Documenti di Didattica
Documenti di Professioni
Documenti di Cultura
According to PROVI, it delivered the following items to On July 11, 2001, PROVI filed with the RTC a complaint
TESDA on the dates indicated: for sum of money with damages against TESDA. PROVI
additionally prayed for the issuance of a writ of preliminary
attachment/garnishment against TESDA. The case was
docketed as Civil Case No. 68527. In an Order dated July 16,
Date Particulars Amount 2001, the RTC granted PROVIs prayer and issued a writ of
preliminary attachment against the properties of TESDA not
exempt from execution in the amount of P35,000,000.00.[11]
07 June 2000 330,000 pre-printed cards 18,810,000.00 TESDA responded on July 24, 2001 by filing a Motion to
Discharge/Quash the Writ of Attachment, arguing mainly that
07 August 2000 121,500 pre-printed cards 6,925,500.00 public funds cannot be the subject of garnishment. [12] The
RTC denied TESDAs motion, and subsequently ordered the
26 April 2000 100,000 scannable answer sheets 600,000.00 manager of the Land Bank of the Philippines to produce
TESDAs bank statement for the garnishment of the covered
06 June 2000 5 Micro-Poise customized die 375,000.00
amount.[13]
As pointed out by TESDA in its Memorandum, [40] the (a) In an action for recovery of a specified
garnished funds constitute TESDAs lifeblood in government amount of money or damages, other than moral
parlance, its MOOE[41] whose withholding via a writ of and exemplary, on a cause of action arising
attachment, even on a temporary basis, would paralyze from law, contract, quasi-contract, delict or
TESDAs functions and services. As well, these funds also quasi-delict against a party who is about to
depart from the Philippines with intent to
include TESDAs Personal Services funds from which salaries defraud his creditors;
of TESDA personnel are sourced. Again and for obvious
reasons, the release of these funds cannot be delayed.
On 10 December 1999, the Philippine government, through - short-term experts to deal with diverse special tasks
then Foreign Affairs Secretary Domingo Siazon, and the for a total of up to 27 expert/months,
German government, agreed to an Arrangement in
furtherance of the 1971 Agreement. This Arrangement - five local experts in health economy, health insurance,
affirmed the common commitment of both governments to community health systems, information technology,
promote jointly a project called, Social Health information systems, training and community mobilization for
InsuranceNetworking and Empowerment (SHINE), which was a total of up to 240 expert/months,
designed to enable Philippine familiesespecially poor onesto
maintain their health and secure health care of sustainable - local and auxiliary personnel for a total of up to 120
quality.[3] It appears that SHINE had already been in months;
existence even prior to the effectivity of the Arrangement,
though the record does not indicate when exactly SHINE was (c) supply inputs, in particular
constituted. Nonetheless, the Arrangement stated the
various obligations of the Filipino and German governments. - two cross-country vehicles,
The relevant provisions of the Arrangement are reproduced
as follows: - ten computers with accessories,
- the cost of transport and insurance to the project site - the project is provided with an itemized budget of its
of inputs to be supplied pursuant to sub-paragraph (c) above, own in order to ensure smooth continuation of the project.
excluding the charges and storage fees referred to in
paragraph 4(d) below, - the necessary legal and administrative framework is
created for the project,
- a proportion of the operating and administrative costs;
- the project is coordinated in close cooperation with
xxx other national and international agencies relevant to
implementation,
4. The Government of the Republic of
the Philippines shall make the following contributions to the - the inputs supplied for the project on behalf of the
project: Government of the Federal Republic of Germany are
exempted from the cost of licenses, harbour dues, import and
It shall export duties and other public charges and fees, as well as
storage fees, or that any costs thereof are met, and that they
(a) provide the necessary Philippine experts for the are cleared by customs without delay. The aforementioned
project, in particular one project coordinator in the Philippine exemptions shall, at the request of the implementing
Health Insurance Corporation (Philhealth), at least three agencies also apply to inputs procured in the Republic of
further experts and a sufficient number of administrative and the Philippines,
auxiliary personnel, as well as health personnel in the pilot
provinces and in the other project partners, in particular one - the tasks of the seconded experts are taken over as
responsible expert for each pilot province and for each soon as possible by Philippine experts,
association representing the various target groups,
- examinations passed by Philippine nationals
- release suitably qualified experts from their duties pursuant to this Arrangement are recognized in accordance
for attendance at the envisaged basic and further training with their respective standards and that the persons
activities; it shall only nominate such candidates as have concerned are afforded such opportunities with regard to
given an undertaking to work on the project for at least five careers, appointments and advancement as are
years after completing their training and shall ensure that commensurate with their training.[4]
these Philippine experts receive appropriate remuneration,
- ensure that the project field offices have sufficient
expendables,
In the arraignment, both governments likewise named their Nicolay had veered away from its original purpose to
respective implementing organizations for SHINE. facilitate the development of social health insurance by
The Philippines designated the Department of Health (DOH) shoring up the national health insurance program and
and the Philippine Health Insurance Corporation (Philhealth) strengthening local initiatives, as Nicolay had refused to
with the implementation of SHINE. For their part, the German support local partners and new initiatives on the premise that
government charge[d] the Deustche Gesellschaft fr community and local government unit schemes were not
Technische Zusammenarbeit[[5]] (GTZ[[6]]) GmbH, Eschborn, sustainablea philosophy that supposedly betrayed Nicolays
with the implementation of its contributions.[7] lack of understanding of the purpose of the project. Private
respondents further alleged that as a result of Nicolays new
Private respondents were engaged as contract employees thrust, resources have been used inappropriately; that the
hired by GTZ to work for SHINE on various dates between new management style was not congruent with the original
December of 1998 to September of 1999. Bernadette goals of the project; that Nicolay herself suffered from
Carmela Magtaas was hired as an information systems cultural insensitivity that consequently failed to sustain
manager and project officer of SHINE;[8] Carolina Dionco as a healthy relations with SHINEs partners and staff.
Project Assistant of SHINE;[9] Christopher Ramos as a project
assistant and liason personnel of NHI related SHINE activities The letter ended with these ominous words:
by GTZ;[10] Melvin Dela Paz and Randy Tamayo as
programmers;[11] and Edgardo Ramilo as driver, messenger The issues that we [the private respondents] have stated
and multipurpose service man.[12] The employment here are very crucial to us in working for the project. We
contracts of all six private respondents all specified Dr. Rainer could no longer find any reason to stay with the project
Tollkotter, identified as an adviser of GTZ, as the employer. At unless ALL of these issues be addressed immediately and
the same time, all the contracts commonly provided that [i]t appropriately.[15]
is mutually agreed and understood that [Dr. Tollkotter, as
employer] is a seconded GTZ expert who is hiring the
Employee on behalf of GTZ and for a Philippine-German In response, Nicolay wrote each of the private respondents a
bilateral project named Social Health InsuranceNetworking letter dated 21 June 2000, all similarly worded except for
and Empowerment (SHINE) which will end at a given time. their respective addressees. She informed private
[13] respondents that the projects orientations and evolution were
decided in consensus with partner institutions, Philhealth and
In September of 1999, Anne Nicolay (Nicolay), a Belgian the DOH, and thus no longer subject to modifications. More
national, assumed the post of SHINE Project Manager. pertinently, she stated:
Disagreements eventually arose between Nicolay and private
respondents in matters such as proposed salary adjustments, You have firmly and unequivocally stated in the last
and the course Nicolay was taking in the implementation of paragraph of your 8th June 2000 letter that you and the five
SHINE different from her predecessors. The dispute other staff could no longer find any reason to stay with the
culminated in a letter[14] dated 8 June 2000, signed by the project unless ALL of these issues be addressed immediately
private respondents, addressed to Nicolay, and copies and appropriately. Under the foregoing premises and
furnished officials of the DOH, Philheath, and the director of circumstances, it is now imperative that I am to accept your
the Manila office of GTZ. The letter raised several issues resignation, which I expect to receive as soon as possible.
which private respondents claim had been brought up [16]
several times in the past, but have not been given
appropriate response. It was claimed that SHINE under
Taken aback, private respondents replied with a common reprising the arguments for dismissal it had earlier raised.
letter, clarifying that their earlier letter was not intended as a [20] No action was taken by the Labor Arbiter on this new
resignation letter, but one that merely intended to raise motion. Instead, on 15 October 2001, the Labor Arbiter
attention to what they perceived as vital issues. rendered a Decision[21] granting the complaint for illegal
[17] Negotiations ensued between private respondents and dismissal. The Decision concluded that respondents were
Nicolay, but for naught. Each of the private respondents dismissed without lawful cause, there being a total lack of
received a letter from Nicolay dated 11 July 2000, informing due process both substantive and procedural [sic].[22] GTZ
them of the pre-termination of their contracts of employment was faulted for failing to observe the notice requirements in
on the grounds of serious and gross insubordination, among the labor law. The Decision likewise proceeded from the
others, resulting to loss of confidence and trust.[18] premise that GTZ had treated the letter dated 8 June 2000 as
a resignation letter, and devoted some focus in debunking
On 21 August 2000, the private respondents filed a complaint this theory.
for illegal dismissal with the NLRC. Named as respondents
therein where GTZ, the Director of its Manila office Hans The Decision initially offered that it need not discuss the
Peter Paulenz, its Assistant Project Manager Christian Jahn, jurisdictional aspect considering that the same had already
and Nicolay. been lengthily discussed in the Order de[n]ying respondents
Motion to Dismiss.[23]Nonetheless, it proceeded to discuss
On 25 October 2005, GTZ, through counsel, filed a Motion to the jurisdictional aspect, in this wise:
Dismiss, on the ground that the Labor Arbiter had no
jurisdiction over the case, as its acts were undertaken in the
discharge of the governmental functions and sovereign acts
of the Government of the Federal Republic of Germany. This
was opposed by private respondents with the arguments
that GTZ had failed to secure a certification that it was
immune from suit from the Department of Foreign Affairs, Under pain of being repetitious, the undersigned Labor
and that it was GTZ and not the German government which Arbiter has jurisdiction to entertain the complaint on the
had implemented the SHINE Project and entered into the following grounds:
contracts of employment.
Firstly, under the employment contract entered into between
On 27 November 2000, the Labor Arbiter issued an complainants and respondents, specifically Section 10
Order[19] denying the Motion to Dismiss. The Order cited, thereof, it provides that contract partners agree that his
among others, that GTZ was a private corporation which contract shall be subject to the LAWS of the jurisdiction of the
entered into an employment contract; and that GTZ had locality in which the service is performed.
failed to secure from the DFA a certification as to its
diplomatic status. Secondly, respondent having entered into contract, they can
no longer invoke the sovereignty of the Federal Republic of
Germany.
Thus, the present petition for review under Rule 45, assailing
the decision and resolutions of the Court of Appeals and of
the Labor Arbiter. GTZs arguments center on whether the
Court of Appeals could have entertained its petition for
certiorari despite its not having undertaken an appeal before
the NLRC; and whether the complaint for illegal dismissal
should have been dismissed for lack of jurisdiction on
account of GTZs insistence that it enjoys immunity from suit.
No special arguments are directed with respect to petitioners
Hans Peter Paulenz and Anne Nicolay, respectively the then
Director and the then Project Manager of GTZ in the
Philippines; so we have to presume that the arguments
raised in behalf of GTZs alleged immunity from suit extend to
them as well.
"It is not necessary to write an extended dissertation on In truth, private respondents were unable to adduce any
whether or not the NPC performs a governmental function evidence to substantiate their claim that GTZ was a private
with respect to the management and operation of the Angat corporation, and the Labor Arbiter acted rashly in accepting
Dam. It is sufficient to say that the government has such claim without explanation. But neither has GTZ supplied
organized a private corporation, put money in it and has any evidence defining its legal nature beyond that of the
allowed it to sue and be sued in any court under its charter. bare descriptive implementing agency. There is no doubt that
(R.A. No. 6395, Sec. 3[d]). As a government, owned and the 1991 Agreement designated GTZ as the implementing
controlled corporation, it has a personality of its own, distinct agency in behalf of the German government. Yet the catch is
and separate from that of the Government. Moreover, the that such term has no precise definition that is responsive to
charter provision that the NPC can 'sue and be sued in any our concerns. Inherently, an agent acts in behalf of a
court' is without qualification on the cause of action and principal, and the GTZ can be said to act in behalf of the
accordingly it can include a tort claim such as the one German state. But that is as far as implementing agency
instituted by the petitioners."[41] could take us. The term by itself does not supply whether
GTZ is incorporated or unincorporated, whether it is owned
It is useful to note that on the part of the Philippine by the German state or by private interests, whether it has
government, it had designated two entities, the Department juridical personality independent of the German government
of Health and the Philippine Health Insurance Corporation or none at all.
