immunity from suit

7/25/2019 Immunity From Suit

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Republic of the Philippines

SUPREME COURTManila

EN BANC

G.R. No. 185572 February 7, 2012

CHNA NATONA! MACHNER" # E$UPMENT CORP. %GROUP&,Petitioner,vs.

HON. CESAR '. SANTAMARA, () *(+ o-(a -a/a-(y a+ Pre+(() 3ue o4 Bra)-* 15, Re(o)aTr(a Cour o4 Ma6a( C(y, HERMNO HARR" !. RO$UE, 3R., 3OE! R. BUTU"AN, ROGER R. RA"E!,ROME! R. BAGARES, CHRSTOPHER FRANCSCO C. BO!ASTG, !EAGUE OF URBAN POOR FORACTON %!UPA&, !USAN NG MARA!TA SA ME"CAUA"AN %MM!UPA CHAPTER&, 'AN!O M.CA!'ERON, 9CENTE C. A!BAN, MER!"N M. 9AA!, !O!TA S. $UNONES, RCAR'O '. !ANO:O,

3R., CONCHTA G. GO:O, MA. TERESA '. :EPE'A, 3OSEFNA A. !ANO:O, a) SERGO C. !EGASP,3R., A!PUNAN NG 'AMA"ANG MAHHRAP %A'AMA"&, E'" C!ERGO, RAMM! 'NGA!,NE!SON B. TERRA'O, CARMEN 'EUN'A, a) E'UAR'O !EGSON,Respondents.

D E C I S I O N

SERENO,J.:

This is a Petition for Revie on Certiorari ith Pra!er for the Issuance of a Te"porar! Restrainin# Order

$TRO% and&or Preli"inar! In'unction assailin# the () Septe"ber *))+ Decision and Dece"ber *))+

Resolution of the Court of -ppeals $C-% in C-/.R. SP No. 0)((0. 0

On 01 Septe"ber *))*, petitioner China National Machiner! 2 E3uip"ent Corp. $/roup% $CNME/%,

represented b! its chairperson, Ren 4on#bin, entered into a Me"orandu" of 5nderstandin# ith the North

6u7on Raila!s Corporation $Northrail%, represented b! its president, 8ose 6. Cortes, 8r. for the conduct of a

feasibilit! stud! on a possible raila! line fro" Manila to San 9ernando, 6a 5nion $the Northrail Pro'ect%. *

On () -u#ust *))(, the E:port I"port ;an< of China $E=IM ;ans Credit in the a"ount of 5SD 1)),))),))) in favor of the

Philippine #overn"ent in order to ?nance the construction of Phase I of the Northrail Pro'ect.0)
http://www.lawphil.net/judjuris/juri2012/feb2012/gr_185572_2012.html#fnt1http://www.lawphil.net/judjuris/juri2012/feb2012/gr_185572_2012.html#fnt2http://www.lawphil.net/judjuris/juri2012/feb2012/gr_185572_2012.html#fnt3http://www.lawphil.net/judjuris/juri2012/feb2012/gr_185572_2012.html#fnt3http://www.lawphil.net/judjuris/juri2012/feb2012/gr_185572_2012.html#fnt4http://www.lawphil.net/judjuris/juri2012/feb2012/gr_185572_2012.html#fnt5http://www.lawphil.net/judjuris/juri2012/feb2012/gr_185572_2012.html#fnt6http://www.lawphil.net/judjuris/juri2012/feb2012/gr_185572_2012.html#fnt7http://www.lawphil.net/judjuris/juri2012/feb2012/gr_185572_2012.html#fnt8http://www.lawphil.net/judjuris/juri2012/feb2012/gr_185572_2012.html#fnt9http://www.lawphil.net/judjuris/juri2012/feb2012/gr_185572_2012.html#fnt9http://www.lawphil.net/judjuris/juri2012/feb2012/gr_185572_2012.html#fnt10http://www.lawphil.net/judjuris/juri2012/feb2012/gr_185572_2012.html#fnt2http://www.lawphil.net/judjuris/juri2012/feb2012/gr_185572_2012.html#fnt3http://www.lawphil.net/judjuris/juri2012/feb2012/gr_185572_2012.html#fnt4http://www.lawphil.net/judjuris/juri2012/feb2012/gr_185572_2012.html#fnt5http://www.lawphil.net/judjuris/juri2012/feb2012/gr_185572_2012.html#fnt6http://www.lawphil.net/judjuris/juri2012/feb2012/gr_185572_2012.html#fnt7http://www.lawphil.net/judjuris/juri2012/feb2012/gr_185572_2012.html#fnt8http://www.lawphil.net/judjuris/juri2012/feb2012/gr_185572_2012.html#fnt9http://www.lawphil.net/judjuris/juri2012/feb2012/gr_185572_2012.html#fnt10http://www.lawphil.net/judjuris/juri2012/feb2012/gr_185572_2012.html#fnt1


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On 0( 9ebruar! *)), respondents ?led a Co"plaint for -nnul"ent of Contract and In'unction ith 5r#ent

Motion for Su""ar! 4earin# to Deter"ine the E:istence of 9acts and Circu"stances 8ustif!in# the

Issuance of Brits of Preli"inar! Prohibitor! and Mandator! In'unction and&or TRO a#ainst CNME/, the

OFce of the E:ecutive Secretar!, the DO9, the Depart"ent of ;ud#et and Mana#e"ent, the National

Econo"ic Develop"ent -uthorit! and Northrail.00The case as docs Republic of China.

Bhether or not the Northrail contracts are products of an e:ecutive a#ree"ent beteen to soverei#n

states.

Bhether or not the certi?cation fro" the Depart"ent of 9orei#n -airs is necessar! under the fore#oin#

circu"stances.

Bhether or not the act bein# underta


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*. Bhether the Contract -#ree"ent is an e:ecutive a#ree"ent, such that it cannot be 3uestioned

b! or before a local court.

F(r+ (++ue;


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B4ERE-S the E"plo!er $Northrail% desired to construct the raila!s for" Caloocan to Malolos, section I,

Phase I of Philippine North 6u7on Raila!s Pro'ect $hereinafter referred to as T4E PRO8ECT%G

-ND B4ERE-S the Contractor has oered to provide the Pro'ect on Turns personnelG

-ND B4ERE-S the 6oan -#ree"ent of the Preferential ;u!er>s Credit beteen E:port@I"port ;an< of

China and Depart"ent of 9inance of Republic of the PhilippinesG

NOB, T4ERE9ORE, the parties a#ree to si#n this Contract for the I"ple"entation of the Pro'ect.

The above@cited portion of the Contract -#ree"ent, hoever, does not on its on reveal hether the

construction of the 6u7on raila!s as "eant to be a proprietar! endeavor. In order to full! understand the

intention behind and the purpose of the entire underta%G

B4ERE-S, the NORT4R-I6 CORP. elco"es CNME/>s proposal to underta


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si#nin# the Contract ithin one hundred tent! $0*)% da!s fro" CNME/>s presentation of the

Stud!.(($E"phasis supplied%

Clearl!, it as CNME/ that initiated the underta


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of a "ilitar! character and under control of a "ilitar! authorit! or defense a#enc! and $iii% located in the

Philippines and dedicated to public or #overn"ental use $as distin#uished fro" patri"onial assets or

assets dedicated to co""ercial use%. $E"phasis supplied.%

$s Republic of China as the #overnin# la hereof ill be

reco#ni7ed and such la ill be applied. The aiver of i""unit! b! the ;orroer, the irrevocable

sub"issions of the ;orroer to the non@e:clusive 'urisdiction of the courts of the People>s Republic of China

and the appoint"ent of the ;orroer>s Chinese Process -#ent is le#al, valid, bindin# and enforceable andan! 'ud#"ent obtained in the People>s Republic of China ill be if introduced, evidence for enforce"ent in

an! proceedin#s a#ainst the ;orroer and its assets in the Republic of the Philippines provided that $a% the

court renderin# 'ud#"ent had 'urisdiction over the sub'ect "atter of the action in accordance ith its

'urisdictional rules, $b% the Republic had notice of the proceedin#s, $c% the 'ud#"ent of the court as not

obtained throu#h collusion or fraud, and $d% such 'ud#"ent as not based on a clear "istas clai" that the E=IM ;an< e:tended ?nancial assistance to Northrail because the

ban< as "andated b! the Chinese #overn"ent, and not because of an! "otivation to do business in the

Philippines,(+it is clear fro" the fore#oin# provisions that the Northrail Pro'ect as a purel! co""ercialtransaction.

-d"ittedl!, the 6oan -#ree"ent as entered into beteen E=IM ;an< and the Philippine #overn"ent,

hile the Contract -#ree"ent as beteen Northrail and CNME/. -lthou#h the Contract -#ree"ent is

silent on the classi?cation of the le#al nature of the transaction, the fore#oin# provisions of the 6oan

-#ree"ent, hich is an ine:tricable part of the entire underta


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In this re#ard, this Court>s rulin# in Deutsche /esellschaft 9r Technische Qusa""enarbeit $/TQ% v.

