BACANI v NACOCO G.R. No.

L-6957, November 29, 1956

FACTS:
Petitioners are stenographers in Branch VI of the CIF Manila.

In a pending civil case where the public respondents are involved, they requested for the services of the
stenographers and thereby paid them for the said transcript at the rate of P1 per page, amounting to P714
in total.

However, upon inspecting the books of the corporation, the Auditor General disallowed the payment of
such fees and sought for the recovery of the amounts paid.

The AG required the petitioners to reimburse the amounts invoking that the National Coconut Corporation
is a government entity within the purview of Section 2 of the Revised Administrative Code of 1917
which states that: “‘The Government of the Philippine Islands’ is a term which refers to the corporate
governmental entity through which the functions of government are exercised throughout the Philippine
Islands, including, save as the contrary appears from the context, the various arms through which political
authority is made effective in said Islands, whether pertaining to the central Government or to the
provincial or municipal branches or other form of local government.”, hence, exempted from the
payment of the fees in question.

ISSUE: Whether the NCC is a government entity and is exempted from the payments in question?

RULING: The Court held No. The NCC performs governmental functions for the people’s welfare,
however, it was given a corporate power separate and distinct from our government, for it was made
subject to the provisions of our Corporation Law in so far as its corporate existence and the powers that it
may exercise are concerned.
​NCC is not a government entity and is not exempted from the payment of fees in question;
petitioners are not subject to reimbursement.

AGFA v CUGCO G.R. No. L-21484 – 30 SCRA 649 (1969)

FACTS:
In September 1961, a Collective Bargaining Agreement (CBA) was agreed upon by labor unions
(ASA and AWA) and ACCFA (Agricultural Credit and Cooperative Financing Administration). The
said CBA was supposed to be effective on July 1, 1962. Due to non-implementation of the CBA, the
unions held a strike on October 25, 1962. And 5 days later CUGCO (Confederation of Unions in
Government Corporations and Offices), the mother union of ASA and AWA filed a complaint
against ACCFA due to unfair labor practices, among others, which CUGCO was able to win in court.

In April 1963, ACCFA appealed the decision and while the appeal was pending, Republic Act No. 3844
was passed which effectively turned ACCFA to ACA (Agricultural Credit Administration). In March
1964, ASA and AWA then petitioned that they may have sole bargaining rights with ACA. While this
petition was not yet decided upon, in the same month of March 1964, Executive Order No. 75 was also
passed which placed ACA under the Land Reform Project Administration (LRPA). Notwithstanding
the latest legislation passed, the trial court and the appellate court ruled in favor of ASA and AWA
and ruled that they have bargaining rights with ACA.

ISSUE: Whether or not ASA and AWA can be given sole bargaining rights with ACA.

HELD: No. The Unions have no bargaining rights with ACA. EO 75 placed ACA under the LRPA and by
virtue of RA 3844, the implementation of the Land Reform Program of the government is a
governmental function NOT a proprietary function. Being such, ACA can no longer step down to
deal privately with said unions as it may have been doing when it was still ACCFA.

SHIPSIDE INCORPORATED v THE HON. COURT OF APPEALS

(2001)

FACTS:
On October 29, 1958, Original Certificate of Title (OCT) No. 0-381 was issued in favor of Rafael
Galvez, over four parcels of land Lot 1-4. Lot 1 and 4 was sold by Galves to Mamaril,et. al. who then
sold the said lots to Lepanto Consolidated Mining Company.

Without knowledge of the order issued by the Court of First Instance of La Union, declaring OCT
0-381 null and void, Lepanto Consolidated Mining Company sold Lot 1 and 4 to the petitioner
herein. After twenty four (24) long years, the Office of the Solicitor General filed a complaint for
Revival of Judgment and cancellation of titles, arguing that since the trial court had ruled and declared
OCT No. 0-381 to be null and void, which ruling was subsequently affirmed by the Court of Appeals, the
defendants-successors-in-interest of Rafael Galvez, such as Shipside, have no valid title over the
property covered by OCT No. 0-381, and should be consequently cancelled.

