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Phil Agila Satellite v.

Petitioner Philippine Agila Satellite Inc. is a duly organized corporation, whose President and
Chief Executive Officer is copetitioner !ichael C.". #e $uz%an. PASI was esta&lished &y a
consortiu% of private teleco%%unications carriers which in '(() *+une ,- had entered into a
!e%orandu% of "nderstanding with the #O.C, through its then Secretary *+uly '((/!arch
'((,- +esus $arcia, concerning the planned launch of a Philippineowned satellite into outer
space. .he Philippine govern%ent, through the #O.C, was tas0ed under the !O" to secure fro%
the International .eleco%%unication "nion the re1uired or&ital slots and fre1uency assign%ents
for the Philippine satellite.
.hey re1uested the then #O. Secretary A%ado S. 2agda%eo, +r. *Apr '((,'((3- for official
govern%ent confir%ation of the assign%ent of Philippine or&ital slots ','4Eand '564E to PASI
for its A$I2A satellites &y a letter dated +une /7, '((,.
8hen it was confir%ed, PASI undertoo0 preparations for the launching, operation and
%anage%ent of its satellites &y, a%ong other things, o&taining loans, increasing its capital,
conducting negotiations with its &usiness partners, and %a0ing an initial pay%ent. 8hen they
re1uested the 2and &an09s confir%ation of its participation in a clu& loan for the govern%ent9s
assign%ent to PASI of or&ital slots ','4E and '564E, #O.C "ndersecretary +osefina .. 2ichauco
sent a letter to the &an0 controverting the said assign%ent, clearly stating that or&ital slot '56:E
can no longer &e assigned to PASI. She su&se1uently issued a ;otice of Offer for several or&ital
slots including '564E in #ece%&er '((3.
PASI, clai%ing that the offer was without its 0nowledge and that it su&se1uently ca%e to
learn that another co%pany whose identity had not &een disclosed had su&%itted a &id and won
the award for or&ital slot '564E, filed on +anuary /6,'((7 a co%plaint3&efore the <egional .rial
Court *<.C- of !andaluyong City against 2ichauco and the ="n0nown Awardee,= for in>unction
to en>oin the award of or&ital slot '564E, declare its nullity, and for da%ages.
PASI filed on ?e&ruary /6, '((7 a co%plaint &efore the Office of the O%&uds%an against
Secretary +osefina .rinidad 2ichauco. In his affidavitco%plaint, de $uz%an charged 2ichauco
with gross violation of Section 6*e- of <epu&lic Act ;o.6@'(, otherwise 0nown as the Anti$raft
and Corrupt Practices Act, as a%ended, readingA*e- Causing any undue in>ury to any party,
including the $overn%ent, or giving any private party any unwarranted &enefits, advantage or
preference in the discharge of his official, ad%inistrative or >udicial functions through %anifest
partiality, evident &ad faith or gross inexcusa&le negligence. .his provision shall apply to officers
and e%ployees of officers or govern%ent corporations charged with the grant of licenses or
per%its or other concessions. Because a pre>udicial 1uestion was found &y the Evaluation and
Preli%inary Investigation Bureau *EPIB-, the cri%inal suit was dis%issed and reconsideration
was denied &y Order dated +uly '3, '((7. Cence, PASI is in petition for review on certiorari,
arguing that the O%&uds%an erred in dis%issing the co%plaint.
8hether or not the suit is against the state.
.he horn&oo0 rule is that a suit for acts done in the perfor%ance of official functions against
an officer of the govern%ent &y a private citizen that would result in a charge against or financial
lia&ility to the govern%ent %ust &e regarded as a suit against the State itself, although the latter
has not &een for%ally i%pleaded. Cowever, govern%ent i%%unity fro% suit will not shield the
pu&lic official &eing sued if the govern%ent no longer has an interest to protect in the outco%e of
a suitD or if the lia&ility of the officer is personal &ecause it arises fro% a tortious act in the
perfor%ance of his duties.
As earlier noted, the co%plaint alleges three causes of action against 2ichaucoA one for
in>unction against her perfor%ing any act in relation to or&ital slot '564 East 2ongitudeD one for
declaration of nullity of award, see0ing to nullify the alleged award of or&ital slot '564 East
2ongitudeD and one for da%ages against 2ichauco herself.
As stated earlier, it is when the acts done in the e!"o!#ance o" o""icial "unctions $%
an o""ice! o" the gove!n#ent will !esult in a cha!ge against o! "inancial lia$ilit% to
the gove!n#ent that the co#laint #ust $e !ega!ded as a suit against the State
itsel". Cowever, the distinction %ust also &e raised &etween where the govern%ent official
concerned perfor%s an act in hisEher official and >urisdictional capacity and where he perfor%s
an act that constitutes grave a&use of discretion tanta%ount to lac0 of >urisdiction. In the latter
case, the Constitution itself assures the availa&ility of >udicial review, and it is the official
concerned who should &e i%pleaded as the proper party defendant or respondent.
As to the first two causes o" action, the Court ruled that the defense of state i%%unity
fro% suit do not apply since said causes of action cannot &e properly considered as suits against
the State in constitutional conte%plation. .hese causes of action do not see0 to i%pose a charge
or financial lia&ility against the State, &ut %erely the nullification of state action. .he prayers
attached to these two causes of action are for the revocation of the ;otice of Bid and the
nullification of the purported award, nothing %ore. Cad it &een so that petitioner additionally
sought da%ages in relation to said causes of action, the suit would have &een considered as one
against the State. Cad the petitioner i%pleaded the #O.C itself, an unincorporated govern%ent
agency, and not 2ichauco herself, the suit would have &een considered as one against the State.
But neither circu%stance o&tains in this case.
.he doctrine, as su%%arized in Shauf v. Court of Appeals statesA F8hile the doctrine appears
to prohi&it only suits against the state without its consent, it is also applica&le to co%plaints filed
against officials of the state for acts allegedly perfor%ed &y the% in the discharge of their duties.
.he 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 a%ount needed to pay the
da%ages awarded against the%, the suit must be regarded as against the state itself although it
has not been formally impleaded. It %ust &e noted, however, that the rule is not so all
enco%passing as to &e applica&le under all circu%stances.G
It is a different %atter where the pu&lic official is %ade to account in his capacity as such for
acts contrary to law and in>urious to the rights of plaintiff. As was clearly set forth &y +ustice
Haldivar in #irector of the Bureau of .eleco%%unications, et al. vs. Aligaen, etc., et al.A
FInas%uch as the State authorizes only legal acts &y its officers, unauthorized acts of govern%ent
officials or officers are not acts of the State, and an action against the officials or officers &y one
whose rights have &een invaded or violated &y such acts, for the protection of his rights, is not a
suit against the State within the rule of i%%unity of the State fro% suit. In the sa%e tenor, it has
&een said that an action at law or suit in e1uity against a State officer or the director of a State
depart%ent on the ground that, while clai%ing to act for the State, he violates or invades the
personal and property rights or the plaintiff, under an unconstitutional act or under an
assu%ption of authority which he does not have, is not a suit against the State within the
constitutional provision that the State %ay not &e sued without its consent.I .he rationale for this
ruling is that the doctrine of state i%%unity cannot &e used as an instru%ent for perpetrating an
8hen a pu&lic officer acts without or in excess of >urisdiction, any in>ury caused &y hi% is his
own personal lia&ility and cannot &e i%puted to the State. *p.6), Political 2aw, Isagani Cruz-