MELCHORA CABANAS, plaintiff-appellee vs.

FRANCISCO PILAPIL, defendant-appellant (58 SCRA 94, July 25, 1974)

constitutional provision vitalizing this concept that "The State shall strengthen the family as a basic social institution." If, as the Constitution so wisely dictates, it is the family as a unit that has to be strengthened, it does not admit of doubt that even if a stronger case were presented for the uncle, still deference to a constitutional mandate would have led the lower court to decide as it did. The trust, insofar as it is in conflict with the above quoted provision law, is pro tanto null and void. In order, however, to protect the rights the minor, Millian Pilapil, the plaintiff should file an additional bond the guardianship proceedings, Sp. Proc. No. 2418-R of this Court raise her bond therein to the total amount of P5,000.00." Republic of the Philippines SUPREME COURT Manila EN BANC G.R. No. L-32052 July 25, 1975 PHILIPPINE VIRGINIA TOBACCO ADMINISTRATION, Petitioner, vs. COURT OF INDUSTRIAL RELATIONS,Respondents. FERNANDO, J.: The principal issue that calls for resolution in this appeal by certiorari from an order of respondent Court of Industrial Relations is one of constitutional significance. It is concerned with the expanded role of government necessitated by the increased responsibility to provide for the general welfare. More specifically, it deals with the question of whether petitioner, the Philippine Virginia Tobacco Administration, discharges governmental and not proprietary functions. The landmark opinion of the then Justice, row Chief Justice, Makalintal in Agricultural Credit and Cooperative Financing Administration v. Confederation of Unions in Government Corporations and offices, points the way to the right answer. 1It interpreted the then fundamental law as hostile to the view of a limited or negative state. It is antithetical to the laissez faire concept. For as noted in an earlier decision, the welfare state concept "is not alien to the philosophy of [the 1935] Constitution." 2It is much more so under the present Charter, which is impressed with an even more explicit recognition of social and economic rights. 3There is manifest, to recall Laski, "a definite increase in the profundity of the social conscience," resulting in "a state which seeks to realize more fully the common good of its members." 4It does not necessarily follow, however, just because petitioner is engaged in governmental rather than proprietary functions, that the labor controversy was beyond the jurisdiction of the now defunct respondent Court. Nor is the objection raised that petitioner does not come within of of in to

Facts: Florentino Pilapil, deceased, left an insurance having his child, Millian Pilapil, as the beneficiary and authorized his brother, Francisco Pilapil, to act as trustee during his daughters minority. The lower court decided to give the mother of the child, Melchora Cabanas, the right to act as trustee citing the appropriate provisions in the Civil Code and the consideration of the childs welfare. The defendant appealed for the case. He claims the retention of the amount in question by invoking the terms of the insurance policy. He is the rightful trustee of the insurance policy. Issue: Whether the mother should be entitled to act as a trustee of a minor beneficiary of the proceeds of an insurance policy from the deceased. Ruling: With the provisions Articles 320 and 321 of the Civil Code as basis, the decision is affirmed with costs against the defendant-appellant, Francisco Pilapil. Article 320 states that the father, or in his absence the mother, is the legal administrator of the property pertaining to the child under parental authority. If the property is worth more than two thousand pesos, the father or mother shall give a bond subject to the approval of the Court of First Instance." And Article 321 states that "The property which the child has acquired or may acquire with his work or industry, or by any lucrative title, belongs to the child in ownership, and in usufruct to the father or mother under whom he is under parental authority and whose company he lives. With the added condition that the child stays with the mother, not the uncle, without any evidence of lack of maternal care, the decision arrived at stand the test of the strictest scrutiny. The appealed decision is supported by another rational consideration. It is reinforced by its adherence to the concept that the judiciary, as an agency of the State acting as parens patriae, is called upon whenever a pending suit of litigation affects one who is a minor to accord priority to his best interest This prerogative of parens patriae is inherent in the supreme power of every State, whether that power is lodged in a royal person or in the legislature, and has no affinity to those arbitrary powers which are sometimes exerted by irresponsible monarchs to the great detriment of the people and the destruction of their liberties." There is a

the coverage of the Eight-Hour Labor Law persuasive. 5We cannot then grant the reversal sought. We affirm. The facts are undisputed. On December 20, 1966, claimants, now private respondents, filed with respondent Court a petition wherein they alleged their employment relationship, the overtime services in excess of the regular eight hours a day rendered by them, and the failure to pay them overtime compensation in accordance with Commonwealth Act No. 444. Their prayer was for the differential between the amount actually paid to them and the amount allegedly due them. 6There was an answer filed by petitioner Philippine Virginia Tobacco Administration denying the allegations and raising the special defenses of lack of a cause of action and lack of jurisdiction. 7The issues were thereafter joined, and the case set for trial, with both parties presenting their evidence. 8After the parties submitted the case for decision, the then Presiding Judge Arsenio T. Martinez of respondent Court issued an order sustaining the claims of private respondents for overtime services from December 23, 1963 up to the date the decision was rendered on March 21, 1970, and directing petitioner to pay the same, minus what it had already paid. 9 There was a motion for reconsideration, but respondent Court en bancdenied the same. 10Hence this petition for certiorari. Petitioner Philippine Virginia Tobacco Administration, as had been noted, would predicate its plea for the reversal of the order complained of on the basic proposition that it is beyond the jurisdiction of respondent Court as it is exercising governmental functions and that it is exempt from the operation of Commonwealth Act No. 444. 11While, to repeat, its submission as to the governmental character of its operation is to be given credence, it is not a necessary consequence that respondent Court is devoid of jurisdiction. Nor could the challenged order be set aside on the additional argument that the Eight-Hour Labor Law is not applicable to it. So it was, at the outset, made clear. 1. A reference to the enactments creating petitioner corporation suffices to demonstrate the merit of petitioner's plea that it performs governmental and not proprietary functions. As originally established by Republic Act No. 2265, 12its purposes and objectives were set forth thus: "(a) To promote the effective merchandising of Virginia tobacco in the domestic and foreign markets so that those engaged in the industry will be placed on a basis of economic security; (b) To establish and maintain balanced production and consumption of Virginia tobacco and its manufactured products, and such marketing conditions as will insure and stabilize the price of a level sufficient to cover the cost of production plus reasonable profit both in the local as well as in the foreign market; (c) To create, establish, maintain, and operate processing, warehousing and marketing facilities in suitable centers and supervise the selling and buying of Virginia tobacco so that the farmers will enjoy reasonable prices that secure a fair return of their investments; (d) To prescribe rules and regulations governing the

