ancestral Domains Office
shall cause the contending parties to meet and assist them in coming up with a preliminary resolution of the
conflict, without prejudice to its full adjudication according to the section below.

xxxx
To remove all doubts about the irreconcilability of the MOA-AD with the present legal system, a discussion of not
only the Constitution and domestic statutes, but also of international law is in order, for

Article II, Section 2 of the Constitution states that the Philippines adopts the generally accepted principles
of international law as part of the law of the land.

Applying this provision of the Constitution, the Court, in Mejoff v. Director of Prisons,[158] held that the Universal
Declaration of Human Rights is part of the law of the land on account of which it ordered the release on bail of a
detained alien of Russian descent whose deportation order had not been executed even after two years. Similarly,
the Court in Agustin v. Edu[159] applied the aforesaid constitutional provision to the 1968 Vienna Convention on
Road Signs and Signals.

International law has long recognized the right to self-determination of peoples, understood not merely as the
entire population of a State but also a portion thereof. In considering the question of whether the people of Quebec
had a right to unilaterally secede from Canada, the Canadian Supreme Court in REFERENCE RE SECESSION OF
QUEBEC[160] had occasion to acknowledge that the right of a people to self-determination is now so widely
recognized in international conventions that the principle has acquired a status beyond convention and is
considered a general principle of international law.
Among the conventions referred to are the International Covenant on Civil and Political Rights [161] and the
International Covenant on Economic, Social and Cultural Rights[162] which state, in Article 1 of both covenants, that
all peoples, by virtue of the right of self-determination, freely determine their political status and freely pursue
their economic, social, and cultural development.

The peoples right to self-determination should not, however, be understood as extending to a unilateral right of
secession. A distinction should be made between the right of internal and external self-determination. REFERENCE
RE SECESSION OF QUEBEC is again instructive:

(ii) Scope of the Right to Self-determination

126. The recognized sources of international law establish that the right to self-determination of a people is
normally fulfilled through internal self-determination a peoples pursuit of its political, economic, social
and cultural development within the framework of an existing state. A right to external self-determination
(which in this case potentially takes the form of the assertion of a right to unilateral secession) arises in
only the most extreme of cases and, even then, under carefully defined circumstances. x x x

External self-determination can be defined as in the following statement from the Declaration on Friendly
Relations, supra, as

The establishment of a sovereign and independent State, the free association or integration with an
independent State or the emergence into any other political status freely determined by a people constitute
modes of implementing the right of self-determination by that people. (Emphasis added)

127. The international law principle of self-determination has evolved within a framework of respect for
the territorial integrity of existing states. The various international documents that support the existence of a
peoples right to self-determination also contain parallel statements supportive of the conclusion that the exercise
of such a right must be sufficiently limited to prevent threats to an existing states territorial integrity or the
stability of relations between sovereign states.

x x x x (Emphasis, italics and underscoring supplied)

The Canadian Court went on to discuss the exceptional cases in which the right to external self-determination can
arise, namely, where a people is under colonial rule, is subject to foreign domination or exploitation outside a
colonial context, and less definitely but asserted by a number of commentators is blocked from the meaningful
exercise of its right to internal self-determination. The Court ultimately held that the population of Quebec had no
right to secession, as the same is not under colonial rule or foreign domination, nor is it being deprived of the
freedom to make political choices and pursue economic, social and cultural development, citing that Quebec is
equitably represented in legislative, executive and judicial institutions within Canada, even occupying prominent
positions therein.

The exceptional nature of the right of secession is further exemplified in the REPORT OF THE INTERNATIONAL
COMMITTEE OF JURISTS ON THE LEGAL ASPECTS OF THE AALAND ISLANDS
QUESTION.[163] There, Sweden presented to the Council of the League of Nations the question of whether the
inhabitants of the Aaland Islands should be authorized to determine by plebiscite if the archipelago should remain
under Finnish sovereignty or be incorporated in the kingdom of Sweden. The Council, before resolving the
question, appointed an International Committee composed of three jurists to submit an opinion on the preliminary
issue of whether the dispute should, based on international law, be entirely left to the domestic jurisdiction of
Finland. The Committee stated the rule as follows:

x x x [I]n the absence of express provisions in international treaties, the right of disposing of national territory
is essentially an attribute of the sovereignty of every State. Positive International Law does not recognize
the right of national groups, as such, to separate themselves from the State of which they form part by the
simple expression of a wish, any more than it recognizes the right of other States to claim such a
separation. Generally speaking, the grant or refusal of the right to a portion of its population of determining
its own political fate by plebiscite or by some other method, is, exclusively, an attribute of the sovereignty
of every State which is definitively constituted. A dispute between two States concerning such a question, under
normal conditions therefore, bears upon a question which International Law leaves entirely to the domestic
jurisdiction of one of the States concerned. Any other solution would amount to an infringement of sovereign rights
of a State and would involve the risk of creating difficulties and a lack of stability which would not only be contrary
to the very idea embodied in term State, but would also endanger the interests of the international community. If
this right is not possessed by a large or small section of a nation, neither can it be held by the State to which the
national group wishes to be attached, nor by any other State. (Emphasis and underscoring supplied)

The Committee held that the dispute concerning the Aaland Islands did not refer to a question which is left by
international law to the domestic jurisdiction of Finland, thereby applying the exception rather than the rule
elucidated above. Its ground for departing from the general rule, however, was a very narrow one, namely,
the Aaland Islandsagitation originated at a time when Finland was undergoing drastic political transformation. The
internal situation of Finland was, according to the Committee, so abnormal that, for a considerable time, the
conditions required for the formation of a sovereign State did not exist. In the midst of revolution, anarchy, and
civil war, the legitimacy of the Finnish national government was disputed by a large section of the people, and it
had, in fact, been chased from the capital and forcibly prevented from carrying out its duties.The armed camps and
the police were divided into two opposing forces. In light of these circumstances, Finland was not, during the
relevant time period, a definitively constituted sovereign state. The Committee, therefore, found that Finland did
not possess the right to withhold from a portion of its population the option to separate itself a right which
sovereign nations generally have with respect to their own populations.

