C. STATE IMMUNITY EE.M.
DELACRUZ, DMD
STATE IMMUNITY
ACT NO. 3083
AN ACT DEFINING THE CONDITIONS UNDER WHICH
THE GOVERNMENT OF THE PHILIPPINE ISLANDS MAY BE
SUED
Section 1. Complaint against Government. Subject to the
provisions of this Act, the Government of the Philippine Islands hereby
consents and submits to be sued upon any moneyed claim involving
liability arising from contract, expressed or implied, which could serve
as a basis of civil action between private parties.
Sec. 2. A person desiring to avail himself of the privilege herein
conferred must show that he has presented his claim to the Insular
Auditor 1 and that the latter did not decide the same within two
months from the date of its presentation.
Sec. 3. Venue. Original actions brought pursuant to the authority
conferred in this Act shall be instituted in the Court of First Instance of
the City of Manila or of the province were the claimant resides, at the
option of the latter, upon which court exclusive original jurisdiction is
hereby conferred to hear and determine such actions.
Sec. 4. Actions instituted as aforesaid shall be governed by the same
rules of procedure, both original and appellate, as if the litigants were
private parties.
Sec. 5. When the Government of the Philippine Island is plaintiff in an
action instituted in any court of original jurisdiction, the defendant
shall have the right to assert therein, by way of set-off or counterclaim
in a similar action between private parties.
Sec. 6. Process in actions brought against the Government of the
Philippine Islands pursuant to the authority granted in this Act shall be
served upon the Attorney-General 2 whose duty it shall be to appear
and make defense, either himself or through delegates.
Sec. 7. Execution. No execution shall issue upon any judgment
rendered by any court against the Government of the Philippine
Islands under the provisions of this Act; but a copy thereof duly
certified by the clerk of the Court in which judgment is rendered shall
be transmitted by such clerk to the Governor-General, 3 within five
days after the same becomes final.
Sec. 8. Transmittal of Decision. The Governor-General, 4 at the
commencement of each regular session of the Legislature, 5 shall
transmit to that body for appropriate action all decisions so received
by him, and if said body determine that payment should be made, it
shall appropriate the sum which the Government has been sentenced
to pay, including the same in the appropriations for the ensuing year.
Sec. 9. This Act shall take effect on its approval.
Approved: March 16, 1923.
COMMONWEALTH ACT NO. 327
AN ACT FIXING THE TIME WITHIN WHICH THE AUDITOR
GENERAL SHALL RENDER HIS DECISIONS AND
PRESCRIBING THE MANNER OF APPEAL THEREFROM
Section 1. In all cases involving the settlement of accounts or claims,
other than those of accountable officers, the Auditor General shall act
and decide the same within sixty days, exclusive of Sundays and
holidays, after their presentation. If said accounts or claims need
reference to other persons, office or offices, or to a party interested,
the period aforesaid shall be counted from the time the last comment
necessary to a proper decision is received by him. With respect to the
accounts of accountable officers, the Auditor General shall act on the
same within one hundred days after their submission, Sundays and
holidays excepted.
In case of accounts or claims already submitted to but still pending
decision by the Auditor General on or before the approval of this Act,
C. STATE IMMUNITY
the periods provided in this section shall commence from the date of
such approval.
Section 2. The party aggrieved by the final decision of the Auditor
General in the settlement of an account for claim may, within thirty
days from receipt of the decision, take an appeal in writing:
(a) To the President of the United States, pending the final and
complete withdrawal of her sovereignty over the Philippines, or
(b) To the President of the Philippines, or
(c) To the Supreme Court of the Philippines if the appellant is a
private person or entity.
If there are more than one appellant, all appeals shall be taken to the
same authority resorted to by the first appellant.
From a decision adversely affecting the interests of the Government,
the appeal may be taken by the proper head of the department or in
case of local governments by the head of the office or branch of the
Government immediately concerned.
The appeal shall specifically set forth the particular action of the
Auditor General to which exception is taken with the reasons and
authorities relied on for reversing such decision.
Section 3. This Act shall take effect upon its approval.
Approved: June 18. 1938.
EE.M.DELACRUZ, DMD
PRESIDENTIAL DECREE No. 1807
PRESCRIBING THE PROCEDURE WHEREBY THE
REPUBLIC OF THE PHILIPPINES MAY WAIVE SOVEREIGN
IMMUNITY FROM SUIT AND OTHER LEGAL PROCEEDING
WITH RESPECT TO ITSELF OR ITS PROPERTY IN
CONNECTION WITH FOREIGN OBLIGATIONS
CONTRACTED BY IT PURSUANT TO LAW
WHEREAS, in the pursuit of economic growth and development, it has
become imperative for the Republic of the Philippines to enter into
contracts or transactions with international banking, financial and
other foreign enterprises;
WHEREAS, recognizing this need, existing legislation expressly
authorize the Republic of the Philippines to contract foreign
obligations, including borrowings in foreign currency, and to guarantee
foreign obligations of corporations and other entities owned or
controlled by the Government of the Philippines;
WHEREAS, circumstances in the international market may require that
sovereign states entering into contracts or transactions make express
waivers of sovereign immunity in connection with such contracts or
transactions;
WHEREAS, it is in the national interest that a procedure be prescribed
with respect to the waiver of sovereign immunity of the Republic of
the Philippines in respect of international contracts or transactions
entered into by it;
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the
Republic of the Philippines, by virtue of the powers vested in me by
the Constitution, do hereby order and decree:
Section 1. Procedure for, and Conditions of, Waiver of Sovereign
Immunity.
In instances where the law expressly authorizes the Republic of the
Philippines to contract or incur a foreign obligation, it may consent to
be sued in connection therewith. The President of the Philippines or his
duly designated representative may, in behalf of the Republic of the
Philippines, contractually agree to waive any claim to sovereign
immunity from suit or legal proceedings and from set-off, attachment
or executive with respect to its property, and to be sued in any
appropriate jurisdiction in regard to such foreign obligation.
For purposes of this decree, a foreign obligation means any direct,
indirect, or contingent obligation or liability capable of pecuniary
estimation and payable in a currency other than Philippine currency.
C. STATE IMMUNITY EE.M.DELACRUZ, DMD

Consequently, the Government issued an act allowing the

Section 2. Validity of existing Waivers. plaintiff to commence a lawsuit against it.
Nothing in this Decree shall be construed to revoke or repeal any
waiver of sovereign immunity from suit or legal proceedings or from
ISSUE:
set-off, attachment or execution granted under or pursuant to other
1) WON the Government conceded its liability to the plaintiff by
provisions of law.
allowing a lawsuit to commence against it.
Section 3. Effectivity. This Decree shall take effect immediately. 2) WON the chauffeur is a government employee or agent.

