G.R. No.

160453

November 12, 2012

REPUBLIC OF THE PHILIPPINES, Petitioner, vs. ARCADIO IVAN A. SANTOS III, and ARCADIO C. SANTOS, JR., Respondents. DECISION BERSAMIN, J.: By law, accretion - the gradual and imperceptible deposit made through the effects of the current of the water- belongs to the owner of the land adjacent to the banks of rivers where it forms. The drying up of the river is not accretion. Hence, the dried-up river bed belongs to the State as property of public dominion, not to the riparian owner, unless a law vests the ownership in some other person. Antecedents Alleging continuous and adverse possession of more than ten years, respondent Arcadio Ivan A. Santos III (Arcadio Ivan) applied on March 7, 1997 for the registration of Lot 4998-B (the property) in the Regional Trial Court (RTC) in Parafiaque City. The property, which had an area of 1,045 square meters, more or less, was located in Barangay San Dionisio, Paraaque City, and was bounded in the Northeast by Lot 4079 belonging to respondent Arcadio C. Santos, Jr. (Arcadio, Jr.), in the Southeast by the Paraaque River, in the Southwest by an abandoned road, and in the Northwest by Lot 4998A also owned by Arcadio Ivan.1 On May 21, 1998, Arcadio Ivan amended his application for land registration to include Arcadio, Jr. as his co-applicant because of the latters co-ownership of the property. He alleged that the property had been formed through accretion and had been in their joint open, notorious, public, continuous and adverse possession for more than 30 years.2 The City of Paraaque (the City) opposed the application for land registration, stating that it needed the property for its flood control program; that the property was within the legal easement of 20 meters from the river bank; and that assuming that the property was not covered by the legal easement, title to the property could not be

registered in favor of the applicants for the reason that the property was an orchard that had dried up and had not resulted from accretion.3 Ruling of the RTC On May 10, 2000,4 the RTC granted the application for land registration, disposing: WHEREFORE, the Court hereby declares the applicants, ARCADIO IVAN A. SANTOS, III and ARCADIO C. SANTOS, JR., both Filipinos and of legal age, as the TRUE and ABSOLUTE OWNERS of the land being applied for which is situated in the Barangay of San Dionisio, City of Paraaque with an area of one thousand forty five (1045) square meters more or less and covered by Subdivision Plan Csd-00000343, being a portion of Lot 4998, Cad. 299, Case 4, Paraaque Cadastre, LRC Rec. No. and orders the registration of Lot 4998-B in their names with the following technical description, to wit: xxxx Once this Decision became (sic) final and executory, let the corresponding Order for the Issuance of the Decree be issued. SO ORDERED. The Republic, through the Office of the Solicitor General (OSG), appealed. Ruling of the CA In its appeal, the Republic ascribed the following errors to the RTC,5 to wit: I THE TRIAL COURT ERRED IN RULING THAT THE PROPERTY SOUGHT TO BE REGISTERED IS AN ACCRETION TO THE ADJOINING PROPERTY OWNED BY APPELLEES DESPITE THE ADMISSION OF APPELLEE ARCADIO C. SANTOS JR. THAT THE SAID PROPERTY WAS NOT FORMED AS A RESULT OF THE

GRADUAL FILLING UP OF SOIL THROUGH THE CURRENT OF THE RIVER. II THE TRIAL COURT ERRED IN GRANTING THE APPLICATION FOR LAND REGISTRATION DESPITE APPELLEES FAILURE TO FORMALLY OFFER IN EVIDENCE AN OFFICIAL CERTIFICATION THAT THE SUBJECT PARCEL OF LAND IS ALIENABLE AND DISPOSABLE. III THE TRIAL COURT ERRED IN RULING THAT APPELLEES HAD SUFFICIENTLY ESTABLISHED THEIR CONTINUOUS, OPEN, PUBLIC AND ADVERSE OCCUPATION OF THE SUBJECT PROPERTY FOR A PERIOD OF MORE THAN THIRTY (30) YEARS. On May 27, 2003, the CA affirmed the RTC.6 The Republic filed a motion for reconsideration, but the CA denied the motion on October 20, 2003.7 Issues Hence, this appeal, in which the Republic urges that:8 I RESPONDENTS CLAIM THAT THE SUBJECT PROPERTY IS AN ACCRETION TO THEIR ADJOINING LAND THAT WOULD ENTITLE THEM TO REGISTER IT UNDER ARTICLE 457 OF THE NEW CIVIL CODE IS CONTRADICTED BY THEIR OWN EVIDENCE. II ASSUMING THAT THE LAND SOUGHT TO BE REGISTERED WAS "PREVIOUSLY A PART OF THE PARAAQUE RIVER WHICH BECAME AN ORCHARD AFTER IT DRIED UP," THE REGISTRATION OF SAID PROPERTY IN FAVOR OF RESPONDENTS CANNOT BE ALTERNATIVELY JUSTIFIED

UNDER ARTICLE 461 OF THE CIVIL CODE. III THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR IN NOT RULING THAT THE FAILURE OF RESPONDENTS TO FORMALLY OFFER IN EVIDENCE AN OFFICIAL CERTIFICATION THAT THE SUBJECT PROPERTY IS ALIENABLE AND DISPOSABLE IS FATAL TO THEIR APPLICATION FOR LAND REGISTRATION. IV THE FINDING OF THE COURT OF APPEALS THAT RESPONDENTS HAVE CONTINUOUSLY, OPENLY, PUBLICLY AND ADVERSELY OCCUPIED THE SUBJECT PROPERTY FOR MORE THAN THIRTY (30) YEARS IS NOT SUPPORTED BY WELLNIGH INCONTROVERTIBLE EVIDENCE. To be resolved are whether or not Article 457 of the Civil Code was applicable herein; and whether or not respondents could claim the property by virtue of acquisitive prescription pursuant to Section 14(1) of Presidential Decree No. 1529 (Property Registration Decree). Ruling The appeal is meritorious. I. The CA grossly erred in applying Article 457 of the Civil Code to respondents benefit Article 457 of the Civil Code provides that "(t)o the owners of lands adjoining the banks of rivers belong the accretion which they gradually receive from the effects of the currents of the waters." In ruling for respondents, the RTC pronounced as follows: On the basis of the evidence presented by the applicants, the Court finds that Arcadio Ivan A. Santos III and Arcadio C. Santos, Jr., are

the owners of the land subject of this application which was previously a part of the Paraaque River which became an orchard after it dried up and further considering that Lot 4 which adjoins the same property is owned by applicant, Arcadio C. Santos, Jr., after it was obtained by him through inheritance from his mother, Concepcion Cruz, now deceased. Conformably with Art. 457 of the New Civil Code, it is provided that: "Article 457. To the owners of the lands adjoining the bank of rivers belong the accretion which they gradually receive from the effects of the current of the waters."9 The CA upheld the RTCs pronouncement, holding: It could not be denied that "to the owners of the lands adjoining the banks of rivers belong the accretion which they gradually receive from the effects of the current of the waters" (Article 457 New Civil Code) as in this case, Arcadio Ivan Santos III and Arcadio Santos, Jr., are the owners of the land which was previously part of the Paraaque River which became an orchard after it dried up and considering that Lot 4 which adjoins the same property is owned by the applicant which was obtained by the latter from his mother (Decision, p. 3; p. 38 Rollo).10 The Republic submits, however, that the application by both lower courts of Article 457 of the Civil Code was erroneous in the face of the fact that respondents evidence did not establish accretion, but instead the drying up of the Paraaque River. The Republics submission is correct. Respondents as the applicants for land registration carried the burden of proof to establish the merits of their application by a preponderance of evidence, by which is meant such evidence that is of greater weight, or more convincing than that offered in opposition to it.11 They would be held entitled to claim the property as their own and apply for its registration under the Torrens system only if they established that, indeed, the property was an accretion to their land. Accretion is the process whereby the soil is deposited along the banks of rivers.12 The deposit of soil, to be considered accretion, must

be: (a) gradual and imperceptible; (b) made through the effects of the current of the water; and (c) taking place on land adjacent to the banks of rivers.13 Accordingly, respondents should establish the concurrence of the elements of accretion to warrant the grant of their application for land registration. However, respondents did not discharge their burden of proof. They did not show that the gradual and imperceptible deposition of soil through the effects of the current of the river had formed Lot 4998-B. Instead, their evidence revealed that the property was the dried-up river bed of the Paraaque River, leading both the RTC and the CA to themselves hold that Lot 4998-B was "the land which was previously part of the Paraaque River xxx (and) became an orchard after it dried up." Still, respondents argue that considering that Lot 4998-B did not yet exist when the original title of Lot 4 was issued in their mothers name in 1920, and that Lot 4998-B came about only thereafter as the land formed between Lot 4 and the Paraaque River, the unavoidable conclusion should then be that soil and sediments had meanwhile been deposited near Lot 4 by the current of the Paraaque River, resulting in the formation of Lot 4998-B. The argument is legally and factually groundless. For one, respondents thereby ignore that the effects of the current of the river are not the only cause of the formation of land along a river bank. There are several other causes, including the drying up of the river bed. The drying up of the river bed was, in fact, the uniform conclusion of both lower courts herein. In other words, respondents did not establish at all that the increment of land had formed from the gradual and imperceptible deposit of soil by the effects of the current. Also, it seems to be highly improbable that the large volume of soil that ultimately comprised the dry land with an area of 1,045 square meters had been deposited in a gradual and imperceptible manner by the current of the river in the span of about 20 to 30 years the span of time intervening between 1920, when Lot 4 was registered in the name of their deceased parent (at which time Lot 4998-B was not yet in existence) and the early 1950s (which respondents witness Rufino

Allanigue alleged to be the time when he knew them to have occupied Lot 4988-B). The only plausible explanation for the substantial increment was that Lot 4988-B was the dried-up bed of the Paraaque River. Confirming this explanation was Arcadio, Jr.s own testimony to the effect that the property was previously a part of the Paraaque River that had dried up and become an orchard. We observe in this connection that even Arcadio, Jr.s own Transfer Certificate of Title No. 44687 confirmed the uniform conclusion of the RTC and the CA that Lot 4998-B had been formed by the drying up of the Paraaque River. Transfer Certificate of Title No. 44687 recited that Lot 4 of the consolidated subdivision plan Pcs-13-002563, the lot therein described, was bounded "on the SW along line 5-1 by Dried River Bed."14 That boundary line of "SW along line 5-1" corresponded with the location of Lot 4998-B, which was described as "bounded by Lot 4079 Cad. 299, (Lot 1, Psu-10676), in the name of respondent Arcadio Santos, Jr. (Now Lot 4, Psd-13-002563) in the Northeast."15 The RTC and the CA grossly erred in treating the dried-up river bed as an accretion that became respondents property pursuant to Article 457 of the Civil Code. That land was definitely not an accretion. The process of drying up of a river to form dry land involved the recession of the water level from the river banks, and the dried-up land did not equate to accretion, which was the gradual and imperceptible deposition of soil on the river banks through the effects of the current. In accretion, the water level did not recede and was more or less maintained. Hence, respondents as the riparian owners had no legal right to claim ownership of Lot 4998-B. Considering that the clear and categorical language of Article 457 of the Civil Code has confined the provision only to accretion, we should apply the provision as its clear and categorical language tells us to. Axiomatic it is, indeed, that where the language of the law is clear and categorical, there is no room for interpretation; there is only room for application.16 The first and fundamental duty of courts is then to apply the law.17 The State exclusively owned Lot 4998-B and may not be divested of its right of ownership. Article 502 of the Civil Code expressly declares that rivers and their natural beds are public dominion of the State.18 It

follows that the river beds that dry up, like Lot 4998-B, continue to belong to the State as its property of public dominion, unless there is an express law that provides that the dried-up river beds should belong to some other person.19 II Acquisitive prescription was not applicable in favor of respondents The RTC favored respondents application for land registration covering Lot 4998-B also because they had taken possession of the property continuously, openly, publicly and adversely for more than 30 years based on their predecessor-in-interest being the adjoining owner of the parcel of land along the river bank. It rendered the following ratiocination, viz:20 In this regard, the Court found that from the time the applicants became the owners thereof, they took possession of the same property continuously, openly, publicly and adversely for more than thirty (30) years because their predecessors-in-interest are the adjoining owners of the subject parcel of land along the river bank. Furthermore, the fact that applicants paid its realty taxes, had it surveyed per subdivision plan Csd-00-000343 (Exh. "L") which was duly approved by the Land Management Services and the fact that Engr. Chito B. Cainglet, OICChief, Surveys Division Land Registration Authority, made a Report that the subject property is not a portion of the Paraaque River and that it does not fall nor overlap with Lot 5000, thus, the Court opts to grant the application. Finally, in the light of the evidence adduced by the applicants in this case and in view of the foregoing reports of the Department of Agrarian Reforms, Land Registration Authority and the Department of Environment and Natural Resources, the Court finds and so holds that the applicants have satisfied all the requirements of law which are essential to a government grant and is, therefore, entitled to the issuance of a certificate of title in their favor. So also, oppositor failed to prove that the applicants are not entitled thereto, not having

presented any witness. In fine, the application is GRANTED. As already mentioned, the CA affirmed the RTC. Both lower courts erred. The relevant legal provision is Section 14(1) of Presidential Decree No. 1529 (Property Registration Decree), which pertinently states: Section 14. Who may apply. The following persons may file in the proper [Regional Trial Court] an application for registration of title to land, whether personally or through their duly authorized representatives: (1) Those who by themselves or through their predecessors-ininterest have been in open, continuous, exclusive and notorious possession and occupation of alienable and disposable lands of the public domain under a bona fide claim of ownership since June 12, 1945, or earlier. xxxx Under Section 14(1), then, applicants for confirmation of imperfect title must prove the following, namely: (a) that the land forms part of the disposable and alienable agricultural lands of the public domain; and (b) that they have been in open, continuous, exclusive, and notorious possession and occupation of the land under a bona fide claim of ownership either since time immemorial or since June 12, 1945.21 The Republic assails the findings by the lower courts that respondents "took possession of the same property continuously, openly, publicly and adversely for more than thirty (30) years."22 Although it is well settled that the findings of fact of the trial court, especially when affirmed by the CA, are accorded the highest degree of respect, and generally will not be disturbed on appeal, with such findings being binding and conclusive on the Court,23 the Court has consistently recognized exceptions to this rule, including the

following, to wit: (a) when the findings are grounded entirely on speculation, surmises, or conjectures; (b) when the inference made is manifestly mistaken, absurd, or impossible; (c) when there is grave abuse of discretion; (d) when the judgment is based on a misapprehension of facts; (e) when the findings of fact are conflicting; (f) when in making its findings the CA went beyond the issues of the case, or its findings are contrary to the admissions of both the appellant and the appellee; (g) when the findings are contrary to those of the trial court; (h) when the findings are conclusions without citation of specific evidence on which they are based; (i) when the facts set forth in the petition as well as in the petitioners main and reply briefs are not disputed by respondent; and (j) when the findings of fact are premised on the supposed absence of evidence and contradicted by the evidence on record.24 Here, the findings of the RTC were obviously grounded on speculation, surmises, or conjectures; and that the inference made by the RTC and the CA was manifestly mistaken, absurd, or impossible. Hence, the Court should now review the findings. In finding that respondents had been in continuous, open, public and adverse possession of the land for more than 30 years, the RTC declared: In this regard, the Court found that from the time the applicant became the owners thereof, they took possession of the same property continuously, openly, publicly and adversely for more than thirty years because their predecessor in interest are the adjoining owners of the subject parcel of land along the river banks. Furthermore, the fact that the applicant paid its realty taxes, had it surveyed per subdivision plan Csd-00-000343 (Exh. "L") which was duly approved by the Land Management Services and the fact that Engr. Chito B. Cainglet, OIC Chief, Surveys Division Land Registration Authority, made a Report that the subject property is not a portion of the Paraaque River and that it does not fall nor overlap with Lot 5000, thus, the Court opts to grant the application. The RTC apparently reckoned respondents period of supposed possession to be "more than thirty years" from the fact that "their predecessors in interest are the adjoining owners of the subject

parcel of land." Yet, its decision nowhere indicated what acts respondents had performed showing their possession of the property "continuously, openly, publicly and adversely" in that length of time. The decision mentioned only that they had paid realty taxes and had caused the survey of the property to be made. That, to us, was not enough to justify the foregoing findings, because, firstly, the payment of realty taxes did not conclusively prove the payors ownership of the land the taxes were paid for,25 the tax declarations and payments being mere indicia of a claim of ownership;26 and, secondly, the causing of surveys of the property involved was not itself an of continuous, open, public and adverse possession. The principle that the riparian owner whose land receives the gradual deposits of soil does not need to make an express act of possession, and that no acts of possession are necessary in that instance because it is the law itself that pronounces the alluvium to belong to the riparian owner from the time that the deposit created by the current of the water becomes manifest27 has no applicability herein. This is simply because Lot 4998-B was not formed through accretion. Hence, the ownership of the land adjacent to the river bank by respondents predecessor-in-interest did not translate to possession of Lot 4998-B that would ripen to acquisitive prescription in relation to Lot 4998-B. On the other hand, the claim of thirty years of continuous, open, public and adverse possession of Lot 4998-B was not even validated or preponderantly established. The admission of respondents themselves that they declared the property for taxation purposes only in 1997 and paid realty taxes only from 199928 signified that their alleged possession would at most be for only nine years as of the filing of their application for land registration on March 7, 1997. Yet, even conceding, for the sake of argument, that respondents possessed Lot 4998-B for more than thirty years in the character they claimed, they did not thereby acquire the land by prescription or by other means without any competent proof that the land was already declared as alienable and disposable by the Government. Absent that declaration, the land still belonged to the State as part of its public dominion.

Article 419 of the Civil Code distinguishes property as being either of public dominion or of private ownership. Article 420 of the Civil Code lists the properties considered as part of public dominion, namely: (a) those intended for public use, such as roads, canals, rivers, torrents, ports and bridges constructed by the State, banks, shores, roadsteads, and others of similar character; and (b) those which belong to the State, without being for public use, and are intended for some public service or for the development of the national wealth. As earlier mentioned, Article 502 of the Civil Code declares that rivers and their natural beds are of public dominion. Whether the dried-up river bed may be susceptible to acquisitive prescription or not was a question that the Court resolved in favor of the State in Celestial v. Cachopero,29 a case involving the registration of land found to be part of a dried-up portion of the natural bed of a creek. There the Court held: As for petitioners claim of ownership over the subject land, admittedly a dried-up bed of the Salunayan Creek, based on (1) her alleged long term adverse possession and that of her predecessor-ininterest, Marcelina Basadre, even prior to October 22, 1966, when she purchased the adjoining property from the latter, and (2) the right of accession under Art. 370 of the Spanish Civil Code of 1889 and/or Article 461 of the Civil Code, the same must fail. Since property of public dominion is outside the commerce of man and not susceptible to private appropriation and acquisitive prescription, the adverse possession which may be the basis of a grant of title in the confirmation of an imperfect title refers only to alienable or disposable portions of the public domain. It is only after the Government has declared the land to be alienable and disposable agricultural land that the year of entry, cultivation and exclusive and adverse possession can be counted for purposes of an imperfect title. A creek, like the Salunayan Creek, is a recess or arm extending from a river and participating in the ebb and flow of the sea. As such, under Articles 420(1) and 502(1) of the Civil Code, the Salunayan Creek, including its natural bed, is property of the public domain which is not susceptible to private appropriation and acquisitive prescription. And, absent any declaration by the government, that a

portion of the creek has dried-up does not, by itself, alter its inalienable character. xxxx Had the disputed portion of the Salunayan Creek dried up after the present Civil Code took effect, the subject land would clearly not belong to petitioner or her predecessor-in-interest since under the aforementioned provision of Article 461, "river beds which are abandoned through the natural change in the course of the waters ipso facto belong to the owners of the land occupied by the new course," and the owners of the adjoining lots have the right to acquire them only after paying their value. And both Article 370 of the Old Code and Article 461 of the present Civil Code are applicable only when "river beds are abandoned through the natural change in the course of the waters." It is uncontroverted, however, that, as found by both the Bureau of Lands and the DENR Regional Executive Director, the subject land became dry as a result of the construction an irrigation canal by the National Irrigation Administration. Thus, in Ronquillo v. Court of Appeals, this Court held: The law is clear and unambiguous. It leaves no room for interpretation. Article 370 applies only if there is a natural change in the course of the waters. The rules on alluvion do not apply to manmade or artificial accretions nor to accretions to lands that adjoin canals or esteros or artificial drainage systems. Considering our earlier finding that the dried-up portion of Estero Calubcub was actually caused by the active intervention of man, it follows that Article 370 does not apply to the case at bar and, hence, the Del Rosarios cannot be entitled thereto supposedly as riparian owners. The dried-up portion of Estero Calubcub should thus be considered as forming part of the land of the public domain which cannot be subject to acquisition by private ownership. xxx (Emphasis supplied) Furthermore, both provisions pertain to situations where there has been a change in the course of a river, not where the river simply dries up. In the instant Petition, it is not even alleged that the Salunayan Creek changed its course. In such a situation,

commentators are of the opinion that the dry river bed remains property of public dominion. (Bold emphases supplied) Indeed, under the Regalian doctrine, all lands not otherwise appearing to be clearly within private ownership are presumed to belong to the State.30 No public land can be acquired by private persons without any grant, express or implied, from the Government. It is indispensable, therefore, that there is a showing of a title from the State.31 Occupation of public land in the concept of owner, no matter how long, cannot ripen into ownership and be registered as a title.32 Subject to the exceptions defined in Article 461 of the Civil Code (which declares river beds that are abandoned through the natural change in the course of the waters as ipso facto belonging to the owners of the land occupied by the new course, and which gives to the owners of the adjoining lots the right to acquire only the abandoned river beds not ipso facto belonging to the owners of the land affected by the natural change of course of the waters only after paying their value), all river beds remain property of public dominion and cannot be acquired by acquisitive prescription unless previously declared by the Government to be alienable and disposable. Considering that Lot 4998-B was not shown to be already declared to be alienable and disposable, respondents could not be deemed to have acquired the property through prescription. Nonetheless, respondents insist that the property was already classified as alienable and disposable by the Government. They cite as proof of the classification as alienable and disposable the following notation found on the survey plan, to wit:33 NOTE ALL CORNERS NOT OTHERWISE DESCRIBED ARE OLD BL CYL. CONC. MONS 15 X 60CM All corners marked PS are cyl. conc. mons 15 x 60 cm Surveyed in accordance with Survey Authority NO. 007604-48 of the Regional Executive Director issued by the CENR-OFFICER dated Dec. 2, 1996.

This survey is inside L.C. Map No. 2623, Proj. No. 25 classified as alienable/disposable by the Bureau of Forest Devt. on Jan. 3, 1968. Lot 4998-A = Lot 5883} Cad 299 Lot 4998-B = Lot 5884} Paranaque Cadastre. Was the notation on the survey plan to the effect that Lot 4998-B was "inside" the map "classified as alienable/disposable by the Bureau of Forest Development on 03 Jan. 1968" sufficient proof of the propertys nature as alienable and disposable public land? To prove that the land subject of an application for registration is alienable, an applicant must conclusively establish the existence of a positive act of the Government, such as a presidential proclamation, executive order, administrative action, investigation reports of the Bureau of Lands investigator, or a legislative act or statute. Until then, the rules on confirmation of imperfect title do not apply. As to the proofs that are admissible to establish the alienability and disposability of public land, we said in Secretary of the Department of Environment and Natural Resources v. Yap34 that: The burden of proof in overcoming the presumption of State ownership of the lands of the public domain is on the person applying for registration (or claiming ownership), who must prove that the land subject of the application is alienable or disposable. To overcome this presumption, incontrovertible evidence must be established that the land subject of the application (or claim) is alienable or disposable.There must still be a positive act declaring land of the public domain as alienable and disposable. To prove that the land subject of an application for registration is alienable, the applicant must establish the existence of a positive act of the government such as a presidential proclamation or an executive order; an administrative action; investigation reports of Bureau of Lands investigators; and a legislative act or a statute. The applicant may also secure a certification from the government that the land claimed to have been possessed for the required number of years is alienable and disposable. In the case at bar, no such proclamation, executive order,

administrative action, report, statute, or certification was presented to the Court. The records are bereft of evidence showing that, prior to 2006, the portions of Boracay occupied by private claimants were subject of a government proclamation that the land is alienable and disposable. Absent such well-nigh incontrovertible evidence, the Court cannot accept the submission that lands occupied by private claimants were already open to disposition before 2006. Matters of land classification or reclassification cannot be assumed. They call for proof." (Emphasis supplied) In Menguito v. Republic,35 which we reiterated in Republic v. Sarmiento,36 we specifically resolved the issue of whether the notation on the survey plan was sufficient evidence to establish the alienability and disposability of public land, to wit: To prove that the land in question formed part of the alienable and disposable lands of the public domain, petitioners relied on the printed words which read: "This survey plan is inside Alienable and Disposable Land Area, Project No. 27-B as per L.C. Map No. 2623, certified by the Bureau of Forestry on January 3, 1968," appearing on Exhibit "E" (Survey Plan No. Swo-13-000227). This proof is not sufficient. Section 2, Article XII of the 1987 Constitution, provides: "All lands of the public domain, waters, minerals, coal, petroleum, and other mineral oils, all forces of potential energy, fisheries, forests or timber, wildlife, flora and fauna, and other natural resources are owned by the State. x x x." For the original registration of title, the applicant (petitioners in this case) must overcome the presumption that the land sought to be registered forms part of the public domain. Unless public land is shown to have been reclassified or alienated to a private person by the State, it remains part of the inalienable public domain. Indeed, "occupation thereof in the concept of owner, no matter how long, cannot ripen into ownership and be registered as a title." To overcome such presumption, incontrovertible evidence must be shown by the applicant. Absent such evidence, the land sought to be registered remains inalienable. In the present case, petitioners cite a surveyor-geodetic engineers

notation in Exhibit "E" indicating that the survey was inside alienable and disposable land. Such notation does not constitute a positive government act validly changing the classification of the land in question. Verily, a mere surveyor has no authority to reclassify lands of the public domain. By relying solely on the said surveyors assertion, petitioners have not sufficiently proven that the land in question has been declared alienable. (Emphasis supplied) In Republic v. T.A.N. Properties, Inc.,37 we dealt with the sufficiency of the certification by the Provincial Environmental Officer (PENRO) or Community Environmental Officer (CENRO) to the effect that a piece of public land was alienable and disposable in the following manner, viz: x x x it is not enough for the PENRO or CENRO to certify that a land is alienable and disposable. The applicant for land registration must prove that the DENR Secretary had approved the land classification and released the land of the public domain as alienable and disposable, and that the land subject of the application for registration falls within the approved area per verification through survey by the PENRO or CENRO. In addition, the applicant for land registration must present a copy of the original classification approved by the DENR Secretary and certified as a true copy by the legal custodian of the official records. These facts must be established to prove that the land is alienable and disposable. Respondent failed to do so because the certifications presented by respondent do not, by themselves, prove that the land is alienable and disposable. Only Torres, respondents Operations Manager, identified the certifications submitted by respondent. The government officials who issued the certifications were not presented before the trial court to testify on their contents. The trial court should not have accepted the contents of the certifications as proof of the facts stated therein. Even if the certifications are presumed duly issued and admissible in evidence, they have no probative value in establishing that the land is alienable and disposable.
1wphi1

xxxx The CENRO and Regional Technical Director, FMS-DENR,

certifications do not prove that Lot 10705-B falls within the alienable and disposable land as proclaimed by the DENR Secretary. Such government certifications do not, by their mere issuance, prove the facts stated therein. Such government certifications may fall under the class of documents contemplated in the second sentence of Section 23 of Rule 132. As such, the certifications are prima facie evidence of their due execution and date of issuance but they do not constitute prima facie evidence of the facts stated therein. (Emphasis supplied) These rulings of the Court indicate that the notation on the survey plan of Lot 4998-B, Cad-00-000343 to the effect that the "survey is inside a map classified as alienable/disposable by the Bureau of Forest Devt" did not prove that Lot 4998-B was already classified as alienable and disposable. Accordingly, respondents could not validly assert acquisitive prescription of Lot 4988-B. WHEREFORE, the Court REVERSES and SETS ASIDE the decision of the Court of Appeals promulgated on May 27, 2003; DISMISSES the application for registration of Arcadio C. Santos, Jr. and Arcadio Ivan S. Santos III respecting Lot 4998-B with a total area of 1,045 square meters, more or less, situated in Barangay San Dionisio, Paraaque City, Metro Manila; and DECLARES Lot 4998-B as exclusively belonging to the State for being part of the dried--up bed of the Parat1aque River. Respondents shall pay the costs of suit. SO ORDERED. LUCAS P. BERSAMIN Associate Justice WE CONCUR: MARIA LOURDES P. A. SERENO Chief Justice TERESITA J. LEONARDO-DE CASTRO Associate Justice BIENVENIDO L. REYES Associate Justice CERTIFICATION

MARTIN S. VILLARA Associate Justic

Pursuant to Section 13, Article VIII of the Constitution, I certify that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court's Division. MARIA LOURDES P. A. SERENO Chief Justice Footnotes
1

Records, Vol. I, pp. 13-15. Id. at 138-142. Id. at 255-258. Records, Vol. II, pp. 519-523. CA Rollo, p. 26.

Id. at 99-107, penned by Associate Justice B.A. Adefuin-de la Cruz (retired), concurred by Associate Justice Jose L. Sabio, Jr. (retired/deceased) and Associate Justice Hakim S. Abdulwahid.
7

Id. at 155. Rollo, pp. 21-22. Records, Vol. II, pp. 521-522. CA Rollo, p. 105.

10

11

Rivera v. Court of Appeals, G.R. No. 115625, January 23, 1998, 284 SCRA 673, 681.
12

Heirs of Emiliano Navarro v. Intermediate Appellate Court, G.R. No. 68166, February 12, 1997, 268 SCRA 74, 85.
13

Republic v. Court of Appeals, No. L-61647, October 12, 1984, 132 SCRA 514, 520.
14

Records, Vol. 2, p. 428 (Transfer Certificate of Title No. 44687).

15

Records, Vol. 1, pp. 138-139.

16

Cebu Portland Cement Company v. Municipality of Naga, Cebu, Nos. 24116-17, August 22, 1968, 24 SCRA 708, 712.
17

Quijano v. Development Bank of the Philippines, No. L-26419, October 16, 1970, 35 SCRA 270, 277.
18

The Civil Code states:

Article. 502. The following are of public dominion: (1) Rivers and their natural beds; xxx
19

II Tolentino, Commentaries and Jurisprudence on the Civil Code of the Philippines, 1994, pp. 137-138, opines: When River Dries Up. The present article contemplates a case where a river bed is abandoned by a natural change in the course of the river, which opens up a new bed. It has no reference to a case where the river simply dries up. In fact, it cannot be applied at all to the drying up of the river, because there are no persons whose lands are occupied by the waters of the river. Who shall own the river bed thus left dry? We believe that in such case, the river bed will continue to remain property of public dominion. Under article 502 of the Code, rivers and their natural beds are property of public dominion. In the absence of any provision vesting the ownership of the dried up river bed in some other person, it must continue to belong to the State.
20

Records, Vol. II, p. 522.

21

Republic v. Alconaba, G.R. No. 155012, April 14, 2004, 427 SCRA 611, 617.
22

Rollo, pp. 32-36. Bulos, Jr. v. Yasuma, G.R. No. 164159, July 17, 2007, 527 SCRA

23

727, 737.
24

Citibank, N.A. (formerly First National City Bank) v. Sabeniano, G.R. No. 156132, October 16, 2006, 504 SCRA 378, 409.
25

Ebreo v. Ebreo, G.R. No. 160065, February 28, 2006, 483 SCRA 583, 594; Seria v. Caballero, G.R. No. 127382, August 17, 2004, 436 SCRA 593, 604; Del Rosario v. Republic, G.R. No. 148338, June 6, 2002, 383 SCRA 262, 274; Bartolome v. Intermediate Appellate Court, G.R. No. 76792, March 12, 1990, 183 SCRA 102, 112.
26

Ebreo v. Ebreo, supra; Heirs of Mariano, Juan, Tarcela and Josefa Brusas v. Court of Appeals, G.R. No. 126875, August 26, 1999, 313 SCRA 176, 184; Rivera v. Court of Appeals, G.R. No. 107903, May 22, 1995, 244 SCRA 218, 222; Director of Lands v. Intermediate Appellate Court, G.R. No. 73246, March 2, 1993, 219 SCRA 339, 348; San Miguel Corporation v. Court of Appeals, G.R. No. 57667, May 28, 1990, 185 SCRA 722, 725.
27

I Tolentino, Commentaries and Jurisprudence on the Civil Code of the Philippines, 1994, p. 28.
28

Rollo, p. 88. G.R. No. 142595, October 15, 2003, 413 SCRA 469, 485-489.

29

30

Republic v. Sayo, G.R. No. 60413, October 31, 1990, 191 SCRA 71, 74.
31

Gordula v. Court of Appeals, G.R. No. 127296, January 22, 1998, 284 SCRA 617, 630.
32

Pagkatipunan v. Court of Appeals, G.R. No. 129682, March 21, 2002, 379 SCRA 621, 627.
33

Rollo, pp. 80-81.

34

G.R. No. 167707 and G.R. No. 173775, October 8, 2008, 568 SCRA 164, 192-193.
35

G.R. No. 134308, December 14, 2000, 348 SCRA 128, 139-140.

G.R. No. L-13250 October 29, 1971 THE COLLECTOR OF INTERNAL REVENUE, petitioner, vs. ANTONIO CAMPOS RUEDA, respondent.. Assistant Solicitor General Jose P. Alejandro and Special Attorney Jose G. Azurin, (O.S.G.) for petitioner. Ramirez and Ortigas for respondent.

FERNANDO, J.: The basic issue posed by petitioner Collector of Internal Revenue in this appeal from a decision of the Court of Tax Appeals as to whether or not the requisites of statehood, or at least so much thereof as may be necessary for the acquisition of an international personality, must be satisfied for a "foreign country" to fall within the exemption of Section 122 of the National Internal Revenue Code 1 is now ripe for adjudication. The Court of Tax Appeals answered the question in the negative, and thus reversed the action taken by petitioner Collector, who would hold respondent Antonio Campos Rueda, as administrator of the estate of the late Estrella Soriano Vda. de Cerdeira, liable for the sum of P161,874.95 as deficiency estate and inheritance taxes for the transfer of intangible personal properties in the Philippines, the deceased, a Spanish national having been a resident of Tangier, Morocco from 1931 up to the time of her death in 1955. In an earlier resolution promulgated May 30, 1962, this Court on the assumption that the need for resolving the principal question would be obviated, referred the matter back to the Court of Tax Appeals to determine whether the alleged law of Tangier did grant the reciprocal tax exemption required by the aforesaid Section 122. Then came an order from the Court of Tax Appeals submitting copies of legislation of Tangier that would manifest that the element of reciprocity was not lacking. It was not until July 29, 1969 that the case was deemed submitted for decision. When the petition for review was filed on January 2, 1958, the basic issue raised was impressed with an element of novelty. Four days thereafter, however, on January 6, 1958, it was held by this Court that the aforesaid provision does not require that the "foreign country" possess an international personality

to come within its terms. 2 Accordingly, we have to affirm. The decision of the Court of Tax Appeals, now under review, sets forth the background facts as follows: "This is an appeal interposed by petitioner Antonio Campos Rueda as administrator of the estate of the deceased Doa Maria de la Estrella Soriano Vda. de Cerdeira, from the decision of the respondent Collector of Internal Revenue, assessing against and demanding from the former the sum P161,874.95 as deficiency estate and inheritance taxes, including interest and penalties, on the transfer of intangible personal properties situated in the Philippines and belonging to said Maria de la Estrella Soriano Vda. de Cerdeira. Maria de la Estrella Soriano Vda. de Cerdeira (Maria Cerdeira for short) is a Spanish national, by reason of her marriage to a Spanish citizen and was a resident of Tangier, Morocco from 1931 up to her death on January 2, 1955. At the time of her demise she left, among others, intangible personal properties in the Philippines." 3 Then came this portion: "On September 29, 1955, petitioner filed a provisional estate and inheritance tax return on all the properties of the late Maria Cerdeira. On the same date, respondent, pending investigation, issued an assessment for state and inheritance taxes in the respective amounts of P111,592.48 and P157,791.48, or a total of P369,383.96 which tax liabilities were paid by petitioner ... . On November 17, 1955, an amended return was filed ... wherein intangible personal properties with the value of P396,308.90 were claimed as exempted from taxes. On November 23, 1955, respondent, pending investigation, issued another assessment for estate and inheritance taxes in the amounts of P202,262.40 and P267,402.84, respectively, or a total of P469,665.24 ... . In a letter dated January 11, 1956, respondent denied the request for exemption on the ground that the law of Tangier is not reciprocal to Section 122 of the National Internal Revenue Code. Hence, respondent demanded the payment of the sums of P239,439.49 representing deficiency estate and inheritance taxes including ad valorem penalties, surcharges, interests and compromise penalties ... . In a letter dated February 8, 1956, and received by respondent on the following day, petitioner requested for the reconsideration of the decision denying the claim for tax exemption of the intangible personal properties and the imposition of the 25% and 5% ad valorem penalties ... . However, respondent denied request, in his letter dated May 5, 1956 ... and received by

petitioner on May 21, 1956. Respondent premised the denial on the grounds that there was no reciprocity [with Tangier, which was moreover] a mere principality, not a foreign country. Consequently, respondent demanded the payment of the sums of P73,851.21 and P88,023.74 respectively, or a total of P161,874.95 as deficiency estate and inheritance taxes including surcharges, interests and compromise penalties." 4 The matter was then elevated to the Court of Tax Appeals. As there was no dispute between the parties regarding the values of the properties and the mathematical correctness of the deficiency assessments, the principal question as noted dealt with the reciprocity aspect as well as the insisting by the Collector of Internal Revenue that Tangier was not a foreign country within the meaning of Section 122. In ruling against the contention of the Collector of Internal Revenue, the appealed decision states: "In fine, we believe, and so hold, that the expression "foreign country", used in the last proviso of Section 122 of the National Internal Revenue Code, refers to a government of that foreign power which, although not an international person in the sense of international law, does not impose transfer or death upon intangible person properties of our citizens not residing therein, or whose law allows a similar exemption from such taxes. It is, therefore, not necessary that Tangier should have been recognized by our Government order to entitle the petitioner to the exemption benefits of the proviso of Section 122 of our Tax. Code." 5 Hence appeal to this court by petitioner. The respective briefs of the parties duly submitted, but as above indicated, instead of ruling definitely on the question, this Court, on May 30, 1962, resolve to inquire further into the question of reciprocity and sent back the case to the Court of Tax Appeals for the motion of evidence thereon. The dispositive portion of such resolution reads as follows: "While section 122 of the Philippine Tax Code aforequoted speaks of 'intangible personal property' in both subdivisions (a) and (b); the alleged laws of Tangier refer to 'bienes muebles situados en Tanger', 'bienes muebles radicantes en Tanger', 'movables' and 'movable property'. In order that this Court may be able to determine whether the alleged laws of Tangier grant the reciprocal tax exemptions required by Section 122 of the Tax Code, and without, for the time being, going

into the merits of the issues raised by the petitioner-appellant, the case is [remanded] to the Court of Tax Appeals for the reception of evidence or proof on whether or not the words `bienes muebles', 'movables' and 'movable properties as used in the Tangier laws, include or embrace 'intangible person property', as used in the Tax Code." 6 In line with the above resolution, the Court of Tax Appeals admitted evidence submitted by the administrator petitioner Antonio Campos Rueda, consisting of exhibits of laws of Tangier to the effect that "the transfers by reason of death of movable properties, corporeal or incorporeal, including furniture and personal effects as well as of securities, bonds, shares, ..., were not subject, on that date and in said zone, to the payment of any death tax, whatever might have been the nationality of the deceased or his heirs and legatees." It was further noted in an order of such Court referring the matter back to us that such were duly admitted in evidence during the hearing of the case on September 9, 1963. Respondent presented no evidence." 7 The controlling legal provision as noted is a proviso in Section 122 of the National Internal Revenue Code. It reads thus: "That no tax shall be collected under this Title in respect of intangible personal property (a) if the decedent at the time of his death was a resident of a foreign country which at the time of his death did not impose a transfer tax or death tax of any character in respect of intangible person property of the Philippines not residing in that foreign country, or (b) if the laws of the foreign country of which the decedent was a resident at the time of his death allow a similar exemption from transfer taxes or death taxes of every character in respect of intangible personal property owned by citizens of the Philippines not residing in that foreign country." 8 The only obstacle therefore to a definitive ruling is whether or not as vigorously insisted upon by petitioner the acquisition of internal personality is a condition sine qua non to Tangier being considered a "foreign country". Deference to the De Lara ruling, as was made clear in the opening paragraph of this opinion, calls for an affirmance of the decision of the Court of Tax Appeals. It does not admit of doubt that if a foreign country is to be identified with a state, it is required in line with Pound's formulation that it be a politically organized sovereign community independent of outside control bound by penalties of nationhood, legally supreme within its

territory, acting through a government functioning under a regime of law. 9 It is thus a sovereign person with the people composing it viewed as an organized corporate society under a government with the legal competence to exact obedience to its commands. 10 It has been referred to as a body-politic organized by common consent for mutual defense and mutual safety and to promote the general welfare. 11 Correctly has it been described by Esmein as "the juridical personification of the nation." 12 This is to view it in the light of its historical development. The stress is on its being a nation, its people occupying a definite territory, politically organized, exercising by means of its government its sovereign will over the individuals within it and maintaining its separate international personality. Laski could speak of it then as a territorial society divided into government and subjects, claiming within its allotted area a supremacy over all other institutions. 13 McIver similarly would point to the power entrusted to its government to maintain within its territory the conditions of a legal order and to enter into international relations. 14 With the latter requisite satisfied, international law do not exact independence as a condition of statehood. So Hyde did opine. 15 Even on the assumption then that Tangier is bereft of international personality, petitioner has not successfully made out a case. It bears repeating that four days after the filing of this petition on January 6, 1958 in Collector of Internal Revenue v. De Lara, 16 it was specifically held by us: "Considering the State of California as a foreign country in relation to section 122 of our Tax Code we believe and hold, as did the Tax Court, that the Ancilliary Administrator is entitled the exemption from the inheritance tax on the intangible personal property found in the Philippines." 17 There can be no doubt that California as a state in the American Union was in the alleged requisite of international personality. Nonetheless, it was held to be a foreign country within the meaning of Section 122 of the National Internal Revenue Code. 18 What is undeniable is that even prior to the De Lara ruling, this Court did commit itself to the doctrine that even a tiny principality, that of Liechtenstein, hardly an international personality in the sense, did fall under this exempt category. So it appears in an opinion of the Court by the then Acting Chief Justicem Bengson who thereafter assumed that position in a permanent capacity, in Kiene v. Collector of Internal

Revenue. 19 As was therein noted: 'The Board found from the documents submitted to it proof of the laws of Liechtenstein that said country does not impose estate, inheritance and gift taxes on intangible property of Filipino citizens not residing in that country. Wherefore, the Board declared that pursuant to the exemption above established, no estate or inheritance taxes were collectible, Ludwig Kiene being a resident of Liechtestein when he passed away." 20 Then came this definitive ruling: "The Collector hereafter named the respondent cites decisions of the United States Supreme Court and of this Court, holding that intangible personal property in the Philippines belonging to a non-resident foreigner, who died outside of this country is subject to the estate tax, in disregard of the principle 'mobilia sequuntur personam'. Such property is admittedly taxable here. Without the proviso above quoted, the shares of stock owned here by the Ludwig Kiene would be concededly subject to estate and inheritance taxes. Nevertheless our Congress chose to make an exemption where conditions are such that demand reciprocity as in this case. And the exemption must be honored." 21 WHEREFORE, the decision of the respondent Court of Tax Appeals of October 30, 1957 is affirmed. Without pronouncement as to costs. Concepcion, C.J., Makalintal, Makasiar, JJ., concur. Zaldivar, Castro, Villamor and

Reyes, J.B.L., J., concurs in the result. Teehankee and Barredo, JJ., took no part.

Footnotes 1 Commonwealth Act No. 466 as amended (1939). 2 Collector of Internal Revenue v. De Lara, 102 Phil. 813 (1958). 3 Annex C, Petition, Decision of Court of Tax Appeals, p. 1. 4 Ibid, pp. 2-3.

5 Ibid, p. 9. 6 Resolution, pp. 4-5. 7 Order of November 19, 1963 p. 2. 8 Section 122 of the National Internal Revenue Code (1939) reads insofar as relevant: "For the purposes of this Title the terms 'gross estate' and 'gift' include real estate and tangible personal property, or mixed, physically located in the Philippines; franchise which must be exercised in the Philippines; shares, obligations, or bonds issued by any corporation or sociedad anonima organized or constituted in the Philippines in accordance with its laws; shares, obligations, or bonds issued by any foreign corporation eighty-five per centum of the business of which is located in the Philippines; shares, obligations, or bonds issued by any foreign corporation if such shares, obligations, or bonds have acquired a business situs in the Philippines; shares or rights in any partnership, business or industry established in the Philippines; or any personal property, whether tangible or intangible, located in the Philippines; Provided, however, That in the case of a resident, the transmission or transfer of any intangible personal property, regardless of its location, subject to the taxes prescribed in this Title; And provided, further, that no tax shall be collected under this Title in respect of intangible personal property (a) if the decedent at the time of his death was a resident of a foreign country which at the time of his death did not impose a transfer tax or death tax of any character in respect of intangible personal property of citizens of the Philippines not residing in that foreign country, or (b) if the laws of the foreign country of which the decedent was a resident at the time of his death allow a similar exemption from transfer taxes or death taxes of every character in respect of intangible personal property owned by citizens of the Philippines not residing in that foreign country." 9 Cf. Pound: "The political organization of a society legally supreme within and independent of legal control from without." II Jurisprudence, p. 346 (1959). 10 Cf. Willoughby, Fundamental Concepts of Public Law, p. 3 (1925). 11 Cf. 1 Cooley, Constitutional Limitations, p. 3 (1927).

12 Cf. Cohen, Recent Theories of Sovereignty, p. 15 (1937). Pitamic speaks of it as a juridical organization of human beings. Treatise on the State, p. 17 (1933). 13 Laski, Grammar of Polities, p. 25 (1934). 14 Cf. McIver, The State, p. 22 (1926). 15 Hyde, International Law, 2nd ed., p. 22 (1945). 16 102 Phil. 813 (1958). 17 Ibid, p. 820. 18 In the subsequent case of Collector of Internal Revenue v. Fisher, L-11622, January 28, 1961, 1 SCRA 93, this Court did find that the reciprocity found in the California statutes was partial not total, thus holding that Section 122 would not apply, without however reversing the doctrine that an international personality is not a requisite. " 19 97 Phil. 352 (1955). 20 Ibid, p. 354.

G.R. No. 143377

February 20, 2001

SHIPSIDE INCORPORATED, petitioner, vs. THE HON. COURT OF APPEALS [Special Former Twelfth Division], HON. REGIONAL TRIAL COURT, BRANCH 26 (San Fernando City, La Union) & The REPUBLIC OF THE PHILIPPINES, respondents. MELO, J.: Before the Court is a petition for certiorari filed by Shipside Incorporated under Rule 65 of the 1997 Rules on Civil Procedure against the resolutions of the Court of Appeals promulgated on November 4, 1999 and May 23, 2000, which respectively, dismissed a petition for certiorari and prohibition and thereafter denied a motion for reconsideration. The antecedent facts are, undisputed: On October 29, 1958, Original Certificate of Title No. 0-381 was issued in favor of Rafael Galvez, over four parcels of land - Lot 1 with 6,571 square meters; Lot 2, with 16,777 square meters; Lot 3 with 1,583 square meters; and Lot 4, with 508 square meters. On April 11, 1960, Lots No. 1 and 4 were conveyed by Rafael Galvez in favor of Filipina Mamaril, Cleopatra Llana, Regina Bustos, and Erlinda Balatbat in a deed of sale which was inscribed as Entry No. 9115 OCT No.0-381 on August 10, 1960. Consequently, Transfer Certificate No. T-4304 was issued in favor of the buyers covering Lots No. 1 and 4. Lot No. 1 is described as: A parcel of land (Lot 1, Plan PSU-159621, L.R. Case No. N-361; L.R.C. Record No. N-14012, situated in the Barrio of Poro, Municipality of San Fernando, Province of La Union, bounded on the NE, by the Foreshore; on the SE, by Public Land and property of the Benguet Consolidated Mining Company; on the SW, by properties of Rafael Galvez (US Military Reservation Camp Wallace) and Policarpio Munar; and on the NW, by an old Barrio Road. Beginning at a point marked "1" on plan, being S. 74 deg. 11'W., 2670.36 from B.L.L.M. 1, San Fernando, thence

S. 66 deg. 19'E., 134.95 m. to point 2; S.14 deg. 57'W., 11.79 m. to point 3; S. 12 deg. 45'W., 27.00 m. to point 4; S. 12 deg. 45'W, 6.90 m. to point 5; N. 69 deg., 32'W., 106.00 m. to point 6; N. 52 deg., 21'W., 36.85 m. to point 7; N. 21 deg. 31'E., 42.01 m. to the point of beginning; containing an area of SIX THOUSAND FIVE HUNDRED AND SEVENTY - ONE (6,571) SQUARE METERS, more or less. All points referred to are indicated on the plan; and marked on the ground; bearings true, date of survey, February 4-21, 1957. Lot No. 4 has the following technical description: A parcel of land (Lot 4, Plan PSU-159621, L.R. Case No. N-361 L.R.C. Record No. N-14012), situated in the Barrio of Poro, Municipality of San Fernando, La Union. Bounded on the SE by the property of the Benguet Consolidated Mining Company; on the S. by property of Pelagia Carino; and on the NW by the property of Rafael Galvez (US Military Reservation, Camp Wallace). Beginning at a point marked "1" on plan, being S. deg. 24'W. 2591.69 m. from B.L.L.M. 1, San Fernando, thence S. 12 deg. 45'W., 73.03 m. to point 2; N. 79 deg. 59'W., 13.92 m. to point 3; N. 23 deg. 26'E., 75.00 m. to the point of beginning; containing an area of FIVE HUNDED AND EIGHT (508) SQUARE METERS, more or less. All points referred to are indicated in the plan and marked on the ground; bearings true, date of survey, February 4-21, 1957. On August 16, 1960, Mamaril, et al. sold Lots No. 1 and 4 to Lepanto Consolidated Mining Company. The deed of sale covering the aforesaid property was inscribed as Entry No. 9173 on TCT No. T4304. Subsequently, Transfer Certificate No. T-4314 was issued in the name of Lepanto Consolidated Mining Company as owner of Lots No. 1 and 4. On February 1, 1963, unknown to Lepanto Consolidated Mining Company, the Court of First Instance of La Union, Second Judicial District, issued an Order in Land Registration Case No. N- 361 (LRC

Record No. N-14012) entitled "Rafael Galvez, Applicant, Eliza Bustos, et al., Parties-In-Interest; Republic of the Philippines, Movant" declaring OCT No. 0-381 of the Registry of Deeds for the Province of La Union issued in the name of Rafael Galvez, null and void, and ordered the cancellation thereof. The Order pertinently provided: Accordingly, with the foregoing, and without prejudice on the rights of incidental parties concerned herein to institute their respective appropriate actions compatible with whatever cause they may have, it is hereby declared and this court so holds that both proceedings in Land Registration Case No. N-361 and Original Certificate No. 0-381 of the Registry of Deeds for the province of La Union issued in virtue thereof and registered in the name of Rafael Galvez, are null and void; the Register of Deeds for the Province of La Union is hereby ordered to cancel the said original certificate and/or such other certificates of title issued subsequent thereto having reference to the same parcels of land; without pronouncement as to costs. On October 28, 1963, Lepanto Consolidated Mining Company sold to herein petitioner Lots No. 1 and 4, with the deed being entered in TCT No. 4314 as entry No. 12381. Transfer Certificate of Title No. T5710 was thus issued in favor of the petitioner which starting since then exercised proprietary rights over Lots No. 1 and 4. In the meantime, Rafael Galvez filed his motion for reconsideration against the order issued by the trial court declaring OCT No. 0-381 null and void. The motion was denied on January 25, 1965. On appeal, the Court of Appeals ruled in favor of the Republic of the Philippines in a Resolution promulgated on August 14, 1973 in CAG.R. No. 36061-R.
1wphi1.nt

Thereafter, the Court of Appeals issued an Entry of Judgment, certifying that its decision dated August 14, 1973 became final and executory on October 23, 1973. On April 22, 1974, the trial court in L.R.C. Case No. N-361 issued a writ of execution of the judgment which was served on the Register of Deeds, San Fernando, La Union on April 29, 1974. Twenty four long years, thereafter, on January 14, 1999, the Office of

the Solicitor General received a letter dated January 11, 1999 from Mr. Victor G. Floresca, Vice-President, John Hay Poro Point Development Corporation, stating that the aforementioned orders and decision of the trial court in L.R.C. No. N-361 have not been executed by the Register of Deeds, San Fernando, La Union despite receipt of the writ of execution. On April 21, 1999, the Office of the Solicitor General filed a complaint for revival of judgment and cancellation of titles before the Regional Trial Court of the First Judicial Region (Branch 26, San Fernando, La Union) docketed therein as Civil Case No. 6346 entitled, "Republic of the Philippines, Plaintiff, versus Heirs of Rafael Galvez, represented by Teresita Tan, Reynaldo Mamaril, Elisa Bustos, Erlinda Balatbat, Regina Bustos, Shipside Incorporated and the Register of Deeds of La Union, Defendants." The evidence shows that the impleaded defendants (except the Register of Deeds of the province of La Union) are the successors-ininterest of Rafael Galvez (not Reynaldo Galvez as alleged by the Solicitor General) over the property covered by OCT No. 0-381, namely: (a) Shipside Inc. which is presently the registered owner in fee simple of Lots No. 1 and 4 covered by TCT No. T -5710, with a total area of 7,079 square meters; (b) Elisa Bustos, Jesusito Galvez, and Teresita Tan who are the registered owners of Lot No. 2 of OCT No. 0-381; and (c) Elisa Bustos, Filipina Mamaril, Regina Bustos and Erlinda Balatbat who are the registered owners of Lot No. 3 of OCT No. 0-381, now covered by TCT No. T-4916, with an area of 1,583 square meters. In its complaint in Civil Case No.6346, the Solicitor General argued that since the trial court in LRC Case No. 361 had ruled and declared OCT No. 0-381 to be null and void, which ruling was subsequently affirmed by the Court of Appeals, the defendants-successors-ininterest of Rafael Galvez have no valid title over the property covered by OCT No. 0-381, and the subsequent Torrens titles issued in their names should be consequently cancelled. On July 22, 1999, petitioner Shipside, Inc. filed its Motion to Dismiss, based on the following grounds: (1) the complaint stated no cause of action because only final and executory judgments may be subject of

an action for revival of judgment; (2) .the plaintiff is not the real partyin-interest because the real property covered by the Torrens titles sought to be cancelled, allegedly part of Camp Wallace (Wallace Air Station), were under the ownership and administration of the Bases Conversion Development Authority (BCDA) under Republic Act No. 7227; (3) plaintiff's cause of action is barred by prescription; {4) twenty-five years having lapsed since the issuance of the writ of execution, no action for revival of judgment may be instituted because under Paragraph 3 of Article 1144 of the Civil Code, such action may be brought only within ten (10) years from the time the judgment had been rendered. An opposition to the motion to dismiss was filed by the Solicitor General on August 23, 1999, alleging among others, that: (1) the real party-in-interest is the Republic of the Philippines; and (2) prescription does not run against the State. On August 31, 1999, the trial court denied petitioner's motion to dismiss and on October 14, 1999, its motion for reconsideration was likewise turned down. On October 21, 1999, petitioner instituted a petition for certiorari and prohibition with the Court of Appeals, docketed therein as CA-G.R. SP No. 55535, on the ground that the orders of the trial court denying its motion to dismiss and its subsequent motion for reconsideration were issued in excess of jurisdiction. On November 4, 1999, the Court of Appeals dismissed the petition in CA-G.R. SP No. 55535 on the ground that the verification and certification in the petition, tinder the signature of Lorenzo Balbin, Jr., was made without authority, there being no proof therein that Balbin was authorized to institute the petition for and in behalf and of petitioner. On May 23, 2000, the Court of Appeals denied petitioner's, motion for reconsideration on the grounds that: (1) a complaint filed on behalf of a corporation can be made only if authorized by its Board of Directors, and in the absence thereof, the petition cannot prosper and be granted due course; and (2) petitioner was unable to show that it had substantially complied with the rule requiring proof of authority to

institute an action or proceeding. Hence, the instant petition. In support of its petition, Shipside, Inc. asseverates that: 1. The Honorable Court of Appeals gravely abused its discretion in dismissing the petition when it made a conclusive legal presumption that Mr. Balbin had no authority to sign the petition despite the clarity of laws, jurisprudence and Secretary's certificate to the contrary; 2. The Honorable Court of Appeals abused its discretion when it dismissed the petition, in effect affirming the grave abuse of discretion committed by the lower court when it refused to dismiss the 1999 Complaint for Revival of a 1973 judgment, in violation of clear laws and jurisprudence. Petitioner likewise adopted the arguments it raised in the petition' and comment/reply it filed with the Court of Appeals, attached to its petition as Exhibit "L" and "N", respectively. In his Comment, the Solicitor General moved for the dismissal of the instant petition based on the following considerations: (1) Lorenzo Balbin, who signed for and in behalf of petitioner in the verification and certification of non-forum shopping portion of the petition, failed to show proof of his authorization to institute the petition for certiorari and prohibition with the Court of Appeals, thus the latter court acted correctly in dismissing the same; (2) the real party-in-interest in the case at bar being the Republic of the Philippines, its claims are imprescriptible. In order to preserve the rights of herein parties, the Court issued a temporary restraining order on June 26, 2000 enjoining the trial court from conducting further proceedings in Civil Case No. 6346. The issues posited in this case are: (1) whether or not an authorization from petitioner's Board of Directors is still required in order for its resident manager to institute or commence a legal action for and in behalf of the corporation; and (2) whether or not the Republic of the Philippines can maintain the action for revival of judgment herein.

