Republic of the Philippines

SUPREME COURT
Manila
EN BANC

G.R. No. L-26400 February 29, 1972
VICTORIA AMIGABLE, plaintiff-appellant,
vs.
NICOLAS CUENCA, as Commissioner of Public Highways and REPUBLIC OF THE
PHILIPPINES,defendants-appellees.

MAKALINTAL, J.:p
This is an appeal from the decision of the Court of First Instance of Cebu in its Civil Case No. R-
5977, dismissing the plaintiff's complaint.
Victoria Amigable, the appellant herein, is the registered owner of Lot No. 639 of the Banilad
Estate in Cebu City as shown by Transfer Certificate of Title No. T-18060, which superseded
Transfer Certificate of Title No. RT-3272 (T-3435) issued to her by the Register of Deeds of Cebu
on February 1, 1924. No annotation in favor of the government of any right or interest in the
property appears at the back of the certificate. Without prior expropriation or negotiated sale,
the government used a portion of said lot, with an area of 6,167 square meters, for the
construction of the Mango and Gorordo Avenues.
It appears that said avenues were already existing in 1921 although "they were in bad condition
and very narrow, unlike the wide and beautiful avenues that they are now," and "that the
tracing of said roads was begun in 1924, and the formal construction in
1925." *
On March 27, 1958 Amigable's counsel wrote the President of the Philippines, requesting
payment of the portion of her lot which had been appropriated by the government. The claim
was indorsed to the Auditor General, who disallowed it in his 9th Indorsement dated December
9, 1958. A copy of said indorsement was transmitted to Amigable's counsel by the Office of the
President on January 7, 1959.
On February 6, 1959 Amigable filed in the court aquo a complaint, which was later amended on
April 17, 1959 upon motion of the defendants, against the Republic of the Philippines and
Nicolas Cuenca, in his capacity as Commissioner of Public Highways for the recovery of
ownership and possession of the 6,167 square meters of land traversed by the Mango and
Gorordo Avenues. She also sought the payment of compensatory damages in the sum of
P50,000.00 for the illegal occupation of her land, moral damages in the sum of P25,000.00,
attorney's fees in the sum of P5,000.00 and the costs of the suit.
Within the reglementary period the defendants filed a joint answer denying the material
allegations of the complaint and interposing the following affirmative defenses, to wit: (1) that
the action was premature, the claim not having been filed first with the Office of the Auditor
General; (2) that the right of action for the recovery of any amount which might be due the
plaintiff, if any, had already prescribed; (3) that the action being a suit against the Government,
the claim for moral damages, attorney's fees and costs had no valid basis since as to these items
the Government had not given its consent to be sued; and (4) that inasmuch as it was the
province of Cebu that appropriated and used the area involved in the construction of Mango
Avenue, plaintiff had no cause of action against the defendants.
During the scheduled hearings nobody appeared for the defendants notwithstanding due
notice, so the trial court proceeded to receive the plaintiff's evidence exparte. On July 29, 1959
said court rendered its decision holding that it had no jurisdiction over the plaintiff's cause of
action for the recovery of possession and ownership of the portion of her lot in question on the
ground that the government cannot be sued without its consent; that it had neither original nor
appellate jurisdiction to hear, try and decide plaintiff's claim for compensatory damages in the
sum of P50,000.00, the same being a money claim against the government; and that the claim
for moral damages had long prescribed, nor did it have jurisdiction over said claim because the
government had not given its consent to be sued. Accordingly, the complaint was dismissed.
Unable to secure a reconsideration, the plaintiff appealed to the Court of Appeals, which
subsequently certified the case to Us, there being no question of fact involved.
The issue here is whether or not the appellant may properly sue the government under the
facts of the case.
In the case of Ministeriovs.CourtofFirstInstanceofCebu,
1
involving a claim for payment of
the value of a portion of land used for the widening of the Gorordo Avenue in Cebu City, this
Court, through Mr. Justice Enrique M. Fernando, held that where the government takes away
property from a private landowner for public use without going through the legal process of
expropriation or negotiated sale, the aggrieved party may properly maintain a suit against the
government without thereby violating the doctrine of governmental immunity from suit
without its consent. We there said: .
... . If the constitutional mandate that the owner be compensated for property
taken for public use were to be respected, as it should, then a suit of this character
should not be summarily dismissed. The doctrine of governmental immunity from
suit cannot serve as an instrument for perpetrating an injustice on a citizen. Had
the government followed the procedure indicated by the governing law at the
time, a complaint would have been filed by it, and only upon payment of the
compensation fixed by the judgment, or after tender to the party entitled to such
payment of the amount fixed, may it "have the right to enter in and upon the land
so condemned, to appropriate the same to the public use defined in the
judgment." If there were an observance of procedural regularity, petitioners would
not be in the sad plaint they are now. It is unthinkable then that precisely because
there was a failure to abide by what the law requires, the government would stand
to benefit. It is just as important, if not more so, that there be fidelity to legal
norms on the part of officialdom if the rule of law were to be maintained. It is not
too much to say that when the government takes any property for public use,
which is conditioned upon the payment of just compensation, to be judicially
ascertained, it makes manifest that it submits to the jurisdiction of a court. There is
no thought then that the doctrine of immunity from suit could still be
appropriately invoked.
Considering that no annotation in favor of the government appears at the back of her
certificate of title and that she has not executed any deed of conveyance of any portion of her
lot to the government, the appellant remains the owner of the whole lot. As registered owner,
she could bring an action to recover possession of the portion of land in question at anytime
because possession is one of the attributes of ownership. However, since restoration of
possession of said portion by the government is neither convenient nor feasible at this time
because it is now and has been used for road purposes, the only relief available is for the
government to make due compensation which it could and should have done years ago. To
determine the due compensation for the land, the basis should be the price or value thereof at
the time of the taking.
2

As regards the claim for damages, the plaintiff is entitled thereto in the form of legal interest on
the price of the land from the time it was taken up to the time that payment is made by the
government.
3
In addition, the government should pay for attorney's fees, the amount of which
should be fixed by the trial court after hearing.
WHEREFORE, the decision appealed from is hereby set aside and the case remanded to the
court aquo for the determination of compensation, including attorney's fees, to which the
appellant is entitled as above indicated. No pronouncement as to costs.
Concepcion,C.J.,Reyes,J.B.L.,Zaldivar,Castro,Fernando,Teehankee,Barredo,Villamorand
MakasiarJJ.,concur.

Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-15751 January 28, 1961
BUREAU OF PRINTING, SERAFIN SALVADOR and MARIANO LEDESMA, petitioners,
vs.
THE BUREAU OF PRINTING EMPLOYEES ASSOCIATION (NLU), PACIFICO ADVINCULA, ROBERTO
MENDOZA, PONCIANO ARGANDA and TEODULO TOLERAN, respondents.
OfficeoftheSolicitorGeneralforpetitioners.
EulogioR.Lerumforrespondents.
GUTIERREZ DAVID, J.:
This is a petition for certiorari and prohibition with preliminary injunction to annul Certain
orders of the respondent Court of Industrial Relations and to restrain it from further proceeding
in the action for unfair labor practice pending before it on the ground of lack of jurisdiction.
Giving due course to the petition, this Court ordered the issuance of the writ of preliminary
injunction prayed for without bond.
The action in question was upon complaint of the respondents Bureau of Printing Employees
Association (NLU) PacificoAdvincula, Roberto Mendoza, PoncianoArganda and TeoduloToleran
filed by an acting prosecutor of the Industrial Court against herein petitioner Bureau of
Printing, Serafin Salvador, the Acting Secretary of the Department of General Services, and
Mariano Ledesma the Director of the Bureau of Printing. The complaint alleged that Serafin
Salvador and Mariano Ledesma have been engaging in unfair labor practices by interfering with,
or coercing the employees of the Bureau of Printing particularly the members of the
complaining association petition, in the exercise of their right to self-organization an
discriminating in regard to hire and tenure of their employment in order to discourage them
from pursuing the union activities.
Answering the complaint, the petitioners Bureau of Printing, Serafin Salvador and Mariano
Ledesma denied the charges of unfair labor practices attributed to the and, by way of
affirmative defenses, alleged, among other things, that respondents PacificoAdvincula, Roberto
Mendoza PoncianoArganda and TeoduloToleran were suspended pending result of an
administrative investigation against them for breach of Civil Service rules and regulations
petitions; that the Bureau of Printing has no juridical personality to sue and be sued; that said
Bureau of Printing is not an industrial concern engaged for the purpose of gain but is an agency
of the Republic performing government functions. For relief, they prayed that the case be
dismissed for lack of jurisdiction. Thereafter, before the case could be heard, petitioners filed
an "Omnibus Motion" asking for a preliminary hearing on the question of jurisdiction raised by
them in their answer and for suspension of the trial of the case on the merits pending the
determination of such jurisdictional question. The motion was granted, but after hearing, the
trial judge of the Industrial Court in an order dated January 27, 1959 sustained the jurisdiction
of the court on the theory that the functions of the Bureau of Printing are "exclusively
proprietary in nature," and, consequently, denied the prayer for dismissal. Reconsideration of
this order having been also denied by the court in banc, the petitioners brought the case to this
Court through the present petition for certiorari and prohibition.
We find the petition to be meritorious.
The Bureau of Printing is an office of the Government created by the Administrative Code of
1916 (Act No. 2657). As such instrumentality of the Government, it operates under the direct
supervision of the Executive Secretary, Office of the President, and is "charged with the
execution of all printing and binding, including work incidental to those processes, required by
the National Government and such other work of the same character as said Bureau may, by
law or by order of the (Secretary of Finance) Executive Secretary, be authorized to undertake . .
.." (See. 1644, Rev. Adm. Code). It has no corporate existence, and its appropriations are
provided for in the General Appropriations Act. Designed to meet the printing needs of the
Government, it is primarily a service bureau and obviously, not engaged in business or
occupation for pecuniary profit.
It is true, as stated in the order complained of, that the Bureau of Printing receives outside jobs
and that many of its employees are paid for overtime work on regular working days and on
holidays, but these facts do not justify the conclusion that its functions are "exclusively
proprietary in nature." Overtime work in the Bureau of Printing is done only when the interest
of the service so requires (sec. 566, Rev. Adm. Code). As a matter of administrative policy, the
overtime compensation may be paid, but such payment is discretionary with the head of the
Bureau depending upon its current appropriations, so that it cannot be the basis for holding
that the functions of said Bureau are wholly proprietary in character. Anent the additional work
it executes for private persons, we find that such work is done upon request, as distinguished
from those solicited, and only "as the requirements of Government work will permit" (sec.
1654, Rev. Adm. Code), and "upon terms fixed by the Director of Printing, with the approval of
the Department Head" (sec. 1655, id.). As shown by the uncontradicted evidence of the
petitioners, most of these works consist of orders for greeting cards during Christmas from
government officials, and for printing of checks of private banking institutions. On those
greeting cards, the Government seal, of which only the Bureau of Printing is authorized to use,
is embossed, and on the bank cheeks, only the Bureau of Printing can print the reproduction of
the official documentary stamps appearing thereon. The volume of private jobs done, in
comparison with government jobs, is only one-half of 1 per cent, and in computing the costs for
work done for private parties, the Bureau does not include profit because it is not allowed to
make any. Clearly, while the Bureau of Printing is allowed to undertake private printing jobs, it
cannot be pretended that it is thereby an industrial or business concern. The additional work it
executes for private parties is merely incidental to its function, and although such work may be
deemed proprietary in character, there is no showing that the employees performing said
proprietary function are separate and distinct from those employed in its general governmental
functions.
From what has been stated, it is obvious that the Court of Industrial Relations did not acquire
jurisdiction over the respondent Bureau of Printing, and is thus devoid of any authority to take
cognizance of the case. This Court has already held in a long line of decisions that the Industrial
Court has no jurisdiction to hear and determine the complaint for unfair labor practice filed
against institutions or corporations not organized for profit and, consequently, not an industrial
or business organization. This is so because the Industrial Peace Act was intended to apply only
to industrial employment, and to govern the relations between employers engaged in industry
and occupations for purposes of gain, and their industrial employees. (University of the
Philippines, et al. vs. CIR, et al., G.R. No. L-15416, April 28, 1960; University of Sto. Tomas vs.
Villanueva, et al., G.R. No. L-13748, October 30, 1959; La Consolacion College vs. CIR, G.R. No. L-
13282, April 22, 1960; See also the cases cited therein.) .
Indeed, as an office of the Government, without any corporate or juridical personality, the
Bureau of Printing cannot be sued. (Sec. 1, Rule 3, Rules of Court). Any suit, action or
proceeding against it, if it were to produce any effect, would actually be a suit, action or
proceeding against the Government itself, and the rule is settled that the Government cannot
be sued without its consent, much less over its objection. (See Metran vs. Paredes, 45 Off. Gaz.
2835; Angat River Irrigation System, et al. vs. Angat River Workers' Union, et. al., G.R. Nos. L-
10943-44, December 28, 1957).
The record also discloses that the instant case arose from the filing of administrative charges
against some officers of the respondent Bureau of Printing Employees' Association by the
Acting Secretary of General Services. Said administrative charges are for insubordination, grave
misconduct and acts prejudicial to public service committed by inciting the employees, of the
Bureau of Printing to walk out of their jobs against the order of the duly constituted officials.
Under the law, the Heads of Departments and Bureaus are authorized to institute and
investigate administrative charges against erring subordinates. For the Industrial Court now to
take cognizance of the case filed before it, which is in effect a review of the acts of executive
officials having to do with the discipline of government employees under them, would be to
interfere with the discharge of such functions by said officials. WHEREFORE, the petition for a
writ of prohibition is granted. The orders complained of are set aside and the complaint for
unfair labor practice against the petitioners is dismissed, with costs against respondents other
than the respondent court.
Bengzon,BautistaAngelo,Labrador,ParedesandDizon,JJ., concur.
Reyes,J.B.L.,J., concurs in the result.

Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION

G.R. No. 104269 November 11, 1993
DEPARTMENT OF AGRICULTURE, petitioner,
vs.
THE NATIONAL LABOR RELATIONS COMMISSION, et al., respondents.
RoyLagoSalcedoforprivaterespondents.

VITUG, J.:
For consideration are the incidents that flow from the familiar doctrine of non-suability of the
state.
In this petition for certiorari, the Department of Agriculture seeks to nullify the
Resolution,
1
dated 27 November 1991, of the National Labor Relations Commission (NLRC),
Fifth Division, Cagayan de Oro City, denying the petition for injunction, prohibition
and mandamus that prays to enjoin permanently the NLRC's Regional Arbitration Branch X and
Cagayan de Oro City Sheriff from enforcing the decision
2
of 31 May 1991 of the Executive Labor
Arbiter and from attaching and executing on petitioner's property.
The Department of Agriculture (herein petitioner) and Sultan Security Agency entered into a
contract
3
on 01 April 1989 for security services to be provided by the latter to the said
governmental entity. Save for the increase in the monthly rate of the guards, the same terms
and conditions were also made to apply to another contract, dated 01 May 1990, between the
same parties. Pursuant to their arrangements, guards were deployed by Sultan Agency in the
various premises of the petitioner.
On 13 September 1990, several guards of the Sultan Security Agency filed a complaint for
underpayment of wages, non-payment of 13th month pay, uniform allowances, night shift
differential pay, holiday pay and overtime pay, as well as for damages,
4
before the Regional
Arbitration Branch X of Cagayan de Oro City, docketed as NLRC Case No. 10-09-00455-90 (or
10-10-00519-90, its original docket number), against the Department of Agriculture and Sultan
Security Agency.
The Executive Labor Arbiter rendered a decision on 31 May finding herein petitioner
andjointlyandseverallyliable with Sultan Security Agency for the payment of money claims,
aggregating P266,483.91, of the complainant security guards. The petitioner and Sultan Security
Agency did not appeal the decision of the Labor Arbiter. Thus, the decision became final and
executory.
On 18 July 1991, the Labor Arbiter issued a writ of execution.
5
commanding the City Sheriff to
enforce and execute the judgment against the property of the two respondents. Forthwith, or
on 19 July 1991, the City Sheriff levied on execution the motor vehicles of the petitioner, i.e.
one (1) unit Toyota Hi-Ace, one (1) unit Toyota Mini Cruiser, and one (1) unit Toyota
Crown.
6
These units were put under the custody of Zacharias Roa, the property custodian of
the petitioner, pending their sale at public auction or the final settlement of the case,
whichever would come first.
A petition for injunction, prohibition and mandamus, with prayer for preliminary writ of
injunction was filed by the petitioner with the National Labor Relations Commission (NLRC),
Cagayan de Oro, alleging, interalia, that the writ issued was effected without the Labor Arbiter
having duly acquired jurisdiction over the petitioner, and that, therefore, the decision of the
Labor Arbiter was null and void and all actions pursuant thereto should be deemed equally
invalid and of no legal, effect. The petitioner also pointed out that the attachment or seizure of
its property would hamper and jeopardize petitioner's governmental functions to the prejudice
of the public good.
On 27 November 1991, the NLRC promulgated its assailed resolution; viz:
WHEREFORE, premises considered, the following orders are issued:
1. The enforcement and execution of the judgments against petitioner in NLRC
RABX Cases Nos. 10-10-00455-90; 10-10-0481-90 and 10-10-00519-90 are
temporarily suspended for a period of two (2) months, more or less, but not
extending beyond the last quarter of calendar year 1991 to enable petitioner to
source and raise funds to satisfy the judgment awards against it;
2. Meantime, petitioner is ordered and directed to source for funds within the
period above-stated and to deposit the sums of money equivalent to the aggregate
amount. it has been adjudged to pay jointly and severally with respondent Sultan
Security Agency with the Regional Arbitration Branch X, Cagayan de Oro City within
the same period for proper dispositions;
3. In order to ensure compliance with this order, petitioner is likewise directed to
put up and post sufficient surety and supersedeasbondequivalent to at least to
fifty (50%) percent of the total monetary award issued by a reputable bonding
company duly accredited by the Supreme Court or by the Regional Trial Court of
Misamis Oriental to answer for the satisfaction of the money claims in case of
failure or default on the part of petitioner to satisfy the money claims;
4. The City Sheriff is ordered to immediately release the properties of petitioner
levied on execution within ten (10) days from notice of the posting of sufficient
surety or supersedeas bond as specified above. In the meanwhile, petitioner is
assessed to pay the costs and/or expenses incurred by the City Sheriff, if any, in
connection with the execution of the judgments in the above-stated cases upon
presentation of the appropriate claims or vouchers and receipts by the city Sheriff,
subject to the conditions specified in the NLRC Sheriff, subject to the conditions
specified in the NLRC Manual of Instructions for Sheriffs;
5. The right of any of the judgment debtors to claim reimbursement against each
other for any payments made in connection with the satisfaction of the judgments
herein is hereby recognized pursuant to the ruling in the EagleSecurity case,
(supra). In case of dispute between the judgment debtors, the Executive Labor
Arbiter of the Branch of origin may upon proper petition by any of the parties
conduct arbitration proceedings for the purpose and thereby render his decision
after due notice and hearings;
7. Finally, the petition for injunction is Dismissed for lack of basis. The writ of
preliminary injunction previously issued is LiftedandSetAside and in lieu thereof,
a TemporaryStayofExecution is issued for a period of two (2) months but not
extending beyond the last quarter of calendar year 1991, conditioned upon the
posting of a surety or supersedeas bond by petitioner within ten (10) days from
notice pursuant to paragraph 3 of this disposition. The motion to admit the
complaint in intervention is Deniedfor lack of merit while the motion to dismiss
the petition filed by Duty Sheriff isNoted
SO ORDERED.
In this petition for certiorari, the petitioner charges the NLRC with grave abuse of discretion for
refusing to quash the writ of execution. The petitioner faults the NLRC for assuming jurisdiction
over a money claim against the Department, which, it claims, falls under the exclusive
jurisdiction of the Commission on Audit. More importantly, the petitioner asserts, the NLRC has
disregarded the cardinal rule on the non-suability of the State.
The private respondents, on the other hand, argue that the petitioner has impliedly waived its
immunity from suit by concluding a service contract with Sultan Security Agency.
The basic postulate enshrined in the constitution that "(t)he State may not be sued without its
consent,"
7
reflects nothing less than a recognition of the sovereign character of the State and
an express affirmation of the unwritten rule effectively insulating it from the jurisdiction of
courts.
8
It is based on the very essence of sovereignty. As has been aptly observed, by Justice
Holmes, a sovereign is exempt from suit, not because of any formal conception or obsolete
theory, but on the logical and practical ground that there can be no legal right as against the
authority that makes the law on which the right depends.
9
True, the doctrine, not too
infrequently, is derisively called "the royal prerogative of dishonesty" because it grants the state
the prerogative to defeat any legitimate claim against it by simply invoking its non-
suability.
10
We have had occasion, to explain in its defense, however, that a continued
adherence to the doctrine of non-suability cannot be deplored, for the loss of governmental
efficiency and the obstacle to the performance of its multifarious functions would be far greater
in severity than the inconvenience that may be caused private parties, if such fundamental
principle is to be abandoned and the availability of judicial remedy is not to be accordingly
restricted.
11

The rule, in any case, is not really absolute for it does not say that the state may not be sued
under any circumstances. On the contrary, as correctly phrased, the doctrine only conveys, "the
state may not be sued without its consent;" its clear import then is that the State may at times
be sued.
12
The States' consent may be given expressly or impliedly. Express consent may be
made through a general law
13
or a special law.
14
In this jurisdiction, the general law waiving the
immunity of the state from suit is found in Act No. 3083, where the Philippine government
"consents and submits to be sued upon any money claims involving liability arising from
contract, express or implied, which could serve as a basis of civil action between private
parties."
15
Implied consent, on the other hand, is conceded when the State itself commences
litigation, thus opening itself to a counterclaim
16
or when it enters into a contract.
17
In this
situation, the government is deemed to have descended to the level of the other contracting
party and to have divested itself of its sovereign immunity. This rule, relied upon by the NLRC
and the private respondents, is not, however, without qualification. Not all contracts entered
into by the government operate as a waiver of its non-suability; distinction must still be made
between one which is executed in the exercise of its sovereign function and another which is
done in its proprietary capacity.
18

In the UnitesStatesofAmericavs.Ruiz,
19
where the questioned transaction dealt with
improvements on the wharves in the naval installation at Subic Bay, we held:
The traditional rule of immunity exempts a State from being sued in the courts of
another State without its consent or waiver. This rule is a necessary consequence
of the principles of independence and equality of States. However, the rules of
International Law are not petrified; they are constantly developing and evolving.
And because the activities of states have multiplied, it has been necessary to
distinguish them between sovereign and governmental acts (jureimperii) and
private, commercial and proprietary act (juregestionisis). The result is that State
immunity now extends only to actsjureimperii. The restrictive application of State
immunity is now the rule in the United States, the United Kingdom and other
states in Western Europe.
xxx xxxxxx
The restrictive application of State immunity is proper only when the proceedings
arise out of commercial transactions of the foreign sovereign, its commercial
activities or economic affairs. Stated differently, a state may be said to have
descended to the level of an individual and can this be deemed to have actually
given its consent to be sued only when it enters into business contracts. It does not
apply where the contracts relates to the exercise of its sovereign functions. In this
case the projects are an integral part of the naval base which is devoted to the
defense of both the United States and the Philippines, indisputably a function of
the government of the highest order; they are not utilized for not dedicated to
commercial or business purposes.
In the instant case, the Department of Agriculture has not pretended to have assumed a
capacity apart from its being a governmental entity when it entered into the questioned
contract; nor that it could have, in fact, performed any act proprietary in character.
But, be that as it may, the claims of private respondents, i.e. for underpayment of wages,
holiday pay, overtime pay and similar other items, arising from the Contract for Service, clearly
constitute money claims. Act No. 3083, aforecited, gives the consent of the State to be "sued
upon any moneyed claim involving liability arising from contract, express or implied, . . .
Pursuant, however, to Commonwealth Act ("C.A.") No. 327, as amended by Presidential Decree
("P.D.") No. 1145, the money claim first be brought to the Commission on Audit. Thus,
inCarabao,Inc.,vs.AgriculturalProductivityCommission,
20
we ruled:
(C)laimants have to prosecute their money claims against the Government under
Commonwealth Act 327, stating that Act 3083 stands now merely as the general
law waiving the State's immunity from suit, subject to the general limitation
expressed in Section 7 thereof that "no execution shall issue upon any judgment
rendered by any Court against the Government of the (Philippines), and that the
conditions provided in Commonwealth Act 327 for filing money claims against the
Government must be strictly observed."
We fail to see any substantial conflict or inconsistency between the provisions of C.A. No. 327
and the Labor Code with respect to money claims against the State. The Labor code, in relation
to Act No. 3083, provides the legal basis for the State liability but the prosecution, enforcement
or satisfaction thereof must still be pursued in accordance with the rules and procedures laid
down in C.A. No. 327, as amended by P.D. 1445.
When the state gives its consent to be sued, it does thereby necessarily consent to unrestrained
execution against it. tersely put, when the State waives its immunity, all it does, in effect, is to
give the other party an opportunity to prove, if it can, that the State has a liability.
21
In Republic
vs.Villasor
22
this Court, in nullifying the issuance of an alias writ of execution directed against
the funds of the Armed Forces of the Philippines to satisfy a final and executory judgment, has
explained, thus
The universal rule that where the State gives its consent to be sued by private
parties either by general or special law, it may limit the claimant's action "only up
to the completion of proceedings anterior to the stage of execution" and thatthe
poweroftheCourtsendswhenthejudgmentisrendered,sincegovernmentfunds
andpropertiesmaynotbeseizedunderwritsorexecutionorgarnishmenttosatisfy
suchjudgments, is based on obvious considerations of public policy.
Disbursements of public funds must be covered by the correspondent
appropriation as required by law. The functions and public services rendered by
the State cannot be allowed to be paralyzed or disrupted by the diversion of public
funds from their legitimate and specific objects, as appropriated by law.
23

WHEREFORE, the petition is GRANTED. The resolution, dated 27 November 1991, is hereby
REVERSED and SET ASIDE. The writ of execution directed against the property of the
Department of Agriculture is nullified, and the public respondents are hereby enjoined
permanently from doing, issuing and implementing any and all writs of execution issued
pursuant to the decision rendered by the Labor Arbiter against said petitioner.
SO ORDERED.
Feliciano,Bidin,RomeroandMelo,JJ.,concur.

Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-20213 January 31, 1966
MARIANO E. GARCIA, plaintiff-appellant,
vs.
THE CHIEF OF STAFF and THE ADJUTANT GENERAL, ARMED FORCES OF THE PHILIPPINES and/or
THE CHAIRMAN, PHILIPPINE VETERANS BOARD and/or THE AUDITOR GENERAL OF THE
PHILIPPINES,defendants-appellees.
TiangcoandMillosafortheplaintiff-appellant.
OfficeoftheSolicitorGeneralforthedefendants-appellees.
REGALA, J.:
This is an appeal from an order of dismissal.
It appears that on December 1, 1961, the plaintiff-appellant, Mariano E. Garcia, filed with the
Court of First Instance of Pangasinan an action to collect a sum of money against the Chief of
Staff and the Adjutant General of the Armed Forces of the Philippines, the Chairman of the
Philippine Veterans Board and /or the Auditor General. The complaint alleged: that sometime in
July, 1948, the plaintiff suffered injuries while undergoing the 10-month military training at
Camp Floridablanca, Pampanga; that sometime thereafter he filed his claim under
Commonwealth Act 400 and in April, 1957, he submitted some papers in support of his claim to
the Adjutant General's Office upon the latter's request; that on May 2, 1957, he received a
letter from the said Adjutant General's Office disallowing his claim for disability benefits; that on
November 24, 1958, after further demands of the plaintiff, the Adjutant General's Office denied
the said claim, alleging that Commonwealth Act 400 had already been repealed by Republic Act
610 which took effect on January 1, 1950; that by reason of the injuries suffered by plaintiff he
was deprived of his sight or vision rendering him permanently disabled; and that by reason of
the unjustified refusal by defendants of plaintiff's claim, the latter was deprived of his disability
pension from July, 1948 totalling no less than P4,000 at the rate of P20 a month and suffered
thereby moral damages and attorney's fees the amount of P2,000.00.
The Philippine Veterans Administration and the Chief of Staff of the Armed Forces filed separate
motions to dismiss the complaint on the grounds that the court has no jurisdiction over the
subject matter of the complaint; that the plaintiff failed to exhaust all administrative remedies
before coming to court; that the complaint states no cause of action; and that the cause of
action is barred by the statute of limitations.1wph1.t
Acting on the said motion, the court, on March 2, 1962, rendered an order dismissing the
complaint on the ground that the action has prescribed.
Motion for reconsideration of the said order having been denied, the plaintiff has interposed
this appeal.
Without need of discussing the various questions raised, We have to uphold the order of
dismissal, not necessarily on the same ground as found by the lower court; but for the simple
reason that the Court of First Instance has no jurisdiction over the subject matter, it being a
money claim against the government.
This Court has already held (New Manila Lumber Co. Inc. vs. Republic, G.R. No. L-14248, April
28, 1960) that a claim for the recovery of money against the government should be filed with
the Auditor General, in line with the principle that the State cannot be sued without its consent.
Commonwealth Act 327 provides:
SECTION 1. In all cases involving the settlement of accounts or claims, other than those of
accountable officers, the Auditor General shall act and decide the same within sixty days,
exclusive of Sundays and holidays, after their presentation. . . .
SEC. 2. The party aggrieved by the final decision of the Auditor General in the settlement
of an account or claim may, within thirty days from receipt of the decision, take an
appeal in writing:
x xx x xx x xx.
(c) To the Supreme Court of the Philippines, if the appellant is a private person or entity.
The well established rule that no recourse to court can be had until all administrative remedies
had been exhausted and that actions against administrative officers should not be entertained
if superior administrative officers could grant relief is squarely applicable to the present case.
In view therefor, the order dismissing the complaint is hereby affirmed, without
pronouncement as to costs.
Bengzon,C.J.,BautistaAngelo,Concepcion,ReyesJ.B.L.,Barrera,Dizon,Bengzon,J.P.,and
Zaldivar,JJ.,concur.
Makalintal,J.,tooknopart.

Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-11154 March 21, 1916
E. MERRITT, plaintiff-appellant,
vs.
GOVERNMENT OF THE PHILIPPINE ISLANDS, defendant-appellant.
CrossfieldandO'Brienforplaintiff.
Attorney-GeneralAvanceafordefendant..
TRENT, J.:
This is an appeal by both parties from a judgment of the Court of First Instance of the city of
Manila in favor of the plaintiff for the sum of P14,741, together with the costs of the cause.
Counsel for the plaintiff insist that the trial court erred (1) "in limiting the general damages
which the plaintiff suffered to P5,000, instead of P25,000 as claimed in the complaint," and (2)
"in limiting the time when plaintiff was entirely disabled to two months and twenty-one days
and fixing the damage accordingly in the sum of P2,666, instead of P6,000 as claimed by
plaintiff in his complaint."
The Attorney-General on behalf of the defendant urges that the trial court erred: (a) in finding
that the collision between the plaintiff's motorcycle and the ambulance of the General Hospital
was due to the negligence of the chauffeur; (b) in holding that the Government of the
Philippine Islands is liable for the damages sustained by the plaintiff as a result of the collision,
even if it be true that the collision was due to the negligence of the chauffeur; and (c) in
rendering judgment against the defendant for the sum of P14,741.
The trial court's findings of fact, which are fully supported by the record, are as follows:
It is a fact not disputed by counsel for the defendant that when the plaintiff, riding on a
motorcycle, was going toward the western part of Calle Padre Faura, passing along the
west side thereof at a speed of ten to twelve miles an hour, upon crossing Taft Avenue
and when he was ten feet from the southwestern intersection of said streets, the
General Hospital ambulance, upon reaching said avenue, instead of turning toward the
south, after passing the center thereof, so that it would be on the left side of said
avenue, as is prescribed by the ordinance and the Motor Vehicle Act, turned suddenly
and unexpectedly and long before reaching the center of the street, into the right side of
Taft Avenue, without having sounded any whistle or horn, by which movement it struck
the plaintiff, who was already six feet from the southwestern point or from the post place
there.
By reason of the resulting collision, the plaintiff was so severely injured that, according to
Dr. Saleeby, who examined him on the very same day that he was taken to the General
Hospital, he was suffering from a depression in the left parietal region, a would in the
same place and in the back part of his head, while blood issued from his nose and he was
entirely unconscious.
The marks revealed that he had one or more fractures of the skull and that the grey
matter and brain was had suffered material injury. At ten o'clock of the night in question,
which was the time set for performing the operation, his pulse was so weak and so
irregular that, in his opinion, there was little hope that he would live. His right leg was
broken in such a way that the fracture extended to the outer skin in such manner that it
might be regarded as double and the would be exposed to infection, for which reason it
was of the most serious nature.
At another examination six days before the day of the trial, Dr. Saleeby noticed that the
plaintiff's leg showed a contraction of an inch and a half and a curvature that made his
leg very weak and painful at the point of the fracture. Examination of his head revealed a
notable readjustment of the functions of the brain and nerves. The patient apparently
was slightly deaf, had a light weakness in his eyes and in his mental condition. This latter
weakness was always noticed when the plaintiff had to do any difficult mental labor,
especially when he attempted to use his money for mathematical calculations.
According to the various merchants who testified as witnesses, the plaintiff's mental and
physical condition prior to the accident was excellent, and that after having received the
injuries that have been discussed, his physical condition had undergone a noticeable
depreciation, for he had lost the agility, energy, and ability that he had constantly
displayed before the accident as one of the best constructors of wooden buildings and he
could not now earn even a half of the income that he had secured for his work because
he had lost 50 per cent of his efficiency. As a contractor, he could no longer, as he had
before done, climb up ladders and scaffoldings to reach the highest parts of the building.
As a consequence of the loss the plaintiff suffered in the efficiency of his work as a
contractor, he had to dissolved the partnership he had formed with the engineer. Wilson,
because he was incapacitated from making mathematical calculations on account of the
condition of his leg and of his mental faculties, and he had to give up a contract he had
for the construction of the Uy Chaco building."
We may say at the outset that we are in full accord with the trial court to the effect that the
collision between the plaintiff's motorcycle and the ambulance of the General Hospital was due
solely to the negligence of the chauffeur.
The two items which constitute a part of the P14,741 and which are drawn in question by the
plaintiff are (a) P5,000, the award awarded for permanent injuries, and (b) the P2,666, the
amount allowed for the loss of wages during the time the plaintiff was incapacitated from
pursuing his occupation. We find nothing in the record which would justify us in increasing the
amount of the first. As to the second, the record shows, and the trial court so found, that the
plaintiff's services as a contractor were worth P1,000 per month. The court, however, limited
the time to two months and twenty-one days, which the plaintiff was actually confined in the
hospital. In this we think there was error, because it was clearly established that the plaintiff
was wholly incapacitated for a period of six months. The mere fact that he remained in the
hospital only two months and twenty-one days while the remainder of the six months was
spent in his home, would not prevent recovery for the whole time. We, therefore, find that the
amount of damages sustained by the plaintiff, without any fault on his part, is P18,075.
As the negligence which caused the collision is a tort committed by an agent or employee of the
Government, the inquiry at once arises whether the Government is legally-liable for the
damages resulting therefrom.
Act No. 2457, effective February 3, 1915, reads:
An Act authorizing E. Merritt to bring suit against the Government of the Philippine
Islands and authorizing the Attorney-General of said Islands to appear in said suit.
Whereas a claim has been filed against the Government of the Philippine Islands by Mr.
E. Merritt, of Manila, for damages resulting from a collision between his motorcycle and
the ambulance of the General Hospital on March twenty-fifth, nineteen hundred and
thirteen;
Whereas it is not known who is responsible for the accident nor is it possible to
determine the amount of damages, if any, to which the claimant is entitled; and
Whereas the Director of Public Works and the Attorney-General recommended that an
Act be passed by the Legislature authorizing Mr. E. Merritt to bring suit in the courts
against the Government, in order that said questions may be decided: Now, therefore,
ByauthorityoftheUnitedStates,beitenactedbythePhilippineLegislature,that:
SECTION 1. E. Merritt is hereby authorized to bring suit in the Court of First Instance of
the city of Manila against the Government of the Philippine Islands in order to fix the
responsibility for the collision between his motorcycle and the ambulance of the General
Hospital, and to determine the amount of the damages, if any, to which Mr. E. Merritt is
entitled on account of said collision, and the Attorney-General of the Philippine Islands is
hereby authorized and directed to appear at the trial on the behalf of the Government of
said Islands, to defendant said Government at the same.
SEC. 2. This Act shall take effect on its passage.
Enacted, February 3, 1915.
Did the defendant, in enacting the above quoted Act, simply waive its immunity from suit or did
it also concede its liability to the plaintiff? If only the former, then it cannot be held that the Act
created any new cause of action in favor of the plaintiff or extended the defendant's liability to
any case not previously recognized.
All admit that the Insular Government (the defendant) cannot be sued by an individual without
its consent. It is also admitted that the instant case is one against the Government. As the
consent of the Government to be sued by the plaintiff was entirely voluntary on its part, it is our
duty to look carefully into the terms of the consent, and render judgment accordingly.
The plaintiff was authorized to bring this action against the Government "in order to fix the
responsibility for the collision between his motorcycle and the ambulance of the General
Hospital and to determine the amount of the damages, if any, to which Mr. E. Merritt is entitled
on account of said collision, . . . ." These were the two questions submitted to the court for
determination. The Act was passed "in order that said questions may be decided." We have
"decided" that the accident was due solely to the negligence of the chauffeur, who was at the
time an employee of the defendant, and we have also fixed the amount of damages sustained
by the plaintiff as a result of the collision. Does the Act authorize us to hold that the
Government is legally liable for that amount? If not, we must look elsewhere for such authority,
if it exists.
The Government of the Philippine Islands having been "modeled after the Federal and State
Governments in the United States," we may look to the decisions of the high courts of that
country for aid in determining the purpose and scope of Act No. 2457.
In the United States the rule that the state is not liable for the torts committed by its officers or
agents whom it employs, except when expressly made so by legislative enactment, is well
settled. "The Government," says Justice Story, "does not undertake to guarantee to any person
the fidelity of the officers or agents whom it employs, since that would involve it in all its
operations in endless embarrassments, difficulties and losses, which would be subversive of the
public interest." (Claussen vs. City of Luverne, 103 Minn., 491, citing U. S. vs. Kirkpatrick, 9
Wheat, 720; 6 L. Ed., 199; and Beers vs. States, 20 How., 527; 15 L. Ed., 991.)
In the case of Melvinvs.State (121 Cal., 16), the plaintiff sought to recover damages from the
state for personal injuries received on account of the negligence of the state officers at the
state fair, a state institution created by the legislature for the purpose of improving agricultural
and kindred industries; to disseminate information calculated to educate and benefit the
industrial classes; and to advance by such means the material interests of the state, being
objects similar to those sought by the public school system. In passing upon the question of the
state's liability for the negligent acts of its officers or agents, the court said:
No claim arises against any government is favor of an individual, by reason of the
misfeasance, laches, or unauthorized exercise of powers by its officers or agents. (Citing
Gibbons vs. U. S., 8 Wall., 269; Clodfelter vs. State, 86 N. C., 51, 53; 41 Am. Rep., 440;
Chapman vs. State, 104 Cal., 690; 43 Am. St. Rep., 158; Green vs. State, 73 Cal., 29; Bourn
vs. Hart, 93 Cal., 321; 27 Am. St. Rep., 203; Story on Agency, sec. 319.)
As to the scope of legislative enactments permitting individuals to sue the state where the
cause of action arises out of either fort or contract, the rule is stated in 36 Cyc., 915, thus:
By consenting to be sued a state simply waives its immunity from suit. It does not thereby
concede its liability to plaintiff, or create any cause of action in his favor, or extend its
liability to any cause not previously recognized. It merely gives a remedy to enforce a
preexisting liability and submits itself to the jurisdiction of the court, subject to its right to
interpose any lawful defense.
In Apfelbachervs.State (152 N. W., 144, advanced sheets), decided April 16, 1915, the Act of
1913, which authorized the bringing of this suit, read:
SECTION 1. Authority is hereby given to George Apfelbacher, of the town of Summit,
Waukesha County, Wisconsin, to bring suit in such court or courts and in such form or
forms as he may be advised for the purpose of settling and determining all controversies
which he may now have with the State of Wisconsin, or its duly authorized officers and
agents, relative to the mill property of said George Apfelbacher, the fish hatchery of the
State of Wisconsin on the Bark River, and the mill property of Evan Humphrey at the
lower end of Nagawicka Lake, and relative to the use of the waters of said Bark River and
Nagawicka Lake, all in the county of Waukesha, Wisconsin.
In determining the scope of this act, the court said:
Plaintiff claims that by the enactment of this law the legislature admitted liability on the
part of the state for the acts of its officers, and that the suit now stands just as it would
stand between private parties. It is difficult to see how the act does, or was intended to
do, more than remove the state's immunity from suit. It simply gives authority to
commence suit for the purpose of settling plaintiff's controversies with the estate.
Nowhere in the act is there a whisper or suggestion that the court or courts in the
disposition of the suit shall depart from well established principles of law, or that the
amount of damages is the only question to be settled. The act opened the door of the
court to the plaintiff. It did not pass upon the question of liability, but left the suit just
where it would be in the absence of the state's immunity from suit. If the Legislature had
intended to change the rule that obtained in this state so long and to declare liability on
the part of the state, it would not have left so important a matter to mere inference, but
would have done so in express terms. (Murdock Grate Co. vs. Commonwealth, 152 Mass.,
28; 24 N.E., 854; 8 L. R. A., 399.)
In Denningvs.State (123 Cal., 316), the provisions of the Act of 1893, relied upon and
considered, are as follows:
All persons who have, or shall hereafter have, claims on contract or for negligence
against the state not allowed by the state board of examiners, are hereby authorized, on
the terms and conditions herein contained, to bring suit thereon against the state in any
of the courts of this state of competent jurisdiction, and prosecute the same to final
judgment. The rules of practice in civil cases shall apply to such suits, except as herein
otherwise provided.
And the court said:
This statute has been considered by this court in at least two cases, arising under
different facts, and in both it was held that said statute did not create any liability or
cause of action against the state where none existed before, but merely gave an
additional remedy to enforce such liability as would have existed if the statute had not
been enacted. (Chapman vs. State, 104 Cal., 690; 43 Am. St. Rep., 158; Melvin vs. State,
121 Cal., 16.)
A statute of Massachusetts enacted in 1887 gave to the superior court "jurisdiction of all claims
against the commonwealth, whether at law or in equity," with an exception not necessary to be
here mentioned. In construing this statute the court, in MurdockGrateCo.vs.
Commonwealth (152 Mass., 28), said:
The statute we are discussing disclose no intention to create against the state a new and
heretofore unrecognized class of liabilities, but only an intention to provide a judicial
tribunal where well recognized existing liabilities can be adjudicated.
In Sipplevs.State (99 N. Y., 284), where the board of the canal claims had, by the terms of the
statute of New York, jurisdiction of claims for damages for injuries in the management of the
canals such as the plaintiff had sustained, Chief Justice Ruger remarks: "It must be conceded
that the state can be made liable for injuries arising from the negligence of its agents or
servants, only by force of some positive statute assuming such liability."
It being quite clear that Act No. 2457 does not operate to extend the Government's liability to
any cause not previously recognized, we will now examine the substantive law touching the
defendant's liability for the negligent acts of its officers, agents, and employees. Paragraph 5 of
article 1903 of the Civil Code reads:
The state is liable in this sense when it acts through a special agent, but not when the
damage should have been caused by the official to whom properly it pertained to do the
act performed, in which case the provisions of the preceding article shall be applicable.
The supreme court of Spain in defining the scope of this paragraph said:
That the obligation to indemnify for damages which a third person causes to another by
his fault or negligence is based, as is evidenced by the same Law 3, Title 15, Partida 7, on
that the person obligated, by his own fault or negligence, takes part in the act or
omission of the third party who caused the damage. It follows therefrom that the state,
by virtue of such provisions of law, is not responsible for the damages suffered by private
individuals in consequence of acts performed by its employees in the discharge of the
functions pertaining to their office, because neither fault nor even negligence can be
presumed on the part of the state in the organization of branches of public service and in
the appointment of its agents; on the contrary, we must presuppose all foresight
humanly possible on its part in order that each branch of service serves the general weal
an that of private persons interested in its operation. Between these latter and the state,
therefore, no relations of a private nature governed by the civil law can arise except in a
case where the state acts as a judicial person capable of acquiring rights and contracting
obligations. (Supreme Court of Spain, January 7, 1898; 83 Jur. Civ., 24.)
That the Civil Code in chapter 2, title 16, book 4, regulates the obligations which arise out
of fault or negligence; and whereas in the first article thereof. No. 1902, where the
general principle is laid down that where a person who by an act or omission causes
damage to another through fault or negligence, shall be obliged to repair the damage so
done, reference is made to acts or omissions of the persons who directly or indirectly
cause the damage, the following articles refers to this persons and imposes an identical
obligation upon those who maintain fixed relations of authority and superiority over the
authors of the damage, because the law presumes that in consequence of such relations
the evil caused by their own fault or negligence is imputable to them. This legal
presumption gives way to proof, however, because, as held in the last paragraph of
article 1903, responsibility for acts of third persons ceases when the persons mentioned
in said article prove that they employed all the diligence of a good father of a family to
avoid the damage, and among these persons, called upon to answer in a direct and not a
subsidiary manner, are found, in addition to the mother or the father in a proper case,
guardians and owners or directors of an establishment or enterprise, the state, but not
always, except when it acts through the agency of a special agent, doubtless because and
only in this case, the fault or negligence, which is the original basis of this kind of
objections, must be presumed to lie with the state.
That although in some cases the state might by virtue of the general principle set forth in
article 1902 respond for all the damage that is occasioned to private parties by orders or
resolutions which by fault or negligence are made by branches of the central
administration acting in the name and representation of the state itself and as an
external expression of its sovereignty in the exercise of its executive powers, yet said
article is not applicable in the case of damages said to have been occasioned to the
petitioners byanexecutiveofficial, acting in the exercise of his powers, in proceedings to
enforce the collections of certain property taxes owing by the owner of the property
which they hold in sublease.
That the responsibility of the state is limited by article 1903 to the case wherein it
acts throughaspecialagent (and a special agent, in the sense in which these words are
employed, is one who receives a definite and fixed order or commission, foreign to the
exercise of the duties of his office if he is a special official) so that in representation of the
state and being bound to act as an agent thereof, he executes the trust confided to him.
This concept does not apply to any executive agent who is an employee of the acting
administration and who on his own responsibility performs the functions which are
inherent in and naturally pertain to his office and which are regulated by law and the
regulations." (Supreme Court of Spain, May 18, 1904; 98 Jur. Civ., 389, 390.)
That according to paragraph 5 of article 1903 of the Civil Code and the principle laid
down in a decision, among others, of the 18th of May, 1904, in a damage case, the
responsibility of the state is limited to that which it contracts through a special agent,
duly empowered by a definiteorderorcommissiontoperformsomeactorchargedwith
somedefinitepurposewhichgivesrisetotheclaim, and not where the claim is based on
acts or omissions imputable to a public official charged with some administrative or
technical office who can be held to the proper responsibility in the manner laid down by
the law of civil responsibility. Consequently, the trial court in not so deciding and in
sentencing the said entity to the payment of damages, caused by an official of the second
class referred to, has by erroneous interpretation infringed the provisions of articles 1902
and 1903 of the Civil Code. (Supreme Court of Spain, July 30, 1911; 122 Jur. Civ., 146.)
It is, therefore, evidence that the State (the Government of the Philippine Islands) is only liable,
according to the above quoted decisions of the Supreme Court of Spain, for the acts of its
agents, officers and employees when they act as special agents within the meaning of
paragraph 5 of article 1903, supra, and that the chauffeur of the ambulance of the General
Hospital was not such an agent.
For the foregoing reasons, the judgment appealed from must be reversed, without costs in this
instance. Whether the Government intends to make itself legally liable for the amount of
damages above set forth, which the plaintiff has sustained by reason of the negligent acts of
one of its employees, by legislative enactment and by appropriating sufficient funds therefor,
we are not called upon to determine. This matter rests solely with the Legislature and not with
the courts.
Arellano,C.J.,Torres,Johnson,andMoreland,JJ., concur.

Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION

G.R. No. L-52179 April 8, 1991
MUNICIPALITY OF SAN FERNANDO, LA UNION, petitioner
vs.
HON. JUDGE ROMEO N. FIRME, JUANA RIMANDO-BANIA, IAUREANO BANIA, JR., SOR MARIETA
BANIA, MONTANO BANIA, ORJA BANIA, AND LYDIA R. BANIA, respondents.
MauroC.Cabading,Jr.forpetitioner.
SimeonG.Hipolforprivaterespondent.

MEDIALDEA, J.:p
This is a petition for certiorari with prayer for the issuance of a writ of preliminary mandatory
injunction seeking the nullification or modification of the proceedings and the orders issued by
the respondent Judge Romeo N. Firme, in his capacity as the presiding judge of the Court of
First Instance of La Union, Second Judicial District, Branch IV, Bauang, La Union in Civil Case No.
107-BG, entitled "Juana RimandoBania, et al. vs. MacarioNieveras, et al." dated November 4,
1975; July 13, 1976; August 23,1976; February 23, 1977; March 16, 1977; July 26, 1979;
September 7, 1979; November 7, 1979 and December 3, 1979 and the decision dated October
10, 1979 ordering defendants Municipality of San Fernando, La Union and Alfredo Bislig to pay,
jointly and severally, the plaintiffs for funeral expenses, actual damages consisting of the loss of
earning capacity of the deceased, attorney's fees and costs of suit and dismissing the complaint
against the Estate of MacarioNieveras and Bernardo Balagot.
The antecedent facts are as follows:
Petitioner Municipality of San Fernando, La Union is a municipal corporation existing under and
in accordance with the laws of the Republic of the Philippines. Respondent Honorable Judge
Romeo N. Firme is impleaded in his official capacity as the presiding judge of the Court of First
Instance of La Union, Branch IV, Bauang, La Union. While private respondents Juana Rimando-
Bania, LaureanoBania, Jr., Sor Marietta Bania, Montano Bania, OrjaBania and Lydia R.
Bania are heirs of the deceased LaureanoBania Sr. and plaintiffs in Civil Case No. 107-Bg
before the aforesaid court.
At about 7 o'clock in the morning of December 16, 1965, a collision occurred involving a
passenger jeepney driven by Bernardo Balagot and owned by the Estate of MacarioNieveras, a
gravel and sand truck driven by Jose Manandeg and owned by Tanquilino Velasquez and a
dump truck of the Municipality of San Fernando, La Union and driven by Alfredo Bislig. Due to
the impact, several passengers of the jeepney including LaureanoBania Sr. died as a result of
the injuries they sustained and four (4) others suffered varying degrees of physical injuries.
On December 11, 1966, the private respondents instituted a compliant for damages against the
Estate of MacarioNieveras and Bernardo Balagot, owner and driver, respectively, of the
passenger jeepney, which was docketed Civil Case No. 2183 in the Court of First Instance of La
Union, Branch I, San Fernando, La Union. However, the aforesaid defendants filed a Third Party
Complaint against the petitioner and the driver of a dump truck of petitioner.
Thereafter, the case was subsequently transferred to Branch IV, presided over by respondent
judge and was subsequently docketed as Civil Case No. 107-Bg. By virtue of a court order dated
May 7, 1975, the private respondents amended the complaint wherein the petitioner and its
regular employee, Alfredo Bislig were impleaded for the first time as defendants. Petitioner
filed its answer and raised affirmative defenses such as lack of cause of action, non-suability of
the State, prescription of cause of action and the negligence of the owner and driver of the
passenger jeepney as the proximate cause of the collision.
In the course of the proceedings, the respondent judge issued the following questioned orders,
to wit:
(1) Order dated November 4, 1975 dismissing the cross-claim against Bernardo
Balagot;
(2) Order dated July 13, 1976 admitting the Amended Answer of the Municipality
of San Fernando, La Union and Bislig and setting the hearing on the affirmative
defenses only with respect to the supposed lack of jurisdiction;
(3) Order dated August 23, 1976 deferring there resolution of the grounds for the
Motion to Dismiss until the trial;
(4) Order dated February 23, 1977 denying the motion for reconsideration of the
order of July 13, 1976 filed by the Municipality and Bislig for having been filed out
of time;
(5) Order dated March 16, 1977 reiterating the denial of the motion for
reconsideration of the order of July 13, 1976;
(6) Order dated July 26, 1979 declaring the case deemed submitted for decision it
appearing that parties have not yet submitted their respective memoranda despite
the court's direction; and
(7) Order dated September 7, 1979 denying the petitioner's motion for
reconsideration and/or order to recall prosecution witnesses for cross
examination.
On October 10, 1979 the trial court rendered a decision, the dispositive portion is hereunder
quoted as follows:
IN VIEW OF ALL OF (sic) THE FOREGOING, judgment is hereby rendered for the
plaintiffs, and defendants Municipality of San Fernando, La Union and Alfredo Bislig
are ordered to pay jointly and severally, plaintiffs Juana Rimando-Bania, Mrs.
Priscilla B. Surell, LaureanoBania Jr., Sor Marietta Bania, Mrs. Fe B. Soriano,
Montano Bania, OrjaBania and Lydia B. Bania the sums of P1,500.00 as funeral
expenses and P24,744.24 as the lost expected earnings of the late LaureanoBania
Sr., P30,000.00 as moral damages, and P2,500.00 as attorney's fees. Costs against
said defendants.
The Complaint is dismissed as to defendants Estate of MacarioNieveras and
Bernardo Balagot.
SO ORDERED. (Rollo, p. 30)
Petitioner filed a motion for reconsideration and for a new trial without prejudice to another
motion which was then pending. However, respondent judge issued another order dated
November 7, 1979 denying the motion for reconsideration of the order of September 7, 1979
for having been filed out of time.
Finally, the respondent judge issued an order dated December 3, 1979 providing that if
defendants municipality and Bislig further wish to pursue the matter disposed of in the order of
July 26, 1979, such should be elevated to a higher court in accordance with the Rules of Court.
Hence, this petition.
Petitioner maintains that the respondent judge committed grave abuse of discretion amounting
to excess of jurisdiction in issuing the aforesaid orders and in rendering a decision.
Furthermore, petitioner asserts that while appeal of the decision maybe available, the same is
not the speedy and adequate remedy in the ordinary course of law.
On the other hand, private respondents controvert the position of the petitioner and allege that
the petition is devoid of merit, utterly lacking the good faith which is indispensable in a petition
for certiorari and prohibition. (Rollo,
p. 42.) In addition, the private respondents stress that petitioner has not considered that every
court, including respondent court, has the inherent power to amend and control its process and
orders so as to make them conformable to law and justice. (Rollo, p. 43.)
The controversy boils down to the main issue of whether or not the respondent court
committed grave abuse of discretion when it deferred and failed to resolve the defense of non-
suability of the State amounting to lack of jurisdiction in a motion to dismiss.
In the case at bar, the respondent judge deferred the resolution of the defense of non-suability
of the State amounting to lack of jurisdiction until trial. However, said respondent judge failed
to resolve such defense, proceeded with the trial and thereafter rendered a decision against
the municipality and its driver.
The respondent judge did not commit grave abuse of discretion when in the exercise of its
judgment it arbitrarily failed to resolve the vital issue of non-suability of the State in the guise of
the municipality. However, said judge acted in excess of his jurisdiction when in his decision
dated October 10, 1979 he held the municipality liable for the quasi-delict committed by its
regular employee.
The doctrine of non-suability of the State is expressly provided for in Article XVI, Section 3 of the
Constitution, to wit: "the State may not be sued without its consent."
Stated in simple parlance, thegeneralruleisthattheStatemaynotbesuedexcept whenit
givesconsenttobesued. Consent takes the form of express or implied consent.
Express consent may be embodied in a general law or a special law. The standing consent of the
State to be sued in case of money claims involving liability arising from contracts is found in Act
No. 3083. A special law may be passed to enable a person to sue the government for an alleged
quasi-delict, as in Merritt v. Government of the Philippine Islands (34 Phil 311). (see United
States of America v. Guinto, G.R. No. 76607, February 26, 1990, 182 SCRA 644, 654.)
Consent is implied when the government enters into business contracts, thereby descending to
the level of the other contracting party, and also when the State files a complaint, thus opening
itself to a counterclaim. (Ibid)
Municipal corporations, for example, like provinces and cities, are agencies of the State when
they are engaged in governmental functions and therefore should enjoy the sovereign
immunity from suit. Nevertheless, they are subject to suit even in the performance of such
functions because their charter provided that they can sue and be sued. (Cruz, Philippine
PoliticalLaw, 1987 Edition, p. 39)
A distinction should first be made between suability and liability. "Suability depends on the
consent of the state to be sued, liability on the applicable law and the established facts. The
circumstance that a state is suable does not necessarily mean that it is liable; on the other
hand, it can never be held liable if it does not first consent to be sued. Liability is not conceded
by the mere fact that the state has allowed itself to be sued. When the state does waive its
sovereign immunity, it is only giving the plaintiff the chance to prove, if it can, that the
defendant is liable." (United States of America vs. Guinto, supra, p. 659-660)
Anent the issue of whether or not the municipality is liable for the torts committed by its
employee, the test of liability of the municipality depends on whether or not the driver, acting
in behalf of the municipality, is performing governmental or proprietary functions. As
emphasized in the case of Torio vs. Fontanilla (G. R. No. L-29993, October 23, 1978. 85 SCRA
599, 606), the distinction of powers becomes important for purposes of determining the
liability of the municipality for the acts of its agents which result in an injury to third persons.
Another statement of the test is given in City of Kokomo vs. Loy, decided by the Supreme Court
of Indiana in 1916, thus:
Municipal corporations exist in a dual capacity, and their functions are twofold. In
one they exercise the right springing from sovereignty, and while in the
performance of the duties pertaining thereto, their acts are political and
governmental. Their officers and agents in such capacity, though elected or
appointed by them, are nevertheless public functionaries performing a public
service, and as such they are officers, agents, and servants of the state. In the
other capacity the municipalities exercise a private, proprietary or corporate right,
arising from their existence as legal persons and not as public agencies. Their
officers and agents in the performance of such functions act in behalf of the
municipalities in their corporate or individual capacity, and not for the state or
sovereign power." (112 N.E., 994-995) (Ibid, pp. 605-606.)
It has already been remarked that municipal corporations are suable because their charters
grant them the competence to sue and be sued. Nevertheless, they are generally not liable for
torts committed by them in the discharge of governmental functions and can be held
answerable only if it can be shown that they were acting in a proprietary capacity. In permitting
such entities to be sued, the State merely gives the claimant the right to show that the
defendant was not acting in its governmental capacity when the injury was committed or that
the case comes under the exceptions recognized by law. Failing this, the claimant cannot
recover. (Cruz, supra, p. 44.)
In the case at bar, the driver of the dump truck of the municipality insists that "he was on his
way to the Naguilian river to get a load of sand and gravel for the repair of San Fernando's
municipal streets." (Rollo, p. 29.)
In the absence of any evidence to the contrary, the regularity of the performance of official
duty is presumed pursuant to Section 3(m) of Rule 131 of the Revised Rules of Court. Hence,
We rule that the driver of the dump truck was performing duties or tasks pertaining to his
office.
We already stressed in the case of Palafox,et. al. vs. ProvinceofIlocosNorte, the District
Engineer, and the Provincial Treasurer (102 Phil 1186) that "the construction or maintenance of
roads in which the truck and the driver worked at the time of the accident are admittedly
governmental activities."
After a careful examination of existing laws and jurisprudence, We arrive at the conclusion that
themunicipalitycannotbeheldliableforthetortscommittedbyitsregularemployee,whowas
thenengagedinthedischargeofgovernmentalfunctions. Hence, the death of the passenger
tragic and deplorable though it may be imposed on the municipality no duty to pay
monetary compensation.
All premises considered, the Court is convinced that the respondent judge's dereliction in failing
to resolve the issue of non-suability did not amount to grave abuse of discretion. But said judge
exceeded his jurisdiction when it ruled on the issue of liability.
ACCORDINGLY, the petition is GRANTED and the decision of the respondent court is hereby
modified, absolving the petitioner municipality of any liability in favor of private respondents.
SO ORDERED.
Narvasa,Cruz,GancaycoandGrio-Aquino,JJ.,concur.

Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. L-33112 June 15, 1978
PHILIPPINE NATIONAL BANK, petitioner,
vs.
HON. JUDGE JAVIER PABALAN, Judge of the Court of First Instance, Branch III, La Union, AGOO
TOBACCO PLANTERS ASSOCIATION, INC., PHILIPPINE VIRGINIA TOBACCO ADMINISTRATION, and
PANFILO P. JIMENEZ, Deputy Sheriff, La Union, respondents.
ConradoE.Medina,EdgardoM.Magtalas&WalfridoClimacoforpetitioner.
FelimonA.AspirinfitrespondentAgoo'TobaccoPlantersAssociation,Inc.
VirgilioC.AbejoforrespondentPhil.VirginiaTobaccoAdministration.

FERNANDO, ActingC.J.:
The reliance of petitioner Philippine National Bank in this certiorari and prohibition proceeding
against respondent Judge Javier Pabalan who issued a writ of execution,
1
followed thereafter
by a notice of garnishment of the funds of respondent Philippine Virginia Tobacco
Administration,
2
deposited with it, is on the fundamental constitutional law doctrine of non-
suability of a state, it being alleged that such funds are public in character. This is not the first
time petitioner raised that issue. It did so before in Philippine National Bank v. Court of
industrial Relations,
3
decided only last January. It did not meet with success, this Court ruling in
accordance with the two previous cases of National Shipyard and Steel Corporation
4
and
Manila Hotel Employees Association v. Manila Hotel Company,
5
that funds of public
corporations which can sue and be sued were not exempt from garnishment. As respondent
Philippine Virginia Tobacco Administration is likewise a public corporation possessed of the
same attributes,
6
a similar outcome is indicated. This petition must be dismissed.
It is undisputed that the judgment against respondent Philippine Virginia Tobacco
Administration had reached the stage of finality. A writ of execution was, therefore, in order. It
was accordingly issued on December 17, 1970.
7
There was a notice of garnishment for the full
amount mentioned in such writ of execution in the sum of P12,724,66.
8
In view of the
objection, however, by petitioner Philippine National Bank on the above ground, coupled with
an inquiry as to whether or not respondent Philippine Virginia Tobacco Administration had
funds deposited with petitioner's La Union branch, it was not until January 25, 1971 that the
order sought to be set aside in this certiorari proceeding was issued by respondent Judge.
9
Its
dispositive portion reads as follows: Conformably with the foregoing, it is now ordered, in
accordance with law, that sufficient funds of the Philippine Virginia Tobacco Administration now
deposited with the Philippine National Bank, La Union Branch, shall be garnished and delivered
to the plaintiff immediately to satisfy the Writ of Execution for one-half of the amount awarded
in the decision of November 16, 1970."
10
Hence this certiorari and prohibition proceeding.
As noted at the outset, petitioner Philippine National Bank would invoke the doctrine of non-
suability. It is to be admitted that under the present Constitution, what was formerly implicit as
a fundamental doctrine in constitutional law has been set forth in express terms: "The State
may not be sued without its consent."
11
If the funds appertained to one of the regular
departments or offices in the government, then, certainly, such a provision would be a bar to
garnishment. Such is not the case here. Garnishment would lie. Only last January, as noted in
the opening paragraph of this decision, this Court, in a case brought by the same petitioner
precisely invoking such a doctrine, left no doubt that the funds of public corporations could
properly be made the object of a notice of garnishment. Accordingly, this petition must fail.
1. The alleged grave abuse of discretion, the basis of this certiorari proceeding, was sought to
be justified on the failure of respondent Judge to set aside the notice of garnishment of funds
belonging to respondent Philippine Virginia Tobacco Administration. This excerpt from the
aforecited decision ofPhilippineNationalBankv. CourtofIndustrialRelationsmakes manifest
why such an argument is far from persuasive. "The premise that the funds could be spoken as
public character may be accepted in the sense that the People Homesite and Housing
Corporation was a government-owned entity. It does not follow though that they were exempt.
from garnishment. National Shipyard and Steel Corporation v. Court of Industrial Relations is
squarely in point. As was explicitly stated in the opinion of the then Justice, later Chief Justice,
Concepcion: "The allegation to the effect that the funds of the NASSCO are public funds of the
government, and that, as such, the same may not be garnished, attached or levied upon, is
untenable for, as a government owned and controlled corporation, the NASSCO has a
personality of its own. distinct and separate from that of the Government. It has pursuant to
Section 2 of Executive Order No. 356, dated October 23, 1950 ... , pursuant to which The
NASSCO has been established all the powers of a corporation under the Corporation Law ... ."
Accordingly, it may be sue and be sued and may be subjected to court processes just like any
other corporation (Section 13, Act No. 1459, as amended.)" ... To repeat, the ruling was the
appropriate remedy for the prevailing party which could proceed against the funds of a
corporate entity even if owned or controlled by the government."
12

2. The National Shipyard and Steel Corporation decision was not the first of its kind. The ruling
therein could be inferred from the judgment announced in Manila Hotel Employees Association
v. Manila Hotel Company, decided as far back as 1941.
13
In the language of its ponente Justice
Ozaeta "On the other hand, it is well-settled that when the government enters into commercial
business, it abandons its sovereign capacity and is to be treated like any other corporation.
(Bank of the United States v. Planters' Bank, 9 Wheat. 904, 6 L.ed. 244). By engaging in a
particular business thru the instrumentality of a corporation, the government divests itself pro
hacvice of its sovereign character, so as to render the corporation subject to the rules of law
governing private corporations."
14
It is worth mentioning that Justice Ozaeta could find support
for such a pronouncement from the leading American Supreme Court case of united Statesv.
Planters'Bank,
15
with the opinion coming from the illustrious Chief Justice Marshall. It was
handed down more than one hundred fifty years ago, 1824 to be exact. It is apparent,
therefore, that petitioner Bank could it legally set forth as a bar or impediment to a notice of
garnishment the doctrine of non-suability.
WHEREFORE, this petition for certiorari and prohibition is dismissed. No costs.
Barredo,Antonio,Aquino,andSantos,JJ.,concur.
Concepcion,Jr.,J.,isonleave.

Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. L-55273-83 December 19, 1981
GAUDENCIO RAYO, BIENVINIDO PASCUAL, TOMAS MANUEL, MARIANO CRUZ, PEDRO
BARTOLOME, BERNARDINO CRUZ JOSE PALAD , LUCIO FAJARDO, FRANCISCO RAYOS, ANGEL
TORRES, NORBERTO TORRES, RODELIO JOAQUIN, PEDRO AQUINO, APOLINARIO BARTOLOME,
MAMERTO BERNARDO, CIRIACO CASTILLO, GREGORIO CRUZ, SIMEON ESTRELLA, EPIFANIO
MARCELO, HERMOGENES SAN PEDRO, JUAN SANTOS, ELIZABETH ABAN, MARCELINA BERNABE,
BUENAVENTURA CRUZ, ANTONIO MENESES, ROMAN SAN PEDRO, LOPEZ ESPINOSA, GODOFREDO
PUNZAL, JULIANA GARCIA, LEBERATO SARMIENTO, INOCENCIO DE LEON, CARLOS CORREA,
REYNALDO CASIMIRO, ANTONIO GENER, GAUDENCIO CASTILLO, MATIAS PEREZ, CRISPINIANO
TORRES, CRESENCIO CRUZ, PROTACIO BERNABE, MARIANO ANDRES, CRISOSTOMO CRUZ,
MARCOS EUSTAQUIO, PABLO LEGASPI, VICENTE PASCUAL, ALEJANDRA SISON, EUFRACIO TORRES,
ROGELIO BARTOLOME, RODOLFO BERNARDO, APOLONIO CASTILLO, MARCELINO DALMACIO,
EUTIQUIO LEGASPI, LORENZO LUCIANO and GREGORIO PALAD,petitioners,
vs.
COURT OF FIRST INSTANCE OF BULACAN, BRANCH V, STA. MARIA, and NATIONAL POWER
CORPORATION, respondents.

ABAD SANTOS, J.:
The relevant antecedents of this case are narrated in the petition and have not been
controverted, namely:
3. At about midnight on October 26, 1978, during the height of that infamous
typhoon "KADING" the respondent corporation, acting through its plant
superintendent, Benjamin Chavez, opened or caused to be opened simultaneously
all the three floodgates of the Angat Dam. And as a direct and immediate result of
the sudden, precipitate and simultaneous opening of said floodgates several towns
in Bulacan were inundated. Hardest-hit was Norzagaray. About a hundred of its
residents died or were reported to have died and properties worth million of pesos
destroyed or washed away. This flood was unprecedented in Norzagaray.
4. Petitioners, who were among the many unfortunate victims of that man-caused
flood, filed with the respondent Court eleven complaints for damages against the
respondent corporation and the plant superintendent of Angat Dam, Benjamin
Chavez, docketed as Civil Cases Nos. SM-950 951, 953, 958, 959, 964, 965, 966,
981, 982 and 983. These complaints though separately filed have a
common/similar cause of action. ...
5. Respondent corporation filed separate answers to each of these eleven
complaints. Apart from traversing the material averments in the complaints and
setting forth counterclaims for damages respondent corporation invoked in each
answer a special and affirmative defense that "in the operation of the Angat Dam,"
it is "performing a purely governmental function", hence it "can not be sued
without the express consent of the State." ...
6. On motion of the respondent corporation a preliminary hearing was held on its
affirmative defense as though a motion to dismiss were filed. Petitioners opposed
the prayer for dismissal and contended that respondent corporation is performing
not governmental but merely proprietaryfunctions and that under its own organic
act, Section 3 (d) of Republic Act No. 6395, it can sue and be sued in any court. ...
7. On July 29, 1980 petitioners received a copy of the questioned order of the
respondent Court dated December 21, 1979 dismissing all their complaints as
against the respondent corporation thereby leaving the superintendent of the
Angat Dam, Benjamin Chavez, as the sole party-defendant. ...
8. On August 7, 1980 petitioners filed with the respondent Court a motion for
reconsideration of the questioned order of dismissal. ...
9. The respondent Court denied petitioners' motion for reconsideration in its order
dated October 3, 1980. ... Hence, the present petition for review on certiorari
under Republic Act No. 5440. (Rollo, pp. 3-6.)
The Order of dismissal dated December 12, 1979, reads as follows:
Under consideration is a motion to dismiss embodied as a special affirmative
defense in the answer filed by defendant NPC on the grounds that said defendant
performs a purely governmental function in the operation of the Angat Dam and
cannot therefore be sued for damages in the instant cases in connection
therewith.
Plaintiffs' opposition to said motion to discuss, relying on Sec. 3 (d) of Republic Act
6396 which imposes on the NPC the power and liability to sue and be sued in any
court, is not tenable since the same refer to such matters only as are within the
scope of the other corporate powers of said defendant and not matters of tort as
in the instant cases. It being an agency performing a purely governmental function
in the operation of the Angat Dam, said defendant was not given any right to
commit wrongs upon individuals. To sue said defendant for tort may require the
express consent of the State.
WHEREFORE, the cases against defendant NPC are hereby dismissed. (Rollo, p. 60.)
The Order dated October 3, 1980, denying the motion for reconsideration filed by the plaintiffs
is proforma;the motion was simply denied for lack of merit. (Rollo, p. 74.)
The petition to review the two orders of the public respondent was filed on October 16, 1980,
and on October 27, 1980, We required the respondents to comment. It was only on April 13,
1981, after a number of extensions, that the Solicitor General filed the required comment.
(Rollo, pp. 107-114.)
On May 27, 1980, We required the parties to file simultaneous memoranda within twenty (20)
days from notice. (Rollo, p. 115.) Petitioners filed their memorandum on July 22, 1981. (Rollo,
pp. 118-125.) The Solicitor General filed a number of motions for extension of time to file his
memorandum. We granted the seventh extension with a warning that there would be no
further extension. Despite the warning the Solicitor General moved for an eighth extension
which We denied on November 9, 1981. A motion for a ninth extension was similarly denied on
November 18, 1981. The decision in this case is therefore, without the memorandum of the
Solicitor General.
The parties are agreed that the Order dated December 21, 1979, raises the following issues:
1. Whether respondent National Power Corporation performs a governmental function with
respect to the management and operation of the Angat Dam; and
2. Whether the power of respondent National Power Corporation to sue and be sued under its
organic charter includes the power to be sued for tort.
The petition is highly impressed with merit.
It is not necessary to write an extended dissertation on whether or not the NPC performs a
governmental function with respect to the management and operation of the Angat Dam. It is
sufficient to say that the government has organized a private corporation, put money in it and
has allowed it to sue and be sued in any court under its charter. (R.A. No. 6395, Sec. 3 (d).) As a
government owned and controlled corporation, it has a personality of its own, distinct and
separate from that of the Government. (See National Shipyards and Steel Corp. vs. CIR, et al., L-
17874, August 31, 1963, 8 SCRA 781.) Moreover, the charter provision that the NPC can "sue
and be sued in any court" is without qualification on the cause of action and accordingly it can
include a tort claim such as the one instituted by the petitioners.
WHEREFORE, the petition is hereby granted; the Orders of the respondent court dated
December 12, 1979 and October 3, 1980, are set aside; and said court is ordered to reinstate
the complaints of the petitioners. Costs against the NPC.
SO ORDERED.
Barredo(Chairman),Aquino,DeCastro,ErictaandEscolinJJ.,concur.
ConcepcionJr.,J.,isonleave.