Turning now to the more specific category of indigenous peoples, this term has been used, in scholarship as well as
international, regional, and state practices, to refer to groups with distinct cultures, histories, and connections to
land (spiritual and otherwise) that have been forcibly incorporated into a larger governing society. These groups
are regarded as indigenous since they are the living descendants of pre-invasion inhabitants of lands now
dominated by others. Otherwise stated, indigenous peoples, nations, or communities are culturally distinctive
groups that find themselves engulfed by settler societies born of the forces of empire and conquest.[164] Examples of
groups who have been regarded as indigenous peoples are the Maori of New Zealand and the aboriginal peoples
of Canada.

As with the broader category of peoples, indigenous peoples situated within states do not have a general right to
independence or secession from those states under international law,[165] but they do have rights amounting to
what was discussed above as the right to internal self-determination.

In a historic development last September 13, 2007, the UN General Assembly adopted the United Nations
Declaration on the Rights of Indigenous Peoples (UN DRIP) throughGeneral Assembly Resolution 61/295. The vote
was 143 to 4, the Philippines being included among those in favor, and the four voting against
being Australia, Canada, New Zealand, and the U.S. The Declaration clearly recognized the right of indigenous
peoples to self-determination, encompassing the right to autonomy or self-government, to wit:

Article 3

Indigenous peoples have the right to self-determination. By virtue of that right they freely determine their
political status and freely pursue their economic, social and cultural development.

Article 4

Indigenous peoples, in exercising their right to self-determination, have the right to autonomy or self-
government in matters relating to their internal and local affairs, as well as ways and means for financing
their autonomous functions.

Article 5

Indigenous peoples have the right to maintain and strengthen their distinct political, legal, economic, social and
cultural institutions, while retaining their right to participate fully, if they so choose, in the political, economic,
social and cultural life of the State.

Self-government, as used in international legal discourse pertaining to indigenous peoples, has been understood as
equivalent to internal self-determination.[166] The extent of self-determination provided for in the UN DRIP is more
particularly defined in its subsequent articles, some of which are quoted hereunder:
Article 8
1. Indigenous peoples and individuals have the right not to be subjected to forced assimilation or destruction of
their culture.
2. States shall provide effective mechanisms for prevention of, and redress for:
(a) Any action which has the aim or effect of depriving them of their integrity as distinct peoples, or of
their cultural values or ethnic identities;
(b) Any action which has the aim or effect of dispossessing them of their lands, territories or resources;
(c) Any form of forced population transfer which has the aim or effect of violating or undermining any of
their rights;
(d) Any form of forced assimilation or integration;
(e) Any form of propaganda designed to promote or incite racial or ethnic discrimination directed against
them.
Article 21

1. Indigenous peoples have the right, without discrimination, to the improvement of their economic and social
conditions, including, inter alia, in the areas of education, employment, vocational training and retraining, housing,
sanitation, health and social security.
2. States shall take effective measures and, where appropriate, special measures to ensure continuing
improvement of their economic and social conditions. Particular attention shall be paid to the rights and special
needs of indigenous elders, women, youth, children and persons with disabilities.

Article 26

1. Indigenous peoples have the right to the lands, territories and resources which they have traditionally
owned, occupied or otherwise used or acquired.
2. Indigenous peoples have the right to own, use, develop and control the lands, territories and resources that they
possess by reason of traditional ownership or other traditional occupation or use, as well as those which they have
otherwise acquired.
3. States shall give legal recognition and protection to these lands, territories and resources. Such recognition shall
be conducted with due respect to the customs, traditions and land tenure systems of the indigenous peoples
concerned.

Article 30

1. Military activities shall not take place in the lands or territories of indigenous peoples, unless justified by a
relevant public interest or otherwise freely agreed with or requested by the indigenous peoples concerned.

2. States shall undertake effective consultations with the indigenous peoples concerned, through appropriate
procedures and in particular through their representative institutions, prior to using their lands or territories for
military activities.

Article 32

1. Indigenous peoples have the right to determine and develop priorities and strategies for the development or use
of their lands or territories and other resources.

2. States shall consult and cooperate in good faith with the indigenous peoples concerned through their own
representative institutions in order to obtain their free and informed consent prior to the approval of any project
affecting their lands or territories and other resources, particularly in connection with the development, utilization
or exploitation of mineral, water or other resources.

3. States shall provide effective mechanisms for just and fair redress for any such activities, and appropriate
measures shall be taken to mitigate adverse environmental, economic, social, cultural or spiritual impact.

Article 37

1. Indigenous peoples have the right to the recognition, observance and enforcement of treaties, agreements and
other constructive arrangements concluded with States or their successors and to have States honour and respect
such treaties, agreements and other constructive arrangements.

2. Nothing in this Declaration may be interpreted as diminishing or eliminating the rights of indigenous peoples
contained in treaties, agreements and other constructive arrangements.

Article 38

States in consultation and cooperation with indigenous peoples, shall take the appropriate measures, including
legislative measures, to achieve the ends of this Declaration.

Assuming that the UN DRIP, like the Universal Declaration on Human Rights, must now be regarded as embodying
customary international law a question which the Court need not definitively resolve here the obligations
enumerated therein do not strictly require the Republic to grant the Bangsamoro people, through the
instrumentality of the BJE, the particular rights and powers provided for in the MOA-AD. Even the more specific
provisions of the UN DRIP are general in scope, allowing for flexibility in its application by the different States.
There is, for instance, no requirement in the UN DRIP that States now guarantee indigenous peoples their own
police and internal security force. Indeed, Article 8 presupposes that it is the State which will provide protection
for indigenous peoples against acts like the forced dispossession of their lands a function that is normally
performed by police officers. If the protection of a right so essential to indigenous peoples identity is acknowledged
to be the responsibility of the State, then surely the protection of rights less significant to them as such peoples
would also be the duty of States. Nor is there in the UN DRIP an acknowledgement of the right of indigenous
peoples to the aerial domain and atmospheric space. What it upholds, in Article 26 thereof, is the right of
indigenous peoples to the lands, territories and resources which they have traditionallyowned, occupied or
otherwise used or acquired.

