NOTE: Some cases have two similar case digests, so I picked one that followed

the Facts - Issue - Held/Ruling Format

G.R. No. L-25843 July 25, 1974 Parens Patriae
G.R. No. L-25843 July 25, 1974  MELCHORA CABANAS, plaintiff-appellee,  vs.
FRANCISCO PILAPIL, defendant-appellant.
 
FACTS: The insured, Florentino Pilapil had a child, Millian Pilapil, with a married
woman, the plaintiff, Melchora Cabanas. She was ten years old at the time the
complaint was filed on October 10, 1964. The defendant, Francisco Pilapil, is the
brother of the deceased. The deceased insured himself and instituted as
beneficiary, his child, with his brother to act as trustee during her minority. Upon
his death, the proceeds were paid to him. Hence this complaint by the mother,
with whom the child is living, seeking the delivery of such sum. She filed the bond
required by the Civil Code. Defendant would justify his claim to the retention of
the amount in question by invoking the terms of the insurance policy.
 
 
Issue: WON the mother is the rightful trustee for the minor beneficiary
 
 
Held: on Articles 320 and 321 of the Civil Code. The former provides: "The father,
or in his absence the mother, is the legal administrator of the property pertaining
to the child under parental authority. The property which the unemancipated child
has acquired or may acquire with his work or industry, or by any lucrative title,
belongs to the child in ownership, and in usufruct to the father or mother under
whom he is under parental authority and whose company he lives.
 
 
With the added circumstance that the child stays with the mother, not the uncle,
without any evidence of lack of maternal care, the decision arrived at can stand
the test of the strictest scrutiny. It is further fortified by the assumption, both
logical and natural, that infidelity to the trust imposed by the deceased is much
less in the case of a mother than in the case of an uncle
 
Cabañas vs. Pilapil, 58 SCRA 94
 
FACTS:
Florentino Pilapil, the insured, had a child, Millian Pilapil, with a married woman,
Melchora Cabanas. The complaint was filed on October 10, 1964. The defendant
Francisco Pilapil, the brother of the deceased is the one designated by the latter
to act as his daughter’s trustee during her minority. Thus, upon Florentino’s
death, the proceeds were paid to his brother hence the complaint of the mother
whom the child lives with. Petitioner contends that she should be entitled to act as
the trustee of the insurance policy of her child.
 
ISSUE:
Does the State have the authority to interfere with the terms of the insurance
policy by virtue of parens patriae?
 
HELD:
The appealed decision adheres to the concept that the judiciary, as an agent of
the State, acts as parens patriae. As such, the judiciary cannot remain insensible
to the validity of the petitioner’s plea. “The State shall strengthen the family as a
basic social institution”. The Constitution, moreover, dictates that it is the family
as a unit that has to be strengthened. As such, the decision of the lower courts,
entitling the mother as the trustee, is affirmed.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
People vs. Radam, May 31, 1994 Parens Patriae
 
FACTS
 
FOUND GUILTY OF RAPE and sentenced to reclusion perpetua as well as to
indemnify the offended party P30,000.00 for moral damages, the accused
GUILLERMO CASIPIT y RADAM appeals to us insisting on his innocence. 
 
Appellant and Victim has different versions of the story, Victim’s version was that
she was physically injured and threatened. (Buy rice and Banana in town proper
but went to dagupan because it was cheaper, they watched a movie and after the
movie it started to rain and they have to settle in the Hut, there Guillermo was
lying down and Myrna was sitting. The appellant told the victim to lie down, and
after that her chastity was taken)
Appellant’s version was that they were sweethearts long before, they shared their
affection at that time and no resistance on the side of the victim and sexual
intercourse followed as a matter of course.
 
The argument that the absence of external injuries on the body of the victim belies her
claim that she struggled with appellant to prevent him from raping her is devoid of merit.
The absence of external signs or physical injuries does not negate the commission of
rape. Proof of injuries is not necessary because this is not an essential element of the
crime.
 
the State, as parens patriae, is under obligation to minimize the risk of harm to those who,
because of their minority, are not yet able to fully protect themselves.
 
