G.R. No.
102667 February 23, 2000 Although blind, Iglesias as president was knowledgeable enough to run GABI as well as
AMADO J. LANSANG, petitioner,
vs.
COURT OF APPEALS, GENERAL ASSEMBLY OF THE BLIND, INC., and JOSE
IGLESIAS, respondents.
QUISUMBING, J.:
Before us is a petition to review the decision of the Court of Appeals in C.A. G.R. CV No.
27244, which set aside the ruling of the Regional Trial Court, Manila, Branch 8, in Civil
Case No. 88-43887, and ordered petitioner Amado J. Lansang to pay private respondent
Jose Iglesias P50,000.00 in moral damages, P10,000.00 in exemplary damages and
P5,000.00 in attorney's fees.
Like public streets, public parks are beyond the commerce of man. However, private
respondents were allegedly awarded a "verbal contract of lease" in 1970 by the National
Parks Development Committee (NPDC), a government initiated civic body engaged in the
development of national parks, including Rizal Park,1 but actually administered by high
profile civic leaders and journalists. Whoever in NPDC gave such "verbal" accommodation
to private respondents was unclear, for indeed no document or instrument appears on
record to show the grantor of the verbal license to private respondents to occupy a portion
of the government park dedicated to the national hero's memory.
Private respondents were allegedly given office and library space as well as kiosks area
selling food and drinks. One such kiosk was located along T.M. Kalaw St., in front of the
Army and Navy Club. Private respondent General Assembly of the Blind, Inc. (GABI) was
to remit to NPDC, 40 percent of the profits derived from operating the kiosks,2 without again
anything shown in the record who received the share of the profits or how they were used
or spent.
With the change of government after the EDSA Revolution, the new Chairman of the
NPDC, herein petitioner, sought to clean up Rizal Park. In a written notice dated February
23, 1988 and received by private respondents on February 29, 1988, petitioner terminated
the so-called verbal agreement with GABI and demanded that the latter vacate the
premises and the kiosks it ran privately within the public park.3 In another notice dated
March 5, 1988, respondents were given until March 8, 1988 to vacate.4
The latter notice was signed by private respondent Iglesias, GABI president, allegedly to
indicate his conformity to its contents. However, Iglesias, who is totally blind, claims that
he was deceived into signing the notice. He was allegedly told by Ricardo Villanueva, then
chief warden of Rizal Park, that he was merely acknowledging receipt of the notice.
its business.
On the day of the supposed eviction, GABI filed an action for damages and injunction in
the Regional Trial Court against petitioner, Villanueva, and "all persons acting on their
behalf".5 The trial court issued a temporary restraining order on the same day.6
The TRO expired on March 28, 1988. The following day, GABI was finally evicted by
NPDC.
GABI's action for damages and injunction was subsequently dismissed by the RTC, ruling
that the complaint was actually directed against the State which could not be sued without
its consent. Moreover, the trial court ruled that GABI could not claim damages under the
alleged oral lease agreement since GABI was a mere accommodation concessionaire. As
such, it could only recover damages upon proof of the profits it could realize from the
conclusion. The trial court noted that no such proof was presented. 1âwphi1.nêt
On appeal, the Court of Appeals reversed the decision of the trial court.
The Court of Appeals ruled that the mere allegation that a government official is being sued
in his official capacity is not enough to protect such official from liability for acts done
without or in excess of his authority.7 Granting that petitioner had the authority to evict
GABI from Rizal Park, "the abusive and capricious manner in which that authority was
exercised amounted to a legal wrong for which he must now be held liable for
damages"8 according to the Court of Appeals.
The Court of Appeals noted that, as the trial court observed, the eviction of GABI came at
the heels of two significant incidents. First, after private respondent Iglesias extended
monetary support to striking workers of the NPDC, and second, after Iglesias sent the
Tanodbayan, a letter on November 26, 1987, denouncing alleged graft and corruption in
the NPDC.9 These, according to the Court of Appeals, should not have been taken against
GABI, which had been occupying Rizal Park for nearly 20 years. GABI was evicted
purportedly for violating its verbal agreement with NPDC.10 However, the Court of Appeals
pointed out that NPDC failed to present proof of such violation.11
The Court of Appeals found petitioner liable for damages under Articles 19, 21, and 24 of
the Civil Code.12
The Court of Appeals absolved from liability all other persons impleaded in GABI's
complaint since it appeared that they were merely acting under the orders of petitioner.
The new officers of NPDC, additionally impleaded by GABI, were likewise absolved from
liability, absent any showing that they participated in the acts complained of. Petitioner was
ordered to pay private respondent Iglesias moral and exemplary damages and attorney's
fees.
Hence, this petition, in which petitioner raises the following issues:
I. WHETHER OR NOT RESPONDENT COURT ERRED IN NOT HOLDING THAT
PRIVATE RESPONDENTS' COMPLAINT AGAINST PETITIONER, AS
CHAIRMAN OF NPDC, AND HIS CO-DEFENDANTS IN CIVIL CASE NO. 88-
43887, IS IN EFFECT A SUIT AGAINST THE STATE WHICH CANNOT BE SUED
WITHOUT ITS CONSENT.
II. WHETHER OR NOT RESPONDENT COURT ERRED IN NOT HOLDING THAT
PETITIONER'S ACT OF TERMINATING RESPONDENT GABI'S CONCESSION
IS VALID AND DONE IN THE LAWFUL PERFORMANCE OF OFFICIAL DUTY.13
Petitioner insists that the complaint filed against him is in reality a complaint against the
State, which could not prosper without the latter's consent. He anchors his argument on
the fact that NPDC is a government agency, and that when he ordered the eviction of
GABI, he was acting in his capacity as chairman of NPDC. Petitioner avers that the mere
allegation that he was being sued in his personal capacity did not remove the case from
the coverage of the law of public officers and the doctrine of state immunity.
Petitioner points out that Iglesias signed the notice of eviction to indicate his conformity
thereto. He contends that as evidence of private respondents' bad faith, they sued
petitioner instead of complying with their undertaking to vacate their library and kiosk at
Rizal Park.
Petitioner adds that during the actual eviction, no untoward incident occurred. GABI's
properties were properly inventoried and stored.
According to petitioner, the Court of Appeals' observation that the eviction was prompted
by Iglesias' support for striking NPDC workers and the letter-complaint sent to the
Tanodbayan is merely conjectural.
