Philippine Agila Satellite vs.

Trinidad Lichauco
Suits against officers
FACTS:
Petitioner Philippine Agila Satellite Inc. is a duly organized corporation, whose
President and Chief Executive Officer is co-petitioner Michael C.U. De Guzman.
PASI was established by a consortium of private telecommunications carriers
which in 1994 had entered into a Memorandum of Understanding with the
DOTC, through its then Secretary Jesus Garcia, concerning the planned launch
of a Philippine-owned satellite into outer space. The Philippine government,
through the DOTC, was tasked under the MOU to secure from the International
Telecommunication Union the required orbital slots and frequency assignments
for the Philippine satellite.
The government, together with PASI, coordinated through the International
Telecommunication Union two orbital slots, designated as 161 East Longitude
and 153 East Longitude, for Philippine satellites. PASI wrote then DOTC
Secretary Amado S. Lagdameo, Jr., seeking for official Philippine government
confirmation on the assignment of the two aforementioned Philippine orbital
slots to PASI for its satellites. Secretary Lagdameo, .Ir. replied in a letter
confirming "the Philippine Government's assignment of Philippine orbital slots
161E and 153E to PASI for its satellites."
PASI averred that after having secured the confirmation from the Philippine
government, it proceeded with preparations for the launching, operation and
management of its satellites, including the availment of loans, negotiation with
business partners and even made an initial payment to the french satellite
manufacturer. However, respondent Lichauco, then DOTC Undersecretary for
Communications, allegedly "embarked on a crusade to malign the name of
Michael de Guzman and sabotage the business of PASI."
Aggrieved by Lichaucos actions, PASI and De Guzman instituted a civil
complaint against Lichauco, by then the Acting Secretary of the DOTC. The
complaint, alleging three causes of action, was for injunction, declaration of
nullity of award, and damages.
First cause of action was to enjoin the award of orbital slot 153 because DOTC
already assigned the same orbital to PASI. Second was to declare the award of
the slot to an unknown bidder is void because Lichauco acted beyond her
authority. The third cause of action, for damages, imputed several acts to
Lichauco as part of her alleged "crusade" to malign the name of plaintiff De
Guzman and sabotage the business of PASI.

She rooted her prayer for the dismissal of the complaint primarily on the
grounds that the suit is a suit against the State which may not be sued without
its consent; that the complaint stated no cause of action; and that the
petitioners had failed to exhaust administrative remedies by failing to seek
recourse with the Office of the President.
ISSUE:
WON the suit is against the state.
RULING:
The hornbook rule is that a suit for acts done in the performance of official
functions against an officer of the government by a private citizen that would
result in a charge against or financial liability to the government must be
regarded as a suit against the State itself, although the latter has not been
formally impleaded. However, movement immunity from suit will not shield the
public official being sued if the government no longer has an interest to protect
in the outcome of a suit; or if the liability of the officer is personal because it
arises from a tortious act in the performance of his duties.
As earlier noted, the complaint alleges three causes of action against Lichauco:
one for injunction against her performing any act in relation to orbital slot
153East Longitude; one for declaration of nullity of award, seeking to nullify
the alleged award of orbital slot 153 East Longitude; and one for damages
against Lichauco herself.
As stated earlier, it is when the acts done in the performance of official
functions by an officer of the government will result in a charge against or
financial liability to the government that the complaint must be regarded as a
suit against the State itself. However, the distinction must also be raised
between where the government official concerned performs an act in his/her
official and jurisdictional capacity and where he performs an act that
constitutes grave abuse of discretion tantamount to lack of jurisdiction. In the
latter case, the Constitution itself assures the availability of judicial review, and
it is the official concerned who should be impleaded as the proper partydefendant or respondent.
As to the rst two causes of action, the Court ruled that the defense of state
immunity from suit do not apply since said causes of action cannot be properly
considered as suits against the State in constitutional contemplation. These
causes of action do not seek to impose a charge or nancial liability against the
State, but merely the nullification of state action. The prayers attached to

