REPUBLIC VS FELICIANO

G.R. No. 70853 148 SCRA 424 March 12, 1987

REPUBLIC OF THE PHILIPPINES, petitioner-appellee,

PABLO FELICIANO and INTERMEDIATE APPELLATE COURT, respondents-appellants

Facts:

The appeal was filed by 86 settlers of Barrio of Salvacion, representing the Republic of the Philippines to
dismiss the complaint filed by Feliciano, on the ground that the Republic of the Philippines cannot be
sued without its consent.

Prior to this appeal, respondent Pablo Feliciano filed a complaint with the Court of First Instance against
the Republic of the Philippines, represented by the Land Authority, for the recovery of ownership and
possession of a parcel of land consisting of four lots. The trial court rendered a decision declaring Lot No.
1 to be the private property of Feliciano and the rest of the property, Lots 2, 3 and 4, reverted to the
public domain.
The trial court reopened the case due to the filing of a motion to intervene and to set aside the decision
of the trial court by 86 settlers, alleging that they had been in possession of the land for more than 20
years under claim of ownership. The trial court ordered the settlers to present their evidence but they
did not appear at the day of presentation of evidence. Feliciano, on the other hand, presented additional
evidence. Thereafter, the case was submitted for decision and the trial court ruled in favor of Feliciano.

The settlers immediately filed a motion for reconsideration. The case was reopened to allow them to
present their evidence. But before this motion was acted upon, Feliciano filed a motion for execution
with the Appellate Court but it was denied.

The settlers filed a motion to dismiss on the ground that the Republic of the Philippines cannot be sued
without its consent and hence the action cannot prosper. The motion was opposed by Feliciano.

Issue/s:

Whether or not the state can be sued for recovery and possession of a parcel of land.
Discussions:

A suit against the State, under settled jurisprudence is not permitted, except upon a showing that the
State has consented to be sued, either expressly or by implication through the use of statutory language
too plain to be misinterpreted. It may be invoked by the courts sua sponte at any stage of the
proceedings.

Waiver of immunity, being a derogation of sovereignty, will not be inferred lightly. but must be construed
in strictissimi juris (of strictest right). Moreover, the Proclamation is not a legislative act. The consent of
the State to be sued must emanate from statutory authority. Waiver of State immunity can only be made
by an act of the legislative body.

Ruling/s:

No. The doctrine of non-suability of the State has proper application in this case. The plaintiff has
impleaded the Republic of the Philippines as defendant in an action for recovery of ownership and
possession of a parcel of land, bringing the State to court just like any private person who is claimed to
be usurping a piece of property. A suit for the recovery of property is not an action in rem, but an action
in personam. It is an action directed against a specific party or parties, and any judgment therein binds
only such party or parties. The complaint filed by plaintiff, the private respondent herein, is directed
against the Republic of the Philippines, represented by the Land Authority, a governmental agency
created by Republic Act No. 3844.

The complaint is clearly a suit against the State, which under settled jurisprudence is not permitted,
except upon a showing that the State has consented to be sued, either expressly or by implication
through the use of statutory language too plain to be misinterpreted. There is no such showing in the
instant case. Worse, the complaint itself fails to allege the existence of such consent

Legem Advocatus

Philippine Agila Satellite and De Guzman v. Trinidad-Lichauco, G.R. No. 142362, 03 May2006

Jhez

2 years ago

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Third Division

[TINGA, J.]

FACTS: Petitioners are Philippine Agila Satellite Inc. (PASI) and its President and Chief Executive Officer
Michael De Guzman. PASI was established by a consortium of private telecommunications carriers which
in 1994 had entered into a Memorandum of Understanding (MOU) with the DOTC, through its then
Secretary Jesus Garcia, concerning the planned launch of a Philippine-owned satellite into outer space.
Under the MOU, the launch of the satellite was to be an endeavor of the private sector, and the satellite
itself to be owned by the Filipino-owned consortium (subsequently organized as PASI). Petitioners filed
an action against the new DOTC Secretary Lichauco for allegedly having awarded the orbital slot to an
unknown awardee.
The first cause of action, for injunction, sought to establish that the award of orbital slot 153º East
Longitude should be enjoined since the DOTC had previously assigned the same orbital slot to PASI. The
second cause of action, for declaration of nullity of award, averred that the award to the unknown
bidder is null and void, as it was rendered by Lichauco beyond her authority.

ISSUE:Would the doctrine of non-suability of the State find application in this case?

HELD: NO.

The Court rules that the defense of state immunity from suit do not apply since said causes of action
cannot be properly considered as suits against the State in constitutional contemplation. These causes of
action do not seek to impose a charge or financial liability against the State, but merely the nullification
of state action. The prayers attached to these two causes of action are for the revocation of the Notice of
Bid and the nullification of the purported award, nothing more. Had it been so that petitioner
additionally sought damages in relation to said causes of action, the suit would have been considered as
one against the State. Had the petitioner impleaded the DOTC itself, an unincorporated government
agency, and not Lichauco herself, the suit would have been considered as one against the State. But
neither circumstance obtains in this case.

Legem Advocatus

Sayson v. Singson,G.R. No. L-30044, 19 December 1973

Jhez

2 years ago

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Second Division

[FERNANDO, J.]
FACTS: Petitioner Sayson was the Highway Auditor of the Bureau of Public Highways who found
overpricing in the procurement of spare parts for the repair of a D-8 bulldozer. Singson as sole proprietor
of Singkier Motor Service, filed a complaint in the lower court against the Auditor claiming for the
payment of the balance, amounting to P8,706, which was withheld due to alleged overpricing. The lower
court adjudged Singson as entitled to collect the balance. Hence this petition for certiorari.

