MERITT vs.

Government of the Philippine Islands Digested

MERITT vs. Government of the Philippine Islands 34 Phil 311 FACTS: It is a fact not disputed by counsel for the defendant that when the plaintiff, riding on a motorcycle, when an ambulance of the General Hospital struck the plaintiff in an intersection. By reason of the resulting collusion, the plaintiff was so severely injured that, according to Dr. Saleeby, he was suffering from a depression in the left parietal region, a wound in the same place and in the back part of his head, while blood issued from his nose and he was entirely unconscious. The marks revealed that he had one or more fractures of the skull and that the grey matter and brain had suffered material injury. Upon recovery the doctor noticed that the plaintiffs leg showed a contraction of an inch and a half and a curvature that made his leg very weak and painful at the point of the fracture. Examination of his head revealed a notable readjustment of the functions of the brain and nerves. The damages that the plaintiff got from the collision disabled him to do this work as a contractor and forced him to give up contracts he recently had. As the negligence which cause the collision is a tort committed by an agent or employee of the Government, the inquiry at once arises whether the Government is legally-liable for the damages resulting therefrom. The Philippine Legislature made an Act (Act No. 2457) that authorizes the plaintiff to bring suit against the GPI and authorizing the Attorney- General to appear in said suit. ISSUE: Whether or not the Government is legally-liable for the damages incurred by the plaintiff. RULING: No, the Government is not legally-liable for the damages incurred by the plaintiff. It being quiet clear that Act. No. 2457 does not operate to extend the Governments liability to any cause not previously recognized.

That according to paragraph 5 of Article 1903 of the Civil Code and the principle laid down in a decision, among others, of the May 18, 1904, in a damage case, the responsibility of the state is limited to that which it contracts through a special agent, duly empowered by a definite order or commission to perform some act or charged with some definite purpose which gives rise to the claim, and not where the claim is based on acts or omissions imputable to a public official charged with some administrative or technical office who can be held to the proper responsibility in the manner laid down by the law of civil responsibility. Consequently, the trial court in not so deciding and in sentencing the said entity to the payment of damages, caused by an official of the second class referred to, has by erroneous interpretation infringed the provisions of Articles 1902 and 1903 of the Civil Code. It is, therefore, evidence that the State (GPI) is only liable, according to the above quoted decisions of the Supreme Court of Spain, for the acts of its agents, officers and employees when they act as special agents within the meaning of paragraph 5 of Article 1903, supra, and that the chauffeur of the ambulance of the General Hospital was not such an agent. For the foregoing reasons, the judgment appealed from must be reversed, without costs in this instance. Whether the Government intends to make itself legally liable for the amount of damages above set forth, which the plaintiff has sustained by reason of the negligent acts of one of its employees, be legislative enactment and by appropriating sufficient funds therefore, we are not called upon to determine. This matter rests solely with the Legislature and not with the courts.

United States of America vs. Guinto 182 SCRA 644 FACTS: These cases have been consolidated because they all involve the doctrine of state immunity. In GR No. 76607, The private respondents are suing several officers of the US Air Force in Clark Air Base in connection with the bidding conducted by them for contracts for barber services in the said base which was won by a certain Dizon. The respondents wanted to cancel the award to the bid winner because they claimed that Dizon had included in his bid an area not included in the invitation to bid, and subsequently, to conduct a rebidding. In GR No. 79470, Fabian Genove filed a complaint for damages against petitioners Lamachia, Belsa, Cartalla and Orascion for his dismissal as cook in the US Air Force Recreation Center at Camp John Hay Air Station inBaguioCity. It had been ascertained after investigation, from the testimony of Belsa, Cartalla and Orascion, that Genove had poured urine into the soup stock used in cooking the vegetables served to the club customers. Lamachia, as club manager, suspended him and thereafter referred the case to a board of arbitrators conformably to the collective bargaining agreement between the center and its employees. The board unanimously found him guilty and recommended his dismissal. Genoves reaction was to file his complaint against the individual petitioners. In GR No. 80018, Luis Bautista, who was employed as a barracks boy in Cano O Donnell, an extension of Clark Air Bas, was arrested following a buy-bust operation conducted by the individual petitioners who are officers of the US Air Force and special agents of the Air Force Office of Special Investigators. On the basis of the sworn statements made by them, an information for violation of R.A. 6425, otherwise known as the Dangerous Drugs Act, was filed against Bautista in the RTC of Tarlac. Said officers testified against him at his trial. Bautista was dismissed from his employment. He then filed a complaint against the individual petitioners claiming that it was because of their acts that he was removed. In GR No. 80258, a complaint for damages was filed by the private respondents against the herein petitioners (except theUS), for injuries sustained by the plaintiffs as a result of the acts of the defendants. There is a conflict of factual allegations here. According to the plaintiffs, the defendants beat them up, handcuffed them and unleashed dogs on them which bit them in several parts of their bodies and caused extensive injuries to them. The defendants deny this and claim that plaintiffs were arrested for theft and were bitten by the dogs because they were struggling and resisting arrest. In a motion to dismiss the complaint, theUS and the individually named defendants argued that the suit was in effect a suit against theUS, which had not given its consent to be sued. ISSUE: Whether the defendants were also immune from suit under the RP-US Bases Treaty for acts done by them in the performance of their official duties. HELD: The rule that a State may not be sued without its consent is one of the generally accepted principles of international law that were have adopted as part of the law of our land. Even without such affirmation, we would still be bound by the generally accepted principles of international law under the doctrine of incorporation. Under this doctrine, as accepted by the majority of the states, such principles are deemed incorporated in the law of every civilized state as a condition and consequence of its membership in the society of nations. All states are sovereign equals and cannot assert jurisdiction over one another. While the doctrine appears to prohibit only suits against the state without its consent,

it is also applicable to complaints filed against officials of the states for acts allegedly performed by them in the discharge of their duties. The rule is that if the judgment against such officials will require the state itself to perform an affirmative act to satisfy the same, the suit must be regarded as against the state although it has not been formally impleaded. When the government enters into a contract, it is deemed to have descended to the level of the other contracting party and divested of its sovereign immunity from suit with its implied consent. In the case oUS, the customary law of international law on state immunity is expressed with more specificity in the RP-US Bases Treaty. There is no question that theUS, like any other state, will be deemed to have impliedly waived its non-suability if it has entered into a contract in its proprietory or private capacity. It is only when the contract involves its sovereign or governmental capacity that no such waiver may be implied. It is clear from a study of the records of GR No. 80018 that the petitioners therein were acting in the exercise of their official functions when they conducted the buy-bust operations against the complainant and thereafter testified against him at his trial. It follows that for discharging their duties as agents of theUS, they cannot be directly impleaded for acts imputable to their principal, which has not given its consent to be sued. As for GR No. 80018, the record is too meager to indicate what really happened. The needed inquiry first be made by the lower court so it may assess and resolve the conflicting claims of the parties on the basis of evidence that has yet to be presented at the trial. Ruling 1) US VS GUINTO (GR No 76607) The court finds the barbershops subject to the concessions granted by the US government to be commercial enterprises operated by private persons. The petitioners cannot plead any immunity from the complaint, the contract in question being decidedly commercial. Thus, the petition is DISMISSED and the lower court directed to proceed with the hearing and decision of the case. 2) US VS RODRIGO (GR No 79470) The restaurant services offered at the John Hay Station operated for profit as a commercial and not a government activity. The petitioners cannot invoke the doctrine of self immunity to justify the dismissal of the damage suit filed by Genove. Not even the US government can claim such immunity because by entering into the employment contract with Geneove in the discharge of its proprietary functions, it impliedly divested itself of its sovereign immunity from suit. Still, the court holds that the complaint against petitioners in the lower court be dismissed. There was nothing arbitrary about the proceedings in the dismissal of Genove, the petitioner acted quite properly in terminating the private respondents employment for his unbelievably nauseating act of polluting the soup stock with urine. 3) US VS CEBALLOS (GR No 80018) It was clear that the individually-named petitioners were acting in the exercise of their official functions when they conducted the buy-bust operation and thereafter testified against the complainant. For discharging their duties as agents of the United States, thay cannot be directly impleaded for acts imputable to their principal, which has not given its consent to be sued. The conclusion of the trial court that the answer filed by the special counsel of Clark Air Base was a submission of the US government to its jurisdiction is rejected. Express waiver cannot be made by a mere counsel of the government but must be effected through a dulyenacted statute. Neither does it come under the implied form of consent. Thus, the petition is granted and the civil case filed in the lower court dismissed. 4) US VS ALARCON VERGARA (GR No 80258) The contradictory factual allegations in this case need a closer study of what actually happened. The record were too meager to indicate that the defendants were really discharging their official duties or had actually exceeded their authority when the incident occurred. Only after the lower court shall have determined in what capacity the petitioners were acting will the court determine, if still necessary, if the doctrine of state immunity is applicable.