Republic of the Philippines
SUPREME COURT
Manila
EN BANC

G.R. No. 84607 March 19, 1993
REPUBLIC OF THE PHILIPPINES, GEN. RAMON MONTANO, GEN. ALFREDO LIM, GEN. ALEXANDER
AGUIRRE, COL. EDGAR DULA TORRES, COL. CEZAR NAZARENO, MAJ. FILEMON GASMEN, PAT.
NICANOR ABANDO, PFC SERAFIN CEBU, JR., GEN. BRIGIDO PAREDES, COL. ROGELIO MONFORTE,
PFC ANTONIO LUCERO, PAT. JOSE MENDIOLA, PAT. NELSON TUASON, POLICE CORPORAL PANFILO
ROGOS, POLICE LT. JUAN B. BELTRAN, PAT. NOEL MANAGBAO, MARINE THIRD CLASS TRAINEE
(3CT) NOLITO NOGATO, 3CT ALEJANDRO B. NAGUIO, JR., EFREN ARCILLAS, 3CT AGERICO LUNA,
3CT BASILIO BORJA, 3CT MANOLITO LUSPO, 3CT CRISTITUTO GERVACIO, 3CT MANUEL DELA
CRUZ, JR., MARINE (CDC) BN., (CIVIL DISTURBANCE CONTROL), MOBILE DISPERSAL TEAM (MDT),
LT. ROMEO PAQUINTO, LT. LAONGLAANG GOCE, MAJ. DEMETRIO DE LA CRUZ, POLICE CAPTAIN
RODOLFO NAVAL, JOHN DOE, RICHARD DOE, ROBERTO DOE AND OTHER DOES, petitioners,
vs.
HON. EDILBERTO G. SANDOVAL, Regional Trial Court of Manila, Branch IX, ERLINDA C. CAYLAO,
ANATALIA ANGELES PEREZ, MYRNA BAUTISTA, CIPRIANA EVANGELIO, ELMA GRAMPA, AMELIA
GUTIERREZ, NEMESIO LAKINDANUM, PURITA YUMUL, MIGUEL ARABE, TERESITA ARJONA,
RONALDO CAMPOMANES AND CARMENCITA ARDONI VDA. DE CAMPOMANES, ROGELIO
DOMUNICO, in their capacity as heirs of the deceased (ROBERTO C. CAYLAO, SONNY "BOY"
PEREZ, DIONESIO BAUTISTA, DANTE EVANGELIO, ADELFA ARIBE, DANILO ARJONA, VICENTE
CAMPOMANES, RONILO DOMUNICO) respectively; and (names of sixty-two injured victims) EDDIE
AGUINALDO, FELICISIMO ALBASIA, NAPOLEON BAUTISTA, DANILO CRUZ, EDDIE MENSOLA,
ALBERT PITALBO, VICENTE ROSEL, RUBEN CARRIEDO, JOY CRUZ, HONORIO LABAMBA, JR., EFREN
MACARAIG, SOLOMON MANALOTO, ROMEO DURAN, NILO TAGUBAT, JUN CARSELLAR, JOEY
CLEMENTE, GERARDO COYOCA, LUISITO DACO, BENJAMIN DELA CRUZ, ARTHUR FONTANILLA,
WILSON GARCIA, CARLOS SIRAY, JOSE PERRAS, TOMAS VALLOS, ARNOLD ENAJE, MARIANITA
DIMAPILIS, FRANCISCO ANGELES, MARCELO ESGUERRA, JOSE FERRER, RODEL DE GUIA, ELVIS
MENDOZA, VICTORIANO QUIJANO, JOEY ADIME, RESIENO ADUL, ALBERTO TARSONA, CARLOS
ALCANTARA, MAMERTO ALIAS, EMELITO ALMONTE, BENILDA ALONUEVO, EMMA ABADILLO,
REYNALDO CABALLES, JR., JAIME CALDETO, FABIAN CANTELEJO, RODRIGO CARABARA, ENRIQUE
DELGADO, JUN DELOS SANTOS, MARIO DEMASACA, FRANCISCO GONZALES, ERNESTO GONZALES,
RAMIRO JAMIL, JUAN LUCENA, PERLITO SALAYSAY, JOHNNY SANTOS, MARCELO SANTOS, EMIL
SAYAO, BAYANI UMALI, REMIGIO MAHALIN, BONG MANLULO, ARMANDO MATIENZO, CARLO
MEDINA, LITO NOVENARIO, and ROSELLA ROBALE, respondents.
G.R. No. 84645 March 19, 1993
ERLINDA C. CAYLAO, ANATALIA ANGELES PEREZ, MYRNA BAUTISTA, CIPRIANA EVANGELIO, ELMA
GRAMPA, AMELIA GUTIERREZ, NEMESIO LAKINDANUM, PURITA YUMUL, MIGUEL ARABE,
TERESITA ARJONA, RONALDO CAMPOMANES AND CARMENCITA ARDONI VDA. DE
CAMPOMANES, ROGELIO DOMUNICO, in their capacity as heirs of the deceased (ROBERTO C.
CAYLAO, SONNY "BOY" PEREZ, DIONESIO GRAMPA, ANGELITO GUTIERREZ, BERNABE
LAKINDANUM, ROBERTO YUMUL, LEOPOLDO ALONZO, ADELFA ARIBE, DANILO ARJONA, VICENTE
CAMPOMANES, RONILO DOMUNICO) respectively; and (names of sixty-two injured victims) EDDIE
AGUINALDO, FELICISIMO ALBASIA, NAPOLEON BAUTISTA, DANILO CRUZ, EDDIE MENSOLA,
ALBERT PITALBO, VICENTE ROSEL, RUBEN CARRIEDO, JOY CRUZ, HONORIO LABAMBA, JR. EFREN
MACARAIG, SOLOMON MANALOTO, ROMEO DURAN, NILO TAGUBAT, JUN CARSELLAR, JOEY
CLEMENTE, GERARDO COYOCA, LUISITO DACO, BENJAMIN DELA CRUZ, ARTHUR FONTANILLA,
WILSON GARCIA, CARLOS SIRAY, JOSE PERRAS TOMAS VALLOS, ARNOLD ENAJE, MARIANITA
DIMAPILIS, FRANCISCO ANGELES, MARCELO ESGUERRA, JOSE FERRER, RODEL DE GUIA, ELVIS
MENDOZA, VICTORINO QUIJANO, JOEY ADIME, RESIENO ADUL, ALBERTO TARSONA, CARLOS
ALCANTARA, MAMERTO ALIAS, EMELITO ALMONTE, BENILDA ALONUEVO, EMMA ABADILLO,
REYNALDO CABALLES, JR., JAIME CALDETO, FABIAN CANTELEJO, RODRIGO CARABARA, ENRIQUE
DELGADO, JUN DELOS SANTOS, MARIO DEMASACA, FRANCISCO GONZALES, ERNESTO GONZALES,
RAMIRO JAMIL, JUAN LUCENA, PERLITO SALAYSAY, JOHNNY SANTOS, MARCELO SANTOS, EMIL
SAYAO, BAYANI UMALI, REMIGIO MAHALIN, BONG MANLULO, ARMANDO MATIENZO, CARLO
MEDINA, LITO NOVENARIO, ROSELLA ROBALE, petitioners,
vs.
REPUBLIC OF THE PHILIPPINES, and HONORABLE EDILBERTO G. SANDOVAL, Regional Trial Court
of Manila, Branch 9, respondents.
TheSolicitorGeneralfortheRepublicofthePhilippines.
StructuralAlternativeLegalAssistanceforGrassrootsforpetitionersin84645&private
respondentsin84607.

CAMPOS, JR., J.:
People may have already forgotten the tragedy that transpired on January 22, 1987. It is quite
ironic that then, some journalists called it a Black Thursday, as a grim reminder to the nation of
the misfortune that befell twelve (12) rallyists. But for most Filipinos now, the Mendiola massacre
may now just as well be a chapter in our history books. For those however, who have become
widows and orphans, certainly they would not settle for just that. They seek retribution for the
lives taken that will never be brought back to life again.
Hence, the heirs of the deceased, together with those injured (Caylao group), instituted this
petition, docketed as G.R. No. 84645, under Section 1 of Rule 65 of the Rules of Court, seeking
the reversal and setting aside of the Orders of respondent Judge Sandoval,
1
dated May 31 and
August 8, 1988, dismissing the complaint for damages of herein petitioners against the Republic
of the Philippines in Civil Case No. 88-43351.
Petitioner, the Republic of the Philippines, through a similar remedy, docketed as G.R. No. 84607,
seeks to set aside the Order of respondent Judge dated May 31, 1988, in Civil Case No. 88-43351
entitled "ErlindaCaylao, et al. vs. Republic of the Philippines, et al."
The pertinent portion of the questioned Order
2
dated May 31, 1988, reads as follows:
With respect however to the other defendants, the impleaded Military Officers,
since they are being charged in their personal and official capacity, and holding them
liable, if at all, would not result in financial responsibility of the government, the
principle of immunity from suit can not conveniently and correspondingly be applied
to them.
WHEREFORE, the case as against the defendant Republic of the Philippines is hereby
dismissed. As against the rest of the defendants the motion to dismiss is denied.
They are given a period of ten (10) days from receipt of this order within which to
file their respective pleadings.
On the other hand, the Order
3
, dated August 8, 1988, denied the motions filed by both parties,
for a reconsideration of the abovecited Order, respondent Judge finding no cogent reason to
disturb the said order.
The massacre was the culmination of eight days and seven nights of encampment by members of
the militant KilusangMagbubukidsaPilipinas (KMP) at the then Ministry (now Department) of
Agrarian Reform (MAR) at the Philippine Tobacco Administration Building along Elliptical Road in
Diliman, Quezon City.
The farmers and their sympathizers presented their demands for what they called "genuine
agrarian reform". The KMP, led by its national president, Jaime Tadeo, presented their problems
and demands, among which were: (a) giving lands for free to farmers; (b) zero retention of lands
by landlords; and (c) stop amortizations of land payments.
The dialogue between the farmers and the MAR officials began on January 15, 1987. The two
days that followed saw a marked increase in people at the encampment. It was only on January
19, 1987 that Jaime Tadeo arrived to meet with then Minister Heherson Alvarez, only to be
informed that the Minister can only meet with him the following day. On January 20, 1987, the
meeting was held at the MAR conference room. Tadeo demanded that the minimum
comprehensive land reform program be granted immediately. Minister Alvarez, for his part, can
only promise to do his best to bring the matter to the attention of then President Aquino, during
the cabinet meeting on January 21, 1987.
Tension mounted the following day. The farmers, now on their seventh day of encampment,
barricaded the MAR premises and prevented the employees from going inside their offices. They
hoisted the KMP flag together with the Philippine flag.
At around 6:30 p.m. of the same day, Minister Alvarez, in a meeting with Tadeo and his leaders,
advised the latter to instead wait for the ratification of the 1987 Constitution and just allow the
government to implement its comprehensive land reform program. Tadeo, however, countered
by saying that he did not believe in the Constitution and that a genuine land reform cannot be
realized under a landlord-controlled Congress. A heated discussion ensued between Tadeo and
Minister Alvarez. This notwithstanding, Minister Alvarez suggested a negotiating panel from each
side to meet again the following day.
On January 22, 1987, Tadeo's group instead decided to march to Malacaang to air their
demands. Before the march started, Tadeo talked to the press and TV media. He uttered fiery
words, the most telling of which were:
". . . inalisnaminangbarikadabilangkahilinganngatingPresidente, perokinakailanganalisin din
niyaangbarikadasaMendiolasapagkatbubutasin din naminiyon at dadanakangdugo . . . ."
4

The farmers then proceeded to march to Malacaang, from Quezon Memorial Circle, at 10:00
a.m. They were later joined by members of other sectoral organizations such as the Kilusang
Mayo Uno (KMU), BagongAlyansangMakabayan (BAYAN), League of Filipino Students (LFS) and
KongresongPagkakaisangMaralitangLungsod (KPML).
At around 1:00 p.m., the marchers reached LiwasangBonifacio where they held a brief program. It
was at this point that some of the marchers entered the eastern side of the Post Office Building,
and removed the steel bars surrounding the garden. Thereafter, they joined the march to
Malacaang. At about 4:30 p.m., they reached C.M. Recto Avenue.
In anticipation of a civil disturbance, and acting upon reports received by the Capital Regional
Command (CAPCOM) that the rallyists would proceed to Mendiola to break through the police
lines and rush towards Malacaang, CAPCOM Commander General Ramon E. Montao inspected
the preparations and adequacy of the government forces to quell impending attacks.
OPLAN YELLOW (Revised) was put into effect. Task Force Nazareno under the command of Col.
Cesar Nazareno was deployed at the vicinity of Malacaang. The civil disturbance control units of
the Western Police District under Police Brigadier General Alfredo S. Lim were also activated.
Intelligence reports were also received that the KMP was heavily infiltrated by CPP/NPA elements
and that an insurrection was impending. The threat seemed grave as there were also reports that
San Beda College and Centro Escolar University would be forcibly occupied.
In its report, the Citizens' Mendiola Commission (a body specifically tasked to investigate the facts
surrounding the incident, Commission for short) stated that the government anti-riot forces were
assembled at Mendiola in a formation of three phalanges, in the following manner:
(1) The first line was composed of policemen from police stations Nos. 3, 4, 6, 7, 8, 9
and 10 and the Chinatown detachment of the Western Police District. PoliceColonel
EdgarDulaTorres, Deputy Superintendent of the Western Police District, was
designated as ground commander of the CDC first line of defense. The WPD CDC
elements were positioned at the intersection of Mendiola and Legarda Streets after
they were ordered to move forward from the top of Mendiola bridge. The WPD
forces were in khaki uniform and carried the standard CDC equipment aluminum
shields, truncheons and gas masks.
(2) At the second line of defense about ten (10) yards behind the WPD policemen
were the elements of the Integrated National Police (INP) Field Force stationed at
Fort Bonifacio from the 61st and 62nd INP Field Force, who carried also the standard
CDC equipment truncheons, shields and gas masks. The INP Field Force was under
thecommandofPoliceMajorDemetriodelaCruz.
(3) Forming the third line was the Marine Civil Disturbance Control Battalion
composed of the first and second companies of the Philippine Marines stationed at
Fort Bonifacio. The marines were all equipped with shields, truncheons and M-16
rifles (armalites) slung at their backs, underthecommandofMajorFelimonB.
Gasmin. The Marine CDC Battalion was positioned in line formation ten (10) yards
farther behind the INP Field Force.
At the back of the marines were four (4) 6 x 6 army trucks, occupying the entire
width of Mendiola street, followed immediately by two water cannons, one on each
side of the street and eight fire trucks, four trucks on each side of the street. The
eight fire trucks from Fire District I of Manila underFireSuperintendentMarioC.
Tanchanco, were to supply water to the two water cannons.
Stationed farther behind the CDC forces were the two Mobile Dispersal Teams
(MDT) each composed of two tear gas grenadiers, two spotters, an assistant
grenadier, a driver and the team leader.
In front of the College of the Holy Spirit near Gate 4 of Malacaang stood the VOLVO
Mobile Communications Van of the CommandingGeneralofCAPCOM/INP,General
RamonE.Montao. At this command post, after General Montao had conferred
with TFNazarenoCommander,ColonelCezarNazareno, about the adequacy and
readiness of his forces, it was agreed that PoliceGeneralAlfredoS.Lim would
designate PoliceColonelEdgarDulaTorresand PoliceMajorConradoFrancisco as
negotiators with the marchers. Police General Lim then proceeded to the WPD CDC
elements already positioned at the foot of Mendiola bridge to relay to Police Colonel
Torres and Police Major Francisco the instructions that the latter would negotiate
with the marchers.
5
(Emphasis supplied)
The marchers, at around 4:30 p.m., numbered about 10,000 to 15,000. From C.M. Recto Avenue,
they proceeded toward the police lines. No dialogue took place between the marchers and the
anti-riot squad. It was at this moment that a clash occurred and, borrowing the words of the
Commission "pandemonium broke loose". The Commission stated in its findings, to wit:
. . . There was an explosion followed by throwing of pillboxes, stones and bottles.
Steel bars, wooden clubs and lead pipes were used against the police. The police
fought back with their shields and truncheons. The police line was breached.
Suddenly shots were heard. The demonstrators disengaged from the government
forces and retreated towards C.M. Recto Avenue. But sporadic firing continued from
the government forces.
After the firing ceased, two MDTs headedbyLt.RomeoPaquinto and Lt.
LaonglaanGocesped towards Legarda Street and lobbed tear gas at the remaining
rallyist still grouped in the vicinity of Mendiola. After dispersing the crowd, the two
MDTs, together with the two WPD MDTs, proceeded to LiwasangBonifacio upon
orderofGeneralMontao to disperse the rallyists assembled thereat. Assisting the
MDTs were a number of policemen from the WPD, attired in civilian clothes with
white head bands, who were armed with long firearms.
6
(Emphasis ours)
After the clash, twelve (12) marchers were officially confirmed dead, although according to
Tadeo, there were thirteen (13) dead, but he was not able to give the name and address of said
victim. Thirty-nine (39) were wounded by gunshots and twelve (12) sustained minor injuries, all
belonging to the group of the marchers.
Of the police and military personnel, three (3) sustained gunshot wounds and twenty (20)
suffered minor physical injuries such as abrasions, contusions and the like.
In the aftermath of the confrontation, then President Corazon C. Aquino issued Administrative
Order No. 11,
7
(A.O. 11, for brevity) dated January 22, 1987, which created the Citizens' Mendiola
Commission. The body was composed of retired Supreme Court Justice Vicente Abad Santos as
Chairman, retired Supreme Court Justice Jose Y. Feria and Mr. Antonio U. Miranda, both as
members. A.O. 11 stated that the Commission was created precisely for the "purpose of
conducting an investigation of the disorder, deaths, and casualties that took place in the vicinity
of Mendiola Bridge and Mendiola Street and Claro M. Recto Avenue, Manila, in the afternoon of
January 22, 1987". The Commission was expected to have submitted its findings not later than
February 6, 1987. But it failed to do so. Consequently, the deadline was moved to February 16,
1987 by Administrative Order No. 13. Again, the Commission was unable to meet this deadline.
Finally, on February 27, 1987, it submitted its report, in accordance with Administrative Order No.
17, issued on February 11, 1987.
In its report, the Commission recapitulated its findings, to wit:
(1) The march to Mendiola of the KMP led by Jaime Tadeo, together with the other
sectoral groups, was not covered by any permit as required under Batas
PambansaBlg. 880, the Public Assembly Act of 1985, in violation of paragraph (a)
Section 13, punishable under paragraph (a), Section 14 of said law.
(2) The crowd dispersal control units of the police and the military were armed with
.38 and .45 caliber handguns, and M-16 armalites, which is a prohibited act under
paragraph 4(g), Section 13, and punishable under paragraph (b), Section 14 of Batas
PambansaBlg. 880.
(3) The security men assigned to protect the WPD, INP Field Force, the Marines and
supporting military units, as well as the security officers of the police and military
commanders were in civilianattireinviolation of paragraph (a), Section 10, Batas
Pambansa 880.
(4) There was unnecessary firing by the police and military crowd dispersal control
units in dispersing the marchers, a prohibited act under paragraph (e), Section 13,
and punishable under paragraph (b), Section 14, Batas PambansaBlg. 880.
(5) The carrying and use of steel bars, pillboxes, darts, lead pipe, wooden clubs with
spikes, and guns by the marchers as offensive weapons are prohibited acts
punishable under paragraph (g), Section 13, and punishable under paragraph (e),
Section 14 of Batas PambansaBlg. 880.
(6) The KMP farmers broke off further negotiations with the MAR officials and were
determined to march to Malacaang, emboldened as they are, by the inflammatory
and incendiary utterances of their leader, Jaime Tadeo
"bubutasinnaminangbarikada . . Dadanak and dugo . . . Angnagugutomnamagsasaka
ay gagawangsarilingbutas. . .
(7) There was no dialogue between the rallyists and the government forces. Upon
approaching the intersections of Legarda and Mendiola, the marchers began
pushing the police lines and penetrated and broke through the first line of the CDC
contingent.
(8) The police fought back with their truncheons and shields. They stood their
ground but the CDC line was breached. There ensued gunfire from both sides. It is
not clear who started the firing.
(9) At the onset of the disturbance and violence, the water cannons and tear gas
were not put into effective use to disperse the rioting crowd.
(10) The water cannons and fire trucks were not put into operation because (a)
there was no order to use them; (b) they were incorrectly prepositioned; and (c)
they were out of range of the marchers.
(11) Tear gas was not used at the start of the disturbance to disperse the rioters.
After the crowd had dispersed and the wounded and dead were being carried away,
the MDTs of the police and the military with their tear gas equipment and
components conducted dispersal operations in the Mendiola area and proceeded to
LiwasangBonifacio to disperse the remnants of the marchers.
(12) No barbed wire barricade was used in Mendiola but no official reason was given
for its absence.
8

From the results of the probe, the Commission recommended
9
the criminal prosecution of four
unidentified, uniformed individuals, shown either on tape or in pictures, firing at the direction of
the marchers. In connection with this, it was the Commission's recommendation that the
National Bureau of Investigation (NBI) be tasked to undertake investigations regarding the
identities of those who actually fired their guns that resulted in the death of or injury to the
victims of the incident. The Commission also suggested that all the commissioned officers of both
the Western Police District and the INP Field Force, who were armed during the incident, be
prosecuted for violation of paragraph 4(g) of Section 13, Batas PambansaBlg. 880, the Public
Assembly Act of 1985. The Commission's recommendation also included the prosecution of the
marchers, for carrying deadly or offensive weapons, but whose identities have yet to be
established. As for Jaime Tadeo, the Commission said that he should be prosecuted both for
violation of paragraph (a), Section 13, Batas PambansaBlg. 880 for holding the rally without a
permit and for violation of Article 142, as amended, of the Revised Penal Code for inciting to
sedition. As for the following officers, namely: (1) Gen. Ramon E. Montao; (2) Police Gen.
Alfredo S. Lim; (3) Police Gen. Edgar Dula Torres; (4) Police Maj. Demetrio dela Cruz; (5) Col.
CezarNazareno; and (5) Maj. FelimonGasmin, for their failure to make effective use of their skill
and experience in directing the dispersal operations in Mendiola, administrative sanctions were
recommended to be imposed.
The last and the most significant recommendation of the Commission was for the deceased and
wounded victims of the Mendiola incident to be compensated by the government. It was this
portion that petitioners (Caylao group) invoke in their claim for damages from the government.
Notwithstanding such recommendation, no concrete form of compensation was received by the
victims. Thus, on July 27, 1987, herein petitioners, (Caylao group) filed a formal letter of demand
for compensation from the Government.
10
This formal demand was indorsed by the office of the
Executive Secretary to the Department of Budget and Management (DBM) on August 13, 1987.
The House Committee on Human Rights, on February 10, 1988, recommended the expeditious
payment of compensation to the Mendiola victims.
11

