State Immunity Chap 3-7-19-16

SAN BEDA COLLEGE OF LAW 2017
MENDIOLA, MANILA
THE DOCTRINE OF STATE

IMMUNITY IS STATE IMMUNITY CONSTITUTIIONAL IN
ORIGIN?
No. Because according to Justice

-
WHAT IS STATE IMMUNITY? Holmes “ there can be no legal right
against the authority which makes
Basis: the law on which the right
Legal ---- Justice Holmes-( grounded on depends”.
sovereignty WHAT IS YOUR CONSTITUTIONAL BASIS?
Sociological --- State’s time (Providence case)
- Section 3, Article XVI of the 1987
Constitution- affirmation
Philippine Constitution.
-
C. State Immunity from Suit. “The State WHAT IS YOUR SOCIOLOGICAL BASIS?
cannot be sued without its consent” [Sec. 3,
Art. XVI]. - The propensity of the people to
litigate; waste of time, money, and
1. Basis: There can be no legal right against resources.
the authority which makes the law on
which the right depends [Republic v.
Villasor, 54 SCRA 83], However, it may be
sued if it gives consent, whether express
or implied. The doctrine is also known as SANDERS VS VERIDANIO II
the Royal Prerogative of Dishonesty.
162 SCRA 88 (June 10, 1988) GR –L46930
2. Immunity is enjoyed by other States,
CASE DOCTRINE: ACTS COMMITTED BY
consonant with the public international law
THE OFFICERS IN THEIR OFFICIAL
principle of par in parem non habet imperium.
CAPACITY ARE COVERED BY STATE
The Head of State, who is deemed the
IMMUNITY. - It is stressed at the outset that
personification of the State, is inviolable, and
the mere allegation that a government
thus, enjoys immunity from suit.
functionary is being sued in his personal
capacity will not automatically remove him
a) The State’s diplomatic agents, including
from the protection of the law of public
consuls to a certain extent, are also exempt
officers and, if appropriate, the doctrine of
from the jurisdiction of local courts and
state immunity. By the same token, the mere
administrative tribunals. [See PUBLIC
invocation of official character will not suffice
INTERNATIONAL LAW, infra.].
to insulate him from suability and liability for
an act imputed to him as a personal tort
committed without or in excess of his
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authority. These well-settled principles are the re- designation of the private respondents.
applicable not only to the officers of the local There was nothing personal or private about
state but also where the person sued in its it.
courts pertains to the government of a foreign
state, as in the present case. Given the official character of the above-
described letters, we have to conclude that
It is abundantly clear in the present case that the petitioners were, legally speaking, being
the acts for which the petitioners are being sued as officers of the United States
called to account were performed by them in government. As they have acted on behalf of
the discharge of their official duties. Sanders, that government, and within the scope of
as director of the special services department their authority, it is that government, and not
of NAVSTA, undoubtedly had supervision the petitioners personally, that is responsible
over its personnel, including the private for their acts. Assuming that the trial can
respondents, and had a hand in their proceed and it is proved that the claimants
employment, work assignments, discipline, have a right to the payment of damages, such
dismissal and other related matters. It is not award will have to be satisfied not by the
disputed that the letter written was in fact a petitioners in their personal capacities but by
reply to a request from his superior, the other the United States government as their
petitioner, for more information regarding principal. This will require that government
the case of the private respondents. Moreover, to perform an affirmative act to satisfy the
even in the absence of such request, he still judgment, viz., the appropriation of the
was within his rights in reacting to the necessary amount to cover the damages
hearing officer's criticism — in effect a direct awarded, thus making the action a suit
attack against him — that Special Services against that government without its consent.
was practicing "an autocratic form of
supervision." THE DOCTRINE OF STATE IMMUNITY
APPLIES TO FOREIGN STATES SUED IN
As for Moreau, what he is claimed to have THIS JURISDICTION. - There should be no
done was write the Chief of Naval Personnel question by now that such complaint cannot
for concurrence with the conversion of the prosper unless the government sought to be
private respondents' type of employment held ultimately liable has given its consent to
even before the grievance proceedings had be sued. So we have ruled not only in Baer but
even commenced. Disregarding for the nonce in many other decisions where we upheld the
the question of its timeliness, this act is doctrine of state immunity as applicable not
clearly official in nature, performed by only to our own government but also to
Moreau as the immediate superior of Sanders foreign states sought to be subjected to the
and directly answerable to Naval Personnel in jurisdiction of our courts.
matters involving the special services
department of NAVSTA. In fact, the letter The practical justification for the doctrine, as
dealt with the financial and budgetary Holmes put it, is that "there can be no legal
problems of the department and contained right against the authority which makes the
recommendations for their solution, including law on which the right depends." In the case

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of foreign states, the rule is derived from the Private Respondent’s status and requested
principle of the sovereign equality of states concurrence therewith.
which wisely admonishes that par in parem
non habet imperium and that a contrary Private respondents filed suit for damages
attitude would "unduly vex the peace of claiming that the letter contained libelous
nations." Our adherence to this precept is imputations, that had exposed them to
formally expressed in Article II, Section 2, of ridicule and ad caused them mental anguish,
our Constitution, where we reiterate from our and prejudgment of the grievance
previous charters that the Philippines "adopts proceedings was an invasion of their personal
the generally accepted principles of and proprietary rights. They make it clear
international law as part of the law of the land. that petitioners were being sued in their
personal capacity. A motion to dismiss on
par in parem non habet imperium (meaning, the ground of lack of jurisdiction was filed by
an equal has no authority over an equal) the petitioner and was denied.
SANDERS VS VERIDIANO II ISSUE:
FACTS: Whether or not the petitioners are

performing their official duties when they did
Private Respondents Anthony Rose and Ralph the acts for which they are being sued for
Wyers (deceased) were both employed as damages.
game room attendants in the special services
department of the US Naval Station (NAVSTA).
They were advised that their employment RULING:
have been converted from permanent full-
time to permanent part-time. Their reaction YES. It is clear in the present case that the acts
was to protect the conversion and to institute for which the petitioners are being called to
grievance proceedings. The hearing officer account were performed by them in the
recommended the reinstatement of private discharge of their official duties. Sanders, as
respondents to permanent full time status the Director of the Special Services
plus back wages. Department of NAVSTA, undoubtedly had
supervision over its personnel including
In a letter addressed to petitioner Moreau, private respondents and had a hand in their
Commanding Officer of the Subic Naval Base, employment, work, assignment, discipline,
Petitioner Sanders, Special Services Director dismissal and other related matters. The act
of NAVSTA, disagreed with the of Moreau is deadly official in nature,
recommendation and asked for its rejection. performed by him as the immediate superior
Moreau, even before the start of the grievance of Sanders and directly answerable to Naval
hearings, sent a letter to the chief of Naval Personnel in matters involving special
Personnel explaining the change of the department of NAVSTA.

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The case of Sanders vs Veridiano is the - ce of official duties [Republic v.

exception to the general rule: Sandiganbayan, G.R. No. 142476,
March 20, 2001]. Likewise, in U.S. v.
Exception to the General Rule Reyes, 219 SCRA 192, petitioner
1. To enforce an act required by law Bradford, Activity Exchange Manager
2. To restrain act claimed to be at JUSMAG Headquarters, was held
unconstitutional personally liable, inasmuch as the
3. To compel payment of damages from an search of respondent Montoya at the
already appropriated fund JUSMAG parking lot (which subjected
4. To secure judgment where officer may respondent to embarrassment) was
satisfy liability without state doing positive held to be beyond the scope and even
act beyond the Manager’s official
5. When government violates own laws functions.
because state immunity cannot be used to
perpetrate an injustice
- Similarly, in Republic v. Hon. Edilberto
Sandoval, 220 SCRA 124, even as the
- The unauthorized acts of government Supreme Court dismissed the suit
officials are not acts of state; thus, the against the Republic of the Philippines,
public officer may be sued and held the action for damages against the
personally liable in damages for such military personnel and the policemen
acts [Shauf v. Court of Appeals, 191 responsible for the 1989 Mendiola
SCRA 713], massacre was upheld, inasmuch as
the initial findings of the Davide
- Where a public officer has committed Commission (tasked by President
an ultra vires act, or where there is a Aquino to investigate the incident)
showing of bad faith, malice or gross showed that there was, at least,
negligence, the officer can be held negligence on their part when they
personally accountable, even if such fired their guns.
acts are claimed to have been
performed in connection withofficial
duties [Wylie v. Rarang, 209 SCRA 357]. - Where the public official is sued in his
personal capacity, the doctrine of
state immunity will not apply, even if
- Thus, the PCGG or any of its members, the acts complained of were
may be held civilly liable (for the sale committed while the public official
of an aircraft to Fuller Aircraft, which was occupying a'public position. In
was void) if they did not act with good Lansang v. Court of Appeals, G.R. No.
faith and within the scope of their 102667, February 23, 2000, the
authority in the performan petitioner was sued for allegedly

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“personal motives” in ordering the government officer but the case   is

ejectment of the General Assembly of such that ultimate liability will belong
the Blind, Inc. (GABI) from the Rizal not to the officer but to the
Park; thus, the case was not deemed a government.  
suit against the State.
While the Republic in this case is sued by
name, the ultimate liability does not pertain
to the government. Although the military
officers and personnel, then party defendants,
were discharging their official functions when
REPUBLIC VS. SANDOVAL the incident occurred, their functions ceased
GR 84607 March 19, 1993 to be official the moment they exceeded their
authority. Based on the Commission findings,
CASE DOCTRINE: CONCEPT OF STATE there was lack of justification by the
IMMUNITY. - Under our Constitution the government forces in the use of firearms.
principle of immunity of the government from Moreover, the members of the police and
suit is expressly provided in Article XVI, military crowd dispersal units committed a
Section 3. The principle is based on the very prohibited act under B.P. Blg. 880 as there
essence of sovereignty, and on the practical was unnecessary firing by them in dispersing
ground that there can be no legal right as the marchers.
against the authority that makes the law on
which the right depends. It also rests on While it is true that nothing is better settled
reasons of public policy — that public service than the general rule that a sovereign state
would be hindered, and the public and its political subdivisions cannot be sued
endangered, if the sovereign authority could in the courts except when it has given its
be subjected to law suits at the instance of consent, it cannot be invoked by both the
every citizen and consequently controlled in military officers to release them from any
the uses and dispositions of the means liability, and by the heirs and victims to
required for the proper administration of the demand indemnification from the
government. government. The principle of state immunity
from suit does not apply, as in this case, when
INSTANCES OF SUITS AGAINST THE STATE. the relief demanded by the suit requires no
- Some instances when a suit against the State affirmative official action on the part of the
is proper are: State nor the affirmative discharge of any
obligation which belongs to the State in its
1. (1) When the Republic is sued by name;   political capacity, even though the officers or
agents who are made defendants claim to
2. (2) When the suit is against an hold or act only by virtue of a title of the state
unincorporated government agency; and as its agents and servants. This Court has
  made it quite clear that even a "high position
in the government does not confer a license to
3. (3) When the suit is on its face against a persecute or recklessly injure another."

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THE STATE IMMUNITY IS NOT WAIVED REPUBLIC VS SANDOVAL

ONLY FOR THE REASON THAT THE
PRESIDENT CREATED A COMMISSION TO FACTS:
INVESTIGATE THE INCIDENT, OR BY THE
By reason of the Mendiola Massacre, wherein
PRESIDENT’S ACT OF JOINING A RALLY OF
twelve (12) rallyists died in their quest for
THE COMPLAINANTS. In effect, whatever
their “genuine agrarian reform”, President
may be the findings of the Commission, the
Aquino issued Administrative Order No. 11
same shall only serve as the cause of action in
which created the Citizen’s Mendiola
the event that any party decides to litigate
Commission for the purpose of conducting an
his/her claim. Therefore, the Commission is
investigation for the disorders, death, and
merely a preliminary venue. The Commission
casualties that took place.
is not the end in itself. Whatever
recommendation it makes cannot in any way The most significant recommendation of the
bind the State immediately, such commission was for the deceased and other
recommendation not having become final and victims of Mendiola Incident to be
executory. This is precisely the essence of it compensated by the Government.
being a fact-finding body.
Due to the recommendation, petitioners filed
Secondly, whatever acts or utterances that a formal letter of demand for compensation
then President Aquino may have done or said, from the government to which the latter did
the same are not tantamount to the State not take heed. The group then instituted an
having waived its immunity from suit. The action for damages against the Republic of the
President's act of joining the marchers, days Philippines together with military officers
after the incident, does not mean that there and personnel involved in Mendiola Incident.
was an admission by the State of any liability.
In fact to borrow the words of petitioners Respondent Judge Sandoval dismissed the
(Caylao group), "it was an act of solidarity by complaint as against the Republic of the
the government with the people". Moreover, Philippines on the basis that there was no
petitioners rely on President Aquino's speech waiver by the state. Hence, the petition for
promising that the government would Certiorari.
address the grievances of the rallyists. By this
alone, it cannot be inferred that the State has
admitted any liability, much less can it be
ISSUE:
inferred that it has consented to the suit.
Whether or not the state by virtue of the
Although consent to be sued may be given Administrative Order waived its immunity
impliedly, still it cannot be maintained that from suit.
such consent was given considering the
circumstances obtaining in the instant case.

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FESTEJO VS FERNANDO
RULING: GR L-5156 March 11, 1954
No. Firstly, the recommendation made by the CASE DOCTRINE: ACTS COMMITTED BY
commission does not in any way mean that OFFICIALS OUTSIDE THEIR AUTHORITY
liability automatically attaches to the state. In WILL NOT GIVE RISE TO THE CONCEPT OF
effect, the same shall only serve as a cause of STATE IMMUNITY. Ordinarily the officer or
action in the event that any party decides to employee committing the tort is personally
litigate his or her claim. The commission is liable therefor, and may be sued as any other
merely a preliminary venue. citizen and held answerable for whatever
injury or damage results from his tortious
Secondly, whatever acts or utterances that act." — 49 Am. Jur. 289. . . If an officer, even
then President Aquino may have said or done, while acting under color of his office, exceeds
the same are not tantamount to the state the power conferred on him by law, he cannot
having waived its immunity from suit. shelter himself under the plea that he is a
public agent." — 43 Am. Jur. 86.
The principle of State Immunity from suit
does not apply in this case, as when the relief It is a general rule that an officer-executive,
demanded by the suit requires no affirmative administrative quasi-judicial, ministerial, or
official action on the part of the state in its otherwise who acts outside the scope of his
political capacity, even though the officers or jurisdiction and without authorization of law
agents who are made defendants claim to may thereby render himself amenable to
hold or act only by virtue of a title of the state personal liability in a civil suit. If he exceeds
as its agents and servants. the power conferred on him by law, he cannot
shelter himself by the plea that he is a public
agent acting under color of his office, and not
WHAT ARE THE INSTANCES OF SUIT personally. In the eye of the law, his acts then
AGAINST THE STATE? are wholly without authority." — 43 Am. Jur.
89-90.
1. When Republic is sued in its name
2. When suit is against an unincorporated
government agency
3. When suit is on its face against a FESTEJO VS FERNANDO
government officer but ultimate liability will
fall on the State FACTS:
Plaintiff Carmen Festejo filed an action

IS THIS CONLUSIVE? against defendant Isaias Fernando, Director
No. of Bureau of Public Works for unlawfully
taking possession of portion of her three
parcels of land and causing the construction

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of irrigation canal without obtaining right of intended to manifest our resolve to abide by
way and without her consent or knowledge. the rules of the international community.
The lower court ruled in favor of plaintiff Even without such affirmation, we would still
Festejo. On appeal, defendant Fernando be bound by the generally accepted principles
invoked his being a public officer of the of international law under the doctrine of
government of the Philippines and thus, incorporation. Under this doctrine, as
enjoys immunity from suit and should be accepted by the majority of states, such
absolved from liability for damages. principles are deemed incorporated in the
law of every civilized state as a condition and
consequence of its membership in the society
ISSUE: of nations. Upon its admission to such society,
the state is automatically obligated to comply
Whether or not defendant Fernando may with these principles in its relations with
invoke immunity from suit. other states.
As applied to the local state, the doctrine of

state immunity is based on the justification
RULING: given by Justice Holmes that "there can be no
legal right against the authority which makes
No. Ordinarily, the officer or employee
the law on which the right depends." There
committing the tort is personally liable and are other practical reasons for the
may be sued as any other citizen and be held
enforcement of the doctrine. In the case of the
answerable for whatever injury. foreign state sought to be impleaded in the
local jurisdiction, the added inhibition is
expressed in the maxim par in parem, non
habet imperium. All states are sovereign
equals and cannot assert jurisdiction over one
UNITED STATES OF AMERICA VS GUINTO another. A contrary disposition would, in the
language of a celebrated case, "unduly vex the
GR 76607 February 26, 1990 peace of nations."
CASE DOCTRINE: CONCEPT OF STATE
While the doctrine appears to prohibit only
IMMUNITY. - The rule that a state may not be
suits against the state without its consent, it is
sued without its consent, now expressed in
also applicable to complaints filed against
Article XVI, Section 3, of the 1987
officials of the state for acts allegedly
Constitution, is one of the generally accepted
performed by them in the discharge of their
principles of international law that we have
duties. The rule is that if the judgment against
adopted as part of the law of our land under
such officials will require the state itself to
Article II, Section 2. This latter provision
perform an affirmative act to satisfy the same,
merely reiterates a policy earlier embodied in
such as the appropriation of the amount
the 1935 and 1973 Constitutions and also
needed to pay the damages awarded against

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them, the suit must be regarded as against the implied when the government files a
state itself although it has not been formally complaint, thus opening itself to a
impleaded. In such a situation, the state may counterclaim.
move to dismiss the complaint on the ground
that it has been filed without its consent. The above rules are subject to qualification.
Express consent is effected only by the will of
The doctrine is sometimes derisively called the legislature through the medium of a duly
"the royal prerogative of dishonesty" because enacted statute. We have held that not all
of the privilege it grants the state to defeat contracts entered into by the government will
any legitimate claim against it by simply operate as a waiver of its non-suability;
invoking its non-suability. That is hardly fair, distinction must be made between its
at least in democratic societies, for the state is sovereign and proprietary acts. As for the
not an unfeeling tyrant unmoved by the valid filing of a complaint by the government,
claims of its citizens. In fact, the doctrine is suability will result only where the
not absolute and does not say the state may government is claiming affirmative relief
not be sued under any circumstance. On the from the defendant.
contrary, the rule says that the state may not
be sued without its consent, which clearly
imports that it may be sued if it consents.
RESTRICTIVE THEORY OF STATE
WAIVER OF STATE IMMUNITY. The consent IMMUNITY. - There is no question that the
of the state to be sued may be manifested United States of America, like any other state,
expressly or impliedly. Express consent may will be deemed to have impliedly waived its
be embodied in a general law or a special law. non-suability if it has entered into a contract
Consent is implied when the state enters into in its proprietary or private capacity. It is only
a contract or it itself commences litigation. when the contract involves its sovereign or
governmental capacity that no such waiver
The general law waiving the immunity of the may be implied. This was our ruling in United
state from suit is found in Act No. 3083, under States of America v. Ruiz, where the
which the Philippine government "consents transaction in question dealt with the
and submits to be sued upon any moneyed improvement of the wharves in the naval
claim involving liability arising from contract, installation at Subic Bay. As this was a clearly
express or implied, which could serve as a governmental function, we held that the
basis of civil action between private parties." contract did not operate to divest the United
In Merritt v. Government of the Philippine States of its sovereign immunity from suit. In
Islands, a special law was passed to enable a the words of Justice Vicente Abad Santos:
person to sue the government for an alleged
tort. When the government enters into a The traditional rule of immunity exempts a
contract, it is deemed to have descended to State from being sued in the courts of another
the level of the other contracting party and State without its consent or waiver. This rule
divested of its sovereign immunity from suit is a necessary consequence of the principles
with its implied consent. Waiver is also of independence and equality of States.

