Page 1 of 48
A. NATIONAL TERRITROY;
1. ARCHIPELAGIC DOCTRINE
PROF. MERLIN M. MAGALLONA v. HON. EDUARDO
ERMITA
G.R No. 187167 August 16, 2011
CARPIO, J.:
FACTS
In 1961, Congress passed Republic Act No. 3046 (RA
3046) demarcating the maritime baselines of the Philippines as
an archipelagic State. This law followed the framing of the
Convention on the Territorial Sea and the Contiguous Zone in
1958 (UNCLOS I), codifying, among others, the sovereign right
of States parties over their "territorial sea," the breadth of which,
however, was left undetermined. In March 2009, Republic Act
9522, an act defining the archipelagic baselines of the
Philippines was enacted – the law is also known as the
Baselines Law. This law was meant to comply with the terms of
the third United Nations Convention on the Law of the Sea
(UNCLOS III), ratified by the Philippines in February 1984.
Professor Merlin Magallona et al questioned the
validity of RA 9522 as they contend, among others, that the law
decreased the national territory of the Philippines hence the law
is unconstitutional. Some of their particular arguments are as
follows:
a. the law abandoned the demarcation set by the
Treaty of Paris and other ancillary treaties – this also resulted to
the exclusion of our claim over Sabah;
b. the law, as well as UNCLOS itself, describes the
Philippine waters as “archipelagic” waters which, in international
law, opens our waters landward of the baselines to maritime
passage by all vessels (innocent passage) and aircrafts
(overflight), undermining Philippine sovereignty and national
security, contravening the country’s nuclear-free policy, and
damaging marine resources, in violation of relevant
constitutional provisions;
c. the classification of the Kalayaan Island Group
(KIG), as well as the Scarborough Shoal (bajo de masinloc), as
a “regime of islands” pursuant to UNCLOS results in the loss of
a large maritime area but also prejudices the livelihood of
subsistence fishermen.
Hence, petitioners files action for the writs of certiorari
and prohibition assails the constitutionality of Republic Act No.
95221 (RA 9522) adjusting the country’s archipelagic baselines
and classifying the baseline regime of nearby territories.
ISSUE
WON RA 9522 is unconstitutional
RULING
The provision of Art I 1987 Constitution clearly affirms
the archipelagic doctrine, which we connect the outermost
points of our archipelago with straight baselines and consider all
the waters enclosed thereby as internal waters. RA 9522, as a
Statutory Tool to Demarcate the Country’s Maritime Zones and
Continental Shelf Under UNCLOS III, gave nothing less than an
explicit definition in congruent with the archipelagic doctrine.
UNCLOS III has nothing to do with the acquisition (or
loss) of territory. It is a multilateral treaty regulating, among
others, sea-use rights over maritime zones (i.e., the territorial
waters [12 nautical miles from the baselines], contiguous zone
[24 nautical miles from the baselines], exclusive economic zone
[200 nautical miles from the baselines]), and continental shelves
that UNCLOS III delimits. UNCLOS III was the culmination of
decades-long negotiations among United Nations members to
codify norms regulating the conduct of States in the worlds
oceans and submarine areas, recognizing coastal and
archipelagic States graduated authority over a limited span of
waters and submarine lands along their coasts.
On the other hand, baselines laws such as RA 9522
are enacted by UNCLOS III States parties to mark-out specific
basepoints along their coasts from which baselines are drawn,
either straight or contoured, to serve as geographic starting
points to measure the breadth of the maritime zones and
continental shelf. Article 48 of UNCLOS III on archipelagic
States like ours could not be any clearer: Article 48.
Measurement of the breadth of the territorial sea, the contiguous
zone, the exclusive economic zone and the continental shelf.
The breadth of the territorial sea, the contiguous zone, the
exclusive economic zone and the continental shelf shall be
measured from archipelagic baselines drawn in accordance with
article 47.
Thus, baselines laws are nothing but statutory
mechanisms for UNCLOS III States parties to delimit with
precision the extent of their maritime zones and continental
shelves. In turn, this gives notice to the rest of the international
community of the scope of the maritime space and submarine
areas within which States parties exercise treaty-based rights,
namely, the exercise of sovereignty over territorial waters
(Article 2), the jurisdiction to enforce customs, fiscal,
immigration, and sanitation laws in the contiguous zone (Article
33), and the right to exploit the living and non-living resources in
the exclusive economic zone (Article 56) and continental shelf
(Article 77).\
Even under petitioners theory that the Philippine
territory embraces the islands and all the waters within the
rectangular area delimited in the Treaty of Paris, the baselines
of the Philippines would still have to be drawn in accordance
with RA 9522 because this is the only way to draw the baselines
in conformity with UNCLOS III. The baselines cannot be drawn
from the boundaries or other portions of the rectangular area
delineated in the Treaty of Paris, but from the outermost islands
and drying reefs of the archipelago. UNCLOS III and its ancillary
baselines laws play no role in the acquisition, enlargement or,
as petitioners claim, diminution of territory. Under traditional
international law typology, States acquire (or conversely, lose)
territory through occupation, accretion, cession and prescription,
not by executing multilateral treaties on the regulations of sea-
use rights or enacting statutes to comply with the treatys terms
to delimit maritime zones and continental shelves. Territorial
claims to land features are outside UNCLOS III, and are instead
governed by the rules on general international law.
Whether referred to as Philippine internal waters under
Article I of the Constitution or as archipelagic waters under
UNCLOS III (Article 49 [1]), the Philippines exercises
sovereignty over the body of water lying landward of the
baselines, including the air space over it and the submarine
areas underneath. UNCLOS III affirms this under Art. 49 which
states that: Article 49. Legal status of archipelagic waters, of the
air space over archipelagic waters and of their bed and subsoil.
1. The sovereignty of an archipelagic State extends to the
waters enclosed by the archipelagic baselines drawn in
accordance with article 47, described as archipelagic waters,
regardless of their depth or distance from the coast.
2. This sovereignty extends to the air space over the
archipelagic waters, as well as to their bed and subsoil, and the
resources contained therein.
Ang, Bartolata, Bellosillo, Estanislao, Garcia, Improgo, Polero, Siriban

xxxx
4. The regime of archipelagic sea lanes passage established in
this Part shall not in other respects affect the status of the
archipelagic waters, including the sea lanes, or the exercise by
the archipelagic State of its sovereignty over such waters and
their air space, bed and subsoil, and the resources contained
therein.
The fact of sovereignty, however, does not preclude the
operation of municipal and international law norms subjecting
the territorial sea or archipelagic waters to necessary, if not
marginal, burdens in the interest of maintaining unimpeded,
expeditious international navigation, consistent with the
international law principle of freedom of navigation. Thus,
domestically, the political branches of the Philippine
government, in the competent discharge of their constitutional
powers, may pass legislation designating routes within the
archipelagic waters to regulate innocent and sea lanes passage.
Indeed, bills drawing nautical highways for sea lanes passage
are now pending in Congress.
The fact that for archipelagic States, their archipelagic waters
are subject to both the right of innocent passage and sea lanes
passage does not place them in lesser footing vis--vis
continental coastal States which are subject, in their territorial
sea, to the right of innocent passage and the right of transit
passage through international straits. The imposition of these
passage rights through archipelagic waters under UNCLOS III
was a concession by archipelagic States, in exchange for their
right to claim all the waters landward of their baselines,
regardless of their depth or distance from the coast, as
archipelagic waters subject to their territorial sovereignty. More
importantly, the recognition of archipelagic States archipelago
and the waters enclosed by their baselines as one cohesive
entity prevents the treatment of their islands as separate islands
under UNCLOS III. Separate islands generate their own
maritime zones, placing the waters between islands separated
by more than 24 nautical miles beyond the States territorial
sovereignty, subjecting these waters to the rights of other States
under UNCLOS III.
The demarcation of the baselines enables the Philippines to
delimit its exclusive economic zone, reserving solely to the
Philippines the exploitation of all living and non-living resources
within such zone. Such a maritime delineation binds the
international community since the delineation is in strict
observance of UNCLOS III. If the maritime delineation is
contrary to UNCLOS III, the international community will of
course reject it and will refuse to be bound by it. UNCLOS III
favors States with a long coastline like the Philippines. UNCLOS
III creates a sui generis maritime space the exclusive economic
zone in waters previously part of the high seas. UNCLOS III
grants new rights to coastal States to exclusively exploit the
resources found within this zone up to 200 nautical miles.
UNCLOS III, however, preserves the traditional freedom of
navigation of other States that attached to this zone beyond the
territorial sea before UNCLOS III.
The enactment of UNCLOS III compliant baselines law for the
Philippine archipelago and adjacent areas, as embodied in RA
9522, allows an internationally-recognized delimitation of the
breadth of the Philippines maritime zones and continental shelf.
RA 9522 is therefore a most vital step on the part of the
Philippines in safeguarding its maritime zones, consistent with
the Constitution and our national interest.
DISPOSITIVE PORTION
WHEREFORE, we DISMISS the petition.
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B. STATE IMMUNITY/ROYAL PREROGATIVE
BASIS; RATIONALE
UNITED STATES OF AMERICA and MAXINE
BRADFORD, petitioners, vs.
HON. LUIS R. REYES, as Presiding Judge of Branch 22,
Regional Trial Court of Cavite, and NELIA T.
MONTOYA, respondents.
G.R. No. 79253 March 1, 1993
DAVIDE, JR.
TOPIC: STATE IMMUNITY
FACTS
Nelia Montoya (private respondent), is an American citizen who
was employed as an identification (I.D.) checker at the U.S.
Navy Exchange (NEX) at the Joint United States Military
Assistance Group (JUSMAG) headquarters in Quezon City. She
is married to one Edgardo H. Montoya, a Filipino-American
serviceman employed by the U.S. Navy and stationed in San
Francisco, California. Petitioner Maxine Bradford is likewise an
American citizen who was the activity exchange manager at the
said JUSMAG Headquarters.
As a consequence of an incident whereby her body and
belongings were searched after she had bought some items
from the retail store of the NEX JUSMAG, where she had
purchasing privileges, and while she was already at the parking
area, Montoya filed a complaint with the RTC of her place of
residence — Cavite — against Bradford for damages due to the
oppressive and discriminatory acts committed by the latter in
excess of her authority as store manager of the NEX JUSMAG.
The complaint, docketed and subsequently raffled off to Branch
22 at Imus, Cavite, alleges the following, material operative
facts:
xxx xxx xxx
3. That on January 22, 1987, after working as the duty ID
checker from 7:45 to 11:45 a.m., plaintiff went shopping and left
the store at l2:00 noon of that day;
4. That on the way to her car while already outside the store,
Mrs. Yong Kennedy, also an ID checker, upon the instruction of
the store manager, Ms. Maxine Bradford, approached plaintiff
and informed her that she needed to search her bags;
5. That plaintiff went to defendant, who was then outside the
store talking to some men, to protest the search but she was
informed by the defendant that the search is to be made on all
JUSMAG employees that day;
6. That the search was thereafter made on the person, car and
bags of the plaintiff by Mrs. Yong Kennedy in the presence of
the defendant and numerous curious onlookers;
7. That having found nothing irregular on her person and
belongings, plaintiff was allowed to leave the premises;
8. That feeling aggrieved, plaintiff checked the records and
discovered that she was the only one whose person and
belonging was (sic) searched that day contrary to defendant's
allegation as set forth in par. 5 hereof and as evidenced by the
memorandum dated January 30, 1987 made by other Filipino
JUSMAG employees, a photocopy of which is hereto attached
as ANNEX "A" and made integral (sic) part hereof:
9. That moreover, a check with Navy Exchange Security
Manager, R.L. Roynon on January 27, 1987 was made and she
was informed by Mr. Roynon that it is a matter of policy that
customers and employees of NEX JUSMAG are not searched
outside the store unless there is a very strong evidence of a
wrongdoing;
Ang, Bartolata, Bellosillo, Estanislao, Garcia, Improgo, Polero, Siriban

10. That plaintiff knows of no circumstances sufficient to trigger
suspicion of a wrongdoing on her part but on the other hand, is
aware of the propensity of defendant to lay suspicion on Filipinos
for theft and/or shoplifting;
11. That plaintiff formally protested the illegal search on
February 14, 1987 in a letter addressed to Mr. R.L. Roynon, a
photocopy of which is hereto attached as ANNEX "B" and made
integral (sic) part hereof; but no action was undertaken by the
said officer;
12. That the illegal search on the person and belongings of the
plaintiff in front of many people has subjected the plaintiff to
speculations of theft, shoplifting and such other wrongdoings
and has exposed her to contempt and ridicule which was caused
her undue embarrassment and indignity;
13. That since the act could not have been motivated by other
(sic) reason than racial discrimination in our own land, the act
constitute (sic) a blow to our national pride and dignity which has
caused the plaintiff a feeling of anger for which she suffers
sleepless nights and wounded feelings.
Summons and a copy of the complaint were served on Bradford.
In response thereto, she filed two (2) motions for extension of
time to file her Answer which were both granted by the trial court.
The first was filed through Atty. Miguel Famularcano, Jr., who
asked for a 20-day extension. The second, filed through the law
firm of Luna, Sison and Manas, sought a 15-day extension.
Instead of filing her Answer, she, together with the government
of the United States of America (hereinafter referred to as the
public petitioner), filed on 25 June 1987, also through the law
firm of Luna, Sison and Manas, a Motion to Dismiss based on
the following grounds:
1) (This) action is in effect a suit against the United States of
America, a foreign sovereign immune from suit without its
consent for the cause of action pleaded in the complaint; and
2) Defendant, Maxine Bradford, as manager of the US Navy
Exchange Branch at JUSMAG, Quezon City, is immune from
suit for act(s) done by her in the performance of her official
functions under the Philippines-United States Military
Assistance Agreement of 1947 and Military Bases Agreement of
1947, as amended.
RTC RULING
XXX, it is hereby determined that the unreasonable search on
the plaintiff's person and bag caused (sic) done recklessly and
oppressively by the defendant, violated, impaired and
undermined the plaintiff's liberty guaranteed by the Constitution,
entitling her to moral and exemplary damages against the
defendant. The search has unduly subjected the plaintiff to
intense humiliation and indignities and had consequently
ridiculed and embarrassed publicly said plaintiff so gravely and
immeasurably.
No motion for reconsideration or appeal had been interposed by
Bradford challenging Decision which she had received,
respondent Judge issued an order directing that an entry of final
judgment be made. A copy thereof was received by Bradford on
21 October, 1987.
ISSUE
Whether or not the trial court committed grave abuse of
discretion in denying the motion to dismiss based on the
following grounds:
(a) the complaint in Civil Case No. 224-87 is in effect a suit
against the public petitioner, a foreign sovereign immune from
suit which has not given consent to such suit; and
(b) Bradford is immune from suit for acts done by her in the
performance of her official functions as manager of the U.S.
Navy Exchange of JUSMAG pursuant to the Philippines-United
Page 3 of 48
States Military Assistance Agreement of 1947 and the Military
Bases Agreement of 1947, as amended.
SC RULING
The complaint in Civil Case No. 224-87 is for damages arising
from what Montoya describes as an "illegal search" on her
"person and belongings" conducted outside the JUSMAG
premises in front of many people and upon the orders of
Bradford, who has the propensity for laying suspicion on
Filipinos for theft or shoplifting. It is averred that the said search
was directed only against Montoya.
Howsoever viewed, it is beyond doubt that Montoya's cause of
action is premised on the theory that the acts complained of
were committed by Bradford not only outside the scope of her
authority — or more specifically, in her private capacity — but
also outside the territory where she exercises such authority,
that is, outside the NEX-JUSMAG — particularly, at the parking
area which has not been shown to form part of the facility of
which she was the manager. By their motion to dismiss, public
petitioner and Bradford are deemed to have hypothetically
admitted the truth of the allegation in the complaint which
support this theory.
The doctrine of state immunity and the exceptions thereto are
summarized in Shauf vs. Court of Appeals, thus:
I. The rule that a state may not be sued without its consent, now
expressed in Article XVI Section 3, of the 1987 Constitution, is
one of the generally accepted principles of international law that
we have adopted as part of the law of our land under Article II,
Section 2. This latter provision merely reiterates a policy earlier
embodied in the 1935 and 1973 Constitutions and also intended
to manifest our resolve to abide by the rules of the international
community.
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. It must be noted, however,
that the rule is not so all-encompassing as to be applicable
under all circumstances.
It is a different matter where the public official is made to account
in his capacity as such for acts contrary to law and injurious to
the rights of plaintiff. As was clearly set forth by Justice Zaldivar
in Director of the Bureau of Telecommunications, et al. vs.
Aligaen, etc., et al. "Inasmuch as the State authorizes only legal
acts by its officers, unauthorized acts of government officials or
officers are not acts of the State, and an action against the
officials or officers by one whose rights have been invaded or
violated by such acts, for the protection of his rights, is not a suit
against the State within the rule of immunity of the State from
suit. In the same tenor, it has been said that an action at law or
suit in equity against a State officer or the director of a State
department on the ground that, while claiming to act or the State,
he violates or invades the personal and property rights of the
plaintiff, under an unconstitutional act or under an assumption
of authority which he does not have, is not a suit against the
State within the constitutional provision that the State may not
be sued without its consent." The rationale for this ruling is that
the doctrinaire of state immunity cannot be used as an
instrument for perpetrating an injustice.
The Court’s pronouncements in other cases state that the
doctrine of immunity from suit will not apply and may not be
Ang, Bartolata, Bellosillo, Estanislao, Garcia, Improgo, Polero, Siriban

invoked where the public official is being sued in his private and
personal capacity as an ordinary citizen. The cloak of protection
afforded the officers and agents of the government is removed
the moment they are sued in their individual capacity. This
situation usually arises where the public official acts without
authority or in excess of the powers vested in him. It is a well-
settled principle of law that a public official may be liable in his
personal private capacity for whatever damage he may have
caused by his act done
with malice and in bad faith, or beyond the scope of his authority
or jurisdiction.
The agents and officials of the United States armed forces
stationed in Clark Air Base are no exception to this rule. In the
case of United States of America, et al. vs. Guinto, etc., et al.,
ante, we declared:
It bears stressing at this point that the above observations do
not confer on the United States of America Blanket immunity for
all acts done by it or its agents in the Philippines. Neither may
the other petitioners claim that they are also insulated from suit
in this country merely because they have acted as agents of the
United States in the discharge of their official functions.
Since it is apparent from the complaint that Bradford was sued
in her private or personal capacity for acts allegedly done
beyond the scope and even beyond her place of official
functions, said complaint is not then vulnerable to a motion to
dismiss based on the grounds relied upon by the petitioners
because as a consequence of the hypothetical admission of the
truth of the allegations therein, the case falls within the exception
to the doctrine of state immunity.
In the recent cases of Williams vs. Rarang and Minucher vs.
Court of Appeals, this Court reiterated this exception. In the
former, this Court observed:
There is no question, therefore, that the two (2) petitioners
actively participated in screening the features and articles in the
POD as part of their official functions. Under the rule that U.S.
officials in the performance of their official functions are immune
from suit, then it should follow that petitioners may not be held
liable for the questioned publication.
It is to be noted, however, that the petitioners were sued in their
personal capacities for their alleged tortious acts in publishing a
libelous article.
The question, therefore, arises — are American naval officers
who commit a crime or tortious act while discharging official
functions still covered by the principle of state immunity from
suit? Pursuing the question further, does the grant of rights,
power, and authority to the United States under the RP-US
Bases Treaty cover immunity of its officers from crimes and
torts? Our answer is No.
In the latter, even on the claim of diplomatic immunity — which
Bradford does not in fact pretend to have in the instant case as
she is not among those granted diplomatic immunity under
Article 16(b) of the 1953 Military Assistance Agreement creating
the JUSMAG— this Court ruled:
Even Article 31 of the Vienna Convention on Diplomatic
Relations admits of exceptions. It reads:
1. A diplomatic agent shall enjoy immunity from the criminal
jurisdiction of the receiving State. He shall also enjoy immunity
from its civil and administrative jurisdiction except in the case of:
xxx xxx xxx
(c) an action relating to any professional or commercial activity
exercised by the diplomatic agent in the receiving State outside
his official functions (Emphasis supplied).
There can be no doubt that on the basis of the allegations in the
complaint, Montoya has a sufficient and viable cause of action.
Page 4 of 48
Bradford's purported non-suability on the ground of state
immunity is then a defense which may be pleaded in the answer
and proven at the trial.
Since Bradford did not file her Answer within the reglementary
period, the trial court correctly declared her in default upon
motion of the private respondent. The judgment then rendered
against her on 10 September 1987 after the ex parte reception
of the evidence for the private respondent and before this Court
issued the Temporary Restraining Order on 7 December 1987
cannot be impugned. The filing of the instant petition and the
knowledge thereof by the trial court did not prevent the latter
from proceeding with Civil Case No. 224-87. "It is elementary
that the mere pendency of a special civil action for certiorari,
commenced in relation to a case pending before a lower Court,
does not interrupt the course of the latter when there is no writ
of injunction restraining it."
DISPOSITIVE PORTION
WHEREFORE, the instant petition is DENIED for lack of merit.
The Temporary Restraining Order of 7 December 1987 is
hereby LIFTED.
-----------------------xxx------------------------------
2. ACT OF STATE DOCTRINE
Presidential Commission on Good Government and
Magtanggol Gunigundo, in his capacity as chairman
thereof, vs. Sandigan Bayan and Officeco Holdings, N.V.
G.R. No. 124772 / 14 August 2007 / Justice Tinga
State Immunity, Royal Prerogative of Dishonesty /Act of State
Doctrine
FACTS:
On 7 April 1986, in connection with criminal proceedings
initiated in the Philippines to locate, sequester and seek
restitution of alleged ill-gotten wealth amassed by the Marcoses
and other accused from the Philippine Government, the Office
of the Solicitor General (OSG) wrote the Federal Office for
Police Matters in Berne, Switzerland, requesting assistance for
the latter office to: (a) ascertain and provide the OSG with
information as to where and in which cantons the ill-gotten
fortune of the Marcoses and other accused are located, the
names of the depositors and the banks and the amounts
involved; and (b) take necessary precautionary measures, such
as sequestration, to freeze the assets in order to preserve their
existing value and prevent any further transfer thereof (herein
referred to as the IMAC request).
On 29 May 1986, the Office of the District Attorney in Zurich,
pursuant to the OSG's request, issued an Order directing the
Swiss Banks in Zurich to freeze the accounts of the accused in
PCGG I.S. No. 1 and in the "List of Companies and
Foundations." In compliance with said Order, Bankers Trust
A.G. (BTAG) of Zurich froze the accounts of Officeco Holdings,
N.V. (Officeco).
Officeco appealed the Order of the District Attorney to the
Attorney General of the Canton of Zurich. The Attorney General
affirmed the Order of the District Attorney. Officeco further
appealed to the Swiss Federal Court which likewise dismissed
the appeal on 31 May 1989.
Thereafter, in late 1992, Officeco made representations with the
OSG and the PCGG for them to officially advise the Swiss
Federal Office for Police Matters to unfreeze Officeco's assets.
The PCGG required Officeco to present countervailing evidence
Ang, Bartolata, Bellosillo, Estanislao, Garcia, Improgo, Polero, Siriban

