Consti Digest - Prelim

7/30/2019 Consti Digest - Prelim

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CONSTI DIGEST (PRELIM)

1. Republic v. Feliciano

FACTS:

Petitioner seeks the review of the decision of the Intermediate Appellate Court dated April 30, 1985 reversing the

order of the Court of First Instance of Camarines Sur, Branch VI, dated August 21, 1980, which dismissed thecomplaint of respondent Pablo Feliciano for recovery of ownership and possession of a parcel of land on the groundof non-suability of the State. On January 22, 1970, Feliciano filed a complaint with the then Court of First Instance ofCamarines Sur against the RP, represented by the Land Authority, for the recovery of ownership and possession of aparcel of land, consisting of four (4)lots with an aggregate area of 1,364.4177 hectares, situated in the Barrio ofSalvacion, Municipality of Tinambac, Camarines Sur. Feliciano alleged that he bought the property in question fromVictor Gardiola by virtue of a Contract of Sale dated May 31, 1952, followed by a Deed of Absolute Sale on October30, 1954; that Gardiola had acquired the property by purchase from the heirs of Francisco Abrazado whose title tothe said property was evidenced by an informacion posesoria that upon his purchase of the property, he took actualpossession of the same, introduced various improvements therein and caused it to be surveyed in July 1952, whichsurvey was approved by the Director of Lands on October 24, 1954.On November 1, 1954, President RamonMagsaysay issued Proclamation No. 90 reserving for settlement purposes, under the administration of the NationalResettlement and Rehabilitation Administration (NARRA), a tract of land situated in theMunicipalities of Tinambacand Siruma, Camarines Sur, after which the NARRA and its successor agency, the Land Authority, started sub-dividing and distributing the land to the settlers; that the property in question, while located withinthe reservationestablished under Proclamation No. 90, was the private property of Feliciano and should therefore be excludedtherefrom. Feliciano prayed that he be declared the rightful and true owner of the property in question consisting of1,364.4177 hectares; that his title of ownership based on informacion posesoria of his predecessor-in-interest bedeclared legal valid and subsisting and that defendant be ordered to cancel and nullify all awards to the settlers.

ISSUE:WON the State can be sued for recovery and possession of a parcel of land

RULING:NO

RATIONALE:A suit against the State, under settled jurisprudence is not permitted, except upon a showing that the State hasconsented to be sued, either expressly or by implication through the use of statutory language too plain to be

misinterpreted. It may be invoked by the courts sua sponte at any stage of the proceedings. Waiver of immunity,being a derogation of sovereignty, will not be inferred lightly, but must be construed in strictissimi juris(of strictest right). Moreover, the Proclamation is not a legislative act. The consent of the State to be sued mustemanate from statutory authority. Waiver of State immunity can only be made by an act of the legislative body.

Addtl:Worthy of note is the fact, as pointed out by the Solicitor General, that the informacion posesoria registered in theOffice of the Register of Deed of Camarines Sur on September 23, 1952 was a "reconstituted" possessoryinformation; it was "reconstituted from the duplicate presented to this office (Register of Deeds) by Dr. PabloFeliciano," without the submission of proof that the alleged duplicate was authentic or that the original thereof waslost. Reconstitution can be validly made only in case of loss of the original. These circumstances raise grave doubtsas to the authenticity and validity of the "informacion posesoria" relied upon by respondent Feliciano. Adding to thedubiousness of said document is the fact that "possessory information calls for an area of only 100 hectares,"whereas the land claimed by respondent Feliciano comprises 1,364.4177 hectares, later reduced to 701-9064hectares. Courts should be wary in accepting possessory information documents, as well as other purportedly old

Spanish titles, as proof of alleged ownership of lands.


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2. Philippine Agila Sattelite Inc. vs. Lichauco

FACTS

Petitioner Philippine Agila Satellite Inc. is a duly organized corporation, whose President and Chief Executive Officer

is co-petitioner Michael C.U. De Guzman. PASI was established by a consortium of private telecommunications

carriers which in 1994 had entered into a Memorandum of Understanding with the DOTC, through its then SecretaryJesus Garcia, concerning the planned launch of a Philippine-owned satellite into outer space. The Philippine

government, through the DOTC, was tasked under the MOU to secure from the International Telecommunication

Union the required orbital slots and frequency assignments for the Philippine satellite.

The government, together with PASI, coordinated through the International Telecommunication Union two orbital

slots, designated as 161 East Longitude and 153 East Longitude, for Philippine satellites. PASI wrote then DOTC

Secretary Amado S. Lagdameo, Jr., seeking for official Philippine government confirmation on the assignment of the

two aforementioned Philippine orbital slots to PASI for its satellites. Secretary Lagdameo, Jr. replied in a letter

confirming the Philippine Governments assignment of Philippine orbital slots 161E and 153E to PASI for its

satellites.

PASI averred that after having secured the confirmation from the Philippine government, it proceeded with

preparations for the launching, operation and management of its satellites, including the availment of loans, theincrease in its capital. However, respondent Lichauco, then DOTC Undersecretary for Communications, allegedly

embarked on a crusade to malign the name of Michael de Guzman and sabotage the business of PASI.

Aggrieved by Lichaucos actions, PASI and De Guzman instituted a civil complaint against Lichauco, by then the

Acting Secretary of the DOTC. The complaint, alleging three causes of action, was for injunction, declaration of nullity

of award, and damages.

The third cause of action, for damages, imputed several acts to Lichauco as part of her alleged crusade to malign

the name of plaintiff De Guzman and sabotage the business of PASI.

ISSUE

Is the suit one against the state?

RULING

The hornbook rule is that a suit for acts done in the performance of official functions against an officer of the

government by a private citizen that would result in a charge against or financial liability to the government must be

regarded as a suit against the State itself, although the latter has not been formally impleaded. However, government

immunity from suit will not shield the public official being sued if the government no longer has an interest to protect in

the outcome of a suit; or if the liability of the officer is personal because it arises from a tortious act in the

performance of his duties.

As earlier noted, the complaint alleges three causes of action against Lichauco: one for injunction against her

performing any act in relation to orbital slot 153 East Longitude; one for declaration of nullity of award, seeking to

nullify the alleged award of orbital slot 153 East Longitude; and one for damages against Lichauco herself.

As stated earlier, it is when the acts done in the performance of official functions by an officer of the government will

result in a charge against or financial liability to the government that the complaint must be regarded as a suit against

the State itself. However, the distinction must also be raised between where the government official concerned

performs an act in his/her official and jurisdictional capacity and where he performs an act that constitutes grave

abuse of discretion tantamount to lack of jurisdiction. In the latter case, the Constitution itself assures the availability

of judicial review, and it is the official concerned who should be impleaded as the proper party- defendant or

respondent.
http://www.philjuris.com/2008/08/philippine-agila-sattelite-inc-vs.htmlhttp://www.philjuris.com/2008/08/philippine-agila-sattelite-inc-vs.html


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As to the first two causes of action, the Court ruled that the defense of state immunity from suit do not apply since

said causes of action cannot be properly considered as suits against the State in constitutional contemplation. These

causes of action do not seek to impose a charge or financial liability against the State, but merely the nullification of

state action. The prayers attached to these two causes of action are for the revocation of the Notice of Bid and the

nullification of the purported award, nothing more. Had it been so that petitioner additionally sought damages in

relation to said causes of action, the suit would have been considered as one against the State. Had the petitionerimpleaded the DOTC itself, an unincorporated government agency, and not Lichauco herself, the suit would have

been considered as one against the State. But neither circumstance obtains in this case.

The doctrine, as summarized in Shauf v. Court of Appeals states: While the doctrine appears to prohibit only suits

against the state without its consent, it is also applicable to complaints filed against officials of the state for acts

allegedly performed by them in the discharge of their duties. The rule is that if the judgment against such officials will

require the state itself to perform an affirmative act to satisfy the same, such as the appropriation of the amount

needed to pay the damages awarded against them, the suit must be regarded as against the state itself although it

has not been formally impleaded. It must be noted, however, that the rule is not so all-encompassing as to be

applicable under all circumstances.

It is a different matter where the public official is made to account in his capacity as such for acts contrary to law and

injurious to the rights of plaintiff. As was clearly set forth by Justice Zaldivar in Director of the Bureau ofTelecommunications, et al. vs. Aligaen, etc., et al.: Inasmuch as the State authorizes only legal acts by its officers,

unauthorized acts of government officials or officers are not acts of the State, and an action against the officials or

officers by one whose rights have been invaded or violated by such acts, for the protection of his rights, is not a suit

against the State within the rule of immunity of the State from suit. In the same tenor, it has been said that an action

at law or suit in equity against a State officer or the director of a State department on the ground that, while claiming

to act for the State, he violates or invades the personal and property rights or the plaintiff, under an unconstitutional

act or under an assumption of authority which he does not have, is not a suit against the State within the

constitutional provision that the State may not be sued without its consent.' The rationale for this ruling is that the

doctrine of state immunity cannot be used as an instrument for perpetrating an injustice.


