CONSTI LAW CASE DIGESTS [SESSION 2]

PCGG vs Sandiganbayan, et al
G.R. Nos. 151809-12. April 12, 2005
<https://www.scribd.com/document/235151922/PCGG-vs-SDB-digest>

Facts:
On February 1991, Former Solicitor General Estelito Mendoz, who has currently resumed the private practice
of law, was sought to be disqualified from representing the Lucio Tan group, in the 1987 case involving General Bank
and Trust Company (GENBANK) as one of those properties subject to a writ of sequestration by PCGG being alleged
to be ill gotten wealth acquired during the Marcos Regime. It was averred by the PCGG that there exists an adverse
interest on Mendoza since he was the one who filed a petition praying for assistance and supervision of the court in
the liquidation of GENBANK when he was still a Solicitor General, which bank was subsequently owned by the Lucio
Tan group when it submitted the winning bid.
PCGG invokes Rule 6.03of the Code of Professional Responsibility which prohibits former government lawyers from
accepting engagement or employment in connection with any matter in which he had intervened while in said
service.
Sandiganbayan rejects PCGGs motion by arguing that CGG failed to prove the existence of an inconsistency between
respondent Mendozas former function as Solicitor General and his present employment as counsel of the Lucio Tan
group and that Mendozas appearance as counsel for respondents Tan, et al. was beyond the one-year prohibited
period under Section 7(b) of Republic Act No. 6713 since he ceased to be Solicitor General in the year 1986.

Issue: WON Rule 6.03 of the Code of Professional Responsibility applies to respondent Mendoza

Ruling:
No, Rule 6.03 of the CPR is inapplicable in the case. Rule 6.03 A lawyer shall not, after leaving government service,
accept engagement or employment in connection with any matter in which he had intervened while in said service.
The motion for disqualification should be dismissed for the following reasons:
1) After discussing the history of the present Code of Professional Responsibility which revealed that the word
intervene is applicable to both adverse interest conflicts and congruent interest conflicts, it has been found
that neither of these conflicts exists in the liquidation case and the sequestration case.

2) The legality of the liquidation of GENBANK is not an issue in the sequestration cases.
The matter where he got himself involved was in informing Central Bank on the procedure provided by law
to liquidate GENBANK through the courts and in filing the necessary petition in the then Court of First
Instance. The subject matter of the special proceeding, therefore, is not the same nor is related to but is
different from the subject matter in the civil case. The civil case involves the sequestration of the stocks
owned by respondents Tan, et al., in Allied Bank on the alleged ground that they are ill-gotten. The case does
not involve the liquidation of GENBANK. Nor does it involve the sale of GENBANK to Allied Bank. Whether the
shares of stock of the reorganized Allied Bank are ill-gotten is far removed from the issue of the dissolution
and liquidation of GENBANK. GENBANK was liquidated by the Central Bank due, among others, to the alleged
banking malpractices of its owners and officers.

3) Mendozas intervention in the liquidation of Genbank is not substantial and significant to warrant
disqualification.
The petition in the special proceedings is an initiatory pleading, hence, it has to be signed by respondent
Mendoza as the then sitting Solicitor General. For another, the record is arid as to the actual participation of
respondent Mendoza in the subsequent proceedings. Moreover, the petition filed merely seeks
the assistance of the court in the liquidation of GENBANK. The principal role of the court in this type of
proceedings is to assist the Central Bank in determining claims of creditors against the GENBANK.
It is worthy to note that in construing the words of such rule in this case, the Court balanced the two policy
considerations of having a chilling effect on government recruitment of able legal talent and the use of former
government employment as a litigation tactic to harass opposing counsel.

1
 ERNESTO CALLADO vs. INTERNATIONAL RICE RESEARCH INSTITUTE (IRRI)
G.R. No. 106483 May 22, 1995/ ROMERO, J.:
<http://casesdigests.blogspot.com/2013/08/ernesto-callado-vs-international-rice.html>

Facts: Ernesto Callado, petitioner, was employed as a driver at the IRRI. One day while driving an IRRI vehicle on an
official trip to the NAIA and back to the IRRI, petitioner figured in an accident.

Petitioner was informed of the findings of a preliminary investigation conducted by the IRRI's Human Resource
Development Department Manager. In view of the findings, he was charged with:
(1) Driving an institute vehicle while on official duty under the influence of liquor;
(2) Serious misconduct consisting of failure to report to supervisors the failure of the vehicle to start because of a
problem with the car battery, and
(3) Gross and habitual neglect of duties.

Petitioner submitted his answer and defenses to the charges against him. However, IRRI issued a Notice of Termination
to petitioner.

Thereafter, petitioner filed a complaint before the Labor Arbiter for illegal dismissal, illegal suspension and indemnity
pay with moral and exemplary damages and attorney's fees.

IRRI wrote the Labor Arbiter to inform him that the Institute enjoys immunity from legal process by virtue of Article 3
of Presidential Decree No. 1620, 5 and that it invokes such diplomatic immunity and privileges as an international
organization in the instant case filed by petitioner, not having waived the same.

While admitting IRRI's defense of immunity, the Labor Arbiter, nonetheless, cited an Order issued by the Institute to
the effect that "in all cases of termination, respondent IRRI waives its immunity," and, accordingly, considered the
defense of immunity no longer a legal obstacle in resolving the case.

The NLRC found merit in private respondent's appeal and, finding that IRRI did not waive its immunity, ordered the
aforesaid decision of the Labor Arbiter set aside and the complaint dismissed.

In this petition petitioner contends that the immunity of the IRRI as an international organization granted by Article 3
of Presidential Decree No. 1620 may not be invoked in the case at bench inasmuch as it waived the same by virtue of
its Memorandum on "Guidelines on the handling of dismissed employees in relation to P.D. 1620."

