REPUBLIC OF THE PHILIPPINES

COURT OF APPEALS

Petitioners,

-versus- CA-G.R. SP No.

Respondents.
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MOTION FOR RECONSIDERATION

(of the 4 February 2016 Decision)

Petitioners
, Members of the Board

and General Manager

by counsel, respectfully move for the reconsideration of this Honorable
Court’s 4 February 2016 Decision, which Petitioners received on 17
February 2016. The said Decision dismissed the Petitioners’ Petition for
Certiorari on the ground that Branch Regional
Trial Court (RTC) committed no error in issuing the 11 June 2014 Order
granting the Motion for the Issuance of the Writ of Execution filed on 30
April 2014 by the Private Respondents and the 12 August 2014 Order
denying the Omnibus Motion for Reconsideration and for the Quashal of
Motion for Reconsideration Page 2 of 7
PCSO, et al. v. TMA, et al.
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the Writ of Execution filed by the Petitioners on 23 June 2014. In its

Decision, this Honorable Court found that the is bound under the
Contractual Joint Venture Agreement (CJVA) to procure all of its
specialized paper products for use in its gaming operations exclusively
from Private Respondents and that the garnishment of the funds
amounting to Php 82,000,000.00 is proper since the said government
agency was exercising proprietary functions when it entered into the
CJVA with ., now known as
). Petitioners base the present Motion for
Reconsideration on the following grounds:

The assailed orders of Branch

RTC
violates the Principle of
Consensuality of Contracts.

In its Decision, this Honorable Court ruled that Branch

RTC did not err in ordering to deliver specialized paper
products to and to accept and pay the value of the same to
A. Hence, the present case is similar to that of Luxuria Homes, Inc. v.
Court of Appeals 1 wherein the trial court ordered the defendants to, among
others, execute a management contract with the plaintiffs. In nullifying
the trial court’s order, the Supreme Court held that there was no such
agreement between the parties to enter into a management contract and
thus, the element of consent is lacking. Accordingly, the Supreme Court
held that the parties may not be compelled to enter into a contract
without violating the principle of consensuality of contracts. In its
discussion, the Supreme Court said:

xxx

It is fundamental that there can be no contract in the true sense in the

absence of the element of agreement, or of mutual assent of the parties. To
compel petitioner Posadas… to execute a management contract under the
terms and conditions of private respondents would be to violate the principle
of consensuality of contracts. In Philippine National Bank v. Court of Appeals, 2
we held that if the assent is wanting on the part of one who contracts, his act
has no more efficacy than if it had been done under duress or by a person of
unsound mind. In ordering petitioner Posadas to execute a management
contract with private respondents, the trial court in effect is putting her
under duress.

xxx

In this case, the 6 November 2013 Order of Branch

RTC compelled to deliver to a specific volume of
1 G.R. No. 125986, 28 January 1999.
2 G.R. No. 107569, 8 November 1994.
Motion for Reconsideration Page 3 of 7

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specialized paper products and at the same time, directed to accept

the same and to pay to the value thereof, purportedly in accordance
with their respective obligations under the CJVA. A careful examination
of the CJVA, however, reveals no stipulation that the shall procure
specialized paper products for use in its gaming operations directly from
Articles 6.2, 6.4, and 6.5 of the CJVA reads:

6.2 x x x The is required to keep separate from any extension of

current or future gaming or equipment supply contract the purchasing of
thermal paper and other specialized paper products and consumables as they
must be purchased from the JV. The is required to source any
and all of its consumables from the JV including any new gaming activity
it wishes to introduce. The parties agree that the profit-sharing will
commence on 2011 or earlier, once the sources its paper
requirements, as mentioned above, from the JV.

xxx

6.4 The , through the JV, commits to provide with all its
paper and other specialized paper products and consumables requirements,
as mentioned above, in accordance with specifications. shall
have the first priority in the production by the JV. In the event that the JV
fails to supply with its requirements in accordance with its require
specifications, the JV shall immediately replace the delivery. x x x

6.5 In the event that the JV is no longer capable of supplying the

requirements for a period of a maximum of fifteen (15) days, the JV
shall compensate the for any additional cost incurred in acquiring the
items from alternative suppliers. x x x [Emphases supplied.]

Clearly, the agreement between the parties was for to procure

its specialized paper requirements from the JV and not from itself.
Hence, in ordering to deliver a specific quantity of specialized paper
products to and to accept and pay the value thereof, Branch
RTC is, in effect, forcing the parties to enter into a
supply contract in the absence of any agreement between them.

