Republic of the Philippines

In the afternoon of December 13, 1968, private respondent

SUPREME COURT

with several other persons went to the Manila International

Manila

Airport to meet his future son-in-law. In order to get a better

Petitioner now comes before this Court raising the following

view of the incoming passengers, he and his group proceeded

assignment of errors:

THIRD DIVISION
G.R. No. L-51806

denied.

to the viewing deck or terrace of the airport.

November 8, 1988

1.

The Court of Appeals gravely erred in not holding that

CIVIL AERONAUTICS ADMINISTRATION, petitioner,

While walking on the terrace, then filled with other people,

the present the CAA is really a suit against the Republic of the

vs.

private respondent slipped over an elevation about four (4)

Philippines which cannot be sued without its consent, which

COURT OF APPEALS and ERNEST E. SIMKE, respondents.

inches high at the far end of the terrace. As a result, private

was not given in this case.

The Solicitor General for petitioner.

respondent fell on his back and broke his thigh bone.

Ledesma, Guytingco, Veleasco & Associates for respondent

Ernest E. Simke.

2.

The Court of Appeals gravely erred in finding that the

The next day, December 14, 1968, private respondent was

injuries of respondent Ernest E. Simke were due to petitioner's

operated on for about three hours.

negligence although there was no substantial evidence to

CORTES, J.:

support such finding; and that the inference that the hump or
Private respondent then filed an action for damages based on

elevation the surface of the floor area of the terrace of the

Assailed in this petition for review on certiorari is the decision

quasi-delict with the Court of First Instance of Rizal, Branch VII

fold) MIA building is dangerous just because said respondent

of the Court of Appeals affirming the trial court decision which

against petitioner Civil Aeronautics Administration or CAA as

tripped over it is manifestly mistaken circumstances that

reads as follows:

the entity empowered "to administer, operate, manage,

justify a review by this Honorable Court of the said finding of

control, maintain and develop the Manila International

fact of respondent appellate court (Garcia v. Court of Appeals,

Airport ... ." [Sec. 32 (24), R.A. 776].

33 SCRA 622; Ramos v. CA, 63 SCRA 331.)

reimbursement of his actual medical and hospital expenses,

Said claim for damages included, aside from the medical and

3.

with interest at the legal rate from the commencement of the

hospital bills, consequential damages for the expenses of two

to pay actual, consequential, moral and exemplary damages,

suit; the amount of P20,200.00 as consequential damages; the

lawyers who had to go abroad in private respondent's stead to

as well as attorney's fees to respondent Simke although

amount of P30,000.00 as moral damages; the amount of

finalize certain business transactions and for the publication of

there was no substantial and competent proof to support said

P40,000.00 as exemplary damages; the further amount of

notices announcing the postponement of private respondent's

awards I Rollo, pp. 93-94 1.

P20,000.00 as attorney's fees and the costs [Rollo, p. 24].

daughter's wedding which had to be cancelled because of his

WHEREFORE, judgment is hereby rendered ordering defendant

to

pay

plaintiff

the

amount

of

P15,589.55

as

full

accident [Record on Appeal, p. 5].

The Court of Appeals gravely erred in ordering petitioner

The facts of the case are as follows:

Judgment

was

rendered

in

private

respondent's

favor

Invoking the rule that the State cannot be sued without its

Private respondent is a naturalized Filipino citizen and at the

prompting petitioner to appeal to the Court of Appeals. The

consent, petitioner contends that being an agency of the

time of the incident was the Honorary Consul Geileral of Israel

latter affirmed the trial court's decision. Petitioner then filed

government, it cannot be made a party-defendant in this case.

in the Philippines.

with the same court a Motion for, Reconsideration but this was

This Court has already held otherwise in the case of National

Second, the Teodoro case did not make any qualification or

True, the law prevailing in 1952 when the Teodoro case was

Airports Corporation v. Teodoro, Sr. [91 Phil. 203 (1952)].

limitation as to whether or not the CAA's power to sue and be

promulgated was Exec. Order 365 (Reorganizing the Civil

Petitioner contends that the said ruling does not apply in this

sued applies only to contractual obligations. The Court in the

Aeronautics Administration and Abolishing the National Airports

case because: First, in the Teodoro case, the CAA was sued

Teodoro case ruled that Sections 3 and 4 of Executive Order

Corporation). Republic Act No. 776 (Civil Aeronautics Act of the

only

Airports

365 confer upon the CAA, without any qualification, the power

Philippines), subsequently enacted on June 20, 1952, did not

Corporation being the original party. Second, in the Teodoro

to sue and be sued, albeit only by implication. Accordingly,

alter the character of the CAA's objectives under Exec, Order

case, the cause of action was contractual in nature while here,

this Court's pronouncement that where such power to sue and

365. The pertinent provisions cited in the Teodoro case,

the cause of action is based on a quasi-delict. Third, there is

be sued has been granted without any qualification, it can

particularly Secs. 3 and 4 of Exec. Order 365, which led the

no specific provision in Republic Act No. 776, the law

include a claim based on tort or quasi-delict [Rayo v. Court of

Court to consider the CAA in the category of a private entity

governing the CAA, which would justify the conclusion that

First Instance of Bulacan, G.R. Nos. 55273-83, December

were retained substantially in Republic Act 776, Sec. 32 (24)

petitioner was organized for business and not for governmental

19,1981, 1 1 0 SCRA 4561 finds relevance and applicability to

and (25).<re||an1w> Said Act provides:

purposes. [Rollo, pp. 94-97].

the present case.

in

substituted

capacity,

the

National

Sec. 32. Powers and Duties of the Administrator. Subject to the

Such arguments are untenable.

Third, it has already been settled in the Teodoro case that the

general control and supervision of the Department Head, the

CAA as an agency is not immune from suit, it being engaged in

Administrator shall have among others, the following powers

functions pertaining to a private entity.

and duties:

xxx xxx xxx

xxx xxx xxx

The Civil Aeronautics Administration comes under the category

(24) To administer, operate, manage, control, maintain and

of a private entity. Although not a body corporate it was

develop the Manila International Airport and all government-

created, like the National Airports Corporation, not to

owned aerodromes except those controlled or operated by the

... To all legal intents and practical purposes, the National

maintain a necessary function of government, but to run what

Armed Forces of the Philippines including such powers and

Airports Corporation is dead and the Civil Aeronautics

is essentially a business, even if revenues be not its prime

duties as: (a) to plan, design, construct, equip, expand,

Administration is its heir or legal representative, acting by the

objective but rather the promotion of travel and the

improve, repair or alter aerodromes or such structures,

law of its creation upon its own rights and in its own name.

convenience of the travelling public. It is engaged in an

improvement or air navigation facilities; (b) to enter into,

The better practice there should have been to make the Civil

enterprise which, far from being the exclusive prerogative of

make and execute contracts of any kind with any person, firm,

Aeronautics Administration the third party defendant instead

state, may, more than the construction of public roads, be

or public or private corporation or entity; ... .

of the National Airports Corporation. [National Airports Corp. v.

undertaken by private concerns. [National Airports Corp. v.

Teodoro, supra, p. 208.]

Teodoro, supra, p. 207.]

First, the Teodoro case, far from stressing the point that the
CAA was only substituted for the National Airports Corporation,
in fact treated the CAA as the real party in interest when it
stated that:

xxx xxx xxx

(25) To determine, fix, impose, collect and receive landing

fees, parking space fees, royalties on sales or deliveries, direct

xxx xxx xxx

xxx xxx xxx

or indirect, to any aircraft for its use of aviation gasoline, oil

and lubricants, spare parts, accessories and supplies, tools,

other royalties, fees or rentals for the use of any of the

1985, 138 SCRA 631, where it was held that the Philippine

This Court during its ocular inspection also observed the

property under its management and control.

National Railways, although owned and operated by the

dangerous and defective condition of the open terrace which

government, was not immune from suit as it does not exercise

has remained unrepaired through the years. It has observed

sovereign but purely proprietary and business functions.

the lack of maintenance and upkeep of the MIA terrace, typical

Accordingly, as the CAA was created to undertake the

of many government buildings and offices. Aside from the

From the foregoing, it can be seen that the CAA is tasked with

management of airport operations which primarily involve

litter allowed to accumulate in the terrace, pot holes cause by

private or non-governmental functions which operate to

proprietary functions, it cannot avail of the immunity from suit

missing tiles remained unrepaired and unattented. The several

remove it from the purview of the rule on State immunity from

accorded

elevations shown in the exhibits presented were verified by

suit. For the correct rule as set forth in the Tedoro case states:

governmental functions.

xxx xxx xxx

to

government

agencies

performing

strictly

this Court during the ocular inspection it undertook. Among

these elevations is the one (Exh. A) where plaintiff slipped.

xxx xxx xxx

II

This Court also observed the other hazard, the slanting or

sliding step (Exh. B) as one passes the entrance door leading to

Not all government entities, whether corporate or non-

Petitioner tries to escape liability on the ground that there was

the terrace [Record on Appeal, U.S., pp. 56 and 59; Emphasis

corporate, are immune from suits. Immunity functions suits is

no basis for a finding of negligence. There can be no

supplied.]

determined by the character of the objects for which the

negligence on its part, it alleged, because the elevation in

entity was organized. The rule is thus stated in Corpus Juris:

question "had a legitimate purpose for being on the terrace

The Court of Appeals further noted that:

and was never intended to trip down people and injure them.
Suits against State agencies with relation to matters in which

It was there for no other purpose but to drain water on the

The inclination itself is an architectural anomaly for as stated

they have assumed to act in private or non-governmental

floor area of the terrace" [Rollo, P. 99].

by the said witness, it is neither a ramp because a ramp is an

capacity, and various suits against certain corporations created

inclined surface in such a way that it will prevent people or

by the state for public purposes, but to engage in matters

To determine whether or not the construction of the elevation

pedestrians from sliding. But if, it is a step then it will not

partaking more of the nature of ordinary business rather than

was done in a negligent manner, the trial court conducted an

serve its purpose, for pedestrian purposes. (tsn, p. 35, Id.)

functions of a governmental or political character, are not

ocular inspection of the premises.

[rollo, p. 29.]

xxx xxx xxx

These factual findings are binding and conclusive upon this

regarded as suits against the state. The latter is true, although

the state may own stock or property of such a corporation for
by engaging in business operations through a corporation, the

Court. Hence, the CAA cannot disclaim its liability for the

state divests itself so far of its sovereign character, and by

... This Court after its ocular inspection found the elevation

negligent construction of the elevation since under Republic

implication consents to suits against the corporation. (59 C.J.,

shown in Exhs. A or 6-A where plaintiff slipped to be a step, a

Act No. 776, it was charged with the duty of planning,

313) [National Airport Corporation v. Teodoro, supra, pp. 206-

dangerous sliding step, and the proximate cause of plaintiffs

designing, constructing, equipping, expanding, improving,

207; Emphasis supplied.]

injury...

repairing

or

altering

aerodromes

or

such

structures,

improvements or air navigation facilities [Section 32, supra,

This doctrine has been reaffirmed in the recent case of Malong
v. Philippine National Railways [G.R. No. L-49930, August 7,

xxx xxx xxx

R.A. 776]. In the discharge of this obligation, the CAA is dutybound to exercise due diligence in overseeing the construction

and maintenance of the viewing deck or terrace of the airport.

Contributory negligence under Article 2179 of the Civil Code

something before them to suggest or warn of danger. Could a

contemplates a negligent act or omission on the part of the

prudent man, in the case under consideration, foresee harm as

It must be borne in mind that pursuant to Article 1173 of the

plaintiff, which although not the proximate cause of his injury,

a result of the course actually pursued' If so, it was the duty of

Civil Code, "(t)he fault or negligence of the obligor consists in

contributed to his own damage, the proximate cause of the

the actor to take precautions to guard against that harm.

the omission of that diligence which is required by the nature

plaintiffs own injury being the defendant's lack of due care. In

Reasonable foresight of harm, followed by the ignoring of the

of the obligation and corresponds with the circumstances of

the instant case, no contributory negligence can be imputed to

suggestion born of this prevision, is always necessary before

the person, of the time and of the place." Here, the obligation

the

negligence can be held to exist.... [Picart v. Smith, supra, p.

of the CAA in maintaining the viewing deck, a facility open to

formulated in the early case of Picart v. Smith, 37 Phil. 809

the public, requires that CAA insure the safety of the viewers

(1918):

private

respondent,

considering

the following

test

using it. As these people come to the viewing deck to watch

813; Emphasis supplied.]

The private respondent, who was the plaintiff in the case

the planes and passengers, their tendency would be to look to

The test by which to determine the existence of negligence in

before the lower court, could not have reasonably foreseen

where the planes and the incoming passengers are and not to

a particular case may be stated as follows: Did the defendant

the harm that would befall him, considering the attendant

look down on the floor or pavement of the viewing deck. The

in doing the alleged negligent act use that reasonable care and

factual circumstances. Even if the private respondent had

CAA should have thus made sure

dangerous

caution which an ordinarily prudent man would have used in

been looking where he was going, the step in question could

obstructions or elevations exist on the floor of the deck to

the same situation? If not, then he is guilty of negligence. The

not easily be noticed because of its construction. As the trial

prevent any undue harm to the public.

law here in effect adopts the standard supposed to be supplied

court found:

that

no

by the imaginary conduct of the discreet paterfamilias of the

The legal foundation of CAA's liability for quasi-delict can be

Roman law. The existence of the negligence in a given case is

In connection with the incident testified to, a sketch, Exhibit

found in Article 2176 of the Civil Code which provides that

not determined by reference to the personal judgment of the

O, shows a section of the floorings oil which plaintiff had

"(w)hoever by act or omission causes damage to another, there

actor in the situation before him. The law considers what

tripped, This sketch reveals two pavements adjoining each

being fault or negligence, is obliged to pay for the damage

would be reckless, blameworthy, or negligent in the man of

other, one being elevated by four and one-fourth inches than

done... As the CAA knew of the existence of the dangerous

ordinary intelligence and prudence and determines liability by

the other. From the architectural standpoint the higher,

elevation which it claims though, was made precisely in

that.

pavement is a step. However, unlike a step commonly seen

accordance with the plans and specifications of the building

around, the edge of the elevated pavement slanted outward as

for proper drainage of the open terrace [See Record on Appeal,

The question as to what would constitute the conduct of a

one walks to one interior of the terrace. The length of the

pp. 13 and 57; Rollo, p. 391, its failure to have it repaired or

prudent man in a given situation must of course be always

inclination between the edges of the two pavements is three

altered in order to eliminate the existing hazard constitutes

determined in the light of human experience and in view of

inches. Obviously, plaintiff had stepped on the inclination

such negligence as to warrant a finding of liability based on

the facts involved in the particular case. Abstract speculations

because had his foot landed on the lower pavement he would

quasi-delict upon CAA.

cannot be here of much value but this much can be profitably

not have lost his balance. The same sketch shows that both

said:

the

pavements including the inclined portion are tiled in red

The Court finds the contention that private respondent was, at

circumstances which are before them or known to them. They

cement, and as shown by the photograph Exhibit A, the lines of

the very least, guilty of contributory negligence, thus reducing

are not, and are not supposed to be omniscient of the future.

the tilings are continuous. It would therefore be difficult for a

the damages that plaintiff may recover, unmeritorious.

Hence they can be expected to take care only when there is

pedestrian to see the inclination especially where there are

Reasonable

men-overn

their

conduct

by

plenty of persons in the terrace as was the situation when

been duly proven through the testimony of Dr. Ambrosio

Art. 2231. In

quasi-delicts,

exemplary

damages

plaintiff fell down. There was no warning sign to direct one's

Tangco, the physician who attended to private respondent

granted if the defendant acted with gross negligence.

attention to the change in the elevation of the floorings.

(Rollo, p. 26) and who Identified Exh. "H" which was his bill for

[Rollo, pp. 2829.]

professional services [Rollo, p. 31].

may

be

Gross negligence which, according to the Court, is equivalent

to the term "notorious negligence" and consists in the failure

III

Concerning the P20,200.00 alleged to have been spent for

to exercise even slight care [Caunan v. Compania General de

other expenses such as the transportation of the two lawyers

Tabacos, 56 Phil. 542 (1932)] can be attributed to the CAA for

Finally, petitioner appeals to this Court the award of damages

who had to represent private respondent abroad and the

its failure to remedy the dangerous condition of the

to private respondent. The liability of CAA to answer for

publication of the postponement notices of the wedding, the

questioned elevation or to even post a warning sign directing

damages, whether actual, moral or exemplary, cannot be

Court holds that the same had also been duly proven. Private

the attention of the viewers to the change in the elevation of

seriously doubted in view of one conferment of the power to

respondent had adequately shown the existence of such losses

the floorings notwithstanding its knowledge of the hazard

sue and be sued upon it, which, as held in the case of Rayo v.

and the amount thereof in the testimonies before the trial

posed by such elevation [Rollo, pp. 28-29; Record oil Appeal,

Court of First Instance, supra, includes liability on a claim for

court [CA decision, p. 81. At any rate, the findings of the Court

p. 57]. The wanton disregard by the CAA of the safety of the

quasi-dilict. In the aforestated case, the liability of the

of Appeals with respect to this are findings of facts [One Heart

people using the viewing deck, who are charged an admission

National Power Corporation to answer for damages resulting

Sporting Club, Inc. v. Court of Appeals, G.R. Nos. 5379053972,

fee, including the petitioner who paid the entrance fees to get

from its act of sudden, precipitate and simultaneous opening

Oct. 23, 1981, 108 SCRA 4161 which, as had been held time

inside the vantage place [CA decision, p. 2; Rollo, p. 25] and

of the Angat Dam, which caused the death of several residents

and again, are, as a general rule, conclusive before this Court

are, therefore, entitled to expect a facility that is properly

of the area and the destruction of properties, was upheld since

[Sese v. Intermediate Appellate Court, G.R. No. 66186, July 31,

and safely maintained justifies the award of exemplary

the o,rant of the power to sue and be sued upon it necessarily

1987,152 SCRA 585].

damages against the CAA, as a deterrent and by way of

implies that it can be held answerable for its tortious acts or

any wrongful act for that matter.

example or correction for the public good. The award of

With respect to the P30,000.00 awarded as moral damages,

P40,000.00

by

the

trial

court

as

exemplary

damages

the Court holds private respondent entitled thereto because of

appropriately underscores the point that as an entity changed

With respect to actual or compensatory damages, the law

the physical suffering and physical injuries caused by the

with providing service to the public, the CAA. like all other

mandates that the same be proven.

negligence of the CAA [Arts. 2217 and 2219 (2), New Civil

entities serving the public. has the obligation to provide the

Code].

public with reasonably safe service.

entitled to an adequate compensation only for such pecuniary

With respect to the award of exemplary damages, the Civil

Finally, the award of attorney's fees is also upheld considering

loss suffered by him as he has duly proved. Such compensation

Code explicitly, states:

that under Art. 2208 (1) of the Civil Code, the same may be

Art. 2199. Except as provided by law or by stipulation, one are

is referred to as actual on compensatory damages [New Civil

Code].

Private respondent claims P15,589.55 representing medical

and hospitalization bills. This Court finds the same to have

awarded whenever exemplary damages are awarded, as in this

Art. 2229. Exemplary or corrective damages, are imposed, by

case, and,at any rate, under Art. 2208 (11), the Court has the

way of example or correction for the public good, in addition

discretion to grant the same when it is just and equitable.

to the moral, liquidated or compensatory

However, since the Manila International Airport Authority

(MIAA) has taken over the management and operations of the

WHEREFORE the petition is hereby granted ordering the

Government of Caloocan appealed to the Court of Appeals.

Manila

Aquino

Regional Trial Court of Kaloocan City, Branch 123, to

Respondent Santiago and her co-parties moved for the

International Airport under Republic Act No. 6639] pursuant to

immediately effect the alias writ of execution dated January

dismissal of the appeal for being dilatory and frivolous but the

Executive Order No. 778 as amended by executive Orders Nos.

16, 1992 without further delay.

appellate court denied their motion. Thus, they elevated the

903 (1983), 909 (1983) and 298 (1987) and under Section 24 of

Counsel for the respondents are warned that a repetition of

case on certiorari before this Court, docketed as G.R. No. L-

the said Exec. Order 778, the MIAA has assumed all the debts,

their contemptuous act to delay the execution of a final and

39288-89, Heirs of Abelardo Palomique, et al. vs. Marcial

liabilities and obligations of the now defunct Civil Aeronautics

executory judgment will be dealt with more severely.

Samson, et al. In our Resolution dated January 31, 1985, we

Administration (CAA), the liabilities of the CAA have now been

SO ORDERED.[2]

held that the appellate court erred in not dismissing the

transferred to the MIAA.

It is important to state at the outset that the dispute between

appeal, and that the appeal of the City Government of

petitioner and private respondent has been litigated thrice

Caloocan was frivolous and dilatory. In due time, the resolution

WHEREFORE, finding no reversible error, the Petition for

before this Court: first, in G.R. No. L-39288-89, entitled Heirs

lapsed into finality and entry of judgment was made on

review on certiorari is DENIED and the decision of the Court of

of Abelardo Palomique, et al. vs. Marcial Samson, et al.,

February 27, 1985.

Appeals in CA-G.R. No. 51172-R is AFFIRMED.

decided on January 31, 1985; second, in G.R. No. 98366,

In 1986, the City Government of Caloocan paid respondent

entitled City Government of Caloocan vs. Court of Appeals, et

Santiago P75,083.37 in partial payment of her backwages,

SO ORDERED.

al., resolved on May 16, 1991, and third, in G.R. No. 102625,

thereby leaving a balance of P530,761.91. Her co-parties were

THIRD DIVISION

entitled Santiago vs. Sto. Tomas, et al., decided on August 1,

paid in full.[3] In 1987, the City of Caloocan appropriated

[G.R. No. 107271. September 10, 2003]

1995. This is not to mention the numerous concurrent efforts

funds for her unpaid back salaries. This was included in

by the City Government of Caloocan to seek relief from other

Supplemental Budget No. 3 for the fiscal year 1987.

CITY OF CALOOCAN and NORMA M. ABRACIA, petitioners, vs.

judicial and quasi-judicial bodies. The present petition for

Surprisingly, however, the City later refused to release the

HON. MAURO T. ALLARDE, Presiding Judge of Branch 123,

certiorari is the fourth time we are called upon to resolve the

money to respondent Santiago.

RTC of Caloocan City, ALBERTO A. CASTILLO, Deputy Sheriff

dispute.

Respondent Santiago exerted effort for the execution of the

of Branch 123, RTC of Caloocan City, and DELFINA

The factual and procedural antecedents follow.

remainder of the money judgment but she met stiff opposition

HERNANDEZ SANTIAGO and PHILIPPINE NATIONAL BANK

Sometime in 1972, Marcial Samson, City Mayor of Caloocan

from the City Government of Caloocan. On February 12, 1991,

(PNB), respondents.

City, through Ordinance No. 1749, abolished the position of

Judge Mauro T. Allarde, RTC of Caloocan City, Branch 123,

DECISION

Assistant City Administrator and 17 other positions from the

issued a writ of execution for the payment of the remainder of

CORONA, J.:

plantilla of the local government of Caloocan. Then Assistant

respondent Santiagos back salaries and other emoluments.[4]

City Administrator Delfina Hernandez Santiago and the 17

For the second time, the City Government of Caloocan went

Assailed in this petition for certiorari is the decision[1] dated

affected employees of the City Government assailed the

up to the Court of Appeals and filed a petition for certiorari,

August 31, 1992, of the Court of Appeals in CA G.R. SP No.

legality of the abolition before the then Court of First Instance

prohibition and injunction to stop the trial court from

27423, ordering the Regional Trial Court of Caloocan City,

(CFI) of Caloocan City, Branch 33.

enforcing the writ of execution. The CA dismissed the petition

Branch 123, to implement an alias writ of execution dated

In 1973, the CFI declared the abolition illegal and ordered the

and affirmed the order of issuance of the writ of execution.[5]

January 16, 1992. The dispositive portion read as follows:

reinstatement of all the dismissed employees and the payment

One of the issues raised and resolved therein was the extent to

of their back salaries and other emoluments. The City

which back salaries and emoluments were due to respondent

International

Airport

[renamed

Ninoy

Santiago. The appellate court held that she was entitled to her

three more vehicles of the City of Caloocan - [6]

finality x x x x the court considers that resort by the City

salaries from October, 1983 to December, 1986.

ONE (1) Unit Motor Vehicle (Hunter Station Wagon); Motor No.

Government of Caloocan to respondent CSC was but another

And for the second time, the City Government of Caloocan

C-240-199629; Chassis No. MBB-910369C;

attempt to deprive petitioner Santiago of her claim to back

appealed to this Court in G.R. No. 98366, City Government of

ONE (1) Unit Motor Vehicle (Hunter Series 11-Diesel); Engine

salaries x x x and a continuation of the Citys abuse and misuse

Caloocan vs. Court of Appeals, et al. The petition was

No. 4FB1-174328, Chassis No. MBB-910345C; Plate No. SDL-653;

of the rules of judicial procedure. The Citys acts have resulted

dismissed, through our Resolution of May 16, 1991, for having

ONE (1) Unit Motor Vehicle (Hunter Series 11-Diesel); Engine

in wasting the precious time and resources of the courts and

been filed late and for failure to show any reversible error on

No. 4FB-165196; Chassis No. MBB 910349C.

respondent CSC. (Underscoring supplied).

the part of the Court of Appeals. The resolution subsequently

All the vehicles, including that previously sold in the auction

On October 5, 1992, the City Council of Caloocan passed

attained finality and the corresponding entry of judgment was

sale, were owned by the City and assigned for the use of

Ordinance No. 0134, Series of 1992, which included the

made on July 29, 1991.

herein petitioner Norma Abracia, Division Superintendent of

amount of P439,377.14 claimed by respondent Santiago as

On motion of private respondent Santiago, Judge Mauro T.

Caloocan City, and other officials of the Division of City

back salaries, plus interest.[7] Pursuant to the subject

Allarde ordered the issuance of an alias writ of execution on

Schools.

ordinance, Judge Allarde issued an order dated November 10,

March 3, 1992. The City Government of Caloocan moved to

Meanwhile,

reconsider the order, insisting in the main that respondent

clarification from the Civil Service Commission (CSC) on

WHEREFORE, the City Treasurer (of Caloocan), Norberto

Santiago was not entitled to backwages from 1983 to 1986.

whether respondent Santiago was considered to have rendered

Azarcon is hereby ordered to deliver to this Court within five

The court a quo denied the motion and forthwith issued the

services from 1983-1986 as to be entitled to backwages for

(5) days from receipt hereof, (a) managers check covering the

alias writ of execution. Unfazed, the City Government of

that period. In its Resolution No. 91-1124, the CSC ruled in the

amount of P439,378.00 representing the back salaries of

Caloocan filed a motion to quash the writ, maintaining that

negative.

petitioner Delfina H. Santiago in accordance with Ordinance

the money judgment sought to be enforced should not have

On

included salaries and allowances for the years 1983-1986. The

challenged the CSC resolution before this Court in G.R. No.

decision in these cases.

trial court likewise denied the motion.

102625, Santiago vs. Sto. Tomas, et al. On July 8, 1993, we

Then Caloocan Mayor Macario A. Asistio, Jr., however, refused

On July 27, 1992, Sheriff Alberto A. Castillo levied and sold at

initially dismissed the petition for lack of merit; however, we

to sign the check intended as payment for respondent

public auction one of the motor vehicles of the City

reconsidered the dismissal of the petition in our Resolution

Santiagos claims. This, despite the fact that he was one of the

Government of Caloocan, with plate no. SBH-165, for

dated August 1, 1995, this time ruling in favor of respondent

signatories of the ordinance authorizing such payment. On

P100,000. The proceeds of the sale were turned over to

Santiago:

April 29, 1993, Judge Allarde issued another order directing

respondent Santiago in partial satisfaction of her claim,

The issue of petitioner Santiagos right to back salaries for the

the Acting City Mayor of Caloocan, Reynaldo O. Malonzo, to

thereby leaving a balance of P439,377.14, inclusive of

period from October 1983 to December 1986 having been

sign the check which had been pending before the Office of

interest. Petitioners filed a motion questioning the validity of

resolved in G.R. No. 98366 on 16 May 1991, CSC Resolution No.

the Mayor since December 11, 1992. Acting City Mayor Malonzo

the auction sale of the vehicle with plate no. SBH-165, and a

91-1124 promulgated later on 24 September 1991 in particular,

informed the trial court that he could not comply with the

supplemental motion maintaining that the properties of the

its ruling on the extent of backwages due petitioner Santiago

order since the subject check was not formally turned over to

municipality were exempt from execution. In his Order dated

was in fact moot and academic at the time of its

him by the City Mayor who went on official leave of absence

October 1, 1992, Judge Allarde denied both motions and

promulgation. CSC Resolution No. 91-1124 could not, of

on April 15, 1993, and that he doubted whether he had

directed the sheriff to levy and schedule at public auction

course, set aside what had been judicially decided with

authority to sign the same.[8]

the

November

City

22,

Government

1991,

private

of

Caloocan

respondent

sought

Santiago

1992, decreeing that:

No. 0134 S. 1992 and pursuant to the final and executory

Thus, in an order dated May 7, 1993, Judge Allarde ordered

Mayor is still needed for the release of the appropriation;

from execution. Garnishment is considered a specie of

Sheriff Alberto A. Castillo to immediately garnish the funds of

(b) ordering the levy and sale at public auction of three (3)

attachment by means of which the plaintiff seeks to subject to

the City Government of Caloocan corresponding to the claim of

motor vehicles owned by the City of Caloocan, which vehicles

his claim property of the defendant in the hands of a third

respondent Santiago.[9] On the same day, Sheriff Alberto A.

are necessary for public use and cannot be attached nor sold

person, or money owed by such third person or garnishee to

Castillo served a copy of the Notice of Garnishment on the

in an execution sale to satisfy a money judgment against the

the defendant.[10]

Philippine National Bank (PNB), Sangandaan Branch, Caloocan

City of Caloocan;

The rule is and has always been that all government funds

City. When PNB immediately notified the City of Caloocan of

(c) peremptorily denying petitioner City of Caloocans urgent

deposited in the PNB or any other official depositary of the

the Notice of Garnishment, the City Treasurer sent a letter-

motions to vacate and set aside the auction sale of the motor

Philippine

advice informing PNB that the order of garnishment was

vehicle with PLATE NO. SBH-165, notwithstanding that the

instrumentalities, whether by general or special deposit,

illegal, with a warning that it would hold PNB liable for any

auction sale by the Sheriff was tainted with serious

remain government funds and may not be subject to

damages which may be caused by the withholding of the funds

irregularities, more particularly:

garnishment or levy, in the absence of a corresponding

of the city. PNB opted to comply with the order of Judge

i. non-compliance with the mandatory posting of the notice of

appropriation as required by law:[11]

Allarde and released to the Sheriff a managers check

sale;

Even though the rule as to immunity of a state from suit is

amounting to P439,378. After 21 long years, the claim of

ii. non-observance of the procedure that a sale through public

relaxed, the power of the courts ends when the judgment is

private respondent Santiago was finally settled in full.

auction has to be made and consummated at the time of the

rendered. Although the liability of the state has been judicially

On June 4, 1993, however, while the instant petition was

auction, at the designated place and upon actual payment of

ascertained, the state is at liberty to determine for itself

pending, the City Government of Caloocan filed yet another

the purchase price by the winning bidder;

whether to pay the judgment or not, and execution cannot

motion with this Court, a Motion to Declare in Contempt of

iii. violation of Sec. 21, Rule 39 of the Rules of Court to the

issue on a judgment against the state. Such statutes do not

Court; to Set Aside the Garnishment and Administrative

effect that sale of personal property capable of manual

authorize a seizure of state property to satisfy judgments

Complaint against Judge Allarde, respondent Santiago and

delivery must be sold within the view of those attending the

recovered, and only convey an implication that the legislature

PNB. Subsequently, the City Government of Caloocan filed a

sale; and,

will recognize such judgment as final and make provision for

Supplemental Petition formally impleading PNB as a party-

iv. the Sheriffs Certificate of Sale contained false narration of

the satisfaction thereof.[12]

respondent in this case.

facts respecting the actual time of the public auction;

The rule is based on obvious considerations of public policy.

The instant petition for certiorari is directed this time against

(d) the enforcement of the levy made by the Sheriff covering

The functions and public services rendered by the State cannot

the validity of the garnishment of the funds of the City of

the three (3) motor vehicles based on an alias writ that has

be allowed to be paralyzed or disrupted by the diversion of

Caloocan, as well as the validity of the levy and sale of the

long expired.

public funds from their legitimate and specific objects, as

motor vehicles belonging to the City of Caloocan. More

The petition has absolutely no merit. The trial court

appropriated by law.[13]

specifically, petitioners insist that Judge Allarde gravely

committed no grave abuse of discretion in implementing the

However, the rule is not absolute and admits of a well-defined

abused his discretion in:

alias writ of execution to settle the claim of respondent

exception, that is, when there is a corresponding appropriation

(a) ordering the garnishment of the funds of the City of

Santiago, the satisfaction of which petitioner had been

as required by law. Otherwise stated, the rule on the immunity

Caloocan deposited with the PNB, since it is settled that public

maliciously evading for 21 years.

of public funds from seizure or garnishment does not apply

funds are beyond the reach of garnishment and even with the

Petitioner argues that the garnishment of its funds in PNB was

where the funds sought to be levied under execution are

appropriation passed by the City Council, the authority of the

invalid inasmuch as these were public funds and thus exempt

already allocated by law specifically for the satisfaction of the

Government

by

any

of

its

agencies

or

money judgment against the government. In such a case, the

earmarked solely for the Citys monetary obligation to her. The

approved and signed by both the council and then Mayor

monetary judgment may be legally enforced by judicial

judgment of the trial court could then be validly enforced

Macario Asistio, Jr. The mayors signature approving the budget

processes.

against such funds.

ordinance was his assent to the appropriation of funds for

Thus, in the similar case of Pasay City Government, et al. vs.

Indeed,

the

respondent Santiagos backwages. If he did not agree with such

CFI of Manila, Br. X, et al.,[14] where petitioners challenged

Certification issued on December 23, 1992 by Norberto C.

allocation, he could have vetoed the item pursuant to Section

the trial courts order garnishing its funds in payment of the

Azarcon, City Treasurer of Caloocan:

55 of the Local Government Code.[18] There was no such veto.

contract price for the construction of the City Hall, we ruled

CERTIFICATION

In view of the foregoing discourse, we dismiss petitioners

that, while government funds deposited in the PNB are exempt

This is to certify that according to the records available in this

unfounded assertion, probably made more out of sheer

from execution or garnishment, this rule does not apply if an

Office the claim for backwages of the HON. JUDGE DELFINA H.

ignorance of prevailing jurisprudence than a deliberate

ordinance has already been enacted for the payment of the

SANTIAGO has been properly obligated and can be collected in

attempt to mislead us, that the rule that public funds (are)

Citys obligations

accordance with existing accounting and auditing rules and

beyond the reach of levy and garnishment is not qualified by

Upon the issuance of the writ of execution, the petitioner-

regulations.

any condition.[19]

appellants moved for its quashal alleging among other things

This is to certify further that in case the claim is not collected

We now come to the issue of the legality of the levy on the

the exemption of the government from execution. This move

within the present fiscal year, such claim shall be entered in

three motor vehicles belonging to the City of Caloocan which

on the part of petitioner-appellants is at first glance laudable

the books of Accounts Payable and can still be collected in the

petitioners claimed to be exempt from execution, and which

for all government funds deposited with the Philippine

next fiscal year x x x x (Underscoring supplied)

levy was based on an alias writ that had purportedly expired.

National Bank by any agency or instrumentality of the

Petitioners reliance on Municipality of Makati vs. Court of

Suffice it to say that Judge Allarde, in his Order dated

government, whether by way of general or special deposit,

Appeals, et al.,[15] and Commissioner of Public Highways vs.

November 10, 1992,[20] already lifted the levy on the three

remain government funds and may not be subject to

San Diego,[16] does not help their cause.[17] Both cases

vehicles,

garnishment or levy. But inasmuch as an ordinance has already

implicitly affirmed that public funds may be garnished if there

jurisdiction of the court and turning them over to the City

been

of

is a statute which appropriated the amount so garnished. Thus,

Government of Caloocan:

P613,096.00 as payment to the respondent-appellee, then the

in Municipality of Makati, citing San Diego, we unequivocally

x x x x the levy of the three (3) vehicles made by Sheriff

herein case is covered by the exception to the general rule x x

held that:

Alberto Castillo pursuant to the Orders of this Court dated

xx

In this jurisdiction, well-settled is the rule that public funds

October 1 and 8, 1992 is hereby lifted and the said Sheriff is

In the instant case, the City Council of Caloocan already

are not subject to levy and execution, unless otherwise

hereby ordered to return the same to the City Government in

approved and passed Ordinance No. 0134, Series of 1992,

provided by statute x x x x

view of the satisfaction of the decision in these cases x x x x

allocating the amount of P439,377.14 for respondent Santiagos

Similarly, we cannot agree with petitioners argument that the

It is thus unnecessary for us to discuss a moot issue.

back salaries plus interest. Thus this case fell squarely within

appropriation ordinance of the City Council did not authorize

We turn to the third issue raised by petitioners that the

the exception. For all intents and purposes, Ordinance No.

PNB to release the funds because only the City Mayor could

auction sale by Sheriff Alberto A. Castillo of the motor vehicle

0134, Series of 1992, was the corresponding appropriation as

authorize the release thereof. A valid appropriation of public

with plate no. SBH-165 was tainted with serious irregularities.

required by law. The sum indicated in the ordinance for

funds

We need

Santiago were deemed automatically segregated from the

appropriation passed by the City Council of Caloocan providing

presumption of regularity in the performance of the functions

other budgetary allocations of the City of Caloocan and

for the payment of backwages to respondent was duly

of his office. This presumption prevails in the absence of

enacted

expressly

appropriating

the

amount

this

lifts

conclusion

its

is

exemption

further

from

buttressed

execution.

by

Here,

the

thereby

not

formally

emphasize

discharging

that

the

them

sheriff

from

enjoys

the

the

substantial evidence to the contrary and cannot be overcome

requested a ten-day period within which to refer the matter of

certain legal infirmities in connection with the assailed orders

by bare and self-serving allegations. The petitioners failed to

contempt to a counsel of her choice. The request was denied

of

convince us that the auction sale conducted by the sheriff

by Judge Allarde in his assailed order dated October 8, 1992.

circumstances of this case, the nullification of the contested

indeed suffered from fatal flaws. No evidence was adduced to

Thus petitioner Abracia claimed, inter alia, that: (a) she was

orders would be way out of line. For 21 long years, starting

prove that the sheriff had been remiss in the performance of

denied due process; (b) the silence of the order of Judge

1972 when this controversy started up to 1993 when her claim

his duties during the public auction sale. Indeed it would be

Allarde on her request for time violated an orderly and faithful

was fully paid out of the garnished funds of the City of

injudicious for us to assume, as petitioners want us to do, that

recording of the proceedings, and (c) she was coerced into

Caloocan, respondent Santiago was cruelly and unjustly

the sheriff failed to follow the established procedures

agreeing to surrender the vehicles.

deprived of what was due her. It would be, at the very least,

governing public auctions.

We do not think so. What violates due process is the absolute

merciless and unchristian to make private respondent refund

On the contrary, a review of the records shows that the sheriff

lack of opportunity to be heard. That opportunity, the Court is

the City of Caloocan the amount already paid to her, only to

complied with the rules on public auction. The sale of the

convinced, was sufficiently accorded to petitioner Abracia. She

force her to go through the same nightmare all over again.

Citys vehicle was made publicly in front of the Caloocan City

was notified of the contempt charge against her; she was

At any rate, of paramount importance to us is that justice has

Hall on the date fixed in the notice July 27, 1992. In fact,

effectively assisted by counsel when she appeared during the

been served. No right of the public was violated and public

petitioners in their Motion to Declare in Contempt of Court; to

hearing on October 8, 1992; and she was afforded ample

interest was preserved.

Set Aside the Garnishment and Administrative Complaint

opportunity to answer and refute the charge against her. The

Finally, we cannot simply pass over in silence the deplorable

admitted as much:

circumstance that she opted not to avail of her chance to be

act of the former Mayor of Caloocan City in refusing to sign the

On July 27, 1992, by virtue of an alias writ of execution issued

heard on that occasion by asking for an extension of time

check

by the respondent court, a vehicle owned by the petitioner xxx

within which to hire a counsel of her choice, a request denied

respondent. It was an open defiance of judicial processes,

was levied and sold at public auction for the amount of

by the trial court, did not transgress nor deprive her of her

smacking of political arrogance, and a direct violation of the

P100,000.00 and which amount was immediately delivered to

right to due process.

very ordinance he himself approved. Our Resolution in G.R.

the private respondent x x x x[21]

Significantly, during the hearing on October 8, 1992, Mr.