Moreover, the UN DRIP, while upholding the right of indigenous peoples to autonomy, does not obligate States to
grant indigenous peoples the near-independent status of an associated state. All the rights recognized in that
document are qualified in Article 46 as follows:

1. Nothing in this Declaration may be interpreted as implying for any State, people, group or person any right to
engage in any activity or to perform any act contrary to the Charter of the United Nations or construed as
authorizing or encouraging any action which would dismember or impair, totally or in part, the territorial
integrity or political unity of sovereign and independent States.

Even if the UN DRIP were considered as part of the law of the land pursuant to Article II, Section 2 of the
Constitution, it would not suffice to uphold the validity of the MOA-AD so as to render its compliance with other
laws unnecessary.

It is, therefore, clear that the MOA-AD contains numerous provisions that cannot be reconciled with the
Constitution and the laws as presently worded. Respondents proffer, however, that the signing of the MOA-AD
alone would not have entailed any violation of law or grave abuse of discretion on their part, precisely because it
stipulates that the provisions thereof inconsistent with the laws shall not take effect until these laws are amended.
They cite paragraph 7 of the MOA-AD strand on GOVERNANCE quoted earlier, but which is reproduced below for
convenience:

7. The Parties agree that the mechanisms and modalities for the actual implementation of this MOA-AD shall be
spelt out in the Comprehensive Compact to mutually take such steps to enable it to occur effectively.
Any provisions of the MOA-AD requiring amendments to the existing legal framework shall come into force upon
signing of a Comprehensive Compact and upon effecting the necessary changes to the legal framework with due
regard to non derogation of prior agreements and within the stipulated timeframe to be contained in the
Comprehensive Compact.
Indeed, the foregoing stipulation keeps many controversial provisions of the MOA-AD from coming into force until
the necessary changes to the legal framework are effected. While the word Constitution is not mentioned in the
provision now under consideration or anywhere else in the MOA-AD, the term legal framework is certainly
broad enough to include the Constitution.

Notwithstanding the suspensive clause, however, respondents, by their mere act of incorporating in the MOA-AD
the provisions thereof regarding the associative relationship between the BJE and the Central Government, have
already violated the Memorandum of Instructions From The President dated March 1, 2001, which states that the
negotiations shall be conducted in accordance with x x x the principles of the sovereignty and territorial
integrity of the Republic of the Philippines. (Emphasis supplied)Establishing an associative relationship between
the BJE and the Central Government is, for the reasons already discussed, a preparation for independence, or
worse, an implicit acknowledgment of an independent status already prevailing.

Even apart from the above-mentioned Memorandum, however, the MOA-AD is defective because the suspensive
clause is invalid, as discussed below.
The authority of the GRP Peace Negotiating Panel to negotiate with the MILF is founded on E.O. No. 3, Section 5(c),
which states that there shall be established Government Peace Negotiating Panels for negotiations with different
rebel groups to be appointed by the President as her official emissaries to conduct negotiations, dialogues, and
face-to-face discussions with rebel groups. These negotiating panels are to report to the President, through
the PAPP on the conduct and progress of the negotiations.

It bears noting that the GRP Peace Panel, in exploring lasting solutions to the Moro Problem through its
negotiations with the MILF, was not restricted by E.O. No. 3 only to those options available under the laws as they
presently stand. One of the components of a comprehensive peace process, which E.O. No. 3 collectively refers to as
the Paths to Peace, is the pursuit of social, economic, and political reforms which may require new legislation or
even constitutional amendments. Sec. 4(a) of E.O. No. 3, which reiterates Section 3(a), of E.O. No. 125,[167] states:

SECTION 4. The Six Paths to Peace. The components of the comprehensive peace process comprise the processes
known as the Paths to Peace. These component processes are interrelated and not mutually exclusive, and must
therefore be pursued simultaneously in a coordinated and integrated fashion. They shall include, but may not be
limited to, the following:

a. PURSUIT OF SOCIAL, ECONOMIC AND POLITICAL REFORMS. This component involves the vigorous
implementation of various policies, reforms, programs and projects aimed at addressing the root causes of
internal armed conflicts and social unrest. This may require administrative action, new legislation or even
constitutional amendments.

x x x x (Emphasis supplied)

The MOA-AD, therefore, may reasonably be perceived as an attempt of respondents to address, pursuant to this
provision of E.O. No. 3, the root causes of the armed conflict in Mindanao. The E.O. authorized them to think outside
the box, so to speak. Hence, they negotiated and were set on signing the MOA-AD that included various social,
economic, and political reforms which cannot, however, all be accommodated within the present legal framework,
and which thus would require new legislation and constitutional amendments.

The inquiry on the legality of the suspensive clause, however, cannot stop here, because it must be asked

whether the President herself may exercise the power delegated to the GRP Peace Panel under E.O. No. 3,
Sec. 4(a).
The President cannot delegate a power that she herself does not possess. May the President, in the course of peace
negotiations, agree to pursue reforms that would require new legislation and constitutional amendments, or
should the reforms be restricted only to those solutions which the present laws allow? The answer to this question
requires a discussion of

the extent of the Presidents power to conduct peace negotiations.