ISSUE: Is the lower court correct in taking cognizance of the case filed by Singson for contractual money
claims against the government?

HELD: NO.

Actually, the suit disguised as one for mandamus to compel the Auditors to approve the vouchers for
payment, is a suit against the State, which cannot prosper or be entertained by the Court except with the
consent of the State. In other words, the respondent should have filed his claim with the General
Auditing Office, under the provisions of Commonwealth Act 327 which prescribe the conditions under
which money claim against the government may be filed.

It is true that once consent is secured, an action may be filed. There is nothing to prevent the State,
however, in such statutory grant, to require that certain administrative proceedings be had and be
exhausted. Also, the proper forum in the judicial hierarchy can be specified if thereafter an appeal would
be taken by the party aggrieved. Here, there was no ruling of the Auditor General. Even had there been
such, the court to which the matter should have been elevated is this Tribunal; the lower court could not
legally act on the matter. What transpired was anything but that. It is quite obvious then that it does not
have the imprint of validity.

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Republic of the Philippines

SUPREME COURT

Manila

EN BANC

G.R. No. L-8587 March 24, 1960

BENITO E. LIM, as administrator of the Intestate Estate of Arsenia Enriquez, plaintiff-appellant,

vs.

HERBERT BROWNELL, JR., Attorney General of the United States, and ASAICHI KAGAWA, defendants-
appellee, REPUBLIC OF THE PHILIPPINES, intervenor-appellee.

Angel S. Gamboa for appellant.

Townsend, Gilbert, Santos and Patajo for appellee.

Alfredo Catolico for intervenor.

GUTIERREZ DAVID, J.:

This is an appeal from an order of the Court of First Instance of Manila, dismissing plaintiff's action for
the recovery of real property for lack of jurisdiction over the subject matter.

The property in dispute consists of four parcels of land situated in Tondo, City of Manila, with a total area
of 29,151 square meters. The lands were, after the last world war, found by the Alien Property Custodian
of the United States to be registered in the name of Asaichi Kagawa, national of an enemy country,
Japan, as evidenced by Transfer Certificates of Title Nos. 64904 to 65140, inclusive, for which reason the
said Alien Property Custodian, on March 14, 1946, issued a vesting order on the authority of the Trading
with the Enemy Act of the United States, as amended, vesting in himself the ownership over two of the
said lots, Lots Nos. 1 and 2. On July, 6, 1948, the Philippine Alien Property Administrator (successor of
the Alien Property Custodian) under the authority of the same statute, issued a supplemental vesting
order, vesting in himself title to the remaining Lots Nos. 3 and 4. On August 3, 1948, the Philippine Alien
Property Administrator (acting on behalf of the President of the United States) and the President of the
Philippines, executed two formal agreements, one referring to Lots 1 and 2 and the other to Lots 3 and 4,
whereby the said Administrator transferred all the said four lots to the Republic of the Philippines upon
the latter's undertaking fully to indemnify the United States for all claims in relation to the property
transferred, which claims are payable by the United States of America or the Philippine Alien Property
Administrator of the United States under the Trading with the Enemy Act, as amended, and for all such
costs and expenses of administration as may by law be charged against the property or proceeds thereof
hereby transferred." The transfer agreements were executed pursuant to section 3 of the Philippine
Property Act of 1946 and Executive Order No. 9921, dated January 10, 1948, of the President of the
United States.

On the theory that the lots in question still belonged to Arsenia Enriquez, the latter's son Benito E. Lim
filed on November 15, 1948 a formal notice of claim to the property with the Philippine Alien Property
Administrator. The notice was subsequently amended to permit Lim to prosecute the claim as
administrator of the intestate estate of the deceased Arsenia Enriquez, thus, in effect, substituting the
intestate estate as the claimant, it being alleged that the lots were once the property of Arsenia
Enriquez; that they were mortgaged by her to the Mercantile Bank of China; that the mortgage having
been foreclosed, the property was sold at public auction during the war to the Japanese Asaichi Kagawa,
who, by means of threat and intimidation succeeded in preventing Arsenia Enriquez from exercising her
right of redemption; and that Kagawa never acquired any valid title to the property because he was
ineligible under the Constitution to acquire residential land in the Philippines by reason of alien age.

On March 7, 1950, the claim was disallowed by the Vested Property Claims Committee of the Philippine
Alien Property Administrator, and copy of the decision disallowing the claim was received by claimant's
counsel on the 15th of that month. The claimant, however, took no appeal to the Philippine Alien
Property Administrator, so that pursuant to the rules of procedure governing claims before the Philippine
Alien Property Administrator, the decision of the committee became final on April 15, 1950, that is,
twenty days after receipt of the decision by claimant's counsel.

