TOPIC - SUITS AGAINST GOVERNMENT AGENCIES (CHARTERED AGENCIES)

Alicia O. Arcega v. CA

G.R. No. L-20869. August 28, 1975

Facts

 On August 17, 1956 the petitioner Alicia O. Arcega, doing business under the firm name "Fairmont
Ice Cream Company," filed a complaint with the Court of First Instance of Manila, against the
respondents Central Bank of the Philippines and Philippine National Bank (PNB), for the refund of
P18,030.13 paid by her in the concept of the 17% special excise tax on foreign exchange levied
under Section 1 of Republic Act 601, as amended.
 It involved purchases of foreign exchange made from the PNB to cover the cost of transportation
and other charges incident to the importation into the Philippines of ingredients used as flavors,
paper containers and wooden spoons, machineries, equipment, and spare parts used in the
manufacture and distribution of ice cream.
 PNB’s argument - The complaint does not state a sufficient cause of action because, although the
PNB is being sued as an agent of the Central Bank, there is no allegation in the complaint that it
had contracted in its own name or exceeded its authority as such agent, hence, even assuming
that the averments of the complaint could be established, it cannot be held liable for the amount
of the special excise tax it had collected from the petitioner.
 Central Bank’s argument - moved to dismiss the complaint for lack of jurisdiction over the subject
matter of the action because the judgment sought would constitute a financial charge against the
government which cannot be done without its consent; lack of cause of action, and failure to
implead the National Treasurer and the Secretary of Finance as party defendants who are
indispensable parties.
 Upon the grounds of the Central bank, the trial court dismissed the complaint.
 Arcega filed a motion for reconsideration of the resolution, to which an opposition was 􀀫led by
the Central Bank. The court denied said motion.
 CA affirmed the dismissal of the complaint.
 The petitioner interposed the present appeal by certiorari.

Issues

 Whether a suit against the Central Bank for refund of the 17% foreign exchange tax collected by
it under Republic Act 601, as amended, is actually a suit against the State without its consent

Ruling

 No. The Court cited the case of Central Azucarera Don Pedro vs. Central Bank and Olizon vs.
Central Bank where it held that Central Bank can be sued because the consent of the State had
already been granted under its Charter authorizing it to sue and be sued. Sec. 5 of Republic Act
No. 601 (as amended) directs that refund of taxes be made by the Central Bank."
 The Court set aside the judgment under review, dismissed the complaint as to the second and
third causes of the action, and remanded the case for further proceedings as to the first and fourth
causes of action after impleading the Treasurer of the Philippines and the Secretary of Finance, as
parties.