to support its request.
Instead of complying with the PCGG requirement for it to submit
countervailing evidence, on 12 September 1994, Officeco filed
the complaintwhich was docketed as Civil Case No. 0164 of the
Sandiganbayan. The complaint prayed for the PCGG and the
OSG to officially advise the Swiss government to exclude from
the freeze or sequestration order the account of Officeco with
BTAG and to unconditionally release the said account to
Officeco.
The OSG filed a joint answer on 24 November 1994 in behalf of
all the defendants in Civil Case No. 0164. On 12 May 1995, the
PCGG itself filed a motion to dismiss which was denied by the
Sandiganbayan (Third Division) in its Resolution promulgated
on 11 January 1996. PCGG's motion for reconsideration was
likewise denied in another Resolution dated 29 March 1996.
Hence, this petition.
ISSUE/S:
Whether there is lack of jurisdiction based on act of state
doctrine.
HELD:
No, there is no lack of jurisdiction based on act of state doctrine.
The classic American statement of the act of state doctrine,
which appears to have taken root in England as early as 1674,
and began to emerge in American jurisprudence in the late
eighteenth and early nineteenth centuries, is found in Underhill
v. Hernandez, where Chief Justice Fuller said for a unanimous
Court:
Every sovereign state is bound to respect the independence of
every other state, and the courts of one country will not sit in
judgment on the acts of the government of another, done within
its territory. Redress of grievances by reason of such acts must
be obtained through the means open to be availed of by
sovereign powers as between themselves.
The act of state doctrine is one of the methods by which States
prevent their national courts from deciding disputes which relate
to the internal affairs of another State, the other two being
immunity and non-justiciability. It is an avoidance technique that
is directly related to a State's obligation to respect the
independence and equality of other States by not requiring them
to submit to adjudication in a national court or to settlement of
their disputes without their consent. It requires the forum court
to exercise restraint in the adjudication of disputes relating to
legislative or other governmental acts which a foreign State has
performed within its territorial limits.
It is petitioners' contention that the Sandiganbayan "could not
grant or deny the prayers in [Officeco's] complaint without first
examining and scrutinizing the freeze order of the Swiss officials
in the light of the evidence, which however is in the possession
of said officials" and that it would therefore "sit in judgment on
the acts of the government of another country." We disagree.
The parameters of the use of the act of state doctrine were
clarified in Banco Nacional de Cuba v. Sabbatino. There, the
U.S. Supreme Court held that international law does not require
the application of this doctrine nor does it forbid the application
of the rule even if it is claimed that the act of state in question
violated international law. Moreover, due to the doctrine's
peculiar nation-to-nation character, in practice the usual method
for an individual to seek relief is to exhaust local remedies and
Page 5 of 48
then repair to the executive authorities of his own state to
persuade them to champion his claim in diplomacy or before an
international tribunal.
Even assuming that international law requires the application of
the act of state doctrine, it bears stressing that the
Sandiganbayan will not examine and review the freeze orders
of the concerned Swiss officials in Civil Case No. 0164. The
Sandiganbayan will not require the Swiss officials to submit to
its adjudication nor will it settle a dispute involving said officials.
In fact, as prayed for in the complaint, the Sandiganbayan will
only review and examine the propriety of maintaining PCGG's
position with respect to Officeco's accounts with BTAG for the
purpose of further determining the propriety of issuing a writ
against the PCGG and the OSG. Everything considered, the act
of state doctrine finds no application in this case and petitioners'
resort to it is utterly mislaid.
--------------------------------xxx--------------------------
3. PROCESS OF SUGGESTION
B. STATE IMMUNITY/ROYAL PREROGATIVE BASIS;
RATIONALE
3. PROCESS OF SUGGESTION
THE HOLY SEE, vs.THE HON. ERIBERTO U. ROSARIO, JR.,
as Presiding Judge of the Regional Trial Court of Makati,
Branch 61 and STARBRIGHT SALES ENTERPRISES, INC.,
G.R. No. 101949 December 1, 1994
QUIASON, J.
FACTS: 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) registered in the name of Holy see.Said Lot
5-A is contiguous to Lots 5-B and 5-D 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 Starbright.
In view of the refusal of the squatters to vacate the lots sold to
Starbright, a dispute arose as to who of the parties has the
responsibility of evicting and clearing the land of squatters.
Starbright filed a complaint with the RTC for annulment of the
sale of the three parcels of land, and specific performance and
damages against Holy See, represented by the Papal Nuncio,
and three other defendants: namely, Msgr. Domingo A. Cirilos,
Jr., the PRC and Tropicana
Holy See 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.
RTC Ruling
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" Hence this petition.
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
Ang, Bartolata, Bellosillo, Estanislao, Garcia, Improgo, Polero, Siriban

contained in the petition of the Holy See insofar as they refer to
arguments relative to its claim of sovereign immunity from suit"
Star Bright questioned the personality or legal interest of the
Department of Foreign Affairs to intervene in the case in behalf
of the Holy See.
ISSUES: 1. Whether or not the Department of Foreign Affairs
has personality or legal interest to intervene in the case in behalf
of the Holy See. 2. Whether the Holy See is immune from suit
insofar as its business relations regarding selling a lot to a
private entity.
HELD. 1. YES. 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"
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 Catholic Migration Commission v. 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.
In World Health Organization v. Aquino, 48 SCRA 242 (1972),
the Secretary of Foreign Affairs sent the trial court a telegram to
that effect.
In Baer v. 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 amicus curiae.
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 counse. 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.
2. YES. 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. This
appears to be the universal practice in international relations.
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
Page 6 of 48
of the land as a condition and consequence of our admission in
the society of nations. 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 acts jure imperii of a state, but not with
regard to private acts or acts jure gestionis.
In the absence of legislation defining what activities and
transactions shall be considered "commercial" and as
constituting acts jure gestionis, 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 act jure imperii, especially when it is not undertaken
for gain or profit.
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 act jure gestionis.
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. Holy See 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.
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 Starbright. 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, the Department of Foreign Affairs
Ang, Bartolata, Bellosillo, Estanislao, Garcia, Improgo, Polero, Siriban

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.
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. 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. As
in International Catholic Migration Commission and in World
Health Organization, we abide by the certification of the
Department of Foreign Affairs.
DISPOSITIVE PORTION: WHEREFORE, the petition
for certiorari is GRANTED and the complaint in Civil Case No.
90-183 against petitioner is DISMISSED.
--------------------------------xxx------------------------------
4. DETERMINATION OF IMMUNITY
TOPIC: Determination of Immunity
JEFFREY LIANG (HUEFENG), petitioner, vs. PEOPLE OF
THE PHILIPPINES, respondent.
G.R. No. 125865. January 28, 2000
YNARES-SANTIAGO, J.:
FACTS: Liang is an economist working with the Asian
Development Bank (ADB). Sometime in 1994, for allegedly
uttering defamatory words against fellow ADB worker Joyce
Cabal, he was charged before the Metropolitan Trial Court
(MeTC) of Mandaluyong City with two counts of grave oral
defamation. Liang was arrested by virtue of a warrant issued by
the MeTC. After fixing petitioners bail at P2,400.00 per criminal
charge, the MeTC released him to the custody of the Security
Officer of ADB. The next day, the MeTC judge received an
"office of protocol" from the Department of Foreign Affairs (DFA)
stating that Liang is covered by immunity from legal process
under Section 45 of the Agreement between the ADB and the
Philippine Government regarding the Headquarters of the ADB
(hereinafter Agreement) in the country. Based on the said
protocol communication that Liang is immune from suit, the
MeTC judge without notice to the prosecution dismissed the two
criminal cases. The latter filed a motion for reconsideration
which was opposed by the DFA. When its motion was denied,
the prosecution filed a petition for certiorari and mandamus with
the Regional Trial Court (RTC) of Pasig City which set aside the
MeTC rulings and ordered the latter court to enforce the warrant
of arrest it earlier issued. After the motion for reconsideration
was denied, Liang elevated the case to this Court via a petition
for review arguing that he is covered by immunity under the
Agreement and that no preliminary investigation was held before
the criminal cases were filed in court.
ISSUE: Is Liang covered by the immunity under the Agreement
between ADB and the Philippine Government?
RULING: NO.
Page 7 of 48
First, courts cannot blindly adhere and take on its face the
communication from the DFA that petitioner is covered by any
immunity. The DFAs determination that a certain person is
covered by immunity is only preliminary which has no
binding effect in courts. In receiving ex-parte the DFAs advice
and in motu proprio dismissing the two criminal cases without
notice to the prosecution, the latters right to due process was
violated. It should be noted that due process is a right of the
accused as much as it is of the prosecution. The needed inquiry
in what capacity petitioner was acting at the time of the alleged
utterances requires for its resolution evidentiary basis that has
yet to be presented at the proper time. At any rate, it has been
ruled that the mere invocation of the immunity clause does
not ipso facto result in the dropping of the charges.
Second, under Section 45 of the Agreement which provides:
"Officers and staff of the Bank including for the purpose of this
Article experts and consultants performing missions for the Bank
shall enjoy the following privileges and immunities:
a.).......immunity from legal process with respect to acts
performed by them in their official capacity except when the
Bank waives the immunity."
the immunity mentioned therein is not absolute, but subject
to the exception that the act was done in "official capacity."
It is therefore necessary to determine if petitioners case falls
within the ambit of Section 45(a). Thus, the prosecution should
have been given the chance to rebut the DFA protocol and it
must be accorded the opportunity to present its controverting
evidence, should it so desire.
Third, slandering a person could not possibly be covered by
the immunity agreement because our laws do not allow the
commission of a crime, such as defamation, in the name of
official duty. The imputation of theft is ultra vires and cannot be
part of official functions. It is well-settled principle of law that a
public official may be liable in his personal private capacity for
whatever damage he may have caused by his act done with
malice or in bad faith or beyond the scope of his authority or
jurisdiction. It appears that even the governments chief legal
counsel, the Solicitor General, does not support the stand taken
by petitioner and that of the DFA.
Fourth, under the Vienna Convention on Diplomatic
Relations, a diplomatic agent, assuming petitioner is such,
enjoys immunity from criminal jurisdiction of the receiving
state except in the case of an action relating to any
professional or commercial activity exercised by the
diplomatic agent in the receiving state outside his official
functions. As already mentioned above, the commission of a
crime is not part of official duty.
WHEREFORE, the petition is DENIED.
-----------------------------xxx-------------------------------
TOPIC: Determination of Immunity
CASE TITLE: KHOSROW MINUCHER, petitioner, vs. HON.
COURT OF APPEALS and ARTHUR SCALZO, respondents.
G.R. No. 142396
DATE: February 11, 2003
PONENTE: Justice Vitug
FACTS: Sometime in May 1986, an Information for violation of
Section 4 of RA 6425 (Dangerous Drugs Act of 1972) was filed
against petitioner Khosrow Minucher and one Abbas Torabian
with the RTC of Pasig City. The criminal charge followed a buy-
bust operation conducted by the Philippine police narcotic
agents in the house of Minucher, an Iranian national, where a
Ang, Bartolata, Bellosillo, Estanislao, Garcia, Improgo, Polero, Siriban

quantity of heroin, a prohibited drug, was said to have been
seized.
The narcotic agents were accompanied by private respondent
Arthur Scalzo (Scalzo) who would, in due time, become one of
the principal witnesses for the prosecution. On 08 January 1988,
Presiding Judge Eutropio Migrino rendered a decision acquitting
the two accused.
On 03 August 1988, Minucher filed Civil Case No. 88-45691
before the RTC of Manila for damages on account of what he
claimed to have been trumped-up charges of drug trafficking
made by Scalzo. The Manila RTC detailed what it had found to
be the facts and circumstances surrounding the case (see
fulltext).
Brushing aside other procedural matters at the outset, on 14
June 1990, after almost two years since the institution of the civil
case, Scalzo filed a motion to dismiss the complaint on the
ground that, being a special agent of the United States Drug
Enforcement Administration, he was entitled to diplomatic
immunity. He attached to his motion Diplomatic Note No. 414 of
the United States Embassy, dated 29 May 1990, addressed to
the Department of Foreign Affairs of the Philippines and a
Certification, dated 11 June 1990, of Vice Consul Donna
Woodward, certifying that the note is a true and faithful copy of
its original. In an order of 25 June 1990, the trial court denied
the motion to dismiss.
On 31 October 1990, the Court of Appeals promulgated its
decision sustaining the diplomatic immunity of Scalzo and
ordering the dismissal of the complaint against him. Minucher
filed a petition for review with this Court, docketed G.R. No.
97765 and entitled "Khosrow Minucher vs. the Honorable Court
of Appeals, et. al. (cited in 214 SCRA 242), appealing the
judgment of the Court of Appeals. In a decision, dated 24
September 1992, penned by Justice (now Chief Justice) Hilario
Davide, Jr., this Court reversed the decision of the appellate
court and remanded the case to the lower court for trial. The
remand was ordered on the theses (a) that the Court of Appeals
erred in granting the motion to dismiss of Scalzo for lack of
jurisdiction over his person without even considering the issue
of the authenticity of Diplomatic Note No. 414 and (b) that the
complaint contained sufficient allegations to the effect that
Scalzo committed the imputed acts in his personal capacity and
outside the scope of his official duties and, absent any evidence
to the contrary, the issue on Scalzo’s diplomatic immunity could
not be taken up.
The Manila RTC thus continued with its hearings on the case
and reached a decision adjudging Scalzo liable to Minucher in
actual and compensatory damages of P520,000.00; moral
damages in the sum of P10 million; exemplary damages in the
sum of P100,000.00; attorney's fees in the sum of P200,000.00
plus costs. While the trial court gave credence to the claim of
Scalzo and the evidence presented by him that he was a
diplomatic agent entitled to immunity as such, it ruled that he,
nevertheless, should be held accountable for the acts
complained of committed outside his official duties. On appeal,
the Court of Appeals reversed the decision of the trial court and
sustained the defense of Scalzo that he was sufficiently clothed
with diplomatic immunity during his term of duty and thereby
immune from the criminal and civil jurisdiction of the Receiving
State pursuant to the terms of the Vienna Convention.
Hence, this recourse by Minucher by way of an instant petition
for review.
ISSUE/s: Whether or not Arthur Scalzo is indeed entitled to
diplomatic immunity.
Page 8 of 48
RULING: Scalzo contends that the Vienna Convention on
Diplomatic Relations, to which the Philippines is a signatory,
grants him absolute immunity from suit, describing his functions
as an agent of the United States Drugs Enforcement Agency as
conducting surveillance operations on suspected drug dealers
in the Philippines believed to be the source of prohibited drugs
being shipped to the U.S., (and) having ascertained the target,
(he then) would inform the Philippine narcotic agents (to) make
the actual arrest."
SHORT RULING:
While the diplomatic immunity of Scalzo might thus remain
contentious, it was sufficiently established that, indeed, he
worked for the United States Drug Enforcement Agency and
was tasked to conduct surveillance of suspected drug activities
within the country on the dates pertinent to this case. If it should
be ascertained that Arthur Scalzo was acting well within his
assigned functions when he committed the acts alleged in the
complaint, the present controversy could then be resolved under
the related doctrine of State Immunity from Suit.
A foreign agent, operating within a territory, can be cloaked with
immunity from suit but only as long as it can be established that
he is acting within the directives of the sending state. The
consent of the host state is an indispensable requirement of
basic courtesy between the two
sovereigns. Guinto and Shauf both involve officers and
personnel of the United States, stationed within Philippine
territory, under the RP-US Military Bases Agreement. While
evidence is wanting to show any similar agreement between the
governments of the Philippines and of the United States (for the
latter to send its agents and to conduct surveillance and related
activities of suspected drug dealers in the Philippines), the
consent or imprimatur of the Philippine government to the
activities of the United States Drug Enforcement Agency,
however, can be gleaned from the facts heretofore elsewhere
mentioned. The official exchanges of communication between
agencies of the government of the two countries, certifications
from officials of both the Philippine Department of Foreign Affairs
and the United States Embassy, as well as the participation of
members of the Philippine Narcotics Command in the buy-bust
operation conducted at the residence of Minucher at the behest
of Scalzo, may be inadequate to support the "diplomatic status"
of the latter but they give enough indication that the Philippine
government has given its imprimatur, if not consent, to the
activities within Philippine territory of agent Scalzo of the United
States Drug Enforcement Agency. The job description of Scalzo
has tasked him to conduct surveillance on suspected drug
suppliers and, after having ascertained the target, to inform local
law enforcers who would then be expected to make the arrest. In
conducting surveillance activities on Minucher, later acting as
the poseur-buyer during the buy-bust operation, and then
becoming a principal witness in the criminal case against
Minucher, Scalzo hardly can be said to have acted beyond the
scope of his official function or duties.
All told, the Supreme Court is constrained to rule that
respondent Arthur Scalzo, an agent of the United States Drug
Enforcement Agency allowed by the Philippine government to
conduct activities in the country to help contain the problem on
the drug traffic, is entitled to the defense of state immunity from
suit.
DISCUSSION ON DIPLOMATIC IMMUNITY AND STATUS:
The Vienna Convention on Diplomatic Relations lists the classes
of heads of diplomatic missions to include (a) ambassadors
or nuncios accredited to the heads of state, (b) envoys,
Ang, Bartolata, Bellosillo, Estanislao, Garcia, Improgo, Polero, Siriban

ministers or internuncios accredited to the heads of states; and
(c) charges d' affairs accredited to the ministers of foreign
affairs. Comprising the "staff of the (diplomatic) mission" are the
diplomatic staff, the administrative staff and the technical and
service staff. Only the heads of missions, as well as members
of the diplomatic staff, excluding the members of the
administrative, technical and service staff of the mission, are
accorded diplomatic rank. Even while the Vienna Convention on
Diplomatic Relations provides for immunity to the members of
diplomatic missions, it does so, nevertheless, with an
understanding that the same be restrictively applied. Only
"diplomatic agents," under the terms of the Convention, are
vested with blanket diplomatic immunity from civil and criminal
suits. The Convention defines "diplomatic agents" as the heads
of missions or members of the diplomatic staff, thus impliedly
withholding the same privileges from all others. It might bear
stressing that even consuls, who represent their respective
states in concerns of commerce and navigation and perform
certain administrative and notarial duties, such as the issuance
of passports and visas, authentication of documents, and
administration of oaths, do not ordinarily enjoy the traditional
diplomatic immunities and privileges accorded diplomats, mainly
for the reason that they are not charged with the duty of
representing their states in political matters. Indeed, the main
yardstick in ascertaining whether a person is a diplomat
entitled to immunity is the determination of whether or not
he performs duties of diplomatic nature.
Scalzo asserted that he was an Assistant Attache of the United
States diplomatic mission and was accredited as such by the
Philippine Government. An attache belongs to a category of
officers in the diplomatic establishment who may be in charge of
its cultural, press, administrative or financial affairs. There could
also be a class of attaches belonging to certain ministries or
departments of the government, other than the foreign ministry
or department, who are detailed by their respective ministries or
departments with the embassies such as the military, naval, air,
commercial, agricultural, labor, science, and customs attaches,
or the like. Attaches assist a chief of mission in his duties and
are administratively under him, but their main function is to
observe, analyze and interpret trends and developments in their
respective fields in the host country and submit reports to their
own ministries or departments in the home government. These
officials are not generally regarded as members of the
diplomatic mission, nor are they normally designated as having
diplomatic rank.
A significant document would appear to be Exhibit No. 08, dated
08 November 1992, issued by the Office of Protocol of the
Department of Foreign Affairs and signed by Emmanuel C.
Fernandez, Assistant Secretary, certifying that "the records of
the Department (would) show that Mr. Arthur W. Scalzo, Jr.,
during his term of office in the Philippines (from 14 October 1985
up to 10 August 1988) was listed as an Assistant Attach of the
United States diplomatic mission and was, therefore, accredited
diplomatic status by the Government of the Philippines." No
certified true copy of such "records," the supposed bases for the
belated issuance, was presented in evidence.
Concededly, vesting a person with diplomatic immunity is a
prerogative of the executive branch of the government. In World
Health Organization vs. Aquino, the Court has recognized that,
in such matters, the hands of the courts are virtually tied. Amidst
apprehensions of indiscriminate and incautious grant of
immunity, designed to gain exemption from the jurisdiction of
courts, it should behoove the Philippine government, specifically
its Department of Foreign Affairs, to be most circumspect, that
Page 9 of 48
should particularly be no less than compelling, in its post litem
motam issuances. It might be recalled that the privilege is not an
immunity from the observance of the law of the territorial
sovereign or from ensuing legal liability; it is, rather, an immunity
from the exercise of territorial jurisdiction. The government of
the United States itself, which Scalzo claims to be acting for, has
formulated its standards for recognition of a diplomatic
agent. The State Department policy is to only
concede diplomatic status to a person who possesses an
acknowledged diplomatic title and performs duties of
diplomatic nature. Supplementary criteria for accreditation are
the possession of a valid diplomatic passport or, from States
which do not issue such passports, a diplomatic note formally
representing the intention to assign the person to diplomatic
duties, the holding of a non-immigrant visa, being over twenty-
one years of age, and performing diplomatic functions on an
essentially full-time basis. Diplomatic missions are requested to
provide the most accurate and descriptive job title to that which
currently applies to the duties performed. The Office of the
Protocol would then assign each individual to the appropriate
functional category.
But while the diplomatic immunity of Scalzo might thus remain
contentious, it was sufficiently established that, indeed, he
worked for the United States Drug Enforcement Agency and
was tasked to conduct surveillance of suspected drug activities
within the country on the dates pertinent to this case. If it should
be ascertained that Arthur Scalzo was acting well within his
assigned functions when he committed the acts alleged in the
complaint, the present controversy could then be resolved under
the related doctrine of State Immunity from Suit.
The precept that a State cannot be sued in the courts of a
foreign state is a long-standing rule of customary international
law then closely identified with the personal immunity of a
foreign sovereign from suit and, with the emergence of
democratic states, made to attach not just to the person of the
head of state, or his representative, but also distinctly to the
state itself in its sovereign capacity. If the acts giving rise to a
suit are those of a foreign government done by its foreign agent,
although not necessarily a diplomatic personage, but acting in
his official capacity, the complaint could be barred by the
immunity of the foreign sovereign from suit without its
consent. Suing a representative of a state is believed to be, in
effect, suing the state itself. The proscription is not accorded for
the benefit of an individual but for the State, in whose service he
is, under the maxim - par in parem, non habet imperium - that all
states are sovereign equals and cannot assert jurisdiction over
one another. The implication, in broad terms, is that if the
judgment against an official would require the state itself to
perform an affirmative act to satisfy the award, such as the
appropriation of the amount needed to pay the damages
decreed against him, the suit must be regarded as being against
the state itself, although it has not been formally impleaded.
In United States of America vs. Guinto, involving officers of the
United States Air Force and special officers of the Air Force
Office of Special Investigators charged with the duty of
preventing the distribution, possession and use of prohibited
drugs, this Court has ruled -
"While the doctrine (of state immunity) 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. x x x. 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
Ang, Bartolata, Bellosillo, Estanislao, Garcia, Improgo, Polero, Siriban