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3.) G.R. No. L-36084 August 31, 1977

REPUBLIC OF THE PHILIPPINES, petitioner,vs.HONORABLE AMANTE P. PURISIMA, the Presiding Judge of the court of first Instance of Manila (Branch VII),and YELLOW BALL FREIGHT LINES, INC., respondents.

Solicitor General Estelito P. Mendoza, Assistant Solicitor General Santiago M. Kapunan, Solicitor Oscar C.Fernandez and Special Attorney Renato P. Mabugat for petitioner.

Jose Q. Calingo for private respondent.

FERNANDO, Act ing C.J. :

The jurisdictional issued raised by Solicitor General Estelito P. Mendoza on behalf of the Republic of the Philippinesin this certiorari and prohibition proceeding arose from the failure of respondent Judge Amante P. Purisima of theCourt of First Instance of Manila to apply the well-known and of-reiterated doctrine of the non-suability of a State,including its offices and agencies, from suit without its consent. it was so alleged in a motion to dismiss filed bydefendant Rice and Corn Administration in a pending civil suit in the sala of respondent Judge for the collection of amoney claim arising from an alleged breach of contract, the plaintiff being private respondent Yellow Ball Freight

Lines, Inc.

1

Such a motion to dismiss was filed on September 7, 1972. At that time, the leading case of MobilPhilippines Exploration, Inc. v. Customs Arrastre Service,2were Justice Bengzon stressed the lack of jurisdiction of a

court to pass on the merits of a claim against any office or entity acting as part of the machinery of the nationalgovernment unless consent be shown, had been applied in 53 other decisions.

3There is thus more than sufficient

basis for an allegation of jurisdiction infirmity against the order of respondent Judge denying the motion to dismissdated October 4, 1972.

4What is more, the position of the Republic has been fortified with the explicit affirmation

found in this provision of the present Constitution: "The State may not be sued without its consent."5

The merit of the petition for certiorari and prohibition is thus obvious.

1. There is pertinence to this excerpt from Switzerland General Insurance Co., Ltd. v. Republic of the Philippines:6

"The doctrine of non-suability recognized in this jurisdiction even prior to the effectivity of the [1935] Constitution is alogical corollary of the positivist concept of law which, to para-phrase Holmes, negates the assertion of any legal rightas against the state, in itself the source of the law on which such a right may be predicated. Nor is this all. lwphl@it

Even if such a principle does give rise to problems, considering the vastly expanded role of government enabling it toengage in business pursuits to promote the general welfare, it is not obeisance to the analytical school of thoughtalone that calls for its continued applicability. Why it must continue to be so, even if the matter be viewedsociologically, was set forth in Providence Washington Insurance Co. v. Republicthus: "Nonetheless, a continuedadherence to the doctrine of non-suability is not to be deplored for as against the inconvenience that may be causedprivate parties, the loss of governmental efficiency and the obstacle to the performance of its multifarious functionsare far greater if such a fundamental principle were abandoned and the availability of judicial remedy were not thusrestricted. With the well-known propensity on the part of our people to go the court, at the least provocation, the lossof time and energy required to defend against law suits, in the absence of such a basic principle that constitutes suchan effective obstacle, could very well be imagined."

7It only remains to be added that under the present Constitution

which, as noted, expressly reaffirmed such a doctrine, the following decisions had been rendered: Del mar v. ThePhilippine veterans Administration;

8Republic v. Villasor;

9Sayson v. Singson;

10and Director of the Bureau of

Printing v. Francisco.11

2. Equally so, the next paragraph in the above opinion from the Switzerland General Insurance Company decision is

likewise relevant: "Nor is injustice thereby cause private parties. They could still proceed to seek collection of theirmoney claims by pursuing the statutory remedy of having the Auditor General pass upon them subject to appeal tojudicial tribunals for final adjudication. We could thus correctly conclude as we did in the cited ProvindenceWashington Insurance decision: "Thus the doctrine of non-suability of the government without its consent, as it hasoperated in practice, hardly lends itself to the charge that it could be the fruitful parent of injustice, considering thevast and ever-widening scope of state activities at present being undertaken. Whatever difficulties for privateclaimants may still exist, is, from an objective appraisal of all factors, minimal. In the balancing of interests, sounavoidable in the determination of what principles must prevail if government is to satisfy the public weal, the verdictmust be, as it has been these so many years, for its continuing recognition as a fundamental postulate ofconstitutional law."

12


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3. Apparently respondent Judge was misled by the terms of the contract between the private respondent, plaintiff inhis sala, and defendant Rice and Corn Administration which, according to him, anticipated the case of a breach ofcontract within the parties and the suits that may thereafter arise.

13The consent, to be effective though, must come

from the State acting through a duly enacted statute as pointed out by Justice Bengzon in Mobil. Thus, whatevercounsel for defendant Rice and Corn Administration agreed to had no binding force on the government. That wasclearly beyond the scope of his authority. At any rate, Justice Sanchez, in Ramos v. Court of Industrial Relations,

14

was quite categorical as to its "not [being] possessed of a separate and distinct corporate existence. On the contrary,

by the law of its creation, it is an office directly 'under the Office of the President of the Philippines."

15

WHEREFORE, the petitioner for certiorari is granted and the resolution of October 4, 1972 denying the motion todismiss filed by the Rice and Corn Administration nullified and set aside and the petitioner for prohibition is likewisegranted restraining respondent Judge from acting on civil Case No. 79082 pending in his sala except for the purposeof ordering its dismissal for lack of jurisdiction. The temporary restraining order issued on February 8, 1973 by thisCourt is made permanent terminating this case. Costs against Yellow Ball Freight Lines, Inc.

Antonio, Aquino, Concepcion, Jr. and Santos, JJ., concur.

Barredo, J., took no part.


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4.G.R. No. 42204 January 21, 1993

HON. RAMON J. FAROLAN, JR., in his capacity as Commissioner of Customs, petitioner,

vs.

COURT OF TAX APPEALS and BAGONG BUHAY TRADING, respondents.

Facts:

S/S Pacific Hawk vessel with Registry No. 170 arrived on January 30, 1972 at the Port of Manila carrying amongothers, 80 bales of screen net consigned to Baging Buhay Trading (Baging Buhay). The import was classified under

Tariff Heading no. 39.06-B of the Tariff and Customs Code at 35% ad valorem. Bagong Buhay paid the duties and

taxes due in the amount of P11,350.00. The Office of the Collector of Customs ordered a re-examination of the

shipment upon hearing the information that the shipment consisted of mosquito net made of nylon under Tariff

Heading No. 62.02 of the Tariff and Customs Code. Upon re-examination, it turns out that the shipment was

undervalued in quantity and value as previously declared. Thus the Collector of Customs forfeited the shipment in

favor of the government. Private respondent filed a petition on August 20, 1976 for the release of the questioned

goods which the Court denied. On June 2,1986, 64 bales out of the 80 bales were released to Bagong Buhay after

several motion. The sixteen remaining bales were missing. The respondent claims that of the 143,454 yards

released, only 116,950 yards were in good condition and the rest were in bad condition. Thus, respondents demands

that the Bureau of Customs be ordered to pay for damages for the 43,050 yards it actually lost.

Issue:Whether or not the Collector of Customs may be held liable for the 43,050 yards actually lost by the private

respondent.

Held:

Bureau of Customs cannot be held liable for actual damages that the private respondent sustained with regard to its

goods. Otherwise, to permit private respondent's claim to prosper would violate the doctrine of sovereign immunity.

Since it demands that the Commissioner of Customs be ordered to pay for actual damages it sustained, for which

ultimately liability will fall on the government, it is obvious that this case has been converted technically into a suit

against the state.

On this point, the political doctrine that state may not be sued without its consent, categorically applies. As an

unincorporated government agency without any separate judicial personality of its own, the Bureau of Customs

enjoys immunity from suit. Along with the Bureau of Internal Revenue, it is invested with an inherent power ofsovereignty, namely taxation. As an agency, the Bureau of Customs performs the governmental function of collecting

revenues which is defined not a proprietary function. Thus private respondents claim for damages against the

Commissioner of Customs must fails.

5. RP v. Sandiganbayan

***cant find a case digest***


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6. SPOUSES FONTANILLA VS HON. MALIAMAN, digested

GR # 55963 and 61045, Feb. 27, 1991 (Constitutional Law Government Agency, Proprietary Functions)

FACTS: National Irrigation Administration (NIA), a government agency, was held liable for damages resulting to thedeath of the son of herein petitioner spouses caused by the fault and/or negligence of the driver of the said agency.NIA maintains that it is not liable for the act of its driver because the former does not perform primarily proprietorship

functions but governmental functions.ISSUE: Whether or not NIA may be held liable for damages caused by its driver.