 
ISSUE
 
WON The petition of the appellant will prosper
 
HELD
 
WHEREFORE, the appealed decision finding accused-appellant GUILLERMO CASIPIT y
RADAM guilty of rape and sentencing him to reclusion perpetua is AFFIRMED, with the
modification that the indemnity in favor of MYRA REYNALDO is increased to P50,000.00.
 
 
 
 
 
PCGG vs. Sandiganbayan, 530 SCRA vs. 13
FACTS

In 1976 the General Bank and Trust Company (GENBANK) encountered financial
difficulties. GENBANK had extended considerable financial support to Filcapital
Development Corporation causing it to incur daily overdrawings on its current
account with Central Bank. Despite the mega loans GENBANK failed to recover
from its financial woes. The Central Bank issued a resolution declaring GENBANK
insolvent and unable to resume business with safety to its depositors, creditors
and the general public, and ordering its liquidation. A public bidding of
GENBANK’s assets was held where Lucio Tan group submitted the winning bid.
Solicitor General Estelito Mendoza filed a petition with the CFI praying for the
assistance and supervision of the court in GENBANK’s liquidation as mandated
by RA 265. After EDSA Revolution I Pres Aquino established the PCGG to recover
the alleged ill-gotten wealth of former Pres Marcos, his family and cronies.
Pursuant to this mandate, the PCGG filed with the Sandiganbayan a complaint for
reversion, reconveyance, restitution against respondents Lucio Tan, at.al. PCGG
issued several writs of sequestration on properties allegedly acquired by them by
taking advantage of their close relationship and influence with former Pres.
Marcos. The abovementioned respondents Tan, et. al are represented as their
counsel, former Solicitor General Mendoza. PCGG filed motions to disqualify
respondent Mendoza as counsel for respondents Tan et. al. with Sandiganbayan.
It was alleged that Mendoza as then Sol Gen and counsel to Central Bank actively
intervened in the liquidation of GENBANK which was subsequently acquired by
respondents Tan et. al., which subsequently became Allied Banking Corporation.
The motions to disqualify invoked Rule 6.03 of the Code of Professional
Responsibility which prohibits former government lawyers from accepting
“engagement” or employment in connection with any matter in which he had
intervened while in the said service. The Sandiganbayan issued a resolution
denyting PCGG’s motion to disqualify respondent Mendoza. It failed to prove the
existence of an inconsistency between respondent Mendoza’s former function as
SolGen and his present employment as counsel of the Lucio Tan group. PCGGs
recourse to this court assailing the Resolutions of the Sandiganbayan.
ISSUE

Whether Rule 6.03 of the Code of Professional Responsibility applies to

respondent Mendoza. The prohibition states: “A lawyer shall not, after leaving
government service, accept engagement or employment in connection with any
matter in which he had intervened while in the said service.”

