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Constitutional law 1 (case digest 4) Doctrine of State Immunity

*some of the case digests are not mine (sources are linked), I will specify if the digests are mine or not :) -----------------------------------------------------------------------------------------------------------Basis G.R. No. 79253 March 1, 1993 UNITED STATES OF AMERICA and MAXINE BRADFORD, petitioners, vs. HON. LUIS R. REYES, as Presiding Judge of Branch 22, Regional Trial Court of Cavite, and NELIA T. MONTOYA, respondents.

FACTS: Private respondent, hereinafter referred to as Montoya, is an American citizen who, at the time material to this case, was employed as an identification (I.D.) checker at the U.S. Navy Exchange (NEX) at the Joint United States Military Assistance Group (JUSMAG) headquarters in Quezon City. She is married to one Edgardo H. Montoya, a Filipino-American serviceman employed by the U.S. Navy and stationed in San Francisco, California. Petitioner Maxine Bradford, hereinafter referred to as Bradford, is likewise an American citizen who was the activity exchange manager at the said JUSMAG Headquarters.

As a consequence of an incident which occurred on 22 January 1987 whereby her body and belongings were searched after she had bought some items from the retail store of the NEX JUSMAG, where she had purchasing privileges, and while she was already at the parking area, Montoya filed on 7 May 1987 a complaint 1 with the Regional Trial Court of her place of residence Cavite against Bradford for damages due to the oppressive and discriminatory acts committed by the latter in excess of her authority as store manager of the NEX JUSMAG. In support of the motion, the petitioners claimed that JUSMAG, composed of an Army, Navy and Air Group, had been established under the Philippine-United States Military Assistance Agreement entered into on 21 March 1947 to implement the United States' program of rendering military assistance to the Philippines. Its headquarters in Quezon City is considered a temporary installation under the provisions of Article XXI of the Military Bases Agreement of 1947. Thereunder, "it is mutually agreed that the United States shall have the rights, power and authority within the bases which are necessary for the establishment, use and operation and defense thereof or appropriate for the control thereof." The 1979 amendment of the Military Bases Agreement made it clear that the United States shall have "the use of certain facilities and areas within the bases and shall have effective command and control over such facilities and over United States personnel, employees, equipment and material." JUSMAG maintains, at its Quezon City headquarters, a Navy Exchange referred to as the NEX-JUSMAG. Checking of purchases at the NEX is a routine procedure observed at base retail outlets to protect and safeguard merchandise, cash and equipment pursuant to paragraphs 2 and 4(b) of NAVRESALEACT SUBIC INST. 5500.1. 7 Thus, Bradford's order to have purchases of all employees checked on 22 January 1987 was made in the exercise of her duties as Manager of the NEX-JUSMAG.

ISSUES: whether or not the trial court committed grave abuse of discretion in denying the motion to dismiss based on the following grounds: (a) the complaint in Civil Case No. 224-87 is in effect a suit against the public petitioner, a foreign sovereign immune from suit which has not given consent to such suit and (b) Bradford is immune from suit for acts done by her in the performance of her official functions as manager of the U.S. Navy Exchange of JUSMAG pursuant to the Philippines-United States Military Assistance Agreement of 1947 and the Military Bases Agreement of 1947, as amended. HELD: The petition was DENIED for lack of merit. There can be no doubt that on the basis of the allegations in the complaint, Montoya has a sufficient and viable cause of action. Bradford's purported non-suability on the ground of state immunity is then a defense which may be pleaded in the answer and proven at the trial. Since Bradford did not file her Answer within the reglementary period, the trial court correctly declared her in default upon motion of the private respondent. The judgment then rendered against her on 10 September 1987 after the ex parte reception of the evidence for the private respondent and before this Court issued the Temporary Restraining Order on 7 December 1987 cannot be impugned. The filing of the instant petition and the knowledge thereof by the trial court did not prevent the latter from proceeding with Civil Case No. 224-87. "It is elementary that the mere pendency of a special civil action for certiorari, commenced in relation to a case pending before a lower Court, does not interrupt the course of the latter when there is no writ of injunction restraining it."

SALIENT POINTS: The Doctrine of State Immunity sometimes called the royal prerogative of dishonesty as declared in the Constitution affirms, The state may not be sued without its consent". This provision is merely recognition of the sovereign character of the state andan express affirmation of the unwritten rule insulating it from the jurisdiction of the courtsof justice.According to Justice Holmes the doctrine of non-suability is based not on any formalconception or obsolete theory but on the logical and practical ground that there can be no legal right against the authority, which makes the law on which the right depends. Another justification is the practical consideration that the demands and inconveniences of litigation will divert the time and resources of the state from the more pressing matters demanding its attention, to the prejudice of the public welfare. The doctrine is also available to foreign states insofar as they are sought to be sued in the courts of the local state. The added basis in this case is the principle of the sovereignequality of states, under which one state cannot assert jurisdiction over another inviolation of the maxim par in parem non habet imperium. To do so would unduly vex the peace of nations."

Exemption: Article 31 of the Vienna Convention on Diplomatic Relations admits of exceptions. It reads: 1. A diplomatic agent shall enjoy immunity from the criminal jurisdiction of the receiving State. He shall also enjoy immunity from its civil and administrative jurisdiction except in the case of: xxx (c) xxx xxx

an action relating to any professional or commercial activity exercised by the diplomatic

agent in the receiving State outside his official functions (Emphasis supplied).

How may consent of the State to be sued given?

The consent of the state to be sued may be given expressly or impliedly. Express consent may be manifested either through a general law or a special law. Implied consent is given when the State itself commences litigation or when it enters into a contract. The general law providing for the standing consent of the State to be sued is Act No.3083, declaring that the Government of the Philippine Islands hereby consents and submits to be sued upon any moneyed claim involving liability arising from contract,express or implied, which could serve as a basis of civil action between private parties. Under C.A. No. 327 as amended by P.D. No. 1445, a claim against the government mustfirst be filed with the Commission on Audit, which must act upon it within sixty (60)days. Rejection of the claim will authorize the claimant to elevate the matter to theSupreme Court on certiorari and in effect sue the state with its consent.The express consent of the State to be sued must be embodied in a duly enacted statute and may not be given by a mere counsel of the government.It should also be observed that when the State gives its consent to be sued, it does not thereby also to the execution of the judgment against it. Such execution will require another waiver, lacking which the decision cannot be enforced against the State. When is a suit against a public official deemed to be a suit against the State?

Because actions are rarely instituted directly against the Republic of the Philippines, theusual practice is to file such claims not against the State itself but against the officer of the government who is supposed to discharge the responsibility or grant the redresseddemanded. It is important then, to determine if the State is the real party in interest, thatis, that the claim if proved will be a direct liability of the State and not merely of theofficer impleaded. If this is shown, the action can be dismissed as a suit against the Stateunless its immunity had been previously waived. There are many instances when a public officer may be sued in his official capacitywithout the necessity of first obtaining the consent of the State to be sued. A publicofficer may be impleaded to require him to do a duty required by law, or to restrain himfrom doing an act alleged to be unconstitutional or illegal, or to recover from him taxesunlawfully assessed or collected. It has been held also that where an action is filed againsta public officer for recovery only of title or possession of property claimed to be held byhim in his official capacity, the said action is not a suit against the State for which prior waiver of immunity is required. But it is different where there is an addition a claim for recovery of damages, such as accrued rentals, inasmuch as it allowance would require thegovernment to appropriate the necessary amount for the satisfaction of the judgment.Assuming the decision is rendered against the public officer impleaded, enforcementthereof will require an affirmative act from the State, such as the appropriation of theneeded amount to satisfy the judgment. If it does, the suit is one against the State and itsinclusion as party defendant is necessary. If on the other hand, the officer impleaded may by himself alone comply with the decision of the court without the necessity o involvingthe State, then the suit can prosper against him and will not be considered a claim againstthe State. Lastly, when a public officer acts without or in excess of jurisdiction, any injurycaused by him is his own personal liability and cannot be imputed to the State.

What are the instances when a suit against the State is proper? Three instances are considered suit against the state. These are: (A) When the Republic is sued by name. To sue the State, its express consent should be ask and be manifested through a general law or a special law, while the implied consent is given when the State commences litigation or the state entering into a contract. The general law that provides for the consent of the State to be sued is Act No. 3083 (the Government of the Philippine Islands hereby consents and submits to be sued upon any moneyed claim involving liability arising from contract, express or implied, which could serve as a basis of civil action between private parties.). (B) When an Unincorporated government agency is sued . If suit is filed against one of the government entities, it must be ascertained whether or not the State, as the principal that may ultimately be held liable, has given its consent to be sued. This ascertainment will depend in the first instance on whether the government agency impleaded is incorporated or unincorporated. An incorporated agency has a charter of its own that invests it with a separate juridical personality, like the Social Security System, the University of the Philippines and the City of Manila. On the other hand, the unincorporated agency has no separate juridical personality but is merged in the general machinery of the government, like the Department of Justice, the Bureau of Mines and the Government Printing Office.If the agency is incorporated, the test of its suability is found in its charter. The simple rule is that it is suable if its charter says so, and this is true regardless of the functions it is performing. Municipal corporations like provinces and cities, are agencies of the State when they are engaged in governmental functions and therefore should enjoy the sovereign immunity from suits. They are subject to suit even in the performance of such functions because their charter provides that they can sue and be sued. Unincorporated agency, as there would be no charter and no separate juridical personality to consult, any suit filed against it is necessarily an action against the Philippine Government of which itis part of. This being so, it is necessary to determine the nature of the functions in which the agency is engaged, so as to hold it suable if they are proprietary and not suable if theyare governmental. The test in every case is the nature of the primary functions being discharged. The non-suability of the State is available to the agency even if it is shown that it is engaged not only in governmental functions but also, as a sideline, or incidentally in proprietary enterprises. (C) When a public officer is sued in the performance of his official acts and the ultimateliablity rest upon the State. In such cases, it is important to determine if the State is real party in interest, such as the claim if proved will be a direct liability of the State and not merely of the officer impleaded.Three denominators are common among these three considerations. First is that it must require the government to disburse public funds to satisfy any award in that case or an amount is appropriated, Second, it would mean loss of government property. May the government validly invoke the doctrine of State immunity from suit if its invocation will serve as an instrument for perpetrating an injustice on a citizen? Although the doctrine of State immunity is sometimes called the royal prerogative of dishonesty, it must be observed in fairness that the State does not often avail itself of this rule to take undue advantage of parties that may have legitimate claims against it. The principle fortunately has a builtin qualification: the state may, if it so desires, divest itself of its sovereign immunity and thereby voluntarily open itself to suit. In fine,the state may be sued if it gives its consent.


