226

SUPREME COURT REPORTS ANNOTATED

Republic vs. Court of Appeals
*

G.R. No. 90482. August 5, 1991.

REPUBLIC OF THE PHILIPPINES, acting through the

SUGAR
REGULATORY
ADMINISTRATION,
and
REPUBLIC PLANTERS BANK, petitioners, vs. THE
HONORABLE COURT OF APPEALS, 15th Division, THE
HONORABLE CORONA IBAYSOMERA, in her official
capacity as Presiding Judge of the Regional Trial Court,
National Capital Region, Branch 26, Manila, JORGE C.
VICTORINO and JAIME K. DEL ROSARIO, in their
official capacities as RTC Deputy Sheriffs of Manila,
ROGER Z. REYES, ERNESTO L. TREYES, JR., and
EUTIQUIO M. FUDOLIN, respondents.
Political Law Administrative Law Administrative Agency
Administrative agency has only such powers as are expressly
granted to it by law and those that are necessary implied in the
exercise thereof.It is a fundamental rule that an administrative
agency has only such powers as are expressly granted to it by law
and those that are necessarily implied in the exercise thereof.
(Guerzon vs. Court of Appeals, et al., 77707, August 8, 1988, 164
SCRA 182, 189, citing Makati Stock Exchange, Inc. vs. SEC, 14
SCRA 620, and Sy vs. Central Bank, 70 SCRA 570.)
Same Same Same Administrative agency is defined as a
government body charged with administering and implementing
particular legislation.An administrative agency is defined as [a]
government body charged with administering and implementing
particular legislation. Examples are workers compensation
commissions, x x x and the like. x x x The term agency includes
any
department, independent establishment, commission,
administration, authority, board or bureau x x x.
_______________
*

EN BANC.

227

VOL. 200, AUGUST 5, 1991

227

Republic vs. Court of Appeals

Same Same Same Solicitor General Only the Solicitor

General can bring or defend actions in behalf of the Republic of the
Philippines and that actions filed in the name of the Republic if not
initiated by the Solicitor General will be summarily dismissed.
We ruled that only the Solicitor General can bring or defend
actions on behalf of the Republic of the Philippines and that,
henceforth, actions filed in the name of the Republic if not initiated
by the Solicitor General will be summarily dismissed.
Same Same Same PD 1415 The president may not allow the
Office of the Government Corporate Counsel to act as lawyer for a
specific governmentowned or controlled corporation or a subsidiary
thereof.The words or authorized by the President are not found in
the law. We are not aware of any law, decree or executive order
which amended Section 1 of P.D. No. 1415 by inserting therein said
words. Besides, even granting for the sake of argument that such
words are written into the law, such exception cannot confer upon
the OGCC authority to represent the SRA. The exception simply
means that although the OGCC is theprincipal law office of all
governmentowned and controlled corporations including their
subsidiaries, the President may not allow it to act as lawyer for a
specified governmentowned or controlled corporation or a
subsidiary thereof. It will be noted that under Section 1 of P.D. No.
478 the President may authorize the OSG to represent government
owned or controlled corporations. In short, the exception limits,
rather than expands, the authority of the OGCC. Thus, the so
called approval by the Executive Secretary of the request of OGCC
to represent the SRA is based on an erroneous interpretation of the
law.

APPEAL by certiorari to review the decision of the Court of

Appeals.
The facts are stated in the opinion of the Court.
Enrique V. Olmedo for Independent Sugar Farmers,
Inc.
Reyes, Treyes & Fudolin Law Firm for respondents.
DAVIDE, JR., J.:
This is an appeal by certiorari under Rule 45 of the Revised
Rules of Court, with prayer for a temporary restraining

order or writ of preliminary injunction, filed on 25 October

1989 by the Office of the Government Corporate Counsel
(OGCC) in behalf of the Republic of the Philippines acting
through the Sugar
228

228

SUPREME COURT REPORTS ANNOTATED

Republic vs. Court of Appeals

Regulatory Administration (SRA), and the Republic

Planters Bank (RPB), seeking the review of the 13 October
1989 Decision of the Court of Appeals (15th Division) in
C.A.G.R. No. 17188.
1
The assailed decision dismissed the petition for certiorari
filed by Petitioners against herein public respondents Judge
and deputy sheriffs and private respondents for the
nullification of the Orders of respondent Judge of 13 March
1989, 21 March 1989 and 27 March 1989 in Civil Case No.
8635880 of Branch 26 of the Regional Trial Court of
Manila on the following grounds: (a) the funds upon which
the attorneys fees are sought to be executed now belong to
the Republic of the Philippines due to legal subrogation, (b)
execution is not proper against the Republic which is not a
party to the case, (c) the issuance of a writ of execution
would violate the Constitution since according to it no
money shall be paid out of the treasury except in pursuance
to an appropriations made by law, and (d) execution for
attorneys fees is unwarranted. Respondent Court of
Appeals dismissed the petition for lack of merit principally
because
(a) Under the compromise agreement petitioner RPB
accepted the designation/appointment as Trustee
whose obligation is to pay it received benefits by
way of trustees fees it may not question the right of
private respondents to attorneys fees
(b) Petitioner SRA may not lawfully bring an action on
behalf of the Republic of the Philippines since under
Section 13 of Executive Order No. 18 dated 28 May
1986, which created it, it simply was to take over the
functions of the defunct PHILSUCOM however, the
latter was to remain a juridical entity for three more
years for the purpose of prosecuting and defending
suits against it hence it is PHILSUCOM, being a
party to the compromise agreement, which may
properly contest the right of private respondents to
attorneys fees

(c) The petition should have been filed through the

Office of the Solicitor General (OSG) and not
through the OGCC neither the latter nor the SRA
may lawfully repre
_______________
1

Annex A of Petition Rollo, 3446.

