Consti1 Sovereignty Digest by Ace, Cedie, Kim and Maia

Sovereign Immunity

China National Machinery vs Santamaria

CHINA NATIONAL MACHINERY & EQUIPMENT CORP.
(GROUP), Petitioner,
vs.
HON. CESAR D. SANTAMARIA, et al.

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 Buyers 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 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 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. However, petitioner alleged that contract was
between the sovereign of the Phils and China, thus, it should
be entitled for immunity.

ISSUE:

Whether or not CNMEG is immune from Philippine laws.

HELD

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.

The Contract Agreement, however, does not on its own reveal
whether the construction of the Luzon railways was meant to
be a proprietary endeavor but clearly, it was CNMEG that
initiated the undertaking, and not the Chinese government.

Also, despite petitioners claim that the EXIM Bank extended
financial assistance to Northrail because the bank was
mandated by the Chinese government, and not because of any
motivation to do business in the Philippines,38 it is clear from
the foregoing provisions that the Northrail Project was a
purely commercial transaction.

The Contract Agreement was not concluded between the
Philippines and China, but between Northrail and CNMEG. By
the terms of the Contract Agreement, Northrail is a
government-owned or -controlled corporation, while CNMEG
is a corporation duly organized and created under the laws of
the Peoples Republic of China. Thus, both Northrail and
CNMEG entered into the Contract Agreement as entities with
personalities distinct and separate from the Philippine and
Chinese governments, respectively.

Thus, the instant Petition is DENIED by the SC. Petitioner China
National Machinery & Equipment Corp. (Group) is not entitled
to immunity from suit, and the Contract Agreement is not an
executive agreement.

Classical or Absolute Theory - a sovereign cannot, without its
consent, be made a respondent in the courts of another
sovereign

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.


Suits Against Government Instrumentalities

Professional Video Inc. vs TESDA

PROVI entity engaged in the sale of high technology
equipment, information technology products and
broadcast devices
TESDA is an instrumentality of the government
established under RA 7796 (TESDA Act of 1994)
attached to DOLE.
o Provides skills standardization, testing and
certification
To fulfil the mandate of TESDA, it sought to issue
security-printed certification and/or PVC cards to
trainees who passed the certification
TESDA Pre-qualification Bids Committee (PBAC)
conducted 2 public biddings for the printing and
encoding of PVC card. PBAC recommended that
TESDA enter into a negotiated contract with PROVI
PROVI signed and executed their Contract Agreement
Project: PVD ID Card amounting to P39,475,00
Both parties executed an Addendum to the contract
agreement.
TESDA paid 30% of the total cost of the materials 30
days after the receipt and acceptance of the
contracted supplies with the balance payable within
30days
Despite the two demand letters sent by POVI, TESDA
failed to pay their balance P35,735,500. This
prompted PROVI to file writ of preliminary
attachment/garnishment against TESDA.
RTC favored the garnishment and ordered the
manager of the Land Bank of the Philippines to
produce TESDAs bank statement
CA set aside the RTCs orders after finding out the
following:
o A) TESDAs funds are public in nature and
therefore exempt from garnishment
o B) TESDAs purchase of the PVC cards was
necessary from garnishment

Issue:

1. Whether or not the writ of attachment against TESDA and
its funds, to cover PROVIs claim against TESDA is valid?

2. Whether or not TESDA is covered by the principle of State
Immunity?

Holding:

1. No
2. Yes

Ruling:
1. Public funds cannot be the object of garnishment
proceedings even if the consent to be sued had been
previously granted and the state liability adjudged.

Even assuming that TESDA entered into an implied
consent with PROVI to be sued, the funds are still public in
nature.

2. TESDA is an unincorporated instrumentally of the
government, directly attached to the DOLE through
the participation of the Secretary of Labor as the
Chairman. As an unincorporated instrumentality
operating under a specific charter, it is equipped with
both express and implied powers and all STATE
IMMUNITIES FULLY APPLY TO IT.

Principle of Sec 3 Art 16 (State Immunity Principle)
- the principle is based on the very essence of SOVEREIGNTY
and PUBLIC POLICY.