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However, the rules of International Law are torts.

not petrified; they are constantly developing
and evolving. And because the activities of There seems to be a failure to distinguish
states have multiplied, it has been necessary between suability and liability and a
to distinguish them — between sovereign and misconception that the two terms are
governmental acts (jure imperii) and private, synonymous. Suability depends on the
commercial and proprietary acts (jure consent of the state to be sued, liability on the
gestionis). The result is that State immunity applicable law and the established facts. The
now extends only to acts jure imperii. The circumstance that a state is suable does not
restrictive application of State immunity is necessarily mean that it is liable; on the other
now the rule in the United States, the United hand, it can never be held liable if it does not
Kingdom and other states in Western Europe. first consent to be sued. Liability is not
conceded by the mere fact that the state has
The restrictive application of State immunity allowed itself to be sued. When the state does
is proper only when the proceedings arise out waive its sovereign immunity, it is only giving
of commercial transactions of the foreign the plaintiff the chance to prove, if it can, that
sovereign, its commercial activities or the defendant is liable.
economic affairs. Stated differently, a State
may be said to have descended to the level of The said article establishes a rule of liability,
an individual and can thus be deemed to have not suability. The government may be held
tacitly given its consent to be sued only when liable under this rule only if it first allows
it enters into business contracts. It does not itself to be sued through any of the accepted
apply where the contract relates to the forms of consent.
exercise of its sovereign functions. In this case
the projects are an integral part of the naval Moreover, the agent performing his regular
base which is devoted to the defense of both functions is not a special agent even if he is so
the United States and the Philippines, denominated, as in the case at bar. No less
indisputably a function of the government of important, the said provision appears to
the highest order; they are not utilized for nor regulate only the relations of the local state
dedicated to commercial or business with its inhabitants and, hence, applies only
purposes. to the Philippine government and not to
foreign governments impleaded in our courts.
SUABILITY IS NOT SYNONYMOUS WITH

LIABILITY. - The private respondent invokes Section 3, Article XVI of the 1987 Philippine
Article 2180 of the Civil Code which holds the Constitution
government liable if it acts through a special
agent. The argument, it would seem, is
premised on the ground that since the officers
are designated "special agents," the United
States government should be liable for their

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UNITED STATES VS GUINTO consented. It is now contesting the denial of

its motions by the respondent judges.
FACTS:
In the first case, the private respondents are

suing several officers of the US Airforce ISSUE:
Stationed in Clark Air Base in connection with
the bidding conducted by them for contracts Whether or not the doctrine of State
for barber services in the base. Immunity is not applicable thereby making
the state liable.
In the second case, private respondents filed a
complaint for damages against private
petitioners for his dismissal as cook in the US
RULING:
Air Force Recreation Center at the John Hay
Air Station. NO.. While suable, the petitioners are
nevertheless not liable. It is obvious that the
In the third case, private respondent, who
claim for damages cannot be allowed on the
was employed as a barracks boy in a US base,
strength of the evidence which have been
was arrested following a buy-bust operation
carefully examined.
conducted by the individual petitioners,
officers of the US Air Force and Special Agents The traditional rule of immunity exempts a
of the US Air Force of Special Investigators. State from being sued in the courts of another
He then filed a complaint for damages against state without its consent or waiver. This rule
the individual petitioners claiming that it was is a necessary consequence of the principles
because of their acts that he was removed. of independence and equality of States.
However, the rules of International law are
In the Fourth case, a complaint for damages
not petrified; they are constantly evolving
was filed by the private respondents against
and developing. And because the activities of
the private petitioners, for inquiries allegedly
the state have multiplied it has been
sustained by the plaintiffs as a result of the
necessary to distinguish them - between
acts of the defendants. According to the
sovereign and governmental acts (jure
plaintiffs, the defendants beat them up,
imperii) and private, commercial and
handcuffed them and unleashed dogs on them
proprietary acts (jure gestionis). The result is
which bit them in several parts of their bodies
that State immunity now extends only to acts
and caused extensive injuries to them.
jure imperii. The restrictive application of
These cases have been consolidated because State immunity is now the rule in the United
they a;; involved the doctrine of state States, the United Kingdom and other states
immunity. The United States of America was in Western Europe.
not impleaded in the complaints below but
The restrictive application of State
has moved to dismiss on the ground that they
immunity is proper only when the
are in effect suits against it to which it has not
proceedings arise out of commercial

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transactions of the foreign sovereign, its consent of the state to be sued, liability on the
commercial activities or economic affairs. applicable law and the established facts. The
Stated differently, a State may be said to have circumstance that a state is suable does not
descended to the level of an individual and necessarily mean that it is liable; on the other
can thus be deemed to have tacitly given its hand, it can never be held liable if it does not
consent to be sued only when it enters into first consent to be sued. Liability is not
business contracts. It does not apply where conceded by the mere fact that the state has
the contract relates to the exercise of its allowed itself to be sued.
sovereign functions. In this case the projects
are an integral part of the naval base which is When the state does waive its sovereign
devoted to the defense of both the United immunity, it is only giving the plaintiff the
States and the Philippines, indisputably a chance to prove, if it can, that the defendant is
function of the government of the highest liable. The said article establishes a rule of
order; they are not utilized for nor dedicated liability , not suability. The government may
to commercial or business purposes. be held liable under this rule only if it first
allows itself to be sued through any of the
There is no question that the United States of accepted forms of consent. Moreover, the
America, like any other state, will be deemed agent performing his regular functions is not
to have impliedly waived its non-suability if it a special agent even if he is so denominated,
has entered into a contract in its proprietary as in the case at bar. No less important, the
or private capacity, as in the cases at bar. It is said provision appears to regulate only the
only when the contract involves its sovereign relations of the local state with its inhabitants
or governmental capacity that no such waiver and, hence, applies only to the Philippine
may be implied. A State may be said to have government and not to foreign governments
descended to the level of an individual and impleaded in our courts. The complaints
can thus be deemed to have tacitly given its against the petitioners in the court below
consent to be sued only when it enters into were aptly dismissed.
business contracts.
The private respondents invoke Article 2180 of

the Civil Code which holds the government
liable if it acts through a special agent. The
argument, it would seem, is premised on the VETERANS MANPOWER AND PROTECTIVE
ground that since the officers are designated SERVICE, INC. VS CA
"special agents," the United States government (G.R. NO. 91359, SEPTEMBER 25, 1992)
should be liable for their torts.
CASE DOCTRINE: WAIVER OF STATE IS
CONSTRUED STRICTISSIMI JURIS. - Waiver of
There seems to be a failure to distinguish
the State's immunity from suit, being a
between suability and liability and a
derogation of sovereignty, will not be lightly
misconception that the two terms are
inferred, but must be construed strictissimi
synonymous. Suability depends on the

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MENDIOLA, MANILA
juris (Republic vs. Feliciano, 148 SCRA 424). security services, clearly, a governmental
The consent of the State to be sued must function. The execution of the said agreement
emanate from statutory authority, hence, is incidental to the purpose of R.A. 5487, as
from a legislative act, not from a mere amended, which is to regulate the
memorandum. Without such consent, the trial organization and operation of private
court did not acquire jurisdiction over the detective, watchmen or security guard
public respondents. agencies. (Emphasis Ours.)" (pp. 258-259,
Rollo.)
We agree with the observation of the Court of
Appeals that the Memorandum of Agreement The state immunity doctrine rests upon
dated May 12, 1986 does not constitute an reasons of public policy and the
implied consent by the State to be sued: inconvenience and danger which would flow
from a different rule. "It is obvious that public
"The Memorandum of Agreement dated May service would be hindered, and public safety
12, 1986 was entered into by the PC Chief in endangered, if the supreme authority could
relation to the exercise of a function be subjected to suits at the instance of every
sovereign in nature. The correct test for the citizen, and, consequently, controlled in the
application of state immunity is not the use and disposition of the means required for
conclusion of a contract by the State but the the proper administration of the government"
legal nature of the act. This was clearly (Siren vs. U.S. Wall, 152, 19 L. ed. 129, as cited
enunciated in the case of United States of in 78 SCRA 477). In the same vein, this Court
America vs. Ruiz where the Hon. Supreme in Republic vs. Purisima (78 SCRA 470, 473)
Court held: rationalized:
"'The restrictive application of State "Nonetheless, a continued adherence to the

immunity is proper only when the doctrine of nonsuability is not to be deplored
proceedings arise out of commercial for as against the inconvenience that may be
transactions of the foreign sovereign, its cause [by] private parties, the loss of
commercial activities or economic affairs. governmental efficiency and the obstacle to
Stated differently, a State may be said to have the performance of its multifarious functions
descended to the level of an individual and are far greater if such a fundamental principle
can thus be deemed to have tacitly given its were abandoned and the availability of
consent to be sued only when it enters into a judicial remedy were not thus restricted.
business contract. It does not apply where the With the well known propensity on the part
contract relates to the exercise of its of our people to go to court, at the least
functions.' (136 SCRA 487, 492.) provocation, the loss of time and energy
required to defend against law suits, in the
"In the instant case, the Memorandum of absence of such a basic principle that
Agreement entered into by the PC Chief and constitutes such an effective obstacles, could
PADPAO was intended to professionalize the very well be imagined." (citing Providence
industry and to standardize the salaries of Washington Insurance Co. vs. Republic, 29
security guards as well as the current rates of SCRA 598.)

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MENDIOLA, MANILA
2. No, since the acts for which the PC

Chief and PC-SUSIA are being called to
VETERANS MANPOWER AND PROTECTIVE account in this case, were performed
SERVICE, INC. VS COURT OF APPEALS by them as part of their official duties,
without malice, gross negligence or
bad faith, no recovery may be held
FACTS: against them in their private
A suit was filed against the PC Chief for failure capacities.
to act on the request by petitioner seeking to
set aside the findings of PADPAO expelling it 3. No, the Memorandum of Agreement
from PADPAO and considering its application did not constitute an implied consent
for renewal of its license even without a by the State to be sued because it was
certificate of membership from PADPAO. A intended to professionalize the
Motion to Dismiss was filed invoking that it is industry and to standardized the
a suit against the State which had not given its salaries of the security guards. It is
consent. merely incidental to the purpose of
RA No. 5487 which is to regulate the
ISSUES: organization and operation of private
1. Whether or not the action taken by security agencies. The State is deemed
the petitioners is a suit against the to have given tacitly its consent to be
State. sued when it enters into a contract.
2. Whether of not the PC Chief and PC- However, it does not apply where the
SUSIA are liable in their private contact relates to the exercise of its
capacities. sovereign functions.
3. Whether or not the Memorandum of
Agreement constitute as an implied
consent of the State to be sued
HELD: SUIT AGAINST PUBLIC OFFICERS

1. Yes, it is a suit against the State, the
PC Chief and PC-SUSIA being - The doctrine of State immunity also
instrumentalities of the State applies to complaints filed against
exercising the governmental function officials of the State for acts
of regulating the organization and performed by them in the discharge of
operation of private detective their duties within the scope of their
watchmen or security guard agencies. authority. Thus, in the Veterans
Even if its action prospers, the Manpower case, the suit against the
payment of its monetary claims may PC Chief and PC-SUSIA was dismissed
not be enforced because the State did for being a suit against the state, since
not consent to appropriate the it was a suit against public officers in
necessary funds for the purpose. the discharge of official functions
which are governmental in character.

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MENDIOLA, MANILA
Likewise, in Larkins v. NLRC, 241 SCRA E. Merritt to bring suit in the courts against
598, it was noted that the private the Government, in order that said questions
respondents were dismissed from may be decided: Now, therefore,
their employment by Lt. Col.
Frankhauser acting for and in behalf "By authority of the United States, be it
of the US government which, by right enacted by the Philippine Legislature, that:
of sovereign power, operated and
maintained the dormitories at the "SECTION 1. E. Merritt is hereby authorized to
Clark Air Base for USAF members. bring suit in the Court of First Instance of the
city of Manila against the Government of the
Philippine Islands in order to fix the
responsibility for the collision between his
motorcycle and the ambulance of the General
MERRITT vs. GOVERNMENT OF THE Hospital, and to determine the amount of the
PHILIPPINES damages, if any, to which Mr. E. Merritt is
(G.R. NO. L-11154, MARCH 21, 1916) entitled on account of said collision, and the
TRENT, J. attorney- General of the Philippine Islands is
hereby authorized and directed to appear at
CASE DOCTRINE: SPECIAL LAW WAIVING the trial on the behalf of the Government of
STATE IMMUNITY. - Act No. 2457, effective said Islands, to defend said Government at the
February 3, 1915, reads: same.
"An act authorizing E. Merritt to bring suit "SEC. 2. This Act shall take effect on its passage.
against the Government of the Philippine
Islands and authorizing the Attorney-General "Enacted, February 3, 1915."
of said Islands to appear in said suit.
Did the defendant, in enacting the above
"Whereas a claim has been filed against the quoted act, simply waive its immunity from
Government of the Philippine Islands by Mr. E. suit or did it also concede its liability to the
Merritt, of Manila, for damages resulting from plaintiff? If only the former, then it cannot be
a collision between his motorcycle and the held that the Act created any new cause of
ambulance of the General Hospital on March action in favor of the plaintiff or extended the
twenty-fifth, nineteen hundred and thirteen; defendant's liability to any case not
previously recognized.
"Whereas it is not known who is responsible
for the accident nor is it possible to determine All admit that the Insular Government (the
the amount of damages, if any, to which the defendant) cannot be sued by an individual
claimant is entitled; and without its consent. It is also admitted that
the instant case is one against the
"Whereas the Director of Public Works and Government. As the consent of the
the Attorney-General recommend that an act Government to be sued by the plaintiff was
be passed by the Legislature authorizing Mr. entirely voluntary on its part, it is our duty to

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MENDIOLA, MANILA
look carefully into the terms of the consent, Act of 1913, which authorized the bringing of
and render judgment accordingly. this suit, read:
The plaintiff was authorized to bring this "SECTION 1.Authority is hereby given to
action against the Government "in order to fix George Apfelbacher, of the town of Summit,
the responsibility for the collision between Waukesha County, Wisconsin, to bring suit in
his motorcycle and the ambulance of the such court or courts and in such form or
General Hospital and to determine the forms as he may be advised for the purpose of
amount of the damages, if any, to which Mr. E. settling and determining all controversies
Merritt is entitled on account of said which he may now have with the State of
collision, . . . ." These were the two questions Wisconsin, or its duly authorized officers and
submitted to the court for determination. The agents, relative to the mill property of said
Act was passed "in order that said questions George Apfelbacher, the fish hatchery of the
may be decided." We have "decided" that the State Wisconsin on the Bark River, and the
accident was due solely to the negligence of mill property of Evan Humphrey at the lower
the chauffeur, who was at the time an end of Nagawicka Lake, and relative to the
employee of the defendant, and we have also use of the waters of said Bark River and
fixed the amount of damages sustained by the Nagawicka Lake, all in the county of
plaintiff as a result of the collision. Does the Waukesha, Wisconsin."
Act authorize us to hold that the Government
is legally liable for that amount? If not, we In determining the scope of this act, the court
must look elsewhere for such authority, if it said;
exists.
"Plaintiff claims that by the enactment of this
SUABILITY VS. LIABILITY. - As to the scope law the legislature admitted liability on the
of legislative enactments permitting part of the state for the acts of its officers, and
individuals to sue the state where the cause of that the suit now stands just as it would stand
action arises out of either tort or contract, the between private parties. It is difficult to see
rule is stated in 36 Cyc., 915, thus: how the act does, or was intended to do, more
than remove the state's immunity from suit. It
"By consenting to be sued a state simply simply gives authority to commence suit for
waives its immunity from suit. It does not the purpose of settling plaintiff's
thereby concede its liability to plaintiff, or controversies with the state. Nowhere in the
create any cause of action in his favor, or act is there a whisper or suggestion that the
extend its liability to any cause not previously court or courts in the disposition of the suit
recognized. It merely gives a remedy to shall depart from well established principles
enforce a preexisting liability and submits of law, or that the amount of damages is the
itself to the jurisdiction of the court, subject to only question to be settled. The act opened
its right to interpose any lawful defense." the door of the court to the plaintiff. It did not
pass upon the question of liability, but left the
In Apfelbacher vs. State (152 N. W., 144, suit just where it would be in the absence of
advanced sheets), decided April 16, 1915, the the state's immunity from suit. If the

Page | 16
MENDIOLA, MANILA
Legislature had intended to change the rule Islands to appear in said suit. A suit was then
that obtained in this state so long and to filed before the CFI of Manila, which fixed the
declare liability on the part of the state, it responsibility for the collision solely on the
would not have left so important a matter to ambulance driver and determined the
mere inference but would have done so in amount of
express terms. (Murdoc Grate Co. vs. damages to be awarded to Merritt. Both
Commonwealth, 152 Mass., 28; 24 N. E., 854; parties appealed from the decision, plaintiff
8 L. R.A., 399) Merritt as to the amount of damages and
defendant in rendering the amount against
It being quite clear that Act No. 2457 does not the government.
operate to extend the Government's liability
to any cause not previously recognized, we ISSUE: Whether or not defendant,
will now examine the substantive law Government of the Philippines, waived its
touching the defendant's liability for the immunity from suit as well as conceded its
negligent acts of its officers, agents, and liability to the plaintiff when it enacted Act No.
employees. Paragraph 5 of article 1903 of the 2457
civil Code reads:
HELD:
"The state is liable in this sense when it acts NO. By consenting to be sued, a state simply
through a special agent, but not when the waives its immunity from suit. It does not
damage should have been caused by the thereby concede its liability to the plaintiff, or
official to whom properly it pertained to do create any cause of action in his favor, or
the act performed, in which case the extend its liability to any cause not previously
provisions of the preceding article shall be recognized. It merely gives a remedy to
applicable." enforce a pre-existing liability and submit
itself to the jurisdiction of the court, subject to
its right to interpose any lawful defense.
The Government of the Philippines Islands is
MERRITT vs. GOVERNMENT OF THE only liable, for the acts of its agents, officers
PHILIPPINES and employees when they act as special
agents. A special agent is one who receives a
definite and fixed order or commission,
FACTS: foreign to the exercise of the duties of his
Merritt, while riding his motorcycle was hit office if he is a special official. The special
by an ambulance owned by the Philippine agent acts in representation of the state and
General Hospital. A driver employed by the being bound to act as an agent thereof, he
hospital drove it. In order for Merritt to sue executes the trust confided to him. This
the Philippine government, Act No. 2457 was concept does not apply to any executive agent
enacted by the Philippine Legislature who is an employee of the acting
authorizing Merritt to bring suit against the administration and who on his own
Government of the Philippine Islands and responsibility performs the functions which
authorizing the Attorney-General of said
Page | 17
MENDIOLA, MANILA
are inherent in and naturally pertain to his the government was not acting through a
office and which are regulated by law and the special agent.
regulations. The responsibility of the state is
limited to that which it contracts through a b) In Fontanilla v. Maliaman, 194 SCRA 486,
special agent, duly empowered by a definite the Supreme Court said that the National
order or commission to perform some act or Irrigation Administration is a government
charged with some definite purpose which agency with a juridical personality separate
gives rise to the claim, and not where the and distinct from the government; it is a
claim is based on acts or omissions imputable corporate body performing proprietary
to a public official charged with some functions. Thus, the NIA may be held liable for
administrative or technical office who can be damages caused by the negligent act of its
held to the proper responsibility in the driver who was not a special agent.
manner laid down by the law of civil This was reiterated in National Irrigation
responsibility. The chauffeur of the Administration v. Court of Appeals, 214 SCRA
ambulance of the General Hospital was not 35.
such an agent.
WHY IS A STATE IMMUNITY FROM SUIT

OFTEN CALLED THE ROYAL PREROGATIVE
OF DISHONESTY? CAN THE DOCTRINE OF STATE IMMUNITY
BE USED TO PERPETRATE INJUSTICE?
- The government itself can easily
defeat a claim by invoking the - No. Government cannot evade the
doctrine of non-suability payment of just compensation as
- - State can conveniently defeat stated in the case of Amigable vs.
rightful legal claims against it. Cuenca
FROM NACHURA:
Suability not equated with outright liability.
AMIGABLE VS. CUENCA
Liability will have to be determined by the
(G.R. NO. L-26400 FEBRUARY 29, 1972)
Court
MAKALINTAL, J.
on the basis of the evidence and the
applicable law.
CASE DOCTRINE: THE DOCTRINE OF STATE
IMMUNITY CANNOT BE USED TO
a) In Merritt v. Government of the Philippine
PERPETRATE INJUSTICE. - In the case of
Islands, supra., while consent to be sued was
Ministerio vs. Court of First Instance of Cebu,
granted through a special law, the
1 involving a claim for payment of the value
government was held not liable for damages,
of a portion of land used for the widening of
because under the attendant circumstances
the Gorordo Avenue in Cebu City, this Court,
through Mr. Justice Enrique M. Fernando, held

Page | 18
MENDIOLA, MANILA
that where the government takes away immunity from suit could still be
property from a private landowner for public appropriately invoked."
use without going through the legal process
of expropriation or negotiated sale, the
aggrieved party may properly maintain a suit
against the government without thereby AMIGABLE VS. CUENCA
violating the doctrine of governmental
immunity from suit without its consent. We FACTS:
there said: Amigable is the registered owner of a lot
covered by a Transfer Certificate of Title,
". . . If the constitutional mandate that the where no annotation in favor of the
owner be compensated for property taken for government of any right or interest in the
public use were to be respected, as it should, property appears at the back of the certificate.
then a suit of this character should not be Without prior expropriation or negotiated
summarily dismissed. The doctrine of sale, the government used a portion of said
governmental immunity from suit cannot lot for the construction of the Mango and
serve as an instrument for perpetrating an Gorordo Avenues. It appears that said
injustice on a citizen. Had the government avenues already existed since 1921. In 1958,
followed the procedure indicated by the Amigable's counsel wrote the President of the
governing law at the time, a complaint would Philippines, requesting payment of the
have been filed by it, and only upon payment portion of her lot which had been
of the compensation fixed by the judgment, or appropriated by the government. The claim
after tender to the party entitled to such was indorsed to the Auditor General, who
payment of the amount fixed, may it have the disallowed it. Amigable then filed in the court
right to enter in and upon the land so a quo a complaint against the Republic of the
condemned, to appropriate the same to the Philippines and Nicolas Cuenca, in his
public use defined in the judgment.' If there capacity as Commissioner of Public Highways
were an observance of procedural regularity, for the recovery of ownership and possession
petitioners would not be in the sad plaint they of the land traversed by the Mango and
are now. It is unthinkable then that precisely Gorordo Avenues. She also sought the
because there was a failure to abide by what payment of compensatory damages for the
the law requires, the government would illegal occupation of her land, moral damages,
stand to benefit. It is just as important, if not attorney's fees and the costs of the suit. The
more so, that there be fidelity to legal norms Government had not given its consent to be
on the part of officialdom if the rule of law sued.
were to be maintained. It is not too much to
say that when the government takes any
property for public use, which is conditioned ISSUE: Whether or not the appellant may
upon the payment of just compensation, to be properly sue the government under the facts
judicially ascertained, it makes manifest that of the case
it submits to the jurisdiction of a court. There
is no thought then that the doctrine of
Page | 19
MENDIOLA, MANILA
HELD: REPUBLIC VS. SANDIGANBAYAN

