LOIDA Q. SHAUF AND JACOB SHAUF, PETITIONERS, VS. HON. COURT OF APPEALS, DON E. DETWILER AND ANTHONY PERSI, RESPONDENTS.

In  this petition for review
on certiorari, petitioners would have us reverse and set aside the
decision rendered by respondent Court of Appeals on August 22, 1989, in CA-G.R.
CV No. 17932, entitled “Loida Shauf and Jacob Shauf,
Plaintiffs-Appellants, versus Don Detwiler and
Anthony Persi, Defendants-Appellants,”^[1]
dismissing petitioners’ complaint for damages filed before the Regional Trial
Court, Branch LVI, Angeles City, in Civil Case No. 2783 thereof, and its
subsequent resolution denying petitioners’ motion for the reconsideration of
its aforesaid decision.

As found by respondent court,^[2]
Clark Air Base is one of the bases established and maintained by the United
States by authority of the agreement between the Philippines and the United
States concerning military bases which entered into force on March 26, 1947.

The Third Combat Support Group, a unit of Clark Air Base,
maintains a Central Civilian Personnel Office (CCPO) charged with the
responsibility for civilian personnel management and administration.  It is through its civilian personnel officer
that the base commander is responsible for direction and administration of
civilian personnel program, including advising management and operating
officials on civilian personnel matters. 
Acting for the commander, the civilian personnel officer is the
administrative official in charge of the activities of the CCPO, and the
commander relies on him to carry out all aspects of the civilian personnel
program.  The CCPO personnel program
encompasses placement and staffing, position management and classification.

The Third Combat Support Group also maintains an Education
Branch, Personnel Division, which provides an education program for military
personnel, U.S.
civilian employees, and adult dependents, assigned or attached to Clark Air
Base.  Its head, the education director,
is responsible directly to the base director of personnel for administering the
education services program for Clark Air Base. 
In this capacity, and within broad agency policies, is delegated to him
the full responsibility and authority for the technical, administrative and
management functions of the program.  As
part of his duties, the education director provides complete academic and
vocational guidance for military dependents, including counseling, testing and
test interpretation.  During the time
material to the complaint, private respondent Don Detwiler
was civilian personnel officer, while private respondent Anthony Persi was education director.^[3]

Petitioner Loida Q. Shauf,
a Filipino by origin and married to an American who is a member of the United
States Air Force, applied for the vacant position of Guidance Counselor, GS
1710-9, in the Base Education Office at Clark Air Base, for which she is
eminently qualified.  As found by the
trial court, she received a Master of Arts degree from the University
of Sto.
Tomas, Manila, in 1971 and has completed 34 semester hours in
psychology-guidance and 25 quarter hours in human behavioral science; she has
also completed all course work in human behavior and counseling psychology for
a doctoral degree; she is a civil service eligible; and, more importantly, she
had functioned as a Guidance Counselor at the Clark Air Base at the GS 1710-9
level for approximately four years at the time she applied for the same
position in 1976.^[4]

By reason of her non-selection to the position, petitioner Loida Q. Shauf filed an equal
employment opportunity complaint against private respondents, for alleged
discrimination against the former by reason of her nationality and sex.  The controversy was investigated by one
Rudolph Duncan, an appeals and grievance examiner assigned to the Office of
Civilian Personnel Operations, Appellate Division, San Antonio, Texas, U.S.A
and what follows are taken from his findings embodied in a report duly
submitted by him to the Equal Opportunity Officer on February 22, 1977.^[5]

On or about October 1976, the position of Guidance Counselor, GS
1710-9, became vacant in the Base Education Office, Clark Air Base.  A Standard Form 52 was submitted to the
Civilian Personnel Office to fill said position.  The Civilian Personnel Division took
immediate steps to fill the position by advertisement in the Clark
Air Base Daily Bulletin #205 dated October
21, 1976.  As a result of the
advertisement, one application was received by the Civilian Personnel Office
and two applications were retrieved from the applicants supply file in the
Civilian Personnel Office.  These
applications were that of Mrs. Jean Hollenshead, an
employee of the DOD Schools at Clark Air Base, Mrs. Lydia B. Gaillard, an unemployed dependent, and Mrs. Loida Q. Shauf.  All three applications were reviewed and
their experiences were considered qualifying for the advertised position.

On November 11, 1976,
the application of Loida Q. Shauf
was referred to Mr. Anthony Persi, with the applications
of Mrs. Jean Hollenshead and Mrs. Lydia Gaillard, to be considered for the position of Guidance Counsellor, GS 1710-9. 
Mr. Persi, after review of the applications,
stated that upon screening the applications he concluded that two applicants
had what he considered minimum qualifications for the position.  The two applicants were Mrs. Hollenshead and Mrs. Gaillard.  In the case of Loida
Q. Shauf, Mr. Persi felt
that her application was quite complete except for a reply to an inquiry form
attached to the application.  This
inquiry form stated that the National
Personnel Records
Center, St.
Louis, Missouri, was unable to
find an official personnel folder for Loida Q. Shauf.  Mr. Persi said that as a result of the National
Personnel Records
Center, GSA, not being able to find
any records on Loida Q. Shauf,
this raised some questions in his mind as to the validity of her work
experience.  As a result of his
reservations on Loida Q. Shauf’s
work experiences and his conclusions that the two other applications listed
minimum qualifications, Mr. Persi decided to solicit
additional names for consideration.