Sovereignty there can be no legal right as against the
authority that makes the law on which the right depends
Public Policy public service would be hindered, and the
public endangered if the sovereign authority could be
subjected to law suits at the instance of every citizen, and
consequently controlled in the uses and disposition of the
means required for the proper administration of the
government.

Forms of State Immunity
1. Suit against the Republic by name
2. Suit against an unincorporated government agency
3. Suit against a government agency covered by a
charter with respect to the agencys performance of
governmental functions
4. Suit that on its face is against a government officer


Suits Against Government Instrumentalities

REPUBLIC OF THE PHILIPPINES, represented by ASSET
PRIVATIZATION TRUST, petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION, HON. EDUARDO
J. CARPIO, and PANTRANCO ASSOCIATION OF CONCERNED
EMPLOYEES UNION, respondents.

FACTS:

In December of 1978, the full ownership of PNEI was
transferred to its creditor, the National Investment
Development Corporation ("NIDC"), a subsidiary of the
Philippine National Bank ("PNB"),

following the latter's
foreclosure of PNEI assets. PNEI was one among several
companies placed under sequestration by the Presidential
Commission on Good Government ("PCGG") shortly after the
historic 1986 events in EDSA. Some time in January, 1988, the
sequestration order was lifted to give way to the sale of PNEI
by the APT which, in the meanwhile, had taken over the
management of the company.


The continuing deterioration of its financial condition
prompted PNEI to lodge, on 07 May 1992, a Petition for
Suspension of Payments with the Securities and Exchange
Commission ("SEC"), a move calculated to prevent further
dissipation of PNEI's assets and to make PNEI a viable source
of income for the government.

As a cost saving measure, the
management committee also recommended to the SEC the
retrenchment of some 500 employees of PNEI. The
retrenchment was carried out during the months of November
and December of 1992 and January of 1993.
Consti1 Sovereignty Digest by Ace, Cedie, Kim and Maia


The filing of various labor complaints against PNEI was the
immediate result.

(A) NLRC NCR Case No. 00-08-05380-93 was started by PEA-
PTGWO on 27 August 1993 in the Arbitration Branch of the
NLRC-NCR against PNEI and Asset Privatization Trust (APT) for
unfair labor practice, for non-payment of 13th month pay, and
various other claims.

(B) NLRC-NCR-00-05-03587-93, the second labor case, involved
a claim for separation pay, 13th month pay and other benefits
lodged by PANTRANCO ASSOCIATION OF CONCERNED
EMPLOYEES UNION (PACEU) against PNEI, APT and DOTC.

(C) The complaint in NLRC CASE NO. SUB-RAB-01-12-7-0225-93
was initiated by respondent Antonio Cabugao before the Sub-
Regional Arbitration Branch of NLRC in Dagupan City against
PNEI and APT similarly involving claims for separation pay,
13th month pay and other benefits. However, the Solicitor-
General initially points out that APT, being an agency or
instrumentality of the Republic of the Philippines, is immune
from suit.

ISSUES: Whether or not PNEI and APT are liable to the
complainants
Whether or not APT is immune from suit.

HELD:
A. The court On 14 February 1994, Labor Arbiter Eduardo Carpio
rendered a decision holding PNEI and APT jointly and solidarily
liable, viz:
WHEREFORE, premises considered, judgment is hereby
rendered ordering respondents to jointly and severally pay all
the covered employees and became final and executory since

no appeal was interposed by either the PNEI or the APT.



B. On 21 July 1993, Labor Arbiter Aquino rendered a decision, the
decretal portion of which read:
WHEREFORE, premises considered judgment is hereby
rendered ordering respondent Pantranco North Express, Inc.
to pay individual complainants the following amount as
computed.
In addition, respondent company is further directed to pay
individual complainants. Respondent is likewise directed to
pay the attorney's fees equivalent to 10% of the total
monetary award of THIRTY NINE MILLION SEVEN HUNDRED
THIRTY SIX THOUSAND FOUR HUNDRED FIFTY NINE PESOS
AND THIRTEEN CENTAVOS (P39,736,459.13) Since none of the
parties appealed, the aforequoted decision eventually became
final and executory.

