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CITY OF ANGELES VS CA, TIMOG SILANGAN If the act in which the unlawful or forbidden cause

DEVELOPMENT CORPORATION G.R. No. consists does not constitute a criminal offense,
97882. 1996 the following rules shall be observed:

In a Deed of Donation , private respondent (1) When the fault is on the part of both
donated to the City of Angeles, 51 parcels of land contracting parties, neither may recover what he
situated in Barrio Pampang, City of Angeles has given by virtue of the contract, or demand the
(50,676 sq m). The amended deed provides that: performance of the others undertaking;
“ The properties donated shall be devoted and
utilized solely for the site of the Angeles City comes into play here. Both petitioners and private
Sports Center. Any change or modification in the respondents are in violation of P.D. 957 as
basic design or concept of said Sports Center amended, for donating and accepting a donation
must have the prior written consent of the of open space less than that required by law, and
DONOR. The properties donated are devoted and for agreeing to build and operate a sports
described as ‘open spaces’ of the DONOR’s complex on the non-buildable open space so
subdivision, and to this effect, the DONEE, upon donated; and petitioners, for constructing a drug
acceptance of this donation, releases the DONOR rehabilitation center on the same non-buildable
and/or assumes any and all obligations and area.
liabilities appertaining to the properties donated.
On 1988, petitioners started the construction of a Moreover, since the condition to construct a
drug rehabilitation center on a portion of the sports complex on the donated land has
donated land. Upon learning thereof, private previously been shown to be contrary to law,
respondent protested such action for being therefore, stipulation No. 8 of the amended deed
violative of the terms and conditions and also cannot be implemented because (1) no valid
offered another site for the rehabilitation center. stipulation of the amended deed had been
However, petitioners rejected the alternative breached, and (2) it is highly improbable that the
because the site was too isolated and had no decree would have allowed the return of the
electric and water facilities. Private respondent donated land for open space under any
filed a complaint for breach of the conditions circumstance, considering the non-alienable
imposed in the amended deed of donation and character of such open space, in the light of the
seeking the revocation of the donation. Petitioners second Whereas clause of P.D. 1216 which
admitted the commencement of the construction declares that xxx such open spaces, roads, alleys
but alleged that the conditions imposed in the and sidewalks in residential subdivisions are for
amended deed were contrary to Municipal public use and are, therefore, beyond the
Ordinance No. 1, Series of 1962, otherwise commerce of men.
known as the Subdivision Ordinance of the
Municipality of Angeles. Further, as a matter of public policy, private
respondent cannot be allowed to evade its
ISSUE: statutory obligation to donate the required open
Revocation of a Mandatory Donation Because of space through the expediency of invoking
Non-compliance With an Illegal Condition petitioners breach of the aforesaid condition. It is
a familiar principle that the courts will not aid
either party to enforce an illegal contract, but will
HELD: leave them both where they find them. Neither
The private respondent contends that the building party can recover damages from the other arising
of said drug rehabilitation center is violative of the from the act contrary to law, or plead the same as
Amended Deed of Donation. Therefore, under a cause of action or as a defense. Each must
Article 764 of the New Civil Code and stipulation bear the consequences of his own acts.[19]
no. 8 of the amended deed, private respondent is
empowered to revoke the donation when the There is therefore no legal basis whatsoever to
donee has failed to comply with any of the revoke the donation of the subject open space
conditions imposed in the deed. and to return the donated land to private
respondent. The donated land should remain with
We disagree. Article 1412 of the Civil Code which the donee as the law clearly intended such open
provides that: spaces to be perpetually part of the public
domain, non-alienable and permanently devoted beneficiary of the construction and operation of
to public use as such parks, playgrounds or the proposed drug rehabilitation center, undertake
recreation areas. the demolition and removal of said center, and if
feasible, recover the cost thereof from the city
Removal/Demolition of Drug Rehabilitation Center officials concerned.

Inasmuch as the construction and operation of the WHEREFORE, the assailed Decision of the Court
drug rehabilitation center has been established to of Appeals is hereby MODIFIED as follows:
be contrary to law, the said center should be
removed or demolished. At this juncture, we (1) Petitioners are hereby ENJOINED perpetually
hasten to add that this Court is and has always from operating the drug rehabilitation center or
been four-square behind the governments efforts any other such facility on the donated open
to eradicate the drug scourge in this country. But space.
the end never justifies the means, and however
laudable the purpose of the construction in (2) Petitioner City of Angeles is ORDERED to
question, this Court cannot and will not undertake the demolition and removal of said
countenance an outright and continuing violation drug rehabilitation center within a period of three
of the laws of the land, especially when (3) months from finality of this Decision, and
committed by public officials. thereafter, to devote the said open space for
public use as a park, playground or other
In theory, the cost of such demolition, and the recreational use.
reimbursement of the public funds expended in
the construction thereof, should be borne by the (3) The Amended Deed of Donation dated
officials of the City of Angeles who ordered and November 26, 1984 is hereby declared valid and
directed such construction. This Court has time subsisting, except that the stipulations or
and again ruled that public officials are not conditions therein concerning the construction of
immune from damages in their personal the Sports Center or Complex are hereby
capacities arising from acts done in bad faith. declared void and as if not imposed, and
Otherwise stated, a public official may be liable in therefore of no force and effect.
his personal capacity for whatever damage he
may have caused by his act done with malice and No costs.
in bad faith or beyond the scope of his authority or
jurisdiction.[20] In the instant case, the public SO ORDERED.
officials concerned deliberately violated the law
and persisted in their violations, going so far as
attempting to deceive the courts by their
pretended change of purpose and usage for the WYLIE VS RARANG
center, and making a mockery of the judicial
system. Indisputably, said public officials acted Petitioner M. H. Wylie was the assistant
beyond the scope of their authority and administrative officer while petitioner Capt. James
jurisdiction and with evident bad faith. However, Williams was the commanding officer of the U. S.