Finally, petitioner avers that the move to evict GABI and award the spaces it occupied to
another group was an executive policy decision within the discretion of NPDC. GABI's
possession of the kiosks as concessionaire was by mere tolerance of NPDC and, thus,
such possession may be withdrawn at any time, with or without cause.
On the other hand, private respondents aver that petitioner acted beyond the scope of his
authority when he showed malice and bad faith in ordering GABI's ejectment from Rizal
Park. Quoting from the decision of the Court of Appeals, private respondents argue that
petitioner is liable for damages for performing acts "to injure an individual rather than to
discharge a public duty."14
While private respondents recognize the authority of petitioner to terminate the agreement
with GABI "if [the contract] is prejudicial to the interest of the NPDC,"15 they maintain that
petitioner's personal interest, and not that of the NPDC, was the root cause of GABI's
ejecment.
The doctrine of state immunity from suit applies to complaints filed against public officials
for acts done in the performance of their duties. The rule is that the suit must be regarded
as one against the state where satisfaction of the judgment against the public official
concerned will require the state itself to perform a positive act, such as appropriation of the
amount necessary to pay the damages awarded to the plaintiff.16
The rule does not apply where the public official is charged in his official capacity for acts
that are unlawful and injurious to the rights of others.17 Public officials are not exempt, in
their personal capacity, from liability arising from acts committed in bad faith.18
Neither does it apply where the public official is clearly being sued not in his official capacity
but in his personal capacity, although the acts complained of may have been committed
while he occupied a public position.
We are convinced that petitioner is being sued not in his capacity as NPDC chairman but
in his personal capacity. The complaint filed by private respondents in the RTC merely
identified petitioner as chairman of the NPDC, but did not categorically state that he is
being sued in that capacity.19 Also, it is evident from paragraph 4 of said complaint that
petitioner was sued allegedly for having personal motives in ordering the ejectment of
GABI from Rizal Park.
4. Defendant AMADO J. LANSANG, JR., the Chairman of the National Parks
Development Committee, acting under the spirit of revenge, ill-will, evil motive and
personal resentment against plaintiff JOSE IGLESIAS, served on the plaintiff
corporation a letter, dated February 23, 1988 terminating plaintiffs lease
agreement with a demand for the plaintiff corporation to vacate its office premises.
. .20 (Emphasis supplied.)
The parties do not dispute that it was petitioner who ordered the ejectment of GABI from
their office and kiosk at Rizal Park. There is also no dispute that petitioner, as chairman of
the NPDC which was the agency tasked to administer Rizal Park, had the authority to
terminate the agreement with GABI21 and order the organization's ejectment. The question
now is whether or not petitioner abused his authority in ordering the ejectment of private
respondents.
We find, however, no evidence of such abuse of authority on record. As earlier stated,
Rizal Park is beyond the commerce of man and, thus, could not be the subject of a lease
contract. Admittedly, there was no written contract. That private respondents were allowed
to occupy office and kiosk spaces in the park was only a matter of accommodation by the
previous administrator. This being so, also admittedly, petitioner may validly discontinue
the accommodation extended to private respondents, who may be ejected from the park
when necessary. Private respondents cannot and does not claim a vested right to continue
to occupy Rizal Park.

The Court of Appeals awarded private respondent Iglesias moral and exemplary damages
and attorney's fees. However, we find no evidence on record to support Iglesias' claim that
he suffered moral injury as a result of GABI's ejectment from Rizal Park. Absent any
satisfactory proof upon which the Court may base the amount of damages suffered, the
award of moral damages cannot be sustained.22

Neither can we sustain the award of exemplary damages, which may only be awarded in
addition to moral, temperate, liquidated, or compensatory damages.23 We also disallow the
award for attorney's fees, which can only be recovered per stipulation of the parties, which
is absent in this case. There is no showing that any of the exceptions justifying the award
of attorney's fees absent a stipulation is present in this case.24

WHEREFORE, the instant petition is GRANTED. The decision of the Court of Appeals in
CA-G.R. CV No. 27244 is hereby SET ASIDE, and the DISMISSAL of the complaint for
damages by the trial court for want of merit is AFFIRMED. No costs.

SO ORDERED.
G.R. No. 104269 November 11, 1993
DEPARTMENT OF AGRICULTURE, petitioner,
vs.
THE NATIONAL LABOR RELATIONS COMMISSION, et al., respondents.
Roy Lago Salcedo for private respondents.
VITUG, J.:
For consideration are the incidents that flow from the familiar doctrine of non-suability of
the state.
In this petition for certiorari, the Department of Agriculture seeks to nullify the
Resolution, 1 dated 27 November 1991, of the National Labor Relations Commission
(NLRC), Fifth Division, Cagayan de Oro City, denying the petition for injunction, prohibition
and mandamus that prays to enjoin permanently the NLRC's Regional Arbitration Branch
X and Cagayan de Oro City Sheriff from enforcing the decision 2 of 31 May 1991 of the
Executive Labor Arbiter and from attaching and executing on petitioner's property.
The Department of Agriculture (herein petitioner) and Sultan Security Agency entered into
a contract3 on 01 April 1989 for security services to be provided by the latter to the said
governmental entity. Save for the increase in the monthly rate of the guards, the same
terms and conditions were also made to apply to another contract, dated 01 May 1990,
between the same parties. Pursuant to their arrangements, guards were deployed by
Sultan Agency in the various premises of the petitioner.
On 13 September 1990, several guards of the Sultan Security Agency filed a complaint for
underpayment of wages, non-payment of 13th month pay, uniform allowances, night shift
differential pay, holiday pay and overtime pay, as well as for damages,4 before the
Regional Arbitration Branch X of Cagayan de Oro City, docketed as NLRC Case No. 10-
09-00455-90 (or 10-10-00519-90, its original docket number), against the Department of
Agriculture and Sultan Security Agency.
The Executive Labor Arbiter rendered a decision on 31 May finding herein petitioner
and jointly and severally liable with Sultan Security Agency for the payment of money
claims, aggregating P266,483.91, of the complainant security guards. The petitioner and
Sultan Security Agency did not appeal the decision of the Labor Arbiter. Thus, the decision
became final and executory.
On 18 July 1991, the Labor Arbiter issued a writ of execution. 5 commanding the City Sheriff
to enforce and execute the judgment against the property of the two respondents.
