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Consti1 Sovereignty Digest by Ace, Cedie, Kim and Maia

Sovereign Immunity

ISSUE:

China National Machinery vs Santamaria

Whether or not CNMEG is immune from Philippine


laws.

CHINA NATIONAL MACHINERY & EQUIPMENT


CORP. (GROUP), Petitioner,
vs.
HON. CESAR D. SANTAMARIA, et al.

HELD

There are two conflicting concepts of sovereign


immunity, each widely held and firmly established.
According to the classical or absolute theory, a
sovereign cannot, without its consent, be made a
FACTS:
respondent in the courts of another sovereign.
According to the newer or restrictive theory, the
On 14 September 2002, petitioner China National immunity of the sovereign is recognized only with
Machinery & Equipment Corp. (Group) (CNMEG),regard to public acts or acts jure imperii of a state, but
represented by its chairperson, Ren Hongbin, entered not with regard to private acts or acts jure gestionis.
into a Memorandum of Understanding with theSince the Philippines adheres to the restrictive theory,
North Luzon Railways Corporation (Northrail),it is crucial to ascertain the legal nature of the act
represented by its president, Jose L. Cortes, Jr. for the involved whether the entity claiming immunity
conduct of a feasibility study on a possible railway line performs governmental, as opposed to proprietary,
from Manila to San Fernando, La Union (the Northrail functions.
Project).
The restrictive application of State immunity is proper
On 30 August 2003, the Export Import Bank ofonly when the proceedings arise out of commercial
China (EXIM Bank) and the Department of Financetransactions of the foreign sovereign, its commercial
of
the
Philippines (DOF) entered into aactivities or economic affairs.

Memorandum of Understanding (Aug 30 MOU),


wherein China agreed to extend Preferential
Buyers Credit to the Philippine government to
finance the Northrail Project. The ChineseThe Contract Agreement, however, does not on its
government designated EXIM Bank as the lender,own reveal whether the construction of the Luzon
while the Philippine government named the DOF as railways was meant to be a proprietary endeavor but
the borrower. Under the Aug 30 MOU, EXIM Bank clearly, it was CNMEG that initiated the undertaking,
agreed to extend an amount not exceeding USD and not the Chinese government.
400,000,000 in favor of the DOF, payable in 20 years,
with a 5-year grace period, and at the rate of 3% per
annum. On 30 December 2003, Northrail and CNMEG
executed a Contract Agreement for the construction Also, despite petitioners claim that the EXIM Bank
of Section I, Phase I of the North Luzon Railway extended financial assistance to Northrail because the
System from Caloocan to Malolos on a turnkey basisbank was mandated by the Chinese government, and
(the Contract Agreement). The contract price for thenot because of any motivation to do business in the
Northrail Project was pegged at USD 421,050,000.
Philippines,38 it is clear from the foregoing provisions
that the Northrail Project
commercial transaction.

was

purely

On 13 February 2006, respondents filed a Complaint


for Annulment of Contract and Injunction with Urgent
Motion for Summary Hearing to Determine theThe Contract Agreement was not concluded between
Existence of Facts and Circumstances. However, the Philippines and China, but between Northrail and
petitioner alleged that contract was between the CNMEG. By the terms of the Contract Agreement,
sovereign of the Phils and China, thus, it should be Northrail is a government-owned or -controlled
entitled for immunity.
corporation, while CNMEG is a corporation duly
organized and created under the laws of the Peoples
Republic of China. Thus, both Northrail and CNMEG

entered into the Contract Agreement as entities with


personalities distinct and separate from the Philippine
and Chinese governments, respectively.

Thus, the instant Petition is DENIED by the SC.


Petitioner China National Machinery & Equipment
Corp. (Group) is not entitled to immunity from suit,
and the Contract Agreement is not an executive
agreement.

Despite the two demand letters sent by POVI,


TESDA failed to pay their balance P35,735,500.
This prompted PROVI to file writ of preliminary
attachment/garnishment against TESDA.
RTC favored the garnishment and ordered the
manager of the Land Bank of the Philippines to
produce TESDAs bank statement
CA set aside the RTCs orders after finding
out the following:
o A) TESDAs funds are public in nature
and therefore exempt from garnishment
o B) TESDAs purchase of the PVC cards
was necessary from garnishment

Issue:
Classical or Absolute Theory - a sovereign cannot,
without its consent, be made a respondent in the
1. Whether or not the writ of attachment against
courts of another sovereign
TESDA and its funds, to cover PROVIs claim against
TESDA is valid?
2. Whether or not TESDA is covered by the principle
Newer or Restrictive theory, the immunity of theof State Immunity?
sovereign is recognized only with regard to public acts
or acts jure imperii of a state, but not with regard to Holding:
private acts or acts jure gestionis.
1. No
2. Yes

Suits Against Government Instrumentalities


Professional Video Inc. vs TESDA

Ruling:
1. Public funds cannot be the object of
garnishment proceedings even if the consent
to be sued had been previously granted and
the state liability adjudged.