(PHIC), as the implementing agencies in behalf of
the Philippines. The PHIC was established under Republic Act GTZ itself provides a more helpful clue, inadvertently,
No. 7875, Section 16(g) of which grants the corporation the through its own official Internet website.[46] In the Corporate
power to sue and be sued in court. Applying the previously Profile section of the English language version of its site, GTZ
cited jurisprudence, PHIC would not enjoy immunity from suit describes itself as follows:
even in the performance of its functions connected with
SHINE, however, governmental in nature as they may be. As an international cooperation enterprise for sustainable
development with worldwide operations, the federally owned
Is GTZ an incorporated agency of the German government? Deutsche Gesellschaft fr Technische Zusammenarbeit (GTZ)
There is some mystery surrounding that question. Neither GmbH supports the German Government in achieving its
GTZ nor the OSG go beyond the claim that petitioner is the development-policy objectives. It provides viable, forward-
implementing agency of the Government of the Federal looking solutions for political, economic, ecological and social
Republic of Germany. On the other hand, private respondents development in a globalised world. Working under difficult
asserted before the Labor Arbiter that GTZ was a private conditions, GTZ promotes complex reforms and change
corporation engaged in the implementation of development
processes. Its corporate objective is to improve peoples living x x x Going by the principle of sustainable development, the
conditions on a sustainable basis. German Technical Cooperation (Deutsche Gesellschaft fr
Technische Zusammenarbeit GmbH, GTZ) takes on non-profit
GTZ is a federal enterprise based in Eschborn near Frankfurt projects in international technical cooperation. The GTZ is a
am Main. It was founded in 1975 as a company under private private company owned by the Federal Republic of Germany.
law. The German Federal Ministry for Economic Cooperation [49]
and Development (BMZ) is its major client. The company also
operates on behalf of other German ministries, the
governments of other countries and international clients, Again, we are uncertain of the corresponding legal
such as the European Commission, the United Nations and implications under German law surrounding a private
the World Bank, as well as on behalf of private enterprises. company owned by the Federal Republic of Germany. Yet
GTZ works on a public-benefit basis. All surpluses generated taking the description on face value, the apparent equivalent
are channeled [sic] back into its own international under Philippine law is that of a corporation organized under
cooperation projects for sustainable development.[47] the Corporation Code but owned by the Philippine
government, or a government-owned or controlled
corporation without original charter. And it bears notice that
GTZs own website elicits that petitioner is federally owned, a Section 36 of the Corporate Code states that [e]very
federal enterprise, and founded in 1975 as a company under corporation incorporated under this Code has the power and
private law. GTZ clearly has a very meaningful relationship capacity x x x to sue and be sued in its corporate name.[50]
with the Federal Republic of Germany, which apparently owns
it. At the same time, it appears that GTZ was actually It is entirely possible that under German law, an entity such
organized not through a legislative public charter, but under as GTZ or particularly GTZ itself has not been vested or has
private law, in the same way that Philippine corporations can been specifically deprived the power and capacity to sue
be organized under the Corporation Code even if fully owned and/or be sued. Yet in the proceedings below and before this
by the Philippine government. Court, GTZ has failed to establish that under German law, it
has not consented to be sued despite it being owned by the
This self-description of GTZ in its own official website gives Federal Republic of Germany. We
further cause for pause in adopting petitioners argument that adhere to the rulethat in the absence of evidence to the
GTZ is entitled to immunity from suit because it is an contrary,
implementing agency. The above-quoted statement does not foreign laws on a particular subject are presumed to be the
dispute the characterization of GTZ as an implementing same as those of the Philippines,[51] and following the most
agency of the Federal Republic of Germany, yet it bolsters intelligent assumption we can gather, GTZ is akin to a
the notion that as a company organized under private law, it governmental owned or controlled corporation without
has a legal personality independent of that of the Federal original charter which, by virtue of the Corporation Code, has
Republic of Germany. expressly consented to be sued. At the very least, like the
Labor Arbiter and the Court of Appeals, this Court has no
The Federal Republic of Germany, in its own official website, basis in fact to conclude or presume that GTZ enjoys
[48] also makes reference to GTZ and describes it in this immunity from suit.
manner:
This absence of basis in fact leads to another important
point, alluded to by the Labor Arbiter in his rulings. Our ruling
in Holy See v. Del Rosario[52] provided a template on how a
foreign entity desiring to invoke State immunity from suit Judge. The Solicitor General embodied the "suggestion" in a
could duly prove such immunity before our local courts. The Manifestation and Memorandum as amicus curiae.[53]
principles enunciated in that case were derived from public
international law. We stated then:
It is to be recalled that the Labor Arbiter, in both of his
In Public International Law, when a state or international rulings, noted that it was imperative for petitioners to secure
agency wishes to plead sovereign or diplomatic immunity in from the Department of Foreign Affairs a certification of
a foreign court, it requests the Foreign Office of the state respondents diplomatic status and entitlement to diplomatic
where it is sued to convey to the court that said defendant is privileges including immunity from suits.[54] The
entitled to immunity. requirement might not necessarily be imperative. However,
had GTZ obtained such certification from the DFA, it would
In the United States, the procedure followed is the process of have provided factual basis for its claim of immunity that
"suggestion," where the foreign state or the international would, at the very least, establish a disputable evidentiary
organization sued in an American court requests the presumption that the foreign party is indeed immune which
Secretary of State to make a determination as to whether it is the opposing party will have to overcome with its own factual
entitled to immunity. If the Secretary of State finds that the evidence. We do not see why GTZ could not have secured
defendant is immune from suit, he, in turn, asks the Attorney such certification or endorsement from the DFA for purposes
General to submit to the court a "suggestion" that the of this case. Certainly, it would have been highly prudential
defendant is entitled to immunity. InEngland, a similar for GTZ to obtain the same after the Labor Arbiter had denied
procedure is followed, only the Foreign Office issues a the motion to dismiss. Still, even at this juncture, we do not
certification to that effect instead of submitting a see any evidence that the DFA, the office of the executive
"suggestion" (O'Connell, I International Law 130 [1965]; Note: branch in charge of our diplomatic relations, has indeed
Immunity from Suit of Foreign Sovereign Instrumentalities endorsed GTZs claim of immunity. It may be possible that
and Obligations, 50 Yale Law Journal 1088 [1941]). GTZ tried, but failed to secure such certification, due to the
same concerns that we have discussed herein.
In the Philippines, the practice is for the foreign government
or the international organization to first secure an executive Would the fact that the Solicitor General has endorsed GTZs
endorsement of its claim of sovereign or diplomatic claim of States immunity from suit before this Court
immunity. But how the Philippine Foreign Office conveys its sufficiently substitute for the DFA certification? Note that the
endorsement to the courts varies. In International Catholic rule in public international law quoted in Holy See referred to
Migration Commission v. Calleja, 190 SCRA 130 (1990), the endorsement by the Foreign Office of the State where the
Secretary of Foreign Affairs just sent a letter directly to the suit is filed, such foreign office in the Philippines being the
Secretary of Labor and Employment, informing the latter that Department of Foreign Affairs. Nowhere in the Comment of
the respondent-employer could not be sued because it the OSG is it manifested that the DFA has endorsed GTZs
enjoyed diplomatic immunity. In World Health Organization v. claim, or that the OSG had solicited the DFAs views on the
Aquino, 48 SCRA 242 (1972), the Secretary of Foreign Affairs issue. The arguments raised by the OSG are virtually the
sent the trial court a telegram to that effect. In Baer v. Tizon, same as the arguments raised by GTZ without any indication
57 SCRA 1 (1974), the U.S. Embassy asked the Secretary of of any special and distinct perspective maintained by the
Foreign Affairs to request the Solicitor General to make, in Philippine government on the issue. The Comment filed by
behalf of the Commander of the United States Naval Base at the OSG does not inspire the same degree of confidence as a
Olongapo City, Zambales, a "suggestion" to respondent certification from the DFA would have elicited.
Holy See made reference to Baer v. Tizon,[55] and that in the susceptible to review, respecting as we do the finality of the
said case, the United States Embassy asked the Secretary of Labor Arbiters Decision.
Foreign Affairs to request the Solicitor General to make a
suggestion to the trial court, accomplished by way of a A final note. This decision should not be seen as deviation
Manifestation and Memorandum, that the petitioner therein from the more common methodology employed in
enjoyed immunity as the Commander of the Subic Bay Naval ascertaining whether a party enjoys State immunity from
Base. Such circumstance is actually not narrated in the text suit, one which focuses on the particular functions exercised
of Baer itself and was likely supplied in Holy See because its by the party and determines whether these are proprietary or
author, Justice Camilio Quiason, had appeared as the Solicitor sovereign in nature. The nature of the acts performed by the
in behalf of the OSG in Baer. Nonetheless, as narrated in Holy entity invoking immunity remains the most important
See, it was the Secretary of Foreign Affairs which directed the barometer for testing whether the privilege of State
OSG to intervene in behalf of the United States government immunity from suit should apply. At the same time, our
in the Baer case, and such fact is manifest enough of the Constitution stipulates that a State immunity from suit is
endorsement by the Foreign Office. We do not find a similar conditional on its withholding of consent; hence, the laws and
circumstance that bears here. circumstances pertaining to the creation and legal
personality of an instrumentality or agency invoking
The Court is thus holds and so rules that GTZ consistently immunity remain relevant. Consent to be sued, as exhibited
has been unable to establish with satisfaction that it enjoys in this decision, is often conferred by the very same statute
the immunity from suit generally enjoyed by its parent or general law creating the instrumentality or agency.
country, the Federal Republic of Germany. Consequently,
both the Labor Arbiter and the Court of Appeals acted within WHEREFORE, the petition is DENIED. No pronouncement as
proper bounds when they refused to acknowledge that GTZ is to costs.
so immune by dismissing the complaint against it. Our
finding has additional ramifications on the failure of GTZ to
properly appeal the Labor Arbiters decision to the NLRC. As 3. LOCKHEED DETECTIVE AND WATCHMAN AGENCY
pointed out by the OSG, the direct recourse to the Court of INC. V. UNIVERSITY OF THE PHILIPPINES GR NO.
Appeals while bypassing the NLRC could have been 185918 APRIL 2012
sanctioned had the Labor Arbiters decision been a patent Before us is a petition for review on certiorari under Rule 45
nullity. Since the Labor Arbiter acted properly in deciding the of the 1997 Rules of Civil Procedure, as amended, assailing
complaint, notwithstanding GTZs claim of immunity, we the August 20, 2008 Amended Decision[1] and December 23,
cannot see how the decision could have translated into a 2008 Resolution[2] of the Court of Appeals (CA) in CA-G.R. SP
patent nullity. No. 91281.
As a result, there was no basis for petitioners in foregoing the The antecedent facts of the case are as follows:
appeal to the NLRC by filing directly with the Court of Appeals Petitioner Lockheed Detective and Watchman Agency, Inc.
the petition for certiorari. It then follows that the Court of (Lockheed) entered into a contract for security services with
Appeals acted correctly in dismissing the petition on that respondent University of the Philippines (UP).
ground. As a further consequence, since petitioners failed to In 1998, several security guards assigned to UP filed
perfect an appeal from the Labor Arbiters Decision, the same separate complaints against Lockheed and UP for payment of
has long become final and executory. All other questions underpaid wages, 25% overtime pay, premium pay for rest
related to this case, such as whether or not private days and special holidays, holiday pay, service incentive
respondents were illegally dismissed, are no longer leave pay, night shift differentials, 13th month pay, refund of
cash bond, refund of deductions for the Mutual Benefits Aids Third party respondent University of the Philippines is hereby
System (MBAS), unpaid wages from December 16-31, 1998, declared to be liable to Third Party Complainant and cross
and attorneys fees. claimant Lockheed Detective and Watchman Agency for the
On February 16, 2000, the Labor Arbiter rendered a decision unpaid legislated salary increases of the latters security
as follows: guards for the years 1996 to 1998, in the total amount of
P13,066,794.14, out of which amount the amounts due
WHEREFORE, premises considered, respondents Lockheed complainants here shall be paid.
Detective and Watchman Agency, Inc. and UP as job The other claims are hereby DISMISSED for lack of merit
contractor and principal, respectively, are hereby declared to (night shift differential and 13th month pay) or for having
be solidarily liable to complainants for the following claims of been paid in the course of this proceedings (salaries
the latter which are found meritorious. for December 15-31, 1997 in the amount of P40,140.44).
The claims of Erlindo Collado, Rogelio Banjao and Amor
Underpaid wages/salaries, premium pay for work on rest day Banjao are hereby DISMISSED as amicably settled for and in
and special holiday, holiday pay, 5 days service incentive consideration of the amounts of P12,315.72, P12,271.77 and
leave pay, 13th month pay for 1998, refund of cash bond P12,819.33, respectively.
(deducted at P50.00 per month from January to May 1996, SO ORDERED.[3]
P100.00 per month from June 1996 and P200.00 from Both Lockheed and UP appealed the Labor Arbiters
November 1997), refund of deduction for Mutual Benefits decision. By Decision[4] dated April 12, 2002, the NLRC
Aids System at the rate of P50.00 a month, and attorneys modified the Labor Arbiters decision. The NLRC held:
fees; in the total amount of P1,184,763.12 broken down as WHEREFORE, the decision appealed from is hereby modified
follows per attached computation of the Computation and as follows:
[E]xamination Unit of this Commission, which computation 1. Complainants claims for premium pay for work on rest
forms part of this Decision: day and special holiday, and 5 days service incentive leave
1. JOSE SABALAS P77,983.62 pay, are hereby dismissed for lack of basis.
2. TIRSO DOMASIAN 76,262.70 2. The respondent University of the Philippines is still
3. JUAN TAPEL 80,546.03 solidarily liable with Lockheed in the payment of the rest of
4. DINDO MURING 80,546.03 the claims covering the period of their service contract.
5. ALEXANDER ALLORDE 80,471.78 The Financial Analyst is hereby ordered to recompute the
6. WILFREDO ESCOBAR 80,160.63 awards of the complainants in accordance with the foregoing
7. FERDINAND VELASQUEZ 78,595.53 modifications.
8. ANTHONY GONZALES 76,869.97 SO ORDERED.[5]
9. SAMUEL ESCARIO 80,509.78
10. PEDRO FAILORINA 80,350.87 The complaining security guards and UP filed their respective
11. MATEO TANELA 70,590.58 motions for reconsideration. On August 14, 2002, however,
12. JOB SABALAS 59,362.40 the NLRC denied said motions.
13. ANDRES DACANAYAN 77,403.73 As the parties did not appeal the NLRC decision, the same
14. EDDIE OLIVAR 77,403.73 became final and executory on October 26, 2002.[6] A writ of
P1,077,057.38 execution was then issued but later quashed by the Labor
plus 10% attorneys fees 107,705.74 Arbiter on November 23, 2003 on motion of UP due to
GRAND TOTAL AWARD P1,184,763.12 disputes regarding the amount of the award. Later, however,
said order quashing the writ was reversed by the NLRC by
Resolution[7] dated June 8, 2004, disposing as follows:
WHEREFORE, premises considered, we grant this instant account cannot be disbursed except pursuant to an
appeal. The Order dated 23 November 2003 is hereby appropriation required by law. The Labor Arbiter, however,
reversed and set aside. The Labor Arbiter is directed to issue dismissed the urgent motion for lack of merit on August 30,
a Writ of Execution for the satisfaction of the judgment award 2005.[13]
in favor of Third-Party complainants. On September 2, 2005, the amount of P12,062,398.71 was
SO ORDERED.[8] withdrawn by the sheriff from UPs PNB account.[14]
On September 12, 2005, UP filed a petition for certiorari
UP moved to reconsider the NLRC resolution. On December before the CA based on the following grounds:
28, 2004, the NLRC upheld its resolution but with I.
modification that the satisfaction of the judgment award in The concept of solidary liability by an indirect employer
favor of Lockheed will be only against the funds of UP which notwithstanding, respondent NLRC gravely abused its
are not identified as public funds. discretion in a manner amounting to lack or excess of
The NLRC order and resolution having become final, jurisdiction by misusing such concept to justify the
Lockheed filed a motion for the issuance of an alias writ of garnishment by the executing Sheriff of public/government
execution. The same was granted on May 23, 2005.[9] funds belonging to UP.
