Republic of the Philippines v. Sandiganbayan GR. No. 152154, July 15, 2003, Corona, J.

FACTS: Republic (petitioner), throu h the !re"i#ential Co$$i""ion on Goo# Go%ern$ent (!CGG), repre"ente# by the &''ice o' the (olicitor General (&(G), 'ile# a petition 'or 'or'eiture be'ore the (an#i anbayan pur"uant to R) 13*+, ,)n )ct -eclarin .or'eiture /n .a%or o' the (tate )ny !roperty 0o 1a%e 2een 3nla4'ully )c5uire# 2y )ny !ublic &''icer or 6$ployee an# !ro%i#in .or the !roce#ure 0here'or7. /n the "ai# ca"e, petitioner "ou ht the #eclaration o' the a re ate a$ount o' 3(8 359: #epo"ite# in e"cro4 in the !N2, a" ill; otten 4ealth. 0he 'un#" 4ere pre%iou"ly hel# by 5 account roup", u"in %ariou" 'orei n 'oun#ation" in certain (4i"" ban<". /n a##ition, the Republic "ou ht the 'or'eiture o' 3(825 $illion an# 3(85 $illion in trea"ury note", 4hich e=cee#e# the :arco" couple>" "alarie", other la4'ul inco$e a" 4ell a" inco$e 'ro$ le iti$ately ac5uire# property. 0he trea"ury note" 4ere 'ro?en at the Central 2an< o' the !hilippine", no4 2an <o (entral n !ilipina", by %irtue o' the 'ree?e or#er i""ue# by the !CGG. 2e'ore the ca"e 4a" "et 'or pre;trial, a General ) ree$ent an# the (upple$ental ) ree$ent #ate# -ece$ber 2@, 1++3 4ere e=ecute# by the :arco" chil#ren an# then !CGG Chair$an :a tan ol Guni un#o 'or a lobal "ettle$ent o' the a""et" o' the :arco" 'a$ily. 0he General ) ree$entA(upple$ental ) ree$ent" "ou ht to i#enti'y, collate, cau"e the in%entory o' an# #i"tribute all a""et" pre"u$e# to be o4ne# by the :arco" 'a$ily un#er the con#ition" containe# therein. 0he General ) ree$ent "peci'ie# in one o' it" B4herea" clau"e"B the 'act that petitioner obtaine# a Cu# $ent 'ro$ the (4i"" .e#eral 0ribunal on -ece$ber 21, 1++0, that the 3(8359 $illion belon " #epo"ite# in the na$e o' the a'ore$entione# 5 account roup" 4ere o' ille al pro%enance. 0he 'un#" 4ere therea'ter. re$itte# to the !hilippine" in e"cro4. (ub"e5uently, re"pon#ent :arco" chil#ren $o%e# that the 'un#" be place# in custodia legis becau"e the #epo"it in e"cro4 in the !N2 4a" alle e#ly in #an er o' #i""ipation by petitioner. 0he (an#i anbayan, in it" re"olution #ate# (epte$ber @, 1++@, rante# the $otion. 1earin " 4ere con#ucte# by the (an#i anbayan on the $otion 'or "u$$ary Cu# $ent 'ile# by petitioner. (an#i anbayan rule# in 'a%or o' the !etitioner, appro%in the GeneralA(upple$ental ) ree$ent". 1o4e%er, in a re"olution #ate# 31 January 2002, the (an#i anbayan re%er"e# it"el' an# #enie# "ai# $otion 'or "u$$ary Cu# $ent. /t rule# that ,the e%i#ence o''ere# 'or "u$$ary Cu# $ent o' the ca"e #i# not pro%e that the $oney in the (4i"" 2an<" belon e# to the :arco" "pou"e" becau"e no le al proo' e=i"t" in the recor# a" to the o4ner"hip by the :arco"e" o' the 'un#" in e"cro4 'ro$ the (4i"" 2an<". 0he ba"i" 'or the 'or'eiture in 'a%or o' the o%ern$ent cannot be #ee$e# to ha%e been e"tabli"he#.7 0he Republic 'ile# the petition 'or certiorari. ISSUE: Dhether petitioner Republic 4a" able to pro%e it" ca"e 'or 'or'eiture in accor#ance 4ith the re5ui"ite" o' (ection" 2 an# 3 o' R) 13*+. Note: (ection 2. .ilin o' petition. E Dhene%er any public o''icer or e$ployee ha" ac5uire# #urin hi" incu$bency an a$ount or property 4hich i" $ani'e"tly out o' proportion to hi" "alary a" "uch public o''icer or e$ployee an# to hi" other la4'ul inco$e an# the inco$e 'ro$ le iti$ately ac5uire# property, "ai# property "hall be pre"u$e# prima facie to ha%e been unla4'ully ac5uire#.