PROVI entity engaged in the sale of high


Even assuming that TESDA entered into an
technology equipment, information technology implied consent with PROVI to be sued, the funds are
products and broadcast devices
still public in nature.
TESDA is an instrumentality of the
government established under RA 7796
2. TESDA is an unincorporated instrumentally of
(TESDA Act of 1994) attached to DOLE.
the government, directly attached to the DOLE
o Provides skills standardization, testing
through the participation of the Secretary of
and certification
Labor as the Chairman. As an unincorporated
instrumentality operating under a specific
To fulfil the mandate of TESDA, it sought to
charter, it is equipped with both express and
issue security-printed certification and/or
implied powers and all STATE IMMUNITIES
PVC cards to trainees who passed the
FULLY APPLY TO IT.
certification
TESDA Pre-qualification Bids Committee (PBAC)
conducted 2 public biddings for the printing Principle of Sec 3 Art 16 (State Immunity
Principle)
and encoding of PVC card. PBAC
recommended that TESDA enter into a
- the principle is based on the very essence of
negotiated contract with PROVI
SOVEREIGNTY and PUBLIC POLICY.
PROVI signed and executed their Contract
Agreement Project: PVD ID Card amounting to Sovereignty there can be no legal right as
P39,475,00
against the authority that makes the law on which
Both parties executed an Addendum to the
the right depends
contract agreement.
Public Policy public service would be hindered,
TESDA paid 30% of the total cost of the
and the public endangered if the sovereign
materials 30 days after the receipt and
authority could be subjected to law suits at the
acceptance of the contracted supplies with the
instance of every citizen, and consequently
balance payable within 30days
controlled in the uses and disposition of the means

Consti1 Sovereignty Digest by Ace, Cedie, Kim and Maia


required for the proper administration of the
government.
Forms of State Immunity
1. Suit against the Republic by name
2. Suit against an unincorporated government
agency
3. Suit against a government agency covered by
a charter with respect to the agencys
performance of governmental functions
4. Suit that on its face is against a government
officer

non-payment of 13th month pay, and various other


claims.
(B) NLRC-NCR-00-05-03587-93, the second labor case,
involved a claim for separation pay, 13th month pay
and
other
benefits
lodged
by
PANTRANCO
ASSOCIATION OF CONCERNED EMPLOYEES UNION
(PACEU) against PNEI, APT and DOTC.

(C) The complaint in NLRC CASE NO. SUB-RAB-01-127-0225-93 was initiated by respondent Antonio
Cabugao before the Sub-Regional Arbitration Branch
of NLRC in Dagupan City against PNEI and APT
similarly involving claims for separation pay, 13th
month pay and other benefits. However, the SolicitorGeneral initially points out that APT, being an agency
Suits Against Government Instrumentalities
or instrumentality of the Republic of the Philippines, is
REPUBLIC OF THE PHILIPPINES, represented by immune from suit.
ASSET PRIVATIZATION TRUST, petitioner,
ISSUES:
Whether or not PNEI and APT are liable
vs.
NATIONAL LABOR RELATIONS COMMISSION, to the complainants
Whether or not APT is immune from suit.
HON. EDUARDO J. CARPIO, and PANTRANCO
ASSOCIATION OF CONCERNED EMPLOYEES
HELD:
UNION, respondents.
FACTS:

The court On 14 February 1994, Labor Arbiter Eduardo


Carpio rendered a decision holding PNEI and APT
In December of 1978, the full ownership of PNEI was jointly and solidarily liable, viz:
transferred to its creditor, the National Investment
Development Corporation ("NIDC"), a subsidiary of the WHEREFORE, premises considered, judgment is
Philippine National Bank ("PNB"), following the latter'shereby rendered ordering respondents to jointly and
foreclosure of PNEI assets. PNEI was one amongseverally pay all the covered employees and became
several companies placed under sequestration by thefinal and executory since no appeal was interposed
Presidential Commission on Good Governmentby either the PNEI or the APT.
("PCGG") shortly after the historic 1986 events in
EDSA. Some time in January, 1988, the sequestration
order was lifted to give way to the sale of PNEI by the
APT which, in the meanwhile, had taken over the
On 21 July 1993, Labor Arbiter Aquino rendered a
management of the company.
The continuing deterioration of its financial conditiondecision, the decretal portion of which read:
prompted PNEI to lodge, on 07 May 1992, a Petition
for Suspension of Payments with the Securities and WHEREFORE, premises considered judgment is hereby
Exchange Commission ("SEC"), a move calculated to rendered ordering respondent Pantranco North
prevent further dissipation of PNEI's assets and to Express, Inc. to pay individual complainants the
make PNEI a viable source of income for the following amount as computed.
government. As a cost saving measure, the
management committee also recommended to theIn addition, respondent company is further directed to
SEC the retrenchment of some 500 employees of pay individual complainants. Respondent is likewise
PNEI. The retrenchment was carried out during the directed to pay the attorney's fees equivalent to 10%
months of November and December of 1992 and of the total monetary award of THIRTY NINE MILLION
January of 1993.
SEVEN HUNDRED THIRTY SIX THOUSAND FOUR
HUNDRED FIFTY NINE PESOS AND THIRTEEN
The filing of various labor complaints against PNEI was CENTAVOS (P39,736,459.13) Since none of the parties
the immediate result.
appealed, the aforequoted decision eventually
became final and executory.
(A) NLRC NCR Case No. 00-08-05380-93 was started
by PEA-PTGWO on 27 August 1993 in the Arbitration
Branch of the NLRC-NCR against PNEI and Asset
Privatization Trust (APT) for unfair labor practice, for

C. The Court is not persuaded even as it is cognizant of


the doctrine that "(t)he State may not be sued without
its consent," for as the Court has so stressed in
Department of Agriculture vs. NLRC, the rule is not
really absolute for it does not say that the state may
not be sued under any circumstance. 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.
The States' consent may be given either expressly or
impliedly. Express consent may be made through a
general law or a special law. 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 claim involving liability arising from
contract, express or implied, which could serve as a
basis of civil action between private parties." Implied
consent, on the other hand, is conceded when the
State itself commences litigation, thus opening itself
to a counter-claim, or when it enters into a contract.

A matter that must not be overlooked is the fact that


the inclusion of APT as a respondent in the monetary
claims against PNEI is merely the consequence of its
being a conservator of assets, a role that APT
normally plays in, or the relationship that ordinarily it
maintains with, corporations identified for and while
under privatization. The liability of APT under this
particular arrangement, nothing else having been
shown, should be co-extensive with the amount of
assets taken over from the privatized firm. PNEI's
assets obviously remain to be subject to execution by
judgment creditors of PNEI.

Express Consent vs Implied Consent


Express consent may be made through a general
law or a special law
Implied consent, on the other hand, is conceded
when the State itself commences litigation, thus
opening itself to a counter-claim, or when it enters
into a contract.
Suits against Government Instrumentalities /
Suits against officers

1998, outlining the guidelines and procedure


on the accreditation of government suppliers
for pharmaceutical products. It was later
amended by A.O. no. 10 series 2000. On May
9, 2000 and May 29, 2000

respondent submitted to the petitioner DOH a


request for the inclusion of additional items in
its list of accredited drug products, including
the antibiotic Penicillin G Benzathine.It
appears that processing of and the release of
the result of respondents request was due on
September 2000, the last month of the quarter
following the date of its filing. Despite the lack
of response from petitioner DOH regarding
respondents request for inclusion of additional
items in its list of accredited products,
respondent submitted its bid for Penicillin G
Benzathine contract.

Only
two
companies
participated
with
respondent submitting the lower bid. In view,
however,
of
the
non-accreditation
of
respondents Penicillin G Benzathine product,
the contract was awarded to YSS depite the
fact that Philpharma wealth is the lowest
bidder.

The respondent filed a complaint for


injunction, mandamus and damages with
prayer
for
the
issuance
of
writ
preliminary injunction and/or temporary
restraining order with the RTC praying the
trial court to nullify the ward of the Penicillin G
Bezathine contract and award the same to the
plaintiff as the lowest complying responsible
bidder for the said contract.