C-1)"ust be e:a"ined. In Deutsche /esellschaft, /er"an! and the Philippines entered into a Technical

Cooperation -#ree"ent, pursuant to hich both si#ned an arran#e"ent pro"otin# the Social 4ealth

InsuranceNetor


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It is useful to note that on the part of the Philippine #overn"ent, it had desi#nated to entities, the

Depart"ent of 4ealth and the Philippine 4ealth Insurance Corporation $P4IC%, as the i"ple"entin#

a#encies in behalf of the Philippines. The P4IC as established under Republic -ct No. +, Section 0 $#%

of hich #rants the corporation the poer to sue and be sued in court. -ppl!in# the previousl! cited

'urisprudence, P4IC ould not en'o! i""unit! fro" suit even in the perfor"ance of its functions connected

ith S4INE, hoever, $sic% #overn"ental in nature as $sic% the! "a! be.

+ GT: a) ()-or/orae ae)-y o4 *e Ger=a) o>er)=e)D T*ere (+ +o=e =y+ery +urrou)()

*a ue+(o). Ne(*er GT: )or *e OSG o beyo) *e -a(= *a /e((o)er (+ *e(=/e=e)() ae)-y o4 *e Go>er)=e) o4 *e Feera Re/ub(- o4 Ger=a)y.On the otherhand, private respondents asserted before the 6abor -rbiter that /TQ as a private corporation en#a#ed

in the i"ple"entation of develop"ent pro'ects. The 6abor -rbiter accepted that clai" in his Order

den!in# the Motion to Dis"iss, thou#h he as silent on that point in his Decision. Nevertheless, private

respondents ar#ue in their Co""ent that the ?ndin# that /TQ as a private corporation as never

controverted, and is therefore dee"ed ad"itted. In its Repl!, /TQ controverts that ?ndin#, sa!in# that it

is a "atter of public (e)-e e)() (+ ea )aure beyo) *a o4 *e baree+-r(/(>e (=/e=e)() ae)-y. T*ere (+ )o oub *a *e 11 Aree=e) e+()aeGT: a+ *e (=/e=e)() ae)-y () be*a4 o4 *e Ger=a) o>er)=e). "e *e -a-* (+ *a+u-* er= *a+ )o /re-(+e e)((o) *a (+ re+/o)+(>e o our -o)-er)+. )*ere)y, a) ae)a-+ () be*a4 o4 a /r()-(/a, a) *e GT: -a) be +a( o a- () be*a4 o4 *e Ger=a) +ae. Bu*a (+ a+ 4ar a+ (=/e=e)() ae)-y -ou a6e u+. T*e er= by (+e4 oe+ )o +u//y?*e*er GT: (+ ()-or/orae or u)()-or/orae, ?*e*er ( (+ o?)e by *e Ger=a) +ae or by/r(>ae ()ere++, ?*e*er ( *a+ ur((-a /er+o)a(y ()e/e)e) o4 *e Ger=a) o>er)=e)or )o)e a a.

: : : : : : : : :

Aa(), ?e are u)-era() o4 *e -orre+/o)() ea (=/(-a(o)+ u)er Ger=a) a? +urrou)()a /r(>ae -o=/a)y o?)e by *e Feera Re/ub(- o4 Ger=a)y. "e a6() *e e+-r(/(o) o)4a-e >aue, *e a//are) eu(>ae) u)er P*((//()e a? (+ *a o4 a -or/ora(o) ora)(@eu)er *e Cor/ora(o) Coe bu o?)e by *e P*((//()e o>er)=e), or a o>er)=e)o?)eor -o)roe -or/ora(o) ?(*ou or(()a -*arer. A) ( bear+ )o(-e *a Se-(o) I o4 *eCor/orae Coe +ae+ *a JeK>ery -or/ora(o) ()-or/orae u)er *(+ Coe *a+ *e /o?era) -a/a-(y o +ue a) be +ue () (+ -or/orae )a=e.

It is entirel! possible that under /er"an la, an entit! such as /TQ or particularl! /TQ itself has not been

vested or has been speci?call! deprived the poer and capacit! to sue and&or be sued. et in the

proceedin#s belo and before this Court, GT: *a+ 4a(e o e+ab(+* *a u)er Ger=a) a?, ( *a+)o -o)+e)e o be +ue e+/(e ( be() o?)e by *e Feera Re/ub(- o4 Ger=a)y. (e)-e o *e -o)rary, 4ore() a?+ o) a /ar(-uar+ube- are /re+u=e o be *e +a=e a+ *o+e o4 *e P*((//()e+, a) 4oo?() *e =o+()e(e) a++u=/(o) ?e -a) a*er, GT: (+ a6() o a o>er)=e)a o?)e or -o)roe-or/ora(o) ?(*ou or(()a -*arer ?*(-*, by >(rue o4 *e Cor/ora(o) Coe, *a+ e/re++y-o)+e)e o be +ue.-t the ver! least, li


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e+()a(o) a+ *e Pr(=ary Co)ra-or oe+ )o auo=a(-ay ra) ( (==u)(y, u+ a+ *eer= (=/e=e)() ae)-y *a+ )o /re-(+e e)((o) 4or /ur/o+e+ o4 a+-era()() ?*e*erGT: ?a+ (==u)e 4ro= +u(. A*ou* CNMEG -a(=+ o be a o>er)=e)o?)e -or/ora(o), (4a(e o au-e e>(e)-e *a ( *a+ )o -o)+e)e o be +ue u)er C*()e+e a?. T*u+,4oo?() *(+ CourL+ ru() () 'eu+-*e Ge+e+-*a4, () *e ab+e)-e o4 e>(e)-e o *e-o)rary, CNMEG (+ o be /re+u=e o be a o>er)=e)o?)e a) -o)roe -or/ora(o)?(*ou a) or(()a -*arer. A+ a re+u, ( *a+ *e -a/a-(y o +ue a) be +ue u)er Se-(o)I o4 *e Cor/ora(o) Coe.

C. CNME/ failed to present a certi?cation fro" the Depart"ent of 9orei#n -airs.

In 4ol! See,1*this Court reiterated the oft@cited doctrine that the deter"ination b! the E:ecutive that an

entit! is entitled to soverei#n or diplo"atic i""unit! is a political 3uestion conclusive upon the courts, to

itH

In Public International 6a, hen a state or international a#enc! ishes to plead soverei#n or diplo"atic

i""unit! in a forei#n court, it re3uests the 9orei#n OFce of the state here it is sued to conve! to the

court that said defendant is entitled to i""unit!.

: : : : : : : : :

In the Philippines, the practice is for the forei#n #overn"ent or the international or#ani7ation to ?rst secure

an e:ecutive endorse"ent of its clai" of soverei#n or diplo"atic i""unit!. ;ut ho the Philippine 9orei#n

OFce conve!s its endorse"ent to the courts varies. In International Catholic Migration Commission v.

Calleja, 0) SCR- 0() $0)%, the Secretar! of 9orei#n -airs 'ust sent a letter directl! to the Secretar! of

6abor and E"plo!"ent, infor"in# the latter that the respondent@e"plo!er could not be sued because it

en'o!ed diplo"atic i""unit!. In World Health Organization v. !uino, 1+ SCR- *1* $0*%, the Secretar! of

9orei#n -airs sent the trial court a tele#ra" to that eect. In "aer v. #izon, SCR- 0 $01%, the 5.S.

E"bass! as

in3uire into the facts and "ae Bra)-* -a) =a6e a eer=()a(o) o4(==u)(y 4ro= +u(, ?*(-* =ay be -o)+(ere a+ -o)-u+(>e u/o) *e -our+.This Court, inDepart"ent of 9orei#n -airs $D9-% v. National 6abor Relations Co""ission $N6RC%, 11e"phasi7ed the

D9->s co"petence and authorit! to provide such necessar! deter"ination, to itH

The D9->s function includes, a"on# its other "andates, the deter"ination of persons and institutions

covered b! diplo"atic i""unities, a deter"ination hich, hen challen#e, $sic% entitles it to see< relief

fro" the court so as not to seriousl! i"pair the conduct of the countr!s forei#n relations. The D9- "ust be

alloed to plead its case henever necessar! or advisable to enable it to help


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Philippine #overn"ent before the international co""unit!. Bhen international a#ree"ents are concluded,

the parties thereto are dee"ed to have li diplo"atic status and

entitle"ent to diplo"atic privile#es includin# i""unit! fro" suits. The re3uire"ent "i#ht not necessaril!

be i"perative. 4oever, had /TQ obtained such certi?cation fro" the D9-, it ould have provided factual

basis for its clai" of i""unit! that ould, at the ver! least, establish a disputable evidentiar! presu"ption

that the forei#n part! is indeed i""une hich the opposin# part! ill have to overco"e ith its on

factual evidence. Be do not see h! /TQ could not have secured such certi?cation or endorse"ent fro"

the D9- for purposes of this case. Certainl!, it ould have been hi#hl! prudential for /TQ to obtain the

sa"e after the 6abor -rbiter had denied the "otion to dis"iss. Still, even at this 'uncture, e do not see

an! evidence that the D9-, the oFce of the e:ecutive branch in char#e of our diplo"atic relations, has

indeed endorsed /TQ>s clai" of i""unit!. It "a! be possible that /TQ tried, but failed to secure such

certi?cation, due to the sa"e concerns that e have discussed herein.