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. x x x As they have acted on
behalf of the government, and within the scope of their authority,
it is that government, and not the petitioners personally, [who
were] responsible for their acts."
This immunity principle, however, has its
limitations. Thus, Shauf vs. Court of Appeals elaborates:
It is a different matter where the public official is made to account
in his capacity as such for acts contrary to law and injurious to
the rights of the plaintiff. As was clearly set forth by Justice
Zaldivar in Director of the Bureau of Telecommunications, et al.,
vs. Aligaen, et al. (33 SCRA 368):`Inasmuch as the State
authorizes only legal acts by its officers, unauthorized acts of
government officials or officers are not acts of the State, and an
action against the officials or officers by one whose rights have
been invaded or violated by such acts, for the protection of his
rights, is not a suit against the State within the rule of immunity
of the State from suit. In the same tenor, it has been said that an
action at law or suit in equity against a State officer or the
director of a State department on the ground that, while claiming
to act for the State, he violates or invades the personal and
property rights of the plaintiff, under an unconstitutional act or
under an assumption of authority which he does not have, is not
a suit against the State within the constitutional provision that
the State may not be sued without its consent. The rationale for
this ruling is that the doctrine of state immunity cannot be used
as an instrument for perpetrating an injustice.
xxxxxxxxx
(T)he doctrine of immunity from suit will not apply and may not
be invoked where the public official is being sued in his private
and personal capacity as an ordinary citizen. The cloak of
protection afforded the officers and agents of the government is
removed the moment they are sued in their individual
capacity. This situation usually arises where the public official
acts without authority or in excess of the powers vested in him. It
is a well-settled principle of law that a public official may be liable
in his personal private capacity for whatever damage he may
have caused by his act done with malice and in bad faith or
beyond the scope of his authority and jurisdiction.
DISPOSITIVE PORTION: WHEREFORE, on the foregoing
premises, the petition is DENIED. No costs.
--------------------------------xxx------------------------
WORD HEALTH ORGANIZATION and DR. LEONCE
VERSTUYFT v. HON. B. AQUINO, Judge of CFI of Rizal,
MAJ. WILFREDO CRUZ, MAJ. ANTONIO RELLEVE and
CAPT. PEDRO NAVARRO of the Philippine Constabulary
G.R. No. L-35131, 29 November 1972, J. Teehankee
PRINCIPLE: DETERMINATION OF IMMUNITY
The case arose when the respondent Judge issued a search
warrant for the search and seizure of the personal effects of
Verstuyft, an official of the WHO notwithstanding his being
entitled to diplomatic immunity, as duly recognized by the by
executive branch of the Philippine Government pursuant to the
host agreement executed on 22 July 1051.
Subject of the warrant were the ten crates consigned to Verstuyft
that was stored at the Eternit Corp. Warehouse on the ground
that they contain large quantities of highly dutiable goods
beyond the official needs of Verstuyft and the only lawful way to
reach these articles and effect for purposes of taxation is
through a search warrant. The crates entered the Philippines as
unaccompanied baggage and allowed free entry from duties and
Page 10 of 48
taxes. Said judge issued a search and seizure warrant upon the
application of the respondents for alleged violation of the Tariff
and Customs Code.
DFA Secretary said that Verstuyft is entitled to immunity from
the search in respect of his personal baggage as accorded to
members of diplomatic missions and requested for the
suspension of the search and warrant order. Despite of the
position of the DFA and upon hearing, the Judge issued his
order maintaining the effectivity of the warrant unless restrained
by the higher court.
ISSUE: Whether or not the issuance of the search warrant is
proper.
No. It is a recognized principle in International Law and under
our system of separation of powers that diplomatic immunity is
essentially a political question and courts should refuse to look
beyond a determination by the executive branch of the
government, and were the plea of diplomatic immunity is
recognized and affirmed by the executive branch of the
government as in the case at bar, it is then the duty of the courts
to accept the claim of immunity upon appropriate suggestion by
the principal officer of the government.
In adherence to the settled principle that courts may not so
exercise their jurisdiction by seizure and detention of property
as to embarrass the executive arm of the government in
conducting foreign relations, it is accepted doctrine that “in such
cases the judicial department of this government follows the
action of the political branch and will not embarrass the latter by
assuming an antagonistic jurisdiction.”
The unfortunate fact that respondent judge chose to rely on the
suspicion of respondents COSAC officers that the other
remaining crates unopened contain contraband items rather
than on the categorical assurance of the Solicitor General that
Verstuyft did not abuse his diplomatic immunity, which was
based in turn on the official positions taken by the highest
executive officials with competence and authority to act on the
matter. The government is bound by the procedure laid down in
Art. VII of the Convention on the Privileges and Immunities of
the Specialized Agencies of the United Nations for consultations
between the Host State and the UN agency concerned to
determine, in the first instance the fact of occurrence of the
abused alleged, and if so, to ensure that no repetition occurs
and for other recourses.
-------------------------------xxx------------------------
5. IMMUNITY OF INT’L ORG & AGENCIES
Immunity of International Organizations and Agencies
SOUTHEAST ASIAN FISHERIES DEVELOPMENT CENTER-
AQUACULTURE DEPARTMENT (SEAFDEC-AQD), DR.
FLOR LACANILAO (CHIEF), RUFIL CUEVAS (HEAD,
ADMINISTRATIVE DIV.), BEN DELOS REYES (FINANCE
OFFICER), vs.
NATIONAL LABOR RELATIONS COMMISSION and
Ang, Bartolata, Bellosillo, Estanislao, Garcia, Improgo, Polero, Siriban

JUVENAL LAZAGA
G.R.No.86773 February14,1992
Nocon,J.
Facts: SEAFDEC-AQD is a department of an international
organization, the Southeast Asian Fisheries Development
Center, organized through an agreement entered into in
Bangkok, Thailand on December 28, 1967 by the governments
of Malaysia, Singapore, Thailand, Vietnam, Indonesia and the
Philippines with Japan as the sponsoring country. April 20,
1975, private respondent Juvenal Lazaga was employed as a
Research Associate an a probationary basis by the SEAFDEC-
AQD and was appointed Senior External Affairs Officer on
January 5, 1983 with a monthly basic salary of P8,000.00 and a
monthly allowance of P4,000.00, was appointed to the position
of Professional III and designated as Head of External Affairs
Office with the same pay and benefits.
May 8, 1986, petitioner Lacanilao in his capacity as Chief of
SEAFDEC-AQD sent a notice of termination to private
respondent informing him that due to the financial constraints
being experienced by the department, his services shall be
terminated at the close of office hours on May 15, 1986 and that
he is entitled to separation benefits equivalent to one (1) month
of his basic salary for every year of service plus other benefit.
Petitioner SEAFDEC-AQD's failure to pay private respondent
his separation pay, the latter filed on March 18, 1987 a complaint
against petitioners for non-payment of separation benefits plus
moral damages and attorney's fees with the Arbitration Branch
of the NLRC. Labor Arbiter ruled in favor of private respondent,
ordering the SEAFDEC-AQD to pay the former. The same was
to NLRC and sustained the arbiter’s ruling. MR was filed with the
NLRC but was denied. Hence, this petition for certiorari.
Issue: Does the NLRC have jurisdiction over SEAFDEC-AQD?
Is SEAFDEC-AQD estopped for its failure to raise the
issue of jurisdiction at the first instance?
Held: NLRC has no jurisdiction over SEAFDEC-AQD. The
Republic of the Philippines became a signatory to the
Agreement establishing SEAFDEC on January 16,1968. Its
purpose is as follows: The purpose of the Center is to contribute
to the promotion of the fisheries development in Southeast Asia
by mutual co-operation among the member governments of the
Center, hereinafter called the "Members", and through
collaboration with international organizations and governments
external to the Center. SEAFDEC-AQD was organized during
the Sixth Council Meeting of SEAFDEC on July 3-7, 1973 in
Kuala Lumpur, Malaysia as one of the principal departments of
SEAFDEC (Annex "I", id.) to be established in Iloilo for the
promotion of research in aquaculture. Paragraph 1, Article 6 of
the Agreement establishing SEAFDEC mandates: 1. The
Council shall be the supreme organ of the Center and all powers
of the Center shall be vested in the Council.
Being an intergovernmental organization, SEAFDEC including
its Departments (AQD), enjoys functional independence and
freedom from control of the state in whose territory its office is
located.
As Senator Jovito R. Salonga and Former Chief Justice Pedro
L. Yap stated in their book, Public International Law (p. 83, 1956
ed.): Permanent international commissions and administrative
bodies have been created by the agreement of a considerable
number of States for a variety of international purposes,
economic or social and mainly non-political. Among the notable
instances are the International Labor Organization, the
International Institute of Agriculture, the International Danube
Commission. In so far as they are autonomous and beyond the
Page 11 of 48
control of any one State, they have a distinct juridical personality
independent of the municipal law of the State where they are
situated. As such, according to one leading authority "they must
be deemed to possess a species of international personality of
their own." (Salonga and Yap, Public International Law, 83 [1956
ed.])
Respondent Lazaga's invocation of estoppel with respect to the
issue of jurisdiction is unavailing because estoppel does not
apply to confer jurisdiction to a tribunal that has none over a
cause of action. Jurisdiction is conferred by law. Where there is
none, no agreement of the parties can provide one. Settled is
the rule that the decision of a tribunal not vested with appropriate
jurisdiction is null and void. Thus, in Calimlim vs. Ramirez, this
Court held:
A rule, that had been settled by unquestioned acceptance and
upheld in decisions so numerous to cite is that the jurisdiction of
a court over the subject matter of the action is a matter of law
and may not be conferred by consent or agreement of the
parties. The lack of jurisdiction of a court may be raised at any
stage of the proceedings, even on appeal. This doctrine has
been qualified by recent pronouncements which it stemmed
principally from the ruling in the cited case of Sibonghanoy. It is
to be regretted, however, that the holding in said case had been
applied to situations which were obviously not contemplated
therein. The exceptional circumstances involved
in Sibonghanoy which justified the departure from the accepted
concept of non-waivability of objection to jurisdiction has been
ignored and, instead a blanket doctrine had been repeatedly
upheld that rendered the supposed ruling in Sibonghanoy not as
the exception, but rather the general rule, virtually overthrowing
altogether the time-honored principle that the issue of
jurisdiction is not lost by waiver or by estoppel. (Calimlim vs.
Ramirez, G.R. No. L-34362, 118 SCRA 399; [1982])
---------------------------------xxx------------------------------------
IMMUNITY OF INTERNATIONAL ORGANIZATIONS AND
AGENCIES
ERNESTO L. CALLADO v. INTERNATIONAL RICE
RESEARCH INSTITUTE
G.R. No. 106483 May 22, 1995
ROMERO, J.:
FACTS
Ernesto Callado, petitioner, was employed as a driver at the
IRRI. One day while driving an IRRI vehicle on an official trip to
the NAIA and back to the IRRI, petitioner figured in an accident.
Petitioner was informed of the findings of a preliminary
investigation conducted by the IRRI's Human Resource
Development Department Manager. In view of the findings, he
was charged with:
(1) Driving an institute vehicle while on official duty under the
influence of liquor;
(2) Serious misconduct consisting of failure to report to
supervisors the failure of the vehicle to start because of a
problem with the car battery, and
(3) Gross and habitual neglect of duties.
Petitioner submitted his answer and defenses to the charges
against him. However, IRRI issued a Notice of Termination to
petitioner. Thereafter, petitioner filed a complaint before the
Labor Arbiter for illegal dismissal, illegal suspension and
indemnity pay with moral and exemplary damages and
attorney's fees. IRRI wrote the Labor Arbiter to inform him that
the Institute enjoys immunity from legal process by virtue of
Ang, Bartolata, Bellosillo, Estanislao, Garcia, Improgo, Polero, Siriban

Article 3 of Presidential Decree No. 1620, 5 and that it invokes
such diplomatic immunity and privileges as an international
organization in the instant case filed by petitioner, not having
waived the same.
While admitting IRRI's defense of immunity, the Labor Arbiter,
nonetheless, cited an Order issued by the Institute to the effect
that "in all cases of termination, respondent IRRI waives its
immunity," and, accordingly, considered the defense of
immunity no longer a legal obstacle in resolving the case. The
NLRC found merit in private respondent's appeal and, finding
that IRRI did not waive its immunity, ordered the aforesaid
decision of the Labor Arbiter set aside and the complaint
dismissed.
In this petition, petitioner contends that the immunity of the IRRI
as an international organization granted by Article 3 of
Presidential Decree No. 1620 may not be invoked in the case at
bench inasmuch as it waived the same by virtue of its
Memorandum on "Guidelines on the handling of dismissed
employees in relation to P.D. 1620."
ISSUE
WON IRRI waived its immunity from suit
RULING
NO. P.D. No. 1620, Article 3 provides: Art. 3. Immunity
from Legal Process. The Institute shall enjoy immunity from any
penal, civil and administrative proceedings, except insofar as
that immunity has been expressly waived by the Director-
General of the Institute or his authorized representatives.
The SC upholds the constitutionality of the aforequoted
law. There is in this case "a categorical recognition by the
Executive Branch of the Government that IRRI enjoys
immunities accorded to international organizations, which
determination has been held to be a political question conclusive
upon the Courts in order not to embarrass a political department
of Government. It is a recognized principle of international law
and under our system of separation of powers that diplomatic
immunity is essentially a political question and courts should
refuse to look beyond a determination by the executive branch
of the government, and where the plea of diplomatic immunity is
recognized and affirmed by the executive branch of the
government as in the case at bar, it is then the duty of the courts
to accept the claim of immunity upon appropriate suggestion by
the principal law officer of the government or other officer acting
under his direction.
The raison d'etre for these immunities is the assurance of
unimpeded performance of their functions by the agencies
concerned. The grant of immunity to IRRI is clear and
unequivocal and an express waiver by its Director-General is the
only way by which it may relinquish or abandon this immunity.
In cases involving dismissed employees, the Institute may waive
its immunity, signifying that such waiver is discretionary on its
part.
DISPOSITIVE PORTION
IN VIEW OF THE FOREGOING, the petition for
certiorari is DISMISSED. No costs.
-----------------------------------xxx----------------------------------
DEPARTMENT OF FOREIGN AFFAIRS, petitioner, vs.
NATIONAL LABOR RELATIONS COMMISSION, HON.
LABOR ARBITER NIEVES V. DE CASTRO and JOSE C.
MAGNAYI, respondents.
G.R. No. 113191 September 18, 1996
Page 12 of 48
TOPIC: Immunity of International Organizations and
Agencies
VITUG
FACTS
Jose Magnayi initiated NLRC-NCR Case No. 00-01-0690-93 for
his alleged illegal dismissal by ADB and the latter's violation of
the "labor-only" contracting law. Two summonses were served,
one sent directly to the ADB and the other through DFA, both
with a copy of the complaint. Forthwith, the ADB and the DFA
notified respondent Labor Arbiter that the ADB, as well as its
President and Office, were covered by an immunity from legal
process except for borrowings, guaranties or the sale of
securities pursuant to Article 50(1) and Article 55 of
the Agreement Establishing the Asian Development Bank (the
"Charter") in relation to Section 5 and Section 44 of
the Agreement Between The Bank And The Government Of The
Philippines Regarding The Bank's Headquarters (the
"Headquarters Agreement").
The Labor Arbiter took cognizance of the complaint on the
impression that the ADB had waived its diplomatic immunity
from suit. The Labor Arbiter rendered his decision that
concluded:
XXX judgment is hereby rendered declaring the complainant as
a regular employee of respondent ADB, and the termination of
his services as illegal. Accordingly, respondent Bank is hereby
ordered:
1. To immediately reinstate the complainant to his former
position effective September 16, 1993;
2. To pay complainant full backwages from December 1, 1992
to September 15, 1993 in the amount of P42,750.00 (P4,500.00
x 9 months);
3. And to pay complainants other benefits and without loss of
seniority rights and other privileges and benefits due a regular
employee of Asian Development Bank from the time he was
terminated on December 31, 1992;
4. To pay 10% attorney's fees of the total entitlements.
The ADB did not appeal the decision. Instead, the DFA referred
the matter to the NLRC; in its referral, the DFA sought a "formal
vacation of the void judgment." Replying to the letter, the NLRC
Chairman wrote:
xxx xxx xxx
On the other hand, while the undersigned exercises
"administrative supervision over the Commission and its
regional branches and all its personnel, including the Executive
Labor Arbiters and Labor Arbiters" (penultimate paragraph, Art.
213, Labor Code), he does not have the competence to
investigate or review any decision of a Labor Arbiter. However,
on the purely administrative aspect of the decision-making
process, he may cause that any misconduct, malfeasance or
misfeasance, upon complaint properly made.
If the Department of Foreign Affairs feels that the action of Labor
Arbiter Nieves de Castro constitutes misconduct, malfeasance
or misfeasance, it is suggested that an appropriate complaint be
lodged with the Office of the Ombudsman.
Dissatisfied, the DFA lodged the instant petition for certiorari. In
this Court's resolution, respondents were required to comment.
Petitioner was later constrained to make an application for a
restraining order and/or writ of preliminary injunction following
the issuance by the Labor Arbiter of a writ of execution. In a
resolution, the Court issued the temporary restraining order
prayed for.
The OSG in its comment, initially assailed the claim of immunity
by the ADB. Subsequently, however, it submitted a
Manifestation stating, among other things, that "after a thorough
Ang, Bartolata, Bellosillo, Estanislao, Garcia, Improgo, Polero, Siriban

review of the case and the records," it became convinced that
ADB, indeed, was correct in invoking its immunity from suit
under the Charter and the Headquarters Agreement.
ISSUE
Whether the ADB is correct in invoking its immunity from suit
under the Charter and the Headquarters Agreement.
SC RULING
The Court is of the same view.
Article 50(1) of the Charter provides:
The Bank shall enjoy immunity from every form of legal
process, except in cases arising out of or in connection with the
exercise of its powers to borrow money, to guarantee
obligations, or to buy and sell or underwrite the sale of
securities.
Under Article 55 thereof —
All Governors, Directors, alternates, officers and employees of
the Bank, including experts performing missions for the Bank:
(1) shall be immune from legal process with respect of acts
performed by them in their official capacity, except when the
Bank waives the immunity.
Like provisions are found in the Headquarters Agreement. Thus,
its Section 5 reads:
The Bank shall enjoy immunity from every form of legal process,
except in cases arising out of, or in connection with, the exercise
of its powers to borrow money, to guarantee obligations, or to
buy and sell or underwrite the sale of securities.
And, with respect to certain officials of the bank, Section 44 of
the agreement states:
Governors, other representatives of Members, Directors, the
president, Vice-President and executive officers as may be
agreed upon between the Government and the Bank shall enjoy,
during their stay in the Republic of the Philippines in connection
with their official duties with the Bank:
xxx xxx xxx
(b) Immunity from legal process of every kind in respect of words
spoken or written and all acts done by them in their official
capacity.
The above stipulations of both the Charter and Headquarters
Agreement should be able, may well enough, to establish that,
except in the specified cases of borrowing and guarantee
operations, as well as the purchase, sale and underwriting of
securities, the ADB enjoys immunity from legal process of every
form. The Bank's officers, on their part, enjoy immunity in
respect of all acts performed by them in their official capacity.
The Charter and the Headquarters Agreement granting these
immunities and privileges are treaty covenants and
commitments voluntarily assumed by the Philippines
government which must be respected.
In World Health Organization vs. Aquino, we have declared:
It is a recognized principle of international law and under our
system of separation of powers that diplomatic immunity is
essentially a political question and courts should refuse to look
beyond a determination by the executive branch of the
government, and where the plea of diplomatic immunity is
recognized and affirmed by the executive branch of the
government . . . it is then the duty of the courts to accept the
claim of immunity upon appropriate suggestion by the principal
law officer of the government, . . . or other officer acting under
his direction. Hence, in adherence to the settled principle that
courts may not so exercise their jurisdiction . . . as to embarrass
the executive arm of the government in conducting foreign
relations, it is accepted doctrine that in "such cases the judicial
department of government follows the action of the political
branch and will not embarrass the latter by assuming an
Page 13 of 48
antagonistic
jurisdiction."
In the instant case, the filing of the petition by the DFA, in behalf
of ADB, is itself an affirmance of the government's own
recognition of ADB's immunity.
Being an international organization that has been extended
diplomatic status, the ADB is independent of the municipal law.
In Southeast Asian Fisheries Development Center vs. Acosta.
The Court has cited with approval the opinion of the Minister of
justice; thus:
One of the basic immunities of an international organization is
immunity from local jurisdiction, i.e., that it is immune from the
legal writs and processes issued by the tribunals of the country
where it is found. The obvious reason for this is that the
subjection of such an organization to the authority of the local
courts would afford a convenient medium thru which the host
government may interfere in their operations or even influence
or control its policies and decisions of the organization; besides,
such subjection to local jurisdiction would impair the capacity of
such body to discharge its responsibilities impartially behalf of
its member-states.
Contrary to private respondent's assertion, the claim of immunity
is not here being raised for the first time, it has been invoked
before the forum of origin through communications sent by
petitioner and the ADB to the Labor Arbiter, as well as before
the NLRC following the rendition of the questioned judgment by
the Labor Arbiter, but evidently to no avail.
In its communication of 27 May 1993, the DFA, through the
Office of legal Affairs, has advised the NLRC:
xxx xxx xxx
In view of the fact that the Asian Development Bank (ADB)
invokes its immunity which is sustained by the Department of
Foreign Affairs, a continuous hearing of this case erodes the
credibility of the Philippine government before the international
community, let alone the negative implication of such a suit on
the official relationship of the Philippine government with the
ADB.
The Office of the President, likewise, has issued a letter to the
Secretary of Labor, viz
xxx xxx xxx
Last March 8, the Labor Arbiter charged with the case, Ms.
Nieves V. de Castro, addressed a Notice of Resolution/Order to
the Bank which brought it to the attention of the Department of
Foreign Affairs on the ground that the service of such notice was
in violation of the RP-ADB Headquarters Agreement which
provided, inter alia, for the immunity of the Bank, its President
and officers from every form of legal process, except only, in
cases of borrowings, guarantees or the sale of securities.
xxx xxx xxx
The Supreme Court has long settled the matter of diplomatic
immunities. In WHO vs. Aquino, SCRA 48, it ruled that courts
should respect diplomatic immunities of foreign officials
recognized by the Supreme Court forms part of the law of the
land.
Private respondent argues that, by centering into service
contracts with different private companies, ADB has descended
to the level of an ordinary party to a commercial transaction
giving rise to a waiver of its immunity from suit.
In the case of Holy See vs. Hon. Rosario, Jr., the Court has held:
There are two conflicting concept 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
Ang, Bartolata, Bellosillo, Estanislao, Garcia, Improgo, Polero, Siriban

sovereign is recognized only with regard to public acts or
acts jure imperii of a state, but not with regard to private act or
acts jure gestionis.
xxx xxx xxx
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 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 act jure imperii, especially
when it is not undertaken for gain or profit.
The service contracts referred to by private respondent have not
been intended by the ADB for profit or gain but are official acts
over which a waiver of immunity would not attack.
DISPOSITIVE PORTION
WHEREFORE, the petition for certiorari is GRANTED, and the
decision of the Labor Arbiter, dated 31 August 1993 is
VACATED, for being NULL AND VOID. The temporary
restraining order issued by this Court on 07 April 1994 is hereby
made permanent. No costs.
SO ORDERED.
-------------------------------------xxx------------------------------------
6. IMMUNITY OF GOV’T AGENCIES
Municipality of San Fernando, La Union vs. Judge Romeo
Firme, Juana Rimando-Bañina, Iaureano Bañina, Jr., Sor
Marieta Bañina, Montano Bañina, Orja Bañina, and Lydia
Bañina
G.R. No. L-52179 / 08 April 1991 / Justice Medialdea
Constitutional Law Review / State Immunity – Immunity of
Government Agencies – Incorporated / Waiver of immunity,
consent to be sued.
FACTS:
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-Baniña, Laureano Baniña, Jr., Sor Marietta Baniña,
Montano Baniña, Orja Baniña and Lydia R. Baniña are heirs of
the deceased Laureano Baniña 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 Macario Nieveras,
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 Laureano
Page 14 of 48
Baniña 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 Macario Nieveras
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.
RTC – 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-Baniña, Mrs. Priscilla B. Surell, Laureano Baniña Jr.,
Sor Marietta Baniña, Mrs. Fe B. Soriano, Montano Baniña, Orja
Baniña and Lydia B. Baniña the sums of P1,500.00 as funeral
expenses and P24,744.24 as the lost expected earnings of the
late Laureano Baniña Sr., P30,000.00 as moral damages, and
P2,500.00 as attorney's fees.
ISSUE/S:
Whether the Municipality of San Fernando, La Union is immune
from suits.
HELD:
Yes, the Municipality of San Fernando, La Union is immune from
suits.
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,
the general rule is that the State may not be sued except when
it gives consent to be sued. 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. 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.
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.
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.
Ang, Bartolata, Bellosillo, Estanislao, Garcia, Improgo, Polero, Siriban

