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The antecedent facts are as follows:
Period: Midterm
Week: 1st week Petitioner Municipality of San Fernando, La Union is a municipal
Topic: Political or corporate nature of LGUs corporation existing under and in accordance with the laws of the
Republic of the Philippines. Respondent Honorable Judge Romeo N.
Firme is impleaded in his official capacity as the presiding judge of the
G.R. No. L-52179             April 8, 1991 Court of First Instance of La Union, Branch IV, Bauang, La Union.
While private respondents Juana Rimando-Baniña, Laureano Baniña,
MUNICIPALITY OF SAN FERNANDO, LA UNION, petitioner Jr., Sor Marietta Baniña, Montano Baniña, Orja Baniña and Lydia R.
vs. Baniña are heirs of the deceased Laureano Baniña Sr. and plaintiffs in
HON. JUDGE ROMEO N. FIRME, JUANA RIMANDO- Civil Case No. 107-Bg before the aforesaid court.
BANIÑA, IAUREANO BANIÑA, JR., SOR MARIETA BANIÑA,
MONTANO BANIÑA, ORJA BANIÑA, AND LYDIA R. At about 7 o'clock in the morning of December 16, 1965, a collision
BANIÑA, respondents. occurred involving a passenger jeepney driven by Bernardo Balagot
and owned by the Estate of Macario Nieveras, a gravel and sand truck
Mauro C. Cabading, Jr. for petitioner. driven by Jose Manandeg and owned by Tanquilino Velasquez and a
Simeon G. Hipol for private respondent. dump truck of the Municipality of San Fernando, La Union and driven
by Alfredo Bislig. Due to the impact, several passengers of the jeepney
MEDIALDEA, J.: including Laureano Baniña Sr. died as a result of the injuries they
sustained and four (4) others suffered varying degrees of physical
This is a petition for certiorari with prayer for the issuance of a writ of injuries.
preliminary mandatory injunction seeking the nullification or
modification of the proceedings and the orders issued by the On December 11, 1966, the private respondents instituted a compliant
respondent Judge Romeo N. Firme, in his capacity as the presiding for damages against the Estate of Macario Nieveras and Bernardo
judge of the Court of First Instance of La Union, Second Judicial Balagot, owner and driver, respectively, of the passenger jeepney,
District, Branch IV, Bauang, La Union in Civil Case No. 107-BG, which was docketed Civil Case No. 2183 in the Court of First Instance
entitled "Juana Rimando Baniña, et al. vs. Macario Nieveras, et al." of La Union, Branch I, San Fernando, La Union. However, the
dated November 4, 1975; July 13, 1976; August 23,1976; February 23, aforesaid defendants filed a Third Party Complaint against the
1977; March 16, 1977; July 26, 1979; September 7, 1979; November petitioner and the driver of a dump truck of petitioner.
7, 1979 and December 3, 1979 and the decision dated October 10,
1979 ordering defendants Municipality of San Fernando, La Union and Thereafter, the case was subsequently transferred to Branch IV,
Alfredo Bislig to pay, jointly and severally, the plaintiffs for funeral presided over by respondent judge and was subsequently docketed as
expenses, actual damages consisting of the loss of earning capacity of Civil Case No. 107-Bg. By virtue of a court order dated May 7, 1975,
the deceased, attorney's fees and costs of suit and dismissing the the private respondents amended the complaint wherein the petitioner
complaint against the Estate of Macario Nieveras and Bernardo and its regular employee, Alfredo Bislig were impleaded for the first
Balagot. time as defendants. Petitioner filed its answer and raised affirmative
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defenses such as lack of cause of action, non-suability of the State, IN VIEW OF ALL OF (sic) THE FOREGOING, judgment is
prescription of cause of action and the negligence of the owner and hereby rendered for the plaintiffs, and defendants Municipality
driver of the passenger jeepney as the proximate cause of the collision. of San Fernando, La Union and Alfredo Bislig are ordered to
pay jointly and severally, plaintiffs Juana Rimando-Baniña,
In the course of the proceedings, the respondent judge issued the Mrs. Priscilla B. Surell, Laureano Baniña Jr., Sor Marietta
following questioned orders, to wit: Baniña, Mrs. Fe B. Soriano, Montano Baniña, Orja Baniña and
Lydia B. Baniña the sums of P1,500.00 as funeral expenses and
(1) Order dated November 4, 1975 dismissing the cross-claim P24,744.24 as the lost expected earnings of the late Laureano
against Bernardo Balagot; Baniña Sr., P30,000.00 as moral damages, and P2,500.00 as
attorney's fees. Costs against said defendants.
(2) Order dated July 13, 1976 admitting the Amended Answer
of the Municipality of San Fernando, La Union and Bislig and The Complaint is dismissed as to defendants Estate of Macario
setting the hearing on the affirmative defenses only with Nieveras and Bernardo Balagot.
respect to the supposed lack of jurisdiction;
SO ORDERED. (Rollo, p. 30)
(3) Order dated August 23, 1976 deferring there resolution of
the grounds for the Motion to Dismiss until the trial; Petitioner filed a motion for reconsideration and for a new trial without
prejudice to another motion which was then pending. However,
(4) Order dated February 23, 1977 denying the motion for respondent judge issued another order dated November 7, 1979
reconsideration of the order of July 13, 1976 filed by the denying the motion for reconsideration of the order of September 7,
Municipality and Bislig for having been filed out of time; 1979 for having been filed out of time.

(5) Order dated March 16, 1977 reiterating the denial of the Finally, the respondent judge issued an order dated December 3, 1979
motion for reconsideration of the order of July 13, 1976; providing that if defendants municipality and Bislig further wish to
pursue the matter disposed of in the order of July 26, 1979, such
(6) Order dated July 26, 1979 declaring the case deemed should be elevated to a higher court in accordance with the Rules of
submitted for decision it appearing that parties have not yet Court. Hence, this petition.
submitted their respective memoranda despite the court's
direction; and Petitioner maintains that the respondent judge committed grave abuse
of discretion amounting to excess of jurisdiction in issuing the
(7) Order dated September 7, 1979 denying the petitioner's aforesaid orders and in rendering a decision. Furthermore, petitioner
motion for reconsideration and/or order to recall prosecution asserts that while appeal of the decision maybe available, the same is
witnesses for cross examination. not the speedy and adequate remedy in the ordinary course of law.