Subsequently in his correspondence dated November 12, 1976, Mr. Persi
returned the three applications to the Civilian Personnel Office without a
selection decision.  Mr. Persi also requested in his correspondence that the
Civilian Personnel Office initiate immediate inquiry to the Central Oversea
Rotation and Recruiting Office (CORRO) for the submission of a list of highly
qualified candidates.  He further stated
in his correspondence that the three applicants who had indicated an interest
would be considered with the CORRO input for selection.

As a result of Mr. Persi’s request, an
AF Form 1188 “Oversee Civilian Personnel Request” was submitted to
CORRO on November 12, 1976.  This request in fact asked for one Guidance Counsellor, GS 1710-9. 
The form also listed the fact that local candidates are available.  However, instead of getting a list of
candidates for consideration, Mr. Persi was informed
by CORRO, through the Civilian Personnel Office in their December 15, 1976 message that a Mr. Edward B.
Isakson from Loring AFB, Maine,
was selected for the position.  Mr. Persi stated, when informed of CORRO’s
selection, that he had heard of Mr. Isakson and, from what he had heard, Mr.
Isakson was highly qualified for the position; therefore, he wished to have the
selection stand.  This statement was
denied by Mr. Persi, Mr. Isakson was placed on the
rolls at Clark Air Base on January 24,
1977.^[6]

Said examiner, however, also stated in his findings that, by
reason of petitioner Loida Q. Shauf’s
credentials which he recited therein, she is and was at the time of the
vacancy,^[7]
highly qualified for the position of Guidance Counselor, GS 1710-9.  In connection with said complaint, a Notice
of Proposed Disposition of Discrimination Complaint, dated May 16, 1977,^[8]
was served upon petitioner Loida Q. Shauf stating that because the individual selected did not
meet the criteria of the qualification requirements, it was recommended
“that an overhire GS 1710-9 Assistant Education
Advisor position be established for a 180 day period.  x x x.  The position
should be advertised for local procurement on a best qualified basis with the
stipulation that if a vacancy occurs in a permanent GS 1710-9 position the selectee would automatically be selected to fill the
vacancy.  If a position is not vacated in
the 180 day period the temporary overhire would be
released but would be selected to fill a future vacancy if the selectee is available.”

During that time, private respondents already knew that a
permanent GS 1710-9 position would shortly be vacant, that is, the position of
Mrs. Mary Abalateo whose appointment was to expire on
August 6, 1977 and this was exactly what private respondent Detwiler
had in mind when he denied on June 27, 1977 Mrs. Abalateo’s
request for extension of March 31, 1977. 
However, private respondents deny that Col. Charles J. Corey represented
to petitioner Loida Q. Shauf
that she would be appointed to the overhire position
and to a permanent GS 1710-9 position as soon as it became vacant, which
allegedly prompted the latter to accept the proposed disposition.

Contrary to her expectations, petitioner Loida
Q. Shauf was never appointed to the position occupied
by Mrs. Abalateo whose appointment was extended
indefinitely by private respondent Detwiler.^[9]

Feeling aggrieved by what she considered a shabby treatment
accorded her, petitioner Loida Q. Shauf
wrote the U.S. Civil Service Commission questioning the qualifications of Edward
Isakson.  Thereafter, said commission
sent a communication addressed to private respondent Detwiler,^[10]
finding Edward Isakson not qualified to the position of Guidance Counselor, GS
1710-9, and requesting that action be taken to remove him from the position and
that efforts be made to place him in a position for which he qualifies.  Petitioner Loida Q.
Shauf avers that said recommendation was ignored by
private respondent Detwiler and that Isakson
continued to occupy said position of guidance counselor.

Petitioner Loida Q. Shauf
likewise wrote the Base Commander of Clark Air Base requesting a hearing on her
complaint for discrimination. 
Consequently, a hearing was held on March 29, 1978 before the U.S. Department of Air Force in
Clark Air Base.^[11]

Before the Department of Air Force could render a decision,
petitioner Loida Q. Shauf
filed a complaint for damages, dated April 27, 1978, against private
respondents Don Detwiler and Anthony Persi before the Regional Trial Court, Branch LVI at
Angeles City, docketed as Civil Case No. 2783, for the alleged discriminatory
acts of herein private respondents in maliciously denying her application for
the GS 1710-9 position.

Private respondents, as defendants in Civil Case No. 2783, filed
a motion to dismiss on the ground that as officers of the United States Armed
Forces performing official functions in accordance with the powers vested in
them under the Philippine-American Military Bases Agreement, they are immune
from suit.  The motion to dismiss was
denied by the trial court.  A motion for
reconsideration was likewise denied.

Consequently, private respondents filed an Answer reiterating the
issue of jurisdiction and alleging, inter alia,
that defendant Persi’s request to Central Oversea
Rotation and Recruiting Office (CORRO) was not for appointment of a person to
the position of Guidance Counselor, GS 1710-9, but for referrals whom defendant
Persi would consider together with local candidates
for the position; that the extension of the employment of Mrs. Abalateo was in accordance with applicable regulation and
was not related to plaintiff Loida Q. Shauf’s discrimination complaint; that the decision was a
joint decision of management and CCPO reached at a meeting on June 29, 1977 and
based on a letter of the deputy director of civilian personnel, Headquarters
Pacific Air Forces, dated June 15, 1977; and that the ruling was made known to
and amplified by the director and the deputy director of civilian personnel in
letters to petitioner Loida Q. Shauf
dated August 30, 1977 and September 19, 1977.