204 SCRA 212 (1991)
YES. Where the government takes away
property from a private landowner for public CASE DOCTRINE: STATE IMPLIEDLY
use without going through the legal process WAIVES ITS IMMUNITY WHEN IT
of expropriation or negotiated sale, the COMMENCES LITIGATION. - So, too, the
aggrieved party may properly maintain a suit PCGG's postulation that none of its members
against the government without thereby may be "required to testify or produce
violating the doctrine of governmental evidence in any judicial . . . proceeding
immunity from suit without its consent. The concerning matters within its official
doctrine of governmental immunity from suit cognizance," has no application to a judicial
cannot serve as an instrument for proceeding it has itself initiated. As just
perpetrating an injustice on a citizen. Had the suggested, the act of bringing suit must entail
government followed the procedure indicated a waiver of the exemption from giving
by the governing law at the time, a complaint evidence; by bringing suit it brings itself
would have been filed by it, and only upon within the operation and scope of all the rules
payment of the compensation fixed by the governing civil actions, including the rights
judgment, or after tender to the party entitled and duties under the rules of discovery.
to such payment of the amount fixed, may it Otherwise, the absurd would have to be
"have the right to enter in and upon the land conceded, that while the parties it has
so condemned, to appropriate the same to the impleaded as defendants may be required to
public use defined in the judgment." If there "disgorge all the facts" within their
were an observance of procedural regularity, knowledge and in their possession, it may not
petitioners would not be in the sad plaint they itself be subject to a like compulsion.
are now. It is unthinkable then that precisely
because there was a failure to abide by what The State is, of course, immune from suit in
the law requires, the government would the sense that it cannot, as a rule, be sued
stand to benefit. It is not too much to say that without its consent. But it is axiomatic that in
when the government takes any property for filing an action, it divests itself of its sovereign
public use, which is conditioned upon the character and sheds its immunity from suit,
payment of just compensation, to be judicially descending to the level of an ordinary litigant.
ascertained, it makes manifest that it submits The PCGG cannot claim a superior or
to the jurisdiction of a court. There is no preferred status to the State, even while
thought then that the doctrine of immunity assuming to represent or act for the State.
from suit could still be appropriately invoked.
The suggestion that the State makes no
implied waiver of immunity by filing suit
except when in so doing it acts in, or in
matters concerning, its proprietary or non-
governmental capacity, is unacceptable; it
attempts a distinction without support in
principle or precedent. On the contrary —

Page | 20
MENDIOLA, MANILA
"The consent of the State to be sued may be private respondents Bienvenido Tantoco and
given expressly or impliedly. Express consent Dominador Santiago, et al. Private
may be manifested either through a general respondents jointly moved “to strike out
law or a special law. Implied consent is given some portions of the complaint and for bill of
when the State itself commences litigation or particulars of other portions”, which motion
when it enters into a contract." was opposed by the PCGG. The
Sandiganbayan gave the PCGG 45 days to
"The immunity of the State from suits does expand its complaint to make more specific
not deprive it of the right to sue private certain allegations. Private respondents then
parties in its own courts. The state as plaintiff presented a “Motion to leave to file
may avail itself of the different forms of interrogatories under Rule 25 of the Rules of
actions open to private litigants. In short, by Court”. The Sandiganbayan denied private
taking the initiative in an action against the respondents’ motions. Private respondents
private parties, the state surrenders its filed an Answer to with Compulsory
privileged position and comes down to the Counterclaim. In response, the PCGG
level of the defendant. The latter presented a “Reply to Counterclaim with
automatically acquires, within certain limits, Motion to Dismiss compulsory counterclaim.”
the right to set up whatever claims and other Private respondents filed a pleading
defenses he might have against the state. . . . denominated “Interrogatories to Plaintiff”,
(Sinco, Philippine Political Law, Tenth E., pp. and “Amended Interrogatories to Plaintiff” as
36-37, citing U.S. vs. Ringgold, 8 Pet. 150, 8 well as a motion for production and
L.ed. 899)'" 51 inspection of documents. The Sandiganbayan
admitted the Amended Interrogatories and
It can hardly be doubted that in exercising the granted the motion for production and
right of eminent domain, the State exercises inspection of documents respectively. The
its jus imperii, as distinguished from its PCGG moved for reconsideration, arguing that
proprietary rights or jus gestionis. Yet, even the documents are privileged in character
in that area, it has been held that where since they are intended to be used against the
private property has been taken in PCGG and/or its Commission in violation of
expropriation without just compensation Sec.4 of EO No.1, V12:
being paid, the defense of immunity from suit
cannot be set up by the State against an action a) No civil action shall lie against the
for payment by the owner. Commission or any member thereof for
anything done or omitted in the discharge of
the task contemplated by this order.
REPUBLIC VS. SANDIGANBAYAN b) No member or staff by the Commission

shall be required to testify or produce
FACTS: evidence in any judicial, legislative or
The PCGG filed with the Sandiganbayan a administrative proceedings concerning
complaint for reconveyance, reversion, matter within its official cognizance.
accounting, restitution, and damages against

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MENDIOLA, MANILA
Permissive counterclaim – Still, state has

The Sandiganbayan promulgated two immunity
Resolutions. The first, denying
reconsideration of the Resolution allowing
production of the documents, and the second,
reiterating, by implication the permission to
serve the amended interrogatories on the REPUBLIC OF THE PHILIPPINES VS. PABLO
plaintiff. FELICIANO
AND INTERMEDIATE APPELLATE COURT
ISSUE: Is the PCGG immune from suit? G.R. NO. 70853; MARCH 12, 1987
HELD: CASE DOCTRINE:

NO. The state is of course immune from suit EXPRESS CONSENT THROUGH THE ACT OF
in the sense that it cannot, as a rule, be sued THE LEGISLATIVE BODY
without its consent. But it is axiomatic that in - Need for consent. In order that suit
filing an action, it divests itself of its sovereign may lie against the state, there must
character and sheds its immunity from suit, be consent, either express or implied.
descending to the level of an ordinary litigant. Where no consent is shown, state
The PCGG cannot claim a superior or immunity from suit may be invoked as
preferred status to the State, even while a defense by the courts sua sponte at
assuming of an act for the State. The any stage of the proceedings, because
suggestion that the State makes no implied waiver of immunity, being in
waiver of immunity by filing a suit except derogation of sovereignty, will not be
when in doing so it acts in, or in matters inferred lightly and must be
concerning, its proprietary or non- construed in strictissimi juris.
governmental capacity,is unacceptable. It Accordingly, the complaint (or
attempts a distinction without support in counterclaim) against the State must
principle or precedent. On the contrary, “the allege the existence of such consent
consent of the State to be sued may be given (and where the same is found),
expressly or impliedly.” Express consent may otherwise, the complaint may be
be manifested either through a general law or dismissed [Republic v. Feliciano, 148
a special law. Implied consent is given when SCRA 424].
the State itself commences litigation or when
it enters into a contract.
We find the petition meritorious. The
Inequitable situation that will result : doctrine of non-suability of the State has
boxing match! Government can punch, but proper application in this case. The plaintiff
cannot be punched back. [Rep. vs. has impleaded the Republic of the Philippines
Sandiganbayan] as defendant in an action for recovery of
ownership and possession of a parcel of land,
bringing the State to court just like any
private person who is claimed to be usurping
Page | 22
MENDIOLA, MANILA
a piece of property. A suit for the recovery of exclusion of existing private rights from the
property is not an action in rem, but an action reservation established by Proclamation No.
in personam. It is an action directed against a 90 can not be construed as a waiver of the
specific party or parties, and any judgment immunity of the State from suit. Waiver of
therein binds only such party or parties. The immunity, being a derogation of sovereignty,
complaint filed by plaintiff, the private will not be inferred lightly, but must be
respondent herein, is directed against the construed in strictissimi juris. Moreover, the
Republic of the Philippines, represented by Proclamation is not a legislative act. The
the Land Authority, a governmental agency consent of the State to be sued must emanate
created by Republic Act No. 3844. from statutory authority. Waiver of State
immunity can only be made by an act of the
By its caption and its allegation and prayer, legislative body.
the complaint is clearly a suit against the
State, which under settled jurisprudence is Neither is there merit in respondent's
not permitted, except upon a showing that the submission. which the respondent appellate
State has consented to be sued, either court sustained, on the basis of our decision
expressly or by implication through the use of in the Begosa case, that the present action is
statutory language too plain to be not a suit against the State within the rule of
misinterpreted. There is no such showing in State immunity from suit, because plaintiff
the instant case. Worse, the complaint itself does not seek to divest the Government of
fails to allege the existence of such consent. any of its lands or its funds. It is contended
This is a fatal defect, and on this basis alone, that the complaint involves land not owned
the complaint should have been dismissed. by the State, but private land belonging to the
plaintiff, hence the Government is not being
THE STATE IMMUNITY MAY BE INVOKED divested of any of its properties. There is
AT ANY STAGE OF THE PROCEEDINGS. - some sophistry involved in this argument,
The failure of the petitioner to assert the since the character of the land sought to be
defense of immunity from suit when the case recovered still remains to be established, and
was tried before the court a quo, as alleged by the plaintiff's action is directed against the
private respondent, is not fatal. It is now State precisely to compel the latter to litigate
settled that such defense "may be invoked by the ownership and possession of the property.
the courts sua sponte at any stage of the In other words, the plaintiff is out to establish
proceedings." that he is the owner of the land in question
based, incidentally, on an informacion
EXPRESS WAIVER OF IMMUNITY MUST BE posesoria of dubious value, and he seeks to
THROUGH LEGISLATIVE ACT. - Private establish his claim of ownership by suing the
respondent contends that the consent of Republic of the Philippines in an action in
petitioner may be read from the Proclamation personam.
itself, when it established the reservation
"subject to private rights, if any there be." We
do not agree. No such consent can be drawn
from the language of the Proclamation. The

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MENDIOLA, MANILA
REPUBLIC OF THE PHILIPPINES VS. Administration (NARRA), a tract of land

PABLO FELICIANO situated in the Municipalities of Tinambac
and Siruma, Camarines Sur, after which the
NARRA and its successor agency, the Land
FACTS: Authority, started sub-dividing and
Petitioner seeks the review of the decision of distributing the land to the settlers; that the
the Intermediate Appellate Court dated April property in question, while located within the
30, 1985, which dismissed the complaint of reservation established under Proclamation
respondent Pablo Feliciano for recovery of No. 90, was the private property of Feliciano
ownership and possession of a parcel of land and should therefore be excluded therefrom.
on the ground of non-suability of the State. On Feliciano prayed that he be declared the
January 22, 1970, Feliciano filed a complaint rightful and true owner of the property in
with then Court of First Instance of Camarines question consisting of 1,364.4177 hectares;
Sur against the RP, represented by the Land that his title of ownership based on
Authority, for the recovery of ownership and informacion posesoria of his predecessor-in-
possession of a parcel of land, consisting of interest be declared legally valid and
four (4) lots with an aggregate area of subsisting and that defendant be ordered to
1,364.4177 hectares, situated in the Barrio of cancel and nullify all awards to the settlers.
Salvacion, Municipality of Tinambac,
Camarines Sur. Feliciano alleged that he ISSUE:
bought the property in question from Victor Whether or not the State can be sued for
Gardiola by virtue of a Contract of Sale dated recovery and possession of a parcel of land
May 31, 1952, followed by a Deed of Absolute
Sale on October 30, 1954; that Gardiola had HELD:
acquired the property by purchase from the A suit against the State, under settled
heirs of Francisco Abrazado whose title to the jurisprudence is not permitted, except upon a
said property was showing that the State has consented to be
evidenced by an informacion posesoria that sued, either expressly or by implication
upon his purchase of the property, he took through the use of statutory language too
actual possession of the same, introduced plain to be misinterpreted. It may be invoked
various improvements therein and caused it by the courts sua sponte at any stage of the
to be surveyed in July 1952, which survey proceedings. Waiver of immunity, being a
was approved by the Director of Lands on derogation of sovereignty, will not be inferred
October 24,1954. lightly, but must be construed instrictissimi
juris (of strictest right).
On November 1, 1954, President Ramon
Magsaysay issued Proclamation No. 90 Moreover, the Proclamation is not a
reserving for settlement purposes, under the legislative act. The consent of the State to be
administration of the National Resettlement sued must emanate from statutory authority.
and Rehabilitation Waiver of State immunity can only be made
by an act of the legislative body. Also, it is

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MENDIOLA, MANILA
noteworthy, that as pointed out by the into in its governmental capacity, because of
Solicitor General, that the informacion the express consent contained in Act No. 3038,
posesoria registered in the Office of the provided that the claim be first brought to the
Register of Deed of Camarines Sur on Commission on Audit in accordance with CA
September 23, 1952 was a "reconstituted" 327, as amended [Department of Agriculture v.
possessory information; it was "reconstituted NLRC, 227 SCRA 693].
from the duplicate presented to this office
(Register of Deeds) by Dr. Pablo Feliciano," ia) But in Amigable v. Cuenca, 43 SCRA 360, an
without the submission of proof that the action for the recovery of the value of the
alleged duplicate was authentic or that the property taken by the government and
original thereof was lost. Reconstitution can converted into a public street without
be validly made only in case of loss of the payment of just compensation was allowed,
original. These circumstances raise grave despite the failure of the property owner to
doubts as to the authenticity and validity of file his claim with the Auditor General.
the "informacion posesoria" relied upon by
respondent Feliciano. Adding to the Invoking Ministerio v. City of Cebu, 40 SCRA
dubiousness of said document is the fact that 464, the Supreme Court said that suit may lie
"possessory information calls for an area of because the doctrine of State immunity
only 100 hectares," whereas the land claimed cannot be used to perpetrate an injustice.
by respondent Feliciano comprises This ruling was reiterated in De los Santos v.
1,364.4177 hectares, later reduced to 701- Intermediate Appellate Court, 223 SCRA 11,
9064 hectares. where it was held that the “public
respondents’ belief that the property is public,
even if buttressed by statements of other
FROM NACHURA: public officials, is no reason for the unjust
taking of petitioner’s property”; after all, the
a) Express consent. Express consent can be TCT was in the name of the petitioner. See
given only by an act of the legislative body also Republic v. Sandiganbayan, 204 SCRA 212.
[Republic v. Feliciano, supra.], in a general or a
special law. i) In EPG Construction v. Secretary Vigilar, G.R.
No. 131544, March 16, 2001, the ruling in
i) General Law. An example of a general law Ministerio was invoked when the respondent
granting consent is CA327, as amended by PD DPWH Secretary denied the money claims of
1445, which requires that all money claims petitioners even after the DPWH Auditor
against the government must first be filed interposed no objection to the payment and
with the the DBM had ordered the release of the
Commission on Audit before suit is instituted amount under a corresponding Advise of
in court. See: Sayson v. Singzon, 54 SCRA 282. Allotment it issued.
The Department of Agriculture may be sued Where in Ministerio, the Court said that the
for money claims based on a contract entered doctrine cannot serve as an instrument for

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MENDIOLA, MANILA
perpetrating an injustice on a citizen, in this However, the rules of International Law are
case the Supreme Court declared that it is just not petrified; they are constantly developing
as and evolving. And because the activities of
important, if not more so, that there be states have multiplied, it has been necessary
fidelity to legal norms on the part of to distinguish them — between sovereign and
officialdom if the rule of law were to be governmental acts (jure imperii) and private,
maintained. commercial and proprietary acts (jure
gestionis). The result is that State immunity
In Santiago v. Republic, 87 SCRA 294, an action now extends only to acts jure imperii. The
for the revocation of a donation because of restrictive application of State immunity is
the failure of the defendant to comply with now the rule in the United States, the United
stipulated conditions was allowed, inasmuch Kingdom and other states in western Europe.
as the action did not involve a money (See Coquia and Defensor-Santiago, Public
claim. International Law, pp. 207-209 [1984].)
The restrictive application of State immunity

b) Implied Consent. When the State is proper only when the proceedings arise out
commences litigation, it becomes vulnerable of commercial transactions of the foreign
to a counterclaim [See: Froilan v. Pan Oriental sovereign, its commercial activities or
Shipping, G.R. No. L-6060, Sept. 30, 1950]. economic affairs. Stated differently, a State
Intervention by the State would constitute may be said to have descended to the level of
commencement of litigation, except when the an individual and can thus be deemed to have
State intervenes not for the purpose of asking tacitly given its consent to be sued only when
for any affirmative relief, but only for the it enters into business contracts. It does not
purpose of resisting the claim precisely apply where the contract relates to the
because of immunity from suit [Lim v. exercise of its sovereign functions. In this case
Brownell, 107 Phil. 345], 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
UNITED STATES OF AMERICA VS. RUIZ dedicated to commercial or business
136 SCRA 487 (1985) purposes.
CASE DOCTRINE: RESTRICTIVE THEORY OF That the correct test for the application of
STATE IMMUNITY. The traditional rule of State immunity is not the conclusion of a
State immunity exempts a State from being contract by a State but the legal nature of the
sued in the courts of another State without its act is shown in Syquia vs. Lopez, 84 Phil. 312
consent or waiver. This rule is a necessary (1949). In that case the plaintiffs leased three
consequence of the principles of apartment buildings to the United States of
independence and equality of States. America for the use of its military officials.
The plaintiffs sued to recover possession of

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MENDIOLA, MANILA
the premises on the ground that the term of

the leases had expired, They also asked for ISSUE: Whether or not the US may be sued?
increased rentals until the apartments shall
have been vacated. HELD:
No. The traditional rule of State immunity
exempts a State from being sued in the courts
UNITED STATES OF AMERICA VS. RUIZ of another State without its consent or waiver.
This rule is a necessary consequence of the
FACTS: principles of independence and equality of
Petitioner invited the submission of bids for States. However, the rules of International Law
repair of its wharves and shoreline in the are not petrified; they are constantly
Subic Bay Area. Eligion and Co. responded to developing and evolving. And because the
the invitation and submitted bids. Said activities of states have multiplied, it has been
company was requested by telegram to necessary to distinguish them — between
confirm its price proposals and for the name sovereign and governmental acts (jure imperii)
of its bonding company, and from which it and private, commercial and proprietary acts
complied. (jure gestionis). The result is that State
immunity now extends only to acts jure imperii.
Later, the United States, through its agents, The restrictive application of State immunity
informed said company that it was not is now the rule in the United
qualified to receive an award at the project States, the United Kingdom and other states
for the poorly completed projects it awarded in western Europe. (See Coquia and Defensor-
to third parties. The company sued petitioner Santiago, Public International Law, pp. 207-
for specific performance and if no longer 209 [1984].)
possible, for damages. It also asked for a writ
of preliminary injunction to restrain the The restrictive application of state
defendants from entering into contracts with immunity is proper only when the
others. The United States entered a special proceedings arise out of commercial
appearance for the purpose only of transactions of the foreign sovereign, its
questioning the jurisdiction of the court over commercial activities or economic affairs.
the subject matter of the complaint and the Stated differently, a state may be said to have
persons of the defendants, the subject matter descended to the level of an individual and
of the complaint being acts and omissions of can be thus deemed to have tacitly given its
the individual defendants as agents of the consent to be sued only when the contract
defendant United States of America, a foreign relates to the exercise of its sovereign
sovereign which has not given its consent to functions.
this suit or any other suit for the cause of
action asserted in the complaint. US filed a In this case, the projects are an integral part
motion to dismiss and opposed the writ. The of the naval base which is devoted to the
trial court denied the motion and issued a defense of both the US and the Philippines,
writ. undisputed a function of the government of

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MENDIOLA, MANILA
the highest order, they are not utilized for nor held that contracts entered into by a
dedicated to commercial or business sovereign state in connection with the
purposes. The correct test for the establishment of a diplomatic mission,
application of State immunity is not the including contracts for the upkeep or
conclusion of a contract by a State but the maintenance of air conditioning units,
legal nature of the act is shown in Syquia vs. generator sets, electrical facilities, water
Lopez, 84 Phil. 312 (1949). In that case the heaters and water motor pumps of the
plaintiffs leased three apartment buildings to embassy and the Ambassador’s residence, are
the United States of America for the use of its contracts in jure imperii. The fact that the
military officials. The plaintiffs sued to contract contains a provision that any legal
recover possession of the premises on the action arising out of the agreement shall be
ground that the term of the leases had settled according to the laws of the
expired, They also asked for increased rentals Philippines and by a specified court of the
until the apartments shall have been vacated. Philippines does not necessarily mean a
waiver of the state’s sovereign immunity from
suit.
FROM NACHURA:
When the State enters into a business
contract. See: U.S. v. Ruiz, 136 SCRA 487, Similarly, in a companion case, U.S. v. Rodrigo,
where the Supreme Court distinguished a contract for restaurant services within the
between contracts entered into by the State in Camp John Hay Air Station was likewise held
jure imperii (sovereign acts) and in jure commercial in character.
gestionis (commercial or proprietary acts).
Where the contract is in pursuit of a Note, however, that in Republic v.
sovereign activity, there is no waiver of Sandiganbayan, 204 SCRA 212, the Court held
immunity, and no implied consent may be that even if, in exercising the power of
derived therefrom. eminent domain, the State exercises a power
jus imperii, as distinguished from its
In U. S. v. Ruiz, it was held that the contract for proprietary right of jus gestionis, where
the repair of wharves was a contract in jus property has been taken without just
imperii, because the wharves were to be used compensation being paid, the defense of
in national defense, a governmental function. immunity from suit cannot be set up in an
In JUSMAG Phil. v. NLRC, 239 SCRA 224, the action for payment by the owner. See
engagement of the services of private Amigable v. Cuenca, 43 SCRA 360.
respondent was held to be performance of a
governmental function by JUSMAG, on behalf In Republic (PCGG) v. Sandiganbayan, G.R. No.
of the United States. 129406, March 6, 2006, 227 shares in Negros
Occidental Golf and Country Club, Inc.
Accordingly, JUSMAG may not be sued under (NOGCCI) owned and registered in the name
such a contract. In Republic of Indonesia v. of private respondent Benedicto were
Vinzon, G.R. No. 154705, June 26, 2003, it was sequestered and taken over by PCGG fiscal
agents. In a suit for payment of dues of the