Fontanilla, 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.
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.
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."
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.
After a careful examination of existing laws and jurisprudence,
We arrive at the conclusion that the municipality cannot be held
liable for the torts committed by its regular employee, who was
then engaged in the discharge of governmental functions.
Hence, the death of the passenger –– tragic and deplorable
though it may be –– imposed on the municipality no duty to pay
monetary compensation.
-------------------------------xxx-----------------------------
B. STATE IMMUNITY/ROYAL PREROGATIVE BASIS;
RATIONALE
6. IMMUNITY OF GOVERNMENT AGENCIES
b. Unincorporated
BUREAU OF PRINTING, SERAFIN SALVADOR and
MARIANO LEDESMA vs.THE BUREAU OF PRINTING
EMPLOYEES ASSOCIATION (NLU), PACIFICO ADVINCULA,
ROBERTO MENDOZA, PONCIANO ARGANDA and
TEODULO TOLERAN
G.R. No. L-15751 January 28, 1961
GUTIERREZ DAVID, J.
FACTS: Bureau of Printing Employees Association (NLU)
Pacifico Advincula, Roberto Mendoza, Ponciano Arganda and
Teodulo Toleran filed a complaint against Bureau of Printing,
Serafin Salvador, the Acting Secretary of the Department of
General Services, and Mariano Ledesma the Director of the
Bureau of Printing.
It 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.
the Bureau of Printing et al. denied the charges of unfair labor
practices and alleged that NLU 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.
Page 15 of 48
Thereafter, Bureau of Printing et al filed an "Omnibus Motion"
asking for a preliminary hearing on the question of 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
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, Hence this petition.
ISSUE: Whether or not Bureau of Printing can be sued?
HELD: NO, 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."
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.
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.
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.
DISPOSITIVE PORTION: 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.
Ang, Bartolata, Bellosillo, Estanislao, Garcia, Improgo, Polero, Siriban

------------------------------------xxx--------------------------
7. PRINCIPAL FUNCTION
TOPIC: Principal Function (Government v. proprietary)
G.R. No. 42204 January 21, 1993
HON. RAMON J. FAROLAN, JR., in his capacity as
Commissioner of Customs, petitioner,
vs.
COURT OF TAX APPEALS and BAGONG BUHAY
TRADING, respondents.
FACTS: On January 30, 1972, the vessel S/S "Pacific Hawk"
arrived at the Port of Manila carrying, among others, 80 bales of
screen net consigned to Bagong Buhay Trading (Bagong
Buhay). Said importation was declared through a customs
broker under Entry No. 8651-72 and classified under Tariff and
Customs Code2 at 35% ad valorem. Since the customs
examiner found the subject shipment reflective of the
declaration, Bagong Buhay paid the duties and taxes due in the
amount of P11,350.00 which was paid through the Bank of Asia
dated February 1, 1972. Thereafter, the customs appraiser
made a return of duty.
Acting on the strength of an information that the shipment
consisted of "mosquito net" made of nylon dutiable under the
Tariff and Customs Code, the Office of the Collector of Customs
ordered a re-examination of the shipment. A report on the re-
examination revealed that the shipment consisted of 80 bales of
screen net, each bale containing 20 rolls or a total of 1,600
rolls. Re-appraised, the shipment was valued at $37,560.00 or
$10.15 per yard instead of $.075 per yard as previously
declared. Furthermore, the Collector of Customs determined the
subject shipment as made of synthetic (polyethylene) woven
fabric classifiable under Tariff Heading No. 51.04-B at 100% ad
valorem. Thus, Bagong Buhay Trading was assessed
P272,600.00 as duties and taxes due on the shipment in
question. Since the shipment was also misdeclared as to
quantity and value, the Collector of Customs forfeited the
subject shipment in favor of the government.
ISSUE: whether or not the Collector of Customs may be held
liable for the 43,050 yards actually lost by private respondent
RULING: NO.
we opine that the Bureau of Customs cannot be held liable for
actual damages that the private respondent sustained with
regard to its goods. Otherwise, to permit private respondent's
claim to prosper would violate the doctrine of sovereign
immunity. Since it demands that the Commissioner of Customs
be ordered to pay for actual damages it sustained, for which
ultimately liability will fall on the government, it is obvious that
this case has been converted technically into a suit against the
state.29
On this point, the political doctrine that "the state may not be
sued without its consent," categorically applies. 30 As an
unincorporated government agency without any separate
juridical personality of its own, the Bureau of Customs enjoys
immunity from suit. Along with the Bureau of Internal Revenue,
it is invested with an inherent power of sovereignty, namely,
taxation. As an agency, the Bureau of Customs performs the
governmental function of collecting revenues which is definitely
not a proprietary function. Thus, private respondent's claim for
damages against the Commissioner of Customs must fail.
WHEREFORE, the decision of the respondent Court of Tax
Appeals is AFFIRMED. The Collector of Customs is directed to
expeditiously re-compute the customs duties applying Tariff
Heading 39.02 at the rate of 35% ad valorem on the 13,600
Page 16 of 48
kilograms of polyethylene plastic imported by private
respondent.
----------------------------xxx-----------------------
TOPIC: Principal Function; Governmental or Sovereign v.
Proprietary
CASE TITLE: PHILIPPINE TOURISM AUTHORITY,
Petitioner, vs. PHILIPPINE GOLF DEVELOPMENT &
EQUIPMENT, INC., Respondent.
G.R. No. 176628
DATE: March 19, 2012
PONENTE: Justice Brion
FACTS: On April 3, 1996, PTA, an agency of the Department of
Tourism, whose main function is to bolster and promote tourism,
entered into a contract with Atlantic Erectors, Inc. (AEI) for the
construction of the Intramuros Golf Course Expansion Projects
(PAR 60-66) for a contract price of P57,954,647.94.
The civil works of the project commenced. Since AEI was
incapable of constructing the golf course aspect of the project, it
entered into a sub-contract agreement with PHILGOLF, a duly
organized domestic corporation, to build the golf course
amounting to P27,000,000.00. The sub-contract agreement also
provides that PHILGOLF shall submit its progress billings
directly to PTA and, in turn, PTA shall directly pay PHILGOLF.
On October 2, 2003, PHILGOLF filed a collection suit against
PTA amounting to P11,820,550.53, plus interest, for the
construction of the golf course. RTC ruled in favor of PHILGOLF.
On July 11, 2005, PTA seasonably appealed the case to the CA.
But before the appeal of PTA could be perfected, PHILGOLF
already filed a motion for execution pending appeal with the
RTC. The RTC, in an Order dated June 2, 2004, granted the
motion and a writ of execution pending appeal was issued
against PTA. On June 3, 2004, a notice of garnishment was
issued against PTA’s bank account at the Land Bank of
the Philippines, NAIA-BOC Branch to fully satisfy the judgment.
PTA filed a petition for certiorari with the CA, imputing grave
abuse of discretion on the part of the RTC for granting the
motion for execution pending appeal. The CA ruled in favor of
PTA and set aside the order granting the motion for execution
pending appeal.
On July 11, 2005, PTA withdrew its appeal of the RTC decision
and, instead, filed a petition for annulment of judgment under
Rule 47 of the Rules of Court. The petition for annulment of
judgment was premised on the argument that the gross
negligence of PTA’s counsel prevented the presentation of
evidence before the RTC.
On December 13, 2006, the CA dismissed the petition for
annulment of judgment for lack of merit. PTA questions this CA
action in the present petition for certiorari.
ISSUE/s: Whether PTA as a government entitly can invoke
immunity from suit.
RULING: NO. PTA was acting in a proprietary character.
PTA erred in invoking state immunity simply because it is a
government entity. The application of state immunity is proper
only when the proceedings arise out of sovereign transactions
and not in cases of commercial activities or economic affairs.
Ang, Bartolata, Bellosillo, Estanislao, Garcia, Improgo, Polero, Siriban

The State, in entering into a business contract, descends to the
level of an individual and is deemed to have tacitly given its
consent to be sued.
Since the Intramuros Golf Course Expansion Projects partakes
of a proprietary character entered into between PTA and
PHILGOLF, PTA cannot avoid its financial liability by merely
invoking immunity from suit.
DISPOSITIVE PORTION: WHEREFORE, premises
considered, we hereby DISMISS the petition for certiorari. No
costs.
----------------------------xxx------------------------
8. SUIT AGAINST PUBLIC OFFICIALS
THE CITY OF ANGELES, HON. ANTONIO ABAD SANTOS, in
his capacity as MAYOR of Angeles City, and the
SANGGUNIANG PANGLUNGSOD OF THE CITY OF
ANGELES v. CA and TIMOG SILANGAN DEVELOPMENT
CORP.
G.R. No. 97882, 28 August 1996, J. Panganiban
PRINCIPLE: SUIT AGAINST PUBLIC OFFICER
A deed of donation was forged on 26 November 1984, wherein
respondent donated to the City of Angeles 51 parcels of land
with an aggregate area of 50,676 sqm. The deed provides that
(1) the properties donated shall be devoted and utilized solely
for the site of the Angeles City Sports Center (any deviation must
have the prior written consent of the donor); (2) No commercial
building, complex, market or any other similar complex, mass or
tenement shall be constructed in the properties donated nor
shall cockfighting; (3) the properties donated, which is more than
5% of the total land area of donor’s subdivision, shall constitute
the entire open space for donor’s subdivision and all other lands
or areas previously reserved or designated, including Lot 1 and
Lot 2A of Block 72 and the whole block 29 are dispensed with
and rendered free as open spaces, and the donee hereby
agrees to execute and deliver all necessary consents,
approvals, endorsements, and authorizations to effect the
foregoing; (4) the donee, upon acceptance releases the donor
and/or assumes any and all obligations and liabilities
appertaining to the properties donated; (5) any substantial
breach shall entitle the donor to revoke or rescind the deed of
donation, and the donee shall evacuate and return the premises,
On 19 July 1988, petitioners started the construction of a drug
rehabilitation center on a portion of the donated land. Upon
learning thereof, private respondent protested such action for
being violative of the terms and conditions of the amended deed
and prejudicial to its interest and to those of its clients and
residents. Private respondent also offered another site for the
rehabilitation center. However, petitioners ignored the protest,
maintaining that the construction was not violative of the terms
of the donation. The alternative site was rejected because,
according to petitioners, the site was too isolated and had no
electric and water facilities.
Respondent filed before the RTC a complaint for breach of the
conditions imposed in the amended deed and seeking the
revocation of the donation and damages, with preliminary
injunction and/or temporary restraining order to halt the
construction of the rehabilitation center.
Page 17 of 48
As a defense, petitioner contended that the conditions imposed
in the deed were contrary to Municipal Order No. 1 s. 1962,
otherwise known as the Subdivision Ordinance of the
Municipality of Angeles. Petitioners further averred that private
respondents had no right to dictate upon petitioners what to do
with the donated land and how to do it so long as the purpose
remains for public use and the cause of action of the respondent
became moot and academic when Angeles City Council
repealed the resolution providing for the construction of said
drug rehabilitation center and adopted a new resolution
providing for the construction of said drug rehabilitation center
and adopted a new resolution changing the purpose and usage
of said center to a “sports development and youth center” in
order to conform with the sports complex project constructed on
the donated land.
The RTC rendered a decision favoring the respondents by
ordering to perpetually cease and desist from constructing a
Drug Rehabilitation Center and declaring the amended Deed
revoked and rescinded and ordering defendants to peacefully
vacate and return the donated land to plaintiff, together with all
the improvements. CA also affirmed the decision.
ISSUE: Whether or not the donation of the open space may be
revoked at all (considering PD 1216 to donate the city or
municipality the open space allocated exclusively for parks,
playground and recreational use of the subdivision).
The subject open space in these areas reserved for parks,
playgrounds and recreational use shall be non-alienable public
lands, and non-buildable. Upon their completion certified to by
the Authority, the roads, alleys, sidewalks and playgrounds shall
be donated by the owner or developer to the city or municipality
and it shall be mandatory for the local governments to accept
provided, that the parks and playgrounds maybe donated to the
homeowners association of the project with the consent of the
city or municipality concerned. No portion of the parks and
playgrounds donated thereafter shall be converted to any other
purpose or purposes.
Under the said law, respondent is under legal obligation to
donate the open space exclusively allocated for parks,
playgrounds and recreational use to the petitioner (Sec. 31 PD
957). There is now a legal obligation to donate the same to the
city or municipality.
As to the imposition of conditions in the Donation of Open
Space, the general law on donations does not prohibit the
imposition of conditions on a donation so long as the conditions
are not illegal or impossible. In regard to donations of open
spaces, PD 1216 itself require among other things that the
recreational ares to be donated be based on a percentage
(3.5%, 7%, or 9%) of the total area of the subdivision depending
on whether the division is low, medium, or high density. It further
declares that such open space devoted to parks, playgrounds
and recreational areas are non-alienable public and non-
buildable. However, there is no prohibition in either PD 957 or
PD 1216 against imposing conditions on such donation.
In the case at bar, one of the conditions imposed in the deed is
that the donee should build a sports complex on the donated
land. Since PD 1216 requires that the 3.5% to 9% of the gross
area allotted for parks and playgrounds is non-buildable, then
the obvious question arises whether or not such conditions was
Ang, Bartolata, Bellosillo, Estanislao, Garcia, Improgo, Polero, Siriban

validly imposed and is binding on the donee. It is clear that the
non-buildable character applies only to the 3.5% to 9% area set
by law. If there is any excess land over the above range
required by the decree, which is also used or allocated for parks,
playgrounds, and recreational purposes, it is obvious that such
excess area is not covered by the non-buildability restriction. In
the instant case, if there be an excess, then the donee would not
be barred from developing and operating a sports complex
thereon, and the condition in the amended deed would then be
considered valid and binding.
The Court also finds no cogent reason to reverse the findings of
the respondent court. The allegation of the petitioners that the
construction of the center was finished before the judgment of
the trial court was rendered deserves scant consideration
because it is self-serving and is completely unsupported by
other evidence. The fact remains that the trial court rendered
judgment enjoining the construction of the drug rehabilitation
center, revoking the donation and ordering the return of the
donated land. In spite of injunction, petitioners publicly flaunted
their disregard thereof with the subsequent inauguration of the
center on 15 August 1989.
Lastly, as regards to the contention that the building of the drug
rehabilitation center is violative of the deed, the court disagree.
Since the condition to construct a sport complex on the donated
land has previously been shown to be contrary to law, therefore
the revocation clause cannot be implemented because there is
no valid stipulation had been breached and it is highly
improbable that the decree would have allowed the return of the
donated land for open space under any circumstances,
considering the non-alienable character of such open space.
There is therefore no legal basis whatsoever to revoke the
donation of the subject open space and to return the donated
land to private respondent. The donated land should remain
with the donees as the law clearly intended such open spaces
to be perpetually part of the public domain, non-alienable and
permanently devoted to public use as such parks, playgrounds
or recreation areas.
The court has time and again ruled that public officials are
not immune from damages in their personal capacities
arising from acts done in bad faith. Otherwise stated, a
public official may be liable in his personal capacity for
whatever damage he may have caused by his act done with
malice and in bad faith or beyond the scope of his authority
or jurisdiction. In the instant case, the public officials
concerned deliberately violated the law and persisted in their
violations, going so far as attempting to deceive the courts by
their pretended change of purpose and usage for the enter, and
making a of the judicial system. Indisputably, said public officials
acted beyond the scope of their authority and jurisdiction and
with evident bad faith. The Mayor and members of the
Sanggunian were sued only in their official capacities, hence
they cannot be personally liable without first giving them their
day in court. Prevailing jurisprudence holding that public
officials are personally liable for damages arising from
illegal acts done in bad faith are premised on said official
having been sued both in their official and personal
capacities.
Ruling: fairest and equitable solution is to have the City of
Angeles, donee of the subject open space and ostensibly the
main beneficiary of the construction and operation of the
Page 18 of 48
proposed drug rehabilitation center, undertake the demolition
and removal of said center, and if feasible, recover the cost
thereof from the city officials concerned.
------------------------------xxx--------------------------
Suit Against Public Officials
VETERANS MANPOWER AND PROTECTIVE SERVICES,
INC., Petitioner, v. THE COURT OF APPEALS, THE CHIEF
OF PHILIPPINE CONSTABULARY and PHILIPPINE
CONSTABULARY SUPERVISORY UNIT FOR SECURITY
AND INVESTIGATION AGENCIES (PC-
SUSIA), Respondents.
G.R. No. 91359.
September 25, 1992.
GRIÑO-AQUINO, J.:
Facts:
The constitutionality of the following provisions of R.A. 5487
(otherwise known as the "Private Security Agency Law"), as
amended, is questioned by VMPSI in its
complaint:chanrobles.com.ph : virtual law library
"SECTION 4. Who may Organize a Security or Watchman
Agency. — Any Filipino citizen or a corporation, partnership, or
association, with a minimum capital of five thousand pesos, one
hundred per cent of which is owned and controlled by Filipino
citizens may organize a security or watchman agency: Provided,
That no person shall organize or have an interest in, more than
one such agency except those which are already existing at the
promulgation of this Decree: . . ." (As amended by P.D. Nos. 11
and 100.)
"SECTION 17. Rules and Regulations by Chief, Philippine
Constabulary. — The Chief of the Philippine Constabulary, in
consultation with the Philippine Association of Detective and
Protective Agency Operators, Inc. and subject to the provision
of existing laws, is hereby authorized to issue the rules and
regulations necessary to carry out the purpose of this
Act."cralaw virtua1aw library
VMPSI alleges that the above provisions of R.A. No. 5487
violate the provisions of the 1987 Constitution against
monopolies, unfair competition and combinations in restraint of
trade, and tend to favor and institutionalize the Philippine
Association of Detective and Protective Agency Operators, Inc.
(PADPAO) which is monopolistic because it has an interest in
more than one security agency.
Respondent VMPSI likewise questions the validity of paragraph
3, subparagraph (g) of the Modifying Regulations on the
Issuance of License to Operate and Private Security Licenses
and Specifying Regulations for the Operation of PADPAO
issued by then PC Chief Lt. Gen. Fidel V. Ramos, through Col.
Sabas V. Edades, requiring that "all private security
agencies/company security forces must register as members of
any PADPAO Chapter organized within the Region where their
main offices are located. As such membership requirement in
PADPAO is compulsory in nature, it allegedly violates legal and
constitutional provisions against monopolies, unfair competition
and combinations in restraint of trade.chanrobles.com : virtual
law library
On May 12, 1986, a Memorandum of Agreement was executed
by PADPAO and the PC Chief, which fixed the minimum monthly
Ang, Bartolata, Bellosillo, Estanislao, Garcia, Improgo, Polero, Siriban

contract rate per guard for eight (8) hours of security service per
day at P2,255.00 within Metro Manila and P2,215.00 outside of
Metro Manila (Annex B, Petition).
On June 29, 1987, Odin Security Agency (Odin) filed a complaint
with PADPAO accusing VMPSI of cut-throat competition by
undercutting its contract rate for security services rendered to
the Metropolitan Waterworks and Sewerage System (MWSS),
charging said customer lower than the standard minimum rates
provided in the Memorandum of Agreement. May 12, 1986,
PADPAO found VMPSI guilty of cut-throat competition, hence,
the PADPAO Committee on Discipline recommended the
expulsion of VMPSI from PADPAO and the cancellation of its
license to operate a security agency. The PC-SUSIA made
similar findings and likewise recommended the cancellation of
VMPSI’s license. As a result, PADPAO refused to issue a
clearance/certificate of membership to VMPSI when it requested
one.
VMPSI wrote the PC Chief on March 10, 1988, requesting him
to set aside or disregard the findings of PADPAO and consider
VMPSI’s application for renewal of its license, even without a
certificate of membership from PADPAO.
As the PC Chief did not reply, and VMPSI’s license was expiring
on March 31, 1988, VMPSI filed Civil Case No. 88-471 in the
RTC-Makati, Branch 135, on March 28, 1988 against the PC
Chief and PC-SUSIA. On the same date, the court issued a
restraining order enjoining the PC Chief and PC-SUSIA "from
committing acts that would result in the cancellation or non-
renewal of VMPSI’s license" The PC chief and PC-SUSIA filed
a "Motion to Dismiss, Opposition to the Issuance of Writ of
Preliminary Injunction, and Motion to Quash the Temporary
Restraining Order," on the grounds that the case is against the
State which had not given consent thereto and that VMPSI’s
license already expired on March 31, 1988, hence, the
restraining order or preliminary injunction would not serve any
purpose because there was no more license to be cancelled
(Annex H, Petition). Respondent VMPSI opposed the motion.
On April 18, 1988, the lower court denied VMPSI’s application
for a writ of preliminary injunction for being premature because
it "has up to May 31, 1988 within which to file its application for
renewal pursuant to Section 2 (e) of Presidential Decree No.
199. On May 23, 1988, VMPSI reiterated its application for the
issuance of a writ of preliminary injunction because PC-SUSIA
had rejected payment of the penalty for its failure to submit its
application for renewal of its license and the requirements
therefor within the prescribed period in Section 2(e) of the
Revised Rules and Regulations Implementing R.A. 5487, as
amended by P.D. 1919 (Annex M, Petition).
On June 10, 1998, the RTC-Makati issued a writ of preliminary
injunction upon a bond of P100,000.00, restraining the
defendants, or any one acting in their behalf, from cancelling or
denying renewal of VMPSI’s license, until further orders from the
court.
The PC Chief and PC-SUSIA filed a Motion for Reconsideration
of the above order, but it was denied by the court in its Order of
August 10, 1988 (Annex R, Petition).
On November 3, 1988, the PC Chief and PC-SUSIA sought
relief by a petition for certiorari in the Court of Appeals. On
Page 19 of 48
August 11, 1989, the Court of Appeals granted the petition for
review. Hence this petition.
Issue: in this case is whether or not VMPSI’s complaint against
the PC Chief and PC-SUSIA is a suit against the State without
its consent.
Held: Yes. The State may not be sued without its consent
(Article XVI, Section 3, of the 1987 Constitution). Invoking this
rule, the PC Chief and PC-SUSIA contend that, being
instrumentalities of the national government exercising a
primarily governmental function of regulating the organization
and operation of private detective, watchmen, or security guard
agencies, said official (the PC Chief) and agency (PC-SUSIA)
may not be sued without the Government’s consent, especially
in this case because VMPSI’s complaint seeks not only to
compel the public respondents to act in a certain way, but worse,
because VMPSI seeks actual and compensatory damages in
the sum of P1,000,000.00, exemplary damages in the same
amount, and P200,000.00 as attorney’s fees from said public
respondents. Even if its action prospers, the payment of its
monetary claims may not be enforced because the State did not
consent to appropriate the necessary funds for that purpose.
Thus did we hold in Shauf v. Court of Appeals, 191 SCRA
713:j"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."
(Emphasis supplied.)
A public official may sometimes be held liable in his
personal or private capacity if he acts in bad faith, or
beyond the scope of his authority or jurisdiction (Shauf v.
Court of Appeals, supra), however, since the acts for which
the PC Chief and PC-SUSIA are being called to account in
this case, were performed by them as part of their official
duties, without malice, gross negligence, or bad faith, no
recovery may be had against them in their private
capacities.
We agree with the observation of the Court of Appeals that the
Memorandum of Agreement dated May 12, 1986 does not
constitute an implied consent by the State to be
sued:jgc:chanrobles.com.ph
"The Memorandum of Agreement dated May 12, 1986 was
entered into by the PC Chief in relation to the exercise of a
function sovereign in nature. The correct test for the application
of state immunity is not the conclusion of a contract by the State
but the legal nature of the act. This was clearly enunciated in the
case of United States of America v. Ruiz where the Hon.
Supreme Court held:jgc:chanrobles.com.ph
"‘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
Ang, Bartolata, Bellosillo, Estanislao, Garcia, Improgo, Polero, Siriban