Tuesday, July 28, 2009

US Vs. Ruiz 136 SCRA 487
Facts: The usa had a naval base in subic, zambales. The base was one of those provided in the military bases agreement between phils. and the US. Respondent alleges that it won in the bidding conducted by the US for the constrcution of wharves in said base that was merely awarded to another group. For this reason, a suit for specific preformance was filed by him against the US. Issue: Whether the US naval base in bidding for said contracts exercise governmental functions to be able to invoke state immunity. Held: The traditional role of the state immunity excempts a state from being sued in the courts of another state without its consent or waiver. This rule is necessary consequence of the principle of indepemndence and equality of states. Howecer, the rules of international law are not petrified; they are continually and evolving and because the activities of states have multiplied. It has been necessary to distinguish them between sovereign and governmental acts and private, commercial and proprietory acts. the result is that state immunity now extends only to sovereign and governmental acts. The restrictive application of state immunity is proper only when the proceedings arise out of commercial transactions of the foreign sovereign. Its commercial activities of economic affairs. A state may be 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 conracts relates the exercise of its sovereign function. In this case, the project are integral part of the naval base which is devoted to the defense of both US and phils., indisputably, a function of the government of highest order, they are not utilized for , nor dedicated to commercial or business purposes.

Republic of Indonesia vs. James Vizon Digested

Republic of Indonesia vs. James Vizon G.R. No. 54705, June 26, 2003 FACTS: Petitioner, Republic of Indonesia entered into a Maintenance Agreement in August 1995 with respondent James Vinzon, sole proprietor of Vinzon Trade and Services. The Maintenance Agreement stated that respondent shall, for a consideration, maintain specified equipment at the Embassy Main Building, Embassy Annex Building and the Wisma Duta, the official residence of petitioner Ambassador Soeratmin. The equipments covered by the Maintenance Agreement are air conditioning units, generator sets, electrical facilities, water heaters, and water motor pumps. It is likewise stated therein that the agreement shall be effective for a period of four years and will renew itself automatically unless cancelled by either party by giving thirty days prior written notice from the date of expiry. Petitioners claim that sometime prior to the date of expiration of the said agreement, or before August 1999, they informed respondent that the renewal of the agreement shall be at the discretion of the incoming Chief of Administration, Minister Counsellor Azhari Kasim, who was expected to arrive in February 2000. When Minister Counsellor Kasim assumed the position of Chief of Administration in March 2000, he allegedly found respondents work and services unsatisfactory and not in compliance with the standards set in the Maintenance Agreement. Hence, the Indonesian Embassy terminated the agreement in a letter dated August 31, 2000. Petitioners claim, moreover, that they had earlier verbally informed respondent of their decision to terminate the agreement. On the other hand, respondent claims that the aforesaid termination was arbitrary and unlawful. Respondent filed a complaint against petitioners (RTC) of Makati, petitioners filed a Motion to Dismiss, alleging that the Republic of Indonesia, as a foreign sovereign State, has sovereign immunity from suit and cannot be sued as a party-defendant in the Philippines. The said motion further alleged that Ambassador Soeratmin and Minister Counsellor Kasim are diplomatic agents as defined under the Vienna Convention on Diplomatic Relations and therefore enjoy diplomatic immunity. In turn, respondent filed on March 20, 2001, an Opposition to the said motion alleging that the Republic of Indonesia has expressly waived its immunity from suit. He based this claim upon the following provision in the Maintenance Agreement.

ISSUE: Whether or not the Republic of Indonesia can be sued. RULING: The Supreme Court on the matter ruled that the republic of Indonesia cannot be deemed to have waived its immunity to suit. The existence alone of a paragraph in a contract stating that any legal action arising out of the agreement shall be settled according to the laws of the Philippines and by a specified court of the Philippines is not necessarily a waiver of sovereign immunity from suit. The aforesaid provision contains language not necessarily inconsistent with sovereign immunity. On the other hand, such provision may also be meant to apply where the sovereign party elects to sue in the local courts, or otherwise waives its immunity by any subsequent act. The applicability of Philippine laws must be deemed to include Philippine laws in its totality, including the principle recognizing sovereign immunity. Hence, the proper court may have no proper action, by way of settling the case, except to dismiss it. The Court stated that the upkeep of its furnishings and equipment is still part sovereign function of the State. A sovereign State does not merely establish a diplomatic mission and leave it at that; the establishment of a diplomatic mission encompasses its maintenance and upkeep. Hence, the State may enter into contracts with private entities to maintain the premises, furnishings and equipment of the embassy and the living quarters of its agents and officials. It is therefore clear that petitioner Republic of Indonesia was acting in pursuit of a sovereign activity when it entered into a contract with respondent for the upkeep or maintenance of the air conditioning units, generator sets, electrical facilities, water heaters, and water motor pumps of the Indonesian Embassy and the official residence of the Indonesian ambassador. The Supreme Court grants the petition and reversed the decision of the Court of Appeals. ` u a public official charged with some administrative or technical office who can be held to the proper responsibility in the manner laid down by the law of civil responsibility. Consequently, the trial court in not so deciding and in sentencing the said entity to the payment of damages, caused by an official of the second class referred to, has by erroneous interpretation infringed the provisions of Articles 1902 and 1903 of the Civil Code. It is, therefore, evidence that the State (GPI) is only liable, according to the above quoted decisions of the Supreme Court of Spain, for the acts of its agents, officers and employees when they act as special agents within the meaning of paragraph 5 of Article 1903, supra, and that the chauffeur of the ambulance of the General Hospital was not such an agent.

For the foregoing reasons, the judgment appealed from must be reversed, without costs in this instance. Whether the Government intends to make itself legally liable for the amount of damages above set forth, which the plaintiff has sustained by reason of the negligent acts of one of its employees, be legislative enactment and by appropriating sufficient funds therefore, we are not called upon to determine. This matter rests solely with the Legislature and not with the courts.