HELD: Yes. NIA is a government agency with a corporate personality separate and distinct from the government,because its community services are only incidental functions to the principal aim which is irrigation of lands, thus,making it an agency with proprietary functions governed by Corporation Law and is liable for actions of theiremployees.

FONTANILLA V MALIAMAN and NATIONAL IRRIGATIONADMINSITRATION

194 SCRA 486PARAS; February 27, 1991

NATURE

Resolution

FACTS:

-The National Irrigation Administration (NIA) maintains that it does not perform solely and primarily proprietaryfunctions, but is an agency of the government tasked with governmental functions, and is therefore not liable for thetortuous act of its driver Garcia, who was not its special agent.

o NIA believes this bases this on: PD 552 amended some provisions of RA 3601 (the law which created the NIA)

The case of Angat River Irrigation System v. Angat River Workers Union

-Angat Case: Although the majority opinion declares that the Angat System, like the NIA, exercised a governmental

function because the nature of its powers and functions does not show that it was intended to bring to theGovernment any special corporate benefit or pecuniary profit, a strong dissenting opinion held that Angat Riversystem is a government entity exercising proprietary functions.

- The Angat dissenting opinion:

- Alegre protested the announced termination of his employment. He argued that although his contract did stipulatethat the same would terminate on July17, 1976, since his services were necessary and desirable in the usualbusiness of his employer, and his employment had lasted for five years, he had acquired the status of regularemployee and could not be removed except for valid cause.

-The employment contract of 1971 was executed when the Labor Code of the Philippines had not yet beenpromulgated, which came into effect some 3years after the perfection of the contract.

ISSUE

WON the NIR is a government agency with a juridical personality separate and distinct from the government, therebyopening it up to the possibility that it may be held liable for the damages caused by its driver, who was not its specialagent.

HELD

YES


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Reasoning the functions of government have been classified into governmental or constituent and proprietary orministrant. The former involves the exercise of sovereignty and considered as compulsory; the latter connotes merelythe exercise of proprietary functions and thus considered as optional. The National Irrigation Administration was notcreated for purposes of local government. While it may be true that the NIA was essentially a service agency of thegovernment aimed at promoting public interest and public welfare, such fact does not make the NIA essentially andpurely a "government-function" corporation. NIA was created for the purpose of "constructing, improving,rehabilitating, and administering all national irrigation systems in the Philippines, including all communal and pump

irrigation projects." Certainly, the state and the community as a whole are largely benefited by the services theagency renders, but these functions are only incidental to the principal aim of the agency, which is the irrigationof lands. NIA is a government agency invested with a corporate personality separate and distinct from thegovernment, thus is governed by the Corporation Law. Section 1 of Republic Act No. 3601 provides:

Sec. 1. Name and Domicile A body corporate is hereby created which shall be known as the National IrrigationAdministration. . . . which shall be organized immediately after the approval of this Act. It shall have its principal seatof business in the City of Manila and shall have representatives in all provinces, for the proper conduct of itsbusiness. (Emphasis for emphasis).

Besides, Section 2, subsection b of P.D. 552 provides that:

(b) To charge and collect from the beneficiaries of the water from all irrigation systems constructed by or under its

administration, such fees or administration charges as may be necessary to cover the cost of operation, maintenanceand insurance, and to recover the cost of construction within a reasonable period of time to the extent consistent withgovernment policy; to recover funds or portions thereof expended for the construction and/or rehabilitation ofcommunal irrigation systems which funds shall accrue to a special fund for irrigation development under section 2hereof; Unpaid irrigation fees or administration charges shall be preferred liens first, upon the land benefited, andthen on the crops raised thereon, which liens shall have preference over all other liens except for taxes on the land,and such preferred liens shall not be removed until all fees or administration charges are paid or the property is leviedupon and sold by the National Irrigation Administration for the satisfaction thereof. . . . The same section alsoprovides that NIA may sue and be sued in court. It has its own assets and liabilities. It also has corporate powers tobe exercised by a Board of Directors. Section2, subsection (f):

(f) . . . and to transact such business, as are directly or indirectly necessary, incidental or conducive to the attainmentof the above powers and objectives, including the power to establish and maintain subsidiaries, and in general, toexercise all the powers of a corporation under the Corporation Law, insofar as they are not inconsistent with the

provisions of this Act.

DISPOSITION

We conclude that the National Irrigation Administration is a government agency with a juridical personality separateand distinct from the government. It is not a mere agency of the government but a corporate body performingproprietary functions. Therefore, it may be held liable for the damages caused by the negligent act of its driver whowas not its special agent. ACCORDINGLY, the Motion for Reconsideration dated January 26, 1990 is DENIED WITHFINALITY. The decision of this Court in G.R. No. 55963 and G.R. No.61045 dated December 1, 1989 is herebyAFFIRMED.

DISSENTING: PADILLA:

To say that NIA has opened itself to suit is one thing; to say that it is liable for damages arising from tort committed byits employees, is still another thing. The state or a government agency performing governmental functions may beheld liable for tort committed by its employees only when it acts through a special agent.

.


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7. Santiago vs. Republic

Ildefonso Santiago, represented by his Attorney-in-Fact, Alfredo T. Santiago, petitioner, vs. The Government of the

Republic of the Philippines, represented by Director, Bureau of Plant Industry, and the Regional Director, Region IX,

Zamboanga City, repondent.

December 19, 1978

Fernando, J:

Facts:

Petitioner Ildefonso Santiago donated a parcel of land to the Bureau of Plant Industry on the terms that the Bureau

should construct a building and install lighting facilities on the said lot.

When time passed and there were still no improvements on the lot, Santiago filed a case pleading for the

revocation of such contract of donation but the trial court dismissed the petition claiming that it is a suit against the

government and should not prosper without the consent of the government.

Issue:

Whether or not the respondent government has waived its immunity from suit.

Held:

Yes.

Ratio:

The government's waiver of immunity was implied by virtue of the terms provided in the deed of donation. The

government is a beneficiary of the terms of the donation but it did not comply with such terms. Thus, the donor

Santiago has the right to be heard in the court. Also, to not allow the donor to be heard would be unethical and

contrary to equity which the government so advances. The Court of First Instance is hereby directed to proceed with

the case.


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8. Holy See vs Rosario

G.R. No. 101949238 SCRA 524

December 1, 1994

Petitioner: The Holy See

Respondent: Hon. Elidberto Rosario, Jr., in his capacity as Presiding Judge ofRTC Makati, Branch 61 and Starbright Sales Enterprises, Inc.

FACTS: Petition arose from a controversy over a parcel of land. Lot 5-A, registered under the name Holy See, wascontiguous to Lot 5-B and 5-D under the name of Philippine Realty Corporation (PRC). The land was donated by theArchdiocese of Manila to the Papal Nuncio, which represents the Holy See, who exercises sovereignty over theVatican City, Rome, Italy, for his residence.

Said lots were sold through an agent to Ramon Licup who assigned his rights to respondents Starbright SalesEnterprises, Inc.

When the squatters refuse to vacate the lots, a dispute arose between the two parties because both were unsurewhose responsibility was it to evict the squatters from said lots. Respondent Starbright Sales Enterprises Inc. insiststhat Holy See should clear the property while Holy See says that respondent corporation should do it or the earnestmoney will be returned. With this, Msgr. Cirilios, the agent, subsequently returned the P100,000 earnest money.

The same lots were then sold to Tropicana Properties and Development Corporation.

Starbright Sales Enterprises, Inc. filed a suit for annulment of the sale, specific performance and damages againstMsgr. Cirilios, PRC as well as Tropicana Properties and Development Corporation. The Holy See and Msgr. Cirilosmoved to dismiss the petition for lack of jurisdiction based on sovereign immunity from suit. RTC denied the motionon ground that petitioner already "shed off" its sovereign immunity by entering into a business contract. Thesubsequent Motion for Reconsideration was also denied hence this special civil action for certiorari was forwarded tothe Supreme Court.

ISSUE: Whether or not Holy See can invoke sovereign immunity.

HELD: The Court held that Holy See may properly invoke sovereign immunity for its non-suability. As expressed inSec. 2 Art II of the 1987 Constitution, generally accepted principles of International Law are adopted by our Courts

and thus shall form part of the laws of the land as a condition and consequence of our admission in the society ofnations.

It was noted in Article 31(A) of the 1961 Vienna Convention on Diplomatic Relations that diplomatic envoy shall begranted immunity from civil and administrative jurisdiction of the receiving state over any real action relating to privateimmovable property. The Department of Foreign Affairs (DFA) certified that the Embassy of the Holy See is a dulyaccredited diplomatic missionary to the Republic of the Philippines and is thus exempted from local jurisdiction and isentitled to the immunity rights of a diplomatic mission or embassy in this Court.

Furthermore, it shall be understood that in the case at bar, the petitioner has bought and sold lands in the ordinarycourse of real estate business, surely, the said transaction can be categorized as an act jure gestionis. However,petitioner has denied that the acquisition and subsequent disposal of the lot were made for profit but claimed that itacquired said property for the site of its mission or the Apostolic Nunciature in the Philippines.