HELD
The case at bar does not involve the “adverse interest” aspect of Rule 6.03.
Respondent Mendoza, it is conceded, has no adverse interest problem when he
acted as SOlGen and later as counsel of respondents et.al. before the
Sandiganbayan. However there is still the issue of whether there exists a
“congruent-interest conflict” sufficient to disqualify respondent Mendoza from
representing respondents et. al. The key is unlocking the meaning of “matter” and
the metes and bounds of “intervention” that he made on the matter. Beyond doubt
that the “matter” or the act of respondent Mendoza as SolGen involved in the case
at bar is “advising the Central Bank, on how to proceed with the said bank’s
liquidation and even filing the petition for its liquidation in CFI of Manila. The
Court held that the advice given by respondent Mendoza on the procedure to
liquidate GENBANK is not the “matter” contemplated by Rule 6.03 of the Code of
Professional Responsibility. ABA Formal Opinion No. 342 is clear in stressing that
“drafting, enforcing or interpreting government or agency procedures, regulations
and laws, or briefing abstract principles of law are acts which do not fall within the
scope of the term “matter” and cannot disqualify. Respondent Mendoza had
nothing to do with the decision of the Central Bank to liquidate GENBANK. He
also did not participate in the sale of GENBANK to Allied Bank. The legality of the
liquidation of GENBANK is not an issue in the sequestration cases. Indeed, the
jurisdiction of the PCGG does not include the dissolution and liquidation of
banks. Thus, the Code 6.03 of the Code of Professional Responsibility cannot
apply to respondent Mendoza because his alleged intervention while SolGen is an
intervention on a matter different from the matter involved in the Civil case of
sequestration. In the metes and bounds of the “intervention”. The applicable
meaning as the term is used in the Code of Professional Ethics is that it is an act
of a person who has the power to influence the subject proceedings. The evil
sought to be remedied by the Code do not exist where the government lawyer
does not act which can be considered as innocuous such as “ drafting, enforcing,
or interpreting government or agency procedures, regulations or laws or briefing
abstract principles of law.” The court rules that the intervention of Mendoza is not
significant and substantial. He merely petitions that the court gives assistance in
the liquidation of GENBANK. The role of court is not strictly as a court of justice
but as an agent to assist the Central Bank in determining the claims of creditors.
In such a proceeding the role of the SolGen is not that of the usual court litigator
protecting the interest of government.
Petition assailing the Resolution of the Sandiganbayan is denied.
Relevant Dissenting Opinion of Justice Callejo:
Rule 6.03 is a restatement of Canon 36 of the Canons of Professional Ethics: “ A
lawyer, having once held public office or having been in the public employ, should
not after his retirement accept employment in connection with any matter which
he has investigated or passed upon while in such office or employ.”
Indeed, the restriction against a public official from using his public position as a
vehicle to promote or advance his private interests extends beyond his tenure on
certain matters in which he intervened as a public official. Rule 6.03 makes this
restriction specifically applicable to lawyers who once held public office.” A plain
reading shows that the interdiction 1. applies to a lawyer who once served in the
government and 2. relates to his accepting “engagement or employment” in
connection with any matter in which he had intervened while in the service.
 
 
 
 
Callado vs. IRRI, 244 SCRA 210 State Immunity
 
Facts: Ernesto Callado, petitioner, was employed as a driver at the IRRI. One day
while driving an IRRI vehicle on an official trip to the NAIA and back to the IRRI,
petitioner figured in an accident.
 
Petitioner was informed of the findings of a preliminary investigation conducted
by the IRRI's Human Resource Development Department Manager. In view of the
findings, he was charged with:
(1) Driving an institute vehicle while on official duty under the influence of liquor;
(2) Serious misconduct consisting of failure to report to supervisors the failure of
the vehicle to start because of a problem with the car battery, and
(3) Gross and habitual neglect of duties. 
 
Petitioner submitted his answer and defenses to the charges against him.
However,  IRRI issued a Notice of Termination to petitioner.
 
Thereafter, petitioner filed a complaint before the Labor Arbiter for illegal
dismissal, illegal suspension and indemnity pay with moral and exemplary
damages and attorney's fees.
 
IRRI wrote the Labor Arbiter to inform him that the Institute enjoys immunity from
legal process by virtue of Article 3 of Presidential Decree No. 1620, and that it
5

invokes such diplomatic immunity and privileges as an international organization

in the instant case filed by petitioner, not having waived the same. 
 
While admitting IRRI's defense of immunity, the Labor Arbiter, nonetheless, cited
an Order issued by the Institute to the effect that "in all cases of termination,
respondent IRRI waives its immunity," and, accordingly, considered the defense
of immunity no longer a legal obstacle in resolving the case.
 
The NLRC found merit in private respondent's appeal and, finding that IRRI did not
waive its immunity, ordered the aforesaid decision of the Labor Arbiter set aside
and the complaint dismissed. 
 
In this petition petitioner contends that the immunity of the IRRI as an
international organization granted by Article 3 of Presidential Decree No. 1620
may not be invoked in the case at bench inasmuch as it waived the same by virtue
of its Memorandum on "Guidelines on the handling of dismissed employees in
relation to P.D. 1620."
 
Issue: Did the (IRRI) waive its immunity from suit in this dispute which arose from
an employer-employee relationship?
 
Held: No.
 