Republic of the Philippines SUPREME COURT Manila EN BANC G.R. No. L-6060 September 30, 1954

FERNANDO A. FROILAN, plaintiff-appellee, vs. PAN ORIENTAL SHIPPING CO., defendant-appellant, REPUBLIC OF THE PHILIPPINES, intervenor-appellee. Quisumbing, Sycip, Quisumbing and Salazar, for appellant. Ernesto Zaragoza for appellee. Hilarion U. Jarencio for the intervenor. PARAS, C.J.: The factual antecedents of this case are sufficiently recited in the brief filed by the intervenorappellee as follows: 1. On February 3, 1951, plaintiff-appellee, Fernando A. Froilan, filed a complaint against the defendant-appellant, Pan Oriental Shipping Co., alleging that he purchased from the Shipping Commission the vessel FS-197 for P200,000, paying P50,000 down and agreeing to pay the balance in installments; that to secure the payment of the balance of the purchase price, he executed a chattel mortgage of said vessel in favor of the Shipping Commission; that for various reason, among them the non-payment of the installments, the Shipping Commission took possession of said vessel and considered the contract of sale cancelled; that the Shipping Commission chartered and delivered said vessel to the defendant-appellant Pan Oriental Shipping Co. subject to the approval of the President of the Philippines; that he appealed the action of the Shipping Commission to the President of the Philippines and, in its meeting on August 25, 1950, the Cabinet restored him to all his rights under his original contract with the Shipping Commission; that he had repeatedly demanded from the Pan Oriental Shipping Co. the possession of the vessel in question but the latter refused to do so. He, therefore, prayed that, upon the approval of the bond accompanying his complaint, a writ of replevin be issued for the seizure of said vessel with all its equipment and appurtenances, and that after hearing, he be adjudged to have the rightful possession thereof (Rec. on App. pp. 28). 2. On February 3, 1951, the lower court issued the writ of replevin prayed for by Froilan and by virtue thereof the Pan Oriental Shipping Co. was divested of its possession of said vessel (Rec. on App. p. 47).

3. On March 1, 1951, Pan Oriental Shipping Co. filed its answer denying the right of Froilan to the possession of the said vessel; it alleged that the action of the Cabinet on August 25, 1950, restoring Froilan to his rights under his original contract with the Shipping Commission was null and void; that, in any event, Froilan had not complied with the conditions precedent imposed by the Cabinet for the restoration of his rights to the vessel under the original contract; that it suffered damages in the amount of P22,764.59 for wrongful replevin in the month of February, 1951, and the sum of P17,651.84 a month as damages suffered for wrongful replevin from March 1, 1951; it alleged that it had incurred necessary and useful expenses on the vessel amounting to P127,057.31 and claimed the right to retain said vessel until its useful and necessary expenses had been reimbursed (Rec. on App. pp. 8-53). 4. On November 10, 1951, after the leave of the lower court had been obtained, the intervenor-appellee, Government of the Republic of the Philippines, filed a complaint in intervention alleging that Froilan had failed to pay to the Shipping Commission (which name was later changed to Shipping Administration) the balance due on the purchase price of the vessel in question, the interest thereon, and its advances on insurance premium totalling P162,142.95, excluding the dry-docking expenses incurred on said vessel by the Pan Oriental Shipping Co.; that intervenor was entitled to the possession of the said vessel either under the terms of the original contract as supplemented by Froilan's letter dated January 28, 1949, or in order that it may cause the extrajudicial sale thereof under the Chattel Mortgage Law. It, therefore, prayed that Froilan be ordered to deliver the vessel in question to its authorized representative, the Board of Liquidators; that Froilan be declared to be without any rights on said vessel and the amounts he paid thereon forfeited or alternately, that the said vessel be delivered to the Board of Liquidators in order that the intervenor may have its chattel mortgage extrajudicially foreclosed in accordance with the provisions of the Chattel Mortgage Law; and that pending the hearing on the merits, the said vessel be delivered to it (Rec. on App. pp. 54-66). 5. On November 29, 1951, the Pan Oriental Shipping Co. filed an answer to the complaint in intervention alleging that the Government of the Republic of the Philippines was obligated to deliver the vessel in question to it by virtue of a contract of bare-boat charter with option to purchase executed on June 16, 1949, by the latter in favor of the former; it also alleged that it had made necessary and useful expenses on the vessel and claimed the right of retention of the vessel. It, therefore, prayed that, if the Republic of the Philippines succeeded in obtaining possession of the said vessel, to comply with its obligations of delivering to it (Pan Oriental Shipping co.) or causing its delivery by recovering it from Froilan (Rec. on App. pp. 69-81). 6. On November 29, 1951, Froilan tendered to the Board of Liquidators, which was liquidating the affairs of the Shipping Administration, a check in the amount of P162,576.96 in payment of his obligation to the Shipping Administration for the said vessel as claimed in the complaint in intervention of the Government of the Republic of the Philippines. The Board of Liquidators issued an official report therefor stating that it was a 'deposit pending the issuance of an order of the Court of First Instance of Manila' (Rec. on App. pp. 92-93). 7. On December 7, 1951, the Government of the Republic of the Philippines brought the matter of said payment and the circumstance surrounding it to the attention of the lower court "in order that they may be taken into account by this Honorable Court in

connection with the questions that are not pending before it for determination" (Rec. on App. pp. 82-86). 8. On February 3, 1952, the lower court held that the payment by Froilan of the amount of P162,576.96 on November 29, 1951, to the Board of Liquidators constituted a payment and a discharge of Froilan's obligation to the Government of the Republic of the Philippines and ordered the dismissal of the latter's complaint in intervention. In the same order, the lower court made it very clear that said order did not pre-judge the question involved between Froilan and the Oriental Shipping Co. which was also pending determination in said court (Rec. on App. pp. 92-93). This order dismissing the complaint in intervention, but reserving for future adjudication the controversy between Froilan and the Pan Oriental Shipping Co. has already become final since neither the Government of the Republic of the Philippines nor the Pan Oriental Shipping Co. had appealed therefrom. 9. On May 10, 1952, the Government of the Republic of the Philippines filed a motion to dismiss the counterclaim of the Pan Oriental Shipping Co. against it on the ground that the purpose of said counterclaim was to compel the Government of the Republic of the Philippines to deliver the vessel to it (Pan Oriental Shipping Co.) in the event that the Government of the Republic of the Philippines recovers the vessel in question from Froilan. In view, however, of the order of the lower court dated February 3, holding that the payment made by Froilan to the Board of Liquidators constituted full payment of Froilan's obligation to the Shipping Administration, which order had already become final, the claim of the Pan Oriental Shipping Co. against the Republic of the Philippines was no longer feasible, said counterclaim was barred by prior judgment and stated no cause of action. It was also alleged that movant was not subject to the jurisdiction of the court in connection with the counterclaim. (Rec. on App. pp. 94-97). This motion was opposed by the Pan Oriental Shipping Co. in its written opposition dated June 4, 1952 (Rec. on app. pp. 19-104). 10. In an order dated July 1, 1952, the lower court dismissed the counterclaim of the Pan Oriental Shipping Co. as prayed for by the Republic of the Philippines (Rec. on App. pp. 104-106). 11. It if from this order of the lower court dismissing its counterclaim against the Government of the Republic of the Philippines that Pan Oriental Shipping Co. has perfected the present appeal (Rec. on App. p. 107). The order of the Court of First Instance of Manila, dismissing the counterclaim of the defendant Pan Oriental Shipping Co., from which the latter has appealed, reads as follows: This is a motion to dismiss the counterclaim interposed by the defendant in its answer to the complaint in intervention. "The counterclaim states as follows: "COUNTERCLAIM "As counterclaim against the intervenor Republic of the Philippines, the defendant alleges:

"1. That the defendant reproduces herein all the pertinent allegations of the foregoing answer to the complaint in intervention "2. That, as shown by the allegations of the foregoing answer to the complaint in intervention, the defendant Pan Oriental Shipping Company is entitled to the possession of the vessel and the intervenor Republic of the Philippines is bound under the contract of charter with option to purchase it entered into with the defendant to deliver that possession to the defendant whether it actually has the said possession or it does not have that possession from the plaintiff Fernando A. Froilan and deliver the same to the defendant; "3. That, notwithstanding demand, the intervenor Republic of the Philippines has not to date complied with its obligation of delivering or causing the delivery of the vessel to the defendant Pan Oriental Shipping Company.
1wphl.nt

"RELIEF "WHEREFORE, the defendant respectfully prays that judgment be rendered ordering the intervenor Republic of the Philippines alternatively to deliver to the defendants the possession of the said vessel, or to comply with its obligation to the defendant or causing the delivery to the latter of the said vessel by recovering the same from plaintiff, with costs. "The defendant prays for such other remedy as the Court may deem just and equitable in the premises." The ground of the motion to dismiss are (a) That the cause of action is barred by prior judgment; (b) That the counterclaim states no cause of action; and (c) That this Honorable Court has no jurisdiction over the intervenor government of the Republic of the Philippines in connection with the counterclaim of the defendant Pan Oriental Shipping Co. The intervenor contends that the complaint in intervention having been dismissed and no appeal having been taken, the dismissal of said complaint is tantamount to a judgment. The complaint in intervention did not contain any claim whatsoever against the defendant Pan Oriental Shipping Co.; hence, the counterclaim has no foundation. The question as to whether the Court has jurisdiction over the intervenor with regard to the counterclaim, the Court is of the opinion that it has no jurisdiction over said intervenor. It appearing, therefore, that the grounds of the motion to dismiss are well taken, the counterclaim of the defendant is dismissed, without pronouncement as to costs. The defendant's appeal is predicated upon the following assignments of error: I. The lower court erred in dismissing the counterclaim on the ground of prior judgment.

II. The lower court erred in dismissing the counterclaim on the ground that the counterclaim had no foundation because made to a complaint in intervention that contained no claim against the defendant. III. The lower court erred in dismissing the counterclaim on the ground of alleged lack of jurisdiction over the intervenor Republic of the Philippines. We agree with appellant's contention that its counterclaim is not barred by prior judgment (order of February 8, 1952, dismissing the complaint in intervention), first, because said counterclaim was filed on November 29, 1951, before the issuance of the order invoked; and, secondly, because in said order of February 8, the court dismissed the complaint in intervention, "without, of course, precluding the determination of the right of the defendant in the instant case," and subject to the condition that the "release and cancellation of the chattel mortgage does not, however, prejudge the question involved between the plaintiff and the defendant which is still the subject of determination in this case." It is to be noted that the first condition referred to the right of the defendant, as distinguished from the second condition that expressly specified the controversy between the plaintiff and the defendant. That the first condition reserved the right of the defendant as against the intervenor, is clearly to be deduced from the fact that the order of February 8 mentioned the circumstance that "the question of the expenses of drydocking incurred by the defendant has been included in its counterclaim against the plaintiff," apparently as one of the grounds for granting the motion to dismiss the complaint in intervention. The defendant's failure to appeal from the order of February 8 cannot, therefore, be held as barring the defendant from proceeding with its counterclaim, since, as already stated, said order preserved its right as against the intervenor. Indeed, the maintenance of said right is in consonance with Rule 30, section 2, of the Rules of Court providing that "if a counterclaim has been pleaded by a defendant prior to the service upon him of the plaintiff's motion to dismiss, the action shall not be dismissed against the defendant's objection unless the counterclaim can remain pending for independent adjudication by the court." The lower court also erred in holding that, as the intervenor had not made any claim against the defendant, the latter's counterclaim had no foundation. The complaint in intervention sought to recover possession of the vessel in question from the plaintiff, and this claim is logically adverse to the position assumed by the defendant that it has a better right to said possession than the plaintiff who alleges in his complaint that he is entitled to recover the vessel from the defendant. At any rate a counterclaim should be judged by its own allegations, and not by the averments of the adverse party. It should be recalled that the defendant's theory is that the plaintiff had already lost his rights under the contract with the Shipping Administration and that, on the other hand, the defendant is relying on the charter contract executed in its favor by the intervenor which is bound to protect the defendant in its possession of the vessel. In other words, the counterclaim calls for specific performance on the part of the intervenor. As to whether this counterclaim is meritorious is another question which is not now before us. The other ground for dismissing the defendant's counterclaim is that the State is immune from suit. This is untenable, because by filing its complaint in intervention the Government in effect waived its right of nonsuability. The immunity of the state from suits does not deprive it of the right to sue private parties in its own courts. The state as plaintiff may avail itself of the different forms of actions open to private litigants. In short, by taking the initiative in an action against a

private party, the state surrenders its privileged position and comes down to the level of the defendant. The latter automatically acquires, within certain limits, the right to set up whatever claims and other defenses he might have against the state. The United States Supreme Court thus explains: "No direct suit can be maintained against the United States. But when an action is brought by the United States to recover money in the hands of a party who has a legal claim against them, it would be a very rigid principle to deny to him the right of setting up such claim in a court of justice, and turn him around to an application to Congress." (Sinco, Philippine Political Law, Tenth Ed., pp. 36-37, citing U. S. vs. Ringgold, 8 Pet. 150, 8 L. ed. 899.) It is however, contended for the intervenor that, if there was at all any waiver, it was in favor of the plaintiff against whom the complaint in intervention was directed. This contention is untenable. As already stated, the complaint in intervention was in a sense in derogation of the defendant's claim over the possession of the vessel in question. Wherefore, the appealed order is hereby reversed and set aside and the case remanded to the lower court for further proceedings. So ordered, without costs. Pablo, Padilla, Montemayor, Reyes, A., Jugo, Bautista Angelo, Concepcion, and Reyes, J.B.L., JJ., concur.

AMIGABLE VS. CUENCA [43 SCRA 360; G.R. No. L-26400; 29 Feb. 1972]
Saturday, January 31, 2009 Posted by Coffeeholic Writes Labels: Case Digests, Political Law

Facts:

Victoria Amigable is the registered owner of a particular lot.

At the back of her Transfer Certificate of Title (1924), there was no annotation in favor of the government of any right or interest in the property. Without prior expropriation or negotiated sale, the government used a portion of the lot for the construction of the Mango and Gorordo Avenues. On 1958, Amigables counsel wrote the President of the Philippines, requesting payment of the portion of the said lot. It was disallowed by the Auditor General in his 9thEndorsement. Petitioner then filed in the court a quo a complaint against the Republic of the Philippines and Nicolas Cuenca, in his capacity as Commissioner of Public Highways for the recovery of ownership and possession of the lot. According to the defendants, the action was premature because it was not filed first at the Office of the Auditor General. According to them, the right of action for the recovery of any amount had already prescribed, that the Government had not given its consent to be sued, and that plaintiff had no cause of action against the defendants.

Issue:

Whether or Not, under the facts of the case, appellant may

properly sue the government.