We find for petitioner. Anent the first issue: The Court of Appeals dismissed the petition for certiorari on the ground that Lorenzo Balbin, the resident manager for petitioner, who was the signatory in the verification and certification on non-forum shopping, failed to show proof that he was authorized by petitioner's board of directors to file such a petition. A corporation, such as petitioner, has no power except those expressly conferred on it by the Corporation Code and those that are implied or incidental to its existence. In turn, a corporation exercises said powers through its board of directors and/or its duly authorized officers and agents. Thus, it has been observed that the power of a corporation to sue and be sued in any court is lodged with the board of directors that exercises its corporate powers (Premium Marble Resources, Inc. v. CA, 264 SCRA 11 [1996]). In turn, physical acts of the corporation, like the signing of documents, can be performed only by natural persons duly authorized for the purpose by corporate bylaws or by a specific act of the board of directors. It is undisputed that on October 21, 1999, the time petitioner's Resident Manager Balbin filed the petition, there was no proof attached thereto that Balbin was authorized to sign the verification and non-forum shopping certification therein, as a consequence of which the petition was dismissed by the Court of Appeals. However, subsequent to such dismissal, petitioner filed a motion for reconsideration, attaching to said motion a certificate issued by its "board secretary stating that on October 11, 1999, or ten days prior to the filing of the petition, Balbin had been authorized by petitioner's board of directors to file said petition. The Court has consistently held that the requirement regarding verification of a pleading is formal, not jurisdictional (Uy v. LandBank, G.R. No. 136100, July 24, 2000). Such requirement is simply a condition affecting the form of the pleading, non-compliance with which does not necessarily render the pleading fatally defective. Verification is simply intended to secure an assurance that the allegations in the pleading are true and correct and not the product of

the imagination or a matter of speculation, and that the pleading is filed in good faith. The court may order the correction of the pleading if verification is lacking or act on the pleading although it is not verified, if the attending circumstances are such that strict compliance with the rules may be dispensed with in order that the ends of justice may thereby be served. On the other hand, the lack of certification, against forum shopping is generally not curable by the submission thereof after the filing of the petition. Section 5, Rule 45 of the 1997 Rules of civil Procedure provides that the failure of the petitioner to submit the required documents that should accompany the petition, including the certification against forum shopping, shall be sufficient ground for the dismissal thereof. The same rule applies to certifications against forum shopping signed by a person on behalf of a corporation which are unaccompanied by proof that said signatory is authorized to file a petition on behalf of the corporation. In certain exceptional circumstances, however, the Court has allowed the belated filing of the certification. In Loyola v. Court of Appeals, et. al. (245 SCRA 477 [1995]), the Court considered the filing of the certification one day after the filing of an election protest as substantial compliance with the requirement. In Roadway Express, Inc. v. Court of Appeals, et. al. (264 SCRA 696 [1996]), the Court allowed the filing of the certification 14 days before the dismissal of the petition. In "Uy v. LandBank, supra, the Court had dismissed Uy's petition for lack of verification and certification against non-forum shopping. However, it subsequently reinstated the petition after Uy submitted a motion to admit certification and non-forum shopping certification. In all these cases, there were special circumstances or compelling "reasons that justified the relaxation of the rule requiring verification and certification on non-forum shopping. In the instant case, the merits of petitioner' case should be considered special circumstances or compelling reasons that justify tempering the requirement in regard to the certificate of non-forum shopping. Moreover, in Loyola, Roadway, and Uy, the Court excused non-compliance with the requirement as to the certificate of nonforum shopping. With more reason should we allow the instant petition since petitioner herein did submit a certification on non-forum

shopping, failing only to show proof that the signatory was authorized to do so. That petitioner subsequently submitted a secretary's certificate attesting that Balbin was authorized to file an action on behalf of petitioner likewise, mitigates this oversight. It must also be kept in mind that while the requirement of the certificate of non-forum shopping is mandatory, nonetheless the requirements must not be interpreted too literally and thus defeat the objective of preventing the undesirable practice of forum-shopping (Bernardo v. NLRC, .255 SCRA 108 [1996]). Lastly, technical rules of procedure should be used to promote, not frustrate justice. While the swift unclogging of court dockets is a laudable objective, the granting of substantial justice is an even more urgent ideal. Now to the second issue: The action instituted by the Solicitor General in the trial court is one for revival of judgment which is governed by Article 1144(3) of the Civil Code and Section 6, Rule 39 of the 1997 Rules on Civil Procedure. Article 1144(3) provides that an action upon a judgment "must be brought within 10 years from the time the right of action accrues." On the other hand, Section 6, Rule 39 provides that a final and executory judgment or order may be executed on motion within five (5) years from the date of its entry, but that after the lapse of such time, and before it is barred by the statute of limitations, a judgment may be enforced by action. Taking these two provisions into consideration, it is plain that an action for revival of judgment must be brought within ten years from the time said judgment becomes final. From the records of this, case, it is clear that the judgment sought to be revived became final on October 23, 1973. On the other hand, the action for revival of judgment was instituted only in 1999, or more than twenty-five (25) years after the judgment had become final. Hence, the action is barred by extinctive prescription considering that 'such an action can be instituted only within ten (10) years from the time the cause of action accrues. The Solicitor General, nonetheless, argues that the State's cause , of action in the cancellation of the land title issued to petitioner's predecessor-in-interest is imprescriptible because it is included in

Camp Wallace, which belongs to the government. The argument is misleading. While it is true that prescription does not run against the State, the same may not be invoked by the government in this case since it is no longer interested in the subject matter. While Camp Wallace may have belonged to the government at the time Rafael Galvez's title was ordered cancelled in Land Registration Case No. N-361, the same no longer holds true today. Republic Act No. 7227, otherwise known as the Bases Conversion and Development Act of 1992, created the Bases Conversion and Development Authority Section 4 pertinently provides: Section 4. Purposes of the Conversion Authority. - The Conversion Authority shall have the following purposes: (a) To own, hold and/or administer the military reservations of John Hay Air Station, Wallace Air Station, O'Donnell Transmitter Station, San Miguel Naval Communications Station, Mt. Sta. Rita Station (Hermosa, Bataan) and those portions of Metro Manila military camps which may be transferred to it by the President; Section 2 of Proclamation No. 216, issued on July 27, 1993, also provides: Section 2. Transfer of Wallace Air Station Areas to the Bases Conversion and Development Authority. - All areas covered by the Wallace Air Station as embraced and defined by the 1947 Military Bases Agreement between the Philippines and the United States of America, as amended, excluding those covered by Presidential Proclamations and some 25-hectare area for the radar and communication station of the Philippine Air Force, are hereby transferred to the Bases Conversion Development Authority ... With the transfer of Camp Wallace to the BCDA, the government no longer has a right or interest to protect. Consequently, the Republic is not a real party in interest and it may not institute the instant action. Nor may it raise the defense of imprescriptibility, the same being applicable only in cases where the government is a party in interest.

Under Section 2 of Rule 3 of the 1997 Rules of Civil Procedure, "every action must be prosecuted or defended in the name of the real party in interest." To qualify a person to be a real party in interest in whose name an action must be prosecuted, he must appear to be the present real owner of the right sought to enforced (Pioneer Insurance v. CA, 175 SCRA 668 [1989]). A real party in interest is the party who stands to be benefited or injured by the judgment in the suit, or the party entitled to the avails of the suit. And by real interest is meant a present substantial interest, as distinguished from a mere expectancy, or a future, contingent, subordinate or consequential interest (Ibonilla v. Province of Cebu, 210 SCRA 526 [1992]). Being the owner of the areas covered by Camp Wallace, it is the Bases Conversion and Development Authority, not the Government, which stands to be benefited if the land covered by TCT No. T-5710 issued in the name of petitioner is cancelled. Nonetheless, it has been posited that the transfer of military reservations and their extensions to the BCDA is basically for the purpose of accelerating the sound and balanced conversion of these military reservations into alternative productive uses and to enhance the benefits to be derived from such property as a measure of promoting the economic and social development, particularly of Central Luzon and, in general, the country's goal for enhancement (Section 2, Republic Act No. 7227). It is contended that the transfer of these military reservations to the Conversion Authority does not amount to an abdication on the part of the Republic of its interests, but simply a recognition of the need to create a body corporate which will act as its agent for the realization of its program. It is consequently asserted that the Republic remains to be the real party in interest and the Conversion Authority merely its agent. We, however, must not lose sight of the fact that the BCDA is an entity invested with a personality separate and distinct from the government. Section 3 of Republic Act No. 7227 reads: Section 3. Creation of the Bases Conversion and Development Authority. - There is hereby created a body corporate to be known as the Conversion Authority which shall have the attribute of perpetual succession and shall be vested with the powers of a corporation.

It may not be amiss to state at this point that the functions of government have been classified into governmental or constituent and proprietary or ministrant. While public benefit and public welfare, particularly, the promotion of the economic and social development of Central Luzon, may be attributable to the operation of the BCDA, yet it is certain that the functions performed by the BCDA are basically proprietary in nature. The promotion of economic and social development of Central Luzon, in particular, and the country's goal for enhancement, in general, do not make the BCDA equivalent to the Government. Other corporations have been created by government to act as its agents for the realization of its programs, the SSS, GSIS, NAWASA arid the NIA, to count a few, and yet, the Court has ruled that these entities, although performing functions aimed at promoting public interest and public welfare, are not government-function corporations invested with governmental attributes. It may thus be said that the BCDA is not a mere agency of the Government but a corporate body performing proprietary functions. Moreover, Section 5 of Republic Act No. 7227 provides: Section 5. Powers of the Conversion Authority. - To carry out its objectives under this Act, the Conversion Authority is hereby vested with the following powers: (a) To succeed in its corporate name, to sue and be sued in such corporate name and to adopt, alter and use a corporate seal which shall be judicially noticed; Having the capacity to sue or be sued, it should thus be the BCDA which may file an action to cancel petitioner's title, not the Republic, the former being the real party in interest. One having no right or interest to protect cannot invoke the jurisdiction of the court as a party plaintiff in an action (Ralla v. Ralla, 199 SCRA 495 [1991]). A suit may be dismissed if the plaintiff or the defendant is not a real party in interest. If the suit is not brought in the name of the real party in interest, a motion to dismiss may be filed, as was done by petitioner in this case, on the ground that the complaint states no cause of action (Tanpingco v. IAC, 207 SCRA 652 [1992]). However, E.B. Marcha Transport Co., Inc. v. IAC (147 SCRA 276

[1987]) is cited as authority that the Republic is the proper party to sue for the recovery of possession of property which at the time of the institution of the suit was no longer held by the national government but by the Philippine Ports Authority .In E.B. Marcha, the Court ruled: It can be said that in suing for the recovery of the rentals, the Republic of the Philippines, acted as principal of the Philippine Ports Authority, directly exercising the commission it had earlier conferred on the latter as its agent. We may presume that, by doing so, the Republic of the Philippines did not intend .to retain the said rentals for its own use, considering that by its voluntary act it had transferred the land in question to the Philippine Ports Authority effective July 11, 1974. The Republic of the Philippines had simply sought to assist, not supplant, the Philippine Ports Authority, whose title to the disputed property it continues to recognize, We may expect then that the said rentals, once collected by the Republic of the Philippines, shall be turned over by it to the Philippine Ports Authority conformably to the purposes of P.D. No. 857. E.B. Marcha is, however, not on all fours with the case at bar. In the former, the Court considered the Republic a proper party to sue since the claims of the Republic and the Philippine Ports Authority against the petitioner therein were the same. To dismiss the complaint in E.B. Marcha would have brought needless delay in the settlement of the matter since the PPA would have to refile the case on the same claim already litigated upon. Such is not the case here since to allow the government to sue herein enables it to raise the issue of imprescriptibility, a claim which is not available to the BCDA. The rule that prescription does not run against the State does not apply to corporations or artificial bodies created by the State for special purposes, it being said that when the title of the Republic has been divested, its grantees, although artificial bodies of its own creation, are in the same category as ordinary persons (Kingston v. LeHigh Valley Coal Co., 241 Pa 469). By raising the claim of imprescriptibility, a claim which cannot be raised by the BCDA, the Government not only assists the BCDA, as it did in E.B. Marcha, it even supplants the latter, a course of action proscribed by said case. Moreover, to recognize the Government as a proper party to sue in this case would set a bad precedent as it would allow the Republic to

prosecute, on behalf of government-owned or controlled corporations, causes of action which have already prescribed, on the pretext that the Government is the real party in interest against whom prescription does not run, said corporations having been created merely as agents for the realization of government programs. Parenthetically, petitioner was not a party to the original suit for cancellation of title commenced by the Republic twenty-seven years for which it is now being made to answer, nay, being made to suffer financial losses. It should also be noted that petitioner is unquestionably a buyer in good faith and for value, having acquired the property in 1963, or 5 years after the issuance of the original certificate of title, as a third transferee. If only not to do violence and to give some measure of respect to the Torrens System, petitioner must be afforded some measure of protection. One more point. Since the portion in dispute now forms part of the property owned and administered by the Bases Conversion and Development Authority, it is alienable and registerable real property. We find it unnecessary to rule on the other matters raised by the herein parties. WHEREFORE, the petition is hereby granted and the orders dated August 31, 1999 and October 4, 1999 of the Regional Trial, Court of the First National Judicial Region (Branch 26, San Fernando, La Union) in Civil Case No. 6346 entitled "Republic of the Philippines, Plaintiff, versus Heirs of Rafael Galvez, et. al., Defendants" as well as the resolutions promulgated on November 4, 1999 and May 23, 2000 by the Court of Appeals (Twelfth Division) in CA-G.R. SP No. 55535 entitled "Shipside, Inc., Petitioner versus Ron. Alfredo Cajigal, as Judge, RTC, San Fernando, La Union, Branch 26, and the Republic of the Philippines, Respondents" are hereby reversed and set aside. The complaint in Civil Case No. 6346, Regional Trial Court, Branch 26, San Fernando City, La Union entitled "Republic of the Philippines, Plaintiff, versus Heirs of Rafael

Galvez, et al." is ordered dismissed, without prejudice to the filing of an appropriate action by the Bases Development and Conversion Authority. SO ORDERED. Vitug, Panganiban, Gonzaga-Reyes, and Sandoval-Gutierrez, JJ., concur.

G.R. No. 143377 February 20, 2001 (Shipside Incorporated vs. Court of Appeals and Republic of the Philippines) SEPARATE OPINION VITUG, J.: I find no doctrinal difficulty in adhering to the draft ponencia written by our esteemed Chairman, Mr. Justice JARM, insofar as it declares that an action for revival of judgment is barred by extinctive prescription, if not brought within ten (10) years from the time the right of action accrues, pursuant to Article 1144(3) of the New Civil Code. It appears that the judgment in the instant case has become final on 23 October 1973 or well more than two decades prior to the action for its revival instituted only in 1999.
1wphi1.nt

With due respect, however, I still am unable to subscribe to the idea that prescription' may not be invoked by the government in this case upon the thesis that the transfer of Camp Wallace to the Bases Conversion Development Authority renders the Republic with no right or interest to protect and thus unqualified under the rules of procedure to be the real party-in-interest. While it is true that Republic Act 7227, otherwise known as the Bases Conversion and Development Act of 1992, authorizes the transfer of the military reservations and their extensions to the Conversion Authority, the same, however, is basically for the purpose of accelerating the sound and balanced conversion of these military reservations into

alternative productive uses and to enhance the benefits to be derived from such property as a measure of promoting the economic and social development, particularly, of Central Luzon and, In general, the country's goal for enhancement.1 The transfer of these military reservations to the Conversion Authority does not amount to an abdication on the part of the Republic of its interests but simply a recognition of the need to create a body corporate which will act as its agent for the realization of its program specified in the Act. It ought to follow that the Republic remains to be the real party-in-interest and the Conversion Authority being merely its agent. In E.B. Marcha Transport Co., Inc. vs. Intermediate Appellate Court,2 the Court succinctly resolved the issue of whether or not the Republic of the Philippines would be a proper party to sue for the recovery of possession of property which at the time of the institution of the suit was no longer being held by the national government but by the Philippine Ports Authority. The Court ruled: "More importantly, as we see it, dismissing the complaint on the ground that the Republic of the Philippines is not the proper party would result in needless delay in the settlement of this matter and also in derogation of the policy against multiplicity of suits. Such a decision would require the Philippine Ports Authority to refile the very same complaint already proved by the Republic of the Philippines and bring back the parties as it were to square one. "It can be said that in suing for the recovery of the rentals, the Republic of the Philippines, acted as principal of the Philippine Ports Authority, directly exercising the commission it had earlier conferred on the latter as its agent. We may presume that, by doing so, the Republic of the Philippines did not intend to retain the said rentals for its own use, considering that by its voluntary act it had transferred the land in question to the Philippine Ports Authority effective July 11, 1974. The Republic of the Philippines had simply sought to assist, not supplant, the Philippine Ports Authority, whose title to the disputed property it continues to recognize. We may exact then that the said rentals, once collected by the Republic of the Philippines, shall be turned over by it to the Philippine Ports Authority conformably to the purposes of P.D. No. 857."

There would seem to be no cogent reason for ignoring that rationale specially when taken in light of the fact that the original suit for cancellation of title of petitioner's predecessor-in-interest was commenced by the Republic itself, and it was only in 1992 that the subject military camp was transferred to the Conversion Authority. Footnotes:
1

Section 2, Republic Act 7227. 147 SCRA 276.

G.R. No. L-25843 July 25, 1974 MELCHORA CABANAS, plaintiff-appellee, vs. FRANCISCO PILAPIL, defendant-appellant. Seno, Mendoza & Associates for plaintiff-appellee. Emilio Benitez, Jr. for defendant-appellant.

FERNANDO, J.:p The disputants in this appeal from a question of law from a lower court decision are the mother and the uncle of a minor beneficiary of the proceeds of an insurance policy issued on the life of her deceased father. The dispute centers as to who of them should be entitled to act as trustee thereof. The lower court applying the appropriate Civil Code provisions decided in favor of the mother, the plaintiff in this case. Defendant uncle appealed. As noted, the lower court acted the way it did following the specific mandate of the law. In addition, it must have taken into account the principle that in cases of this nature the welfare of the child is the paramount consideration. It is not an unreasonable assumption that between a mother and an uncle, the former is likely to lavish more care on and pay greater attention to her. This is all the more likely considering that the child is with the mother. There are no circumstances then that did militate against what conforms to the natural order of things, even if the language of the law were not as clear. It is not to be lost sight of either that the judiciary pursuant to its role as an agency of the State as parens patriae, with an even greater stress on family unity under the present Constitution, did weigh in the balance the opposing claims and did come to the conclusion that the welfare of the child called for the mother to be entrusted with such responsibility. We have to affirm. The appealed decision made clear: "There is no controversy as to the facts. " 1 The insured, Florentino Pilapil had a child, Millian Pilapil, with a married woman, the plaintiff, Melchora Cabanas. She was ten years old at the time the complaint was filed on October 10, 1964. The defendant, Francisco Pilapil, is the brother of the deceased. The

deceased insured himself and instituted as beneficiary, his child, with his brother to act as trustee during her minority. Upon his death, the proceeds were paid to him. Hence this complaint by the mother, with whom the child is living, seeking the delivery of such sum. She filed the bond required by the Civil Code. Defendant would justify his claim to the retention of the amount in question by invoking the terms of the insurance policy. 2 After trial duly had, the lower court in a decision of May 10, 1965, rendered judgment ordering the defendant to deliver the proceeds of the policy in question to plaintiff. Its main reliance was on Articles 320 and 321 of the Civil Code. The former provides: "The father, or in his absence the mother, is the legal administrator of the property pertaining to the child under parental authority. If the property is worth more than two thousand pesos, the father or mother shall give a bond subject to the approval of the Court of First Instance." 3 The latter states: "The property which the unemancipated child has acquired or may acquire with his work or industry, or by any lucrative title, belongs to the child in ownership, and in usufruct to the father or mother under whom he is under parental authority and whose company he lives; ... 4 Conformity to such explicit codal norm is apparent in this portion of the appealed decision: "The insurance proceeds belong to the beneficiary. The beneficiary is a minor under the custody and parental authority of the plaintiff, her mother. The said minor lives with plaintiff or lives in the company of the plaintiff. The said minor acquired this property by lucrative title. Said property, therefore, belongs to the minor child in ownership, and in usufruct to the plaintiff, her mother. Since under our law the usufructuary is entitled to possession, the plaintiff is entitled to possession of the insurance proceeds. The trust, insofar as it is in conflict with the above quoted provision of law, is pro tanto null and void. In order, however, to protect the rights of the minor, Millian Pilapil, the plaintiff should file an additional bond in the guardianship proceedings, Sp. Proc. No. 2418-R of this Court to raise her bond therein to the total amount of P5,000.00." 5 It is very clear, therefore, considering the above, that unless the applicability of the two cited Civil Code provisions can be disputed,

the decision must stand. There is no ambiguity in the language employed. The words are rather clear. Their meaning is unequivocal. Time and time again, this Court has left no doubt that where codal or statutory norms are cast in categorical language, the task before it is not one of interpretation but of application. 6 So it must be in this case. So it was in the appealed decision. 1. It would take more than just two paragraphs as found in the brief for the defendant-appellant 7 to blunt the force of legal commands that speak so plainly and so unqualifiedly. Even if it were a question of policy, the conclusion will remain unaltered. What is paramount, as mentioned at the outset, is the welfare of the child. It is in consonance with such primordial end that Articles 320 and 321 have been worded. There is recognition in the law of the deep ties that bind parent and child. In the event that there is less than full measure of concern for the offspring, the protection is supplied by the bond required. With the added circumstance that the child stays with the mother, not the uncle, without any evidence of lack of maternal care, the decision arrived at can stand the test of the strictest scrutiny. It is further fortified by the assumption, both logical and natural, that infidelity to the trust imposed by the deceased is much less in the case of a mother than in the case of an uncle. Manresa, commenting on Article 159 of the Civil Code of Spain, the source of Article 320 of the Civil Code, was of that view: Thus "El derecho y la obligacion de administrar el Patrimonio de los hijos es una consecuencia natural y lgica de la patria potestad y de la presuncin de que nadie cuidar de los bienes de acqullos con mas cario y solicitude que los padres. En nuestro Derecho antiguo puede decirse que se hallaba reconocida de una manera indirecta aquelia doctrina, y asi se desprende de la sentencia del Tribunal Supremeo de 30 de diciembre de 1864, que se refiere a la ley 24, tit. XIII de la Partida 5. De la propia suerte aceptan en general dicho principio los Codigos extranjeros, con las limitaciones y requisitos de que trataremos mis adelante." 8 2. The appealed decision is supported by another cogent consideration. It is buttressed by its adherence to the concept that the judiciary, as an agency of the State acting as parens patriae, is called upon whenever a pending suit of litigation affects one who is a minor to accord priority to his best interest. It may happen, as it did occur

here, that family relations may press their respective claims. It would be more in consonance not only with the natural order of things but the tradition of the country for a parent to be preferred. it could have been different if the conflict were between father and mother. Such is not the case at all. It is a mother asserting priority. Certainly the judiciary as the instrumentality of the State in its role of parens patriae, cannot remain insensible to the validity of her plea. In a recent case, 9 there is this quotation from an opinion of the United States Supreme Court: "This prerogative of parens patriae is inherent in the supreme power of every State, whether that power is lodged in a royal person or in the legislature, and has no affinity to those arbitrary powers which are sometimes exerted by irresponsible monarchs to the great detriment of the people and the destruction of their liberties." What is more, there is this constitutional provision vitalizing this concept. It reads: "The State shall strengthen the family as a basic social institution." 10 If, as the Constitution so wisely dictates, it is the family as a unit that has to be strengthened, it does not admit of doubt that even if a stronger case were presented for the uncle, still deference to a constitutional mandate would have led the lower court to decide as it did. WHEREFORE, the decision of May 10, 1965 is affirmed. Costs against defendant-appellant. Zaldivar (Chairman), Antonio, Fernandez and Aquino, JJ., concur. Barredo, J., took no part.

Footnotes 1 Decision, Record on Appeal, 24. 2 Cf. Ibid, 24-25. 3 Article 320 of the Civil Code (1950). 4 Article 321 of the Civil Code (1950). 5 Decision, Record on Appeal, 27.

6 Cf. People vs. Mapa, L-22301, Aug. 30, 1967, 20 SCRA 1164; Pacific Oxygen & Acetylene Co. v. Central Bank, L-21881, March 1, 1968, 22 SCRA 917; Dequito v. Lopez, L-27757, March 28, 1968, 22 SCRA 1352; Padilla v. City of Pasay L-24039, June 29, 1968, 23 SCRA 1349: Garcia v. Vasquez, L-26808, March 28, 1969, 27 SCRA 505; La Peria Cigar and Cigarette Factory v. Caparas, L-27948 and 28001-11, July 31, 1969, 28 SCRA 1085; Mobil Oil Phil., Inc. v. Diocares, L-26371, Sept. 30, 1969, 29 SCRA 656; Luzon Surety Co., Inc. v. De Garcia, L-25659, Oct. 31, 1969, 30 SCRA 111; Vda. de Macabenta v. Davao Stevedore Terminal Co., L-27489, April 30, 1970, 32 SCRA 553; Republic Flour Mills, Inc. v. Commissioner of Customs, L-28463, May 31, 1971, 39 SCRA 269; Maritime Co. of the Phil. v. Reparations Commission, L-29203, July 26, 1971, 40 SCRA 70; Allied Brokerage Corp. v. Commissioner of Customs, L-27641, Aug. 31, 1971, 40 SCRA 555.; Gonzaga v. Court of Appeals, L27455, June 28, 1973, 51 SCRA 381; Vallangca v. Ariola, L-29226, Sept. 28, 1973, 53 SCRA 139; Jalandoni v. Endaya, L-23894, Jan. 24, 1974, 55 SCRA 261; Pacis v. Pamaran, L-23996, March 15, 1974. 7 Brief for the Defendant-Appellant, 8-9. 8 2 Manresa, Codigo Civil Espaol, 38 (1944). 9 Nery v. Lorenzo, L-23096, April 27, 1972, 44 SCRA 431, 438-439. 10 Article II, Section of the Constitution.

Laurel vs. Misa 77 Phil. 856 FACTS: The accused was charged with treason. During the Japanese occupation, the accused adhered to the enemy by giving the latter aid and comfort. He claims that he cannot be tried for treason since his allegiance to the Philippines was suspended at that time. Also, he claims that he cannot be tried under a change of sovereignty over the country since his acts were against the Commonwealth which was replaced already by the Republic. HELD: The accused was found guilty. A citizen owes absolute and permanent allegiance to his government or sovereign. No transfer of sovereignty was made; hence, it is presumed that the Philippine government still had the power. Moreover, sovereignty cannot be suspended; it is either subsisting or eliminated and replaced. Sovereignty per se wasnt suspended; rather, it was the exercise of sovereignty that was suspended. Thus, there is no suspended allegiance. Regarding the change of government, there is no such change since the sovereign the Filipino people is still the same. What happened was a mere change of name of government, from Commonwealth to the Republic of the Philippines.

Peralta v. Director of Prisons G.R. No. L-49 November 12, 1945 Feria, J. Facts: Petitioner-defendant, a member of the Metropolitan Constabulary of Manila charged with the supervision and control of the production, procurement and distribution of goods and other necessaries as defined in section 1 of Act No. 9 of the National Assembly of the so-called Republic of the Philippines, was prosecuted for the crime of robbery as defined and penalized by section 2 (a) of Act No. 65 of the same Assembly. He was found guilty and sentenced to life imprisonmentby the Court of Special and Exclusive Criminal Jurisdiction, created in section 1 of Ordinance No. 7 promulgated by the President of the so-called Republic of the Philippines, pursuant to the authority conferred upon him by the Constitution and laws of the said Republic. And the procedure followed in the trial was the summary one established in Chapter II of Executive Order No. 157 of the Chairman of the Executive Commission, made applicable to the trial violations of said Act No. 65 by section 9 thereof and section 5 of said Ordinance No. 7. The petition for habeas corpus is based on the ground that the Court of Special and Executive Criminal Jurisdiction created by Ordinance No. 7 was a political instrumentality of the military forces of the Japanese Imperial Army, the aims and purposes of which are repugnant to those aims and political purposes of the Commonwealth of the Philippines, as well as those of the United States of America, and therefore, null and void ab initio, that the provisions of said Ordinance No. 7 are violative of the fundamental laws of the Commonwealth of the Philippines and the petitioner has been deprived of his constitutional rights; that the petitioner herein is being punished by a law created to serve the political purpose of the Japanese Imperial Army in the Philippines, and that the penalties provided for are much (more) severe than the penalties provided for in the Revised Penal Code. The features of the summary procedure adopted by Ordinance No. 7, assailed by the petitioner and the Solicitor General as impairing

the constitutional rights of an accused are: that court may interrogate the accused and witnesses before trial in order to clarify the points in dispute; that the refusal of the accused to answer the questions may be considered unfavorable to him; that if from the facts admitted at the preliminary interrogatory it appears that the defendant is guilty, he may be immediately convicted; and that the sentence of the sentence of the court is not appealable, except in case of death penalty which cannot be executed unless and until reviewed and affirmed by a special division of the Supreme Court composed of three Justices. Issue: whether Ordinance No. 7 is functus officio by reason sentence of the reoccupation of the Philippines and the restoration therein of the Commonwealth Government Held: Yes. In general, the cast of the occupant possess legal validity, and under international law should not be abrogated by the subsequent government. But this rule does not necessarily apply to acts that exceed the occupants power (e.g., alienation of the domains of the State or the sovereign), to sentences for war treason and war crimes, to acts of a political character, and to those that beyond the period of occupation. When occupation ceases, no reparation is legally due for what has already been carried out. All judgments of political complexion of the courts during the Japanese regime, ceased to be valid upon the reoccupation of the islands by virtue of the principle or right of postliminium. Applying that doctrine to the present case, the sentence which convicted the petitioner of a crime of a political complexion must be considered as having ceased to be valid ipso facto upon the reoccupation or liberation of the Philippines by General Douglas MacArthur. The punitive sentence under consideration, although good and valid during the military occupation of the Philippines by the Japanese

forces, ceased to be good and valid ipso facto upon the reoccupation of these Island and the restoration therein of the Commonwealth Government.

G.R. No. 86773 February 14, 1992 SOUTHEAST ASIAN FISHERIES DEVELOPMENT CENTERAQUACULTURE DEPARTMENT (SEAFDEC-AQD), DR. FLOR LACANILAO (CHIEF), RUFIL CUEVAS (HEAD, ADMINISTRATIVE DIV.), BEN DELOS REYES (FINANCE OFFICER), petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION and JUVENAL LAZAGA, respondents. Ramon Encarnacion for petitioners. Caesar T. Corpus for private respondent.

NOCON, J.: This is a petition for certiorari to annul and set aside the July 26, 1988 decision of the National Labor Relations Commission sustaining the labor arbiter, in holding herein petitioners Southeast Asian Fisheries Development Center-Aquaculture Department (SEAFDEC-AQD), Dr. Flor Lacanilao, Rufil Cuevas and Ben de los Reyes liable to pay private respondent Juvenal Lazaga the amount of P126,458.89 plus interest thereon computed from May 16, 1986 until full payment thereof is made, as separation pay and other post-employment benefits, and the resolution denying the petitioners' motion for reconsideration of said decision dated January 9, 1989. The antecedent facts of the case are as follows: SEAFDEC-AQD is a department of an international organization, the Southeast Asian Fisheries Development Center, organized through an agreement entered into in Bangkok, Thailand on December 28, 1967 by the governments of Malaysia, Singapore, Thailand, Vietnam, Indonesia and the Philippines with Japan as the sponsoring country (Article 1, Agreement Establishing the SEAFDEC). On April 20, 1975, private respondent Juvenal Lazaga was employed as a Research Associate an a probationary basis by the SEAFDECAQD and was appointed Senior External Affairs Officer on January 5, 1983 with a monthly basic salary of P8,000.00 and a monthly

allowance of P4,000.00. Thereafter, he was appointed to the position of Professional III and designated as Head of External Affairs Office with the same pay and benefits. On May 8, 1986, petitioner Lacanilao in his capacity as Chief of SEAFDEC-AQD sent a notice of termination to private respondent informing him that due to the financial constraints being experienced by the department, his services shall be terminated at the close of office hours on May 15, 1986 and that he is entitled to separation benefits equivalent to one (1) month of his basic salary for every year of service plus other benefits (Rollo, p. 153). Upon petitioner SEAFDEC-AQD's failure to pay private respondent his separation pay, the latter filed on March 18, 1987 a complaint against petitioners for non-payment of separation benefits plus moral damages and attorney's fees with the Arbitration Branch of the NLRC (Annex "C" of Petition for Certiorari). Petitioners in their answer with counterclaim alleged that the NLRC has no jurisdiction over the case inasmuch as the SEAFDEC-AQD is an international organization and that private respondent must first secure clearances from the proper departments for property or money accountability before any claim for separation pay will be paid, and which clearances had not yet been obtained by the private respondent. A formal hearing was conducted whereby private respondent alleged that the non-issuance of the clearances by the petitioners was politically motivated and in bad faith. On the other hand, petitioners alleged that private respondent has property accountability and an outstanding obligation to SEAFDEC-AQD in the amount of P27,532.11. Furthermore, private respondent is not entitled to accrued sick leave benefits amounting to P44,000.00 due to his failure to avail of the same during his employment with the SEAFDEC-AQD (Annex "D", Id.). On January 12, 1988, the labor arbiter rendered a decision, the dispositive portion of which reads: WHEREFORE, premises considered, judgment is hereby rendered ordering respondents:

1. To pay complainant P126,458.89, plus legal interest thereon computed from May 16, 1986 until full payment thereof is made, as separation pay and other post-employment benefits; 2. To pay complainant actual damages in the amount of P50,000, plus 10% attorney's fees. All other claims are hereby dismissed. SO ORDERED. (Rollo, p. 51, Annex "E") On July 26, 1988, said decision was affirmed by the Fifth Division of the NLRC except as to the award of P50,000.00 as actual damages and attorney's fees for being baseless. (Annex "A", p. 28, id.) On September 3, 1988, petitioners filed a Motion for Reconsideration (Annex "G", id.) which was denied on January 9, 1989. Thereafter, petitioners instituted this petition for certiorari alleging that the NLRC has no jurisdiction to hear and decide respondent Lazaga's complaint since SEAFDEC-AQD is immune from suit owing to its international character and the complaint is in effect a suit against the State which cannot be maintained without its consent. The petition is impressed with merit. Petitioner Southeast Asian Fisheries Development CenterAquaculture Department (SEAFDEC-AQD) is an international agency beyond the jurisdiction of public respondent NLRC. It was established by the Governments of Burma, Kingdom of Cambodia, Republic of Indonesia, Japan, Kingdom of Laos, Malaysia. Republic of the Philippines, Republic of Singapore, Kingdom of Thailand and Republic of Vietnam (Annex "H", Petition). The Republic of the Philippines became a signatory to the Agreement establishing SEAFDEC on January 16,1968. Its purpose is as follows: The purpose of the Center is to contribute to the promotion of the fisheries development in Southeast Asia by mutual co-operation among the member governments of the Center, hereinafter called the "Members", and through collaboration with international organizations

and governments external to the Center. (Agreement Establishing the SEAFDEC, Art. 1; Annex "H" Petition) (p.310, Rollo) SEAFDEC-AQD was organized during the Sixth Council Meeting of SEAFDEC on July 3-7, 1973 in Kuala Lumpur, Malaysia as one of the principal departments of SEAFDEC (Annex "I", id.) to be established in Iloilo for the promotion of research in aquaculture. Paragraph 1, Article 6 of the Agreement establishing SEAFDEC mandates: 1. The Council shall be the supreme organ of the Center and all powers of the Center shall be vested in the Council. Being an intergovernmental organization, SEAFDEC including its Departments (AQD), enjoys functional independence and freedom from control of the state in whose territory its office is located. As Senator Jovito R. Salonga and Former Chief Justice Pedro L. Yap stated in their book, Public International Law (p. 83, 1956 ed.): Permanent international commissions and administrative bodies have been created by the agreement of a considerable number of States for a variety of international purposes, economic or social and mainly non-political. Among the notable instances are the International Labor Organization, the International Institute of Agriculture, the International Danube Commission. In so far as they are autonomous and beyond the control of any one State, they have a distinct juridical personality independent of the municipal law of the State where they are situated. As such, according to one leading authority "they must be deemed to possess a species of international personality of their own." (Salonga and Yap, Public International Law, 83 [1956 ed.]) Pursuant to its being a signatory to the Agreement, the Republic of the Philippines agreed to be represented by one Director in the governing SEAFDEC Council (Agreement Establishing SEAFDEC, Art. 5, Par. 1, Annex "H", ibid.) and that its national laws and regulations shall apply only insofar as its contribution to SEAFDEC of "an agreed amount of money, movable and immovable property and services necessary for the establishment and operation of the Center" are concerned (Art. 11, ibid.). It expressly waived the application of the Philippine laws on the disbursement of funds of petitioner SEAFDEC-AQD (Section 2, P.D. No. 292).

The then Minister of Justice likewise opined that Philippine Courts have no jurisdiction over SEAFDEC-AQD in Opinion No. 139, Series of 1984 4. One of the basic immunities of an international organization is immunity from local jurisdiction, i.e., that it is immune from the legal writs and processes issued by the tribunals of the country where it is found. (See Jenks, Id., pp. 37-44) The obvious reason for this is that the subjection of such an organization to the authority of the local courts would afford a convenient medium thru which the host government may interfere in there operations or even influence or control its policies and decisions of the organization; besides, such subjection to local jurisdiction would impair the capacity of such body to discharge its responsibilities impartially on behalf of its memberstates. In the case at bar, for instance, the entertainment by the National Labor Relations Commission of Mr. Madamba's reinstatement cases would amount to interference by the Philippine Government in the management decisions of the SEARCA governing board; even worse, it could compromise the desired impartiality of the organization since it will have to suit its actuations to the requirements of Philippine law, which may not necessarily coincide with the interests of the other member-states. It is precisely to forestall these possibilities that in cases where the extent of the immunity is specified in the enabling instruments of international organizations, jurisdictional immunity from the host country is invariably among the first accorded. (See Jenks, Id.; See also Bowett, The Law of International Institutions, pp. 284-1285). Respondent Lazaga's invocation of estoppel with respect to the issue of jurisdiction is unavailing because estoppel does not apply to confer jurisdiction to a tribunal that has none over a cause of action. Jurisdiction is conferred by law. Where there is none, no agreement of the parties can provide one. Settled is the rule that the decision of a tribunal not vested with appropriate jurisdiction is null and void. Thus, in Calimlim vs. Ramirez, this Court held: A rule, that had been settled by unquestioned acceptance and upheld in decisions so numerous to cite is that the jurisdiction of a court over the subject matter of the action is a matter of law and may not be conferred by consent or agreement of the parties. The lack of

jurisdiction of a court may be raised at any stage of the proceedings, even on appeal. This doctrine has been qualified by recent pronouncements which it stemmed principally from the ruling in the cited case of Sibonghanoy. It is to be regretted, however, that the holding in said case had been applied to situations which were obviously not contemplated therein. The exceptional circumstances involved in Sibonghanoy which justified the departure from the accepted concept of non-waivability of objection to jurisdiction has been ignored and, instead a blanket doctrine had been repeatedly upheld that rendered the supposed ruling in Sibonghanoy not as the exception, but rather the general rule, virtually overthrowing altogether the time-honored principle that the issue of jurisdiction is not lost by waiver or by estoppel. (Calimlim vs. Ramirez, G.R. No. L34362, 118 SCRA 399; [1982]) Respondent NLRC'S citation of the ruling of this Court in Lacanilao v. De Leon (147 SCRA 286 [1987]) to justify its assumption of jurisdiction over SEAFDEC is misplaced. On the contrary, the Court in said case explained why it took cognizance of the case. Said the Court: We would note, finally, that the present petition relates to a controversy between two claimants to the same position; this is not a controversy between the SEAFDEC on the one hand, and an officer or employee, or a person claiming to be an officer or employee, of the SEAFDEC, on the other hand. There is before us no question involving immunity from the jurisdiction of the Court, there being no plea for such immunity whether by or on behalf of SEAFDEC, or by an official of SEAFDEC with the consent of SEAFDEC (Id., at 300; emphasis supplied). WHEREFORE, finding SEAFDEC-AQD to be an international agency beyond the jurisdiction of the courts or local agency of the Philippine government, the questioned decision and resolution of the NLRC dated July 26, 1988 and January 9, 1989, respectively, are hereby REVERSED and SET ASIDE for having been rendered without jurisdiction. No costs. SO ORDERED.

G.R. No. 142396

February 11, 2003

KHOSROW MINUCHER, petitioner, vs. HON. COURT OF APPEALS and ARTHUR SCALZO, respondents. DECISION VITUG, J.: Sometime in May 1986, an Information for violation of Section 4 of Republic Act No. 6425, otherwise also known as the "Dangerous Drugs Act of 1972," was filed against petitioner Khosrow Minucher and one Abbas Torabian with the Regional Trial Court, Branch 151, of Pasig City. The criminal charge followed a "buy-bust operation" conducted by the Philippine police narcotic agents in the house of Minucher, an Iranian national, where a quantity of heroin, a prohibited drug, was said to have been seized. The narcotic agents were accompanied by private respondent Arthur Scalzo who would, in due time, become one of the principal witnesses for the prosecution. On 08 January 1988, Presiding Judge Eutropio Migrino rendered a decision acquitting the two accused. On 03 August 1988, Minucher filed Civil Case No. 88-45691 before the Regional Trial Court (RTC), Branch 19, of Manila for damages on account of what he claimed to have been trumped-up charges of drug trafficking made by Arthur Scalzo. The Manila RTC detailed what it had found to be the facts and circumstances surrounding the case. "The testimony of the plaintiff disclosed that he is an Iranian national. He came to the Philippines to study in the University of the Philippines in 1974. In 1976, under the regime of the Shah of Iran, he was appointed Labor Attach for the Iranian Embassies in Tokyo, Japan and Manila, Philippines. When the Shah of Iran was deposed by Ayatollah Khomeini, plaintiff became a refugee of the United Nations and continued to stay in the Philippines. He headed the Iranian National Resistance Movement in the Philippines. "He came to know the defendant on May 13, 1986, when the latter was brought to his house and introduced to him by a certain Jose Iigo, an informer of the Intelligence Unit of the military. Jose Iigo, on the other hand, was met by plaintiff at the office of Atty. Crisanto

Saruca, a lawyer for several Iranians whom plaintiff assisted as head of the anti-Khomeini movement in the Philippines. "During his first meeting with the defendant on May 13, 1986, upon the introduction of Jose Iigo, the defendant expressed his interest in buying caviar. As a matter of fact, he bought two kilos of caviar from plaintiff and paid P10,000.00 for it. Selling caviar, aside from that of Persian carpets, pistachio nuts and other Iranian products was his business after the Khomeini government cut his pension of over $3,000.00 per month. During their introduction in that meeting, the defendant gave the plaintiff his calling card, which showed that he is working at the US Embassy in the Philippines, as a special agent of the Drug Enforcement Administration, Department of Justice, of the United States, and gave his address as US Embassy, Manila. At the back of the card appears a telephone number in defendants own handwriting, the number of which he can also be contacted. "It was also during this first meeting that plaintiff expressed his desire to obtain a US Visa for his wife and the wife of a countryman named Abbas Torabian. The defendant told him that he [could] help plaintiff for a fee of $2,000.00 per visa. Their conversation, however, was more concentrated on politics, carpets and caviar. Thereafter, the defendant promised to see plaintiff again. "On May 19, 1986, the defendant called the plaintiff and invited the latter for dinner at Mario's Restaurant at Makati. He wanted to buy 200 grams of caviar. Plaintiff brought the merchandize but for the reason that the defendant was not yet there, he requested the restaurant people to x x x place the same in the refrigerator. Defendant, however, came and plaintiff gave him the caviar for which he was paid. Then their conversation was again focused on politics and business. "On May 26, 1986, defendant visited plaintiff again at the latter's residence for 18 years at Kapitolyo, Pasig. The defendant wanted to buy a pair of carpets which plaintiff valued at $27,900.00. After some haggling, they agreed at $24,000.00. For the reason that defendant did not yet have the money, they agreed that defendant would come back the next day. The following day, at 1:00 p.m., he came back with his $24,000.00, which he gave to the plaintiff, and the latter, in turn,

gave him the pair of carpets.

1awphi1.nt

"At about 3:00 in the afternoon of May 27, 1986, the defendant came back again to plaintiff's house and directly proceeded to the latter's bedroom, where the latter and his countryman, Abbas Torabian, were playing chess. Plaintiff opened his safe in the bedroom and obtained $2,000.00 from it, gave it to the defendant for the latter's fee in obtaining a visa for plaintiff's wife. The defendant told him that he would be leaving the Philippines very soon and requested him to come out of the house for a while so that he can introduce him to his cousin waiting in a cab. Without much ado, and without putting on his shirt as he was only in his pajama pants, he followed the defendant where he saw a parked cab opposite the street. To his complete surprise, an American jumped out of the cab with a drawn highpowered gun. He was in the company of about 30 to 40 Filipino soldiers with 6 Americans, all armed. He was handcuffed and after about 20 minutes in the street, he was brought inside the house by the defendant. He was made to sit down while in handcuffs while the defendant was inside his bedroom. The defendant came out of the bedroom and out from defendant's attach case, he took something and placed it on the table in front of the plaintiff. They also took plaintiff's wife who was at that time at the boutique near his house and likewise arrested Torabian, who was playing chess with him in the bedroom and both were handcuffed together. Plaintiff was not told why he was being handcuffed and why the privacy of his house, especially his bedroom was invaded by defendant. He was not allowed to use the telephone. In fact, his telephone was unplugged. He asked for any warrant, but the defendant told him to `shut up. He was nevertheless told that he would be able to call for his lawyer who can defend him. "The plaintiff took note of the fact that when the defendant invited him to come out to meet his cousin, his safe was opened where he kept the $24,000.00 the defendant paid for the carpets and another $8,000.00 which he also placed in the safe together with a bracelet worth $15,000.00 and a pair of earrings worth $10,000.00. He also discovered missing upon his release his 8 pieces hand-made Persian carpets, valued at $65,000.00, a painting he bought for P30,000.00 together with his TV and betamax sets. He claimed that when he was handcuffed, the defendant took his keys from his wallet. There was,

therefore, nothing left in his house. "That his arrest as a heroin trafficker x x x had been well publicized throughout the world, in various newspapers, particularly in Australia, America, Central Asia and in the Philippines. He was identified in the papers as an international drug trafficker. x x x In fact, the arrest of defendant and Torabian was likewise on television, not only in the Philippines, but also in America and in Germany. His friends in said places informed him that they saw him on TV with said news. "After the arrest made on plaintiff and Torabian, they were brought to Camp Crame handcuffed together, where they were detained for three days without food and water."1 During the trial, the law firm of Luna, Sison and Manas, filed a special appearance for Scalzo and moved for extension of time to file an answer pending a supposed advice from the United States Department of State and Department of Justice on the defenses to be raised. The trial court granted the motion. On 27 October 1988, Scalzo filed another special appearance to quash the summons on the ground that he, not being a resident of the Philippines and the action being one in personam, was beyond the processes of the court. The motion was denied by the court, in its order of 13 December 1988, holding that the filing by Scalzo of a motion for extension of time to file an answer to the complaint was a voluntary appearance equivalent to service of summons which could likewise be construed a waiver of the requirement of formal notice. Scalzo filed a motion for reconsideration of the court order, contending that a motion for an extension of time to file an answer was not a voluntary appearance equivalent to service of summons since it did not seek an affirmative relief. Scalzo argued that in cases involving the United States government, as well as its agencies and officials, a motion for extension was peculiarly unavoidable due to the need (1) for both the Department of State and the Department of Justice to agree on the defenses to be raised and (2) to refer the case to a Philippine lawyer who would be expected to first review the case. The court a quo denied the motion for reconsideration in its order of 15 October 1989.