229

VOL. 200, AUGUST 5, 1991

229

Republic vs. Court of Appeals

sent the Government of the Philippines in any suit

or proceeding such as the present petition for
administrative agencies may only perform such
powers and functions as may be authorized by the
laws which created or gave them existence and
(d) The respondent judge did not commit any error of
jurisdiction in issuing the questioned orders hence,
the remedy should be appeal.
The facts which gave rise to said petition are summarized by
the Court of Appeals as follows:
On May 16, 1986, Republic Planters Bank (hereafter referred to as
RPB), Zosimo Maravilla, Rosendo de la Rama, Bibiano Sabino,
Roberto Mascuana and Ernesto Kramer for themselves and in
representation of other sugar producers filed a Complaint with the
respondent court, RTC Branch 26, docketed as C.C. 8635880 For
Sum of Money and/or Delivery of Personal Property with
Restraining Order and/or Preliminary Injunction against the
Philippine Sugar Commission (PHILSUCOM) and the National
Sugar Trading Corporation (NASUTRA) with the prayer:
WHEREFORE PREMISES CONSIDERED, it is respectfully prayed of
this Honorable Court that, after due hearing and trial, judgment be
rendered in favor of Plaintiffs and against Defendants ordering them to do
the following:
1. To render a correct and faithful account of whatever amount of
United States

dollar

accounts/deposits

in

different

banks,

domestic and foreign, being held in agents and/or representatives.

2. To render a correct and faithful inventory of all the physical sugar
stocks for crop year 198485 presently remaining in the
warehouses of the different sugar mills all over the country.

3. To deliver or remit to the Plaintiffs any and all United States

dollar accounts/deposits in various banks, domestic or foreign,
held in the name of Defendants, their subsidiaries, conducts (sic),
agents and/or representatives.
4. To

deliver

the

entire

remaining

physical

sugar

stocks

corresponding to crop year 198485 presently remaining in the

warehouses of the different sugar mills all over the country in
favor of Plaintiffs who were unlawfully deprived of their
possession and control by Defendants, to be applied and deducted
from
230

230

SUPREME COURT REPORTS ANNOTATED

Republic vs. Court of Appeals

Defendants liability to Plaintiffs for the unaccounted sugar

for crop year 198485.
5. To jointly and severally pay Plaintiffs Producers all interests
and penalties imposed by Assigneebanks/creditors for
accounts covered by unpaid sugar quedans for crop year
198485.
6. To jointly and severally pay Plaintiffs claims for moral,
compensatory and exemplary damages in such accounts to
be determined in the course of the trial.
7. To jointly and severally pay for the attorneys fees of twenty
percent (20%) based on the total amount that may be
recovered.
8. To jointly and severally pay for the costs and litigation
expenses incurred by the Plaintiffs.
Plaintiffs likewise pray that, in order to prevent grave and
irreparable injury, this Honorable Court shall issue a writ of
preliminary injunction enjoining and/or prohibiting the Defendants,
their officers and/or agents from transferring, releasing or in any
manner disposing of all U.S. dollar deposits/accounts held in the
name of Defendants, its subsidiaries, conduits, agents and/or
representatives in the different banks, domestic and foreign,
including the physical sugar corresponding to crop year 198485
presently remaining in the warehouses of the different sugar mills
all over the country after requiring the Plaintiffs to post a bond that
may be determined by the Honorable Court to answer for the
damages in the event judgment will be rendered in Defendants
favor. Furthermore, Plaintiffs pray that a Restraining Order be
immediately issued for the purpose of enjoining the Defendants
from committing and/or proceeding with the foregoing acts, pending
hearing of the application for a writ of preliminary injunction.

Plaintiffs further pray for such other reliefs and remedies, just
and equitable under the premises.
Before PHILSUCOM and NASUTRA could answer, a
Compromise Agreement dated May 23, 1986 was submitted by the
parties which the lower court approved and based on it, the
Judgment dated June 2, 1986 (Annex B, Petition, Id., pp. 2236)
was issued. A motion for the issuance of writ of execution was filed
(Annex C, Petition, Id., pp. 3750). PHILSUCOM and NASUTRA
filed their Comment and Opposition (To Motion for Issuance of Writ
of Execution) (Annex D, Petition, Id., pp. 5162). A Reply was
filed by the plaintiffs (Annex E, Id., pp. 6372) and a Rejoinder
was also filed by the defendants (Annex E, Petition, Id., pp. 73
78). The lower court issued the Order dated March 13, 1989 which
dismissed the separate petitions for relief from
231