Issue: Did the (IRRI) waive its immunity from suit in this dispute which arose from an employer-employee relationship?

Held: No.

P.D. No. 1620, Article 3 provides:

Art. 3. Immunity from Legal Process. The Institute shall enjoy immunity from any penal, civil and administrative
proceedings, except insofar as that immunity has been expressly waived by the Director-General of the Institute or his
authorized representatives.

The SC upholds the constitutionality of the aforequoted law. There is in this case "a categorical recognition by the
Executive Branch of the Government that IRRI enjoys immunities accorded to international organizations, which
determination has been held to be a political question conclusive upon the Courts in order not to embarass a political
department of Government.
It is a recognized principle of international law and under our system of separation of powers that diplomatic immunity
is essentially a political question and courts should refuse to look beyond a determination by the executive branch of
the government, and where the plea of diplomatic immunity is recognized and affirmed by the executive branch of
the government as in the case at bar, it is then the duty of the courts to accept the claim of immunity upon appropriate
suggestion by the principal law officer of the government or other officer acting under his direction.

The raison d'etre for these immunities is the assurance of unimpeded performance of their functions by the agencies
concerned.

The grant of immunity to IRRI is clear and unequivocal and an express waiver by its Director-General is the only way
by which it may relinquish or abandon this immunity.

2
In cases involving dismissed employees, the Institute may waive its immunity, signifying that such waiver is
discretionary on its part.

Holy See vs Rosario

G.R. No. 101949
238 SCRA 524
<http://reeseisreal.blogspot.com/2012/11/holy-see-vs-rosario.html>
December 1, 1994

Petitioner: The Holy See

Respondent: Hon. Elidberto Rosario, Jr., in his capacity as Presiding Judge of
RTC Makati, Branch 61 and Starbright Sales Enterprises, Inc.

FACTS: Petition arose from a controversy over a parcel of land. Lot 5-A, registered under the name Holy See, was
contiguous to Lot 5-B and 5-D under the name of Philippine Realty Corporation (PRC). The land was donated by the
Archdiocese of Manila to the Papal Nuncio, which represents the Holy See, who exercises sovereignty over the Vatican
City, Rome, Italy, for his residence.

Said lots were sold through an agent to Ramon Licup who assigned his rights to respondents Starbright Sales
Enterprises, Inc.

When the squatters refuse to vacate the lots, a dispute arose between the two parties because both were unsure
whose responsibility was it to evict the squatters from said lots. Respondent Starbright Sales Enterprises Inc. insists
that Holy See should clear the property while Holy See says that respondent corporation should do it or the earnest
money will be returned. With this, Msgr. Cirilios, the agent, subsequently returned the P100,000 earnest money.

The same lots were then sold to Tropicana Properties and Development Corporation.

Starbright Sales Enterprises, Inc. filed a suit for annulment of the sale, specific performance and damages against Msgr.
Cirilios, PRC as well as Tropicana Properties and Development Corporation. The Holy See and Msgr. Cirilos moved to
dismiss the petition for lack of jurisdiction based on sovereign immunity from suit. RTC denied the motion on ground
that petitioner already "shed off" its sovereign immunity by entering into a business contract. The subsequent Motion
for Reconsideration was also denied hence this special civil action for certiorari was forwarded to the Supreme Court.

ISSUE:
Whether or not Holy See can invoke sovereign immunity.

HELD:
The Court held that Holy See may properly invoke sovereign immunity for its non-suability. As expressed in Sec. 2 Art
II of the 1987 Constitution, generally accepted principles of International Law are adopted by our Courts and thus shall
form part of the laws of the land as a condition and consequence of our admission in the society of nations.

It was noted in Article 31(A) of the 1961 Vienna Convention on Diplomatic Relations that diplomatic envoy shall be
granted immunity from civil and administrative jurisdiction of the receiving state over any real action relating to private
immovable property. The Department of Foreign Affairs (DFA) certified that the Embassy of the Holy See is a duly
accredited diplomatic missionary to the Republic of the Philippines and is thus exempted from local jurisdiction and
is entitled to the immunity rights of a diplomatic mission or embassy in this Court.

Furthermore, it shall be understood that in the case at bar, the petitioner has bought and sold lands in the ordinary
course of real estate business, surely, the said transaction can be categorized as an act jure gestionis. However,
petitioner has denied that the acquisition and subsequent disposal of the lot were made for profit but claimed that it
acquired said property for the site of its mission or the Apostolic Nunciature in the Philippines.

The Holy See is immune from suit because the act of selling the lot of concern is non-propriety in nature. The lot was
acquired through a donation from the Archdiocese of Manila, not for a commercial purpose, but for the use of
petitioner to construct the official place of residence of the Papal Nuncio thereof. The transfer of the property and its
3
subsequent disposal are likewise clothed with a governmental (non-proprietal) character as petitioner sold the lot not
for profit or gain rather because it merely cannot evict the squatters living in said property.

In view of the foregoing, the petition is hereby GRANTED and the complaints were dismissed accordingly.

REPUBLIC OF INDONESIA VS VINZON

G.R. No. 154705 405 SCRA 126 June 26, 2003
<http://casedigest.asialighttravel.com/republic-indonesia-vs-vinzon/>

THE REPUBLIC OF INDONESIA, HIS EXCELLENCY AMBASSADOR SOERATMIN, and MINISTER COUNSELLOR AZHARI
KASIM, petitioners,
vs. JAMES VINZON, doing business under the name and style of VINZON TRADE AND SERVICES, respondent.