No. 98366, City Government of Caloocan vs. Court of Appeals,

Hence, petitioners cannot now be heard to impugn the validity

Nagpacan manifested in open court that, after conferring with

et al., dated May 16, 1991, dismissing the petition of the City

of the auction sale.

petitioner Abracia, the latter was willing to surrender these

of Caloocan assailing the issuance of a writ of execution by the

Petitioners, in desperation, likewise make much of the

vehicles into the custody of the sheriff on the condition that

trial court, already resolved with finality all impediments to

proceedings before the trial court on October 8, 1992, wherein

the standing motion (for contempt) be withdrawn.[22] Her

the execution of judgment in this case. Yet, the City

petitioner Norma Abracia, Superintendent of the Division of

decision was made freely and voluntarily, and after conferring

Government of Caloocan, in a blatant display of malice and

City Schools of Caloocan, was commanded to appear and show

with her counsel. Moreover, it was petitioner Abracia herself

bad faith, refused to comply with the decision. Now, it has the

cause why she should not be cited in contempt for delaying

who imposed the condition that respondent Santiago should

temerity to come to this Court once more and continue

the execution of judgment. This was in connection with her

withdraw her motion for contempt in exchange for her promise

inflicting injustice on a hapless citizen, as if all the harm and

failure (or refusal) to surrender the three motor vehicles

to surrender the subject vehicles. Thus, petitioner Abracias

prejudice it has already heaped upon respondent Santiago are

assigned to the Division of City Schools to the custody of the

claim that she was coerced into surrendering the vehicles had

still not enough.

sheriff. Petitioner Abracia, assisted by Mr. Ricardo Nagpacan of

no basis.

This Court will not condone the repudiation of just obligations

the Division of City Schools, appeared during the hearing but

Even assuming ex gratia argumenti that there indeed existed

contracted by municipal corporations. On the contrary, we will

Judge

in

Allarde,

payment

still,

considering

of the Citys

the

totality

obligation to

of

private

extend our aid and every judicial facility to any citizen in the

by which the Court of Appeals (CA) affirmed with modification

On November 10, 1998, the RTC denied the ATOs motion for a

enforcement of just and valid claims against abusive local

the decision rendered on February 21, 2001 by the Regional

preliminary hearing of the affirmative defense.

government units.

Trial Court, Branch 61 (RTC), in Baguio City in favor of the

WHEREFORE, the petition is hereby DISMISSED for utter lack of

respondents.2

merit. The assailed orders of the trial court dated October 1,

1992, October 8, 1992 and May 7, 1993, respectively, are

After

the

RTC

likewise

denied

the ATOs motion

for

reconsideration on December 10, 1998, the ATO commenced a

Antecedents

AFFIRMED.

special civil action for certiorari in the CA to assail the RTCs

orders. The CA dismissed the petition for certiorari, however,

Petitioners and their counsels are hereby warned against filing

Spouses David and Elisea Ramos (respondents) discovered that

upon its finding that the assailed orders were not tainted with

any more pleadings in connection with the issues already

a portion of their land registered under Transfer Certificate of

grave abuse of discretion.3

resolved with finality herein and in related cases.

Title No. T-58894 of the Baguio City land records with an area

Costs against petitioners.

of 985 square meters, more or less, was being used as part of

Subsequently, February 21, 2001, the RTC rendered its decision

SO ORDERED.

the runway and running shoulder of the Loakan Airport being

on the merits,4 disposing:

operated by petitioner Air Transportation Office (ATO). On

Republic of the Philippines

August 11, 1995, the respondents agreed after negotiations to

WHEREFORE, the

judgment

is

rendered

ORDERING

the

SUPREME COURT

convey the affected portion by deed of sale to the ATO in

defendant Air Transportation Office to pay the plaintiffs DAVID

Manila

consideration of the amount of P778,150.00. However, the ATO

and ELISEA RAMOS the following: (1) The amount of

failed to pay despite repeated verbal and written demands.

P778,150.00 being the value of the parcel of land appropriated

by the defendant ATO as embodied in the Deed of Sale, plus an

THIRD DIVISION
Thus, on April 29, 1998, the respondents filed an action for

annual interest of 12% from August 11, 1995, the date of the

AIR TRANSPORTATION OFFICE, Petitioner,

collection against the ATO and some of its officials in the RTC

Deed of Sale until fully paid; (2) The amount of P150,000.00 by

vs.

(docketed as Civil Case No. 4017-R and entitled Spouses David

way of moral damages and P150,000.00 as exemplary

SPOUSES DAVID* ELISEA RAMOS, Respondents.

and Elisea Ramos v. Air Transportation Office, Capt. Panfilo

damages; (3) the amount of P50,000.00 by way of attorneys

Villaruel, Gen. Carlos Tanega, and Mr. Cesar de Jesus).

fees plus P15,000.00 representing the 10, more or less, court

G.R. No. 159402

February 23, 2011

appearances of plaintiffs counsel; (4) The costs of this suit.

RESOLUTION
BERSAMIN, J.:

In their answer, the ATO and its co-defendants invoked as an

affirmative defense the issuance of Proclamation No. 1358,

SO ORDERED.

The States immunity from suit does not extend to the

whereby President Marcos had reserved certain parcels of land

petitioner because it is an agency of the State engaged in an

that included the respondents affected portion for use of the

In due course, the ATO appealed to the CA, which affirmed the

enterprise that is far from being the States exclusive

Loakan Airport. They asserted that the RTC had no jurisdiction

RTCs decision on May 14, 2003,5 viz:

prerogative.

to entertain the action without the States consent considering

Under challenge is the decision promulgated on May 14, 2003,1

that the deed of sale had been entered into in the

IN VIEW OF ALL THE FOREGOING, the appealed decision is

performance of governmental functions.

hereby AFFIRMED, with MODIFICATION that the awarded cost

therein is deleted, while that of moral and exemplary damages

is reduced to P30,000.00 each, and attorneys fees is lowered

bound to yield. Some doubts have been expressed as to the

our people to go to court, at the least provocation, the loss of

to P10,000.00.

source of the immunity of a sovereign power from suit without

time and energy required to defend against law suits, in the

its own permission, but the answer has been public property

absence of such a basic principle that constitutes such an

since before the days of Hobbes. Leviathan, chap. 26, 2. A

effective obstacle, could very well be imagined.

No cost.

sovereign is exempt from suit, not because of any formal

SO ORDERED.

conception or obsolete theory, but on the logical and practical

An unincorporated government agency without any separate

ground that there can be no legal right as against the authority

juridical personality of its own enjoys immunity from suit

that makes the law on which the right depends. "Car on peut

because it is invested with an inherent power of sovereignty.

bien recevoir loy d'autruy, mais il est impossible par nature de

Accordingly, a claim for damages against the agency cannot

se donner loy." Bodin, Republique, 1, chap. 8, ed. 1629, p.

prosper; otherwise, the doctrine of sovereign immunity is

132; Sir John Eliot, De Jure Maiestatis, chap. 3. Nemo suo

violated.11 However, the need to distinguish between an

The only issue presented for resolution is whether the ATO

statuto ligatur necessitative. Baldus, De Leg. et Const. Digna

unincorporated government agency performing governmental

could be sued without the States consent.

Vox, 2. ed. 1496, fol. 51b, ed. 1539, fol. 61.7

function and one performing proprietary functions has arisen.

Hence, this appeal by petition for review on certiorari.

Issue

The immunity has been upheld in favor of the former because

Ruling

The petition for review has no merit.

Practical considerations dictate the establishment of an

its function is governmental or incidental to such function;12 it

immunity from suit in favor of the State. Otherwise, and the

has not been upheld in favor of the latter whose function was

State is suable at the instance of every other individual,

not in pursuit of a necessary function of government but was

government service may be severely obstructed and public

essentially a business.13

The immunity of the State from suit, known also as the

safety endangered because of the number of suits that the

doctrine of sovereign immunity or non-suability of the State, is

State has to defend against.8 Several justifications have been

Should the doctrine of sovereignty immunity or non-suability of

expressly provided in Article XVI of the 1987 Constitution, viz:

offered to support the adoption of the doctrine in the

the State be extended to the ATO?

Philippines, but that offered in Providence Washington

Section 3. The State may not be sued without its consent.

The immunity from suit is based on the political truism that

Insurance Co. v. Republic of the Philippines9 is "the most

In its challenged decision,14 the CA answered in the negative,

acceptable explanation," according to Father Bernas, a

holding:

recognized commentator on Constitutional Law,10 to wit:

the State, as a sovereign, can do no wrong. Moreover, as the

eminent Justice Holmes said in Kawananakoa v. Polyblank:6

On the first assignment of error, appellants seek to impress

[A] continued adherence to the doctrine of non-suability is not

upon Us that the subject contract of sale partook of a

to be deplored for as against the inconvenience that may be

governmental character. Apropos, the lower court erred in

The territory [of Hawaii], of course, could waive its exemption

caused private parties, the loss of governmental efficiency and

applying

(Smith v. Reeves, 178 US 436, 44 L ed 1140, 20 Sup. Ct. Rep.

the obstacle to the performance of its multifarious functions

Corporation vs. Teodoro (91 Phil. 203 [1952]), arguing that in

919), and it took no objection to the proceedings in the cases

are far greater if such a fundamental principle were

Teodoro, the matter involved the collection of landing and

cited if it could have done so. xxx But in the case at bar it did

abandoned and the availability of judicial remedy were not

parking fees which is a proprietary function, while the case at

object, and the question raised is whether the plaintiffs were

thus restricted. With the well-known propensity on the part of

bar involves the maintenance and operation of aircraft and air

the

High

Courts

ruling

in

National

Airports

navigational facilities and services which are governmental

True, the law prevailing in 1952 when the Teodoro case was

other royalties, fees or rentals for the use of any of the

functions.

promulgated was Exec. Order 365 (Reorganizing the Civil

property under its management and control.

Aeronautics Administration and Abolishing the National Airports

We are not persuaded.

Corporation). Republic Act No. 776 (Civil Aeronautics Act of the

xxx

Philippines), subsequently enacted on June 20, 1952, did not

Contrary to appellants conclusions, it was not merely the

alter the character of the CAAs objectives under Exec. Order

From the foregoing, it can be seen that the CAA is tasked with

collection of landing and parking fees which was declared as

365. The pertinent provisions cited in the Teodoro case,

private or non-governmental functions which operate to

proprietary in nature by the High Court in Teodoro, but

particularly Secs. 3 and 4 of Exec. Order 365, which led the

remove it from the purview of the rule on State immunity from

management and maintenance of airport operations as a

Court to consider the CAA in the category of a private entity

suit. For the correct rule as set forth in the Teodoro case

whole, as well. Thus, in the much later case of Civil

were retained substantially in Republic Act 776, Sec. 32(24)

states:

Aeronautics Administration vs. Court of Appeals (167 SCRA 28

and (25). Said Act provides:

[1988]), the Supreme Court, reiterating the pronouncements

xxx

laid down in Teodoro, declared that the CAA (predecessor of

Sec. 32. Powers and Duties of the Administrator. Subject to

ATO) is an agency not immune from suit, it being engaged in

the general control and supervision of the Department Head,

Not all government entities, whether corporate or non-

functions pertaining to a private entity. It went on to explain

the Administrator shall have among others, the following

corporate, are immune from suits. Immunity from suits is

in this wise:

powers and duties:

determined by the character of the objects for which the

entity was organized. The rule is thus stated in Corpus Juris:

xxx

xxx
Suits against State agencies with relation to matters in which

The Civil Aeronautics Administration comes under the category

(24) To administer, operate, manage, control, maintain and

they have assumed to act in private or non-governmental

of a private entity. Although not a body corporate it was

develop the Manila International Airport and all government-

capacity, and various suits against certain corporations created

created, like the National Airports Corporation, not to

owned aerodromes except those controlled or operated by the

by the state for public purposes, but to engage in matters

maintain a necessary function of government, but to run what

Armed Forces of the Philippines including such powers and

partaking more of the nature of ordinary business rather than

is essentially a business, even if revenues be not its prime

duties as: (a) to plan, design, construct, equip, expand,

functions of a governmental or political character, are not

objective but rather the promotion of travel and the

improve, repair or alter aerodromes or such structures,

regarded as suits against the state. The latter is true, although

convenience of the travelling public. It is engaged in an

improvement or air navigation facilities; (b) to enter into,

the state may own stock or property of such a corporation for

enterprise which, far from being the exclusive prerogative of

make and execute contracts of any kind with any person, firm,

by engaging in business operations through a corporation, the

state, may, more than the construction of public roads, be

or public or private corporation or entity;

state divests itself so far of its sovereign character, and by

undertaken by private concerns. [National Airports Corp. v.

Teodoro, supra, p. 207.]

xxx

implication consents to suits against the corporation. (59 C.J.,

(25) To determine, fix, impose, collect and receive landing

313) [National Airports Corporation v. Teodoro, supra, pp. 206-

fees, parking space fees, royalties on sales or deliveries, direct

207; Italics supplied.]

or indirect, to any aircraft for its use of aviation gasoline, oil

and lubricants, spare parts, accessories and supplies, tools,

This doctrine has been reaffirmed in the recent case of Malong

v. Philippine National Railways [G.R. No. L-49930, August 7,

private contractor without the owners knowledge and consent

(CAAP), which thereby assumed all of the ATOs powers, duties

1985, 138 SCRA 63], where it was held that the Philippine

was reversed and the cases remanded for trial on the merits.

and rights, assets, real and personal properties, funds, and

National Railways, although owned and operated by the

The Supreme Court ruled that the doctrine of sovereign

revenues, viz:

government, was not immune from suit as it does not exercise

immunity was not an instrument for perpetrating any injustice

sovereign but purely proprietary and business functions.

on a citizen. In exercising the right of eminent domain, the

CHAPTER XII

Accordingly, as the CAA was created to undertake the

Court explained, the State exercised its jus imperii, as

TRANSITORTY PROVISIONS

management of airport operations which primarily involve

distinguished from its proprietary rights, or jus gestionis; yet,

proprietary functions, it cannot avail of the immunity from suit

even in that area, where private property had been taken in

Section 85. Abolition of the Air Transportation Office. The Air

accorded

expropriation without just compensation being paid, the

Transportation Office (ATO) created under Republic Act No.

defense of immunity from suit could not be set up by the State

776, a sectoral office of the Department of Transportation and

against an action for payment by the owners.

Communications (DOTC), is hereby abolished.1avvphi1

character of the ATO as an agency of the Government not

Lastly, the issue of whether or not the ATO could be sued

All powers, duties and rights vested by law and exercised by

performing a purely governmental or sovereign function, but

without the States consent has been rendered moot by the

the ATO is hereby transferred to the Authority.

was instead involved in the management and maintenance of

passage of Republic Act No. 9497, otherwise known as the Civil

the Loakan Airport, an activity that was not the exclusive

Aviation Authority Act of 2008.

to

government

agencies

performing

strictly

governmental functions.15

In our view, the CA thereby correctly appreciated the juridical

prerogative of the State in its sovereign capacity. Hence, the

ATO had no claim to the States immunity from suit. We uphold

All assets, real and personal properties, funds and revenues

owned by or vested in the different offices of the ATO are

R.A. No. 9497 abolished the ATO, to wit:

the CAs aforequoted holding.

transferred to the Authority. All contracts, records and

documents relating to the operations of the abolished agency

Section 4. Creation of the Authority. There is hereby created

and its offices and branches are likewise transferred to the

We further observe the doctrine of sovereign immunity cannot

an independent regulatory body with quasi-judicial and quasi-

Authority. Any real property owned by the national government

be

for

legislative powers and possessing corporate attributes to be

or government-owned corporation or authority which is being

just

known as the Civil Aviation Authority of the Philippines (CAAP),

used and utilized as office or facility by the ATO shall be

expropriation

herein after referred to as the "Authority" attached to the

transferred and titled in favor of the Authority.

successfully

invoked

compensation

arising

compensation

and

proceedings

being

to

defeat

valid

from

the

taking

without

the

proper

first

resorted

to

of

claim

without

the

plaintiffs

Department of Transportation and Communications (DOTC) for

property.16 Thus, in De los Santos v. Intermediate Appellate

the purpose of policy coordination. For this purpose, the

Section 23 of R.A. No. 9497 enumerates the corporate powers

Court,17 the trial courts dismissal based on the doctrine of

existing Air transportation Office created under the provisions

vested in the CAAP, including the power to sue and be sued, to

non-suability of the State of two cases (one of which was for

of Republic Act No. 776, as amended is hereby abolished.

enter into contracts of every class, kind and description, to

damages) filed by owners of property where a road 9 meters

wide and 128.70 meters long occupying a total area of 1,165

construct, acquire, own, hold, operate, maintain, administer

xxx

square meters and an artificial creek 23.20 meters wide and

and lease personal and real properties, and to settle, under

such terms and conditions most advantageous to it, any claim

128.69 meters long occupying an area of 2,906 square meters

Under its Transitory Provisions, R.A. No. 9497 established in

had been constructed by the provincial engineer of Rizal and a

place of the ATO the Civil Aviation Authority of the Philippines

by or against it.18

With the CAAP having legally succeeded the ATO pursuant to

collision occurred involving a passenger jeepney driven by

R.A. No. 9497, the obligations that the ATO had incurred by

This is a petition for certiorari with prayer for the issuance of

Bernardo Balagot and owned by the Estate of Macario

virtue of the deed of sale with the Ramos spouses might now

a writ of preliminary mandatory injunction seeking the

Nieveras, a gravel and sand truck driven by Jose Manandeg and

be enforced against the CAAP.

nullification or modification of the proceedings and the orders

owned by Tanquilino Velasquez and a dump truck of the

issued by the respondent Judge Romeo N. Firme, in his

Municipality of San Fernando, La Union and driven by Alfredo

WHEREFORE, the Court denies the petition for review on

capacity as the presiding judge of the Court of First Instance of

Bislig. Due to the impact, several passengers of the jeepney

certiorari, and affirms the decision promulgated by the Court

La Union, Second Judicial District, Branch IV, Bauang, La Union

including Laureano Bania Sr. died as a result of the injuries

of Appeals.

in Civil Case No. 107-BG, entitled "Juana Rimando Bania, et

they sustained and four (4) others suffered varying degrees of

al. vs. Macario Nieveras, et al." dated November 4, 1975; July

physical injuries.

No pronouncement on costs of suit.

13, 1976; August 23,1976; February 23, 1977; March 16, 1977;
July 26, 1979; September 7, 1979; November 7, 1979 and

On December 11, 1966, the private respondents instituted a

December 3, 1979 and the decision dated October 10, 1979

compliant for damages against the Estate of Macario Nieveras

ordering defendants Municipality of San Fernando, La Union

and Bernardo Balagot, owner and driver, respectively, of the

Republic of the Philippines

and Alfredo Bislig to pay, jointly and severally, the plaintiffs

passenger jeepney, which was docketed Civil Case No. 2183 in

SUPREME COURT

for funeral expenses, actual damages consisting of the loss of

the Court of First Instance of La Union, Branch I, San

Manila

earning capacity of the deceased, attorney's fees and costs of

Fernando, La Union. However, the aforesaid defendants filed a

suit and dismissing the complaint against the Estate of Macario

Third Party Complaint against the petitioner and the driver of

Nieveras and Bernardo Balagot.

a dump truck of petitioner.

The antecedent facts are as follows:

Thereafter, the case was subsequently transferred to Branch

SO ORDERED.

FIRST DIVISION

G.R. No. L-52179

April 8, 1991

IV, presided over by respondent judge and was subsequently

MUNICIPALITY OF SAN FERNANDO, LA UNION, petitioner

Petitioner Municipality of San Fernando, La Union is a

docketed as Civil Case No. 107-Bg. By virtue of a court order

vs.

municipal corporation existing under and in accordance with

dated May 7, 1975, the private respondents amended the

HON. JUDGE ROMEO N. FIRME, JUANA RIMANDO-BANIA,

the laws of the Republic of the Philippines. Respondent

complaint wherein the petitioner and its regular employee,

IAUREANO BANIA, JR., SOR MARIETA BANIA, MONTANO

Honorable Judge Romeo N. Firme is impleaded in his official

Alfredo Bislig were impleaded for the first time as defendants.

BANIA, ORJA BANIA, AND LYDIA R. BANIA, respondents.

capacity as the presiding judge of the Court of First Instance of

Petitioner filed its answer and raised affirmative defenses such

La Union, Branch IV, Bauang, La Union. While private

as lack of cause of action, non-suability of the State,

Mauro C. Cabading, Jr. for petitioner.

respondents Juana Rimando-Bania, Laureano Bania, Jr., Sor

prescription of cause of action and the negligence of the

Simeon G. Hipol for private respondent.

Marietta Bania, Montano Bania, Orja Bania and Lydia R.

owner and driver of the passenger jeepney as the proximate

Bania are heirs of the deceased Laureano Bania Sr. and

cause of the collision.

plaintiffs in Civil Case No. 107-Bg before the aforesaid court.

In the course of the proceedings, the respondent judge issued

MEDIALDEA, J.:
At about 7 o'clock in the morning of December 16, 1965, a

the following questioned orders, to wit:

Fernando, La Union and Alfredo Bislig are ordered to pay

(1)

Order dated November 4, 1975 dismissing the cross-claim

jointly and severally, plaintiffs Juana Rimando-Bania, Mrs.

On the other hand, private respondents controvert the position

Priscilla B. Surell, Laureano Bania Jr., Sor Marietta Bania,

of the petitioner and allege that the petition is devoid of

Mrs. Fe B. Soriano, Montano Bania, Orja Bania and Lydia B.

merit, utterly lacking the good faith which is indispensable in a

Order dated July 13, 1976 admitting the Amended Answer

Bania the sums of P1,500.00 as funeral expenses and

petition for certiorari and prohibition. (Rollo, p. 42.) In

of the Municipality of San Fernando, La Union and Bislig and

P24,744.24 as the lost expected earnings of the late Laureano

addition, the private respondents stress that petitioner has not

setting the hearing on the affirmative defenses only with

Bania Sr., P30,000.00 as moral damages, and P2,500.00 as

considered that every court, including respondent court, has

respect to the supposed lack of jurisdiction;

attorney's fees. Costs against said defendants.

the inherent power to amend and control its process and

against Bernardo Balagot;

(2)

orders so as to make them conformable to law and justice.

(3)

Order dated August 23, 1976 deferring there resolution of

the grounds for the Motion to Dismiss until the trial;

The Complaint is dismissed as to defendants Estate of Macario

(Rollo, p. 43.)

Nieveras and Bernardo Balagot.

The controversy boils down to the main issue of whether or not

(4)

Order dated February 23, 1977 denying the motion for

SO ORDERED. (Rollo, p. 30)

the respondent court committed grave abuse of discretion

reconsideration of the order of July 13, 1976 filed by the

Municipality and Bislig for having been filed out of time;

(5)

Order dated March 16, 1977 reiterating the denial of the

motion for reconsideration of the order of July 13, 1976;

(6)

Order dated July 26, 1979 declaring the case deemed

when it deferred and failed to resolve the defense of nonPetitioner filed a motion for reconsideration and for a new

suability of the State amounting to lack of jurisdiction in a

trial without prejudice to another motion which was then

motion to dismiss.

pending. However, respondent judge issued another order

dated

for

In the case at bar, the respondent judge deferred the

reconsideration of the order of September 7, 1979 for having

November

7,

1979

denying

the

motion

resolution of the defense of non-suability of the State

been filed out of time.

amounting to lack of jurisdiction until trial. However, said

submitted for decision it appearing that parties have not yet

respondent judge failed to resolve such defense, proceeded

submitted their respective memoranda despite the court's

Finally, the respondent judge issued an order dated December

with the trial and thereafter rendered a decision against the

direction; and

3, 1979 providing that if defendants municipality and Bislig

municipality and its driver.

further wish to pursue the matter disposed of in the order of

(7)

Order dated September 7, 1979 denying the petitioner's

motion for reconsideration and/or order to recall prosecution

July 26, 1979, such should be elevated to a higher court in

The respondent judge did not commit grave abuse of

accordance with the Rules of Court. Hence, this petition.

discretion when in the exercise of its judgment it arbitrarily

witnesses for cross examination.

failed to resolve the vital issue of non-suability of the State in

Petitioner maintains that the respondent judge committed

the guise of the municipality. However, said judge acted in

On October 10, 1979 the trial court rendered a decision, the

grave abuse of discretion amounting to excess of jurisdiction in

excess of his jurisdiction when in his decision dated October

dispositive portion is hereunder quoted as follows:

issuing the aforesaid orders and in rendering a decision.

10, 1979 he held the municipality liable for the quasi-delict

Furthermore, petitioner asserts that while appeal of the

committed by its regular employee.

IN VIEW OF ALL OF (sic) THE FOREGOING, judgment is hereby

decision maybe available, the same is not the speedy and

rendered for the plaintiffs, and defendants Municipality of San

adequate remedy in the ordinary course of law.

The doctrine of non-suability of the State is expressly provided

for in Article XVI, Section 3 of the Constitution, to wit: "the

mean that it is liable; on the other hand, it can never be held

corporate or individual capacity, and not for the state or

State may not be sued without its consent."

liable if it does not first consent to be sued. Liability is not

sovereign power." (112 N.E., 994-995) (Ibid, pp. 605-606.)

conceded by the mere fact that the state has allowed itself to
Stated in simple parlance, the general rule is that the State

be sued. When the state does waive its sovereign immunity, it

It has already been remarked that municipal corporations are

may not be sued except when it gives consent to be sued.

is only giving the plaintiff the chance to prove, if it can, that

suable because their charters grant them the competence to

Consent takes the form of express or implied consent.

the defendant is liable." (United States of America vs. Guinto,

sue and be sued. Nevertheless, they are generally not liable

supra, p. 659-660)

for torts committed by them in the discharge of governmental

Express consent may be embodied in a general law or a special

functions and can be held answerable only if it can be shown

law. The standing consent of the State to be sued in case of

Anent the issue of whether or not the municipality is liable for

that they were acting in a proprietary capacity. In permitting

money claims involving liability arising from contracts is found

the torts committed by its employee, the test of liability of

such entities to be sued, the State merely gives the claimant

in Act No. 3083. A special law may be passed to enable a

the municipality depends on whether or not the driver, acting

the right to show that the defendant was not acting in its

person to sue the government for an alleged quasi-delict, as in

in behalf of the municipality, is performing governmental or

governmental capacity when the injury was committed or that

Merritt v. Government of the Philippine Islands (34 Phil 311).

proprietary functions. As emphasized in the case of Torio vs.

the case comes under the exceptions recognized by law.

(see United States of America v. Guinto, G.R. No. 76607,

Fontanilla (G. R. No. L-29993, October 23, 1978. 85 SCRA 599,

Failing this, the claimant cannot recover. (Cruz, supra, p. 44.)

February 26, 1990, 182 SCRA 644, 654.)

606), the distinction of powers becomes important for

Consent is implied when the government enters into business

purposes of determining the liability of the municipality for

In the case at bar, the driver of the dump truck of the

the acts of its agents which result in an injury to third persons.

municipality insists that "he was on his way to the Naguilian

contracts, thereby descending to the level of the other

river to get a load of sand and gravel for the repair of San

contracting party, and also when the State files a complaint,

Another statement of the test is given in City of Kokomo vs.

thus opening itself to a counterclaim. (Ibid)

Loy, decided by the Supreme Court of Indiana in 1916, thus:

Fernando's municipal streets." (Rollo, p. 29.)

In the absence of any evidence to the contrary, the regularity

Municipal corporations, for example, like provinces and cities,

Municipal corporations exist in a dual capacity, and their

of the performance of official duty is presumed pursuant to

are agencies of the State when they are engaged in

functions are twofold. In one they exercise the right springing

Section 3(m) of Rule 131 of the Revised Rules of Court. Hence,

governmental functions and therefore should enjoy the

from sovereignty, and while in the performance of the duties

We rule that the driver of the dump truck was performing

sovereign immunity from suit. Nevertheless, they are subject

pertaining thereto, their acts are political and governmental.

duties or tasks pertaining to his office.

to suit even in the performance of such functions because

Their officers and agents in such capacity, though elected or

their charter provided that they can sue and be sued. (Cruz,

appointed by them, are nevertheless public functionaries

We already stressed in the case of Palafox, et. al. vs. Province

Philippine Political Law, 1987 Edition, p. 39)

performing a public service, and as such they are officers,

of Ilocos Norte, the District Engineer, and the Provincial

agents, and servants of the state. In the other capacity the

Treasurer

A distinction should first be made between suability and

municipalities exercise a private, proprietary or corporate

maintenance of roads in which the truck and the driver worked

liability. "Suability depends on the consent of the state to be

right, arising from their existence as legal persons and not as

at the time of the accident are admittedly governmental

sued, liability on the applicable law and the established facts.

public agencies. Their officers and agents in the performance

activities."

The circumstance that a state is suable does not necessarily

of such functions act in behalf of the municipalities in their

(102

Phil

1186)

that

"the

construction

or

After a careful examination of existing laws and jurisprudence,

We arrive at the conclusion that the municipality cannot be

After this decision became final and executory, private

Defante & Elegado for petitioner.

respondent moved for the issuance of a writ of execution. This

held liable for the torts committed by its regular employee,

motion was granted by respondent RTC judge. After issuance

who was then engaged in the discharge of governmental

Roberto B. Lugue for private respondent Admiral Finance

of the writ of execution, a Notice of Garnishment dated

functions. Hence, the death of the passenger tragic and

Creditors' Consortium, Inc.

January 14, 1988 was served by respondent sheriff Silvino R.

deplorable though it may be imposed on the municipality no

Pastrana upon the manager of the PNB Buendia Branch.

duty to pay monetary compensation.

RESOLUTION

All premises considered, the Court is convinced that the

CORTS, J.:

However, respondent sheriff was informed that a "hold code"

was placed on the account of petitioner. As a result of this,
private respondent filed a motion dated January 27, 1988

respondent judge's dereliction in failing to resolve the issue of

praying that an order be issued directing the bank to deliver to

non-suability did not amount to grave abuse of discretion. But

The present petition for review is an off-shoot of expropriation

respondent sheriff the amount equivalent to the unpaid

said judge exceeded his jurisdiction when it ruled on the issue

proceedings initiated by petitioner Municipality of Makati

balance due under the RTC decision dated June 4, 1987.

of liability.

against

private

respondent

Admiral

Finance

Creditors

Consortium, Inc., Home Building System & Realty Corporation

Petitioner filed a motion to lift the garnishment, on the ground

ACCORDINGLY, the petition is GRANTED and the decision of the

and one Arceli P. Jo, involving a parcel of land and

that the manner of payment of the expropriation amount

respondent court is hereby modified, absolving the petitioner

improvements thereon located at Mayapis St., San Antonio

should be done in installments which the respondent RTC

municipality of any liability in favor of private respondents.

Village, Makati and registered in the name of Arceli P. Jo under

judge failed to state in his decision. Private respondent filed

TCT No. S-5499.

its opposition to the motion.

It appears that the action for eminent domain was filed on May

Pending resolution of the above motions, petitioner filed on

Republic of the Philippines

20, 1986, docketed as Civil Case No. 13699. Attached to

July 20, 1988 a "Manifestation" informing the court that private

SUPREME COURT

petitioner's complaint was a certification that a bank account

respondent was no longer the true and lawful owner of the

Manila

(Account No. S/A 265-537154-3) had been opened with the PNB

subject property because a new title over the property had

Buendia Branch under petitioner's name containing the sum of

been registered in the name of Philippine Savings Bank, Inc.

THIRD DIVISION

P417,510.00, made pursuant to the provisions of Pres. Decree

(PSB) Respondent RTC judge issued an order requiring PSB to

G.R. Nos. 89898-99 October 1, 1990

No. 42. After due hearing where the parties presented their

make available the documents pertaining to its transactions

MUNICIPALITY OF MAKATI, petitioner,

respective appraisal reports regarding the value of the

over the subject property, and the PNB Buendia Branch to

vs.

property, respondent RTC judge rendered a decision on June 4,

reveal the amount in petitioner's account which was garnished

THE HONORABLE COURT OF APPEALS, HON. SALVADOR P. DE

1987,

at

by respondent sheriff. In compliance with this order, PSB filed

GUZMAN, JR., as Judge RTC of Makati, Branch CXLII ADMIRAL

P5,291,666.00, and ordering petitioner to pay this amount

a manifestation informing the court that it had consolidated its

FINANCE

minus the advanced payment of P338,160.00 which was earlier

ownership over the property as mortgagee/purchaser at an

released to private respondent.

extrajudicial foreclosure sale held on April 20, 1987. After

SO ORDERED.

CREDITORS

CONSORTIUM,

SILVINO R. PASTRANA, respondents.

INC.,

and

SHERIFF

fixing

the

appraised

value

of

the

property

several conferences, PSB and private respondent entered into

a compromise agreement whereby they agreed to divide

Respondent trial judge issued an order dated December 21,

Petitioner not only reiterates the arguments adduced in its

between

1988 denying petitioner's motion for reconsideration on the

petition before the Court of Appeals, but also alleges for the

ground that the doctrine enunciated in Republic v. Palacio did

first time that it has actually two accounts with the PNB

not apply to the case because petitioner's PNB Account No. S/A

Buendia Branch, to wit:

themselves

the

compensation

due

from

the

expropriation proceedings.

Respondent trial judge subsequently issued an order dated

265-537154-3 was an account specifically opened for the

September 8, 1988 which: (1) approved the compromise

expropriation proceedings of the subject property pursuant to

agreement; (2) ordered PNB Buendia Branch to immediately

Pres. Decree No. 42. Respondent RTC judge likewise declared

release to PSB the sum of P4,953,506.45 which corresponds to

Mr. Antonio Bautista guilty of contempt of court for his

(1)

the balance of the appraised value of the subject property

inexcusable refusal to obey the order dated September 8,

expropriation of the subject property, with an outstanding

under the RTC decision dated June 4, 1987, from the garnished

1988, and thus ordered his arrest and detention until his

balance of P99,743.94.

account of petitioner; and, (3) ordered PSB and private

compliance with the said order.

respondent to execute the necessary deed of conveyance over

xxx xxx xxx

(2)

Account No. S/A 265-537154-3 exclusively for the

Account No. S/A 263-530850-7 for statutory obligations

the subject property in favor of petitioner. Petitioner's motion

Petitioner and the bank manager of PNB Buendia Branch then

and other purposes of the municipal government, with a

to lift the garnishment was denied.

filed separate petitions for certiorari with the Court of

balance of P170,098,421.72, as of July 12, 1989.

Appeals, which were eventually consolidated. In a decision

Petitioner filed a motion for reconsideration, which was duly

promulgated on June 28, 1989, the Court of Appeals dismissed

opposed by private respondent. On the other hand, for failure

both petitions for lack of merit, sustained the jurisdiction of

of the manager of the PNB Buendia Branch to comply with the

respondent RTC judge over the funds contained in petitioner's

order dated September 8, 1988, private respondent filed two

PNB Account No. 265-537154-3, and affirmed his authority to

succeeding motions to require the bank manager to show

levy on such funds.

cause why he should not be held in contempt of court. During

xxx xxx xxx

[Petition, pp. 6-7; Rollo, pp. 11-12.]

Because the petitioner has belatedly alleged only in this Court

the existence of two bank accounts, it may fairly be asked

the hearings conducted for the above motions, the general

Its motion for reconsideration having been denied by the Court

whether the second account was opened only for the purpose

manager of the PNB Buendia Branch, a Mr. Antonio Bautista,

of Appeals, petitioner now files the present petition for review

of undermining the legal basis of the assailed orders of

informed the court that he was still waiting for proper

with prayer for preliminary injunction.

respondent RTC judge and the decision of the Court of

authorization from the PNB head office enabling him to make a

Appeals, and strengthening its reliance on the doctrine that

disbursement for the amount so ordered. For its part,

On November 20, 1989, the Court resolved to issue a

public funds are exempted from garnishment or execution as

petitioner contended that its funds at the PNB Buendia Branch

temporary restraining order enjoining respondent RTC judge,

enunciated in Republic v. Palacio [supra.] At any rate, the

could neither be garnished nor levied upon execution, for to

respondent sheriff, and their representatives, from enforcing

Court will give petitioner the benefit of the doubt, and

do so would result in the disbursement of public funds without

and/or carrying out the RTC order dated December 21, 1988

proceed to resolve the principal issues presented based on the

the proper appropriation required under the law, citing the

and the writ of garnishment issued pursuant thereto. Private

factual circumstances thus alleged by petitioner.

case of Republic of the Philippines v. Palacio [G.R. No. L-

respondent then filed its comment to the petition, while

20322, May 29, 1968, 23 SCRA 899].

petitioner filed its reply.

Admitting that its PNB Account No. S/A 265-537154-3 was

specifically opened for expropriation proceedings it had

initiated over the subject property, petitioner poses no

to the balance due under the RTC decision dated June 4, 1987,

from its taking. Without prompt payment, compensation

objection to the garnishment or the levy under execution of

less the sum of P99,743.94 deposited in Account No. S/A 265-

cannot be considered "just" for the property owner is made to

the funds deposited therein amounting to P99,743.94.

537154-3, no levy under execution may be validly effected on

suffer the consequence of being immediately deprived of his

However, it is petitioner's main contention that inasmuch as

the public funds of petitioner deposited in Account No. S/A

land while being made to wait for a decade or more before

the assailed orders of respondent RTC judge involved the net

263-530850-7.

actually receiving the amount necessary to cope with his loss

amount of P4,965,506.45, the funds garnished by respondent

[Cosculluela v. The Honorable Court of Appeals, G.R. No.

sheriff in excess of P99,743.94, which are public funds

Nevertheless, this is not to say that private respondent and

77765, August 15, 1988, 164 SCRA 393, 400. See also Provincial

earmarked for the municipal government's other statutory

PSB are left with no legal recourse. Where a municipality fails

Government of Sorsogon v. Vda. de Villaroya, G.R. No. 64037,

obligations, are exempted from execution without the proper

or refuses, without justifiable reason, to effect payment of a

August 27, 1987, 153 SCRA 291].

appropriation required under the law.

final money judgment rendered against it, the claimant may

avail of the remedy of mandamus in order to compel the

The State's power of eminent domain should be exercised

There is merit in this contention. The funds deposited in the

enactment and approval of the necessary appropriation

within the bounds of fair play and justice. In the case at bar,

second PNB Account No. S/A 263-530850-7 are public funds of

ordinance, and the corresponding disbursement of municipal

considering that valuable property has been taken, the

the municipal government. In this jurisdiction, well-settled is

funds therefor [See Viuda De Tan Toco v. The Municipal Council

compensation to be paid fixed and the municipality is in full

the rule that public funds are not subject to levy and

of Iloilo, supra; Baldivia v. Lota, 107 Phil. 1099 (1960);

possession and utilizing the property for public purpose, for

execution, unless otherwise provided for by statute [Republic

Yuviengco v. Gonzales, 108 Phil. 247 (1960)].

three (3) years, the Court finds that the municipality has had

v. Palacio, supra.; The Commissioner of Public Highways v. San

more than reasonable time to pay full compensation.

Diego, G.R. No. L-30098, February 18, 1970, 31 SCRA 616].

In the case at bar, the validity of the RTC decision dated June

More particularly, the properties of a municipality, whether

4, 1987 is not disputed by petitioner. No appeal was taken

WHEREFORE,

real or personal, which are necessary for public use cannot be

therefrom. For three years now, petitioner has enjoyed

Municipality of Makati to immediately pay Philippine Savings

attached and sold at execution sale to satisfy a money

possession and use of the subject property notwithstanding its

Bank,

judgment against the municipality. Municipal revenues derived

inexcusable failure to comply with its legal obligation to pay

P4,953,506.45. Petitioner is hereby required to submit to this

from taxes, licenses and market fees, and which are intended

just compensation. Petitioner has benefited from its possession

Court a report of its compliance with the foregoing order

primarily and exclusively for the purpose of financing the

of the property since the same has been the site of Makati

within a non-extendible period of SIXTY (60) DAYS from the

governmental activities and functions of the municipality, are

West High School since the school year 1986-1987. This Court

date of receipt of this resolution.

exempt from execution [See Viuda De Tan Toco v. The

will not condone petitioner's blatant refusal to settle its legal

Municipal Council of Iloilo, 49 Phil. 52 (1926): The Municipality

obligation arising from expropriation proceedings it had in fact

The order of respondent RTC judge dated December 21, 1988,

of Paoay, Ilocos Norte v. Manaois, 86 Phil. 629 (1950);

initiated. It cannot be over-emphasized that, within the

which was rendered in Civil Case No. 13699, is SET ASIDE and

Municipality of San Miguel, Bulacan v. Fernandez, G.R. No.

context of the State's inherent power of eminent domain,

the temporary restraining order issued by the Court on

61744, June 25, 1984, 130 SCRA 56]. The foregoing rule finds
. . . [j]ust compensation means not only the correct

municipal

ordinance

determination of the amount to be paid to the owner of the

appropriating from its public funds an amount corresponding

land but also the payment of the land within a reasonable time

of

Makati

has

passed

an

and

Court

private

Resolved

to

respondent

November 20, 1989 is MADE PERMANENT.

application in the case at bar. Absent a showing that the

council

Inc.

the

SO ORDERED.