Full text of the case Basis of Doctrine of State Immunity *this is my digest -----------------------------------------------------------------------------------------------------------Immunity of Foreign States & Diplomats Principle of par in parem non habet imperium Process of Suggestion

G.R. No. 101949 December 1,1994 THE HOLY SEE vs. THE HON. ERIBERTO U. ROSARIO, JR., as Presiding Judge of theRegional Trial Court of Makati,Branch 61 and STARBRIGHT SALESENTERPRISES, INC. FACTS: This petition arose from a controversyover a parcel of land, Lot 5-A, located in theMunicipality of Paraaque, Metro Manila andregistered in the name of petitioner. Said Lot5-A is contiguous to Lots 5-B and 5-Dregistered in the name of the Philippine RealtyCorporation (PRC). The three lots were sold toRamon Licup, through Msgr. Domingo A.Cirilos, Jr., acting as agent to the sellers.Later, Licup assigned his rights to the sale toprivate respondent, Starbright Enterprises.The squatters refused to vacate thelots sold to private respondent so a disputearose as to who of the parties has theresponsibility of evicting and clearing the landof squatters occurred. Complicating therelations of the parties was the sale bypetitioner of Lot 5-A to Tropicana Propertiesand Development Corporation (Tropicana).Private respondent filed a complaint forannulment of the sale of the three parcels of land, and specific performance and damagesagainst petitioner, represented by the PapalNuncio, and three other defendants: namely,Msgr. Domingo A. Cirilos, Jr., the PRC and Tropicana.

ISSUE: WON the petitioner Holy See isimmune from suit. HELD: YES.The logical question is whether the foreign state is engaged in the activity in theregular course of business. If the foreign stateis not engaged regularly in a business or trade,the particular act or transaction must then betested by its nature. If the act is in pursuit of asovereign activity, or an incident thereof, thenit is an act jure imperii , especially when it isnot undertaken for gain or profit.Lot 5-A was acquired by petitioner as a donation from the Archdiocese of Manila. Thedonation was made not for commercialpurpose, but for the use of petitioner to construct thereon the official place of residenceof the Papal Nuncio. The right of a foreign sovereign to acquire property, real or personal,in a receiving state, necessary for the creationand maintenance of its diplomatic mission, is recognized in the 1961 Vienna Convention onDiplomatic Relations.In Article 31(a) of the Convention, a diplomatic envoy is granted immunity from thecivil and administrative jurisdiction of the receiving state over any real action relating toprivate immovable property situated in the territory of the receiving state which the envoyholds on behalf of the sending state for thepurposes of the mission. If this immunity is provided for a diplomatic envoy, with all themore reason should immunity be recognized as regards the sovereign itself, which in this caseis the Holy See


There are two conflicting concepts of sovereign immunity, according to the Supreme Court: (a) Classical or absolute theory a sovereign cannot, without its consent, be made a respondent in the courts of another sovereign; and (b) Restrictive theory the immunity of the sovereign is recognized only with regard to public acts or acts jure imperii (public acof a state, but not with regard to private acts or acts jure gestionis.

ACTS JURE IMPERII AND JURE GESTIONIS. - "There are two conflicting concepts of sovereign immunity, each widely held and firmly established. According to the classical or absolute theory, a sovereign cannot, without its consent, be made a respondent in the Courts of another sovereign. According to the newer or restrictive theory, the immunity of the sovereign is recognized only with regard to public acts or acts jure imperii of a state, but not with regard to private act or acts jure gestionis. x x x Certainly, the mere entering into a contract by a foreign state with a private party cannot be the ultimate test. Such an act can only be the start of the inquiry. The logical question is whether the foreign state is engaged in the activity in the regular course of business. If the foreign state is not engaged regularly in a business or trade, the particular act or transaction must then be tested by its nature. If the act is in pursuit of a sovereign activity, or an incident thereof, then it is an act jure imperii, especially when it is not undertaken for gain or profit." The service contracts referred to by private respondent have not been intended by the ADB for profit or gain but are official acts over which a waiver of immunity would not attach. How does the Philippine government treat the Holy See or Vatican?

The Philippines has accorded the Holy See the status of a foreign sovereign. The Holy See, through its Ambassador, the Papal Nuncio, has had diplomatic representations with the Philippine government since 1957. This appears to be the universal practice in international relations.

What is the treaty that governs the sovereign immunity of diplomats and other state agents?

The Vienna Convention on Diplomatic Relations, which was ratified on 18 April 1961, is a codification of centuries-old customary law affording protection to foreign diplomats. The Convention lists the classes of heads of diplomatic missions to include (a) ambassadors or nuncios accredited to the heads of state, (b) envoys, ministers or internuncios accredited to the heads of states; and (c) charges d affairs accredited to the ministers of foreign affairs. Comprising the staff of the (diplomatic) mission are the diplomatic staff, the administrative staff and the technical and service staff.

Par in parem imperium non habet. An equal has no power over an equal. Jenk. Cent. 174. Example: One of two judges of the same court cannot commit the other for contempt. Sources: Full text of case

Case digest -----------------------------------------------------------------------------------------------------------Determination of Immunity by the Department of Foreign Affairs G.R. No. 125865 January 28, 2000 JEFFREY LIANG (HUEFENG), petitioner, vs. PEOPLE OF THE PHILIPPINES, respondent.

FACTS: Petitioner is an economist working with the Asian Development Bank. Sometime in 1994, for allegedly uttering defamatory words against fellow ADB worker Joyce Cabal, he was charged before the Metropolitan Trial Court of Mandaluyong City with two counts of grave oral defamation. Petitioner was arrested by virtue of a warrant issued by the MeTC. MeTC Judge received an office of protocol from the Department of Foreign Affairs stating that petitioner is covered by immunity from legal process under Section 45 of the Agreement between the ADB and the Philippine Government regarding the Headquarters of the ADB in the country. The MeTC judge without notice to the prosecution dismissed the case based from the said protocol. The latter filed a motion for reconsideration which was opposed by the DFA. When its motion was denied, the prosecution filed a petition for certiorari and mandamus with the RTC of Pasig City which set aside the MeTC rulings and ordered the latter court to enforce the warrant of arrest it earlier issued. After the motion for reconsideration was denied, petitioner elevated the case to this court via a petition for review arguing that he is covered by immunity under the Agreement and that no preliminary investigation was held before the criminal cases were filed in court. ISSUE: Whether immunity invoked by DFA for ADB employees based on the Agreement is cognizable in our courts. HELD: The immunity mentioned therein is not absolute, but subject to the exception that the act was done in official capacity. The prosecution should have been given the chance to rebut the DFA protocol and it must be accorded the opportunity to present its controverting evidence. Slandering a person could not possibly be covered by the immunity agreement because our laws do not allow the commission of a crime, such as defamation, in the name of official duty. It is a wellsettled principle of law that a public official may be liable in his personal private capacity for whatever damage he may have caused by his act done with malice or in bad faith or beyond the scope of his authority or jurisdiction. Under the Vienna Convention on Diplomatic Relations, the commission of a crime is not part of official duty. The petition is therefore denied. SALIENT POINTS:

The DFA's function includes, among its other mandates, the determination of persons and institutions covered by diplomatic immunities, a determination which, when challenged, entitles it to seek relief from the court so as not to seriously impair the conduct of the country's foreign

relations. The DFA must be allowed to plead its case whenever necessary or advisable to enable it to help keep the credibility of the Philippine government before the international community. When international agreements are concluded, the parties thereto are deemed to have likewise accepted the responsibility of seeing to it that their agreements are duly regarded. In our country, this task falls principally on the DFA as being the highest executive department with the competence and authority to so act in this aspect of the international arena.[18] In Holy See vs. Hon. Rosario, Jr.,[19] this Court has explained the matter in good detail; viz: "In Public International Law, when a state or international agency wishes to plead sovereign or diplomatic immunity in a foreign court, it requests the Foreign Office of the state where it is sued to convey to the court that said defendant is entitled to immunity. "In the United States, the procedure followed is the process of 'suggestion,' where the foreign state or the international organization sued in an American court requests the Secretary of State to make a determination as to whether it is entitled to immunity. If the Secretary of State finds that the defendant is immune from suit, he, in turn, asks the Attorney General to submit to the court a 'suggestion' that the defendant is entitled to immunity. In England, a similar procedure is followed, only the Foreign Office issues a certification to that effect instead of submitting a 'suggestion' (O'Connell, I International Law 130 [1965]; Note: Immunity from Suit of Foreign Sovereign Instrumentalities and Obligations, 50 Yale Law Journal 1088 [1941]). "In the Philippines, the practice is for the foreign government or the international organization to first secure an executive endorsement of its claim of sovereign or diplomatic immunity. But how the Philippine Foreign Office conveys its endorsement to the courts varies. In International Catholic Migration Commission vs. Calleja, 190 SCRA 130 (1990), the Secretary of Foreign Affairs just sent a letter directly to the Secretary of Labor and Employment, informing the latter that the respondentemployer could not be sued because it enjoyed diplomatic immunity. In World Health Organization vs. Aquino, 48 SCRA 242 (1972), the Secretary of Foreign Affairs sent the trial court a telegram to that effect. In Baer vs. Tizon, 57 SCRA 1 (1974), the U.S. Embassy asked the Secretary of Foreign Affairs to request the Solicitor General to make, in behalf of the Commander of the United States Naval Base at Olongapo City, Zambales, a 'suggestion' to respondent Judge. The Solicitor General embodied the 'suggestion' in a manifestation and memorandum as amicus curiae. "In the case at bench, the Department of Foreign Affairs, through the Office of Legal Affairs moved with this Court to be allowed to intervene on the side of petitioner. The Court allowed the said Department to file its memorandum in support of petitioner's claim of sovereign immunity. "In some cases, the defense of sovereign immunity was submitted directly to the local courts by the respondents through their private counsels (Raquiza vs. Bradford, 75 Phil. 50 [1945]; Miquiabas vs. Philippine-Ryukyus Command, 80 Phil. 262 [1948]; United States of America vs. Guinto, 182 SCRA 644 [1990] and companion cases). In cases where the foreign states bypass the Foreign Office, the courts can inquire into the facts and make their own determination as to the nature of the acts and transactions involved."