as noted by the trial court,[21] the petitioners Naval Base in Subic Bay, Olongapo City. Private
mayor and members of the Sangguniang respondent Aurora I. Rarang was an employee in
Panlungsod of Angeles City were sued only in the office of the Provost Marshal assigned as
their official capacities, hence, they could not be merchandise control guard.
held personally liable without first giving them
their day in court. Prevailing jurisprudence[22] M. H. Wylie, in his capacity as assistant
holding that public officials are personally liable administrative officer of the U.S. Naval Station
for damages arising from illegal acts done in bad supervised the publication of the "Plan of the Day"
faith are premised on said officials having been (POD) which was published daily by the US Naval
sued both in their official and personal capacities. Base station. The POD featured important
announcements, necessary precautions, and
After due consideration of the circumstances, we general matters of interest to military personnel.
believe that the fairest and most equitable One of the regular features of the POD was the
solution is to have the City of Angeles, donee of "action line inquiry." On February 3, 1978, the
the subject open space and, ostensibly, the main POD made a publication, under the "NAVSTA
ACTION LINE INQUIRY" which mentioned a much to hold him responsible for everything which
certain person named “Auring” who is described goes wrong on the base. This may be true as a
as a disgrace to her division and to the Office of general rule. In this particular case, however, the
the Provost Marshal. records show that the offensive publication was
sent to the commanding officer for approval and
The private respondent was the only one who he approved it. The factual findings of the two
was named "Auring" in the Office of the Provost courts below are based on the records. The
Marshal and was subsequently proven that it was petitioners have shown no convincing reasons
her being referred to when petitioner M. H. Wylie why our usual respect for the findings of the trial
wrote her a letter of apology for the "inadvertent" court and the respondent court should be withheld
publication. The private respondent the filed an in this particular case and why their decisions
action for damages alleging that the article should be reversed.
constituted false, injurious, and malicious
defamation and libel tending to impeach her Article 2176 of the Civil Code prescribes a civil
honesty, virtue and reputation exposing her to liability for damages caused by a person's act or
public hatred, contempt and ridicule; and that the omission constituting fault or negligence, to wit:
libel was published and circulated in the English Art. 2176. Whoever by act or omission, causes
language and read by almost all the U. S. Naval damage to another, there being fault or
Base personnel. negligence is obliged to pay for the damage done.
Such fault or negligence, if there is no pre-existing
The defendants however contended by filing a contractual relation between the parties, is called
motion to dismiss based on the grounds that the a quasi-delict and is governed by the provisions of
defendants M. H. Wylie and Capt. James Williams this Chapter.
acted in the performance of their official functions "Fault" or "negligence" in this Article covers not
as officers of the United States Navy and are, only acts "not punishable by law" but also acts
therefore, immune from suit; and the United criminal in character, whether intentional or
States Naval Base is an instrumentality of the US voluntary or negligent."
government which cannot be sued without its
consent. Moreover, Article 2219(7) of the Civil Code
provides that moral damages may be recovered
ISSUE: in case of libel, slander or any other form of
Whether or not the officials of the United States defamation. In effect, the offended party in these
Naval Base are immune from suit. cases is given the right to receive from the guilty
party moral damages for injury to his feelings and
HELD: reputation in addition to punitive or exemplary
The subject article in the US Newsletter POD damages.
dated February 3, 1978 mentions a certain
"Auring" as ". . a disgrace to her division and to Indeed the imputation of theft contained in the
the Office of the Provost Marshal." The same POD dated February 3, 1978 is a defamation
article explicitly implies that Auring was against the character and reputation of the private
consuming and appropriating for herself respondent. Petitioner Wylie himself admitted that
confiscated items like cigarettes and foodstuffs. the Office of the Provost Marshal explicitly
There is no question that the Auring alluded to in recommended the deletion of the name Auring if
the Article was the private respondent as she was the article were published. The petitioners,
the only Auring in the Office of the Provost however, were negligent because under their
Marshal. Moreover, as a result of this article, the direction they issued the publication without
private respondent was investigated by her deleting the name "Auring." Such act or omission
supervisor. Before the article came out, the is ultra vires and cannot be part of official duty. It
private respondent had been the recipient of was a tortious act which ridiculed the private
commendations by her superiors for honesty in respondent. As a result of the petitioners' act, the
the performance of her duties. private respondent, according to the record,
suffered besmirched reputation, serious anxiety,
It may be argued that Captain James Williams as wounded feelings and social humiliation, specially
commanding officer of the naval base is far so, since the article was baseless and false. The
removed in the chain of command from the petitioners, alone, in their personal capacities are
offensive publication and it would be asking too
liable for the damages they caused the private showing that the State has consented to be sued,
respondent. either expressly or by implication through the use
of statutory language too plain to be
misinterpreted. It may be invoked by the courts
REPUBLIC VS FELICIANO sua sponte at any stage of the proceedings.
Waiver of immunity, being a derogation of
Facts: sovereignty, will not be inferred lightly. but must
be construed in strictissimi juris (of strictest
The appeal was filed by 86 settlers of Barrio of right). Moreover, the Proclamation is not a
Salvacion, representing the Republic of the legislative act. The consent of the State to be
Philippines to dismiss the complaint filed by sued must emanate from statutory authority.
Feliciano, on the ground that the Republic of the Waiver of State immunity can only be made by an
Philippines cannot be sued without its consent. act of the legislative body.