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MENDIOLA, MANILA
sequestered shares, PCGG raised, among certification to that effect instead of

others, the defense of immunity from suit. submitting a "suggestion" (O'Connell, I
The Supreme Court held that by entering into International Law 130 [1965]; Note:
a Compromise Agreement with Benedicto, the Immunity from Suit of Foreign Sovereign
Republic stripped itself of its immunity and Instrumentalities and Obligations, 50 Yale
placed itself in the same level as its adversary. Law Journal 1088 [1941]).
When the State enters into a contract through
its officers or agents, in furtherance of a In the Philippines, the practice is for the
legitimate aim and purpose and pursuant to foreign government or the international
constitutional legislative authority, whereby organization to first secure an executive
mutual or reciprocal benefits accruse and endorsement of its claim of sovereign or
rights and obligations arise therefrom, the diplomatic immunity. But how the Philippine
State may be sued even without its express Foreign Office conveys its endorsement to the
consent, precisely because by entering into a courts varies. In International Catholic
contract, the sovereign descends to the level Migration Commission v. Calleja, 190 SCRA
of the citizen. 130 (1990), the Secretary of Foreign Affairs
just sent a letter directly to the Secretary of
Labor and Employment, informing the latter
THE HOLY SEE VS. DEL ROSARIO JR that the respondent- employer could not be
238 SCRA 524 (1994) sued because it enjoyed diplomatic immunity.
In World Health Organization v. Aquino, 48
CASE DOCTRINE: PROCEDURE IN INVOKING SCRA 242 (1972), the Secretary of Foreign
STATE IMMUNITY BY FOREIGN STATES. - In Affairs sent the trial court a telegram to that
Public International Law, when a state or effect. In Baer v. Tizon, 57 SCRA 1 (1974), the
international agency wishes to plead U.S. Embassy asked the Secretary of Foreign
sovereign or diplomatic immunity in a foreign Affairs to request the Solicitor General to
court, it requests the Foreign Office of the make, in behalf of the Commander of the
state where it is sued to convey to the court United States Naval Base at Olongapo City,
that said defendant is entitled to immunity. Zambales, a "suggestion" to respondent Judge.
The Solicitor General embodied the
In the United States, the procedure followed "suggestion" in a Manifestation and
is the process of "suggestion," where the Memorandum as amicus curiae.
foreign state or the international organization
sued in an American court requests the TWO CONFLICTING CONCEPTS OF
Secretary of State to make a determination as SOVEREIGN IMMUNITY. - There are two
to whether it is entitled to immunity. If the conflicting concepts of sovereign immunity,
Secretary of State finds that the defendant is each widely held and firmly established.
immune from suit, he, in turn, asks the According to the classical or absolute theory,
Attorney General to submit to the court a a sovereign cannot, without its consent, be
"suggestion" that the defendant is entitled to made a respondent in the courts of another
immunity. In England, a similar procedure is sovereign. According to the newer or
followed, only the Foreign Office issues a restrictive theory, the immunity of the

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MENDIOLA, MANILA
sovereign is recognized only with regard to government to take up with the Holy See the
public acts or acts jure imperii of a state, but validity of its claims. Of course, the Foreign
not with regard to private acts or acts jure Office shall first make a determination of the
gestionis (United States of America v. Ruiz, impact of its espousal on the relations
136 SCRA 487 [1987]; Coquia and Defensor- between the Philippine government and the
Santiago, Public International Law 194 Holy See (Young, Remedies of Private
[1984]). Claimants Against Foreign States, Selected
Readings on Protection by Law of Private
In the absence of legislation defining what Foreign Investments 905, 919 [1964]). Once
activities and transactions shall be considered the Philippine government decides to espouse
"commercial" and as constituting acts jure the claim, the latter ceases to be a private
gestionis, we have to come out with our own cause.
guidelines, tentative they may be.
According to the Permanent Court of
Certainly, the mere entering into a contract by International Justice, the forerunner of the
a foreign state with a private party cannot be International Court of Justice:
the ultimate test. Such an act can only be the
start of the inquiry. The logical question is "By taking up the case of one of its subjects
whether the foreign state is engaged in the and by reporting to diplomatic action or
activity in the regular course of business. If international judicial proceedings on his
the foreign state is not engaged regularly in a behalf, a State is in reality asserting its own
business or trade, the particular act or rights — its right to ensure, in the person of
transaction must then be tested by its nature. its subjects, respect for the rules of
If the act is in pursuit of a sovereign activity, international law (The Mavrommatis
or an incident thereof, then it is an act jure Palestine Concessions, 1 Hudson, World Court
imperii, especially when it is not undertaken Reports 293, 302 [1924]).
for gain or profit.
REMEDY OF THE COMPLAINANTS WHEN

THE STATE IMMUNITY IS INVOKED. - THE HOLY SEE VS. DEL ROSARIO JR
Private respondent is not left without any
legal remedy for the redress of its grievances. FACTS:
Under both Public International Law and Lot 5-A is registered under the name of the
Transnational Law, a person who feels petitioner The Holy See. This lot is contiguous
aggrieved by the acts of a foreign sovereign to lots 5-B and 5-D registered in the name of
can ask his own government to espouse his Philippine Realty Corporation (PRC). These
cause through diplomatic channels. three lots were sold through an agent Msgr.
Domingo Cirilos Jr. to Ramon Licup. Licup
Private respondent can ask the Philippine assigned his rights to private respondent
government, through the Foreign Office, to Starbright Sales Ent. Inc. (SSEI). Due to refusal
espouse its claims against the Holy See. Its of the squatters to vacate the lots, a dispute
first task is to persuade the Philippine arose as to who of the parties has the

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MENDIOLA, MANILA
responsibility of eviction and clearing the theory, the immunity of the sovereign is
land. SSEI insists that petitioner should clear recognized only with regard to public acts or
the property of the squatters. Petitioner acts jure imperii of a state, but not with
refused and proposed that either SSEI regard to private acts or acts jure gestionis
undertake the eviction or that the earnest (United States of America v. Ruiz, 136 SCRA
money be returned. Msgr. Cirilos returned the 487 [1987]; Coquia and Defensor-Santiago,
P100,000.00 earnest money, and the property Public International
was sold to Tropicana Law 194 [1984]).
Properties and Development Corporation The restrictive theory, which is intended to

(Tropicana). SSEI filed suit for annulment of be a solution to the host of problems
sale, specific performance and damages involving the issue of sovereign immunity,
against Msgr. Cirilos, PRC, and Tropicana.The has created problems of its own. Legal
petitioner and Msgr. Cirilos moved to dismiss treatises and the decisions in countries which
for lack of jurisdiction based on sovereign follow the restrictive theory have difficulty in
immunity from suit. It was denied on the characterizing whether a contract of a
ground that petitioner “shed off its sovereign sovereign state with a private party is an act
immunity by entering into the jure gestionis or an act jure imperii. The
business contract” in question.A motion for restrictive theory came about because of the
reconsideration was also denied. Hence, this entry of sovereign states into purely
special civil action for certiorari. commercial activities remotely connected
with the discharge of governmental functions.
ISSUE: Did the Holy See properly invoke This is particularly true with respect to the
sovereign immunity for its non-suability? Communist states which took control of
nationalized business activities and
HELD: international trading. This Court has
YES. In the case at bar, lot 5-A was acquired as considered the following transactions by a
a donation from the archdiocese of Manila for foreign state with private parties as acts jure
the site of its mission or the Apostolic imperii:
Nuniciature in the Philippines. The
subsequent disposal was made because the (1) the lease by a foreign government of
squatters living thereon made it impossible apartment buildings for use of its military
for petitioner to use it for the purpose of the officers
donation. Petitioner did not sell lot 5-A for (Syquia v. Lopez, 84 Phil. 312 [1949];
profit or gain. There are two conflicting
concepts of sovereign immunity, each widely (2) the conduct of public bidding for the
held and firmly established. According to the repair of a wharf at a United States Naval
classical or absolute theory, a sovereign Station (United States of America v. Ruiz,
cannot, without its consent, be made a supra.); and
respondent in the courts of another sovereign.
According to the newer or restrictive

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MENDIOLA, MANILA
(3) the change of employment status of base trade, the particular act or transaction must
employees (Sanders v. Veridiano, 162 SCRA then be tested by its nature. If the act is in
88 [1988]). pursuit of a sovereign activity, or an incident
thereof, then it is an act jure imperii,
On the other hand, this Court has considered especially when it is not undertaken for gain
the following transactions by a foreign state or profit. As held in United States of America v.
with private parties as acts jure gestionis: Guinto, (supra): "There is no question that the
United States of America, like any other state,
(1) the hiring of a cook in the recreation will be deemed to have impliedly waived its
center, consisting of three restaurants, a non-suability if it has entered into a contract
cafeteria, a bakery, a store, and a coffee and in its proprietary or private capacity. It is only
pastry shop at the John Hay Air Station in when the contract involves its sovereign or
Baguio City, to cater to American servicemen governmental capacity that no such waiver
and the general public (United States of may be implied."
America v. Rodrigo, 182 SCRA
644 [1990]); and In the case at bench if petitioner has bought
and sold lands in the ordinary course of a real
(2) the bidding for the operation of barber estate business, surely the said transaction
shops in Clark Air Base in Angeles City can be categorized as an act jure gestionis.
(United States of America v. Guinto, 182 SCRA However, petitioner has denied that the
644 [1990]). The operation of the restaurants acquisition and subsequent disposal of Lot 5-
and other facilities open to the general public A were made for profit but claimed that it
is undoubtedly for profit as a commercial and acquired said property for the site of its
not a governmental activity. By entering into mission or the Apostolic Nunciature in the
the employment contract with the cook in the Philippines. Private respondent failed to
discharge of its proprietary function, the dispute said claim.
United States government impliedly divested
itself of its sovereign immunity from suit. Under Art.31(A) of the 1961 Vienna
Convention on Diplomatic Relations, a
In the absence of legislation defining what diplomatic envoy is granted immunity from
activities and transactions shall be considered the civil and administrative jurisdiction of the
"commercial" and as constituting acts jure receiving state over any real action relating to
gestionis, we have to come out with our own private immovable property situated in the
guidelines, tentative they may be. Certainly, territory of the receiving state which the
the mere entering into a contract by a foreign envoy holds on behalf of the sending state for
state with a private party cannot be the the purposes of the mission. If this immunity
ultimate test. Such an act can only be the start is provided for a diplomatic envoy with all the
of the inquiry. The logical question is whether more reason should immunity be recognized
the foreign state is engaged in the activity in as regards the sovereign itself, which in this
the regular course of business. If the foreign case is the Holy See.
state is not engaged regularly in a business or

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MENDIOLA, MANILA
Moreover the Department of the Foreign in bad faith or beyond the scope of his
Affairs has formally intervened and officially authority or jurisdiction.
certified that the Embassy of the Holy See is a
duly accredited diplomatic missionary to the
Republic of the Philippines and as such is - In Minucherv. Court of Appeals, G.R. No.
exempt from local jurisdiction and entitled to 142396, February 11, 2003, it was
all the rights, privileges and immunities of a sufficiently established that
diplomatic mission or embassy in this court. respondent Arthur Scalzo an agent of
The determination of the executive arm of the the US Drug Enforcement Agency, was
government that a state or instrumentality is tasked to conduct surveillance on
entitled to sovereign or diplomatic immunity suspected drug activities within the
is a political question that is conclusive upon country, and having ascertained the
the courts. Where the plea of immunity is target, to inform the local law
reacquired and affirmed by the executive enforcers who would then be
branch, it is the duty of the courts to accept expected to make the arrest. In
this claim so as not to embarrass the conducting this surveillance and later,
executive arm of the government in acting as the poseur- buyer during the
conducting the country’s foreign relations. buy-bust operation, and then
becoming a principal witness in the
criminal case against Minucher, Scalzo
HOW ABOUT FOREIGN STATES, CAN THEY can hardly be said to have acted
ALSO EXERCISE IMMUNITY FROM SUIT? beyond the scope of his official
functions or duties. He should,
- YES. By virtue of the latin maxim “ par therefore, be accorded diplomatic
in parem non habet imperium” which immunity.
means that an equal has no authority
over the equal.
- Immunity from suit also applies to HOW CAN FOREIGN STATE INVOKE STATE
officers of foreign state. IMMUNITY?
- There are three ways:
- A foreign agent, operating within a 1. Suggestion
territory, can be cloaked with 2. Department of Foreign Affairs
immunity from suit but only as long as 3. Letter or manifestation.
it can be established that he is acting
within the directives of the sending Note: The Philippines has no formal
State. The cloak of protection is procedure.
removed the moment the foreign
agent is sued in his individual capacity, THE UNITED NATIONS, as well as its organs
as when he is sought to be made liable and specialized agencies, are likewise beyond
for whatever damage he may have the jurisdiction of local courts [Convention on
caused by his act done with malice or Privileges and Immunities of the United
Nations; Convention on Privileges and

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MENDIOLA, MANILA
Immunities of Specialized Agencies of the

United Nations; World Health Organization v. WHAT IS CA 3083?
Aquino, supra.].
ACT NO. 3083
- The invocation by private respondents of
the doctrine of estoppel is unavailing, because AN ACT DEFINING THE CONDITIONS UNDER
estoppel does not confer jurisdiction on a WHICH THE GOVERNMENT OF THE
tribunal that has none over a cause of action. PHILIPPINE ISLANDS MAY BE SUED
The Tijam v. Sibonghanoy, 23 SCRA 29, ruling
cannot apply to parties which enjoy foreign
and diplomatic immunity [SEAFDEC-
Aquaculture v. NLRC, 206 SCRA 283]. SECTION 1. Complaint against
Government. — Subject to the provisions of
this Act, the Government of the Philippine
Islands hereby consents and submits to be
WHAT IS THE REMEDY OF PRIVATE sued upon any moneyed claim involving
CITIZEN AGAINST FOREIGN STATE? liability arising from contract, expressed or
- The state will lobby the claim through implied, which could serve as a basis of civil
diplomatic channels (holy see) action between private parties.
- Doctrine of State Immunity- Foreign
State invokes immunity SECTION 2. A person desiring to
- What is the remedy -( Party can ask avail himself of the privilege herein conferred
the Philippine Government through must show that he has presented his claim to
Foreign Office to espouse its claims. - the Insular Auditor i[i]1 and that the latter
( Executive department to raise the did not decide the same within two months
issue). from the date of its presentation.
SECTION 3. Venue. — Original

WHAT ARE THE FORMS OF EXPRESS actions brought pursuant to the authority
CONSENT? conferred in this Act shall be instituted in the
Court of First Instance of the City of Manila
- There are two (2) forms:
or of the province were the claimant resides,
1. General Law: CA3083; CA 327 at the option of the latter, upon which court
2. Special Law – See Merritt Case exclusive original jurisdiction is hereby
conferred to hear and determine such actions.
NOTE: If the foreign state does not consent,
cdpr
wala na magagawa.
SECTION 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.

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MENDIOLA, MANILA
SECTION 5. When the Government SECTION 9. This Act shall take

of the Philippine Island is plaintiff in an effect on its approval.
action instituted in any court of original
jurisdiction, the defendant shall have the Approved, March 16, 1923.
right to assert therein, by way of set-off or
counterclaim in a similar action between
private parties.
WHAT IS THE NATURE OF THE CONTRACT?
SECTION 6. Process in actions
brought against the Government of the - It may be sovereign, meaning there is
Philippine Islands pursuant to the authority implied consent; it may also be
granted in this Act shall be served upon the proprietary in nature which means no
Attorney-General ii[ii]2 whose duty it shall be consent.
to appear and make defense, either himself
or through delegates.
IS THERE ANYTHING IN THE LAW THAT
SECTION 7. Execution. — No IMPLIES CONSENT ONLY IF THE
execution shall issue upon any judgment CONTRACTS PERTAIN TO PROPRIETARY
rendered by any court against the FUNCTIONS?
Government of the Philippine Islands under
the provisions of this Act; but a copy thereof - Yes. Which could serve as a basis for
duly certified by the clerk of the Court in civil action between private parties.
which judgment is rendered shall be
transmitted by such clerk to the Governor- CA 327
General, iii[iii]3 within five days after the
same becomes final. AN ACT FIXING THE TIME WITHIN WHICH
THE AUDITOR GENERAL SHALL RENDER HIS
SECTION 8. Transmittal of Decision. DECISIONS AND PRESCRIBING THE MANNER
— The Governor-General, iv [iv]4 at the OF APPEAL THEREFROM
commencement of each regular session of the
Legislature, v[v]5 shall transmit to that body Section 1. In all cases involving the settlement
for appropriate action all decisions so of accounts or claims, other than those of
received by him, and if said body determine accountable officers, the Auditor General shall
that payment should be made, it shall act and decide the same within sixty days,
appropriate the sum which the Government exclusive of Sundays and holidays, after their
has been sentenced to pay, including the presentation. If said accounts or claims need
same in the appropriations for the ensuing reference to other persons, office or offices, or
year. 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

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MENDIOLA, MANILA
accountable officers, the Auditor General shall authorities relied on for reversing such
act on the same within one hundred days after decision.
their submission, Sundays and holidays
excepted. Section 3. This Act shall take effect upon its
approval.
In case of accounts or claims already submitted
to but still pending decision by the Auditor Approved, June 18, 1938.
General on or before the approval of this Act,
the periods provided in this section shall
commence from the date of such approval. - Express consent through the act of
the LEGISLATIVE BODY – See
Section 2. The party aggrieved by the final Republic vs. Feliciano
decision of the Auditor General in the sua
settlement of an account for claim may, within TYPES OF IMPLIED CONSENT:
thirty days from receipt of the decision, take an - Commences litigation to seek
appeal in writing: affirmative relies
- Enters into a contract in its
(a) To the President of the United States, proprietary capacity
pending the final and complete withdrawal of
her sovereignty over the Philippines, or WHAT ARE THE DIFFERENCE OF
SUIABILITY BASED ON THE
(b) To the President of the Philippines, or PERFORMANCE OF PROPRIETARY
FUNCTIONS AND SUABILITY BASED IN
(c) To the Supreme Court of the Philippines if ENTERING IN TO A CONTRACT IN
the appellant is a private person or entity. PROPRIETARY CAPACITY?
- The latter ids more appropriate and
If there are more than one appellant, all applicable to foreign states.
appeals shall be taken to the same authority (restrictive theory; see case of holy
resorted to by the first appellant. see)
From a decision adversely affecting the SUABILITY IS DIFFERENT FROM

interests of the Government, the appeal may be LIABILITY; UP TO WHAT STAGE DOES TE
taken by the proper head of the department or WAIVER OPERATES?
in case of local governments by the head of the - Up to the rendition of judgment
office or branch of the Government
immediately concerned. WHY DOES EXECUTION REQUIRE
ANOTHER WAIVER?
The appeal shall specifically set forth the - General Rule: Public funds can only be
particular action of the Auditor General to issues upon appropriation
which exception is taken with the reasons and

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MENDIOLA, MANILA
- Exception: Public funds may be Services, Inc. v. Court of Appeals, 214

garnished whom specifically SCRA 286, the suit for damages filed
earmarked for the judgment. against the PC Chief and the PC-SUSIA
would require an affirmative act of
HYPO: A and B; A won and B has money in appropriation should damages be
a government agency, May such money be awarded, and is, therefore, a suit
garnished? against the State.
- No. In that case, the government
becomes a FORCED INTERVENOR.
What cannot be done directly cannot
be done indirectly (PNB vs. FROM NACHURA:
PABALAN) Scope of Consent. Consent to be sued does
not include consent to the execution of
judgment against it.
WHAT ARE THE TEST TO DETERMINE IF a) Such execution will require another waiver,
SUIT IS AGAINST THE STATE? because the power of the court ends when the
- On the assumption that decision is judgment is rendered, since government
rendered against the public officer or funds and properties may not be seized under
agency impleaded, will the writs of execution or garnishment, unless
enforcement thereof require an such,disbursement is covered by the
affirmative act from the State, such as corresponding appropriation as required by
the appropriation of the needed law [Republic v. Villasor, 54 SCRA 84;
amount to satisfy the judgment? If so, Department of Agriculture v. NLRC, 227 SCRA
then it is a suit against the State. See: 693].
Sanders v. Veridiano, 162 SCRA 88;
Republic v. Feliciano, 148 SCRA 424. Thus, in Larkins v. NLRC, 241 SCRA 598,
considering that the employer of private
- Tan v. Director of Forestry, 125 SCRA respondents was not Lt. Col. Frankhauser or
302, the Supreme Court said that State the petitioner but the U.S. Government which,
immunity from suit may be invoked as by right of sovereign power, operated and
long as the suit really affects the maintained the dormitories at the Clark Air
property, rights or interests of the Base for USAF members, the awards (of
State and not merely those of the monetary claims to the private respondents)
officers nominally made party will have to be satisfied by the U.S.
defendants. In this case, the Court said Government. Without its consent the
that the promotion of public welfare properties of the U.S. Government may not be
and the protection of the inhabitants subject to execution.
near the public forest are property
rights and interests of the State. In b) But funds belonging to government
Veterans Manpower and Protective corporations (whose charters provide that