Sources: Full text of case Case digest -----------------------------------------------------------------------------------------------------------Immunity of International Organizations and Agencies

G.R. No. 86773 February 14, 1992 SOUTHEAST ASIAN FISHERIES DEVELOPMENT CENTER-AQUACULTURE DEPARTMENT (SEAFDEC-AQD), DR. FLOR LACANILAO (CHIEF), RUFIL CUEVAS (HEAD, ADMINISTRATIVE DIV.), BEN DELOS REYES (FINANCE OFFICER), petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION and JUVENAL LAZAGA, respondents. FACTS: SEAFDEC-AQD is a department of an international organization, the Southeast Asian Fisheries Development Center, organized through an agreement entered into in Bangkok, Thailand on December 28, 1967 by the governments of Malaysia, Singapore, Thailand, Vietnam, Indonesia and the Philippines with Japan as the sponsoring country (Article 1, Agreement Establishing the SEAFDEC).

On May 8, 1986, petitioner Lacanilao in his capacity as Chief of SEAFDEC-AQD sent a notice of termination to private respondent informing him that due to the financial constraints being experienced by the department, his services shall be terminated at the close of office hours on May 15, 1986 and that he is entitled to separation benefits equivalent to one (1) month of his basic salary for every year of service plus other benefits (Rollo, p. 153). Upon petitioner SEAFDEC-AQD's failure to pay private respondent his separation pay, the latter filed on March 18, 1987 a complaint against petitioners for non-payment of separation benefits plus moral damages and attorney's fees with the Arbitration Branch of the NLRC (Annex "C" of Petition for Certiorari).

Petitioners in their answer with counterclaim alleged that the NLRC has no jurisdiction over the case inasmuch as the SEAFDEC-AQD is an international organization and that private respondent must first secure clearances from the proper departments for property or money accountability before any claim for separation pay will be paid, and which clearances had not yet been obtained by the private respondent. A formal hearing was conducted whereby private respondent alleged that the non-issuance of the clearances by the petitioners was politically motivated and in bad faith. On the other hand, petitioners alleged that private respondent has property accountability and an outstanding obligation to SEAFDEC-AQD in the amount of P27,532.11. Furthermore, private respondent is not entitled to accrued sick leave benefits amounting to P44,000.00 due to his failure to avail of the same during his employment with the SEAFDEC-AQD ISSUE: Whether or not the National Labor Relations Commissions has jurisdiction over the case. HELD: The Court held that the present petition relates to a controversy between two claimants to the same position; this is not a controversy between the SEAFDEC on the one hand, and an officer or employee, or a person claiming to be an officer or employee, of the SEAFDEC, on the other hand. There is before us no question involving immunity from the jurisdiction of the Court, there being no plea for such immunity whether by or on behalf of SEAFDEC, or by an official of SEAFDEC with the consent of SEAFDEC (Id., at 300; emphasis supplied). WHEREFORE, finding SEAFDEC-AQD to be an international agency beyond the jurisdiction of the courts or local agency of the Philippine government, the questioned decision and resolution of the NLRC dated July 26, 1988 and January 9, 1989, respectively, are hereby REVERSED and SET ASIDE for having been rendered without jurisdiction. No costs.


(A) Permanent international commissions and administrative bodies have been created by the agreement of a considerable number of States for a variety of international purposes, economic or social and mainly non-political. Among the notable instances are the International Labor Organization, the International Institute of Agriculture, the International Danube Commission. In so far as they are autonomous and beyond the control of any one State, they have a distinct juridical personality independent of the municipal law of the State where they are situated. As such, according to one leading authority "they must be deemed to possess a species of international personality of their own." (Salonga and Yap, Public International Law, 83 [1956 ed.])

The then Minister of Justice likewise opined that Philippine Courts have no jurisdiction over SEAFDEC-AQD in Opinion No. 139, Series of 1984 (B) One of the basic immunities of an international organization is immunity from local jurisdiction, i.e., that it is immune from the legal writs and processes issued by the tribunals of the country where it is found. (See Jenks, Id., pp. 37-44) The obvious reason for this is that the subjection of such an organization to the authority of the local courts would afford a convenient medium thru which the host government may interfere in there operations or even influence or control its policies and decisions of the organization; besides, such subjection to local jurisdiction would impair the capacity of such body to discharge its responsibilities impartially on behalf of its member-states. In the case at bar, for instance, the entertainment by the National Labor Relations Commission of Mr. Madamba's reinstatement cases would amount to interference by the Philippine Government in the management decisions of the SEARCA governing board; even worse, it could compromise the desired impartiality of the organization since it will have to suit its actuations to the requirements of Philippine law, which may not necessarily coincide with the interests of the other member-states. It is precisely to forestall these possibilities that in cases where the extent of the immunity is specified in the enabling instruments of international organizations, jurisdictional immunity from the host country is invariably among the first accorded. (See Jenks, Id.; See also Bowett, The Law of International Institutions, pp. 284-1285). SELECTED DOCUMENTS RELATING TO THE FUND, THE UNITED NATIONS, AND OTHER INTERNATIONAL ORGANIZATIONS ARTICLE VI Officials SECTION 18 Each specialized agency will specify the categories of officials to which the provisions of this Article and of Article VIII shall apply. It shall communicate them to the Governments of all States parties to this Convention in respect of that agency and to the Secretary-General of the United Nations. The names of the officials included in these categories shall from time to time be made known to the above-mentioned Governments. SECTION 19 Officials of the specialized agencies shall: (a) Be immune from legal process in respect of words spoken or written and all acts performed by them in their official capacity; (b) Enjoy the same exemptions from taxation in respect of the salaries and emoluments paid to them by the specialized agencies and on the same conditions as are enjoyed by officials of the United Nations;

(c) Be immune, together with their spouses and relatives dependent on them, from immigration restrictions and alien registration; (d) Be accorded the same privileges in respect of exchange facilities as are accorded to officials of comparable rank of diplomatic missions; (e) Be given, together with their spouses and relatives dependent on them, the same repatriation facilities in time of international crises as officials of comparable rank of diplomatic missions; (f) Have the right to import free of duty their furniture and effects at the time of first taking up their post in the country in question.

Source: Full text of case *this digest is mine -----------------------------------------------------------------------------------------------------------G.R. No. 106483 May 22, 1995 ERNESTO L. CALLADO, petitioner, vs. INTERNATIONAL RICE RESEARCH INSTITUTE, respondent. Facts: Ernesto Callado, petitioner, was employed as a driver at the IRRI. One day whiledriving an IRRI vehicle on an official trip to the NAIA and back to the IRRI, petitioner figured in an accident.Petitioner was informed of the findings of a preliminary investigation conducted by the IRRI's Human Resource Development Department Manager. In view of the findings, hewas charged with: (1) Driving an institute vehicle while on official duty under the influence of liquor; (2) Serious misconduct consisting of failure to report tosupervisors the failure of the vehicle to start because of a problem with the car battery, and (3) Gross and habitual neglect of duties. Petitioner submitted his answer and defenses to the charges against him.However, IRRIissued a Notice of Termination to petitioner. Thereafter, petitioner filed a complaint before the Labor Arbiter for illegal dismissal, illegal suspension and indemnity pay with moral and exemplary damages and attorney's fees.IRRI wrote the Labor Arbiter to inform him that the Institute enjoys immunity from legal process by virtue of Article 3 of Presidential Decree No. 1620, and that it invokes suchdiplomatic immunity and privileges as an international organization in the instant casefiled by petitioner, not having waived the same.While admitting IRRI's defense of immunity, the Labor Arbiter, nonetheless, cited anOrder issued by the Institute to the effect that "in all cases of termination, respondentIRRI waives its immunity," and, accordingly, considered the defense of immunity nolonger a legal obstacle in resolving the case.The NLRC found merit in private respondent's appeal and, finding that IRRI did not waiveits immunity, ordered the aforesaid decision of the Labor Arbiter set aside and thecomplaint dismissed.In this petition petitioner contends that the immunity of the IRRI as an internationalorganization granted by Article 3 of Presidential Decree No. 1620 may not be invoked inthe case at bench inasmuch as it waived the same by virtue of its Memorandum on"Guidelines on the handling of dismissed employees in relation to P.D. 1620." Issue: Did the (IRRI) waive its immunity from suit in this dispute which arose from an employer-employee relationship?

Held: No.P.D. No. 1620, Article 3 provides: Art.3. Immunity from Legal Process. The Institute shall enjoy immunity from any penal,civil and administrative proceedings, except in so far as that immunity has been expressly waived by the Director-General of the Institute or his authorized representatives.

The SC upholds the constitutionality of the aforequoted law. There is in this case "acategorical recognition by the Executive Branch of the Government that IRRI enjoysimmunities accorded to international organizations, which determination has been held to be a political question conclusive upon the Courts in order not to embarrass a politicaldepartment of Government. It is a recognized principle of international law and under our system of separation of powersthat diplomatic immunity is essentially a political question and courts should refuse to lookbeyond a determination by the executive branch of the government, and where the plea of diplomatic immunity is recognized and affirmed by the executive branch of the government asin the case at bar, it is then the duty of the courts to accept the claim of immunity uponappropriate suggestion by the principal law officer of the government or other officer actingunder his direction. The raison d'etre for these immunities is the assurance of unimpeded performance of their functions by the agencies concerned.The grant of immunity to IRRI is clear and unequivocal and an express waiver by its Director-General is the only way by which it may relinquish or abandon this immunity.In cases involving dismissed employees, the Institute may waive its immunity, signifying that such waiver is discretionary on its part.