That the authority of the President to conduct peace negotiations with rebel groups is not explicitly mentioned in
the Constitution does not mean that she has no such authority. In Sanlakas v. Executive Secretary,[168] in issue was
the authority of the President to declare a state of rebellion an authority which is not expressly provided for in the
Constitution. The Court held thus:

In her ponencia in Marcos v. Manglapus, Justice Cortes put her thesis into jurisprudence. There, the Court, by a slim
8-7 margin, upheld the President's power to forbid the return of her exiled predecessor. The rationale for the
majority's ruling rested on the President's

. . . unstated residual powers which are implied from the grant of executive power and which are necessary
for her to comply with her duties under the Constitution. The powers of the President are not limited to
what are expressly enumerated in the article on the Executive Department and in scattered provisions of
the Constitution. This is so, notwithstanding the avowed intent of the members of the Constitutional Commission
of 1986 to limit the powers of the President as a reaction to the abuses under the regime of Mr. Marcos, for the
result was a limitation of specific powers of the President, particularly those relating to the commander-in-chief
clause, but not a diminution of the general grant of executive power.
Thus, the President's authority to declare a state of rebellion springs in the main from her powers as chief
executive and, at the same time, draws strength from her Commander-in-Chief powers. x x x (Emphasis and
underscoring supplied)
Similarly, the Presidents power to conduct peace negotiations is implicitly included in her powers as Chief
Executive and Commander-in-Chief. As Chief Executive, the President has the general responsibility to promote
public peace, and as Commander-in-Chief, she has the more specific duty to prevent and suppress rebellion and
lawless violence.[169]

As the experience of nations which have similarly gone through internal armed conflict will show, however, peace
is rarely attained by simply pursuing a military solution.Oftentimes, changes as far-reaching as a fundamental
reconfiguration of the nations constitutional structure is required. The observations of Dr. Kirsti Samuels are
enlightening, to wit:

x x x [T]he fact remains that a successful political and governance transition must form the core of any post-conflict
peace-building mission. As we have observed in Liberia and Haiti over the last ten years, conflict cessation without
modification of the political environment, even where state-building is undertaken through technical electoral
assistance and institution- or capacity-building, is unlikely to succeed. On average, more than 50 percent of states
emerging from conflict return to conflict. Moreover, a substantial proportion of transitions have resulted in weak
or limited democracies.

The design of a constitution and its constitution-making process can play an important role in the political and
governance transition. Constitution-making after conflict is an opportunity to create a common vision of the future
of a state and a road map on how to get there. The constitution can be partly a peace agreement and partly a
framework setting up the rules by which the new democracy will operate.[170]
In the same vein, Professor Christine Bell, in her article on the nature and legal status of peace agreements,
observed that the typical way that peace agreements establish or confirm mechanisms for demilitarization and
demobilization is by linking them to new constitutional structures addressing governance, elections, and legal
and human rights institutions.[171]

In the Philippine experience, the link between peace agreements and constitution-making has been recognized by
no less than the framers of the Constitution. Behind the provisions of the Constitution on autonomous
regions[172] is the framers intention to implement a particular peace agreement, namely, the Tripoli Agreement of
1976 between the GRP and the MNLF, signed by then Undersecretary of National Defense Carmelo Z. Barbero and
then MNLF Chairman Nur Misuari.

MR. ROMULO. There are other speakers; so, although I have some more questions, I will reserve my right to ask
them if they are not covered by the other speakers. I have only two questions.
I heard one of the Commissioners say that local autonomy already exists in the Muslim region; it is working
very well; it has, in fact, diminished a great deal of the problems. So, my question is: since that already exists,
why do we have to go into something new?

MR. OPLE. May I answer that on behalf of Chairman Nolledo. Commissioner Yusup Abubakar is right that certain
definite steps have been taken to implement the provisions of the Tripoli Agreement with respect to an
autonomous region in Mindanao. This is a good first step, but there is no question that this is merely a
partial response to the Tripoli Agreement itself and to the fuller standard of regional autonomy
contemplated in that agreement, and now by state policy.[173] (Emphasis supplied)

The constitutional provisions on autonomy and the statutes enacted pursuant to them have, to the credit of their
drafters, been partly successful. Nonetheless, the Filipino people are still faced with the reality of an on-going
conflict between the Government and the MILF. If the President is to be expected to find means for bringing this
conflict to an end and to achieve lasting peace in Mindanao, then she must be given the leeway to explore, in the
course of peace negotiations, solutions that may require changes to the Constitution for their
implementation. Being uniquely vested with the power to conduct peace negotiations with rebel groups, the
President is in a singular position to know the precise nature of their grievances which, if resolved, may bring an
end to hostilities.

The President may not, of course, unilaterally implement the solutions that she considers viable, but she may not
be prevented from submitting them as recommendations to Congress, which could then, if it is minded, act upon
them pursuant to the legal procedures for constitutional amendment and revision. In particular, Congress would
have the option, pursuant to Article XVII, Sections 1 and 3 of the Constitution, to propose the recommended
amendments or revision to the people, call a constitutional convention, or submit to the electorate the question of
calling such a convention.

While the President does not possess constituent powers as those powers may be exercised only by Congress, a
Constitutional Convention, or the people through initiative and referendum she may submit proposals for
constitutional change to Congress in a manner that does not involve the arrogation of constituent powers.

In Sanidad v. COMELEC,[174] in issue was the legality of then President Marcos act of directly submitting proposals
for constitutional amendments to a referendum, bypassing the interim National Assembly which was the body
vested by the 1973 Constitution with the power to propose such amendments. President Marcos, it will be recalled,
never convened the interim National Assembly. The majority upheld the Presidents act, holding that the urges of
absolute necessity compelled the President as the agent of the people to act as he did, there being no interim
National Assembly to propose constitutional amendments. Against this ruling, Justices Teehankee and Muoz Palma
vigorously dissented.The Courts concern at present, however, is not with regard to the point on which it was then
divided in that controversial case, but on that which was not disputed by either side.

Justice Teehankees dissent,[175] in particular, bears noting. While he disagreed that the President may directly
submit proposed constitutional amendments to a referendum, implicit in his opinion is a recognition that he would
have upheld the Presidents action along with the majority had the President convened the interim National
Assembly and coursed his proposals through it. Thus Justice Teehankee opined:

Since the Constitution provides for the organization of the essential departments of government, defines and
delimits the powers of each and prescribes the manner of the exercise of such powers, and the constituent power
has not been granted to but has been withheld from the President or Prime Minister, it follows that the Presidents
questioned decrees proposing and submitting constitutional amendments directly to the people (without the
intervention of the interim National Assembly in whom the power is expressly vested) are devoid of
constitutional and legal basis.[176] (Emphasis supplied)

From the foregoing discussion, the principle may be inferred that the President in the course of conducting peace
negotiations may validly consider implementing even those policies that require changes to the Constitution, but
she may not unilaterally implement them without the intervention of Congress, or act in any way as if the
assent of that body were assumed as a certainty.

