Washington Insurance Co. v. Republic of The Philippines Is "The Most

St.
Marys College of Tagum College of Law Political Law

Article XVI of the 1987 Constitution
General Provisions
Section 3. The State Ma !ot "e Sue# $ithout Its Consent
The immunity of the State from suit, known also as the doctrine of
sovereign immunity or nonsua!ility of the State, is e"#ressly
#rovided in $rticle %&' of the ()*+ Constitution,viz,
Section -. The State may not !e sued without its consent.
The immunity from suit is !ased on the #olitical truism that the
State, as a sovereign, can do no wrong. Moreover, as the eminent
.ustice /olmes said in Kawananakoa v. Polyblank:

The territory 0of /awaii1, of course, could waive its
e"em#tion 2Smith v. 3eeves, (+* 4S5-6, 55 L ed ((57, 87
Su#. Ct. 3e#. )()9, and it took no o!:ection to the
#roceedings in the cases cited if it could have done so. """
;ut in the case at !ar it did o!:ect, and the <uestion raised is
whether the #lainti=s were !ound to yield. Some dou!ts
have !een e"#ressed as to the source of the immunity of a
sovereign #ower from suit without its own #ermission, !ut
the answer has !een #u!lic #ro#erty since !efore the days of
/o!!es.Leviathan, cha#. 86, 8. A soverei%n is e&e'(t
fro' suit) not *ecause of an for'al conce(tion or
o*solete theor) *ut on the lo%ical an# (ractical
%roun# that there can *e no le%al ri%ht as a%ainst the
authorit that 'a+es the la, on ,hich the ri%ht
#e(en#s. >Car on peut bien recevoir loy dautruy, mais il
est impossible par nature de se donner loy.?
;odin, Republiue, (, cha#. *, ed. (68), #. (-8@ Sir .ohn
Aliot, !e "ure #aiestatis, cha#. -. $emo suo statuto li%atur
necessitative. ;aldus, !e Le%. et Const. !i%na &o', 8. ed.
(5)6, fol. B(!, ed. (B-), fol. 6(.

Practical considerations dictate the esta!lishment of an immunity
from suit in favor of the State. Ctherwise, and the State is sua!le at
the instance of every other individual, government service may !e
severely o!structed and #u!lic safety endangered !ecause of the
num!er of suits that the State has to defend against. Several
:ustiDcations have !een o=ered to su##ort the ado#tion of the
doctrine in the Phili##ines, !ut that o=ered in Providence
(ashin%ton )nsurance Co. v. Republic o* the Philippines is >the most
acce#ta!le e"#lanation,? according to Eather ;ernas, a recogniFed
commentator on Constitutional Law, to wit,
0$1 continued adherence to the doctrine of nonsua!ility is
not to !e de#lored for as against the inconvenience that may
!e caused #rivate #arties, the loss of governmental
eGciency and the o!stacle to the #erformance of its
multifarious functions are far greater if such a fundamental
#rinci#le were a!andoned and the availa!ility of :udicial
remedy were not thus restricted. Hith the wellknown
#ro#ensity on the #art of our #eo#le to go to court, at the
least #rovocation, the loss of time and energy re<uired to
defend against law suits, in the a!sence of such a !asic
#rinci#le that constitutes such an e=ective o!stacle, could
very well !e imagined.
$n unincor#orated government agency without any se#arate
:uridical #ersonality of its own en:oys immunity from suit
!ecause it is invested with an inherent #ower of sovereignty.
$ccordingly, a claim for damages against the agency cannot
#ros#er@ otherwise, the doctrine of sovereign immunity is
violated. /owever, the need to distinguish !etween an
unincor#orated government agency #erforming
governmental function and one #erforming #ro#rietary
functions has arisen. The immunity has !een u#held in favor
of the former !ecause its function is governmental or
incidental to such function@ it has not !een u#held in favor of
the latter whose function was not in #ursuit of a necessary
function of government !ut was essentially a !usiness.
Should the doctrine of sovereignty immunity or nonsua!ility of the
State !e e"tended to the $TCI
'n its challenged decision, the C$ answered in the negative, holding,
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St. Marys College of Tagum College of Law Political Law
Cn the Drst assignment of error, a##ellants seek to im#ress u#on 4s
that the su!:ect contract of sale #artook of a governmental
character. +propos, the lower court erred in a##lying the /igh
Courts ruling in $ational +irports Corporation vs. ,eodoro 2-. Phil.
/01 0.-2/19, arguing that in ,eodoro, the matter involved the
collection of landing and #arking fees which is a #ro#rietary
function, while the case at !ar involves the maintenance and
o#eration of aircraft and air navigational facilities and services
which are governmental functions.
He are not #ersuaded.
Contrary to a##ellants conclusions, it was not merely the collection
of landing and #arking fees which was declared as #ro#rietary in
nature !y the /igh Court in ,eodoro, !ut management and
maintenance of air#ort o#erations as a whole, as well. Thus, in the
much later case of Civil +eronautics +dministration vs. Court o*
+ppeals 3.45 6CR+ /7 8.-779:,the Su#reme Court, reiterating the
#ronouncements laid down in ,eodoro, declared that the C$$
2#redecessor of +,;9 is an agency not immune from suit, it !eing
engaged in functions #ertaining to a #rivate entity. 't went on to
e"#lain in this wise,
" " "
The Civil $eronautics $dministration comes under the category of a
#rivate entity. $lthough not a !ody cor#orate it was created, like
the Kational $ir#orts Cor#oration, not to maintain a necessary
function of government, !ut to run what is essentially a !usiness,
even if revenues !e not its #rime o!:ective !ut rather the #romotion
of travel and the convenience of the travelling #u!lic. 't is engaged
in an enter#rise which, far from !eing the e"clusive #rerogative of
state, may, more than the construction of #u!lic roads, !e
undertaken !y #rivate concerns. 0Kational $ir#orts Cor#. v.
Teodoro, supra, #. 87+.1
" " "
True, the law #revailing in ()B8 when the ,eodoro case was
#romulgated was A"ec. Crder -6B 23eorganiFing the Civil
$eronautics $dministration and $!olishing the Kational $ir#orts
Cor#oration9. 3e#u!lic $ct Ko. ++6 2Civil $eronautics $ct of the
Phili##ines9, su!se<uently enacted on .une 87, ()B8, did not alter
the character of the C$$s o!:ectives under A"ec. Crder -6B. The
#ertinent #rovisions cited in the ,eodoro case, #articularly Secs. -
and 5 of A"ec. Crder -6B, which led the Court to consider the C$$ in
the category of a #rivate entity were retained su!stantially in
3e#u!lic $ct ++6, Sec. -82859 and 28B9. Said $ct #rovides,
Sec. -8. Powers and !uties o* the +dministrator. Su!:ect to
the general control and su#ervision of the Le#artment /ead,
the $dministrator shall have among others, the following
#owers and duties,
" " "
2859 ,o administer, operate, mana%e, control, maintain and
develop the #anila )nternational +irport and all %overnment<
owned aerodromes e"ce#t those controlled or o#erated !y
the $rmed Eorces of the Phili##ines including such #owers
and duties as, 2a9 to #lan, design, construct, e<ui#, e"#and,
im#rove, re#air or alter aerodromes or such structures,
im#rovement or air navigation facilities@ 2!9 to enter into,
make and e"ecute contracts of any kind with any #erson,
Drm, or #u!lic or #rivate cor#oration or entity@ M
28B9 To determine, D", im#ose, collect and receive landing
fees, #arking s#ace fees, royalties on sales or deliveries,
direct or indirect, to any aircraft for its use of aviation
gasoline, oil and lu!ricants, s#are #arts, accessories and
su##lies, tools, other royalties, fees or rentals for the use of
any of the #ro#erty under its management and control.
" " "
Erom the foregoing, it can !e seen that the C$$ is tasked with
#rivate or nongovernmental functions which o#erate to remove it
from the #urview of the rule on State immunity from suit. Eor the
correct rule as set forth in the ,eodoro case states,
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Kot all government entities, whether cor#orate or noncor#orate,
are immune from suits. )mmunity *rom suits is determined by the
character o* the ob=ects *or which the entity was or%anized. The
rule is thus stated in Cor#us .uris,
Suits against State agencies with relation to matters in which they
have assumed to act in #rivate or nongovernmental ca#acity, and
various suits against certain cor#orations created !y the state for
#u!lic #ur#oses, !ut to engage in matters #artaking more of the
nature of ordinary !usiness rather than functions of a governmental
or #olitical character, are not regarded as suits against the state.
The latter is true, although the state may own stock or #ro#erty of
such a cor#oration for !y engaging in !usiness o#erations through a
cor#oration, the state divests itself so far of its sovereign character,
and !y im#lication consents to suits against the cor#oration. 2B)
C..., -(-9 0Kational $ir#orts Cor#oration v. Teodoro, supra, ##. 876
87+@ 'talics su##lied.1
This doctrine has !een reaGrmed in the recent case of #alon% v.
Philippine $ational Railways 0N.3. Ko. L5))-7, $ugust +, ()*B, (-*
SC3$ 6-1, where it was held that the Phili##ine Kational 3ailways,
although owned and o#erated !y the government, was not immune
from suit as it does not e"ercise sovereign !ut #urely #ro#rietary
and !usiness functions. $ccordingly, as the C$$ was created to
undertake the management of air#ort o#erations which #rimarily
involve #ro#rietary functions, it cannot avail of the immunity from
suit accorded to government agencies #erforming strictly
governmental functions.

'n our view, the C$ there!y correctly a##reciated the :uridical
character of the $TC as an agency of the Novernment not
per*ormin% a purely %overnmental or soverei%n *unction, !ut was
instead involved in the management and maintenance of the
Loakan $ir#ort, an activity that was not the e"clusive #rerogative of
the State in its sovereign ca#acity. /ence, the $TC had no claim to
the States immunity from suit. He u#hold the C$s afore<uoted
holding.
$hen consi#ere# a suit a%ainst the State.
(. The 3e#u!lic is sued !y name@
8. Suits against an unincor#orated government agency@
-. Suits are against a government oGcial, !ut are such that
ultimate lia!ility shall devolve on the government,
a. Hhen a #u!lic oGcer acts in !ad faith, or !eyond the sco#e
of his authority, he can !e held #ersonally lia!le for
damages.
!. ;4T, 'f he acted #ursuant to his oGcial duties, without
malice, negligence, or !ad faith, he is not #ersonally lia!le,
and the suit is really one against the State.
A((lication / Prohi*ition of the rule.
(. This rule a##lies not only in favor of the Phili##ines
!ut also in favor of the foreign states.
8. The rule likewise #rohi!its a #erson from Dling for
inter#leader, with the State as one of the defendants
!eing com#elled to inter#lead.
CAS0S
The 3ice and Corn $dministration 23C$9 is #art of the
government !eing in fact an oGce under the oGce of the
President and therefore, cannot !e sued without the consent
of the State. The consent to !e e=ective must come from
the State, acting through a duly enacted statute. Thus,
whatever counsel for defendant 3C$ agreed to had no
!inding force in the government. That was clearly !eyond
the sco#e of his authority 23e#u!lic vs. Purisima, +* SC3$
5+79.
The ;ureau of Customs cannot !e held lia!le for actual
damages that the #rivate res#ondent sustained with regard
to its goods. To #ermit #rivate res#ondents claim to #ros#er
would violate the doctrine of sovereign immunity. Since it
demands that the Commissioner of Customs !e ordered to
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#ay for actual damages it sustained, for which ultimately
lia!ility will fall on the government, it is o!vious that this
case has !een converted technically into a suit against the
State. The ;ureau of Customs, along with the ;ureau of
'nternal 3evenue, it is invested with an inherent #ower of
sovereignty, namely, ta"ation 2Earolan vs. CT$, 8(+ SC3$
8)*9.
't is a##arent from the com#laint that ;radford was sued in
her #rivate or #ersonal ca#acity for acts allegedly done
!eyond the sco#e and even !eyond her #lace of oGcial
functions, said com#laint is not then vulnera!le to a motion
to dismiss on the grounds relied u#on !y the #etitioners
!ecause as a conse<uence of the hy#othetical admission of
the truth of the allegations therein, the case falls within the
e"ce#tion to the doctrine of State immunity 24S$ vs. 3eyes,
N3 +)8--, March (, ())-9.
Eeliciano was holding #ro#erty title to which was evidenced
!y an informacion #osesoria. Proclamation no. )7 of
President Magsaysay included it among #ro#erties for
su!division and distri!ution. Eeliciano sued the 3e#u!lic,
re#resented !y the Land $uthority, to recover #ossession of
the land. The #lainti= has im#leaded the 3e#u!lic as
defendant in an action for recovery of ownershi# and
#ossession of a #arcel of land, !ringing the State to court :ust
like any #rivate #erson who is claimed to !e usur#ing a #iece
of #ro#erty. The State #leaded immunity from suit. The suit
against the State which under settled :uris#rudence is not
#ermitted, e"ce#t u#on a showing that the State has
consented to !e sued. 'nformacion #osesoria had not !een
shown to have !een converted into a record of ownershi#. 't
is nothing more than #rima facie evidence of #ossession.
Eeliciano must #ursue to #rove title. The consent of the
State to !e sued must emanate from statutory authority.
Haiver of State 'mmunity can only !e made !y an act of
legislative !ody 23e#u!lic vs. Eeliciano, (5* SC3$ 5859.
1or's of Consent
(. A"#ress consent
8. 'm#lied consent
0&(ress Consent
(. Hhen he law e"#ressly grants the authority to sue the State
or any of its agencies.
8. A"am#les,
a. $ law creating a government !ody e"#ressly #roviding
that such !ody >may sue or !e sued.?
!. $rt 8(*7 of the Civil Code, which creates lia!ility
against the State when it acts through a s#ecial
agent.
CAS0S
3es#ondent Singson cause of action is a money claim
against the government for the #ayment of the alleged
!alance of the cost of s#are #arts su##lied !y him to the
;ureau of Pu!lic /ighways. $ssuming momentarily the
validity of such claim, mandamus is not remedy to enforce
the collection of such claim against the State, !ut an
ordinary action for s#eciDc #erformance. The suit is against
the State which cannot #ros#er or !e entertained !y the
Court e"ce#t with the consent of the State. The res#ondent
should have Dled his claim with the general auditing oGce
under the #rovision of comm..act -8+ which #rescri!e the
condition under which money claim against the government
may !e Dled 2Sayson vs. Singson, B5 SC3$ 8*89.
;y consenting to !e sued, the State sim#ly waives its
immunity from suit. 't does not there!y concede its lia!ility
to the #lainti=, or create any cause of action in its favor, or
e"tend its lia!ility to any cause not #reviously recogniFed. 't
merely gives remedy to enforce a #ree"isting lia!ility and
su!mit itself to the :urisdiction of the court. Su!:ect to its
right to inter#ose any lawful defense. The Novernment of
the Phili##ines is only lia!le for the acts of its agents,
oGcers, and em#loyees when they act as s#ecial agents. $
s#ecial agent is one who receives a deDnite and D" order or
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commission, foreign to the e"ercise of the duties of his oGce
if he is a s#ecial oGcial 2Meritt vs. Novernment, -5 Phil -((9.
;y engaging in !usiness through the instrumentality of a
cor#oration, the government divests itself of its sovereign
character so as to render the cor#oration su!:ect to the rules
governing the #rivate cor#orations. Narnishment is a #ro#er
remedy for a #revailing #arty to #roceed against the funds of
a cor#orate entity even if owned or controlled !y the
government. 't is well settled that when a government enters
into commercial !usiness it a!andons its sovereign ca#acity
and is to !e treated :ust like any other cor#oration 2PK; vs.
C'3, *( SC3$ -(59.
4nder its charter 23$ ((6(, Sec. 5O9 the SSS can sue and !e
sued. So, if assuming that the SSS en:oys immunity from
suit as an entity #erforming governmental functions !y virtue
of the e"#licit #rovision of the ena!ling law, it can !e sued.
The government must !e deemed to have waived immunity
in res#ect of the SSS, although it does not there!y concede
its lia!ility 2SSS vs. C$, (87 SC3$ +7+9.
I'(lie# Consent
(. Hhen the State enters into a #rivate contract. The contract
must !e entered into !y the #ro#er oGcer and within the sco#e
of his authority. 4KLASS, the contract is merely incidental to the
#erformance of a governmental function.
8. Hhen the State enters into a !usiness contract. 4KLASS, The
o#eration is incidental to the #erformance of a governmental
function 2e.g. arrastre services9. Thus, when the State conduct
!usiness o#erations through NCCC, the latter can !e generally
!e sued, even if its charter contains no e"#ress >sue or !e sued?
clause.
3ure Gestionis !y right of economic or !usiness
relations, may !e sued 24S v. Nuinto, (*8 SC3$ 65579@
3ure I'(erii !y right of sovereign #ower, in the
e"ercise of sovereign functions. Ko im#lied consent 24S
v. 3uiF, (-6 SC3$ 5*+9@
-. Hhen it is a suit against an incor#orated government agency
Unincorporated
a. Performs governmental functions, not sua!le
without State consent even is #erforming
#ro#rietary function incidentally.
!. Performs #ro#rietary functions, sua!le.
