Floria vs Sunga 368 SCRA 551
Rodrigo Badilla were married on
FACTS:
On August 5, 1999, one Mrs.
Badilla filed with the Office of the
Ombudsman a letter-complaint
against Alda C. Floria[3] alleging that
she has an illicit relationship with
Rodrigo Badilla, a former employee
of the Court of Appeals, married to
Celia Badilla, also a former
employee of the same court.
In a Sworn Affidavit dated
September 22, 1999, likewise filed
with the Office of the Ombudsman,
one Rogelio Goyal charged Floria
with falsification by indicating in her
childrens certificates of live birth
that she and Rodrigo Badilla were
married on May 22, 1972 in
Cabanatuan City. Both complaints
were forwarded by the Office of the
Ombudsman to the Office of the
Court Administrator (OCA).
Aperocho, Curie Sunga, Danny
Constantino, Josefina
Padilla, Mitos Santos, Sheila
Casaclang, and Phil Calinga, all
employees of the Court of Appeals
Information and Statistical Data
Division, filed a Manifesto with the
OCA, docketed as OCA IPI No.
9918-CA-P. They alleged therein
that Floria committed immorality,
falsification and misrepresentation
by having an illicit relation with a
married man; by causing false
entries in the certificates of live birth
of her children stating that she and
May 22, 1972; and by misleading
the Court of Appeals Selection and
Promotions Board that she is a
graduate of Masteral Degree in
Management from the
Technological University of the
Philippines (TUP). However, the
TUPs Certification dated September
6, 1999 states that while Floria
completed the academic
requirements for Master in
Management as of March 1999, her
application for graduation is still to
be acted upon by the Board of
Regents. The Manifesto also states
that Celia Badilla and Rogelio Goyal
have filed with the Office of the
Ombudsman similar complaints
against Floria.
In her comment on the
Manifesto, Floria admitted she has
two children with Rodrigo Badilla,
her co-employee, born in 1974 and
1979. However, she did not know
then he was married. It was only
later that she came to know of his
marriage with Celia Badilla, also an
employee in the Court of Appeals.
In February 1980, she severed her
relationship with Badilla when I
regained by senses and sensitivity
and realizing the impropriety of my
relationship with him.
ISSUE:
Whether or not the
Administrative Offenses prescribe
Whether or not the
respondents are motivated by
malice and bad faith in filing the
case against Floria.
RULING:
NO. Administrative offenses do
not prescribe. It bears stressing that
it is not in accordance with the
norms of morality for a woman,
even if single, to maintain an illicit
relationship with a married man.
Even if such relationship had ended,
the stigma of immorality still
attaches to the parties, especially
the woman. This is specially so
when the persons concerned are
public employees who are supposed
to maintain a high standard of
morality in order to live up to their
role as models in society. The fact
that the illicit relationship between
Floria and Rodrigo Abadilla has
ceased will only mitigate her
culpability.
NO. We are convinced of the
righteousness of movants cause.
Implicit in their Manifesto is their
desire that the incoming Chief of
their Division is a person of good
moral character, someone whom
they can respect. Indeed, we
believe that in filing such Manifesto,
they simply wanted an assurance
that the person to be appointed to
the position of
Division Chief is morally fit.
Every employee of the
judiciary should be an example
of integrity, uprightness and
honesty. Like any public servant,
he must exhibit the highest sense of
honesty and integrity not only in the
performance of his official duties
but in his personal and private
dealings with other people, to
preserve the courts good name and
standing. It cannot be overstressed
that the image of a court of justice
is mirrored in the conduct, official
and otherwise, of the personnel
who worked thereat, from the judge
to the lowest of its personnel.