C. The Court is not persuaded even as it is cognizant of the
doctrine that "(t)he State may not be sued without its
consent,"

for as the Court has so stressed in Department of
Agriculture vs. NLRC,

the rule is not really absolute for it
does not say that the state may not be sued under any
circumstance. On the contrary, as correctly phrased, the
doctrine only conveys, "the state may not be sued without its
consent;" its clear import then is that the State may at times
be sued. The States' consent may be given either expressly or
impliedly. Express consent may be made through a general
law or a special law. In this jurisdiction, the general law
waiving the immunity of the state from suit is found in Act No.
3083, where the Philippine government "consents and submits
to be sued upon any money claim involving liability arising
from contract, express or implied, which could serve as a basis
of civil action between private parties." Implied consent, on
the other hand, is conceded when the State itself commences
litigation, thus opening itself to a counter-claim, or when it
enters into a contract.

A matter that must not be overlooked is the fact that the
inclusion of APT as a respondent in the monetary claims
against PNEI is merely the consequence of its being a
conservator of assets, a role that APT normally plays in, or the
relationship that ordinarily it maintains with, corporations
identified for and while under privatization. The liability of APT
under this particular arrangement, nothing else having been
shown, should be co-extensive with the amount of assets
taken over from the privatized firm. PNEI's assets obviously
remain to be subject to execution by judgment creditors of
PNEI.

Express Consent vs Implied Consent

Express consent may be made through a general law or a
special law

Implied consent, on the other hand, is conceded when the
State itself commences litigation, thus opening itself to a
counter-claim, or when it enters into a contract.


Suits against Government Instrumentalities / Suits against
officers

Department f Health vs. Phil Pharmawealth, Inc.

Facts:

Secretary of Health Alberto Romualdez R. issued
Administrative Order No. 27 series of 1998, outlining
the guidelines and procedure on the accreditation of
government suppliers for pharmaceutical products. It
was later amended by A.O. no. 10 series 2000. On
May 9, 2000 and May 29, 2000

respondent submitted to the petitioner DOH a
request for the inclusion of additional items in its list
of accredited drug products, including the antibiotic
Penicillin G Benzathine.It appears that processing of
and the release of the result of respondents request
was due on September 2000, the last month of the
quarter following the date of its filing. Despite the
lack of response from petitioner DOH regarding
respondents request for inclusion of additional items
in its list of accredited products, respondent
submitted its bid for Penicillin G Benzathine contract.

Only two companies participated with respondent
submitting the lower bid. In view, however, of the
non-accreditation of respondents Penicillin G
Benzathine product, the contract was awarded to YSS
depite the fact that Philpharma wealth is the lowest
bidder.

The respondent filed a complaint for injunction,
mandamus and damages with prayer for the
issuance of writ preliminary injunction and/or
temporary restraining order with the RTC praying the
trial court to nullify the ward of the Penicillin G
Bezathine contract and award the same to the
plaintiff as the lowest complying responsible bidder
for the said contract.

Petitioner DOH, secretary Rumualdez, succeeded by
petitioner Dayrit, and individual petitioners
Undersecretary Galon and Lopez argued for dismissal
of the complaint for the lack of merit in view of the
express reservation made by the petitioner to accept
or reject any or all bids without incurring liability to
the bidders, they positing that government agencies
have such full discretion. Petitioner subsequently
filed a motion to dismiss praying for the outright
dismissal of the complaint based on the doctrine of
state immunity.

Issue: Is the doctrine of state immunity applicable?

Ruling:
1. STATE IMMUNITY OF DOH
The defense of immunity from suit will not avail despite its
being an unincorporated agency of the government for
the only causes of action directed against it are
preliminary injunction and mandamus. Preliminary
injunction may be directed to a party. Court or person.

The defense of state immunity from suit does not apply in
causes of action which do not seek to impose charge or
financial liability against the State.

2. State immunity of public officers
An officer who exceeds the power conferred on him by law
cannot hide behind the plea of sovereign immunity and must
bear the liability personally.