RULI !: F6(. 0he Republic 4a" able to e"tabli"h a pri$a 'acie ca"e 'or the 'or'eiture o' the (4i"" 'un#" pur"uant to R) 13*+. R) 13*+ rai"e" the prima facie pre"u$ption that a property i" unla4'ully ac5uire#, hence "ubCect to 'or'eiture, i' it" a$ount or %alue i" $ani'e"tly #i"proportionate to the o''icial "alary an# other la4'ul inco$e o' the public o''icer 4ho o4n" it. 0he 'ollo4in 'act" $u"t be e"tabli"he# in or#er that 'or'eiture or "ei?ure o' the (4i"" #epo"it" $ay be e''ecte#: a. o4ner"hip by the public o''icer o' $oney or property ac5uire# #urin hi" incu$bency, 4hether it be in hi" na$e or other4i"e, an# b. the e=tent to 4hich the a$ount o' that $oney or property e=cee#", i. e., i" ro""ly #i"proportionate to, the le iti$ate inco$e o' the public o''icer. c. that the "ai# a$ount i" $ani'e"tly out o' proportion to hi" "alary a" "uch public o''icer or e$ployee an# to hi" other la4'ul inco$e an# the inco$e 'ro$ le iti$ately ac5uire# property. 0hat "pou"e" .er#inan# an# /$el#a :arco" 4ere public o''icial" #urin the ti$e $aterial to the in"tant ca"e 4a" ne%er in #i"pute. 0he co$bine# accu$ulate# "alarie" o' the :arco" couple 4ere re'lecte# in the Certi'ication #ate# :ay 2*, 1+@9 i""ue# by then :ini"ter o' 2u# et an# :ana e$ent )lberto Ro$ulo. 0he Certi'ication "ho4e# that, 'ro$ 1+99 to 1+@5, .er#inan# 6. :arco" an# /$el#a R. :arco" ha# accu$ulate# "alarie" in the a$ount o' !1,5*0,000 an#!*1@,*50, re"pecti%ely, or a total o' !2,2@@,*50. /n a##ition to their accu$ulate# "alarie" 'ro$ 1+99 to 1+@5 are the :arco" coupleG" co$bine# "alarie" 'ro$ January to .ebruary 1+@9 in the a$ount o' !30,@33.33. 1ence, their total accu$ulate# "alarie" a$ounte# to !2,31+,5@3.33. Con%erte# to 3.(. #ollar"

on the ba"i" o' the corre"pon#in pe"o;#ollar e=chan e rate" pre%ailin #urin the applicable perio# 4hen "ai# "alarie" 4ere recei%e#, the total a$ount ha# an e5ui%alent %alue o' 8304,3*2.43. 0he "u$ o' 8304,3*2.43 "houl# be hel# a" the only <no4n la4'ul inco$e o' re"pon#ent" "ince they #i# not 'ile any (tate$ent o' )""et" an# Hiabilitie" (()H), a" re5uire# by la4, 'ro$ 4hich their net 4orth coul# be #eter$ine#. 2e"i#e", un#er the 1+35 Con"titution, .er#inan# 6. :arco" a" !re"i#ent coul# not recei%e ,any other e$olu$ent 'ro$ the Go%ern$ent or any o' it" "ub#i%i"ion" an# in"tru$entalitie"7. I@4J Hi<e4i"e, un#er the 1+*3 Con"titution, .er#inan# 6. :arco" a" !re"i#ent coul# ,not recei%e #urin hi" tenure any other e$olu$ent 'ro$ the Go%ern$ent or any other "ource.7 I@5J /n 'act, hi" $ana e$ent o' bu"ine""e", li<e the a#$ini"tration o' 'oun#ation" to accu$ulate 'un#", 4a" e=pre""ly prohibite# un#er the 1+*3 Con"titution: )rticle K//, (ec. 4(2) E 0he !re"i#ent an# the Kice;!re"i#ent "hall not, #urin their tenure, hol# any other o''ice e=cept 4hen other4i"e pro%i#e# in thi" Con"titution, nor $ay they practice any pro'e""ion, participate #irectly or in#irectly in the $ana e$ent o' any bu"ine"", or be 'inancially intere"te# #irectly or in#irectly in any contract 4ith, or in any 'ranchi"e or "pecial pri%ile e rante# by the Go%ern$ent or any other "ub#i%i"ion, a ency, or in"tru$entality thereo', inclu#in any o%ern$ent o4ne# or controlle# corporation. )rticle K//, (ec. 11 E No :e$ber o' the National )""e$bly "hall appear a" coun"el be'ore any court in'erior to a court 4ith appellate Curi"#iction, = = =. Neither "hall he, #irectly or in#irectly, be intere"te# 'inancially in any contract 4ith, or in any 'ranchi"e or "pecial pri%ile e rante# by the Go%ern$ent, or any "ub#i%i"ion, a ency, or in"tru$entality thereo' inclu#in any o%ern$ent o4ne# or controlle# corporation #urin hi" ter$ o' o''ice. 1e "hall not inter%ene in any $atter be'ore any o''ice o' the o%ern$ent 'or hi" pecuniary bene'it. )rticle /L, (ec. * E 0he !ri$e :ini"ter an# :e$ber" o' the Cabinet "hall be "ubCect to the pro%i"ion o' (ection 11, )rticle K/// hereo' an# $ay not appear a" coun"el be'ore any court or a#$ini"trati%e bo#y, or $ana e any bu"ine"", or practice any pro'e""ion, an# "hall al"o be "ubCect to "uch other #i"5uali'ication a" $ay be pro%i#e# by la4. 0heir only <no4n la4'ul inco$e o' 8304,3*2.43 can there'ore le ally an# 'airly "er%e a" ba"i" 'or #eter$inin the e=i"tence o' a prima facie ca"e o' 'or'eiture o' the (4i"" 'un#".

