22 SUPREME COURT REPORTS ANNOTATED

Philippine Agila Satellite, Inc. vs. Trinidad-Lichauco

*
G.R. No. 142362. May 3, 2006.

PHILIPPINE AGILA SATELLITE, INC. and MICHAEL C.

U. DE GUZMAN, complainants, vs. JOSEFINA
TRINIDADLICHAUCO, Undersecretary for
Communications, Department of Transportation and
Communication (DOTC), respondents.

Civil Procedure; The ultimate logic behind rules of procedure

being the promotion of the objective of securing a just, speedy and
inexpensive disposition of every action and proceeding.—The
requirement to attach such relevant pleadings under Section 1,
Rule 65 is read in relation to Section 3, Rule 46, which states that
the failure of the petitioner to comply with any of the
documentary requirements, such as the attachment of such
relevant pleadings, “shall be sufficient ground for the dismissal of
the petition.” The procedural rule accords sufficient discretion to
the court hearing the special civil action whether or not to dismiss
the petition outright for failure to comply with said requirement.
If the court does dismiss the petition on that ground, the
dismissal would be justifiable under Section 3, Rule 46, and
generally such action of the court cannot be assailed as
constituting either grave abuse of discretion or reversible error of
law. If the court, on the other hand, takes cognizance of the
petition despite such lapses, the phrasing of Section 3, Rule 46
sufficiently justifies such adjudicative recourse. Indeed, the
ultimate logic behind rules of procedure being the promotion of
the objective of securing a just, speedy and inexpensive
disposition of every action and proceeding, the higher interests of
justice may at times sufficiently warrant the allowance of the
petition for certiorari despite such lapses, especially if they are
nonetheless correctible through subsequent submissions.

Constitutional Law; State Immunity from Suit; The hornbook

rule is that a suit for acts done in the performance of official
functions against an officer of the government by a private citizen
which would result in a charge against or financial liability to the
government must be regarded as a suit against the State itself
although it has not been formally impleaded; Government
immunity from suit will not

_______________

* THIRD DIVISION.

23

VOL. 489, MAY 3, 2006 23

Philippine Agila Satellite, Inc. vs. Trinidad-Lichauco

shield the public official being sued if the government no longer

has an interest to protect in the outcome of a suit or if the liability
of the officer is personal because it arises from a tortious act in the
performance of his/her duties.—The present action was
denominated against Lichauco and the unknown awardee,
Lichauco was identified in the complaint as “acting Secretary of
the [DOTC].” The hornbook rule is that a suit for acts done in the
performance of official functions against an officer of the
government by a private citizen which would result in a charge
against or financial liability to the government must be regarded
as a suit against the State itself, although it has not been formally
impleaded. However, government immunity from suit will not
shield the public official being sued if the government no longer
has an interest to protect in the outcome of a suit; or if the
liability of the officer is personal because it arises from a tortious
act in the performance of his/her duties.

PETITION for review on certiorari of a decision of the

Court of Appeals.

The facts are stated in the opinion of the Court.

          Cayetano, Sebastian, Ata, Dado & Cruz for
petitioners.
     The Solicitor General for respondent.

TINGA, J.:

This Petition1 for Review on Certiorari seeks the reversal of

the Decision dated 21 February 2000 of the Court of
Appeals in CA-G.R. No. SP 49422. The assailed Decision
authorized the dismissal of a civil complaint against
respondent Josefina Trinidad-Lichauco (Lichauco),
former Undersecretary for Communications of the
Department of Transportation and Communication
(DOTC), on the premise that the complaint constituted a
suit against the State.
A brief rundown of the relevant facts is in order.

_______________

1 Penned by Associate Justice Eugenio Labotoria, concurred in by

Associate Justices Jesus Elbinias and Marina Buzon.

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24 SUPREME COURT REPORTS ANNOTATED

Philippine Agila Satellite, Inc. vs. Trinidad-Lichauco

Petitioner Philippine Agila Satellite, Inc. (PASI) is a duly

organized corporation, whose President and Chief
Executive Officer is co-petitioner Michael C.U. De Guzman.
PASI was established by2 a consortium of private
telecommunications carriers which in 1994 had entered
into a Memorandum of Understanding (MOU) with the
DOTC, through its then Secretary Jesus Garcia, concerning
the planned launch of a Philippine-owned satellite into
outer space. Under the MOU, the launch of the satellite
was to be an endeavor of the private sector, and the
satellite itself to be owned by the Filipino-owned 3
consortium (subsequently organized as PASI). The
consortium was to grant the Philippine government one (1)
transponder free of charge for the government’s exclusive
use for non-commercial purpose, as well as the right of first
refusal to another one 4
(1) transponder in the Philippine
satellite, if available. The Philippine government, through
the DOTC, was tasked under the MOU to secure from the
International Telecommunication Union the required
orbital slot(s) and frequency assignment(s) for the
Philippine satellite.
PASI itself was organized by the consortium in 1996.
The government, together with PASI, coordinated through
the International Telecommunication Union two (2) orbital
slots, designated as 161˚ East Longitude and 153˚ East
Longitude, for Philippine satellites. On 28 June 1996,
PASI wrote then DOTC Secretary Amado S. Lagdameo,
Jr., seeking for official