After almost a year, on January 20, 1988, petitioners (Caylao group) were constrained to institute
an action for damages against the Republic of the Philippines, together with the military officers,
and personnel involved in the Mendiola incident, before the trial court. The complaint was
docketed as Civil Case No. 88-43351.
On February 23, 1988, the Solicitor General filed a Motion to Dismiss on the ground that the State
cannot be sued without its consent. Petitioners opposed said motion on March 16, 1988,
maintaining that the State has waived its immunity from suit and that the dismissal of the instant
action is contrary to both the Constitution and the International Law on Human Rights.
Respondent Judge Sandoval, in his first questioned Order, dismissed the complaint as against the
Republic of the Philippines on the ground that there was no waiver by the State. Petitioners
(Caylao group) filed a Motion for Reconsideration therefrom, but the same was denied by
respondent judge in his Order dated August 8, 1988. Consequently, Caylao and her co-petitioners
filed the instant petition.
On the other hand, the Republic of the Philippines, together with the military officers and
personnel impleaded as defendants in the court below, filed its petition for certiorari.
Having arisen from the same factual beginnings and raising practically identical issues, the two (2)
petitions were consolidated and will therefore be jointly dealt with and resolved in this Decision.
The resolution of both petitions revolves around the main issue of whether or not the State has
waived its immunity from suit.
Petitioners (Caylao group) advance the argument that the State has impliedly waived its
sovereign immunity from suit. It is their considered view that by the recommendation made by
the Commission for the government to indemnify the heirs and victims of the Mendiola incident
and by the public addresses made by then President Aquino in the aftermath of the killings, the
State has consented to be sued.
Under our Constitution the principle of immunity of the government from suit is expressly
provided in Article XVI, Section 3. The principle is based on the very essence of sovereignty, and
on the practical ground that there can be no legal right as against the authority that makes the
law on which the right depends.
12
It also rests on reasons of public policy that public service
would be hindered, and the public endangered, if the sovereign authority could be subjected to
law suits at the instance of every citizen and consequently controlled in the uses and dispositions
of the means required for the proper administration of the government.
13

This is not a suit against the State with its consent.
Firstly, the recommendation made by the Commission regarding indemnification of the heirs of
the deceased and the victims of the incident by the government does not in any way mean that
liability automatically attaches to the State. It is important to note that A.O. 11 expressly states
that the purpose of creating the Commission was to have a body that will conduct an
"investigation of the disorder, deaths and casualties that took place."
14
In the exercise of its
functions, A.O. 11 provides guidelines, and what is relevant to Our discussion reads:
1 Its conclusions regarding the existence of probable cause for the commission of
any offense and of the persons probably guilty of the same shall be sufficient
compliance with the rules on preliminary investigation and the charges arising
therefrom may be filed directly with the proper court.
15

In effect, whatever may be the findings of the Commission, the same shall only serve as the cause
of action in the event that any party decides to litigate his/her claim. Therefore, the Commission
is merely a preliminary venue. The Commission is not the end in itself. Whatever
recommendation it makes cannot in any way bind the State immediately, such recommendation
not having become final and, executory. This is precisely the essence of it being afact-finding
body.
Secondly, whatever acts or utterances that then President Aquino may have done or said, the
same are not tantamount to the State having waived its immunity from suit. The President's act
of joining the marchers, days after the incident, does not mean that there was an admission by
the State of any liability. In fact to borrow the words of petitioners (Caylao group), "it was an act
of solidarity by the government with the people". Moreover, petitioners rely on President
Aquino's speech promising that the government would address the grievances of the rallyists. By
this alone, it cannot be inferred that the State has admitted any liability, much less can it be
inferred that it has consented to the suit.
Although consent to be sued may be given impliedly, still it cannot be maintained that such
consent was given considering the circumstances obtaining in the instant case.
Thirdly, the case does not qualify as a suit against the State.
Some instances when a suit against the State is proper are:
16

(1) When the Republic is sued by name;
(2) When the suit is against an unincorporated government agency;
(3) When the, suit is on its face against a government officer but the case is such that ultimate
liability will belong not to the officer but to the government.
While the Republic in this case is sued by name, the ultimate liability does not pertain to the
government. Although the military officers and personnel, then party defendants, were
discharging their official functions when the incident occurred, their functions ceased to be
official the moment they exceeded their authority. Based on the Commission findings, there was
lack of justification by the government forces in the use of firearms.
17
Moreover, the members of
the police and military crowd dispersal units committed a prohibited act under B.P. Blg. 880
18
as
there was unnecessary firing by them in dispersing the marchers.
19

As early as 1954, this Court has pronounced that an officer cannot shelter himself by the plea that
he is a public agent acting under the color of his office when his acts are wholly without
authority.
20
Until recently in 1991,
21
this doctrine still found application, this Court saying that
immunity from suit cannot institutionalize irresponsibility and non-accountability nor grant a
privileged status not claimed by any other official of the Republic. The military and police forces
were deployed to ensure that the rally would be peaceful and orderly as well as to guarantee the
safety of the very people that they are duty-bound to protect. However, the facts as found by the
trial court showed that they fired at the unruly crowd to disperse the latter.
While it is true that nothing is better settled than the general rule that a sovereign state and its
political subdivisions cannot be sued in the courts except when it has given its consent, it cannot
be invoked by both the military officers to release them from any liability, and by the heirs and
victims to demand indemnification from the government. The principle of state immunity from
suit does not apply, as in this case, when the relief demanded by the suit requires no affirmative
official action on the part of the State nor the affirmative discharge of any obligation which
belongs to the State in its political capacity, eventhoughtheofficersoragentswhoaremade
defendantsclaimtoholdoractonlybyvirtueofatitleofthestateandasitsagentsand
servants.
22
This Court has made it quite clear that even a "high position in the government does
not confer a license to persecute or recklessly injure another."
23

The inescapable conclusion is that the State cannot be held civilly liable for the deaths that
followed the incident. Instead, the liability should fall on the named defendants in the lower
court. In line with the ruling of this court in Shaufvs.CourtofAppeals,
24
herein public officials,
having been found to have acted beyond the scope of their authority, may be held liable for
damages.
WHEREFORE, finding no reversible error and no grave abuse of discretion committed by
respondent Judge in issuing the questioned orders, the instant petitions are hereby DISMISSED.
SO ORDERED.
Narvasa,C.J.,Cruz,Feliciano,Padilla,Bidin,Grio-Aquino,Regalado,Davide,Jr.,Romero,Nocon,
Bellosillo,MeloandQuiason,JJ.,concur.
Gutierrez,Jr.,J.,isonleave.

Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION

G.R. No. L-30671 November 28, 1973
REPUBLIC OF THE PHILIPPINES, petitioner,
vs.
HON. GUILLERMO P. VILLASOR, as Judge of the Court of First Instance of Cebu, Branch I, THE
PROVINCIAL SHERIFF OF RIZAL, THE SHERIFF OF QUEZON CITY, and THE SHERIFF OF THE CITY OF
MANILA, THE CLERK OF COURT, Court of First Instance of Cebu, P. J. KIENER CO., LTD., GAVINO
UNCHUAN, AND INTERNATIONAL CONSTRUCTION CORPORATION, respondents.
OfficeoftheSolicitorGeneralFelixV.MakasiarandSolicitorBernardoP.Pardoforpetitioner.
AndresT.VelardeandMarceloB.Fernanforrespondents.

FERNANDO, J.:
The Republic of the Philippines in this certiorari and prohibition proceeding challenges the
validity of an order issued by respondent Judge Guillermo P. Villasor, then of the Court of First
Instance of Cebu, Branch I,
1
declaring a decision final and executory and of an alias writ of
execution directed against the funds of the Armed Forces of the Philippines subsequently
issued in pursuance thereof, the alleged ground being excess of jurisdiction, or at the very least,
grave abuse of discretion. As thus simply and tersely put, with the facts being undisputed and
the principle of law that calls for application indisputable, the outcome is predictable. The
Republic of the Philippines is entitled to the writs prayed for. Respondent Judge ought not to
have acted thus. The order thus impugned and the alias writ of execution must be nullified.
In the petition filed by the Republic of the Philippines on July 7, 1969, a summary of facts was
set forth thus: "7. On July 3, 1961, a decision was rendered in Special Proceedings No. 2156-R in
favor of respondents P. J. Kiener Co., Ltd., GavinoUnchuan, and International Construction
Corporation, and against the petitioner herein, confirming the arbitration award in the amount
of P1,712,396.40, subject of Special Proceedings. 8. On June 24, 1969, respondent Honorable
Guillermo P. Villasor, issued an Order declaring the aforestated decision of July 3, 1961 final and
executory, directing the Sheriffs of Rizal Province, Quezon City [as well as] Manila to execute
the said decision. 9. Pursuant to the said Order dated June 24, 1969, the corresponding Alias
Writ of Execution [was issued] dated June 26, 1969, .... 10. On the strength of the afore-
mentioned Alias Writ of Execution dated June 26, 1969, the Provincial Sheriff of Rizal
(respondent herein) served notices of garnishment dated June 28, 1969 with several Banks,
specially on the "monies due the Armed Forces of the Philippines in the form of deposits
sufficient to cover the amount mentioned in the said Writ of Execution"; the Philippine
Veterans Bank received the same notice of garnishment on June 30, 1969 .... 11. The funds of
the Armed Forces of the Philippines on deposit with the Banks, particularly, with the Philippine
Veterans Bank and the Philippine National Bank [or] their branches are public funds duly
appropriated and allocated for the payment of pensions of retirees, pay and allowances of
military and civilian personnel and for maintenance and operations of the Armed Forces of the
Philippines, as per Certification dated July 3, 1969 by the AFP Controller,..."
2
. The paragraph
immediately succeeding in such petition then alleged: "12. Respondent Judge, Honorable
Guillermo P. Villasor, acted in excess of jurisdiction [or] with grave abuse of discretion
amounting to lack of jurisdiction in granting the issuance of an alias writ of execution against
the properties of the Armed Forces of the Philippines, hence, the Alias Writ of Execution and
notices of garnishment issued pursuant thereto are null and void."
3
In the answer filed by
respondents, through counsel Andres T. Velarde and Marcelo B. Fernan, the facts set forth
were admitted with the only qualification being that the total award was in the amount of
P2,372,331.40.
4

The Republic of the Philippines, as mentioned at the outset, did right in filing this certiorari and
prohibition proceeding. What was done by respondent Judge is not in conformity with the
dictates of the Constitution. .
It is a fundamental postulate of constitutionalism flowing from the juristic concept of
sovereignty that the state as well as its government is immune from suit unless it gives its
consent. It is readily understandable why it must be so. In the classic formulation of Holmes: "A
sovereign is exempt from suit, not because of any formal conception or obsolete theory, but on
the logical and practical ground that there can be no legal right as against the authority that
makes the law on which the right depends."
5
Sociological jurisprudence supplies an answer not
dissimilar. So it was indicated in a recent decision, ProvidenceWashingtonInsuranceCo.v.
RepublicofthePhilippines,
6
with its affirmation that "a continued adherence to the doctrine of
non-suability is not to be deplored for as against the inconvenience that may be caused private
parties, the loss of governmental efficiency and the obstacle to the performance of its
multifarious functions are far greater if such a fundamental principle were abandoned and the
availability of judicial remedy were not thus restricted. With the well known propensity on the
part of our people to go to court, at the least provocation, the loss of time and energy required
to defend against law suits, in the absence of such a basic principle that constitutes such an
effective obstacle, could very well be imagined."
7

This fundamental postulate underlying the 1935 Constitution is now made explicit in the revised
charter. It is therein expressly provided: "The State may not be sued without its consent."
8
A
corollary, both dictated by logic and sound sense from a basic concept is that public funds
cannot be the object of a garnishment proceeding even if the consent to be sued had been
previously granted and the state liability adjudged. Thus in the recent case of Commissionerof
PublicHighwaysv.SanDiego,
9
such a well-settled doctrine was restated in the opinion of
Justice Teehankee: "The universal rule that where the State gives its consent to be sued by
private parties either by general or special law, it may limit claimant's action 'only up to the
completion of proceedings anterior to the stage of execution' and that the power of the Courts
ends when the judgment is rendered, since government funds and properties may not be
seized under writs of execution or garnishment to satisfy such judgments, is based on obvious
considerations of public policy. Disbursements of public funds must be covered by the
corresponding appropriation as required by law. The functions and public services rendered by
the State cannot be allowed to be paralyzed or disrupted by the diversion of public funds from
their legitimate and specific objects, as appropriated by law."
10
Such a principle applies even to
an attempted garnishment of a salary that had accrued in favor of an employee. Directorof
CommerceandIndustryv.Concepcion,
11
speaks to that effect. Justice Malcolm as ponente left
no doubt on that score. Thus: "A rule which has never been seriously questioned, is that money
in the hands of public officers, although it may be due government employees, is not liable to
the creditors of these employees in the process of garnishment. One reason is, that the State,
by virtue of its sovereignty, may not be sued in its own courts except by express authorization
by the Legislature, and to subject its officers to garnishment would be to permit indirectly what
is prohibited directly. Another reason is that moneys sought to be garnished, as long as they
remain in the hands of the disbursing officer of the Government, belong to the latter, although
the defendant in garnishment may be entitled to a specific portion thereof. And still another
reason which covers both of the foregoing is that every consideration of public policy forbids
it."
12

In the light of the above, it is made abundantly clear why the Republic of the Philippines could
rightfully allege a legitimate grievance.
WHEREFORE, the writs of certiorari and prohibition are granted, nullifying and setting aside
both the order of June 24, 1969 declaring executory the decision of July 3, 1961 as well as the
alias writ of execution issued thereunder. The preliminary injunction issued by this Court on July
12, 1969 is hereby made permanent.
Zaldivar(Chairman),Antonio,FernandezandAquino,JJ.,concur.
Barredo,J,tooknopart.

Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. L-46930 June 10, 1988
DALE SANDERS, AND A.S. MOREAU, JR, petitioners,
vs.
HON. REGINO T. VERIDIANO II, as Presiding Judge, Branch I, Court of First Instance of Zambales,
Olongapo City, ANTHONY M. ROSSI and RALPH L. WYERS, respondents.

CRUZ, J.:
The basic issue to be resolved in this case is whether or not the petitioners were performing
their official duties when they did the acts for which they have been sued for damages by the
private respondents. Once this question is decided, the other answers will fall into place and
this petition need not detain us any longer than it already has.
Petitioner Sanders was, at the time the incident in question occurred, the special services
director of the U.S. Naval Station (NAVSTA) in Olongapo City.
1
Petitioner Moreau was the
commanding officer of the Subic Naval Base, which includes the said station.
2
Private
respondent Rossi is an American citizen with permanent residence in the Philippines,
3
as so was
private respondent Wyer, who died two years ago.
4
They were both employed as gameroom
attendants in the special services department of the NAVSTA, the former having been hired in
1971 and the latter in 1969.
5

On October 3, 1975, the private respondents were advised that their employment had been
converted from permanent full-time to permanent part-time, effective October 18,
1975.
6
Their reaction was to protest this conversion and to institute grievance proceedings
conformably to the pertinent rules and regulations of the U.S. Department of Defense. The
result was a recommendation from the hearing officer who conducted the proceedings for the
reinstatement of the private respondents to permanent full-time status plus backwages. The
report on the hearing contained the observation that "Special Services management practices
an autocratic form of supervision."
7

In a letter addressed to petitioner Moreau on May 17, 1976 (Annex "A" of the complaint),
Sanders disagreed with the hearing officer's report and asked for the rejection of the
abovestated recommendation. The letter contained the statements that: a ) "Mr. Rossi tends to
alienate most co-workers and supervisors;" b) "Messrs. Rossi and Wyers have proven, according
to their immediate supervisors, to be difficult employees to supervise;" and c) "even though the
grievants were under oath not to discuss the case with anyone, (they) placed the records in
public places where others not involved in the case could hear."
On November 7, 1975, before the start of the grievance hearings, a-letter (Annex "B" of the
complaint) purportedly corning from petitioner Moreau as the commanding general of the U.S.
Naval Station in Subic Bay was sent to the Chief of Naval Personnel explaining the change of the
private respondent's employment status and requesting concurrence therewith. The letter did
not carry his signature but was signed by W.B. Moore, Jr. "by direction," presumably of Moreau.
On the basis of these antecedent facts, the private respondent filed in the Court of First
Instance of Olongapo City a for damages against the herein petitioners on November 8,
1976.
8
The plaintiffs claimed that the letters contained libelous imputations that had exposed
them to ridicule and caused them mental anguish and that the prejudgment of the grievance
proceedings was an invasion of their personal and proprietary rights.
The private respondents made it clear that the petitioners were being sued in their private or
personal capacity. However, in a motion to dismiss filed under a special appearance, the
petitioners argued that the acts complained of were performed by them in the discharge of
their official duties and that, consequently, the court had no jurisdiction over them under the
doctrine of state immunity.
After extensive written arguments between the parties, the motion was denied in an order
dated March 8, 1977,
9
on the main ground that the petitioners had not presented any evidence
that their acts were official in nature and not personal torts, moreover, the allegation in the
complaint was that the defendants had acted maliciously and in bad faith. The same order
issued a writ of preliminary attachment, conditioned upon the filing of a P10,000.00 bond by
the plaintiffs, against the properties of petitioner Moreau, who allegedly was then about to
leave the Philippines. Subsequently, to make matters worse for the defendants, petitioner
Moreau was declared in a default by the trial court in its order dated August 9, 1977. The
motion to lift the default order on the ground that Moreau's failure to appear at the pre-trial
conference was the result of some misunderstanding, and the motion for reconsideration of
the denial of the motion to dismiss, which was filed by the petitioner's new lawyers, were
denied by the respondent court on September 7, 1977.
This petition for certiorari, prohibition and preliminary injunction was thereafter filed before
this Court, on the contention that the above-narrated acts of the respondent court are tainted
with grave abuse of discretion amounting to lack of jurisdiction.
We return now to the basic question of whether the petitioners were acting officially or only in
their private capacities when they did the acts for which the private respondents have sued
them for damages.
It is stressed at the outset that the mere allegation that a government functionary is being sued
in his personal capacity will not automatically remove him from the protection of the law of
public officers and, if appropriate, the doctrine of state immunity. By the same token, the mere
invocation of official character will not suffice to insulate him from suability and liability for an
act imputed to him as a personal tort committed without or in excess of his authority. These
well-settled principles are applicable not only to the officers of the local state but also where
the person sued in its courts pertains to the government of a foreign state, as in the present
case.
The respondent judge, apparently finding that the complained acts wereprima facie personal
and tortious, decided to proceed to trial to determine interaliatheir precise character on the
strength of the evidence to be submitted by the parties. The petitioners have objected, arguing
that no such evidence was needed to substantiate their claim of jurisdictional immunity.
Pending resolution of this question, we issued a temporary restraining order on September 26,
1977, that has since then suspended the proceedings in this case in the courtaquo.
In past cases, this Court has held that where the character of the act complained of can be
determined from the pleadings exchanged between the parties before the trial, it is not
necessary for the court to require them to belabor the point at a trial still to be conducted. Such
a proceeding would be superfluous, not to say unfair to the defendant who is subjected to
unnecessary and avoidable inconvenience.
Thus, in Baerv.Tizon,
10
we held that a motion to dismiss a complaint against the commanding
general of the Olongapo Naval Base should not have been denied because it had been
sufficiently shown that the act for which he was being sued was done in his official capacity on
behalf of the American government. The United States had not given its consent to be sued. It
was the reverse situation in Syquiav.AlmedaLopez," where we sustained the order of the
lower court granting a where we motion to dismiss a complaint against certain officers of the
U.S. armed forces also shown to be acting officially in the name of the American government.
The United States had also not waived its immunity from suit. Only three years ago, in United
StatesofAmericav.Ruiz,
12
we set aside the denial by the lower court of a motion to dismiss a
complaint for damages filed against the United States and several of its officials, it appearing
that the act complained of was governmental rather than proprietary, and certainly not
personal. In these and several other cases
13
the Court found it redundant to prolong the other
case proceedings after it had become clear that the suit could not prosper because the acts
complained of were covered by the doctrine of state immunity.
It is abundantly clear in the present case that the acts for which the petitioners are being called
to account were performed by them in the discharge of their official duties. Sanders, as director
of the special services department of NAVSTA, undoubtedly had supervision over its personnel,
including the private respondents, and had a hand in their employment, work assignments,
discipline, dismissal and other related matters. It is not disputed that the letter he had written
was in fact a reply to a request from his superior, the other petitioner, for more information
regarding the case of the private respondents.
14
Moreover, even in the absence of such
request, he still was within his rights in reacting to the hearing officer's criticismin effect a
direct attack against him-that Special Services was practicing "an autocratic form of
supervision."
As for Moreau,what he is claimed to have done was write the Chief of Naval Personnel for
concurrence with the conversion of the private respondents' type of employment even before
the grievance proceedings had even commenced. Disregarding for the nonce the question of its
timeliness, this act is clearly official in nature, performed by Moreau as the immediate superior
of Sanders and directly answerable to Naval Personnel in matters involving the special services
department of NAVSTA In fact, the letter dealt with the financial and budgetary problems of the
department and contained recommendations for their solution, including the re-designation of
the private respondents. There was nothing personal or private about it.
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 to
perform an affirmative act to satisfy the judgment, 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.
15

The practical justification for the doctrine, as Holmes put it, is that "there can be no legal right
against the authority which makes the law on which the right depends.
16
In the case of foreign
states, the rule is derived from the principle of the sovereign equality of states which wisely
admonishes that parinparemnonhabetimperiumand that a contrary attitude would "unduly
vex the peace of nations."
17
Our adherence to this precept is formally expressed in Article II,
Section 2, of our Constitution, where we reiterate from our previous charters that the
Philippines "adopts the generally accepted principles of international law as part of the law of
the land.
All this is not to say that in no case may a public officer be sued as such without the previous
consent of the state. To be sure, there are a number of well-recognized exceptions. It is clear
that a public officer may be sued as such to compel him to do an act required by law, as where,
say, a register of deeds refuses to record a deed of sale;
18
or to restrain a Cabinet member, for
example, from enforcing a law claimed to be unconstitutional;
19
or to compel the national
treasurer to pay damages from an already appropriated assurance fund;
20
or the commissioner
of internal revenue to refund tax over-payments from a fund already available for the
purpose;
21
or, in general, to secure a judgment that the officer impleaded may satisfy by
himself without the government itself having to do a positive act to assist him. We have also
held that where the government itself has violated its own laws, the aggrieved party may
directly implead the government even without first filing his claim with the Commission on
Audit as normally required, as the doctrine of state immunity "cannot be used as an instrument
for perpetrating an injustice."
22

This case must also be distinguished from such decisions as Festejov.Fernando,
23
where the
Court held that a bureau director could be sued for damages on a personal tort committed by
him when he acted without or in excess of authority in forcibly taking private property without
paying just compensation therefor although he did convert it into a public irrigation canal. It
was not necessary to secure the previous consent of the state, nor could it be validly impleaded
as a party defendant, as it was not responsible for the defendant's unauthorized act.
The case at bar, to repeat, comes under the rule and not under any of the recognized
exceptions. The government of the United States has not given its consent to be sued for the
official acts of the petitioners, who cannot satisfy any judgment that may be rendered against
them. As it is the American government itself that will have to perform the affirmative act of
appropriating the amount that may be adjudged for the private respondents, the complaint
must be dismissed for lack of jurisdiction.
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 private
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 or gross negligence amounting to
bad faith.
24
This, to, is well settled .
25
Furthermore, applying now our own penal laws, the
letters come under the concept of privileged communications and are not punishable,
26
let
alone the fact that the resented remarks are not defamatory by our standards. It seems the
private respondents have overstated their case.
A final consideration is that since the questioned acts were done in the Olongapo Naval Base by
the petitioners in the performance of their official duties and the private respondents are
themselves American citizens, it would seem only proper for the courts of this country to
refrain from taking cognizance of this matter and to treat it as coming under the internal
administration of the said base.
The petitioners' counsel have submitted a memorandum replete with citations of American
cases, as if they were arguing before a court of the United States. The Court is bemused by such
attitude. While these decisions do have persuasive effect upon us, they can at best be invoked
only to support our own jurisprudence, which we have developed and enriched on the basis of
our own persuasions as a people, particularly since we became independent in 1946.
We appreciate the assistance foreign decisions offer us, and not only from the United States
but also from Spain and other countries from which we have derived some if not most of our
own laws. But we should not place undue and fawning reliance upon them and regard them as
indispensable mental crutches without which we cannot come to our own decisions through
the employment of our own endowments We live in a different ambience and must decide our
own problems in the light of our own interests and needs, and of our qualities and even
idiosyncrasies as a people, and always with our own concept of law and justice.
The private respondents must, if they are still sominded, pursue their claim against the
petitioners in accordance with the laws of the United States, of which they are all citizens and
under whose jurisdiction the alleged offenses were committed. Even assuming that our own
laws are applicable, the United States government has not decided to give its consent to be
sued in our courts, which therefore has not acquired the competence to act on the said claim,.
WHEREFORE, the petition is GRANTED. The challenged orders dated March 8,1977, August
9,1977, and September 7, 1977, are SET ASIDE. The respondent court is directed to DISMISS
Civil Case No. 2077-O. Our Temporary restraining order of September 26,1977, is made
PERMANENT. No costs.
SO ORDERED.
Narvasa,Gancayco,Grino-AquioandMedialdea,JJ.,Concur.

Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-1648 August 17, 1949
PEDRO SYQUIA, GONZALO SYQUIA, and LEOPOLDO SYQUIA, petitioners,
vs.
NATIVIDAD ALMEDA LOPEZ, Judge of Municipal Court of Manila, CONRADO V. SANCHEZ, Judge of
Court of First Instance of Manila, GEORGE F. MOORE, ET AL., respondents.
Gibbs,Gibbs,ChuidianandQuashaforpetitioner.
J.A.Wolfsonforrespondent.
MONTEMAYOR, J.:
For the purposes of this decision, the following facts gathered from and based on the pleadings,
may be stated. The plaintiffs named Pedro, Gonzalo, and Leopoldo, all surnamed Syquia, are the
undivided joint owners of three apartment buildings situated in the City of Manila known as the
North Syquia Apartments, South Syquia Apartments and Michel Apartments located at 1131 M.
H. del Pilar, 1151 M. H. del Pilar and 1188 A. Mabini Streets, respectively.
About the middle of the year 1945, said plaintiffs executed three lease contracts, one for each
of the three apartments, in favor of the United States of America at a monthly rental of P1,775
for the North Syquia Apartments, P1,890 for the South Syquia Apartment, and P3,335 for the
Michel Apartments. The term or period for the three leases was to be "for the duration of the
war and six months thereafter, unless sooner terminated by the United States of America." The
apartment buildings were used for billeting and quartering officers of the U. S. armed forces
stationed in the Manila area.
In March 1947, when these court proceedings were commenced, George F. Moore was the
Commanding General, United States Army, Philippine Ryukus Command, Manila, and as
Commanding General of the U. S. Army in the Manila Theatre, was said to control the
occupancy of the said apartment houses and had authority in the name of the United States
Government to assign officers of the U. S. Army to said apartments or to order said officers to
vacate the same. Erland A. Tillman was the Chief, Real Estate Division, Office of the District
Engineers, U. S. Army, Manila, who, under the command of defendant Moore was in direct
charge and control of the lease and occupancy of said three apartment buildings. Defendant
Moore and Tillman themselves did not occupy any part of the premises in question.
Under the theory that said leases terminated six months after September 2, 1945, when Japan
surrendered, plaintiffs sometime in March, 1946, approached the predecessors in office of
defendants Moore and Tillman and requested the return of the apartment buildings to them,
but were advised that the U. S. Army wanted to continue occupying the premises. On May 11,
1946, said plaintiffs requested the predecessors in office of Moore and Tillman to renegotiate
said leases, execute lease contract for a period of three years and to pay a reasonable rental
higher than those payable under the old contracts. The predecessors in office of Moore in a
letter dated June 6, 1946, refused to execute new leases but advised that "it is contemplated
that the United States Army will vacate subject properties prior to 1 February 1947." Not being
in conformity with the continuance of the old leases because of the alleged comparatively low
rentals being paid thereunder, plaintiffs formally requested Tillman to cancel said three leases
and to release the apartment buildings on June 28, 1946. Tillman refused to comply with the
request. Because of the alleged representation and assurance that the U.S. Government would
vacate the premises before February 1, 1947, the plaintiffs took no further steps to secure
possession of the buildings and accepted the monthly rentals tendered by the predecessors in
office of Moore and Tillman on the basis of a month to month lease subject to cancellation
upon thirty days notice. Because of the failure to comply with the alleged representation and
assurance that the three apartment buildings will be vacated prior to February 1, 1947,
plaintiffs on February 17, 1947, served formal notice upon defendants Moore and Tillman and
64 other army officers or members of the United States Armed Forces who were then
occupying apartments in said three buildings, demanding (a) cancellation of said leases; (b)
increase in rentals to P300 per month per apartment effective thirty days from notice; (c)
execution of new leases for the three or any one or two of the said apartment buildings for a
definite term, otherwise, (d) release of said apartment buildings within thirty days of said notice
in the event of the failure to comply with the foregoing demands. The thirty-day period having
expired without any of the defendants having complied with plaintiffs' demands, the plaintiffs
commenced the present action in the Municipal Court of Manila in the form of an action for
unlawful detainer (desahucio) against Moore and Tillman and the 64 persons occupying
apartments in the three buildings for the purpose of having them vacate the apartments, each
occupants to pay P300 a month for his particular apartment from January 1, 1947 until each of
said particular defendant had vacated said apartment; to permit plaintiffs access to said
apartment buildings for the purpose of appraising the damages sustained as the result of the
occupancy by defendants; that defendants be ordered to pay plaintiffs whatever damages may
have been actually caused on said property; and that in the event said occupants are unable to
pay said P300 a month and/or the damages sustained by said property, the defendants Moore
and Tillman jointly and severally be made to pay said monthly rentals of P300 per month per
apartment from January 1, 1947 to March 19, 1947, inclusive, and/or the damages sustained by
said apartments, and that defendants Moore and Tillman be permanently enjoined against
ordering any additional parties in the future from entering and occupying said premises.
Acting upon a motion to dismiss filed through the Special Assistant of the Judge Advocate,
Philippine Ryukus Command on the ground that the court had no jurisdiction over the
defendants and over the subject matter of the action, because the real party in interest was the
U.S. Government and not the individual defendants named in the complaint, and that the
complaint did not state a cause of action, the municipal court of Manila in an order dated April
29, 1947, found that the war between the United States of America and her allies on one side
and Germany and Japan on the other, had not yet terminated and, consequently, the period or
term of the three leases had not yet expired; that under the well settled rule of International
Law, a foreign government like the United States Government cannot be sued in the courts of
another state without its consent; that it was clear from the allegations of the complaint that
although the United States of America has not been named therein as defendant, it is
nevertheless the real defendant in this case, as the parties named as defendants are officers of
the United States Army and were occupying the buildings in question as such and pursuant to
orders received from that Government. The municipal court dismissed the action with costs
against the plaintiffs with the suggestion or opinion that a citizen of the Philippines, who feels
aggrieved by the acts of the Government of a foreign country has the right to demand that the
Philippine Government study his claim and if found meritorious, take such diplomatic steps as
may be necessary for the vindication of rights of that citizen, and that the matter included or
involved in the action should be a proper subject matter of representations between the
Government of the Government of the United States of America and the Philippines. Not being
satisfied with the order, plaintiffs appealed to the Court of Manila, where the motion to dismiss
was renewed.
The Court of First Instance of Manila in an order dated July 12, 1947, affirmed the order of the
municipal court dismissing plaintiffs' complaint. It conceded that under the doctrine laid down
in the case of U.S.vs.Lee, 106 U. S., 196 and affirmed in the case of Tindalvs.Wesley, 167 U. S.,
204 ordinarily, courts have jurisdiction over cases where private parties sue to recover
possession of property being held by officers or agents acting in the name of the U. S.
Government even though no suit can be brought against the Government itself, but inasmuch
as the plaintiffs in the present case are bringing this action against officers and agents of the U.
S. Government not only to recover the possession of the three apartment houses supposedly
being held illegally by them in the name of their government, but also to collect back rents, not
only at the rate agreed upon in the lease contracts entered into by the United States of America
but in excess of said rate, to say nothing of the damages claimed, as a result of which, a
judgment in these proceedings may become a charge against the U. S. Treasury, then under the
rule laid down in the case of Land vs. Dollar, 91 Law. ed., 1209, the present suit must be
regarded as one against the United States Government itself, which cannot be sued without its
consent, specially by citizens of another country.
The plaintiffs as petitioners have brought this case before us on a petition for a writ of
mandamus seeking to order the Municipal Court of Manila to take jurisdiction over the case. On
October 30, 1947, counsel for respondents Almeda Lopez, Sanchez, Moore and Tillman filed a
motion to dismiss on several grounds. The case was orally argued on November 26, 1947. On
March 4, 1948, petitioners filed a petition which, among other things, informed this Court that
the North Syquia Apartments, the South Syquia Apartments and Michel Apartments would be
vacated by their occupants on February 29, March 31, and May 31, 1948, respectively. As a
matter of fact, said apartments were actually vacated on the dates already mentioned and were
received by the plaintiff-owners.
On the basis of this petition and because of the return of the three apartment houses to the
owners, counsel for respondents Almeda Lopez, Sanchez, Moore and Tillman filed a petition to
dismiss the present case on the ground that it is moot. Counsel for the petitioners answering
the motion, claimed that the plaintiffs and petitioners possession of the three apartment
houses, reserving all of their rights against respondents including the right to collect rents and
damages; that they have not been paid rents since January 1, 1947; that respondents admitted
that there is a total of P109,895 in rentals due and owing to petitioners; that should this case be
now dismissed, the petitioners will be unable to enforce collection; that the question of law
involved in this case may again come up before the courts when conflicts arise between Filipino
civilian property owners and the U.S. Army authorities concerning contracts entered into in the
Philippines between said Filipinos and the U.S. Government. Consequently, this Court,
according to the petitioners, far from dismissing the case, should decide it, particularly the
question of jurisdiction.
On June 18, 1949, through a "petition to amend complaint" counsel for the petitioners
informed this court that petitioners had already received the U. S. Army Forces in the Western
Pacific the sum of P109,895 as rentals for the three apartments, but with the reservation that
said acceptance should not be construed as jeopardizing the rights of the petitioners in the case
now pending in the courts of the Philippines or their rights against the U. S. Government with
respect to the three apartment houses. In view of this last petition, counsel for respondents
alleging that both respondent Moore and Tillman had long left the Islands for other Army
assignments, and now that both the possession of the three apartments in question as well as
the rentals for their occupation have already been received by the petitioners renew their
motion for dismissal on the ground that this case has now become moot.
The main purpose of the original action in the municipal court was to recover the possession of
the three apartment houses in question. The recovery of rentals as submitted by the very
counsel for the petitioner was merely incidental to the main action. Because the prime purpose
of the action had been achieved, namely, the recovery of the possession of the premises, apart
from the fact that the rentals amounting to P109,895 had been paid to the petitioners and
accepted by them though under reservations, this Court may now well dismiss the present
proceedings on the ground that the questions involved therein have become academic and
moot. Counsel for the petitioners however, insists that a decision be rendered on the merits,
particularly on the question of jurisdiction of the municipal court over the original action, not
only for the satisfaction of the parties involved but also to serve as a guide in future cases
involving cases of similar nature such as contracts of lease entered into between the
Government of the United States of America on one side and Filipino citizens on the other
regarding properties of the latter. We accept the suggestion of petitioners and shall proceed to
discuss the facts and law involved and rule upon them.
We shall concede as correctly did the Court of First Instance, that following the doctrine laid
down in the cases ofU.S.vs.Leeand U.S.vs.Tindal,supra, a private citizen claiming title and
right of possession of a certain property may, to recover possession of said property, sue as
individuals, officers and agents of the Government who are said to be illegally witholding the
same from him, though in doing so, said officers and agents claim that they are acting for the
Government, and the court may entertain such a suit altho the Government itself is not
included as a party-defendant. Of course, the Government is not bound or concluded by the
decision. The philosophy of this ruling is that unless the courts are permitted to take cognizance
and to assume jurisdiction over such a case, a private citizen would be helpless and without
redress and protection of his rights which may have been invaded by the officers of the
government professing to act in its name. In such a case the officials or agents asserting rightful
possession must prove and justify their claim before the courts, when it is made to appear in
the suit against them that the title and right of possession is in the private citizen. However, and
this is important, where the judgment in such a case would result not only in the recovery of
possession of the property in favor of said citizen but also in a charge against or financial liability
to the Government, then the suit should be regarded as one against the government itself, and,
consequently, it cannot prosper or be validly entertained by the courts except with the consent
of said Government. (Seecase of Land vs. Dollar, 91 Law. ed., 1209.)
From a careful study of this case, considering the facts involved therein as well as those of
public knowledge of which we take judicial cognizance, we are convinced that the real party in
interest as defendant in the original case is the United States of America. The lessee in each of
the three lease agreements was the United States of America and the lease agreement
themselves were executed in her name by her officials acting as her agents. The considerations
or rentals was always paid by the U. S. Government. The original action in the municipal court
was brought on the basis of these three lease contracts and it is obvious in the opinion of this
court that any back rentals or increased rentals will have to be paid by the U. S. Government
not only because, as already stated, the contracts of lease were entered into by such
Government but also because the premises were used by officers of her armed forces during
the war and immediately after the terminations of hostilities.
We cannot see how the defendants and respondents Moore and Tillman could be held
individually responsible for the payments of rentals or damages in relation to the occupancy of
the apartment houses in question. Both of these army officials had no intervention whatsoever
in the execution of the lease agreements nor in the initial occupancy of the premises both of
which were effected thru the intervention of and at the instance of their predecessors in office.
The original request made by the petitioners for the return of the apartment buildings after the
supposed termination of the leases, was made to, and denied not by Moore and Tillman but by
their predecessors in office. The notice and decision that the U. S. Army wanted and in fact
continued to occupy the premises was made not by Moore and Tillman but by predecessors in
office. The refusal to renegotiate the leases as requested by the petitioners was made not by
Moore but by his predecessors in office according to the very complaint filed in the municipal
court. The assurance that the U. S. Army will vacate the premises prior to February 29, 1947,
was also made by the predecessors in office of Moore.
As to the defendant Tillman, according to the complaint he was Chief, Real State Division, Office
of the District Engineer, U. S. Army, and was in direct charge and control of the leases and
occupancy of the apartment buildings, but he was under the command of defendant Moore, his
superior officer. We cannot see how said defendant Tillman in assigning new officers to occupy
apartments in the three buildings, in obedience to order or direction from his superior,
defendant Moore, could be held personally liable for the payment of rentals or increase
thereof, or damages said to have been suffered by the plaintiffs.
With respect to defendant General Moore, when he assumed his command in Manila, these
lease agreement had already been negotiated and executed and were in actual operation. The
three apartment buildings were occupied by army officers assigned thereto by his predecessors
in office. All that he must have done was to assign or billet incoming army officers to
apartments as they were vacated by outgoing officers due to changes in station. He found these
apartment buildings occupied by his government and devoted to the use and occupancy of
army officers stationed in Manila under his command, and he had reasons to believe that he
could continue holding and using the premises theretofore assigned for that purpose and under
contracts previously entered into by his government, as long as and until orders to the contrary
were received by him. It is even to be presumed that when demand was made by the plaintiffs
for the payment of increased rentals or for vacating the three apartment buildings, defendant
Moore, not a lawyer by profession but a soldier, must have consulted and sought the advise of
his legal department, and that his action in declining to pay the increased rentals or to eject all
his army officers from the three buildings must have been in pursuance to the advice and
counsel of his legal division. At least, he was not in a position to pay increased rentals above
those set and stipulated in the lease agreements, without the approval of his government,
unless he personally assumed financial responsibility therefor. Under these circumstances,
neither do we believe nor find that defendant Moore can be held personally liable for the
payment of back or increased rentals and alleged damages.
As to the army officers who actually occupied the apartments involved, there is less reason for
holding them personally liable for rentals and supposed damages as sought by the plaintiffs. It
must be remembered that these army officers when coming to their station in Manila were not
given the choice of their dwellings. They were merely assigned quarters in the apartment
buildings in question. Said assignments or billets may well be regarded as orders, and all that
those officers did was to obey them, and, accordingly, occupied the rooms assigned to them.
Under such circumstances, can it be supposed or conceived that such army officers would first
inquire whether the rental being paid by the government for the rooms or apartments assigned
to them by order of their superior officer was fair and reasonable or not, and whether the
period of lease between their government and the owners of the premises had expired, and
whether their occupancy of their rooms or apartments was legal or illegal? And if they
dismissed these seemingly idle speculations, assuming that they ever entered their minds, and
continued to live in their apartments unless and until orders to the contrary were received by
them, could they later be held personally liable for any back rentals which their government
may have failed to pay to the owners of the building, or for any damages to the premises
incident to all leases of property, specially in the absence of proof that such damages to
property had been caused by them and not by the previous occupants, also army officers who
are not now parties defendant to this suit? Incidentally it may be stated that both defendants
Moore and Tillman have long left these Islands to assume other commands or assignments and
in all probability none of their 64 co-defendants is still within this jurisdiction.
On the basis of the foregoing considerations we are of the belief and we hold that the real party
defendant in interest is the Government of the United States of America; that any judgment for
back or increased rentals or damages will have to be paid not by defendants Moore and Tillman
and their 64 co-defendants but by the said U. S. Government. On the basis of the ruling in the
case of Landvs.Dollaralready cited, and on what we have already stated, the present action
must be considered as one against the U. S. Government. It is clear that the courts of the
Philippines including the Municipal Court of Manila have no jurisdiction over the present case
for unlawful detainer. The question of lack of jurisdiction was raised and interposed at the very
beginning of the action. The U. S. Government has not given its consent to the filing of this suit
which is essentially against her, though not in name. Moreover, this is not only a case of a
citizen filing a suit against his own Government without the latter's consent but it is of citizen
filing an action against a foreign government without said government's consent, which renders
more obvious the lack of jurisdiction of the courts of his country. The principles of the law
behind this rule are so elementary and of such general acceptance that we deem it unnecessary
to cite authorities in support thereof.
In conclusion we find that the Municipal Court of Manila committed no error in dismissing the
case for lack of jurisdiction and that the Court of First Instance acted correctly in affirming the
municipal court's order of dismissal. Case dismissed, without pronouncement as to costs.
Moran,C.J.,Paras,Feria,Bengzon,TuasonandReyes,JJ., concur.


Separate Opinions
PERFECTO, J.,dissenting:
The petition must be granted. This is the conclusion we have arrived at long ago, soon after this
case had been submitted for our decision. We regret that, to avoid further delay in the
promulgation of the decision in this case, we are constrained to limit ourselves to a synthesis of
the reasons for our stand. So that this opinion may be released immediately, we are making it
as short as possible. To said effect we have to waive the opportunity of elaborating on our
arguments.
We are of the opinion that both the municipal court and the Court of First Instance of Manila
erred in dismissing petitioners' complaint and the majority of the Supreme Court have given
their exequatur to such grievous error.
There is no question that the Municipal Court of Manila had and has completed jurisdiction to
take cognizance of and decide the case initiated by petitioners. That jurisdiction is the same
whether the true defendants are those specifically mentioned in the complaint or the
Government of the United States.
The contention that the Government of the United States of America is the real party
defendant does not appear to be supported either by the pleadings or by the text of the
contract of lease in question. If said government is the real property defendant and had
intended to impugn the jurisdiction of the Municipal Court of Manila, it must have done so
through its diplomatic representative in the Philippines, i. e., the American Ambassador. It does
not appear that the American Ambassador had intervened in the case in any way and we
believe no one appearing in the case has the legal personality to represent said government.
In the hypothesis that the Government of the United States of America is the lessee in the
contract in question and, therefore, should be considered as the real party defendant in the
ejectment case, that simple fact does not deprive our courts of justice of their jurisdiction to try
any legal litigation relating to said contract of lease. The very fact that the government of the
United States of America had entered into a private contract with private citizens of the
Philippines and the deed executed in our country concerns real property located in Manila,
place said government, for purposes of the jurisdiction of our courts, on the same legal level of
the lessors.
Although, generally, foreign governments are beyond the jurisdiction of domestic courts of
justice, such rule is inapplicable to cases in which the foreign government enters into private
contracts with the citizens of the court's jurisdiction. A contrary view would simply run against
all principles of decency and violative of all tenets of morals.
Moral principles and principles of justice are as valid and applicable as well with regard to
private individuals as with regard to governments either domestic or foreign. Once a foreign
government enters into a private contract with the private citizens of another country, such
foreign government cannot shield its non-performance or contravention of the terms of the
contract under the cloak of non-jurisdiction. To place such foreign government beyond the
jurisdiction of the domestic courts is to give approval to the execution of unilateral contracts,
graphically described in Spanish as "contratosleoninos," because one party gets the lion's share
to the detriment of the other. To give validity to such contract is to sanctify bad faith, deceit,
fraud. We prepare to adhere to the thesis that all parties in a private contract, including
governments and the most powerful of them, are amenable to law, and that such contracts are
enforceable through the help of the courts of justice with jurisdiction to take cognizance of any
violation of such contracts if he same had been entered into only by private individuals.
To advance the proposition that the Government of the United States of America, soon after
liberating the Philippines from the invading Japanese forces, had entered with the petitioners in
to the lease contract in question with the knowledge that petitioners could not bring an action
in our courts of justice to enforce the terms of said contract is to hurl against said government
the blackest indictment. Under such situation, all the vociferous avowals of adherence to the
principles of justice, liberty, democracy, of said Government would appear as sham. We cannot
believe that the Government of the United States of America can in honest conscience support
the stand of respondents in this case. We cannot believe that said government is so callous as
not to understand the meaning of the shame entailed in the legal stand of non-jurisdiction

Republic of the Philippines
SUPREME COURT
Manila
EN BANC

G.R. No. 101949 December 1, 1994
THE HOLY SEE, petitioner,
vs.
THE HON. ERIBERTO U. ROSARIO, JR., as Presiding Judge of the Regional Trial Court of Makati,
Branch 61 and STARBRIGHT SALES ENTERPRISES, INC., respondents.
PadillaLawOfficeforpetitioner.
SiguionReyna,Montecillo&Ongsiakoforprivaterespondent.