5. Hhen the State Dles suit against a #rivate #arty 4KLASS, the
suit is entered into only to resist a claim..
CAS0S
Hhen the State Dles an action, it divests itself of the
sovereign character and shed its immunity from suit,
descending to the level of an ordinary litigant 23P vs.
Sandigan!ayan, N3 *B-*5, Ee!ruary 8*, ())79.
The claim for damages for the use of #ro#erty against the
intervenor de#endant 3e#u!lic of the Phili##ines to which it
was transferred cannot !e maintained !ecause of the
immunity of the State from suit. The claim o!viously
constitutes a charge against, or Dnancial lia!ility to, the
Novernment and conse<uently cannot !e entertained !y the
courts e"ce#t with the consent of the government 2Lim vs.
;rownell, (7+ Phil -559.
Hhen the government enters into a commercial transaction,
it a!andons its sovereign ca#acity and it is to !e treated like
any other cor#oration 2Malong &s. PK3, (-* SC3$ 6-9.
Kational 'rrigation $uthority is a government agency vested
with cor#orate #ersonality se#arate and distinct from the
government 2Sec .(, 3$ -67(9, thus is governed !y the
Cor#oration Law. 4nder Sec. 8, PL BB8 K'$ is allowed to
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collect fees and other charges as may!e necessary to cover
the cost of o#eration, maintenance, and insurance and to
recover the cost of construction, etc. K'$ may also sue and
!e sued in court. 't is authoriFed to e"ercise the #owers of a
cor#oration under the Cor#oration Law, insofar as they are
not inconsistent with the #rovision of K'$ charter 2Eontanilla
&s. Maliaman, ()5 SC3$ 5*69.
The a##lication of the doctrine of immunity from suit has
!een restricted to sovereign or governmental activities 2:ure
im#erii9. The mantel of State immunity cannot !e e"tended
to commercial, #rivate and #ro#rietary acts 2:ure gestionis9. 'f
the contract was entered into the discharge of its
governmental functions, the sovereign State cannot !e
deemed to have waived its immunity from suit 2.4SM$N vs.
KL3C, N3 ()**(-, Lec. (B, ())59.
Petitioner Dled an action in the CE' of Pam!oanga City for the
revocation of a Leed of Lonation which he had his wife had
made to the ;ureau of Plant and 'ndustry. /e claimed that
the donee failed to com#ly with the condition of the
donation. Crdinarily, a suit of this nature cannot #ros#er. 't
would, however, !e manifestly unfair for the government, as
donee, which is alleged to have violated the condition under
which it received gratuitously certain #ro#erty, to invoke its
immunity. Since it would !e against e<uity and :ustice to
allow such defense in this case, consent to !e sued could !e
#resumed 2Santiago vs. 3e#u!lic, *+ SC3$ 8)59.
Hhen the government takes any #ro#erty for #u!lic use,
which is condition u#on the #ayment of :ust com#ensation,
to !e :udicially ascertained, it makes manifest that it su!mits
to the :urisdiction of a court. The Court may #roceed with
the com#laint and determine the com#ensation to which the
#etitioner are entitle 2Ministerio vs. CE', 57 SC3$ 5659.
Consent to 0&ecution
Consent to !e sued does not include consent to the e"ecution of
:udgment against it. Such e"ecution will re<uire another waiver,
!ecause the #ower of the court ends when the :udgment is
rendered, since government funds and #ro#erties may not !e seiFed
under writs of e"ecution or garnishment, unless such dis!ursement
is covered !y the corres#onding a##ro#riation as re<uired !y law
23e#u!lic v. &illasor, B5 SC3$ *59.
5ules 5e%ar#in% Garnish'ent or 6ev of Govern'ent 1un#s
in Govern'ent 7e(ositor.
General 5ule, Novernment funds de#osited with PK; or authoriFed
de#ositories cannot !e su!:ect to garnishment.
0&ce(tions.
Hhere law or ordinance has already !een enacted a##ro#riating a
s#eciDc amount to #ay a valid governmental o!ligation 2Munici#ality
of San Miguel, ;ulacan v. EernandeF, N3 Ko. L6(+55, .une 8B,
()*59.
Eunds !elonging to government cor#orations which can sue and !e
sues that are de#osited with a !ank 2PK; v. Pa!alan, *- SC3$ B)B9.
5ules 5e%ar#in% Pa'ent of Interests * Govern'ent in
Mone 3u#%'ents A%ainst it.
General 5ule, Novernment cannot !e made to #ay interests@
0&ce(tions.
(. eminent domain@
8. erroneous collection of ta"es@ or
-. where government aggress to #ay interest #ursuant to law.
CAS0S
Hhen a munici#ality fails or refuses without :ustiDa!le reason
to e=ect #ayment of a Dnal money :udgment rendered
against it, the claimant may avail of the remedy of
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mandamus in order to com#el the enactment and a##roval
of the necessary a##ro#riation ordinance and the
corres#onding dis!ursement of munici#al funds 2Munici#ality
of Makati vs. C$, ()7 SC3$ 8769.
The rule is and has always !een that all government funds
de#osited in the PK; or any other oGcial de#ositary of the
Phili##ine Novernment !y any of its agencies or
instrumentalities remain government funds and may not !e
su!:ect to garnishment or levy, in the a!sence of a
corres#onding a##ro#riation as re<uired !y law. Aven though
the rule as to immunity of a state from suit is rela"ed, the
#ower of the courts ends when the :udgment is rendered.
The functions and #u!lic services rendered !y the State
cannot !e allowed to !e #aralyFed or disru#ted !y the
diversion of #u!lic funds from their legitimate and s#eciDc
o!:ects, as a##ro#riated !y law. /owever, the rule is not
a!solute and admits of a welldeDned e"ce#tion, that it,
when there is a corres#onding a##ro#riation is re<uired !y
law. 'n such a case, the monetary :udgment may !e legally
enforced !y :udicial #rocesses 2City of Caloocan vs. $llarde,
N3 (7+8+(, Se#t. (7, 877-9.
Suits a%ainst 1orei%n States / International 9r%ani:ations
CAS0S
The 3e#u!lic of the Phili##ines has accorded the /oly See
the status of a foreign sovereign. The #rivilege of sovereign
immunity in this case was suGciently esta!lished !y the
memorandum and certiDcation of the Le#artment of Eoreign
$=airs. Hhere the #lea of immunity is recogniFed and
aGrmed !y the e"ecutive !ranch, it is the duty of the courts
to acce#t this claim so as not to em!arrass the e"ecutive
arm of the government in conducting the countrys foreign
relations. Pursuant to the ()6( &ienna Convention on
Li#lomatic 3elations, a di#lomatic envoy is granted immunity
from the civil and administrative :urisdiction of the receiving
state over any real action relating to #rivate immova!le
#ro#erty situated in the territory of the receiving state which
the envoy holds on !ehalf of the sending state for the
#ur#oses of the mission 2/oly See vs. 3osario, N3 (7()5),
Lecem!er (, ())59.
The traditional rule of State immunity e"em#ts a State from
!eing sued in the courts of another State without its consent
or waiver. This rule is a necessary conse<uence of the
#rinci#les of inde#endence and e<uality of States. /owever,
the rules of 'nternational Law are not #etriDed@ they are
constantly develo#ing and evolving. $nd !ecause the
activities of states have multi#lied, it has !een necessary to
distinguish them Q !etween sovereign and governmental
acts 2:ure im#erii9 and #rivate, commercial and #ro#rietary
acts 2:ure gestionis9. The result is that State immunity now
e"tends only to acts :ure im#erii. $ state may !e said to have
descended to the level of an individual and can thus !e
deemed to have tacitly given its consent to !e sued only
when it enters intyo !usiness contracts. The rule does not
a##ly where the contract relates to the e"ercise of its
sovereign functions and is not for commercial or !usiness
#ur#oses 24S$ vs, 3uiF, (-6 SC3$ 5*+9.
'nternational law is founded largely u#on the #rinci#les of
reci#rocity, comity, inde#endence, and e<uality of States
which were ado#ted as #art of the law of our land under $rt.
'', Sec. 8 of the ()*+ Constitution. The rule that a State may
not !e sued without its consent is necessary conse<uence of
the #rinci#les and inde#endence and e<uality of States.
/owever, the increasing need of sovereign States to enter
into #urely commercial activities remotely connected with
the discharge of their governmental functions !rought a!out
a new conce#t of sovereign immunity. This conce#t, the
restrictive theory, holds that immunity of the sovereign is
recogniFed only with regard to #u!lic acts or acts :ure
im#erii, !ut not with regard to #rivate acts or :ure gestionis.
's the foreign State engaged in the regular conduct of
!usinessI 'f the foreign State is not engaged regularly in a
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!usiness or commercial activity, or if the act is in #ursuit of a
sovereign activity, or an incident thereof, then it is an act
:ure im#erii 23e#u!lic of 'ndonesia vs. &inFon, N3 (B5+7B,
.une 8B, 877-9.
Slandering a #erson could not #ossi!ly !e covered !y the
immunity agreement !ecause our laws do not allow the
commission of a crime in the name of oGcial duty. 't is a
wellsettled #rinci#le of law that a #u!lic oGcial may !e
lia!le in his #ersonal #rivate ca#acity for whatever damage
he may have caused !y his actdone with malice or in !ad
faith or !eyond the sco#e of his authority or :urisdiction.
4nder the &ienna Convention on Li#lomatic 3elations, the
commission of a crime is not #art of oGcial duty 2Liang vs.
Peo#le, N3 (8B*6B, .anuary 8*, 87789.
Can the Govern'ent of the 5e(u*lic of the Phili((ines *e
sue#;
$s a rule, the government of the 3e#u!lic of the Phili##ines cannot
!e sued without its consent. The consent of the State to !e sued
may !e given e"#ressly or im#liedly. A"#ress consent may !e
manifested either through a general law or s#ecial law.
0&(ress Consent
(. There is e"#ress consent when a law e"#ressly grants
authority to sue the State or any of its agencies.
8. $nother e"am#le of e"#ress consent is the law enacted !y
the Phili##ine Legislature authoriFing an individual to sue the
Phili##ine Novernment for in:uries he had sustained when his
motorcycle collided with a government am!ulance 2Merit vs
3P -5 Phil -((9
I'(lie# Consent
(. Hhen the State enters into a #rivate contract, unless the
contract is only incidental to the #erformance of a
government function 2Santos vs Santos )8 Phil 8*(9
8. Hhen the State enters into an o#eration that is essentially a
!usiness o#eration, unless, the !usiness o#eration is only
incidental to the #erformance of a governmental function.
2Mo!ile Phili##ines vs Customs $rrastre Services, (* SC3$
((87, ()669
-. Hhen the State sues a #rivate #arty, the defendant can Dle a
counterclaim against the State, unless the suit is entered
into only to resist claim 2Lim vs ;rownell (7+ Phil -55, ()6)9
$hat is the (roce#ure to (rosecute the clai' of
%overn'ent;
Claim against must !e Dled Drst in the commission of audit, which
must act u#on 67 days. 'f re:ected, then through certiorari in the
Su#reme Court.
Can the e&(ress consent of the State *e %iven * a 'ere
counsel of the %overn'ent;
'n 3e#u!lic vs Purisima 2+* SC3$ 5+79, the Su#reme Court ruled
that the waiver made !y the lawyer is not !inding u#on the state.
The e"#ress consent of the State to !e sued should, therefore, !e
#rovided !y law.
Can the a%encies of the Govern'ent of the Phili((ines *e
sue#;
't de#ends on whether the government agency to !e sued is
incor#orated or unincor#orated. 'f it is incor#orated, the rule is that
it is sua!le if its charter says so and regardless of the function it is
#erforming.
'f it is unincor#orated, the rule is that it is sua!le if it is #erforming
#ro#rietary functions, and not sua!le if it is #erforming
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$hen the State %ives its consent to *e sue#) #oes it also
consent to the e&ecution of the <u#%'ent a%ainst it; =!ee#s
further research>
.udgment is one thing and dis!ursement of #u!lic funds to satisfy
the said :udgment is another. The Drst is well within the sco#e of the
#ower and authority of the court. The second de#ends on whether
or not there is a corres#onding a##ro#riation, as re<uired !y law, to
satisfy the :udgment of the court.
3e#u!lic of the Phili##ines
S?P50M0 C9?5T
Manila
E'3ST L'&'S'CK

G.5. !o. 6@3A3-2 !ove'*er -9) 1973
597?619 C. !I050) #etitioner,
vs.
B9!. C9?5T 91 1I5ST I!STA!C0 91 !0G59S 9CCI70!TA6)
"5A!CB II) 39S0 C. D?IAM"A9) an# 3AIM0 PA559C9) Cit
Treasurer of 6a Carlota Cit) res#ondents.
#edalla<$ava and +ssociates and !ominador Laberinto and
+ssociates *or petitioner.
+ctin% City >iscal 3La Carlota: >ortunato ?. 6in%son, "r. *or
respondents.

MACASIA5) J.:
Petitioner 3odulfo C. Kiere Dled this #etition for review
on certiorari seeking the reversal of the decision dated Lecem!er
8*, ()6* of the res#ondent Court.
't is undis#uted that La Carlota City was created !y 3e#u!lic $ct Ko.
5B*B enacted on .une (), ()6B. Petitioner 3odulfo C. Kiere is a Civil
Service eligi!le, having #assed the ;oard A"aminations for Civil
Angineers in $ugust, ()67 with a rating of +(.)*R. /e entered the
government service on Ccto!er -, ()67 as a civil engineer aide in
the Listrict AngineerSs CGce at ;acolod City at P5.77 a day until he
was given a #ermanent a##ointment as such on Lecem!er (, ()6(
at P8B55.77 #er annum. /e was #romoted on Kovem!er (6, ()68
as :unior civil engineer@ on Se#tem!er ), ()6-, as associate civil
engineer@ and on Ccto!er 8*, ()65 as civil engineer. Cn .anuary -,
()66, he was a##ointed city engineer of La Carlota City !y then City
Mayor .aime Marino #ursuant to the #rovisions of Section 8( of
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3e#u!lic $ct Ko. 5B*B, which a##ointment was endorsed to the
Commissioner of Civil Service, who a##roved the same on .anuary
(7, ()66. Petitioner thereafter assumed oGce as such city engineer
of La Carlota City.
$fter the enactment on .uly (+, ()6+ of the LecentraliFation $ct,
otherwise known as 3e#u!lic $ct Ko. B(*B, #rivate res#ondent .ose
O. Tuiam!ao was a##ointed on May (5, ()6* !y the President of the
Phili##ines as city engineer of La Carlota City, u#on
recommendation of the Commissioner of Pu!lic /ighways, who, on
.une (+, ()6*, oGcially informed herein #etitioner of said
a##ointment of #rivate res#ondent Tuiam!ao, which a##ointment
was duly conDrmed !y the Commission on $##ointments, and
directed #etitioner to turn over the oGce to res#ondent Tuiam!ao,
who likewise on the same day .une (+, ()6*, advised #etitioner that
he was assuming as city engineer of La Carlota City.
'n re#ly to #etitionerSs motion for reconsideration of the
conDrmation of res#ondent Tuiam!ao, the Secretary of the
Commission on $##ointments, in a letter dated .une 8(, ()6*,
informed the #etitioner that his said motion was Dled !eyond the
reglementary #eriod and that his sole remedy is to Dle uo
warranto #roceedings in court.
Private res#ondent Tuiam!ao graduated cum laude from the
Silliman 4niversity in ()B+ with a degree of ;achelor of Science in
Civil Angineering and #assed the ;oard A"aminations the same year
with a rating of *8.5R. /e entered the government service in ()B+
while he was not yet a registered engineer in the City AngineerSs
CGce of Lumaguete City, then as associate engineer in ()6B in the
same oGce, from which he was #romoted u#on recommendation of
the Commissioner of Pu!lic /ighways as heretofore intimated, to the
#osition of City Angineer of La Carlota City e=ective May (5, ()6*.
Petitioner claims that he was legally a##ointed !y the City Mayor of
La Carlota City under Section 8( of 3e#u!lic $ct Ko. 5B*B.
Cn the other hand, res#ondents maintain that the #osition of city
engineer, created in the Charter of La Carlota City 2Secs. () U 8),
3.$. Ko. 5B*B9 which was enacted on .une (), ()6B and therefore
already e"isting at the time of the a##ointment of #etitioner on
.anuary -, ()66, can !e Dlled u# only !y a##ointment of the
President of the Phili##ines with the conDrmation of the Commission
on $##ointments under Section 5 of 3e#u!lic $ct Ko. B(*B, which
e"#ressly e"ce#ts the city, engineer from the a##ointing authority of
the city mayor.
Section 8( of 3e#u!lic $ct Ko. 5B*B #rovides thus,
$##ointment and removal of oGcials and em#loyees.
Q The mayor shall a##oint the city treasurer, the city
health oGcer, the chief of #olice and Dre de#artment,
and other heads and other em#loyees of such city
de#artment as may !e created. Said oGce shall not
!e sus#ended nor removed e"ce#t in the manner and
for causes #rovided !y law, Provided, That
a##ointments of heads and other em#loyees of the
city shall !e limited to civil service eligi!les as may
from time to time !e certiDed as such !y the
Commissioner of Civil Service.