_______________

2 Particularly consisting of Capitol Wireless, Inc.; Clavecilla Electronics

and Telecom Corporation; Digital Telecommunications Philippines;
Domestic Satellite Phils.; Eastern Telecommunications Philippines, Inc.;
Express Telecommunications Company; GMCR, Inc; International
Communications Corporation; Isla Communications Company, Inc.;
Liberty Broadcasting Network, Inc; Philippine Communications Satellite
Corporation; Philippine Global Communications, Inc.; Philippine Long
Distance Telephone Company; Pilipino Telephone Corporation; Radio
Communications of the Philippines, Inc.; and Smart Communications, Inc.
See Rollo, pp. 57-59.
3 Id., at p. 60.
4 Id., at p. 61.

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Philippine Agila Satellite, Inc. vs. Trinidad-Lichauco

Philippine government confirmation on the assignment of

the two aforementioned Philippine orbital slots to PASI for
its satellites,
5
which PASI had designated as the Agila
satellites. Secretary Lagdameo, Jr. replied in a letter dated
3 July 1996, confirming “the Philippine Government’s
assignment of Philippine orbital 6
slots 161E and 153E to
[PASI] for its [Agila] satellites.”
PASI avers that after having secured the confirmation
from the Philippine government, it proceeded with
preparations for the launching, operation and management
of its satellites, including the availment of loans, the
increase in its capital, negotiation with business partners,
and an initial payment of US$3.5 Million to the French
satellite manufacturer. However, respondent Lichauco,
then DOTC Undersecretary for Communications, allegedly
“embarked on a crusade to malign the name of [Michael de
Guzman] and sabotage the business of PASI.” Lichauco’s
purported efforts against PASI culminated allegedly in her
offering orbital slot 153˚ East Longitude for bidding to
other parties sometime in December 1997,7
despite the prior
assignment to PASI of the said slot. It was later claimed
by PASI that Lichauco subsequently awarded the orbital 8
slot to an entity whose indentity was unknown to PASI.
Aggrieved by Lichauco’s actions, PASI and De Guzman
instituted on 23 January 1998 a civil complaint against
Lichauco, by then the Acting Secretary of the DOTC, and
the “Unknown Awardee” who was to be the recipient of
orbital slot 153˚ East Longitude. The complaint, alleging
three (3) causes of action, was for injunction, declaration of
nullity of
_______________

5 Id., at p. 64.
6 Id., at p. 65.
7 The assignment of the other orbital slot, 161˚ East Longitude, was
previously affirmed by the DOTC to PASI and formally effected through
an Agreement on Transponder Agreement dated 16 June 1997. See Rollo,
p. 89.
8 See Id., at p. 50.

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26 SUPREME COURT REPORTS ANNOTATED

Philippine Agila Satellite, Inc. vs. Trinidad-Lichauco

award, and damages. The first cause of action, for

injunction, sought to establish that the award of orbital slot
153˚ East Longitude should be enjoined since the DOTC
had previously assigned the same orbital slot to PASI. The
second cause of action, for declaration of nullity of award,
averred that the award to the unknown bidder is null and
void, as 9 it was rendered by Lichauco beyond her
authority.
The third cause of action, for damages, imputed several
acts to Lichauco as part of her alleged “crusade” to malign
the name of plaintiff [D]e Guzman and sabotage the
business of [PASI]:

12. x x x
(a) On 4 December 1996, in a meeting with the members of the
Board of Directors of plaintiff corporation, defendant Lichauco
then uttered disparaging and defamatory comments against
plaintiff de Guzman. These defamatory remarks triggered efforts
from within the plaintiff corporation aimed at ousting plaintiff de
Guzman from his position.
(b) Defendant Lichauco, then an undersecretary of DOTC,
wrote Mr. Jesli Lapuz on 5 December 1996 (barely two days after
plaintiff de Guzman wrote him) to deny that the DOTC has
assigned the two (2) Philippine orbital slots to plaintiff
corporation. Defendant Lichauco falsely asserted that only
orbital slot 161 E was assigned to plaintiff, orbital slot 153 E was
not.
In the same letter, defendant Lichauco branded as FALSE
plaintiff de Guzman’s claim that “Agila” is a registered corporate
name of plaintiff corporation.
A copy of the letter is attached as Annex “E.”
(c) Not contented, defendant Lichauco, again for reasons
known only to her, and with malice aforethought, made
defamatory remarks against plaintiffs during a
telecommunications forum held in Makati City sometime in
October 1997 in the presence of public officials and business
executives.