VOL. 200, AUGUST 5, 1991

231

Republic vs. Court of Appeals

judgment filed by Franklin Fuentebella, George Lacson, Fernando

Ballesteros, and Antonio Lopez in one petition Romeo Guanzon as
sugar producer and president of National Federation of Sugar Cane
Planters PASSI (Iloilo) Sugar Central, Inc., represented by Romeo
Villavicencio the Independent Sugar Planters represented by
Corazon Sagimalet (In a Motion for Intervention which substituted
as a Petition for Relief from Judgment) and Zosimo Maravilla,
Rosendo dela Rama and Bibiano Sabino (Annex G, Petition, Id.,
pp. 7998). This Order dated March 13, 1989 (which as aforesaid,
dismissed the petitions for relief from judgment) is the first of the
orders now being assailed.
On March 21, 1989, the lower court issued the second of the
assailed orders which granted a second motion to resolve a pending
motion for issuance of a writ of execution and allowed the issuance
of an alias writ of execution in words, thus:
Let an alias writ of execution be issued for the final implementation of
the Judgment on Compromise Agreement, dated June 2, 1986, the only
remaining provision of said judgment is the 10% attorneys fees of
counsels for the plaintiffs (Paragraph 12 subsec. Annex H, Petition, Id.,
pp. 99100).

Correspondingly, on that same date March 21, 1989, RTC

(Manila) Deputy Sheriff Jaime K. del Rosario issued a Notice of
Delivery of Money asking the RPB to pay in cash the 10% of
P45,293,552.60 to Attys. Roger Reyes, Ernesto Treyes, Jr. and
Eutiquio Fudolin, Jr. x x x immediately upon receipt of this notice
(Annex I, Petition, Id., p. 101).

And on March 27, 1989, the third of the questioned orders was
issued by the lower court, in response to the ExParte Motion to
Require Officers of Trustee Republic Planters Bank to Deliver
Amount Subject of Alias Writ of Execution, requiring the officers of
the RPB named therein to appear before the Court on March 29,
1989 at 10:30 in the morning to explain why they should not be
cited for contempt of court for defying x x x the alias writ of
execution (Annex J, Petition, Id., pp. 102103).
The instant petition was filed in this court on March 29, 1989, x
x x.

Parenthetically, it may also be added that, as stated in

paragraph 15 of the instant petition, the producers and
producer organizations who filed various petitions for relief
from the judgment based on the compromise agreement
have appealed to the Court of Appeals the Order of 13
March 1989 denying
232

232

SUPREME COURT REPORTS ANNOTATED

Republic vs. Court of Appeals
2

their petitions.
In the instant petition petitioners limit their grounds to
only two errors allegedly committed by respondent Court of
Appeals, namely: (a) it erred in holding that neither the
OGCC nor the SRA can represent the Government of the
Philippines in the action before it and (b) it deviated from
the decision of the Ninth Division of said court in C.A.G.R.
SP No. 11046 (Kramer, et al. vs. Hon. Doroteo, Caeba, et
al.), promulgated on 16 March 1987, which declared that
there was no valid class suit and the controversial
compromise agreement did
not extend to the 40,000
3
unnamed sugar producers.
In the resolution of 26 October 1989 We required
respondents to comment on the petition and issued a
temporary restraining order directing respondent Judge to
desist and refrain from further proceeding in Civil Case No.
8635880, entitled Republic Planters
Bank, et al. vs.
4
Philippine Sugar Commission, et al.
On 23 November 1989 petitioners filed a manifestation
informing this Court that at 9:30 a.m. on 26 October 1989,
private respondents, accompanied by respondents sheriff
and a squad of police Special Action Force, swooped upon
RPBs Bacolod Branch and divested a teller of money from
her booth allegedly because the branch manager had
instructed the bank personnel to close the bank vault while

the enforcement of the court order was being verified with

the head office in Manila the amount taken was
P179,955.31 these acts were allegedly done by virtue of,
among others, the orders dated October 24 and 25, 1989 of
respondent judge ordering the implementation of an alias
Writ of Execution dated 21 March 1989 and the Writ of
Execution dated 21 March 1986
and claiming that what
5
was enforced was an expired writ.
In Our resolution of 5 December 1989 respondents
were
6
required to comment on this manifestation.
After motions for extension of time to file their Comments
on
_______________
2

Rollo, 13.

Id., 16.

Rollo, 108.

Id., 116.

Id., 128A.
233

VOL. 200, AUGUST 5, 1991

233

Republic vs. Court of Appeals

the petition, separately filed by the private respondents and

the Solicitor General for the public respondents, were
granted, the former
ultimately filed their Comment on 20
7
December 1989. 8 The Solicitor General filed his Comment on
4 January 1990.
In his Comment the Solicitor General maintains that the
SRA has no legal personality to file the instant petition in
the name of the Republic of the Philippines for under its
charter, Executive Order No. 18, the SRA is not vested with
legal capacity to sue. He further argues that the SRA was
not a party to the courtapproved compromise agreement in
Civil Case No. 8635880 which provided for the questioned
10% attorneys fees PHILSUCOM and NASUTRA, which
were parties thereto, did not file any action to annul the
compromise agreement that while Executive Order No. 18
abolished the PHILSUCOM, the latters juridical
personality was to continue for three (3) years, during which
period it may prosecute and defend suits against it and
that, finally, even if SRA has the capacity to sue, it cannot
still bring any action on behalf of the Republic of the
Philippines as this can be done only by the Office of the
Solicitor General per Section 1 of P.D. No. 478.