Court personnel have been
enjoined to adhere to the
exacting standards of morality
and decency in their
professional and private
conduct in order to preserve
the goodname and integrity of
the courts of justice. xxx. [6] -----
----------------------------------
ESTELITO V. REMOLONA
vs. CIVIL SERVICE
COMMISSION
G.R. No. 137473 August
2, 2001
FACTS:
Estelito Remolona is the Postmaster
of Infanta, Quezon while his wife
Nery is a teacher in Kiborosa
Elementary School. On January 3,
1991, Francisco
America, the District Supervisor of
Infanta inquired about Nery’s Civil
Service eligibility who purportedly
got a rating of 81.25%. Mr. America
also disclosed that he received
information that Nery was
campaigning for a fee of 8,000
pesos per examinee for a passing
mark in the board examination for
teachers. It was eventually revealed
that Nery Remolona’s name did not
appear in the passing and failing
examinees and that the exam no.
061285 as indicated in her report of
rating belonged to a certain Marlou
Madelo who got a rating of
65%.Estelito Remolona in his
written statement of facts said that
he met a certain Atty.
Salupadin in a bus, who offered to
help his wife obtain eligibility for a
fee of 3,000 pesos. Mr. America
however, informed Nery that there
was no vacancy when she
presented her rating report, so
Estelito went to Lucena to complain
that America asked for money in
exchange for the appointment of his
wife, and that from 1986-1988,
America was able to receive 6
checks at 2,600pesos each plus
bonus of Nery Remolona.
Remolona admitted that he was
responsible for the fake eligibility
and that his wife had no knowledge
thereof. On recommendation of
Regional Director Amilhasan of the
Civil Service, the CSC found the
spouses guilty of dishonesty and
imposed a penalty of dismissal and
all its accessory penalties. On
Motion for Reconsideration, only
Nery was exonerated and
reinstated. On appeal, the Court of
Appeals dismissed the petition for
review and denied the motion for
reconsideration and new trial.
ISSUE:
Whether or not a civil service
employee can be dismissed from
the government service for an
offense which is not work-related or
which is not connected with the
performance of his official duty.
RULING:
Yes. The private life of an employee
cannot be segregated from his
public life. Dishonesty inevitably
reflects on the fitness of the officer
or employee to continue in office
and the discipline and morale of the
service. It cannot be denied that
dishonesty is considered a grave
offense punishable by dismissal for
the first offense under Section 23,
Rule XIV of the Rules Implementing
Book V of Executive Order No. 292.
And the rule is that dishonesty, in
order to warrant dismissal, need not
be committed in the course of the
performance of duty by the person
charged. The rationale for the rule
is that if a government officer or
employee is dishonest or is guilty of
oppression or grave misconduct,
even if said defects of character are
not connected with his office, they
affect his right to continue in office.
The Government cannot tolerate in
its service a dishonest official, even
if he performs his duties correctly
and well, because by reason of his
government position, he is given
more and ample opportunity to
commit acts of dishonesty against
his fellow men, even against offices
and entities of the government
other than the office where he is
employed; and by reason of his
office, he enjoys and possesses a
certain influence and power which
renders the victims of his grave
misconduct, oppression and
dishonesty less disposed and
prepared to resist and to counteract
his evil acts and actuations.
Decision appealed from is hereby
AFFIRMED in toto.
-----------------------------------------------------
LILY O. ORBASE vs.
OMBUDSMAN G.R. No. 175115
December 23, 2009
FACTS:
Respondent
Mendoza-Bolos, then Director of the
National Library, filed a complaint
against petitioner Lily O. Orbase,
Assistant Director of the same
Office, before the Evaluation and
Preliminary Investigation Bureau
(EPIB), Office of the Ombudsman,
for violation of
Republic Act No. 3019, or the
AntiGraft and Corrupt Practices Act,
as amended, docketed as OMB-
ADM0-99-0198
The case stemmed from the
alleged misrepresentation and/or
dishonesty committed by the
petitioner when she declared in her
bio-data, which was attached to
her application for the position of
Assistant Director of the National
Library dated January 9, 1996, that
she was a consultant of the
National Library "from
MarchDecember 1993 and
February 1994 to present" when in
fact petitioner merely held the said
position for the period covering
March 1, 1993 to December 31,
1994.