The Holy See is immune from suit because the act of selling the lot of concern is non-propriety in nature. The lot

was acquired through a donation from the Archdiocese of Manila, not for a commercial purpose, but for the use ofpetitioner to construct the official place of residence of the Papal Nuncio thereof. The transfer of the property and itssubsequent disposal are likewise clothed with a governmental (non-proprietal) character as petitioner sold the lot notfor profit or gain rather because it merely cannot evict the squatters living in said property.

In view of the foregoing, the petition is hereby GRANTED and the complains were dismissed accordingly.


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9. Case: KHOSROW MINUCHER v. CA and ARTHUR SCALZO (G.R. 142396)Date: February 11, 2003Ponente:J. Vitug

Facts:

Minucher is an Iranian national who came to study in UP in 1974 and was appointed Labor Attache for the IranianEmbasies in Tokyo and Manila; he continued to stay in the Philippines when the Shah of Iran was deposed byKhomeini, he became a refugee of the UN and he headed the Iranian National Resistance Movement in the

Philippines.On the other hand, Scalzo was a special agent of the US Drugs Enforcement Agency. He conducts surveillanceoperations on suspected drug dealers in the Philippines believed to be the source of prohibited drugs shipped to theUS and make the actual arrest.

Minucher and one Abbas Torabian was charged for a violation of Act. 6425 (Dangerous Drugs Act of 1972) beforethe Pasig RTC, such criminal charge was followed by a buy-bust operation conducted by the Philippine policenarcotic agents to which Scalzo was a witness for the prosecution. They were acquitted.

Later on, Minucher filed a complaint for damages against Scalzo. It was said that Minucher and Scalzo came to knowof each other thru Jose Iigo; they conducted some business i.e. the former sold to the latter some caviar andPersian carpets. Scalzo then represented himself as a special agent of the Drug Enforcement Administration, DOJ ofUS.

Minucher expressed his desire to obtain a US Visa for him and his Abbass wife. Scalzo told him that he could helphim for a $2,000 fee per visa. After a series of business transactions between the two, when Scalzo came to deliverthe visas to Minuchers house, he told the latter that he would be leaving the Philippines soon and requested him tocome out of the house so he can introduce him to his cousin waiting in the cab. To his surprise, 30-40 armed Filipinosoldiers came to arrest him.

In his complaint for damages, he said that some of his properties were missing like Persian carpets, a paintingtogether with his TV and betamax sets. There was nothing left in his house. He averred that his arrest as a heroinetrafficker was well publicized and that when we got arrested, he was not given any food or water for 3 days.

In his defense, Scalzo asserted his diplomatic immunity as evidenced by a Diplomatic Note. He contended that it wasrecognized by the US Government pursuant to the Vienna Convention on Diplomatic Relations and the Philippinegovernment itself thru its Executive Department and DFA.

The courts ruled in favor of Scalzo on the ground that as a special agent of the US Drug Enforcement Administration,he was entitled to diplomatic immunity. Hence, the present recourse of Minucher.

Issue: WON Scalzo is entitled to diplomatic immunity

Held: Yes.

Ratio:

The Convention lists the classes of heads of diplomatic missions to include (a) ambassadors or nuncios accredited tothe heads of state, (b) envoys, ministers or internuncios accredited to the heads of states; and (c) charges d' affairsaccredited to the ministers of foreign affairs. Comprising the "staff of the (diplomatic) mission" are the diplomatic staff,the administrative staff and the technical and service staff. Only the heads of missions, as well as members of thediplomatic staff, excluding the members of the administrative, technical and service staff of the mission, are accordeddiplomatic rank. Even while the Vienna Convention on Diplomatic Relations provides for immunity to the members ofdiplomatic missions, it does so, nevertheless, with an understanding that the same be restrictively applied. The mainyardstick in ascertaining whether a person is a diplomat entitled to immunity is thedetermination of whetheror not he performs duties of diplomatic nature.

Scalzo was an Assistant Attach of the US diplomatic mission. An attach belongs to a category of officers in the

diplomatic establishment who may be in charge of its cultural, press, administrative or financial affairs. There couldalso be a class of attaches belonging to certain ministries or departments of the government, other than the foreignministry or department, who are detailed by their respective ministries or departments with the embassies such as themilitary, naval, air, commercial, agricultural, labor, science, and customs attaches, or the like . Attaches assist achief of mission in his duties and are administratively under him, but theirmain function is to observe,analyze and interpret trends and developments in their respective fields in the host country andsubmitreports to their own ministries or departments in the home government. These officials are not generallyregarded asmembers of the diplomatic mission, nor are they normally designated as having diplomatic rank.

Vesting a person with diplomatic immunity is a prerogative of the executive branch of the government. Thegovernment of the United States itself, which Scalzo claims to be acting for, has formulated its standards for


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recognition of a diplomatic agent. The State Department policy is to only concede diplomatic status to a person whopossesses an acknowledged diplomatic title and "performs duties of diplomatic nature." Supplementary criteria foraccreditation are the possession of a valid diplomatic passport or, from States which do not issue such passports, adiplomatic note formally representing the intention to assign the person to diplomatic duties, the holding of a non-immigrant visa, being over twenty-one years of age, and performing diplomatic functions on an essentially full-timebasis. Diplomatic missions are requested to provide the most accurate and descriptive job title to that which currentlyapplies to the duties performed. The Office of the Protocol would then assign each individual to the appropriate

functional category.While the diplomatic immunity of Scalzo might thus remain contentious, it was sufficiently established that,indeed,he worked for the United States Drug Enforcement Agency and was tasked to conduct surveillanceof suspected drugactivities within the country on the dates pertinent to this case. If it should be ascertainedthat Arthur Scalzo was acting wellwithin his assigned functions when he committed the acts alleged in thecomplaint, the present controversy could then beresolved under the related doctrine of State Immunity fromSuit.

The precept that a State cannot be sued in the courts of a foreign state is a long-standing rule of customaryinternational law then closely identified with the personal immunity of a foreign sovereign from suit and, with theemergence of democratic states, made to attach not just to the person of the head of state, or his representative, butalso distinctly to the state itself in its sovereign capacity. If the acts giving rise to a suit are those of a foreigngovernment done by its foreign agent, although not necessarily a diplomatic personage, but acting in his officialcapacity, the complaint could be barred by the immunity of the foreign sovereign from suit without its consent. Suing arepresentative of a state is believed to be, in effect, suing the state itself. The proscription is not accorded for the

benefit of an individual but for the State, in whose service he is, under the maxim - par in parem, non habet imperium- that all states are sovereign equals and cannot assert jurisdiction over one another.

22The implication, in broad

terms, is that if the judgment against an official would require the state itself to perform an affirmative act to satisfy theaward, such as the appropriation of the amount needed to pay the damages decreed against him, the suit must beregarded as being against the state itself, although it has not been formally impleaded.

(T)he doctrine of immunity from suit will not apply and may not be invoked where the public official is being sued inhis private and personal capacity as an ordinary citizen. The cloak of protection afforded the officers and agents ofthe government is removed the moment they are sued in their individual capacity. This situation usually arises wherethe public official acts without authority or in excess of the powers vested in him. It is a well-settled principle of lawthat a public official may be liable in his personal private capacity for whatever damage he may have caused by hisact done with malice and in bad faith or beyond the scope of his authority and jurisdiction."

Indeed, a foreign agent, operating within a territory, can be cloaked with immunity from suit but only as long as it canbe established that he is acting within the directives of the sending state. The consent of the host state is anindispensable requirement of basic courtesy between the two sovereigns.

While evidence is wanting to show any similar agreement between the governments of the Philippines and of theUnited States (for the latter to send its agents and to conduct surveillance and related activities of suspected drugdealers in the Philippines),

the consent or imprimatur of the Philippine government to the activities of the United States DrugEnforcement Agency,however, can be gleaned from the facts heretofore elsewhere mentioned. The officialexchanges of communication betweenagencies of the government of the two countries, certifications fromofficials of both the Philippine Department of ForeignAffairs and the United States Embassy, as well as theparticipation of members of the Philippine Narcotics Command in the"buy-bust operation" conducted at theresidence of Minucher at the behest of Scalzo, may be inadequate to support the "diplomatic status" of thelatter but they give enough indication that the Philippine government has given its imprimatur, ifnot consent,to the activities within Philippine territory of agent Scalzo of the United States Drug Enforcement Agency.The job description of Scalzo has tasked him to conduct surveillance on suspected drug suppliers and, after havingascertained the target, to inform local law enforcers who would then be expected to make the arrest. In conducting

surveillance activities on Minucher, later acting as the poseur-buyer during the buy-bust operation, and thenbecoming a principal witness in the criminal case against Minucher, Scalzo hardly can be said to have acted beyondthe scope of his official function or duties.