grading, classifying, and inspecting of Virginia tobacco; and (e) To improve the living and economic conditions of the people engaged in the tobacco industry." 13The amendatory statute, Republic Act No. 4155, 14renders even more evident its nature as a governmental agency. Its first section on the declaration of policy reads: "It is declared to be the national policy, with respect to the local Virginia tobacco industry, to encourage the production of local Virginia tobacco of the qualities needed and in quantities marketable in both domestic and foreign markets, to establish this industry on an efficient and economic basis, and, to create a climate conducive to local cigarette manufacture of the qualities desired by the consuming public, blending imported and native Virginia leaf tobacco to improve the quality of locally manufactured cigarettes." 15The objectives are set forth thus: "To attain this national policy the following objectives are hereby adopted: 1. Financing; 2. Marketing; 3. The disposal of stocks of the Agricultural Credit Administration (ACA) and the Philippine Virginia Tobacco Administration (PVTA) at the best obtainable prices and conditions in order that a reinvigorated Virginia tobacco industry may be established on a sound basis; and 4. Improving the quality of locally manufactured cigarettes through blending of imported and native Virginia leaf tobacco; such importation with corresponding exportation at a ratio of one kilo of imported to four kilos of exported Virginia tobacco, purchased by the importer-exporter from the Philippine Virginia Tobacco Administration." 16 It is thus readily apparent from a cursory perusal of such statutory provisions why petitioner can rightfully invoke the doctrine announced in the leading Agricultural Credit and Cooperative Financing Administration decision 17and why the objection of private respondents with its overtones of the distinction between constituent and ministrant functions of governments as set forth in Bacani v. National Coconut Corporation 18if futile. The irrelevance of such a distinction considering the needs of the times was clearly pointed out by the present Chief Justice, who took note, speaking of the reconstituted Agricultural Credit Administration, that functions of that sort "may not be strictly what President Wilson described as "constituent" (as distinguished from "ministrant"),such as those relating to the maintenance of peace and the prevention of crime, those regulating property and property rights, those relating to the administration of justice and the determination of political duties of citizens, and those relating to national defense and foreign relations. Under this traditional classification, such constituent functions are exercised by the State as attributes of sovereignty, and not merely to promote the welfare, progress and prosperity of the people - these latter functions being ministrant, the exercise of which is optional on the part of the government." 19Nonetheless, as he explained so persuasively: "The growing complexities of modern society, however, have rendered this traditional classification of the functions of government quite unrealistic, not to say obsolete. The areas which used to be left to private enterprise and initiative and which the government

was called upon to enter optionally, and only "because it was better equipped to administer for the public welfare than is any private individual or group of individuals", continue to lose their well-defined boundaries and to be absorbed within activities that the government must undertake in its sovereign capacity if it is to meet the increasing social challenges of the times. Here as almost everywhere else the tendency is undoubtedly towards a greater socialization of economic forces. Here of course this development was envisioned, indeed adopted as a national policy, by the Constitution itself in its declaration of principle concerning the promotion of social justice." 20Thus was laid to rest the doctrine in Bacani v. National Coconut Corporation , 21based on the Wilsonian classification of the tasks incumbent on government into constituent and ministrant in accordance with the laissez faire principle. That concept, then dominant in economics, was carried into the governmental sphere, as noted in a textbook on political science, 22the first edition of which was published in 1898, its author being the then Professor, later American President, Woodrow Wilson. He took pains to emphasize that what was categorized by him as constituent functions had its basis in a recognition of what was demanded by the "strictest [concept of] laissez faire, [as they] are indeed the very bonds of society." 23The other functions he would minimize as ministrant or optional. It is a matter of law that in the Philippines, the laissez faire principle hardly commanded the authoritative position which at one time it held in the United States. As early as 1919, Justice Malcolm in Rubi v. Provincial Board 24could affirm: "The doctrines of laissez faire and of unrestricted freedom of the individual, as axioms of economic and political theory, are of the past. The modern period has shown a widespread belief in the amplest possible demonstration of government activity." 25The 1935 Constitution, as was indicated earlier, continued that approach. As noted in Edu v. Ericta : 26"What is more, to erase any doubts, the Constitutional Convention saw to it that the concept of laissez-faire was rejected. It entrusted to our government the responsibility of coping with social and economic problems with the commensurate power of control over economic affairs. Thereby it could live up to its commitment to promote the general welfare through state action." 27Nor did the opinion in Edu stop there: "To repeat, our Constitution which took effect in 1935 erased whatever doubts there might be on that score. Its philosophy is a repudiation of laissez-faire. One of the leading members of the Constitutional Convention, Manuel A. Roxas, later the first President of the Republic, made it clear when he disposed of the objection of Delegate Jose Reyes of Sorsogon, who noted the "vast extensions in the sphere of governmental functions" and the "almost unlimited power to interfere in the affairs of industry and agriculture as well as to compete with existing business" as "reflections of the fascination exerted by [the then] current tendencies' in other jurisdictions. He spoke thus: "My answer is that this constitution has a definite and well defined philosophy, not only political but social

and economic.... If in this Constitution the gentlemen will find declarations of economic policy they are there because they are necessary to safeguard the interest and welfare of the Filipino people because we believe that the days have come when in self-defense, a nation may provide in its constitution those safeguards, the patrimony, the freedom to grow, the freedom to develop national aspirations and national interests, not to be hampered by the artificial boundaries which a constitutional provision automatically imposes." 28 It would be then to reject what was so emphatically stressed in the Agricultural Credit Administration decision about which the observation was earlier made that it reflected the philosophy of the 1935 Constitution and is even more in consonance with the expanded role of government accorded recognition in the present Charter if the plea of petitioner that it discharges governmental function were not heeded. That path this Court is not prepared to take. That would be to go backward, to retreat rather than to advance. Nothing can thus be clearer than that there is no constitutional obstacle to a government pursuing lines of endeavor, formerly reserved for private enterprise. This is one way, in the language of Laski, by which through such activities, "the harsh contract which [does] obtain between the levels of the rich and the poor" may be minimized. 29It is a response to a trend noted by Justice Laurel in Calalang v. Williams30for the humanization of laws and the promotion of the interest of all component elements of society so that man's innate aspirations, in what was so felicitously termed by the First Lady as "a compassionate society" be attained. 31 2. The success that attended the efforts of petitioner to be adjudged as performing governmental rather than proprietary functions cannot militate against respondent Court assuming jurisdiction over this labor dispute. So it was mentioned earlier. As far back as Tabora v. Montelibano, 32this Court, speaking through Justice Padilla, declared: The NARIC was established by the Government to protect the people against excessive or unreasonable rise in the price of cereals by unscrupulous dealers. With that main objective there is no reason why its function should not be deemed governmental. The Government owes its very existence to that aim and purpose - to protect the people." 33In a subsequent case, Naric Worker's Union v. Hon. Alvendia, 34decided four years later, this Court, relying on Philippine Association of Free Labor Unions v. Tan , 35which specified the cases within the exclusive jurisdiction of the Court of Industrial Relations, included among which is one that involves hours of employment under the Eight-Hour Labor Law, ruled that it is precisely respondent Court and not ordinary courts that should pass upon that particular labor controversy. For Justice J. B. L. Reyes, the ponente, the fact that there were judicial as well as administrative and executive pronouncements to the effect that the Naric was performing governmental functions did not suffice to confer competence on the then respondent Judge to issue a preliminary injunction and to entertain a complaint for damages, which as pointed out by the labor union, was connected with an unfair