Forthwith, or on 19 July 1991, the City Sheriff levied on execution the motor vehicles of the
petitioner, i.e. one (1) unit Toyota Hi-Ace, one (1) unit Toyota Mini Cruiser, and one (1) unit
Toyota Crown.6 These units were put under the custody of Zacharias Roa, the property
custodian of the petitioner, pending their sale at public auction or the final settlement of the
case, whichever would come first.
A petition for injunction, prohibition and mandamus, with prayer for preliminary writ of
injunction was filed by the petitioner with the National Labor Relations Commission
(NLRC), Cagayan de Oro, alleging, inter alia, that the writ issued was effected without the
Labor Arbiter having duly acquired jurisdiction over the petitioner, and that, therefore, the
decision of the Labor Arbiter was null and void and all actions pursuant thereto should be
deemed equally invalid and of no legal, effect. The petitioner also pointed out that the
attachment or seizure of its property would hamper and jeopardize petitioner's
governmental functions to the prejudice of the public good.
On 27 November 1991, the NLRC promulgated its assailed resolution; viz:
WHEREFORE, premises considered, the following orders are issued:
1. The enforcement and execution of the judgments against petitioner in
NLRC RABX Cases Nos. 10-10-00455-90; 10-10-0481-90 and 10-10-
00519-90 are temporarily suspended for a period of two (2) months, more
or less, but not extending beyond the last quarter of calendar year 1991 to
enable petitioner to source and raise funds to satisfy the judgment awards
against it;
2. Meantime, petitioner is ordered and directed to source for funds within
the period above-stated and to deposit the sums of money equivalent to
the aggregate amount. it has been adjudged to pay jointly and severally
with respondent Sultan Security Agency with the Regional Arbitration
Branch X, Cagayan de Oro City within the same period for proper
dispositions;
3. In order to ensure compliance with this order, petitioner is likewise
directed to put up and post sufficient surety and supersedeas
bond equivalent to at least to fifty (50%) percent of the total monetary
award issued by a reputable bonding company duly accredited by the
Supreme Court or by the Regional Trial Court of Misamis Oriental to
answer for the satisfaction of the money claims in case of failure or default
on the part of petitioner to satisfy the money claims;
4. The City Sheriff is ordered to immediately release the properties of
petitioner levied on execution within ten (10) days from notice of the posting
of sufficient surety or supersedeas bond as specified above. In the
 meanwhile, petitioner is assessed to pay the costs and/or expenses
incurred by the City Sheriff, if any, in connection with the execution of the
judgments in the above-stated cases upon presentation of the appropriate
claims or vouchers and receipts by the city Sheriff, subject to the conditions
specified in the NLRC Sheriff, subject to the conditions specified in the
NLRC Manual of Instructions for Sheriffs;
5. The right of any of the judgment debtors to claim reimbursement against
each other for any payments made in connection with the satisfaction of
the judgments herein is hereby recognized pursuant to the ruling in
the Eagle Security case, (supra). In case of dispute between the judgment
debtors, the Executive Labor Arbiter of the Branch of origin may upon
proper petition by any of the parties conduct arbitration proceedings for the
purpose and thereby render his decision after due notice and hearings;
7. Finally, the petition for injunction is Dismissed for lack of basis. The writ
of preliminary injunction previously issued is Lifted and Set Aside and in
lieu thereof, a Temporary Stay of Execution is issued for a period of two
(2) months but not extending beyond the last quarter of calendar year
1991, conditioned upon the posting of a surety or supersedeas bond by
petitioner within ten (10) days from notice pursuant to paragraph 3 of this
disposition. The motion to admit the complaint in intervention is Denied for
lack of merit while the motion to dismiss the petition filed by Duty Sheriff
is Noted
SO ORDERED.
In this petition for certiorari, the petitioner charges the NLRC with grave abuse of discretion
for refusing to quash the writ of execution. The petitioner faults the NLRC for assuming
jurisdiction over a money claim against the Department, which, it claims, falls under the
exclusive jurisdiction of the Commission on Audit. More importantly, the petitioner asserts,
the NLRC has disregarded the cardinal rule on the non-suability of the State.
The private respondents, on the other hand, argue that the petitioner has impliedly waived
its immunity from suit by concluding a service contract with Sultan Security Agency.
The basic postulate enshrined in the constitution that "(t)he State may not be sued without
its consent," 7 reflects nothing less than a recognition of the sovereign character of the
State and an express affirmation of the unwritten rule effectively insulating it from the
jurisdiction of courts. 8 It is based on the very essence of sovereignty. As has been aptly
observed, by Justice Holmes, a sovereign is exempt from suit, not because of any formal
conception or obsolete theory, but on the logical and practical ground that there can be no
legal right as against the authority that makes the law on which the right depends. 9 True,
the doctrine, not too infrequently, is derisively called "the royal prerogative of dishonesty"
because it grants the state the prerogative to defeat any legitimate claim against it by
simply invoking its non-suability. 10 We have had occasion, to explain in its defense,
however, that a continued adherence to the doctrine of non-suability cannot be deplored,
for the loss of governmental efficiency and the obstacle to the performance of its
multifarious functions would be far greater in severity than the inconvenience that may be
caused private parties, if such fundamental principle is to be abandoned and the availability
of judicial remedy is not to be accordingly restricted. 11
The rule, in any case, is not really absolute for it does not say that the state may not be
sued under any circumstances. On the contrary, as correctly phrased, the doctrine only
conveys, "the state may not be sued without its consent;" its clear import then is that the
State may at times be sued. 12 The States' consent may be given expressly or impliedly.
Express consent may be made through a general law13 or a special law. 14 In this
jurisdiction, the general law waiving the immunity of the state from suit is found in Act No.