On October 10, 1979 the trial court rendered a decision, the dispositive On the other hand, private respondents controvert the position of the
portion is hereunder quoted as follows: petitioner and allege that the petition is devoid of merit, utterly lacking
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the good faith which is indispensable in a petition for certiorari and special law may be passed to enable a person to sue the government
prohibition. (Rollo, p. 42.) In addition, the private respondents stress for an alleged quasi-delict, as in Merritt v. Government of the
that petitioner has not considered that every court, including Philippine Islands (34 Phil 311). (see United States of America v.
respondent court, has the inherent power to amend and control its Guinto, G.R. No. 76607, February 26, 1990, 182 SCRA 644, 654.)
process and orders so as to make them conformable to law and justice.
(Rollo, p. 43.) Consent is implied when the government enters into business
contracts, thereby descending to the level of the other contracting
The controversy boils down to the main issue of whether or not the party, and also when the State files a complaint, thus opening itself to a
respondent court committed grave abuse of discretion when it deferred counterclaim. (Ibid)
and failed to resolve the defense of non-suability of the State
amounting to lack of jurisdiction in a motion to dismiss. Municipal corporations, for example, like provinces and cities, are
agencies of the State when they are engaged in governmental functions
In the case at bar, the respondent judge deferred the resolution of the and therefore should enjoy the sovereign immunity from suit.
defense of non-suability of the State amounting to lack of jurisdiction Nevertheless, they are subject to suit even in the performance of such
until trial. However, said respondent judge failed to resolve such functions because their charter provided that they can sue and be sued.
defense, proceeded with the trial and thereafter rendered a decision (Cruz, Philippine Political Law, 1987 Edition, p. 39)
against the municipality and its driver.
A distinction should first be made between suability and liability.
The respondent judge did not commit grave abuse of discretion when "Suability depends on the consent of the state to be sued, liability on
in the exercise of its judgment it arbitrarily failed to resolve the vital the applicable law and the established facts. The circumstance that a
issue of non-suability of the State in the guise of the municipality. state is suable does not necessarily mean that it is liable; on the other
However, said judge acted in excess of his jurisdiction when in his hand, it can never be held liable if it does not first consent to be sued.
decision dated October 10, 1979 he held the municipality liable for the Liability is not conceded by the mere fact that the state has allowed
quasi-delict committed by its regular employee. itself to be sued. When the state does waive its sovereign immunity, it
is only giving the plaintiff the chance to prove, if it can, that the
The doctrine of non-suability of the State is expressly provided for in defendant is liable." (United States of America vs. Guinto, supra, p.
Article XVI, Section 3 of the Constitution, to wit: "the State may not 659-660)
be sued without its consent."
Anent the issue of whether or not the municipality is liable for the torts
Stated in simple parlance, the general rule is that the State may not be committed by its employee, the test of liability of the municipality
sued except when it gives consent to be sued. Consent takes the form depends on whether or not the driver, acting in behalf of the
of express or implied consent. municipality, is performing governmental or proprietary functions. As
emphasized in the case of Torio vs. Fontanilla (G. R. No. L-29993,
Express consent may be embodied in a general law or a special law. October 23, 1978. 85 SCRA 599, 606), the distinction of powers
The standing consent of the State to be sued in case of money claims becomes important for purposes of determining the liability of the
involving liability arising from contracts is found in Act No. 3083. A
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municipality for the acts of its agents which result in an injury to third In the absence of any evidence to the contrary, the regularity of the
persons. performance of official duty is presumed pursuant to Section 3(m) of
Rule 131 of the Revised Rules of Court. Hence, We rule that the driver
Another statement of the test is given in City of Kokomo vs. Loy, of the dump truck was performing duties or tasks pertaining to his
decided by the Supreme Court of Indiana in 1916, thus: office.

Municipal corporations exist in a dual capacity, and their We already stressed in the case of Palafox, et. al. vs. Province of
functions are twofold. In one they exercise the right springing Ilocos Norte, the District Engineer, and the Provincial Treasurer (102
from sovereignty, and while in the performance of the duties Phil 1186) that "the construction or maintenance of roads in which the
pertaining thereto, their acts are political and governmental. truck and the driver worked at the time of the accident are admittedly
Their officers and agents in such capacity, though elected or governmental activities."
appointed by them, are nevertheless public functionaries
performing a public service, and as such they are officers, After a careful examination of existing laws and jurisprudence, We
agents, and servants of the state. In the other capacity the arrive at the conclusion that the municipality cannot be held liable for
municipalities exercise a private, proprietary or corporate right, the torts committed by its regular employee, who was then engaged in
arising from their existence as legal persons and not as public the discharge of governmental functions. Hence, the death of the
agencies. Their officers and agents in the performance of such passenger –– tragic and deplorable though it may be –– imposed on the
functions act in behalf of the municipalities in their corporate municipality no duty to pay monetary compensation.
or individual capacity, and not for the state or sovereign
power." (112 N.E., 994-995) (Ibid, pp. 605-606.) All premises considered, the Court is convinced that the respondent
judge's dereliction in failing to resolve the issue of non-suability did
It has already been remarked that municipal corporations are suable not amount to grave abuse of discretion. But said judge exceeded his
because their charters grant them the competence to sue and be sued. jurisdiction when it ruled on the issue of liability.
Nevertheless, they are generally not liable for torts committed by them
in the discharge of governmental functions and can be held answerable ACCORDINGLY, the petition is GRANTED and the decision of the
only if it can be shown that they were acting in a proprietary capacity. respondent court is hereby modified, absolving the petitioner
In permitting such entities to be sued, the State merely gives the municipality of any liability in favor of private respondents.
claimant the right to show that the defendant was not acting in its
governmental capacity when the injury was committed or that the case SO ORDERED.
comes under the exceptions recognized by law. Failing this, the
claimant cannot recover. (Cruz, supra, p. 44.)

In the case at bar, the driver of the dump truck of the municipality
insists that "he was on his way to the Naguilian river to get a load of
sand and gravel for the repair of San Fernando's municipal streets."
(Rollo, p. 29.)
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large insofar as it is its agent in government, and private (so called)
[G.R. No. 71159. November 15, 1989.] insofar as it is to promote local necessities and conveniences for its
own community (Torio v. Fontanilla, 85 SCRA 599 [1978]).
CITY OF MANILA, and EVANGELINE SUVA, Petitioners, v.
HON. INTERMEDIATE APPELLATE COURT, IRENE STO. 3. ID.; ID.; ID.; ID.; THE PROPERTIES OF A MUNICIPAL
DOMINGO and for and in behalf of her minor children, CORPORATION MAY EITHER BE FOR PUBLIC USE OR
VIVENCIO, JR., IRIS, VERGEL and IMELDA, all surnamed PATRIMONIAL. — In connection with the powers of a municipal
STO. DOMINGO, Respondents. corporation, it may acquire property in its public or governmental
capacity, and private or proprietary capacity. The New Civil Code
The City Legal Officer, for Petitioners. divides such properties into property for public use and patrimonial
properties (Article 423), and further enumerates the properties for
Jose M. Castillo for Respondents. public use as provincial roads, city streets, municipal streets, the
squares, fountains, public waters, promenades, and public works for
public service paid for by said provisions, cities or municipalities, all
SYLLABUS other property is patrimonial without prejudice to the provisions of
special laws (Article 424; Province of Zamboanga del Norte v. City of
Zamboanga, Et Al., 22 SCRA 1334 [1968]).
1. POLITICAL LAW; LAW ON PUBLIC CORPORATIONS;
MUNICIPAL CORPORATION; CITY OF MANILA ENDOWED 4. ID.; ID.; ID.; PROPRIETARY FUNCTIONS; A MUNICIPAL
WITH THE FACULTIES OF A MUNICIPAL CORPORATION. — CORPORATION CAN BE HELD LIABLE TO THIRD PERSONS
Under Philippine laws, the City of Manila is a political body corporate EX CONTRACTU . — In Torio v. Fontanilla, supra, the Court
and as such endowed with the faculties of municipal corporations to be declared that with respect to proprietary functions the settled rule is
exercised by and through its city government in conformity with law, that a municipal corporation can be held liable to third persons ex
and in its proper corporate name. It may sue and be sued, and contract contractu (Municipality of Moncada v. Cajuigan, Et Al., 21 Phil. 184
and be contracted with.chanroblesvirtuallawlibrary:red (1912) or ex delicto (Mendoza v. de Leon, 33 Phil. 508 (1916).

2. ID.; ID.; ID.; POWERS; GOVERNMENTAL AND MUNICIPAL 5. ID.; ID.; ID.; ID.; ID.; NORTH CEMETERY, A PATRIMONIAL
POWERS; DISTINGUISHED. — Its powers are twofold in character- PROPERTY OF THE CITY OF MANILA; UNDER THE
public, governmental or political on the one hand, and corporate, ADMINISTRATION OF THE HEALTH OFFICER. — In the absence
private and proprietary on the other. Governmental powers are those of a special law, the North Cemetery is a patrimonial property of the
exercised in administering the powers of the state and promoting the City of Manila which was created by resolution of the Municipal
public welfare and they include the legislative, judicial, public and Board of August 27, 1903 and January 7, 1904 (Petition, Rollo pp. 20-
political. Municipal powers on the one hand are exercised for the 21 Compilation of the Ordinances of the City of Manila). The
special benefit and advantage of the community and include those administration and government of the cemetery are under the City
which are ministerial, private and corporate. In McQuillin on Health Officer (Ibid., Sec. 3189), the order and police of the cemetery
Municipal Corporation, the rule is stated thus: "A municipal (Ibid., Sec. 319), the opening of graves, inches, or tombs, the
corporation proper has . . . a public character as regards the state at exhuming of remains, and the purification of the same (Ibid., Sec. 327)
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are under the charge and responsibility of the superintendent of the
cemetery. The City of Manila furthermore prescribes the procedure
and guidelines for the use and dispositions of burial lots and plots DECISION
within the North Cemetery through Administrative Order No. 5, s.
1975 (Rollo, p. 44). With the acts of dominion, there is, therefore no
doubt that the North Cemetery is within the class of property which the PARAS, J.:
City of Manila owns in its proprietary or private character.