ORDER

the

petitioner

amount

of

On October 3, 1975, the private respondents were advised that

Republic of the Philippines

their employment had been converted from permanent full-

On the basis of these antecedent facts, the private respondent

SUPREME COURT

time to permanent part-time, effective October 18, 1975. 6

filed in the Court of First Instance of Olongapo City a for

Manila

Their reaction was to protest this conversion and to institute

damages against the herein petitioners on November 8, 1976.

grievance proceedings conformably to the pertinent rules and

8 The plaintiffs claimed that the letters contained libelous

regulations of the U.S. Department of Defense. The result was

imputations that had exposed them to ridicule and caused

a recommendation from the hearing officer who conducted the

them mental anguish and that the prejudgment of the

DALE SANDERS, AND A.S. MOREAU, JR, petitioners,

proceedings for the reinstatement of the private respondents

grievance proceedings was an invasion of their personal and

vs.

to permanent full-time status plus backwages. The report on

proprietary rights.

HON. REGINO T. VERIDIANO II, as Presiding Judge, Branch I,

the hearing contained the observation that "Special Services

Court of First Instance of Zambales, Olongapo City,

management practices an autocratic form of supervision." 7

FIRST DIVISION
G.R. No. L-46930

June 10, 1988

ANTHONY M. ROSSI and RALPH L. WYERS, respondents.

The private respondents made it clear that the petitioners

were being sued in their private or personal capacity. However,

In a letter addressed to petitioner Moreau on May 17, 1976

in a motion to dismiss filed under a special appearance, the

(Annex "A" of the complaint), Sanders disagreed with the

petitioners

hearing officer's report and asked for the rejection of the

performed by them in the discharge of their official duties and

The basic issue to be resolved in this case is whether or not

abovestated recommendation. The letter contained the

that, consequently, the court had no jurisdiction over them

the petitioners were performing their official duties when they

statements that: a ) "Mr. Rossi tends to alienate most co-

under the doctrine of state immunity.

did the acts for which they have been sued for damages by the

workers and supervisors;" b) "Messrs. Rossi and Wyers have

private respondents. Once this question is decided, the other

proven, according to their immediate supervisors, to be

After extensive written arguments between the parties, the

answers will fall into place and this petition need not detain us

difficult employees to supervise;" and c) "even though the

motion was denied in an order dated March 8, 1977, 9 on the

any longer than it already has.

grievants were under oath not to discuss the case with anyone,

main ground that the petitioners had not presented any

(they) placed the records in public places where others not

evidence that their acts were official in nature and not

involved in the case could hear."

personal torts, moreover, the allegation in the complaint was

CRUZ, J.:

Petitioner Sanders was, at the time the incident in question

occurred, the special services director of the U.S. Naval

argued

that

the

acts

complained

of

were

that the defendants had acted maliciously and in bad faith.

Station (NAVSTA) in Olongapo City. 1 Petitioner Moreau was the

On November 7, 1975, before the start of the grievance

The same order issued a writ of preliminary attachment,

commanding officer of the Subic Naval Base, which includes

hearings, a-letter (Annex "B" of the complaint) purportedly

conditioned upon the filing of a P10,000.00 bond by the

the said station. 2 Private respondent Rossi is an American

corning from petitioner Moreau as the commanding general of

plaintiffs, against the properties of petitioner Moreau, who

citizen with permanent residence in the Philippines, 3 as so

the U.S. Naval Station in Subic Bay was sent to the Chief of

allegedly

was private respondent Wyer, who died two years ago. 4 They

Naval Personnel explaining the change of the private

Subsequently, to make matters worse for the defendants,

were both employed as gameroom attendants in the special

respondent's employment status and requesting concurrence

petitioner Moreau was declared in a default by the trial court

services department of the NAVSTA, the former having been

therewith. The letter did not carry his signature but was

in its order dated August 9, 1977. The motion to lift the

hired in 1971 and the latter in 1969. 5

signed by W.B. Moore, Jr. "by direction," presumably of

default order on the ground that Moreau's failure to appear at

Moreau.

the

was

pre-trial

then

about

conference

to

was

leave

the

the

result

Philippines.

of

some

misunderstanding, and the motion for reconsideration of the

parties. The petitioners have objected, arguing that no such

it redundant to prolong the other case proceedings after it had

denial of the motion to dismiss, which was filed by the

evidence

of

become clear that the suit could not prosper because the acts

petitioner's new lawyers, were denied by the respondent court

jurisdictional immunity. Pending resolution of this question, we

complained of were covered by the doctrine of state immunity.

on September 7, 1977.

issued a temporary restraining order on September 26, 1977,

This petition for certiorari, prohibition and preliminary

was

needed

to

substantiate

their

claim

that has since then suspended the proceedings in this case in

It is abundantly clear in the present case that the acts for

the court a quo.

which the petitioners are being called to account were

injunction was thereafter filed before this Court, on the

performed by them in the discharge of their official duties.

contention that the above-narrated acts of the respondent

In past cases, this Court has held that where the character of

Sanders, as director of the special services department of

court are tainted with grave abuse of discretion amounting to

the act complained of can be determined from the pleadings

NAVSTA, undoubtedly had supervision over its personnel,

lack of jurisdiction.

exchanged between the parties before the trial, it is not

including the private respondents, and had a hand in their

necessary for the court to require them to belabor the point at

employment, work assignments, discipline, dismissal and other

We return now to the basic question of whether the petitioners

a trial still to be conducted. Such a proceeding would be

related matters. It is not disputed that the letter he had

were acting officially or only in their private capacities when

superfluous, not to say unfair to the defendant who is

written was in fact a reply to a request from his superior, the

they did the acts for which the private respondents have sued

subjected to unnecessary and avoidable inconvenience.

other petitioner, for more information regarding the case of

them for damages.

the private respondents. 14 Moreover, even in the absence of

Thus, in Baer v. Tizon, 10 we held that a motion to dismiss a

such request, he still was within his rights in reacting to the

It is stressed at the outset that the mere allegation that a

complaint against the commanding general of the Olongapo

hearing officer's criticismin effect a direct attack against him

government functionary is being sued in his personal capacity

Naval Base should not have been denied because it had been

-that Special Services was practicing "an autocratic form of

will not automatically remove him from the protection of the

sufficiently shown that the act for which he was being sued

supervision."

law of public officers and, if appropriate, the doctrine of state

was done in his official capacity on behalf of the American

immunity. By the same token, the mere invocation of official

government. The United States had not given its consent to be

As for Moreau,what he is claimed to have done was write the

character will not suffice to insulate him from suability and

sued. It was the reverse situation in Syquia v. Almeda Lopez,"

Chief of Naval Personnel for concurrence with the conversion

liability for an act imputed to him as a personal tort

where we sustained the order of the lower court granting a

of the private respondents' type of employment even before

committed without or in excess of his authority. These well-

where we motion to dismiss a complaint against certain

the grievance proceedings had even commenced. Disregarding

settled principles are applicable not only to the officers of the

officers of the U.S. armed forces also shown to be acting

for the nonce the question of its timeliness, this act is clearly

local state but also where the person sued in its courts

officially in the name of the American government. The United

official in nature, performed by Moreau as the immediate

pertains to the government of a foreign state, as in the

States had also not waived its immunity from suit. Only three

superior of Sanders and directly answerable to Naval Personnel

present case.

years ago, in United States of America v. Ruiz, 12 we set aside

in matters involving the special services department of NAVSTA

the denial by the lower court of a motion to dismiss a

In fact, the letter dealt with the financial and budgetary

The respondent judge, apparently finding that the complained

complaint for damages filed against the United States and

problems of the department and contained recommendations

acts were prima facie personal and tortious, decided to

several of its officials, it appearing that the act complained of

for their solution, including the re-designation of the private

proceed to trial to determine inter alia their precise character

was governmental rather than proprietary, and certainly not

respondents. There was nothing personal or private about it.

on the strength of the evidence to be submitted by the

personal. In these and several other cases 13 the Court found

Given the official character of the above-described letters, we

charters that the Philippines "adopts the generally accepted

have to conclude that the petitioners were, legally speaking,

principles of international law as part of the law of the land.

being sued as officers of the United States government. As

The case at bar, to repeat, comes under the rule and not under
any of the recognized exceptions. The government of the

they have acted on behalf of that government, and within the

All this is not to say that in no case may a public officer be

United States has not given its consent to be sued for the

scope of their authority, it is that government, and not the

sued as such without the previous consent of the state. To be

official acts of the petitioners, who cannot satisfy any

petitioners personally, that is responsible for their acts.

sure, there are a number of well-recognized exceptions. It is

judgment that may be rendered against them. As it is the

Assuming that the trial can proceed and it is proved that the

clear that a public officer may be sued as such to compel him

American government itself that will have to perform the

claimants have a right to the payment of damages, such award

to do an act required by law, as where, say, a register of deeds

affirmative act of appropriating the amount that may be

will have to be satisfied not by the petitioners in their

refuses to record a deed of sale; 18 or to restrain a Cabinet

adjudged for the private respondents, the complaint must be

personal capacities but by the United States government as

member, for example, from enforcing a law claimed to be

dismissed for lack of jurisdiction.

their principal. This will require that government to perform

unconstitutional; 19 or to compel the national treasurer to pay

an affirmative act to satisfy the judgment, viz, the

damages from an already appropriated assurance fund; 20 or

The Court finds that, even under the law of public officers, the

appropriation of the necessary amount to cover the damages

the commissioner of internal revenue to refund tax over-

acts of the petitioners are protected by the presumption of

awarded, thus making the action a suit against that

payments from a fund already available for the purpose; 21 or,

good faith, which has not been overturned by the private

government without its consent.

in general, to secure a judgment that the officer impleaded

respondents. Even mistakes concededly committed by such

may satisfy by himself without the government itself having to

public officers are not actionable as long as it is not shown

There should be no question by now that such complaint

do a positive act to assist him. We have also held that where

that they were motivated by malice or gross negligence

cannot prosper unless the government sought to be held

the government itself has violated its own laws, the aggrieved

amounting to bad faith. 24 This, to, is well settled . 25

ultimately liable has given its consent to' be sued. So we have

party may directly implead the government even without first

Furthermore, applying now our own penal laws, the letters

ruled not only in Baer but in many other decisions where we

filing his claim with the Commission on Audit as normally

come under the concept of privileged communications and are

upheld the doctrine of state immunity as applicable not only

required, as the doctrine of state immunity "cannot be used as

not punishable, 26 let alone the fact that the resented

to our own government but also to foreign states sought to be

an instrument for perpetrating an injustice." 22

remarks are not defamatory by our standards. It seems the

subjected to the jurisdiction of our courts. 15

private respondents have overstated their case.

This case must also be distinguished from such decisions as

The practical justification for the doctrine, as Holmes put it, is

Festejo v. Fernando, 23 where the Court held that a bureau

A final consideration is that since the questioned acts were

that "there can be no legal right against the authority which

director could be sued for damages on a personal tort

done in the Olongapo Naval Base by the petitioners in the

makes the law on which the right depends. 16 In the case of

committed by him when he acted without or in excess of

performance

foreign states, the rule is derived from the principle of the

authority in forcibly taking private property without paying

respondents are themselves American citizens, it would seem

sovereign equality of states which wisely admonishes that par

just compensation therefor although he did convert it into a

only proper for the courts of this country to refrain from taking

in parem non habet imperium and that a contrary attitude

public irrigation canal. It was not necessary to secure the

cognizance of this matter and to treat it as coming under the

would "unduly vex the peace of nations." 17 Our adherence to

previous consent of the state, nor could it be validly

internal administration of the said base.

this precept is formally expressed in Article II, Section 2, of

impleaded as a party defendant, as it was not responsible for

our Constitution, where we reiterate from our previous

the defendant's unauthorized act.

of

their

official

duties

and

the

private

The petitioners' counsel have submitted a memorandum

replete with citations of American cases, as if they were

September 26,1977, is made PERMANENT. No costs.

arguing before a court of the United States. The Court is

bemused by such attitude. While these decisions do have

1988, dismissing the complaint for damages of herein

petitioners against the Republic of the Philippines in Civil Case

SO ORDERED.

No. 88-43351.

support our own jurisprudence, which we have developed and

Republic of the Philippines

Petitioner, the Republic of the Philippines, through a similar

enriched on the basis of our own persuasions as a people,

SUPREME COURT

remedy, docketed as G.R. No. 84607, seeks to set aside the

particularly since we became independent in 1946.

Manila

Order of respondent Judge dated May 31, 1988, in Civil Case

persuasive effect upon us, they can at best be invoked only to

EN BANC

No. 88-43351 entitled "Erlinda Caylao, et al. vs. Republic of

We appreciate the assistance foreign decisions offer us, and

G.R. No. 84607 March 19, 1993

the Philippines, et al."

not only from the United States but also from Spain and other

REPUBLIC OF THE PHILIPPINES vs. SANDOVAL

countries from which we have derived some if not most of our

own laws. But we should not place undue and fawning reliance

The pertinent portion of the questioned Order 2 dated May 31,

The Solicitor General for the Republic of the Philippines.

1988, reads as follows:

without which we cannot come to our own decisions through

Structural Alternative Legal Assistance for Grassroots for

With respect however to the other defendants, the impleaded

the employment of our own endowments We live in a different

petitioners in 84645 & private respondents in 84607.

Military Officers, since they are being charged in their personal

ambience and must decide our own problems in the light of

CAMPOS, JR., J.:

and official capacity, and holding them liable, if at all, would

upon them and regard them as indispensable mental crutches

our own interests and needs, and of our qualities and even

not result in financial responsibility of the government, the

idiosyncrasies as a people, and always with our own concept of

People may have already forgotten the tragedy that transpired

principle of immunity from suit can not conveniently and

law and justice.

on January 22, 1987. It is quite ironic that then, some

correspondingly be applied to them.

journalists called it a Black Thursday, as a grim reminder to

The private respondents must, if they are still sominded,

the nation of the misfortune that befell twelve (12) rallyists.

WHEREFORE, the case as against the defendant Republic of the

pursue their claim against the petitioners in accordance with

But for most Filipinos now, the Mendiola massacre may now

Philippines is hereby dismissed. As against the rest of the

the laws of the United States, of which they are all citizens

just as well be a chapter in our history books. For those

defendants the motion to dismiss is denied. They are given a

and under whose jurisdiction the alleged offenses were

however, who have become widows and orphans, certainly

period of ten (10) days from receipt of this order within which

committed. Even assuming that our own laws are applicable,

they would not settle for just that. They seek retribution for

to file their respective pleadings.

the United States government has not decided to give its

the lives taken that will never be brought back to life again.

consent to be sued in our courts, which therefore has not

acquired the competence to act on the said claim,.

On the other hand, the Order 3, dated August 8, 1988, denied

Hence, the heirs of the deceased, together with those injured

the motions filed by both parties, for a reconsideration of the

(Caylao group), instituted this petition, docketed as G.R. No.

abovecited Order, respondent Judge finding no cogent reason

WHEREFORE, the petition is GRANTED. The challenged orders

84645, under Section 1 of Rule 65 of the Rules of Court,

to disturb the said order.

dated March 8,1977, August 9,1977, and September 7, 1977,

seeking the reversal and setting aside of the Orders of

are SET ASIDE. The respondent court is directed to DISMISS

respondent Judge Sandoval, 1 dated May 31 and August 8,

Civil Case No. 2077-O. Our Temporary restraining order of

The massacre was the culmination of eight days and seven

nights of encampment by members of the militant Kilusang

Magbubukid sa Pilipinas (KMP) at the then Ministry (now

just allow the government to implement its comprehensive

received by the Capital Regional Command (CAPCOM) that the

Department) of Agrarian Reform (MAR) at the Philippine

land reform program. Tadeo, however, countered by saying

rallyists would proceed to Mendiola to break through the

Tobacco Administration Building along Elliptical Road in

that he did not believe in the Constitution and that a genuine

police

Diliman, Quezon City.

land reform cannot be realized under a landlord-controlled

Commander

Congress. A heated discussion ensued between Tadeo and

preparations and adequacy of the government forces to quell

The farmers and their sympathizers presented their demands

Minister

impending attacks.

for what they called "genuine agrarian reform". The KMP, led

suggested a negotiating panel from each side to meet again

by its national president, Jaime Tadeo, presented their

the following day.

Alvarez.

This

notwithstanding,

Minister Alvarez

problems and demands, among which were: (a) giving lands for

lines

and

rush

General

towards

Ramon

E.

Malacaang,
Montao

CAPCOM

inspected

the

OPLAN YELLOW (Revised) was put into effect. Task Force

Nazareno under the command of Col. Cesar Nazareno was

free to farmers; (b) zero retention of lands by landlords; and

On January 22, 1987, Tadeo's group instead decided to march

deployed at the vicinity of Malacaang. The civil disturbance

(c) stop amortizations of land payments.

to Malacaang to air their demands. Before the march started,

control units of the Western Police District under Police

Tadeo talked to the press and TV media. He uttered fiery

Brigadier General Alfredo S. Lim were also activated.

The dialogue between the farmers and the MAR officials began

words, the most telling of which were:

on January 15, 1987. The two days that followed saw a marked

". . . inalis namin ang barikada bilang kahilingan ng ating

Intelligence reports were also received that the KMP was

increase in people at the encampment. It was only on January

Presidente, pero kinakailangan alisin din niya ang barikada sa

heavily

19, 1987 that Jaime Tadeo arrived to meet with then Minister

Mendiola sapagkat bubutasin din namin iyon at dadanak ang

insurrection was impending. The threat seemed grave as there

Heherson Alvarez, only to be informed that the Minister can

dugo . . . ." 4

were also reports that San Beda College and Centro Escolar

only meet with him the following day. On January 20, 1987,

infiltrated

by

CPP/NPA elements

and

that

an

University would be forcibly occupied.

the meeting was held at the MAR conference room. Tadeo

The farmers then proceeded to march to Malacaang, from

demanded that the minimum comprehensive land reform

Quezon Memorial Circle, at 10:00 a.m. They were later joined

In its report, the Citizens' Mendiola Commission (a body

program be granted immediately. Minister Alvarez, for his part,

by members of other sectoral organizations such as the

specifically tasked to investigate the facts surrounding the

can only promise to do his best to bring the matter to the

Kilusang Mayo Uno (KMU), Bagong Alyansang Makabayan

incident, Commission for short) stated that the government

attention of then President Aquino, during the cabinet meeting

(BAYAN), League of Filipino Students (LFS) and Kongreso ng

anti-riot forces were assembled at Mendiola in a formation of

on January 21, 1987.

Pagkakaisa ng Maralitang Lungsod (KPML).

three phalanges, in the following manner:

Tension mounted the following day. The farmers, now on their

At around 1:00 p.m., the marchers reached Liwasang Bonifacio

(1)

seventh day of encampment, barricaded the MAR premises and

where they held a brief program. It was at this point that some

stations Nos. 3, 4, 6, 7, 8, 9 and 10 and the Chinatown

prevented the employees from going inside their offices. They

of the marchers entered the eastern side of the Post Office

detachment of the Western Police District. Police Colonel

hoisted the KMP flag together with the Philippine flag.

Building, and removed the steel bars surrounding the garden.

Edgar Dula Torres, Deputy Superintendent of the Western

Thereafter, they joined the march to Malacaang. At about

Police District, was designated as ground commander of the

4:30 p.m., they reached C.M. Recto Avenue.

CDC first line of defense. The WPD CDC elements were

At around 6:30 p.m. of the same day, Minister Alvarez, in a

meeting with Tadeo and his leaders, advised the latter to
instead wait for the ratification of the 1987 Constitution and

The first line was composed of policemen from police

positioned at the intersection of Mendiola and Legarda Streets

In anticipation of a civil disturbance, and acting upon reports

after they were ordered to move forward from the top of

Mendiola bridge. The WPD forces were in khaki uniform and

Paquinto and Lt. Laonglaan Goce sped towards Legarda Street

carried the standard CDC equipment aluminum shields,

In front of the College of the Holy Spirit near Gate 4 of

and lobbed tear gas at the remaining rallyist still grouped in

truncheons and gas masks.

Malacaang stood the VOLVO Mobile Communications Van of

the vicinity of Mendiola. After dispersing the crowd, the two

the Commanding General of CAPCOM/INP, General Ramon E.

MDTs, together with the two WPD MDTs, proceeded to

At the second line of defense about ten (10) yards behind

Montao. At this command post, after General Montao had

Liwasang Bonifacio upon order of General Montao to disperse

the WPD policemen were the elements of the Integrated

conferred with TF Nazareno Commander, Colonel Cezar

the rallyists assembled thereat. Assisting the MDTs were a

National Police (INP) Field Force stationed at Fort Bonifacio

Nazareno, about the adequacy and readiness of his forces, it

number of policemen from the WPD, attired in civilian clothes

from the 61st and 62nd INP Field Force, who carried also the

was agreed that Police General Alfredo S. Lim would designate

with white head bands, who were armed with long firearms. 6

standard CDC equipment truncheons, shields and gas masks.

Police Colonel Edgar Dula Torres and Police Major Conrado

(Emphasis ours)

The INP Field Force was under the command of Police Major

Francisco as negotiators with the marchers. Police General Lim

Demetrio dela Cruz.

then proceeded to the WPD CDC elements already positioned

After the clash, twelve (12) marchers were officially confirmed

at the foot of Mendiola bridge to relay to Police Colonel Torres

dead, although according to Tadeo, there were thirteen (13)

and Police Major Francisco the instructions that the latter

dead, but he was not able to give the name and address of

would negotiate with the marchers. 5 (Emphasis supplied)

said victim. Thirty-nine (39) were wounded by gunshots and

(2)

(3)

Forming the third line was the Marine Civil Disturbance

Control Battalion composed of the first and second companies

of the Philippine Marines stationed at Fort Bonifacio. The

twelve (12) sustained minor injuries, all belonging to the group

marines were all equipped with shields, truncheons and M-16

The marchers, at around 4:30 p.m., numbered about 10,000 to

of the marchers.

rifles (armalites) slung at their backs, under the command of

15,000. From C.M. Recto Avenue, they proceeded toward the

Major Felimon B. Gasmin. The Marine CDC Battalion was

police lines. No dialogue took place between the marchers and

Of the police and military personnel, three (3) sustained

positioned in line formation ten (10) yards farther behind the

the anti-riot squad. It was at this moment that a clash

gunshot wounds and twenty (20) suffered minor physical

INP Field Force.

occurred and, borrowing the words of the Commission

injuries such as abrasions, contusions and the like.

"pandemonium broke loose". The Commission stated in its

At the back of the marines were four (4) 6 x 6 army trucks,

findings, to wit:

occupying the entire width of Mendiola street, followed

In the aftermath of the confrontation, then President Corazon

C. Aquino issued Administrative Order No. 11, 7 (A.O. 11, for

immediately by two water cannons, one on each side of the

. . . There was an explosion followed by throwing of pillboxes,

brevity) dated January 22, 1987, which created the Citizens'

street and eight fire trucks, four trucks on each side of the

stones and bottles. Steel bars, wooden clubs and lead pipes

Mendiola Commission. The body was composed of retired

street. The eight fire trucks from Fire District I of Manila under

were used against the police. The police fought back with

Supreme Court Justice Vicente Abad Santos as Chairman,

Fire Superintendent Mario C. Tanchanco, were to supply water

their shields and truncheons. The police line was breached.

retired Supreme Court Justice Jose Y. Feria and Mr. Antonio U.

to the two water cannons.

Suddenly shots were heard. The demonstrators disengaged

Miranda, both as members. A.O. 11 stated that the Commission

from the government forces and retreated towards C.M. Recto

was created precisely for the "purpose of conducting an

Stationed farther behind the CDC forces were the two Mobile

Avenue. But sporadic firing continued from the government

investigation of the disorder, deaths, and casualties that took

Dispersal Teams (MDT) each composed of two tear gas

forces.

place in the vicinity of Mendiola Bridge and Mendiola Street

grenadiers, two spotters, an assistant grenadier, a driver and

the team leader.

and Claro M. Recto Avenue, Manila, in the afternoon of January

After the firing ceased, two MDTs headed by Lt. Romeo

22, 1987". The Commission was expected to have submitted its

findings not later than February 6, 1987. But it failed to do so.

(5)

The carrying and use of steel bars, pillboxes, darts, lead

(11) Tear gas was not used at the start of the disturbance to

Consequently, the deadline was moved to February 16, 1987 by

pipe, wooden clubs with spikes, and guns by the marchers as

disperse the rioters. After the crowd had dispersed and the

Administrative Order No. 13. Again, the Commission was

offensive weapons are prohibited acts punishable under

wounded and dead were being carried away, the MDTs of the

unable to meet this deadline. Finally, on February 27, 1987, it

paragraph (g), Section 13, and punishable under paragraph (e),

police and the military with their tear gas equipment and

submitted its report, in accordance with Administrative Order

Section 14 of Batas Pambansa Blg. 880.

components conducted dispersal operations in the Mendiola

No. 17, issued on February 11, 1987.

area and proceeded to Liwasang Bonifacio to disperse the

(6)

In its report, the Commission recapitulated its findings, to wit:

The KMP farmers broke off further negotiations with the

remnants of the marchers.

MAR officials and were determined to march to Malacaang,

emboldened as they are, by the inflammatory and incendiary

(12) No barbed wire barricade was used in Mendiola but no

The march to Mendiola of the KMP led by Jaime Tadeo,

utterances of their leader, Jaime Tadeo "bubutasin namin

official reason was given for its absence. 8

together with the other sectoral groups, was not covered by

ang barikada . . Dadanak and dugo . . . Ang nagugutom na

any permit as required under Batas Pambansa Blg. 880, the

magsasaka ay gagawa ng sariling butas. . .

(1)

Public Assembly Act of 1985, in violation of paragraph (a)

From the results of the probe, the Commission recommended 9

the criminal prosecution of four unidentified, uniformed

Section 13, punishable under paragraph (a), Section 14 of said

(7)

There was no dialogue between the rallyists and the

individuals, shown either on tape or in pictures, firing at the

law.

government forces. Upon approaching the intersections of

direction of the marchers. In connection with this, it was the

Legarda and Mendiola, the marchers began pushing the police

Commission's recommendation that the National Bureau of

lines and penetrated and broke through the first line of the

Investigation (NBI) be tasked to undertake investigations

CDC contingent.

regarding the identities of those who actually fired their guns

(2)

The crowd dispersal control units of the police and the

military were armed with .38 and .45 caliber handguns, and M16 armalites, which is a prohibited act under paragraph 4(g),

that resulted in the death of or injury to the victims of the

Section 13, and punishable under paragraph (b), Section 14 of

(8)

The police fought back with their truncheons and shields.

incident. The Commission also suggested that all the

Batas Pambansa Blg. 880.

They stood their ground but the CDC line was breached. There

commissioned officers of both the Western Police District and

ensued gunfire from both sides. It is not clear who started the

the INP Field Force, who were armed during the incident, be

firing.

prosecuted for violation of paragraph 4(g) of Section 13, Batas

(3)

The security men assigned to protect the WPD, INP Field

Force, the Marines and supporting military units, as well as the

Pambansa Blg. 880, the Public Assembly Act of 1985. The

security officers of the police and military commanders were

(9)

At the onset of the disturbance and violence, the water

Commission's recommendation also included the prosecution of

in civilian attire in violation of paragraph (a), Section 10, Batas

cannons and tear gas were not put into effective use to

the marchers, for carrying deadly or offensive weapons, but

Pambansa 880.

disperse the rioting crowd.

whose identities have yet to be established. As for Jaime

(4)

There was unnecessary firing by the police and military

(10) The water cannons and fire trucks were not put into

for violation of paragraph (a), Section 13, Batas Pambansa Blg.

crowd dispersal control units in dispersing the marchers, a

operation because (a) there was no order to use them; (b) they

880 for holding the rally without a permit and for violation of

prohibited act under paragraph (e), Section 13, and punishable

were incorrectly prepositioned; and (c) they were out of range

Article 142, as amended, of the Revised Penal Code for inciting

under paragraph (b), Section 14, Batas Pambansa Blg. 880.

of the marchers.

to sedition. As for the following officers, namely: (1) Gen.

Tadeo, the Commission said that he should be prosecuted both

Ramon E. Montao; (2) Police Gen. Alfredo S. Lim; (3) Police

Gen. Edgar Dula Torres; (4) Police Maj. Demetrio dela Cruz; (5)

suit and that the dismissal of the instant action is contrary to

Under our Constitution the principle of immunity of the

Col. Cezar Nazareno; and (5) Maj. Felimon Gasmin, for their

both the Constitution and the International Law on Human

government from suit is expressly provided in Article XVI,

failure to make effective use of their skill and experience in

Rights.

Section 3. The principle is based on the very essence of

directing the dispersal operations in Mendiola, administrative

sanctions were recommended to be imposed.

sovereignty, and on the practical ground that there can be no

Respondent Judge Sandoval, in his first questioned Order,

legal right as against the authority that makes the law on

dismissed the complaint as against the Republic of the

which the right depends. 12 It also rests on reasons of public

The last and the most significant recommendation of the

Philippines on the ground that there was no waiver by the

policy that public service would be hindered, and the public

Commission was for the deceased and wounded victims of the

State.

for

endangered, if the sovereign authority could be subjected to

Mendiola incident to be compensated by the government. It

Reconsideration therefrom, but the same was denied by

law suits at the instance of every citizen and consequently

was this portion that petitioners (Caylao group) invoke in their

respondent judge in his Order dated August 8, 1988.

controlled in the uses and dispositions of the means required

claim for damages from the government.

Consequently, Caylao and her co-petitioners filed the instant

for the proper administration of the government. 13

Petitioners

(Caylao

group)

filed

Motion

petition.
Notwithstanding such recommendation, no concrete form of

This is not a suit against the State with its consent.

compensation was received by the victims. Thus, on July 27,

On the other hand, the Republic of the Philippines, together

1987, herein petitioners, (Caylao group) filed a formal letter

with the military officers and personnel impleaded as

Firstly, the

of demand for compensation from the Government. 10 This

defendants in the court below, filed its petition for certiorari.

regarding indemnification of the heirs of the deceased and the

formal demand was indorsed by the office of the Executive

recommendation

made

by

the

Commission

victims of the incident by the government does not in any way

Secretary to the Department of Budget and Management (DBM)

Having arisen from the same factual beginnings and raising

mean that liability automatically attaches to the State. It is

on August 13, 1987. The House Committee on Human Rights,

practically identical issues, the two (2) petitions were

important to note that A.O. 11 expressly states that the

on February 10, 1988, recommended the expeditious payment

consolidated and will therefore be jointly dealt with and

purpose of creating the Commission was to have a body that

of compensation to the Mendiola victims. 11

resolved in this Decision.

will conduct an "investigation of the disorder, deaths and

casualties that took place." 14 In the exercise of its functions,

After almost a year, on January 20, 1988, petitioners (Caylao

The resolution of both petitions revolves around the main issue

A.O. 11 provides guidelines, and what is relevant to Our

group) were constrained to institute an action for damages

of whether or not the State has waived its immunity from suit.

discussion reads:

military officers, and personnel involved in the Mendiola

Petitioners (Caylao group) advance the argument that the

incident, before the trial court. The complaint was docketed

State has impliedly waived its sovereign immunity from suit. It

for the commission of any offense and of the persons probably

as Civil Case No. 88-43351.

is their considered view that by the recommendation made by

guilty of the same shall be sufficient compliance with the rules

the Commission for the government to indemnify the heirs and

on preliminary investigation and the charges arising therefrom

On February 23, 1988, the Solicitor General filed a Motion to

victims of the Mendiola incident and by the public addresses

may be filed directly with the proper court. 15

Dismiss on the ground that the State cannot be sued without

made by then President Aquino in the aftermath of the killings,

its consent. Petitioners opposed said motion on March 16,

the State has consented to be sued.

against the Republic of the Philippines, together with the

1988, maintaining that the State has waived its immunity from

Its conclusions regarding the existence of probable cause

In effect, whatever may be the findings of the Commission,

the same shall only serve as the cause of action in the event

that any party decides to litigate his/her claim. Therefore, the

(3)

When the, suit is on its face against a government officer

cannot be invoked by both the military officers to release

Commission is merely a preliminary venue. The Commission is

but the case is such that ultimate liability will belong not to

them from any liability, and by the heirs and victims to

not the end in itself. Whatever recommendation it makes

the officer but to the government.

demand indemnification from the government. The principle

cannot in any way bind the State immediately, such

of state immunity from suit does not apply, as in this case,

recommendation not having become final and, executory. This

While the Republic in this case is sued by name, the ultimate

when the relief demanded by the suit requires no affirmative

is precisely the essence of it being a fact-finding body.

liability does not pertain to the government. Although the

official action on the part of the State nor the affirmative

military officers and personnel, then party defendants, were

discharge of any obligation which belongs to the State in its

Secondly, whatever acts or utterances that then President

discharging their official functions when the incident occurred,

political capacity, even though the officers or agents who are

Aquino may have done or said, the same are not tantamount to

their functions ceased to be official the moment they

made defendants claim to hold or act only by virtue of a title

the State having waived its immunity from suit. The President's

exceeded their authority. Based on the Commission findings,

of the state and as its agents and servants. 22 This Court has

act of joining the marchers, days after the incident, does not

there was lack of justification by the government forces in the

made it quite clear that even a "high position in the

mean that there was an admission by the State of any liability.

use of firearms. 17 Moreover, the members of the police and

government does not confer a license to persecute or

In fact to borrow the words of petitioners (Caylao group), "it

military crowd dispersal units committed a prohibited act

recklessly injure another." 23

was an act of solidarity by the government with the people".

under B.P. Blg. 880 18 as there was unnecessary firing by them

Moreover, petitioners rely on President Aquino's speech

in dispersing the marchers. 19

The inescapable conclusion is that the State cannot be held

promising that the government would address the grievances

civilly liable for the deaths that followed the incident. Instead,

of the rallyists. By this alone, it cannot be inferred that the

As early as 1954, this Court has pronounced that an officer

the liability should fall on the named defendants in the lower

State has admitted any liability, much less can it be inferred

cannot shelter himself by the plea that he is a public agent

court. In line with the ruling of this court in Shauf vs. Court of

that it has consented to the suit.

acting under the color of his office when his acts are wholly

Appeals, 24 herein public officials, having been found to have

without authority. 20 Until recently in 1991, 21 this doctrine

acted beyond the scope of their authority, may be held liable

Although consent to be sued may be given impliedly, still it

still found application, this Court saying that immunity from

for damages.

cannot be maintained that such consent was given considering

suit

the circumstances obtaining in the instant case.

accountability nor grant a privileged status not claimed by any

WHEREFORE, finding no reversible error and no grave abuse of

other official of the Republic. The military and police forces

discretion committed by respondent Judge in issuing the

were deployed to ensure that the rally would be peaceful and

questioned orders, the instant petitions are hereby DISMISSED.

Thirdly, the case does not qualify as a suit against the State.

cannot

institutionalize

irresponsibility

and

non-

orderly as well as to guarantee the safety of the very people

Some instances when a suit against the State is proper are: 16

that they are duty-bound to protect. However, the facts as

SO ORDERED.

found by the trial court showed that they fired at the unruly
(1)

When the Republic is sued by name;

crowd to disperse the latter.

(2)

When the suit is against an unincorporated government

While it is true that nothing is better settled than the general

SUPREME COURT

rule that a sovereign state and its political subdivisions cannot

Manila

Narvasa, C.J., Cruz, Felicia

Republic of the Philippines

agency;

be sued in the courts except when it has given its consent, it

EN BANC
G.R. No. L-5156

March 11, 1954

CARMEN FESTEJO, demandante-apelante,

aggregate area of 24,179 square meters and to return the land

de Carreteras, al mejorar un trozo de la carretera ocupo o se

to

apropio de terrenos contiguos al derecho de paso. El Tribunal

its

former

condition

under

the

expenses

of

the

defendant. . . .

vs.

Supremo del Estado declaro que es personalmente responsable

al dueo de los daos causados. Declaro ademas que la

ISAIAS FERNANDO, Director de Obras Publicas, demandado-

In the remote event that the portions of land unlawfully

ratificacion

apelado.

occupied and appropriated can not be returned to the

equivalente a una orden a los mismos. He aqui lo dijo el

plaintiff, then to order the defendant to pay to the plaintiff

Tribunal.

DIOKNO, J.:

de

lo

que

hicieron

sus

subordinados

era

the sum of P19,343.20 as value of the portions totalling an

area of 24,179 square meters; ---- R. on A., p. 5.

Carmen Festejo, duea de unos terrenos azucareros, de un

We think the evidence and conceded facts permitted the jury

in finding that in the trespass on plaintiff's land defendant

total de unas 9 hectareas y media de superfice, demando a

y ademas a pagar P9,756.19 de daos y P5,000 de honorarios

committed acts outside the scope of his authority. When he

"Isaias Fernando Director, Bureau of public Works, que como

de abogado, con las costas R. on A., pp. 5-6.

went outside the boundaries of the right of way upon plaintiff's

tal Director de Obras Publicas tiene a su cargo los sistemas y

land and damaged it or destroyed its former condition an

proyectos de irrigacion y es el funcionario responsable de la

El demandado, por medio del Procurador General, presento

dusefulness, he must be held to have designedly departed

construccion de los sistemas de irrigacion en el pais," alegando

mocion de sobreseimiento de la demanda por el fundamento

from the duties imposed on him by law. There can be no claim

que

de que el Juzgado no tiene jurisdiccion para dictar sentencia

that he thus invaded plaintiff's land southeasterly of the right

valida contra el, toda vez que judicialmente la reclamacion es

of way innocently. Surveys clearly marked the limits of the

The defendant, as Director of the Bureau of Public Works,

contra la Republica de Filipinas, y esta no ha presentado su

land appropriated for the right of way of this trunk highway

without authority obtained first from the Court of First

consentimiento a la demanda. El Juzgado inferior estimo la

before construction began. . . .

Instance of Ilocos Sur, without obtaining first a right of way,

mocion y sobreseyo la demanda sin perjuicio y sin costas.

and without the consent and knowledge of the plaintiff, and

"Ratification may be equivalent to command, and cooperation

against her express objection unlawfully took possession of

En apelacion, la demandante sostiene que fue un error

may be inferred from acquiescence where there is power to

portions of the three parcels of land described above, and

considerar la demanda como una contra la Republica y

restrain." It is unnecessary to consider other cases cited, . . .,

caused an irrigation canal to be constructed on the portion of

sobreseer en su virtud la demanda.

for as before suggested, the jury could find or infer that, in so

the three parcels of land on or about the month of February

far as there was actual trespass by appropriation of plaintiff's

1951 the aggregate area being 24,179 square meters to the

La mocion contra "Isaias Fernando, Director de Obras Publicas,

land as a dumping place for the rock to be removed from the

damage and prejudice of the plaintiff. ----- R. on A., p. 3.

encargado y responsable de la construccion de los sistemas de

additional appropriated right of way, defendant planned,

irrigacion en Filipinas" es una dirigida personalmente contra el,

approved, and ratified what was done by his subordinates.

causando a ella variados daos y perjuicios. Pidio, en su

por actos que asumio ejecutar en su concepto oficial. La ley no

Nelson vs. Bobcock, 90 A.L.R., 1472, 1476, 1477.

consecuencia, sentencia condenando el demandado:

le exime de responsabilidad por las extralimitaciones que

cometa o haga cometer en el desempeo de sus funciones

La doctrina sobre la responsabilidad civil de los funcionarios en

. . . to return or cause to be returned the possession of the

oficiales. Un caso semejante es el de Nelson vs. Bobcock

casos parecidos se resume como sigue:

portions of land unlawfully occupied and appropriated in the

(1933) 18 minn. 584, NW 49, 90 ALR 1472. Alli el Comisionado

Ordinarily the officer or employee committing the tort is

"Isaias Fernando, Director, Bureau of Public Works." Moreover,

personally liable therefor, and may be sued as any other

In any of the cases referred to this article, whether or not the

citizen and held answerable for whatever injury or damage

defendant's acts or omission constitutes a criminal offense, the

results from his tortious act. 49 Am. Jur. 289.

aggrieved party has a right ot commence an entirely separate

4. That the defendant as Director of the Bureau of Public

and distinct civil action for damages, and for other relief. Such

Works, is in charge of irrigation projects and systems, and the

. . . If an officer, even while acting under color of his office,

civil action shall proceed independently of any criminal

official responsible for the construction of irrigation system in

exceeds the power conferred on him by law, he cannot shelter

prosecution (if the latter be instituted), and may be proved by

the Philippines;

himself under the plea that he is a public agent. 43 Am. Jur.

a preponderance of evidence.

86.

in paragraphs 4 and 5 of the complaint, it is alleged:

5. That the defendant, as Director of the Bureau of Public

It is a general rule that an officer-executive, administrative

The inmdemnity shall include moral damages Exemplary

Works, without authority obtained first from the Court of First

damages may also be adjudicated.