Scalzo filed a petition for review with the Court of Appeals, there docketed CA-G.R. No. 17023, assailing the denial. In a decision, dated 06 October 1989, the appellate court denied the petition and affirmed the ruling of the trial court. Scalzo then elevated the incident in a petition for review on certiorari, docketed G.R. No. 91173, to this Court. The petition, however, was denied for its failure to comply with SC Circular No. 1-88; in any event, the Court added, Scalzo had failed to show that the appellate court was in error in its questioned judgment. Meanwhile, at the court a quo, an order, dated 09 February 1990, was issued (a) declaring Scalzo in default for his failure to file a responsive pleading (answer) and (b) setting the case for the reception of evidence. On 12 March 1990, Scalzo filed a motion to set aside the order of default and to admit his answer to the complaint. Granting the motion, the trial court set the case for pre-trial. In his answer, Scalzo denied the material allegations of the complaint and raised the affirmative defenses (a) of Minuchers failure to state a cause of action in his complaint and (b) that Scalzo had acted in the discharge of his official duties as being merely an agent of the Drug Enforcement Administration of the United States Department of Justice. Scalzo interposed a counterclaim of P100,000.00 to answer for attorneys' fees and expenses of litigation. Then, on 14 June 1990, after almost two years since the institution of the civil case, Scalzo filed a motion to dismiss the complaint on the ground that, being a special agent of the United States Drug Enforcement Administration, he was entitled to diplomatic immunity. He attached to his motion Diplomatic Note No. 414 of the United States Embassy, dated 29 May 1990, addressed to the Department of Foreign Affairs of the Philippines and a Certification, dated 11 June 1990, of Vice Consul Donna Woodward, certifying that the note is a true and faithful copy of its original. In an order of 25 June 1990, the trial court denied the motion to dismiss. On 27 July 1990, Scalzo filed a petition for certiorari with injunction with this Court, docketed G.R. No. 94257 and entitled "Arthur W. Scalzo, Jr., vs. Hon. Wenceslao Polo, et al.," asking that the complaint in Civil Case No. 88-45691 be ordered dismissed. The case was referred to the Court of Appeals, there docketed CA-G.R.

SP No. 22505, per this Courts resolution of 07 August 1990. On 31 October 1990, the Court of Appeals promulgated its decision sustaining the diplomatic immunity of Scalzo and ordering the dismissal of the complaint against him. Minucher filed a petition for review with this Court, docketed G.R. No. 97765 and entitled "Khosrow Minucher vs. the Honorable Court of Appeals, et. al." (cited in 214 SCRA 242), appealing the judgment of the Court of Appeals. In a decision, dated 24 September 1992, penned by Justice (now Chief Justice) Hilario Davide, Jr., this Court reversed the decision of the appellate court and remanded the case to the lower court for trial. The remand was ordered on the theses (a) that the Court of Appeals erred in granting the motion to dismiss of Scalzo for lack of jurisdiction over his person without even considering the issue of the authenticity of Diplomatic Note No. 414 and (b) that the complaint contained sufficient allegations to the effect that Scalzo committed the imputed acts in his personal capacity and outside the scope of his official duties and, absent any evidence to the contrary, the issue on Scalzos diplomatic immunity could not be taken up. The Manila RTC thus continued with its hearings on the case. On 17 November 1995, the trial court reached a decision; it adjudged: "WHEREFORE, and in view of all the foregoing considerations, judgment is hereby rendered for the plaintiff, who successfully established his claim by sufficient evidence, against the defendant in the manner following: "`Adjudging defendant liable to plaintiff in actual and compensatory damages of P520,000.00; moral damages in the sum of P10 million; exemplary damages in the sum of P100,000.00; attorney's fees in the sum of P200,000.00 plus costs. `The Clerk of the Regional Trial Court, Manila, is ordered to take note of the lien of the Court on this judgment to answer for the unpaid docket fees considering that the plaintiff in this case instituted this action as a pauper litigant."2 While the trial court gave credence to the claim of Scalzo and the evidence presented by him that he was a diplomatic agent entitled to immunity as such, it ruled that he, nevertheless, should be held

accountable for the acts complained of committed outside his official duties. On appeal, the Court of Appeals reversed the decision of the trial court and sustained the defense of Scalzo that he was sufficiently clothed with diplomatic immunity during his term of duty and thereby immune from the criminal and civil jurisdiction of the "Receiving State" pursuant to the terms of the Vienna Convention. Hence, this recourse by Minucher. The instant petition for review raises a two-fold issue: (1) whether or not the doctrine of conclusiveness of judgment, following the decision rendered by this Court in G.R. No. 97765, should have precluded the Court of Appeals from resolving the appeal to it in an entirely different manner, and (2) whether or not Arthur Scalzo is indeed entitled to diplomatic immunity. The doctrine of conclusiveness of judgment, or its kindred rule of res judicata, would require 1) the finality of the prior judgment, 2) a valid jurisdiction over the subject matter and the parties on the part of the court that renders it, 3) a judgment on the merits, and 4) an identity of the parties, subject matter and causes of action.3 Even while one of the issues submitted in G.R. No. 97765 - "whether or not public respondent Court of Appeals erred in ruling that private respondent Scalzo is a diplomat immune from civil suit conformably with the Vienna Convention on Diplomatic Relations" - is also a pivotal question raised in the instant petition, the ruling in G.R. No. 97765, however, has not resolved that point with finality. Indeed, the Court there has made this observation "It may be mentioned in this regard that private respondent himself, in his Pre-trial Brief filed on 13 June 1990, unequivocally states that he would present documentary evidence consisting of DEA records on his investigation and surveillance of plaintiff and on his position and duties as DEA special agent in Manila. Having thus reserved his right to present evidence in support of his position, which is the basis for the alleged diplomatic immunity, the barren self-serving claim in the belated motion to dismiss cannot be relied upon for a reasonable, intelligent and fair resolution of the issue of diplomatic immunity."4 Scalzo contends that the Vienna Convention on Diplomatic Relations, to which the Philippines is a signatory, grants him absolute immunity

from suit, describing his functions as an agent of the United States Drugs Enforcement Agency as "conducting surveillance operations on suspected drug dealers in the Philippines believed to be the source of prohibited drugs being shipped to the U.S., (and) having ascertained the target, (he then) would inform the Philippine narcotic agents (to) make the actual arrest." Scalzo has submitted to the trial court a number of documents 1. Exh. '2' - Diplomatic Note No. 414 dated 29 May 1990; 2. Exh. '1' - Certification of Vice Consul Donna K. Woodward dated 11 June 1990; 3. Exh. '5' - Diplomatic Note No. 757 dated 25 October 1991; 4. Exh. '6' - Diplomatic Note No. 791 dated 17 November 1992; and 5. Exh. '7' - Diplomatic Note No. 833 dated 21 October 1988. 6. Exh. '3' - 1st Indorsement of the Hon. Jorge R. Coquia, Legal Adviser, Department of Foreign Affairs, dated 27 June 1990 forwarding Embassy Note No. 414 to the Clerk of Court of RTC Manila, Branch 19 (the trial court); 7. Exh. '4' - Diplomatic Note No. 414, appended to the 1st Indorsement (Exh. '3'); and 8. Exh. '8' - Letter dated 18 November 1992 from the Office of the Protocol, Department of Foreign Affairs, through Asst. Sec. Emmanuel Fernandez, addressed to the Chief Justice of this Court.5 The documents, according to Scalzo, would show that: (1) the United States Embassy accordingly advised the Executive Department of the Philippine Government that Scalzo was a member of the diplomatic staff of the United States diplomatic mission from his arrival in the Philippines on 14 October 1985 until his departure on 10 August 1988; (2) that the United States Government was firm from the very beginning in asserting the diplomatic immunity of Scalzo with respect to the case pursuant to the provisions of the Vienna Convention on Diplomatic Relations; and (3) that the United States Embassy repeatedly urged the Department of Foreign Affairs to take

appropriate action to inform the trial court of Scalzos diplomatic immunity. The other documentary exhibits were presented to indicate that: (1) the Philippine government itself, through its Executive Department, recognizing and respecting the diplomatic status of Scalzo, formally advised the "Judicial Department" of his diplomatic status and his entitlement to all diplomatic privileges and immunities under the Vienna Convention; and (2) the Department of Foreign Affairs itself authenticated Diplomatic Note No. 414. Scalzo additionally presented Exhibits "9" to "13" consisting of his reports of investigation on the surveillance and subsequent arrest of Minucher, the certification of the Drug Enforcement Administration of the United States Department of Justice that Scalzo was a special agent assigned to the Philippines at all times relevant to the complaint, and the special power of attorney executed by him in favor of his previous counsel6 to show (a) that the United States Embassy, affirmed by its Vice Consul, acknowledged Scalzo to be a member of the diplomatic staff of the United States diplomatic mission from his arrival in the Philippines on 14 October 1985 until his departure on 10 August 1988, (b) that, on May 1986, with the cooperation of the Philippine law enforcement officials and in the exercise of his functions as member of the mission, he investigated Minucher for alleged trafficking in a prohibited drug, and (c) that the Philippine Department of Foreign Affairs itself recognized that Scalzo during his tour of duty in the Philippines (14 October 1985 up to 10 August 1988) was listed as being an Assistant Attach of the United States diplomatic mission and accredited with diplomatic status by the Government of the Philippines. In his Exhibit 12, Scalzo described the functions of the overseas office of the United States Drugs Enforcement Agency, i.e., (1) to provide criminal investigative expertise and assistance to foreign law enforcement agencies on narcotic and drug control programs upon the request of the host country, 2) to establish and maintain liaison with the host country and counterpart foreign law enforcement officials, and 3) to conduct complex criminal investigations involving international criminal conspiracies which affect the interests of the United States. The Vienna Convention on Diplomatic Relations was a codification of centuries-old customary law and, by the time of its ratification on 18 April 1961, its rules of law had long become stable. Among the city states of ancient Greece, among the peoples of the Mediterranean

before the establishment of the Roman Empire, and among the states of India, the person of the herald in time of war and the person of the diplomatic envoy in time of peace were universally held sacrosanct.7 By the end of the 16th century, when the earliest treatises on diplomatic law were published, the inviolability of ambassadors was firmly established as a rule of customary international law.8 Traditionally, the exercise of diplomatic intercourse among states was undertaken by the head of state himself, as being the preeminent embodiment of the state he represented, and the foreign secretary, the official usually entrusted with the external affairs of the state. Where a state would wish to have a more prominent diplomatic presence in the receiving state, it would then send to the latter a diplomatic mission. Conformably with the Vienna Convention, the functions of the diplomatic mission involve, by and large, the representation of the interests of the sending state and promoting friendly relations with the receiving state.9 The Convention lists the classes of heads of diplomatic missions to include (a) ambassadors or nuncios accredited to the heads of state,10 (b) envoys,11 ministers or internuncios accredited to the heads of states; and (c) charges d' affairs12 accredited to the ministers of foreign affairs.13 Comprising the "staff of the (diplomatic) mission" are the diplomatic staff, the administrative staff and the technical and service staff. Only the heads of missions, as well as members of the diplomatic staff, excluding the members of the administrative, technical and service staff of the mission, are accorded diplomatic rank. Even while the Vienna Convention on Diplomatic Relations provides for immunity to the members of diplomatic missions, it does so, nevertheless, with an understanding that the same be restrictively applied. Only "diplomatic agents," under the terms of the Convention, are vested with blanket diplomatic immunity from civil and criminal suits. The Convention defines "diplomatic agents" as the heads of missions or members of the diplomatic staff, thus impliedly withholding the same privileges from all others. It might bear stressing that even consuls, who represent their respective states in concerns of commerce and navigation and perform certain administrative and notarial duties, such as the issuance of passports and visas, authentication of documents, and administration of oaths, do not ordinarily enjoy the traditional diplomatic immunities and privileges accorded diplomats, mainly for the reason that they are not

charged with the duty of representing their states in political matters. Indeed, the main yardstick in ascertaining whether a person is a diplomat entitled to immunity is the determination of whether or not he performs duties of diplomatic nature. Scalzo asserted, particularly in his Exhibits "9" to "13," that he was an Assistant Attach of the United States diplomatic mission and was accredited as such by the Philippine Government. An attach belongs to a category of officers in the diplomatic establishment who may be in charge of its cultural, press, administrative or financial affairs. There could also be a class of attaches belonging to certain ministries or departments of the government, other than the foreign ministry or department, who are detailed by their respective ministries or departments with the embassies such as the military, naval, air, commercial, agricultural, labor, science, and customs attaches, or the like. Attaches assist a chief of mission in his duties and are administratively under him, but their main function is to observe, analyze and interpret trends and developments in their respective fields in the host country and submit reports to their own ministries or departments in the home government.14 These officials are not generally regarded as members of the diplomatic mission, nor are they normally designated as having diplomatic rank. In an attempt to prove his diplomatic status, Scalzo presented Diplomatic Notes Nos. 414, 757 and 791, all issued post litem motam, respectively, on 29 May 1990, 25 October 1991 and 17 November 1992. The presentation did nothing much to alleviate the Court's initial reservations in G.R. No. 97765, viz: "While the trial court denied the motion to dismiss, the public respondent gravely abused its discretion in dismissing Civil Case No. 88-45691 on the basis of an erroneous assumption that simply because of the diplomatic note, the private respondent is clothed with diplomatic immunity, thereby divesting the trial court of jurisdiction over his person. "x x x x x x x x x "And now, to the core issue - the alleged diplomatic immunity of the private respondent. Setting aside for the moment the issue of

authenticity raised by the petitioner and the doubts that surround such claim, in view of the fact that it took private respondent one (1) year, eight (8) months and seventeen (17) days from the time his counsel filed on 12 September 1988 a Special Appearance and Motion asking for a first extension of time to file the Answer because the Departments of State and Justice of the United States of America were studying the case for the purpose of determining his defenses, before he could secure the Diplomatic Note from the US Embassy in Manila, and even granting for the sake of argument that such note is authentic, the complaint for damages filed by petitioner cannot be peremptorily dismissed. "x x x x x x x x x "There is of course the claim of private respondent that the acts imputed to him were done in his official capacity. Nothing supports this self-serving claim other than the so-called Diplomatic Note. x x x. The public respondent then should have sustained the trial court's denial of the motion to dismiss. Verily, it should have been the most proper and appropriate recourse. It should not have been overwhelmed by the self-serving Diplomatic Note whose belated issuance is even suspect and whose authenticity has not yet been proved. The undue haste with which respondent Court yielded to the private respondent's claim is arbitrary." A significant document would appear to be Exhibit No. 08, dated 08 November 1992, issued by the Office of Protocol of the Department of Foreign Affairs and signed by Emmanuel C. Fernandez, Assistant Secretary, certifying that "the records of the Department (would) show that Mr. Arthur W. Scalzo, Jr., during his term of office in the Philippines (from 14 October 1985 up to 10 August 1988) was listed as an Assistant Attach of the United States diplomatic mission and was, therefore, accredited diplomatic status by the Government of the Philippines." No certified true copy of such "records," the supposed bases for the belated issuance, was presented in evidence. Concededly, vesting a person with diplomatic immunity is a prerogative of the executive branch of the government. In World Health Organization vs. Aquino,15 the Court has recognized that, in such matters, the hands of the courts are virtually tied. Amidst

apprehensions of indiscriminate and incautious grant of immunity, designed to gain exemption from the jurisdiction of courts, it should behoove the Philippine government, specifically its Department of Foreign Affairs, to be most circumspect, that should particularly be no less than compelling, in its post litem motam issuances. It might be recalled that the privilege is not an immunity from the observance of the law of the territorial sovereign or from ensuing legal liability; it is, rather, an immunity from the exercise of territorial jurisdiction.16 The government of the United States itself, which Scalzo claims to be acting for, has formulated its standards for recognition of a diplomatic agent. The State Department policy is to only concede diplomatic status to a person who possesses an acknowledged diplomatic title and "performs duties of diplomatic nature."17 Supplementary criteria for accreditation are the possession of a valid diplomatic passport or, from States which do not issue such passports, a diplomatic note formally representing the intention to assign the person to diplomatic duties, the holding of a non-immigrant visa, being over twenty-one years of age, and performing diplomatic functions on an essentially full-time basis.18 Diplomatic missions are requested to provide the most accurate and descriptive job title to that which currently applies to the duties performed. The Office of the Protocol would then assign each individual to the appropriate functional category.19 But while the diplomatic immunity of Scalzo might thus remain contentious, it was sufficiently established that, indeed, he worked for the United States Drug Enforcement Agency and was tasked to conduct surveillance of suspected drug activities within the country on the dates pertinent to this case. If it should be ascertained that Arthur Scalzo was acting well within his assigned functions when he committed the acts alleged in the complaint, the present controversy could then be resolved under the related doctrine of State Immunity from Suit. The precept that a State cannot be sued in the courts of a foreign state is a long-standing rule of customary international law then closely identified with the personal immunity of a foreign sovereign from suit20 and, with the emergence of democratic states, made to attach not just to the person of the head of state, or his representative, but also distinctly to the state itself in its sovereign capacity.21 If the acts giving rise to a suit are those of a foreign

government done by its foreign agent, although not necessarily a diplomatic personage, but acting in his official capacity, the complaint could be barred by the immunity of the foreign sovereign from suit without its consent. Suing a representative of a state is believed to be, in effect, suing the state itself. The proscription is not accorded for the benefit of an individual but for the State, in whose service he is, under the maxim - par in parem, non habet imperium - that all states are sovereign equals and cannot assert jurisdiction over one another.22 The implication, in broad terms, is that if the judgment against an official would require the state itself to perform an affirmative act to satisfy the award, such as the appropriation of the amount needed to pay the damages decreed against him, the suit must be regarded as being against the state itself, although it has not been formally impleaded.23 In United States of America vs. Guinto,24 involving officers of the United States Air Force and special officers of the Air Force Office of Special Investigators charged with the duty of preventing the distribution, possession and use of prohibited drugs, this Court has ruled "While the doctrine (of state immunity) appears to prohibit only suits against the state without its consent, it is also applicable to complaints filed against officials of the state for acts allegedly performed by them in the discharge of their duties. x x x. It cannot for a moment be imagined that they were acting in their private or unofficial capacity when they apprehended and later testified against the complainant. It follows that for discharging their duties as agents of the United States, they cannot be directly impleaded for acts imputable to their principal, which has not given its consent to be sued. x x x As they have acted on behalf of the government, and within the scope of their authority, it is that government, and not the petitioners personally, [who were] responsible for their acts."25 This immunity principle, however, has its limitations. Thus, Shauf vs. Court of Appeals26 elaborates: "It is a different matter where the public official is made to account in his capacity as such for acts contrary to law and injurious to the rights of the plaintiff. As was clearly set forth by Justice Zaldivar in Director

of the Bureau of Telecommunications, et al., vs. Aligaen, et al. (33 SCRA 368): `Inasmuch as the State authorizes only legal acts by its officers, unauthorized acts of government officials or officers are not acts of the State, and an action against the officials or officers by one whose rights have been invaded or violated by such acts, for the protection of his rights, is not a suit against the State within the rule of immunity of the State from suit. In the same tenor, it has been said that an action at law or suit in equity against a State officer or the director of a State department on the ground that, while claiming to act for the State, he violates or invades the personal and property rights of the plaintiff, under an unconstitutional act or under an assumption of authority which he does not have, is not a suit against the State within the constitutional provision that the State may not be sued without its consent. The rationale for this ruling is that the doctrine of state immunity cannot be used as an instrument for perpetrating an injustice. "x x x x x x x x x "(T)he 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. It is a well-settled principle of law that a public official may be liable in his personal private capacity for whatever damage he may have caused by his act done with malice and in bad faith or beyond the scope of his authority and jurisdiction."27 A foreign agent, operating within a territory, can be cloaked with immunity from suit but only as long as it can be established that he is acting within the directives of the sending state. The consent of the host state is an indispensable requirement of basic courtesy between the two sovereigns. Guinto and Shauf both involve officers and personnel of the United States, stationed within Philippine territory, under the RP-US Military Bases Agreement. While evidence is wanting to show any similar agreement between the governments of the Philippines and of the United States (for the latter to send its

agents and to conduct surveillance and related activities of suspected drug dealers in the Philippines), the consent or imprimatur of the Philippine government to the activities of the United States Drug Enforcement Agency, however, can be gleaned from the facts heretofore elsewhere mentioned. The official exchanges of communication between agencies of the government of the two countries, certifications from officials of both the Philippine Department of Foreign Affairs and the United States Embassy, as well as the participation of members of the Philippine Narcotics Command in the "buy-bust operation" conducted at the residence of Minucher at the behest of Scalzo, may be inadequate to support the "diplomatic status" of the latter but they give enough indication that the Philippine government has given its imprimatur, if not consent, to the activities within Philippine territory of agent Scalzo of the United States Drug Enforcement Agency. The job description of Scalzo has tasked him to conduct surveillance on suspected drug suppliers and, after having ascertained the target, to inform local law enforcers who would then be expected to make the arrest. In conducting surveillance activities on Minucher, later acting as the poseur-buyer during the buy-bust operation, and then becoming a principal witness in the criminal case against Minucher, Scalzo hardly can be said to have acted beyond the scope of his official function or duties. All told, this Court is constrained to rule that respondent Arthur Scalzo, an agent of the United States Drug Enforcement Agency allowed by the Philippine government to conduct activities in the country to help contain the problem on the drug traffic, is entitled to the defense of state immunity from suit. WHEREFORE, on the foregoing premises, the petition is DENIED. No costs. SO ORDERED. Davide, Jr., C.J., (Chairman), Ynares-Santiago, Carpio and Azcuna, JJ., concur Footnotes
1

Rollo, pp. 39-42.

Rollo. p. 51. Linzag vs. CA, 291 SCRA 304. Minucher vs. Court of Appeals, 214 SCRA 242. For documentary Exhibits Nos. 1-8, see Rollo, pp. 143-155. For Documentary Exhibits Nos. 9-13, See Rollo, pp. 156-168.

Eileen Denza, "Diplomatic Law, A Commentary on the Vienna Convention on Diplomatic Relations," 2nd Edition, Claredon Press, Oxford, 1998, at 210.
8

Ibid.

Article 3 of the Vienna Convention enumerates the functions of the diplomatic mission as (a) representing the sending State in the receiving State; (b) protecting in the receiving State the interests of the sending State and of its nationals, within the limits permitted by international law; (c) negotiating with the Government of the receiving State; (d) ascertaining by all lawful means conditions and developments in the receiving State, and reporting thereon to the Government of the sending State; (e) promoting friendly relations between the sending State and the receiving State, and developing their economic, cultural and scientific relations.
10

Ambassadors are diplomatic agents of the first class, who deal, as a rule with the Minister of Foreign Affairs or the Secretary of State, as the case may be. (Melquiades J. Gamboa, "Elements of Diplomatic and Consular Practice, A Glossary," Central Lawbook Publishing, Co., 1966, p. 19.)
11

Envoys are diplomatic agents of the second class. This is the title of the head of legation as distinguished from an embassy, the head of

which is called Ambassador Extraordinary and Plenipotentiary. Like the Ambassador, the envoy is also accredited to the Head of State. (Gamboa, p. 190.)
12

Charges d' Affairs are either en titre or ad interim. Charges d' Affairs en titre are appointed on a permanent basis and belong to the fourth class of diplomatic envoys, the other three being ambassadors, ministers plenipotentiary and envoys extraordinary, and ministers resident. He is the head of the legation in his own right and is not accredited to the head of State but to the foreign office. According to Radloric, charges d' affairs are sometimes used to described a person who has been placed in custody of the archives and other property of a mission in a country with which formal diplomatic relations are not maintained. Charges d' affairs ad interim, in contrast are usually those second in command of the diplomatic mission minister, counselor or first secretary, who are only temporarily in charge of the mission during the absence of the head of the mission. He is not accredited either to the Head of State or the Foreign Office. (Gamboa, Ibid., pp. 51-52.)
13

The classification of diplomatic representatives was considered significant before because direct communication with the head of state depended on the rank of the diplomat and, moreover, only powerful states were regarded as entitled to send envoys of the highest rank. At present however, diplomatic matters are usually discussed not with the head of state but with the foreign secretary regardless of the diplomat's rank. Moreover, it has become the practice now for even the smallest and the weakest states to send diplomatic representatives of the highest rank, even to the major powers. (Cruz, International Law, 1985 Edition, p. 145.)
14

Gamboa, supra., pp. 32-33. 48 SCRA 242.

15

16

J.L. Brierly, "The Law of Nations," Oxford University Press, 6th Edition, 1963, p. 244.
17

Denza, supra., at 16. Ibid.

18

19

Ibid., at 55.

20

Charles G. Fenwick, "International Law," Appleton-Century-Crofts, Inc., New York, 1948, p. 307-308.
21

The international law on sovereign immunity of states from suit in the courts of another state has evolved from national court decisions with good deal of variance in perspectives. Even though national cases have been the major source of pronouncements on sovereign immunity, it should be noted that these constitute evidence of customary international law now widely recognized. In the latter half of the 20th century, a great deal of consensus on what is covered by sovereign immunity appears to be emerging, i.e., that state immunity covers only acts which deal with the government functions of a state, and excludes, any of its commercial activities, or activities not related to "sovereign acts." The consensus involves a more defined differentiation between public acts (juri imperii) and private acts (jure gestionis). (Gary L. Maris, "International Law, An Introduction," University Press of America, 1984, p. 119; D.W. Grieg, "International Law," London Butterworths, 1970, p. 221.) The United States for example, does not claim immunity for its publicly owned or operated merchant vessels. The Italian courts have rejected claims of immunity from the US Shipping Board, although a state body, as it could not be identified with the American government on the ground that undertaking maritime navigation and business as a commercial enterprise do not constitute a sovereign act. (D.W. Grieg, "International Law," London Butterworths, 1970, p. 221.)
22

See Schooner Exchange vs. McFaddon, 7 Cranch 116 (1812), cited in Charles G. Fenwick, "International Law," New York, 3rd Edition (1948), p. 307.
23

United States of America, et al. vs. Guinto, etc., et al., G.R. No. 76607, 26 February 1990.
24

182 SCRA 644. At pp. 653-659. 191 SCRA 713

25

26

G.R. No. L-41299 February 21, 1983 SOCIAL SECURITY SYSTEM, petitioner, vs. COURT OF APPEALS, DAVID B. CRUZ, SOCORRO CONCIO CRUZ, and LORNA C. CRUZ, respondents. The Solicitor General for petitioner. Eribert D. Ignacio for respondents David Cruz, Socorro Concio Cruz and Lorna Cruz.

MELENCIO-HERRERA, J.: This Petition for Review on certiorari of the Decision of the Court of Appeals 1 stems from the following facts, as narrated by the Trial Court, adopted by the Court of Appeals, and quoted by both petitioner 2 and private respondents 3: Sometime in March, 1963 the spouses David B. Cruz and Socorro Concio Cruz applied for and were granted a real estate loan by the SSS with their residential lot located at Lozada Street, Sto. Rosario, Pateros, Rizal covered by Transfer Certificate of Title No. 2000 of the Register of Deeds of Rizal as collateral. Pursuant to this real estate ban said spouses executed on March 26, 1963 the corresponding real estate mortgage originally in the amount of P39,500.00 which was later increased to P48,000.00 covering the aforementioned property as shown in their mortgage contract, Exhibit A and 1. From the proceeds of the real estate loan the mortgagors constructed their residential house on the mortgaged property and were furnished by the SSS with a passbook to record the monthly payments of their amortizations (Exhibits B and B-1). The mortgagors, plaintiffs herein, complied with their monthly payments although there were times when delays were incurred in their monthly payments which were due every first five (5) days of the month (Exhibits 3-A to 3-N). On July 9, 1968, defendant SSS filed an application with the Provincial Sheriff of Rizal for the foreclosure of the real estate mortgage executed by the plaintiffs on the ground, among others: That the conditions of the mortgage have been broken since October,

1967 with the default on the part of the mortgagor to pay in full the installments then due and payable on the principal debt and the interest thereon, and, all of the monthly installments due and payable thereafter up to the present date; ... That by the terms of the contract herein above referred to, the indebtedness to the mortgagee as of June, 1968 amounts to Ten Thousand Seven Hundred Two Pesos & 58/100 (P10,702.58), Philippine Currency, excluding interests thereon, plus 20% of the total amount of the indebtedness as attorney's fees, also secured by the said mortgage. (Exhibit "C ")
Pursuant to this application for foreclosure, the notice of the Sheriff's Sale of the mortgaged property was initially published in the Sunday Chronicle in its issue of July 14, 1968 announcing the sale at public auction of the said mortgaged property. After this first publication of the notice, and before the second publication of the notice, plaintiff herein thru counsel formally wrote defendant SSS, a letter dated July 19, 1968 and received on the same date by said entity demanding, among others, for said defendant SSS to withdraw the foreclosure and discontinue the publication of the notice of sale of their property claiming that plaintiffs were up-to-date in the payment of their monthly amortizations (Exhibits "E" and "E-1"). In answer to this letter defendant SSS sent a telegram to Atty. Eriberto Ignacio requesting him to come to their office for a conference. This telegram was received by said counsel on July 23, 1968 (Exhibit "G " and "G-1 "). To this telegraphic answer, Atty. Ignacio sent a telegraphic reply suggesting instead that a representative of the SSS be sent to him because his clients were the aggrieved parties (Exhibit-. "G-2"). Nothing came out of the telegraphic communications between the parties and the second and third publications of the notice of foreclosure were published successively in the Sunday Chronicle in its issues of July 21 and 28, 1968 (Exhibits "N-1 " and "O-1"). 4

On July 24, 1968, the Cruz spouses, together with their daughter Lorna C. Cruz, instituted before the Court of First Instance of Rizal an action for damages and attorney's fees against the Social Security System (SSS) and the Provincial Sheriff of Rizal alleging, among other things, that they had fully and religiously paid their monthly amortizations and had not defaulted in any payment. In its Answer, with counterclaim, the SSS stressed its right to foreclose the mortgage executed in its favor by private respondents

by virtue of the automatic acceleration clause provided in the mortgage contract, even after private respondents had paid their amortization installments. In its counterclaim, the SSS prayed for actual and other damages, as well as attorney's fees, for malicious and baseless statements made by private respondents and published in the Manila Chronicle. On September 23, 1968, the Trial Court enjoined the SSS from holding the sale at public auction of private respondent's property upon their posting of a P2,000.00 bond executed in favor of the SSS. The Trial Court rendered judgment on March 5, 1971, the dispositive portion of which reads: WHEREFORE, judgment is rendered against defendant SSS, directing it to pay plaintiffs the following amounts: (a) P2,500.00 as actual damage; (b) P35,000.00 as moral damage; (c) P10,000.00 as exemplary or corrective damages; and (d) P5,000.00 as attorney's fees.
Defendant SSS shall further pay the costs. 5

In respect of the moral and temperate damages awarded, the Trial Court stated:
With respect to moral and temperate damages, the Court holds that the first publication of the notice was made in good faith but committed by defendant SSS in gross negligence considering the personnel at its command and the ease with which verifications of the actual defaulting mortgagors may be made. On this initial publication of the notice of foreclosure (Exhibits "M" and "M-1"), the Court believes plaintiffs are entitled to the amount of P5,000.00. The second publication of the notice of foreclosure is another matter. There was already notice by plaintiffs to defendant SSS that there was no reason for the foreclosure of their mortgaged property as they were never in default. Instead of taking any corrective measure to rectify its error, defendant SSS adopted a position of righteousness and followed the same course of action contending that no error has open committed. This act of defendant indeed was deliberate, calculated to cow plaintiffs into submission, and made obviously with malice. On this score, the Court believes defendant SSS should pay and indemnify plaintiffs jointly in the sum of P10,000.00. Lastly, on the third

publication of the notice of foreclosure, the Court finds this continued publication an outright disregard for the reputation and standing of plaintiffs. The publication having reached a bigger segment of society and also done with malice and callous disregard for the rights of its clients, defendant SSS should compensate plaintiffs jointly in the sum of P20,000.00. All in all, plaintiffs are entitled to P35,000.00 by way of moral damages. 6

On appeal, the Court of Appeals affirmed the lower Court judgment in a Decision promulgated on March 14, 1975, but upon SSS's Motion for Reconsideration, modified the judgment by the elimination of the P5,000.00 moral damages awarded on account of the initial publication of the foreclosure notice. To quote: xxx xxx xxx After a re-examination of the evidence, we find that the negligence of the appellant is not so gross as to warrant moral and temperate damages. The amount of P5,000.00 should be deducted from the total damages awarded to the plaintiffs. WHEREFORE, the decision promulgated on March 14, 1975 is hereby maintained with the sole modification that the amount of P5,000.00 awarded on account of the initial publication is eliminated so that the said amount should be deducted from the total damages awarded to the plaintiffs.
SO ORDERED. 7

In so far as exemplary and corrective damages are concerned, the Court of Appeals had this to say. The Court finds no extenuating circumstances to mitigate the irresponsible action of defendant SSS and for this reason, said defendant should pay exemplary and corrective damages in the sum of P10,000.00 ... Upon denial of its Motion for Reconsideration by respondent Court, the SSS filed this Petition alleging . I. Respondent Court of Appeals erred in not finding that under

Condition No. 10 of the Mortgage contract, which is a self-executing, automatic acceleration clause, all amortizations and obligations of the mortgagors become ipso jure due and demandable if they at any time fail to pay any of the amortizations or interest when due; II. Respondent Court of Appeals erred in holding that a previous notice to the mortgagor was necessary before the mortgage could be foreclosed; III. Respondent Court of Appeals erred in not holding that, assuming that there was negligence committed by subordinate employees of the SSS in staking 'Socorro C. Cruz' for 'Socorro J. Cruz' as the defaulting borrower, the fault cannot be attributed to the SSS, much less should the SSS be made liable for their acts done without its knowledge and authority; IV. Respondent Court of Appeals erred in holding that there is no extenuating circumstance to mitigate the liability of petitioner;
V. Respondent Court of Appeals erred in not holding that petitioner is not liable for damages not being a profit-oriented governmental institution but one performing governmental functions petitions. 8

For failure of the First Division to obtain concurrence of the five remaining members (Justices Plana and Gutierrez, Jr. could take no part), the case was referred to the Court en banc. The pivotal issues raised are: (1) whether the Cruz spouses had, in fact, violated their real estate mortgage contract with the SSS as would have warranted the publications of the notices of foreclosure; and (2) whether or not the SSS can be held liable for damages. The first issue revolves around the question of appreciation of the evidence by the lower Court as concurred in by the Court of Appeals. The appraisal should be left undisturbed following the general rule that factual findings of the Court of Appeals are not subject to review by this Court, the present case not being one of the recognized exceptions to that rule. 9 Accordingly, we are upholding the finding of the Court of Appeals that the SSS application for foreclosure was not justified, particularly considering that the real estate loan of P48,000.00 obtained by the Cruzes in March, 1963, was payable in

15 years with a monthly amortization of P425.18, and that as of July 14, 1968, the date of the first notice of foreclosure and sale, the outstanding obligation was still P38,875.06 and not P10,701.58, as published.
The appellant was not justified in applying for the extrajudicial foreclosure of the mortgage contract executed in its favor by the spouses, David B. Cruz and Socorro Concio-Cruz, Exh. 'A'. While it is true that the payments of the monthly installments were previously not regular, it is a fact that as of June 30, 1968 the appellee, David B. Cruz and Socorro Concio-Cruz were up-to-date and current in the payment of their monthly installments. Having accepted the prior late payments of the monthly installments, the appellant could no longer suddenly and without prior notice to the mortgagors apply for the extra-judicial foreclosure of the mortgage in July 1968. 10

A similar conclusion was reached by the trial Court.

Defendant's contention that there was clerical error in the amount of the mortgage loan due as of June, 1968 as per their application for foreclosure of real estate mortgage is a naive attempt to justify an untenable position. As a matter of fact plaintiffs were able to establish that the mortgagor who actually committed the violation of her mortgage loan was a certain 'Socorro J. Cruz' who was in arrears in the amount of P10,702.58 at the time the application for foreclosure of real estate mortgage was filed Exhibits "BB" and "EE"). Defendant mortgagee must have committed an error in picking the record of plaintiff 'Socorro C. Cruz' instead of the record of 'Socorro J. Cruz'. Defendant SSS, however, denied having committed any error and insists that their motion for foreclosure covers the real estate mortgage of spouses David E. Cruz and Socorro C. Cruz. This Court is nonetheless convinced that the foreclosure proceedings should have been on the real estate mortgage of 'Socorro J. Cruz' who was in arrears as of June, 1968 in the amount of P10,701.58, the exact amount mentioned in the application for foreclosure of real estate mortgage by defendant SSS.
11

We come now to the amendability of the SSS to judicial action and legal responsibility for its acts. To our minds, there should be no question on this score considering that the SSS is a juridical entity with a personality of its own. 12 It has corporate powers separate and distinct from the Government. 13 SSS' own organic act specifically provides that it can sue and be sued in Court. 14 These words "sue

and be sued" embrace all civil process incident to a legal action. 15 So that, even assuming that the SSS, as it claims, enjoys immunity from suit as an entity performing governmental functions, by virtue of the explicit provision of the aforecited enabling law, the Government must be deemed to have waived immunity in respect of the SSS, although it does not thereby concede its liability. That statutoy law has given to the private-citizen a remedy for the enforcement and protection of his rights. The SSS thereby has been required to submit to the jurisdiction of the Courts, subject to its right to interpose any lawful defense. Whether the SSS performs governmental or proprietary functions thus becomes unnecessary to belabor. For by that waiver, a private citizen may bring a suit against it for varied objectives, such as, in this case, to obtain compensation in damages arising from contract 16 and even for tort. A recent case squarely in point anent the principle, involving the National Power Corporation, is that of Rayo vs. Court of First Instance of Bulacan, 110 SCRA 457 (1981), wherein this Court, speaking through Mr. Justice Vicente Abad Santos, ruled: It is not necessary to write an extended dissertation on whether or not the NPC performs a governmental function with respect to the management and operation of the Angat Dam. It is sufficient to say that the government has organized a private corporation, put money in it and has snowed it to sue and be sued in any court under its charter. (R.A. No. 6395, Sec. 3[d]). As a government owned and controlled corporation, it has a personality of its own, distinct and separate from that of the Government. (See National Shipyards and Steel Corp. vs. CIR, et al., L-17874, August 31, 1963, 8 SCRA 78 1). Moreover, the charter provision that the NPC can 'sue and be sued in any court' is without qualification on the cause of action and accordingly it can include a tort claim such as the one instituted by the petitioners. The proposition that the SSS is not profit-oriented was rejected in the case of SSS Employees' Association vs. Hon. Soriano. 17 But even conceding that the SSS is not, in the main, operated for profit, it cannot be denied that, in so far as contractual loan agreements with private parties are concerned, the SSS enters into them for profit considering that the borrowers pay interest, which is money paid for

the use of money, plus other charges. In so far as it is argued that to hold the SSS liable for damages would be to deplete the benefit funds available for its covered members, suffice it to say, that expenditures of the System are not confined to the payment of social security benefits. For example, the System also has to pay the salaries of its personnel. Moreover, drawing a parallel with the NASSCO and the Virginia Tobacco Administration, whose funds are in the nature of public funds, it has been held that those funds may even be made the object of a notice of garnishment. 18 What is of paramount importance in this controversy is that an injustice is not perpetrated and that when damage is caused a citizen, the latter should have a right of redress particularly when it arises from a purely private and contractual relationship between said individual and the System. We find, however, that under the circumstances of the case, the SSS cannot be held liable for the damages as awarded by the Trial Court and the Appellate Tribunal. As basis for the award of actual damages, the Trial Court relied on the alleged expenses incurred by private respondents for the wardrobe they were supposed to use during their trip abroad, which was allegedly aborted because of the filing of the foreclosure application by the SSS. We find the foregoing too speculative. There could have been other reasons why the trip did not materialize. Moreover, it appears that private respondents' passports had already expired but that they made no effort to secure new passports. 19 Nor did they secure the necessary visas from the local consulates of foreign countries they intended to visit for their trip abroad. 20 Nor can the SSS be held liable for moral and temperate damages. As concluded by the Court of Appeals "the negligence of the appellant is not so gross as to warrant moral and temperate damages", 21 except that, said Court reduced those damages by only P5,000.00 instead of eliminating them. Neither can we agree with the findings of both the Trial Court and respondent Court that the SSS had acted maliciously or in bad faith. The SSS was of the belief that it was acting in the legitimate exercise of its right under the mortgage contract in the face

of irregular payments made by private respondents, and placed reliance on the automatic acceleration clause in the contract. The filing alone of the foreclosure application should not be a ground for an award of moral damages in the same way that a clearly unfounded civil action is not among the grounds for moral damages. 22 With the ruling out of compensatory, moral and temperate damages, the grant of exemplary or corrective damages should also be set aside. 23 Moreover, no proof has been submitted that the SSS had acted in a wanton, reckless and oppressive manner. 24 However, as found by both the Trial and Appellate Courts, there was clear negligence on the part of SSS when they mistook the loan account of Socorro J. Cruz for that of private respondent Socorro C. Cruz. Its attention was called to the error, but it adamantly refused to acknowledge its mistake. The SSS can be held liable for nominal damages. This type of damages is not for the purpose of indemnifying private respondents for any loss suffered by them but to vindicate or recognize their rights which have been violated or invaded by petitioner SSS. 25 The circumstances of the case also justify the award of attorney's fees, as granted by the Trial and Appellate Courts, particularly considering that private respondents were compelled to litigate for the prosecution of their interests. 26 WHEREFORE, the judgment sought to be reviewed is hereby modified in that petitioner SSS shall pay private respondents: P3,000.00 as nominal damages; and P5,000.00 as attorney's fees. Costs against petitioner Social Security System. SO ORDERED. Teehankee, Concepcion, Jr., Guerrero, Abad Santos, De Castro, Vasquez and Relova, JJ., concur. Fernando, C.J., concurs in the result. Plana, Escolin ** and Gutierrez, Jr., *** JJ., took no part.

Separate Opinions

AQUINO, J., concurring: I concur. The award of moral damages is not justified under arts. 2219 and 2220 of the Civil Code. I vote to award the private respondents the additional sum of P2,000 as litigation expenses. MAKASIAR, J., dissenting: I dissent. I To begin with, the negligent acts committed by the officers and employees of the petitioner, Social Security System, amounted to not simply a contractual breach but tort. For the record is clear that petitioner's officers and employees were grossly negligent bordering on malice or bad faith in applying for the extrajudicial foreclosure of the mortgage contract executed in its favor by the spouses David B. Cruz and Socorro Concio-Cruz, and that even after private respondents had brought to the attention of the petitioner's officers and employees their mistake, they insisted on their course of action, instead of making the necessary rectifications, which grossly negligent and oppressive acts caused damage to private respondents. As found by the Court of Appeals: The appellant was not justified in applying for the extrajudicial foreclosure of the mortgage contract executed in its favor by the spouses David B. Cruz and Socorro Concio-Cruz, Exh. 'A'. While it is true that the payments of the monthly installments were previously not regular, it is a fact that as of June 30, 1968 the appellees, David B. Cruz and Socorro Concio-Cruz were up-to-date and current in the

payment of their monthly installments. Having accepted the prior late payments of the monthly installments, the appellant could no longer suddenly and without prior notice to the mortgagors apply for the extra-judicial foreclosure of the mortgage in July, 1968. It is obvious that the appellant applied for the extra-judicial foreclosure of the mortgage in question because of the gross negligence of its employees. This negligence was aggravated when the appellant, after being informed of the error, insisted on proceeding with the extra-judicial foreclosure by invoking alleged violations of the mortgage contract. But these violations are either too minor to warrant the drastic step of foreclosure or were deemed condoned when the appellant accepted late payments prior to June 30, 1968. Hence the trial court did not err in concluding that 'the act of defendant indeed was deliberate, calculated to cow plaintiffs into submission and made obviously with malice (p. 54, rec.; emphasis supplied). The circumstance that there was a pre-existing contractual relationship between the herein contending parties, does not bar the tort liability of the officers and employees of petitioner; because tort liability may still exist despite presence of contractual relations as the act that breaks the contract may also be a tort, as in this case (Air France vs. Carrascoso, L-21438, Sept. 28, 1966, 18 SCRA 155, 168169; Singson & Castillo vs. Bank of the Philippine Islands, L-24837, June 27, 1968, 23 SCRA 1117, 1119-20). Consequently, a tortious act being involved, the applicable provision of law is Article 2180 in relation to Article 2176 of the New Civil Code. Under Article 2180, ... The State is responsible in like manner when it acts through a special agent; but not when the damage has been caused by the official to whom the task done properly pertains, in which case what is provided in Article 2176 shall be applicable. In the case at bar, the petitioner Social Security System as the instrumentality of the State to implement the social justice guarantee enunciated in the Constitution, did not act through a special agent. Hence, the Social Security System cannot be liable for the damages caused by the tortious acts of its officers and employees while in the performance of their regular functions. The remedy therefore of

private respondents is to proceed against the guilty officers and employees of petitioner Social Security System as mandated by Article 2176 of the New Civil Code. For as held in the leading case of Merritt vs. Government of the Philippine Islands (34 Phil. 311). The responsibility of the State is limited by Article 1903 to the case wherein it acts through a special agent, ... so that in representation of the state and being bound to act as an agent thereof, he executes the trust confided to him. This concept does not apply to any executive agent who is an employee of the active administration and who on his own responsibility performs the functions which are inherent in and naturally pertain to his office and which are regulated by law and the regulations. While Article 2180 of the New Civil Code was not invoked by the petitioner as a defense, this does not prevent this Tribunal from taking cognizance of the same. For as stressed in Ortigas, Jr. vs. Lufthansa German Airlines (June 30, 1975, 64 SCRA 610, 633), failure to assign a defense as an error on appeal is a pure technicality that should not prevail over the substantial issues in a controversy as the same would not serve the interest of justice, and "this Court is clothed with ample authority to review matters even if they are not assigned as errors in the appeal, if it finds that our consideration is necessary in arriving at a just decision of the case" (citing Saura & Export Co., Inc., May 31, 1963, 8 SCRA 143). Further, We have, time and again, re-stated the rule that the Supreme Court can suspend its own rules to serve the ends of justice (Jose vs. C.A., et al., L-38581, March 31, 1976; Phil. Blooming Mills Employees Organization, et al. vs. PBM Co., et al., L-31195, 51 SCRA 189, 215; Ronquillo vs. Marasigan, May 31, 1962, 5 SCRA 304, 312-313; Ordoveza vs. Raymundo, 63 Phil. 275). The principle that a defense not expressly pleaded is deemed waived unless such failure is satisfactorily explained, is merely a general rule which is subject to exceptions, among which is when the Court can take judicial notice of such defense. In this case, We can take judicial notice of the law, like Article 2180 of the New Civil Code. It must be emphasized that the courts have as much duty as the Commission on

August to protect the public treasury from being mulcted or raided illegally. And this becomes more imperative considering that a substantial portion of the funds of the petitioner comes from the contributions of- employees and workers in private firms and is therefore in the nature of a trust fund to be expended only for their welfare and benefit, with the government merely giving some subsidy. Any amount of damages illegally assessed against the Social Security System will deplete the benefit funds available to its covered members for the contingencies of sickness, disability, retirement or death. It cannot likewise be seriously questioned that the Social Security System is comprehended in the definition in Section 2 of the Revised Administrative Code of the term "Government of the Republic of the Philippines ... which refers to the corporate governmental entity through which the functions of government are exercised throughout the Philippine Islands, including, save as the contrary appears from the context, the various arms through which political authority is made effective in the Philippines, whether pertaining to the central Government or to the provincial or municipal branches or other forms of local government." And the second paragraph of said Section 2 provides that the term "national government" refers to the central government as distinguished from the different forms of local government. There is nothing therein nor in the Social Security Act, as amended, intimating that the national government does not include the Social Security System. It is true that the Social Security System has a corporate or juridical personality of its own. But this does not remove it as an integral part of the national or central government. For such corporate or juridical personality invested in it is more for facility and convenience in the attainment of the objectives for which it was created by the legislative. Such vesting of corporate or juridical personality in the Social Security System was never intended to destroy the shield from liability afforded it as an integral part of the State or Government by Article 2180 of the New Civil Code. Relatedly, such corporate or juridical personality of the Social Security System and the express provision of the law creating the same that it can sue and be sued, have the effect of merely waiving its immunity from suit as an entity performing governmental functions. Such waiver of its immunity from

suit is not an admission of its liability. Such waiver merely allows a private citizen a remedy for the enforcement and protection of his rights, but always subject to the lawful defenses of the Social Security System one of which is Article 2180 of the New Civil Code as aforestated. In other words, such waiver of immunity from suit is not equivalent to instant liability. The Social Security System can only be held liable for damages arising from the tortious acts of its officers and employees only if it acts through a special agent, which is not true in the case at bar. II It must be finally stressed that the Social Security System cannot be liable for damages because it is an entity of government performing governmental functions; hence, not profit-oriented. The 1963 doctrine in SSSEA vs. Soriano (7 SCRA 1016 [1963]) that the system is exercising proprietary functions, is no longer controlling. For in 1969, the distinction between constituent and ministrant functions of the Government as laid down in the case of Bacani vs. Nacoco (100 Phil. 468 [1956]) has been obliterated. In the case of Agricultural Credit and Cooperative Financing Administration (ACCFA) vs. Confederation of Unions in Government Corporations and Offices (CUGCO) [30 SCRA 649 (1969)], this Court in reexamining the aforesaid Bacani ruling observed that the trend has been to abandon and reject the traditional "Constituent- Ministrant" criterion in governmental functions in favor of the more responsive postulate that the growing complexities of modern society have rendered the traditional classification of government functions unrealistic and obsolete. WE held in the ACCFA case, thus: The growing complexities of modern society, however, have rendered this traditional classification of the functions of government quite unrealistic, not to say obsolete. The areas which used to be left to private enterprise and initiative and which the government was called upon to enter optionally, and only 'because it was better equipped to administer for the public welfare than is any private individual or groups of individuals,' continue to lose their well-defined boundaries

and to be absorbed within activities that the government must have undertaken in its sovereign capacity if it is to meet the increasing social challenges of the times. Here as almost everywhere, else, the tendency is undoubtedly towards a greater socialization of economic forces. Here of course, this development was envisioned indeed adopted as a national policy, by the Constitution itself in its declaration of principle concerning the promotion of social justice. Chief Justice Fernando, then Associate Justice, in his concurring opinion stressed that: The decision reached by this Court so ably given expression in the opinion of Justice Makalintal, characterized with vigor, clarity and precision, represents what for me is a clear tendency not to be necessarily bound by our previous pronouncements on what activities partake of a nature that is governmental. Of even greater significance, there is a definite rejection of the 'constituent-ministrant' criterion of governmental functions, followed in Bacani vs. National Coconut Corporation. That indeed is cause for gratification. For me at least, there is again full adherence to the basic philosophy of the Constitution as to the extensive and vast power lodged in our government to cope with the social and economic problems that even now sorely beset us. There is therefore full concurrence on my part to the opinion of the court, distinguished by its high quality of juristic craftsmanship (pp. 666-667). xxx xxx xxx 4. With the decision reached by us today, the government is freed from the compulsion exerted by the Bacani doctrine of the 'constituent-ministrant' test as a criterion for the type of activity in which it may engage. It constricting effect is consigned to oblivion. No doubts or misgivings need assail us that government efforts to promote the public wealth whether through regulatory legislation of vast scope and emplitude or through the undertaking of business activities, would have to face a searching and rigorous scrutiny. It is clear that their legitimacy cannot be challenged on the ground alone of their being offensive to the implications of the laissez- faire concept. Unless there be a repugnancy then to the limitations expressly set forth in the Constitution to protect individual rights, the

government enjoys a much wider latitude of action as to the means it chooses to cope with grave social and economic problems that urgently press for solution. For me, at least, that is to manifest deference to the philosophy of our fundamental law. Hence my full concurrence, as announced at the outset. (pp- 682-683, emphasis supplied). The 1935 Constitution declared: Sec. 5. The promotion of social justice to insure the well being and economic security of all the people should be the concern of the State. (Art. II, Declaration of Principles). The present 1973 Constitution provides under its Declaration of Principles and State Policies (Article 11), that The State shall promote social justice to ensure the dignity, welfare, and security of all the people. Towards this end, the State shall regulate the acquisition, ownership, use, enjoyment, and disposition of private property, and equitably diffuse property ownership and profits. (Section 6); and The State shall establish, maintain, and ensure adequate social services in the field of education, health, housing, employment, welfare, and social security to guarantee the enjoyment by the people of a decent standard of living. (Section 7). The strictly governmental function of the SSS is spelled out unmistakably in Section 2 of R.A. No. 1161 entitled "The Social Security Act of 1954," thus: It is hereby declared to be the policy of the Republic of the Philippines to develop, establish gradually and perfect a social security system which shall be suitable to the needs of the people throughout the Philippines, and shall provide protection against the hazards of disability, sickness, old age and death. As stated in the Explanatory Note to the Bill that became R. A. No. 1161, the Social Security Act of 1954:

It is a recognized principle in free societies that the State must help its citizens to make provision for emergencies beyond their control, such as unemployment, sickness requiring expensive medical treatment, and similar emergencies to a greater or lesser degree by means of social security legislation in a variety of forms. And this Court, in Roman Catholic Archbishop of Manila vs. SSS (L15045, 1 SCRA 10 [1961]), declared that "the Social Security Law was enacted pursuant to the 'policy of the Republic to develop, establish gradually and perfect a social security system which shall be suitable to the needs of the people throughout the Philippines and provide protection to employees against the hazards of disability, sickness, old age and death' (Sec. 2, Republic Act No. 1161, as amended). Such enactment is a legitimate exercise of the police power. It affords protection to labor, especially to working women and minors, and is in full accord with the constitutional provisions on the 'promotion of social justice to insure the well being and economic security of all the people. It is interesting to note that aforesaid pronouncement of this Court was incorporated in the Social Security Act (R.A. 1161) by Presidential Decree No. 24 issued on October 19, 1972. Thus, as amended by said Decree, its section 2 now reads: "It is the policy of the Republic of the Philippines to establish, develop, promote and perfect a sound viable 'tax exempt social security service suitable to the needs of the people throughout the Philippines, which shall provide to covered employees and their families protection against the hazards of disability, sickness, old age, and death, with a view to promoting their well-being in the spirit of social justice" (emphasis supplied). And one of its whereases expressly states that "the measure is necessary to effect reforms in SSS operations and to revitalize its structure as an important agency in the promotion of the social and economic development programs of the Government; ... (emphasis supplied). Considering therefore that the establishment and maintenance of an adequate social security and social services, which the Social Security System seeks to perform and achieve are functions pursuant to the basic constitutional mandate directing the State to promote "social justice to insure the well-being and economic security of all

the people" (1935 Constitution) or "to insure the dignity, welfare and security of all the people" as well as the police power of the State, the inescapable conclusion is that the function of the SSS is and has always been governmental. It thus becomes clear that petitioner Social Security System, under the obtaining facts and applicable laws in the case, is not liable for the damages caused to private respondents by the tortious acts of its officers and employees to whom the task done properly pertained. A contrary rule as that enunciated in the majority opinion invites conspiracy between officials and employees of the Social Security System and private parties to create financial liabilities against the System. Its funds are public funds and more importantly trust funds, which must be protected.