"EPART#E T $F E"UCATI$ % "I&ISI$ $F AL'A( )ep)esented by its SC*$$L+S "I&ISI$ SUPERI TE "E T %. CELS$ $,ATE G.R. No. 191*5@, June @, 200*, K6H)(C&, JR., J. FACTS: (pou"e" Claro &Mate an# Gre oria Ho" 2aMo" o4ne# Hot No. 9@4+ re i"tere# un#er &C0 No. 2593. Claro &Mate ha# three chil#ren: )ntonio, Ra'ael, an# .ranci"co. 0he #i"pute# lot 4a" inherite# by .ranci"co &Mate 'ro$ Claro &Mate, by %irtue o' a prior partition a$on the latterG" 3 "on". Re"pon#ent Cel"o &Mate i" the ran#"on o' Claro &Mate, the "on o' .ranci"co &Mate. -ara a North Central 6le$entary (chool 4a" con"tructe# on a portion o' the #i"pute# lot. )l"o, !etitioner -epart$ent o' 6#ucation I-ep6#J #e%elope# an# built %ariou" "chool buil#in " an# 'acilitie" on the #i"pute# lot. (o$eti$e in 1++1, re"pon#ent 'ile# a recon"titution procee#in o' &C0 No. 2593 4hich 4a" rante# by the He a"pi City R0C, 2ranch K a'ter #ue notice, publication, an# hearin . Con"e5uently, &C0 No. R&;1@+*1 4a" i""ue#. Hater, a -ee# o' 6=traCu#icial (ettle$ent o' 6"tate an# Ce""ion 4a" e=ecute# by re"pon#ent an# hi" 3 "i"ter" 4ho 4ai%e# their "ucce""ional ri ht" in 'a%or o' re"pon#ent Cel"o &Mate. 0herea'ter, re"pon#ent cau"e# Hot No. 9@4+ to be "ub#i%i#e# into 5 lot", all un#er hi" na$e, e=cept Hot No. 9@4+;2 4hich i" un#er the na$e o' :ariano :. Hi$. &n &ctober 29, 1++2, the "ub#i%i#e# lot" 4ere i""ue# 0C0" (Hot" No. 9@4+;), 9@4+;2, 9@4+;C, 9@4+;- an# 9@4+;6. &n -ece$ber 15, 1++2, throu h hi" coun"el, re"pon#ent "ent a letter to petitioner appri"in it about the 'act" an# circu$"tance" a''ectin the ele$entary "chool an# it" occupancy o' Hot No. 9@4+;). Re"pon#ent propo"e# to petitioner -6C( that it purcha"e Hot No. 9@4+;) at the .air :ar<et Kalue o' !h!400 per "5uare $eter an# al"o re5ue"te# 'or rea"onable rental" 'ro$ 1+90. 0hen -6C( -irector re'erre# the $atter to the -6C( -i%i"ion (uperinten#ent 'or in%e"ti ation. Re"pon#ent li<e4i"e 4rote the -i"trict 6n ineer. 6n r. Roce" then in'or$e# re"pon#ent that petitioner -6C( i" the o4ner o' the "chool "ite ha%in ac5uire# the #i"pute# lot by %irtue o' a -ee# o' -onation e=ecute# by the :unicipality o' -ara a, )lbay in 'a%or o' petitioner. Con"e5uently, re"pon#ent in"titute# a Co$plaint 'or )nnul$ent o' -onation an#Aor Nuietin o' 0itle 4ith Reco%ery o' !o""e""ion o' Hot No. 9@4+. )'ter re"pon#ent te"ti'ie#, #e'en#ant" in "ai# ca"e 'ile# a Joint :otion to -i"$i"" on the roun# that re"pon#entG" "uit 4a" a ain"t the (tate 4hich 4a" prohibite# 4ithout the latterG" con"ent. 0he trial court #enie# the Joint :otion to -i"$i"", rulin that the (tate ha# i%en i$plie# con"ent by enterin into a contract. R0C: ren#ere# a -eci"ion in 'a%or o' re"pon#ent Cel"o &Mate. C): -eclare# the appeal" o' both petitioner" aban#one# an# #i"$i""e# 'or their 'ailure to pay the re5uire# #oc<et 'ee" 4ithin the re le$entary perio#. /t hel# that to uphol# the (tateG" i$$unity 'ro$ "uit 4oul# "ub%ert the en#" o' Cu"tice. 1o4e%er, it al"o pointe# out the incon%enience an# i$po""ibility o' re"torin po""e""ion o' Hot 9@4+;) to re"pon#ent con"i#erin the "ub"tantial i$pro%e$ent" built on "ai# lot by the o%ern$ent 4hich a$ounte# to al$o"t !h! 12 $illionO an# that the only relie' a%ailable 4a" 'or the o%ern$ent to pay Cu"t co$pen"ation in 'a%or o' re"pon#ent co$pute# on the ba"i" o' the %alue o' the property at the ti$e o' the o%ern$entG" ta<in o' the lan#. ISSUE: Dhether petitioner -6C( can be "ue# in thi" ca"e 4ithout it" con"ent an# 4hether petitioner it can be "ue# in#epen#ently o' the Republic o' the !hilippine". (ES. Dhether lache" can inure to the bene'it o' petitioner -6C( con"i#erin the 'act that Hot No. 9@4+;) 4a" #e%ote# to public e#ucation 4hen the ele$entary "chool 4a" built in 1+40 un#er the "uper%i"ion an# control o' -6C( up to 1++3 4hen thi" ca"e 4a" 'ile# by re"pon#ent &Mate.

RULI !: 1. -6C( can be "ue# 4ithout it" per$i""ion a" a re"ult o' it" bein pri%y to the -ee# o' -onation e=ecute# by the :unicipality o' -ara a, )lbay o%er the #i"pute# property. Dhen it %oluntarily a%e it" con"ent to the #onation, any #i"pute that $ay ari"e 'ro$ it 4oul# nece""arily brin petitioner -6C( #o4n to the le%el o' an or#inary citi?en o' the (tate %ulnerable to a "uit by an intere"te# or a''ecte# party. /t ha" "he# o'' it" $antle o' i$$unity an# relin5ui"he# an# 'or'eite# it" ar$or o' non;"uability o' the (tate. 0he Republic o' the !hilippine" nee# not be i$plea#e# a" a party;#e'en#ant in thi" ca"e con"i#erin that it i$plie#ly a%e it" appro%al to the in%ol%e$ent o' petitioner -6C( in the -ee# o' -onation. /n a "ituation in%ol%in a contract bet4een a o%ern$ent #epart$ent an# a thir# party, the Republic o' the !hilippine" nee# not be i$plea#e# a" a party to a "uit re"ultin 'ro$ "ai# contract a" it i" a""u$e# that the authority rante# to "uch #epart$ent to enter into "uch contract carrie" 4ith it the 'ull re"pon"ibility an# authority to "ue an# be "ue# in it" na$e.