Petitioner denied such
allegations. She claimed that the
said bio-data was inadvertently
attached to the subject application.
Petitioner asserted further that she
was hired not only on the basis of
her consultancy position with the
Adoracion National Library, but for her other
qualifications as well. She also
controverted the authenticity of the
bio-data that was attached to the
complaint, since it did not bear her
initial or signature.[6]
EPIB dismissed the criminal
aspect of the case but
recommended that administrative
aspect thereof be referred to the
Administrative Adjudication Bureau
(AAB), Office of the Ombudsman,
for the conduct of the proper
administrative proceedings against
petitioner which eventually
declared her guilty.
Aggrieved, petitioner sought
recourse before the CA citing that
the Ombudsman has no jurisdiction
over the case. On August 11, 2006,
the CA rendered a
Decision [17]
denying the petition,
 In denying the petition, the public office.[22] Thus, Section 21
CA ratiocinated that the Office of thereof provides:
the Ombudsman has concurrent
jurisdiction over administrative SEC.
complaints involving public officers 21. Officials Subject to
and employees; thus, petitioners Disciplinary Authority;
contention that the Office of the Exceptions. ― The
Ombudsman had no jurisdiction Office of the
over the subject complaint cannot Ombudsman shall
have disciplinary
be upheld.
authority over all
elective and
Petitioner argues that the CA appointive officials
erred when it ruled that the Office of the
of the Ombudsman has jurisdiction Government and its
over the administrative case despite subdivisions,
the fact that the act complained of instrumentalities and
was committed before her entry into agencies, including
government service. Members of the Cabinet, local
government,
ISSUE: government-owned or
controlled corporations
Whether or not the
and their subsidiaries,
Ombudsman has jurisdiction over except over officials who
the case may be removed only by
impeachment or over
Members of Congress,
and the Judiciary.[23]
RULING:
At the time of the filing of the
case against petitioner, she was the
YES. R.A. No. 6770 Assistant Director of the National
provides for the functional and Library; as such, as an appointive
structural organization of the Office employee of the government, the
of the Ombudsman. In passing jurisdiction of the Office of the
R.A. No. 6770, Congress Ombudsman to take cognizance of
deliberately endowed the the action against the petitioner was
Ombudsman with the power to beyond contestation.
prosecute offenses
committed by public officers and Moreover, petitioners claim that the
employees to make him a more Ombudsman does not have
active and effective agent of the jurisdiction over the action, since
people in ensuring accountability in the act complained of was
committed before her entering
government service, cannot be
sustained.
Even if the dishonest act was
committed by the employee prior to
entering government service, such
act is still a ground for disciplinary
action.
------------------------------------------
Bacani vs Nacoco. GR No. L-
9657
FACTS:
Plaintiffs Bacani and Matto
are both court stenographers
assigned in Branch VI of the Court
of First Instance of Manila.
During the pendency of a civil
case in the said court, Francisco
Sycip vs. National Coconut
Corporation, Assistant Corporate
Counsel Federico Alikpala, counsel
for Defendant, requested said
stenographers for copies of the
transcript of the stenographic notes
taken by them during the hearing.
Plaintiffs complied with the request
by delivering to Counsel Alikpala the
needed transcript containing
714 pages and thereafter submitted
to him their bills for the payment of
their fees.
The National Coconut
Corporation (NACOCO) paid the
amount of P564 to Leopoldo T.
Bacani and P150 to Mateo A. Matoto
for said transcript at the rate of P1
per page. But the Auditor General
required the plaintiffs to reimburse
said amounts by virtue of a
Department of Justice circular which
stated that NACOCO, being a
government entity, was exempt
from the payment of the fees in
question. For reimbursement to
take place, it was further ordered
that the amount of P25 per payday
be deducted from the salary of
Bacani and P10 from the salary of
Matoto.