_______________

9 Id., at pp. 50-51.

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Philippine Agila Satellite, Inc. vs. Trinidad-Lichauco

(d) Defendant Lichauco did not spare plaintiff corporation from

her unprovoked defamation. Defendant Lichauco arrogantly said
that she had asked President Fidel V. Ramos to sue plaintiff
Michael de Guzman. With the same degree of arrogance she
threatened plaintiff corporation not to use the name “Agila,”
otherwise she would fight plaintiff corporation and would make
sure that the name of Agila would never be given back to plaintiff
corporation.
(e) To top it all, defendant Lichauco without basis and with
evident bad faith, said that plaintiff corporation will never pay its
contractors.
(f) In December 1997, defendant Lichauco delivered the coup
de’ grace. Again, acting unilaterally, without prior notice to
plaintiff corporation and in gross violation of DOTC’s earlier
assignment to plaintiff corporation of orbital slot 153˚ E,
defendant Lichauco offered said slot to interested applicants. A
copy of the notice of offer is attached as Annex “F.”
13. Plaintiffs learned of defendant Lichauco’s acts after
orbital slot 153˚ E was offered for bidding. To plaintiff
coproration’s knowledge, the orbital slot was eventually awarded
to defendant Unknown 10
Awardee.
x     x     x     x”

The complaint alleged that since Lichauco’s act of offering

and awarding orbital slot 153˚ East Longitude was patently
illegal and violative of DOTC’s prior commitment to PASI,
Lichauco should be enjoined from performing any acts
and entering into or executing any agreement or
arrangement of whatever nature in connection with the
said orbital slot. The complaint also averred that the
purported award of the orbital slot to the “Unknown
Awardee” was illegal, and thus should be declared null and
void. Finally, the complaint alleged a cause of action for
damages against Lichauco, cast in the following manner:
x     x     x     x

_______________

10 Rollo, pp. 49-50.

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28 SUPREME COURT REPORTS ANNOTATED

Philippine Agila Satellite, Inc. vs. Trinidad-Lichauco

21. Defendant Lichauco attacked the good name and

reputation of plaintiffs.
22. She willfully caused damage to plaintiffs by orchestrating
the above-described acts which are contrary to law; morals
and basic norms of good faith.
23. She interefered with and violated plaintiff corporation’s
contract with DOTC by offering and awarding orbital slot
153˚ E to defendant Unknown Awardee.
24. Because of defendant Lichauco’s reprehensible acts,
plaintiffs suffered actual damages of at least P10 million
each, for all of which defendant Lichauco should be held
liable to pay.
25. By reason of defendant Lichauco’s illegal and malicious
acts, plaintiff corporation’s business name and goodwill
was tarnished, for which plaintiff corporation should be
indemnified by way of moral damages in the amount of at
least P10 million.
26. For the same reasons, plaintiff de Guzman suffered and
continue to suffer extreme mental anguish, serious
anxiety, wounded feelings, moral shock and besmirched
reputation, for all of which plaintiff de Guzman should be
indemnified in the amount of at least P10 million.
27. Defendant Lichauco should also be sanctioned, as a
deterrent for public good, to pay each plaintiff exemplary
damages in the amount of at least P5 million.
28. In order to protect and enforce their rights, plaintiffs were
compelled to institute this suit, engage the services of
counsel and incur litigation expenses, for all of which
plaintiffs should be indemnified
11
in the amount of at least
P500 Thousand each.

x     x     x     x

In sum, petitioners sought the following reliefs for the

three (3) causes of action:
x     x     x     x
3. After trial of the issues, render judgment as follows:

_______________

11 Id., at pp. 51-52.

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Philippine Agila Satellite, Inc. vs. Trinidad-Lichauco

[a] On the first cause of action, making permanent the

writ of preliminary injunction;
[b] On the second cause of action, declaring the offer
and award of orbital slot 153˚ E to defendant
Unknown Awardee null and void.
[c] On the third cause of action, directing defendant
Lichauco to pay the following sums:

i. P10 million each to plaintiffs as actual damages;

ii. P10 million to plaintiff corporation as moral
damages;
iii. P10 million to plaintiff de Guzman as moral
damages;
iv. P5 million each to plaintiffs as exemplary damages;
v. P500 Thousand each to plaintiffs as attorney’s fees
and litigation expenses.
12
x     x     x     x

The complaint was filed before the Regional Trial Court

(RTC) of Mandaluyong City, and subsequently raffled to
Branch 214. On 2 February 1998, the RTC issued a
temporary restraining order against Lichauco, who
received the summons together with the complaint on 28
January 1998. Lichauco failed to file an answer within
the reglementary period, but eight (8) days after the lapse
thereof, she filed a Manifestation and Motion asking for a
new five (5)-day period, or until 25 February 1998, to file a
responsive pleading to the complaint. However, she filed
instead a Motion to Admit with attached Motion to Dismiss
on 27 February 1998. She rooted her prayer for the
dismissal of the complaint primarily on the grounds that
the suit is a suit against the State which may not be sued
without its consent; that the complaint stated no cause of
action; and that the petitioners had
_______________

12 Id., at p. 53.

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30 SUPREME COURT REPORTS ANNOTATED