Sources: Full text of case Case digest -----------------------------------------------------------------------------------------------------------G.R. No. 113191 September 18, 1996 DEPARTMENT OF FOREIGN AFFAIRS, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION, HON. LABOR ARBITER NIEVES V. DE CASTRO and JOSE C. MAGNAYI, respondents. Facts: A complaint for illegal dismissal was filed against the Asian Development Bank ("ADB"). Uponreceipt of summonses, both the ADB and the DFA notified the Labor Arbiter that the ADB, as well as itsPresident and Officers, were covered by an immunity from legal process except for borrowings,guaranties or the sale of securities pursuant to Article 50(1) and Article 55 of the Agreement Establishingthe Asian Development Bank (the "Charter") in relation to Section 5 and Section 44 of the AgreementBetween The Bank And The Government Of The Philippines Regarding The Bank's Headquarters (the"Headquarters Agreement"). The Labor Arbiter took cognizance of the complaint on the impression thatthe ADB had waived its diplomatic immunity from suit, and issued a judgment in favor of thecomplainant. The ADB did not file an appeal, but the DFA sought a nullification with the NLRC. The latterdenied the request.Issue: Whether or not ADB is immune from suit? Ruling: No. Under the Charter and HeadquartersAgreement, the ADB enjoys immunity from legal process of every form, except in the specified cases of borrowing and guarantee operations, as well as the purchase, sale and underwriting of securities. The Banks officers, on their part, enjoy

immunity in respect of all acts performed by them in their official capacity. The Charter and the Headquarters Agreement granting these immunities and privileges aretreaty covenants and commitments voluntarily assumed by the Philippine government which must be respected. Being an international organization that has been extended a diplomatic status, the ADB isindependent of the municipal law. One of the basic immunities of an international organization is immunity from local jurisdiction, i.e., that it is immune from the legal writs and processes issued by the tribunals of the country where it is found. The obvious reason for this is that the subjection of such an organization to the authority of the local courts would afford a convenient medium thru which the host government may interfere in their operations or even influence or control its policies and decisions of the organization; besides, such subjection to local jurisdiction would impair the capacity of such body to discharge its responsibilities impartially on behalf of its member-states."

The ADB didn't descend to the level of an ordinary party to a commercial transaction, which should have constituted a waiver of its immunity from suit, by entering into service contracts with different private companies. There are two conflicting concepts of sovereign immunity, each widely held and firmly established. According to the classical or absolute theory, a sovereign cannot, without its consent, be made a respondent in the Courts of another sovereign. According to the newer or restrictive theory, the immunity of the sovereign is recognized only with regard to public acts or acts jure imperii of a state, but not with regard to private act or acts jure gestionis. Certainly, the mere entering into a contract by a foreign state with a private party cannot be the ultimate test. Such an act can only be the start of the inquiry.

The logical question is whether the foreign state is engaged in the activity in the regular course of business. If the foreign state is not engaged regularly in a business or trade, the particular act or transaction must then be tested by its nature. If the act is in pursuit of a sovereignactivity, or an incident thereof, then it is an act jure imperii, especially when it is not undertaken for gainor profit. The service contracts referred to by private respondent have not been intended by the ADB forprofit or gain but are official acts over which a waiver of immunity would not attach.

Issue: Whether or not the DFA has the legal standing to file the present petition?

Ruling: The DFA's function includes, among its other mandates, the determination of persons and institutions covered by diplomatic immunities, a determination which, when challenged, entitles it to seek relief from the court so as not to seriously impair the conduct of the country's foreign relations.The DFA must be allowed to plead its case whenever necessary or advisable to enable it to help keep the credibility of the Philippine government before the international community. When international agreements are concluded, the parties thereto are deemed to have likewise accepted the responsibility of seeing to it that their agreements are duly regarded. In our country, this task falls principally on the DFA as being the highest executive department with the competence and authority to so act in this aspect of the international arena.

Sources: Full text of case Case digest ------------------------------------------------------------------------------------------------------------

Immunity of Government Agencies Incorporated Municipal Corporations


Facts:Petitioner is a municipal corporation existing under and in accordance with the laws of the Republic of the Philippines. At about 7 am of December 16, 1965, a collision occurred involving a passenger jeepney driven by Bernardo Balagot and owned by the Estate of Macario Nieveras, a gravel and sand truck driven by Jose Manandeg and owned by Tanquilino Velasquez and a dump truck of the petitioner and driven by Alfredo Bislig. Several passengers of the jeepney including Laureano Bania Sr. died as a result of the injuries they sustained and 4 others suffered physical injuries. Private respondents instituted an action against Nieveras and Balagot before the CFI. The defendants filed a third party complaint against petitioner and Bislig. The complaint was then amended to implead petitioner and Bislig. Petitioner raised as defense lack of cause of action, non suability of the State, prescription and negligence of the owner and driver of the jeepney. The trial court rendered a decision ordering the petitioner and Bislig to pay the plaintiffs. The owner and driver of the jeepney were absolved from liability. Petitioner filed an MR which was dismissed for having been filed out of time. Issue:WON the court committed grave abuse of discretion when it deferred and failed to resolve the defense of non-suability of the State amounting to lack of jurisdiction in a motion to dismiss. Held:Yes Ratio: In the case at bar, the judge deferred the resolution of the defense of non-suability of the State until trial. However, the judge failed to resolve such defense, proceeded with the trial and then rendered a decision against the municipality and its driver. The judge did not commit GAD when it arbitrarily failed to resolve the issue of non-suability of the State in the guise of the municipality. However, the judge acted in excess of his jurisdiction when in his decision he held the municipality liable for the quasi-delict committed by its regular employee. The doctrine of non-suability of the State is expressly provided for in Article XVI, Section 3 of the Consti, to wit: "the State may not be sued without its consent." Express consent may be embodied in a general law or a special law. The standing consent of the State to be sued in case of money claims involving liability arising from contracts is found in Act No. 3083. A special law may be passed to enable a person to sue the government for an alleged quasi-delict. Consent is implied when the government enters into business contracts, thereby descending to the level of the other contracting party, and also when the State files a complaint, thus opening itself to a counterclaim. Municipal corporations are agencies of the State when they are engaged in governmental functions

and therefore should enjoy the sovereign immunity from suit. Nevertheless, they are subject to suit even in the performance of such functions because their charter provided that they can sue and be sued. A distinction should first be made between suability and liability. "Suability depends on the consent of the state to be sued, liability on the applicable law and the established facts. The circumstance that a state is suable does not necessarily mean that it is liable; on the other hand, it can never be held liable if it does not first consent to be sued. Liability is not conceded by the mere fact that the state has allowed itself to be sued. When the state does waive its sovereign immunity, it is only giving the plaintiff the chance to prove, if it can, that the defendant is liable." Anent the issue of whether or not the municipality is liable for the torts committed by its employee, the test of liability of the municipality depends on whether or not the driver, acting in behalf of the municipality, is performing governmental or proprietary functions (Torio vs. Fontanilla). According to City of Kokomo vs Loy(Indiana SC), municipal corporations exist in a dual capacity, and their functions are twofold. In one they exercise the right springing from sovereignty, and while in the performance of the duties pertaining thereto, their acts are political and governmental. Their officers and agents in such capacity, though elected or appointed by them, are nevertheless public functionaries performing a public service, and as such they are officers, agents, and servants of the state. In the other capacity the municipalities exercise a private, proprietary or corporate right, arising from their existence as legal persons and not as public agencies. Their officers and agents in the performance of such functions act in behalf of the municipalities in their corporate or individual capacity, and not for the state or sovereign power." It has already been remarked that municipal corporations are suable because their charters grant them the competence to sue and be sued. Nevertheless, they are generally not liable for torts committed by them in the discharge of governmental functions and can be held answerable only if it can be shown that they were acting in a proprietary capacity. In the case at bar, the driver of the dump truck of the municipality insists that "he was on his way to the Naguilian river to get a load of sand and gravel for the repair of San Fernando's municipal streets." In the absence of any evidence to the contrary, the regularity of the performance of official duty is presumed pursuant to Section 3(m) of Rule 131 of the Revised Rules of Court. Hence, We rule that the driver of the dump truck was performing duties or tasks pertaining to his office.We already stressed in the case of Palafox, et. al. vs. Province of Ilocos Norte, the District Engineer, and the Provincial Treasurer that "the construction or maintenance of roads in which the truck and the driver worked at the time of the accident are admittedly governmental activities." After a careful examination of existing laws and jurisprudence, We arrive at the conclusion that the municipality cannot be held liable for the torts committed by its regular employee, who was then engaged in the discharge of governmental functions. Hence, the death of the passenger tragic and deplorable though it may be imposed on the municipality no duty to pay monetary compensation.

Sources: Full text of case Case digest -----------------------------------------------------------------------------------------------------------Unincorporated If principal function is governmental

G.R. No. 42204 January 21, 1993 HON. RAMON J. FAROLAN, JR., in his capacity as Commissioner of Customs, petitioner, vs. COURT OF TAX APPEALS and BAGONG BUHAY TRADING, respondents.

Facts: S/S Pacific Hawk vessel with Registry No. 170 arrived on January 30, 1972 at the Port ofManila carrying among others, 80 bales of screen net consigned to Baging BuhayTrading (Baging Buhay). The import was classified under Tariff Heading no. 39.06-B of theTariff and Customs Code at 35% ad valorem. Bagong Buhay paid the duties and taxesdue in the amount of P11,350.00.The Office of the Collector of Customs ordered a re-examination of the shipment uponhearing the information that the shipment consisted of mosquito net made of nylonunder Tariff Heading No. 62.02 of the Tariff and Customs Code. Upon re-examination, itturns out that the shipment was undervalued in quantity and value as previouslydeclared. Thus the Collector of Customs forfeited the shipment in favor of thegovernment.Private respondent filed a petition on August 20, 1976 for the release of the questionedgoods which the Court denied. On June 2,1986, 64 bales out of the 80 bales werereleased to Bagong Buhay after several motion. The sixteen remaining bales weremissing. The respondent claims that of the 143,454 yards released, only 116,950 yardswere in good condition and the rest were in bad condition. Thus, respondents demandsthat the Bureau of Customs be ordered to pay for damages for the 43,050 yards itactually lost. Issue: Whether or not the Collector of Customs may be held liable for the 43,050 yardsactually lost by the private respondent. Held: Bureau of Customs cannot be held liable for actual damages that the privaterespondent sustained with regard to its goods. Otherwise, to permit privaterespondent's claim to prosper would violate the doctrine of sovereignimmunity. Since it demands that the Commissioner of Customs be ordered to pay for actual damages it sustained, for which ultimately liability will fall on the government, it isobvious that this case has been converted technically into a suit against the state. On this point, the political doctrine that state may not be sued without its consent, categorically applies. As an unincorporated government agency without any separate judicial personality of its own, the Bureau of Customs enjoys immunity from suit. Alongwith the Bureau of Internal Revenue, it is invested with an inherent power of sovereignty,namely taxation. As an agency, the Bureau of Customs performs the governmentalfunction of collecting revenues which is defined not a proprietary function. Thus privaterespondents claim for damages against the Commissioner of Customs must fails.