HELD:
ARTICLE 2180 (NCC) 1) NO.
xxx By consenting to be sued a state simply waives its immunity from
The State is responsible in like manner when it acts through a special suit. It does not thereby concede its liability to plaintiff, or create any
agent; but not when the damage has been caused by the official to cause of action in his favor, or extend its liability to any cause not
whom the task done properly pertains, in which case what is provided previously recognized. It merely gives a remedy to enforce a
in Article 2176 shall be applicable. preexisting liability and submits itself to the jurisdiction of the court,
xxx subject to its right to interpose any lawful defense.
2) NO.
We will now examine the substantive law touching the defendant's
liability for the negligent acts of its officers, agents, and employees.
1. G.R. No. L-11154 March 21, 1916 Paragraph 5 of article 1903 of the Civil Code reads: The state is liable
E. MERRITTvs. in this sense when it acts through a special agent, but not when the
damage should have been caused by the official to whom properly it
GOVERNMENT OF THE PHILIPPINE ISLANDS
pertained to do the act performed, in which case the provisions of the
preceding article shall be applicable. The responsibility of the state is
FACTS:
limited to that which it contracts through a special agent, duly
Counsel for the plaintiff insists that the trial court erred (1) "in
empowered by a definite order or commission to perform some act or
limiting the general damages which the plaintiff suffered to P5,000,
charged with some definite purpose which gives rise to the claim.
instead of P25,000 as claimed in the complaint," and (2) "in limiting
The chauffeur of the ambulance of the General Hospital was not
the time when plaintiff was entirely disabled to two months and
such an agent.
twenty-one days and fixing the damage accordingly in the sum of
P2,666, instead of P6,000 as claimed by plaintiff in his complaint."
The Attorney-General on behalf of the defendant urges that
the trial court erred: (a) in finding that the collision between the
plaintiff's motorcycle and the ambulance of the General Hospital was
due to the negligence of the chauffeur, who is an alleged agent or
employee of the Government; (b) in holding that the Government of
the Philippine Islands is liable for the damages sustained by the
plaintiff as a result of the collision, even if it be true that the collision
was due to the negligence of the chauffeur; and (c) in rendering
judgment against the defendant for the sum of P14,741.
C. STATE IMMUNITY EE.M.DELACRUZ, DMD
GRN L-35645 May 22, 1985.
2.
UNITED STATES OF AMERICA, CAPT. JAMES B. GALLOWAY,
WILLIAM I. COLLINS and ROBERT GOHIER vs. HON. V. M.
RUIZ, Presiding Judge of Branch XV, Court of First Instance of
Rizal and ELIGIO DE GUZMAN & CO., INC.
FACTS:
The United States of America had a naval base in Subic,
Zambales. The base was one of those provided in the Military Bases
Agreement between the Philippines and the United States.
Sometime in May, 1972, the United States invited the
submission of bids for a couple of repair projects. Eligio de Guzman
land Co., Inc. responded to the invitation and submitted bids.
Subsequent thereto, the company received from the US two telegrams
requesting it to confirm its price proposals and for the name of its
bonding company. The company construed this as an acceptance of its
offer so they complied with the requests. The company received a
letter which was signed by William I. Collins of Department of the
Navy of the United States, also one of the petitioners herein informing
that the company did not qualify to receive an award for the projects
because of its previous unsatisfactory performance rating in repairs,
and that the projects were awarded to third parties. The company filed
a complaint against the defendants herein demanding specific
performance that the company be allowed 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.
ISSUE: WON the US is immune from suit having dealt with a private
corporation.
HELD: YES.
A State may be said to have descended the 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.
3. G.R. No. 129406 March 6, 2006
REPUBLIC OF THE PHILIPPINES represented by the
PRESIDENTIAL COMMISSION ON GOOD GOVERNMENT
(PCGG) vs.
SANDIGANBAYAN (SECOND DIVISION) and ROBERTO S.
BENEDICTO.
FACTS:
The PCGG issued writs placing under sequestration all
business enterprises, entities and other properties, real and personal,
owned or registered in the name of private respondent Benedicto, or
of corporations in which he appeared to have controlling or majority
interest due to his involvement in cases of ill-gotten wealth. Among
the properties thus sequestered and taken over by PCGG fiscal agents
were the 227 shares in NOGCCI owned by and registered under the
name of private respondent. As sequester of the 227 shares formerly
owned by Benedicto, PCGG did not pay the monthly membership fee.
Later on, the shares were declared to be delinquent to be put into an
auction sale. Despite filing a writ of injunction, it was nevertheless
dismissed. So petitioner Republic and private respondent Benedicto
entered into a Compromise Agreement which contains a general
release clause where petitioner agreed and bound itself to lift the
sequestration on the 227 NOGCCI shares acknowledging that it was
within private respondents capacity to acquire the same shares out of
his income from business and the exercise of his profession. Implied in
this undertaking is the recognition by petitioner that the subject
shares of stock could not have been ill-gotten
Benedicto filed a Motion for Release from Sequestration and
Return of Sequestered Shares/Dividends praying, inter alia, that his
NOGCCI shares of stock be specifically released from sequestration
and returned, delivered or paid to him as part of the parties
Compromise Agreement in that case. It was granted but the shares
were ordered to be put under the custody of the Clerk of Court. Along
with this, PCGG was ordered to deliver the shares to the Clerk of Court
which it failed to comply with without any justifiable grounds.
In a last-ditch attempt to escape liability, petitioner Republic,
through the PCGG, invokes state immunity from suit.
C. STATE IMMUNITY EE.M.DELACRUZ, DMD
ISSUE: WON the Republic can invoke state immunity.
HELD: NO.
In fact, by entering into a Compromise Agreement with private
respondent Benedicto, petitioner Republic thereby stripped itself of its
immunity from suit and placed itself in the same level of its adversary.
When the State enters into contract, through its officers or agents, in
furtherance of a legitimate aim and purpose and pursuant to
constitutional legislative authority, whereby mutual or reciprocal
benefits accrue and rights and obligations arise therefrom, the State
may be sued even without its express consent, precisely because by
entering into a contract the sovereign descends to the level of the
citizen. Its consent to be sued is implied from the very act of entering
into such contract, breach of which on its part gives the corresponding
right to the other party to the agreement.
G.R. No. L-23139December 17, 1966
4.
MOBIL PHILIPPINES EXPLORATION, INC.vs.
CUSTOMS ARRASTRE SERVICE and BUREAU of CUSTOMS
FACTS:
Four cases of rotary drill parts were shipped from abroad on
S.S. "Leoville" consigned to Mobil Philippines Exploration, Inc., Manila.
It was discharged to the custody of the Customs Arrastre Service, the
unit of the Bureau of Customs then handling arrastre operations
therein. The Customs Arrastre Service later delivered to the broker of
the consignee three cases only. Petitioner filed suit in the Court of First
Instance of Manila against the Customs Arrastre Service and the
Bureau of Customs to recover the value of the undelivered case plus
other damages. The respondents filed a motion to dismiss on the
ground that not being persons under the law, they cannot be sued.
ISSUE: WON the defendants can invoke state immunity.
HELD: YES.
Now, the fact that a non-corporate government entity
performs a function proprietary in nature does not necessarily result in
its being suable. If said non-governmental function is undertaken as
an incident to its governmental function, there is no waiver thereby of
the sovereign immunity from suit extended to such government entity.
The Bureau of Customs, to repeat, is part of the Department
of Finance with no personality of its own apart from that of the
national government. Its primary function is governmental, that of
assessing and collecting lawful revenues from imported articles and all
other tariff and customs duties, fees, charges, fines and penalties. To
this function, arrastre service is a necessary incident.
G.R. No. L-33112 June 15, 1978
5.
PHILIPPINE NATIONAL BANK vs.
HON. JUDGE JAVIER PABALAN, Judge of the Court of First
Instance, Branch III, La Union, AGOO TOBACCO PLANTERS
ASSOCIATION, INC., PHILIPPINE VIRGINIA TOBACCO
ADMINISTRATION, and PANFILO P. JIMENEZ, Deputy Sheriff,
La Union
FACTS:
The reliance of petitioner Philippine National Bank against respondent
Judge Javier Pabalan who issued a writ of execution, followed
thereafter by a notice of garnishment of the funds of respondent
Philippine Virginia Tobacco Administration, deposited with it, is on the
fundamental constitutional law doctrine of non-suability of a state, it
being alleged that such funds are public in character.
ISSUE: WON the funds are public in character, thus immune from suit.
HELD: NO.
It is to be admitted that under the present Constitution, what
was formerly implicit as a fundamental doctrine in constitutional law
has been set forth in express terms: "The State may not be sued
without its consent." If the funds appertained to one of the regular
C. STATE IMMUNITY EE.M.DELACRUZ, DMD
departments or offices in the government, then, certainly, such a
provision would be a bar to garnishment. Such is not the case here.
It is well-settled that when the government enters into
commercial business, it abandons its sovereign capacity and is to be
treated like any other corporation. By engaging in a particular
business thru the instrumentality of a corporation, the government
divests itself pro hac vice of its sovereign character, so as to render
the corporation subject to the rules of law governing private
corporations.
6. G.R. No. L-31635 August 31, 1971
ANGEL MINISTERIO and ASUNCION SADAYA vs.
THE COURT OF FIRST INSTANCE OF CEBU, Fourth Branch,
Presided by the Honorable, Judge JOSE C. BORROMEO, THE
PUBLIC HIGHWAY COMMISSIONER, and THE AUDITOR
GENERAL
FACTS:
Petitioners sought the payment of just compensation for a
registered lot alleging that in 1927 the National Government through
its authorized representatives took physical and material possession of
it and used it for the widening of a national road, without paying just
compensation and without any agreement, either written or verbal.
There was an allegation of repeated demands for the payment of its
price or return of its possession, but defendants Public Highway
Commissioner and the Auditor General refused to restore its
possession.
ISSUE: WON the defendants are immune from suit.