these two causes of action are for the revocation of the Notice of Bid and the
nullification of the purported award, nothing more. Had it been so that
petitioner additionally sought damages in relation to said causes of action, the
suit would have been considered as one against the State. Had the petitioner
impleaded the DOTC itself, an unincorporated government agency, and not
Lichauco herself, the suit would have been considered as one against the
State. But neither circumstance obtains in this case.
The doctrine, as summarized in Shauf v. Court of Appeals states: "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 state 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, such as the appropriation of the amount
needed to pay the damages awarded against them, the suit must be regarded
as against the state itself although it has not been formally impleaded. It must
be noted, however, that the rule is not so all encompassing as to be applicable
under all circumstances."
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 plaintiff.
As was clearly set forth by Justice Zaldivar in Director of the Bureau of
Telecommunications, et al. vs. Aligaen, etc., et al.: "In as much 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 ofcers 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 or 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.

E. Merritt Vs. Government of the Philippine Islands

Ponente: Trent
Topic: Express consent
FACTS:
Merritt, a contractor, met and accident by an ambulance of a government
hospital because of the negligence of the driver of the said ambulance. He
stayed in the hospital for more than two months. After the accident he was not
able to do the same things he used to do before and in fact cancelled a
contract to build a building. In order for Merritt to recover damages, he sought
to sue the government which later authorized Merritt to sue the government by
virtue of Act 2457 enacted by the legislature (An Act authorizing E. Merritt to
bring suit against the Government of the Philippine Islands and authorizing the
Attorney-General of said Islands to appear in said suit). The lower court then
determined the amount of damages and ordered the government to pay the
same.
ISSUE:
WON the government be held liable for the damages for the negligence of the
ambulance driver?
HELD:
NO. The fact that the state consented to be sued does not mean that the state
acknowledges its liablility. Based on the definition on who is an agent of the
state, in this case the driver of the ambulance is not acting in his authorized
capacity. Therefore he is not in that instant considered as an agent of the
state, thus the state is not liable.
Republic vs. Sadiganbayan (2006)
FACTS:
The Republic (petitioner) filed a Petition for Certiorari against the
Sandiganbayan (respondent), challenging the denial of the petitioners Motion
for Partial Summary Judgment in Civil Case No. 0033-F (the case under trial).
The Republic alleged that the respondent committed grave abuse of discretion
in denying the Motion.
Under Rule 65, Section 7 of the Rules of Court, the mere elevation of the case
to this [Supreme] Court through a Petition for Certiorari does not by itself
suspend the proceedings of the pending case, unless a temporary
restraining order or a writ of preliminary injunction has been issued
against the public respondent.

The SANDIGANBAYAN is hereby ORDERED, in light of the foregoing

Thus, during the pendency of the Petition for Certiorari, the petitioner also filed
an Urgent Motion for Issuance of Temporary Restraining Order and/or
Writ of Preliminary Injunction for the purpose of temporarily suspending
the proceedings of the case at hand, in order to prioritize the Petition for
Certiorari.
The burden is upon the petitioner to provide for meritorious grounds for the
issuance of the TRO or writ of preliminary injunction for the purpose of
suspending the proceedings of the case. However, the Court finds that the
petitioner failed to discharge the burden. The only ground on which it based its
Urgent Motion is the alleged futility of proceeding with the civil case. This
assertion is merely speculative, based only the supposition that the Petition
for Certiorari would be decided in its favor.
ISSUE:
WON, the Court shall grant the Urgent Motion for Issuance of a Temporary
Restraining Order and/or the Writ of Preliminary Injunction filed by the
petitioner.
HELD:
No. There is a marked absence of urgent necessity on the part of the petitioner
in filing the Urgent Motion. The motion was DENIED by the Court.
However, there are instances where even if there is no writ of preliminary
injunction or temporary restraining order issued by a higher court, it would
be proper for a lower court or court of origin to suspend its proceedings on the
precept of judicial courtesy.
Judicial Courtesy is due respect for the Supreme Court, wherein practical
and ethical considerations should have prompted the appellate court to
wait for the final determination of the petition before taking cognizance of
the trial case and trying to render moot exactly what was before this Court.
However, the rule on "judicial courtesy" applies only where "there is a strong
probability that the issues before the higher court would be rendered moot and
moribund as a result of the continuation of the proceedings in the lower court
[or court of origin]." Thus in the absence of this strong probability, as in this

discussion, to continue the proceedings in Civil Case No. 0033-F, as well as in

all other cases where its interlocutory orders are on challenge before this Court
but no Temporary Restraining Order or Writ of Preliminary Injunction has been
issued and there is no strong probability that the issues raised before this
Court would be rendered moot.

