SECOND
DIVISION
|
THE DEPARTMENT OF HEALTH, SECRETARY
MANUEL M. DAYRIT, USEC. MA. MARGARITA GALON and USEC. ANTONIO M. LOPEZ, Petitioners, - versus - PHIL.
PHARMAWEALTH, INC., Respondent. |
G.R. No. 169304 Present: QUISUMBING, J., Chairperson, CARPIO,
CARPIO MORALES, TINGA, and VELASCO, JR., JJ. Promulgated: |
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D E C I S I O N
CARPIO MORALES, J.:
Assailed via petition for review are
issuances of the Court of Appeals in CA-G.R. SP No. 84457, to wit: a) Decision[1] dated
May 12, 2005 which affirmed the order issued by Judge Leoncio M. Janolo, Jr. of
the Regional Trial Court of Pasig City, Branch 264 denying petitioners’ motion
to dismiss Civil Case No. 68208; and b) Resolution[2] dated
August 9, 2005 which denied petitioners’ motion for reconsideration.
Phil. Pharmawealth, Inc. (respondent) is a domestic
corporation engaged in the business of manufacturing and supplying
pharmaceutical products to government hospitals in the
On
A.O. No. 27 was later amended by A.O.
No. 10,[4] Series
of 2000, providing for additional guidelines for accreditation of drug
suppliers aimed at ensuring that only qualified bidders can transact business
with petitioner Department of Health (DOH).
Part V of A.O. No. 10 reads, in part:
1. Drug
Manufacturer, Drug Trader and Drug Importer shall be allowed to apply for
accreditation.
2. Accreditation
shall be done by the Central Office-Department of Health.
3. A separate
accreditation is required for the drug suppliers and for their specific
products.
x x x x
12. Only
products accredited by the Committee shall be allowed to be procured by the DOH
and all other entities under its jurisdiction.[5] (Underscoring supplied)
On
Sometime in September 2000,
petitioner DOH, through petitioner Antonio M. Lopez, chairperson of the
pre-qualifications, bids and awards committee, issued an Invitation for Bids[9]
for the procurement of 1.2 million units vials of Penicillin G Benzathine
(Penicillin G Benzathine contract).
Despite the lack of response from
petitioner DOH regarding respondent’s request for inclusion of additional items
in its list of accredited products, respondent submitted its bid for the
Penicillin G Benzathine contract. When
the bids were opened on P82.24 per unit, compared to
Cathay/YSS Laboratories’ (YSS) bid of P95.00 per unit. In view, however, of the non-accreditation of
respondent’s Penicillin G Benzathine product, the contract was awarded to YSS.
Respondent thus filed a complaint[10]
for injunction, mandamus and damages with prayer for the issuance of a writ of
preliminary injunction and/or temporary restraining order with the Regional Trial Court of Pasig City praying, inter alia, that the trial court “nullify
the award of the Penicillin G Benzathine contract (IFB No. 2000-10-11 [14]) to
YSS Laboratories, Inc. and direct defendant DOH, defendant Romualdez, defendant
Galon and defendant
Lopez to declare plaintiff Pharmawealth as
the lowest complying responsible bidder for the
Benzathine contract, and that they accordingly award the same to plaintiff
company” and “adjudge defendants Romualdez, Galon and Lopez liable, jointly and
severally to plaintiff, for [the therein specified damages].”[11]
In their Comment,[12] petitioner
DOH, Secretary Alberto Romualdez, Jr. who was later succeeded by petitioner Secretary
Manuel M. Dayrit, and individual petitioners Undersecretaries Margarita Galon
and Antonio Lopez argued for the
dismissal of the complaint for lack of merit in view of the express reservation
made by petitioner DOH to accept or reject any or all bids without incurring
liability to the bidders, they positing that government agencies have such full
discretion.
Petitioners subsequently filed a Manifestation and Motion[13]
(motion to dismiss) praying for the outright dismissal of the complaint based on the doctrine of
state immunity. Additionally, they alleged
that respondent’s representative was not duly authorized by its board of
directors to file the complaint.
