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Doctrine of Constitutional Supremacy

MANILA PRINCE HOTEL V GSIS

G.R. NO. 122156
FEB. 3, 1997

Doctrine: A constitution is a system of fundamental laws for the governance and administration
of a nation—it is supreme, imperious, absolute and unalterable except by the authority from which
it emanates. Since the Constitution is the fundamental, paramount and supreme law of the nation,
it is deemed written in every statute and contract.

FACTS: The Respondent Government Service Insurance System (GSIS) in pursuant to the
privatization program of the Philippine Government, decided to sell through public bidding 30%
to 51% of the issued and outstanding shares of respondent Manila Hotel Corporation (MHC). In a
close bidding held participated only by petitioner, a Filipino corporation and Renong Berhad, a
Malaysian firm. Pending the declaration of Berhad as the winning bidder/strategic partner of MHC,
petitioner matched the former’s bid prize per share followed by a tender of manager’s check as
Bid Security, but the GSIS refused to accept both.
The petitioner invokes that the sale to Berhad is in contravention to Sec. 10, second par., Art. XII,
of the 1987 Constitution “Filipino first policy” since MHC become a part of the national patrimony
and economy. Respondent argue that the subject provision is not selfexecutory and requires
implementing legislation.

ISSUE: Is respondent’s argument proper?

RULING: No. Under the doctrine of constitutional supremacy , if a law or contract violates any
norm of the Constitution, that law or contract, whether promulgated by the legislative or by the
executive branch or entered into by private persons for private purposes, is null and void and
without any force and effect. Since the Constitution is the fundamental, paramount and supreme
law of the nation, it is deemed written in every statute and contract. Adhering to the said doctrine,
the subject constitutional provision is, as it should be, impliedly written in the bidding rules issued
by respondent GSIS, lest the bidding rules be nullified for being violative of the Constitution. It is
a basic principle in constitutional law that all laws and contracts must conform with the
fundamental law of the land.

Political Law
PEOPLE V. PERFECTO
G.R. NO. L-18463
OCT. 4, 1922

Doctrine: Branch of public law that deals with the organization and operations of the
governmental organs of the State and defines its relations with the inhabitants of the territory. It is
a general principle of the public law that on acquisition of territory the previous political relations
of the ceded region are totally abrogated.
FACTS: On September 7, 1920, Mr. Gregorio Perfecto published an article in the newspaper La
Nacion regarding the disappearance of certain documents in the Office of Fernando M. Guerrero,
the Secretary of the Philippine Senate. The said article suggested that the difficulty in finding the
perpetrators was due to an official concealment by the Senate since the missing documents
constituted the records of testimony given by witnesses in the investigation of oil companies. This
resulted to a case being filed against Mr. Perfecto for violation of Article 256 of the Penal Code.
He was found guilty by the MTC and upheld by CFI of Manila. Mr. Perfecto filed an appeal in the
SC to dismiss the case on the ground that Article 256 was not in force anymore.

ISSUE: Whether or not Article 256 of the Spanish Penal Code (SPC) is still in force and can be
applied in the case at bar?

RULING: No, the Court held that with the change of sovereignty over the Philippines from
Spanish to American, it means that the invoked provision of the SPC had been automatically
abrogated. The Court determined Article 256 of the SPC to be ‘political’ in nature for it is about
the relation of the State to its inhabitants, thus, the Court emphasized that ‘it is a general principle
of the public law that on acquisition of territory, the previous political relations of the ceded region
are totally abrogated.’ Hence, Article 256 of the SPC is considered no longer in force and cannot
be applied to the present case. Therefore, respondent was acquitted.

MACARIOLA V. ASUNCION
114 SCRA 77

Doctrine: The provision of the Code of Commerce incapacitating judges and justices and other
public officers from engaging in business is part of Political Law. Article 14 of the Code of
Commerce partakes more of the nature of an administrative law because it regulates the conduct
of certain public officers and employees with respect to engaging in business; hence, political in
essence.