Petitioner Shipside, Inc. filed its Motion to Dismiss as one of its grounds is that the plaintiff Republic
is not the real party-in-interest because the real property, allegedly part of Camp Wallace (Wallace
Air Station), were under the ownership and administration of the Bases Conversion Development
Authority (BCDA) under Republic Act No. 7227. The Solicitor General on the other hand states that the
real party-in-interest in the case at bar being the Republic of the Philippines, it claims it imprescriptible.

ISSUE: Whether or not the Republic may still invoke for the revival of judgment.

DECISION: While it is true that prescription does not run against the State, the same may not be invoked
by the government in this case The Bases Conversion and Development Act of 1992 and Proclamation
No. 216 provided the transfer of Wallace Air Station Areas to the BCDA making it not a mere
agency of the Government but a corporate body performing proprietary functions. With the transfer
of Camp Wallace to the BCDA, the Government no longer has a right or interest to protect, therefore,
imprescriptibility may not be raised as a defense as the same being applicable only in cases where
the government is a party in interest.
State Immunity

E. MERRITT v. GOVERNMENT OF THE PHILIPPINE ISLANDS (21

March 1916)

FACTS:
Plaintiff (Merritt) was driving a motorcycle toward the western part of Calle Padre Faura with a speed of
10 to 12 miles an hour upon crossingTaft Avenue. When he was 10 feet from the southwest intersection,
the General Hospital ambulance turned suddenly to the right side of Taft Ave. without sounding
the horn. Such an act violated the Motor Vehicle Act which prescribes that after passing the center, the
vehicle should have turned south to reach the left side. This resulted to the ambulance’s
collision with the plaintiff who was six feet from the southwest point.

The plaintiff sustained the severe injuries as diagnosed by Dr. Saleeby. Hesuffered depression in the
left parietal region, wound in the same area and in the back of the head, and nose bleeding. He was also
unconscious. His pulse was weak and irregular at the time of his operation (10:00pm). His right leg was
also broken and the fracture extended to the outer skin.

He had a weak mental condition and was also slightly deaf. Because of this condition, the plaintiff could
no longer perform his duties as a contractor efficiently and he had to dissolve the partnership he formed
with the engineer.

Legislature passed Act no. 2457 effective Feb. 3, 1915, enabling the plaintiff to file suit against the
government. The government cannot be sued by an individual without its consent.

USA v Honorable Ruiz (1985)

FACTS:
Sometime in May 1972, the United States organized an auction by invitation for the repair of its
equipment and facilities at the US Naval Station Subic Bay in Zambales, which was one of those
provided in the Military Bases Agreement between the Philippines and the US.

Eligio de Guzman & Co., Inc. responded to the invitation and submitted bids. Subsequently,the
company received from the United States two telegrams requesting it to confirm its price
proposals and for the name of its bonding company; the company, thereby, complied.

In June, 1972, the company received a letter which was signed by Wilham I. Collins, Director for
Contracts Division of the Navy Department of US, saying that the company did not qualify to
receive an award for the projects because of its previous unsatisfactory performance on a repair
contract and that the projects had been awarded to third parties.

The company sued the US and its officers in the US Navy who were responsible for rejecting their
services to order the defendants to allow the company to perform the work for the projects,and in
the event that specific performance was no longer possible, to order the defendants to pay the
damages. The company also asked for the issuance of a writ of preliminary injunction to restrain the
defendants from entering into contracts with third parties for work on the projects.

The defendants entered their special appearance for the purpose only of questioning the jurisdiction of
this court over the complaint being acts and omissions of the individual defendants as agents of
defendant United States of America, a foreign sovereign which has not given her consent to this suit or
any other suit for the causes of action asserted in the complaint.

Subsequently a motion to dismiss the complaint was filed by the defendants, who included an opposition
to the issuance of the writ of preliminary injunction. The trial court denied the motion and issued the writ.

The defendants moved twice to reconsider but to no avail. Hence the instant petition which seeks to
restrain perpetually the proceedings in Civil Case No. 779-M for lack of jurisdiction on the part of the trial
court

ISSUE: Whether the US may be sued?

