Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. 175888

February 11, 2009

SUZETTE NICOLAS y SOMBILON, Petitioner,

vs.
ALBERTO ROMULO, in his capacity as Secretary of Foreign Affairs; RAUL GONZALEZ, in his capacity as
Secretary of Justice; EDUARDO ERMITA, in his capacity as Executive Secretary; RONALDO PUNO, in his
capacity as Secretary of the Interior and Local Government; SERGIO APOSTOL, in his capacity as
Presidential Legal Counsel; and L/CPL. DANIEL SMITH, Respondents.
x - - - - - - - - - - - - - - - - - - - - - - -x
G.R. No. 176051

February 11, 2009

JOVITO R. SALONGA, WIGBERTO E. TAADA, JOSE DE LA RAMA, EMILIO C. CAPULONG, H. HARRY L.

ROQUE, JR., FLORIN HILBAY, and BENJAMIN POZON, Petitioners,
vs.
DANIEL SMITH, SECRETARY RAUL GONZALEZ, PRESIDENTIAL LEGAL COUNSEL SERGIO APOSTOL,
SECRETARY RONALDO PUNO, SECRETARY ALBERTO ROMULO, The Special 16th Division of the COURT
OF APPEALS, and all persons acting in their capacity, Respondents.
x - - - - - - - - - - - - - - - - - - - - - - -x
G.R. No. 176222

February 11, 2009

BAGONG ALYANSANG MAKABAYAN (BAYAN), represented by Dr. Carol Araullo; GABRIELA, represented
by Emerenciana de Jesus; BAYAN MUNA, represented by Rep. Satur Ocampo; GABRIELA WOMEN'S
PARTY, represented by Rep. Liza Maza; KILUSANG MAYO UNO (KMU), represented by Elmer Labog;
KILUSANG MAGBUBUKID NG PILIPINAS (KMP), represented by Willy Marbella; LEAGUE OF FILIPINO
STUDENTS (LFS), represented by Vencer Crisostomo; and THE PUBLIC INTEREST LAW CENTER,
represented
by
Atty.
Rachel
Pastores, Petitioners,
vs.
PRESIDENT GLORIA MACAPAGAL-ARROYO, in her capacity as concurrent Defense Secretary,
EXECUTIVE SECRETARY EDUARDO ERMITA, FOREIGN AFFAIRS SECRETARY ALBERTO ROMULO,
JUSTICE SECRETARY RAUL GONZALEZ, AND INTERIOR AND LOCAL GOVERNMENT SECRETARY
RONALDO PUNO, Respondents.
DECISION
AZCUNA, J.:
These are petitions for certiorari, etc. as special civil actions and/or for review of the Decision of the Court of
Appeals in Lance Corporal Daniel J. Smith v. Hon. Benjamin T. Pozon, et al., in CA-G.R. SP No. 97212, dated
January 2, 2007.
The facts are not disputed.

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Respondent Lance Corporal (L/CPL) Daniel Smith is a member of the United States Armed Forces. He was
charged with the crime of rape committed against a Filipina, petitioner herein, sometime on November 1, 2005, as
follows:
The undersigned accused LCpl. Daniel Smith, Ssgt. Chad Brian Carpentier, Dominic Duplantis, Keith Silkwood
and Timoteo L. Soriano, Jr. of the crime of Rape under Article 266-A of the Revised Penal Code, as amended by
Republic Act 8353, upon a complaint under oath filed by Suzette S. Nicolas, which is attached hereto and made
an integral part hereof as Annex "A," committed as follows:
"That on or about the First (1st) day of November 2005, inside the Subic Bay Freeport Zone, Olongapo City and
within the jurisdiction of this Honorable Court, the above-named accuseds (sic), being then members of the
United States Marine Corps, except Timoteo L. Soriano, Jr., conspiring, confederating together and mutually
helping one another, with lewd design and by means of force, threat and intimidation, with abuse of superior
strength and taking advantage of the intoxication of the victim, did then and there willfully, unlawfully and
feloniously sexually abuse and have sexual intercourse with or carnal knowledge of one Suzette S. Nicolas, a 22year old unmarried woman inside a Starex Van with Plate No. WKF-162, owned by Starways Travel and Tours,
with Office address at 8900 P. Victor St., Guadalupe, Makati City, and driven by accused Timoteo L. Soriano, Jr.,
against the will and consent of the said Suzette S. Nicolas, to her damage and prejudice.
CONTRARY TO LAW."1
Pursuant to the Visiting Forces Agreement (VFA) between the Republic of the Philippines and the United States,
entered into on February 10, 1998, the United States, at its request, was granted custody of defendant Smith
pending the proceedings.
During the trial, which was transferred from the Regional Trial Court (RTC) of Zambales to the RTC of Makati for
security reasons, the United States Government faithfully complied with its undertaking to bring defendant Smith
to the trial court every time his presence was required.
On December 4, 2006, the RTC of Makati, following the end of the trial, rendered its Decision, finding defendant
Smith guilty, thus:
WHEREFORE, premises considered, for failure of the prosecution to adduce sufficient evidence against accused
S/SGT. CHAD BRIAN CARPENTER, L/CPL. KEITH SILKWOOD AND L/CPL. DOMINIC DUPLANTIS, all of the
US Marine Corps assigned at the USS Essex, are hereby ACQUITTED to the crime charged.
The prosecution having presented sufficient evidence against accused L/CPL. DANIEL J. SMITH, also of the US
Marine Corps at the USS Essex, this Court hereby finds him GUILTY BEYOND REASONABLE DOUBT of the
crime of RAPE defined under Article 266-A, paragraph 1 (a) of the Revised Penal Code, as amended by R.A.
8353, and, in accordance with Article 266-B, first paragraph thereof, hereby sentences him to suffer the penalty of
reclusion perpetua together with the accessory penalties provided for under Article 41 of the same Code.
Pursuant to Article V, paragraph No. 10, of the Visiting Forces Agreement entered into by the Philippines and the
United States, accused L/CPL. DANIEL J. SMITH shall serve his sentence in the facilities that shall, thereafter, be
agreed upon by appropriate Philippine and United States authorities. Pending agreement on such facilities,
accused L/CPL. DANIEL J. SMITH is hereby temporarily committed to the Makati City Jail.
Accused L/CPL. DANIEL J. SMITH is further sentenced to indemnify complainant SUZETTE S. NICOLAS in the
amount of P50,000.00 as compensatory damages plus P50,000.00 as moral damages.
SO ORDERED.2
As a result, the Makati court ordered Smith detained at the Makati jail until further orders.

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On December 29, 2006, however, defendant Smith was taken out of the Makati jail by a contingent of Philippine
law enforcement agents, purportedly acting under orders of the Department of the Interior and Local Government,
and brought to a facility for detention under the control of the United States government, provided for under new
agreements between the Philippines and the United States, referred to as the Romulo-Kenney Agreement of
December 19, 2006 which states:
The Government of the Republic of the Philippines and the Government of the United States of America agree
that, in accordance with the Visiting Forces Agreement signed between our two nations, Lance Corporal Daniel J.
Smith, United States Marine Corps, be returned to U.S. military custody at the U.S. Embassy in Manila.
(Sgd.) Kristie A. Kenney
Representative of the United States
of America

(Sgd.) Alberto G. Romulo

Representative of the Republic
of the Philippines

DATE: 12-19-06

DATE: December 19, 2006

and the Romulo-Kenney Agreement of December 22, 2006 which states:

The Department of Foreign Affairs of the Republic of the Philippines and the Embassy of the United States of
America agree that, in accordance with the Visiting Forces Agreement signed between the two nations, upon
transfer of Lance Corporal Daniel J. Smith, United States Marine Corps, from the Makati City Jail, he will be
detained at the first floor, Rowe (JUSMAG) Building, U.S. Embassy Compound in a room of approximately 10 x 12
square feet. He will be guarded round the clock by U.S. military personnel. The Philippine police and jail
authorities, under the direct supervision of the Philippine Department of Interior and Local Government (DILG) will
have access to the place of detention to ensure the United States is in compliance with the terms of the VFA.
The matter was brought before the Court of Appeals which decided on January 2, 2007, as follows:
WHEREFORE, all the foregoing considered, we resolved to DISMISS the petition for having become moot. 3
Hence, the present actions.
The petitions were heard on oral arguments on September 19, 2008, after which the parties submitted their
memoranda.
Petitioners contend that the Philippines should have custody of defendant L/CPL Smith because, first of all, the
VFA is void and unconstitutional.
This issue had been raised before, and this Court resolved in favor of the constitutionality of the VFA. This was in
Bayan v. Zamora,4 brought by Bayan, one of petitioners in the present cases.
Against the barriers of res judicata vis--vis Bayan, and stare decisis vis--vis all the parties, the reversal of the
previous ruling is sought on the ground that the issue is of primordial importance, involving the sovereignty of the
Republic, as well as a specific mandate of the Constitution.
The provision of the Constitution is Art. XVIII, Sec. 25 which states:
Sec. 25. After the expiration in 1991 of the Agreement between the Philippines and the United States of America
concerning Military Bases, foreign military bases, troops, or facilities shall not be allowed in the Philippines except
under a treaty duly concurred in by the Senate and, when the Congress so requires, ratified by a majority of the
votes cast by the people in a national referendum held for that purpose, and recognized as a treaty by the other
contracting State.

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The reason for this provision lies in history and the Philippine experience in regard to the United States military
bases in the country.
It will be recalled that under the Philippine Bill of 1902, which laid the basis for the Philippine Commonwealth and,
eventually, for the recognition of independence, the United States agreed to cede to the Philippines all the territory
it acquired from Spain under the Treaty of Paris, plus a few islands later added to its realm, except certain naval
ports and/or military bases and facilities, which the United States retained for itself.
This is noteworthy, because what this means is that Clark and Subic and the other places in the Philippines
covered by the RP-US Military Bases Agreement of 1947 were not Philippine territory, as they were excluded from
the cession and retained by the US.
Accordingly, the Philippines had no jurisdiction over these bases except to the extent allowed by the United
States. Furthermore, the RP-US Military Bases Agreement was never advised for ratification by the United States
Senate, a disparity in treatment, because the Philippines regarded it as a treaty and had it concurred in by our
Senate.
Subsequently, the United States agreed to turn over these bases to the Philippines; and with the expiration of the
RP-US Military Bases Agreement in 1991, the territory covered by these bases were finally ceded to the
Philippines.
To prevent a recurrence of this experience, the provision in question was adopted in the 1987 Constitution.
The provision is thus designed to ensure that any agreement allowing the presence of foreign military bases,
troops or facilities in Philippine territory shall be equally binding on the Philippines and the foreign sovereign State
involved. The idea is to prevent a recurrence of the situation in which the terms and conditions governing the
presence of foreign armed forces in our territory were binding upon us but not upon the foreign State.
Applying the provision to the situation involved in these cases, the question is whether or not the presence of US
Armed Forces in Philippine territory pursuant to the VFA is allowed "under a treaty duly concurred in by the
Senate xxx and recognized as a treaty by the other contracting State."
This Court finds that it is, for two reasons.
First, as held in Bayan v. Zamora,5 the VFA was duly concurred in by the Philippine Senate and has been
recognized as a treaty by the United States as attested and certified by the duly authorized representative of the
United States government.
The fact that the VFA was not submitted for advice and consent of the United States Senate does not detract from
its status as a binding international agreement or treaty recognized by the said State. For this is a matter of
internal United States law. Notice can be taken of the internationally known practice by the United States of
submitting to its Senate for advice and consent agreements that are policymaking in nature, whereas those that
carry out or further implement these policymaking agreements are merely submitted to Congress, under the
provisions of the so-called CaseZablocki Act, within sixty days from ratification. 6
The second reason has to do with the relation between the VFA and the RP-US Mutual Defense Treaty of August
30, 1951. This earlier agreement was signed and duly ratified with the concurrence of both the Philippine Senate
and the United States Senate.
The RP-US Mutual Defense Treaty states:7
MUTUAL DEFENSE TREATY BETWEEN THE REPUBLIC OF THE PHILIPPINES AND THE UNITED STATES
OF AMERICA. Signed at Washington, August 30, 1951.

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The Parties of this Treaty

Reaffirming their faith in the purposes and principles of the Charter of the United Nations and their desire to live in
peace with all peoples and all governments, and desiring to strengthen the fabric of peace in the Pacific area.
Recalling with mutual pride the historic relationship which brought their two peoples together in a common bond of
sympathy and mutual ideals to fight side-by-side against imperialist aggression during the last war.
Desiring to declare publicly and formally their sense of unity and their common determination to defend
themselves against external armed attack, so that no potential aggressor could be under the illusion that either of
them stands alone in the Pacific area.
Desiring further to strengthen their present efforts for collective defense for the preservation of peace and security
pending the development of a more comprehensive system of regional security in the Pacific area.
Agreeing that nothing in this present instrument shall be considered or interpreted as in any way or sense altering
or diminishing any existing agreements or understandings between the Republic of the Philippines and the United
States of America.
Have agreed as follows:
Article I. The parties undertake, as set forth in the Charter of the United Nations, to settle any international
disputes in which they may be involved by peaceful means in such a manner that international peace and security
and justice are not endangered and to refrain in their international relation from the threat or use of force in any
manner inconsistent with the purposes of the United Nations.
Article II. In order more effectively to achieve the objective of this Treaty, the Parties separately and jointly by selfhelp and mutual aid will maintain and develop their individual and collective capacity to resist armed attack.
Article III. The Parties, through their Foreign Ministers or their deputies, will consult together from time to time
regarding the implementation of this Treaty and whenever in the opinion of either of them the territorial integrity,
political independence or security of either of the Parties is threatened by external armed attack in the Pacific.
Article IV. Each Party recognizes that an armed attack in the Pacific area on either of the parties would be
dangerous to its own peace and safety and declares that it would act to meet the common dangers in accordance
with its constitutional processes.
Any such armed attack and all measures taken as a result thereof shall be immediately reported to the Security
Council of the United Nations. Such measures shall be terminated when the Security Council has taken the
measures necessary to restore and maintain international peace and security.
Article V. For the purpose of Article IV, an armed attack on either of the Parties is deemed to include an armed
attack on the metropolitan territory of either of the Parties, or on the island territories under its jurisdiction in the
Pacific Ocean, its armed forces, public vessels or aircraft in the Pacific.
Article VI. This Treaty does not affect and shall not be interpreted as affecting in any way the rights and
obligations of the Parties under the Charter of the United Nations or the responsibility of the United Nations for the
maintenance of international peace and security.
Article VII. This Treaty shall be ratified by the Republic of the Philippines and the United Nations of America in
accordance with their respective constitutional processes and will come into force when instruments of ratification
thereof have been exchanged by them at Manila.

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Article VIII. This Treaty shall remain in force indefinitely. Either Party may terminate it one year after notice has
been given to the other party.
In withness whereof the undersigned Plenipotentiaries have signed this Treaty.
Done in duplicate at Washington this thirtieth day of August, 1951.
For the Republic of the Philippines:
(Sgd.) Carlos P. Romulo
(Sgd.) Joaquin M. Elizalde
(Sgd.) Vicente J. Francisco
(Sgd.) Diosdado Macapagal
For the United States of America:
(Sgd.) Dean Acheson
(Sgd.) John Foster Dulles
(Sgd.) Tom Connally
(Sgd.) Alexander Wiley8
Clearly, therefore, joint RP-US military exercises for the purpose of developing the capability to resist an armed
attack fall squarely under the provisions of the RP-US Mutual Defense Treaty. The VFA, which is the instrument
agreed upon to provide for the joint RP-US military exercises, is simply an implementing agreement to the main
RP-US Military Defense Treaty. The Preamble of the VFA states:
The Government of the United States of America and the Government of the Republic of the Philippines,
Reaffirming their faith in the purposes and principles of the Charter of the United Nations and their desire to
strengthen international and regional security in the Pacific area;
Reaffirming their obligations under the Mutual Defense Treaty of August 30, 1951;
Noting that from time to time elements of the United States armed forces may visit the Republic of the Philippines;
Considering that cooperation between the United States and the Republic of the Philippines promotes their
common security interests;
Recognizing the desirability of defining the treatment of United States personnel visiting the Republic of the
Philippines;
Have agreed as follows:9
Accordingly, as an implementing agreement of the RP-US Mutual Defense Treaty, it was not necessary to submit
the VFA to the US Senate for advice and consent, but merely to the US Congress under the CaseZablocki Act

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within 60 days of its ratification. It is for this reason that the US has certified that it recognizes the VFA as a
binding international agreement, i.e., a treaty, and this substantially complies with the requirements of Art. XVIII,
Sec. 25 of our Constitution.10
The provision of Art. XVIII, Sec. 25 of the Constitution, is complied with by virtue of the fact that the presence of
the US Armed Forces through the VFA is a presence "allowed under" the RP-US Mutual Defense Treaty. Since
the RP-US Mutual Defense Treaty itself has been ratified and concurred in by both the Philippine Senate and the
US Senate, there is no violation of the Constitutional provision resulting from such presence.
The VFA being a valid and binding agreement, the parties are required as a matter of international law to abide by
its terms and provisions.
The VFA provides that in cases of offenses committed by the members of the US Armed Forces in the Philippines,
the following rules apply:
Article V
Criminal Jurisdiction
xxx
6. The custody of any United States personnel over whom the Philippines is to exercise jurisdiction shall
immediately reside with United States military authorities, if they so request, from the commission of the offense
until completion of all judicial proceedings. United States military authorities shall, upon formal notification by the
Philippine authorities and without delay, make such personnel available to those authorities in time for any
investigative or judicial proceedings relating to the offense with which the person has been charged. In
extraordinary cases, the Philippine Government shall present its position to the United States Government
regarding custody, which the United States Government shall take into full account. In the event Philippine judicial
proceedings are not completed within one year, the United States shall be relieved of any obligations under this
paragraph. The one year period will not include the time necessary to appeal. Also, the one year period will not
include any time during which scheduled trial procedures are delayed because United States authorities, after
timely notification by Philippine authorities to arrange for the presence of the accused, fail to do so.
Petitioners contend that these undertakings violate another provision of the Constitution, namely, that providing for
the exclusive power of this Court to adopt rules of procedure for all courts in the Philippines (Art. VIII, Sec. 5[5]).
They argue that to allow the transfer of custody of an accused to a foreign power is to provide for a different rule
of procedure for that accused, which also violates the equal protection clause of the Constitution (Art. III, Sec. 1.).
Again, this Court finds no violation of the Constitution.
The equal protection clause is not violated, because there is a substantial basis for a different treatment of a
member of a foreign military armed forces allowed to enter our territory and all other accused. 11
The rule in international law is that a foreign armed forces allowed to enter ones territory is immune from local
jurisdiction, except to the extent agreed upon. The Status of Forces Agreements involving foreign military units
around the world vary in terms and conditions, according to the situation of the parties involved, and reflect their
bargaining power. But the principle remains, i.e., the receiving State can exercise jurisdiction over the forces of
the sending State only to the extent agreed upon by the parties. 12
As a result, the situation involved is not one in which the power of this Court to adopt rules of procedure is
curtailed or violated, but rather one in which, as is normally encountered around the world, the laws (including
rules of procedure) of one State do not extend or apply except to the extent agreed upon to subjects of

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another State due to the recognition of extraterritorial immunity given to such bodies as visiting foreign armed
forces.
Nothing in the Constitution prohibits such agreements recognizing immunity from jurisdiction or some aspects of
jurisdiction (such as custody), in relation to long-recognized subjects of such immunity like Heads of State,
diplomats and members of the armed forces contingents of a foreign State allowed to enter another States
territory. On the contrary, the Constitution states that the Philippines adopts the generally accepted principles of
international law as part of the law of the land. (Art. II, Sec. 2).
Applying, however, the provisions of VFA, the Court finds that there is a different treatment when it comes to
detention as against custody. The moment the accused has to be detained, e.g., after conviction, the rule that
governs is the following provision of the VFA:
Article V
Criminal Jurisdiction
xxx
Sec. 10. The confinement or detention by Philippine authorities of United States personnel shall be carried out in
facilities agreed on by appropriate Philippines and United States authorities. United States personnel serving
sentences in the Philippines shall have the right to visits and material assistance.
It is clear that the parties to the VFA recognized the difference between custody during the trial and detention after
conviction, because they provided for a specific arrangement to cover detention. And this specific arrangement
clearly states not only that the detention shall be carried out in facilities agreed on by authorities of both parties,
but also that the detention shall be "by Philippine authorities." Therefore, the Romulo-Kenney Agreements of
December 19 and 22, 2006, which are agreements on the detention of the accused in the United States Embassy,
are not in accord with the VFA itself because such detention is not "by Philippine authorities."
Respondents should therefore comply with the VFA and negotiate with representatives of the United States
towards an agreement on detention facilities under Philippine authorities as mandated by Art. V, Sec. 10 of the
VFA.
Next, the Court addresses the recent decision of the United States Supreme Court in Medellin v. Texas ( 552 US
___ No. 06-984, March 25, 2008), which held that treaties entered into by the United States are not automatically
part of their domestic law unless these treaties are self-executing or there is an implementing legislation to make
them enforceable.1avvphi1
On February 3, 2009, the Court issued a Resolution, thus:
"G.R. No. 175888 (Suzette Nicolas y Sombilon v. Alberto Romulo, et al.); G.R. No. 176051 (Jovito R. Salonga, et
al. v. Daniel Smith, et al.); and G.R. No. 176222 (Bagong Alyansang Makabayan [BAYAN], et al. v. President
Gloria Macapagal-Arroyo, et al.).
The parties, including the Solicitor General, are required to submit within three (3) days a Comment/Manifestation
on the following points:
1. What is the implication on the RP-US Visiting Forces Agreement of the recent US Supreme Court
decision in Jose Ernesto Medellin v. Texas, dated March 25, 2008, to the effect that treaty stipulations that
are not self-executory can only be enforced pursuant to legislation to carry them into effect; and that,
while treaties may comprise international commitments, they are not domestic law unless Congress has

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enacted implementing statutes or the treaty itself conveys an intention that it be "self-executory" and is
ratified on these terms?
2. Whether the VFA is enforceable in the US as domestic law, either because it is self-executory or
because there exists legislation to implement it.
3. Whether the RP-US Mutual Defense Treaty of August 30, 1951 was concurred in by the US Senate
and, if so, is there proof of the US Senate advice and consent resolution? Peralta, J., no part."
After deliberation, the Court holds, on these points, as follows:
First, the VFA is a self-executing Agreement, as that term is defined in Medellin itself, because the parties intend
its provisions to be enforceable, precisely because the Agreement is intended to carry out obligations and
undertakings under the RP-US Mutual Defense Treaty. As a matter of fact, the VFA has been implemented and
executed, with the US faithfully complying with its obligation to produce L/CPL Smith before the court during the
trial.
Secondly, the VFA is covered by implementing legislation, namely, the Case-Zablocki Act, USC Sec. 112(b),
inasmuch as it is the very purpose and intent of the US Congress that executive agreements registered under this
Act within 60 days from their ratification be immediately implemented. The parties to these present cases do not
question the fact that the VFA has been registered under the Case-Zablocki Act.1avvphi1
In sum, therefore, the VFA differs from the Vienna Convention on Consular Relations and the Avena decision of
the International Court of Justice (ICJ), subject matter of the Medellin decision. The Convention and the ICJ
decision are not self-executing and are not registrable under the Case-Zablocki Act, and thus lack legislative
implementing authority.
Finally, the RP-US Mutual Defense Treaty was advised and consented to by the US Senate on March 20, 1952,
as reflected in the US Congressional Record, 82nd Congress, Second Session, Vol. 98 Part 2, pp. 2594-2595.
The framers of the Constitution were aware that the application of international law in domestic courts varies from
country to country.
As Ward N. Ferdinandusse states in his Treatise, DIRECT APPLICATION OF INTERNATIONAL CRIMINAL LAW
IN NATIONAL COURTS, some countries require legislation whereas others do not.
It was not the intention of the framers of the 1987 Constitution, in adopting Article XVIII, Sec. 25, to require the
other contracting State to convert their system to achieve alignment and parity with ours. It was simply required
that the treaty be recognized as a treaty by the other contracting State. With that, it becomes for both parties a
binding international obligation and the enforcement of that obligation is left to the normal recourse and processes
under international law.
Furthermore, as held by the US Supreme Court in Weinberger v. Rossi, 13 an executive agreement is a "treaty"
within the meaning of that word in international law and constitutes enforceable domestic law vis--vis the United
States. Thus, the US Supreme Court in Weinberger enforced the provisions of the executive agreement granting
preferential employment to Filipinos in the US Bases here.
Accordingly, there are three types of treaties in the American system:
1. Art. II, Sec. 2 treaties These are advised and consented to by the US Senate in accordance with Art.
II, Sec. 2 of the US Constitution.