HELD: NO.
Where the judgment in such a case would result not only in
the recovery of possession of the property in favor of said citizen but
also in a charge against or financial liability to the Government, then
the suit should be regarded as one against the government itself, and,
consequently, it cannot prosper or be validly entertained by the courts
except with the consent of said Government.
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.
7. G.R. No. 206484, June 29, 2016
DEPARTMENT OF TRANSPORTATION AND COMMUNICATIONS (DOTC),
PETITIONER, VS. SPOUSES VICENTE ABECINA AND MARIA CLEOFE
ABECINA, RESPONDENTS.
Facts:
Respondent spouses Vicente and Maria Cleofe Abecina (respondents/
spouses Abecina) are the registered owners of five parcels of land in
Sitio Paltik, Barrio Sta. Rosa, Jose Panganiban, Camarines Norte. The
properties are covered by Transfer Certificates of Title (TCT) Nos.
T-25094, T-25095, T-25096, T-25097, and T-25098.
In February 1993, the DOTC awarded Digitel Telecommunications
Philippines, Inc. (Digitel) a contract for the management, operation,
maintenance, and development of a Regional Telecommunications
Development Project (RTDP) under the National Telephone Program,
Phase I, Tranche 1 (NTPI-1)
Later on, the municipality of Jose Panganiban, Camarines Norte,
donated a one thousand two hundred (1,200) square-meter parcel of
land to the DOTC for the implementation of the RDTP in the
municipality. However, the municipality erroneously included portions
of the respondents' property in the donation. Pursuant to the FLAs,
Digitel constructed a telephone exchange on the property which
encroached on the properties of the respondent spouses
On April 29, 2003, the respondent spouses sent a final demand letter
to both the DOTC and Digitel to vacate the premises and to pay
unpaid rent/damages in the amount of one million two hundred
C. STATE IMMUNITY EE.M.DELACRUZ, DMD
thousand pesos (P1,200,000.00). Neither the DOTC nor Digitel
complied with the demand.
The RTC held that as the lawful owners of the properties, the
respondent spouses enjoyed the right to use and to possess them -
rights that were violated by the DOTC's unauthorized entry,
construction, and refusal to vacate. The RTC ordered the Department -
as a builder in bad faith -to forfeit the improvements and vacate the
properties; and (2) awarded the spouses with P1,200,000.00 as actual
damages, P200,000.00 as moral damages, and P200,000.00 as
exemplary damages plus attorney's fees and costs of suit, The Court
of Appeals affirmed the RTCs decision.
Hence this petition.
Issue:
Whether the DOTCs contention that instead of allowing recovery of
the property, the case should be remanded to the RTC for
determination of just compensation has merit
Ruling:
The Philippines recognizes the vital role of information and
communication in nation building.As a consequence, we have adopted
a policy environment that aspires for the full development of
communications infrastructure to facilitate the flow of information into,
out of, and across the country. To this end, the DOTC has been
mandated with the promotion, development, and regulation of
dependable and coordinated networks of communication.
The DOTC encroached on the respondents' properties when it
constructed the local telephone exchange in Daet, Camarines Norte.
The exchange was part of the RTDP pursuant to the National
Telephone Program. We have no doubt that when the DOTC
constructed the encroaching structures and subsequently entered the
FLA with Digitel for their maintenance, it was carrying out a sovereign
function. Therefore, we agree with the DOTC's contention that these
are acts jure imperii that fall within the cloak of state immunity.
The Constitution identifies the limitations to the awesome and near-
limitless powers of the State. Chief among these limitations are the
principles that no person shall be deprived of life, liberty, or property
without due process of law and that private property shall not be
taken for public use without just compensation.These limitations are
enshrined in no less than the Bill of Rights that guarantees the citizen
protection from abuse by the State. Consequently, our laws require
that the State's power of eminent domain shall be exercised through
expropriation proceedings in court. Whenever private property is taken
for public use, it becomes the ministerial duty of the concerned office
or agency to initiate expropriation proceedings. By necessary
implication, the filing of a complaint for expropriation is a waiver of
State immunity.If the DOTC had correctly followed the regular
procedure upon discovering that it had encroached on the
respondents' property, it would have initiated expropriation
proceedings instead of insisting on its immunity from suit. The
petitioners would not have had to resort to filing its complaint for
reconveyance.
The exercise of eminent domain requires a genuine necessity to take
the property for public use and the consequent payment of just
compensation. The property is evidently being used for a public
purpose. However, we also note that the respondent spouses willingly
entered into a lease agreement with Digitel for the use of the subject
properties.
If in the future, the factual circumstances should change and the
respondents refuse to continue the lease, then the DOTC may initiate
expropriation proceedings.
C. STATE IMMUNITY EE.M.DELACRUZ, DMD
G.R. No. L-29993 October 23, 1978
8.
LAUDENCIO TORIO, ET. AL. vs.
ROSALINA, ANGELINA, LEONARDO, EDUARDO, ARTEMIO,
ANGELITA, ANITA, ERNESTO, NORMA, VIRGINIA,
REMEDIOS and ROBERTO, all surnamed FONTANILLA, and
THE HONORABLE COURT OF APPEALS
FACTS:
The Municipal Council of Malasiqui, Pangasinan, passed a
resolution whereby "it resolved to manage the 1959 Malasiqui town
fiesta celebration. Another resolution was also passed creating the
"1959 Malasiqui 'Town Fiesta Executive Committee" which in turn
organized a sub-committee on entertainment and stage. The council
appropriated an amount for the construction of 2 stages, one for the
"zarzuela" and another for the cancionan Jose Macaraeg supervised
the construction of the stage. The "zarzuela" then began but before
the dramatic part of the play was reached, the stage collapsed and
Vicente Fontanilla who was at the rear of the stage was pinned
underneath. Fontanilia was taken to the hospital where he died in the
afternoon of the following day.
The heirs of Vicente Fontanilia filed a complaint against
Municipality. Answering the complaint defendant municipality invoked
inter alia the principal defense that as a legally and duly organized
public corporation it performs sovereign functions and the holding of a
town fiesta was an exercise of its governmental functions from which
no liability can arise to answer for the negligence of any of its agents.
ISSUE: WON the defendant Municipality was performing sovereign
functions therefore immune from suit.
HELD: NO.
Holding a fiesta even if the purpose is to commemorate a
religious or historical event of the town is in essence an act for the
special benefit of the community and not for the general welfare of the
public performed in pursuance of a policy of the state. The mere fact
that the celebration, as claimed was not to secure profit or gain but
merely to provide entertainment to the town inhabitants is not a
conclusive test. For instance, the maintenance of parks is not a source
of income for the nonetheless it is private undertaking as distinguished
from the maintenance of public schools, jails, and the like which are
for public service.
There can be no hard and fast rule for purposes of
determining the true nature of an undertaking or function of a
municipality; the surrounding circumstances of a particular case are to
be considered and will be decisive. The basic element, however
beneficial to the public the undertaking may be, is that it is
governmental in essence, otherwise. the function becomes private or
proprietary in character. Easily, no governmental or public policy of the
state is involved in the celebration of a town fiesta.
9. G.R. No. L-52179 April 8, 1991
MUNICIPALITY OF SAN FERNANDO, LA UNION vs.
HON. JUDGE ROMEO N. FIRME, ET. AL.
FACTS:
At about 7am of December 16, 1965, a collision occurred
involving a passenger jeepney driven by Bernardo Balagot (owned by
the Estate of Macario Nieveras), a gravel and sand truck driven by
Jose Manandeg (owned by Tanquilino Velasquez), and a dump truck of
the Municipality of San Fernando, La Union and driven by Alfredo
Bislig. Due to the impact, several passengers of the jeepney including
Laureano Bania Sr. died as a result of the injuries they sustained and
four others suffered varying degrees of physical injuries.
The private respondents instituted a complaint for damages
against the Estate of Macario Nieveras and Bernardo Balagot, owner
and driver, respectively, of the passenger jeepney. However, the
aforesaid defendants filed a Third Party Complaint against the
petitioner and the driver of a dump truck of petitioner.
Petitioner raised as one of its defenses the non-suability of the
State.
ISSUE: WON the Municipality of San Fernando is immune from suit.
HELD: YES.
C. STATE IMMUNITY EE.M.DELACRUZ, DMD
Anent the issue of whether or not the municipality is liable for
the torts committed by its employee, the test of liability of the
municipality depends on whether or not the driver, acting in behalf of
the municipality, is performing governmental or proprietary functions.
In the case at bar, the driver of the dump truck of the
municipality insists that "he was on his way to the Naguilian river to
get a load of sand and gravel for the repair of San Fernando's
municipal streets." We already stressed in the case of Palafox,
et. al. vs. Province of Ilocos Norte, the District Engineer, and the
Provincial Treasurer (102 Phil 1186) that "the construction or
maintenance of roads in which the truck and the driver worked at the
time of the accident are admittedly governmental activities."
We arrive at the conclusion that the municipality cannot be held liable
for the torts committed by its regular employee, who was then
engaged in the discharge of governmental functions. Hence, the death
of the passenger tragic and deplorable though it may be
imposed on the municipality no duty to pay monetary compensation.
A.M. No. RTJ-05-1959
10.
REPUBLIC OF THE PHILIPPINES vs. JUDGE VICENTE A.
HIDALGO, Presiding Judge of the Regional Trial Court of Manila,
Branch 37
FACTS:
Tarcila Laperal Mendoza filed an action for the annulment or
declaration of nullity of the title and deed of sale, reconveyance and/or
recovery of ownership and possession a property against the Republic
of the Philippinesin the RTC of Manila.
It is also known as the Arlegui Residence which housed two
Philippine presidents and which now holds the Office of the Press
Secretary and the News Information Bureau.
The case was initially dismissed by the presiding Judge of the
Manila RTC (Branch 35) on the ground of state immunity. The case
was re-raffled to the Manila RTC (Branch 37), with respondent Vicente
A. Hidalgo as presiding Judge. In an Order, Judge Hidalgo declared the