The parties submitted a Partial Stipulation of Facts in the court
a quo providing, in part, as follows:

a)  In October 1976, the
position of guidance counselor, GS-1710-9, at Clark Air Base was vacant;

b)  Plaintiff Loida Q. Shauf, a qualified
dependent locally available, was among those who applied for said vacant
position of guidance counselor, GS-1710-9;

c)  Plaintiff Loida Q. Shauf at the time she
filed her aforesaid application was qualified for the position of guidance counselor,
GS-1710-9;

d)  Civilian Personnel Office
accomplished and forwarded to CORRO an AF Form 1188 covering the position of
guidance counselor, GS-1710-9, applied for by plaintiff Loida
Q. Shauf;

e)  U.S. Department of
Defense Instruc­tions (DODI) No. 1400.23 under Policy and Procedures provides
that –

“Where qualified dependents of military or civilian personnel
of the Department of Defense are locally available for appointment to positions
in foreign areas which are designated for U.S. citizen occupancy and for which
recruitment outside the current work force is appropriate, appointment to the
position will be limited to such dependents unless precluded by treaties or
other agreements which provide for preferential treatment for local nationals.”

and Air Force Regulation 40-301 dated 12
May 1976 in par. 2 c(1) thereof provides that –

“c.  Selection
or Referral of Eligible Applicants From the 50 States:

(1)  CORRO makes selection, except as provided in
(3) below, for oversea positions at Grades GS?11 and below (and wage
grade equivalents) for which it has received an AF Form 1188, and for higher
grade positions if requested by the oversee activity.”^[12]

Likewise, a Supplement to Partial Stipulation of Facts was filed
by the parties on October 6, 1978,
which reads:

1.  Under date of 30
September 1978, plaintiff Loida Q. Shauf through her counsel, Quasha
Asperilla Ancheta Valmonte Peña & Marcos,
lodged an appeal before the Civil Service Commission, Appeals Review Board,
from the decision of the Secretary of the Air Force dated 1 September 1978
affirming the EEO Complaints Examiner’s Findings and Recommended Decision in
the Discrimination Complaint of Mrs. Loida Q. Shauf, No. SF 071380181 dated 3 July 1978, x x x;

2.  The aforesaid appeal has
not been decided up to now by the Civil Service Commission, Appeals Review
Board; and

3.  Plaintiff Loida Q. Shauf has not instituted
any action before any federal district court of the United
States impugning the validity of the
decision of the Secretary of the Air Force dated 1 September 1978 affirming the EEO Complaints Examiner’s
Findings and Recommended Decision in the Discrimination Complaint of Mrs. Loida Q. Shauf, No. SF 071380181
dated 3 July 1978.^[13]

Thereafter, on March 8,
1988, the trial court rendered judgment in favor of herein
petitioner Loida Q. Shauf,
the dispositive portion of which reads:

WHEREFORE, judgment is hereby rendered ordering the defendants
jointly and severally to pay the plaintiffs:

1)  The amount of $39,662.49
as actual damages or its equivalent in Philippine pesos in October 1976 as
reported by the Central Bank of the Philippines
or any authorized agency of the Government:

2)  The amount of P100,000.00
as moral and exemplary damages;

3)  Twenty (20%) percent of
$39,662.49 or its equivalent in Philippine Pesos in October 1976 as reported by
the Central Bank of the Philippines or any authorized agency of the Government,
as attorney’s fees, and;

4)  Cost(s) of suit.

SO ORDERED.^[14]

Both parties appealed from the aforecited
decision to respondent Court of Appeals.

In their appeal, plaintiffs-appellants (herein petitioners)
raised the following assignment of errors:

1.  Lower court gravely erred
in holding that the actual and exemplary damages and attorney’s fees may be
paid in Philippine Pesos based on the exchange rate prevailing during October
1976 as determined by the Central Bank;

2.  Lower court gravely erred
in limiting the amount of moral and exemplary damages recoverable by plaintiff
to P100,000.00.^[15]

On the other hand, defendants-appellants (private respondents
herein) argued that:

1.  The trial court erred in
not dismissing the complaint on the ground that defendants-appellants, as
officers/officials of the United States Armed Forces, are immune from suit for
acts done or statements made by them in the performance of their official
governmental functions in accordance with the powers possessed by them under
the Philippine-American Military Bases Agreement of 1947, as amended;

2.  The trial court erred in
not dismissing the complaint for a) non-exhaustion of administrative remedies;
and b) lack of jurisdiction of the trial court over the subject matter of the
case in view of the exclusive jurisdiction of an appropriate U.S. District
Court over an appeal from an agency decision on a complaint of discrimination
under the U.S. Federal Law on Equality of opportunity for civilian employees;

3.  The trial court erred in
holding that plaintiff-appellant Loida Q. Shauf was refused appointment as guidance counselor by the
defendants-appellants on account of her sex (female), color (brown), and
national origin (Filipino by birth) and that the trial court erred in awarding
damages to plaintiffs-appellants.^[16]