2. Hache" ha" "et in. 0he #e%otion o' Hot No. 9@4+;) to e#ucation "tarte# in 1+40 an# continue# up to -ece$ber 21, 1+@@ 4hen "ai# lot 4a" #onate# to the -6C(. .ro$ then on, -6C( built %ariou" buil#in " an# intro#uce# i$pro%e$ent" on "ai# lot. Hot No. 9@4+;) 4a" continuou"ly u"e# 'or public e#ucation until :arch 1@, 1++3 4hen re"pon#ent &Mate 'ile# Ci%il Ca"e No. @*15 an# therea'ter up to the pre"ent. 0hu", 'or a total perio# o' $ore than 52 year", Hot No. 9@4+;) 4a" e=clu"i%ely an# co$pletely utili?e# by -6C( 'or public e#ucation. No e%i#ence 4a" pre"ente# to "ho4 that re"pon#ent or hi" pre#ece""or";in;intere"t e%er too< any action, a#$ini"trati%e or Cu#icial, nor either party 5ue"tione# or prote"te# the :unicipalityG" a#%er"e occupation o' a portion o' Hot 9@4+. )" petitioner ha# #e$on"trate# lache" by per"ua"i%e an# cre#ible e%i#ence, it i" incu$bent upon re"pon#ent to "ho4 that hi" pre#ece""or";in;intere"t in#ee# protecte# their ri ht" o' o4ner"hip o%er the lot. 3n'ortunately, re"pon#ent 'aile# to "ub"tantiate "uch #e'en"e o' o4ner"hip an# po""e""ion o' the lot an# e%en "<irte# thi" i""ue. De, ho4e%er, $a<e the clear #i"tinction that lache" applie" in 'a%or o' petitioner only a" re ar#" Hot 9@4+;) 4hich i" actually po""e""e# an# occupie# by it.

REPU'LIC $F T*E P*ILIPPI ES vs. *$ . &ICE TE A. *I"AL!$% in his capacity as P)esiding -udge of RTC #anila% CAR#EL$ &. CAC*ER$% in his capacity as She)iff I&% RTC #anila% and TARCILA LAPERAL #E "$.A G.R. No. 19195*, &ctober 4, 200*, G)RC/), J. FACTS/ )t the core o' the liti ation i" a 4,+24.90;"5uare $eter lot ( A)legui p)ope)ty) once co%ere# by 0C0 No. 11@52* in the na$e o' the pri%ate re"pon#ent 0arcila Haperal :en#o?a (:en#o?a). 0he lot i" "ituate# at No. 1440 )rle ui (t., (an :i uel, :anila, near the :alacaMan !alace co$ple=. &n thi" lot, no4 "tan#" the !re"i#ential Gue"t 1ou"e 4hich 4a" ho$e to 2 'or$er !re"i#ent" o' the Republic an# no4 appear" to be u"e# a" o''ice buil#in o' the &''ice o' the !re"i#ent. (o$eti$e in June 1+++, :en#o?a 'ile# a "uit 4ith the R0C o' :anila 'or recon%eyance an# the corre"pon#in #eclaration o' nullity o' a #ee# o' "ale an# title a ain"t the Republic, the Re i"ter o' -ee#" o' :anila an# one )tty. .i#el Ki%ar. /n her co$plaint, :en#o?a e""entially alle e# bein the o4ner o' the #i"pute# A)legui p)ope)ty 4hich the Republic 'orcibly #i"po""e""e# her o' an# o%er 4hich the Re i"ter o' -ee#" o' :anila i""ue# 0C0 No. 11@+11 in the na$e o' the Republic. )n"4erin , the Republic "et up, a$on other a''ir$ati%e #e'en"e", the (tateG" i$$unity 'ro$ "uit. :en#o?a 'ile# a Motion for Leave of Court to file a Third Amended Complaint 4ith a copy o' the inten#e# thir# a$en#e# co$plaint thereto attache#. R0C a#$itte# the thir# a$en#e# co$plaint. /n her a#%erte# thir# a$en#e# co$plaint 'or reco%ery an# recon%eyance o' the A)legui p)ope)ty, :en#o?a "ou ht the #eclaration o' nullity o' a "uppo"e# #ee# o' "ale #ate# July 15, 1+*5 4hich pro%i#e# the in"tru$entation to4ar# the i""uance o' 0C0 No. 11@+11 in the na$e o' the Republic. :en#o?a a%erre# that, "ince ti$e i$$e$orial, "he an# her pre#ece""or";in;intere"t ha# been in peace'ul an# a#%er"e po""e""ion o' the property. (uch po""e""ion, "he a##e#, continue# ,until the first week of July 19 ! when a group of armed men representing themselves to "e mem"ers of the #residential $ecurity %roup &#$%' of the then #resident Marcos( had forci"ly entered her residence and ordered her to turn over to them her copy of TCT )o. 11*!+ and compelled her and the mem"ers of her household to vacate the same, thus( out of fear for their lives( she handed her -wner.s /uplicate Certificate Copy of TCT )o. 11*!+ and had left and0or vacated the su"1ect property.2 0he Republic, repre"ente# by the &(G, 'ile# a Motion for 34tension. 5t a"<e# that it be i%en a perio# o' 30 #ay" (until -une 01% 01123 4ithin 4hich to "ub$it an )n"4er. June 20, 2003 ca$e an# 4ent, but no an"4er 4a" 'ile#. &n -uly 45% 0112 an# a ain on August 46% 0112, the &(G $o%e# 'or a 30;#ay e=ten"ion at each in"tance. 0he 'ilin o' the la"t t4o $otion" 'or e=ten"ion pro%e# to be an i#le e"ture, ho4e%er, "ince the trial court ha# $ean4hile i""ue# an or#er #eclarin the petitioner Republic a" in #e'ault an# allo4in the pri%ate re"pon#ent to pre"ent her e%i#ence e46parte. R0C: Ren#ere# a Cu# $ent by #e'ault 'or :en#o?a an# a ain"t the Republic. 