6. CIVIL LAW; OBLIGATIONS AND CONTRACTS; This is a petition for review on certiorari seeking to reverse and set
OBLIGATIONS ARISING FROM CONTRACTS HAVE THE aside: (a) the Decision of the Intermediate Appellate Court now Court
FORCE OF LAW BETWEEN PARTIES; BREACH OF CONTRACT of Appeals 1 promulgated on May 31, 1984 in AC-G.R. CV No.
ENTITLES THE OTHER PARTY TO DAMAGES. — Furthermore, 00613-R entitled Irene Sto. Domingo Et. Al. v. City Court of Manila
there is no dispute that the burial lot was leased in favor of the private Et. Al., modifying the decision of the then Court of First Instance of
respondents. Hence, obligations arising from contracts have the force Manila, Branch VIII 2 in Civil Case No. 121921 ordering the
of law between the contracting parties. Thus a lease contract executed defendants (herein petitioners) to give plaintiffs (herein private
by the lessor and lessee remains as the law between them. (Henson v. respondents) the right to use a burial lot in the North Cemetery
Intermediate Appellate Court, 148 SCRA 11 [1987]). Therefore, a corresponding to the unexpired term of the fully paid lease sued upon,
breach of contractual provision entitles the other party to damages to search the remains of the late Vivencio Sto. Domingo, Sr. and to
even if no penalty for such breach is prescribed in the contract. bury the same in a substitute lot to be chosen by the plaintiffs; and (b)
(Boysaw v. Interphil Promotions, Inc., 148 SCRA 635 [1987]). the Resolution of the Court of Appeals dated May 28, 1985 denying
petitioner’s motion for reconsideration.chanrobles.com:cralaw:red
7. ID.; DAMAGES; RESPONDENT SUPERIOR; CITY OF
MANILA IS LIABLE FOR THE TORTIOUS ACT OF ITS As found by the Court of Appeals and the trial court, the undisputed
AGENTS; DURATION OF LEASE NOT AFFECTED BY facts of the case are as follows:jgc:chanrobles.com.ph
ADMINISTRATIVE ORDER ISSUED SUBSEQUENT TO THE
EXECUTION OF THE CONTRACT. — Under the doctrine of "Brought on February 22, 1979 by the widow and children of the late
respondeat superior, (Torio v. Fontanilla, supra), petitioner City of Vivencio Sto. Domingo, Sr. was this action for damages against the
Manila is liable for the tortious act committed by its agents who failed City of Manila; Evangeline Suva of the City Health Office; Sergio
to verify and check the duration of the contract of lease. The Mallari, officer-in-charge of the North Cemetery; and Joseph
contention of the petitioner-city that the lease is covered by Hebmuth, the latter’s predecessor as officer-in-charge of the said
Administrative Order No. 5, series of 1975 dated March 6, 1975 of the burial grounds owned and operated by the City Government of Manila.
City of Manila for five (5) years only beginning from June 6, 1971 is
not meritorious for the said administrative order covers new leases. "Vivencio Sto. Domingo, Sr. deceased husband of plaintiff Irene Sto.
When subject lot was certified on January 25, 1978 as ready for Domingo and father of the litigating minors, died on June 4, 1971 and
exhumation, the lease contract for fifty (50) years was still in full force buried on June 6, 1971 in Lot No. 159, Block No. 194 of the North
and effect. Cemetery which lot was leased by the city to Irene Sto. Domingo for
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the period from June 6, 1971 to June 6, 2021 per Official Receipt No. exhumed remains from the different burial lots of the North Cemetery
61307 dated June 6, 1971 (see Exh. A) with an expiry date of June 6, are being kept until they are retrieved by interested parties. But to the
2021 (see Exh. A-1). Full payment of the rental therefor of P50.00 is bereaved widow, what she was advised to do was simply unacceptable.
evidenced by the said receipt which appears to be regular on its face. According to her, it was just impossible to locate the remains of her
Apart from the aforementioned receipt, no other document was late husband in a depository containing thousands upon thousands of
executed to embody such lease over the burial lot in question. In fact, sacks of human bones. She did not want to run the risk of claiming for
the burial record for Block No. 194 of Manila North Cemetery (see the wrong set of bones. She was even offered another lot but was never
Exh. 2) in which subject Lot No. 159 is situated does not reflect the appeased. She was too aggrieved that she came to court for relief even
term of duration of the lease thereover in favor of the Sto. Domingos. before she could formally present her claims and demands to the city
government and to the other defendants named in the present
"Believing in good faith that, in accordance with Administrative Order complaint." (Decision, Court of Appeals, pp. 2-3; Rollo, pp. 34-55)
No. 5, Series of 1975, dated March 6, 1975, of the City Mayor of
Manila (See Exh. 1) prescribing uniform procedure and guidelines in The trial court, on August 4, 1981, rendered its Decision, the
the processing of documents pertaining to and for the use and dispositive portion of which states:jgc:chanrobles.com.ph
disposition of burial lots and plots within the North Cemetery, etc.,
subject Lot No. 159 of Block 194 in which the mortal remains of the "WHEREFORE, judgment is hereby rendered, ordering the defendants
late Vivencio Sto. Domingo were laid to rest, was leased to the to give plaintiffs the right to make use of another single lot within the
bereaved family for five (5) years only, subject lot was certified on North Cemetery for a period of forty-three (43) years four (4) months
January 25, 1978 as ready for exhumation. and eleven (11) days, corresponding to the unexpired term of the fully
paid lease sued upon; and to search without let up and with the use of
"On the basis of such certification, the authorities of the North all means humanly possible, for the remains of the late Vivencio Sto.
Cemetery then headed by defendant Joseph Helmuth authorized the Domingo, Sr. and thereafter, to bury the same in the substitute lot to be
exhumation and removal from subject burial lot the remains of the late chosen by the plaintiffs pursuant to this decision.chanrobles law
Vivencio Sto. Domingo, Sr., placed the bones and skull in a bag or library : red
sack and kept the same in the depository or bodega of the cemetery.
Subsequently, the same lot in question was rented out to another lessee "For want of merit, defendant’s counterclaim is DISMISSED.
so that when the plaintiffs herein went to said lot on All Souls Day in
their shock, consternation and dismay, that the resting place of their "No pronouncement as to costs.
dear departed did not anymore bear the stone marker which they
lovingly placed on the tomb. Indignant and disgusted over such a "SO ORDERED." (Rollo, p. 31).
sorrowful finding, Irene Sto. Domingo lost no time in inquiring from
the officer-in-charge of the North Cemetery, defendant Sergio Mallari, The decision was appealed to the Court of Appeals which on May 31,
and was told that the remains of her late husband had been taken from 1984 rendered a decision (Rollo, pp. 33-40) modifying the decision
the burial lot in question which was given to another lessee. appealed from, the dispositive portion of which
reads:jgc:chanrobles.com.ph
"Irene Sto. Domingo was also informed that she can look for the bones
of her deceased husband in the warehouse of the cemetery where the "WHEREFORE, PREMISES CONSIDERED, the decision appealed
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from is hereby REVERSED (is hereby modified) and another one is
hereby entered:jgc:chanrobles.com.ph
THE HONORABLE INTERMEDIATE APPELLATE COURT
"1. Requiring in full force the defendants to look in earnest for the ERRED IN AWARDING DAMAGES AGAINST THE
bones and skull of the late Vivencio Sto. Domingo, Sr., and to bury the PETITIONERS HEREIN, NOTWITHSTANDING THEIR GOOD
same in the substitute lot adjudged in favor of plaintiffs hereunder; FAITH AND THEIR LACK OF KNOWLEDGE OR CONSENT TO
THE REMOVAL OF THE SKELETAL REMAINS OF THE LATE
"2. Ordering defendants to pay plaintiffs-appellants jointly and VIVENCIO STO. DOMINGO, SR. FROM THE SUBJECT BURIAL
severally P10,000.00 for breach of contract; LOT.