to have tacitly given its consent to be sued only when it enters
into a business contract. It does not apply where the contract
relates to the exercise of its functions.’ (136 SCRA 487, 492.)
"In the instant case, the Memorandum of Agreement entered
into by the PC Chief and PADPAO was intended to
professionalize the industry and to standardize the salaries of
security guards as well as the current rates of security services,
clearly, a governmental function. The execution of the said
agreement is incidental to the purpose of R.A. 5487, as
amended, which is to regulate the organization and operation of
private detective, watchmen or security guard agencies.
(Emphasis ours.)" (pp. 258-259, Rollo.)
Waiver of the State’s immunity from suit, being a derogation of
sovereignty, will not be lightly inferred, but must be construed
strictissimi juris (Republic v. Feliciano, 148 SCRA 424). The
consent of the State to be sued must emanate from statutory
authority, hence, from a legislative act, not from a mere
memorandum. Without such consent, the trial court did not
acquire jurisdiction over the public respondents.
--------------------------------------xxx----------------------------------
SUIT AGAINST PUBLIC OFFICIAL
M. H. WYLIE v. AURORA I. RARANG
G.R. No. 74135 May 28, 1992
GUTIERREZ, JR., J.:
FACTS
In Feb. 1978, M.H. Wylie was the assistant
administrative officer and Capt. James Williams was the
commanding officer of the US Naval Base in Subic Bay,
Olongapo City. Aurora I. Rarang was employed as a
merchandise control guard in the Office of the Provost Marshal.
THE “POD”. Wylie, in his capacity as asst. admin. officer,
supervised the publication of the Naval Base station’s “Plan of
the Day” (POD), which featured important announcements,
necessary precautions, and general matters of interest to
military personnel. One of its regular features was the “action
line inquiry.”
On Feb. 3, 1978, the POD published, under the
“NAVSTA Action Line Inquiry,” the ff:
Question: I have observed that Merchandise Control inspector/
inspectress are (sic) consuming for their own benefit things they
have confiscated from Base Personnel. The observation is even
more aggravated by consuming such confiscated items as
cigarettes and food stuffs PUBLICLY. This is not to mention
‘Auring’ who is in herself, a disgrace to her division and to the
Office of the Provost Marshal. In lieu of this observation, may I
therefore, ask if the head of the Merchandise Control Division is
aware of this malpractice? Answer: Merchandise Control
Guards and all other personnel are prohibited from appropriating
confiscated items for their own consumption or use. Two locked
containers are installed at the Main Gate area for deposit of
confiscated items and the OPM evidence custodian controls
access to these containers. Merchandise Control Guards are
permitted to eat their meals at their worksite due to heavy
workload. Complaints regarding merchandise control guards
procedure or actions may be made directly at the Office of the
Provost Marshal for immediate and necessary action.
AN ACTION FOR DAMAGES was instituted by Rarang
against Wylie, Williams, and the US Naval Base. She prayed for
P300K moral damages, exemplary damages, and P50K
attorney’s fees. She alleged that the article constituted false,
Page 20 of 48
injurious, and malicious defamation and libel tending to impeach
her honesty, virtue and reputation exposing her to public hatred,
contempt and ridicule; and that the libel was published and
circulated in the English language and read by almost all the
U.S. Naval Base personnel. WYLIE, WILLIAMS, THE NAVAL
BASE FILED A MOTION TO DISMISS based on the ground that
1. Wylie and Williams acted in the performance of their official
functions as officers of the US Navy and are immune from suit;
2. The US Naval Base is an instrumentality of the US
government which cannot be sued without its consent; and 3.
lack of jurisdiction over the subject matter and the parties.
Trial court ruled in favor of Rarang, holding that the acts
of Wylie and Williams weren’t official acts of the US government
in the operation and control of the Base but personal and tortious
acts which are exceptions to the general rule that a sovereign
country can’t be sued in the court of another country without its
consent. IAC affirmed with modification the trial court’s ruling.
ISSUE
WON Wylie and Williams are liable for the published
article in the POD. Does the grant of rights, power, and authority
to the US under the RP-US Bases Treaty cover immunity of its
officers from crimes and torts?
RULING
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…Even without such affirmation,
we would still be bound by the generally accepted principles of
international law under the doctrine of incorporation. 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! (Kawanakoa v. Polybank) 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 par
in parem, non habet imperium . 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.’
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 (Garcia
v. Chief of Staff). 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
Ang, Bartolata, Bellosillo, Estanislao, Garcia, Improgo, Polero, Siriban

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 it itself commences
litigation…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. (Rep. v. Purisima)… 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 (US v. Ruiz). As for the filing of a
complaint by the government, suability will result only where the
government is claiming affirmative relief from the defendant.
“The traditional rule of immunity excepts 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 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.” 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
US. 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 US, 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 US itself is not
involved. If found liable, they and they alone must satisfy the
judgment.
Indeed the imputation of theft contained in the POD
dated February 3, 1978 is a defamation against the character
and reputation of the private respondent. Petitioner Wylie
himself admitted that the Office of the Provost Marshal explicitly
recommended the deletion of the name Auring if the article were
published. The petitioners, however, were negligent because
under their direction they issued the publication without deleting
the name "Auring." Such act or omission is ultra vires and cannot
be part of official duty. It was a tortious act which ridiculed the
private respondent. As a result of the petitioners' act, the private
respondent, according to the record, suffered besmirched
reputation, serious anxiety, wounded feelings and social
humiliation, specially so, since the article was baseless and
false. The petitioners, alone, in their personal capacities are
liable for the damages they caused the private respondent.
DISPOSITIVE PORTION
WHEREFORE, the petition is hereby DISMISSED. The
questioned decision and resolution of the then Intermediate
Appellate Court, now Court of Appeals, are AFFIRMED.
---------------------------------------xxx---------------------------------------
G.R. No. 84607 March 19, 1993
REPUBLIC OF THE PHILIPPINES, et. Al petitioners, vs.
HON. EDILBERTO G. SANDOVAL, Regional Trial Court of
Manila, Branch IX, respondents.
Page 21 of 48
TOPIC: Suit Against Public Officials
CAMPOS, JR.
FACTS
The massacre was the culmination of eight days and seven
nights of encampment by members of the militant Kilusang
Magbubukid sa Pilipinas (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 Malacañang 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:
". . . inalis namin ang barikada bilang kahilingan ng ating
Presidente, pero kinakailangan alisin din niya ang barikada sa
Mendiola sapagkat bubutasin din namin iyon at dadanak ang
dugo . . . ."
The farmers then proceeded to march to Malacañang, 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), Bagong Alyansang Makabayan
(BAYAN), League of Filipino Students (LFS) and Kongreso ng
Pagkakaisa ng Maralitang Lungsod (KPML).
At around 1:00 p.m., the marchers reached Liwasang Bonifacio
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 Malacañang. 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
Ang, Bartolata, Bellosillo, Estanislao, Garcia, Improgo, Polero, Siriban

lines and rush towards Malacañang, CAPCOM Commander
General Ramon E. Montaño 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 Malacañang. 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. Police Colonel Edgar
Dula Torres, 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 the command of Police Major Demetrio dela
Cruz.
(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, under the command of
Major Felimon B. 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 under Fire
Superintendent Mario C. 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
Malacañang stood the VOLVO Mobile Communications Van of
the Commanding General of CAPCOM/INP, General Ramon E.
Montaño. At this command post, after General Montaño had
conferred with TF Nazareno Commander, Colonel Cezar
Nazareno, about the adequacy and readiness of his forces, it
was agreed that Police General Alfredo S. Lim would
designate Police Colonel Edgar Dula Torres and Police Major
Conrado Franciscoas negotiators with the marchers. Police
General Lim then proceeded to the WPD CDC elements already
Page 22 of 48
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. (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 headed by Lt. Romeo
Paquinto and Lt. Laonglaan Goce sped 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 Liwasang
Bonifacio upon order of General Montaño 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. (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 A.O. 11, which created the Citizens' Mendiola
Commission. 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.
From the results of the probe, the Commission
recommended 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 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 Pambansa Blg. 880, the Public Assembly Act of 1985.
The Commission's recommendation also included the
prosecution of the marchers, for carrying deadly or offensive
Ang, Bartolata, Bellosillo, Estanislao, Garcia, Improgo, Polero, Siriban

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
Pambansa Blg. 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. Montaño; (2) Police Gen. Alfredo S. Lim; (3)
Police Gen. Edgar Dula Torres; (4) Police Maj. Demetrio dela
Cruz; (5) Col. Cezar Nazareno; and (5) Maj. Felimon Gasmin,
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, herein
petitioners, (Caylao group) filed a formal letter of demand for
compensation from the Government. This formal demand was
indorsed by the office of the Executive Secretary to the DBM.
The House Committee on Human Rights, recommended the
expeditious payment of compensation to the Mendiola victims.
After almost a yea, 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.
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 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.
ISSUE
Whether or not the State has waived its immunity from suit.
SC RULING
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. 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.
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
Page 23 of 48
Commission was to have a body that will conduct an
"investigation of the disorder, deaths and casualties that took
place." 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.
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 a fact-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:
(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.
Moreover, the members of the police and military crowd
dispersal units committed a prohibited act under B.P. Blg. 880
as there was unnecessary firing by them in dispersing the
marchers.
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. Until recently in 1991, 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.
Ang, Bartolata, Bellosillo, Estanislao, Garcia, Improgo, Polero, Siriban

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, even though the officers or
agents who are made defendants claim to hold or act only by
virtue of a title of the state and as its agents and servants. 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.”
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 Shauf vs. Court of Appeals,
herein public officials, having been found to have acted beyond
the scope of their authority, may be held liable for damages.
DISPOSITIVE PORTION
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.
---------------------------------------xxx--------------------------------------
PEDRO SYQUIA, GONZALO SYQUIA, and LEOPOLDO
SYQUIA vs NATIVIDAD ALMEDA LOPEZ, Judge of
Municipal. NATIVIDAD ALMEDA LOPEZ, Judge of
MunicipalCourt of Manila, CONRADO V. SANCHEZ, Judge
of Court of FirstCourt of Manila, CONRADO V. SANCHEZ,
Judge of Court of FirstInstance of Manila, GEORGE F.
MOORE ET AL.Instance of Manila, GEORGE F. MOORE
G.R. No. L-1648. August 17, 1949. MONTEMAYOR, J. / Suit
Against Public Official
FACTS
Plaintiffs, Pedro Syquia and Leopoldo Syquia are the undivided
joint owners of three apartment buildings situated in Manila.
They executed three lease contracts - one for each of the three
apartments. The period for the three leases was to be “for the
duration of the war and six months thereafter, unless sooner
terminated by the US.” The apartment buildings were used for
billeting and quartering officers of the US Armed Forces
stationed in Manila.
Six months after September 2, 1945 - when Japan surrendered
- plaintiffs approached the defendants George Moore and
Erland Tillman and requested the return of the apartment
buildings. Moore and Tillman expressed to plaintiffs that the US
Army wanted to continue occupying the premises. Plaintiffs
requested to renegotiate said leases, to execute a lease
contract for a period of three years and to pay a reasonable
rental higher than those payable under the old contracts.
Respondents sent a letter refusing to execute new leases but
advised that the US Army will vacate the apartments before
February 1, 1947. Not being in conformity with the old lease
agreements, plaintiffs formally requested Tillman to cancel said
leases and to release the apartments on June 28, 1946. Tillman
refused to comply with the request. Because of the assurance
that the US Government would vacate the premises before
Page 24 of 48
February 1, 1947, the plaintiffs took no further steps to secure
possession of the buildings and accepted the monthly rentals
tendered by respondents. On February 17, 1947, plaintiffs
served a formal notice to the occupants demanding: (a)
cancellation of said leases; (b) increase in rentals to P300 a
month; (c) execution of new leases (d)release of said apartment
buildings within thirty days of said notice in the event of failure
to comply with said demands.
The thirty-day period lapsed without any of the respondents
complying with the demand. Plaintiffs commenced an action in
the Municipal Court of Manila in the form of an action for
Unlawful Detainer against respondents. Respondents filed a
Motion to Dismiss 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 US
Government and not the individual defendants. Furthermore, the
respondent argued that the war between the US and her allies
on one side and Germany and Japan on the other had not yet
been terminated and consequently the period of the three leases
has not yet expired. Also, a foreign government like the US
cannot be sued in the courts of another state without its consent.
That even though the US Government was not named as the
defendant in the complaint, it is nevertheless the real defendant
as the parties named are officers of the US Government. The
Municipal Court dismissed the action. The CFI of Manila
affirmed the order of the lower court.
ISSUE: Does the court have jurisdiction to hear and try the
case?
HELD: NONE
We shall concede as correctly did the Court of First Instance,
that following the doctrine laid down in the cases of U. S. vs. Lee
and 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. (See case
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
Ang, Bartolata, Bellosillo, Estanislao, Garcia, Improgo, Polero, Siriban

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
Page 25 of 48
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 Land vs. Dollar already 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
Ang, Bartolata, Bellosillo, Estanislao, Garcia, Improgo, Polero, Siriban

acceptance that we deem it unnecessary to cite authorities in
support thereof.
---------------------------------------xxx-------------------------------
B. STATE IMMUNITY/ROYAL PREROGATIVE BASIS;
RATIONALE
8. SUITS AGAINST PUBLIC OFFICIALS
DALE SANDERS, AND A.S. MOREAU, JR, 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
G.R. No. L-46930 June 10, 1988
CRUZ, J.
FACTS: Petitioner Sanders was the special services director of
the U.S. Naval Station (NAVSTA) while Moreau was the
commanding officer of the Subic Naval Base. Private
Respondents Rossi and Wyers were American citizens
employed as gameroom attendants in the special services
department of the NAVSTA.
Rossi and Wyers were advised that their employment had been
converted from permanent full-time to permanent part-time.
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 for the reinstatement
of the private respondents to permanent full-time status plus
backwages. The report contained an observation that "Special
Services management practices an autocratic form of
supervision."
In a letter addressed to Moreau, 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."
Before the start of the grievance hearings, Moreau sent a letter
to the Chief of Naval Personnel explaining the change of the
private respondent's employment status and requesting
concurrence therewith.
Rossi and Wyers filed in the CFI damages against Sanders and
Moreau and 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.Rossi and Wyers made it clear that Sanders and Moreau
were being sued in their private or personal capacity.
LC RULING:
Motion was denied 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.
Hence this petition.
ISSUE: Whether or not the petitioners were performing their
official duties when they did the acts for which they have been
sued for damages?
HELD: YES, Hence they cannot be sued. 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
Page 26 of 48
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 were prima facie personal and tortious, decided to proceed
to trial to determine inter alia their precise character on the
strength of the evidence to be submitted by the parties. Sanders
and Moreau have argued that no such evidence was needed to
substantiate their claim of jurisdictional immunity.
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.
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, 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
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. 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
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.
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. In the case of foreign
states, the rule is derived from the principle of the sovereign
equality of states which wisely admonishes that par in parem
non habet imperium and that a contrary attitude would "unduly
vex the peace of nations." Our adherence to this precept is
formally expressed in Article II, Section 2, of our Constitution,
Ang, Bartolata, Bellosillo, Estanislao, Garcia, Improgo, Polero, Siriban

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.
The case at bar, to repeat, comes under the rule and not under
any of the recognized exceptions. 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 Rossi
and Wyers. 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. This, to, is well settled Furthermore, applying now
our own penal laws, the letters come under the concept of
privileged communications and are not punishable, let alone the
fact that the resented remarks are not defamatory by our
standards. It seems the Rossi and Wyers 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.
DISPOSITIVE PORTION: 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.
--------------------------------xxx----------------------------
TOPIC: Suit against Public Officials
G.R. No. L- 24548 October 27, 1983
WENCESLAO VlNZONS TAN, THE DIRECTOR OF
FORESTRY, APOLONIO THE SECRETARY OF
AGRICULTURE AND NATURAL RESOURCES JOSE Y.
FELICIANO, respondents-appelllees,
vs.
THE DIRECTOR OF FORESTRY, APOLONIO RIVERA, THE
SECRETARY OF AGRICULTURE AND N ATURAL
RESOURCES JOSE Y. FELICIANO, respon dents-
appellees,RAVAGO COMMERCIAL CO., JORGE LAO
HAPPICK and ATANACIO MALLARI, intervenors,
FACTS:
Sometime in April 1961, the Bureau of Forestry issued Notice
No. 2087, advertising for public bidding a certain tract of public
forest land situated in Olongapo, Zambales, provided tenders
were received on or before May 22, 1961. This public forest
land, consisting of 6,420 hectares, is located within the former
U.S. Naval Reservation comprising 7,252 hectares of
timberland, which was turned over by the United States
Government to the Philippine Government
On May 5, 1961, petitioner-appellant Wenceslao Vinzons Tan
submitted his application in due form after paying the necessary
fees and posting tile required bond therefor. Nine other
applicants submitted their offers before the deadline
Thereafter, questions arose as to the wisdom of having the area
declared as a forest reserve or allow the same to be awarded to
the most qualified bidder. On June 7, 1961, then President
Page 27 of 48
Carlos P. Garcia issued a directive to the Director of the Bureau
of Forestry, which read as follows:
It is desired that the area formerly covered by the Naval
Reservation be made a forest reserve for watershed purposes.
Prepare and submit immediately a draft of a proclamation
establishing the said area as a watershed forest reserve for
Olongapo, Zambales. It is also desired that the bids received by
the Bureau of Forestry for the issuance of the timber license in
the area during the public bidding conducted last May 22, 1961
be rejected in order that the area may be reserved as above
stated. ...
On August 3, 1961, Secretary Cesar M. Fortich of Agriculture
and Natural Resources sustained the findings and
recommendations of the Director of Forestry who concluded that
"it would be beneficial to the public interest if the area is made
available for exploitation under certain conditions,"
The Office of the President in its 4th Indorsement dated
February 2, 1962, signed by Atty. Juan Cancio, Acting Legal
Officer, "respectfully returned to the Honorable Secretary of the
Department of Agriculture and Natural Resources for
appropriate action," the papers subject of Forestry Notice No.
2087 which was referred to the Bureau of Forestry for decision
Finally, of the ten persons who submitted proposed the area was
awarded to herein petitioner-appellant Wenceslao Vinzons Tan,
on April 15, 1963 by the Bureau of Forestry. Against this award,
bidders Ravago Commercial Company and Jorge Lao Happick
filed motions for reconsideration which were denied by the
Director of Forestry on December 6, 1963.
On May 30, 1963, the Secretary of Agriculture and Natural
Resources Benjamin M. Gozon — who succeeded Secretary
Cesar M. Fortich in office — issued General Memorandum
Order No. 46, series of 1963, pertinent portions of which state:
xxx xxx xxx
SUBJECT: ... ... ...
(D)elegation of authority to the Director of Forestry to grant
ordinary timber licenses.
1. ... ... ...
2. The Director of Forestry is hereby authorized to grant (a) new
ordinary timber licenses where the area covered thereby is not
more than 3,000 hectares each; and (be the extension of
ordinary timber licenses for areas not exceeding 5,000 hectares
each;
3. This Order shall take effect immediately (p. 267, CFI rec.).
Thereafter, Jose Y. Feliciano was appointed as Acting secretary
of Agriculture and Natural Resources, replacing secretary
Benjamin M. Gozon. Upon assumption of office he Immediately
promulgate on December 19, 19b3 General memorandum
Order No. 60, revoking the authority delegated to the Director of
Forestry, under General Memorandum order No. 46, to grant
ordinary timber licenses, which order took effect on the same
day, December 19, 1963. Pertinent portions of the said Order
read as follows:
xxx xxx xxx
SUBJECT: Revocation of General Memorandum Order No 46
dated May 30, 1963 —
1. In order to acquaint the undersigned with the volume and
Nature of the work of the Department, the authority delegated to
the Director of forestry under General Memorandum Order No.
46, dated May 30, 1963, to grant (a) new ordinary timber
licenses where the area covered thereby is not more than 3,000
hectares each; and (b) the extension of ordinary timber licenses
for areas not exceeding 3,000 hectares each is hereby
revoked. Until further notice, the issuance of' new licenses ,
Ang, Bartolata, Bellosillo, Estanislao, Garcia, Improgo, Polero, Siriban

including amendments thereto, shall be signed by the secretary
of Agriculture and Natural Resources.
On the same date that the above-quoted memorandum took
effect, December 19, 1963, Ordinary Timber License No. 20-'64
(NEW) dated April 22, 1963, in the name of Wenceslao Vinzons
Tan, was signed by then Acting Director of Forestry Estanislao
R. Bernal without the approval of the Secretary of Agriculture
and Natural Resources. On January 6, 1964, the license was
released by the Office of the Director of Forestry (p. 30, CFI rec.;
p. 77, rec.). It was not signed by the Secretary of Agriculture and
Natural Resources as required by Order No. 60 aforequoted.
On February 12, 1964, Ravago Commercial Company wrote a
letter to the Secretary of Agriculture and Natural Resources shall
be considered by tile Natural Resources praying that, pending
resolution of the appeal filed by Ravago Commercial Company
and Jorge Lao Happick from the order of the Director of Forestry
denying their motion for reconsideration, OTI No. 20-'64 in the
name of Wenceslao V. Tan be cancelled or revoked on the
ground that the grant thereof was irregular, anomalous and
contrary to existing forestry laws, rules and regulations.
On March 9, 1964, acting on the said representation made by
Ravago Commercial Company, the Secretary of Agriculture and
Natural Resources promulgated an order declaring Ordinary
Timber License No. 20-'64 issued in the name of Wenceslao
Vinzons Tan, as having been issued by the Director of Forestry
without authority, and is therefore void ab initio. The dispositive
portion of said order reads as follows:
WHEREFORE, premises considered, this Office is of the
opinion and so holds that O.T. License No. 20-'64 in the name
of Wenceslao Vinzons Tan should be, as hereby it is, REVOKED
AND DECLARED without force and effect whatsoever from the
issuance thereof.
The Director of Forestry is hereby directed to stop the logging
operations of Wenceslao Vinzons Tan, if there be any, in the
area in question and shall see to it that the appellee shall not
introduce any further improvements thereon pending the
disposition of the appeals filed by Ravago Commercial
Company and Jorge lao Happick in this case"
Petitioner-appellant moved for a reconsideration of the order,
but the Secretary of Agriculture and Natural Resources denied
the motion
On April 11, 1964, the Secretary of Agriculture and Natural
Resources, acting on the separate appeals filed by Jorge Lao
Happick and Ravago Commercial Company, from the order of
the Director of Forestry dated April 15, 1963, awarding to
Wenceslao Vinzons Tan the area under Notive No. 2087, and
rejecting the proposals of the other applicants covering the
same area, promulgated an order commenting that in view of
the observations of the Director of Forestry just quoted, "to grant
the area in question to any of the parties herein, would
undoubtedly adversely affect public interest which is paramount
to private interests," and concluding that, "for this reason, this
Office is of the opinion and so holds, that without the necessity
of discussing the appeals of the herein appellants, the said
appeals should be, as hereby they are, dismissed and this case
is considered a closed matter insofar as this Office is concerned"
RULING: Petitioner-appellant not only failed to exhaust his
administrative remedies, but also failed to note that his action is
a suit against the State which, under the doctrine of State
immunity from suit, cannot prosper unless the State gives its
consent to be sued Kawananakoa vs. Polybank, 205 U.S. 349;
Siren vs. U.S., 7 Wall. 152; Sec. 16, Art. XV, 1973 Constitution).
The respondents-appellees, in revoking the petitioner-
appellant's timber license, were acting within the scope of their
Page 28 of 48
authority. Petitioner-appellant contends that "this case is not a
suit against the State but an application of a sound principle of
law whereby administrative decisions or actuations may be
reviewed by the courts as a protection afforded the citizens
against oppression". But, piercing the shard of his contention,
We find that petitioner-appellant's action is just an attempt to
circumvent the rule establishing State exemption from suits. He
cannot use that principle of law to profit at the expense and
prejudice of the State and its citizens. The promotion of public
welfare and the protection of the inhabitants near the public
forest are property, rights and interest of the State. Accordingly,
"the rule establishing State exeraiption from suits may not be
circumvented by directing the action against the officers of the
State instead of against the State itself. In such cases the State's
immunity may be validly invoked against the action as long as it
can be shown that the suit really affects the property, rights, or
interests of the State and not merely those of the officer
nominally made party defendant" (SINCO, Phil. Political Law,
10th ed., p. 35; Salgado vs. Ramos, 64 Phil. 724; see also Angat
River Irrigation System vs. Angat River Workers' Union, G.R.
No. L-10943-44, Dec. 28, 1957, 102 Phil. 789, 800-802; Mobil
PhiL vs. Customs Arrastre Service, 18 SCRA 1120, 1121-1125;
Bureau of Printing vs. Bureau of Printing Employees'
Association, 1 SCRA 340, 341, 343).
Both the Secretary of Agriculture and Natural Resources and the
Director of Forestry acted in their capacity as officers of the
State, representatives of the sovereign authority discharging
governmental powers. A private individual cannot issue a timber
license.
Consequently, a favorable judgment for the petitioner-appellant
would result in the government losing a substantial part of its
timber resources. This being the case, petitioner-appellant's
action cannot prosper unless the State gives its consent to be
sued.
-------------------------------xxx--------------------------
9. WAIVER OF IMMUNITY
TOPIC: Waiver of Immunity; Consent to be Sued
CASE TITLE: UNIVERSITY OF THE PHILIPPINES, JOSE V.
ABUEVA, RAUL P. DE GUZMAN, RUBEN P. ASPIRAS,
EMMANUEL P. BELLO, WILFREDO P. DAVID, CASIANO S.
ABRIGO, and JOSEFINA R. LICUANAN, Petitioners, vs.
HON. AGUSTIN S. DIZON, his capacity as Presiding Judge
of the Regional Trial Court of Quezon City, Branch 80,
STERN BUILDERS, INC., and SERVILLANO DELA CRUZ,
Respondents.
G.R. No. 171182
DATE: August 23, 2012
PONENTE: Justice Bersamin
FACTS: On August 30, 1990, the UP entered into a General
Construction Agreement with respondent Stern Builders
Corporation (Stern Builders) for the construction of the
extension building and the renovation of the College of Arts and
Sciences Building in the campus of UPLB.
In the course of the implementation of the contract, Stern
Builders submitted three progress billings corresponding to the
work accomplished, but the UP paid only two of the billings. The
third billing worth ₱ 273,729.47 was not paid due to its
disallowance by the Commission on Audit (COA). Despite the
lifting of the disallowance, the UP failed to pay the billing,
prompting Stern Builders and dela Cruz to sue the UP and its
co-respondent officials to collect the unpaid billing and to
recover various damages.
Ang, Bartolata, Bellosillo, Estanislao, Garcia, Improgo, Polero, Siriban