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2. ExecutiveCongressional Agreements: These are joint agreements of the President and Congress and
need not be submitted to the Senate.
3. Sole Executive Agreements. These are agreements entered into by the President. They are to be
submitted to Congress within sixty (60) days of ratification under the provisions of the Case-Zablocki Act,
after which they are recognized by the Congress and may be implemented.
As regards the implementation of the RP-US Mutual Defense Treaty, military aid or assistance has been given
under it and this can only be done through implementing legislation. The VFA itself is another form of
implementation of its provisions.
WHEREFORE, the petitions are PARTLY GRANTED, and the Court of Appeals Decision in CA-G.R. SP No.
97212 dated January 2, 2007 is MODIFIED. The Visiting Forces Agreement (VFA) between the Republic of the
Philippines and the United States, entered into on February 10, 1998, is UPHELD as constitutional, but the
Romulo-Kenney Agreements of December 19 and 22, 2006 are DECLARED not in accordance with the VFA, and
respondent Secretary of Foreign Affairs is hereby ordered to forthwith negotiate with the United States
representatives for the appropriate agreement on detention facilities under Philippine authorities as provided in
Art. V, Sec. 10 of the VFA, pending which the status quo shall be maintained until further orders by this Court.
The Court of Appeals is hereby directed to resolve without delay the related matters pending therein, namely, the
petition for contempt and the appeal of L/CPL Daniel Smith from the judgment of conviction.
No costs.
SO ORDERED.
ADOLFO S. AZCUNA
Associate Justice

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10

Republic of the Philippines

SUPREME COURT
Manila
SECOND DIVISION

G.R. No. 85750 September 28, 1990

INTERNATIONAL CATHOLIC IMMIGRATION COMMISSION, petitioner
vs
HON. PURA CALLEJA IN HER CAPACITY AS DIRECTOR OF THE BUREAU OF LABOR RELATIONS AND
TRADE UNIONS OF THE PHILIPPINES AND ALLIED SERVICES (TUPAS) WFTU respondents.
G.R. No. 89331 September 28, 1990
KAPISANAN NG MANGGAGAWA AT TAC SA IRRI-ORGANIZED LABOR ASSOCIATION IN LINE
INDUSTRIES AND AGRICULTURE, petitioner,
vs
SECRETARY OF LABOR AND EMPLOYMENT AND INTERNATIONAL RICE RESEARCH INSTITUTE,
INC.,respondents.
Araullo, Zambrano, Gruba, Chua Law Firm for petitioner in 85750.
Dominguez, Armamento, Cabana & Associates for petitioner in G.R. No. 89331.
Jimenez & Associates for IRRI.
Alfredo L. Bentulan for private respondent in 85750.

MELENCIO-HERRERA, J.:
Consolidated on 11 December 1989, these two cases involve the validity of the claim of immunity by the
International Catholic Migration Commission (ICMC) and the International Rice Research Institute, Inc. (IRRI)
from the application of Philippine labor laws.
I
Facts and Issues
A. G.R. No. 85750 the International Catholic Migration Commission (ICMC) Case.
As an aftermath of the Vietnam War, the plight of Vietnamese refugees fleeing from South Vietnam's communist
rule confronted the international community.

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11

In response to this crisis, on 23 February 1981, an Agreement was forged between the Philippine Government
and the United Nations High Commissioner for Refugees whereby an operating center for processing IndoChinese refugees for eventual resettlement to other countries was to be established in Bataan (Annex "A", Rollo,
pp. 22-32).
ICMC was one of those accredited by the Philippine Government to operate the refugee processing center in
Morong, Bataan. It was incorporated in New York, USA, at the request of the Holy See, as a non-profit agency
involved in international humanitarian and voluntary work. It is duly registered with the United Nations Economic
and Social Council (ECOSOC) and enjoys Consultative Status, Category II. As an international organization
rendering voluntary and humanitarian services in the Philippines, its activities are parallel to those of the
International Committee for Migration (ICM) and the International Committee of the Red Cross (ICRC) [DOLE
Records of BLR Case No. A-2-62-87, ICMC v. Calleja, Vol. 1].
On 14 July 1986, Trade Unions of the Philippines and Allied Services (TUPAS) filed with the then Ministry of Labor
and Employment a Petition for Certification Election among the rank and file members employed by ICMC The
latter opposed the petition on the ground that it is an international organization registered with the United Nations
and, hence, enjoys diplomatic immunity.
On 5 February 1987, Med-Arbiter Anastacio L. Bactin sustained ICMC and dismissed the petition for lack of
jurisdiction.
On appeal by TUPAS, Director Pura Calleja of the Bureau of Labor Relations (BLR), reversed the Med-Arbiter's
Decision and ordered the immediate conduct of a certification election. At that time, ICMC's request for
recognition as a specialized agency was still pending with the Department of Foreign Affairs (DEFORAF).
Subsequently, however, on 15 July 1988, the Philippine Government, through the DEFORAF, granted ICMC the
status of a specialized agency with corresponding diplomatic privileges and immunities, as evidenced by a
Memorandum of Agreement between the Government and ICMC (Annex "E", Petition, Rollo, pp. 41-43), infra.
ICMC then sought the immediate dismissal of the TUPAS Petition for Certification Election invoking the immunity
expressly granted but the same was denied by respondent BLR Director who, again, ordered the immediate
conduct of a pre-election conference. ICMC's two Motions for Reconsideration were denied despite an opinion
rendered by DEFORAF on 17 October 1988 that said BLR Order violated ICMC's diplomatic immunity.
Thus, on 24 November 1988, ICMC filed the present Petition for Certiorari with Preliminary Injunction assailing the
BLR Order.
On 28 November 1988, the Court issued a Temporary Restraining Order enjoining the holding of the certification
election.
On 10 January 1989, the DEFORAF, through its Legal Adviser, retired Justice Jorge C. Coquia of the Court of
Appeals, filed a Motion for Intervention alleging that, as the highest executive department with the competence
and authority to act on matters involving diplomatic immunity and privileges, and tasked with the conduct of
Philippine diplomatic and consular relations with foreign governments and UN organizations, it has a legal interest
in the outcome of this case.
Over the opposition of the Solicitor General, the Court allowed DEFORAF intervention.

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On 12 July 1989, the Second Division gave due course to the ICMC Petition and required the submittal of
memoranda by the parties, which has been complied with.
As initially stated, the issue is whether or not the grant of diplomatic privileges and immunites to ICMC extends to
immunity from the application of Philippine labor laws.
ICMC sustains the affirmative of the proposition citing (1) its Memorandum of Agreement with the Philippine
Government giving it the status of a specialized agency, (infra); (2) the Convention on the Privileges and
Immunities of Specialized Agencies, adopted by the UN General Assembly on 21 November 1947 and concurred
in by the Philippine Senate through Resolution No. 91 on 17 May 1949 (the Philippine Instrument of Ratification
was signed by the President on 30 August 1949 and deposited with the UN on 20 March 1950) infra; and (3)
Article II, Section 2 of the 1987 Constitution, which declares that the Philippines adopts the generally accepted
principles of international law as part of the law of the land.
Intervenor DEFORAF upholds ICMC'S claim of diplomatic immunity and seeks an affirmance of the DEFORAF
determination that the BLR Order for a certification election among the ICMC employees is violative of the
diplomatic immunity of said organization.
Respondent BLR Director, on the other hand, with whom the Solicitor General agrees, cites State policy and
Philippine labor laws to justify its assailed Order, particularly, Article II, Section 18 and Article III, Section 8 of the
1987 Constitution, infra; and Articles 243 and 246 of the Labor Code, as amended, ibid. In addition, she contends
that a certification election is not a litigation but a mere investigation of a non-adversary, fact-finding character. It is
not a suit against ICMC its property, funds or assets, but is the sole concern of the workers themselves.
B. G.R. No. 89331 (The International Rice Research Institute [IRRI] Case).
Before a Decision could be rendered in the ICMC Case, the Third Division, on 11 December 1989, resolved to
consolidate G.R. No. 89331 pending before it with G.R. No. 85750, the lower-numbered case pending with the
Second Division, upon manifestation by the Solicitor General that both cases involve similar issues.
The facts disclose that on 9 December 1959, the Philippine Government and the Ford and Rockefeller
Foundations signed a Memorandum of Understanding establishing the International Rice Research Institute
(IRRI) at Los Baos, Laguna. It was intended to be an autonomous, philanthropic, tax-free, non-profit, non-stock
organization designed to carry out the principal objective of conducting "basic research on the rice plant, on all
phases of rice production, management, distribution and utilization with a view to attaining nutritive and economic
advantage or benefit for the people of Asia and other major rice-growing areas through improvement in quality
and quantity of rice."
Initially, IRRI was organized and registered with the Securities and Exchange Commission as a private
corporation subject to all laws and regulations. However, by virtue of Pres. Decree No. 1620, promulgated on 19
April 1979, IRRI was granted the status, prerogatives, privileges and immunities of an international organization.
The Organized Labor Association in Line Industries and Agriculture (OLALIA), is a legitimate labor organization
with an existing local union, the Kapisanan ng Manggagawa at TAC sa IRRI (Kapisanan, for short) in respondent
IRRI.
On 20 April 1987, the Kapisanan filed a Petition for Direct Certification Election with Region IV, Regional Office of
the Department of Labor and Employment (DOLE).

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IRRI opposed the petition invoking Pres. Decree No. 1620 conferring upon it the status of an international
organization and granting it immunity from all civil, criminal and administrative proceedings under Philippine laws.
On 7 July 1987, Med-Arbiter Leonardo M. Garcia, upheld the opposition on the basis of Pres. Decree No. 1620
and dismissed the Petition for Direct Certification.
On appeal, the BLR Director, who is the public respondent in the ICMC Case, set aside the Med-Arbiter's Order
and authorized the calling of a certification election among the rank-and-file employees of IRRI. Said Director
relied on Article 243 of the Labor Code, as amended, infra and Article XIII, Section 3 of the 1987
Constitution, 1and held that "the immunities and privileges granted to IRRI do not include exemption from
coverage of our Labor Laws." Reconsideration sought by IRRI was denied.
On appeal, the Secretary of Labor, in a Resolution of 5 July 1989, set aside the BLR Director's Order, dismissed
the Petition for Certification Election, and held that the grant of specialized agency status by the Philippine
Government to the IRRI bars DOLE from assuming and exercising jurisdiction over IRRI Said Resolution reads in
part as follows:
Presidential Decree No. 1620 which grants to the IRRI the status, prerogatives, privileges and
immunities of an international organization is clear and explicit. It provides in categorical terms
that:
Art. 3 The Institute shall enjoy immunity from any penal, civil and administrative proceedings,
except insofar as immunity has been expressly waived by the Director-General of the Institution
or his authorized representative.
Verily, unless and until the Institute expressly waives its immunity, no summons, subpoena,
orders, decisions or proceedings ordered by any court or administrative or quasi-judicial agency
are enforceable as against the Institute. In the case at bar there was no such waiver made by the
Director-General of the Institute. Indeed, the Institute, at the very first opportunity already
vehemently questioned the jurisdiction of this Department by filing an ex-parte motion to dismiss
the case.
Hence, the present Petition for Certiorari filed by Kapisanan alleging grave abuse of discretion by respondent
Secretary of Labor in upholding IRRI's diplomatic immunity.
The Third Division, to which the case was originally assigned, required the respondents to comment on the
petition. In a Manifestation filed on 4 August 1990, the Secretary of Labor declared that it was "not adopting as his
own" the decision of the BLR Director in the ICMC Case as well as the Comment of the Solicitor General
sustaining said Director. The last pleading was filed by IRRI on 14 August 1990.
Instead of a Comment, the Solicitor General filed a Manifestation and Motion praying that he be excused from
filing a comment "it appearing that in the earlier case of International Catholic Migration Commission v. Hon. Pura
Calleja, G.R. No. 85750. the Office of the Solicitor General had sustained the stand of Director Calleja on the very
same issue now before it, which position has been superseded by respondent Secretary of Labor in G.R. No.
89331," the present case. The Court acceded to the Solicitor General's prayer.
The Court is now asked to rule upon whether or not the Secretary of Labor committed grave abuse of discretion in
dismissing the Petition for Certification Election filed by Kapisanan.

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Kapisanan contends that Article 3 of Pres. Decree No. 1620 granting IRRI the status, privileges, prerogatives and
immunities of an international organization, invoked by the Secretary of Labor, is unconstitutional in so far as it
deprives the Filipino workers of their fundamental and constitutional right to form trade unions for the purpose of
collective bargaining as enshrined in the 1987 Constitution.
A procedural issue is also raised. Kapisanan faults respondent Secretary of Labor for entertaining IRRI'S appeal
from the Order of the Director of the Bureau of Labor Relations directing the holding of a certification election.
Kapisanan contends that pursuant to Sections 7, 8, 9 and 10 of Rule V 2 of the Omnibus Rules Implementing the
Labor Code, the Order of the BLR Director had become final and unappeable and that, therefore, the Secretary of
Labor had no more jurisdiction over the said appeal.
On the other hand, in entertaining the appeal, the Secretary of Labor relied on Section 25 of Rep. Act. No. 6715,
which took effect on 21 March 1989, providing for the direct filing of appeal from the Med-Arbiter to the Office of
the Secretary of Labor and Employment instead of to the Director of the Bureau of Labor Relations in cases
involving certification election orders.
III
Findings in Both Cases.
There can be no question that diplomatic immunity has, in fact, been granted ICMC and IRRI.
Article II of the Memorandum of Agreement between the Philippine Government and ICMC provides that ICMC
shall have a status "similar to that of a specialized agency." Article III, Sections 4 and 5 of the Convention on the
Privileges and Immunities of Specialized Agencies, adopted by the UN General Assembly on 21 November 1947
and concurred in by the Philippine Senate through Resolution No. 19 on 17 May 1949, explicitly provides:
Art. III, Section 4. The specialized agencies, their property and assets, wherever located and by
whomsoever held, shall enjoy immunity from every form of legal process except insofar as in any
particular case they have expressly waived their immunity. It is, however, understood that no
waiver of immunity shall extend to any measure of execution.
Sec. 5. The premises of the specialized agencies shall be inviolable. The property and assets
of the specialized agencies, wherever located and by whomsoever held shall be immune from
search, requisition, confiscation, expropriation and any other form of interference, whether by
executive, administrative, judicial or legislative action. (Emphasis supplied).
IRRI is similarly situated, Pres. Decree No. 1620, Article 3, is explicit in its grant of immunity, thus:
Art. 3. Immunity from Legal Process. The Institute shall enjoy immunity from any penal, civil
and administrative proceedings, except insofar as that immunity has been expressly waived by
the Director-General of the Institute or his authorized representatives.
Thus it is that the DEFORAF, through its Legal Adviser, sustained ICMC'S invocation of immunity when in a
Memorandum, dated 17 October 1988, it expressed the view that "the Order of the Director of the Bureau of
Labor Relations dated 21 September 1988 for the conduct of Certification Election within ICMC violates the
diplomatic immunity of the organization." Similarly, in respect of IRRI, the DEFORAF speaking through The Acting

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Secretary of Foreign Affairs, Jose D. Ingles, in a letter, dated 17 June 1987, to the Secretary of Labor, maintained
that "IRRI enjoys immunity from the jurisdiction of DOLE in this particular instance."
The foregoing opinions constitute a categorical recognition by the Executive Branch of the Government that ICMC
and IRRI enjoy immunities accorded to international organizations, which determination has been held to be a
political question conclusive upon the Courts in order not to embarrass a political department of Government.
It is a recognized principle of international law and under our system of separation of powers that
diplomatic immunity is essentially a political question and courts should refuse to look beyond a
determination by the executive branch of the government, and where the plea of diplomatic
immunity is recognized and affirmed by the executive branch of the government as in the case at
bar, it is then the duty of the courts to accept the claim of immunity upon appropriate suggestion
by the principal law officer of the government . . . or other officer acting under his direction.
Hence, in adherence to the settled principle that courts may not so exercise their jurisdiction . . .
as to embarrass the executive arm of the government in conducting foreign relations, it is
accepted doctrine that in such cases the judicial department of (this) government follows the
action of the political branch and will not embarrass the latter by assuming an antagonistic
jurisdiction. 3
A brief look into the nature of international organizations and specialized agencies is in order. The term
"international organization" is generally used to describe an organization set up by agreement between two or
more states. 4 Under contemporary international law, such organizations are endowed with some degree of
international legal personality 5 such that they are capable of exercising specific rights, duties and powers. 6 They
are organized mainly as a means for conducting general international business in which the member states have
an interest. 7 The United Nations, for instance, is an international organization dedicated to the propagation of
world peace.
"Specialized agencies" are international organizations having functions in particular fields. The term appears in
Articles 57 8 and 63 9 of the Charter of the United Nations:
The Charter, while it invests the United Nations with the general task of promoting progress and
international cooperation in economic, social, health, cultural, educational and related matters,
contemplates that these tasks will be mainly fulfilled not by organs of the United Nations itself but
by autonomous international organizations established by inter-governmental agreements outside
the United Nations. There are now many such international agencies having functions in many
different fields, e.g. in posts, telecommunications, railways, canals, rivers, sea transport, civil
aviation, meteorology, atomic energy, finance, trade, education and culture, health and refugees.
Some are virtually world-wide in their membership, some are regional or otherwise limited in their
membership. The Charter provides that those agencies which have "wide international
responsibilities" are to be brought into relationship with the United Nations by agreements entered
into between them and the Economic and Social Council, are then to be known as "specialized
agencies." 10
The rapid growth of international organizations under contemporary international law has paved the way for the
development of the concept of international immunities.
It is now usual for the constitutions of international organizations to contain provisions conferring
certain immunities on the organizations themselves, representatives of their member states and

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persons acting on behalf of the organizations. A series of conventions, agreements and protocols
defining the immunities of various international organizations in relation to their members
generally are now widely in force; . . . 11
There are basically three propositions underlying the grant of international immunities to international
organizations. These principles, contained in the ILO Memorandum are stated thus: 1) international institutions
should have a status which protects them against control or interference by any one government in the
performance of functions for the effective discharge of which they are responsible to democratically constituted
international bodies in which all the nations concerned are represented; 2) no country should derive any national
financial advantage by levying fiscal charges on common international funds; and 3) the international organization
should, as a collectivity of States members, be accorded the facilities for the conduct of its official business
customarily extended to each other by its individual member States. 12 The theory behind all three propositions is
said to be essentially institutional in character. "It is not concerned with the status, dignity or privileges of
individuals, but with the elements of functional independence necessary to free international institutions from
national control and to enable them to discharge their responsibilities impartially on behalf of all their
members. 13 The raison d'etre for these immunities is the assurance of unimpeded performance of their functions
by the agencies concerned.
The grant of immunity from local jurisdiction to ICMC and IRRI is clearly necessitated by their international
character and respective purposes. The objective is to avoid the danger of partiality and interference by the host
country in their internal workings. The exercise of jurisdiction by the Department of Labor in these instances would
defeat the very purpose of immunity, which is to shield the affairs of international organizations, in accordance
with international practice, from political pressure or control by the host country to the prejudice of member States
of the organization, and to ensure the unhampered performance of their functions.
ICMC's and IRRI's immunity from local jurisdiction by no means deprives labor of its basic rights, which are
guaranteed by Article II, Section 18, 14 Article III, Section 8, 15 and Article XIII, Section 3 (supra), of the 1987
Constitution; and implemented by Articles 243 and 246 of the Labor Code, 16 relied on by the BLR Director and by
Kapisanan.
For, ICMC employees are not without recourse whenever there are disputes to be settled. Section 31 of the
Convention on the Privileges and Immunities of the Specialized Agencies of the United Nations 17 provides that
"each specialized agency shall make provision for appropriate modes of settlement of: (a) disputes arising out of
contracts or other disputes of private character to which the specialized agency is a party." Moreover, pursuant to
Article IV of the Memorandum of Agreement between ICMC the the Philippine Government, whenever there is any
abuse of privilege by ICMC, the Government is free to withdraw the privileges and immunities accorded. Thus:
Art. IV. Cooperation with Government Authorities. 1. The Commission shall cooperate at all
times with the appropriate authorities of the Government to ensure the observance of Philippine
laws, rules and regulations, facilitate the proper administration of justice and prevent the
occurrences of any abuse of the privileges and immunities granted its officials and alien
employees in Article III of this Agreement to the Commission.
2. In the event that the Government determines that there has been an abuse of the privileges
and immunities granted under this Agreement, consultations shall be held between the
Government and the Commission to determine whether any such abuse has occurred and, if so,
the Government shall withdraw the privileges and immunities granted the Commission and its
officials.

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Neither are the employees of IRRI without remedy in case of dispute with management as, in fact, there had been
organized a forum for better management-employee relationship as evidenced by the formation of the Council of
IRRI Employees and Management (CIEM) wherein "both management and employees were and still are
represented for purposes of maintaining mutual and beneficial cooperation between IRRI and its employees." The
existence of this Union factually and tellingly belies the argument that Pres. Decree No. 1620, which grants to
IRRI the status, privileges and immunities of an international organization, deprives its employees of the right to
self-organization.
The immunity granted being "from every form of legal process except in so far as in any particular case they have
expressly waived their immunity," it is inaccurate to state that a certification election is beyond the scope of that
immunity for the reason that it is not a suit against ICMC. A certification election cannot be viewed as an
independent or isolated process. It could tugger off a series of events in the collective bargaining process together
with related incidents and/or concerted activities, which could inevitably involve ICMC in the "legal process," which
includes "any penal, civil and administrative proceedings." The eventuality of Court litigation is neither remote and
from which international organizations are precisely shielded to safeguard them from the disruption of their
functions. Clauses on jurisdictional immunity are said to be standard provisions in the constitutions of international
Organizations. "The immunity covers the organization concerned, its property and its assets. It is equally
applicable to proceedings in personam and proceedings in rem." 18
We take note of a Manifestation, dated 28 September 1989, in the ICMC Case (p. 161, Rollo), wherein TUPAS
calls attention to the case entitled "International Catholic Migration Commission v. NLRC, et als., (G.R. No. 72222,
30 January 1989, 169 SCRA 606), and claims that, having taken cognizance of that dispute (on the issue of
payment of salary for the unexpired portion of a six-month probationary employment), the Court is now estopped
from passing upon the question of DOLE jurisdiction petition over ICMC.
We find no merit to said submission. Not only did the facts of said controversy occur between 1983-1985, or
before the grant to ICMC on 15 July 1988 of the status of a specialized agency with corresponding immunities, but
also because ICMC in that case did not invoke its immunity and, therefore, may be deemed to have waived it,
assuming that during that period (1983-1985) it was tacitly recognized as enjoying such immunity.
Anent the procedural issue raised in the IRRI Case, suffice it to state that the Decision of the BLR Director, dated
15 February 1989, had not become final because of a Motion for Reconsideration filed by IRRI Said Motion was
acted upon only on 30 March 1989 when Rep. Act No. 6715, which provides for direct appeals from the Orders of
the Med-Arbiter to the Secretary of Labor in certification election cases either from the order or the results of the
election itself, was already in effect, specifically since 21 March 1989. Hence, no grave abuse of discretion may
be imputed to respondent Secretary of Labor in his assumption of appellate jurisdiction, contrary to Kapisanan's
allegations. The pertinent portion of that law provides:
Art. 259. Any party to an election may appeal the order or results of the election as determined
by the Med-Arbiter directly to the Secretary of Labor and Employment on the ground that the
rules and regulations or parts thereof established by the Secretary of Labor and Employment for
the conduct of the election have been violated. Such appeal shall be decided within 15 calendar
days (Emphasis supplied).
En passant, the Court is gratified to note that the heretofore antagonistic positions assumed by two departments
of the executive branch of government have been rectified and the resultant embarrassment to the Philippine
Government in the eyes of the international community now, hopefully, effaced.

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WHEREFORE, in G.R. No. 85750 (the ICMC Case), the Petition is GRANTED, the Order of the Bureau of Labor
Relations for certification election is SET ASIDE, and the Temporary Restraining Order earlier issued is made
PERMANENT.
In G.R. No. 89331 (the IRRI Case), the Petition is Dismissed, no grave abuse of discretion having been
committed by the Secretary of Labor and Employment in dismissing the Petition for Certification Election.
No pronouncement as to costs.
SO ORDERED.
Padilla, Sarmiento and Regalado, JJ., concur.
Paras, J., is on leave.

Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. 79253 March 1, 1993

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UNITED STATES OF AMERICA and MAXINE BRADFORD, petitioners,

vs.
HON. LUIS R. REYES, as Presiding Judge of Branch 22, Regional Trial Court of Cavite, and NELIA T.
MONTOYA, respondents.
Luna, Sison & Manas for petitioners.
Evelyn R. Dominguez for private respondent.