Facts:
This is a petition for review of the decision made by Court of Appeals in ruling that the Republic of Indonesia gave its
consent to be sued and voluntarily submitted itself to the laws and jurisdiction of Philippine courts and that petitioners
Ambassador Soeratmin and Minister Counsellor Kasim waived their immunity from suit.

Petitioner, Republic of Indonesia, represented by its Counsellor, Siti Partinah, entered into a Maintenance Agreement
with respondent James Vinzon, sole proprietor of Vinzon Trade and Services. The equipment covered by the
Maintenance Agreement are air conditioning units and was to take effect in a period of four years.

When Indonesian Minister Counsellor Kasim assumed the position of Chief of Administration, he allegedly found
respondents work and services unsatisfactory and not in compliance with the standards set in the Maintenance
Agreement. Hence, the Indonesian Embassy terminated the agreement.

The respondent claims that the aforesaid termination was arbitrary and unlawful. Hence, he filed a complaint against
the petitioners which opposed by invoking immunity from suit.

Issues:

Whether or not the Republic of Indonesia can invoke the doctrine of sovereign immunity from suit.
Whether or not petitioners Ambassador Soeratmin and Minister Counsellor Kasim may be sued herein in their private
capacities.

Discussions:

The rule that a State may not be sued without its consent is a necessary consequence of the principles of independence
and equality of States. The practical justification for the doctrine of sovereign immunity is that there can be no legal
right against the authority that makes the law on which the right depends. In the case of foreign States, the rule is
derived from the principle of the sovereign equality of States, as expressed in the maxim par in parem non habet
imperium. All states are sovereign equals and cannot assert jurisdiction over one another.] A contrary attitude would
unduly vex the peace of nations.

The rules of International Law, however, are not unbending or immune to change. The increasing need of sovereign
States to enter into purely commercial activities remotely connected with the discharge of their governmental
functions brought about a new concept of sovereign immunity. This concept, the restrictive theory, holds that the
immunity of the sovereign is recognized only with regard to public acts or acts jure imperii (public acts of the
government of a state), but not with regard to private acts or acts jure gestionis (the commercial activities of a state.)

Rulings:

The Supreme Court ruled that the republic of Indonesia cannot be deemed to have waived its immunity to suit.
The mere entering into a contract by a foreign state with a private party cannot be construed as the ultimate test of
whether or not it is an act juri imperii or juri gestionis. Such act is only the start of the inquiry. There is no dispute that
the establishment of a diplomatic mission is an act juri imperii. The state may enter into contracts with private entities
to maintain the premises, furnishings and equipment of the embassy. The Republic of Indonesia is acting in pursuit of
a sovereign activity when it entered into a contract with the respondent. The maintenance agreement was entered
4
into by the Republic of Indonesia in the discharge of its governmental functions. It cannot be deemed to have waived
its immunity from suit.
Article 31 of the Vienna Convention on Diplomatic Relations provides that a diplomatic agent shall enjoy immunity
from the criminal jurisidiction of the receiving State. He shall also enjoy immunity from its civil and administrative
jurisdiction, except in the case of:
a real action relating to private immovable property situated in the territory of the receiving State, unless he holds
it on behalf of the sending State for the purposes of the mission;
an action relating to succession in which the diplomatic agent is involved as executor, administrator, heir or legatee
as a private person and not on behalf of the sending State;
an action relating to any professional or commercial activity exercised by the diplomatic agent in the receiving
State outside his official functions.
The Solicitor General believes that said act may fall under subparagraph (c) thereof, but said provision clearly applies
only to a situation where the diplomatic agent engages in any professional or commercial activity outside official
functions, which is not the case herein.

UNITED STATES OF AMERICA and MAXINE BRADFORD, petitioners,

vs.
HON. LUIS R. REYES, as Presiding Judge of Branch 22, Regional Trial Court of Cavite, and NELIA T.
MONTOYA, respondents.
< https://www.academia.edu/5876504/US_v_Reyes_GR_79253>

Petition for certiorari and prohibition under Rule 65 of the Rules of Court. Petitioners would have Us annul and set
aside, for having been issued with grave abuse of discretion amounting to lack of jurisdiction, the Resolution of 17
July 1987 of Branch 22 of the Regional Trial Court (RTC)
FACTS:
- Nelia Montoya, respondent, is an American citizen who, at the time material to this case, was employed as an
identification (I.D.) checker at the U.S. Navy Exchange (NEX) at the Joint United States Military Assistance Group
(JUSMAG) headquarters in Quezon City.
- Petitioner Maxine Bradford, hereinafter referred to as Bradford, is likewise an American citizen who was the
activity exchange manager at the said JUSMAG Headquarters.
- Respondents body and belongings were searched by Yong Kennedy, also an ID checker, upon the instruction
of the store manager, Ms. Maxine Bradford while she was already at the parking area in the presence of the
defendant and numerous curious onlookers;
- she was informed by the defendant that the search is to be made on all Jusmag employees that day; but
checking the records, its only she.
- Montoya formally protested the illegal search on February 14, 1987 in a letter addressed to Mr. R.L. Roynon;
but no action was undertaken by the said officer;