Section 5 of 3e#u!lic $ct Ko. B(*B reads thus,
The City $ssesssor, City $griculturist, City Chief of
Police and City Chief of Eire Le#artment and other
heads of oGces entirely #aid out of city funds and
their res#ective assistants or de#uties shall, su!:ect
to civil service law, rules and regulations, !e
a##ointed !y the City Mayor@ Provided, however, that
this section shall not a##ly to .udges, $uditors,
Eiscals, City Su#erintendents of Schools, Su#ervisors,
Princi#als, City Treasurers, City /ealth oGcers and
City Angineers.
Section (72-9 of $rticle &'' of the ()-B Constitution states,
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The President shall nominate and with the consent of
the Commission on $##ointments, shall a##oint the
heads of the e"ecutive de#artments and !ureaus,
oGcers of the $rmy from the rank of colonel, of the
Kavy and $ir Eorces from the rank of ca#tain or
commander, and all other oGcers of the Novernment
whose a##ointments are not herein otherwise
#rovided for, and those whom he may!e authoriFed
!y law to a##oint@ !ut the Congress may !y law vest
the a##ointment of inferior oGcers, in the President
alone, in the courts, or in the heads of de#artments.
The #etition should !e dismissed and the decision of the court a
uo must !e aGrmed.
'
/ouse ;ill Ko. )+((, which !ecame 3e#u!lic $ct Ko. 5B*B, originally
e"#ressly included the city engineer as one of those whom the city
mayor can a##oint under Section 8( of 3e#u!lic $ct Ko. 5B*B, !ut
during the #eriod of amendment in the Senate, the #osition of said
engineer was deleted in the Dnal draft of Section 8(. This fact
clearly indicates that the intention of the Legislature was to e"clude
from the a##ointing #ower of the mayor the #osition of the city
engineer. This is not an amendment #urely on a matter of form@
!ecause nothing could !e more su!stantial than the vesting of a
#ower to a##oint such an im#ortant city oGcial as the city engineer.
PetitionerSs assertion that Senator Tolentino stated that this
amendment is merely one of form is not accurate@ !ecause the
records of the Senate session during the #eriod of amendments, as
<uoted !y #etitioner himself, show that,
T/A P3AS'LAKT P3C TAMPC3A. He are in the #eriod
of amendments.
SAK$TC3 TCLAKT'KC. There are committed
amendments, Mr. President, em!odied in the
committee 3e#ort. Some of them are matters of form.
The other refers to the allotment of collection of
ta"es. ' move that these committee amendments !e
a##roved.
T/A P3AS'LAKT P3C TAMPC3A. 's there any
o!:ectionI 2Silence9 The Chair hears none. The motion
is a##roved. 2P. 87 of Petition@ #. -7, rec.@ #. 58,
#etitionerSs !rief9.
The Committee amendments included,
-. Page --, line 6 .
Lelete the following,
Vthe city engineer,
the city attorney.
V2P. 8( of Petition@ #. -(, rec.@ #. 5-,
#etitionerSs !rief9.
$s afore<uoted, Senator Tolentino was careful or deli!erate in
stating that some, not all, of the amendments were matters of form.
Keither did he refer e"#ressly to the deletion of the words city
en%ineer from Section 8( of the Charter of La Carlota City as #urely
a formal amendment. 'f Congress wanted to authoriFe the city
mayor to a##oint all heads and em#loyees of city de#artment, it
could have easily re#hrased Section 8( of the City Charter to that
e=ect. That this is a material modiDcation is underscored !y the fact
that the City Charters of Toledo, Cota!ato, Oanlaon, La#itan, San
Carlos, Ningoog, Lavao, Taclo!an, Silahis, ;ago, ;acolod, Ce!u,
Legas#i and 3o"as or 3e#u!lic $cts Kos. 86**, 8-65, -55B, -*((,
865-, 866*, -78*, -76*, 5-*8, -*B+, 88-5 and 67- e"#resslly vest
the #ower to a##oint the city de#artment heads, including the city
engineer, in the President of the Phili##ines, who is the re#ository of
the a##ointing #ower !y e"#ress constitutional conferment 2Sec.
(72-9, $rt. &'', ()-B Constitution@ see also Sec. (-, $rt. '%, ()+-
Constitution9.
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The clear legislative intendment in e"ce#ting the engineer from the
a##ointing authority of the city mayor under Section 8( of the
Charter of La Carlota City is evident from the #hraseology of the
same. Said section e"#ressly limits the a##ointing authority of the
mayor to Vthe city treasurer, the city health oGcer, the chief of
#olice and Dre de#artment, ...V among the heads of the then duly
created and e"isting de#artments, like the city engineer, of the city
government of La Carlota City. The following #hrase in said Section
8( Vand other heads and other em#loyees of the city de#artments
as may !e created,V whom the mayor can a##oint, refers to heads
of city de#artments that may !e created after the enactment of
3e#u!lic $ct Ko. 5B*B. Ctherwise, as em#hasiFed !y res#ondents,
the Drst con:unction VandV !efore @Are department@ in the #receding
clause of that same sentence of Section 8( would !e a su#erWuity,
and would have no meaning at all. $s evident from the construction
of the Drst sentence in said Section 8(, the terminal #hrase @as may
be created@ modiAes the last clause @and other heads and other
employees o* such department,@ !y all the #rinci#les of logic and
synta".
'''
Since the city mayor under Section 8( is without authority to
a##oint the city engineer, this #rerogative can only !e e"ercised !y
the President of the Phili##ines, who, under Section (72-9 of $rticle
&'' of the ()-B Constitution, shall nominate with the consent of the
Commission on $##ointments Vall other oGcers of the government
whose a##ointments are not herein otherwise #rovided forV@
!ecause He ruled in Ramos vs. +lvarez 2)+ Phil. *55, *5)9 that
when a statute does not s#ecify how an oGcer is to !e a##ointed,
the a##ointment must !e made !y the President with the consent of
the Commission on $##ointments.
The a##ointing #ower is essentially the e"clusive #rerogative of the
President. Conse<uently, any diminution in its sco#e must !e clear
and une<uivocal. This test is not met !y Section 8( of 3e#u!lic $ct
Ko. 5B*B so as to remove the #ower to a##oint the city engineer of
La Carlota City from the residual #ower of a##ointment vested in
the President !y Section (72-9 of $rticle &'' of the ()-B Constitution.
/ence, the a##ointment of #etitioner as city engineer !y then city
mayor of La Carlota City is illegal and therefore null and void.
/owever, as conceded !y res#ondents, #etitioner was a de
*acto city engineer during the #eriod of time that he #erformed the
functions of the #osition until he was dis#laced !y res#ondent
Tuiam!ao who was validly nominated !y the President of the
Phili##ines and conDrmed !y the Commission on $##ointments
2Cordilla vs. MartineF, ((7 Phil. 85, 8B@ 3odrigueF vs. Tan, )( Phil.
+85, +8*@ Luna vs. 3odrigueF, -+ Phil. *669.
H/A3AEC3A, T/A $PPA$LAL LAC'S'CK 'S /A3A;X $EE'3MAL, H'T/
CCSTS $N$'KST PAT'T'CKA3.
#akalintal, C."., Castro, ,eehankee, ?s%uerra and #uBoz Palma, "".,
concur.
7i%est.
>acts: $ writ of e"ecution 3a writ to put in *orce the sentence that
the law has %iven: was issued !y the court against the funds of the
$rmed Eorces of the Phili##ines to satisfy a :udgment rendered
against the Phili##ine Novernment.
)ssue: Hhether or not the writ of e"ecution, issued !y res#ondent
:udge, is valid.
Celd: 't was ruled that #u!lic funds cannot !e the o!:ect of
garnishment #roceedings even if the consent to !e sued had !een
#reviously granted and even if the State lia!ility had !een ad:udged.
The universal rule that where the State gives its consent to !e sued
!y #rivate #arties either !y general or s#ecial law, it may limit
claimantSs action Sonly u# to the com#letion of #roceedings anterior
to the stage of e"ecutionS and that the #ower of the Courts ends
when the :udgment is rendered, since government funds and
#ro#erties may not !e seiFed under writs of e"ecution or
garnishment to satisfy such :udgments, is !ased on o!vious
considerations of #u!lic #olicy. Lis!ursements of #u!lic funds must
!e covered !y the corres#onding a##ro#riation as re<uired !y law.
The functions and #u!lic services rendered !y the State cannot !e
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allowed to !e #aralyFed or disru#ted !y the diversion of #u!lic funds
from their legitimate and s#eciDc o!:ects, as a##ro#riated !y law.
S?P50M0 C9?5T
Manila
E'3ST L'&'S'CK
G.5. !o. 7A843 March 1-) 1987
50P?"6IC 91 TB0 PBI6IPPI!0S) #etitionera##ellee,
vs.
PA"69 106ICIA!9 an# I!T05M07IAT0 APP066AT0
C9?5T) res#ondentsa##ellants.

EAP) J.:
Petitioner seeks the review of the decision of the 'ntermediate
$##ellate Court dated $#ril -7, ()*B reversing the order of the
Court of Eirst 'nstance of Camarines Sur, ;ranch &', dated $ugust
8(, ()*7, which dismissed the com#laint of res#ondent Pa!lo
Eeliciano for recovery of ownershi# and #ossession of a #arcel of
land on the ground of nonsua!ility of the State.
The !ackground of the #resent controversy may !e !rieWy
summariFed as follows,
Cn .anuary 88, ()+7, res#ondent Eeliciano Dled a com#laint with the
then Court of Eirst 'nstance of Camarines Sur against the 3e#u!lic of
the Phili##ines, re#resented !y the Land $uthority, for the recovery
of ownershi# and #ossession of a #arcel of land, consisting of four
259 lots with an aggregate area of (,-65.5(++ hectares, situated in
the ;arrio of Salvacion, Munici#ality of Tinam!ac, Camarines Sur.
Plainti= alleged that he !ought the #ro#erty in <uestion from &ictor
Nardiola !y virtue of a Contract of Sale dated May -(, ()B8,
followed !y a Leed of $!solute Sale on Ccto!er -7, ()B5@ that
Nardiola had ac<uired the #ro#erty !y #urchase from the heirs of
Erancisco $!raFado whose title to the said #ro#erty was evidenced
!y an in*ormacion posesoria that u#on #lainti=Ss #urchase of the
#ro#erty, he took actual #ossession of the same, introduced various
im#rovements therein and caused it to !e surveyed in .uly ()B8,
which survey was a##roved !y the Lirector of Lands on Ccto!er 85,
()B5@ that on Kovem!er (, ()B5, President 3amon Magsaysay
issued Proclamation Ko. )7 reserving for settlement #ur#oses, under
the administration of the Kational 3esettlement and 3eha!ilitation
$dministration 2K$33$9, a tract of land situated in the Munici#alities
of Tinam!ac and Siruma, Camarines Sur, after which the K$33$ and
its successor agency, the Land $uthority, started su!dividing and
distri!uting the land to the settlers@ that the #ro#erty in <uestion,
while located within the reservation esta!lished under Proclamation
Ko. )7, was the #rivate #ro#erty of #lainti= and should therefore !e
e"cluded therefrom. Plainti= #rayed that he !e declared the rightful
and true owner of the #ro#erty in <uestion consisting of (,-65.5(++
hectares@ that his title of ownershi# !ased onin*ormacion
posesoria of his #redecessorininterest !e declared legal valid and
su!sisting and that defendant !e ordered to cancel and nullify all
awards to the settlers.
The defendant, re#resented !y the Land $uthority, Dled an answer,
raising !y way of aGrmative defenses lack of suGcient cause of
action and #rescri#tion.
Cn $ugust 8), ()+7, the trial court, through .udge 3afael S. Sison,
rendered a decision declaring Lot Ko. (, with an area of +7(.)765
hectares, to !e the #rivate #ro#erty of the #lainti=, V!eing covered
!y a #ossessory information title in the name of his #redecessorin
interestV and declaring said lot e"cluded from the K$33$ settlement
reservation. The court declared the rest of the #ro#erty claimed !y
#lainti=, i.e. Lots 8, - and 5, reverted to the #u!lic domain.
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$ motion to intervene and to set aside the decision of $ugust 8),
()+7 was Dled !y eightysi" 2*69 settlers, together with the !arrio
council of Pagasay, alleging among other things that intervenors
had !een in #ossession of the land in <uestion for more than twenty
2879 years under claim of ownershi#.
Cn .anuary 8B, ()+(, the court a uo reconsidered its decision,
reo#ened the case and directed the intervenors to Dle their
corres#onding #leadings and #resent their evidence@ all evidence
already #resented were to remain !ut #lainti=, as well as the
3e#u!lic of the Phili##ines, could #resent additional evidence if they
so desire. The #lainti= #resented additional evidence on .uly -7,
()+(, and the case was set for hearing for the rece#tion of
intervenorsS evidence on $ugust -7 and $ugust -(, ()+(.
Cn $ugust -7, ()+(, the date set for the #resentation of the
evidence for intervenors, the latter did not a##ear !ut su!mitted a
motion for #ost#onement and resetting of the hearing on the ne"t
day, $ugust -(, ()+(. The trial court denied the motion for
#ost#onement and allowed #lainti= to o=er his evidence Ven
ausencia,V after which the case would !e deemed su!mitted for
decision. Cn the following day, $ugust -(, ()+(, .udge Sison
rendered a decision reiterating his decision of $ugust 8), ()+7.
$ motion for reconsideration was immediately Dled !y the
intervenors. ;ut !efore this motion was acted u#on, #lainti= Dled a
motion for e"ecution, dated Kovem!er (*, ()+(. Cn Lecem!er (7,
()+(, the lower court, this time through .udge Miguel Kavarro,
issued an order denying the motion for e"ecution and setting aside
the order denying intervenorsS motion for #ost#onement. The case
was reo#ened to allow intervenors to #resent their evidence. 4na!le
to secure a reconsideration of .udge KavarroSs order, the #lainti=
went to the 'ntermediate $##ellate Court on a #etition for certiorari.
Said #etition was, however, denied !y the 'ntermediate $##ellate
Court, and #etitioners !rought the matter to this Court in N.3. Ko.
-6(6-, which was denied on May -, ()+- Conse<uently, the case
was remanded to the court a uo for further #roceedings.
Cn $ugust -(, ()+7, intervenors Dled a motion to dismiss,
#rinci#ally on the ground that the 3e#u!lic of the Phili##ines cannot
!e sued without its consent and hence the action cannot #ros#er.
The motion was o##osed !y the #lainti=.
Cn $ugust 8(, ()*7, the trial court, through .udge Aste!an Lising,
issued the <uestioned order dismissing the case for lack of
:urisdiction. 3es#ondent moved for reconsideration, while the
Solicitor Neneral, on !ehalf of the 3e#u!lic of the Phili##ines Dled its
o##osition thereto, maintaining that the dismissal was #ro#er on the
ground of nonsua!ility of the State and also on the ground that the
e"istence andYor authenticity of the #ur#orted #ossessory
information title of the res#ondentsS #redecessorininterest had not
!een demonstrated and that at any rate, the same is not evidence
of title, or if it is, its eGcacy has !een lost !y #rescri#tion and
laches.
4#on denial of the motion for reconsideration, #lainti= again went to
the 'ntermediate $##ellate Court on #etition for certiorari. Cn $#ril
-7, ()*B, the res#ondent a##ellate court rendered its decision
reversing the order of .udge Lising and remanding the case to the
court a uo for further #roceedings. /ence this #etition.
He Dnd the #etition meritorious. The doctrine of nonsua!ility of the
State has #ro#er a##lication in this case. The #lainti= has im#leaded
the 3e#u!lic of the Phili##ines as defendant in an action for
recovery of ownershi# and #ossession of a #arcel of land, !ringing
the State to court :ust like any #rivate #erson who is claimed to !e
usur#ing a #iece of #ro#erty. $ suit for the recovery of #ro#erty is
not an action in rem, !ut an action in personam.1 't is an action
directed against a s#eciDc #arty or #arties, and any :udgment
therein !inds only such #arty or #arties. The com#laint Dled !y
#lainti=, the #rivate res#ondent herein, is directed against the
3e#u!lic of the Phili##ines, re#resented !y the Land $uthority, a
governmental agency created !y 3e#u!lic $ct Ko. -*55.
;y its ca#tion and its allegation and #rayer, the com#laint is clearly
a suit against the State, which under settled :uris#rudence is not
#ermitted, e"ce#t u#on a showing that the State has consented to
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!e sued, either e"#ressly or !y im#lication through the use of
statutory language too #lain to !e misinter#reted.
-
There is no such
showing in the instant case. Horse, the com#laint itself fails to
allege the e"istence of such consent. This is a fatal defect,
3
and on
this !asis alone, the com#laint should have !een dismissed.
The failure of the #etitioner to assert the defense of immunity from
suit when the case was tried !efore the court a uo, as alleged !y
#rivate res#ondent, is not fatal. 't is now settled that such defense
Vmay !e invoked !y the courts sua sponte at any stage of the
#roceedings.V
2
Private res#ondent contends that the consent of #etitioner may !e
read from the Proclamation itself, when it esta!lished the
reservation V su!:ect to #rivate rights, if any there !e. V He do not
agree. Ko such consent can !e drawn from the language of the
Proclamation. The e"clusion of e"isting #rivate rights from the
reservation esta!lished !y Proclamation Ko. )7 can not !e
construed as a waiver of the immunity of the State from suit. Haiver
of immunity, !eing a derogation of sovereignty, will not !e inferred
lightly. !ut must !e construed instrictissimi =uris.