Philippine Agila Satellite, Inc. vs. Trinidad-Lichauco

failed to exhaust administrative remedies by failing to seek

recourse with the
13
Office of the President.
In an order dated 14 August 1998, the RTC denied the
motion to dismiss. It characterized the defense of state
immunity as “at very least a contentious issue which can
not be resolved by mere allegations in the pleadings but
which can be best threshed out in a litig[i]ous forum where
parties are accorded enormous (sic) opportunity to argue
for the ascertainment of whether the act complained of are
indeed within the parameters14 and prerogatives of the
authority exercising the same.” The RTC also noted that
the allegations in the complaint regarding the ultimate
facts sufficiently presented an ultra vires act of Lichauco,
and that she was being sued in her personal capacity. As to
the argument pertaining to the non-exhaustion of
administrative remedies, the RTC noted that the principle
is not an inflexible rule, and may be dispensed with when
its application would cause great and irreparable damage
or when it would 15
not constitute a plain, speedy and
adequate remedy.
Lichauco assailed the RTC order through a Petition for
Certiorari under Rule 65 before the Court of Appeals,
which subsequently nullified the RTC order in the Decision
now assailed before us. The Court of Appeals sustained the
contention that the complaint is a suit against the State
with the following ratiocination:

The suit is to the mind of this court a suit against the state.
The notice of offer signed by herein petitioner allegedly tainted
with bad faith was done in the exercise of and in pursuance of an
official duty. Her duties are as follows:

SEC. 10. Powers and Duties of the Undersecretary.—The Undersecretary

shall:

_______________

13 Penned by Judge Edwin D. Sorongon.

14 Rollo, p. 112.
15 Id., at p. 113.
 31

VOL. 489, MAY 3, 2006 31

Philippine Agila Satellite, Inc. vs. Trinidad-Lichauco

(1) Advise and assist the Secretary in the formulation and

implementation of department objectives and policies;
(2) Oversee all the operational activities of the department for
which he shall be responsible to the Secretary;
(3) Coordinate the programs and projects of the department
and be responsible for its economical, efficient and
effective administration:

     x x x      x x x      x x x

It is apparent from the above enumeration that the petitioner
is directly under and answerable to the DOTC Secretary. We can
therefore conclude that her official acts such as the said “notice of
offer” was with the blessing and prior approval of the DOTC
Secretary himself.
Being an official act, it is also protected by the presumption
that the same was performed in good faith and in the regular
performance of official duty.

“Acts in Line of Duty or under Color of Authority.—As a rule, a

public officer, whether judicial, quasi-judicial, or executive, is not
personally liable to one injured in consequence of an act performed
within the scope of his official authority, and in the line of his official
duty. In order that acts may be done within the scope of official authority,
it is not necessary that they be prescribed by statute, or even that they be
specifically directed or requested by a superior officer, but it is sufficient
if they are done by an officer in relation to matters committed by law to
his control or supervision, or that they have more or less connection with
such matters, or that they are governed by a lawful requirement of the
department under whose authority the officer is acting. Under this
principle, state building commissioners who, in obedience to a stature,
discharge one who has been employed to construct a state building, take
possession of the work, and place it in the hands of another contractor,
are not liable to the former contractor in damages, since in so doing they
are merely acting in the line of their duty. An officer is not personally
responsible for the necessary and unavoidable destruction of goods stored
in buildings, when such buildings were destroyed by him in the lawful
performance of a public duty imposed on him by a valid and
constitutional statute.”

32

32 SUPREME COURT REPORTS ANNOTATED

 Philippine Agila Satellite, Inc. vs. Trinidad-Lichauco

x x x      x x x      x x x
Error or Mistake in Exercise of Authority.—Where an
officer is invested with discretion and is empowered to exercise
his judgment in matters brought before him he is sometimes
called a quasi-judicial officer, and when so acting he is usually
given immunity from liability to persons who may be injured as
the result of an erroneous or mistaken decision, however,
erroneous judgment may be, provided the acts complained of are
done within the scope of the officer’s authority, and without
willfulness, malice, or corruption.” (43 Am. Jur., pp. 85-86).
16
In Sanders vs. Veridiano[ ], the Supreme Court held:

“Given the official character of the above-described letters, we

have to conclude that the petitioners were, legally speaking, being
sued as officers of the United States government. As they have
acted on behalf of that government, and within the scope of their
authority, it is that government and not the petitioners
personally, that is responsible for their acts. Assuming that the
trial can proceed and it is proved that the claimants have a right
to the payment of damages, such award will have to be satisfied
not by the petitioners in their personal capacities but by the
United States government as their principal. This will require
that government, viz.: the appropriation of the necessary amount
to cover the damages awarded, thus making the action a suit
against that government without its consent.
There should be no question by now that such complaint
cannot prosper unless the government sought to be held
ultimately liable has given its consent to be sued. So we have
ruled not only in Baer but in many other decisions where we
upheld the doctrine of state immunity as applicable not only to
our own government but also to foreign States sought to be
subjected to the jurisdiction of our courts.
x x x      x x x      x x x
The Court finds that, even under the law of public officers, the
acts of the petitioners are protected by the presumption of good
faith, which has not been overturned by the pri-

_______________

16 Cited as 162 SCRA 88.

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Philippine Agila Satellite, Inc. vs. Trinidad-Lichauco
vate respondents. Even mistakes concededly committed by such
public officers are not actionable as long as it is not shown that
they were motivated by malice or17gross negligence amounting to
bad faith. This too is well-settled.”