labor practice. This is emphasized by the dispositive portion of the decision: "Wherefore, the restraining orders complained of, dated May 19, 1958 and May 27, 1958, are set aside, and the complaint is ordered dismissed, without prejudice to the National Rice and Corn Corporation's seeking whatever remedy it is entitled to in the Court of Industrial Relations." 36Then, too, in a case involving petitioner itself, Philippine Virginia Tobacco Administration, 37where the point in dispute was whether it was respondent Court or a court of first instance that is possessed of competence in a declaratory relief petition for the interpretation of a collective bargaining agreement, one that could readily be thought of as pertaining to the judiciary, the answer was that "unless the law speaks clearly and unequivocally, the choice should fall on the Court of Industrial Relations." 38Reference to a number of decisions which recognized in the then respondent Court the jurisdiction to determine labor controversies by government-owned or controlled corporations lends to support to such an approach. 39Nor could it be explained only on the assumption that proprietary rather than governmental functions did call for such a conclusion. It is to be admitted that such a view was not previously bereft of plausibility. With the aforecited Agricultural Credit and Cooperative Financing Administration decision rendering obsolete the Bacani doctrine, it has, to use a Wilsonian phrase, now lapsed into "innocuous desuetude."40Respondent Court clearly was vested with jurisdiction. 3. The contention of petitioner that the Eight-Hour Labor Law 41does not apply to it hardly deserves any extended consideration. There is an air of casualness in the way such an argument was advanced in its petition for review as well as in its brief. In both pleadings, it devoted less than a full page to its discussion. There is much to be said for brevity, but not in this case. Such a terse and summary treatment appears to be a reflection more of the inherent weakness of the plea rather than the possession of an advocate's enviable talent for concision. It did cite Section 2 of the Act, but its very language leaves no doubt that "it shall apply to all persons employed in any industry or occupation, whether public or private ... ." 42Nor are private respondents included among the employees who are thereby barred from enjoying the statutory benefits. It cited Marcelo v. Philippine National Red Cross 43and Boy Scouts of the Philippines v. Araos .44Certainly, the activities to which the two above public corporations devote themselves can easily be distinguished from that engaged in by petitioner. A reference to the pertinent sections of both Republic Acts 2265 and 2155 on which it relies to obtain a ruling as to its governmental character should render clear the differentiation that exists. If as a result of the appealed order, financial burden would have to be borne by petitioner, it has only itself to blame. It need not have required private respondents to render overtime service. It can hardly be surmised that one of its chief problems is paucity of personnel. That would indeed be a cause for astonishment. It would appear, therefore, that such an objection based

on this ground certainly cannot suffice for a reversal. To repeat, respondent Court must be sustained. WHEREFORE, the appealed Order of March 21, 1970 and the Resolution of respondent Court en banc of May 8, 1970 denying a motion for reconsideration are hereby affirmed. The last sentence of the Order of March 21, 1970 reads as follows: "To find how much each of them [private respondents] is entitled under this judgment, the Chief of the Examining Division, or any of his authorized representative, is hereby directed to make a reexamination of records, papers and documents in the possession of respondent PVTA pertinent and proper under the premises and to submit his report of his findings to the Court for further disposition thereof." Accordingly, as provided by the New Labor Code, this case is referred to the National Labor Relations Commission for further proceedings conformably to law. No costs. Teehankee J., is on leave. MACARIOLA VS. ASUNCION 114 SCRA 77

FACTS: 1. Judge Elias Asuncion was the presiding Judge in Civil Case No. 3010 for partition. 2. Among the parties thereto was Bernardita R. Macariola. 3. On June 8, 1863 respondent Judge rendered a decision, which became final for lack of an appeal. 4. On October 16, 1963 a project of partition was submitted to Judge Asuncion which he approved in an Order dated October 23, 1963, later amended on November 11, 1963. 5. On March 6, 1965, a portion of lot 1184-E, one of the properties subject to partition under Civil Case No. 3010, was acquired by purchase by respondent Macariola and his wife, who were major stockholders of Traders Manufacturing and Fishing Industries Inc., 6. Bernardita Macariola thus charged Judge Asuncion of the CFI of Leyte, now Associate Justice of the Court of Appeals with acts unbecoming of a judge. 7. Macariola alleged that Asuncion violated , among others, Art. 14, par. 5 of the New Civil Code and Article 14 of the Code of Commerce. ISSUE: Is the actuation of Judge Asuncion in acquiring by purchase a portion of property in a Civil Case previously handled by him an act unbecoming of a Judge? HELD: Article 14 , par. 5 of the New Civil Code applies only to the sale or assignment of the property which is the subject of litigation to the persons disqualified therein. The Supreme Court held that for the prohibition to operate, the sale or assignment must take place during the pendency of the litigation involving the property.

In the case at bar, when respondent Judge purchased on March 6, 1965 a portion of lot 1184-E, the decision in Civil Case No. 3010 which he rendered on June 8, 1963 was already final because none of the parties filed an appeal within the reglementary period hence, the lot in question was no longer subject of litigation. Moreover at the time of the sale on March 6, 1965, respondents order date October 23, 1963 and the amended order dated November 11, 1963 approving the October 16, 1963 project of partition made pursuant to the June 8, 1963 decision, had long been final for there was no appeal from said orders. Furthermore, respondent Judge did not buy the lot in question on March 6, 1965 directly from the plaintiffs in Civil Case No. 3010 but from Dr. Arcadio Galapon who earlier purchased on July 31, 1964 Lot 1184-E from three of the plaintiffs after the finality of the decision in Civil Case No. 3010. Consequently, the sale of a portion of Lot 1184-E to respondent Judge having taken place over one year after the finality of the decision in Civil Case No. 3010 as well as the two orders approving the project of partition, and not during the pendency of the litigation, there was no violation of paragraph 5, Article 1491 of the New Civil Code. Upon the transfer of sovereignty from Spain to the United States and later on from the United States to the Republic of the Philippines, Art. 14 of the Code of Commerce must be deemed to have been abrogated because where there is a change of sovereignty , the political laws of the former sovereign , whether compatible or not with those of the new sovereign, are automatically abrogated, unless they are expressly reenacted by affirmative act of the new sovereign.