On July 25, 2005, a Notice of Garnishment[10] was issued to
Philippine National Bank (PNB) UP Diliman Branch for the II.
satisfaction of the award of P12,142,522.69 (inclusive of Respondents NLRC and Arbiter LORA acted without
execution fee). jurisdiction or gravely abused their discretion in a manner
In a letter[11] dated August 9, 2005, PNB informed UP that it amounting to lack or excess of jurisdiction when, by means of
has received an order of release dated August 8, 2005 issued an Alias Writ of Execution against petitioner UP, they
by the Labor Arbiter directing PNB UP Diliman Branch to authorized respondent Sheriff to garnish UPs public funds.
release to the NLRC Cashier, through the assigned NLRC Similarly, respondent LORA gravely abused her discretion
Sheriff Max L. Lago, the judgment award/amount when she resolved petitioners Motion to Quash Notice of
of P12,142,522.69. PNB likewise reminded UP that the bank Garnishment addressed to, and intended for, the NLRC, and
only has 10 working days from receipt of the order to deliver when she unilaterally and arbitrarily disregarded an official
the garnished funds and unless it receives a notice from UP Certification that the funds garnished are public/government
or the NLRC before the expiry of the 10-day period regarding funds, and thereby allowed respondent Sheriff to withdraw
the issuance of a court order or writ of injunction discharging the same from PNB.
or enjoining the implementation and execution of the Notice
of Garnishment and Writ of Execution, the bank shall be III.
constrained to cause the release of the garnished funds in Respondents gravely abused their discretion in a manner
favor of the NLRC. amounting to lack or excess of jurisdiction when they,
On August 16, 2005, UP filed an Urgent Motion to Quash despite prior knowledge, effected the execution that caused
Garnishment.[12] UP contended that the funds being paralyzation and dislocation to petitioners governmental
subjected to garnishment at PNB are government/public functions.[15]
funds. As certified by the University Accountant, the subject On March 12, 2008, the CA rendered a
funds are covered by Savings Account No. 275-529999-8, decision[16] dismissing UPs petition for
under the name of UP System Trust Receipts, earmarked for certiorari. Citing Republic v. COCOFED,[17] which defines
Student Guaranty Deposit, Scholarship Fund, Student Fund, public funds as moneys belonging to the State or to any
Publications, Research Grants, and Miscellaneous Trust political subdivisions of the State, more specifically taxes,
Account. UP argued that as public funds, the subject PNB customs, duties and moneys raised by operation of law for
the support of the government or the discharge of its Executive Order No. 714 entitled Fiscal Control and
obligations, the appellate court ruled that the funds sought to Management of the Funds of UP recognizes that as an
be garnished do not seem to fall within the stated definition. institution of higher learning, UP has always granted full
On reconsideration, however, the CA issued the assailed management and control of its affairs including its financial
Amended Decision. It held that without departing from its affairs.[21] Therefore, it cannot shield itself from its private
findings that the funds covered in the savings account sought contractual liabilities by simply invoking the public character
to be garnished do not fall within the classification of public of its funds. Lockheed also cites several cases wherein it was
funds, it reconsiders the dismissal of the petition in light of ruled that funds of public corporations which can sue and be
the ruling in the case of National Electrification sued were not exempt from garnishment.
Administration v. Morales[18] which mandates that all money Lockheed likewise argues that the rulings in
claims against the government must first be filed with the the NEA and MIAA cases are inapplicable. It contends that UP
Commission on Audit (COA). is not similarly situated with NEA because the jurisdiction of
Lockheed moved to reconsider the amended decision but the COA over the accounts of UP is only on a post-audit basis. As
same was denied in the assailed CA Resolution to the MIAA case, the liability of MIAA pertains to the real
dated December 23, 2008. The CA cited Manila International estate taxes imposed by the City of Paranaque while the
Airport Authority v. Court of Appeals[19] which held that UP obligation of UP in this case involves a private contractual
ranks with MIAA, a government instrumentality exercising obligation. Lockheed also argues that the declaration
corporate powers but not organized as a stock or non-stock in MIAA specifically citing UP was mere obiter dictum.
corporation. While said corporations are government
instrumentalities, they are loosely called government Lockheed moreover submits that UP cannot invoke state
corporate entities but not government-owned and controlled immunity to justify and perpetrate an injustice. UP itself
corporations in the strict sense. admitted its liability and thus it should not be allowed to
renege on its contractual obligations. Lockheed contends that
Hence this petition by Lockheed raising the following this might create a ruinous precedent that would likely affect
arguments: the relationship between the public and private sectors.
1. RESPONDENT UP IS A GOVERNMENT ENTITY WITH A Lastly, Lockheed contends that UP cannot anymore seek the
SEPARATE AND DISTINCT PERSONALITY FROM THE NATIONAL quashal of the writ of execution and notice of garnishment as
GOVERNMENT AND HAS ITS OWN CHARTER GRANTING IT THE they are already fait accompli.
RIGHT TO SUE AND BE SUED. IT THEREFORE CANNOT AVAIL For its part, UP contends that it did not invoke the doctrine of
OF THE IMMUNITY FROM SUIT OF THE GOVERNMENT. NOT state immunity from suit in the proceedings a quo and in
HAVING IMMUNITY FROM SUIT, RESPONDENT UP CAN BE fact, it did not object to being sued before the labor
HELD LIABLE AND EXECUTION CAN THUS ENSUE. department. It maintains, however, that suability does not
2. MOREOVER, IF THE COURT LENDS IT ASSENT TO THE necessarily mean liability. UP argues that the CA correctly
INVOCATION OF THE DOCTRINE OF STATE IMMUNITY, THIS applied the NEA ruling when it held that all money claims
WILL RESULT [IN] GRAVE INJUSTICE. must be filed with the COA.
3. FURTHERMORE, THE PROTESTATIONS OF THE
RESPONDENT ARE TOO LATE IN THE DAY, AS THE EXECUTION As to alleged injustice that may result for invocation of state
PROCEEDINGS HAVE ALREADY BEEN TERMINATED.[20] immunity from suit, UP reiterates that it consented to be
sued and even participated in the proceedings
Lockheed contends that UP has its own separate and distinct below. Lockheed cannot now claim that invocation of state
juridical entity from the national government and has its own immunity, which UP did not invoke in the first place, can
charter. Thus, it can be sued and be held liable. Moreover, result in injustice.
We cannot subscribe to Lockheeds argument that NEA is not
On the fait accompli argument, UP argues that Lockheed similarly situated with UP because the COAs jurisdiction over
cannot wash its hands from liability for the consummated the latter is only on post-audit basis. A reading of the
garnishment and execution of UPs trust fund in the amount pertinent Commonwealth Act provision clearly shows that it
of P12,062,398.71. UP cites that damage was done to UP and does not make any distinction as to which of the government
the beneficiaries of the fund when said funds, which were subdivisions, agencies and instrumentalities, including
earmarked for specific educational purposes, were government-owned or controlled corporations and their
misapplied, for instance, to answer for the execution fee subsidiaries whose debts should be filed before the COA.
ofP120,123.98 unilaterally stipulated by the
sheriff. Lockheed, being the party which procured the illegal As to the fait accompli argument of Lockheed, contrary to its
garnishment, should be held primarily liable. The mere fact claim that there is nothing that can be done since the funds
that the CA set aside the writ of garnishment confirms the of UP had already been garnished, since the garnishment was
liability of Lockheed to reimburse and indemnify in erroneously carried out and did not go through the proper
accordance with law. procedure (the filing of a claim with the COA), UP is entitled
to reimbursement of the garnished funds plus interest of 6%
The petition has no merit. per annum, to be computed from the time of judicial demand
to be reckoned from the time UP filed a petition for certiorari
We agree with UP that there was no point for Lockheed in before the CA which occurred right after the withdrawal of
discussing the doctrine of state immunity from suit as this the garnished funds from PNB.
was never an issue in this case. Clearly, UP consented to be WHEREFORE, the petition for review on certiorari
sued when it participated in the proceedings below. What UP is DENIED for lack of merit. Petitioner Lockheed Detective
questions is the hasty garnishment of its funds in its PNB and Watchman Agency, Inc. is ordered
account. to REIMBURSE respondent University of the Philippines the
This Court finds that the CA correctly applied amount of P12,062,398.71 plus interest of 6% per annum, to
the NEA case. Like NEA, UP is a juridical personality separate be computed from September 12, 2005 up to the finality of
and distinct from the government and has the capacity to this Decision, and 12% interest on the entire amount from
sue and be sued. Thus, also like NEA, it cannot evade date of finality of this Decision until fully paid.
execution, and its funds may be subject to garnishment or
levy. However, before execution may be had, a claim for
payment of the judgment award must first be filed with the
COA.Under Commonwealth Act No. 327,[22] as amended by 4. AIR TRANSPORTATION OFFICE V. SPS. DAVID AND
Section 26 of P.D. No. 1445,[23] it is the COA which has ELISEA RAMOS GR NO. 159402 FEBRURARY 2011
primary jurisdiction to examine, audit and settle all debts and
claims of any sort due from or owing the Government or any The States immunity from suit does not extend to the
of its subdivisions, agencies and instrumentalities, including petitioner because it is an agency of the State engaged in an
government-owned or controlled corporations and their enterprise that is far from being the States exclusive
subsidiaries. With respect to money claims arising from the prerogative.
implementation of Republic Act No. 6758,[24] their allowance
or disallowance is for COA to decide, subject only to the Under challenge is the decision promulgated on May 14,
remedy of appeal by petition for certiorari to this Court.[25] 2003,[1] by which the Court of Appeals (CA) affirmed with
modification the decision rendered on February 21, 2001 by
the Regional Trial Court, Branch 61 (RTC), in Baguio City in
favor of the respondents.[2] WHEREFORE, the judgment is rendered ORDERING the
Antecedents defendant Air Transportation Office to pay the plaintiffs
DAVID and ELISEA RAMOS the following: (1) The amount
Spouses David and Elisea Ramos (respondents) discovered of P778,150.00 being the value of the parcel of land
that a portion of their land registered under Transfer appropriated by the defendant ATO as embodied in the Deed
Certificate of Title No. T-58894 of the Baguio City land of Sale, plus an annual interest of 12% from August 11, 1995,
records with an area of 985 square meters, more or less, was the date of the Deed of Sale until fully paid; (2) The amount
being used as part of the runway and running shoulder of of P150,000.00 by way of moral damages and P150,000.00
the Loakan Airport being operated by petitioner Air as exemplary damages; (3) the amount of P50,000.00 by way
Transportation Office (ATO). On August 11, 1995, the of attorneys fees plus P15,000.00 representing the 10, more
respondents agreed after negotiations to convey the affected or less, court appearances of plaintiffs counsel; (4) The costs
portion by deed of sale to the ATO in consideration of the of this suit.
amount of P778,150.00. However, the ATO failed to pay
despite repeated verbal and written demands. SO ORDERED.
Thus, on April 29, 1998, the respondents filed an action for In due course, the ATO appealed to the CA, which affirmed
collection against the ATO and some of its officials in the RTC the RTCs decision on May 14, 2003,[5] viz:
(docketed as Civil Case No. 4017-R and entitled Spouses
David and Elisea Ramos v. Air Transportation Office, Capt. IN VIEW OF ALL THE FOREGOING, the appealed decision is
Panfilo Villaruel, Gen. Carlos Tanega, and Mr. Cesar de Jesus). hereby AFFIRMED, with MODIFICATION that the awarded cost
therein is deleted, while that of moral and exemplary
In their answer, the ATO and its co-defendants invoked as an damages is reduced to P30,000.00 each, and attorneys fees
affirmative defense the issuance of Proclamation No. 1358, is lowered to P10,000.00.
whereby President Marcos had reserved certain parcels of No cost.
land that included the respondents affected portion for use of SO ORDERED.
the Loakan Airport. They asserted that the RTC had no
jurisdiction to entertain the action without the States consent Hence, this appeal by petition for review on certiorari.
considering that the deed of sale had been entered into in
the performance of governmental functions. Issue
On November 10, 1998, the RTC denied the ATOs motion for
a preliminary hearing of the affirmative defense. The only issue presented for resolution is whether the ATO
could be sued without the States consent.