0o the trial court, the Republic ha# %eritably con'i"cate# :en#o?aG" property, an# #epri%e# her not only o' the u"e thereo' but al"o #enie# her o' the inco$e "he coul# ha%e ha# other4i"e reali?e# #urin all the year" "he 4a" ille ally #i"po""e""e# o' the "a$e. /t or#ere# the #e'en#ant Republic to pay Cu"t co$pen"ation in the "u$ o' P472%811%111.11 !6(&(, plu" intere"t at the le al rate, until the 4hole a$ount i" pai# in 'ull 'or the ac5ui"ition o' the "ubCect property. N&06: )lthou h "et up a" a #e'en"e be'ore R0C, (tate /$$unity a" a #e'en"e 4a" not rule# upon by the lo4er court. /t 4a" not a ain "et up a" a #e'en"e be'ore (C, "o no #i"cu""ion about "uch in thi" ca"e. Naban it lan bale. ISSUE/ 9*ET*ER T*E TRIAL C$URT ERRE" I "ECLARI ! PETITI$ ER I "EFAULT. RULI !/ $. (ection 3, Rule + o' the Rule" o' Court pre"cribe" an# allo4" in the e%ent the #e'en#in party 'ail" to "ea"onably 'ile a re"pon"i%e plea#in . 0he pro%i"ion rea#": (6C. 3. /efault, declaration of.; /' the #e'en#in party 'ail" to an"4er 4ithin the ti$e allo4e# there'or, the court "hall, upon $otion o' the clai$in party 4ith notice to the #e'en#in party, an# proo' o' "uch 'ailure, #eclare the #e'en#in party in #e'ault. 0hereupon, the court "hall procee# to ren#er Cu# $ent rantin the clai$ant "uch relie' a" hi" plea#in $ay 4arrant, unle"" the court in it" #i"cretion re5uire" the clai$ant to "ub$it e%i#ence P. Dhile the i#eal lie" in a%oi#in or#er" o' #e'ault, the policy o' the la4 bein to ha%e e%ery liti ate# ca"e trie# on it" 'ull $erit", the act o' the re"pon#ent Cu# e in ren#erin the #e'ault Cu# $ent a'ter an or#er o' #e'ault 4a" properly i""ue# cannot be "truc< #o4n a" a ca"e o' ra%e abu"e o' #i"cretion. 0he ter$ ,grave a"use of discretion(7 in it" Curi#ical "en"e, connote" capriciou", #e"potic, oppre""i%e or 4hi$"ical e=erci"e o' Cu# $ent a" i" e5ui%alent to lac< o' Curi"#iction. 0he abu"e $u"t be o' "uch #e ree a" to a$ount to an e%a"ion o' a po"iti%e #uty or a %irtual re'u"al to per'or$ a #uty enCoine# by la4, a" 4here the po4er i" e=erci"e# in a capriciou" $anner. 3n#er the pre$i"e", the $ere i""uance by the trial court o' the or#er o' #e'ault 'ollo4e# by a Cu# $ent by #e'ault can ea"ily be "u"taine# a" correct an# #oubtle"" 4ithin it" Curi"#iction. (urely, a #i"po"ition #irectin the Republic to pay an enor$ou" "u$

4ithout the trial court hearin it" "i#e #oe" not, 4ithout $ore, %itiate, on #ue proce#ural roun#, the %ali#ity o' the #e'ault Cu# $ent. 0he petitioner $ay ha%e in#ee# been #epri%e# o' "uch hearin , but thi" #oe" not $ean that it" ri ht to #ue proce"" ha# been %iolate#. .or, con"e5uent to bein #eclare# in #e'ault, the #e'aultin #e'en#ant i" #ee$e# to ha%e 4ai%e# hi" ri ht to be hear# or to ta<e part in the trial. 0he han#lin "olicitor" "i$ply "5uan#ere# the RepublicG" opportunity to be hear#. 2ut $ore i$portantly, the la4 it"el' i$po"e" "uch #epri%ation o' the ri ht to participate a" a 'or$ o' penalty a ain"t one un4illin 4ithout Cu"ti'ication to Coin i""ue upon the alle ation" ten#ere# by the plainti''. 0he e%i#ence a##uce# belo4 in#ee# a#e5uately "upport" a conclu"ion that the &''ice o' the !re"i#ent, #urin the a#$ini"tration o' then !re"i#ent :arco", 4re"te# po""e""ion o' the property in 5ue"tion an# "o$eho4 "ecure# a certi'icate o' title o%er it 4ithout a con%eyin #ee# ha%in been e=ecute# to le ally Cu"ti'y the cancellation o' the ol# title (0C0 No. 11@52*) in the na$e o' the pri%ate re"pon#ent an# the i""uance o' a ne4 one (0C0 No. 11@+11) in the na$e o' petitioner Republic. )ccor#in ly, rantin pri%ate re"pon#entG" ba"ic plea 'or reco%ery o' the A)legui p)ope)ty, 4hich 4a" le ally her" all alon , an# the rein"tate$ent o' her cancelle# certi'icate o' title are le ally correct a" they are $orally ri ht. Dhile not e=actly con%enient becau"e the &''ice o' the !re"i#ent pre"ently u"e" it 'or $i= re"i#ence an# o''ice purpo"e", re"torin pri%ate re"pon#ent to her po""e""ion o' the A)legui p)ope)ty i" "till le ally an# phy"ically 'ea"ible. .or 4hat i" be'ore u", a'ter all, i" a re i"tere# o4ner o' a piece o' lan# 4ho, #urin the early #ay" o' the $artial la4 re i$e, lo"t po""e""ion thereo' to the Go%ern$ent 4hich appropriate# the "a$e 'or "o$e public u"e, but 4ithout oin throu h the le al proce"" o' e=propriation, let alone payin "uch o4ner Cu"t co$pen"ation. 