To petitioners’ motion to dismiss, respondent filed
its comment/opposition[14]
contending, in the main, that the doctrine of state immunity is not applicable
considering that individual petitioners are being sued both in their official
and personal capacities, hence, they, not the state, would be liable for
damages.
By Order of
Their motion for reconsideration
having been denied,[16]
petitioners filed a petition for certiorari[17]
with the Court of Appeals, before which they maintained that the suit is against
the state.
By the
assailed Decision[18]
of
Hence, the instant petition for
review which raises the sole issue of whether the Court of Appeals erred in
upholding the denial of petitioners’ motion to dismiss.
The petition fails.
The suability of a government
official depends on whether the official concerned was acting within his
official or jurisdictional capacity, and whether the acts done in the
performance of official functions will result in a charge or financial
liability against the government. In the
first case, the Constitution itself assures the availability of judicial review,[19]
and it is the official concerned who should be impleaded as the proper party.[20]
In its complaint, respondent sufficiently
imputes grave abuse of discretion against petitioners in their official
capacity. Since judicial review of acts alleged to have
been tainted with grave abuse of discretion is guaranteed by the Constitution,
it necessarily follows that it is the official concerned who should be
impleaded as defendant or respondent in an appropriate suit.[21]
Moreover, part of the reliefs prayed
for by respondent is the enjoinment of the implementation, as well as the nullification
of the award to YSS, the grant of which may not be enforced against individual petitioners
and their successors except in their official capacities as officials of the
DOH.[22]
As regards petitioner DOH, the
defense of immunity from suit will not avail despite its being an
unincorporated agency of the government, for the only causes of action directed
against it are preliminary injunction and mandamus. Under Section 1, Rule 58[23]
of the Rules of Court, preliminary injunction may be directed against a party
or a court, agency or a person.
Moreover, the defense of state immunity from suit does not apply in
causes of action which do not seek to impose a charge or financial liability
against the State.[24]
As regards individual petitioners’ suability
for damages, the following discussion on the applicability of the defense of
state immunity from suit is relevant.
The rule that a state may not be sued
without its consent, now embodied in Section 3, Article XVI of the 1987
Constitution, is one of the generally accepted principles of international law,
which we have now adopted as part of the law of the land.[25]
While the doctrine of state immunity
appears to prohibit only suits against the state without its consent, it is
also applicable to complaints filed against officials of the state for acts
allegedly performed by them in the discharge of their duties.[26] The suit is regarded as one against the state
where satisfaction of the judgment against the officials will require the state
itself to perform a positive act, such as the appropriation of the amount necessary
to pay the damages awarded against them.[27]
The rule, however, is not so
all-encompassing as to be applicable under all circumstances. Shauf
v. Court of Appeals[28]
elucidates:
It
is a different matter where the public official is made to account in his
capacity as such for acts contrary to law and injurious to the rights of
plaintiff. As was clearly set forth by
Justice Zaldivar in Director of the
Bureau of Telecommunications, et al. vs. Aligaen, etc., et al.,[29] ‘
Inasmuch as the State authorizes only
legal acts by its officers, unauthorized acts of government officials or
officers are not acts of the State, and an action against the officials or
officers by one whose rights have been invaded or violated by such acts, for
the protection of his rights, is not a suit against the State within the rule
of immunity of the State from suit. In
the same tenor, it has been said that an action at law or suit in equity
against a State officer or the director of a State department on the ground
that, while claiming to act for the State, he violates or invades the
personal and property rights of the plaintiff, under an unconstitutional act or
under an assumption of authority which he does not have, is not a suit against
the State within the constitutional provision that the State may not be
sued without its consent.’ The
rationale for this ruling is that the doctrine of state immunity cannot be used
as an instrument for perpetrating an injustice. (Emphasis and underscoring supplied)
Hence, the rule does not apply where
the public official is charged in his official capacity for acts that are unauthorized
or unlawful and injurious to the rights of others. Neither does it apply where the public
official is clearly being sued not in his official capacity but in his personal
capacity, although the acts complained of may have been committed while he
occupied a public position.[30]
In the present case, suing individual
petitioners in their personal capacities for damages in connection with their
alleged act of “illegal[ly] abus[ing]
their official positions to make sure that plaintiff Pharmawealth would not be
awarded the Benzathine contract [which act was] done in bad faith and with full
knowledge of the limits and breadth of their powers given by law”[31]
is permissible, in consonance with the foregoing principles. For an officer who exceeds the power
conferred on him by law cannot hide behind the plea of sovereign immunity and
must bear the liability personally.[32]
It bears stressing, however, that the
statements in the immediately foregoing paragraph in no way reflect a ruling on
the actual liability of petitioners to respondent. The mere allegation that a government
official is being sued in his personal capacity does not automatically remove the
same from the protection of the doctrine of state immunity. Neither, upon the other hand, does the mere
invocation of official character suffice to insulate such official from suability
and liability for an act committed without or in
excess of his or her authority.[33] These are matters of evidence which should be presented and proven at the trial.