Separate Opinions

AQUINO, J., concurring: I concur. The award of moral damages is not justified under arts. 2219 and 2220 of the Civil Code. I vote to award the private respondents the additional sum of P2,000 as litigation expenses.

MAKASIAR, J., dissenting: I dissent. I To begin with, the negligent acts committed by the officers and employees of the petitioner, Social Security System, amounted to not simply a contractual breach but tort. For the record is clear that

petitioner's officers and employees were grossly negligent bordering on malice or bad faith in applying for the extrajudicial foreclosure of the mortgage contract executed in its favor by the spouses David B. Cruz and Socorro Concio-Cruz, and that even after private respondents had brought to the attention of the petitioner's officers and employees their mistake, they insisted on their course of action, instead of making the necessary rectifications, which grossly negligent and oppressive acts caused damage to private respondents. As found by the Court of Appeals: The appellant was not justified in applying for the extrajudicial foreclosure of the mortgage contract executed in its favor by the spouses David B. Cruz and Socorro Concio-Cruz, Exh. 'A'. While it is true that the payments of the monthly installments were previously not regular, it is a fact that as of June 30, 1968 the appellees, David B. Cruz and Socorro Concio-Cruz were up-to-date and current in the payment of their monthly installments. Having accepted the prior late payments of the monthly installments, the appellant could no longer suddenly and without prior notice to the mortgagors apply for the extra-judicial foreclosure of the mortgage in July, 1968. It is obvious that the appellant applied for the extra-judicial foreclosure of the mortgage in question because of the gross negligence of its employees. This negligence was aggravated when the appellant, after being informed of the error, insisted on proceeding with the extra-judicial foreclosure by invoking alleged violations of the mortgage contract. But these violations are either too minor to warrant the drastic step of foreclosure or were deemed condoned when the appellant accepted late payments prior to June 30, 1968. Hence the trial court did not err in concluding that 'the act of defendant indeed was deliberate, calculated to cow plaintiffs into submission and made obviously with malice (p. 54, rec.; emphasis supplied). The circumstance that there was a pre-existing contractual relationship between the herein contending parties, does not bar the tort liability of the officers and employees of petitioner; because tort liability may still exist despite presence of contractual relations as the act that breaks the contract may also be a tort, as in this case (Air France vs. Carrascoso, L-21438, Sept. 28, 1966, 18 SCRA 155, 168-

169; Singson & Castillo vs. Bank of the Philippine Islands, L-24837, June 27, 1968, 23 SCRA 1117, 1119-20). Consequently, a tortious act being involved, the applicable provision of law is Article 2180 in relation to Article 2176 of the New Civil Code. Under Article 2180, ... The State is responsible in like manner when it acts through a special agent; but not when the damage has been caused by the official to whom the task done properly pertains, in which case what is provided in Article 2176 shall be applicable. In the case at bar, the petitioner Social Security System as the instrumentality of the State to implement the social justice guarantee enunciated in the Constitution, did not act through a special agent. Hence, the Social Security System cannot be liable for the damages caused by the tortious acts of its officers and employees while in the performance of their regular functions. The remedy therefore of private respondents is to proceed against the guilty officers and employees of petitioner Social Security System as mandated by Article 2176 of the New Civil Code. For as held in the leading case of Merritt vs. Government of the Philippine Islands (34 Phil. 311). The responsibility of the State is limited by Article 1903 to the case wherein it acts through a special agent, ... so that in representation of the state and being bound to act as an agent thereof, he executes the trust confided to him. This concept does not apply to any executive agent who is an employee of the active administration and who on his own responsibility performs the functions which are inherent in and naturally pertain to his office and which are regulated by law and the regulations. While Article 2180 of the New Civil Code was not invoked by the petitioner as a defense, this does not prevent this Tribunal from taking cognizance of the same. For as stressed in Ortigas, Jr. vs. Lufthansa German Airlines (June 30, 1975, 64 SCRA 610, 633), failure to assign a defense as an error on appeal is a pure technicality that should not prevail over the substantial issues in a controversy as the same would not serve the interest of justice, and "this Court is clothed with ample authority to review matters even if they are not

assigned as errors in the appeal, if it finds that our consideration is necessary in arriving at a just decision of the case" (citing Saura & Export Co., Inc., May 31, 1963, 8 SCRA 143). Further, We have, time and again, re-stated the rule that the Supreme Court can suspend its own rules to serve the ends of justice (Jose vs. C.A., et al., L-38581, March 31, 1976; Phil. Blooming Mills Employees Organization, et al. vs. PBM Co., et al., L-31195, 51 SCRA 189, 215; Ronquillo vs. Marasigan, May 31, 1962, 5 SCRA 304, 312-313; Ordoveza vs. Raymundo, 63 Phil. 275). The principle that a defense not expressly pleaded is deemed waived unless such failure is satisfactorily explained, is merely a general rule which is subject to exceptions, among which is when the Court can take judicial notice of such defense. In this case, We can take judicial notice of the law, like Article 2180 of the New Civil Code. It must be emphasized that the courts have as much duty as the Commission on August to protect the public treasury from being mulcted or raided illegally. And this becomes more imperative considering that a substantial portion of the funds of the petitioner comes from the contributions of- employees and workers in private firms and is therefore in the nature of a trust fund to be expended only for their welfare and benefit, with the government merely giving some subsidy. Any amount of damages illegally assessed against the Social Security System will deplete the benefit funds available to its covered members for the contingencies of sickness, disability, retirement or death. It cannot likewise be seriously questioned that the Social Security System is comprehended in the definition in Section 2 of the Revised Administrative Code of the term "Government of the Republic of the Philippines ... which refers to the corporate governmental entity through which the functions of government are exercised throughout the Philippine Islands, including, save as the contrary appears from the context, the various arms through which political authority is made effective in the Philippines, whether pertaining to the central Government or to the provincial or municipal branches or other forms of local government." And the second paragraph of said Section 2 provides that the term "national government" refers to the central government as distinguished from the different forms of local government. There is nothing therein nor in the Social Security Act,

as amended, intimating that the national government does not include the Social Security System. It is true that the Social Security System has a corporate or juridical personality of its own. But this does not remove it as an integral part of the national or central government. For such corporate or juridical personality invested in it is more for facility and convenience in the attainment of the objectives for which it was created by the legislative. Such vesting of corporate or juridical personality in the Social Security System was never intended to destroy the shield from liability afforded it as an integral part of the State or Government by Article 2180 of the New Civil Code. Relatedly, such corporate or juridical personality of the Social Security System and the express provision of the law creating the same that it can sue and be sued, have the effect of merely waiving its immunity from suit as an entity performing governmental functions. Such waiver of its immunity from suit is not an admission of its liability. Such waiver merely allows a private citizen a remedy for the enforcement and protection of his rights, but always subject to the lawful defenses of the Social Security System one of which is Article 2180 of the New Civil Code as aforestated. In other words, such waiver of immunity from suit is not equivalent to instant liability. The Social Security System can only be held liable for damages arising from the tortious acts of its officers and employees only if it acts through a special agent, which is not true in the case at bar. II It must be finally stressed that the Social Security System cannot be liable for damages because it is an entity of government performing governmental functions; hence, not profit-oriented. The 1963 doctrine in SSSEA vs. Soriano (7 SCRA 1016 [1963]) that the system is exercising proprietary functions, is no longer controlling. For in 1969, the distinction between constituent and ministrant functions of the Government as laid down in the case of Bacani vs. Nacoco (100 Phil. 468 [1956]) has been obliterated. In the case of Agricultural Credit and Cooperative Financing Administration (ACCFA) vs. Confederation of Unions in Government Corporations and Offices (CUGCO) [30 SCRA 649 (1969)], this Court in re-

examining the aforesaid Bacani ruling observed that the trend has been to abandon and reject the traditional "Constituent- Ministrant" criterion in governmental functions in favor of the more responsive postulate that the growing complexities of modern society have rendered the traditional classification of government functions unrealistic and obsolete. WE held in the ACCFA case, thus: The growing complexities of modern society, however, have rendered this traditional classification of the functions of government quite unrealistic, not to say obsolete. The areas which used to be left to private enterprise and initiative and which the government was called upon to enter optionally, and only 'because it was better equipped to administer for the public welfare than is any private individual or groups of individuals,' continue to lose their well-defined boundaries and to be absorbed within activities that the government must have undertaken in its sovereign capacity if it is to meet the increasing social challenges of the times. Here as almost everywhere, else, the tendency is undoubtedly towards a greater socialization of economic forces. Here of course, this development was envisioned indeed adopted as a national policy, by the Constitution itself in its declaration of principle concerning the promotion of social justice. Chief Justice Fernando, then Associate Justice, in his concurring opinion stressed that: The decision reached by this Court so ably given expression in the opinion of Justice Makalintal, characterized with vigor, clarity and precision, represents what for me is a clear tendency not to be necessarily bound by our previous pronouncements on what activities partake of a nature that is governmental. Of even greater significance, there is a definite rejection of the 'constituent-ministrant' criterion of governmental functions, followed in Bacani vs. National Coconut Corporation. That indeed is cause for gratification. For me at least, there is again full adherence to the basic philosophy of the Constitution as to the extensive and vast power lodged in our government to cope with the social and economic problems that even now sorely beset us. There is therefore full concurrence on my part to the opinion of the court, distinguished by its high quality of juristic

craftsmanship (pp. 666-667). xxx xxx xxx 4. With the decision reached by us today, the government is freed from the compulsion exerted by the Bacani doctrine of the 'constituent-ministrant' test as a criterion for the type of activity in which it may engage. It constricting effect is consigned to oblivion. No doubts or misgivings need assail us that government efforts to promote the public wealth whether through regulatory legislation of vast scope and emplitude or through the undertaking of business activities, would have to face a searching and rigorous scrutiny. It is clear that their legitimacy cannot be challenged on the ground alone of their being offensive to the implications of the laissez- faire concept. Unless there be a repugnancy then to the limitations expressly set forth in the Constitution to protect individual rights, the government enjoys a much wider latitude of action as to the means it chooses to cope with grave social and economic problems that urgently press for solution. For me, at least, that is to manifest deference to the philosophy of our fundamental law. Hence my full concurrence, as announced at the outset. (pp- 682-683, emphasis supplied). The 1935 Constitution declared: Sec. 5. The promotion of social justice to insure the well being and economic security of all the people should be the concern of the State. (Art. II, Declaration of Principles). The present 1973 Constitution provides under its Declaration of Principles and State Policies (Article 11), that The State shall promote social justice to ensure the dignity, welfare, and security of all the people. Towards this end, the State shall regulate the acquisition, ownership, use, enjoyment, and disposition of private property, and equitably diffuse property ownership and profits. (Section 6); and The State shall establish, maintain, and ensure adequate social

services in the field of education, health, housing, employment, welfare, and social security to guarantee the enjoyment by the people of a decent standard of living. (Section 7). The strictly governmental function of the SSS is spelled out unmistakably in Section 2 of R.A. No. 1161 entitled "The Social Security Act of 1954," thus: It is hereby declared to be the policy of the Republic of the Philippines to develop, establish gradually and perfect a social security system which shall be suitable to the needs of the people throughout the Philippines, and shall provide protection against the hazards of disability, sickness, old age and death. As stated in the Explanatory Note to the Bill that became R. A. No. 1161, the Social Security Act of 1954: It is a recognized principle in free societies that the State must help its citizens to make provision for emergencies beyond their control, such as unemployment, sickness requiring expensive medical treatment, and similar emergencies to a greater or lesser degree by means of social security legislation in a variety of forms. And this Court, in Roman Catholic Archbishop of Manila vs. SSS (L15045, 1 SCRA 10 [1961]), declared that "the Social Security Law was enacted pursuant to the 'policy of the Republic to develop, establish gradually and perfect a social security system which shall be suitable to the needs of the people throughout the Philippines and provide protection to employees against the hazards of disability, sickness, old age and death' (Sec. 2, Republic Act No. 1161, as amended). Such enactment is a legitimate exercise of the police power. It affords protection to labor, especially to working women and minors, and is in full accord with the constitutional provisions on the 'promotion of social justice to insure the well being and economic security of all the people. It is interesting to note that aforesaid pronouncement of this Court was incorporated in the Social Security Act (R.A. 1161) by Presidential Decree No. 24 issued on October 19, 1972. Thus, as amended by said Decree, its section 2 now reads: "It is the policy of the Republic of the Philippines to establish, develop, promote and

perfect a sound viable 'tax exempt social security service suitable to the needs of the people throughout the Philippines, which shall provide to covered employees and their families protection against the hazards of disability, sickness, old age, and death, with a view to promoting their well-being in the spirit of social justice" (emphasis supplied). And one of its whereases expressly states that "the measure is necessary to effect reforms in SSS operations and to revitalize its structure as an important agency in the promotion of the social and economic development programs of the Government; ... (emphasis supplied). Considering therefore that the establishment and maintenance of an adequate social security and social services, which the Social Security System seeks to perform and achieve are functions pursuant to the basic constitutional mandate directing the State to promote "social justice to insure the well-being and economic security of all the people" (1935 Constitution) or "to insure the dignity, welfare and security of all the people" as well as the police power of the State, the inescapable conclusion is that the function of the SSS is and has always been governmental. It thus becomes clear that petitioner Social Security System, under the obtaining facts and applicable laws in the case, is not liable for the damages caused to private respondents by the tortious acts of its officers and employees to whom the task done properly pertained. A contrary rule as that enunciated in the majority opinion invites conspiracy between officials and employees of the Social Security System and private parties to create financial liabilities against the System. Its funds are public funds and more importantly trust funds, which must be protected. Footnotes 1 Penned by Justice Ramon C. Fernandez and concurred in by Justices Efren I. Plana and Venicio Escolin. 2 pp. 3-7, Petitioner's Brief. 3 pp. 2-5, Respondents' Brief.

4 pp, 70-71, Record on Appeal. 5 p. 74, Record on Appeal, p. 62 Rollo. 6 pp. 73-74, Record on Appeal. 7 p. 59, Rollo. 8 pp. A-B, Brief for the Petitioner, p. 136, Rollo. 9 Talosig vs. Vda. de Nieva, 43 SCRA 473; Evangelists & Co. vs. Abad Santos, 51 SCRA 416; Tiongco vs. De la Merced, 58 SCRA 90; Perido vs. Perido, 63 SCRA 98; Alaras vs. Court of Appeals, 64 SCRA 671; T.J. Wolff & Co., Inc. vs. Moralde, 81 SCRA 624. 10 p. 54, Rollo. 11 pp.72-73; Record on Appeal. 12 SSS Employees' Association (PAFLU) vs. Soriano, 7 SCRA 1016(1963). 13 SSS Employees' Association vs. Soriano, 9 SCRA 511 (1963). 14 Sec. 4 (k) RA 1161; Sec. 4 (k) PD 24. 15 Sinco, Philippine Political Law, Revised Ed., p. 34. 16 See Noda vs. Social Security System, 109 SCRA 218 (1981). 17 9 SCRA 511 (1963). 18 NASSCO vs. Court of Industrial Relations, 8 SCRA 781 (1963); PNB vs. Pabalan, 83 SCRA 595 (1978). 19 T.s.n., August 20, 1969, pp. 91-101. 20 T.s.n., Ibid., 101; p. 20, Brief for defendant-appellant, Court of Appeals. 21 p.2 Resolution, p. 59, Rollo.

22 Malonzo vs. Galang, 109 Phil.16 (1960); Enervida vs. de la Torre, 55 SCRA 339 (1974). 23 Art. 2234, Civil Code. 24 Art. 2232, Ibid. 25 Art. 2221, Ibid 26 Art. 2208, Ibid. ** Justices Efren I. Plana and Venicio Escolin took part in the Decision under review. *** Justice Hugo E. Gutierrez, -Jr., then Acting Solicitor General, filed the Brief for petitioner.

Bureau of Printing v. Bureau of Printing Employees Association (NLU) G.R. No. L-15751January 28, 1961 Gutierrez David, J. Facts: The action in question was upon complaint of the respondents Bureau of Printing Employees Association (NLU) Pacifico Advincula, Roberto Mendoza, Ponciano Arganda and Teodulo Toleran filed by an acting prosecutor of the Industrial Court against herein petitioner Bureau of Printing, Serafin Salvador, the Acting Secretary of the Department of General Services, and Mariano Ledesma the Director of the Bureau of Printing. The complaint alleged that Serafin Salvador and Mariano Ledesma have been engaging in unfair labor practices by interfering with, or coercing the employees of the Bureau of Printing particularly the members of the complaining association petition, in the exercise of their right to self-organization an discriminating in regard to hire and tenure of their employment in order to discourage them from pursuing the union activities. Issue: whether the action against the BOP is a suit against the State without its consent Held: Yes. The Bureau of Printing is an office of the Government created by the Administrative Code of 1916 (Act No. 2657). As such instrumentality of the Government, it operates under the direct supervision of the Executive Secretary, Office of the President, and is charged with the execution of all printing and binding, including work incidental to those processes, required by the National Government and such other work of the same character as said Bureau may, by law or by order of the (Secretary of Finance) Executive Secretary, be authorized to undertake . . .. (See. 1644, Rev. Adm. Code). It has no corporate existence, and its

appropriations are provided for in the General Appropriations Act. Designed to meet the printing needs of the Government, it is primarily a service bureau and obviously, not engaged in business or occupation for pecuniary profit. It is true, as stated in the order complained of, that the Bureau of Printing receives outside jobs and that many of its employees are paid for overtime work on regular working days and on holidays, but these facts do not justify the conclusion that its functions are exclusively proprietary in nature. Overtime work in the Bureau of Printing is done only when the interest of the service so requires (sec. 566, Rev. Adm. Code). As a matter of administrative policy, the overtime compensation may be paid, but such payment is discretionary with the head of the Bureau depending upon its current appropriations, so that it cannot be the basis for holding that the functions of said Bureau are wholly proprietary in character. Anent the additional work it executes for private persons, we find that such work is done upon request, as distinguished from those solicited, and only as the requirements of Government work will permit (sec. 1654, Rev. Adm. Code), and upon terms fixed by the Director of Printing, with the approval of the Department Head (sec. 1655, id.). As shown by the uncontradicted evidence of the petitioners, most of these works consist of orders for greeting cards during Christmas from government officials, and for printing of checks of private banking institutions. On those greeting cards, the Government seal, of which only the Bureau of Printing is authorized to use, is embossed, and on the bank cheeks, only the Bureau of Printing can print the reproduction of the official documentary stamps appearing thereon. The volume of private jobs done, in comparison with government jobs, is only one-half of 1 per cent, and in computing the costs for work done for private parties, the Bureau does not include profit because it is not allowed to make any. Clearly, while the Bureau of Printing is allowed to undertake private printing jobs, it cannot be pretended that it is thereby an industrial or business concern. The additional work it executes for private parties is merely incidental to its function, and although such work may be deemed proprietary in character, there is no showing that the employees performing said proprietary function are separate and distinct from

those employed in its general governmental functions. Indeed, as an office of the Government, without any corporate or juridical personality, the Bureau of Printing cannot be sued. (Sec. 1, Rule 3, Rules of Court). Any suit, action or proceeding against it, if it were to produce any effect, would actually be a suit, action or proceeding against the Government itself, and the rule is settled that the Government cannot be sued without its consent, much less over its objection.

G.R. No. 104269 November 11, 1993 DEPARTMENT OF AGRICULTURE, petitioner, vs. THE NATIONAL LABOR RELATIONS COMMISSION, et al., respondents. Roy Lago Salcedo for private respondents.

VITUG, J.: For consideration are the incidents that flow from the familiar doctrine of non-suability of the state. In this petition for certiorari, the Department of Agriculture seeks to nullify the Resolution, 1 dated 27 November 1991, of the National Labor Relations Commission (NLRC), Fifth Division, Cagayan de Oro City, denying the petition for injunction, prohibition and mandamus that prays to enjoin permanently the NLRC's Regional Arbitration Branch X and Cagayan de Oro City Sheriff from enforcing the decision 2 of 31 May 1991 of the Executive Labor Arbiter and from attaching and executing on petitioner's property. The Department of Agriculture (herein petitioner) and Sultan Security Agency entered into a contract 3 on 01 April 1989 for security services to be provided by the latter to the said governmental entity. Save for the increase in the monthly rate of the guards, the same terms and conditions were also made to apply to another contract, dated 01 May 1990, between the same parties. Pursuant to their arrangements, guards were deployed by Sultan Agency in the various premises of the petitioner. On 13 September 1990, several guards of the Sultan Security Agency filed a complaint for underpayment of wages, non-payment of 13th month pay, uniform allowances, night shift differential pay, holiday pay and overtime pay, as well as for damages, 4 before the Regional Arbitration Branch X of Cagayan de Oro City, docketed as NLRC Case No. 10-09-00455-90 (or 10-10-00519-90, its original docket number), against the Department of Agriculture and Sultan Security Agency.

The Executive Labor Arbiter rendered a decision on 31 May finding herein petitioner and jointly and severally liable with Sultan Security Agency for the payment of money claims, aggregating P266,483.91, of the complainant security guards. The petitioner and Sultan Security Agency did not appeal the decision of the Labor Arbiter. Thus, the decision became final and executory. On 18 July 1991, the Labor Arbiter issued a writ of execution. 5 commanding the City Sheriff to enforce and execute the judgment against the property of the two respondents. Forthwith, or on 19 July 1991, the City Sheriff levied on execution the motor vehicles of the petitioner, i.e. one (1) unit Toyota Hi-Ace, one (1) unit Toyota Mini Cruiser, and one (1) unit Toyota Crown. 6 These units were put under the custody of Zacharias Roa, the property custodian of the petitioner, pending their sale at public auction or the final settlement of the case, whichever would come first. A petition for injunction, prohibition and mandamus, with prayer for preliminary writ of injunction was filed by the petitioner with the National Labor Relations Commission (NLRC), Cagayan de Oro, alleging, inter alia, that the writ issued was effected without the Labor Arbiter having duly acquired jurisdiction over the petitioner, and that, therefore, the decision of the Labor Arbiter was null and void and all actions pursuant thereto should be deemed equally invalid and of no legal, effect. The petitioner also pointed out that the attachment or seizure of its property would hamper and jeopardize petitioner's governmental functions to the prejudice of the public good. On 27 November 1991, the NLRC promulgated its assailed resolution; viz: WHEREFORE, premises considered, the following orders are issued: 1. The enforcement and execution of the judgments against petitioner in NLRC RABX Cases Nos. 10-10-00455-90; 10-10-0481-90 and 1010-00519-90 are temporarily suspended for a period of two (2) months, more or less, but not extending beyond the last quarter of calendar year 1991 to enable petitioner to source and raise funds to satisfy the judgment awards against it; 2. Meantime, petitioner is ordered and directed to source for funds

within the period above-stated and to deposit the sums of money equivalent to the aggregate amount. it has been adjudged to pay jointly and severally with respondent Sultan Security Agency with the Regional Arbitration Branch X, Cagayan de Oro City within the same period for proper dispositions; 3. In order to ensure compliance with this order, petitioner is likewise directed to put up and post sufficient surety and supersedeas bond equivalent to at least to fifty (50%) percent of the total monetary award issued by a reputable bonding company duly accredited by the Supreme Court or by the Regional Trial Court of Misamis Oriental to answer for the satisfaction of the money claims in case of failure or default on the part of petitioner to satisfy the money claims; 4. The City Sheriff is ordered to immediately release the properties of petitioner levied on execution within ten (10) days from notice of the posting of sufficient surety or supersedeas bond as specified above. In the meanwhile, petitioner is assessed to pay the costs and/or expenses incurred by the City Sheriff, if any, in connection with the execution of the judgments in the above-stated cases upon presentation of the appropriate claims or vouchers and receipts by the city Sheriff, subject to the conditions specified in the NLRC Sheriff, subject to the conditions specified in the NLRC Manual of Instructions for Sheriffs; 5. The right of any of the judgment debtors to claim reimbursement against each other for any payments made in connection with the satisfaction of the judgments herein is hereby recognized pursuant to the ruling in the Eagle Security case, (supra). In case of dispute between the judgment debtors, the Executive Labor Arbiter of the Branch of origin may upon proper petition by any of the parties conduct arbitration proceedings for the purpose and thereby render his decision after due notice and hearings; 7. Finally, the petition for injunction is Dismissed for lack of basis. The writ of preliminary injunction previously issued is Lifted and Set Aside and in lieu thereof, a Temporary Stay of Execution is issued for a period of two (2) months but not extending beyond the last quarter of calendar year 1991, conditioned upon the posting of a surety or supersedeas bond by petitioner within ten (10) days from notice

pursuant to paragraph 3 of this disposition. The motion to admit the complaint in intervention is Denied for lack of merit while the motion to dismiss the petition filed by Duty Sheriff is Noted SO ORDERED. In this petition for certiorari, the petitioner charges the NLRC with grave abuse of discretion for refusing to quash the writ of execution. The petitioner faults the NLRC for assuming jurisdiction over a money claim against the Department, which, it claims, falls under the exclusive jurisdiction of the Commission on Audit. More importantly, the petitioner asserts, the NLRC has disregarded the cardinal rule on the non-suability of the State. The private respondents, on the other hand, argue that the petitioner has impliedly waived its immunity from suit by concluding a service contract with Sultan Security Agency. The basic postulate enshrined in the constitution that "(t)he State may not be sued without its consent," 7 reflects nothing less than a recognition of the sovereign character of the State and an express affirmation of the unwritten rule effectively insulating it from the jurisdiction of courts. 8 It is based on the very essence of sovereignty. As has been aptly observed, by Justice Holmes, a sovereign is exempt from suit, not because of any formal conception or obsolete theory, but on the logical and practical ground that there can be no legal right as against the authority that makes the law on which the right depends. 9 True, the doctrine, not too infrequently, is derisively called "the royal prerogative of dishonesty" because it grants the state the prerogative to defeat any legitimate claim against it by simply invoking its non-suability. 10 We have had occasion, to explain in its defense, however, that a continued adherence to the doctrine of non-suability cannot be deplored, for the loss of governmental efficiency and the obstacle to the performance of its multifarious functions would be far greater in severity than the inconvenience that may be caused private parties, if such fundamental principle is to be abandoned and the availability of judicial remedy is not to be accordingly restricted. 11 The rule, in any case, is not really absolute for it does not say that the

state may not be sued under any circumstances. On the contrary, as correctly phrased, the doctrine only conveys, "the state may not be sued without its consent;" its clear import then is that the State may at times be sued. 12 The States' consent may be given expressly or impliedly. Express consent may be made through a general law 13 or a special law. 14 In this jurisdiction, the general law waiving the immunity of the state from suit is found in Act No. 3083, where the Philippine government "consents and submits to be sued upon any money claims involving liability arising from contract, express or implied, which could serve as a basis of civil action between private parties." 15 Implied consent, on the other hand, is conceded when the State itself commences litigation, thus opening itself to a counterclaim 16 or when it enters into a contract. 17 In this situation, the government is deemed to have descended to the level of the other contracting party and to have divested itself of its sovereign immunity. This rule, relied upon by the NLRC and the private respondents, is not, however, without qualification. Not all contracts entered into by the government operate as a waiver of its non-suability; distinction must still be made between one which is executed in the exercise of its sovereign function and another which is done in its proprietary capacity. 18 In the Unites States of America vs. Ruiz, 19 where the questioned transaction dealt with improvements on the wharves in the naval installation at Subic Bay, we held: The traditional rule of immunity exempts a State from being sued in the courts of another State without its consent or waiver. This rule is a necessary consequence of the principles of independence and equality of States. However, the rules of International Law are not petrified; they are constantly developing and evolving. And because the activities of states have multiplied, it has been necessary to distinguish them between sovereign and governmental acts ( jure imperii) and private, commercial and proprietary act ( jure gestionisis). The result is that State immunity now extends only to acts jure imperii. The restrictive application of State immunity is now the rule in the United States, the United Kingdom and other states in Western Europe. xxx xxx xxx

The restrictive application of State immunity is proper only when the proceedings arise out of commercial transactions of the foreign sovereign, its commercial activities or economic affairs. Stated differently, a state may be said to have descended to the level of an individual and can this be deemed to have actually given its consent to be sued only when it enters into business contracts. It does not apply where the contracts relates to the exercise of its sovereign functions. In this case the projects are an integral part of the naval base which is devoted to the defense of both the United States and the Philippines, indisputably a function of the government of the highest order; they are not utilized for not dedicated to commercial or business purposes. In the instant case, the Department of Agriculture has not pretended to have assumed a capacity apart from its being a governmental entity when it entered into the questioned contract; nor that it could have, in fact, performed any act proprietary in character. But, be that as it may, the claims of private respondents, i.e. for underpayment of wages, holiday pay, overtime pay and similar other items, arising from the Contract for Service, clearly constitute money claims. Act No. 3083, aforecited, gives the consent of the State to be "sued upon any moneyed claim involving liability arising from contract, express or implied, . . . Pursuant, however, to Commonwealth Act ("C.A.") No. 327, as amended by Presidential Decree ("P.D.") No. 1145, the money claim first be brought to the Commission on Audit. Thus, in Carabao, Inc., vs. Agricultural Productivity Commission, 20 we ruled: (C)laimants have to prosecute their money claims against the Government under Commonwealth Act 327, stating that Act 3083 stands now merely as the general law waiving the State's immunity from suit, subject to the general limitation expressed in Section 7 thereof that "no execution shall issue upon any judgment rendered by any Court against the Government of the (Philippines), and that the conditions provided in Commonwealth Act 327 for filing money claims against the Government must be strictly observed." We fail to see any substantial conflict or inconsistency between the provisions of C.A. No. 327 and the Labor Code with respect to money

claims against the State. The Labor code, in relation to Act No. 3083, provides the legal basis for the State liability but the prosecution, enforcement or satisfaction thereof must still be pursued in accordance with the rules and procedures laid down in C.A. No. 327, as amended by P.D. 1445. When the state gives its consent to be sued, it does thereby necessarily consent to 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. 21 In Republic vs. Villasor 22 this Court, in nullifying the issuance of an alias writ of execution directed against the funds of the Armed Forces of the Philippines to satisfy a final and executory judgment, has explained, thus
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 the 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 properties may not be seized under writs or execution or garnishment to satisfy such judgments, is based on obvious considerations of public policy. Disbursements of public funds must be covered by the correspondent 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. 23

WHEREFORE, the petition is GRANTED. The resolution, dated 27 November 1991, is hereby REVERSED and SET ASIDE. The writ of execution directed against the property of the Department of Agriculture is nullified, and the public respondents are hereby enjoined permanently from doing, issuing and implementing any and all writs of execution issued pursuant to the decision rendered by the Labor Arbiter against said petitioner. SO ORDERED. Feliciano, Bidin, Romero and Melo, JJ., concur.

Footnotes

1 Annex "A", Rollo, 23-52. 2 Annex "C", Ibid., 57-68. 3 Rollo, 59. 4 Ibid., 57. 5 Annex "D", Petition, Rollo, 69. 6 Annex "E", Ibid., ibid., p. 70. 7 Article XVI, Section 3 of the Constitution. 8 Isagani Cruz, Philippine Political Law, 1991, p. 29. 9 Kawananakoa vs. Polyblank, 205 U.S. 353, 51 L. ed. 834. 10 U.S.A. vs. Guinto, 182 SCRA 644,654 (1990). 11 Providence Washington Ins. Co. vs. Republic, 29 SCRA 598 12 Ibid. 13 i.e. Commonwealth Act No. 327, as amended by Presidential Decree No. 1445 (Sections 49-50), which requires that all money claims against the government must first be filed with the Commission on Audit which must act upon it within sixty-days. Rejection of the claim will authorize the claimant to elevate the matter to the Supreme Court on certiorari and, in effect, sue the State thereby. 14 Merritt vs. Government of the Philippines, 34 Phil. 311. 15 See United States vs. Guinto, 182 SCRA 644, 654, supra. 16 Froilan vs. Pan Oriental Shipping, G.R. No. 6060, 30 September 1950. 17 Santos vs. Santos, 92 Phil. 281; Lyons vs. United States of

America, 104 SCRA 593. 18 United States of America vs. Guinto, 182 SCRA 644; United States of America vs. Ruiz, 136 SCRA 487 (195). 19 136 SCRA 487. 20 35 SCRA 224, 229 (1970). 21 Cruz, supra., 44-45. 22 54 SCRA 84 (1973). 23 See also Commissioner of Public Highways vs. San Diego, 31 SCRA 616 (1970) citing others the following decisions: Merritt vs. Government, 34 Phil. 311 (1916); Visayan Refining Co. vs. Camus, 40 Phil. 550 (1919); Director of Commerce vs. Concepcion, 43 Phil. 384 (1922); Belleng vs. Republic, 9 SCRA 6 (1963); Republic vs. Palacio, 23 SCRA 899 (1968).

G.R. No. L-46930 June 10, 1988 DALE SANDERS, AND A.S. MOREAU, JR, petitioners, vs. HON. REGINO T. VERIDIANO II, as Presiding Judge, Branch I, Court of First Instance of Zambales, Olongapo City, ANTHONY M. ROSSI and RALPH L. WYERS, respondents.

CRUZ, J.: The basic issue to be resolved in this case is whether or not the petitioners were performing their official duties when they did the acts for which they have been sued for damages by the private respondents. Once this question is decided, the other answers will fall into place and this petition need not detain us any longer than it already has. Petitioner Sanders was, at the time the incident in question occurred, the special services director of the U.S. Naval Station (NAVSTA) in Olongapo City. 1 Petitioner Moreau was the commanding officer of the Subic Naval Base, which includes the said station. 2 Private respondent Rossi is an American citizen with permanent residence in the Philippines, 3 as so was private respondent Wyer, who died two years ago. 4 They were both employed as gameroom attendants in the special services department of the NAVSTA, the former having been hired in 1971 and the latter in 1969. 5 On October 3, 1975, the private respondents were advised that their employment had been converted from permanent full-time to permanent part-time, effective October 18, 1975. 6 Their reaction was to protest this conversion and to institute grievance proceedings conformably to the pertinent rules and regulations of the U.S. Department of Defense. The result was a recommendation from the hearing officer who conducted the proceedings for the reinstatement of the private respondents to permanent full-time status plus backwages. The report on the hearing contained the observation that "Special Services management practices an autocratic form of supervision." 7 In a letter addressed to petitioner Moreau on May 17, 1976 (Annex

"A" of the complaint), Sanders disagreed with the hearing officer's report and asked for the rejection of the abovestated recommendation. The letter contained the statements that: a ) "Mr. Rossi tends to alienate most co-workers and supervisors;" b) "Messrs. Rossi and Wyers have proven, according to their immediate supervisors, to be difficult employees to supervise;" and c) "even though the grievants were under oath not to discuss the case with anyone, (they) placed the records in public places where others not involved in the case could hear." On November 7, 1975, before the start of the grievance hearings, aletter (Annex "B" of the complaint) purportedly corning from petitioner Moreau as the commanding general of the U.S. Naval Station in Subic Bay was sent to the Chief of Naval Personnel explaining the change of the private respondent's employment status and requesting concurrence therewith. The letter did not carry his signature but was signed by W.B. Moore, Jr. "by direction," presumably of Moreau. On the basis of these antecedent facts, the private respondent filed in the Court of First Instance of Olongapo City a for damages against the herein petitioners on November 8, 1976. 8 The plaintiffs claimed that the letters contained libelous imputations that had exposed them to ridicule and caused them mental anguish and that the prejudgment of the grievance proceedings was an invasion of their personal and proprietary rights. The private respondents made it clear that the petitioners were being sued in their private or personal capacity. However, in a motion to dismiss filed under a special appearance, the petitioners argued that the acts complained of were performed by them in the discharge of their official duties and that, consequently, the court had no jurisdiction over them under the doctrine of state immunity. After extensive written arguments between the parties, the motion was denied in an order dated March 8, 1977, 9 on the main ground that the petitioners had not presented any evidence that their acts were official in nature and not personal torts, moreover, the allegation in the complaint was that the defendants had acted maliciously and in bad faith. The same order issued a writ of preliminary attachment,

conditioned upon the filing of a P10,000.00 bond by the plaintiffs, against the properties of petitioner Moreau, who allegedly was then about to leave the Philippines. Subsequently, to make matters worse for the defendants, petitioner Moreau was declared in a default by the trial court in its order dated August 9, 1977. The motion to lift the default order on the ground that Moreau's failure to appear at the pretrial conference was the result of some misunderstanding, and the motion for reconsideration of the denial of the motion to dismiss, which was filed by the petitioner's new lawyers, were denied by the respondent court on September 7, 1977. This petition for certiorari, prohibition and preliminary injunction was thereafter filed before this Court, on the contention that the abovenarrated acts of the respondent court are tainted with grave abuse of discretion amounting to lack of jurisdiction. We return now to the basic question of whether the petitioners were acting officially or only in their private capacities when they did the acts for which the private respondents have sued them for damages. It is stressed at the outset that the mere allegation that a government functionary is being sued in his personal capacity will not automatically remove him from the protection of the law of public officers and, if appropriate, the doctrine of state immunity. By the same token, the mere invocation of official character will not suffice to insulate him from suability and liability for an act imputed to him as a personal tort committed without or in excess of his authority. These well-settled principles are applicable not only to the officers of the local state but also where the person sued in its courts pertains to the government of a foreign state, as in the present case. The respondent judge, apparently finding that the complained acts were prima facie personal and tortious, decided to proceed to trial to determine inter alia their precise character on the strength of the evidence to be submitted by the parties. The petitioners have objected, arguing that no such evidence was needed to substantiate their claim of jurisdictional immunity. Pending resolution of this question, we issued a temporary restraining order on September 26, 1977, that has since then suspended the proceedings in this case in the court a quo.

In past cases, this Court has held that where the character of the act complained of can be determined from the pleadings exchanged between the parties before the trial, it is not necessary for the court to require them to belabor the point at a trial still to be conducted. Such a proceeding would be superfluous, not to say unfair to the defendant who is subjected to unnecessary and avoidable inconvenience. Thus, in Baer v. Tizon, 10 we held that a motion to dismiss a complaint against the commanding general of the Olongapo Naval Base should not have been denied because it had been sufficiently shown that the act for which he was being sued was done in his official capacity on behalf of the American government. The United States had not given its consent to be sued. It was the reverse situation in Syquia v. Almeda Lopez," where we sustained the order of the lower court granting a where we motion to dismiss a complaint against certain officers of the U.S. armed forces also shown to be acting officially in the name of the American government. The United States had also not waived its immunity from suit. Only three years ago, in United States of America v. Ruiz, 12 we set aside the denial by the lower court of a motion to dismiss a complaint for damages filed against the United States and several of its officials, it appearing that the act complained of was governmental rather than proprietary, and certainly not personal. In these and several other cases 13 the Court found it redundant to prolong the other case proceedings after it had become clear that the suit could not prosper because the acts complained of were covered by the doctrine of state immunity. It is abundantly clear in the present case that the acts for which the petitioners are being called to account were performed by them in the discharge of their official duties. Sanders, as director of the special services department of NAVSTA, undoubtedly had supervision over its personnel, including the private respondents, and had a hand in their employment, work assignments, discipline, dismissal and other related matters. It is not disputed that the letter he had written was in fact a reply to a request from his superior, the other petitioner, for more information regarding the case of the private respondents. 14 Moreover, even in the absence of such request, he still was within his rights in reacting to the hearing officer's criticismin effect a direct attack against him-that Special Services was practicing "an autocratic form of supervision."

As for Moreau,what he is claimed to have done was write the Chief of Naval Personnel for concurrence with the conversion of the private respondents' type of employment even before the grievance proceedings had even commenced. Disregarding for the nonce the question of its timeliness, this act is clearly official in nature, performed by Moreau as the immediate superior of Sanders and directly answerable to Naval Personnel in matters involving the special services department of NAVSTA In fact, the letter dealt with the financial and budgetary problems of the department and contained recommendations for their solution, including the redesignation of the private respondents. There was nothing personal or private about it. Given the official character of the above-described letters, we have to conclude that the petitioners were, legally speaking, being sued as officers of the United States government. As they have acted on behalf of that government, and within the scope of their authority, it is that government, and not the petitioners personally, that is responsible for their acts. Assuming that the trial can proceed and it is proved that the claimants have a right to the payment of damages, such award will have to be satisfied not by the petitioners in their personal capacities but by the United States government as their principal. This will require that government to perform an affirmative act to satisfy the judgment, viz, the appropriation of the necessary amount to cover the damages awarded, thus making the action a suit against that government without its consent. There should be no question by now that such complaint cannot prosper unless the government sought to be held ultimately liable has given its consent to' be sued. So we have ruled not only in Baer but in many other decisions where we upheld the doctrine of state immunity as applicable not only to our own government but also to foreign states sought to be subjected to the jurisdiction of our courts. 15 The practical justification for the doctrine, as Holmes put it, is that "there can be no legal right against the authority which makes the law on which the right depends. 16 In the case of foreign states, the rule is derived from the principle of the sovereign equality of states which wisely admonishes that par in parem non habet imperium and that a contrary attitude would "unduly vex the peace of nations." 17 Our

adherence to this precept is formally expressed in Article II, Section 2, of our Constitution, where we reiterate from our previous charters that the Philippines "adopts the generally accepted principles of international law as part of the law of the land. All this is not to say that in no case may a public officer be sued as such without the previous consent of the state. To be sure, there are a number of well-recognized exceptions. It is clear that a public officer may be sued as such to compel him to do an act required by law, as where, say, a register of deeds refuses to record a deed of sale; 18 or to restrain a Cabinet member, for example, from enforcing a law claimed to be unconstitutional; 19 or to compel the national treasurer to pay damages from an already appropriated assurance fund; 20 or the commissioner of internal revenue to refund tax over-payments from a fund already available for the purpose; 21 or, in general, to secure a judgment that the officer impleaded may satisfy by himself without the government itself having to do a positive act to assist him. We have also held that where the government itself has violated its own laws, the aggrieved party may directly implead the government even without first filing his claim with the Commission on Audit as normally required, as the doctrine of state immunity "cannot be used as an instrument for perpetrating an injustice." 22 This case must also be distinguished from such decisions as Festejo v. Fernando, 23 where the Court held that a bureau director could be sued for damages on a personal tort committed by him when he acted without or in excess of authority in forcibly taking private property without paying just compensation therefor although he did convert it into a public irrigation canal. It was not necessary to secure the previous consent of the state, nor could it be validly impleaded as a party defendant, as it was not responsible for the defendant's unauthorized act. The case at bar, to repeat, comes under the rule and not under any of the recognized exceptions. The government of the United States has not given its consent to be sued for the official acts of the petitioners, who cannot satisfy any judgment that may be rendered against them. As it is the American government itself that will have to perform the affirmative act of appropriating the amount that may be adjudged for the private respondents, the complaint must be dismissed for lack of

jurisdiction. The Court finds that, even under the law of public officers, the acts of the petitioners are protected by the presumption of good faith, which has not been overturned by the private respondents. Even mistakes concededly committed by such public officers are not actionable as long as it is not shown that they were motivated by malice or gross negligence amounting to bad faith. 24 This, to, is well settled . 25 Furthermore, applying now our own penal laws, the letters come under the concept of privileged communications and are not punishable, 26 let alone the fact that the resented remarks are not defamatory by our standards. It seems the private respondents have overstated their case. A final consideration is that since the questioned acts were done in the Olongapo Naval Base by the petitioners in the performance of their official duties and the private respondents are themselves American citizens, it would seem only proper for the courts of this country to refrain from taking cognizance of this matter and to treat it as coming under the internal administration of the said base. The petitioners' counsel have submitted a memorandum replete with citations of American cases, as if they were arguing before a court of the United States. The Court is bemused by such attitude. While these decisions do have persuasive effect upon us, they can at best be invoked only to support our own jurisprudence, which we have developed and enriched on the basis of our own persuasions as a people, particularly since we became independent in 1946. We appreciate the assistance foreign decisions offer us, and not only from the United States but also from Spain and other countries from which we have derived some if not most of our own laws. But we should not place undue and fawning reliance upon them and regard them as indispensable mental crutches without which we cannot come to our own decisions through the employment of our own endowments We live in a different ambience and must decide our own problems in the light of our own interests and needs, and of our qualities and even idiosyncrasies as a people, and always with our own concept of law and justice.

The private respondents must, if they are still sominded, pursue their claim against the petitioners in accordance with the laws of the United States, of which they are all citizens and under whose jurisdiction the alleged offenses were committed. Even assuming that our own laws are applicable, the United States government has not decided to give its consent to be sued in our courts, which therefore has not acquired the competence to act on the said claim,. WHEREFORE, the petition is GRANTED. The challenged orders dated March 8,1977, August 9,1977, and September 7, 1977, are SET ASIDE. The respondent court is directed to DISMISS Civil Case No. 2077-O. Our Temporary restraining order of September 26,1977, is made PERMANENT. No costs. SO ORDERED. Narvasa, Gancayco, Grino-Aquio and Medialdea, JJ., Concur.

Footnotes 1 Rollo, pp. 2, 26. 2 Ibid. 3 Id. 4 Id., p. 319. 5 Id., pp. 4, 27, 91. 6 Id., pp. 5, 91. 7 Id., p. 5, 28, 91. 8 Id., pp- 26-34. 9 Id., pp- 90-94. 10 57 SCRA 1.

11 84 Phil. 312. 12 136 SCRA 487. 13 Lim v. Brownell, et al., 107 Phil. 344; Parreo v. McGranery, 92 Phil. 791; Lim v. Nelson, 87 Phil. 328; Marvel Building Corp. v. Philippine War Damage Commission, 85 Phil. 27. 14 Rollo, pp. 35-40. 15 Syquia v. Almeda Lopez, supra; Marvel Building Corp. v. Philippine War Damage Commission, supra; Lim v. Nelson, supra; Philippine Alien Property Administration v. Castelo, 89 Phil. 568; Parreo v. McGranery, supra; Johnson v. Turner, 94 Phil. 807-all cited in Baer case; United States of America v. Ruiz, supra. 16 Kawanakoa v. Polybank, 205 U.S. 349. 17 De Haber v. Queen of Portugal, 17 QB 171. 18 Krivenko v. Register of Deeds, 79 Phil. 461. 19 Javellana v. Executive Secretary, 50 SCRA 30: Ichong v. Hernandez, 101 Phil. 1155. 20 Treasurer of the Philippines v. Court of Appeals, G.R. No. L42805, August 31, 1987. 21 National Development Company v. Commissioner of Internal Revenue, 151 SCRA 472. 22 Amigable v. Cuenca, 43 SCRA 360, reiterating Ministerio v. Court of First Instance of Cebu, 40 SCRA 464. 23 50 O.G. 1556. 24 Philippine Racing Club, Inc., et al. v. Bonifacio, et al., 109 Phil. 233. 25 Cabungcal, et al. v. Cordova, et al., 11 SCRA 584, cited in Mabutol v. Pascual, 124 SCRA 867; Mindanao Realty Corp. v. Kintanar, 6 SCRA 814; U.S. v. Santos, 36 Phil. 853. 2'

G.R. No. L-35645 May 22, 1985 UNITED STATES OF AMERICA, CAPT. JAMES E. GALLOWAY, WILLIAM I. COLLINS and ROBERT GOHIER, petitioners, vs. HON. V. M. RUIZ, Presiding Judge of Branch XV, Court of First Instance of Rizal and ELIGIO DE GUZMAN & CO., INC., respondents. Sycip, Salazar, Luna & Manalo & Feliciano Law for petitioners. Albert, Vergara, Benares, Perias & Dominguez Law Office for respondents.