Preliminarily, we discuss the procedural grounds cited by

petitioners which they assert are sufficient to have caused
the dismissal of Lichauco’s petition before the Court of
Appeals. Petitioners claim that contrary to Section 1, Rule
65 of the 1997 Rules of Civil Procedure, Lichauco failed to
attach all pleadings and documents relevant to her
petition, and that those that were attached were merely
“duplicate original copies.” Lichauco counters that for the
viability of her petition for certiorari, all that she needed to
attach were her motion to dismiss, the RTC orders acting
on such motion, her motion for reconsideration of the
denial of her motion to dismiss, and petitioners’ opposition
to said motion for reconsideration. She claims that only
these motions and submission18
were relevant to the
resolution of her petition.
In her comment, Lichauco claims that she did not have
to attach the complaint to the copy of the petition she sent
to the petitioners herein, since the latter obviously
19
retained
the original copy of the complaint they filed. However, her
petition before the appellate court does not indicate that
the same complaint was included as an attachment, and
indeed, there is a curious absence of any averment on
Lichuaco’s part20that she indeed attached the said complaint
to her petition. Cer-

_______________

17 Rollo, pp. 39-42.

18 Id., at p. 214.
19 See Id., at p. 215.
20 In her Comment, the Office of the Solicitor General, in behalf of
Lichauco, states: “Respondent [Lichauco] attached the following to her
petition filed before the Court of Appeals, to wit: (a) Original copies of the
assailed orders as Annexes “A” and “B”; (b) [respondent]’s motion to
dismiss as Annex “C”; (c) Copy of [respondent]’s motion for reconsideration
as Annex “D”; and (d) [petitioner]’s oppo-

34

34 SUPREME COURT REPORTS ANNOTATED

Philippine Agila Satellite, Inc. vs. Trinidad-Lichauco
tainly, in a petition for certiorari assailing the denial of a
motion to dismiss a complaint, the very complaint itself is a
document relevant and pertinent to the special civil action.
It should be remembered that21unlike in an ordinary appeal
that is given due course, the case record is not
automatically elevated to the court exercising jurisdiction
over a special civil action for certiorari; hence there is an
even more impelling need to attach all pleadings and
documents to the special civil action, as mandated under
Section 1, Rule 65 of the 1997 Rules of Civil Procedure.
After all, how could the court a quo properly ascertain
whether or not the motion to dismiss itself should have
been granted if it did not have a copy of the complaint
sought to be dismissed itself.
Nonetheless, the requirement to attach such relevant
pleadings under Section 1, Rule 65 is read in relation to
Section 3, Rule 46, which states that the failure of the
petitioner to comply with any of the documentary
requirements, such as the attachment of such relevant
pleadings, “shall be sufficient ground for the dismissal of
the petition.” The procedural rule accords sufficient
discretion to the court hearing the special civil action
whether or not to dismiss the petition outright for failure to
comply with said requirement. If the court does dismiss the
petition on that ground, the dismissal would be justifiable
under Section 3, Rule 46, and generally such action of the
court cannot be assailed as constituting either grave abuse
of discretion or reversible error of law. If the court, on the
other hand, takes cognizance of the petition despite such
lapses, the phrasing of Section 3, Rule 46 sufficiently
justifies such adjudicative recourse. Indeed, the ultimate
logic behind rules of procedure being the promotion of the
objective of securing a just, speedy and22 inexpensive
disposition of every action and proceeding, the higher
interests of justice may at

_______________

sition to the motion for reconsideration as Annex “E.” See Id., at p. 214.
21 See Section 8, Rule 45, 1997 Rules of Civil Procedure.
22 See Section 6, Rule 1, 1997 Rules of Civil Procedure.

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Philippine Agila Satellite, Inc. vs. Trinidad-Lichauco
times sufficiently warrant the allowance of the petition for
certiorari despite such lapses, especially if they are
nonetheless correctible through subsequent submissions.
In any event, the Court is willing to overlook
Lichauco’s failure to attach the complaint in her petition
for certiorari before the Court of Appeals, an oversight
sadly ignored by the appellate court. There are weighty
issues at hand relating to the doctrine of state immunity
from suit and the requisites of a motion to dismiss.
There is a connective issue between these two aspects in
that if the State is sued without its consent, the
corresponding suit must be dismissed. At times, it would be
teasingly obvious, even from the moment of the filing of the
complaint, that the suit is one against the State. A cursory
examination of the caption of the complaint can sometimes
betray such proscribed intent, as when the suit is directly
initiated against the Republic of the Philippines, any
foreign government, or an unincorporated government
agency as the named respondents. In such cases, obviously
there is need for immediate caution, although if it is
somehow established that those respondents had given
their consent to be sued, the suit may nonetheless prosper.
The present action was denominated against Lichauco
and the unknown awardee, Lichauco was identified23in the
complaint as “acting Secretary of the [DOTC].” The
hornbook rule is that a suit for acts done in the
performance of official functions against an officer of the
government by a private citizen which would result in a
charge against or financial liability to the government must
be regarded as a suit against the 24State itself, although it
has not been formally impleaded. However, government
immunity from suit will not shield the public official being
sued if the government no longer has an