Instance of Ilocos Sur, without obtaining first a right of way,

quasi-judicial, ministerial, or otherwise who acts outside the

and without the consent and knowledge of the plaintiff, and

scope of his jurisdiction and without authorization of law may

Veanse tambien Lung vs. Aldanese, 45 Phil., 784; Syquia vs.

against her express objection, unlawfully took possession of

thereby render himself amenable to personal liability in a civil

Almeda, No. L-1648, Agosto 17, 1947; Marquez vs. Nelson, No.

portions of the three parcels of land described above, and

suit. If he exceed the power conferred on him by law, he

L-2412, Septiembre 1950.

caused an irrigation canal to be constructed on the portion of

cannot shelter himself by the plea that he is a public agent

the three parcels of land on or about the month of February

acting under the color of his office, and not personally. In the

Se revoca la orden apelada y se ordena la continuacion de la

1951 the aggregate area being 24,179 square meters to the

eye of the law, his acts then are wholly without authority. 43

tramitacion de la demanda conforme proveen los reglamentos.

damage and prejudice of the plaintiff. (Emphasis supplied.)

Am. Jur. 89-90.

Sin especial pronunciamiento en cuanto a las costas. Asi se

ordena.

El articulo 32 del Codigo Civil dice a su vez:

ART. 32. Any public officer or emplyee, or any private

The emphasis thus placed upon the allegation that the acts
complained of were performed by said defendant "as Director

Padilla, Reyes, Jugo, Bautista Angelo and Labrador, MM., estan

of the Bureau of Public Works," clearly shows that the

conformes.

designation of his office was included in the title of the case

individual, who directly or indirectly obstructs, defeats,

to indicate that he was being sued in his official capacity. This

violates or in any manner impedes or impairs any of the

conclusion is bolstered up by the fact that, among other

following rights and liberties of another person shall be liable

Separate Opinions

things, plaintiff prays, in the complaint, for a judgment

CONCEPCION, J., dissenting:

Ordering the defendant to return or caused to be returned the

to the latter for damages:

xxx

xxx

xxx

possession of the portions of land unlawfully occupied and

To my mind, the allegations of the complaint lead to no other

appropriated in the aggregate area of 24,179 square meters

(6) The right against deprivation of property without due

conclusion than that appellee Isaias Fernando is a party in this

and to return the land to its former condition under the

process of law;

case, not in his personal capacity, but as an officer of the

expense of the defendant. (Paragraph a, of the complaint).

Government. According to said pleading the defendant is

We take judicial notice of the fact that the irrigation projects

xxx

xxx

xxx

and system reffered to in the complaint of which the

was not impleaded in the complaints below but has moved to

defendant, Isaias Fernando, according to the same pleading, is

dismiss on the ground that they are in effect suits against it to

"in charge" and for which he is "responsible" as Director of the

which it has not consented. It is now contesting the denial of

On June 30, 1986, the private respondents filed a complaint in

Bureau of Public Works are established and operated with

its motions by the respondent judges.

the court below to compel PHAX and the individual petitioners

public funds, which pursuant to the Constitution, must be

would be notified.

to cancel the award to defendant Dizon, to conduct a

appropriated by law. Irrespective of the manner in which the

In G.R. No. 76607, the private respondents are suing several

rebidding for the barbershop concessions and to allow the

construction may have been undertaken by the Bureau of

officers of the U.S. Air Force stationed in Clark Air Base in

private respondents by a writ of preliminary injunction to

Public Works, the system or canal is, therefore, a property of

connection with the bidding conducted by them for contracts

continue operating the concessions pending litigation. 1

the Government. Consequently, in praying that possession of

for barber services in the said base.

the portions of land occupied by the irrigation canal involved

Upon the filing of the complaint, the respondent court issued

in the present case be returned to plaintiff therein, and that

On February 24, 1986, the Western Pacific Contracting Office,

an ex parte order directing the individual petitioners to

said land be restored to its former condition, plaintiff seeks to

Okinawa Area Exchange, U.S. Air Force, solicited bids for such

maintain the status quo.

divest the Government of its possession of said irrigation

contracts through its contracting officer, James F. Shaw. Among

canal, and, what is worse, to cause said property of the

those who submitted their bids were private respondents

On July 22, 1986, the petitioners filed a motion to dismiss and

Government to be removed or destroyed. As held in Syquia vs.

Roberto T. Valencia, Emerenciana C. Tanglao, and Pablo C. del

opposition to the petition for preliminary injunction on the

Lopez (47 Off. Gaz., 665), the Government is, accordingly, "the

Pilar. Valencia had been a concessionaire inside Clark for 34

ground that the action was in effect a suit against the United

real party in interest as defendant" in the case at bar. In other

years; del Pilar for 12 years; and Tanglao for 50 years.

States of America, which had not waived its non-suability. The

words, the same partakes of the nature of a suit against the

state and may not be maintained without its consent.

individual defendants, as official employees of the U.S. Air

The bidding was won by Ramon Dizon, over the objection of

Force, were also immune from suit.

the private respondents, who claimed that he had made a bid

Hence I am constrained to dissent.

for four facilities, including the Civil Engineering Area, which

On the same date, July 22, 1986, the trial court denied the

was not included in the invitation to bid.

application for a writ of preliminary injunction.

SUPREME COURT

The private respondents complained to the Philippine Area

On October 10, 1988, the trial court denied the petitioners'

Manila

Exchange (PHAX). The latter, through its representatives,

motion to dismiss, holding in part as follows:

EN BANC

petitioners Yvonne Reeves and Frederic M. Smouse explained

G.R. No. 76607 February 26, 1990

that the Civil Engineering concession had not been awarded to

From the pleadings thus far presented to this Court by the

UNITED STATES OF AMERICA vs. GUINTO

Dizon as a result of the February 24, 1986 solicitation. Dizon

parties, the Court's attention is called by the relationship

was already operating this concession, then known as the NCO

between the plaintiffs as well as the defendants, including the

CRUZ, J.:

club concession, and the expiration of the contract had been

US Government, in that prior to the bidding or solicitation in

These cases have been consolidated because they all involve

extended from June 30, 1986 to August 31, 1986. They further

question, there was a binding contract between the plaintiffs

the doctrine of state immunity. The United States of America

explained that the solicitation of the CE barbershop would be

as well as the defendants, including the US Government. By

available only by the end of June and the private respondents

virtue of said contract of concession it is the Court's

Republic of the Philippines

understanding that neither the US Government nor the herein

collective bargaining agreement between the Center and its

In G.R. No. 80018, Luis Bautista, who was employed as a

principal defendants would become the employer/s of the

employees. The board unanimously found him guilty and

barracks boy in Camp O' Donnell, an extension of Clark Air

plaintiffs but that the latter are the employers themselves of

recommended his dismissal. This was effected on March 5,

Base, was arrested following a buy-bust operation conducted

the barbers, etc. with the employer, the plaintiffs herein,

1986, by Col. David C. Kimball, Commander of the 3rd Combat

by the individual petitioners herein, namely, Tomi J. King,

remitting the stipulated percentage of commissions to the

Support Group, PACAF Clark Air Force Base. Genove's reaction

Darrel D. Dye and Stephen F. Bostick, officers of the U.S. Air

Philippine Area Exchange. The same circumstance would

was to file Ms complaint in the Regional Trial Court of Baguio

Force and special agents of the Air Force Office of Special

become in effect when the Philippine Area Exchange opened

City against the individual petitioners. 4

Investigators (AFOSI). On the basis of the sworn statements

for bidding or solicitation the questioned barber shop

made by them, an information for violation of R.A. 6425,

concessions. To this extent, therefore, indeed a commercial

On March 13, 1987, the defendants, joined by the United

otherwise known as the Dangerous Drugs Act, was filed against

transaction has been entered, and for purposes of the said

States of America, moved to dismiss the complaint, alleging

Bautista in the Regional Trial Court of Tarlac. The above-named

solicitation, would necessarily be entered between the

that Lamachia, as an officer of the U.S. Air Force stationed at

officers testified against him at his trial. As a result of the

plaintiffs as well as the defendants.

John Hay Air Station, was immune from suit for the acts done

filing of the charge, Bautista was dismissed from his

by him in his official capacity. They argued that the suit was in

employment. He then filed a complaint for damages against

The Court, further, is of the view that Article XVIII of the RP-US

effect against the United States, which had not given its

the individual petitioners herein claiming that it was because

Bases Agreement does not cover such kind of services falling

consent to be sued.

of their acts that he was removed. 6

This motion was denied by the respondent judge on June 4,

During the period for filing of the answer, Mariano Y. Navarro a

1987, in an order which read in part:

special counsel assigned to the International Law Division,

under

the

concessionaireship,

such

as

barber

shop

concession. 2

On December 11, 1986, following the filing of the herein

Office of the Staff Judge Advocate of Clark Air Base, entered a

petition for certiorari and prohibition with preliminary

It is the understanding of the Court, based on the allegations

special appearance for the defendants and moved for an

injunction, we issued a temporary restraining order against

of the complaint which have been hypothetically admitted

extension within which to file an "answer and/or other

further proceedings in the court below. 3

by defendants upon the filing of their motion to dismiss that

pleadings." His reason was that the Attorney General of the

although defendants acted initially in their official capacities,

United States had not yet designated counsel to represent the

In G.R. No. 79470, Fabian Genove filed a complaint for

their going beyond what their functions called for brought

defendants, who were being sued for their official acts. Within

damages against petitioners Anthony Lamachia, Wilfredo Belsa,

them out of the protective mantle of whatever immunities

the extended period, the defendants, without the assistance

Rose Cartalla and Peter Orascion for his dismissal as cook in

they may have had in the beginning. Thus, the allegation that

of counsel or authority from the U.S. Department of Justice,

the U.S. Air Force Recreation Center at the John Hay Air

the acts complained of were illegal, done. with extreme bad

filed their answer. They alleged therein as affirmative

Station in Baguio City. It had been ascertained after

faith and with pre-conceived sinister plan to harass and finally

defenses that they had only done their duty in the

investigation, from the testimony of Belsa Cartalla and

dismiss the plaintiff, gains significance. 5

enforcement of the laws of the Philippines inside the American

Orascion, that Genove had poured urine into the soup stock

bases pursuant to the RP-US Military Bases Agreement.

used in cooking the vegetables served to the club customers.

The petitioners then came to this Court seeking certiorari and

Lamachia, as club manager, suspended him and thereafter

prohibition with preliminary injunction.

referred the case to a board of arbitrators conformably to the

On May 7, 1987, the law firm of Luna, Sison and Manas, having
been retained to represent the defendants, filed with leave of

court a motion to withdraw the answer and dismiss the

the suit was in effect a suit against the United States, which

that we have adopted as part of the law of our land under

complaint. The ground invoked was that the defendants were

had not given its consent to be sued. The defendants were also

Article II, Section 2. This latter provision merely reiterates a

acting in their official capacity when they did the acts

immune from suit under the RP-US Bases Treaty for acts done

policy earlier embodied in the 1935 and 1973 Constitutions and

complained of and that the complaint against them was in

by them in the performance of their official functions.

also intended to manifest our resolve to abide by the rules of

effect a suit against the United States without its consent.

the international community.

The motion to dismiss was denied by the trial court in its order

The motion was denied by the respondent judge in his order

dated August 10, 1987, reading in part as follows:

dated September 11, 1987, which held that the claimed

Even without such affirmation, we would still be bound by the

generally accepted principles of international law under the

immunity under the Military Bases Agreement covered only

The defendants certainly cannot correctly argue that they are

doctrine of incorporation. Under this doctrine, as accepted by

criminal and not civil cases. Moreover, the defendants had

immune from suit. The allegations, of the complaint which is

the

come under the jurisdiction of the court when they submitted

sought to be dismissed, had to be hypothetically admitted and

incorporated in the law of every civilized state as a condition

their answer. 7

whatever ground the defendants may have, had to be

and consequence of its membership in the society of nations.

ventilated during the trial of the case on the merits. The

Upon its admission to such society, the state is automatically

Following the filing of the herein petition for certiorari and

complaint alleged criminal acts against the individually-named

obligated to comply with these principles in its relations with

prohibition with preliminary injunction, we issued on October

defendants and from the nature of said acts it could not be

other states.

14, 1987, a temporary restraining order. 8

said that they are Acts of State, for which immunity should be

majority

of

states,

such

principles

are

deemed

invoked. If the Filipinos themselves are duty bound to respect,

As applied to the local state, the doctrine of state immunity is

In G.R. No. 80258, a complaint for damages was filed by the

obey and submit themselves to the laws of the country, with

based on the justification given by Justice Holmes that "there

private respondents against the herein petitioners (except the

more reason, the members of the United States Armed Forces

can be no legal right against the authority which makes the

United States of America), for injuries allegedly sustained by

who are being treated as guests of this country should respect,

law on which the right depends." 12 There are other practical

the plaintiffs as a result of the acts of the defendants. 9 There

obey and submit themselves to its laws. 10

reasons for the enforcement of the doctrine. In the case of the

is a conflict of factual allegations here. According to the

foreign state sought to be impleaded in the local jurisdiction,

plaintiffs, the defendants beat them up, handcuffed them and

and so was the motion for reconsideration. The defendants

the added inhibition is expressed in the maxim par in parem,

unleashed dogs on them which bit them in several parts of

submitted their answer as required but subsequently filed

non habet imperium. All states are sovereign equals and

their bodies and caused extensive injuries to them. The

their petition for certiorari and prohibition with preliminary

cannot assert jurisdiction over one another. A contrary

defendants deny this and claim the plaintiffs were arrested for

injunction with this Court. We issued a temporary restraining

disposition would, in the language of a celebrated case,

theft and were bitten by the dogs because they were

order on October 27, 1987. 11

"unduly vex the peace of nations." 13

II

While the doctrine appears to prohibit only suits against the

struggling and resisting arrest, The defendants stress that the

dogs were called off and the plaintiffs were immediately taken
to the medical center for treatment of their wounds.

state without its consent, it is also applicable to complaints

The rule that a state may not be sued without its consent, now

filed against officials of the state for acts allegedly performed

In a motion to dismiss the complaint, the United States of

expressed in Article XVI, Section 3, of the 1987 Constitution, is

by them in the discharge of their duties. The rule is that if the

America and the individually named defendants argued that

one of the generally accepted principles of international law

judgment against such officials will require the state itself to

perform an affirmative act to satisfy the same, such as the

the other contracting party and divested of its sovereign

appropriation of the amount needed to pay the damages

immunity from suit with its implied consent. 16 Waiver is also

awarded against them, the suit must be regarded as against

implied when the government files a complaint, thus opening

The invocation of the doctrine of immunity from suit of a

the state itself although it has not been formally impleaded.

itself to a counterclaim. 17

foreign state without its consent is appropriate. More

14 In such a situation, the state may move to dismiss the

emphasized that in Baer, the Court held:

specifically, insofar as alien armed forces is concerned, the

complaint on the ground that it has been filed without its

The above rules are subject to qualification. Express consent is

starting point is Raquiza v. Bradford, a 1945 decision. In

consent.

effected only by the will of the legislature through the

dismissing a habeas corpus petition for the release of

medium of a duly enacted statute. 18 We have held that not

petitioners confined by American army authorities, Justice

The doctrine is sometimes derisively called "the royal

all contracts entered into by the government will operate as a

Hilado speaking for the Court, cited Coleman v. Tennessee,

prerogative of dishonesty" because of the privilege it grants

waiver of its non-suability; distinction must be made between

where it was explicitly declared: 'It is well settled that a

the state to defeat any legitimate claim against it by simply

its sovereign and proprietary acts. 19 As for the filing of a

foreign army, permitted to march through a friendly country or

invoking its non-suability. That is hardly fair, at least in

complaint by the government, suability will result only where

to be stationed in it, by permission of its government or

democratic societies, for the state is not an unfeeling tyrant

the government is claiming affirmative relief from the

sovereign, is exempt from the civil and criminal jurisdiction of

unmoved by the valid claims of its citizens. In fact, the

defendant. 20

the place.' Two years later, in Tubb and Tedrow v. Griess, this

doctrine is not absolute and does not say the state may not be

Court relied on the ruling in Raquiza v. Bradford and cited in

sued under any circumstance. On the contrary, the rule says

In the case of the United States of America, the customary rule

support thereof excerpts from the works of the following

that the state may not be sued without its consent, which

of international law on state immunity is expressed with more

authoritative writers: Vattel, Wheaton, Hall, Lawrence,

clearly imports that it may be sued if it consents.

specificity in the RP-US Bases Treaty. Article III thereof

Oppenheim, Westlake, Hyde, and McNair and Lauterpacht.

provides as follows:

Accuracy demands the clarification that after the conclusion of

The consent of the state to be sued may be manifested

the Philippine-American Military Bases Agreement, the treaty

expressly or impliedly. Express consent may be embodied in a

It is mutually agreed that the United States shall have the

provisions should control on such matter, the assumption being

general law or a special law. Consent is implied when the state

rights, power and authority within the bases which are

that there was a manifestation of the submission to

enters into a contract or it itself commences litigation.

necessary for the establishment, use, operation and defense

jurisdiction on the part of the foreign power whenever

thereof or appropriate for the control thereof and all the

appropriate. More to the point is Syquia v. Almeda Lopez,

The general law waiving the immunity of the state from suit is

rights, power and authority within the limits of the territorial

where plaintiffs as lessors sued the Commanding General of

found in Act No. 3083, under which the Philippine government

waters and air space adjacent to, or in the vicinity of, the

the United States Army in the Philippines, seeking the

"consents and submits to be sued upon any moneyed claim

bases which are necessary to provide access to them or

restoration to them of the apartment buildings they owned

involving liability arising from contract, express or implied,

appropriate for their control.

leased to the United States armed forces stationed in the

which could serve as a basis of civil action between private

Manila area. A motion to dismiss on the ground of non-suability

parties." In Merritt v. Government of the Philippine Islands, 15

The petitioners also rely heavily on Baer v. Tizon, 21 along

was filed and upheld by respondent Judge. The matter was

a special law was passed to enable a person to sue the

with several other decisions, to support their position that

taken to this Court in a mandamus proceeding. It failed. It was

government for an alleged tort. When the government enters

they are not suable in the cases below, the United States not

the ruling that respondent Judge acted correctly considering

into a contract, it is deemed to have descended to the level of

having waived its sovereign immunity from suit. It is

that the 4 action must be considered as one against the U.S.

Government. The opinion of Justice Montemayor continued: 'It

the United States. To the same effect is Parreno v. McGranery,

sovereign immunity from suit. In the words of Justice Vicente

is clear that the courts of the Philippines including the

as the following excerpt from the opinion of justice Tuazon

Abad Santos:

Municipal Court of Manila have no jurisdiction over the present

clearly

case for unlawful detainer. The question of lack of jurisdiction

international law, which is made a part of the law of the land

The traditional rule of immunity exempts a State from being

was raised and interposed at the very beginning of the action.

(Article II, Section 3 of the Constitution), that a foreign state

sued in the courts of another State without its consent or

The U.S. Government has not given its consent to the filing of

may not be brought to suit before the courts of another state

waiver. This rule is a necessary consequence of the principles

this suit which is essentially against her, though not in name.

or its own courts without its consent.' Finally, there is Johnson

of independence and equality of States. However, the rules of

Moreover, this is not only a case of a citizen filing a suit

v. Turner, an appeal by the defendant, then Commanding

International Law are not petrified; they are constantly

against his own Government without the latter's consent but it

General, Philippine Command (Air Force, with office at Clark

developing and evolving. And because the activities of states

is of a citizen firing an action against a foreign government

Field) from a decision ordering the return to plaintiff of the

have multiplied, it has been necessary to distinguish them

without said government's consent, which renders more

confiscated military payment certificates known as scrip

between sovereign and governmental acts (jure imperii) and

obvious the lack of jurisdiction of the courts of his country.

money. In reversing the lower court decision, this Tribunal,

private, commercial and proprietary acts (jure gestionis). The

The principles of law behind this rule are so elementary and of

through Justice Montemayor, relied on Syquia v. Almeda Lopez,

result is that State immunity now extends only to acts jure

such general acceptance that we deem it unnecessary to cite

explaining why it could not be sustained.

imperii The restrictive application of State immunity is now

shows:

'It

is

widely

accepted

principle

of

authorities in support thereof then came Marvel Building

the rule in the United States, the United kingdom and other

Corporation v. Philippine War Damage Commission, where

It bears stressing at this point that the above observations do

respondent, a United States Agency established to compensate

not confer on the United States of America a blanket immunity

damages suffered by the Philippines during World War II was

for all acts done by it or its agents in the Philippines. Neither

held as falling within the above doctrine as the suit against it

may the other petitioners claim that they are also insulated

would eventually be a charge against or financial liability of

from suit in this country merely because they have acted as

The restrictive application of State immunity is proper only

the United States Government because ... , the Commission

agents of the United States in the discharge of their official

when the proceedings arise out of commercial transactions of

has no funds of its own for the purpose of paying money

functions.

the foreign sovereign, its commercial activities or economic

judgments.' The Syquia ruling was again explicitly relied upon

states in Western Europe.

xxx xxx xxx

affairs. Stated differently, a State may be said to have

in Marquez Lim v. Nelson, involving a complaint for the

There is no question that the United States of America, like

descended to the level of an individual and can thus be

recovery of a motor launch, plus damages, the special defense

any other state, will be deemed to have impliedly waived its

deemed to have tacitly given its consent to be sued only when

interposed being 'that the vessel belonged to the United States

non-suability if it has entered into a contract in its proprietary

it enters into business contracts. It does not apply where the

Government, that the defendants merely acted as agents of

or private capacity. It is only when the contract involves its

contract relates to the exercise of its sovereign functions. In

said Government, and that the United States Government is

sovereign or governmental capacity that no such waiver may

this case the projects are an integral part of the naval base

therefore the real party in interest.' So it was in Philippine

be implied. This was our ruling in United States of America v.

which is devoted to the defense of both the United States and

Alien Property Administration v. Castelo, where it was held

Ruiz, 22 where the transaction in question dealt with the

the Philippines, indisputably a function of the government of

that a suit against Alien Property Custodian and the Attorney

improvement of the wharves in the naval installation at Subic

the highest order; they are not utilized for nor dedicated to

General of the United States involving vested property under

Bay. As this was a clearly governmental function, we held that

commercial or business purposes.

the Trading with the Enemy Act is in substance a suit against

the contract did not operate to divest the United States of its

The other petitioners in the cases before us all aver they have

Investigators and were charged precisely with the function of

sovereign immunity, it is only giving the plaintiff the chance to

acted in the discharge of their official functions as officers or

preventing the distribution, possession and use of prohibited

prove, if it can, that the defendant is liable.

agents of the United States. However, this is a matter of

drugs and prosecuting those guilty of such acts. It cannot for a

evidence. The charges against them may not be summarily

moment be imagined that they were acting in their private or

The said article establishes a rule of liability, not suability. The

dismissed on their mere assertion that their acts are imputable

unofficial capacity when they apprehended and later testified

government may be held liable under this rule only if it first

to the United States of America, which has not given its

against the complainant. It follows that for discharging their

allows itself to be sued through any of the accepted forms of

consent to be sued. In fact, the defendants are sought to be

duties as agents of the United States, they cannot be directly

consent.

held answerable for personal torts in which the United States

impleaded for acts imputable to their principal, which has not

itself is not involved. If found liable, they and they alone must

given its consent to be sued. As we observed in Sanders v.

Moreover, the agent performing his regular functions is not a

satisfy the judgment.

Veridiano: 24

special agent even if he is so denominated, as in the case at

bar. No less important, the said provision appears to regulate

In Festejo v. Fernando, 23 a bureau director, acting without

Given the official character of the above-described letters, we

only the relations of the local state with its inhabitants and,

any authority whatsoever, appropriated private land and

have to conclude that the petitioners were, legally speaking,

hence, applies only to the Philippine government and not to

converted it into public irrigation ditches. Sued for the value

being sued as officers of the United States government. As

foreign governments impleaded in our courts.

of the lots invalidly taken by him, he moved to dismiss the

they have acted on behalf of that government, and within the

complaint on the ground that the suit was in effect against the

scope of their authority, it is that government, and not the

We reject the conclusion of the trial court that the answer

Philippine government, which had not given its consent to be

petitioners personally, that is responsible for their acts.

filed by the special counsel of the Office of the Sheriff Judge

sued. This Court sustained the denial of the motion and held

Advocate of Clark Air Base was a submission by the United

that the doctrine of state immunity was not applicable. The

The private respondent invokes Article 2180 of the Civil Code

States government to its jurisdiction. As we noted in Republic

director was being sued in his private capacity for a personal

which holds the government liable if it acts through a special

v. Purisima, 25 express waiver of immunity cannot be made by

tort.

agent. The argument, it would seem, is premised on the

a mere counsel of the government but must be effected

ground that since the officers are designated "special agents,"

through a duly-enacted statute. Neither does such answer

the United States government should be liable for their torts.

come under the implied forms of consent as earlier discussed.

There seems to be a failure to distinguish between suability

But even as we are certain that the individual petitioners in

and liability and a misconception that the two terms are

G.R. No. 80018 were acting in the discharge of their official

synonymous. Suability depends on the consent of the state to

functions, we hesitate to make the same conclusion in G.R.

It is clear from a study of the records of G.R. No. 80018 that

be sued, liability on the applicable law and the established

No. 80258. The contradictory factual allegations in this case

the individually-named petitioners therein were acting in the

facts. The circumstance that a state is suable does not

deserve in our view a closer study of what actually happened

exercise of their official functions when they conducted the

necessarily mean that it is liable; on the other hand, it can

to the plaintiffs. The record is too meager to indicate if the

buy-bust operation against the complainant and thereafter

never be held liable if it does not first consent to be sued.

defendants were really discharging their official duties or had

testified against him at his trial. The said petitioners were in

Liability is not conceded by the mere fact that the state has

actually exceeded their authority when the incident in

fact

allowed itself to be sued. When the state does waive its

question occurred. Lacking this information, this Court cannot

With these considerations in mind, we now proceed to resolve

the cases at hand.

III

connected

with

the Air

Force

Office

of Special

directly decide this case. The needed inquiry must first be

visit John Hay for this reason. All persons availing themselves

dismissal. There was nothing arbitrary about the proceedings.

made by the lower court so it may assess and resolve the

of this facility pay for the privilege like all other customers as

The petitioners acted quite properly in terminating the private

conflicting claims of the parties on the basis of the evidence

in ordinary restaurants. Although the prices are concededly

respondent's employment for his unbelievably nauseating act.

that has yet to be presented at the trial. Only after it shall

reasonable and relatively low, such services are undoubtedly

It is surprising that he should still have the temerity to file his

have determined in what capacity the petitioners were acting

operated for profit, as a commercial and not a governmental

complaint for damages after committing his utterly disgusting

at the time of the incident in question will this Court

activity.

offense.

The consequence of this finding is that the petitioners cannot

Concerning G.R. No. 76607, we also find that the barbershops

invoke the doctrine of state immunity to justify the dismissal

subject of the concessions granted by the United States

In G.R. No. 79470, private respondent Genove was employed

of the damage suit against them by Genove. Such defense will

government are commercial enterprises operated by private

as a cook in the Main Club located at the U.S. Air Force

not prosper even if it be established that they were acting as

person's. They are not agencies of the United States Armed

Recreation Center, also known as the Open Mess Complex, at

agents of the United States when they investigated and later

Forces nor are their facilities demandable as a matter of right

John Hay Air Station. As manager of this complex, petitioner

dismissed Genove. For that matter, not even the United States

by the American servicemen. These establishments provide for

Lamachia is responsible for eleven diversified activities

government itself can claim such immunity. The reason is that

the grooming needs of their customers and offer not only the

generating an annual income of $2 million. Under his executive

by entering into the employment contract with Genove in the

basic haircut and shave (as required in most military

management are three service restaurants, a cafeteria, a

discharge of its proprietary functions, it impliedly divested

organizations) but such other amenities as shampoo, massage,

bakery, a Class VI store, a coffee and pantry shop, a main

itself of its sovereign immunity from suit.

manicure and other similar indulgences. And all for a fee.

determine, if still necessary, if the doctrine of state immunity

is applicable.

cashier cage, an administrative office, and a decentralized

Interestingly, one of the concessionaires, private respondent

warehouse which maintains a stock level of $200,000.00 per

But these considerations notwithstanding, we hold that the

Valencia, was even sent abroad to improve his tonsorial

month in resale items. He supervises 167 employees, one of

complaint against the petitioners in the court below must still

business, presumably for the benefit of his customers. No less

whom was Genove, with whom the United States government

be dismissed. While suable, the petitioners are nevertheless

significantly, if not more so, all the barbershop concessionaires

has concluded a collective bargaining agreement.

not liable. It is obvious that the claim for damages cannot be

are under the terms of their contracts, required to remit to

allowed on the strength of the evidence before us, which we

the

have carefully examined.

consideration of the exclusive concessions granted to them in

From these circumstances, the Court can assume that the

restaurant services offered at the John Hay Air Station partake

United

States

government

fixed

commissions

in

their respective areas.

of the nature of a business enterprise undertaken by the

The dismissal of the private respondent was decided upon only

United States government in its proprietary capacity. Such

after a thorough investigation where it was established beyond

This being the case, the petitioners cannot plead any immunity

services are not extended to the American servicemen for free

doubt that he had polluted the soup stock with urine. The

from the complaint filed by the private respondents in the

as a perquisite of membership in the Armed Forces of the

investigation, in fact, did not stop there. Despite the

court below. The contracts in question being decidedly

United States. Neither does it appear that they are exclusively

definitive finding of Genove's guilt, the case was still referred

commercial, the conclusion reached in the United States of

offered to these servicemen; on the contrary, it is well known

to the board of arbitrators provided for in the collective

America v. Ruiz case cannot be applied here.

that they are available to the general public as well, including

bargaining agreement. This board unanimously affirmed the

the tourists in Baguio City, many of whom make it a point to

findings of the investigators and recommended Genove's

The Court would have directly resolved the claims against the

defendants as we have done in G.R. No. 79470, except for the

No. 115-C-87 is DISMISSED. The temporary restraining order

SEC.

paucity of the record in the case at hand. The evidence of the

dated October 14, 1987, is made permanent.

Constabulary. -The Chief of the Philippine Constabulary, in

alleged irregularity in the grant of the barbershop concessions

17.

Rules

and

Regulations

by

Chief,

Philippine

consultation with thePhilippine Association of Detective and

is not before us. This means that, as in G.R. No. 80258, the

4.

In G.R. No. 80258, the petition is DISMISSED and the

Protective Agency Operators,Inc. and subject to the provision

respondent court will have to receive that evidence first, so it

respondent court is directed to proceed with the hearing and

of existing laws, is hereby authorized to issue the rules and

can later determine on the basis thereof if the plaintiffs are

decision of Civil Case No. 4996. The temporary restraining

regulations necessary to carry out the purpose of this Act.

entitled to the relief they seek. Accordingly, this case must

order dated October 27, 1987, is LIFTED.

also be remanded to the court below for further proceedings.

VMPSI alleges that the above provisions of R.A. No. 5487

All without any pronouncement as to costs.

violate the provisions of the 1987 Constitution against

IV

monopolies, unfair competition and combinations in restraint

SO ORDERED.

of trade, and tend to favor and institutionalize the Philippine

There are a number of other cases now pending before us

Association of Detective and Protective Agency Operators, Inc.

which also involve the question of the immunity of the United

Veterans Manpower and Protective Services, Inc. v. CA

(PADPAO) which is monopolistic because it has an interest in

States from the jurisdiction of the Philippines. This is cause for

G.R. No. 91359, September 25, 1992

more than one security agency.

regret, indeed, as they mar the traditional friendship between

Grino-Aquino, J.

two countries long allied in the cause of democracy. It is hoped

that the so-called "irritants" in their relations will be resolved

Respondent VMPSI likewise questions the validity of paragraph

3, subparagraph (g) of the Modifying Regulations on the

Facts:

in a spirit of mutual accommodation and respect, without the

Issuance of License to Operate and Private Security Licenses

inconvenience and asperity of litigation and always with

justice to both parties.

The constitutionality of the following provisions of

and Specifying Regulations for the Operation of PADPAO issued

R.A. 5487(otherwise known as the Private Security Agency

by then PC Chief Lt. Gen. Fidel V. Ramos, through Col. Sabas V.

Law), as amended, is questioned by VMPSI in its complaint:

Edades, requiring that all private security agencies/company

WHEREFORE, after considering all the above premises, the

Court hereby renders judgment as follows:

1.

security forces must register as members of any PADPAO

SEC. 4. Who may Organize a Security or Watchman Agency. -

Chapter organized within the Region where their main offices

Any

are located.... As such membership requirement in PADPAO is

Filipino

citizen

or

corporation,

partnership,

or

In G.R. No. 76607, the petition is DISMISSED and the

association, with a minimum capital of five thousand pesos,

compulsory

respondent judge is directed to proceed with the hearing and

one hundred per cent of which is owned and controlled by

constitutional

decision of Civil Case No. 4772. The temporary restraining

Filipino citizens may organize a security or watchman agency:

competition and combinations in restraint of trade.

order dated December 11, 1986, is LIFTED.

Provided, That no person shall organize or have aninterest in,

In G.R. No. 79470, the petition is GRANTED and Civil Case

No. 829-R(298) is DISMISSED.

nature,
provisions

it

allegedly
against

violates

legal

monopolies,

and
unfair

those which are

On May 12, 1986, a Memorandum of Agreement was executed

alreadyexisting at the promulgation of this Decree: x x x. (As

by PADPAO and the PC Chief, which fixed the minimum

amended by P.D. Nos. 11 and 100.)

monthly contract rate per guard for eight (8) hours of security

more than one such agency except

2.

in

service per day at P2,255.00 within Metro Manila and

3.

In G.R. No. 80018, the petition is GRANTED and Civil Case

P2,215.00 outside of Metro Manila.

Yes. The State may not be sued without its consent

in this case, were performed by them as part of their official

On June 29, 1987, Odin Security Agency (Odin) filed a

(Article XVI, Section 3, of the 1987 Constitution). Invoking this

duties, without malice, gross negligence, or bad faith, no

complaint

cut-throat

rule, the PC Chief and PC-SUSIA contend that, being

recovery may be had against them in their private capacities.

competition by undercutting its contract rate for security

instrumentalities of the national government exercising a

services rendered to the Metropolitan Waterworks and

primarily governmental function of regulating the organization

The correct test for the application of state immunity is not

Sewerage System (MWSS), charging said customer lower than

and operation of private detective, watchmen, or security

the conclusion of a contract by the State but the legal nature

the standard minimum rates provided in the Memorandum of

guard agencies, said official (the PC Chief) and agency (PC-

of the act.

Agreement dated May 12, 1986.

SUSIA) may not be sued without the Governments consent,

with

PADPAO

accusing

VMPSI

of

especially in this case because VMPSIs complaint seeks not

The restrictive application of State immunity is proper only

PADPAO found VMPSI guilty of cut-throat competition, hence,

only to compel the public respondents to act in a certain way,

when the proceedings arise out of commercial transactions of

the PADPAO Committee on Discipline recommended the

but worse, because VMPSI seeks actual and compensatory

the foreign sovereign, its commercial activities or economic

expulsion of VMPSI from PADPAO and the cancellation of its

damages in the sum of P1,000,000.00, exemplary damages in

affairs. Stated differently, a State may be said to have

license to operate a security agency (Annex D, Petition).

the same amount, and P200,000.00 as attorneys fees from

descended to the level of an individual and can thus be

said public respondents. Even if its action prospers, the

deemed to have tacitly given its consent to be sued only when

The PC-SUSIA made similar findings and likewise recommended

payment of its monetary claims may not be enforced because

it enters into a business contract. It does not apply where the

the cancellation of VMPSIs license.

the State did not consent to appropriate the necessary funds

contract relates to the exercise of its sovereign functions.

for that purpose.

As a result, PADPAO refused to issue a clearance/certificate of
membership to VMPSI when it requested one.

In the instant case, the Memorandum of Agreement entered

While the doctrine of state immunity appears to prohibit only

into

suits against the state without its consent, it is also applicable

professionalize the industry and to standardize the salaries of

VMPSI wrote the PC Chief on March 10, 1988, requesting him to

to complaints filed against officials of the state for acts

security guards as well as the current rates of security

set aside or disregard the findings of PADPAO and consider

allegedly performed by them in the discharge of their duties.

services, clearly, a governmental function. The execution of

VMPSIs application for renewal of its license, even without a

The rule is that if the judgment against such officials will

the said agreement is incidental to the purpose of R.A.5487, as

certificate of membership from PADPAO

require the state itself to perform an affirmative act to satisfy

amended, which is to regulate the organization and operation

the same, such as the appropriation of the amount needed to

of private detective, watchmen or security guard agencies.

Issue:

PC

Chief

regarded as against the state itself although it has not been

Republic of the Philippines

formally impleaded.

SUPREME COURT

Chief and PC-SUSIA is a suit against the State without its

Held:

the

and

PADPAO

was

intended

pay the damages awarded against them, the suit must be

whether or not VMPSIs complaint against the PC

consent

by

Manila
A public official may sometimes be held liable in his personal

EN BANC

or private capacity if he acts in bad faith, or beyond the scope

G.R. No. L-23139

of his authority or jurisdiction, however, since the acts for

MOBIL PHILIPPINES EXPLORATION, INC., plaintiff-appellant,

which the PC Chief and PC-SUSIA are being called to account

December 17, 1966

to

vs. CUSTOMS ARRASTRE SERVICE and BUREAU of CUSTOMS,

Appellant contends that not all government entities are

Stated differently, it is argued that while there is no law

defendants-appellees.

immune from suit; that defendant Bureau of Customs as

expressly authorizing the Bureau of Customs to sue or be sued,

operator of the arrastre service at the Port of Manila, is

still its capacity to be sued is implied from its very power to

discharging proprietary functions and as such, can be sued by

render arrastre service at the Port of Manila, which it is

private individuals.

alleged, amounts to the transaction of a private business.

The Rules of Court, in Section 1, Rule 3, provide:

The statutory provision on arrastre service is found in Section

BENGZON, J.P., J.:

Four cases of rotary drill parts were shipped from abroad on

S.S. "Leoville" sometime in November of 1962, consigned to
Mobil Philippines Exploration, Inc., Manila. The shipment

1213 of Republic Act 1937 (Tariff and Customs Code, effective

arrived at the Port of Manila on April 10, 1963, and was

SECTION 1.

Who may be parties.Only natural or juridical

discharged to the custody of the Customs Arrastre Service, the

persons or entities authorized by law may be parties in a civil

unit of the Bureau of Customs then handling arrastre

action.

operations therein. The Customs Arrastre Service later

June 1, 1957), and it states:

SEC. 1213. Receiving, Handling, Custody and Delivery of

Articles.The

Bureau

of

Customs

shall

have

exclusive

delivered to the broker of the consignee three cases only of

Accordingly, a defendant in a civil suit must be (1) a natural

supervision and control over the receiving, handling, custody

the shipment.

person; (2) a juridical person or (3) an entity authorized by

and delivery of articles on the wharves and piers at all ports of

law to be sued. Neither the Bureau of Customs nor (a fortiori)

entry and in the exercise of its functions it is hereby

On April 4, 1964 Mobil Philippines Exploration, Inc., filed suit

its function unit, the Customs Arrastre Service, is a person.

authorized to acquire, take over, operate and superintend such

in the Court of First Instance of Manila against the Customs

They are merely parts of the machinery of Government. The

plants and facilities as may be necessary for the receiving,

Arrastre Service and the Bureau of Customs to recover the

Bureau of Customs is a bureau under the Department of

handling,

value of the undelivered case in the amount of P18,493.37 plus

Finance (Sec. 81, Revised Administrative Code); and as stated,

convenience and comfort of passengers and the handling of

other damages.

the Customs Arrastre Service is a unit of the Bureau of Custom,

baggage; as well as to acquire fire protection equipment for

set up under Customs Administrative Order No. 8-62 of

use in the piers: Provided, That whenever in his judgment the

On April 20, 1964 the defendants filed a motion to dismiss the

November 9, 1962 (Annex "A" to Motion to Dismiss, pp. 13-15,

receiving, handling, custody and delivery of articles can be

complaint on the ground that not being persons under the law,

Record an Appeal). It follows that the defendants herein

carried on by private parties with greater efficiency, the

defendants cannot be sued.

cannot he sued under the first two abovementioned categories

Commissioner may, after public bidding and subject to the

of natural or juridical persons.

approval of the department head, contract with any private

After plaintiff opposed the motion, the court, on April 25,

custody

and

delivery

of

articles,

and

the

party for the service of receiving, handling, custody and

1964, dismissed the complaint on the ground that neither the

Nonetheless it is urged that by authorizing the Bureau of

delivery of articles, and in such event, the contract may

Customs Arrastre Service nor the Bureau of Customs is suable.