Bould the fact that the Solicitor /eneral has endorsed /TQ>s clai" of State>s i""unit! fro" suit before

this Court suFcientl! substitute for the D9- certi?cation Note that the rule in public international la

3uoted in 4ol! See referred to endorse"ent b! the 9orei#n OFce of the State here the suit is ?led, such

forei#n oFce in the Philippines bein# the Depart"ent of 9orei#n -airs. Nohere in the Co""ent of the

OS/ is it "anifested that the D9- has endorsed /TQ>s clai", or that the OS/ had solicited the D9->s vies

on the issue. The ar#u"ents raised b! the OS/ are virtuall! the sa"e as the ar#u"ents raised b! /TQ

ithout an! indication of an! special and distinct perspective "aintained b! the Philippine #overn"ent on

the issue. The Co""ent ?led b! the OS/ does not inspire the sa"e de#ree of con?dence as a certi?cation

fro" the D9- ould have elicited.1$E"phasis supplied.%

In the case at bar, CNME/ oers the Certi?cation e:ecuted b! the Econo"ic and Co""ercial OFce of the

E"bass! of the People>s Republic of China, statin# that the Northrail Pro'ect is in pursuit of a soverei#n

activit!.1Surel!, this is not the s entitle"ent to i""unit!

fro" suit, as 4ol! See une3uivocall! refers to the deter"ination of the 9orei#n OFce of the state here it

is sued.

9urther, CNME/ also clai"s that its i""unit! fro" suit has the e:ecutive endorse"ent of both the OS/

and the OFce of the /overn"ent Corporate Counsel $O/CC%, hich "ust be respected b! the courts.

4oever, as e:pressl! enunciated in Deutsche /esellschaft, this deter"ination b! the OS/, or b! the

O/CC for that "atter, does not inspire the sa"e de#ree of con?dence as a D9- certi?cation. Even ith a

D9- certi?cation, hoever, it "ust be re"e"bered that this Court is not precluded fro" "a


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The Conditions of Contract,1+hich is an inte#ral part of the Contract -#ree"ent, 1statesH

((. SETT6EMENT O9 DISP5TES -ND -R;ITR-TION

((.0. -"icable Settle"ent

;oth parties shall atte"pt to a"icabl! settle all disputes or controversies arisin# fro" this Contract before

the co""ence"ent of arbitration.

((.*. -rbitration

-ll disputes or controversies arisin# fro" this Contract hich cannot be settled beteen the E"plo!er and

the Contractor shall be sub"itted to arbitration in accordance ith the 5NCITR-6 -rbitration Rules at

present in force and as "a! be a"ended b! the rest of this Clause. The appointin# authorit! shall be 4on#

Uon# International -rbitration Center. The place of arbitration shall be in 4on# Uon# at 4on# Uon#

International -rbitration Center $4UI-C%.

5nder the above provisions, if an! dispute arises beteen Northrail and CNME/, both parties are bound to

sub"it the "atter to the 4UI-C for arbitration. In case the 4UI-C "a


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corporation, hile CNME/ is a corporation dul! or#ani7ed and created under the las of the People>s

Republic of China.*Thus, both Northrail and CNME/ entered into the Contract -#ree"ent as entities ith

personalities distinct and separate fro" the Philippine and Chinese #overn"ents, respectivel!.

Neither can it be said that CNME/ acted as a#ent of the Chinese #overn"ent. -s previousl! discussed, the

fact that -"b. Ban#, in his letter dated 0 October *))(,(described CNME/ as a state corporation and

declared its desi#nation as the Pri"ar! Contractor in the Northrail Pro'ect did not "ean it as to perfor"

soverei#n functions on behalf of China. That label as onl! descriptive of its nature as a state@oned

corporation, and did not preclude it fro" en#a#in# in purel! co""ercial or proprietar! ventures.

". #he Contract greement is to 'e governed 'y (hilippine la).

-rticle * of the Conditions of Contract,1hich under -rticle 0.0 of the Contract -#ree"ent is an inte#ral

part of the latter, statesH

-PP6IC-;6E 6-B -ND /OERNIN/ 6-N/5-/E

The contract shall in all respects be read and construed in accordance ith the las of the Philippines.

The contract shall be ritten in En#lish lan#ua#e. -ll correspondence and other docu"ents pertainin# to

the Contract hich are e:chan#ed b! the parties shall be ritten in En#lish lan#ua#e.

Since the Contract -#ree"ent e:plicitl! provides that Philippine la shall be applicable, the parties have

eectivel! conceded that their ri#hts and obli#ations thereunder are not #overned b! international la.

It is therefore clear fro" the fore#oin# reasons that the Contract -#ree"ent does not parta


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Republic of the Philippines

SUPREME COURTManila

9IRST DIISION

G.R. No. !I0 3u)e 10, 188

'A!E SAN'ERS, AN' A.S. MOREAU, 3R,petitioners,vs.

HON. REGNO T. 9ER'ANO , a+ Pre+(() 3ue, Bra)-* , Cour o4 F(r+ )+a)-e o4:a=bae+, Oo)a/o C(y, ANTHON" M. ROSS a) RA!PH !.


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On the basis of these antecedent facts, the private respondent ?led in the Court of 9irst Instance of

Olon#apo Cit! a for da"a#es a#ainst the herein petitioners on Nove"ber +, 0. 8The plaintis clai"ed

that the letters contained libelous i"putations that had e:posed the" to ridicule and caused the" "ental

an#uish and that the pre'ud#"ent of the #rievance proceedin#s as an invasion of their personal and

proprietar! ri#hts.

The private respondents "ade it clear that the petitioners ere bein# sued in their private or personal

capacit!. 4oever, in a "otion to dis"iss ?led under a special appearance, the petitioners ar#ued that the

acts co"plained of ere perfor"ed b! the" in the dischar#e of their oFcial duties and that, conse3uentl!,the court had no 'urisdiction over the" under the doctrine of state i""unit!.

-fter e:tensive ritten ar#u"ents beteen the parties, the "otion as denied in an order dated March +,

0, on the "ain #round that the petitioners had not presented an! evidence that their acts ere oFcial

in nature and not personal torts, "oreover, the alle#ation in the co"plaint as that the defendants had

acted "aliciousl! and in bad faith. The sa"e order issued a rit of preli"inar! attach"ent, conditioned

upon the ?lin# of a P0),))).)) bond b! the plaintis, a#ainst the properties of petitioner Moreau, ho

alle#edl! as then about to leave the Philippines. Subse3uentl!, to "a


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-ll this is not to sa! that in no case "a! a public oFcer be sued as such ithout the previous consent of

the state. To be sure, there are a nu"ber of ell@reco#ni7ed e:ceptions. It is clear that a public oFcer "a!

be sued as such to co"pel hi" to do an act re3uired b! la, as here, sa!, a re#ister of deeds refuses to

record a deed of saleG 18or to restrain a Cabinet "e"ber, for e:a"ple, fro" enforcin# a la clai"ed to be

unconstitutionalG 1or to co"pel the national treasurer to pa! da"a#es fro" an alread! appropriatedassurance fundG 20or the co""issioner of internal revenue to refund ta: over@pa!"ents fro" a fund

alread! available for the purposeG 21or, in #eneral, to secure a 'ud#"ent that the oFcer i"pleaded "a!

satisf! b! hi"self ithout the #overn"ent itself havin# to do a positive act to assist hi". Be have also

held that here the #overn"ent itself has violated its on las, the a##rieved part! "a! directl! i"pleadthe #overn"ent even ithout ?rst ?lin# his clai" ith the Co""ission on -udit as nor"all! re3uired, as

the doctrine of state i""unit! cannot be used as an instru"ent for perpetratin# an in'ustice. 22

This case "ust also be distin#uished fro" such decisions as -estejo v. -ernando, 2here the Court heldthat a bureau director could be sued for da"a#es on a personal tort co""itted b! hi" hen he acted

ithout or in e:cess of authorit! in forcibl! ta


17/44

The private respondents "ust, if the! are still so"inded, pursue their clai" a#ainst the petitioners in

accordance ith the las of the 5nited States, of hich the! are all citi7ens and under hose 'urisdiction

the alle#ed oenses ere co""itted. Even assu"in# that our on las are applicable, the 5nited States

#overn"ent has not decided to #ive its consent to be sued in our courts, hich therefore has not ac3uired

the co"petence to act on the said clai",.

B4ERE9ORE, the petition is /R-NTED. The challen#ed orders dated March +,0, -u#ust ,0, and

Septe"ber , 0, are SET -SIDE. The respondent court is directed to DISMISS Civil Case No. *)@O. Our

Te"porar! restrainin# order of Septe"ber *,0, is "ade PERM-NENT. No costs.

SO ORDERED.

$arvasa, &ancayco, &rino!ui/o and Medialdea, 00., Concur.


18/44

Republic of the PhilippinesSUPREME COURT

Manila

EN ;-NC

G.R. No. 15705 3u)e 2I, 200

THE REPUB!C OF N'ONESA, HS ECE!!ENC" AMBASSA'OR SOERATMN, a) MNSTERCOUNSE!!OR A:HAR ASM, Petitioners,vs.

3AMES 9N:ON, o() bu+()e++ u)er *e )a=e a) +ye o4 9N:ON TRA'E AN'SER9CES,Respondent.

D E C I S I O N

A:CUNA,J:

This is a petition for revie on certiorarito set aside the Decision of the Court of -ppeals dated Ma! (),

*))* and its Resolution dated -u#ust 0, *))*, in C-@/.R. SP No. +1 entitled 1#he Repu'lic o*

Indonesia, His %2cellency m'assador Soeratmin and Minister Counselor zhari 3asim v. Hon. Cesar

Santamaria, (residing 0udge, R#C "ranch 456, Ma7ati City, and 0ames 8inzon, doing 'usiness under the

name and style o* 8inzon #rade and Services.1

Petitioner, Republic of Indonesia, represented b! its Counsellor, Siti Partinah, entered into a Maintenance

-#ree"ent in -u#ust 0 ith respondent 8a"es in7on, sole proprietor of in7on Trade and Services.