DAVIDE, JR., J.:

This is a petition for certiorari and prohibition under Rule 65 of the Rules of Court. Petitioners would have Us
annul and set aside, for having been issued with grave abuse of discretion amounting to lack of jurisdiction, the
Resolution of 17 July 1987 of Branch 22 of the Regional Trial Court (RTC) of Cavite in Civil Case No. 224-87. The
said resolution denied, for lack of merit, petitioners' motion to dismiss the said case and granted the private
respondent's motion for the issuance of a writ of preliminary attachment. Likewise sought to be set aside is the
writ of attachment subsequently issued by the RTC on 28 July 1987.
The doctrine of state immunity is at the core of this controversy.
The readings disclose the following material operative facts:
Private respondent, hereinafter referred to as Montoya, is an American citizen who, at the time material to this
case, was employed as an identification (I.D.) checker at the U.S. Navy Exchange (NEX) at the Joint United
States Military Assistance Group (JUSMAG) headquarters in Quezon City. She is married to one Edgardo H.
Montoya, a Filipino-American serviceman employed by the U.S. Navy and stationed in San Francisco, California.
Petitioner Maxine Bradford, hereinafter referred to as Bradford, is likewise an American citizen who was the
activity exchange manager at the said JUSMAG Headquarters.
As a consequence of an incident which occurred on 22 January 1987 whereby her body and belongings were
searched after she had bought some items from the retail store of the NEX JUSMAG, where she had purchasing
privileges,
and
while
she
was
already
at
the
parking
area,
Montoya
filed
on
7 May 1987 a complaint 1 with the Regional Trial Court of her place of residence Cavite against Bradford for
damages due to the oppressive and discriminatory acts committed by the latter in excess of her authority as store
manager of the NEX JUSMAG. The complaint, docketed as Civil Case No. 224-87 and subsequently raffled off to
Branch 22 at Imus, Cavite, alleges the following, material operative facts:
xxx xxx xxx
3. That on January 22, 1987, after working as the duty ID checker from 7:45 to 11:45 a.m.,
plaintiff went shopping and left the store at l2:00 noon of that day;
4. That on the way to her car while already outside the store, Mrs. Yong Kennedy, also an ID
checker, upon the instruction of the store manager, Ms. Maxine Bradford, approached plaintiff and
informed her that she needed to search her bags;

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5. That plaintiff went to defendant, who was then outside the store talking to some men, to protest
the search but she was informed by the defendant that the search is to be made on all Jusmag
employees that day;
6. That the search was thereafter made on the person, car and bags of the plaintiff by Mrs. Yong
Kennedy in the presence of the defendant and numerous curious onlookers;
7. That having found nothing irregular on her person and belongings, plaintiff was allowed to
leave the premises;
8. That feeling aggrieved, plaintiff checked the records and discovered that she was the only one
whose person and belonging was (sic) searched that day contrary to defendant's allegation as set
forth in par. 5 hereof and as evidenced by the memorandum dated January 30, 1987 made by
other Filipino Jusmag employees, a photocopy of which is hereto attached as ANNEX "A" and
made integral (sic) part hereof:
9. That moreover, a check with Navy Exchange Security Manager, R.L. Roynon on January 27,
1987 was made and she was informed by Mr. Roynon that it is a matter of policy that customers
and employees of NEX Jusmag are not searched outside the store unless there is a very strong
evidence of a wrongdoing;
10. That plaintiff knows of no circumstances sufficient to trigger suspicion of a wrongdoing on her
part but on the other hand, is aware of the propensity of defendant to lay suspicion on Filipinos for
theft and/or shoplifting;
11. That plaintiff formally protested the illegal search on February 14, 1987 in a letter addressed
to Mr. R.L. Roynon, a photocopy of which is hereto attached as ANNEX "B" and made integral
(sic) part hereof; but no action was undertaken by the said officer;
12. That the illegal search on the person and belongings of the plaintiff in front of many people
has subjected the plaintiff to speculations of theft, shoplifting and such other wrongdoings and
has exposed her to contempt and ridicule which was caused her undue embarrassment and
indignity;
13. That since the act could not have been motivated by other (sic) reason than racial
discrimination in our own land, the act constitute (sic) a blow to our national pride and dignity
which has caused the plaintiff a feeling of anger for which she suffers sleepless nights and
wounded feelings;
14. That considering the above, plaintiff is entitled to be compensated by way of moral damages
in the amount of P500,000.00;
15. That to serve as a deterrent to those inclined to follow the oppressive act of the defendant,
exemplary damages in the amount of P100,000.00 should also be awarded. 2
She then prayed for judgment ordering Bradford to pay her P500,000.00 as moral damages, P100,000.00 as
exemplary damages and reasonable attorney's fees plus the costs of the suit. 3

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Summons and a copy of the complaint were served on Bradford on 13 May 1987. In response thereto, she filed
two (2) motions for extension of time to file her Answer which were both granted by the trial court. The first was
filed through Atty. Miguel Famularcano, Jr., who asked for a 20-day extension from 28 May 1987. The second,
filed through the law firm of Luna, Sison and Manas, sought a 15-day extension from 17 June 1987. 4 Thus,
Bradford had up to 1 July 1987 to file her Answer. Instead of doing so, however, she, together with the
government of the United States of America (hereinafter referred to as the public petitioner), filed on 25 June
1987, also through the law firm of Luna, Sison and Manas, a Motion to Dismiss 5 based on the following grounds:
1) (This) action is in effect a suit against the United States of America, a foreign sovereign
immune from suit without its consent for the cause of action pleaded in the complaint; and
2) Defendant, Maxine Bradford, as manager of the US Navy Exchange Branch at JUSMAG,
Quezon City, is immune from suit for act(s) done by her in the performance of her official
functions under the Philippines-United States Military Assistance Agreement of 1947 and Military
Bases Agreement of 1947, as amended. 6
In support of the motion, the petitioners claimed that JUSMAG, composed of an Army, Navy and Air Group, had
been established under the Philippine-United States Military Assistance Agreement entered into on 21 March
1947 to implement the United States' program of rendering military assistance to the Philippines. Its headquarters
in Quezon City is considered a temporary installation under the provisions of Article XXI of the Military Bases
Agreement of 1947. Thereunder, "it is mutually agreed that the United States shall have the rights, power and
authority within the bases which are necessary for the establishment, use and operation and defense thereof or
appropriate for the control thereof." The 1979 amendment of the Military Bases Agreement made it clear that the
United States shall have "the use of certain facilities and areas within the bases and shall have effective
command and control over such facilities and over United States personnel, employees, equipment and material."
JUSMAG maintains, at its Quezon City headquarters, a Navy Exchange referred to as the NEX-JUSMAG.
Checking of purchases at the NEX is a routine procedure observed at base retail outlets to protect and safeguard
merchandise, cash and equipment pursuant to paragraphs 2 and 4(b) of NAVRESALEACT SUBIC INST.
5500.1. 7Thus, Bradford's order to have purchases of all employees checked on 22 January 1987 was made in the
exercise of her duties as Manager of the NEX-JUSMAG.
They further claimed that the Navy Exchange (NAVEX), an instrumentality of the U.S. Government, is considered
essential for the performance of governmental functions. Its mission is to provide a convenient and reliable
source, at the lowest practicable cost, of articles and services required for the well-being of Navy personnel, and
of funds to be used for the latter's welfare and recreation. Montoya's complaint, relating as it does to the mission,
functions and responsibilities of a unit of the United States Navy, cannot then be allowed. To do so would
constitute a violation of the military bases agreement. Moreover, the rights, powers and authority granted by the
Philippine government to the United States within the U.S. installations would be illusory and academic unless the
latter has effective command and control over such facilities and over American personnel, employees, equipment
and material. Such rights, power and authority within the bases can only be exercised by the United States
through the officers and officials of its armed forces, such as Bradford. Baer vs. Tizon 8 and United States of
America
vs.
Ruiz 9 were invoked to support these claims.
On 6 July 1987, Montoya filed a motion for preliminary attachment 10 on the ground that Bradford was about to
depart from the country and was in the process of removing and/or disposing of her properties with intent to
defraud her creditors. On 14 July 1987, Montoya filed her opposition to the motion to dismiss 11 alleging therein
that the grounds proffered in the latter are bereft of merit because (a) Bradford, in ordering the search upon her

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person and belongings outside the NEX JUSMAG store in the presence of onlookers, had committed an improper,
unlawful and highly discriminatory act against a Filipino employee and had exceeded the scope of her authority;
(b) having exceeded her authority, Bradford cannot rely on the sovereign immunity of the public petitioner
because her liability is personal; (c) Philippine courts are vested with jurisdiction over the case because Bradford
is a civilian employee who had committed the challenged act outside the U.S. Military Bases; such act is not one
of those exempted from the jurisdiction of Philippine courts; and (d) Philippine courts can inquire into the factual
circumstances of the case to determine whether or not Bradford had acted within or outside the scope of her
authority.
On 16 July 1987, public petitioner and Bradford filed a reply to Montoya's opposition and an opposition to the
motion for preliminary attachment. 12
On 17 July 1987, 13 the trial court 14 resolved both the motion to dismiss and the motion for preliminary attachment
in this wise:
On the motion to dismiss, the grounds and arguments interposed for the dismissal of this case
are determined to be not indubitable. Hence, the motion is denied for lack of merit.
The motion for preliminary attachment is granted in the interest of justice, upon the plaintiff's filing
of a bond in the sum of P50,000.00.
Upon Montoya's filing of the required bond, the trial court issued on 28 July 1987 an Order 15 decreeing the
issuance of a writ of attachment and directing the sheriff to serve the writ immediately at the expense of the
private respondent. The writ of attachment was issued on that same date. 16
Instead of filing a motion to reconsider the last two (2) orders, or an answer insofar as Bradford is concerned
both the latter and the public petitioner filed on 6 August 1987 the instant petition to annul and set aside the above
Resolution of 17 July 1987 and the writ of attachment issued pursuant thereto. As grounds therefor, they allege
that:
10. The respondent judge committed a grave abuse of discretion amounting to lack of jurisdiction
in denying the motion to dismiss the complaint in Civil Case No. 224-87 "for lack of merit." For the
action was in effect a suit against the United States of America, a foreign sovereign immune from
suit without its consent for the cause of action pleaded in the complaint, while its co-petitioner
was immune from suit for act(s) done by her in the performance of her official functions as
manager of the US Navy Exchange Branch at the Headquarters of JUSMAG, under the
Philippines-United States Military Assistance Agreement of 1947 and Military Bases Agreement of
1947, as amended. 17
On 5 August 1987, the trial court set Civil Case No. 224-87 for pre-trial and trial on 27 August 1987 at 9:30 a.m. 18
On 12 August 1987, this Court resolved to require the respondents to comment on the petition.
On
19
August
1987,
petitioners
filed
with
the
trial
to Suspend Proceedings 20 which the latter denied in its Order of 21 August 1987. 21

PIL

19

court

23

Motion

In the meantime, however, for failure to file an answer, Bradford was declared in default in Civil Case No. 224-87
and Montoya was allowed to present her evidence ex-parte. 22 She thus took the witness stand and presented
Mrs. Nam Thi Moore and Mrs. Miss Yu as her witnesses.
On 10 September 1987, the trial court rendered its decision
which reads:

23

in Civil Case No. 224-87, the dispositive portion of

Prescinding from the foregoing, it is hereby determined that the unreasonable search on the
plaintiff's person and bag caused (sic) done recklessly and oppressively by the defendant,
violated, impaired and undermined the plaintiff's liberty guaranteed by the Constitution, entitling
her to moral and exemplary damages against the defendant. The search has unduly subjected
the plaintiff to intense humiliation and indignities and had consequently ridiculed and
embarrassed publicly said plaintiff so gravely and immeasurably.
WHEREFORE, judgment is hereby rendered for the plaintiff and against the defendant Maxine
Bradford assessing the latter to pay unto the former the sums of P300,000.00 for moral damages,
P100,000.00 for exemplary damages and P50,000.00 for actual expenses and attorney's fees.
No costs.
SO ORDERED. 24
Bradford received a copy of the decision on 21 September 1987. On that same date, she and the public petitioner
filed with this Court a Petition for Restraining Order 25 which sought to have the trial court's decision vacated and
to prevent the execution of the same; it was also prayed that the trial court be enjoined from continuing with Civil
Case No. 224-87. We noted this pleading in the Resolution of 23 September 1987. 26
In the meantime, since no motion for reconsideration or appeal had been interposed by Bradford challenging the
10 September 1987 Decision which she had received on 21 September 1987, respondent Judge issued on 14
October 1987 an order directing that an entry of final judgment be made. A copy thereof was received by Bradford
on 21 October, 1987. 27
Also on 14 October 1987, Montoya filed her Comment with Opposition to the Petition for Restraining
Order. 28Respondent Judge had earlier filed his own Comment to the petition on 14 September 1987. 29
On 27 October 1987, Montoya filed before the trial court a motion for the execution of the Decision of 10
September 1987 which petitioners opposed on the ground that although this Court had not yet issued in this case
a temporary restraining order, it had nevertheless resolved to require the respondents to comment on the petition.
It was further averred that execution thereof would cause Bradford grave injury; moreover, enforcement of a writ
of execution may lead to regrettable incidents and unnecessarily complicate the situation in view of the public
petitioner's position on the issue of the immunity of its employees. In its Resolution of 11 November 1987, the trial
court directed the issuance of a writ of execution. 30
Consequently, the petitioners filed on 4 December 1987, a Manifestation and Motion reciting the foregoing
incidents obtaining before the trial court and praying that their petition for a restraining order be resolved. 31

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24

On 7 December 1987, this Court issued a Temporary Restraining Order "ENJOINING the respondents and the
Provincial Sheriff of Pasig, Metro Manila, from enforcing the Decision dated September 10, 1987, and the Writs of
Attachment and Execution issued in Civil Case No. 224-87." 32
On 28 November 1988, after the private respondent filed a Rejoinder to the Consolidated Reply to the Comments
filed by the petitioners, this Court gave due course to the petition and required the parties to submit their
respective memoranda-Petitioners filed their Memorandum on 8 February 1989 33 while private respondent filed
her Memorandum on 14 November 1990. 34
The kernel issue presented in this case is whether or not the trial court committed grave abuse of discretion in
denying the motion to dismiss based on the following grounds: (a) the complaint in Civil Case No. 224-87 is in
effect a suit against the public petitioner, a foreign sovereign immune from suit which has not given consent to
such suit and (b) Bradford is immune from suit for acts done by her in the performance of her official functions as
manager of the U.S. Navy Exchange of JUSMAG pursuant to the Philippines-United States Military Assistance
Agreement of 1947 and the Military Bases Agreement of 1947, as amended.
Aside from maintaining the affirmative view, the public petitioner and Bradford even go further by asserting that
even if the latter's act were ultra vires she would still be immune from suit for the rule that public officers or
employees may be sued in their personal capacity for ultra vires and tortious acts is "domestic law" and not
applicable in International Law. It is claimed that the application of the immunity doctrine does not turn upon the
lawlessness of the act or omission attributable to the foreign national for if this were the case, the concept of
immunity would be meaningless as inquiry into the lawlessness or illegality of the act or omission would first have
to be made before considering the question of immunity; in other words, immunity will lie only if such act or
omission is found to be lawful.
On the other hand, Montoya submits that Bradford is not covered by the protective mantle of the doctrine of
sovereign immunity from suit as the latter is a mere civilian employee of JUSMAG performing non-governmental
and proprietary functions. And even assuming arguendo that Bradford is performing governmental functions, she
would still remain outside the coverage of the doctrine of state immunity since the act complained of is ultra
viresor outside the scope of her authority. What is being questioned is not the fact of search alone, but also the
manner in which the same was conducted as well as the fact of discrimination against Filipino employees.
Bradford's authority to order a search, it is asserted, should have been exercised with restraint and should have
been in accordance with the guidelines and procedures laid down by the cited "NAVRESALEACT, Subic Inst."
Moreover, ultra vires acts of a public officer or employee, especially tortious and criminal acts, are his private acts
and may not be considered as acts of the State. Such officer or employee alone is answerable for any liability
arising therefrom and may thus be proceeded against in his personal capacity.
Montoya further argues that both the acts and person of Bradford are not exempt from the Philippine courts'
jurisdiction because (a) the search was conducted in a parking lot at Scout Borromeo, Quezon City, outside the
JUSMAG store and, therefore, outside the territorial control of the U.S. Military Bases in the Philippines; (b)
Bradford does not possess diplomatic immunity under Article 16(b) of the 1953 Military Assistance Agreement
creating the JUSMAG which provides that only the Chief of the Military Advisory Group and not more than six (6)
other senior members thereof designated by him will be accorded diplomatic immunity; 35 and (c) the acts
complained of do not fall under those offenses where the U.S. has been given the right to exercise its jurisdiction
(per Article 13 of the 1947 Military Bases Agreement, as amended by the, Mendez-Blair Notes of 10 August
1965). 36

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25

Finally, Montoya maintains that at the very least, Philippine courts may inquire into the factual circumstances of
the case to determine whether petitioner Bradford is immune from suit or exempt from Philippine jurisdiction. To
rule otherwise would render the Philippine courts powerless as they may be easily divested of their jurisdiction
upon the mere invocation of this principle of immunity from suit.
A careful review of the records of this case and a judicious scrutiny of the arguments of both parties yield nothing
but the weakness of the petitioners' stand. While this can be easily demonstrated, We shall first consider some
procedural matters.
Despite the fact that public petitioner was not impleaded as a defendant in Civil Case No. 224-87, it nevertheless
joined Bradford in the motion to dismiss on the theory that the suit was in effect against it without, however,
first having obtained leave of court to intervene therein. This was a procedural lapse, if not a downright improper
legal tack. Since it was not impleaded as an original party, the public petitioner could, on its own volition, join in
the case only by intervening therein; such intervention, the grant of which is discretionary upon the court, 37 may
be allowed only upon a prior motion for leave with notice to all the parties in the action. Of course, Montoya could
have also impleaded the public petitioner as an additional defendant by amending the complaint if she so believed
that the latter is an indispensible or necessary party.
Since the trial court entertained the motion to dismiss and the subsequent pleadings filed by the public petitioner
and Bradford, it may be deemed to have allowed the public petitioner to intervene. Corollarily, because of its
voluntary appearance, the public petitioner must be deemed to have submitted itself to the jurisdiction of the trial
court.
Moreover, the said motion does not specify any of the grounds for a motion to dismiss enumerated in Section 1,
Rule 16 of the Rules of Court. It merely recites state immunity on the part of the public petitioner and immunity on
the part of Bradford for the reason that the act imputed to her was done in the performance of her official
functions. The upshot of this contention is actually lack of cause of action a specific ground for dismissal under
the aforesaid Rule because assuming arguendo that Montoya's rights had been violated by the public
petitioner and Bradford, resulting in damage or injury to the former, both would not be liable therefor, and no
action may be maintained thereon, because of the principle of state immunity.
The test of the sufficiency of the facts to constitute a cause of action is whether or not, admitting the facts alleged
in the complaint, the court could render a valid judgment upon the same, in accordance with the prayer in the
complaint. 38
A motion to dismiss on the ground of failure to state a cause of action hypothetically admits the truth of the
allegations in the complaint.
In deciding a motion to dismiss, a court may grant, deny, allow amendments to the pleadings or defer the hearing
and determination of the same if the ground alleged does not appear to be indubitable. 39 In the instant case, while
the trial court concluded that "the grounds and arguments interposed for the dismissal" are not "indubitable," it
denied the motion for lack of merit. What the trial court should have done was to defer there solution on the
motion instead of denying it for lack of merit.
In any event, whatever may or should have been done, the public petitioner and Bradford were not expected to
accept the verdict, making their recourse to this Court via the instant petition inevitable. Thus, whether the trial
court should have deferred resolution on or denied outright the motion to dismiss for lack of merit is no longer
pertinent or relevant.

PIL

26

The complaint in Civil Case No. 224-87 is for damages arising from what Montoya describes as an "illegal search"
on her "person and belongings" conducted outside the JUSMAG premises in front of many people and upon the
orders of Bradford, who has the propensity for laying suspicion on Filipinos for theft or shoplifting. It is averred that
the said search was directed only against Montoya.
Howsoever viewed, it is beyond doubt that Montoya's cause of action is premised on the theory that the acts
complained of were committed by Bradford not only outside the scope of her authority or more specifically, in
her private capacity but also outside the territory where she exercises such authority, that is, outside the NEXJUSMAG particularly, at the parking area which has not been shown to form part of the facility of which she
was the manager. By their motion to dismiss, public petitioner and Bradford are deemed to have hypothetically
admitted the truth of the allegation in the complaint which support this theory.
The doctrine of state immunity and the exceptions thereto are summarized in Shauf vs. Court of Appeals, 40 thus:
I. The rule that a state may not be sued without its consent, now expressed in Article XVI Section
3, of the 1987 Constitution, is one of the generally accepted principles of international law that we
have adopted as part of the law of our land under Article II, Section 2. This latter provision merely
reiterates a policy earlier embodied in the 1935 and 1973 Constitutions and also intended to
manifest our resolve to abide by the rules of the international community. 41
While the doctrine appears to prohibit only suits against the state without its consent, it is also
applicable to complaints filed against officials of the state for acts allegedly performed by them in
the discharge of their duties. The rule is that if the judgment against such officials will require the
state itself to perform an affirmative act to satisfy the same, such as the appropriation of the
amount needed to pay the damages awarded against them, the suit must be regarded as against
the state itself although it has not been formally impleaded. 42 It must be noted, however, that the
rule is not so all-encompassing as to be applicable under all circumstances.
It is a different matter where the public official is made to account in his capacity as such for acts
contrary to law and injurious to the rights of plaintiff. As was clearly set forth by Justice Zaldivar in
Director of the Bureau of Telecommunications, et al. vs. Aligaen, etc., et al. 43 "Inasmuch as the
State authorizes only legal acts by its officers, unauthorized acts of government officials or officers
are not acts of the State, and an action against the officials or officers by one whose rights have been
invaded or violated by such acts, for the protection of his rights, is not a suit against the State within the rule
of immunity of the State from suit. In the same tenor, it has been said that an action at law or suit in equity
against a State officer or the director of a State department on the ground that, while claiming to act or the
State, he violates or invades the personal and property rights of the plaintiff, under an unconstitutional act or
under an assumption of authority which he does not have, is not a suit against the State within
the constitutional provision that the State may not be sued without its consent." 44 The rationale for this ruling
is that the doctrinaire of state immunity cannot be used as an instrument for perpetrating an injustice. 45
In the case of Baer, etc. vs. Tizon, etc., et al., 46 it was ruled that:
There should be no misinterpretation of the scope of the decision reached by this Court.
Petitioner, as the Commander of the United States Naval Base in Olongapo, does not
possess diplomatic immunity. He may therefore be proceeded against in his personal
capacity, or when the action taken by him cannot be imputed to the government which he
represents.
Also, in Animos, et al. vs. Philippine Veterans Affairs Office, et al., 47 we held that:

PIL

27

. . . it is equally well-settled that where a litigation may have adverse consequences on the
public treasury, whether in the disbursements of funds or loss of property, the public
official proceeded against not being liable in his personal capacity, then the doctrine of
non-suability may appropriately be invoked. It has no application, however, where the suit
against such a functionary had to be instituted because of his failure to comply with the
duty imposed by statute appropriating public funds for the benefit of plaintiff or
petitioner. . . . .
The aforecited authorities are clear on the matter. They state that the doctrine of immunity from suit will not
apply and may not be invoked where the public official is being sued in his private and personal capacity as
an ordinary citizen. The cloak of protection afforded the officers and agents of the government is removed
the moment they are sued in their individual capacity. This situation usually arises where the public official
acts without authority or in excess of the powers vested in him. It is a well-settled principle of law that a
public official may be liable in his personal private capacity for whatever damage he may have caused by his
act
done
with malice and in bad faith, or beyond the scope of his authority or jurisdiction. 48
The agents and officials of the United States armed forces stationed in Clark Air Base are no exception to
this rule. In the case of United States of America, et al. vs. Guinto, etc., et al., ante, 49 we declared:
It bears stressing at this point that the above observations do not confer on the United
States of America Blanket immunity for all acts done by it or its agents in the Philippines.
Neither may the other petitioners claim that they are also insulated from suit in this country
merely because they have acted as agents of the United States in the discharge of their
official functions.
Since it is apparent from the complaint that Bradford was sued in her private or personal capacity for acts allegedly done
beyond the scope and even beyond her place of official functions, said complaint is not then vulnerable to a motion to dismiss
based on the grounds relied upon by the petitioners because as a consequence of the hypothetical admission of the truth of
the allegations therein, the case falls within the exception to the doctrine of state immunity.
In the recent cases of Williams vs. Rarang 50 and Minucher vs. Court of Appeals, 51 this Court reiterated this exception. In the
former, this Court observed:
There is no question, therefore, that the two (2) petitioners actively participated in screening the features and
articles in the POD as part of their official functions. Under the rule that U.S. officials in the performance of
their official functions are immune from suit, then it should follow that petitioners may not be held liable for
the questioned publication.
It is to be noted, however, that the petitioners were sued in their personal capacities for their alleged tortious
acts in publishing a libelous article.
The question, therefore, arises are American naval officers who commit a crime or tortious act while
discharging official functions still covered by the principle of state immunity from suit? Pursuing the question
further, does the grant of rights, power, and authority to the United States under the RP-US Bases Treaty
cover immunity of its officers from crimes and torts? Our answer is No.
In the latter, even on the claim of diplomatic immunity which Bradford does not in fact pretend to have in the instant case as
she is not among those granted diplomatic immunity under Article 16(b) of the 1953 Military Assistance Agreement creating the
JUSMAG 52 this Court ruled:
Even Article 31 of the Vienna Convention on Diplomatic Relations admits of exceptions. It reads:

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28

1. A diplomatic agent shall enjoy immunity from the criminal jurisdiction of the receiving
State. He shall also enjoy immunity from its civil and administrative jurisdiction except in
the case of:
xxx xxx xxx
(c) an action relating to any professional or commercial activity
exercised by the diplomatic agent in the receiving State outside his
official functions(Emphasis supplied).
There can be no doubt that on the basis of the allegations in the complaint, Montoya has a sufficient and viable cause of
action. Bradford's purported non-suability on the ground of state immunity is then a defense which may be pleaded in the
answer and proven at the trial.
Since Bradford did not file her Answer within the reglementary period, the trial court correctly declared her in default upon
motion of the private respondent. The judgment then rendered against her on 10 September 1987 after the ex parte reception
of the evidence for the private respondent and before this Court issued the Temporary Restraining Order on 7 December 1987
cannot be impugned. The filing of the instant petition and the knowledge thereof by the trial court did not prevent the latter from
proceeding
with
Civil
Case
No.
224-87. "It is elementary that the mere pendency of a special civil action for certiorari, commenced in relation to a case
pending before a lower Court, does not interrupt the course of the latter when there is no writ of injunction restraining it." 53
WHEREFORE, the instant petition is DENIED for lack of merit. The Temporary Restraining Order of 7 December 1987 is
hereby LIFTED.
Costs against petitioner Bradford.
SO ORDERED.
Narvasa, C.J., Cruz, Feliciano, Padilla, Bidin, Grio-Aquino, Regalado, Romero, Nocon, Bellosillo, Melo and Campos, Jr., JJ.,
concur.
Quiason, J., took no part.
Gutierrez, Jr., J., is on leave.