_______________

23 Rollo, p. 46.
24 See e.g., Isberto v. Raquiza, G.R. No. L-35001, 25 September 1975, 67
SCRA 116, 119 (1975).

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36 SUPREME COURT REPORTS ANNOTATED

Philippine Agila Satellite, Inc. vs. Trinidad-Lichauco

interest to protect in the outcome of a suit; or if the liability

of the officer is personal because it arises from a tortious
act in the performance of his/her duties.
 Petitioner insists that Lichauco is being sued for her
acts committed in excess of her authority, ultra vires in
nature, and tortious in character. The Court of Appeals
responded that such acts fell within Lichauco’s official
duties as DOTC Undersecretary, thus enjoying the
presumption that they were performed in good faith and in
the regular performance of official duty. This rationale is
pure sophistry and must be rejected outright.
We do not doubt the existence of the presumptions of
“good faith” or “regular performance of25 official duty,” yet
these presumptions are disputable and26 may be
contradicted and overcome by other evidence. Many civil
actions are oriented towards overcoming any number of
these presumptions, and a cause of action can certainly be
geared towards such effect. The very purpose of trial is to
allow a party to present evidence overcome the disputable
presumptions involved. Otherwise, if trial is deemed
irrelevant or unnecessary, owing to the perceived
indisputability of the presumptions, the judicial exercise
would be relegated to a mere ascertainment of what
presumptions apply in a given case, nothing more.
Consequently, the entire Rules of Court is rendered as
excess verbiage, save perhaps for the provisions laying
down the legal presumptions.
If this reasoning of the Court of Appeals were ever
adopted as a jurisprudential rule, no public officer could
ever be sued for acts executed beyond their official
functions or authority, or for tortious conduct or behavior,
since such acts would “enjoy the presumption of good faith
and in the regular performance of official duty.” Indeed,
few civil actions of any nature would ever reach the trial
stage, if a case can be adju-

_______________

25 See e.g., Section 3(m), Rule 131, Rules of Court.

26 See Section 3, Rule 131, Rules of Court.

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Philippine Agila Satellite, Inc. vs. Trinidad-Lichauco

dicated by a mere determination from the complaint or

answer as to which legal presumptions are applicable. For
example, the presumption that a person is innocent of a
wrong is a disputable presumption on the same27level as
that of the regular performance of official duty. A civil
complaint for damages necessarily alleges that the
defendant committed a wrongful act or omission that would
serve as basis for the award of damages. With the rationale
of the Court of Appeals, such complaint can be dismissed
upon a motion to dismiss solely on the ground that the
presumption is that a person is innocent of a wrong.
So obviously, the Decision of the Court of Appeals cannot
receive the imprimatur of this Court. Still, the question of
whether Lichauco may validly invoke state immunity
from suit to secure the outright dismissal of petitioners’
complaint warrants closer examination.
As earlier noted, the complaint alleges three (3) causes
of action against Lichauco: one for injunction against her
performing any act in relation to orbital slot 153˚ East
Longitude; one for declaration of nullity of award, seeking
to nullify the alleged award of orbital slot 153˚ East
Longitude; and one for damages against Lichauco herself.
Evidently, the first two causes of action stem from
Lichauco’s act of offering orbital slot 153˚ East Longitude
for bidding, through the Notice of Offer which was attached
to the complaint.
In her Motion to Dismiss, Lichauco asserts that she is
being sued for issuing the aforementioned Notice of Offer,
which fell within her official functions as DOTC
Undersecretary for Communications. She claims that it
was Secretary Lagdameo who authorized her to offer
orbital slot 153˚ East Longitude for bidding, and she thus
acted well within the scope of her authority to advise and
assist the DOTC Secretary in the formulation and
implementation of department objectives and policies.

_______________

27 See Section 3(a), Rule 131, Rules of Court.

38

38 SUPREME COURT REPORTS ANNOTATED

Philippine Agila Satellite, Inc. vs. Trinidad-Lichauco

The Notice of Offer cites Department Circular 97-01, signed

by then DOTC Secretary Arturo Enrile, as authority for it.
The Court has examined the aforementioned Department
Circular, issued on 17 October 1997, which establishes the
“Guidelines on the Procurement of Orbital Slots and
Frequency Registration of Philippine Satellites.” Therein,
the DOTC is mandated “to conduct a bidding process in
case there are competing applications for any one of the
28
 28
assigned or applied-for-orbital slots.” Further, the
Department Circular states that “the DOTC shall publish
in three newspapers of general circulation a notice of offer
for the government
29
assigned, initiated and applied for
orbital slots.”
Thus, insofar as the first two causes of action are
concerned, Lichauco may have a point when she asserts
that they were based on acts which she performed in her
capacity as DOTC Undersecretary. But does this
necessarily mean that these two causes of action may thus
be dismissed on the basis of state immunity of suit?
As stated earlier, it is when the acts done in the
performance of official functions by an officer of the
government will result in a charge against or financial
liability to the government that the complaint must be
regarded as a suit against the State itself. However, the
distinction must also be raised between where the
government official concerned performs an act in his/her
official and jurisdictional capacity and where he performs
an act that constitutes grave abuse of discretion
tantamount to lack of jurisdiction. In the latter case, the
Constitution itself assures the availability of judicial
review, and it is the official concerned who should be
impleaded as the proper party-defendant or respondent.