The Maintenance -#ree"ent stated that respondent shall, for a consideration, "aintain speci?ed

e3uip"ent at the E"bass! Main ;uildin#, E"bass! -nne: ;uildin# and the Bis"a Duta, the oFcial

residence of petitioner -"bassador Soerat"in. The e3uip"ent covered b! the Maintenance -#ree"ent are

air conditionin# units, #enerator sets, electrical facilities, ater heaters, and ater "otor pu"ps. It is

li alle#ed dissatisfaction

over respondent>s servicesH $a% in 8ul! *))), Minister Counsellor Uasi" still re3uested respondent to assi#n

to the e"bass! an additional full@ti"e or


19/44

4ence, on Dece"ber 0, *))), respondent ?led a co"plaint(a#ainst petitioners docs decision that petitioners have aived their i""unit! fro" suit b! usin# as itsbasis the above"entioned provision in the Maintenance -#ree"ent.

The petition is i"pressed ith "erit.

)er)a(o)a a? (+ 4ou)e arey u/o) *e /r()-(/e+ o4 re-(/ro-(y, -o=(y, ()e/e)e)-e,a) eua(y o4 Sae+ ?*(-* ?ere ao/e a+ /ar o4 *e a? o4 our a) u)er Ar(-e ,Se-(o) 2 o4 *e 187 Co)+(u(o).8T*e rue *a a Sae =ay )o be +ue ?(*ou (+ -o)+e)(+ a )e-e++ary -o)+eue)-e o4 *e /r()-(/e+ o4 ()e/e)e)-e a) eua(y o4 Sae+.A+e)u)-(ae () Sa)er+ >. 9er((a)o ,10*e /ra-(-a u+(-a(o) 4or *e o-r()e o4 +o>ere()(==u)(y (+ *a *ere -a) be )o ea r(* aa()+ *e au*or(y *a =a6e+ *e a? o) ?*(-*

*e r(* e/e)+. ) *e -a+e o4 4ore() Sae+, *e rue (+ er(>e 4ro= *e /r()-(/e o4 *e+o>ere() eua(y o4 Sae+, a+ e/re++e () *e =a(=par in parem non ha0et imperium. A+ae+ are +o>ere() eua+ a) -a))o a++er ur(+(-(o) o>er o)e a)o*er.11A -o)rarya(ue ?ou u)uy >e *e /ea-e o4 )a(o)+.12

The rules of International 6a, hoever, are neither un!ieldin# nor i"pervious to chan#e. The increasin#

need of soverei#n States to enter into purel! co""ercial activities re"otel! connected ith the dischar#e

of their #overn"ental functions brou#ht about a ne concept of soverei#n i""unit!. This concept, the

restrictive theor!, holds that the i""unit! of the soverei#n is reco#ni7ed onl! ith re#ard to public acts or

actsjure imperii, but not ith re#ard to private acts or actsjure gestionis.0(
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20/44

In nited States v. Ruiz,01for instance, e held that the conduct of public biddin# for the repair of a harf

at a 5nited States Naval Station is an actjure imperii. On the other hand, e considered as an actjure

gestionisthe hirin# of a coo< in the recreation center caterin# to -"erican service"en and the #eneral

public at the 8ohn 4a! -ir Station in ;a#uio Cit!,0as ell as the biddin# for the operation of barber shops

in Clar< -ir ;ase in -n#eles Cit!.0

-propos the present case, the "ere enterin# into a contract b! a forei#n State ith a private part! cannot

be construed as the ulti"ate test of hether or not it is an actjure imperiiorjure gestionis. Such act is

onl! the start of the in3uir!. Is the forei#n State en#a#ed in the re#ular conduct of a business If theforei#n State is not en#a#ed re#ularl! in a business or co""ercial activit!, and in this case it has not been

shon to be so en#a#ed, the particular act or transaction "ust then be tested b! its nature. If the act is in

pursuit of a soverei#n activit!, or an incident thereof, then it is an actjure imperii.0

4ence, the e:istence alone of a para#raph in a contract statin# that an! le#al action arisin# out of the

a#ree"ent shall be settled accordin# to the las of the Philippines and b! a speci?ed court of the

Philippines (+ )o )e-e++ar(y a ?a(>er o4 +o>ere() (==u)(y 4ro= +u(.The aforesaid provisioncontains lan#ua#e not necessaril! inconsistent ith soverei#n i""unit!. On the other hand, such provision

"a! also be "eant to appl! here the soverei#n part! elects to sue in the local courts, or otherise

aives its i""unit! b! an! subse3uent act. The applicabilit! of Philippine las "ust be dee"ed to include

Philippine las in its totalit!, includin# the principle reco#ni7in# soverei#n i""unit!. 4ence, the proper

court "a! have no proper action, b! a! of settlin# the case, e:cept to dis"iss it.

Sub=(++(o) by a 4ore() +ae o o-a ur(+(-(o) =u+ be -ear a) u)eu(>o-a. =u+ be(>e) e/(-(y or by )e-e++ary (=/(-a(o). er () *(+ -a+e.

Respondent concedes that the establish"ent of a diplo"atic "ission is a soverei#n function.49)phi4On

the other hand, he ar#ues that the actual ph!sical "aintenance of the pre"ises of the diplo"atic "ission,

such as the up() uarer+ o4 (+ ae)+ a) o-(a+. It is therefore clear that petitionerRepublic of Indonesia as actin# in pursuit of a soverei#n activit! hen it entered into a contract ith

respondent for the up


21/44

0. - diplo"atic a#ent shall en'o! i""unit! fro" the cri"inal 'urisidiction of the receivin# State. 4e shall

also en'o! i""unit! fro" its civil and ad"inistrative 'urisdiction, e:cept in the case ofH

$a% a real action relatin# to private i""ovable propert! situated in the territor! of the receivin#

State, unless he holds it on behalf of the sendin# State for the purposes of the "issionG

$b% an action relatin# to succession in hich the diplo"atic a#ent is involved as e:ecutor,

ad"inistrator, heir or le#atee as a private person and not on behalf of the sendin# StateG

$c% an action relatin# to an! professional or co""ercial activit! e:ercised b! the diplo"atic a#ent in

the receivin# State outside his oFcial functions.

: : :

The act of petitioners -"bassador Soerat"in and Minister Counsellor Uasi" in ter"inatin# the

Maintenance -#ree"ent is not covered b! the e:ceptions provided in the above"entioned provision.

The Solicitor /eneral believes that said act "a! fall under subpara#raph $c% thereof,*)but said provision

clearl! applies onl! to a situation here the diplo"atic a#ent en#a#es in an! professional or co""ercial

activit! outside oFcial functions, hich is not the case herein.


22/44


23/44

deliver! of articles can be carried on b! private parties ith #reater eFcienc!, the Co""issioner

"a!, after public biddin# and sub'ect to the approval of the depart"ent head, contract ith an!

private part! for the service of receivin#, handlin#, custod! and deliver! of articles, and in such

event, the contract "a! include the sale or lease of #overn"ent@oned e3uip"ent and facilities

used in such service.

Inssociated Wor7ers nion, et al. vs. "ureau o* Customs, et al., 6@*0(, resolution of -u#ust , 0(,

this Court indeed held that the fore#oin# statutor! provisions authori7in# the #rant b! contract to an!

private part! of the ri#ht to render said arrastre services necessaril! i"pl! that the sa"e is dee"ed b!Con#ress to be proprietar! or non@#overn"ental function. The issue in said case, hoever, as hether

laborers en#a#ed in arrastre service fall under the concept o* employees in the /overn"ent employed in

governmental *unctions for purposes of the prohibition in Section 00, Republic -ct + to the eect that

e"plo!ees in the /overn"ent . . . shall not stri


24/44

over its ob'ection. $See Metran vs. Paredes, 1 O. /a7. *+(G -n#at River Irri#ation S!ste", et al.

vs. -n#at River Bor


25/44

u)era6e+ o -o)u- +a( o/era(o) (+e4. T*e Bureau o4 Cu+o=+, a-() a+ /ar o4 *e=a-*()ery o4 *e )a(o)a o>er)=e) () *e o/era(o) o4 *e arra+re +er>(-e, /ur+ua) oe/re++ e(+a(>e =a)ae a) a+ a )e-e++ary ()-(e) o4 (+ /r(=e o>er)=e)a 4u)-(o), (+(==u)e 4ro= +u(, *ere be() )o +aue o *e -o)rary.

B4ERE9ORE, the order of dis"issal appealed fro" is hereb! aFr"ed, ith costs a#ainst appellant. So

ordered.

Republic of the PhilippinesSUPREME COURT

Manila

9IRST DIISION

G.R. No. !5217 A/r( 8, 11

MUNCPA!T" OF SAN FERNAN'O, !A UNON,petitionervs.HON. 3U'GE ROMEO N. FRME, 3UANA RMAN'OBANA, AUREANO BANA, 3R., SOR MARETABANA, MONTANO BANA, OR3A BANA, AN' !"'A R. BANA,respondents.

Mauro C. Ca'ading, 0r. *or petitioner.Simeon &. Hipol *or private respondent.