Since, under the present Constitution, the people also have the power to directly propose amendments through
initiative and referendum, the President may also submit her recommendations to the people, not as a formal
proposal to be voted on in a plebiscite similar to what President Marcos did in Sanidad, but for their independent
consideration of whether these recommendations merit being formally proposed through initiative.

These recommendations, however, may amount to nothing more than the Presidents suggestions to the people, for
any further involvement in the process of initiative by the Chief Executive may vitiate its character as a
genuine peoples initiative. The only initiative recognized by the Constitution is that which truly proceeds from the
people. As the Court stated in Lambino v. COMELEC:[177]
The Lambino Group claims that their initiative is the people's voice. However, the Lambino Group unabashedly
states in ULAP Resolution No. 2006-02, in the verification of their petition with the COMELEC, that ULAP maintains
its unqualified support to the agenda of Her Excellency President Gloria Macapagal-Arroyo for constitutional
reforms. The Lambino Group thus admits that their people's initiative is an unqualified support to the agenda of
the incumbent President to change the Constitution. This forewarns the Court to be wary of incantations of
people's voice or sovereign will in the present initiative.
It will be observed that the President has authority, as stated in her oath of office,[178] only to preserve and defend
the Constitution. Such presidential power does not, however, extend to allowing her to change the Constitution, but
simply to recommend proposed amendments or revision. As long as she limits herself to recommending these
changes and submits to the proper procedure for constitutional amendments and revision, her mere
recommendation need not be construed as an unconstitutional act.

The foregoing discussion focused on the Presidents authority to propose constitutional amendments, since her
authority to propose new legislation is not in controversy.It has been an accepted practice for Presidents in this
jurisdiction to propose new legislation. One of the more prominent instances the practice is usually done is in the
yearly State of the Nation Address of the President to Congress. Moreover, the annual general appropriations bill
has always been based on the budget prepared by the President, which for all intents and purposes is a proposal
for new legislation coming from the President.[179]

The suspensive clause in the MOA-AD viewed in light of the above-discussed standards

Given the limited nature of the Presidents authority to propose constitutional amendments, she cannot
guarantee to any third party that the required amendments will eventually be put in place, nor even be submitted
to a plebiscite. The most she could do is submit these proposals as recommendations either to Congress or the
people, in whom constituent powers are vested.

Paragraph 7 on Governance of the MOA-AD states, however, that all provisions thereof which cannot be reconciled
with the present Constitution and laws shall come into force upon signing of a Comprehensive Compact and upon
effecting the necessary changes to the legal framework. This stipulation does not bear the marks of a suspensive
condition defined in civil law as a future and uncertain event but of a term. It is not a question of whether the
necessary changes to the legal framework will be effected, but when. That there is no uncertainty being
contemplated is plain from what follows, for the paragraph goes on to state that the contemplated changes shall
be with due regard to non derogation of prior agreements and within the stipulated timeframe to be contained in
the Comprehensive Compact.

Pursuant to this stipulation, therefore, it is mandatory for the GRP to effect the changes to the legal framework
contemplated in the MOA-AD which changes would include constitutional amendments, as discussed earlier. It
bears noting that,

By the time these changes are put in place, the MOA-AD itself would be counted among the prior
agreements from which there could be no derogation.
What remains for discussion in the Comprehensive Compact would merely be the implementing details for these
consensus points and, notably, the deadline for effecting the contemplated changes to the legal framework.

Plainly, stipulation-paragraph 7 on GOVERNANCE is inconsistent with the limits of the Presidents authority to
propose constitutional amendments, it being a virtual guarantee that the Constitution and the laws of the
Republic of the Philippines will certainly be adjusted to conform to all the consensus points found in the MOA-
AD.Hence, it must be struck down as unconstitutional.

A comparison between the suspensive clause of the MOA-AD with a similar provision appearing in the 1996 final
peace agreement between the MNLF and the GRP is most instructive.

As a backdrop, the parties to the 1996 Agreement stipulated that it would be implemented in two phases. Phase
I covered a three-year transitional period involving the putting up of new administrative structures through
Executive Order, such as the Special Zone of Peace and Development (SZOPAD) and the Southern Philippines
Council for Peace and Development (SPCPD), while Phase II covered the establishment of the new regional
autonomous government through amendment or repeal of R.A. No. 6734, which was then the Organic Act of the
ARMM.

The stipulations on Phase II consisted of specific agreements on the structure of the expanded autonomous region
envisioned by the parties. To that extent, they are similar to the provisions of the MOA-AD. There is, however, a
crucial difference between the two agreements. While the MOA-AD virtually guarantees that the necessary
changes to the legal framework will be put in place, the GRP-MNLF final peace agreement states thus:
Accordingly, these provisions [on Phase II] shall be recommended by the GRP to Congress for incorporation in the
amendatory or repealing law.

Concerns have been raised that the MOA-AD would have given rise to a binding international law obligation on the
part of the Philippines to change its Constitution in conformity thereto, on the ground that it may be considered
either as a binding agreement under international law, or a unilateral declaration of the Philippine government to
the international community that it would grant to the Bangsamoro people all the concessions therein
stated. Neither ground finds sufficient support in international law, however.

The MOA-AD, as earlier mentioned in the overview thereof, would have included foreign dignitaries as
signatories. In addition, representatives of other nations were invited to witness its signing in Kuala Lumpur. These
circumstances readily lead one to surmise that the MOA-AD would have had the status of a binding international
agreement had it been signed. An examination of the prevailing principles in international law, however, leads to
the contrary conclusion.

