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Sunday, March 25, 2007
SC okays raps v. health execs over ‘illegal contract’ award
MANILA -- The Supreme Court (SC) has approved the filing of a civil suit before the Pasig City Regional Trial Court against Department of Health officials over the alleged irregular awarding of medical supply contract to a private pharmaceutical firm.
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Associate Justice Conchita Carpio-Morales of the SC Second Division said the petitioners led by then-health secretary Manuel Dayrit and Undersecretaries Ma. Margarita Galon and Antonio Lopez could not rest their defense on its immunity from suit.
The High Court’s decision affirmed the ruling of the Court of Appeals (CA) that denied the DOH’s petition to dismiss the civil suit filed by Philippine Pharmawealth, Inc. questioning their award of the contract to Cathay/YSS Laboratories, another firm who vied for procuring 1.2 million unit vials of Penicillin G Benzathine.
“The defense of immunity from suit will not prevail despite its being an unincorporated agency of the government, for the only causes of action directed against it are preliminary injunction and mandamus,” the SC said.
Citing Section 1, Rule 58 of the Rules of Court, the SC said a preliminary injunction may be directed against a party or a court, agency or a person.
The High Court said 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 and that the DOH as an agency could not cite immunity from suit in this case because the case does not seek monetary gain against the state.
With regard to the individual petitioners, the SC said the doctrine of state immunity does not apply when the public official is being sued “in his official capacity for acts that are unauthorized or unlawful and injurious to the rights of others.”
The rule does not also apply when the official is charged in his personal capacity even though his questioned acts may have been committed while he occupied a public position, it said.
“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,” the SC said.
The SC also said government officials could also be charged for their acts alleged to have been tainted with grave abuse of discretion, as in this case.
It also clarified that its ruling should not be taken to mean that the DOH and its officials were already liable to Pharmawealth.
“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. These are matters of evidence which should be presented and proven at the trial,” the tribunal said.
Pharmawealth and Cathay/YSS participated in the bidding for the contract and Pharmawealth submitted the lower bid.
The contract, however, was awarded to Cathay/YSS because the DOH’s accreditation to include Penicillin G Benzathine in its list of products was not yet approved.
The approval for Pharmawealth’s request for accreditation was supposed to be issued on the same month that the invitation for bids for the contract was sent out.
This prompted Pharmawealth to file a complaint before the Pasig RTC seeking to compel the DOH to award the Penicillin G Benzathine to it and for the individual respondents to pay the company for the specified damages.
The DOH and its officers asked the court to dismiss the suit by invoking state immunity from suit and on the ground that Pharmawealth’s representative was not duly authorized by the board of directors to file the complaint.
Health officials also asserted that the agency has the discretion to accept or reject any or all bids without incurring liability to the bidders.
The Pasig RTC, however, dismissed the DOH’s motion to dismiss the complaint, prompting the DOH to elevate the matter before the CA.
The CA affirmed the lower court’s ruling. Aggrieved by the CA decision, the DOH officials brought the issue before the SC. (Sunnex)For more Philippine news, visit Sun.Star General Santos. (March 25, 2007 issue)
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