HELD: No. The traditional rule of State 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. In addition, 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 acts (jure gestionis). The result is that State immunity now
extends only to acts jure imperii.

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. In
this case, the projects are an integral part of the naval base which is devoted to the defense of both
the US and the Philippines, undisputed a function of the government of the highest order, they are not
utilized for nor dedicated to commercial or business purposes.

REPUBLIC OF THE PHILIPPINES v. SANDIGANBAYAN (2003)

FACTS:
The Presidential Commission on Good Government filed a case against former major-general
Josephus Q. Ramas and his alleged mistress Elizabeth Dimaano on violating the “Anti-Graft and
Corrupt Practices Act (RA 3019)” amended as “Forfeiture of unlawfully Acquired Property (RA 1379)”
last of 1 August 1987.

This is because of the questionable properties owned by Gen. Ramas in Cebu and Quezon City, as
well as the found jewelries, 2,870, 000 pesos and $50,000 in the house of Elizabeth
Dimaano.Ramas, a former general of the late president Ferdinand Marcos was accused of having an
“ill-gotten wealth" by the PCGG which was the reason they filed a prima facie case. Dimaano who worked
as an assistant to Gen. Ramas on the years of 19878-1979 had no other source of income. The case
was handled by the Sandiganbayan which dismissed the case on 25 March 1990; on the grounds of
the petitioners had no jurisdiction on the cases.
The PCGG’s responsibilities according to Sec. 2 of E.O.1 was (1) first is the recovery of all ill-gotten
wealth accumulated by former President Ferdinand E. Marcos, his immediate family,
relatives,subordinates and close associates, whether located in the Philippines or abroad, including the
takeover or sequestration of all business enterprises and entities owned or controlled by them, during his
administration, directly or through nominees, by taking undue advantage of their public office and/orusing
their powers, authority, influence, connections or relationship.

And (2) the second was the investigation of such cases of graft and corruption as the President
may assign to the Commission from time to time. Based from the responsibilities given to them, the
petitioners were not assigned by the president to handle Gen. Ramos. And the plaintiffs as well
failed to show that Gen. Ramas had a close association with President Marcos. This is the reason
that the PCGG had no jurisdiction in the case. Another reason why the Sandiganbayan dismissed the
case is because the petitioners’ illegal search and seizure of the items collected that was presented
as evidence. The Sandiganbayan referred the records of the case to the Ombudsman who has the
primary jurisdiction to the “Forfeiture of unlawfully Acquired Property (RA 1379)”, the case records is also
referred to the Commissioner of the Bureau of Internal Revenue for a determination of any tax liability of
Elizabeth Dimaano. The petitioner then raised the case on the Supreme Court and also questioned the
decision of the Sandiganbayan.

ISSUES:
1. Whether or not the PCGG has the authority to investigate Ramas and Dimaano?
2. Whether or not the properties and other belongings confiscated in Dimaano’s house were illegally
seized which will consequently make it inadmissible?

HELD: Petition DISMISSED.

The Supreme Court supported the prior decision of the Sandiganbayan, for the reason; the
plaintiffs only showed the enumeration of the properties Ramas allegedly owned, but did not
showed Ramas’ close association with the late president Ferdinand Marcos. And the president did
not single out Ramas to be investigated by the PCGG. The Supreme Court also pointed out the illegal
seizure of the money and jewelries of Dimaano, as used by the plaintiffs as one of their evidences.
Capt.Rodolfo Sebastian, the head of the raiding team that searched the house of Dimaano admitted in
the stand that they were just given a search warrant to only confiscate the firearms and not the
money and jewelries which was also used as evidence by the petitioners.

MOBIL PHILIPPINES EXPLORATION, INC. v

CUSTOMS ARRASTRE SERVICE and BUREAU of CUSTOMS
(1966)

FACTS:
Four cases of rotary drill parts were shipped from abroad and were consigned to Mobil
Philippines. The Customs Arrastre later delivered to the broker of the consignee three cases only
of the shipment. Mobil Philippines Exploration Inc. filed suit in the CFI against the Customs
Arrastre Service and the Bureau of Customs to recover the value of the undelivered cases plus
other damages.
The defendants filed a motion to dismiss the complaint on the ground that not being a person under the
law, defendants cannot be sued. The court dismissed the complaint on the ground that neither the
Customs Arrastre Service nor the Bureau of Customs is suable.

