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DEPARTMENT OF TRANSPORTATION & COMMUNICATIONS v. SPOUSES ABECINA

FACTS:

Respondent spouses Vicente and Maria Cleofe Abecina (respondents/spouses Abecina) are the registered owners of five parcels of land in Camarines Norte. The Department of Transportation and Communications (DOTC) awarded Digitel Telecommunications Philippines, Inc. (Digitel) a contract for the management, operation, maintenance, and development of a Regional Telecommunications Development Project (RTDP) under the National Telephone Program. The municipality of Jose Panganiban, Camarines Norte, donated a parcel of land to the DOTC for the implementation of the RDTP, which erroneously included portions of the respondent's property. Digitel constructed a telephone exchange on the property, encroaching on the respondents' properties. The respondents demanded Digitel to vacate and pay damages, but Digitel refused, claiming occupation based on their agreement with the DOTC. The respondents filed a complaint against the DOTC and Digitel for recovery of possession and damages. The DOTC claimed immunity from suit but admitted during the pre-trial conference that the respondents were the rightful owners. A Compromise Agreement was later executed between the respondents and Digitel. The RTC rendered a decision in favor of the respondents, ordering the DOTC to vacate the properties and pay damages. The DOTC appealed to the CA, which affirmed the decision but deleted the award of exemplary damages. The DOTC filed a petition for review on certiorari before the Supreme Court.

ISSUES:

  1. Whether the Department of Transportation and Communications (DOTC) is immune from suit.

  2. Whether the DOTC can be held liable for the unauthorized entry, construction, and refusal to vacate the properties.

  3. Whether the DOTC's Financial Lease Agreement with Digitel can be considered a waiver of state immunity.

RULING:

  1. The Court of Appeals (CA) upheld the Regional Trial Court's (RTC) jurisdiction over the case, ruling that the RTC has jurisdiction over cases for accion publiciana where the assessed value exceeds P20,000. The CA also denied the DOTC's claim of state immunity from suit, stating that the DOTC removed its cloak of immunity after entering into a proprietary contract with Digitel.

  2. The RTC ordered the DOTC, as a builder in bad faith, to forfeit the improvements and vacate the properties. The CA affirmed the RTC's ruling. The DOTC's unauthorized entry, construction, and refusal to vacate the properties violated the rights of the respondent spouses as lawful owners.

  3. The DOTC argued that its Financial Lease Agreement with Digitel was entered into in pursuit of its governmental functions and cannot be interpreted as a waiver of state immunity. However, the CA rejected this argument and held that the DOTC's entry into a proprietary contract removed its cloak of immunity.

PRINCIPLES:

  • Government immunity from suit cannot be used as an instrument to perpetuate an injustice on a citizen.

  • State immunity cannot be used to defeat a valid claim for compensation arising from an unlawful taking without proper expropriation proceedings.

  • A government entity may lose its immunity from suit if it enters into a proprietary contract.

  • The value of the property and the nature of the complaint (e.g. recovery of possession and damages) may affect the court's determination of the appropriate remedy (e.g. return of property or determination of just compensation).