Republic in default for failure of Solicitor Gabriel Francisco Ramirez,
the handling solicitor, to file the required Answer within the period
prayed for in his motion for extension.
It is contended that the respondent Judge violated the
Constitution and the fundamental rule that government funds are
exempt from execution or garnishment when he caused the issuance
of the writ of execution against the Republic.
ISSUE: WON the Republic can invoke immunity from suit.
HELD:
It is settled that when the State gives its consent to be sued,
it does not thereby necessarily consent to an unrestrained execution
against it. Tersely put, when the State waives its immunity, all it
does, in effect, is to give the other party an opportunity to prove, if it
can, that the state has a liability.
The functions and public services rendered by the State
cannot be allowed to paralyzed or disrupted by the diversion of public
funds from their legitimate and specific objects, as appropriated by
law
11. G.R. Nos. 89898-99 October 1, 1990
MUNICIPALITY OF MAKATI vs.
THE HONORABLE COURT OF APPEALS, HON. SALVADOR P.
DE GUZMAN, JR., as Judge RTC of Makati, Branch CXLII
ADMIRAL FINANCE CREDITORS CONSORTIUM, INC., and
SHERIFF SILVINO R. PASTRANA
FACTS:
The present petition for review is an off-shoot of expropriation
proceedings initiated by petitioner Municipality of Makati against
private respondent Admiral Finance Creditors Consortium, Inc., Home
Building System & Realty Corporation and one Arceli P. Jo, involving a
parcel of land and improvements and registered in the name of the
latter.
It was certified that a bank account had been opened with the
PNB Buendia Branch under petitioner's name made pursuant to the
provisions of Pres. Decree No. 42. After due hearing where the parties
C. STATE IMMUNITY EE.M.DELACRUZ, DMD
presented their respective appraisal reports regarding the value of the
property, respondent RTC judge rendered a decision fixing the
appraised value of the property at P5,291,666.00, and ordering
petitioner to pay this amount minus the advanced payment which was
earlier released to private respondent.
Petitioner however refused to comply with the garnishment
despite its having two bank accounts in PNB. The first one was
dedicated for expropriation proceedings while the other was for public
funds. The first bank account cannot cover the remaining amount due,
while the other account had more than enough to satisfy the amount
due. Petitioner reasoned out that its funds at the PNB Buendia Branch
could neither be garnished nor levied upon execution, for to do so
would result in the disbursement of public funds without the proper
appropriation required under the law.
ISSUE: WON the Municipality of Makati is exempt from paying just
compensation.
HELD: NO.
For three years now, petitioner has enjoyed possession and
use of the subject property notwithstanding its inexcusable failure to
comply with its legal obligation to pay just compensation. Just
compensation means not only the correct determination of the amount
to be paid to the owner of the land but also the payment of the land
within a reasonable time from its taking. Without prompt payment,
compensation cannot be considered "just" for the property owner is
made to suffer the consequence of being immediately deprived of his
land while being made to wait for a long period.
The State's power of eminent domain should be exercised
within the bounds of fair play and justice. In the case at bar,
considering that valuable property has been taken, the compensation
to be paid fixed and the municipality is in full possession and utilizing
the property for public purpose, for three (3) years, the Court finds
that the municipality has had more than reasonable time to pay full
compensation.
12. UP v. Dizon (G.R. No. 171182; August 23, 2012)
FACTS: University of the Philippines (UP) entered into a General
Construction Agreement with respondent Stern Builders Corporation
(Stern Builders) for the construction and renovation of the buildings in
the campus of the UP in Los Bas. UP was able to pay its first and
second billing. However, the third billing worth P273,729.47was not paid
due to its disallowance by the Commission on Audit (COA). Thus, Stern
Builders sued the UP to collect the unpaid balance.
On November 28, 2001, the RTC rendered its decision ordering UP to
pay Stern Builders. Then on January 16, 2002, the UP filed its motion for
reconsideration. The RTC denied the motion. The denial of the said
motion was served upon Atty. Felimon Nolasco (Atty.Nolasco) of the
UPLB Legal Office on May 17, 2002. Notably, Atty.Nolascowas not the
counsel of record of the UP but the OLS inDiliman, Quezon City.
Thereafter, the UP filed a notice of appeal on June 3, 2002. However,
the RTC denied due course to the notice of appeal for having been filed
out of time. On October 4, 2002, upon motion of Stern Builders, the RTC
issued the writ of execution.
On appeal, both the CA and the High Court denied UPs petition. The
denial became final and executory. Hence, Stern Builders filed in the
RTC its motion for execution despite their previous motion having
already been granted and despite the writ of execution having already
issued. On June 11, 2003, the RTC granted another motion for execution
filed on May 9, 2003 (although the RTC had already issued the writ of
execution on October 4, 2002). Consequently, the sheriff served notices
of garnishment to the UPs depositary banks and the RTC ordered the
release of the funds.
Aggrieved, UP elevated the matter to the CA. The CA sustained the
RTC.Hence, this petition.
C. STATE IMMUNITY EE.M.DELACRUZ, DMD
ISSUES:
I. Was UP's funds validly garnished?
II.Has the UP's appeal dated June 3, 2002 been filed out of time?
HELD: UP's funds, being government funds, are not subject to
garnishment. (Garnishment of public funds; suability vs. liability of
the State)
Despite its establishment as a body corporate, the UP remains to be a
"chartered institution" performing a legitimate government function.
Irrefragably, the UP is a government instrumentality, performing the
States constitutional mandate of promoting quality and accessible
education. As a government instrumentality, the UP administers special
funds sourced from the fees and income enumerated under Act No.
1870 and Section 1 of Executive Order No. 714, and from the yearly
appropriations, to achieve the purposes laid down by Section 2 of Act
1870, as expanded in Republic Act No. 9500. All the funds going into the
possession of the UP, including any interest accruing from the deposit of
such funds in any banking institution, constitute a "special trust fund," the
disbursement of which should always be aligned with the UPs mission
and purpose, and should always be subject to auditing by the COA. The
funds of the UP are government funds that are public in character. They
include the income accruing from the use of real property ceded to the
UP that may be spent only for the attainment of its institutional
objectives.
A marked distinction exists between suability of the State and its
liability. As the Court succinctly stated in Municipality of San Fernando,
La Union v. Firme: A distinction should first be made between suability
and liability. "Suability depends on the consent of the state to be sued,
liability on the applicable law and the established facts. The
circumstance that a state is suable does not necessarily mean that it is
liable; on the other hand, it can never be held liable if it does not first
consent to be sued. Liability is not conceded by the mere fact that the
state has allowed itself to be sued. When the state does waive its
sovereign immunity, it is only giving the plaintiff the chance to prove, if it
can, that the defendant is liable.
The Constitution strictly mandated that "no money shall be paid out of
the Treasury except in pursuance of an appropriation made by law." The
execution of the monetary judgment against the UP was within the
primary jurisdiction of the COA. It was of no moment that a final
andexecutorydecision already validated the claim against the UP.
13.G.R. No. 206484, June 29, 2016
DEPARTMENT OF TRANSPORTATION AND COMMUNICATIONS (DOTC),
PETITIONER, VS. SPOUSES VICENTE ABECINA AND MARIA CLEOFE
ABECINA, RESPONDENTS.
14.[ G.R. No. 171953, October 21, 2015 ]
NATIONAL HOUSING AUTHORITY, PETITIONER, VS. ERNESTO
ROXAS, RESPONDENT.
DECISION
BERSAMIN, J.:
The National Housing Authority (NHA), a government-owned and -
controlled corporation created and existing under Presidential Decree
No. 757,[1]may sue and be sued. However, no court should issue a writ
of execution upon any monetary judgment rendered against the NHA
unless such monetary judgment is first submitted to and passed upon by
the Commission on Audit (COA).
The Case
C. STATE IMMUNITY EE.M.DELACRUZ, DMD
Being challenged on appeal by the NHA is the adverse decision
promulgated on February 20, 2006,[2] whereby the Court of Appeals
(CA) dismissed the NHA's petition for certiorari brought to nullify the
orders issued in Special Civil Action No. 93-060-MN entitled Ernesto
Roxas v. National Housing Authority, et al.by the Regional Trial Court
(RTC), Branch 72, in Malabon City. The first order, dated May 3, 2002,
had granted the motion for the issuance of the writ of execution filed by
respondent Ernesto Roxas.[3] The other order, dated January 6, 2003,
had denied the NHA's motion for reconsideration.[4]The NHA had also
thereby assailed the writ of execution consequently issued on February
24, 2003.[5]In its petition forcertiorari,the NHA insisted that the RTC
had thereby committed grave abuse of discretion amounting to lack or
excess of jurisdiction.
Antecedents
The NHA is charged, among others, with the development of the Dagat-
dagatan Development Project (project) situated in Navotas, Metro
Manila.[6] On December 4, 1985, Roxas applied for commercial lots in
the project, particularly Lot 9 and Lot 10 in Block 11, Area 3, Phase III A/
B, with an area of 176 square meters, for the use of his business of buying
and selling gravel, sand and cement products.[7]The NHA approved his
application, and issued on December 6, 1985 the order of payment
respecting the lots. On December 27, 1985, the NHA issued the notice of
award for the lots in favor of Roxas,[8] at P1,500.00/square meter.
[9]On the basis of the order of payment and the notice of award, Roxas
made his downpayment of P79,200.00.[10] A relocation/reblocking
survey resulted in the renumbering of Lot 9 to Lot 5 and Lot 10 to Lot 6
(subject lots).[11] He completed his payment for the subject lots on
December 20, 1991.
In the meanwhile, the NHA conducted a final subdivision project survey,
causing the increase in the area of the subject lots from 176 to 320
square meters. The NHA informed Roxas about the increase in the area
of the subject lots, and approved the award of the additional area of 144
square meters to him at P3,500.00/square meter.[12] Although
manifesting his interest in acquiring the additional area, he appealed for
the reduction of the price to Pl,500.00/square meter,[13] pointing out