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MENDIOLA, MANILA
they can sue and be sued) that are deposited squarely within the exception, and the
with a bank are not exempt from garnishment amount may therefore be garnished.
[Philippine National Bank v. Pabalan, 83 SCRA
595; Rizal Commercial Bank v. De Castro, 168 ia) Be that as it may, in Municipality of Makati
SCRA 49]. In National Housing Authority v. v. Court of Appeals, 190 SCRA 206, it was held
Heirs of Quivelondo, G.R. No. 154411, June 19, that where the municipality fails or refuses,
2003, it was held that if the funds belong to a without justifiable reason, to effect payment
public corporation or a government- owned of a final money judgment rendered against it,
or controlled corporation which is clothed the claimant may avail of the remedy of
with a personality of its own, then the funds mandamus in order to compel the enactment
are not exempt from garnishment. This is so and approval of the necessary appropriation
because when the government enters into ordinance and the corresponding
commercial business, it abandons its disbursement of municipal funds to satisfy
sovereign capacity and is to be treated like the money judgment.
any other corporation. NHA is one such
corporation; thus, its funds are not exempt c) In Pacific Products v. Ong, 181 SCRA 536, the
from garnishment or execution. Supreme Court said that by the process of
garnishment, the plaintiff virtually sues the
i) However, in Municipality of San Miguel, garnishee for a debt due from the defendant.
Bulacan v. Fernandez, 130 SCRA 56, it was The debtor-stranger becomes a forced
held that funds of a municipality (although it intervenor; when served with the writ of
is an incorporated agency whose charter attachment, he becomes a party to the action.
provides that it can sue and be sued) are Money in the hands of government agency
public in character and may not be garnished (engaged in governmental functions), even if
unless there is a corresponding appropriation due to a third party, is not liable to creditors
ordinance duly passed by the Sangguniang of the third party through garnishment. To
Bayan. Thus, in City of Caloocan v. Allarde, G.R. allow this would be to allow a suit against the
No. 107271, September 10, 2003, the rule was State without the latter’s consent.
reiterated that all government funds
deposited with any official depositary bank of
the Philippine Government by any of its Suability not equated with outright liability.
agencies or instrumentalities, whether by Liability will have to be determined by the
general or special deposit, remain Court
government funds and may not be subject to on the basis of the evidence and the
garnishment or levy in the absence of a applicable law.
corresponding appropriation as required by
law. In this case, the City of Caloocan had a) In Merritt v. Government of the Philippine
already approved and passed Ordinance No. Islands, supra., while consent to be sued was
0134, Series of 1992, allocating the amount of granted through a special law, the
P439.377.14 for respondent Santiago’s back government was held not liable for damages,
salaries plus interest. Thus, this case fell because under the attendant circumstances

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MENDIOLA, MANILA
the government was not acting through a inconvenience that may be caused private
special agent. parties, the loss of governmental efficiency
and the obstacle to the performance of its
b) In Fontanilla v. Maliaman, 194 SCRA 486, multifarious functions are far greater if such a
the Supreme Court said that the National fundamental principle were abandoned and
Irrigation Administration is a government the availability of judicial remedy were not
agency with a juridical personality separate thus restricted. With the well known
and distinct from the government; it is a propensity on the part of our people to go to
corporate body performing proprietary court, at the least provocation, the loss of time
functions. Thus, the NIA may be held liable for and energy required to defend against law
damages caused by the negligent act of its suits, in the absence of such a basic principle
driver who was not a special agent. that constitutes such an effective obstacle,
This was reiterated in National Irrigation could very well be imagined."
Administration v. Court of Appeals, 214 SCRA
35. This fundamental postulate underlying the
1935 Constitution is now made explicit in the
revised charter. It is therein expressly
REPUBLIC VS. VILLASOR provided: "The State may not be sued without
54 SCRA 84 (1973) its consent." A corollary, both dictated by
logic and sound sense from such a basic
CASE DOCTRINE: FUNDS OF THE concept is that public funds cannot be the
GOVERNMENT ARE NOT SUBJECT TO object of a garnishment proceeding even if
GARNISHMENT. – It is a fundamental the consent to be sued had been previously
postulate of constitutionalism flowing from granted and the state liability adjudged. Thus
the juristic concept of sovereignty that the in the recent case of Commissioner of Public
state as well as its government is immune Highways v. San Diego, such a well-settled
from suit unless it gives its consent. It is doctrine was restated in the opinion of Justice
readily understandable why it must be so. In Teehankee: "The universal rule that where
the classic formulation of Holmes: "A the State gives its consent to be sued by
sovereign is exempt from suit, not because of private parties either by general or special
any formal conception or obsolete theory, but law, it may limit claimant's action `only up to
on the logical and practical ground that there the completion of proceedings anterior to the
can be no legal right as against the authority stage of execution' and that the power of the
that makes the law on which the right Courts ends when the judgment is rendered,
depends." Sociological jurisprudence supplies since government funds and properties may
an answer not dissimilar. So it was indicated not be seized under writs of execution or
in a recent decision, Providence Washington garnishment to satisfy such judgments, is
Insurance Co. v. Republic of the Philippines, based on obvious considerations of public
with its affirmation that "a continued policy. Disbursements of public funds must be
adherence to the doctrine of non-suability is covered by the corresponding appropriation
not to be deplored for as against the as required by law. The functions and public
services rendered by the State cannot be
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MENDIOLA, MANILA
allowed to be paralyzed or disrupted by the issued an order directing the sheriff to

diversion of public funds from their execute the said decision, and the
legitimate and specific objects, as corresponding alias writ of execution was
appropriated by law." Such a principle applies thus issued. Hence the sheriff served notices
even to an attempted garnishment of a salary of garnishment with several banks especially
that had accrued in favor of an employee. the monies due to the AFP in the form of
Director of Commerce and Industry v. deposits sufficient to cover the amount
Concepcion, speaks to that effect. Justice mentioned in the writ. PNB and Philippine
Malcolm as ponente left no doubt on that Veterans Bank received such notice. As
score. Thus: "A rule, which has never been certified by the AFP Comptroller, these funds
seriously questioned, is that money in the of the AFP with the said banks are public
hands of public officers, although it may be funds for the pensions, pay, and allowances of
due government employees, is not liable to its military and civilian personnel.
the creditors of these employees in the
process of garnishment. One reason is, that The petitioner, in this certiorari and
the State, by virtue of its sovereignty, may not prohibition proceedings, challenges the
be sued in its own courts except by express validity of the Order issued by Judge Villasor
authorization by the Legislature, and to declaring the decision final and executory and
subject its officers to garnishment would be subsequently issuing an alias writ of
to permit indirectly what is prohibited execution directed against the funds of the
directly. Another reason is that moneys AFP in pursuance thereof.
sought to be garnished, as long as they remain
in the hands of the disbursing officer of the ISSUE:
Government, belong to the latter, although May the writs of execution and notices of
the defendant in garnishment may be entitled garnishment be sued against public funds?
to a specific portion thereof. And still another
reason which covers both of the foregoing is HELD:
that every consideration of public policy NO. Although the State may give its consent to
forbids it." be sued by private parties, there is corollary
that public funds cannot be the object of
garnishment proceedings even if the consent
to be sued has been previously granted and
REPUBLIC VS. VILLASOR the state’s liability has been adjudged.
Thus in the case of Commission of Public

FACTS: Highways vs. San Diego, such a well-settled
A decision was rendered in a Special doctrine was restated in the opinion of Justice
Proceeding against the Republic of the Teehankee. The universal rule that where the
Philippines thereby confirming the state gives its consent to be sued by private
arbitration award of P1,712,396.40 in favor of parties either by general or special law, it may
respondent corporation. After the decision limit claimant’s action only up to the
became final and executory, respondent judge
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MENDIOLA, MANILA
completion of proceedings anterior to the explain in its defense, however, that a

stage of execution and that the power of the continued adherence to the doctrine of non-
courts ends when the judgment is rendered, suability cannot be deplored, for the loss of
since the government funds and properties governmental efficiency and the obstacle to
may not be seized under writs of execution or the performance of its multifarious functions
garnishment to satisfy such judgment, is would be far greater in severity than the
based on obvious considerations of public inconvenience that may be caused private
policy. Disbursement of public funds must be parties, if such fundamental principle is to be
covered by the corresponding appropriations abandoned and the availability of judicial
as required by law. The functions and public remedy is not to be accordingly restricted.
services rendered by the State cannot be
allowed to be paralyzed or disrupted by The rule, in any case, is not really absolute for
diversion of public funds from their it does not say that the state may not be sued
legitimate and specific object is appropriated under any circumstance. On the contrary, as
by law. correctly phrased, the doctrine only conveys,
"the state may not be sued without its
consent;" its clear import then is that the
DEPARTMENT OF AGRICULTURE VS. NLRC State may at times be sued. The States'
227 SCRA 693 (1993) consent may be given either expressly or
impliedly. Express consent may be made
CASE DOCTRINE: FORMS OF WAIVER OF through a general law or a special law. In this
IMMUNITY. - The basic postulate enshrined in jurisdiction, the general law waiving the
the constitution that "(t)he State may not be immunity of the state from suit is found in Act
sued without its consent," reflects nothing No. 3083, where the Philippine government
less than a recognition of the sovereign "consents and submits to be sued upon any
character of the State and an express money claim involving liability arising from
affirmation of the unwritten rule effectively contract, express or implied, which could
insulating it from the jurisdiction of courts. It serve as a basis of civil action between private
is based on the very essence of sovereignty. parties." Implied consent, on the other hand,
As has been aptly observed, by Justice Holmes, is conceded when the State itself commences
a sovereign is exempt from suit, not because litigation, thus opening itself to a
of any formal conception or obsolete theory, counterclaim or when it enters into a contract.
but on the logical and practical ground that In this situation, the government is deemed to
there can be no legal right as against the have descended to the level of the other
authority that makes the law on which the contracting party and to have divested itself
right depends. True, the doctrine, not too of its sovereign immunity. This rule, relied
infrequently, is derisively called "the royal upon by the NLRC and the private
prerogative of dishonesty" because it grants respondents, is not, however, without
the state the prerogative to defeat any qualification. Not all contracts entered into by
legitimate claim against it by simply invoking the government operate as a waiver of its
its non-suability. We have had occasion to non-suability; distinction must still be made
between one which is executed in the exercise
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MENDIOLA, MANILA
of its sovereign functions and another which Code, in relation to Act No. 3083, provides the
is done in its proprietary capacity. legal basis for the State liability but the
prosecution, enforcement or satisfaction
PROCEDURE IN ENFORCING THE thereof must still be pursued in accordance
LIABILITY OF THE STATE. - But, be that as it with the rules and procedures laid down in
may, the claims of private respondents, i.e., C.A. No. 327, as amended by P.D. 1445.
for underpayment of wages, holiday pay,
overtime pay and similar other items, arising When the State gives its consent to be sued, it
from the Contract for Security Services, does not thereby necessarily consent to an
clearly constitute money claims. Act No. 3083, unrestrained execution against it. Tersely put,
aforecited, gives the consent of the State to be when the State waives its immunity, all it
"sued upon any moneyed claim involving does, in effect, is to give the other party an
liability arising from contract, express or opportunity to prove, if it can, that the State
implied, . . ." Pursuant, however, to has a liability. In Republic vs. Villasor, this
Commonwealth Act ("C.A.") No. 327, as Court, in nullifying the issuance of an alias
amended by Presidential Decree ("P.D.") No. writ of execution directed against the funds of
1445, the money claim should first be the Armed Forces of the Philippines to satisfy
brought to the Commission on Audit. Thus, in a final and executory judgment, has explained,
Carabao, Inc., vs. Agricultural Productivity thus —
Commission, we ruled:
The universal rule that where the State gives
"(C)laimants have to its consent to be sued by private parties
prosecute their money claims against either by general or special law, it may limit
the Government under claimant's action "only up to the completion
Commonwealth Act 327, stating that of proceedings anterior to the stage of
Act 3083 stands now merely as the execution" and that the power of the Courts
general law waiving the State's ends when the judgment is rendered, since
immunity from suit, subject to its government funds and properties may not be
general limitation expressed in seized under writs of execution or
Section 7 thereof that 'no execution garnishment to satisfy such judgments, is
shall issue upon any judgment based on obvious considerations of public
rendered by any Court against the policy. Disbursements of public funds must be
Government of the (Philippines), and covered by the corresponding appropriation
that the conditions provided in as required by law. The functions and public
Commonwealth Act 327 for filing services rendered by the State cannot be
money claims against the Government allowed to be paralyzed or disrupted by the
must be strictly observed.' " diversion of public funds from their
legitimate and specific objects, as
We fail to see any substantial conflict or appropriated by law.
inconsistency between the provisions of C.A.
No. 327 and the Labor Code with respect to
money claims against the State. The Labor

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MENDIOLA, MANILA
DEPARTMENT OF AGRICULTURE VS. impliedly. Express consent may be made

NLRC through a general law waiving the immunity
of the State from suit which is found in Act
FACTS: 3083, where the Philippine government
The DAR and Sultan Security Agency entered “consents and submits to be sued upon any
into a contract for security services to be money claim involving liability arising from
provided by the latter to the said contract, express or implied, which could
governmental entity. Several guards of the serve as basis of civil action between private
agency assigned to the petitioner’s premises parties.” Implied consent on the other hand, is
filed a complaint for underpayment of wages, conceded when the State itself commences
non-payment of 13th month pay, uniform litigation, thus opening itself to counterclaim
allowances, night shift differential pay, or when it enters into a contract.
holiday pay, and overtime pay as well as for
damages, before the Regional Arbitration, In this situation, the government is deemed to
against the petitioner and the agency. The have descended to the level of the other
Executive Labor arbiter rendered a decision contracting party and to have divested itself
finding the petitioner and the agency jointly of its sovereign immunity. The rule relied
and upon by the NLRC is not, however, without
severally liable for the payment of the money qualification. Not all contracts entered into by
claims. The decision became final and the government operate as a waiver of its
executory. The Labor Arbiter then issued a non-suability. Distinction must still be made
writ of execution which resulted in the between one which was executed in the
property of the petitioner being levied. The exercise of its sovereign function and another
petitioner asserts the rule of non-suability of which is done in its proprietary capacity. In
the State. the instant case, the petitioner has not
pretended to have assumed a capacity apart
ISSUE: from its being a governmental entity when it
Can the Department of Agriculture be sued entered into the questioned contract, not that
under the contract entered with the agency? it could have in fact performed any act
proprietary in character, but be that as it may,
HELD: the claims of private respondents arising
YES. The basic postulate under Art. X section from the contract for security services clearly
3 of the Constitution that “the State may not constitute money claims for which Act 3083
be sued without its consent” is not absolute gives the consent of the state to be sued.
for it does not say that the State may not be
sued under any circumstances. On the However, when the State gives its consent to
contrary, as correctly phrased, the doctrine be sued, it does not thereby necessarily
only conveys “that the State may not be sued consent to an unrestricted execution against
without its consent.” Its import then is that it. When the State waives immunity, all it does,
the State may at times be sued. The State’s in effect, is to give the other party an
consent may be given either expressly or

Page | 43
MENDIOLA, MANILA
opportunity to prove, if it can, that the state PNB VS. PABALAN

has any liability.
FACTS:
A judgment was rendered against Philippine
PNB VS. PABALAN Virginia Tobacco Administration (PVTA).
83 SCRA 595 (1978) Judge Javier Pabalan issued a writ of
execution followed thereafter by a notice of
CASE DOCTRINE: garnishment of the funds of respondent PVTA
which were deposited with the Philippine
DOCTRINE OF STATE IMMUNITY FROM National Bank (PNB). PNB objected on the
SUIT; A GOVERNMENT OWNED AND constitutional law doctrine of non-suability of
CONTROLLED CORPORATION HAS a state. It alleged that such funds are public in
DISTINCT PERSONALITY OF ITS OWN; character.
FUNDS OF THE CORPORATE ENTITY MAY
BE PROCEEDED AGAINST. ISSUE: Was the contention of PNB correct?
The doctrine of non- suability cannot be HELD:

legally set forth as a bar or impediment to a NO. It is to be admitted that under the present
notice of garnishment. In National Shipyard Constitution, what was formerly implicit as a
and Steel Corporation v. Court of Industrial fundamental doctrine in constitutional law
Relations, 118 Phil. 782 (1963), it was has been set forth in express terms: “The
explicitly stated: "That allegation to the effect State may not be sued without its consent.” If
that the funds of the NASSCO are public funds the funds appertained to one of the regular
of the government, and that, as such the same departments or
may not be garnished, attached or levied offices in the government, then, certainly such
upon, is untenable for, as a government a provision would lie a bar to garnishment.
owned and controlled corporation, the Such is not the case here. Garnishment would
NASSCO has a personality of its own, distinct lie. The Supreme Court, in a case brought by
and separate from that of the Government. It the same petitioner precisely invoking such
has — pursuant to Section 2 of Executive doctrine, left no doubt that the funds of a
Order No. 356, dated October 23, 1950 . . ., public corporation
pursuant to which the NASSCO has been could properly be made the object of a notice
established — "all the powers of a of garnishment. It is well settled that when
corporation under the Corporation Law . . . " the government enters into commercial
Accordingly, it may sue and be sued and may business, its abandons its sovereign capacity
be subjected to court processes just like any and is to be
other corporation (Section 13, Act No. 1459, treated like any other corporation. (Manila
as amended.) Hotel Employees Association vs. Manila Hotel
Company)

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MENDIOLA, MANILA
HYPO: A and B; A won and B has money in 3[d].) As a government owned and controlled
a government agency, May such money be corporation, it has a personality of its own,
garnished? distinct and separate from that of the
- No. In that case, the government Government. (See National Shipyards and
becomes a FORCED INTERVENOR. Steel Corp. vs. CIR, et al., L-17874, August 31,
What cannot be done directly cannot 1963, 8 SCRA 781.) Moreover, the charter
be done indirectly (PNB vs. provision that the NPC can "sue and be sued
PABALAN) in any court" is without qualification on the
cause of action and accordingly it can include
Writ of Garnishment (WOG) , Attachment a tort claim such as the one instituted by
Can the courts issue a WOG against the funds petitioners.
of incorporated
agencies?
NO. PNB vs. Pabalan
How about unincorporated agency, are RAYO VS. CFI OF BULACAN

they entitled to DSI?
- Yes, as to sovereign acts FACTS:
Can UA impliedly waive their immunity? During the height of the infamous typhoon
- Yes Kading, the NPC, acting through its plant
superintendent, Benjamin Chavez, opened or
caused to be opened simultaneously all the
three floodgates of the Angat Dam.
RAYO VS. CFI OF BULACAN The many unfortunate victims of the man-
110 SCRA 460 (1981) caused flood filed with the respondent court
eleven complaints for damages against the
CASE DOCTRINE: GOVERNMENT OWNED NPC and Benjamin Chavez. NPC filed separate
AND CONTROLLED CORPORATION HAS A answers to each of the eleven complaints and
SEPARATE PERSONALITY INDEPENDENT OF invoked in each answer a special and
THE GOVERNMENT, AND THUS, THE affirmative defense that in the operation of
QUESTION OF SUABILITY MAY BE the Angat Dam, it is performing a purely
DETERMINED FROM ITS CHARTER. - It is not governmental function. Hence, it cannot be
necessary to write an extended dissertation sued without the express consent of the State.
on whether or not the NPC performs a The respondent court dismissed the case on
governmental function with respect to the the grounds that said defendant performs a
management and operation of the Angat Dam. purely governmental function in the
It is sufficient to say that the government has operation of the Angat Dam and cannot
organized a private corporation, put money in therefore be sued for damages in the instant
it and has allowed it to sue and be sued in any cases in connection therewith.
court under its charter. (R.A. No. 6395, Sec.