As stated at the outset, respondent Court of Appeals reversed the
decision of the trial court, dismissed herein petitioners’ complaint and denied
their motion for reconsideration.  Hence
this petition, on the basis of the following grounds:

The respondent Honorable Court of Appeals
has decided a question of substance not in accord with law and/or with
applicable decisions of this Honorable Court. 
Respondent court committed grave error in dismissing
plaintiffs-appellants’ complaint and –

(a)  in holding that private
respondents are immune from suit for discriminatory acts performed without or
in excess of, their authority as officers of the U.S. Armed Forces;

(b)  for applying the
doctrine of state immunity from suit when it is clear that the suit is not
against the U.S. Government or its Armed Forces; and

(c)  for failing to recognize
the fact that the instant action is a pure and simple case for damages based on
the discriminatory and malicious acts committed by private respondents in their
individual capacity who by force of circumstance and accident are officers of
the U.S. Armed Forces, against petitioner Loida Shauf solely on account of the latter’s sex (female), color
(brown), and national origin (Filipino).^[17]

Petitioners aver that private respondents are being sued in their
private capacity for discriminatory acts performed beyond their authority,
hence the instant action is not a suit against the United States Government
which would require its consent.

Private respondents, on the other hand, claim that in filing the
case, petitioners sought a judicial review by a Philippine court of the
official actuations of respondents as officials of a military unit of the U.S.
Air Force stationed at Clark Air Base. 
The acts complained of were done by respondents while administering the
civil service laws of the United States.  The acts sued upon being a governmental
activity of respondents, the complaint is barred by the immunity of the United
States, as a foreign sovereign, from suit without its consent and by the
immunity of the officials of the United States armed forces for acts committed
in the performance of their official functions pursuant to the grant to the
United States armed forces of rights, power and authority within the bases
under the Military Bases Agreement.  It
is further contended that the rule allowing suits against public officers and
employees for unauthorized acts, torts and criminal acts is a rule of domestic
law, not of international law.  It
applies to cases involving the relations between private suitors and their
government or state, not the relations between one government and another from
which springs the doctrine of immunity of a foreign sovereign.

I. The rule that a state may not be sued without its consent, now
expressed in Article XVI, Section 3, of the 1987 Constitution, is one of the
generally accepted principles of international law that we have adopted as part
of the law of our land under Article II, Section 2.  This latter provision merely reiterates a
policy earlier embodied in the 1935 and 1973 Constitutions and also intended to
manifest our resolve to abide by the rules of the international community.^[18]

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.^[19]
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.:^[20]
“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.”^[21]
The rationale for this ruling is that the doctrine of state immunity cannot be
used as an instrument for perpetrating an injustice.^[22]

In the case of Baer, etc. vs. Tizon,
etc., et al.,^[23]
it was ruled that:

There should be no misinterpretation of the scope of the decision
reached by this Court.  Petitioner, as
the Commander of the United States Naval Base in Olongapo,
does not possess diplomatic immunity.  He
may therefore be proceeded against in his personal capacity or when the action
taken by him cannot be imputed to the government which he represents.

Also, in Animos, et al. vs.
Philippine Veterans Affairs Office, et al.,^[24]
we held that:

“x x x it is equally well-settled that where a litigation may
have adverse consequences on the public treasury, whether in the disbursements
of funds or loss of property, the public official proceeded against not being
liable in his personal capacity, then the doctrine of non-suability may
appropriately be invoked.  It has no
application, however, where the suit against such a functionary had to be
instituted because of his failure to comply with the duty imposed by statute
appropriating public funds for the benefit of plaintiff or petitioner.  x x x.

The aforecited authorities are clear on
the matter.  They state that the doctrine
of immunity from suit will not apply and may not be invoked where the public
official is being sued in his private and personal capacity as an ordinary citizen.  The cloak of protection afforded the officers
and agents of the government is removed the moment they are sued in their
individual capacity.  This situation
usually arises where the public official acts without authority or in excess of
the powers vested in him.  It is a
well-settled principle of law that a public official may be liable in his
personal private capacity for whatever damage he may have caused by his act
done with malice and in bad faith, or beyond the scope of his authority or
jurisdiction.^[25]

The agents and officials of the United
States armed forces stationed in Clark Air
Base are no exception to this rule.  In
the case of United States of America,
et al. vs. Guinto, etc., et al. ante,^[26]
we declared:

It bears stressing at this point that the above observations do not
confer on the United States of America
blanket immunity for all acts done by it or its agents in the Philippines.  Neither may the other petitioners claim that
they are also insulated from suit in this country merely because they have
acted as agents of the United States
in the discharge of their official functions.

II. The court below, in finding that private respondents are
guilty of discriminating against petitioner Loida Q. Shauf on account of her sex, color and origin, categorically
emphasized that:

There is ample evidence to sustain plaintiffs’ complaint that
plaintiff Loida Q. Shauf
was refused appointment as Guidance Counselor
by the defendants on account of her sex, color and origin.

She is a female, brown in color and a Filipino by origin, although
married to an American who is a member of the United States Air Force.  She is qualified for the vacant position of
Guidance Counselor in the office of the education director at Clark Air Base.  She received a Master of Arts Degree from the
University of Santo Tomas, Manila, in 1971 and has completed 34 semester hours
in psychology?guidance and 25 quarter hours in human behavioral
science.  She has also completed all
course work in human behavior and counselling
psychology for a doctoral degree.  She is
a civil service eligible.  More
important, she had functioned as a Guidance Counselor at the Clark Air Base at
the GS-1710-9 level for approximately four years at the time she applied for
the same position in 1976.