"3. Ordering defendants to pay plaintiffs-appellants, jointly and II

severally, P20,000.00 for moral damages;

"4. Ordering defendants to pay plaintiffs-appellants jointly and THE HON. INTERMEDIATE APPELLATE COURT ERRED IN
severally, P20,000.00 for exemplary damages; HOLDING PETITIONERS HEREIN RESPONSIBLE FOR THE
ALLEGED TORTS OF THEIR SUBORDINATE OFFICIALS AND
"5. Ordering defendants to pay plaintiffs-appellants, jointly and EMPLOYEES, INSPITE OF THE PROVISIONS OF SECTION 4 OF
severally, P10,000.00 as and for attorney’s fees; THE REPUBLIC ACT NO. 409 (REVISED CHARTER OF
MANILA) AND OTHER APPLICABLE JURISPRUDENCE ON
"6. Ordering defendants, to pay plaintiffs-appellants, jointly and THE SUBJECT EXEMPTING THE PETITIONERS FROM
severally, on the foregoing amounts legal rate of interest computed DAMAGES FROM THE MALFEASANCE OR MISFEASANCE OF
from filing hereof until fully paid; and THEIR OFFICIALS AND EMPLOYEES, IF THERE BE ANY IN
THIS CASE.
"7. Ordering defendants, to pay plaintiffs-appellants, jointly and
severally, the cost of suit. (Brief for Petitioners, Rollo, pp. 93-94)

"SO ORDERED." (Rollo, p. 40) In the resolution dated November 13, 1985 (Rollo, p. 84), the petition
was given due course.
The petitioners’ motion for reconsideration was likewise denied.
The pivotal issue of this case is whether or not the operations and
Hence, this instant petition (Rollo, pp. 7-27) filed on July 27, 1985. functions of a public cemetery are a governmental, or a corporate or
proprietary function of the City of Manila. The resolution of this issue
The grounds relied upon for this petition are as follows:chanrob1es is essential to the determination of the liability for damages of the
virtual 1aw library petitioner city.chanrobles.com:cralaw:red

I Petitioners alleged in their petition that the North Cemetery is

exclusively devoted for public use or purpose as stated in Sec. 316 of
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the Compilation of the Ordinances of the City of Manila. They local necessities and conveniences for its own community (Torio v.
conclude that since the City is a political subdivision in the Fontanilla, 85 SCRA 599 [1978]). In connection with the powers of a
performance of its governmental function, it is immune from tort municipal corporation, it may acquire property in its public or
liability which may be caused by its public officers and subordinate governmental capacity, and private or proprietary capacity. The New
employees. Further Section 4, Article I of the Revised Charter of Civil Code divides such properties into property for public use and
Manila exempts the city from liability for damages or injuries to patrimonial properties (Article 423), and further enumerates the
persons or property arising from the failure of the Mayor, the properties for public use as provincial roads, city streets, municipal
Municipal Board, or any other city officer, to enforce the provision of streets, the squares, fountains, public waters, promenades, and public
its charter or any other laws, or ordinance, or from negligence of said works for public service paid for by said provisions, cities or
Mayor, Municipal Board or any other officers while enforcing or municipalities, all other property is patrimonial without prejudice to
attempting to enforce said provisions. They allege that the Revised the provisions of special laws (Article 424; Province of Zamboanga
Charter of Manila being a special law cannot be defeated by the del Norte v. City of Zamboanga, Et Al., 22 SCRA 1334 [1968]).
Human Relations provisions of the Civil Code being a general law.
Thus in Torio v. Fontanilla, supra, the Court declared that with respect
Private respondents on the other hand maintain that the City of Manila to proprietary functions the settled rule is that a municipal corporation
entered into a contract of lease which involve the exercise of can be held liable to third persons ex contractu (Municipality of
proprietary functions with private respondent Irene Sto. Domingo. The Moncada v. Cajuigan, Et Al., 21 Phil. 184 (1912) or ex delicto
city and its officers therefore can be sued for any violation of the (Mendoza v. de Leon, 33 Phil. 508 (1916).chanrobles.com.ph : virtual
contract of lease. law library

Private respondents’ contention is well-taken. The Court further stressed:jgc:chanrobles.com.ph

Under Philippine laws, the City of Manila is a political body corporate "Municipal corporations are subject to be sued upon contracts and in
and as such endowed with the faculties of municipal corporations to be tort. . . .
exercised by and through its city government in conformity with law,
and in its proper corporate name. It may sue and be sued, and contract x        x       x
and be contracted with. Its powers are twofold in character-public,
governmental or political on the one hand, and corporate, private and
proprietary on the other. Governmental powers are those exercised in "The rule of law is a general one, that the superior or employer must
administering the powers of the state and promoting the public welfare answer civilly for the negligence or want of skill of its agent or servant
and they include the legislative, judicial, public and political. in the course or line of his employment, by which another, who is free
Municipal powers on the one hand are exercised for the special benefit from contributory fault, is injured. Municipal corporations under the
and advantage of the community and include those which are conditions herein stated, fall within the operation of this rule of law,
ministerial, private and corporate. In McQuillin on Municipal and are liable accordingly, to civil actions for damages when the
Corporation, the rule is stated thus: "A municipal corporation proper requisite elements of liability coexist. . . . (Emphasis supplied).
has . . . a public character as regards the state at large insofar as it is its
agent in government, and private (so called) insofar as it is to promote The Court added:jgc:chanrobles.com.ph
 CASES FULL TEXT COMPILATION
SUBJECT: PUBCORP
feelings upon discovery that the remains of their loved one were
". . . while the following are corporate or proprietary in character, viz: exhumed without their knowledge and consent, as said Court
municipal waterworks, slaughter houses, markets, stables, bathing declared:jgc:chanrobles.com.ph
establishments, wharves, ferries and fisheries. Maintenance of parks,
golf courses, cemeteries and airports among others, are also recognized "It has been fully established that the appellants, in spite or perhaps
as municipal or city activities of a proprietary character." (Dept. of because, of their lowly station in life have found great consolation in
Treasury v. City of Evansvulle, Sup. Ct. of Indiana, 60 N.E. 2nd 952, their bereavement from the loss of their family head, by visiting his
954 cited in Torio v. Fontanilla, supra) (Emphasis supplied) grave on special or even ordinary occasions, but particularly on All
Saints Day, in keeping with the deep, beautiful and Catholic Filipino
Under the foregoing considerations and in the absence of a special law, tradition of revering the memory of their dead. It would have been but
the North Cemetery is a patrimonial property of the City of Manila fair and equitable that they were notified of the intention of the city
which was created by resolution of the Municipal Board of August 27, government to transfer the skeletal remains of the late Vivencio Sto.
1903 and January 7, 1904 (Petition, Rollo pp. 20-21 Compilation of Domingo to give them an opportunity to demand the faithful
the Ordinances of the City of Manila). The administration and fulfillment of their contract, or at least to prepare and make provisions
government of the cemetery are under the City Health Officer (Ibid., for said transfer in order that they would not lose track of the remains
Sec. 3189), the order and police of the cemetery (Ibid., Sec. 319), the of their beloved dead, as what has actually happened on this case. We
opening of graves, inches, or tombs, the exhuming of remains, and the understand fully what the family of the deceased must have felt when
purification of the same (Ibid., Sec. 327) are under the charge and on All Saints Day of 1978, they found a new marker on the grave they
responsibility of the superintendent of the cemetery. The City of were to visit, only to be told to locate their beloved dead among
Manila furthermore prescribes the procedure and guidelines for the use thousands of skeletal remains which to them was desecration and an
and dispositions of burial lots and plots within the North Cemetery impossible task. Even the lower court recognized this when it stated in
through Administrative Order No. 5, s. 1975 (Rollo, p. 44). With the its decision thus:chanrob1es virtual 1aw library
acts of dominion, there is, therefore no doubt that the North Cemetery
is within the class of property which the City of Manila owns in its ‘All things considered, even as the Court commiserates with plaintiffs
proprietary or private character. Furthermore, there is no dispute that for the unfortunate happening complained of and untimely desecration
the burial lot was leased in favor of the private respondents. Hence, of the resting place and remains of their deceased dearly beloved, it
obligations arising from contracts have the force of law between the finds the reliefs prayed for by them lacking in legal and factual basis.
contracting parties. Thus a lease contract executed by the lessor and Under the aforementioned facts and circumstances, the most that
lessee remains as the law between them. (Henson v. Intermediate plaintiffs can ask for is the replacement of subject lot with another lot
Appellate Court, 148 SCRA 11 [1987]). Therefore, a breach of of equal size and similar location in the North Cemetery which
contractual provision entitles the other party to damages even if no substitute lot plaintiffs can make use of without paying any rental to
penalty for such breach is prescribed in the contract. (Boysaw v. the city government for a period of forty-three (43) years, four (4)
Interphil Promotions, Inc., 148 SCRA 635 [1987]).chanrobles virtual months and eleven (11) days corresponding to the unexpired portion of
lawlibrary the term of the lease sued upon as of January 25, 1978 when the
remains of the late Vivencio Sto. Domingo, Sr. were prematurely
Noteworthy are the findings of the Court of Appeals as to the removed from the disputed lot; and to require the defendants to look in
harrowing experience of private respondents and their wounded earnest for the bones and skull of the late Vivencio Sto. Domingo Sr.
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SUBJECT: PUBCORP
and to bury the same in the substitute lot adjudged in favor of plaintiffs
hereunder.’" (Decision, Intermediate Appellate Court, p. 7, Rollo, p.
39)