_______________

28 Article III, sec. 6, DOTC Department Circular No. 97-01 (17 October
1997).
29 Article III, sec. 7, Id.

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Philippine Agila Satellite, Inc. vs. Trinidad-Lichauco

On this point, our ruling

30
in J.M. Tuason & Co. v. Land
Tenure Administration is material. Petitioners therein
had filed a special civil action for prohibition to nullify
Republic Act No. 2616, or law that directed the
expropriation of the Tatalon Estate in Quezon City.
Impleaded as respondents were the officials and
government agency tasked to undertake such
expropriation. The respondents alleged that the petition for
prohibition was actually a suit against the State without
its consent. The Court, through then Associate Justice
(later Chief Justice) Enrique Fernando, debunked the
argument, ruling instead that the petition was within the
ambit of judicial review:

“[T]he power of judicial review is granted, if not expressly, at least

by clear implication from the relevant provisions of the
Constitution. This power may be exercised when the party
adversely affected by either a legislative or executive act, or a
municipal ordinance for that matter, files the appropriate suit to
test its validity. The special civil action of prohibition has been
relied upon precisely to restrain the enforcement of what is
alleged to be an unconstitutional statute. As it is a fundamental
postulate that the Constitution as the supreme law is binding on
all governmental agencies, failure to observe the limitations found
therein furnishes a sufficient ground for a declaration of nullity of
the government measure challenged. The argument then that the
government is the adverse party and that, therefore, must 31
consent to its being sued certainly is far from persuasive. x x x x”

The Court further noted that it was well-settled for the

purpose of obtaining a judicial declaration of nullity, “it is
enough if the respondents or defendants named be the
government officials who would give operation and effect 32to
official action allegedly tainted with unconstitutionality.”

_______________

30 G.R. No. L-21064, 18 February 1970, 31 SCRA 413.

31 Id., at pp. 421-422.
32 Id., at p. 422.

40

40 SUPREME COURT REPORTS ANNOTATED

Philippine Agila Satellite, Inc. vs. Trinidad-Lichauco

Unlike in J.M. Tuason, the case at bar does not seek to

nullify an unconstitutional law or measure. However, the
first two causes of action do sufficiently impute grave abuse
of discretion against Lichauco in her 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 in such instances that it
is the official concerned who should be impleaded as
defendant or respondent in the appropriate suit.
Moreover, if the suit had been directed against
Lichauco alone, and in her personal capacity, yet it
sought, as it now does, the nullification of the Notice of
Offer or the awards thereon, such remedy could not avail
even if granted. Lichauco, in her personal capacity,
cannot be directed to set aside the Notice of Offer, the
award of the bid, or to issue a new award herself. It is only
because Lichauco was sued in her official capacity as the
DOTC Undersecretary that she, or her successors in office,
could be judicially compelled to act in such fashion.
As to the first two (2) causes of action, the Court rules
that the defense of state immunity from suit do not apply
since said causes of action cannot be properly considered as
suits against the State in constitutional contemplation.
These causes of action do not seek to impose a charge or
financial liability against the State, but merely the
nullification of state action. The prayers attached to these
two causes of action are for the revocation of the Notice of
Bid and the nullification of the purported award, nothing
more. Had it been so that petitioner additionally sought
damages in relation to said causes of action, the suit would
have been considered as one against the State. Had the
petitioner impleaded the DOTC itself, an unincorporated
government agency, and not Lichauco herself, the suit
would have been considered as one against the State. But
neither circumstance obtains in this case.
Parenthetically, it may be noted that at the time of the
filing of the complaint, Lichauco herself was already the
acting
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Philippine Agila Satellite, Inc. vs. Trinidad-Lichauco

head of the DOTC, owing to the sudden death of then

Secretary Enrile a few days before. At that stage, any suit
seeking to nullify the Notice of Bid and the alleged award
to the “Unknown Bidder” should have properly
denominated Lichauco as the respondent, and not the
DOTC.
Nonetheless, as to the first two causes of action, there
was a viable ground to dismiss the complaint: the non-
exhaustion of administrative remedies. Indeed, such
ground was alleged by Lichauco in her Motion to Dismiss.
Yet the principle of non-exhaustion of administrative
remedies admits to several exceptions. In its Order denying
the motion to dismiss the complaint, the RTC adequately
dispensed with the objection, applying the established
exceptions to the rule of non-exhaustion of administrative
remedies. To wit:
“Turning to the matter pertaining to non-exhaustion of
administrative remedies, it is fundamental that this principle is
not an inflexible rule. It yields to many accepted exceptions.
(Rocamora vs. RTC-Cebu, G.R. No. 65307). As in this case, this
principle can be dispensed with when its application would cause
great and irreparable damage and when it does not provide a
plain, speedy and adequate remedy.
When the subject orbital slot 153˚ E was bidded out to other
applicants, the damage and injury plaintiffs stand to suffer was
clear, present, and substantiated that this Court was impelled to
provide urgent needed measure such as the issuance of writ of
injunction against the public defendant. Indeed, under the
circumstances then obtaining it was impractical for the plaintiffs
to first proceed to 33the administrative official concerned before
taking court action.”