Petitioners filed an action in
Court countering that NACOCO is
not a government entity within the
purview of section 16, Rule 130 of
the Rules of Court. On the other
hand, the defendants set up a
defense that NACOCO is a
government entity within the
purview of section 2 of the Revised
Administrative Code of 1917 hence,
it is exempted from paying the
stenographers’ fees under Rule 130
of the Rules of Court.
ISSUES:
Whether or not National Coconut
Corporation (NACOCO), which
performs certain functions of
government, make them a part of
the Government of the Philippines.
Discussions:
 NACOCO is not considered a RULINGS:
government entity and is not
exempted from paying the
stenographers’ fees under Rule 130 No. NACOCO do not acquire that
of the Rules of Court. status for the simple reason that
they do not come under the
Sec. 2 of the Revised
classification of municipal or public
Administrative Code defines the
corporation. While NACOCO was
scope of the term “Government of
organized for the purpose of
the Republic of the Philippines”. The
“adjusting the coconut industry to a
term “Government” may be defined
position independent of trade
as “that institution or aggregate of
preferences in the United States”
institutions by which an
and of providing “Facilities for the
independent society makes and
better curing of copra products and
carries out those rules of action
the proper utilization of coconut
which are necessary to enable men
byproducts”, a function which our
to live in a social state, or which are
government has chosen to exercise
imposed upon the people forming
to promote the coconut industry. It
that society by those who possess
was given a corporate power
the power or authority of
separate and distinct from the
prescribing them” (U.S. vs. Dorr, 2
government, as it was made subject
Phil., 332). This institution, when
to the provisions of the Corporation
referring to the national
Law in so far as its corporate
government, has reference to what
existence and the powers that it
our Constitution has established
may exercise are concerned
composed of three great
(sections 2 and 4, Commonwealth
departments, the legislative,
Act No. 518). It may sue and be
executive, and the judicial, through
sued in the same manner as any
which the powers and functions of
other private corporations, and in
government are exercised. These
this sense it is an entity different
functions are twofold: constitute
from our government.
and ministrant. The former are
those which constitute the very ---------------------------------------
bonds of society and are
compulsory in nature; the latter are MIAA vs CA GR No. 155650
those that are undertaken only by
way of advancing the general
interests of society, and are merely FACTS:
optional.
 The The Mani Manila la Inte
Intern rnat atio iona nall Airp Airpor
ortt Auth Author orit ity y (MIA
(MIAA) A) oper operat ates es the
the Nino Ninoy y Aqui Aquino no
International Airport (NAIA)
Complex in Parañaque City under
Executive Order No. 903 (MIAA
Charte Charter), r), as ame amende
nded. d. As such such operat
operator, or, it admini administe
sters rs the land, land, improv
improveme ements nts and
equipment within the NAIA
Complex. In March 1997, the Office
of the Government Corporate
Counsel (OGCC) issued Opinion No.
061 to the effect that the Local
Government Code of 1991 (LGC)
withdrew the exemption from real
estate tax granted to MIAA under
Section 21 of its Charter.
Thus, MIAA paid some of the
real estate tax already due. In June
2001, it received Final Notices of
Real Estate Tax Delinquency from
the City of Parañaque for the
taxable years 1992 to 2001. The
City Treasurer subsequently issued
notices of levy and warrants of levy
on the airport lands and buildings.
At the instance of MIAA, the OGCC
issued Opinion No. 147 clarifying
Opinion No. 061, pointing out that
Sec. 206 of the LGC requires
persons exempt from real estate tax
to show proof of exemption.
According to the OGCC, Sec. 21 of
the MIAA Charter is the proof that
MIAA is exempt from real estate tax.