4
Moreover, the
Proclamation is not a legislative act. The consent of the State to !e
sued must emanate from statutory authority. Haiver of State
immunity can only !e made !y an act of the legislative !ody.
Keither is there merit in res#ondentSs su!mission, which the
res#ondent a##ellate court sustained, on the !asis of our decision in
the De%osa case,
8
that the #resent action is not a suit against the
State within the rule of State immunity from suit, !ecause #lainti=
does not seek to divest the Novernment of any of its lands or its
funds. 't is contended that the com#laint involves land not owned !y
the State, !ut #rivate land !elonging to the #lainti=, hence the
Novernment is not !eing divested of any of its #ro#erties. There is
some so#histry involved in this argument, since the character of the
land sought to !e recovered still remains to !e esta!lished, and the
#lainti=Ss action is directed against the State #recisely to com#el the
latter to litigate the ownershi# and #ossession of the #ro#erty. 'n
other words, the #lainti= is out to esta!lish that he is the owner of
the land in <uestion !ased, incidentally, on an in*ormacion
posesoria of du!ious value, and he seeks to esta!lish his claim of
ownershi# !y suing the 3e#u!lic of the Phili##ines in an action in
personam.
The inscri#tion in the #ro#erty registry of an in*ormacion
posesoria under the S#anish Mortgage Law was a means #rovided
!y the law then in force in the Phili##ines #rior to the transfer of
sovereignty from S#ain to the 4nited States of $merica, to record a
claimantSs actual #ossession of a #iece of land, esta!lished through
an e' parte#roceeding conducted in accordance with #rescri!ed
rules.
7
Such inscri#tion merely furnishes, at !est, prima
*acie evidence of the fact that at the time the #roceeding was held,
the claimant was in #ossession of the land under a claim of right as
set forth in his a##lication.
8
The #ossessory information could ri#en
into a record of ownershi# after the la#se of 87 years 2later reduced
to (7 years9, u#on the fulDllment of the re<uisites #rescri!ed in
$rticle -)- of the S#anish Mortgage Law.
There is no showing in the case at !ar that the in*ormacion
posesoria held !y the res#ondent had !een converted into a record
of ownershi#. Such #ossessory information, therefore, remained at
!est mere prima *acie evidence of #ossession. 4sing this #ossessory
information, the res#ondent could have a##lied for :udicial
conDrmation of im#erfect title under the Pu!lic Land $ct, which is an
action in rem. /owever, having failed to do so, it is rather late for
him to #ursue this avenue at this time. 3es#ondent must also
contend, as the records disclose, with the fact admitted !y him and
stated in the decision of the Court a uo that settlers have !een
occu#ying and cultivating the land in <uestion since even !efore the
out!reak of the war, which #uts in grave dou!t his own claim of
#ossession.
Horthy of note is the fact, as #ointed out !y the Solicitor Neneral,
that the in*ormacion posesoria registered in the CGce of the
3egister of Leed of Camarines Sur on Se#tem!er 8-, ()B8 was a
VreconstitutedV #ossessory information@ it was Vreconstituted from
the du#licate #resented to this oGce 23egister of Leeds9 !y Lr.
Pa!lo Eeliciano,V without the su!mission of #roof that the alleged
du#licate was authentic or that the original thereof was lost.
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3econstitution can !e validly made only in case of loss of the
original. 1A These circumstances raise grave dou!ts as to the
authenticity and validity of the Vinformacion #osesoriaV relied u#on
!y res#ondent Eeliciano. $dding to the du!iousness of said
document is the fact that V#ossessory information calls for an area
of only (77 hectares,V 11 whereas the land claimed !y res#ondent
Eeliciano com#rises (,-65.5(++ hectares, later reduced to +7()765
hectares. Courts should !e wary in acce#ting V#ossessory
information documents, as well as other #ur#ortedly old S#anish
titles, as #roof of alleged ownershi# of lands.
H/A3AEC3A, :udgment is here!y rendered reversing and setting
aside the a##ealed decision of the 'ntermediate $##ellate Court,
dated $#ril -7, ()*B, and aGrming the order of the court a uo,
dated $ugust 8(, ()*7, dismissing the com#laint Dled !y
res#ondent Pa!lo Eeliciano against the 3e#u!lic of the Phili##ines.
Ko costs.
SC C3LA3AL.
7IG0ST.
Eacts, Petitioner seeks the review of the decision of the 'ntermediate
$##ellate Court revising the order of the Court of Eirst 'nstance
which dismissed the com#laint of Pa!lo Eeliciano for the recovery of
ownershi# and #ossession of a #arcel of land on the ground of non
sua!ility of the State.
Eeliciano Dled a com#laint with the Court of Eirst 'nstance against
the 3e#u!lic of the Phili##ines, re#resented !y the Land $uthority,
for the recovery of ownershi# and #ossession of a #arcel of land
consisting of four 259 lots with an aggregated area of (,-65.5(++
hectares, situated in ;arrio of Salvacion, Munici#ality of Tinam!ac,
Camarines Sur. Eeliciano alleged that he !ought the #ro#erty in
<uestion for &ictor Nardiola !y virtue of Contract of Sale and
followed !y a Leed of $!solute Sale@ that Nardiola had ac<uired the
#ro#erty !y #urchase from the heirs of Erancisco $!raFado whose
title to the said #ro#erty was evidenced !y an informacion #osesoria
that u#on his #urchase of the #ro#erty, he took actual #ossession of
the same, introduced various im#rovements therein and caused it to
!e surveyed in .uly ()B8, which survey was a##roved !y the
Lirector of Lands on Ccto!er 85, ()B5.
Cn Kovem!er (, ()B5, President 3amon Magsaysay issued a
Proclamation Ko. )7 reserving for settlement #ur#oses, under the
administration of te Kational 3esettlement and 3eha!ilitation
$dministration 2K$33$9, a tract of land situated in the Munici#alities
of Tinam!ac and Siruma, Camarines Sur, after which the K$33$ and
its successor agen!y, the Land $uthority, started su!dividing and
distri!uting the land to the settlers@ that the #ro#erty in <uestion,
while located within the reservation esta!lished under Proclamation
Ko. )7, was the #rivate #ro#erty of Eeliciano and should therefore
!e e"cluded. Eeliciano #rayed that he !e declared the rightful and
true owner of the #ro#erty in <uestion@ that his title of ownershi#
!ased on the informacion #osesoria of his #redecessorininterest !e
declared legal valid and su!sisting and that defendant !e ordered to
cancel and nullify all awards to the settlers.
'SS4A, Can the State !e sued for recovery and #ossession of a
#arcel of landI
34L'KN, Ko, the suit against the State, under settled :uris#rudence
is not #ermitted, e"ce#t u#on a showing that the State has
consented to !e sued, either e"#ressly of !y im#lication through the
use of statutory language too #lain to !e misinter#reted. 't may !e
invoked !y the courts at any stage of the #roceedings. Haiver of
immunity, will not !e inferred lightly, !ut must !e construed strictly.
Moreover, the Proclamation is not the legislative act. The consent of
the State to !e sued must emanate from statutory authority. Haiver
of State immunity can only !e made !y act of the legislative !ody.
5e(u*lic of the Phili((ines
S?P50M0 C9?5T
Manila
0! "A!C
G.5. !o. 788A7 1e*ruar -8) 199A
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?!IT07 STAT0S 91 AM05ICA) 150705ICC M. SM9?S0 A!7
EV9!!0 500V0S) (etitioners)
vs.
B9!. 06I97959 ". G?I!T9) Presi#in% 3u#%e) "ranch 6VII)
5e%ional Trial Court) An%eles Cit) 59"05T9 T. VA60!CIA)
0M050!CIA!A C. TA!G6A9) A!7 PA"69 C. 706
PI6A5) res(on#ents.
C34P, ".:
These cases have !een consolidated !ecause they all involve the
doctrine of state immunity. The 4nited States of $merica was not
im#leaded in the com#laints !elow !ut has moved to dismiss on the
ground that they are in e=ect suits against it to which it has not
consented. 't is now contesting the denial of its motions !y the
res#ondent :udges.
'n N.3. Ko. +667+, the #rivate res#ondents are suing several oGcers
of the 4.S. $ir Eorce stationed in Clark $ir ;ase in connection with
the !idding conducted !y them for contracts for !ar!er services in
the said !ase.
Cn Ee!ruary 85, ()*6, the Hestern PaciDc Contracting CGce,
Ckinawa $rea A"change, 4.S. $ir Eorce, solicited !ids for such
contracts through its contracting oGcer, .ames E. Shaw. $mong
those who su!mitted their !ids were #rivate res#ondents 3o!erto T.
&alencia, Amerenciana C. Tanglao, and Pa!lo C. del Pilar. &alencia
had !een a concessionaire inside Clark for -5 years@ del Pilar for (8
years@ and Tanglao for B7 years.
The !idding was won !y 3amon LiFon, over the o!:ection of the
#rivate res#ondents, who claimed that he had made a !id for four
facilities, including the Civil Angineering $rea, which was not
included in the invitation to !id.
The #rivate res#ondents com#lained to the Phili##ine $rea
A"change 2P/$%9. The latter, through its re#resentatives, #etitioners
Xvonne 3eeves and Erederic M. Smouse e"#lained that the Civil
Angineering concession had not !een awarded to LiFon as a result
of the Ee!ruary 85, ()*6 solicitation. LiFon was already o#erating
this concession, then known as the KCC clu! concession, and the
e"#iration of the contract had !een e"tended from .une -7, ()*6 to
$ugust -(, ()*6. They further e"#lained that the solicitation of the
CA !ar!ersho# would !e availa!le only !y the end of .une and the
#rivate res#ondents would !e notiDed.
Cn .une -7, ()*6, the #rivate res#ondents Dled a com#laint in the
court !elow to com#el P/$% and the individual #etitioners to cancel
the award to defendant LiFon, to conduct a re!idding for the
!ar!ersho# concessions and to allow the #rivate res#ondents !y a
writ of #reliminary in:unction to continue o#erating the concessions
#ending litigation.
(
4#on the Dling of the com#laint, the res#ondent court issued an e'
parte order directing the individual #etitioners to maintain
the status uo.
Cn .uly 88, ()*6, the #etitioners Dled a motion to dismiss and
o##osition to the #etition for #reliminary in:unction on the ground
that the action was in e=ect a suit against the 4nited States of
$merica, which had not waived its nonsua!ility. The individual
defendants, as oGcial em#loyees of the 4.S. $ir Eorce, were also
immune from suit.
Cn the same date, .uly 88, ()*6, the trial court denied the
a##lication for a writ of #reliminary in:unction.
Cn Ccto!er (7, ()**, the trial court denied the #etitionersS motion
to dismiss, holding in #art as follows,
Erom the #leadings thus far #resented to this Court !y
the #arties, the CourtSs attention is called !y the
relationshi# !etween the #lainti=s as well as the
defendants, including the 4S Novernment, in that
#rior to the !idding or solicitation in <uestion, there
was a !inding contract !etween the #lainti=s as well
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as the defendants, including the 4S Novernment. ;y
virtue of said contract of concession it is the CourtSs
understanding that neither the 4S Novernment nor
the herein #rinci#al defendants would !ecome the
em#loyerYs of the #lainti=s !ut that the latter are the
em#loyers themselves of the !ar!ers, etc. with the
em#loyer, the #lainti=s herein, remitting the
sti#ulated #ercentage of commissions to the
Phili##ine $rea A"change. The same circumstance
would !ecome in e=ect when the Phili##ine $rea
A"change o#ened for !idding or solicitation the
<uestioned !ar!er sho# concessions. To this e"tent,
therefore, indeed a commercial transaction has !een
entered, and for #ur#oses of the said solicitation,
would necessarily !e entered !etween the #lainti=s
as well as the defendants.
The Court, further, is of the view that $rticle %&''' of
the 3P4S ;ases $greement does not cover such kind
of services falling under the concessionaireshi#, such
as a !ar!er sho# concession.
8
Cn Lecem!er ((, ()*6, following the Dling of the herein #etition
for certiorari and #rohi!ition with #reliminary in:unction, we issued a
tem#orary restraining order against further #roceedings in the court
!elow.
-
'n N.3. Ko. +)5+7, Ea!ian Nenove Dled a com#laint for damages
against #etitioners $nthony Lamachia, Hilfredo ;elsa, 3ose Cartalla
and Peter Crascion for his dismissal as cook in the 4.S. $ir Eorce
3ecreation Center at the .ohn /ay $ir Station in ;aguio City. 't had
!een ascertained after investigation, from the testimony of ;elsa
Cartalla and Crascion, that Nenove had #oured urine into the sou#
stock used in cooking the vegeta!les served to the clu! customers.
Lamachia, as clu! manager, sus#ended him and thereafter referred
the case to a !oard of ar!itrators conforma!ly to the collective
!argaining agreement !etween the Center and its em#loyees. The
!oard unanimously found him guilty and recommended his
dismissal. This was e=ected on March B, ()*6, !y Col. Lavid C.
Oim!all, Commander of the -rd Com!at Su##ort Nrou#, P$C$E Clark
$ir Eorce ;ase. NenoveSs reaction was to Dle Ms com#laint in the
3egional Trial Court of ;aguio City against the individual
#etitioners.
5
Cn March (-, ()*+, the defendants, :oined !y the 4nited States of
$merica, moved to dismiss the com#laint, alleging that Lamachia,
as an oGcer of the 4.S. $ir Eorce stationed at .ohn /ay $ir Station,
was immune from suit for the acts done !y him in his oGcial
ca#acity. They argued that the suit was in e=ect against the 4nited
States, which had not given its consent to !e sued.
This motion was denied !y the res#ondent :udge on .une 5, ()*+, in
an order which read in #art,
't is the understanding of the Court, !ased on the
allegations of the com#laint Q which have !een
hy#othetically admitted !y defendants u#on the Dling
of their motion to dismiss Q that although defendants
acted initially in their oGcial ca#acities, their going
!eyond what their functions called for !rought them
out of the #rotective mantle of whatever immunities
they may have had in the !eginning. Thus, the
allegation that the acts com#lained of were illegal,
done. with e"treme !ad faith and with #reconceived
sinister #lan to harass and Dnally dismiss the #lainti=,
gains signiDcance.
B
The #etitioners then came to this Court seeking certiorari and
#rohi!ition with #reliminary in:unction.
'n N.3. Ko. *77(*, Luis ;autista, who was em#loyed as a !arracks
!oy in Cam# CS Lonnell, an e"tension of Clark $ir ;ase, was
arrested following a !uy!ust o#eration conducted !y the individual
#etitioners herein, namely, Tomi .. Oing, Larrel L. Lye and Ste#hen
E. ;ostick, oGcers of the 4.S. $ir Eorce and s#ecial agents of the $ir
Eorce CGce of S#ecial 'nvestigators 2$ECS'9. Cn the !asis of the
sworn statements made !y them, an information for violation of 3.$.
658B, otherwise known as the Langerous Lrugs $ct, was Dled
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against ;autista in the 3egional Trial Court of Tarlac. The a!ove
named oGcers testiDed against him at his trial. $s a result of the
Dling of the charge, ;autista was dismissed from his em#loyment.
/e then Dled a com#laint for damages against the individual
#etitioners herein claiming that it was !ecause of their acts that he
was removed.
6
Luring the #eriod for Dling of the answer, Mariano X. Kavarro a
s#ecial counsel assigned to the 'nternational Law Livision, CGce of
the Sta= .udge $dvocate of Clark $ir ;ase, entered a s#ecial
a##earance for the defendants and moved for an e"tension within
which to Dle an Vanswer andYor other #leadings.V /is reason was
that the $ttorney Neneral of the 4nited States had not yet
designated counsel to re#resent the defendants, who were !eing
sued for their oGcial acts. Hithin the e"tended #eriod, the
defendants, without the assistance of counsel or authority from the
4.S. Le#artment of .ustice, Dled their answer. They alleged therein
as aGrmative defenses that they had only done their duty in the
enforcement of the laws of the Phili##ines inside the $merican
!ases #ursuant to the 3P4S Military ;ases $greement.
Cn May +, ()*+, the law Drm of Luna, Sison and Manas, having !een
retained to re#resent the defendants, Dled with leave of court a
motion to withdraw the answer and dismiss the com#laint. The
ground invoked was that the defendants were acting in their oGcial
ca#acity when they did the acts com#lained of and that the
com#laint against them was in e=ect a suit against the 4nited
States without its consent.
The motion was denied !y the res#ondent :udge in his order dated
Se#tem!er ((, ()*+, which held that the claimed immunity under
the Military ;ases $greement covered only criminal and not civil
cases. Moreover, the defendants had come under the :urisdiction of
the court when they su!mitted their answer.
+
Eollowing the Dling of the herein #etition for certiorari and
#rohi!ition with #reliminary in:unction, we issued on Ccto!er (5,
()*+, a tem#orary restraining order.
*
'n N.3. Ko. *78B*, a com#laint for damages was Dled !y the #rivate
res#ondents against the herein #etitioners 2e"ce#t the 4nited States
of $merica9, for in:uries allegedly sustained !y the #lainti=s as a
result of the acts of the defendants.