3083, where the Philippine government "consents and submits to be sued upon any money
claims involving liability arising from contract, express or implied, which could serve as a
basis of civil action between private parties." 15 Implied consent, on the other hand, is
conceded when the State itself commences litigation, thus opening itself to a
counterclaim16 or when it enters into a contract. 17 In this situation, the government is
deemed to have descended to the level of the other contracting party and to have divested
itself of its sovereign immunity. This rule, relied upon by the NLRC and the private
respondents, is not, however, without qualification. Not all contracts entered into by the
government operate as a waiver of its non-suability; distinction must still be made between
one which is executed in the exercise of its sovereign function and another which is done
in its proprietary capacity. 18
In the Unites States of America vs. Ruiz, 19 where the questioned transaction dealt with
improvements on the wharves in the naval installation at Subic Bay, we held:
The traditional rule of immunity exempts a State from being sued in the
courts of another State without its consent or waiver. This rule is a
necessary consequence of the principles of independence and equality of
States. However, the rules of International Law are not petrified; they are
constantly developing and evolving. And because the activities of states
have multiplied, it has been necessary to distinguish them — between
sovereign and governmental acts ( jure imperii) and private, commercial
and proprietary act ( jure gestionisis). The result is that State immunity now
extends only to acts jure imperii. The restrictive application of State
immunity is now the rule in the United States, the United Kingdom and
other states in Western Europe.
xxx xxx xxx
 The restrictive application of State immunity is proper only when the
proceedings arise out of commercial transactions of the foreign sovereign,
its commercial activities or economic affairs. Stated differently, a state may
be said to have descended to the level of an individual and can this be
deemed to have actually given its consent to be sued only when it enters
into business contracts. It does not apply where the contracts relates to the
exercise of its sovereign functions. In this case the projects are an integral
part of the naval base which is devoted to the defense of both the United
States and the Philippines, indisputably a function of the government of the
highest order; they are not utilized for not dedicated to commercial or
business purposes.
In the instant case, the Department of Agriculture has not pretended to have assumed a
capacity apart from its being a governmental entity when it entered into the questioned
contract; nor that it could have, in fact, performed any act proprietary in character.
But, be that as it may, the claims of private respondents, i.e. for underpayment of wages,
holiday pay, overtime pay and similar other items, arising from the Contract for Service,
clearly constitute money claims. Act No. 3083, aforecited, gives the consent of the State
to be "sued upon any moneyed claim involving liability arising from contract, express or
implied, . . . Pursuant, however, to Commonwealth Act ("C.A.") No. 327, as amended by
Presidential Decree ("P.D.") No. 1145, the money claim first be brought to the Commission
on Audit. Thus, in Carabao, Inc., vs. Agricultural Productivity Commission, 20 we ruled:
execution directed against the funds of the Armed Forces of the Philippines to satisfy a
final and executory judgment, has explained, thus —
The universal rule that where the State gives its consent to be sued by
private parties either by general or special law, it may limit the claimant's
action "only up to the completion of proceedings anterior to the stage of
execution" and that the power of the Courts ends when the judgment is
rendered, since government funds and properties may not be seized under
writs or execution or garnishment to satisfy such judgments, is based on
obvious considerations of public policy. Disbursements of public funds
must be covered by the correspondent appropriation as required by law.
The functions and public services rendered by the State cannot be allowed
to be paralyzed or disrupted by the diversion of public funds from their
legitimate and specific objects, as appropriated by law.23
WHEREFORE, the petition is GRANTED. The resolution, dated 27 November 1991, is
hereby REVERSED and SET ASIDE. The writ of execution directed against the property
of the Department of Agriculture is nullified, and the public respondents are hereby
enjoined permanently from doing, issuing and implementing any and all writs of execution
issued pursuant to the decision rendered by the Labor Arbiter against said petitioner.
SO ORDERED.

(C)laimants have to prosecute their money claims against the Government

under Commonwealth Act 327, stating that Act 3083 stands now merely as
the general law waiving the State's immunity from suit, subject to the
general limitation expressed in Section 7 thereof that "no execution shall
issue upon any judgment rendered by any Court against the Government
of the (Philippines), and that the conditions provided in Commonwealth Act
327 for filing money claims against the Government must be strictly
observed."

We fail to see any substantial conflict or inconsistency between the provisions of C.A. No.
327 and the Labor Code with respect to money claims against the State. The Labor code,
in relation to Act No. 3083, provides the legal basis for the State liability but the
prosecution, enforcement or satisfaction thereof must still be pursued in accordance with
the rules and procedures laid down in C.A. No. 327, as amended by P.D. 1445.

When the state gives its consent to be sued, it does thereby necessarily consent to
unrestrained execution against it. tersely put, when the State waives its immunity, all it
does, in effect, is to give the other party an opportunity to prove, if it can, that the State has
a liability. 21 In Republic vs. Villasor 22 this Court, in nullifying the issuance of an alias writ of
G.R. No. 142362 May 3, 2006
PHILIPPINE AGILA SATELLITE INC. and MICHAELC. U. DE GUZMAN, Complainants,
vs.
JOSEFINA TRINIDAD-LICHAUCO Undersecretary for Communications, Department
of Transportation and Communication (DOTC), Respondents.
DECISION
TINGA, J.:
This Petition for Review on Certiorari seeks the reversal of the Decision1 dated 21 February
2000 of the Court of Appeals in C.A. G.R. No. SP 49422. The assailed Decision authorized
the dismissal of a civil complaint against respondent Josefina Trinidad-Lichauco
(Lichauco), former Undersecretary for Communications of the Department of
Transportation and Communication (DOTC), on the premise that the complaint constituted
a suit against the State.
A brief rundown of the relevant facts is in order.
Petitioner Philippine Agila Satellite Inc. (PASI) 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 carriers2 which in 1994 had
entered into a Memorandum of Understanding (MOU) with the DOTC, through its then
Secretary Jesus Garcia, concerning the planned launch of a Philippine-owned satellite into
outer space. Under the MOU, the launch of the satellite was to be an endeavor of the
private sector, and the satellite itself to be owned by the Filipino-owned consortium
(subsequently organized as PASI).3 The consortium was to grant the Philippine
government one (1) transponder free of charge for the government's exclusive use for non-
commercial purpose, as well as the right of first refusal to another one (1) transponder in
the Philippine satellite, if available.4 The Philippine government, through the DOTC, was
tasked under the MOU to secure from the International Telecommunication Union the
required orbital slot(s) and frequency assignment(s) for the Philippine satellite.