(supplemental budget #3) but the City refused to release the money to Santiago. The City of Caloocan argued that Santiago was not entitled to back wages. On July 27, 1992 Sheriff Castillo levied and sold at public auction one of the motor vehicles of the City Government for P100,000. The amount was given to Santiago. The City Government questioned the validity of the motor vehicle; properties of the municipality were exempt from execution. Judge Allarde denied the motion and directed the sheriff to levy and schedule at public auction 3 more vehicles. On October 5, 1993 the City Council of Caloocan passed Ordinance No. 0134 which included the amount of P439,377.14 claimed by Santiago as back-wages, plus interest. Judge Allarde issued an order to the City Treasurer to release the check but the City Treasurer cant do so because the Mayor refuses to sign the check. On May 7, 1993. Judge Allarde ordered the Sheriff to immediately garnish the funds of the City Government of Caloocan corresponding to the claim of Santiago. Notice of garnishment was forwarded to the PNB but the City Treasurer sent an advice letter to PNB that the garnishment was illegal and that it would hold PNB liable for any damages which may be caused by the withholding the funds of the city. ISSUE: Whether or not the funds of City of Caloocan, in PNB, may be garnished (i.e. exempt from execution), to satisfy Santiagos claim. HELD: Garnishment is considered a specie of attachment by means of which the plaintiff seeks to subject to his claim property of the defendant in the hands of a third person, or money owed by such third person or garnishee to the defendant. The rule is and has always been that all government funds deposited in the PNB or any other official depositary of the Philippine Government by any of its agencies or instrumentalities, whether by general or special deposit, remain government funds and may not be subject to garnishment or levy, in the absence of a corresponding appropriation as required by law. Even though the rule as to immunity of a state from suit is relaxed, the power of the courts ends when the judgment is rendered. Although the liability of the state has been judicially ascertained, the state is at liberty to determine for itself whether to pay the judgment or not, and execution cannot issue on a judgment against the state. Such statutes do not authorize a seizure of state property to satisfy judgments recovered, and only convey an implication that the legislature will recognize such judgment as final and make provision for the satisfaction thereof. However, the rule is not absolute and admits of a well-defined exception, that is, when there is a corresponding appropriation as required by law. In such a case, the monetary judgment may be legally enforced by judicial processes. Herein, the City Council of Caloocan already approved and passed Ordinance No. 0134, Series of 1992, allocating the amount of P439,377.14 for Santiagos back-wages plus interest. This case, thus, fell squarely within the exception. The

CITY OF CALOOCAN and NORMA M. ABRACIA, petitioners, v. HON. MAURO T. ALLARDE, Presiding Judge of Branch 123, RTC of Caloocan City, ALBERTO A. CASTILLO, Deputy Sheriff of Branch 123, RTC of Caloocan City, and DELFINA HERNANDEZ SANTIAGO and PHILIPPINE NATIONAL BANK (PNB), respondents. G.R. No. 107271; September 10, 2003 CORONA, J.: FACTS: In 1972, Mayor Marcial Samson of Caloocan abolished the position of Assistant City Administrator and 17 other positions via Ordinance No. 1749. The affected employees assailed the legality of the abolition. The CFI in 1973 declared abolition illegal and ordered the reinstatement of all the dismissed employees and the payment of their back-wages and other emoluments. The City Government appealed the decision but such was dismissed. In 1986 the City paid Santiago P75,083.37 as partial payment of her back-wages. The others were paid in full. In 1987 the City appropriated funds for her unpaid back salaries

judgment of the trial court could then be validly enforced against such funds. MUNICIPALITY OF MAKATI VS CA FACTS: The present petition for review is an off-shoot of expropriation proceedings initiated by petitioner Municipality of Makati against private respondent Admiral Finance Creditors Consortium involving a parcel of land and improvements located at San Antonio Village, Makati. The action for eminent domain was filed where respondent RTC judge rendered a decision ordering petitioner to pay the corresponding amount as fixed in the decision. Respondent sheriff was informed that a "hold code" was placed on the account of petitioner. Private respondent filed a motion praying that an order be issued directing the bank to deliver to respondent sheriff the amount equivalent to the unpaid balance due under the RTC decision. Petitioner filed a motion to lift the garnishment, on the ground that the manner of payment of the expropriation amount should be done in installments which the respondent RTC judge failed to state in his decision which the private respondent opposed. On the other hand, Philippine Savings Bank (PSB) and private respondent entered into a compromise agreement whereby they agreed to divide between themselves the compensation due from the expropriation proceedings. Respondent trial judge ordered PNB Buendia Branch to immediately release to PSB the sum which corresponds to the balance of the appraised value of the subject property under the RTC decision. The general manager of the PNB Buendia Branch, a Mr. Antonio Bautista, informed the court that he was still waiting for proper authorization from the PNB head office enabling him to make a disbursement for the amount so ordered. Petitioner contended that its funds at the PNB Buendia Branch could neither be garnished nor levied upon execution, for to do so would result in the disbursement of public funds without the proper appropriation required under the law. Respondent trial judge denied petitioner's motion for reconsideration on the ground that the doctrine did not apply to the case because petitioner's PNB Account was specifically opened for the expropriation proceedings of the subject property pursuant to Pres. Decree No. 42. Respondent RTC judge likewise declared Mr. Antonio Bautista guilty of contempt of court for his inexcusable refusal to obey the order. Petitioner and the bank manager of PNB Buendia Branch then filed separate petitions forcertiorari with the Court of Appeals, which were eventually consolidated. The Court of Appeals dismissed both petitions for lack of merit and sustained the jurisdiction of respondent RTC judge over the funds contained in petitioner's PNB Account and affirmed his authority to levy on such funds. Hence, this petition for review with prayer for preliminary injunction.