Prior to this appeal, respondent Pablo Feliciano
filed a complaint with the Court of First Instance Ruling/s:
against the Republic of the Philippines,
represented by the Land Authority, for the No. The doctrine of non-suability of the State has
recovery of ownership and possession of a parcel proper application in this case. The plaintiff has
of land consisting of four lots. The trial court impleaded the Republic of the Philippines as
rendered a decision declaring Lot No. 1 to be the defendant in an action for recovery of ownership
private property of Feliciano and the rest of the and possession of a parcel of land, bringing the
property, Lots 2, 3 and 4, reverted to the public State to court just like any private person who is
domain. claimed to be usurping a piece of property. A suit
for the recovery of property is not an action in
The trial court reopened the case due to the filing rem, but an action in personam. It is an action
of a motion to intervene and to set aside the directed against a specific party or parties, and
decision of the trial court by 86 settlers, alleging any judgment therein binds only such party or
that they had been in possession of the land for parties. The complaint filed by plaintiff, the private
more than 20 years under claim of ownership. respondent herein, is directed against the
The trial court ordered the settlers to present their Republic of the Philippines, represented by the
evidence but they did not appear at the day of Land Authority, a governmental agency created
presentation of evidence. Feliciano, on the other by Republic Act No. 3844.
hand, presented additional evidence. Thereafter,
the case was submitted for decision and the trial The complaint is clearly a suit against the State,
court ruled in favor of Feliciano.The settlers which under settled jurisprudence is not
immediately filed a motion for reconsideration. permitted, except upon a showing that the State
The case was reopened to allow them to present has consented to be sued, either expressly or by
their evidence. But before this motion was acted implication through the use of statutory language
upon, Feliciano filed a motion for execution with too plain to be misinterpreted. There is no such
the Appellate Court but it was denied. showing in the instant case. Worse, the complaint
itself fails to allege the existence of such consent.
The settlers filed a motion to dismiss on the
ground that the Republic of the Philippines cannot MERITT vs GOVT OF THE PHILS
be sued without its consent and hence the action
cannot prosper. The motion was opposed by The facts of the case took place in the 1910’s. E.
Feliciano. Merritt was a constructor who was excellent at
his work. One day, while he was riding his
Issue/s: motorcycle along Calle Padre Faura, he was
bumped by a government ambulance. The driver
Whether or not the state can be sued for recovery of the ambulance was proven to have been
and possession of a parcel of land. negligent. Because of the incident, Merritt was
hospitalized and he was severely injured beyond
Discussions: rehabilitation so much so that he could never
perform his job the way he used to and that he
A suit against the State, under settled cannot even earn at least half of what he used to
jurisprudence is not permitted, except upon a earn.
Shipping Co., alleging that he purchased from the
In order for Merritt to recover damages, he sought Shipping Commission the vessel for P200,000,
to sue the government which later authorized paying P50,000 down and agreeing to pay the
Merritt to sue the government by virtue of Act balance in instalments. To secure the payment of
2457 enacted by the legislature (An Act the balance of the purchase price, he executed a
authorizing E. Merritt to bring suit against the chattel mortgage of said vessel in favor of the
Government of the Philippine Islands and Shipping Commission. For various reasons,
authorizing the Attorney-General of said Islands among them the non-payment of the installments,
to appear in said suit). The lower court then the Shipping Commission tool possession of said
determined the amount of damages and ordered vessel and considered the contract of sale
the government to pay the same. cancelled. The Shipping Commission chartered
and delivered said vessel to the defendant-
ISSUE: Whether or not the government is liable appellant Pan Oriental Shipping Co. subject to the
for the negligent act of the driver of the approval of the President of the Philippines.
ambulance. Plaintiff appealed the action of the Shipping
Commission to the President of the Philippines
HELD: No. By consenting to be sued a state and, in its meeting the Cabinet restored him to all
simply waives its immunity from suit. It does not his rights under his original contract with the
thereby concede its liability to plaintiff, or create Shipping Commission. Plaintiff had repeatedly
any cause of action in his favor, or extend its demanded from the Pan Oriental Shipping Co. the
liability to any cause not previously recognized. It possession of the vessel in question but the latter
merely gives a remedy to enforce a preexisting refused to do so.
liability and submits itself to the jurisdiction of the
court, subject to its right to interpose any lawful Plaintiff, prayed that, upon the approval of the
defense. It follows therefrom that the state, by bond accompanying his complaint, a writ of
virtue of such provisions of law, is not responsible replevin be issued for the seizure of said vessel
for the damages suffered by private individuals in with all its equipment and appurtenances, and
consequence of acts performed by its employees that after hearing, he be adjudged to have the
in the discharge of the functions pertaining to their rightful possession thereof . The lower court
office, because neither fault nor even negligence issued the writ of replevin prayed for by Froilan
can be presumed on the part of the state in the and by virtue thereof the Pan Oriental Shipping
organization of branches of public service and in Co. was divested of its possession of said vessel.
the appointment of its agents. The State can only
be liable if it acts through a special agent (and a Pan Oriental protested to this restoration of
special agent, in the sense in which these words Plaintiff ‘s rights under the contract of sale, for the
are employed, is one who receives a definite and reason that when the vessel was delivered to it,
fixed order or commission, foreign to the exercise the Shipping Administration had authority to
of the duties of his office if he is a special official) dispose of said authority to the property, Plaintiff
so that in representation of the state and being having already relinquished whatever rights he
bound to act as an agent thereof, he executes the may have thereon. Plaintiff paid the required cash
trust confided to him. of P10,000.00 and as Pan Oriental refused to
surrender possession of the vessel, he filed an
In the case at bar, the ambulance driver was not a action to recover possession thereof and have
special agent nor was a government officer acting him declared the rightful owner of said property.
as a special agent hence, there can be no liability The Republic of the Philippines was allowed to
from the government. “The Government does not intervene in said civil case praying for the
undertake to guarantee to any person the fidelity possession of the in order that the chattel
of the officers or agents whom it employs, since mortgage constituted thereon may be foreclosed.
that would involve it in all its operations in endless
embarrassments, difficulties and losses, which Issues:
would be subversive of the public interest.”
Whether or not the Court has jurisdiction over the
FROILAN vs PAN ORIENTAL intervenor with regard to the counterclaim.