Sources: Full text of case Case digest If proprietary suable -----------------------------------------------------------------------------------------------------------Suits against Public Officers


*will make digest of this on Saturday (July 28, 2012) Sources: Full text of case -----------------------------------------------------------------------------------------------------------G.R. No. 91359, September 25, 1992 VETERANS MANPOWER AND PROTECTIVE SERVICES, INC., PETITIONER, vs. THE COURT OF APPEALS, THE CHIEF OF PHILIPPINE CONSTABULARY AND PHILIPPINE CONSTABULARY SUPERVISORY UNIT FOR SECURITY AND INVESTIGATION AGENCIES (PCSUSIA), RESPONDENTS.

FACTS: This is a petition for review on certiorari of the decision dated August 11, 1989. On May 12, 1986, a Memorandum of Agreement was executed by PADPAO and the PC Chief, which fixed the minimum monthly contract rate per guard for eight (8)hours of service security per day. On June 29, 1987, Odin Security Agency filed a complaint with PADPAO accusing VMPSI of cut-throat competition. PADPAO and PC-SUSIA found VMPSI guilty and recommended its expulsion from PADPAO and thecancellation of its license to operate a security agency. As a result, PADPAO refused to issue a clearance/certificate of membership to VMPSI when it requested one. VMPSI filed Civil Case No. 88471 against the PC-Chief and PC-SUSIA in theRTC-Makati Branch 135, on March 28, 1988. On the same date, the court issued a restraining order enjoining the PC Chief andPCcommitting acts that would result in the cancellation or non-renewa Chief and PChad not given consent thereto and the restraining order or preliminary injunction would not serve any purpose because there was nomore license to be cancelled. Respondent VMPSI opposed the motion. On April 18, 1988 the lower co VMPSI reiterated its application for the issuance of preliminary injunction because PC-SUSIA had rejected payment of the penalty for its failure to submit its application forrenewal of its license. On June 10, 1988, the RTC-Makati issued a writ of preliminary injunction upon a bond of PC-Chief and PC-SUSIA filed a Motion forReconsideration of the above order, but it was denied by the court. On November 3, 1988, the PC-Chief and PC-SUSIA soughtrelief by a petition for certiorari in the Court of Appeals. On August 11, 1989, the Court of Appeals granted the petition.

HELD: Wherefore, the petition for review is DENIED and the judgment appealed from is AFFIRMED in toto. The State may notbe sued without its consent. Invoking this rule, the PC Chief and PC-SUSIA, being instrumentalities of the national governmentexercising a primarily governmental function of regulating the organization and operation of private detective, watchmen, orsecurity guard agencies, nt seeks not only to compel the public respondents to act in a certain way, but worse, because VMPSIseeks actual and compensatory damages in the sum said public respondents. Even if its action prospers, the payment of its monetary claims may not beenforced because the State did not consent to appropriate the necessary funds for that purpose. PRINCIPLE: State's immunity from suit.

Sources: Full text of case Case digest -----------------------------------------------------------------------------------------------------------209 SCRA 357 (28 May 1992) M.H. Wylie and Capt. James Williams vs. Aurora I. Rarang and the IAC

FACTS: AT THE NAVAL BASE. In Feb. 1978, M.H. Wylie was the assistant administrative officer and Capt. James Williams was the commanding officer of the US Naval Base in Subic Bay, Olongapo City. Aurora I. Rarang was employed as a merchandise control guard in the Office of the Provost Marshal. THE POD. Wylie, in his capacity as asst. admin. officer, supervised the publication of the Naval Base stations Plan of the Day (POD), which featured important announcements, necessary precautions, and general matters of interest to military personnel. One of its regular features was the action line inquiry. THE CAUSE OF THIS MESS. On Feb. 3, 1978, the POD published, under the NAVSTA Action Line Inquiry, the ff: Question: I have observed that Merchandise Control inspector/ inspectress are (sic) consuming for their own benefit things they have confiscated from Base Personnel. The observation is even more aggravated by consuming such confiscated items as cigarettes and food stuffs PUBLICLY. This is not to mention Auring who is in herself, a disgrace to her division and to the Office of the Provost Marshal. In lieu of this observation, may I therefore, ask if the head of the Merchandise Control Division is aware of this malpractice? Answer: Merchandise Control Guards and all other personnel are prohibited from appropriating confiscated items for their own consumption or use. Two locked containers are installed at the Main Gate area for deposit of confiscated items and the OPM evidence custodian controls access to these containers. Merchandise Control Guards are permitted to eat their meals at their worksite due to

heavy workload. Complaints regarding merchandise control guards procedure or actions may be made directly at the Office of the Provost Marshal for immediate and necessary action. Rarang was the Auring referred to here, as she was the only one with that name in the Office of the Provost Marshall, and Wylies letter of apology for the inadvertent publication was also conclusive proof of this. AN ACTION FOR DAMAGES was instituted by Rarang against Wylie, Williams, and the US Naval Base. She prayed for P300K moral damages, exemplary damages, and P50K attorneys fees. RARANGS ALLEGATIONS: the article constituted false, injurious, and malicious defamation and libel tending to impeach her honesty, virtue and reputation exposing her to public hatred, contempt and ridicule; and that the libel was published and circulated in the English language and read by almost all the U.S. Naval Base personnel. WYLIE, WILLIAMS, THE NAVAL BASE FILED A MOTION TO DISMISS, BASED ON THESE GROUNDS: 1. Wylie and Williams acted in the performance of their official functions as officers of the US Navy and are immune from suit; 2. The US Naval Base is an instrumentality of the US government which cannot be sued without its consent; and 3. lack of jurisdiction over the subject matter and the parties. MOTION DENIED. THE TCS DECISION: the acts of Wylie and Williams werent official acts of the US government in the operation and control of the Base but personal and tortious acts which are exceptions to the general rule that a sovereign country cant be sued in the court of another country without its consent. Thus their acts werent imputable against the US government but were done in their individual and personal capacities. They were ordered to pay Rarang P100K moral and exemplary damages, and P30K attorneys fees. However, the suit against the US Naval Base was dismissed. BOTH PARTIES APPEALED. Wylie and Williams asserted that they are immune from suit since the publication was made in their official capacities as officers of the U. S. Navy, and that they did not intentionally and maliciously cause the publication. Rarang appealed as she wasnt satisfied with the award. THE IAC MODIFIED THE TCS DECISION: Rarang was awarded P175K moral damages and P60K exemplary damages. WYLIE AND WILLIAMS ARGUMENT in this Petition for Review: they made the publication in the performance of their official functions as administrative assistant (Wylie) and commanding officer (Williams) of the US Navy and were, therefore, immune from suit for their official actions. ISSUE: WON Wylie and Williams are liable for the published article in the POD. Does the grant of rights, power, and authority to the US under the RP-US Bases Treaty cover immunity of its officers from crimes and torts? HELD: YES and NO respectively. THE PRINCIPLE OF STATE IMMUNITY FROM SUIT, QUOTING US v. GUINTO: The rule that a state may not be sued without its consent, now expressed in Article XVI, Section 3, of the 1987 Constitution, is one of the generally accepted principles of international law that we have adopted as

part of the law of our land under Article II, Section 2Even without such affirmation, we would still be bound by the generally accepted principles of international law under the doctrine of incorporation As applied to the local state, the doctrine of state immunity is based on the justification given by Justice Holmes that there can be no legal right against the authority which makes the law on which the right depends! (Kawanakoa v. Polybank) There are other practical reasons for the enforcement of the doctrine. In the case of the foreign state sought to be impleaded in the local jurisdiction, the added inhibition is expressed in the maxim par in parem, non habet imperium . All states are sovereign equals and cannot assert jurisdiction over one another. A contrary disposition would, in the language of a celebrated case, unduly vex the peace of nations. (Da Haber v. Queen of Portugal) While the doctrine appears to prohibit only suits against the state without its consent, it is also applicable to complaints filed against officials of the state for acts allegedly performed by them in the discharge of their duties. The rule is that if the judgment against such officials will require the state itself to perform an affirmative act to satisfy the same, such as the appropriation of the amount needed to pay the damages awarded against them, the suit must be regarded as against the state itself although it has not been formally impleaded (Garcia v. Chief of Staff). In such a situation, the state may move to dismiss the complaint on the ground that it has been filed without its consent. The doctrine is sometimes derisively called the royal prerogative of dishonesty because of the privilege it grants the state to defeat any legitimate claim against it by simply invoking its nonsuability. That is hardly fair, at least in democratic societies, for the state is not an unfeeling tyrant unmoved by the valid claims of its citizens. In fact, the doctrine is not absolute and does not say the state may not be sued under any circumstance. On the contrary, the rule says that the state may not be sued without its consent, which clearly imports that it may be sued if it consents. The consent of the state to be sued may be manifested expressly or impliedly. Express consent may be embodied in a general law or a special law. Consent is implied when the state enters into a contract it itself commences litigationThe above rules are subject to qualification. Express consent is effected only by the will of the legislature through the medium of a duly enacted statute. (Rep. v. Purisima) not all contracts entered into by the government will operate as a waiver of its non-suability; distinction must be made between its sovereign and proprietary acts (US v. Ruiz). As for the filing of a complaint by the government, suability will result only where the government is claiming affirmative relief from the defendant. (Lim v. Brownell) THE NATURE AND EXTENT OF IMMUNITY FROM SUIT, ALSO UNDER US v. GUINTO: In the case of the US, the customary rule of international law on state immunity is expressed with more specificity in the RP-US Bases Treaty The petitioners also rely heavily on Baer v. Tizon to support their position that they are not suable, the US not having waived its sovereign immunity from suit. It is emphasized that in Baer, the Court held: The invocation of the doctrine of immunity from suit of a foreign state without its consent is appropriate insofar as alien armed forces are concerned, the starting point is Raquiza v. Bradford, a 1945 decision. In dismissing a habeas corpus petition for the release of petitioners confined by American army authorities, Justice Hilado cited Coleman v. Tennessee, where it was explicitly declared: It is well settled that a foreign army, permitted to march through a friendly country or to be stationed in it, by permission of its government or sovereign, is exempt from the civil and criminal jurisdiction of the place. Two years later, in Tubb and Tedrow v. Griess, this Court relied on Raquiza v. Bradford and cited in support excerpts from the works of the authoritative writers Accuracy demands the clarification that after the conclusion of the Philippine-American Military Bases Agreement, the treaty provision should control on such matter, the assumption being that there was a manifestation of the submission to jurisdiction on the part of the foreign power whenever

