LAWYERS LEAGUE FOR A BETTER PHILIPPINES vs. PRES. AQUINO G.R. NO.

73748, May 22, 1986 FACTS: President Corazon Aquino issued Proclamation No. 1 on February 25, 1986 announcing that she and Vice President Laurel were taking power. On March 25, 1986, proclamation No.3 was issued providing the basis of the Aquino government assumption of power by stating that the "new government was installed through a direct exercise of the power of the Filipino people assisted by units of the New Armed Forces of the Philippines." Petitioners alleged that the Aquino government is illegal because it was not established pursuant to the 1973 Constitution. ISSUE: Whether or not the government of Corazon Aquino is legitimate. HELD: Yes. The legitimacy of the Aquino government is not a justiciable matter but belongs to the realm of politics where only the people are the judge. The Supreme Court further held that: The people have accepted the Aquino government which is in effective control of the entire country; It is not merely a de facto government but in fact and law a de jure government; and The community of nations has recognized the legitimacy of the new government.

Bacani vs NACOCO Political Law Two-fold Function of the Government Bacani and Matoto are court stenographers assigned in the CFI of Manila. During the pendency of Civil Case No. 2293 of said court, entitled Francisco Sycip vs. NACOCO, Alikpala, counsel for NACOCO, 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 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. On January 19, 1953, the Auditor General required the plaintiffs to reimburse said amounts on the strength of a circular of the DOJ it was expressed that NACOCO, being a government entity, was exempt from the payment of the fees in question. Petitioners counter that NACOCO is not a government entity within the purview of section 16, Rule 130 of the Rules of Court. Defendants set up as a defense that the NACOCO is a government entity within the purview of section 2 of the Revised Administrative Code of 1917 and, hence, it is exempt from paying the stenographers fees under Rule 130 of the Rules of Court. ISSUE: Whether or not NACOCO is a government entity. HELD: GOCCs do not acquire that status for the simple reason that they do not come under the classification of municipal or public corporation. Take for instance the NACOCO. While it was organized with the purpose of adjusting the coconut industry to a position independent of trade preferences in the United States and of providing Facilities for the better curing of copra products and the proper utilization of coconut by-products, a function which our government has chosen to exercise to promote the coconut industry, however, it was given a corporate power separate and distinct from our government, for it was made subject to the provisions of our Corporation Law in so far as its corporate existence and the powers that it may exercise are concerned (sections 2 and 4, Commonwealth Act No. 518). It may sue and be sued in the same manner as any other private corporations, and in this sense it is an entity different from our government. ** President Wilson enumerates the constituent functions as follows: (1) The keeping of order and providing for the protection of persons and property from violence and robbery. (2) The fixing of the legal relations between man and wife and between parents and children. (3) The regulation of the holding, transmission, and interchange of property, and the determination of its liabilities for debt or for crime. (4) The determination of contract rights between individuals. (5) The definition and punishment of crime. (6) The administration of justice in civil cases.

(7) The determination of the political duties, privileges, and relations of citizens. (8) Dealings of the state with foreign powers: the preservation of the state from external danger or encroachment and the advancement of its international interests. The most important of the ministrant functions are: public works, public education, public charity, health and safety regulations, and regulations of trade and industry. The principles deter mining whether or not a government shall exercise certain of these optional functions are: (1) that a government should do for the public welfare those things which private capital would not naturally undertake and (2) that a government should do these things which by its very nature it is better equipped to administer for the public welfare than is any private individual or group of individuals.

FONTANILLA V. MALIAMAN G.R. No. L-55963, February 27, 1991 Petitioners: Spouses Jose Fontanilla and Virginia Fontanilla Respondents: Hon. Inocencio D. Maliaman and National Irrigation Administration (NIA)