A different set of principles applies to the third cause of

action, anchored as it is on alleged acts that are tortious in
character or otherwise beyond the scope of Lichauco’s
official duties. The complaint alleges that Lichauco
uttered several disparaging and defamatory remarks
against petitioners and

_______________

33 Rollo, p. 113.

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42 SUPREME COURT REPORTS ANNOTATED

Philippine Agila Satellite, Inc. vs. Trinidad-Lichauco

made false assertions against them in her letter to the

Land Bank President.
The veracity of those allegations is of course presented
at the trial to be determined on the basis of the evidence.
However, if proven, they would establish liability on the
part of Lichauco that is not shielded by the doctrine of
state immunity from suit.34The doctrine, as summarized in
Shauf v. Court of Appeals:

“While the doctrine 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. The rule is that if the judgment
against such officials will require the state itself to perform an
affirmative act to satisfy the same, such as the appropriation of
the amount needed to pay the damages awarded against them,
the suit must be regarded as against the state itself although it
has not been formally impleaded. It must be noted, however, that
the rule is not so all-encompassing as to be applicable under all
circumstances.
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.
‘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 or 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 ration-

_______________

34 G.R. No. 90314, 27 November 1990, 191 SCRA 713.

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VOL. 489, MAY 3, 2006 43

Philippine Agila Satellite, Inc. vs. Trinidad-Lichauco

ale for this ruling is that the doctrine of state immunity

35
cannot be
used as an instrument for perpetrating an injustice.”

The doctrine poses no controversy if after trial on the

merits, it is established that the public official concerned
had committed illegal or tortious acts against the plaintiff.
How does it apply in relation to a motion to dismiss on the
ground of state immunity from suit, necessarily lodged
before trial on the merits? 36
Our ruling in United States of America v. Reyes
warrants due consideration. The Court therein, through
then Associate Justice (later Chief Justice) Hilario G.
Davide, Jr., ruled that a motion to dismiss averring
immunity from suit of a State and its functionaries was
actually grounded on the specific ground for dismissal of
the lack of cause of action, for even assuming that the
defendants had committed the injurious acts complained of,
“no action may be maintained 37
thereon, because of the
principle of state immunity.” Pertinently, the Court noted
that “a motion to dismiss on the ground of failure to state a
cause of action hypothetically admits the truth of the
allegations in the complaint.”
Thus, Lichauco, in alleging in her Motion to Dismiss
that she is shielded by the State’s immunity from suit, to
hypothetically admitted the truth of the allegations in the
complaint. Such hypothetical admission has to be deemed a
concession on her part that she had performed the tortious
or damaging acts against the petitioners, which if true,
would hold her liable for damages.
Of course, Lichauco could very well raise the defense of
state immunity from suit in regard to the third cause of
action with the assertion that the acts complained of
constituting said cause of action fell within her official
functions and were not tortuous in character. Still, to
establish such assertions of

_______________

35 Id., at pp. 726-727. Citations omitted.

36 Id., at p. 206.
37 G.R. No. 79253, 1 March 1993, 219 SCRA 192.

44

44 SUPREME COURT REPORTS ANNOTATED

Philippine Agila Satellite, Inc. vs. Trinidad-Lichauco

fact, a full-blown trial on the merits would be necessary, as

would the case be if Lichauco raised the defense that she
did not commit these acts complained of. Certainly, these
defenses cannot be accorded merit before trial, factual as
they are in character.
All told, contrary to the ruling of the Court of Appeals,
we find no grave abuse of discretion on the part of the RTC
in denying Lichauco’s Motion to Dismiss.
WHEREFORE, the PETITION is GRANTED. The
Decision of the Court of Appeals dated 21 February 2000 is
SET ASIDE and the Order dated 14 August 1998 of the
Regional Trial Court of Mandaluyong City is
REINSTATED. The Regional Trial Court is ordered to try
and decide the case on the merits with deliberate dispatch.
No costs.
SO ORDERED.
      Quisumbing (Chairperson), Carpio, Carpio-Morales
and Velasco, Jr., JJ., concur.

Petition granted, judgment set aside.

Note.—Concomitant to a liberal interpretation of the

rules of procedure should be an effort on the part of the
party invoking liberality to adequately explain his failure
to abide by the rules. (Navarro vs. Metropolitan Bank &
Trust Company, 429 SCRA 439 [2004])

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45

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