Process:
- Montoya filed complaint with RTC-Cavite for damages due to the oppressive and discriminatory acts
committed by the latter in excess of her authority as store manager
- Bradford filed two (2) motions for extension of time to file her Answer which were both granted by the trial
court, but instead of answering, she, together with USA, filed Motion to Dismiss on ff. grounds:
o (This) action is in effect a suit against the United States of America, a foreign sovereign immune from
suit without its consent for the cause of action pleaded in the complaint; and
o Bradford, as manager of the US Navy Exchange Branch at JUSMAG, Quezon City, is immune from suit
for act(s) done by her in the performance of her official functions under the Philippines-United States
Military Assistance Agreement of 1947 and Military Bases Agreement of 1947, as amended. Checking
of purchases at the NEX 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. 7Thus, Bradford's order to have purchases of all employees checked on 22 January 1987 was
made in the exercise of her duties as Manager of the NEX-JUSMAG.
- Montoya filed her opposition alleging:
o Bradford, in ordering the search upon her person and belongings outside the NEX JUSMAG store in
the presence of onlookers, had committed an improper, unlawful and highly discriminatory act against
a Filipino employee and had exceeded the scope of her authority
o having exceeded her authority, Bradford cannot rely on the sovereign immunity of the public petitioner
because her liability is personal

5
 o Philippine courts are vested with jurisdiction over the case because Bradford is a civilian employee who
had committed the challenged act outside the U.S. Military Bases; such act is not one of those
exempted from the jurisdiction of Philippine courts
o Philippine courts can inquire into the factual circumstances of the case to determine whether or not
Bradford had acted within or outside the scope of her authority.
- They exchanged replies until Bradford was declared in default for failure to answer, so Montoya presented her
evidence ex-parte. This default also showed admission of truth of allegation.

ISSUES:
Whether or not the trial court committed grave abuse of discretion in denying the motion to dismiss based on the
following grounds:
- the complaint in Civil Case No. 224-87 is in effect a suit against the public petitioner, a foreign sovereign
immune from suit which has not given consent to such suit and
- Bradford is immune from suit for acts done by her in the performance of her official functions as manager of
the U.S. Navy Exchange of JUSMAG pursuant to the Philippines-United States Military Assistance Agreement
of 1947 and the Military Bases Agreement of 1947, as amended.

HELD: Petition denied for lack of merit.

- Montoya has a sufficient and viable cause of action that Bradford acted not only outside the scope of her
authority or more specifically, in her private capacity but also outside the territory where she exercises
such authority, that is, outside the NEX-JUSMAG particularly, at the parking area which has not been shown
to form part of the facility of which she was the manager..
- the doctrine of immunity from suit will not apply and may not be invoked where the public official is being
sued in his private and personal capacity as an ordinary citizen. The cloak of protection afforded the officers
and agents of the government is removed the moment they are sued in their individual capacity. This situation
usually arises where the public official acts without authority or in excess of the powers vested in him. agents
and officials of the United States armed forces stationed in Clark Air Base are no exception to this rule.

EPG CONSTRUCTION VS VIGILAR

March 16, 2001
< https://www.scribd.com/document/62200230/Epg-Construction-vs-Vigilar>

FACTS:
(1983) The herein petitioners-contractors, under contracts with DPWH,constructed 145 housing units but
coverage of construction and funding under the said contracts was only for 2/3 of each housing unit. Through the
verbal request and assurance of then DPWH Undersecretary Canlas, they undertook additional
constructionsfor the completion of the project, but said additional constructions were not issued payment by DPWH.
With a favorable recommendation from the DPWH Asst. Secretary for Legal Affairs, the petitioners sent a demand
letter to the DPWH Secretary. The DPWH Auditor did not object to the payment subject to whatever action COA may
adopt.(1992) Through the request of then DPWH Secretary De Jesus, the DBM released the amount for payment but
(1996) respondent DPWH Secretary Vigilar denied the money claims prompting petitioners to file a petition for
mandamus before the RTC which said trial court denied. Hence, this petition.Among others, respondent-
secretary argues that the state may not be suedinvoking the constitutional doctrine of Non-suability of the State also
known as the Royal Prerogative of Dishonesty.

ISSUE:
Whether or not the Principle of State Immunity is applicable in the case at bar.

HELD:
The principle of state immunity finds no application in this case. Under the circumstances, respondent may not
validly invoke the Royal Prerogative of Dishonesty and hide under the states cloak of invincibility
against suit. Considering that this principle yields to certain settled exceptions. The rule is not absolute for it does not
say that the state may not be sued under any circumstance. The doctrine of governmental immunity from suit cannot
serve as an instrument for perpetrating an injustice on a citizen. It is just as important that there be fidelity to legal
norms on the part of officialdom if the rule of law is to be maintained. The ends of justice would be subverted if we
were to uphold, in this instance, the states immunity from suit. This court - as the staunch guardian of the citizens
rights and welfare- cannotsanction an injustice so patent on its face, and allow itself to be an instrument
of perpetration thereof. Justice and equity sternly demand that the states

6
cloak of invincibility against suit be shred in this particular instance and that petitioners-contractors be duly
compensated, on the basis of quantum meruit, for construction done on the public works housing project.
Petition GRANTED.

[2] EPG Construction Co. vs. Vigilar (Consti1)

Second Division
< http://diegestd16.blogspot.com/2012/06/epg-construction-co-vs-vigilar-consti1.html>