Plaintiff, Fernando Froilan filed a complaint
against the defendant-appellant, Pan Oriental Discussions:
because "A request to confirm a price proposal
When the government enters into a contract, for confirms the acceptance of a bid pursuant to
the State is then deem to have divested itself of defendant United States' bidding practices."
the mantle of sovereign immunity and descended (Rollo, p. 30.) The truth of this allegation has not
to the level of the ordinary individual. Having done been tested because the case has not reached
so, it becomes subject to judicial action and the trial stage.]
In June, 1972, the company received a letter
Rulings: which was signed by Wilham I. Collins, Director,
Contracts Division, Naval Facilities Engineering
Yes. The Supreme Court held that the Command, Southwest Pacific, Department of the
government impliedly allowed itself to be sued Navy of the United States, who is one of the
when it filed a complaint in intervention for the petitioners herein. The letter said that the
purpose of asserting claim for affirmative relief company did not qualify to receive an award for
against the plaintiff to the recovery of the vessel. the projects because of its previous unsatisfactory
The immunity of the state from suits does not performance rating on a repair contract for the
deprive it of the right to sue private parties in its sea wall at the boat landings of the U.S. Naval
own courts. The state as plaintiff may avail itself Station in Subic Bay. The letter further said that
of the different forms of actions open to private the projects had been awarded to third parties. In
litigants. In short, by taking the initiative in an the abovementioned Civil Case No. 779-M, the
action against a private party, the state company sued the United States of America and
surrenders its privileged position and comes down Messrs. James E. Galloway, William I. Collins and
to the level of the defendant. The latter Robert Gohier all members of the Engineering
automatically acquires, within certain limits, the Command of the U.S. Navy. The complaint is to
right to set up whatever claims and other order the defendants to allow the plaintiff to
defenses he might have against the state. perform the work on the projects and, in the event
that specific performance was no longer possible,
to order the defendants to pay damages. The
US vs RUIZ company also asked for the issuance of a writ of
preliminary injunction to restrain the defendants
At times material to this case, the United States of from entering into contracts with third parties for
America had a naval base in Subic, Zambales. work on the projects.
The base was one of those provided in the
Military Bases Agreement between the The defendants entered their special appearance
Philippines and the United States. for the purpose only of questioning the jurisdiction
of this court over the subject matter of the
Sometime in May, 1972, the United States invited complaint and the persons of defendants, the
the submission of bids for the following projects subject matter of the complaint being acts and
omissions of the individual defendants as agents
1. Repair offender system, Alava Wharf at of defendant United States of America, a foreign
the U.S. Naval Station Subic Bay, Philippines. sovereign which has not given her consent to this
suit or any other suit for the causes of action
2. Repair typhoon damage to NAS Cubi asserted in the complaint." (Rollo, p. 50.)
shoreline; repair typhoon damage to shoreline
revetment, NAVBASE Subic; and repair to Leyte Subsequently the defendants filed a motion to
Wharf approach, NAVBASE Subic Bay, dismiss the complaint which included an
Philippines. opposition to the issuance of the writ of
preliminary injunction. The company opposed the
Eligio de Guzman & Co., Inc. responded to the motion. The trial court denied the motion and
invitation and submitted bids. Subsequent thereto, issued the writ. The defendants moved twice to
the company received from the United States two reconsider but to no avail. Hence the instant
telegrams requesting it to confirm its price petition which seeks to restrain perpetually the
proposals and for the name of its bonding proceedings in Civil Case No. 779-M for lack of
company. The company complied with the jurisdiction on the part of the trial court.
requests. [In its complaint, the company alleges
that the United States had accepted its bids The petition is highly impressed with merit.
of the accident, was a licensed professional driver
Issue: Whether the US naval base in bidding for and who qualified for employment as such regular
said contracts exercise governmental functions to driver of respondent after having passed the
be able to invoke state immunity. written and oral examinations on traffic rules and
maintenance of vehicles given by National
Held: Irrigation Administration authorities.
The traditional role of the state immunity
excempts a state from being sued in the courts of The within petition is thus an off-shot of the action
another state without its consent or waiver. This (Civil Case No. SJC-56) instituted by petitioners-
rule is necessary consequence of the principle of spouses on April 17, 1978 against respondent
indepemndence and equality of states. Howecer, NIA before the then Court of First Instance of
the rules of international law are not petrified; they Nueva Ecija, Branch VIII at San Jose City, for
are continually and evolving and because the damages in connection with the death of their son
activities of states have multiplied. It has been resulting from the aforestated accident.
necessary to distinguish them between sovereign
and governmental acts and private, commercial After trial, the trial court rendered judgment on
and proprietory acts. the result is that state March 20, 1980 which directed respondent
immunity now extends only to sovereign and National Irrigation Administration to pay damages
governmental acts. (death benefits) and actual expenses to
petitioners. The dispositive portion of the decision
The restrictive application of state immunity is reads thus:
proper only when the proceedings arise out of
commercial transactions of the foreign sovereign. . . . . . Judgment is here rendered ordering the
Its commercial activities of economic affairs. A defendant National Irrigation Administration to pay
state may be descended to the level of an to the heirs of the deceased P12,000.00 for the
individual and can thus be deemed to have tacitly death of Francisco Fontanilla; P3,389.00 which
given its consent to be sued. Only when it enters the parents of the deceased had spent for the
into business contracts. It does not apply where hospitalization and burial of the deceased
the conracts relates the exercise of its sovereign Francisco Fontanilla; and to pay the costs. (Brief
function. In this case, the project are integral part for the petitioners spouses Fontanilla, p. 4; Rollo,
of the naval base which is devoted to the defense p. 132)
of both US and phils., indisputably, a function of
the government of highest order, they are not Respondent National Irrigation Administration
utilized for , nor dedicated to commercial or filed on April 21, 1980, its motion for
business purposes. reconsideration of the aforesaid decision which
respondent trial court denied in its Order of June
Sps. Fontanilla vs Villasor 13, 1980. Respondent National Irrigation
Administration thus appealed said decision to the
It appears that on August 21, 1976 at about 6:30 Court of Appeals (C.A.-G.R. No. 67237- R) where
P.M., a pickup owned and operated by it filed its brief for appellant in support of its
respondent National Irrigation Administration, a position.