Held:

In the case of Ministerio v. Court of First Instance of Cebu, it

was held that when the government takes away property from a private landowner for public use without going through the legal process of expropriation or negotiated sale, the aggrieved party may properly maintain a suit against the government without violating the doctrine of governmental immunity from suit without its consent. In the case at bar, since no annotation in favor of the government appears at the back of the certificate of title and plaintiff has not executed any deed of conveyance of any portion of the lot to the government, then she remains the owner of the lot. She could then bring an action to recover possession of the land anytime, because possession is one of the attributes of ownership. However, since such action is not feasible at this time since the lot has been used for other purposes, the only relief left is for the government to make due compensationprice or value of the lot at the time of the taking.

Department of Agriculture vs. NLRC G.R. No. 104269, November 11, 1993
Sunday, January 25, 2009 Posted by Coffeeholic Writes Labels: Case Digests, Political Law

Facts:

Petitioner Department of Agriculture (DA) and

Sultan Security Agency entered into a contract for security services to be provided by the latter to the said governmental entity. Pursuant to their arrangements, guards were deployed by Sultan Security Agency in the various premises of the DA. Thereafter, several guards filed a complaint for underpayment of wages, nonpayment of 13th month pay, uniform allowances, night shift differential pay, holiday pay, and overtime pay, as well as for damages against the DA and the security agency. The Labor Arbiter rendered a decision finding the DA jointly and severally liable with the security agency for the payment of money claims of the complainant security guards. The DA and the security agency did not appeal the decision. Thus, the decision became final and executory. The Labor Arbiter issued a writ of execution to enforce and execute the judgment against the property of the DA and thesecurity agency. Thereafter, the City Sheriff levied on execution the motor vehicles of the DA.

Issue:

Whether or not the doctrine of non-suability of the State

applies in the case

Held: The basic postulate enshrined in the Constitution that the

State may not be sued without its consent 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. It is based on the very essence of sovereignty. A sovereign is exempt from suit based 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. The rule is not really absolute for it does not say that the State may not be sued under any circumstances. The State may at times be sued. The States consent may be given expressly or impliedly. Express consent may be made through a general law or a special law. Implied consent, on the other hand, is conceded when the State itself commences litigation, thus opening itself to a counterclaim, or when it enters into a contract. 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. But 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. 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 intobusiness contracts. It does not apply where the contract relates to the exercise of its sovereign functions. In the case, the DA 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 the complainant security guards clearly constitute money claims. Act No. 3083 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 327, as amended by PD 1145, the money claim must first be brought to the Commission on Audit.

Republic of the Philippines SUPREME COURT Manila FIRST DIVISION

G.R. No. L-52179 April 8, 1991 MUNICIPALITY OF SAN FERNANDO, LA UNION, petitioner vs. HON. JUDGE ROMEO N. FIRME, JUANA RIMANDO-BANIA, IAUREANO BANIA, JR., SOR MARIETA BANIA, MONTANO BANIA, ORJA BANIA, AND LYDIA R. BANIA, respondents. Mauro C. Cabading, Jr. for petitioner. Simeon G. Hipol for private respondent.

MEDIALDEA, J.:p This is a petition for certiorari with prayer for the issuance of a writ of preliminary mandatory injunction seeking the nullification or modification of the proceedings and the orders issued by the respondent Judge Romeo N. Firme, in his capacity as the presiding judge of the Court of First Instance of La Union, Second Judicial District, Branch IV, Bauang, La Union in Civil Case No. 107-BG, entitled "Juana Rimando Bania, et al. vs. Macario Nieveras, et al." dated November 4, 1975; July 13, 1976; August 23,1976; February 23, 1977; March 16, 1977; July 26, 1979; September 7, 1979; November 7, 1979 and December 3, 1979 and the decision dated October 10, 1979 ordering defendants Municipality of San Fernando, La Union and Alfredo Bislig to pay, jointly and severally, the plaintiffs for funeral expenses, actual damages consisting of the loss of earning capacity of the deceased, attorney's fees and costs of suit and dismissing the complaint against the Estate of Macario Nieveras and Bernardo Balagot. The antecedent facts are as follows:

Petitioner Municipality of San Fernando, La Union is a municipal corporation existing under and in accordance with the laws of the Republic of the Philippines. Respondent Honorable Judge Romeo N. Firme is impleaded in his official capacity as the presiding judge of the Court of First Instance of La Union, Branch IV, Bauang, La Union. While private respondents Juana Rimando-Bania, Laureano Bania, Jr., Sor Marietta Bania, Montano Bania, Orja Bania and Lydia R. Bania are heirs of the deceased Laureano Bania Sr. and plaintiffs in Civil Case No. 107-Bg before the aforesaid court. At about 7 o'clock in the morning of December 16, 1965, a collision occurred involving a passenger jeepney driven by Bernardo Balagot and owned by the Estate of Macario Nieveras, a gravel and sand truck driven by Jose Manandeg and owned by Tanquilino Velasquez and a dump truck of the Municipality of San Fernando, La Union and driven by Alfredo Bislig. Due to the impact, several passengers of the jeepney including Laureano Bania Sr. died as a result of the injuries they sustained and four (4) others suffered varying degrees of physical injuries. On December 11, 1966, the private respondents instituted a compliant for damages against the Estate of Macario Nieveras and Bernardo Balagot, owner and driver, respectively, of the passenger jeepney, which was docketed Civil Case No. 2183 in the Court of First Instance of La Union, Branch I, San Fernando, La Union. However, the aforesaid defendants filed a Third Party Complaint against the petitioner and the driver of a dump truck of petitioner. Thereafter, the case was subsequently transferred to Branch IV, presided over by respondent judge and was subsequently docketed as Civil Case No. 107-Bg. By virtue of a court order dated May 7, 1975, the private respondents amended the complaint wherein the petitioner and its regular employee, Alfredo Bislig were impleaded for the first time as defendants. Petitioner filed its answer and raised affirmative defenses such as lack of cause of action, non-suability of the State, prescription of cause of action and the negligence of the owner and driver of the passenger jeepney as the proximate cause of the collision. In the course of the proceedings, the respondent judge issued the following questioned orders, to wit: (1) Order dated November 4, 1975 dismissing the cross-claim against Bernardo Balagot; (2) Order dated July 13, 1976 admitting the Amended Answer of the Municipality of San Fernando, La Union and Bislig and setting the hearing on the affirmative defenses only with respect to the supposed lack of jurisdiction; (3) Order dated August 23, 1976 deferring there resolution of the grounds for the Motion to Dismiss until the trial; (4) Order dated February 23, 1977 denying the motion for reconsideration of the order of July 13, 1976 filed by the Municipality and Bislig for having been filed out of time; (5) Order dated March 16, 1977 reiterating the denial of the motion for reconsideration of the order of July 13, 1976;