After the RTC likewise denied the ATOs motion for
reconsideration on December 10, 1998, the ATO commenced
a special civil action for certiorari in the CA to assail the RTCs Ruling
orders. The CA dismissed the petition for certiorari, however,
upon its finding that the assailed orders were not tainted with The petition for review has no merit.
grave abuse of discretion.[3]
The immunity of the State from suit, known also as the
Subsequently, February 21, 2001, the RTC rendered its doctrine of sovereign immunity or non-suability of the State,
decision on the merits,[4] disposing:
is expressly provided in Article XVI of the 1987 [A] continued adherence to the doctrine of non-suability is
Constitution, viz: not to be deplored for as against the inconvenience that may
be caused private parties, the loss of governmental efficiency
Section 3. The State may not be sued without its consent. and the obstacle to the performance of its multifarious
functions are far greater if such a fundamental principle were
The immunity from suit is based on the political truism that abandoned and the availability of judicial remedy were not
the State, as a sovereign, can do no wrong. Moreover, as the thus restricted. With the well-known propensity on the part of
eminent Justice Holmes said in Kawananakoa v. Polyblank:[6] our people to go to court, at the least provocation, the loss of
time and energy required to defend against law suits, in the
The territory [of Hawaii], of course, could waive its exemption absence of such a basic principle that constitutes such an
(Smith v. Reeves, 178 US 436, 44 L ed 1140, 20 Sup. Ct. Rep. effective obstacle, could very well be imagined.
919), and it took no objection to the proceedings in the cases
cited if it could have done so. xxx But in the case at bar it did An unincorporated government agency without any separate
object, and the question raised is whether the plaintiffs were juridical personality of its own enjoys immunity from suit
bound to yield. Some doubts have been expressed as to the because it is invested with an inherent power of
source of the immunity of a sovereign power from suit sovereignty. Accordingly, a claim for damages against the
without its own permission, but the answer has been public agency cannot prosper; otherwise, the doctrine of sovereign
property since before the days of Hobbes. Leviathan, chap. immunity is violated.[11] However, the need to distinguish
26, 2. A sovereign is exempt from suit, not because of any between an unincorporated government agency performing
formal conception or obsolete theory, but on the logical and governmental function and one performing proprietary
practical ground that there can be no legal right as against functions has arisen. The immunity has been upheld in favor
the authority that makes the law on which the right of the former because its function is governmental or
depends. Car on peut bien recevoir loy d'autruy, mais il est incidental to such function;[12] it has not been upheld in
impossible par nature de se donner loy. Bodin, Republique, 1, favor of the latter whose function was not in pursuit of a
chap. 8, ed. 1629, p. 132; Sir John Eliot, De Jure Maiestatis, necessary function of government but was essentially a
chap. 3. Nemo suo statuto ligatur necessitative. Baldus, De business.[13]
Leg. et Const. Digna Vox, 2. ed. 1496, fol. 51b, ed. 1539, fol.
61.[7] Should the doctrine of sovereignty immunity or non-suability
of the State be extended to the ATO?
Practical considerations dictate the establishment of an
immunity from suit in favor of the State. Otherwise, and the In its challenged decision,[14] the CA answered in the
State is suable at the instance of every other individual, negative, holding:
government service may be severely obstructed and public
safety endangered because of the number of suits that the On the first assignment of error, appellants seek to impress
State has to defend against.[8] Several justifications have upon Us that the subject contract of sale partook of a
been offered to support the adoption of the doctrine in governmental character. Apropos, the lower court erred in
thePhilippines, but that offered in Providence Washington applying the High Courts ruling in National Airports
Insurance Co. v. Republic of the Philippines[9] is the most Corporation vs. Teodoro (91 Phil. 203 [1952]), arguing that
acceptable explanation, according to Father Bernas, a in Teodoro, the matter involved the collection of landing and
recognized commentator on Constitutional Law,[10] to wit: parking fees which is a proprietary function, while the case at
bar involves the maintenance and operation of aircraft and
air navigational facilities and services which are of a private entity were retained substantially in Republic Act
governmental functions. 776, Sec. 32(24) and (25). Said Act provides:
We are not persuaded. Sec. 32. Powers and Duties of the Administrator. Subject to
the general control and supervision of the Department Head,
Contrary to appellants conclusions, it was not merely the the Administrator shall have among others, the following
collection of landing and parking fees which was declared as powers and duties:
proprietary in nature by the High Court in Teodoro, but
management and maintenance of airport operations as a xxx
whole, as well. Thus, in the much later case of Civil (24) To administer, operate, manage, control, maintain and
Aeronautics Administration vs. Court of Appeals (167 SCRA develop the Manila International Airport and all government-
28 [1988]), the Supreme Court, reiterating the owned aerodromes except those controlled or operated by
pronouncements laid down in Teodoro, declared that the CAA the Armed Forces of the Philippines including such powers
(predecessor of ATO) is an agency not immune from suit, it and duties as: (a) to plan, design, construct, equip, expand,
being engaged in functions pertaining to a private entity. It improve, repair or alter aerodromes or such structures,
went on to explain in this wise: improvement or air navigation facilities; (b) to enter into,
make and execute contracts of any kind with any person,
xxx firm, or public or private corporation or entity;
The Civil Aeronautics Administration comes under the (25) To determine, fix, impose, collect and receive landing
category of a private entity. Although not a body corporate it fees, parking space fees, royalties on sales or deliveries,
was created, like the National Airports Corporation, not to direct or indirect, to any aircraft for its use of aviation
maintain a necessary function of government, but to run gasoline, oil and lubricants, spare parts, accessories and
what is essentially a business, even if revenues be not its supplies, tools, other royalties, fees or rentals for the use of
prime objective but rather the promotion of travel and the any of the property under its management and control.
convenience of the travelling public. It is engaged in an
enterprise which, far from being the exclusive prerogative of xxx
state, may, more than the construction of public roads, be
undertaken by private concerns. [National Airports Corp. v. From the foregoing, it can be seen that the CAA is tasked
Teodoro, supra, p. 207.] with private or non-governmental functions which operate to
remove it from the purview of the rule on State immunity
xxx from suit. For the correct rule as set forth in the Teodoro case
states:
True, the law prevailing in 1952 when the Teodoro case was
promulgated was Exec. Order 365 (Reorganizing the Civil xxx
Aeronautics Administration and Abolishing the National
Airports Corporation). Republic Act No. 776 (Civil Aeronautics Not all government entities, whether corporate or non-
Act of the Philippines), subsequently enacted on June 20, corporate, are immune from suits. Immunity from suits is
1952, did not alter the character of the CAAs objectives determined by the character of the objects for which the
under Exec. Order 365. The pertinent provisions cited in entity was organized. The rule is thus stated in Corpus Juris:
the Teodorocase, particularly Secs. 3 and 4 of Exec. Order
365, which led the Court to consider the CAA in the category
Suits against State agencies with relation to matters in which suability of the State of two cases (one of which was for
they have assumed to act in private or non-governmental damages) filed by owners of property where a road 9 meters
capacity, and various suits against certain corporations wide and 128.70 meters long occupying a total area of 1,165
created by the state for public purposes, but to engage in square meters and an artificial creek 23.20 meters wide and
matters partaking more of the nature of ordinary business 128.69 meters long occupying an area of 2,906 square
rather than functions of a governmental or political meters had been constructed by the provincial engineer of
character, are not regarded as suits against the state. The Rizal and a private contractor without the owners knowledge
latter is true, although the state may own stock or property and consent was reversed and the cases remanded for trial
of such a corporation for by engaging in business operations on the merits. The Supreme Court ruled that the doctrine of
through a corporation, the state divests itself so far of its sovereign immunity was not an instrument for perpetrating
sovereign character, and by implication consents to suits any injustice on a citizen. In exercising the right of eminent
against the corporation. (59 C.J., 313) [National Airports domain, the Court explained, the State exercised its jus
Corporation v. Teodoro, supra, pp. 206-207; Italics supplied.] imperii, as distinguished from its proprietary rights, or jus
gestionis; yet, even in that area, where private property had
This doctrine has been reaffirmed in the recent case been taken in expropriation without just compensation being
of Malong v. Philippine National Railways [G.R. No. L-49930, paid, the defense of immunity from suit could not be set up
August 7, 1985, 138 SCRA 63], where it was held that the by the State against an action for payment by the owners.
Philippine National Railways, although owned and operated
by the government, was not immune from suit as it does not Lastly, the issue of whether or not the ATO could be sued
exercise sovereign but purely proprietary and business without the States consent has been rendered moot by the
functions. Accordingly, as the CAA was created to undertake passage of Republic Act No. 9497, otherwise known as
the management of airport operations which primarily the Civil Aviation Authority Act of 2008.
involve proprietary functions, it cannot avail of the immunity
from suit accorded to government agencies performing R.A. No. 9497 abolished the ATO, to wit:
strictly governmental functions.[15]
Section 4. Creation of the Authority. There is hereby created
In our view, the CA thereby correctly appreciated the juridical an independent regulatory body with quasi-judicial and quasi-
character of the ATO as an agency of the Government not legislative powers and possessing corporate attributes to be
performing a purely governmental or sovereign function, but known as the Civil Aviation Authority of the Philippines
was instead involved in the management and maintenance of (CAAP), herein after referred to as the Authority attached to
the Loakan Airport, an activity that was not the exclusive the Department of Transportation and Communications
prerogative of the State in its sovereign capacity. Hence, the (DOTC) for the purpose of policy coordination. For this
ATO had no claim to the States immunity from suit. We purpose, the existing Air transportation Office created under
uphold the CAs aforequoted holding. the provisions of Republic Act No. 776, as amended is hereby
abolished.
We further observe the doctrine of sovereign immunity xxx
cannot be successfully invoked to defeat a valid claim for
compensation arising from the taking without just Under its Transitory Provisions, R.A. No. 9497 established in
compensation and without the proper expropriation place of the ATO the Civil Aviation Authority of the Philippines
proceedings being first resorted to of the plaintiffs property. (CAAP), which thereby assumed all of the ATOs powers,
[16] Thus, in De los Santos v. Intermediate Appellate Court, duties and rights, assets, real and personal properties, funds,
[17] the trial courts dismissal based on the doctrine of non- and revenues, viz:
5. GREGORIO R. VIGILAR, SEC. OF DPWH, ET AL. V.
CHAPTER XII ARNULFO AQUINO GR NO. 180388 JANUARY 2011
TRANSITORTY PROVISIONS Before the Court is a Petition for Review on Certiorari1 under
Section 85. Abolition of the Air Transportation Office. The Air Rule 45 of the Rules of Court, assailing the Decision2 of the
Transportation Office (ATO) created under Republic Act No. Court of Appeals in C.A.-G.R. CV No. 82268, dated 25
776, a sectoral office of the Department of Transportation September 2006.
and Communications (DOTC), is hereby abolished. The antecedent facts are as follows:
On 19 June 1992, petitioner Angelito M. Twao, then Officer-
All powers, duties and rights vested by law and exercised by in-Charge (OIC)-District Engineer of the Department of Public
the ATO is hereby transferred to the Authority. Works and Highways (DPWH) 2nd Engineering District of
Pampanga sent an Invitation to Bid to respondent Arnulfo D.
Aquino, the owner of A.D. Aquino Construction and Supplies.
All assets, real and personal properties, funds and revenues The bidding was for the construction of a dike by bulldozing a
owned by or vested in the different offices of the ATO are part of the Porac River at Barangay Ascomo-Pulungmasle,
transferred to the Authority. All contracts, records and Guagua, Pampanga.
documents relating to the operations of the abolished
agency and its offices and branches are likewise transferred Subsequently, on 7 July 1992, the project was awarded to
to the Authority. Any real property owned by the national respondent, and a "Contract of Agreement" was thereafter
government or government-owned corporation or executed between him and concerned petitioners for the
authority which is being used and utilized as office or amount of PhP1,873,790.69, to cover the project cost.
facility by the ATO shall be transferred and titled in favor of By 9 July 1992, the project was duly completed by
the Authority. respondent, who was then issued a Certificate of Project
Section 23 of R.A. No. 9497 enumerates the corporate Completion dated 16 July 1992. The certificate was signed by
powers vested in the CAAP, including the power to sue and Romeo M. Yumul, the Project Engineer; as well as petitioner
be sued, to enter into contracts of every class, kind and Romeo N. Supan, Chief of the Construction Section, and by
description, to construct,acquire, own, hold, operate, petitioner Twao.
maintain, administer and lease personal and real properties, Respondent Aquino, however, claimed that PhP1,262,696.20
and to settle, under such terms and conditions most was still due him, but petitioners refused to pay the amount.
advantageous to it, any claim by or against it.[18] He thus filed a Complaint3 for the collection of sum of money
with damages before the Regional Trial Court of Guagua,
With the CAAP having legally succeeded the ATO pursuant to Pampanga. The complaint was docketed as Civil Case No.
R.A. No. 9497, the obligations that the ATO had incurred by 3137.
virtue of the deed of sale with the Ramos spouses might now Petitioners, for their part, set up the defense4 that the
be enforced against the CAAP. Complaint was a suit against the state; that respondent failed
to exhaust administrative remedies; and that the "Contract of
WHEREFORE, the Court denies the petition for review Agreement" covering the project was void for violating
on certiorari, and affirms the decision promulgated by the Presidential Decree No. 1445, absent the proper
Court of Appeals. appropriation and the Certificate of Availability of Funds.5
No pronouncement on costs of suit. On 28 November 2003, the lower court ruled in favor of
respondent, to wit:
WHEREFORE, premises considered, defendant Department of 2. WHETHER OR NOT THE COURT OF APPEALS ERRED IN NOT
Public Works and Highways is hereby ordered to pay the DISMISSING THE COMPLAINT FOR FAILURE OF RESPONDENT
plaintiff Arnulfo D. Aquino the following: TO EXHAUST ALL ADMINISTRATIVE REMEDIES.