The Solicitor General likewise stresses that the interest of

the national government in this case is confined only to the
amount remaining in RPB subject to legal subrogation the
judgment on the compromise agreement had long become
final and executory and that no reversible error was
committed by respondent judge and respondent Court of
Appeals.
Private respondents assert that the SRA and RPB do not
have the legal authority to sue for and in behalf of the
Republic of the Philippines. In respect to the former, their
conclusion is supported by almost the same arguments as
that asserted by the Solicitor General. As regards the RPB,
they maintain that it is a governmentcontrolled
corporation engaged in the banking business with corporate
powers vested in a Board of Directors, hence, it is legally
untenable for such a banking institution, even assuming
that it is governmentcontrolled, to initiate suits for and in
behalf of the Republic of the Philippines. (p. 171,
_______________
7

Id., 135384.

Rollo, 396409.
234

234

SUPREME COURT REPORTS ANNOTATED

Republic vs. Court of Appeals

Rollo). They further argued that petitioners have no legal

personality to initiate the instant petition for (a) SRA is not
a party in the case before the trial court the only reason
why it became involved was because of the contempt
proceedings initiated by private respondents against SRAs
Arsenio Yulo, Carlos Ledesma and Bibiano Sabino for
issuing Sugar Orders No. 9 and 14 and that neither can it
be presumed that SRA had substituted defendants
PHILSUCOM and the NASUTRA in the case as both
continue to legally exist for the purpose of prosecuting and
defending suits in liquidation of its affairs both did not file
any petition for relief from judgment questioning the
validity of the judgment of the trial court approving the
compromise agreement and that, moreover, RPB was a
signatory to the Compromise Agreement as a Trustee and,
as such, it regarded itself as only a nominal party and in a
series of pleadings it recognized the final and executory
nature of the decision approving the compromise
agreement.

As to the second assigned error, private respondents

pointed out that the Ninth Division of the Court of Appeals
did not rule in C.A.G.R. No. 11046 that Civil Case No. 86
35880 before the trial court was not a class suit, and
whether or not it was a class suit was not an issue therein.
On 15 January 1990 petitioners filed a motion for leave
to file consolidated reply, which
We granted in the
9
resolution of 18 January 1990.
On 18 January
1990 petitioners filed a Manifestation
10
and Motion wherein they informed the Court that despite
the temporary restraining order issued on 26 October 1989,
respondent Judge, to whom the Order was addressed,
continued to hear the case, particularly on the whereabouts
of 177,087.14 piculs of sugar for the crop year 19841985
allegedly stored in the different warehouses throughout the
country.
11
In the resolution of 30 January 1990 We required
respondent judge to show cause why no disciplinary action
should be taken against her for failure to comply with the
resolution of 26 October 1989 ordering her to refrain from
further proceeding
_______________
9

Rollo, 415417.

10

Id., 419423.

11

Id., 425.
235

VOL. 200, AUGUST 5, 1991

235

Republic vs. Court of Appeals

with Civil Case No. 8635880 and to answer why she should
not be cited for contempt of court for such failure, within ten
(10) days from notice.
On 8 March 1990 petitioners filed their Consolidated
Reply to the Comment with Motion to Dismiss filed by
private 12respondents and the Comment of the Solicitor
General.
On 5 April 1990 private
respondents filed a Rejoinder to
13
the Consolidated Reply.
On 16 April 1990 respondent judge, through the OSG,
filed her Compliance
as required by the Resolution of 30
14
January 1990. She claims that she did not defy the
temporary restraining order issued by this Court on 26
October 1989 because the petitioners sought for the
issuance of the temporary restraining order to stop the

enforcement of the decision of the respondent Court of

Appeals in C.A.G.R. No. 17188 dated October 13, 1989
hence, the temporary restraining order that this Court
issued actually orders herein respondent judge to desist
from enforcing the Decision of the respondent Court of
Appeals in C.A.G.R. No. 17188 which is the subject of the
instant petition for review. Consequently, she stresses, her
15 December 1989 order was not issued in defiance of the
restraining resolution said order pertains exclusively to the
whereabouts of the 177,087.14 piculs of physical sugar for
the crop year 19841985 and did not in any way attempt to
enforce the questioned decisions of the court a quo and the
Court of Appeals to the prejudice of petitioners right to
appeal.
15
In Our resolution of 15 May 1990 We resolved to
consider the comments of respondents as Answers to the
petition, give due course to the petition, require the parties
to submit their respective memoranda within thirty days
from notice, and to note the compliance of respondent judge.16
Petitioners filed their memorandum on 28 June 1990.
Private respondents sent theirs by registered mail on 22
August
_______________
12

Id., 468493.