Buena, March 16, 2001

Topic: Sovereignty - Suits not against the State - Justice and Equity

Facts:
In 1983, the Ministry of Human Settlement (MHS), through the BLISS Development Corporation, intiated a housing
project on a government property along the east bank of Manggahan Floodway in Pasig
The MHS entered into a Memorandum of Agreement (MOA) with Ministry of Public Works and Highways (MPWH)
where the latter undertook to develop the housing site and construct thereon 145 housing units
By virtue of the MOA, MPWH forged individual contracts with petitioners EPG, Ciper, Septa, Phil. Plumbing, Home
Construction, World Builders, Glass World, Performance Builders, and De Leon Araneta Construction for the
construction of the housing units
Under the contracts, the scope of construction and funding covered only around "2/3 of each housing unit"
Petitioners agreed to undertake and perform "additional constructions" for the completion of the housing units
despite the fact that there was only a verbal promise, and not a written contract, by the MPWH Undersecretary Aber
Canlas that additional funds will be available and forthcoming
Unpaid balance for the additional constructions amounted to P5,918,315.63
Upon a demand letter from the petitioners, on November 14, 1988, DPWH Asst. Secretary Madamba opined that
payment of petitioners' money claims should be based on quantum meruit (what one has earned) and should be
forwarded to the Commission on Audit (COA)
In a Letter of the Undersecretary of Budget and Management dated December 20, 1994, the amount of P5,819,316.00
was then released for the payment of the petitioners' money claims under Advise of Allotment No. A4-1303-04-41-
303
In an indorsement dated December 27, 1995, the COA referred anew the money claims to the DPWH
In a letter dated August 26, 1996, respondent Secretary Gregorio Vigilar denied the subject money claims
Petitioners filed before the RTC of QC, Branch 226 a Petition for Mandamus to order the respondent to pay petitioners
their money claims plus damages and attorney's fees.
Lower court denied the petition on February 18, 1997

Issue:
Whether or not the implied, verbal contracts between the petitioners and then Undersecretary Canlas should be
upheld
Whether or not the State is immune from suit

Holding:
Yes.
No.

Ratio:
While the court agrees with the respondent that the implied contracts are void, in view of violation of applicable laws,
auditing rules, and lack of legal requirements, it still finds merit in the instant petition
The illegality of the implied contracts proceeds from an express declaration or prohibition by law, not from any intrinsic
illegality
"in the interest of substantial justice," petitioners-contractors' right to be compensated is upheld, applying the
principle of quantum meruit
Even the DPWH Asst. Sec. for Legal Affairs recommends their compensation; even the DPWH Auditor did not object
to the payment of the money claims
2. The respondent may not conveniently hide under the State's cloak of invincibility against suit, considering that this
principle yields to certain settled exceptions.
The State's immunity cannot serve as an instrument perpetrating injustice
Petition granted. RTC decision reversed and set aside.

7
 Dept. of Education, Albay vs. Onate
< https://www.scribd.com/doc/231362381/Consti1-Sovereignty-State-Immunity-Digest>

Facts:
Spouses Claro Onate and Gregoria Los Banos own the disputed lot Lot No. 6849 (27,907 sqm) registered under the
Torrens System of land registration with an Original Certificate of Title (OCT). This lot was already settled through a
Deed of Extrajudicial Settlement of Estate and Cession in 1991, in favor of respondent as his three sisters waived their
rights to the property. It turns out that the same land was where the Daraga North Central Elementary School was
built and had been operating since 1940, then named Bagumbayan Elementary School of Daraga. The Municipality of
Daraga gave that land to Dept. of Education, Culture and Sports (DECS), now Dept. of Education (DepEd) through a
Deed of Donation, confident that the municipality owned the land through buying it from Claro Onate, the
respondents grandfather, sometime in 1940. Respondent testified that he only knew of the dispute on1973, from
which he took possession of the lot the same year; that he knew only of the schools occupation on a portion of the
land on 1991 and knew of the Deed of Donation on 1992. The petitioner then claimed that respondent was guilty of
laches.

Issue:
Is the respondent guilty of laches? Will it be applied to him in this case? Is the State immune from this case? Can DECS
be sued independently from the State?

Ruling:
YES.
Laches is defined as the failure or neglect, or an unreasonable and unexplained length of time, to do that which could
or should have been done earlier. Elements of laches have set in: 1) disputed land has been used for public education
since 1940, 2) respondent failed to prove that him and his predecessors undertook steps to regain the use of their
land, to protest the building of the school as early as1940, 3) petitioner DECS did not anticipate that their occupancy
of the land would be later questioned, and 4)preliminary facts show grave prejudice to the petitioner DECS as they
have made major changes in construction and expansion of the school. The laches, however, apply only to disputed
Lot No. 6849-A. By virtue of laches, respondent Onate cannot claim Lot No. 6849-A anymore.

NO.
DECS can be sued as a result of being privy to the Deed of Donation executed by the Municipality of Daraga (as its
recipient) over disputed property. By giving its consent to the donation, it brings DECS down to level of ordinary
citizen.

YES. DECS can be sued independently from the State as it gave its authority to continue with the donation, which
carries withit the full responsibility of suing or being sued.
Therefore, DepEd (formerly DECS) now has the rights of possession and property over Lot No. 6849-A. Onarte cannot sell,
mortgage or encumber said Lot while still being used by DepEd. The lots rights will be returned to respondents the
moment DECS no longer needs it. DECS being non-suable has become moot.

REPUBLIC OF THE PHILIPPINES VS. SANDIGANBAYAN and ROBERTO BENEDICTO, 484 SCRA 119
< https://www.scribd.com/doc/58602155/Political-Law-Case-Digests>

FACTS:
The PCGG issued writs placing under sequestration all business enterprises, entities and other properties, real and
personal, owned or registered in the name of private respondent Benedicto, or of corporations in which he appeared
to have controlling or majority interest due to his involvement in cases of ill-gotten wealth. Among the properties thus
sequestered and taken over by PCGG fiscal agents were the 227 shares in NOGCCI owned by and registered under the
name of private respondent. As sequester of the 227 shares formerly owned by Benedicto, PCGG did not pay the
monthly membership fee. Later on, the shares were declared to be delinquent to be put into an auction sale. Despite
filing a writ of injunction, it was nevertheless dismissed. So petitioner Republic and private respondent Benedicto
entered into a Compromise Agreement which contains a general release clause where petitioner agreed and bound
itself to lift the sequestration on the 227 NOGCCI shares acknowledging that it was within private respondents capacity

8
to acquire the same shares out of his income from business and the exercise of his profession. Implied in this
undertaking is the recognition by petitioner that the subject shares of stock could not have been ill-gotten
Benedicto filed a Motion for Release from Sequestration and Return of Sequestered Shares/Dividends praying, inter
alia, that his NOGCCI shares of stock be specifically released from sequestration and returned, delivered or paid to
him as part of the parties Compromise Agreement in that case. It was granted but the shares were ordered to be put
under the custody of the Clerk of Court. Along with this, PCGG was ordered to deliver the shares to the Clerk of Court
which it failed to comply with without any justifiable grounds.
In a last-ditch attempt to escape liability, petitioner Republic, through the PCGG, invokes state immunity from suit.