government agency bearing Plate No. IN-651,
then driven officially by Hugo Garcia, an Instead of filing the required brief in the aforecited
employee of said agency as its regular driver, Court of Appeals case, petitioners filed the instant
bumped a bicycle ridden by Francisco Fontanilla, petition with this Court.
son of herein petitioners, and Restituto Deligo, at
Maasin, San Jose City along the Maharlika The sole issue for the resolution of the Court is:
Highway. As a result of the impact, Francisco Whether or not the award of moral damages,
Fontanilla and Restituto Deligo were injured and exemplary damages and attorney's fees is legally
brought to the San Jose City Emergency Hospital proper in a complaint for damages based on
for treatment. Fontanilla was later transferred to quasi-delict which resulted in the death of the son
the Cabanatuan Provincial Hospital where he of herein petitioners.
Petitioners allege:
Garcia was then a regular driver of respondent
National Irrigation Administration who, at the time
1. The award of moral damages is decision does not categorically contain such
specifically allowable. under paragraph 3 of finding.
Article 2206 of the New Civil Code which provides
that the spouse, legitimate and illegitimate 2. The filing of the "Appearance and Urgent
descendants and ascendants of the deceased Motion For Leave to File Plaintiff-Appellee's Brief"
may demand moral damages for mental anguish dated December 28, 1981 by petitioners in the
by reason of the death of the deceased. Should appeal (CA-G.R. No. 67237-R; and G. R.
moral damages be granted, the award should be No.61045) of the respondent National Irrigation
made to each of petitioners-spouses individually Administration before the Court of Appeals, is an
and in varying amounts depending upon proof of explicit admission of said petitioners that the
mental and depth of intensity of the same, which herein petition, is not proper. Inconsistent
should not be less than P50,000.00 for each of procedures are manifest because while
them. petitioners question the findings of fact in the
Court of Appeals, they present only the questions
2. The decision of the trial court had made of law before this Court which posture confirms
an impression that respondent National Irrigation their admission of the facts.
Administration acted with gross negligence
because of the accident and the subsequent 3. The fact that the parties failed to agree on
failure of the National Irrigation Administration whether or not negligence caused the vehicular
personnel including the driver to stop in order to accident involves a question of fact which
give assistance to the, victims. Thus, by reason of petitioners should have brought to the Court of
the gross negligence of respondent, petitioners Appeals within the reglementary period. Hence,
become entitled to exemplary damages under the decision of the trial court has become final as
Arts. 2231 and 2229 of the New Civil Code. to the petitioners and for this reason alone, the
petition should be dismissed.
3. Petitioners are entitled to an award of
attorney's fees, the amount of which (20%) had 4. Respondent Judge acted within his
been sufficiently established in the hearing of May jurisdiction, sound discretion and in conformity
23, 1979. with the law.

4. This petition has been filed only for the 5. Respondents do not assail petitioners'
purpose of reviewing the findings of the lower claim to moral and exemplary damages by reason
court upon which the disallowance of moral of the shock and subsequent illness they suffered
damages, exemplary damages and attorney's because of the death of their son. Respondent
fees was based and not for the purpose of National Irrigation Administration, however, avers
disturbing the other findings of fact and that it cannot be held liable for the damages
conclusions of law. because it is an agency of the State performing
governmental functions and driver Hugo Garcia
The Solicitor General, taking up the cudgels for was a regular driver of the vehicle, not a special
public respondent National Irrigation agent who was performing a job or act foreign to
Administration, contends thus: his usual duties. Hence, the liability for the
tortious act should. not be borne by respondent
1. The filing of the instant petition is rot government agency but by driver Garcia who
proper in view of the appeal taken by respondent should answer for the consequences of his act.
National Irrigation Administration to the Court of
Appeals against the judgment sought to be 6. Even as the trial court touched on the
reviewed. The focal issue raised in respondent's failure or laxity of respondent National Irrigation
appeal to the Court of Appeals involves the Administration in exercising due diligence in the
question as to whether or not the driver of the selection and supervision of its employee, the
vehicle that bumped the victims was negligent in matter of due diligence is not an issue in this case
his operation of said vehicle. It thus becomes since driver Garcia was not its special agent but a
necessary that before petitioners' claim for moral regular driver of the vehicle.
and exemplary damages could be resolved, there
should first be a finding of negligence on the part The sole legal question on whether or not
of respondent's employee-driver. In this regard, petitioners may be entitled to an award of moral
the Solicitor General alleges that the trial court and exemplary damages and attorney's fees can
very well be answered with the application of Arts. provision. (Torts and Damages, Sangco, p. 347,
2176 and 2180 of theNew Civil Code. 1984 Ed.)

Art. 2176 thus provides: Certain functions and activities, which can be
performed only by the government, are more or
Whoever by act omission causes damage to less generally agreed to be "governmental" in
another, there being fault or negligence, is obliged character, and so the State is immune from tort
to pay for damage done. Such fault or negligence, liability. On the other hand, a service which might
if there is no pre-existing cotractual relation as well be provided by a private corporation, and
between the parties, is called a quasi-delict and is particularly when it collects revenues from it, the
governed by the provisions of this Chapter function is considered a "proprietary" one, as to
which there may be liability for the torts of agents
Paragraphs 5 and 6 of Art. 21 80 read as follows: within the scope of their employment.

Employers shall be liable for the damages caused The National Irrigation Administration is an
by their employees and household helpers acting agency of the government exercising proprietary
within the scope of their assigned tasks, even the functions, by express provision of Rep. Act No.
though the former are not engaged in any 3601. Section 1 of said Act provides:
business or industry.