ISSUE: Can the Customs Arrastre Service or the Bureau of Customs be sued?

HELD: NO. The Bureau of Customs, acting as part of the machinery of the national government in
the operations of arrastre service, pursuant to express legislative mandate and a necessary incident of
its prime governmental function, is immune from suit, there being no statute to the contrary.
The Bureau of Customs has no personality of its own apart from that of the government. Its primary
function is governmental, that of assessing and collecting lawful revenues from imported articles and all
other tariff and customs duties, fees, charges, fines, and penalties.

PHILIPPINE NATIONAL BANK v HON. JUDGE JAVIER PABALAN

(1978)

FACTS:
A judgment was rendered against Philippine Virginia Tobacco Administration (PVTA). Judge Javier
Pabalan issued a writ of execution followed thereafter by a notice of garnishment of the funds of
respondent PVTA which were deposited with the Philippine National Bank (PNB). PNB objected to
the constitutional law doctrine of non-suability of a state. It alleged that such funds are public in character.

ISSUE: Was the contention of PNB correct?

HELD: NO. It is to be admitted that under the present Constitution, what was formerly implicit as a
fundamental doctrine in constitutional law has been set forth in express terms: ―The State may not be
sued without its consent. If the funds appertained to one of the regular departments or offices in the
government, then, certainly such a provision would lie a bar to garnishment. Such is not the case here.
Garnishment would lie. The Supreme Court, in a case brought by the same petitioner precisely
invoking such doctrine, left no doubt that the funds of a public corporation could properly be
made the object of a notice of garnishment.

It is well settled that when the government enters into commercial business, it abandons its
sovereign capacity and is to be treated like any other corporation.

Ministerio vs. CFI of Cebu (1971)

FACTS:
Petitioners as plaintiffs in a complaint filed with the Court of First Instance of Cebu, sought the
payment of just compensation for a registered lot, alleging that in 1927 the National Government
through its authorized representatives took physical and material possession of it and used it for
the widening of the Gorordo Avenue, a national road, Cebu City, without paying just compensation
and without any agreement, either written or verbal.
There was an allegation of repeated demands for the payment of its price or return of its possession, but
defendants Public Highway Commissioner and the Auditor General refused to restore its
possession.

It was further alleged that the appraisal committee of the City of Cebu approved Resolution No. 90,
appraising the reasonable and just price of Lot No. 647-B at P50.00 per square meter or a total
price of P52,250.00.

Thereafter, the complaint was amended on June 30, 1966 in the sense that the remedy prayed for was in
the alternative, either the restoration of possession or the payment of the just compensation.

Respondents, through the then Solicitor General, the principal defense relied upon was that the suit
in reality was one against the government and therefore should be dismissed, no consent having
been shown.

ISSUE: Whether or not plaintiffs can sue defendants Public Highway Commissioner and the Auditor
General, in their capacity as public officials without thereby violating the principle of government immunity
from suit without its consent.

HELD: Yes. The lower court decision is reversed so that the court may proceed with the complaint
and determine the compensation to which petitioners are entitled.
The only relief would be for the government "to make due compensation,"
It was made clear in such a decision that compensation should have been made "as far back as the date
of the taking."
If the constitutional mandate that the owner be compensated for property taken for public use were to be
respected, as it should, then a suit of this character should not be summarily dismissed.
The doctrine of governmental immunity from suit cannot serve as an instrument for perpetrating
an injustice on a citizen.

TORIO v. FONTANILLA (1978)

FACTS:
On October 21, 1978, the Municipal Council of Malasiqui, Pangasinan passed Resolution No. 156
whereby it resolved to manage the 1959 Malasiqui town fiesta celebration on January 21, 22, and
23, 1959. Resolution No. 182 was also passed creating the town fiesta committee with Jose
Macaraeg as Chairman. The amount of P100.00 was also appropriated for the construction of two
stages, one for the zarzuela and the other for the cancionan. On January 22, while in the midst of the
zarzuela, the stage collapsed, pinning Vicente Fontanilla who died thereafter. The heirs of Fontanilla filed
a petition for recovery of damages. Defendant councilors contend that they are merely acting as agents of
the municipality.