13

Id., 517554.

14

Rollo, 590598.

15

Id., 600.

16

Id., 602633.
236

236

SUPREME COURT REPORTS ANNOTATED

Republic vs. Court of Appeals

1990 17which this Court actually received on 8 September

1990. We shall now take up the assigned errors.
I.
The Court of Appeals correctly ruled that petitioner Sugar
Regulatory Administration may not lawfully bring an
action on behalf of the Republic of the Philippines and that
the Office of the Government Corporate Counsel does not
have the authority to represent said petitioner in this case.

Executive Order No. 18, enacted on 28 May 1986 and

which took effect immediately, abolished the Philippine
Sugar Commission (PHILSUCOM) and created the Sugar
Regulatory Administration (SRA) which shall be under the
Office of the President. However, under the third paragraph
of Section 13 thereof, the PHILSUCOM was allowed to
continue as a juridical entity for three (3) years for the
purpose of prosecuting and defending suits by or against it
and enabling it to settle and close its affairs, to dispose of
and convey its property and to distribute its assets, but not
for the purpose of continuing the functions for which it was
established, under the supervision of the SRA.
Section 3 of said Executive Order enumerates the powers
and functions of the SRA but it does not specifically include
the power to represent the Republic of the Philippines in
suits filed by or against it, nor the power to sue and be sued
although it has the power to enter, make and execute
routinary contracts as may be necessary for or incidental to
the attainment of its purposes between any persons, firms,
public or private, and the Government of the Philippines
and [t]o do all such other things, transact such other
businesses and perform such functions directly or indirectly
incidental or conducive to the attainment
of the purposes of
18
the Sugar Regulatory Administration.
Section 4 thereof provides for the governing board of the
Administration, known as the Sugar Board, which shall
exer
_______________
17

Rollo, 660701.

18

Paragraphs H and I, Section 3.

237

VOL. 200, AUGUST 5, 1991

237

Republic vs. Court of Appeals

cise [a]ll the corporate powers of the SRA. Its specific

functions are enumerated in Section 6 however, the
enumeration does not include the power to represent the
Republic of the Philippines, although among such functions
is [t]o enter into contracts, transactions, or undertakings of
whatever nature which are necessary or incidental to its
functions and objectives with any natural or juridical
persons and with any foreign government institutions,
19
private corporations, partnership or private individuals.

It is apparent that its charter does not grant the SRA the
power to represent the Republic of the Philippines in suits
filed by or against the latter.
It is a fundamental rule that an administrative agency
has only such powers as are expressly granted to it by law
and those that are necessarily implied in the exercise
thereof. (Guerzon vs. Court of Appeals, et al., 77707, August
8, 1988, 164 SCRA 182, 189, citing Makati Stock Exchange,
Inc. vs. SEC,
14 SCRA 620, and Sy vs. Central Bank, 70
20
SCRA 570.
The SRA no doubt, is an administrative agency or body.
An administrative agency is defined as [a] government
body charged with administering and implementing
particular legislation. Examples are workers compensation
commissions, x x x and the like. x x x The term agency
includes any department, independent establishment,
commission,
administration, authority, board or bureau x x
21
x.
The power to represent the Republic of the Philippines in
any suit filed by or against it having been withheld from
SRA, it follows that the latter cannot institute the instant
petition and the petition in C.A.G.R. No. 17188 on behalf of
the Republic of the Philippines.
This conclusion does not, however, mean that the SRA
cannot sue and be sued. This power can be implied from its
powers to enter, make and execute routinary contracts as
may be necessary for or incidental to the attainment of its
purposes between
_______________
19

Paragraph C.

20

See also Filipino Bus Co. vs. Phil. Railway Co., 57 Phil. 860 RCPI

vs. Board of Communications, 80 SCRA 471.

21

Blacks Law Dictionary, Fifth Ed., p. 42.

238

238

SUPREME COURT REPORTS ANNOTATED

Republic vs. Court of Appeals

any persons, firms, public or private, and the Government of

the Philippines and to do all such other things, transact
such other businesses and perform such other functions
directly or indirectly incidental or conducive to the
attainment of the purposes of the SRA and the powers of its
governing board to enter into contracts, transactions, or
undertaking of whatever nature which are necessary or

incidental to its functions and objectives with any natural or

juridical persons and with any foreign government
institutions, private corporations, partnership or private
individuals.
The Court of Appeals also correctly ruled that the OGCC
can represent neither the SRA nor the Republic of the
Philippines. We do not, however, share the view that only
the Office of the Solicitor General can represent the SRA.
The entry of appearance by the OGCC for the SRA was
precipitated by the sudden turnabout of the Office of the
Solicitor General. Records show that the OSG eventually
represented the PHILSUCOM, NASUTRA and SRA in the
trial court. However, on 29 January 1988 it filed a
Manifestation dated January 27, 1988 informing the court
that its appearance in the case is limited to the issues
relating only to the contempt proceedings against the public
respondents and is not concerned with the other issues
22
raised by various parties in their petitions for relief. By
reason thereof, the Chairman/Administrator
of SRA, Mr.
23
Arsenio Yulo, Jr., sent a letter dated 6 April 1988 to the
Solicitor General, informing him that since the appearance
of the OSG is limited and that it has taken a different
position, SRAs only alternative is to seek another
representative and that much to its regret, it is constrained
to terminate OSGs services. He further informed the
Solicitor General that the case is being indorsed to the Office
of the Government Corporate Counsel for appropriate legal
action pursuant to P.D. No. 478. There is, however, no
showing that the OSG withdrew its appearance for
PHILSUCOM, NASUTRA or the SRA in the trial court. On
the contrary, per its Manifestation dated 8 February
1990,
24
and filed with this Court on 12 February 1990,
_______________
22

Annex H of Petition Rollo, 9798.