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MENDIOLA, MANILA
ISSUE: Was the NPC performing a the same character as said Bureau may, by
governmental function with respect to the law or by order of the (Secretary of Finance)
management and operation of the Angat Executive Secretary, be authorized to
Dam? undertake . . .." (Sec. 1644, Rev. Adm. Code.) It
has no corporate existence, and its
HELD: appropriations are provided for in the
YES. However, it is not necessary to General Appropriations Act. Designed to meet
determine whetherNPC performs a the printing needs of the Government, it is
governmental function with respect to the primarily a service bureau and is obviously,
management and operation of the Angat Dam. not engaged in business or occupation for
It is sufficient to say that the government has pecuniary profit.
organized a private corporation, put money in
it and has allowed itself to sue and be sued in Indeed, as an office of the Government,
any court under its charter. As a government without any corporate or juridical personality,
owned and controlled corporation, it has the Bureau of Printing cannot be sued. (Sec. 1,
personality of its own, distinct and separate Rule 3, Rules of Court.) Any suit, action or
from that of the government. Moreover, the proceeding against it, if it were to produce
charter provision that the NPC can sue and be any effect, would actually be a suit, action or
sued in any court is without qualification on proceeding against the Government itself, and
the cause of action as the one instituted by the rule is settled that the Government cannot
the petitioners. be sued without its consent, much less over
its objection. (See Metran vs. Paredes, 45 Off.
Gaz., 2835; Angat River Irrigation System, et
BUREAU OF PRINTING VS. BUREAU OF al. vs. Angat River Workers' Union, et al., G.R.
PRINTING EMPLOYEES ASSOCIATION Nos. L-10943-44, December 28, 1957).
1 SCRA 340 (1961)
It is true, as stated in the order complained of,
CASE DOCTRINE: GOVERNMENTAL that the Bureau of Printing receives outside
ENTITIES, THOUGH INCEDENTALLY jobs and that many of its employees are paid
PERFORMING PROPRIETARY FUNCTIONS, for overtime work on regular working days
ARE ENTITLED TO STATE IMMUNITY. - The and on holidays, but these facts do not justify
Bureau of Printing is an office of the the conclusion that its functions are
Government created by the Administrative "exclusively proprietary in nature." Overtime
Code of 1916 (Act No. 2657). As such work in the Bureau of Printing is done only
instrumentality of the Government, it when the interest of the service so requires
operates under the direct supervision of the (sec. 566, Rev. Adm. Code). As a matter of
Executive Secretary, Office of the President, administrative policy, the overtime
and is "charged with the execution of all compensation may be paid, but such payment
printing and binding, including work is discretionary with the head of the Bureau
incidental to those processes, required by the depending upon its current appropriations, so
National Government and such other work of that it cannot be the basis for holding that the
functions of said Bureau are wholly

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MENDIOLA, MANILA
proprietary in character. Anent the additional BUREAU OF PRINTING VS. BUREAU OF

work it executes for private persons, we find PRINTING EMPLOYEES ASSOCIATION
that such work is done upon request, as
distinguished from those solicited, and only FACTS:
"as the requirements of Government work Bureau of Printing Employees Association
will permit" (sec. 1654, Rev. Adm. Code), and filed a case against herein petitioners Bureau
"upon terms fixed by the Director of Printing, of Printing, Serafin Salvador, and Mariano
with the approval of the Department Head" Ledesma. The complaint alleged that Salvador
(sec. 1665, id.). As shown by the and Ledesma have been engaging in unfair
uncontradicted evidence of the petitioners, labor practices by interfering with, or
most of these works consist of orders for coercing the employees of the Bureau of
greeting cards during Christmas from Printing, particularly the members of the
government officials, and for printing of complaining association, in the exercise of
checks of private banking institutions. On their right to self-organization, and by
those greeting cards, the Government seal, of discriminating in regard to hiring and tenure
which only the Bureau of Printing is of their employment in order to discourage
authorized to use, is embossed, and on the them from pursuing their union activities.
bank checks, only the Bureau of Printing can Answering the complaint, Salvador and
print the reproduction of the official Ledesma denied the charges, and contended
documentary stamps appearing thereon. The that the Bureau of Printing has no juridical
volume of private jobs done, in comparison personality to sue and be sued.
with government jobs, is only one-half of 1
percent, and in computing the costs for work ISSUE: Can the Bureau of Printing be sued?
done for private parties, the Bureau does not
include profit, because it is not allowed to HELD:
make any. Clearly, while the Bureau of NO. As a government office, without any
Printing is allowed to undertake private juridical capacity, it cannot be sued. The
printing jobs, it cannot be pretended that it is Bureau of Printing is an instrumentality of the
thereby an industrial or business concern. government; it operates under the direct
The additional work it executes for private supervision of the Executive Secretary. It is
parties is merely incidental to its function, designed to meet the printing needs of the
and although such work may be deemed government. It is primarily service bureau. It
proprietary in character, there is no showing is obviously not engaged in business or
that the employees performing said occupation for pecuniary profit. It has no
proprietary function are separate and distinct corporate existence. Its appropriations are
from those employed in its general provided for in the budget. It is not subject to
governmental functions. the jurisdiction of the Court of Industrial
Relations.
Any suit, action or proceeding against the

Bureau of Printing would actually be a suit,

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MENDIOLA, MANILA
action or proceeding against the government function may be deemed proprietary, it is a

itself. The government cannot be sued necessary incident of the primary and
without its consent, much less over its governmental function of the Bureau of
objection. Customs, so that engaging in the same does
not necessarily render said Bureau liable to
suit. For otherwise, it could not perform its
MOBIL PHILS. EXPLORATION, INC. VS. governmental function without necessarily
CUSTOMS ARRASTRE SERVICE exposing itself to suit. Sovereign immunity,
18 SCRA 1120 (1966) granted as to the end, should not be denied as
to the necessary means to that end.
CASE DOCTRINE: PROPRIETARY
FUNCTIONS NECESSARY TO THE
GOVERNMENTAL PURPOSES OF THE MOBIL PHILS. EXPLORATION, INC. VS.
GOVERNMENT ENTITY ARE COVERED BY CUSTOMS ARRASTRE SERVICE
THE DOCTRINE OF STATE IMMUNITY. - The
situation here is not materially different. The FACTS:
Bureau of Customs, to repeat, is part of the Four cases of rotary drill parts were shipped
Department of Finance (Sec. 81, Rev. Adm. from abroad consigned to Mobil Philippines.
Code), with no personality of its own apart The Customs Arrastre later delivered to the
from that of the national government. Its broker of the consignee three cases only of
primary function is governmental, that of the shipment. Mobil Philippines Exploration
assessing and collecting lawful revenues from Inc. filed suit in the CFI against the Customs
imported articles and all other tariff and Arrastre Service and the Bureau of Customs
customs duties, fees, charges, fines and to recover the value of the undelivered cases
penalties (Sec. 602, R. A. 1937). To this plus other damages.
function, arrastre service is a necessary The defendants filed a motion to dismiss the
incident. For practical reasons said revenues complaint on the ground that not being a
and customs duties can not be assessed and person under the law, defendants cannot be
collected by simply receiving the importer's sued. After the plaintiff opposed the motion,
or ship agent's or consignee's declaration of the court dismissed the complaint on the
merchandise being imported and imposing ground that neither the Customs Arrastre
the duty provided in the Tariff law. Customs Service nor the Bureau of Customs is suable.
authorities and officers must see to it that the
declaration tallies with the merchandise ISSUE: Can the Customs Arrastre Service or
actually landed. And this checking up requires the Bureau of Customs be sued?
that the landed merchandise be hauled from
the ship's side to a suitable place in the HELD:
customs premises to enable said customs NO. The Bureau of Customs, acting as part of
officers to make it, that is, it requires arrastre the machinery of the national government in
operation. the operations of arrastre service, pursuant to
express legislative mandate and a necessary
Clearly, therefore, although said arrastre
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MENDIOLA, MANILA
incident of its prime governmental function, primarily governmental functions.

is immune from suit, there being no statute to [NOTE: Even in the exercise of
the contrary. proprietary functions incidental to its
primarily governmental functions, an
The Bureau of Customs has no personality of unincorporated agency still cannot be
its own apart from that of the government. Its sued without its consent.]
primary function is governmental, that of
assessing and collecting lawful revenues from
imported articles and all other tariff and - But in Department of Agriculture v.
customs duties, fees, charges, fines, and NLRC, 227 SCRA 693, because of the
penalties. express consent contained in Act No.
3038 (where the Philippine
To this function, arrastre is a necessary Government “consents and submits to
incident. Although said arrastre function is be sued upon any money claim
deemed proprietary, it is necessarily an involving liability arising from
incident of the primary and governmental contract, express or implied, which
function of the Bureau of Customs, so that could serve as a basis of civil action
engaging in the same does not necessarily between private parties”), the
render said Bureau liable to suit. For Department of Agriculture could be
otherwise, it could not perform its sued on the contract for security
governmental function without necessarily services entered into by it (subject to
exposing itself to suit. Sovereign immunity prior filing of the claim with the
granted as to the end should not be denied as Commission on Audit), despite it
to the necessary means to that end. being an unincorporated agency
performing primarily governmental
Mobil Phils. Case: not suable functions.
Character Test- Why?
If proprietary:
BOC cannot perform services with arrastre suit will lie because when the State engages in
- indispensable = immune – government principally proprietary functions, then it
cannot perform its services if no arrastre descends to the level of a private individual,
and may, therefore, be vulnerable to suit. See:
National Airports Corporation v. Teodoro, 91
Phil. 207; Civil Aeronautics Administration v.
- Mobil Philippines Exploration v. Court of Appeals, 167 SCRA 28.
Customs Arrastre Service, 18 SCRA
1120, it was held that the Customs
Arrastre Service is merely an adjunct
of the Bureau of Customs. A suit
against it is, therefore, a suit against
the Bureau of Customs, an
unincorporated agency performing

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MENDIOLA, MANILA
CIVIL AERONAUTICS ADMINISTRATION VS control, maintain, and develop the MIA.

COURT OF APPEALS Judgment was rendered in his favor, and on
167 SCRA 28 (1988) appeal to the Court of Appeals, judgment was
affirmed.
CASE DOCTRINE: THE DOCTRINE OF STATE
IMMUNITY DOES NOT APPLY TO ISSUE: Whether the CAA, being an agency of
GOVERNMENT OWNED AND CONTROLLED the government, can be made a party
CORPORATIONS. - This doctrine has been defendant?
reaffirmed in the recent case of Malong v.
Philippine National Railways [G.R. No. L- HELD:
49930, August 7, 1985, 138 SCRA 63], where YES. Not all government entities whether
it was held that the Philippine National corporate or not are immune from suits.
Railways, although owned and operated by Immunity from suits is determined by the
the government, was not immune from suit as character of the objects for which the entity
it does not exercise sovereign but purely was organized. The CAA is not immune from
proprietary and business functions. suit it being engaged in functions pertaining
Accordingly, as the CAA was created to to a private entity.
undertake the management of airport
operations which primarily involve It is engaged in an enterprise which, far from
proprietary functions, it cannot avail of the being the exclusive prerogative of the state,
immunity from suit accorded to government may more than the construction of public
agencies performing strictly governmental roads, be undertaken by private concerns.
functions. The CAA was created not to maintain a
necessity of the government, but to run what
is essentially a business even if the revenues
be not its prime objective but rather the
CIVIL AERONAUTICS ADMINISTRATION promotion of travel and the convenience of
VS COURT OF APPEALS the traveling public.
FACTS:
Ernest Simke went to Manila International
Airport to meet his future son-in-law. While AIR TRANSPORTATION ADMINISTRATION
walking towards the viewing deck or the VS SPOUSES DAVID
terrace to get a better view of the incoming GR 159402 February 23, 2011
passengers, he slipped over an elevation
about four inches high, and he fell on his back CASE DOCTRINE: Sovereign Immunity;
and broke his thigh bone. He filed an action expropriation. The doctrine of sovereign
for damages based on quasi-delict with the immunity cannot be successfully invoked to
CFI of Rizal against the Civil Aeronautics defeat a valid claim for compensation arising
Administration or CAA as the entity from the taking without just compensation
empowered to administer, operate, manage, and without the proper expropriation

Page | 50
MENDIOLA, MANILA
proceedings being first resorted to of the or incidental to such function; it has not been
plaintiffs’ property. The SC cited the previous upheld in favor of the latter whose function
case of De los Santos v. Intermediate Appellate was not in pursuit of a necessary function of
Court where it ruled that the doctrine of government but was essentially a business. In
sovereign immunity was not an instrument this case, the juridical character of the Air
for perpetrating any injustice on a citizen. In Transportation Office (“ATO”) as an agency of
exercising the right of eminent domain, the the Government was not performing a purely
State exercised its jus imperii, as governmental or sovereign function, but was
distinguished from its proprietary rights, or instead involved in the management and
jus gestionis; yet, even in that area, where maintenance of the Loakan Airport, an
private property had been taken in activity that was not the exclusive prerogative
expropriation without just compensation of the State in its sovereign capacity. Hence,
being paid, the defense of immunity from suit the ATO had no claim to the State’s immunity
could not be set up by the State against an from suit.
action for payment by the owners.
Sovereign Immunity; sovereign function and AIR TRANSPORTATION

proprietary function. The immunity from suit ADMINISTRATION VS SPOUSES DAVID
is based on the political truism that the State,
as a sovereign, can do no wrong. Practical FACTS
considerations dictate the establishment of
immunity from suit in favor of the State. Sps. Ramos discovered that a portion of their
Otherwise, and the State is suable at the land (somewhere in Baguio) was being used
instance of every other individual,
as part of the runway and running shoulder of
government service may be severely
the Loakan Airport which is operated by ATO.
obstructed and public safety endangered
Sometime in 1995, respondents agreed to
because of the number of suits that the State
has to defend against. An unincorporated convey the subject portion by deed of sale to
government agency without any separate ATO in consideration of the amount of
juridical personality of its own enjoys Php778,150.00. However, ATO failed to pay
immunity from suit because it is invested despite repeated verbal and written demands.
with an inherent power of sovereignty. Thus, an action for collection against ATO was
Accordingly, a claim for damages against the filed by the respondents before the RTC.
agency cannot prosper; otherwise, the ATO’s primary contention was that the deed
doctrine of sovereign immunity is violated. of sale was entered into the performance of
However, the need to distinguish between an governmental functions. RTC ruled in favor of
unincorporated government agency the respondents. CA affirmed RTC. Hence, the
performing governmental function and one petition.
performing proprietary functions has arisen.
The immunity has been upheld in favor of the
former because its function is governmental

Page | 51
MENDIOLA, MANILA
ISSUE: which thereby assumed all of the ATOs

powers, duties and rights, assets, real and
Whether ATO could be sued without the personal properties, funds, and revenues.
State’s consent. Section 23 of R.A. No. 9497 enumerates the
corporate powers vested in the CAAP,
including the power to sue and be sued, to
RULING: enter into contracts of every class, kind and
description, to construct, acquire, own, hold,
SC dismissed the petition for lack of merit. operate, maintain, administer and lease
personal and real properties, and to settle,
The State’s immunity from suit does not under such terms and conditions most
extend to the petitioner (ATO) because it is an advantageous to it, any claim by or against it.
agency of the State engaged in an enterprise With the CAAP having legally succeeded the
that is far from being the State’s exclusive ATO pursuant to R.A. No. 9497, the
prerogative. The CA thereby correctly obligations that the ATO had incurred by
appreciated the juridical character of the ATO virtue of the deed of sale with the Ramos
as an agency of the Government not spouses might now be enforced against the
performing a purely governmental or CAAP.
sovereign function, but was instead involved
in the management and maintenance of the
Loakan Airport, an activity that was not the
exclusive prerogative of the State in its
sovereign capacity. Hence, the ATO had no MUN. OF SAN FERNANDO, LA UNION VS.
claim to the State’s immunity from suit. The JUDGE FIRME
SC further observes that the doctrine of 195 SCRA 692 (1991)
sovereign immunity cannot be successfully
invoked to defeat a valid claim for CASE DOCTRINE: THE SUABILITY OF
compensation arising from the taking without MUNICIPAL CORPORATIONS IS
just compensation and without the proper DETERMINED THROUGH THEIR CHARTER.
expropriation proceedings being first - Municipal corporations, for example, like
resorted to of the plaintiff’s property. provinces and cities, are agencies of the State
when they are engaged in governmental
Lastly, the issue of whether or not the ATO functions and therefore should enjoy the
could be sued without the States consent has sovereign immunity from suit. Nevertheless,
been rendered moot by the passage of they are subject to suit even in the
Republic Act No. 9497, otherwise known as performance of such functions because their
the Civil Aviation Authority Act of 2008. R.A. charter provided that they can sue and be
No. 9497 abolished the ATO and u nder its sued. (Cruz, Philippine Political Law, 1987
Transitory Provisions, R.A. No. 9497 Edition, p. 39)
established in place of the ATO the Civil
A distinction should first be made between
Aviation Authority of the Philippines (CAAP),
suability and liability. "Suability depends on
Page | 52
MENDIOLA, MANILA
the consent of the state to be sued, liability on respondents are heirs of the deceased
the applicable law and the established facts. Laureano Banina, Sr. On December 16, 1965,
The circumstance that a state is suable does a collision occurred involving a passenger
not necessarily mean that it is liable; on the jeep, a gravel and sand truck, and a dump
other hand, it can never be held liable if it truck of the Municipality of San Fernando, La
does not first consent to be sued. Liability is Union which was driven by Alfredo Bislig.
not conceded by the mere fact that the state Due to the impact, several passengers of the
has allowed itself to be sued. When the state jeep including Banina, Sr. died. The heir of
does waive its sovereign immunity, it is only Banina, Sr. instituted a complaint for damages
giving the plaintiff the chance to prove, if it against the owner and driver of the passenger
can, that the defendant is liable." (United jeep. However, the aforesaid defendant filed a
States of America v. Guinto, supra, p. 659- third party complaint against the petitioner
660). and the driver of the dump truck of the
petitioner.
Anent the issue of whether or not the
municipality is liable for the torts committed Thereafter, the private respondents amended
by its employee, the test of liability of the the complaint wherein the petitioner and its
municipality depends on whether or not the regular employee Alfredo Bislig were
driver, acting in behalf of the municipality, is impleaded for the first time as defendants.
performing governmental or proprietary Petitioner filed its answer and raised
functions. As emphasized in the case of Torio affirmative defenses such as lack of cause of
v. Fontanilla (G.R. No. L- 29993, October 23, action, non-suability of the state, prescription
1978. 85 SCRA 599, 606), the distinction of of cause of action, and the negligence of the
powers becomes important for purposes of owner and driver of the passenger jeep as the
determining the liability of the municipality proximate cause of the collision.
for the acts of its agents which result in an
injury to third persons. On October 10, 1979, the trial court rendered
a decision for the plaintiffs, and defendants
Municipality of san Fernando, La Union and
Alfredo Bislig are ordered to pay jointly and
MUN. OF SAN FERNANDO, LA UNION VS. severally the plaintiffs. The complaint against
JUDGE FIRME the driver and the owner of the passenger
jeep was dismissed. Petitioner filed a motion
for reconsideration and for a new trial.
FACTS: However, respondent judge issued another
Petitioner Municipality of San Fernando, La order denying the motion for reconsideration
Union, is a municipality corporation. of the order for having been filed out of time.
Respondent Judge Romeo N. Firme is Hence, this petition.
impleaded in his official capacity as the
presiding judge, while private ISSUE: Whether the municipality is liable for
the tort committed by its employee?

Page | 53
MENDIOLA, MANILA
HELD: ARE LOCAL GOVERNMENT UNIT

NO. The test of liability of the municipality UNINCORPORATED OR INCORPORATED?
depends on whether or not the driver acting Case of Municipality of San Fernando:
in behalf of the municipality is performing
governmental or proprietary functions. It has - determine character of agent to
already been remarked that municipal determine the liability of “special
corporations are suable because their agent”
charters grant them the - Determine if he’s acting within scope
competence to sue and be sued. Nevertheless, of functions
they are generally not liable for torts
committed by them in the discharge of
governmental functions and can be held Difference of unincorporated &
answerable only if it can be shown that they incorporated
were acting in a proprietary capacity. In Are incorporated agencies entitled to
permitting such entities to be sued, the state invoke DSI?
merely gives the claimants the right to show - Supposing Charter is silent? Same as
the defendant was not acting in its Unincorporated Agency – determine
governmental capacity when the injury was fr. >original charter (NOT Applicable)
inflicted or that the case comes under the
exceptions recognized by law. Failing this, the ➢ Corporation Code
claimants cannot recover. Supposing inc. agency was incorporated
under the Corporation Code & its AOI is silent
In the case at bar, the driver of the dump as to its suability: With power to sue and be
truck of the municipality insists that he was Sued Since incorporated government
on his way to Naguilan River to get a load of agencies have a separate personality, should
sand and gravel for the repair of the San they not have the rights accorded to the
Fernando municipal street. In the absence of government? --- Can we not say that since
any evidence to the contrary, the regularity of they are separate & distinct, DSI should not
the performance of official duty is presumed. apply to them?
Hence, the driver of the dump truck was
performing duties or tasks pertaining to his
office. After careful examination of existing SUITS AGAINST GOVERNMENT AGENCIES
laws and jurisprudence, we arrive at the
conclusion that the municipality cannot be Incorporated: If the charter provides that
held liable for the torts committed by its the agency can sue and be sued, then suit will
regular employee, who was then engaged in lie, including one for tort. The provision in the
the discharge of governmental functions. charter constitutes express consent on the
Hence, the death of the passenger, tragic and part of the State to be sued. See: PNB v. CIR, 81
deplorable though, it may be imposed on the SCRA 314; Rayo v. CFI of Bulacan, 110 SCRA
municipality no duty to pay the monetary 460; SSS v. Court of Appeals, 120 SCRA 707.
compensation.