Customs to engage in arrastre service, the law thereby

include the sale or lease of government-owned equipment and

Plaintiff appealed to Us from the order of dismissal.

impliedly authorizes it to be sued as arrastre operator, for the

facilities used in such service.

reason that the nature of this function (arrastre service) is

Raised, therefore, in this appeal is the purely legal question of

proprietary, not governmental. Thus, insofar as arrastre

In Associated Workers Union, et al. vs. Bureau of Customs, et

the defendants' suability under the facts stated.

operation is concerned, appellant would put defendants under

al., L-21397, resolution of August 6, 1963, this Court indeed

the third category of "entities authorized by law" to be sued.

held "that the foregoing statutory provisions authorizing the

grant by contract to any private party of the right to render

Employees Association, et al., L-15751, January 28, 1961:

said arrastre services necessarily imply that the same is

(Sec. 1, Rule 3, Rules of Court.) Any suit, action or proceeding

against it, if it were to produce any effect, would actually be a

deemed by Congress to be proprietary or non-governmental

The Bureau of Printing is an office of the Government created

suit, action or proceeding against the Government itself, and

function." The issue in said case, however, was whether

by the Administrative Code of 1916 (Act No. 2657). As such

the rule is settled that the Government cannot be sued

laborers engaged in arrastre service fall under the concept of

instrumentality of the Government, it operates under the

without its consent, much less over its objection. (See Metran

employees in the Government employed in governmental

direct supervision of the Executive Secretary, Office of the

vs. Paredes, 45 Off. Gaz. 2835; Angat River Irrigation System,

functions for purposes of the prohibition in Section 11,

President, and is "charged with the execution of all printing

et al. vs. Angat River Workers Union, et al., G.R. Nos. L-10943-

Republic Act 875 to the effect that "employees in the

and binding, including work incidental to those processes,

44, December 28, 1957.)

Government . . . shall not strike," but "may belong to any labor

required by the National Government and such other work of

organization which does not impose the obligation to strike or

the same character as said Bureau may, by law or by order of

The situation here is not materially different. The Bureau of

to join in strike," which prohibition "shall apply only to

the (Secretary of Finance) Executive Secretary, be authorized

Customs, to repeat, is part of the Department of Finance (Sec.

employees employed in governmental functions of the

to undertake . . . ." (Sec. 1644, Rev. Adm. Code.) It has no

81, Rev. Adm. Code), with no personality of its own apart from

Government . . . .

corporate existence, and its appropriations are provided for in

that of the national government. Its primary function is

the General Appropriations Act. Designed to meet the printing

governmental, that of assessing and collecting lawful revenues

Thus, the ruling therein was that the Court of Industrial

needs of the Government, it is primarily a service bureau and,

from imported articles and all other tariff and customs duties,

Relations had jurisdiction over the subject matter of the case,

obviously, not engaged in business or occupation for pecuniary

fees, charges, fines and penalties (Sec. 602, R.A. 1937). To this

but not that the Bureau of Customs can be sued. Said issue of

profit.

function, arrastre service is a necessary incident. For practical

suability was not resolved, the resolution stating only that "the
issue on the personality or lack of personality of the Bureau of

reasons said revenues and customs duties can not be assessed

xxx

xxx

xxx

Customs to be sued does not affect the jurisdiction of the

and collected by simply receiving the importer's or ship agent's

or consignee's declaration of merchandise being imported and

lower court over the subject matter of the case, aside from

. . . Clearly, while the Bureau of Printing is allowed to

imposing the duty provided in the Tariff law. Customs

the fact that amendment may be made in the pleadings by the

undertake private printing jobs, it cannot be pretended that it

authorities and officers must see to it that the declaration

inclusion as respondents of the public officers deemed

is thereby an industrial or business concern. The additional

tallies with the merchandise actually landed. And this checking

responsible, for the unfair labor practice acts charged by

work it executes for private parties is merely incidental to its

up requires that the landed merchandise be hauled from the

petitioning Unions".

function, and although such work may be deemed proprietary

ship's side to a suitable place in the customs premises to

in character, there is no showing that the employees

enable said customs officers to make it, that is, it requires

Now, the fact that a non-corporate government entity

performing said proprietary function are separate and distinct

arrastre operations.1

performs a function proprietary in nature does not necessarily

from those emoloyed in its general governmental functions.

result in its being suable. If said non-governmental function is

undertaken as an incident to its governmental function, there

Clearly, therefore, although said arrastre function may be

xxx

xxx

xxx

is no waiver thereby of the sovereign immunity from suit

deemed proprietary, it is a necessary incident of the primary

and governmental function of the Bureau of Customs, so that

extended to such government entity. This is the doctrine

Indeed, as an office of the Government, without any corporate

engaging in the same does not necessarily render said Bureau

recognized in Bureau of Printing, et al. vs. Bureau of Printing

or juridical personality, the Bureau of Printing cannot be sued

liable to suit. For otherwise, it could not perform its

governmental function without necessarily exposing itself to

Castro, J., reserves his vote.

suit. Sovereign immunity, granted as to the end, should not be

Regardless of the merits of the claim against it, the State, for

denied as to the necessary means to that end.

obvious reasons of public policy, cannot be sued without its

Republic of the Philippines

consent. Plaintiff should have filed its present claim to the

SUPREME COURT

And herein lies the distinction between the present case and

General Auditing Office, it being for money under the

Manila

that of National Airports Corporation vs. Teodoro, 91 Phil. 203,

provisions of Commonwealth Act 327, which state the

EN BANC

on which appellant would rely. For there, the Civil Aeronautics

conditions under which money claims against the Government

G.R. No. L-15751

Administration was found have for its prime reason for

may be filed.

BUREAU OF PRINTING vs. THE BUREAU OF PRINTING

existence not a governmental but a proprietary function, so

that to it the latter was not a mere incidental function:

EMPLOYEES ASSOCIATION (NLU)

It must be remembered that statutory provisions waiving State
immunity from suit are strictly construed and that waiver of

Among

the

general

powers

of

the

Civil

Aeronautics

January 28, 1961

GUTIERREZ DAVID, J.:

immunity, being in derogation of sovereignty, will not be

Administration are, under Section 3, to execute contracts of

lightly

and

This is a petition for certiorari and prohibition with preliminary

any kind, to purchase property, and to grant concessions

Dependencies, Sec. 96, p. 314; Petty vs. Tennessee-Missouri

injunction to annul Certain orders of the respondent Court of

rights, and under Section 4, to charge landing fees, royalties

Bridge Com., 359 U.S. 275, 3 L. Ed. 804, 79 S. Ct. 785). From

Industrial Relations and to restrain it from further proceeding

on sales to aircraft of aviation gasoline, accessories and

the provision authorizing the Bureau of Customs to lease

in the action for unfair labor practice pending before it on the

supplies, and rentals for the use of any property under its

arrastre operations to private parties, We see no authority to

ground of lack of jurisdiction. Giving due course to the

management.

sue the said Bureau in the instances where it undertakes to

petition, this Court ordered the issuance of the writ of

conduct said operation itself. The Bureau of Customs, acting as

preliminary injunction prayed for without bond.

These

upon

the

Civil

Am.

Jur.,

States,

Territories

part of the machinery of the national government in the

Administration, in our opinion, the power to sue and be sued.

operation of the arrastre service, pursuant to express

The action in question was upon complaint of the

The power to sue and be sued is implied from the power to

legislative mandate and as a necessary incident of its prime

respondents Bureau of Printing Employees Association (NLU)

transact private business. . . .

governmental function, is immune from suit, there being no

Pacifico Advincula, Roberto Mendoza, Ponciano Arganda and

statute to the contrary.

Teodulo Toleran filed by an acting prosecutor of the

xxx

confer

(49

Aeronautics

xxx

provisions

inferred.

xxx

The Civil Aeronautics Administration comes under the category

Industrial Court against herein petitioner Bureau of Printing,

WHEREFORE, the order of dismissal appealed from is hereby

Serafin Salvador, the Acting Secretary of the Department of

affirmed, with costs against appellant. So ordered.

General Services, and Mariano Ledesma the Director of the

of a private entity. Although not a body corporate it was

Bureau of Printing. The complaint alleged that Serafin Salvador

created, like the National Airports Corporation, not to

Concepcion, C.J., Reyes, J.B.L., Barrera, Dizon, Regala,

and Mariano Ledesma have been engaging in unfair labor

maintain a necessary function of government, but to run what

Zaldivar and Sanchez, JJ., concur.

practices by interfering with, or coercing the employees of the

is essentially a business, even if revenues be not its prime

objective but rather the promotion of travel and the
convenience of the travelling public. . . .

Bureau of Printing particularly the members of the complaining

Makalintal, J., concurs in the result.

association petition, in the exercise of their right to self-

organization an discriminating in regard to hire and tenure of

The Bureau of Printing is an office of the Government created

with the approval of the Department Head" (sec. 1655, id.). As

their employment in order to discourage them from pursuing

by the Administrative Code of 1916 (Act No. 2657). As such

shown by the uncontradicted evidence of the petitioners, most

the union activities.

instrumentality of the Government, it operates under the

of these works consist of orders for greeting cards during

direct supervision of the Executive Secretary, Office of the

Christmas from government officials, and for printing of checks

Answering the complaint, the petitioners Bureau of Printing,

President, and is "charged with the execution of all printing

of private banking institutions. On those greeting cards, the

Serafin Salvador and Mariano Ledesma denied the charges of

and binding, including work incidental to those processes,

Government seal, of which only the Bureau of Printing is

unfair labor practices attributed to the and, by way of

required by the National Government and such other work of

authorized to use, is embossed, and on the bank cheeks, only

affirmative defenses, alleged, among other things, that

the same character as said Bureau may, by law or by order of

the Bureau of Printing can print the reproduction of the

respondents Pacifico Advincula, Roberto Mendoza Ponciano

the (Secretary of Finance) Executive Secretary, be authorized

official documentary stamps appearing thereon. The volume of

Arganda and Teodulo Toleran were suspended pending result of

to undertake . . .." (See. 1644, Rev. Adm. Code). It has no

private jobs done, in comparison with government jobs, is only

an administrative investigation against them for breach of Civil

corporate existence, and its appropriations are provided for in

one-half of 1 per cent, and in computing the costs for work

Service rules and regulations petitions; that the Bureau of

the General Appropriations Act. Designed to meet the printing

done for private parties, the Bureau does not include profit

Printing has no juridical personality to sue and be sued; that

needs of the Government, it is primarily a service bureau and

because it is not allowed to make any. Clearly, while the

said Bureau of Printing is not an industrial concern engaged for

obviously, not engaged in business or occupation for pecuniary

Bureau of Printing is allowed to undertake private printing

the purpose of gain but is an agency of the Republic

profit.

jobs, it cannot be pretended that it is thereby an industrial or

performing government functions. For relief, they prayed that

business concern. The additional work it executes for private

the case be dismissed for lack of jurisdiction. Thereafter,

It is true, as stated in the order complained of, that the

parties is merely incidental to its function, and although such

before the case could be heard, petitioners filed an "Omnibus

Bureau of Printing receives outside jobs and that many of its

work may be deemed proprietary in character, there is no

Motion" asking for a preliminary hearing on the question of

employees are paid for overtime work on regular working days

showing that the employees performing said proprietary

jurisdiction raised by them in their answer and for suspension

and on holidays, but these facts do not justify the conclusion

function are separate and distinct from those employed in its

of the trial of the case on the merits pending the

that its functions are "exclusively proprietary in nature."

general governmental functions.

determination of such jurisdictional question. The motion was

Overtime work in the Bureau of Printing is done only when the

granted, but after hearing, the trial judge of the Industrial

interest of the service so requires (sec. 566, Rev. Adm. Code).

From what has been stated, it is obvious that the Court of

Court in an order dated January 27, 1959 sustained the

As

overtime

Industrial Relations did not acquire jurisdiction over the

jurisdiction of the court on the theory that the functions of

compensation may be paid, but such payment is discretionary

respondent Bureau of Printing, and is thus devoid of any

the Bureau of Printing are "exclusively proprietary in nature,"

with the head of the Bureau depending upon its current

authority to take cognizance of the case. This Court has

and,

dismissal.

appropriations, so that it cannot be the basis for holding that

already held in a long line of decisions that the Industrial Court

Reconsideration of this order having been also denied by the

the functions of said Bureau are wholly proprietary in

has no jurisdiction to hear and determine the complaint for

court in banc, the petitioners brought the case to this Court

character. Anent the additional work it executes for private

unfair labor practice filed against institutions or corporations

through the present petition for certiorari and prohibition.

persons, we find that such work is done upon request, as

not organized for profit and, consequently, not an industrial or

distinguished

the

business organization. This is so because the Industrial Peace

requirements of Government work will permit" (sec. 1654, Rev.

Act was intended to apply only to industrial employment, and

Adm. Code), and "upon terms fixed by the Director of Printing,

to govern the relations between employers engaged in industry

consequently,

denied

the

We find the petition to be meritorious.

prayer

for

matter

of

from

administrative

those

policy,

solicited,

and

the

only

"as

and occupations for purposes of gain, and their industrial

the discharge of such functions by said officials. WHEREFORE,

COURT OF FIRST INSTANCE OF BULACAN, BRANCH V, STA.

employees. (University of the Philippines, et al. vs. CIR, et al.,

the petition for a writ of prohibition is granted. The orders

MARIA, and NATIONAL POWER CORPORATION, respondents.

G.R. No. L-15416, April 28, 1960; University of Sto. Tomas vs.

complained of are set aside and the complaint for unfair labor

Villanueva, et al., G.R. No. L-13748, October 30, 1959; La

practice against the petitioners is dismissed, with costs against

Consolacion College vs. CIR, G.R. No. L-13282, April 22, 1960;

respondents other than the respondent court.

See also the cases cited therein.) .

ABAD SANTOS, J.:

Republic of the Philippines

Indeed, as an office of the Government, without any corporate

SUPREME COURT

The relevant antecedents of this case are narrated in the

or juridical personality, the Bureau of Printing cannot be sued.

Manila

petition and have not been controverted, namely:

(Sec. 1, Rule 3, Rules of Court). Any suit, action or proceeding

SECOND DIVISION

against it, if it were to produce any effect, would actually be a

G.R. No. L-55273-83 December 19, 1981

3.

suit, action or proceeding against the Government itself, and

of

At about midnight on October 26, 1978, during the height

that

infamous

typhoon

"KADING"

the

respondent

the rule is settled that the Government cannot be sued

GAUDENCIO RAYO, BIENVINIDO PASCUAL, TOMAS MANUEL,

corporation, acting through its plant superintendent, Benjamin

without its consent, much less over its objection. (See Metran

MARIANO CRUZ, PEDRO BARTOLOME, BERNARDINO CRUZ

Chavez, opened or caused to be opened simultaneously all the

vs. Paredes, 45 Off. Gaz. 2835; Angat River Irrigation System,

JOSE PALAD , LUCIO FAJARDO, FRANCISCO RAYOS, ANGEL

three floodgates of the Angat Dam. And as a direct and

et al. vs. Angat River Workers' Union, et. al., G.R. Nos. L-

TORRES, NORBERTO TORRES, RODELIO JOAQUIN, PEDRO

immediate result of the sudden, precipitate and simultaneous

10943-44, December 28, 1957).

AQUINO, APOLINARIO BARTOLOME, MAMERTO BERNARDO,

opening of said floodgates several towns in Bulacan were

CIRIACO CASTILLO, GREGORIO CRUZ, SIMEON ESTRELLA,

inundated. Hardest-hit was Norzagaray. About a hundred of its

The record also discloses that the instant case arose from the

EPIFANIO

JUAN

residents died or were reported to have died and properties

filing of administrative charges against some officers of the

SANTOS,

BERNABE,

worth million of pesos destroyed or washed away. This flood

respondent Bureau of Printing Employees' Association by the

BUENAVENTURA CRUZ, ANTONIO MENESES, ROMAN SAN

Acting Secretary of General Services. Said administrative

PEDRO, LOPEZ ESPINOSA, GODOFREDO PUNZAL, JULIANA

charges are for insubordination, grave misconduct and acts

GARCIA,

prejudicial to public service committed by inciting the

CARLOS CORREA, REYNALDO CASIMIRO, ANTONIO GENER,

victims of that man-caused flood, filed with the respondent

employees, of the Bureau of Printing to walk out of their jobs

GAUDENCIO CASTILLO, MATIAS PEREZ, CRISPINIANO TORRES,

Court eleven complaints for damages against the respondent

against the order of the duly constituted officials. Under the

CRESENCIO CRUZ, PROTACIO BERNABE, MARIANO ANDRES,

corporation and the plant superintendent of Angat Dam,

law, the Heads of Departments and Bureaus are authorized to

CRISOSTOMO CRUZ, MARCOS EUSTAQUIO, PABLO LEGASPI,

Benjamin Chavez, docketed as Civil Cases Nos. SM-950 951,

institute and investigate administrative charges against erring

VICENTE PASCUAL, ALEJANDRA SISON, EUFRACIO TORRES,

953, 958, 959, 964, 965, 966, 981, 982 and 983. These

subordinates. For the Industrial Court now to take cognizance

ROGELIO BARTOLOME, RODOLFO BERNARDO, APOLONIO

complaints though separately filed have a common/similar

of the case filed before it, which is in effect a review of the

CASTILLO,

cause of action. ...

acts of executive officials having to do with the discipline of

LORENZO LUCIANO and GREGORIO PALAD, petitioners,

government employees under them, would be to interfere with

vs.

MARCELO,

HERMOGENES

ELIZABETH

LEBERATO

ABAN,

SARMIENTO,

MARCELINO

SAN

PEDRO,

MARCELINA

INOCENCIO

DALMACIO,

EUTIQUIO

DE

LEON,

LEGASPI,

was unprecedented in Norzagaray.

4.

5.

Petitioners, who were among the many unfortunate

Respondent corporation filed separate answers to each of

these eleven complaints. Apart from traversing the material

averments in the complaints and setting forth counterclaims

Under consideration is a motion to dismiss embodied as a

115.) Petitioners filed their memorandum on July 22, 1981.

for damages respondent corporation invoked in each answer a

special affirmative defense in the answer filed by defendant

(Rollo, pp. 118-125.) The Solicitor General filed a number of

special and affirmative defense that "in the operation of the

NPC on the grounds that said defendant performs a purely

motions for extension of time to file his memorandum. We

Angat Dam," it is "performing a purely governmental function",

governmental function in the operation of the Angat Dam and

granted the seventh extension with a warning that there would

hence it "can not be sued without the express consent of the

cannot therefore be sued for damages in the instant cases in

be no further extension. Despite the warning the Solicitor

State." ...

connection therewith.

General moved for an eighth extension which We denied on

November 9, 1981. A motion for a ninth extension was similarly

6.

On motion of the respondent corporation a preliminary

Plaintiffs' opposition to said motion to discuss, relying on Sec.

denied on November 18, 1981. The decision in this case is

hearing was held on its affirmative defense as though a motion

3 (d) of Republic Act 6396 which imposes on the NPC the power

therefore, without the memorandum of the Solicitor General.

to dismiss were filed. Petitioners opposed the prayer for

and liability to sue and be sued in any court, is not tenable

dismissal and contended that respondent corporation is

since the same refer to such matters only as are within the

The parties are agreed that the Order dated December 21,

performing not governmental but merely proprietary functions

scope of the other corporate powers of said defendant and not

1979, raises the following issues:

and that under its own organic act, Section 3 (d) of Republic

matters of tort as in the instant cases. It being an agency

Act No. 6395, it can sue and be sued in any court. ...

performing a purely governmental function in the operation of

1.

the Angat Dam, said defendant was not given any right to

performs a governmental function with respect to the

commit wrongs upon individuals. To sue said defendant for tort

management and operation of the Angat Dam; and

7.

On July 29, 1980 petitioners received a copy of the

questioned order of the respondent Court dated December 21,

Whether

respondent

National

Power

Corporation

may require the express consent of the State.

1979 dismissing all their complaints as against the respondent

2.

Whether the power of respondent National Power

corporation thereby leaving the superintendent of the Angat

WHEREFORE, the cases against defendant NPC are hereby

Corporation to sue and be sued under its organic charter

Dam, Benjamin Chavez, as the sole party-defendant. ...

dismissed. (Rollo, p. 60.)

includes the power to be sued for tort.

8.

On August 7, 1980 petitioners filed with the respondent

The Order dated October 3, 1980, denying the motion for

The petition is highly impressed with merit.

Court a motion for reconsideration of the questioned order of

reconsideration filed by the plaintiffs is pro forma; the motion

dismissal. ...

was simply denied for lack of merit. (Rollo, p. 74.)

It is not necessary to write an extended dissertation on

whether or not the NPC performs a governmental function with

9.

The respondent Court denied petitioners' motion for

The petition to review the two orders of the public respondent

respect to the management and operation of the Angat Dam. It

reconsideration in its order dated October 3, 1980. ... Hence,

was filed on October 16, 1980, and on October 27, 1980, We

is sufficient to say that the government has organized a

the present petition for review on certiorari under Republic

required the respondents to comment. It was only on April 13,

private corporation, put money in it and has allowed it to sue

Act No. 5440. (Rollo, pp. 3-6.)

1981, after a number of extensions, that the Solicitor General

and be sued in any court under its charter. (R.A. No. 6395,

filed the required comment. (Rollo, pp. 107-114.)

Sec.

The Order of dismissal dated December 12, 1979, reads as

follows:

(d).) As

government

owned

and

controlled

corporation, it has a personality of its own, distinct and

On May 27, 1980, We required the parties to file simultaneous

separate from that of the Government. (See National Shipyards

memoranda within twenty (20) days from notice. (Rollo, p.

and Steel Corp. vs. CIR, et al., L-17874, August 31, 1963, 8

SCRA 781.) Moreover, the charter provision that the NPC can

Association, Inc.

notice of garnishment for the full amount mentioned in such

"sue and be sued in any court" is without qualification on the

writ of execution in the sum of P12,724,66. 8 In view of the

cause of action and accordingly it can include a tort claim such

Virgilio C. Abejo for respondent Phil. Virginia Tobacco

objection, however, by petitioner Philippine National Bank on

as the one instituted by the petitioners.

Administration.

the above ground, coupled with an inquiry as to whether or

not respondent Philippine Virginia Tobacco Administration had

WHEREFORE, the petition is hereby granted; the Orders of the

funds deposited with petitioner's La Union branch, it was not

respondent court dated December 12, 1979 and October 3,

until January 25, 1971 that the order sought to be set aside in

1980, are set aside; and said court is ordered to reinstate the

FERNANDO, Acting C.J.:

this certiorari proceeding was issued by respondent Judge. 9

complaints of the petitioners. Costs against the NPC.

Its dispositive portion reads as follows: Conformably with the

The reliance of petitioner Philippine National Bank in this

foregoing, it is now ordered, in accordance with law, that

certiorari and prohibition proceeding against respondent Judge

sufficient

Javier Pabalan who issued a writ of execution, 1 followed

Administration now deposited with the Philippine National

thereafter by a notice of garnishment of the funds of

Bank, La Union Branch, shall be garnished and delivered to the

Republic of the Philippines

respondent Philippine Virginia Tobacco Administration, 2

plaintiff immediately to satisfy the Writ of Execution for one-

SUPREME COURT

deposited with it, is on the fundamental constitutional law

half of the amount awarded in the decision of November 16,

Manila

doctrine of non-suability of a state, it being alleged that such

1970." 10 Hence this certiorari and prohibition proceeding.

SO ORDERED.

funds

of

the

Philippine

Virginia

Tobacco

funds are public in character. This is not the first time

SECOND DIVISION

petitioner raised that issue. It did so before in Philippine

As noted at the outset, petitioner Philippine National Bank

National Bank v. Court of industrial Relations, 3 decided only

would invoke the doctrine of non-suability. It is to be admitted

last January. It did not meet with success, this Court ruling in

that under the present Constitution, what was formerly

accordance with the two previous cases of National Shipyard

implicit as a fundamental doctrine in constitutional law has

PHILIPPINE NATIONAL BANK, petitioner,

and

Employees

been set forth in express terms: "The State may not be sued

vs.

Association v. Manila Hotel Company, 5 that funds of public

without its consent." 11 If the funds appertained to one of the

HON. JUDGE JAVIER PABALAN, Judge of the Court of First

corporations which can sue and be sued were not exempt from

regular departments or offices in the government, then,

Instance, Branch III, La Union, AGOO TOBACCO PLANTERS

garnishment.

Tobacco

certainly, such a provision would be a bar to garnishment. Such

ASSOCIATION,

TOBACCO

Administration is likewise a public corporation possessed of the

is not the case here. Garnishment would lie. Only last January,

ADMINISTRATION, and PANFILO P. JIMENEZ, Deputy Sheriff, La

same attributes, 6 a similar outcome is indicated. This petition

as noted in the opening paragraph of this decision, this Court,

Union, respondents.

must be dismissed.

in a case brought by the same petitioner precisely invoking

G.R. No. L-33112

June 15, 1978

INC.,

PHILIPPINE

VIRGINIA

Steel

Corporation

As

and

respondent

Manila

Philippine

Hotel

Virginia

such a doctrine, left no doubt that the funds of public

Conrado E. Medina, Edgardo M. Magtalas & Walfrido Climaco

It is undisputed that the judgment against respondent

corporations could properly be made the object of a notice of

for petitioner.

Philippine Virginia Tobacco Administration had reached the

garnishment. Accordingly, this petition must fail.

stage of finality. A writ of execution was, therefore, in order. It

Felimon A. Aspirin fit respondent Agoo 'Tobacco Planters

was accordingly issued on December 17, 1970. 7 There was a

1.

The alleged grave abuse of discretion, the basis of this

certiorari proceeding, was sought to be justified on the failure

1941. 13 In the language of its ponente Justice Ozaeta "On the

vs.

of respondent Judge to set aside the notice of garnishment of

other hand, it is well-settled that when the government enters

THE

funds belonging to respondent Philippine Virginia Tobacco

into commercial business, it abandons its sovereign capacity

respondents.

Administration. This excerpt from the aforecited decision of

and is to be treated like any other corporation. (Bank of the

Philippine National Bank v. Court of Industrial Relations makes

United States v. Planters' Bank, 9 Wheat. 904, 6 L.ed. 244). By

manifest why such an argument is far from persuasive. "The

engaging in a particular business thru the instrumentality of a

premise that the funds could be spoken as public character

corporation, the government divests itself pro hac vice of its

may be accepted in the sense that the People Homesite and

sovereign character, so as to render the corporation subject to

Housing Corporation was a government-owned entity. It does

the rules of law governing private corporations." 14 It is worth

not follow though that they were exempt. from garnishment.

mentioning that Justice Ozaeta could find support for such a

National Shipyard and Steel Corporation v. Court of Industrial

pronouncement from the leading American Supreme Court case

For consideration are the incidents that flow from the familiar

Relations is squarely in point. As was explicitly stated in the

of united States v. Planters' Bank, 15 with the opinion coming

doctrine of non-suability of the state.

opinion of the then Justice, later Chief Justice, Concepcion:

from the illustrious Chief Justice Marshall. It was handed down

"The allegation to the effect that the funds of the NASSCO are

more than one hundred fifty years ago, 1824 to be exact. It is

In this petition for certiorari, the Department of Agriculture

public funds of the government, and that, as such, the same

apparent, therefore, that petitioner Bank could it legally set

seeks to nullify the Resolution, 1 dated 27 November 1991, of

may not be garnished, attached or levied upon, is untenable

forth as a bar or impediment to a notice of garnishment the

the National Labor Relations Commission (NLRC), Fifth

for, as a government owned and controlled corporation, the

doctrine of non-suability.

Division, Cagayan de Oro City, denying the petition for

NASSCO has a personality of its own. distinct and separate

NATIONAL

LABOR

RELATIONS

COMMISSION,

et

al.,

Roy Lago Salcedo for private respondents.

VITUG, J.:

injunction, prohibition and mandamus that prays to enjoin

from that of the Government. It has pursuant to Section 2 of

WHEREFORE, this petition for certiorari and prohibition is

permanently the NLRC's Regional Arbitration Branch X and

Executive Order No. 356, dated October 23, 1950 ... , pursuant

dismissed. No costs.

Cagayan de Oro City Sheriff from enforcing the decision 2 of 31

to which The NASSCO has been established all the powers of

May 1991 of the Executive Labor Arbiter and from attaching

a corporation under the Corporation Law ... ." Accordingly, it

and executing on petitioner's property.

may be sue and be sued and may be subjected to court

Republic of the Philippines

processes just like any other corporation (Section 13, Act No.

SUPREME COURT

The Department of Agriculture (herein petitioner) and Sultan

1459, as amended.)" ... To repeat, the ruling was the

Manila

Security Agency entered into a contract 3 on 01 April 1989 for

appropriate remedy for the prevailing party which could

proceed against the funds of a corporate entity even if owned

security services to be provided by the latter to the said

THIRD DIVISION

or controlled by the government." 12

governmental entity. Save for the increase in the monthly rate

of the guards, the same terms and conditions were also made
to apply to another contract, dated 01 May 1990, between the

2.

The National Shipyard and Steel Corporation decision was

not the first of its kind. The ruling therein could be inferred

same parties. Pursuant to their arrangements, guards were

G.R. No. 104269 November 11, 1993

from the judgment announced in Manila Hotel Employees

Association v. Manila Hotel Company, decided as far back as

deployed by Sultan Agency in the various premises of the

petitioner.

DEPARTMENT OF AGRICULTURE, petitioner,

On 13 September 1990, several guards of the Sultan Security

acquired jurisdiction over the petitioner, and that, therefore,

of the total monetary award issued by a reputable bonding

Agency filed a complaint for underpayment of wages, non-

the decision of the Labor Arbiter was null and void and all

company duly accredited by the Supreme Court or by the

payment of 13th month pay, uniform allowances, night shift

actions pursuant thereto should be deemed equally invalid and

Regional Trial Court of Misamis Oriental to answer for the

differential pay, holiday pay and overtime pay, as well as for

of no legal, effect. The petitioner also pointed out that the

satisfaction of the money claims in case of failure or default

damages, 4 before the Regional Arbitration Branch X of

attachment or seizure of its property would hamper and

on the part of petitioner to satisfy the money claims;

Cagayan de Oro City, docketed as NLRC Case No. 10-09-00455-

jeopardize

90 (or 10-10-00519-90, its original docket number), against the

prejudice of the public good.

petitioner's

governmental

functions

to

the

Department of Agriculture and Sultan Security Agency.

The Executive Labor Arbiter rendered a decision on 31 May

4.

The City Sheriff is ordered to immediately release the

properties of petitioner levied on execution within ten (10)

On 27 November 1991, the NLRC promulgated its assailed

days from notice of the posting of sufficient surety or

resolution; viz:

supersedeas bond as specified above. In the meanwhile,

finding herein petitioner and jointly and severally liable with

petitioner is assessed to pay the costs and/or expenses

Sultan Security Agency for the payment of money claims,

WHEREFORE, premises considered, the following orders are

incurred by the City Sheriff, if any, in connection with the

aggregating P266,483.91, of the complainant security guards.

issued:

execution of the judgments in the above-stated cases upon

The petitioner and Sultan Security Agency did not appeal the

presentation of the appropriate claims or vouchers and

decision of the Labor Arbiter. Thus, the decision became final

1.

The enforcement and execution of the judgments against

receipts by the city Sheriff, subject to the conditions specified

and executory.

petitioner in NLRC RABX Cases Nos. 10-10-00455-90; 10-10-

in the NLRC Sheriff, subject to the conditions specified in the

0481-90 and 10-10-00519-90 are temporarily suspended for a

NLRC Manual of Instructions for Sheriffs;

On 18 July 1991, the Labor Arbiter issued a writ of execution.

period of two (2) months, more or less, but not extending

5 commanding the City Sheriff to enforce and execute the

beyond the last quarter of calendar year 1991 to enable

5.

judgment against the property of the two respondents.

petitioner to source and raise funds to satisfy the judgment

reimbursement against each other for any payments made in

Forthwith, or on 19 July 1991, the City Sheriff levied on

awards against it;

connection with the satisfaction of the judgments herein is

execution the motor vehicles of the petitioner, i.e. one (1)

The right of any of the judgment debtors to claim

hereby recognized pursuant to the ruling in the Eagle Security

unit Toyota Hi-Ace, one (1) unit Toyota Mini Cruiser, and one

2.

Meantime, petitioner is ordered and directed to source

case, (supra). In case of dispute between the judgment

(1) unit Toyota Crown. 6 These units were put under the

for funds within the period above-stated and to deposit the

debtors, the Executive Labor Arbiter of the Branch of origin

custody of Zacharias Roa, the property custodian of the

sums of money equivalent to the aggregate amount. it has

may upon proper petition by any of the parties conduct

petitioner, pending their sale at public auction or the final

been adjudged to pay jointly and severally with respondent

arbitration proceedings for the purpose and thereby render his

settlement of the case, whichever would come first.

Sultan Security Agency with the Regional Arbitration Branch X,

decision after due notice and hearings;

Cagayan de Oro City within the same period for proper

A petition for injunction, prohibition and mandamus, with

dispositions;

prayer for preliminary writ of injunction was filed by the

7.

Finally, the petition for injunction is Dismissed for lack of

basis. The writ of preliminary injunction previously issued is

petitioner with the National Labor Relations Commission

3.

In order to ensure compliance with this order, petitioner

Lifted and Set Aside and in lieu thereof, a Temporary Stay of

(NLRC), Cagayan de Oro, alleging, inter alia, that the writ

is likewise directed to put up and post sufficient surety and

Execution is issued for a period of two (2) months but not

issued was effected without the Labor Arbiter having duly

supersedeas bond equivalent to at least to fifty (50%) percent

extending beyond the last quarter of calendar year 1991,

conditioned upon the posting of a surety or supersedeas bond

state the prerogative to defeat any legitimate claim against it

one which is executed in the exercise of its sovereign function

by petitioner within ten (10) days from notice pursuant to

by simply invoking its non-suability. 10 We have had occasion,

and another which is done in its proprietary capacity. 18

paragraph 3 of this disposition. The motion to admit the

to explain in its defense, however, that a continued adherence

complaint in intervention is Denied for lack of merit while the

to the doctrine of non-suability cannot be deplored, for the

In the Unites States of America vs. Ruiz, 19 where the

motion to dismiss the petition filed by Duty Sheriff is Noted

loss of governmental efficiency and the obstacle to the

questioned transaction dealt with improvements on the

performance of its multifarious functions would be far greater

wharves in the naval installation at Subic Bay, we held:

SO ORDERED.

in severity than the inconvenience that may be caused private

parties, if such fundamental principle is to be abandoned and

The traditional rule of immunity exempts a State from being

In this petition for certiorari, the petitioner charges the NLRC

the availability of judicial remedy is not to be accordingly

sued in the courts of another State without its consent or

with grave abuse of discretion for refusing to quash the writ of

restricted. 11

waiver. This rule is a necessary consequence of the principles

execution. The petitioner faults the NLRC for assuming

of independence and equality of States. However, the rules of

jurisdiction over a money claim against the Department,

The rule, in any case, is not really absolute for it does not say

International Law are not petrified; they are constantly

which, it claims, falls under the exclusive jurisdiction of the

that the state may not be sued under any circumstances. On

developing and evolving. And because the activities of states

Commission on Audit. More importantly, the petitioner asserts,

the contrary, as correctly phrased, the doctrine only conveys,

have multiplied, it has been necessary to distinguish them

the NLRC has disregarded the cardinal rule on the non-suability

"the state may not be sued without its consent;" its clear

between sovereign and governmental acts ( jure imperii) and

of the State.

import then is that the State may at times be sued. 12 The

private, commercial and proprietary act ( jure gestionisis). The

States' consent may be given expressly or impliedly. Express

result is that State immunity now extends only to acts jure

The private respondents, on the other hand, argue that the

consent may be made through a general law 13 or a special

imperii. The restrictive application of State immunity is now

petitioner has impliedly waived its immunity from suit by

law. 14 In this jurisdiction, the general law waiving the

the rule in the United States, the United Kingdom and other

concluding a service contract with Sultan Security Agency.

immunity of the state from suit is found in Act No. 3083,

states in Western Europe.

where the Philippine government "consents and submits to be

The basic postulate enshrined in the constitution that "(t)he

sued upon any money claims involving liability arising from

xxx xxx xxx

State may not be sued without its consent," 7 reflects nothing

contract, express or implied, which could serve as a basis of

less than a recognition of the sovereign character of the State

civil action between private parties." 15 Implied consent, on

The restrictive application of State immunity is proper only

and an express affirmation of the unwritten rule effectively

the other hand, is conceded when the State itself commences

when the proceedings arise out of commercial transactions of

insulating it from the jurisdiction of courts. 8 It is based on the

litigation, thus opening itself to a counterclaim 16 or when it

the foreign sovereign, its commercial activities or economic

very essence of sovereignty. As has been aptly observed, by

enters into a contract. 17 In this situation, the government is

affairs. Stated differently, a state may be said to have

Justice Holmes, a sovereign is exempt from suit, not because

deemed to have descended to the level of the other

descended to the level of an individual and can this be

of any formal conception or obsolete theory, but on the logical

contracting party and to have divested itself of its sovereign

deemed to have actually given its consent to be sued only

and practical ground that there can be no legal right as against

immunity. This rule, relied upon by the NLRC and the private

when it enters into business contracts. It does not apply where

the authority that makes the law on which the right depends.

respondents, is not, however, without qualification. Not all

the contracts relates to the exercise of its sovereign functions.

9 True, the doctrine, not too infrequently, is derisively called

contracts entered into by the government operate as a waiver

In this case the projects are an integral part of the naval base

"the royal prerogative of dishonesty" because it grants the

of its non-suability; distinction must still be made between

which is devoted to the defense of both the United States and

the Philippines, indisputably a function of the government of

between the provisions of C.A. No. 327 and the Labor Code

WHEREFORE, the petition is GRANTED. The resolution, dated

the highest order; they are not utilized for not dedicated to

with respect to money claims against the State. The Labor

27 November 1991, is hereby REVERSED and SET ASIDE. The

commercial or business purposes.

code, in relation to Act No. 3083, provides the legal basis for

writ of execution directed against the property of the

the State liability but the prosecution, enforcement or

Department of Agriculture is nullified, and the public

In the instant case, the Department of Agriculture has not

satisfaction thereof must still be pursued in accordance with

respondents are hereby enjoined permanently from doing,

pretended to have assumed a capacity apart from its being a

the rules and procedures laid down in C.A. No. 327, as

issuing and implementing any and all writs of execution issued

governmental entity when it entered into the questioned

amended by P.D. 1445.

pursuant to the decision rendered by the Labor Arbiter against

contract; nor that it could have, in fact, performed any act

proprietary in character.

said petitioner.
When the state gives its consent to be sued, it does thereby
necessarily consent to unrestrained execution against it.

SO ORDERED.

But, be that as it may, the claims of private respondents, i.e.

tersely put, when the State waives its immunity, all it does, in

for underpayment of wages, holiday pay, overtime pay and

effect, is to give the other party an opportunity to prove, if it

similar other items, arising from the Contract for Service,

can, that the State has a liability. 21 In Republic vs. Villasor 22

Republic of the Philippines

clearly constitute money claims. Act No. 3083, aforecited,

this Court, in nullifying the issuance of an alias writ of

SUPREME COURT

gives the consent of the State to be "sued upon any moneyed

execution directed against the funds of the Armed Forces of

Manila

claim involving liability arising from contract, express or

the Philippines to satisfy a final and executory judgment, has

implied, . . . Pursuant, however, to Commonwealth Act ("C.A.")

explained, thus

SECOND DIVISION

No. 327, as amended by Presidential Decree ("P.D.") No. 1145,

the money claim first be brought to the Commission on Audit.

The universal rule that where the State gives its consent to be

Thus,

sued by private parties either by general or special law, it may

in

Carabao,

Inc.,

vs.

Agricultural

Productivity

Commission, 20 we ruled:

limit the claimant's action "only up to the completion of

G.R. No. L-30671

November 28, 1973

proceedings anterior to the stage of execution" and that the

(C)laimants have to prosecute their money claims against the

power of the Courts ends when the judgment is rendered,

REPUBLIC OF THE PHILIPPINES, petitioner,

Government under Commonwealth Act 327, stating that Act

since government funds and properties may not be seized

vs.

3083 stands now merely as the general law waiving the State's

under writs or execution or garnishment to satisfy such

HON. GUILLERMO P. VILLASOR, as Judge of the Court of First

immunity from suit, subject to the general limitation

judgments, is based on obvious considerations of public policy.

Instance of Cebu, Branch I, THE PROVINCIAL SHERIFF OF RIZAL,

expressed in Section 7 thereof that "no execution shall issue

Disbursements of public funds must be covered by the

THE SHERIFF OF QUEZON CITY, and THE SHERIFF OF THE CITY

upon any judgment rendered by any Court against the

correspondent appropriation as required by law. The functions

OF MANILA, THE CLERK OF COURT, Court of First Instance of

Government of the (Philippines), and that the conditions

and public services rendered by the State cannot be allowed to

Cebu, P. J. KIENER CO., LTD., GAVINO UNCHUAN, AND

provided in Commonwealth Act 327 for filing money claims

be paralyzed or disrupted by the diversion of public funds from

INTERNATIONAL CONSTRUCTION CORPORATION, respondents.

against the Government must be strictly observed."

their legitimate and specific objects, as appropriated by law.

23

We fail to see any substantial conflict or inconsistency

Office of the Solicitor General Felix V. Makasiar and Solicitor

Bernardo P. Pardo for petitioner.