FACTS: Macariola charged respondent Judge Elias B. Asuncion of the CFI of Leyte; with acts
unbecoming a judge when the latter purchased a property which was previously the subject of
litigation on which he rendered decision. Respondent and his wife were also members of Traders
Manufacturing and Fishing Industries Inc. to which their shares and interests in said property were
conveyed. According to the petitioner, respondent allegedly violated various provisions of the law,
among others, Article 14, par. 1 and 5 of the Code of Commerce by associating himself as a
stockholder and a ranking officer while he was a judge of the Court of First Instance of Leyte.
Respondent judge contended that said provision is made inapplicable upon the transfer of
sovereignty.

ISSUE: Is the said provision still binding?

RULING: No. It is the Court’s view that although the aforestated provision is incorporated in the
Code of Commerce which is part of the commercial laws of the Philippines, it, however, partakes
of the nature of a political law as it regulates the relationship between the government and certain
public officers and employees, like justices and judges. It may be recalled that political law
embraces constitutional law, law of public corporations, administrative law including the law on
public officers and elections. Specifically, Article 14 of the Code of Commerce partakes more of
the nature of an administrative law because it regulates the conduct of certain public officers and
employees with respect to engaging in business; hence, political in essence.
Upon the transfer of sovereignty from Spain to the United States and later on from the United
States to the Republic of the Philippines, Article 14 of this Code of Commerce must be deemed to
have been abrogated because where there is change of sovereignty, the political laws of the former
sovereign, whether compatible or not with those of the new sovereign, are automatically abrogated,
unless they are expressly re-enacted by affirmative act of the new sovereign.

Consequently, it has no legal and binding effect and cannot apply to the respondent.

Effectivity and Rules of Construction

DE LEON V. ESGUERRA
(1987)

Doctrine: the 1987 Constitution became effective on Feb. 2, 1987, when the plebiscite was held,
and not when the results were announced.

FACTS: Alfredo de Leon won as barangay captain and other petitioners won as councilmen of
barangay Dolores, Taytay, Rizal. On February 9, 1987, De Leon received a memo antedated
December 1, 1986 signed by OIC Gov. Benhamin Esguerra designating Florentino Magno, as new
captain by authority of minister of local government and similar memo signed designating new
councilmen, all signed only on February 8, 1987. It is the petitioner’s position that with the
ratification of the 1987 Constitution on February 2, 1987, respondent OIC Governor no longer has
the authority to replace them and to designate their successors. Respondent contends that the memo
was signed prior to the effectivity of the 1987 Constitution, i.e. the proclamation of its ratification
on February 11, 1987.

ISSUE: Whether the 1987 Constitution took effect on February 2, 1987, the date that the plebiscite
for its ratification was held or whether it took effect on February 11, 1987, the date its ratification
was proclaimed per Proclamation No. 58 of then President Corazon C. Aquino

RULING: The Supreme Court held that the 1987 Constitution became effective on Feb. 2, 1987,
when the plebiscite was held, and not when the results were announced. Therefore, the power no
longer existed upon effectivity of the 1987 Constitution.

INTERPRETATION OF THE CONSTITUTION

FRANCISCO V. HOUSE OF REPRESENTATIVES

(2003)

FACTS: Francisco challenged the filing of a Second Impeachment Complaint within the same
year against SC Chief Justice Davide, Jr., on the ground that it was barred by Art. XI, Section 3
(5) of the Constitution that “no impeachment proceedings shall be initiated against the same
official more than once within a period of one year.” The House Committee on Justice that the 1st
impeachment complaint was “sufficient in form,” but voted to dismiss the same on for being
insufficient in substance. The Committee Report to this effect has not yet been sent to the House
in plenary in accordance with the said Section 3(2) of Article XI of the Constitution. Four months
and three weeks since the filing of the first complaint the second impeachment complaint was
lodged accompanied by a “Resolution of Endorsement/Impeachment” signed by at least one-third
(1/3) of all the Members of the HoR. Since the first impeachment complaint never made it to the
floor for resolution, respondent HoR concludes that the one year bar prohibiting the initiation of
impeachment proceedings against the same officials could not have been violated as the
impeachment complaint had not been initiated since the House of Representatives, acting as the
collective body, has yet to act on it. Opposing petitioners on the other hand interpreted the word
“initiate” to mean the filing of the complaint.