USA and Bradford v. Hon. Luis R. Reyes and Montoya

[219 SCRA 192, March 1, 1993]
G.R. No. 79253
Facts:
Private respondent [Montoya] is an American citizen was employed as an identification (I.D.) checker at
the U.S. Navy Exchange (NEX) at the Joint United States Military Assistance Group (JUSMAG) headquarters in
Quezon City. Petitioner [Bradford] also worked at NEX JUSMAG as an activity manager. There was an incident

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29

on 22 January 1987 whereby Bradford had Montoyas person and belongings searched in front of many curious
onlookers. This caused Montoya to feel aggrieved and to file a suit for damages.
Contentions:
Bradford claimed that she was immune from suit because:
1) (This) action is in effect a suit against the United States of America, a foreign sovereign immune from suit
without its consent for the cause of action pleaded in the complaint; and
2) Defendant, Maxine Bradford, as manager of the US Navy Exchange Branch at JUSMAG, Quezon City, is
immune from suit for act(s) done by her in the performance of her official functions under the Philippines-United
States Military Assistance Agreement of 1947 and Military Bases Agreement of 1947, as amended.
Montoya argued that:
(a) Bradford, in ordering the search upon her person and belongings outside the NEX JUSMAG store in the
presence of onlookers, had committed an improper, unlawful and highly discriminatory act against a Filipino
employee and had exceeded the scope of her authority; (b) having exceeded her authority, Bradford cannot rely
on the sovereign immunity of the public petitioner because her liability is personal; (c) Philippine courts are vested
with jurisdiction over the case because Bradford is a civilian employee who had committed the challenged act
outside the U.S. Military Bases; such act is not one of those exempted from the jurisdiction of Philippine courts;
and (d) Philippine courts can inquire into the factual circumstances of the case to determine whether or not
Bradford had acted within or outside the scope of her authority.
The doctrine of state immunity is at the core of this controversy.
Doctrine of State Immunity:
The doctrine of state immunity and the exceptions thereto are summarized in Shauf vs. Court of Appeals, thus:
I. The rule that a state may not be sued without its consent, now expressed in Article XVI Section 3, of the 1987
Constitution, is one of the generally accepted principles of international law that we have adopted as part of the
law of our land under Article II, Section 2. This latter provision merely reiterates a policy earlier embodied in the
1935 and 1973 Constitutions and also intended to manifest our resolve to abide by the rules of the international
community.
While the doctrine appears to prohibit only suits against the state without its consent, it is also applicable to
complaints filed against officials of the state for acts allegedly performed by them in the discharge of their duties.
The rule is that if the judgment against such officials will require the state itself to perform an affirmative act to
satisfy the same, such as the appropriation of the amount needed to pay the damages awarded against them, the
suit must be regarded as against the state itself although it has not been formally impleaded. It must be noted,
however, that the rule is not so all-encompassing as to be applicable under all circumstances.
It is a different matter where the public official is made to account in his capacity as such for acts contrary to law
and injurious to the rights of plaintiff. As was clearly set forth by Justice Zaldivar in Director of the Bureau of
Telecommunications, et al. vs. Aligaen, etc., et al. "Inasmuch as the State authorizes only legal acts by its officers,
unauthorized acts of government officials or officers are not acts of the State, and an action against the officials or
officers by one whose rights have been invaded or violated by such acts, for the protection of his rights, is not a
suit against the State within the rule of immunity of the State from suit. In the same tenor, it has been said that an
action at law or suit in equity against a State officer or the director of a State department on the ground that, while
claiming to act or the State, he violates or invades the personal and property rights of the plaintiff, under an
unconstitutional act or under an assumption of authority which he does not have, is not a suit against the State
within the constitutional provision that the State may not be sued without its consent." The rationale for this ruling
is that the doctrinaire of state immunity cannot be used as an instrument for perpetrating an injustice.
In the case of Baer, etc. vs. Tizon, etc., et al., it was ruled that:

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30

There should be no misinterpretation of the scope of the decision reached by this Court. Petitioner, as the
Commander of the United States Naval Base in Olongapo, does not possess diplomatic immunity. He may
therefore be proceeded against in his personal capacity, or when the action taken by him cannot be imputed to
the government which he represents.
Also, in Animos, et al. vs. Philippine Veterans Affairs Office, et al., we held that:
. . . it is equally well-settled that where a litigation may have adverse consequences on the public treasury,
whether in the disbursements of funds or loss of property, the public official proceeded against not being liable in
his personal capacity, then the doctrine of non-suability may appropriately be invoked. It has no application,
however, where the suit against such a functionary had to be instituted because of his failure to comply with the
duty imposed by statute appropriating public funds for the benefit of plaintiff or petitioner. . . . .
The aforecited authorities are clear on the matter. They state that the doctrine of immunity from suit will not apply
and may not be invoked where the public official is being sued in his private and personal capacity as an ordinary
citizen. The cloak of protection afforded the officers and agents of the government is removed the moment they
are sued in their individual capacity. This situation usually arises where the public official acts without authority or
in excess of the powers vested in him. It is a well-settled principle of law that a public official may be liable in his
personal private capacity for whatever damage he may have caused by his act donewith malice and in bad faith,
or beyond the scope of his authority or jurisdiction.
The agents and officials of the United States armed forces stationed in Clark Air Base are no exception to this
rule. [footnotes omitted]
In the present case, it appears that Bradford was sued for acts done beyond the scope and beyond her
place of official functions. Thus she may not avail of immunity.
She may not even avail of diplomatic immunity because Article 31 of the Vienna Convention on Diplomatic
Relations admits of exceptions. It reads:
1. A diplomatic agent shall enjoy immunity from the criminal jurisdiction of the receiving State. He shall also enjoy
immunity from its civil and administrative jurisdiction except in the case of:
xxx xxx xxx
(c) an action relating to any professional or commercial activity exercised by the diplomatic agent in the receiving
State outside his official functions (Emphasis supplied).
Disposition:
Petition was dismissed.

Republic of the Philippines

SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 90314

PIL

November 27, 1990

31

LOIDA Q. SHAUF and JACOB SHAUF, Petitioners,

vs.
HON. COURT OF APPEALS, DON E. DETWILER and ANTHONY PERSI, Respondents.
REGALADO, J.:
In this petition for review on certiorari, petitioners would have us reverse and set aside the decision rendered by
respondent Court of Appeals on August 22, 1989, in CA-G.R. CV No. 17932, entitled "Loida Shauf and Jacob
Shauf, Plaintiffs-Appellants, versus Don Detwiler and Anthony Persi, Defendants-Appellants," 1 dismissing
petitioners complaint for damages filed before the Regional Trial Court, Branch LVI, Angeles City, in Civil Case
No. 2783 thereof, and its subsequent resolution denying petitioners motion for the reconsideration of its aforesaid
decision.
As found by respondent court,2 Clark Air Base is one of the bases established and maintained by the United
States by authority of the agreement between the Philippines and the United States concerning military bases
which entered into force on March 26, 1947.
The Third Combat Support Group, a unit of Clark Air Base, maintains a Central Civilian Personnel Office (CCPO)
charged with the responsibility for civilian personnel management and administration. It is through its civilian
personnel officer that the base commander is responsible for direction and administration of civilian personnel
program, including advising management and operating officials on civilian personnel matters. Acting for the
commander, the civilian personnel officer is the administrative official in charge of the activities of the CCPO, and
the commander relies on him to carry out all aspects of the civilian personnel program. The CCPO personnel
program encompasses placement and staffing, position management and classification.
The Third Combat Support Group also maintains an Education Branch, Personnel Division, which provides an
education program for military personnel, U.S. civilian employees, and adult dependents, assigned or attached to
Clark Air Base. Its head, the education director, is responsible directly to the base director of personnel for
administering the education services program for Clark Air Base. In this capacity, and within broad agency
policies, is delegated to him the full responsibility and authority for the technical, administrative and management
functions of the program. As part of his duties, the education director provides complete academic and vocational
guidance for military dependents, including counseling, testing and test interpretation. During the time material to
the complaint, private respondent Don Detwiler was civilian personnel officer, while private respondent Anthony
Persi was education director.3
Petitioner Loida Q. Shauf, a Filipino by origin and married to an American who is a member of the United States
Air Force, applied for the vacant position of Guidance Counselor, GS17109, in the Base Education Office at Clark
Air Base, for which she is eminently qualified. As found by the trial court, she received a Master of Arts degree
from the University of Sto. Tomas, Manila, in 1971 and has completed 34 semester hours in psychology-guidance
and 25 quarter hours in human behavioral science; she has also completed all course work in human behavior
and counseling psychology for a doctoral degree; she is a civil service eligible; and, more importantly, she had
functioned as a Guidance Counselor at the Clark Air Base at the GS 1710-9 level for approximately four years at
the time she applied for the same position in 1976. 4
By reason of her non-selection to the position, petitioner Loida Q. Shauf filed an equal employment opportunity
complaint against private respondents, for alleged discrimination against the former by reason of her nationality
and sex. The controversy was investigated by one Rudolph Duncan, an appeals and grievance examiner
assigned to the Office of Civilian Personnel Operations, Appellate Division, San Antonio, Texas, U.S.A. and what

PIL

32

follows are taken from his findings embodied in a report duly submitted by him to the Equal Opportunity Officer on
February 22, 1977.5
On or about October 1976, the position of Guidance Counselor, GS 1710-9, became vacant in the Base
Education Office, Clark Air Base. A standard Form 52 was submitted to the Civilian Personnel Office to fill said
position. The Civilian Personnel Division took immediate steps to fill the position by advertisement in the Clark Air
Base Daily Bulletin #205 dated October 21, 1976. As a result of the advertisement, one application was received
by the Civilian Personnel Office and two applications were retrieved from the applicants supply file in the Civilian
Personnel Office. These applications were that of Mrs. Jean Hollenshead, an employee of the DOD Schools at
Clark Air Base, Mrs. Lydia B. Gaillard, an unemployed dependent, and Mrs. Loida Q. Shauf. All three applications
were reviewed and their experiences were considered qualifying for the advertised position.
On November 11, 1976, the application of Loida Q. Shauf was referred to Mr. Anthony Persi, with the applications
of Mrs. Jean Hollenshead and Mrs. Lydia Gaillard, to be considered for the position of Guidance Counselor, GS
1710-9, Mr. Persi, after review of the applications, stated that upon screening the applications he concluded that
two applicants had what he considered minimum qualifications for the position. The two applicants were Mrs.
Hollenshead and Mrs. Gaillard. In the case of Loida Q. Shauf, Mr. Persi felt that her application was quite
complete except for a reply to an inquiry form attached to the application. This inquiry form stated that the
National Personnel Records Center, St. Louis, Missouri, was unable to find an official personnel folder for Loida
Q. Shauf. Mr. Persi said that as a result of the National Personnel Records Center, GSA, not being able to find
any records on Loida Q. Shauf, this raised some questions in his mind as to the validity of her work experience.
As a result of his reservations on Loida Q. Shaufs work experience and his conclusions that the two other
applications listed minimum qualifications, Mr. Persi decided to solicit additional names for consideration.
Subsequently in his correspondence dated November 12, 1976, Mr. Persi returned the three applications to the
Civilian Personnel Office without a selection decision. Mr. Persi also requested in his correspondence that the
Civilian Personnel Office initiate immediate inquiry to the Central Oversea Rotation and Recruiting Office
(CORRO) for the submission of a list of highly qualified candidates. He further stated in his correspondence that
the three applicants who had indicated an interest would be considered with the CORRO input for selection.
As a result of Mr. Persis request, an AF Form 1188 "Oversea Civilian Personnel Request" was submitted to
CORRO on November 12, 1976. This request in fact asked for one Guidance Counselor, GS 1710-9. The form
listed the fact that local candidates are available. However, instead of getting a list of candidates for consideration,
Mr. Persi was informed by CORRO, through the Civilian Personnel Office in their December 15, 1976 message
that a Mr. Edward B. Isakson from Loring AFB, Maine, was selected for the position. Mr. Persi stated, when
informed of CORROs selection, that he had heard of Mr. Isakson and, from what he had heard, Mr. Isakson was
highly qualified for the position; therefore, he wished to have the selection stand. This statement was denied by
Mr. Persi. Mr. Isakson was placed on the rolls at Clark Air Base on January 24, 1977. 6
Said examiner, however, also stated in his findings that, by reason of petitioner Loida Q. Shaufs credentials which
he recited therein, she is and was at the time of the vacancy, 7 highly qualified for the position of Guidance
Counselor, GS 1710-9. In connection with said complaint, a Notice of Proposed Disposition of Discrimination
Complaint, dated May 16, 1977, 8 was served upon petitioner Loida Q. Shauf stating that because the individual
selected did not meet the criteria of the qualification requirements, it was recommended "that an overhire GS
1710-9 Assistant Education Advisor position be established for a 180 day period. x x x. The position should be
advertised for local procurement on a best qualified basis with the stipulation that if a vacancy occurs in a
permanent GS 1710-9 position the selectee would automatically be selected to fill the vacancy. If a position is not

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vacated in the 180 day period the temporary overhire would be released but would be selected to fill a future
vacancy if the selectee is available."
During that time, private respondents already knew that a permanent GS 1710-9 position would shortly be vacant,
that is, the position of Mrs. Mary Abalateo whose appointment was to expire on August 6, 1977 and this was
exactly what private respondent Detwiler had in mind when he denied on June 27, 1977 Mrs. Abalateos request
for extension of March 31, 1977. However, private respondents deny that Col. Charles J. Corey represented to
petitioner Loida Q. Shauf that she would be appointed to the overhire position and to a permanent GS 1710-9
position as soon as it became vacant, which allegedly prompted the latter to accept the proposed disposition.
Contrary to her expectations, petitioner Loida Q. Shauf was never appointed to the position occupied by Mrs.
Abalateo whose appointment was extended indefinitely by private respondent Detwiler. 9
Feeling aggrieved by what she considered a shabby treatment accorded her, petitioner Loida Q. Shauf wrote the
U.S. Civil Service Commission questioning the qualifications of Edward Isakson. Thereafter, said commission sent
a communication addressed to private respondent Detwiler,10 finding Edward Isakson not qualified to the position
of Guidance Counselor, GS 1710-9, and requesting that action be taken to remove him from the position and that
efforts be made to place him in a position for which he qualifies. Petitioner Loida Q. Shauf avers that said
recommendation was ignored by private respondent Detwiler and that Isakson continued to occupy said position
of guidance counselor.
Petitioner Loida Q. Shauf likewise wrote the Base Commander of Clark Air Base requesting a hearing on her
complaint for discrimination. Consequently, a hearing was held on March 29, 1978 before the U.S. Department of
Air Force in Clark Air Base.11
Before the Department of Air Force could render a decision, petitioner Loida Q. Shauf filed a complaint for
damages, dated April 27, 1978, against private respondents Don Detwiler and Anthony Persi before the Regional
Trial Court, Branch LVI at Angeles City, docketed as Civil Case No. 2783, for the alleged discriminatory acts of
herein private respondents in maliciously denying her application for the GS 1710-9 position.
Private respondents, as defendants in Civil Case No. 2783, filed a motion to dismiss on the ground that as officers
of the United States Armed Forces performing official functions in accordance with the powers vested in them
under the Philippine-American Military Bases Agreement, they are immune from suit. The motion to dismiss was
denied by the trial court. A motion for reconsideration was likewise denied.
Consequently, private respondents filed an Answer reiterating the issue of jurisdiction and alleging, inter alia, that
defendant Persis request to Central Oversea Rotation and Recruiting Office (CORRO) was not for appointment of
a person to the position of Guidance Counselor, GS 1710-9, but for referrals whom defendant Persi would
consider together with local candidates for the position; that the extension of the employment of Mrs. Abalato was
in accordance with applicable regulation and was not related to plaintiff Loida Q. Shaufs discrimination complaint;
that the decision was a joint decision of management and CCPO reached at a meeting on June 29, 1977 and
based on a letter of the deputy director of civilian personnel, Headquarters Pacific Air Forces, dated June 15,
1977; and that the ruling was made known to and amplified by the director and the deputy director of civilian
personnel in letters to petitioner Loida Q. Shauf dated August 30, 1977 and September 19, 1977.
The parties submitted a Partial Stipulation of Facts in the court a quo providing, in part, as follows:
a) In October 1976, the position of guidance counselor, GS-1710-9, at Clark Air Base was vacant;

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b) Plaintiff Loida Q, Shauf, a qualified dependent locally available, was among those who applied for said
vacant position of guidance counselor, GS-1710-9;
c) Plaintiff Loida Q. Shauf at the time she filed her aforesaid application was qualified for the position of
guidance counselor, GS-1710-9;
d) Civilian Personnel Office accomplished and forwarded to CORRO an AF Form 1188 covering the
position of guidance counselor, GS-1710-9, applied for by plaintiff Loida Q. Shauf;
e) U.S. Department of Defense Instructions (DODI) No. 1400.23 under Policy and Procedures provides
that"Where qualified dependents of military or civilian personnel of the Department of Defense are locally available for
appointment to positions in foreign areas which are designated for U.S. citizen occupancy and for which
recruitment outside the current work force is appropriate, appointment to the position will be limited to such
dependents unless precluded by treaties or other agreements which provide for preferential treatment for local
nationals."
And Air Force Regulation 40-301 dated 12 May 1976 in par. 2 c (1) thereof provides that"c. Selection or Referral of Eligible Applicants From the 50 States:
(1)CORRO makes selection, except as provided in (3) below, for oversea positions of Grades GS-11 and
below (and wage grade equivalents) for which it has received an AF Form 1188, and for higher grade
positions if requested by the oversea activity." 12
Likewise, a Supplement to Partial Stipulation of Facts was filed by the parties on October 6, 1978, which reads:
1. Under date of 30 September 1978, plaintiff Loida Q. Shauf through her counsel, Quasha Asperilla Ancheta
Valmonte Pea & Marcos, lodged an appeal before the Civil Service Commission, Appeals Review Board, from
the decision of the Secretary of the Air Force dated 1 September 1978 affirming the EEO Complaints Examiners
Findings and Recommended Decision in the Discrimination Complaint of Mrs. Loida Q. Shauf, No. SF 071380181
dated 3 July 1978, x x x;
2. The aforesaid appeal has not been decided up to now by the Civil Service Commission, Appeals Review Board;
and
3. Plaintiff Loida Q. Shauf has not instituted any action before any federal district court of the United States
impugning the validity of the decision of the Secretary of the Air Force dated 1 September 1978 affirming the EEO
Complaints Examiners Findings and Recommended Decision in the Discrimination Complaint of Mrs. Loida Q.
Shauf, No. SF 071380181 dated 3 July 1978.13
Thereafter, on March 8, 1988, the trial court rendered judgment in favor of herein petitioner Loida Q. Shauf, the
dispositive portion of which reads:
WHEREFORE, judgment is hereby rendered ordering the defendants jointly and severally to pay the plaintiffs:

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1) The amount $39,662.49 as actual damages or its equivalent in Philippine pesos in October 1976 as
reported by the Central Bank of the Philippines or any authorized agency of the Government;
2) The amount of P100,000.00 as moral and exemplary damages;
3) Twenty (20%) percent of $39,662.49 or its equivalent in Philippine Pesos in October 1976 as reported
by the Central Bank of the Philippines or any authorized agency of the Government, as attorneys gees,
and;
4) Cost(s) of suit.
SO ORDERED.14
Both parties appealed from the aforecited decision to respondent Court of Appeals.
In their appeal, plaintiffs-appellants (herein petitioners) raised the following assignment of errors:
1. Lower court gravely erred in holding that the actual and exemplary damages and attorneys fees may
be paid in Philippine Pesos based on the exchange rate prevailing during October 1976 as determined by
the Central Bank;
2. Lower court gravely erred in limiting the amount of moral and exemplary damages recoverable by
plaintiff to P100,000.0015
On the other hand, defendants-appellants (private respondents herein) argued that:
1. The trial court erred in not dismissing the complaint on the ground that defendants-appellants, as
officers/officials of the United States Armed Forces, are immune from suit for acts done or statements
made by them in the performance of their official governmental functions in accordance with the powers
possessed by them under the Philippine-American Military Bases Agreement of 1947, as amended;
2. The trial court erred in not dismissing the complaint for a) non-exhaustion of administrative remedies;
and b) lack of jurisdiction of the trial court over the subject matter of the case in view of the exclusive
jurisdiction of an appropriate U.S. District Court over an appeal from an agency decision on a complaint of
discrimination under the U.S. Federal Law on Equality of opportunity for civilian employees;
3. The trial court erred in holding that plaintiff-appellant Loida Q. Shauf was refused appointment as
guidance counselor by the defendants-appellants on account of her six (female), color (brown), and
national origin (Filipino by birth) and that the trial court erred in awarding damages to plaintiffsappellants.16
As stated at the outset, respondent Court of Appeals reversed the decision of the trial court, dismissed herein
petitionerscomplaint and denied their motion for reconsideration. Hence this petition, on the basis of he following
grounds:
The respondent Honorable Court of Appeals has decided a question of substance not in accord with law and/or
with applicable decisions of this Honorable Court. Respondent court committed grave error in dismissing plaintiffsappellants complaint and-

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(a) in holding that private respondents are immune from suit for discriminatory acts performed without or
in excess of, their authority as officers of the U.S. Armed Forces;
(b) for applying the doctrine of state immunity from suit when it is clear that the suit is not against the U.S.
Government or its Armed Forces; and
(c) for failing to recognize the fact that the instant action is a pure and simple case for damages based on
the discriminatory and malicious acts committed by private respondents in their individual capacity who by
force of circumstance and accident are officers of the U.S. Armed Forces, against petitioner Loida Shauf
solely on account of the latters sex (female), color (brown), and national origin (Filipino). 17
Petitioners aver that private respondents are being sued in their private capacity for discriminatory acts performed
beyond their authority, hence the instant action is not a suit against the United States Government which would
require its consent.
Private respondents, on the other hand, claim that in filing the case, petitioners sought a judicial review by a
Philippine court of the official actuations of respondents as officials of a military unit of the U.S. Air Force stationed
at Clark Air Base. The acts complained of were done by respondents while administering the civil service laws of
the United States. The acts sued upon being a governmental activity of respondents, the complaint is barred by
the immunity of the United States, as a foreign sovereign, from suit without its consent and by the immunity of the
officials of the United States armed forces for acts committed in the performance of their official functions
pursuant to the grant to the United States armed forces of rights, power and authority within the bases under the
Military Bases Agreement. It is further contended that the rule allowing suits against public officers and employees
for unauthorized acts, torts and criminal acts is a rule of domestic law, not of international law. It applies to cases
involving the relations between private suitors and their government or state, not the relations between one
government and another from which springs the doctrine of immunity of a foreign sovereign.
I. The rule that a state may not be sued without its consent, now expressed in Article XVI, Section 3, of the 1987
Constitution, is one of the generally accepted principles of international law that we have adopted as part of the
law of our land under Article II, Section 2. This latter provision merely reiterates a policy earlier embodied in the
1935 and 1973 Constitutions and also intended to manifest our resolve to abide by the rules of the international
community.18
While the doctrine appears to prohibit only suits against the state without its consent, it is also applicable to
complaints filed against officials of the state for acts allegedly performed by them in the discharge of their duties.
The rule is that if the judgment against such officials will require the state itself to perform an affirmative act to
satisfy the same, such as the appropriation of the amount needed to pay the damages awarded against them, the
suit must be regarded as against the state itself although it has been formally impleaded. 19 It must be noted,
however, that the rule is not also all-encompassing as to be applicable under all circumstances.
It is a different matter where the public official is made to account in his capacity as such for acts contrary to law
and injurious to the rights of plaintiff. As we clearly set forth by Justice Zaldivar in Director of the Bureau of
Telecommunications, et al. Vs. Aligaen, etc., et al.:20 "Inasmuch as the State authorizes only legal acts by its
officers, unauthorized acts of government officials or officers are not acts of the State, and an action against the
officials or officers by one whose rights have been invaded or violated by such acts, for the protection of his rights,
is not a suit against the State within the rule of immunity of the State from suit. In the same tenor, it has been said
that an action at law or suit in equity against a State officer or the director of a State department on the ground
that, while claiming to act for the State, he violates or invades the personal and property rights of the plaintiff,