ME'A!'EA,J.:

This is a petition for certiorariith pra!er for the issuance of a rit of preli"inar! "andator! in'unctionsee


26/44

-t about ocloc< in the "ornin# of Dece"ber 0, 0, a collision occurred involvin# a passen#er'eepne! driven b! ;ernardo ;ala#ot and oned b! the Estate of Macario Nieveras, a #ravel and sand trucs feesG and

. Costs of suit.

SO ORDERED.

9olloin# the RTC>s denial of its "otion for reconsideration on Ma! , *))*,the 5P ?led a notice of appealon 8une (, *))*.Stern ;uilders and dela Cru7 opposed the notice of appeal on the #round of its ?lin#bein# belated, and "oved for the e:ecution of the decision. The 5P countered that the notice of appealas ?led ithin the re#le"entar! period because the 5P>s OFce of 6e#al -airs $O6S% in Dili"an, Wue7onCit! received the order of denial onl! on Ma! (0, *))*. On Septe"ber *, *))*, the RTC denied duecourse to the notice of appeal for havin# been ?led out of ti"e and #ranted the private respondents>"otion for e:ecution.+

The RTC issued the rit of e:ecution on October 1, *))*,and the sheri of the RTC served the rit ofe:ecution and notice of de"and upon the 5P, throu#h its counsel, on October , *))*.0)The 5P ?led anur#ent "otion to reconsider the order dated Septe"ber *, *))*, to 3uash the rit of e:ecution dated

October 1, *))*, and to restrain the proceedin#s.

00

4oever, the RTC denied the ur#ent "otion on -pril 0,*))(.0*

On 8une *1, *))(, the 5P assailed the denial of due course to its appeal throu#h a petition for certiorariinthe Court of -ppeals $C-%, docs "otion for reconsideration on -pril 0,*))1.0

On Ma! 00, *))1, the 5P appealed to the Court b! petition for revie on certiorari$/.R. No. 0()0%.
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31/44

On 8une *(, *))1, the Court denied the petition for revie.0The 5P "oved for the reconsideration of thedenial of its petition for revie on -u#ust *, *))1,0+but the Court denied the "otion on October ,*))1.0The denial beca"e ?nal and e:ecutor! on Nove"ber 0*, *))1. *)

In the "eanhile that the 5P as e:haustin# the available re"edies to overturn the denial of due courseto the appeal and the issuance of the rit of e:ecution, Stern ;uilders and dela Cru7 ?led in the RTC their"otions for e:ecution despite their previous "otion havin# alread! been #ranted and despite the rit ofe:ecution havin# alread! issued. On 8une 00, *))(, the RTC #ranted another "otion for e:ecution ?led onMa! , *))( $althou#h the RTC had alread! issued the rit of e:ecution on October 1, *))*%.*0

On 8une *(, *))( and 8ul! *, *))(, respectivel!, the sheri served notices of #arnish"ent on the 5P>sdepositor! bans e: parte "otion for issuance of a release order. *

The 5P "oved for the reconsideration of the order of October 01, *))(, but the RTC denied the "otion onNove"ber , *))(.*

On 8anuar! 0*, *))1, Stern ;uilders and dela Cru7 a#ain sou#ht the release of the #arnishedfunds.*+Despite the 5P>s opposition,*the RTC #ranted the "otion to release the #arnished funds on March0, *))1.()On -pril *), *))1, hoever, the RTC held in abe!ance the enforce"ent of the rits ofe:ecution issued on October 1, *))* and 8une (, *))( and all the ensuin# notices of #arnish"ent, citin#Section 1, Rule *, Rules of Court, hich provided that the pendenc! of a ti"el! "otion for reconsiderationsta!ed the e:ecution of the 'ud#"ent.(0

On Dece"ber *0, *))1, the RTC, throu#h respondent 8ud#e -#ustin S. Di7on, authori7ed the release of the#arnished funds of the 5P,(*to itH

B4ERE9ORE, pre"ises considered, there bein# no "ore le#al i"pedi"ent for the release of the #arnished

a"ount in satisfaction of the 'ud#"ent aard in the instant case, let the a"ount #arnished be i""ediatel!released b! the Develop"ent ;an< of the Philippines, Co""onealth ;ranch, Wue7on Cit! in favor of theplainti.

SO ORDERED.

The 5P as served on 8anuar! (, *)) ith the order of Dece"ber *0, *))1 directin# D;P to release the#arnished funds.((

On 8anuar! , *)), Stern ;uilders and dela Cru7 "oved to cite D;P in direct conte"pt of court for its non@co"pliance ith the order of release.(1

Thereupon, on 8anuar! 0), *)), the 5P brou#ht a petition for certiorariin the C- to challen#e the'urisdiction of the RTC in issuin# the order of Dece"ber *0, *))1 $C-@/.R. C No. ++0*%.(-side fro"raisin# the denial of due process, the 5P averred that the RTC co""itted #rave abuse of discretiona"ountin# to lac< or e:cess of 'urisdiction in rulin# that there as no lon#er an! le#al i"pedi"ent to therelease of the #arnished funds. The 5P ar#ued that #overn"ent funds and properties could not be sei7edb! virtue of rits of e:ecution or #arnish"ent, as held in Depart"ent of -#riculture v. National 6aborRelations Co""ission,(and citin# Section +1 of Presidential Decree No. 011 to the eect that revenuefunds shall not be paid out of an! public treasur! or depositor! e:cept in pursuance of an appropriation laor other speci?c statutor! authorit!G and that the order of #arnish"ent clashed ith the rulin# in5niversit! of the Philippines ;oard of Re#ents v. 6i#ot@Telan(to the eect that the funds belon#in# to the5P ere public funds.

On 8anuar! 0, *)), the C- issued a te"porar! restrainin# order $TRO% upon application b! the 5P.(+
http://www.lawphil.net/judjuris/juri2012/aug2012/gr_171182_2012.html#fnt17http://www.lawphil.net/judjuris/juri2012/aug2012/gr_171182_2012.html#fnt18http://www.lawphil.net/judjuris/juri2012/aug2012/gr_171182_2012.html#fnt18http://www.lawphil.net/judjuris/juri2012/aug2012/gr_171182_2012.html#fnt19http://www.lawphil.net/judjuris/juri2012/aug2012/gr_171182_2012.html#fnt19http://www.lawphil.net/judjuris/juri2012/aug2012/gr_171182_2012.html#fnt20http://www.lawphil.net/judjuris/juri2012/aug2012/gr_171182_2012.html#fnt21http://www.lawphil.net/judjuris/juri2012/aug2012/gr_171182_2012.html#fnt22http://www.lawphil.net/judjuris/juri2012/aug2012/gr_171182_2012.html#fnt23http://www.lawphil.net/judjuris/juri2012/aug2012/gr_171182_2012.html#fnt24http://www.lawphil.net/judjuris/juri2012/aug2012/gr_171182_2012.html#fnt25http://www.lawphil.net/judjuris/juri2012/aug2012/gr_171182_2012.html#fnt26http://www.lawphil.net/judjuris/juri2012/aug2012/gr_171182_2012.html#fnt27http://www.lawphil.net/judjuris/juri2012/aug2012/gr_171182_2012.html#fnt28http://www.lawphil.net/judjuris/juri2012/aug2012/gr_171182_2012.html#fnt29http://www.lawphil.net/judjuris/juri2012/aug2012/gr_171182_2012.html#fnt29http://www.lawphil.net/judjuris/juri2012/aug2012/gr_171182_2012.html#fnt30http://www.lawphil.net/judjuris/juri2012/aug2012/gr_171182_2012.html#fnt31http://www.lawphil.net/judjuris/juri2012/aug2012/gr_171182_2012.html#fnt32http://www.lawphil.net/judjuris/juri2012/aug2012/gr_171182_2012.html#fnt33http://www.lawphil.net/judjuris/juri2012/aug2012/gr_171182_2012.html#fnt34http://www.lawphil.net/judjuris/juri2012/aug2012/gr_171182_2012.html#fnt35http://www.lawphil.net/judjuris/juri2012/aug2012/gr_171182_2012.html#fnt35http://www.lawphil.net/judjuris/juri2012/aug2012/gr_171182_2012.html#fnt36http://www.lawphil.net/judjuris/juri2012/aug2012/gr_171182_2012.html#fnt37http://www.lawphil.net/judjuris/juri2012/aug2012/gr_171182_2012.html#fnt38http://www.lawphil.net/judjuris/juri2012/aug2012/gr_171182_2012.html#fnt17http://www.lawphil.net/judjuris/juri2012/aug2012/gr_171182_2012.html#fnt18http://www.lawphil.net/judjuris/juri2012/aug2012/gr_171182_2012.html#fnt19http://www.lawphil.net/judjuris/juri2012/aug2012/gr_171182_2012.html#fnt20http://www.lawphil.net/judjuris/juri2012/aug2012/gr_171182_2012.html#fnt21http://www.lawphil.net/judjuris/juri2012/aug2012/gr_171182_2012.html#fnt22http://www.lawphil.net/judjuris/juri2012/aug2012/gr_171182_2012.html#fnt23http://www.lawphil.net/judjuris/juri2012/aug2012/gr_171182_2012.html#fnt24http://www.lawphil.net/judjuris/juri2012/aug2012/gr_171182_2012.html#fnt25http://www.lawphil.net/judjuris/juri2012/aug2012/gr_171182_2012.html#fnt26http://www.lawphil.net/judjuris/juri2012/aug2012/gr_171182_2012.html#fnt27http://www.lawphil.net/judjuris/juri2012/aug2012/gr_171182_2012.html#fnt28http://www.lawphil.net/judjuris/juri2012/aug2012/gr_171182_2012.html#fnt29http://www.lawphil.net/judjuris/juri2012/aug2012/gr_171182_2012.html#fnt30http://www.lawphil.net/judjuris/juri2012/aug2012/gr_171182_2012.html#fnt31http://www.lawphil.net/judjuris/juri2012/aug2012/gr_171182_2012.html#fnt32http://www.lawphil.net/judjuris/juri2012/aug2012/gr_171182_2012.html#fnt33http://www.lawphil.net/judjuris/juri2012/aug2012/gr_171182_2012.html#fnt34http://www.lawphil.net/judjuris/juri2012/aug2012/gr_171182_2012.html#fnt35http://www.lawphil.net/judjuris/juri2012/aug2012/gr_171182_2012.html#fnt36http://www.lawphil.net/judjuris/juri2012/aug2012/gr_171182_2012.html#fnt37http://www.lawphil.net/judjuris/juri2012/aug2012/gr_171182_2012.html#fnt38