RULING: The Supreme Court upheld the dismissal, and gave the following rules for the
interpretation of the Constitution:
1) Verba legis—whenever possible, the words used in the Constitution must be given their ordinary
meaning except where technical terms are employed.
2) Ratio legis et anima—the words of the Constitution should be interpreted in accordance with
the intent of the framers.
3) Ut magis valeat quam pereat—the Constitution has to be interpreted as a whole.
The Court pried the Constitutional Convention Records to ascertain the intent of the framers of the
Constitution. The framers also understood initiation in its ordinary meaning and intended “initiate”
to mean the filing of the verified complaint to the Committee on Justice of the Lower House.

CIVIL LIBERTIES UNION V. EXECUTIVE SECRETARY

194 SCRA 317

Doctrine: The Court in construing a constitution should bear in mind the object sought to be
accomplished by its adoption and the evils if any sought to be prevented or remedied; A doubtful
provision will be examined in the light of the history of the times and the condition and
circumstances under which the Constitution was formed.

FACTS: President Corazon Aquino issued Executive Order No. 284 which allowed members of
the Cabinet, their undersecretaries and assistant secretaries to hold other government offices or
positions in addition to their primary positions subject to limitations set therein. The Civil Liberties
Union (CLU) assailed this EO averring that such law is unconstitutional. The constitutionality of
EO 284 is being challenged by CLU on the principal submission that it adds exceptions to Sec 13,
Article 7 of the Constitution. CLU avers that by virtue of the phrase “unless otherwise provided in
this Constitution“, the only exceptions against holding any other office or employment in
Government are those provided in the Constitution, namely: (i) The Vice-President may be
appointed as a Member of the Cabinet under Sec 3, par. (2), Article 7; and (ii) the Secretary of
Justice is an ex-officio member of the Judicial and Bar Council by virtue of Sec 8 (1), Article 8.

ISSUE: does the prohibition in Section 13, Article 7 of the 1987 Constitution insofar as Cabinet
members, their deputies or assistants are concerned admit of the broad exceptions made for
appointive officials in general under Section 7, par. (2), Article IX-B
RULING: No. The words of the Constitution should be interpreted in accordance with the intent
of the framers. One should bear in mind the object sought to be accomplished and the evils sought
to be prevented or remedied. A doubtful provision shall be examined in light of the history of the
times and the conditions and circumstances under which the Constitution was framed. The framers
sought to prevent the practice of holding multiple offices or positions in the government during
the Marcos regime that soon led to abuses by unscrupulous public officials who took advantage of
this scheme for purposes of self-enrichment.

PREAMBLE

RE: LETTER OF TONY Q. VALENCIANO, RE: HOLDING OF RELIGIOUS RITUALS

AT THE HALLS OF JUSTICE BUILDING IN QUEZON CITY
AM NO. 10-4-19-S
MARCH 7, 2017

Facts: Valenciano wrote several letters to former Chief Justice Renato S. Puno, complaining about
the holding of masses during lunch break at the basement of the Quezon City Hall of Justice. He
claimed that the religious icons placed there, the electric organ and other items related to the
celebration of masses therein violated the separation of the constitutional provision on the
separation of the Church and State. He also claimed, among others, that the choir rehearsals
disturbed the other employees and that the other employees could no longer attend to their personal
necessities as they cannot go to the lavatories which are located near the basement.

Issue: Whether the holding of masses violates the constitutional principle of separation of church
and state as well as the constitutional prohibition against appropriation of public money or property
for the benefit of any sect, church, denomination, sectarian institution, or system of religion.

Ruling: No. the State still recognizes the inherent right of the people to have some form of belief
system, whether such may be belief in a Supreme Being, a certain way of life, or even an outright
rejection of religion. Our very own Constitution recognizes the heterogeneity and religiosity of our
people.