As regards the issue of the validity of the contract of lease of grave lot
No. 159, Block No. 195 of the North Cemetery for 50 years beginning
from June 6, 1971 to June 6, 2021 as clearly stated in the receipt duly
signed by the deputy treasurer of the City of Manila and sealed by the
city government, there is nothing in the record that justifies the
reversal of the conclusion of both the trial court and the Intermediate
Appellate Court to the effect that the receipt is in itself a contract of
lease. (Decision, Intermediate Appellate Court, p. 3, Rollo, pp. 5-
6).chanrobles.com.ph : virtual law library

Under the doctrine of respondeat superior, (Torio v. Fontanilla, supra),

petitioner City of Manila is liable for the tortious act committed by its
agents who failed to verify and check the duration of the contract of
lease. The contention of the petitioner-city that the lease is covered by
Administrative Order No. 5, series of 1975 dated March 6, 1975 of the
City of Manila for five (5) years only beginning from June 6, 1971 is
not meritorious for the said administrative order covers new leases.
When subject lot was certified on January 25, 1978 as ready for
exhumation, the lease contract for fifty (50) years was still in full force
and effect.

PREMISES CONSIDERED, the Decision of the Intermediate

Appellate Court is hereby AFFIRMED.

SO ORDERED.
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of the City Attorney (respondents). The instant petition is anchored on

Lucena's allegation that the respondents impede the execution of final
G.R. No. 202651               August 28, 2013 and executory judgments rendered by this Court in G.R. Nos.
1796623 and 1941114. G.R. Nos. 179662 and 194111 were among a
LUCENA B. RALLOS, PETITIONER, string of suits which originated from a Complaint for Forfeiture of
vs. Improvements or Payment of Fair Market Value with Moral and
CITY OF CEBU, HONORABLE MICHAEL RAMA, Exemplary Damages5 filed in 1997 by the Heirs of Fr. Rallos before
HONORABLE JOY AUGUSTUS YOUNG, HONORABLE the Regional Trial Court (RTC) of Cebu City, Branch 9, against the
SISINIO ANDALES, HONORABLE RODRIGO ABELLANOSA, City of Cebu relative to two parcels of land6 with a total area of 4,654
HONORABLE ALVIN ARCILLA, HONORABLE RAUL square meters located in Barangay Sambag I which were expropriated
ALCOSEBA, HONORABLE MA. NIDA CABRERA, in 1963 for road construction purposes.
HONORABLE ROBERTO CABARRUBIAS, HONORABLE
ALVIN DIZON, HONORABLE RONALD CUENCO, Antecedent Facts
HONORABLE LEA JAPSON, HONORABLE JOSE DALUZ III,
HONORABLE EDGARDO LABELLA, HONORABLE At the root of the controversy are Lots 485-D and 485-E of the Banilad
MARGARITA OSMEÑA, HONORABLE AUGUSTUS PE, Estate, Sambag I, Cebu City, which were expropriated to be used as a
HONORABLE RICHARD OSMEÑA, HONORABLE NOEL public road in 1963. The Heirs of Fr. Rallos alleged that the City of
WENCESLAO, HONORABLE EDUARDO RAMA, JR., Cebu occupied the lots in bad faith sans the authority of the former's
HONORABLE MICHAEL RALOTA, HONORABLE JOHN predecessors-in-interest, who were the registered owners of the subject
PHILIP ECHAVEZ-PO, ATTY. JOSEPH BERNALDEZ, ATTY. parcels of land.
JUNE MARATAS, ATTY. JERONE CASTILLO, ATTY. MARY
ANN SUSON, ATTY. LESLIE ANN REYES, ATTY. CARLO On June 11, 1997, the Heirs of Fr. Rallos filed before the RTC a
VINCENT GIMENA, ATTY. FERDINAND CAÑETE, ATTY. Complaint for Forfeiture of Improvements or Payment of Fair Market
ISMAEL GARAYGAY III, ATTY. LECEL LLAMEDO AND Value with Moral and Exemplary Damages against the City of Cebu.
ATTY. MARIE VELLE ABELLA, RESPONDENTS.
In its Answer filed on October 6, 1997, the City of Cebu contended
RESOLUTION that the subject parcels of land are road lots and are not residential in
character. They have been withdrawn from the commerce of men and
REYES, J.: were occupied by the City of Cebu without expropriation proceedings
pursuant to Ordinance No. 416 which was enacted in 1963 or more
One of the Heirs of Reverend Father Vicente Rallos (Heirs of Fr. than 35 years before the Heirs of Fr. Rallos instituted their complaint.
Rallos), Lucena B. Rallos1 (Lucena), is now before this Court with a
petition2 praying for the citation for indirect contempt of the City of
Cebu, Mayor Michael Rama (Mayor Rama), the presiding officer and
members of the Sangguniang Panlungsod, and lawyers from the Office
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On January 14, 2000, the RTC rendered a Decision, 7 which found the as computed by Atty. Fidel Kwan, the commissioner appointed by the
City of Cebu liable to pay the Heirs of Fr. Rallos just compensation in RTC.
the amount still to be determined by a board of three commissioners,
one each to be designated by the contending parties and the court. On March 21, 2002, the RTC issued a Consolidated Order11 denying
the Motion for Reconsideration filed by the City of Cebu, but
To assail the Decision rendered on January 14, 2000, the City of Cebu modifying the Decision rendered on July 24, 2001. Through the said
filed a Motion for Reconsideration, which was however denied by the order, the RTC increased the amount of just compensation payable to
RTC on February 5, 2001.8 the Heirs of Fr. Rallos from Php 7,500.00 to Php 9,500.00 per sq m.