In the case of Aurbach v. Sanitary Wares Manufacturing Corporation 3, the

Supreme Court declared that a JV is a form of partnership, citing text
from the commentaries of Prof. Jose C. Campos 4 quoted below:

The legal concept of joint venture is of common law origin. It has no

precise legal definition, but it has been generally understood to mean an
organization formed for some temporary purpose. x x x It is in fact hardly
distinguishable from the partnership, since their elements are similar–
community of interest in the business, sharing of profits and losses, and a
mutual right of control. x x x The main distinction cited by most opinions in
common law jurisdictions is that the partnership contemplates a general

3 G.R. Nos. 75875, 75951, and 75975-76; 15 December 1989.

4 Campos, Jose C., Jr. and Maria Clara Lopez-Campos. The Corporation Code: Comments, Notes
and Selected Cases. Manila: Community Publishing, 1981.
Motion for Reconsideration Page 4 of 7

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business with some degree of continuity, while the joint venture is formed
for the execution of a single transaction, and is thus of a temporary nature. x
x x This observation is not entirely accurate in this jurisdiction, since under
the Civil Code, a partnership may be particular or universal, and a particular
partnership may have for its object a specific undertaking. x x x It would
seem therefore that under Philippine law, a joint venture is a form of
partnership and should thus be governed by the law of partnerships.
The Supreme Court has however recognized a distinction between these two
business forms, and has held that although a corporation cannot enter into a
partnership contract, it may however engage in a joint venture with others. x
x x [Emphasis supplied.]

In connection with this, Article 1786 of the New Civil Code provides:

Article 1768. The partnership has a juridical personality separate and

distinct from that of each of the partners, even in case of failure to comply
with the requirements of article 1772, first paragraph. (n)

As thus, it is clear that the JV, as a form of partnership, is an entity

separate and distinct from As there is no agreement between
and that the latter shall procure its specialized paper requirements
from the former, Branch RTC gravely abused its
discretion in ordering the said parties to enter into a supply contract.

The government has not given

its consent for the execution of
the judgment rendered by
Branch
RTC.

In its Decision, this Honorable Court has ruled that the funds of
are proper objects of garnishment on the ground that it is an entity
vested under its charter with the general powers of a corporation,
including the power to sue and be sued. Nevertheless, distinction must be
made between the suability of the State and its liability.

In the case of University of the Philippines v. Dizon 5, the Supreme Court

reiterated the ruling in the case of Municipality of San Fernando, La Union v.
Firme6 quoted hereunder:

A distinction should first be made between suability and liability.

"Suability depends on the consent of the state to be sued, liability on the
applicable law and the established facts. The circumstance that a state is
suable does not necessarily mean that it is liable; on the other hand, it can
never be held liable if it does not first consent to be sued. Liability is not
conceded by the mere fact that the state has allowed itself to be sued. When

5 G.R. No. 171182, 23 August 2012.

6 G.R. No. L-52179, 8 April 1991.
Motion for Reconsideration Page 5 of 7

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the state does waive its sovereign immunity, it is only giving the plaintiff the
chance to prove, if it can, that the defendant is liable."

In the same case, the Supreme Court likewise echoed the ruling in the
case of Republic v. Villasor 7 cited below:

x x x The universal rule that where the State gives its consent to be sued
by private parties either by general or special law, it may limit claimant’s
action “only up to the completion of proceedings anterior to the stage of
execution” and that the power of the Courts ends when the judgment is
rendered, since government funds and property may not be seized under
writs of execution or garnishment to satisfy such judgments, is based on
obvious considerations of public policy. Disbursements of public funds must
be covered by the corresponding appropriation as required by law. The
functions and public services rendered by the State cannot be allowed to be
paralyzed or disrupted by the diversion of public funds from their legitimate
and specific objects, as appropriated by law.

Clearly, therefore, the mere fact that the State has given its consent
does not necessarily mean that it has likewise given its consent for the
execution of any adverse judgment against it. Thus, it was an error for
Branch RTC to order the garnishment of
funds in the absence of a waiver by the State of its immunity from
execution.

In any case, the proper remedy for private respondents is not

execution, but the filing of a claim before the Commission on Audit
(COA), as held by the Supreme Court in a long line of jurisprudence 8, and
emphasized in Administrative Circular No. 10-2000.

For the above reasons, Petitioners maintain that their arguments in

support of their Petition for Certiorari deserve a second hard look by this
Honorable Court.

ACCORDINGLY, Petitioners respectfully ask this Honorable Court

that its 4 February 2016 Decision be RECONSIDERED and a new one
be issued GRANTING Petitioners’ Petition for Certiorari.

Other equitable reliefs are likewise asked for.

Quezon City for Makati City, 29 February 2016.

7 G.R. No. L-30671, 28 November 1973.

8 National Electrification Administration v. Morales, G.R. No. 154200, 24 July 2007; Lockheed
Detective and Watchman Agency, Inc. v.University of the Philippines, G.R. No. 185918, 18 April
2012; University of the Philippines v. Dizon, Supra, Note 4.
Motion for Reconsideration Page 6 of 7

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Counsel for the Petitioners

IBP Lifetime Member Roll No.

Roll of Attorneys No.
MCLE Exemption No.

IBP O.R. No.

Roll of Attorneys No.
MCLE Exemption No.

IBP Lifetime Member Roll No.

Roll of Attorneys No.
MCLE Exemption No.

IBP O.R. No.

Roll of Attorneys No.
MCLE Compliance in Process
Motion for Reconsideration Page 7 of 7

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IBP Lifetime Member Roll No.

Roll of Attorneys No.
MCLE Exemption No.

Copy furnished:9

REGIONAL TRIAL COURT

Branch

9 Due to constraints in distance, time, and manpower, copies of this Motion for
Reconsideration shall be served on the adverse parties by registered mail with return card.