ISSUE: 1) Is the celebration of a town fiesta authorized by a municipal council a governmental or a

corporate function of the municipality? 2) Are the councilors liable for the death of Fontanilla?

HELD: The holding of the town fiesta in 1959 by the municipality was an exercise of a private or
proprietary function of municipality. The provision on Section 2282 of the Revised Administrative Code
simply gives authority to the municipality to celebrate a yearly fiesta but it does not impose upon it a duty
to observe one. It follows that under the doctrine of respondent-superior, the municipality is held liable for
damages for the death of Fontanilla. Since it is established that the municipality was acting a proprietary
function, it follows that it stands on the same footing as an ordinary private corporation where officers are
not held liable for the negligence of the corporation merely because of their official relation to it. Thus, the
municipal councilors are absolved from any criminal liability for they did not directly participated in the
defective construction of the stage.

SAN FERNANDO, LA UNION v FIRME (1991)

FACTS:
Petitioner is a municipal corporation existing under and in accordance with the laws of the Republic of
the Philippines. At about 7 am of December 16, 1965, a collision occurred involving a passenger
jeepney driven by Bernardo Balagot and owned by the Estate of Macario Nieveras, a gravel and sand
truck driven by Jose Manandeg and owned by Tanquilino Velasquez and a dump truck of the
petitioner (San Fernando, La Union) and driven by Alfredo Bislig.

Several passengers of the jeepney including Laureano Baniña Sr. died as a result of the injuries
they sustained and 4 others suffered physical injuries. Private respondents instituted an action
against Nieveras and Balagot (Jeep) before the CFI. The defendants filed a third party complaint
against petitioner and Bislig (Dump Truck of San Fernando). The complaint was then amended to
implead petition and Bislig. Petitioner raised as defense lack of cause of action, non suability of the
State, prescription and negligence of the owner and driver of the jeepney. The trial court rendered a
decision ordering the petitioner and Bislig to pay the plaintiffs. The owner and driver of the jeepney
were absolved from liability. Petitioner filed an MR which was dismissed for having been filed out of
time.

ISSUE:
Whether the municipality is liable for the tort committed by its employee?

HELD:
NO. The test of liability of the municipality depends on whether or not the driver acting on behalf
of the municipality is performing governmental or proprietary functions.

It has already been remarked that municipal corporations are suable because their charters grant
them the competence to sue and be sued. Nevertheless, they are generally not liable for torts
committed by them in the discharge of governmental functions and can be held answerable only if it can
be shown that they were acting in a proprietary capacity.

In permitting such entities to be sued, the state merely gives the claimants the right to show the
defendant was not acting in its governmental capacity when the injury was inflicted or that the
case comes under the exceptions recognized by law. Failing this, the claimants cannot recover.

In the case at bar, the driver of the dump truck of the municipality insists that he was on his way to
Naguilan River to get a load of sand and gravel for the repair of the San Fernando municipal
street.
In the absence of any evidence to the contrary, the regularity of the performance of official duty is
presumed. Hence, the driver of the dump truck was performing duties or tasks pertaining to his office.

BACOLOD CITY v PHUTURE VISIONS CO

FACTS:
Phuture Visions Incorporated applied with the Philippine Amusement and Gaming Corporation
(PAGCOR) for an authority to operate bingo games, to which it was issued a provisional Grant of
Authority(GOA).

Phuture likewise applied for the renewal of its mayor’s permit with “professional
services,band/entertainment services”. Upon submission of requirements, Phuture was issued a
“claim slip” for it to claim the actual mayor’s permit.

However, the City of Bacolod found discrepancies in the submitted requirements, wherein the
application form was notarized earlier than the amendment of its Articles of Incorporation to reflect
the company's primary purpose for bingo operations. Aside from this, respondent failed to pay the
necessary permit fee/assessment fee under the applicable tax ordinances of the City of Bacolod.
Without waiting for the release of the mayor's permit, Phuture started the operation of its bingo
outlet at SM Bacolod.