MIAA, thus, filed a petition with the
Court of Appeals seeking to restrain
the City of Parañaque from
imposing real estate tax on, levying
against, and auctioning for public
sale the airport lands and buildings,
but this was dismissed for having
been filed out of time. Hence, MIAA
filed this petition for review,
pointing out that it is exempt from
real estate tax under Sec. 21 of its
charter and Sec. 234 of the LGC. It
invokes the principle that the
government cannot tax itself as a
justification for exemption, since the
airport lands and buildings, being
devoted to public use and public
service, are owned by the Republic
of the Philippines. On the other
hand, the City of Parañaque invokes
Sec. 193 of the LGC, which
expressly expressly withdrew the
tax exemptio exemption n privileg
privileges es of governmen
government-own t-owned ed and
controlle controlled d corporations
(GOCC) upon the effectivity of the
LGC. It asserts that an international
airport is not among the exceptions
mentioned in the said law.
Meanwhile, the City of Parañaque
posted and published notices
announcing the public auction sale
of the airport lands and buildings. In
the afternoon before the scheduled
public auction, MIAA applied with
the Court for the issuance of a TRO
to restrain the auction sale. The
Court issued a TRO on the day of
the auction sale, however, the same
was received only by the City of
Parañaque three hours after the
sale. Issue:
ISSUES:
Whether or not the airport
lands and buildings of MIAA are
exempt from real estate tax?
RULINGS:
The airport lands
and buildings of MIAA are
exempt from real estate tax
imposed by local governments.
Sec. 243(a) of the LGC exempts
from real estate tax any real
property owned by the Republic of
the Philippines. This exemption
should be read in relation with Sec.
133( 133(o) o) of the the LGC,
LGC, whic which h prov provid ides
es that that the the exer exerci cise
se of the the taxi taxing ng powe
powers rs of loca locall
governments shall not extend to
the levy of taxes, fees or charges
of any kind on the National
Government, its agencies and
instrumentalities. instrumentalities.
These provisions recognize
the basic principle that local
governments cannot tax the
national government, which
historically merely delegated to local
governments the power to tax. The
rule is that a tax is never presumed
and there must be clear language in
the law imposing the tax. This rule
applies with greater force when
local governments seek to tax
national government
instrumentalities. Moreover, a tax
exemption is construed liberally in
favor of national government
instrumentalities. MIAA is not a
GOCC, but an instrumentality of the
government. The Republic remains
the beneficial owner of the
properties. MIAA itself is owned
solely by the Republic. At any time,
the President can transfer back to
the Republic title to the airport lands
and buildings without the Republic
paying MIAA any consideration. As
long as the airport lands and
buildings are reserved for public
use, their ownership remains with
the State. Unless the President
issues a proclamation withdrawing
these properties from public use,
they remain properties of public
dominion. As such, they are
inalienable, hence, they are not
subject to levy on execution or
foreclosure sale, and they are
exempt from real estate tax.
Howeve However, r, portio portions
ns of the airpor airportt lands lands
and buildi buildings ngs that that
MIAA MIAA lea leases ses to privat
private e entities are not exempt
from real estate tax. In such a case,
MIAA has granted the beneficial use
of such portions for a consideration
to a taxable person.
------------------------------------------
Central Bank vs Ablaza GR No.
L-33022
FACTS:
Defendant Central Bank of the
Philippines awarded to private
respondent Ablaza Construction the
contract for the general
construction of its various proposed
regional offices, including the
Central Bank regional office building
in San Fernando, La Union.
CB allowed the Ablaza to commence
the contruction work without any
formal, written contract. CB then
failed and refused to continue with
the project unless the plans were
modified and the agreed contruct
price was lowered, contending that
its action was in compliance with
the policy of fiscal restraint declared
by then new president of the
Philippines and with latter’s
memorandum circular no. 1.
Ablaza sued for damages arising
from breach of contract before the
CFI of Rizal, which ordered the CB
to pay damages. It was also
affirmed by the CA. CB claimed that
there was no perfected contract in
this case because there was no
showing of compliance with a
specific requirement that there
must be a certification of availability
of funds by the Auditor General.