Petitioner DOH, secretary Rumualdez,


succeeded by petitioner Dayrit, and individual
petitioners Undersecretary Galon and Lopez
argued for dismissal of the complaint for the
lack of merit in view of the express reservation
made by the petitioner to accept or reject any
or all bids without incurring liability to the
bidders, they positing that government
agencies have such full discretion. Petitioner
subsequently filed a motion to dismiss
praying for the outright dismissal of the
complaint based on the doctrine of state
immunity.

Issue: Is the doctrine of state immunity applicable?

Department f Health vs. Phil Pharmawealth, Inc. Ruling:


1. STATE IMMUNITY OF DOH
The defense of immunity from suit will not avail
Facts:
despite its being an unincorporated agency of the
government for the only causes of action directed
Secretary of Health Alberto Romualdez R.
against it are preliminary injunction and
issued Administrative Order No. 27 series of

Consti1 Sovereignty Digest by Ace, Cedie, Kim and Maia


mandamus. Preliminary injunction may be
directed to a party. Court or person.

Private respondent Manula Balabcon, the vehicle


owner, and Constancio Abuganda, the driver filed a
complaint for the recovery of the possession of the 2
The defense of state immunity from suit does not impounded vehicles with an application of replevin
apply in causes of action which do not seek to
against the petitioner.
impose charge or financial liability against the
State.
Issue: Whether or not the complaint for the recovery
of possession of impounded vehicles, with an
2. State immunity of public officers
application for replevin, is suit against the state?
An officer who exceeds the power conferred on him by
law cannot hide behind the plea of sovereign
Ruling:
immunity and must bear the liability personally.
Well established is the doctrine that the state may not
The mere allegation that a government official is
be sued without its consent. And suit against the
being sued in his personal capacity does not
public officer for his official acts, is in effect, a suit
automatically remove the same from the protection of against the state if its purpose is to hold the State
the doctrine of state immunity, and neither does the ultimate liable.
mere invocation of official character suffice to insulate
such official from suability and liability of an act
However, the protection afforded the public officers
committed without or in excess of his or her authority this doctrine generally applies only to the
activities within the scope of their authority in
good faith and without willfulness, malice and
Public Officers qualified immunity
Suability of a government official depends on whether corruption.
the official concerned was acting with his official or
In the present case, the acts for which the
jurisdictional capacity, and whether the acts done in
the performance of the official functions will result in a petitioners are being called to account were
performed by them in the discharge of their
charge of financial liability against the government.
official duties. The acts in question are clearly
official in nature. In implementing and enforcing
State Immunity
Section 78-A and 89 of the Forestry Code through the
The defense of state immunity from suit does not
seizure carried out, petitioners were performing their
apply n causes of action, which do not seek to impose duties and functions as officers of the DENR, and did
charge or financial liability against the state.
so within the limits of their authority. There was no
malice nor bad faith on their part. Hence, a suit
against the petitioners who represent the DENR is a
suit against the State. It cannot prosper without the
States consent given the circumstances in this case.
The Writ of replevin is annulled.
Calub vs CA

Philippine Agila Satellite Inc. (PASI) vs. TrinidadLichauco (DOTC, Acting Sec.)

Facts:
On Jan 28, 1992 Forest protection and LawFacts:
enforcement Team of CENRO of the DENR
Michael de Guzman, President and Chairman of
apprehended 2 motor vehicles loaded with illegally Philippine Agila Satellite, Inc. (PASI) entered into a
sourced lumber. Constancio Abuganda and Pio Gabon, Memorandum of Understanding (MOU) with DOTC that
the drivers of the vehicles, failed to present proper they will launch a Filipino-owned satellite into outer
documents and/or licensed. Thus, the apprehendingspace. Under the MOU, the satellite will be privately
team seized and impounded the vehicles and its load owned by PASI, which will grant the PH govt one free
of lumber. Felipe Calub, Provincial Environment andtransponder and another one, subject to availability.
Natural resource Officer, then filed a criminalThe govt, through the Intl Telecommunications Union
complaint against Abuganda for violation of thedesignated 2 orbital slots for PASI. They have secured
Revised Forestry Code.
the confirmation from govt and was about to proceed
with launching preparations when respondent
On February 11, 1992 one of the two vehicles wasTrinidad-Lichauco held a series of sabotage to te
again apprehended by a composite team of the DENR- business of PASI.
CENR. Calub duly filed criminal complaint against
Among the things Lichauco did was 1) offering
Constancio Abuganda, a certain Abegonia, andthe other orbital slot to Unknown Awardee, 2) utter
several John Does for violation of Revised forestry act. disparaging and defamatory remarks about
petitioners in a meeting and then later at a telcomm