)
There is a conWict of factual
allegations here. $ccording to the #lainti=s, the defendants !eat
them u#, handcu=ed them and unleashed dogs on them which !it
them in several #arts of their !odies and caused e"tensive in:uries
to them. The defendants deny this and claim the #lainti=s were
arrested for theft and were !itten !y the dogs !ecause they were
struggling and resisting arrest, The defendants stress that the dogs
were called o= and the #lainti=s were immediately taken to the
medical center for treatment of their wounds.
'n a motion to dismiss the com#laint, the 4nited States of $merica
and the individually named defendants argued that the suit was in
e=ect a suit against the 4nited States, which had not given its
consent to !e sued. The defendants were also immune from suit
under the 3P4S ;ases Treaty for acts done !y them in the
#erformance of their oGcial functions.
The motion to dismiss was denied !y the trial court in its order
dated $ugust (7, ()*+, reading in #art as follows,
The defendants certainly cannot correctly argue that
they are immune from suit. The allegations, of the
com#laint which is sought to !e dismissed, had to !e
hy#othetically admitted and whatever ground the
defendants may have, had to !e ventilated during the
trial of the case on the merits. The com#laint alleged
criminal acts against the individuallynamed
defendants and from the nature of said acts it could
not !e said that they are $cts of State, for which
immunity should !e invoked. 'f the Eili#inos
themselves are duty !ound to res#ect, o!ey and
su!mit themselves to the laws of the country, with
more reason, the mem!ers of the 4nited States
$rmed Eorces who are !eing treated as guests of this
country should res#ect, o!ey and su!mit themselves
to its laws.
(7
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and so was the motion for reconsideration. The defendants
su!mitted their answer as re<uired !ut su!se<uently Dled their
#etition for certiorari and #rohi!ition with #reliminary in:unction with
this Court. He issued a tem#orary restraining order on Ccto!er 8+,
()*+.
((
''
The rule that a state may not !e sued without its consent, now
e"#ressed in $rticle %&', Section -, of the ()*+ Constitution, is one
of the generally acce#ted #rinci#les of international law that we
have ado#ted as #art of the law of our land under $rticle '', Section
8. This latter #rovision merely reiterates a #olicy earlier em!odied in
the ()-B and ()+- Constitutions and also intended to manifest our
resolve to a!ide !y the rules of the international community.
Aven without such aGrmation, we would still !e !ound !y the
generally acce#ted #rinci#les of international law under the doctrine
of incor#oration. 4nder this doctrine, as acce#ted !y the ma:ority of
states, such #rinci#les are deemed incor#orated in the law of every
civiliFed state as a condition and conse<uence of its mem!ershi# in
the society of nations. 4#on its admission to such society, the state
is automatically o!ligated to com#ly with these #rinci#les in its
relations with other states.
$s a##lied to the local state, the doctrine of state immunity is !ased
on the :ustiDcation given !y .ustice /olmes that Vthere can !e no
legal right against the authority which makes the law on which the
right de#ends.V
(8
There are other #ractical reasons for the
enforcement of the doctrine. 'n the case of the foreign state sought
to !e im#leaded in the local :urisdiction, the added inhi!ition is
e"#ressed in the ma"im par in parem, non habet imperium. $ll
states are sovereign e<uals and cannot assert :urisdiction over one
another. $ contrary dis#osition would, in the language of a
cele!rated case, Vunduly ve" the #eace of nations.V
(-
Hhile the doctrine a##ears to #rohi!it only suits against the state
without its consent, it is also a##lica!le to com#laints Dled against
oGcials of the state for acts allegedly #erformed !y them in the
discharge of their duties. The rule is that if the :udgment against
such oGcials will re<uire the state itself to #erform an aGrmative
act to satisfy the same, such as the a##ro#riation of the amount
needed to #ay the damages awarded against them, the suit must !e
regarded as against the state itself although it has not !een
formally im#leaded.
(5
'n such a situation, the state may move to
dismiss the com#laint on the ground that it has !een Dled without
its consent.
The doctrine is sometimes derisively called Vthe royal #rerogative of
dishonestyV !ecause of the #rivilege it grants the state to defeat
any legitimate claim against it !y sim#ly invoking its nonsua!ility.
That is hardly fair, at least in democratic societies, for the state is
not an unfeeling tyrant unmoved !y the valid claims of its citiFens.
'n fact, the doctrine is not a!solute and does not say the state may
not !e sued under any circumstance. Cn the contrary, the rule says
that the state may not !e sued without its consent, which clearly
im#orts that it may !e sued if it consents.
The consent of the state to !e sued may !e manifested e"#ressly or
im#liedly. A"#ress consent may !e em!odied in a general law or a
s#ecial law. Consent is im#lied 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 $ct Ko. -7*-, under which the Phili##ine government Vconsents
and su!mits to !e sued u#on any moneyed claim involving lia!ility
arising from contract, e"#ress or im#lied, which could serve as a
!asis of civil action !etween #rivate #arties.V 'n #erritt v.
Eovernment o* the Philippine )slands,
(B
a s#ecial law was #assed to
ena!le a #erson to sue the government for an alleged tort. Hhen
the government enters into a contract, it is deemed to have
descended to the level of the other contracting #arty and divested
of its sovereign immunity from suit with its im#lied
consent.
(6
Haiver is also im#lied when the government Dles a
com#laint, thus o#ening itself to a counterclaim.
(+
The a!ove rules are su!:ect to <ualiDcation. A"#ress consent is
e=ected only !y the will of the legislature through the medium of a
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duly enacted statute.
(*
He have held that not all contracts entered
into !y the government will o#erate as a waiver of its nonsua!ility@
distinction must !e made !etween its sovereign and #ro#rietary
acts.
()
$s for the Dling of a com#laint !y the government, sua!ility
will result only where the government is claiming aGrmative relief
from the defendant.
87
'n the case of the 4nited States of $merica, the customary rule of
international law on state immunity is e"#ressed with more
s#eciDcity in the 3P4S ;ases Treaty. $rticle ''' thereof #rovides as
follows,
't is mutually agreed that the 4nited States shall have
the rights, #ower and authority within the !ases
which are necessary for the esta!lishment, use,
o#eration and defense thereof or a##ro#riate for the
control thereof and all the rights, #ower and authority
within the limits of the territorial waters and air s#ace
ad:acent to, or in the vicinity of, the !ases which are
necessary to #rovide access to them or a##ro#riate
for their control.
The #etitioners also rely heavily on Daer v. ,izon,
8(
along with
several other decisions, to su##ort their #osition that they are not
sua!le in the cases !elow, the 4nited States not having waived its
sovereign immunity from suit. 't is em#hasiFed that in ;aer, the
Court held,
The invocation of the doctrine of immunity from suit
of a foreign state without its consent is a##ro#riate.
More s#eciDcally, insofar as alien armed forces is
concerned, the starting #oint is Rauiza v. Drad*ord, a
()5B decision. 'n dismissing a ha!eas cor#us #etition
for the release of #etitioners conDned !y $merican
army authorities, .ustice /ilado s#eaking for the
Court, cited Coleman v. ,ennessee, where it was
e"#licitly declared, S't is well settled that a foreign
army, #ermitted to march through a friendly country
or to !e stationed in it, !y #ermission of its
government or sovereign, is e"em#t from the civil and
criminal :urisdiction of the #lace.S Two years later, in
Tu!! and Tedrow v. Nriess, this Court relied on the
ruling in 3a<uiFa v. ;radford and cited in su##ort
thereof e"cer#ts from the works of the following
authoritative writers, &attel, Hheaton, /all, Lawrence,
C##enheim, Hestlake, /yde, and McKair and
Lauter#acht. $ccuracy demands the clariDcation that
after the conclusion of the Phili##ine$merican
Military ;ases $greement, the treaty #rovisions
should control on such matter, the assum#tion !eing
that there was a manifestation of the su!mission to
:urisdiction on the #art of the foreign #ower whenever
a##ro#riate. More to the #oint is 6yuia v. +lmeda
Lopez, where #lainti=s as lessors sued the
Commanding Neneral of the 4nited States $rmy in
the Phili##ines, seeking the restoration to them of the
a#artment !uildings they owned leased to the 4nited
States armed forces stationed in the Manila area. $
motion to dismiss on the ground of nonsua!ility was
Dled and u#held !y res#ondent .udge. The matter was
taken to this Court in a mandamus #roceeding. 't
failed. 't was the ruling that res#ondent .udge acted
correctly considering that the 5 action must !e
considered as one against the 4.S. Novernment. The
o#inion of .ustice Montemayor continued, S't is clear
that the courts of the Phili##ines including the
Munici#al Court of Manila have no :urisdiction over
the #resent case for unlawful detainer. The <uestion
of lack of :urisdiction was raised and inter#osed at the
very !eginning of the action. The 4.S. Novernment
has not given its consent to the Dling of this suit
which is essentially against her, though not in name.
Moreover, this is not only a case of a citiFen Dling a
suit against his own Novernment without the latterSs
consent !ut it is of a citiFen Dring an action against a
foreign government without said governmentSs
consent, which renders more o!vious the lack of
:urisdiction of the courts of his country. The #rinci#les
of law !ehind this rule are so elementary and of such
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general acce#tance that we deem it unnecessary to
cite authorities in su##ort thereof then came #arvel
Duildin% Corporation v. Philippine (ar !ama%e
Commission, where res#ondent, a 4nited States
$gency esta!lished to com#ensate damages su=ered
!y the Phili##ines during Horld Har '' was held as
falling within the a!ove doctrine as the suit against it
would eventually !e a charge against or Dnancial
lia!ility of the 4nited States Novernment !ecause ... ,
the Commission has no funds of its own for the
#ur#ose of #aying money :udgments.S The Sy<uia
ruling was again e"#licitly relied u#on in #aruez Lim
v. $elson, involving a com#laint for the recovery of a
motor launch, #lus damages, the s#ecial defense
inter#osed !eing Sthat the vessel !elonged to the
4nited States Novernment, that the defendants
merely acted as agents of said Novernment, and that
the 4nited States Novernment is therefore the real
#arty in interest.S So it was in Philippine +lien
Property +dministration v. Castelo, where it was held
that a suit against $lien Pro#erty Custodian and the
$ttorney Neneral of the 4nited States involving
vested #ro#erty under the Trading with the Anemy $ct
is in su!stance a suit against the 4nited States. To the
same e=ect is Parreno v. #cEranery, as the following
e"cer#t from the o#inion of :ustice TuaFon clearly
shows, S't is a widely acce#ted #rinci#le of
international law, which is made a #art of the law of
the land 2$rticle '', Section - of the Constitution9, that
a foreign state may not !e !rought to suit !efore the
courts of another state or its own courts without its
consent.S Einally, there is "ohnson v. ,urner, an a##eal
!y the defendant, then Commanding Neneral,
Phili##ine Command 2$ir Eorce, with oGce at Clark
Eield9 from a decision ordering the return to #lainti= of
the conDscated military #ayment certiDcates known
as scri# money. 'n reversing the lower court decision,
this Tri!unal, through .ustice Montemayor, relied
on 6yuia v. +lmeda Lopez, e"#laining why it could
not !e sustained.
't !ears stressing at this #oint that the a!ove o!servations do not
confer on the 4nited States of $merica a !lanket immunity for all
acts done !y it or its agents in the Phili##ines. Keither may the
other #etitioners claim that they are also insulated from suit in this
country merely !ecause they have acted as agents of the 4nited
States in the discharge of their oGcial functions.
There is no <uestion that the 4nited States of $merica, like any
other state, will !e deemed to have im#liedly waived its non
sua!ility if it has entered into a contract in its #ro#rietary or #rivate
ca#acity. 't is only when the contract involves its sovereign or
governmental ca#acity that no such waiver may !e im#lied. This
was our ruling in Fnited 6tates o* +merica v. Ruiz,
88
where the
transaction in <uestion dealt with the im#rovement of the wharves
in the naval installation at Su!ic ;ay. $s this was a clearly
governmental function, we held that the contract did not o#erate to
divest the 4nited States of its sovereign immunity from suit. 'n the
words of .ustice &icente $!ad Santos,
The traditional rule of immunity e"em#ts a State from
!eing sued in the courts of another State without its
consent or waiver. This rule is a necessary
conse<uence of the #rinci#les of inde#endence and
e<uality of States. /owever, the rules of 'nternational
Law are not #etriDed@ they are constantly develo#ing
and evolving. $nd !ecause the activities of states
have multi#lied, it has !een necessary to distinguish
them Q !etween sovereign and governmental acts
2:ure im#erii9 and #rivate, commercial and #ro#rietary
acts 2:ure gestionis9. The result is that State immunity
now e"tends only to acts :ure im#erii The restrictive
a##lication of State immunity is now the rule in the
4nited States, the 4nited kingdom and other states in
Hestern Auro#e.
""" """ """
The restrictive a##lication of State immunity is #ro#er
only when the #roceedings arise out of commercial
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transactions of the foreign sovereign, its commercial
activities or economic a=airs. Stated di=erently, a
State may !e said to have descended to the level of
an individual and can thus !e deemed to have tacitly
given its consent to !e sued only when it enters into
!usiness contracts. 't does not a##ly where the
contract relates to the e"ercise of its sovereign
functions. 'n this case the #ro:ects are an integral #art
of the naval !ase which is devoted to the defense of
!oth the 4nited States and the Phili##ines,
indis#uta!ly a function of the government of the
highest order@ they are not utiliFed for nor dedicated
to commercial or !usiness #ur#oses.
The other #etitioners in the cases !efore us all aver they have acted
in the discharge of their oGcial functions as oGcers or agents of the
4nited States. /owever, this is a matter of evidence. The charges
against them may not !e summarily dismissed on their mere
assertion that their acts are im#uta!le to the 4nited States of
$merica, which has not given its consent to !e sued. 'n fact, the
defendants are sought to !e held answera!le for #ersonal torts in
which the 4nited States itself is not involved. 'f found lia!le, they
and they alone must satisfy the :udgment.
'n >este=o v. >ernando,
8-
a !ureau director, acting without any
authority whatsoever, a##ro#riated #rivate land and converted it
into #u!lic irrigation ditches. Sued for the value of the lots invalidly
taken !y him, he moved to dismiss the com#laint on the ground that
the suit was in e=ect against the Phili##ine government, which had
not given its consent to !e sued. This Court sustained the denial of
the motion and held that the doctrine of state immunity was not
a##lica!le. The director was !eing sued in his #rivate ca#acity for a
#ersonal tort.
Hith these considerations in mind, we now #roceed to resolve the
cases at hand.
'''
't is clear from a study of the records of N.3. Ko. *77(* that the
individuallynamed #etitioners therein were acting in the e"ercise of
their oGcial functions when they conducted the !uy!ust o#eration
against the com#lainant and thereafter testiDed against him at his
trial. The said #etitioners were in fact connected with the $ir Eorce
CGce of S#ecial 'nvestigators and were charged #recisely with the
function of #reventing the distri!ution, #ossession and use of
#rohi!ited drugs and #rosecuting those guilty of such acts. 't cannot
for a moment !e imagined that they were acting in their #rivate or
unoGcial ca#acity when they a##rehended and later testiDed
against the com#lainant. 't follows that for discharging their duties
as agents of the 4nited States, they cannot !e directly im#leaded
for acts im#uta!le to their #rinci#al, which has not given its consent
to !e sued. $s we o!served in 6anders v. &eridiano,
85
Niven the oGcial character of the a!ovedescri!ed
letters, we have to conclude that the #etitioners were,
legally s#eaking, !eing sued as oGcers of the 4nited
States government. $s they have acted on !ehalf of
that government, and within the sco#e of their
authority, it is that government, and not the
#etitioners #ersonally, that is res#onsi!le for their
acts.
The #rivate res#ondent invokes $rticle 8(*7 of the Civil Code which
holds the government lia!le if it acts through a s#ecial agent. The
argument, it would seem, is #remised on the ground that since the
oGcers are designated Vs#ecial agents,V the 4nited States
government should !e lia!le for their torts.
There seems to !e a failure to distinguish !etween sua!ility and
lia!ility and a misconce#tion that the two terms are synonymous.
Sua!ility de#ends on the consent of the state to !e sued, lia!ility on
the a##lica!le law and the esta!lished facts. The circumstance that
a state is sua!le does not necessarily mean that it is lia!le@ on the
other hand, it can never !e held lia!le if it does not Drst consent to
!e sued. Lia!ility is not conceded !y the mere fact that the state
has allowed itself to !e sued. Hhen the state does waive its
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sovereign immunity, it is only giving the #lainti= the chance to
#rove, if it can, that the defendant is lia!le.
The said article esta!lishes a rule of liability, not sua!ility. The
government may !e held lia!le under this rule only if it Drst allows
itself to !e sued through any of the acce#ted forms of consent.
Moreover, the agent #erforming his regular functions is not a s#ecial
agent even if he is so denominated, as in the case at !ar. Ko less
im#ortant, the said #rovision a##ears to regulate only the relations
of the local state with its inha!itants and, hence, a##lies only to the
Phili##ine government and not to foreign governments im#leaded in
our courts.