ABAD SANTOS, J.: This is a petition to review, set aside certain orders and restrain the respondent judge from trying Civil Case No. 779M of the defunct Court of First Instance of Rizal. The factual background is as follows: At times material to this case, the United States of America had a naval base in Subic, Zambales. The base was one of those provided in the Military Bases Agreement between the Philippines and the United States. Sometime in May, 1972, the United States invited the submission of bids for the following projects 1. Repair offender system, Alava Wharf at the U.S. Naval Station Subic Bay, Philippines. 2. Repair typhoon damage to NAS Cubi shoreline; repair typhoon damage to shoreline revetment, NAVBASE Subic; and repair to Leyte Wharf approach, NAVBASE Subic Bay, Philippines. Eligio de Guzman & Co., Inc. responded to the invitation and submitted bids. Subsequent thereto, the company received from the United States two telegrams requesting it to confirm its price

proposals and for the name of its bonding company. The company complied with the requests. [In its complaint, the company alleges that the United States had accepted its bids because "A request to confirm a price proposal confirms the acceptance of a bid pursuant to defendant United States' bidding practices." (Rollo, p. 30.) The truth of this allegation has not been tested because the case has not reached the trial stage.] In June, 1972, the company received a letter which was signed by Wilham I. Collins, Director, Contracts Division, Naval Facilities Engineering Command, Southwest Pacific, Department of the Navy of the United States, who is one of the petitioners herein. The letter said that the company did not qualify to receive an award for the projects because of its previous unsatisfactory performance rating on a repair contract for the sea wall at the boat landings of the U.S. Naval Station in Subic Bay. The letter further said that the projects had been awarded to third parties. In the abovementioned Civil Case No. 779-M, the company sued the United States of America and Messrs. James E. Galloway, William I. Collins and Robert Gohier all members of the Engineering Command of the U.S. Navy. The complaint is to order the defendants to allow the plaintiff to perform the work on the projects and, in the event that specific performance was no longer possible, to order the defendants to pay damages. The company also asked for the issuance of a writ of preliminary injunction to restrain the defendants from entering into contracts with third parties for work on the projects. The defendants entered their special appearance for the purpose only of questioning the jurisdiction of this court over the subject matter of the complaint and the persons of defendants, the subject matter of the complaint being acts and omissions of the individual defendants as agents of defendant United States of America, a foreign sovereign which has not given her consent to this suit or any other suit for the causes of action asserted in the complaint." (Rollo, p. 50.) Subsequently the defendants filed a motion to dismiss the complaint which included an opposition to the issuance of the writ of preliminary injunction. The company opposed the motion. The trial court denied the motion and issued the writ. The defendants moved twice to

reconsider but to no avail. Hence the instant petition which seeks to restrain perpetually the proceedings in Civil Case No. 779-M for lack of jurisdiction on the part of the trial court. The petition is highly impressed with merit. The traditional rule of State immunity exempts a State from being sued in the courts of another State without its consent or waiver. This rule is a necessary consequence of the principles of independence and equality of States. However, the rules of International Law are not petrified; they are constantly developing and evolving. And because the activities of states have multiplied, it has been necessary to distinguish them-between sovereign and governmental acts (jure imperii) and private, commercial and proprietary acts (jure gestionis). The result is that State immunity now extends only to acts jure imperil The restrictive application of State immunity is now the rule in the United States, the United Kingdom and other states in western Europe. (See Coquia and Defensor Santiago, Public International Law, pp. 207-209 [1984].) The respondent judge recognized the restrictive doctrine of State immunity when he said in his Order denying the defendants' (now petitioners) motion: " A distinction should be made between a strictly governmental function of the sovereign state from its private, proprietary or non- governmental acts (Rollo, p. 20.) However, the respondent judge also said: "It is the Court's considered opinion that entering into a contract for the repair of wharves or shoreline is certainly not a governmental function altho it may partake of a public nature or character. As aptly pointed out by plaintiff's counsel in his reply citing the ruling in the case of Lyons, Inc., [104 Phil. 594 (1958)], and which this Court quotes with approval, viz.: It is however contended that when a sovereign state enters into a contract with a private person, the state can be sued upon the theory that it has descended to the level of an individual from which it can be implied that it has given its consent to be sued under the contract. ... xxx xxx xxx We agree to the above contention, and considering that the United States government, through its agency at Subic Bay, entered into a

contract with appellant for stevedoring and miscellaneous labor services within the Subic Bay Area, a U.S. Naval Reservation, it is evident that it can bring an action before our courts for any contractual liability that that political entity may assume under the contract. The trial court, therefore, has jurisdiction to entertain this case ... (Rollo, pp. 20-21.) The reliance placed on Lyons by the respondent judge is misplaced for the following reasons: In Harry Lyons, Inc. vs. The United States of America, supra, plaintiff brought suit in the Court of First Instance of Manila to collect several sums of money on account of a contract between plaintiff and defendant. The defendant filed a motion to dismiss on the ground that the court had no jurisdiction over defendant and over the subject matter of the action. The court granted the motion on the grounds that: (a) it had no jurisdiction over the defendant who did not give its consent to the suit; and (b) plaintiff failed to exhaust the administrative remedies provided in the contract. The order of dismissal was elevated to this Court for review. In sustaining the action of the lower court, this Court said: It appearing in the complaint that appellant has not complied with the procedure laid down in Article XXI of the contract regarding the prosecution of its claim against the United States Government, or, stated differently, it has failed to first exhaust its administrative remedies against said Government, the lower court acted properly in dismissing this case.(At p. 598.) It can thus be seen that the statement in respect of the waiver of State immunity from suit was purely gratuitous and, therefore, obiter so that it has no value as an imperative authority. The restrictive application of State immunity is proper only when the proceedings arise out of commercial transactions of the foreign sovereign, its commercial activities or economic affairs. Stated differently, a State may be said to have descended to the level of an individual and can thus be deemed to have tacitly given its consent to be sued only when it enters into business contracts. It does not apply where the contract relates to the exercise of its sovereign functions.

In this case the projects are an integral part of the naval base which is devoted to the defense of both the United States and the Philippines, indisputably a function of the government of the highest order; they are not utilized for nor dedicated to commercial or business purposes. That the correct test for the application of State immunity is not the conclusion of a contract by a State but the legal nature of the act is shown in Syquia vs. Lopez, 84 Phil. 312 (1949). In that case the plaintiffs leased three apartment buildings to the United States of America for the use of its military officials. The plaintiffs sued to recover possession of the premises on the ground that the term of the leases had expired. They also asked for increased rentals until the apartments shall have been vacated. The defendants who were armed forces officers of the United States moved to dismiss the suit for lack of jurisdiction in the part of the court. The Municipal Court of Manila granted the motion to dismiss; sustained by the Court of First Instance, the plaintiffs went to this Court for review on certiorari. In denying the petition, this Court said: On the basis of the foregoing considerations we are of the belief and we hold that the real party defendant in interest is the Government of the United States of America; that any judgment for back or Increased rentals or damages will have to be paid not by defendants Moore and Tillman and their 64 co-defendants but by the said U.S. Government. On the basis of the ruling in the case of Land vs. Dollar already cited, and on what we have already stated, the present action must be considered as one against the U.S. Government. It is clear hat the courts of the Philippines including the Municipal Court of Manila have no jurisdiction over the present case for unlawful detainer. The question of lack of jurisdiction was raised and interposed at the very beginning of the action. The U.S. Government has not , given its consent to the filing of this suit which is essentially against her, though not in name. Moreover, this is not only a case of a citizen filing a suit against his own Government without the latter's consent but it is of a citizen filing an action against a foreign government without said government's consent, which renders more obvious the lack of jurisdiction of the courts of his country. The principles of law behind this rule are so elementary and of such

general acceptance that we deem it unnecessary to cite authorities in support thereof. (At p. 323.) In Syquia,the United States concluded contracts with private individuals but the contracts notwithstanding the States was not deemed to have given or waived its consent to be sued for the reason that the contracts were for jure imperii and not for jure gestionis. WHEREFORE, the petition is granted; the questioned orders of the respondent judge are set aside and Civil Case No. is dismissed. Costs against the private respondent. Teehankee, Aquino, Concepcion, Jr., Melencio-Herrera, Plana, * Escolin, Relova, Gutierrez, Jr., De la Fuente, Cuevas and Alampay, JJ., concur. Fernando, C.J., took no part.

Separate Opinions

MAKASIAR, J., dissenting: The petition should be dismissed and the proceedings in Civil Case No. 779-M in the defunct CFI (now RTC) of Rizal be allowed to continue therein. In the case of Lyons vs. the United States of America (104 Phil. 593), where the contract entered into between the plaintiff (Harry Lyons, Inc.) and the defendant (U.S. Government) involved stevedoring and labor services within the Subic Bay area, this Court further stated that inasmuch as ". . . the United States Government. through its agency at Subic Bay, entered into a contract with appellant for stevedoring and miscellaneous labor services within the Subic Bay area, a U.S. Navy Reservation, it is evident that it can bring an action before our courts for any contractual liability that that political entity may assume

under the contract." When the U.S. Government, through its agency at Subic Bay, confirmed the acceptance of a bid of a private company for the repair of wharves or shoreline in the Subic Bay area, it is deemed to have entered into a contract and thus waived the mantle of sovereign immunity from suit and descended to the level of the ordinary citizen. Its consent to be sued, therefore, is implied from its act of entering into a contract (Santos vs. Santos, 92 Phil. 281, 284). Justice and fairness dictate that a foreign government that commits a breach of its contractual obligation in the case at bar by the unilateral cancellation of the award for the project by the United States government, through its agency at Subic Bay should not be allowed to take undue advantage of a party who may have legitimate claims against it by seeking refuge behind the shield of non-suability. A contrary view would render a Filipino citizen, as in the instant case, helpless and without redress in his own country for violation of his rights committed by the agents of the foreign government professing to act in its name. Appropriate are the words of Justice Perfecto in his dissenting opinion in Syquia vs. Almeda Lopez, 84 Phil. 312, 325: Although, generally, foreign governments are beyond the jurisdiction of domestic courts of justice, such rule is inapplicable to cases in which the foreign government enters into private contracts with the citizens of the court's jurisdiction. A contrary view would simply run against all principles of decency and violative of all tenets of morals. Moral principles and principles of justice are as valid and applicable as well with regard to private individuals as with regard to governments either domestic or foreign. Once a foreign government enters into a private contract with the private citizens of another country, such foreign government cannot shield its non-performance or contravention of the terms of the contract under the cloak of nonjurisdiction. To place such foreign government beyond the jurisdiction of the domestic courts is to give approval to the execution of unilateral contracts, graphically described in Spanish as 'contratos leoninos', because one party gets the lion's share to the detriment of

the other. To give validity to such contract is to sanctify bad faith, deceit, fraud. We prefer to adhere to the thesis that all parties in a private contract, including governments and the most powerful of them, are amenable to law, and that such contracts are enforceable through the help of the courts of justice with jurisdiction to take cognizance of any violation of such contracts if the same had been entered into only by private individuals. Constant resort by a foreign state or its agents to the doctrine of State immunity in this jurisdiction impinges unduly upon our sovereignty and dignity as a nation. Its application will particularly discourage Filipino or domestic contractors from transacting business and entering into contracts with United States authorities or facilities in the Philippines whether naval, air or ground forces-because the difficulty, if not impossibility, of enforcing a validly executed contract and of seeking judicial remedy in our own courts for breaches of contractual obligation committed by agents of the United States government, always, looms large, thereby hampering the growth of Filipino enterprises and creating a virtual monopoly in our own country by United States contractors of contracts for services or supplies with the various U.S. offices and agencies operating in the Philippines. The sanctity of upholding agreements freely entered into by the parties cannot be over emphasized. Whether the parties are nations or private individuals, it is to be reasonably assumed and expected that the undertakings in the contract will be complied with in good faith. One glaring fact of modern day civilization is that a big and powerful nation, like the United States of America, can always overwhelm small and weak nations. The declaration in the United Nations Charter that its member states are equal and sovereign, becomes hollow and meaningless because big nations wielding economic and military superiority impose upon and dictate to small nations, subverting their sovereignty and dignity as nations. Thus, more often than not, when U.S. interest clashes with the interest of small nations, the American governmental agencies or its citizens invoke principles of international law for their own benefit. In the case at bar, the efficacy of the contract between the U.S. Naval

authorities at Subic Bay on one hand, and herein private respondent on the other, was honored more in the breach than in the compliance The opinion of the majority will certainly open the floodgates of more violations of contractual obligations. American authorities or any foreign government in the Philippines for that matter, dealing with the citizens of this country, can conveniently seek protective cover under the majority opinion. The result is disastrous to the Philippines. This opinion of the majority manifests a neo-colonial mentality. It fosters economic imperialism and foreign political ascendancy in our Republic. The doctrine of government immunity from suit cannot and should not serve as an instrument for perpetrating an injustice on a citizen (Amigable vs. Cuenca, L-26400, February 29, 1972, 43 SCRA 360; Ministerio vs. Court of First Instance, L-31635, August 31, 1971, 40 SCRA 464). Under the doctrine of implied waiver of its non-suability, the United States government, through its naval authorities at Subic Bay, should be held amenable to lawsuits in our country like any other juristic person. The invocation by the petitioner United States of America is not in accord with paragraph 3 of Article III of the original RP-US Military Bases Agreement of March 14, 1947, which states that "in the exercise of the above-mentioned rights, powers and authority, the United States agrees that the powers granted to it will not be used unreasonably. . ." (Emphasis supplied). Nor is such posture of the petitioners herein in harmony with the amendment dated May 27, 1968 to the aforesaid RP-US Military Bases Agreement, which recognizes "the need to promote and maintain sound employment practices which will assure equality of treatment of all employees ... and continuing favorable employeremployee relations ..." and "(B)elieving that an agreement will be mutually beneficial and will strengthen the democratic institutions cherished by both Governments, ... the United States Government agrees to accord preferential employment of Filipino citizens in the Bases, thus (1) the U.S. Forces in the Philippines shall fill the needs

for civilian employment by employing Filipino citizens, etc." (Par. 1, Art. I of the Amendment of May 27, 1968). Neither does the invocation by petitioners of state immunity from suit express fidelity to paragraph 1 of Article IV of the aforesaid amendment of May 2 7, 1968 which directs that " contractors and concessionaires performing work for the U.S. Armed Forces shall be required by their contract or concession agreements to comply with all applicable Philippine labor laws and regulations, " even though paragraph 2 thereof affirms that "nothing in this Agreement shall imply any waiver by either of the two Governments of such immunity under international law." Reliance by petitioners on the non-suability of the United States Government before the local courts, actually clashes with No. III on respect for Philippine law of the Memorandum of Agreement signed on January 7, 1979, also amending RP-US Military Bases Agreement, which stresses that "it is the duty of members of the United States Forces, the civilian component and their dependents, to respect the laws of the Republic of the Philippines and to abstain from any activity inconsistent with the spirit of the Military Bases Agreement and, in particular, from any political activity in the Philippines. The United States shag take all measures within its authority to insure that they adhere to them (Emphasis supplied). The foregoing duty imposed by the amendment to the Agreement is further emphasized by No. IV on the economic and social improvement of areas surrounding the bases, which directs that "moreover, the United States Forces shall procure goods and services in the Philippines to the maximum extent feasible" (Emphasis supplied). Under No. VI on labor and taxation of the said amendment of January 6, 1979 in connection with the discussions on possible revisions or alterations of the Agreement of May 27, 1968, "the discussions shall be conducted on the basis of the principles of equality of treatment, the right to organize, and bargain collectively, and respect for the sovereignty of the Republic of the Philippines" (Emphasis supplied) The majority opinion seems to mock the provision of paragraph 1 of

the joint statement of President Marcos and Vice-President Mondale of the United States dated May 4, 1978 that "the United States reaffirms that Philippine sovereignty extends over the bases and that Its base shall be under the command of a Philippine Base Commander, " which is supposed to underscore the joint Communique of President Marcos and U.S. President Ford of December 7, 1975, under which "they affirm that sovereign equality, territorial integrity and political independence of all States are fundamental principles which both countries scrupulously respect; and that "they confirm that mutual respect for the dignity of each nation shall characterize their friendship as well as the alliance between their two countries. " The majority opinion negates the statement on the delineation of the powers, duties and responsibilities of both the Philippine and American Base Commanders that "in the performance of their duties, the Philippine Base Commander and the American Base Commander shall be guided by full respect for Philippine sovereignty on the one hand and the assurance of unhampered U.S. military operations on the other hand and that "they shall promote cooperation understanding and harmonious relations within the Base and with the general public in the proximate vicinity thereof" (par. 2 & par. 3 of the Annex covered by the exchange of notes, January 7, 1979, between Ambassador Richard W. Murphy and Minister of Foreign Affairs Carlos P. Romulo, Emphasis supplied).

Separate Opinions MAKASIAR, J., dissenting: The petition should be dismissed and the proceedings in Civil Case No. 779-M in the defunct CFI (now RTC) of Rizal be allowed to continue therein. In the case of Lyons vs. the United States of America (104 Phil. 593), where the contract entered into between the plaintiff (Harry Lyons, Inc.) and the defendant (U.S. Government) involved stevedoring and labor services within the Subic Bay area, this Court further stated that

inasmuch as ". . . the United States Government. through its agency at Subic Bay, entered into a contract with appellant for stevedoring and miscellaneous labor services within the Subic Bay area, a U.S. Navy Reservation, it is evident that it can bring an action before our courts for any contractual liability that that political entity may assume under the contract." When the U.S. Government, through its agency at Subic Bay, confirmed the acceptance of a bid of a private company for the repair of wharves or shoreline in the Subic Bay area, it is deemed to have entered into a contract and thus waived the mantle of sovereign immunity from suit and descended to the level of the ordinary citizen. Its consent to be sued, therefore, is implied from its act of entering into a contract (Santos vs. Santos, 92 Phil. 281, 284). Justice and fairness dictate that a foreign government that commits a breach of its contractual obligation in the case at bar by the unilateral cancellation of the award for the project by the United States government, through its agency at Subic Bay should not be allowed to take undue advantage of a party who may have legitimate claims against it by seeking refuge behind the shield of non-suability. A contrary view would render a Filipino citizen, as in the instant case, helpless and without redress in his own country for violation of his rights committed by the agents of the foreign government professing to act in its name. Appropriate are the words of Justice Perfecto in his dissenting opinion in Syquia vs. Almeda Lopez, 84 Phil. 312, 325: Although, generally, foreign governments are beyond the jurisdiction of domestic courts of justice, such rule is inapplicable to cases in which the foreign government enters into private contracts with the citizens of the court's jurisdiction. A contrary view would simply run against all principles of decency and violative of all tenets of morals. Moral principles and principles of justice are as valid and applicable as well with regard to private individuals as with regard to governments either domestic or foreign. Once a foreign government enters into a private contract with the private citizens of another country, such foreign government cannot shield its non-performance

or contravention of the terms of the contract under the cloak of nonjurisdiction. To place such foreign government beyond the jurisdiction of the domestic courts is to give approval to the execution of unilateral contracts, graphically described in Spanish as 'contratos leoninos', because one party gets the lion's share to the detriment of the other. To give validity to such contract is to sanctify bad faith, deceit, fraud. We prefer to adhere to the thesis that all parties in a private contract, including governments and the most powerful of them, are amenable to law, and that such contracts are enforceable through the help of the courts of justice with jurisdiction to take cognizance of any violation of such contracts if the same had been entered into only by private individuals. Constant resort by a foreign state or its agents to the doctrine of State immunity in this jurisdiction impinges unduly upon our sovereignty and dignity as a nation. Its application will particularly discourage Filipino or domestic contractors from transacting business and entering into contracts with United States authorities or facilities in the Philippines whether naval, air or ground forces-because the difficulty, if not impossibility, of enforcing a validly executed contract and of seeking judicial remedy in our own courts for breaches of contractual obligation committed by agents of the United States government, always, looms large, thereby hampering the growth of Filipino enterprises and creating a virtual monopoly in our own country by United States contractors of contracts for services or supplies with the various U.S. offices and agencies operating in the Philippines. The sanctity of upholding agreements freely entered into by the parties cannot be over emphasized. Whether the parties are nations or private individuals, it is to be reasonably assumed and expected that the undertakings in the contract will be complied with in good faith. One glaring fact of modern day civilization is that a big and powerful nation, like the United States of America, can always overwhelm small and weak nations. The declaration in the United Nations Charter that its member states are equal and sovereign, becomes hollow and meaningless because big nations wielding economic and military superiority impose upon and dictate to small nations, subverting their sovereignty and dignity as nations. Thus, more often

than not, when U.S. interest clashes with the interest of small nations, the American governmental agencies or its citizens invoke principles of international law for their own benefit. In the case at bar, the efficacy of the contract between the U.S. Naval authorities at Subic Bay on one hand, and herein private respondent on the other, was honored more in the breach than in the compliance The opinion of the majority will certainly open the floodgates of more violations of contractual obligations. American authorities or any foreign government in the Philippines for that matter, dealing with the citizens of this country, can conveniently seek protective cover under the majority opinion. The result is disastrous to the Philippines. This opinion of the majority manifests a neo-colonial mentality. It fosters economic imperialism and foreign political ascendancy in our Republic. The doctrine of government immunity from suit cannot and should not serve as an instrument for perpetrating an injustice on a citizen (Amigable vs. Cuenca, L-26400, February 29, 1972, 43 SCRA 360; Ministerio vs. Court of First Instance, L-31635, August 31, 1971, 40 SCRA 464). Under the doctrine of implied waiver of its non-suability, the United States government, through its naval authorities at Subic Bay, should be held amenable to lawsuits in our country like any other juristic person. The invocation by the petitioner United States of America is not in accord with paragraph 3 of Article III of the original RP-US Military Bases Agreement of March 14, 1947, which states that "in the exercise of the above-mentioned rights, powers and authority, the United States agrees that the powers granted to it will not be used unreasonably. . ." (Emphasis supplied). Nor is such posture of the petitioners herein in harmony with the amendment dated May 27, 1968 to the aforesaid RP-US Military Bases Agreement, which recognizes "the need to promote and maintain sound employment practices which will assure equality of treatment of all employees ... and continuing favorable employeremployee relations ..." and "(B)elieving that an agreement will be

mutually beneficial and will strengthen the democratic institutions cherished by both Governments, ... the United States Government agrees to accord preferential employment of Filipino citizens in the Bases, thus (1) the U.S. Forces in the Philippines shall fill the needs for civilian employment by employing Filipino citizens, etc." (Par. 1, Art. I of the Amendment of May 27, 1968). Neither does the invocation by petitioners of state immunity from suit express fidelity to paragraph 1 of Article IV of the aforesaid amendment of May 2 7, 1968 which directs that " contractors and concessionaires performing work for the U.S. Armed Forces shall be required by their contract or concession agreements to comply with all applicable Philippine labor laws and regulations, " even though paragraph 2 thereof affirms that "nothing in this Agreement shall imply any waiver by either of the two Governments of such immunity under international law." Reliance by petitioners on the non-suability of the United States Government before the local courts, actually clashes with No. III on respect for Philippine law of the Memorandum of Agreement signed on January 7, 1979, also amending RP-US Military Bases Agreement, which stresses that "it is the duty of members of the United States Forces, the civilian component and their dependents, to respect the laws of the Republic of the Philippines and to abstain from any activity inconsistent with the spirit of the Military Bases Agreement and, in particular, from any political activity in the Philippines. The United States shag take all measures within its authority to insure that they adhere to them (Emphasis supplied). The foregoing duty imposed by the amendment to the Agreement is further emphasized by No. IV on the economic and social improvement of areas surrounding the bases, which directs that "moreover, the United States Forces shall procure goods and services in the Philippines to the maximum extent feasible" (Emphasis supplied). Under No. VI on labor and taxation of the said amendment of January 6, 1979 in connection with the discussions on possible revisions or alterations of the Agreement of May 27, 1968, "the discussions shall be conducted on the basis of the principles of equality of treatment,

the right to organize, and bargain collectively, and respect for the sovereignty of the Republic of the Philippines" (Emphasis supplied) The majority opinion seems to mock the provision of paragraph 1 of the joint statement of President Marcos and Vice-President Mondale of the United States dated May 4, 1978 that "the United States reaffirms that Philippine sovereignty extends over the bases and that Its base shall be under the command of a Philippine Base Commander, " which is supposed to underscore the joint Communique of President Marcos and U.S. President Ford of December 7, 1975, under which "they affirm that sovereign equality, territorial integrity and political independence of all States are fundamental principles which both countries scrupulously respect; and that "they confirm that mutual respect for the dignity of each nation shall characterize their friendship as well as the alliance between their two countries. " The majority opinion negates the statement on the delineation of the powers, duties and responsibilities of both the Philippine and American Base Commanders that "in the performance of their duties, the Philippine Base Commander and the American Base Commander shall be guided by full respect for Philippine sovereignty on the one hand and the assurance of unhampered U.S. military operations on the other hand and that "they shall promote cooperation understanding and harmonious relations within the Base and with the general public in the proximate vicinity thereof" (par. 2 & par. 3 of the Annex covered by the exchange of notes, January 7, 1979, between Ambassador Richard W. Murphy and Minister of Foreign Affairs Carlos P. Romulo, Emphasis supplied).

G.R. No. L-34548 November 29, 1988 RIZAL COMMERCIAL BANKING CORPORATION, petitioner, vs. THE HONORABLE PACIFICO P. DE CASTRO and PHILIPPINE VIRGINIA TOBACCO ADMINISTRATION, respondents Meer, Meer & Meer for petitioner. The Solicitor General for respondents.

CORTES, J.: The crux of the instant controversy dwells on the liability of a bank for releasing its depositor's funds upon orders of the court, pursuant to a writ of garnishment. If in compliance with the court order, the bank delivered the garnished amount to the sheriff, who in turn delivered it to the judgment creditor, but subsequently, the order of the court directing payment was set aside by the same judge, should the bank be held solidarily liable with the judgment creditor to its depositor for reimbursement of the garnished funds? The Court does not think so. In Civil Case No. Q-12785 of the Court of First Instance of Rizal, Quezon City Branch IX entitled "Badoc Planters, Inc. versus Philippine Virginia Tobacco Administration, et al.," which was an action for recovery of unpaid tobacco deliveries, an Order (Partial Judgment) was issued on January 15, 1970 by the Hon. Lourdes P. San Diego, then Presiding Judge, ordering the defendants therein to pay jointly and severally, the plaintiff Badoc Planters, Inc. (hereinafter referred to as "BADOC") within 48 hours the aggregate amount of P206,916.76, with legal interests thereon. On January 26,1970, BADOC filed an Urgent Ex-Parte Motion for a Writ of Execution of the said Partial Judgment which was granted on the same day by the herein respondent judge who acted in place of the Hon. Judge San Diego who had just been elevated as a Justice of the Court of Appeals. Accordingly, the Branch Clerk of Court on the very same day, issued a Writ of Execution addressed to Special Sheriff Faustino Rigor, who then issued a Notice of Garnishment addressed to the General Manager and/or Cashier of Rizal

Commercial Banking Corporation (hereinafter referred to as RCBC), the petitioner in this case, requesting a reply within five (5) days to said garnishment as to any property which the Philippine Virginia Tobacco Administration (hereinafter referred to as "PVTA") might have in the possession or control of petitioner or of any debts owing by the petitioner to said defendant. Upon receipt of such Notice, RCBC notified PVTA thereof to enable the PVTA to take the necessary steps for the protection of its own interest [Record on Appeal, p. 36] Upon an Urgent Ex-Parte Motion dated January 27, 1970 filed by BADOC, the respondent Judge issued an Order granting the ExParte Motion and directing the herein petitioner "to deliver in check the amount garnished to Sheriff Faustino Rigor and Sheriff Rigor in turn is ordered to cash the check and deliver the amount to the plaintiff's representative and/or counsel on record." [Record on Appeal, p. 20; Rollo, p. 5.] In compliance with said Order, petitioner delivered to Sheriff Rigor a certified check in the sum of P 206,916.76. Respondent PVTA filed a Motion for Reconsideration dated February 26,1970 which was granted in an Order dated April 6,1970, setting aside the Orders of Execution and of Payment and the Writ of Execution and ordering petitioner and BADOC "to restore, jointly and severally, the account of PVTA with the said bank in the same condition and state it was before the issuance of the aforesaid Orders by reimbursing the PVTA of the amount of P 206, 916.76 with interests at the legal rate from January 27, 1970 until fully paid to the account of the PVTA This is without prejudice to the right of plaintiff to move for the execution of the partial judgment pending appeal in case the motion for reconsideration is denied and appeal is taken from the said partial judgment." [Record on Appeal, p. 58] The Motion for Reconsideration of the said Order of April 6, 1970 filed by herein petitioner was denied in the Order of respondent judge dated June 10, 1970 and on June 19, 1970, which was within the period for perfecting an appeal, the herein petitioner filed a Notice of Appeal to the Court of Appeals from the said Orders. This case was then certified by the Court of Appeals to this

Honorable Court, involving as it does purely questions of law. The petitioner raises two principal queries in the instant case: 1) Whether or not PVTA funds are public funds not subject to garnishment; and 2) Whether or not the respondent Judge correctly ordered the herein petitioner to reimburse the amount paid to the Special Sheriff by virtue of the execution issued pursuant to the Order/Partial Judgment dated January 15, 1970. The record reveals that on February 2, 1970, private respondent PVTA filed a Motion for Reconsideration of the Order/ Partial Judgment of January 15, 1970. This was granted and the aforementioned Partial Judgment was set aside. The case was set for hearings on November 4, 9 and 11, 1970 [Rollo, pp. 205-207.] However, in view of the failure of plaintiff BADOC to appear on the said dates, the lower court ordered the dismissal of the case against PVTA for failure to prosecute [Rollo, p. 208.] It must be noted that the Order of respondent Judge dated April 6, 1970 directing the plaintiff to reimburse PVTA t e amount of P206,916.76 with interests became final as to said plaintiff who failed to even file a motion for reconsideration, much less to appeal from the said Order. Consequently, the order to restore the account of PVTA with RCBC in the same condition and state it was before the issuance of the questioned orders must be upheld as to the plaintiff, BADOC. However, the questioned Order of April 6, 1970 must be set aside insofar as it ordered the petitioner RCBC, jointly and severally with BADOC, to reimburse PVTA. The petitioner merely obeyed a mandatory directive from the respondent Judge dated January 27, 1970, ordering petitioner 94 "to deliver in check the amount garnished to Sheriff Faustino Rigor and Sheriff Rigor is in turn ordered to cash the check and deliver the amount to the plaintiffs representative and/or counsel on record." [Record on Appeal, p. 20.] PVTA however claims that the manner in which the bank complied with the Sheriffs Notice of Garnishment indicated breach of trust and dereliction of duty on the part of the bank as custodian of government

funds. It insistently urges that the premature delivery of the garnished amount by RCBC to the special sheriff even in the absence of a demand to deliver made by the latter, before the expiration of the fiveday period given to reply to the Notice of Garnishment, without any reply having been given thereto nor any prior authorization from its depositor, PVTA and even if the court's order of January 27, 1970 did not require the bank to immediately deliver the garnished amount constitutes such lack of prudence as to make it answerable jointly and severally with the plaintiff for the wrongful release of the money from the deposit of the PVTA. The respondent Judge in his controverted Order sustained such contention and blamed RCBC for the supposed "hasty release of the amount from the deposit of the PVTA without giving PVTA a chance to take proper steps by informing it of the action being taken against its deposit, thereby observing with prudence the five-day period given to it by the sheriff." [Rollo, p. 81.] Such allegations must be rejected for lack of merit. In the first place, it should be pointed out that RCBC did not deliver the amount on the strength solely of a Notice of Garnishment; rather, the release of the funds was made pursuant to the aforesaid Order of January 27, 1970. While the Notice of Garnishment dated January 26, 1970 contained no demand of payment as it was a mere request for petitioner to withold any funds of the PVTA then in its possession, the Order of January 27, 1970 categorically required the delivery in check of the amount garnished to the special sheriff, Faustino Rigor. In the second place, the bank had already filed a reply to the Notice of Garnishment stating that it had in its custody funds belonging to the PVTA, which, in fact was the basis of the plaintiff in filing a motion to secure delivery of the garnished amount to the sheriff. [See Rollo, p. 93.] Lastly, the bank, upon the receipt of the Notice of Garnishment, duly informed PVTA thereof to enable the latter to take the necessary steps for the protection of its own interest [Record on Appeal, p. 36] It is important to stress, at this juncture, that there was nothing irregular in the delivery of the funds of PVTA by check to the sheriff, whose custody is equivalent to the custody of the court, he being a

court officer. The order of the court dated January 27, 1970 was composed of two parts, requiring: 1) RCBC to deliver in check the amount garnished to the designated sheriff and 2) the sheriff in turn to cash the check and deliver the amount to the plaintiffs representative and/or counsel on record. It must be noted that in delivering the garnished amount in check to the sheriff, the RCBC did not thereby make any payment, for the law mandates that delivery of a check does not produce the effect of payment until it has been cashed. [Article 1249, Civil Code.] Moreover, by virtue of the order of garnishment, the same was placed in custodia legis and therefore, from that time on, RCBC was holding the funds subject to the orders of the court a quo. That the sheriff, upon delivery of the check to him by RCBC encashed it and turned over the proceeds thereof to the plaintiff was no longer the concern of RCBC as the responsibility over the garnished funds passed to the court. Thus, no breach of trust or dereliction of duty can be attributed to RCBC in delivering its depositor's funds pursuant to a court order which was merely in the exercise of its power of control over such funds. ... The garnishment of property to satisfy a writ of execution operates as an attachment and fastens upon the property a lien by which the property is brought under the jurisdiction of the court issuing the writ. It is brought into custodia legis, under the sole control of such court [De Leon v. Salvador, G.R. Nos. L-30871 and L-31603, December 28,1970, 36 SCRA 567, 574.] The respondent judge however, censured the petitioner for having released the funds "simply on the strength of the Order of the court which. far from ordering an immediate release of the amount involved, merely serves as a standing authority to make the release at the proper time as prescribed by the rules." [Rollo, p. 81.] This argument deserves no serious consideration. As stated earlier, the order directing the bank to deliver the amount to the sheriff was distinct and separate from the order directing the sheriff to encash the said check. The bank had no choice but to comply with the order demanding delivery of the garnished amount in check. The very tenor of the order called for immediate compliance therewith. On the other

hand, the bank cannot be held liable for the subsequent encashment of the check as this was upon order of the court in the exercise of its power of control over the funds placed in custodia legis by virtue of the garnishment. In a recent decision [Engineering Construction Inc., v. National Power Corporation, G.R. No. L-34589, June 29, 1988] penned by the now Chief Justice Marcelo Fernan, this Court absolved a garnishee from any liability for prompt compliance with its order for the delivery of the garnished funds. The rationale behind such ruling deserves emphasis in the present case: But while partial restitution is warranted in favor of NPC, we find that the Appellate Court erred in not absolving MERALCO, the garnishee, from its obligations to NPC with respect to the payment of ECI of P 1,114,543.23, thus in effect subjecting MERALCO to double liability. MERALCO should not have been faulted for its prompt obedience to a writ of garnishment. Unless there are compelling reasons such as: a defect on the face of the writ or actual knowledge on the part of the garnishee of lack of entitlement on the part of the garnisher, it is not incumbent upon the garnishee to inquire or to judge for itself whether or not the order for the advance execution of a judgment is valid. Section 8, Rule 57 of the Rules of Court provides: Effect of attachment of debts and credits.All persons having in their possession or under their control any credits or other similar personal property belonging to the party against whom attachment is issued, or owing any debts to the same, all the time of service upon them of a copy of the order of attachment and notice as provided in the last preceding section, shall be liable to the applicant for the amount of such credits, debts or other property, until the attachment be discharged, or any judgment recovered by him be satisfied, unless such property be delivered or transferred, or such debts be paid, to the clerk, sheriff or other proper officer of the court issuing the attachment. Garnishment is considered as a specie of attachment for reaching credits belonging to the judgment debtor and owing to him from a stranger to the litigation. Under the above-cited rule, the garnishee

[the third person] is obliged to deliver the credits, etc. to the proper officer issuing the writ and "the law exempts from liability the person having in his possession or under his control any credits or other personal property belonging to the defendant, ..., if such property be delivered or transferred, ..., to the clerk, sheriff, or other officer of the court in which the action is pending. [3 Moran, Comments on the Rules of Court 34 (1970 ed.)] Applying the foregoing to the case at bar, MERALCO, as garnishee, after having been judicially compelled to pay the amount of the judgment represented by funds in its possession belonging to the judgment debtor or NPC, should be released from all responsibilities over such amount after delivery thereof to the sheriff. The reason for the rule is self-evident. To expose garnishees to risks for obeying court orders and processes would only undermine the administration of justice. [Emphasis supplied.] The aforequoted ruling thus bolsters RCBC's stand that its immediate compliance with the lower court's order should not have been met with the harsh penalty of joint and several liability. Nor can its liability to reimburse PVTA of the amount delivered in check be premised upon the subsequent declaration of nullity of the order of delivery. As correctly pointed out by the petitioner: xxx xxx xxx That the respondent Judge, after his Order was enforced, saw fit to recall said Order and decree its nullity, should not prejudice one who dutifully abided by it, the presumption being that judicial orders are valid and issued in the regular performance of the duties of the Court" [Section 5(m) Rule 131, Revised Rules of Court]. This should operate with greater force in relation to the herein petitioner which, not being a party in the case, was just called upon to perform an act in accordance with a judicial flat. A contrary view will invite disrespect for the majesty of the law and induce reluctance in complying with judicial orders out of fear that said orders might be subsequently invalidated and thereby expose one to suffer some penalty or prejudice for obeying the same. And this is what will happen were the controversial orders to be sustained. We need not underscore the danger of this as a precedent.

xxx xxx xxx [ Brief for the Petitioner, Rollo, p. 212; Emphasis supplied.] From the foregoing, it may be concluded that the charge of breach of trust and/or dereliction of duty as well as lack of prudence in effecting the immediate payment of the garnished amount is totally unfounded. Upon receipt of the Notice of Garnishment, RCBC duly informed PVTA thereof to enable the latter to take the necessary steps for its protection. However, right on the very next day after its receipt of such notice, RCBC was already served with the Order requiring delivery of the garnished amount. Confronted as it was with a mandatory directive, disobedience to which exposed it to a contempt order, it had no choice but to comply. The respondent Judge nevertheless held that the liability of RCBC for the reimbursement of the garnished amount is predicated on the ruling of the Supreme Court in the case of Commissioner of Public Highways v. Hon. San Diego [G.R. No. L-30098, February 18, 1970, 31 SCRA 616] which he found practically on all fours with the case at bar. The Court disagrees. The said case which reiterated the rule in Republic v. Palacio [G.R. No. L-20322, May 29, 1968, 23 SCRA 899] that government funds and properties may not be seized under writs of execution or garnishment to satisfy such judgment is definitely distinguishable from the case at bar. In the Commissioner of Public Highways case [supra], the bank which precipitately allowed the garnishment and delivery of the funds failed to inform its depositor thereof, charged as it was with knowledge of the nullity of the writ of execution and notice of garnishment against government funds. In the aforementioned case, the funds involved belonged to the Bureau of Public Highways, which being an arm of the executive branch of the government, has no personality of its own separate from the National Government. The funds involved were government funds covered by the rule on exemption from execution. This brings us to the first issue raised by the petitioner: Are the PVTA

funds public funds exempt from garnishment? The Court holds that they are not. Republic Act No. 2265 created the PVTA as an ordinary corporation with all the attributes of a corporate entity subject to the provisions of the Corporation Law. Hence, it possesses the power "to sue and be sued" and "to acquire and hold such assets and incur such liabilities resulting directly from operations authorized by the provisions of this Act or as essential to the proper conduct of such operations." [Section 3, Republic Act No. 2265.] Among the specific powers vested in the PVTA are: 1) to buy Virginia tobacco grown in the Philippines for resale to local bona fide tobacco manufacturers and leaf tobacco dealers [Section 4(b), R.A. No. 2265]; 2) to contracts of any kind as may be necessary or incidental to the attainment of its purpose with any person, firm or corporation, with the Government of the Philippines or with any foreign government, subject to existing laws [Section 4(h), R.A. No. 22651; and 3) generally, to exercise all the powers of a corporation under the Corporation Law, insofar as they are not inconsistent with the provisions of this Act [Section 4(k), R.A. No. 2265.] From the foregoing, it is clear that PVTA has been endowed with a personality distinct and separate from the government which owns and controls it. Accordingly, this Court has heretofore declared that the funds of the PVTA can be garnished since "funds of public corporation which can sue and be sued were not exempt from garnishment" [Philippine National Bank v. Pabalan, G.R. No. L33112, June 15, 1978, 83 SCRA 595, 598.] In National Shipyards and Steel Corp. v. CIR [G.R. No. L-17874, August 31, 1964, 8 SCRA 781], this Court held that the allegation to the effect that the funds of the NASSCO are public funds of the government and that as such, the same may not be garnished, attached or levied upon is untenable for, as a government-owned or controlled corporation, it has a personality of its own, distinct and separate from that of the government. This court has likewise ruled that other govemment-owned and controlled corporations like National Coal Company, the National Waterworks and Sewerage Authority (NAWASA), the National Coconut Corporation (NACOCO)

the National Rice and Corn Corporation (NARIC) and the Price Stabilization Council (PRISCO) which possess attributes similar to those of the PVTA are clothed with personalities of their own, separate and distinct from that of the government [National Coal Company v. Collector of Internal Revenue, 46 Phil. 583 (1924); Bacani and Matoto v. National Coconut Corporation et al., 100 Phil. 471 (1956); Reotan v. National Rice & Corn Corporation, G.R. No. L16223, February 27, 1962, 4 SCRA 418.] The rationale in vesting it with a separate personality is not difficult to find. It is well-settled that when the government enters into commercial business, it abandons its sovereign capacity and is to be treated like any other corporation [Manila Hotel Employees' Association v. Manila Hotel Co. and CIR, 73 Phil. 734 (1941).] Accordingly, as emphatically expressed by this Court in a 1978 decision, "garnishment was the appropriate remedy for the prevailing party which could proceed against the funds of a corporate entity even if owned or controlled by the government" inasmuch as "by engaging in a particular business thru the instrumentality of a corporation, the government divests itself pro hac vice of its sovereign character, so as to render the corporation subject to the rules of law governing private corporations" [Philippine National Bank v. CIR, G.R No. L-32667, January 31, 1978, 81 SCRA 314, 319.] Furthermore, in the case of PVTA, the law has expressly allowed it funds to answer for various obligations, including the one sought to be enforced by plaintiff BADOC in this case (i.e. for unpaid deliveries of tobacco). Republic Act No. 4155, which discounted the erstwhile support given by the Central Bank to PVTA, established in lieu thereof a "Tobacco Fund" to be collected from the proceeds of fifty per centum of the tariff or taxes of imported leaf tobacco and also fifty per centum of the specific taxes on locally manufactured Virginia type cigarettes. Section 5 of Republic Act No. 4155 provides that this fund shall be expended for the support or payment of: 1. Indebtedness of the Philippine Virginia Tobacco Administration and the former Agricultural Credit and Cooperative Financing Administration to FACOMAS and farmers and planters regarding

Virginia tobacco transactions in previous years; 2. Indebtedness of the Philippine Virginia Tobacco Administration and the former Agricultural Credit and Cooperative Financing Administration to the Central Bank in gradual amounts regarding Virginia tobacco transactions in previous years; 3. Continuation of the Philippine Virginia Tobacco Administration support and subsidy operations including the purchase of locally grown and produced Virginia leaf tobacco, at the present support and subsidy prices, its procurement, redrying, handling, warehousing and disposal thereof, and the redrying plants trading within the purview of their contracts; 4. Operational, office and field expenses, and the establishment of the Tobacco Research and Grading Institute. [Emphasis supplied.] Inasmuch as the Tobacco Fund, a special fund, was by law, earmarked specifically to answer obligations incurred by PVTA in connection with its proprietary and commercial operations authorized under the law, it follows that said funds may be proceeded against by ordinary judicial processes such as execution and garnishment. If such funds cannot be executed upon or garnished pursuant to a judgment sustaining the liability of the PVTA to answer for its obligations, then the purpose of the law in creating the PVTA would be defeated. For it was declared to be a national policy, with respect to the local Virginia tobacco industry, to encourage the production of local Virginia tobacco of the qualities needed and in quantities marketable in both domestic and foreign markets, to establish this industry on an efficient and economic basis, and to create a climate conducive to local cigarette manufacture of the qualities desired by the consuming public, blending imported and native Virginia leaf tobacco to improve the quality of locally manufactured cigarettes [Section 1, Republic Act No. 4155.] The Commissioner of Public Highways case is thus distinguishable from the case at bar. In said case, the Philippine National Bank (PNB) as custodian of funds belonging to the Bureau of Public Highways, an agency of the government, was chargeable with knowledge of the exemption of such government funds from execution and

garnishment pursuant to the elementary precept that public funds cannot be disbursed without the appropriation required by law. On the other hand, the same cannot hold true for RCBC as the funds entrusted to its custody, which belong to a public corporation, are in the nature of private funds insofar as their susceptibility to garnishment is concerned. Hence, RCBC cannot be charged with lack of prudence for immediately complying with the order to deliver the garnished amount. Since the funds in its custody are precisely meant for the payment of lawfully-incurred obligations, RCBC cannot rightfully resist a court order to enforce payment of such obligations. That such court order subsequently turned out to have been erroneously issued should not operate to the detriment of one who complied with its clear order. Finally, it is contended that RCBC was bound to inquire into the legality and propriety of the Writ of Execution and Notice of Garnishment issued against the funds of the PVTA deposited with said bank. But the bank was in no position to question the legality of the garnishment since it was not even a party to the case. As correctly pointed out by the petitioner, it had neither the personality nor the interest to assail or controvert the orders of respondent Judge. It had no choice but to obey the same inasmuch as it had no standing at all to impugn the validity of the partial judgment rendered in favor of the plaintiff or of the processes issued in execution of such judgment. RCBC cannot therefore be compelled to make restitution solidarily with the plaintiff BADOC. Plaintiff BADOC alone was responsible for the issuance of the Writ of Execution and Order of Payment and so, the plaintiff alone should bear the consequences of a subsequent annulment of such court orders; hence, only the plaintiff can be ordered to restore the account of the PVTA. WHEREFORE, the petition is hereby granted and the petitioner is ABSOLVED from any liability to respondent PVTA for reimbursement of the funds garnished. The questioned Order of the respondent Judge ordering the petitioner, jointly and severally with BADOC, to restore the account of PVTA are modified accordingly. SO ORDERED.

G.R. Nos. 89898-99 October 1, 1990 MUNICIPALITY OF MAKATI, petitioner, vs. THE HONORABLE COURT OF APPEALS, HON. SALVADOR P. DE GUZMAN, JR., as Judge RTC of Makati, Branch CXLII ADMIRAL FINANCE CREDITORS CONSORTIUM, INC., and SHERIFF SILVINO R. PASTRANA, respondents. Defante & Elegado for petitioner. Roberto B. Lugue for private respondent Admiral Finance Creditors' Consortium, Inc. RESOLUTION

CORTS, J.: The present petition for review is an off-shoot of expropriation proceedings initiated by petitioner Municipality of Makati against private respondent Admiral Finance Creditors Consortium, Inc., Home Building System & Realty Corporation and one Arceli P. Jo, involving a parcel of land and improvements thereon located at Mayapis St., San Antonio Village, Makati and registered in the name of Arceli P. Jo under TCT No. S-5499. It appears that the action for eminent domain was filed on May 20, 1986, docketed as Civil Case No. 13699. Attached to petitioner's complaint was a certification that a bank account (Account No. S/A 265-537154-3) had been opened with the PNB Buendia Branch under petitioner's name containing the sum of P417,510.00, made pursuant to the provisions of Pres. Decree No. 42. After due hearing where the parties presented their respective appraisal reports regarding the value of the property, respondent RTC judge rendered a decision on June 4, 1987, fixing the appraised value of the property at P5,291,666.00, and ordering petitioner to pay this amount minus the advanced payment of P338,160.00 which was earlier released to private respondent. After this decision became final and executory, private respondent

moved for the issuance of a writ of execution. This motion was granted by respondent RTC judge. After issuance of the writ of execution, a Notice of Garnishment dated January 14, 1988 was served by respondent sheriff Silvino R. Pastrana upon the manager of the PNB Buendia Branch. However, respondent sheriff was informed that a "hold code" was placed on the account of petitioner. As a result of this, private respondent filed a motion dated January 27, 1988 praying that an order be issued directing the bank to deliver to respondent sheriff the amount equivalent to the unpaid balance due under the RTC decision dated June 4, 1987. Petitioner filed a motion to lift the garnishment, on the ground that the manner of payment of the expropriation amount should be done in installments which the respondent RTC judge failed to state in his decision. Private respondent filed its opposition to the motion. Pending resolution of the above motions, petitioner filed on July 20, 1988 a "Manifestation" informing the court that private respondent was no longer the true and lawful owner of the subject property because a new title over the property had been registered in the name of Philippine Savings Bank, Inc. (PSB) Respondent RTC judge issued an order requiring PSB to make available the documents pertaining to its transactions over the subject property, and the PNB Buendia Branch to reveal the amount in petitioner's account which was garnished by respondent sheriff. In compliance with this order, PSB filed a manifestation informing the court that it had consolidated its ownership over the property as mortgagee/purchaser at an extrajudicial foreclosure sale held on April 20, 1987. After several conferences, PSB and private respondent entered into a compromise agreement whereby they agreed to divide between themselves the compensation due from the expropriation proceedings. Respondent trial judge subsequently issued an order dated September 8, 1988 which: (1) approved the compromise agreement; (2) ordered PNB Buendia Branch to immediately release to PSB the sum of P4,953,506.45 which corresponds to the balance of the appraised value of the subject property under the RTC decision dated June 4, 1987, from the garnished account of petitioner; and, (3) ordered PSB and private respondent to execute the necessary deed of conveyance over the subject property in favor of petitioner.

Petitioner's motion to lift the garnishment was denied. Petitioner filed a motion for reconsideration, which was duly opposed by private respondent. On the other hand, for failure of the manager of the PNB Buendia Branch to comply with the order dated September 8, 1988, private respondent filed two succeeding motions to require the bank manager to show cause why he should not be held in contempt of court. During the hearings conducted for the above motions, the general manager of the PNB Buendia Branch, a Mr. Antonio Bautista, informed the court that he was still waiting for proper authorization from the PNB head office enabling him to make a disbursement for the amount so ordered. For its part, petitioner contended that its funds at the PNB Buendia Branch could neither be garnished nor levied upon execution, for to do so would result in the disbursement of public funds without the proper appropriation required under the law, citing the case of Republic of the Philippines v. Palacio [G.R. No. L-20322, May 29, 1968, 23 SCRA 899]. Respondent trial judge issued an order dated December 21, 1988 denying petitioner's motion for reconsideration on the ground that the doctrine enunciated in Republic v. Palacio did not apply to the case because petitioner's PNB Account No. S/A 265-537154-3 was an account specifically opened for the expropriation proceedings of the subject property pursuant to Pres. Decree No. 42. Respondent RTC judge likewise declared Mr. Antonio Bautista guilty of contempt of court for his inexcusable refusal to obey the order dated September 8, 1988, and thus ordered his arrest and detention until his compliance with the said order. Petitioner and the bank manager of PNB Buendia Branch then filed separate petitions for certiorari with the Court of Appeals, which were eventually consolidated. In a decision promulgated on June 28, 1989, the Court of Appeals dismissed both petitions for lack of merit, sustained the jurisdiction of respondent RTC judge over the funds contained in petitioner's PNB Account No. 265-537154-3, and affirmed his authority to levy on such funds. Its motion for reconsideration having been denied by the Court of Appeals, petitioner now files the present petition for review with prayer for preliminary injunction.