On November 28, 2001, the RTC rendered its decision in favor
of Stern Builders and ordered UP to pay them around P16M
representing the amounts of the third billing, additional
accomplished work and retention money (P500k), actual
damages (P5M), moral damages (P10M), plus attorney’s fees
and costs of suit.
RTC denied UP’s MR so it filed a notice of appeal which the RTC
denied due course for having been filed out of time and granted
the Stern Builders’ motion for execution.
The RTC issued the writ of execution and the sheriff of the RTC
served the writ of execution and notice of demand upon the UP.
The UP filed an urgent motion to quash the writ of execution
dated October 4, 2002, and to restrain the
proceedings.However, the RTC denied the urgent motion on
April 1, 2003. Thereafter, the UP assailed the denial of due
course to its appeal through a petition for certiorari in the Court
of Appeals but the CA dismissed the petition for certiorari upon
finding that the UP’s notice of appeal had been filed late. The
UP sought a reconsideration, but the CA denied the same. On
May 11, 2004, the UP appealed to the Court by petition for
review on certiorari (G.R. No. 163501). On June 23, 2004, the
Court denied the petition for review. The UP moved for the
reconsideration of the denial of its petition for review on August
29, 2004,but the Court denied the motion on October 6,
2004.The denial became final and executory on November 12,
2004.
In the meanwhile that the UP was exhausting the available
remedies to overturn the denial of due course to the appeal and
the issuance of the writ of execution, Stern Builders filed in the
RTC their motions for execution despite their previous motion
having already been granted and despite the writ of execution
having already issued. On June 11, 2003, the RTC granted
another motion for execution filed on May 9, 2003 (although the
RTC had already issued the writ of execution on October 4,
2002).
On June 23, 2003 and July 25, 2003, respectively, the sheriff
served notices of garnishment on the UP’s depository banks,
namely: Land Bank of the Philippines (Buendia Branch) and the
Development Bank of the Philippines (DBP), Commonwealth
Branch. The UP assailed the garnishment through an urgent
motion to quash the notices of garnishment; and a motion to
quash the writ of execution dated May 9, 2003.
Cutting the story short, RTC ordered the release of the funds.
Aggrieved, UP elevated the matter to the CA. The CA sustained
the RTC. Hence, this petition.
ISSUE/s: Whether UP’s funds are subject to garnishment (In
relation to whether UP as a government entity has given its
consent to be sued)
RULING: UP’s funds, being government funds, are not subject
to garnishment.
The UP was founded on June 18, 1908 through Act 1870 to
provide advanced instruction in literature, philosophy, the
sciences, and arts, and to give professional and technical
training to deserving students. Despite its establishment as a
body corporate, the UP remains to be a "chartered institution"
performing a legitimate government function. It is an institution
of higher learning, not a corporation established for profit and
declaring any dividends. In enacting Republic Act No. 9500 (The
University of the Philippines Charter of 2008), Congress has
declared the UP as the national university "dedicated to the
Page 29 of 48
search for truth and knowledge as well as the development of
future leaders."
Irrefragably, the UP is a government instrumentality, performing
the State’s constitutional mandate of promoting quality and
accessible education. As a government instrumentality, the UP
administers special funds sourced from the fees and income
enumerated under Act No. 1870 and Section 1 of Executive
Order No. 714, and from the yearly appropriations, to achieve
the purposes laid down by Section 2 of Act 1870, as expanded
in Republic Act No. 9500. All the funds going into the possession
of the UP, including any interest accruing from the deposit of
such funds in any banking institution, constitute a "special trust
fund," the disbursement of which should always be aligned with
the UP’s mission and purpose, and should always be subject to
auditing by the COA.
Presidential Decree No. 1445 defines a "trust fund" as a fund
that officially comes in the possession of an agency of the
government or of a public officer as trustee, agent or
administrator, or that is received for the fulfillment of some
obligation. A trust fund may be utilized only for the "specific
purpose for which the trust was created or the funds received."
The funds of the UP are government funds that are public in
character. They include the income accruing from the use of real
property ceded to the UP that may be spent only for the
attainment of its institutional objectives. Hence, the funds
subject of this action could not be validly made the subject of the
RTC’s writ of execution or garnishment. The adverse judgment
rendered against the UP in a suit to which it had impliedly
consented was not immediately enforceable by execution
against the UP, because suability of the State did not
necessarily mean its liability.
A marked distinction exists between suability of the State and its
liability. As the Court succinctly stated in Municipality of San
Fernando, La Union v. Firme:
“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.”
Also, in Republic v. Villasor, where 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 was
nullified, the Court said:
“xxx 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
Ang, Bartolata, Bellosillo, Estanislao, Garcia, Improgo, Polero, Siriban

cannot be allowed to be paralyzed or disrupted by the diversion
of public funds from their legitimate and specific objects, as
appropriated by law.”
The UP correctly submits here that the garnishment of its funds
to satisfy the judgment awards of actual and moral damages
(including attorney’s fees) was not validly made if there was no
special appropriation by Congress to cover the liability. It was,
therefore, legally unwarranted for the CA to agree with the
RTC’s holding in the order issued on April 1, 2003 that no
appropriation by Congress to allocate and set aside the payment
of the judgment awards was necessary because "there (were)
already an appropriations (sic) earmarked for the said project."
The CA and the RTC thereby unjustifiably ignored the legal
restriction imposed on the trust funds of the Government and its
agencies and instrumentalities to be used exclusively to fulfill the
purposes for which the trusts were created or for which the funds
were received except upon express authorization by Congress
or by the head of a government agency in control of the funds,
and subject to pertinent budgetary laws, rules and regulations.
Indeed, an appropriation by Congress was required before the
judgment that rendered the UP liable for moral and actual
damages (including attorney’s fees) would be satisfied
considering that such monetary liabilities were not covered by
the "appropriations earmarked for the said project." The
Constitution strictly mandated that "(n)o money shall be paid out
of the Treasury except in pursuance of an appropriation made
by law."
DISPOSITIVE PORTION: WHEREFORE, the Court GRANTS
the petition for review on certiorari; REVERSES and SETS
ASIDE the decision of the Court of Appeals under review;
ANNULS the orders for the garnishment of the funds of the
University of the Philippines and for the release of the garnished
amount to Stern Builders Corporation and Servillano dela Cruz;
and DELETES from the decision of the Regional Trial Court
dated November 28, 2001 for being void only the awards of
actual damages of ₱ 5,716,729.00, moral damages of ₱
10,000,000.00, and attorney's fees of ₱ 150,000.00, plus ₱
1,500.00 per appearance, in favor of Stern Builders Corporation
and Servillano dela Cruz.
The Court ORDERS Stem Builders Corporation and Servillano
dela Cruz to redeposit the amount of ₱ 16,370,191.74 within 10
days from receipt of this decision.
Costs of suit to be paid by the private respondents.
-----------------------------------xxx----------------------------
REPUBLIC OF THE PHILIPPINES v. PABLO FELICIANO and
INTERMEDIATE APPELLATE COURT
G.R. No. 70853, 12 March 1987, J. Yap
PRINCIPLE: WAIVER OF IMMUNITY
On 22 January 1970, Feliciano filed a complaint against the
Republic, for the recovery of ownership and possession of a
parcel of land, situated Camarines Sur. He alleged that he
bought the property from Gardiola by virtue of a Contract of Sale.
That Gardiola had acquired the property by purchase from the
heirs of Abrazado whose title to the said property was evidenced
Page 30 of 48
by an informacion posesoria. Feliciano made improvements and
cause it to be surveyed and thereafter approved by the Director
of Lands.
President Magsaysay issued proclamation No. 90 reserving for
settlement purposes, under the administration of the National
Resettlement and Rehabilitation Administration (NARRA), a
tract of land situated in the municipalities of Camarines Sur, after
which the NARRA and its successor agency, the Land Authority,
started sub-dividing and distributing the land to the settlers; that
the property in question, while located within the reservation
established under Proclamation 90, was the private property of
Feliciano and should therefore be excluded therefrom. Feliciano
prayed that he be declared the rightful owner and true owner of
the property in question and that his title of ownership based on
informacion posesoria be declared valid.
IAC decided in favor of Feliciano. The intervenors filed a motion
to dismiss, principally on the ground that the Republic cannot be
sued without its consent and hence the action cannot prosper.
ISSUE: Whether or not the contention of the Republic for its non-
suability is proper.
The petition is meritorious. The doctrine of non-suability of the
State has proper application in this case. The plaintiff has
impleaded the Republic as defendant in an action for recovery
of ownership and possession of a parcel of land, brining the
State to court just like any private person who is claimed to be
usurping a piece of property. As suit for a recovery of property
is not an action in rem but an action in personam.
By its caption and its allegation and prayer, the complaint is a
clearly a suit against the State, which under settled
jurisprudence is not permitted, except upon showing that the
State has consented to be sued, either expressly or by
implication through the use of statutory language too plain to be
misinterpreted. The complaint itself fails to allege the existence
of such consent. It is now settled that such defense may be
invoked by the courts sua sponte at any stage of the
proceedings.
The exclusion of existing privates from the reservation
established by Proclamation 90 cannot be construed as a waiver
of the immunity of the state from suit. Waiver of immunity, being
a derogation of sovereignty, will not be inferred lightly., but must
be construed in strictissimi juris. Moreover, the Proclamation is
not a legislative act. The consent of the State to be sued must
emanate from statutory authority. Waiver of State immunity
can only be made by an act of the legislative body.
There is no showing in the case at bar that the informacion
posesoria held by Feliciano had been converted into a record of
ownership. Such possessory information, therefore, remained
at best mere prima facie evidence of possession. Using this
possessory information, the respondent could have applied for
judicial confirmation of imperfect title under the Public Land Act,
which is an action in rem, but he failed to do so.
Court reversed the decision of IAC and affirmed the CA decision,
and dismissing the complaint filed by Feliciano against the
Republic.
-------------------------------------xxx---------------------------------
Ang, Bartolata, Bellosillo, Estanislao, Garcia, Improgo, Polero, Siriban

Waiver of Immunity; Consent to be sued
MUNICIPALITY OF SAN FERNANDO, LA UNION, vs.
HON. JUDGE ROMEO N. FIRME, JUANA RIMANDO-
BANIÑA, IAUREANO BANIÑA, JR., SOR MARIETA BANIÑA,
MONTANO BANIÑA, ORJA BANIÑA, AND LYDIA R.
BANIÑA,
G.R. No. L-52179
April 8, 1991
Medialdea, J.
FACTS: 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 Macario
Nieveras, 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 Laureano Baniña Sr. died as a result of the injuries
they sustained and four (4) others suffered varying degrees of
physical injuries. Due to the impact, several passengers of the
jeepney including Laureano Baniña Sr. died. The heirs of Baniña
filed a complaint for damages against the owner and driver of
the jeepney, who, in turn, filed a Third Party Complaint against
the Municipality and its dump truck driver, Alfredo Bislig.
Municipality filed its answer and raised the defense 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.
After trial, the court ruled in favor of the plaintiffs and ordered
Municipality and Bislig to pay jointly and severally the heirs of
Baniña.
ISSUES: Are municipal corporations suable?
Is the Municipality liable for the torts committed by its
employee who was then engaged in the discharge of
governmental functions?
HELD: No, Municipal corporations, 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. 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)
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. The doctrine of non-suability of the State is expressly
Page 31 of 48
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, the general rule is that the State may not be sued
except when it gives consent to be sued. 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 Political Law, 1987 Edition, p. 39)
In this case, 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." In the absence of any evidence to the contrary, the
regularity of the performance of official duty is presumed. Hence,
the driver of the dump truck was performing duties or tasks
pertaining to his office.
Decision of the lower court modified. Petitioner municipality was
absolved of any liability
-------------------------------------xxx--------------------------
A.2. SPECIAL LAW
WAIVER OF IMMUNITY; CONSENT TO BE SUED; SPECIAL
LAW
E. MERRITT v. GOVERNMENT OF THE PHILIPPINE
ISLANDS
G.R. No. L-11154 March 21, 1916
TRENT, J.:
FACTS
The case 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. Prior to this appeal, Plaintiff E. Meritt, a contractor, had a
collision with the General Hospital Ambulance which turned
suddenly and unexpectedly without having sounded any whistle
or horn. Merrit was severely injured. His condition had
undergone depreciation and his efficiency as a contractor was
affected. The plaintiff is seeking a certain amount for permanent
injuries and the loss of wages during he was incapacitated from
pursuing his occupation. In order for Merritt to recover damages,
he sought to sue the government which later authorized the
plaintiff to bring suit against the GPI and authorizing the
Attorney- General to appear in said suit.
On this appeal, Counsel for the plaintiff insists that the
trial court erred:
 “in limiting the general damages which the plaintiff
suffered to P5,000, instead of P25,000 as claimed in
the complaint,” and
Ang, Bartolata, Bellosillo, Estanislao, Garcia, Improgo, Polero, Siriban

 “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.”
On the other hand, the Attorney-General on behalf of the
defendant urges that the trial court erred:
 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, who is an
alleged agent or employee of the Government;
 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
 in rendering judgment against the defendant for the
sum of P14,741.
ISSUE
Whether or not the Government is legally liable to the
plaintiff by allowing a lawsuit to commence against it.
RULING
The waiver of immunity of the State does not mean
concession of its liability. When the State allows itself to be sued,
all it does in effect is to give the other party an opportunity to
prove, if it can, that the State is liable.
Art. 1903, Par. 5 of the Civil Code reads that “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 responsibility of the state is limited to that which it contracts
through a special agent, duly empowered by a definite order or
commission to perform some act or charged with some definite
purpose which gives rise to the claim.
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 pre-existing liability and submits itself to
the jurisdiction of the court, subject to its right to interpose any
lawful defense.
In the case at bar, the ambulance driver was not a
special agent nor was a government officer acting as a special
agent. Hence, there can be no liability from the government. As
stated by Justice Story of United States “The Government 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.” It is,
therefore, evidence that the Government of the Philippine
Islands is only liable for the acts of its agents, officers and
employees when they act as special agents within the meaning
of paragraph 5 of article 1903 and that the chauffeur of the
ambulance of the General Hospital was not such an agent.
DISPOSITVE PORTION
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.
Page 32 of 48
------------------------------xxx------------------------
GAUDENCIO RAYO et. Al petitioners, vs.
COURT OF FIRST INSTANCE OF BULACAN, BRANCH V,
STA. MARIA, and NATIONAL POWER
CORPORATION, respondents.
G.R. No. L-55273-83 December 19, 1981
TOPIC: Waiver of Immunity; Consent to be sued under
Special Law
ABAD SANTOS, J.:
FACTS
3. At about midnight on October 26, 1978, during the height of
that infamous typhoon "KADING" NAPOCOR, 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 millions 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.
These complaints though separately filed have a
common/similar cause of action. ...
5. NAPOCOR 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 "cannot
be sued without the express consent of the State." ...
6. On motion NAPOCOR 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
NAPOCOR is performing not governmental but
merely proprietary functions 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.
ISSUE/S
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.
SC RULING
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
Ang, Bartolata, Bellosillo, Estanislao, Garcia, Improgo, Polero, Siriban

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. 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.
DISPOSITIVE PORTION
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.
-------------------------------xxx----------------------------
B.1. STATE COMMENCES LITIGATION
FERNANDO A. FROILAN, vs. PAN ORIENTAL SHIPPING
CO., REPUBLIC OF THE PHILIPPINES
G.R. No. L-6060 September 30, 1954 PARAS, C.J Consent
to be sued; implied waiver
FACTS:
Plaintiff, Fernando Froilan filed a complaint against the
defendant-appellant, Pan Oriental Shipping Co., alleging that he
purchased from the Shipping Commission the vessel for
P200,000, paying P50,000 down and agreeing to pay the
balance in instalments. To secure the payment of the balance of
the purchase price, he executed a chattel mortgage of said
vessel in favor of the Shipping Commission. For various
reasons, among them the non-payment of the installments, the
Shipping Commission tool possession of said vessel and
considered the contract of sale cancelled. The Shipping
Commission chartered and delivered said vessel to the
defendant-appellant Pan Oriental Shipping Co. subject to the
approval of the President of the Philippines. Plaintiff appealed
the action of the Shipping Commission to the President of the
Philippines and, in its meeting the Cabinet restored him to all his
rights under his original contract with the Shipping Commission.
Plaintiff had repeatedly demanded from the Pan Oriental
Shipping Co. the possession of the vessel in question but the
latter refused to do so.
Plaintiff, prayed that, upon the approval of the bond
accompanying his complaint, a writ of replevin be issued for the
seizure of said vessel with all its equipment and appurtenances,
and that after hearing, he be adjudged to have the rightful
possession thereof . The lower court issued the writ of replevin
prayed for by Froilan and by virtue thereof the Pan Oriental
Shipping Co. was divested of its possession of said vessel.
Pan Oriental protested to this restoration of Plaintiff ‘s rights
under the contract of sale, for the reason that when the vessel
was delivered to it, the Shipping Administration had authority to
dispose of said authority to the property, Plaintiff having already
relinquished whatever rights he may have thereon. Plaintiff paid
the required cash of P10,000.00 and as Pan Oriental refused to
surrender possession of the vessel, he filed an action to recover
possession thereof and have him declared the rightful owner of
said property. The Republic of the Philippines was allowed to
intervene in said civil case praying for the possession of the in
order that the chattel mortgage constituted thereon may be
foreclosed.
Page 33 of 48
ISSUES:
Whether or not the RP of the Philippines is immune from suit.
HELD:
NO. Because by filing its complaint in intervention the
Government in effect waived its right of non-suability.
"The immunity of the state from the suits does not deprive it of
the right to sue private parties in its own courts. The state as
plaintiff may avail itself of the different forms of actions open to
private litigants. In short, by taking the initiative in an action
against a private party, the state surrenders its privileged
position and comes down to the level of the defendant. The latter
automatically acquires, within certain limits, the right to set up
whatever claims and other defense he might have against the
state. The United States Supreme Court thus explains:
No direct suit can be maintained against the United States. But
when an action is brought by the United States to recover money
in the hands of a party who has a legal claim against them, it
would be a very rigid principle to deny to him the right of setting
up such claim in a court of justice, and turn him around to an
application to Congress.'".
It is however, contended for the intervenor that, if there was at
all any waiver, it was in favor of the plaintiff against whom the
complainant in intervention was directed. This contention is
untenable. As already stated, the complaint in intervention was
in a sense in derogation of the defendant's claim over the
possession of the vessel in question.
-----------------------xxx--------------------------
B. STATE IMMUNITY/ROYAL PREROGATIVE BASIS;
RATIONALE
9. WAIVER OF IMMUNITY, CONSENT TO BE SUED
b. Implied Consent
UNITED STATES OF AMERICA, FREDERICK M. SMOUSE
AND YVONNE REEVES, 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,
G.R. No. 76607 February 26, 1990
CRUZ, J.
FACTS:
The private respondents are suing several officers of the U.S.
Air Force station in Clark Air Base in connection with the bidding
conducted by them for contracts for barbering services in the
said base. On February 24, 1986, The U.S. Air Force through its
Western Pacific Contracting Office in Okinawa Area Exchange
solicited bids through the contracting officer, James F. Shaw.
The Private respondents submitted their bids because they are
concessionaire inside the Clark air base for several years, but
the bidding was won by the defendant Ramon Dizon with
objection of the private respondents because the defendant
submitted bidding not mention in the solicitation. Petitioners
Yvonne Reeves and Frederic M. Smouse explained that bidding
is not awarded to Dizon but an extension of his present contract
until August 31, 1986. June 30, 1986 the private respondents
file a complaint to RTC to compel PHAX and the petitioners to
cancel the award to defendant Dizon and to conduct re-bidding
of the barbershop concession and to allow respondent to
continue operating pending on ligation by writ of preliminary
injunction. The respondent court issued an ex parte order
Ang, Bartolata, Bellosillo, Estanislao, Garcia, Improgo, Polero, Siriban

directing individual petitioner to maintain status quo. July 22,
1986 petitioner file motion to dismiss and opposition to the
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
officials/employees of the U.S. Air Force, were also immune
from suit.
LC RULING:
The Trial court denied the petitioners application for a writ of
preliminary injunction and motion to dismiss on the ground that
the contract is commercial in nature between the plaintiffs as
well as the defendants, Hence this petition.
ISSUE: Whether or not the defendants were immune from suit
under the RP-US Bases Treaty for acts done by them in the
performance of their official duties.
HELD:
NO. 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." 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 par in parem, non habet
imperium. 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."
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. 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.
Page 34 of 48
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."
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. 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. As for the filing of a complaint
by the government, suability will result only where the
government is claiming affirmative relief from the defendant
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.
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.
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.
Therefore, we 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.
Ang, Bartolata, Bellosillo, Estanislao, Garcia, Improgo, Polero, Siriban