ISSUE: whether public funds earmarked for the municipal government's other statutory obligations, are exempted from execution without the proper appropriation required under the law. HELD: The funds deposited in the second PNB Account No. S/A 263530850-7 are public funds of the municipal government. 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 State's power of eminent domain should be exercised within the bounds of fair play and justice. Just compensation means not only the correct determination of the amount to be paid to the owner of the land but also the payment of the land within a reasonable time from its taking. Without prompt payment, compensation cannot be considered "just" for the property owner is made to suffer the consequence of being immediately deprived of his land while being made to wait for a decade or more before actually receiving the amount necessary to cope with his loss. In the case at bar, considering that valuable property has been taken, the compensation to be paid fixed and the municipality is in full possession and utilizing the property for public purpose for three (3) years, the Court finds that the municipality has had more than reasonable time to pay full compensation. WHEREFORE, the Court Resolved to ORDER petitioner Municipality of Makati to immediately pay Philippine Savings Bank, Inc. and private respondent the corresponding compensation Lansang vs. CA G.R. No. 102667, February 23, 2000 Facts: Private respondents General Assembly of the Blind, Inc. (GABI) and Jose Iglesias were allegedly awarded a verbal contract of lease in 1970 to occupy a portion of Rizal Park by the National Parks Development Committee (NPDC), a government initiated civic body engaged in the development of national parks. Private respondents were allegedly given office and library space as well as kiosks area selling food and drinks. Private respondent GABI was to remit to NPDC 40% of the profits derived from operating the kiosks. After the EDSA Revolution, petitioner Lansang, the new Chairman of the NPDC, sought to clean up Rizal Park. Petitioner terminated the so-called verbal agreement with GABI and demanded that the latter vacate the premises and the kiosks it ran privately within the public park. On the

day of the supposed eviction, GABI filed an action for damages and injunction against petitioner. Issue: Whether or not the complaint filed against the petitioner is in reality a complaint against the State, which could not prosper without the States consent Held: The doctrine of state immunity from suit applies to complaints filed against public officials for acts done in the performance of their duties. The rule is that the suit must be regarded as one against the state where satisfaction of the judgment against the public official concerned will require the state itself to perform a positive act, such as appropriation of the amount necessary to pay the damages awarded to the plaintiff. The rule does not apply where the public official is charged in his official capacity for acts that are unlawful and injurious to the rights of others. Public officials are not exempt, in their personal capacity, from liability arising from acts committed in bad faith. Neither does its apply where the public official is clearly being sued not in his official capacity but in his personal capacity, although the acts complained of may have been committed while he occupied a public position. In the case, the petitioner is being sued not in his capacity as NPDC chairman but in his personal capacity. It is also evident the petitioner is sued allegedly for having personal motives in ordering the ejectment of GABI from Rizal Park. The important question to consider is whether or not petitioner abused his authority in ordering the ejectment of GABI. The Court found no evidence of such abuse of authority. Rizal Park is beyond the commerce of man and, thus, could not be the subject of lease contract. That private respondents were allowed to occupy office and kiosk spaces in the park was only a matter of accommodation by the previous administrator. This being so, petitioner may validly discontinue the accommodation extended to private respondents, who may be ejected from the park when necessary. Private respondents cannot and do not claim a vested right to continue to occupy Rizal Park. Gov. of the Phil. Islands vs. Monte de Piedad G.R. No. L-9959 December 13, 1916 FACTS: Contributions were collected during the Spanish regime for the relief of the victims of an earthquake. The Monte de Piedad, a charitable institution, in need for more working capital, petitioned the GovernorGeneral for the transfer of $80,000 as a loan. In June 1893, the

Department of Finance called upon the Monte de Piedad to return the $80,000. The Monte declined to comply with this order upon the ground that only the Governor-General of the Philippine Islands and not the Department of Finance had the right to order the reimbursement. On account of various petitions of the persons, the Philippine Islands, through the Attorney-General, bring suit against the Monte de Piedad for a recover of the $80,000, together with interest, for the benefit of those persons or their heirs. After due trial, judgment was entered in favor of the plaintiff for the sum of $80,000 gold or its equivalent in Philippine currency, together with legal interest from February 28, 1912, and the costs of the cause. The defendant appealed. One of the assignment of errors made by the defendant was to question the competence of the plaintiff (government) to bring the action, contending that the suit could be instituted only by the intended beneficiaries themselves or by their heirs. ISSUE: Whether or not the Philippine government is competent to file a complaint against the respondent bank? HELD: The Supreme Court affirmed the judgment appealed from and upheld the right of the Government to file the case as parens patriae in representation of the legitimate claimants. The legislature or government of the State, as parens patriae, has the right to enforce all charities of public nature, by virtue of its general superintending authority over the public interests, where no other person is entrusted with it. This prerogative of parens patriae is inherent in the supreme power of every State, whether that power is lodged in a royal person or in the legislature. It is a most beneficient functions, and often necessary to be exercised in the interest of humanity, and for the prevention of injury to those who cannot protect themselves. The beneficiaries of charities, who are often in capable of vindicating their rights, and justly look for protection to the sovereign authority, acting as parens patriae. They show that this beneficient functions has not ceased to exist under the change of government from a monarchy to a republic; but that it now resides in the legislative department, ready to be called into exercise whenever required for the purposes of justice and right, and is a clearly capable of being exercised in cases of charities as in any other cases whatever. Besides, the beneficiaries, consisting of the original sufferers and their heirs, are quite numerous. It would be impracticable for them to institute an action or actions either individually or collectively to recover the $80,000. The only course that can be satisfactorily pursued is for the Government to again assume control of the fund and devote it to the object for which it was originally destined. The impracticability of

pursuing a different course, however, is not the true ground upon which the right of the Government to maintain the action rests. The true ground is that the money being given to a charity became, in a measure, public property, only applicable, it is true, to the specific purposes to which it was intended to be devoted, but within those limits consecrated to the public use, and became part of the public resources for promoting the happiness and welfare of the Philippine Government. To deny the Government's right to maintain this action would be contrary to sound public policy. Ruffy vs. Chief of Staff 75 Phil 875 August 20, 1946 Tuason, J. Facts: Outbreak of the war against Japanese invaders Ramon Ruffy, Prudente Francisco and Andres Fortus, petitioners herein, were the Provincial Commander, a junior officer and a corporal of the Philippine Constabulary garrison stationed inMindoro, respectively Japanese forces came to Mindoro which made Ruffys troop retreat to the mountains and organized a guerilla outfit called the Bolo Combat Team or the Bolo Area Civilians Jose Garcia, Dominador Adeva and Victoriano Dinglasanal so became members of the Bolo Area Petitioners were promoted: Ruffy was named the Commanding Officer of the Bolo Area, Dinglasan became the Finance Officer, Garcia was named Captain while Adeva and Francisco were named 3 rd Lt. and 2ndLt, respectively Change in the command of the Bolo Area was effected relieving Ruffy of his position by Capt. Beloncio Capt. Beloncio was allegedly slain by petitioners Issue: Whether or not petitioners were subject to military law at the time the offense for which they had been placed on trial was committed. Held: Yes, petitioners were still subject to military law at the time the offense was committed. The Court ruled that members of the Armed Forces were still covered by the National Defense Act, Articles of War and other laws relating to the Armed Forces even during the Japanese