forum, 3) unprovoked defamation when she


YES. PCGG is the sequestrator of the shares,
threatened petitioner not to use the Agila name, and so he is duty-bound to preserve it. Paying for the
4) that petitioner will never pay its contractors.
membership is one of the duties/obligations to
Aggrieved by Lichaucos actions, petitioner sought for preserve them.
the injuction (establish that orbital slot should have
been awarded to PASI under the MOU), declaration of Did Sandiganbayan err in identifying PCGG as the
nullity of award (awarding of the other orbital slot to
responsible party for payment of the shares?
Unknown Awardee) and damages (for sabotage of
business).
NO. Sandiganbayan did not mistake in
determining that PCGG was responsible. There was
Issue: Is the suit considered against the State no grave abuse of discretion involved as
and therefore can invoke the nonsuability principle of Sandiganbayan never interfered, only directed the
the PH?
PCGG to comply with its part of the bargain under
Is petitioner right in seeking for the three mentioned their Compromise Agreement.
causes of action?
Is PCGG immune from this suit?
Ruling:
NO. When the government itself is the suitor,
NO. Lichauco was being sued in her personal it exempts itself from the state immunity principle.
capacity. But because some of the events that led to By taking initiative of the suit against a private party,
this case arose from a grave abuse of discretion
it descends to the level of a private individual as well
tantamount to lack of jurisdiction in the fulfilling her and opens itself to whatever counterclaims the other
official duties as Undersecretary (and now Acting
party may apply. Its consent to be sued is implied
Secretary) of DOTC, she is considered not under the from the very act of entering into such contract,
State and therefore suable.
their Compromise Agreement as an example.
YES. But the first two will not apply as they
Petition (of petitioner PCGG) is DISMISSED.
only seek to reverse a state action, which Lichauco
was within her rights to do as acting head of DOTC at
the time. As for the third, Court has recommended a
full blown trial for both parties to present their
Implied Consent
evidences to support/counter the claim.
EPG Construction Co. vs Vigilar
The order is REINSTATED in the Regional Trial
Court for further submission of evidence.
Facts:
Implied Consent
Republic (PCGG) vs. Sandiganbayan (Second
Division) and Benedicto

Facts:
This involves the 227 shares of stock from
Negros Occidental Golf and Country Club, Inc. owned
by respondent Benedicto, thought to have been illgotten, which the PCGG fiscal agents sequestered and
took over.
The PCGG and Benedicto entered into a
Compromise Agreement of lifting the sequestration of
the shares and implying that they were not ill-gotten
and Benedicto was well within his financial capacity to
purchase them.
Benedicto filed a Motion for Release and return of
stocks, which the Sandiganbayan approved, plus
PCGGs payment of the membership fee, whose
noncompliance (or delay of compliance) thereof
resulted in the foreclosure of the stocks and its
consequent public sale.
Issue/Ruling:
Is PCGG responsible for the payment of membership
fees for the sequestered shares of stock?

In 1983, the Ministry of Human Settlement


(MHS), through the BLISS Development
Corporation, intiated a housing project on a
government property along the east bank of
Manggahan Floodway in Pasig
The MHS entered into a Memorandum of
Agreement (MOA) with Ministry of Public Works
and Highways (MPWH) where the latter
undertook to develop the housing site and
construct thereon 145 housing units
By virtue of the MOA, MPWH forged individual
contracts with petitioners EPG, Ciper, Septa,
Phil. Plumbing, Home Construction, World
Builders, Glass World, Performance Builders,
and De Leon Araneta Construction for the
construction of the housing units
Under the contracts, the scope of construction
and funding covered only around "2/3 of each
housing unit"
Petitioners agreed to undertake and perform
"additional constructions" for the completion of
the housing units despite the fact that there
was only a verbal promise, and not a written
contract, by the MPWH Undersecretary Aber
Canlas that additional funds will be available
and forthcoming