ISSUE: WON the Republic can invoke state immunity.

HELD: NO.
In fact, by entering into a Compromise Agreement with private respondent Benedicto, petitioner Republic thereby
stripped itself of its immunity from suit and placed itself in the same level of its adversary. When the State enters into
contract, through its officers or agents, in furtherance of a legitimate aim and purpose and pursuant to constitutional
legislative authority, whereby mutual or reciprocal benefits accrue and rights and obligations arise therefrom, the State
may be sued even without its express consent, precisely because by entering into a contract the sovereign descends
to the level of the citizen. Its consent to be sued is implied from the very act of entering into such contract, breach of
which on its part gives the corresponding right to the other party to the agreement.

< https://lawphilreviewer.wordpress.com/2011/05/page/2/>

Garcia, J.:
When the State through the Presidential Commission on Good Government (PCGG) filed a complaint against a private
individual before the Sandiganbayan and thereafter, enters into a compromise agreement , it cannot later on invoke
immunity from suit.
Where the State itself is no less than the plaintiff in the main case, immunity from suit cannot be invoked because
when a state, through its duly authorized officers takes the initiative in a suit against a private party, it thereby descends
to the level of a private individual and thus opens itself to whatever counterclaims or defenses the latter may have
against it. When the State enters into contract, through its officers or agents, in furtherance of a legitimate aim or
purpose and pursuant to a constitutional legislative authority, whereby mutual and reciprocal benefits accrue and
rights and obligations arise therefrom, the State may be sued even without its express consent, precisely because by
entering into a contract the sovereign descends to the level of the citizen. Its consent to be sued is implied from the
very act of entering into such contract, breach of which on its part gives the corresponding right of the other party to
the agreement.

REPUBLIC OF THE PHILIPPINES vs. JUDGE VICENTE A. HIDALGO, Presiding Judge of the Regional Trial Court
of Manila, Branch 37
< https://www.scribd.com/doc/58602155/Political-Law-Case-Digests>

FACTS:
Tarcila Laperal Mendoza filed an action for the annulment or declaration of nullity of the title and deed of sale,
reconveyance and/or recovery of ownership and possession a property against the Republic of the Philippinesin the
RTC of Manila.
It is also known as the Arlegui Residence which housed two Philippine presidents and which now holds the Office of
the Press Secretary and the News Information Bureau.
The case was initially dismissed by the presiding Judge of the Manila RTC (Branch 35) on the ground of state immunity.
The case was re-raffled to the Manila RTC (Branch 37), with respondent Vicente A. Hidalgo as presiding Judge. In an
Order, Judge Hidalgo declared the Republic in default for failure of Solicitor Gabriel Francisco Ramirez, the handling
solicitor, to file the required Answer within the period prayed for in his motion for extension.
It is contended that the respondent Judge violated the Constitution and the fundamental rule that government funds
are exempt from execution or garnishment when he caused the issuance of the writ of execution against the Republic.

ISSUE: WON the Republic can invoke immunity from suit.

HELD:
It is settled that when the State gives its consent to be sued, it does not thereby necessarily consent to an unrestrained
execution against it. Tersely put, when the State waives its immunity, all it does, in effect, is to give the other party an
opportunity to prove, if it can, that the state has a liability.
The functions and public services rendered by the State cannot be allowed to paralyzed or disrupted by the diversion
of public funds from their legitimate and specific objects, as appropriated by law.
9
 NHA VS. HEIRS OF GUIVELONDO
< http://eulalaw4.blogspot.com/2013/07/case-digest-of-nha-vs-heirs-of.html>

Topic: Execution/Garnishment
NHA vs. Heirs of Guivelondo

Facts:
NHA filed with RTC of Cebu Branch 11 a complaint as amended regarding the eminent domain against Heirs of
Guivelondo docketed as civil case. The petitioner alleged that defendant heirs et. al were the rightful private owners
of the land which the petitioner intends to develop a socialized housing project. The respondent heirs filed a
manifestation of waiving their objections to petitioners power to expropriate their properties, thereafter trial court
declares plaintiff has a right to expropriate the properties of the defendant heirs and appointed 3 commissioners who
ascertain the just compensation of the said properties be fixed at 11, 200.00 php. per square meter. Petitioner NHA
filed 2 motion for reconsideration that assails inclusion of lots 12, 13 and 19 as well as the amount of just
compensation, however the respondents filed a motion for reconsideration of the trial courts partial judgment. But
the trial court issued an omnibus order to deny the motion of respondent granting the petitioners motion and of just
compensation. Petitioner filed with the Court of Appeals a petition for certiorari. Thereafter, heirs filed a motion for
execution since the trial court move for the entry of the partial judgment as modified by the omnibus order. The Court
of Appeals rendered dismissal of the petition for certiorari on the ground of partial judgment and omnibus order
became a final and executory when petitioner failed to appeal. The petitioner filed a motion for reconsideration but
then it was denied by the court. The courts of appeals serve on petitioner for a notice of levy pursuant to writ of
Execution and a Notice of third garnishment from the Land bank of the Philippines.