The Filipino people in "imploring the aid of Almighty God" manifested their spirituality innate in
our nature and consciousness as a people, shaped by tradition and historical experience. As this is
embodied in the preamble, it means that the State recognizes with respect the influence of religion
in so far as it instills into the mind the purest principles of morality. Moreover, in recognition of
the contributions of religion to society, the 1935, 1973 and 1987 Constitutions contain benevolent
and accommodating provisions towards religions such as tax exemption of church property, salary
of religious officers in government institutions, and optional religious instructions in public
schools.

Article I: The National Territory

REAGAN V. COMMISSIONER
30 SCRA 968
MP: Bases under lease to the American armed forces by virtue of the Military Bases Agreement
of 1947 remain part of Philippine territory.

FACTS: William C. Reagan, a civilian employee of an American corporation providing technical

assistance to the United States Air Force in the Philippines. He disputed the payment of the income
tax assessed on him by respondent CIR on an amount realized by him on a sale of his automobile
to a member of the United States Marine Corps, the transaction having taken place at the Clark
Field Air Base at Pampanga. It is his contention that in legal contemplation the sale was made
outside Philippine territory and therefore beyond our jurisdictional power to tax.

ISSUE: Is the US military bases in the Philippines still part of Philippine Territory?

RULING: Yes. A state is not precluded from allowing another power to participate in the exercise
of jurisdictional right over certain portions of its territory. If it does so, it by no means follows that
such areas become impressed with an alien character. They retain their status as native soil. They
are still subject to its authority. Its jurisdiction may be diminished, but it does not disappear. So it
is with the bases under lease to the American armed forces by virtue of the Military Bases
Agreement of 1947. They are not and cannot be foreign territory

PEOPLE V. GOZO
53 SCRA 476

Facts: Loreta Gozo bought a house and lot which was located inside the US Naval Reservation
which is within the territorial jurisdiction of Olongapo City. Upon the advice of an assistant in the
Mayor’s Office and some neighbors, she demolished the house standing thereon without acquiring
the necessary permits and then later on erected another house. She was then charged by the City
Engineer’s Office for violating a municipal order which requires her to secure permits for any
demolition and/or construction within the City. She was convicted in violation thereof by the lower
court. She appealed and countered that the City of Olongapo has no administrative jurisdiction
over the said lot because it is within a Naval Base of a foreign country.

ISSUE: Is the US military bases in the Philippines still part of Philippine Territory?

RULING: Yes. The precise reason why the Philippine Government could cede part of its authority
over these bases to the US was the fact that they were part of the Philippine territory over which
the Government exercised sovereign control.

MAGALLONA V. ERMITA
655 SCRA 476

FACTS: The petitioners assailed the constitutionality of R.A. 9522 (the Baseline Law), alleging
that it reduced Philippine territory, opened Philippine waters landward of the boundaries drawn up
in the Treaty of Paris to passage by all vessels and aircraft, and consequently undermined
Philippine sovereignty and national security.
RULING: The Court upheld the law’s constitutionality, finding that the drawing of the baselines
from the archipelago’s outermost islands and drying reefs was merely in compliance with the
Philippines’ obligations under UNCLOS. As to the conversion of internal waters to archipelagic
waters, the Court emphasized that the Philippines would still exercise sovereignty over
archipelagic waters—subject only to the right of innocent passage and the right of passage through
sea lanes. The Philippines maintains the sui generis character of our archipelagic waters as
equivalent to the internal waters of continental coastal states. In other words, the landward waters
embraced within the baselines determined by RA 9522, i.e., all waters around, between, and
connecting the islands of the archipelago, regardless of their breadth and dimensions, form part of
the internal waters of the Philippines.
MOST REV PEDRO ARIGO V. SCOTT SWIFT
GR 206510
SEPT 16, 2014