The Decision on CHALLENGE TO JURISDICTION: LOM ACCORD AMNESTY[180] (the Lom Accord case) of the Special
Court of Sierra Leone is enlightening. The Lom Accord was a peace agreement signed on July 7, 1999 between the
Government of Sierra Leone and the Revolutionary United Front (RUF), a rebel group with which the Sierra Leone
Government had been in armed conflict for around eight years at the time of signing. There were non-contracting
signatories to the agreement, among which were the Government of the Togolese Republic, the Economic
Community of West African States, and the UN.

On January 16, 2002, after a successful negotiation between the UN Secretary-General and the Sierra Leone
Government, another agreement was entered into by the UN and that Government whereby the Special Court of
Sierra Leone was established. The sole purpose of the Special Court, an international court, was to try persons who
bore the greatest responsibility for serious violations of international humanitarian law and Sierra Leonean law
committed in the territory of Sierra Leone since November 30, 1996.

Among the stipulations of the Lom Accord was a provision for the full pardon of the members of the RUF with
respect to anything done by them in pursuit of their objectives as members of that organization since the conflict
began.

In the Lom Accord case, the Defence argued that the Accord created an internationally binding obligation not to
prosecute the beneficiaries of the amnesty provided therein, citing, among other things, the participation of foreign
dignitaries and international organizations in the finalization of that agreement. The Special Court, however,
rejected this argument, ruling that the Lome Accord is not a treaty and that it can only create binding obligations
and rights between the parties in municipal law, not in international law. Hence, the Special Court held, it is
ineffective in depriving an international court like it of jurisdiction.

37. In regard to the nature of a negotiated settlement of an internal armed conflict it is easy to assume and to
argue with some degree of plausibility, as Defence counsel for the defendants seem to have done, that the
mere fact that in addition to the parties to the conflict, the document formalizing the settlement is signed
by foreign heads of state or their representatives and representatives of international organizations,
means the agreement of the parties is internationalized so as to create obligations in international law.

xxxx
40. Almost every conflict resolution will involve the parties to the conflict and the mediator or facilitator of the
settlement, or persons or bodies under whose auspices the settlement took place but who are not at all parties to
the conflict, are not contracting parties and who do not claim any obligation from the contracting parties or incur
any obligation from the settlement.

41. In this case, the parties to the conflict are the lawful authority of the State and the RUF which has no
status of statehood and is to all intents and purposes a faction within the state.The non-contracting
signatories of the Lom Agreement were moral guarantors of the principle that, in the terms of Article
XXXIV of the Agreement, this peace agreement is implemented with integrity and in good faith by both
parties. The moral guarantors assumed no legal obligation. It is recalled that the UN by its representative
appended, presumably for avoidance of doubt, an understanding of the extent of the agreement to be implemented
as not including certain international crimes.

42. An international agreement in the nature of a treaty must create rights and obligations regulated by
international law so that a breach of its terms will be a breach determined under international law which will also
provide principle means of enforcement. The Lom Agreement created neither rights nor obligations capable
of being regulated by international law.An agreement such as the Lom Agreement which brings to an end
an internal armed conflict no doubt creates a factual situation of restoration of peace that the international
community acting through the Security Council may take note of. That, however, will not convert it to an
international agreement which creates an obligation enforceable in international, as distinguished from
municipal, law. A breach of the terms of such a peace agreement resulting in resumption of internal armed conflict
or creating a threat to peace in the determination of the Security Council may indicate a reversal of the factual
situation of peace to be visited with possible legal consequences arising from the new situation of conflict
created.Such consequences such as action by the Security Council pursuant to Chapter VII arise from the situation
and not from the agreement, nor from the obligation imposed by it. Such action cannot be regarded as a remedy for
the breach. A peace agreement which settles an internal armed conflict cannot be ascribed the same status
as one which settles an international armed conflict which, essentially, must be between two or more
warring States. The Lom Agreement cannot be characterised as an international instrument. x x x
(Emphasis, italics and underscoring supplied)

Similarly, that the MOA-AD would have been signed by representatives of States and international organizations
not parties to the Agreement would not have sufficed to vest in it a binding character under international law.

In another vein, concern has been raised that the MOA-AD would amount to a unilateral declaration of the
Philippine State, binding under international law, that it would comply with all the stipulations stated therein, with
the result that it would have to amend its Constitution accordingly regardless of the true will of the people. Cited as
authority for this view is Australia v. France,[181] also known as the Nuclear Tests Case, decided by the International
Court of Justice (ICJ).

In the Nuclear Tests Case, Australia challenged before the ICJ the legality of Frances nuclear tests in the South
Pacific. France refused to appear in the case, but public statements from its President, and similar statements from
other French officials including its Minister of Defence, that its 1974 series of atmospheric tests would be its last,
persuaded the ICJ to dismiss the case.[182] Those statements, the ICJ held, amounted to a legal undertaking
addressed to the international community, which required no acceptance from other States for it to become
effective.

Essential to the ICJ ruling is its finding that the French government intended to be bound to the international
community in issuing its public statements, viz:

43. It is well recognized that declarations made by way of unilateral acts, concerning legal or factual situations, may
have the effect of creating legal obligations. Declarations of this kind may be, and often are, very specific. When it
is the intention of the State making the declaration that it should become bound according to its terms, that
intention confers on the declaration the character of a legal undertaking, the State being thenceforth
legally required to follow a course of conduct consistent with the declaration. An undertaking of this kind, if
given publicly, and with an intent to be bound, even though not made within the context of international
negotiations, is binding. In these circumstances, nothing in the nature of a quid pro quo nor any subsequent
acceptance of the declaration, nor even any reply or reaction from other States, is required for the declaration to
take effect, since such a requirement would be inconsistent with the strictly unilateral nature of the juridical act by
which the pronouncement by the State was made.