In filling the vacant position of Guidance Counselor, defendant Persi did not even consider the application of plaintiff Loida Q. Shauf, but referred the
vacancy to CORRO which appointed Edward B. Isakson who was not eligible to the position.

In defending his act, defendant Persi
gave as his excuse that there was a question in his mind regarding the validity
of plaintiff Loida Q. Shauf’s
work experience because of lack of record. 
But his assertion is belied by the fact that plaintiff Loida Q. Shauf had previously
been employed as Guidance Counselor at the Clark Air Base in 1971 and this
would have come out if defendant Persi had taken the
trouble of interviewing her.  Nor can
defendant free himself from any blame for the non-appointment of plaintiff Loida Q. Shauf by claiming that
it was CORRO that appointed Edward B. Isakson. 
This would not have happened if defendant Persi
adhered to the regulation that limits the appointment to the position of
Guidance Counselor, GS-1710-9 to qualified dependents of military personnel of
the Department of Defense who are locally available like the plaintiff Loida Q. Shauf.  He should not have referred the matter to
CORRO.  Furthermore, defendant Persi should have protested the appointment of Edward B.
Isakson who was ineligible for the position. 
He, however, remained silent because he was satisfied with the
appointment.

Likewise, the acts of the defendant Detwiler
in rejecting the appointment of plaintiff Loida Q. Shauf were undoubtedly discriminatory.

Plaintiff Loida Q. Shauf
twice applied for the position of Guidance Counselor sometime in 1975 and in
October 1978.  Although she was qualified
for the position, her appointment was rejected by the defendant Detwiler.  The two
who were appointed, a certain Petrucci and Edward B.
Isakson, were ordered removed by the U.S. Civil Service Commission.  Instead of replacing Petrucci
with the plaintiff Loida Q. Shauf,
the defendant Detwiler had the position vacated by Petrucci abolished. 
And in the case of Edward Isakson, the defendant Detwiler
ignored the order of the U.S. Civil Service Commission to have him removed
according to the testimony of plaintiff Loida Q. Shauf.

In connection with her complaint against the defendants, plaintiff Loida Q. Shauf was presented a
Notice of Proposed Disposition of her Discrimination Complaint by Col. Charles
J. Corey, Vice Commander, Third Combat Support Group, Clark Air Base, which
would entitle her to a temporary appointment as Guidance Counselor with the
implied assurance that she would be appointed in a permanent capacity in the
event of a vacancy.

At the time of the issuance of said Notice, defendants knew that
there would be a vacancy in a permanent position as Guidance Counselor occupied
by Mrs. Mary Abalateo and it was understood between
Col. Corey and plaintiff Loida Q. Shauf
that this position would be reserved for her. 
Knowing this arrangement, defendant Detwiler
rejected the request for extension of services of Mrs. Mary Abalateo.  However, after plaintiff Loida
Q. Shauf consented to the terms of the Notice of
Proposed Disposition of her Discrimination Complaint, defendant Detwiler extended the services of Mrs. Mary Abalateo indefinitely. 
This act barred plaintiff Loida Q. Shauf from applying for the position of Mrs. Mary Abalateo.

To rebut the evidence of the plaintiffs,
defendants cited the findings and conclusions of Mr. Rudolph Duncan, who was
appointed to investigate plaintiff Loida Q. Shauf’s complaint for discrimination and Col. Charles J.
Corey, Vice Commander, Third Combat Support Group that defendants were not
guilty of discrimination.

It is pointed out, however, that Mr. Rudolph Duncan found plaintiff
Loida Q. Shauf to be highly
qualified for the position of Guidance Counselor at the GS-1710-9 level and that
management should have hired a local applicant. 
While Col. Corey characterized the act of defendant Persi
as sloppy and recommended that he be reprimanded.  In any event their findings and conclusions
are not binding with this Court.

To blunt the accusation of discrimination against them, defendants
maintained that the extension of the appointment of Mrs. Mary Abalateo was a joint decision of management and Central
Civilian Personnel Office, Clark Air Base. 
Nonetheless, having earlier rejected by himself the request for
extension of the services of Mrs. Mary Abalateo,
defendant Detwiler should not have concurred to such
an extension as the reversal of his stand gave added substance to the charge of
discrimination against him.

To further disprove the charge that the defendants discriminated
against plaintiff Loida Q. Shauf
for her non-appointment as Guidance Counselor on account of her being a
Filipino and a female, counsel for the defendants cited the following:  (1) that Mrs. Mary Abalateo
whose appointment was extended by the defendant Detwiler
is likewise a female and a Filipino by origin; (2) that there are Filipinos
employed in the office of the defendant Persi; and
(3) that there were two other women who applied in 1976 with the plaintiff Loida Q. Shauf for the position
of Guidance Counselor.