occupation. The act of unbecoming an officer and a gentleman, in defiance of the 95the Article of War, held subjects liable to military jurisdiction and trial. Moreover, petitioners were officers of the Bolo Area and the 6thMilitary District, operating under orders of duly established and duly appointed commanders of the US Army. Aside from that, and in response to petitioners argument that courts-martial have no jurisdiction over the case, the Court ruled that courts-martial do have authority, being agencies of executive character. Petition is denied. Dissenting Opinion: Perfecto, J. The fact that enemy occupation does not relieve petitioners from their sworn duties as well as from the punishment they must incur for their conduct is affirmed. However, petition must be granted on the grounds that final judgments should come from the Supreme Court who has the authority to review, revise, reverse or modify judgments by military tribunals. Courts-martial are, in fact, inferior courts established by law. The Holy See vs. Rosario Facts: Msgr. Cirilos Jr., on behalf of the petitioner and the PRC agreed to sell 3 parcels of land to Ramon Licup. A condition was agreed upon by the parties whereby an earnest money shall be paid by Licup and the sellers shall clear the said lots of squatters. Licup assigned his rights to Starbright Enterprises. The private respondent demanded the undertaking but due to the refusal of the squatters to vacate the land, Cirilos proposed that the private respondent shall be the one to undertake the eviction or he shall return the earnest money. Private respondent counterproposed that it would undertake the eviction but the price of the land shall be decreased. Consequently, the earnest money was returned. Thereafter, without the notice to the private respondent, the petitioner and PRC sold the lots to Tropicana. Private respondent filed a complaint against the petitioner but the latter moved to dismiss the complaint alleging that there is lack of jurisdiction based on sovereign immunity from suit. But the private respondent argued that by entering into a business contract, the Holy See shed off its sovereign immunity. The DFA filed for an intervention on behalf of the Holy See. Issue: 1. Whether or not the Holy See can invoke the doctrine of immunity 2. Whether or not the Holy See entered into a commercial transaction Held:

1. The Republic of the Philippines has accorded the Holy See the status of a foreign sovereign. Through the Papal Nuncio, its Ambassador, it has had diplomatic representation in the Philippines since 1957. Moreover, the DFA has already certified the Embassy of the Holy See as a diplomatic mission to the Republic of the Philippines, exempt from local jurisdiction and entitled to all the rights, privileges and immunities of a diplomatic mission in the country. Hence, the executive branch has already recognized and affirmed the status of the Holy See. As such, it shall be recognized by the courts so as not to embarrass the executive arm of the government in conducting foreign relations. 2. The Court has distinguished the transactions by a state with private parties as jure imperii and jure gestionis. Jure imperii has been defined as public acts of the government or the exercise of the sovereign activity thereof, while jure gestionis are those private acts that are usually proprietary and commercial in nature. A state impliedly waves its immunity upon entering into contracts that are commercial or propeitary in nature. However, mere entering into a contract by a foreign state with a private party cannot be the ultimate test of it proprietary functions. In the case at bar, the Holy See did not buy and sell the lot in the ordinary course of business. In fact, a part of the land, specifically Lot 5-A, was a donation from the Archdiocese of Manila, not for commercial purpose but for the residence of the Papal Nuncio. The sale of Lot 5-A was not entered into for profit or gain. It merely wanted to dispose off the same because it is impossible for the petitioner to use is for the purpose of donation due to the refusal of the squatters living on the said parcel of land to vacate it. Hence, the decision to transfer the property and the subsequent disposal are clothed with a governmental character. The petition was granted and the civil case against it was dismissed. 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 construction of wharves in said base that was merely awarded to another group. For this reason, a suit for specific performance 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 exempts 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 independence and equality of states. However, 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 proprietary 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 contracts 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. United States of America vs. Guinto 182 SCRA 644 FACTS: These cases have been consolidated because they all involve the doctrine of state immunity. In GR No. 76607, the private respondents are suing several officers of the US Air Force stationed in Clark Air Base in connection with the bidding conducted by them for contracts for barbering services in the said base. In GR No. 79470, Fabian Genove filed a complaint for damages against petitioners Lamachia, Belsa, Cartalla and Orascion for his dismissal as cook in the US Air Force Recreation Center at Camp John Hay Air Station in Baguio City. It had been ascertained after investigation, from the testimony of Belsa, Cartalla and Orascion, that Genove had poured urine into the soup stock used in cooking the vegetables served to the club customers. Lamachia, as club manager, suspended him and thereafter referred the case to a board of arbitrators conformably to the collective bargaining agreement between the center and its employees. The board unanimously found him guilty and recommended his dismissal. Genoves reaction was to file his complaint against the individual petitioners. In GR No. 80018, Luis Bautista, who was employed as a barracks boy in Cano O Donnell, an extension of Clark Air Bas, was arrested following a buy-bust operation conducted by the individual petitioners who are

officers of the US Air Force and special agents of the Air Force Office of Special Investigators. On the basis of the sworn statements made by them, an information for violation of R.A. 6425, otherwise known as the Dangerous Drugs Act, was filed against Bautista in the RTC of Tarlac. Said officers testified against him at his trial. Bautista was dismissed from his employment. He then filed a complaint against the individual petitioners claiming that it was because of their acts that he was removed. In GR No. 80258, a complaint for damages was filed by the private respondents against the herein petitioners (except the US), for injuries sustained by the plaintiffs as a result of the acts of the defendants. There is a conflict of factual allegations here. According to the plaintiffs, the defendants beat them up, handcuffed them and unleashed dogs on them which bit them in several parts of their bodies and caused extensive injuries to them. The defendants deny this and claim that plaintiffs were arrested for theft and were bitten by the dogs because they were struggling and resisting arrest. In a motion to dismiss the complaint, the US and the individually named defendants argued that the suit was in effect a suit against the US, which had not given its consent to be sued. ISSUE: Whether the defendants were also immune from suit under the RP-US Bases Treaty for acts done by them in the performance of their official duties. HELD: The rule that a State may not be sued without its consent is one of the generally accepted principles of international law that were have adopted as part of the law of our land. Even without such affirmation, we would still be bound by the generally accepted principles of international law under the doctrine of incorporation. Under this doctrine, as accepted by the majority of the states, such principles are deemed incorporated in the law of every civilized state as a condition and consequence of its membership in the society of nations. All states are sovereign equals and cannot assert jurisdiction over one another. 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 states 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, the suit must be regarded as against the state although it has not been formally impleaded. When the government enters into a contract, it is deemed to have descended to the level of the other contracting party and divested of its sovereign immunity from suit with its implied consent. In the case o US, the customary law of international law on state immunity is expressed