QUIASON, J.:
This is a petition for certiorari under Rule 65 of the Revised Rules of Court to reverse and set
aside the Orders dated June 20, 1991 and September 19, 1991 of the Regional Trial Court,
Branch 61, Makati, Metro Manila in Civil Case No. 90-183.
The Order dated June 20, 1991 denied the motion of petitioner to dismiss the complaint in Civil
Case No. 90-183, while the Order dated September 19, 1991 denied the motion for
reconsideration of the June 20,1991 Order.
Petitioner is the Holy See who exercises sovereignty over the Vatican City in Rome, Italy, and is
represented in the Philippines by the Papal Nuncio.
Private respondent, Starbright Sales Enterprises, Inc., is a domestic corporation engaged in the
real estate business.
This petition arose from a controversy over a parcel of land consisting of 6,000 square meters
(Lot 5-A, Transfer Certificate of Title No. 390440) located in the Municipality of Paraaque,
Metro Manila and registered in the name of petitioner.
Said Lot 5-A is contiguous to Lots 5-B and 5-D which are covered by Transfer Certificates of Title
Nos. 271108 and 265388 respectively and registered in the name of the Philippine Realty
Corporation (PRC).
The three lots were sold to Ramon Licup, through Msgr. Domingo A. Cirilos, Jr., acting as agent
to the sellers. Later, Licup assigned his rights to the sale to private respondent.
In view of the refusal of the squatters to vacate the lots sold to private respondent, a dispute
arose as to who of the parties has the responsibility of evicting and clearing the land of
squatters. Complicating the relations of the parties was the sale by petitioner of Lot 5-A to
Tropicana Properties and Development Corporation (Tropicana).
I
On January 23, 1990, private respondent filed a complaint with the Regional Trial Court, Branch
61, Makati, Metro Manila for annulment of the sale of the three parcels of land, and specific
performance and damages against petitioner, represented by the Papal Nuncio, and three
other defendants: namely, Msgr. Domingo A. Cirilos, Jr., the PRC and Tropicana (Civil Case No.
90-183).
The complaint alleged that: (1) on April 17, 1988, Msgr. Cirilos, Jr., on behalf of petitioner and
the PRC, agreed to sell to Ramon Licup Lots 5-A, 5-B and 5-D at the price of P1,240.00 per
square meters; (2) the agreement to sell was made on the condition that earnest money of
P100,000.00 be paid by Licup to the sellers, and that the sellers clear the said lots of squatters
who were then occupying the same; (3) Licup paid the earnest money to Msgr. Cirilos; (4) in the
same month, Licup assigned his rights over the property to private respondent and informed
the sellers of the said assignment; (5) thereafter, private respondent demanded from Msgr.
Cirilos that the sellers fulfill their undertaking and clear the property of squatters; however,
Msgr. Cirilos informed private respondent of the squatters' refusal to vacate the lots, proposing
instead either that private respondent undertake the eviction or that the earnest money be
returned to the latter; (6) private respondent counterproposed that if it would undertake the
eviction of the squatters, the purchase price of the lots should be reduced from P1,240.00 to
P1,150.00 per square meter; (7) Msgr. Cirilos returned the earnest money of P100,000.00 and
wrote private respondent giving it seven days from receipt of the letter to pay the original
purchase price in cash; (8) private respondent sent the earnest money back to the sellers, but
later discovered that on March 30, 1989, petitioner and the PRC, without notice to private
respondent, sold the lots to Tropicana, as evidenced by two separate Deeds of Sale, one over
Lot 5-A, and another over Lots 5-B and 5-D; and that the sellers' transfer certificate of title over
the lots were cancelled, transferred and registered in the name of Tropicana; (9) Tropicana
induced petitioner and the PRC to sell the lots to it and thus enriched itself at the expense of
private respondent; (10) private respondent demanded the rescission of the sale to Tropicana
and the reconveyance of the lots, to no avail; and (11) private respondent is willing and able to
comply with the terms of the contract to sell and has actually made plans to develop the lots
into a townhouse project, but in view of the sellers' breach, it lost profits of not less than
P30,000.000.00.
Private respondent thus prayed for: (1) the annulment of the Deeds of Sale between petitioner
and the PRC on the one hand, and Tropicana on the other; (2) the reconveyance of the lots in
question; (3) specific performance of the agreement to sell between it and the owners of the
lots; and (4) damages.
On June 8, 1990, petitioner and Msgr. Cirilos separately moved to dismiss the complaint
petitioner for lack of jurisdiction based on sovereign immunity from suit, and Msgr. Cirilos for
being an improper party. An opposition to the motion was filed by private respondent.
On June 20, 1991, the trial court issued an order denying, among others, petitioner's motion to
dismiss after finding that petitioner "shed off [its] sovereign immunity by entering into the
business contract in question" (Rollo, pp. 20-21).
On July 12, 1991, petitioner moved for reconsideration of the order. On August 30, 1991,
petitioner filed a "Motion for a Hearing for the Sole Purpose of Establishing Factual Allegation
for claim of Immunity as a Jurisdictional Defense." So as to facilitate the determination of its
defense of sovereign immunity, petitioner prayed that a hearing be conducted to allow it to
establish certain facts upon which the said defense is based. Private respondent opposed this
motion as well as the motion for reconsideration.
On October 1, 1991, the trial court issued an order deferring the resolution on the motion for
reconsideration until after trial on the merits and directing petitioner to file its answer (Rollo, p.
22).
Petitioner forthwith elevated the matter to us. In its petition, petitioner invokes the privilege of
sovereign immunity only on its own behalf and on behalf of its official representative, the Papal
Nuncio.
On December 9, 1991, a Motion for Intervention was filed before us by the Department of
Foreign Affairs, claiming that it has a legal interest in the outcome of the case as regards the
diplomatic immunity of petitioner, and that it "adopts by reference, the allegations contained in
the petition of the Holy See insofar as they refer to arguments relative to its claim of sovereign
immunity from suit" (Rollo, p. 87).
Private respondent opposed the intervention of the Department of Foreign Affairs. In
compliance with the resolution of this Court, both parties and the Department of Foreign Affairs
submitted their respective memoranda.
II
A preliminary matter to be threshed out is the procedural issue of whether the petition
for certiorari under Rule 65 of the Revised Rules of Court can be availed of to question the
order denying petitioner's motion to dismiss. The general rule is that an order denying a motion
to dismiss is not reviewable by the appellate courts, the remedy of the movant being to file his
answer and to proceed with the hearing before the trial court. But the general rule admits of
exceptions, and one of these is when it is very clear in the records that the trial court has no
alternative but to dismiss the complaint (Philippine National Bank v. Florendo, 206 SCRA 582
[1992]; Zagada v. Civil Service Commission, 216 SCRA 114 [1992]. In such a case, it would be a
sheer waste of time and energy to require the parties to undergo the rigors of a trial.
The other procedural question raised by private respondent is the personality or legal interest
of the Department of Foreign Affairs to intervene in the case in behalf of the Holy See (Rollo,
pp. 186-190).
In Public International Law, when a state or international agency wishes to plead sovereign or
diplomatic immunity in a foreign court, it requests the Foreign Office of the state where it is
sued to convey to the court that said defendant is entitled to immunity.
In the United States, the procedure followed is the process of "suggestion," where the foreign
state or the international organization sued in an American court requests the Secretary of
State to make a determination as to whether it is entitled to immunity. If the Secretary of State
finds that the defendant is immune from suit, he, in turn, asks the Attorney General to submit
to the court a "suggestion" that the defendant is entitled to immunity. In England, a similar
procedure is followed, only the Foreign Office issues a certification to that effect instead of
submitting a "suggestion" (O'Connell, I International Law 130 [1965]; Note: Immunity from Suit
of Foreign Sovereign Instrumentalities and Obligations, 50 Yale Law Journal 1088 [1941]).
In the Philippines, the practice is for the foreign government or the international organization
to first secure an executive endorsement of its claim of sovereign or diplomatic immunity. But
how the Philippine Foreign Office conveys its endorsement to the courts varies. In International
CatholicMigrationCommissionv.Calleja, 190 SCRA 130 (1990), the Secretary of Foreign Affairs
just sent a letter directly to the Secretary of Labor and Employment, informing the latter that
the respondent-employer could not be sued because it enjoyed diplomatic immunity. InWorld
HealthOrganizationv.Aquino, 48 SCRA 242 (1972), the Secretary of Foreign Affairs sent the
trial court a telegram to that effect. In Baerv.Tizon, 57 SCRA 1 (1974), the U.S. Embassy asked
the Secretary of Foreign Affairs to request the Solicitor General to make, in behalf of the
Commander of the United States Naval Base at Olongapo City, Zambales, a "suggestion" to
respondent Judge. The Solicitor General embodied the "suggestion" in a Manifestation and
Memorandum as amicuscuriae.
In the case at bench, the Department of Foreign Affairs, through the Office of Legal Affairs
moved with this Court to be allowed to intervene on the side of petitioner. The Court allowed
the said Department to file its memorandum in support of petitioner's claim of sovereign
immunity.
In some cases, the defense of sovereign immunity was submitted directly to the local courts by
the respondents through their private counsels (Raquiza v. Bradford, 75 Phil. 50 [1945];
Miquiabas v. Philippine-Ryukyus Command, 80 Phil. 262 [1948]; United States of America v.
Guinto, 182 SCRA 644 [1990] and companion cases). In cases where the foreign states bypass
the Foreign Office, the courts can inquire into the facts and make their own determination as to
the nature of the acts and transactions involved.
III
The burden of the petition is that respondent trial court has no jurisdiction over petitioner,
being a foreign state enjoying sovereign immunity. On the other hand, private respondent
insists that the doctrine of non-suability is not anymore absolute and that petitioner has
divested itself of such a cloak when, of its own free will, it entered into a commercial
transaction for the sale of a parcel of land located in the Philippines.
A. TheHolySee
Before we determine the issue of petitioner's non-suability, a brief look into its status as a
sovereign state is in order.
Before the annexation of the Papal States by Italy in 1870, the Pope was the monarch and he,
as the Holy See, was considered a subject of International Law. With the loss of the Papal States
and the limitation of the territory under the Holy See to an area of 108.7 acres, the position of
the Holy See in International Law became controversial (Salonga and Yap, Public International
Law 36-37 [1992]).
In 1929, Italy and the Holy See entered into the Lateran Treaty, where Italy recognized the
exclusive dominion and sovereign jurisdiction of the Holy See over the Vatican City. It also
recognized the right of the Holy See to receive foreign diplomats, to send its own diplomats to
foreign countries, and to enter into treaties according to International Law (Garcia, Questions
and Problems In International Law, Public and Private 81 [1948]).
The Lateran Treaty established the statehood of the Vatican City "for the purpose of assuring to
the Holy See absolute and visible independence and of guaranteeing to it indisputable
sovereignty also in the field of international relations" (O'Connell, I International Law 311
[1965]).
In view of the wordings of the Lateran Treaty, it is difficult to determine whether the statehood
is vested in the Holy See or in the Vatican City. Some writers even suggested that the treaty
created two international persons the Holy See and Vatican City (Salonga and Yap, supra, 37).
The Vatican City fits into none of the established categories of states, and the attribution to it of
"sovereignty" must be made in a sense different from that in which it is applied to other states
(Fenwick, International Law 124-125 [1948]; Cruz, International Law 37 [1991]). In a community
of national states, the Vatican City represents an entity organized not for political but for
ecclesiastical purposes and international objects. Despite its size and object, the Vatican City
has an independent government of its own, with the Pope, who is also head of the Roman
Catholic Church, as the Holy See or Head of State, in conformity with its traditions, and the
demands of its mission in the world. Indeed, the world-wide interests and activities of the
Vatican City are such as to make it in a sense an "international state" (Fenwick, supra., 125;
Kelsen, Principles of International Law 160 [1956]).
One authority wrote that the recognition of the Vatican City as a state has significant
implication that it is possible for any entity pursuing objects essentially different from those
pursued by states to be invested with international personality (Kunz, The Status of the Holy
See in International Law, 46 The American Journal of International Law 308 [1952]).
Inasmuch as the Pope prefers to conduct foreign relations and enter into transactions as the
Holy See and not in the name of the Vatican City, one can conclude that in the Pope's own view,
it is the Holy See that is the international person.
The Republic of the Philippines has accorded the Holy See the status of a foreign sovereign. The
Holy See, through its Ambassador, the Papal Nuncio, has had diplomatic representations with
the Philippine government since 1957 (Rollo, p. 87). This appears to be the universal practice in
international relations.
B. SovereignImmunity
As expressed in Section 2 of Article II of the 1987 Constitution, we have adopted the generally
accepted principles of International Law. Even without this affirmation, such principles of
International Law are deemed incorporated as part of the law of the land as a condition and
consequence of our admission in the society of nations (United States of America v. Guinto, 182
SCRA 644 [1990]).
There are two conflicting concepts of sovereign immunity, each widely held and firmly
established. According to the classical or absolute theory, a sovereign cannot, without its
consent, be made a respondent in the courts of another sovereign. According to the newer or
restrictive theory, the immunity of the sovereign is recognized only with regard to public acts or
actsjureimperiiof a state, but not with regard to private acts or actsjuregestionis
(United States of America v. Ruiz, 136 SCRA 487 [1987]; Coquia and Defensor-Santiago, Public
International Law 194 [1984]).
Some states passed legislation to serve as guidelines for the executive or judicial determination
when an act may be considered asjuregestionis. The United States passed the Foreign
Sovereign Immunities Act of 1976, which defines a commercial activity as "either a regular
course of commercial conduct or a particular commercial transaction or act." Furthermore, the
law declared that the "commercial character of the activity shall be determined by reference to
the nature of the course of conduct or particular transaction or act, rather than by reference to
its purpose." The Canadian Parliament enacted in 1982 an Act to Provide For State Immunity in
Canadian Courts. The Act defines a "commercial activity" as any particular transaction, act or
conduct or any regular course of conduct that by reason of its nature, is of a "commercial
character."
The restrictive theory, which is intended to be a solution to the host of problems involving the
issue of sovereign immunity, has created problems of its own. Legal treatises and the decisions
in countries which follow the restrictive theory have difficulty in characterizing whether a
contract of a sovereign state with a private party is an actjuregestionisor an actjureimperii.
The restrictive theory came about because of the entry of sovereign states into purely
commercial activities remotely connected with the discharge of governmental functions. This is
particularly true with respect to the Communist states which took control of nationalized
business activities and international trading.
This Court has considered the following transactions by a foreign state with private parties as
actsjureimperii: (1) the lease by a foreign government of apartment buildings for use of its
military officers (Syquia v. Lopez, 84 Phil. 312 [1949]; (2) the conduct of public bidding for the
repair of a wharf at a United States Naval Station (United States of America v. Ruiz, supra.); and
(3) the change of employment status of base employees (Sanders v. Veridiano, 162 SCRA 88
[1988]).
On the other hand, this Court has considered the following transactions by a foreign state with
private parties as actsjuregestionis: (1) the hiring of a cook in the recreation center, consisting
of three restaurants, a cafeteria, a bakery, a store, and a coffee and pastry shop at the John Hay
Air Station in Baguio City, to cater to American servicemen and the general public (United
States of America v. Rodrigo, 182 SCRA 644 [1990]); and (2) the bidding for the operation of
barber shops in Clark Air Base in Angeles City (United States of America v. Guinto, 182 SCRA 644
[1990]). The operation of the restaurants and other facilities open to the general public is
undoubtedly for profit as a commercial and not a governmental activity. By entering into the
employment contract with the cook in the discharge of its proprietary function, the United
States government impliedly divested itself of its sovereign immunity from suit.
In the absence of legislation defining what activities and transactions shall be considered
"commercial" and as constituting actsjuregestionis, we have to come out with our own
guidelines, tentative they may be.
Certainly, the mere entering into a contract by a foreign state with a private party cannot be the
ultimate test. Such an act can only be the start of the inquiry. The logical question is whether
the foreign state is engaged in the activity in the regular course of business. If the foreign state
is not engaged regularly in a business or trade, the particular act or transaction must then be
tested by its nature. If the act is in pursuit of a sovereign activity, or an incident thereof, then it
is an actjureimperii, especially when it is not undertaken for gain or profit.
As held in UnitedStatesofAmericav.Guinto, (supra):
There is no question that the United States of America, like any other state, will be
deemed to have impliedly waived its non-suability if it has entered into a contract
in its proprietary or private capacity. It is only when the contract involves its
sovereign or governmental capacity that no such waiver may be implied.
In the case at bench, if petitioner has bought and sold lands in the ordinary course of a real
estate business, surely the said transaction can be categorized as an actjuregestionis.
However, petitioner has denied that the acquisition and subsequent disposal of Lot 5-A were
made for profit but claimed that it acquired said property for the site of its mission or the
Apostolic Nunciature in the Philippines. Private respondent failed to dispute said claim.
Lot 5-A was acquired by petitioner as a donation from the Archdiocese of Manila. The donation
was made not for commercial purpose, but for the use of petitioner to construct thereon the
official place of residence of the Papal Nuncio. The right of a foreign sovereign to acquire
property, real or personal, in a receiving state, necessary for the creation and maintenance of
its diplomatic mission, is recognized in the 1961 Vienna Convention on Diplomatic Relations
(Arts. 20-22). This treaty was concurred in by the Philippine Senate and entered into force in
the Philippines on November 15, 1965.
In Article 31(a) of the Convention, a diplomatic envoy is granted immunity from the civil and
administrative jurisdiction of the receiving state over any real action relating to private
immovable property situated in the territory of the receiving state which the envoy holds on
behalf of the sending state for the purposes of the mission. If this immunity is provided for a
diplomatic envoy, with all the more reason should immunity be recognized as regards the
sovereign itself, which in this case is the Holy See.
The decision to transfer the property and the subsequent disposal thereof are likewise clothed
with a governmental character. Petitioner did not sell Lot
5-A for profit or gain. It merely wanted to dispose off the same because the squatters living
thereon made it almost impossible for petitioner to use it for the purpose of the donation. The
fact that squatters have occupied and are still occupying the lot, and that they stubbornly
refuse to leave the premises, has been admitted by private respondent in its complaint (Rollo,
pp. 26, 27).
The issue of petitioner's non-suability can be determined by the trial court without going to trial
in the light of the pleadings, particularly the admission of private respondent. Besides, the
privilege of sovereign immunity in this case was sufficiently established by the Memorandum
and Certification of the Department of Foreign Affairs. As the department tasked with the
conduct of the Philippines' foreign relations (Administrative Code of 1987, Book IV, Title I, Sec.
3), the Department of Foreign Affairs has formally intervened in this case and officially certified
that the Embassy of the Holy See is a duly accredited diplomatic mission to the Republic of the
Philippines exempt from local jurisdiction and entitled to all the rights, privileges and
immunities of a diplomatic mission or embassy in this country (Rollo, pp. 156-157). The
determination of the executive arm of government that a state or instrumentality is entitled to
sovereign or diplomatic immunity is a political question that is conclusive upon the courts
(International Catholic Migration Commission v. Calleja, 190 SCRA 130 [1990]). Where the plea
of immunity is recognized and affirmed by the executive branch, it is the duty of the courts to
accept this claim so as not to embarrass the executive arm of the government in conducting the
country's foreign relations (World Health Organization v. Aquino, 48 SCRA 242 [1972]). As
in InternationalCatholicMigrationCommissionand in WorldHealthOrganization, we abide by
the certification of the Department of Foreign Affairs.
Ordinarily, the procedure would be to remand the case and order the trial court to conduct a
hearing to establish the facts alleged by petitioner in its motion. In view of said certification,
such procedure would however be pointless and unduly circuitous (Ortigas& Co. Ltd.
Partnership v. Judge Tirso Velasco, G.R. No. 109645, July 25, 1994).
IV
Private respondent is not left without any legal remedy for the redress of its grievances. Under
both Public International Law and Transnational Law, a person who feels aggrieved by the acts
of a foreign sovereign can ask his own government to espouse his cause through diplomatic
channels.
Private respondent can ask the Philippine government, through the Foreign Office, to espouse
its claims against the Holy See. Its first task is to persuade the Philippine government to take up
with the Holy See the validity of its claims. Of course, the Foreign Office shall first make a
determination of the impact of its espousal on the relations between the Philippine
government and the Holy See (Young, RemediesofPrivateClaimantsAgainstForeignStates,
Selected Readings on Protection by Law of Private Foreign Investments 905, 919 [1964]). Once
the Philippine government decides to espouse the claim, the latter ceases to be a private cause.
According to the Permanent Court of International Justice, the forerunner of the International
Court of Justice:
By taking up the case of one of its subjects and by reporting to diplomatic action or
international judicial proceedings on his behalf, a State is in reality asserting its
own rights its right to ensure, in the person of its subjects, respect for the rules
of international law (The Mavrommatis Palestine Concessions, 1 Hudson, World
Court Reports 293, 302 [1924]).
WHEREFORE, the petition for certiorari is GRANTED and the complaint in Civil Case No. 90-183
against petitioner is DISMISSED.
SO ORDERED.

Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. 76607 February 26, 1990
UNITED STATES OF AMERICA, FREDERICK M. SMOUSE AND YVONNE REEVES, petitioners,
vs.
HON. ELIODORO B. GUINTO, Presiding Judge, Branch LVII, Regional Trial Court, Angeles City,
ROBERTO T. VALENCIA, EMERENCIANA C. TANGLAO, AND PABLO C. DEL PILAR, respondents.
G.R. No. 79470 February 26, 1990
UNITED STATES OF AMERICA, ANTHONY LAMACHIA, T/SGT. USAF, WILFREDO BELSA, PETER
ORASCION AND ROSE CARTALLA, petitioners,
vs.
HON. RODOLFO D. RODRIGO, as Presiding Judge of Branch 7, Regional Trial Court (BAGUIO CITY),
La Trinidad, Benguet and FABIAN GENOVE, respondents.
G.R. No. 80018 February 26, 1990
UNITED STATES OF AMERICA, TOMI J. KINGI, DARREL D. DYE and STEVEN F. BOSTICK, petitioners,
vs.
HON. JOSEFINA D. CEBALLOS, As Presiding Judge, Regional Trial Court, Branch 66, Capas, Tarlac,
and LUIS BAUTISTA, respondents.
G.R. No. 80258 February 26, 1990
UNITED STATES OF AMERICA, MAJOR GENERAL MICHAEL P. C. CARNS, AIC ERNEST E.
RIVENBURGH, AIC ROBIN BLEVINS, SGT. NOEL A. GONZALES, SGT. THOMAS MITCHELL, SGT.
WAYNE L. BENJAMIN, ET AL.,petitioners,
vs.
HON. CONCEPCION S. ALARCON VERGARA, as Presiding Judge, Branch 62 REGIONAL TRIAL
COURT, Angeles City, and RICKY SANCHEZ, FREDDIE SANCHEZ AKA FREDDIE RIVERA, EDWIN
MARIANO, AKA JESSIE DOLORES SANGALANG, ET AL., respondents.
Luna,Sison&ManasLawOfficeforpetitioners.