Section 607 of the Revised
Administrative Code provides that “
Certificate showing appropriation to
meet contract.
—
Except in the case of a contract for
personal service or for supplies to
be carried in stock, no contract
involving an expenditure by the
National Government of three
thousand pesos or more shall be
entered into or authorized until the
Auditor General shall have certified
to the officer entering into such
obligation that funds have been duly
appropriated for such purpose and
that the amount necessary to cover
the proposed contract is available
for expenditure on account thereof.
When application is made to the
Auditor General for the certificate
herein required, a copy of the
proposed contract or agreement
shall be submitted to him
accompanied by a statement in
writing from the officer making the
application showing all obligations
not yet presented for audit which
have been incurred against the
appropriation to which the contract
in question would be chargeable;
and such certificate, when signed by
the Auditor, shall be attached to and
become a part of the proposed
contract, and the sum so certified
shall not thereafter be available for
expenditure for any other purposes
until the
Government is discharged from the
contract in question.”
for steel pipes for the Manila project
and suburbs violates the provisions
of Republic Act 912. The court
rendered a decision finding and
concluding that the act of the
NAWASA in specifying steel pipes
for the project of the city of Manila
and its suburbs, and in awarding the
contracts for the supply of steel
pipes in the cases of the Davao and
Iloilo Waterworks System,
constituted a violation of the
provisions of Republic Act 912.
Appellant argued that the provisions
of Republic Act 912 were applicable
only to construction or repair works
undertaken by the Government.
That since the NAWASA, though a
public corporation, is not a
municipal corporation or agency of
the State empowered to regulate or
administer the local affairs of a town
or city, nor one of the various arms
of the government through which
political authority is made effective
in the Islands, consequently, the
NAWASA should not be included
within the meaning of the term
"Government" as used in the law.
ISSUE:
Whether or not NAWASA
should be included within the
meaning of the term government.
RULING:
Yes. The court ruled that the
NAWASA, like any other corporation
exercising proprietary or
governmental functions should be
deemed embraced within the term
"Government" found in
Republic Act 912, and in the repair
or construction of their works or
projects or the purchase of
materials therefor, local materials
should be given preference when
available, practicable and usable.
Section 2 of the Revised
Administrative Code defining the
term "Government" which is heavily
relied upon by the appellant
recognizes an exception: "when a
different meaning for the word or
phrase is given a particular statute
or is plainly to be collected from the
context or connection where the
term is used." In this context of the
law, the term "government" without
any qualification as used in
Republic Act 912, should be
construed in its implied sense and
not in the strict signification of the
term "Government of the
Philippines" as the political entity
through which political authority is
exercised.
----------------------------------------
Maceda vs Macaraig GR No.
88291
FACTS:
Senator Ernesto
Maceda sought to nullify
certain decisions, orders, rulings,
and resolutions of respondents
Executive Secretary,
Secretary of Finance, Commissioner
of Internal Revenue, Commissioner
of Customs and the Fiscal
Incentives Review Board FIRB for
exempting the National Power
Corporation (NPC) from indirect tax
and duties. RA 358, RA 6395 and PD
380 expressly grant NPC
exemptions from all taxes whether
direct or indirect. In 1984, however,
PD 1931 and EO 93 withdrew all tax
exemptions granted to all GOCCs
including the NPC but granted the
President and/or the Secretary of
Finance by recommendation of the
FIRB the power to restore certain
tax exemptions. Pursuant to the
latter law, FIRB issued a resolution
restoring the tax and duty
exemption privileges of the NPC.
The actions of the respondents
were thus questioned by the
petitioner by this petition for
certiorari, prohibition and
mandamus with prayer for a writ of
preliminary injunction and/or
restraining order. To which public
respondents argued, among others,
that petitioner does not have the
standing to challenge the
questioned orders and resolution
because he was not in any way
affected by such grant of tax
exemptions.