EPG Construction Co. vs. Vigilar (354 SCRA 566)

FACTS:
In 1983, the Ministry of Human Settlement (MHS), through the BLISS
Development Corporation, initiated a housing project on a government
property along the east bank of Manggahan Floodway in Pasig City. The MHS
entered into a Memorandum of Agreement (MOA) with Ministry of Public Works
and Highways (MPWH) where the latter undertook to develop the housing site
and construct thereon 145 housing units.
By virtue of the MOA, MPWH forged individual contracts with petitioners EPG,
Ciper, Septa, Phil. Plumbing, Home Construction, World Builders, Glass World,
Performance Builders, and De Leon Araneta Construction for the construction
of the housing units. Under the contracts, the scope of construction and
funding covered only around "2/3 of each housing unit."Petitioners agreed to
undertake and perform "additional constructions" for the completion of the
housing units despite the fact that there was only a verbal promise, and not a
written contract, by the MPWH Undersecretary Aber Canlas.
Petitioners then received payment for the construction work duly covered by
the individual written contracts, thereby leaving an unpaid balance of
P5,918,315.63. On 14 November 1988, petitioners sent a demand letter to the
DPWH Secretary and submitted that their claim for payment was favorably
recommended by DPWH Assistant Secretary for Legal Services Dominador
Madamba, who recognized the existence of implied contracts covering the
additional constructions. He also opined that payment of petitioners money
claims should be based on quantum meruit and should be forwarded to the
Commission on Audit (COA) for its due consideration and approval. The money
claims were then referred to COA which returned the same to the DPWH
Auditor for auditorial action.

case, the lower court can continue with its proceedings.

In a Letter of the Undersecretary of Budget and Management dated December
20, 1994, the amount of P5,819,316.00 was then released for the payment of

the petitioners' money claims under Advise of Allotment No. A4-1303-04-41303.In an endorsement dated December 27, 1995, the COA referred anew the
money claims to the DPWH. In a letter dated August 26, 1996, respondent
Secretary Gregorio Vigilar denied the subject money claims. Petitioners filed
before the RTC of QC, Branch 226 a Petition for Mandamus to order the
respondent to pay petitioners their money claims plus damages and attorney's
fees. Lower court denied the petition on February 18, 1997

entirety at the time the implied contracts were entered into between the
government and the contractors.
Further, petitioners-contractors sent to the DPWH Secretary a demand letter
pressing for their money claims, on the strength of a favorable
recommendation from the DPWH Assistant Secretary for Legal Affairs to the
effect that implied contracts existed and that the money claims had ample

ISSUE:
1.
Whether or not the implied, verbal contracts between the petitioners
and then Undersecretary Canlas should be upheld.
2.
Whether or not the State is immune from suit.

basis applying the principle of quantum meruit. Moreover, as can be gleaned

from the records, even the DPWH Auditor interposed no objection to the
payment of the money claims, subject to whatever action the COA may adopt.
2. YES. This Court as the staunch guardian of the citizens rights and welfare

RULING:
1.

cannot sanction an injustice so patent on its face, and allow itself to be an

Yes. Although this Court agrees with respondents postulation that

instrument in the perpetration thereof. Justice and equity sternly demand that

the implied contracts, which covered the additional constructions,

the States cloak of invincibility against suit be shred in this particular instance,

are void, in view of violation of applicable laws, auditing rules and

lack of legal requirements, we nonetheless find the instant petition

and that petitionerscontractors be duly compensated on the basis

laden with merit and uphold, in the interest of substantial justice,

petitioners-contractors right to be compensated for the "additional

of quantum meruit for construction done on the public works housing

project.