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MENDIOLA, MANILA
Municipal corporations are agencies of the organization and operation of private

State when they are engaged in governmental detective, watchmen or security guard
functions and, therefore, should enjoy the agencies), and thus may not be sued without
sovereign immunity from suit. However, they consent. In Farolan v. Court of Tax Appeals,
are subject to suit even in the performance of 217 SCRA 298, the Supreme Court said that
such functions because their respective the Bureau of Customs, being an
charters provide that they can sue and be unincorporated agency without a separate
sued [Municipality of San Fernando, La Union juridical personality, enjoys immunity from
v. Judge Firme, 195 SCRA 692]. suit. It is invested with an inherent power of
sovereignty, namely the power of taxation; it
One of the corporate powers of local performs governmental functions. In
government units, as enumerated in Sec. 22,
Local Government Code, is the power to sue
and be sued. MUNICIPALITY OF SAN MIGUEL, BULACAN
VS. FERNANDEZ
In National Irrigation Administration v. Court 130 SCRA 56 (1984)
of Appeals, 214 SCRA 35, the Supreme Court
reiterated that NIAis a corporate body CASE DOCTRINE: FUNDS OF THE
performing proprietary functions, whose MUNICIPAL CORPORATIONS ARE EXEMPT
charter, P.D. 552, provides that it may sue and FROM EXECUTION. - In Tantoco vs.
be sued. Municipal Council of Iloilo, 49 Phil. 52, it was
iii) In Philippine National Railways v. held that "it is the settled doctrine of the law
Intermediate Appellate Court, 217 SCRA 401, it that not only the public property but also the
was held that although the charter of PNR is taxes and public revenues of such
silent on whether it may sue or be sued, it had corporations cannot be seized under
already been ruled in Malong v. PNR, 185 execution against them, either in the treasury
SCRA 63, that the PNR “is not performing any or when in transit to it. Judgments rendered
governmental function” and may, therefore, for taxes, and the proceeds of such judgments
be sued. in the hands of officers of the law, are not
subject to execution unless so declared by
Unincorporated: Inquire into principal statute.
functions of the agency:
Thus, it is clear that all the funds of petitioner
If governmental: NO suit without consent municipality in the possession of the
[Sanders v. Veridiano, supra.; Bureau of Municipal Treasurer of San Miguel, as well as
Printing v. Bureau of Printing Employees those in the possession of the Provincial
Association, 1 SCRA 340]. In the Veterans Treasurer of Bulacan, are also public funds
Manpower case, the Court said that the PC and as such they are exempt from execution.
Chief and PC-SUSIA are instrumentalities of Besides, there must be, pursuant to Section
the national government exercising primarily 2(a) of Presidential Decree No. 477, known as
governmental functions (regulating the "The Decree on Local Fiscal Administration,"
a corresponding appropriation in the form of
Page | 55
MENDIOLA, MANILA
an ordinance duly passed by the Sangguniang YES. Municipal funds in possession of

Bayan before any money of the municipality municipal and provincial treasurers are
may be paid out. In the case at bar, it has not public funds exempt from execution. The
been shown that the Sangguniang Bayan has reason for those was explained in the case of
passed an ordinance to this effect. Municipality of Paoay vs. Manaois‘ that are
Furthermore, the procedure outlined by held in trust for the people intended and used
Section 15, Rule 39 of the New Rules of Court for the accomplices of the purposes for which
has not been followed. municipal corporations are created and that
to subject said properties and public funds to
execution would materially impede, even
MUNICIPALITY OF SAN MIGUEL, defeat and in some instance destroy said
BULACAN VS. FERNANDEZ purpose.” Thus it is clear that all the funds of
petitioner municipality in the possession of
FACTS: the
In Civil Case No. 604-B, the then CFI of Municipal Treasurer of San Miguel as well as
Bulacan rendered judgment holding herein those in the possession of the Provincial
petitioner municipality liable to respondents Treasurer of Bulacan are also public funds
Imperio, et al. When the judgment became and as such they are exempt from execution.
final, respondent judge issued a writ of Besides PD 447, known as the Decree on
execution to satisfy the same. Petitioner Local Fiscal Administration, provides in
municipality filed a motion to quash the writ section 3 (a) that “no money shall be paid out
on the ground that the municipality’s of the treasury except in pursuance of a
property or funds are public exempt from lawful appropriation or other specific
execution. The motion was denied. The statutory authority.” Otherwise stated, there
respondent judge issued another order must be a corresponding appropriation in the
requiring both the municipal and provincial form of an ordinance duly passed by the
treasurer to comply with the money Sangguniang Bayan before any money of the
judgment. When the treasurers failed to do so, municipality may be paid out. In the case at
respondent judge issued an order for their bar, it has not been shown that the
arrestand that they will be released upon Sangguniang Bayan has passed any ordinance
compliance, hence the present petition. to this effect.
ISSUE:
Whether the funds of the municipality in the MUNICIPALITY OF MAKATI VS. COURT OF
hands of the Provincial and Municipal APPEALS
Treasurers of Bulacan and San Miguel, 190 SCRA 206 (1990)
respectively are public funds which are
exempt from execution? CASE DOCTRINE: REMEDY TO ENFORCE
THE LIABILITY OF THE MUNICIPAL
HELD: CORPORATION - There is merit in this
contention. The funds deposited in the second

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MENDIOLA, MANILA
PNB Account No. S/A 263-530850-7 are payment of a final money judgment rendered
public funds of the municipal government. In against it, the claimant may avail of the
this jurisdiction, well-settled is the rule that remedy of mandamus in order to compel the
public funds are not subject to levy and enactment and approval of the necessary
execution, unless otherwise provided for by appropriation ordinance, and the
statute [Republic v. Palacio, supra.; The corresponding disbursement of municipal
Commissioner of Public Highways v. San funds therefor [See Viuda De Tan Toco v. The
Diego, G.R. No. L-30098, February 18, 1970, Municipal Council of Iloilo, supra; Baldivia v.
31 SCRA 616]. More particularly, the Lota, 107 Phil. 1099 (1960); Yuviengco v.
properties of a municipality, whether real or Gonzales, 108 Phil. 247 (1960)].
personal, which are necessary for public use
cannot be attached and sold at execution sale
to satisfy a money judgment against the MUNICIPALITY OF MAKATI VS. COURT
municipality. Municipal revenues derived OF APPEALS
from taxes, licenses and market fees, and
which are intended primarily and exclusively FACTS:
for the purpose of financing the governmental An expropriation proceeding was initiated by
activities and functions of the municipality, petitioner Municipality of Makati against
are exempt from execution [See Viuda De Tan private respondent Admiral Finance
Toco v. The Municipal Council of Iloilo, 49 Phil. Creditors Consortium Inc., Home Building
52 (1926); System and Reality Corp., and Arceli P. Jo
involving a parcel of land and improvements
The Municipality of Paoay, Ilocos Norte v. thereon located
Manaois, 86 Phil. 629 (1950); Municipality of at San Antonio Village, Makati. An action for
San Miguel, Bulacan v. Fernandez, G.R. No. eminent domain was filed. Attached to the
61744, June 25, 1984, 130 SCRA 56]. The petitioner’s complaint was a certification that
foregoing rule finds application in the case at a bank account had been opened with the
bar. Absent a showing that the municipal PNB. After the decision has become final and
council of Makati has passed an ordinance executory, a writ of execution was issued and
appropriating from its public funds an a notice of garnishment was served upon the
amount corresponding to the balance due manager of PNB where the petitioner had
under the RTC decision dated June 4, 1987, bank accounts.
less the sum of P99,743.94 deposited in
Account No. S/A 265- 537154-3, no levy However, the sheriff was informed that a hold
under execution may be validly effected on code was placed on the account of the
the public funds of petitioner deposited in petitioner.
Account No. S/A 263-530850-7. The petitioner contended that its funds at the
PNB cocked neither be garnished nor levied
Nevertheless, this is not to say that private upon execution for to do so would result in
respondent and PSB are left with no legal the disbursement of public funds without the
recourse. Where a municipality fails or proper appropriation required under the law.
refuses, without justifiable reason, to effect

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MENDIOLA, MANILA
and sold on execution sale to satisfy a money

In a petition with the Court of Appeals, judgment against the municipality. Municipal
petitioner alleges for the first time that it has revenues derived from taxes, licenses and
actually two accounts with the PNB, one market fees, and which are intended
exclusively for the expropriation of the primarily and exclusively for the purpose of
subject property with the outstanding financing governmental activities and
balance of P99, 743. 94. The other account functions of the municipality are exempt from
was for the obligations and other purposes of execution. The foregoing rule finds
the municipal government with a balance of application in the case at bar.
P170,098,421.72.
This is not to say that private respondents are
ISSUE: Whether the bank account of a left with no legal recourse. When a
municipality may be levied on execution to municipality fails or refuses without
satisfy a money judgment against it absent justifiable reason to effect payment of a final
showing that the municipal council has money judgment rendered against it, the
passed an ordinance appropriating from its claimant may avail of the remedy of
public funds an amount corresponding to the mandamus in order to compel the enactment
balance due to the RTC decision? and approval of the necessary appropriation
ordinance and the corresponding
HELD: disbursement of municipal funds. The court
YES. Since the first PNB account was will not condone petitioner’s blatant refusal
specifically opened for expropriation to settle its obligation arising from an
proceedings it has initiated over the subject expropriation proceeding it has in fact
property, there is no objection to the initiated. Within the context of the state’s
garnishment or levy under execution of funds inherent power of eminent domain, just
therein amounting to P4,965,506.40, the compensation means not only the correct
funds garnished in excess of P99,743.94, determination of the amount to be paid to the
which are public funds earmarked for the owner of the land but also the payment of the
municipal government. Other statutory land within a reasonable time from its taking.
obligations are exempted from execution The state’s power of eminent domain should
without the proper appropriation required be exercised within
under the law. the bounds of fair play and justice. In the case
at bar, considering that
The funds deposited in the 2nd PNB account valuable property has been taken, the
are public funds of the municipal government. compensation to be paid is fixed,
The rule is well-settled that public funds are and the municipal has had more than
not subject to levy and execution, unless reasonable time to pay full
otherwise provided by the statute. More compensation.
particularly, the properties of a municipality,
whether real or personal, which are
necessary for public use cannot be attached

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MENDIOLA, MANILA
Bank Accounts (Municipality of Makati quashal alleging among other things the
case) exemption of the government from execution.
- Personal funds are still with the This move on the part of petitioner-
treasury in favor of the employee; No appellants is at first glance laudable for 'all
writ of execution = Doctrine of State government funds deposited with the
Immunity Philippine National Bank by any agency or
instrumentality of the government, whether
by way of general or special deposit, remain
government funds and may not be subject to
CITY OF CALOOCAN VS. ALLARDE garnishment or levy.' But inasmuch as an
G.R. NO. 107271; SEPTEMBER 10, 2003 ordinance has already been enacted expressly
appropriating the amount of P613,096.00 as
CASE DOCTRINE: GOVERNMENT FUNDS payment to the respondent-appellee, then the
APPROPRIATED FOR A PURPOSE MAY BE herein case is covered by the exception to the
GARNISHED TO SATISFY THAT PURPOSE. - general rule
However, the rule is not absolute and admits
of a well- defined exception, that is, when
there is a corresponding appropriation as
required by law. Otherwise stated, the rule on CITY OF CALOOCAN VS. ALLARDE
the immunity of public funds from seizure or
garnishment does not apply where the funds FACTS:
sought to be levied under execution are In 1972, Mayor Marcial Samson of Caloocan
already allocated by law specifically for the abolished the position of Assistant City
satisfaction of the money judgment against Administrator and 17 other positions via
the government. In such a case, the monetary Ordinance No. 1749. The affected employees
judgment may be legally enforced by judicial assailed the legality of the abolition. The CFI
processes. in 1973 declared abolition illegal and ordered
the reinstatement of all the dismissed
Thus, in the similar case of Pasay City employees and the payment of their back-
Government, et al. vs. CFI of Manila, Br. X, et wages and other emoluments. The City
al., where petitioners challenged the trial Government appealed the decision but such
court's order garnishing its funds in payment was dismissed. In 1986 the City paid Santiago
of the contract price for the construction of P75,083.37 as partial payment of her back-
the City Hall, we ruled that, while government wages. The others were paid in full. In 1987
funds deposited in the PNB are exempt from the City appropriated funds for her unpaid
execution or garnishment, this rule does not back salaries (supplemental budget #3) but
apply if an ordinance has already been the City refused to release the money to
enacted for the payment of the City's Santiago. The City of Caloocan argued that
obligations — Santiago was not entitled to back wages. On
July 27, 1992 Sheriff Castillo levied and sold
Upon the issuance of the writ of execution,
the petitioner-appellants moved for its

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MENDIOLA, MANILA
at public auction one of the motor vehicles of deposited in the PNB or any other official
the City Government for P100,000. depositary of the Philippine Government by
any of its agencies or instrumentalities,
The amount was given to Santiago. The City whether by general or special deposit, remain
Government questioned the validity of the government funds and may not be subject to
sale of motor vehicle; properties of the garnishment or levy, in the absence of a
municipality were exempt from execution. corresponding appropriation as required by
Judge Allarde denied the motion and directed law. Even though the rule as to immunity of a
the sheriff to levy and schedule at public state from suit is relaxed, the power of the
auction 3 more vehicles. On October 5, 1993 courts ends when the judgment is rendered.
the City Council of Caloocan passed Ordinance Although the liability of the state has been
No. 0134 which included the amount of judicially ascertained, the state is at liberty to
P439,377.14 claimed by Santiago as back- determine for itself whether to pay the
wages, plus interest. Judge Allarde issued an judgment or not, and execution cannot issue
order to the City Treasurer to release the on a judgment against the state. Such statutes
check but the City Treasurer can’t do so do not authorize a seizure of state property to
because the Mayor refuses to sign the check. satisfy judgments recovered, and only convey
On May 7, 1993. Judge Allarde ordered the an implication that the legislature will
Sheriff to immediately garnish the funds of recognize such judgment as final and make
the City Government of Caloocan provision for the satisfaction thereof.
corresponding to the claim of Santiago. Notice
of garnishment was forwarded to the PNB but However, the rule is not absolute and admits
the City Treasurer sent an advice letter to of a well-defined exception, that is, when
PNB that the garnishment was illegal and that there is a corresponding appropriation as
it would hold PNB liable for any damages required by law. In such a case, the monetary
which may be caused by the withholding the judgment may be legally enforced by judicial
funds of the city. processes. Herein, the City Council of
Caloocan already approved and passed
ISSUE: Ordinance No. 0134, Series of 1992, allocating
Whether or not the funds of City of Caloocan, the amount of P439,377.14 for Santiago’s
in PNB, maymbe garnished (i.e. exempt from back-wages plus interest. This case, thus, fell
execution), to satisfy Santiago’s claim. squarely within the exception. The judgment
of the trial court could then be validly
HELD: enforced against such funds.
Garnishment is considered specie of
attachment by means of which the plaintiff
seeks to subject to his claim property of the
defendant in the hands of a third person, or
money owed by such third person or
garnishee to the defendant. The rule is and
has always been that all government funds

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MENDIOLA, MANILA
ADDED RECITS: that he or she had exhibited involvement in or

can be imputed with knowledge of the
WHAT IS THE DIFFERENCE BETWEEN violations, or had failed to exercise necessary
UNINCORPORATED and INCORPORATED and reasonable diligence in conducting the
AGENCY? necessary investigations required under the
- Incorporated agency --- we refer to rules. The Court also stresses that rule that
charter the presidential immunity from suit exists
- Unincorporated Agency – Inquire in to only in concurrence with the president’s
the functions incumbency. [Rodriguez v. Macapagal Arroyo,
G.R. No. 191805, November 15, 2011, citing
EXAMPLE: BUREAU OF PRINTING: Estrada v. Desierto, G.R. Nos. 146710-15,
Determine the primary function of the 146738, March 2, 2001, 353 SCRA 452] 16
unincorporated agency
MANDAMUS: To compel the enactment of Presidential Immunity - The President,
ordinance. during his tenure of office or actual
IS MANDAMUS APPLICABLE AGAINST incumbency, may not be sued in any civil or
CONGRESS? criminal case, and there is no need to provide
- No. because it will violate the for it in the Constitution or law. [Rubrico v.
separation of powers. Arroyo, G.R. No. 183871, February 18, 2010]
WHAT IF A GOCC IS INCORPORATED

UNDER THE CORPORATION CODE BUT ITS
AOI DOES NOT PROVIDE THAT IT CAN BE
SUED, CAN THE GOCC BE SUED?
- Yes. We apply the Corporation Code;
It is still an entity with a personality
separate and distinct from the
government. ADDITIONAL:
- Municipal Corporations – Section 22,
LGC FROM ALBANO:
ALBANO:
IMMUNITY OF THE STATE FROM SUIT

REMINDERS FROM SARMIENTO:
Q: Is there any Constitutional provision
Commander-in-Chief - Pursuant to the forbidding any suit against the State?
doctrine of command responsibility, the A: YES. The constitution expressly states that
President, as the Commander-in-Chief of the the State cannot be sued without its consent.
AFP, can be held liable for affront against the (Sec.3, Art. XV1, 1987 Constitution).
petitioner’s rights to life, liberty and security
as long as substantial evidence exist to show

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Q: How may consent of the State to be sued of courts. It is based on the very essence of
given? sovereignty. Justice Holmes once said that a
A: The consent of the State to be sued may be sovereign is exempt from suit, not because of
given expressly or impliedly. There is express any formal conception or obsolete theory, but
consent, when it gives it by way of a general on the logical and practical ground that there
law. (Act No. 3083; C.A. No. 327, as amended can be no legal right as against the authority
by P.D. No. 1445; Arts. 2180, 2189, NCC, or by that makes the law on which the right
special law). depends. True, the doctrine, not too
infrequently, is derisively called “the royal
There is implied consent when it files a suit or prerogative of dishonesty” because it grants
when it enters into a contract in the exercise the prerogative to defeat any legitimate claim
of its proprietary capacity. (United States of against it by simply invoking its non-suability.
America v. Ruiz, 138 SCRA 487). It has been explained in its defense, however,
that a continued adherence to the doctrine of
Q: Who gives the consent to be sued? non-suability cannot be deplored, for the loss
A: It is Congress by way of a law that gives the of governmental efficiency and the obstacle to
State’s consent to be sued. The law may be a the performance of its multifarious functions
general statute or a special law. would be far greater in severity than the
inconvenience that may be caused private
Q: May the consent to be sued be given by parties, if such fundamental principle is to be
a lawyer of an unincorporated agency of abandoned and the availability of judicial
the State? remedy is not to be accordingly restricted.
A: No, because the consent to be effective, (Department of Agriculture v. NRLC, 227
must be given by the State through a duly SCRA 693; Professional Video, Inc. v. TESDA,
enacted statute, the consent given by the G.R. No. 155504, June 26, 2009).
lawyer of the unincorporated agency of the
State is not binding upon it as he is Q: Is the rule absolute that the State may
considered to have gone beyond the scope of not be sued at all? How may consent of the
his authority. (Republic v. Purisima, 78 SCRA State to be sued given? Explain.
470). A: No. The rule is not really absolute for it
does not say that the state may not be sued
Q: State and discuss the basis of the under any circumstances. On the contrary, the
doctrine of State immunity from suit. doctrine only conveys, “the state may not be
A: It is based on the provisions of the sued without its consent;” its clear import
Constitution that the State may not be sued then is that the State may at times be sued.
without its consent. The doctrine reflects The State’s consent may be given either
nothing less than a recognition of the expressly or impliedly. Express consent may
sovereign character of the State and an be made through a general law (i.e.,
express affirmation of the unwritten rule Commonwealth act no. 327, as amended by
effectively insulating it from the jurisdiction presidential decree no. 1445 [sections 49-50],

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which requires that all money claims against government has been adjudged liable in a suit
the government must first be filed with the to which it has consented, it does not
Commission on Audit which must act upon it necessarily follow that the judgment can be
within 60 days. Rejection of the claim will enforced by execution against its funds for, as
authorize the claimant to elevate the matter held in Republic v. Villasor (54 SCRA 84),
to the Supreme Court on certiorari and in, every disbursement of public funds shall be
effect, sue the State thereby) or a special law. covered by a corresponding appropriation
In this jurisdiction, the general law waiving passed by the Legislature.
the immunity of the state from suit is found in
Act no. 3083, where the Philippine Q: When the State files a suit, it waives its
government “consents and submits to be sued right against immunity from suit. Is the
upon any money claim involving liability rule absolute? Why?
arising from contract, express or implied, A: As a rule, when the sate files a suit, it
which could serve as a basis of civil action becomes vulnerable to suits or counterclaims.
between the private parties.” (Froctan v. Pan Oriental Shipping. L-6060.
Implied consent, on the other hand, is Sept. 30, 1950). But not if the State intervenes
conceded when the State itself commences in a suit not for the purpose of resisting the
litigation, thus opening itself to a claim precisely because of State immunity.
counterclaim or when it enters into a contract. (Lim v. Brownwell, 107 Phil. 345)
In this situation, the government is deemed to
have descended to the level of the other Q: In a complaint against the State, the
contracting party and to have divested itself plaintiff failed to allege the existence of
of its sovereign immunity. The rule is not, State’s consent. Give the effect of such
however, without qualification. Not all failure to allege State’s consent to be sued?
contracts entered into by the government A: It is a rule that the complaint must allege
operate as a waiver of its non-suability; that the State gave its consent to be sued,
distinction must still be made between one otherwise, it would be dismissed. This is so
which is executed in the exercise of its because waiver of the immunity being in
sovereign function and another which is done derogation of sovereignty will not be inferred
in its proprietary capacity. (Department of lightly and must be construed strictissimi juris.
Agriculture v. NLRC, 227 SCRA 293). (Republic v. Feliciano, 148 SCRA 424).
Q: What does it mean when the State gives Q: Is there any distinction between
its consent to be sued? Explain. suability and liability of the State? Explain.
A: When the state consents to be sued, it does A: Yes. Suability depends on the consent of
not necessarily concede its liability. By the State to be sued, liability on the applicable
consenting to be sued, it waives immunity law and the established facts. The
from suit, but it does not waive its lawful circumstance that a State is suable does not
defenses to the action. (Meritt v. Government, necessarily mean that it is liable, on the other
31 SCRA 311, 318). Even when the hand, it can never be held liable if it does not