The mere allegation that a government official is being sued in
his personal capacity does not automatically remove the same
from the protection of the doctrine of state immunity, and
neither does the mere invocation of official character suffice to
insulate such official from suability and liability of an act
committed without or in excess of his or her authority

Public Officers qualified immunity
Suability of a government official depends on whether the
official concerned was acting with his official or jurisdictional
capacity, and whether the acts done in the performance of the
official functions will result in a charge of financial liability
against the government.

State Immunity
The defense of state immunity from suit does not apply n
causes of action, which do not seek to impose charge or
financial liability against the state.






Calub vs CA

Facts:
On Jan 28, 1992 Forest protection and Law enforcement Team
of CENRO of the DENR apprehended 2 motor vehicles loaded
with illegally sourced lumber. Constancio Abuganda and Pio
Gabon, the drivers of the vehicles, failed to present proper
documents and/or licensed. Thus, the apprehending team
seized and impounded the vehicles and its load of lumber.
Felipe Calub, Provincial Environment and Natural resource
Officer, then filed a criminal complaint against Abuganda for
violation of the Revised Forestry Code.

On February 11, 1992 one of the two vehicles was again
apprehended by a composite team of the DENR-CENR. Calub
duly filed criminal complaint against Constancio Abuganda, a
certain Abegonia, and several John Does for violation of
Revised forestry act.

Private respondent Manula Balabcon, the vehicle owner, and
Constancio Abuganda, the driver filed a complaint for the
recovery of the possession of the 2 impounded vehicles with
an application of replevin against the petitioner.

Issue: Whether or not the complaint for the recovery of
possession of impounded vehicles, with an application for
replevin, is suit against the state?

Ruling:

Well established is the doctrine that the state may not be sued
without its consent. And suit against the public officer for his
official acts, is in effect, a suit against the state if its purpose is
to hold the State ultimate liable.

However, the protection afforded the public officers this
doctrine generally applies only to the activities within the
Consti1 Sovereignty Digest by Ace, Cedie, Kim and Maia

scope of their authority in good faith and without willfulness,
malice and corruption.

In the present case, the acts for which the petitioners are
being called to account were performed by them in the
discharge of their official duties. The acts in question are
clearly official in nature. In implementing and enforcing
Section 78-A and 89 of the Forestry Code through the seizure
carried out, petitioners were performing their duties and
functions as officers of the DENR, and did so within the limits
of their authority. There was no malice nor bad faith on their
part. Hence, a suit against the petitioners who represent the
DENR is a suit against the State. It cannot prosper without the
States consent given the circumstances in this case. The Writ
of replevin is annulled.

Philippine Agila Satellite Inc. (PASI) vs. Trinidad-Lichauco
(DOTC, Acting Sec.)

Facts:
Michael de Guzman, President and Chairman of
Philippine Agila Satellite, Inc. (PASI) entered into a
Memorandum of Understanding (MOU) with DOTC that they
will launch a Filipino-owned satellite into outer space. Under
the MOU, the satellite will be privately owned by PASI, which
will grant the PH govt one free transponder and another one,
subject to availability. The govt, through the Intl
Telecommunications Union designated 2 orbital slots for PASI.
They have secured the confirmation from govt and was about
to proceed with launching preparations when respondent
Trinidad-Lichauco held a series of sabotage to te business of
PASI.
Among the things Lichauco did was 1) offering the
other orbital slot to Unknown Awardee, 2) utter disparaging
and defamatory remarks about petitioners in a meeting and
then later at a telcomm forum, 3) unprovoked defamation
when she threatened petitioner not to use the Agila name,
and 4) that petitioner will never pay its contractors.
Aggrieved by Lichaucos actions, petitioner sought for the
injuction (establish that orbital slot should have been awarded
to PASI under the MOU), declaration of nullity of award
(awarding of the other orbital slot to Unknown Awardee) and
damages (for sabotage of business).

Issue: Is the suit considered against the State and
therefore can invoke the nonsuability principle of the PH?
Is petitioner right in seeking for the three mentioned causes of
action?