44. Of course, not all unilateral acts imply obligation; but a State may choose to take up a certain position in
relation to a particular matter with the intention of being boundthe intention is to be ascertained by
interpretation of the act. When States make statements by which their freedom of action is to be limited, a
restrictive interpretation is called for.

xxxx

51. In announcing that the 1974 series of atmospheric tests would be the last, the French Government
conveyed to the world at large, including the Applicant, its intention effectively to terminate these tests. It
was bound to assume that other States might take note of these statements and rely on their being
effective. The validity of these statements and their legal consequences must be considered within the
general framework of the security of international intercourse, and the confidence and trust which are so
essential in the relations among States. It is from the actual substance of these statements, and from the
circumstances attending their making, that the legal implications of the unilateral act must be deduced.The
objects of these statements are clear and they were addressed to the international community as a whole,
and the Court holds that they constitute an undertaking possessing legal effect. The Court
considers *270 that the President of the Republic, in deciding upon the effective cessation of atmospheric tests,
gave an undertaking to the international community to which his words were addressed. x x x (Emphasis and
underscoring supplied)

As gathered from the above-quoted ruling of the ICJ, public statements of a state representative may be construed
as a unilateral declaration only when the following conditions are present: the statements were clearly addressed
to the international community, the state intended to be bound to that community by its statements, and that not
to give legal effect to those statements would be detrimental to the security of international intercourse. Plainly,
unilateral declarations arise only in peculiar circumstances.

The limited applicability of the Nuclear Tests Case ruling was recognized in a later case decided by the ICJ
entitled Burkina Faso v. Mali,[183] also known as the Case Concerning the Frontier Dispute. The public declaration
subject of that case was a statement made by the President of Mali, in an interview by a foreign press agency,
that Maliwould abide by the decision to be issued by a commission of the Organization of African Unity on a
frontier dispute then pending between Mali and Burkina Faso.
Unlike in the Nuclear Tests Case, the ICJ held that the statement of Malis President was not a unilateral act with
legal implications. It clarified that its ruling in the Nuclear Tests case rested on the peculiar circumstances
surrounding the French declaration subject thereof, to wit:

40. In order to assess the intentions of the author of a unilateral act, account must be taken of all the factual
circumstances in which the act occurred. For example, in the Nuclear Tests cases, the Court took the view that
since the applicant States were not the only ones concerned at the possible continuance of atmospheric
testing by the French Government, that Government's unilateral declarations had conveyed to the world at
large, including the Applicant, its intention effectively to terminate these tests (I.C.J. Reports 1974, p. 269,
para. 51; p. 474, para. 53). In the particular circumstances of those cases, the French Government could not
express an intention to be bound otherwise than by unilateral declarations. It is difficult to see how it could
have accepted the terms of a negotiated solution with each of the applicants without thereby jeopardizing
its contention that its conduct was lawful. The circumstances of the present case are radically
different. Here, there was nothing to hinder the Parties from manifesting an intention to accept the binding
character of the conclusions of the Organization of African Unity Mediation Commission by the normal
method: a formal agreement on the basis of reciprocity. Since no agreement of this kind was concluded
between the Parties, the Chamber finds that there are no grounds to interpret the declaration made by Mali's head
of State on 11 April 1975 as a unilateral act with legal implications in regard to the present case. (Emphasis and
underscoring supplied)

Assessing the MOA-AD in light of the above criteria, it would not have amounted to a unilateral declaration on the
part of the Philippine State to the international community. The Philippine panel did not draft the same with the
clear intention of being bound thereby to the international community as a whole or to any State, but only to the
MILF. While there were States and international organizations involved, one way or another, in the negotiation and
projected signing of the MOA-AD, they participated merely as witnesses or, in the case of Malaysia, as facilitator. As
held in the Lom Accord case, the mere fact that in addition to the parties to the conflict, the peace settlement is
signed by representatives of states and international organizations does not mean that the agreement is
internationalized so as to create obligations in international law.

Since the commitments in the MOA-AD were not addressed to States, not to give legal effect to such commitments
would not be detrimental to the security of international intercourse to the trust and confidence essential in the
relations among States.

In one important respect, the circumstances surrounding the MOA-AD are closer to that of Burkina Faso wherein,
as already discussed, the Mali Presidents statement was not held to be a binding unilateral declaration by the
ICJ. As in that case, there was also nothing to hinder the Philippine panel, had it really been its intention to be
bound to other States, to manifest that intention by formal agreement. Here, that formal agreement would have
come about by the inclusion in the MOA-AD of a clear commitment to be legally bound to the international
community, not just the MILF, and by an equally clear indication that the signatures of the participating states-
representatives would constitute an acceptance of that commitment. Entering into such a formal agreement would
not have resulted in a loss of face for the Philippine government before the international community, which was
one of the difficulties that prevented the French Government from entering into a formal agreement with other
countries. That the Philippine panel did not enter into such a formal agreement suggests that it had no intention to
be bound to the international community. On that ground, the MOA-AD may not be considered a unilateral
declaration under international law.

The MOA-AD not being a document that can bind the Philippines under international law notwithstanding,
respondents almost consummated act of guaranteeing amendmentsto the legal framework is, by itself,
sufficient to constitute grave abuse of discretion. The grave abuse lies not in the fact that they considered, as a
solution to the Moro Problem, the creation of a state within a state, but in their brazen willingness to guarantee
that Congress and the sovereign Filipino people would give their imprimatur to their solution. Upholding
such an act would amount to authorizing a usurpation of the constituent powers vested only in Congress, a
Constitutional Convention, or the people themselves through the process of initiative, for the only way that the
Executive can ensure the outcome of the amendment process is through an undue influence or interference with
that process.

The sovereign people may, if it so desired, go to the extent of giving up a portion of its own territory to the Moros
for the sake of peace, for it can change the Constitution in any it wants, so long as the change is not inconsistent
with what, in international law, is known as Jus Cogens.[184] Respondents, however, may not preempt it in that
decision.