that Lot 5 and Lot 6 were a substitution unilaterally imposed by the NHA
that resulted in the increase of 144 square meters based on the technical
description, and that although he desired to purchase the increased area,
the purchase must be in accordance with the terms and conditions
contained in the order of payment and notice of award issued to him.
After the NHA rejected his appeal,[14] he commenced in the RTC this
action for specific performance and damages, with prayer for the
issuance of a writ of preliminary injunction. He amended the
complaint[15] to compel the NHA to comply with the terms and
conditions of the order of payment and the notice of award.
The NHA countered in its answer[16]that Roxas' prayer to include in the
original contract the increase in lot measurement of 144 square meters
was contrary to its existing rules and regulation; that he could not claim
more than what had been originally awarded to him; and that at the very
least, his right in the additional area was limited only to first refusal.
On July 15, 1994, after trial, the RTC rendered judgment against the
NHA,[17]decreeing:
WHEREFORE, premises considered, judgment is hereby rendered in
favor of plaintiff Ernesto Roxas and against defendant NHA, represented
by its General Manager and its Dagat-dagatan Development Project
Manager, as follows:
1. Declaring plaintiff Ernesto Roxas the legal awardee of subject lots 5
and 6 in the full total area thereof of 320 sq. meters;
2. Ordering defendant NHA, thru its General Manager Robert P. Balao
and the project Manager for its Dagat-dagatan Development Project
Evelyn V. Ramos, or whoever shall be the incumbents of the positions at
the time of the enforcement hereof to execute the corresponding
Contract to Sell for the entire area of subject lots 5 and 6 totaling to 320
sq. meters at the cost of PI,500.00 per sq. meter under the same terms
and conditions as that provided for in the Order of Payment and Notice
of Award (Exhs. B and D), respectively, deducting whatever has already
been paid by plaintiff;
C. STATE IMMUNITY EE.M.DELACRUZ, DMD
3. Ordering defendant NHA to pay plaintiff P30,000.00 by way of
reasonable Attorney's Fees.
The Writ of Preliminary Injunction issued in this case on January 31,
1994 is hereby made permanent.
Costs against defendant NHA.
SO ORDERED.
The NHA appealed in due course, but the CA affirmed the judgment of
the RTC, prompting the NHA to seek to undo the adverse decision of the
CA through its petition for certiorari. On July 5, 2000, however, the
Court dismissed the petition for certiorari. It later denied the NHA's
motion for reconsideration.[18]
On July 27, 2001, Roxas filed his motion for the issuance of the writ of
execution,[19] which the RTC granted on May 3, 2002.[20] The NHA
sought reconsideration, but its motion was denied on January 6, 2003.
Accordingly, on February 24, 2003, the RTC issued the writ of execution
to enforce the final and executory decision of July 15, 1994.[21]
In order to prevent the execution, the NHA brought another petition
forcertiorariin the CA, docketed as C.A.-G.R. SP No. 76468, imputing
to the RTC grave abuse of discretion amounting to lack or excess of
jurisdiction for ordering the execution of the judgment.
On February 20, 2006, the CA dismissed the NFIA's petition
for certiorari through the presently assailed decision because it found
that the RTC did not gravely abuse its discretion amounting to lack or
excess of jurisdiction in granting Roxas' motion for the issuance of the
writ of execution and in issuing the writ of execution.[22] The CA
observed that the NHA was a government-owned and -controlled
corporation whose funds were not exempt from garnishment or
execution; and ruled that Roxas did not need to first file his claim in the
COA.
Issues
The NHA insists that the judgment of the RTC did not lie against it
because its submission to the litigation did not necessarily imply that the
Government had thereby given its consent to liability; and that the
money judgment awarded to Roxas could not be recovered by motion for
execution but should have been first filed in the COA.[23]
Roxas counters that the main relief under the final and executory
judgment of the RTC directed the NHA to execute the contract to sell the
subject lots at the rate of P1,500.00/square meter as provided for in the
order of payment and the notice of award. He claims that the award of
attorney's fees in his favor was only incidental to the main relief of
specific performance; and argues that the Government abandons its
sovereign capacity and is treated like any other corporations whenever it
enters into a commercial transaction.[24]
Ruling of the Court
The appeal is partly meritorious.
First of all, the mantle of the State's immunity from suit did not extend
to the NHA despite its being a government-owned and -controlled
corporation. Under Section 6(i) of Presidential Decree No. 757, which
was its charter, the NHA could sue and be sued. As such, the NHA was
not immune from the suit of Roxas.
And, secondly, for purposes of the implementation of the writ of
execution, it is necessary to distinguish between, on the one hand, the
main relief adjudicated in the judgment of July 15, 1994, which was the
decree of specific performance as to the right of Roxas to acquire the
subject lots at Pl,500.00/square meter as stated in the original
agreement between the parties, and, on the other, the secondary relief
for the attorney's fees of P30,000.00 to be paid by the NHA to Roxas.
Section 12 of Presidential Decree No. 757 has authorized the NHA to
"determine, establish and maintain the most feasible and effective
C. STATE IMMUNITY EE.M.DELACRUZ, DMD
program for the management or disposition of specific housing or
resettlement projects undertaken by [it]", and "[u]nless otherwise
decided by the Board, completed housing or resettlement projects shall
be managed and administered by [it]." The execution of the contract to
sell by the NHA conformably with the main relief under the judgment
would be in the ordinary course of themanagementordispositionof the
Dagat-dagatan Development Project undertaken by the NHA. In other
words, the NHA possessed the legal competence and authority to directly
afford the main relief without Roxas needing to first submit to the COA
the contract to sell for review and approval. To maintain otherwise is to
unconstitutionally grant to the COA the power of judicial review in
respect of the decision of a court of law.
However, settling or paying off the secondary relief for the attorney's fees
of 30,000.00, being a monetary obligation of the NHA, would not be in
the usual course of the activities of the NHA under its charter. That such
relief was the consequence of the suit that granted the main relief did not
matter. Pursuant to Section 26 of Presidential Decree No. 1445, Roxas
should first bring it to the COA prior to its enforcement against the NHA.
[25] Indeed, Section 26 specifically vested in the COA the power,
authority and duty to examine, audit and settle "all debts and claims of
any sort" due from or owing to the Government, or any of its
subdivisions, agencies, or instrumentalities, including government-
owned and controlled corporations with original charters,viz.:
Section 26. General jurisdiction. The authority and powers of the
Commission shall extend to and comprehend all matters relating to
auditing procedures, systems and controls, the keeping of the general
accounts of the Government, the preservation of vouchers pertaining
thereto for a period of ten years, the examination and inspection of the
books, records, and papers relating to those accounts; and the audit
andsettlement of the accounts of all persons respecting funds
or property received or held by them in an accountable
capacity, as well as the examination, audit, and settlement of
all debts and claims of any sort due from or owing to the
Government or any of its subdivisions, agencies and
instrumentalities. The said jurisdiction extends to all
government-owned or controlled corporations, including their
subsidiaries, and other self-governing boards, commissions,
or agencies of the Government, and as herein prescribed,
including nongovernmental entities subsidized by the
government, those funded by donations through the
government, those required to pay levies or government
share, and those for which the government has put up a
counterpart fund or those partly funded by the government,
(bold underscoring supplied for emphasis)
As the text of the legal provision plainly shows, the audit jurisdiction of
the COA extends to all government-owned or -controlled corporations,
their subsidiaries, and other self-governing boards, commissions, or
agencies of the Government, as well as to all non-governmental entities
subsidized by the Government, or funded by donations through the
Government, or required to pay levies or government share, or for which
the Government has put up a counterpart fund, or those partly funded by
the Government. There is no distinction as to the class of claims.Ubi lex
non distinguish nee nos distinguere debemos.[26] Indeed, a general
term or phrase should not be reduced into parts and one part
distinguished from the other so as to justify its exclusion from the
operation of the law. In other words, there should be no distinction in
the application of a statute where none is indicated. Corollary to this rule
is the principle that where the law does not make any exception, the
courts may not exempt something therefrom, unless there is compelling
reason to the contrary.[27]
There is no question that the NHA could sue or be sued, and thus could
be held liable under the judgment rendered against it. But the universal
rule remains to be that the State, although it gives its consent to be sued
either by general or special law, may limit the claimant's action only up
to the completion of proceedings anterior to the stage of execution. In
other words, the power of the court ends when the judgment is rendered
because government funds and property may not be seized pursuant to
writs of execution or writs of garnishment to satisfy such judgments. The
functions and public services of the State cannot be allowed to be
paralyzed or disrupted by the diversion of public fund from their
C. STATE IMMUNITY EE.M.DELACRUZ, DMD
legitimate and specific objects, and as appropriated by law. The rule is
based on obvious considerations of public policy. Indeed, the
disbursements of public funds must be covered by the corresponding
appropriation as required by law.[28]
WHEREFORE, the Court PARTLY GRANTS the petition for review
oncertiorari; andMODIFIESthe writ of execution dated February 24,
2003 by enjoining the respondent to file his claim for attorney's fees with
the Commission on Audit pursuant to Presidential Decree No. 1445.
SO ORDERED.
G.R. No. 174747, March 09, 2016
15.
REPUBLIC OF THE PHILIPPINES REPRESENTED BY
PRIVATIZATION AND MANAGEMENT
OFFICE, Petitioners, v. NATIONAL LABOR RELATIONS
COMMISSION (THIRD DIVISION) AND NACUSIP/
BISUDECO CHAPTER/GEORGE EMATA, DOMINGO
REBANCOS, NELSON BERINA, ROBERTO TIRAO,
AMADO VILLOTE, AND BIENVENIDO
FELINA, Respondents.
DECISION