On November 13, 1950, the claimant Benito E. Lim, as administrator of the intestate estate of Arsenia
Enriquez, filed a complaint in the Court of First Instance of Manila against the Philippine Alien Property
Administrator (later substituted by the Attorney General of the United States) for the recovery of the
property in question with back rents. The complaint was later amended to include Asaichi Kagawa as
defendant. As amended, it alleged that the lands in question formerly belonged to Arsenia Enriquez and
were mortgaged by her to the Mercantile Bank of China; that the mortgage having been foreclosed, she
was sentenced to pay the mortgage debt within 3 months; that within those 3 months the bank
commissioner, who had been appointed liquidator of said bank, assured her that she could pay her
mortgage debt little by little in monthly installments, and pursuant to that arrangement the income
derived from the mortgaged property were thereafter applied to her indebtedness, that such payment
of the mortgage debt continued until a few months after the occupation of the City of Manila by the
Japanese forces, when the Bank of Taiwan, having taken over the administration and control of all banks
in the Philippines, including the Mercantile Bank of China, had the properties sold at public auction on
October 26, 1942 by the sheriff of the city; that the properties were awarded to Asaichi Kagawa and the
sale was subsequently confirmed by the court; that if Arsenia Enriquez failed to redeem the properties
before the confirmation of the sale, it was because of the financial depression and also because she was
prevented from doing so by Kagawa through threats and intimidation; that the auction sale was irregular
and illegal because it was made without publication or notice and because though the land was
subdivided into lots, the same was sold as a whole; that because of the irregularities mentioned,
competitive bidding was prevented or stifled with the result that the lands, which could have been easily
sold for P300,000 at then prevailing prices, were awarded to Kagawa whose bid was only P54,460.40, a
price that was "grossly inadequate and shocking to the conscience;" that the titles to the lands having
been subsequently transferred to Kagawa, the latter in June, 1943 illegally dispossessed Arsenia Enriquez
and kept possession of the properties until the liberation of the City of Manila; that as Arsenia Enriquez
was still the owner of the properties, the seizure thereof by the United States Attorney General's
predecessors on the assumption that they belong to Kagawa, as well as their decision disallowing her
claim, was contrary to law. Plaintiff, therefore, prayed that the sheriff's sale to Kagawa and the vesting of
the properties in the Philippine Alien Property Administrator and the transfer thereof by the United
States to the Republic of the Philippines be declared null and void; that Arsenia Enriquez be adjudged
owner of the said properties and the Register of Deeds of Manila be ordered to issue the corresponding
transfer certificates of title to her; and that the defendant Attorney General of the United States be
required to pay rental from March 14, 1946, and the Government of the Philippines from August 3, 1948,
at the rate of P30,000 per annum with legal interest.The defendant Attorney General of the United States
and the defendant-intervenor Republic of the Philippines each filed an answer, alleging by way of
affirmative defenses (1) that the action with respect to Lots 1 and 2 had already prescribed, the same
not having been brought within the period prescribed in section 33 of the Trading with the Enemy Act, as
amended, and (2) that the lower court had no jurisdiction over the claim for rentals since the action in
that regard constituted a suit against the United States to which it had not given its consent.

The defendant Asaichi Kagawa was summoned by publication, but having failed to file an answer to the
complaint, he was declared in default. Thereafter, a preliminary hearing on the affirmative defenses was
held at the instance of the United States Attorney General pursuant to Section 5, Rule 8 of the Rules of
Court. After said hearing, the court ordered the complaint dismissed on the ground — as stated in the
dispositive part of the order — that the "court has no jurisdiction over the subject matter of this action,
taking into consideration the provisions of Sec. 34 (must be 33) of the Trading with the Enemy Act, as the
requirements needed by the above-mentioned Act have not been fulfilled by the herein plaintiff." From
that order, plaintiff has taken the present appeal.
Judging from the context of the order complained of, it would appear that the dismissal of plaintiff's
action was actually based upon the principle that a foreign state or its government cannot be sued
without its consent. Considering, however, the law applicable, we do not think the order of dismissal can
be sustained in its entirety. There is no denying that an action against the Alien Property Custodian, or
the Attorney General of the United States as his successor, involving vested property under the Trading
with the Enemy Act located in the Philippines, is in substance an action against the United States. The
immunity of the state from suit, however, cannot be invoked where the action, as in the present case, is
instituted by a person who is neither an enemy or ally of an enemy for the purpose of establishing his
right, title or interest in vested property, and of recovering his ownership and possession. Congressional
consent to such suit has expressly been given by the United States. (Sec. 3, Philippine Property Act of
1946; Philippine Alien Property Administration vs. Castelo, et al., 89 Phil., 568.)

The order of dismissal, however, with respect to plaintiff's claim for damages against the defendant
Attorney General of the United States must be upheld. The relief available to a person claiming enemy
property which has been vested by the Philippines Alien Property Custodian is limited to those expressly
provided for in the Trading with the Enemy Act, which does not include a suit for damages for the use of
such vested property. That action, as held by this Court in the Castelo case just cited, is not one of those
authorized under the Act which may be instituted in the appropriate courts of the Philippines under the
provisions of section 3 of the Philippine Property Act of 1946. Congressional consent to such suit has not
been granted.

The claim for damages for the use of the property against the intervenor defendant Republic of the
Philippines to which is was transferred, likewise, cannot be maintained because of the immunity of the
state from suit. The claim obviously constitutes a charge against, or financial liability to, the Government
and consequently cannot be entertained by the courts except with the consent of said government.
(Syquia vs. Almeda Lopez, 84 Phil., 312; 47 Off. Gaz., 665; Compañia General de Tabacos vs. Gov't of PI,
45 Phil., 663.) Plaintiff argues that by its intervention, the Republic of the Philippines, in effect, waived its
right of non-suability, but it will be remembered that the Republic intervened in the case merely to unite
with the defendant Attorney General of the United States in resisting plaintiff's claims, and for that
reason asked no affirmative relief against any party in the answer in intervention it filed. On the other
hand, plaintiff in his original complaint made no claim against the Republic and only asked for damages
against it for the use of the property when the complaint was amended. In its answer to the amended
complaint, the Republic "reproduced and incorporated by reference" all the affirmative defenses
contained in the answer of the defendant Attorney General, one of which, as already stated, is that the
lower court had no jurisdiction over the claim for rentals because of lack of consent to be sued. Clearly,
this is not a case where the state takes the initiative in an action against a private party by filing a
complaint in intervention, thereby surrendering its privileged position and coming down to the level of
the defendant — as what happened in the case of Froilan vs. Pan Oriental Shipping Co., et al. 95 Phil.,
905 cited by plaintiff — but one where the state, as one of the defendants merely resisted a claim
against it precisely on the ground, among others, of its privileged position which exempts it from suit..