1. PhP1,873,790.69, Philippine Currency, representing actual 3. WHETHER OR NOT THE COURT OF APPEALS ERRED IN
amount for the completion of the project done by the ORDERING THE COA TO ALLOW PAYMENT TO RESPONDENT
plaintiff; ON A QUANTUM MERUIT BASIS DESPITE THE LATTERS
2. PhP50,000.00 as attorneys fee and FAILURE TO COMPLY WITH THE REQUIREMENTS OF
3. Cost of this suit. PRESIDENTIAL DECREE NO. 1445.
SO ORDERED. 6
After a judicious review of the case, the Court finds the
It is to be noted that respondent was only asking for Petition to be without merit.
PhP1,262,696.20; the award in paragraph 1 above, however, Firstly, petitioners claim that the Complaint filed by
conforms to the entire contract amount. respondent before the Regional Trial Court was done without
On appeal, the Court of Appeals reversed and set aside the exhausting administrative remedies. Petitioners aver that
Decision of the lower court and disposed as follows: respondent should have first filed a claim before the
WHEREFORE, premises considered, the appeal is GRANTED. Commission on Audit (COA) before going to the courts.
The "CONTRACT AGREEMENT" entered into between the However, it has been established that the doctrine of
plaintiff-appellees construction company, which he exhaustion of administrative remedies and the doctrine of
represented, and the government, through the Department primary jurisdiction are not ironclad rules. In Republic of the
of Public Works and Highway (DPWH) Pampanga 2nd Philippines v. Lacap,9 this Court enumerated the numerous
Engineering District, is declared null and void ab initio. exceptions to these rules, namely: (a) where there is estoppel
The assailed decision of the court a quo is hereby REVERSED on the part of the party invoking the doctrine; (b) where the
AND SET ASIDE. challenged administrative act is patently illegal, amounting
In line with the pronouncement in Department of Health vs. to lack of jurisdiction; (c) where there is unreasonable delay
C.V. Canchela & Associates, Architects,7 the Commission on or official inaction that will irretrievably prejudice the
Audit (COA) is hereby ordered to determine and ascertain complainant; (d) where the amount involved is relatively so
with dispatch, on a quantum meruit basis, the total obligation small as to make the rule impractical and oppressive; (e)
due to the plaintiff-appellee for his undertaking in where the question involved is purely legal and will ultimately
implementing the subject contract of public works, and to have to be decided by the courts of justice; (f) where judicial
allow payment thereof, subject to COA Rules and Regulations, intervention is urgent; (g) where the application of the
upon the completion of the said determination. doctrine may cause great and irreparable damage; (h) where
No pronouncement as to costs. the controverted acts violate due process; (i) where the issue
SO ORDERED.8 of non-exhaustion of administrative remedies has been
rendered moot; (j) where there is no other plain, speedy and
Dissatisfied with the Decision of the Court of Appeals, adequate remedy; (k) where strong public interest is
petitioners are now before this Court, seeking a reversal of involved; and (l) in quo warranto proceedings. In the present
the appellate courts Decision and a dismissal of the case, conditions (c) and (e) are present.
Complaint in Civil Case No. G-3137. The Petition raises the
following issues: The government project contracted out to respondent was
1. WHETHER OR NOT THE COURT OF APPEALS ERRED IN completed almost two decades ago. To delay the proceedings
HOLDING THAT THE DOCTRINE OF NON-SUABILITY OF THE by remanding the case to the relevant government office or
STATE HAS NO APPLICATION IN THIS CASE. agency will definitely prejudice respondent. More
importantly, the issues in the present case involve the 1992. For almost two decades, the public and the
validity and the enforceability of the "Contract of Agreement" government benefitted from the work done by respondent.
entered into by the parties. These are questions purely of law Thus, the Court of Appeals was correct in applying Eslao to
and clearly beyond the expertise of the Commission on Audit the present case. In Eslao, this Court stated:
or the DPWH. In Lacap, this Court said: ...the Court finds that the contractor should be duly
... It does not involve an examination of the probative value compensated for services rendered, which were for the
of the evidence presented by the parties. There is a question benefit of the general public. To deny the payment to the
of law when the doubt or difference arises as to what the law contractor of the two buildings which are almost fully
is on a certain state of facts, and not as to the truth or the completed and presently occupied by the university would be
falsehood of alleged facts. Said question at best could be to allow the government to unjustly enrich itself at the
resolved only tentatively by the administrative authorities. expense of another. Justice and equity demand compensation
The final decision on the matter rests not with them but with on the basis of quantum meruit. (Emphasis supplied.)
the courts of justice. Exhaustion of administrative remedies Neither can petitioners escape the obligation to compensate
does not apply, because nothing of an administrative nature respondent for services rendered and work done by invoking
is to be or can be done. The issue does not require technical the states immunity from suit. This Court has long
knowledge and experience but one that would involve the established in Ministerio v. CFI of Cebu,16 and recently
interpretation and application of law. (Emphasis supplied.) reiterated in Heirs of Pidacan v. ATO,17 that the doctrine of
Secondly, in ordering the payment of the obligation due governmental immunity from suit cannot serve as an
respondent on a quantum meruit basis, the Court of Appeals instrument for perpetrating an injustice to a citizen. As this
correctly relied on Royal Trust Corporation v. COA,10 Eslao v. Court enunciated in EPG Construction:181avvphi1
COA,11 Melchor v. COA,12 EPG Construction Company v. To our mind, it would be the apex of injustice and highly
Vigilar,13 and Department of Health v. C.V. Canchela & inequitable to defeat respondents right to be duly
Associates, Architects.14 All these cases involved compensated for actual work performed and services
government projects undertaken in violation of the relevant rendered, where both the government and the public have
laws, rules and regulations covering public bidding, budget for years received and accepted benefits from the project
appropriations, and release of funds for the projects. and reaped the fruits of respondents honest toil and labor.
Consistently in these cases, this Court has held that the xxx xxx xxx
contracts were void for failing to meet the requirements Under these circumstances, respondent may not validly
mandated by law; public interest and equity, however, invoke the Royal Prerogative of Dishonesty and conveniently
dictate that the contractor should be compensated for hide under the State's cloak of invincibility against suit,
services rendered and work done. considering that this principle yields to certain settled
Specifically, C.V. Canchela & Associates is similar to the case exceptions. True enough, the rule, in any case, is not
at bar, in that the contracts involved in both cases failed to absolute for it does not say that the state may not be sued
comply with the relevant provisions of Presidential Decree under any circumstance.
No. 1445 and the Revised Administrative Code of 1987.
Nevertheless, "(t)he illegality of the subject Agreements xxx xxx xxx
proceeds, it bears emphasis, from an express declaration or Although the Amigable and Ministerio cases generously
prohibition by law, not from any intrinsic illegality. As such, tackled the issue of the State's immunity from suit vis a vis
the Agreements are not illegal per se, and the party claiming the payment of just compensation for expropriated property,
thereunder may recover what had been paid or delivered."15 this Court nonetheless finds the doctrine enunciated in the
The government project involved in this case, the aforementioned cases applicable to the instant
construction of a dike, was completed way back on 9 July controversy, considering that the ends of justice would be
subverted if we were to uphold, in this particular instance, complaint for damages[1] against Shell before the Regional
the State's immunity from suit. Trial Court (RTC), Branch 41, Pinamalayan, Oriental
To be sure, this Court as the staunch guardian of the Mindoro. Jalos, et al claimed that they were all subsistence
citizens' rights and welfare cannot sanction an injustice so fishermen from the coastal barangay of Bansud, Oriental
patent on its face, and allow itself to be an instrument in the Mindoro whose livelihood was adversely affected by the
perpetration thereof. Justice and equity sternly demand that construction and operation of Shells natural gas pipeline.
the State's cloak of invincibility against suit be shred in this
particular instance, and that petitioners-contractors be duly Jalos, et al claimed that their fish catch became few after the
compensated on the basis of quantum meruit for construction of the pipeline. As a result, their average net
construction done on the public works housing income per month fell from a high of P4,848.00 to
project. (Emphasis supplied.) only P573.00. They said that the pipeline greatly affected
WHEREFORE, in view of the foregoing, the Petition biogenically hard-structured communities such as coral reefs
is DENIED for lack of merit. The assailed Decision of the Court and led [to] stress to the marine life in the Mindoro Sea. They
of Appeals in CA-G.R. No. 82268 dated 25 September 2006 now have to stay longer and farther out at sea to catch fish,
is AFFIRMED. as the pipelines operation has driven the fish population out
SO ORDERED. of coastal waters.[2]
Despite lack of permit, petitioner continued to enroll students 2. The DECS with TPME will conduct a re-
and offer courses in Marine Engineering and Marine inspection sometime the first week of April to
Transportation for SY 1987-1988. This prompted the DECS monitor the progress of the requirements.
through Director Hernando Dizon to write petitioner on 4
August 1988 directing it not to operate without permit and 3. No new and old students will be allowed to
inviting its attention to the provisions of the Private School enroll during summer of 1989 and the
Law 1 as reiterated in the Education Act of 1982 2 which subsequent semesters pending issuance of a
prohibits operation of unauthorized schools/courses. permit.
On 28 October 1988 petitioner sent a letter to Director Dizon 4. Therefore, issuance of a school permit for
applying for permit/recognition to conduct classes for the two 1987-1988 to 1988-89 shall be held in abeyance
(2) maritime courses retroactive from summer of 1987 up to pending compliance of at least 60% of the
SY 1988-1989 and informing him of its transfer to the 5th requirements.
Floor of the Republic Supermarket Building, corner Rizal
Avenue and Soler St., Sta. Cruz, Manila. 5. DECS higher authorities shall decide whether
the graduating students for the second
On the basis of the favorable report of a supervisor of the semester 1988-89 will be allowed to graduate
Bureau of Higher Education who visited the premises of and a retroactive school permit for the school
petitioner on 14 November 1988, a director of said Bureau years 1987-88, 1988-89 can be granted. 3
recommended renewal of petitioner's permit. However, in a
DECS-PAMI survey conducted by the DECS technical staff in As recommended, the TPME Secretariat conducted a
1988, petitioner scored only 32 points out of a possible 1,026 reinspection of petitioner's premises, then submitted a report
points for requirements in Nautical Engineering, and only 207 dated 18 April 1989 with the following new recommendations
points out of 905 points in Marine Engineering, way below
the DECS requirements.
1. Gradual phasing out of the BSMT Nautical
Subsequent inspection of petitioner's premises by the Bureau Studies and Associate in Marine Engineering
of Higher Education-DECS Technical Panel for Maritime programs. Under this scheme, no new enrollees
Education (TPME) affirmed the findings of the DECS-PAMI should be accepted anymore for the 1st year
survey. It found petitioner deficient in terms of the minimum BSMT Nautical Studies and AME starting 1st
requirements as provided in DECS Order No. III, series of semester of school year 1989-90.
1987, which refers to the policies and standards for Maritime
Education Plan. In a memorandum dated 19 January 1989
2. If the school can come up with the DECS In a letter dated 27 April 1989 Director Rosas informed
minimum standard within the phasing out petitioner of the TPME report and recommendations and
period, suspension order may be lifted. invited it for a conference on 2 May 1989 before any major
decision and action would be made.
3. If the school fails to meet the DECS minimum
standard at the end of the phasing out period, On 2 May 1989, the TPME Secretariat submitted another
closure order will be issued. memorandum on its reinspection of petitioner's premises
made on 28 April 1989. Based on its findings that no
4. No special permit for the BSMT Nautical substantial improvement in terms of minimum requirements,
Studies and AME courses should be granted as a equipment and training facilities since the January 1989
special case. However, during the phasing out inspection was made, it reiterated the recommendations it
period students may be allowed to graduate submitted to the DECS Bureau of Higher Education. For this
under PMMS, Talon, Las Pias, reason, in the letter dated 25 May 1989 Director Rosas
notified petitioner about the aforementioned report and the
based on these considerations DECS' decision that:
1. PMMS, Manila, has inadequate training 1. The BSMT Nautical Studies and Associate in
facilities and equipment for BSMT Nautical Marine Engineering courses be gradually phased
Studies and AME programs. out. Such being the case, the school shall no
longer be allowed to accept 1st year students
2. The school has not acquired its own school and new enrollees starting 1st semester of
site and building. The present school campus is school year 1989-90.
not conducive for training and is found to be
very limited in space so that there is difficulty 2. The second year and third year students may
for school development and expansion. be allowed to remain until they graduate.
However, the school may opt to transfer these
3. On 23 September 1986, the Secretary of students to PMMS, Talon, Las Pias,
Education, Culture and Sports already issued a
cease to operate order to the school head of due to the following considerations:
PMMS. The said indorsement letter also provided
humanitarian decision (reason?) which granted 1. The school's training equipment and
permit to PMMS as a special case, just to allow instructional facilities are very far below the
BSMT and AME students to graduate and the standards set by DECS.
remaining students were advised to transfer to
authorized/recognized schools. 2. The school site and building are not owned by
the school but only leased with contract of
4. Labor dispute occurred in 1987. The conflict renewal to be made annually.
between the employees and employer is a
manifestation of mismanagement of school. 4 3. The present location of the school does not
warrant for expansion, development and
improvement.