This prompted the former City Legal Officer, Atty. Allan Zamora, to issue a Closure Order dated
March 2, 2007. Phuture claimed that the closure is tainted with malice and bad faith and that City
of Bacolod did not have the legal authority to shut down said bingo operations, especially since
PAGCOR itself had already issued a provisional GOA in its favor. Petitioners contend that the release
of claim slip was mere oversight or human error in the City Government’s employee.

Regional Trial Court ruled in favor of the City of Bacolod, which Phuture appealed. Court of Appeals
remanded the case to the court of origin to further investigate whether, in the manner by which the
closure of the bingo operations was effected, Phuture was denied its proprietary right without due
process of law, and to determine if damages should be awarded. Petitioners contend that hearing the
action for damages effectively violates the City's immunity from suit

ISSUE: Can the City of Bacolod be sued for damages?

RULING: No. The City of Bacolod has not given its permission to be sued. The CA also erred in
adjudging subject business permit as having been issued by respondent City Mayor in the performance of
proprietary functions. The power to issue or grant licenses and business permits is not an exercise
of the government's proprietary function. Instead, it is an exercise of the police power of the State,
ergo governmental act .
REPUBLIC v HIDALGO (2007)

FACTS:
The Office of the President, during the administration President Marcos, wrested possession of the
disputed Arlegui property located at Arlegui St. Malacañang Compound and somehow secured a
certificate of title over it without a conveying deed having been executed to legally justify the
cancellation of the old title in the name of private respondent/property owner Arcilla Mendoza and
the issuance of a new one in the name of petitioner Republic.

The Property thereafter became home to 2 former Presidents.On 2 June 1999, Private respondent filed
an action for the annulment or declaration of nullity of the title and deed of sale and conveyance
against the Republic. The case was initially dismissed by the presiding Judge of the Manila RTC
Branch 35 on the ground of state immunity and was re-raffled to the Manila RTC (Branch 37), with
respondent Vicente A.Hidalgo as presiding Judge. For the failure of the Solicitor General to file a
required answer within the period prayed for in his motion for extension dated 21 May 2003, Judge
Hidalgo declared the Republic in default, allowing the plaintiff to present her evidence. In a
decision by default dated August 27, 2003, Mendoza’s petitions were GRANTED and the court
ordered the Republic to pay the private respondent an amount P1,480,627,688 excluding interests,
plus a P143,600,000 just compensation. A writ of execution thereafter followed.

ISSUE: Is the respondent court’s issuance of the writ of execution against petitioner valid or not?

HELD: No. The assailed trial court’s issuance of the writ of execution against government funds to
satisfy its money judgment is null and void. Consent to be sued does not include the execution of
judgment against it. The power of the court ends when the judgment is rendered. Government
funds and properties may not be seized under writs of execution or garnishment to satisfy such
judgements. Judgements against the state generally operate merely to liquidate and establish the
plaintiff’s claim in the absence of express provision.

As for the respondent judge’s issuance of judgment for the payment of over P2 Billion pesos, the court
held that the latter went around the explicit command of the rules of court which defines the extent of the
relief that may be awarded in a judgment by default.

Accordingly, a writ of certionari was ISSUED in the sense that the respondent judge’s assailed
decision of 2003 insofar as its order of payment of P2 Billion is NULLIFIED as well as the portion
assessing the petitioner for cost of suit.The order of the respondent court for the issuance of a writ of
execution against government funds was also held NULL AND VOID.

NPC DAMA v NPC (2017)

FACTS:
On June 8, 2001, Republic Act 9136, otherwise known as the “Electric Power Industry Reform Act
of 2001” (EPIRA Law), was approved and signed into law by President Gloria Macapagal-Arroyo. It
took effect on 26 June 2001.
Under Section 48 of the EPIRA Law, a new National Power Board (NPB) of Directors was formed.
An energy restructuring committee (Restructuring Committee) was also created to manage the
privatization and the restructuring of the National Power Corporation (NPC), the National Transmission
Corporation (TRANSCO), and the Power Sector Assets and Liabilities Corporation (PSALC).