Consti1 Sovereignty Digest by Ace, Cedie, Kim and Maia

Unpaid balance for the additional constructions The State's immunity cannot serve as an instrument
perpetrating injustice
amounted to P5,918,315.63
Upon a demand letter from the petitioners, on Petition granted. RTC decision reversed and set aside.
November 14, 1988, DPWH Asst. Secretary
Madamba opined that payment of petitioners' Quantum meruit the amount of recovery would only
be the reasonable value of the thing or services
money claims should be based on quantum
rendered regardless of any agreement as to value.
meruit (what one has earned) and should be
forwarded to the Commission on Audit (COA)
In a Letter of the Undersecretary of Budget and Royal Prerogative of Dishonesty and hide under the
Management dated December 20, 1994, the
States cloak of immunity
amount of P5,819,316.00 was then released
for the payment of the petitioners' money
claims under Advise of Allotment No. A4-1303- Dept. of Education, Albay vs. Onate
04-41-303
In an indorsement dated December 27, 1995, Facts:
the COA referred anew the money claims to
Spouses Claro Onate and Gregoria Los Banos
the DPWH
owns the disputed lot Lot No. 6849 (27,907 sqm)
In a letter dated August 26, 1996, respondent registered under the Torrens System of land
Secretary Gregorio Vigilar denied the subject registration with an Original Certificate of Title (OCT).
This lot was already settled through a Deed of
money claims
Petitioners filed before the RTC of QC, Branch Extrajudicial Settlement of Estate and Cession in
1991, in favor of respondent as his three sisters
226 a Petition for Mandamus to order the
waived their rights to the property.
respondent to pay petitioners their money
It turns out that the same land was where the
claims plus damages and attorney's fees.
Daraga
North Central Elementary School was built and
Lower court denied the petition on February
had
been
operating since 1940, then named
18, 1997
Bagumbayan Elementary School of Daraga. The
Municipality of Daraga gave that land to Dept. of
Issue:
Education, Culture and Sports (DECS), now Dept. of
Whether or not the implied, verbal contracts
Education (DepEd) through a Deed of Donation,
between the petitioners and then
confident that the municipality owned the land
Undersecretary Canlas should be upheld?
through buying it from Claro Onate, the respondents
Whether or not the State is immune from suit?
grandfather, sometime in 1940.
Respondent testified that he only knew of the dispute
Holding:
on 1973, from which he took possession of the lot the
Yes.
same year; that he knew only of the schools
No.
occupation on a portion of the land on 1991 and knew
of the Deed of Donation on 1992. The petitioner then
Ruling:
claimed that respondent was guilty of laches.
1. While the court agrees with the respondent that the Issue:
implied contracts are void, in view of violation of
Is the respondent guilty of laches? Will it be
applicable laws, auditing rules, and lack of legal
applied to him in this case?
requirements, it still finds merit in the instant petition Is the State immune from this case? Can DECS be
The illegality of the implied contracts proceeds from sued independently from the State?
an express declaration or prohibition by law, not from
any intrinsic illegality
"In the interest of substantial justice," petitionersRuling:
contractors' right to be compensated is upheld,
applying the principle of quantum meruit
YES. Laches is defined as the failure or
Even the DPWH Asst. Sec. for Legal Affairs
neglect, or an unreasonable and unexplained length
recommends their compensation; even the DPWH
of time, to do that which could or should have been
Auditor did not object to the payment of the money
done earlier. Elements of laches have set in: 1)
claims
disputed land has been used for public education
since 1940, 2) respondent failed to prove that him and
2. The respondent may not conveniently hide under his predecessors undertook steps to regain the use of
the State's cloak of invincibility against suit,
their land, to protest the building of the school as
considering that this principle yields to certain settled early as 1940, 3) petitioner DECS did not anticipate
exceptions.
that their occupancy of the land would be later
questioned, and 4) preliminary facts show grave

prejudice to the petitioner DECS as they have made


major changes in construction and expansion of the
school. The laches, however, apply only to disputed
Lot No. 6849-A. By virtue of laches, respondent Onate
cannot claim Lot No. 6849-A anymore.
NO. DECS can be sued as a result of being
privy to the Deed of Donation executed by the
Municipality of Daraga (as its recipient) over disputed
property. By giving its consent to the donation, it
brings DECS down to level of ordinary citizen. YES,
DECS can be sued independently from the State as it

gave its authority to continue with the donation,


which carries with it the full responsibility of suing or
being sued.
Therefore, DepEd (formerly DECS) now has the
rights of possession and property over Lot No.
6849-A. Onarte cannot sell, mortgage or
encumber said Lot while still being used by
DepEd. The lots rights will be returned to
respondents the moment DECS no longer needs
it. DECS being nonsuable has become moot.

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