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On March **, *)), Stern ;uilders and dela Cru7 ?led in the RTC their a"ended "otion for sheri>sassistance to i"ple"ent the release order dated Dece"ber *0, *))1, statin# that the )@da! period of the

TRO of the C- had alread! lapsed.(The 5P opposed the a"ended "otion and countered that thei"ple"entation of the release order be suspended.1)

On Ma! (, *)), the RTC #ranted the a"ended "otion for sheri>s assistance and directed the sheri toproceed to the D;P to receive the chec< in satisfaction of the 'ud#"ent.10

The 5P sou#ht the reconsideration of the order of Ma! (, *)).1*

On Ma! 0, *)), D;P ?led a "otion to consi#n the chec< representin# the 'ud#"ent aard and to dis"issthe "otion to cite its oFcials in conte"pt of court.1(

On Ma! *(, *)), the 5P presented a "otion to ithhold the release of the pa!"ent of the 'ud#"entaard.11

On 8ul! +, *)), the RTC resolved all the pendin# "atters, 1notin# that the D;P had alread! delivered tothe sheri Mana#er>s Chec< No. +0010 for P 0,(),00.1 representin# the #arnished funds pa!able tothe order of Stern ;uilders and dela Cru7 as its co"pliance ith the RTC>s order dated Dece"ber *0,*))1.14oever, the RTC directed in the sa"e order that Stern ;uilders and dela Cru7 should not encashthe chec< or ithdra its a"ount pendin# the ?nal resolution of the 5P>s petition for certiorari, to itH1

To enable the "one! represented in the chec< in 3uestion $No. ))))+00100% to earn interest durin# thependenc! of the defendant 5niversit! of the Philippines application for a rit of in'unction ith the Court of-ppeals the sa"e "a! no be deposited b! the plainti at the #arnishee ;an< $Develop"ent ;an< of thePhilippines%, the disposition of the a"ount represented therein bein# sub'ect to the ?nal outco"e of thecase of the 5niversit! of the Philippines et al., vs. 4on. -#ustin S. Di7on et al., $C- /.R. ++0*% before theCourt of -ppeals.

6et it be stated herein that the plainti is not authori7ed to encash and ithdra the a"ount representedin the chec< in 3uestion and en'o! the sa"e in the fashion of an oner durin# the pendenc! of the casebeteen the parties before the Court of -ppeals hich "a! or "a! not be resolved in plainti>s favor.

Bith the end in vie of seein# to it that the chec< in 3uestion is deposited b! the plainti at the

Develop"ent ;an< of the Philippines $#arnishee ban


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1. E:ecutive Order No. 0) $Directin# all National /overn"ent -#encies to Revert Certain-ccounts Pa!able to the Cu"ulative Result of Operations of the National /overn"ent and forOther Purposes% Section . Reversion of -ccounts Pa!able, provides that, all 0 and prior!ears docu"ented accounts pa!able and all undocu"ented accounts re#ardless of the !earthe! ere incurred shall be reverted to the Cu"ulative Result of Operations of the National/overn"ent $CRO5%. This shall appl! to accounts pa!able of all funds, e:cept ?duciar!funds, as lon# as the purpose for hich the funds ere created have not been acco"plishedand accounts pa!able under forei#n assisted pro'ects for the duration of the said pro'ect. Inthis re#ard, the Depart"ent of ;ud#et and Mana#e"ent issued 8oint@Circular No. @ 1.)$1.(% Procedural /uidelines hich provides that all accounts pa!able that reverted to theCRO5 "a! be considered for pa!"ent upon deter"ination thru ad"inistrative process, ofthe e:istence, validit! and le#alit! of the clai". Thus, the alle#ation of the defendants thatconsiderin# no appropriation for the pa!"ent of an! a"ount aarded to plaintis appelleethe funds of defendant@appellants "a! not be sei7ed pursuant to a rit of e:ecution issuedb! the re#ular court is "isplaced. Surel! hen the defendants and the plainti entered intothe /eneral Construction of -#ree"ent there is an a"ount alread! allocated b! the latter forthe said pro'ect hich is no lon#er sub'ect of future appropriation.1

-fter the C- denied their "otion for reconsideration on Dece"ber *(, *)), the petitioners appealed b!petition for revie.

Maer+ Ar(+() 'ur() *e Pe)e)-y o4 *e Pe((o)

On 8anuar! (), *)), 8ud#e Di7on of the RTC $;ranch +)% denied Stern ;uilders and dela Cru7>s "otion toithdra the deposit, in consideration of the 5P>s intention to appeal to the C-,)statin#H

Since it appears that the defendants are intendin# to ?le a petition for revie of the Court of -ppealsresolution in C-@/.R. No. ++0* ithin the re#le"entar! period of ?fteen $0% da!s fro" receipt ofresolution, the Court a#rees ith the defendants stand that the #rantin# of plaintis> sub'ect "otion ispre"ature.

6et it be stated that hat the Court "eant b! its Order dated 8ul! +, *)) hich states in part that thedisposition of the a"ount represented therein bein# sub'ect to the ?nal outco"e of the case of the5niversit! of the Philippines, et. al., vs. 4on. -#ustin S. Di7on et al., $C- /.R. No. ++0* before the Court of-ppeals% is that the 'ud#"ent or resolution of said court has to be ?nal and e:ecutor!, for if the sa"e ill

still be elevated to the Supre"e Court, it ill not attain ?nalit! !et until the hi#hest court has rendered itson ?nal 'ud#"ent or resolution.0

4oever, on 8anuar! **, *)), the 5P ?led an rgent pplication *or #emporary Restraining Order and=or Writ o* (reliminary Injunction,*averrin# that on 8anuar! (, *)), 8ud#e Maria Theresa dela Torre@adao$ho had "eanhile replaced 8ud#e Di7on upon the latter>s appoint"ent to the C-% had issued anotherorder alloin# Stern ;uilders and dela Cru7 to ithdra the deposit,(to itH

It bears stressin# that defendants> liabilit! for the pa!"ent of the 'ud#"ent obli#ation has beco"eindubitable due to the ?nal and e:ecutor! nature of the Decision dated Nove"ber *+, *))0. Insofar as thepa!"ent of the KsicL 'ud#"ent obli#ation is concerned, the Court believes that there is nothin# "ore thedefendant can do to escape liabilit!. It is observed that there is nothin# "ore the defendant can do to

escape liabilit!. It is observed that defendant 5.P. S!ste" had alread! e:hausted all its le#al re"edies tooverturn, set aside or "odif! the decision $dated Nove"ber *+, *))0$ rendered a#ainst it. The a! theCourt sees it, defendant 5.P. S!ste">s petition before the Supre"e Court concerns onl! ith the "annerb! hich said 'ud#"ent aard should be satis?ed. It has nothin# to do ith the le#alit! or propriet!thereof, althou#h it pra!s for the deletion of KsicL reduction of the aard of "oral da"a#es.

It "ust be e"phasi7ed that this Court>s ?ndin#, i.e., that there as suFcient appropriation ear"ar


34/44

Bhile it is true that the for"er Presidin# 8ud#e of this Court in its Order dated 8anuar! (), *)) had statedthatH

6et it be stated that hat the Court "eant b! its Order dated 8ul! +, *)) hich states in part that thedisposition of the a"ount represented therein bein# sub'ect to the ?nal outco"e of the case of the5niversit! of the Philippines, et. al., vs. 4on. -#ustin S. Di7on et al., $C- /.R. No. ++0* before the Court of-ppeals% is that the 'ud#"ent or resolution of said court has to be ?nal and e:ecutor!, for if the sa"e illstill be elevated to the Supre"e Court, it ill not attain ?nalit! !et until the hi#hest court has rendered itson ?nal 'ud#"ent or resolution.

it should be noted that neither the Court of -ppeals nor the Supre"e Court issued a preli"inar! in'unctionen'oinin# the release or ithdraal of the #arnished a"ount. In fact, in its present petition for reviebefore the Supre"e Court, 5.P. S!ste" has not pra!ed for the issuance of a rit of preli"inar! in'unction.

Thus, the Court doubts hether such rit is forthco"in#.