23

Annex I of Petition Id., 99.

24

Id., 429434.
239

VOL. 200, AUGUST 5, 1991

239

Republic vs. Court of Appeals

it has retained its appearance on behalf of the Republic of

the Philippines to recover whatever amount may be owing
to the National Treasury by virtue of legal subrogation.
25

Also on April 6, 1988, SRA sent a letter to OGCC to

25

Also on April 6, 1988, SRA sent a letter to OGCC to

engage its legal services to represent SRA as successor
agency of the PHILSUCOM in the case pending before the
trial court.
The OGCC, availing of P.D. No. 1415, the law creating it,
particularly 26Section 1 which, as quoted by it on page 16 of
the Petition, reads:
SECTION 1. The Office of the Government Corporate Counsel
shall be the principal law office of all governmentowned and
controlled corporations, including their subsidiaries except as may
otherwise be provided by their respective charters or authorized by
the President (italics supplied).

sent a letter to the Office of the President, in essence,

requesting for authority for OGCC to represent SRA in the
case before the trial court. This was favorably
acted by
27
Executive Secretary Catalino Macaraig, Jr.
Indeed, under Section 35, Chapter 12, Title III of Book
IV of the Administrative Code of 1987 (Executive Order No.
292) the Solicitor General is the lawyer of the government,
its agencies and instrumentalities, and its officials or
agents. Said Section reads as follows:
SECTION 35. Functions and Organization.The Office of the
Solicitor General shall represent the Government of the Philippines,
its agencies and instrumentalities and its officials and agents in any
litigation, proceeding, investigation or matter requiring the services
of lawyers. When authorized by the President or head of the office
concerned, it shall also represent governmentowned and controlled
corporations. The Office of the Solicitor General shall constitute the
law office of the Government and, as such, shall discharge duties
requiring the services of lawyers. x x x.

This is similar to subsection (1) of Section 1 of P.D. No. 478.

_______________
25

Annex J of Petition Rollo, 100.

26

Id., 21.

27

Annex K of Petition Id., 101.

240

240

SUPREME COURT REPORTS ANNOTATED

Republic vs. Court of Appeals

In Republic, et al. vs. Partisala, et al. (G.R. No. 61997, 15

November 1982, 118 SCRA 370, 373), We ruled that only

the Solicitor General can bring or defend actions on behalf

of the Republic of the Philippines and that, henceforth,
actions filed in the name of the Republic if not initiated by
the Solicitor General will be summarily dismissed.
However, in Secretary Oscar Orbos vs. Civil Service
28
Commission, et al., G.R. No. 92561, 12 September 1990, We
stated:
In the discharge of this task, the Solicitor General must see to it
that the best interest of the government is upheld within the limits
set by law. When confronted with a situation where one
government office takes an adverse position against another
government agency, as in this case, the Solicitor General should not
refrain from performing his duty as the lawyer of the government.
It is incumbent upon him to present to the court what he considers
should legally uphold the best interest of the government although
it may run counter to a clients position. In such an instance the
government office adversely affected by the position taken by the
Solicitor General, if it still believes in the merit of its case, may
appear in its own behalf through its legal personnel or
representative.

Consequently, the SRA need not be represented by the

Office of the Solicitor General. It may appear in its own
behalf through its legal personnel or representative.
The question that logically crops up then is: May it be
represented by the OGCC? Respondents hold the negative
view. Petitioners maintain otherwise, for the reason that
pursuant to Section 1 of the charter of the OGCC (P.D. No.
1415), as they quoted, the Office of the President, through
the Executive Secretary, has authorized it to represent the
SRA. The specific basis for such authority is the alleged
portion of the exceptionary clause therein, reading x x x or
authorized by the President.
The words or authorized by the President are not found in
the law. We are not aware of any law, decree or executive
order which amended Section 1 of P.D. No. 1415 by inserting
therein
_______________
28

Citing Ramos vs. Patricia Sto. Tomas, et al., G.R. No. 83067, March

22, 1990 and Tan, Jr. vs. Gallardo, 73 SCRA 306.