ISSUE:
Has a taxpayer the capacity
to question the legality of the
resolution issued by the FIRB
restoring the tax exemptions?
RULING:
Yes. In this petition it is
alleged that petitioner is
"instituting this suit in his capacity
as a taxpayer and a duly-elected
Senator of the Philippines." Public
respondent argues that petitioner
must show that he has sustained
direct injury as a result of the action
and that it is not sufficient for him
to have a mere general interest
common to all members of the
public. The Court however agrees
with the petitioner that as a
taxpayer he may file the instant
petition following the ruling in
Lozada when it involves illegal
expenditure of public money. The
petition questions the legality of the
tax refund to NPC by way of tax
credit certificates and the use of
said assigned tax credits by
respondent oil companies to pay for
their tax and duty liabilities to the
BIR and Bureau of Customs.
--------------------------------------
Fontanilla vs. Maliaman GR
No. L-55963
FACTS:
A pick up owned by the National
Irrigation Administration and driven
officially by its regular driver, Hugo
Garcia, bumped a bicycle ridden by
Francisco Fontanilla, which resulted
in the latter's death. The parents of
Francisco filed a suit for damages
against Garcia and the NIA, as
Garcia's employer. After trial, the
court awarded actual, moral and
exemplary damages to Spouses
Fontanilla. NIA appealed. The
Solicitor General contends that the
NIA does not perform solely and
primarily proprietary functions but is
an agency of the government
tasked with governmental
functions, and is therefore not liable
for the tortious act of its driver Hugo
Garcia, who was not its special
agent.
ISSUE:
May NIA, a government agency, be
held liable for the damages caused
by the negligent act of its driver who
was not its special agent?
RULING:
Yes. NIA is a government agency
with a juridical personality separate
and distinct from the government. It
is not a mere agency of the
government but a corporate body
performing proprietary functions.
Therefore, it may be held liable for
the damages caused by the
negligent act of its driver who was
not its special agent. (Fontanilla vs.
Maliaman, G.R. Nos. L-55963 &
61045, February 27, 1991)
RATIO:
■ Section 1 of RA No. 3601 tells us
that NIA is a government agency
invested with a corporate
personality separate and distinct
from the government, thus is
governed by the Corporation Law.
Section 2, subsection f of PD 552
provides that NIA also has its own
assets and liabilities and has
corporate powers to be exercised by
a Board of Directors. Section 2,
subsection b of PD 552 provides
that NIA may sue and be sued in
court.
■ Of equal importance is the case
of National Waterworks and
Sewerage Authority (NAWASA) vs.
NWSA Consolidated Unions, 11
SCRA 766, which propounds the
thesis that "the NAWASA is not an
agency performing governmental
functions; rather it performs
proprietary functions . . . ." The
functions of providing water supply
and sewerage service are regarded
as mere optional functions of
government even though the
service rendered caters to the
community as a whole and the goal
is for the general interest of society.
Like the NAWASA, the National
Irrigation Administration was not
created for purposes of local
government. While it may be true
that the NIA was essentially a
service agency of the government
aimed at promoting public interest
and public welfare, such fact does
not make the NIA essentially and
purely a "government-function"
corporation. NIA was created for
the purpose of "constructing,
improving, rehabilitating, and
administering all national irrigation
systems in the Philippines, including
all communal and pump irrigation
projects." Certainly, the state and
the community as a whole are
largely benefited by the services the
agency renders, but these functions
are only incidental to the principal
aim of the agency, which is the
irrigation of lands.
NOTES:
■ The liability of the State has
two aspects. namely:
1. Its public or governmental
aspects where it is liable for the
tortious acts of special agents
only.
2. Its private or business
aspects (as when it engages in
private enterprises) where it
becomes liable as an ordinary
employer.
----------------------------------------
Iron Steel vs CA GR No.