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10. G.R. No. 154705. June 26, 2003THE REPUBLIC OF INDONESIA, HISEXCELLENCY

AMBASSADORSOERATMIN, and MINISTERCOUNSELLOR AZHARI KASIM vs. JAMES VINZON, doing business

under the name and style of VINZON TRADE AND SERVICES

FACTS:Petitioner, Republic of Indonesia, represented by its Counsellor entered into a Maintenance Agreement withrespondent James Vinzon, owner of Vinzon Trade and Services. The Maintenance Agreement stated that respondent

shall, for a consideration, maintain specified equipment at the Embassy Main Building, Embassy Annex Building andthe Wisma Duta, the official residence of petitioner Ambassador Soeratmin. The equipment covered by theMaintenance Agreement are air conditioning units, generator sets, electrical facilities, water heaters, and water motorpumps. It is likewise stated therein that the agreement shall be effective for a period of four years and will renew itselfautomatically unless cancelled by either party by giving thirty days prior written notice from the date of expiry.Petitioners claim that sometime prior to the date of expiration of the said agreement, or before August 1999, theyinformed respondent that the renewal of the agreement shall be at the discretion of the incoming Chief ofAdministration. When the Chief ofAdministration assumed his position, he allegedly found respondents work andservices unsatisfactory and not in compliance with the standards in the Agreement. Hence, the Indonesian Embassyterminated the agreement. Petitioners claim, that they had earlier verbally informed respondent of their decision toterminate the agreement. On the other hand, respondent claims that the aforesaid termination was arbitrary andunlawful. Hence, he filed a complaint against the petitioners which opposed by invoking immunity from suit.

ISSUE: WON the Republic of Indonesia can successfully invoke state immunity from suit.

HELD: YES. There is no dispute that the establishment of a diplomatic mission is an act jure imperii. A sovereignState does not merely establish a diplomatic mission and leave it at that; the establishment of a diplomatic missionencompasses its maintenance and upkeep. Hence, the State may enter into contracts with private entities to maintainthe premises, furnishings and equipment of the embassy and the living quarters of its agents and officials. It istherefore clear that petitioner Republic of Indonesia was acting in pursuit of a sovereign activity when it entered into acontract with respondent for the upkeep or maintenance. The Solicitor General, in his Comment, submits the viewthat, the Maintenance Agreement was entered into by the Republic of Indonesia in the discharge of its governmentalfunctions. In such a case, it cannot be deemed to have waived its immunity from suit.


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11. G.R. No. 113191 September 18, 1996

DEPARTMENT OF FOREIGN AFFAIRS, petitioner,

vs.

NATIONAL LABOR RELATIONS COMMISSION, HON. LABOR ARBITER NIEVES V. DE CASTRO and JOSE C.

MAGNAYI, respondents.

Facts:A complaint for illegal dismissal was filed against the Asian Development Bank ("ADB"). Upon receipt of summonses,

both the ADB and the DFA notified the Labor Arbiter that the ADB, as well as its President and Officers, were covered by animmunity from legal process except for borrowings, guaranties or the sale of securities pursuant to Article 50(1) and Article

55 of the Agreement Establishing the Asian Development Bank (the "Charter") in relation to Section 5 and Section 44 of the

Agreement Between The Bank And The Government Of The Philippines Regarding The Bank's Headquarters (the

"Headquarters Agreement"). The Labor Arbiter took cognizance of the complaint on the impression that the ADB had waived

its diplomatic immunity from suit, and issued a judgment in favor of the complainant. The ADB did not file an appeal, but the

DFA sought nullification with the NLRC. The latter denied the request.

1st

Issue: Whether or not ADB is immune from suit?

Ruling: No. Under the Charter and Headquarters Agreement, the ADB enjoys immunity from legal process of every form,

except in the specified cases of borrowing and guarantee operations, as well as the purchase, sale and underwriting of

securities. The Banks officers, on their part, enjoy immunity in respect of all acts performed by them in their official capacity.

The Charter and the Headquarters Agreement granting these immunities and privileges are treaty covenants and

commitments voluntarily assumed by the Philippine government which must be respected. Being an internationalorganization that has been extended a diplomatic status, the ADB is independent of the municipal law. One of the basic

immunities of an international organization is immunity from local jurisdiction, i.e., that it is immune from the legal writs and

processes issued by the tribunals of the country where it is found. The obvious reason for this is that the subjection of such

an organization to the authority of the local courts would afford a convenient medium thru which the host government may

interfere in their operations or even influence or control its policies and decisions of the organization; besides, such

subjection to local jurisdiction would impair the capacity of such body to discharge its responsibilities impartially on behalf of

its member-states."

The ADB didn't descend to the level of an ordinary party to a commercial transaction, which should have constituted a

waiver of its immunity from suit, by entering into service contracts with different private companies. There are two conflicting

concepts of sovereign immunity, each widely held and firmly established. According to the classical or absolute theory, a

sovereign cannot, without its consent, be made a respondent in the Courts of another sovereign. According to the newer or

restrictive theory, the immunity of the sovereign is recognized only with regard to public acts or acts jure imperii of a sta te,

but not with regard to private act or acts jure gestionis. Certainly, the mere entering into a contract by a foreign state with aprivate party cannot be the ultimate test. Such an act can only be the start of the inquiry.

The logical question is whether the foreign state is engaged in the activity in the regular course of business. If the foreign

state is not engaged regularly in a business or trade, the particular act or transaction must then be tested by its nature. If the

act is in pursuit of a sovereign activity, or an incident thereof, then it is an act jure imperii, especially when it is not

undertaken for gain or profit. The service contracts referred to by private respondent have not been intended by the ADB for

profit or gain but are official acts over which a waiver of immunity would not attach.

2nd Issue: Whether or not the DFA has the legal standing to file the present petition?

Ruling: The DFA's function includes, among its other mandates, the determination of persons and institutions covered by

diplomatic immunities, a determination which, when challenged, entitles it to seek relief from the court so as not to seriously

impair the conduct of the country's foreign relations. The DFA must be allowed to plead its case whenever necessary or

advisable to enable it to help keep the credibility of the Philippine government before the international community. When

international agreements are concluded, the parties thereto are deemed to have likewise accepted the responsibility of

seeing to it that their agreements are duly regarded. In our country, this task falls principally on the DFA as being the highest

executive department with the competence and authority to so act in this aspect of the international arena.


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12.G.R. No. 79253 March 1, 1993

UNITED STATES OF AMERICA and MAXINE BRADFORD, petitioners,

vs.

HON. LUIS R. REYES, as Presiding Judge of Branch 22, Regional Trial Court of Cavite, and NELIA T.

MONTOYA, respondents.

FACTS: Private respondent, hereinafter referred to as Montoya, is an American citizen who, at the time material to

this case, was employed as an identification (I.D.) checker at the U.S. Navy Exchange (NEX) at the Joint United

States Military Assistance Group (JUSMAG) headquarters in Quezon City. She is married to one Edgardo H.

Montoya, a Filipino-American serviceman employed by the U.S. Navy and stationed in San Francisco, California.

Petitioner Maxine Bradford, hereinafter referred to as Bradford, is likewise an American citizen who was the activity

exchange manager at the said JUSMAG Headquarters.

As a consequence of an incident which occurred on 22 January 1987 whereby her body and belongings were

searched after she had bought some items from the retail store of the NEX JUSMAG, where she had purchasing

privileges, and while she was already at the parking area, Montoya filed on

7 May 1987 a complaint 1 with the Regional Trial Court of her place of residence Cavite against Bradford for

damages due to the oppressive and discriminatory acts committed by the latter in excess of her authority as storemanager of the NEX JUSMAG.

In support of the motion, the petitioners claimed that JUSMAG, composed of an Army, Navy and Air Group, had been

established under the Philippine-United States Military Assistance Agreement entered into on 21 March 1947 to

implement the United States' program of rendering military assistance to the Philippines. Its headquarters in Quezon

City is considered a temporary installation under the provisions of Article XXI of the Military Bases Agreement of

1947. Thereunder, "it is mutually agreed that the United States shall have the rights, power and authority within the

bases which are necessary for the establishment, use and operation and defense thereof or appropriate for the

control thereof." The 1979 amendment of the Military Bases Agreement made it clear that the United States shall

have "the use of certain facilities and areas within the bases and shall have effective command and control over such

facilities and over United States personnel, employees, equipment and material." JUSMAG maintains, at its Quezon

City headquarters, a Navy Exchange referred to as the NEX-JUSMAG. Checking of purchases at the NEX is a

routine procedure observed at base retail outlets to protect and safeguard merchandise, cash and equipmentpursuant to paragraphs 2 and 4(b) of NAVRESALEACT SUBIC INST. 5500.1. 7 Thus, Bradford's order to have

purchases of all employees checked on 22 January 1987 was made in the exercise of her duties as Manager of the

NEX-JUSMAG.