The members of the Board of Commissioners thereafter submitted The City of Cebu filed with the RTC a Notice of Appeal, which was
their respective appraisal reports. On July 24, 2001, the RTC rendered opposed by the Heirs of Fr. Rallos.
a Decision,9 the dispositive portion of which, in part, reads:
In the Decision12 rendered on May 29, 2007, which resolved the
WHEREFORE, the [RTC] hereby renders judgment, ordering [the appeal13 filed by the City of Cebu, the CA opined that the RTC erred in
City of Cebu] to pay [the Heirs of Fr. Rallos] as just compensation for holding that the reckoning point for the determination of the amount of
Lots 485-D and 485-E the amount of Php34,905,000.00 plus interest at just compensation should be from 1997, the time the complaint for just
12% per annum to start 40 days from [the] date of this decision and to compensation was filed by the Heirs of Fr. Rallos. Notwithstanding the
continue until the whole amount shall have been fully paid. [The City foregoing, the CA still dismissed on procedural grounds the appeal
of Cebu] is further ordered to pay [the Heirs of Fr. Rallos] the filed by the City of Cebu. The CA pointed out that pursuant to
following amounts: Sections 214 and 9,15 Rule 41 and Section 1,16 Rule 50 of the Rules of
Court, a record on appeal and not a notice of appeal should have been
1. Php50,000.00 as reimbursement for attorney's fees; filed before it by the City of Cebu to assail the RTC's Decisions
rendered on January 14, 2000 and July 24, 2001 and the Orders issued
2. Php50,000.00 as reimbursement for litigation on February 5, 2001 and March 21, 2002.
expenses.10
The City of Cebu filed before this Court a Petition for Review on
The contending parties both moved for the reconsideration of the Certiorari17 to assail the Decision rendered by the CA on May 29,
Decision rendered on July 24, 2001. The City of Cebu argued that the 2007. This Court denied the same through a Minute
reckoning period for the computation of just compensation should be Resolution18 issued on December 5, 2007. The said Minute Resolution
at least not later than 1963 when the said lots were initially occupied. was recorded in the Book of Entries of Judgments on April 21, 2008.19
On the other hand, the Heirs of Fr. Rallos insisted that the amount of
just compensation payable by the City of Cebu should be increased The Heirs of Fr. Rallos thereafter filed before the RTC a Motion for
from Php 7,500.00 to Php 12,500.00 per sq m, the latter being the fair Execution relative to the Decision rendered on July 24, 2001. They
market value of the subject lots. They also prayed for the award of claimed that in 2001, the City of Cebu paid them Php 34,905,000.00,
damages in the amount of Php 16,186,520.00, which was allegedly the but there remained a balance of Php 46,546,920.00 left to be paid,
value of the loss of usage of the properties involved from 1963 to 1997 computed as of September 2, 2008. On its part, the City of Cebu
 CASES FULL TEXT COMPILATION
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admitted still owing the Heirs of Fr. Rallos but only in the amount of [T]he entire amount of Php 44,213,000.00 shall be subjected to a 12%
Php 16,893,162.08.20 interest per annum to start 40 days from the date the decision on July
24, 2001 [was rendered] until the amount of Php 34,905,000.00 was
On December 4, 2008, the RTC issued a writ of execution in favor of partially paid by the City of Cebu. After the payment by the City of
the Heirs of Fr. Rallos, which in part, reads: Cebu of a partial amount, the balance shall again be subjected to 12%
interest until the same shall have been fully paid.24
NOW, THEREFORE, you are hereby commanded to serve a copy
hereof to judgment obligor City of Cebu and demand for the The Heirs of Fr. Rallos assailed the abovementioned order on the
immediate payment of Php 44,213,000.00, less the partial payment of ground that it effectively modified the final and executory Decision
Php 34,905,000.00 plus interest at 12% per annum to start 40 days rendered on July 24, 2001. They likewise sought the application of
from date of the July 24, 2001 Decision and to continue until the Article 221225 of the New Civil Code and jurisprudence so as to entitle
whole amount has been fully paid; Php 50,000.00 as attorney's fees; them to legal interest on the interest due to them pursuant to the
and Php 50,000.00 as litigation expenses. x x x.21 Decision rendered on July 24, 2001. In the Order issued on May 20,
2009, the RTC did not favorably consider the preceding claims.
Sheriff Antonio Bellones (Sheriff Bellones) then served upon the City
of Cebu a demand letter, dated December 4, 2008, and which was A Petition for Certiorari and Mandamus26 was then filed by the Heirs
amended on January 26, 2009, indicating that: of Fr. Rallos before the CA to challenge the Orders issued by the RTC
on March 16, 2009 and May 20, 2009. The CA granted the petition
DEMAND is hereby made for the judgment obligor City of Cebu x x x after finding that the two assailed orders effectively modified the final
to facilitate the prompt payment of the following: (a) just and executory disposition made by the RTC on March 21, 2002. The
compensation of Lots 485-D and 485-E in the amount of Php CA likewise ruled that the case calls for the application of Article 2212
44,213,000.00 plus interest of 12% per annum starting 40 days from of the New Civil Code, hence, it directed the City of Cebu to pay
the July 24, 2001 Decision and to continue until the whole amount has interest at the rate of 12% per annum upon the interest due, to be
been duly paid less partial payment of Php 34,905,000.00 x x x.22 computed from the date of the filing of the complaint until full
satisfaction of the obligation. The CA stated:
The City of Cebu sought the reiteration of the directives stated in the
Writ of Execution issued on December 4, 2008 and the setting aside of Note that the final and executory consolidated decision of July 24,
the amended demand letter served upon it by Sheriff Bellones. 2001 as modified by the final and executory order of March 21, 2002,
clearly directed herein respondent Cebu City to pay interest at the rate
On March 16, 2009, the RTC issued an Order 23 denying the City of of 12% per annum based on the amount of [Php]9,500.00 per square
Cebu's motion for the reiteration of the writ of execution. The RTC, meter starting 40 days from the date of the decision and to continue
however, set aside the demand letter served upon the City of Cebu by until the entire amount shall have been fully paid. Yet, the assailed
Sheriff Bellones and interpreted the directives of the writ of execution orders x x x, now directed that the 12% interest per annum be paid on
issued on December 4, 2008 as: the declining balance contrary to the directive in the final and
executory judgment x x x.
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xxxx Meanwhile, in response to Mayor Rama's query, the Commission on
Audit's (COA) Regional Director Delfin P. Aguilar wrote the former a
x x x [The Heirs of Fr. Rallos] are without a doubt entitled to 12% letter36 dated October 27, 2011 opining that:
interest per annum on the interest due from finality until its satisfaction
x x x. The same is proper even if not expressly stated in the final and Under Administrative Circular No. 10-200037 issued by the Supreme
executory judgment x x x.27 Court, it was clearly stated that the prosecution, enforcement or
satisfaction of state liability must be pursued in accordance with the
The City of Cebu assailed the Decision in CA-G.R. SP No. 04418 by rules and procedures laid down in Presidential Decree No. 1445,
way of a Petition for Review on Certiorari 28 filed before this Court. otherwise known as the Government Auditing Code of the Philippines,