ISSUE:
1. Whether or not the state can be compelled and coerced by the courts to continue with its inherent power of
eminent domain.
2. Whether or not judgment has become final and executory and if estoppel or laches applies to government.
3. Whether or not writs of execution and garnishment may be issued against the state in an expropriation where
in the exercise of power of eminent domain will not serve public use or purpose
Ruling:
The state as represented by the NHA for housing project can continue its inherent power of eminent domain provided
that the just compensation for the property sought is taken. After the rendition of such order the plaintiff shouldnt
be permitted to dismiss or discontinue such proceedings except on such terms of the court be equitable.
The order was final after the non-appealing of the petitioner as the lawful right to expropriate the properties of
respondent heirs of Guivelondo.
Petitioner NHA are not exempt from garnishment or execution, although it is public in character since it is arbitrary
and capricious for a government entity to initiate expropriation proceedings that seize a private owners property.
Petition was DENIED and the trial courts decision denying petitioners motion to dismiss expropriation proceeding
was AFFIRMED. Its injunctive relief against the levy and garnishment of its funds and personal properties was also
DENIED. The temporary Restraining Order was LIFTED.

PHILIPPINE TOURISM AUTHORITY vs. PGDE 668 SCRA 406 G.R. No. 176628. March 19, 2012

DOCTRINE: The application of state immunity is proper only when the proceedings arise out of sovereign transactions
and not in cases of commercial activities or economic affairs.

FACTS: PTA, an agency of the Department of Tourism, whose main function is to bolster and promote tourism, entered
into a contract with Atlantic Erectors, Inc. (AEI) for the construction of the Intramuros Golf Course Expansion Projects
for a contract price of P57,954,647.94. The civil works of the project commenced. Since AEI was incapable of
constructing the golf course aspect of the project, it entered into a sub-contract agreement with PHILGOLF, a duly
organized domestic corporation, to build the golf course amounting to P27,000,000.00. The sub-contract agreement
also provides that PHILGOLF shall submit its progress billings directly to PTA and, in turn, PTA shall directly pay
PHILGOLF. PHILGOLF filed a collection suit against PTA amounting to P11,820,550.53, plus interest, for the construction
of the golf course. PTA, as a government entity, invokes its state immunity.

ISSUE: WON PTA can invoke state immunity.

10
 HELD: No. The application of state immunity is proper only when the proceedings arise out of sovereign transactions
and not in cases of commercial activities or economic affairs. The State, in entering into a business contract, descends
to the level of an individual and is deemed to have tacitly given its consent to be sued. Since the Intramuros Golf
Course Expansion Projects partakes of a proprietary character entered into between PTA and PHILGOLF, PTA cannot
avoid its financial liability by merely invoking immunity from suit.

REPUBLIC VS UNIMEX MICRO-ELECTRONICS

March 9, 2007
<scribd>

FACTS:
The Bureau of Customs (BOC) seized and forfeited the shipment owned by UNIMEX Micro-Electronics. When
the latter filed a petition for review in the Court of Tax Appeals (CTA), the forfeiture decree was reversed and the court
ordered the release of the goods. However, respondents counsel failed to secure a writ of execution to enforce the
CTA decision. When respondent asked for release of its shipment, BOC could no longer find subject shipment in its
warehouses. The CTA ordered the BOC to pay UNIMEX the commercial value of the goods with interest. The Republic
of the Philippines, represented by the BOC Commissioner, assailed the decision of the CTA in the SC. One of its
grounds was that the government funds cannot be charged with respondents claim without a corresponding
appropriation and cannot be decreed by mere judicial order.

ISSUE:
Can the government be held for actual damages?

HELD:
Although the satisfaction of respondents demand will ultimately fall on the government, and that under the
political doctrine of state immunity, it cannot be held liable for governmental acts (jus imperil), the court still holds
that petitioner cannot escape its liability. The circumstances of the case warrant its exclusion from the purview of the
state immunity doctrine. The court cannot turn a blind eye to BOCs ineptitude and gross negligence in the
safekeeping of respondents goods. The situation does not allow us to reject respondents claim on the mere
invocation of the doctrine of state immunity. The doctrine must be fairly observed and the State should not avail itself
of this prerogative to take undue advantage of parties that may have legitimate claims against it.
The SC, as the staunch guardian of the peoples rights and welfare, cannot sanction an injustice so patent in
its face, and allow itself to be an instrument in the perpetration thereof. Courts have recognized with almost pedantic
adherence that what is inconvenient and contrary to reason is not allowed in law. Justice and equity now demand
that the States cloak of invincibility against suit and liability be shredded.
Assailed decision of the CTA is AFFIRMED with MODIFICATION.

China National Machinery & Equipment Group (CNMEG) v. Santamaria

< https://www.academia.edu/9782448/DIGESTS>

Facts: On 14 September 2002, petitioner China National Machinery & Equipment Corp. (Group) (CNMEG), represented
by its chairperson, Ren Hongbin, entered into a Memorandum of Understanding with the North Luzon Railways
Corporation (Northrail), represented by its president, Jose L. Cortes, Jr. for the conduct of a feasibility study on a
possible railway line from Manila to San Fernando, La Union (the Northrail Project).
On 30 August 2003, the Export Import Bank of China (EXIM Bank) and the Department of Finance of the Philippines
(DOF) entered into a Memorandum of Understanding (Aug 30 MOU), wherein China agreed to extend Preferential
Buyers Credit to the Philippine government to finance the Northrail Project.3 The Chinese government designated
EXIM Bank as the lender, while the Philippine government named the DOF as the borrower. Under the Aug 30 MOU,
EXIM Bank agreed to extend an amount not exceeding USD 400,000,000 in favor of the DOF, payable in 20 years, with
a 5-year grace period, and at the rate of 3% per annum.
On 1 October 2003, the Chinese Ambassador to the Philippines, Wang Chungui (Amb. Wang), wrote a letter to DOF
Secretary Jose Isidro Camacho (Sec. Camacho) informing him of CNMEGs designation as the Prime Contractor for the
Northrail Project.