PASI itself was organized by the consortium in 1996. The government, together with PASI,
coordinated through the International Telecommunication Union two (2) orbital slots,
designated as 161º East Longitude and 153º East Longitude, for Philippine satellites. On
28 June 1996, 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, which PASI had designated as the Agila
satellites.5 Secretary Lagdameo, Jr. replied in a letter dated 3 July 1996, confirming "the
Philippine Government's assignment of Philippine orbital slots 161E and 153E to [PASI]
for its [Agila] satellites."6
PASI avers 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, the increase in its capital, negotiation with business
partners, and an initial payment of US$3.5 Million 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." Lichauco's purported efforts against PASI culminated
allegedly in her offering orbital slot 153º East Longitude
for bidding to other parties sometime in December 1997, despite the prior assignment to
PASI of the said slot.7 It was later claimed by PASI that Lichauco subsequently awarded
the orbital slot to an entity whose indentity was unknown to PASI.8
Aggrieved by Lichauco's actions, PASI and De Guzman instituted on 23 January 1998 a
civil complaint against Lichauco, by then the Acting Secretary of the DOTC, and the
"Unknown Awardee" who was to be the recipient of orbital slot 153º East Longitude. The
complaint, alleging three (3) causes of action, was for injunction, declaration of nullity of
award, and damages. The first cause of action, for injunction, sought to establish that the
award of orbital slot 153º East Longitude should be enjoined since the DOTC had
previously assigned the same orbital slot to PASI. The second cause of action, for
declaration of nullity of award, averred that the award to the unknown bidder is null and
void, as it was rendered by Lichauco beyond her authority.9
The third cause of action, for damages, imputed several acts to Lichauco as part of her
alleged "crusade" to malign the name of plaintiff [D]e Guzman and sabotage the business
of [PASI]:
12. xxx
(a) On 4 December 1996, in a meeting with the members of the Board of Directors
of plaintiff corporation, defendant Lichauco then uttered disparaging and
defamatory comments against plaintiff de Guzman. These defamatory remarks
triggered efforts from within the plaintiff corporation aimed at ousting plaintiff de
Guzman from his position.
(b) Defendant Lichauco, then an undersecretary of DOTC, wrote Mr. Jesli Lapuz
on 5 December 1996 (barely two days after plaintiff de Guzman wrote him) to deny
that the DOTC has assigned the two (2) Philippine orbital slots to plaintiff
corporation. Defendant Lichauco falsely asserted that only orbital slot 161 E was
assigned to plaintiff, orbital slot 153 E was not.
In the same letter, defendant Lichauco branded as FALSE plaintiff de Guzman's
claim that "Agila" is a registered corporate name of plaintiff corporation.
 A copy of the letter is attached as Annex E.
(c) Not contented, defendant Lichauco, again for reasons known only to her, and
with malice aforethought, made defamatory remarks against plaintiffs during a
telecommunications forum held in Makati City sometime in October 1997 in the
presence of public officials and business executives.
(d) Defendant Lichauco did not spare plaintiff corporation from her unprovoked
defamation. Defendant Lichauco arrogantly said that she had asked President
Fidel V. Ramos to sue plaintiff Michael de Guzman. With the same degree of
arrogance she threatened plaintiff corporation not to use the name "Agila",
otherwise she would fight plaintiff corporation and would make sure that the name
of Agila would never be given back to plaintiff corporation.
(e) To top it all, defendant Lichauco without basis and with evident bad faith, said
that plaintiff corporation will never pay its contractors.
(f) In December 1997, defendant Lichauco delivered the coup de' grace. Again,
acting unilaterally, without prior notice to plaintiff corporation and in gross violation
of DOTC's earlier assignment to plaintiff corporation of orbital slot 153 E, defendant
Lichauco offered said slot to interested applicants. A copy of the notice of offer is
attached as Annex F.
13. Plaintiffs learned of defendant Lichauco's acts after orbital slot 153 E was offered for
bidding. To plaintiff coproration's knowledge, the orbital slot was eventually awarded to
defendant Unknown Awardee.
x x x x10
The complaint alleged that since Lichauco's act of offering and awarding orbital slot 153º
East Longitude was patently illegal and violative of DOTC's prior commitment to PASI,
Lichauco should be enjoined from performing any acts and entering into or executing any
agreement or arrangement of whatever nature in connection with the said orbital slot. The
complaint also averred that the purported award of the orbital slot to the "Unknown
Awardee was illegal, and thus should be declared null and void. Finally, the complaint
alleged a cause of action for damages against Lichauco, cast in the following manner:
xxxx
21. Defendant Lichauco attacked the good name and reputation of plaintiffs.
22. She willfully caused damage to plaintiffs by orchestrating the above-described acts
which are contrary to law; morals and basic norms of good faith.
23. She interefered with and violated plaintiff corporation's contract with DOTC by offering
and awarding orbital slot 153 E to defendant Unknown Awardee.
24. Because of defendant Lichauco's reprehensible acts, plaintiffs suffered actual
damages of at least P10 million each, for all of which defendant Lichauco should be held
liable to pay.
25. By reason of defendant Lichauco's illegal and malicious acts, plaintiff corporation's
business name and goodwill was tarnished, for which plaintiff corporation should be
indemnified by way of moral damages in the amount of at least P10 million.
26. For the same reasons, plaintiff de Guzman suffered and continue to suffer
extreme mental anguish, serious anxiety, wounded feelings, moral shock and
besmirched reputation, for all of which plaintiff de Guzman should be indemnified
in the amount of at least P10 million.
27. Defendant Lichauco should also be sanctioned, as a deterrent for public good, to pay
each plaintiff exemplary damages in the amount of at least P5 million.
28. In order to protect and enforce their rights, plaintiffs were compelled to institute this
suit, engage the services of counsel and incur litigation expenses, for all of which plaintiffs
should be indemnified in the amount of at least P500 Thousand each.11
xxxx
In sum, petitioners sought the following reliefs for the three (3) causes of action:
xxxx
3. After trial of the issues, render judgment as follows:
[a] On the first cause of action, making permanent the writ of preliminary injunction;
[b] On the second cause of action, declaring the offer and award of orbital slot 153
E to defendant Unknown Awardee null and void.
[c] On the third cause of action, directing defendant Lichauco to pay the following
sums:
i. P10 million each to plaintiffs as actual damages;
ii. P10 million to plaintiff corporation as moral damages;
 iii. P10 million to plaintiff de Guzman as moral damages;
iv. P5 million each to plaintiffs as exemplary damages;
v. P500 Thousand each to plaintiffs as attorney's fees and litigation
expenses.
x x x x12
The complaint was filed before the Regional Trial Court (RTC) of Mandaluyong City, and
subsequently raffled to Branch 214. On 2 February 1998, the RTC issued a temporary
restraining order against Lichauco, who received the summons together with the complaint
on 28 January 1998. Lichauco failed to file an answer within the reglementary period, but
eight (8) days after the lapse thereof, she filed a Manifestation and Motion asking for a new
five (5)-day period, or until 25 February 1998, to file a responsive pleading to the complaint.
However, she filed instead a Motion to Admit with attached Motion to Dismiss on 27
February 1998. 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.