Section 1. Name and domicile.-A body corporate
The State is responsible in like manner when it is hereby created which shall be known as the
acts through a special agent.; but not when the National Irrigation Administration, hereinafter
damage has been caused by the official to whom called the NIA for short, which shall be organized
the task done properly pertains, in which case immediately after the approval of this Act. It shall
what is provided in Art. 2176 shall be applicable. have its principal seat of business in the City of
Manila and shall have representatives in all
The liability of the State has two aspects. namely: provinces for the proper conduct of its business.

1. Its public or governmental aspects where Section 2 of said law spells out some of the NIA's
it is liable for the tortious acts of special agents proprietary functions. Thus-
Sec. 2. Powers and objectives.-The NIA shall
2. Its private or business aspects (as when it have the following powers and objectives:
engages in private enterprises) where it becomes
liable as an ordinary employer. (p. 961, Civil Code (a) xxxxxxxxxxxxxxxxxx
of the Philippines; Annotated, Paras; 1986 Ed. ).
(b) xxxxxxxxxxxxxxxxxx
In this jurisdiction, the State assumes a limited
liability for the damage caused by the tortious acts (c) To collect from the users of each irrigation
or conduct of its special agent. system constructed by it such fees as may be
necessary to finance the continuous operation of
Under the aforequoted paragrah 6 of Art. 2180, the system and reimburse within a certain period
the State has voluntarily assumed liability for acts not less than twenty-five years cost of
done through special agents. The State's agent, if construction thereof; and
a public official, must not only be specially
commissioned to do a particular task but that (d) To do all such other tthings and to
such task must be foreign to said official's usual transact all such business as are directly or
governmental functions. If the State's agent is not indirectly necessary, incidental or conducive to
a public official, and is commissioned to perform the attainment of the above objectives.
non-governmental functions, then the State
assumes the role of an ordinary employer and will Indubitably, the NIA is a government corporation
be held liable as such for its agent's tort. Where with juridical personality and not a mere agency of
the government commissions a private individual the government. Since it is a corporate body
for a special governmental task, it is acting performing non-governmental functions, it now
through a special agent within the meaning of the becomes liable for the damage caused by the
accident resulting from the tortious act of its
driver-employee. In this particular case, the NIA Evidently, there was negligence in the supervision
assumes the responsibility of an ordinary of the driver for the reason that they were
employer and as such, it becomes answerable for travelling at a high speed within the city limits and
damages. yet the supervisor of the group, Ely Salonga,
failed to caution and make the driver observe the
This assumption of liability, however, is proper and allowed speed limit within the city.
predicated upon the existence of negligence on Under the situation, such negligence is further
the part of respondent NIA. The negligence aggravated by their desire to reach their
referred to here is the negligence of supervision. destination without even checking whether or not
the vehicle suffered damage from the object it
At this juncture, the matter of due diligence on the bumped, thus showing imprudence and
part of respondent NIA becomes a crucial issue in reckelessness on the part of both the driver and
determining its liability since it has been the supervisor in the group.
established that respondent is a government
agency performing proprietary functions and as Significantly, this Court has ruled that even if the
such, it assumes the posture of an ordinary employer can prove the diligence in the selection
employer which, under Par. 5 of Art. 2180, is and supervision (the latter aspect has not been
responsible for the damages caused by its established herein) of the employee, still if he
employees provided that it has failed to observe ratifies the wrongful acts, or take no step to avert
or exercise due diligence in the selection and further damage, the employer would still be liable.
supervision of the driver. (Maxion vs. Manila Railroad Co., 44 Phil. 597).

It will be noted from the assailed decision of the Thus, too, in the case of Vda. de Bonifacio vs.
trial court that "as a result of the impact, Francisco B.L.T. Bus Co. (L-26810, August 31, 1970, 34
Fontanilla was thrown to a distance 50 meters SCRA 618), this Court held that a driver should
away from the point of impact while Restituto be especially watchful in anticipation of others
Deligo was thrown a little bit further away. The who may be using the highway, and his failure to
impact took place almost at the edge of the keep a proper look out for reasons and objects in
cemented portion of the road." (Emphasis the line to be traversed constitutes negligence.
supplied,) [page 26, Rollo]
Considering the foregoing, respondent NIA is
The lower court further declared that "a speeding hereby directed to pay herein petitioners-spouses
vehicle coming in contact with a person causes the amounts of P12,000.00 for the death of
force and impact upon the vehicle that anyone in Francisco Fontanilla; P3,389.00 for hospitalization
the vehicle cannot fail to notice. As a matter of and burial expenses of the aforenamed
fact, the impact was so strong as shown by the deceased; P30,000.00 as moral damages;
fact that the vehicle suffered dents on the right P8,000.00 as exemplary damages and attorney's
side of the radiator guard, the hood, the fender fees of 20% of the total award.
and a crack on the radiator as shown by the
investigation report (Exhibit "E"). (Emphasis SO ORDERED.
supplied) [page 29, Rollo]
It should be emphasized that the accident
happened along the Maharlika National Road Facts: On July 7, 1969, a decision was rendered
within the city limits of San Jose City, an urban in Special Proceedings No. 2156-R infavor of
area. Considering the fact that the victim was respondents P.J. Kiener Co., Ltd., Gavino
thrown 50 meters away from the point of impact, Unchuan, and InternationalConstruction
there is a strong indication that driver Garcia was Corporation and against petitioner confirming the
driving at a high speed. This is confirmed by the arbitration award in theamount of
fact that the pick-up suffered substantial and P1,712,396.40.The award is for the satisfactionof
heavy damage as above-described and the fact a judgment against thePhlippine Government.On
that the NIA group was then "in a hurry to reach June 24, 1969, respondent Honorable Guillermo
the campsite as early as possible", as shown by Villasor issued an Orderdeclaring thedecision final
their not stopping to find out what they bumped as and executory.Villasor directed the Sheriffs of
would have been their normal and initial reaction. RizalProvince, Quezon City as well as Manilato
execute said decision.The Provincial Sheriffof
Rizal served Notices of Garnishment with several MUNICIPALITY OF SAN MIGUEL, BULACAN,
Banks,specially on PhilippineVeterans Bank and petitioner,
PNB.The funds of the Armed Forces of the vs.