Ruling:

NO. Lichauco was being sued in her personal capacity.
But because some of the events that led to this case arose
from a grave abuse of discretion tantamount to lack of
jurisdiction in the fulfilling her official duties as
Undersecretary (and now Acting Secretary) of DOTC, she is
considered not under the State and therefore suable.
YES. But the first two will not apply as they only seek
to reverse a state action, which Lichauco was within her rights
to do as acting head of DOTC at the time. As for the third,
Court has recommended a full blown trial for both parties to
present their evidences to support/counter the claim.
The order is REINSTATED in the Regional Trial Court for
further submission of evidence.

Implied Consent
Republic (PCGG) vs. Sandiganbayan (Second Division) and
Benedicto

Facts:
This involves the 227 shares of stock from Negros
Occidental Golf and Country Club, Inc. owned by respondent
Benedicto, thought to have been ill-gotten, which the PCGG
fiscal agents sequestered and took over.
The PCGG and Benedicto entered into a Compromise
Agreement of lifting the sequestration of the shares and
implying that they were not ill-gotten and Benedicto was well
within his financial capacity to purchase them.
Benedicto filed a Motion for Release and return of stocks,
which the Sandiganbayan approved, plus PCGGs payment of
the membership fee, whose noncompliance (or delay of
compliance) thereof resulted in the foreclosure of the stocks
and its consequent public sale.

Issue/Ruling:

Is PCGG responsible for the payment of membership fees for
the sequestered shares of stock?

YES. PCGG is the sequestrator of the shares, so he is
duty-bound to preserve it. Paying for the membership is one
of the duties/obligations to preserve them.

Did Sandiganbayan err in identifying PCGG as the responsible
party for payment of the shares?

NO. Sandiganbayan did not mistake in determining
that PCGG was responsible. There was no grave abuse of
discretion involved as Sandiganbayan never interfered, only
directed the PCGG to comply with its part of the bargain
under their Compromise Agreement.

Is PCGG immune from this suit?

NO. When the government itself is the suitor, it
exempts itself from the state immunity principle. By taking
initiative of the suit against a private party, it descends to the
level of a private individual as well and opens itself to
whatever counterclaims the other party may apply. Its
consent to be sued is implied from the very act of entering
into such contract, their Compromise Agreement as an
example.
Petition (of petitioner PCGG) is DISMISSED.



Implied Consent
EPG Construction Co. vs Vigilar

Facts:

In 1983, the Ministry of Human Settlement (MHS),
through the BLISS Development Corporation, intiated
a housing project on a government property along the
east bank of Manggahan Floodway in Pasig
The MHS entered into a Memorandum of Agreement
(MOA) with Ministry of Public Works and Highways
(MPWH) where the latter undertook to develop the
housing site and construct thereon 145 housing units
By virtue of the MOA, MPWH forged individual
contracts with petitioners EPG, Ciper, Septa, Phil.
Plumbing, Home Construction, World Builders, Glass
World, Performance Builders, and De Leon Araneta
Construction for the construction of the housing units
Under the contracts, the scope of construction and
funding covered only around "2/3 of each housing
unit"
Petitioners agreed to undertake and perform
"additional constructions" for the completion of the
housing units despite the fact that there was only a
verbal promise, and not a written contract, by the
MPWH Undersecretary Aber Canlas that additional
funds will be available and forthcoming
Unpaid balance for the additional constructions
amounted to P5,918,315.63
Upon a demand letter from the petitioners, on
November 14, 1988, DPWH Asst. Secretary Madamba
opined that payment of petitioners' money claims
should be based on quantum meruit (what one has
earned) and should be forwarded to the Commission
on Audit (COA)
In a Letter of the Undersecretary of Budget and
Management dated December 20, 1994, the amount
of P5,819,316.00 was then released for the payment
of the petitioners' money claims under Advise of
Allotment No. A4-1303-04-41-303
In an indorsement dated December 27, 1995, the COA
referred anew the money claims to the DPWH
In a letter dated August 26, 1996, respondent
Secretary Gregorio Vigilar denied the subject money
claims
Petitioners filed before the RTC of QC, Branch 226 a
Petition for Mandamus to order the respondent to
pay petitioners their money claims plus damages and
attorney's fees.
Lower court denied the petition on February 18, 1997

Issue:
Whether or not the implied, verbal contracts between
the petitioners and then Undersecretary Canlas
should be upheld?
Whether or not the State is immune from suit?