He re:ect the conclusion of the trial court that the answer Dled !y
the s#ecial counsel of the CGce of the Sheri= .udge $dvocate of
Clark $ir ;ase was a su!mission !y the 4nited States government to
its :urisdiction. $s we noted in Republic v. Purisima,
8B
e"#ress
waiver of immunity cannot !e made !y a mere counsel of the
government !ut must !e e=ected through a dulyenacted statute.
Keither does such answer come under the im#lied forms of consent
as earlier discussed.
;ut even as we are certain that the individual #etitioners in N.3. Ko.
*77(* were acting in the discharge of their oGcial functions, we
hesitate to make the same conclusion in N.3. Ko. *78B*. The
contradictory factual allegations in this case deserve in our view a
closer study of what actually ha##ened to the #lainti=s. The record
is too meager to indicate if the defendants were really discharging
their oGcial duties or had actually e"ceeded their authority when
the incident in <uestion occurred. Lacking this information, this
Court cannot directly decide this case. The needed in<uiry must Drst
!e made !y the lower court so it may assess and resolve the
conWicting claims of the #arties on the !asis of the evidence that
has yet to !e #resented at the trial. Cnly after it shall have
determined in what ca#acity the #etitioners were acting at the time
of the incident in <uestion will this Court determine, if still
necessary, if the doctrine of state immunity is a##lica!le.
'n N.3. Ko. +)5+7, #rivate res#ondent Nenove was em#loyed as a
cook in the Main Clu! located at the 4.S. $ir Eorce 3ecreation
Center, also known as the C#en Mess Com#le", at .ohn /ay $ir
Station. $s manager of this com#le", #etitioner Lamachia is
res#onsi!le for eleven diversiDed activities generating an annual
income of Z8 million. 4nder his e"ecutive management are three
service restaurants, a cafeteria, a !akery, a Class &' store, a co=ee
and #antry sho#, a main cashier cage, an administrative oGce, and
a decentraliFed warehouse which maintains a stock level of
Z877,777.77 #er month in resale items. /e su#ervises (6+
em#loyees, one of whom was Nenove, with whom the 4nited States
government has concluded a collective !argaining agreement.
Erom these circumstances, the Court can assume that the
restaurant services o=ered at the .ohn /ay $ir Station #artake of the
nature of a !usiness enter#rise undertaken !y the 4nited States
government in its #ro#rietary ca#acity. Such services are not
e"tended to the $merican servicemen for free as a #er<uisite of
mem!ershi# in the $rmed Eorces of the 4nited States. Keither does
it a##ear that they are e"clusively o=ered to these servicemen@ on
the contrary, it is well known that they are availa!le to the general
#u!lic as well, including the tourists in ;aguio City, many of whom
make it a #oint to visit .ohn /ay for this reason. $ll #ersons availing
themselves of this facility #ay for the #rivilege like all other
customers as in ordinary restaurants. $lthough the #rices are
concededly reasona!le and relatively low, such services are
undou!tedly o#erated for #roDt, as a commercial and not a
governmental activity.
The conse<uence of this Dnding is that the #etitioners cannot invoke
the doctrine of state immunity to :ustify the dismissal of the damage
suit against them !y Nenove. Such defense will not #ros#er even if
it !e esta!lished that they were acting as agents of the 4nited
States when they investigated and later dismissed Nenove. Eor that
matter, not even the 4nited States government itself can claim such
immunity. The reason is that !y entering into the em#loyment
contract with Nenove in the discharge of its #ro#rietary functions, it
im#liedly divested itself of its sovereign immunity from suit.
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;ut these considerations notwithstanding, we hold that the
com#laint against the #etitioners in the court !elow must still !e
dismissed. Hhile sua!le, the #etitioners are nevertheless not lia!le.
't is o!vious that the claim for damages cannot !e allowed on the
strength of the evidence !efore us, which we have carefully
e"amined.
The dismissal of the #rivate res#ondent was decided u#on only after
a thorough investigation where it was esta!lished !eyond dou!t
that he had #olluted the sou# stock with urine. The investigation, in
fact, did not sto# there. Les#ite the deDnitive Dnding of NenoveSs
guilt, the case was still referred to the !oard of ar!itrators #rovided
for in the collective !argaining agreement. This !oard unanimously
aGrmed the Dndings of the investigators and recommended
NenoveSs dismissal. There was nothing ar!itrary a!out the
#roceedings. The #etitioners acted <uite #ro#erly in terminating the
#rivate res#ondentSs em#loyment for his un!elieva!ly nauseating
act. 't is sur#rising that he should still have the temerity to Dle his
com#laint for damages after committing his utterly disgusting
o=ense.
Concerning N.3. Ko. +667+, we also Dnd that the !ar!ersho#s
su!:ect of the concessions granted !y the 4nited States government
are commercial enter#rises o#erated !y #rivate #ersonSs. They are
not agencies of the 4nited States $rmed Eorces nor are their
facilities demanda!le as a matter of right !y the $merican
servicemen. These esta!lishments #rovide for the grooming needs
of their customers and o=er not only the !asic haircut and shave 2as
re<uired in most military organiFations9 !ut such other amenities as
sham#oo, massage, manicure and other similar indulgences. $nd all
for a fee. 'nterestingly, one of the concessionaires, #rivate
res#ondent &alencia, was even sent a!road to im#rove his tonsorial
!usiness, #resuma!ly for the !eneDt of his customers. Ko less
signiDcantly, if not more so, all the !ar!ersho# concessionaires are
under the terms of their contracts, re<uired to remit to the 4nited
States government D"ed commissions in consideration of the
e"clusive concessions granted to them in their res#ective areas.
This !eing the case, the #etitioners cannot #lead any immunity from
the com#laint Dled !y the #rivate res#ondents in the court !elow.
The contracts in <uestion !eing decidedly commercial, the
conclusion reached in the Fnited 6tates o* +merica v. Ruiz case
cannot !e a##lied here.
The Court would have directly resolved the claims against the
defendants as we have done in N.3. Ko. +)5+7, e"ce#t for the
#aucity of the record in the case at hand. The evidence of the
alleged irregularity in the grant of the !ar!ersho# concessions is not
!efore us. This means that, as in N.3. Ko. *78B*, the res#ondent
court will have to receive that evidence Drst, so it can later
determine on the !asis thereof if the #lainti=s are entitled to the
relief they seek. $ccordingly, this case must also !e remanded to
the court !elow for further #roceedings.
'&
There are a num!er of other cases now #ending !efore us which
also involve the <uestion of the immunity of the 4nited States from
the :urisdiction of the Phili##ines. This is cause for regret, indeed, as
they mar the traditional friendshi# !etween two countries long allied
in the cause of democracy. 't is ho#ed that the socalled VirritantsV in
their relations will !e resolved in a s#irit of mutual accommodation
and res#ect, without the inconvenience and as#erity of litigation
and always with :ustice to !oth #arties.
H/A3AEC3A, after considering all the a!ove #remises, the Court
here!y renders :udgment as follows,
(. 'n N.3. Ko. +667+, the #etition is L'SM'SSAL and
the res#ondent :udge is directed to #roceed with the
hearing and decision of Civil Case Ko. 5++8. The
tem#orary restraining order dated Lecem!er ((,
()*6, is L'ETAL.
8. 'n N.3. Ko. +)5+7, the #etition is N3$KTAL and
Civil Case Ko. *8)328)*9 is L'SM'SSAL.
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-. 'n N.3. Ko. *77(*, the #etition is N3$KTAL and
Civil Case Ko. ((BC*+ is L'SM'SSAL. The tem#orary
restraining order dated Ccto!er (5, ()*+, is made
#ermanent.
5. 'n N.3. Ko. *78B*, the #etition is L'SM'SSAL and
the res#ondent court is directed to #roceed with the
hearing and decision of Civil Case Ko. 5))6. The
tem#orary restraining order dated Ccto!er 8+, ()*+,
is L'ETAL.
$ll without any #ronouncement as to costs.
SC C3LA3AL.
7IG0ST.
1ACTS. These cases have !een consolidated !ecause they
all involve the doctrine of state immunity. 'n N3 Ko. +667+, The
#rivate res#ondents are suing several oGcers of the 4S $ir Eorce in
Clark $ir ;ase in connection with the !idding conducted !y them for
contracts for !ar!er services in the said !ase which was won !y a
certain LiFon. The res#ondents wanted to cancel the award to the
!id winner !ecause they claimed that LiFon had included in his !id
an area not included in the invitation to !id, and su!se<uently, to
conduct a re!idding.
'n N3 Ko. +)5+7, Ea!ian Nenove Dled a com#laint for
damages against #etitioners Lamachia, ;elsa, Cartalla and Crascion
for his dismissal as cook in the 4S $ir Eorce 3ecreation Center at
Cam# .ohn /ay $ir Station in;aguioCity. 't had !een ascertained
after investigation, from the testimony of ;elsa, Cartalla and
Crascion, that Nenove had #oured urine into the sou# stock used in
cooking the vegeta!les served to the clu! customers. Lamachia, as
clu! manager, sus#ended him and thereafter referred the case to a
!oard of ar!itrators conforma!ly to the collective !argaining
agreement !etween the center and its em#loyees. The !oard
unanimously found him guilty and recommended his dismissal.
Nenoves reaction was to Dle his com#laint against the individual
#etitioners.

'n N3 Ko. *77(*, Luis ;autista, who was em#loyed as a
!arracks !oy in Cano C Lonnell, an e"tension of Clark $ir ;as, was
arrested following a !uy!ust o#eration conducted !y the individual
#etitioners who are oGcers of the 4S $ir Eorce and s#ecial agents of
the $ir Eorce CGce of S#ecial 'nvestigators. Cn the !asis of the
sworn statements made !y them, an information for violation of 3.$.
658B, otherwise known as the Langerous Lrugs $ct, was Dled
against ;autista in the 3TC of Tarlac. Said oGcers testiDed against
him at his trial. ;autista was dismissed from his em#loyment. /e
then Dled a com#laint against the individual #etitioners claiming
that it was !ecause of their acts that he was removed.
'n N3 Ko. *78B*, a com#laint for damages was Dled !y the
#rivate res#ondents against the herein #etitioners 2e"ce#t the4S9,
for in:uries sustained !y the #lainti=s as a result of the acts of the
defendants. There is a conWict of factual allegations here. $ccording
to the #lainti=s, the defendants !eat them u#, handcu=ed them and
unleashed dogs on them which !it them in several #arts of their
!odies and caused e"tensive in:uries to them. The defendants deny
this and claim that #lainti=s were arrested for theft and were !itten
!y the dogs !ecause they were struggling and resisting arrest. 'n a
motion to dismiss the com#laint, the4S and the individually named
defendants argued that the suit was in e=ect a suit against the4S,
which had not given its consent to !e sued.
ISS?0. Hhether the defendants were also immune from suit under
the 3P4S ;ases Treaty for acts done !y them in the #erformance of
their oGcial duties.
B067. The rule that a State may not !e sued without its consent is
one of the generally acce#ted #rinci#les of international law that
were have ado#ted as #art of the law of our land. Aven without such
aGrmation, we would still !e !ound !y the generally acce#ted
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#rinci#les of international law under the doctrine of incor#oration.
4nder this doctrine, as acce#ted !y the ma:ority of the states, such
#rinci#les are deemed incor#orated in the law of every civiliFed
state as a condition and conse<uence of its mem!ershi# in the
society of nations. $ll states are sovereign e<uals and cannot assert
:urisdiction over one another.
Hhile the doctrine a##ears to #rohi!it only suits against the
state without its consent, it is also a##lica!le to com#laints Dled
against oGcials of the states for acts allegedly #erformed !y them
in the discharge of their duties. The rule is that if the :udgment
against such oGcials will re<uire the state itself to #erform an
aGrmative act to satisfy the same, the suit must !e regarded as
against the state although it has not !een formally im#leaded.

Hhen the government enters into a contract, it is deemed to
have descended to the level of the other contracting #arty and
divested of its sovereign immunity from suit with its im#lied
consent. 'n the case o4S, the customary law of international law on
state immunity is e"#ressed with more s#eciDcity in the 3P4S
;ases Treaty. There is no <uestion that the4S, like any other state,
will !e deemed to have im#liedly waived its nonsua!ility if it has
entered into a contract in its #ro#rietory or #rivate ca#acity. 't is
only when the contract involves its sovereign or governmental
ca#acity that no such waiver may !e im#lied.
't is clear from a study of the records of N3 Ko. *77(* that
the #etitioners therein were acting in the e"ercise of their oGcial
functions when they conducted the !uy!ust o#erations against the
com#lainant and thereafter testiDed against him at his trial. 't
follows that for discharging their duties as agents of the4S, they
cannot !e directly im#leaded for acts im#uta!le to their #rinci#al,
which has not given its consent to !e sued.
$s for N3 Ko. *77(*, the record is too meager to indicate
what really ha##ened. The needed in<uiry Drst !e made !y the
lower court so it may assess and resolve the conWicting claims of
the #arties on the !asis of evidence that has yet to !e #resented at
the trial.
5ulin%
1) 4S &S N4'KTC 2N3 Ko +667+9
The court Dnds the !ar!ersho#s su!:ect to the concessions
granted !y the 4S government to !e commercial enter#rises
o#erated !y #rivate #ersons. The #etitioners cannot #lead any
immunity from the com#laint, the contract in <uestion !eing
decidedly commercial. Thus, the #etition is L'SM'SSAL and the
lower court directed to #roceed with the hearing and decision of the
case.
2) 4S &S 3CL3'NC 2N3 Ko +)5+79
The restaurant services o=ered at the .ohn /ay Station
o#erated for #roDt as a commercial and not a government activity.
The #etitioners cannot invoke the doctrine of self immunity to :ustify
the dismissal of the damage suit Dled !y Nenove. Kot even the 4S
government can claim such immunity !ecause !y entering into the
em#loyment contract with Neneove in the discharge of its
#ro#rietary functions, it im#liedly divested itself of its sovereign
immunity from suit.
Still, the court holds that the com#laint against #etitioners in
the lower court !e dismissed. There was nothing ar!itrary a!out the
#roceedings in the dismissal of Nenove, the #etitioner acted <uite
#ro#erly in terminating the #rivate res#ondents em#loyment for his
un!elieva!ly nauseating act of #olluting the sou# stock with urine.
3) 4S &S CA;$LLCS 2N3 Ko *77(*9
't was clear that the individuallynamed #etitioners were
acting in the e"ercise of their oGcial functions when they conducted
the !uy!ust o#eration and thereafter testiDed against the
com#lainant. Eor discharging their duties as agents of the 4nited
States, thay cannot !e directly im#leaded for acts im#uta!le to their
#rinci#al, which has not given its consent to !e sued. The
conclusion of the trial court that the answer Dled !y the s#ecial
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counsel of Clark $ir ;ase was a su!mission of the 4S government to
its :urisdiction is re:ected. A"#ress waiver cannot !e made !y a
mere counsel of the government !ut must !e e=ected through a
dulyenacted statute. Keither does it come under the im#lied form
of consent. Thus, the #etition is granted and the civil case Dled in
the lower court dismissed.
4) 4S &S $L$3CCK &A3N$3$ 2N3 Ko *78B*9
The contradictory factual allegations in this case need a
closer study of what actually ha##ened. The record were too
meager to indicate that the defendants were really discharging their
oGcial duties or had actually e"ceeded their authority when the
incident occurred. Cnly after the lower court shall have determined
in what ca#acity the #etitioners were acting will the court
determine, if still necessary, if the doctrine of state immunity is
a##lica!le.
S?P50M0 C9?5T
Manila
SACCKL L'&'S'CK
G.5. !o. 6@44983 7ece'*er 1) 1989
SP9?S0S 39S0 19!TA!I66A A!7 VI5GI!IA
19!TA!I66A) #etitioners,
vs.
B9!95A"60 I!9C0!CI9 7. MA6IAMA! an# !ATI9!A6
I55IGATI9! A7MI!IST5ATI9!) res#ondents.
G.5. !o. 6@81A24 7ece'*er 1) 1989
!ATI9!A6 I55IGATI9! A7MI!IST5ATI9!) a##ellant,
vs.
SP9?S0S 39S0 19!TA!I66A an# VI5GI!IA
19!TA!I66A) a##ellees.
Cecilio &. 6uarez, "r. *or 6pouses >ontanilla.
>elicisimo C. &illaGor *or $)+.

PA5AS) J.:
'n N.3. Ko. LBB)6-, the #etition for review on certiorari seeks the
aGrmance of the decision dated March 87, ()*7 of the then Court
of Eirst 'nstance of Kueva Aci:a, ;ranch &''', at San .ose City and its
modiDcation with res#ect to the denial of #etitionerSs claim for moral
and e"em#lary damages and attorneys fees.
'n N.3. Ko. 6(75B, res#ondent Kational 'rrigation $dministration
seeks the reversal of the aforesaid decision of the lower court. The
original a##eal of this case !efore the Court of $##eals was certiDed
to this Court and in the resolution of .uly +, ()*8, it was docketed
with the aforecited num!er. $nd in the resolution of $#ril -, this
case was consolidated with N.3. Ko. BB)6-.