SUMMARY

The petitions are ripe for adjudication. The failure of respondents to consult the local government units or
communities affected constitutes a departure by respondents from their mandate under E.O. No. 3. Moreover,
respondents exceeded their authority by the mere act of guaranteeing amendments to the Constitution. Any
alleged violation of the Constitution by any branch of government is a proper matter for judicial review.
As the petitions involve constitutional issues which are of paramount public interest or of transcendental
importance, the Court grants the petitioners, petitioners-in-intervention and intervening respondents the
requisite locus standi in keeping with the liberal stance adopted in David v. Macapagal-Arroyo.

Contrary to the assertion of respondents that the non-signing of the MOA-AD and the eventual dissolution of the
GRP Peace Panel mooted the present petitions, the Court finds that the present petitions provide an exception to
the moot and academic principle in view of (a) the grave violation of the Constitution involved; (b) the
exceptional character of the situation and paramount public interest; (c) the need to formulate controlling
principles to guide the bench, the bar, and the public; and (d) the fact that the case is capable of repetition yet
evading review.

The MOA-AD is a significant part of a series of agreements necessary to carry out the GRP-MILF Tripoli Agreement
on Peace signed by the government and the MILF back in June 2001. Hence, the present MOA-AD can be
renegotiated or another one drawn up that could contain similar or significantly dissimilar provisions compared to
the original.
The Court, however, finds that the prayers for mandamus have been rendered moot in view of the respondents
action in providing the Court and the petitioners with the official copy of the final draft of the MOA-AD and its
annexes.

The peoples right to information on matters of public concern under Sec. 7, Article III of the Constitution is
in splendid symmetry with the state policy of full public disclosure of all its transactions involving public interest
under Sec. 28, Article II of the Constitution. The right to information guarantees the right of the people to demand
information, while Section 28 recognizes the duty of officialdom to give information even if nobody demands. The
complete and effective exercise of the right to information necessitates that its complementary provision on public
disclosure derive the same self-executory nature, subject only to reasonable safeguards or limitations as may be
provided by law.

The contents of the MOA-AD is a matter of paramount public concern involving public interest in the highest
order. In declaring that the right to information contemplates steps and negotiations leading to the consummation
of the contract, jurisprudence finds no distinction as to the executory nature or commercial character of the
agreement.
An essential element of these twin freedoms is to keep a continuing dialogue or process of communication between
the government and the people. Corollary to these twin rights is the design for feedback mechanisms. The right to
public consultation was envisioned to be a species of these public rights.

At least three pertinent laws animate these constitutional imperatives and justify the exercise of the peoples right
to be consulted on relevant matters relating to the peace agenda.

One, E.O. No. 3 itself is replete with mechanics for continuing consultations on both national and local levels and for
a principal forum for consensus-building. In fact, it is the duty of the Presidential Adviser on the Peace Process to
conduct regular dialogues to seek relevant information, comments, advice, and recommendations from peace
partners and concerned sectors of society.

Two, Republic Act No. 7160 or the Local Government Code of 1991 requires all national offices to conduct
consultations before any project or program critical to the environment and human ecology including those that
may call for the eviction of a particular group of people residing in such locality, is implemented therein. The MOA-
AD is one peculiar program that unequivocally and unilaterally vests ownership of a vast territory to the
Bangsamoro people, which could pervasively and drastically result to the diaspora or displacement of a great
number of inhabitants from their total environment.

Three, Republic Act No. 8371 or the Indigenous Peoples Rights Act of 1997 provides for clear-cut procedure for the
recognition and delineation of ancestral domain, which entails, among other things, the observance of the free and
prior informed consent of the Indigenous Cultural Communities/Indigenous Peoples. Notably, the statute does not
grant the Executive Department or any government agency the power to delineate and recognize an ancestral domain
claim by mere agreement or compromise.
The invocation of the doctrine of executive privilege as a defense to the general right to information or the specific
right to consultation is untenable. The various explicit legal provisions fly in the face of executive secrecy. In any
event, respondents effectively waived such defense after it unconditionally disclosed the official copies of the final
draft of the MOA-AD, for judicial compliance and public scrutiny.

IN SUM, the Presidential Adviser on the Peace Process committed grave abuse of discretion when he failed to carry
out the pertinent consultation process, as mandated by E.O. No. 3, Republic Act No. 7160, and Republic Act No.
8371. The furtive process by which the MOA-AD was designed and crafted runs contrary to and in excess of the
legal authority, and amounts to a whimsical, capricious, oppressive, arbitrary and despotic exercise thereof. It
illustrates a gross evasion of positive duty and a virtual refusal to perform the duty enjoined.

The MOA-AD cannot be reconciled with the present Constitution and laws. Not only its specific provisions but the
very concept underlying them, namely, the associative relationship envisioned between the GRP and the
BJE, are unconstitutional, for the concept presupposes that the associated entity is a state and implies that the
same is on its way to independence.

While there is a clause in the MOA-AD stating that the provisions thereof inconsistent with the present legal
framework will not be effective until that framework is amended, the same does not cure its defect. The inclusion
of provisions in the MOA-AD establishing an associative relationship between the BJE and the Central Government
is, itself, a violation of the Memorandum of Instructions From The President dated March 1, 2001, addressed to the
government peace panel. Moreover, as the clause is worded, it virtually guarantees that the necessary amendments
to the Constitution and the laws will eventually be put in place. Neither the GRP Peace Panel nor the President
herself is authorized to make such a guarantee. Upholding such an act would amount to authorizing a usurpation of
the constituent powers vested only in Congress, a Constitutional Convention, or the people themselves through the
process of initiative, for the only way that the Executive can ensure the outcome of the amendment process is
through an undue influence or interference with that process.

While the MOA-AD would not amount to an international agreement or unilateral declaration binding on the
Philippines under international law, respondents act of guaranteeing amendments is, by itself, already a
constitutional violation that renders the MOA-AD fatally defective.

WHEREFORE, respondents motion to dismiss is DENIED. The main and intervening petitions are GIVEN DUE
COURSE and hereby GRANTED.

The Memorandum of Agreement on the Ancestral Domain Aspect of the GRP-MILF Tripoli Agreement on Peace of
2001 is declared CONTRARY TO LAW AND THE CONSTITUTION.

SO ORDERED.