In an order13 dated 14 August 1998, the RTC denied the motion to dismiss. It characterized
the defense of state immunity as "at very least a contentious issue which can not be
resolved by mere allegations in the pleadings but which can be best threshed out in a
litig[i]ous forum where parties are accorded enormous (sic) opportunity to argue for the
ascertainment of whether the act complained of are indeed within the parameters and
prerogatives of the authority exercising the same."14 The RTC also noted that the
allegations in the complaint regarding the ultimate facts sufficiently presented an ultra
vires act of Lichauco, and that she was being sued in her personal capacity. As to the
argument pertaining to the non-exhaustion of administrative remedies, the RTC noted that
the principle is not an inflexible rule, and may be dispensed with when its application would
cause great and irreparable damage or when it would not constitute a plain, speedy and
adequate remedy.15
Lichauco assailed the RTC order through a Petition for Certiorari under Rule 65 before the
Court of Appeals, which subsequently nullified the RTC order in the Decision now assailed
before us. The Court of Appeals sustained the contention that the complaint is a suit
against the State with the following ratiocination:
The suit is to the mind of this court a suit against the state. 1avv phil.net
The notice of offer signed by herein petitioner allegedly tainted with bad faith was done in
the exercise of and in pursuance of an official duty. Her duties are as follows:
SEC. 10. Powers and Duties of the Undersecretary. The Undersecretary shall:
(1) Advise and assist the Secretary in the formulation and implementation of
department objectives and policies;
(2) Oversee all the operational activities of the department for which he shall be
responsible to the Secretary;
(3) Coordinate the programs and projects of the department and be responsible
for its economical, efficient and effective administration:
xxxxxxxxx
It is apparent from the above enumeration that the petitioner is directly under and
answerable to the DOTC Secretary. We can therefore conclude that her official acts such
as the said "notice of offer" was with the blessing and prior approval of the DOTC Secretary
himself.
Being an official act, it is also protected by the presumption that the same was performed
in good faith and in the regular performance of official duty.
"Acts in Line of Duty or under Color of Authority. - As a rule, a public officer, whether
judicial, quasi-judicial, or executive, is not personally liable to one injured in consequence
of an act performed within the scope of his official authority, and in the line of his official
duty. In order that acts may be done within the scope of official authority, it is not necessary
that they be prescribed by statute, or even that they be specifically directed or requested
by a superior officer, but it is sufficient if they are done by an officer in relation to matters
committed by law to his control or supervision, or that they have more or less connection
with such matters, or that they are governed by a lawful requirement of the department
under whose authority the officer is acting. Under this principle, state building
commissioners who, in obedience to a stature, discharge one who has been employed to
construct a state building, take possession of the work, and place it in the hands of another
contractor, are not liable to the former contractor in damages, since in so doing they are
merely acting in the line of their duty. An officer is not personally responsible for the
necessary and unavoidable destruction of goods stored in buildings, when such buildings
were destroyed by him in the lawful performance of a public duty imposed on him by a
valid and constitutional statute."
xxxxxxxxx
Error or Mistake in Exercise of Authority. - Where an officer is invested with discretion
and is empowered to exercise his judgment in matters brought before him he is sometimes
called a quasi-judicial officer, and when so acting he is usually given immunity from liability
to persons who may be injured as the result of an erroneous or mistaken decision,
however, erroneous judgment may be, provided the acts complained of are done within
the scope of the officer's authority, and without willfulness, malice, or corruption." (43 Am.
Jur., pp. 85-86).
In Sanders vs. Veridiano[16], the Supreme Court held:
"Given the official character of the above-described letters, we have to conclude that the
petitioners were, legally speaking, being sued as officers of the United States government.
As they have acted on behalf of that government, and within the scope of their authority, it
is that government and not the petitioners personally, that is responsible for their acts.
Assuming that the trial can proceed and it is proved that the claimants have a right to the
payment of damages, such award will have to be satisfied not by the petitioners in their
personal capacities but by the United States government as their principal. This will require
that government, viz.: the appropriation of the necessary amount to cover the damages
awarded, thus making the action a suit against that government without its consent.
There should be no question by now that such complaint cannot prosper unless the
government sought to be held ultimately liable has given its consent to be sued. So we
have ruled not only in Baer but in many other decisions where we upheld the doctrine of
state immunity as applicable not only to our own government but also to foreign States
sought to be subjected to the jurisdiction of our courts.
xxxxxxxxx
The Court finds that, even under the law of public officers, the acts of the petitioners are
protected by the presumption of good faith, which has not been overturned by the private
respondents. Even mistakes concededly committed by such public officers are not
actionable as long as it is not shown that they were motivated by malice or gross
negligence amounting to bad faith. This too is well-settled."17
Preliminarily, we discuss the procedural grounds cited by petitioners which they assert are
sufficient to have caused the dismissal of Lichauco's petition before the Court of Appeals.
Petitioners claim that contrary to Section 1, Rule 65 of the 1997 Rules of Civil Procedure,
Lichauco failed to attach all pleadings and documents relevant to her petition, and that
those that were attached were merely "duplicate original copies." Lichauco counters that
for the viability of her petition for certiorari, all that she needed to attach were her motion
to dismiss, the RTC orders acting on such motion, her motion for reconsideration of the
denial of her motion to dismiss, and petitioners' opposition to said motion for
reconsideration. She claims that only these motions and submission were relevant to the
resolution of her petition.18
In her comment, Lichaucho claims that she did not have to attach the complaint to the copy
of the petition she sent to the petitioners herein, since the latter obviously retained the
original copy of the complaint they filed.19 However, her petition before the appellate court
does not indicate that the same complaint was included as an attachment, and indeed,
there is a curious absence of any averment on Lichuaco's part that she indeed attached
the said complaint to her petition.20 Certainly, in a petition for certiorari assailing the denial
of a motion to dismiss a complaint, the very complaint itself is a document relevant and
pertinent to the special civil action. It should be remembered that unlike in an ordinary
appeal that is given due course,21 the case record is not automatically elevated to the court
exercising jurisdiction over a special civil action for certiorari; hence there is an even more
impelling need to attach all pleadings and documents to the special civil action, as
mandated under Section 1, Rule 65 of the 1997 Rules of Civil Procedure. After all, how
could the court a quo properly ascertain whether or not the motion to dismiss itself should
have been granted if it did not have a copy of the complaint sought to be dismissed itself.