102976
FACTS:
The Iron and Steel Authority (ISA)
was created by PD No. 272, in
order, generally, to develop and
promote the iron and steel industry
in the Philippines. Initially, it was
created for a term of 5 years but
when its original term expired, its
term was extended for another 10
years by EO No. 555. The National
Steel Corporation (NSC) then a
wholly owned subsidiary of the
National Development Corporation
which is an entity wholly owned by
the National Government embarked
on an expansion program which
includes the construction of a steel
mill in Iligan City. Proclamation No.
2239 was issued by the President
withdrawing from sale or settlement
a tract of land in Iligan
City to be used by the NSC.
However, certain portions of the
public land under Proclamation
2239 were occupied by Maria
Cristina Fertilizer Co. (MCFC). LOI
No. 1277 was issued directing NSC
to negotiate with the owners of
MCFC for and on behalf of the
Government for the compensation
of MCFC’s present occupancy rights
on the subject land. The LOI
directed that ISA may exercise the
power of eminent domain should
the negotiations fail. The
negotiations failed and ISA
commenced expropriation
proceedings against MCFC. While
trial was on-going the statutory
existence of ISA had expired
prompting MCFC to file the dismissal
of the case since ISA has ceased to
be a juridical person. The trial court
granted MCFC’s motion to dismiss
anchoring on the Rules of Court that
“only natural or juridical persons or
entities authorized by law may be
parties to a civil case.” ISA moved
for a reconsideration contending
that despite the expiration of its
term, its juridicial existence
continued until the winding up of its
affairs could be completed. In the
alternative ISA urged that the Rep.
of the Philippines should be allowed
to be substituted in its place. The
RTC denied its motion for
reconsideration. This was affirmed
by the CA.
ISSUE:
Whether or not the Republic of the
Philippines is entitled to be
substituted for ISA in view of the
expiration of ISA’s term.
RULING:
There is no provision in PD No. 272
recognizing ISA as possessing
general or comprehensive juridical
personality separate and distinct
from that of the Government. ISA in
fact appears to be a non-
incorporated agency or
instrumentality of the Government
of the Republic of the Philippines. It
is common knowledge that other
agencies or instrumentalities of the
Government of the Republic are
case in corporate form, that is to
say, are incorporated agencies or
instrumentalities, sometimes with
and other times without capital
stock, and accordingly vested with a
juridical personality distinct from
the personality of the Republic. The
term “Authority” has been used to
designate both incorporated and
non-incorporated agencies or
instrumentalities of the
Government.
The Court considers that ISA is
properly regarded as an agent or
delegate of the Republic of the
Philippines. The Republic itself is a
body corporate and juridical person
vested with full panoply of powers
and attributes which are
compendiously described as “legal
personality.”
When the statutory term of a
nonincorporated agency expires,
the powers, duties and functions as
well as the assets and liabilities of
that agency revert back to, and are
re-assumed by, the Republic of the
Philippines, in the absence of
special provisions of law specifying
some other disposition thereof such
as e.g. devolution or transmission of
such powers, duties, functions, etc.
to some other identified successor
agency or instrumentality of the
Republic of the Philippines. When
the expiring agency is an
incorporated one, the consequences
of such expiry must be looked for,
in the first instance, in the charter
of that agency and, by way of
supplementation in the provisions of
the Corporation Code. Since ISA is a
non-incorporated agency or
instrumentality of the Republic, its
powers, duties, functions, assets
and liabilities are properly regarded
as folded back into the Government
of the Philippines and hence
assumed once again by the
Republic, no special statutory
provision having been shown to
have mandated succession thereto
by some other entity or agency of
the Republic.

It follows that the Republic of the

Philippines is entitled to be
substituted in the expropriation
proceedings as party-plaintiff in lieu
of ISA, the statutory term of ISA
having expired. The expiration of
ISA’s statutory did not by itself
require or justify the dismissal of the
eminent domain proceedings.
Further, no new legislative act is
necessary should the Republic
decide, upon being substituted for
ISA, in fact to continue to prosecute
the expropriation
proceedings.