P.D. No. 1620, Article 3 provides:
Art. 3. Immunity from Legal Process. The Institute shall enjoy immunity from any
penal, civil and administrative proceedings, except insofar as that immunity has
been expressly waived by the Director-General of the Institute or his authorized
representatives.
 
The SC upholds the constitutionality of the aforequoted law. There is in this case
"a categorical recognition by the Executive Branch of the Government that IRRI
enjoys immunities accorded to international organizations, which determination
has been held to be a political question conclusive upon the Courts in order not to
embarrass a political department of Government. 
It is a recognized principle of international law and under our system of separation
of powers that diplomatic immunity is essentially a political question and courts
should refuse to look beyond a determination by the executive branch of the
government, and where the plea of diplomatic immunity is recognized and
affirmed by the executive branch of the government as in the case at bar, it is then
the duty of the courts to accept the claim of immunity upon appropriate
suggestion by the principal law officer of the government or other officer acting
under his direction.
 
The raison d'etre for these immunities is the assurance of unimpeded
performance of their functions by the agencies concerned.
 
The grant of immunity to IRRI is clear and unequivocal and an express waiver by
its Director-General is the only way by which it may relinquish or abandon this
immunity.
 
In cases involving dismissed employees, the Institute may waive its immunity,
signifying that such waiver is discretionary on its part.
 
 
 
 
 
 
 
 
The Holy See vs. Rosario, 238 SCRA vs. 524 State Immunity
 
FACTS: Petition arose from a controversy over a parcel of land. Lot 5-A,
registered under the name Holy See, was contiguous to Lot 5-B and 5-D under the
name of Philippine Realty Corporation (PRC).  The land was donated by the
Archdiocese of Manila to the Papal Nuncio, which represents the Holy See, who
exercises sovereignty over the Vatican City, Rome, Italy, for his residence.
 
Said lots were sold through an agent to Ramon Licup who assigned his rights to
respondents Starbright Sales Enterprises, Inc.
 
When the squatters refuse to vacate the lots, a dispute arose between the two
parties because both were unsure whose responsibility was it to evict the
squatters from said lots. Respondent Starbright Sales Enterprises Inc. insists that
Holy See should clear the property while Holy See says that respondent
corporation should do it or the earnest money will be returned. With this, Msgr.
Cirilios, the agent, subsequently returned the P100,000 earnest money. 
 
The same lots were then sold to Tropicana Properties and Development
Corporation.
 
Starbright Sales Enterprises, Inc. filed a suit for annulment of the sale, specific
performance and damages against Msgr. Cirilios, PRC as well as Tropicana
Properties and Development Corporation. The Holy See and Msgr. Cirilos moved
to dismiss the petition for lack of jurisdiction based on sovereign immunity from
suit. RTC denied the motion on ground that petitioner already "shed off" its
sovereign immunity by entering into a business contract. The subsequent Motion
for Reconsideration was also denied hence this special civil action for certiorari
was forwarded to the Supreme Court. 
 
ISSUE: Whether or not Holy See can invoke sovereign immunity.
 
HELD: The Court held that Holy See may properly invoke sovereign immunity for
its non-suability. As expressed in Sec. 2 Art II of the 1987 Constitution, generally
accepted principles of International Law are adopted by our Courts and thus shall
form part of the laws of the land as a condition and consequence of our admission
in the society of nations.
 
It was noted in Article 31(A) of the 1961 Vienna Convention on Diplomatic
Relations that diplomatic envoy shall be granted immunity from civil and
administrative jurisdiction of the receiving state over any real action relating to
private immovable property. The Department of Foreign Affairs (DFA) certified that
the Embassy of the Holy See is a duly accredited diplomatic missionary to the
Republic of the Philippines and is thus exempted from local jurisdiction and is
entitled to the immunity rights of a diplomatic mission or embassy in this Court. 
 
Furthermore, it shall be understood that in the case at bar, the petitioner has
bought and sold lands in the ordinary course of real estate business, surely, the
said transaction can be categorized as an act jure gestionis. However, petitioner
has denied that the acquisition and subsequent disposal of the lot were made for
profit but claimed that it acquired said property for the site of its mission or the
Apostolic Nunciature in the Philippines. 
 