FACTS On December 1, 1989, the Court rendered a decision declaring National Irrigation Administration (NIA), a government agency performing proprietary functions. Like an ordinary employer, NIA was held liable for the injuries, resulting in death, of Francisco Fontanilla, son of petitioner spouses Jose and Virginia Fontanilla, caused by the fault and/or negligence of NIAs driver employee Hugo Garcia; and NIA was ordered to pay the petitioners the amounts of P 12,000 for the death of the victim; P3,389 for hospitalization and burial expenses; P30,000 as moral damages; P8,000 as exemplary damages, and attorneys fees of 20% of the total award. The National Irrigation Administration (NIA) maintains, however, that it 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 tortuous act of its driver Garcia, who was not its special agent. For this, they have filed a motion for reconsideration on January 26, 1990. NIA believes this bases this on:

PD 552 amended some provisions of RA 3601 (the law which created the NIA) The case of Angat River Irrigation System v. Angat River Workers Union Angat Case: Although the majority opinion declares that the Angat System, like the NIA, exercised a governmental function because the nature of its powers and functions does not show that it was intended to bring to the Government any special corporate benefit or pecuniary profit, a strong dissenting opinion held that Angat River system is a government entity exercising proprietary functions. The Angat dissenting opinion: Alegre protested the announced termination of his employment. He argued that although his contract did stipulate that the same would terminate on July 17, 1976, since his services were necessary and desirable in the usual business of his employer, and his employment had lasted for five years, he had acquired the status of regular employee and could not be removed except for valid cause. The employment contract of 1971 was executed when the Labor Code of the Philippines had not yet been promulgated, which came into effect some 3 years after the perfection of the contract.

ISSUE Whether or not NIA is a government agency with a juridical personality separate and distinct from the government, thereby opening it up to the possibility that it may be held liable for the damages caused by its driver, who was not its special agent

HELD: YES Reasoning the functions of government have been classified into governmental or constituent and proprietary or ministrant. The former involves the exercise of sovereignty and considered as compulsory; the latter connotes merely the exercise of proprietary functions and thus considered as optional. 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. NIA is a government agency invested with a corporate personality separate and distinct from the government, thus is governed by the Corporation Law. Section 1 of Republic Act No. 3601 provides: Sec. 1. Name and Domicile A body corporate is hereby created which shall be known as the National Irrigation Administration. . . . which shall be organized immediately after the approval of this Act. It shall have its principal seat of business in the City of Manila and shall have representatives in all provinces, for the proper conduct of its business. (Emphasis for emphasis). Besides, Section 2, subsection b of P.D. 552 provides that: (b) To charge and collect from the beneficiaries of the water from all irrigation systems constructed by or under its administration, such fees or administration charges as may be necessary to cover the cost of operation, maintenance and insurance, and to recover the cost of construction within a reasonable period of time to the extent consistent with government policy; to recover funds or portions thereof expended for the construction and/or rehabilitation of communal irrigation systems which funds shall accrue to a special fund for irrigation development under section 2 hereof; Unpaid irrigation fees or administration charges shall be preferred liens first, upon the land benefited, and then on the crops raised thereon, which liens shall have preference over all other liens except for taxes on the land, and such preferred liens shall not be removed until all fees or administration charges are paid or the property is levied upon and sold by the National Irrigation Administration for the satisfaction thereof. . . . The same section also provides that NIA may sue and be sued in court. It has its own assets and liabilities. It also has corporate powers to be exercised by a Board of Directors. Section 2, subsection (f): . . . and to transact such business, as are directly or indirectly necessary, incidental or conducive to the attainment of the above powers and objectives, including the power to establish and maintain subsidiaries, and in general, to exercise all the powers of a corporation under the Corporation Law, insofar as they are not inconsistent with the provisions of this Act. DISPOSITION: The court concluded that the National Irrigation Administration 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. ACCORDINGLY, the Motion for Reconsideration dated January 26, 1990 is DENIED WITH FINALITY. The decision of this Court in G.R. No. 55963 and G.R. No. 61045 dated December 1, 1989 is hereby AFFIRMED. DISSENTING: PADILLA: to say that NIA has opened itself to suit is one thing; to say that it is liable for damages arising from tort committed by its employees, is still another thing. The state or a government agency performing governmental functions may be held liable for tort committed by its employees only when it acts through a special agent.