0he re"toration ou ht to be co$ple$ente# by "o$e 'or$ o' $onetary co$pen"ation 'or ha%in been unCu"tly #epri%e# o' the bene'icial u"e thereo', but not, ho4e%er, in the %aryin a$ount" an# le%el 'i=e# in the a""aile# #eci"ion o' the trial court an# "et to be e=ecute# by the e5ually a""aile# 4rit o' e=ecution. 0he Court 'in#" the $onetary a4ar# "et 'orth therein to be erroneou". 0he re"pon#ent Cu# e bra?enly 4ent aroun# the e=plicit co$$an# o' Rule +, (ection 3(#) o' the Rule" o' Court 4hich #e'ine" the e=tent o' the relie' that $ay be a4ar#e# in a Cu# $ent by #e'ault, i.e., only "o $uch a" ha" been alle e# and pro%e#. 0he court act" in e=ce"" o' Curi"#iction i' it a4ar#" an a$ount beyon# the clai$ $a#e in the co$plaint or beyon# that pro%e# by the e%i#ence. 0he A)legui p)ope)ty cannot po""ibly be a""i ne#, e%en perhap" at the pre"ent real e"tate bu"ine"" "tan#ar#", a :onthly rental %alue o' at lea"t !500,000.00 or!9,000,000.00 a year, the a$ount pri%ate re"pon#ent particularly "ou ht an# atte$pte# to pro%e. 0hi" a"<in 'i ure i" clearly uncon"cionable, i' not #o4nri ht ri#iculou", atten#ant circu$"tance" con"i#ere#. 0o the Court, an a4ar# o' P01%111.11 a :onth 'or the u"e an# occupancy o' the A)legui p)ope)ty, 4hile perhap" a little bit arbitrary, i" rea"onable an# $ay be rante# pro hac vice.

"EUTSC*E !ESELLSC*AFT F;R TEC* ISC*E .USA##E AR'EIT% also <no=n as !ER#A A!E C( F$R TEC* ICAL C$$PERATI$ % >!T.3 *A S PETER PAULE . and A E IC$LA( %". CA% *$ . ARIEL CA"IE TE SA T$S% Labo) A)bite) of the A)bit)ation ')anch% LRC% and 'ER A"ETTE CAR#ELLA #A!TAAS% CAR$LI A "I$ C$% C*RIST$P*ER RA#$S% #EL&I "ELA PA.% RA "( TA#A($ and E"!AR"$ RA#ILL$ G.R. No. 15231@, )pril 19, 200+, 0/NG), J. FACTS: &n * (epte$ber 1+*1, the o%ern$ent" o' the .e#eral Republic o' Ger$any an# the Republic o' the !hilippine" rati'ie# an ) ree$ent concernin 0echnical Co;operation () ree$ent). 0he !hilippine o%ern$ent, throu h then .orei n )''air" (ecretary -o$in o (ia?on, an# the Ger$an o%ern$ent, a ree# to an )rran e$ent in 'urtherance o' the 1+*1 ) ree$ent. 0hi" )rran e$ent a''ir$e# the co$$on co$$it$ent o' both o%ern$ent" to pro$ote Cointly a proCect calle#, (ocial 1ealth /n"urance QNet4or<in an# 6$po4er$ent ((1/N6), 4hich 4a" #e"i ne# to Benable !hilippine 'a$ilie"Ee"pecially poor one"Eto $aintain their health an# "ecure health care o' "u"tainable 5uality.B 2oth o%ern$ent" li<e4i"e na$e# their re"pecti%e i$ple$entin or ani?ation" 'or (1/N6. 0he !hilippine" #e"i nate# the -epart$ent o' 1ealth (-&1) an# the !hilippine 1ealth /n"urance Corporation (!hilhealth) 4ith the i$ple$entation o' (1/N6. .or their part, the Ger$an o%ern$ent char e# the -eu"tche Ge"ell"cha't 'Rr 0echni"che Su"a$$enarbeit (G0S) G$b1, 6"chborn, 4ith the i$ple$entation o' it" contribution". !ri%ate re"pon#ent" 4ere en a e# a" contract e$ployee" hire# by G0S to 4or< 'or (1/N6 on %ariou" #ate" bet4een -ece$ber o' 1++@ to (epte$ber o' 1+++. 0he e$ploy$ent contract" o' all "i= pri%ate re"pon#ent" all "peci'ie# -r. Rainer 0oll<otter, i#enti'ie# a" an a#%i"er o' G0S, a" the Be$ployer.B )t the "a$e ti$e, all the contract" co$$only pro%i#e# that Bit i" $utually a ree# an# un#er"too# that -r. 0oll<otter, a" e$ployer i" a "econ#e# G0S e=pert 4ho i" hirin the 6$ployee on behal' o' G0S an# 'or a !hilippine;Ger$an bilateral proCect na$e# T(ocial 1ealth /n"uranceQNet4or<in an# 6$po4er$ent ((1/N6)G 4hich 4ill en# at a i%en ti$e.B /n (epte$ber o' 1+++, )nne Nicolay (Nicolay), a 2el ian national, a""u$e# the po"t o' (1/N6 !roCect :ana er. -i"a ree$ent" e%entually aro"e bet4een Nicolay an# pri%ate re"pon#ent" in $atter" "uch a" propo"e# "alary a#Cu"t$ent", an# the cour"e Nicolay 4a" ta<in in the i$ple$entation o' (1/N6 #i''erent 'ro$ her pre#ece""or". 0he #i"pute cul$inate# in a letter "i ne# by the pri%ate re"pon#ent", a##re""e# to Nicolay. 