4. The present location of the school is not Pursuant to petitioner's request, another inspection of the
conducive for learning, it being located on the Manila premises was conducted by the TPME-Secretariat on 8
5th floor of a supermarket in the downtown August 1989. However, petitioner only obtained a general
section of the city. rating of 31.17% for Nautical Studies and 28.53% for Marine
Engineering. Consequently, the inspection team reiterated its
5. A cease to operate order was issued by previous recommendation to gradually phase out the
Secretary Lourdes R. Quisumbing sometime in maritime programs of petitioner's Manila campus effective SY
1986, which order was violated by the 1990-1991 and that no new freshman students be accepted
school. 5 beginning SY 1990-1991.
In a letter dated 11 July 1989 the DECS through Secretary Accordingly, in a letter dated 25 September 1989 the DECS
Quisumbing informed petitioner that it had received reports through Secretary Quisumbing ordered petitioner to
that petitioner enrolled freshmen for its maritime programs discontinue its Maritime program in the Manila campus
which were ordered phased out effective SY 1989-1990 per effective school year 1990-1991 and suggested that efforts
letter of Director Rosas dated 25 May 1989; called be made towards the development of PMMS, Las Pias, which
petitioner's attention to the provision of Sec. 1, Rule 1, Part V, has a great potential of being a good Maritime School. 6 The
of the Implementing Rules of the Education Act of 1982 which phase-out order was reiterated in subsequent letters dated
makes it punishable and subject to penalties the operation of 19 February 1990 and 9 May 1990 of Director Rosas and then
a school through the conduct or offering of Educational DECS Secretary Isidro D. Cario, respectively.
Programs or Courses of Studies/Training, without prior
government authorization and/or in violation of any of the Subsequently, petitioner moved to reconsider the phase-out
terms and conditions of said permit or recognition; directed order in its letter of 21 May 1990, which request was denied
that in accordance with the phase-out order, petitioner's by the DECS through Undersecretary Benjamin Tayabas in his
Manila campus is allowed to operate only the 2nd, 3rd and letter of 1 June 1990. The letter reads
4th years of the authorized maritime programs which shall be
gradually phased out; and, required petitioner to comment With reference to your request to rescind an
on the reported unauthorized enrollment. order to phase-out the maritime courses at
PMMS, Manila, please be informed that this
In its letter to the DECS dated 26 July 1989, petitioner moved Department sees no reason for such action as
for reconsideration stating that the finding that it had not the conditions obtaining in the school when the
complied with the minimum requirements was due to the phase-out order was issued haven't shown any
following: that as early as 21 June 1989 it filed a letter significant improvement inspite of the fact that
requesting reconsideration of the letter dated 25 May 1989 of the PMMS had been given reasonable period to
Director Rosas; that since there was no reply it believed that comply with the minimum standard
the 25 May 1989 order was reconsidered sub-silencio and requirements prescribed by the Department of
that petitioner was allowed to enroll 1st year students for SY Education, Culture and Sports.
1989-1990; and, that it had undertaken improvements in all
of its facilities in compliance with DECS requirements. In this Maritime Education courses are highly
regard, it requested another inspection of its premises. specialized and require adequate training
facilities and equipment in order to ensure
quality. However, the series of visits made by
the staff of the BHE, NCR, and members of the (TPME) re-affirmed the findings of
Technical Panel on Maritime Education revealed the DECS-PAMI Survey. Very few
the following findings: equipment were found for the
Maritime courses. You concurred
(a) On April 9, 1987 the Inter- with these findings in a dialogue
Agency Technical Committee with the Director of the Bureau of
(IATCOM) recommended the Higher Education Secretariat. You
renewal of permits of the maritime appealed for another chance and
courses, provided, that a requested for re-inspection before
development plan for the the opening of SY 1989-1990.
improvement of the buildings,
classrooms, laboratory rooms, (d) As per agreement, on April 28,
library offices and other rooms 1989 another re-inspection was
shall be formulated and made and it showed that the
implemented before the start of SY school did not show any substantial
1987-1988. improvement.
(b) In 1988, the DECS-PAMI survey Then on May 25, 1989, Secretary
conducted by technical persons, Lourdes Quisumbing issued the
revealed that PMMS, then located phase-out order of our maritime
at the 5th floor of the Republic programs in Manila campus.
Supermarket, obtained a general
score of 32 out of 1,026 points for However, the Department again
requirements in the Nautical course allowed PMMS, Manila, to operate
and 207 out of 905 points for the the maritime courses for SY 1989-
Marina Engineering course. It is 1990 despite the above phase-out
needless to say that these findings order.
are way below the DECS
requirements. Above all, the school (e) Another evaluation of your
site was described as not school was conducted by technical
conducive for offering maritime people on August 8, 1989, as
program due to its limited area. requested. The findings revealed
Furthermore, the lease on the that your school obtained a general
premises is not a long term lease rating of 31.17% for Nautical
(2 years), a condition which would Studies and 28.53% for Marine
deter the school from fully Engineering.
developing the school site.
The PMMS has been provided with the Policies
(c) In January of 1989, the findings and Standards for Maritime Education and, as
of the Secretariat for the Technical revealed by the foregoing facts, the series of
Panel for Maritime Education inspection and evaluation were (sic) done by
technical persons who have expertise in the In view of the report which was confirmed by the
field of maritime education. Therefore, the evaluation team from the National Capital
requests relative to these are not valid. Region DECS Regional Office, that Philippine
Merchant Marine School (PMMS), Manila, has
It is therefore with regrets that this Department been accepting freshman students of the
cannot rescind its order to phase-out the maritime programs despite the phase-out order
Maritime courses at PMMS, Manila and the which was issued last September 28, (sic) 1989
school is admonished not to accept incoming by former Secretary Lourdes R. Quisumbing and
first year students starting school year 1990- further reiterated by the undersigned, dated
1991. So that by school year 1992-1993, the May 9, 1990, the Department, hereby orders
maritime courses at the Manila campus would Closure of your maritime programs of your
be fully phased-out. . . . 7 school effective second semester school year
1991-1992, otherwise this Department shall be
It is suggested that PMMS concentrate its constrained to institute the appropriate
development plans in the Las Pias Campus administrative, civil and criminal proceedings
which has a great potential of being a good against you and the other responsible officers of
maritime school. your school pursuant to Section 68, Batas
Pambansa Blg. 232. . . .
Not satisfied therewith, petitioner appealed the matter to
respondent Office of the President. The transfer of the affected students shall be
facilitated by the National Capital Region in
During the pendency of the appeal the DECS thru Secretary accordance with our Memorandum dated August
Cario issued a Closure Order dated 27 August 1991 16, 1991, xerox copy of which is hereto attached
for your information.
8
For your guidance and strict compliance.
Apart from these, PMMSI's adamant refusal to Respondent Court of Appeals brushed aside the allegations of
comply with the orders of the DECS to phase out petitioner since
its unauthorized courses is sufficient ground to
uphold the order appealed from. Since 1986, [T]he Office of the President, in the resolution
PMMSI has been applying for a permit to offer dated November 10, 1992, appears to have
maritime courses but has been invariably restated the report of the respondent DECS,
denied for failure to comply with the minimum meaning, that it adopted as its own the DECS'
requirements prescribed by DECS. report, but that is not a violation of the
Notwithstanding these denials, PMMSI continues Constitution and the Rules of Court, in line
to offer maritime courses and to admit freshmen with Alba Patio De Makati vs. Alba Patio De
students in clear violation of Section 1, Rule 1, Makati Employees Association, 128 SCRA 253,
of the Education Act of 1982 . . . . 264- 265 . . . Petitioner's latest attempt at
improving its facilities does not warrant a
xxx xxx xxx reversal of the phase-out order. For, in spite of
the claim that it spent on improvements, the
basic problem remained as it still occupies the Before proceeding to resolve the merits of this case, we shall
fifth floor of the William Liao building, which is state briefly the concept regarding establishment of schools.
not conducive to learning and has a limited area The educational operation of schools is subject to prior
for expansion and development. 12 authorization of the government and is effected by
recognition. In the case of government-operated schools,
On 22 July 1993 the petition was dismissed. 13 On 26 whether local, regional or national, recognition of educational
November 1993 the motion for reconsideration was denied. 14 programs and/or operations is deemed granted
simultaneously with establishment. In all other cases the
Petitioner imputes error on respondent court: (1) in not rules and regulations governing recognition are prescribed
setting aside the questioned resolutions and orders of public and enforced by the DECS, defining therein who are qualified
respondents which were rendered without due process of law to apply, providing for a permit system, stating the
since (a) petitioner was not afforded the right to fully present conditions for the grant of recognition and for its cancellation
its case and submit evidence in support thereof; (b) public and withdrawal, and providing for related matters. 15 The
respondents did not consider the evidence presented by requirement on prior government authorization is pursuant to
petitioner; (c) public respondents' decisions have no the State policy that educational programs and/or operations
substantial evidence to support them; (d) public respondents' shall be of good quality and therefore shall at least satisfy
decisions did not disclose the bases therefor; and, (2) in minimum standards with respect to curricula, teaching staff,
implementing the closure orders which had not become final physical plant and facilities and of administrative or
and executory. management viability. 16
Petitioner asseverates that the DECS denied its right to a Set against the records of the case, the assertion of
hearing on the supposed deficiencies which allegedly petitioner that it was deprived of its right to a hearing and
justified denial of its request for issuance of a renewal permit. any opportunity whatsoever to correct the alleged
Likewise, the DECS denied petitioner the opportunity to deficiencies readily collapses. The earlier narration of facts
correct such deficiencies. The Office of the President totally clearly demonstrates that before the DECS issued the phase-
ignored supervening events properly brought to its attention out and closure orders, petitioner was duly notified, warned
in the letters of petitioner dated 2 and 3 October 1992. It and given several opportunities to correct its deficiencies and
issued resolutions strictly on the basis of the DECS' to comply with pertinent orders and regulations.
representations which do not amount to substantial
evidence. The 10 November 1992 Resolution failed to Petitioner has gone all the way up to the Office of the
sufficiently disclose the basis for affirmation of the DECS' President to seek a reversal of the phase-out and closure
phase-out and closure orders. The 12 January 1993 orders. There is thus no reason to complain of lack of
Resolution still refused to take into consideration petitioner's opportunity to explain its side as well as to comply with the
compliance with the DECS' requirements. Petitioner did not alleged deficiencies. 17 We agree with the observation of the
violate the Education Act of 1992 because it was authorized Office of the Solicitor General that
to operate by virtue of the provisional authorities issued by
the DECS. The DECS orders were not final and executory As long as the parties were given opportunity to
because petitioner challenged them and appropriately be heard before judgment was rendered, the
availed itself of the remedies available to it under the law. demands of due process were sufficiently met
(Lindo v. COMELEC, 194 SCRA 25). It should also
be noted that petitioner herein repeatedly
sought reconsideration of the various orders of nor more than ten thousand pesos (P10,000.00)
respondent DECS and its motions were duly or imprisonment for a maximum period of two
considered by respondent DECS to the extent of (2) years, or both, in the discretion of the court.
allowing and granting its request for re-
inspection of its premises. In connection If the act is committed by a school corporation,
therewith, it has been ruled that the opportunity the school head together with the person or
to be heard is the essence of procedural due persons responsible for the offense or violation
process and that any defect is cured by the shall be equally liable.
filing of a motion for reconsideration (Medenilla
v. Civil Service Commission, 194 SCRA 278). 18 Sec. 69. Administrative Sanction. The Minister
(Secretary) of Education, Culture and Sports
Furthermore, the Office of the President properly ignored (in may prescribe and impose such administrative
the sense that it did not find worthy of consideration) the sanction as he may deem reasonable and
alleged supervening events, i.e., substantial improvements appropriate in the implementing rules and
on school equipment and facilities during the pendency of regulations promulgated pursuant to this Act for
the case before said Office because the improvements should any of the following causes . . . . 5. Unauthorized
have been undertaken starting 1986. Moreover, the phase- operation of a school, or course, or any
out and closure orders were based not only on petitioner's component thereof . . . .
deficiencies as a maritime institute but also on its continued
operation without the requisite authorization from the DECS The corresponding rules implementing Secs. 68 and 69 read
and acceptance of freshman students in blatant violation of
the latter's orders and/or persistent warnings not to do so.
Verily, there are sufficient grounds to uphold the phase-out Sec. 1. Punishable Acts and Penalties. The
and closure orders of the DECS which were issued operation of a school, through the conduct or
conformably with Sec. 28 of the Education Act of 1982 which offering of educational programs or courses of
provides: studies/training without prior government
authorization in the form of permit or
Sec. 28. . . . . Punishable Violation. . . . recognition as provided for in Rule III, PART III of
Operation of schools and educational programs these Rules, and/or in violation of any of the
without authorization, and/or operation thereof terms and conditions of the said permit or
in violation of the terms of recognition, are recognition, have been declared punishable
hereby declared punishable violations subject to violations of the Act, subject to the penalties
the penalties provided in this Act. provided therein.