241

VOL. 200, AUGUST 5, 1991

Republic vs. Court of Appeals

241

said words. Besides, even granting for the sake of argument

that such words are written into the law, such exception
cannot confer upon the OGCC authority to represent the
SRA. The exception simply means that although the OGCC
is the principal law office of all governmentowned and
controlled corporations including their subsidiaries, the
President may not allow it to act as lawyer for a specified
governmentowned or controlled corporation or a subsidiary
thereof. It will be noted that under Section 1 of P.D. No. 478
the President may authorize the OSG to represent
governmentowned or controlled corporations. In short, the
exception limits, rather than expands, the authority of the
OGCC. Thus, the socalled approval by the Executive
Secretary of the request of OGCC to represent the SRA is
based on an erroneous interpretation of the law.
In any case, even if we grant that there was such an
exception, as well construed in the manner urged by
petitioners, it must be deemed, nevertheless, to have been
repealed by the Administrative Code of 1987. Section 10,
Chapter 3, Title III, Book IV thereof on the Office of the
Government Corporate counsel does not contain the
purported exception. It reads:
SECTION 10. Office of the Government Corporate Counsel.The
Office of the Government Corporate Counsel (OGCC) shall act as
the principal law office of all governmentowned or controlled
corporations, their subsidiaries, other corporate offsprings and
government acquired asset corporations and shall exercise control
and supervision over all legal departments or divisions maintained
separately and such powers and functions as are now or may
hereafter be provided by law. In the exercise of such control or
supervision, the Government Corporate Counsel shall promulgate
rules and regulations to effectively implement the objectives of the
Office. x x x.

Since the SRA is neither a governmentowned or controlled

corporation nor a subsidiary thereof, OGCC does not have
the authority
to represent it. As to who may represent it, the
29
Orbos case provides the answer.
The case of the RPB is, however, different. It is admitted
to be a governmentowned corporation. The OGCC can,
therefore, le
_______________
29

Supra.
242

242

SUPREME COURT REPORTS ANNOTATED

242

SUPREME COURT REPORTS ANNOTATED

Republic vs. Court of Appeals

gally represent RPB in actions filed by or against it.

Unfortunately, this issue was not categorically and
expressly addressed by the Court of Appeals and has not
been raised in the petition. Anyway, even if We have to rule
that OGCCs appearance for the RPB in the petition before
the Court of Appeals in C.A.G.R. No. 17188 was proper, the
result would be the samedismissal of the petition. As also
correctly pointed out by the Court of Appeals, having
received benefits by way of trustees fees, the RPB may not
question the right of private respondents to attorneys fees
its only obligation under the judgment based on compromise
was to pay the attorneys fees from out of the funds it held in
trust.
II.
The second assigned error is without merit. Petitioners have
misread the decision of the Court of Appeals in C.A.G.R. SP
No. 11046 (Ernesto Kramer, et al. vs. Hon.
Doroteo Caeba,
30
et al.), promulgated on 16 March 1987. The case was a
petition for certiorari and mandamus with a prayer for
preliminary injunction wherein petitioners principally
prayed the Court to declare null and void the order of
respondent judge of 16 December 1986 and to order him to
issue the writ of execution of the judgment of 2 June 1986,
require respondent NASUTRA to account and turn over to
petitioners any and all sales proceeds of 19841985 sugar
from 2 June 1986 up to the present in favor of respondent
Trustee Bank (RPB) for proper distribution to petitioners,
issue an order requiring respondent Trustee Bank to
distribute without delay all the sales proceeds of the 1984
1985 sugar in its possession in accordance with the
judgment of respondent court, and issue a restraining
order/preliminary injunction enjoining the SRA, its
agents/representatives from implementing Sugar Order No.
9 dated 25 September 1986. Although in the body of the
opinion a discussion was made on the matter of the
sufficiency of representation to make Civil Case No. 86
35880 a class suit, the resolution of the petition was not in
any way based thereon or influenced by it. As a
_______________
30

Rollo, 7384.

243

VOL. 200, AUGUST 5, 1991

243

Republic vs. Court of Appeals

matter of fact, the Court categorically stated that it was

premature to rule on that issue because of the pendency of
the petition for relief from judgment and interventions. The
full disquisition of the Court of Appeals on this point reads:
xxx
At the outset, let it be stated that the incidents which arose from
the class suit before the respondent court are predominantly related
to the ten percent (10%) attorneys fees stipulated in the compromise
agreement approved by the respondent court in its June 2, 1986
judgment in favor of petitioners counsels Atty. Roger Z. Reyes,
Ernesto L. Treyes, Jr. and Eutiquio M. Fudolin, Jr.
In the said class suit, only the five original plaintiffs and
producers Zosimo Maravilla, for himself and in representation of
Rosendo dela Rama, Roberto Mascuraa and Bibiano Sabino per
Special Power of Attorney, and Ernesto Kramer represented by
Atty. Roger Z. Reyes per Special Power of Attorney, have
authorized said Attys. Reyes, Treyes, Jr. and Fudolin, Jr. to
represent them as counsel.
On page 18 of the instant petition, petitioners allege that there is
no necessity to secure Special Powers of Attorney from the unnamed
parties in a class suit, and the failure of petitioners counsel to do so
does not constitute fraud, the named parties having contest over the
class suit. By such statement, petitioners and their counsels admit
their lack of authority from the rest of the alleged 40,000 sugar
producers to file the class suit and enter into the compromise
agreement.
Section 12, Rule 3, Revised Rules of Court provides that in order
that one or more may sue for the benefit of others as a class suit, it
is necessary that the court shall make sure that the parties actually
before it are sufficiently numerous and representative so that all
interests are fully protected. (Dimayuga, et al. vs. CIR, et al., G.R.
No. L10213, May 27, 1957).
For that matter, in the case below, therein plaintiffs Zosimo
Maravilla, Rosendo dela Rama and Bibiano Sabino filed with the
respondent court a motion to partially annul decision and/or petition
for relief against the said ten (10%) percent attorneys fees on the
allegation that they were deceived into signing the compromise
agreement believing, as was agreed upon during the negotiations,
that the ten (10%) percent of whatever would be collected would go
to a trust fund for the benefit of the sugar farmers and producers
and not as attorneys fees. Also, petition, for relief was filed by
thirteen other alleged sugar producers principally on the ground