On November 20, 1989, the Court resolved to issue a temporary restraining order enjoining respondent RTC judge, respondent sheriff, and their representatives, from enforcing and/or carrying out the RTC order dated December 21, 1988 and the writ of garnishment issued pursuant thereto. Private respondent then filed its comment to the petition, while petitioner filed its reply. Petitioner not only reiterates the arguments adduced in its petition before the Court of Appeals, but also alleges for the first time that it has actually two accounts with the PNB Buendia Branch, to wit: xxx xxx xxx (1) Account No. S/A 265-537154-3 exclusively for the expropriation of the subject property, with an outstanding balance of P99,743.94. (2) Account No. S/A 263-530850-7 for statutory obligations and other purposes of the municipal government, with a balance of P170,098,421.72, as of July 12, 1989. xxx xxx xxx [Petition, pp. 6-7; Rollo, pp. 11-12.] Because the petitioner has belatedly alleged only in this Court the existence of two bank accounts, it may fairly be asked whether the second account was opened only for the purpose of undermining the legal basis of the assailed orders of respondent RTC judge and the decision of the Court of Appeals, and strengthening its reliance on the doctrine that public funds are exempted from garnishment or execution as enunciated in Republic v. Palacio [supra.] At any rate, the Court will give petitioner the benefit of the doubt, and proceed to resolve the principal issues presented based on the factual circumstances thus alleged by petitioner. Admitting that its PNB Account No. S/A 265-537154-3 was specifically opened for expropriation proceedings it had initiated over the subject property, petitioner poses no objection to the garnishment or the levy under execution of the funds deposited therein amounting to P99,743.94. However, it is petitioner's main contention that

inasmuch as the assailed orders of respondent RTC judge involved the net amount of P4,965,506.45, the funds garnished by respondent sheriff in excess of P99,743.94, which are public funds earmarked for the municipal government's other statutory obligations, are exempted from execution without the proper appropriation required under the law. There is merit in this contention. The funds deposited in the second PNB Account No. S/A 263-530850-7 are public funds of the municipal government. In this jurisdiction, well-settled is the rule that public funds are not subject to levy and execution, unless otherwise provided for by statute [Republic v. Palacio, supra.; The Commissioner of Public Highways v. San Diego, G.R. No. L-30098, February 18, 1970, 31 SCRA 616]. More particularly, the properties of a municipality, whether real or personal, which are necessary for public use cannot be attached and sold at execution sale to satisfy a money judgment against the municipality. Municipal revenues derived from taxes, licenses and market fees, and which are intended primarily and exclusively for the purpose of financing the governmental activities and functions of the municipality, are exempt from execution [See Viuda De Tan Toco v. The Municipal Council of Iloilo, 49 Phil. 52 (1926): The Municipality of Paoay, Ilocos Norte v. Manaois, 86 Phil. 629 (1950); Municipality of San Miguel, Bulacan v. Fernandez, G.R. No. 61744, June 25, 1984, 130 SCRA 56]. The foregoing rule finds application in the case at bar. Absent a showing that the municipal council of Makati has passed an ordinance appropriating from its public funds an amount corresponding to the balance due under the RTC decision dated June 4, 1987, less the sum of P99,743.94 deposited in Account No. S/A 265-537154-3, no levy under execution may be validly effected on the public funds of petitioner deposited in Account No. S/A 263-530850-7. Nevertheless, this is not to say that private respondent and PSB are left with no legal recourse. Where a municipality fails or refuses, without justifiable reason, to effect payment of a final money judgment rendered against it, the claimant may avail of the remedy of mandamus in order to compel the enactment and approval of the necessary appropriation ordinance, and the corresponding disbursement of municipal funds therefor [See Viuda De Tan Toco v. The Municipal Council of Iloilo, supra; Baldivia v. Lota, 107 Phil. 1099

(1960); Yuviengco v. Gonzales, 108 Phil. 247 (1960)]. In the case at bar, the validity of the RTC decision dated June 4, 1987 is not disputed by petitioner. No appeal was taken therefrom. For three years now, petitioner has enjoyed possession and use of the subject property notwithstanding its inexcusable failure to comply with its legal obligation to pay just compensation. Petitioner has benefited from its possession of the property since the same has been the site of Makati West High School since the school year 19861987. This Court will not condone petitioner's blatant refusal to settle its legal obligation arising from expropriation proceedings it had in fact initiated. It cannot be over-emphasized that, within the context of the State's inherent power of eminent domain, . . . [j]ust compensation means not only the correct determination of the amount to be paid to the owner of the land but also the payment of the land within a reasonable time from its taking. Without prompt payment, compensation cannot be considered "just" for the property owner is made to suffer the consequence of being immediately deprived of his land while being made to wait for a decade or more before actually receiving the amount necessary to cope with his loss [Cosculluela v. The Honorable Court of Appeals, G.R. No. 77765, August 15, 1988, 164 SCRA 393, 400. See also Provincial Government of Sorsogon v. Vda. de Villaroya, G.R. No. 64037, August 27, 1987, 153 SCRA 291]. The State's power of eminent domain should be exercised within the bounds of fair play and justice. In the case at bar, considering that valuable property has been taken, the compensation to be paid fixed and the municipality is in full possession and utilizing the property for public purpose, for three (3) years, the Court finds that the municipality has had more than reasonable time to pay full compensation. WHEREFORE, the Court Resolved to ORDER petitioner Municipality of Makati to immediately pay Philippine Savings Bank, Inc. and private respondent the amount of P4,953,506.45. Petitioner is hereby required to submit to this Court a report of its compliance with the foregoing order within a non-extendible period of SIXTY (60) DAYS from the date of receipt of this resolution.

The order of respondent RTC judge dated December 21, 1988, which was rendered in Civil Case No. 13699, is SET ASIDE and the temporary restraining order issued by the Court on November 20, 1989 is MADE PERMANENT. SO ORDERED. Fernan, C.J., Gutierrez, Jr., Feliciano and Bidin, JJ., concur.

G.R. No. L-55963 December 1, 1989 SPOUSES JOSE FONTANILLA AND VIRGINIA FONTANILLA, petitioners, vs. HONORABLE INOCENCIO D. MALIAMAN and NATIONAL IRRIGATION ADMINISTRATION, respondents. G.R. No. L-61045 December 1, 1989 NATIONAL IRRIGATION ADMINISTRATION, appellant, vs. SPOUSES JOSE FONTANILLA and VIRGINIA FONTANILLA, appellees. Cecilio V. Suarez, Jr. for Spouses Fontanilla. Felicisimo C. Villaflor for NIA.

PARAS, J.: In G.R. No. L-55963, the petition for review on certiorari seeks the affirmance of the decision dated March 20, 1980 of the then Court of First Instance of Nueva Ecija, Branch VIII, at San Jose City and its modification with respect to the denial of petitioner's claim for moral and exemplary damages and attorneys fees. In G.R. No. 61045, respondent National Irrigation Administration seeks the reversal of the aforesaid decision of the lower court. The original appeal of this case before the Court of Appeals was certified to this Court and in the resolution of July 7, 1982, it was docketed with the aforecited number. And in the resolution of April 3, this case was consolidated with G.R. No. 55963. It appears that on August 21, 1976 at about 6:30 P.M., a pickup owned and operated by respondent National Irrigation Administration, a government agency bearing Plate No. IN-651, then driven officially by Hugo Garcia, an employee of said agency as its regular driver, bumped a bicycle ridden by Francisco Fontanilla, son of herein petitioners, and Restituto Deligo, at Maasin, San Jose City along the Maharlika Highway. As a result of the impact, Francisco Fontanilla and Restituto Deligo were injured and brought to the San Jose City

Emergency Hospital for treatment. Fontanilla was later transferred to the Cabanatuan Provincial Hospital where he died. Garcia was then a regular driver of respondent National Irrigation Administration who, at the time of the accident, was a licensed professional driver and who qualified for employment as such regular driver of respondent after having passed the written and oral examinations on traffic rules and maintenance of vehicles given by National Irrigation Administration authorities. The within petition is thus an off-shot of the action (Civil Case No. SJC-56) instituted by petitioners-spouses on April 17, 1978 against respondent NIA before the then Court of First Instance of Nueva Ecija, Branch VIII at San Jose City, for damages in connection with the death of their son resulting from the aforestated accident. After trial, the trial court rendered judgment on March 20, 1980 which directed respondent National Irrigation Administration to pay damages (death benefits) and actual expenses to petitioners. The dispositive portion of the decision reads thus: . . . . . Judgment is here rendered ordering the defendant National Irrigation Administration to pay to the heirs of the deceased P12,000.00 for the death of Francisco Fontanilla; P3,389.00 which the parents of the deceased had spent for the hospitalization and burial of the deceased Francisco Fontanilla; and to pay the costs. (Brief for the petitioners spouses Fontanilla, p. 4; Rollo, p. 132) Respondent National Irrigation Administration filed on April 21, 1980, its motion for reconsideration of the aforesaid decision which respondent trial court denied in its Order of June 13, 1980. Respondent National Irrigation Administration thus appealed said decision to the Court of Appeals (C.A.-G.R. No. 67237- R) where it filed its brief for appellant in support of its position. Instead of filing the required brief in the aforecited Court of Appeals case, petitioners filed the instant petition with this Court. The sole issue for the resolution of the Court is: Whether or not the award of moral damages, exemplary damages and attorney's fees is legally proper in a complaint for damages based on quasi-delict which

resulted in the death of the son of herein petitioners. Petitioners allege: 1. The award of moral damages is specifically allowable. under paragraph 3 of Article 2206 of the New Civil Code which provides that the spouse, legitimate and illegitimate descendants and ascendants of the deceased may demand moral damages for mental anguish by reason of the death of the deceased. Should moral damages be granted, the award should be made to each of petitioners-spouses individually and in varying amounts depending upon proof of mental and depth of intensity of the same, which should not be less than P50,000.00 for each of them. 2. The decision of the trial court had made an impression that respondent National Irrigation Administration acted with gross negligence because of the accident and the subsequent failure of the National Irrigation Administration personnel including the driver to stop in order to give assistance to the, victims. Thus, by reason of the gross negligence of respondent, petitioners become entitled to exemplary damages under Arts. 2231 and 2229 of the New Civil Code. 3. Petitioners are entitled to an award of attorney's fees, the amount of which (20%) had been sufficiently established in the hearing of May 23, 1979. 4. This petition has been filed only for the purpose of reviewing the findings of the lower court upon which the disallowance of moral damages, exemplary damages and attorney's fees was based and not for the purpose of disturbing the other findings of fact and conclusions of law. The Solicitor General, taking up the cudgels for public respondent National Irrigation Administration, contends thus: 1. The filing of the instant petition is rot proper in view of the appeal taken by respondent National Irrigation Administration to the Court of Appeals against the judgment sought to be reviewed. The focal issue raised in respondent's appeal to the Court of Appeals involves the question as to whether or not the driver of the vehicle that bumped

the victims was negligent in his operation of said vehicle. It thus becomes necessary that before petitioners' claim for moral and exemplary damages could be resolved, there should first be a finding of negligence on the part of respondent's employee-driver. In this regard, the Solicitor General alleges that the trial court decision does not categorically contain such finding. 2. The filing of the "Appearance and Urgent Motion For Leave to File Plaintiff-Appellee's Brief" dated December 28, 1981 by petitioners in the appeal (CA-G.R. No. 67237-R; and G. R. No.61045) of the respondent National Irrigation Administration before the Court of Appeals, is an explicit admission of said petitioners that the herein petition, is not proper. Inconsistent procedures are manifest because while petitioners question the findings of fact in the Court of Appeals, they present only the questions of law before this Court which posture confirms their admission of the facts. 3. The fact that the parties failed to agree on whether or not negligence caused the vehicular accident involves a question of fact which petitioners should have brought to the Court of Appeals within the reglementary period. Hence, the decision of the trial court has become final as to the petitioners and for this reason alone, the petition should be dismissed. 4. Respondent Judge acted within his jurisdiction, sound discretion and in conformity with the law. 5. Respondents do not assail petitioners' claim to moral and exemplary damages by reason of the shock and subsequent illness they suffered because of the death of their son. Respondent National Irrigation Administration, however, avers that it cannot be held liable for the damages because it is an agency of the State performing governmental functions and driver Hugo Garcia was a regular driver of the vehicle, not a special agent who was performing a job or act foreign to his usual duties. Hence, the liability for the tortious act should. not be borne by respondent government agency but by driver Garcia who should answer for the consequences of his act. 6. Even as the trial court touched on the failure or laxity of respondent National Irrigation Administration in exercising due diligence in the

selection and supervision of its employee, the matter of due diligence is not an issue in this case since driver Garcia was not its special agent but a regular driver of the vehicle. The sole legal question on whether or not petitioners may be entitled to an award of moral and exemplary damages and attorney's fees can very well be answered with the application of Arts. 2176 and 2180 of theNew Civil Code. Art. 2176 thus provides: Whoever by act omission causes damage to another, there being fault or negligence, is obliged to pay for damage done. Such fault or negligence, if there is no pre-existing cotractual relation between the parties, is called a quasi-delict and is governed by the provisions of this Chapter Paragraphs 5 and 6 of Art. 21 80 read as follows: Employers shall be liable for the damages caused by their employees and household helpers acting within the scope of their assigned tasks, even the though the former are not engaged in any business or industry. The State is responsible in like manner when it acts through a special agent.; but not when the damage has been caused by the official to whom the task done properly pertains, in which case what is provided in Art. 2176 shall be applicable. The liability of the State has two aspects. namely: 1. Its public or governmental aspects where it is liable for the tortious acts of special agents only. 2. Its private or business aspects (as when it engages in private enterprises) where it becomes liable as an ordinary employer. (p. 961, Civil Code of the Philippines; Annotated, Paras; 1986 Ed. ). In this jurisdiction, the State assumes a limited liability for the damage caused by the tortious acts or conduct of its special agent.

Under the aforequoted paragrah 6 of Art. 2180, the State has voluntarily assumed liability for acts done through special agents. The State's agent, if a public official, must not only be specially commissioned to do a particular task but that such task must be foreign to said official's usual governmental functions. If the State's agent is not a public official, and is commissioned to perform nongovernmental functions, then the State assumes the role of an ordinary employer and will be held liable as such for its agent's tort. Where the government commissions a private individual for a special governmental task, it is acting through a special agent within the meaning of the provision. (Torts and Damages, Sangco, p. 347, 1984 Ed.) Certain functions and activities, which can be performed only by the government, are more or less generally agreed to be "governmental" in character, and so the State is immune from tort liability. On the other hand, a service which might as well be provided by a private corporation, and particularly when it collects revenues from it, the function is considered a "proprietary" one, as to which there may be liability for the torts of agents within the scope of their employment. The National Irrigation Administration is an agency of the government exercising proprietary functions, by express provision of Rep. Act No. 3601. Section 1 of said Act provides: Section 1. Name and domicile.-A body corporate is hereby created which shall be known as the National Irrigation Administration, hereinafter called the NIA for short, which shall be organized immediately after the approval of this Act. It shall have its principal seat of business in the City of Manila and shall have representatives in all provinces for the proper conduct of its business. Section 2 of said law spells out some of the NIA's proprietary functions. ThusSec. 2. Powers and objectives.-The NIA shall have the following powers and objectives: (a) x x x x x x x x x x x x x x x x x x (b) x x x x x x x x x x x x x x x x x x

(c) To collect from the users of each irrigation system constructed by it such fees as may be necessary to finance the continuous operation of the system and reimburse within a certain period not less than twenty-five years cost of construction thereof; and (d) To do all such other tthings and to transact all such business as are directly or indirectly necessary, incidental or conducive to the attainment of the above objectives. Indubitably, the NIA is a government corporation with juridical personality and not a mere agency of the government. Since it is a corporate body performing non-governmental functions, it now becomes liable for the damage caused by the accident resulting from the tortious act of its driver-employee. In this particular case, the NIA assumes the responsibility of an ordinary employer and as such, it becomes answerable for damages. This assumption of liability, however, is predicated upon the existence of negligence on the part of respondent NIA. The negligence referred to here is the negligence of supervision. At this juncture, the matter of due diligence on the part of respondent NIA becomes a crucial issue in determining its liability since it has been established that respondent is a government agency performing proprietary functions and as such, it assumes the posture of an ordinary employer which, under Par. 5 of Art. 2180, is responsible for the damages caused by its employees provided that it has failed to observe or exercise due diligence in the selection and supervision of the driver. It will be noted from the assailed decision of the trial court that "as a result of the impact, Francisco Fontanilla was thrown to a distance 50 meters away from the point of impact while Restituto Deligo was thrown a little bit further away. The impact took place almost at the edge of the cemented portion of the road." (Emphasis supplied,) [page 26, Rollo] The lower court further declared that "a speeding vehicle coming in contact with a person causes force and impact upon the vehicle that anyone in the vehicle cannot fail to notice. As a matter of fact, the impact was so strong as shown by the fact that the vehicle suffered

dents on the right side of the radiator guard, the hood, the fender and a crack on the radiator as shown by the investigation report (Exhibit "E"). (Emphasis supplied) [page 29, Rollo] It should be emphasized that the accident happened along the Maharlika National Road within the city limits of San Jose City, an urban area. Considering the fact that the victim was thrown 50 meters away from the point of impact, there is a strong indication that driver Garcia was driving at a high speed. This is confirmed by the fact that the pick-up suffered substantial and heavy damage as abovedescribed and the fact that the NIA group was then "in a hurry to reach the campsite as early as possible", as shown by their not stopping to find out what they bumped as would have been their normal and initial reaction. Evidently, there was negligence in the supervision of the driver for the reason that they were travelling at a high speed within the city limits and yet the supervisor of the group, Ely Salonga, failed to caution and make the driver observe the proper and allowed speed limit within the city. Under the situation, such negligence is further aggravated by their desire to reach their destination without even checking whether or not the vehicle suffered damage from the object it bumped, thus showing imprudence and reckelessness on the part of both the driver and the supervisor in the group. Significantly, this Court has ruled that even if the employer can prove the diligence in the selection and supervision (the latter aspect has not been established herein) of the employee, still if he ratifies the wrongful acts, or take no step to avert further damage, the employer would still be liable. (Maxion vs. Manila Railroad Co., 44 Phil. 597). Thus, too, in the case of Vda. de Bonifacio vs. B.L.T. Bus Co. (L26810, August 31, 1970, 34 SCRA 618), this Court held that a driver should be especially watchful in anticipation of others who may be using the highway, and his failure to keep a proper look out for reasons and objects in the line to be traversed constitutes negligence. Considering the foregoing, respondent NIA is hereby directed to pay herein petitioners-spouses the amounts of P12,000.00 for the death

of Francisco Fontanilla; P3,389.00 for hospitalization and burial expenses of the aforenamed deceased; P30,000.00 as moral damages; P8,000.00 as exemplary damages and attorney's fees of 20% of the total award. SO ORDERED. Padilla, Sarmiento and Regalado, JJ., concur. Melencio- Herrera (Chairperson,), J., is on leave.

G.R. No. 183591

October 14, 2008

THE PROVINCE OF NORTH COTABATO, duly represented by GOVERNOR JESUS SACDALAN and/or VICE-GOVERNOR EMMANUEL PIOL, for and in his own behalf, petitioners, vs. THE GOVERNMENT OF THE REPUBLIC OF THE PHILIPPINES PEACE PANEL ON ANCESTRAL DOMAIN (GRP), represented by SEC. RODOLFO GARCIA, ATTY. LEAH ARMAMENTO, ATTY. SEDFREY CANDELARIA, MARK RYAN SULLIVAN and/or GEN. HERMOGENES ESPERON, JR., the latter in his capacity as the present and duly-appointed Presidential Adviser on the Peace Process (OPAPP) or the so-called Office of the Presidential Adviser on the Peace Process, respondents. x--------------------------------------------x G.R. No. 183752 October 14, 2008

CITY GOVERNMENT OF ZAMBOANGA, as represented by HON. CELSO L. LOBREGAT, City Mayor of Zamboanga, and in his personal capacity as resident of the City of Zamboanga, Rep. MA. ISABELLE G. CLIMACO, District 1, and Rep. ERICO BASILIO A. FABIAN, District 2, City of Zamboanga, petitioners, vs. THE GOVERNMENT OF THE REPUBLIC OF THE PHILIPPINES PEACE NEGOTIATING PANEL (GRP), as represented by RODOLFO C. GARCIA, LEAH ARMAMENTO, SEDFREY CANDELARIA, MARK RYAN SULLIVAN and HERMOGENES ESPERON, in his capacity as the Presidential Adviser on Peace Process, respondents. x--------------------------------------------x G.R. No. 183893 October 14, 2008

THE CITY OF ILIGAN, duly represented by CITY MAYOR LAWRENCE LLUCH CRUZ, petitioner, vs. THE GOVERNMENT OF THE REPUBLIC OF THE PHILIPPINES PEACE PANEL ON ANCESTRAL DOMAIN (GRP), represented by SEC. RODOLFO GARCIA, ATTY. LEAH ARMAMENTO, ATTY. SEDFREY CANDELARIA, MARK RYAN SULLIVAN; GEN. HERMOGENES ESPERON, JR., in his capacity as the present and duly appointed Presidential Adviser on the Peace Process; and/or

SEC. EDUARDO ERMITA, in his capacity as Executive Secretary. respondents. x--------------------------------------------x G.R. No. 183951 October 14, 2008

THE PROVINCIAL GOVERNMENT OF ZAMBOANGA DEL NORTE, as represented by HON. ROLANDO E. YEBES, in his capacity as Provincial Governor, HON. FRANCIS H. OLVIS, in his capacity as Vice-Governor and Presiding Officer of the Sangguniang Panlalawigan, HON. CECILIA JALOSJOS CARREON, Congresswoman, 1st Congressional District, HON. CESAR G. JALOSJOS, Congressman, 3rd Congressional District, and Members of the Sangguniang Panlalawigan of the Province of Zamboanga del Norte, namely, HON. SETH FREDERICK P. JALOSJOS, HON. FERNANDO R. CABIGON, JR., HON. ULDARICO M. MEJORADA II, HON. EDIONAR M. ZAMORAS, HON. EDGAR J. BAGUIO, HON. CEDRIC L. ADRIATICO, HON. FELIXBERTO C. BOLANDO, HON. JOSEPH BRENDO C. AJERO, HON. NORBIDEIRI B. EDDING, HON. ANECITO S. DARUNDAY, HON. ANGELICA J. CARREON and HON. LUZVIMINDA E. TORRINO, petitioners, vs. THE GOVERNMENT OF THE REPUBLIC OF THE PHILIPPINES PEACE NEGOTIATING PANEL [GRP], as represented by HON. RODOLFO C. GARCIA and HON. HERMOGENES ESPERON, in his capacity as the Presidential Adviser of Peace Process, respondents. x--------------------------------------------x G.R. No. 183962 October 14, 2008

ERNESTO M. MACEDA, JEJOMAR C. BINAY, and AQUILINO L. PIMENTEL III, petitioners, vs. THE GOVERNMENT OF THE REPUBLIC OF THE PHILIPPINES PEACE NEGOTIATING PANEL, represented by its Chairman RODOLFO C. GARCIA, and the MORO ISLAMIC LIBERATION FRONT PEACE NEGOTIATING PANEL, represented by its Chairman MOHAGHER IQBAL, respondents. x--------------------------------------------x

FRANKLIN M. DRILON and ADEL ABBAS TAMANO, petitioners-inintervention. x--------------------------------------------x SEN. MANUEL A. ROXAS, petitioners-in-intervention. x--------------------------------------------x MUNICIPALITY OF LINAMON duly represented by its Municipal Mayor NOEL N. DEANO, petitioners-in-intervention, x--------------------------------------------x THE CITY OF ISABELA, BASILAN PROVINCE, represented by MAYOR CHERRYLYN P. SANTOS-AKBAR, petitioners-inintervention. x--------------------------------------------x THE PROVINCE OF SULTAN KUDARAT, rep. by HON. SUHARTO T. MANGUDADATU, in his capacity as Provincial Governor and a resident of the Province of Sultan Kudarat, petitioner-inintervention. x-------------------------------------------x RUY ELIAS LOPEZ, for and in his own behalf and on behalf of Indigenous Peoples in Mindanao Not Belonging to the MILF, petitioner-in-intervention. x--------------------------------------------x CARLO B. GOMEZ, GERARDO S. DILIG, NESARIO G. AWAT, JOSELITO C. ALISUAG and RICHALEX G. JAGMIS, as citizens and residents of Palawan, petitioners-in-intervention. x--------------------------------------------x MARINO RIDAO and KISIN BUXANI, petitioners-in-intervention. x--------------------------------------------x

MUSLIM LEGAL ASSISTANCE FOUNDATION, INC (MUSLAF), respondent-in-intervention. x--------------------------------------------x MUSLIM MULTI-SECTORAL MOVEMENT FOR PEACE & DEVELOPMENT (MMMPD), respondent-in-intervention. x--------------------------------------------x DECISION CARPIO MORALES, J.: Subject of these consolidated cases is the extent of the powers of the President in pursuing the peace process. While the facts surrounding this controversy center on the armed conflict in Mindanao between the government and the Moro Islamic Liberation Front (MILF), the legal issue involved has a bearing on all areas in the country where there has been a long-standing armed conflict. Yet again, the Court is tasked to perform a delicate balancing act. It must uncompromisingly delineate the bounds within which the President may lawfully exercise her discretion, but it must do so in strict adherence to the Constitution, lest its ruling unduly restricts the freedom of action vested by that same Constitution in the Chief Executive precisely to enable her to pursue the peace process effectively. I. FACTUAL ANTECEDENTS OF THE PETITIONS On August 5, 2008, the Government of the Republic of the Philippines (GRP) and the MILF, through the Chairpersons of their respective peace negotiating panels, were scheduled to sign a Memorandum of Agreement on the Ancestral Domain (MOA-AD) Aspect of the GRP-MILF Tripoli Agreement on Peace of 2001 in Kuala Lumpur, Malaysia. The MILF is a rebel group which was established in March 1984 when, under the leadership of the late Salamat Hashim, it splintered from the Moro National Liberation Front (MNLF) then headed by Nur Misuari, on the ground, among others, of what Salamat perceived to

be the manipulation of the MNLF away from an Islamic basis towards Marxist-Maoist orientations.1 The signing of the MOA-AD between the GRP and the MILF was not to materialize, however, for upon motion of petitioners, specifically those who filed their cases before the scheduled signing of the MOAAD, this Court issued a Temporary Restraining Order enjoining the GRP from signing the same. The MOA-AD was preceded by a long process of negotiation and the concluding of several prior agreements between the two parties beginning in 1996, when the GRP-MILF peace negotiations began. On July 18, 1997, the GRP and MILF Peace Panels signed the Agreement on General Cessation of Hostilities. The following year, they signed the General Framework of Agreement of Intent on August 27, 1998. The Solicitor General, who represents respondents, summarizes the MOA-AD by stating that the same contained, among others, the commitment of the parties to pursue peace negotiations, protect and respect human rights, negotiate with sincerity in the resolution and pacific settlement of the conflict, and refrain from the use of threat or force to attain undue advantage while the peace negotiations on the substantive agenda are on-going.2 Early on, however, it was evident that there was not going to be any smooth sailing in the GRP-MILF peace process. Towards the end of 1999 up to early 2000, the MILF attacked a number of municipalities in Central Mindanao and, in March 2000, it took control of the town hall of Kauswagan, Lanao del Norte.3 In response, then President Joseph Estrada declared and carried out an "all-out-war" against the MILF. When President Gloria Macapagal-Arroyo assumed office, the military offensive against the MILF was suspended and the government sought a resumption of the peace talks. The MILF, according to a leading MILF member, initially responded with deep reservation, but when President Arroyo asked the Government of Malaysia through Prime Minister Mahathir Mohammad to help convince the MILF to return to the negotiating table, the MILF

convened its Central Committee to seriously discuss the matter and, eventually, decided to meet with the GRP.4 The parties met in Kuala Lumpur on March 24, 2001, with the talks being facilitated by the Malaysian government, the parties signing on the same date the Agreement on the General Framework for the Resumption of Peace Talks Between the GRP and the MILF. The MILF thereafter suspended all its military actions.5 Formal peace talks between the parties were held in Tripoli, Libya from June 20-22, 2001, the outcome of which was the GRP-MILF Tripoli Agreement on Peace (Tripoli Agreement 2001) containing the basic principles and agenda on the following aspects of the negotiation: Security Aspect, Rehabilitation Aspect, and Ancestral Domain Aspect. With regard to the Ancestral Domain Aspect, the parties in Tripoli Agreement 2001 simply agreed "that the same be discussed further by the Parties in their next meeting." A second round of peace talks was held in Cyberjaya, Malaysia on August 5-7, 2001 which ended with the signing of the Implementing Guidelines on the Security Aspect of the Tripoli Agreement 2001 leading to a ceasefire status between the parties. This was followed by the Implementing Guidelines on the Humanitarian Rehabilitation and Development Aspects of the Tripoli Agreement 2001, which was signed on May 7, 2002 at Putrajaya, Malaysia. Nonetheless, there were many incidence of violence between government forces and the MILF from 2002 to 2003. Meanwhile, then MILF Chairman Salamat Hashim passed away on July 13, 2003 and he was replaced by Al Haj Murad, who was then the chief peace negotiator of the MILF. Murad's position as chief peace negotiator was taken over by Mohagher Iqbal.6 In 2005, several exploratory talks were held between the parties in Kuala Lumpur, eventually leading to the crafting of the draft MOA-AD in its final form, which, as mentioned, was set to be signed last August 5, 2008. II. STATEMENT OF THE PROCEEDINGS Before the Court is what is perhaps the most contentious

"consensus" ever embodied in an instrument - the MOA-AD which is assailed principally by the present petitions bearing docket numbers 183591, 183752, 183893, 183951 and 183962. Commonly impleaded as respondents are the GRP Peace Panel on Ancestral Domain7 and the Presidential Adviser on the Peace Process (PAPP) Hermogenes Esperon, Jr. On July 23, 2008, the Province of North Cotabato8 and Vice-Governor Emmanuel Piol filed a petition, docketed as G.R. No. 183591, for Mandamus and Prohibition with Prayer for the Issuance of Writ of Preliminary Injunction and Temporary Restraining Order.9 Invoking the right to information on matters of public concern, petitioners seek to compel respondents to disclose and furnish them the complete and official copies of the MOA-AD including its attachments, and to prohibit the slated signing of the MOA-AD, pending the disclosure of the contents of the MOA-AD and the holding of a public consultation thereon. Supplementarily, petitioners pray that the MOA-AD be declared unconstitutional.10 This initial petition was followed by another one, docketed as G.R. No. 183752, also for Mandamus and Prohibition11 filed by the City of Zamboanga,12 Mayor Celso Lobregat, Rep. Ma. Isabelle Climaco and Rep. Erico Basilio Fabian who likewise pray for similar injunctive reliefs. Petitioners herein moreover pray that the City of Zamboanga be excluded from the Bangsamoro Homeland and/or Bangsamoro Juridical Entity and, in the alternative, that the MOA-AD be declared null and void. By Resolution of August 4, 2008, the Court issued a Temporary Restraining Order commanding and directing public respondents and their agents to cease and desist from formally signing the MOA-AD.13 The Court also required the Solicitor General to submit to the Court and petitioners the official copy of the final draft of the MOA-AD,14 to which she complied.15 Meanwhile, the City of Iligan16 filed a petition for Injunction and/or Declaratory Relief, docketed as G.R. No. 183893, praying that respondents be enjoined from signing the MOA-AD or, if the same had already been signed, from implementing the same, and that the

MOA-AD be declared unconstitutional. Petitioners herein additionally implead Executive Secretary Eduardo Ermita as respondent. The Province of Zamboanga del Norte,17 Governor Rolando Yebes, Vice-Governor Francis Olvis, Rep. Cecilia Jalosjos-Carreon, Rep. Cesar Jalosjos, and the members18 of the Sangguniang Panlalawigan of Zamboanga del Norte filed on August 15, 2008 a petition for Certiorari, Mandamus and Prohibition,19 docketed as G.R. No. 183951. They pray, inter alia, that the MOA-AD be declared null and void and without operative effect, and that respondents be enjoined from executing the MOA-AD. On August 19, 2008, Ernesto Maceda, Jejomar Binay, and Aquilino Pimentel III filed a petition for Prohibition,20 docketed as G.R. No. 183962, praying for a judgment prohibiting and permanently enjoining respondents from formally signing and executing the MOA-AD and or any other agreement derived therefrom or similar thereto, and nullifying the MOA-AD for being unconstitutional and illegal. Petitioners herein additionally implead as respondent the MILF Peace Negotiating Panel represented by its Chairman Mohagher Iqbal. Various parties moved to intervene and were granted leave of court to file their petitions-/comments-in-intervention. Petitioners-inIntervention include Senator Manuel A. Roxas, former Senate President Franklin Drilon and Atty. Adel Tamano, the City of Isabela21 and Mayor Cherrylyn Santos-Akbar, the Province of Sultan Kudarat22 and Gov. Suharto Mangudadatu, the Municipality of Linamon in Lanao del Norte,23 Ruy Elias Lopez of Davao City and of the Bagobo tribe, Sangguniang Panlungsod member Marino Ridao and businessman Kisin Buxani, both of Cotabato City; and lawyers Carlo Gomez, Gerardo Dilig, Nesario Awat, Joselito Alisuag, Richalex Jagmis, all of Palawan City. The Muslim Legal Assistance Foundation, Inc. (Muslaf) and the Muslim Multi-Sectoral Movement for Peace and Development (MMMPD) filed their respective Comments-in-Intervention. By subsequent Resolutions, the Court ordered the consolidation of the petitions. Respondents filed Comments on the petitions, while some of petitioners submitted their respective Replies.

Respondents, by Manifestation and Motion of August 19, 2008, stated that the Executive Department shall thoroughly review the MOA-AD and pursue further negotiations to address the issues hurled against it, and thus moved to dismiss the cases. In the succeeding exchange of pleadings, respondents' motion was met with vigorous opposition from petitioners. The cases were heard on oral argument on August 15, 22 and 29, 2008 that tackled the following principal issues: 1. Whether the petitions have become moot and academic (i) insofar as the mandamus aspect is concerned, in view of the disclosure of official copies of the final draft of the Memorandum of Agreement (MOA); and (ii) insofar as the prohibition aspect involving the Local Government Units is concerned, if it is considered that consultation has become fait accompli with the finalization of the draft; 2. Whether the constitutionality and the legality of the MOA is ripe for adjudication; 3. Whether respondent Government of the Republic of the Philippines Peace Panel committed grave abuse of discretion amounting to lack or excess of jurisdiction when it negotiated and initiated the MOA vis-vis ISSUES Nos. 4 and 5; 4. Whether there is a violation of the people's right to information on matters of public concern (1987 Constitution, Article III, Sec. 7) under a state policy of full disclosure of all its transactions involving public interest (1987 Constitution, Article II, Sec. 28) including public consultation under Republic Act No. 7160 (LOCAL GOVERNMENT CODE OF 1991)[;] If it is in the affirmative, whether prohibition under Rule 65 of the 1997 Rules of Civil Procedure is an appropriate remedy; 5. Whether by signing the MOA, the Government of the Republic of the Philippines would be BINDING itself

a) to create and recognize the Bangsamoro Juridical Entity (BJE) as a separate state, or a juridical, territorial or political subdivision not recognized by law; b) to revise or amend the Constitution and existing laws to conform to the MOA; c) to concede to or recognize the claim of the Moro Islamic Liberation Front for ancestral domain in violation of Republic Act No. 8371 (THE INDIGENOUS PEOPLES RIGHTS ACT OF 1997), particularly Section 3(g) & Chapter VII (DELINEATION, RECOGNITION OF ANCESTRAL DOMAINS)[;] If in the affirmative, whether the Executive Branch has the authority to so bind the Government of the Republic of the Philippines; 6. Whether the inclusion/exclusion of the Province of North Cotabato, Cities of Zamboanga, Iligan and Isabela, and the Municipality of Linamon, Lanao del Norte in/from the areas covered by the projected Bangsamoro Homeland is a justiciable question; and 7. Whether desistance from signing the MOA derogates any prior valid commitments of the Government of the Republic of the Philippines.24 The Court, thereafter, ordered the parties to submit their respective Memoranda. Most of the parties submitted their memoranda on time. III. OVERVIEW OF THE MOA-AD As a necessary backdrop to the consideration of the objections raised in the subject five petitions and six petitions-in-intervention against the MOA-AD, as well as the two comments-in-intervention in favor of the MOA-AD, the Court takes an overview of the MOA. The MOA-AD identifies the Parties to it as the GRP and the MILF. Under the heading "Terms of Reference" (TOR), the MOA-AD includes not only four earlier agreements between the GRP and MILF, but also two agreements between the GRP and the MNLF: the 1976 Tripoli Agreement, and the Final Peace Agreement on the

Implementation of the 1976 Tripoli Agreement, signed on September 2, 1996 during the administration of President Fidel Ramos. The MOA-AD also identifies as TOR two local statutes - the organic act for the Autonomous Region in Muslim Mindanao (ARMM)25 and the Indigenous Peoples Rights Act (IPRA),26 and several international law instruments - the ILO Convention No. 169 Concerning Indigenous and Tribal Peoples in Independent Countries in relation to the UN Declaration on the Rights of the Indigenous Peoples, and the UN Charter, among others. The MOA-AD includes as a final TOR the generic category of "compact rights entrenchment emanating from the regime of dar-ulmua'hada (or territory under compact) and dar-ul-sulh (or territory under peace agreement) that partakes the nature of a treaty device." During the height of the Muslim Empire, early Muslim jurists tended to see the world through a simple dichotomy: there was the dar-ul-Islam (the Abode of Islam) and dar-ul-harb (the Abode of War). The first referred to those lands where Islamic laws held sway, while the second denoted those lands where Muslims were persecuted or where Muslim laws were outlawed or ineffective.27 This way of viewing the world, however, became more complex through the centuries as the Islamic world became part of the international community of nations. As Muslim States entered into treaties with their neighbors, even with distant States and inter-governmental organizations, the classical division of the world into dar-ul-Islam and dar-ul-harb eventually lost its meaning. New terms were drawn up to describe novel ways of perceiving non-Muslim territories. For instance, areas like dar-ulmua'hada (land of compact) and dar-ul-sulh (land of treaty) referred to countries which, though under a secular regime, maintained peaceful and cooperative relations with Muslim States, having been bound to each other by treaty or agreement. Dar-ul-aman (land of order), on the other hand, referred to countries which, though not bound by treaty with Muslim States, maintained freedom of religion for Muslims.28 It thus appears that the "compact rights entrenchment" emanating

from the regime of dar-ul-mua'hada and dar-ul-sulh simply refers to all other agreements between the MILF and the Philippine government - the Philippines being the land of compact and peace agreement - that partake of the nature of a treaty device, "treaty" being broadly defined as "any solemn agreement in writing that sets out understandings, obligations, and benefits for both parties which provides for a framework that elaborates the principles declared in the [MOA-AD]."29 The MOA-AD states that the Parties "HAVE AGREED AND ACKNOWLEDGED AS FOLLOWS," and starts with its main body. The main body of the MOA-AD is divided into four strands, namely, Concepts and Principles, Territory, Resources, and Governance. A. CONCEPTS AND PRINCIPLES This strand begins with the statement that it is "the birthright of all Moros and all Indigenous peoples of Mindanao to identify themselves and be accepted as Bangsamoros.'" It defines "Bangsamoro people" as the natives or original inhabitants of Mindanao and its adjacent islands including Palawan and the Sulu archipelago at the time of conquest or colonization, and their descendants whether mixed or of full blood, including their spouses.30 Thus, the concept of "Bangsamoro," as defined in this strand of the MOA-AD, includes not only "Moros" as traditionally understood even by Muslims,31 but all indigenous peoples of Mindanao and its adjacent islands. The MOA-AD adds that the freedom of choice of indigenous peoples shall be respected. What this freedom of choice consists in has not been specifically defined. The MOA-AD proceeds to refer to the "Bangsamoro homeland," the ownership of which is vested exclusively in the Bangsamoro people by virtue of their prior rights of occupation.32 Both parties to the MOAAD acknowledge that ancestral domain does not form part of the public domain.33 The Bangsamoro people are acknowledged as having the right to self-governance, which right is said to be rooted on ancestral

territoriality exercised originally under the suzerain authority of their sultanates and the Pat a Pangampong ku Ranaw. The sultanates were described as states or "karajaan/kadatuan" resembling a body politic endowed with all the elements of a nation-state in the modern sense.34 The MOA-AD thus grounds the right to self-governance of the Bangsamoro people on the past suzerain authority of the sultanates. As gathered, the territory defined as the Bangsamoro homeland was ruled by several sultanates and, specifically in the case of the Maranao, by the Pat a Pangampong ku Ranaw, a confederation of independent principalities (pangampong) each ruled by datus and sultans, none of whom was supreme over the others.35 The MOA-AD goes on to describe the Bangsamoro people as "the First Nation' with defined territory and with a system of government having entered into treaties of amity and commerce with foreign nations." The term "First Nation" is of Canadian origin referring to the indigenous peoples of that territory, particularly those known as Indians. In Canada, each of these indigenous peoples is equally entitled to be called "First Nation," hence, all of them are usually described collectively by the plural "First Nations."36 To that extent, the MOA-AD, by identifying the Bangsamoro people as "the First Nation" - suggesting its exclusive entitlement to that designation departs from the Canadian usage of the term. The MOA-AD then mentions for the first time the "Bangsamoro Juridical Entity" (BJE) to which it grants the authority and jurisdiction over the Ancestral Domain and Ancestral Lands of the Bangsamoro.37 B. TERRITORY The territory of the Bangsamoro homeland is described as the land mass as well as the maritime, terrestrial, fluvial and alluvial domains, including the aerial domain and the atmospheric space above it, embracing the Mindanao-Sulu-Palawan geographic region.38 More specifically, the core of the BJE is defined as the present geographic area of the ARMM - thus constituting the following areas:

Lanao del Sur, Maguindanao, Sulu, Tawi-Tawi, Basilan, and Marawi City. Significantly, this core also includes certain municipalities of Lanao del Norte that voted for inclusion in the ARMM in the 2001 plebiscite.39 Outside of this core, the BJE is to cover other provinces, cities, municipalities and barangays, which are grouped into two categories, Category A and Category B. Each of these areas is to be subjected to a plebiscite to be held on different dates, years apart from each other. Thus, Category A areas are to be subjected to a plebiscite not later than twelve (12) months following the signing of the MOA-AD.40 Category B areas, also called "Special Intervention Areas," on the other hand, are to be subjected to a plebiscite twenty-five (25) years from the signing of a separate agreement - the Comprehensive Compact.41 The Parties to the MOA-AD stipulate that the BJE shall have jurisdiction over all natural resources within its "internal waters," defined as extending fifteen (15) kilometers from the coastline of the BJE area;42 that the BJE shall also have "territorial waters," which shall stretch beyond the BJE internal waters up to the baselines of the Republic of the Philippines (RP) south east and south west of mainland Mindanao; and that within these territorial waters, the BJE and the "Central Government" (used interchangeably with RP) shall exercise joint jurisdiction, authority and management over all natural resources.43 Notably, the jurisdiction over the internal waters is not similarly described as "joint." The MOA-AD further provides for the sharing of minerals on the territorial waters between the Central Government and the BJE, in favor of the latter, through production sharing and economic cooperation agreement.44 The activities which the Parties are allowed to conduct on the territorial waters are enumerated, among which are the exploration and utilization of natural resources, regulation of shipping and fishing activities, and the enforcement of police and safety measures.45 There is no similar provision on the sharing of minerals and allowed activities with respect to the internal waters of the BJE. C. RESOURCES

The MOA-AD states that the BJE is free to enter into any economic cooperation and trade relations with foreign countries and shall have the option to establish trade missions in those countries. Such relationships and understandings, however, are not to include aggression against the GRP. The BJE may also enter into environmental cooperation agreements.46 The external defense of the BJE is to remain the duty and obligation of the Central Government. The Central Government is also bound to "take necessary steps to ensure the BJE's participation in international meetings and events" like those of the ASEAN and the specialized agencies of the UN. The BJE is to be entitled to participate in Philippine official missions and delegations for the negotiation of border agreements or protocols for environmental protection and equitable sharing of incomes and revenues involving the bodies of water adjacent to or between the islands forming part of the ancestral domain.47 With regard to the right of exploring for, producing, and obtaining all potential sources of energy, petroleum, fossil fuel, mineral oil and natural gas, the jurisdiction and control thereon is to be vested in the BJE "as the party having control within its territorial jurisdiction." This right carries the proviso that, "in times of national emergency, when public interest so requires," the Central Government may, for a fixed period and under reasonable terms as may be agreed upon by both Parties, assume or direct the operation of such resources.48 The sharing between the Central Government and the BJE of total production pertaining to natural resources is to be 75:25 in favor of the BJE.49 The MOA-AD provides that legitimate grievances of the Bangsamoro people arising from any unjust dispossession of their territorial and proprietary rights, customary land tenures, or their marginalization shall be acknowledged. Whenever restoration is no longer possible, reparation is to be in such form as mutually determined by the Parties.50 The BJE may modify or cancel the forest concessions, timber licenses, contracts or agreements, mining concessions, Mineral

Production and Sharing Agreements (MPSA), Industrial Forest Management Agreements (IFMA), and other land tenure instruments granted by the Philippine Government, including those issued by the present ARMM.51 D. GOVERNANCE The MOA-AD binds the Parties to invite a multinational third-party to observe and monitor the implementation of the Comprehensive Compact. This compact is to embody the "details for the effective enforcement" and "the mechanisms and modalities for the actual implementation" of the MOA-AD. The MOA-AD explicitly provides that the participation of the third party shall not in any way affect the status of the relationship between the Central Government and the BJE.52 The "associative" relationship between the Central Government and the BJE The MOA-AD describes the relationship of the Central Government and the BJE as "associative," characterized by shared authority and responsibility. And it states that the structure of governance is to be based on executive, legislative, judicial, and administrative institutions with defined powers and functions in the Comprehensive Compact. The MOA-AD provides that its provisions requiring "amendments to the existing legal framework" shall take effect upon signing of the Comprehensive Compact and upon effecting the aforesaid amendments, with due regard to the non-derogation of prior agreements and within the stipulated timeframe to be contained in the Comprehensive Compact. As will be discussed later, much of the present controversy hangs on the legality of this provision. The BJE is granted the power to build, develop and maintain its own institutions inclusive of civil service, electoral, financial and banking, education, legislation, legal, economic, police and internal security force, judicial system and correctional institutions, the details of which shall be discussed in the negotiation of the comprehensive compact. As stated early on, the MOA-AD was set to be signed on August 5, 2008 by Rodolfo Garcia and Mohagher Iqbal, Chairpersons of the

Peace Negotiating Panels of the GRP and the MILF, respectively. Notably, the penultimate paragraph of the MOA-AD identifies the signatories as "the representatives of the Parties," meaning the GRP and MILF themselves, and not merely of the negotiating panels.53 In addition, the signature page of the MOA-AD states that it is "WITNESSED BY" Datuk Othman Bin Abd Razak, Special Adviser to the Prime Minister of Malaysia, "ENDORSED BY" Ambassador Sayed Elmasry, Adviser to Organization of the Islamic Conference (OIC) Secretary General and Special Envoy for Peace Process in Southern Philippines, and SIGNED "IN THE PRESENCE OF" Dr. Albert G. Romulo, Secretary of Foreign Affairs of RP and Dato' Seri Utama Dr. Rais Bin Yatim, Minister of Foreign Affairs, Malaysia, all of whom were scheduled to sign the Agreement last August 5, 2008. Annexed to the MOA-AD are two documents containing the respective lists cum maps of the provinces, municipalities, and barangays under Categories A and B earlier mentioned in the discussion on the strand on TERRITORY. IV. PROCEDURAL ISSUES A. RIPENESS The power of judicial review is limited to actual cases or controversies.54 Courts decline to issue advisory opinions or to resolve hypothetical or feigned problems, or mere academic questions.55 The limitation of the power of judicial review to actual cases and controversies defines the role assigned to the judiciary in a tripartite allocation of power, to assure that the courts will not intrude into areas committed to the other branches of government.56 An actual case or controversy involves a conflict of legal rights, an assertion of opposite legal claims, susceptible of judicial resolution as distinguished from a hypothetical or abstract difference or dispute. There must be a contrariety of legal rights that can be interpreted and enforced on the basis of existing law and jurisprudence.57 The Court can decide the constitutionality of an act or treaty only when a proper case between opposing parties is submitted for judicial determination.58 Related to the requirement of an actual case or controversy is the

requirement of ripeness. A question is ripe for adjudication when the act being challenged has had a direct adverse effect on the individual challenging it.59 For a case to be considered ripe for adjudication, it is a prerequisite that something had then been accomplished or performed by either branch before a court may come into the picture,60 and the petitioner must allege the existence of an immediate or threatened injury to itself as a result of the challenged action.61 He must show that he has sustained or is immediately in danger of sustaining some direct injury as a result of the act complained of.62 The Solicitor General argues that there is no justiciable controversy that is ripe for judicial review in the present petitions, reasoning that The unsigned MOA-AD is simply a list of consensus points subject to further negotiations and legislative enactments as well as constitutional processes aimed at attaining a final peaceful agreement. Simply put, the MOA-AD remains to be a proposal that does not automatically create legally demandable rights and obligations until the list of operative acts required have been duly complied with. x x x xxxx In the cases at bar, it is respectfully submitted that this Honorable Court has no authority to pass upon issues based on hypothetical or feigned constitutional problems or interests with no concrete bases. Considering the preliminary character of the MOA-AD, there are no concrete acts that could possibly violate petitioners' and intervenors' rights since the acts complained of are mere contemplated steps toward the formulation of a final peace agreement. Plainly, petitioners and intervenors' perceived injury, if at all, is merely imaginary and illusory apart from being unfounded and based on mere conjectures. (Underscoring supplied) The Solicitor General cites63 the following provisions of the MOA-AD: TERRITORY xxxx

2. Toward this end, the Parties enter into the following stipulations: xxxx d. Without derogating from the requirements of prior agreements, the Government stipulates to conduct and deliver, using all possible legal measures, within twelve (12) months following the signing of the MOA-AD, a plebiscite covering the areas as enumerated in the list and depicted in the map as Category A attached herein (the "Annex"). The Annex constitutes an integral part of this framework agreement. Toward this end, the Parties shall endeavor to complete the negotiations and resolve all outstanding issues on the Comprehensive Compact within fifteen (15) months from the signing of the MOA-AD. xxxx GOVERNANCE xxxx 7. The Parties agree that mechanisms and modalities for the actual implementation of this MOA-AD shall be spelt out in the Comprehensive Compact to mutually take such steps to enable it to occur effectively. Any provisions of the MOA-AD requiring amendments to the existing legal framework shall come into force upon the signing of a Comprehensive Compact and upon effecting the necessary changes to the legal framework with due regard to non-derogation of prior agreements and within the stipulated timeframe to be contained in the Comprehensive Compact.64 (Underscoring supplied) The Solicitor General's arguments fail to persuade. Concrete acts under the MOA-AD are not necessary to render the present controversy ripe. In Pimentel, Jr. v. Aguirre,65 this Court held: x x x [B]y the mere enactment of the questioned law or the approval of the challenged action, the dispute is said to have ripened into a judicial controversy even without any other overt act. Indeed, even a

singular violation of the Constitution and/or the law is enough to awaken judicial duty. xxxx By the same token, when an act of the President, who in our constitutional scheme is a coequal of Congress, is seriously alleged to have infringed the Constitution and the laws x x x settling the dispute becomes the duty and the responsibility of the courts.66 In Santa Fe Independent School District v. Doe,67 the United States Supreme Court held that the challenge to the constitutionality of the school's policy allowing student-led prayers and speeches before games was ripe for adjudication, even if no public prayer had yet been led under the policy, because the policy was being challenged as unconstitutional on its face.68 That the law or act in question is not yet effective does not negate ripeness. For example, in New York v. United States,69 decided in 1992, the United States Supreme Court held that the action by the State of New York challenging the provisions of the Low-Level Radioactive Waste Policy Act was ripe for adjudication even if the questioned provision was not to take effect until January 1, 1996, because the parties agreed that New York had to take immediate action to avoid the provision's consequences.70 The present petitions pray for Certiorari,71 Prohibition, and Mandamus. Certiorari and Prohibition are remedies granted by law when any tribunal, board or officer has acted, in the case of certiorari, or is proceeding, in the case of prohibition, without or in excess of its jurisdiction or with grave abuse of discretion amounting to lack or excess of jurisdiction.72 Mandamus is a remedy granted by law when any tribunal, corporation, board, officer or person unlawfully neglects the performance of an act which the law specifically enjoins as a duty resulting from an office, trust, or station, or unlawfully excludes another from the use or enjoyment of a right or office to which such other is entitled.73 Certiorari, Mandamus and Prohibition are appropriate remedies to raise constitutional issues and to review and/or prohibit/nullify, when proper, acts of legislative and executive officials.74