The contention of the defendants based on the allegations
enumerated in Nos. 1 and 2 of the preceding paragraph is without merit as there
is no evidence to show that Mrs. Mary Abalateo and
the Filipinos in the office of the defendant Persi
were appointed by the defendants. 
Moreover, faced with a choice between plaintiff Loida
Q. Shauf or Mrs. Mary Abalateo,
it was to be expected that defendant Detwiler chose
to retain Mrs. Mary Abalateo as Guidance Counselor in
retaliation for the complaint of discrimination filed against him by plaintiff Loida Q. Shauf.  Finally, as to the contention based on the
allegation in No. 3 of the preceding paragraph that there were two other women
applicants in 1976 with plaintiff Loida Q. Shauf, the record reveals that they had minimum
qualifications unlike plaintiff Loida Q. Shauf who was highly qualified.^[27]

Elementary is the rule that the conclusions and findings of fact
of the trial court are entitled to great weight on appeal and should not be
disturbed unless for strong and cogent reasons.^[28]
Absent any substantial proof, therefore, that the trial court’s decision was
grounded entirely on speculations, surmises or conjectures, the same must be
accorded full consideration and respect. 
This should be so because the trial court is, after all, in a much
better position to observe and correctly appreciate the respective parties’
evidence as they were presented.^[29]

In the case at bar, there is nothing in the record which suggests
any arbitrary, irregular or abusive conduct or motive on the part of the trial
judge in ruling that private respondents committed acts of discrimination for
which they should be held personally liable. 
His conclusion on the matter is sufficiently borne out by the evidence
on record.  We are thus constrained to
uphold his findings of fact.

Respondent Court of Appeals, in its questioned decision, states
that private respondents did, in fact, discriminate against petitioner Loida Q. Shauf.  However, it deemed such acts insufficient to
prevent an application of the doctrine of state immunity, contrary to the
findings made by the trial court.  It
reasons out that “[t]he parties involved are all American citizens (although
plaintiff is a Filipina by origin) and the appointment of personnel inside the
base is clearly a sovereign act of the United
States. 
This is an internal affair in which we cannot interfere without having
to touch some delicate constitutional issues.”^[30]
In other words, it believes that the alleged discriminatory acts are not so
grave in character as would justify the award of damages.

In view of the apparent discrepancy between the findings of fact
of respondent Court of Appeals and the trial court, we are tasked to review the
evidence in order to arrive at the correct findings based on the record.  A consideration of the evidence presented
supports our view that the court a quo was correct in holding
herein private respondents personally liable and in ordering the
indemnification of petitioner Loida Q. Shauf.  The records
are clear that even prior to the filing of the complaint in this case, there
were various reports and communications issued on the matter which, while they
make no categorical statement of the private respondents’ liability,
nevertheless admit of facts from which the intent of private respondents to
discriminate against Loida Q. Shauf
is easily discernible.  Witness the
following pertinent excerpts from the documents extant in the folder of
Plaintiff’s Exhibits:

1. Notice of Proposed Disposition of Discrimination Complaint,
dated May 16, 1977 (Exhibit
“G”).

B.  Mr. Anthony Persi was totally inept in the recruitment practices
employed in attempting to fill the GS 1710-9 Assistant Education Advisor.  He failed to follow standardized procedures as
outlined in applicable DOD regulations. 
In addition, he failed to conduct an interview of qualified personnel in
the local environment and when the qualifications of the complaintant
(sic) were questioned by Mr. Persi he did not request
a review by the CCPO nor request an interview with the complainant
(sic).  Mr. Persi
failed to follow Department of Defense Instructions Number 1400.23, under
Policy and Procedures which states – “Where qualified dependents of
military or civilian personnel of the Department of Defense are locally
available for appointment to positions in foreign areas which are designated
for US citizen occupancy and for which recruitment outside the current work
force is appropriate, appointment to the positions will be limited to such dependents
unless precluded by treaties or other agreements which provide for preferential
treatment for local nationals.” Attachment to Air Force Supplement to FPM
213.2106(b)(6) lists the positions of Guidance Counsellor,
GS 1710-9, as positions to be filled by locally available dependents.  An added point is the lack of qualifications
of the individual selected for the GS 1710-9 positions as outlined under X-118
Civil Service Handbook.  x x x^[31]

2. Letter of the Director of the U.S. Civil Service Commission,
San Francisco Region, dated October
27, 1977, addressed to Mr. Don Detwiler,
concerning Mr. Edward B. Isakson whose file was reviewed by the Commission
(Exhibit “K”).

The position of Guidance
Counsellor is one for which the Commission has
established a mandatory education requirement that may not be waived.  An individual may not be assigned to such a
position without meeting the minimum qualification
requirements.  The requirements, as given
in Handbook X-118, are completion of all academic requirements for a bachelor’s
degree from an accredited college or university and successful completion of a
teacher education program under an “approved program” or successful
completion of required kinds of courses.

On review of his record,
we find that Mr. Isakson has a bachelor’s degree but he does not show
completion of a teacher education program. 
To qualify for Guidance Counselor on the basis of coursework and
semester hour credit, he would need to have 24 semester hours in Education and
12 semester hours in a combination of Psychology and Guidance subjects directly
related to education.  We do not find
that he meets these requirements.

x x
x

We can appreciate the
fact that Mr. Isakson may be working toward meeting the Guidance Counselor
requirements.  Nonetheless, he does not
appear to meet them at this time.  We
must, therefore, request that action be taken to remove him from the position
and that efforts be made to place him in a position for which he qualifies.^[32]

3. Letter of the Staff Judge Advocate of the Department of the
Air Force addressed to Mr. Detwiler, dated January
25, 1977 (Exhibit “L”).