CRUZ, J.:
These cases have been consolidated because they all involve the doctrine of state immunity.
The United States of America was not impleaded in the complaints below but has moved to
dismiss on the ground that they are in effect suits against it to which it has not consented. It is
now contesting the denial of its motions by the respondent judges.
In G.R. No. 76607, the private respondents are suing several officers of the U.S. Air Force
stationed in Clark Air Base in connection with the bidding conducted by them for contracts for
barber services in the said base.
On February 24, 1986, the Western Pacific Contracting Office, Okinawa Area Exchange, U.S. Air
Force, solicited bids for such contracts through its contracting officer, James F. Shaw. Among
those who submitted their bids were private respondents Roberto T. Valencia, Emerenciana C.
Tanglao, and Pablo C. del Pilar. Valencia had been a concessionaire inside Clark for 34 years; del
Pilar for 12 years; and Tanglao for 50 years.
The bidding was won by Ramon Dizon, over the objection of the private respondents, who
claimed that he had made a bid for four facilities, including the Civil Engineering Area, which
was not included in the invitation to bid.
The private respondents complained to the Philippine Area Exchange (PHAX). The latter,
through its representatives, petitioners Yvonne Reeves and Frederic M. Smouse explained that
the Civil Engineering concession had not been awarded to Dizon as a result of the February 24,
1986 solicitation. Dizon was already operating this concession, then known as the NCO club
concession, and the expiration of the contract had been extended from June 30, 1986 to August
31, 1986. They further explained that the solicitation of the CE barbershop would be available
only by the end of June and the private respondents would be notified.
On June 30, 1986, the private respondents filed a complaint in the court below to compel PHAX
and the individual petitioners to cancel the award to defendant Dizon, to conduct a rebidding
for the barbershop concessions and to allow the private respondents by a writ of preliminary
injunction to continue operating the concessions pending litigation.
1

Upon the filing of the complaint, the respondent court issued an exparte order directing the
individual petitioners to maintain the statusquo.
On July 22, 1986, the petitioners filed a motion to dismiss and opposition to the petition for
preliminary injunction on the ground that the action was in effect a suit against the United
States of America, which had not waived its non-suability. The individual defendants, as official
employees of the U.S. Air Force, were also immune from suit.
On the same date, July 22, 1986, the trial court denied the application for a writ of preliminary
injunction.
On October 10, 1988, the trial court denied the petitioners' motion to dismiss, holding in part as
follows:
From the pleadings thus far presented to this Court by the parties, the Court's
attention is called by the relationship between the plaintiffs as well as the
defendants, including the US Government, in that prior to the bidding or
solicitation in question, there was a binding contract between the plaintiffs as well
as the defendants, including the US Government. By virtue of said contract of
concession it is the Court's understanding that neither the US Government nor the
herein principal defendants would become the employer/s of the plaintiffs but that
the latter are the employers themselves of the barbers, etc. with the employer, the
plaintiffs herein, remitting the stipulated percentage of commissions to the
Philippine Area Exchange. The same circumstance would become in effect when
the Philippine Area Exchange opened for bidding or solicitation the questioned
barber shop concessions. To this extent, therefore, indeed a commercial
transaction has been entered, and for purposes of the said solicitation, would
necessarily be entered between the plaintiffs as well as the defendants.
The Court, further, is of the view that Article XVIII of the RP-US Bases Agreement
does not cover such kind of services falling under the concessionaireship, such as a
barber shop concession.
2

On December 11, 1986, following the filing of the herein petition for certiorari and prohibition
with preliminary injunction, we issued a temporary restraining order against further
proceedings in the court below.
3

In G.R. No. 79470, FabianGenove filed a complaint for damages against petitioners Anthony
Lamachia, WilfredoBelsa, Rose Cartalla and Peter Orascion for his dismissal as cook in the U.S.
Air Force Recreation Center at the John Hay Air Station in Baguio City. It had been ascertained
after investigation, from the testimony of BelsaCartalla and Orascion, that Genove had poured
urine into the soup stock used in cooking the vegetables served to the club customers.
Lamachia, as club manager, suspended him and thereafter referred the case to a board of
arbitrators conformably to the collective bargaining agreement between the Center and its
employees. The board unanimously found him guilty and recommended his dismissal. This was
effected on March 5, 1986, by Col. David C. Kimball, Commander of the 3rd Combat Support
Group, PACAF Clark Air Force Base. Genove's reaction was to file Ms complaint in the Regional
Trial Court of Baguio City against the individual petitioners.
4

On March 13, 1987, the defendants, joined by the United States of America, moved to dismiss
the complaint, alleging that Lamachia, as an officer of the U.S. Air Force stationed at John Hay
Air Station, was immune from suit for the acts done by him in his official capacity. They argued
that the suit was in effect against the United States, which had not given its consent to be sued.
This motion was denied by the respondent judge on June 4, 1987, in an order which read in
part:
It is the understanding of the Court, based on the allegations of the complaint
which have been hypothetically admitted by defendants upon the filing of their
motion to dismiss that although defendants acted initially in their official
capacities, their going beyond what their functions called for brought them out of
the protective mantle of whatever immunities they may have had in the beginning.
Thus, the allegation that the acts complained of were illegal, done. with extreme
bad faith and with pre-conceived sinister plan to harass and finally dismiss the
plaintiff, gains significance.
5

The petitioners then came to this Court seeking certiorari and prohibition with preliminary
injunction.
In G.R. No. 80018, Luis Bautista, who was employed as a barracks boy in Camp O' Donnell, an
extension of Clark Air Base, was arrested following a buy-bust operation conducted by the
individual petitioners herein, namely, Tomi J. King, Darrel D. Dye and Stephen F. Bostick, officers
of the U.S. Air Force and special agents of the Air Force Office of Special Investigators (AFOSI).
On the basis of the sworn statements made by them, an information for violation of R.A. 6425,
otherwise known as the Dangerous Drugs Act, was filed against Bautista in the Regional Trial
Court of Tarlac. The above-named officers testified against him at his trial. As a result of the
filing of the charge, Bautista was dismissed from his employment. He then filed a complaint for
damages against the individual petitioners herein claiming that it was because of their acts that
he was removed.
6

During the period for filing of the answer, Mariano Y. Navarro a special counsel assigned to the
International Law Division, Office of the Staff Judge Advocate of Clark Air Base, entered a special
appearance for the defendants and moved for an extension within which to file an "answer
and/or other pleadings." His reason was that the Attorney General of the United States had not
yet designated counsel to represent the defendants, who were being sued for their official acts.
Within the extended period, the defendants, without the assistance of counsel or authority
from the U.S. Department of Justice, filed their answer. They alleged therein as affirmative
defenses that they had only done their duty in the enforcement of the laws of the Philippines
inside the American bases pursuant to the RP-US Military Bases Agreement.
On May 7, 1987, the law firm of Luna, Sison and Manas, having been retained to represent the
defendants, filed with leave of court a motion to withdraw the answer and dismiss the
complaint. The ground invoked was that the defendants were acting in their official capacity
when they did the acts complained of and that the complaint against them was in effect a suit
against the United States without its consent.
The motion was denied by the respondent judge in his order dated September 11, 1987, which
held that the claimed immunity under the Military Bases Agreement covered only criminal and
not civil cases. Moreover, the defendants had come under the jurisdiction of the court when
they submitted their answer.
7

Following the filing of the herein petition for certiorari and prohibition with preliminary
injunction, we issued on October 14, 1987, a temporary restraining order.
8

In G.R. No. 80258, a complaint for damages was filed by the private respondents against the
herein petitioners (except the United States of America), for injuries allegedly sustained by the
plaintiffs as a result of the acts of the defendants.
9
There is a conflict of factual allegations
here. According to the plaintiffs, the defendants beat them up, handcuffed them and unleashed
dogs on them which bit them in several parts of their bodies and caused extensive injuries to
them. The defendants deny this and claim the plaintiffs were arrested for theft and were bitten
by the dogs because they were struggling and resisting arrest, The defendants stress that the
dogs were called off and the plaintiffs were immediately taken to the medical center for
treatment of their wounds.
In a motion to dismiss the complaint, the United States of America and the individually named
defendants argued that the suit was in effect a suit against the United States, which had not
given its consent to be sued. The defendants were also immune from suit under the RP-US
Bases Treaty for acts done by them in the performance of their official functions.
The motion to dismiss was denied by the trial court in its order dated August 10, 1987, reading
in part as follows:
The defendants certainly cannot correctly argue that they are immune from suit.
The allegations, of the complaint which is sought to be dismissed, had to be
hypothetically admitted and whatever ground the defendants may have, had to be
ventilated during the trial of the case on the merits. The complaint alleged criminal
acts against the individually-named defendants and from the nature of said acts it
could not be said that they are Acts of State, for which immunity should be
invoked. If the Filipinos themselves are duty bound to respect, obey and submit
themselves to the laws of the country, with more reason, the members of the
United States Armed Forces who are being treated as guests of this country should
respect, obey and submit themselves to its laws.
10

and so was the motion for reconsideration. The defendants submitted their answer as required
but subsequently filed their petition for certiorari and prohibition with preliminary injunction
with this Court. We issued a temporary restraining order on October 27, 1987.
11

II
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.
Even without such affirmation, we would still be bound by the generally accepted principles of
international law under the doctrine of incorporation. Under this doctrine, as accepted by the
majority of states, such principles are deemed incorporated in the law of every civilized state as
a condition and consequence of its membership in the society of nations. Upon its admission to
such society, the state is automatically obligated to comply with these principles in its relations
with other states.
As applied to the local state, the doctrine of state immunity is based on the justification given
by Justice Holmes that "there can be no legal right against the authority which makes the law
on which the right depends."
12
There are other practical reasons for the enforcement of the
doctrine. In the case of the foreign state sought to be impleaded in the local jurisdiction, the
added inhibition is expressed in the maxim parinparem,nonhabetimperium. All states are
sovereign equals and cannot assert jurisdiction over one another. A contrary disposition would,
in the language of a celebrated case, "unduly vex the peace of nations."
13

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.
14
In such a situation, the
state may move to dismiss the complaint on the ground that it has been filed without its
consent.
The doctrine is sometimes derisively called "the royal prerogative of dishonesty" because of the
privilege it grants the state to defeat any legitimate claim against it by simply invoking its non-
suability. That is hardly fair, at least in democratic societies, for the state is not an unfeeling
tyrant unmoved by the valid claims of its citizens. In fact, the doctrine is not absolute and does
not say the state may not be sued under any circumstance. On the contrary, the rule says that
the state may not be sued without its consent, which clearly imports that it may be sued if it
consents.
The consent of the state to be sued may be manifested expressly or impliedly. Express consent
may be embodied in a general law or a special law. Consent is implied when the state enters
into a contract or it itself commences litigation.
The general law waiving the immunity of the state from suit is found in Act No. 3083, under
which the Philippine government "consents and submits to be sued upon any moneyed claim
involving liability arising from contract, express or implied, which could serve as a basis of civil
action between private parties." In Merrittv.Governmentofthe PhilippineIslands,
15
a special
law was passed to enable a person to sue the government for an alleged tort. When the
government enters into a contract, it is deemed to have descended to the level of the other
contracting party and divested of its sovereign immunity from suit with its implied
consent.
16
Waiver is also implied when the government files a complaint, thus opening itself to
a counterclaim.
17

The above rules are subject to qualification. Express consent is effected only by the will of the
legislature through the medium of a duly enacted statute.
18
We have held that not all contracts
entered into by the government will operate as a waiver of its non-suability; distinction must be
made between its sovereign and proprietary acts.
19
As for the filing of a complaint by the
government, suability will result only where the government is claiming affirmative relief from
the defendant.
20

In the case of the United States of America, the customary rule of international law on state
immunity is expressed with more specificity in the RP-US Bases Treaty. Article III thereof
provides as follows:
It is mutually agreed that the United States shall have the rights, power and
authority within the bases which are necessary for the establishment, use,
operation and defense thereof or appropriate for the control thereof and all the
rights, power and authority within the limits of the territorial waters and air space
adjacent to, or in the vicinity of, the bases which are necessary to provide access to
them or appropriate for their control.
The petitioners also rely heavily on Baerv.Tizon,
21
along with several other decisions, to
support their position that they are not suable in the cases below, the United States not having
waived its sovereign immunity from suit. It is emphasized that in Baer, the Court held:
The invocation of the doctrine of immunity from suit of a foreign state without its
consent is appropriate. More specifically, insofar as alien armed forces is
concerned, the starting point isRaquizav.Bradford, a 1945 decision. In dismissing
a habeas corpus petition for the release of petitioners confined by American army
authorities, Justice Hilado speaking for the Court, cited Colemanv.Tennessee,
where it was explicitly declared: 'It is well settled that a foreign army, permitted to
march through a friendly country or to be stationed in it, by permission of its
government or sovereign, is exempt from the civil and criminal jurisdiction of the
place.' Two years later, in Tubb and Tedrow v. Griess, this Court relied on the ruling
in Raquiza v. Bradford and cited in support thereof excerpts from the works of the
following authoritative writers: Vattel, Wheaton, Hall, Lawrence, Oppenheim,
Westlake, Hyde, and McNair and Lauterpacht. Accuracy demands the clarification
that after the conclusion of the Philippine-American Military Bases Agreement, the
treaty provisions should control on such matter, the assumption being that there
was a manifestation of the submission to jurisdiction on the part of the foreign
power whenever appropriate. More to the point is Syquiav.AlmedaLopez, where
plaintiffs as lessors sued the Commanding General of the United States Army in the
Philippines, seeking the restoration to them of the apartment buildings they
owned leased to the United States armed forces stationed in the Manila area. A
motion to dismiss on the ground of non-suability was filed and upheld by
respondent Judge. The matter was taken to this Court in a mandamus proceeding.
It failed. It was the ruling that respondent Judge acted correctly considering that
the 4 action must be considered as one against the U.S. Government. The opinion
of Justice Montemayor continued: 'It is clear that the courts of the Philippines
including the Municipal Court of Manila have no jurisdiction over the present case
for unlawful detainer. The question of lack of jurisdiction was raised and
interposed at the very beginning of the action. The U.S. Government has not given
its consent to the filing of this suit which is essentially against her, though not in
name. Moreover, this is not only a case of a citizen filing a suit against his own
Government without the latter's consent but it is of a citizen firing an action
against a foreign government without said government's consent, which renders
more obvious the lack of jurisdiction of the courts of his country. The principles of
law behind this rule are so elementary and of such general acceptance that we
deem it unnecessary to cite authorities in support thereof then came Marvel
BuildingCorporationv.PhilippineWarDamageCommission, where respondent, a
United States Agency established to compensate damages suffered by the
Philippines during World War II was held as falling within the above doctrine as the
suit against it would eventually be a charge against or financial liability of the
United States Government because ... , the Commission has no funds of its own for
the purpose of paying money judgments.' The Syquia ruling was again explicitly
relied upon in MarquezLimv.Nelson, involving a complaint for the recovery of a
motor launch, plus damages, the special defense interposed being 'that the vessel
belonged to the United States Government, that the defendants merely acted as
agents of said Government, and that the United States Government is therefore
the real party in interest.' So it was in Philippine AlienPropertyAdministrationv.
Castelo, where it was held that a suit against Alien Property Custodian and the
Attorney General of the United States involving vested property under the Trading
with the Enemy Act is in substance a suit against the United States. To the same
effect is Parrenov.McGranery, as the following excerpt from the opinion of justice
Tuazon clearly shows: 'It is a widely accepted principle of international law, which
is made a part of the law of the land (Article II, Section 3 of the Constitution), that a
foreign state may not be brought to suit before the courts of another state or its
own courts without its consent.' Finally, there isJohnsonv.Turner, an appeal by
the defendant, then Commanding General, Philippine Command (Air Force, with
office at Clark Field) from a decision ordering the return to plaintiff of the
confiscated military payment certificates known as scrip money. In reversing the
lower court decision, this Tribunal, through Justice Montemayor, relied on Syquia
v.Almeda Lopez, explaining why it could not be sustained.
It bears stressing at this point that the above observations do not confer on the United States of
America a 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.
There is no question that the United States of America, like any other state, will be deemed to
have impliedly waived its non-suability if it has entered into a contract in its proprietary or
private capacity. It is only when the contract involves its sovereign or governmental capacity
that no such waiver may be implied. This was our ruling inUnited StatesofAmericav.
Ruiz,
22
where the transaction in question dealt with the improvement of the wharves in the
naval installation at Subic Bay. As this was a clearly governmental function, we held that the
contract did not operate to divest the United States of its sovereign immunity from suit. In the
words of Justice Vicente Abad Santos:
The traditional rule of immunity exempts a State from being sued in the courts of
another State without its consent or waiver. This rule is a necessary consequence
of the principles of independence and equality of States. However, the rules of
International Law are not petrified; they are constantly developing and evolving.
And because the activities of states have multiplied, it has been necessary to
distinguish them between sovereign and governmental acts (jure imperii) and
private, commercial and proprietary acts (jure gestionis). The result is that State
immunity now extends only to acts jure imperii The restrictive application of State
immunity is now the rule in the United States, the United kingdom and other
states in Western Europe.
xxx xxxxxx
The restrictive application of State immunity is proper only when the proceedings
arise out of commercial transactions of the foreign sovereign, its commercial
activities or economic affairs. Stated differently, a State may be said to have
descended to the level of an individual and can thus be deemed to have tacitly
given its consent to be sued only when it enters into business contracts. It does not
apply where the contract relates to the exercise of its sovereign functions. In this
case the projects are an integral part of the naval base which is devoted to the
defense of both the United States and the Philippines, indisputably a function of
the government of the highest order; they are not utilized for nor dedicated to
commercial or business purposes.
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.
In Festejov.Fernando,
23
a bureau director, acting without any authority whatsoever,
appropriated private land and converted it into public irrigation ditches. Sued for the value of
the lots invalidly taken by him, he moved to dismiss the complaint on the ground that the suit
was in effect against the Philippine government, which had not given its consent to be sued.
This Court sustained the denial of the motion and held that the doctrine of state immunity was
not applicable. The director was being sued in his private capacity for a personal tort.
With these considerations in mind, we now proceed to resolve the cases at hand.
III
It is clear from a study of the records of G.R. No. 80018 that the individually-named petitioners
therein were acting in the exercise of their official functions when they conducted the buy-bust
operation against the complainant and thereafter testified against him at his trial. The said
petitioners were in fact connected with the Air Force Office of Special Investigators and were
charged precisely with the function of preventing the distribution, possession and use of
prohibited drugs and prosecuting those guilty of such acts. It cannot for a moment be imagined
that they were acting in their private or unofficial capacity when they apprehended and later
testified against the complainant. It follows that for discharging their duties as agents of the
United States, they cannot be directly impleaded for acts imputable to their principal, which has
not given its consent to be sued. As we observed in Sandersv.Veridiano:
24

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.
The private respondent invokes Article 2180 of the Civil Code which holds the government
liable if it acts through a special agent. The argument, it would seem, is premised on the ground
that since the officers are designated "special agents," the United States government should be
liable for their torts.
There seems to be a failure to distinguish between suability and liability and a misconception
that the two terms are synonymous. Suability depends on the consent of the state to be sued,
liability on the applicable law and the established facts. The circumstance that a state is suable
does not necessarily mean that it is liable; on the other hand, it can never be held liable if it
does not first consent to be sued. Liability is not conceded by the mere fact that the state has
allowed itself to be sued. When the state does waive its sovereign immunity, it is only giving the
plaintiff the chance to prove, if it can, that the defendant is liable.
The said article establishes a rule of liability, not suability. The government may be held liable
under this rule only if it first allows itself to be sued through any of the accepted forms of
consent.
Moreover, the agent performing his regular functions is not a special agent even if he is so
denominated, as in the case at bar. No less important, the said provision appears to regulate
only the relations of the local state with its inhabitants and, hence, applies only to the Philippine
government and not to foreign governments impleaded in our courts.
We reject the conclusion of the trial court that the answer filed by the special counsel of the
Office of the Sheriff Judge Advocate of Clark Air Base was a submission by the United States
government to its jurisdiction. As we noted in Republicv.Purisima,
25
express waiver of
immunity cannot be made by a mere counsel of the government but must be effected through
a duly-enacted statute. Neither does such answer come under the implied forms of consent as
earlier discussed.
But even as we are certain that the individual petitioners in G.R. No. 80018 were acting in the
discharge of their official functions, we hesitate to make the same conclusion in G.R. No. 80258.
The contradictory factual allegations in this case deserve in our view a closer study of what
actually happened to the plaintiffs. The record is too meager to indicate if the defendants were
really discharging their official duties or had actually exceeded their authority when the incident
in question occurred. Lacking this information, this Court cannot directly decide this case. The
needed inquiry must first be made by the lower court so it may assess and resolve the
conflicting claims of the parties on the basis of the evidence that has yet to be presented at the
trial. Only after it shall have determined in what capacity the petitioners were acting at the time
of the incident in question will this Court determine, if still necessary, if the doctrine of state
immunity is applicable.
In G.R. No. 79470, private respondent Genove was employed as a cook in the Main Club located
at the U.S. Air Force Recreation Center, also known as the Open Mess Complex, at John Hay Air
Station. As manager of this complex, petitioner Lamachia is responsible for eleven diversified
activities generating an annual income of $2 million. Under his executive management are
three service restaurants, a cafeteria, a bakery, a Class VI store, a coffee and pantry shop, a
main cashier cage, an administrative office, and a decentralized warehouse which maintains a
stock level of $200,000.00 per month in resale items. He supervises 167 employees, one of
whom was Genove, with whom the United States government has concluded a collective
bargaining agreement.
From these circumstances, the Court can assume that the restaurant services offered at the
John Hay Air Station partake of the nature of a business enterprise undertaken by the United
States government in its proprietary capacity. Such services are not extended to the American
servicemen for free as a perquisite of membership in the Armed Forces of the United States.
Neither does it appear that they are exclusively offered to these servicemen; on the contrary, it
is well known that they are available to the general public as well, including the tourists in
Baguio City, many of whom make it a point to visit John Hay for this reason. All persons availing
themselves of this facility pay for the privilege like all other customers as in ordinary
restaurants. Although the prices are concededly reasonable and relatively low, such services are
undoubtedly operated for profit, as a commercial and not a governmental activity.
The consequence of this finding is that the petitioners cannot invoke the doctrine of state
immunity to justify the dismissal of the damage suit against them by Genove. Such defense will
not prosper even if it be established that they were acting as agents of the United States when
they investigated and later dismissed Genove. For that matter, not even the United States
government itself can claim such immunity. The reason is that by entering into the employment
contract with Genove in the discharge of its proprietary functions, it impliedly divested itself of
its sovereign immunity from suit.
But these considerations notwithstanding, we hold that the complaint against the petitioners in
the court below must still be dismissed. While suable, the petitioners are nevertheless not
liable. It is obvious that the claim for damages cannot be allowed on the strength of the
evidence before us, which we have carefully examined.
The dismissal of the private respondent was decided upon only after a thorough investigation
where it was established beyond doubt that he had polluted the soup stock with urine. The
investigation, in fact, did not stop there. Despite the definitive finding of Genove's guilt, the
case was still referred to the board of arbitrators provided for in the collective bargaining
agreement. This board unanimously affirmed the findings of the investigators and
recommended Genove's dismissal. There was nothing arbitrary about the proceedings. The
petitioners acted quite properly in terminating the private respondent's employment for his
unbelievably nauseating act. It is surprising that he should still have the temerity to file his
complaint for damages after committing his utterly disgusting offense.
Concerning G.R. No. 76607, we also find that the barbershops subject of the concessions
granted by the United States government are commercial enterprises operated by private
person's. They are not agencies of the United States Armed Forces nor are their facilities
demandable as a matter of right by the American servicemen. These establishments provide for
the grooming needs of their customers and offer not only the basic haircut and shave (as
required in most military organizations) but such other amenities as shampoo, massage,
manicure and other similar indulgences. And all for a fee. Interestingly, one of the
concessionaires, private respondent Valencia, was even sent abroad to improve his tonsorial
business, presumably for the benefit of his customers. No less significantly, if not more so, all
the barbershop concessionaires are under the terms of their contracts, required to remit to the
United States government fixed commissions in consideration of the exclusive concessions
granted to them in their respective areas.
This being the case, the petitioners cannot plead any immunity from the complaint filed by the
private respondents in the court below. The contracts in question being decidedly commercial,
the conclusion reached in the UnitedStatesofAmericav.Ruiz case cannot be applied here.
The Court would have directly resolved the claims against the defendants as we have done in
G.R. No. 79470, except for the paucity of the record in the case at hand. The evidence of the
alleged irregularity in the grant of the barbershop concessions is not before us. This means that,
as in G.R. No. 80258, the respondent court will have to receive that evidence first, so it can later
determine on the basis thereof if the plaintiffs are entitled to the relief they seek. Accordingly,
this case must also be remanded to the court below for further proceedings.
IV
There are a number of other cases now pending before us which also involve the question of
the immunity of the United States from the jurisdiction of the Philippines. This is cause for
regret, indeed, as they mar the traditional friendship between two countries long allied in the
cause of democracy. It is hoped that the so-called "irritants" in their relations will be resolved in
a spirit of mutual accommodation and respect, without the inconvenience and asperity of
litigation and always with justice to both parties.
WHEREFORE, after considering all the above premises, the Court hereby renders judgment as
follows:
1. In G.R. No. 76607, the petition is DISMISSED and the respondent judge is
directed to proceed with the hearing and decision of Civil Case No. 4772. The
temporary restraining order dated December 11, 1986, is LIFTED.
2. In G.R. No. 79470, the petition is GRANTED and Civil Case No. 829-R(298) is
DISMISSED.
3. In G.R. No. 80018, the petition is GRANTED and Civil Case No. 115-C-87 is
DISMISSED. The temporary restraining order dated October 14, 1987, is made
permanent.
4. In G.R. No. 80258, the petition is DISMISSED and the respondent court is
directed to proceed with the hearing and decision of Civil Case No. 4996. The
temporary restraining order dated October 27, 1987, is LIFTED.
All without any pronouncement as to costs.
SO ORDERED.
Fernan,C.J.,Narvasa,Melencio-Herrera,Gutierrez,Jr.,Paras,Feliciano,Gancayco,Padilla,Bidin,
Sarmiento,Cortes,Grio-Aquino,MedialdeaandRegalado,JJ.,concur.