The Court honestl! believes that if defendants> petition assailin# the Order of this Court dated Dece"ber(0, *))1 #rantin# the "otion for the release of the #arnished a"ount as "eritorious, the Court of-ppeals ould have issued a rit of in'unction en'oinin# the sa"e. Instead, said appellate court not onl!refused to issue a it of preli"inar! in'unction pra!ed for b! 5.P. S!ste" but denied the petition, as ell. 1

The 5P contended that 8ud#e adao thereb! eectivel! reversed the 8anuar! (), *)) order of 8ud#e Di7ondisalloin# the ithdraal of the #arnished a"ount until after the decision in the case ould have beco"e

?nal and e:ecutor!.

-lthou#h the Court issued a TRO on 8anuar! *1, *)) to en'oin 8ud#e adao and all persons actin#pursuant to her authorit! fro" enforcin# her order of 8anuar! (, *)),it appears that on 8anuar! 0,*)), or prior to the issuance of the TRO, she had alread! directed the D;P to forthith release the#arnished a"ount to Stern ;uilders and dela Cru7G and that D;P had forthith co"plied ith the orderon 8anuar! 0, *)) upon the sheri>s service of the order of 8ud#e adao.

These intervenin# develop"ents i"pelled the 5P to ?le in this Court a supple"ental petition on 8anuar!*, *)),+alle#in# that the RTC $8ud#e adao% #ravel! erred in orderin# the i""ediate release of the#arnished a"ount despite the pendenc! of the petition for revie in this Court.

The 5P ?led a second supple"ental petition

after the RTC $8ud#e adao% denied the 5P>s "otion for theredeposit of the ithdran a"ount on -pril 0), *)),)to itH

This resolves defendant 5.P. S!ste">s 5r#ent Motion to Redeposit 8ud#"ent -ard pra!in# that plaintisbe directed to redeposit the 'ud#"ent aard to D;P pursuant to the Te"porar! Restrainin# Order issuedb! the Supre"e Court. Plaintis opposed the "otion and countered that the Te"porar! Restrainin# Orderissued b! the Supre"e Court has beco"e "oot and acade"ic considerin# that the act sou#ht to berestrained b! it has alread! been perfor"ed. The! also alle#ed that the redeposit of the 'ud#"ent aardas no lon#er feasible as the! have alread! spent the sa"e.

It bears stressin#, if onl! to set the record strai#ht, that this Court did not in its Order dated 8anuar! (,*)) $the i"ple"entation of hich as restrained b! the Supre"e Court in its Resolution dated 8anuar!*1, *))*% direct that that #arnished a"ount be deposited ith the #arnishee ban< $Develop"ent ;ans "otion to redeposit the

'ud#"ent a"ount. /rantin# said "otion is not onl! contrar! to la, but it ill also render this Court>s ?nale:ecutor! 'ud#"ent nu#ator!. 6iti#ation "ust end and ter"inate so"eti"e and so"ehere, and it isessential to an eective ad"inistration of 'ustice that once a 'ud#"ent has beco"e ?nal the issue or causeinvolved therein should be laid to rest. This doctrine of ?nalit! of 'ud#"ent is #rounded on funda"entalconsiderations of public polic! and sound practice. In fact, nothin# is "ore settled in la than that once a

'ud#"ent attains ?nalit! it thereb! beco"es i""utable and unalterable. It "a! no lon#er be "odi?ed inan! respect, even if the "odi?cation is "eant to correct hat is perceived to be an erroneous conclusionof fact or la, and re#ardless of hether the "odi?cation is atte"pted to be "ade b! the court renderin#it or b! the hi#hest court of the land.

B4ERE9ORE, pre"ises considered, ?ndin# defendant 5.P. S!ste">s 5r#ent Motion to Redeposit 8ud#"ent-ard devoid of "erit, the sa"e is hereb! DENIED.

SO ORDERED.

++ue+

The 5P no sub"its thatH

I

T4E CO5RT O9 -PPE-6S COMMITTED /R-E ERROR IN DISMISSIN/ T4E PETITION, -66OBIN/ IN E99ECTT4E /-RNIS4MENT O9 5P 95NDS, B4EN IT R56ED T4-T 95NDS 4-E -6RE-D ;EEN E-RM-RUED 9ORT4E CONSTR5CTION PRO8ECTG -ND T45S, T4ERE IS NO NEED 9OR 95RT4ER -PPROPRI-TIONS.

II

T4E CO5RT O9 -PPE-6S COMMITTED /R-E ERROR IN -66OBIN/ /-RNIS4MENT O9 - ST-TE5NIERSIT>S 95NDS IN IO6-TION O9 -RTIC6E =I, SECTION $% O9 T4E CONSTIT5TION.

III

IN T4E -6TERN-TIE, T4E 5NIERSIT INOUES EW5IT -ND T4E REIEB POBERS O9 T4IS 4ONOR-;6ECO5RT TO MODI9, I9 NOT TOT-66 DE6ETE T4E -B-RD O9 P 0) MI66ION -S MOR-6 D-M-/ES TORESPONDENTS.


36/44

I

T4E RTC@;R-NC4 +) COMMITTED /R-E ERROR IN ORDERIN/ T4E IMMEDI-TE RE6E-SE O9 T4E85D/MENT -B-RD IN ITS ORDER D-TED ( 8-N5-R *)) ON T4E /RO5ND O9 EW5IT -ND 85DICI-6CO5RTES.

T4E RTC@;R-NC4 +) COMMITTED /R-E ERROR IN ORDERIN/ T4E IMMEDI-TE RE6E-SE O9 T4E

85D/MENT -B-RD IN ITS ORDER D-TED 0 8-N5-R *)) ON T4E /RO5ND T4-T PETITIONER 5NIERSITSTI66 4-S - PENDIN/ MOTION 9OR RECONSIDER-TION O9 T4E ORDER D-TED ( 8-N5-R *)).

I

T4E RTC@;R-NC4 +) COMMITTED /R-E ERROR IN NOT ORDERIN/ T4E REDEPOSIT O9 T4E /-RNIS4ED-MO5NT TO T4E D;P IN IO6-TION O9 T4E C6E-R 6-N/5-/E O9 T4E S5PREME CO5RT RESO65TIOND-TED *1 8-N5-R *)).

The 5P ar#ues that the a"ount ear"ars fees. In support of its ar#u"ent, the 5P cited -rticle 0*.* of the /eneral

Construction -#ree"ent, hich stipulated that no deductions ould be alloed for the pa!"ent of clai"s,da"a#es, losses and e:penses, includin# attorne!>s fees, in case of an! liti#ation arisin# out of theperfor"ance of the or


37/44

Ru()

The petition for revie is "eritorious.

.UPL+ 4u)+, be() o>er)=e) 4u)+,

are )o +ube- o ar)(+*=e)

The 5P as founded on 8une 0+, 0)+ throu#h -ct 0+) to provide advanced instruction in literature,

philosoph!, the sciences, and arts, and to #ive professional and technical trainin# to deservin#students.(Despite its establish"ent as a bod! corporate,1the 5P re"ains to be a charteredinstitutionperfor"in# a le#iti"ate #overn"ent function. It is an institution of hi#her learnin#, not acorporation established for pro?t and declarin# an! dividends.In enactin# Republic -ct No. )) $The5niversit! of the Philippines Charter of *))+%, Con#ress has declared the 5P as the nationaluniversit!dedicated to the search for truth and s constitutional "andate ofpro"otin# 3ualit! and accessible education.)-s a #overn"ent instru"entalit!, the 5P ad"inisters specialfunds sourced fro" the fees and inco"e enu"erated under -ct No. 0+) and Section 0 of E:ecutive OrderNo. 01,0and fro" the !earl! appropriations, to achieve the purposes laid don b! Section * of -ct 0+),as e:panded in Republic -ct No. )).*-ll the funds #oin# into the possession of the 5P, includin# an!

interest accruin# fro" the deposit of such funds in an! bans ritof e:ecution or #arnish"ent. The adverse 'ud#"ent rendered a#ainst the 5P in a suit to hich it hadi"pliedl! consented as not i""ediatel! enforceable b! e:ecution a#ainst the 5P, +because suabilit! ofthe State did not necessaril! "ean its liabilit!.

- "ar


38/44

The 5P correctl! sub"its here that the #arnish"ent of its funds to satisf! the 'ud#"ent aards of actualand "oral da"a#es $includin# attorne!>s fees% as not validl! "ade if there as no special appropriationb! Con#ress to cover the liabilit!. It as, therefore, le#all! unarranted for the C- to a#ree ith the RTC>sholdin# in the order issued on -pril 0, *))( that no appropriation b! Con#ress to allocate and set aside thepa!"ent of the 'ud#"ent aards as necessar! because there $ere% alread! an appropriations $sic%ear"arae re+/o)e)+L -a(=

be4ore ee-u(o) +*ou /ro-ee

The e:ecution of the "onetar! 'ud#"ent a#ainst the 5P as ithin the pri"ar! 'urisdiction of the CO-.

This as e:pressl! provided in Section * of Presidential Decree No. 011, to itH

Section *. &eneral jurisdiction.@ The authorit! and poers of the Co""ission shall e:tend to andco"prehend all "atters relatin# to auditin# procedures, s!ste"s and controls, the s "otion forthe redeposit of the ithdran a"ount. 4ence, such orders and issuances should be struc< don ithoute:ception.