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under an unconstitutional act or under an assumption of authority which he does not have, is not a suit against the
State within the constitutional provision that the State may not be sued without its consent." 21 The rationale for this
ruling is that the doctrine of state immunity cannot be used as an instrument for perpetrating an injustice.22
In the case of Baer, etc. vs. Tizon, etc., et al.,23 it was ruled that:
There should be no misinterpretation of the scope of the decision reached by this Court. Petitioner, as the
Commander of the United States Naval Base in Olongapo, does not possess diplomatic immunity. He may
therefore be proceeded against in his personal capacity, or when the action taken by him cannot be imputed to
the government which he represents.
Also, in animos, et al. Vs. Philippine Veterans Affairs Office, et al.,24 we held that:
"x x x it is equally well-settled that where a litigation may have adverse consequences on the public treasury,
whether in the disbursements of funds or loss of property, the public official proceeded against not being liable in
his personal capacity, then the doctrine of non-suability may appropriately be invoked. It has no application,
however, where the suit against such a functionary had to be instituted because of his failure to comply with the
duty imposed by statute appropriating public funds for the benefit of plaintiff or petitioner. x x x.
The aforecited authorities are clear on the matter. They state that the doctrine of immunity from suit will not apply
and may not be invoked where the public official is being sued in his private and personal capacity as an ordinary
citizen. The cloak of protection afforded the officers and agents of the government is removed the moment they
are sued in their individual capacity. This situation usually arises where the public official acts without authority or
in excess of the powers vested in him. It is a well-settled principle of law that a public official may be liable in his
personal private capacity for whatever damage he may have caused by his act done with malice and in bad faith,
or beyond the scope of his authority or jurisdiction.25
The agents and officials of the United States armed forces stationed in Clark Air Base are no exception to this
rule. In the case of United States of America, et al. Vs. Guinto, etc., et al., ante, 26 we declared:
It bears stressing at this point that the above observation do not confer on the United States of America blanket
immunity for all acts done by it or its agents in the Philippines. Neither may the other petitioners claim that they
are also insulated from suit in this country merely because they have acted as agents of the United States in the
discharge of their official functions.
II. The court below, in finding that private respondents are guilty of discriminating against petitioner Loida Q. Shauf
on account of her sex, color and origin, categorically emphasized that:
There is ample evidence to sustain plaintiffs complaint that plaintiff Loida Q. Shauf was refused appointment as
Guidance Counselor by the defendants on account of her sex, color and origin.
She is a female, brown in color and a Filipino by origin, although married to an American who is a member of the
United States Air Force. She is qualified for the vacant position of Guidance Counselor in the office of the
education director at Clark Air Base. She received a Master of Arts Degree from the University of Santo Tomas,
Manila, in 1971 and has completed 34 semester hours in psychology-guidance and 25 quarter hours in human
behavioral science. She has also completed all course work in human behavior and counseling psychology for a
doctoral degree. She is a civil service eligible. More important, she had functioned as a Guidance Counselor at

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the Clark Air Base at the GS-1710-9 level for approximately four years at the time she applied for the same
position in 1976.
In filling the vacant position of Guidance Counselor, defendant Persi did not even consider the application of
plaintiff Loida Q. Shauf, but referred the vacancy to CORRO which appointed Edward B. Isakson who was not
eligible to the position.
In defending his act, defendant Persi gave as his excuse that there was a question in his mind regarding validity
of plaintiff Loida Q. Shaufs work experience because of lack of record. But his assertion is belied by the fact that
plaintiff Loida Q. Shauf had previously been employed as Guidance Counselor at the Clark Air Base in 1971 and
this would have come out if defendant Persi had taken the trouble of interviewing her. Nor can defendant free
himself from any blame for the non-appointment of plaintiff Loida Q. Shauf by claiming that it was CORRO that
appointed Edward B. Isakson. This would not have happened if defendant Persi adhered to the regulation that
limits the appointment to the position of Guidance Counselor, GS-1710-9 to qualified dependents of military
personnel of the Department of Defense who are locally available like the plaintiff Loida Q. Shauf. He should not
have referred the matter to CORRO. Furthermore, defendant Persi should have protested the appointment of
Edward B. Isakson who was ineligible for the position. He, however, remained silent because he was satisfied
with the appointment.
Likewise, the acts of the defendant Detwiler in rejecting the appointment of plaintiff Loida Q. Shauf were
undoubtedly discriminatory.
Plaintiff Loida Q. Shauf twice applied for the position of Guidance Counselor sometime in 1975 and in October
1978. Although she was qualified for the postision, her appointment was rejected ny the defendant Detwiler. The
two who were appointed, a certain Petrucci and Edward B. Isakson, were ordered removed by the U.S. Civil
Service Commission. Instead of replacing Petrucci with the plaintiff Loida Q. Shauf, the defendant Detwiler had
the position vacated by Petrucci abolished. And in the case of Edward Isakson, the defendant Detwiler ignored the
order of the U.S. Civil Service Commission to have him removed according to the testimony of plaintiff Loida Q.
Shauf.
In connection with her complaint against the defendants, plaintiff Loida Q. Shauf was presented a Notice of
Proposed Disposition of her Discrimination Complaint by Col. Charles J. Corey, Vice Commander, Third Combat
Support Group, Clark Air Base, which would entitle her to a temporary appointment as Guidance Counselor with
the implied assurance that she would be appointed in a permanent capacity in the event of a vacancy.
At the time of the issuance of said Notice, defendants knew that there would be a vacancy in a permanent
position as Guidance Counselor occupied by Mrs. Mary Abalateo and it was understood between Col. Corey and
plaintiff Loida Q. Shauf that this position would be reserved for her. Knowing this arrangement, defendant Detwiler
rejected the request for extension of services of Mrs. Mary Abalateo. However, after plaintiff Loida Q. Shauf
consented to the terms of the Notice of Proposed Disposition of her Discrimination Complaint, defendant Detwiler
extended the services of Mrs. Mary Abalateo indefinitely. This act barred plaintiff Loida Q. Shauf from applying for
the position of Mrs. Mary Abalateo.
To rebut the evidence of the plaintiffs, defendant cited the findings and conclusions of Mr. Rudolph Duncan, who
was appointed to investigate plaintiff Loida Q. Shaufs complaint for discrimination and Col. Charles J. Corey, Vice
Commander, Third Combat Support Group that defendants were not guilty of Discrimination.

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It is pointed out, however, that Mr. Rudolph Duncan found plaintiff loida Q. Shauf to be highly qualified for the
position of Guidance Counselor at the GS-1710-9 level and that management should have hired a local applicant.
While Col. Corey characterized the act of defendant Persi as sloppy and recommend that he be reprimanded. In
any event their findings and conclusions are not binding with this Court.
To blunt the accusation of discrimination against them, defendants maintained that the extension of the
appointment of Mrs. Mary Abalateo was a joint decision of management and Central Civilian Personnel Office,
Clark Air Base. Nonetheless, having earlier rejected by himself the request for extension of the services of Mrs.
Mary Abalateo, defendant Detwiler should not have concurred to such an extension as the reversal of his stand
gave added substance to the charge of discrimination against him.
To further disprove the charge that the defendants discriminated against plaintiff Loida Q. Shauf for her nonappointment as Guidance Counselor on account of her being a Filipino and a female, counsel for the defendants
cited the following: (1) that Mrs. Mary Abalateo whose appointment was extended by the defendant Detwiler is
likewise a female and a Filipino by origin; (2) that there are Filipinos employed in the office of the defendant Persi;
and (3) that there were two other women who applied in 1976 with the plaintiff Loida Q. Shauf for the position of
Guidance Counselor.
The contention of the defendants based on the allegations enumerated in Nos. 1 and 2 of the preceding
paragraph is without merit as there is no evidence to show that Mrs. Mary Abalateo and the Filipinos in the office
of the defendant Persi were appointed by the defendants. Moreover, faced with a choice between plaintiff Loida
Q. Shauf or Mrs. Mary Abalateo, it was to be expected that defendant Detwiler chose to retain Mrs. Mary Abalateo
as Guidance Counselor in retaliation for the complaint of discrimination filed against him by plaintiff Loida Q.
Shauf. Finally, as to the contention based on the allegation in No. 3 of the preceding paragraph that there were
two other women applicants in 1976 with plaintiff Loida Q. Shauf, the record reveals that they had minimum
qualifications unlike plaintiff Loida Q. Shauf who was highly qualified. 27
Elementary is the rule that the conclusions and findings of fact of the trial court are entitled to great weight on
appeal and should not be disturbed unless for strong and cogent reasons. 28 Absent any substancial proof,
therefore, that the trial courts decision was grounded entirely on speculations, surmises or conjectures, the same
must be accorded full consideration and respect. This should be so because the trial court is, after all, in a much
better position to observe and correctly appreciate the respective parties evidence as they were presented. 29
In the case at bar, there is nothing in the record which suggests any arbitrary, irregular or abusive conduct or
motive on the part of the trial judge in ruling that private respondents committed acts of discrimination for which
they should be held personally liable. His conclusion on the matter is sufficiently borne out by the evidence on
record. We are thus constrained to uphold his findings of fact.
Respondent Court of Appeals, in its questioned decision, states that private respondents did, in fact, discriminate
against petitioner Loida Q. Shauf. However, it deemed such acts insufficient to prevent an application of the
doctrine of state immunity, contrary to the findings made by the trial court. It reasons out that "the parties invoked
are all American citizens (although plaintiff is a Filipina by origin) and the appointment of personnel inside the
base is clearly a sovereign act of the United States. This is an internal affair in which we cannot interfere without
having to touch some delicate constitutional issues." 30 In other words, it believes that the alleged discriminatory
acts are not so grave in character as would justify the award of damages.
In view of the apparent discrepancy between the findings of fact of respondent Court of Appeals and the trial
court, we are tasked to review the evidence in order to arrive at the correct findings based on the record. A

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consideration of the evidence presented supports our view that the court a quo was correct in holding herein
private respondents personally liable and in ordering the indemnification of petitioner Loida Q. Shauf. The records
are clear that even prior to the filing of the complaint in this case, there were various reports and communications
issued on the matter which, while they make no categorical statement of the private respondents liability,
nevertheless admit of facts from which the intent of private respondents to discriminate against Loida Q. Shauf is
easily discernible. Witness the following pertinent excerpts from the documents extant in the folder of Plaintiffs
Exhibits:
1. Notice of Proposed Disposition of Discrimination Complaint, dated May 16, 1977 (Exhibit "G").
B. Mr. Anthony Persi was totally inept in the recruitment practices employed in attempting on fill the GS 1710-9
Assistant Education applicable DOD regulations. In addition, he failed to conduct an interview of qualified
personnel in the local environment and when the qualifications of the complainant (sic) were questioned by Mr.
Persi he did not request a review by the CCPO nor request an interview with the complainant (sic). Mr. Persi failed
to follow Department of Defense Instructions Number 1400.23, under Policy and Procedures which states-"Where
qualified dependents of military or civilian personnel of the Department of Defense are locally available for
appointment to positions in foreign areas which are designated for US citizen occupancy and for which
recruitment outside the current work force is appropriate, appointment to the positions will be limited to such
dependents unless precluded by treaties or other agreements which provide for preferential treatment for local
nationals." Attachment to Air Force Supplement to FFM 213.2106 (b) (6) lists the positions of Guidance
Counsellor, GS 1710-9, as positions to be filled by locally available dependents. An added point is the lack of
qualifications of the individual selected for the GS 1710-9 positions as outlined under X-118 Civil Service
Handbook. x x x31
2. Letter of the Director of the U.S. Civil Service Commission, San Francisco Region, dated October 27, 1977,
addressed to Mr. Don Detwiler, concerning Mr. Edward B. Isakson whose file was reviewed by the Commission
(Exhibit "K").
The position of Guidance Counsellor is one for which the Commission has established a mandatory education
requirement that may not be waived. An individual may not be assigned to such a position without meeting the
minimum qualification requirements. The requirements, as given in Handbook X-118, are completion of all
academic requirements for a bachelors degree from an accredited college or university and successful
completion of a teacher education program under an "approved program" or successful completion of required
kinds of courses.
On review of his record, we find that Mr. Isakson has a bachelors degree but he does not show completion of a
teacher education program. To qualify for Guidance Counselor on the basis of coursework and semester hour
credit, he would need to have 24 semester hours in Education and 12 semester hours in a combination of
Psychology and Guidance subjects directly related to education. We do not find that he meets these
requirements.
xxx
We can appreciate the fact that Mr. Isakson may be working toward meeting the Guidance Counselor
requirements. Nonetheless, he does not appear to meet them at this time. We must, therefore, request that action
be taken to remove him from the position and that efforts be made to place him in a position for which he
qualifies.32

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3. Letter of the Staff Judge Advocate of the Department of the Airforce addressed to Mr. Detwiler, dated January
25, 1977 (Exhibit "L").
1. The attached memo from Captain John Vento of this office is forwarded for your review and any action
you deem appropriate. I concur with his conclusion that there is no evidence of sex or ethnic bias in this
matter. I also concur, however, that there were certain irregularities in the handling of this selection.
xxx
3. Considering the above, it is most unfortunate that the filing of this latest Guidance Counselor vacancy
was not handled wholly in accordance with prescribed policies and regulations. This is not to suggest that
Mrs. Shauf should necessarily have been hired. But, she and other qualified candidates should have been
given the consideration to which they were entitled. (At no time now or in the past have Mrs. Shaufs
qualifications ever been questioned.) Had that happened and management chose to select some qualified
candidate other than Mrs. Shauf, there would be no basis for her complaint.
4. It is my understanding that Mrs. Shauf has filed a formal EEO complaint. While I am convinced that
there was no discrimination in this case, my experience with EEO complaints teaches me that, if Civil
Service Commission finds that nonselection resulted from any kind of management malpractice, it is
prone to brand it as a "discriminatory practice." This usually results in a remedial order which can often be
distasteful to management. x x x.33
The initial burden is on the plaintiff to establish a prima facie case or discrimination. Once the discriminatory act is
proven, the burden shifts to the defendant to articulate some legitimate, undiscriminatory reason for the plaintiffs
rejection.34 Any such justification is wanting in the case at bar, despite the prima facie case for petitioner Loida Q.
Shauf. Private respondents defense is based purely on outright denials which are insufficient to discharge
theonus probandi imposed upon them. They equally rely on the assertion that they are immune from suit by
reason of their official functions. As correctly pointed out by petitioners in their Memorandum, the mere invocation
by private respondents of the official character of their duties cannot shield them from liability especially when the
same were clearly done beyond the scope of their authority, again citing the Guinto, case, supra:
The other petitioners in the case before us all aver they have acted in the discharge of their official functions as
officers or agents of the United States. However, this is a matter of evidence. The charges against them may not
be summarily dismissed on their mere assertion that their acts are imputable to the United States of America,
which has not given its consent to be sued. In fact, the defendants are sought to be held answerable for personal
torts in which the United States itself is not involved. If found liable, they and they alone must satisfy the judgment.
III. Article XIII, Section 3, of the 1987 Constitution provides that the State shall afford full protection to labor, local
and overseas, organized and unorganized, and promote full employment and equality of employment
opportunities for all. This is a carry-over from Article II, Section 9, of the 1973 Constitution ensuring equal work
opportunities regardless of sex, race, or creed.
Under the Constitution of the United States, the assurance of equality in employment and work opportunities
regardless of sex, race, or creed is also given by the equal protection clause of the Bill of Rights. The 14th
Amendment, in declaring that no state shall deprive a person of his life, liberty, or property without due process of
law or deny to any person within its jurisdiction the equal protection of the laws, undoubtedly intended not only
that there should be no arbitrary spoliation of property, but that equal protection and security should be given to all
under like circumstances in the enjoyment of their personal and civil rights, and that all persons should be equally

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entitled to pursue their happiness ands acquire and enjoy property. It extends its protection to all persons without
regard to race, color, or class. It means equality of opportunity to all in like circumstances. 35
The words "life, liberty, and property" as used in constitutions are representative terms and are intended to cover
every right to which a member of the body politic in entitled under the law. These terms include the right of selfdefense, freedom of speech, religious and political freedom, exemption from arbitrary arrests, the right to freely
buy and sell as others may, the right to labor, to contract, to terminate contracts, to acquire property, and the right
to all our liberties, personal, civil and political-in short, all that makes life worth living. 36
There is no doubt that private respondents Persi and Detwiler, in committing the acts complained of have, in
effect, violated the basic constitutional right of petitioner Loida Q. Shauf to earn a living which is very much an
integral aspect of the right to life. For this, they should be held accountable.
While we recognize petitioner Loida Q. Shaufs entitlement to an award of moral damages, we however find no
justification for the award of actual or compensatory damages, based on her supposedly unearned income from
March, 1975 up to April, 1978 in the total amount of $39,662.49, as erroneously granted by the trial court.
Evidence that the plaintiff could have bettered her position had it not been for the defendants wrongful act cannot
serve as basis for an award of damages, because it is highly speculative. 37 Petitioner Loida Q. Shaufs claim is
merely premised on the possibility that had she been employed, she would have earned said amount. But, the
undeniable fact remains that she was never so employed. Petitioner never acquired any vested right to the
salaries pertaining to the position of GS 1710-9 to which she was never appointed. Damages which are merely
possible are speculative.38 In determining actual damages, the court cannot rely on speculation, conjecture or
guesswork. Without the actual proof of loss, the award of actual damages is erroneous. 39 Consequently, the
award of actual damages made by the trial court should be deleted. Attorneys fees, however, may be granted and
we believe that an award thereof in the sum of P20,000.00 is reasonable under the circumstances.1wphi1
IV. Finally, private respondents postulate that petitioner Loida Q. Shauf failed to avail herself of her remedy under
the United States federal legislation on equality of opportunity for civilian employees, which is allegedly exclusive
of any other remedy under American law, let alone remedies before a foreign court and under a foreign law such
as the Civil Code of the Philippines.
In a letter of the Department of the Air Force in Washington, D.C., dated September 1, 1978 and addressed to
petitioner Loida Q. Shauf,40 the appeal rights of the latter from the Air Force decision were enumerated as follows:
-You may appeal to the Civil Service Commission within 15 calendar days of receipt of the decision. Your
appeal should be addressed to the Civil Service Commission, Appeals Review Board, 1990 E Street,
N.Q., Washington, D.C. 20415. The appeal and any representation in support thereof must be submitted
in duplicate.
-In lieu of an appeal to the Commission you may file a civil action in an appropriate U.S. District Court
within 30 days of receipt of the decision.
-If you elect to appeal to the Commissions Appeals Review Board, you may file a civil action in a U.S.
District Court within 30 days of receipt of the Commissions final decision.
-A civil action may also be filed anytime after 180 days of the date of initial appeal to the Commission, if a
final decision has not been rendered.

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As earlier noted, in a Supplement to Partial Stipulation of Facts filed by the parties on October 6, 1978, it was
manifested to the trial court that an appeal was lodged by counsel for petitioners on September 30, 1978 before
the Civil Service Commission. Appeals Review Board from the decision of the Secretary of the Air Force in the
discrimination case filed by petitioner Loida Q. Shauf, No. SF 071380181. Said appeal has not been decided up to
now.
Furthermore, it is basic that remedial statutes are to be construed liberally. The term "may," as used in adjective
rules, is only permissive and not mandatory, and we see no reason why the so-called rules on the above
procedural options communicated to said petitioner should depart from this fundamental . petitioner Loida Q.
Shauf is not limited to these remedies, but is entitled as a matter of plain and simple justice to choose that
remedy, not otherwise proscribed, which will best advance and protect her interests. There is, thus, nothing to
enjoin her from seeking redress in Philippine courts which should not be ousted of jurisdiction on the dubious and
inconclusive representations of private respondents on that score.
WHEREFORE, the challenged decision and resolution of respondent Court of Appeals in CA-G.R. CV No. 17932
are hereby ANNULLED and SET ASIDE. Private respondents are hereby ORDERED, jointly and severally, to pay
petitioners the sum of P100,000.00 as moral damages, P20,000.00 as and for attorneys fees, and the costs of
suit.
SO ORDERED.
Melencio-Herrera (Chairman), Paras, Padilla and Sarmiento, jj., concur.
Decision and resolution annulled and set aside.

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SHAUF vs. COURT OF APPEALS

Petition for certiorari to review the decision of CA

FACTS:
1990: Petitioner, Loida Shauf, a Filipino by origin and married to an American who is a member of the US Air
Force, was rejected for a position of Guidance Counselor in the Base Education Office at Clark Air Base. She
boasts of related working experience and being a qualified dependent locally available.
By reason of her non-selection, she filed a complaint for damages and an equal employment opportunity
complaint against private respondents, Don Detwiler (civillian personnel officer) and Anthony Persi (Education
Director), for alleged discrimination by reason of her sex (female), color (brown) and national origin (Filipino by
birth).
Shauf was offered a temporary position as a temporary Assistant Education Adviser for a 180-day period with
the condition that if a vacancy occurs, she will be automatically selected to fill the vacancy. But if no vacancy
occurs after 180 days, she will be released but will be selected to fill a future vacancy if shes available. Shauf
accepted the offer. During that time, Mrs. Mary Abalateos was about to vacate her position. But Mrs. Abalateos
appointment was extended thus, Shauf was never appointed to said position. She claims that the Abalateos stay
was extended indefinitely to deny her the appointment as retaliation for the complaint that she filed against Persi.
Persi denies this allegation. He claims it was a joint decision of the management & it was in accordance of with
the applicable regulation.
Shauf filed for damages and other relief in different venues such as the Civil Service Commission, Appeals
Review Board, Philippine Regional Trial Court, etc.
RTC ruled in favor of Shauf ordering defendants to pay $39,662.49 as actual damages + 20% of such amount
as attorneys fees + P100k as moral & exemplary damages.
Both parties appealed to the CA. Shauf prayed for the increase of the damages to be collected from defendants.
Defendants on the other hand, continued using the defense that they are immune from suit for acts
done/statements made by them in performance of their official governmental functions pursuant to RP-US Military
Bases Agreement of 1947. They claim that the Philippines does not have jurisdiction over the case because it was
under the exclusive jurisdiction of a US District Court. They likewise claim that petitioner failed to exhaust all
administrative remedies thus case should be dismissed. CA reversed RTC decision. According to the CA,
defendants are immune from suit.
Shauf claims that the respondents are being sued in their private capacity thus this is not a suit against the US
government w/c would require consent.

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 Respondents still maintain their immunity from suit. They further claim that the rule allowing suits against public
officers & employees for criminal & unauthorized acts is applicable only in the Philippines & is not part of
international law.
ISSUE:
WON

private

respondents

are

immune

from

suit

being

officers

of

the

US

Armed

Forces

HELD:
Respondents ordered, jointly and severally, to pay petitioners the sum of P100K as moral damages, P20K for
attys fees.
RATIO:
No, the respondents cannot rely on the US blanket of diplomatic immunity for all its acts or the acts of its agents in
the Phils. Private respondents are personally liable in indemnifying petitioner Shauf.
While the doctrine of immunity is also applicable to complaints filed against state officials, it only contemplates
acts done in their official capacity. This does not cover acts contrary to law & injurious to the rights of the plaintiff.
When an official acts in a manner that invades or violates the personal & property rights of another, the aggrieved
party may sue the official & such suit will not be a suit against the state. (Director of the Bureau of
Telecommunications vs. Aligaen) The doctrine of immunity from suit will not apply where the public official is being
sued in his private & personal capacity as an ordinary citizen.
The discrimination is very evident. Shauf was not considered for the position even if she was previously employed
as a Guidance Counselor at the Clark Airbase. She was not granted an interview. The person appointed was not
even qualified for that position and that person kept the position despite orders from the US Civil Service
Commission for his removal. Extension of Abalateos services is another proof. She was not appointed even if US
officials found her highly qualified for the position (letters from the Director of the US Civil Service Commission,
Staff Judge Advocate of the Department of Air Force). Shauf has proven that discrimination did occur whereas
respondents merely denied allegations.
The US Constitution assures everyone of equality in employment & work opportunities regardless of sex, race, or
creed. The Philippine Constitution has a similar provision. Persi & Detwiler violated Shaufs constitutional right to
earn a living, an integral aspect of her right to life. Thus, they should be accountable. Though Shauf is entitled to
damages, she should not be paid for the supposedly unearned income had she been hired as a Guidance
Counselor. She never acquired rights over that amount because she was never appointed.
Shauf followed the proper procedure in seeking relief for the defendants discriminatory acts. The Department of
Air Force in Washington told her that one of her appeal rights would be to file a civil action if a final decision has
not been rendered after 180 days from the dated of the initial appeal to the Commission. The appeal was lodged
on Sept. 30, 1978 and it has not been decided up to the time SC has decided. Shauf is entitled to choose the
remedy, not otherwise prohibited, which will best advance & protect her interests.

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Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. L-35645 May 22, 1985
UNITED STATES OF AMERICA, CAPT. JAMES E. GALLOWAY, WILLIAM I. COLLINS and ROBERT
GOHIER,petitioners,
vs.
HON. V. M. RUIZ, Presiding Judge of Branch XV, Court of First Instance of Rizal and ELIGIO DE GUZMAN
& CO., INC., respondents.
Sycip, Salazar, Luna & Manalo & Feliciano Law for petitioners.
Albert, Vergara, Benares, Perias & Dominguez Law Office for respondents.