Andres T. Velarde and Marcelo B. Fernan for respondents.

Sheriffs of Rizal Province, Quezon City [as well as] Manila to

did right in filing this certiorari and prohibition proceeding.

execute the said decision. 9. Pursuant to the said Order dated

What was done by respondent Judge is not in conformity with

June 24, 1969, the corresponding Alias Writ of Execution [was

the dictates of the Constitution. .

issued] dated June 26, 1969, .... 10. On the strength of the
afore-mentioned Alias Writ of Execution dated June 26, 1969,

It is a fundamental postulate of constitutionalism flowing from

the Provincial Sheriff of Rizal (respondent herein) served

the juristic concept of sovereignty that the state as well as its

notices of garnishment dated June 28, 1969 with several

government is immune from suit unless it gives its consent. It

The Republic of the Philippines in this certiorari and

Banks, specially on the "monies due the Armed Forces of the

is readily understandable why it must be so. In the classic

prohibition proceeding challenges the validity of an order

Philippines in the form of deposits sufficient to cover the

formulation of Holmes: "A sovereign is exempt from suit, not

issued by respondent Judge Guillermo P. Villasor, then of the

amount mentioned in the said Writ of Execution"; the

because of any formal conception or obsolete theory, but on

Court of First Instance of Cebu, Branch I, 1 declaring a decision

Philippine Veterans Bank received the same notice of

the logical and practical ground that there can be no legal

final and executory and of an alias writ of execution directed

garnishment on June 30, 1969 .... 11. The funds of the Armed

right as against the authority that makes the law on which the

against the funds of the Armed Forces of the Philippines

Forces of the Philippines on deposit with the Banks,

right depends." 5 Sociological jurisprudence supplies an answer

subsequently issued in pursuance thereof, the alleged ground

particularly, with the Philippine Veterans Bank and the

not dissimilar. So it was indicated in a recent decision,

being excess of jurisdiction, or at the very least, grave abuse

Philippine National Bank [or] their branches are public funds

Providence Washington Insurance Co. v. Republic of the

of discretion. As thus simply and tersely put, with the facts

duly appropriated and allocated for the payment of pensions

Philippines, 6 with its affirmation that "a continued adherence

being undisputed and the principle of law that calls for

of retirees, pay and allowances of military and civilian

to the doctrine of non-suability is not to be deplored for as

application indisputable, the outcome is predictable. The

personnel and for maintenance and operations of the Armed

against the inconvenience that may be caused private parties,

Republic of the Philippines is entitled to the writs prayed for.

Forces of the Philippines, as per Certification dated July 3,

the loss of governmental efficiency and the obstacle to the

Respondent Judge ought not to have acted thus. The order

1969 by the AFP Controller,..." 2. The paragraph immediately

performance of its multifarious functions are far greater if

thus impugned and the alias writ of execution must be

succeeding in such petition then alleged: "12. Respondent

such a fundamental principle were abandoned and the

nullified.

Judge, Honorable Guillermo P. Villasor, acted in excess of

availability of judicial remedy were not thus restricted. With

jurisdiction [or] with grave abuse of discretion amounting to

the well known propensity on the part of our people to go to

In the petition filed by the Republic of the Philippines on July

lack of jurisdiction in granting the issuance of an alias writ of

court, at the least provocation, the loss of time and energy

7, 1969, a summary of facts was set forth thus: "7. On July 3,

execution against the properties of the Armed Forces of the

required to defend against law suits, in the absence of such a

1961, a decision was rendered in Special Proceedings No. 2156-

Philippines, hence, the Alias Writ of Execution and notices of

basic principle that constitutes such an effective obstacle,

R in favor of respondents P. J. Kiener Co., Ltd., Gavino

garnishment issued pursuant thereto are null and void." 3 In

could very well be imagined." 7

Unchuan, and International Construction Corporation, and

the answer filed by respondents, through counsel Andres T.

against the petitioner herein, confirming the arbitration award

Velarde and Marcelo B. Fernan, the facts set forth were

This fundamental postulate underlying the 1935 Constitution is

in

admitted with the only qualification being that the total award

now made explicit in the revised charter. It is therein expressly

was in the amount of P2,372,331.40. 4

provided: "The State may not be sued without its consent." 8 A

FERNANDO, J.:

the

amount

of

P1,712,396.40,

subject

of

Special

Proceedings. 8. On June 24, 1969, respondent Honorable

Guillermo P. Villasor, issued an Order declaring the aforestated
decision of July 3, 1961 final and executory, directing the

corollary, both dictated by logic and sound sense from a basic

The Republic of the Philippines, as mentioned at the outset,

concept is that public funds cannot be the object of a

garnishment proceeding even if the consent to be sued had

entitled to a specific portion thereof. And still another reason

SALES ENTERPRISES, INC., respondents.

been previously granted and the state liability adjudged. Thus

which covers both of the foregoing is that every consideration

in the recent case of Commissioner of Public Highways v. San

of public policy forbids it." 12

Padilla Law Office for petitioner.

opinion of Justice Teehankee: "The universal rule that where

In the light of the above, it is made abundantly clear why the

Siguion Reyna, Montecillo & Ongsiako for private respondent.

the State gives its consent to be sued by private parties either

Republic of the Philippines could rightfully allege a legitimate

by general or special law, it may limit claimant's action 'only

grievance.

Diego, 9 such a well-settled doctrine was restated in the

up to the completion of proceedings anterior to the stage of

execution' and that the power of the Courts ends when the

WHEREFORE, the writs of certiorari and prohibition are

QUIASON, J.:

judgment is rendered, since government funds and properties

granted, nullifying and setting aside both the order of June 24,

may not be seized under writs of execution or garnishment to

1969 declaring executory the decision of July 3, 1961 as well

This is a petition for certiorari under Rule 65 of the Revised

satisfy such judgments, is based on obvious considerations of

as the alias writ of execution issued thereunder. The

Rules of Court to reverse and set aside the Orders dated June

public policy. Disbursements of public funds must be covered

preliminary injunction issued by this Court on July 12, 1969 is

20, 1991 and September 19, 1991 of the Regional Trial Court,

by the corresponding appropriation as required by law. The

hereby made permanent.

Branch 61, Makati, Metro Manila in Civil Case No. 90-183.

functions and public services rendered by the State cannot be

allowed to be paralyzed or disrupted by the diversion of public

The Order dated June 20, 1991 denied the motion of petitioner

funds

as

to dismiss the complaint in Civil Case No. 90-183, while the

appropriated by law." 10 Such a principle applies even to an

Order dated September 19, 1991 denied the motion for

attempted garnishment of a salary that had accrued in favor of

reconsideration of the June 20,1991 Order.

an

from

their

employee.

legitimate

Director

of

and

specific

Commerce

and

objects,

Industry

v.

Republic of the Philippines

Concepcion, 11 speaks to that effect. Justice Malcolm as

SUPREME COURT

Petitioner is the Holy See who exercises sovereignty over the

ponente left no doubt on that score. Thus: "A rule which has

Manila

Vatican City in Rome, Italy, and is represented in the

never been seriously questioned, is that money in the hands of

public

officers,

although

it

may

be

due

government

Philippines by the Papal Nuncio.

EN BANC

employees, is not liable to the creditors of these employees in

Private respondent, Starbright Sales Enterprises, Inc., is a

the process of garnishment. One reason is, that the State, by

domestic corporation engaged in the real estate business.

virtue of its sovereignty, may not be sued in its own courts

except by express authorization by the Legislature, and to

G.R. No. 101949 December 1, 1994

subject its officers to garnishment would be to permit

This petition arose from a controversy over a parcel of land

consisting of 6,000 square meters (Lot 5-A, Transfer Certificate

indirectly what is prohibited directly. Another reason is that

THE HOLY SEE, petitioner,

of Title No. 390440) located in the Municipality of Paraaque,

moneys sought to be garnished, as long as they remain in the

vs.

Metro Manila and registered in the name of petitioner.

hands of the disbursing officer of the Government, belong to

THE HON. ERIBERTO U. ROSARIO, JR., as Presiding Judge of the

the latter, although the defendant in garnishment may be

Regional Trial Court of Makati, Branch 61 and STARBRIGHT

Said Lot 5-A is contiguous to Lots 5-B and 5-D which are

covered by Transfer Certificates of Title Nos. 271108 and

the earnest money to Msgr. Cirilos; (4) in the same month,

Deeds of Sale between petitioner and the PRC on the one

265388 respectively and registered in the name of the

Licup assigned his rights over the property to private

hand, and Tropicana on the other; (2) the reconveyance of the

Philippine Realty Corporation (PRC).

respondent and informed the sellers of the said assignment;

lots in question; (3) specific performance of the agreement to

(5) thereafter, private respondent demanded from Msgr. Cirilos

sell between it and the owners of the lots; and (4) damages.

The three lots were sold to Ramon Licup, through Msgr.

that the sellers fulfill their undertaking and clear the property

Domingo A. Cirilos, Jr., acting as agent to the sellers. Later,

of

private

On June 8, 1990, petitioner and Msgr. Cirilos separately moved

Licup assigned his rights to the sale to private respondent.

respondent of the squatters' refusal to vacate the lots,

to dismiss the complaint petitioner for lack of jurisdiction

squatters;

however,

Msgr.

Cirilos

informed

proposing instead either that private respondent undertake

based on sovereign immunity from suit, and Msgr. Cirilos for

In view of the refusal of the squatters to vacate the lots sold

the eviction or that the earnest money be returned to the

being an improper party. An opposition to the motion was filed

to private respondent, a dispute arose as to who of the parties

latter; (6) private respondent counterproposed that if it would

by private respondent.

has the responsibility of evicting and clearing the land of

undertake the eviction of the squatters, the purchase price of

squatters. Complicating the relations of the parties was the

the lots should be reduced from P1,240.00 to P1,150.00 per

On June 20, 1991, the trial court issued an order denying,

sale by petitioner of Lot 5-A to Tropicana Properties and

square meter; (7) Msgr. Cirilos returned the earnest money of

among others, petitioner's motion to dismiss after finding that

Development Corporation (Tropicana).

P100,000.00 and wrote private respondent giving it seven days

petitioner "shed off [its] sovereign immunity by entering into

from receipt of the letter to pay the original purchase price in

the business contract in question" (Rollo, pp. 20-21).

cash; (8) private respondent sent the earnest money back to

the sellers, but later discovered that on March 30, 1989,

On July 12, 1991, petitioner moved for reconsideration of the

On January 23, 1990, private respondent filed a complaint

petitioner and the PRC, without notice to private respondent,

order. On August 30, 1991, petitioner filed a "Motion for a

with the Regional Trial Court, Branch 61, Makati, Metro Manila

sold the lots to Tropicana, as evidenced by two separate Deeds

Hearing for the Sole Purpose of Establishing Factual Allegation

for annulment of the sale of the three parcels of land, and

of Sale, one over Lot 5-A, and another over Lots 5-B and 5-D;

for claim of Immunity as a Jurisdictional Defense." So as to

specific

petitioner,

and that the sellers' transfer certificate of title over the lots

facilitate the determination of its defense of sovereign

represented by the Papal Nuncio, and three other defendants:

were cancelled, transferred and registered in the name of

immunity, petitioner prayed that a hearing be conducted to

namely, Msgr. Domingo A. Cirilos, Jr., the PRC and Tropicana

Tropicana; (9) Tropicana induced petitioner and the PRC to sell

allow it to establish certain facts upon which the said defense

(Civil Case No.

the lots to it and thus enriched itself at the expense of private

is based. Private respondent opposed this motion as well as the

90-183).

respondent; (10) private respondent demanded the rescission

motion for reconsideration.

performance

and

damages

against

of the sale to Tropicana and the reconveyance of the lots, to

The complaint alleged that: (1) on April 17, 1988, Msgr. Cirilos,

no avail; and (11) private respondent is willing and able to

On October 1, 1991, the trial court issued an order deferring

Jr., on behalf of petitioner and the PRC, agreed to sell to

comply with the terms of the contract to sell and has actually

the resolution on the motion for reconsideration until after

Ramon Licup Lots 5-A, 5-B and 5-D at the price of P1,240.00

made plans to develop the lots into a townhouse project, but

trial on the merits and directing petitioner to file its answer

per square meters; (2) the agreement to sell was made on the

in view of the sellers' breach, it lost profits of not less than

(Rollo, p. 22).

condition that earnest money of P100,000.00 be paid by Licup

P30,000.000.00.

to the sellers, and that the sellers clear the said lots of
squatters who were then occupying the same; (3) Licup paid

Petitioner forthwith elevated the matter to us. In its petition,

Private respondent thus prayed for: (1) the annulment of the

petitioner invokes the privilege of sovereign immunity only on

its own behalf and on behalf of its official representative, the

The other procedural question raised by private respondent is

respondent-employer could not be sued because it enjoyed

Papal Nuncio.

the personality or legal interest of the Department of Foreign

diplomatic immunity. In World Health Organization v. Aquino,

Affairs to intervene in the case in behalf of the Holy See

48 SCRA 242 (1972), the Secretary of Foreign Affairs sent the

(Rollo, pp. 186-190).

trial court a telegram to that effect. In Baer v. Tizon, 57 SCRA

On December 9, 1991, a Motion for Intervention was filed

before us by the Department of Foreign Affairs, claiming that

1 (1974), the U.S. Embassy asked the Secretary of Foreign

it has a legal interest in the outcome of the case as regards

In Public International Law, when a state or international

Affairs to request the Solicitor General to make, in behalf of

the diplomatic immunity of petitioner, and that it "adopts by

agency wishes to plead sovereign or diplomatic immunity in a

the Commander of the United States Naval Base at Olongapo

reference, the allegations contained in the petition of the Holy

foreign court, it requests the Foreign Office of the state where

City, Zambales, a "suggestion" to respondent Judge. The

See insofar as they refer to arguments relative to its claim of

it is sued to convey to the court that said defendant is entitled

Solicitor General embodied the "suggestion" in a Manifestation

sovereign immunity from suit" (Rollo, p. 87).

to immunity.

and Memorandum as amicus curiae.

the

In the United States, the procedure followed is the process of

In the case at bench, the Department of Foreign Affairs,

Department of Foreign Affairs. In compliance with the

"suggestion," where the foreign state or the international

through the Office of Legal Affairs moved with this Court to be

resolution of this Court, both parties and the Department of

organization sued in an American court requests the Secretary

allowed to intervene on the side of petitioner. The Court

Foreign Affairs submitted their respective memoranda.

of State to make a determination as to whether it is entitled

allowed the said Department to file its memorandum in

to immunity. If the Secretary of State finds that the defendant

support of petitioner's claim of sovereign immunity.

Private

respondent

opposed

the

intervention

of

II

is immune from suit, he, in turn, asks the Attorney General to

submit to the court a "suggestion" that the defendant is

In some cases, the defense of sovereign immunity was

A preliminary matter to be threshed out is the procedural issue

entitled to immunity. In England, a similar procedure is

submitted directly to the local courts by the respondents

of whether the petition for certiorari under Rule 65 of the

followed, only the Foreign Office issues a certification to that

through their private counsels (Raquiza v. Bradford, 75 Phil. 50

Revised Rules of Court can be availed of to question the order

effect instead of submitting a "suggestion" (O'Connell, I

[1945]; Miquiabas v. Philippine-Ryukyus Command, 80 Phil. 262

denying petitioner's motion to dismiss. The general rule is that

International Law 130 [1965]; Note: Immunity from Suit of

[1948]; United States of America v. Guinto, 182 SCRA 644

an order denying a motion to dismiss is not reviewable by the

Foreign Sovereign Instrumentalities and Obligations, 50 Yale

[1990] and companion cases). In cases where the foreign states

appellate courts, the remedy of the movant being to file his

Law Journal 1088 [1941]).

bypass the Foreign Office, the courts can inquire into the facts

answer and to proceed with the hearing before the trial court.

and make their own determination as to the nature of the acts

But the general rule admits of exceptions, and one of these is

In the Philippines, the practice is for the foreign government

and transactions involved.

when it is very clear in the records that the trial court has no

or the international organization to first secure an executive

alternative but to dismiss the complaint (Philippine National

endorsement of its claim of sovereign or diplomatic immunity.

Bank v. Florendo, 206 SCRA 582 [1992]; Zagada v. Civil Service

But how the Philippine Foreign Office conveys its endorsement

Commission, 216 SCRA 114 [1992]. In such a case, it would be a

to the courts varies. In International Catholic Migration

The burden of the petition is that respondent trial court has no

sheer waste of time and energy to require the parties to

Commission v. Calleja, 190 SCRA 130 (1990), the Secretary of

jurisdiction over petitioner, being a foreign state enjoying

undergo the rigors of a trial.

Foreign Affairs just sent a letter directly to the Secretary of

sovereign immunity. On the other hand, private respondent

Labor and Employment, informing the latter that the

insists that the doctrine of non-suability is not anymore

III

absolute and that petitioner has divested itself of such a cloak

In view of the wordings of the Lateran Treaty, it is difficult to

when, of its own free will, it entered into a commercial

determine whether the statehood is vested in the Holy See or

The Republic of the Philippines has accorded the Holy See the

transaction for the sale of a parcel of land located in the

in the Vatican City. Some writers even suggested that the

status of a foreign sovereign. The Holy See, through its

Philippines.

treaty created two international persons the Holy See and

Ambassador,

Vatican City (Salonga and Yap, supra, 37).

representations with the Philippine government since 1957

A.

The Holy See

the

Papal

Nuncio,

has

had

diplomatic

(Rollo, p. 87). This appears to be the universal practice in

The Vatican City fits into none of the established categories of

Before we determine the issue of petitioner's non-suability, a

states, and the attribution to it of "sovereignty" must be made

brief look into its status as a sovereign state is in order.

in a sense different from that in which it is applied to other

international relations.

B.

Sovereign Immunity

states (Fenwick, International Law 124-125 [1948]; Cruz,

Before the annexation of the Papal States by Italy in 1870, the

International Law 37 [1991]). In a community of national

As expressed in Section 2 of Article II of the 1987 Constitution,

Pope was the monarch and he, as the Holy See, was considered

states, the Vatican City represents an entity organized not for

we have adopted the generally accepted principles of

a subject of International Law. With the loss of the Papal

political but for ecclesiastical purposes and international

International

States and the limitation of the territory under the Holy See to

objects. Despite its size and object, the Vatican City has an

principles of International Law are deemed incorporated as

an area of 108.7 acres, the position of the Holy See in

independent government of its own, with the Pope, who is also

part of the law of the land as a condition and consequence of

International Law became controversial (Salonga and Yap,

head of the Roman Catholic Church, as the Holy See or Head of

our admission in the society of nations (United States of

Public International Law 36-37 [1992]).

State, in conformity with its traditions, and the demands of its

America v. Guinto, 182 SCRA 644 [1990]).

Law. Even

without

this

affirmation,

such

mission in the world. Indeed, the world-wide interests and

In 1929, Italy and the Holy See entered into the Lateran

activities of the Vatican City are such as to make it in a sense

There are two conflicting concepts of sovereign immunity,

Treaty, where Italy recognized the exclusive dominion and

an "international state" (Fenwick, supra., 125; Kelsen,

each widely held and firmly established. According to the

sovereign jurisdiction of the Holy See over the Vatican City. It

Principles of International Law 160 [1956]).

classical or absolute theory, a sovereign cannot, without its

also recognized the right of the Holy See to receive foreign

consent, be made a respondent in the courts of another

diplomats, to send its own diplomats to foreign countries, and

One authority wrote that the recognition of the Vatican City as

sovereign. According to the newer or restrictive theory, the

to enter into treaties according to International Law (Garcia,

a state has significant implication that it is possible for any

immunity of the sovereign is recognized only with regard to

Questions and Problems In International Law, Public and

entity pursuing objects essentially different from those

public acts or acts jure imperii of a state, but not with regard

Private 81 [1948]).

pursued by states to be invested with international personality

to private acts or acts jure gestionis

(Kunz, The Status of the Holy See in International Law, 46 The

(United States of America v. Ruiz, 136 SCRA 487 [1987]; Coquia

American Journal of International Law 308 [1952]).

and Defensor-Santiago, Public International Law 194 [1984]).

visible independence and of guaranteeing to it indisputable

Inasmuch as the Pope prefers to conduct foreign relations and

Some states passed legislation to serve as guidelines for the

sovereignty also in the field of international relations"

enter into transactions as the Holy See and not in the name of

executive or judicial determination when an act may be

(O'Connell, I International Law 311 [1965]).

the Vatican City, one can conclude that in the Pope's own view,

considered as jure gestionis. The United States passed the

it is the Holy See that is the international person.

Foreign Sovereign Immunities Act of 1976, which defines a

The Lateran Treaty established the statehood of the Vatican

City "for the purpose of assuring to the Holy See absolute and

commercial activity as "either a regular course of commercial

supra.); and (3) the change of employment status of base

an act jure imperii, especially when it is not undertaken for

conduct or a particular commercial transaction or act."

employees (Sanders v. Veridiano, 162 SCRA 88 [1988]).

gain or profit.

of the activity shall be determined by reference to the nature

On the other hand, this Court has considered the following

As held in United States of America v. Guinto, (supra):

of the course of conduct or particular transaction or act,

transactions by a foreign state with private parties as acts jure

rather than by reference to its purpose." The Canadian

gestionis: (1) the hiring of a cook in the recreation center,

There is no question that the United States of America, like

Parliament enacted in 1982 an Act to Provide For State

consisting of three restaurants, a cafeteria, a bakery, a store,

any other state, will be deemed to have impliedly waived its

Immunity in Canadian Courts. The Act defines a "commercial

and a coffee and pastry shop at the John Hay Air Station in

non-suability if it has entered into a contract in its proprietary

activity" as any particular transaction, act or conduct or any

Baguio City, to cater to American servicemen and the general

or private capacity. It is only when the contract involves its

regular course of conduct that by reason of its nature, is of a

public (United States of America v. Rodrigo, 182 SCRA 644

sovereign or governmental capacity that no such waiver may

"commercial character."

[1990]); and (2) the bidding for the operation of barber shops

be implied.

Furthermore, the law declared that the "commercial character

in Clark Air Base in Angeles City (United States of America v.

The restrictive theory, which is intended to be a solution to

Guinto, 182 SCRA 644 [1990]). The operation of the restaurants

In the case at bench, if petitioner has bought and sold lands in

the host of problems involving the issue of sovereign immunity,

and other facilities open to the general public is undoubtedly

the ordinary course of a real estate business, surely the said

has created problems of its own. Legal treatises and the

for profit as a commercial and not a governmental activity. By

transaction can be categorized as an act jure gestionis.

decisions in countries which follow the restrictive theory have

entering into the employment contract with the cook in the

However, petitioner has denied that the acquisition and

difficulty in characterizing whether a contract of a sovereign

discharge of its proprietary function, the United States

subsequent disposal of Lot 5-A were made for profit but

state with a private party is an act jure gestionis or an act jure

government impliedly divested itself of its sovereign immunity

claimed that it acquired said property for the site of its

imperii.

from suit.

mission or the Apostolic Nunciature in the Philippines. Private

respondent failed to dispute said claim.

The restrictive theory came about because of the entry of

In the absence of legislation defining what activities and

sovereign states into purely commercial activities remotely

transactions

as

Lot 5-A was acquired by petitioner as a donation from the

connected with the discharge of governmental functions. This

constituting acts jure gestionis, we have to come out with our

Archdiocese of Manila. The donation was made not for

is particularly true with respect to the Communist states which

own guidelines, tentative they may be.

commercial purpose, but for the use of petitioner to construct

took

control

of

nationalized

business

activities

shall

be

considered

"commercial"

and

and

international trading.

thereon the official place of residence of the Papal Nuncio.

Certainly, the mere entering into a contract by a foreign state

The right of a foreign sovereign to acquire property, real or

with a private party cannot be the ultimate test. Such an act

personal, in a receiving state, necessary for the creation and

This Court has considered the following transactions by a

can only be the start of the inquiry. The logical question is

maintenance of its diplomatic mission, is recognized in the

foreign state with private parties as acts jure imperii: (1) the

whether the foreign state is engaged in the activity in the

1961 Vienna Convention on Diplomatic Relations (Arts. 20-22).

lease by a foreign government of apartment buildings for use

regular course of business. If the foreign state is not engaged

This treaty was concurred in by the Philippine Senate and

of its military officers (Syquia v. Lopez, 84 Phil. 312 [1949]; (2)

regularly in a business or trade, the particular act or

entered into force in the Philippines on November 15, 1965.

the conduct of public bidding for the repair of a wharf at a

transaction must then be tested by its nature. If the act is in

United States Naval Station (United States of America v. Ruiz,

pursuit of a sovereign activity, or an incident thereof, then it is

In Article 31(a) of the Convention, a diplomatic envoy is

granted immunity from the civil and administrative jurisdiction

embassy

in

this

country

(Rollo,

pp.

156-157).

The

Foreign Office shall first make a determination of the impact

of the receiving state over any real action relating to private

determination of the executive arm of government that a state

of its espousal on the relations between the Philippine

immovable property situated in the territory of the receiving

or instrumentality is entitled to sovereign or diplomatic

government and the Holy See (Young, Remedies of Private

state which the envoy holds on behalf of the sending state for

immunity is a political question that is conclusive upon the

Claimants Against Foreign States, Selected Readings on

the purposes of the mission. If this immunity is provided for a

courts (International Catholic Migration Commission v. Calleja,

Protection by Law of Private Foreign Investments 905, 919

diplomatic envoy, with all the more reason should immunity be

190 SCRA 130 [1990]). Where the plea of immunity is

[1964]). Once the Philippine government decides to espouse

recognized as regards the sovereign itself, which in this case is

recognized and affirmed by the executive branch, it is the

the claim, the latter ceases to be a private cause.

the Holy See.

duty of the courts to accept this claim so as not to embarrass

the executive arm of the government in conducting the

According to the Permanent Court of International Justice, the

The decision to transfer the property and the subsequent

country's foreign relations (World Health Organization v.

forerunner of the International Court of Justice:

disposal thereof are likewise clothed with a governmental

Aquino, 48 SCRA 242 [1972]). As in International Catholic

character. Petitioner did not sell Lot

Migration Commission and in World Health Organization, we

By taking up the case of one of its subjects and by reporting to

5-A for profit or gain. It merely wanted to dispose off the same

abide by the certification of the Department of Foreign Affairs.

diplomatic action or international judicial proceedings on his

because the squatters living thereon made it almost impossible

behalf, a State is in reality asserting its own rights its right

for petitioner to use it for the purpose of the donation. The

Ordinarily, the procedure would be to remand the case and

to ensure, in the person of its subjects, respect for the rules of

fact that squatters have occupied and are still occupying the

order the trial court to conduct a hearing to establish the facts

international law (The Mavrommatis Palestine Concessions, 1

lot, and that they stubbornly refuse to leave the premises, has

alleged by petitioner in its motion. In view of said

Hudson, World Court Reports 293, 302 [1924]).

been admitted by private respondent in its complaint (Rollo,

certification, such procedure would however be pointless and

pp. 26, 27).

unduly circuitous (Ortigas & Co. Ltd. Partnership v. Judge Tirso

WHEREFORE, the petition for certiorari is GRANTED and the

Velasco, G.R. No. 109645, July 25, 1994).

complaint in Civil Case No. 90-183 against petitioner is

The issue of petitioner's non-suability can be determined by

the trial court without going to trial in the light of the

DISMISSED.
IV

pleadings, particularly the admission of private respondent.

SO ORDERED.

Besides, the privilege of sovereign immunity in this case was

Private respondent is not left without any legal remedy for the

sufficiently established by the Memorandum and Certification

redress of its grievances. Under both Public International Law

of the Department of Foreign Affairs. As the department

and Transnational Law, a person who feels aggrieved by the

tasked with the conduct of the Philippines' foreign relations

acts of a foreign sovereign can ask his own government to

(Administrative Code of 1987, Book IV, Title I, Sec. 3), the

espouse his cause through diplomatic channels.

Today is Friday, September 18, 2015

case and officially certified that the Embassy of the Holy See is

Private respondent can ask the Philippine government, through

search

a duly accredited diplomatic mission to the Republic of the

the Foreign Office, to espouse its claims against the Holy See.

Philippines exempt from local jurisdiction and entitled to all

Its first task is to persuade the Philippine government to take

Republic of the Philippines

the rights, privileges and immunities of a diplomatic mission or

up with the Holy See the validity of its claims. Of course, the

SUPREME COURT

Department of Foreign Affairs has formally intervened in this

Manila

Sometime in May, 1972, the United States invited the

Civil Case No. 779-M, the company sued the United States of

submission of bids for the following projects

America and Messrs. James E. Galloway, William I. Collins and

EN BANC

Robert Gohier all members of the Engineering Command of the

1.

G.R. No. L-35645

May 22, 1985

Repair offender system, Alava Wharf at the U.S. Naval

Station Subic Bay, Philippines.

U.S. Navy. The complaint is to order the defendants to allow

the plaintiff to perform the work on the projects and, in the
event that specific performance was no longer possible, to

UNITED STATES OF AMERICA, CAPT. JAMES E. GALLOWAY,

2.

Repair typhoon damage to NAS Cubi shoreline; repair

order the defendants to pay damages. The company also asked

WILLIAM I. COLLINS and ROBERT GOHIER, petitioners,

typhoon damage to shoreline revetment, NAVBASE Subic; and

for the issuance of a writ of preliminary injunction to restrain

vs.

repair

the defendants from entering into contracts with third parties

HON. V. M. RUIZ, Presiding Judge of Branch XV, Court of First

Philippines.

for work on the projects.

Eligio de Guzman & Co., Inc. responded to the invitation and

The defendants entered their special appearance for the

submitted bids. Subsequent thereto, the company received

purpose only of questioning the jurisdiction of this court over

from the United States two telegrams requesting it to confirm

the subject matter of the complaint and the persons of

its price proposals and for the name of its bonding company.

defendants, the subject matter of the complaint being acts

Albert, Vergara, Benares, Perias & Dominguez Law Office for

The company complied with the requests. [In its complaint,

and omissions of the individual defendants as agents of

respondents.

the company alleges that the United States had accepted its

defendant United States of America, a foreign sovereign which

bids because "A request to confirm a price proposal confirms

has not given her consent to this suit or any other suit for the

the acceptance of a bid pursuant to defendant United States'

causes of action asserted in the complaint." (Rollo, p. 50.)

to

Leyte

Wharf

approach,

NAVBASE

Subic

Bay,

Instance of Rizal and ELIGIO DE GUZMAN & CO., INC.,

respondents.

Sycip, Salazar, Luna & Manalo & Feliciano Law for petitioners.

bidding practices." (Rollo, p. 30.) The truth of this allegation

ABAD SANTOS, J.:

has not been tested because the case has not reached the trial

Subsequently the defendants filed a motion to dismiss the

stage.]

complaint which included an opposition to the issuance of the

This is a petition to review, set aside certain orders and

writ of preliminary injunction. The company opposed the

restrain the respondent judge from trying Civil Case No. 779M

In June, 1972, the company received a letter which was signed

motion. The trial court denied the motion and issued the writ.

of the defunct Court of First Instance of Rizal.

by Wilham I. Collins, Director, Contracts Division, Naval

The defendants moved twice to reconsider but to no avail.

Facilities

Pacific,

Hence the instant petition which seeks to restrain perpetually

Department of the Navy of the United States, who is one of

the proceedings in Civil Case No. 779-M for lack of jurisdiction

the petitioners herein. The letter said that the company did

on the part of the trial court.

The factual background is as follows:

Engineering

Command,

Southwest

At times material to this case, the United States of America

not qualify to receive an award for the projects because of its

had a naval base in Subic, Zambales. The base was one of

previous unsatisfactory performance rating on a repair

those provided in the Military Bases Agreement between the

contract for the sea wall at the boat landings of the U.S. Naval

Philippines and the United States.

Station in Subic Bay. The letter further said that the projects

The traditional rule of State immunity exempts a State from

had been awarded to third parties. In the abovementioned

being sued in the courts of another State without its consent

The petition is highly impressed with merit.

or waiver. This rule is a necessary consequence of the

xxx xxx xxx

principles of independence and equality of States. However,

exhaust its administrative remedies against said Government,

the lower court acted properly in dismissing this case.(At p.

the rules of International Law are not petrified; they are

We agree to the above contention, and considering that the

constantly developing and evolving. And because the activities

United States government, through its agency at Subic Bay,

of states have multiplied, it has been necessary to distinguish

entered into a contract with appellant for stevedoring and

It can thus be seen that the statement in respect of the waiver

them-between sovereign and governmental acts (jure imperii)

miscellaneous labor services within the Subic Bay Area, a U.S.

of State immunity from suit was purely gratuitous and,

and private, commercial and proprietary acts (jure gestionis).

Naval Reservation, it is evident that it can bring an action

therefore, obiter so that it has no value as an imperative

The result is that State immunity now extends only to acts jure

before our courts for any contractual liability that that

authority.

imperil The restrictive application of State immunity is now

political entity may assume under the contract. The trial

the rule in the United States, the United Kingdom and other

court, therefore, has jurisdiction to entertain this case ...

The restrictive application of State immunity is proper only

states in western Europe. (See Coquia and Defensor Santiago,

(Rollo, pp. 20-21.)

when the proceedings arise out of commercial transactions of

Public International Law, pp. 207-209 [1984].)

598.)

the foreign sovereign, its commercial activities or economic

The respondent judge recognized the restrictive doctrine of

The reliance placed on Lyons by the respondent judge is

affairs. Stated differently, a State may be said to have

misplaced for the following reasons:

descended to the level of an individual and can thus be

State immunity when he said in his Order denying the

deemed to have tacitly given its consent to be sued only when

defendants' (now petitioners) motion: " A distinction should be

In Harry Lyons, Inc. vs. The United States of America, supra,

it enters into business contracts. It does not apply where the

made between a strictly governmental function of the

plaintiff brought suit in the Court of First Instance of Manila to

contract relates to the exercise of its sovereign functions. In

sovereign

non-

collect several sums of money on account of a contract

this case the projects are an integral part of the naval base

governmental acts (Rollo, p. 20.) However, the respondent

state

from

its

private,

proprietary

or

between plaintiff and defendant. The defendant filed a motion

which is devoted to the defense of both the United States and

judge also said: "It is the Court's considered opinion that

to dismiss on the ground that the court had no jurisdiction

the Philippines, indisputably a function of the government of

entering into a contract for the repair of wharves or shoreline

over defendant and over the subject matter of the action. The

the highest order; they are not utilized for nor dedicated to

is certainly not a governmental function altho it may partake

court granted the motion on the grounds that: (a) it had no

commercial or business purposes.

of a public nature or character. As aptly pointed out by

jurisdiction over the defendant who did not give its consent to

plaintiff's counsel in his reply citing the ruling in the case of

the suit; and (b) plaintiff failed to exhaust the administrative

That the correct test for the application of State immunity is

Lyons, Inc., [104 Phil. 594 (1958)], and which this Court quotes

remedies provided in the contract. The order of dismissal was

not the conclusion of a contract by a State but the legal nature

with approval, viz.:

elevated to this Court for review.

of the act is shown in Syquia vs. Lopez, 84 Phil. 312 (1949). In

that case the plaintiffs leased three apartment buildings to the

It is however contended that when a sovereign state enters

In sustaining the action of the lower court, this Court said:

into a contract with a private person, the state can be sued

United States of America for the use of its military officials.

The plaintiffs sued to recover possession of the premises on

upon the theory that it has descended to the level of an

It appearing in the complaint that appellant has not complied

the ground that the term of the leases had expired. They also

individual from which it can be implied that it has given its

with the procedure laid down in Article XXI of the contract

asked for increased rentals until the apartments shall have

consent to be sued under the contract. ...

regarding the prosecution of its claim against the United States

been vacated.

Government, or, stated differently, it has failed to first

The defendants who were armed forces officers of the United

not deemed to have given or waived its consent to be sued for

United States Government. through its agency at Subic Bay,

States moved to dismiss the suit for lack of jurisdiction in the

the reason that the contracts were for jure imperii and not for

entered into a contract with appellant for stevedoring and

part of the court. The Municipal Court of Manila granted the

jure gestionis.

miscellaneous labor services within the Subic Bay area, a U.S.

motion to dismiss; sustained by the Court of First Instance, the

Navy Reservation, it is evident that it can bring an action

plaintiffs went to this Court for review on certiorari. In

WHEREFORE, the petition is granted; the questioned orders of

before our courts for any contractual liability that that

denying the petition, this Court said:

the respondent judge are set aside and Civil Case No. is

political entity may assume under the contract."

dismissed. Costs against the private respondent.

On the basis of the foregoing considerations we are of the

When the U.S. Government, through its agency at Subic Bay,

belief and we hold that the real party defendant in interest is

Teehankee, Aquino, Concepcion, Jr., Melencio-Herrera, Plana,

confirmed the acceptance of a bid of a private company for

the Government of the United States of America; that any

* Escolin, Relova, Gutierrez, Jr., De la Fuente, Cuevas and

the repair of wharves or shoreline in the Subic Bay area, it is

judgment for back or Increased rentals or damages will have to

Alampay, JJ., concur.

deemed to have entered into a contract and thus waived the

be paid not by defendants Moore and Tillman and their 64 codefendants but by the said U.S. Government. On the basis of

mantle of sovereign immunity from suit and descended to the

Fernando, C.J., took no part.

level of the ordinary citizen. Its consent to be sued, therefore,

the ruling in the case of Land vs. Dollar already cited, and on

is implied from its act of entering into a contract (Santos vs.

what we have already stated, the present action must be

Santos, 92 Phil. 281, 284).

considered as one against the U.S. Government. It is clear hat

the courts of the Philippines including the Municipal Court of

Justice and fairness dictate that a foreign government that

Manila have no jurisdiction over the present case for unlawful

detainer. The question of lack of jurisdiction was raised and

commits a breach of its contractual obligation in the case at

Separate Opinions

bar by the unilateral cancellation of the award for the project

interposed at the very beginning of the action. The U.S.

by the United States government, through its agency at Subic

Government has not , given its consent to the filing of this suit

Bay should not be allowed to take undue advantage of a party

which is essentially against her, though not in name. Moreover,

who may have legitimate claims against it by seeking refuge

this is not only a case of a citizen filing a suit against his own

MAKASIAR, J., dissenting:

Government without the latter's consent but it is of a citizen

behind the shield of non-suability. A contrary view would

render a Filipino citizen, as in the instant case, helpless and

filing an action against a foreign government without said

The petition should be dismissed and the proceedings in Civil

without redress in his own country for violation of his rights

government's consent, which renders more obvious the lack of

Case No. 779-M in the defunct CFI (now RTC) of Rizal be

committed by the agents of the foreign government professing

jurisdiction of the courts of his country. The principles of law

allowed to continue therein.

to act in its name.

acceptance that we deem it unnecessary to cite authorities in

In the case of Lyons vs. the United States of America (104 Phil.

Appropriate are the words of Justice Perfecto in his dissenting

support thereof. (At p. 323.)

593), where the contract entered into between the plaintiff

opinion in Syquia vs. Almeda Lopez, 84 Phil. 312, 325:

behind this rule are so elementary and of such general

(Harry Lyons, Inc.) and the defendant (U.S. Government)

In Syquia,the United States concluded contracts with private

involved stevedoring and labor services within the Subic Bay

Although, generally, foreign governments are beyond the

individuals but the contracts notwithstanding the States was

area, this Court further stated that inasmuch as ". . . the

jurisdiction of domestic courts of justice, such rule is

inapplicable to cases in which the foreign government enters

remedy in our own courts for breaches of contractual

country, can conveniently seek protective cover under the

into private contracts with the citizens of the court's

obligation

majority opinion. The result is disastrous to the Philippines.

jurisdiction. A contrary view would simply run against all

government, always, looms large, thereby hampering the

principles of decency and violative of all tenets of morals.

growth of Filipino enterprises and creating a virtual monopoly

This opinion of the majority manifests a neo-colonial

in our own country by United States contractors of contracts

mentality. It fosters economic imperialism and foreign political

Moral principles and principles of justice are as valid and

for services or supplies with the various U.S. offices and

ascendancy in our Republic.

applicable as well with regard to private individuals as with

agencies operating in the Philippines.

committed

by

agents

of the

United

States

regard to governments either domestic or foreign. Once a

The doctrine of government immunity from suit cannot and

foreign government enters into a private contract with the

The sanctity of upholding agreements freely entered into by

should not serve as an instrument for perpetrating an injustice

private citizens of another country, such foreign government

the parties cannot be over emphasized. Whether the parties

on a citizen (Amigable vs. Cuenca, L-26400, February 29, 1972,

cannot shield its non-performance or contravention of the

are nations or private individuals, it is to be reasonably

43 SCRA 360; Ministerio vs. Court of First Instance, L-31635,

terms of the contract under the cloak of non-jurisdiction. To

assumed and expected that the undertakings in the contract

August 31, 1971, 40 SCRA 464).

place such foreign government beyond the jurisdiction of the

will be complied with in good faith.

domestic courts is to give approval to the execution of

Under the doctrine of implied waiver of its non-suability, the

unilateral contracts, graphically described in Spanish as

One glaring fact of modern day civilization is that a big and

United States government, through its naval authorities at

'contratos leoninos', because one party gets the lion's share to

powerful nation, like the United States of America, can always

Subic Bay, should be held amenable to lawsuits in our country

the detriment of the other. To give validity to such contract is

overwhelm small and weak nations. The declaration in the

like any other juristic person.

to sanctify bad faith, deceit, fraud. We prefer to adhere to the

United Nations Charter that its member states are equal and

thesis that all parties in a private contract, including

sovereign, becomes hollow and meaningless because big

The invocation by the petitioner United States of America is

governments and the most powerful of them, are amenable to

nations wielding economic and military superiority impose

not in accord with paragraph 3 of Article III of the original RP-

law, and that such contracts are enforceable through the help

upon and dictate to small nations, subverting their sovereignty

US Military Bases Agreement of March 14, 1947, which states

of the courts of justice with jurisdiction to take cognizance of

and dignity as nations. Thus, more often than not, when U.S.

that "in the exercise of the above-mentioned rights, powers

any violation of such contracts if the same had been entered

interest clashes with the interest of small nations, the

and authority, the United States agrees that the powers

into only by private individuals.