ISSUES: whether or not the trial court committed grave abuse of discretion in denying the motion to dismiss based on

the following grounds:

(a) the complaint in Civil Case No. 224-87 is in effect a suit against the public petitioner, a foreign sovereign immune

from suit which has not given consent to such suit and

(b) Bradford is immune from suit for acts done by her in the performance of her official functions as manager of the

U.S. Navy Exchange of JUSMAG pursuant to the Philippines-United States Military Assistance Agreement of 1947

and the Military Bases Agreement of 1947, as amended.

HELD: The petition was DENIED for lack of merit. There can be no doubt that on the basis of the allegations in thecomplaint, Montoya has a sufficient and viable cause of action. Bradford's purported non-suability on the ground of

state immunity is then a defense which may be pleaded in the answer and proven at the trial.

Since Bradford did not file her Answer within the reglementary period, the trial court correctly declared her in default

upon motion of the private respondent. The judgment then rendered against her on 10 September 1987 after the ex

parte reception of the evidence for the private respondent and before this Court issued the Temporary Restraining

Order on 7 December 1987 cannot be impugned. The filing of the instant petition and the knowledge thereof by the

trial court did not prevent the latter from proceeding with Civil Case No.


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224-87. "It is elementary that the mere pendency of a special civil action for certiorari, commenced in relation to a

case pending before a lower Court, does not interrupt the course of the latter when there is no writ of injunction

restraining it."

SALIENT POINTS:

The Doctrine of State Immunity sometimes called the royal prerogative of dishonesty as declared in the

Constitution affirms, The state may not be sued without its consent".

This provision is merely recognition of the sovereign character of the state andan express affirmation of the unwritten

rule insulating it from the jurisdiction of the courtsof justice.According to Justice Holmes the doctrine of non-suability

is based not on any formalconception or obsolete theory but on the logical and practical ground that there can be no

legal right against the authority, which makes the law on which the right depends. Another justification is the practical

consideration that the demands and inconveniences of litigation will divert the time and resources of the state from

the more pressing matters demanding its attention, to the prejudice of the public welfare.

The doctrine is also available to foreign states insofar as they are sought to be sued in the courts of the local state.

The added basis in this case is the principle of the sovereignequality of states, under which

one state cannot assert jurisdiction over another inviolation of the maximpar in parem non habet imperium. To do so would unduly vex the peace of nations."

Exemption: Article 31 of the Vienna Convention on Diplomatic Relations admits of exceptions. It reads:

1. A diplomatic agent shall enjoy immunity from the criminal jurisdiction of the receiving State. He shall also

enjoy immunity from its civil and administrative jurisdiction except in the case of:

xxx xxx xxx

(c) an action relating to any professional or commercial activity exercised by the diplomatic agent in the

receiving State outside his official functions (Emphasis supplied).

How may consent of the State to be sued given?

The consent of the state to be sued may be given expressly or impliedly. Express consent may be manifested either

through a general law or a special law. Implied consent is given when the State itself commences litigation or when it

enters into a contract. The general law providing for the standing consent of the State to be sued is Act No.3083,

declaring that the Government of the Philippine Islands hereby consents and submits to be sued upon any moneyed

claim involving liability arising from contract,express or implied, which could serve as a basis of civil action between

private parties.

Under C.A. No. 327 as amended by P.D. No. 1445, a claim against the government mustfirst be filed with theCommission on Audit, which must act upon it within sixty (60)days. Rejection of the claim will authorize the claimant

to elevate the matter to theSupreme Court on certiorari and in effect sue the state with its consent.The express

consent of the State to be sued must be embodied in a duly enacted statute and may not be given by a mere counsel

of the government.It should also be observed that when the State gives its consent to be sued, it does not thereby

also to the execution of the judgment against it. Such execution will require another waiver, lacking which the

decision cannot be enforced against the State.


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When is a suit against a public official deemed to be a suit against the State?

Because actions are rarely instituted directly against the Republic of the Philippines, theusual practice is to file such

claims not against the State itself but against the officer of the government who is supposed to discharge the

responsibility or grant the redresseddemanded. It is important then, to determine if the State is the real party in

interest, thatis, that the claim if proved will be a direct liability of the State and not merely of theofficer impleaded. Ifthis is shown, the action can be dismissed as a suit against the Stateunless its immunity had been previously waived.

There are many instances when a public officer may be sued in his official capacitywithout the necessity of first

obtaining the consent of the State to be sued. A publicofficer may be impleaded to require him to do a duty required

by law, or to restrain himfrom doing an act alleged to be unconstitutional or illegal, or to recover from him

taxesunlawfully assessed or collected.

It has been held also that where an action is filed againsta public officer for recovery only of title or possession of

property claimed to be held byhim in his official capacity, the said action is not a suit against the State for which prior

waiver of immunity is required. But it is different where there is an addition a claim for recovery of damages, such as

accrued rentals, inasmuch as it allowance would require thegovernment to appropriate the necessary amount for the

satisfaction of the judgment.Assuming the decision is rendered against the public officer impleaded,

enforcementthereof will require an affirmative act from the State, such as the appropriation of theneeded amount tosatisfy the judgment. If it does, the suit is one against the State and itsinclusion as party defendant is necessary. If on

the other hand, the officer impleaded may by himself alone comply with the decision of the court without the necessity

o involvingthe State, then the suit can prosper against him and will not be considered a claim againstthe State. Lastly,

when a public officer acts without or in excess of jurisdiction, any injurycaused by him is his own personal liability and

cannot be imputed to the State.

What are the instances when a suit against the State is proper?

Three instances are considered suit against the state. These are:

(A) When the Republic is sued by name. To sue the State, its express consent should be ask and be manifested

through a general law or a special law, while the implied consent is given when the State commences litigation or the

state entering into a contract. The general law that provides for the consent of the State to be sued is Act No.

3083 (the Government of the Philippine Islands hereby consents and submits to be sued upon any moneyed claiminvolving liability arising from contract, express or implied, which could serve as a basis of civil action between

private parties.).

(B) When an Unincorporated government agency is sued. If suit is filed against one of the government entities, it

must be ascertained whether or not the State, as the principal that may ultimately be held liable, has given its consent

to be sued. This ascertainment will depend in the first instance on whether the government agency impleaded

is incorporated or unincorporated. An incorporated agency has a charter of its own that invests it with a separate

juridical personality, like the Social Security System, the University of the Philippines and the City of Manila. On the

other hand, the unincorporated agency has no separate juridical

personality but is merged in the general machinery of the government, like the Department of Justice, the Bureau of

Mines and the Government Printing Office.If the agency is incorporated, the test of its suability is found in its charter.

The simple rule is that it is suable if its charter says so, and this is true regardless of the functions it is performing.Municipal corporations like provinces and cities, are agencies of the State when they are engaged in governmental

functions and therefore should enjoy the sovereign immunity from suits. They are subject to suit even in the

performance of such functions because their charter provides that they can sue and be sued. Unincorporated agency,

as there would be no charter and no separate juridical personality to consult, any suit filed against it is necessarily an

action against the Philippine Government of which itis part of. This being so, it is necessary to determine the nature of

the functions in which the agency is engaged, so as to hold it suable if they are proprietary and not suable if theyare

governmental. The test in every case is the nature of the primary functions being discharged. The non-suability of the

State is available to the agency even if it is shown that it is engaged not only in governmental functions but also, as a


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sideline, or incidentally in proprietary enterprises.

(C) When a public officer is sued in the performance of his official acts and the ultimateliablity rest upon the State. In

such cases, it is important to determine if the State is real party in interest, such as the claim if proved will be a direct

liability of the State and not merely of the officer impleaded.Three denominators are common among these three

considerations. First is that it must require the government to disburse public funds to satisfy any award in that case

or an amount is appropriated, Second, it would mean loss of government property.

May the government validly invoke the doctrine of State immunity from suit if its invocation will serve as an instrument

for perpetrating an injustice on a citizen?

Although the doctrine of State immunity is sometimes called the royal prerogative of dishonesty, it must be observed

in fairness that the State does not often avail itself of this rule to take undue advantage of parties that may have

legitimate claims against it. The principle fortunately has a built-in qualification: the state may, if it so desires, divest

itself of its sovereign immunity and thereby voluntarily open itself to suit. In fine,the state may be sued if it gives its

consent.


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13. Lansang vs. CA G.R. No. 102667, February 23, 2000

Facts: Private respondents General Assembly of the Blind, Inc. (GABI) and Jose Iglesias were allegedly awarded a

verbal contract of lease in 1970 to occupy a portion of Rizal Park by the National Parks Development Committee

(NPDC), a government initiated civic body engaged in the development of national parks. Private respondents were

allegedly given office and library space as well as kiosks area selling food and drinks. Private respondent GABI was

to remit to NPDC 40% of the profits derived from operating the kiosks. After the EDSA Revolution, petitionerLansang, the new Chairman of the NPDC, sought to clean up Rizal Park. Petitioner terminated the so-called verbal

agreement with GABI and demanded that the latter vacate the premises and the kiosks it ran privately within the

public park. On the day of the supposed eviction, GABI filed an action for damages and injunction against petitioner.