Philippines on deposit with PhilippineVeterans HONORABLE OSCAR C. FERNANDEZ, in his
Bank andPNB are public funds duly appropriated capacity as the Presiding Judge, Branch IV,
and allocated for thepayment of pensions of Baliuag, Bulacan, The PROVINCIAL SHERIFF
retirees, pay andallowances of military and civilian of Bulacan, MARGARITA D. VDA. DE IMPERIO,
personneland for maintenance and operations of ADORACION IMPERIO, RODOLFO IMPERIO,
the AFP.Petitioner, on certiorari, filed prohibition CONRADO IMPERIO, ERNESTO IMPERIO,
proceedings against respondent JudgeVillasor for ALFREDO IMPERIO, CARLOS IMPERIO, JR.,
acting in excess of jurisdiction with grave abuse of JUAN IMPERIO and SPOUSES MARCELO
discretion amounting tolack of jurisdiction in PINEDA and LUCILA PONGCO, respondents.
grantingthe issuance of a Writ of Execution
against the propertiesof the AFP, hence the Pascual C. Liatchko for petitioner.
notices and garnishment arenull and void.
The Solicitor General and Marcelo Pineda for
Issue: Is the Writ of Execution issued by Judge respondents.
Villasor valid?

Held: What was done by respondent Judge is not RELOVA, J.:

in conformity with the dictates of theConstitution.It
isa fundamental postulate of constitutionalism In Civil Case No. 604-B, entitled "Margarita D.
flowing from the juristicconcept of sovereignty that Vda. de Imperio, et al. vs. Municipal Government
the stateas well as its government is immune from of San Miguel, Bulacan, et al.", the then Court of
suitunless it gives its consent.A sovereign is First Instance of Bulacan, on April 28, 1978,
exempt from suit,not because of any rendered judgment holding herein petitioner
formalconception or obsolete theory, but on the municipality liable to private respondents, as
logical and practical ground that therecan beno follows:
legal right as against the authority that makes the
law on which the right depends.The State may not WHEREFORE, premises considered, judgment is
be sued without its consent. A corollary, both hereby rendered in favor of the plaintiffs and
dictated by logicand soundsense from a basic against the defendant Municipal Government of
concept is that public funds cannot be the object San Miguel Bulacan, represented by Mayor Mar
of agarnishment proceeding even if theconsent to Marcelo G. Aure and its Municipal Treasurer:
be sued had been previously granted andthe
state liability adjudged.The universal rule that 1. ordering the partial revocation of the
wherethe State gives its consent tobe sued by Deed of Donation signed by the deceased Carlos
private parties either by general or special law, it Imperio in favor of the Municipality of San Miguel
may limitclaimant’s actiononly up to the Bulacan, dated October 27, 1947 insofar as Lots
completion of proceedings anterior to the stage of Nos. 1, 2, 3, 4 and 5, Block 11 of Subdivision Plan
execution and thatthepower of the Courts ends Psd-20831 are concerned, with an aggregate total
when the judgment is rendered, since the area of 4,646 square meters, which lots are
government fundsand properties maynot be among those covered and described under TCT
seized under writs of execution or garnishment to No. T-1831 of the Register of Deeds of Bulacan in
satisfy suchjudgments, is based on the name of the Municipal Government of San
obviousconsiderations of public Miguel Bulacan,
policy.Disbursements of publicfunds must be
covered by the correspondingappropriation as 2. ordering the defendant to execute the
required by law.Thefunctions and public services corresponding Deed of Reconveyance over the
rendered by the State cannot be allowedto be aforementioned five lots in favor of the plaintiffs in
paralyzedor disrupted by the diversion of public the proportion of the undivided one-half (½) share
funds from their legitimate and specific in the name of plaintiffs Margarita D. Vda. de
objects,asappropriated by law Imperio, Adoracion, Rodolfo, Conrado, Ernesto,
Alfredo, Carlos, Jr. and Juan, all surnamed
Imperio, and the remaining undivided one-half (½)
share in favor of plaintiffs uses Marcelo E. Pineda alias writ of execution stands in full force and
and Lucila Pongco; effect.

3. ordering the defendant municipality to pay On September 13, 1982, respondent judge issued
to the plaintiffs in the proportion mentioned in the an order which in part, states:
immediately preceding paragraph the sum of
P64,440.00 corresponding to the rentals it has It is clear and evident from the foregoing that
collected from the occupants for their use and defendant has more than enough funds to meet
occupation of the premises from 1970 up to and its judgment obligation. Municipal Treasurer
including 1975, plus interest thereon at the legal Miguel C, Roura of San Miguel, Bulacan and
rate from January 1970 until fully paid; Provincial Treasurer of Bulacan Agustin O.
Talavera are therefor hereby ordered to comply
4. ordering the restoration of ownership and with the money judgment rendered by Judge
possession over the five lots in question in favor Agustin C. Bagasao against said municipality. In
of the plaintiffs in the same proportion like manner, the municipal authorities of San
aforementioned; Miguel, Bulacan are likewise ordered to desist
from plaintiffs' legal possession of the property
5. ordering the defendant to pay the already returned to plaintiffs by virtue of the alias
plaintiffs the sum of P3,000.00 for attomey's fees; writ of execution.
and to pay the cost of suit.