On November 18 , 2002, pursuant to Section 63 of the EPIRA Law and Rule 33 of the Implementing
Rules and Regulations (IRR), the NPB passed NPB Resolution No. 2002-124, which provided for
“Guidelines on the Separation Program of the NPC and the Selection and Placement of
Personnel.” Under this Resolution, the services of all NPC personnel shall be legally terminated on
January 31, 2003, and shall be entitled to separation benefits provided therein. On the same day,
the NPB approved NPB Resolution 2002-125, constituting a Transition Team to manage and
implement the NPC’s Separation Program.

Contending that the assailed NPB Resolutions were void. Petitioners filed, in their individual and
representative capacities, the present Petition for Injunction to restrain respondents from
implementing NPB Resolution Nos. 2002-124 and 2002-125.

ISSUE: Whether or not NPB Resolution Nos. 2002-124 and 2002-125 were properly enacted.

HELD: The Court’s Decision held that the Resolutions were invalid, because they lacked the
necessary number of votes for their adoption.

Under Section 48, the power to exercise judgment and discretion in running the affairs of the NPC
was vested by the legislature upon the persons composing the National Power Board of Directors.
When applied to public functionaries, discretion refers to a power or right conferred upon them by law,
consisting of acting officially in certain circumstances, according to the dictates of their own judgment and
conscience, and uncontrolled by the judgment or conscience of others.

The legislature chose these secretaries of the various executive departments on the basis of their
personal qualifications and acumen that had made them eligible to occupy their present positions
as department heads. Thus, the department secretaries cannot delegate their duties as members
of the NPB, much less their power to vote and approve board resolutions. Their personal
judgments are what they must exercise in the fulfillment of their responsibilities.

In the present case, it is not difficult to comprehend that in approving NPB Resolutions 2002-124 and
2002-125, it is the representatives of the secretaries of the different executive departments and not
the secretaries themselves who exercised judgment in passing the assailed Resolution. This action
violates the duty imposed upon the specifically enumerated department heads to employ their own
sound discretion in exercising the corporate powers of the NPC.

TIASEI SHIMIZU JOINT VENTURE v COMMISSION ON AUDIT

(2020)

FACTS:
Petitioner TSN won the contract award for the construction of the New Iloilo Airport. As project
proponent, DOTr entered into a contract agreement with TSJV. Following the project's completion and
delivery, it turned out that some TSJV billings had been left unpaid. After TSJV’s initial effort to
collect failed, it filed with the CIAC a Request for Arbitration and Complaint. The CIAC granted
several items of claims. Following the finality of final award, TSJ moved for the execution. The DOTr
opposed on ground that the funds sought to be levied were public in character. CIAC granted the
motion for execution and directed the sheriff to implement the writ of execution. The Ex Officio
Sheriff hereafter served a demand to satisfy the arbitral award on the DOTr and issued notices of
garnishment of the Philippine National Bank (PNB), Philippine Veterans Bank(PVB), Land Bank of the
Philippines (LBP), and Development Bank of the Philippines (DBP).

The DOTr later on advised TSJV in writing, that the arbitral award should be referred to the COA as
condition essential for payment. Meanwhile, the DBP, PVB, and PNB separately informed he Sheriff
that they did no hold funds or property in the DOTr’s name. On the other hand, the LBP advised that
the claimant TSJV must seek the COA’s approval for payment of an arbitral award.

ISSUE: Whether the COA committed grave abuse of discretion, amounting to excess or lack of
jurisdiction in disturbing the immutable and final arbitral award in its favor.

HELD: Yes. To recapitulate, the final and executory arbitral award in this case was validly issued by
the CIAC in the exercise of its jurisdiction over the construction dispute between TSJV and the
DOTr. These parties voluntarily submitted themselves to the arbitration proceedings below. In the
end, both parties accepted the CIAC’s modified final award and neither one nor the other sought a
review with the Court of Appeals or this Court. As it was, the CIAC’s final award is conclusive and
binding on all the factual and legal issues taken up herein and bars their re-litigation in any
subsequent proceeding between the parties.