(6) Order dated July 26, 1979 declaring the case deemed submitted for decision it appearing that parties have not yet submitted their respective memoranda despite the court's direction; and (7) Order dated September 7, 1979 denying the petitioner's motion for reconsideration and/or order to recall prosecution witnesses for cross examination. On October 10, 1979 the trial court rendered a decision, the dispositive portion is hereunder quoted as follows: IN VIEW OF ALL OF (sic) THE FOREGOING, judgment is hereby rendered for the plaintiffs, and defendants Municipality of San Fernando, La Union and Alfredo Bislig are ordered to pay jointly and severally, plaintiffs Juana Rimando-Bania, Mrs. Priscilla B. Surell, Laureano Bania Jr., Sor Marietta Bania, Mrs. Fe B. Soriano, Montano Bania, Orja Bania and Lydia B. Bania the sums of P1,500.00 as funeral expenses and P24,744.24 as the lost expected earnings of the late Laureano Bania Sr., P30,000.00 as moral damages, and P2,500.00 as attorney's fees. Costs against said defendants. The Complaint is dismissed as to defendants Estate of Macario Nieveras and Bernardo Balagot. SO ORDERED. (Rollo, p. 30) Petitioner filed a motion for reconsideration and for a new trial without prejudice to another motion which was then pending. However, respondent judge issued another order dated November 7, 1979 denying the motion for reconsideration of the order of September 7, 1979 for having been filed out of time. Finally, the respondent judge issued an order dated December 3, 1979 providing that if defendants municipality and Bislig further wish to pursue the matter disposed of in the order of July 26, 1979, such should be elevated to a higher court in accordance with the Rules of Court. Hence, this petition. Petitioner maintains that the respondent judge committed grave abuse of discretion amounting to excess of jurisdiction in issuing the aforesaid orders and in rendering a decision. Furthermore, petitioner asserts that while appeal of the decision maybe available, the same is not the speedy and adequate remedy in the ordinary course of law. On the other hand, private respondents controvert the position of the petitioner and allege that the petition is devoid of merit, utterly lacking the good faith which is indispensable in a petition for certiorari and prohibition. (Rollo, p. 42.) In addition, the private respondents stress that petitioner has not considered that every court, including respondent court, has the inherent power to amend and control its process and orders so as to make them conformable to law and justice. ( Rollo, p. 43.) The controversy boils down to the main issue of whether or not the respondent court committed grave abuse of discretion when it deferred and failed to resolve the defense of non-suability of the State amounting to lack of jurisdiction in a motion to dismiss.

In the case at bar, the respondent judge deferred the resolution of the defense of nonsuability of the State amounting to lack of jurisdiction until trial. However, said respondent judge failed to resolve such defense, proceeded with the trial and thereafter rendered a decision against the municipality and its driver. The respondent judge did not commit grave abuse of discretion when in the exercise of its judgment it arbitrarily failed to resolve the vital issue of non-suability of the State in the guise of the municipality. However, said judge acted in excess of his jurisdiction when in his decision dated October 10, 1979 he held the municipality liable for the quasi-delict committed by its regular employee. The doctrine of non-suability of the State is expressly provided for in Article XVI, Section 3 of the Constitution, to wit: "the State may not be sued without its consent." Stated in simple parlance, the general rule is that the State may not be sued except when it gives consent to be sued. Consent takes the form of express or implied consent. Express consent may be embodied in a general law or a special law. The standing consent of the State to be sued in case of money claims involving liability arising from contracts is found in Act No. 3083. A special law may be passed to enable a person to sue the government for an alleged quasi-delict, as in Merritt v. Government of the Philippine Islands (34 Phil 311). (see United States of America v. Guinto, G.R. No. 76607, February 26, 1990, 182 SCRA 644, 654.) Consent is implied when the government enters into business contracts, thereby descending to the level of the other contracting party, and also when the State files a complaint, thus opening itself to a counterclaim. (Ibid) Municipal corporations, for example, like provinces and cities, are agencies of the State when they are engaged in governmental functions and therefore should enjoy the sovereign immunity from suit. Nevertheless, they are subject to suit even in the performance of such functions because their charter provided that they can sue and be sued. (Cruz, Philippine Political Law, 1987 Edition, p. 39) A distinction should first be made between suability and liability. "Suability depends on the consent of the state to be sued, liability on the applicable law and the established facts. The circumstance that a state is suable does not necessarily mean that it is liable; on the other hand, it can never be held liable if it does not first consent to be sued. Liability is not conceded by the mere fact that the state has allowed itself to be sued. When the state does waive its sovereign immunity, it is only giving the plaintiff the chance to prove, if it can, that the defendant is liable." (United States of America vs. Guinto, supra, p. 659-660) Anent the issue of whether or not the municipality is liable for the torts committed by its employee, the test of liability of the municipality depends on whether or not the driver, acting in behalf of the municipality, is performing governmental or proprietary functions. As emphasized in the case of Torio vs. Fontanilla (G. R. No. L-29993, October 23, 1978. 85 SCRA 599, 606), the distinction of powers becomes important for purposes of determining the liability of the municipality for the acts of its agents which result in an injury to third persons. Another statement of the test is given in City of Kokomo vs. Loy, decided by the Supreme Court of Indiana in 1916, thus:

Municipal corporations exist in a dual capacity, and their functions are twofold. In one they exercise the right springing from sovereignty, and while in the performance of the duties pertaining thereto, their acts are political and governmental. Their officers and agents in such capacity, though elected or appointed by them, are nevertheless public functionaries performing a public service, and as such they are officers, agents, and servants of the state. In the other capacity the municipalities exercise a private, proprietary or corporate right, arising from their existence as legal persons and not as public agencies. Their officers and agents in the performance of such functions act in behalf of the municipalities in their corporate or individual capacity, and not for the state or sovereign power." (112 N.E., 994-995) ( Ibid, pp. 605-606.) It has already been remarked that municipal corporations are suable because their charters grant them the competence to sue and be sued. Nevertheless, they are generally not liable for torts committed by them in the discharge of governmental functions and can be held answerable only if it can be shown that they were acting in a proprietary capacity. In permitting such entities to be sued, the State merely gives the claimant the right to show that the defendant was not acting in its governmental capacity when the injury was committed or that the case comes under the exceptions recognized by law. Failing this, the claimant cannot recover. (Cruz, supra, p. 44.) In the case at bar, the driver of the dump truck of the municipality insists that "he was on his way to the Naguilian river to get a load of sand and gravel for the repair of San Fernando's municipal streets." (Rollo, p. 29.) In the absence of any evidence to the contrary, the regularity of the performance of official duty is presumed pursuant to Section 3(m) of Rule 131 of the Revised Rules of Court. Hence, We rule that the driver of the dump truck was performing duties or tasks pertaining to his office. We already stressed in the case of Palafox, et. al. vs. Province of Ilocos Norte, the District Engineer, and the Provincial Treasurer (102 Phil 1186) that "the construction or maintenance of roads in which the truck and the driver worked at the time of the accident are admittedly governmental activities." After a careful examination of existing laws and jurisprudence, We arrive at the conclusion that the municipality cannot be held liable for the torts committed by its regular employee, who was then engaged in the discharge of governmental functions . Hence, the death of the passenger tragic and deplorable though it may be imposed on the municipality no duty to pay monetary compensation. All premises considered, the Court is convinced that the respondent judge's dereliction in failing to resolve the issue of non-suability did not amount to grave abuse of discretion. But said judge exceeded his jurisdiction when it ruled on the issue of liability. ACCORDINGLY, the petition is GRANTED and the decision of the respondent court is hereby modified, absolving the petitioner municipality of any liability in favor of private respondents. SO ORDERED.

Narvasa, Cruz, Gancayco and Grio-Aquino, JJ., concur.