The authority of the GRP Negotiating Panel is defined by Executive Order No. 3 (E.O. No. 3), issued on February 28, 2001.75 The said executive order requires that "[t]he government's policy framework for peace, including the systematic approach and the administrative structure for carrying out the comprehensive peace process x x x be governed by this Executive Order."76 The present petitions allege that respondents GRP Panel and PAPP Esperon drafted the terms of the MOA-AD without consulting the local government units or communities affected, nor informing them of the proceedings. As will be discussed in greater detail later, such omission, by itself, constitutes a departure by respondents from their mandate under E.O. No. 3. Furthermore, the petitions allege that the provisions of the MOA-AD violate the Constitution. The MOA-AD provides that "any provisions of the MOA-AD requiring amendments to the existing legal framework shall come into force upon the signing of a Comprehensive Compact and upon effecting the necessary changes to the legal framework," implying an amendment of the Constitution to accommodate the MOA-AD. This stipulation, in effect, guaranteed to the MILF the amendment of the Constitution. Such act constitutes another violation of its authority. Again, these points will be discussed in more detail later. As the petitions allege acts or omissions on the part of respondent that exceed their authority, by violating their duties under E.O. No. 3 and the provisions of the Constitution and statutes, the petitions make a prima facie case for Certiorari, Prohibition, and Mandamus, and an actual case or controversy ripe for adjudication exists. When an act of a branch of government is seriously alleged to have infringed the Constitution, it becomes not only the right but in fact the duty of the judiciary to settle the dispute.77 B. LOCUS STANDI For a party to have locus standi, one must allege "such a personal stake in the outcome of the controversy as to assure that concrete adverseness which sharpens the presentation of issues upon which the court so largely depends for illumination of difficult constitutional

questions."78 Because constitutional cases are often public actions in which the relief sought is likely to affect other persons, a preliminary question frequently arises as to this interest in the constitutional question raised.79 When suing as a citizen, the person complaining must allege that he has been or is about to be denied some right or privilege to which he is lawfully entitled or that he is about to be subjected to some burdens or penalties by reason of the statute or act complained of.80 When the issue concerns a public right, it is sufficient that the petitioner is a citizen and has an interest in the execution of the laws.81 For a taxpayer, one is allowed to sue where there is an assertion that public funds are illegally disbursed or deflected to an illegal purpose, or that there is a wastage of public funds through the enforcement of an invalid or unconstitutional law.82 The Court retains discretion whether or not to allow a taxpayer's suit.83 In the case of a legislator or member of Congress, an act of the Executive that injures the institution of Congress causes a derivative but nonetheless substantial injury that can be questioned by legislators. A member of the House of Representatives has standing to maintain inviolate the prerogatives, powers and privileges vested by the Constitution in his office.84 An organization may be granted standing to assert the rights of its members,85 but the mere invocation by the Integrated Bar of the Philippines or any member of the legal profession of the duty to preserve the rule of law does not suffice to clothe it with standing.86 As regards a local government unit (LGU), it can seek relief in order to protect or vindicate an interest of its own, and of the other LGUs.87 Intervenors, meanwhile, may be given legal standing upon showing of facts that satisfy the requirements of the law authorizing intervention,88 such as a legal interest in the matter in litigation, or in the success of either of the parties. In any case, the Court has discretion to relax the procedural

technicality on locus standi, given the liberal attitude it has exercised, highlighted in the case of David v. Macapagal-Arroyo,89 where technicalities of procedure were brushed aside, the constitutional issues raised being of paramount public interest or of transcendental importance deserving the attention of the Court in view of their seriousness, novelty and weight as precedents.90 The Court's forbearing stance on locus standi on issues involving constitutional issues has for its purpose the protection of fundamental rights. In not a few cases, the Court, in keeping with its duty under the Constitution to determine whether the other branches of government have kept themselves within the limits of the Constitution and the laws and have not abused the discretion given them, has brushed aside technical rules of procedure.91 In the petitions at bar, petitioners Province of North Cotabato (G.R. No. 183591) Province of Zamboanga del Norte (G.R. No. 183951), City of Iligan (G.R. No. 183893) and City of Zamboanga (G.R. No. 183752) and petitioners-in-intervention Province of Sultan Kudarat, City of Isabela and Municipality of Linamon have locus standi in view of the direct and substantial injury that they, as LGUs, would suffer as their territories, whether in whole or in part, are to be included in the intended domain of the BJE. These petitioners allege that they did not vote for their inclusion in the ARMM which would be expanded to form the BJE territory. Petitioners' legal standing is thus beyond doubt. In G.R. No. 183962, petitioners Ernesto Maceda, Jejomar Binay and Aquilino Pimentel III would have no standing as citizens and taxpayers for their failure to specify that they would be denied some right or privilege or there would be wastage of public funds. The fact that they are a former Senator, an incumbent mayor of Makati City, and a resident of Cagayan de Oro, respectively, is of no consequence. Considering their invocation of the transcendental importance of the issues at hand, however, the Court grants them standing. Intervenors Franklin Drilon and Adel Tamano, in alleging their standing as taxpayers, assert that government funds would be expended for the conduct of an illegal and unconstitutional plebiscite

to delineate the BJE territory. On that score alone, they can be given legal standing. Their allegation that the issues involved in these petitions are of "undeniable transcendental importance" clothes them with added basis for their personality to intervene in these petitions. With regard to Senator Manuel Roxas, his standing is premised on his being a member of the Senate and a citizen to enforce compliance by respondents of the public's constitutional right to be informed of the MOA-AD, as well as on a genuine legal interest in the matter in litigation, or in the success or failure of either of the parties. He thus possesses the requisite standing as an intervenor. With respect to Intervenors Ruy Elias Lopez, as a former congressman of the 3rd district of Davao City, a taxpayer and a member of the Bagobo tribe; Carlo B. Gomez, et al., as members of the IBP Palawan chapter, citizens and taxpayers; Marino Ridao, as taxpayer, resident and member of the Sangguniang Panlungsod of Cotabato City; and Kisin Buxani, as taxpayer, they failed to allege any proper legal interest in the present petitions. Just the same, the Court exercises its discretion to relax the procedural technicality on locus standi given the paramount public interest in the issues at hand. Intervening respondents Muslim Multi-Sectoral Movement for Peace and Development, an advocacy group for justice and the attainment of peace and prosperity in Muslim Mindanao; and Muslim Legal Assistance Foundation Inc., a non-government organization of Muslim lawyers, allege that they stand to be benefited or prejudiced, as the case may be, in the resolution of the petitions concerning the MOA-AD, and prays for the denial of the petitions on the grounds therein stated. Such legal interest suffices to clothe them with standing. B. MOOTNESS Respondents insist that the present petitions have been rendered moot with the satisfaction of all the reliefs prayed for by petitioners and the subsequent pronouncement of the Executive Secretary that "[n]o matter what the Supreme Court ultimately decides[,] the government will not sign the MOA."92 In lending credence to this policy decision, the Solicitor General

points out that the President had already disbanded the GRP Peace Panel.93 In David v. Macapagal-Arroyo,94 this Court held that the "moot and academic" principle not being a magical formula that automatically dissuades courts in resolving a case, it will decide cases, otherwise moot and academic, if it finds that (a) there is a grave violation of the Constitution;95 (b) the situation is of exceptional character and paramount public interest is involved;96 (c) the constitutional issue raised requires formulation of controlling principles to guide the bench, the bar, and the public;97 and (d) the case is capable of repetition yet evading review.98 Another exclusionary circumstance that may be considered is where there is a voluntary cessation of the activity complained of by the defendant or doer. Thus, once a suit is filed and the doer voluntarily ceases the challenged conduct, it does not automatically deprive the tribunal of power to hear and determine the case and does not render the case moot especially when the plaintiff seeks damages or prays for injunctive relief against the possible recurrence of the violation.99 The present petitions fall squarely into these exceptions to thus thrust them into the domain of judicial review. The grounds cited above in David are just as applicable in the present cases as they were, not only in David, but also in Province of Batangas v. Romulo100 and Manalo v. Calderon101 where the Court similarly decided them on the merits, supervening events that would ordinarily have rendered the same moot notwithstanding. Petitions not mooted Contrary then to the asseverations of respondents, the non-signing of the MOA-AD and the eventual dissolution of the GRP Peace Panel did not moot the present petitions. It bears emphasis that the signing of the MOA-AD did not push through due to the Court's issuance of a Temporary Restraining Order. Contrary too to respondents' position, the MOA-AD cannot be considered a mere "list of consensus points," especially given its nomenclature, the need to have it signed or initialed by all the parties concerned on August 5, 2008, and the far-reaching

Constitutional implications of these "consensus points," foremost of which is the creation of the BJE. In fact, as what will, in the main, be discussed, there is a commitment on the part of respondents to amend and effect necessary changes to the existing legal framework for certain provisions of the MOA-AD to take effect. Consequently, the present petitions are not confined to the terms and provisions of the MOA-AD, but to other on-going and future negotiations and agreements necessary for its realization. The petitions have not, therefore, been rendered moot and academic simply by the public disclosure of the MOA-AD,102 the manifestation that it will not be signed as well as the disbanding of the GRP Panel not withstanding. Petitions are imbued with paramount public interest There is no gainsaying that the petitions are imbued with paramount public interest, involving a significant part of the country's territory and the wide-ranging political modifications of affected LGUs. The assertion that the MOA-AD is subject to further legal enactments including possible Constitutional amendments more than ever provides impetus for the Court to formulate controlling principles to guide the bench, the bar, the public and, in this case, the government and its negotiating entity. Respondents cite Suplico v. NEDA, et al.103 where the Court did not "pontificat[e] on issues which no longer legitimately constitute an actual case or controversy [as this] will do more harm than good to the nation as a whole." The present petitions must be differentiated from Suplico. Primarily, in Suplico, what was assailed and eventually cancelled was a standalone government procurement contract for a national broadband network involving a one-time contractual relation between two parties-the government and a private foreign corporation. As the issues therein involved specific government procurement policies and standard principles on contracts, the majority opinion in Suplico found nothing exceptional therein, the factual circumstances being peculiar only to the transactions and parties involved in the controversy. The MOA-AD is part of a series of agreements

In the present controversy, the MOA-AD is a significant part of a series of agreements necessary to carry out the Tripoli Agreement 2001. The MOA-AD which dwells on the Ancestral Domain Aspect of said Tripoli Agreement is the third such component to be undertaken following the implementation of the Security Aspect in August 2001 and the Humanitarian, Rehabilitation and Development Aspect in May 2002. Accordingly, even if the Executive Secretary, in his Memorandum of August 28, 2008 to the Solicitor General, has stated that "no matter what the Supreme Court ultimately decides[,] the government will not sign the MOA[-AD]," mootness will not set in in light of the terms of the Tripoli Agreement 2001. Need to formulate principles-guidelines Surely, the present MOA-AD can be renegotiated or another one will be drawn up to carry out the Ancestral Domain Aspect of the Tripoli Agreement 2001, in another or in any form, which could contain similar or significantly drastic provisions. While the Court notes the word of the Executive Secretary that the government "is committed to securing an agreement that is both constitutional and equitable because that is the only way that long-lasting peace can be assured," it is minded to render a decision on the merits in the present petitions to formulate controlling principles to guide the bench, the bar, the public and, most especially, the government in negotiating with the MILF regarding Ancestral Domain. Respondents invite the Court's attention to the separate opinion of then Chief Justice Artemio Panganiban in Sanlakas v. Reyes104 in which he stated that the doctrine of "capable of repetition yet evading review" can override mootness, "provided the party raising it in a proper case has been and/or continue to be prejudiced or damaged as a direct result of their issuance." They contend that the Court must have jurisdiction over the subject matter for the doctrine to be invoked. The present petitions all contain prayers for Prohibition over which this Court exercises original jurisdiction. While G.R. No. 183893 (City of Iligan v. GRP) is a petition for Injunction and Declaratory Relief, the

Court will treat it as one for Prohibition as it has far reaching implications and raises questions that need to be resolved.105 At all events, the Court has jurisdiction over most if not the rest of the petitions. Indeed, the present petitions afford a proper venue for the Court to again apply the doctrine immediately referred to as what it had done in a number of landmark cases.106 There is a reasonable expectation that petitioners, particularly the Provinces of North Cotabato, Zamboanga del Norte and Sultan Kudarat, the Cities of Zamboanga, Iligan and Isabela, and the Municipality of Linamon, will again be subjected to the same problem in the future as respondents' actions are capable of repetition, in another or any form. It is with respect to the prayers for Mandamus that the petitions have become moot, respondents having, by Compliance of August 7, 2008, provided this Court and petitioners with official copies of the final draft of the MOA-AD and its annexes. Too, intervenors have been furnished, or have procured for themselves, copies of the MOAAD. V. SUBSTANTIVE ISSUES As culled from the Petitions and Petitions-in-Intervention, there are basically two SUBSTANTIVE issues to be resolved, one relating to the manner in which the MOA-AD was negotiated and finalized, the other relating to its provisions, viz: 1. Did respondents violate constitutional and statutory provisions on public consultation and the right to information when they negotiated and later initialed the MOA-AD? 2. Do the contents of the MOA-AD violate the Constitution and the laws? ON THE FIRST SUBSTANTIVE ISSUE Petitioners invoke their constitutional right to information on matters of public concern, as provided in Section 7, Article III on the Bill of Rights:

Sec. 7. The right of the people to information on matters of public concern shall be recognized. Access to official records, and to documents, and papers pertaining to official acts, transactions, or decisions, as well as to government research data used as basis for policy development, shall be afforded the citizen, subject to such limitations as may be provided by law.107 As early as 1948, in Subido v. Ozaeta,108 the Court has recognized the statutory right to examine and inspect public records, a right which was eventually accorded constitutional status. The right of access to public documents, as enshrined in both the 1973 Constitution and the 1987 Constitution, has been recognized as a self-executory constitutional right.109 In the 1976 case of Baldoza v. Hon. Judge Dimaano,110 the Court ruled that access to public records is predicated on the right of the people to acquire information on matters of public concern since, undoubtedly, in a democracy, the pubic has a legitimate interest in matters of social and political significance. x x x The incorporation of this right in the Constitution is a recognition of the fundamental role of free exchange of information in a democracy. There can be no realistic perception by the public of the nation's problems, nor a meaningful democratic decision-making if they are denied access to information of general interest. Information is needed to enable the members of society to cope with the exigencies of the times. As has been aptly observed: "Maintaining the flow of such information depends on protection for both its acquisition and its dissemination since, if either process is interrupted, the flow inevitably ceases." x x x111 In the same way that free discussion enables members of society to cope with the exigencies of their time, access to information of general interest aids the people in democratic decision-making by giving them a better perspective of the vital issues confronting the nation112 so that they may be able to criticize and participate in the affairs of the government in a responsible, reasonable and effective manner. It is by ensuring an unfettered and uninhibited exchange of ideas among a well-informed public that a government remains

responsive to the changes desired by the people.113 The MOA-AD is a matter of public concern That the subject of the information sought in the present cases is a matter of public concern114 faces no serious challenge. In fact, respondents admit that the MOA-AD is indeed of public concern.115 In previous cases, the Court found that the regularity of real estate transactions entered in the Register of Deeds,116 the need for adequate notice to the public of the various laws,117 the civil service eligibility of a public employee,118 the proper management of GSIS funds allegedly used to grant loans to public officials,119 the recovery of the Marcoses' alleged ill-gotten wealth,120 and the identity of partylist nominees,121 among others, are matters of public concern. Undoubtedly, the MOA-AD subject of the present cases is of public concern, involving as it does the sovereignty and territorial integrity of the State, which directly affects the lives of the public at large. Matters of public concern covered by the right to information include steps and negotiations leading to the consummation of the contract. In not distinguishing as to the executory nature or commercial character of agreements, the Court has categorically ruled: x x x [T]he right to information "contemplates inclusion of negotiations leading to the consummation of the transaction." Certainly, a consummated contract is not a requirement for the exercise of the right to information. Otherwise, the people can never exercise the right if no contract is consummated, and if one is consummated, it may be too late for the public to expose its defects. Requiring a consummated contract will keep the public in the dark until the contract, which may be grossly disadvantageous to the government or even illegal, becomes fait accompli. This negates the State policy of full transparency on matters of public concern, a situation which the framers of the Constitution could not have intended. Such a requirement will prevent the citizenry from participating in the public discussion of any proposed contract, effectively truncating a basic right enshrined in the Bill of Rights. We can allow neither an emasculation of a constitutional right, nor a

retreat by the State of its avowed "policy of full disclosure of all its transactions involving public interest."122 (Emphasis and italics in the original) Intended as a "splendid symmetry"123 to the right to information under the Bill of Rights is the policy of public disclosure under Section 28, Article II of the Constitution reading: Sec. 28. Subject to reasonable conditions prescribed by law, the State adopts and implements a policy of full public disclosure of all its transactions involving public interest.124 The policy of full public disclosure enunciated in above-quoted Section 28 complements the right of access to information on matters of public concern found in the Bill of Rights. The right to information guarantees the right of the people to demand information, while Section 28 recognizes the duty of officialdom to give information even if nobody demands.125 The policy of public disclosure establishes a concrete ethical principle for the conduct of public affairs in a genuinely open democracy, with the people's right to know as the centerpiece. It is a mandate of the State to be accountable by following such policy.126 These provisions are vital to the exercise of the freedom of expression and essential to hold public officials at all times accountable to the people.127 Whether Section 28 is self-executory, the records of the deliberations of the Constitutional Commission so disclose: MR. SUAREZ. And since this is not self-executory, this policy will not be enunciated or will not be in force and effect until after Congress shall have provided it. MR. OPLE. I expect it to influence the climate of public ethics immediately but, of course, the implementing law will have to be enacted by Congress, Mr. Presiding Officer.128 The following discourse, after Commissioner Hilario Davide, Jr., sought clarification on the issue, is enlightening. MR. DAVIDE. I would like to get some clarifications on this. Mr.

Presiding Officer, did I get the Gentleman correctly as having said that this is not a self-executing provision? It would require a legislation by Congress to implement? MR. OPLE. Yes. Originally, it was going to be self-executing, but I accepted an amendment from Commissioner Regalado, so that the safeguards on national interest are modified by the clause "as may be provided by law" MR. DAVIDE. But as worded, does it not mean that this will immediately take effect and Congress may provide for reasonable safeguards on the sole ground national interest? MR. OPLE. Yes. I think so, Mr. Presiding Officer, I said earlier that it should immediately influence the climate of the conduct of public affairs but, of course, Congress here may no longer pass a law revoking it, or if this is approved, revoking this principle, which is inconsistent with this policy.129 (Emphasis supplied) Indubitably, the effectivity of the policy of public disclosure need not await the passing of a statute. As Congress cannot revoke this principle, it is merely directed to provide for "reasonable safeguards." The complete and effective exercise of the right to information necessitates that its complementary provision on public disclosure derive the same self-executory nature. Since both provisions go hand-in-hand, it is absurd to say that the broader130 right to information on matters of public concern is already enforceable while the correlative duty of the State to disclose its transactions involving public interest is not enforceable until there is an enabling law. Respondents cannot thus point to the absence of an implementing legislation as an excuse in not effecting such policy. An essential element of these freedoms is to keep open a continuing dialogue or process of communication between the government and the people. It is in the interest of the State that the channels for free political discussion be maintained to the end that the government may perceive and be responsive to the people's will.131 Envisioned to be corollary to the twin rights to information and disclosure is the design for feedback mechanisms. MS. ROSARIO BRAID. Yes. And lastly, Mr. Presiding Officer, will the

people be able to participate? Will the government provide feedback mechanisms so that the people can participate and can react where the existing media facilities are not able to provide full feedback mechanisms to the government? I suppose this will be part of the government implementing operational mechanisms. MR. OPLE. Yes. I think through their elected representatives and that is how these courses take place. There is a message and a feedback, both ways. xxxx MS. ROSARIO BRAID. Mr. Presiding Officer, may I just make one last sentence? I think when we talk about the feedback network, we are not talking about public officials but also network of private business o[r] community-based organizations that will be reacting. As a matter of fact, we will put more credence or credibility on the private network of volunteers and voluntary community-based organizations. So I do not think we are afraid that there will be another OMA in the making.132 (Emphasis supplied) The imperative of a public consultation, as a species of the right to information, is evident in the "marching orders" to respondents. The mechanics for the duty to disclose information and to conduct public consultation regarding the peace agenda and process is manifestly provided by E.O. No. 3.133 The preambulatory clause of E.O. No. 3 declares that there is a need to further enhance the contribution of civil society to the comprehensive peace process by institutionalizing the people's participation. One of the three underlying principles of the comprehensive peace process is that it "should be community-based, reflecting the sentiments, values and principles important to all Filipinos" and "shall be defined not by the government alone, nor by the different contending groups only, but by all Filipinos as one community."134 Included as a component of the comprehensive peace process is consensus-building and empowerment for peace, which includes "continuing consultations on both national and local levels to build

consensus for a peace agenda and process, and the mobilization and facilitation of people's participation in the peace process."135 Clearly, E.O. No. 3 contemplates not just the conduct of a plebiscite to effectuate "continuing" consultations, contrary to respondents' position that plebiscite is "more than sufficient consultation."136 Further, E.O. No. 3 enumerates the functions and responsibilities of the PAPP, one of which is to "[c]onduct regular dialogues with the National Peace Forum (NPF) and other peace partners to seek relevant information, comments, recommendations as well as to render appropriate and timely reports on the progress of the comprehensive peace process."137 E.O. No. 3 mandates the establishment of the NPF to be "the principal forum for the PAPP to consult with and seek advi[c]e from the peace advocates, peace partners and concerned sectors of society on both national and local levels, on the implementation of the comprehensive peace process, as well as for government[-]civil society dialogue and consensusbuilding on peace agenda and initiatives."138 In fine, E.O. No. 3 establishes petitioners' right to be consulted on the peace agenda, as a corollary to the constitutional right to information and disclosure. PAPP Esperon committed grave abuse of discretion The PAPP committed grave abuse of discretion when he failed to carry out the pertinent consultation. The furtive process by which the MOA-AD was designed and crafted runs contrary to and in excess of the legal authority, and amounts to a whimsical, capricious, oppressive, arbitrary and despotic exercise thereof. The Court may not, of course, require the PAPP to conduct the consultation in a particular way or manner. It may, however, require him to comply with the law and discharge the functions within the authority granted by the President.139 Petitioners are not claiming a seat at the negotiating table, contrary to respondents' retort in justifying the denial of petitioners' right to be consulted. Respondents' stance manifests the manner by which they

treat the salient provisions of E.O. No. 3 on people's participation. Such disregard of the express mandate of the President is not much different from superficial conduct toward token provisos that border on classic lip service.140 It illustrates a gross evasion of positive duty and a virtual refusal to perform the duty enjoined. As for respondents' invocation of the doctrine of executive privilege, it is not tenable under the premises. The argument defies sound reason when contrasted with E.O. No. 3's explicit provisions on continuing consultation and dialogue on both national and local levels. The executive order even recognizes the exercise of the public's right even before the GRP makes its official recommendations or before the government proffers its definite propositions.141 It bear emphasis that E.O. No. 3 seeks to elicit relevant advice, information, comments and recommendations from the people through dialogue. AT ALL EVENTS, respondents effectively waived the defense of executive privilege in view of their unqualified disclosure of the official copies of the final draft of the MOA-AD. By unconditionally complying with the Court's August 4, 2008 Resolution, without a prayer for the document's disclosure in camera, or without a manifestation that it was complying therewith ex abundante ad cautelam. Petitioners' assertion that the Local Government Code (LGC) of 1991 declares it a State policy to "require all national agencies and offices to conduct periodic consultations with appropriate local government units, non-governmental and people's organizations, and other concerned sectors of the community before any project or program is implemented in their respective jurisdictions"142 is well-taken. The LGC chapter on intergovernmental relations puts flesh into this avowed policy: Prior Consultations Required. - No project or program shall be implemented by government authorities unless the consultations mentioned in Sections 2 (c) and 26 hereof are complied with, and prior approval of the sanggunian concerned is obtained: Provided, That occupants in areas where such projects are to be implemented shall not be evicted unless appropriate relocation sites have been provided, in accordance with the provisions of the Constitution.143 (Italics and underscoring supplied)

In Lina, Jr. v. Hon. Pao,144 the Court held that the above-stated policy and above-quoted provision of the LGU apply only to national programs or projects which are to be implemented in a particular local community. Among the programs and projects covered are those that are critical to the environment and human ecology including those that may call for the eviction of a particular group of people residing in the locality where these will be implemented.145 The MOA-AD is one peculiar program that unequivocally and unilaterally vests ownership of a vast territory to the Bangsamoro people,146 which could pervasively and drastically result to the diaspora or displacement of a great number of inhabitants from their total environment. With respect to the indigenous cultural communities/indigenous peoples (ICCs/IPs), whose interests are represented herein by petitioner Lopez and are adversely affected by the MOA-AD, the ICCs/IPs have, under the IPRA, the right to participate fully at all levels of decision-making in matters which may affect their rights, lives and destinies.147 The MOA-AD, an instrument recognizing ancestral domain, failed to justify its non-compliance with the clearcut mechanisms ordained in said Act,148 which entails, among other things, the observance of the free and prior informed consent of the ICCs/IPs. Notably, the IPRA does not grant the Executive Department or any government agency the power to delineate and recognize an ancestral domain claim by mere agreement or compromise. The recognition of the ancestral domain is the raison d'etre of the MOAAD, without which all other stipulations or "consensus points" necessarily must fail. In proceeding to make a sweeping declaration on ancestral domain, without complying with the IPRA, which is cited as one of the TOR of the MOA-AD, respondents clearly transcended the boundaries of their authority. As it seems, even the heart of the MOA-AD is still subject to necessary changes to the legal framework. While paragraph 7 on Governance suspends the effectivity of all provisions requiring changes to the legal framework, such clause is itself invalid, as will be discussed in the following section. Indeed, ours is an open society, with all the acts of the government

subject to public scrutiny and available always to public cognizance. This has to be so if the country is to remain democratic, with sovereignty residing in the people and all government authority emanating from them.149 ON THE SECOND SUBSTANTIVE ISSUE With regard to the provisions of the MOA-AD, there can be no question that they cannot all be accommodated under the present Constitution and laws. Respondents have admitted as much in the oral arguments before this Court, and the MOA-AD itself recognizes the need to amend the existing legal framework to render effective at least some of its provisions. Respondents, nonetheless, counter that the MOA-AD is free of any legal infirmity because any provisions therein which are inconsistent with the present legal framework will not be effective until the necessary changes to that framework are made. The validity of this argument will be considered later. For now, the Court shall pass upon how The MOA-AD is inconsistent with the Constitution and laws as presently worded. In general, the objections against the MOA-AD center on the extent of the powers conceded therein to the BJE. Petitioners assert that the powers granted to the BJE exceed those granted to any local government under present laws, and even go beyond those of the present ARMM. Before assessing some of the specific powers that would have been vested in the BJE, however, it would be useful to turn first to a general idea that serves as a unifying link to the different provisions of the MOA-AD, namely, the international law concept of association. Significantly, the MOA-AD explicitly alludes to this concept, indicating that the Parties actually framed its provisions with it in mind. Association is referred to in paragraph 3 on TERRITORY, paragraph 11 on RESOURCES, and paragraph 4 on GOVERNANCE. It is in the last mentioned provision, however, that the MOA-AD most clearly uses it to describe the envisioned relationship between the BJE and the Central Government. 4. The relationship between the Central Government and the

Bangsamoro juridical entity shall be associative characterized by shared authority and responsibility with a structure of governance based on executive, legislative, judicial and administrative institutions with defined powers and functions in the comprehensive compact. A period of transition shall be established in a comprehensive peace compact specifying the relationship between the Central Government and the BJE. (Emphasis and underscoring supplied) The nature of the "associative" relationship may have been intended to be defined more precisely in the still to be forged Comprehensive Compact. Nonetheless, given that there is a concept of "association" in international law, and the MOA-AD - by its inclusion of international law instruments in its TOR- placed itself in an international legal context, that concept of association may be brought to bear in understanding the use of the term "associative" in the MOA-AD. Keitner and Reisman state that [a]n association is formed when two states of unequal power voluntarily establish durable links. In the basic model, one state, the associate, delegates certain responsibilities to the other, the principal, while maintaining its international status as a state. Free associations represent a middle ground between integration and independence. x x x150 (Emphasis and underscoring supplied) For purposes of illustration, the Republic of the Marshall Islands and the Federated States of Micronesia (FSM), formerly part of the U.S.administered Trust Territory of the Pacific Islands,151 are associated states of the U.S. pursuant to a Compact of Free Association. The currency in these countries is the U.S. dollar, indicating their very close ties with the U.S., yet they issue their own travel documents, which is a mark of their statehood. Their international legal status as states was confirmed by the UN Security Council and by their admission to UN membership. According to their compacts of free association, the Marshall Islands and the FSM generally have the capacity to conduct foreign affairs in their own name and right, such capacity extending to matters such as

the law of the sea, marine resources, trade, banking, postal, civil aviation, and cultural relations. The U.S. government, when conducting its foreign affairs, is obligated to consult with the governments of the Marshall Islands or the FSM on matters which it (U.S. government) regards as relating to or affecting either government. In the event of attacks or threats against the Marshall Islands or the FSM, the U.S. government has the authority and obligation to defend them as if they were part of U.S. territory. The U.S. government, moreover, has the option of establishing and using military areas and facilities within these associated states and has the right to bar the military personnel of any third country from having access to these territories for military purposes. It bears noting that in U.S. constitutional and international practice, free association is understood as an international association between sovereigns. The Compact of Free Association is a treaty which is subordinate to the associated nation's national constitution, and each party may terminate the association consistent with the right of independence. It has been said that, with the admission of the U.S.-associated states to the UN in 1990, the UN recognized that the American model of free association is actually based on an underlying status of independence.152 In international practice, the "associated state" arrangement has usually been used as a transitional device of former colonies on their way to full independence. Examples of states that have passed through the status of associated states as a transitional phase are Antigua, St. Kitts-Nevis-Anguilla, Dominica, St. Lucia, St. Vincent and Grenada. All have since become independent states.153 Back to the MOA-AD, it contains many provisions which are consistent with the international legal concept of association, specifically the following: the BJE's capacity to enter into economic and trade relations with foreign countries, the commitment of the Central Government to ensure the BJE's participation in meetings and events in the ASEAN and the specialized UN agencies, and the continuing responsibility of the Central Government over external defense. Moreover, the BJE's right to participate in Philippine official

missions bearing on negotiation of border agreements, environmental protection, and sharing of revenues pertaining to the bodies of water adjacent to or between the islands forming part of the ancestral domain, resembles the right of the governments of FSM and the Marshall Islands to be consulted by the U.S. government on any foreign affairs matter affecting them. These provisions of the MOA indicate, among other things, that the Parties aimed to vest in the BJE the status of an associated state or, at any rate, a status closely approximating it. The concept of association is not recognized under the present Constitution No province, city, or municipality, not even the ARMM, is recognized under our laws as having an "associative" relationship with the national government. Indeed, the concept implies powers that go beyond anything ever granted by the Constitution to any local or regional government. It also implies the recognition of the associated entity as a state. The Constitution, however, does not contemplate any state in this jurisdiction other than the Philippine State, much less does it provide for a transitory status that aims to prepare any part of Philippine territory for independence. Even the mere concept animating many of the MOA-AD's provisions, therefore, already requires for its validity the amendment of constitutional provisions, specifically the following provisions of Article X: SECTION 1. The territorial and political subdivisions of the Republic of the Philippines are the provinces, cities, municipalities, and barangays. There shall be autonomous regions in Muslim Mindanao and the Cordilleras as hereinafter provided. SECTION 15. There shall be created autonomous regions in Muslim Mindanao and in the Cordilleras consisting of provinces, cities, municipalities, and geographical areas sharing common and distinctive historical and cultural heritage, economic and social structures, and other relevant characteristics within the framework of this Constitution and the national sovereignty as well as territorial integrity of the Republic of the Philippines.

The BJE is a far more powerful entity than the autonomous region recognized in the Constitution It is not merely an expanded version of the ARMM, the status of its relationship with the national government being fundamentally different from that of the ARMM. Indeed, BJE is a state in all but name as it meets the criteria of a state laid down in the Montevideo Convention,154 namely, a permanent population, a defined territory, a government, and a capacity to enter into relations with other states. Even assuming arguendo that the MOA-AD would not necessarily sever any portion of Philippine territory, the spirit animating it which has betrayed itself by its use of the concept of association runs counter to the national sovereignty and territorial integrity of the Republic. The defining concept underlying the relationship between the national government and the BJE being itself contrary to the present Constitution, it is not surprising that many of the specific provisions of the MOA-AD on the formation and powers of the BJE are in conflict with the Constitution and the laws. Article X, Section 18 of the Constitution provides that "[t]he creation of the autonomous region shall be effective when approved by a majority of the votes cast by the constituent units in a plebiscite called for the purpose, provided that only provinces, cities, and geographic areas voting favorably in such plebiscite shall be included in the autonomous region." (Emphasis supplied) As reflected above, the BJE is more of a state than an autonomous region. But even assuming that it is covered by the term "autonomous region" in the constitutional provision just quoted, the MOA-AD would still be in conflict with it. Under paragraph 2(c) on TERRITORY in relation to 2(d) and 2(e), the present geographic area of the ARMM and, in addition, the municipalities of Lanao del Norte which voted for inclusion in the ARMM during the 2001 plebiscite - Baloi, Munai, Nunungan, Pantar, Tagoloan and Tangkal - are automatically part of the BJE without need of another plebiscite, in contrast to the areas under Categories A and B mentioned earlier in the overview. That the

present components of the ARMM and the above-mentioned municipalities voted for inclusion therein in 2001, however, does not render another plebiscite unnecessary under the Constitution, precisely because what these areas voted for then was their inclusion in the ARMM, not the BJE. The MOA-AD, moreover, would not comply with Article X, Section 20 of the Constitution since that provision defines the powers of autonomous regions as follows: SECTION 20. Within its territorial jurisdiction and subject to the provisions of this Constitution and national laws, the organic act of autonomous regions shall provide for legislative powers over: (1) Administrative organization; (2) Creation of sources of revenues; (3) Ancestral domain and natural resources; (4) Personal, family, and property relations; (5) Regional urban and rural planning development; (6) Economic, social, and tourism development; (7) Educational policies; (8) Preservation and development of the cultural heritage; and (9) Such other matters as may be authorized by law for the promotion of the general welfare of the people of the region. (Underscoring supplied) Again on the premise that the BJE may be regarded as an autonomous region, the MOA-AD would require an amendment that would expand the above-quoted provision. The mere passage of new legislation pursuant to sub-paragraph No. 9 of said constitutional provision would not suffice, since any new law that might vest in the

BJE the powers found in the MOA-AD must, itself, comply with other provisions of the Constitution. It would not do, for instance, to merely pass legislation vesting the BJE with treaty-making power in order to accommodate paragraph 4 of the strand on RESOURCES which states: "The BJE is free to enter into any economic cooperation and trade relations with foreign countries: provided, however, that such relationships and understandings do not include aggression against the Government of the Republic of the Philippines x x x." Under our constitutional system, it is only the President who has that power. Pimentel v. Executive Secretary155 instructs: In our system of government, the President, being the head of state, is regarded as the sole organ and authority in external relations and is the country's sole representative with foreign nations. As the chief architect of foreign policy, the President acts as the country's mouthpiece with respect to international affairs. Hence, the President is vested with the authority to deal with foreign states and governments, extend or withhold recognition, maintain diplomatic relations, enter into treaties, and otherwise transact the business of foreign relations. In the realm of treaty-making, the President has the sole authority to negotiate with other states. (Emphasis and underscoring supplied) Article II, Section 22 of the Constitution must also be amended if the scheme envisioned in the MOA-AD is to be effected. That constitutional provision states: "The State recognizes and promotes the rights of indigenous cultural communities within the framework of national unity and development." (Underscoring supplied) An associative arrangement does not uphold national unity. While there may be a semblance of unity because of the associative ties between the BJE and the national government, the act of placing a portion of Philippine territory in a status which, in international practice, has generally been a preparation for independence, is certainly not conducive to national unity. Besides being irreconcilable with the Constitution, the MOA-AD is also inconsistent with prevailing statutory law, among which are R.A. No. 9054156 or the Organic Act of the ARMM, and the IPRA.157 Article X, Section 3 of the Organic Act of the ARMM is a bar to

the adoption of the definition of "Bangsamoro people" used in the MOA-AD. Paragraph 1 on Concepts and Principles states: 1. It is the birthright of all Moros and all Indigenous peoples of Mindanao to identify themselves and be accepted as "Bangsamoros". The Bangsamoro people refers to those who are natives or original inhabitants of Mindanao and its adjacent islands including Palawan and the Sulu archipelago at the time of conquest or colonization of its descendants whether mixed or of full blood. Spouses and their descendants are classified as Bangsamoro. The freedom of choice of the Indigenous people shall be respected. (Emphasis and underscoring supplied) This use of the term Bangsamoro sharply contrasts with that found in the Article X, Section 3 of the Organic Act, which, rather than lumping together the identities of the Bangsamoro and other indigenous peoples living in Mindanao, clearly distinguishes between Bangsamoro people and Tribal peoples, as follows: "As used in this Organic Act, the phrase "indigenous cultural community" refers to Filipino citizens residing in the autonomous region who are: (a) Tribal peoples. These are citizens whose social, cultural and economic conditions distinguish them from other sectors of the national community; and (b) Bangsa Moro people. These are citizens who are believers in Islam and who have retained some or all of their own social, economic, cultural, and political institutions." Respecting the IPRA, it lays down the prevailing procedure for the delineation and recognition of ancestral domains. The MOA-AD's manner of delineating the ancestral domain of the Bangsamoro people is a clear departure from that procedure. By paragraph 1 of Territory, the Parties simply agree that, subject to the delimitations in the agreed Schedules, "[t]he Bangsamoro homeland and historic territory refer to the land mass as well as the maritime, terrestrial, fluvial and alluvial domains, and the aerial domain, the atmospheric space above it, embracing the Mindanao-Sulu-Palawan geographic region."

Chapter VIII of the IPRA, on the other hand, lays down a detailed procedure, as illustrated in the following provisions thereof: SECTION 52. Delineation Process. - The identification and delineation of ancestral domains shall be done in accordance with the following procedures: xxxx b) Petition for Delineation. - The process of delineating a specific perimeter may be initiated by the NCIP with the consent of the ICC/IP concerned, or through a Petition for Delineation filed with the NCIP, by a majority of the members of the ICCs/IPs; c) Delineation Proper. - The official delineation of ancestral domain boundaries including census of all community members therein, shall be immediately undertaken by the Ancestral Domains Office upon filing of the application by the ICCs/IPs concerned. Delineation will be done in coordination with the community concerned and shall at all times include genuine involvement and participation by the members of the communities concerned; d) Proof Required. - Proof of Ancestral Domain Claims shall include the testimony of elders or community under oath, and other documents directly or indirectly attesting to the possession or occupation of the area since time immemorial by such ICCs/IPs in the concept of owners which shall be any one (1) of the following authentic documents: 1) Written accounts of the ICCs/IPs customs and traditions; 2) Written accounts of the ICCs/IPs political structure and institution; 3) Pictures showing long term occupation such as those of old improvements, burial grounds, sacred places and old villages; 4) Historical accounts, including pacts and agreements concerning boundaries entered into by the ICCs/IPs concerned with other ICCs/IPs; 5) Survey plans and sketch maps;

6) Anthropological data; 7) Genealogical surveys; 8) Pictures and descriptive histories of traditional communal forests and hunting grounds; 9) Pictures and descriptive histories of traditional landmarks such as mountains, rivers, creeks, ridges, hills, terraces and the like; and 10) Write-ups of names and places derived from the native dialect of the community. e) Preparation of Maps. - On the basis of such investigation and the findings of fact based thereon, the Ancestral Domains Office of the NCIP shall prepare a perimeter map, complete with technical descriptions, and a description of the natural features and landmarks embraced therein; f) Report of Investigation and Other Documents. - A complete copy of the preliminary census and a report of investigation, shall be prepared by the Ancestral Domains Office of the NCIP; g) Notice and Publication. - A copy of each document, including a translation in the native language of the ICCs/IPs concerned shall be posted in a prominent place therein for at least fifteen (15) days. A copy of the document shall also be posted at the local, provincial and regional offices of the NCIP, and shall be published in a newspaper of general circulation once a week for two (2) consecutive weeks to allow other claimants to file opposition thereto within fifteen (15) days from date of such publication: Provided, That in areas where no such newspaper exists, broadcasting in a radio station will be a valid substitute: Provided, further, That mere posting shall be deemed sufficient if both newspaper and radio station are not available; h) Endorsement to NCIP. - Within fifteen (15) days from publication, and of the inspection process, the Ancestral Domains Office shall prepare a report to the NCIP endorsing a favorable action upon a claim that is deemed to have sufficient proof. However, if the proof is deemed insufficient, the Ancestral Domains Office shall require the submission of additional evidence: Provided, That the Ancestral

Domains Office shall reject any claim that is deemed patently false or fraudulent after inspection and verification: Provided, further, That in case of rejection, the Ancestral Domains Office shall give the applicant due notice, copy furnished all concerned, containing the grounds for denial. The denial shall be appealable to the NCIP: Provided, furthermore, That in cases where there are conflicting claims among ICCs/IPs on the boundaries of ancestral domain claims, the Ancestral Domains Office shall cause the contending parties to meet and assist them in coming up with a preliminary resolution of the conflict, without prejudice to its full adjudication according to the section below. xxxx To remove all doubts about the irreconcilability of the MOA-AD with the present legal system, a discussion of not only the Constitution and domestic statutes, but also of international law is in order, for Article II, Section 2 of the Constitution states that the Philippines "adopts the generally accepted principles of international law as part of the law of the land." Applying this provision of the Constitution, the Court, in Mejoff v. Director of Prisons,158 held that the Universal Declaration of Human Rights is part of the law of the land on account of which it ordered the release on bail of a detained alien of Russian descent whose deportation order had not been executed even after two years. Similarly, the Court in Agustin v. Edu159 applied the aforesaid constitutional provision to the 1968 Vienna Convention on Road Signs and Signals. International law has long recognized the right to self-determination of "peoples," understood not merely as the entire population of a State but also a portion thereof. In considering the question of whether the people of Quebec had a right to unilaterally secede from Canada, the Canadian Supreme Court in REFERENCE RE SECESSION OF QUEBEC160 had occasion to acknowledge that "the right of a people to self-determination is now so widely recognized in international conventions that the principle has acquired a status beyond convention' and is considered a general principle of international

law." Among the conventions referred to are the International Covenant on Civil and Political Rights161 and the International Covenant on Economic, Social and Cultural Rights162 which state, in Article 1 of both covenants, that all peoples, by virtue of the right of selfdetermination, "freely determine their political status and freely pursue their economic, social, and cultural development." The people's right to self-determination should not, however, be understood as extending to a unilateral right of secession. A distinction should be made between the right of internal and external self-determination. REFERENCE RE SECESSION OF QUEBEC is again instructive: "(ii) Scope of the Right to Self-determination 126. The recognized sources of international law establish that the right to self-determination of a people is normally fulfilled through internal self-determination - a people's pursuit of its political, economic, social and cultural development within the framework of an existing state. A right to external selfdetermination (which in this case potentially takes the form of the assertion of a right to unilateral secession) arises in only the most extreme of cases and, even then, under carefully defined circumstances. x x x External self-determination can be defined as in the following statement from the Declaration on Friendly Relations, supra, as The establishment of a sovereign and independent State, the free association or integration with an independent State or the emergence into any other political status freely determined by a people constitute modes of implementing the right of selfdetermination by that people. (Emphasis added) 127. The international law principle of self-determination has evolved within a framework of respect for the territorial integrity of existing states. The various international documents that support the existence of a people's right to self-determination also contain parallel statements supportive of the conclusion that the exercise of

such a right must be sufficiently limited to prevent threats to an existing state's territorial integrity or the stability of relations between sovereign states. x x x x (Emphasis, italics and underscoring supplied) The Canadian Court went on to discuss the exceptional cases in which the right to external self-determination can arise, namely, where a people is under colonial rule, is subject to foreign domination or exploitation outside a colonial context, and - less definitely but asserted by a number of commentators - is blocked from the meaningful exercise of its right to internal self-determination. The Court ultimately held that the population of Quebec had no right to secession, as the same is not under colonial rule or foreign domination, nor is it being deprived of the freedom to make political choices and pursue economic, social and cultural development, citing that Quebec is equitably represented in legislative, executive and judicial institutions within Canada, even occupying prominent positions therein. The exceptional nature of the right of secession is further exemplified in the REPORT OF THE INTERNATIONAL COMMITTEE OF JURISTS ON THE LEGAL ASPECTS OF THE AALAND ISLANDS QUESTION.163 There, Sweden presented to the Council of the League of Nations the question of whether the inhabitants of the Aaland Islands should be authorized to determine by plebiscite if the archipelago should remain under Finnish sovereignty or be incorporated in the kingdom of Sweden. The Council, before resolving the question, appointed an International Committee composed of three jurists to submit an opinion on the preliminary issue of whether the dispute should, based on international law, be entirely left to the domestic jurisdiction of Finland. The Committee stated the rule as follows: x x x [I]n the absence of express provisions in international treaties, the right of disposing of national territory is essentially an attribute of the sovereignty of every State. Positive International Law does not recognize the right of national groups, as such, to separate themselves from the State of which they form part by the simple expression of a wish, any more than it recognizes the

right of other States to claim such a separation. Generally speaking, the grant or refusal of the right to a portion of its population of determining its own political fate by plebiscite or by some other method, is, exclusively, an attribute of the sovereignty of every State which is definitively constituted. A dispute between two States concerning such a question, under normal conditions therefore, bears upon a question which International Law leaves entirely to the domestic jurisdiction of one of the States concerned. Any other solution would amount to an infringement of sovereign rights of a State and would involve the risk of creating difficulties and a lack of stability which would not only be contrary to the very idea embodied in term "State," but would also endanger the interests of the international community. If this right is not possessed by a large or small section of a nation, neither can it be held by the State to which the national group wishes to be attached, nor by any other State. (Emphasis and underscoring supplied) The Committee held that the dispute concerning the Aaland Islands did not refer to a question which is left by international law to the domestic jurisdiction of Finland, thereby applying the exception rather than the rule elucidated above. Its ground for departing from the general rule, however, was a very narrow one, namely, the Aaland Islands agitation originated at a time when Finland was undergoing drastic political transformation. The internal situation of Finland was, according to the Committee, so abnormal that, for a considerable time, the conditions required for the formation of a sovereign State did not exist. In the midst of revolution, anarchy, and civil war, the legitimacy of the Finnish national government was disputed by a large section of the people, and it had, in fact, been chased from the capital and forcibly prevented from carrying out its duties. The armed camps and the police were divided into two opposing forces. In light of these circumstances, Finland was not, during the relevant time period, a "definitively constituted" sovereign state. The Committee, therefore, found that Finland did not possess the right to withhold from a portion of its population the option to separate itself - a right which sovereign nations generally have with respect to their own populations. Turning now to the more specific category of indigenous peoples, this term has been used, in scholarship as well as international, regional, and state practices, to refer to groups with distinct cultures, histories,

and connections to land (spiritual and otherwise) that have been forcibly incorporated into a larger governing society. These groups are regarded as "indigenous" since they are the living descendants of pre-invasion inhabitants of lands now dominated by others. Otherwise stated, indigenous peoples, nations, or communities are culturally distinctive groups that find themselves engulfed by settler societies born of the forces of empire and conquest.164 Examples of groups who have been regarded as indigenous peoples are the Maori of New Zealand and the aboriginal peoples of Canada. As with the broader category of "peoples," indigenous peoples situated within states do not have a general right to independence or secession from those states under international law,165 but they do have rights amounting to what was discussed above as the right to internal self-determination. In a historic development last September 13, 2007, the UN General Assembly adopted the United Nations Declaration on the Rights of Indigenous Peoples (UN DRIP) through General Assembly Resolution 61/295. The vote was 143 to 4, the Philippines being included among those in favor, and the four voting against being Australia, Canada, New Zealand, and the U.S. The Declaration clearly recognized the right of indigenous peoples to selfdetermination, encompassing the right to autonomy or selfgovernment, to wit: Article 3 Indigenous peoples have the right to self-determination. By virtue of that right they freely determine their political status and freely pursue their economic, social and cultural development. Article 4 Indigenous peoples, in exercising their right to self-determination, have the right to autonomy or self-government in matters relating to their internal and local affairs, as well as ways and means for financing their autonomous functions. Article 5

Indigenous peoples have the right to maintain and strengthen their distinct political, legal, economic, social and cultural institutions, while retaining their right to participate fully, if they so choose, in the political, economic, social and cultural life of the State. Self-government, as used in international legal discourse pertaining to indigenous peoples, has been understood as equivalent to "internal self-determination."166 The extent of self-determination provided for in the UN DRIP is more particularly defined in its subsequent articles, some of which are quoted hereunder: Article 8 1. Indigenous peoples and individuals have the right not to be subjected to forced assimilation or destruction of their culture. 2. States shall provide effective mechanisms for prevention of, and redress for: (a) Any action which has the aim or effect of depriving them of their integrity as distinct peoples, or of their cultural values or ethnic identities; (b) Any action which has the aim or effect of dispossessing them of their lands, territories or resources; (c) Any form of forced population transfer which has the aim or effect of violating or undermining any of their rights; (d) Any form of forced assimilation or integration; (e) Any form of propaganda designed to promote or incite racial or ethnic discrimination directed against them. Article 21 1. Indigenous peoples have the right, without discrimination, to the improvement of their economic and social conditions, including, inter alia, in the areas of education, employment, vocational training and retraining, housing, sanitation, health and social security.

2. States shall take effective measures and, where appropriate, special measures to ensure continuing improvement of their economic and social conditions. Particular attention shall be paid to the rights and special needs of indigenous elders, women, youth, children and persons with disabilities. Article 26 1. Indigenous peoples have the right to the lands, territories and resources which they have traditionally owned, occupied or otherwise used or acquired. 2. Indigenous peoples have the right to own, use, develop and control the lands, territories and resources that they possess by reason of traditional ownership or other traditional occupation or use, as well as those which they have otherwise acquired. 3. States shall give legal recognition and protection to these lands, territories and resources. Such recognition shall be conducted with due respect to the customs, traditions and land tenure systems of the indigenous peoples concerned. Article 30 1. Military activities shall not take place in the lands or territories of indigenous peoples, unless justified by a relevant public interest or otherwise freely agreed with or requested by the indigenous peoples concerned. 2. States shall undertake effective consultations with the indigenous peoples concerned, through appropriate procedures and in particular through their representative institutions, prior to using their lands or territories for military activities. Article 32 1. Indigenous peoples have the right to determine and develop priorities and strategies for the development or use of their lands or territories and other resources. 2. States shall consult and cooperate in good faith with the

indigenous peoples concerned through their own representative institutions in order to obtain their free and informed consent prior to the approval of any project affecting their lands or territories and other resources, particularly in connection with the development, utilization or exploitation of mineral, water or other resources. 3. States shall provide effective mechanisms for just and fair redress for any such activities, and appropriate measures shall be taken to mitigate adverse environmental, economic, social, cultural or spiritual impact. Article 37 1. Indigenous peoples have the right to the recognition, observance and enforcement of treaties, agreements and other constructive arrangements concluded with States or their successors and to have States honour and respect such treaties, agreements and other constructive arrangements. 2. Nothing in this Declaration may be interpreted as diminishing or eliminating the rights of indigenous peoples contained in treaties, agreements and other constructive arrangements. Article 38 States in consultation and cooperation with indigenous peoples, shall take the appropriate measures, including legislative measures, to achieve the ends of this Declaration. Assuming that the UN DRIP, like the Universal Declaration on Human Rights, must now be regarded as embodying customary international law - a question which the Court need not definitively resolve here the obligations enumerated therein do not strictly require the Republic to grant the Bangsamoro people, through the instrumentality of the BJE, the particular rights and powers provided for in the MOA-AD. Even the more specific provisions of the UN DRIP are general in scope, allowing for flexibility in its application by the different States. There is, for instance, no requirement in the UN DRIP that States now guarantee indigenous peoples their own police and internal security force. Indeed, Article 8 presupposes that it is the State which

will provide protection for indigenous peoples against acts like the forced dispossession of their lands - a function that is normally performed by police officers. If the protection of a right so essential to indigenous people's identity is acknowledged to be the responsibility of the State, then surely the protection of rights less significant to them as such peoples would also be the duty of States. Nor is there in the UN DRIP an acknowledgement of the right of indigenous peoples to the aerial domain and atmospheric space. What it upholds, in Article 26 thereof, is the right of indigenous peoples to the lands, territories and resources which they have traditionally owned, occupied or otherwise used or acquired. Moreover, the UN DRIP, while upholding the right of indigenous peoples to autonomy, does not obligate States to grant indigenous peoples the near-independent status of an associated state. All the rights recognized in that document are qualified in Article 46 as follows: 1. Nothing in this Declaration may be interpreted as implying for any State, people, group or person any right to engage in any activity or to perform any act contrary to the Charter of the United Nations or construed as authorizing or encouraging any action which would dismember or impair, totally or in part, the territorial integrity or political unity of sovereign and independent States. Even if the UN DRIP were considered as part of the law of the land pursuant to Article II, Section 2 of the Constitution, it would not suffice to uphold the validity of the MOA-AD so as to render its compliance with other laws unnecessary. It is, therefore, clear that the MOA-AD contains numerous provisions that cannot be reconciled with the Constitution and the laws as presently worded. Respondents proffer, however, that the signing of the MOA-AD alone would not have entailed any violation of law or grave abuse of discretion on their part, precisely because it stipulates that the provisions thereof inconsistent with the laws shall not take effect until these laws are amended. They cite paragraph 7 of the MOA-AD strand on GOVERNANCE quoted earlier, but which is reproduced below for convenience:

7. The Parties agree that the mechanisms and modalities for the actual implementation of this MOA-AD shall be spelt out in the Comprehensive Compact to mutually take such steps to enable it to occur effectively. Any provisions of the MOA-AD requiring amendments to the existing legal framework shall come into force upon signing of a Comprehensive Compact and upon effecting the necessary changes to the legal framework with due regard to non derogation of prior agreements and within the stipulated timeframe to be contained in the Comprehensive Compact. Indeed, the foregoing stipulation keeps many controversial provisions of the MOA-AD from coming into force until the necessary changes to the legal framework are effected. While the word "Constitution" is not mentioned in the provision now under consideration or anywhere else in the MOA-AD, the term "legal framework" is certainly broad enough to include the Constitution. Notwithstanding the suspensive clause, however, respondents, by their mere act of incorporating in the MOA-AD the provisions thereof regarding the associative relationship between the BJE and the Central Government, have already violated the Memorandum of Instructions From The President dated March 1, 2001, which states that the "negotiations shall be conducted in accordance with x x x the principles of the sovereignty and territorial integrity of the Republic of the Philippines." (Emphasis supplied) Establishing an associative relationship between the BJE and the Central Government is, for the reasons already discussed, a preparation for independence, or worse, an implicit acknowledgment of an independent status already prevailing. Even apart from the above-mentioned Memorandum, however, the MOA-AD is defective because the suspensive clause is invalid, as discussed below. The authority of the GRP Peace Negotiating Panel to negotiate with the MILF is founded on E.O. No. 3, Section 5(c), which states that there shall be established Government Peace Negotiating Panels for negotiations with different rebel groups to be "appointed by the

President as her official emissaries to conduct negotiations, dialogues, and face-to-face discussions with rebel groups." These negotiating panels are to report to the President, through the PAPP on the conduct and progress of the negotiations. It bears noting that the GRP Peace Panel, in exploring lasting solutions to the Moro Problem through its negotiations with the MILF, was not restricted by E.O. No. 3 only to those options available under the laws as they presently stand. One of the components of a comprehensive peace process, which E.O. No. 3 collectively refers to as the "Paths to Peace," is the pursuit of social, economic, and political reforms which may require new legislation or even constitutional amendments. Sec. 4(a) of E.O. No. 3, which reiterates Section 3(a), of E.O. No. 125,167 states: SECTION 4. The Six Paths to Peace. - The components of the comprehensive peace process comprise the processes known as the "Paths to Peace". These component processes are interrelated and not mutually exclusive, and must therefore be pursued simultaneously in a coordinated and integrated fashion. They shall include, but may not be limited to, the following: a. PURSUIT OF SOCIAL, ECONOMIC AND POLITICAL REFORMS. This component involves the vigorous implementation of various policies, reforms, programs and projects aimed at addressing the root causes of internal armed conflicts and social unrest. This may require administrative action, new legislation or even constitutional amendments. x x x x (Emphasis supplied) The MOA-AD, therefore, may reasonably be perceived as an attempt of respondents to address, pursuant to this provision of E.O. No. 3, the root causes of the armed conflict in Mindanao. The E.O. authorized them to "think outside the box," so to speak. Hence, they negotiated and were set on signing the MOA-AD that included various social, economic, and political reforms which cannot, however, all be accommodated within the present legal framework, and which thus would require new legislation and constitutional amendments.