0he letter rai"e# "e%eral i""ue", alle in that a" a re"ult o' NicolayG" Bne4 thru"t, re"ource" ha%e been u"e# inappropriatelyOB that the ne4 $ana e$ent "tyle 4a" Bnot con ruent 4ith the ori inal oal" o' the proCectOB that Nicolay her"el' "u''ere# 'ro$ Bcultural in"en"iti%ityB that con"e5uently 'aile# to "u"tain healthy relation" 4ith (1/N6G" partner" an# "ta''. Nicolay treate# "ai# letter a" a re"i nation letter o' the pri%ate re"pon#ent", 4rote each o' the latter that "he 4a" acceptin their re"i nation. !ri%ate re"pon#ent" replie# 4ith a co$$on letter, clari'yin that their earlier letter 4a" not inten#e# a" a re"i nation letter, but one that $erely inten#e# to rai"e attention to 4hat they percei%e# a" %ital i""ue". Ne otiation" en"ue# bet4een pri%ate re"pon#ent" an# Nicolay, but 'or nau ht. 6ach o' the pri%ate re"pon#ent" recei%e# a letter 'ro$ Nicolay in'or$in the$ o' the pre;ter$ination o' their contract" o' e$ploy$ent on the roun#" o' B"eriou" an# ro"" in"ubor#ination, a$on other", re"ultin to lo"" o' con'i#ence an# tru"t.B &n 21 )u u"t 2000, the pri%ate re"pon#ent" 'ile# a co$plaint 'or ille al #i"$i""al 4ith the NHRC. G0S, throu h coun"el, 'ile# a :otion to -i"$i"", on the roun# that the Habor )rbiter ha# no Curi"#iction o%er the ca"e, a" it" act" 4ere un#erta<en in the #i"char e o' the o%ern$ental 'unction" an# "o%erei n act" o' the Go%ern$ent o' the .e#eral Republic o' Ger$any. 0hi" 4a" oppo"e# by pri%ate re"pon#ent" 4ith the ar u$ent" that G0S ha# 'aile# to "ecure a certi'ication that it 4a" i$$une 'ro$ "uit 'ro$ the -epart$ent o' .orei n )''air", an# that it 4a" G0S an# not the Ger$an o%ern$ent 4hich ha# i$ple$ente# the (1/N6 !roCect an# entere# into the contract" o' e$ploy$ent. LA: -enie# the :otion to -i"$i"". G0S 4a" a pri%ate corporation 4hich entere# into an e$ploy$ent contractO an# that G0S ha# 'aile# to "ecure 'ro$ the -.) a certi'ication a" to it" #iplo$atic "tatu". Hater ren#ere# a #eci"ion rantin the co$plaint 'or ille al #i"$i""al. Notably, G0S #i# not 'ile a $otion 'or recon"i#eration to the Habor )rbiterG" -eci"ion or ele%ate "ai# #eci"ion 'or appeal to the NHRC. /n"tea#, G0S opte# to a""ail the #eci"ion by 4ay o' a "pecial ci%il action 'or certiorari 'ile# 4ith the Court o' )ppeal". 0he Court o' )ppeal" pro$ul ate# a Re"olution 29 #i"$i""in G0SG" petition, 'in#in that BCu#icial recour"e at thi" "ta e o' the ca"e i" uncalle# 'or, the appropriate re$e#y o' the petitioner" bein an appeal to the NHRC. 0hu", the pre"ent petition 'or re%ie4 un#er Rule 45, a""ailin the #eci"ion an# re"olution" o' the Court o' )ppeal" an# o' the Habor )rbiter. ISSUE: Dhether the co$plaint 'or ille al #i"$i""al "houl# ha%e been #i"$i""e# 'or lac< o' Curi"#iction on account o' G0SG" in"i"tence that it enCoy" i$$unity 'ro$ "uit. RULI !: N&.

0he (1/N6 proCect 4a" i$ple$ente# pur"uant to the bilateral a ree$ent" bet4een the !hilippine an# Ger$an o%ern$ent". G0S 4a" ta"<e#, un#er the 1++1 a ree$ent, 4ith the i$ple$entation o' the contribution" o' the Ger$an o%ern$ent. 0he acti%itie" per'or$e# by G0S pertainin to the (1/N6 proCect are o%ern$ental in nature, relate# a" they are to the pro$otion o' health in"urance in the !hilippine". 0he 'act that G0S entere# into e$ploy$ent contract" 4ith the pri%ate re"pon#ent" #i# not #i"5uali'y it 'ro$ in%o<in i$$unity 'ro$ "uit. 0he $ere enterin into a contract by a 'orei n "tate 4ith a pri%ate party cannot be the ulti$ate te"t. (uch an act can only be the "tart o' the in5uiry. 0he lo ical 5ue"tion i" 4hether the 'orei n "tate i" en a e# in the acti%ity in the re ular cour"e o' bu"ine"". /' the 'orei n "tate i" not en a e# re ularly in a bu"ine"" or tra#e, the particular act or tran"action $u"t then be te"te# by it" nature. /' the act i" in pur"uit o' a "o%erei n acti%ity, or an inci#ent thereo', then it i" an act Cure i$perii, e"pecially 4hen it i" not un#erta<en 'or ain or pro'it. 2eyon# #i"pute i" the tenability o' the co$$ent point" rai"e# by G0S an# the &(G that G0S 4a" not per'or$in proprietary 'unction" not4ith"tan#in it" entry into the particular e$ploy$ent contract". Fet there i" an e5ually 'un#a$ental pre$i"e 4hich G0S an# the &(G 'ail to a##re"", na$ely: /" G0S, by conception, able to enCoy the .e#eral RepublicG" i$$unity 'ro$ "uitU /' the in"tant "uit ha# been brou ht #irectly a ain"t the .e#eral Republic o' Ger$any, there 4oul# be no #oubt that it i" a "uit brou ht a ain"t a (tate, an# the only nece""ary in5uiry i" 4hether "ai# (tate ha# con"ente# to be "ue#. 