Holding:
Yes.
No.

Ruling:

1. While the court agrees with the respondent that the implied
contracts are void, in view of violation of applicable laws,
auditing rules, and lack of legal requirements, it still finds merit
in the instant petition
The illegality of the implied contracts proceeds from an
express declaration or prohibition by law, not from any
intrinsic illegality
"In the interest of substantial justice," petitioners-contractors'
right to be compensated is upheld, applying the principle of
quantum meruit
Even the DPWH Asst. Sec. for Legal Affairs recommends their
compensation; even the DPWH Auditor did not object to the
payment of the money claims

2. The respondent may not conveniently hide under the State's
cloak of invincibility against suit, considering that this principle
yields to certain settled exceptions.

The State's immunity cannot serve as an instrument
perpetrating injustice
Petition granted. RTC decision reversed and set aside.

Quantum meruit the amount of recovery would only be the
reasonable value of the thing or services rendered regardless
of any agreement as to value.

Royal Prerogative of Dishonesty and hide under the States
cloak of immunity


Dept. of Education, Albay vs. Onate

Facts:
Spouses Claro Onate and Gregoria Los Banos owns
the disputed lot Lot No. 6849 (27,907 sqm) registered under
the Torrens System of land registration with an Original
Certificate of Title (OCT). This lot was already settled through a
Deed of Extrajudicial Settlement of Estate and Cession in 1991,
in favor of respondent as his three sisters waived their rights
to the property.
It turns out that the same land was where the Daraga
North Central Elementary School was built and had been
operating since 1940, then named Bagumbayan Elementary
School of Daraga. The Municipality of Daraga gave that land to
Dept. of Education, Culture and Sports (DECS), now Dept. of
Education (DepEd) through a Deed of Donation, confident that
the municipality owned the land through buying it from Claro
Onate, the respondents grandfather, sometime in 1940.
Respondent testified that he only knew of the dispute on
1973, from which he took possession of the lot the same year;
that he knew only of the schools occupation on a portion of
Consti1 Sovereignty Digest by Ace, Cedie, Kim and Maia

the land on 1991 and knew of the Deed of Donation on 1992.
The petitioner then claimed that respondent was guilty of
laches.

Issue:
Is the respondent guilty of laches? Will it be applied to
him in this case?
Is the State immune from this case? Can DECS be sued
independently from the State?


Ruling:

YES. Laches is defined as the failure or neglect, or an
unreasonable and unexplained length of time, to do that which
could or should have been done earlier. Elements of laches
have set in: 1) disputed land has been used for public
education since 1940, 2) respondent failed to prove that him
and his predecessors undertook steps to regain the use of
their land, to protest the building of the school as early as
1940, 3) petitioner DECS did not anticipate that their
occupancy of the land would be later questioned, and 4)
preliminary facts show grave prejudice to the petitioner DECS
as they have made major changes in construction and
expansion of the school. The laches, however, apply only to
disputed Lot No. 6849-A. By virtue of laches, respondent
Onate cannot claim Lot No. 6849-A anymore.
NO. DECS can be sued as a result of being privy to the
Deed of Donation executed by the Municipality of Daraga (as
its recipient) over disputed property. By giving its consent to
the donation, it brings DECS down to level of ordinary citizen.
YES, DECS can be sued independently from the State as it gave
its authority to continue with the donation, which carries with
it the full responsibility of suing or being sued.
Therefore, DepEd (formerly DECS) now has the rights of
possession and property over Lot No. 6849-A. Onarte cannot
sell, mortgage or encumber said Lot while still being used by
DepEd. The lots rights will be returned to respondents the
moment DECS no longer needs it. DECS being nonsuable has
become moot.