with more specificity in the RP-US Bases Treaty. 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 proprietory or private capacity. It is only when the contract involves its sovereign or governmental capacity that no such waiver may be implied. It is clear from a study of the records of GR No. 80018 that the petitioners therein were acting in the exercise of their official functions when they conducted the buy-bust operations against the complainant and thereafter testified against him at his trial. It follows that for discharging their duties as agents of the US, they cannot be directly impleaded for acts imputable to their principal, which has not given its consent to be sued. As for GR No. 80018, the record is too meager to indicate what really happened. The needed inquiry first be made by the lower court so it may assess and resolve the conflicting claims of the parties on the basis of evidence that has yet to be presented at the trial. G.R. No. L-46930 June 10, 1988 DALE SANDERS, AND A.S. MOREAU, JR vs. HON. REGINO T. VERIDIANO II FACTS: Petitioner Sanders was the special services director of the U.S. Naval Station. Petitioner Moreau was the commanding officer of the Subic Naval Base. Private respondent Rossi is an American citizen with permanent residence in the Philippines. Private respondent Rossi and Wyer were both employed as game room attendants in the special services department of the NAVSTA. On October 3, 1975, the private respondents were advised that their employment had been converted from permanent full-time to permanent part-time. They instituted grievance proceedings to the rules and regulations of the U.S. Department of Defense. The hearing officer recommended for reinstatement of their permanent full-time status. However, in a letter addressed to petitioner Moreau, Sanders disagreed with the hearing officer's report. The letter contained the statements that: a ) "Mr. Rossi tends to alienate most co-workers and supervisors;" b) "Messrs. Rossi and Wyers have proven, according to their immediate supervisors, to be difficult employees to supervise;" and c) "even though the grievant were under oath not to discuss the case with anyone, (they) placed the records in public places where others not involved in the case could hear." Before the start of the grievance hearings, a-letter from petitioner Moreau was sent to the Chief of Naval Personnel explaining the change

of the private respondent's employment status. So, private respondent filed for damages alleging that the letters contained libelous imputations and that the prejudgment of the grievance proceedings was an invasion of their personal and proprietary rights. However, petitioners argued that the acts complained of were performed by them in the discharge of their official duties and that, consequently, the court had no jurisdiction over them under the doctrine of state immunity. However, the motion was denied on the main ground that the petitioners had not presented any evidence that their acts were official in nature. ISSUE: Whether or not the petitioners were performing their official duties? RULING: Yes. Sanders, as director of the special services department of NAVSTA, undoubtedly had supervision over its personnel, including the private respondents. Given the official character of the letters, the petitioners were being sued as officers of the United States government because they have acted on behalf of that government and within the scope of their authority. Thus, it is that government and not the petitioners personally that is responsible for their acts. It is stressed at the outset that the mere allegation that a government functionary is being sued in his personal capacity will not automatically remove him from the protection of the law of public officers and, if appropriate, the doctrine of state immunity. By the same token, the mere invocation of official character will not suffice to insulate him from suability and liability for an act imputed to him as a personal tort committed without or in excess of his authority. These well-settled principles are applicable not only to the officers of the local state but also where the person sued in its courts pertains to the government of a foreign state, as in the present case. Assuming that the trial can proceed and it is proved that the claimants have a right to the payment of damages, such award will have to be satisfied not by the petitioners in their personal capacities but by the United States government as their principal. This will require that government to perform an affirmative act to satisfy the judgment, viz, the appropriation of the necessary amount to cover the damages awarded, thus making the action a suit against that government without its consent. The practical justification for the doctrine, as Holmes put it, is that "there can be no legal right against the authority which makes the law on which the right depends. In the case of foreign states, the rule is derived from the principle of the sovereign equality of states which wisely admonishes that par in parem non habet imperium and that a contrary attitude would "unduly vex the peace of nations." 17 Our

adherence to this precept is formally expressed in Article II, Section 2, of our Constitution, where we reiterate from our previous charters that the Philippines "adopts the generally accepted principles of international law as part of the law of the land. WHEREFORE, the petition is GRANTED. LANSANG vs CA Facts: Private respondents General Assembly of the Blind, Inc. (GABI) and Jose Iglesias were allegedly awarded a verbal contract of lease in 1970 to occupy a portion of Rizal Park by the National Parks Development Committee (NPDC), a government initiated civic body engaged in the development of national parks. Private respondents were allegedly given office and library space as well as kiosks area selling food and drinks. Private respondent GABI was to remit to NPDC 40% of the profits derived from operating the kiosks. After the EDSA Revolution, petitioner Lansang, the new Chairman of the NPDC, sought to clean up Rizal Park. Petitioner terminated the so-called verbal agreement with GABI and demanded that the latter vacate the premises and the kiosks it ran privately within the public park. On the day of the supposed eviction, GABI filed an action for damages and injunction against petitioner. Issue: Whether or not the complaint filed against the petitioner is in reality a complaint against the State, which could not prosper without the States consent Held: The doctrine of state immunity from suit applies to complaints filed against public officials for acts done in the performance of their duties. The rule is that the suit must be regarded as one against the state where satisfaction of the judgment against the public official concerned will require the state itself to perform a positive act, such as appropriation of the amount necessary to pay the damages awarded to the plaintiff. The rule does not apply where the public official is charged in his official capacity for acts that are unlawful and injurious to the rights of others. Public officials are not exempt, in their personal capacity, from liability arising from acts committed in bad faith. Neither does its apply where the public official is clearly being sued not in his official capacity but in his personal capacity, although the acts complained of may have been committed while he occupied a public position. In the case, the petitioner is being sued not in his capacity as NPDC chairman but in his personal capacity. It is also evident the petitioner is

sued allegedly for having personal motives in ordering the ejectment of GABI from Rizal Park. The important question to consider is whether or not petitioner abused his authority in ordering the ejectment of GABI. The Court found no evidence of such abuse of authority. Rizal Park is beyond the commerce of man and, thus, could not be the subject of lease contract. That private respondents were allowed to occupy office and kiosk spaces in the park was only a matter of accommodation by the previous administrator. This being so, petitioner may validly discontinue the accommodation extended to private respondents, who may be ejected from the park when necessary. Private respondents cannot and do not claim a vested right to continue to occupy Rizal Park.