American governmental agencies or its citizens invoke

granted to it will not be used unreasonably. . ." (Emphasis

principles of international law for their own benefit.

supplied).

of State immunity in this jurisdiction impinges unduly upon our

In the case at bar, the efficacy of the contract between the

Nor is such posture of the petitioners herein in harmony with

sovereignty and dignity as a nation. Its application will

U.S. Naval authorities at Subic Bay on one hand, and herein

the amendment dated May 27, 1968 to the aforesaid RP-US

particularly discourage Filipino or domestic contractors from

private respondent on the other, was honored more in the

Military Bases Agreement, which recognizes "the need to

transacting business and entering into contracts with United

breach than in the compliance The opinion of the majority will

promote and maintain sound employment practices which will

States authorities or facilities in the Philippines whether naval,

certainly open the floodgates of more violations of contractual

assure equality of treatment of all employees ... and

air or ground forces-because the difficulty, if not impossibility,

obligations. American authorities or any foreign government in

continuing favorable employer-employee relations ..." and

of enforcing a validly executed contract and of seeking judicial

the Philippines for that matter, dealing with the citizens of this

"(B)elieving that an agreement will be mutually beneficial and

Constant resort by a foreign state or its agents to the doctrine

will strengthen the democratic institutions cherished by both

and social improvement of areas surrounding the bases, which

respect for Philippine sovereignty on the one hand and the

Governments, ... the United States Government agrees to

directs that "moreover, the United States Forces shall procure

assurance of unhampered U.S. military operations on the other

accord preferential employment of Filipino citizens in the

goods and services in the Philippines to the maximum extent

hand and that "they shall promote cooperation understanding

Bases, thus (1) the U.S. Forces in the Philippines shall fill the

feasible" (Emphasis supplied).

and harmonious relations within the Base and with the general

needs for civilian employment by employing Filipino citizens,

etc." (Par. 1, Art. I of the Amendment of May 27, 1968).

public in the proximate vicinity thereof" (par. 2 & par. 3 of the

Under No. VI on labor and taxation of the said amendment of

Annex covered by the exchange of notes, January 7, 1979,

January 6, 1979 in connection with the discussions on possible

between Ambassador Richard W. Murphy and Minister of

Neither does the invocation by petitioners of state immunity

revisions or alterations of the Agreement of May 27, 1968, "the

Foreign Affairs Carlos P. Romulo, Emphasis supplied).

from suit express fidelity to paragraph 1 of Article IV of the

discussions shall be conducted on the basis of the principles of

aforesaid amendment of May 2 7, 1968 which directs that "

equality of treatment, the right to organize, and bargain

contractors and concessionaires performing work for the U.S.

collectively, and respect for the sovereignty of the Republic of

Armed Forces shall be required by their contract or concession

the Philippines" (Emphasis supplied)

agreements to comply with all applicable Philippine labor laws

and regulations, " even though paragraph 2 thereof affirms

The majority opinion seems to mock the provision of paragraph

that "nothing in this Agreement shall imply any waiver by

1 of the joint statement of President Marcos and Vice-

either of the two Governments of such immunity under

President Mondale of the United States dated May 4, 1978 that

international law."

"the United States re-affirms that Philippine sovereignty

Separate Opinions

MAKASIAR, J., dissenting:

extends over the bases and that Its base shall be under the

The petition should be dismissed and the proceedings in Civil

Reliance by petitioners on the non-suability of the United

command of a Philippine Base Commander, " which is supposed

Case No. 779-M in the defunct CFI (now RTC) of Rizal be

States Government before the local courts, actually clashes

to underscore the joint Communique of President Marcos and

allowed to continue therein.

with No. III on respect for Philippine law of the Memorandum

U.S. President Ford of December 7, 1975, under which "they

of Agreement signed on January 7, 1979, also amending RP-US

affirm that sovereign equality, territorial integrity and political

In the case of Lyons vs. the United States of America (104 Phil.

Military Bases Agreement, which stresses that "it is the duty of

independence of all States are fundamental principles which

593), where the contract entered into between the plaintiff

members of the United States Forces, the civilian component

both countries scrupulously respect; and that "they confirm

(Harry Lyons, Inc.) and the defendant (U.S. Government)

and their dependents, to respect the laws of the Republic of

that mutual respect for the dignity of each nation shall

involved stevedoring and labor services within the Subic Bay

the Philippines and to abstain from any activity inconsistent

characterize their friendship as well as the alliance between

area, this Court further stated that inasmuch as ". . . the

with the spirit of the Military Bases Agreement and, in

their two countries. "

United States Government. through its agency at Subic Bay,

particular, from any political activity in the Philippines. The

entered into a contract with appellant for stevedoring and

United States shag take all measures within its authority to

The majority opinion negates the statement on the delineation

miscellaneous labor services within the Subic Bay area, a U.S.

insure that they adhere to them (Emphasis supplied).

of the powers, duties and responsibilities of both the

Navy Reservation, it is evident that it can bring an action

Philippine and American Base Commanders that "in the

before our courts for any contractual liability that that

The foregoing duty imposed by the amendment to the

performance of their duties, the Philippine Base Commander

political entity may assume under the contract."

Agreement is further emphasized by No. IV on the economic

and the American Base Commander shall be guided by full

When the U.S. Government, through its agency at Subic Bay,

regard to governments either domestic or foreign. Once a

confirmed the acceptance of a bid of a private company for

foreign government enters into a private contract with the

The sanctity of upholding agreements freely entered into by

the repair of wharves or shoreline in the Subic Bay area, it is

private citizens of another country, such foreign government

the parties cannot be over emphasized. Whether the parties

deemed to have entered into a contract and thus waived the

cannot shield its non-performance or contravention of the

are nations or private individuals, it is to be reasonably

mantle of sovereign immunity from suit and descended to the

terms of the contract under the cloak of non-jurisdiction. To

assumed and expected that the undertakings in the contract

level of the ordinary citizen. Its consent to be sued, therefore,

place such foreign government beyond the jurisdiction of the

will be complied with in good faith.

is implied from its act of entering into a contract (Santos vs.

domestic courts is to give approval to the execution of

Santos, 92 Phil. 281, 284).

unilateral contracts, graphically described in Spanish as

One glaring fact of modern day civilization is that a big and

'contratos leoninos', because one party gets the lion's share to

powerful nation, like the United States of America, can always

Justice and fairness dictate that a foreign government that

the detriment of the other. To give validity to such contract is

overwhelm small and weak nations. The declaration in the

commits a breach of its contractual obligation in the case at

to sanctify bad faith, deceit, fraud. We prefer to adhere to the

United Nations Charter that its member states are equal and

bar by the unilateral cancellation of the award for the project

thesis that all parties in a private contract, including

sovereign, becomes hollow and meaningless because big

by the United States government, through its agency at Subic

governments and the most powerful of them, are amenable to

nations wielding economic and military superiority impose

Bay should not be allowed to take undue advantage of a party

law, and that such contracts are enforceable through the help

upon and dictate to small nations, subverting their sovereignty

who may have legitimate claims against it by seeking refuge

of the courts of justice with jurisdiction to take cognizance of

and dignity as nations. Thus, more often than not, when U.S.

behind the shield of non-suability. A contrary view would

any violation of such contracts if the same had been entered

interest clashes with the interest of small nations, the

render a Filipino citizen, as in the instant case, helpless and

into only by private individuals.

American governmental agencies or its citizens invoke

without redress in his own country for violation of his rights

principles of international law for their own benefit.

committed by the agents of the foreign government professing

Constant resort by a foreign state or its agents to the doctrine

to act in its name.

of State immunity in this jurisdiction impinges unduly upon our

In the case at bar, the efficacy of the contract between the

sovereignty and dignity as a nation. Its application will

U.S. Naval authorities at Subic Bay on one hand, and herein

Appropriate are the words of Justice Perfecto in his dissenting

particularly discourage Filipino or domestic contractors from

private respondent on the other, was honored more in the

opinion in Syquia vs. Almeda Lopez, 84 Phil. 312, 325:

transacting business and entering into contracts with United

breach than in the compliance The opinion of the majority will

States authorities or facilities in the Philippines whether naval,

certainly open the floodgates of more violations of contractual

Although, generally, foreign governments are beyond the

air or ground forces-because the difficulty, if not impossibility,

obligations. American authorities or any foreign government in

jurisdiction of domestic courts of justice, such rule is

of enforcing a validly executed contract and of seeking judicial

the Philippines for that matter, dealing with the citizens of this

inapplicable to cases in which the foreign government enters

remedy in our own courts for breaches of contractual

country, can conveniently seek protective cover under the

into private contracts with the citizens of the court's

obligation

majority opinion. The result is disastrous to the Philippines.

jurisdiction. A contrary view would simply run against all

government, always, looms large, thereby hampering the

principles of decency and violative of all tenets of morals.

growth of Filipino enterprises and creating a virtual monopoly

This opinion of the majority manifests a neo-colonial

in our own country by United States contractors of contracts

mentality. It fosters economic imperialism and foreign political

Moral principles and principles of justice are as valid and

for services or supplies with the various U.S. offices and

ascendancy in our Republic.

applicable as well with regard to private individuals as with

agencies operating in the Philippines.

committed

by

agents

of the

United

States

The doctrine of government immunity from suit cannot and

Neither does the invocation by petitioners of state immunity

revisions or alterations of the Agreement of May 27, 1968, "the

should not serve as an instrument for perpetrating an injustice

from suit express fidelity to paragraph 1 of Article IV of the

discussions shall be conducted on the basis of the principles of

on a citizen (Amigable vs. Cuenca, L-26400, February 29, 1972,

aforesaid amendment of May 2 7, 1968 which directs that "

equality of treatment, the right to organize, and bargain

43 SCRA 360; Ministerio vs. Court of First Instance, L-31635,

contractors and concessionaires performing work for the U.S.

collectively, and respect for the sovereignty of the Republic of

August 31, 1971, 40 SCRA 464).

Armed Forces shall be required by their contract or concession

the Philippines" (Emphasis supplied)

agreements to comply with all applicable Philippine labor laws

Under the doctrine of implied waiver of its non-suability, the

and regulations, " even though paragraph 2 thereof affirms

The majority opinion seems to mock the provision of paragraph

United States government, through its naval authorities at

that "nothing in this Agreement shall imply any waiver by

1 of the joint statement of President Marcos and Vice-

Subic Bay, should be held amenable to lawsuits in our country

either of the two Governments of such immunity under

President Mondale of the United States dated May 4, 1978 that

like any other juristic person.

international law."

"the United States re-affirms that Philippine sovereignty

extends over the bases and that Its base shall be under the

The invocation by the petitioner United States of America is

Reliance by petitioners on the non-suability of the United

command of a Philippine Base Commander, " which is supposed

not in accord with paragraph 3 of Article III of the original RP-

States Government before the local courts, actually clashes

to underscore the joint Communique of President Marcos and

US Military Bases Agreement of March 14, 1947, which states

with No. III on respect for Philippine law of the Memorandum

U.S. President Ford of December 7, 1975, under which "they

that "in the exercise of the above-mentioned rights, powers

of Agreement signed on January 7, 1979, also amending RP-US

affirm that sovereign equality, territorial integrity and political

and authority, the United States agrees that the powers

Military Bases Agreement, which stresses that "it is the duty of

independence of all States are fundamental principles which

granted to it will not be used unreasonably. . ." (Emphasis

members of the United States Forces, the civilian component

both countries scrupulously respect; and that "they confirm

supplied).

and their dependents, to respect the laws of the Republic of

that mutual respect for the dignity of each nation shall

the Philippines and to abstain from any activity inconsistent

characterize their friendship as well as the alliance between

Nor is such posture of the petitioners herein in harmony with

with the spirit of the Military Bases Agreement and, in

their two countries. "

the amendment dated May 27, 1968 to the aforesaid RP-US

particular, from any political activity in the Philippines. The

Military Bases Agreement, which recognizes "the need to

United States shag take all measures within its authority to

The majority opinion negates the statement on the delineation

promote and maintain sound employment practices which will

insure that they adhere to them (Emphasis supplied).

of the powers, duties and responsibilities of both the

assure equality of treatment of all employees ... and

Philippine and American Base Commanders that "in the

continuing favorable employer-employee relations ..." and

The foregoing duty imposed by the amendment to the

performance of their duties, the Philippine Base Commander

"(B)elieving that an agreement will be mutually beneficial and

Agreement is further emphasized by No. IV on the economic

and the American Base Commander shall be guided by full

will strengthen the democratic institutions cherished by both

and social improvement of areas surrounding the bases, which

respect for Philippine sovereignty on the one hand and the

Governments, ... the United States Government agrees to

directs that "moreover, the United States Forces shall procure

assurance of unhampered U.S. military operations on the other

accord preferential employment of Filipino citizens in the

goods and services in the Philippines to the maximum extent

hand and that "they shall promote cooperation understanding

Bases, thus (1) the U.S. Forces in the Philippines shall fill the

feasible" (Emphasis supplied).

and harmonious relations within the Base and with the general

needs for civilian employment by employing Filipino citizens,

etc." (Par. 1, Art. I of the Amendment of May 27, 1968).

public in the proximate vicinity thereof" (par. 2 & par. 3 of the

Under No. VI on labor and taxation of the said amendment of

Annex covered by the exchange of notes, January 7, 1979,

January 6, 1979 in connection with the discussions on possible

between Ambassador Richard W. Murphy and Minister of

Foreign Affairs Carlos P. Romulo, Emphasis supplied)

1,364.4177 hectares; that his title of ownership based on

The background of the present controversy may be briefly

informacion

posesoria

of

his

predecessor-in-interest

be

summarized as follows:

declared legal valid and subsisting and that defendant be

ordered to cancel and nullify all awards to the settlers.

On January 22, 1970, respondent Feliciano filed a complaint

Today is Friday, September 18, 2015

search

with the then Court of First Instance of Camarines Sur against

The defendant, represented by the Land Authority, filed an

the Republic of the Philippines, represented by the Land

answer, raising by way of affirmative defenses lack of

Authority, for the recovery of ownership and possession of a

sufficient cause of action and prescription.

parcel of land, consisting of four (4) lots with an aggregate

area of 1,364.4177 hectares, situated in the Barrio of

On August 29, 1970, the trial court, through Judge Rafael S.

Republic of the Philippines

Salvacion, Municipality of Tinambac, Camarines Sur. Plaintiff

Sison, rendered a decision declaring Lot No. 1, with an area of

SUPREME COURT

alleged that he bought the property in question from Victor

701.9064 hectares, to be the private property of the plaintiff,

Manila

Gardiola by virtue of a Contract of Sale dated May 31, 1952,

"being covered by a possessory information title in the name of

followed by a Deed of Absolute Sale on October 30, 1954; that

his predecessor-in-interest" and declaring said lot excluded

Gardiola had acquired the property by purchase from the heirs

from the NARRA settlement reservation. The court declared

of Francisco Abrazado whose title to the said property was

the rest of the property claimed by plaintiff, i.e. Lots 2, 3 and

evidenced by an informacion posesoria that upon plaintiff's

4, reverted to the public domain.

FIRST DIVISION

G.R. No. 70853 March 12, 1987

purchase of the property, he took actual possession of the

REPUBLIC OF THE PHILIPPINES, petitioner-appellee,

same, introduced various improvements therein and caused it

A motion to intervene and to set aside the decision of August

vs.

to be surveyed in July 1952, which survey was approved by the

29, 1970 was filed by eighty-six (86) settlers, together with the

Director of Lands on October 24, 1954; that on November 1,

barrio council of Pag-asay, alleging among other things that

1954, President Ramon Magsaysay issued Proclamation No. 90

intervenors had been in possession of the land in question for

reserving for settlement purposes, under the administration of

more than twenty (20) years under claim of ownership.

PABLO

FELICIANO

and

INTERMEDIATE APPELLATE

COURT,

respondents-appellants.

the National Resettlement and Rehabilitation Administration

(NARRA), a tract of land situated in the Municipalities of

On January 25, 1971, the court a quo reconsidered its

Tinambac and Siruma, Camarines Sur, after which the NARRA

decision, reopened the case and directed the intervenors to

and its successor agency, the Land Authority, started sub-

file their corresponding pleadings and present their evidence;

Petitioner seeks the review of the decision of the Intermediate

dividing and distributing the land to the settlers; that the

all evidence already presented were to remain but plaintiff, as

Appellate Court dated April 30, 1985 reversing the order of the

property in question, while located within the reservation

well as the Republic of the Philippines, could present

Court of First Instance of Camarines Sur, Branch VI, dated

established under Proclamation No. 90, was the private

additional evidence if they so desire. The plaintiff presented

August 21, 1980, which dismissed the complaint of respondent

property of plaintiff and should therefore be excluded

additional evidence on July 30, 1971, and the case was set for

Pablo Feliciano for recovery of ownership and possession of a

therefrom. Plaintiff prayed that he be declared the rightful

hearing for the reception of intervenors' evidence on August 30

parcel of land on the ground of non-suability of the State.

and true owner of the property in question consisting of

and August 31, 1971.

YAP, J.:

Lising, issued the questioned order dismissing the case for lack

By its caption and its allegation and prayer, the complaint is

On August 30, 1971, the date set for the presentation of the

of jurisdiction. Respondent moved for reconsideration, while

clearly a suit against the State, which under settled

evidence for intervenors, the latter did not appear but

the Solicitor General, on behalf of the Republic of the

jurisprudence is not permitted, except upon a showing that

submitted a motion for postponement and resetting of the

Philippines filed its opposition thereto, maintaining that the

the State has consented to be sued, either expressly or by

hearing on the next day, August 31, 1971. The trial court

dismissal was proper on the ground of non-suability of the

implication through the use of statutory language too plain to

denied the motion for postponement and allowed plaintiff to

State and also on the ground that the existence and/or

be misinterpreted. 2 There is no such showing in the instant

offer his evidence "en ausencia," after which the case would

authenticity of the purported possessory information title of

case. Worse, the complaint itself fails to allege the existence

be deemed submitted for decision. On the following day,

the

of such consent. This is a fatal defect, 3 and on this basis

August 31, 1971, Judge Sison rendered a decision reiterating

demonstrated and that at any rate, the same is not evidence

his decision of August 29, 1970.

of title, or if it is, its efficacy has been lost by prescription and

respondents'

predecessor-in-interest

had

not

been

laches.

alone, the complaint should have been dismissed.

The failure of the petitioner to assert the defense of immunity

A motion for reconsideration was immediately filed by the

from suit when the case was tried before the court a quo, as

intervenors. But before this motion was acted upon, plaintiff

Upon denial of the motion for reconsideration, plaintiff again

alleged by private respondent, is not fatal. It is now settled

filed a motion for execution, dated November 18, 1971. On

went to the Intermediate Appellate Court on petition for

that such defense "may be invoked by the courts sua sponte at

December 10, 1971, the lower court, this time through Judge

certiorari. On April 30, 1985, the respondent appellate court

any stage of the proceedings." 4

Miguel Navarro, issued an order denying the motion for

rendered its decision reversing the order of Judge Lising and

execution and setting aside the order denying intervenors'

remanding the case to the court a quo for further proceedings.

Private respondent contends that the consent of petitioner

motion for postponement. The case was reopened to allow

Hence this petition.

may be read from the Proclamation itself, when it established

intervenors to present their evidence. Unable to secure a

the reservation " subject to private rights, if any there be. "

reconsideration of Judge Navarro's order, the plaintiff went to

We find the petition meritorious. The doctrine of non-suability

We do not agree. No such consent can be drawn from the

the Intermediate Appellate Court on a petition for certiorari.

of the State has proper application in this case. The plaintiff

language of the Proclamation. The exclusion of existing private

Said petition was, however, denied by the Intermediate

has impleaded the Republic of the Philippines as defendant in

rights from the reservation established by Proclamation No. 90

Appellate Court, and petitioners brought the matter to this

an action for recovery of ownership and possession of a parcel

can not be construed as a waiver of the immunity of the State

Court in G.R. No. 36163, which was denied on May 3, 1973

of land, bringing the State to court just like any private person

from suit. Waiver of immunity, being a derogation of

Consequently, the case was remanded to the court a quo for

who is claimed to be usurping a piece of property. A suit for

sovereignty, will not be inferred lightly. but must be construed

further proceedings.

the recovery of property is not an action in rem, but an action

in strictissimi juris. 5 Moreover, the Proclamation is not a

in personam. 1 It is an action directed against a specific party

legislative act. The consent of the State to be sued must

On August 31, 1970, intervenors filed a motion to dismiss,

or parties, and any judgment therein binds only such party or

emanate from statutory authority. Waiver of State immunity

principally on the ground that the Republic of the Philippines

parties.

can only be made by an act of the legislative body.

cannot be sued without its consent and hence the action

respondent herein, is directed against the Republic of the

cannot prosper. The motion was opposed by the plaintiff.

Philippines, represented by the Land Authority, a governmental

Neither is there merit in respondent's submission, which the

agency created by Republic Act No. 3844.

respondent appellate court sustained, on the basis of our

On August 21, 1980, the trial court, through Judge Esteban

The

complaint

filed

by

plaintiff,

the

private

decision in the Begosa case, 6 that the present action is not a

suit against the State within the rule of State immunity from

record of ownership. Such possessory information, therefore,

WHEREFORE, judgment is hereby rendered reversing and

suit, because plaintiff does not seek to divest the Government

remained at best mere prima facie evidence of possession.

setting aside the appealed decision of the Intermediate

of any of its lands or its funds. It is contended that the

Using this possessory information, the respondent could have

Appellate Court, dated April 30, 1985, and affirming the order

complaint involves land not owned by the State, but private

applied for judicial confirmation of imperfect title under the

of the court a quo, dated August 21, 1980, dismissing the

land belonging to the plaintiff, hence the Government is not

Public Land Act, which is an action in rem. However, having

complaint filed by respondent Pablo Feliciano against the

being divested of any of its properties. There is some sophistry

failed to do so, it is rather late for him to pursue this avenue

Republic of the Philippines. No costs.

involved in this argument, since the character of the land

at this time. Respondent must also contend, as the records

sought to be recovered still remains to be established, and the

disclose, with the fact admitted by him and stated in the

plaintiff's action is directed against the State precisely to

decision of the Court a quo that settlers have been occupying

compel the latter to litigate the ownership and possession of

and cultivating the land in question since even before the

the property. In other words, the plaintiff is out to establish

outbreak of the war, which puts in grave doubt his own claim

that he is the owner of the land in question based,

of possession.

incidentally, on an informacion posesoria of dubious value, and

SO ORDERED.

Republic of the Philippines

SUPREME COURT

he seeks to establish his claim of ownership by suing the

Worthy of note is the fact, as pointed out by the Solicitor

Republic of the Philippines in an action in personam.

General, that the informacion posesoria registered in the

Office of the Register of Deed of Camarines Sur on September

Manila

EN BANC

The inscription in the property registry of an informacion

23, 1952 was a "reconstituted" possessory information; it was

posesoria under the Spanish Mortgage Law was a means

"reconstituted from the duplicate presented to this office

provided by the law then in force in the Philippines prior to

(Register of Deeds) by Dr. Pablo Feliciano," without the

the transfer of sovereignty from Spain to the United States of

submission of proof that the alleged duplicate was authentic

REPUBLIC OF THE PHILIPPINES (PRESIDENTIAL COMMISSION ON

America, to record a claimant's actual possession of a piece of

or that the original thereof was lost. Reconstitution can be

GOOD GOVERNMENT), petitioner,

land, established through an ex parte proceeding conducted in

validly made only in case of loss of the original. 10 These

vs.

accordance with prescribed rules. 7 Such inscription merely

circumstances raise grave doubts as to the authenticity and

SANDIGANBAYAN,

furnishes, at best, prima facie evidence of the fact that at the

validity of the "informacion posesoria" relied upon by

DOMINADOR R. SANTIAGO, respondents.

time the proceeding was held, the claimant was in possession

respondent Feliciano. Adding to the dubiousness of said

of the land under a claim of right as set forth in his

document is the fact that "possessory information calls for an

Dominador R. Santiago for and in his own behalf and as counsel

application. 8 The possessory information could ripen into a

area of only 100 hectares," 11 whereas the land claimed by

for respondent Tantoco, Jr.

record of ownership after the lapse of 20 years (later reduced

respondent Feliciano comprises 1,364.4177 hectares, later

to 10 years), upon the fulfillment of the requisites prescribed

reduced to 701-9064 hectares. Courts should be wary in

in Article 393 of the Spanish Mortgage Law.

accepting "possessory information documents, as well as other

purportedly old Spanish titles, as proof of alleged ownership of

There is no showing in the case at bar that the informacion

posesoria held by the respondent had been converted into a

G.R. No. 90478 November 21, 1991

BIENVENIDO

R.

TANTOCO,

JR.

and

NARVASA, J.:p

lands.
Private respondents Bienvenido R. Tantoco, Jr. and Dominador

R. Santiago together with Ferdinand E. Marcos, Imelda R.

purpose thereof lacks merit as it is improper, impertinent and

1989, the PCGG submitted its PRE-TRIAL. 14 The pre-trial was

Marcos, Bienvenido R. Tantoco, Sr., Gliceria R. Tantoco, and

irrelevant under any

however reset to September 11, 1989, and all other parties

Maria Lourdes Tantoco-Pineda-are defendants in Civil Case No.

guise." 7

were required to submit pre-trial briefs on or before that date.

0008 of the Sandiganbayan. The case was commenced on July

15

21, 1987 by the Presidential Commission on Good Government

On March 18, 1988, in compliance with the Order of January

(PCGG) in behalf of the Republic of the Philippines. The

29, 1988, the PCGG filed an Expanded Complaint. 8 As this

On July 27, 1989 Tantoco and Santiago filed with the

complaint which initiated the action was denominated one "for

expanded complaint, Tantoco and Santiago reiterated their

Sandiganbayan a pleading denominated "Interrogatories to

reconveyance,

motion for bill of particulars, through a Manifestation dated

Plaintiff,"

April 11, 1988. 9

Interrogatories to Plaintiff"' 17 as well as a Motion for

reversion,

accounting,

restitution

and

damages," and was avowedly filed pursuant to Executive Order

No. 14 of President Corazon C. Aquino.

16

and

on

August

2,

1989,

an

"Amended

Production and Inspection of Documents. 18

Afterwards, by Resolution dated July 4, 1988, 10 the

After having been served with summons, Tantoco, Jr. and

Sandiganbayan denied the motion to strike out, for bill of

The amended interrogatories chiefly sought factual details

Santiago, instead of filing their answer, jointly filed a "MOTION

particulars, and for leave to file interrogatories, holding them

relative to specific averments of PCGG's amended complaint,

TO STRIKE OUT SOME PORTIONS OF THE COMPLAINT AND FOR

to be without legal and factual basis. Also denied was the

through such questions, for instance, as

BILL OF PARTICULARS OF OTHER PORTIONS" dated Nov. 3, 1987.

PCGG's motion to strike out impertinent pleading dated

1 The PCGG filed an opposition thereto, 2 and the movants, a

February 9, 1988. The Sandiganbayan declared inter alia the

1.

reply to the opposition. 3 By order dated January 29, 1988, the

complaint to be "sufficiently definite and clear enough," there

what specific property or properties does the plaintiff claim it

Sandiganbayan,

in

order

to

expedite

proceedings

In connection with the allegations . . in paragraph 1 . .,

and

are adequate allegations . . which clearly portray the supposed

has the right to recover from defendants Tantoco, Jr. and

accommodate the defendants, gave the PCGG forty-five (45)

involvement and/or alleged participation of defendants-

Santiago for being ill-gotten?

days to expand its complaint to make more specific certain

movants in the transactions described in detail in said

allegations. 4

Complaint," and "the other matters sought for particularization

3.

are evidentiary in nature which should be ventilated in the

(a) . . what specific act or acts . . were committed by

Tantoco and Santiago then presented a "motion for leave to

pre-trial or trial proper . ." It also opined that "(s)ervice of

defendants Tantoco, Jr. and Santiago in "concert with"

file interrogatories under Rule 25 of the Rules of Court" dated

interrogatories before joinder of issue and without leave of

defendant Ferdinand Marcos and in furtherance or pursuit, of

February 1, 1988, and "Interrogatories under Rule 25." 5

court is premature . . (absent) any special or extraordinary

the alleged systematic plan of said defendant Marcos to

Basically, they sought an answer to the question: "Who were

circumstances . . which would justify . . (the same)."

accumulate ill-gotten wealth?"

Ramon Diaz, who verified the complaint) who approved or

Tantoco and Santiago then filed an Answer with Compulsory

5.

authorized the inclusion of Messrs. Bienvenido R. Tantoco, Jr.

Counterclaim under date of July 18, 1988. 11 In response, the

or acts of the defendants Tantoco, Jr. and Santiago . . were

and Dominador R. Santiago as defendants in the . . case?" 6

PCGG presented a "Reply to Answer with Motion to Dismiss

committed by said defendants as part, or in furtherance, of

The PCGG responded by filing a motion dated February 9, 1988

Compulsory Counterclaim " 12

the alleged plan to conceal assets of defendants Ferdinand and

In connection with the allegations . . in paragraph 10

the Commissioners of the PCGG (aside from its Chairman, Hon.

to strike out said motion and interrogatories as being

impertinent, "queer," "weird," or "procedurally bizarre as the

In connection with . . paragraph 13 . ., what specific act

Imelda Marcos?
The case was set for pre-trial on July 31, 1989. 13 On July 25,

7.

In connection with . . paragraph 15(c) . . is it plaintiff's

production and inspection of documents). It argued that

PCGG, in particular, . . (should) answer the interrogatories;"

Inc., including all the assets of said corporation, are

1)

2)

beneficially owned by either or both defendants Ferdinand and

exhibits during the pre-trial on September 11, 1989 anyway,

already been decreed . . as part of the proof of the Complaint

Imelda Marcos and that the defendants Tantoco, Jr. and

the order for "their production and inspection on September 14

upon trial . .;"

Santiago, as well as, the other stockholders of record of the

and 15, are purposeless and unnecessary;"

position or theory of the case that Tourist Duty Free Shops,

since the documents subject thereof would be marked as

same corporation are mere "dummies" of said defendants

Ferdinand and /or Imelda R. Marcos?

3)
2)

movants already know of the existence and contents of

the document which "are clearly described . . (in) plaintiff's

On the other hand, the motion for production and inspection

the interrogatories delve into "factual matters which had

the interrogatories "are frivolous" since they inquire

about "matters of fact . . which defendants . . sought to . .

(extract) through their aborted Motion for Bill of Particulars;"

Pre-Trial Brief;"

of documents prayed for examination and copying of

4)
3)

the interrogatories "are really in the nature of a

the documents are "privileged in character" since they

deposition, which is prematurely filed and irregularly utilized .

the "official records and other evidence" on the basis of

are intended to be used against the PCGG and/or its

. (since) the order of trial calls for plaintiff to first present its

which the verification of the Amended Complaint asserted that

Commissioners in violation of Section 4, Executive Order No. 1,

evidence."

the allegations thereof are "true and correct;"

viz.:

1)

Tantoco and Santiago filed a reply and opposition on

2)

the documents listed in PCGG's Pre-Trial Brief as those

(a) No civil action shall lie against the Commission or any

"intended to be presented and . . marked as exhibits for the

member thereof for anything done or omitted in the discharge

plaintiff;" and

of the task contemplated by this Order.

September 18, 1989.

After hearing, the Sandiganbayan promulgated two (2)

Resolutions on September 29, 1989, the first, denying

3)

"the minutes of the meeting of the PCGG which

No member or staff of the Commission shall be required

reconsideration (of the Resolution allowing production of

chronicles the discussion (if any) and the decision (of the

to testify or produce evidence in any judicial, legislative, or

documents), and the second, reiterating by implication the

Chairman and members) to file the complaint" in the case at

administrative proceeding concerning matters within its

permission to serve the amended interrogatories on the

bar.

official cognizance.

plaintiff (PCGG). 20

By Resolutions dated August 21, 1989 and August 25, 1989, the

It also filed on September 4, 1989 an opposition to the

Hence, this petition for certiorari.

Sandiganbayan admitted the Amended Interrogatories and

Amended Interrogatories, 19 which the Sandiganbayan treated

granted

the

motion

for

production

and

inspection

(b)

of

as a motion for reconsideration of the Resolution of August 21,

The PCGG contends that said orders, both dated September

documents (production being scheduled on September 14 and

1989 (admitting the Amended Interrogatories). The opposition

29, 1989, should be nullified because rendered with grave

15, 1989), respectively.

alleged that

abuse of discretion amounting to excess of jurisdiction. More

particularly, it claims

On September 1, 1989, the PCGG filed a Motion for

1)

the interrogatories "are not specific and do not name the

Reconsideration of the Resolution of August 25, 1989 (allowing

person to whom they are propounded . .," or "who in the

a)

as

regards

the

order

allowing

the

amended

interrogatories to the plaintiff PCGG:

(b)

non-existent, or mere products of the movants' suspicion

and fear.
1)

that said interrogatories are not specific and do not

parties , 26 and production and inspection of documents and

things. 27 Now, it appears to the Court that among far too
many lawyers (and not a few judges), there is, if not a

name the particular individuals to whom they are propounded,

This Court issued a temporary restraining order on October 27,

regrettable unfamiliarity and even outright ignorance about

being addressed only to the PCGG;

1989, directing the Sandiganbayan to desist from enforcing its

the nature, purposes and operation of the modes of discovery,

questioned resolutions of September 29, 1989 in Civil Case No.

at

0008. 21

disinclination to resort to them which is a great pity for the

2)

that the interrogatories deal with factual matters which

the Sandiganbayan (in denying the movants' motion for bill of

least

strong

yet

unreasoned

and

unreasonable

intelligent and adequate use of the deposition-discovery

particulars) had already declared to be part of the PCGG's

After the issues were delineated and argued at no little length

mechanism, coupled with pre-trial procedure, could, as the

proof upon trial; and

by the parties, the Solicitor General withdrew "as counsel for

experience of other jurisdictions convincingly demonstrates,

plaintiff . . with the reservation, however, conformably with

effectively shorten the period of litigation and speed up

that the interrogatories would make PCGG Commissioners

Presidential Decree No. 478, the provisions of Executive Order

adjudication. 28 Hence, a few words about these remedies is

and officers witnesses, in contravention of Executive Order No.

No. 292, as well as the decisional law of 'Orbos v. Civil Service

not at all inappropriate.

14 and related issuances; and

Commission, et al.,' (G.R. No. 92561, September 12, 1990) 22

3)

b)

as regards the order granting the motion for production

of documents:

1)

that movants had not shown any good cause therefor;

to submit his comment/observation on incidents/matters

The resolution of controversies is, as everyone knows, the

pending with this . . Court if called for by circumstances in the

raison d'etre of courts. This essential function is accomplished

interest of the Government or if he is so required by the

by first, the ascertainment of all the material and relevant

Court." 23 This, the Court allowed by Resolution dated January

facts from the pleadings and from the evidence adduced by

21, 1991. 24

the parties, and second, after that determination of the facts

has been completed, by the application of the law thereto to

2)

that some documents sought to be produced and

Subsequently, PCGG Commissioner Maximo A. Maceren advised

the end that the controversy may be settled authoritatively,

inspected had already been presented in Court and marked

the Court that the cases from which the Solicitor General had

definitely and finally.

preliminarily as PCGG's exhibits, and the movants had viewed,

withdrawn would henceforth be under his (Maceren's) charge

scrutinized and even offered objections thereto and made

"and/or any of the following private attorneys: Eliseo B.

It is for this reason that a substantial part of the adjective law

comments thereon; and

Alampay, Jr., Mario E. Ongkiko, Mario Jalandoni and such other

in this jurisdiction is occupied with assuring that all the facts

attorneys as it may later authorize." 25

are indeed presented to the Court; for obviously, to the extent

3)

that the other documents sought to be produced are

either

(a)

privileged in character or confidential in nature and their

that adjudication is made on the basis of incomplete facts, to

The facts not being in dispute, and it appearing that the

that extent there is faultiness in the approximation of

parties have fully ventilated their respective positions, the

objective justice. It is thus the obligation of lawyers no less

Court now proceeds to decide the case.

than of judges to see that this objective is attained; that is to

use is proscribed by the immunity provisions of Executive

Order No. 1, or

say, that there no suppression, obscuration, misrepresentation

Involved in the present proceedings are two of the modes of

or distortion of the facts; and that no party be unaware of any

discovery provided in the Rules of Court: interrogatories to

fact material a relevant to the action, or surprised by any

factual detail suddenly brought to his attention during the

basis of a party's claims or defenses is limned in his pleadings.

one of the most necessary of modern procedure: it not only

trial. 29

The law says that every pleading "shall contain in a methodical

eliminates unessential issue from trials thereby shortening

and logical form, a plain, concise and direct statement of the

them considerably, but also requires parties to play the game

Seventy-one years ago, in Alonso v. Villamor, 30 this Court

ultimate facts on which the party pleading relies for his claim

with the cards on the table so that the possibility of fair

described the nature and object of litigation and in the

or defense, as the case may be, omitting the statement of

settlement before trial is measurably increased. . ." 32

process laid down the standards by which judicial contests are

mere evidentiary facts." 31

to be conducted in this jurisdiction. It said:

As just intimated, the deposition-discovery procedure was

Parenthetically, if this requirement is not observed, i.e., the

designed

A litigation is not a game of technicalities in which one, more

ultimate facts are alleged too generally or "not averred with

cumbersomeness of the pre-trial functions of notice-giving,

deeply schooled and skilled in the subtle art of movement and

sufficient definiteness or particularity to enable . . (an adverse

issue-formulation and fact revelation theretofore performed

position, entraps and destroys the other. It is, rather a contest

party) properly to prepare his responsive pleading or to

primarily by the pleadings.

in which each contending party fully and fairly lays before the

prepare for trial," a bill of particulars seeking a "more definite

court the facts in issue and then brushing aside as wholly

statement" may be ordered by the court on motion of a party.