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
are being decidedly commercial.
The evidence of the alleged irregularity in the grant of the
barbershop concessions is not before us. This means that 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.
WHEREFORE, after considering all the above premises, the
Court hereby renders judgment as follows:
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. Xxxxxxx All without any
pronouncement as to costs.
--------------------------xxx-------------------------
B.2. STATE ENTERS INTO A CONTRACT
TOPIC: State Enters into a Contract
G.R. No. L-35645 May 22, 1985
UNITED STATES OF AMERICA, CAPT. JAMES E.
GALLOWAY, WILLIAM I. COLLINS and ROBERT
GOHIER, petitioners,
vs.
HON. V. M. RUIZ, Presiding Judge of Branch XV, Court of
First Instance of Rizal and ELIGIO DE GUZMAN & CO.,
INC., respondents.
FACTS:
the United States of America had a naval base in Subic,
Zambales. The base was one of those provided in the Military
Bases Agreement between the Philippines and the United
States.
Sometime in May, 1972, the United States invited the
submission of bids for the following projects
1. Repair offender system, Alava Wharf at the U.S. Naval Station
Subic Bay, Philippines.
2. Repair typhoon damage to NAS Cubi shoreline; repair
typhoon damage to shoreline revetment, NAVBASE Subic; and
repair to Leyte Wharf approach, NAVBASE Subic Bay,
Philippines.
Eligio de Guzman & Co., Inc. responded to the invitation and
submitted bids. Subsequent thereto, the company received from
the United States two telegrams requesting it to confirm its price
proposals and for the name of its bonding company. The
company complied with the requests. [In its complaint, the
company alleges that the United States had accepted its bids
because "A request to confirm a price proposal confirms the
acceptance of a bid pursuant to defendant United States'
bidding practices." (Rollo, p. 30.) The truth of this allegation has
not been tested because the case has not reached the trial
stage.]
In June, 1972, the company received a letter which was signed
by Wilham I. Collins, Director, Contracts Division, Naval
Facilities Engineering Command, Southwest Pacific,
Department of the Navy of the United States, who is one of the
petitioners herein. The letter said that the company did not
qualify to receive an award for the projects because of its
previous unsatisfactory performance rating on a repair contract
for the sea wall at the boat landings of the U.S. Naval Station in
Subic Bay. The letter further said that the projects had been
awarded to third parties. In the abovementioned Civil Case No.
779-M, the company sued the United States of America and
Page 35 of 48
Messrs. James E. Galloway, William I. Collins and Robert
Gohier all members of the Engineering Command of the U.S.
Navy. The complaint is to order the defendants to allow the
plaintiff to perform the work on the projects and, in the event that
specific performance was no longer possible, to order the
defendants to pay damages. The company also asked for the
issuance of a writ of preliminary injunction to restrain the
defendants from entering into contracts with third parties for
work on the projects.
The defendants entered their special appearance for the
purpose only of questioning the jurisdiction of this court over the
subject matter of the complaint and the persons of defendants,
the subject matter of the complaint being acts and omissions of
the individual defendants as agents of defendant United States
of America, a foreign sovereign which has not given her consent
to this suit or any other suit for the causes of action asserted in
the complaint." (Rollo, p. 50.)
Subsequently the defendants filed a motion to dismiss the
complaint which included an opposition to the issuance of the
writ of preliminary injunction. The company opposed the motion.
The trial court denied the motion and issued the writ. The
defendants moved twice to reconsider but to no avail. Hence the
instant petition which seeks to restrain perpetually the
proceedings in Civil Case No. 779-M for lack of jurisdiction on
the part of the trial court.
Issue: Whether the US Government may enter into a Contract
with private company
Ruling: YES
The traditional rule of State 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 imperil
The restrictive application of State immunity is now the rule in
the United States, the United Kingdom and other states in
western Europe. (See Coquia and Defensor Santiago, Public
International Law, pp. 207-209 [1984].)
The respondent judge recognized the restrictive doctrine of
State immunity when he said in his Order denying the
defendants' (now petitioners) motion: " A distinction should be
made between a strictly governmental function of the sovereign
state from its private, proprietary or non- governmental acts
(Rollo, p. 20.) However, the respondent judge also said: "It is the
Court's considered opinion that entering into a contract for the
repair of wharves or shoreline is certainly not a governmental
function altho it may partake of a public nature or character. As
aptly pointed out by plaintiff's counsel in his reply citing the ruling
in the case of Lyons, Inc., [104 Phil. 594 (1958)], and which this
Court quotes with approval, viz.:
It is however contended that when a sovereign state enters into
a contract with a private person, the state can be sued upon the
theory that it has descended to the level of an individual from
which it can be implied that it has given its consent to be sued
under the contract. ...
xxx xxx xxx
We agree to the above contention, and considering that the
United States government, through its agency at Subic Bay,
entered into a contract with appellant for stevedoring and
miscellaneous labor services within the Subic Bay Area, a U.S.
Ang, Bartolata, Bellosillo, Estanislao, Garcia, Improgo, Polero, Siriban

Naval Reservation, it is evident that it can bring an action before
our courts for any contractual liability that that political entity may
assume under the contract. The trial court, therefore, has
jurisdiction to entertain this case ... (Rollo, pp. 20-21.)
The reliance placed on Lyons by the respondent judge is
misplaced for the following reasons:
In Harry Lyons, Inc. vs. The United States of America,
supra, plaintiff brought suit in the Court of First Instance of
Manila to collect several sums of money on account of a contract
between plaintiff and defendant. The defendant filed a motion to
dismiss on the ground that the court had no jurisdiction over
defendant and over the subject matter of the action. The court
granted the motion on the grounds that: (a) it had no jurisdiction
over the defendant who did not give its consent to the suit; and
(b) plaintiff failed to exhaust the administrative remedies
provided in the contract. The order of dismissal was elevated to
this Court for review.
In sustaining the action of the lower court, this Court said:
It appearing in the complaint that appellant has not complied
with the procedure laid down in Article XXI of the contract
regarding the prosecution of its claim against the United States
Government, or, stated differently, it has failed to first exhaust
its administrative remedies against said Government, the lower
court acted properly in dismissing this case.(At p. 598.)
It can thus be seen that the statement in respect of the waiver
of State immunity from suit was purely gratuitous and,
therefore, obiter so that it has no value as an imperative
authority.
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.
That the correct test for the application of State immunity is not
the conclusion of a contract by a State but the legal nature of the
act is shown in Syquia vs. Lopez, 84 Phil. 312 (1949). In that
case the plaintiffs leased three apartment buildings to the United
States of America for the use of its military officials. The plaintiffs
sued to recover possession of the premises on the ground that
the term of the leases had expired. They also asked for
increased rentals until the apartments shall have been vacated.
The defendants who were armed forces officers of the United
States moved to dismiss the suit for lack of jurisdiction in the part
of the court. The Municipal Court of Manila granted the motion
to dismiss; sustained by the Court of First Instance, the plaintiffs
went to this Court for review on certiorari. In denying the petition,
this Court said:
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 Land vs. Dollar already cited, and on
what we have already stated, the present action must be
considered as one against the U.S. Government. It is clear hat
Page 36 of 48
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 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 law
behind this rule are so elementary and of such general
acceptance that we deem it unnecessary to cite authorities in
support thereof. (At p. 323.)
In Syquia,the United States concluded contracts with private
individuals but the contracts notwithstanding the States was not
deemed to have given or waived its consent to be sued for the
reason that the contracts were for jure imperii and not for jure
gestionis.
WHEREFORE, the petition is granted; the questioned orders of
the respondent judge are set aside and Civil Case No. is
dismissed. Costs against the private respondent.
-------------------------xxx------------------------
TOPIC: Implied Consent: State Commences Litigation and
Claims Affirmative Relief
CASE TITLE: USA, et al. v Judge Guinto
G.R. No. 76607
DATE: February 26, 1990
PONENTE: Justice Cruz
FACTS: These are consolidated cases which involve the
doctrine of state immunity. The United States of America was
not impleaded in the case at bar but has moved to dismiss on
the ground that they are in effect suits against it to which it has
not consented.
1. USA vs GUINTO (GR No. 76607)
The private respondents are suing several officers of the US Air
Force in Clark Air Base in connection with the bidding conducted
by them for contracts for barber services in the said base, which
was won by Dizon. The respondents wanted to cancel the award
because they claimed that Dizon had included in his bid an area
not included in the invitation to bid, and also, to conduct a
rebidding.
2. USA vs RODRIGO (GR No. 79470)
Genove filed a complaint for damages for his dismissal as cook
in the US Air Force Recreation Center at Camp John Hay Air
Station. It had been ascertained after investigation that Genove
had poured urine into the soup stock used in cooking the
vegetables served to the club customers. The club manager
suspended him and thereafter referred the case to a board of
arbitrators, which unanimously found him guilty and
recommended his dismissal.
3. USA vs CEBALLOS (GR No. 80018)
Bautista, a barracks boy in Camp O’ Donnell, was arrested
following a buy-bust operation conducted by petitioners, who
were USAF officers and special agents of the Air Force Office.
An information was filed against Bautista and at the trial,
petitioners testified against him. As a result of the charge,
Bautista was dismissed from his employment. He then filed for
Ang, Bartolata, Bellosillo, Estanislao, Garcia, Improgo, Polero, Siriban

damages against petitioners claiming that it was because of the
latter’s acts that he lost his job.
4. USA vs VERGARA (GR No. 80258)
A complaint for damages was filed by private respondents
against petitioners (US military officers) for injuries allegedly
sustained by the former when defendants beat them up,
handcuffed them and unleashed dogs on them. The petitioners
deny this and claim that respondents were arrested for theft but
resisted arrest, thus incurring the injuries.
ISSUE: Whether or not the defendants were immune from suit
under the RP-US Bases Treaty.
RULING: The rule that a State may not be sued without its
consent is one of the generally accepted principles of
international law that were have adopted as part of the law of
our land. 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 the 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. All
states are sovereign equals and cannot assert jurisdiction over
one another. 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 states 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, the suit
must be regarded as against the state although it has not been
formally impleaded. 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.
It bears stressing at this point that the aforesaid principle do not
confer on the USA 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 USA, 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
(commercial acts/jure gestionis). It is only when the contract
involves its sovereign or governmental capacity (governmental
acts/jure imperii) that no such waiver may be implied.
In US vs GUINTO, the court finds the barbershops subject to the
concessions granted by the US government to be commercial
enterprises operated by private persons. The Court would have
directly resolved the claims against the defendants as in USA vs
RODRIGO, except for the paucity of the record as the evidence
of the alleged irregularity in the grant of the barbershop
concessions were not available. Accordingly, this case was
remanded to the court below for further proceedings.
In US vs RODRIGO, the restaurant services offered at the John
Hay Air Station partake of the nature of a business enterprise
undertaken by the US government in its proprietary capacity, as
they were operated for profit, as a commercial and not a
Page 37 of 48
governmental activity. Not even the US government can claim
such immunity because 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, the court still dismissed the complaint against
petitioners on the ground that there was nothing arbitrary about
the proceedings in the dismissal of Genove, as the petitioners
acted quite properly in terminating Genove’s employment for his
unbelievably nauseating act.
In US vs CEBALLOS, it was clear that the petitioners were
acting in the exercise of their official functions when they
conducted the buy-bust operation and thereafter testified
against the complainant. 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.
In US vs VERGARA, the contradictory factual allegations in this
case need a closer study of what actually happened. The record
was too meager to indicate if the defendants were really
discharging their official duties or had actually exceeded their
authority when the incident occurred. The needed inquiry must
first be made by the lower court so it may assess and resolve
the conflicting claims of the parties.
DISPOSITIVE PORTION: 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.
Principle/s used
 Doctrine of State Immunity
 Jure Gestionis – by right of economic or business
relations, may be sued. (US vs Guinto)
 Jure Imperii – by right of sovereign power, in the
exercise of sovereign functions. No implied consent.
(US v. Ruiz, 136 SCRA 487)
------------------------------xxx------------------------
REPUBLIC OF INDONESIA, HIS EXCELLENCY
AMBASSADOR SOERATIM, and MINISTER COUNSELLOR
AZHARI KASIM v. JAMES VINZON (Vinzon Trade and
Services)
G.R. No. 154705, 26 June 2003, J. Azcuna
PRINCIPLE: STATE ENTERS INTO A CONTRACT
Petitioner entered into a maintenance agreement in August
1995 with Vinzon. Said agreement stated that Vinzon shall, for
a consideration, maintain specified equipment at the Embassy
Main Building, and the Wisma Duta, the official residence of
petitioner. The equipment covered by an agreement for air
conditioning units, generator sets, electrical facilities, water
Ang, Bartolata, Bellosillo, Estanislao, Garcia, Improgo, Polero, Siriban

heaters, and water motor pumps. It is likewise stated therein
that the agreement shall be effective for a period of four years
and will renew itself automatically unless cancelled by either
party by giving days prior written notice from the date of expiry.
Prior the expiration of the agreement, they informed the
respondent that the renewal shall be at the discretion of the
incoming Chief of Administration (Kasim). When Kasim
assumed position, he allegedly found respondents work and
services unsatisfactory and not in compliance with the standards
of the agreement. The embassy terminated the agreement and
through an earlier verbal notice.
Vinzon claims that the termination is arbitrary and unlawful.
Hence he filed a complaint before the RTC. Petitioner filed a
motion to dismiss alleging that the Republic of Indonesia, as a
foreign sovereign state, has sovereign immunity from suit and
cannot be suit as a party defendant in the Philippines (per
Vienna Convention). Further, Vinzon added that the agreement
contains a provision that “any legal action arising out the
agreement shall be settled according to Philippines and by the
proper court of Makati.” Thus, an expressed waiver of the
petitioner’s immunity.
ISSUE: Whether or not the Republic of Indonesia has waived its
immunity upon entering into contract.
Petition is impressed with merit. International law is founded
largely upon the principles of reciprocity, comity, independence,
and equality of States which were adopted as part of the law of
our land under Art. II Sec. 2 of the 1987 Constitution. The rule
that a State may not be sued without its consent is a necessary
consequence of the principles of independence and equality of
States. The increasing need of sovereign States to enter into
purely commercial activities remotely connected with the
discharge of their government functions brought about a new
concept of sovereign immunity. This concept, the restrictive
theory, holds that the immunity of the sovereign is recognized
only to public acts or acts jure imperii, but not with regard to
private acts or act jure gestionis.
The mere entering into a contract by a foreign State with a
private party cannot be construed as the ultimate test of whether
or not it is an act jure imperii or jure gestionis. If the foreign State
is not engaged regularly in a business or commercial activity,
and in this case, it has not been shown to be so engaged, the
particular act or transaction must then be by its nature. If the act
is in pursuit of a sovereign activity, or an incident thereof, then it
is an act jure imperii.
Said provision in the contract shall not be construed as a waiver
of sovereign immunity from suit. The applicability of the
Philippine laws must be deemed to include Philippine laws in its
totality, including the principle recognizing sovereign immunity.
Submission by a foreign State to local jurisdiction must be clear
and unequivocal. It must given explicitly or by necessary
implication. The court find no waiver in this case. The State
may enter into contracts with private entities to maintain the
premises, furnishings, and equipoment of the embassy and the
living quarters of its agents and officials. It is therefore clear that
petitioner was acting in pursuit of a sovereign activity when it
entered into a contract with Vinzons for the upkeep and
Page 38 of 48
maintenance of equipment of the Indonesian embassy and the
official residence of the ambassador.
------------------------------xxx--------------------------
B.3. IMMUNITY NOT AN INSTRUMENT
Immunity is not an Instrument to perpetuate injustice on a
Citizen; Government violated own laws
ANGEL MINISTERIO and ASUNCION SADAYA, vs.
THE COURT OF FIRST INSTANCE OF CEBU, Fourth Branch,
Presided by the Honorable, Judge JOSE C. BORROMEO,
THE PUBLIC HIGHWAY COMMISSIONER, and THE
AUDITOR GENERAL
G.R. No. L-31635
August 31, 1971
FERNANDO, J.:
Facts: Petitioners as plaintiffs in a complaint filed with the Court
of First Instance of Cebu, dated April 13, 1966, sought the
payment of just compensation for a registered lot, containing an
area of 1045 square meters, alleging that in 1927 the National
Government through its authorized representatives took
physical and material possession of it and used it for the
widening of the Gorordo Avenue, a national road, Cebu City,
without paying just compensation and without any agreement for
public use, either written or verbal. There was an allegation of
repeated demands for the payment of its price or return of its
possession, but defendants Public Highway Commissioner and
the Auditor General refused to restore its possession. It was
further alleged that on August 25, 1965, the appraisal committee
of the City of Cebu approved Resolution No. 90, appraising the
reasonable and just price of Lot No. 647-B at P50.00 per square
meter or a total price of P52,250.00. Thereafter, the complaint
was amended on June 30, 1966 in the sense that the remedy
prayed for was in the alternative, either the restoration of
possession or the payment of the just compensation.
The lower court decision now under review was promulgated on
January 30, 1969. As is evident from the excerpt to be cited, the
plea that the suit was against the government without its consent
having been manifested met with a favorable response. Thus:
"It is uncontroverted that the land in question is used by the
National Government for road purposes. No evidence was
presented whether or not there was an agreement or contract
between the government and the original owner and whether
payment was paid or not to the original owner of the land. It may
be presumed that when the land was taken by the government
the payment of its value was made thereafter and no satisfactory
explanation was given why this case was filed only in 1966. But
granting that no compensation was given to the owner of the
land, the case is undoubtedly against the National Government
and there is no showing that the government has consented to
be sued in this case. It may be contended that the present case
is brought against the Public Highway Commissioner and the
Auditor General and not against the National Government.
Considering that the herein defendants are sued in their official
capacity the action is one against the National Government who
should have been made a party in this case, but, as stated
before, with its consent."2
Issue: Whether or not the officials are immune from suit?
1. The government is immune from suit without its consent. 3 Nor
is it indispensable that it be the party proceeded against. If it
appears that the action, would in fact hold it liable, the doctrine
calls for application. It follows then that even if the defendants
named were public officials, such a principle could still be an
effective bar. This is clearly so where a litigation would result
Ang, Bartolata, Bellosillo, Estanislao, Garcia, Improgo, Polero, Siriban

in a financial responsibility for the government, whether in
the disbursements of funds or loss of property. Under such
circumstances, the liability of the official sued is not personal.
The party that could be adversely affected is government.
Hence the defense of non-suability may be interposed.4
So it has been categorically set forth in Syquia v. Almeda
Lopez:5 "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."6
2. It is a different matter where the public official is made to
account in his capacity as such for acts contrary to law and
injurious to the rights of plaintiff. As was clearly set forth by
Justice Zaldivar in Director of the Bureau of
Telecommunications v. Aligean:7 "Inasmuch as the State
authorizes only legal acts by its officers, unauthorized acts of
government officials or officers are not acts of the State, and an
action against the officials or officers by one whose rights have
been invaded or violated by such acts, for the protection of his
rights, is not a suit against the State within the rule of immunity
of the State from suit. In the same tenor, it has been said that an
action at law or suit in equity against a State officer or the
director of a State department on the ground that, while claiming
to act for the State, he violates or invades the personal and
property rights of the plaintiff, under an unconstitutional act or
under an assumption of authority which he does not have, is not
a suit against the State within the constitutional provision that
the State may not be sued without its consent."8
3. It would follow then that the prayer in the amended complaint
of petitioners being in the alternative, the lower court, instead of
dismissing the same, could have passed upon the claim of
plaintiffs there, now petitioners, for the recovery of the
possession of the disputed lot, since no proceeding for eminent
domain, as required by the then Code of Civil Procedure, was
instituted.9 However, as noted in Alfonso v. Pasay City, 10 this
Court speaking through Justice Montemayor, restoration would
be "neither convenient nor feasible because it is now and has
been used for road purposes." 11 The only relief, in the opinion
of this Court, would be for the government "to make due
compensation, ..." 12 It was made clear in such decision that
compensation should have been made "as far back as the date
of the taking." Does it result, therefore, that petitioners would be
absolutely remediless since recovery of possession is in effect
barred by the above decision? If the constitutional mandate that
the owner be compensated for property taken for public
use 13 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." 14 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
Page 39 of 48
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. 15
Accordingly, the lower court decision is reversed so that the
court may proceed with the complaint and determine the
compensation to which petitioners are entitled, taking into
account the ruling in the above Alfonso case: "As to the value of
the property, although the plaintiff claims the present market
value thereof, the rule is that to determine due compensation for
lands appropriated by the Government, the basis should be the
price or value at the time that it was taken from the owner and
appropriated by the Government." 16
WHEREFORE, the lower court decision of January 30, 1969
dismissing the complaint is reversed and the case remanded to
the lower court for proceedings in accordance with law.
---------------------------xxx---------------------------
IMMUNITY NOT AN INSTRUMENT TO PERPETRATE AN
INJUSTICE ON A CITIZEN; GOVERNMENT VIOLATED OWN
LAWS
DALE SANDERS v. HON. REGINO T. VERIDIANO II
G.R. No. L-46930 June 10, 1988
CRUZ, J.:
FACTS
Petitioner Dale Sanders was the special services
director of the US Naval Station (NAVSTA) in Olongapo City.
Private respondents, Anthony Rossi and Ralph Wyers, are
American citizens permanently residing in the Philippines and
were employed as game room attendants in the special services
department of NAVSTA.
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. 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."
In a letter addressed to petitioner Moreau on May 17,
1976, 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
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.
Ang, Bartolata, Bellosillo, Estanislao, Garcia, Improgo, Polero, Siriban

The private respondent filed in the Court of First
Instance of Olongapo City a for damages against the herein
petitioners. 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, and that the petitioners were being sued in
their private or personal capacity.
ISSUE
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.
RULING
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.
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. Moreover, even in the absence of such request,
he still was within his rights in reacting to the hearing officer's
criticism—in 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.
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
Page 40 of 48
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. 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.
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. In the case of
foreign states, the rule is derived from the principle of the
sovereign equality of states which wisely admonishes that par in
parem non habet imperium and that a contrary attitude would
"unduly vex the peace of nations." 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.
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 private respondents must, if they are still
so minded, 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.
DISPOSITIVE PORTION
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.
---------------------------------xxx-------------------------------
10. SUABILITY v. LIABILITY
E. MERRITT, plaintiff-appellant, vs.
GOVERNMENT OF THE PHILIPPINE ISLANDS, defendant-
appellant.
G.R. No. L-11154 March 21, 1916
TOPIC: SUABILITY v. LIABILITY
TRENT, J.:
FACTS
It is a fact not disputed by counsel for the Government
(defendant) that when the Merritt (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
Ang, Bartolata, Bellosillo, Estanislao, Garcia, Improgo, Polero, Siriban

Merritt, who was already six feet from the southwestern point or
from the post place there.
By reason of the resulting collision, the Merritt 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
wound 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 wound 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 dissolve 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.
We, therefore, find that the amount of damages sustained by the
plaintiff, without any fault on his part, is P18,075.
ISSUE
Whether the Government is legally-liable for the damages
resulting from the negligence of its agent or employee which
caused the collision.
SC RULING
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
Page 41 of 48
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,
By authority of the United States, be it enacted by the Philippine
Legislature, 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."
Ang, Bartolata, Bellosillo, Estanislao, Garcia, Improgo, Polero, Siriban