1.  The
attached memo from Captain John Vento of this office is forwarded for your
review and any action you deem appropriate. 
I concur with his conclusion that there is no evidence of sex or ethnic
bias in this matter.  I also concur,
however, that there were certain irregularities in the handling of this
selection.

x x
x

3.  Considering
the above, it is most unfortunate that the filling of this latest Guidance Counsellor vacancy was not handled wholly in accordance
with prescribed policies and regulations. 
This is not to suggest that Mrs. Shauf should
necessarily have been hired.  But, she
and other qualified candidates should have been given the consideration to
which they were entitled.  (At no time
now or in the past have Mrs. Shauf’s qualifications
ever been questioned.) Had that happened and management chose to select some
qualified candidate other than Mrs. Shauf, there
would be no basis for her complaint.

4.  It
is my understanding that Mrs. Shauf has filed a
formal EEO complaint.  While I am
convinced that there was no discrimination in this case, my experience with EEO
complaints teaches me that, if the Civil Service Commission finds that nonselection resulted from any kind of management
malpractice, it is prone to brand it as a “discriminatory practice.”
This usually results in a remedial order which can often be distasteful to
management.  x x
x.^[33]

The initial burden is on the plaintiff to establish a prima
facie case of discrimination. 
Once the discriminatory act is proven, the burden shifts to the
defendant to articulate some legitimate, undiscriminatory
reason for the plaintiff’s rejection.^[34]
Any such justification is wanting in the case at bar, despite the prima facie
case for petitioner Loida Q. Shauf.  Private respondents’ defense is based purely
on outright denials which are insufficient to discharge the onus probandi imposed upon them.  They equally rely on the assertion that they
are immune from suit by reason of their official functions.  As correctly pointed out by petitioners in
their Memorandum, the mere invocation by private respondents of the official
character of their duties cannot shield them from liability especially when the
same were clearly done beyond the scope of their authority, again citing the Guinto case, supra:

The other petitioners in the cases before us all aver they have
acted in the discharge of their official functions as officers or agents of the
United States.  However, this is a matter of evidence.  The charges against them may not be summarily
dismissed on their mere assertion that their acts are imputable to the United
States of America, which has not given its
consent to be sued.  In fact, the
defendants are sought to be held answerable for personal torts in which the United
States itself is not involved.  If found liable, they and they alone must
satisfy the judgment.

III.  Article XIII, Section
3, of the 1987 Constitution provides that the State shall afford full
protection to labor, local and overseas, organized and unorganized, and promote
full employment and equality of employment opportunities for all.  This is a carry-over from Article II, Section
9, of the 1973 Constitution ensuring equal work opportunities regardless of
sex, race, or creed.

Under the Constitution of the United
States, the assurance of equality in
employment and work opportunities regardless of sex, race, or creed is also
given by the equal protection clause of the Bill of Rights.  The 14th Amendment, in declaring that no
state shall deprive a person of his life, liberty, or property without due
process of law or deny to any person within its jurisdiction the equal
protection of the laws, undoubtedly intended not only that there should be no
arbitrary spoliation of property, but that equal protection and security should
be given to all under like circumstances in the enjoyment of their personal and
civil rights, and that all persons should be equally entitled to pursue their
happiness and acquire and enjoy property. 
It extends its protection to all persons without regard to race, color,
or class.  It means equality of opportunity
to all in like circumstances.^[35]

The words “life, liberty, and property” as used in
constitutions are representative terms and are intended to cover every right to
which a member of the body politic is entitled under the law.  These terms include the right of
self-defense, freedom of speech, religious and political freedom, exemption
from arbitrary arrests, the right to freely buy and sell as others may, the
right to labor, to contract, to terminate contracts, to acquire property, and
the right to all our liberties, personal, civil and political — in short, all
that makes life worth living.^[36]

There is no doubt that private respondents Persi
and Detwiler, in committing the acts complained of
have, in effect, violated the basic constitutional right of petitioner Loida Q. Shauf to earn a living
which is very much an integral aspect of the right to life.  For this, they should be held accountable.

While we recognize petitioner Loida Q. Shauf’s entitlement to an award of moral damages, we
however find no justification for the award of actual or compensatory damages,
based on her supposedly unearned income from March, 1975 up to April, 1978 in
the total amount of $39,662.49, as erroneously granted by the trial court.

Evidence that the plaintiff could have bettered her position had
it not been for the defendants’ wrongful act cannot serve as basis for an award
of damages, because it is highly speculative.^[37]
Petitioner Loida Q. Shauf’s
claim is merely premised on the possibility that had she been employed, she
would have earned said amount.  But, the
undeniable fact remains that she was never so employed.  Petitioner never acquired any vested right to
the salaries pertaining to the position of GS 1710-9 to which she was never
appointed.  Damages which are merely possible
are speculative.^[38]
In determining actual damages, the court cannot rely on speculation, conjecture
or guesswork.  Without the actual proof
of loss, the award of actual damages is erroneous.^[39]
Consequently, the award of actual damages made by the trial court should be
deleted.  Attorney’s fees, however, may
be granted and we believe that an award thereof in the sum of P20,000.00 is
reasonable under the circumstances.

IV.            Finally,
private respondents postulate that petitioner Loida
Q. Shauf failed to avail herself of her remedy under
the United States federal legislation on equality of opportunity for civilian
employees, which is allegedly exclusive of any other remedy under American law,
let alone remedies before a foreign court and under a foreign law such as the
Civil Code of the Philippines.