SUPREME COURT FIRST DIVISION MAXIMO CALALANG, Petitioner, -versus- G.R. No. 47800 December 2, 1940 A. D. WILLIAMS, ET AL., Respondents. x--------------------------------------------------x DECISION LAUREL, J.: Maximo Calalang, in his capacity as a private citizen and as a taxpayer of Manila, brought before this court this petition for a writ of prohibition against the respondents, A. D. Williams, as Chairman of the National Traffic Commission; Vicente Fragante, as Director of Public Works; Sergio Bayan, as Acting Secretary of Public Works and Communications; Eulogio Rodriguez, as Mayor of the City of Manila; and Juan Dominguez, as Acting Chief of Police of Manila. chanroblespublishingcompany It is alleged in the petition that the National Traffic Commission, in its resolution of July 17, 1940, resolved to recommend to the Director of Public Works and to the Secretary of Public Works and Communications that animal-drawn vehicles be prohibited from passing along Rosario Street extending from Plaza Calderon de la Barca to Dasmarias Street, from 7:30 a.m. to 12:30 p.m. and from 1:30 p.m. to 5:30 p.m.; and along Rizal Avenue extending from the railroad crossing at Antipolo Street to Echague Street, from 7 a.m. to 11 p.m., from a period of one year from the date of the opening of the Colgante Bridge to traffic; that the Chairman of the National Traffic Commission, on July 18, 1940 recommended to the Director of Public Works the adoption of the measure proposed in the resolution aforementioned, in pursuance of the provisions of Commonwealth Act No. 548 which authorizes said Director of Public Works, with the approval of the Secretary of Public Works and Communications, to promulgate rules and regulations to regulate and control the use of and traffic on national roads; that on August 2, 1940, the Director of Public Works, in his first indorsement to the Secretary of Public Works and Communications, recommended to the latter the approval of the recommendation made by the Chairman of the National Traffic Commission as aforesaid, with the modification that the closing of Rizal Avenue to traffic to animal-drawn vehicles be limited to the portion thereof extending from the railroad crossing at Antipolo Street to Azcarraga Street; that on August 10, 1940, the Secretary of Public Works and Communications, in his second indorsement addressed to the Director of Public Works, approved the

recommendation of the latter that Rosario Street and Rizal Avenue be closed to traffic of animal-drawn vehicles, between the points and during the hours as above indicated, for a period of one year from the date of the opening of the Colgante Bridge to traffic; that the Mayor of Manila and the Acting Chief of Police of Manila have enforced and caused to be enforced the rules and regulations thus adopted; that as a consequence of such enforcement, all animal-drawn vehicles are not allowed to pass and pick up passengers in the places abovementioned to the detriment not only of their owners but of the riding public as well. chanroblespublishingcompany It is contended by the petitioner that Commonwealth Act No. 548 by which the Director of Public Works, with the approval of the Secretary of Public Works and Communications, is authorized to promulgate rules and regulations for the regulation and control of the use of and traffic on national roads and streets is unconstitutional because it constitutes an undue delegation of legislative power. This contention is untenable. As was observed by this court in Rubi vs. Provincial Board of Mindoro (39 Phil, 660, 700), The rule has nowhere been better stated than in the early Ohio case decided by Judge Ranney, and since followed in a multitude of cases, namely: The true distinction therefore is between the delegation of power to make the law, which necessarily involves a discretion as to what it shall be, and conferring an authority or discretion as to its execution, to be exercised under and in pursuance of the law. The first cannot be done; to the latter no valid objection can be made. (Cincinnati, W. & Z. R. Co. vs. Commrs. Clinton County, 1 Ohio St., 88.) Discretion, as held by Chief Justice Marshall in Wayman vs. Southard (10 Wheat., 1) may be committed by the Legislature to an executive department or official. The Legislature may make decisions of executive departments or subordinate officials thereof, to whom it has committed the execution of certain acts, final on questions of fact. (U.S. vs. Kinkead, 248 Fed., 141.) The growing tendency in the decisions is to give prominence to the necessity of the case. chanroblespublishingcompany Section 1 of Commonwealth Act No. 548 reads as follows: SECTION 1. To promote safe transit upon, and avoid obstructions on, roads and streets designated as national roads by acts of the National Assembly or by executive orders of the President of the Philippines, the Director of Public Works, with the approval of the Secretary of Public Works and Communications, shall promulgate the necessary rules and regulations to regulate and control the use of and traffic on such roads and streets. Such rules and regulations, with the approval of the President, may contain provisions controlling or regulating the construction of buildings or other structures within a reasonable distance from along the national roads. Such roads may be temporarily closed to any or all classes of

traffic by the Director of Public Works and his duly authorized representatives whenever the condition of the road or the traffic thereon makes such action necessary or advisable in the public convenience and interest, or for a specified period, with the approval of the Secretary of Public Works and Communications. chanroblespublishingcompany The above provisions of law do not confer legislative power upon the Director of Public Works and the Secretary of Public Works and Communications. The authority therein conferred upon them and under which they promulgated the rules and regulations now complained of is not to determine what public policy demands but merely to carry out the legislative policy laid down by the National Assembly in said Act, to wit, to promote safe transit upon and avoid obstructions on, roads and streets designated as national roads by acts of the National Assembly or by executive orders of the President of the Philippines and to close them temporarily to any or all classes of traffic whenever the condition of the road or the traffic makes such action necessary or advisable in the public convenience and interest. The delegated power, if at all, therefore, is not the determination of what the law shall be, but merely the ascertainment of the facts and circumstances upon which the application of said law is to be predicated. To promulgate rules and regulations on the use of national roads and to determine when and how long a national road should be closed to traffic, in view of the condition of the road or the traffic thereon and the requirements of public convenience and interest, is an administrative function which cannot be directly discharged by the National Assembly. It must depend on the discretion of some other government official to whom is confided the duty of determining whether the proper occasion exists for executing the law. But it cannot be said that the exercise of such discretion is the making of the law. As was said in Lockes Appeal (72 Pa. 491): To assert that a law is less than a law, because it is made to depend on a future event or act, is to rob the Legislature of the power to act wisely for the public welfare whenever a law is passed relating to a state of affairs not yet developed, or to things future and impossible to fully know. The proper distinction the court said was this: The Legislature cannot delegate its power to make the law; but it can make a law to delegate a power to determine some fact or state of things upon which the law makes, or intends to make, its own action depend. To deny this would be to stop the wheels of government. There are many things upon which wise and useful legislation must depend which cannot be known to the law-making power, and, must, therefore, be a subject of inquiry and determination outside of the halls of legislation. (Field vs. Clark, 143 U. S. 649, 694; 36 L. Ed. 294.) In the case of People vs. Rosenthal and Osmea, G.R. Nos. 46076 and

46077, promulgated June 12, 1939, and in Pangasinan Transportation vs. The Public Service Commission, G.R. No. 47065, promulgated June 26, 1940, this Court had occasion to observe that the principle of separation of powers has been made to adapt itself to the complexities of modern governments, giving rise to the adoption, within certain limits, of the principle of subordinate legislation, not only in the United States and England but in practically all modern governments. Accordingly, with the growing complexity of modern life, the multiplication of the subjects of governmental regulations, and the increased difficulty of administering the laws, the rigidity of the theory of separation of governmental powers has, to a large extent, been relaxed by permitting the delegation of greater powers by the legislative and vesting a larger amount of discretion in administrative and executive officials, not only in the execution of the laws, but also in the promulgation of certain rules and regulations calculated to promote public interest. chanroblespublishingcompany The petitioner further contends that the rules and regulations promulgated by the respondents pursuant to the provisions of Commonwealth Act No. 548 constitute an unlawful interference with legitimate business or trade and abridge the right to personal liberty and freedom of locomotion. Commonwealth Act No. 548 was passed by the National Assembly in the exercise of the paramount police power of the state. chanroblespublishingcompany Said Act, by virtue of which the rules and regulations complained of were promulgated, aims to promote safe transit upon and avoid obstructions on national roads, in the interest and convenience of the public. In enacting said law, therefore, the National Assembly was prompted by considerations of public convenience and welfare. It was inspired by a desire to relieve congestion of traffic. which is, to say the least, a menace to public safety. Public welfare, then, lies at the bottom of the enactment of said law, and the state in order to promote the general welfare may interfere with personal liberty, with property, and with business and occupations. Persons and property may be subjected to all kinds of restraints and burdens, in order to secure the general comfort, health, and prosperity of the state (U.S. vs. Gomez Jesus, 31 Phil., 218). To this fundamental aim of our Government the rights of the individual are subordinated. Liberty is a blessing without which life is a misery, but liberty should not be made to prevail over authority because then society will fall into anarchy. Neither should authority be made to prevail over liberty because then the individual will fall into slavery. The citizen should achieve the required balance of liberty and authority in his mind through education and personal discipline, so that there may be established the resultant equilibrium, which means peace and order and happiness for all. The moment greater authority is conferred upon the government, logically so much is withdrawn from the residuum of