With respect to the recovery or return of the properties vested, section 33 of the Trading with the Enemy
Act, as amended, provides:

SEC. 33. Return of property; notice; institution of suits, computation of time. — No return may be made
pursuant to section 9 or 32 unless notice of claim has been filed: (a) in the case of any property or
interest acquired by the United States prior to December 18, 1941, by August 9, 1948; or (b) in the case
of any property or interest acquired by the United States on or after December 18, 1941, by April 30,
1949, or two years from the vesting of the property or interest in respect of which the claim is made,
whichever is later. No suit pursuant to section 9 may be instituted after April 30, 1949, or after the
expiration of two years from the date of the seizure by or vesting in the Alien Property Custodian, as the
case may be, of the property or interest in respect of which relief is sought, whichever is later, but in
computing such two years there shall be excluded any period during which there was pending a suit or
claim for return pursuant to section 9 or 32(a) hereof. (USCA, Tit. 50, App., p. 216.)

From the above provisions, it is evident that a condition precedent to a suit for the return of property
vested under the Trading with the Enemy Act is that it should be filed not later than April 30, 1949, or
within two years from the date of vesting, whichever is later, but in computing such two years, the
period during which there was pending a suit or claim for the return of the said property pursuant to
secs. 9 or 32(a) of the Act shall be excluded. That limitation, as held in a case, is jurisdictional. (See
Cisatlantic Corporation, et al. vs. Brownell, Jr., Civil Code No. 8-221, U.S. District Court, Southern District,
New York, affirmed by the United States Court of Appeals, 2nd Circuit, May 11, 1955 (Docket No. 23499),
annexed as appendices "D" and "E" in appellees' brief.) Such being the case, it is evident that the court
below erred in dismissing the complaint, at least insofar as lots 3 and 4 of the land in dispute are
concerned. These lots were vested only on July 6, 1948 and consequently the two-year period within
which to file the action for their recovery expired on July 7, 1950. But in computing that the two-year
period, the time during which plaintiff's claim with the Philippine Alien Property Administration was
pending — from November 16, 1948 when the claim was filed to March 7, 1950 when it was dissallowed
— should be excluded. The complaint thereof filed on November 13, 1950 is well within the prescribed
period. As a matter of fact, the Attorney General of the United States concedes that the dismissal of the
complaint with respect to these lots was erroneous. Indeed, he states that he had never asked for the
dismissal of the complaint with respect to them because the complaint insofar as those properties were
concerned was filed within the period provided for in the law.
On the other hand, lots 1 and 2 were vested by the Alien Property Custodian on March 14, 1946. The
two-year period, therefore, within which to file a suit for their return expired on March 14, 1948. As no
suit or claim for the return of said properties pursuant to sections 9 or 32(a) of the Trading with the
Enemy Act was filed by plaintiff within two years from the date of vesting, the "later" date and the last
on which suit could be brought was April 30, 1949. The claim filed by plaintiff with the Philippine Alien
Property Administration on November 15, 1948 obviously could not toll the two-year period that had
already expired on March 14, 1948. And the complaint in the present case having been filed only on
November 13, 1950, the same is already barred. (Pass vs. McGrath, 192 F. 2d 415; Kroll vs. McGrath, 91 F.
Supp. 173.) The lower court, therefore, had no jurisdiction to entertain the action insofar as these lots
are concerned.

Plaintiff contends that section 33 of the Trading with the Enemy Act cannot prevail over section 40 of the
Code of Civil Procedure, which provides that an action to recover real property prescribes after 10 years,
on the theory that under international law questions relating to real property are governed by the law of
the place where the property is located and that prescription, being remedial, is likewise governed by
the laws of the forum. But the trading with the Enemy Act, by consent of the Philippine Government,
continued to be in force in the Philippines even after July 4, 1946 (Brownell, Jr., vs. Sun Life Assurance Co.
of Canada,* 50 Off. Gaz., 4814; Brownell, Jr. vs. Bautista, 95 Phil., 853) and consequently, is as much part
of the law of the land as section 40 of the Code of Civil Procedure. Contrary to plaintiff's claim, therefore,
there is here no conflict of laws involved. It should be stated that in an action under the Trading with the
Enemy Act for the recovery of property vested thereunder, the rights of the parties must necessarily be
governed by the terms of that Act. Indeed, section 7 (c) thereof explicitly provides that the relief
available to a claimant of vested property is limited to those expressly provided for by its terms.

Needless to say, the defense of limitation as contained in section 33 of Trading with the Enemy Act, as
amended, may be invoked not only by the defendant Attorney General of the United States but also by
the intervenor Republic of the Philippines to which the lands in question were transferred. To sustain
plaintiff's claim and preclude the Republic from putting up that defense would render nugatory the
provisions of the Act. For in such case, a claimant who has failed to file his claim or suit within the period
provided for in section 33 of the Act and consequently has forfeited whatever right she may have
therein, could easily circumvent the law. It would also mean that the transfer of vested property to the
Republic would have the effect of permitting re-examination of the title to such vested property which
has already become absolute in the name of the United States, the transferor, for failure of the claimant
to assert his claim within the prescribed time. This absurdity, to say the least, cannot be countenanced.

In view of the foregoing, the order appealed from insofar as it dismisses the complaint with respect to
Lots 1 and 2 and the claim for damages against the Attorney General of the United States and the
Republic of the Philippines, is affirmed, but revoked insofar as it dismisses the complaint with respect to
Lots 3 and 4, as to which the case is hereby remanded to the court below for further proceedings.
Without costs.