In a letter of the Department of the Air Force in Washington,
D.C., dated September 1, 1978 and addressed to petitioner Loida Q. Shauf,^[40]
the appeal rights of the latter from the Air Force decision were enumerated as
follows:

–  You may appeal to the Civil Service Commission
within 15 calendar days of receipt of the decision.  Your appeal should be addressed to the Civil
Service Commission, Appeals Review Board, 1990 E Street, N.W., Washington,
D.C. 20415.  The appeal and any representations in support
thereof must be submitted in duplicate.

–  In lieu of an appeal to the Commission you may
file a civil action in an appropriate U.S. District Court within 30 days of
receipt of the decision.

–  If you elect to appeal to the Commission’s
Appeals Review Board, you may file a civil action in a U.S. District Court
within 30 day of receipt of the Commission’s final decision.

–  A civil action may also be filed anytime after
180 days of the date of initial appeal to the Commission, if a final decision
has not been rendered.

As earlier noted, in a Supplement to Partial Stipulation of Facts
filed by the parties on October 6, 1978, it was manifested to the trial court
that an appeal was lodged by counsel for petitioners on September 30, 1978
before the Civil Service Commission, Appeals Review Board from the decision of
the Secretary of the Air Force in the discrimination case filed by petitioner Loida Q. Shauf, No. SF
071380181.  Said appeal has not been
decided up to now.

Furthermore, it is basic that remedial statutes are to be
construed liberally.  The term “may,”
as used in adjective rules, is only permissive and not mandatory, and we see no
reason why the so-called rules on the above procedural options communicated to
said petitioner should depart from this fundamental principle.  Petitioner Loida Q.
Shauf is not limited to these remedies, but is
entitled as a matter of plain and simple justice to choose that remedy, not
otherwise proscribed, which will best advance and protect her interests.  There is, thus, nothing to enjoin her from
seeking redress in Philippine courts which should not be ousted of jurisdiction
on the dubious and inconclusive representations of private respondents on that
score.

WHEREFORE, the challenged decision and resolution of
respondent Court of Appeals in CA-G.R. CV No. 17932 are hereby ANNULLED and SET
ASIDE.  Private respondents are hereby
ORDERED, jointly and severally, to pay petitioners the sum of P100,000.00 as
moral damages,  P20,000.00 as and for
attorney’s fees, and the costs of suit.

SO ORDERED.

Melencio-Herrera, (Chairman), Paras, Padilla, and Sarmiento, JJ., concur.

---

^[1]
Associate Justice Jose A.R. Melo, ponente,
with Justices Alfredo L. Benipayo and Abelardo M. Dayrit, concurring;
Annex A, Petition; Rollo, 26.

^[2] Rollo, 32-33.

^[3] Partial
Stipulation of Facts, 2-4; Original Record, 134-136.

^[4] Rollo, 107.

^[5]
Report of Investigation, Equal Opportunity Complaint of Mrs. Loida Q. Shauf, E-77-154; Exhibit
M, Plaintiff’s Exhibits, 22-29.

^[6]
Exhibit M; Plaintiffs’ Exhibits, 26-27.

^[7] Ibid.,
28.

^[8]
Exhibit G; ibid., 12.

^[9]
Exhibit J; ibid., 17.

^[10]
Exhibit K; ibid., 18.

^[11]
Exhibit N; ibid., 30.

^[12]
Original Record, 133-134.

^[13] Ibid.,
186-187,

^[14] Rollo, 112.

^[15]
Brief for the Plaintiffs, 6; Rollo, 58.

^[16] Rollo, 12-13, 35.

^[17] Ibid.,
13-14.

^[18] United
States of America, et al. vs. Guinto, etc., et al., G.R. No. 76607, February 26, 1990.

^[19] Id.

^[20]
33 SCRA 368 (1970).

^[21] Ministerio, et al. vs. Court of First Instance of Cebu, etc., et al., 40 SCRA 464 (1971).

^[22]
Sanders, et al. vs. Veridiano, etc., et al.,
162 SCRA 88 (1988).

^[23]
57 SCRA 1 (1974).

^[24]
174 SCRA 214 (1989).

^[25] Dumlao vs. Court of Appeals, et al., 114 SCRA 247
(1982).

^[26]
Footnote 18.

^[27] Rollo, 107-111.

^[28] Vda. de Alberto, etc., et al. vs. Court of Appeals,
et al., 173 SCRA 436 (1989).

^[29] Matabuena vs. Court of Appeals, et al., 173 SCRA 170
(1989).

^[30] Rollo, 37.

^[31]
Plaintiff’s Exhibits, 12.

^[32] Ibid.,
18-19.

^[33] Ibid.,
20-21.

^[34]
McDonnell Douglas Corp. vs. Precy Green, 36 L
Ed 2d 668.

^[35]
16 Am. Jur. 2d 577, 846, 849.

^[36] Op.
cit., 683.

^[37] Osmeña & Associates vs. Court of Appeals, et
al., 120 SCRA 395 (1983).

^[38]
25 C.J.S. 677.

^[39] Guilatco vs. City of Dagupan, et al., 171 SCRA 382
(1989).

^[40]
Exhibit 2; Defendants’ Exhibits, 314-315.