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first consent to be sued. Liability is not business or trade, the particular act or
conceded by the mere fact that the state has transaction must betested by its nature. If the
allowed itself to be sued. When the state does act is in pursuit of a sovereig activity, or an
waive its sovereign immunity, it is only giving accident thereof, it is an act jure imperii,
the plaintiff the chance to prove, if it can, that especially when it is not undertaken for gain
the defendant is liable. or profit. If it is bought and sold in the
ordinary course of a real estate business, then
Q: Does the doctrine of state immunity it is jure gestionis. (Holy See v. Judge Rosario,
from suit extend to foreign states? Jr., et al., 57 SCAD 92. G.R. No. 101949, Dec.1,
A: Yes. Consistent with recognized principles 1994).
of international law, adopted under the
Constitution as part of the law of the land, a Q: North Luzon Railways Corp. (North-rail)
foreign state or government may not be sued and China National Machinery &
in the courts of another state or its won Equipment Corp. entered into a
courts without its consent. (Syquia v. Almeda) Memorandum of Agreement for the
construction of the railway system from
Q: A piece of real property was acquired Caloocan City to Malolos, Bulacan.
by the Holy See by way of donation from Eximbank and the Department of Finance
the Archdiocese of Manila. The purpose enetered into a loan agreement to finance
was the construction of the official place of the project as the Chinese government
residence of the Papal Nuncio. Such right designated bank as the lender. Atty. Harry
to acquire was recognized in the 1961 Roque et al. filed a petition seeking to
Vienna Convention on Diplomatic nullify the contract lleging that it violated
Relations. It was, however, sold to another. the Constitution and RA 9184, otherwise
The Holy See was sued through its known as the Government Procurement
representative Msgr. Crilos, Jr. for failure Act. CNMEC contended that it cannot be
to comply with the condition to evict the sued since it was an agent of the People’s
squatters. It was contended, however, that Republic of China, performing a
t cannot invoke immunity from suit since governmental function. Is the contention
it entered into a commercial transaction. correct?
Rule on the contention. A: NO, it is performing proprietary activity.
A: The contention is not correct. The Holy See
is immune from suit because the decision to The desire of the CNMEG to secure the
transfer property was clothed with a Nothrail Project was in the ordinary or
governmental character, as it did not do it for regular course of its business as a global
profit or gain. The mere entering into a construction company. The implemenation of
contract by a foreign State with a private the Northrail project was intended to
party cannot be the determining factor generate profit for CNMEG, with the contract
whether it is engaged in business or not. If the agreement placing a contract price of USD
foreign State is not engaged regularly in 421,050,000 for the venture. The use of the

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MENDIOLA, MANILA
term “state corporation” to refer to CNMEG the plea of immunity is recognized and
was only descriptive of its nature as a GOCC, affirmed by the executive branch, it is the
and it was acting on behalf of China in the duty of the courts to accept this claim so as
performance of the latter’s sovereign not to embarrass the executive arm of the
functions. To imply otherwise would result in government in conducting the country’s
an absurd situation, in which all Chinese foreign relations.
corporations owned by the state would be
automatically considered as performing Q: The International Rice Research
governmental activities, even if they are Institute (IRRI) dismissed Ernesto Callado
clearly engaged in commercial or proprietary for driving an institute vehicle while
pursuits. (China National Machinery & under the influence of liquor, etc. he filed
Equipment Corp. v. Hon. Sta. Maria, et al. G.R. an action for illegal dismissal, illegal
No. 185572, February 7, 2012). suspension and indemnity pay with the
NLRC. The arbiter ruled in his favor
Q: When it was sued, it offered a holding that in all cases of termination, the
Certification executed by the economic & Institute waived its immunity. On appeal
Commercial Office of thePeople’s Republic to the NLRC, the arbiter’s order was
of China, stating that the Northrail project reversed, hence, a petition to the SC was
was in pursuit of a sovereign activity. Such filed where the contention was that the
Certification endorsed by the OGCC and immunity granted to IRRI under sec.3, P.D.
the OSG sufficient? Why? No. 1620 was waived in a Memorandum
A: No. the determination by the OSG and dated April 13, 1991. Decide.
OGCC does not inspire the same degree of A: The contention is not proper. Mere
confidence as a DFA certification which can implementing rules could not waive the
even be inquired as to its intrinsic correctness. immunity. The grant of immunity to IRRI is
clear and unequivocal and an express waiver
Q: What department of the government by its Director-General is the only way by
determines whether a foreign state is which it may relinquish or abandon this
entitled to immunity from suit and what is immunity. )Callado v. IRRI, 61 SCAD 204, G.R.
the nature of such determination? No. 106483, May 22, 1995)
A: The executive department is the branch
that is empowered to determine whether a Q: What is the raison d’etre for immunity
foreign state is entitled to immunity from suit. of international organizations or foreign
states?
The determination of the executive arm of the A: The raison d’etre for these immunities is
government that a state or instrumentality is the assurance of unimpeded performance of
entitled to sovereign or diplomatic immunity their functions by the agencies concerned. In
is a political question that is conclusive upon Callado v. IRRI 61 SCAD 204, it was said:
the courts. (Interational catholic migration
commission v. Calleja, 190 SCRA 130). Where

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“The grant of immunity from local jurisdiction diplomatic immunity. But how the Philippine
to xxx and IRRI is clearly necessitated by their Foreign Affairs Office conveys its
international character and respective endorsement to the courts varies.
purposes. The objective is to avoid the danger
of partiality and interference by the host Q: Is the Vatican City a State?
country in their international workings. The A: Yes. The Vatican City first fell into none of
exercise of jurisdiction by the Department of the established categories of States, and the
Labor in these instances would defeat the attribution to it of “sovereignty” must be
affairs of international organizations, in made in a sense different from that in which it
accordance with international practice, from is applied to other States. In a community of
political pressure or control by the host national states, the Vatican City has an
country to the prejudice of member States of independent government of its own, with the
the organization, and to ensure the Pope, who is also headof the Roman Catholic
unhampered performance of their functions.” Church, as the Holy See or Head of State, in
conformity with its traditions, and the
Q: What do you call the process done demands of its mission in the world. Indeed,
whenever a foreign state is sued and the worldwide interests and activities of the
pleads its immunity form suit? How is it Vatican City are such as to make it in a sense
done? an “international State.”
A: It is called the process of suggestion.
Q: Are there conflicting concepts of
In the United States, the procedure followed sovereignty? Explain?
is the process of “suggestion,” where the A: Yes, and these are the classical or absolute
foreign State or the international organization theory and restrictive theory. According to
sued in an American court requests the the classical or absolute theory, a sovereign
Secretary of State to make a determination as cannot, without its consent, be made a
to whether it is entitled to immunity. If the respondent in the courts of another sovereign.
Secretary of State finds that the defendant is According to the newer or restrictive theory,
immune from suit, he, in turn, asks the the immunity of the sovereign is recognized
Atttorney General to submit to the court a only with regard to public acts or acts jure
“suggestion” that the defendant is entitled to imperii of a State, but not with regard to
immunity. In England, a similar procedure is private acts or acts jure gestionis. (US .v Ruiz
followed, only the Foreign Affairs Office 136 SCRA 487 [1987].
issues a certification to that effect instead of
submitting a “suggestion.” Q:Give examples of laws where the State
has given its consent to b sued.
In the Philippines, the practice is for the A: 1.Act No. 3083 which provides that:
foreign government or the international “Subject to the provisions of this Act, the
organization to first secure an executive government hereby consents and submits
endorsement of its claim of sovereign or itself to be sued upon moneyed claims

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MENDIOLA, MANILA
involving liability arising from contracts, character of the objects for which the entity is
express or implied which could serve as basis organized. (National Airport Corp. v.
of civil action between private.” Teodoro). When the government enters into a
commercial business, it abandons its
2.CA No. 327 as amended by P.D. 1445, Secs. sovereign capacity and is to be treated like
49-50 which state that: any other corporation. In this case, the State
“Any claim against the government must divested itself of its sovereign capacity when
first be filed with the Commission on Audit it organized the PNR which is no different
which must act on it within 60 days. Appeal from its predecessors, the Manila Railroad
may be made to the Supreme Court on Company. (Malong v. PNR)
certiorari.”
Q: May NIA be liable for damages for the
3.Art.2189, Civil Code which provides that: injuries sustained by the crops of the
“Provinces, cities, or municipalities shall be private respondents due to the inundation
liable for damages for the death of, or injuries of their landholdings? It was contended
suffered by any person by reason of the that NIA is immune from suit for quasi-
defective condition of roads, streets, bridges, delict or tort and assuming NIA could be
public buildings and other public works sued, it is not liable for tort since it did not
under their control or supervision.” act through a special agent as required
under paragraph 6, Article 2180 of the
4.Art.2180, Civil Code which states that: Civil Code. Decide.
“The State is responsible in like manner
NIA is in error. It is not immune from suit by
when it acts through a special agent.”
virtue of the express provision of P.D. No. 552.
Under its charter (R.A No. 3601, as amended),
Q: Petitioners sued the Philippine National it has the power to exercise all the powers of
Railways for damages for the death of a corporation under the Corporation Law. It
their son who fell from an overloaded may sue and be sued. NIA is a government
train belonging to the PNR sometime on agency with a juridical personality separate
October 30, 1977. The Trial Court and distinct from the government. It is not a
dismissed the suit on the ground that the mere agency of the government but a
charter of the PNR, as amended by PD 741 corporate body performing proprietary
has made the same a government functions. (Fontanilla v. Maliaman)
instrumentality, and thus, immune from
Q: The petitioner filed a suit for specific
suit.
performance with damages against
The dismissal is not proper. The correct rule, respondent (formerly Reparations Com.)
the Supreme Court said, is that not all praying for the replacement of a defective
government entities whether corporate or rock pulverizing machinery with a new
non-corporate, are immune from suits. one, or in the alternative, replace the same.
Immunity from suit is determined by the The respondent denied responsibility for

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MENDIOLA, MANILA
damages contending that the same was “All government funds deposited with
inspected by reputable companies under PNB by any agency or instrumentality of the
the Reparations Law. The RTC ruled for government, whether by way of general or
the petitioner and issued an order of special deposit, remain government funds
execution pending appeal. The CA set since such government agencies or
aside the order, hence, this petition. instrumentalities do not have any non-public
or private funds of their own. They are not
The issue raised is whether the funds of subject to garnishment or levy. Even
REPACOM in the account of the Board of assuming that the funds become commingled
Liquidators in the Philippine National with other funds of the banks, this does not
Bank may be garnished to satisfy a money remove the character of the fund as a credit
judgment against the BOARD. Decide. representing government funds, thus
deposited.” (See Philrock, Inc. v. Board of
No, because the suit against REPACOM was a
Liquidators)
suit against the State.
Q:NMPC and PSI represented by Romeo
The Board of Liquidators is a government
Jalosjos borrowed money from Traders
agency under the direct supervision of the
Royal Bank in the sum of P2.5M through a
President of the Republic created by E.O. 372,
standby letter of credit, the amount of
dated Nov. 24, 1950. Pursuant to P.D. Nos.
which was used to guarantee the payment
629 and 635-A, it is tasked with the specific
of the coverage of the right to broadcast
duty of administering the assets and paying
the 1981 PBA Season with condition that
the liabilities of the defunct REPACOM. It was
collections from the sponsors should be
not created for profit nor to engage in
deposited with Traders. NMPC and PSI did
business. Hence, a government agency which
not deposit the collections, hence Traders
is unincorporated possesses no juridical
filed a collection case against NMPC and
personality of its own, the suit against it
PSI. The OSG filed a Motion to Dismiss
becomes a suit against the agency’s principal,
invoking immunity of State from suit. The
i.e., the State.
agency, it was contended, is performing
The sale of the rock pulverizing plant to governmental functions. It was denied on
PHILROCK by the Board of Liquidators, the ground that the State may be sued if it
although proprietary in nature was merely entered into a contract. Decide.
incidental to the performance of the Board’s
The agency was organized to disseminate
primary and governmental function of
governmental information to assist in the
settling and closing the affairs of the
hastening of the slow economic development
REPACOM. Hence, its funds in the Philippine
of the country. When it entered into a
National Bank are public funds which are
contract of loan to facilitate the broadcast of
exempt from garnishment. The SC so ruled in
the 1981 basketball season, it was engaged in
Commission of Public Highways v. San Diego.
an undertaking which was not incidental to
disseminating governmental information. It

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MENDIOLA, MANILA
was engaged in a business undertaking which the defendants, and dogs unleashed on
was certainly beyond its function of them which bit them in several parts of
disseminating governmental information. their bodies. The defendants denied this
but instead contended that the plaintiffs
The doctrine of State immunity from suit may were bitten by the dogs when they
not ve invoked as a shield in the same manner resisted arrest for theft.
that it cannot serve as an instrument in
perpetrating an injustice. (Traders Royal In their Motions to Dismiss, the
Bank vs. IAC) defendants said that the suit against them
is a suit against the USA. The Motion to
Q: In G.R. No. 76607, several officers of the Dismiss was denied, hence, this petition.
U.S Air Force were sued in connection with Decide, stating you reasons.
the bidding conducted for the contracts for
barbering services in said base. The The rule that a State may not be sued without
bidding was won by Dizon, but it was its consent, now expressed in Section 3,
questioned by private respondents asking Article XVI of the 1987 Constitution is one of
for the cancellation of the award and for the generally accepted principles of
the rebidding for the barbershop international law adopted as part of the law
concessions. A complaint was filed to that of the land under Article II, Section 2. This
effect. Petitioners filed a Motion to Dismiss latter provision merely reiterates a policy
invoking immunity of State from suit. earlier embodied in the 1935 and 1973
Constitutions and also intended to manifest
In G.R. No. 79470, Fabian Genove filed a our resolve to abide by the rules of the
complaint for damages against petitioners international community.
for his dismissal as cook at the U.S. Air
Force Recreation Center at the John Hay Even without such affirmation, we would still
Air Station in Baguio City. It was be bound by the generally accepted principles
ascertained that Genove had poured urine of international law under the doctrine of
into the soup stock used in cooking the incorporation. Under this doctrine, as
vegetables served to the club customers. accepted by the majority of States, such
principles are deemed incorporated in the
In G.R. No. 80018, Luis Bautista, an law of every civilized State as a condition and
employee of the barracks in Camp O’ consequence of its membership in the society
Donnell was arrested following a buy-bust of nations. Upon its admission to such society,
operation conducted by the petitioners. As, the State is automatically obligated to comply
a consequence, he was removed. with these principles in its relations with
other States.
In G.R. No. 80258, a complaint for damages
was filed against petitioners for injuries As applied to the local State, the doctrine of
suffered by respondents. According to the State immunity is essential to the justification
plaintiffs, they were beaten, handcuffed by given by Justice Holmes that “there can be no

Page | 69
MENDIOLA, MANILA
legal rights as against the authority which acts. It cannot for a moment be imagined that
makes the law on which the right depends.” they were acting in their private or unofficial
There are other practical reasons for the capacity when they were apprehended and
enforcement of the doctrine. In the case of the later testified against the complainant. It
foreign State sought to be impleaded in the follows that for discharging their duties as
local jurisdiction, the added inhibition is agents of the United States, they cannot be
expressed in the maxim par in parem, non directly impleaded for acts imputable to their
habet imperium. All States as sovereign equals principal which has not given its consent to
cannot assert jurisdiction over another. A be sued. As observed in Sanders vs.
contrary disposition would, in the language of Veridiano:
a celebrated case, “unduly vex the peace of
nations.” “Given the official character of the
above-described letters, we have to conclude
While the doctrine appears to prohibit only that the petitioners were, legally speaking,
suits against the State without its consent, it being sued as officers of the United States
is also applicable to complaints filed against government. As they have acted on behalf of
officials of the State for acts allegedly that government, and within the scope of
performed by them in the discharge of their their authority, it is that government, and
duties. The rule is that, if the judgment within the scope of their authority, it is that
against such officials will require the State government, and not the petitioners
itself to perform an affirmative act to satisfy personally, that is responsible for their acts.”
the same, such as the appropriation of the
amount needed to pay the damages awarded In G.R. No. 79470, the restaurant service
against them, the suit must be regarded as cannot be considered as a governmental
against the State itself although it has not function, hence, the doctrine of State
been formally impleaded. In such a situation, immunity from suit cannot be invoked. The
the State may move to dismiss the complaint restaurant service partakes of the nature of
on the ground that it has been filed without the business enterprise undertaken by the
its consent. USA in its proprietary capacity. The services
were not exclusive to the servicemen, they
In connection with GR No. 80018, the were not also for free. Tourists could avail of
petitioners were acting in the exercise of their the same.
official functions when they conducted the
buy-bust operation against the complainant As regards GR No. 76607, the barber shops
and thereafter testified against him at his trial. subject of the concessions are commercial
The said petitioners were in fact connected enterprise operated by private persons. They
with the Air Force Office as Special are not agencies of the USA, hence, the
Investigators and were charged precisely doctrine of State immunity cannot be invoked.
with the functions of preventing the (USA vs. Guinto)
distribution, possession and use of prohibited
drugs and prosecuting those guilty of such

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MENDIOLA, MANILA

Page | 71

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SAN BEDA COLLEGE OF LAW 2017

THE DOCTRINE OF STATE

No. Because according to Justice

COFFEE NOTES 2017 | POLITICAL LAW COMPENDIUM

COFFEE NOTES 2017 | POLITICAL LAW COMPENDIUM

SANDERS VS VERIDIANO II ISSUE:

FACTS: Whether or not the petitioners are

COFFEE NOTES 2017 | POLITICAL LAW COMPENDIUM

The case of Sanders vs Veridiano is the - ce of official duties [Republic v.

COFFEE NOTES 2017 | POLITICAL LAW COMPENDIUM

“personal motives” in ordering the government officer but the case is

COFFEE NOTES 2017 | POLITICAL LAW COMPENDIUM

THE STATE IMMUNITY IS NOT WAIVED REPUBLIC VS SANDOVAL

COFFEE NOTES 2017 | POLITICAL LAW COMPENDIUM

RULING: GR L-5156 March 11, 1954

Plaintiff Carmen Festejo filed an action

COFFEE NOTES 2017 | POLITICAL LAW COMPENDIUM

As applied to the local state, the doctrine of

COFFEE NOTES 2017 | POLITICAL LAW COMPENDIUM

COFFEE NOTES 2017 | POLITICAL LAW COMPENDIUM

However, the rules of International Law are torts.

SUABILITY IS NOT SYNONYMOUS WITH

COFFEE NOTES 2017 | POLITICAL LAW COMPENDIUM

UNITED STATES VS GUINTO consented. It is now contesting the denial of

In the first case, the private respondents are

COFFEE NOTES 2017 | POLITICAL LAW COMPENDIUM

The private respondents invoke Article 2180 of

COFFEE NOTES 2017 | POLITICAL LAW COMPENDIUM

"'The restrictive application of State "Nonetheless, a continued adherence to the

COFFEE NOTES 2017 | POLITICAL LAW COMPENDIUM

2. No, since the acts for which the PC

HELD: SUIT AGAINST PUBLIC OFFICERS

COFFEE NOTES 2017 | POLITICAL LAW COMPENDIUM

COFFEE NOTES 2017 | POLITICAL LAW COMPENDIUM

COFFEE NOTES 2017 | POLITICAL LAW COMPENDIUM

WHY IS A STATE IMMUNITY FROM SUIT

COFFEE NOTES 2017 | POLITICAL LAW COMPENDIUM

HELD: REPUBLIC VS. SANDIGANBAYAN

COFFEE NOTES 2017 | POLITICAL LAW COMPENDIUM

REPUBLIC VS. SANDIGANBAYAN b) No member or staff by the Commission

COFFEE NOTES 2017 | POLITICAL LAW COMPENDIUM

Permissive counterclaim – Still, state has

HELD: CASE DOCTRINE:

COFFEE NOTES 2017 | POLITICAL LAW COMPENDIUM

REPUBLIC OF THE PHILIPPINES VS. Administration (NARRA), a tract of land

COFFEE NOTES 2017 | POLITICAL LAW COMPENDIUM

COFFEE NOTES 2017 | POLITICAL LAW COMPENDIUM

The restrictive application of State immunity

COFFEE NOTES 2017 | POLITICAL LAW COMPENDIUM

the premises on the ground that the term of

COFFEE NOTES 2017 | POLITICAL LAW COMPENDIUM

COFFEE NOTES 2017 | POLITICAL LAW COMPENDIUM

sequestered shares, PCGG raised, among certification to that effect instead of

COFFEE NOTES 2017 | POLITICAL LAW COMPENDIUM

REMEDY OF THE COMPLAINANTS WHEN

COFFEE NOTES 2017 | POLITICAL LAW COMPENDIUM

Properties and Development Corporation The restrictive theory, which is intended to

COFFEE NOTES 2017 | POLITICAL LAW COMPENDIUM

COFFEE NOTES 2017 | POLITICAL LAW COMPENDIUM

COFFEE NOTES 2017 | POLITICAL LAW COMPENDIUM

Immunities of Specialized Agencies of the

SECTION 3. Venue. — Original

COFFEE NOTES 2017 | POLITICAL LAW COMPENDIUM

SECTION 5. When the Government SECTION 9. This Act shall take

“personal motives” in ordering the government officer but the case   is