liberty which resides in the people. The paradox lies in the fact that the apparent curtailment of liberty is precisely the very means of insuring its preservation. chanroblespublishingcompany The scope of police power keeps expanding as civilization advances. As was said in the case of Dobbins vs. Los Angeles (195 U.S. 223, 238; 49 L. ed. 169), the right to exercise the police power is a continuing one, and a business lawful today may in the future, because of the changed situation, the growth of population or other causes, become a menace to the public health and welfare, and be required to yield to the public good. And in People vs. Pomar (46 Phil., 440), it was observed that advancing civilization is bringing within the police power of the state today things which were not thought of as being within such power yesterday. The development of civilization, the rapidly increasing population, the growth of public opinion, with an increasing desire on the part of the masses and of the government to look after and care for the interests of the individuals of the state, have brought within the police power many questions for regulation which formerly were not so considered. chanroblespublishingcompany The petitioner finally avers that the rules and regulations complained of infringe upon the constitutional precept regarding the promotion of social justice to insure the well-being and economic security of all the people. The promotion of social justice, however, is to be achieved not through a mistaken sympathy towards any given group. Social justice is neither communism, nor despotism, nor atomism, nor anarchy, but the humanization of laws and the equalization of social and economic forces by the State so that justice in its rational and objectively secular conception may at least be approximated. Social justice means the promotion of the welfare of all the people, the adoption by the Government of measures calculated to insure economic stability of all the competent elements of society, through the maintenance of a proper economic and social equilibrium in the interrelations of the members of the community, constitutionally, through the adoption of measures legally justifiable, or extraconstitutionally, through the exercise of powers underlying the existence of all governments on the time-honored principle of salus populi est suprema lex. chanroblespublishingcompany Social justice, therefore, must be founded on the recognition of the necessity of interdependence among divers and diverse units of a society and of the protection that should be equally and evenly extended to all groups as a combined force in our social and economic life, consistent with the fundamental and paramount objective of the state of promoting the health, comfort, and quiet of all persons, and of bringing about the greatest good to the greatest number. chanroblespublishingcompany IN VIEW OF THE FOREGOING, the Writ of Prohibition Prayed for is hereby denied, with costs against the petitioner. So ordered.

Avancea, C.J., Imperial, Diaz and Horrilleno, JJ., conc

VELMONTE VS BALMONTE170 SCRA 256 Facts: Ricardo Valmonte wrote Feliciano Belmonte Jr. on 4 June 1986, requesting to be "furnished with the list of names of the opposition members of (the) BatasangPambansa who were able to secure a clean loan of P2 million each on guaranty (sic)of Mrs. Imelda Marcos" and also to "be furnished with the certified true copies of the documents evidencing their loan. Expenses in connection herewith shall be borne by" Valmonte, et. al. Due to serious legal implications, President & General Manager Feliciano Belmonte, Jr. referred the letter to the Deputy General Counsel of the GSIS, Meynardo A. Tiro. Tiro replied that it is his opinion "that a confidential relationship exists between the GSIS and all those who borrow from it, whoever they may be; that the GSIS has a duty to its customers to preserve this confidentiality; and that it would not be proper for the GSIS to breach this confidentiality unless so ordered by the courts." On 20 June 1986, apparently not having yet received the reply of the Government Service and Insurance System (GSIS) Deputy General Counsel, Valmonte wrote Belmonte another letter, saying that for failure to receive a reply "(W)e are now considering ourselves free to do whatever action necessary within the premises to pursue our desired objective in pursuance of public interest." On 26 June 1986, Ricardo Valmonte, Oswaldo Carbonell, Doy Del Castillo, Rolando Bartolome, LeoObligar, Jun Gutierrez, Reynaldo Bagatsing, Jun "Ninoy" Alba, Percy Lapid, Rommel Corro, and Rolando Fadul filed a special civil action for mandamus with preliminary injunction invoke their right to information and pray that Belmonte be directed: (a) to furnish Valmonte, et. al. the list of the names of the Batasang Pambansa membersbelonging to the UNIDO and PDP Laban who were able to secure clean loans immediately before the February 7 election thru the intercession/marginal note of the then First Lady Imelda Marcos; and/or (b) to furnish petitioners with certified true copies of the documents evidencing their respective loans; and/or (c) to allow petitioners access to the public records for the subject information.

Issue: Whether Valmonte, et. al. are entitled as citizens and taxpayers to inquire upon GSIS records on behest loans given by the former First Lady Imelda Marcos toBatasang Pambansa members belonging to the UNIDO and PDP-Laban politicalparties. Held: The GSIS is a trustee of contributions from the government and its employees and the administrator of various insurance programs for the benefit of the latter. Undeniably, its funds assume a public character. More particularly, Secs. 5(b) and 46of PD 1146, as amended (the Revised Government Service Insurance Act of 1977),provide for annual appropriations to pay the contributions, premiums, interest and other amounts payable to GSIS by the government, as employer, as well as the obligations which the Republic of the Philippines assumes or guarantees to pay. Considering the nature of its funds, the GSIS is expected to manage its resources with utmost prudence and in strict compliance with the pertinent laws or rules and regulations. Thus, one of the reasons that prompted the revision of the old GSIS law(CA 186, as amended) was the necessity "to preserve at all times the actuarial solvency of the funds administered by the Systems [Second Whereas Clause, PD1146.] Consequently, as Feliciano Belmonte himself admits, the GSIS "is not supposed to grant 'clean loans.'" It is therefore the legitimate concern of the public to ensure that these funds are managed properly with the end in view of maximizing the benefits that accrue to the insured government employees. Moreover, the supposed borrowers were Members of the defunct Batasang Pambansa who themselves appropriated funds for the GSIS and were therefore expected to be the first to see to it that the GSIS performed its tasks with the greatest degree of fidelity and that all its transactions were above board. In sum, the public nature of the loanable funds of the GSIS and the public office held by the alleged borrowers make the information sought clearly a matter of public interest and concern. Still, Belmonte maintains that a confidential relationship exists between the GSIS and its borrowers. It is argued that a policy of confidentiality restricts the indiscriminate dissemination of information. Yet, Belmonte has failed to cite any law granting the GSIS the privilege of confidentiality as regards the

documents subject of the present petition. His position is apparently based merely on considerations of policy. The judiciary does not settle policy issues. The Court can only declare what the law is, and not what the law should be. Under our system of government, policy issues are within the domain of the political branches of the government, and of the people themselves as the repository of all State power.