that the compromise agreement entered into was without their

express authority by
244

244

SUPREME COURT REPORTS ANNOTATED

Republic vs. Court of Appeals

way of Special Power of Attorney and that the class suit was
unnecessary. Some of these sugar producers are the Associacion de
Agricultores de la Region Oesta de Batangas, Inc. (AAROB) with
742 members the Samahang Magaasukal sa Kanluran Batangas
(SAMAKABA) with 4,000 members and Independent Sugar
Farmers, Inc. with 200 members.
Here is a situation, as pointed out by respondent NASUTRA and
SRA, where petitioners in filing the class suit claim to represent
40,000 sugar producers all over the country and yet when some of
these producers filed petition for relief and interventions, petitioners
disowned them, stating that the other sugar producers have no
personality to intervene, not having been named parties to the class
suit.
It should not be overlooked that the said sugar producers,
although not named parties in the class suit, are the very alleged
persons represented in the class suit. They certainly have interests
in the subject matter of the controversy in the contents of the
compromise agreement.
The filing of petitions for relief from judgment has not been
prohibited by B.P. 129. The remedy of petitions for relief from
judgment is still available when a judgment is rendered by an
inferior court in a case, and a party thereto, by fraud, accident,
mistake or excusable negligence, has been unjustly deprived of a
hearing therein, or has been prevented from taking an appeal.
Section 9, paragraph 2 of B.P. 129 placing the original exclusive
jurisdiction on the Court of Appeals to annul judgments of Regional
Trial Courts has no relation to (sic) all to the petition for relief
provided for in Rule 38 because these two are completely different
remedies.
The petitions for relief from judgment and interventions are still
pending action by respondent court. In view thereof, it would be
premature for this Court to resolve the issue of estoppel on the part
of the said sugar producers to question the pertinent portion of the
judgment of compromise, and fraud on the part of the counsels for
petitioners therein. (Italics in this paragraph supplied for
emphasis).

IV.

Having disposed of the main issues, We shall now consider

the motion of petitioenrs of 16 January 1990 to hold in
contempt respondent Judge Corona IbaySomera for
violating/defying the Temporary Restraining Order issued
by Us on 26 October 1989. She allegedly continued to hear
the case particularly on the whereabouts of 177,087.14
piculs of sugar for the crop year
245

VOL. 200, AUGUST 5, 1991

245

Republic vs. Court of Appeals

19841985 allegedly stored in different warehouses

throughout the country, and that she even further reset
the hearing of the case on January 19, 1990
notwithstanding the cautionary manifestation filed by
petitioners during the 15 December 1989 hearing that said
continued hearing would be a violation of the TRO. In the
resolution of 26 October 1989, this Court specifically ordered
respondent Judge to desist and refrain from further
proceeding in Civil Case No. 8635880, entitled Republic
Planters Bank, et al. vs. Philippine Sugar Commission, et
al.
In her Compliance, respondent judge explained that the
TRO in question actually ordered her to desist from
enforcing the Decision of the respondent Court of Appeals in
C.A.G.R. No. 17188, which is the subject of the instant
petition, and that her only honest motivation in making
the inquiry is to see to it that while the instant petition is
pending x x x, whatever funds may be owing to the Republic
of the Philippines is duly preserved and protected.
We find the explanation to be satisfactory. No malice
attended the commission of the challenged act. We accord to
respondent judge good faith in her claimed desire to
preserve and protect public funds. Moreover, petitioners
failed to show that the act in question caused any injury or
damage to their rights or interest.
IN VIEW OF ALL THE FOREGOING, the Petition is
DENIED for lack of merit.
Costs against petitioners.
SO ORDERED.
Fernan, (C.J.), Narvasa, MelencioHerrera,
Gutierrez, Jr. Cruz, Feliciano, Gancayco, Padilla, Bidin,
Sarmiento, GrioAquino, Medialdea and Regalado, JJ.,
concur.

 Paras, J., No part. Wife participated in a case

involved here.
Petition denied.
Note.For petition for certiorari to prosper, the grave
abuse of discretion committed by the tribunal must be
shown. (Ignacio vs. Court of Appeals, 96 SCRA 648.)
o0o
246

Copyright2017CentralBookSupply,Inc.Allrightsreserved.