Paras, C.J., Bengzon, Montemayor, Bautista Angelo, Labrador, Concepcion, Reyes, J.B.L., Endencia and
Barrera, JJ., concur.

Footnotes

* 95 Phil. 228.

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. Court of Tax Appeals

GR No. 42204, January 21 1993, 217 SCRA 298

FACTS:

On January 30, 1972, the vessel S/S "Pacific Hawk" arrived at the Port of Manila carrying, among others,
80 bales of screen net consigned to Bagong Buhay Trading (Bagong Buhay).
Said importation was declared through a customs broker which was classified under Tariff Heading No.
39.06-B of the Tariff and Customs Code at 35% ad valorem.

Since the customs examiner found the subject shipment reflective of the declaration, Bagong Buhay paid
the duties and taxes due which was paid through the Bank of Asia.

Thereafter, the customs appraiser made a return of duty.

Read: Republic vs. Villasor

Acting on the strength of an information that the shipment consisted of "mosquito net" made of nylon,
the Office of the Collector of Customs ordered a re-examination of the shipment which revealed that the
shipment consisted of 80 bales of screen net, each bale containing 20 rolls or a total of 1,600 rolls.

The value of the shipment was re-appraised.

Furthermore, the Collector of Customs determined the subject shipment as made of synthetic
(polyethylene) woven fabric classifiable under Tariff Heading No. 51.04-B at 100% ad valorem.

Thus, Bagong Buhay Trading was assessed P272,600.00 as duties and taxes due on the shipment in
question.

Since the shipment was also misdeclared as to quantity and value, the Collector of Customs forfeited the
subject shipment in favor of the government which was also affirmed by the Commissioner of Customs.
However, the Court of Tax Appeals reversed the decision of the Commissioner declaring that the latter
erred in imputing fraud upon private respondent because fraud is never presumed and thus concluded
that the forfeiture of the articles in question was not in accordance with law.

As a consequence, several motions were filed and private respondent demands that the Bureau of
Customs be ordered to pay for damages.

ISSUE:

Whether or not the Collector of Customs may be held liable.

HELD:

The Bureau of Customs cannot be held liable for actual damages that the private respondent sustained
with regard to its goods.

Otherwise, to permit private respondent's claim to prosper would violate the doctrine of sovereign
immunity.

Since it demands that the Commissioner of Customs be ordered to pay for actual damages it sustained,
for which ultimately liability will fall on the government, it is obvious that this case has been converted
technically into a suit against the state.

Read: Merritt vs. Government of the Philippine Islands

On this point, the political doctrine that "the state may not be sued without its consent," categorically
applies.
As an unincorporated government agency without any separate juridical personality of its own, the
Bureau of Customs enjoys immunity from suit.

Along with the Bureau of Internal Revenue, it is invested with an inherent power of sovereignty, namely,
taxation.

As an agency, the Bureau of Customs performs the governmental function of collecting revenues which is
definitely not a proprietary function.

Thus, private respondent's claim for damages against the Commissioner of Customs must fail.

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Friday, June 08, 2018

CASE DIGEST: REPUBLIC V. SANDIGANBAYAN & MARCOS

G.R. No. 155832 : December 7, 2010

REPUBLIC OF THE PHILIPPINES, Petitioner, v. SANDIGANBAYAN (Fourth Division) and IMELDA R. MARCOS,
Respondents.

ABAD, J.:

FACTS:

Immediately after assuming power, President Corazon C. Aquino issued Executive Order 1, creating the
PCGG. She empowered the PCGG to recover all ill-gotten wealth allegedly amassed by former President
Ferdinand E. Marcos, his family, and close associates during his 20-year regime.

Acting on the authority given them, Attys. Ramirez and Abella issued a sequestration order against the
Marcoses Olot, Tolosa, Leyte property (Olot Resthouse), a 17-room affair sitting on 42 hectares of
beachfront land, with a golf course, swimming pool, cottages, a pelota court, and a pavilion.

Petitioner Republic of the Philippines, represented by the PCGG, filed a complaint for recovery of ill-
gotten wealth against President Marcos and his wife, respondent Mrs. Marcos, before the
Sandiganbayan.

Mrs. Marcos filed a motion to quash the March 18, 1986 sequestration order against the Olot Resthouse,
claiming that such order, issued only by Attys. Ramirez and Abella, was void for failing to observe Sec. 3
of the PCGG Rules and Regulations. The rules required the signatures of at least two PCGG
Commissioners.

The Sandiganbayan issued the assailed Resolution, granting the motion to quash and ordering the full
restoration of the Olot Resthouse to Mrs. Marcos.

ISSUE: Whether or not sequestration order against the Olot Resthouse, issued by PCGG agents before
the enactment of the PCGG rules, was validly issued.
HELD: No. Sandiganbayan Decision Affirmed.

POLITICAL LAW- Under Section 26, Article XVIII of the Constitution, an order of sequestration may only
issue upon a showing "of a prima facie case" that the properties are ill-gotten wealth under Executive
Orders 1 and 2

In Bataan Shipyard & Engineering Co, Inc. v. PCGG, the Court held that a prima facie factual foundation
that the properties sequestered are "ill-gotten wealth" is required. The power to determine the
existence of a prima facie case has been vested in the PCGG as an incident to its investigatory powers.
The two-commissioner rule is obviously intended to assure a collegial determination of such fact.

Here, it is clear that the PCGG did not make a prior determination of the existence of a prima facie case
that would warrant the sequestration of the Olot Resthouse. The Republic presented no evidence before
the Sandiganbayan that shows differently. Nor did the Republic demonstrate that the two PCGG
representatives were given the quasi-judicial authority to receive and consider evidence that would
warrant such a prima facie finding.