LEONEN, J.:
Under Proclamation No. 50, Series of 1986, 1 no
employer-employee relationship is created by the
acquisition of Asset Privatization Trust (now Privatization
and Management Office) of government assets for
privatization. It is not obliged to pay for any money
claims arising from employer-employee relations except
when it voluntarily holds itself liable to pay. These money
claims, however, must be filed within the three-year
period under Article 2912 of the Labor Code. Once liability
is determined, a separate money claim must be brought
before the Commission on Audit, unless the funds to be
used have already been previously appropriated and
disbursed.
This resolves a Petition for Review on Certiorari3 assailing
the Decision4 dated February 27, 2004 and
Resolution5 dated September 19, 2006 of the Court of
Appeals. The Decision and Resolution affirmed the
National Labor Relations Commission Resolutions dated
May 10, 20026 and June 21, 20027 dismissing petitioner's
appeal for failure to file the appeal within the
reglementary period.
Asset Privatization Trust was a government entity created
under Proclamation No. 50 dated December 8, 1986 for
the purpose of conserving, provisionally managing, and
disposing of assets that have been identified for
privatization or disposition. NACUSIP/BISUDECO Chapter
is the exclusive bargaining agent for the rank-and-file
employees of Bicolandia Sugar Development Corporation,
a corporation engaged in milling and producing sugar.
8
Since the 1980s, Bicolandia Sugar Development
Corporation had been incurring heavy losses.9 It obtained
loans from Philippine Sugar Corporation and Philippine
National Bank, secured by its assets and properties.10
Under Proclamation No. 50, as amended, Administrative
Order No. 14 dated February 3, 1987, the Deed of
Transfer dated February 27, 1987, and the Trust
Agreement dated February 27, 1987,11 Philippine National
Bank ceded its rights and interests over Bicolandia Sugar
Development Corporation's loans to the government
through Asset Privatization Trust.12
Sometime in 1992, the Asset Privatization Trust, pursuant
to its mandate to dispose of government properties for
privatization, decided to sell the assets and properties of
Bicolandia Sugar Development Corporation. On
September 1, 1992, it issued a Notice of Termination to
C. STATE IMMUNITY EE.M.DELACRUZ, DMD
Bicolandia Sugar Development Corporation's employees,
advising them that their services would be terminated
within 30 days. NASUCIP/BISUDECO Chapter received
the Notice under protest.18
On January 14, 2000, the Labor Arbiter rendered the
Decision22 dismissing the Complaint for lack of merit. The
Labor Arbiter found that there was no union busting when
Asset Privatization Trust and Philippine Sugar Corporation
disposed of Bicolandia Sugar Development Corporation's
assets and properties since Asset Privatization Trust was
merely disposing of a non-performing asset of
government, pursuant to its mandate under Proclamation
No. 50.
ISSUE: First, whether there was an employer-employee
relationship between petitioner Privatization and
Management Office (then Asset Privatization Trust) and
private respondents NACUSIP/BISUDECO Chapter
employees, and thus, whether petitioner is liable to pay
the separation benefits of private respondents George
Emata, Bienvenido Felina, Domingo Rebancos, Jr., Nelson
Berina, Armando Villote, and Roberto Tirao;
HELD: Before proceeding to the substantive issues of the
case, petitioner's procedural misstep before the National
Labor Relations Commission must first be addressed.
It is settled that appeal is not a right but a mere
statutory privilege. It may only be exercised within the
manner provided by law.49 In labor cases, the perfection
of an appeal is governed by the Labor Code. Article 223
provides:
chanRoblesvirtualLawlibrary
Art. 223. Appeal. Decisions, awards, or orders of the
Labor Arbiter are final and executory unless appealed to
the Commission by any or both parties within ten (10)
calendar days from receipt of such decisions, awards, or
orders. Such appeal may be entertained only on any of
the following grounds:
....
Petitioner received a copy of the Labor Arbiter's Decision
on January 26, 2000.50 It had 10 days, or until February
7, 2000,51 to file its appeal. However, it filed its
Memorandum of Appeal only on February 8,
2000.52 Petitioner did not explain the reason for its delay.
Petitioner's disregard of procedural rules resulted in the
denial of its appeal before the National Labor Relations
Commission and its subsequent Petition for Certiorari
before the Court of Appeals. In its Petition for Review
before this Court, petitioner still did not explain its delay
in filing the Memorandum of Appeal. It merely insisted
that its case should have been resolved on the merits.
Procedural rules are designed to facilitate the orderly
administration of justice.53 In labor cases, however,
procedural rules are not to be applied "in a very rigid and
technical sense"54 if its strict application will frustrate,
rather than promote, substantial justice.55
Liberality favors the laborer.56 However, this case is also
brought against a government entity. If the government
entity is found liable, its liability will necessarily entail the
dispensation of public funds. Thus, its basis for liability
must be subjected to strict scrutiny.
Even assuming that we grant the plea of liberality, the
Petition will still be denied.
C. STATE IMMUNITY EE.M.DELACRUZ, DMD
G.R. No. 77765 August 15, 1988
16.
SEBASTIAN COSCULLUELA vs.
THE HONORABLE COURT OF APPEALS and the REPUBLIC
OF THE PHILIPPINES, represented by NATIONAL
IRRIGATION ADMINISTRATION
FACTS:
The Republic of the Philippines filed a complaint with the Court
of First Instance of Iloilo to expropriate two parcels of land in the
municipality of Barotac, Iloilo owned by petitioner Sebastian
Cosculluela and one Mita Lumampao, for the construction of the canal
network of the Barotac Irrigation Project.
The trial court rendered a decision granting the expropriation
and ordered the public respondent to pay Lumampao, the sum of
P20,000 and Cosculluela, the sum of P200,000.00.
The Republic contends that the funds of the National Irrigation
Authority (NIA) are government funds and therefore, cannot be
disbursed without a government appropriation.
ISSUE: WON the Republic is exempt from paying the just
compensation demanded by the petitioner in view of non-
disbursement of funds without prior public appropriation.
HELD: NO.
One of the basic principles enshrined in our Constitution is
that no person shall be deprived of his private property without due
process of law; and in expropriation cases, an essential element of
due process is that there must be just compensation whenever private
property is taken for public use.
Just compensation means not only the correct determination
of the amount to be paid to the owner of the land but also the
payment of the land within a reasonable time from its taking.
G.R. No. 101949 December 1, 1994
17.
THE HOLY SEE vs.
THE HON. ERIBERTO U. ROSARIO, JR., as Presiding Judge of
the Regional Trial Court of Makati, Branch 61 and STARBRIGHT
SALES ENTERPRISES, INC.
FACTS:
This petition arose from a controversy over a parcel of land,
Lot 5-A, located in the Municipality of Paraaque, Metro Manila and
registered in the name of petitioner. Said Lot 5-A is contiguous to Lots
5-B and 5-D registered in the name of the Philippine Realty
Corporation (PRC). The three lots were sold to Ramon Licup, through
Msgr. Domingo A. Cirilos, Jr., acting as agent to the sellers. Later,
Licup assigned his rights to the sale to private respondent, Starbright
Enterprises.
The squatters refused to vacate the lots sold to private
respondent so a dispute arose as to who of the parties has the
responsibility of evicting and clearing the land of squatters occurred.
Complicating the relations of the parties was the sale by petitioner of
Lot 5-A to Tropicana Properties and Development Corporation
(Tropicana).
Private respondent filed a complaint for annulment of the sale
of the three parcels of land, and specific performance and damages
against petitioner, represented by the Papal Nuncio, and three other
defendants: namely, Msgr. Domingo A. Cirilos, Jr., the PRC and
Tropicana.
ISSUE: WON the petitioner Holy See is immune from suit.
HELD: YES.
The logical question is whether the foreign state is engaged in
the activity in the regular course of business. If the foreign state is not
engaged regularly in a business or trade, the particular act or
transaction must then be tested by its nature. If the act is in pursuit of
a sovereign activity, or an incident thereof, then it is an act jure
imperii, especially when it is not undertaken for gain or profit.
C. STATE IMMUNITY EE.M.DELACRUZ, DMD
Lot 5-A was acquired by petitioner as a donation from the
Archdiocese of Manila. The donation was made not for commercial
purpose, but for the use of petitioner to construct thereon the official
place of residence of the Papal Nuncio. The right of a foreign sovereign
to acquire property, real or personal, in a receiving state, necessary
for the creation and maintenance of its diplomatic mission, is
recognized in the 1961 Vienna Convention on Diplomatic Relations.
In Article 31(a) of the Convention, a diplomatic envoy is
granted immunity from the civil and administrative jurisdiction of the
receiving state over any real action relating to private immovable
property situated in the territory of the receiving state which the
envoy holds on behalf of the sending state for the purposes of the
mission. If this immunity is provided for a diplomatic envoy, with all
the more reason should immunity be recognized as regards the
sovereign itself, which in this case is the Holy See.
18. G.R. No. 142396.February 11, 2003
KHOSROW MINUCHER vs.HON. COURT OF APPEALS and
ARTHUR SCALZO
FACTS:
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. 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.
ISSUE: WON respondent Scalzo can invoke immunity from suit.
HELD: YES.
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
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.
The job description of Scalzo has tasked him to conduct
surveillance on suspected drug suppliers and, after having ascertained
the target, to inform local law enforcers who would then be expected
to make the arrest. In conducting surveillance activities on Minucher,
later acting as the poseur-buyer during the buy-bust operation, and
then becoming a principal witness in the criminal case against
Minucher, Scalzo hardly can be said to have acted beyond the scope of
his official function or duties.
All told, 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.
19. Arigo vs Swift
Case Digest GR 206510 Sept 14, 2014
Facts:
In 2013, the USS Guardian of the US Navy ran aground on an area near
the Tubbataha Reefs, a marine habitat of which entry and certain human
activities are prevented and aorded protection by a Philippine law. The
grounding incident prompted the petitioners to seek for issuance of Writ
of Kalikasan with TEPO from the SC.
C. STATE IMMUNITY EE.M.DELACRUZ, DMD