The Holy See is immune from suit because the act of selling the lot of concern is
non-propriety in nature. The lot was acquired through a donation from the
Archdiocese of Manila, not for a commercial purpose, but for the use of petitioner
to construct the official place of residence of the Papal Nuncio thereof. The
transfer of the property and its subsequent disposal are likewise clothed with a
governmental (non-proprietal) character as petitioner sold the lot not for profit or
gain rather because it merely cannot evict the squatters living in said property. 
 
In view of the foregoing, the petition is hereby GRANTED and the complaints were
dismissed accordingly.
 
 
 
 
Republic of Indonesia vs. Vinzon, June 26, 2003
REPUBLIC OF INDONESIA VS VINZON
G.R. No. 154705 405 SCRA  126 June 26, 2003

THE REPUBLIC OF INDONESIA, HIS EXCELLENCY AMBASSADOR SOERATMIN,

and MINISTER COUNSELLOR AZHARI KASIM, petitioners,
vs.
JAMES VINZON, doing business under the name and style of VINZON TRADE AND
SERVICES, respondent.
 
FACTS: Petitioner entered into a Maintenance Agreement with respondent. The
maintenance agreement includes the following specific equipments: air conditioning
units, generator sets, electrical facilities, water heaters and water motor pumps. The
agreement shall be effective for 4 years.
 
The new Minister Counsellor allegedly found respondent's work and services
unsatisfactory and not in compliance with the standards set in the Agreement. The
respondent terminated the agreement with the respondent. The latter claim that it was
unlawful and arbitrary. Respondent filed a Motion to Dismiss alleging that the Republic of
Indonesia, as a foreign state, has sovereign immunity from suit and cannot be sued as
party-defendant in the Philippines.
 
ISSUE: W/N the CA erred in sustaining the trial court's decision that petitioners have
waived their immunity from suit by using as its basis the provision in the Maintenance
Agreement.
 
HELD: The mere entering into a contract by a foreign state with a private party cannot
be construed as the ultimate test of whether or not it is an act juri imperii or juri gestionis.
Such act is only the start of the inquiry. There is no dispute that the establishment of a
diplomatic mission is an act juri imperii. The state may enter into contracts with private
entities to maintain the premises, furnishings and equipment of the embassy. The
Republic of Indonesia is acting in pursuit of a sovereign activity when it entered into a
contract with the respondent. The maintenance agreement was entered into by the
Republic of Indonesia in the discharge of its governmental functions. It cannot be
deemed to have waived its immunity from suit.
 
 
 
 
 
 
 
 
US vs. Reyes, March 1, 1993
 
US vs. Reyes
G.R. No. 79253, March 1, 1993
 
FACTS: Nelia T. Montoya, an American citizen employed as an identification
checker at the U.S. Navy Exchange (NEX) at the Joint United States Military
Assistance Group (JUSMAG) headquarters in Quezon City, filed a complaint
against Maxine Bradford, also an American citizen working as a manager at
JUSMAG Headquarter’s activity exchange, for damages due to the oppressive and
discriminatory acts committed by the latter in excess of her authority as store
manager of the NEX JUSMAG. This was due to the incident on January 22, 1987
when Bradford searched Montoya’s body and belongings while the latter was
already in the parking area after buying some items NEX JUSMAG’s retail store,
where she had purchasing privileges. To support the motion, the petitioners
claimed that checking of purchases is a routine procedure observed at base retail
outlets to protect and safeguard merchandise, cash, and equipment pursuant to
paragraphs 2 and 4(b) of NAVRESALEACT SUBIC INST. 5500.1. 7. Therefore,
Bradford’s order to check all employee purchases was done in the exercise of her
duties as Manager of the NEX-JUSMAG.
 
ISSUE: Whether or not Bradford enjoys diplomatic immunity.
 
HELD: No. Under Art. 16(b) of the 1953 Military Assistance Agreement creating the
JUSMAG, “only the Chief of the Military Adviser Group and not more than six
other senior members thereof designated under by him will be accorded
diplomatic immunity”. The court also ruled that Art. 31 of the Vienna Convention
on Diplomatic Relations provided an exception; stating that even diplomatic
agents who enjoy immunity are liable if they perform any professional or
commercial activity outside his official functions. Therefore, since Bradford works
as NEX-JUSMAG’s Manager, she is not among those officers granted diplomatic
immunity.
 