circumstance that would trigger suspicion of a wrong-doing on her part. She is aware of Bradfords propensity to suspect Filipinos for theft and/or shoplifting. Montoya filed a formal protest w/Mr. Roynon but no action was taken. Montoya filed a suit against Bradford for damages due to the oppressive & discriminatory acts committed by petitioner in excess of her authority as store manager. She claims that she has been exposed to contempt & ridicule causing her undue embarrassment & indignity. She further claims that the act was not motivated by any other reason aside from racial discrimination in our own land w/c is a blow to our national pride & dignity. She seeks for moral damages of P500k and exemplary damages of P100k. May 13, 1987 Summons & complaint were served on Bradford but instead of filing an answer, she along with USA government filed a motion to dismiss on grounds that: (1) this is a suit against US w/c is a foreign sovereign immune from suit w/o its consent and (2) Bradford is immune from suit for acts done in the performance of her official functions under Phil-US Military Assistance Agreement of 1947 & Military Bases Agreement of 1947. They claim that US has rights, power & authority w/in the bases, necessary for the establishment, use & operation & defense thereof. It will also use facilities & areas w/in bases & will have effective command over the facilities, US personnel, employees, equipment & material. They further claim that checking of purchases at NEX is a routine procedure observed at base retail outlets to protect & safeguard merchandise, cash & equipment pursuant to par. 2 & 4(b) of NAVRESALEACT SUBIC INST. 5500.1. July 6, 1987 Montoya filed a motion for preliminary attachment claiming that Bradford was about to leave the country & was removing & disposing her properties w/intent to defraud her creditors. Motion granted by RTC. July 14, 1987 Montoya opposed Bradfords motion to dismiss. She claims that: (1) search was outside NEX JUSMAG store thus its improper, unlawful & highly-discriminatory and beyond Bradfords authority; (2) due to excess in authority and since her liability is personal, Bradford cant rely on sovereign immunity; (3) Bradfords act was committed outside the military base thus under the jurisdiction of Philippine courts; (4) the Court can inquire into the factual circumstances of case to determine WON Bradford acted w/in or outside her authority. RTC granted Montoyas motion for the issuance of a writ of preliminary attachment and later on issued writ of attachment opposed by Bradford. Montoya allowed to present evidence & Bradford declared in default for failure to file an answer. RTC ruled in favor of Montoya claiming that search was unreasonable, reckless, oppressive & against

US v. Reyes 219 SCRA 192 (1993) UNITED STATES OF AMERICA vs. REYES Petition for Certiorari to Annul & Set Aside RTC Cavite Branch 22 Resolution, 1993 FACTS: Respondent Nelia Montoya, an American Citizen, worked as an ID checker at the US Navy Exchange (NEX) at the US Military Assistance Group (JUSMAG) headquarters in Quezon City. Shes married to Edgardo Montoya, a Filipino-American serviceman employed by the US Navy & stationed in San Francisco. Petitioner Maxine is an American Citizen employed at the JUSMAG headquarters as the activity exchange manager. Jan. 22, 1987 Montoya bought some items from the retail store Bradford managed, where she had purchasing privileges. After shopping & while she was already at the parking lot, Mrs. Yong Kennedy, a fellow ID checker approached her & told her that she needed to search her bags upon Bradfords instruction. Montoya approached Bradford to protest the search but she was told that it was to be made on all JUSMAG employees on that day. Mrs. Kennedy then performed the search on her person, bags & car in front of Bradford & other curious onlookers. Nothing irregular was found thus she was allowed to leave afterwards. Montoya learned that she was the only person subjected to such search that day & she was informed by NEX Security Manager Roynon that NEX JUSMAG employees are not searched outside the store unless there is a strong evidence of a wrong-doing. Montoya cant recall any

Montoyas liberty guaranteed by Consti. She was awarded P300k for moral damages, P100k for exemplary damages & P50k for actual expenses. Bradford filed a Petition for Restraining Order. SC granted TRO enjoining RTC from enforcing decision. Montoya claims that Bradford was acting as a civilian employee thus not performing governmental functions. Even if she were performing governmental acts, she would still not be covered by the immunity since she was acting outside the scope of her authority. She claims that criminal acts of a public officer/employee are his private acts & he alone is liable for such acts. She believes that this case is under RP courts jurisdiction because act was done outside the territorial control of the US Military Bases, it does not fall under offenses where US has been given right to exercise its jurisdiction and Bradford does not possess diplomatic immunity. She further claims that RP courts can inquire into the factual circumstances & determine WON Bradford is immune. ISSUES/RATIO: 1. WON the case is under the RTCs jurisdiction - YES Intervention of a third party is discretionary upon the Court. US did not obtain leave of court (something like asking for Courts permission) to intervene in the present case. Technically, it should not be allowed to intervene but since RTC entertained its motion to dismiss, it is deemed to have allowed US to intervene. By voluntarily appearing, US must be deemed to have subjected itself to RTCs jurisdiction. 2. WON RTC committed a grave abuse of discretion in denying Bradfords motion to dismiss. - NO Petitioners failed to specify any grounds for a motion to dismiss enumerated in Sec. 1, Rule 16, Rules of Court. Thus, it actually lacks cause of action. A cause of action is necessary so that Court would be able to render a valid judgment in accordance with the prayer in the complaint. A motion to dismiss w/c fails to state a cause of action hypothetically admits the truth of the allegations in the complaint. RTC should have deferred the resolution instead of denying it for lack of merit. But this is immaterial at this time since petitioners have already brought this petition to the SC. 3. WON case at bar is a suit against the State. - NO Doctrine of state immunity is expressed in Art. XVI, Sec. 3 of the 1987 Constitution. This immunity also applies to complaints filed against officials of the state for acts allegedly performed by them in discharge of their duties since it will require the state to perform an affirmative

act such as appropriation of amount to pay damages. This will be regarded as a case against the state even if it has not be formally impleaded. But this is not all encompassing. Its a different matter where the public official is made to account in his capacity as such for acts contrary to law & injurious to rights of plaintiff. State authorizes only legal acts by its officers. Action against officials by one whose rights have been violated by such acts is not a suit against the State w/in the rule of immunity of the State from suit. The doctrine of state immunity cannot be used as an instrument for perpetrating an injustice. It will not apply & may not be invoked where the public official is being sued in his private & personal capacity as an ordinary citizen. This usually arises where the public official acts w/o authority or in excess of the powers vested in him. A public official is liable if he acted w/malice & in bad faith or beyond the scope of his authority or jurisdiction. (Shauf vs. CA) Also, USA vs. Guinto declared that USA is not conferred with blanket immunity for all acts done by it or its agents in the Philippines merely because they have acted as agents of the US in the discharge of their official functions. In this case, Bradford was sued in her private/personal capacity for acts done beyond the scope & place of her official function, thus, it falls w/in the exception to the doctrine of state immunity. 4. WON Bradford enjoys diplomatic immunity. - NO First of all, she is not among those granted diplomatic immunity under Art. 16(b) of the 1953 Military Assistance Agreement creating the JUSMAG. Second, even diplomatic agents who enjoy immunity are liable if they perform acts outside their official functions (Art. 31, Vienna Convention on Diplomatic Relations). HELD: Petition denied. TRO lifted. NIA vs IAC, 214 SCRA 35, 92 Held: Damages caused by the officials of NIA for its negligence in the construction of the canal which caused damages to nearby land, NIA is liable under Art 2176 NCC as NIAs official are not special agent in performing their official assigned duties and functions. LGU are liable for damages for the death or injuries suffered by any person by reason of defective conditions of roads, streets, bridges, public building and other public works under their control or supervision. (Art 2189) LGUs and their official are not exempt from liability for death or injury to persons or damage to property. (Sec 24, RA 7160 LGC of 1991)