Among those impleaded are US ocials in their capacity as correlation with the principle of States as sovereign equals par in
commanding ocers of the US Navy. As petitioners argued, they were parem non habet non imperium bars the exercise of jurisdiction by
impleaded because there was a waiver of immunity from suit between the court over their persons.

US and PH pursuant to the VFA terms.

Issue 2:W/N the US government may still be held liable for damages
Petitioners claimed that the grounding, salvaging and post-salvaging caused to the Tubbataha Reefs

operations of the USS Guardian violated their constitutional rights to a

balanced and healthful ecology since these events caused and continue Yes.The US government is liable for damages in relation to the
to cause environmental damage of such magnitude as to aect other grounding incident under the customary laws of navigation.

provinces surrounding the Tubbataha Reefs. Aside from damages, they

sought a directive from the SC for the institution of civil, administrative
The conduct of the US in this case, when its warship entered a
and criminal suits for acts committed in violation of environmental laws restricted area in violation of RA 10067 and caused damage to the
and regulations in connection with the grounding incident. They also TRNP reef system, brings the matter within the ambit of Article 31 of the
prayed for the annulment of some VFA provisions for being
UNCLOS. While historically, warships enjoy sovereign immunity from
unconstitutional.
suit as extensions of their flag State, Art. 31 of the UNCLOS creates an
exception to this rule in cases where they fail to comply with the rules
Issue 1:W/Nthe US Government has given its consent to be sued and regulations of the coastal State regarding passage through the
through the VFA
latters internal waters and the territorial sea.