ABAD SANTOS, J.:

This is a petition to review, set aside certain orders and restrain the respondent judge from trying Civil Case No.
779M of the defunct Court of First Instance of Rizal.
The factual background is as follows:
At times material to this case, the United States of America had a naval base in Subic, Zambales. The base was
one of those provided in the Military Bases Agreement between the Philippines and the United States.
Sometime in May, 1972, the United States invited the submission of bids for the following projects

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1. Repair offender system, Alava Wharf at the U.S. Naval Station Subic Bay, Philippines.
2. Repair typhoon damage to NAS Cubi shoreline; repair typhoon damage to shoreline revetment, NAVBASE
Subic; and repair to Leyte Wharf approach, NAVBASE Subic Bay, Philippines.
Eligio de Guzman & Co., Inc. responded to the invitation and submitted bids. Subsequent thereto, the company
received from the United States two telegrams requesting it to confirm its price proposals and for the name of its
bonding company. The company complied with the requests. [In its complaint, the company alleges that the
United States had accepted its bids because "A request to confirm a price proposal confirms the acceptance of a
bid pursuant to defendant United States' bidding practices." (Rollo, p. 30.) The truth of this allegation has not been
tested because the case has not reached the trial stage.]
In June, 1972, the company received a letter which was signed by Wilham I. Collins, Director, Contracts Division,
Naval Facilities Engineering Command, Southwest Pacific, Department of the Navy of the United States, who is
one of the petitioners herein. The letter said that the company did not qualify to receive an award for the projects
because of its previous unsatisfactory performance rating on a repair contract for the sea wall at the boat landings
of the U.S. Naval Station in Subic Bay. The letter further said that the projects had been awarded to third parties.
In the abovementioned Civil Case No. 779-M, the company sued the United States of America and Messrs.
James E. Galloway, William I. Collins and Robert Gohier all members of the Engineering Command of the U.S.
Navy. The complaint is to order the defendants to allow the plaintiff to perform the work on the projects and, in the
event that specific performance was no longer possible, to order the defendants to pay damages. The company
also asked for the issuance of a writ of preliminary injunction to restrain the defendants from entering into
contracts with third parties for work on the projects.
The defendants entered their special appearance for the purpose only of questioning the jurisdiction of this court
over the subject matter of the complaint and the persons of defendants, the subject matter of the complaint being
acts and omissions of the individual defendants as agents of defendant United States of America, a foreign
sovereign which has not given her consent to this suit or any other suit for the causes of action asserted in the
complaint." (Rollo, p. 50.)
Subsequently the defendants filed a motion to dismiss the complaint which included an opposition to the issuance
of the writ of preliminary injunction. The company opposed the motion. The trial court denied the motion and
issued the writ. The defendants moved twice to reconsider but to no avail. Hence the instant petition which seeks
to restrain perpetually the proceedings in Civil Case No. 779-M for lack of jurisdiction on the part of the trial court.
The petition is highly impressed with merit.
The traditional rule of State immunity exempts a State from being sued in the courts of another State without its
consent or waiver. This rule is a necessary consequence of the principles of independence and equality of States.
However, the rules of International Law are not petrified; they are constantly developing and evolving. And
because the activities of states have multiplied, it has been necessary to distinguish them-between sovereign and
governmental acts (jure imperii) and private, commercial and proprietary acts (jure gestionis). The result is that
State immunity now extends only to acts jure imperil The restrictive application of State immunity is now the rule in
the United States, the United Kingdom and other states in western Europe. (See Coquia and Defensor Santiago,
Public International Law, pp. 207-209 [1984].)
The respondent judge recognized the restrictive doctrine of State immunity when he said in his Order denying the
defendants' (now petitioners) motion: " A distinction should be made between a strictly governmental function of

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the sovereign state from its private, proprietary or non- governmental acts (Rollo, p. 20.) However, the respondent
judge also said: "It is the Court's considered opinion that entering into a contract for the repair of wharves or
shoreline is certainly not a governmental function altho it may partake of a public nature or character. As aptly
pointed out by plaintiff's counsel in his reply citing the ruling in the case of Lyons, Inc., [104 Phil. 594 (1958)], and
which this Court quotes with approval, viz.:
It is however contended that when a sovereign state enters into a contract with a private person,
the state can be sued upon the theory that it has descended to the level of an individual from
which it can be implied that it has given its consent to be sued under the contract. ...
xxx xxx xxx
We agree to the above contention, and considering that the United States government, through
its agency at Subic Bay, entered into a contract with appellant for stevedoring and miscellaneous
labor services within the Subic Bay Area, a U.S. Naval Reservation, it is evident that it can bring
an action before our courts for any contractual liability that that political entity may assume under
the contract. The trial court, therefore, has jurisdiction to entertain this case ... (Rollo, pp. 20-21.)
The reliance placed on Lyons by the respondent judge is misplaced for the following reasons:
In Harry Lyons, Inc. vs. The United States of America, supra, plaintiff brought suit in the Court of First Instance of
Manila to collect several sums of money on account of a contract between plaintiff and defendant. The defendant
filed a motion to dismiss on the ground that the court had no jurisdiction over defendant and over the subject
matter of the action. The court granted the motion on the grounds that: (a) it had no jurisdiction over the defendant
who did not give its consent to the suit; and (b) plaintiff failed to exhaust the administrative remedies provided in
the contract. The order of dismissal was elevated to this Court for review.
In sustaining the action of the lower court, this Court said:
It appearing in the complaint that appellant has not complied with the procedure laid down in
Article XXI of the contract regarding the prosecution of its claim against the United States
Government, or, stated differently, it has failed to first exhaust its administrative remedies against
said Government, the lower court acted properly in dismissing this case.(At p. 598.)
It can thus be seen that the statement in respect of the waiver of State immunity from suit was purely gratuitous
and, therefore, obiter so that it has no value as an imperative authority.
The restrictive application of State immunity is proper only when the proceedings arise out of commercial
transactions of the foreign sovereign, its commercial activities or economic affairs. Stated differently, a State may
be said to have descended to the level of an individual and can thus be deemed to have tacitly given its consent
to be sued only when it enters into business contracts. It does not apply where the contract relates to the exercise
of its sovereign functions. In this case the projects are an integral part of the naval base which is devoted to the
defense of both the United States and the Philippines, indisputably a function of the government of the highest
order; they are not utilized for nor dedicated to commercial or business purposes.
That the correct test for the application of State immunity is not the conclusion of a contract by a State but the
legal nature of the act is shown in Syquia vs. Lopez, 84 Phil. 312 (1949). In that case the plaintiffs leased three
apartment buildings to the United States of America for the use of its military officials. The plaintiffs sued to

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49

recover possession of the premises on the ground that the term of the leases had expired. They also asked for
increased rentals until the apartments shall have been vacated.
The defendants who were armed forces officers of the United States moved to dismiss the suit for lack of
jurisdiction in the part of the court. The Municipal Court of Manila granted the motion to dismiss; sustained by the
Court of First Instance, the plaintiffs went to this Court for review on certiorari. In denying the petition, this Court
said:
On the basis of the foregoing considerations we are of the belief and we hold that the real party
defendant in interest is the Government of the United States of America; that any judgment for
back or Increased rentals or damages will have to be paid not by defendants Moore and Tillman
and their 64 co-defendants but by the said U.S. Government. On the basis of the ruling in the
case of Land vs. Dollar already cited, and on what we have already stated, the present action
must be considered as one against the U.S. Government. It is clear hat the courts of the
Philippines including the Municipal Court of Manila have no jurisdiction over the present case for
unlawful detainer. The question of lack of jurisdiction was raised and interposed at the very
beginning of the action. The U.S. Government has not , given its consent to the filing of this suit
which is essentially against her, though not in name. Moreover, this is not only a case of a citizen
filing a suit against his own Government without the latter's consent but it is of a citizen filing an
action against a foreign government without said government's consent, which renders more
obvious the lack of jurisdiction of the courts of his country. The principles of law behind this rule
are so elementary and of such general acceptance that we deem it unnecessary to cite
authorities in support thereof. (At p. 323.)
In Syquia,the United States concluded contracts with private individuals but the contracts notwithstanding the
States was not deemed to have given or waived its consent to be sued for the reason that the contracts were
forjure imperii and not for jure gestionis.
WHEREFORE, the petition is granted; the questioned orders of the respondent judge are set aside and Civil Case
No. is dismissed. Costs against the private respondent.
Teehankee, Aquino, Concepcion, Jr., Melencio-Herrera, Plana, * Escolin, Relova, Gutierrez, Jr., De la Fuente,
Cuevas and Alampay, JJ., concur.
Fernando, C.J., took no part.
Separate Opinions
MAKASIAR, J., dissenting:
The petition should be dismissed and the proceedings in Civil Case No. 779-M in the defunct CFI (now RTC) of
Rizal be allowed to continue therein.
In the case of Lyons vs. the United States of America (104 Phil. 593), where the contract entered into between the
plaintiff (Harry Lyons, Inc.) and the defendant (U.S. Government) involved stevedoring and labor services within
the Subic Bay area, this Court further stated that inasmuch as ". . . the United States Government. through its
agency at Subic Bay, entered into a contract with appellant for stevedoring and miscellaneous labor services

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50

within the Subic Bay area, a U.S. Navy Reservation, it is evident that it can bring an action before our courts for
any contractual liability that that political entity may assume under the contract."
When the U.S. Government, through its agency at Subic Bay, confirmed the acceptance of a bid of a private
company for the repair of wharves or shoreline in the Subic Bay area, it is deemed to have entered into a contract
and thus waived the mantle of sovereign immunity from suit and descended to the level of the ordinary citizen. Its
consent to be sued, therefore, is implied from its act of entering into a contract (Santos vs. Santos, 92 Phil. 281,
284).
Justice and fairness dictate that a foreign government that commits a breach of its contractual obligation in the
case at bar by the unilateral cancellation of the award for the project by the United States government, through its
agency at Subic Bay should not be allowed to take undue advantage of a party who may have legitimate claims
against it by seeking refuge behind the shield of non-suability. A contrary view would render a Filipino citizen, as in
the instant case, helpless and without redress in his own country for violation of his rights committed by the
agents of the foreign government professing to act in its name.
Appropriate are the words of Justice Perfecto in his dissenting opinion in Syquia vs. Almeda Lopez, 84 Phil. 312,
325:
Although, generally, foreign governments are beyond the jurisdiction of domestic courts of justice,
such rule is inapplicable to cases in which the foreign government enters into private contracts
with the citizens of the court's jurisdiction. A contrary view would simply run against all principles
of decency and violative of all tenets of morals.
Moral principles and principles of justice are as valid and applicable as well with regard to private
individuals as with regard to governments either domestic or foreign. Once a foreign government
enters into a private contract with the private citizens of another country, such foreign government
cannot shield its non-performance or contravention of the terms of the contract under the cloak of
non-jurisdiction. To place such foreign government beyond the jurisdiction of the domestic courts
is to give approval to the execution of unilateral contracts, graphically described in Spanish as
'contratos leoninos', because one party gets the lion's share to the detriment of the other. To give
validity to such contract is to sanctify bad faith, deceit, fraud. We prefer to adhere to the thesis
that all parties in a private contract, including governments and the most powerful of them, are
amenable to law, and that such contracts are enforceable through the help of the courts of justice
with jurisdiction to take cognizance of any violation of such contracts if the same had been
entered into only by private individuals.
Constant resort by a foreign state or its agents to the doctrine of State immunity in this jurisdiction impinges
unduly upon our sovereignty and dignity as a nation. Its application will particularly discourage Filipino or domestic
contractors from transacting business and entering into contracts with United States authorities or facilities in the
Philippines whether naval, air or ground forces-because the difficulty, if not impossibility, of enforcing a validly
executed contract and of seeking judicial remedy in our own courts for breaches of contractual obligation
committed by agents of the United States government, always, looms large, thereby hampering the growth of
Filipino enterprises and creating a virtual monopoly in our own country by United States contractors of contracts
for services or supplies with the various U.S. offices and agencies operating in the Philippines.

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The sanctity of upholding agreements freely entered into by the parties cannot be over emphasized. Whether the
parties are nations or private individuals, it is to be reasonably assumed and expected that the undertakings in the
contract will be complied with in good faith.
One glaring fact of modern day civilization is that a big and powerful nation, like the United States of America, can
always overwhelm small and weak nations. The declaration in the United Nations Charter that its member states
are equal and sovereign, becomes hollow and meaningless because big nations wielding economic and military
superiority impose upon and dictate to small nations, subverting their sovereignty and dignity as nations. Thus,
more often than not, when U.S. interest clashes with the interest of small nations, the American governmental
agencies or its citizens invoke principles of international law for their own benefit.
In the case at bar, the efficacy of the contract between the U.S. Naval authorities at Subic Bay on one hand, and
herein private respondent on the other, was honored more in the breach than in the compliance The opinion of the
majority will certainly open the floodgates of more violations of contractual obligations. American authorities or any
foreign government in the Philippines for that matter, dealing with the citizens of this country, can conveniently
seek protective cover under the majority opinion. The result is disastrous to the Philippines.
This opinion of the majority manifests a neo-colonial mentality. It fosters economic imperialism and foreign political
ascendancy in our Republic.
The doctrine of government immunity from suit cannot and should not serve as an instrument for perpetrating an
injustice on a citizen (Amigable vs. Cuenca, L-26400, February 29, 1972, 43 SCRA 360; Ministerio vs. Court of
First Instance, L-31635, August 31, 1971, 40 SCRA 464).
Under the doctrine of implied waiver of its non-suability, the United States government, through its naval
authorities at Subic Bay, should be held amenable to lawsuits in our country like any other juristic person.
The invocation by the petitioner United States of America is not in accord with paragraph 3 of Article III of the
original RP-US Military Bases Agreement of March 14, 1947, which states that "in the exercise of the abovementioned rights, powers and authority, the United States agrees that the powers granted to it will not be used
unreasonably. . ." (Emphasis supplied).
Nor is such posture of the petitioners herein in harmony with the amendment dated May 27, 1968 to the aforesaid
RP-US Military Bases Agreement, which recognizes "the need to promote and maintain sound employment
practices which will assure equality of treatment of all employees ... and continuing favorable employer-employee
relations ..." and "(B)elieving that an agreement will be mutually beneficial and will strengthen the democratic
institutions cherished by both Governments, ... the United States Government agrees to accord preferential
employment of Filipino citizens in the Bases, thus (1) the U.S. Forces in the Philippines shall fill the needs for
civilian employment by employing Filipino citizens, etc." (Par. 1, Art. I of the Amendment of May 27, 1968).
Neither does the invocation by petitioners of state immunity from suit express fidelity to paragraph 1 of Article IV of
the aforesaid amendment of May 2 7, 1968 which directs that " contractors and concessionaires performing work
for the U.S. Armed Forces shall be required by their contract or concession agreements to comply with all
applicable Philippine labor laws and regulations, " even though paragraph 2 thereof affirms that "nothing in this
Agreement shall imply any waiver by either of the two Governments of such immunity under international law."
Reliance by petitioners on the non-suability of the United States Government before the local courts, actually
clashes with No. III on respect for Philippine law of the Memorandum of Agreement signed on January 7, 1979,

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also amending RP-US Military Bases Agreement, which stresses that "it is the duty of members of the United
States Forces, the civilian component and their dependents, to respect the laws of the Republic of the Philippines
and to abstain from any activity inconsistent with the spirit of the Military Bases Agreement and, in particular, from
any political activity in the Philippines. The United States shag take all measures within its authority to insure that
they adhere to them (Emphasis supplied).
The foregoing duty imposed by the amendment to the Agreement is further emphasized by No. IV on the
economic and social improvement of areas surrounding the bases, which directs that "moreover, the United
States Forces shall procure goods and services in the Philippines to the maximum extent feasible" (Emphasis
supplied).
Under No. VI on labor and taxation of the said amendment of January 6, 1979 in connection with the discussions
on possible revisions or alterations of the Agreement of May 27, 1968, "the discussions shall be conducted on the
basis of the principles of equality of treatment, the right to organize, and bargain collectively, and respect for the
sovereignty of the Republic of the Philippines" (Emphasis supplied)
The majority opinion seems to mock the provision of paragraph 1 of the joint statement of President Marcos and
Vice-President Mondale of the United States dated May 4, 1978 that "the United States re-affirms that Philippine
sovereignty extends over the bases and that Its base shall be under the command of a Philippine Base
Commander, " which is supposed to underscore the joint Communique of President Marcos and U.S. President
Ford of December 7, 1975, under which "they affirm that sovereign equality, territorial integrity and political
independence of all States are fundamental principles which both countries scrupulously respect; and that "they
confirm that mutual respect for the dignity of each nation shall characterize their friendship as well as the alliance
between their two countries. "
The majority opinion negates the statement on the delineation of the powers, duties and responsibilities of both
the Philippine and American Base Commanders that "in the performance of their duties, the Philippine Base
Commander and the American Base Commander shall be guided by full respect for Philippine sovereignty on the
one hand and the assurance of unhampered U.S. military operations on the other hand and that "they shall
promote cooperation understanding and harmonious relations within the Base and with the general public in the
proximate vicinity thereof" (par. 2 & par. 3 of the Annex covered by the exchange of notes, January 7, 1979,
between Ambassador Richard W. Murphy and Minister of Foreign Affairs Carlos P. Romulo, Emphasis supplied).
Footnotes
* He signed before he left.

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USA v. RUIZ
GR No. L-35645; May 22, 1985
FACTS:
Sometime in May 1972, the United States invited the submission of bids for certain naval projects. Eligio de
Guzman & Co. Inc. responded to the invitation and submitted bids. Subsequently, the company received two
telegrams requesting it to confirm its price. In June 1972, the copany received a letter which said that the
company did not qualify to receive an award for the projects. The company then sued the United States of
America and individual petitioners demanding that the company perform the work on the projects, or for the
petitioners to pay damages and to issue a writ of preliminary injunction to restrain the petitioners from entering
into contracts with third parties concerning the project.
ISSUE:
1)

Do the petitioners exercise governmental or proprietary functions?

2)

Does the Court have jurisdiction over the case?

HELD:
The rule of State immunity exempts a State from being sued in the courts of another state without its consent or
waiver. This is a necessary consequence of the principles of independence and equality of states. However, state
immunity now extends only to governmental acts of the state. The restrictive application of State immunity is
proper only when the proceedings arise out of commercial transactions of the foreign sovereign. In this case, the
projects are integral part of the naval base which is devoted to the defense of the USA and Philippines which is,
indisputably, a function of the government. As such, by virtue of state immunity, the courts of the Philippines have
no jurisdiction over the case for the US government has not given consent to the filing of this suit.

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Republic of the Philippines

SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 108813 December 15, 1994
JUSMAG PHILIPPINES, petitioner,
vs.
THE NATIONAL LABOR RELATIONS COMMISSION (Second Division) and FLORENCIO SACRAMENTO,
Union President, JPFCEA, respondents.
Juan, Luces, Luna and Associates for petitioner.
Galutera & Aguilar Law Offices for private respondent.
PUNO, J.:
The immunity from suit of the Joint United States Military Assistance Group to the Republic of the Philippines
(JUSMAG-Philippines) is the pivotal issue in the case at bench.
JUSMAG assails the January 29, 1993 Resolution of the NATIONAL LABOR RELATIONS COMMISSION (public
respondent), in NLRC NCR CASE NO. 00-03-02092-92, reversing the July 30, 1991 Order of the Labor Arbiter,
and ordering the latter to assume jurisdiction over the complaint for illegal dismissal filed by FLORENCIO
SACRAMENTO (private respondent) against petitioner.
First, the undisputed facts.
Private respondent was one of the seventy-four (74) security assistance support personnel (SASP) working at
JUSMAG-Philippines. 1 He had been with JUSMAG from December 18, 1969, until his dismissal on April 27,
1992. When dismissed, he held the position of Illustrator 2 and was the incumbent President of JUSMAG
PHILIPPINES-FILIPINO CIVILIAN EMPLOYEES ASSOCIATION (JPFCEA), a labor organization duly registered
with the Department of Labor and Employment. His services were terminated allegedly due to the abolition of his
position. 2 He was also advised that he was under administrative leave until April 27, 1992, although the same was
not charged against his leave.
On March 31, 1992, private respondent filed a complaint with the Department of Labor and Employment on the
ground that he was illegally suspended and dismissed from service by JUSMAG. 3 He asked for his reinstatement.
JUSMAG then filed a Motion to Dismiss invoking its immunity from suit as an agency of the United States. It
further alleged lack of employer-employee relationship and that it has no juridical personality to sue and be sued. 4

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In an Order dated July 30, 1991, Labor Arbiter Daniel C. Cueto dismissed the subject complaint " for want of
jurisdiction." 5 Private respondent appealed 6 to the National Labor Relations Commission (public respondent),
assailing the ruling that petitioner is immune from suit for alleged violation of our labor laws. JUSMAG filed its
Opposition, 7 reiterating its immunity from suit for its non-contractual, governmental and/or public acts.
In a Resolution, dated January 29, 1993, the NLRC 8 reversed the ruling of the Labor Arbiter as it held that
petitioner had lost its right not to be sued. The resolution was predicated on two grounds: (1) the principle
of estoppel that JUSMAG failed to refute the existence of employer-employee relationship under the "control
test"; and (2) JUSMAG has waived its right to immunity from suit when it hired the services of private respondent
on December 18, 1969.
The NLRC relied on the case of Harry Lyons vs. United States of America, 9 where the "United States Government
(was considered to have) waived its immunity from suit by entering into (a) contract of stevedoring services, and
thus, it submitted itself to the jurisdiction of the local courts."
Accordingly, the case was remanded to the labor arbiter for reception of evidence as to the issue on illegal
dismissal.
Hence, this petition, JUSMAG contends:
I
THE PUBLIC RESPONDENT COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO
LACK AND/OR EXCESS OF JURISDICTION
A. IN REVERSING THE DECISION OF THE LABOR ARBITER AND IN NOT
AFFIRMING THE DISMISSAL OF THE COMPLAINT IT BEING A SUIT AGAINST
THE UNITED STATES OF AMERICA WHICH HAD NOT GIVEN ITS CONSENT
TO BE SUED; AND
B. IN FINDING WAIVER BY JUSMAG OF IMMUNITY FROM SUIT;
II
THE PUBLIC RESPONDENT COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO
LACK AND/OR EXCESS OF JURISDICTION
A. WHEN IT FOUND AN EMPLOYER-EMPLOYEE RELATIONSHIP BETWEEN
JUSMAG AND PRIVATE RESPONDENT; AND
B. WHEN IT CONSIDERED JUSMAG ESTOPPED FROM DENYING THAT
PRIVATE RESPONDENT IS ITS EMPLOYEE FOR FAILURE TO PRESENT
PROOF TO THE CONTRARY.
We find the petition impressed with merit.
It is meet to discuss the historical background of the JUSMAG to determine its immunity from suit.