1o4e%er, the pre"ent "uit 4a" brou ht a ain"t G0S. Coun"el 'or G0S characteri?e" G0S a" Bthe i$ple$entin a ency o' the Go%ern$ent o' the .e#eral Republic o' Ger$any,B a #epiction "i$ilarly a#opte# by the &(G. Dhere "uit i" 'ile# not a ain"t the o%ern$ent it"el' or it" o''icial" but a ain"t one o' it" entitie", it $u"t be a"certaine# 4hether or not the (tate, a" the principal that $ay ulti$ately be hel# liable, ha" i%en it" con"ent to be "ue#. 0hi" a"certain$ent 4ill #epen# in the 'ir"t in"tance on 4hether the o%ern$ent a ency i$plea#e# i" incorporate# or unincorporate#. )n incorporate# a ency ha" a charter o' it" o4n that in%e"t" it 4ith a "eparate Curi#ical per"onality. 2y contra"t, the unincorporate# a ency i" "o calle# becau"e it ha" no "eparate Curi#ical per"onality but i" $er e# in the eneral $achinery o' the o%ern$ent. /' the a ency i" incorporate#, the te"t o' it" "uability i" 'oun# in it" charter. 0he "i$ple rule i" that it i" "uable i' it" charter "ay" "o, an# thi" i" true re ar#le"" o' the 'unction" it i" per'or$in . (tate i$$unity 'ro$ "uit $ay be 4ai%e# by eneral or "pecial la4. 0he "pecial la4 can ta<e the 'or$ o' the ori inal charter o' the incorporate# o%ern$ent a ency. /" G0S an incorporate# a ency o' the Ger$an o%ern$entU !ri%ate re"pon#ent" a""erte# be'ore the Habor )rbiter that G0S 4a" Ba pri%ate corporation en a e# in the i$ple$entation o' #e%elop$ent proCect".7 !ri%ate re"pon#ent" 4ere unable to a##uce any e%i#ence to "ub"tantiate their clai$ an# the Habor )rbiter acte# ra"hly in acceptin "uch clai$ 4ithout e=planation. 2ut neither ha" G0S "upplie# any e%i#ence #e'inin it" le al nature beyon# that o' the bare #e"cripti%e Bi$ple$entin a ency.B G0S it"el' pro%i#e" a $ore help'ul clue throu h it" o4n o''icial /nternet 4eb"ite. 0hi" "el';#e"cription o' G0S in it" o4n o''icial 4eb"ite #oe" not #i"pute it" characteri?ation a" an Bi$ple$entin a ency o' the .e#eral Republic o' Ger$any,B yet it bol"ter" the notion that a" a co$pany or ani?e# un#er pri%ate la4, it ha" a le al per"onality in#epen#ent o' that o' the .e#eral Republic o' Ger$any. 0a<in the #e"cription on 'ace %alue, the apparent e5ui%alent un#er !hilippine la4 i" that o' a corporation or ani?e# un#er the Corporation Co#e but o4ne# by the !hilippine o%ern$ent, or a o%ern$ent;o4ne# or controlle# corporation 4ithout ori inal charter. )n# it bear" notice that (ection 39 o' the Corporate Co#e "tate" that Be%ery corporation incorporate# un#er thi" Co#e ha" the po4er an# capacity to "ue an# be "ue# in it" corporate na$e.B /t i" entirely po""ible that un#er Ger$an la4, an entity "uch a" G0S or particularly G0S it"el' ha" not been %e"te# or ha" been "peci'ically #epri%e# the po4er an# capacity to "ue an#Aor be "ue#. Fet in the procee#in " belo4 an# be'ore thi" Court, G0S ha" 'aile# to e"tabli"h that un#er Ger$an la4, it ha" not con"ente# to be "ue# #e"pite it bein o4ne# by the .e#eral Republic o' Ger$any. /n the ab"ence o' e%i#ence to the contrary, 'orei n la4" on a particular "ubCect are pre"u$e# to be the "a$e a" tho"e o' the !hilippine", an# 'ollo4in the $o"t intelli ent a""u$ption 4e can ather, G0S i" a<in to a o%ern$ental o4ne# or controlle# corporation 4ithout ori inal charter 4hich, by %irtue o' the Corporation Co#e, ha" e=pre""ly con"ente# to be "ue#. /n !ublic /nternational Ha4, 4hen a "tate or international a ency 4i"he" to plea# "o%erei n or #iplo$atic i$$unity in a 'orei n court, it re5ue"t" the .orei n &''ice o' the "tate 4here it i" "ue# to con%ey to the court that "ai# #e'en#ant i" entitle# to i$$unity. /n the !hilippine", the practice i" 'or the 'orei n o%ern$ent or the international or ani?ation to 'ir"t "ecure an e=ecuti%e en#or"e$ent o' it" clai$ o' "o%erei n or #iplo$atic i$$unity. /t i" to be recalle# that the Habor )rbiter in thi" ca"e note# that it 4a" i$perati%e 'or petitioner" to "ecure 'ro$ the -epart$ent o' .orei n )''air" Ba certi'ication o' re"pon#ent"G #iplo$atic "tatu" an# entitle$ent to #iplo$atic pri%ile e" inclu#in i$$unity 'ro$ "uit".B 1o4e%er, ha# G0S obtaine# "uch certi'ication 'ro$ the -.), it 4oul# ha%e pro%i#e# 'actual ba"i" 'or it" clai$ o' i$$unity that 4oul#, at the %ery lea"t, e"tabli"h a #i"putable e%i#entiary pre"u$ption that the 'orei n party i" in#ee# i$$une 4hich the oppo"in party 4ill ha%e to o%erco$e 4ith it" o4n 'actual e%i#ence. De #o not "ee 4hy G0S coul# not ha%e "ecure# "uch certi'ication or en#or"e$ent 'ro$ the -.) 'or purpo"e" o' thi" ca"e.