No.The general rule on states immunity from suit applies in this case.

Although the US to date has not ratified the UNCLOS, as a matter of

long-standing policy, theUS considers itself bound by customary
First, any waiver of State immunity under the VFA pertains only international rules on the traditional uses of the oceans, which is
tocriminaljurisdictionand not to special civil actions such as for the codified in UNCLOS.

issuance of the writ of kalikasan. Hence, contrary to petitioners claim,

the US government could not be deemed to have waived its immunity
As to the non-ratification by the US, it must be noted that the US
from suit.
refusal to join the UNCLOS was centered on its disagreement with
UNCLOS regime of deep seabed mining (Part XI) which considers the
Second,the US respondents were sued in their ocial capacity as oceans and deep seabed commonly owned by mankind. Such has
commanding ocers of the US Navy who have control and supervision nothing to do with the acceptance by the US of customary international
over the USS Guardian and its crew. Since the satisfaction of any rules on navigation. (Justice Carpio)

judgment against these ocials would require remedial actions and the
appropriation of funds by the US government, the suit is deemed to be
Hence, non-membership in the UNCLOS does not mean that the US
one against the US itself. Thus, the principle of State Immunity in will disregard the rights of the Philippines as a Coastal State over its
C. STATE IMMUNITY EE.M.DELACRUZ, DMD

internal waters and territorial sea. It is thus expected of the US to bear and binding agreement, the parties are required as a matter of
international responsibility under Art. 31 in connection with the USS international law to abide by its terms and provisions.A petition under
Guardian grounding which adversely aected the Tubbataha reefs. ##
theRules on Writ of Kalikasanis not the proper remedy to assail the
constitutionality of its provisions.

Other Issues

Claim for Damages Caused by Violation of Environmental Laws Must be

Filed Separately
20. G.R. No. 125865. January 28, 200
JEFFREY LIANG (HUEFENG) vs. PEOPLE OF THE
The invocation of US federal tort laws and even common law is PHILIPPINES
improper considering that it is the VFA which governs disputes involving
FACTS:
US military ships and crew navigating Philippine waters in pursuance of
Petitioner is an economist working with the Asian Development
the objectives of the agreement.
Bank (ADB). Sometime in 1994, for allegedly uttering defamatory
words against fellow ADB worker Joyce Cabal, he was charged before
the Metropolitan Trial Court (MeTC) of Mandaluyong City with two
As it is, the waiver of State immunity under the VFA pertains only
counts of grave oral defamation.
tocriminal jurisdictionand not to special civil actions. Since jurisdiction
Petitioner was arrested by virtue of a warrant issued by the
cannot be had over the respondents for being immuned from suit, there MeTC. After fixing petitioners bail, the MeTC released him to the
is no way damages which resulted from violation of environmental laws custody of the Security Officer of ADB. The next day, the MeTC judge
could be awarded to petitioners.
received an "office of protocol" from the DFA stating that petitioner is
covered by immunity from legal process under Section 45 of the
Agreement between the ADB and the Philippine Government regarding
In any case, theRules onWrit of Kalikasanprovides that a criminal case the Headquarters of the ADB (hereinafter Agreement) in the country.
against a person charged with a violation of an environmental law is to Based on the said protocol communication that petitioner is immune
be filed separately. Hence, a ruling on the application or non-application from suit, the MeTC judge without notice to the prosecution dismissed
of criminal jurisdiction provisions of the VFA to a US personnel who may the two criminal cases.
be found responsible for the grounding of the USS Guardian, would be
premature and beyond the province of a petition for a writ of Kalikasan.
ISSUE: WON petitioner Liang is immune from suit.

Challenging the Constitutionality of a Treaty Via a Petition for the
Issuance of Writ of Kalikasan is Not Proper
immunity agreement because our laws do not allow the commission of
The VFA was duly concurred in by the Philippine Senate and has been
recognized as a treaty by the US as attested and certified by the duly
authorized representative of the US government. The VFA being a valid
HELD: NO.
Slandering a person could not possibly be covered by the
a crime, such as defamation, in the name of official duty. It is well-
settled principle of law that a public official may be liable in his
personal private capacity for whatever damage he may have caused
by his act done with malice or in bad faith or beyond the scope of his
authority or jurisdiction.
C. STATE IMMUNITY EE.M.DELACRUZ, DMD

respect to acts performed by them in their official capacity, except when the
SEPARATE CONCURRING OPINION OF JUSTICE PUNO: Bank waives immunity. In other words, officials and employees of the ADB
are subject to the jurisdiction of the local courts for their private acts,
The Charter of the ADB provides under Article 55(i) that officers and notwithstanding the absence of a waiver of immunity.
employees of the bank shall be immune from legal process with respect to
acts performed by them in their official capacity except when the Bank waives Considering that bank officials and employees are covered by immunity only
immunity. Section 45 (a) of the ADB Headquarters Agreement accords the for their official acts, the necessary inference is that the authority of the
same immunity to the officers and staff of the bank. There can be no dispute Department of Affairs, or even of the ADB for that matter, to certify that
that international officials are entitled to immunity only with respect to they are entitled to immunity is limited only to acts done in their official
acts performed in their official capacity, unlike international capacity. Stated otherwise, it is not within the power of the DFA, as the
organizations which enjoy absolute immunity agency in charge of the executive departments foreign relations, nor the ADB,
as the international organization vested with the right to waive immunity, to
Clearly, the most important immunity to an international official, in the invoke immunity for private acts of bank official and employees, since no such
discharge of his international functions, is immunity from local prerogative exists in the first place. If the immunity does not exist, there is
jurisdiction. There is no argument in doctrine or practice with the principle that nothing to certify.
an international official is independent of the jurisdiction of the local authorities
for his official acts. Those acts are not his, but are imputed to the
organization, and without waiver the local courts cannot hold him liable for
them. In strict law, it would seem that even the organization itself could
have no right to waive an officials immunity for his official acts. This
permits local authorities to assume jurisdiction over and individual for
an act which is not, in the wider sense of the term, his act at all. It is the
organization itself, as a juristic person, which should waive its own
immunity and appear in court, not the individual, except insofar as he
appears in the name of the organization.

Historically, international officials were granted diplomatic privileges and

immunities and were thus considered immune for both private and official
acts. In practice, this wide grant of diplomatic prerogatives was curtailed
because of practical necessity and because the proper functioning of the
organization did not require such extensive immunity for its officials. Thus,
the current status of the law does not maintain that states grant
jurisdictional immunity to international officials for acts of their private
lives.

Under the Vienna Convention on Diplomatic Relations, a diplomatic envoy is

immune from criminal jurisdiction of the receiving State for all acts, whether
private or official, and hence he cannot be arrested, prosecuted and punished
for any offense he may commit, unless his diplomatic immunity is waived.[ On
the other hand, officials of international organizations enjoy functional
immunities, that is, only those necessary for the exercise of the
functions of the organization and the fulfillment of its purposes. This is
the reason why the ADB Charter and Headquarters Agreement explicitly
grant immunity from legal process to bank officers and employees only with