 
 
EPG Construction Co., et al. vs. Hon. Gregorio Vigilar, et al., March 16, 2001  
 
G.R. No. 131544.  March 16, 2001
EPG CONSTRUCTION CO., ET. AL. vs. HONORABLE GREGORIO R. VIGILAR, In
His Capacity as Secretary of Public Works and Highways (implied consent)
 
FACTS:
The Ministry of Human Settlement, through the BLISS Development Corporation,
initiated a housing project on a government property along the east bank of the
Manggahan Floodway in Pasig City. For this purpose, the Ministry of Human Settlement
entered into a Memorandum of Agreement (MOA) with the Ministry of Public Works and
Highways, where the latter undertook to develop the housing site and construct thereon
145 housing units. By virtue of the MOA, the Ministry of Public Works and Highways
forged individual contracts with herein petitioners EPG Construction Co., et. al. for the
construction of the housing units.  
By reason of the verbal request and assurance of then DPWH that additional funds
would be available and forthcoming, petitioners agreed to undertake and perform
“additional constructions” for the completion of the housing units, despite the absence
of appropriations and written contracts to cover subsequent expenses for the
“additional constructions.” Petitioners then received payment for the construction work
duly covered by the individual written contracts, thereby leaving an unpaid balance
representing the “additional constructions.”
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 who recognized the existence of implied contracts covering the additional
constructions.
Respondent argues that the State may not be sued in the instant case, invoking the
constitutional doctrine of Non-suability of the State, otherwise known as the Royal
Prerogative of Dishonesty.
 
ISSUE: WON DPWH can invoke state immunity.
 
HELD: 
 
No. Under these circumstances, respondent may not validly invoke the Royal Prerogative
of Dishonesty and conveniently hide under the State’s cloak of invincibility against suit,
considering that this principle yields to certain settled exceptions.  True enough, the
rule, in any case, is not absolute for it does not say that the state may not be sued under
any circumstance. The doctrine of governmental immunity from suit cannot serve as an
instrument for perpetrating an injustice on a citizen.
To be sure, this Court – as the staunch guardian of the citizens’ rights and welfare –
cannot sanction an injustice so patent on its face, and allow itself to be an instrument in
the perpetration thereof.  Justice and equity sternly demand that the State’s cloak of
invincibility against suit be shred in this particular instance, and that petitioners–
contractors be duly compensated – on the basis of quantum meruit – for construction
done on the public works housing project.
 
DEPED vs. Oñate, 524 SCRA 200
 
FACTS:
ISSUES:
 
whether petitioner DECS can be sued in Civil Case No. 8715 without its consent
Ruling:
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.
The Republic of the Philippines need not be impleaded as a party-defendant in Civil
Case No. 8715 considering that it impliedly gave its approval to the involvement of
petitioner DECS in the Deed of Donation. 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.
Principles:
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.
 
 
 
Republic vs. Sandiganbayan, 484 SCRA 119 - cannot find case digest yet
Republic vs. Hidalgo, 534 SCRA 619 - cannot find case digest yet
 