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JUSMAG was created pursuant to the Military Assistance Agreement 10 dated March 21, 1947, between the
Government of the Republic of the Philippines and the Government of the United States of America. As agreed
upon, JUSMAG shall consist of Air, Naval and Army group, and its primary task was to advise and assist the
Philippines, on air force, army and naval matters. 11
Article 14 of the 1947 Agreement provides, inter alia, that "the cost of all services required by the Group, including
compensation of locally employed interpreters, clerks, laborers, and other personnel, except personal servants,
shall be borne by the Republic of the Philippines."
This set-up was to change in 1991. In Note No 22, addressed to the Department of Foreign Affairs (DFA) of the
Philippines, dated January 23, 1991, the United States Government, thru its Embassy, manifested its
preparedness "to provide funds to cover the salaries of security assistance support personnel" and security
guards, the rent of JUSMAG occupied buildings and housing, and the cost of utilities. 12 This offer was accepted
by our Government, thru the DFA, in Note No. 911725, dated April 18, 1991. 13
Consequently, a Memorandum of Agreement 14 was forged between the Armed Forces of the Philippines and
JUSMAG-Philippines, thru General Lisandro C. Abadia and U.S. Brigadier General Robert G. Sausser. The
Agreement delineated the terms of the assistance-in-kind of JUSMAG for 1991, the relevant parts of which read:
a. The term salaries as used in this agreement include those for the security guards currently
contracted between JUSMAG and A' Prime Security Services Inc., and the Security Assistance
Support Personnel (SASP). . . . .
b. The term Security Assistance Support Personnel (SASP) does not include active duty
uniformed members of the Armed Forces of the Philippines performing duty at JUSMAG.
c. It is understood that SASP are employees of the Armed Forces of the Philippines (AFP).
Therefore, the AFP agrees to appoint, for service with JUSMAG, no more than 74 personnel to
designated positions with JUSMAG.
d. SASP are under the total operational control of the Chief, JUSMAG-Philippines. The term
"Operational Control" includes, but is not limited to, all personnel administrative actions, such as:
hiring recommendations; firing recommendations; position classification; discipline; nomination
and approval of incentive awards; and payroll computation. Personnel administration will be
guided by Annex E of JUSMAG-Philippines Memo 10-2. For the period of time that there is an
exceptional funding agreement between the government of the Philippines and the United States
Government (USG), JUSMAG will pay the total payroll costs for the SASP employees. Payroll
costs include only regular salary; approved overtime, costs of living allowance; medical
insurance; regular contributions to the Philippine Social Security System, PAG-IBIG Fund and
Personnel Economic Relief Allowance (PERA); and the thirteenth-month bonus. Payroll costs do
not include gifts or other bonus payments in addition to those previously defined above.
Entitlements not considered payroll costs under this agreement will be funded and paid by the
AFP.
e. All SASP employed as of July 1, 1990 will continue their service with JUSMAG at their current
rate of pay and benefits up to 30 June 1991, with an annual renewal of employment
thereafter subject to renewal of their appointment with the AFP (employees and rates of pay are

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57

indicated at Enclosure 3). No promotion or transfer internal to JUSMAG of the listed personnel
will result in the reduction of their pay and benefits.
f. All SASP will, after proper classification, be paid salaries and benefits at established AFP
civilian rates. Rules for computation of pay and allowances will be made available to the
Comptroller, JUSMAG, by the Comptroller, GHQ, AFP. Additionally, any legally mandated
changes in salary levels or methods of computation shall be transmitted within 48 hours of receipt
by Comptroller, GHQ to Comptroller, JUSMAG.
g. The AFP agrees not to terminate SASP without 60 days prior written notice to Chief, JUSMAGPhilippines. Any termination of these personnel thought to be necessary because of budgetary
restrictions or manpower ceiling will be subject to consultations between AFP and JUSMAG to
ensure that JUSMAG's mission of dedicated support to the AFP will not be degraded or harmed in
any way.
h. The AFP agrees to assume the severance pay/retirement pay liability for all appointed SASP.
(Enclosure 3 lists the severance pay liability date for current SASP). Any termination of services,
other than voluntary resignations or termination for cause, will result in immediate payments of
AFP of all termination pay to the entitled employee. Vouchers for severance/retirement pay and
accrued bonuses and annual leave will be presented to the Comptroller, GHQ, AFP, not later than
14 calendar days prior to required date of payment.
i. All SASP listed in Enclosure 3 will continue to participate in the Philippine Social Security
System.
A year later, or in 1992, the United States Embassy sent another note of similar import to the Department of
Foreign Affairs (No. 227, dated April 8, 1992), extending the funding agreement for the salaries of SASP and
security guards until December 31, 1992.
From the foregoing, it is apparent that when JUSMAG took the services of private respondent, it was performing a
governmental function on behalf of the United States pursuant to the Military Assistance Agreement dated March
21, 1947. Hence, we agree with petitioner that the suit is, in effect, one against the United States Government,
albeit it was not impleaded in the complaint. Considering that the United States has not waived or consented to
the suit, the complaint against JUSMAG cannot not prosper.
In this jurisdiction, we recognize and adopt the generally accepted principles of international law as part of the law
of the land. 15 Immunity of State from suit is one of these universally recognized principles. In international law,
"immunity" is commonly understood as an exemption of the state and its organs from the judicial jurisdiction of
another state. 16 This is anchored on the principle of the sovereign equality of states under which one state cannot
assert jurisdiction over another in violation of the maxim par in parem non habet imperium (an equal has no power
over an equal).17
Under the traditional rule of State immunity, a state cannot be sued in the courts of another State, without its
consent or waiver. However, in Santos, et al., vs. Santos, et al., 18 we recognized an exception to the doctrine of
immunity from suit by a state, thus:
. . . . Nevertheless, if, where and when the state or its government enters into a contract, through
its officers or agents, in furtherance of a legitimate aim and purpose and pursuant to constitutional

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legislative authority, whereby mutual or reciprocal benefits accrue and rights and obligations arise
therefrom, and if the law granting the authority to enter into such contract does not provide for or
name the officer against whom action may be brought in the event of a breach thereof, the state
itself may be sued, even without its consent, because by entering into a contract, the sovereign
state has descended to the level of the citizen and its consent to be sued is implied from the very
act of entering into such contract. . . . . (emphasis ours)
It was in this light that the state immunity issue in Harry Lyons, Inc., vs. United States of America

19

was decided.

In the case of Harry Lyons, Inc., the petitioner entered into a contract with the United States Government for
stevedoring services at the U.S. Naval Base, Subic Bay, Philippines. It then sought to collect from the US
government sums of money arising from the contract. One of the issues posed in the case was whether or not the
defunct Court of First Instance had jurisdiction over the defendant United States, a sovereign state which cannot
be sued without its consent. This Court upheld the contention of Harry Lyons, Inc., that "when a sovereign state
enters into a contract with a private person, the state can be sued upon the theory that it has descended to the
level of an individual from which it can be implied that it has given its consent to be sued under the contract."
The doctrine of state immunity from suit has undergone further metamorphosis. The view evolved that the
existence of a contract does not, per se, mean that sovereign states may, at all times, be sued in local courts. The
complexity of relationships between sovereign states, brought about by their increasing commercial activities,
mothered a more restrictive application of the doctrine. 20 Thus, in United States of America vs. Ruiz, 21 we
clarified that our pronouncement in Harry Lyons, supra, with respect to the waiver of State immunity,
was obiter and "has no value as an imperative authority."
As it stands now, the application of the doctrine of immunity from suit has been restricted to sovereign orgovernmental
activities ( jure imperii). 22 The mantle of state immunity cannot be extended to commercial, private and proprietary acts ( jure
gestionis). As aptly stated by this Court (En banc) in US vs. Ruiz, supra:
The restrictive application of State immunity is proper when the proceedings arise out of commercial
transactions of the foreign sovereign, its commercial activities or economic affairs. Stated differently, a State
may be said to have descended to the level of an individual and thus can be deemed to have tacitly given its
consent to be used only when it enters into business contracts. It does not apply where the contract relates
to the exercise of its sovereign functions. (emphasis ours)
We held further, that the application of the doctrine of state immunity depends on the legal nature of the act. Ergo, since
a governmental function was involved the transaction dealt with the improvement of the wharves in the naval installation at
Subic Bay it was held that the United States was not deemed to have waived its immunity from suit.
Then came the case of United States vs. Hon. Rodrigo, et al. 23 In said case, Genove was employed as a cook in the Main
Club located at U.S. Air Force Recreation Center, John Hay Air Station. He was dismissed from service after he was found to
have polluted the stock of soup with urine. Genove countered with a complaint for damages. Apparently, the restaurant
services offered at the John Hay Air Station partake of the nature of a business enterprise undertaken by the United States
government in its proprietary capacity. The Court then noted that the restaurant is well known and available to the general
public, thus, the services are operated for profit, as a commercial and not a governmental activity. Speaking through Associate
Justice Isagani Cruz, the Court (En Banc) said:
The consequence of this finding is that the petitioners cannot invoke the doctrine of state immunity to justify
the dismissal of the damage suit against them by Genove. Such defense will not prosper even if it be
established that they were acting as agents of the United States when they investigated and later dismissed
Genove. For the matter, not even the United States government itself can claim such immunity. The reason

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59

is that by entering into the employment contract with Genove in the discharge of its proprietary functions, it
impliedly divested itself of its sovereign immunity from suit. (emphasis ours)
Conversely, if the contract was entered into in the discharge of its governmental functions, the sovereign state cannot be
deemed to have waived its immunity from suit. 24 Such is the case at bench. Prescinding from this premise, we need not
determine whether JUSMAG controls the employment conditions of the private respondent.
We also hold that there appears to be no basis for public respondent to rule that JUSMAG is stopped from denying the
existence of employer-employee relationship with private respondent. On the contrary, in its Opposition before the public
respondent, JUSMAG consistently contended that the (74) SASP, including private respondent, working in JUSMAG, are
employees of the Armed Forces of the Philippines. This can be gleaned from: (1) the Military Assistance Agreement, supra, (2)
the exchange of notes between our Government, thru Department of Foreign Affairs, and the United States, thru the US
Embassy to the Philippines, and (3) the Agreement on May 21, 1991, supra between the Armed Forces of the Philippines and
JUSMAG.
We symphatize with the plight of private respondent who had served JUSMAG for more than twenty (20) years. Considering
his length of service with JUSMAG, he deserves a more compassionate treatment. Unfortunately, JUSMAG is beyond the
jurisdiction of this Court. Nonetheless, the Executive branch, through the Department of Foreign Affairs and the Armed Forces
of the Philippines, can take the cudgel for private respondent and the other SASP working for JUSMAG, pursuant to the
aforestated Military Assistance Agreement.
IN VIEW OF THE FOREGOING, the petition for certiorari is GRANTED. Accordingly, the impugned Resolution dated January
29, 1993 of the National Labor Relations Commission is REVERSED and SET ASIDE. No costs.
SO ORDERED.
Narvasa, C.J., Regalado and Mendoza, JJ., concur.

Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. 154705

June 26, 2003

THE REPUBLIC OF INDONESIA, HIS EXCELLENCY AMBASSADOR SOERATMIN, and MINISTER

COUNSELLOR AZHARI KASIM, Petitioners,
vs.
JAMES VINZON, doing business under the name and style of VINZON TRADE AND SERVICES,Respondent.
DECISION
AZCUNA, J:

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This is a petition for review on certiorari to set aside the Decision of the Court of Appeals dated May 30, 2002 and
its Resolution dated August 16, 2002, in CA-G.R. SP No. 66894 entitled "The Republic of Indonesia, His
Excellency Ambassador Soeratmin and Minister Counselor Azhari Kasim v. Hon. Cesar Santamaria, Presiding
Judge, RTC Branch 145, Makati City, and James Vinzon, doing business under the name and style of Vinzon
Trade and Services."
Petitioner, Republic of Indonesia, represented by its Counsellor, Siti Partinah, entered into a Maintenance
Agreement in August 1995 with respondent James Vinzon, sole proprietor of Vinzon Trade and Services. The
Maintenance Agreement stated that respondent shall, for a consideration, maintain specified equipment at the
Embassy Main Building, Embassy Annex Building and the Wisma Duta, the official residence of petitioner
Ambassador Soeratmin. The equipment covered by the Maintenance Agreement are air conditioning units,
generator sets, electrical facilities, water heaters, and water motor pumps. It is likewise stated therein that the
agreement shall be effective for a period of four years and will renew itself automatically unless cancelled by
either party by giving thirty days prior written notice from the date of expiry.1
Petitioners claim that sometime prior to the date of expiration of the said agreement, or before August 1999, they
informed respondent that the renewal of the agreement shall be at the discretion of the incoming Chief of
Administration, Minister Counsellor Azhari Kasim, who was expected to arrive in February 2000. When Minister
Counsellor Kasim assumed the position of Chief of Administration in March 2000, he allegedly found respondents
work and services unsatisfactory and not in compliance with the standards set in the Maintenance Agreement.
Hence, the Indonesian Embassy terminated the agreement in a letter dated August 31, 2000. 2 Petitioners claim,
moreover, that they had earlier verbally informed respondent of their decision to terminate the agreement.
On the other hand, respondent claims that the aforesaid termination was arbitrary and unlawful. Respondent cites
various circumstances which purportedly negated petitioners alleged dissatisfaction over respondents services:
(a) in July 2000, Minister Counsellor Kasim still requested respondent to assign to the embassy an additional fulltime worker to assist one of his other workers; (b) in August 2000, Minister Counsellor Kasim asked respondent to
donate a prize, which the latter did, on the occasion of the Indonesian Independence Day golf tournament; and (c)
in a letter dated August 22, 2000, petitioner Ambassador Soeratmin thanked respondent for sponsoring a prize
and expressed his hope that the cordial relations happily existing between them will continue to prosper and be
strengthened in the coming years.
Hence, on December 15, 2000, respondent filed a complaint 3 against petitioners docketed as Civil Case No.
18203 in the Regional Trial Court (RTC) of Makati, Branch 145. On February 20, 2001, petitioners filed a Motion
to Dismiss, alleging that the Republic of Indonesia, as a foreign sovereign State, has sovereign immunity from suit
and cannot be sued as a party-defendant in the Philippines. The said motion further alleged that Ambassador
Soeratmin and Minister Counsellor Kasim are diplomatic agents as defined under the Vienna Convention on
Diplomatic Relations and therefore enjoy diplomatic immunity.4 In turn, respondent filed on March 20, 2001, an
Opposition to the said motion alleging that the Republic of Indonesia has expressly waived its immunity from suit.
He based this claim upon the following provision in the Maintenance Agreement:
"Any legal action arising out of this Maintenance Agreement shall be settled according to the laws of the
Philippines and by the proper court of Makati City, Philippines."
Respondents Opposition likewise alleged that Ambassador Soeratmin and Minister Counsellor Kasim can be
sued and held liable in their private capacities for tortious acts done with malice and bad faith. 5

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On May 17, 2001, the trial court denied herein petitioners Motion to Dismiss. It likewise denied the Motion for
Reconsideration subsequently filed.
The trial courts denial of the Motion to Dismiss was brought up to the Court of Appeals by herein petitioners in a
petition for certiorari and prohibition. Said petition, docketed as CA-G.R. SP No. 66894, alleged that the trial court
gravely abused its discretion in ruling that the Republic of Indonesia gave its consent to be sued and voluntarily
submitted itself to the laws and jurisdiction of Philippine courts and that petitioners Ambassador Soeratmin and
Minister Counsellor Kasim waived their immunity from suit.
On May 30, 2002, the Court of Appeals rendered its assailed decision denying the petition for lack of merit. 6 On
August 16, 2002, it denied herein petitioners motion for reconsideration. 7
Hence, this petition.
In the case at bar, petitioners raise the sole issue of whether or not the Court of Appeals erred in sustaining the
trial courts decision that petitioners have waived their immunity from suit by using as its basis the
abovementioned provision in the Maintenance Agreement.
The petition is impressed with merit.
International law is founded largely upon the principles of reciprocity, comity, independence, and equality of States
which were adopted as part of the law of our land under Article II, Section 2 of the 1987 Constitution. 8 The rule
that a State may not be sued without its consent is a necessary consequence of the principles of independence
and equality of States.9 As enunciated in Sanders v. Veridiano II, 10 the practical justification for the doctrine of
sovereign immunity is that there can be no legal right against the authority that makes the law on which the right
depends. In the case of foreign States, the rule is derived from the principle of the sovereign equality of States, as
expressed in the maxim par in parem non habet imperium. All states are sovereign equals and cannot assert
jurisdiction over one another.11 A contrary attitude would "unduly vex the peace of nations." 12
The rules of International Law, however, are neither unyielding nor impervious to change. The increasing need of
sovereign States to enter into purely commercial activities remotely connected with the discharge of their
governmental functions brought about a new concept of sovereign immunity. This concept, the restrictive theory,
holds that the immunity of the sovereign is recognized only with regard to public acts or acts jure imperii, but not
with regard to private acts or acts jure gestionis.13
In United States v. Ruiz,14 for instance, we held that the conduct of public bidding for the repair of a wharf at a
United States Naval Station is an act jure imperii. On the other hand, we considered as an act jure gestionis the
hiring of a cook in the recreation center catering to American servicemen and the general public at the John Hay
Air Station in Baguio City,15 as well as the bidding for the operation of barber shops in Clark Air Base in Angeles
City.16
Apropos the present case, the mere entering into a contract by a foreign State with a private party cannot be
construed as the ultimate test of whether or not it is an act jure imperii or jure gestionis. Such act is only the start
of the inquiry. Is the foreign State engaged in the regular conduct of a business? If the foreign State is not
engaged regularly in a business or commercial activity, and in this case it has not been shown to be so engaged,
the particular act or transaction must then be tested by its nature. If the act is in pursuit of a sovereign activity, or
an incident thereof, then it is an act jure imperii.17

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Hence, the existence alone of a paragraph in a contract stating that any legal action arising out of the agreement
shall be settled according to the laws of the Philippines and by a specified court of the Philippines is not
necessarily a waiver of sovereign immunity from suit. The aforesaid provision contains language not necessarily
inconsistent with sovereign immunity. On the other hand, such provision may also be meant to apply where the
sovereign party elects to sue in the local courts, or otherwise waives its immunity by any subsequent act. The
applicability of Philippine laws must be deemed to include Philippine laws in its totality, including the principle
recognizing sovereign immunity. Hence, the proper court may have no proper action, by way of settling the case,
except to dismiss it.
Submission by a foreign state to local jurisdiction must be clear and unequivocal. It must be given explicitly or by
necessary implication. We find no such waiver in this case.
Respondent concedes that the establishment of a diplomatic mission is a sovereign function.1wphi1 On the
other hand, he argues that the actual physical maintenance of the premises of the diplomatic mission, such as the
upkeep of its furnishings and equipment, is no longer a sovereign function of the State. 18
We disagree. There is no dispute that the establishment of a diplomatic mission is an act jure imperii. A sovereign
State does not merely establish a diplomatic mission and leave it at that; the establishment of a diplomatic
mission encompasses its maintenance and upkeep. Hence, the State may enter into contracts with private entities
to maintain the premises, furnishings and equipment of the embassy and the living quarters of its agents and
officials. It is therefore clear that petitioner Republic of Indonesia was acting in pursuit of a sovereign activity when
it entered into a contract with respondent for the upkeep or maintenance of the air conditioning units, generator
sets, electrical facilities, water heaters, and water motor pumps of the Indonesian Embassy and the official
residence of the Indonesian ambassador.
The Solicitor General, in his Comment, submits the view that, "the Maintenance Agreement was entered into by
the Republic of Indonesia in the discharge of its governmental functions. In such a case, it cannot be deemed to
have waived its immunity from suit." As to the paragraph in the agreement relied upon by respondent, the Solicitor
General states that it "was not a waiver of their immunity from suit but a mere stipulation that in the event they do
waive their immunity, Philippine laws shall govern the resolution of any legal action arising out of the agreement
and the proper court in Makati City shall be the agreed venue thereof. 19
On the matter of whether or not petitioners Ambassador Soeratmin and Minister Counsellor Kasim may be sued
herein in their private capacities, Article 31 of the Vienna Convention on Diplomatic Relations provides:
xxx
1. A diplomatic agent shall enjoy immunity from the criminal jurisidiction of the receiving State. He shall also enjoy
immunity from its civil and administrative jurisdiction, except in the case of:
(a) a real action relating to private immovable property situated in the territory of the receiving State,
unless he holds it on behalf of the sending State for the purposes of the mission;
(b) an action relating to succession in which the diplomatic agent is involved as executor, administrator,
heir or legatee as a private person and not on behalf of the sending State;
(c) an action relating to any professional or commercial activity exercised by the diplomatic agent in the
receiving State outside his official functions.

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xxx
The act of petitioners Ambassador Soeratmin and Minister Counsellor Kasim in terminating the Maintenance
Agreement is not covered by the exceptions provided in the abovementioned provision.
The Solicitor General believes that said act may fall under subparagraph (c) thereof, 20 but said provision clearly
applies only to a situation where the diplomatic agent engages in any professional or commercial activity outside
official functions, which is not the case herein.
WHEREFORE, the petition is hereby GRANTED. The decision and resolution of the Court of Appeals in CA G.R.
SP No. 66894 are REVERSED and SET ASIDE and the complaint in Civil Case No. 18203 against petitioners is
DISMISSED.
No costs.
SO ORDERED.
Davide, Jr., C.J., Bellosillo, Puno, Vitug, Panganiban, Quisumbing, Ynares-Santiago, Sandoval-Gutierrez, Carpio,
Corona, Carpio-Morales, and Callejo, Sr., JJ., concur.
Austria-Martinez, J., on leave.

REPUBLIC OF INDONESIA vs. JAMES VINZON [G.R. No. 154705. June 26, 2003]

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Immunity from suit

FACTS:
Petitioner Vinzon entered into a Maintenance Agreement with respondent. The maintenance agreement includes
the following specific equipments: air conditioning units, generator sets, electrical facilities, water heaters and
water motor pumps. The agreement shall be effective for 4 years.
The new Minister Counsellor allegedly found respondent's work and services unsatisfactory and not in compliance
with the standards set in the Agreement. The respondent terminated the agreement with the respondent. The
latter claim that it was unlawful and arbitrary. Respondent filed a Motion to Dismiss alleging that the Republic of
Indonesia, as a foreign state, has sovereign immunity from suit and cannot be sued as party-defendant in the
Philippines.
ISSUE:
W/N the CA erred in sustaining the trial court's decision that petitioners have waived their immunity from suit by
using as its basis the provision in the Maintenance Agreement.
HELD:
The mere entering into a contract by a foreign state with a private party cannot be construed as the ultimate test
of whether or not it is an act juri imperii or juri gestionis. Such act is only the start of the inquiry. There is no
dispute that the establishment of a diplomatic mission is an act juri imperii. The state may enter into contracts with
private entities to maintain the premises, furnishings and equipment of the embassy. The Republic of Indonesia is
acting in pursuit of a sovereign activity when it entered into a contract with the respondent. The maintenance
agreement was entered into by the Republic of Indonesia in the discharge of its governmental functions. It cannot
be deemed to have waived its immunity from suit.

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Republic of the Philippines

SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 142396

February 11, 2003

KHOSROW MINUCHER, petitioner,

vs.
HON. COURT OF APPEALS and ARTHUR SCALZO, respondents.
DECISION
VITUG, J.:
Sometime in May 1986, an Information for violation of Section 4 of Republic Act No. 6425, otherwise also known
as the "Dangerous Drugs Act of 1972," was filed against petitioner Khosrow Minucher and one Abbas Torabian
with the Regional Trial Court, Branch 151, of Pasig City. The criminal charge followed a "buy-bust operation"
conducted by the Philippine police narcotic agents in the house of Minucher, an Iranian national, where a quantity
of heroin, a prohibited drug, was said to have been seized. The narcotic agents were accompanied by private
respondent Arthur Scalzo who would, in due time, become one of the principal witnesses for the prosecution. On
08 January 1988, Presiding Judge Eutropio Migrino rendered a decision acquitting the two accused.
On 03 August 1988, Minucher filed Civil Case No. 88-45691 before the Regional Trial Court (RTC), Branch 19, of
Manila for damages on account of what he claimed to have been trumped-up charges of drug trafficking made by
Arthur Scalzo. The Manila RTC detailed what it had found to be the facts and circumstances surrounding the
case.
"The testimony of the plaintiff disclosed that he is an Iranian national. He came to the Philippines to study in the
University of the Philippines in 1974. In 1976, under the regime of the Shah of Iran, he was appointed Labor
Attach for the Iranian Embassies in Tokyo, Japan and Manila, Philippines. When the Shah of Iran was deposed
by Ayatollah Khomeini, plaintiff became a refugee of the United Nations and continued to stay in the Philippines.
He headed the Iranian National Resistance Movement in the Philippines.
"He came to know the defendant on May 13, 1986, when the latter was brought to his house and introduced to
him by a certain Jose Iigo, an informer of the Intelligence Unit of the military. Jose Iigo, on the other hand, was
met by plaintiff at the office of Atty. Crisanto Saruca, a lawyer for several Iranians whom plaintiff assisted as head
of the anti-Khomeini movement in the Philippines.
"During his first meeting with the defendant on May 13, 1986, upon the introduction of Jose Iigo, the defendant
expressed his interest in buying caviar. As a matter of fact, he bought two kilos of caviar from plaintiff and paid
P10,000.00 for it. Selling caviar, aside from that of Persian carpets, pistachio nuts and other Iranian products was
his business after the Khomeini government cut his pension of over $3,000.00 per month. During their introduction
in that meeting, the defendant gave the plaintiff his calling card, which showed that he is working at the US
Embassy in the Philippines, as a special agent of the Drug Enforcement Administration, Department of Justice, of
the United States, and gave his address as US Embassy, Manila. At the back of the card appears a telephone
number in defendants own handwriting, the number of which he can also be contacted.

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"It was also during this first meeting that plaintiff expressed his desire to obtain a US Visa for his wife and the wife
of a countryman named Abbas Torabian. The defendant told him that he [could] help plaintiff for a fee of $2,000.00
per visa. Their conversation, however, was more concentrated on politics, carpets and caviar. Thereafter, the
defendant promised to see plaintiff again.
"On May 19, 1986, the defendant called the plaintiff and invited the latter for dinner at Mario's Restaurant at
Makati. He wanted to buy 200 grams of caviar. Plaintiff brought the merchandize but for the reason that the
defendant was not yet there, he requested the restaurant people to x x x place the same in the refrigerator.
Defendant, however, came and plaintiff gave him the caviar for which he was paid. Then their conversation was
again focused on politics and business.
"On May 26, 1986, defendant visited plaintiff again at the latter's residence for 18 years at Kapitolyo, Pasig. The
defendant wanted to buy a pair of carpets which plaintiff valued at $27,900.00. After some haggling, they agreed
at $24,000.00. For the reason that defendant did not yet have the money, they agreed that defendant would come
back the next day. The following day, at 1:00 p.m., he came back with his $24,000.00, which he gave to the
plaintiff, and the latter, in turn, gave him the pair of carpets.1awphi1.nt
"At about 3:00 in the afternoon of May 27, 1986, the defendant came back again to plaintiff's house and directly
proceeded to the latter's bedroom, where the latter and his countryman, Abbas Torabian, were playing chess.
Plaintiff opened his safe in the bedroom and obtained $2,000.00 from it, gave it to the defendant for the latter's fee
in obtaining a visa for plaintiff's wife. The defendant told him that he would be leaving the Philippines very soon
and requested him to come out of the house for a while so that he can introduce him to his cousin waiting in a
cab. Without much ado, and without putting on his shirt as he was only in his pajama pants, he followed the
defendant where he saw a parked cab opposite the street. To his complete surprise, an American jumped out of
the cab with a drawn high-powered gun. He was in the company of about 30 to 40 Filipino soldiers with 6
Americans, all armed. He was handcuffed and after about 20 minutes in the street, he was brought inside the
house by the defendant. He was made to sit down while in handcuffs while the defendant was inside his bedroom.
The defendant came out of the bedroom and out from defendant's attach case, he took something and placed it
on the table in front of the plaintiff. They also took plaintiff's wife who was at that time at the boutique near his
house and likewise arrested Torabian, who was playing chess with him in the bedroom and both were handcuffed
together. Plaintiff was not told why he was being handcuffed and why the privacy of his house, especially his
bedroom was invaded by defendant. He was not allowed to use the telephone. In fact, his telephone was
unplugged. He asked for any warrant, but the defendant told him to `shut up. He was nevertheless told that he
would be able to call for his lawyer who can defend him.
"The plaintiff took note of the fact that when the defendant invited him to come out to meet his cousin, his safe
was opened where he kept the $24,000.00 the defendant paid for the carpets and another $8,000.00 which he
also placed in the safe together with a bracelet worth $15,000.00 and a pair of earrings worth $10,000.00. He also
discovered missing upon his release his 8 pieces hand-made Persian carpets, valued at $65,000.00, a painting
he bought for P30,000.00 together with his TV and betamax sets. He claimed that when he was handcuffed, the
defendant took his keys from his wallet. There was, therefore, nothing left in his house.
"That his arrest as a heroin trafficker x x x had been well publicized throughout the world, in various newspapers,
particularly in Australia, America, Central Asia and in the Philippines. He was identified in the papers as an
international drug trafficker. x x x
In fact, the arrest of defendant and Torabian was likewise on television, not only in the Philippines, but also in
America and in Germany. His friends in said places informed him that they saw him on TV with said news.