Issue: Whether or not the complaint filed against the petitioner is in reality a complaint against the State, which could

not prosper without the States consent

Held: The doctrine of state immunity from suit applies to complaints filed against public officials for acts done in the

performance of their duties. The rule is that the suit must be regarded as one against the state where satisfaction of

the judgment against the public official concerned will require the state itself to perform a positive act, such as

appropriation of the amount necessary to pay the damages awarded to the plaintiff.

The rule does not apply where the public official is charged in his official capacity for acts that are unlawful andinjurious to the rights of others. Public officials are not exempt, in their personal capacity, from liability arising from

acts committed in bad faith. Neither does its apply where the public official is clearly being sued not in his official

capacity but in his personal capacity, although the acts complained of may have been committed while he occupied a

public position.

In the case, the petitioner is being sued not in his capacity as NPDC chairman but in his personal capacity. It is also

evident the petitioner is sued allegedly for having personal motives in ordering the ejectment of GABI from Rizal Park.

The important question to consider is whether or not petitioner abused his authority in ordering the ejectment of

GABI.

The Court found no evidence of such abuse of authority. Rizal Park is beyond the commerce of man and, thus, could

not be the subject of lease contract. That private respondents were allowed to occupy office and kiosk spaces in thepark was only a matter of accommodation by the previous administrator. This being so, petitioner may validly

discontinue the accommodation extended to private respondents, who may be ejected from the park when

necessary. Private respondents cannot and do not claim a vested right to continue to occupy Rizal Park.
http://cofferette.blogspot.com/2009/01/lansang-vs-ca-gr-no-102667-february-23.htmlhttp://cofferette.blogspot.com/2009/01/lansang-vs-ca-gr-no-102667-february-23.html


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

MUNICIPALITY OF MAKATI, petitioner,vs.THE HONORABLE COURT OF APPEALS, HON. SALVADOR P. DE GUZMAN, JR., as Judge RTC of Makati,Branch CXLII ADMIRAL FINANCE CREDITORS CONSORTIUM, INC., and SHERIFF SILVINO R. PASTRANA,respondents.

Doctrine:Municipal revenues derived from taxes, licenses and market fees, and which are intended primarily and exclusivelyfor the purpose of financing the governmental activities and functions of the municipality, are exempt from execution.

Facts:In lieu of an expropriation proceeding filed in court, petitioner Municipality of Makati opened a bank account with thePNB Buendia Branch under petitioner's name containing the sum of P417,510.00, pursuant to the provisions of Pres.Decree No. 42. After due hearing, the court fixed the amount of the property and ordered petitioner to pay suchamount minus the advanced payments it has made. After this decision became final and executory, a writ ofexecution was issued and a Notice of Garnishment was served by respondent sheriff upon the manager of the PNBBuendia Branch. However, respondent sheriff was informed that a "hold code" was placed on the account ofpetitioner. Private respondent then filed a motion praying for the court to order the bank to deliver to the sheriff theunpaid balance, while petitioner also filed a motion to lift the garnishment.

While these motions are pending, a Manifestation was filed, informing the court that private respondent was nolonger the owner of the subject property and that ownership to this has been transferred to Philippine Savings Bank,Inc. A compromise agreement was made between private respondent and Philippine Savings Bank, Inc., which wasthen approved by the court. The court further ordered PNB Buendia Branch to immediately release to PSB the sum ofP4,953,506.45 which corresponds to the balance of the appraised value of the subject property, from the garnishedaccount of petitioner but the bank failed to comply as it was still waiting for proper authorization from the PNB headoffice enabling it to make a disbursement for the amount so ordered.

As the case was in the Supreme Court, petitioner raised for the f irst time that it had two accounts with PNB BuendiaBranch: one was made exclusively for the expropriation of the subject property, and the other is for statutoryobligations and other purposes of the municipal government

Issue:

Whether or not the balance of the appraised value of the subject property may be levied upon the second account ofpetitioner municipality.

Held:In this jurisdiction, well-settled is the rule that public funds are not subject to levy and execution, unless otherwiseprovided for by statute. More particularly, the properties of a municipality, whether real or personal, which arenecessary for public use cannot be attached and sold at execution sale to satisfy a money judgment against themunicipality. Municipal revenues derived from taxes, licenses and market fees, and which are intended primarily andexclusively for the purpose of financing the governmental activities and functions of the municipality, are exempt fromexecution. The foregoing rule finds application in the case at bar. Absent a showing that the municipal council ofMakati has passed an ordinance appropriating from its public funds an amount corresponding to the balance dueunder the RTC decision dated June 4, 1987, less the sum of P99,743.94 deposited in Account No. S/A 265-537154-3, no levy under execution may be validly effected on the public funds of petitioner deposited in Account No. S/A 263-530850-7.

WHEREFORE, the Court Resolved to ORDER petitioner Municipality of Makati to immediately pay Philippine SavingsBank, Inc. and private respondent the amount of P4,953,506.45. Petitioner is hereby required to submit to this Courta report of its compliance with the foregoing order within a non-extendible period of SIXTY (60) DAYS from the dateof receipt of this resolution.


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15. CITY OF CALOOCAN and NORMA M. ABRACIA, petitioners, v. HON. MAURO T. ALLARDE, Presiding

Judge of Branch 123, RTC of Caloocan City, ALBERTO A.CASTILLO, Deputy Sheriff of Branch 123, RTC of

Caloocan City, and DELFINA HERNANDEZSANTIAGO and PHILIPPINE NATIONAL BANK (PNB), respondents.

G.R. No. 107271; September 10, 2003

CORONA, J.:

FACTS:

In 1972, Mayor Marcial Samson of Caloocan abolished the position of Assistant City Administrator and 17 otherpositions via Ordinance No. 1749. The affected employees assailed the legality of the abolition. The CFI in 1973declared abolition illegal and ordered the reinstatement of all the dismissed employees and the payment of theirback-wages and other emoluments. The City Government appealed the decision but such was dismissed.In 1986 the City paid Santiago P75,083.37 as partial payment of her back-wages. The others were paid in full.In 1987 the City appropriated funds for her unpaid back salaries (supplemental budget #3) but the City refused torelease the money to Santiago. The City of Caloocan argued that Santiago was not entitled to back wages. On July27, 1992 Sheriff Castillo levied and sold at public auction one of the motor vehicles of the City Government forP100,000. The amount was given to Santiago. The City Government questioned the validity of the motor vehicle;properties of the municipality were exempt from execution. Judge Allarde denied the motion and directed the sheriffto levy and schedule at public auction 3 more vehicles. On October 5, 1993 the City Council of Caloocan passedOrdinance No. 0134 which included the amount of P439,377.14 claimed by Santiago as back-wages, plus interest.Judge Allarde issued an order to the City Treasurer to release the check but the City Treasurer cant do so becausethe Mayor refuses to sign the check. On May 7, 1993. Judge Allarde ordered the Sheriff to immediately garnish thefunds of the City Government of Caloocan corresponding to the claim of Santiago. Notice of garnishment wasforwarded to the PNB but the City Treasurer sent an advice letter to PNB that the garnishment was illegal and that itwould hold PNB liable for any damages which may be caused by the withholding the funds of the city.

ISSUE:Whether or not the funds of City of Caloocan, in PNB, may be garnished (i.e. exempt from execution), tosatisfy Santiagos claim.

HELD:

Garnishment is considered a specie of attachment by means of which the plaintiff seeks to subject to his claimproperty of the defendant in the hands of a third person, or money owed by such third person or garnishee to thedefendant. The rule is and has always been that all government funds deposited in the PNB or any other officialdepositary of the Philippine Government by any of its agencies or instrumentalities, whether by general or specialdeposit, remain government funds and may not be subject to garnishment or levy, in the absence of a correspondingappropriation as required by law. Even though the rule as to immunity of a state from suit is relaxed, the power of thecourts ends when the judgment is rendered. Although the liability of the state has been judicially ascertained, thestate is at liberty to determine for itself whether to pay the judgment or not, and execution cannot issue on a judgmentagainst the state. Such statutes do not authorize a seizure of state property to satisfy judgments recovered, and onlyconvey an implication that the legislature will recognize such judgment as final and make provision for the satisfactionthereof. However, the rule is not absolute and admits of a well-defined exception, that is, when there is acorresponding appropriation as required by law.In such a case, the monetary judgment may be legally enforced by judicial processes. Herein, the City Council ofCaloocan already approved and passed Ordinance No. 0134, Series of 1992, allocating the amount ofP439,377.14for Santiagos back-wages plus interest. This case, thus, fell squarely within the exception. The judgment

of the trial court could then be validly enforced against such funds.