NHA vs. Heirs of Guivelondo, June 19, 2003
 
Fact:  Petitioner filed an Amended Complaint for eminent domain against the
property of the Respondent, that the lands are within a blighted urban center
which petitioner intends to develop as a socialized housing project. Respondents
herein, filed a Manifestation stating that they were waiving their objections to
petitioner’s power to expropriate their properties. Hence, the trial court issued an
Order declaring that the Petitioner has a lawful right to expropriate the properties
of the Respondents. Petitioner, filed with the trial court a Motion to Dismiss
complaint for eminent domain, alleging that the implementation of its socialized
housing project was rendered impossible by the unconscionable value of the land
sought to be expropriated, which the intended beneficiaries can not afford. The
Motion was denied on the ground that the Partial Judgment had already become
final and executory and there was no just and equitable reason to warrant the
dismissal of the case. Petitioner filed a Motion for Reconsideration, which was
denied, thus filing a petition for certiorari with the Court of Appeals which
summarily dismissed the petition. Hence, petitioner filed this petition for review.
Issue: Whether the petitioner can withdraw the expropriation proceedings after
the determination of the Power of Eminent Domain
Held: No, petitioner did not appeal the Order of the trial court dated December 10,
1999, which declared that it has a lawful right to expropriate the properties of
respondent Heirs of Isidro Guivelondo. Hence, the Order became final and may no
longer be subject to review or reversal in any court. A final and executory decision
or order can no longer be disturbed or reopened no matter how erroneous it may
be. Although judicial determinations are not infallible, judicial error should be
corrected through appeals, not through repeated suits on the same claim.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Republic vs. Unimex Micro-Electronics, March 9, 2007 - cannot find digest yet
PTA vs. PGDE, Inc., March 19, 2012 - cannot find digest yet
CNMEG vs. Hon. Santamaria, Feb. 7, 2012
 