appropriate. More to the point is Syquia v. Almeda Lopez It was the ruling that respondent Judge acted correctly considering that the action must be considered as one against the U.S. Government. The opinion of Justice Montemayor continued: It is clear that the courts of the Philippines including the Municipal Court of Manila have no jurisdiction over the present case for unlawful detainer. The question of lack of jurisdiction was raised and interposed at the very beginning of the action. The U.S. Government has not given its consent to the filing of this suit which is essentially against her, though not in name. Moreover, this is not only a case of a citizen filing a suit against his own Government without the latters consent but it is of a citizen filing an action against a foreign government without said governments consent, which renders more obvious the lack of jurisdiction of the courts of his country. The principles of law behind this rule are so elementary and of such general acceptance that we deem it unnecessary to cite authorities in support thereof. The above observations do not confer on the US a blanket immunity for all acts done by it or its agents in the Philippines. Neither may the other petitioners claim that they are also insulated from suit in this country merely because they have acted as agents of the US in the discharge of their official functions. There is no question that the US, like any other state, will be deemed to have impliedly waived its non-suability if it has entered into a contract in its proprietary or private capacity. It is only when the contract involves its sovereign or governmental capacity that no such waiver may be implied In the words of Justice Vicente Abad Santos: The traditional rule of immunity excepts a State from being sued in the courts of another State without its consent or waiver. This rule is a necessary consequence of the principles of independence and equality of States. However, the rules of International Law are not petrified; they are constantly developing and evolving. And because the activities of states have multiplied, it has been necessary to distinguish them-between sovereign and governmental acts (jure imperii) and private, commercial and proprietary acts (jure gestionis). The result is that State immunity now extends only to acts jure imperii... The restrictive application of State immunity is proper only when the proceedings arise out of commercial transactions of the foreign sovereign, its commercial activities or economic affairs. Stated differently, a State may be said to have descended to the level of an individual and can thus be deemed to have tacitly given its consent to be sued only when it enters into business contracts. It does not apply where the contract relates to the exercise of its sovereign functions. The other petitioners in the cases before us all aver they have acted in the discharge of their official functions as officers or agents of the US. However, this is a matter of evidence. The charges against them may not be summarily dismissed on their mere assertion that their acts are imputable to the US, which has not given its consent to be sued. In fact, the defendants are sought to be held answerable for personal torts in which the US itself is not involved. If found liable, they and they alone must satisfy the judgment. SUMMARY OF THE EVENTS. The POD was published under the direction and authority of the commanding officer. The administrative assistant, among his other duties, is tasked to prepare and distribute the POD. The NAVSTA Action Line Inquiry is a regular feature of the POD , which was to provide personnel access to the Commanding Officer on matters they feel should be brought to his attention for correction or investigation . According to Wylie, the action line naming Auring was received about 3 weeks prior to the articles publication. It was forwarded to the Provost Marshal for comment, and the response included a short note stating that if the article was published, to remove the name. This note was forwarded to the executive officer and to the commanding officer for approval. The approval of the commanding officer was forwarded to the office of the Administrative Assistant for inclusion in the POD. A clerk typist in the office of the Administrative Assistant prepared the smooth copy of the POD and Wylie, the administrative assistant signed the smooth copy of the POD but failed to notice the reference to Auring in the action line inquiry.

As the article implied that Rarang was consuming and appropriating confiscated items, she was investigated by her supervisor. Before the article came out, she had been the recipient of commendations by her superiors for honesty in the performance of her duties. PART OF OFFICIAL FUNCTIONS. Wylie and Williams actively participated in screening the features and articles in the POD as part of their official functions. Under the rule that US officials in the performance of their official functions are immune from suit, then it should follow that they may not be held liable for the questioned publication. BUT: TAKE NOTE THAT THEY WERE SUED IN THEIR PERSONAL CAPACITIES for their alleged tortious acts in publishing a libelous article. And our laws and, we presume, those of the US dont allow the commission of crimes in the name of official duty, and these arent covered by the immunity agreement. CHAVEZ v. SANDIGANBAYAN on the law on immunity from suit of public officials is applicable here: the general rule is that public officials can be held personally accountable for acts claimed to have been performed in connection with official duties where they have acted ultra vires or where there is showing of bad faith A mere invocation of the immunity clause does not ipso facto result in the charges being automatically dropped. In the case of PCGG v. Pea, Chief Justice Teehankee added a clarification of the immunity accorded PCGG officials under Section 4(a) of Exec. Order No. I as follows: First, the main opinion does not claim absolute immunity for the members of the Commission, The cited section provides the Commissions members immunity from suit thus: No civil action shall lie against the Commission or any member thereof for anything done or omitted in the discharge of the task contemplated by this order. No absolute immunity like that sought by Mr. Marcos in his Constitution for himself and his subordinates is herein involved. It is understood that the immunity granted the members of the Commission by virtue of the unimaginable magnitude of its task to recover the plundered wealth and the States exercise of police power was immunity from liability for damages in the official discharge of the task granted the members of the Commission much in the same manner that judges are immune from suit in the official discharge of the functions of their office. Immunity from suit cannot institutionalize irresponsibility and nonaccountability nor grant a privileged status not claimed by any other official of the Republic. Where the petitioner exceeds his authority as Solicitor General, acts in bad faith, or maliciously conspir(es) with the PCGG commissioners in persecuting respondent Enrile by filing against him an evidently baseless suit in derogation of the latters constitutional rights and liberties, there can be no question that a complaint for damages does not confer a license to persecute or recklessly injure another. The actions governed by Articles 19, 20, 21, and 32 of the Civil Code on Human Relations may be taken against public officers or private citizens alike. ARGUMENT: that Williams as commanding officer is far removed in the chain of command from the offensive publication and it would be asking too much to hold him responsible for everything which goes wrong on the base. WHILE THIS IS TRUE AS A GEN. RULE, FOR THIS CASE NO. The records show that the offensive publication was sent to the commanding officer for approval and he approved it. Art. 2176 prescribes a civil liability for damages caused by a persons act or omission constituting fault or negligence. Fault or negligence in this Article covers not only acts not punishable by law but also acts criminal in character, whether intentional or voluntary or negligent. Moreover, Art. 2219(7) provides that moral damages may be recovered in case of libel, slander or any other form of defamation. In

effect, the offended party in these cases is given the right to receive from the guilty party moral damages for injury to his feelings and reputation in addition to punitive or exemplary damages . ULTRA VIRES ACT CANT BE PART OF OFFICIAL DUTY. Indeed the imputation of theft contained in the POD is a defamation against Rarangs character and reputation. Wylie himself admitted that the Office of the Provost Marshal explicitly recommended the deletion of the name if the article was published, but they were negligent because under their direction they issued the publication without deleting the name. Such act or omission is ultra vires and cannot be part of official duty. It was a tortious act which ridiculed Rarang, and as a result she suffered besmirched reputation, serious anxiety, wounded feelings and social humiliation, specially so, since the article was baseless and false. Wylie and Williams alone, in their personal capacities, are liable for the damages they caused. WHEREFORE, the petition is hereby DISMISSED. The questioned decision and resolution of the IAC are AFFIRMED.

Sources: -----------------------------------------------------------------------------------------------------------Consent to be sued Express Consent Republic v. Feliciano, 148 SCRA 424 * can't find texts or digest General Law CA 327; PD 1445; Art. 2180; Act No. 3038 * can't find this either Special Law 191 Merrit vs. Government of the Philippine Islands 34 Phil. 311 FACTS When the plaintiff, riding on a motorcycle, was going toward the western part of Calle Padre Faura, passing along the west side thereof at a speed of ten to twelvemiles an hour, upon crossing Taft Avenue and when he was ten feet from thesouthwestern intersection of said streets, the General Hospital ambulance, uponreaching said avenue, instead of turning toward the south, after passing the centerthereof, so that it would be on the left side of said avenue, as is prescribed by theordinance and the Motor Vehicle Act, turned suddenly and unexpectedly and long before reaching the center of the street, into the right side of Taft Avenue, withouthaving sounded any whistle or horn, by which movement it struck the plaintiff, who was already six feet from the southwestern point or from the post place there. By reason of the resulting collision, the plaintiff was so severely injured that,according to Dr. Saleeby, who examined him on the very same day that he was takento the General Hospital, he was suffering from a depression in the left parietalregion, a would in the same place and in the back part of his head, while bloodissued from his nose and he was entirely unconscious. As a consequence of the loss the plaintiff suffered in the efficiency of his work as acontractor, he had to dissolved the partnership he had formed with the engineer. Wilson, because he was incapacitated from making mathematical calculations onaccount of the condition of his leg and of his mental faculties, and he had to give upa contract he had for the construction of the Uy Chaco building.

As the negligence which caused the collision is a tort committed by an agent oremployee of the Government, the inquiry at once arises whether the Government islegally-liable for the damages resulting therefrom. ISSUES & ARGUMENTS W/N the Government is liable? HOLDING & RATIO DECIDENDI Paragraph 5 of article 1903 of the Civil Code reads: The state is liable in this sense when it acts through a special agent, but not whenthe damage should have been caused by the official to whom properly it pertainedto do the act performed, in which case the provisions of the preceding article shallbe applicable. The supreme court of Spain in defining the scope of this paragraph said: That the obligation to indemnify for damages which a third person causes toanother by his fault or negligence is based, as is evidenced by the same Law 3, Title15, Partida 7, on that the person obligated, by his own fault or negligence, takes partin the act or omission of the third party who caused the damage. It followstherefrom that the state, by virtue of such provisions of law, is not responsible forthe damages suffered by private individuals in consequence of acts performed by itsemployees in the discharge of the functions pertaining to their office, becauseneither fault nor even negligence can be presumed on the part of the state in theorganization of branches of public service and in the appointment of its agents; onthe contrary, we must presuppose all foresight humanly possible on its part in orderthat each branch of service serves the general weal an that of private personsinterested in its operation. Between these latter and the state, therefore, no relationsof a private nature governed by the civil law can arise except in a case where thestate acts as a judicial person capable of acquiring rights and contracting obligations.(Supreme Court of Spain, January 7, 1898; 83 Jur. Civ., 24.) It is, therefore, evidence that the State (the Government of the Philippine Islands) isonly liable, according to the above quoted decisions of the Supreme Court of Spain,for the acts of its agents, officers and employees when they act as special agents within the meaning of paragraph 5 of article 1903, supra, and that the chauffeur of the ambulance of the General Hospital was not such an agent.