FACTS: In this case, the US respondents were sued in their official capacity as commanding
officers of the US Navy who had control and supervision over the USS Guardian and its crew.
The alleged act or omission resulting in the unfortunate grounding of the USS Guardian on the
Tubataha Reefs Natural Park (TRNP) was committed while they were performing official military
duties. Considering that the satisfaction of a judgment against said officials will require remedial
actions and appropriation of funds by the US government, the suit is deemed to be one against the
US itself. The principle of State immunity therefore bars the exercise of jurisdiction by this Court
over the persons of respondents Swift, Rice and Robling. During the deliberations, Senior
Associate Justice Carpio took the position that the conduct of the US in this case, when its warship
entered a restricted area in violation of R.A. 10067 and caused damage to the TRNP reef system,
brings the matter within the ambit of Article 31 of the United Nations Convention on the Law of
the Sea (UNCLOS). He explained that while historically, warships enjoy sovereign immunity from
suit as extensions of their flag State, Article 31 of the UNCLOS creates an exception to this rule
in cases where they fail to comply with the rules and regulations of the coastal State regarding
passage through the latter’s internal waters and the territorial sea.

Further, respondents argued that they did not participate to UNCLOS therefore not covered by
such.

ISSUE: Are the respondents correct?

RULING: No. The UNCLOS gives to the coastal State sovereign rights in varying degrees over
the different zones of the sea which are: (1) internal waters; (2) territorial sea; (3) contiguous zone;
(4) exclusive economic zone; and (5) the high seas. It also gives coastal States more or less
jurisdiction over foreign vessels depending on where the vessel is located.

Insofar as the internal waters and territorial sea is concerned, the Coastal State exercises
sovereignty, subject to the UNCLOS and other rules of international law. Such sovereignty extends
to the air space over the territorial sea as well as to its bed and subsoil. The court ruled that non-
membership in the UNCLOS does not mean that the US will disregard the rights of the Philippines
as a Coastal State over its internal waters and territorial sea.
The South China Sea Arbitration: Philippines v. China, July 12, 2016 (FOR REPORTING)

Concept of Auto Limitation

PEOPLE VS. GOZO
G.R. NO. L-36409
OCTOBER 26, 1973

FACTS: Loreta Gozo bought a house and lot which was located inside the US Naval Reservation
which is within the territorial jurisdiction of Olongapo City. Upon the advice of an assistant in the
Mayor’s Office and some neighbors, she demolished the house standing thereon without acquiring
the necessary permits and then later on erected another house. She was then charged by the City
Engineer’s Office for violating a municipal order which requires her to secure permits for any
demolition and/or construction within the City. She was convicted in violation thereof by the lower
court. She appealed and countered that the City of Olongapo has no administrative jurisdiction
over the said lot because it is within a Naval Base of a foreign country.

ISSUE: Is the Municipal Ordinance enforceable within the US Naval Base?

HELD: Yes. By the Agreement, the Philippine Government merely consents that the United States
exercise jurisdiction in certain cases. This consent was given purely as a matter of comity, courtesy
or expediency. The Philippine Government has not abdicated its sovereignty over the bases as part
of the Philippine territory or divested itself completely of jurisdiction over offenses committed
therein. Under the terms of the treaty, the United States Government has prior or preferential but
not exclusive jurisdiction of such offenses. The Philippine Government retains not only
jurisdictional rights not granted, but also all such ceded rights as the United States Military
authorities for reasons of their own decline to make use of (Military Bases Agreement). Hence, in
the exercise of its sovereignty, the State through the City of Olongapo does have administrative
jurisdiction over the lot located within the US Naval Base.

Magallona, et. al. vs. Ermita

G.R. No. 187167
August 16, 2011

FACTS: The petitioners assailed the constitutionality of R.A. 9522 (the Baseline Law), alleging
that it reduced Philippine territory, opened Philippine waters landward of the boundaries drawn up
in the Treaty of Paris to passage by all vessels and aircraft, and consequently undermined
Philippine sovereignty and national security.