Nothin# e:tenuated 8ud#e adao>s successive violations of Presidential Decree No. 011. She as aare ofPresidential Decree No. 011, considerin# that the Court circulated to all 'ud#es its -d"inistrative CircularNo. 0)@*))),+issued on October *, *))), en'oinin# the" to observe ut"ost caution, prudence and

'udiciousness in the issuance of rits of e:ecution to satisf! "one! 'ud#"ents a#ainst #overn"ent
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a#encies and local #overn"ent units precisel! in order to prevent the circu"vention of PresidentialDecree No. 011, as ell as of the rules and procedures of the CO-, to itH

) orer o /re>e) /o++(be -(r-u=>e)(o) o4 *e rue+ a) /ro-eure+ o4 *e Co==(++(o) o)Au(, ue+ are *ereby e)o()e o ob+er>e u=o+ -au(o), /rue)-e a) u(-(ou+)e++ ()*e (++ua)-e o4 ?r(+ o4 ee-u(o) o +a(+4y =o)ey u=e)+ aa()+ o>er)=e) ae)-(e+a) o-a o>er)=e) u)(+.

8ud#es should bear in "ind that in Co""issioner of Public 4i#ha!s v. San Die#o $(0 SCR- 0, *

0)%, this Court e:plicitl! statedH

The universal rule that here the State #ives its consent to be sued b! private parties either b! #eneral orspecial la, it "a! li"it clai"ant>s action onl! up to the co"pletion of proceedin#s anterior to the sta#e ofe:ecution> and that the poer of the Court ends hen the 'ud#"ent is rendered, since #overn"ent fundsand properties "a! not be sei7ed under rits of e:ecution or #arnish"ent to satisf! such 'ud#"ents, isbased on obvious considerations of public polic!. Disburse"ents of public funds "ust be covered b! thecorrespondin# appropriation as re3uired b! la. The functions and public services rendered b! the Statecannot be alloed to be paral!7ed or disrupted b! the diversion of public funds fro" their le#iti"ate andspeci?c ob'ects, as appropriated b! la.

Moreo>er, ( (+ +ee ur(+/rue)-e *a u/o) eer=()a(o) o4 Sae (ab((y, *e/ro+e-u(o), e)4or-e=e) or +a(+4a-(o) *ereo4 =u+ +( be /ur+ue () a--ora)-e ?(* *e

rue+ a) /ro-eure+ a( o?) () P.'. No. 15, o*er?(+e 6)o?) a+ *e Go>er)=e) Au(()Coe o4 *e P*((//()e+ %'e/ar=e) o4 Ar(-uure >. N!RC, 227 SCRA I, 70102 1 -(()Re/ub(- >+. 9(a+or, 5 SCRA 8 17&. A =o)ey -a(=+ aa()+ *e Go>er)=e) =u+ r+ bee ?(* *e Co==(++(o) o) Au( ?*(-* =u+ a- u/o) ( ?(*() +(y ay+. Ree-(o) o4 *e-a(= ?( au*or(@e *e -a(=a) o ee>ae *e =aer o *e Su/re=e Cour o) !ertioraria)() ee-, +ue *e Sae *ereby %P.'. 15, Se-(o)+ 50&.

4oever, notithstandin# the rule that #overn"ent properties are not sub'ect to lev! and e:ecutionunless otherise provided for b! statute $Republic v. Palacio, *( SCR- + 0+G Co""issioner of Public4i#ha!s v. San Die#o, supra% or "unicipal ordinance $Municipalit! of Ma


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oppressive bastion of "indless t!rann! instead of havin# it as a true haven for the sees appeal, hich the RTCdeclared on Septe"ber *, *))*. The C- upheld the declaration of ?nalit! on 9ebruar! *1, *))1, and theCourt itself denied the 5P>s petition for revie on that issue on Ma! 00, *))1 $/.R. No. 0()0%. The denialbeca"e ?nal on Nove"ber 0*, *))1.

It is true that a decision that has attained ?nalit! beco"es i""utable and unalterable, and cannot be"odi?ed in an! respect,+even if the "odi?cation is "eant to correct erroneous conclusions of fact andla, and hether the "odi?cation is "ade b! the court that rendered it or b! this Court as the hi#hestcourt of the land.++Public polic! dictates that once a 'ud#"ent beco"es ?nal, e:ecutor! and unappealable,

the prevailin# part! should not be deprived of the fruits of victor! b! so"e subterfu#e devised b! thelosin# part!. 5n'usti?ed dela! in the enforce"ent of such 'ud#"ent sets at nau#ht the role and purpose ofthe courts to resolve 'usticiable controversies ith ?nalit!.+Indeed, all liti#ations "ust at so"e ti"e end,even at the ris< of occasional errors.

;ut the doctrine of i""utabilit! of a ?nal 'ud#"ent has not been absolute, and has ad"itted severale:ceptions, a"on# the"H $a% the correction of clerical errorsG $b% the so@called nunc pro tunc entries thatcause no pre'udice to an! part!G $c% void 'ud#"entsG and $d% henever circu"stances transpire after the?nalit! of the decision that render its e:ecution un'ust and ine3uitable.)Moreover, in 4eirs of Maura So v.Obliosca,0e stated that despite the absence of the precedin# circu"stances, the Court is not precludedfro" brushin# aside procedural nor"s if onl! to serve the hi#her interests of 'ustice and e3uit!. -lso, in/u"aru v. Wuirino State Colle#e,*the Court nulli?ed the proceedin#s and the rit of e:ecution issued b!the RTC for the reason that respondent state colle#e had not been represented in the liti#ation b! the

OFce of the Solicitor /eneral.

Be rule that the 5P>s plea for e3uit! arrants the Court>s e:ercise of the e:ceptional poer to disre#ardthe declaration of ?nalit! of the 'ud#"ent of the RTC for bein# in clear violation of the 5P>s ri#ht to dueprocess.

;oth the C- and the RTC found the ?lin# on 8une (, *))* b! the 5P of the notice of appeal to be tard!. The!based their ?ndin# on the fact that onl! si: da!s re"ained of the 5P>s re#le"entar! 0@da! period ithinhich to ?le the notice of appeal because the 5P had ?led a "otion for reconsideration on 8anuar! 0,*))* vis@Y@vis the RTC>s decision the 5P received on 8anuar! , *))*G and that because the denial of the"otion for reconsideration had been served upon -tt!. 9eli"on D. Nolasco of the 5P6; 6e#al OFce on Ma!0, *))*, the 5P had onl! until Ma! *(, *))* ithin hich to ?le the notice of appeal.

The 5P counters that the service of the denial of the "otion for reconsideration upon -tt!. Nolasco asdefective considerin# that its counsel of record as not -tt!. Nolasco of the 5P6; 6e#al OFce but the O6Sin Dili"an, Wue7on Cit!G and that the period of appeal should be rec


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That counsel as the O6S in Dili"an, Wue7on Cit!, hich as served ith the denial onl! on Ma! (0, *))*.-s such, the runnin# of the re"ainin# period of si: da!s resu"ed onl! on 8une 0, *))*,1renderin# the?lin# of the 5P>s notice of appeal on 8une (, *))* ti"el! and ell ithin the re"ainin# da!s of the 5P>speriod to appeal.

eril!, the service of the denial of the "otion for reconsideration could onl! be validl! "ade upon the O6Sin Dili"an, and no other. The fact that -tt!. Nolasco as in the e"plo! of the 5P at the 5P6; 6e#al OFcedid not render the service upon hi" eective. It is settled that here a part! has appeared b! counsel,service "ust be "ade upon such counsel.Service on the part! or the part!>s e"plo!ee is not eective

because such notice is not notice in la.

This is clear enou#h fro" Section *, second para#raph, of Rule0(, Rules of Court, hich e:plicitl! states thatH If an! part! has appeared b! counsel, service upon hi"shall be "ade upon his counsel or one of the", unless service upon the part! hi"self is ordered b! thecourt. Bhere one counsel appears for several parties, he shall onl! be entitled to one cop! of an! paperserved upon hi" b! the opposite side. -s such, the period to appeal resu"ed onl! on 8une 0, *))*, thedate folloin# the service on Ma! (0, *))* upon the O6S in Dili"an of the cop! of the decision of the RTC,not fro" the date hen the 5P as noti?ed.

-ccordin#l!, the declaration of ?nalit! of the 'ud#"ent of the RTC, bein# devoid of factual and le#al bases,is set aside.

Secondl!, even assu"in# that the service upon -tt!. Nolasco as valid and eective, such that there"ainin# period for the 5P to ta


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notices of 'ud#"ent and ?nal orders issued in the !ear 0+ ould en'o! the bene?t of the fresh@periodrule but the later rulin#s of the loer courts li

Section 0. Rendition o* judgments and


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Nonetheless, the absence of ?ndin#s of fact and of an! state"ent of the la and 'urisprudence on hichthe aards of actual and "oral da"a#es, as ell as of attorne!>s fees, ere based as a fatal Ja thatinvalidated the decision of the RTC onl! as to such aards. -s the Court declared in elarde v. Social

8ustice Societ!,0*(the failure to co"pl! ith the constitutional re3uire"ent for a clear and distinctstate"ent of the supportin# facts and la is a #rave abuse of discretion a"ountin# to lac< or e:cess of

'urisdiction and that $d%ecisions or orders issued in careless disre#ard of the constitutional "andate are apatent nullit! and "ust be struc< don as void.0*1The other ite" #ranted b! the RTC $i.e., P )(,1*.1%shall stand, sub'ect to the action of the CO- as stated herein.

immunity from suit

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