WHEREFORE, the
petition is DENIED. The assailed Decision dated
SO ORDERED.
CONCHITA
CARPIO MORALES
Associate Justice
WE CONCUR:
LEONARDO A.
QUISUMBING
Associate
Justice
Chairperson
|
ANTONIO T. CARPIO Associate Justice |
DANTE O. TINGA Associate Justice |
PRESBITERO J. VELASCO, JR.
Associate Justice
ATTESTATION
I attest
that the conclusions in the above Decision were reached in consultation before
the case was assigned to the writer of the opinion of the Court’s Division.
LEONARDO
A. QUISUMBING
Associate
Justice
Chairperson
CERTIFICATION
Pursuant to
Article VIII, Section 13 of the Constitution, and the Division Chairperson’s
Attestation, it is hereby certified that the conclusions in the above Decision
were reached in consultation before the case was assigned to the writer of the
opinion of the Court.
REYNATO S. PUNO
Chief Justice
[1] CA rollo, pp. 186-197; penned by Associate Justice Monina Arevalo-Zenarosa and concurred in by Associate Justices Remedios A. Salazar-Fernando and Rosmari D. Carandang.
[2]
[3]
[4]
[5]
[6]
[7]
[8] Memorandum No. 125-A, s. 2000; RTC records, p. 33.
[9] CA rollo, pp. 57-67.
[10] RTC records, pp. 2-15.
[11]
[12]
[13]
[14]
[15]
[16] Through Order dated
[17] CA rollo, pp. 1-15.
[18]
[19] Section 1, Article VIII of the 1987 Constitution.
[20] See
Philippine Agila
Satellite, Inc. v. Trinidad-Lichauco, G.R. No. 142362,
[21] Philippine
Agila Satellite, Inc. v. Trinidad-Lichauco, supra.
[22] See Philippine
Agila Satellite, Inc. v. Trinidad-Lichauco, supra.
[23] Section 1. Preliminary injunction defined; classes. – A preliminary injunction is an order granted at any stage of an action or proceeding prior to the judgment or final order, requiring a party or a court, agency or a person to refrain from a particular act or acts. It may also require the performance of a particular act or acts, in which case it shall be know as a preliminary mandatory injunction.
[24] Philippine Agila Satellite, Inc. v. Trinidad-Lichauco, supra.
[25] Shauf v. Court of Appeals, G.R. No. 90314, November 27, 1990, 191 SCRA 713 cited in United States of America v. Reyes, G.R. No. 79253, March 1, 1993, 219 SCRA 192.
[26] Ibid.
[27] Shauf v. Court of Appeals, supra.
[28]
[29] G.R. No. L-31135,
[30] Lansang v. Court of Appeals, 383 Phil. 141 (2000).
[31] RTC records, p. 11.
[32] Festejo v. Fernando,
94 Phil. 504 (1954), as cited in Bernas, The
Constitution of the
[33] Sanders v. Veridiano II, supra.