Secs. 68 and 69 of the same Act provide the Any person, therefore, upon conviction for an
penalties: act constituting any of the foregoing punishable
violations, shall be punished with a fine of not
Sec. 68. Penalty Clause. Any person upon less than Two Thousand Pesos (P2,000.00) nor
conviction for an act in violation of Section 28, more than Ten Thousand Pesos (P10,000.00), or
Chapter 3, Title III, shall be punished with a fine imprisonment for a maximum period of two (2)
of not less than two thousand pesos (P2,000.00) years, or both, in the discretion of the
Court: Provided, however, that when the act is disturb the action of the Secretary of Education,
committed by a school corporation, the school Culture and Sports, more so in light of the
head together with the person or persons conspicuous fact that PMMS has repeatedly
responsible for the violation or offense shall be failed to comply with the phase out order since
deemed equally liable. 1986. What is more, the grounds advanced by
PMMS have already been passed upon, and
Sec. 2. Administrative Sanction. Without separately resolved by the office a quo. 20
prejudice to the interest of students, teachers
and employees, and independently of the Petitioner's persistent refusal to comply with the phase-out
penalty imposed in Sec. 1 under this Rule, the orders on the ground that the same were not yet final and
Minister may withdraw, suspend, revoke or executory is untenable. As correctly held by the Office of the
cancel a school's authority to operate as an President
educational institution or to conduct educational
programs or courses of studies/training, for any . . . . While said phase-out (orders) may not be
of the following causes, viz: . . . . e. final and executory, there was no reason for
Unauthorized operation of a school, or program PMMSI to offer maritime courses without, the
or course of studies or component thereof, or requisite prior authority of the DECS. PMMSI
any violation of the prescribed rules governing possessed no valid permit prior to the issuance
advertisements or announcements of of the phase-out. There was no authority to
educational institutions. speak of. 21
Substantial evidence has been defined to be such relevant By reason of the special knowledge and expertise of
evidence as a reasonable mind might accept as adequate to administrative departments over matters falling under their
support a conclusion. 19 A perusal of the questioned jurisdiction, they are in a better position to pass judgment
resolutions of the Office of the President reveals that they are thereon and their findings of fact in that regard are generally
based on the records of the case which constitute substantial accorded respect, if not finality, by the courts. In the case at
evidence, proving distinctly not only petitioner's consistent bench, it is not the function of this Court nor any other court
failure to meet the DECS' minimum standards for maritime for that matter
institutes and correct its deficiencies but also its continued
operation and offering of maritime courses despite the lack . . . to review the decisions and orders of the
of permit. Secretary on the issue of whether or not an
educational institution meets the norms and
Contrary to the claim of petitioner, the 10 November 1992 standards required for permission to operate
Resolution of the Office of the President sufficiently disclosed and to continue operating as such. On this
the basis for its affirmance of the DECS' phase-out and question, no Court has the power or prerogative
closure orders: to substitute its opinion for that of the Secretary.
Indeed, it is obviously not expected that any
After a careful study, we are constrained to Court would have the competence to do so.
resolve that there exists no sufficient
justification to modify, alter or reverse the The only authority reposed in the Courts on the
appealed order. We find no plausible reason to matter is the determination of whether or not
the Secretary of Education, Culture and Sports WHEREFORE , the petition is DENIED. The questioned
has acted within the scope of powers granted Decision of the Court of Appeals dated 22 July 1993, as well
him by law and the Constitution. As long as it as its Resolution of 26 November 1993, is AFFIRMED.
appears that he has done so, any decision
rendered by him should not and will not be Costs against petitioner.
subject to review and reversal by any court.
UDK-14951 A Petition filed seeking that the PDAF be 2. Yes. Sec 8 of PD 910- the phrase and for such other
declared unconstitutional, and a cease and desist order be purposes as may be hereafter directed by the President
issued restraining President Benigno Simeon S. Aquino III constitutes an undue delegation of legislative power insofar
(President Aquino) and Secretary Abad from releasing such as it does not lay down a sufficient standard to adequately
funds to Members of Congress determine the limits of the Presidents authority with respect
to the purpose for which the Malampaya Funds may be used.
ISSUES: It gives the President wide latitude to use the Malampaya
1. Whether or not the 2013 PDAF Article and all other Funds for any other purpose he may direct and, in effect,
Congressional Pork Barrel Laws similar thereto are allows him to unilaterally appropriate public funds beyond
unconstitutional considering that they violate the principles the purview of the law.
of/constitutional provisions on (a) separation of powers; (b)
non-delegability of legislative power; (c) checks and Section 12 of PD 1869, as amended by PD 1993- the phrases:
balances; (d) accountability; (e) political dynasties; and (f)
local autonomy. (b) "to finance the priority infrastructure development
2. Whether or not the phrases (under Section 8 of PD projects was declared constitutional. IT INDICATED PURPOSE
910,116 relating to the Malampaya Funds, and under Section ADEQUATELY CURTAILS THE AUTHORITY OF THE PRESIDENT
12 of PD 1869, as amended by PD 1993, relating to the TO SPEND THE PRESIDENTIAL SOCIAL FUND ONLY FOR
Presidential Social Fund, are unconstitutional insofar as they RESTORATION PURPOSES WHICH ARISE FROM CALAMITIES.
constitute undue delegations of legislative power.
(b) and to finance the restoration of damaged or destroyed
HELD: facilities due to calamities, as may be directed and
1. Yes, the PDAF article is unconstitutional. The post- authorized by the Office of the President of the Philippines
enactment measures which govern the areas of project was declared unconstitutional.IT GIVES THE PRESIDENT
identification, fund release and fund realignment are not CARTE BLANCHE AUTHORITY TO USE THE SAME FUND FOR
related to functions of congressional oversight and, hence, ANY INFRASTRUCTURE PROJECT HE MAY SO DETERMINE AS A
allow legislators to intervene and/or assume duties that PRIORITY. VERILY, THE LAW DOES NOT SUPPLY A
properly belong to the sphere of budget execution. This DEFINITION OF PRIORITY INFRASTRUCTURE DEVELOPMENT
violates the principle of separation of powers. Congressrole PROJECTS AND HENCE, LEAVES THE PRESIDENT WITHOUT
must be confined to mere oversight that must be confined to: ANY GUIDELINE TO CONSTRUE THE SAME.
(1) scrutiny and (2) investigation and monitoring of the
4. Did Respondent Fernan act with grave abuse of
2. SEN. MIRIAM SANTIAGO V. SEN. TEOFISTO discretion in recognizing Respondent Guingona as the
GUINGONA, JR. GR NO 134577 NOVEMBER 1998 minority leader?
Facts: On July 31, 1998, Senators Miriam Defensor Santiago
and Francisco S. Tatad instituted an original petition for quo
warranto under Rule 66, Section 5, Rules of Court, seeking Held: WHEREFORE, for the above reasons, the petition is
the ouster of Senator Teofisto T. Guingona Jr. as minority hereby DISMISSED. SO ORDERED.
leader of the Senate and the declaration of Senator Tatad as
the rightful minority leader.
Ratio: On grounds of respect for the basic concept of
The following were likewise elected: Senator Ople as separation of powers, courts may not intervene in the
president pro tempore, and Sen. Franklin M. Drilon as internal affairs of the legislature; it is not within the province
majority leader. He explained that those who had voted for of courts to direct Congress how to do its work.
Senator Fernan comprised the "majority," while only those
who had voted for him, the losing nominee, belonged to the Where no specific, operable norms and standards are
"minority." shown to exist, then the legislature must be given a real and
effective opportunity to fashion and promulgate as well as to
During the discussion on who should constitute the implement them, before the courts may intervene. Being
Senate "minority," Sen. Juan M. Flavier manifested that the merely matters of procedure, their observance are of no
senators belonging to the Lakas-NUCD-UMDP Party concern to the courts, for said rules may be waived or
numbering seven (7) and, thus, also a minority had chosen disregarded by the legislative body at will, upon the
Senator Guingona as the minority leader. concurrence of a majority.
The following session day, the debate on the question This Court has no authority to interfere and unilaterally
continued, with Senators Santiago and Tatad delivering intrude into that exclusive realm, without running afoul of
privilege speeches. On the third session day, the Senate met constitutional principles that it is bound to protect and uphold
in caucus, but still failed to resolve the issue. the very duty that justifies the Court's being.
Constitutional respect and a becoming regard for the
The following day, Senators Santiago and Tatad filed sovereign acts of a coequal branch prevents this Court from
before this Court the subject petition for quo warranto, prying into the internal workings of the Senate.
alleging in the main that Senator Guingona had been
usurping, unlawfully holding and exercising the position of
Senate minority leader, a position that, according to them, In view of the Courts jurisdiction
rightfully belonged to Senator Tatad. Petitioners principally invoke Avelino v. Cuenco in arguing
that this Court has jurisdiction to settle the issue of who is
Issue: From the parties' pleadings, the Court formulated the the lawful Senate minority leader. They submit that the
following issues for resolution: definitions of "majority" and "minority" involve an
1. Does the Court have jurisdiction over the petition? interpretation of the Constitution.
2. Was there an actual violation of the Constitution?
3. Was Respondent Guingona usurping, unlawfully Upon a motion for reconsideration, however, the Court
holding and exercising the position of Senate minority ultimately assumed jurisdiction (1) "in the light of subsequent
leader? events which justify its intervention;" and (2) because
the resolution of the issue hinged on the interpretation of the
constitutional provision on the presence of a quorum to hold Majority may also refer to "the group, party, or faction
a session and therein elect a Senate President. with the larger number of votes," not necessarily more than
one half. This is sometimes referred to as plurality. In
The Court rules that the validity of the selection of contrast, minority is "a group, party, or faction with a smaller
members of the Senate Electoral Tribunal by the senators number of votes or adherents than the majority." Between
was not a political question. The choice of these members did two unequal parts or numbers comprising a whole or totality,
not depend on the Senate's "full discretionary authority," but the greater number would obviously be the majority, while
was subject to mandatory constitutional limitations. Thus, the the lesser would be the minority.
Court held that not only was it clearly within its jurisdiction to
pass upon the validity of the selection proceedings, but it In a government with a multi-party system such as in the
was also its duty to consider and determine the issue. Philippines (as pointed out by petitioners themselves), there
could be several minority parties, one of which has to be
"Judicial power includes the duty of the court of justice to identified by the Comelec as the "dominant minority party"
settle actual controversies involving rights which are legally for purposes of the general elections. In the prevailing
demandable and enforceable, and to determine whether or composition of the present Senate, members either belong to
not there has been a grave abuse of discretion amounting to different political parties or are independent. No
lack or excess of jurisdiction on the part of any branch or constitutional or statutory provision prescribes which of the
instrumentality of the Government." - 1987 Constitution. many minority groups or the independents or a combination
Well-settled is the doctrine, however, that jurisdiction over thereof has the right to select the minority leader.
the subject matter of a case is determined by the allegations
of the complaint or petition, regardless of whether the While the Constitution is explicit on the manner of
plaintiff or petitioner is entitled to the reliefasserted. In light electing a Senate President and a House Speaker, it is,
of the aforesaid allegations of petitioners, it is clear that this however, dead silent on the manner of selecting the other
Court has jurisdiction over the petition. It is well within the officers in both chambers of Congress. All that the Charter
power and jurisdiction of the Court to inquire whether indeed says is that "each House shall choose such other officers as it
the Senate or its officials committed a violation of the may deem necessary." In this regard, the Constitution vests
Constitution or gravely abuse their discretion in exercise of in each house of Congress the power "to determine the rules
their functions and prerogatives. of its proceedings."
In view of constitutional violation Pursuant thereto, the Senate formulated and adopted a
set of rules to govern its internal affairs. However, the Rules
In effect, while the Constitution mandates that the of the Senate do not provide for the positions of majority and
President of the Senate must be elected by a number minority leaders. Neither is there an open clause providing
constituting more than one half of all the members thereof, it specifically for such offices and prescribing the manner of
does not provide that the members who will not vote for him creating them or of choosing the holders thereof. At any rate,
shall ipso facto constitute the "minority", who could thereby such offices, by tradition and long practice, are actually
elect the minority leader. Verily, no law or regulation states extant.
that the defeated candidate shall automatically become
the minority leader. In view of usurpation
1. Failure to submit and fully remit to the Barangay Treasurer The Decision dated 28 July 2005 was conveyed to the
the income of their solid waste management project since Municipal Mayor
2001 particularly the sale of fertilizer derived from of Bayombong, Nueva Ecija, Severino Bagasao, for its
composting. implementation. On 3 August
2005, Municial Mayor Bagasao issued a Memorandum,
2. Failure to submit/remit to the barangay treasurer the sale wherein he stated that the Sanggunaing Bayan is not
of recyclable materials taken from garbage collection. empowered to order Martinezs removal from
service. However, the Decision remains valid until reversed
3. Using the garbage truck for other purposes like hauling and must be executed by him. For the meantime, he ordered
sand and gravel for private persons without monetary benefit the indefinite suspension of Martinez since the period of
to the barangay because no income from this source appears appeal had not yet lapsed.[9] The dispositive portion of the
in the year end report even if payments were collected x x x. said Memorandum states that:[10]
4. Using/spending barangay funds for repair, gasoline, The FOREGOING considered come AUGUST 8, 2005,
lubricants, wheels and other spare parts of the garbage truck respondent SEVERINO D. MARTINEZ is hereby directed NOT
instead of using the money or income of said truck from the to ASSUME and DISCHARGE the functions of the Office of
garbage fees collected as income from its Sold Waste the Punong Barangay of BarangayDon Mariano
Management Project. x x x. Marcos, Bayombong, Nueva Vizcaya and for complainant
JOSE CENEN SANTOS to CONTINUE assuming and discharging
5. Unliquidated traveling expenses for Seminar/Lakbay-Aral in the functions of the said office in ACTING CAPACITY pursuant
2003 because although a cash advance was made by the to the provisions of Sections 67 and 68 of Republic Act No.
respondent for the said purpose, he, however, did not attend 7160.
said seminar because on the dates when he was supposed to
be on seminar they saw him in the barangay. x x x.
On 26 August 2005, Martinez filed a Special Civil Action
6. That several attempts to discuss said problem during for Certiorari with a prayer for Temporary Restraining Order
sessions were all in vain because respondent declined to and Preliminary Injunction before the trial court against
discuss it and would adjourn the session.x x x.[6] petitioner, the SangguniangBayan and
Mayor Bagasao questioning the validity of the Decision
dated 28 July 2005 of the Sangguniang Bayan. This case was
Upon his failure to file an Answer to the Amended docketed as Special Civil Action No. 6727, which was initially
Administrative Complaint dated 6 December heard by Branch 28, but later raffled to Branch 27 of the trial
2004, Martinez was declared by the Sangguniang Bayan as in court.[11]
default. Pending the administrative
On 20 October 2005, the trial court issued an Order declaring An elective local official may be removed from office on the
the Decision of the Sangguniang Bayan and the grounds enumerated above by order of the proper court.