11
On 30 December 2003, Northrail and CNMEG executed a Contract Agreement for the construction of Section I, Phase
I of the North Luzon Railway System from Caloocan to Malolos on a turnkey basis (the Contract Agreement).7 The
contract price for the Northrail Project was pegged at USD 421,050,000.
On 26 February 2004, the Philippine government and EXIM Bank entered into a counterpart financial agreement
Buyer Credit Loan Agreement No. BLA 04055 (the Loan Agreement). In the Loan Agreement, EXIM Bank agreed to
extend Preferential Buyers Credit in the amount of USD 400,000,000 in favor of the Philippine government in order to
finance the construction of Phase I of the Northrail Project.
On 13 February 2006, respondents filed a Complaint for Annulment of Contract and Injunction with Urgent Motion for
Summary Hearing to Determine the Existence of Facts and Circumstances Justifying the Issuance of Writs of Preliminary
Prohibitory and Mandatory Injunction and/or TRO against CNMEG, the Office of the Executive Secretary, the DOF, the
Department of Budget and Management, the National Economic Development Authority and Northrail. The case was
filed before the Regional Trial Court, National Capital Judicial Region, Makati City, Branch 145 (RTC Br. 145). In the
Complaint, respondents alleged that the Contract Agreement and the Loan Agreement were void for being contrary
to (a) the Constitution; (b) Republic Act No. 9184 (R.A. No. 9184), otherwise known as the Government Procurement
Reform Act; (c) Presidential Decree No. 1445, otherwise known as the Government Auditing Code; and (d) Executive
Order No. 292, otherwise known as the Administrative Code.
On 15 May 2007, RTC Br. 145 issued an Omnibus Order denying CNMEGs Motion to Dismiss and setting the case for
summary hearing to determine whether the injunctive reliefs prayed for should be issued. CNMEG then filed a Motion
for Reconsideration, which was denied by the trial court in an Order dated 10 March 2008. Thus, CNMEG filed before
the CA a Petition for Certiorari with Prayer for the Issuance of TRO and/or Writ of Preliminary Injunction dated 4 April
2008.
the appellate court dismissed the Petition for Certiorari. Subsequently, CNMEG filed a Motion for Reconsideration,
which was denied by the CA in a Resolution dated 5 December 2008.
Petitioners Argument: Petitioner claims that the EXIM Bank extended financial assistance to Northrail because the bank
was mandated by the Chinese government, and not because of any motivation to do business in the Philippines, it is
clear from the foregoing provisions that the Northrail Project was a purely commercial transaction.
Respondents Argument: respondents alleged that the Contract Agreement and the Loan Agreement were void for
being contrary to (a) the Constitution; (b) Republic Act No. 9184 (R.A. No. 9184), otherwise known as the Government
Procurement Reform Act; (c) Presidential Decree No. 1445, otherwise known as the Government Auditing Code; and
(d) Executive Order No. 292, otherwise known as the Administrative Code.
Issues: Whether or not petitioner CNMEG is an agent of the sovereign Peoples Republic of China.
Whether or not the Northrail contracts are products of an executive agreement between two sovereign states.
Ruling: The instant Petition is DENIED. Petitioner China National Machinery & Equipment Corp. (Group) is not entitled
to immunity from suit, and the Contract Agreement is not an executive agreement. CNMEGs prayer for the issuance
of a TRO and/or Writ of Preliminary Injunction is DENIED for being moot and academic.
The Court explained the doctrine of sovereign immunity in Holy See v. Rosario, to wit:
There are two conflicting concepts of sovereign immunity, each widely held and firmly established. According to the
classical or absolute theory, a sovereign cannot, without its consent, be made a respondent in the courts of another
sovereign. According to the newer or restrictive theory, the immunity of the sovereign is recognized only with regard
to public acts or acts jure imperii of a state, but not with regard to private acts or acts jure gestionis. (Emphasis supplied;
citations omitted.)
As it stands now, the application of the doctrine of immunity from suit has been restricted to sovereign or
governmental activities (jure imperii). The mantle of state immunity cannot be extended to commercial, private and
proprietary acts (jure gestionis).
Since the Philippines adheres to the restrictive theory, it is crucial to ascertain the legal nature of the act involved
whether the entity claiming immunity performs governmental, as opposed to proprietary, functions. As held in United
States of America v. Ruiz
Admittedly, the Loan Agreement was entered into between EXIM Bank and the Philippine government, while the
Contract Agreement was between Northrail and CNMEG. Although the Contract Agreement is silent on the
classification of the legal nature of the transaction, the foregoing provisions of the Loan Agreement, which is an
inextricable part of the entire undertaking, nonetheless reveal the intention of the parties to the Northrail Project to
classify the whole venture as commercial or proprietary in character.
Thus, piecing together the content and tenor of the Contract Agreement, the Memorandum of Understanding dated
14 September 2002, Amb. Wangs letter dated 1 October 2003, and the Loan Agreement would reveal the desire of
CNMEG to construct the Luzon Railways in pursuit of a purely commercial activity performed in the ordinary course of
its business.

12