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"After the arrest made on plaintiff and Torabian, they were brought to Camp Crame handcuffed together, where
they were detained for three days without food and water." 1
During the trial, the law firm of Luna, Sison and Manas, filed a special appearance for Scalzo and moved for
extension of time to file an answer pending a supposed advice from the United States Department of State and
Department of Justice on the defenses to be raised. The trial court granted the motion. On 27 October 1988,
Scalzo filed another special appearance to quash the summons on the ground that he, not being a resident of the
Philippines and the action being one in personam, was beyond the processes of the court. The motion was denied
by the court, in its order of 13 December 1988, holding that the filing by Scalzo of a motion for extension of time to
file an answer to the complaint was a voluntary appearance equivalent to service of summons which could
likewise be construed a waiver of the requirement of formal notice. Scalzo filed a motion for reconsideration of the
court order, contending that a motion for an extension of time to file an answer was not a voluntary appearance
equivalent to service of summons since it did not seek an affirmative relief. Scalzo argued that in cases involving
the United States government, as well as its agencies and officials, a motion for extension was peculiarly
unavoidable due to the need (1) for both the Department of State and the Department of Justice to agree on the
defenses to be raised and (2) to refer the case to a Philippine lawyer who would be expected to first review the
case. The court a quo denied the motion for reconsideration in its order of 15 October 1989.
Scalzo filed a petition for review with the Court of Appeals, there docketed CA-G.R. No. 17023, assailing the
denial. In a decision, dated 06 October 1989, the appellate court denied the petition and affirmed the ruling of the
trial court. Scalzo then elevated the incident in a petition for review on certiorari, docketed G.R. No. 91173, to this
Court. The petition, however, was denied for its failure to comply with SC Circular No. 1-88; in any event, the
Court added, Scalzo had failed to show that the appellate court was in error in its questioned judgment.
Meanwhile, at the court a quo, an order, dated 09 February 1990, was issued (a) declaring Scalzo in default for
his failure to file a responsive pleading (answer) and (b) setting the case for the reception of evidence. On 12
March 1990, Scalzo filed a motion to set aside the order of default and to admit his answer to the complaint.
Granting the motion, the trial court set the case for pre-trial. In his answer, Scalzo denied the material allegations
of the complaint and raised the affirmative defenses (a) of Minuchers failure to state a cause of action in his
complaint and (b) that Scalzo had acted in the discharge of his official duties as being merely an agent of the Drug
Enforcement Administration of the United States Department of Justice. Scalzo interposed a counterclaim of
P100,000.00 to answer for attorneys' fees and expenses of litigation.
Then, on 14 June 1990, after almost two years since the institution of the civil case, Scalzo filed a motion to
dismiss the complaint on the ground that, being a special agent of the United States Drug Enforcement
Administration, he was entitled to diplomatic immunity. He attached to his motion Diplomatic Note No. 414 of the
United States Embassy, dated 29 May 1990, addressed to the Department of Foreign Affairs of the Philippines
and a Certification, dated 11 June 1990, of Vice Consul Donna Woodward, certifying that the note is a true and
faithful copy of its original. In an order of 25 June 1990, the trial court denied the motion to dismiss.
On 27 July 1990, Scalzo filed a petition for certiorari with injunction with this Court, docketed G.R. No. 94257 and
entitled "Arthur W. Scalzo, Jr., vs. Hon. Wenceslao Polo, et al.," asking that the complaint in Civil Case No. 8845691 be ordered dismissed. The case was referred to the Court of Appeals, there docketed CA-G.R. SP No.
22505, per this Courts resolution of 07 August 1990. On 31 October 1990, the Court of Appeals promulgated its
decision sustaining the diplomatic immunity of Scalzo and ordering the dismissal of the complaint against him.
Minucher filed a petition for review with this Court, docketed G.R. No. 97765 and entitled "Khosrow Minucher vs.
the Honorable Court of Appeals, et. al." (cited in 214 SCRA 242), appealing the judgment of the Court of Appeals.
In a decision, dated 24 September 1992, penned by Justice (now Chief Justice) Hilario Davide, Jr., this Court

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reversed the decision of the appellate court and remanded the case to the lower court for trial. The remand was
ordered on the theses (a) that the Court of Appeals erred in granting the motion to dismiss of Scalzo for lack of
jurisdiction over his person without even considering the issue of the authenticity of Diplomatic Note No. 414 and
(b) that the complaint contained sufficient allegations to the effect that Scalzo committed the imputed acts in his
personal capacity and outside the scope of his official duties and, absent any evidence to the contrary, the issue
on Scalzos diplomatic immunity could not be taken up.
The Manila RTC thus continued with its hearings on the case. On 17 November 1995, the trial court reached a
decision; it adjudged:
"WHEREFORE, and in view of all the foregoing considerations, judgment is hereby rendered for the plaintiff, who
successfully established his claim by sufficient evidence, against the defendant in the manner following:
"`Adjudging defendant liable to plaintiff in actual and compensatory damages of P520,000.00; moral damages in
the sum of P10 million; exemplary damages in the sum of P100,000.00; attorney's fees in the sum of P200,000.00
plus costs.
`The Clerk of the Regional Trial Court, Manila, is ordered to take note of the lien of the Court on this judgment to
answer for the unpaid docket fees considering that the plaintiff in this case instituted this action as a pauper
litigant."2
While the trial court gave credence to the claim of Scalzo and the evidence presented by him that he was a
diplomatic agent entitled to immunity as such, it ruled that he, nevertheless, should be held accountable for the
acts complained of committed outside his official duties. On appeal, the Court of Appeals reversed the decision of
the trial court and sustained the defense of Scalzo that he was sufficiently clothed with diplomatic immunity during
his term of duty and thereby immune from the criminal and civil jurisdiction of the "Receiving State" pursuant to
the terms of the Vienna Convention.
Hence, this recourse by Minucher. The instant petition for review raises a two-fold issue: (1) whether or not the
doctrine of conclusiveness of judgment, following the decision rendered by this Court in G.R. No. 97765, should
have precluded the Court of Appeals from resolving the appeal to it in an entirely different manner, and (2)
whether or not Arthur Scalzo is indeed entitled to diplomatic immunity.
The doctrine of conclusiveness of judgment, or its kindred rule of res judicata, would require 1) the finality of the
prior judgment, 2) a valid jurisdiction over the subject matter and the parties on the part of the court that renders it,
3) a judgment on the merits, and 4) an identity of the parties, subject matter and causes of action. 3 Even while one
of the issues submitted in G.R. No. 97765 - "whether or not public respondent Court of Appeals erred in ruling that
private respondent Scalzo is a diplomat immune from civil suit conformably with the Vienna Convention on
Diplomatic Relations" - is also a pivotal question raised in the instant petition, the ruling in G.R. No. 97765,
however, has not resolved that point with finality. Indeed, the Court there has made this observation "It may be mentioned in this regard that private respondent himself, in his Pre-trial Brief filed on 13 June 1990,
unequivocally states that he would present documentary evidence consisting of DEA records on his investigation
and surveillance of plaintiff and on his position and duties as DEA special agent in Manila. Having thus reserved
his right to present evidence in support of his position, which is the basis for the alleged diplomatic immunity, the
barren self-serving claim in the belated motion to dismiss cannot be relied upon for a reasonable, intelligent and
fair resolution of the issue of diplomatic immunity." 4

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Scalzo contends that the Vienna Convention on Diplomatic Relations, to which the Philippines is a signatory,
grants him absolute immunity from suit, describing his functions as an agent of the United States Drugs
Enforcement Agency as "conducting surveillance operations on suspected drug dealers in the Philippines
believed to be the source of prohibited drugs being shipped to the U.S., (and) having ascertained the target, (he
then) would inform the Philippine narcotic agents (to) make the actual arrest." Scalzo has submitted to the trial
court a number of documents 1. Exh. '2' - Diplomatic Note No. 414 dated 29 May 1990;
2. Exh. '1' - Certification of Vice Consul Donna K. Woodward dated 11 June 1990;
3. Exh. '5' - Diplomatic Note No. 757 dated 25 October 1991;
4. Exh. '6' - Diplomatic Note No. 791 dated 17 November 1992; and
5. Exh. '7' - Diplomatic Note No. 833 dated 21 October 1988.
6. Exh. '3' - 1st Indorsement of the Hon. Jorge R. Coquia, Legal Adviser, Department of Foreign Affairs,
dated 27 June 1990 forwarding Embassy Note No. 414 to the Clerk of Court of RTC Manila, Branch 19
(the trial court);
7. Exh. '4' - Diplomatic Note No. 414, appended to the 1st Indorsement (Exh. '3'); and
8. Exh. '8' - Letter dated 18 November 1992 from the Office of the Protocol, Department of Foreign Affairs,
through Asst. Sec. Emmanuel Fernandez, addressed to the Chief Justice of this Court. 5
The documents, according to Scalzo, would show that: (1) the United States Embassy accordingly advised the
Executive Department of the Philippine Government that Scalzo was a member of the diplomatic staff of the
United States diplomatic mission from his arrival in the Philippines on 14 October 1985 until his departure on 10
August 1988; (2) that the United States Government was firm from the very beginning in asserting the diplomatic
immunity of Scalzo with respect to the case pursuant to the provisions of the Vienna Convention on Diplomatic
Relations; and (3) that the United States Embassy repeatedly urged the Department of Foreign Affairs to take
appropriate action to inform the trial court of Scalzos diplomatic immunity. The other documentary exhibits were
presented to indicate that: (1) the Philippine government itself, through its Executive Department, recognizing and
respecting the diplomatic status of Scalzo, formally advised the "Judicial Department" of his diplomatic status and
his entitlement to all diplomatic privileges and immunities under the Vienna Convention; and (2) the Department of
Foreign Affairs itself authenticated Diplomatic Note No. 414. Scalzo additionally presented Exhibits "9" to "13"
consisting of his reports of investigation on the surveillance and subsequent arrest of Minucher, the certification of
the Drug Enforcement Administration of the United States Department of Justice that Scalzo was a special agent
assigned to the Philippines at all times relevant to the complaint, and the special power of attorney executed by
him in favor of his previous counsel 6 to show (a) that the United States Embassy, affirmed by its Vice Consul,
acknowledged Scalzo to be a member of the diplomatic staff of the United States diplomatic mission from his
arrival in the Philippines on 14 October 1985 until his departure on 10 August 1988, (b) that, on May 1986, with
the cooperation of the Philippine law enforcement officials and in the exercise of his functions as member of the
mission, he investigated Minucher for alleged trafficking in a prohibited drug, and (c) that the Philippine
Department of Foreign Affairs itself recognized that Scalzo during his tour of duty in the Philippines (14 October
1985 up to 10 August 1988) was listed as being an Assistant Attach of the United States diplomatic mission and
accredited with diplomatic status by the Government of the Philippines. In his Exhibit 12, Scalzo described the

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functions of the overseas office of the United States Drugs Enforcement Agency, i.e., (1) to provide criminal
investigative expertise and assistance to foreign law enforcement agencies on narcotic and drug control programs
upon the request of the host country, 2) to establish and maintain liaison with the host country and counterpart
foreign law enforcement officials, and 3) to conduct complex criminal investigations involving international criminal
conspiracies which affect the interests of the United States.
The Vienna Convention on Diplomatic Relations was a codification of centuries-old customary law and, by the
time of its ratification on 18 April 1961, its rules of law had long become stable. Among the city states of ancient
Greece, among the peoples of the Mediterranean before the establishment of the Roman Empire, and among the
states of India, the person of the herald in time of war and the person of the diplomatic envoy in time of peace
were universally held sacrosanct.7 By the end of the 16th century, when the earliest treatises on diplomatic law
were published, the inviolability of ambassadors was firmly established as a rule of customary international
law.8Traditionally, the exercise of diplomatic intercourse among states was undertaken by the head of state
himself, as being the preeminent embodiment of the state he represented, and the foreign secretary, the official
usually entrusted with the external affairs of the state. Where a state would wish to have a more prominent
diplomatic presence in the receiving state, it would then send to the latter a diplomatic mission. Conformably with
the Vienna Convention, the functions of the diplomatic mission involve, by and large, the representation of the
interests of the sending state and promoting friendly relations with the receiving state. 9
The Convention lists the classes of heads of diplomatic missions to include (a) ambassadors or nuncios
accredited to the heads of state, 10 (b) envoys,11 ministers or internuncios accredited to the heads of states; and (c)
charges d' affairs12 accredited to the ministers of foreign affairs. 13 Comprising the "staff of the (diplomatic) mission"
are the diplomatic staff, the administrative staff and the technical and service staff. Only the heads of missions, as
well as members of the diplomatic staff, excluding the members of the administrative, technical and service staff
of the mission, are accorded diplomatic rank. Even while the Vienna Convention on Diplomatic Relations provides
for immunity to the members of diplomatic missions, it does so, nevertheless, with an understanding that the
same be restrictively applied. Only "diplomatic agents," under the terms of the Convention, are vested with
blanket diplomatic immunity from civil and criminal suits. The Convention defines "diplomatic agents" as the heads
of missions or members of the diplomatic staff, thus impliedly withholding the same privileges from all others. It
might bear stressing that even consuls, who represent their respective states in concerns of commerce and
navigation and perform certain administrative and notarial duties, such as the issuance of passports and visas,
authentication of documents, and administration of oaths, do not ordinarily enjoy the traditional diplomatic
immunities and privileges accorded diplomats, mainly for the reason that they are not charged with the duty of
representing their states in political matters. Indeed, the main yardstick in ascertaining whether a person is a
diplomat entitled to immunity is the determination of whether or not he performs duties of diplomatic nature.
Scalzo asserted, particularly in his Exhibits "9" to "13," that he was an Assistant Attach of the United States
diplomatic mission and was accredited as such by the Philippine Government. An attach belongs to a category of
officers in the diplomatic establishment who may be in charge of its cultural, press, administrative or financial
affairs. There could also be a class of attaches belonging to certain ministries or departments of the government,
other than the foreign ministry or department, who are detailed by their respective ministries or departments with
the embassies such as the military, naval, air, commercial, agricultural, labor, science, and customs attaches, or
the like. Attaches assist a chief of mission in his duties and are administratively under him, but their main function
is to observe, analyze and interpret trends and developments in their respective fields in the host country and
submit reports to their own ministries or departments in the home government. 14 These officials are not generally
regarded as members of the diplomatic mission, nor are they normally designated as having diplomatic rank.

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In an attempt to prove his diplomatic status, Scalzo presented Diplomatic Notes Nos. 414, 757 and 791, all issued
post litem motam, respectively, on 29 May 1990, 25 October 1991 and 17 November 1992. The presentation did
nothing much to alleviate the Court's initial reservations in G.R. No. 97765, viz:
"While the trial court denied the motion to dismiss, the public respondent gravely abused its discretion in
dismissing Civil Case No. 88-45691 on the basis of an erroneous assumption that simply because of the
diplomatic note, the private respondent is clothed with diplomatic immunity, thereby divesting the trial court of
jurisdiction over his person.
"x x x x x x x x x
"And now, to the core issue - the alleged diplomatic immunity of the private respondent. Setting aside for the
moment the issue of authenticity raised by the petitioner and the doubts that surround such claim, in view of the
fact that it took private respondent one (1) year, eight (8) months and seventeen (17) days from the time his
counsel filed on 12 September 1988 a Special Appearance and Motion asking for a first extension of time to file
the Answer because the Departments of State and Justice of the United States of America were studying the case
for the purpose of determining his defenses, before he could secure the Diplomatic Note from the US Embassy in
Manila, and even granting for the sake of argument that such note is authentic, the complaint for damages filed by
petitioner cannot be peremptorily dismissed.
"x x x x x x x x x
"There is of course the claim of private respondent that the acts imputed to him were done in his official capacity.
Nothing supports this self-serving claim other than the so-called Diplomatic Note. x x x. The public respondent
then should have sustained the trial court's denial of the motion to dismiss. Verily, it should have been the most
proper and appropriate recourse. It should not have been overwhelmed by the self-serving Diplomatic Note whose
belated issuance is even suspect and whose authenticity has not yet been proved. The undue haste with which
respondent Court yielded to the private respondent's claim is arbitrary."
A significant document would appear to be Exhibit No. 08, dated 08 November 1992, issued by the Office of
Protocol of the Department of Foreign Affairs and signed by Emmanuel C. Fernandez, Assistant Secretary,
certifying that "the records of the Department (would) show that Mr. Arthur W. Scalzo, Jr., during his term of office
in the Philippines (from 14 October 1985 up to 10 August 1988) was listed as an Assistant Attach of the United
States diplomatic mission and was, therefore, accredited diplomatic status by the Government of the Philippines."
No certified true copy of such "records," the supposed bases for the belated issuance, was presented in evidence.
Concededly, vesting a person with diplomatic immunity is a prerogative of the executive branch of the
government. In World Health Organization vs. Aquino, 15 the Court has recognized that, in such matters, the hands
of the courts are virtually tied. Amidst apprehensions of indiscriminate and incautious grant of immunity, designed
to gain exemption from the jurisdiction of courts, it should behoove the Philippine government, specifically its
Department of Foreign Affairs, to be most circumspect, that should particularly be no less than compelling, in its
post litem motam issuances. It might be recalled that the privilege is not an immunity from the observance of the
law of the territorial sovereign or from ensuing legal liability; it is, rather, an immunity from the exercise of territorial
jurisdiction.16 The government of the United States itself, which Scalzo claims to be acting for, has formulated its
standards for recognition of a diplomatic agent. The State Department policy is to only concede diplomatic status
to a person who possesses an acknowledged diplomatic title and "performs duties of diplomatic
nature."17 Supplementary criteria for accreditation are the possession of a valid diplomatic passport or, from States
which do not issue such passports, a diplomatic note formally representing the intention to assign the person to

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diplomatic duties, the holding of a non-immigrant visa, being over twenty-one years of age, and performing
diplomatic functions on an essentially full-time basis. 18 Diplomatic missions are requested to provide the most
accurate and descriptive job title to that which currently applies to the duties performed. The Office of the Protocol
would then assign each individual to the appropriate functional category.19
But while the diplomatic immunity of Scalzo might thus remain contentious, it was sufficiently established that,
indeed, he worked for the United States Drug Enforcement Agency and was tasked to conduct surveillance of
suspected drug activities within the country on the dates pertinent to this case. If it should be ascertained that
Arthur Scalzo was acting well within his assigned functions when he committed the acts alleged in the complaint,
the present controversy could then be resolved under the related doctrine of State Immunity from Suit.
The precept that a State cannot be sued in the courts of a foreign state is a long-standing rule of customary
international law then closely identified with the personal immunity of a foreign sovereign from suit 20 and, with the
emergence of democratic states, made to attach not just to the person of the head of state, or his representative,
but also distinctly to the state itself in its sovereign capacity. 21 If the acts giving rise to a suit are those of a foreign
government done by its foreign agent, although not necessarily a diplomatic personage, but acting in his official
capacity, the complaint could be barred by the immunity of the foreign sovereign from suit without its consent.
Suing a representative of a state is believed to be, in effect, suing the state itself. The proscription is not accorded
for the benefit of an individual but for the State, in whose service he is, under the maxim - par in parem, non habet
imperium - that all states are sovereign equals and cannot assert jurisdiction over one another. 22 The implication,
in broad terms, is that if the judgment against an official would require the state itself to perform an affirmative act
to satisfy the award, such as the appropriation of the amount needed to pay the damages decreed against him,
the suit must be regarded as being against the state itself, although it has not been formally impleaded. 23
In United States of America vs. Guinto,24 involving officers of the United States Air Force and special officers of the
Air Force Office of Special Investigators charged with the duty of preventing the distribution, possession and use
of prohibited drugs, this Court has ruled "While the doctrine (of state immunity) appears to prohibit only suits against the state without its consent, it is also
applicable to complaints filed against officials of the state for acts allegedly performed by them in the discharge of
their duties. x x x. It cannot for a moment be imagined that they were acting in their private or unofficial capacity
when they apprehended and later testified against the complainant. It follows that for discharging their duties as
agents of the United States, they cannot be directly impleaded for acts imputable to their principal, which has not
given its consent to be sued. x x x As they have acted on behalf of the government, and within the scope of their
authority, it is that government, and not the petitioners personally, [who were] responsible for their acts." 25
This immunity principle, however, has its limitations. Thus, Shauf vs. Court of Appeals 26 elaborates:
"It is a different matter where the public official is made to account in his capacity as such for acts contrary to law
and injurious to the rights of the plaintiff. As was clearly set forth by Justice Zaldivar in Director of the Bureau of
Telecommunications, et al., vs. Aligaen, et al. (33 SCRA 368): `Inasmuch as the State authorizes only legal acts
by its officers, unauthorized acts of government officials or officers are not acts of the State, and an action against
the officials or officers by one whose rights have been invaded or violated by such acts, for the protection of his
rights, is not a suit against the State within the rule of immunity of the State from suit. In the same tenor, it has
been said that an action at law or suit in equity against a State officer or the director of a State department on the
ground that, while claiming to act for the State, he violates or invades the personal and property rights of the
plaintiff, under an unconstitutional act or under an assumption of authority which he does not have, is not a suit
against the State within the constitutional provision that the State may not be sued without its consent. The

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rationale for this ruling is that the doctrine of state immunity cannot be used as an instrument for perpetrating an
injustice.
"x x x x x x x x x
"(T)he doctrine of immunity from suit will not apply and may not be invoked where the public official is being sued
in his private and personal capacity as an ordinary citizen. The cloak of protection afforded the officers and agents
of the government is removed the moment they are sued in their individual capacity. This situation usually arises
where the public official acts without authority or in excess of the powers vested in him. It is a well-settled principle
of law that a public official may be liable in his personal private capacity for whatever damage he may have
caused by his act done with malice and in bad faith or beyond the scope of his authority and jurisdiction." 27
A foreign agent, operating within a territory, can be cloaked with immunity from suit but only as long as it can be
established that he is acting within the directives of the sending state. The consent of the host state is an
indispensable requirement of basic courtesy between the two sovereigns. Guinto and Shauf both involve officers
and personnel of the United States, stationed within Philippine territory, under the RP-US Military Bases
Agreement. While evidence is wanting to show any similar agreement between the governments of the
Philippines and of the United States (for the latter to send its agents and to conduct surveillance and related
activities of suspected drug dealers in the Philippines), the consent or imprimatur of the Philippine government to
the activities of the United States Drug Enforcement Agency, however, can be gleaned from the facts heretofore
elsewhere mentioned. The official exchanges of communication between agencies of the government of the two
countries, certifications from officials of both the Philippine Department of Foreign Affairs and the United States
Embassy, as well as the participation of members of the Philippine Narcotics Command in the "buy-bust
operation" conducted at the residence of Minucher at the behest of Scalzo, may be inadequate to support the
"diplomatic status" of the latter but they give enough indication that the Philippine government has given
its imprimatur, if not consent, to the activities within Philippine territory of agent Scalzo of the United States Drug
Enforcement Agency. The job description of Scalzo has tasked him to conduct surveillance on suspected drug
suppliers and, after having ascertained the target, to inform local law enforcers who would then be expected to
make the arrest. In conducting surveillance activities on Minucher, later acting as the poseur-buyer during the buybust operation, and then becoming a principal witness in the criminal case against Minucher, Scalzo hardly can be
said to have acted beyond the scope of his official function or duties.
All told, this Court is constrained to rule that respondent Arthur Scalzo, an agent of the United States Drug
Enforcement Agency allowed by the Philippine government to conduct activities in the country to help contain the
problem on the drug traffic, is entitled to the defense of state immunity from suit.
WHEREFORE, on the foregoing premises, the petition is DENIED. No costs.
SO ORDERED.
Davide, Jr., C.J., (Chairman), Ynares-Santiago, Carpio and Azcuna, JJ., concur

PIL

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