RULING: The baselines are set to define the sea limits of a state, be it coastal or archipelagic,
under the UNCLOS III regime. By setting the baselines to conform to the prescriptions of
UNCLOS III, RA 9522 did not surrender any territory, as petitioners would insist at every turn,
for UNCLOS III is concerned with setting order in the exercise of sea-use rights, not the acquisition
or cession of territory. And let it be noted that under UNCLOS III, it is recognized that countries
can have territories outside their baselines. Far from having a dismembering effect, then, RA 9522
has in a limited but real sense increased the country’s maritime boundaries.
Baselines laws are nothing but statutory mechanisms for UNCLOS III States parties to delimit
with precision the extent of their maritime zones and continental shelves. In turn, this gives notice
to the rest of the international community of the scope of the maritime space and submarine areas
within which States parties exercise treaty-based rights, namely, the exercise of sovereignty over
territorial waters (Article 2), the jurisdiction to enforce customs, fiscal, immigration, and sanitation
laws in the contiguous zone (Article 33), and the right to exploit the living and non-living resources
in the exclusive economic zone (Article 56) and continental shelf (Article 77).

Archipelagic Doctrine
Magallona, et. al. vs. Ermita
G.R. No. 187167
August 16, 2011
FACTS: same as above

RULING: It is defined as all waters, around between and connecting different islands belonging
to the Philippine Archipelago, irrespective of their width ordimension, are necessary
appurtenances of its land territory, forming an integral part of the national or inland waters, subject
to the exclusive sovereignty of the Philippines. The recognition of archipelagic States’ archipelago
and the waters enclosed by their baselines as one cohesive entity prevents the treatment of their
islands as separate islands under UNCLOS III. Separate islands generate their own maritime zones,
placing the waters between islands separated by more than 24 nautical miles beyond the States’
territorial sovereignty, subjecting these waters to the rights of other States under UNCLOS III.

Concept of the State

LAUREL VS. MISA
G.R. NO. L-409
JANUARY 30, 1947

Dctrione: Characteristics of Sovereignty: Permanent; Exclusive; Comprehensive; Absolute;

Indivisible; Inalienable; and Imprescriptible

FACTS: The accused was charged with treason. During the Japanese occupation, the accused
adhered to the enemy by giving the latter aid and comfort. He claims that he cannot be tried for
treason since his allegiance to the Philippines was suspended at that time. Also, he claims that he
cannot be tried under a change of sovereignty over the country since his acts were against the
Commonwealth which was replaced already by the Republic.

ISSUE: Is the contention correct?

RULING: No. The accused was found guilty. A citizen owes absolute and permanent allegiance
to his government or sovereign. No transfer of sovereignty was made; hence, it is presumed that
the Philippine government still had the power. Moreover, sovereignty cannot be suspended; it is
either subsisting or eliminated and replaced. Sovereignty per se wasn’t suspended; rather, it was
the exercise of sovereignty that was suspended. Thus, there is no suspended allegiance. Regarding
the change of government, there is no such change since the sovereign – the Filipino people – is
still the same. What happened was a mere change of name of government, from Commonwealth
to the Republic of the Philippines.

State Immunity from Suit

LANSANG VS. COURT OF APPEALS

G.R. NO. 102667
FEBRUARY 23, 2000
Doctrine: Where the public official is sued in his personal capacity, the doctrine of state immunity
will not apply, even if the acts complained of were committed while the public official was
occupying a public position.

FACTS: Private respondents General Assembly of the Blind, Inc. (GABI) thru its president, Jose
Iglesias were allegedly awarded a verbal contract of lease in 1970 to occupy a portion of Rizal
Park by the National Parks Development Committee (NPDC), a government initiated civic body
engaged in the development of national parks. After the EDSA Revolution, petitioner Lansang,
the new Chairman of the NPDC, sought to clean up Rizal Park. Petitioner terminated the so-called
verbal agreement with GABI and demanded that the latter vacate the premises and the kiosks it
ran privately within the public park. The notice was signed by Iglesias, allegedly to indicate his
conformity to its contents but later on claimed that he was deceived into signing the notice.

GABI filed an action for damages and injunction in the RTC against the petitioner but it was
dismissed, ruling that the complaint was actually directed against the state which could not be sued
without its consent. The CA ruled to the contrary.

ISSUE: Is the suit deemed to be a suit against the state?