't a##ears that on $ugust 8(, ()+6 at a!out 6,-7 P.M., a #icku#
owned and o#erated !y res#ondent Kational 'rrigation
$dministration, a government agency !earing Plate Ko. 'K6B(, then
driven oGcially !y /ugo Narcia, an em#loyee of said agency as its
regular driver, !um#ed a !icycle ridden !y Erancisco Eontanilla, son
of herein #etitioners, and 3estituto Leligo, at Maasin, San .ose City
along the Maharlika /ighway. $s a result of the im#act, Erancisco
Eontanilla and 3estituto Leligo were in:ured and !rought to the San
.ose City Amergency /os#ital for treatment. Eontanilla was later
transferred to the Ca!anatuan Provincial /os#ital where he died.
Narcia was then a regular driver of res#ondent Kational 'rrigation
$dministration who, at the time of the accident, was a licensed
#rofessional driver and who <ualiDed for em#loyment as such
regular driver of res#ondent after having #assed the written and
oral e"aminations on traGc rules and maintenance of vehicles given
!y Kational 'rrigation $dministration authorities.
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The within #etition is thus an o=shot of the action 2Civil Case Ko.
S.CB69 instituted !y #etitionerss#ouses on $#ril (+, ()+* against
res#ondent K'$ !efore the then Court of Eirst 'nstance of Kueva
Aci:a, ;ranch &''' at San .ose City, for damages in connection with
the death of their son resulting from the aforestated accident.
$fter trial, the trial court rendered :udgment on March 87, ()*7
which directed res#ondent Kational 'rrigation $dministration to #ay
damages 2death !eneDts9 and actual e"#enses to #etitioners. The
dis#ositive #ortion of the decision reads thus,
. . . . . .udgment is here rendered ordering the
defendant Kational 'rrigation $dministration to #ay to
the heirs of the deceased P(8,777.77 for the death of
Erancisco Eontanilla@ P-,-*).77 which the #arents of
the deceased had s#ent for the hos#italiFation and
!urial of the deceased Erancisco Eontanilla@ and to
#ay the costs. 2;rief for the #etitioners s#ouses
Eontanilla, #. 5@ 3ollo, #. (-89
3es#ondent Kational 'rrigation $dministration Dled on $#ril 8(,
()*7, its motion for reconsideration of the aforesaid decision which
res#ondent trial court denied in its Crder of .une (-, ()*7.
3es#ondent Kational 'rrigation $dministration thus a##ealed said
decision to the Court of $##eals 2C.$.N.3. Ko. 6+8-+ 39 where it
Dled its !rief for a##ellant in su##ort of its #osition.
'nstead of Dling the re<uired !rief in the aforecited Court of $##eals
case, #etitioners Dled the instant #etition with this Court.
The sole issue for the resolution of the Court is, Hhether or not the
award of moral damages, e"em#lary damages and attorneySs fees is
legally #ro#er in a com#laint for damages !ased on <uasidelict
which resulted in the death of the son of herein #etitioners.
Petitioners allege,
(. The award of moral damages is s#eciDcally
allowa!le. under #aragra#h - of $rticle 8876 of the
Kew Civil Code which #rovides that the s#ouse,
legitimate and illegitimate descendants and
ascendants of the deceased may demand moral
damages for mental anguish !y reason of the death
of the deceased. Should moral damages !e granted,
the award should !e made to each of #etitioners
s#ouses individually and in varying amounts
de#ending u#on #roof of mental and de#th of
intensity of the same, which should not !e less than
PB7,777.77 for each of them.
8. The decision of the trial court had made an
im#ression that res#ondent Kational 'rrigation
$dministration acted with gross negligence !ecause
of the accident and the su!se<uent failure of the
Kational 'rrigation $dministration #ersonnel including
the driver to sto# in order to give assistance to the,
victims. Thus, !y reason of the gross negligence of
res#ondent, #etitioners !ecome entitled to e"em#lary
damages under $rts. 88-( and 888) of the Kew Civil
Code.
-. Petitioners are entitled to an award of attorneySs
fees, the amount of which 287R9 had !een suGciently
esta!lished in the hearing of May 8-, ()+).
5. This #etition has !een Dled only for the #ur#ose of
reviewing the Dndings of the lower court u#on which
the disallowance of moral damages, e"em#lary
damages and attorneySs fees was !ased and not for
the #ur#ose of distur!ing the other Dndings of fact
and conclusions of law.
The Solicitor Neneral, taking u# the cudgels for #u!lic res#ondent
Kational 'rrigation $dministration, contends thus,
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(. The Dling of the instant #etition is rot #ro#er in
view of the a##eal taken !y res#ondent Kational
'rrigation $dministration to the Court of $##eals
against the :udgment sought to !e reviewed. The
focal issue raised in res#ondentSs a##eal to the Court
of $##eals involves the <uestion as to whether or not
the driver of the vehicle that !um#ed the victims was
negligent in his o#eration of said vehicle. 't thus
!ecomes necessary that !efore #etitionersS claim for
moral and e"em#lary damages could !e resolved,
there should Drst !e a Dnding of negligence on the
#art of res#ondentSs em#loyeedriver. 'n this regard,
the Solicitor Neneral alleges that the trial court
decision does not categorically contain such Dnding.
8. The Dling of the V$##earance and 4rgent Motion
Eor Leave to Eile Plainti=$##elleeSs ;riefV dated
Lecem!er 8*, ()*( !y #etitioners in the a##eal 2C$
N.3. Ko. 6+8-+3@ and N. 3. Ko.6(75B9 of the
res#ondent Kational 'rrigation $dministration !efore
the Court of $##eals, is an e"#licit admission of said
#etitioners that the herein #etition, is not #ro#er.
'nconsistent #rocedures are manifest !ecause while
#etitioners <uestion the Dndings of fact in the Court of
$##eals, they #resent only the <uestions of law
!efore this Court which #osture conDrms their
admission of the facts.
-. The fact that the #arties failed to agree on whether
or not negligence caused the vehicular accident
involves a <uestion of fact which #etitioners should
have !rought to the Court of $##eals within the
reglementary #eriod. /ence, the decision of the trial
court has !ecome Dnal as to the #etitioners and for
this reason alone, the #etition should !e dismissed.
5. 3es#ondent .udge acted within his :urisdiction,
sound discretion and in conformity with the law.
B. 3es#ondents do not assail #etitionersS claim to
moral and e"em#lary damages !y reason of the shock
and su!se<uent illness they su=ered !ecause of the
death of their son. 3es#ondent Kational 'rrigation
$dministration, however, avers that it cannot !e held
lia!le for the damages !ecause it is an agency of the
State #erforming governmental functions and driver
/ugo Narcia was a regular driver of the vehicle, not a
s#ecial agent who was #erforming a :o! or act foreign
to his usual duties. /ence, the lia!ility for the tortious
act should. not !e !orne !y res#ondent government
agency !ut !y driver Narcia who should answer for
the conse<uences of his act.
6. Aven as the trial court touched on the failure or
la"ity of res#ondent Kational 'rrigation $dministration
in e"ercising due diligence in the selection and
su#ervision of its em#loyee, the matter of due
diligence is not an issue in this case since driver
Narcia was not its s#ecial agent !ut a regular driver of
the vehicle.
The sole legal <uestion on whether or not #etitioners may !e
entitled to an award of moral and e"em#lary damages and
attorneySs fees can very well !e answered with the a##lication of
$rts. 8(+6 and 8(*7 of theKew Civil Code.
$rt. 8(+6 thus #rovides,
Hhoever !y act omission causes damage to another,
there !eing fault or negligence, is o!liged to #ay for
damage done. Such fault or negligence, if there is no
#ree"isting cotractual relation !etween the #arties, is
called a <uasidelict and is governed !y the #rovisions
of this Cha#ter
Paragra#hs B and 6 of $rt. 8( *7 read as follows,
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Am#loyers shall !e lia!le for the damages caused !y
their em#loyees and household hel#ers acting within
the sco#e of their assigned tasks, even the though
the former are not engaged in any !usiness or
industry.
The State is res#onsi!le in like manner when it acts
through a s#ecial agent.@ !ut not when the damage
has !een caused !y the oGcial to whom the task
done #ro#erly #ertains, in which case what is
#rovided in $rt. 8(+6 shall !e a##lica!le.
The lia!ility of the State has two as#ects. namely,
(. 'ts #u!lic or governmental as#ects where it is lia!le
for the tortious acts of s#ecial agents only.
8. 'ts #rivate or !usiness as#ects 2as when it engages
in #rivate enter#rises9 where it !ecomes lia!le as an
ordinary em#loyer. 2#. )6(, Civil Code of the
Phili##ines@ $nnotated, Paras@ .-74 ?d. 9.
'n this :urisdiction, the State assumes a limited lia!ility for the
damage caused !y the tortious acts or conduct of its s#ecial agent.
4nder the afore<uoted #aragrah 6 of $rt. 8(*7, the State has
voluntarily assumed lia!ility for acts done through s#ecial agents.
The StateSs agent, if a #u!lic oGcial, must not only !e s#ecially
commissioned to do a #articular task !ut that such task must !e
foreign to said oGcialSs usual governmental functions. 'f the StateSs
agent is not a #u!lic oGcial, and is commissioned to #erform non
governmental functions, then the State assumes the role of an
ordinary em#loyer and will !e held lia!le as such for its agentSs tort.
Hhere the government commissions a #rivate individual for a
s#ecial governmental task, it is acting through a s#ecial agent
within the meaning of the #rovision. 2Torts and Lamages, Sangco, #.
-5+, ()*5 Ad.9
Certain functions and activities, which can !e #erformed only !y the
government, are more or less generally agreed to !e
VgovernmentalV in character, and so the State is immune from tort
lia!ility. Cn the other hand, a service which might as well !e
#rovided !y a #rivate cor#oration, and #articularly when it collects
revenues from it, the function is considered a V#ro#rietaryV one, as
to which there may !e lia!ility for the torts of agents within the
sco#e of their em#loyment.
The Kational 'rrigation $dministration is an agency of the
government e"ercising #ro#rietary functions, !y e"#ress #rovision of
3e#. $ct Ko. -67(. Section ( of said $ct #rovides,
Section (. Kame and domicile.$ body corporate is
here!y created which shall !e known as the Kational
'rrigation $dministration, hereinafter called the K'$ for
short, which shall !e organiFed immediately after the
a##roval of this $ct. 't shall have its #rinci#al seat of
!usiness in the City of Manila and shall have
re#resentatives in all #rovinces for the #ro#er conduct
of its !usiness.
Section 8 of said law s#ells out some of the K'$Ss #ro#rietary
functions. Thus
Sec. 8. Powers and ob=ectives.The K'$ shall have the
following #owers and o!:ectives,
2a9 " " " " " " " " " " " " " " " " " "
2!9 " " " " " " " " " " " " " " " " " "
2c9 To collect from the users of each irrigation system
constructed !y it such fees as may !e necessary to
Dnance the continuous o#eration of the system and
reim!urse within a certain #eriod not less than
twentyDve years cost of construction thereof@ and
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2d9 To do all such other tthings and to transact all
such !usiness as are directly or indirectly necessary,
incidental or conducive to the attainment of the
a!ove o!:ectives.
'ndu!ita!ly, the K'$ is a government cor#oration with :uridical
#ersonality and not a mere agency of the government. Since it is a
cor#orate !ody #erforming nongovernmental functions, it now
!ecomes lia!le for the damage caused !y the accident resulting
from the tortious act of its driverem#loyee. 'n this #articular case,
the K'$ assumes the res#onsi!ility of an ordinary em#loyer and as
such, it !ecomes answera!le for damages.
This assum#tion of lia!ility, however, is #redicated u#on the
e"istence of negligence on the #art of res#ondent K'$. The
negligence referred to here is the negligence of su#ervision.
$t this :uncture, the matter of due diligence on the #art of
res#ondent K'$ !ecomes a crucial issue in determining its lia!ility
since it has !een esta!lished that res#ondent is a government
agency #erforming #ro#rietary functions and as such, it assumes
the #osture of an ordinary em#loyer which, under Par. B of $rt.
8(*7, is res#onsi!le for the damages caused !y its em#loyees
#rovided that it has failed to o!serve or e"ercise due diligence in
the selection and su#ervision of the driver.
't will !e noted from the assailed decision of the trial court that Vas a
result of the im#act, Erancisco Eontanilla wasthrown to a distance
20 meters away *rom the point o* impact while 3estituto Leligo was
thrown a little !it further away. The im#act took #lace almost at the
edge of the cemented #ortion of the road.V 2Am#hasis su##lied,9
0#age 86, 3ollo1
The lower court further declared that Va s#eeding vehicle coming in
contact with a #erson causes force and im#act u#on the vehicle that
anyone in the vehicle cannot fail to notice. $s a matter of fact, the
im#act was so strong as shown !y the fact that the vehicle suHered
dents on the ri%ht side o* the radiator %uard, the hood, the *ender
and a crack on the radiator as shown by the investi%ation
report 2A"hi!it VAV9. 2Am#hasis su##lied9 0#age 8), 3ollo1
't should !e em#hasiFed that the accident ha##ened along the
Maharlika Kational 3oad within the city limits of San .ose City, an
ur!an area. Considering the fact that the victim was thrown B7
meters away from the #oint of im#act, there is a strong indication
that driver Narcia was driving at a high s#eed. This is conDrmed !y
the fact that the #icku# su=ered su!stantial and heavy damage as
a!ovedescri!ed and the fact that the K'$ grou# was then Vin a
hurry to reach the cam#site as early as #ossi!leV, as shown !y their
not sto##ing to Dnd out what they !um#ed as would have !een
their normal and initial reaction.
Avidently, there was negligence in the su#ervision of the driver for
the reason that they were travelling at a high s#eed within the city
limits and yet the su#ervisor of the grou#, Aly Salonga, failed to
caution and make the driver o!serve the #ro#er and allowed s#eed
limit within the city. 4nder the situation, such negligence is further
aggravated !y their desire to reach their destination without even
checking whether or not the vehicle su=ered damage from the
o!:ect it !um#ed, thus showing im#rudence and reckelessness on
the #art of !oth the driver and the su#ervisor in the grou#.
SigniDcantly, this Court has ruled that even if the em#loyer can
#rove the diligence in the selection and su#ervision 2the latter
as#ect has not !een esta!lished herein9 of the em#loyee, still if he
ratiDes the wrongful acts, or take no ste# to avert further damage,
the em#loyer would still !e lia!le. 2Ma"ion vs. Manila 3ailroad Co.,
55 Phil. B)+9.
Thus, too, in the case of &da. de ;onifacio vs. ;.L.T. ;us Co. 2L
86*(7, $ugust -(, ()+7, -5 SC3$ 6(*9, this Court held that a driver
should !e es#ecially watchful in antici#ation of others who may !e
using the highway, and his failure to kee# a #ro#er look out for
reasons and o!:ects in the line to !e traversed constitutes
negligence.
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Considering the foregoing, res#ondent K'$ is here!y directed to #ay
herein #etitionerss#ouses the amounts of P(8,777.77 for the death
of Erancisco Eontanilla@ P-,-*).77 for hos#italiFation and !urial
e"#enses of the aforenamed deceased@ P-7,777.77 as moral
damages@ P*,777.77 as e"em#lary damages and attorneySs fees of
87R of the total award.
SC C3LA3AL.
7IG0ST.
E$CTS, Kational 'rrigation $dministration 2K'$9, a government
agency, was held lia!le for damages resulting to the death of the
son of herein #etitioner s#ouses caused !y the fault andYor
negligence of the driver of the said agency. K'$ maintains that it is
not lia!le for the act of its driver !ecause the former does not
#erform #rimarily #ro#rietorshi# functions !ut governmental
functions.
'SS4A, Hhether or not K'$ may !e held lia!le for damages caused
!y its driver.
/ALL, Xes. K'$ is a government agency with a cor#orate #ersonality
se#arate and distinct from the government, !ecause its community
services are only incidental functions to the #rinci#al aim which is
irrigation of lands, thus, making it an agency with #ro#rietary
functions governed !y Cor#oration Law and is lia!le for actions of
their em#loyees.
TBI57 7IVISI9!
FG.5. !o. 1492A-) 1e*ruar -3) -A11G
AI5 T5A!SP95TATI9! 911IC0) P0TITI9!05) VS. SP9?S0S
7AVI7
H
A!7 06IS0A 5AM9S) 50SP9!70!TS.
7 0 C I S I 9 !
"05SAMI!) 3..
The StateSs immunity from suit does not e"tend to the #etitioner
!ecause it is an agency of the State engaged in an enter#rise that is
far from !eing the StateSs e"clusive #rerogative.
4nder challenge is the decision #romulgated on May (5, 877-,
0(1
!y
which the Court of $##eals 2C$9 aGrmed with modiDcation the
decision rendered on Ee!ruary 8(, 877( !y the 3egional Trial Court,
;ranch 6( 23TC9, in ;aguio City in favor of the res#ondents.
081
Antece#ents
S#ouses Lavid and Alisea 3amos 2res#ondents9 discovered that a
#ortion of their land registered under Transfer CertiDcate of Title Ko.
TB**)5 of the ;aguio City land records with an area of )*B s<uare
meters, more or less, was !eing used as #art of the runway and
running shoulder of the Loakan $ir#ort !eing o#erated !y #etitioner
$ir Trans#ortation CGce 2$TC9. Cn $ugust ((, ())B, the
res#ondents agreed after negotiations to convey the a=ected
#ortion !y deed of sale to the $TC in consideration of the amount of
P++*,(B7.77. /owever, the $TC failed to #ay des#ite re#eated
ver!al and written demands.