The various modes or instruments of discovery are meant to

trivial

and

The office of a bill of particulars is, however, limited to

serve (1) as a device, along with the pre-trial hearing under

technicalities of procedure, asks that justice be done on the

making more particular or definite the ultimate facts in a

Rule 20, to narrow and clarify the basic issues between the

merits. Lawsuits, unlike duels, are not to be won by a rapier's

pleading It is not its office to supply evidentiary matters. And

parties, and (2) as a device for ascertaining the facts relative

thrust. Technicality, when it deserts its proper office as an aid

the common perception is that said evidentiary details are

to those issues. The evident purpose is, to repeat, to enable

to justice and becomes its great hindrance and chief enemy,

made known to the parties and the court only during the trial,

parties, consistent with recognized privileges, to obtain the

deserves scant consideration from courts. There should be no

when proof is adduced on the issues of fact arising from the

fullest possible knowledge of the issues and facts before trials

vested right in technicalities. . . .

pleadings.

and thus prevent that said trials are carried on in the dark. 33

The message is plain. It is the duty of each contending party to

The truth is that "evidentiary matters" may be inquired into

To this end, the field of inquiry that may be covered by

lay before the court the facts in issue-fully and fairly; i.e., to

and learned by the parties before the trial. Indeed, it is the

depositions or interrogatories is as broad as when the

present to the court all the material and relevant facts known

purpose and policy of the law that the parties before the

interrogated party is called as a witness to testify orally at

to him, suppressing or concealing nothing, nor preventing

trial if not indeed even before the pre-trial should discover

trial. The inquiry extends to all facts which are relevant,

another party, by clever and adroit manipulation of the

or inform themselves of all the facts relevant to the action,

whether they be ultimate or evidentiary, excepting only those

technical rules of pleading and evidence, from also presenting

not only those known to them individually, but also those

matters which are privileged. The objective is as much to give

all the facts within his knowledge.

known to adversaries; in other words, the desideratum is that

every party the fullest possible information of all the relevant

civil trials should not be carried on in the dark; and the Rules

facts before the trial as to obtain evidence for use upon said

Initially, that undertaking of laying the facts before the court

of Court make this ideal possible through the deposition-

trial. The principle is reflected in Section 2, Rule 24 (governing

is accomplished by the pleadings filed by the parties; but that,

discovery mechanism set forth in Rules 24 to 29. The

depositions) 34 which generally allows the examination of a

only in a very general way. Only "ultimate facts" are set forth

experience in other jurisdictions has been that ample

deponent

in the pleadings; hence, only the barest outline of the facfual

discovery before trial, under proper regulation, accomplished

and

indecisive

all

imperfections

of

form

to

remedy

the

conceded

inadequacy

and

1)

"regarding any matter, not privileged, which is relevant

(a) depositions (whether by oral examination or written

to the subject of the pending action, whether relating to the

interrogatories) under Rule 24, (b) interrogatories to parties

Of course, there are limitations to discovery, even when

claim or defense of any other party;"

under Rule 25, and (c) requests for admissions under Rule 26,

permitted to be undertaken without leave and without judicial

may be availed of without leave of court, and generally,

intervention. "As indicated by (the) Rules . . ., limitations

without court intervention. The Rules of Court explicitly

inevitably arise when it can be shown that the examination is

provide that leave of court is not necessary to avail of said

being conducted in bad faith or in such a manner as to annoy,

"the existence, description, nature, custody, condition

modes of discovery after an answer to the complaint has been

embarass, or oppress the person subject to the inquiry. 39

and location of any books, documents, or other tangible

served. 36 It is only when an answer has not yet been filed

And . . . further limitations come into existence when the

things" and

(but after jurisdiction has been obtained over the defendant or

inquiry touches upon the irrelevant or encroaches upon the

property subject of the action) that prior leave of court is

recognized domains of privilege." 40

2)

(a)

(b)

as well as:

"the identity and location of persons having knowledge of

relevant facts."

needed to avail of these modes of discovery, the reason being

that at that time the issues are not yet joined and the

In fine, the liberty of a party to make discovery is well nigh

disputed facts are not clear. 37

unrestricted if the matters inquired into are otherwise

What is chiefly contemplated is the discovery of every bit of

relevant and not privileged, and the inquiry is made in good

information which may be useful in the preparation for trial,

On the other hand, leave of court is required as regards

such as the identity and location of persons having knowledge

discovery by (a) production or inspection of documents or

of relevant facts; those relevant facts themselves; and the

things in accordance with Rule 27, or (b) physical and mental

It is in light of these broad principles underlying the

existence,

examination of persons under Rule 28, which may be granted

deposition-discovery mechanism, in relation of course to the

upon due application and a showing of due cause.

particular rules directly involved, that the issues in this case

description,

nature,

custody, condition,

and

location of any books, documents, or other tangible things.

Hence, "the deposition-discovery rules are to be accorded a

faith and within the bounds of the law.

will now be resolved.

broad and liberal treatment. No longer can the time-honored

To ensure that availment of the modes of discovery is

cry of "fishing expedition" serve to preclude a party from

otherwise untrammeled and efficacious, the law imposes

The petitioner's objections to the interrogatories served on it

inquiring into the facts underlying his opponent's case. Mutual

serious sanctions on the party who refuses to make discovery,

in accordance with Rule 25 of the Rules of Court cannot be

knowledge of all the relevant facts gathered by both parties is

such as dismissing the action or proceeding or part thereof, or

sustained.

essential to proper litigation. To that end, either party may

rendering judgment by default against the disobedient party;

compel the other to disgorge whatever facts he has in his

contempt of court, or arrest of the party or agent of the party;

It should initially be pointed out as regards the private

possession.

simply

payment of the amount of reasonable expenses incurred in

respondents "Motion for Leave to File Interrogatories" dated

advances the stage at which the disclosure can be compelled

obtaining a court order to compel discovery; taking the

February 1, 1988 41 that it was correct for them to seek

from the time of trial to the period preceding it, thus reducing

matters inquired into as established in accordance with the

leave to serve interrogatories, because discovery was being

the possibility, of surprise, . . . 35

claim of the party seeking discovery; refusal to allow the

availed of before an answer had been served. In such a

disobedient party support or oppose designated claims or

situation, i.e., "after jurisdiction has been obtained over any

In line with this principle of according liberal treatment to the

defenses; striking out pleadings or parts thereof; staying

defendant or over property subject of the action" but before

deposition-discovery mechanism, such modes of discovery as

further proceedings. 38

answer, Section 1 of Rule 24 (treating of depositions), in

The

deposition-discovery

procedure

relation to Section 1 of Rule 25 (dealing with interrogatories to

lack of merit is beside the point. Indeed, as already pointed

expressly allowed by Section 6, Rule 132 of the Rules of Court,

parties) explicitly requires "leave of court." 42 But there was

out above, a bill of particulars may elicit only ultimate facts,

viz.:

no need for the private respondents to seek such leave to

not so-called evidentiary facts. The latter are without doubt

serve their "Amended Interrogatories to Plaintiff" (dated

proper subject of discovery. 44

Sec. 6.

August 2, 1989 43) after they had filed their answer to the

Direct

examination

of

unwilling

or

hostile

witnesses. A party may . . . call an adverse party or an

PCGG's complaint, just as there was no need for the

Neither

may

it

be

validly

argued

that

the

amended

officer, director, or managing agent of a public or private

Sandiganbayan to act thereon.

interrogatories lack specificity. The merest glance at them

corporation or of a partnership or association which is an

disproves the argument. The interrogatories are made to

adverse party, and interrogate him by leading questions and

the

relate to individual paragraphs of the PCGG's expanded

contradict and impeach him in all respects as if he had been

interrogatories in question are defective because they (a) do

complaint and inquire about details of the ultimate facts

called by the adverse party, and the witness thus called may

not name the particular individuals to whom they are

therein alleged. What the PCGG may properly do is to object

be contradicted and impeached by or on behalf of the adverse

propounded, being addressed only to the PCGG, and (b) are

to specific items of the interrogatories, on the ground of lack

party also, and may be cross-examined by the adverse party

"fundamentally the same matters . . (private respondents)

of relevancy, or privilege, or that the inquiries are being made

only upon the subject-matter of his examination in chief.

sought to be clarified through their aborted Motion . . for Bill

in bad faith, or simply to embarass or oppress it. 45 But until

of Particulars" are untenable and quickly disposed of.

such an objection is presented and sustained, the obligation to

The PCGG insinuates that the private respondents are engaged

answer subsists.

on a "fishing expedition," apart from the fact that the

1.

The

petitioner's

first

contention

that

The first part of petitioner's submission is adequately confuted

information sought is immaterial since they are evidently

by Section 1, Rule 25 which states that if the party served with

2.

That the interrogatories deal with factual matters which

meant to establish a claim against PCGG officers who are not

interrogatories is a juridical entity such as "a public or private

will be part of the PCGG's proof upon trial, is not ground for

parties to the action. It suffices to point out that "fishing

corporation or a partnership or association," the same shall be

suppressing them either. As already pointed out, it is the

expeditions" are precisely permitted through the modes of

"answered . . by any officer thereof competent to testify in its

precise purpose of discovery to ensure mutual knowledge of all

discovery. 47 Moreover, a defendant who files a counterclaim

behalf." There is absolutely no reason why this proposition

the relevant facts on the part of all parties even before trial,

against the plaintiff is allowed by the Rules to implead persons

should not be applied by analogy to the interrogatories served

this being deemed essential to proper litigation. This is why

(therefore strangers to the action) as additional defendants on

on the PCGG. That the interrogatories are addressed only to

either party may compel the other to disgorge whatever facts

said counterclaim. This may be done pursuant to Section 14,

the PCGG, without naming any specific commissioner o officer

he has in his possession; and the stage at which disclosure of

Rule 6 of the Rules, to wit:

thereof, is utterly of no consequence, and may not be invoked

evidence is made is advanced from the time of trial to the

as a reason to refuse to answer. As the rule states, the

period preceding it.

Sec. 14.

interrogatories shall be answered "by any officer thereof

competent to testify in its behalf."

Bringing new parties. When the presence of

parties other than those to the original action is required for

3.

Also

unmeritorious

is

the

objection

that

the

the granting of complete relief in the determination of a

interrogatories would make PCGG Commissioners and officers

counterclaim or cross-claim, the court shall order them to be

That the matters on which discovery is desired are the same

witnesses, in contravention of Executive Order No. 14 and

brought in as defendants, if jurisdiction over them can be

matters subject of a prior motion for bill of particulars

related issuances. In the first place, there is nothing at all

obtained."

addressed to the PCGG's amended complaint and denied for

wrong in a party's making his adversary his witness .46 This is

The PCGG's assertion that it or its members are not amenable

suit it brings itself within the operation and scope of all the

privileged position and comes down to the level of the

to any civil action "for anything done or omitted in the

rules governing civil actions, including the rights and duties

defendant. The latter automatically acquires, within certain

discharge of the task contemplated by . . (Executive) Order

under the rules of discovery. Otherwise, the absurd would have

limits, the right to set up whatever claims and other defenses

(No. 1)," is not a ground to refuse to answer the

to be conceded, that while the parties it has impleaded as

he might have against the state. . . . (Sinco, Philippine

interrogatories. The disclosure of facto relevant to the action

defendants may be required to "disgorge all the facts" within

Political Law, Tenth E., pp. 36-37, citing U.S. vs. Ringgold, 8

and which are not self-incriminatory or otherwise privileged is

their knowledge and in their possession, it may not itself be

Pet. 150, 8 L. ed. 899)" 51

one thing; the matter of whether or not liability may arise

subject to a like compulsion.

from the facts disclosed in light of Executive Order

It can hardly be doubted that in exercising the right of

No. 1, is another. No doubt, the latter proposition may

The State is, of course, immune from suit in the sense that it

eminent domain, the State exercises its jus imperii, as

properly be set up by way of defense in the action.

cannot, as a rule, be sued without its consent. But it is

distinguished from its proprietary rights or jus gestionis. Yet,

axiomatic that in filing an action, it divests itself of its

even in that area, it has been held that where private property

The apprehension has been expressed that the answers to the

sovereign character and sheds its immunity from suit,

has been taken in expropriation without just compensation

interrogatories

descending to the level of an ordinary litigant. The PCGG

being paid, the defense of immunity from suit cannot be set

counterclaim against the PCGG or its members and officers.

cannot claim a superior or preferred status to the State, even

up by the State against an action for payment by the owner. 52

They will be. The private respondents have made no secret

while assuming to represent or act for the State. 48

may

be

utilized

as

foundation

for

that this is in fact their intention. Withal, the Court is unable

The Court also finds itself unable to sustain the PCGG's other

to uphold the proposition that while the PCGG obviously feels

The suggestion 49 that the State makes no implied waiver of

principal contention, of the nullity of the Sandiganbayan's

itself at liberty to bring actions on the basis of its study and

immunity by filing suit except when in so doing it acts in, or in

Order

appreciation of the evidence in its possession, the parties sued

matters concerning, its proprietary or non-governmental

documents and things allegedly in its possession.

should not be free to file counterclaims in the same actions

capacity, is unacceptable; it attempts a distinction without

against the PCGG or its officers for gross neglect or ignorance,

support in principle or precedent. On the contrary

if not downright bad faith or malice in the commencement or

for

the

production

and

inspection

of

specified

The Court gives short shrift to the argument that some

documents sought to be produced and inspected had already

initiation of such judicial proceedings, or that in the actions

The consent of the State to be sued may be given expressly or

been presented in Court and marked preliminarily as PCGG's

that it may bring, the PCGG may opt not to be bound by rule

impliedly. Express consent may be manifested either through a

exhibits, the movants having in fact viewed, scrutinized and

applicable to the parties it has sued, e.g., the rules of

general law or a special law. Implied consent is given when the

even offered objections thereto and made comments thereon.

discovery.

State itself commences litigation or when it enters into a

Obviously, there is nothing secret or confidential about these

contract. 50

documents. No serious objection can therefore be presented

So, too, the PCGG's postulation that none of its members may

to the desire of the private respondents to have copies of

be "required to testify or produce evidence in any judicial . .

The immunity of the State from suits does not deprive it of the

those documents in order to study them some more or

proceeding concerning matters within its official cognizance,"

right to sue private parties in its own courts. The state as

otherwise use them during the trial for any purpose allowed by

has no application to a judicial proceeding it has itself

plaintiff may avail itself of the different forms of actions open

law.

initiated. As just suggested, the act of bringing suit must entail

to private litigants. In short, by taking the initiative in an

a waiver of the exemption from giving evidence; by bringing

action against the private parties, the state surrenders its

The PCGG says that some of the documents are non-existent.

This it can allege in response to the corresponding question in

directly to a party of a letter setting forth a list of least

Fernan, C.J., Gutierrez, Jr., Paras, Feliciano, Padilla, Bidin,

the interrogatories, and it will incur no sanction for doing so

questions with the request that they be answered individually.

Grio-Aquino, Medialdea, Regalado and Davide, Jr., JJ.,

unless it is subsequently established that the denial is false.

55 That is all. The service of such a communication on the

concur.

party has the effect of imposing on him the obligation of

The claim that use of the documents is proscribed by

answering the questions "separately and fully in writing

Executive Order No. 1 has already been dealt with. The PCGG

underoath," and serving "a copy of the answers on the party

is however at liberty to allege and prove that said documents

submitting the interrogatories within fifteen (15) days after

fall within some other privilege, constitutional or statutory.

service of the interrogatories . . ." 56 The sanctions for

Melencio-Herrera, J., I also join Justice Cruz's concurrence.

Romero, J., took no part.

refusing to make discovery have already been mentioned. 57

The Court finally finds that, contrary to the petitioner's theory,

So, too, discovery under Rule 26 is begun by nothing more

there is good cause for the production and inspection of the

complex than the service on a party of a letter or other

documents subject of the motion dated August 3, 1989. 53

written communication containing a request that specific facts

Some of the documents are, according to the verification of

therein set forth and/or particular documents copies of which

the amended complaint, the basis of several of the material

are thereto appended, be admitted in writing. 58 That is all.

allegations of said complaint. Others, admittedly, are to be

Again, the receipt of such a communication by the party has

used in evidence by the plaintiff. It is matters such as these

the effect of imposing on him the obligation of serving the

into which inquiry is precisely allowed by the rules of

party requesting admission with "a sworn statement either

discovery, to the end that the parties may adequately prepare

denying specifically the matters of which an admission is

for pre-trial and trial. The only other documents sought to be

requested or setting forth in detail the reasons why he cannot

produced are needed in relation to the allegations of the

truthfully either admit or deny those matters," failing in which

counterclaim. Their relevance is indisputable; their disclosure

"(e)ach of the matters of which admission is requested shall be

I am delighted to concurr with Mr. Justice Andres R. Narvasa in

may not be opposed.

deemed admitted." 59 The taking of depositions in accordance

his scholarly ponencia which, besides reaching a conclusion

with Rule 24 (either on oral examination or by written

sustained by the applicable law and jurisprudence, makes for

One last word. Due no doubt to the deplorable unfamiliarity

interrogatories) while somewhat less simple, is nonetheless by

reading both pleasurable and instructive. One function of the

respecting the nature, purposes and operation of the modes of

no means as complicated as seems to be the lamentably

court not generally appreciated is to educate the reader on

discovery earlier

extensive notion.

the intricacies and even the mustique of the law. The opinion

mentioned, 54 there also appears to be a widely entertained

Separate Opinions

CRUZ, J., concurring:

performs this function with impressive expertise and makes

idea that application of said modes is a complicated matter,

WHEREFORE, the petition is DENIED, without pronouncement

the modes of discovery less esoteric or inaccessible to many

unduly expensive and dilatory. Nothing could be farther from

as to costs. The temporary restraining order issued on October

members of the bar.

the truth. For example, as will already have been noted from

27, 1989 is hereby LIFTED AND SET ASIDE.

the preceding discussion, all that is entailed to activate or put

in motion the process of discovery by interrogatories to parties
under Rule 25 of the Rules of Court, is simply the delivery

SO ORDERED.
# Separate Opinions

CRUZ, J., concurring:

This is an appeal from the decision of the Court of First

motion of the defendants, against the Republic of the

Instance of Cebu in its Civil Case No. R-5977, dismissing the

Philippines

plaintiff's complaint.

Commissioner of Public Highways for the recovery of

I am delighted to concurr with Mr. Justice Andres R. Narvasa in

and

Nicolas

Cuenca,

in

his

capacity

as

ownership and possession of the 6,167 square meters of land

his scholarly ponencia which, besides reaching a conclusion

Victoria Amigable, the appellant herein, is the registered

traversed by the Mango and Gorordo Avenues. She also sought

sustained by the applicable law and jurisprudence, makes for

owner of Lot No. 639 of the Banilad Estate in Cebu City as

the payment of compensatory damages in the sum of

coding both pleasurable and instructive. One function of the

shown by Transfer Certificate of Title No. T-18060, which

P50,000.00 for the illegal occupation of her land, moral

court not generally appreciated is to educate the reader on

superseded Transfer Certificate of Title No. RT-3272 (T-3435)

damages in the sum of P25,000.00, attorney's fees in the sum

the intricacies and even the mustique of the law. The opinion

issued to her by the Register of Deeds of Cebu on February 1,

of P5,000.00 and the costs of the suit.

performs this function with impressive expertise and makes

1924. No annotation in favor of the government of any right or

the modes of discovery less esoteric or inaccessible to many

interest in the property appears at the back of the certificate.

Within the reglementary period the defendants filed a joint

members of the bar.

Without

the

answer denying the material allegations of the complaint and

government used a portion of said lot, with an area of 6,167

interposing the following affirmative defenses, to wit: (1) that

square meters, for the construction of the Mango and Gorordo

the action was premature, the claim not having been filed first

Avenues.

with the Office of the Auditor General; (2) that the right of

Republic of the Philippines

prior

expropriation

or

negotiated

sale,

SUPREME COURT

action for the recovery of any amount which might be due the

Manila

EN BANC

G.R. No. L-26400

It appears that said avenues were already existing in 1921

plaintiff, if any, had already prescribed; (3) that the action

although "they were in bad condition and very narrow, unlike

being a suit against the Government, the claim for moral

the wide and beautiful avenues that they are now," and "that

damages, attorney's fees and costs had no valid basis since as

the tracing of said roads was begun in 1924, and the formal

to these items the Government had not given its consent to be

construction in

sued; and (4) that inasmuch as it was the province of Cebu

1925." *

that appropriated and used the area involved in the

February 29, 1972

construction of Mango Avenue, plaintiff had no cause of action

On March 27, 1958 Amigable's counsel wrote the President of

against the defendants.

VICTORIA AMIGABLE, plaintiff-appellant,

the Philippines, requesting payment of the portion of her lot

vs.

which had been appropriated by the government. The claim

During the scheduled hearings nobody appeared for the

NICOLAS CUENCA, as Commissioner of Public Highways and

was indorsed to the Auditor General, who disallowed it in his

defendants notwithstanding due notice, so the trial court

REPUBLIC OF THE PHILIPPINES, defendants-appellees.

9th Indorsement dated December 9, 1958. A copy of said

proceeded to receive the plaintiff's evidence ex parte. On July

indorsement was transmitted to Amigable's counsel by the

29, 1959 said court rendered its decision holding that it had no

Office of the President on January 7, 1959.

jurisdiction over the plaintiff's cause of action for the recovery

of possession and ownership of the portion of her lot in

MAKALINTAL, J.:p

On February 6, 1959 Amigable filed in the court a quo a

question on the ground that the government cannot be sued

complaint, which was later amended on April 17, 1959 upon

without its consent; that it had neither original nor appellate

jurisdiction to hear, try and decide plaintiff's claim for

tender to the party entitled to such payment of the amount

As regards the claim for damages, the plaintiff is entitled

compensatory damages in the sum of P50,000.00, the same

fixed, may it "have the right to enter in and upon the land so

thereto in the form of legal interest on the price of the land

being a money claim against the government; and that the

condemned, to appropriate the same to the public use defined

from the time it was taken up to the time that payment is

claim for moral damages had long prescribed, nor did it have

in the judgment." If there were an observance of procedural

made by the government. 3 In addition, the government should

jurisdiction over said claim because the government had not

regularity, petitioners would not be in the sad plaint they are

pay for attorney's fees, the amount of which should be fixed by

given its consent to be sued. Accordingly, the complaint was

now. It is unthinkable then that precisely because there was a

the trial court after hearing.

dismissed. Unable to secure a reconsideration, the plaintiff

failure to abide by what the law requires, the government

appealed to the Court of Appeals, which subsequently certified

would stand to benefit. It is just as important, if not more so,

WHEREFORE, the decision appealed from is hereby set aside

the case to Us, there being no question of fact involved.

that there be fidelity to legal norms on the part of officialdom

and the case remanded to the court a quo for the

if the rule of law were to be maintained. It is not too much to

determination of compensation, including attorney's fees, to

The issue here is whether or not the appellant may properly

say that when the government takes any property for public

which the appellant is entitled as above indicated. No

sue the government under the facts of the case.

use, which is conditioned upon the payment of just

pronouncement as to costs

compensation, to be judicially ascertained, it makes manifest

In the case of Ministerio vs. Court of First Instance of Cebu, 1

that it submits to the jurisdiction of a court. There is no

Republic of the Philippines

involving a claim for payment of the value of a portion of land

thought then that the doctrine of immunity from suit could

SUPREME COURT

used for the widening of the Gorordo Avenue in Cebu City, this

still be appropriately invoked.

Manila

where the government takes away property from a private

Considering that no annotation in favor of the government

EN BANC

landowner for public use without going through the legal

appears at the back of her certificate of title and that she has

process of expropriation or negotiated sale, the aggrieved

not executed any deed of conveyance of any portion of her lot

party may properly maintain a suit against the government

to the government, the appellant remains the owner of the

without thereby violating the doctrine of governmental

whole lot. As registered owner, she could bring an action to

E. MERRITT, plaintiff-appellant,

immunity from suit without its consent. We there said: .

recover possession of the portion of land in question at

vs.

anytime because possession is one of the attributes of

GOVERNMENT OF THE PHILIPPINE ISLANDS, defendant-

... . If the constitutional mandate that the owner be

ownership. However, since restoration of possession of said

appellant.

compensated for property taken for public use were to be

portion by the government is neither convenient nor feasible

respected, as it should, then a suit of this character should not

at this time because it is now and has been used for road

Crossfield and O'Brien for plaintiff.

be summarily dismissed. The doctrine of governmental

purposes, the only relief available is for the government to

Attorney-General Avancea for defendant..

immunity from suit cannot serve as an instrument for

make due compensation which it could and should have done

perpetrating an injustice on a citizen. Had the government

years ago. To determine the due compensation for the land,

followed the procedure indicated by the governing law at the

the basis should be the price or value thereof at the time of

time, a complaint would have been filed by it, and only upon

the taking. 2

Court, through Mr. Justice Enrique M. Fernando, held that

payment of the compensation fixed by the judgment, or after

G.R. No. L-11154

March 21, 1916

TRENT, J.:

This is an appeal by both parties from a judgment of the Court

of First Instance of the city of Manila in favor of the plaintiff

the ordinance and the Motor Vehicle Act, turned suddenly and

This latter weakness was always noticed when the plaintiff had

for the sum of P14,741, together with the costs of the cause.

unexpectedly and long before reaching the center of the

to do any difficult mental labor, especially when he attempted

street, into the right side of Taft Avenue, without having

to use his money for mathematical calculations.

Counsel for the plaintiff insist that the trial court erred (1) "in

sounded any whistle or horn, by which movement it struck the

limiting the general damages which the plaintiff suffered to

plaintiff, who was already six feet from the southwestern

According to the various merchants who testified as witnesses,

P5,000, instead of P25,000 as claimed in the complaint," and

point or from the post place there.

the plaintiff's mental and physical condition prior to the

(2) "in limiting the time when plaintiff was entirely disabled to

accident was excellent, and that after having received the

two months and twenty-one days and fixing the damage

By reason of the resulting collision, the plaintiff was so

injuries that have been discussed, his physical condition had

accordingly in the sum of P2,666, instead of P6,000 as claimed

severely injured that, according to Dr. Saleeby, who examined

undergone a noticeable depreciation, for he had lost the

by plaintiff in his complaint."

him on the very same day that he was taken to the General

agility, energy, and ability that he had constantly displayed

Hospital, he was suffering from a depression in the left

before the accident as one of the best constructors of wooden

The Attorney-General on behalf of the defendant urges that

parietal region, a would in the same place and in the back part

buildings and he could not now earn even a half of the income

the trial court erred: (a) in finding that the collision between

of his head, while blood issued from his nose and he was

that he had secured for his work because he had lost 50 per

the plaintiff's motorcycle and the ambulance of the General

entirely unconscious.

cent of his efficiency. As a contractor, he could no longer, as he

Hospital was due to the negligence of the chauffeur; (b) in

had before done, climb up ladders and scaffoldings to reach

holding that the Government of the Philippine Islands is liable

The marks revealed that he had one or more fractures of the

for the damages sustained by the plaintiff as a result of the

skull and that the grey matter and brain was had suffered

collision, even if it be true that the collision was due to the

material injury. At ten o'clock of the night in question, which

As a consequence of the loss the plaintiff suffered in the

negligence of the chauffeur; and (c) in rendering judgment

was the time set for performing the operation, his pulse was so

efficiency of his work as a contractor, he had to dissolved the

against the defendant for the sum of P14,741.

weak and so irregular that, in his opinion, there was little

partnership he had formed with the engineer. Wilson, because

hope that he would live. His right leg was broken in such a way

he was incapacitated from making mathematical calculations

The trial court's findings of fact, which are fully supported by

that the fracture extended to the outer skin in such manner

on account of the condition of his leg and of his mental

the record, are as follows:

that it might be regarded as double and the would be exposed

faculties, and he had to give up a contract he had for the

to infection, for which reason it was of the most serious

construction of the Uy Chaco building."

It is a fact not disputed by counsel for the defendant that

the highest parts of the building.

nature.

when the plaintiff, riding on a motorcycle, was going toward

We may say at the outset that we are in full accord with the

the western part of Calle Padre Faura, passing along the west

At another examination six days before the day of the trial, Dr.

trial court to the effect that the collision between the

side thereof at a speed of ten to twelve miles an hour, upon

Saleeby noticed that the plaintiff's leg showed a contraction of

plaintiff's motorcycle and the ambulance of the General

crossing Taft Avenue and when he was ten feet from the

an inch and a half and a curvature that made his leg very weak

Hospital was due solely to the negligence of the chauffeur.

southwestern intersection of said streets, the General Hospital

and painful at the point of the fracture. Examination of his

ambulance, upon reaching said avenue, instead of turning

head revealed a notable readjustment of the functions of the

The two items which constitute a part of the P14,741 and

toward the south, after passing the center thereof, so that it

brain and nerves. The patient apparently was slightly deaf,

which are drawn in question by the plaintiff are (a) P5,000,

would be on the left side of said avenue, as is prescribed by

had a light weakness in his eyes and in his mental condition.

the award awarded for permanent injuries, and (b) the P2,666,

the amount allowed for the loss of wages during the time the

plaintiff or extended the defendant's liability to any case not

plaintiff was incapacitated from pursuing his occupation. We

Whereas it is not known who is responsible for the accident

find nothing in the record which would justify us in increasing

nor is it possible to determine the amount of damages, if any,

the amount of the first. As to the second, the record shows,

to which the claimant is entitled; and

and the trial court so found, that the plaintiff's services as a

previously recognized.

All admit that the Insular Government (the defendant) cannot

be sued by an individual without its consent. It is also

contractor were worth P1,000 per month. The court, however,

Whereas the Director of Public Works and the Attorney-General

admitted that the instant case is one against the Government.

limited the time to two months and twenty-one days, which

recommended that an Act be passed by the Legislature

As the consent of the Government to be sued by the plaintiff

the plaintiff was actually confined in the hospital. In this we

authorizing Mr. E. Merritt to bring suit in the courts against the

was entirely voluntary on its part, it is our duty to look

think there was error, because it was clearly established that

Government, in order that said questions may be decided:

carefully into the terms of the consent, and render judgment

the plaintiff was wholly incapacitated for a period of six

Now, therefore,

accordingly.

two months and twenty-one days while the remainder of the

By authority of the United States, be it enacted by the

The plaintiff was authorized to bring this action against the

six months was spent in his home, would not prevent recovery

Philippine Legislature, that:

Government "in order to fix the responsibility for the collision

months. The mere fact that he remained in the hospital only

for the whole time. We, therefore, find that the amount of

between his motorcycle and the ambulance of the General

damages sustained by the plaintiff, without any fault on his

SECTION 1.

E. Merritt is hereby authorized to bring suit in

Hospital and to determine the amount of the damages, if any,

part, is P18,075.

the Court of First Instance of the city of Manila against the

to which Mr. E. Merritt is entitled on account of said collision, .

Government of the Philippine Islands in order to fix the

. . ." These were the two questions submitted to the court for

As the negligence which caused the collision is a tort

responsibility for the collision between his motorcycle and the

determination. The Act was passed "in order that said

committed by an agent or employee of the Government, the

ambulance of the General Hospital, and to determine the

questions may be decided." We have "decided" that the

inquiry at once arises whether the Government is legally-liable

amount of the damages, if any, to which Mr. E. Merritt is

accident was due solely to the negligence of the chauffeur,

for the damages resulting therefrom.

entitled on account of said collision, and the Attorney-General

who was at the time an employee of the defendant, and we

of the Philippine Islands is hereby authorized and directed to

have also fixed the amount of damages sustained by the

appear at the trial on the behalf of the Government of said

plaintiff as a result of the collision. Does the Act authorize us

Islands, to defendant said Government at the same.

to hold that the Government is legally liable for that amount?

Act No. 2457, effective February 3, 1915, reads:

An Act authorizing E. Merritt to bring suit against the

Government of the Philippine Islands and authorizing the

If not, we must look elsewhere for such authority, if it exists.

SEC. 2.

This Act shall take effect on its passage.

Attorney-General of said Islands to appear in said suit.

The Government of the Philippine Islands having been

Enacted, February 3, 1915.

Whereas a claim has been filed against the Government of the

"modeled after the Federal and State Governments in the

United States," we may look to the decisions of the high courts

Philippine Islands by Mr. E. Merritt, of Manila, for damages

Did the defendant, in enacting the above quoted Act, simply

of that country for aid in determining the purpose and scope of

resulting from a collision between his motorcycle and the

waive its immunity from suit or did it also concede its liability

Act No. 2457.

ambulance of the General Hospital on March twenty-fifth,

to the plaintiff? If only the former, then it cannot be held that

nineteen hundred and thirteen;

the Act created any new cause of action in favor of the

In the United States the rule that the state is not liable for the

torts committed by its officers or agents whom it employs,

individuals to sue the state where the cause of action arises

acts of its officers, and that the suit now stands just as it

except when expressly made so by legislative enactment, is

out of either fort or contract, the rule is stated in 36 Cyc.,

would stand between private parties. It is difficult to see how

well settled. "The Government," says Justice Story, "does not

915, thus:

the act does, or was intended to do, more than remove the

undertake to guarantee to any person the fidelity of the

state's immunity from suit. It simply gives authority to

officers or agents whom it employs, since that would involve it

By consenting to be sued a state simply waives its immunity

commence

in all its operations in endless embarrassments, difficulties and

from suit. It does not thereby concede its liability to plaintiff,

controversies with the estate. Nowhere in the act is there a

losses, which would be subversive of the public interest."

or create any cause of action in his favor, or extend its liability

whisper or suggestion that the court or courts in the

(Claussen vs. City of Luverne, 103 Minn., 491, citing U. S. vs.

to any cause not previously recognized. It merely gives a

disposition of the suit shall depart from well established

Kirkpatrick, 9 Wheat, 720; 6 L. Ed., 199; and Beers vs. States,

remedy to enforce a preexisting liability and submits itself to

principles of law, or that the amount of damages is the only

20 How., 527; 15 L. Ed., 991.)

the jurisdiction of the court, subject to its right to interpose

question to be settled. The act opened the door of the court

any lawful defense.

to the plaintiff. It did not pass upon the question of liability,

In the case of Melvin vs. State (121 Cal., 16), the plaintiff

suit

for

the

purpose

of

settling

plaintiff's

but left the suit just where it would be in the absence of the

sought to recover damages from the state for personal injuries

In Apfelbacher vs. State (152 N. W., 144, advanced sheets),

state's immunity from suit. If the Legislature had intended to

received on account of the negligence of the state officers at

decided April 16, 1915, the Act of 1913, which authorized the

change the rule that obtained in this state so long and to

the state fair, a state institution created by the legislature for

bringing of this suit, read:

declare liability on the part of the state, it would not have left

the purpose of improving agricultural and kindred industries;

so important a matter to mere inference, but would have done

to disseminate information calculated to educate and benefit

SECTION 1.

Authority

is

hereby

given

to

George

so in express terms. (Murdock Grate Co. vs. Commonwealth,

the industrial classes; and to advance by such means the

Apfelbacher, of the town of Summit, Waukesha County,

material interests of the state, being objects similar to those

Wisconsin, to bring suit in such court or courts and in such

sought by the public school system. In passing upon the

form or forms as he may be advised for the purpose of settling

In Denning vs. State (123 Cal., 316), the provisions of the Act

question of the state's liability for the negligent acts of its

and determining all controversies which he may now have with

of 1893, relied upon and considered, are as follows:

officers or agents, the court said:

the State of Wisconsin, or its duly authorized officers and

152 Mass., 28; 24 N.E., 854; 8 L. R. A., 399.)

agents, relative to the mill property of said George

All persons who have, or shall hereafter have, claims on

No claim arises against any government is favor of an

Apfelbacher, the fish hatchery of the State of Wisconsin on the

contract or for negligence against the state not allowed by the

individual,

or

Bark River, and the mill property of Evan Humphrey at the

state board of examiners, are hereby authorized, on the terms

unauthorized exercise of powers by its officers or agents.

lower end of Nagawicka Lake, and relative to the use of the

and conditions herein contained, to bring suit thereon against

(Citing Gibbons vs. U. S., 8 Wall., 269; Clodfelter vs. State, 86

waters of said Bark River and Nagawicka Lake, all in the

the state in any of the courts of this state of competent

N. C., 51, 53; 41 Am. Rep., 440; Chapman vs. State, 104 Cal.,

county of Waukesha, Wisconsin.

jurisdiction, and prosecute the same to final judgment. The

by

reason

of

the

misfeasance,

laches,

690; 43 Am. St. Rep., 158; Green vs. State, 73 Cal., 29; Bourn
vs. Hart, 93 Cal., 321; 27 Am. St. Rep., 203; Story on Agency,

rules of practice in civil cases shall apply to such suits, except

In determining the scope of this act, the court said:

as herein otherwise provided.

Plaintiff claims that by the enactment of this law the

And the court said:

sec. 319.)

As

to

the

scope

of

legislative

enactments

permitting

legislature admitted liability on the part of the state for the

This statute has been considered by this court in at least two

the defendant's liability for the negligent acts of its officers,

cases, arising under different facts, and in both it was held

agents, and employees. Paragraph 5 of article 1903 of the Civil

that said statute did not create any liability or cause of action

Code reads:

against the state where none existed before, but merely gave

Civ., 24.)

That the Civil Code in chapter 2, title 16, book 4, regulates

the obligations which arise out of fault or negligence; and

an additional remedy to enforce such liability as would have

The state is liable in this sense when it acts through a special

whereas in the first article thereof. No. 1902, where the

existed if the statute had not been enacted. (Chapman vs.

agent, but not when the damage should have been caused by

general principle is laid down that where a person who by an

State, 104 Cal., 690; 43 Am. St. Rep., 158; Melvin vs. State,

the official to whom properly it pertained to do the act

act or omission causes damage to another through fault or

121 Cal., 16.)

performed, in which case the provisions of the preceding

negligence, shall be obliged to repair the damage so done,

article shall be applicable.

reference is made to acts or omissions of the persons who

A statute of Massachusetts enacted in 1887 gave to the

superior

court

"jurisdiction

of

all

claims

against

the

commonwealth, whether at law or in equity," with an

directly or indirectly cause the damage, the following articles

The supreme court of Spain in defining the scope of this

refers to this persons and imposes an identical obligation upon

paragraph said:

those who maintain fixed relations of authority and superiority

exception not necessary to be here mentioned. In construing

this

statute

the

court,

in

Murdock

Grate

Co.

vs.

over the authors of the damage, because the law presumes

That the obligation to indemnify for damages which a third

that in consequence of such relations the evil caused by their

person causes to another by his fault or negligence is based, as

own fault or negligence is imputable to them. This legal

is evidenced by the same Law 3, Title 15, Partida 7, on that

presumption gives way to proof, however, because, as held in

The statute we are discussing disclose no intention to create

the person obligated, by his own fault or negligence, takes

the last paragraph of article 1903, responsibility for acts of

against the state a new and heretofore unrecognized class of

part in the act or omission of the third party who caused the

third persons ceases when the persons mentioned in said

liabilities, but only an intention to provide a judicial tribunal

damage. It follows therefrom that the state, by virtue of such

article prove that they employed all the diligence of a good

where well recognized existing liabilities can be adjudicated.

provisions of law, is not responsible for the damages suffered

father of a family to avoid the damage, and among these

by private individuals in consequence of acts performed by its

persons, called upon to answer in a direct and not a subsidiary

In Sipple vs. State (99 N. Y., 284), where the board of the

employees in the discharge of the functions pertaining to their

manner, are found, in addition to the mother or the father in a

canal claims had, by the terms of the statute of New York,

office, because neither fault nor even negligence can be

proper case, guardians and owners or directors of an

jurisdiction of claims for damages for injuries in the

presumed on the part of the state in the organization of

establishment or enterprise, the state, but not always, except

management of the canals such as the plaintiff had sustained,

branches of public service and in the appointment of its

when it acts through the agency of a special agent, doubtless

Chief Justice Ruger remarks: "It must be conceded that the

agents; on the contrary, we must presuppose all foresight

because and only in this case, the fault or negligence, which is

state can be made liable for injuries arising from the

humanly possible on its part in order that each branch of

the original basis of this kind of objections, must be presumed

negligence of its agents or servants, only by force of some

service serves the general weal an that of private persons

to lie with the state.

positive statute assuming such liability."

interested in its operation. Between these latter and the

Commonwealth (152 Mass., 28), said:

state, therefore, no relations of a private nature governed by

That although in some cases the state might by virtue of the

It being quite clear that Act No. 2457 does not operate to

the civil law can arise except in a case where the state acts as

general principle set forth in article 1902 respond for all the

extend the Government's liability to any cause not previously

a judicial person capable of acquiring rights and contracting

damage that is occasioned to private parties by orders or

recognized, we will now examine the substantive law touching

obligations. (Supreme Court of Spain, January 7, 1898; 83 Jur.

resolutions which by fault or negligence are made by branches

of the central administration acting in the name and

law of civil responsibility. Consequently, the trial court in not

representation of the state itself and as an external expression

so deciding and in sentencing the said entity to the payment of

of its sovereignty in the exercise of its executive powers, yet

damages, caused by an official of the second class referred to,

said article is not applicable in the case of damages said to

has by erroneous interpretation infringed the provisions of

have been occasioned to the petitioners by an executive

articles 1902 and 1903 of the Civil Code. (Supreme Court of

official, acting in the exercise of his powers, in proceedings to

Spain, July 30, 1911; 122 Jur. Civ., 146.)

enforce the collections of certain property taxes owing by the

owner of the property which they hold in sublease.

It is, therefore, evidence that the State (the Government of

the Philippine Islands) is only liable, according to the above

That the responsibility of the state is limited by article 1903 to

quoted decisions of the Supreme Court of Spain, for the acts of

the case wherein it acts through a special agent (and a special

its agents, officers and employees when they act as special

agent, in the sense in which these words are employed, is one

agents within the meaning of paragraph 5 of article 1903,

who receives a definite and fixed order or commission, foreign

supra, and that the chauffeur of the ambulance of the General

to the exercise of the duties of his office if he is a special

Hospital was not such an agent.

official) so that in representation of the state and being bound

to act as an agent thereof, he executes the trust confided to

For the foregoing reasons, the judgment appealed from must

him. This concept does not apply to any executive agent who

be reversed, without costs in this instance. Whether the

is an employee of the acting administration and who on his

Government intends to make itself legally liable for the

own responsibility performs the functions which are inherent

amount of damages above set forth, which the plaintiff has

in and naturally pertain to his office and which are regulated

sustained by reason of the negligent acts of one of its

by law and the regulations." (Supreme Court of Spain, May 18,

employees, by legislative enactment and by appropriating

1904; 98 Jur. Civ., 389, 390.)

sufficient funds therefor, we are not called upon to determine.

This matter rests solely with the Legislature and not with the

That according to paragraph 5 of article 1903 of the Civil Code

and the principle laid down in a decision, among others, of the
18th of May, 1904, in a damage case, the responsibility of the
state is limited to that which it contracts through a special
agent, duly empowered by a definite order or commission to
perform some act or charged with some definite purpose
which gives rise to the claim, and not where the claim is based
on acts or omissions imputable to a public official charged
with some administrative or technical office who can be held
to the proper responsibility in the manner laid down by the

courts.