The same was denied through a Minute Resolution 29 issued on wherein it is provided that all money claims against the government
December 6, 2010. The said resolution was recorded in this Court's must first be filed with the [COA]. x x x.
Book of Entries of Judgments on June 16, 2011.30
Clearly, based on the aforementioned Supreme Court issuance and in
The Heirs of Fr. Rallos then moved for execution relative to Civil Case the line with the rulings of the Supreme Court in various cases against
No. CEB-20388. The RTC granted the motion through the garnishment of public funds or property to satisfy money judgment
Order31 issued on September 23, 2011. against the government, we are of the view that the issuance of the writ
of execution for the satisfaction of the money judgment against the
The City of Cebu thereafter filed the following: (1) Urgent Omnibus City of Cebu may be considered beyond the powers of the court.
Motions to Quash the Writ of Execution, and to Set Aside the Notice
of Garnishment; (2) Supplemental Urgent Omnibus Motions to Quash On the other hand, Section 1, Rule VIII of the 2009 Revised Rules of
the Writ of Execution, and to Set Aside the Notice of Garnishment; (3) Procedure of the COA provides that a money judgment is considered
Motion for Issuance of Status Quo Order Pending Resolution of [the as a money claim which is within the original jurisdiction of the
City of Cebu's] Urgent Omnibus Motions to Quash the Writ of Commission Proper (CP) of the COA and which shall be filed directly
Execution and to Set Aside the Notice of Garnishment; 32 and (4) with the Commission Secretary x x x.38
Motion to Strike out or Expunge Urgent Omnibus Motion and
Supplemental Urgent Omnibus Motion with Manifestation and On February 27, 2012, the RTC issued another Order 39 directing under
Reservation. The RTC denied the four motions in the Order 33 issued on pain of contempt the Cebu branches of Philippine Veterans Bank and
October 26, 2011. The RTC's Order 34 issued on January 26, 2012 Postal Savings Bank to release to the concerned RTC sheriff
likewise did not favorably consider the motion for reconsideration certifications indicating the correct account names and numbers
filed by the City of Cebu. The RTC emphasized that the maintained by the City of Cebu in the said banks. The Order also
Convenio35 already existed way back in 1940, hence, it cannot be directed the Sangguniang Panlungsod to enact an appropriation
considered as a supervening event which transpired after the judgment ordinance relative to the money judgment. Upon presentment of the
in Civil Case No. CEB-20388 had become final and executory. The ordinance, the above-mentioned banks were expected to release the
City of Cebu no longer filed any motion or action to assail the RTC amounts stated therein to satisfy the judgment rendered in favor of the
Orders issued on October 26, 2011 and January 26, 2012. Heirs of Fr. Rallos. The City of Cebu filed a Motion for
Reconsideration40 against the Order dated February 27, 2012.
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Even before the Motion for Reconsideration to the Order dated towards preventing the execution of final and executory judgments
February 27, 2012 can be resolved by the RTC, the City of Cebu filed rendered by this Court in G.R. Nos. 179662 and 194111.
before the CA a Petition for Annulment of Final Decision/s and
Order/s with prayer for the issuance of injunctive reliefs. 41 The City of Lucena enumerates the allegedly contumacious acts of the respondents
Cebu claimed that the act of the Heirs of Fr. Rallos of suppressing the as the filing: (a) with the CA of a Petition for Annulment of Final
existence of the Convenio amounted to extrinsic fraud which would Decision/s and Order/s48 again on the basis of the Convenio, which
justify the annulment of the RTC's decisions and orders relative to was already presented and considered in the proceedings before the
RTC, and despite the finality of the decisions and orders rendered or
Civil Case No. CEB-20388. In praying for the issuance of injunctive issued relative to Civil Case No. CEB-20388; and (b) of several
motions49 before the RTC in Civil Case No. CEB-20388 for the
reliefs, the City of Cebu stressed that it had already paid the Heirs of purpose of preventing or delaying the execution of decisions and
Fr. Rallos Php 56,196,369.42 for a 4,654 sq m property or at a price of orders which had already attained finality.
Php 12,074.85 per sq m. Further, the procedures prescribed in
Presidential Decree (P.D.) No. 1445, this Court's Administrative The respondents, on the other hand, seek the dismissal of the instant
Circular (Admin. Circular) No. 10-2000 and Rule VIII of the COA's action contending that: (a) the rules on litis pendentia and forum
Revised Rules of Procedure were not yet complied with, hence, public shopping bar this Court from giving due course to Lucena's petition
funds cannot be released notwithstanding the rendition of the decisions since there are five other contempt proceedings filed involving the
and issuance of the orders by the RTC relative to Civil Case No. CEB- same issues and parties; (b) the injunctive writs granted to the City of
20388. Cebu by the CA in CA-G-R. SP No. 06676 relative to the execution of
the decisions and orders in Civil Case No. CEB-20388 rendered the
On April 13, 2012, the CA, through a Resolution, 42 granted the City of
Cebu's application for the issuance of a temporary restraining order instant action as moot and academic; (c) the legal remedies they
(TRO) relative to CA-G.R. SP No. 06676. Subsequently, a writ of availed of were all pursued to protect public funds; (d) the RTC
preliminary injunction was likewise issued through the sheriff, in attempting to execute the decisions and orders in Civil Case
Resolution43 dated June 26, 2012. No. CEB-20388, miserably failed to comply with the requirements
provided for by law, to wit, Section 305(a)50 of the Local Government
Lucena then filed the following petitions for indirect contempt, all of Code, this Court's Admin. Circular No. 10-2000, 51 P.D. No. 1445 and
which in relation with Civil Case No. CEB-20388: Rule VIII of COA's Revised Rules of Procedure; (e) in Parel v. Heirs
of Simeon Prudencio,52 this Court declared that a writ of execution
Issue and the Contending Parties' Claims may be assailed when it varies the judgment, where there has been a
change in the situation of parties making execution unjust or
Lucena anchors the instant petition on the sole issue of whether or not inequitable, or when the judgment debt has been paid or satisfied; (f) it
the City of Cebu, Mayor Rama, the presiding officer and members of would unduly overburden the City of Cebu to pay Php 133,469,962.55
the Sangguniang Panlungsod and the lawyers from the Office of the for the subject lots the huge portions of which are now occupied by
City Attorney committed several acts of indirect contempt all geared settlers and establishments claiming to be owners, practically leaving a
very small and insignificant area for use; (g) in the case of City of
Caloocan v. Hon. Allarde,53 this Court ruled that government funds
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maintained in any official depository may not be garnished in the relative to Civil Case No. CEB-20388. She, however, claims that the
absence of a corresponding appropriation as required by law; and (h) issues in the other five petitions are different from that raised before
the Sangguniang Panlungsod cannot be compelled to pass an this Court now.
appropriations ordinance to satisfy the claims of the Heirs of Fr. Rallos
for to do otherwise would be to intrude into the exercise of a Lucena's claim cannot be sustained.
discretionary authority to decide a political question.
A comparison of the instant petition with SCA No. CEB-38292 57 filed
This Court's Disquisition before the RTC of Cebu City, Branch 14 follows:

The instant petition lacks merit. In Arevalo,60 this Court enumerated the three requisites of litis
pendentia. There is a confluence of these requisites relative to the
Lucena engaged in forum shopping. instant petition and SCA No. CEB-38292.

"Forum shopping is the act of litigants who repetitively avail Litis pendentia does not require the exact identity of parties involved
themselves of multiple judicial remedies in different fora, in the actions. Although the lawyers from the Office of the City
simultaneously or successively, all substantially founded on the same Attorney are parties herein but are not made respondents in SCA No.
transactions and the same essential facts and circumstances; and CEB-38292, they do not in any way represent any interest distinct or
raising substantially similar issues either pending in or already separate from that of the City of Cebu and the public officers involved.
resolved adversely by some other court; or for the purpose of Further, the instant petition superficially makes reference to the
increasing their chances of obtaining a favorable decision, if not in one Minute Resolutions rendered by this Court in G.R. Nos. 179662 and
court, then in another."54 194111 which Lucena claims had lapsed into finality and should thus
be executed. However, stripped of the unnecessary details, the reliefs
"Forum shopping exists when the elements of litis pendentia are saliently sought in both the instant petition and SCA No. CEB-38292
present or where a final judgment in one case will amount to res are founded on the same set of facts, to wit, the alleged non
judicata in another. Litis pendentia requires the concurrence of the compliance by the respondents with the directives contained in the
following requisites: (1) identity of parties, or at least such parties as dispositive portion of the Consolidated Order issued by the RTC on
those representing the same interests in both actions; (2) identity of March 21, 2002 relative to Civil Case No. CEB-20388. Finally,
rights asserted and reliefs prayed for, the reliefs being founded on the citation for indirect contempt in either the instant petition or SCA No.
same facts; and (3) identity with respect to the two preceding CEB-38292 would amount to res judicata in the other considering the
particulars in the two cases, such that any judgment that may be identities of the parties and issues involved.
rendered in the pending case, regardless of which party is successful,
would amount to res judicata in the other case."55 Since the elements of litis pendentia concur in the instant petition and
SCA No. CEB-38292, this Court so holds Lucena guilty of forum
In the Verification and Non-Forum Shopping Certification56 attached shopping.
to the instant petition and executed by Lucena, she admitted that there
are five other pending actions for indirect contempt which she filed
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"[T]he grave evil sought to be avoided by the rule against forum The Heirs of Fr. Rallos are bent on collecting the amount allegedly still
shopping is the rendition by two competent tribunals of two separate unpaid by the City of Cebu in accordance with the computations stated
and contradictory decisions. To avoid any confusion, this Court in the decisions and orders in Civil Case No. CEB-20388. However,
adheres strictly to the rules against forum shopping, and any violation the Heirs of Fr. Rallos are impervious to the requisites laid down by
of these rules results in the dismissal of a case."61 law in enforcing their claims. The requisites are two-fold as discussed
below.
Further, "once there is a finding of forum shopping, the penalty is
summary dismissal not only of the petition pending before this Court, An appropriation ordinance should be passed prior to the disbursement
but also of the other case that is pending in a lower court. This is so of public funds.
because twin dismissal is a punitive measure to those who trifle with
the orderly administration of justice."62 "Even though the rule as to immunity of a state from suit is relaxed,
the power of the courts ends when the judgment is rendered. Although
Even if in the higher interest of justice, this Court were to be the liability of the state has been judicially ascertained, the state is at
exceptionally liberal and gloss over Lucena's act of forum shopping, liberty to determine for itself whether to pay the judgment or not, and
the instant petition would still be susceptible to dismissal. execution cannot issue on a judgment against the state. Such statutes
do not authorize a seizure of state property to satisfy judgments
While this Court does not intend to downplay the rights accruing to the recovered, and only convey an implication that the legislature will
owners of properties expropriated by the government, it bears stressing recognize such judgment as final and make provision for the
that the exercise and enforcement of those rights are subject to satisfaction thereof."63
compliance with the requirements provided for by law to protect
public funds. Section 4(1) of P.D. No. 1445 and Section 305(a) of the Local
Government Code both categorically state that no money shall be paid
Lucena avers that the respondents willfully and maliciously defy the out of any public treasury or depository except in pursuance of an
execution of final and executory decisions and orders rendered or appropriation law or other specific statutory authority. Based on
issued relative to Civil Case No. CEB-20388. considerations of public policy, government funds and properties may
not be seized under writs of execution or garnishment to satisfy
Such averment is untenable. judgments rendered by the courts and disbursements of public funds
must be covered by the corresponding appropriation as required by
The respondents allege and Lucena does not refute, that the City of law.64
Cebu had already paid the Heirs of Fr. Rallos Php 56,196,369.42 for a
4,654 sq m property or at a price of Php 12,074.85 per sq m. The In the case at bar, no appropriation ordinance had yet been passed
controversy remains and the parties resort to all legal maneuverings relative to the claims of the Heirs of Fr. Rallos. Such being the case,
because the Heirs of Fr. Rallos obdurately insist that they are still the respondents, as public officers, are acting within lawful bounds in
entitled to collect from the City of Cebu a balance of Php refusing the execution of the decisions and orders in Civil Case No.
133,469,962.55. CEB-20388.
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Despite the rendition of a final and executory judgment validating a SO ORDERED.
money claim against an agency or instrumentality of the Government,
its filing with the COA is a sine qua non condition before payment can
be effected.

Section 26 of P.D. No. 1445 states that the COA has jurisdiction to
examine, audit and settle all debts and claims of any sort due from or
owing to the Government or any of its subdivisions, agencies and
instrumentalities. Under Section 5(b), Rule II of COA's Revised Rules
of Procedure, local government units are expressly included as among
the entities within the COA's jurisdiction. Section 2, 65 Rule VIII lays
down the procedure in filing money claims against the Government.
Section 4, Rule X provides that any case brought to the COA shall be
decided within 60 days from the date it is submitted for decision or
resolution. Section 1, Rule XII allows the aggrieved party to file a
petition for certiorari before this Court to assail any decision, order or
resolution of the COA within 30 days from receipt of a copy thereof.

This Court, in the case of University of the Philippines v. Dizon, 66 thus

held that despite the existence of a final and executory judgment
validating the claim against an agency or instrumentality of the
Government, the settlement of the said claim is still subject to the
primary jurisdiction of the COA. Ineluctably, the claimant has to first
seek the COA's approval of the monetary claim.67

Without compliance by Lucena and the Heirs of Fr. Rallos with the
provisions of P.D. No. 1445 and the COA's Revised Rules of
Procedure, their lamentations that the respondents are unjustly refusing
the execution of the decisions and orders in Civil Case No. CEB-
20388 do not hold any water.

IN VIEW OF THE FOREGOING, the instant petition is DISMISSED.

Further, on account of Lucena Rallos' act of forum shopping, the
Regional Trial Court of Cebu City, Branch 14, is likewise directed to
dismiss her petition for contempt, docketed as SCA No. CEB-38292,
which she filed against the respondents.
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Title Docket Number Date Filed Forum

Lucina C. Rallos v. Mayor Michael Rama, SCA No. CEB- October 3, 2011 RTC of Cebu City Branch 10
Eileen Mangubat and Doris Bongac44 38121

Lucina B. Rallos v. Nicanor Valles, Ricardo SCA No. CEB- October 25, 2011 RTC of Cebu City, Branch 14
Balbido, Jr., and Mayor Michael Rama45 38196

Lucina B. Rallos v. Philippine Veterans SCA No. CEB-3812 November 4, 2011 RTC of Cebu City, Branch 7
Bank, et al.

Lucina B. Rallos v. City of Cebu, Michael SCA No. CEB- December 6, 2011 RTC of Cebu City, Branch 14
Rama, et al.46 38292

Lucena B. Rallos v. Honorable Justices G.R. No. 202515 July 19, 2012 This Court
Gabriel T. Ingles, Pamela Ann Abella
Maximo and Carmelita Salandanan
Manahan47

The instant petition G.R. No. 202651 August 1, 2012 This Court
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Instant Petition SCA No. CEB-38292

Nature of Action Petition for Indirect Contempt of Court Petition for Indirect Contempt

Petitioner Lucena B. Rallos Lucina B. Rallos

Respondents City of Cebu City of Cebu

Mayor Michael Rama Mayor Michael Rama
City Councilors City Councilors
Joy Augustus Young Joy Augustus Young
Sisinio Andales Sisinio Andales
Rodrigo Abellanosa Rodrigo Abellanosa
Alvin Arcilla Alvin Arcilla
Raul Alcoseba Raul Alcoseba
Ma. Nida Cabrera Ma. Nida Cabrera
Roberto Cabarrubias Roberto Cabarrubias
Alvin Dizon Alvin Dizon
Ronald Cuenco Ronald Cuenco
Lea Japson Lea Japson
Jose Daluz III Jose Daluz III
Edgardo Labella Edgardo Labella
Margarita Osmena Margarita Osmena
Augustus Pe Augustus Pe
Richard Osmena Richard Osmena
Noel Wenceslao Noel Wenceslao
Eduardo Rama, Jr. Eduardo Rama, Jr.
Michael Ralota Michael Ralota
John Philip Echavez-Po John Philip Echavez-Po
City Attorney
Atty. Joseph Bernaldez
Atty. Jun Maratas
Atty. Jerone Castillo
Atty. Mary Ann Suson
Atty. Leslie Ann Reyes
Atty. Carlo Vincent Gimena
Atty. Ferdinand Canete
Atty. Ismael Garaygay III
Atty. Lecel Llamedo
Atty. Marie Velle Abella

Prayer Prayer Respondents be declared guilty of indirect contempt in relation to their non- Respondents, except the City of Cebu, be imprisoned until they perform the said act of complying or causing the
compliance with the directives contained in the dispositive portion of the Consolidated compliance with the specific directives contained in the dispositive portion of the final and executory Consolidated Order
Order issued on March 21, 2002 by the RTC in Civil Case No. CEB-20388.58 dated March 21, 2002.59