Case Digest: THE DEPARTMENT OF HEALTH et al. v. PHIL. PHARMAWEALTH, INC. 518 SCRA 240 (2007)

THE DEPARTMENT OF HEALTH et al. v. PHIL. PHARMAWEALTH, INC. 518 SCRA 240 (2007)

Defense of state immunity 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. Secretary of Health Alberto G. Romualdez, Jr. issued an Administrative Order 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). Respondent Phil. Pharmawealth, Inc. (Pharmawealth) submitted to DOH a request for the inclusion of additional items in its list of accredited drug products, including the antibiotic ―Penicillin G Benzathine. Petitioner DOH issued an Invitation for Bids for the procurement of 1.2 million units vials of Penicillin G Benzathine. Despite the lack of response from DOH regarding Pharmawealth‘s request for inclusion of additional items in its list of accredited products, the latter submitted its bid for the Penicillin G Benzathine contract and gave the lowest bid thereof. . In view, however, of the non- accreditation of respondent‘s Penicillin G Benzathine product, the contract was awarded to Cathay/YSS Laboratories‘ (YSS). Respondent Pharmawealth filed a complaint 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 praying, inter alia, that the trial court ―nullify the award of the Penicillin G Benzathine contract to YSS Laboratories, Inc. and direct petitioners DOH et al. to declare 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. Petitioners DOH et al. subsequently filed a motion to dismiss praying for the dismissal of the complaint based on the doctrine of state immunity. The trial court, however, denied the motion to dismiss. The Court of Appeals (CA) denied DOH‘s petition for review which affirmed the order issued Regional Trial Court of Pasig City denying petitioners‘ motion to dismiss the case.

ISSUE:

Whether or not the charge against the public officers acting in their official capacity will prosper.

HELD:

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 its complaint, DOH 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. 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 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.
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. In the present case, suing individual petitioners in their personal capacities for damages in connection with their alleged act of ―illegally abusing 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 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.