Finally, defendants are hereby given an
The counterclaim of the defendant is hereby inextendible period of ten (10) days from receipt
ordered dismissed for lack of evidence presented of a copy of this order by the Office of the
to substantiate the same. Provincial Fiscal of Bulacan within which to
submit their written compliance, (p. 24, Rollo)
SO ORDERED. (pp. 11-12, Rollo)
When the treasurers (provincial and municipal)
failed to comply with the order of September 13,
The foregoing judgment became final when 1982, respondent judge issued an order for their
herein petitioner's appeal was dismissed due to arrest and that they will be release only upon
its failure to file the record on appeal on time. The compliance thereof.
dismissal was affirmed by the then Court of
Appeals in CA-G.R. No. SP-12118 and by this Hence, the present petition on the issue whether
Court in G.R. No. 59938. Thereafter, herein the funds of the Municipality of San Miguel,
private respondents moved for issuance of a writ Bulacan, in the hands of the provincial and
of execution for the satisfaction of the judgment. municipal treasurers of Bulacan and San Miguel,
Respondent judge, on July 27, 1982, issued an respectively, are public funds which are exempt
order, to wit: from execution for the satisfaction of the money
judgment in Civil Case No. 604-B.
Considering that an entry of judgment had already
been made on June 14, 1982 in G. R. No. L- Well settled is the rule that public funds are not
59938 and; subject to levy and execution. The reason for this
was explained in the case of Municipality of
Considering further that there is no opposition to Paoay vs. Manaois, 86 Phil. 629 "that they are
plaintiffs' motion for execution dated July 23, held in trust for the people, intended and used for
1983; the accomplishment of the purposes for which
municipal corporations are created, and that to
Let a writ of execution be so issued, as prayed for subject said properties and public funds to
in the aforestated motion. (p. 10, Rollo) execution would materially impede, even defeat
and in some instances destroy said purpose."
Petitioner, on July 30, 1982, filed a Motion to And, in Tantoco vs. Municipal Council of Iloilo, 49
Quash the writ of execution on the ground that the Phil. 52, it was held that "it is the settled doctrine
municipality's property or funds are all public of the law that not only the public property but
funds exempt from execution. The said motion to also the taxes and public revenues of such
quash was, however, denied by the respondent corporations Cannot be seized under execution
judge in an order dated August 23, 1982 and the against them, either in the treasury or when in
transit to it. Judgments rendered for taxes, and The foregoing has not been followed in the case
the proceeds of such judgments in the hands of at bar.
officers of the law, are not subject to execution
unless so declared by statute." Thus, it is clear ACCORDINGLY, the petition is granted and the
that all the funds of petitioner municipality in the order of respondent judge, dated July 27, 1982,
possession of the Municipal Treasurer of San granting issuance of a writ of execution; the alias
Miguel, as well as those in the possession of the writ of execution, dated July 27, 1982; and the
Provincial Treasurer of Bulacan, are also public order of respondent judge, dated September 13,
funds and as such they are exempt from 1982, directing the Provincial Treasurer of
execution. Bulacan and the Municipal Treasurer of San
Miguel, Bulacan to comply with the money
Besides, Presidential Decree No. 477, known as judgments, are SET ASIDE; and respondents are
"The Decree on Local Fiscal Administration", hereby enjoined from implementing the writ of
Section 2 (a), provides: execution.

SEC. 2. Fundamental Principles. — Local SO ORDERED.

government financial affairs, transactions, and
operations shall be governed by the fundamental Municipality of Makati vs. Court of Appeals
principles set forth hereunder: G.R. Nos. 89898-99 October 1, 1990
Facts: Petitioner Municipality of Makati
(a) No money shall be paid out of the expropriated a portion of land owned by private
treasury except in pursuance of a lawful respondents, Admiral Finance Creditors
appropriation or other specific statutory authority. Consortium, Inc. After proceedings, the RTC of
Makati determined the cost of the said land which
xxx xxx xxx the petitioner must pay to the private respondents
amounting to P5,291,666.00 minus the advanced
Otherwise stated, there must be a corresponding payment of P338,160.00. It issued the
appropriation in the form of an ordinance duly corresponding writ of execution accompanied with
passed by the Sangguniang Bayan before any a writ of garnishment of funds of the petitioner
money of the municipality may be paid out. In the which was deposited in PNB. However, such
case at bar, it has not been shown that the order was opposed by petitioner through a motion
Sangguniang Bayan has passed an ordinance to for reconsideration, contending that its funds at
this effect. the PNB could neither be garnished nor levied
upon execution, for to do so would result in the
Furthermore, Section 15, Rule 39 of the New disbursement of public funds without the proper
Rules of Court, outlines the procedure for the appropriation required under the law, citing the
enforcement of money judgment: case of Republic of the Philippines v. Palacio.The
RTC dismissed such motion, which was appealed
(a) By levying on all the property of the to the Court of Appeals; the latter affirmed said
debtor, whether real or personal, not otherwise dismissal and petitioner now filed this petition for
exempt from execution, or only on such part of review.
the property as is sufficient to satisfy the judgment
and accruing cost, if he has more than sufficient Issue: Whether or not funds of the Municipality of
property for the purpose; Makati are exempt from garnishment and levy
upon execution.
(b) By selling the property levied upon;
Held: It is petitioner's main contention that the
(c) By paying the judgment-creditor so much orders of respondent RTC judge involved the net
of the proceeds as will satisfy the judgment and amount of P4,965,506.45, wherein the funds
accruing costs; and garnished by respondent sheriff are in excess of
P99,743.94, which are public fund and thereby
(d) By delivering to the judgment-debtor the are exempted from execution without the proper
excess, if any, unless otherwise, directed by appropriation required under the law. There is
judgment or order of the court. merit in this contention. In this jurisdiction, well-
settled is the rule that public funds are not subject
to levy and execution, unless otherwise provided
for by statute. Municipal revenues derived from
taxes, licenses and market fees, and which are
intended primarily and exclusively for the purpose
of financing the governmental activities and
functions of the municipality, are exempt from
execution. Absent a showing that the municipal
council of Makati has passed an ordinance
appropriating the said amount from its public
funds deposited in their PNB account, no levy
under execution may be validly effected.
However, this court orders petitioner to pay for the
said land which has been in their use already.
This Court will not condone petitioner's blatant
refusal to settle its legal obligation arising from
expropriation of land they are already enjoying.
The State's power of eminent domain should be
exercised within the bounds of fair play and