Thus, on $#ril 8), ())*, the res#ondents Dled an action for
collection against the $TC and some of its oGcials in the 3TC
2docketed as Civil Case Ko. 57(+3 and entitled 6pouses !avid and
?lisea Ramos v. +ir ,ransportation ;Ice, Capt. PanAlo &illaruel,
Een. Carlos ,ane%a, and #r. Cesar de "esus9.
'n their answer, the $TC and its codefendants invoked as an
aGrmative defense the issuance of Proclamation Ko. (-B*, where!y
President Marcos had reserved certain #arcels of land that included
the res#ondentsS a=ected #ortion for use of the Loakan $ir#ort. They
asserted that the 3TC had no :urisdiction to entertain the action
without the StateSs consent considering that the deed of sale had
!een entered into in the #erformance of governmental functions.
Cn Kovem!er (7, ())*, the 3TC denied the $TCSs motion for a
#reliminary hearing of the aGrmative defense.
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$fter the 3TC likewise denied the $TCSs motion for reconsideration
on Lecem!er (7, ())*, the $TC commenced a s#ecial civil action
for certiorari in the C$ to assail the 3TCSs orders. The C$ dismissed
the #etition for certiorari, however, u#on its Dnding that the assailed
orders were not tainted with grave a!use of discretion.
0-1
Su!se<uently, Ee!ruary 8(, 877(, the 3TC rendered its decision on
the merits,
051
dis#osing,
H/A3AEC3A, the :udgment is rendered C3LA3'KN the defendant
$ir Trans#ortation CGce to #ay the #lainti=s L$&'L and AL'SA$
3$MCS the following, 2(9 The amount of P++*,(B7.77 !eing the
value of the #arcel of land a##ro#riated !y the defendant $TC as
em!odied in the Leed of Sale, #lus an annual interest of (8R from
$ugust ((, ())B, the date of the Leed of Sale until fully #aid@ 289
The amount of P(B7,777.77 !y way of moral damages and
P(B7,777.77 as e"em#lary damages@ 2-9 the amount of PB7,777.77
!y way of attorneySs fees #lus P(B,777.77 re#resenting the (7, more
or less, court a##earances of #lainti=Ss counsel@ 259 The costs of this
suit.
SC C3LA3AL.
'n due course, the $TC a##ealed to the C$, which aGrmed the 3TCSs
decision on May (5, 877-,
0B1
viz,
'K &'AH CE $LL T/A EC3ANC'KN, the a##ealed decision is here!y
$EE'3MAL, with MCL'E'C$T'CK that the awarded cost therein is
deleted, while that of moral and e"em#lary damages is reduced to
P-7,777.77 each, and attorneySs fees is lowered to P(7,777.77.
Ko cost.
SC C3LA3AL.
/ence, this a##eal !y #etition for review on certiorari.
Issue
The only issue #resented for resolution is whether the $TC could !e
sued without the StateSs consent.
5ulin%
The #etition for review has no merit.
The immunity of the State from suit, known also as the doctrine of
sovereign immunity or nonsua!ility of the State, is e"#ressly
#rovided in $rticle %&' of the ()*+ Constitution, viz,
Section -. The State may not !e sued without its consent.
The immunity from suit is !ased on the #olitical truism that the
State, as a sovereign, can do no wrong. Moreover, as the eminent
.ustice /olmes said inKawananakoa v. Polyblank:
061
The territory 0of /awaii1, of course, could waive its e"em#tion
2Smith v. 3eeves, (+* 4S 5-6, 55 L ed ((57, 87 Su#. Ct. 3e#. )()9,
and it took no o!:ection to the #roceedings in the cases cited if it
could have done so. """ ;ut in the case at !ar it did o!:ect, and the
<uestion raised is whether the #lainti=s were !ound to yield. Some
dou!ts have !een e"#ressed as to the source of the immunity of a
sovereign #ower from suit without its own #ermission, !ut the
answer has !een #u!lic #ro#erty since !efore the days of
/o!!es. Leviathan, cha#. 86, 8. A soverei%n is e&e'(t fro'
suit) not *ecause of an for'al conce(tion or o*solete
theor) *ut on the lo%ical an# (ractical %roun# that there
can *e no le%al ri%ht as a%ainst the authorit that 'a+es the
la, on ,hich the ri%ht #e(en#s. VCar on peut bien recevoir loy
dJautruy, mais il est impossible par nature de se donner loy.V
;odin, Republiue, (, cha#. *, ed. (68), #. (-8@ Sir .ohn Aliot, !e
"ure #aiestatis, cha#. -. $emo suo statuto li%atur necessitative.
;aldus, !e Le%. et Const. !i%na &o', 8. ed. (5)6, fol. B(!, ed. (B-),
fol. 6(.
0+1
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Practical considerations dictate the esta!lishment of an immunity
from suit in favor of the State. Ctherwise, and the State is sua!le at
the instance of every other individual, government service may !e
severely o!structed and #u!lic safety endangered !ecause of the
num!er of suits that the State has to defend against.
0*1
Several
:ustiDcations have !een o=ered to su##ort the ado#tion of the
doctrine in the Phili##ines, !ut that o=ered in Providence
(ashin%ton )nsurance Co. v. Republic o* the Philippines
0)1
is Vthe
most acce#ta!le e"#lanation,V according to Eather ;ernas, a
recogniFed commentator on Constitutional Law,
0(71
to wit,
0$1 continued adherence to the doctrine of nonsua!ility is not to !e
de#lored for as against the inconvenience that may !e caused
#rivate #arties, the loss of governmental eGciency and the o!stacle
to the #erformance of its multifarious functions are far greater if
such a fundamental #rinci#le were a!andoned and the availa!ility of
:udicial remedy were not thus restricted. Hith the wellknown
#ro#ensity on the #art of our #eo#le to go to court, at the least
#rovocation, the loss of time and energy re<uired to defend against
law suits, in the a!sence of such a !asic #rinci#le that constitutes
such an e=ective o!stacle, could very well !e imagined.
$n unincor#orated government agency without any se#arate
:uridical #ersonality of its own en:oys immunity from suit !ecause it
is invested with an inherent #ower of sovereignty. $ccordingly, a
claim for damages against the agency cannot #ros#er@ otherwise,
the doctrine of sovereign immunity is violated.
0((1
/owever, the need
to distinguish !etween an unincor#orated government agency
#erforming governmental function and one #erforming #ro#rietary
functions has arisen. The immunity has !een u#held in favor of the
former !ecause its function is governmental or incidental to such
function@
0(81
it has not !een u#held in favor of the latter whose
function was not in #ursuit of a necessary function of government
!ut was essentially a !usiness.
0(-1
Should the doctrine of sovereignty immunity or nonsua!ility of the
State !e e"tended to the $TCI
'n its challenged decision,
0(51
the C$ answered in the negative,
holding,
Cn the Drst assignment of error, a##ellants seek to im#ress u#on 4s
that the su!:ect contract of sale #artook of a governmental
character. +propos, the lower court erred in a##lying the /igh
CourtSs ruling in $ational +irports Corporation vs. ,eodoro 2-. Phil.
/01 0.-2/19, arguing that in ,eodoro, the matter involved the
collection of landing and #arking fees which is a #ro#rietary
function, while the case at !ar involves the maintenance and
o#eration of aircraft and air navigational facilities and services
which are governmental functions.
He are not #ersuaded.
Contrary to a##ellantsS conclusions, it was not merely the collection
of landing and #arking fees which was declared as #ro#rietary in
nature !y the /igh Court in ,eodoro, !ut management and
maintenance of air#ort o#erations as a whole, as well. Thus, in the
much later case of Civil +eronautics +dministration vs. Court o*
+ppeals 3.45 6CR+ /7 8.-779:, the Su#reme Court, reiterating the
#ronouncements laid down in,eodoro, declared that the C$$
2#redecessor of +,;9 is an agency not immune from suit, it !eing
engaged in functions #ertaining to a #rivate entity. 't went on to
e"#lain in this wise,
" " "
The Civil $eronautics $dministration comes under the category of a
#rivate entity. $lthough not a !ody cor#orate it was created, like the
Kational $ir#orts Cor#oration, not to maintain a necessary function
of government, !ut to run what is essentially a !usiness, even if
revenues !e not its #rime o!:ective !ut rather the #romotion of
travel and the convenience of the travelling #u!lic. 't is engaged in
an enter#rise which, far from !eing the e"clusive #rerogative of
state, may, more than the construction of #u!lic roads, !e
undertaken !y #rivate concerns. 0Kational $ir#orts Cor#. v.
Teodoro,supra, #. 87+.1
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" " "
True, the law #revailing in ()B8 when the ,eodorocase was
#romulgated was A"ec. Crder -6B 23eorganiFing the Civil
$eronautics $dministration and $!olishing the Kational $ir#orts
Cor#oration9. 3e#u!lic $ct Ko. ++6 2Civil $eronautics $ct of the
Phili##ines9, su!se<uently enacted on .une 87, ()B8, did not alter
the character of the C$$Ss o!:ectives under A"ec. Crder -6B. The
#ertinent #rovisions cited in the ,eodoro case, #articularly Secs. -
and 5 of A"ec. Crder -6B, which led the Court to consider the C$$ in
the category of a #rivate entity were retained su!stantially in
3e#u!lic $ct ++6, Sec. -82859 and 28B9. Said $ct #rovides,
Sec. -8. Powers and !uties o* the +dministrator. Su!:ect to the
general control and su#ervision of the Le#artment /ead, the
$dministrator shall have among others, the following #owers and
duties,
" " "
2859 ,o administer, operate, mana%e, control, maintain and develop
the #anila )nternational +irport and all %overnment<owned
aerodromes e"ce#t those controlled or o#erated !y the $rmed
Eorces of the Phili##ines including such #owers and duties as, 2a9 to
#lan, design, construct, e<ui#, e"#and, im#rove, re#air or alter
aerodromes or such structures, im#rovement or air navigation
facilities@ 2!9 to enter into, make and e"ecute contracts of any kind
with any #erson, Drm, or #u!lic or #rivate cor#oration or entity@ ...
28B9 To determine, D", im#ose, collect and receive landing fees,
#arking s#ace fees, royalties on sales or deliveries, direct or
indirect, to any aircraft for its use of aviation gasoline, oil and
lu!ricants, s#are #arts, accessories and su##lies, tools, other
royalties, fees or rentals for the use of any of the #ro#erty under its
management and control.
" " "
Erom the foregoing, it can !e seen that the C$$ is tasked with
#rivate or nongovernmental functions which o#erate to remove it
from the #urview of the rule on State immunity from suit. Eor the
correct rule as set forth in the ,eodoro case states,
" " "
Kot all government entities, whether cor#orate or noncor#orate,
are immune from suits. )mmunity *rom suits is determined by the
character o* the ob=ects *or which the entity was or%anized. The
rule is thus stated in Cor#us .uris,
Suits against State agencies with relation to matters in which they
have assumed to act in #rivate or nongovernmental ca#acity, and
various suits against certain cor#orations created !y the state for
#u!lic #ur#oses, !ut to engage in matters #artaking more of the
nature of ordinary !usiness rather than functions of a governmental
or #olitical character, are not regarded as suits against the state.
The latter is true, although the state may own stock or #ro#erty of
such a cor#oration for !y engaging in !usiness o#erations through a
cor#oration, the state divests itself so far of its sovereign character,
and !y im#lication consents to suits against the cor#oration. 2B)
C..., -(-9 0Kational $ir#orts Cor#oration v. Teodoro, supra,##. 876
87+@ 'talics su##lied.1
This doctrine has !een reaGrmed in the recent case of #alon% v.
Philippine $ational Railways 0N.3. Ko. L5))-7, $ugust +, ()*B, (-*
SC3$ 6-1, where it was held that the Phili##ine Kational 3ailways,
although owned and o#erated !y the government, was not immune
from suit as it does not e"ercise sovereign !ut #urely #ro#rietary
and !usiness functions. $ccordingly, as the C$$ was created to
undertake the management of air#ort o#erations which #rimarily
involve #ro#rietary functions, it cannot avail of the immunity from
suit accorded to government agencies #erforming strictly
0(B1
'n our view, the C$ there!y correctly a##reciated the :uridical
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character of the $TC as an agency of the Novernment not
per*ormin% a purely %overnmental or soverei%n *unction, !ut was
instead involved in the management and maintenance of the
Loakan $ir#ort, an activity that was not the e"clusive #rerogative of
the State in its sovereign ca#acity. /ence, the $TC had no claim to
the StateSs immunity from suit. He u#hold the C$Ss afore<uoted
holding.
He further o!serve the doctrine of sovereign immunity cannot !e
successfully invoked to defeat a valid claim for com#ensation
arising from the taking without :ust com#ensation and without the
#ro#er e"#ro#riation #roceedings !eing Drst resorted to of the
#lainti=sS #ro#erty.
0(61
Thus, in !e los 6antos v. )ntermediate
+ppellate Court,
0(+1
the trial courtSs dismissal !ased on the doctrine
of nonsua!ility of the State of two cases 2one of which was for
damages9 Dled !y owners of #ro#erty where a road ) meters wide
and (8*.+7 meters long occu#ying a total area of (,(6B s<uare
meters and an artiDcial creek 8-.87 meters wide and (8*.6) meters
long occu#ying an area of 8,)76 s<uare meters had !een
constructed !y the #rovincial engineer of 3iFal and a #rivate
contractor without the ownersS knowledge and consent was
reversed and the cases remanded for trial on the merits. The
Su#reme Court ruled that the doctrine of sovereign immunity was
not an instrument for #er#etrating any in:ustice on a citiFen. 'n
e"ercising the right of eminent domain, the Court e"#lained, the
State e"ercised its =us imperii, as distinguished from its #ro#rietary
rights, or =us %estionis@ yet, even in that area, where #rivate
#ro#erty had !een taken in e"#ro#riation without :ust com#ensation
!eing #aid, the defense of immunity from suit could not !e set u# !y
the State against an action for #ayment !y the owners.
Lastly, the issue of whether or not the $TC could !e sued without
the StateSs consent has !een rendered moot !y the #assage of
3e#u!lic $ct Ko. )5)+,otherwise known as the Civil +viation
+uthority +ct o* /007.
3.$. Ko. )5)+ a!olished the $TC, to wit,
Section 5. Creation o* the +uthority. There is here!y created an
inde#endent regulatory !ody with <uasi:udicial and <uasi
legislative #owers and #ossessing cor#orate attri!utes to !e known
as the Civil $viation $uthority of the Phili##ines 2C$$P9, herein after
referred to as the V$uthorityV attached to the Le#artment of
Trans#ortation and Communications 2LCTC9 for the #ur#ose of
#olicy coordination. 1or this (ur(ose) the e&istin% Air
trans(ortation 9Ice create# un#er the (rovisions of
5e(u*lic Act !o. 778) as a'en#e# is here* a*olishe#.
" " "
4nder its Transitory Provisions, 3.$. Ko. )5)+ esta!lished in #lace of
the $TC the Civil $viation $uthority of the Phili##ines 2C$$P9, which
there!y assumed all of the $TCSs #owers, duties and rights, assets,
real and #ersonal #ro#erties, funds, and revenues, viz,
C/$PTA3 %''
T3$KS'TC3TX P3C&'S'CKS
Section *B. +bolition o* the +ir ,ransportation ;Ice. The $ir
Trans#ortation CGce 2$TC9 created under 3e#u!lic $ct Ko. ++6, a
sectoral oGce of the Le#artment of Trans#ortation and
Communications 2LCTC9, is here!y a!olished.
All (o,ers) #uties an# ri%hts vested !y law and e"ercised *
the AT9 is here!y transferre# to the Authorit.
All assets) real an# (ersonal (ro(erties) fun#s an# revenues
owned !y or vested in the di=erent oGces of the AT9 are
transferre# to the Authorit. All contracts) recor#s an#
#ocu'ents relatin% to the o(erations of the a*olishe#
a%encand its oGces and !ranches are likewise transferre# to
the Authorit. An real (ro(ert o,ne# * the national
%overn'ent or %overn'ent@o,ne# cor(oration or
authoritwhich is *ein% use# an# utili:e# as oGce or facility *
the AT9shall !e transferre# an# title# in favor of the
Authorit.
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Section 8- of 3.$. Ko. )5)+ enumerates the cor#orate #owers
vested in the C$$P, including the #ower to sue and !e sued, to
enter into contracts of every class, kind and descri#tion, to
construct, ac<uire, own, hold, o#erate, maintain, administer and
lease #ersonal and real #ro#erties, and to settle, under such terms
and conditions most advantageous to it, any claim !y or against it.
0(*1
Hith the C$$P having legally succeeded the $TC #ursuant to 3.$.
Ko. )5)+, the o!ligations that the $TC had incurred !y virtue of the
deed of sale with the 3amos s#ouses might now !e enforced against
the C$$P.
$B0501950, the Court denies the #etition for review
on certiorari, and aGrms the decision #romulgated !y the Court of
$##eals.
Ko #ronouncement on costs of suit.
S9 9570507.
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