Parenthetically, the Republics supposed evidence does not show how the Marcoses acquired the
sequestered property, what makes it "ill-gotten wealth," and how former President Marcos intervened in
its acquisition. Taking the foregoing view, the resolution of the issue surrounding the character of the
property sequestered whether or not it could prima facie be considered ill-gotten should be necessary.

Even assuming arguendo that Atty. Ramirez had been given prior authority by the PCGG to place Dio
Island Resort under sequestration, nevertheless, the sequestration order he issued is still void since
PCGG may not delegate its authority to sequester to its representatives and subordinates, and any such
delegation is invalid and ineffective.

The absence of a prior determination by the PCGG of a prima facie basis for the sequestration order is,
unavoidably, a fatal defect which rendered the sequestration of respondent corporation and its
properties void ab initio. Being void ab initio, it is deemed non-existent, as though it had never been
issued.

POLITICAL LAW- judicial or quasi-judicial powers may not be delegated

Although the two PCGG lawyers issued the sequestration order in this case on March 18, 1986, before
the passage of Sec. 3 of the PCGG Rules, such consideration is immaterial following our above ruling.

In PCGG v. Judge Pe, the Court held that the powers, functions and duties of the PCGG amount to the
exercise of quasi-judicial functions, and the exercise of such functions cannot be delegated by the
Commission to its representatives or subordinates or task forces because of the well-established
principle that judicial or quasi-judicial powers may not be delegated.

DISMISSED.

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Home » Constitutional Law 1 » Froilan vs Pan Oriental Shipping

Froilan vs Pan Oriental Shipping

This entry was posted in Constitutional Law 1 Doctrine of Immunity from Suit and tagged Political Law 1
on November 2, 2014 by Morrie26

Froilan vs Pan Oriental Shipping

waiver of sovereign immunity

FROILAN VS PAN ORIENTAL SHIPPING

G.R. No. L-6060 September 30, 1954

FERNANDO A. FROILAN, plaintiff-appellee,

vs.

PAN ORIENTAL SHIPPING CO., defendant-appellant,

REPUBLIC OF THE PHILIPPINES, intervenor-appellee.

Facts:

Plaintiff, Fernando Froilan filed a complaint against the defendant-appellant, Pan Oriental Shipping Co.,
alleging that he purchased from the Shipping Commission the vessel for P200,000, paying P50,000 down
and agreeing to pay the balance in instalments. To secure the payment of the balance of the purchase
price, he executed a chattel mortgage of said vessel in favor of the Shipping Commission. For various
reasons, among them the non-payment of the installments, the Shipping Commission tool possession of
said vessel and considered the contract of sale cancelled. The Shipping Commission chartered and
delivered said vessel to the defendant-appellant Pan Oriental Shipping Co. subject to the approval of the
President of the Philippines. Plaintiff appealed the action of the Shipping Commission to the President of
the Philippines and, in its meeting the Cabinet restored him to all his rights under his original contract
with the Shipping Commission. Plaintiff had repeatedly demanded from the Pan Oriental Shipping Co.
the possession of the vessel in question but the latter refused to do so.

Plaintiff, prayed that, upon the approval of the bond accompanying his complaint, a writ of replevin be
issued for the seizure of said vessel with all its equipment and appurtenances, and that after hearing, he
be adjudged to have the rightful possession thereof . The lower court issued the writ of replevin prayed
for by Froilan and by virtue thereof the Pan Oriental Shipping Co. was divested of its possession of said
vessel.

Pan Oriental protested to this restoration of Plaintiff ‘s rights under the contract of sale, for the reason
that when the vessel was delivered to it, the Shipping Administration had authority to dispose of said
authority to the property, Plaintiff having already relinquished whatever rights he may have thereon.
Plaintiff paid the required cash of P10,000.00 and as Pan Oriental refused to surrender possession of the
vessel, he filed an action to recover possession thereof and have him declared the rightful owner of said
property. The Republic of the Philippines was allowed to intervene in said civil case praying for the
possession of the in order that the chattel mortgage constituted thereon may be foreclosed.

Issues:

Whether or not the Court has jurisdiction over the intervenor with regard to the counterclaim.

Discussions:

When the government enters into a contract, for the State is then deem to have divested itself of the
mantle of sovereign immunity and descended to the level of the ordinary individual. Having done so, it
becomes subject to judicial action and processes.
Rulings:

Yes. The Supreme Court held that the government impliedly allowed itself to be sued when it filed a
complaint in intervention for the purpose of asserting claim for affirmative relief against the plaintiff to
the recovery of the vessel. The immunity of the state from suits does not deprive it of the right to sue
private parties in its own courts. The state as plaintiff may avail itself of the different forms of actions
open to private litigants. In short, by taking the initiative in an action against a private party, the state
surrenders its privileged position and comes down to the level of the defendant. The latter automatically
acquires, within certain limits, the right to set up whatever claims and other defenses he might have
against the state.

Amigable vs Cuenca

Doctrine of Immunity from Suit

AMIGABLE VS CUENCA

G.R. No. L-26400 43 SCRA 487 February 29, 1972

VICTORIA AMIGABLE, plaintiff-appellant,

vs.

NICOLAS CUENCA, as Commissioner of Public Highways and REPUBLIC OF THE PHILIPPINES, defendants-
appellees.
Facts:

This is an appeal from the decision of the Court of First Instance of Cebu in its Civil Case, dismissing the
plaintiff’s complaint.