G.R. No. 185572               February 7, 2012
CHINA NATIONAL MACHINERY & EQUIPMENT CORP. (GROUP), Petitioner,
vs.
HON. CESAR D. SANTAMARIA, in his official capacity as Presiding Judge of
Branch 145, Regional Trial Court of Makati City, et al.,  Respondents
Facts
On 14 September 2002, petitioner China National Machinery & Equipment Corp.
(Group) (CNMEG), represented by its chairperson, Ren Hongbin, entered into a
Memorandum of Understanding with the North Luzon Railways Corporation
(Northrail), represented by its president, Jose L. Cortes, Jr. for the conduct of a
feasibility study on a possible railway line from Manila to San Fernando, La Union
(the Northrail Project).
On 30 August 2003, the Export Import Bank of China (EXIM Bank) and the
Department of Finance of the Philippines (DOF) entered into a Memorandum of
Understanding (Aug 30 MOU), wherein China agreed to extend Preferential
Buyer’s Credit to the Philippine government to finance the Northrail Project. The
Chinese government designated EXIM Bank as the lender, while the Philippine
government named the DOF as the borrower. Under the Aug 30 MOU, EXIM Bank
agreed to extend an amount not exceeding USD 400,000,000 in favor of the DOF,
payable in 20 years, with a 5-year grace period, and at the rate of 3% per annum.
On 1 October 2003, the Chinese Ambassador to the Philippines, Wang Chungui
(Amb. Wang), wrote a letter to DOF Secretary Jose Isidro Camacho (Sec.
Camacho) informing him of CNMEG’s designation as the Prime Contractor for the
Northrail Project.
On 30 December 2003, Northrail and CNMEG executed a Contract Agreement for
the construction of Section I, Phase I of the North Luzon Railway System from
Caloocan to Malolos on a turnkey basis (the Contract Agreement). The contract
price for the Northrail Project was pegged at USD 421,050,000.
On 26 February 2004, the Philippine government and EXIM Bank entered into a
counterpart financial agreement – Buyer Credit Loan Agreement No. BLA 04055
(the Loan Agreement). In the Loan Agreement, EXIM Bank agreed to extend
Preferential Buyer’s Credit in the amount of USD 400,000,000 in favor of the
Philippine government in order to finance the construction of Phase I of the
Northrail Project.
On 13 February 2006, respondents filed a Complaint for Annulment of Contract
and Injunction with Urgent Motion for Summary Hearing to Determine the
Existence of Facts and Circumstances Justifying the Issuance of Writs of
Preliminary Prohibitory and Mandatory Injunction and/or TRO against CNMEG, the
Office of the Executive Secretary, the DOF, the Department of Budget and
Management, the National Economic Development Authority and Northrail. RTC
Br. 145 issued an Order dated 17 March 2006 setting the case for hearing on the
issuance of injunctive reliefs. On 29 March 2006, CNMEG filed an Urgent Motion
for Reconsideration of this Order. Before RTC Br. 145 could rule thereon, CNMEG
filed a Motion to Dismiss dated 12 April 2006, arguing that the trial court did not
have jurisdiction over (a) its person, as it was an agent of the Chinese
government, making it immune from suit, and (b) the subject matter, as the
Northrail Project was a product of an executive agreement.
On 15 May 2007, RTC Br. 145 issued an Omnibus Order denying CNMEG’s Motion
to Dismiss and setting the case for summary hearing to determine whether the
injunctive reliefs prayed for should be issued. CNMEG then filed a Motion for
Reconsideration, which was denied by the trial court in an Order dated 10 March
2008. Thus, CNMEG filed before the CA a Petition for Certiorari with Prayer for the
Issuance of TRO and/or Writ of Preliminary Injunction dated 4 April 2008.
In the assailed Decision dated 30 September 2008, the appellate court dismissed
the Petition for Certiorari. Subsequently, CNMEG filed a Motion for
Reconsideration, which was denied by the CA in a Resolution dated 5 December
2008.
Issue
Whether CNMEG is entitled to immunity, precluding it from being sued before a
local court.
Ruling
There are two conflicting concepts of sovereign immunity, each widely held and
firmly established. According to the classical or absolute theory, a sovereign
cannot, without its consent, be made a respondent in the courts of another
sovereign. According to the newer or restrictive theory, the immunity of the
sovereign is recognized only with regard to public acts or acts jure imperii of a
state, but not with regard to private acts or acts jure gestionis.
Since the Philippines adheres to the restrictive theory, it is crucial to ascertain the
legal nature of the act involved – whether the entity claiming immunity performs
governmental, as opposed to proprietary, functions. The restrictive application of
State immunity is proper only when the proceedings arise out of commercial
transactions of the foreign sovereign, its commercial activities or economic
affairs. Stated differently, a State may be said to have descended to the level of an
individual and can thus be deemed to have tacitly given its consent to be sued
only when it enters into business contracts. It does not apply where the contract
relates to the exercise of its sovereign functions.
It was CNMEG that initiated the undertaking, and not the Chinese government. The
Feasibility Study was conducted not because of any diplomatic gratuity from or
exercise of sovereign functions by the Chinese government but was plainly a
business strategy employed by CNMEG with a view to securing this commercial
enterprise.
The use of the term “state corporation” to refer to CNMEG was only descriptive of
its nature as a government-owned and/or -controlled corporation, and its
assignment as the Primary Contractor did not imply that it was acting on behalf of
China in the performance of the latter’s sovereign functions. To imply otherwise
would result in an absurd situation, in which all Chinese corporations owned by
the state would be automatically considered as performing governmental
activities, even if they are clearly engaged in commercial or proprietary pursuits.
Even assuming arguendo that CNMEG performs governmental functions, such
claim does not automatically vest it with immunity. This view finds support in
Malong v. Philippine National Railways, in which this Court held that “immunity
from suit is determined by the character of the objects for which the entity was
organized.”
In the case at bar, it is readily apparent that CNMEG cannot claim immunity from
suit, even if it contends that it performs governmental functions. Its designation
as the Primary Contractor does not automatically grant it immunity, just as the
term “implementing agency” has no precise definition for purposes of
ascertaining whether GTZ was immune from suit. Although CNMEG claims to be a
government-owned corporation, it failed to adduce evidence that it has not
consented to be sued under Chinese law. Thus, following this Court’s ruling in
Deutsche Gesellschaft, in the absence of evidence to the contrary, CNMEG is to
be presumed to be a government-owned and -controlled corporation without an
original charter. As a result, it has the capacity to sue and be sued under Section
36 of the Corporation Code.
 An agreement to submit any dispute to arbitration may be construed as an
implicit waiver of immunity from suit.
In the United States, the Foreign Sovereign Immunities Act of 1976 provides for a
waiver by implication of state immunity. In the said law, the agreement to submit
disputes to arbitration in a foreign country is construed as an implicit waiver of
immunity from suit. Although there is no similar law in the Philippines, there is a
reason to apply the legal reasoning behind the waiver in this case.
 

Doctrine of State immunity – Art 16 section 3

Principle of policies and state- Art 2

Separation of powers- Art 6. section 1