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 Apfelbacher vs. State, 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.
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
Page 42 of 48
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 and
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.
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 by an executive official,
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 through a special agent(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."
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 definite order or commission to perform
some act or charged with some definite purpose which gives rise
Ang, Bartolata, Bellosillo, Estanislao, Garcia, Improgo, Polero, Siriban

to the claim, 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.
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.
DISPOSITIVE PORTION
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.
-------------------------------xxx----------------------------
SPOUSES JOSE FONTANILLA AND VIRGINIA FONTANILLA
vs. HONORABLE INOCENCIO D. MALIAMAN and
NATIONAL IRRIGATION ADMINISTRATION
NATIONAL IRRIGATION ADMINISTRATION vs. SPOUSES
JOSE FONTANILLA and VIRGINIA FONTANILLA
G.R. No. L-55963 December 1, 1989. G.R. No. L-61045
December 1, 1989. PARAS, J. SUABILITY v
LIABILITY
FACTS
It appears that on August 21, 1976 at about 6:30 P.M., a pickup
owned and operated by respondent National Irrigation
Administration, a government agency bearing Plate No. IN-651,
then driven officially by Hugo Garcia, an employee of said
agency as its regular driver, bumped a bicycle ridden by
Francisco Fontanilla, son of herein petitioners, and Restituto
Deligo, at Maasin, San Jose City along the Maharlika Highway.
As a result of the impact, Francisco Fontanilla and Restituto
Deligo were injured and brought to the San Jose City
Emergency Hospital for treatment. Fontanilla was later
transferred to the Cabanatuan Provincial Hospital where he
died.
Garcia was then a regular driver of respondent National
Irrigation Administration who, at the time of the accident, was a
licensed professional driver and who qualified for employment
as such regular driver of respondent after having passed the
written and oral examinations on traffic rules and maintenance
of vehicles given by National Irrigation Administration
authorities.
The parents of Francisco filed a suit for damages against Garcia
and the NIA, as Garcia's employer. After trial, the court awarded
actual, moral and exemplary damages to Spouses Fontanilla.
NIA appealed. The Solicitor General contends that the NIA does
not perform solely and primarily proprietary functions but is an
agency of the government tasked with governmental functions,
and is therefore not liable for the tortious act of its driver Hugo
Garcia, who was not its special agent.
Page 43 of 48
ISSUE: May NIA, a government agency, be held liable for the
damages caused by the negligent act of its driver who was not
its special agent?
HELD: YES
Art. 2176 thus provides:
Whoever by act omission causes damage to another, there
being fault or negligence, is obliged to pay for damage done.
Such fault or negligence, if there is no pre-existing contractual
relation between the parties, is called a quasi-delict and is
governed by the provisions of this Chapter
Paragraphs 5 and 6 of Art. 21 80 read as follows:
Employers shall be liable for the damages caused by their
employees and household helpers acting within the scope of
their assigned tasks, even the though the former are not
engaged in any business or industry.
The State is responsible in like manner when it acts through a
special agent.; but not when the damage has been caused by
the official to whom the task done properly pertains, in which
case what is provided in Art. 2176 shall be applicable.
The liability of the State has two aspects. namely:
1. Its public or governmental aspects where it is liable for
the tortious acts of special agents only.
2. Its private or business aspects (as when it engages in
private enterprises) where it becomes liable as an ordinary
employer.
In this jurisdiction, the State assumes a limited liability for the
damage caused by the tortious acts or conduct of its special
agent.
Under the aforequoted paragrah 6 of Art. 2180, the State has
voluntarily assumed liability for acts done through special
agents. The State's agent, if a public official, must not only be
specially commissioned to do a particular task but that such task
must be foreign to said official's usual governmental functions.
If the State's agent is not a public official, and is commissioned
to perform non-governmental functions, then the State assumes
the role of an ordinary employer and will be held liable as such
for its agent's tort. Where the government commissions a private
individual for a special governmental task, it is acting through a
special agent within the meaning of the provision.
Certain functions and activities, which can be performed only by
the government, are more or less generally agreed to be
"governmental" in character, and so the State is immune from
tort liability. On the other hand, a service which might as well be
provided by a private corporation, and particularly when it
collects revenues from it, the function is considered a
"proprietary" one, as to which there may be liability for the torts
of agents within the scope of their employment.
The National Irrigation Administration is an agency of the
government exercising proprietary functions, by express
provision of Rep. Act No. 3601. Section 1 of said Act provides:
Section 1. Name and domicile.-A body corporate is hereby
created which shall be known as the National Irrigation
Administration, hereinafter called the NIA for short, which shall
Ang, Bartolata, Bellosillo, Estanislao, Garcia, Improgo, Polero, Siriban

be organized immediately after the approval of this Act. It shall
have its principal seat of business in the City of Manila and shall
have representatives in all provinces for the proper conduct of
its business.
Section 2 of said law spells out some of the NIA's proprietary
functions. Thus-
Sec. 2. Powers and objectives.-The NIA shall have the
following powers and objectives:
(c) To collect from the users of each irrigation system
constructed by it such fees as may be necessary to finance the
continuous operation of the system and reimburse within a
certain period not less than twenty-five years cost of
construction thereof; and
(d) To do all such other things and to transact all such
business as are directly or indirectly necessary, incidental or
conducive to the attainment of the above objectives.
Indubitably, the NIA is a government corporation with juridical
personality and not a mere agency of the government. Since it
is a corporate body performing non-governmental functions, it
now becomes liable for the damage caused by the accident
resulting from the tortious act of its driver-employee. In this
particular case, the NIA assumes the responsibility of an
ordinary employer and as such, it becomes answerable for
damages.
This assumption of liability, however, is predicated upon the
existence of negligence on the part of respondent NIA. The
negligence referred to here is the negligence of supervision.
At this juncture, the matter of due diligence on the part of
respondent NIA becomes a crucial issue in determining its
liability since it has been established that respondent is a
government agency performing proprietary functions and as
such, it assumes the posture of an ordinary employer which,
under Par. 5 of Art. 2180, is responsible for the damages caused
by its employees provided that it has failed to observe or
exercise due diligence in the selection and supervision of the
driver.
It will be noted from the assailed decision of the trial court that
"as a result of the impact, Francisco Fontanilla was thrown to a
distance 50 meters away from the point of impact while Restituto
Deligo was thrown a little bit further away. The impact took place
almost at the edge of the cemented portion of the road."
The lower court further declared that "a speeding vehicle coming
in contact with a person causes force and impact upon the
vehicle that anyone in the vehicle cannot fail to notice. As a
matter of fact, the impact was so strong as shown by the fact
that the vehicle suffered dents on the right side of the radiator
guard, the hood, the fender and a crack on the radiator as shown
by the investigation report.
It should be emphasized that the accident happened along the
Maharlika National Road within the city limits of San Jose City,
an urban area. Considering the fact that the victim was thrown
50 meters away from the point of impact, there is a strong
indication that driver Garcia was driving at a high speed. This is
confirmed by the fact that the pick-up suffered substantial and
Page 44 of 48
heavy damage as above-described and the fact that the NIA
group was then "in a hurry to reach the campsite as early as
possible", as shown by their not stopping to find out what they
bumped as would have been their normal and initial reaction.
Evidently, there was negligence in the supervision of the driver
for the reason that they were travelling at a high speed within
the city limits and yet the supervisor of the group, Ely Salonga,
failed to caution and make the driver observe the proper and
allowed speed limit within the city. Under the situation, such
negligence is further aggravated by their desire to reach their
destination without even checking whether or not the vehicle
suffered damage from the object it bumped, thus showing
imprudence and reckelessness on the part of both the driver and
the supervisor in the group.
Significantly, this Court has ruled that even if the employer can
prove the diligence in the selection and supervision (the latter
aspect has not been established herein) of the employee, still if
he ratifies the wrongful acts, or take no step to avert further
damage, the employer would still be liable.
-----------------------------------xxx-----------------------------
11. CONSENT DOES NOT INCLUDE EXECUTION
B. STATE IMMUNITY/ROYAL PREROGATIVE BASIS;
RATIONALE
REPUBLIC OF THE PHILIPPINES, 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.
G.R. No. L-30671 November 28, 1973
FERNANDO, J.
FACTS: A decision was rendered in Special Proceedings in
favor of respondents P. J. Kiener Co., Ltd., Gavino Unchuan,
and International Construction Corporation, and against the
Republic of the Philippines herein, confirming the arbitration
award in the amount of P1,712,396.40, subject of Special
Proceedings.
Honorable Guillermo P. Villasor then issued an Order declaring
the aforestated decision final and executory, directing the
Sheriffs to execute the said decision.
Pursuant to the said Order, the corresponding Alias Writ of
Execution was issued. The Provincial Sheriff of Rizal
(respondent herein) served notices of garnishment with several
Banks, especially 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" including Philippine
Veterans Bank.
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 by the AFP Controller".
Thus, the Republic of the Philippines in this certiorari and
prohibition proceeding challenges the validity of an order issued
by respondent Judge Guillermo P. Villasor, declaring a decision
final and executory and of an alias writ of execution directed
against the funds of the Armed Forces of the Philippines
Ang, Bartolata, Bellosillo, Estanislao, Garcia, Improgo, Polero, Siriban

subsequently issued in pursuance thereof, the alleged ground
being excess of jurisdiction, or at the very least, grave abuse of
discretion.
ISSUE: Whether or not the Writ of Execution Issued by Judge
Villasor is valid.
HELD: NO, 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, Providence
Washington Insurance Co. v. Republic of the Philippines, 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."
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".
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 Commissioner of Public Highways v.
San Diego, 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."
Such a principle applies even to an attempted garnishment of a
salary that had accrued in favor of an employee.
Director of Commerce and Industry v. Concepcion, 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
Page 45 of 48
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."
In the light of the above, it is made abundantly clear why the
Republic of the Philippines could rightfully allege a legitimate
grievance.
DISPOSITIVE PORTION: 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.
---------------------------------xxx---------------------------------
TOPIC: Consent does not include execution
MUNICIPALITY OF MAKATI, petitioner,
vs.
THE HONORABLE COURT OF APPEALS, HON. SALVADOR
P. DE GUZMAN, JR., as Judge RTC of Makati, Branch CXLII
ADMIRAL FINANCE CREDITORS CONSORTIUM, INC., and
SHERIFF SILVINO R. PASTRANA, respondents.FACTS:
Facts: Petitioner Municipality of Makati expropriated a portion of
land owned by private respondents, Admiral Finance Creditors
Consortium, Inc. After proceedings, the RTC of Makati
determined the cost of the said land which the petitioner must
pay to the private respondents amounting to P5,291,666.00
minus the advanced payment of P338,160.00. It issued the
corresponding writ of execution accompanied with a writ of
garnishment of funds of the petitioner which was deposited in
PNB. However, such order was opposed by petitioner through a
motion for reconsideration, contending that its funds at the PNB
could neither be garnished nor levied upon execution, for to do
so would result in the disbursement of public funds without the
proper appropriation required under the law, citing the case of
Republic of the Philippines v. Palacio.The RTC dismissed such
motion, which was appealed to the Court of Appeals; the latter
affirmed said dismissal and petitioner now filed this petition for
review.
Issue: Whether or not funds of the Municipality of Makati are
exempt from garnishment and levy upon execution.
Held: It is petitioner's main contention that the orders of
respondent RTC judge involved the net amount of
P4,965,506.45, wherein the funds garnished by respondent
sheriff are in excess of P99,743.94, which are public fund and
thereby are exempted from execution without the proper
appropriation required under the law. There is merit in this
contention. In this jurisdiction, well-settled is the rule that public
funds are not subject to levy and execution, unless otherwise
provided for by statute. Municipal revenues derived from taxes,
licenses and market fees, and which are intended primarily and
exclusively for the purpose of financing the governmental
activities and functions of the municipality, are exempt from
execution. Absent a showing that the municipal council of Makati
has passed an ordinance appropriating the said amount from its
public funds deposited in their PNB account, no levy under
execution may be validly effected. However, this court orders
petitioner to pay for the said land which has been in their use
already. This Court will not condone petitioner's blatant refusal
to settle its legal obligation arising from expropriation of land
Ang, Bartolata, Bellosillo, Estanislao, Garcia, Improgo, Polero, Siriban

they are already enjoying. The State's power of eminent domain
should be exercised within the bounds of fair play and justice.
WHEREFORE, the Court Resolved to ORDER petitioner
Municipality of Makati to immediately pay Philippine Savings
Bank, Inc. and private respondent the amount of P4,953,506.45.
Petitioner is hereby required to submit to this Court a report of
its compliance with the foregoing order within a non-extendible
period of SIXTY (60) DAYS from the date of receipt of this
resolution.
The order of respondent RTC judge dated December 21, 1988,
which was rendered in Civil Case No. 13699, is SET ASIDE and
the temporary restraining order issued by the Court on
November 20, 1989 is MADE PERMANENT.
SO ORDERED.
-------------------------------xxx-----------------------------
TOPIC: Consent does not include execution
CASE TITLE: NATIONAL HOUSING AUTHORITY, petitioner,
vs. HEIRS OF ISIDRO GUIVELONDO, COURT OF APPEALS,
HON. ISAIAS DICDICAN, Presiding Judge, Regional Trial
Court, Branch 11, Cebu City, and PASCUAL Y. ABORDO,
Sheriff, Regional Trial Court, Branch 11, Cebu City,
respondents.
G.R. No. 154411.
DATE: June 19, 2003
PONENTE: Justice Ynares-Santiago
FACTS: On February 23, 1999, petitioner NHA filed with the
RTC of Cebu City an Amended Complaint for eminent domain
against Associacion Benevola de Cebu, Engracia Urot and the
Heirs of Isidro Guivelondo. NHA alleged that defendant
Associacion Benevola de Cebu was the claimant/owner of Lot
108-C located in the Banilad Estate, Cebu City; that defendant
Engracia Urot was the claimant/owner of Lots Nos. 108-F, 108-
I, 108-G, 6019-A and 6013-A, all of the Banilad Estate; that
defendant Heirs of Isidro Guivelondo were the claimants/owners
of Cadastral Lot No. 1613-D located at Carreta, Mabolo, Cebu
City; and that the lands are within a blighted urban center which
petitioner intends to develop as a socialized housing project.
On November 12, 1999, the Heirs of Isidro Guivelondo,
respondents herein, filed a Manifestation stating that they were
waiving their objections to NHA’s power to expropriate their
properties. Hence, RTC declared that NHA has a lawful right to
expropriate the properties of the defendants who are heirs of
Isidro Guivelondo.
Thereafter, the RTC appointed 3 Commissioners who
ascertained that the just compensation of the said properties be
fixed at P11,200.00 per square meter. On August 7, 2000, RTC
rendered Partial Judgment adopting the recommendation of the
Commissioners and fixing the just compensation of the lands of
respondent Heirs of Isidro Guivelondo at P11,200.00 per square
meter
Petitioner NHA filed two motions for reconsideration assailing
the inclusion of Lots 12, 13 and 19 as well as the amount of just
compensation, respectively. Respondent Heirs also filed a
motion for reconsideration of the Partial Judgment. On October
11, 2000, RTC issued an Omnibus Order denying the motions
on the ground that the fixing of the just compensation had
adequate basis and support.
NHA filed with the Court of Appeals a petition for certiorari.
Meanwhile, the RTC issued an Entry of Judgment over the
Partial Judgment and Omnibus Order. Subsequently,
respondent Heirs filed a Motion for Execution, which was
Page 46 of 48
granted. Eventually, the Court of Appeals dismissed the petition
for certiorari on the ground that the Partial Judgment and
Omnibus Order became final and executory when petitioner
failed to appeal the same. NHA’s MR and Urgent Ex-Parte
Motion for a Clarificatory Ruling were denied. A petition for
review was filed by NHA with this Court but the same was denied
in a Minute Resolution for failure to show that the Court of
Appeals committed a reversible error. NHA filed a MR thereto
which was again denied with finality.
Prior to the aforesaid denial of the MR, NHA filed with the RTC
a Motion to Dismiss the complaint for eminent domain, alleging
that the implementation of its socialized housing project was
rendered impossible by the unconscionable value of the land
sought to be expropriated, which the intended beneficiaries
cannot afford. The Motion was denied on the ground that the
Partial Judgment had already become final and executory and
there was no just and equitable reason to warrant the dismissal
of the case. NHA filed a MR which was denied thus it filed a
petition for certiorari with the Court of Appeals but the CA
summarily dismissed the petition.
Immediately thereafter, respondent Sheriff of the RTC of Cebu,
served on NHA a Notice of Levy pursuant to the Writ of
Execution issued by the RTC to enforce the Partial Judgment
and the Omnibus Order. On February 18, 2002, the Court of
Appeals set aside the dismissal of the petition and reinstated the
same. Thereafter, a TRO was issued enjoining respondent
Sheriff to preserve the status quo. On May 27, 2002, respondent
Sheriff served on the Landbank of the Philippines a Notice of
Third Garnishment against the deposits, moneys and interests
of petitioner therein. Subsequently, respondent Sheriff levied on
funds and personal properties of petitioner.
On July 16, 2002, the Court of Appeals rendered the assailed
decision dismissing the petition for certiorari. Hence, NHA filed
this petition for review.
ISSUE: Whether consent to be sued includes execution.
RULING: AS EARLIER UPHELD BY THE HONORABLE
COURT, THE JUDGMENT OF THE TRIAL COURT IS
ALREADY FINAL AND EXECUTORY, HENCE, COULD NO
LONGER BE DISTURBED NOR SET ASIDE
It is arbitrary and capricious for a government agency to initiate
expropriation proceedings, seize a person’s property, allow the
judgment of the court to become final and executory and then
refuse to pay on the ground that there are no appropriations for
the property earlier taken and profitably used. The SC
condemns in the strongest possible terms the cavalier attitude
of government officials who adopt such a despotic and
irresponsible stance.
In order to resolve the issue of the propriety of the garnishment
against NHA’s funds and personal properties, there is a need to
first determine its true character as a government
entity. Generally, funds and properties of the government
cannot be the object of garnishment proceedings even if the
consent to be sued had been previously granted and the state
liability adjudged.
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 claimants 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
Ang, Bartolata, Bellosillo, Estanislao, Garcia, Improgo, Polero, Siriban

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.
However, if the funds belong to a public corporation or a
government-owned or controlled corporation which is clothed
with a personality of its own, separate and distinct from that of
the government, then its funds are not exempt from
garnishment. This is so because when the government enters
into commercial business, it abandons its sovereign capacity
and is to be treated like any other corporation.
In the case of petitioner NHA, the matter of whether its funds
and properties are exempt from garnishment has already been
resolved squarely against its predecessor, the Peoples
Homesite and Housing Corporation (PHHC), to wit:The plea for
setting aside the notice of garnishment was premised on the
funds of the Peoples Homesite and Housing Corporation
deposited with petitioner being public in character. There was
not even a categorical assertion to that effect. It is only the
possibility of its being public in character.The tone was thus
irresolute, the approach diffident. The premise that the funds
cold be spoken of as public in character may be accepted in the
sense that the Peoples Homesite and Housing Corporation was
a government-owned entity. It does not follow though that they
were exempt from garnishment.
This was reiterated in the subsequent case of Philippine Rock
Industries, Inc. v. Board of Liquidators: Having a juridical
personality separate and distinct from the government, the funds
of such government-owned and controlled corporations and
non-corporate agency, although considered public in
character, are not exempt from garnishment. This doctrine
was applied to suits filed against the Philippine Virginia Tobacco
Administration (PNB vs. Pabalan, et al., 83 SCRA 695); the
National Shipyard & Steel Corporation (NASSCO vs. CIR, 118
Phil. 782); the Manila Hotel Company (Manila Hotel Employees
Asso. vs. Manila Hotel Co., 73 Phil. 374); and the People's
Homesite and Housing Corporation (PNB vs. CIR, 81 SCRA
314). [emphasis ours]
Hence, it is clear that the funds of petitioner NHA are not exempt
from garnishment or execution. NHA’s prayer for injunctive relief
to restrain respondent Sheriff from enforcing the Notice of Levy
and Garnishment against its funds and properties must,
therefore, be denied.
DISPOSITIVE PORTION: WHEREFORE, in view of the
foregoing, the instant petition for review is DENIED. The
decision of the Court of Appeals in CA-G.R. SP No. 68670,
affirming the trial courts Order denying petitioners Motion to
Dismiss the expropriation proceedings in Civil Case No. CEB-
23386, is AFFIRMED. Petitioners prayer for injunctive relief
against the levy and garnishment of its funds and personal
properties is DENIED. The Temporary Restraining Order dated
January 22, 2003 is LIFTED.
------------------------------------xxx--------------------------------
UNIVERSITY OF THE PHILIPPINES, JOSE ABUEVA, RAUL
DE GUZMAN, RUBEN ASPIRAS, EMMANUEL BELLO,
WILFREDO ABRIGO and JOSEFINA LICUANAN v. HON.
AGUSTIN DIZON, Judge of RTC QC, STERN BUILDERS
INC., and SERVILLANO DELA CRUZ
G.R. No. 171182, 23 August 2012, J. Bersamin
PRINCIPLE: CONSENT DOES NOT INCLUDE EXECUTION
On 30 August 1990, UP entered into a General Construction
Agreement with respondent Stern, for the construction of the
extension building and the renovation of the College of Arts and
Page 47 of 48
Sciences in UPLB. In the course of implementation, Stern
submitted three progress billings corresponding to the work
accomplished, but the UP paid only two of the billings. The third
billing amounting to Php 273,729.47 was not paid due to its
disallowance by COA. Despite the lifting of disallowance, UP
failed to pay the billing, prompting Stern to sue the UP to collect
the unpaid billing and to recover various damages.
RTC rendered in favor of Stern and issued a writ of execution.
UP moved to quash the execution but failed. Thereafter, after
appealing to the CA, the CA dismissed the petition as it was filed
out of time. Simultaneously, Stern filed in the RTC motions for
execution despite that it was already previously issued, but the
RTC granted the same and issued another motion for execution.
Thereafter, the sheriff served notices of garnishment on the UP
depository banks (LBP and DBP), and was then released.
Matters arising during the pendency of the petition: RTC denied
Stern motion to withdraw the deposit in consideration of the UPs
intention to appeal to the CA, subject to the final outcome of the
case. However, the UP filed an urgent application for TRO
and/or a writ of preliminary injunction, averring that on 3 January
2007, Judge Yadao (replaced Dizon upon latter’s appointment
to CA), had issued another order allowing Stern to withdraw the
deposit.
ISSUE: Whether or not the garnishment as ordered by the RTC
is proper.
UPs funds, being government funds, are not subject to
garnishment. UP is a government instrumentality, performing
State’s constitutional mandate of promoting quality and
accessible education. All the funds going into the possession of
the UP, including any interest accruing from the deposit of
special trust fund, the disbursement of which should always be
aligned with the UPs mission and purpose and should always
be subject to auditing by the COA.
The funds of the UP are government funds that are public in
character. They include the income accruing from the use of
real property cede to the UP that may be spent only for the
attainment of its institutional objectives. Hence ,the funds
subject of this action could not be validly made the subject of the
RTC writ of execution or garnishment. The adverse judgment
rendered against UP in a suit to which it had impliedly consented
was not immediately enforceable by execution against UP,
because suability of the State did not necessarily means its
liability.
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 circumstances 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 UP correctly submits here that the garnishment of its funds
to satisfy the judgment awards of actual and moral damages
was not validly made if there was no special appropriate by
Ang, Bartolata, Bellosillo, Estanislao, Garcia, Improgo, Polero, Siriban
 Page 48 of 48

Congress to cover the liability. It was therefore, legally

unwarranted for the CA to agree with the RTC holding in the
order that not appropriation by Congress to allocate and set
aside the payment of the judgment awards was necessary
because there were already an appropriations earmarked for the
said project. The CA and RTC unjustifiably ignored the legal
restriction imposed on the trust funds of the government and its
agencies and instrumentalities to be used exclusively to fulfill the
purposes for which the trusts were created or for which the funds
were received except upon express authorization by Congress
or by the head of a government agency in control of the funds,
and subject to pertinent budgetary laws, rules and regulations.

Indeed, an appropriation by Congress was required before the

judgment that rendered the UP liable for moral and actual
damages would be satisfied considering the such monetary
liabilities were not covered by the appropriations earmarked for
the said project. The constitution strictly mandated that no
money shall be paid out of the treasury except in pursuance of
an appropriation.

Trial judges should not immediately issue writs of execution or

garnishment against the Government or any of its subdivision,
agencies, and instrumentalities to enforce money judgments.
They should bear in mind that the primary jurisdiction to
examine, audit and settle all claims of any sort due from the
government or any of its subdivision, agencies and
instrumentalities pertains to the COA (PD 1445).

SC grants the petition.

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Ang, Bartolata, Bellosillo, Estanislao, Garcia, Improgo, Polero, Siriban