Sources: -----------------------------------------------------------------------------------------------------------Implied Consent When State commences litigation G.R. No. L-11897 October 31, 1964 FERNANDO A. FROILAN, plaintiff-appellee, vs. PAN ORIENTAL SHIPPING COMPANY, defendant-appellant, REPUBLIC OF THE PHILIPPINES, and COMPANIA MARITIMA, intervenors-appellees. FACTS: Defendant Pan Oriental took possession of the vesselin question after it had been repossessed by the ShippingAdministration and title thereto reacquired by thegovernment, following the original purchaser, FernandoFroilans, default in his payment of the unpaid balanceand insurance premiums for the said vessel. Pan Orientalchartered said vessel and operated the same after it hadrepaired the vessel and paid the stipulated initial payment, thereby exercising its option to purchase, pursuant to a bareboat charter contract entered betweensaid company and the Shipping

Corporation.The Cabinet resolved to restore Froilan to his rightsunder the original contract of sale on condition that heshall pay a sum of money upon delivery of the vessel tohim, that he shall continue paying the remaininginstallments due, and that he shall assume the expensesincurred for the repair and by docking of the vessel. PanOriental protested to this restoration of Froilans rightsunder the contract of sale, for the reason that when thevessel was delivered to it, the Shipping Administrationhad authority to dispose of said authority to the property,Froilan having already relinquished whatever rights hemay have thereon. Froilan paid the required cash of P10,000.00 and as Pan Oriental refused to surrender possession of the vessel, he filed an action for in the CFIof Manila to recover possession thereof and have himdeclared the rightful owner of said property.The Republic of the Philippines was allowed tointervene in said civil case praying for the possession of the in order that the chattel mortgage constituted thereonmay be foreclosed. ISSUE: Whether or not the governments motion to dismissPan Oriental counterclaims may prosper. HELD:Under the circumstances already ad voted to, PanOriental cannot be considered a possessor in bad faithuntil after the institution of the instant case. However,since it is not disputed that said appellant is entitled tothe refund of such expenses with the right to retain thevessel until he has been reimbursed therefore. As it is bythe corrected acts of defendant and intervenor Republicof the Philippines that the appellant ha a lien far hisexpenses, appellees Froilan, Compania Maratma, and theRepublic of the Philippines are declared liable for thereimbursement to appellant of its legitimate expenses, asallowed by law, with legal interest from the time of disbursement. Sources: Full text of case Case digest -----------------------------------------------------------------------------------------------------------When State enters into a business contract US Vs. Ruiz 136 SCRA 487 Facts: The usa had a naval base in subic, zambales. The base was one of those provided in the military bases agreement between phils. and the US. Respondent alleges that it won in the bidding conducted by the US for the constrcution of wharves in said base that was merely awarded to another group. For this reason, a suit for specific preformance was filed by him against the US. Issue: Whether the US naval base in bidding for said contracts exercise governmental functions to be able to invoke state immunity. Held: The traditional role of the state immunity excempts a state from being sued in the courts of another state without its consent or waiver. This rule is necessary consequence of the principle of indepemndence and equality of states. Howecer, the rules of international law are not petrified; they are continually and evolving and because the activities of states have multiplied. It has been necessary to distinguish them between sovereign and governmental acts and private, commercial and proprietory acts. the result is that state immunity now extends only to sovereign and governmental acts. The restrictive application of state immunity is proper only when the proceedings arise out of commercial transactions of the foreign sovereign. Its commercial activities of economic affairs. A state may be descended to the level of an individual and can thus be deemed to have tacitly given its consent to be sued. Only when it enters into business contracts. It does not apply where the conracts relates the exercise of its sovereign function. In this case, the project are integral part of the

naval base which is devoted to the defense of both US and phils., indisputably, a function of the government of highest order, they are not utilized for , nor dedicated to commercial or business purposes.

Source: -----------------------------------------------------------------------------------------------------------Suability not outright liability Meritt v. Gov't. of the Phil. Islands, 34 Phil. 311 *given G.R. No. L-55963 December 1, 1989 SPOUSES JOSE FONTANILLA AND VIRGINIA FONTANILLA, petitioners, vs. HONORABLE INOCENCIO D. MALIAMAN and NATIONAL IRRIGATION ADMINISTRATION, respondents FACTS: On December 1, 1989, the Court rendered a decision declaring National Irrigation Administration(NIA), a government agency performing proprietary functions. Like an ordinary employer, NIA washeld liable for the injuries, resulting in death, of Francisco Fontanilla, son of petitioner spouses Jose and Virginia Fontanilla, caused by the fault and/or negligence of NIAs driver employee Hugo Garcia; and NIA was ordered to pay the petitioners the amounts of P 12,000 for the death of the victim;P3,389 for hospitalization and burial expenses; P30,000 as moral damages; P8,000 as exemplary damages, and attorneys fees of 20% of the total award. The National Irrigation Administration (NIA) maintains, however, that it does not perform solely andprimarily proprietary functions, but is an agency of the government tasked with governmentalfunctions, and is therefore not liable for the tortuous act of its driver Garcia, who was not its specialagent. For this, they have filed a motion for reconsideration on January 26, 1990.NIA believes this bases this on:PD 552 amended some provisionsof RA 3601 (the law which created the NIA)The case of Angat River Irrigation System v. Angat River Workers Union Angat Case: Although the majority opinion declares that the Angat System, like the NIA, exercised agovernmental function because the nature of its powers and functions does not show that it was intended to bring to the Government any special corporate benefit or pecuniary profit, a strong dissenting opinion held that Angat River system is a government entity exercising proprietary functions. The Angat dissenting opinion:Alegre protested the announced termination of his employment. He argued that although his contract did not stipulate the same would terminate on July 7 1976, since his services were five years, he had acquired the status of regular employee and could not be removed except forvalid cause.The employment contract of 1971 was executed when the Labor Code of the Philippines had not yetbeen promulgated, which came into effect some 3 years after the perfection of the contract. ISSUE: Whether or not NIA is a government agency with a juridical personality separate and distinct fromthe government, thereby opening it up to the possibility that it may be held liable for the damagescaused by its driver, who was not its special agent HELD: YES.

Reasoning the functions of government have been classified into governmental or constituent andproprietary or ministrant. The former involves the exercise of sovereignty and considered ascompulsory; the latter connotes merely the exercise of proprietary functions and thus considered asoptional.The National Irrigation Administration was not created for purposes of local government. While itmay be true that the NIA was essentially a service agency of the government aimed at promotingpublic interest and public welfare, such fact does not make the NIA essentially and purely a"government-function" corporation. NIA was created for the purpose of "constructing, improving,rehabilitating, and administering all national irrigation systems in the Philippines, including allcommunal and pump irrigation projects." Certainly, the state and the community as a whole arelargely benefited by the services the agency renders, but these functions are only incidental to theprincipal aim of the agency, which is the irrigation of lands.NIA is a government agency invested with a corporate personality separate and distinct from thegovernment, thus is governed by the Corporation Law. Section 1 of Republic Act No. 3601 provides:Sec. 1. Name and Domicile A body corporate is hereby created which shall be known as theNational Irrigation Administration. . . . which shall be organized immediately after the approval of this Act. It shall have its principal seat of business in the City of Manila and shall have representativesin all provinces, for the proper conduct of its business. (Emphasis for emphasis).Besides, Section 2, subsection b of P.D. 552 provides that:(b) To charge and collect from the beneficiaries of the water from all irrigation systems constructedby or under its administration, such fees or administration charges as may be necessary to cover thecost of operation, maintenance and insurance, and to recover the cost of construction within areasonable period of time to the extent consistent with government policy; to recover funds orportions thereof expended for the construction and/or rehabilitation of communal irrigation systemswhich funds shall accrue to a special fund for irrigation development under section 2 hereof: Unpaid irrigation fees or administration charges shall be preferred liens first, upon the landbenefited, and then on the crops raised thereon, which liens shall have preference over all other liens except for taxes on the land, and such preferred liens shall not be removed until all fees oradministration charges are paid or the property is levied upon and sold by the National IrrigationAdministration for the satisfaction thereof. . . .The same section also provides that NIA may sue and be sued in court.It has its own assets and liabilities. It also has corporate powers to be exercised by a Board of Directors. Section 2, subsection (f): . . . and to transact such business, as are directly or indirectlynecessary, incidental or conducive to the attainment of the above powers and objectives, includingthe power to establish and maintain subsidiaries, and in general, to exercise all the powers of acorporation under the Corporation Law, insofar as they are not inconsistent with the provisions of this Act.DISPOSITION: The court concluded that the National Irrigation Administration is a governmentagency with a juridical personality separate and distinct from the government. It is not a mereagency of the government but a corporate body performing proprietary functions. Therefore, it maybe held liable for the damages caused by the negligent act of its driver who was not its special agent.ACCORDINGLY, the Motion for Reconsideration dated January 26, 1990 is DENIED WITH FINALITY.The decision of this Court in G.R. No. 55963 and G.R. No. 61045 dated December 1, 1989 is herebyAFFIRMED.DISSENTING: PADILLA: to say that NIA has opened itself to suit is one thing; to say that it is liable fordamages arising from tort committed by its employees, is still another thing.The state or a government agency performing governmental functions may be held liable for tortcommitted by its employees only when it acts through a special agent.