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16. RP v. VillasorG.R. No. L-30671 November 28, 1973REPUBLIC OF THE PHILIPPINES, petitioner,vs.HON. GUILLERMO P. VILLASOR, as Judge of the Court of First Instance of Cebu, Branch I, THE PROVINCIALSHERIFF OF RIZAL, THE SHERIFF OF QUEZON CITY, and THE SHERIFF OF THE CITY OF MANILA, THECLERK OF COURT, Court of First Instance of Cebu, P. J. KIENER CO., LTD., GAVINO UNCHUAN, AND

INTERNATIONAL CONSTRUCTION CORPORATION, respondents.

Consent to be sued does not include consent to execution

Facts:On July 7, 1969, a decision was rendered in Special Proceedings No. 2156-R in favor of respondents P.J. Kiener Co.,Ltd., Gavino Unchuan, and International Construction Corporation and against petitioner confirming the arbitrationaward in the amount of P1,712,396.40. The award is for the satisfaction of a judgment against the PhilippineGovernment. On June 24, 1969, respondent Honorable Guillermo Villasor issued an Order declaring the decisionfinal and executory. Villasor directed the Sheriffs of Rizal Province, Quezon City as well as Manilato execute saiddecision. The Provincial Sheriff of Rizal served Notices of Garnishment with several Banks, especially on PhilippineVeterans Bank and PNB. The funds of the Armed Forces of the Philippines on deposit with Philippine Veterans Bankand PNB are public funds duly appropriated and allocated for the payment of pensions of retirees, pay andallowances of military and civilian personnel and for maintenance and operations of the AFP. Petitioner, on certiorari,filed prohibition proceedings against respondent Judge Villasor for acting in excess of jurisdiction with grave abuse of

discretion amounting to lack of jurisdiction in granting the issuance of a Writ of Execution against the properties of theAFP, hence the notices and garnishment are null and void.

Issue: Is the Writ of Execution issued by Judge Villasor valid?

Held: What was done by respondent Judge is not in conformity with the dictates of the Constitution. It is afundamental postulate of constitutionalism flowing from the juristic concept of sovereignty that the state as well as itsgovernment is immune from suit unless it gives its consent. A sovereign is exempt from suit, not because of anyformal conception or obsolete theory, but on the logical and practical ground that there can be no legal right asagainst the authority that makes the law on which the right depends. The State may not be sued without its consent.A corollary, both dictated by logic and sound sense from a basic concept is that public funds cannot be the object of agarnishment proceeding even if the consent to be sued had been previously granted and the state liability adjudged.The universal rule that where the State gives its consent to be sued by private parties either by general or speciallaw, it may limit claimants action only up to the completion of proceedings anterior to the stage of execution and thatthe power of the Courts ends when the judgment is rendered, since the government funds and properties may not be

seized under writs of execution or garnishment to satisfy such judgments, is based on obvious considerations ofpublic policy. Disbursements of public funds must be covered by the corresponding appropriation as required by law.The functions and public services rendered by the State cannot be allowed to be paralyzed or disrupted by thediversion of public funds from their legitimate and specific objects, as appropriated by law.


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17. G.R. No. L-61744 June 25, 1984

MUNICIPALITY OF SAN MIGUEL, BULACAN, petitioner,vs.HONORABLE OSCAR C. FERNANDEZ, in his capacity as the Presiding Judge, Branch IV, Baliuag, Bulacan,The PROVINCIAL SHERIFF of Bulacan, MARGARITA D. VDA. DE IMPERIO, ADORACION IMPERIO, RODOLFOIMPERIO, CONRADO IMPERIO, ERNESTO IMPERIO, ALFREDO IMPERIO, CARLOS IMPERIO, JR., JUANIMPERIO and SPOUSES MARCELO PINEDA and LUCILA PONGCO, respondents.

Pascual C. Liatchko for petitioner.

The Solicitor General and Marcelo Pineda for respondents.

RELOVA, J .:

In Civil Case No. 604-B, entitled "Margarita D. Vda. de Imperio, et al. vs. Municipal Government of San Miguel,Bulacan, et al.", the then Court of First Instance of Bulacan, on April 28, 1978, rendered judgment holding hereinpetitioner municipality liable to private respondents, as follows:

WHEREFORE, premises considered, judgment is hereby rendered in favor of the plaintiffs andagainst the defendant Municipal Government of San Miguel Bulacan, represented by Mayor MarMarcelo G. Aure and its Municipal Treasurer:

1. ordering the partial revocation of the Deed of Donation signed by the deceased Carlos Imperio in

favor of the Municipality of San Miguel Bulacan, dated October 27, 1947 insofar as Lots Nos. 1, 2,3, 4 and 5, Block 11 of Subdivision Plan Psd-20831 are concerned, with an aggregate total area of4,646 square meters, which lots are among those covered and described under TCT No. T-1831 ofthe Register of Deeds of Bulacan in the name of the Municipal Government of San Miguel Bulacan,

2. ordering the defendant to execute the corresponding Deed of Reconveyance over theaforementioned five lots in favor of the plaintiffs in the proportion of the undivided one-half ()share in the name of plaintiffs Margarita D. Vda. de Imperio, Adoracion, Rodolfo, Conrado, Ernesto,Alfredo, Carlos, Jr. and Juan, all surnamed Imperio, and the remaining undivided one-half ()share in favor of plaintiffs uses Marcelo E. Pineda and Lucila Pongco;

3. ordering the defendant municipality to pay to the plaintiffs in the proportion mentioned in theimmediately preceding paragraph the sum of P64,440.00 corresponding to the rentals it hascollected from the occupants for their use and occupation of the premises from 1970 up to andincluding 1975, plus interest thereon at the legal rate from January 1970 until fully paid;

4. ordering the restoration of ownership and possession over the five lots in question in favor of theplaintiffs in the same proportion aforementioned;

5. ordering the defendant to pay the plaintiffs the sum of P3,000.00 for attomey's fees; and to paythe cost of suit.

The counterclaim of the defendant is hereby ordered dismissed for lack of evidence presented tosubstantiate the same.

SO ORDERED. (pp. 11-12, Rollo)

The foregoing judgment became final when herein petitioner's appeal was dismissed due to its failure to file therecord on appeal on time. The dismissal was affirmed by the then Court of Appeals in CA-G.R. No. SP-12118 and bythis Court in G.R. No. 59938. Thereafter, herein private respondents moved for issuance of a writ of execution for thesatisfaction of the judgment. Respondent judge, on July 27, 1982, issued an order, to wit:

Considering that an entry of judgment had already been made on June 14, 1982 in G. R. No. L-59938 and;

Considering further that there is no opposition to plaintiffs' motion for execution dated July 23,1983;

Let a writ of execution be so issued, as prayed for in the aforestated motion. (p. 10, Rollo)

Petitioner, on July 30, 1982, filed a Motion to Quash the writ of execution on the ground that the municipality'sproperty or funds are all public funds exempt from execution. The said motion to quash was, however, denied by therespondent judge in an order dated August 23, 1982 and the alias writ of execution stands in full force and effect.

On September 13, 1982, respondent judge issued an order which in part, states:


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It is clear and evident from the foregoing that defendant has more than enough funds to meet itsjudgment obligation. Municipal Treasurer Miguel C, Roura of San Miguel, Bulacan and ProvincialTreasurer of Bulacan Agustin O. Talavera are therefor hereby ordered to comply with the moneyjudgment rendered by Judge Agustin C. Bagasao against said municipality. In like manner, themunicipal authorities of San Miguel, Bulacan are likewise ordered to desist from plaintiffs' legalpossession of the property already returned to plaintiffs by virtue of the alias writ of execution.

Finally, defendants are hereby given an inextendible period of ten (10) days from receipt of a copy

of this order by the Office of the Provincial Fiscal of Bulacan within which to submit their writtencompliance, (p. 24, Rollo)

When the treasurers (provincial and municipal) failed to comply with the order of September 13, 1982, respondentjudge issued an order for their arrest and that they will be release only upon compliance thereof.

Hence, the present petition on the issue whether the funds of the Municipality of San Miguel, Bulacan, in the hands ofthe provincial and municipal treasurers of Bulacan and San Miguel, respectively, are public funds which are exemptfrom execution for the satisfaction of the money judgment in Civil Case No. 604-B.

Well settled is the rule that public funds are not subject to levy and execution. The reason for this was explained inthe case of Municipality ofPaoay vs. Manaois, 86 Phil. 629 "that they are held in trust for the people, intended andused for the accomplishment of the purposes for which municipal corporations are created, and that to subject saidproperties and public funds to execution would materially impede, even defeat and in some instances destroy saidpurpose." And, in Tantoco vs. Municipal Council of Iloilo, 49 Phil. 52, it was held that "it is the settled doctrine of thelaw that not only the public property but also the taxes and public revenues of such corporations Cannot be seized

under execution against them, either in the treasury or when in transit to it. Judgments rendered for taxes, and theproceeds of such judgments in the hands of officers of the law, are not subject to execution unless so declared bystatute." Thus, it is clear that all the funds of petitioner municipality in the possession of the Municipal Treasurer ofSan Miguel, as well as those in the possession of the Provincial Treasurer of Bulacan, are

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