G.R. No. 86953 November 6, 1990MARINE RADIO COMMUNICATIONS ASSOCIATION OF THE PHILIPPINES, INC. (MARCAPI)vs. SEC. REYESPonente: Sarmiento, J. Topic: Self-Reliant and Independent Economic Order, Role of the Private Sector Facts

Sometime in July, 1988, the Department of Transportation and Communications unveiled anP880million project, designed to "ensure safety of lives at sea (SOLAS) through theestablishment of efficient communication facilities between coast stations and ship stations andthe improvement of safety in navigational routes at sea. It was set out to provide, among other things, ship-to- shore and shore-toship public corresponding, free of charge.

On August 1, 1988, MARCAPI, thru Atty. F. Reyes Cabigao, appealed to then Secretary RainerioReyes, arguing that the engagement of government to such business would be a threat to theentire marine radio communications industry.

On August 17, 1988, the Secretary, in his reply, denied the Atty. Cabigaos request for the reasons that unlike MARCAPI, public correspondence only ranks fourth in the order of priority of services to be offered by the Maritime Coastal Communications System Project to beimplemented by 1989 and that the confidence of the public in the competence of private firmswhen it comes to safety and monitoring has already been eroded.

On February 20, 1989, the petitioners brought the instant suit, alleging, in essence, that SecretaryRainerio Reyes had been guilty of a grave abuse of discretion.

Secretary Oscar Orbos, who replaced Sec. Reyes, informed the Court that he is adopting theaction of Secretary Reyes.

The petitioners cited the provisions of Section 20, of Article II, of the Constitution, which states that the State recognizes the indispensable role of the private sector, encourages private enterprise, and provides incentives to needed investments. Issue: W/N the DOTC acted in violation of Art. II Sec 20 of the Constitution? NO.

The duty of the State is preeminently "to serve . . . the people, and so also, to "promote a just anddynamic social order . . . through policies that provide adequate social services. . . . and animproved quality of life for all.

There can hardly be any valid argument against providing for public corresponding, free of charge. It is compatible with State aims to serve the people under the Constitution, and certainly,amid these hard times, the State can do no less.

The principle of laissez faire has long been denied validity in this jurisdiction. In 1969, the Courtpromulgated Agricultural Credit and Cooperative Financing Administration v. Confederation of Unions in Government Corporations and offices, where it was held that the government is called upon to optionally and only because it was better equipped to administer for the public welfare than in any private individual or group of individuals and that the government must undertake in its sovereign capacity if it is to meet the increasing social challenges of the times.

The Constitution does not bar, however, the Government from undertaking its own initiatives,especially in the domain of public service, and neither does it repudiate its primacy as chief economic caretaker of the nation.HeldPETITION IS DISMISSED.The Court is not of the thinking that the act complained of is equivalent to a taking without justcompensation. However, the Court held that the DOTC, by providing for free public correspondence, isnot guilty of an uncompensated taking.

Cabanas Vs Pilapil G.R. No. L-25843 July 25, 1974 FACTS: The insured, Florentino Pilapil had a child, Millian Pilapil, with a married woman, the plaintiff, Melchora Cabanas. She was ten years old at the time the complaint was filed on October 10, 1964. The defendant, Francisco Pilapil, is the brother of the deceased. The deceased insured himself and instituted as beneficiary, his child, with his brother to act as trustee during her minority. Upon his death, the proceeds were paid to him. Hence this complaint by the mother, with whom the child is living, seeking the delivery of such sum. She filed the bond required by the Civil Code. Defendant would justify his claim to the retention of the amount in question by invoking the terms of the insurance policy. Issue: WON the mother is the rightful trustee for the minor beneficiary Held: on Articles 320 and 321 of the Civil Code. The former provides: "The father, or in his absence the mother, is the legal administrator of the property pertaining to the child under parental authority. The property which the unemancipated child has acquired or may acquire with his work or industry, or by any lucrative title, belongs to the child in ownership, and in usufruct to the father or mother under whom he is under parental authority and whose company he lives. With the added circumstance that the child stays with the mother, not the uncle, without any evidence of lack of maternal care, the decision arrived at can stand the test of the strictest scrutiny. It is further fortified by the assumption, both logical and natural, that infidelity to the trust imposed by the deceased is much less in the case of a mother than in the case of an uncle