The inquiry on the legality of the "suspensive clause," however, cannot stop here, because it must be asked whether the President herself may exercise the power delegated to the GRP Peace Panel under E.O. No. 3, Sec. 4(a). The President cannot delegate a power that she herself does not possess. May the President, in the course of peace negotiations, agree to pursue reforms that would require new legislation and constitutional amendments, or should the reforms be restricted only to those solutions which the present laws allow? The answer to this question requires a discussion of the extent of the President's power to conduct peace negotiations. That the authority of the President to conduct peace negotiations with rebel groups is not explicitly mentioned in the Constitution does not mean that she has no such authority. In Sanlakas v. Executive Secretary,168 in issue was the authority of the President to declare a state of rebellion - an authority which is not expressly provided for in the Constitution. The Court held thus: "In her ponencia in Marcos v. Manglapus, Justice Cortes put her thesis into jurisprudence. There, the Court, by a slim 8-7 margin, upheld the President's power to forbid the return of her exiled predecessor. The rationale for the majority's ruling rested on the President's . . . unstated residual powers which are implied from the grant of executive power and which are necessary for her to comply with her duties under the Constitution. The powers of the President are not limited to what are expressly enumerated in the article on the Executive Department and in scattered provisions of the Constitution. This is so, notwithstanding the avowed intent of the members of the Constitutional Commission of 1986 to limit the powers of the President as a reaction to the abuses under the regime of Mr. Marcos, for the result was a limitation of specific powers of the President, particularly those relating to the commander-in-chief clause, but not a diminution of the general grant of executive power. Thus, the President's authority to declare a state of rebellion springs in the main from her powers as chief executive and, at

the same time, draws strength from her Commander-in-Chief powers. x x x (Emphasis and underscoring supplied) Similarly, the President's power to conduct peace negotiations is implicitly included in her powers as Chief Executive and Commanderin-Chief. As Chief Executive, the President has the general responsibility to promote public peace, and as Commander-in-Chief, she has the more specific duty to prevent and suppress rebellion and lawless violence.169 As the experience of nations which have similarly gone through internal armed conflict will show, however, peace is rarely attained by simply pursuing a military solution. Oftentimes, changes as farreaching as a fundamental reconfiguration of the nation's constitutional structure is required. The observations of Dr. Kirsti Samuels are enlightening, to wit: x x x [T]he fact remains that a successful political and governance transition must form the core of any post-conflict peace-building mission. As we have observed in Liberia and Haiti over the last ten years, conflict cessation without modification of the political environment, even where state-building is undertaken through technical electoral assistance and institution- or capacity-building, is unlikely to succeed. On average, more than 50 percent of states emerging from conflict return to conflict. Moreover, a substantial proportion of transitions have resulted in weak or limited democracies. The design of a constitution and its constitution-making process can play an important role in the political and governance transition. Constitution-making after conflict is an opportunity to create a common vision of the future of a state and a road map on how to get there. The constitution can be partly a peace agreement and partly a framework setting up the rules by which the new democracy will operate.170 In the same vein, Professor Christine Bell, in her article on the nature and legal status of peace agreements, observed that the typical way that peace agreements establish or confirm mechanisms for demilitarization and demobilization is by linking them to new

constitutional structures addressing governance, elections, and legal and human rights institutions.171 In the Philippine experience, the link between peace agreements and constitution-making has been recognized by no less than the framers of the Constitution. Behind the provisions of the Constitution on autonomous regions172 is the framers' intention to implement a particular peace agreement, namely, the Tripoli Agreement of 1976 between the GRP and the MNLF, signed by then Undersecretary of National Defense Carmelo Z. Barbero and then MNLF Chairman Nur Misuari. MR. ROMULO. There are other speakers; so, although I have some more questions, I will reserve my right to ask them if they are not covered by the other speakers. I have only two questions. I heard one of the Commissioners say that local autonomy already exists in the Muslim region; it is working very well; it has, in fact, diminished a great deal of the problems. So, my question is: since that already exists, why do we have to go into something new? MR. OPLE. May I answer that on behalf of Chairman Nolledo. Commissioner Yusup Abubakar is right that certain definite steps have been taken to implement the provisions of the Tripoli Agreement with respect to an autonomous region in Mindanao. This is a good first step, but there is no question that this is merely a partial response to the Tripoli Agreement itself and to the fuller standard of regional autonomy contemplated in that agreement, and now by state policy.173(Emphasis supplied) The constitutional provisions on autonomy and the statutes enacted pursuant to them have, to the credit of their drafters, been partly successful. Nonetheless, the Filipino people are still faced with the reality of an on-going conflict between the Government and the MILF. If the President is to be expected to find means for bringing this conflict to an end and to achieve lasting peace in Mindanao, then she must be given the leeway to explore, in the course of peace negotiations, solutions that may require changes to the Constitution for their implementation. Being uniquely vested with the power to

conduct peace negotiations with rebel groups, the President is in a singular position to know the precise nature of their grievances which, if resolved, may bring an end to hostilities. The President may not, of course, unilaterally implement the solutions that she considers viable, but she may not be prevented from submitting them as recommendations to Congress, which could then, if it is minded, act upon them pursuant to the legal procedures for constitutional amendment and revision. In particular, Congress would have the option, pursuant to Article XVII, Sections 1 and 3 of the Constitution, to propose the recommended amendments or revision to the people, call a constitutional convention, or submit to the electorate the question of calling such a convention. While the President does not possess constituent powers - as those powers may be exercised only by Congress, a Constitutional Convention, or the people through initiative and referendum - she may submit proposals for constitutional change to Congress in a manner that does not involve the arrogation of constituent powers. In Sanidad v. COMELEC,174 in issue was the legality of then President Marcos' act of directly submitting proposals for constitutional amendments to a referendum, bypassing the interim National Assembly which was the body vested by the 1973 Constitution with the power to propose such amendments. President Marcos, it will be recalled, never convened the interim National Assembly. The majority upheld the President's act, holding that "the urges of absolute necessity" compelled the President as the agent of the people to act as he did, there being no interim National Assembly to propose constitutional amendments. Against this ruling, Justices Teehankee and Muoz Palma vigorously dissented. The Court's concern at present, however, is not with regard to the point on which it was then divided in that controversial case, but on that which was not disputed by either side. Justice Teehankee's dissent,175 in particular, bears noting. While he disagreed that the President may directly submit proposed constitutional amendments to a referendum, implicit in his opinion is a recognition that he would have upheld the President's action along with the majority had the President convened the interim National

Assembly and coursed his proposals through it. Thus Justice Teehankee opined: "Since the Constitution provides for the organization of the essential departments of government, defines and delimits the powers of each and prescribes the manner of the exercise of such powers, and the constituent power has not been granted to but has been withheld from the President or Prime Minister, it follows that the President's questioned decrees proposing and submitting constitutional amendments directly to the people (without the intervention of the interim National Assembly in whom the power is expressly vested) are devoid of constitutional and legal basis."176 (Emphasis supplied) From the foregoing discussion, the principle may be inferred that the President - in the course of conducting peace negotiations - may validly consider implementing even those policies that require changes to the Constitution, but she may not unilaterally implement them without the intervention of Congress, or act in any way as if the assent of that body were assumed as a certainty. Since, under the present Constitution, the people also have the power to directly propose amendments through initiative and referendum, the President may also submit her recommendations to the people, not as a formal proposal to be voted on in a plebiscite similar to what President Marcos did in Sanidad, but for their independent consideration of whether these recommendations merit being formally proposed through initiative. These recommendations, however, may amount to nothing more than the President's suggestions to the people, for any further involvement in the process of initiative by the Chief Executive may vitiate its character as a genuine "people's initiative." The only initiative recognized by the Constitution is that which truly proceeds from the people. As the Court stated in Lambino v. COMELEC:177 "The Lambino Group claims that their initiative is the people's voice.' However, the Lambino Group unabashedly states in ULAP Resolution No. 2006-02, in the verification of their petition with the COMELEC, that ULAP maintains its unqualified support to the

agenda of Her Excellency President Gloria Macapagal-Arroyo for constitutional reforms.' The Lambino Group thus admits that their people's' initiative is an unqualified support to the agenda' of the incumbent President to change the Constitution. This forewarns the Court to be wary of incantations of people's voice' or sovereign will' in the present initiative." It will be observed that the President has authority, as stated in her oath of office,178 only to preserve and defend the Constitution. Such presidential power does not, however, extend to allowing her to change the Constitution, but simply to recommend proposed amendments or revision. As long as she limits herself to recommending these changes and submits to the proper procedure for constitutional amendments and revision, her mere recommendation need not be construed as an unconstitutional act. The foregoing discussion focused on the President's authority to propose constitutional amendments, since her authority to propose new legislation is not in controversy. It has been an accepted practice for Presidents in this jurisdiction to propose new legislation. One of the more prominent instances the practice is usually done is in the yearly State of the Nation Address of the President to Congress. Moreover, the annual general appropriations bill has always been based on the budget prepared by the President, which - for all intents and purposes - is a proposal for new legislation coming from the President.179 The "suspensive clause" in the MOA-AD viewed in light of the above-discussed standards Given the limited nature of the President's authority to propose constitutional amendments, she cannot guarantee to any third party that the required amendments will eventually be put in place, nor even be submitted to a plebiscite. The most she could do is submit these proposals as recommendations either to Congress or the people, in whom constituent powers are vested. Paragraph 7 on Governance of the MOA-AD states, however, that all provisions thereof which cannot be reconciled with the present Constitution and laws "shall come into force upon signing of a

Comprehensive Compact and upon effecting the necessary changes to the legal framework." This stipulation does not bear the marks of a suspensive condition - defined in civil law as a future and uncertain event - but of a term. It is not a question of whether the necessary changes to the legal framework will be effected, but when. That there is no uncertainty being contemplated is plain from what follows, for the paragraph goes on to state that the contemplated changes shall be "with due regard to non derogation of prior agreements and within the stipulated timeframe to be contained in the Comprehensive Compact." Pursuant to this stipulation, therefore, it is mandatory for the GRP to effect the changes to the legal framework contemplated in the MOAAD - which changes would include constitutional amendments, as discussed earlier. It bears noting that, By the time these changes are put in place, the MOA-AD itself would be counted among the "prior agreements" from which there could be no derogation. What remains for discussion in the Comprehensive Compact would merely be the implementing details for these "consensus points" and, notably, the deadline for effecting the contemplated changes to the legal framework. Plainly, stipulation-paragraph 7 on GOVERNANCE is inconsistent with the limits of the President's authority to propose constitutional amendments, it being a virtual guarantee that the Constitution and the laws of the Republic of the Philippines will certainly be adjusted to conform to all the "consensus points" found in the MOA-AD. Hence, it must be struck down as unconstitutional. A comparison between the "suspensive clause" of the MOA-AD with a similar provision appearing in the 1996 final peace agreement between the MNLF and the GRP is most instructive. As a backdrop, the parties to the 1996 Agreement stipulated that it would be implemented in two phases. Phase I covered a three-year transitional period involving the putting up of new administrative structures through Executive Order, such as the Special Zone of Peace and Development (SZOPAD) and the Southern Philippines

Council for Peace and Development (SPCPD), while Phase II covered the establishment of the new regional autonomous government through amendment or repeal of R.A. No. 6734, which was then the Organic Act of the ARMM. The stipulations on Phase II consisted of specific agreements on the structure of the expanded autonomous region envisioned by the parties. To that extent, they are similar to the provisions of the MOAAD. There is, however, a crucial difference between the two agreements. While the MOA-AD virtually guarantees that the "necessary changes to the legal framework" will be put in place, the GRP-MNLF final peace agreement states thus: "Accordingly, these provisions [on Phase II] shall be recommended by the GRP to Congress for incorporation in the amendatory or repealing law." Concerns have been raised that the MOA-AD would have given rise to a binding international law obligation on the part of the Philippines to change its Constitution in conformity thereto, on the ground that it may be considered either as a binding agreement under international law, or a unilateral declaration of the Philippine government to the international community that it would grant to the Bangsamoro people all the concessions therein stated. Neither ground finds sufficient support in international law, however. The MOA-AD, as earlier mentioned in the overview thereof, would have included foreign dignitaries as signatories. In addition, representatives of other nations were invited to witness its signing in Kuala Lumpur. These circumstances readily lead one to surmise that the MOA-AD would have had the status of a binding international agreement had it been signed. An examination of the prevailing principles in international law, however, leads to the contrary conclusion. The Decision on Challenge to Jurisdiction: Lom Accord Amnesty180 (the Lom Accord case) of the Special Court of Sierra Leone is enlightening. The Lom Accord was a peace agreement signed on July 7, 1999 between the Government of Sierra Leone and the Revolutionary United Front (RUF), a rebel group with which the Sierra Leone Government had been in armed conflict for around eight years at the time of signing. There were non-contracting signatories to the

agreement, among which were the Government of the Togolese Republic, the Economic Community of West African States, and the UN. On January 16, 2002, after a successful negotiation between the UN Secretary-General and the Sierra Leone Government, another agreement was entered into by the UN and that Government whereby the Special Court of Sierra Leone was established. The sole purpose of the Special Court, an international court, was to try persons who bore the greatest responsibility for serious violations of international humanitarian law and Sierra Leonean law committed in the territory of Sierra Leone since November 30, 1996. Among the stipulations of the Lom Accord was a provision for the full pardon of the members of the RUF with respect to anything done by them in pursuit of their objectives as members of that organization since the conflict began. In the Lom Accord case, the Defence argued that the Accord created an internationally binding obligation not to prosecute the beneficiaries of the amnesty provided therein, citing, among other things, the participation of foreign dignitaries and international organizations in the finalization of that agreement. The Special Court, however, rejected this argument, ruling that the Lome Accord is not a treaty and that it can only create binding obligations and rights between the parties in municipal law, not in international law. Hence, the Special Court held, it is ineffective in depriving an international court like it of jurisdiction. "37. In regard to the nature of a negotiated settlement of an internal armed conflict it is easy to assume and to argue with some degree of plausibility, as Defence counsel for the defendants seem to have done, that the mere fact that in addition to the parties to the conflict, the document formalizing the settlement is signed by foreign heads of state or their representatives and representatives of international organizations, means the agreement of the parties is internationalized so as to create obligations in international law. xxxx

40. Almost every conflict resolution will involve the parties to the conflict and the mediator or facilitator of the settlement, or persons or bodies under whose auspices the settlement took place but who are not at all parties to the conflict, are not contracting parties and who do not claim any obligation from the contracting parties or incur any obligation from the settlement. 41. In this case, the parties to the conflict are the lawful authority of the State and the RUF which has no status of statehood and is to all intents and purposes a faction within the state. The noncontracting signatories of the Lom Agreement were moral guarantors of the principle that, in the terms of Article XXXIV of the Agreement, "this peace agreement is implemented with integrity and in good faith by both parties". The moral guarantors assumed no legal obligation. It is recalled that the UN by its representative appended, presumably for avoidance of doubt, an understanding of the extent of the agreement to be implemented as not including certain international crimes. 42. An international agreement in the nature of a treaty must create rights and obligations regulated by international law so that a breach of its terms will be a breach determined under international law which will also provide principle means of enforcement. The Lom Agreement created neither rights nor obligations capable of being regulated by international law. An agreement such as the Lom Agreement which brings to an end an internal armed conflict no doubt creates a factual situation of restoration of peace that the international community acting through the Security Council may take note of. That, however, will not convert it to an international agreement which creates an obligation enforceable in international, as distinguished from municipal, law. A breach of the terms of such a peace agreement resulting in resumption of internal armed conflict or creating a threat to peace in the determination of the Security Council may indicate a reversal of the factual situation of peace to be visited with possible legal consequences arising from the new situation of conflict created. Such consequences such as action by the Security Council pursuant to Chapter VII arise from the situation and not from the agreement, nor from the obligation imposed by it. Such action cannot be regarded as a remedy for the breach. A peace agreement which settles an

internal armed conflict cannot be ascribed the same status as one which settles an international armed conflict which, essentially, must be between two or more warring States. The Lom Agreement cannot be characterised as an international instrument. x x x" (Emphasis, italics and underscoring supplied) Similarly, that the MOA-AD would have been signed by representatives of States and international organizations not parties to the Agreement would not have sufficed to vest in it a binding character under international law. In another vein, concern has been raised that the MOA-AD would amount to a unilateral declaration of the Philippine State, binding under international law, that it would comply with all the stipulations stated therein, with the result that it would have to amend its Constitution accordingly regardless of the true will of the people. Cited as authority for this view is Australia v. France,181 also known as the Nuclear Tests Case, decided by the International Court of Justice (ICJ). In the Nuclear Tests Case, Australia challenged before the ICJ the legality of France's nuclear tests in the South Pacific. France refused to appear in the case, but public statements from its President, and similar statements from other French officials including its Minister of Defence, that its 1974 series of atmospheric tests would be its last, persuaded the ICJ to dismiss the case.182 Those statements, the ICJ held, amounted to a legal undertaking addressed to the international community, which required no acceptance from other States for it to become effective. Essential to the ICJ ruling is its finding that the French government intended to be bound to the international community in issuing its public statements, viz: 43. It is well recognized that declarations made by way of unilateral acts, concerning legal or factual situations, may have the effect of creating legal obligations. Declarations of this kind may be, and often are, very specific. When it is the intention of the State making the declaration that it should become bound according to its terms, that intention confers on the declaration the character of a legal

undertaking, the State being thenceforth legally required to follow a course of conduct consistent with the declaration. An undertaking of this kind, if given publicly, and with an intent to be bound, even though not made within the context of international negotiations, is binding. In these circumstances, nothing in the nature of a quid pro quo nor any subsequent acceptance of the declaration, nor even any reply or reaction from other States, is required for the declaration to take effect, since such a requirement would be inconsistent with the strictly unilateral nature of the juridical act by which the pronouncement by the State was made. 44. Of course, not all unilateral acts imply obligation; but a State may choose to take up a certain position in relation to a particular matter with the intention of being bound-the intention is to be ascertained by interpretation of the act. When States make statements by which their freedom of action is to be limited, a restrictive interpretation is called for. xxxx 51. In announcing that the 1974 series of atmospheric tests would be the last, the French Government conveyed to the world at large, including the Applicant, its intention effectively to terminate these tests. It was bound to assume that other States might take note of these statements and rely on their being effective. The validity of these statements and their legal consequences must be considered within the general framework of the security of international intercourse, and the confidence and trust which are so essential in the relations among States. It is from the actual substance of these statements, and from the circumstances attending their making, that the legal implications of the unilateral act must be deduced. The objects of these statements are clear and they were addressed to the international community as a whole, and the Court holds that they constitute an undertaking possessing legal effect. The Court considers *270 that the President of the Republic, in deciding upon the effective cessation of atmospheric tests, gave an undertaking to the international community to which his words were addressed. x x x (Emphasis and underscoring supplied)

As gathered from the above-quoted ruling of the ICJ, public statements of a state representative may be construed as a unilateral declaration only when the following conditions are present: the statements were clearly addressed to the international community, the state intended to be bound to that community by its statements, and that not to give legal effect to those statements would be detrimental to the security of international intercourse. Plainly, unilateral declarations arise only in peculiar circumstances. The limited applicability of the Nuclear Tests Case ruling was recognized in a later case decided by the ICJ entitled Burkina Faso v. Mali,183 also known as the Case Concerning the Frontier Dispute. The public declaration subject of that case was a statement made by the President of Mali, in an interview by a foreign press agency, that Mali would abide by the decision to be issued by a commission of the Organization of African Unity on a frontier dispute then pending between Mali and Burkina Faso. Unlike in the Nuclear Tests Case, the ICJ held that the statement of Mali's President was not a unilateral act with legal implications. It clarified that its ruling in the Nuclear Tests case rested on the peculiar circumstances surrounding the French declaration subject thereof, to wit: 40. In order to assess the intentions of the author of a unilateral act, account must be taken of all the factual circumstances in which the act occurred. For example, in the Nuclear Tests cases, the Court took the view that since the applicant States were not the only ones concerned at the possible continuance of atmospheric testing by the French Government, that Government's unilateral declarations had conveyed to the world at large, including the Applicant, its intention effectively to terminate these tests (I.C.J. Reports 1974, p. 269, para. 51; p. 474, para. 53). In the particular circumstances of those cases, the French Government could not express an intention to be bound otherwise than by unilateral declarations. It is difficult to see how it could have accepted the terms of a negotiated solution with each of the applicants without thereby jeopardizing its contention that its conduct was lawful. The circumstances of the present case are radically different. Here, there was nothing to hinder the Parties from

manifesting an intention to accept the binding character of the conclusions of the Organization of African Unity Mediation Commission by the normal method: a formal agreement on the basis of reciprocity. Since no agreement of this kind was concluded between the Parties, the Chamber finds that there are no grounds to interpret the declaration made by Mali's head of State on 11 April 1975 as a unilateral act with legal implications in regard to the present case. (Emphasis and underscoring supplied) Assessing the MOA-AD in light of the above criteria, it would not have amounted to a unilateral declaration on the part of the Philippine State to the international community. The Philippine panel did not draft the same with the clear intention of being bound thereby to the international community as a whole or to any State, but only to the MILF. While there were States and international organizations involved, one way or another, in the negotiation and projected signing of the MOA-AD, they participated merely as witnesses or, in the case of Malaysia, as facilitator. As held in the Lom Accord case, the mere fact that in addition to the parties to the conflict, the peace settlement is signed by representatives of states and international organizations does not mean that the agreement is internationalized so as to create obligations in international law. Since the commitments in the MOA-AD were not addressed to States, not to give legal effect to such commitments would not be detrimental to the security of international intercourse - to the trust and confidence essential in the relations among States. In one important respect, the circumstances surrounding the MOAAD are closer to that of Burkina Faso wherein, as already discussed, the Mali President's statement was not held to be a binding unilateral declaration by the ICJ. As in that case, there was also nothing to hinder the Philippine panel, had it really been its intention to be bound to other States, to manifest that intention by formal agreement. Here, that formal agreement would have come about by the inclusion in the MOA-AD of a clear commitment to be legally bound to the international community, not just the MILF, and by an equally clear indication that the signatures of the participating statesrepresentatives would constitute an acceptance of that commitment. Entering into such a formal agreement would not have resulted in a

loss of face for the Philippine government before the international community, which was one of the difficulties that prevented the French Government from entering into a formal agreement with other countries. That the Philippine panel did not enter into such a formal agreement suggests that it had no intention to be bound to the international community. On that ground, the MOA-AD may not be considered a unilateral declaration under international law. The MOA-AD not being a document that can bind the Philippines under international law notwithstanding, respondents' almost consummated act of guaranteeing amendments to the legal framework is, by itself, sufficient to constitute grave abuse of discretion. The grave abuse lies not in the fact that they considered, as a solution to the Moro Problem, the creation of a state within a state, but in their brazen willingness to guarantee that Congress and the sovereign Filipino people would give their imprimatur to their solution. Upholding such an act would amount to authorizing a usurpation of the constituent powers vested only in Congress, a Constitutional Convention, or the people themselves through the process of initiative, for the only way that the Executive can ensure the outcome of the amendment process is through an undue influence or interference with that process. The sovereign people may, if it so desired, go to the extent of giving up a portion of its own territory to the Moros for the sake of peace, for it can change the Constitution in any it wants, so long as the change is not inconsistent with what, in international law, is known as Jus Cogens.184 Respondents, however, may not preempt it in that decision. SUMMARY The petitions are ripe for adjudication. The failure of respondents to consult the local government units or communities affected constitutes a departure by respondents from their mandate under E.O. No. 3. Moreover, respondents exceeded their authority by the mere act of guaranteeing amendments to the Constitution. Any alleged violation of the Constitution by any branch of government is a proper matter for judicial review.

As the petitions involve constitutional issues which are of paramount public interest or of transcendental importance, the Court grants the petitioners, petitioners-in-intervention and intervening respondents the requisite locus standi in keeping with the liberal stance adopted in David v. Macapagal-Arroyo. Contrary to the assertion of respondents that the non-signing of the MOA-AD and the eventual dissolution of the GRP Peace Panel mooted the present petitions, the Court finds that the present petitions provide an exception to the "moot and academic" principle in view of (a) the grave violation of the Constitution involved; (b) the exceptional character of the situation and paramount public interest; (c) the need to formulate controlling principles to guide the bench, the bar, and the public; and (d) the fact that the case is capable of repetition yet evading review. The MOA-AD is a significant part of a series of agreements necessary to carry out the GRP-MILF Tripoli Agreement on Peace signed by the government and the MILF back in June 2001. Hence, the present MOA-AD can be renegotiated or another one drawn up that could contain similar or significantly dissimilar provisions compared to the original. The Court, however, finds that the prayers for mandamus have been rendered moot in view of the respondents' action in providing the Court and the petitioners with the official copy of the final draft of the MOA-AD and its annexes. The people's right to information on matters of public concern under Sec. 7, Article III of the Constitution is in splendid symmetry with the state policy of full public disclosure of all its transactions involving public interest under Sec. 28, Article II of the Constitution. The right to information guarantees the right of the people to demand information, while Section 28 recognizes the duty of officialdom to give information even if nobody demands. The complete and effective exercise of the right to information necessitates that its complementary provision on public disclosure derive the same self-executory nature, subject only to reasonable safeguards or limitations as may be provided by law. The contents of the MOA-AD is a matter of paramount public concern

involving public interest in the highest order. In declaring that the right to information contemplates steps and negotiations leading to the consummation of the contract, jurisprudence finds no distinction as to the executory nature or commercial character of the agreement. An essential element of these twin freedoms is to keep a continuing dialogue or process of communication between the government and the people. Corollary to these twin rights is the design for feedback mechanisms. The right to public consultation was envisioned to be a species of these public rights. At least three pertinent laws animate these constitutional imperatives and justify the exercise of the people's right to be consulted on relevant matters relating to the peace agenda. One, E.O. No. 3 itself is replete with mechanics for continuing consultations on both national and local levels and for a principal forum for consensus-building. In fact, it is the duty of the Presidential Adviser on the Peace Process to conduct regular dialogues to seek relevant information, comments, advice, and recommendations from peace partners and concerned sectors of society. Two, Republic Act No. 7160 or the Local Government Code of 1991 requires all national offices to conduct consultations before any project or program critical to the environment and human ecology including those that may call for the eviction of a particular group of people residing in such locality, is implemented therein. The MOA-AD is one peculiar program that unequivocally and unilaterally vests ownership of a vast territory to the Bangsamoro people, which could pervasively and drastically result to the diaspora or displacement of a great number of inhabitants from their total environment. Three, Republic Act No. 8371 or the Indigenous Peoples Rights Act of 1997 provides for clear-cut procedure for the recognition and delineation of ancestral domain, which entails, among other things, the observance of the free and prior informed consent of the Indigenous Cultural Communities/Indigenous Peoples. Notably, the statute does not grant the Executive Department or any government agency the power to delineate and recognize an ancestral domain claim by mere agreement or compromise.

The invocation of the doctrine of executive privilege as a defense to the general right to information or the specific right to consultation is untenable. The various explicit legal provisions fly in the face of executive secrecy. In any event, respondents effectively waived such defense after it unconditionally disclosed the official copies of the final draft of the MOA-AD, for judicial compliance and public scrutiny. In sum, the Presidential Adviser on the Peace Process committed grave abuse of discretion when he failed to carry out the pertinent consultation process, as mandated by E.O. No. 3, Republic Act No. 7160, and Republic Act No. 8371. The furtive process by which the MOA-AD was designed and crafted runs contrary to and in excess of the legal authority, and amounts to a whimsical, capricious, oppressive, arbitrary and despotic exercise thereof. It illustrates a gross evasion of positive duty and a virtual refusal to perform the duty enjoined. The MOA-AD cannot be reconciled with the present Constitution and laws. Not only its specific provisions but the very concept underlying them, namely, the associative relationship envisioned between the GRP and the BJE, are unconstitutional, for the concept presupposes that the associated entity is a state and implies that the same is on its way to independence. While there is a clause in the MOA-AD stating that the provisions thereof inconsistent with the present legal framework will not be effective until that framework is amended, the same does not cure its defect. The inclusion of provisions in the MOA-AD establishing an associative relationship between the BJE and the Central Government is, itself, a violation of the Memorandum of Instructions From The President dated March 1, 2001, addressed to the government peace panel. Moreover, as the clause is worded, it virtually guarantees that the necessary amendments to the Constitution and the laws will eventually be put in place. Neither the GRP Peace Panel nor the President herself is authorized to make such a guarantee. Upholding such an act would amount to authorizing a usurpation of the constituent powers vested only in Congress, a Constitutional Convention, or the people themselves through the process of initiative, for the only way that the Executive can ensure the outcome of the amendment process is through an

undue influence or interference with that process. While the MOA-AD would not amount to an international agreement or unilateral declaration binding on the Philippines under international law, respondents' act of guaranteeing amendments is, by itself, already a constitutional violation that renders the MOA-AD fatally defective. WHEREFORE, respondents' motion to dismiss is DENIED. The main and intervening petitions are GIVEN DUE COURSE and hereby GRANTED. The Memorandum of Agreement on the Ancestral Domain Aspect of the GRP-MILF Tripoli Agreement on Peace of 2001 is declared contrary to law and the Constitution. SO ORDERED. CONCHITA CARPIO MORALES Associate Justice WE CONCUR: REYNATO S. PUNO Chief Justice LEONARDO A. QUISUMBING Associate Justice ANTONIO T. CARPIO Associate Justice RENATO C. CORONA Associate Justice DANTE O. TINGA Associate Justice PRESBITERO J. VELASCO, JR. Associate Justice RUBEN T. REYES Associate Justice

CONSUELO YNARES-SANTIAGO A Justice

MA. ALICIA AUSTRIA-MARTINEZ A Justice

ADOLFO S. AZCUNA Associate J

MINITA V. CHICO-NAZARIO Associa ANTONIO EDUARDO B. NACHURA Justice

TERESITA J. LEONARDO-D CASTRO Associate Justice

ARTURO D. BRION Associate Justice

CERTIFICATION Pursuant to Section 13, Article VIII of the Constitution, it is hereby certified that the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of the Court. REYNATO S. PUNO Chief Justice Separate Concurring Opinion - C.J. Puno, J. Ynares-Santiago, J. Carpio Separate Concurring and Dissenting Opinion - J. Leonardo-De Castro, J. Brion Separate Opinion - J. Azcuna, J. Tinga, J. Chico-Nazario, J. Reyes Dissenting Opinion - J. Velasco, Jr., J. Nachura Footnotes
1

Eric Gutierrez and Abdulwahab Guialal, The Unfinished Jihad: The Moro Islamic Liberation Front and Peace in Mindanao in Rebels, Warlords and Ulama: A Reader on Muslim Separatism and the War in Southern Philippines 275 (1999).
2

Memorandum of Respondents dated September 24, 2008, p. 10.

Memorandum of Respondents dated September 24, 2008, pp. 1011.

4

Vide Salah Jubair, The Long Road to Peace: Inside the GRP-MILF Peace Process 35-36 (2007).
5

Memorandum of Respondents dated September 24, 2008, p. 12.

Vide Salah Jubair, The Long Road to Peace: Inside the GRP-MILF Peace Process 40-41 (2007).

Composed of its Chairperson, Sec. Rodolfo Garcia, and members, Atty. Leah Armamento, Atty. Sedfrey Candelaria, with Mark Ryan Sullivan as Secretariat head.
8

Represented by Governor Jesus Sacdalan and/or Vice-Governor Emmanuel Piol.

9

Rollo (G.R. No. 183591), pp. 3-33.

10

Supplement to Petition (with motion for leave) of August 11, 2008, rollo (G.R. No. 183591), pp. 143-162.
11

Rollo (G.R. No. 183752), pp. 3-28. Represented by Mayor Celso L. Lobregat.

12

13

Rollo (G.R. No. 183591), pp. 132-135; rollo (G.R. No. 183752), pp. 68-71.
14

Rollo (G.R. No. 183591), pp. 130-131; rollo (G.R. No. 183752), pp. 66-67.
15

Rollo (G.R. No. 183752), pp. 173-246. Represented by Mayor Lawrence Lluch Cruz. Represented by Governor Rolando Yebes.

16

17

18

Namely, Seth Frederick Jaloslos, Fernando Cabigon, Jr., Uldarico Mejorada II, Edionar Zamoras, Edgar Baguio, Cedric Adriatico, Felixberto Bolando, Joseph Brendo Ajero, Norbideiri Edding, Anecito Darunday, Angelica Carreon, and Luzviminda Torrino.
19

Rollo (G.R. No. 183951), pp. 3-33. Rollo (G.R. No. 183962), pp. 3- 20. Represented by Mayor Cherrylyn Santos-Akbar. Represented by Gov. Suharto Mangudadatu. Represented by Mayor Noel Deano.

20

21

22

23

24

Rollo (G.R. No. 183591), pp. 451-453.

25

R.A. No. 6734, as amended by R.A. 9054 entitled An Act to Strengthen and Expand the organic act for the Autonomous Region in Muslim Mindanao, Amending for the purpose republic act no. 6734, entitled an act of providing for the autonomous region in muslim mindanao, as amended.
26

R.A. No. 8371, An act to recognize, protect and promote the rights of indigenous cultural communities/indigenous peoples, creating a national commission on indigenous peoples, establishing implementing mechanisms, appropriating funds therefor, and for other purposes, October 29, 1997.
27

Cesar Adib Majul, The General Nature of Islamic Law and its Application in the Philippines, lecture delivered as part of the Ricardo Paras Lectures, a series jointly sponsored by the Commission on Bar Integration of the Supreme Court, the Integrated Bar of the Philippines and the U.P. Law Center, September 24, 1977.
28

Ibid., vide M.A. Muqtedar Khan Ph.D., immigrant American Muslims and the Moral Dilemmas of Citizenship, http://www.islamfortoday.com/khan04.htm, visited on September 18, 2008, and Syed Shahabuddin, Muslim World and the contemporary Ijma' on rules of governance - ii, http://www.milligazette.com/Archives/2004/01-15May04-PrintEdition/0105200471.htm, visited on September 18, 2008.
29

MOA-AD Terms of Reference. MOA-AD, Concepts and Principles, par. 1.

30

31

A traditional Muslim historical account of the acts of Shariff Kabungsuwan is quoted by historian Cesar Adib Majul in his book, Muslims in the Philippines (1973): After a time it came to pass that Mamalu, who was the chief man next to Kabungsuwan, journeyed to Cotabato. He found there that many of the people had ceased to regard the teachings of the Koran and had fallen into evil ways. Mamamlu sent to Kabungsuwan word of these things.

Kabungsuwan with a portion of his warriors went from Malabang to Cotabato and found that the word sent to him by Mamamlu was true. Then he assembled together all the people. Those of them, who had done evilly and disregarded the teachings of the Koran thenceforth, he drove out of the town into the hills, with their wives and children. Those wicked one who were thus cast out were the beginnings of the tribes of the Tirurais and Manobos, who live to the east of Cotabato in the country into which their evil forefathers were driven. And even to this day they worship not God; neither do they obey the teachings of the Koran . . . But the people of Kabungsuwan, who regarded the teachings of the Koran and lived in fear of God, prospered and increased, and we Moros of today are their descendants. (Citation omitted, emphasis supplied).
32

Id., par. 2. Id., par. 3. Id., par. 4.

33

34

35

Francisco L. Gonzales, Sultans of a Violent Land, in Rebels, Warlords and Ulama: A Reader on Muslim Separatism and the War in Southern Philippines 99, 103 (1999).
36

The Charter of the Assembly of First Nations, the leading advocacy group for the indigenous peoples of Canada, adopted in 1985, begins thus: "WE THE CHIEFS OF THE INDIAN FIRST NATIONS IN CANADA HAVING DECLARED: THAT our peoples are the original peoples of this land having been put here by the Creator; x x x."
37

Id., par. 6. MOA-AD, Territory, par. 1. Id., par. 2(c). Id., par. 2(d).

38

39

40

41

Id., par. 2(e). Id., par. 2(f). Id., par, 2(g)(1). Id., par. 2(h). Id., par. 2(i). MOA-AD, Resources, par. 4. Ibid. Id., par. 5. Id., par. 6. Id., par. 7. Id., par. 9. MOA-AD, Governance, par. 3.

42

43

44

45

46

47

48

49

50

51

52

53

"IN WITNESS WHEREOF, the undersigned, being the representatives of the Parties[,] hereby affix their signatures."
54

Vide 1987 Constitution, Article VIII, Section 1. Vide Muskrat v. US, 219 US 346 (1911). Flast v. Cohen, 88 S.Ct. 1942, 1950 (1968).

55

56

57

Didipio Earth Savers' Multi-Purpose Association, Incorporated (DESAMA) v. Gozun, G.R. No. 157882, March 30, 2006, 485 SCRA 286.
58

Vide U.S. v. Muskrat, 219 U.S. 346, 357 (1902). Guingona, Jr. v. Court of Appeals, 354 Phil. 415, 427-428 (1998). Francisco, Jr. v. House of Representatives, 460 Phil. 830, 901-902

59

60

(2003) (citation omitted).

61

Vide Warth v. Seldin, 422 US 490, 511 (1975). Vide id. at 526. Solicitor General's Comment to G.R. No. 183752, pp. 9-11. MOA-AD, pp. 3-7, 10. 391 Phil. 43 (2000). Id. at 107-108. 530 US 290 (2000). Id. at 292. 505 U.S. 144 (1992). Id. at 175.

62

63

64

65

66

67

68

69

70

71

Although only one petition is denominated a petition for certiorari, most petitions pray that the MOA-AD be declared unconstitutional/null and void.
72

Vide Rules of Court, Rule 65, Secs. 1 and 2. Vide Rules of Court, Rule 65, Sec. 3. Taada v. Angara, 338 Phil. 546, 575 (1997).

73

74

75

Entitled Defining Policy and Administrative Structure for Government's Peace Efforts which reaffirms and reiterates Executive Order No. 125 of September 15, 1993.
76

E.O. No. 3, (2001), Sec. 1. Vide Taada v. Angara, supra note 74. Baker v. Carr, 369 U.S. 186 (1962).

77

78

79

Vicente V. Mendoza , Judicial Review of Constitutional Questions 137 (2004).

80

Francisco, Jr. v. The House of Representatives, 460 Phil. 830, 896 (2003).
81

David v. Macapagal-Arroyo, G.R. No. 171396, May 3, 2006, 489 SCRA 160, 223.
82

Kilosbayan, Inc. v. Morato, 320 Phil. 171 (1995). Macasiano v. NHA, G.R. No. 107921, July 1, 1993, 224 SCRA 236.

83

84

Del Mar v. Phil. Amusement and Gaming Corp., 400 Phil. 307, 328329 (2000) citing Phil. Constitution Ass'n., Inc. v. Mathay, et al., 124 Phil. 890 (1966).
85

Vide NAACP v. Alabama, 357 U.S. 449 (1958). Francisco, Jr. v. The House of Representatives, supra note 80.

86

87

Province of Batangas v. Romulo, G.R. No. 152774, May 27, 2004, 429 SCRA 736.
88

Firestone Ceramics, Inc. v. Court of Appeals, 372 Phil. 401 (1999) citing Gibson v. Judge Revilla, 180 Phil. 645 (1979).
89

Supra note 81. Integrated Bar of the Phils. v. Hon. Zamora, 392 Phil. 618 (2000). Tatad v. Secretary of Energy, 346 Phil. 321 (1997). Vide Compliance of September 1, 2008 of respondents. Vide Manifestation of September 4, 2008 of respondents. Supra note 81. Id. citing Province of Batangas v. Romulo, supra note 87. Id. citing Lacson v. Perez, 410 Phil. 78 (2001).

90

91

92

93

94

95

96

97

Id. citing Province of Batangas v. Romulo, supra note 87.

98

Id. citing Albaa v. Comelec, 478 Phil. 941 (2004); Chief Supt. Acop v. Guingona Jr., 433 Phil. 62 (2002); SANLAKAS v. Executive Secretary Reyes, 466 Phil. 482 (2004).
99

US v. W.T. Grant Co., 345 U.S. 629 (1953); US v. Trans-Missouri Freight Assn, 166 U.S. 290, 308-310 (1897); Walling v. Helmerich & Payne, Inc., 323 U.S. 37, 43 (1944); Gray v. Sanders, 372 U.S. 368, 376 (1963); Defunis v. Odegaard, 416 U.S. 312 (1974).
100

Supra note 87. G.R. No. 178920, October 15, 2007, 536 SCRA 290. Chavez v. PCGG, 366 Phil. 863, 871 (1999). G.R. No. 178830, July 14, 2008. Supra note 98.

101

102

103

104

105

Ortega v. Quezon City Government, G.R. No. 161400, September 2, 2005, 469 SCRA 388.
106

Alunan III v. Mirasol, 342 Phil. 476 (1997); Viola v. Alunan III, 343 Phil. 184 (1997); Chief Superintendent Acop v. Guingona, Jr., supra note 98; Roble Arrastre, Inc. v. Villaflor, G.R. No. 128509, August 22, 2006, 499 SCRA 434, 447.
107

Constitution, Article III, Sec. 7. 80 Phil. 383 (1948).

108

109

Legaspi v. Civil Service Commission, G.R. No. L-72119, May 29, 1987, 150 SCRA 530.
110

162 Phil. 868 (1976). Baldoza v. Dimaano, supra at 876. Legaspi v. Civil Service Commission, supra note 109.

111

112

113

Chavez v. PCGG, 360 Phil 133, 164 (1998).

114

In Legaspi v. Civil Service Commission, supra note 109 at 541, it was held that: In determining whether or not a particular information is of public concern there is no rigid test which can be applied. `Public concern' like `public interest' is a term that eludes exact definition. Both terms embrace a broad spectrum of subjects which the public may want to know, either because these directly affect their lives, or simply because such matters naturally arouse the interest of an ordinary citizen. In the final analysis, it is for the courts to determine on a case by case basis whether the matter at issue is of interest or importance, as it relates to or affects the public.
115

Respondents' Comment of August 4, 2008, p. 9. Subido v. Ozaeta, supra note 108.

116

117

Taada, et al. v. Hon. Tuvera, et al., 220 Phil. 422 (1985); Taada, v. Hon. Tuvera, 230 Phil. 528 (1986).
118

Legaspi v. Civil Service Commission, supra note 109.

119

Valmonte v. Belmonte, Jr., G.R. No. 74930, February 13, 1989, 170 SCRA 256.
120

Chavez v. PCGG, supra note 113; Chavez v. PCGG, supra note 102.
121

Bantay Republic Act or BA-RA 7941 v. Commission on Elections, G.R. 177271, May 4, 2007, 523 SCRA 1.
122

Chavez v. Public Estates Authority, 433 Phil. 506, 532-533 (2002).

123

Vide V Record, Constitutional Commission 26-28 (September 24, 1986) which is replete with such descriptive phrase used by Commissioner Blas Ople.
124

Constitution, Article II, Sec. 28.

125

Bernas, Joaquin, The 1987 Constitution of the Republic of the Philippines: A Commentary 100 (2003).
126

Vide Bernas, Joaquin, The Intent of the 1986 Constitution Writers 155 (1995).
127

Vide Chavez v. Public Estates Authority, supra note 122. V Record, Constitutional Commission 25 (September 24, 1986).

128

129

V Record, Constitutional Commission 28-29 (September 24, 1986). The phrase "safeguards on national interest" that may be provided by law was subsequently replaced by "reasonable conditions," as proposed by Commissioner Davide [vide V Record, Constitutional Commission 30 (September 24, 1986)].
130

In Chavez v. National Housing Authority, G.R. No. 164527, August 15, 2007, 530 SCRA 235, 331, the Court stated: x x x The duty to disclose covers only transactions involving public interest, while the duty to allow access has a broader scope of information which embraces not only transactions involving public interest, but any matter contained in official communications and public documents of the government agency. (Underscoring supplied)
131

Valmonte v. Belmonte, Jr., supra note 119.

132

V Record, Constitutional Commission 28, 30 (September 24, 1986).

133

Supra note 55. Executive Order No. 3 (2001), Sec. 3 (a). Executive Order No. 3 (2001), Sec. 4 (b). Respondents' Memorandum of September 24, 2008, p. 44. Executive Order No. 3 (2001), Sec. 5 (b), par. 6. Executive Order No. 3 (2001), Sec. 8, see also Sec. 10.

134

135

136

137

138

139

Cf. Garcia v. Board of Investments, G.R. No. 88637, September 7, 1989, 177 SCRA 374, 382-384 where it was held that the Omnibus Investment Code of 1987 mandates the holding of consultations with affected communities, whenever necessary, on the acceptability of locating the registered enterprise within the community.
140

In their Memorandum, respondents made allegations purporting to show that consultations were conducted on August 30, 2001 in Marawi City and Iligan City, on September 20, 2001 in Midsayap, Cotabato, and on January 18-19, 2002 in Metro Manila. (Memorandum of September 24, 2008, p. 13)
141

Cf. Chavez v. Public Estates Authority, supra note 120. Republic Act No. 7160, Sec. 2(c). Republic Act No. 7160, Sec. 27. 416 Phil. 438 (2001).

142

143

144

145

Id.; vide Alvarez v. PICOP Resources, Inc., G.R. No. 162243, November 29, 2006, 508 SCRA 498; Cf. Bangus Fry Fisherfolk v. Lanzanas, 453 Phil. 479 (2002).
146

Vide MOA-AD "Concepts and Principles," pars. 2 & 7 in relation to "Resources," par. 9 where vested property rights are made subject to the cancellation, modification and review by the Bangsamoro Juridical Entity.
147

Republic Act No. 8371 or "The Indigenous Peoples Rights Act of 1997," Sec. 16.
148

Id., Sec. 3 (g), Chapter VIII, inter alia.

149

Taada v. Tuvera, No. L-63915, December 29, 1986, 146 SCRA 446, 456.
150

C.I. Keitner and W.M. Reisman, Free Association: The United States Experience, 39 Tex. Int'l L.J. 1 (2003).
151

"The former Trust Territory of the Pacific Islands is made up of the

Caroline Islands, the Marshall Islands, and the Northern Mariana Islands, which extend east of the Philippines and northeast of Indonesia in the North Pacific Ocean." (Ibid.)
152

H. Hills, Free Association for Micronesia and the Marshall islands: A Political Status Model, 27 U. Haw. L. Rev. 1 (2004).
153

Henkin, et al., International Law: Cases and Materials, 2nd ed., 274 (1987).
154

Convention on Rights and Duties of States, Dec. 26, 1933, 49 Stat. 3097, 165 L.N.T.S. 19.
155

G.R. No. 158088, July 6, 2005, 462 SCRA 622, 632.

156

An Act to Strengthen and Expand the Organic Act for the Autonomous Region in Muslim Mindanao, Amending for the purpose Republic Act No. 6734, Entitled An Act Providing for the Autonomous Region in Muslim Mindanao,' as Amended, March 31, 2001.
157

An Act To Recognize, Protect And Promote The Rights Of Indigenous Cultural Communities/Indigenous Peoples, Creating A National Commission On Indigenous Peoples, Establishing Implementing Mechanisms, Appropriating Funds Therefor, And For Other Purposes, October 29, 1997.
158

90 Phil. 70, 73-74 (1951). 177 Phil. 160, 178-179 (1979). 2 S.C.R. 217 (1998). 999 U.N.T.S. 171 (March 23, 1976). 993 U.N.T.S. 3 (January 3, 1976).

159

160

161

162

163

League of Nations Official Journal, Special Supp. No. 3 (October 1920).

164

Lorie M. Graham, Resolving Indigenous Claims To SelfDetermination, 10 ILSA J. Int'l & Comp. L. 385 (2004). Vide S. James

Anaya, Superpower Attitudes Toward Indigenous Peoples And Group Rights, 93 Am. Soc'y Int'l L. Proc. 251 (1999): "In general, the term indigenous is used in association with groups that maintain a continuity of cultural identity with historical communities that suffered some form of colonial invasion, and that by virtue of that continuity of cultural identity continue to distinguish themselves from others."
165

Catherine J. Iorns, Indigenous Peoples And Self Determination: Challenging State Sovereignty, 24 Case W. Res. J. Int'l L. 199 (1992).
166

Federico Lenzerini, "Sovereignty Revisited: International Law And Parallel Sovereignty Of Indigenous Peoples," 42 Tex. Int'l L.J. 155 (2006). Vide Christopher J. Fromherz, Indigenous Peoples' Courts: Egalitarian Juridical Pluralism, Self-Determination, And The United Nations Declaration On The Rights Of Indigenous Peoples, 156 U. Pa. L. Rev. 1341 (2008): "While Australia and the United States made much of the distinction between self-government' and selfdetermination' on September 13, 2007, the U.S. statement to the UN on May 17, 2004, seems to use these two concepts interchangeably. And, indeed, under the DRIP [Declaration on the Rights of Indigenous Peoples], all three terms should be considered virtually synonymous. Self-determination under the DRIP means internal self-determination' when read in conjunction with Article 46, and self-government,' articulated in Article 4, is the core of the self-determination.'"
167

Defining The Approach And Administrative Structure For Government's Comprehensive Peace Efforts, September 15, 1993.
168

466 Phil. 482, 519-520 (2004). Constitution, Article VII, Sec. 18.

169

170

Kirsti Samuels, Post-Conflict Peace-Building And ConstitutionMaking, 6 Chi. J. Int'l L. 663 (2006).
171

Christine Bell, Peace Agreements: Their Nature And Legal Status, 100 Am. J. Int'l L. 373 (2006).
172

Constitution, Article X, Sections 15-21.

173

III Record, Constitutional Commission, 180 (August 11, 1986). 165 Phil. 303 (1976). Id. at 412. Id. at 413. G.R. No. 174153, October 25, 2006, 505 SCRA 160, 264-265. Constitution, Art. VII, Sec. 5.

174

175

176

177

178

179

Article VI, Section 25 (1) of the Constitution states as follows: "The Congress may not increase the appropriations recommended by the President for the operation of the Government as specified in the budget. The form, content, and manner of preparation of the budget shall be prescribed by law."
180

Prosecutor v. Kallon and Kamara [Case No. SCSL-2004-15AR72(E), SCSL-2004-16-AR72(E), March 13, 2004].
181

1974 I.C.J. 253, 1974 WL 3 (I.C.J.).

182

M. Janis and J. Noyes, International Law, Cases and Commentary, 3rd ed. 280 (2006).
183

1986 I.C.J. 554, 1986 WL 15621 (I.C.J.), December 22, 1986. Planas v. COMELEC, 151 Phil. 217, 249 (1973).

184