RULING: The doctrine of state immunity from suit applies to complaints filed against public
officials for acts done in the performance of their duties. The rule is that the suit must be regarded
as one against the state where satisfaction of the judgment against the public official concerned
will require the state itself to perform a positive act, such as appropriation of the amount necessary
to pay the damages awarded to the plaintiff.

Lansang was sued not in his capacity as NPDC Chairman but in his personal capacity. It is evident
from the complaint that Lansang was sued allegedly for having personal motives in ordering the
ejectment of GABI from Rizal Park, thus, the case was not deemed a suit against the State.

AMIGABLE VS. CUENCA (Commissioner of Public Highways)

G.R. NO. L-26400
FEBRUARY 29, 1972

FACTS: This involves an action for the recovery of the value of the property taken by the
government and converted into a public street without payment of just compensation. The
defendant said that the case was premature, barred by prescription, and the government did not
give its consent to be sued.
ISSUE: Is the contention proper?

RULING: The Supreme Court ruled in favor of Victoria Amigable, the property owner, despite
her failure to file his claim with the Auditor General, and said that suit may lie because the doctrine
of State immunity cannot be used to perpetrate an injustice.

CITY OF CALOOCAN VS. JUDGE ALLARDE

G.R. NO. 107271
SEPTEMBER 10, 2003

Doctrine: The rule on the immunity of public funds from seizure or garnishment does not apply
when the funds sought to be levied under execution are already allocated by law specifically for
the satisfaction of the money judgment against the government. In such a case, the monetary
judgment may be legally enforced by judicial processes.

FACTS: In 1972, Mayor Marcial Samson of Caloocan, through an ordinance, abolished the
position of Assistant City Administrator and 17 other positions. The affected employees assailed
the legality of the abolition. The CFI in 1973 declared the abolition illegal and ordered the
reinstatement of all the dismissed employees and the payment of their back-wages and other
emoluments. The City Government appealed the decision but such was dismissed. When the City
Mayor refused to sign the check intended for Santiago’s payment, Judge Allarde ordered the
Sheriff to garnish the funds of the City of Caloocan. The order was questioned by the City
contending their public funds are beyond the reach of garnishment.

ISSUE: Is the City’s contention correct?

RULING: No. The rule on the immunity of public funds from seizure or garnishment does not
apply when the funds sought to be levied under execution are already allocated by law specifically
for the satisfaction of the money judgment against the government. In such a case, the monetary
judgment may be legally enforced by judicial processes. In the instant case, the City Council of
Caloocan already approved and passed an ordinance, allocating the amount as payment for
respondent Santiago’s back salaries plus interest. Thus this case fell squarely within the exception
from immunity from suit.

AIR TRANSPORTATION OFFICE VS. RAMOS

G.R. NO. 159402
FEBRUARY 23, 2011

MP: Immunity has not been upheld in its favor whose function was not in pursuit of a necessary
function of government but was essentially a business.

FACTS: Spouses David and Elisea Ramos discovered that a portion of their land in Baguio City
was being used as part of the runway and running shoulder of the Loakan Airport being operated
by Air Transportation Office (ATO). The Spouses Ramos agreed to convey the affected portion
by deed of sale to the ATO for consideration, which ATO failed to pay. In an action for collection
of money against ATO, the latter invoked Proclamation No. 1358 whereby it reserved certain
parcels of land, including then subject portion herein, for the use of the Loakan Airport. They
asserted that RTC did not have any jurisdiction to entertain the action without the State’s consent.
The RTC and CA dismissed the petition.

ISSUE: Can the ATO be sued without the State’s consent?

RULING: YES. An unincorporated government agency without any separate juridical personality
of its own enjoys immunity from suit because it is invested with an inherent power of sovereignty.
However, the need to distinguish between an unincorporated government agency performing
governmental function and one performing proprietary functions has arisen. The juridical character
of ATO is an agency of the government without performing a purely governmental or sovereign
function but is instead involved in the management and maintenance of the Loakan Airport, an
activity that was not exclusive prerogative of the State in its sovereign capacity. Hence, the ATO
had no claim to the State immunity from suit. The obligation of ATO to Spouses Ramos might be
enforced against CAAP.