Sources: Full text of case Case digest

-----------------------------------------------------------------------------------------------------------Consent to be sued does not include consent to execution G.R. No. L-30671 November 28, 1973 REPUBLIC OF THE PHILIPPINES, petitioner, vs. HON. GUILLERMO P. VILLASOR, as Judge of the Court of First Instance of Cebu, Branch I, THE PROVINCIAL SHERIFF OF RIZAL, THE SHERIFF OF QUEZON CITY, and THE SHERIFF OF THE CITY OF MANILA, THE CLERK OF COURT, Court of First Instance of Cebu, P. J. KIENER CO., LTD., GAVINO UNCHUAN, AND INTERNATIONAL CONSTRUCTION CORPORATION, respondents. Facts: On July 7, 1969, a decision was rendered in Special Proceedings No. 2156-R infavor of respondents P.J. Kiener Co., Ltd., Gavino Unchuan, and InternationalConstruction Corporation and against petitioner confirming the arbitration award in theamount of P1,712,396.40.The award is for the satisfactionof a judgment against thePhlippine Government.On June 24, 1969, respondent Honorable Guillermo Villasor issued an Orderdeclaring thedecision final and executory.Villasor directed the Sheriffs of RizalProvince, Quezon City as well as Manilato execute said decision.The Provincial Sheriffof Rizal served Notices of Garnishment with several Banks,specially on PhilippineVeterans Bank and PNB.The funds of the Armed Forces of the Philippines on deposit with PhilippineVeterans Bank andPNB are public funds duly appropriated and allocated for thepayment of pensions of retirees, pay andallowances of military and civilian personneland for maintenance and operations of the AFP.Petitioner, on certiorari, filed prohibition proceedings against respondent JudgeVillasor for acting in excess of jurisdiction with grave abuse of discretion amounting tolack of jurisdiction in grantingthe issuance of a Writ of Execution against the propertiesof the AFP, hence the notices and garnishment arenull and void. Issue: Is the Writ of Execution issued by Judge Villasor valid? Held: What was done by respondent Judge is not in conformity with the dictates of theConstitution.It isa fundamental postulate of constitutionalism flowing from the juristicconcept of sovereignty that the stateas well as its government is immune from suitunless it gives its consent.A sovereign is exempt from suit,not because of any formalconception or obsolete theory, but on the logical and practical ground that therecan beno legal right as against the authority that makes the law on which the right depends.The State may not be sued without its consent. A corollary, both dictated by logicand soundsense from a basic concept is that public funds cannot be the object of agarnishment proceeding even if theconsent to be sued had been previously granted andthe state liability adjudged.The universal rule that wherethe State gives its consent tobe sued by private parties either by general or special law, it may limitclaimants actiononly up to the completion of proceedings anterior to the stage of execution and thatthepower of the Courts ends when the judgment is rendered, since the government fundsand properties maynot be seized under writs of execution or garnishment to satisfy suchjudgments, is based on obviousconsiderations of public policy.Disbursements of publicfunds must be covered by the correspondingappropriation as required by law.Thefunctions and public services rendered by the State cannot be allowedto be paralyzedor disrupted by the diversion of public funds from their legitimate and specific objects,asappropriated by law.

Sources: Full text of case Case digest -----------------------------------------------------------------------------------------------------------G.R. No. L-61744 June 25, 1984

MUNICIPALITY OF SAN MIGUEL, BULACAN, petitioner, vs. HONORABLE OSCAR C. FERNANDEZ, in his capacity as the Presiding Judge, Branch IV, Baliuag, Bulacan, The PROVINCIAL SHERIFF of Bulacan, MARGARITA D. VDA. DE IMPERIO, ADORACION IMPERIO, RODOLFO IMPERIO, CONRADO IMPERIO, ERNESTO IMPERIO, ALFREDO IMPERIO, CARLOS IMPERIO, JR., JUAN IMPERIO and SPOUSES MARCELO PINEDA and LUCILA PONGCO, respondents. *will make digest of this on Saturday (July 28, 2012) Source: Full text of case -----------------------------------------------------------------------------------------------------------G.R. Nos. 89898-99 October 1, 1990 MUNICIPALITY OF MAKATI, petitioner, vs. THE HONORABLE COURT OF APPEALS, HON. SALVADOR P. DE GUZMAN, JR., as Judge RTC of Makati, Branch CXLII ADMIRAL FINANCE CREDITORS CONSORTIUM, INC., and SHERIFF SILVINO R. PASTRANA, respondents. Doctrine: Municipal revenues derived from taxes, licenses and market fees, and which are intended primarily and exclusively for the purpose of financing the governmental activities and functions of the municipality, are exempt from execution.

Facts: In lieu of an expropriation proceeding filed in court, petitioner Municipality of Makati opened a bank account with the PNB Buendia Branch under petitioner's name containing the sum of P417,510.00, pursuant to the provisions of Pres. Decree No. 42. After due hearing, the court fixed the amount of the property and ordered petitioner to pay such amount minus the advanced payments it has made. After this decision became final and executory, a writ of execution was issued and a Notice of Garnishment was served by respondent sheriff upon the manager of the PNB Buendia Branch. However, respondent sheriff was informed that a "hold code" was placed on the account of petitioner. Private respondent then filed a motion praying for the court to order the bank to deliver to the sheriff the unpaid balance, while petitioner also filed a motion to lift the garnishment. While these motions are pending, a Manifestation was filed, informing the court that private respondent was no longer the owner of the subject property and that ownership to this has been transferred to Philippine Savings Bank, Inc. A compromise agreement was made between private respondent and Philippine Savings Bank, Inc., which was then approved by the court. The court further ordered PNB Buendia Branch to immediately release to PSB the sum of P4,953,506.45 which corresponds to the balance of the appraised value of the subject property, from the garnished account of petitioner but the bank failed to comply as it was still waiting for proper authorization from the PNB head office enabling it to make a disbursement for the amount so ordered. As the case was in the Supreme Court, petitioner raised for the first time that it had two accounts with PNB Buendia Branch: one was made exclusively for the expropriation of the subject property, and the other is for statutory obligations and other purposes of the municipal government Issue:

Whether or not the balance of the appraised value of the subject property may be levied upon the second account of petitioner municipality. Held: In this jurisdiction, well-settled is the rule that public funds are not subject to levy and execution, unless otherwise provided for by statute. More particularly, the properties of a municipality, whether real or personal, which are necessary for public use cannot be attached and sold at execution sale to satisfy a money judgment against the municipality. Municipal revenues derived from taxes, licenses and market fees, and which are intended primarily and exclusively for the purpose of financing the governmental activities and functions of the municipality, are exempt from execution. The foregoing rule finds application in the case at bar. Absent a showing that the municipal council of Makati has passed an ordinance appropriating from its public funds an amount corresponding to the balance due under the RTC decision dated June 4, 1987, less the sum of P99,743.94 deposited in Account No. S/A 265-537154-3, no levy under execution may be validly effected on the public funds of petitioner deposited in Account No. S/A 263-530850-7. WHEREFORE, the Court Resolved to ORDER petitioner Municipality of Makati to immediately pay Philippine Savings Bank, Inc. and private respondent the amount of P4,953,506.45. Petitioner is hereby required to submit to this Court a report of its compliance with the foregoing order within a non-extendible period of SIXTY (60) DAYS from the date of receipt of this resolution.

Sources: Full text of case Case digest -----------------------------------------------------------------------------------------------------------Immunity cannot be used to perpetrate an injustice on a citizen I got this portion of Information about the Ministerio v. CFI of Cebu, 40 SCRA 464 That the principle of state immunity from suit cannot be invoked to defeat petitioners' claim has long been settled. In Ministerio v. Court of First Instance of Cebu, 7 the Court held: . . . . The doctrine of governmental immunity from suit cannot serve as an instrument for perpetrating an injustice on a citizen. Had the government followed the procedure indicated by the governing law at the time, a complaint would have been filed by it, and only upon payment of the compensation fixed by the judgment, or after tender to the party entitled to such payment of the amount fixed, may it "have the right to enter in and upon the land so condemned" to appropriate the same to the public use defined in the judgment. If there were an observance of procedural regularity, petitioners would not be in the said plaint they are now. It is unthinkable then that precisely because there was a failure to abide by what the law requires, the government would stand to benefit. It just as important, if not more so, that there be fidelity to legal norms on the part of the officialdom if the rule of law were to be maintained. It is not too much to say that when the government takes any property for public use, which is conditioned upon the payment of just compensation, to be judicially ascertained, it makes manifest that it submits to the jurisdiction of a court. There is no thought then that the doctrine of immunity from suit could still be appropriately invoked. We find the facts of the Ministerio case on all fours with the instant cases insofar as the fact that the respondent government officials executed a shortcut in appropriating petitioners' property for public use is concerned. As in the Amigable case, no expropriation proceedings were initiated before construction of the projects began. In like manner, nowhere in his pleadings in the cases at bar does the Solicitor General mention that the fact that expropriation proceedings had in fact been

undertaken before the road and artificial creek were constructed. Thus, quoting the answer of the defendants in Civil Case No. 46801, the Solicitor General summarized the facts which defendants considered as constituting justification for the construction as follows: 10. The construction of the road and creek in question on the property which at the time was said to be public property, was initiated, and construction effected, through the usual and ordinary course, as shown by the following: a. November 5, 1979 Engr. Data who was the incumbent District Engineer submitted (thru channels) plans, program of works and detailed estimates for approval of higher authorities, thru the initiation of Mayor Ynares and Assemblyman Gilberto Duavit; b. February 18, 1980 Regional Director Eduardo L. Lagunilla, MPW Region IV, EDSA, Quezon City endorsed said request to the Minister of Public Works;. c. February 13, 1981 Assemblyman Gilberto Duavit sent a hand-written follow-up note regarding the project; d. June 17, 1981 The undersigned defendant Nestor Agustin was designated Chief Civil Engineer of the Rizal Engineer District, Vice Engr. Cresencio Data who reached his compulsory retirement age; e. September 23, 1981 Funds in the amount of P588,000.00 was released for partial implementation of the project. The total amount requested was P1,200,000. 00; f. October 19, 1981 The undersigned submitted a request to the MPWH Central Office seeking authority to effect implementation of the project; g. October 29, 1981 The Regional Director approved the plans and program of works for the project in the amount of P588,000.00; h. November 11, 1981 The Honorable Minister Jesus S. Hipolito granted the request to undertake the implementation of the project; i. j. November 25, 1981 Project implementation was started; March 3, 1982 Construction of rock bulkhead was completed;

k. November 23, 1982 P249,000.00 was released for improvement (deepening and diverting of flow) of Binangonan River which was a complimentary structure of Binangonan port system; l. April 9, 1982 Implementation was started. Contract for this project was approved by the Regional Director in favor of EDILBERTO CADIENTE CONSTRUCTION; m. May 21, 1982 Deepening slightly of the adjacent portion of the rock bulkhead was completed