Nonetheless, the requirement to attach such relevant pleadings under Section 1, Rule 65
is read in relation to Section 3, Rule 46, which states that the failure of the petitioner to
comply with any of the documentary requirements, such as the attachment of such relevant
pleadings, "shall be sufficient ground for the dismissal of the petition." The procedural rule
accords sufficient discretion to the court hearing the special civil action whether or not to
dismiss the petition outright for failure to comply with said requirement. If the court does
dismiss the petition on that ground, the dismissal would be justifiable under Section 3, Rule
46, and generally such action of the court cannot be assailed as constituting either grave
abuse of discretion or reversible error of law. If the court, on the other hand, takes
cognizance of the petition despite such lapses, the phrasing of Section 3, Rule 46
sufficiently justifies such adjudicative recourse. Indeed, the ultimate logic behind rules of
procedure being the promotion of the objective of securing a just, speedy and inexpensive
disposition of every action and proceeding,22 the higher interests of justice may at times
sufficiently warrant the allowance of the petition for certiorari despite such lapses,
especially if they are nonetheless correctible through subsequent submissions.
In any event, the Court is willing to overlook Lichauco's failure to attach the complaint in
her petition for certiorari before the Court of Appeals, an oversight sadly ignored by the
appellate court. There are weighty issues at hand relating to the doctrine of state immunity
from suit and the requisites of a motion to dismiss.
There is a connective issue between these two aspects in that if the State is sued without
its consent, the corresponding suit must be dismissed. At times, it would be teasingly
obvious, even from the moment of the filing of the complaint, that the suit is one against
the State. A cursory examination of the caption of the complaint can sometimes betray
such proscribed intent, as when the suit is directly initiated against the Republic of the
Philippines, any foreign government, or an unincorporated government agency as the
named respondents. In such cases, obviously there is need for immediate caution,
although if it is somehow established that those respondents had given their consent to be
sued, the suit may nonetheless prosper.
The present action was denominated against Lichauco and the unknown awardee,
Lichauco was identified in the complaint as "acting Secretary of the [DOTC]."23 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 which would result in a charge against or
financial liability to the government must be regarded as a suit against the State itself,
although it has not been formally impleaded.24 However, government 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/her duties.
Petitioner insists that Lichauco is being sued for her acts committed in excess of her
authority, ultra vires in nature, and tortious in character. The Court of Appeals responded
that such acts fell within Lichauco's official duties as DOTC Undersecretary, thus enjoying
the presumption that they were performed in good faith and in the regular performance of
official duty. This rationale is pure sophistry and must be rejected outright.
We do not doubt the existence of the presumptions of "good faith" or "regular performance
of official duty", yet these presumptions are disputable25 and may be contradicted and
overcome by other evidence.26 Many civil actions are oriented towards overcoming any
number of these presumptions, and a cause of action can certainly be geared towards
such effect. The very purpose of trial is to allow a party to present evidence overcome the
disputable presumptions involved. Otherwise, if trial is deemed irrelevant or unnecessary,
owing to the perceived indisputability of the presumptions, the judicial exercise would be
relegated to a mere ascertainment of what presumptions apply in a given case, nothing
more. Consequently, the entire Rules of Court is rendered as excess verbiage, save
perhaps for the provisions laying down the legal presumptions.
If this reasoning of the Court of Appeals were ever adopted as a jurisprudential rule, no
public officer could ever be sued for acts executed beyond their official functions or
authority, or for tortious conduct or behavior, since such acts would "enjoy the presumption
of good faith and in the regular performance of official duty". Indeed, few civil actions of
any nature would ever reach the trial stage, if a case can be adjudicated by a mere
determination from the complaint or answer as to which legal presumptions are applicable.
For example, the presumption that a person is innocent of a wrong is a disputable
presumption on the same level as that of the regular performance of official duty.27 A civil
complaint for damages necessarily alleges that the defendant committed a wrongful act or
omission that would serve as basis for the award of damages. With the rationale of the
Court of Appeals, such complaint can be dismissed upon a motion to dismiss solely on the
ground that the presumption is that a person is innocent of a wrong.
So obviously, the Decision of the Court of Appeals cannot receive the imprimatur of this
Court. Still, the question of whether Lichauco may validly invoke state immunity from suit
to secure the outright dismissal of petitioners' complaint warrants closer examination.
As earlier noted, the complaint alleges three (3) causes of action against Lichauco: one
for injunction against her performing any act in relation to orbital slot 153º East Longitude;
one for declaration of nullity of award, seeking to nullify the alleged award of orbital slot
153º East Longitude; and one for damages against Lichauco herself. Evidently, the first
two causes of action stem from Lichauco's act of offering orbital slot 153º East Longitude
for bidding, through the Notice of Offer which was attached to the complaint.
In her Motion to Dismiss, Lichauco asserts that she is being sued for issuing the
aforementioned Notice of Offer, which fell within her official functions as DOTC
Undersecretary for Communications. She claims that it was Secretary Lagdameo who
authorized her to offer orbital slot 153º East Longitude for bidding, and she thus acted well
within the scope of her authority to advise and assist the DOTC Secretary in the formulation
and implementation of department objectives and policies.
The Notice of Offer cites Department Circular 97-01, signed by then DOTC Secretary
Arturo Enrile, as authority for it. The Court has examined the aforementioned Department
Circular, issued on 17 October 1997, which establishes the "Guidelines on the
Procurement of Orbital Slots and Frequency Registration of Philippine Satellites". Therein,
the DOTC is mandated "to conduct a bidding process in case there are competing
applications for any one of the assigned or applied-for-orbital slots"28. Further, the
Department Circular states that "the DOTC shall publish in three newspapers of general
circulation a notice of offer for the government assigned, initiated and applied for orbital
slots."29
Thus, insofar as the first two causes of action are concerned, Lichauco may have a point
when she asserts that they were based on acts which she performed in her capacity as
DOTC Undersecretary. But does this necessarily mean that these two causes of action
may thus be dismissed on the basis of state immunity of suit?
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 party- defendant or
respondent.
On this point, our ruling in J.M. Tuazon & Co. v. Land Tenure Administration30 is material.
Petitioners therein had filed a special civil action for prohibition to nullify Republic Act No.
2616, or law that directed the expropriation of the Tatalon Estate in Quezon City.