Memorandum of Mayor Bagasao void. It maintained that the (Emphasis provided.)
proper courts, and not the petitioner, are empowered to
remove an elective local official from office, in accordance
with Section 60 of the Local Government Code. Thus, the During the deliberations of the Senate on the Local
Order of the Sangguniang Bayan removing Martinez from Government Code,[16] the legislative intent to confine to the
service is void. As a consequence, Mayor Bagasao cannot courts, i.e., regional trial courts, the Sandiganbayan and the
prevent Martinez from assuming his office on the basis of a appellate courts, jurisdiction over cases involving the
void order. The trial court further ruled that Martinez properly removal of elective local officials was evident:
availed himself of the remedy of Special Civil Action, where
the order assailed was a patent nullity.[12] Senator Pimentel. This has been reserved, Mr. President,
including the issue of whether or not the Department
On 10 November 2005, petitioner filed a Motion for Secretary or the Office of the President can suspend or
Reconsideration[13] of the trial courts Order dated 10 remove an elective official.
October 2005. The trial court denied the said motion in
another Order dated 30 November 2005.[14] Senator Saguisag. For as long as that is open for some later
disposition, may I just add the following thought: It seems to
Hence, the present petition was filed. me that instead of identifying only the proper regional trial
Although Martinezs term as Punong Baranggay expired upon court or the Sandiganbayan, and since we know that in the
the holding of the 29 October 2007 case of a regional trial court, particularly, a case may be
Synchronized Barangay and Sangguniang Kabataan elections appealed or may be the subject of an injunction, in the
and, thus, rendering this petition moot and academic, the framing of this later on, I would like to suggest that we
Court will nevertheless settle a legal question that is capable consider replacing the phrase PROPER REGIONAL TRIAL
of repetition yet evading review.[15] COURT OR THE SANDIGANBAYAN simply by
COURTS. Kasi po, maaaring sabihin nila na mali iyong regiona
The pivotal issue in this case is whether or not l trial court o ang Sandiganbayan.
the Sangguniang Bayan may remove Martinez, an elective
local official, from office. The pertinent legal provisions and Senator Pimentel. OR THE PROPER COURT.
cases decided by this Court firmly establish that
the Sanggunaing Bayan is not empowered to do so. Senator Saguisag. OR THE PROPER COURT.
Section 60 of the Local Government Code conferred upon the Senator Pimentel. Thank you. We are willing to accept that
courts the power to remove elective local officials from office: now, Mr. President.
Section 60. Grounds for Disciplinary Actions.An elective local Senator Saguisag. It is to be incorporated in the phraseology
official may be disciplined, suspended, or removed from that we will craft to capture the other ideas that have been
office on any of the following grounds: elevated. (Emphasis provided.)
x x x x.
In Salalima v. Guingona, Jr.,[17] the Court en
banc categorically ruled that the Office of the President is
without any power to remove elected officials, since the
power is exclusively vested in the proper courts as expressly It is beyond cavil, therefore, that the power to remove erring
provided for in the last paragraph of Section 60 of the Local elective local officials from service is lodged exclusively with
Government Code. It further invalidated Article 125, Rule XIX the courts. Hence, Article 124 (sic 125)[20] (b), Rule XIX, of
of the Rules and Regulations Implementing the Local the Rules and Regulations Implementing the Local
Government Code of 1991, which provided that: Government Code, insofar as it vests power on the
disciplining authority to remove from office erring elective
Article 125. Grounds for Disciplinary Actions. x x x. local officials, is void for being repugnant to the last
paragraph of Section 60 of the Local Government Code of
x x x x. 1991. The law on suspension or removal of elective public
officials must be strictly construed and applied, and the
(b) An elective local official may be removed from office on authority in whom such power of suspension or removal is
the grounds enumerated in paragraph (a) of this Article by vested must exercise it with utmost good faith, for what is
order of the proper court or the disciplining authority involved is not just an ordinary public official but one chosen
whichever first acquires jurisdiction to the exclusion of the by the people through the exercise of their constitutional
other. right of suffrage. Their will must not be put to naught by the
caprice or partisanship of the disciplining authority. Where
the disciplining authority is given only the power to suspend
The Court nullified the aforequoted rule since the Oversight and not the power to remove, it should not be permitted to
Committee that prepared the Rules and Regulations of the manipulate the law by usurping the power to remove.
Local Government Code exceeded its authority when it (Emphasis supplied.)
granted to the disciplining authority the power to remove
elective officials, a power which the law itself granted only to
the proper courts. Thus, it is clear that under the law, The rule which confers to the proper courts the power to
the Sangguniang Bayan is not vested with the power to remove an elective local official from office is intended as a
remove Martinez. check against any capriciousness or partisan activity by the
disciplining authority. Vesting the local legislative body with
Petitioner contends that administrative cases involving the power to decide whether or not a local chief executive
elective barangay officials may be filed with, heard and may be removed from office, and only relegating to the
decided by courts a mandatory duty to implement the decision, would
the Sangguniang Panlungsod or Sangguniang Bayan concern still not free the resolution of the case from the
ed, which can, thereafter, impose a penalty of removal from capriciousness or partisanship of the disciplining
office. It further claims that the courts are merely tasked with authority. Thus, the petitioners interpretation would defeat
issuing the order of removal, after the clear intent of the law.
the Sangguniang Panlungsod or Sangguniang Bayan finds
that a penalty of removal is warranted.[18] Moreover, such an arrangement clearly demotes the courts
to nothing more than an implementing arm of
The aforementioned position put forward by the petitioner the Sangguniang Panlungsod, or Sangguniang Bayan. This
would run counter to the rationale for making the removal of would be an unmistakable breach of the doctrine on
elective officials an exclusive judicial separation of powers, thus placing the courts under the
prerogative. In Pablico v. Villapando,[19]the court declared orders of the legislative bodies of local governments. The
that: courts would be stripped of their power of review, and their
discretion in imposing the extreme penalty of removal from the doctrine of separation of powers. This allegation runs
office is thus left to be exercised by political factions which contrary to the 1987 Constitution itself, as well as
stand to benefit from the removal from office of the local jurisprudence.
elective official concerned, the very evil which Congress
sought to avoid when it enacted Section 60 of the Local The 1987 Constitution is explicit in defining the scope of
Government Code. judicial power. It establishes the authority of the courts to
determine in an appropriate action the validity of acts of the
Congress clearly meant that the removal of an elective local political departments. It speaks of judicial prerogative in
official be done only after a trial before the appropriate court, terms of duty.[21] Paragraph 2, Section 1, Article VIII of the
where court rules of procedure and evidence can ensure 1987 Constitution, provides that:
impartiality and fairness and protect against political
maneuverings. Elevating the removal of an elective local Judicial power includes the duty of the courts of justice to
official from office from an administrative case to a court settle actual controversies involving rights which are legally
case may be justified by the fact that such removal not only demandable and enforceable, and to determine whether or
punishes the official concerned but also, in effect, deprives not there has been a grave abuse of discretion amounting to
the electorate of the services of the official for whom they lack or excess of jurisdiction on the part of any branch or
voted. instrumentality of the Government. (Emphasis provided.)
It claims that this was a reiteration of Section 62, paragraph The term all court fees under Section 6, Article 61 of Republic
6 of Republic Act No. 6938, An Act to Ordain a Cooperative Act No. 9520 refers to the totality of legal fees imposed
Code of the Philippines,[2] and was made basis for the Courts under Rule 141 of the Rules of Court as an incident of
Resolution in A.M. No. 03-4-01-0, as well as of Office of the instituting an action in court.[4]These fees include filing or
Court Administrator (OCA) Circular No. 44-2007.[3] docket fees, appeal fees, fees for issuance of provisional
It avers that despite the exemptions granted by the aforesaid remedies, mediation fees, sheriffs fees, stenographers fees
laws and issuances, PHCCI had been continuously assessed and commissioners fees.[5]
and required to pay legal and other fees whenever it files
cases in court. With regard to the term sheriffs fees, this Court, in an
extended minute Resolution dated 1 September 2009, held
PHCCI reports that it filed with the Office of the Executive that the exemptions granted to cooperatives under Section 2,
Judge of the Municipal Trial Court in Cities (MTCC), paragraph 6 of Republic Act No. 6938; Section 6, Article 61 of
Dumaguete City, Negros Oriental, a Motion to implement the Republic Act No. 9520; and OCA Circular No. 44-2007 clearly
exemption of cooperatives from the payment of court and do not cover the amount required to defray the actual travel
sheriffs fees in cases filed before the courts in his jurisdiction, expenses of the sheriff, process server or other court-
but the Executive Judge ruled that the matter is of national authorized person in the service of summons, subpoena and
concern and should be brought to the attention of the other court processes issued relative to the trial of the case,
Supreme Court for it to come up with a straight policy and [6] which are neither considered as court and sheriffs fees
uniform system of collection. In the meantime, the MTCC has nor are amounts payable to the Philippine Government.[7]
continued the assessment of filing fees against cooperatives.
In fine, the 1 September 2009 Resolution exempted the
Records reveal that on 21 September 2011, Executive Judge cooperatives from court fees but not from sheriffs
Antonio Estoconing (Executive Judge Estoconing), MTCC, fees/expenses.
Dumaguete City, Negros Oriental, issued an Order treating
the motion filed by PHCCI as a mere consulta considering On 11 February 2010, however, the Supreme Court En
that no main action was filed in his court. Executive Judge Banc issued a Resolution in A.M. No. 08-2-01-0,[8] which
Estoconing submits that he had second thoughts in denied the petition of the Government Service Insurance
considering the exemption in view of the guidelines laid down System (GSIS) for recognition of its exemption from payment
in the Rules. He reported that many cases filed by PHCCI are of legal fees imposed under Section 22 of Rule 141 of the
small claims cases and under Section 8 of the Rule on Small Rules of Court. In the GSIS case, the Court citing Echegaray v.
Claims, the plaintiff is required to pay docket fees and other Secretary of Justice,[9] stressed that the 1987 Constitution
related costs unless he is allowed to litigate the case as an molded an even stronger and more independent judiciary;
indigent. took away the power of Congress to repeal, alter, or
supplement rules concerning pleading, practice and
Hence, this Petition. procedure; and held that the power to promulgate these
Rules is no longer shared by the Court with Congress, more
so, with the Executive,[10] thus:
and the SAJF. Undoubtedly, such situation is constitutionally
Since the payment of legal fees is a vital component of the infirm for it impairs the Courts guaranteed fiscal autonomy
rules promulgated by this Court concerning pleading, and erodes its independence.[17]
practice and procedure, it cannot be validly annulled, In a decision dated 26 February 2010 in Baguio Market
changed or modified by Congress. As one of the safeguards Vendors Multi-Purpose Cooperative (BAMARVEMPCO) v.
of this Courts institutional independence, the power to Cabato-Cortes,[18] this Court reiterated its ruling in
promulgate rules of pleading, practice and procedure is now the GSIS case when it denied the petition of the cooperative
the Courts exclusive domain. That power is no longer shared to be exempted from the payment of legal fees under Section
by this Court with Congress, much less with the Executive. 7(c) of Rule 141 of the Rules of Court relative to fees in
[11] petitions for extra-judicial foreclosure.
On 10 March 2010, relying again on the GSIS ruling, the
xxxx Court En Banc issued a resolution clarifying that the National
Power Corporation is not exempt from the payment of legal
The separation of powers among the three co-equal branches fees.[19]
of our government has erected an impregnable wall that
keeps the power to promulgate rules of pleading, practice With the foregoing categorical pronouncements of the
and procedure within the sole province of this Court.The Supreme Court, it is evident that the exemption of
other branches trespass upon this prerogative if they enact cooperatives from payment of court and sheriffs fees no
laws or issue orders that effectively repeal, alter or modify longer stands. Cooperatives can no longer invoke Republic
any of the procedural rules promulgated by this Act No. 6938, as amended by Republic Act No. 9520, as basis
Court. Viewed from this perspective, the claim of a legislative for exemption from the payment of legal fees.
grant of exemption from the payment of legal fees under
Section 39 of R.A. 8291 necessarily fails. WHEREFORE, in the light of the foregoing premises, the
petition of PHCCI requesting for this Court to issue an order
Congress could not have carved out an exemption for the clarifying and implementing the exemption of cooperatives
GSIS from the payment of legal fees without transgressing from the payment of court and sheriffs fees is
another equally important institutional safeguard of the hereby DENIED.
Courts independence - fiscal autonomy.[12] Fiscal autonomy
recognizes the power and authority of the Court to levy, The Office of the Court Administrator is DIRECTED to issue a
assess and collect fees,[13] including legal fees. Moreover, circular clarifying that cooperatives are not exempt from the
legal fees under Rule 141 have two basic components, the payment of the legal fees provided for under Rule 141 of the
Judiciary Development Fund (JDF) and the Special Allowance Rules of Court.
for the Judiciary Fund (SAJF).[14] The laws which established
the JDF and SAJF[15] expressly declare the identical purpose
of these funds to guarantee the independence of the
Judiciary as mandated by the Constitution and public policy. 5. ABAKADA GURO PARTY LIST V. HON. CESAR
[16] Legal fees therefore do not only constitute a vital source PURISIMA GR NO 166715 AUGUST 2008
of the Courts financial resources but also comprise an
essential element of the Courts fiscal independence. Any
exemption from the payment of legal fees granted by
Congress to government-owned or controlled corporations
and local government units will necessarily reduce the JDF