constructions" on the public works housing project, applying

the principle of quantum meruit.
Petitioners-contractors assented and agreed to undertake additional
constructions for the completion of the housing units, believing in good faith
and in the interest of the government and, in effect, the public in general, that
appropriations to cover the additional constructions and completion of the
public works housing project would be available and forthcoming. On this
particular score, the records reveal that the verbal request and assurance of
then DPWH Undersecretary Canlas led petitioners-contractors to undertake
the completion of the government housing project, despite the absence of
covering appropriations, written contracts, and certification of availability of
funds, as mandated by law and pertinent auditing rules and issuances. To put
it differently, the implied contracts, declared void in this case, covered only
the completion and final phase of construction of the housing units, which
structures, concededly, were already existing, albeit not yet finished in their

DepEd vs. Oate

FACTS:
Celso Oate inherited a lot from his father (Lot 6849). It was proven in Legaspi
City RTC that Celso is indeed the lawful owner of the lot. However, inside the
disputed lot, Bagumbayan Elementary School was constructed.
On December 1992, through a counsel, Celso sent a letter to DepEd (DECS)
proposing the sale of the portion on the lot where the school was erected. It
will be sold at its fair market value. In addition, a reasonable rental of the lot
since 1960. Same letter were also sent to the District Engineer Orlando Roces.
Engr. Roces contended that the portion of the land where the school is located
was owned by DepEd (DECS) evidenced by a Deed of Donation. Also, the
municipal mayor alleged that the lot in dispute was sold by Claro Onate
(grandfather of Celso) to the municipality way back 1940.

The defendant municipality disputed that the lot was registered in the name of
the municipality under tax declaration No. 13954 from 1940 to 1988. The
municipality also contended that Celso is guilty of laches and estopped from
assailing ownership over the disputed lot. In addition, it was alleged that Celso
had no cause of action because it acquired ownership by virtue of deed of
donation and that the respondents claim was vague as it was derived from a
void deed of extrajudicial settlement of estate and cession disposing of the
disputed lot which was already sold to the Municipality of Daraga.
The respondent brought in court, Felicito Armenta, tenant of the land and he
testified that the respondent is indeed the owner of the said lot and the share
of the crops cultivated were paid to respondent. Thus, he also pays the real
property taxes.
Subsequently, the petitioner filed a joint motion to dismiss (JMD) in the ground
that the petitioner is immune to suits, claiming the defense of immunity of the
State. However, the trial court DIMISSED the JMD ruling that the State had
given IMPLIED CONSENT BY ENTERING INTO A CONTRACT.
As to the defense of the petitioner, they presented documentary exhibits
evidencing the cancelled tax declaration as an evidence of the purchase of the
disputed lot. Testimonies were also presented from Principal Adra testifying the
donation and from Mrs.Milleza a retired government employee testifying the
municipalitys continuous and adverse possession of the disputed lot since
1940.
The RTC, however, decided in favor of the plaintif-respondent on the ground
that it was made clear that Lot 6849 is registered under Torrens System to
Onate and that the defendant wasnt able to present documents supporting its
ownership ( e.g. TCT and deed of conveyance).
The CA AFFIRMED the decision made by the regional trial court.
ISSUE:
W/N DepEd is entitled of the immunity of the state.
HELD:
NO. There was an implied consent.
We rule that petitioner DECS can be sued without its permission as a result of
its being privy to the Deed of Donation executed by the Municipality of Daraga,

Albay over the disputed property. When it voluntarily gave its consent to the
donation, any dispute that may arise from it would necessarily bring petitioner
DECS down to the level of an ordinary citizen of the State vulnerable to a suit
by an interested or affected party. It has shed off its mantle of immunity and
relinquished and forfeited its armor of non-suability of the State.
In a situation involving a contract between a government department and a
third party, the Republic of the Philippines need not be impleaded as a party to
a suit resulting from said contract as it is assumed that the authority granted
to such department to enter into such contract carries with it the full
responsibility and authority to sue and be sued in its name.