Impleaded as respondents were the officials and government agency tasked to undertake
such expropriation. The respondents alleged that the petition for prohibition was actually a
suit against the State without its consent. The Court, through then Associate Justice (later
Chief Justice) Enrique Fernando, debunked the argument, ruling instead that the petition
was within the ambit of judicial review:
[T]he power of judicial review is granted, if not expressly, at least by clear implication from
the relevant provisions of the Constitution. This power may be exercised when the party
adversely affected by either a legislative or executive act, or a municipal ordinance for that
matter, files the appropriate suit to test its validity. The special civil action of prohibition has
been relied upon precisely to restrain the enforcement of what is alleged to be an
unconstitutional statute. As it is a fundamental postulate that the Constitution as the
supreme law is binding on all governmental agencies, failure to observe the limitations
found therein furnishes a sufficient ground for a declaration of nullity of the government
measure challenged. The argument then that the government is the adverse party and
that, therefore, must consent to its being sued certainly is far from persuasive. x x x x31
The Court further noted that it was well-settled for the purpose of obtaining a judicial
declaration of nullity, "it is enough if the respondents or defendants named be the
government officials who would give operation and effect to official action allegedly tainted
with unconstitutionality."32
Unlike in J.M. Tuason, the case at bar does not seek to nullify an unconstitutional law or
measure. However, the first two causes of action do sufficiently impute grave abuse of
discretion against Lichauco in her official capacity. Since judicial review of acts alleged to
have been tainted with grave abuse of discretion is guaranteed by the Constitution, it
necessarily follows in such instances that it is the official concerned who should be
impleaded as defendant or respondent in the appropriate suit.
Moreover, if the suit had been directed against Lichauco alone, and in her personal
capacity, yet it sought, as it now does, the nullification of the Notice of Offer or the awards
thereon, such remedy could not avail even if granted. Lichauco, in her personal capacity,
cannot be directed to set aside the Notice of Offer, the award of the bid, or to issue a new
award herself. It is only because Lichauco was sued in her official capacity as the DOTC
Undersecretary that she, or her successors in office, could be judicially compelled to act
in such fashion.
As to the first two (2) causes of action, the Court rules 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 financial 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.
Parenthetically, it may be noted that at the time of the filing of the complaint, Lichauco
herself was already the acting head of the DOTC, owing to the sudden death of then
Secretary Enrile a few days before. At that stage, any suit seeking to nullify the Notice of
Bid and the alleged award to the "Unknown Bidder" should have properly denominated
Lichauco as the respondent, and not the DOTC.
Nonetheless, as to the first two causes of action, there was a viable ground to dismiss the
complaint: the non-exhaustion of administrative remedies. Indeed, such ground was
alleged by Lichauco in her Motion to Dismiss. Yet the principle of non-exhaustion of
administrative remedies admits to several exceptions. In its Order denying the motion to
dismiss the complaint, the RTC adequately dispensed with the objection, applying the
established exceptions to the rule of non-exhaustion of administrative remedies. To wit:
Turning to the matter pertaining to non-exhaustion of administrative remedies, it is
fundamental that this principle is not an inflexible rule. It yields to many accepted
exceptions. (Rocamora vs. RTC - Cebu, G.R. No. 65307). As in this case, this principle
can be dispensed with when its application would cause great and irreparable damage and
when it does not provide a plain, speedy and adequate remedy.
When the subject orbital slot 153 E was bidded out to other applicants, the damage and
injury plaintiffs stand to suffer was clear, present, and substantiated that this Court was
impelled to provide urgent needed measure such as the issuance of writ of injunction
against the public defendant. Indeed, under the circumstances then obtaining it was
impractical for the plaintiffs to first proceed to the administrative official concerned before
taking court action.33
A different set of principles applies to the third cause of action, anchored as it is on alleged
acts that are tortious in character or otherwise beyond the scope of Lichauco's official
duties. The complaint alleges that Lichauco uttered several disparaging and defamatory
remarks against petitioners and made false assertions against them in her letter to the
Land Bank President.
The veracity of those allegations is of course presented at the trial to be determined on the
basis of the evidence. However, if proven, they would establish liability on the part of
Lichauco that is not shielded by the doctrine of state immunity from suit. The doctrine, as
summarized in Shauf v. Court of Appeals :34
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. 'Inasmuch as the State authorizes only legal acts by its
officers, unauthorized acts of government officials or officers are not acts of the
State, and an action against the officials or officers by one whose rights have been
invaded or violated by such acts, for the protection of his rights, is not a suit against
the State within the rule of immunity of the State from suit. In the same tenor, it has
been said that an action at law or suit in equity against a State officer or the director of a
State department on the ground that, while claiming to act for the State, he violates or
invades the personal and property rights 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.35
Thus, Lichauco, in alleging in her Motion to Dismiss that she is shielded by the State's
immunity from suit, to hypothetically admitted the truth of the allegations in the complaint.
Such hypothetical admission has to be deemed a concession on her part that she had
performed the tortious or damaging acts against the petitioners, which if true, would hold
her liable for damages.
Of course, Lichauco could very well raise the defense of state immunity from suit in regard
to the third cause of action with the assertion that the acts complained of constituting said
cause of action fell within her official functions and were not tortuous in character. Still, to
establish such assertions of fact, a full-blown trial on the merits would be necessary, as
would the case be if Lichauco raised the defense that she did not commit these acts
complained of. Certainly, these defenses cannot be accorded merit before trial, factual as
they are in character.
All told, contrary to the ruling of the Court of Appeals, we find no grave abuse of discretion
on the part of the RTC in denying Lichauco's Motion to Dismiss.
WHEREFORE, the PETITION is GRANTED. The Decision of the Court of Appeals dated
21 February 2000 is SET ASIDE and the Order dated 14 August 1998 of the Regional Trial
Court of Mandaluyong City is REINSTATED. The Regional Trial Court is ordered to try and
decide the case on the merits with deliberate dispatch. No costs.
SO ORDERED.

The doctrine poses no controversy if after trial on the merits, it is established that the public
official concerned had committed illegal or tortious acts against the plaintiff. How does it
apply in relation to a motion to dismiss on the ground of state immunity from suit,
necessarily lodged before trial on the merits?

Our ruling in United States of America v. Reyes36 warrants due consideration. The Court
therein, through then Associate Justice (later Chief Justice) Hilario G. Davide, Jr., ruled
that a motion to dismiss averring immunity from suit of a State and its functionaries was
actually grounded on the specific ground for dismissal of the lack of cause of action, for
even assuming that the defendants had committed the injurious acts complained of, "no
action may be maintained thereon, because of the principle of state
immunity."37 Pertinently, the Court noted that "a motion to dismiss on the ground of failure
to state a cause of action hypothetically admits the truth of the allegations in the complaint."