Victoria Amigable, the petitioner is a rightful owner of a lot in Cebu City. Without prior expropriation or
negotiated sale, the government used a portion of said lot for the construction of the Mango and
Gorordo Avenues.

Amigable’s counsel wrote the President of the Philippines, requesting payment of the portion of the said
lot. It was disallowed by the Auditor General in his 9th Endorsement. Petitioner then filed a complaint
against the Republic of the Philippines and Nicolas Cuenca, in his capacity as Commissioner of Public
Highways, for the recovery of ownership and possession of the lot.
Defendants argue that the: (1) that the action was premature, the claim not having been filed first with
the Office of the Auditor General; (2) that the right of action for the recovery had already prescribed; (3)
that the action being a suit against the Government, the claim for moral damages, attorney’s fees and
costs had no valid basis since the Government had not given its consent to be sued; and (4) that
inasmuch as it was the province of Cebu that appropriated and used the area involved in the
construction of Mango Avenue, plaintiff had no cause of action against the defendants.

The court rendered its decision holding that it had no jurisdiction over the plaintiff’s cause of action for
the recovery of possession and ownership of the lot on the ground that the government cannot be sued
without its consent; that it had neither original nor appellate jurisdiction to hear and decide plaintiff’s
claim for compensatory damages, being a money claim against the government; and that it had long
prescribed, nor did it have jurisdiction over said claim because the government had not given its consent
to be sued. Accordingly, the complaint was dismissed.

Issues:

Whether or not petitioner Amigable, may properly sue the government under the facts of the case.

Decisions:

The doctrine of immunity from suit cannot serve as an instrument for perpetrating an injustice to a
citizen.
Quoting the decision from Ministerio vs. Court of First Instance of Cebu, “Where the government takes
away property from a private landowner for public use without going through the legal process of
expropriation or negotiated sale, the aggrieved party may properly maintain a suit against the
government without violating the doctrine of governmental immunity from suit.

Rulings:

Yes. Considering that no annotation in favor of the government appears at the back of her certificate of
title and that she has not executed any deed of conveyance of any portion of her lot to the government,
the appellant remains the owner of the whole lot. As registered owner, she could bring an action to
recover possession of the portion of land in question at any time because possession is one of the
attributes of ownership. However, since restoration of possession of said portion by the government is
neither convenient nor feasible at this time because it is now and has been used for road purposes, the
only relief available is for the government to make due compensation which it could and should have
done years ago. To determine the due compensation for the land, the basis should be the price or value
thereof at the time of the taking.
As regards the claim for damages, the plaintiff is entitled thereto in the form of legal interest on the price
of the land from the time it was taken up to the time that payment is made by the government. In
addition, the government should pay for attorney’s fees, the amount of which should be fixed by the trial
court after hearing

Torio vs. Fontanilla

Facts:

On October 21, 1978, the municipal council of Malasiqui, Pangasinan passed 2 resolutions: one for
management of the town fiesta celebration and the other for the creation of the Malasiqui Town Fiesta
Executive Committee. The Executive Committee, in turn, organized a sub-committee on entertainment
and stage with Jose Macaraeg as Chairman. The council appropriated the amount of P100.00 for the
construction of 2 stages, one for the "zarzuela" and another for the cancionan. While the zarzuela was
being held, the stage collapsed. Vicente Fontanilla was pinned underneath and died in the afternoon of
the following day. Fontanilla’s heirs filed a complaint for damages with the CFI of Manila. The defendants
were the municipality, the municipal council and the municipal council members. In its Answer,
defendant municipality argued that as a legally and duly organized public corporation it performs
sovereign functions and the holding of a town fiesta was an exercise of its governmental functions from
which no liability can arise to answer for the negligence of any of its agents. The defendant councilors, in
turn, maintained that they merely acted as agents of the municipality in carrying out the municipal
ordinance providing for the management of the town fiesta celebration and as such they are likewise not
liable for damages as the undertaking was not one for profit; furthermore, they had exercised due care
and diligence in implementing the municipal ordinance. CFI held that the municipal council exercised
due diligence in selecting the person to construct the stage and dismissed the complaint. CA reversed
the decision and held all defendants solidarily liable for damages.

Issues:

1. Is the celebration of a town fiesta authorized by a municipal council a governmental or a corporate

function of the municipality?

2. Is the municipality liable for the death of Fontanilla?

3. Are the municipal councilors who enacted the ordinance and created the fiesta committee liable for
the death of Fontanilla?

Held:

1. The holding of the town fiesta in 1959 by the municipality of Malsiqui Pangasinan was an exercise of a
private or proprietary function of the municipality.

Section 2282 of the Chatter on Municipal Law of the Revised Administrative Code simply gives authority
to the municipality to celebrate a yearly fiesta but it does not impose upon it a duty to observe one.
Holding a fiesta even if the purpose is to commemorate a religious or historical event of the town is in
essence an act for the special benefit of the community and not for the general welfare of the public
performed in pursuance of a policy of the state. The mere fact that the celebration, as claimed was not
to secure profit or gain but merely to provide entertainment to the town inhabitants is not a conclusive
test. For instance, the maintenance of parks is not a source of income for the nonetheless it is private
undertaking as distinguished from the maintenance of public schools, jails, and the like which are for
public service. No governmental or public policy of the state is involved in the celebration of a town
fiesta.

Municipal corporations exist in a dual capacity, and their functions are two fold. In one they exercise the
right springing from sovereignty, and while in the performance of the duties pertaining thereto, their
acts are political and governmental Their officers and agents in such capacity, though elected or
appointed by the are nevertheless public functionaries performing a public service, and as such they are
officers, agents, and servants of the state. In the other capacity, the municipalities exercise a private,
proprietary or corporate right, arising from their existence as legal persons and not as public agencies.
Their officers and agents in the performance of such functions act in behalf of the municipalities in their
corporate or individual capacity, and not for the state or sovereign power.

