01 - ALCORAN - EPG v. Vigilar

Subject: Consti 1 Topic:
State immunity from suit – Art. XVI, § 3 Digest Maker: Leynard Alcoran

Case Name: The Holy See, petitioner v THE HON. ERIBERTO U. ROSARIO, JR., as the Presiding Judge of the Regional Trial
Court of Makati, Branch 61 and STARBRIGHT SALES ENTERPRISES, INC., respondents
G.R No. 131544 Date: March 16, 2001. Ponente: Justice Buena
Topic: State Immunity from Suit
Doctrine:
Governmental immunity from suit cannot serve as an instrument for perpetrating an injustice on a citizen.
Super Summary:
Private contractors were promised payment by DPWH Undersecretary for additional constructions but DPWH Secretary
refused to pay the claim despite indorsement from the COA and opinions of other officials. Petitioners therefore petitioned
for a mandamus against the Secretary to pay the claim but the mandamus was dismissed. Hence, they filed a petition for
certiorari for the dismissal to be reconsidered. The dismissal was overturned and the claims were ordered for payment.
RELEVANT FACTS:
● In 1983, the Ministry of Human Settlement, through the BLISS Development Corporation, initiated a housing
project on a government property along the east bank of the Manggahan Floodway in Pasig City. For this purpose,
the Ministry of Human Settlement entered into a Memorandum of Agreement (MOA) with the Ministry of Public
Works and Highways, 2 where the latter undertook to develop the housing site and construct thereon 145 housing
units.
● By virtue of the MOA, the Ministry of Public Works and Highways forged individual contracts with different
contractors including the petitioner, EPG, for the construction of the housing units. Under the contracts, the scope
of construction and funding therefor covered only around "2/3 of each housing unit."
● After complying with the terms of said contracts, and by reason of the verbal request and assurance of then DPWH
Undersecretary Aber Canlas that additional funds would be available and forthcoming, petitioners agreed to
undertake and perform "additional constructions" for the completion of the housing units, despite the absence of
appropriations and written contracts to cover subsequent expenses for the "additional constructions."
● Petitioners then received payment for the construction work duly covered by the individual written contracts,
thereby leaving an unpaid balance of P5,918,315.63, 5 which amount represents the expenses for the "additional
constructions" for the completion of the existing housing units.
● 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
● A Petition for Mandamus was filed by petitioners against herein respondent Hon. Gregorio Vigilar, in his capacity as
Secretary of the Department of Public Works and Highways (DPWH) to (1) pay petitioners the total of
P5,819,316.00; and (2) To pay petitioners moral and exemplary damages in the amount to be fixed by the Court
and sum of P500,000.00 as attorney's fees. The petition was dismissed.
● Petitioners filed an instant Petition for Certiorari to reverse the decision which is the subject of this case.
Issue #1: Whether or not the State is immune from suit
IN THIS CASE, THE COURT RULED NO
RATIO DECIDENDI
RULE:
Non-suability of the State, otherwise known as the Royal Prerogative of Dishonesty,
SECTION 10. Non-suability of the State.—No suit shall lie against the State except with its consent as provided by law.
EXCEPTION:
Respondent's argument is misplaced inasmuch as the Principle of State Immunity finds no application in the case
before us. Under these circumstances, respondent may not validly invoke the Royal Prerogative of Dishonesty and
conveniently hide under the State's cloak of invincibility against suit, considering that this principle yields to certain
settled exceptions.
The doctrine of governmental immunity from suit cannot serve as an instrument for perpetrating an injustice on a
citizen.
The Court held that if the doctrine of State Immunity will be upheld, the ends of justice would be subverted. Justice
and equity sternly demand that the State's cloak of invincibility against suit be shred in this particular instance. The
Court — as the staunch guardian of the citizens' rights and welfare — cannot sanction an injustice and allow itself to
be an instrument in the perpetration thereof.
DISPOSITION
IN VIEW WHEREOF, the instant petition is GRANTED.
The assailed decision of the Regional Trial Court dated 07 November 1997 is REVERSED AND SET ASIDE.
ACCORDINGLY, the Commission on Audit is hereby directed to determine and ascertain with dispatch, on a quantum
meruit basis, the total compensation due to petitioners-contractors for the additional constructions on the housing
project and to allow payment thereof upon the completion of said determination.
No costs. SO ORDERED.
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01 - ALCORAN - EPG v. Vigilar

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Subject: Consti 1 Topic:

Topic: State Immunity from Suit

Issue #1: Whether or not the State is immune from suit

IN THIS CASE, THE COURT RULED NO

IN VIEW WHEREOF, the instant petition is GRANTED.

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