2. Under the doctrine of respondent superior, petitioner-municipality is liable for damages for the death
of Vicente Fontanilla because the accident was attributable to the negligence of the municipality's
officers, employees, or agents.

Art. 2176, Civil Code: Whoever by act or omission causes damage to another, there being fault or
negligence, is obliged to pay for the damage done. . .
Art. 2180, Civil Code: The obligation imposed by article 2176 is demandable not only for one's own acts
or omission, but also for those of persons for whom one is responsible.

It was found that the stage was not strong enough considering that only P100.00 was appropriate for the
construction of two stages and while the floor of the "zarzuela" stage was of wooden planks, the post
and braces used were of bamboo material. The collapse of the stage was also attributable to the great
number of onlookers who mounted the stage. The municipality and/or its agents had the necessary
means within its command to prevent such an occurrence. But they failed take the necessary steps to
maintain the safety of the stage, particularly, in preventing non-participants or spectators from mounting
and accumulating on the stage.

Municipality cannot evade ability and/or liability under the fact that it was Jose Macaraeg who
constructed the stage. The municipality acting through its municipal council appointed Macaraeg as
chairman of the sub-committee on entertainment and in charge of the construction of the "zarzuela"
stage. Macaraeg acted merely as an agent of the Municipality. Under the doctrine of respondent
superior mentioned earlier, petitioner is responsible or liable for the negligence of its agent acting within
his assigned tasks.

3. The celebration of a town fiesta by the Municipality of Malasiqui was not a governmental function.
The legal consequence thereof is that the Municipality stands on the same footing as an ordinary private
corporation with the municipal council acting as its board of directors. It is an elementary principle that a
corporation has a personality, separate and distinct from its officers, directors, or persons composing it
and the latter are not as a rule co-responsible in an action for damages for tort or negligence culpa
aquilla committed by the corporation's employees or agents unless there is a showing of bad faith or
gross or wanton negligence on their part. The records do not show that municipal councilors directly
participated in the defective construction of the "zarzuela" stage or that they personally permitted
spectators to go up the platform. Thus, they are absolved from liability. (Torio vs. Fontanilla, GR No. L-
29993, October 23, 1978)

Animos vs. PVAO

G.R. No. 79156, June 22, 1989

FACTS: Isidro Animos is a World War II veteran, having been a member of the USAFFE and the guerilla
forces thereafter. Originally, the case was a suit for mandamus by the petitioners against PVAO, for the
payment of full pension benefits, retroactive to 1947, under Republic Act No. 65, as amended. However,
the petitioner’s claim was denied on the basis that Animos’ disability was only considered partial, rather
than total, according to the “Rules on Disability Ratings”, thus precluding the maximum payment of his
pension benefits. The petitioner submits that the rating system adopted by PVAO is null and void.

ISSUE: Whether or not the complaint against PVAO can be considered a suit against the state.

HELD: No. The doctrine of immunity from the suit will not apply and may not be invoked where the
public official is being sued in his private and personal capacity as an ordinary citizen. When officers and
agents of the government are sued in their individual capacity, the cloak of protection from the
government is removed. According to the doctrine in Ruiz vs. Cabahug: “We hold that under the facts
and circumstances alleged in the amended complaint, which should be taken on its face value, the suit is
not one against the Government, or a claim against it, but one against the officials to compel them to act
in accordance with the rights to be established by the contending architects, or to prevent them from
making payment and recognition until the contending architects have established their respective rights
and interests in the funds retained and in the credit for the work done”. Hence, the complaint cannot be
considered a suit against the state because it is a well-settled principle of law that we may consider a
public official liable in his personal private capacity for the damage caused by his acts when done with
malice and in bad faith, or beyond the scope of his authority and jurisdiction.

US vs. Reyes

G.R. No. 79253, March 1, 1993

FACTS: Nelia T. Montoya, an American citizen employed as an identification checker at the U.S. Navy
Exchange (NEX) at the Joint United States Military Assistance Group (JUSMAG) headquarters in Quezon
City, filed a complaint against Maxine Bradford, also an American citizen working as a manager at
JUSMAG Headquarter’s activity exchange, for damages due to the oppressive and discriminatory acts
committed by the latter in excess of her authority as store manager of the NEX JUSMAG. This was due to
the incident on January 22, 1987 when Bradford searched Montoya’s body and belongings while the
latter was already in the parking area after buying some items NEX JUSMAG’s retail store, where she had
purchasing privileges. To support the motion, the petitioners claimed that checking of purchases is a
routine procedure observed at base retail outlets to protect and safeguard merchandise, cash, and
equipment pursuant to paragraphs 2 and 4(b) of NAVRESALEACT SUBIC INST. 5500.1. 7. Therefore,
Bradford’s order to check all employee purchases was done in the exercise of her duties as Manager of
the NEX-JUSMAG.

ISSUE: Whether or not Bradford enjoys diplomatic immunity.

HELD: No. Under Art. 16(b) of the 1953 Military Assistance Agreement creating the JUSMAG, “only the
Chief of the Military Adviser Group and not more than six other senior members thereof designated
under by him will be accorded diplomatic immunity”. The court also ruled that Art. 31 of the Vienna
Convention on Diplomatic Relations provided an exception; stating that even diplomatic agents who
enjoy immunity are liable if they perform any professional or commercial activity outside his official
functions. Therefore, since Bradford works as NEX-JUSMAG’s Manager, she is not among those officers
granted diplomatic immunity.